“The more the universe seems comprehensible, the more it also seems pointless.”

and other Steven Weinberg quotes

http://thinkexist.com/quotation/the_more_the_universe_seems_comprehensible-the/327172.html

China's Market-Oriented Reforms in Retreat

http://english.caixin.cn/2011-07-05/100275974.html

Economist: China's Market-Oriented Reforms in Retreat

Wu Jinglian, researcher at the Development and Research Center at the State Council, said reforms to the state economy have undergone a reversal of momentum since the start of the 2000s

(Beijing) - China's "market forces have regressed" as government agencies have started to play a more obstructive role in resource allocation, Wu Jinglian, one of China's foremost economists, said on July 4.

(Wu Jinglian/Li Mo)

Although the state economy no longer contributes a major portion to gross domestic product, it maintains a monopoly in sectors like petroleum, telecoms, railways and finance, Wu said in a keynote speech in the opening ceremony of a global conference sponsored by the International Economic Association.

Governments at various levels also have a huge hold over major economic resources such as land and capital, said Wu, who serves as a researcher of the Development and Research Center at the State Council.

China still lacks a legal foundation that is indispensable for a modern market economy. Government officials intervene in the market at their will through administrative means, said Wu.

China's market forces gained vigor when the pricing of goods was liberalized in the early 1990s and millions of township enterprises were privatized at the turn of the last century, said Wu.

Entering the 2000s, however, the reform of state-owned enterprises suffered a setback, and SOEs have inhabited an increasingly assertive role in the market at the expense of private businesses. "The government has acted more intrusively in the name of macro-economic regulation," said Wu.

In China, there have been two distinct views over the origins of China's rapid economic growth.

One view attributes the achievement to the "China model" marked by the domination of the state economy and the forceful regulation over the economy by the government.

The other view holds that the high-speed growth was the result of market-based reforms and the liberation of the entrepreneurial spirit of the people.

For this question, Wu noted the current growth model is unsustainable and has been built on investment that exploits resources and damages the environment.

Another consequence of strengthened government control over the distribution of resources and active intervention in economic activity is more corruption and a larger wealth gap, said Wu.

A shift towards social governance in China

http://www.eastasiaforum.org/2011/09/09/a-shift-towards-social-governance-in-china/

September 9th, 2011

Author: Yu Keping, Peking University

In recent years, a new institution has been established within the Chinese Communist Party (CCP): at the very beginning of each year, a senior workshop of leading officials at the ministerial or provincial level is held at the Central Party School.

At this workshop, the priorities of each year’s work are laid out. This year’s Central Party School workshop, held in February, focused on ‘social management innovation’ (社会管理创新). President Hu Jintao, general secretary of the CCP, delivered a keynote speech which indicates that ‘social management innovation’ has now been placed at the top of the CCP agenda.

What exactly is ‘social management’? It is difficult to find an English translation that accurately reflects the Chinese meaning of ‘social management’. It is one of many political terms that are difficult to define outside their Chinese context. Broadly speaking, social management means the government manages and regulates social affairs (社会事务), social organisations (社会组织) and social life (社会生活), with the guidance of law. The connotation of social management is so broad that it includes areas such as social justice, public security, social stability, social trust, the coordination of various social interests, food safety, emergency management, city management and community governance. In other words, social management encompasses all government dealings with society, excluding business management and administrative management. Social management in China, therefore, could be understood as social governance that distinguishes itself both from economic governance and state governance.

The term ‘social management’ first appeared in the Proposal to Restructure the State Council, adopted by the central government in 1998. According to this proposal, the basic functions of government include ‘macro-economic control, social management and public services’. After that, social management began to gain prominence in the agendas of both the party and government. ‘Social management’ was further elaborated on in the 16th and 17th party congresses. ‘Strengthening and innovating social management’ was a focus at the Fifth Plenary Session of the 17th Central Committee in 2010. According to the resolution of this session, ‘the general principle of social management is party leadership, government responsibility, social coordination and public participation. Relevant laws, institutions and capacities should be perfected and strengthened in order to be compatible with the demands of social management. Laws, regulations and policies need to be perfected, management and service functions of grassroots governments strengthened, the CCP’s organisational work at grassroots level improved, the functions of mass organisations and social organisations be fully exploited, and community autonomy and service functions enhanced.’ By following these actions, the CCP aims to improve social management and sharpen government capacity for delivering public services.

