Political Recentralisation and the Diffusion of Solar Energy in China

Abstract

This article uses principal–agent theory to examine the governance of solar energy in China and question the notion of ‘fragmented authoritarianism’ in Chinese governance. It demonstrates that the governance of solar energy in China operates on two levels, with ‘police patrol’ control and monitoring mechanisms at the meso- or sectoral level combined with ‘fire alarm’ modes of political control at the micro-level. Drawing on original interview material, we argue that this two-level model and distinct set of supervisory institutions have allowed China, as a relatively late entrant into the solar energy sector, to address the growing environmental emergency within China and catch up technologically with the West.

Notes

1 ‘Police patrol’ oversight involves the routine scrutiny of policy implementation in order to ensure that bureaucrats are working towards intended policy goals. In the literature, police patrol practices are contrasted with ‘fire alarm’ mechanisms, which often rely on outside actors to raise issues about the implementation and administration of policy. The former tend to be more centralised than the latter, which by their nature rely on a degree of decentralisation and active stakeholder involvement.

2 Conventional fossil fuel energy fields such as oil, gas, and coal-fired plants still suffer from ineffective policy implementation embedded in the old governance system, which can be described as fragmented authoritarianism (Andrews-Speed 2012; Kostka 2016).

3 Bureaucratic slippage or policy drift refers to the phenomenon by which policies change over time through constant reinterpretation. Hacker (2005) argues that policy drift is an almost inevitable outcome of institutional stasis. If not corrected, this can lead to substantive changes in the scope and outcomes of policies without any explicit policy reforms taking place. The implication is that active monitoring and correction of policy implementation and subsequent adjustment is required to ensure that the original objectives of a particular policy or set of policies are maintained.

4 Shen and Xie (2018) describe the reality of the attribution of responsibility-sharing among major agencies in the development of renewable energy in China. Similar observations are found in our interview material, with interviewees such as Wu Lei, Jiangsu Economic and Information Technology Commision, Nanjing, 24 April 2013 and Wang Pei-hong, Secretary-General of Energy Research Association of Jiangsu Province, Nanjing, 1 March 2013, who pointed out that, according to different policy needs, government and economic actors must, according to their tasks, coordinate with many different provincial departments. However, our findings indicate that the distribution of responsibilities does not mean that the power in the localities is shared equally among different stakeholders. On the contrary, when asked who was the most influential actor in the development of renewable energy, all respondents pointed out that the NDRC is the key influencer in this field, holding more power over decision-making in the sector than local government officials in this regard (see the Appendix for the full list of interviews). These sentiments inspired us to consider treating the NDRC as the principal in our initial theoretical discussions.

5 Adverse selection occurs under conditions of information asymmetry where the agent is able to ‘rig the market’ or make decisions that are not necessarily in the interests of the principal (Dionne et al. 2001).

6 Central inspection teams undertake inspection tasks in localities, which would normally be stationed in selected areas, and welcome any sort of reporting or appealing activities from local residents. Apart from routine or special issue inspections, at times, the teams would pretend to leave one area they had been previously stationed, then turning back again to the area for a further investigation assuming the potential suspects slacken their vigilance.

7 Jiangsu Province was chosen because in 2010 it emerged as one of the biggest hubs for global solar energy production. The province is home to 70% of solar PV manufacturing capacities in China, producing one quarter of solar PV equipment in the world (Zhou & Zhang 2010, p. 83). The province also plays an influential role in terms of solar energy consumption; it has the greatest capacity to transmit electricity generated from solar power. The province ranked first among all Chinese administrative units in 2015 (CNREC 2016, p. 59).

8 Interview with an anonymous informant at Jiangsu PDRC, Nanjing, 26 April 2013.

10 Interview with an anonymous informant at Jiangsu PDRC, Nanjing, 26 April 2013.

11 Moral hazard refers to situations where the one actor (normally the agent in principal–agent theory) takes risks because the potential costs of such behaviour will be carried by another actor (normally the principal). This kind of behaviour takes place under conditions of information asymmetry and the concept is, therefore, related to that of adverse selection.

12 Interview with Gengsheng Cao, Secretary-General of Jiangsu Renewable Energy Association, Nanjing, 27 February 2013.

13 Interview with an anonymous informant at Jiangsu PDRC, Nanjing, 26 April 2013.

14 Interview with Qian Zhang, Deputy Director General of Jiangsu Provincial Bureau of Quality and Technical Supervision, Nanjing, 27 March 2013.

15 Interview with Pei-hong Wang, Secretary-General of Energy Research Association of Jiangsu Province, Nanjing, 1 March 2013.

16 Interview with an anonymous informant at Jiangsu PDRC, Nanjing, 26 April 2013.

17 Interview with Andy Zhong, marketing director of China Sunergy Co. Ltd, Nanjing, 1 April 2013.

18 Interview with an anonymous informant at Jiangsu PDRC, Nanjing, 26 April 2013.

19 This top-down maintenance of accountability is very different from having a constituency of voters to satisfy in Western democracies but has, to a considerable extent, maintained the continuity of the governing system in China.

20 Interview with an anonymous informant, a senior official in the Department of New Energy, Jiangsu Energy Bureau, Nanjing, 29 March 2013.

21 Interview with Will Sun, project director of Jiangsu PV Power Station, China Sunergy Co. Ltd, Nanjing, 1 April 2013.

22 Interview with Qian Zhang, deputy director general of Jiangsu Provincial Bureau of Quality and Technical Supervision, Nanjing, 27 March 2013.

23 Interview with Ruiling Xu, secretary-general of Jiangsu PV Industry Association, Nanjing, 4 March 2013.

24 Interview with Jinwei Zhu, legal director of ET Solar Corporation, Nanjing, 13 March 2013.

25 See also Kostka (2016, p. 67), Eaton and Kostka (2017).

26 See also Xu (2014).

27 As for the development of photovoltaic power, this target firstly set a national assessment target after five years onwards: the scale in 2020 is set to reach 105 million kilowatts to replace the annual amount of the consumption of coal (NDRC 2016a, Article 3.6).

28 Interview with Will Sun, project director of Jiangsu PV Power Station, China Sunergy Co. Ltd, Nanjing, 1 April 2013.

29 Interview with an anonymous informant, chief executive officer of a solar and wind power equipment manufacturing company, Suzhou, 17 March 2013.

30 It should be noted that information flows between the central government and the provinces are framed within the constraints of what remains a highly authoritarian political system. The fact that many of our interviewees insisted on speaking off the record (or even remaining anonymous) indicates the kind of constraints under which individual actors continue to operate in China.

Additional information

Notes on contributors

Geoffrey C. Chen

Geoffrey C. Chen, Department of China Studies, Xi’an Jiaotong–Liverpool University, Humanity and Social Science Building, 111 Ren'ai Road, Suzhou 215123, People’s Republic of China. Email: [email protected]

Charles Lees

Charles Lees, College of Business, Government and Law, Flinders University, Bedford Park Sturt Road, Adelaide, SA 5042, Australia. Email: [email protected]