How Chinese leaders really launch reforms

Many expect China to lay out major economic reforms this weekend, but history shows that any changes that do come won't be quick.

Employees work inside a thermal power plant in Huaibei, Anhui province November 4, 2013. The message from Beijing could not be clearer: China needs to shift to a more balanced economy that is socially and environmentally sustainable.

As China’s leaders huddle this weekend for a key meeting due to set the country’s economic course for the next few years, speculation is rife that they will launch bold new policies to kickstart a new era of reform.

Don’t hold your breath.

Even if the Third Plenum of the 18th Communist Party Congress does agree on significant policy changes, experience suggests that there will be no drama; they will be introduced cautiously, over a matter of years.

China has transformed beyond all recognition since Deng Xiaoping launched “reform and opening” 35 years ago. But 35 years is hardly overnight. Rather than imposing a radical nationwide blueprint from the start, “China has adopted reform through trial and error,” says Xue Lan, dean of the School of Public Policy and Management at Tsinghua University in Beijing.

Deng had a famous phrase for it: “crossing the river by feeling the stones.” And that’s still how central government works today, allowing cities and provinces remarkable latitude to experiment and test different policies in different circumstances.

Local autonomy

Li Haijiang has reason to be happy about that. A stocky crane operator at the port in Qingdao, on China’s east coast, Mr. Li comes from a village 175 miles away. That means he has rural hukou, or household registration, and until recently that had made him a second-class citizen for the 19 years he had lived in Qingdao.

As a migrant worker denied the privileges enjoyed by his neighbors who were born in the city, Li could not send his daughter to public school, did not get the same standard of healthcare, and could not get a mortgage.

But Qingdao is at the forefront of employment and other reforms aimed at narrowing the gap between rural and urban hukou holders, and last year began issuing men like Li residents’ cards that give them the same rights as city-born people.

“Now I’m treated the same as any Qingdao native,” says Li. “There is no extra red tape.” To celebrate, within a month of getting his card in October 2012, Li says he went to the bank, secured a mortgage, and bought a 360 sq.ft. one-bedroom apartment for his family.

Beijing is keeping an eye on how Qingdao’s job market reforms go; such reforms will be critical to Prime Minister Li Keqiang’s vision of urbanizing tens of millions of farmers by the end of the decade and turning them into consumers who will drive new economic growth.

But central government is letting Qingdao get on with things as the city government sees fit, without interfering, says Song Ping, head of the employment department of the city’s Human Resources and Social Security bureau.

Beijing “sets the framework of integration between urban and rural areas, but Qingdao needs to work out the details itself,” Mr. Song says. “We have complete autonomy to set our own policies under general guidance from the government.”

When they work, he adds, “the government invites us to national meetings and presents us as an exemplary project to be introduced elsewhere.”

Unofficial experiments 

The initiative for such pilot projects can come from many sources.

Special Economic Zones, for example, which experimented with looser trade and investment rules, were created in specially chosen towns by central government fiat. But perhaps the most important reform in China’s transformation was born at the very bottom of society.

In December 1978, 18 peasant farmers in Xiaogang, in the southern province of Anhui, made a secret and completely illegal agreement to divide the land in their commune into family plots and to work them for their own profit. News of their bumper harvests soon spread; the farmers were lucky that their experiment matched the reformist spirit that Deng was instilling at the time, and the government encouraged peasants across the nation to follow Xiaogang’s heretical example. 

Many recent changes in China’s judicial system have sprung from equally spontaneous, unofficial experiments.

“Sometimes the Supreme Court or the Supreme Prosecutor’s Office will be in charge of pilot projects” to test possible reforms, says Guo Zhiyuan, who teaches at China University of Political Science and Law. “But in most cases it is scholars who play the most important role.”

Typically, she explains, law professors with reformist ambitions will use their networks of contacts in the courts or the police force – former students, perhaps – to set up pilot projects and test new ways of dispensing justice.

“For some projects, if you can get approval from the top it makes things easier, but for most you just need an agreement with your partner and his boss, like the president of the court,” says Prof. Guo.

Guo was involved in one of the best known experiments of its kind – a pilot project designed to reduce the use of torture by the police that ran in 2005.

Researchers persuaded the officers who ran three police stations – one in Beijing, one in the central province of Henan, and one in one of China’s poorest provinces, Gansu – to offer suspects three options before their interrogations: they could have a lawyer present, the interrogation could be videotaped, or it could be audiotaped.

Only one quarter of the suspects – the best educated among them – chose a lawyer as the best protection against having a "confession" beaten out of them. More preferred video or audiotape that could serve as evidence of torture in court. Since most criminal suspects in China are not well educated, giving them the right to ask for a lawyer did not seem to offer them as much protection as videotaping interrogations.

The government took the results of the pilot project to heart: The law obliges police across the country to make a videotape of all their interrogations of suspects in death penalty and life imprisonment cases.

“We used to be interested in learning about foreign legislation,” says Guo. But as experts debated the new Criminal Procedure Law that went into force last January, “we were more interested in creating something Chinese … better adapted to our reality.”

'Enlightened officials'

In other cases, enlightened officials have pushed for pilot projects that provided the impetus for nationwide reform. Zhang Erli, for example, was troubled by the harsh way China’s one-child policy was being enforced, and he was in a position to know: He ran the statistics and planning department of the National Population and Family Planning Commission and helped set the government’s population targets.

Keen to try to humanize some aspects of the policy, which was deeply unpopular in the countryside, Mr. Zhang set out to give women more choice of contraceptives and better quality of care.

He did so, he recalled later in an account of his efforts published in “Studies in Family Planning,” by persuading the cabinet minister in charge of family planning to support a pilot project in six counties in eastern China in 1995.

With that high-level backing, he chose locations where he had friends in the family planning offices, and where birth rates had already fallen. The projects went well, and after a couple of years the minister approved an expansion to five more counties. Women liked the new services, officials in nearby localities saw that they made the one-child policy easier to implement and decided to copy the projects, and by 2000 a central government white paper had endorsed the reforms for nationwide rollout.

The advantages of this step-by-step approach, argues Prof. Xue, is that “whether the impact [of the pilot projects] is positive or negative it is limited, and you can learn a lot by managing a trial about what works and what doesn’t.”

The disadvantage, he adds, is that “trial and error can lead to fragmentation of reform, and some reforms really need a more consistent approach. When there is huge inertia, trial and error won’t have enough momentum to break the barriers.”  

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