Journal of Contemporary China (2004), 13(41), November, 747–777
    
    The Shequ Experiment: grassroots political reform in urban China
    JAMES DERLETH AND DANIEL R. KOLDYK*
    Although China’s economic reforms have been responsible for generating unprecedented growth, they have also been responsible for rendering the danwei, the foundation of the Chinese political and social system in urban areas, increasingly irrelevant. This has serious implications since danweis have been both the organizational base of the Communist Party and the vehicle through which social services were provided. Belatedly, the government has responded to this dilemma by experimenting with social organizations at the grassroots level in urban areas. One of the most significant experiments is the development of shequs. In the latter half of the 1990s, shequs were given more autonomy and responsibilities. Some of the more advanced shequs began to experiment with elections and social welfare functions previously provided by the government. The experiment, however, is still in an initial phase and shequs have not yet had a significant impact on the polity. Nonetheless, the Party and government have placed much importance on the shequ experiment. Their success will thus allow us some insight into the process of political development in urban China.
    
    Introduction1 China’s move from a centrally planned economy to a ‘social market economy’ has had a dramatic impact on the state’s ability to deliver social services and the Chinese Communist Party’s (CCP) organizational structure in urban areas. The closing of unprofitable state-owned enterprises (SOEs) and the rise of private and
    
    * James Derleth is a professor of political development at the Payson Center for International Development and Technology Transfer at Tulane University. He is also a research associate at the Institute of Contemporary Socialism at Shandong University in Jinan, China. Daniel R. Koldyk is a political and economic analyst in the China and Mongolia Division at the Department of Foreign Affairs and International Trade in Ottawa. The authors would like to thank the Civil Society Program of the Canadian International Development Agency, the Fulbright Program, and the China Scholarship Council for their generous support which made this paper possible. They would also like to thank Bruce Dickson, Wang Jianmin, Jane Duckett, Greg Chin, and anonymous referees for their insightful comments and suggestions. The views expressed in this paper do not necessarily represent those of the Canadian government. 1 This paper is primarily based on research into shequ reform between 1999 and 2002. Since the model shequs have more potential to impact the polity than non-model shequs, initially we focused our attention on them. ISSN 1067-0564 print/1469-9400 online/04/410747-31 © 2004 Taylor & Francis Ltd DOI: 10.1080/1067056042000281404
    
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    foreign enterprises has begun to render the foundation of the Chinese political and social system in urban areas, the danwei (work unit), irrelevant.2 Since danweis were traditionally an organizational base of the Party and a delivery mechanism for social services, their demise has significant implications. For the Party, a political space over which it has less control has been created; for the government, millions of people no longer have access to basic social services. This situation is complicated by rising unemployment,3 a growing number of transient workers,4 a rapid increase in the number of people employed outside the public sector,5 smaller families, an aging population, and a desire for increased living standards. In other words, just when Party leadership and social services are eroding, there is an increased demand for them.6 This situation is at least partly responsible for an increasingly assertive population. According to official Chinese labor statistics, work-related disputes
    
    Footnote 1 continued
    
    Most of the data in this paper comes from interviews with the Ministry of Civil Affairs, local governments, and shequ officials in 11 cities (Beijing, Chongqing, Foshan, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Shijiazhuang, Tianjin, and Wuhan) throughout China. These cities were chosen on the basis of the following criteria: 1. Economic level of development. Based on the average salary, cities with model shequs were divided into five levels. At least one city was selected from each level. 2. Geographical location. Since the different regions of China have very different levels of economic and political development, we tried to include shequs from as many regions as possible. 3. Administrative position. Selected cities include directly administered cities, provincial capitals, and cities in special economic zones. 4. Population. Although most cities in China are heavily populated, an attempt was made to include both large and small cities (see Appendices II–IV). Interviews were supplemented and cross-checked with government policy statements, documents, and regulations as well as journalistic and scholarly articles. Noteworthy, because of a new regulation adopted in March 2001, some government and shequ officials would not meet with the research team. This regulation prevents foreigners from doing research that threatens ‘public interest and security’ without the permission of the National Statistics Bureau. Although we were granted permission, our Chinese colleagues were informed that foreigners could not meet with local officials and that all research materials had to be submitted to the National Statistics Bureau for approval. In addition to ‘broadly interpreting’ this requirement, to protect our interviewees we have decided to provide only their institutional affiliation, not their names. 2 The danweis are workplace units (schools, factories, hospitals, government agencies, and so forth) in state-owned enterprises that guarantee employees secure jobs, affordable housing, medical care, pensions, and subsidies for everything from food to transportation. The danwei also had a political role as it closely monitored its employee’s public and personal activities, wielding an assortment of rewards and sanctions to encourage politically acceptable behavior’. See Xiaobo Lu and Elizabeth J. Perry, ‘The changing Chinese workplace in historical and comparative perspective’, in Xiaobu Lu and Elizabeth J. Perry, eds, Chinese Society: Change, Conflict and Resistance (Armonk, NY: M.E. Sharpe, 1997), p. 3. 3 In 2002, an estimated 132 million people were unemployed, tens of millions more than previously stated. See ‘Creating new jobs remains a challenge’, Chinadaily.com.cn, (7 February 2002), http://www1.chinadaily.com. cn/cndy/2002-02-07/55875.html . 4 It is estimated that between 1990 and 2000, over 100 million people left the countryside to look for work in the cities. See Ming Li, ‘State: inoculate transient children’, China Daily, (26 April 2000), p. 3. 5 In 1998, 53.3% of the workforce was employed outside the public sector. This compares with 0.2% in 1978. See Ming Li, ‘Employment structure changes’, China Daily, (4 May 2000), p. 2. 6 Economic imbalances dating back to the Maoist era, combined with growing income and social inequalities, have led to increased societal tensions. Since China lacks a comprehensive welfare system and has a very limited social safety net, conditions for a growing number of workers throughout the country are becoming increasingly dire.
    
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    increased 14-fold between 1992 and 1999.7 In March 2002, upwards of 50,000 laid-off workers demonstrated for over a month, demanding unpaid benefits and pensions in Daqing, Heilongjiang Province.8 This situation has threatened the legitimacy and stability of the regime. The seriousness of this situation fostered a series of political experiments that tried to change the role of government by devolving power to local governments and reducing overall central economic control.9 A Chinese official explained these reforms by stating: ‘the government is not the parent of a big family who handles everything, but instead is a supervisor who controls the macro-economy through legal and economic means’.10 One of these political experiments was the creation of shequs 11—communitylevel units—by the Ministry of Civil Affairs (MOCA) in the late 1980s. MOCA wanted shequs to take over some of the traditional social welfare responsibilities of danweis. Within a few years of their creation, they spread throughout China and became active in such areas as senior and youth centers, environmental programs, and community health services.12 According to a Chinese academic, the idea of community control, although still ambiguous, has been widely accepted and shequs are growing in significance.13 While still in an initial phase of development, research suggests that shequs have not yet assumed the role the Party and government have envisioned for them. Due to numerous obstacles, only with a concerted effort on the part of the Communist Party and the government will shequs become the focal point for community development.
    
    7 Cited in Ted Plafker, ‘As China unrest grows, villagers riot and teachers protest’, International Herald Tribune, (19 July 2000), p. 1. 8 ‘Chinese oil workers in massive protest’, BBC Online, (13 March 2002), http://news.bbc.co.uk/hi/english/ world/asia-pacific/newsid 1870000/1870936.stm . 9 Gordon White, ‘Basic-level local government and economic reform in urban China’, in Gordon White, ed., The Chinese State in the Era of Economic Reform (Armonk, NY: M.E. Sharpe, 1991), pp. 215–218. 10 Nei Guo, ‘Government reform makes progress’, China Daily, (10 October 2000), p. 2. 11 The Chinese word shequ is comprised of two characters. ‘She’ means community or society, and ‘qu’ means district or area. Chinese academics have adopted ‘community’ as the most accurate translation. However, as in other countries, this term has numerous meanings. The most common Chinese description seems to be autonomous ‘social communities and social interactions between people living in a certain area’. Nevertheless, since the organization and responsibilities of shequs vary widely, they are difficult to definitively describe. See Zhongxin Tang, ‘The emergence and characteristics of shequs’, in Papers on Shequ Construction (Beijing: Beijing Publishing House, 2000), p. 47. 12 As an illustration, Beijing has invested $72 million into developing community service centers between 1999 and 2001. Some 90% of residential areas now have centers. See ‘Green community benefits people’, Chinadaily.com.cn, (11 February 2000), http://search.chinadaily.com.cn/isearch/i textinfo.exe?dbname cndy printedition&listid 1651&selectword GREEN%20COMMUNITY%20BENEFITS%20PEOPLE ; ‘Elderly flower at community club’, Chinadaily.com.cn, (22 November 2000), http://search.chinadaily.com.cn/isearch/ i textinfo.exe?dbname cndy printedition&listid 14109&selectword ELDERLY%20FLOWER%20AT%20 COMMUNITY%20CLUB ; and ‘Capital enhances community services’, Chinadaily.com.cn, (2 August 2001), http://www1.chinadaily.com.cn/cndy/2001-08-02/23878.html . See also Jane Duckett, ‘Political interests and the implementation of China’s urban health insurance reform’, Social Policy and Administration no. 35, (June 2001). 13 Xiaojian Pan, ‘Shequ gaige de jidian si kao’ [‘Some reflections on shequ reform’], Nanfang Zhoumo [Southern Weekend], (1 March 2000), p. 7 [hereinafter ‘Reflections on shequ reform’].
    
