Review: Chinese public administration and finance—a call for a new theory, research and dialogue

Abstract

In implementing its national strategy to achieve global leadership, China needs a new public administration theory that integrates political administration, economic management and social regulation. Even so, China has already started to promote its brand of political and economic development abroad. Therefore new comparative research and dialogue is called to explore the universality of Chinese and Western public administration ideas.

Keywords:

• China national goals
• China national governance
• Chinese public administration
• comparative public administration
• national power

This unpreceded PMM theme of China is published at an historic moment. The 20th century was defined by the descent of the West, the rise and fall of the Soviet Union, and the fall and rise of China. Now, almost 20 years into the 21st century and 100 years after the October Revolution in Russia, the wheel of history has reached another milestone: the start of a ‘new era’ in which China is moving toward the centre of the world stage. With the United States in global retreat and the European Union mired in internal disputes, China is using its economic power to assert leadership on a number of international hotbutton issues (such as trade and climate change), and its financial strength to build a new transportation network through central Asia to reach the heartland of Europe. These moves have led some analysts to conclude that China is out to grab wealth and power (Schell and Delury, 2013). They are not wrong—the Chinese are almost obsessed about China’s ranking in comprehensive national power (for example, Wang, S. F., 1996). But, in my view, China also has two higher aspirations: cultural parity after 250 years of Western domination; and ideological vindication almost 30 years after the collapse of the Soviet Union. In other words, Chinese leaders seek affirmation that the Chinese Communist Party (CCP) has successfully managed the polity, the economy and the society of the most populous nation on earth.

China is now poised to present and justify its way of governing to the outside world, initially as an example for developing countries and eventually in Western countries. So far, the soaring rhetoric is backed up by a new political concept (‘a new era of socialism with Chinese characteristics’) and a new economic theory (structural economics). The repeated reference to ‘deepening reform’ reveals the Chinese leadership’s realization that it takes competent management to execute the reform agenda and a deep pocket to underwrite ambitious development goals at home and abroad. While its foreign ventures are relatively new, domestically the Chinese government has had a measure of success but also considerable challenges in these two areas.

For this PMM theme, we endeavoured to assemble reasoned policy analyses and documented cases of problems and solutions. Since the preceding papers deal mostly with domestic policies and practices, this concluding essay complements them by focusing on China’s long-term strategic goals and their international repercussions. I will first describe the historical context of the current Chinese core leader’s world view, which would require a supportive new theory of Chinese public administration. (For brevity, I shall use PA to stand for public administration, public management and public governance. I shall also consider public finance as a specialty in PA.) Such a PA theory, while incorporating useful Western techniques, would espouse values antithetical to those underlying Western PA. I therefore call for a kind of comparative PA research that would initially suspend value judgments to make it possible to have a meaningful dialogue before debating the applicability of established Western PA ideas and emerging Chinese ones.

The gap between theory and practice in Chinese PA

Chinese PA is currently superficially similar to Western PA in terms of techniques. Chinese and Western PA textbooks and journals seemingly have considerable overlaps in technical contents. The similarity in rhetoric is not reflected in actual implementation, with the exception of performance measurement in the campaign to improve administrative efficiency. The appearance of similarity has resulted from the translation of major English-language textbooks and papers into Chinese during the past several decades, in the belief that economically-developed countries have similarly advanced practices in other fields. In its Chinese representation, Western PA in practice and scholarship has focused on techniques on managing organizations, and is largely unconcerned about big questions and national goals. This Chinese perception (Liu, no date), however, is not entirely accurate. PA is a professional branch of political science, which, in turn, is fundamentally rooted in political philosophy. So mainstream Western PA is imbued with the values of liberal democracies.

This Western and technocratic approach to PA is exposing Chinese PA to double jeopardy. The first jeopardy is the pressure to repudiate the fundamental values underlying Western PA in the current de-Westernization drive in the academe. These values include: constitutional limitation on government; competitive elections; separation of powers among branches of government; and the rule of law. The second jeopardy is that the narrow organizational focus cannot meet the need for a coherent theory to relate bureaucratic administration to national governance for achieving President XI Jinping's vision for China to become a global leader.

