Challenges for China
Michael J. Fratantuono
Dickinson College

China is best envisioned as an amalgamation of several regions, each with distinctive characteristics, each with political structures that are both horizontally and vertically segmented.  Incentives currently in place at local levels may preclude the cooperation needed within and across regions to solve complex problems.

In the reforms of 1978, the Central Government bestowed autonomy on the chiefs of municipality-based special economic zones.  Mayors knew that if they could deliver five years of prosperity and oversee completion of a signature show-piece project, then they would get promoted to a higher rung in the Party hierarchy.  Based on the experience of the Greater Pearl River Delta—the area which includes Hong Kong, Macau, and nine major jurisdictions in Guangdong Province—the scheme worked: for example, Shenzhen, once a farming village of 30,000, is today a city of 12 million; Dongguan, similarly once a backwater, hosts the world’s largest concentration of furniture manufacturers and of supplier companies making springs, cord, cloth, wood, tacks, and glue.      

 But the incentive scheme also resulted in pollution, tough conditions for the working poor, redundant infrastructure, and underutilized public buildings.  To address such negative consequences, every city now has a department in urban planning.  Some have collected extraordinary amounts of data and built 100-slide-power-point depictions of their city that border on abstract art.   But one still wonders whether this is all a facade or if the prospects for implementation are actually substantial; after all, municipal leaders still engage in identify differentiation—“Locate here for ours is the Green City.” 

Making  progress through cooperation in one region alone will require new leaders, new institutional structures, and a new sense of regional identity.  Forging trans-regional alliances, also on the drawing boards, will be even more formidable.

            China’s extraordinary growth, coming as it did in a mixed economy, is testimony to the assertion that the market is a social institution more fundamental than capitalism itself.  Nonetheless, market processes have not yet permeated the nooks and crannies of everyday life in China.  As they become more pervasive, they will stimulate and at times necessitate further changes in China’s economic, political and social structures.

            As fixed prices gain an even stronger foothold, one may finally escape the feeling that everything in China is subject to negotiation or that fees for services vary from week to week or customer to customer.  Change will also be reflected in everyday habits and attitudes.  Uniformed managers of service organizations will abandon their officious air, forget about rigid rules, and adopt a flexible can-do attitude.