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    Shequ construction The evolution of shequs can be divided into three phases.
    
    Phase I: 1980–1990 Although shequs are relatively recent creations, there have been community organizations in China since the foundation of the People’s Republic in 1949.14 While they have had various names (most recently neighborhood committees—jumin weiyuanhui), like most organizations in China, they often represented Party and state interests first and their constituents’ interests second. At the end of the 1980s, neighborhood committees in some areas were renamed shequs and in other areas separate shequs were founded alongside neighborhood committees. Both were tasked with carrying out social functions traditionally fulfilled by danweis and the government. To support this mission, the government started to professionalize neighborhood committees and shequs by replacing pensioners, who served as leaders, with younger, better educated individuals. Training was also improved and better salaries and benefits were offered.15 Nevertheless, limited resources and a lack of political authority kept shequs from providing any significant services to their residents.
    
    Phase II: 1990–1998 Increasing societal problems and the failure of shequs/neighborhood committees to provide adequate services led to a series of MOCA sponsored conferences in the early 1990s. From these conferences arose the ‘shequ construction policy’. This policy had two overarching goals. The first goal was to increase the power of local governments by improving their capacity to solve local problems. The second was to encourage shequs to take a more active role in providing services to residents.16 In order to allow shequs to accomplish these goals, experimental shequs with expanded authority and responsibilities were created. The nature of shequs also changed during this period. Previously, they had either been separate entities or renamed neighborhood committees. As shequ construction continued, many neighborhood committees were merged with shequs.17
    14 According to MOCA, in 1996 there were 186,666 registered social organizations, of which 1,845 were national-level organizations. See Zhongguo falu nianjian [China Law Yearbook] (Beijing: Zhongguo Nianjianshe Chuban, 1977), p. 1077. Cited in Tony Saich, ‘Negotiating the state: the development of social organizations in China’, China Quarterly no. 161, (March 2000), p. 128. 15 Benjamin Read, ‘Revitalizing the state’s urban “nerve tips” ’, China Quarterly no. 163, (September 2000), pp. 812–813. 16 Tang, ‘The emergence and characteristics of shequs’, pp. 47–55. 17 This linkage with neighborhood committees can be seen in the fact that many of the shequs referred to themselves as ‘shequ-neighborhood committees’. In Shenzhen they have been called ‘shequ management committees’.
    
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    Figure 1. Urban government structure.
    
    Phase III: 1999–? The perceived success of these experimental shequs led MOCA to designate 11 shequs as ‘model shequs’ giving them limited policy-making autonomy.18 This gave them the ability to try new polices without explicit authorization from the central government. It also gave these shequs some protection from local government officials who resisted any dilution of their authority. Considering the government’s preference for control at every level of society, these concessions indicated the importance MOCA attached to this experiment. The model shequs were chosen because of their different levels of economic and political development as well as their varied geographical locations. The 11 were located in Beijing; Chongqing; Haikou, Hainan; Nanjing, Jiangsu; Qingdao (2), Shandong; Shanghai; Shenyang, Liaoning; Tianjin; Wuhan, Hubei; and Xian. In 2000, 15 more model shequs were added to the experiment—three in existing cities, Nanjing (2) and Shenyang (1), and 12 in new cities—Benxi, Liaoning; Changchun, Jilin; Foshan and Shenzhen, Guangdong; Harbin, Heilongjiang; Hangzhou, Zhejiang; Hefei, Anhui; Jinan, Shandong; Kelamayi, Xinjang; Luohe, Henan; Shijiazhuang, Hebei; and Xiamen, Fujian.19 Shequs and urban government structures China’s traditional urban government structure is somewhat confusing. Every level of government is part of both a tiaotiao (vertical) and kuaikuai (horizontal) relationship with related government units.20 For example, each MOCA official has
    18 As with many institutions in China, it is difficult to make generalizations about shequs as there is tremendous diversity and significant differences between various regions and localities. Nevertheless, it is possible and important to point out some trends in shequ development. 19 Altogether, in 2000 there were 26 model shequs in 21 cities. Shequs have since begun to sprout up in numerous other cities. 20 See Kenneth G. Lieberthal and David Lampton, eds, Bureaucracy, Politics and Decision-Making in Post-Mao China (Berkeley: University of California Press, 1992); and Kenneth G. Lieberthal and Michael
    
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    to report both to the MOCA bureaucracy and to local government officials. This structure greatly complicates policy-making and policy implementation (see Appendix I). There are three official and one unofficial levels of administration: city, district, sub-district, and shequ/neighborhood committee.21 While the latter were constitutionally autonomous organizations, in reality neighborhood committees have served as appendages of the local government (see Figure 1).
    
    Differences from old administrative structures Although most shequs evolved from neighborhood committees, they have numerous differences. First, shequs have more residents and are geographically larger than neighborhood committees.22 Second, shequs have more authority and control
    Footnote 20 continued
    
    Oksenberg, Policy-Making in China: Leaders, Structures and Processes (Princeton: Princeton University Press, 1988). 21 The following note is based on James Wang’s description of local politics in James Wang, Contemporary Chinese Politics, 6th edn (New York: Prentice Hall, 1999), pp. 171–175; and Qineng Chen and Peng Jiang (Institute of World History, Chinese Academy of Social Sciences), interview with authors, 30 April 2000. Municipal (Shi). The municipal government consists of a large number of departments or bureaus that have responsibility for law and order, finance, trade, economic enterprises, and industries located in the city. Municipal departments are simultaneously part of the local government and part of the vertical administrative system linked with central ministries. Depending on their function, a municipal government has different levels of interaction with various levels of departments or bureaus. For example, people’s courts and public security departments interact closely with their parent ministry in Beijing while departments that handle social welfare have more interaction with the municipal government. District (Qu). Cities are divided into districts. For example, Shanghai, a city with 10 million people, is divided into ten districts. Each of the districts ‘elects’ a district people’s congress, which in turn selects a district people’s government as the executive organ of the district. The districts are responsible for implementing economic development, police, education, hospitals, and other social services. They are given a budget by the municipal government and have limited taxation authority. Sub-district (Jiedao Banshichu). Districts are in turn subdivided into sub-districts. For example, Shanghai’s ten districts are divided into 115 sub-districts. The number of sub-districts varies according to the size of the city. In Shanghai’s Den Feng sub-district there are 15 neighborhood committees that oversee 10,000 families, or approximately 40,000 people. Sub-districts were created because districts proved too difficult to manage. The role of the sub-district has greatly expanded over the years. They are responsible for over 65 tasks and are the ‘basic-level urban government’ in China. Their responsibilities include day-to-day administration of public security, social mediation, birth registrations, and so forth. Since the sub-districts have very limited taxation authority, the majority of the sub-district’s budget is provided by the municipality. Neighborhood or Residents’ Committees (Jumin Weiyuanhui). Below the sub-district level are the neighborhood committees. According to Article #111 of the Chinese Constitution, neighborhood committees are ‘mass self-managing organizations at the grassroots level’. In reality they serve as appendages of the sub-district offices. In Shanghai there are 2,400 neighborhood committees with approximately 1,000 families under each committee. In most places neighborhood committees are much smaller and on average administer 100–700 households. Neighborhood committees are responsible for publicizing laws and government policies, protecting resident’s legal rights and interests, mediating civil disputes, helping maintain social order and security, assisting the government in implementing policies, and providing services to residents. MOCA also uses neighborhood committees as ‘transmission belts’ to funnel citizen’s opinions and needs to the government. They are also used as a means to incorporate and mobilize segments of the population that cannot effectively be reached through other mass organizations or the danwei (housewives, unemployed, pensioners). Neighborhood committees achieve this by: creating political study groups, organizing and managing small enterprises, and administering health, educational, and cultural programs. They also act as the ‘eyes and ears’ of the local public security bureau. As a result, until the 1980s, most residents viewed neighborhood committees not as autonomous community organizations, but as ‘nasty and meddlesome’ agents of the government. Traditionally, the sub-district appointed neighborhood committee leaders and gave them a small stipend. 22 As an illustration, the Jiangbei sub-district in Chongqing converted 168 neighborhood committees into 109 shequs.
    