Visions of leaders from Mao and Deng to Xi

Under MAO Zedong, China stood up in the eyes of the world; under DENG Xiaoping, China became wealthy. In 1949, Mao unified China after the CCP's struggles over three decades to come to power. He continued the revolution with ruthless political purges in the 1950s, and the Great Leap Forward Movement, in which economic mismanagement and natural disasters resulted in the death of 30 million people in famines from 1958 to 1960. This was followed in 1966 by the 10-year Cultural Revolution, in which Red Guards made China virtually ungovernable. Mao's ruinous legacy made economic development imperative to prevent China's collapse. Beginning in 1978, Deng used the tools of capitalism to save socialism by opening China to foreign investments and allowing markets to develop alongside the planned economy. Abundant cheap labour made China the factory of the world, and exports greatly expanded after China's entry into World Trade Organization (WTO). Under Deng's auspices, the term ‘socialist market economy’ was coined to cover China's state capitalism (Economist, 2012), and modification to Marxism was legitimized with the label ‘Chinese characteristics’. Deng's folky slogan ‘Getting rich is glorious’ gave license for all—households, businesses and governments alike—to create wealth, and pile up debts.

Since he came to power in 2012 and became the most powerful Chinese leader after Mao in late 2017, Xi sees his historic task as to transform China's wealth into global power and eventual ideological victory. After 40 years of economic reform and trade, China has become the world's largest or second largest economy (by purchasing power or nominal GDP, respectively), the largest exporter, and owner of the largest foreign currency reserve, among other world records. After inheriting this great national wealth, with a keen sense of history, Xi has declared a series of ambitious national goals: a moderately prosperous society by 2021 (the centenary of the CCP), a global great power by 2050 (the centenary of the People's Republic), after having become a fully modern economy and society by 2035. He calls all these steps toward fuxing, the rejuvenation of the Chinese nation, after over 200 years of humiliation by Western powers (Xi, 2017). Such a Chinese renaissance would earn China grudging respect (Ringen, 2016), and would also validate Marxism–Leninism as the governing philosophy not only for China, but also for developing countries, and eventually for the ‘community of common destiny of mankind’ (Xi, 2017; see Gerscher [2015] for a comparison of this concept with ‘all under heaven’). Transcending wealth and power, such an ideological victory would give Xi, the CCP and China the ultimate recognition of gui, the Chinese notion of nobility, signifying cultural parity or even superiority relative to the West. Therein lies the significance of Xi's speech to CCP congress in October 2017; see Gerscher (2017) for its underpinning in Chinese philosophy.

In support of this grand transformation, Chinese political scientists and economists have developed new theories: new authoritarianism (Wang, H.-N., 2004) and structural economics (Lin, J. Y.-F., 2013). In contrast, the Chinese PA profession has not publicly offered comparable theoretical support, judging by the information available on the official website of the Chinese Public Administration Society (www.cpasonline.cn). Perhaps this is due to the status of PA as a bureaucratic adjunct—the CPAS is overseen by the secretariat of the State Council. Based on what we have found out about Chinese PA (Chan and Wang, X. H., 2018), such a theory requires the following distinguishing elements.

A new theory for Chinese PA

Defining PA as a technical field for administering the bureaucracy significantly understates the broad scope and deep reach of the Chinese state in political administration, economic management, and social regulation.

A theory of Chinese PA needs to take into account the CCP's dominance over China's governance structure. Rather than minding only the bureaucracy, Chinese PA theory should encompass the entire governance structure under the CCP and financed by the public treasury. This, of course, includes the people's government (the executive), the legislature, and the judiciary. It should also highlight the CCP at the pinnacle of the political system that encompasses collaborating political groups and a collection of auxiliary public bodies (Heilmann, 2016). As Xi recently declared: ‘The Party exercises overall leadership over all areas of endeavour in every part of the country’ (Xi, 2017). By ‘all’, he meant: ‘the party, the government, the military, the civil society, and the academe; east, west, south, north, and the centre’, according to the Chinese transcript of his speech (Xi, 2017).