Why did China direct its focus of governance reform specifically towards social issues? At the very beginning of reform and opening up in the late 1970s, the major difficulties China faced included a backward economy, extreme poverty, administrative inefficiency and an ineffective legal system. Put differently, the major tasks at that time were to reform economic governance and state governance. After more than 30 years of reform and opening up, China has achieved rapid economic growth, accompanied by great improvements in people’s living standards, enhancement of administrative efficiency and the establishment of a basic legal system. With the establishment of the market economy and acceleration of industrialisation and urbanisation, the monolithic party-state governance model has become unsustainable — the functions of government have experienced tremendous change, social or civil organisations have rapidly emerged, the traditional working unit system (单位体制) has collapsed, the household registration system is under pressure to change, and the domestic migrant population is surging. Because of these changes, a lot of new social issues have emerged. Social stability has become a prominent problem and a crisis in social governance is ever more likely. Strengthening and perfecting social governance has become a pressing priority for the Chinese government.

In recent years, there have been some courageous institutional reforms in the social sphere, including the establishment and improvement of civil rights mechanisms, the protection and coordination of public interests, social safety, public security, social stability, public service, emergency management and grassroots governance, as well as social autonomy. The government has tried hard to broaden the scope and improve the quality of public service, establish a social security network as well as promote social autonomy. The ultimate purpose of social governance reform lies in mitigating the threat of social conflicts and safeguarding social order and stability.

A noticeable development in the recent social governance reform is that the Chinese government is attaching more importance to civil society. The CCP’s general principle for social management is ‘party leadership, government responsibility, social coordination and public participation’. A larger role for social organisations in social governance is an indispensable element of ‘social coordination and public participation’. By 2010, there were over 450,000 registered civil organisations and 250,000 community organisations, respectively, in China. If we take unregistered civil organisations into account also, the overall number would jump to over three million. The government has taken a cautious attitude towards civil organisations. More recently, however, top leaders have advocated the participation of social organisations in social management innovation. Top Chinese leaders even made it clear that social organisations would receive more support and encouragement from the government. In the recently adopted 12th Five-Year Plan on Social and Economic Development of China, ‘pushing the development of social organisations forward’ was given an unprecedented level of attention. These changes indicate that although the government has never made reference to the term ‘civil society’ in official documents, it now recognises its importance.

With continuing urbanisation, modernisation and democratisation, the Chinese government is certain to face more pressure in maintaining social stability. Social governance reform is a way for the government to release social pressures and maintain social stability. Success will largely rests on the growth of democracy and rule of law, increased civil engagement and social autonomy, and development of civil society.

Yu Keping is Professor and Director of the China Center for Comparative Politics & Economics (CCCPE), and also Professor and Director, Center for Chinese Government Innovations, Peking University.

This article was published in the most recent edition of the East Asia Forum Quarterly, ‘Governing China’.

Local versus central governance in China: Providing basic public services

http://www.eastasiaforum.org/2011/09/17/local-versus-central-providing-basic-public-services/

"At present, government revenues to provide basic public services are distributed unevenly between the central and local governments. Since the tax distribution system was set in 1994, the central government has been responsible for 50 per cent of all public revenues. Despite this, it has provided less than 10 per cent of the funding for the three basic public service spheres of compulsory education, public health and social security. Ninety per cent of the fiscal investment in these areas is carried out by local governments.

Differences in revenue between regions ensure that the level of basic public services provided across those regions will not be equal. For the most part, the level and quality of public services in the developed eastern regions are much higher than in the less-developed western regions. This phenomenon is very clear in the three public services spheres under discussion.

The current system of transferring revenue inhibits the provision of basic public services on a more equal footing. Not only does it fail to promote equal distribution of basic services, but it has also widened regional differences in service provision.