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    over their affairs. In contrast with neighborhood committees and danweis , in some areas shequs do not have to follow normal administrative rules.23 Third, shequs are taking over more of the social welfare tasks normally carried out by the sub-district office, neighborhood committees, and the danwei. In short, shequs are taking over some political and social responsibilities. Internally, shequ leaders are for the most part younger, have a higher average education, and are better trained than neighborhood committee leaders. Perhaps most significantly, a growing number of shequs directly elect their leaders and in some cities (Nanjing, Shanghai, and Wuhan) the shequ representative assembly (Shequ Jumin Daibao) has some supervisory oversight. According to a Qingdao MOCA official, the biggest difference between neighborhood committees and shequs was that the former were only concerned with daily affairs while shequs are concerned with daily affairs, resident concerns, the work of government, and closer links with their constituents, which could have significant future political implications.24 However, because of their links with the local government (especially sub-districts25), shequs should not be considered as autonomous organizations, but rather enhanced neighborhood committees.
    
    Shequ types Three general models of shequ development have emerged.26 The first is the ‘Shanghai model’. Developed during the mid-1990s and at one time considered the standard for community development, the focal point of power in this model is the sub-district level of government, which delegates responsibilities to shequs. This is described as ‘two levels of government, three levels of management’. In essence, while the district and sub-districts are in charge of policy-making, other actors (shequs) play a key role in implementing it. This was one of the first attempts to separate policy making from policy implementation. The goal of this arrangement was to improve city management, not foster citizen involvement. As a result, the power rests within the sub-district office and shequs are viewed as extensions of the local government.27 For example, even though shequ leaders are indirectly elected, they are in fact appointed by the sub-district. In other words, with the exception of some additional responsibilities and the establishment of local branches of city departments in shequs, the relationship between shequs and the government is similar to the traditional one between neighborhood committees and the sub-district government.
    23 For example, shequs do not have to buy government newspapers and journals as danweis do. This is a heavy burden and takes a significant percentage of the latter’s revenues. 24 Guangzhao Bai, ‘Shequ construction’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. 25 Although the sub-district is not an official level of government because it does not have a People’s Congress or independent taxation authority and implements policy rather than creating it, the sub-district can be considered a level of government. It provides most of the shequ’s budget and in most cities, has supervisory oversight. 26 While there are no official designations for the various shequ types, they are commonly referred to by the name of the city where they originated. 27 Guangzhao Bai (Deputy Director General of the Qingdao Bureau of Civil Affairs), interview with authors, Jinan, Shandong, 20 May 2002 [hereinafter Bai interview].
    
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    Since the Shanghai model has essentially increased the power of the sub-district government rather than develop the disan bumen (third sector or non-governmental sector), shequ proponents have come to view it as outdated and inflexible.28 The Shenyang model is a more ‘advanced’ shequ model. This is not surprising given that Shenyang is located in the rustbelt of China’s old industrial region and has been hit hard by market reforms. The closing of many factories caused unemployment and left many without reliable health care coverage and pensions. The ‘Shenyang model’ is based on the idea that since the state no longer has the resources to solve growing social problems, more responsibility must be given to the citizens. Thus in contrast to the Shanghai model, in which shequs are extensions of the sub-district, shequs in the Shenyang model act as a separate level of administration, meaning there is a structural change in the administrative hierarchy.29 Shenyang model shequs are geographically based and were created through the merging of neighborhood committees. They have significant policy-making autonomy and are governed by a ‘community council’. Within the council there are four groups: a Party leadership group, a government representative group, a community self-government group (representing the interests of community residents and organizations such as schools and businesses), and a management committee/leadership council, which is often directly elected.30 This model encourages creativity in solving community problems. According to a MOCA official, as long as people follow the law and acknowledge the leadership of the Party, people should be allowed to solve their own problems.31 Interestingly, these shequs took on too many responsibilities and as a result, shequ leadership groups often have difficulty efficiently administering their communities. Noteworthy, MOCA supported this model of shequ development because it removed the sub-district from direct involvement in shequs and because it was viewed as the first step in separating community organizations—and their problems—from the government.32 The ‘Wuhan model’ has features from both the Shanghai and Shenyang models. It is based on ‘two levels of government, three levels of management, and four levels of enforcement’. The first feature is a separation of responsibilities for the district, sub-district, and the shequs. The second is interaction and sharing of administrative and social resources among these different levels to improve services.33 While shequ priorities are still determined by the local government, this model
    28 Bai interview. 29 Anonymous (Civil Affairs Bureau official from Jiangbei district, Chongqing City), interview with authors, Chongqing, PRC, 13 July 2001 [hereinafter Chongqing City interview]. 30 Bai interview. 31 Mingliang Zhang, ‘Characteristics and reflection of the Shenyang shequ model’, in Xiaolu Luo and Zhongliang Ma, eds, Community Development in China (Beijing: Beijing Academy of Social Science, 2000), p. 19. 32 Jianguo Gao (Professor, Shandong University), interview with authors, Jinan, Shandong, 2 June 2002. 33 Weidong Chen, ‘The goals of shequ construction and relations between shequ and people, shequ and sub-district government, and shequ and district government’, in The Theory and Practice of Shequ Construction (Beijing: Beijing Academy of Social Science, 2001), p. 124. Chen is a professor at Middle China Normal University in Wuhan.
    
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    gives them some additional resources, and more importantly, some autonomy in implementing policy. For example, although shequs are responsible for birth control in Wuhan, the sub-district pays for a birth control specialist. While the government has more control compared to the Shenyang model, the Wuhan model can also be seen as an attempt to separate shequs from the government. An interesting development has recently taken place in Qingdao. The local government is experimenting with a new model of shequ in the Fushanhou residential area. At first, the Hefeilu sub-district was in charge of the shequ, but as the complex grew larger, the sub-district could no longer fulfill its obligations. Instead of creating a new sub-district as in the past, Qingdao created an autonomous shequ.34 In contrast to the Shenyang model with its single level of administration, because of its size—over 1,600 households—there are four neighborhood committees under the shequ in the Fushanhou area. In essence, Qingdao has created a shequ by expanding the responsibilities of the neighborhood committees both geographically and substantively to include social responsibilities that used to be administered by danweis. This is referred to as the ‘small government, big society’ model of shequ development. The goal is to foster grass roots social management to promote political and economic stability. Another unique feature of the Qingdao experiment is the organizational structure. There are four components: a CCP committee, a ‘Community Democratic Consultation Council (CDCC)’, a shequ service center, and a shequ leadership council. The most interesting component is the CDCC. The CDCC has approximately 25 members and is led by a chairperson who is appointed by the district. The membership is comprised of people from social organizations (such as local businesses, ‘interest groups’, and schools), and representatives from the community, CCP, and neighborhood committees. Currently, the Council is an ad hoc body and consequently is not elected. However, some specialists believe that in the near future the Council will directly elect its members and leadership.35 As well, in contrast to representative assemblies in other shequs, the CDCC includes representatives from the National People’s Congress and the Peoples’ Political Consultative Committee. It is hoped that by adding members from national political bodies shequs might have more influence. For various reasons this model of development could have significant implications for the future evolution of shequs. First, since numerous community interests are represented, it fosters civic involvement. Second, the Fushanhou shequ has only 16 full time government bureaucrats, a much smaller number than at the sub-district level of government. These missing officials have been replaced with volunteers. This also reduces local administrative costs. Third, this model provides more autonomy as both shequs and neighborhood committees are separate from the government. Due to its wealth and international contacts, among other factors, Qingdao is at
    34 Tongchang Liu (shequ specialist at the Qingdao Academy of Social Science), interview with authors, Qingdao, Shandong, 3 June 2002 [hereinafter Liu interview]. See also Tianyun Meng, ‘The Fushanhou model shequ in Qingdao’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. 35 Bai interview.
    