A theory of Chinese PA should incorporate state enterprise management. The Chinese government's signature economic achievement was to turn-around money-losing state enterprises into pillars in the domestic economy, and global corporations and financial institutions in many cases. Yet, their public ownership is obscured, perhaps for fear of being labelled ‘state capitalism’ (Economist, 2012), or for hope of being designated a market economy. Regardless, the fact remains that the government appoints their senior corporate management, and the party secretary commands their strategic decision-making process.

A theory of Chinese PA theory should not ignore intrusive social regulation by government. In the name of promoting social stability, the Chinese state has modernized social monitoring and control with 21st-century information technology. The latest development is an ambitious system to use ‘big data’ to track and use social credit scores assigned to individuals (PRC State Council, 2014) to modify their behaviour. Extending thought control over intellectuals (Chan, 2017), a high-level State Curriculum Commission has been established to ensure young people's ideological purity (PRC State Council, 2017). These ‘social governance’ measures, dubbed ‘digital authoritarianism’ by Heilmann (2017), downplay fear and invasion of privacy and civil liberty.

In summary, in keeping with actual practice, a new PA theory for China should cover all institutions participating in national governance, and state enterprises. It should also be attentive to the dysfunctional consequences of intrusive government regulation of society.

Of course, China as a sovereign nation has every right to manage the political, economic and social life in China. However, when China leverages its economic power to exert political and cultural influences overseas, the China factor could no longer be ignored by the international PA community.

The China factor

The preceding papers in this PMM theme have properly dealt with inter-governmental relations as China's internal affairs. However, as China goes global, inter-governmental relations take on a whole new international dimension. Inter-governmental relations at the international level is conducted by national governments. Officially, China pledges no interference in the domestic affairs of other nations. However, its international economic agenda (see below) creates inter-governmental complications for itself and others. For example, the Chinese central government has been encouraging provinces and local governments, including Hong Kong, to actively participate in the Belt and Road Initiative of connecting China with Eurasia. China counts on the national governments of the participating countries to work through their own inter-governmental relations to deliver on terms of international co-operation. The demand for usable knowledge about how governments work in countries under different political, economic and social systems has increased greatly for all concerned. While public and media attention focus on the visible projection of China's economic power and display of military power, it seems the response of the public management and public finance professions has been slow relative to Chinese rapid moves. For example, Mathiasen (2005) paid no attention to China in discussing international PA practice. China could no longer be ignored now.

From participant to creator of new institutions

China is using finance as a strategic resource in advancing its national interest. In existing international institutions, large financial contributions have increased China's influence in the form of voting shares, appointments to management and staff positions, and a stronger voice in the decision-making process. For example, China has become the largest contributor of the United Nations peace-keeping forces. China's increase in shares of the IMF led to changes the organization's internal governance. Similarly China increased its shares in the World Bank, and the G20 has eclipsed the G7 in global affairs. In these settings, China is expected to be a ‘responsible stakeholder’, in the words of Robert Zoellick, an American diplomat, in institutional structures set up by and dominated by Western powers after the Second World War. China has largely obliged.

In addition to strengthening existing relations, China has taken a leading role in creating a number of economic development alliances and financial institutions, notably with developing countries and along the planned expanded Silk Road. The alliances include: the Belt and Road Initiative, involving 65 trading partners; BRICS: covering Brazil, Russia, India, China and South Africa; the Shanghai Co-operation Organization; and the China and Central- and East Europe Co-operation (‘16+1’). The financial institutions include: the Asian Infrastructure Investment Bank (AIIB); the New Development Bank (NDB) of the BRICS emerging economies; and the Silk Road Fund. In these situations, as a (co-)founder or a managing partner, China played a decisive role in designing the institutional structures and setting their standard operating procedures of international PA and finance.