If China wants to achieve the goal of delivering public education, public health and social security at equal level across the nation, then the central and provincial governments should assume equal fiscal responsibility for providing these services. To this end, financial and administrative powers should be redistributed between the central and local governments until they match each other, and the current system of public revenue transfer should be reformed.

To achieve this, the existing system of tax revenue return should be gradually abolished. All general revenue transfer items should be integrated, bringing their attributes and functions into play. In addition, special revenue transfer programs should be strictly limited, and a better system of sub-provincial revenue transfer developed. It would also be profitable to explore a new system of revenue transfer which combines the current vertical and horizontal transfer systems."

China’s prospects for diminishing regional disparities

http://www.eastasiaforum.org/2010/08/31/chinas-prospects-for-diminishing-regional-disparities/

"Will rapid industrial development in the less-developed centre and west reduce these inequalities in the next two decades?

This question permits an optimistic response: ‘yes, it is possible’. Recent analysis indicates the glory days of the east’s industrial dominance could be coming to an end, with the region no longer performing above the average across the broad spectrum of industrial sectors. In addition, there is evidence of rising costs in the east, which will provide the impetus for industrial upgrading there. In this context, a serious and committed pro-west (or at least non-pro-east) regional policy with substantial funding well spent on infrastructure and education could play a positive role in triggering self-sustaining industrial development outside the eastern region. Rising incomes in the east could provide a crucial source of demand for non-eastern products, with the east possibly becoming for western China what the industrialised world has been for the eastern region during its own industrial take-off – a stable consumer market.

However, for this to translate into a reduction in regional income inequalities would require the western region to grow faster than the east by at least 2 percentage points.  It is unlikely that changing patterns of industrial development in response to market forces and the current set of regional policies will be sufficient for achieving this objective . Even when taking other non-industrial factors into account, such as the potential for out-migration and resource rents to raise the per capita incomes of those who remain in the western region, it is unlikely that the speed of growth in western China will drive Chinese regional incomes towards equality.

The pessimistic response is that; ‘no, industrial development in the less-developed centre and west cannot possibly reduce these inequalities in the next two decades’. Even if rising costs in labour-intensive manufacturing in the east produced industrial upgrading there, industry would relocate outwards to competitor nations such as India and Vietnam. Western China would then be characterised by substantial pockets of poverty and underdevelopment. The east would become increasingly integrated into the global economy, while the west would remain isolated from the rest of the world.

This outcome would pose a serious threat to the legitimacy of the Chinese Communist Party, especially if it fails to implement policies effectively that reverse the situation.

What, then, is the most likely outcome?

The balance of evidence suggests an outcome somewhere in between these two extremes. The next two decades are likely to witness limited improvements in the distribution of regional per capita incomes underpinned partially by limited re-distribution of industry towards some but not all of China’s non-coastal provinces.  Thus regional inequality between the west and the rest of China is likely to be diminished marginally at best."

'contained contention'

Not the next Arab Spring: The China method for managing popular unrest

http://www.eastasiaforum.org/2011/09/20/not-the-next-arab-spring-the-china-method-for-managing-popular-unrest/#more-21797

"Chinese leaders effectively provide an outlet for the most mobilised, informed and engaged segments of the population to express their opinions through selective tolerance of popular protests and policy debates. At the same time, the state relies upon pervasive surveillance, coercion and censorship to restrain activists from mobilising to directly challenge its rule. The result is a kind of contained contention, in which popular protests continue to erupt and influence specific policy decisions but do not fundamentally undermine the party-state’s authority."

‘Mass incidents’ in China

http://www.eastasiaforum.org/2011/07/13/mass-incidents-in-china/
The vast majority of mass incidents have a clear objective — to defend or restore citizen rights encroached upon by authority or the market. Termed ‘responsive’ collective action by the late social scientist Charles Tilly, civil unrest is a normal social response to the infringement of rights to which there is no effective remedy.

Chinese nationalism and where it might lead

http://www.eastasiaforum.org/2011/09/21/nationalism-and-where-it-might-lead/

The first is benevolent Chinese nationalism.
Second is controlled nationalism. 
Third is expanded nationalism. 
Fourth is aggressive nationalism.
Fifth is explosive nationalism in economic crisis. ...