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    Figure 2. Shequ structure.
    
    the forefront of shequ development. Consequently, in 2001 it was selected by MOCA to be the host of the first national conference on community development.36 Shequ responsibilities and organization Administrative structure Since shequs are not part of the official government structure—i.e. they do not have legislated powers—and are not legal entities, their organization varies. Nevertheless, some generalizations can be made. First, in contrast to danweis, shequs are always organized by geographical or political districts. Second, most shequs have a representative assembly (RA) and a leadership council (LC). The RA has between 40 and 100 members. In addition to residents, there are representatives from government bodies, work units, the sub-district government, CCP, and social organizations.37 The Home for Teachers shequ in Shenyang, (Jiaoshi Zhijia shequ) has 1,960 residents and a 100-member RA, or one representative for every 23 families. In contrast, the Qingdao Shinan shequ had a 50-member assembly for 10,000 residents. RAs make the ‘big decisions’ for shequs. These include selecting leaders, approving a development plan and budget, changing shequ rules, and theoretically, overruling the LC when necessary. The RA can meet as often as once a month or as infrequently as once every six months. The LC is the administrative arm of the RA. A typical LC has six members—a leader, deputy leader, and four other members—and meets at least one a week. While in theory the RA makes decisions and the LC implements them, in reality the LC has more power. This is similar to other governmental bodies in which a small group (State Council) dominates much larger bodies (National People’s Congress). Some shequ models also have a consultative assembly (the name of this group can vary). It includes representatives from local people’s congresses, the District People’s Political Consultative Committee, danweis, residents, and prominent local personalities. Although its specific functions vary, in most shequs it supervises the
    36 Some officials from MOCA in Beijing have stated that the Fushanhou model is illegal. One scholar believes this is because MOCA is afraid this model of shequ development would put too many officials out of work (Liu interview). 37 Anonymous (Shenyang sub-district shequ coordinator), interview with authors, Shenyang, Liaoning, 6 June 2000.
    
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    LC when the RA is not in session and acts as a liaison with governmental representative bodies (see Figure 2). Responsibilities Although shequs are still responsible for the neighborhood committee’s tasks, the emergence of new problems and a mandate to provide services has given some shequs the chance to expand their responsibilities. For example, a shequ in Jimo City (on the outskirts of Qingdao), formed several local enterprises to provide jobs for residents. Other examples include simple medical clinics, worker retraining programs, social service ‘telephone hotlines’ in Qingdao and a job placement service in Shenyang. Leadership selection As is the case with many aspects of shequ development, the leadership selection process is governed by the 1990 Neighborhood Committee Law. It states that the leadership council should be elected either by all residents, by an electorate consisting of one member from each household, or by the representative assembly.38 This law notwithstanding, the vast majority of shequ leaders are not elected. There are three main types of leadership selection procedures: appointment, indirect selection, and direct election. Although appointments are the standard method of selecting officials in China, because of their potential political significance, attention is focused on the latter two methods. Indirect selection. Shequ leaders are selected through the following process. 1. The sub-district issues an announcement that shequ leaders will be hired. To be eligible, applicants must meet certain criteria (age, education, experience). Some shequs have a residence requirement and some do not. 2. Interested candidates take a competency test. 3. Candidates with the highest test scores are then interviewed by local government officials. 4. More candidates are nominated than are needed, e.g. eight people for five positions. 5. The ‘platforms’ and biographies of the eight candidates are then circulated in the shequ. 6. The shequ representative assembly then votes. The candidates with the most votes become members of the shequ leadership council. To be selected, a candidate must receive over 50% of the RA votes. This process suggests that the central and local governments are trying to improve the quality of public servants through more stringent screening and fostering citizen involvement.
    38 Compiled Statutes of the PRC, p. 141, cited in Read, ‘Revitalizing the state’s urban “nerve tips” ’, pp. 818–819.
    
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    Direct elections. While the indirect selection procedure is a marked change from the traditional method of leadership selection, even more meaningful for future political development is the direct election of shequ leaders. Although there have been direct elections in the countryside, the CCP has been reticent to allow direct elections in urban areas. In what has been described as a political breakthrough, a few shequs have taken advantage of opportunities to hold ‘direct’ elections. In some Shanghai shequs, elections are conducted as follows. 1. Residents and sub-district bureaucrats nominate candidates. 2. Their names are then submitted to the representative assembly where their merits are discussed. At this stage some candidates are disqualified. 3. The RA, Communist Party cell, and sub-district representatives listen to speeches and narrow the field of candidates to eight. 4. Using posters, speeches, and so forth, the candidates campaign for a week. 5. All shequ residents over age 18 have the right to vote. The five candidates with the most votes win.39 As can be quickly noted, these are not true direct elections as there are limits on who can be elected and who can vote. Nevertheless, these elections are a significant change in the typical leadership selection process and can be viewed as an important step towards a more democratic electoral process.40 Once the leadership council is selected, a secret vote is held to select the chairperson and deputy chairperson. The chairperson earns approximately 1,000 yuan a month—500 less than an average salary—while the other members of the leadership council earn approximately 500 yuan a month (salaries vary depending on the region). The members of the LC are the only paid administrative employees in the shequ. As with most shequ expenditures, the leaders’ salaries are paid by the sub-district. In contrast to the leaders of the neighborhood committees who were predominantly retired pensioners, it is more difficult to create a profile of an average shequ leader. In Harbin, shequ leaders were lively, middle-aged women while in Foshan, a recent college graduate was in charge of a shequ. The factor most
    39 This electoral process has led to some unexpected results. For example, in the Shihe shequ in Anshan, Liaoning Province, a 23 year-old female college graduate with no political experience was elected chairperson of the leadership council. Even more interesting, she defeated a well-known Party official who was nominated by the sub-district. The importance attached to this event by the government can be noted by the fact that her electoral success was profiled on national television. See Nuan Zhang, ‘Elections of Shihe shequ, Hunan sub-district, Tiedong district, Anshan, Liaoning Province’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. 40 In August 2002, the Jiudaowan shequ in Beijing’s Dongcheng district held what was described as the ‘first democratic multi-candidate election’ in a shequ. In contrast to other elections, which were usually conducted by residents’ representatives, in this election anyone older than 18 and who had lived in the community for more than a year was allowed to vote. Noteworthy, two migrant candidates were elected to the residents’ assembly. See ‘Beijing residents hold first democratic election of community’, People’s Daily Online, (18 August 2002), http://english.peopledaily.com.cn/200208/18/eng20020818 101629.shtml . Sociologist Gu Yingchun believes direct elections are part of ‘the move to promote the construction of the urban political system’ and their expansion from ‘rural China to the urban part of the country, has resulted in an expansion of grassroots democracy in China and an important breakthrough in China’s construction of democratic politics’. See ‘China expands grassroots democracy to urban areas’, People’s Daily Online, (13 December 2001), http://english. peopledaily.com.cn/200112/12/eng20011212 86523.shtml .
    
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    likely to affect the characteristics of shequ leaders is the method of leadership selection. If appointed or chosen by an indirect election, in general leaders have more education, administrative experience, and are younger than 45 years old. As might be expected, in shequs with direct elections, the leadership was much more diverse. Nevertheless, there is a clear trend toward youth and education. For example, of the 244 applicants who passed the shequ examination in Chongqing, all were younger than 45 (the average age was 36), 122 had some form of higher education, and 145 had a high school degree. Another trend is the separation of residency from employment. In Chongqing’s Xiaoyuan shequ, only one of the five members of the leadership council lived in the shequ.41 While still relatively novel, by removing residency requirements shequs are able to expand the pool of potential candidates and possibly improve the quality of shequ leaders. While Party membership helps, it is not an absolute criterion for selection/election into the LC. In the 11 shequs visited, approximately 40% of the LC members were not Party members; however, each shequ chairperson, with the exception of Foshan, was a Party member. Decision-making In China, most administrative decisions are made by consensus behind closed doors and are then disseminated to the populace. In general, shequs follow this time-honored ‘tradition’. There are no explicit rules regarding shequ leadership council meetings and their frequency varies. In most cities meetings are held either weekly, bi-weekly or monthly at regularly scheduled times. In Tianjin meetings are held on a daily basis and in others, special meetings may be called when important issues arise. In terms of openness, shequ meetings in some cities are open to the public and in others the public is forbidden to attend. Even in shequs that are open to the public, residents have had a very small role in their deliberations. Typically they only attend shequ meetings if an issue directly affects them, or if they have been specifically asked to attend. In addition, residents typically have to leave meetings when decisions are made and since there are usually no formal announcements of shequ meetings, even if they wanted to, it is difficult for residents to participate. Internal organization In most shequs, the leadership council oversees a number of departments.42 Their functions broadly correspond to the responsibilities given to neighborhood committees by the 1990 Neighborhood Committee Law. They include Party activity, birth control, security, social mediation, services, and culture and entertainment. Some shequs have also established departments to address specific problems in their community. Examples include a pensioners department in Shenzhen and an economic department in Chongqing. Each department is headed by a member of
    41 Anonymous (Xiao Yuan shequ official), interview with authors, Guanyinqiao sub-district, Jiangbei district, Chongqing, 14 July 2001. 42 In some shequs, e.g. Shijiazhuang, there are no departments.
    