From importer to exporter of ideas

So far, the flow of PA information has been mostly one way, from the West to China. Scores of books and hundreds of journal articles on Western PA have been published in China. As China imported the techniques of Western PA, it has ignored or filtered out their embedded political values. On the other hand, Chinese PA is relatively under-represented in the international comparative PA literature. It is completely absent in the national and international comparisons section of Ferlie et al. (2005), even though some comparative PA texts include a chapter on China (for example, Chandler, 2014). China is still conspicuously absent in leading research reference books (Ferlie et al., 2005; Pollitt and Boukaert, 2017). It would be an exaggeration to say that there is a body of systematic knowledge about Chinese PA in the comparative PA literature. This imbalance is in part due to prospective authors’ sensitivity about offending China and concern about unauthorized disclosure of confidential or sensitive information about government operations.

Under official sponsorship, this intellectual trade imbalance is being reversed. Following the example of Western powers (Said, 2004, pp. 34–36), in the last few years, as part of the campaign to tell China's story and transmit China's voice, China's public intellectuals began to communicate China's model of national governance to an international audience. China is taking advantage of the openness of Western society to launch English editions of Chinese journals and export foreign (mostly English) editions of books about China's governance. A notable example is that Xi's book on governing China (Xi, 2014) was translated into seven languages for global distribution. Several new books in English were published to tell the outside world about the CCP (Li, J.-R., 2012), the CCP's governing principles (Li, Z.-J. et al., 2012; Li, Q., 2014), how the CCP intends to realize the Chinese Dream (Huang and Luan, 2013; Li, J.-R., 2014). China is eager to share its experience in national development with other countries, and has established a half-billion (US$) fund and a postgraduate institute to train officials from developing countries (PRC Department of Commerce, 2016; Lin, J. Y.-F., 2017; Xinhua Net, 2017). These are some examples of China's ideological, geopolitical and economic challenges to the West in the midst of ‘Easternization’, the larger trend of the shift of wealth and power to Asia (Rachman, 2016; 2017). As President Xi recently said:

 … socialism with Chinese characteristics entering a new era means … that the path, the theory, the system, and the culture of socialism with Chinese characteristics have kept developing, blazing a new trail for other developing countries and nations who want to speed up their development while preserving their independence; and it offers Chinese wisdom and a Chinese approach to solving the problems facing mankind (Xi, 2017).

China's current outreach to the rest of the world has elicited naive surprises and mixed responses. It has been described as ‘sharp power’ (National Endowment for Democracy, 2017) and ‘information warfare’ (Nye, 2018). The governments of Australia and the US, for example, are devising counter-measures (Patey, 2017; Rachman, 2017). Nye (2018) counsels against over-reaction, pointing out that openness is a soft power of democracies. I agree, and favour competition in the open market of ideas. Specifically, I urge new comparative PA research that explicitly takes the China factor into account—by scholars inside and outside of China.

Research by China-based scholars

China-based PA scholars have the authenticity and responsibility to articulate PA with Chinese characteristics. Thirty-five years ago, XIA Shuzhang, the most senior PA scholar in China, urged Chinese PA researchers to follow the guidance of the theory of socialism with Chinese characteristics, using the scientific method and taking into account the realities in China (Xia, 1982; Liu, no date). Indeed, it is the China-based scholars’ unique contribution and professional responsibility to articulate the Chinese perspectives on socialism, market economy, and democracy—and their implications for running the country and government. All these concepts have been tagged with ‘Chinese characteristics’. It would be informative to the outside world to know the ingredients of the powerful cultural solvent that historically assimilated foreigners, ranging from the invading Mongolians (13th century) and Manchus (17th–19th centuries) to modern Western advisors (Spence, 1969), and now being applied to Marx and Lenin. It is time for PA researchers to follow the lead of political theorists who explain and justify the China model (Lin, S.-L., 2000; Wang et al., 2004). The urgency of this research task is prompted by the call to ensure that all university curricula, presumably including PA curriculum, to conform to Sinicized Marxism and Leninism. Such a project, probably already underway, would have far reaching consequences for PA research and education in China.

Another opportunity comes from President Xi Jinping's call to reach into China's long intellectual history for ideas about how to govern China. His speeches so often invoked ancient wisdom that the quotations have been compiled (Xi, 2015). For example, when asked how he could govern a country of 1.3 billion people, he responded by quoting Laozi's Daodejing: ‘Governing a big country is as delicate as frying a fish’ (Xi, 2014, p. 458). A content analysis of these quotations might find the inspirations for ‘Xi Jinping thought’ now enshrined in the CCP's charter. Since previously it was politically incorrect to learn from the feudal ancients, this would be a welcome and, for most Chinese PA scholars, arduous learning opportunity to systematically discover the intellectual foundations of their discipline by reading history of political philosophy, such as Sa (2008, originally 1972) and Xiao (2010, originally 1940). This unprecedented merger of how Marxism–Leninism and Confucianism– Legalism, if successful, would result in a grand East–West synthesis.

The current official drive of de-Westernization is also giving China-based PA scholars the license to critically analyse Western PA ideas and practices. So far, official condemnation, articulated by establishment political scientists, is directed at features of liberal democracies, such as multi-party competition in popular elections, constitutional separation of powers, independent judiciary and a free press. In view of the link between politics and PA, the ideological critique could sooner or later be extended to Western PA ideas and practices. That would provide the Chinese PA scholar with an opportunity to expand their knowledge beyond the US and UK, and trace the field's intellectual DNA to ancient and modern Western political philosophers. They would likely find as many disagreements as agreements (Cohen and Fermon, 1996; Morgan, 1996). This would mirror the ‘one hundred schools contend for dominance’ in pre-Qin China—something to ponder by Chinese officials so self-confident and so eager to close the debate about the best governance model for China and other countries.

Thus we could be entering the golden age for Chinese PA research. Chinese leaders in the past three decades have recognized the critical importance of strengthening the CCP's capacity to lead the country (CCP, 2004), and the government's capacity to implement policies (Hu et al., 2003). This recognition has created favourable conditions for research on governing in China and in the West, in the present and in the past. After several decades of mostly uncritically learning from the West, China-based PA researchers now have the political mandate—and the intellectual challenge—of coming up with the strongest possible defence for Chinese PA.

As it is too much to expect uncensored views to come out of China, it is the role of Western PA scholars to fill in this gap.

Research by scholars in the West

Government officials everywhere are in charge of PA practice, but in Western democracies the development of PA theories is the purview of the scholarly community, whose independence is shielded by academic freedom and whose voice is protected by freedom of expression. (This does not mean that theory and practice do not overlap or should not be integrated, or that academics do not teach based on practice. It means only that academics have the freedom to endorse or not endorse official positions, and to agree or disagree with the value premises underlying practice.) Indeed, one could choose to do either basic or applied research.

The same as their Chinese colleagues, Western PA scholars could study the intellectual foundations of Chinese PA. There is already what might be called ‘first-generation historical Chinese PA research’ by Western scholars. Notable examples were Hood (1998), which regarded Confucian hierarchy ‘the grand-daddy’ of all PA theories; and Frederickson (2002), which credits Confucius with providing the moral foundations of bureaucracy. Their common feature was the exclusive focus on Confucianism. The time has come for a second-generation research agenda. Drechsler (2013) conceived a research programme to compare Confucian PA with Islamic and Western PA, structurally reminiscent of a clash of civilizations (Huntington, 1996). China occupies a major portion in Fukuyama (2012; 2014), the most comprehensive world history of political development since Finer (1997). Since Confucianism, though dominant, is by no means the only Chinese philosophical tradition, new research might bring in others, such as Legalism, whose contemporary relevance is obvious when one considers the strong law-and-order approach to governing in China today. Indeed, Lin, D. (2017) suggests that the CCP has exploited both Confucianism and Legalism to its own ends. On a larger scale, there is a striking parallel between China the modern Marxist–Leninist state, and ancient China the Confucian–Legalist state (Zhao, 2016).