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    the leadership council who is aided by volunteers, danwei representatives, members of the shequ representative assembly, and residents with a particular interest or skill related to the department. For example, a doctor would be included in the birth-control department. While these departments are in theory separate from the local government, in many shequs, the department head is appointed by the sub-district office.43
    
    Budget In the vast majority of the model shequs included in this study, the largest share of the budget (90–100%) was provided by the sub-district. The sub-district receives the majority of its operating funds from the district, but it also gets some money from local taxes, which are often collected by shequs.44 The remaining money comes from personal and business donations, as well as user fees for community services. As examples of the latter, the Shinan shequ in Qingdao charges a 20% commission if they are asked to bring in an outside contractor to fix problems in a resident’s apartments and the Lianbao shequ in Wuhan collects a few yuan from each family to pay for cleaning and security guards. Shequs also benefit from preferential tax policies. Businesses operated by shequs which hire unemployed workers are exempt from certain taxes.45 While these features give shequs some control over their finances, the vast majority of their budgets still come from the government. Consequently, the government continues to exert a large degree of control over shequs by determining spending priorities. However, there are indications that shequs may gain more fiscal control in the near future. Most interviewees (government officials, shequ officials, and academics) predict that in the near future the government will further reduce its fiscal support, putting more pressure on shequs to find their own sources of revenue. While many shequ leaders want the ability to levy taxes, local government officials are strenuously opposed to this devolution of power.46
    
    Shequs and local governance reform According to Premier Zhu Rongji, shequs will be the foundation of a new social welfare system. Perhaps even more significantly, they will also have a political role as they will ‘increase local democracy’ and strengthen ‘political construction’.47 Shequ construction will, however, only progress at a modest pace. Then, after an
    43 Hanlong Lu (researcher, Shanghai Academy of Social Sciences), interview with authors, Shanghai, 1 June 2000. 44 In Harbin, the shequ leaders vociferously complained that they could not keep any of the taxes they collected for the sub-district. 45 People’s Republic of China, National Tax Bureau, Regulation #43 (Beijing, 1999). 46 Anonymous (Deputy Director of Local Government Development, Qingdao Municipal Government), interview with authors, Qingdao, Shandong, 26 May 2000. 47 Quoted in Mingliang Zhang, ‘The background and tasks of shequ construction’, in The Theory and Practice of Shequ Construction (Beijing: Beijing Academy of Social Science, 2001), p. 11. Zhang is a MOCA Director responsible for shequ construction.
    
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    unspecified period of time MOCA will use the most effective shequ models as national prototypes for the rest of the country. Since MOCA has not published an official list of shequ goals, judging the success or failure of a particular shequ can be difficult. It is, however, possible to create a list of objectives by analyzing speeches and government documents and through interviews with government officials, academics, and shequ officials. Some of these objectives include the following. Reduce government expenditures To help integrate economic and social development, the government needs to reorganize its expenditures. Shequs are slated to play a key role in this process. Since a majority of urban populations used to work for SOEs directly or indirectly, the government paid for the bulk of social services. To administer these services, a huge bureaucracy was created. While the exact number of bureaucrats delivering social services at the local level is unknown, it is widely recognized that there are too many. For example, the authorized number of staff in various local government agencies is 1.18 million while the actual number is 5.48 million. Since more than 90% of these agencies receive state allocations, it is a large drain on the budget.48 By enabling shequs to take over certain social services, the government aims to reduce excess bureaucrats and free up funds to build a social security system. Share resources and expertise In an era of declining resources, the government wants to make better use of its current resources. At present, the compartmentalization of the bureaucracy and administrative hierarchy make it difficult to share resources. Each ministry has its own fiefdom and jealously guards its prerogatives. As a result, decrees and regulations of various ministries and levels of provincial and local government are frequently uncoordinated and cause inefficiencies.49 In contrast, shequs are more directly accountable and typically include representatives from various organizations and different levels of government. They have to ‘make things work’ from the bottom-up and should help foster the dissemination of successful policies at the grassroots-level throughout the country. Strengthening local government Another goal of the shequ experiment is to strengthen local government. While at first this might seem like a contradiction since local governments are devolving responsibilities, by improving the management of local government, shequs can help local governments become more operationally effective.
    48 ‘Deepening government reform’, China Daily, (8 June 2000), Editorial section, p. 4. 49 For example, in August 2001, the State Postal Bureau blocked international shipments from UPS for violating its mail monopoly. However, the Ministry for International Trade and Economic Cooperation (MOFTEC) told UPS to continue its deliveries as it has jurisdiction over international business issues. This situation is played out daily at every bureaucratic level.
    
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    Enhance governmental legitimacy Closely related to making local government more effective is enhancing the government’s legitimacy. At present, China’s government is plagued by corruption,50 weakening its claim to be building a socialist state. Although it is true that two decades of economic reforms have improved the lives of millions and dramatically increased the standard of living in some areas, reforms have also increased income inequality and unemployment. This has fostered social discontent and political tensions, severely undermining the people’s trust in government. By decentralizing some government functions, i.e. bringing the government closer to the people and engaging local populations (as was the case with the Jiudaowan shequ, Dongcheng district, Beijing, that wrote a constitution in coordination with local residents and the sub-district government), the central government hopes to improve its legitimacy.51
    
    Improving the quality of life Since the government is struggling to provide basic food and shelter for a significant portion of the population, it wants shequs to address quality of life issues. The director of municipal services in Beijing noted that there is a gap between the government’s programs and the daily needs of residents for medical services, culture, and a clean environment.52
    
    Fostering societal involvement Since shequs are not part of the government, it is hoped they will foster contacts between the state and society by ‘getting closer to the masses’.53 Expanding local involvement is also viewed as a way to make people more responsible for solving their own problems and improving the regime’s legitimacy.54 For certain liberal Chinese scholars, these goals are not as important as their potential long-term consequence—the fundamental reform of local governments. The goal is to move away from the prevailing ‘strong government, weak society’ model to a ‘small government, big society model’. Thus the shequ experiment is viewed by some as the first step on the path to a new governmental structure that would be based on local autonomy and the enlargement of local democracy.55
    50 In 2001, the CCP disciplined more than 175,000 officials from crimes including corruption and bribery. This was a 30% increase over 2000. See ‘China punishes thousands of officials’, BBC Online, (23 January 2002), http://news.bbc.co.uk/hi/english/world/asia-pacific/newsid 1777000/1777975.stm . 51 Tuo Su, ‘On shequ study’, The Theory and Practice of Shequ Construction (Beijing: Beijing Academy of Social Science, 2001), p. 29. Su is a professor at Nankai University in Tianjin. 52 Li Liu, ‘Capital enhances community services’, Chinadaily.com.cn, (2 August 2001), http:// www1.chinadaily.com.cn/cndy/2001-08-02/23878.html . 53 ‘Strengthening the democratic legal system’, China Daily, (19 October 2000), p. 4. 54 Chongqing City interview. 55 Weidong Chen, ‘The goals of shequ construction and relations between shequ and people’, p. 124.
    