In the applied vein, Western PA scholars have the independence and freedom to examine and assess current Chinese PA theory and practice. Some may regard it as their responsibility to push back what President Xi and his loyal intellectuals so self-confidently assert as the only proper way to run China; see Patey (2017) for examples of resistance to China's perceived overreach. The response might grow stronger when the Chinese seek to persuade developing countries to adopt or adapt the Chinese system of governance. Western PA scholars might wish to defend Western political and cultural values, hopefully by reason and not by reflex, and do so in full awareness of the history of Western colonial rule. In this regard, one would hope that Western scholars would take the Chinese critique of Western values and practices seriously. For example, American democracy has degenerated into populism, electoral responsiveness has led to unsustainable deficits, and unlimited campaign contributions have corrupted politicians and the political system. A re-examination of the value premises of Western PA may well be in order, and one may question whether PA is or could even be, a values-free professional practice in any country.

A clash between defenders of Chinese PA and Western PA may well ensue as each side advances its viewpoints. As values are a matter of conviction, the two sides may well agree to disagree. At least they should come together for a dialogue in the interest of reducing misunderstanding.

A call for dialogue

A dialogue is a conversation for exchanging information and points of view. As opposed to a debate, a dialogue requires a high degree of open-mindedness and a willingness to suspend value judgments, at least temporarily. In a way, that is the spirit of comparative research in PA. Against this backdrop of a brewing ideological cold war between China and the Western liberal democracies, I call for a dialogue between Chinese and Western PA scholars to promote mutual understanding.

A model of constructive intellectual engagement is provided by a Sino-American collaborative project examining China's political development. The project was sponsored by two think tanks—the China Centre at the Brookings Institution in the US and the China Centre for Comparative Politics and Economics in China—and financed by the China–US Exchange Foundation in Hong Kong. A group of leading Chinese political scientists wrote papers analysing virtually all major aspects of China's political system for presentation at a seminar in China, where the papers were analysed by American political scientists specializing on China. A follow-up forum on Chinese governance was held in the US. A collection of the papers and commentaries was published in Chinese in China (Yu and Lieberthal, 2013) and in English in the US (Lieberthal et al., 2014). The Chinese participants, being part of the establishment, defended the Chinese system and government policies, and the American participants did not hesitate to voice their criticisms. The result was a cordial, yet forceful, display of Chinese and American perspectives.

I propose a similar dialogue, in person or in writing, between Chinese and Western PA scholars to address some big questions in comparative PA. As suggested earlier, there is already considerable agreement in the technical or scientific aspects of PA in China and the West. There is much less agreement about the scope and purpose of the PA discipline and profession, i.e. about the big questions. Indeed, there may not even be agreement over what these big questions are. Behn (1995) challenged the (American) PA profession to raise ‘big questions’ and proposed these topics: micromanagement, motivation and measurement. There are bigger questions than these. Big PA questions should connect PA to a nation's aspirations on the world stage, such as:

• Historically, what role, if any, did PA play in the rise and fall of nations?

• Now, and in the future, what can PA do to help a country succeed (or prevent a country from failing)?

• What are the universal values, if any (for example, professional ethics), in PA for all countries?

• What are the values underlying PA in a liberal democracy and in an authoritarian country?

• What lessons, if any, could the West learn from China, and China from the West?

Apparently heeding Daniel Burnham's ‘make no little plans’ advice, President Xi has set goals that have ‘the magic to stir Chinese blood’, to paraphrase the Chicago architect. Such lofty goals affecting the world order demand answers to these big questions for years to come.

IMPACT

This review essay would be impactful if government officials in charge of the professional bodies in Chinese public administration (PA) would respond to the call to: articulate and defend what is officially meant by PA with Chinese characteristics; define and defend what is objectionable about Western PA that should be got rid of in China; and engage in a dialogue with their counterparts in Western countries to explore the potentials and limitations of universal principles in PA worldwide.

Acknowledgement

I am indebted to Xiaohu Wang for his critical comments and constructive suggestions.

Additional information

Notes on contributors

James L. Chan

James L. Chan is Professor Emeritus of Accounting, University of Illinois at Chicago, USA.