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    Obstacles to shequ development There are numerous obstacles that limit the development of autonomous communities in China. Some of these include: a lack of skilled administrative personnel, bureaucratic obstacles, an excessive workload, a lack of financial resources, legal ambiguity, and citizen apathy. Administrative personnel The lack of trained administrators is perhaps the largest obstacle to shequ development. Even though shequs are not legally part of the government, in reality they serve as the lowest level of the government bureaucracy. Therefore, personnel selection follows normal bureaucratic procedures. In other words, leaders are usually appointed and once selected, their length of employment often outweighs merit. As a result, the majority of leaders have traditionally been pensioners. This reflects the fact that for most economically active people, their place of work is more important than their place of residence. Low pay also lowers the quality of applicants. Since salaries are less than half of the average salary and working in shequ administration is not considered prestigious, leadership positions do not usually attract well-qualified candidates. Although a growing middle class might foster more involvement in community affairs, the majority of current shequ leaders throughout the country are still pensioners with limited administrative and technical skills. The lack of skilled personnel has been recognized as a problem and some shequs have introduced competitive exams. This is part of a Ministry of Civil Affairs strategy to base government employment ‘on merit with open, democratic selection methods’.56 There are also increasing calls for professionalizing community workers through training and higher salaries.57 Some cities have already made progress in this area. For example, in Qingdao a ‘Shequ College’ was created. During a six month course for which participants pay 850 yuan, shequ leaders take classes in law, shequ construction, economics, administration, and ‘social investigation’ techniques. Bureaucracy Decades of central planning and administrative hierarchy have produced a system that is notably compartmentalized. As an extension of local governments, shequs are also affected by this weakness. Networks typically run vertically with very little horizontal cooperation and information sharing. The leaders of a Shenyang community had never visited a shequ outside their immediate district. It is often the case that the only contacts many shequ leaders have with their counterparts in other areas is at rare regional or national conferences and/or MOCA-chaired meetings.
    56 Qihua Feng, ‘Move to select competent civil servants’, China Daily, (8 January 2001), p. 4. 57 Qin Li, ‘Roles of professional community workers’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. Li is a Sociology Professor at Shandong University.
    
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    One reason for this is the central government’s unease with horizontal links between ‘autonomous’, i.e. non-Party, organizations. It is well known that central leaders prize social and political stability ahead of all other priorities, including more effective community-level governance. Without a more formalized method to disseminate information and experiences, shequs are unable to efficiently learn from the successes and failures of other shequs. Interestingly, local government officials overseeing shequ development have regular contacts with their counterparts in other cities. This has led to a situation where bureaucrats in charge of community development have more contact with each other than the individuals managing the communities. Another bureaucratic hurdle is the reluctance of local MOCA officials to give shequs any measure of self-governance. Although there are regulations that grant shequs autonomy, in practice this rarely occurs. Sub-district offices often have a MOCA official who acts as a ‘coordinator’ for shequs and many local governments have created ‘working committees’ to ‘interact’ with shequs. According to a MOCA official in Shandong province, this is largely the result of local officials protecting their traditional areas of responsibility and authority.58 These factors have to date served to make shequs branches of the sub-district government rather than autonomous organizations capable of advocating on behalf of their constituents. Too many responsibilities Shequ development is also limited by the imposition of too many responsibilities. As was the case with neighborhood committees, shequs have been saddled with an increasing number of tasks by higher-level authorities. They range from selling saving bonds and newspaper subscriptions to surveying residents and ensuring street signs are posted. In Qingdao, 160 functions that used to belong to the sub-district were divided between shequs, government-funded service centers, and social groups (charity organizations).59 The reallocation of numerous responsibilities means shequs have little time or resources to address issues which affect their constituents. Financial resources The mismatch between responsibilities and resources extends to the financial arena. One MOCA official estimated that shequs have between 40 and 100 legal obligations or responsibilities;60 however, the sub-district only gives them enough money to pay for salaries, space, and utilities. In a 1998 MOCA survey, 81.2% of
    58 Zaishui Wang, ‘Problems in the processes of community development in Shandong Province’, paper delivered at International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. Wang is the Director of the Bureau of Civil Affairs for Shandong Province. 59 Tianyun Meng, ‘The Fushanhou model shequ in Qingdao’. 60 Baoku Li, ‘Study carefully, work hard, improve steadily’, Chongqing Jiangbei District Shequ Construction: Material Collected (Chongqing: Shequ Construction Direction Committee of Jiangbei, Chongqing, December 2000), p. 76. Li is a MOCA Deputy Minister.
    
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    shequ leaders said the lack of money was one of the main obstacles to shequ development.61 This situation is made worse by the fact that annual allocations vary, making it difficult to plan activities or programs. Some shequs have sought to get around these impediments by soliciting donations from local businesses or taking advantage of their legal ambiguity to start their own businesses.62 These activities are usually discouraged by government bureaucrats because: (1) they do not believe shequ leaders have the necessary skills to run a business; (2) fund-raising causes shequs to deviate from the goal of community development, (i.e. providing social services); and (3) the more shequs are able to develop an independent source of revenue, the greater the chances the sub-district may lose influence over them.63 In other words, the government wants shequs to undertake more social welfare functions but it has not given them the resources or ability to do so. Legal ambiguity Although the shequ experiment has been sanctioned by the Party and central government, shequs have no legal standing. Since many shequs are the result of a merger of neighborhood committees, they are guided by laws that were first passed in 1982 and have little relevance to the contemporary situation. For example, the goal of the 1990 ‘Neighborhood Committee Law’ was to ‘strengthen neighborhood committee construction … and develop material and moral civilization’.64 Thus in contrast to other societal entities, there are currently no laws that describe shequ responsibilities, powers, or relationship with government. While some shequs have taken advantage of this legal ambiguity to try new policies, overall their lack of legal status limits their development. Without legal status, shequ operations are completely dependent on the discretion of local government officials. For example, although the Neighborhood Committee Law that theoretically guides the development of shequs provides for direct elections, in many shequs the leadership council is appointed by the sub-district government. Furthermore, since they are not legal entities they cannot borrow money, sign contracts, enforce rules, and so forth. Of note, the Jiudaowan shequ in Beijing concluded a ‘constitution’ with the sub-district government. This constitution was drafted by the community’s leadership in consultation with its residents and with the help of community governance experts.65 After several drafts and rewrites, the document was approved by the
    61 Shuhua Wei, ‘Research on money and shequ construction’, in Xiaolu Luo and Zhongliang Ma, eds, Community Development in China, p. 124. 62 Some shequs have also benefited from the closure of danweis in their areas. For example, the Zhenxing Zhongjie shequ in Jinan inherited housing stock and a hotel from a danwei. As a result of rental and business income, it is able to provide 100% of its funding. It has been so successful that it even had to pay the sub-district government 24,000 RMB in taxes in 2001! Chuncheng Gao (Director, Zhenxing Zhongjie shequ, Jinan, Shandong), interview with authors, Jinan, Shandong, 23 May 2002. 63 Shuhua Wei, ‘Research on money and shequ construction’, pp. 125–129. 64 People’s Republic of China, Ministry of Civil Affairs, 1990 Neighborhood Committee Law (Beijing, 1990), http://www.sqjs.org.cn/flfg-1.htm . 65 Qineng Chen and Peng Jiang (Institute of World History, Chinese Academy of Social Sciences), interview with authors, 3 February 2004.
    
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    sub-district government in August 2003. While this is not a solution to the problem of legal ambiguity since it does not give the community formal legal protection, the process of developing the constitution made the issue of resident rights a public matter and effectively engaged the community. Apathy In theory, shequs are supposed to be the embodiment of the local community; in reality, residents have largely been unwilling to become involved.66 As in other Soviet-style socialist regimes, the Chinese system was organized so that all members of society were incorporated into a hierarchically organized institutional framework. This system limited the ability of people in one group to communicate directly with others in another group. That is one reason why ‘guanxi’ (personal connections) is often more useful than official channels. While this system allowed the CCP to dominate society, it has numerous negative consequences for shequ development. Since the government controlled almost every aspect of people’s lives for over 50 years, most people’s first impulse is to turn to the government to solve problems. This mentality has been difficult to overcome. Second, the system of institutional control makes it hard to see any clear distinction between the state and shequs. Although neighborhood committees were legally ‘autonomous’ societal organizations, in reality they were appendages of the state. Since shequs are the successors of the neighborhood committees, most people think of them as government entities. Instead of collecting water and gas fees as neighborhood committees did, most people think the main purpose is to ensure compliance with government policies.67 This problem is amplified by traditional administrative habits. For example, in many shequs the meetings of the leadership council are closed to the public. Officials are more used to giving orders and fulfilling plans than fostering social development and political participation.68 As a result, most residents do not think shequs represent their interests and/or that their involvement will have any impact on the community. Consequently, less than 15% of shequ residents are actively involved in shequ activities.69
    66 Some observers note that greater economic freedom and increased wealth have fostered individual involvement in social welfare organizations and other volunteer groups. See Nick Young, ‘Searching for Civil Society’, in 250 Chinese NGOs: civil society in the making, Robyn Wexler (Beijing: China Development Brief, 2001). Nevertheless, this activism is currently focused on either self-help activities or protests against factory closings or specific government policies. In other words, involvement in the general community has been limited. This is probably because in contrast with self-help organizations, shequs are viewed as being closely linked to the government. 67 Jiangang Zhu, ‘Shequ construction: rethinking theory in the experience’, in Xiaolu Luo and Zhongliang Ma, eds, Community Development in China, p. 58. 68 Too often, people are still treated as subjects rather than citizens. For example, to lessen the burden on the poor of an increase in cleaning fees from 1 to 3 RMB per month, a shequ in Beijing published a list of all the poor families who were told that if they completed the requisite paperwork, they could continue to pay only 1 yuan a month. However, only 10% took advantage of the offer as they were insulted by having their names published. Yurong Tian, ‘Community construction’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. Tian is a professor at Beijing Industrial University. 69 Qingshan Wang, ‘Community autonomy: the goal of public participation’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. Wang is a professor at the MOCA School of Administration in Beijing.
    
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    Before people get more involved in their communities, they must understand what being a member entails and have a sense of ‘ownership’ in the community. Many shequ leaders have recounted how the majority of their residents did not understand what the word ‘community’ meant, let alone what role they should have in them. In other words, residents are not used to taking responsibility for themselves or identifying with the community in which they live. As an illustration, when first introduced in Shanghai, community leaders thought their role was to improve the efficiency of government agencies; however, in some cases once the concept of community was explained to the local populace and they learned how to benefit from its services, residents became more supportive. In Beijing’s Chaoyang district, 68% of the residents said they would be willing to get involved in community projects if given the opportunity to do so.70 This is a crucial factor, for without citizen involvement, shequs will never achieve any real degree of autonomy. For shequs to become a significant part of the political landscape, two things must happen: the government must stress their importance by raising awareness and encourage participation, and people have to learn to be citizens rather than subjects. In what can be seen as an attempt by the central government to address the first condition, shequs are being allowed to hold direct elections. In Hangzhou’s Jingfang shequ, 80% of the residents voted in a December 2001 election. As one resident noted, ‘if anyone on the committee does not do a good job, we will vote him or her out’.71 Examples of the second include resident forums and community projects. The existence of these opportunities suggest that given the chance, residents will take a more active role in the community. The Party: catalyst and impediment In part to overcome the legacy of political campaigns such as the Great Leap Forward and the Cultural Revolution, which greatly weakened the CCP’s legitimacy, the Party enacted a series of economic reforms in the late 1970s. While these reforms were economically successful, they created new political challenges. By adopting a market-based economic system, the Party lost many of the levers it had to control society. This course of action eventually created enough open political space at the grassroots level for groups to develop that were not directly controlled by the Party, such as private entrepreneurs. At the same time, large inefficient SOEs across the country were forced into bankruptcy, which caused millions of people to lose their jobs and access to social services. The Party now has little choice but to push forward the economic reforms since they have provided it with a new source of legitimacy; however, without corresponding social reforms and a new system of organization in urban areas, the Party risks instability and larger pockets of political space outside of its control.
    70 Rong Yang, ‘Public perception in community building’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. Yang is a lecturer at Beijing Industrial University. 71 ‘China expands grassroots democracy to urban areas’, People’s Daily Online, (13 December 2001), http://english.peopledaily.com.cn/200112/12/eng20011212 86523.shtml .
    
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    Belatedly, the Party has responded to this situation in a number of ways. In November 2002 at the 16th National Party Congress, the CCP officially accepted Jiang Zemin’s proposal to allow private entrepreneurs into the Party, thus expanding its membership base. The Party also recognized the necessity of developing social groups to ameliorate rising social problems. In a 1997 speech, General Secretary Jiang Zemin stressed the need to ‘cultivate and develop … social intermediary organizations’ to support ongoing reforms.72 Soon afterwards in 1998, a plan for restructuring the social sector was approved by the First Session of the Ninth People’s Congress. This plan stated that many of the functions of government organs should be given back to society, i.e. the new intermediary social organizations. According to Luo Gan, who was the then State Councilor and Secretary General of the State Council, and who is now sitting on the Standing Committee of the Politburo, ‘the government had taken up the management of many affairs which it should not have managed, is not in a position to manage, or cannot manage well’. Consequently, Luo called for the expansion of social intermediary organizations and to clearly delineate their responsibilities along with those of government institutions and enterprises.73 One example of these policy changes was the ‘model’ shequs that were introduced in 1999. Officially, the government’s goal is to ‘create an environment for shequ autonomy’;74 however, a key goal of the shequ experiment is to strengthen Party control. While even conservative leaders realize that the role of the Party must change in light of economic and social changes, the Party is worried that if shequs gain meaningful autonomy or become voices for their constituents, their political control could be weakened. This would have economic and social ramifications for the 66 million CCP members who derive significant benefits from their positions. The Party’s anxiety can be seen in a series of Party conferences whose theme was how to ensure control over autonomous shequs.75 It is apparent that shequ construction has become a political issue, linked to party construction, and Party leaders believe it is the CCP’s duty to guide their development.76 Party control is being solidified with the creation of cells within shequs. According to Jiang Zemin: ‘shequ construction is an important job for the Party’ and will ‘strengthen the Party’s mass and organizational base in the city’.77 Officials thus view shequs as a way to re-assert authority at the local level, which could allow them to better control movements such as Falun Gong.78 Consequently,
    72 Jiang Zemin, ‘Hold high the great banner of Deng Xiaoping Theory for all around advancement of the cause of building socialism with Chinese characteristics into the 21st century’, Beijing Review, (6–12 October 1997), pp. 10–33. 73 Cited in Saich, ‘Negotiating the state’. 74 Baoku Li, ‘Why we should initiate shequ construction’, in Xiaolu Luo and Zhongliang Ma, eds, Community Development in China, p. 14. 75 Anonymous (Communist Party leader, Jinan, Shandong), interview with authors, Jinan, Shandong, 24 June 2000. 76 In the past, the Party had cells at the sub-district level and within danweis, but a more limited presence in neighborhood committees. However, due to the declining significance of danweis, the Party is strengthening its presence in the shequs. This suggests that the Party believes the shequs will become increasingly important over time. 77 ‘Central leaders pay attention to shequ construction’, in The Theory and Practice of Shequ Construction (Beijing: Beijing Academy of Social Science, 2001), p. 11. 78 Falun Gong, a quasi-spiritual movement that has attracted millions of followers inside China, was declared an ‘evil cult’ and banned in 1999. Two decades ago when the Party’s control was more entrenched it would have
    
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    as part of their responsibilities, shequs are now required to explain the Party’s policies as well as guidelines and rules that should be followed when implementing them. Party control, however, has become an impediment to shequ development. In a thinly veiled reference to local CCP leaders, a district government official in Beijing noted one of the biggest obstacles to shequ development is that ‘some people do not realize that a shequ is an autonomous organization. They ignore the shequ’s and the resident’s autonomous rights’,79 which prevents shequs from playing a meaningful role in the polity by limiting their ability to ameliorate the social problems that led to their creation in the first place. As one researcher noted, there is a ‘contradiction between the CCP leadership and shequ autonomy and development’.80 Key issues In order to overcome these obstacles and facilitate sustained progress, a more coherent definition and political framework for shequs is necessary. More specifically, there needs to be a better understanding of the role communities are expected to play; a better definition of the relationship between shequs, the Party, and government; and most importantly, a better definition of the relationship between the Party, the government, and the people. What is a shequ? The first unresolved issue is the definition of ‘shequ’. Official and unofficial definitions include: ‘an area and unit of people’, ‘an enlarged neighborhood committee’, ‘the government’s representative at the local level’, ‘a self-governing entity’, and ‘an autonomous association which solves residents’ problems’. This ambiguity is the result of the lack of a theoretical or policy framework to guide shequ development. While this situation has allowed some shequs to be at the forefront of urban grassroots political reform in China, in general it has limited their development. Since shequs do not have legal status, the local government’s view of their role has often determined their activities. A second issue is the uncertainty over what services shequs should provide. Until a more precise policy is developed, it will be difficult for them to distinguish themselves from government bureaucracies and neighborhood committees.81 This situation limits the ability of shequs to focus on their primary mission of serving their constituents.
    Fottnote 78 continued
    
    been considerably more difficult for an organization such as Falun Gong to organize. An academic from the Chinese Academy of Social Sciences noted that the Party is planning on using the grassroots nature of shequs to monitor and/or prevent the growth of ‘illegal’ social organizations. 79 Jianbo Li, ‘Sub-district and neighborhood committee: comparison between two models of shequ construction’, in Xiaolu Luo and Zhongliang Ma, eds, Community Development in China, p. 181. 80 Tianyun Meng, ‘The Fushanhou model shequ in Qingdao’. 81 As an illustration, the Shinan shequ in Qingdao performs both governmental (registering marriages) and resident support functions (recreational center for pensioners).
    
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    Shequs, the Party and local governments Another important issue is defining the role of the Party and government in shequ development. This issue has numerous components. First, what does ‘autonomy’ mean? Does it mean self-management or does it mean shequs can ‘autonomously’ carry out the instructions of local Party and MOCA officials? This question is closely linked to what position, if any, shequs will occupy administratively. If they are separate from the government, the first definition of autonomy seems more likely. If they are incorporated into the local government structure, it is unlikely they will have any significant decision-making autonomy. This issue is related to the larger one of defining what role the Party and government should play in shequ development. To date, it has been led by these groups. This situation has had a number of consequences. First, it ‘constrains resident’s involvement in shequ construction … and is not good for achieving the goal of “small government, big society” ’.82 Second, instead of streamlining the government, government involvement essentially adds another layer of bureaucracy. As a Chinese academic noted: ‘hastening community construction … requires the government to change its administrative function, getting rid of the “all-encompassing” administrative model’.83 According to a MOCA district official in Beijing, there are two major options for shequ development: the Party and government can either lead their development or allow communities to develop themselves by teaching residents to manage their own affairs.84 Within these extremes are the Party and government directing shequ development (Beijing), the Party and government guiding shequ development (Nanjing), and the Party and government encouraging shequ development (Shenyang).85 These differences notwithstanding, many local officials view shequs in the same way they view neighborhood committees, i.e. subordinate to local authorities. In contrast, some senior MOCA officials in Beijing want shequs to solve problems on their own. This contradiction has placed local government officials in a difficult position. While their first instinct is to continue to use shequs as instruments of policy implementation, they cannot ignore Party and central government directives.86 Overall, until the powers of shequs are clearly defined, particularly in relation
    
    82 Jianbo Li, ‘Sub-district and neighborhood committee’, p. 179. 83 ‘Reflections on shequ reform’, p. 7. 84 Jianbo Li, ‘Sub-district and neighborhood committee’, p. 180. 85 Chuanyi Zhu, ‘Shequ development and experiment since 1980s’, in Xiaolu Luo and Zhongliang Ma, eds, Community Development in China, p. 38. 86 This dilemma can be seen in the following anecdote. When a local government official in Shenyang was asked to define the meaning of ‘shequ’, he said: ‘local affairs managed by local people’. However in a later question, he said shequs should act as ‘agents’ of the local government and be ‘guided and helped’ by them [Anonymous (Director of Local Government Development, Shenyang Municipal Government), interview with authors, Shenyang, Liaoning, 6 June 2000]. While not mutually exclusive, these answers illustrate the contradiction between maintaining control and fostering the development of autonomous communities. Many government officials are aware that if shequs take over more social welfare responsibilities, governmental control will be lessened. See Zaishui Wang, ‘Problems in the processes’. Autonomy for community organizations does not necessarily mean a lack of governmental control. Oversight could replace direct control to ensure shequs were implementing government priorities.
    
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    to the local government, it will be difficult for them to play a significant role in the polity. This situation is the result of a larger issue: defining the future relationship between the Party, the government, and the people.
    
    Shequs, the state, and the people Historically, the Communist Party has used the government to control society. From changing jobs to having a child, almost nothing could be done without government permission. Although economic and social changes have almost rendered the grassroots system obsolete in urban areas, a new one has yet to be created. This helps to explain mixed and often contradictory Party and government views regarding the role and development of community organizations. Party and government officials understand there has to be a change in the nature of the relationship between the state and society, but they are unsure how to accomplish this while still maintaining political control. This dilemma can be seen in former Minister of Civil Affairs Doji Cering’s description of shequ construction. Although first noting that ‘the fundamental program is to strengthen the Party’s position in the city’, he went on to say that shequ construction should include the enlargement of local democracy (political reform) and change the functions of government and the relationship between the sub-district and shequs (systemic reform).87 This ambiguity also exists within the shequs themselves. When asked about the role of shequs, shequ leaders responded that they were the lowest level of government. In other words, neither the Party, government, nor shequ leaders seem to have a clear understanding of the role shequs should play.88 Currently, shequs are not well integrated into China’s societal infrastructure and the people who would benefit most from their development—pensioners, unemployed, disabled—are on the margins of society. If shequs are to develop and play the role envisioned by some in the leadership, the Party and government are going to have to relinquish some of their authority and responsibility. In other words, they will have to redefine the relationship between the state, society, and the people.
    
    Initial conclusions It is difficult to evaluate an ongoing experiment, let alone one that lacks a standard organization, evaluation criteria, and is occurring in a vast country with significant local and regional differences. Nevertheless, by using the goals elaborated by MOCA officials—integrating social services with the new economic environment, making the local government more efficient, sharing resources and expertise, enhancing government legitimacy, improving the quality of life, fostering social involvement, and strengthening the role of the Communist Party—it is clear that
    87 Mingliang Zhang, ‘The background and tasks of shequ construction’, p. 12. 88 Zaishui Wang, ‘Problems in the processes’.
    
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    shequs are still in a primary stage of development. Even the most advanced shequs still have a long way to go before they achieve their objectives. Most cities have not actively supported shequ development. This situation is the result of three factors first identified by Gordon White in his 1991 study of local government in China.89 First is the complexity of a changing urban economy and society. Second, the local governmental structure is very integrated, thus reforms at each level are dependent on the success of reforms at another level. Third, the development of shequs goes beyond the relatively ‘safe’ sphere of economics to the much more sensitive areas of administration and politics. In other words, since economic production, social welfare, and political control have been historically intertwined, change is a complicated and difficult undertaking. Another factor that has limited shequ development is the lack of a theoretical framework to guide shequ development.90 In the absence of a comprehensive political framework that has a place for community organizations, the shequ development process will be piecemeal at best. These obstacles notwithstanding, some shequs have been much more ‘active’ than others.91 The key variables seem to be the local economic and political environment and the effectiveness of the local leadership.92 For example, since the economic situation is so dire in Shenyang, local leaders have been very supportive of shequs. Consequently, most of the shequs there have been very active, with some going so far as establishing worker retraining and employment centers. While Shanghai’s shequs are also relatively active, this is the result of very different political and economic circumstances. Politically, the shequ experiment was a pet project of former Mayor Xu Kuangdi and since Shanghai has one of the highest living standards in China, shequs have access to significant resources. Overall however, research suggests that ‘active’ shequs are the exception rather than the rule. Like neighborhood committees, shequs have been implementers of local government policy and not advocates of local interests. According to the Ministry of Civil Affairs Director for Shandong Province, 90% of their activities are implementing Party and government programs or fulfilling government regulations. Nevertheless, it would be a mistake to think of shequs as simply a part of the government. Although they have some government characteristics, they also have features that differentiate them from the bureaucracy. These include elections, various organizational designs, and broader interactions with citizens. The crucial determinant of successful shequ development will be whether the Party and government ‘can effectively transfer power to lower levels of society’. In other words, will shequs become the autonomous social organizations envisioned
    
    89 White, ‘Basic-level local government and economic reform in urban China’, p. 240. 90 Shihao Wang, ‘Government policies towards community development’, paper delivered at the International Symposium on Community Development and Public Participation in China, Shandong University, Jinan, Shandong, May 2002. Wang is the Director of Community Construction and Local Government at the Ministry of Civil Affairs in Beijing. 91 Because of the lack of empirical data, activity is used for comparison purposes. A useful avenue for future research would be an assessment of shequs’ effectiveness vis-a-vis their predecessor organizations. ` 92 Another variable that will have impact in the future is the location of shequs. For example, the Fushanhou shequ is located in a new housing complex in Qingdao.
    
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    by some officials or, as in the case of neighborhood committees, will they be subsumed into the government apparatus. For the first time in recent years, pressure for political reform is beginning to come from both above (Party and government) and below (society). Therefore the success or failure of the shequ experiment will give us insight into the process of political development in urban China. The consequences could be significant. For as one Chinese scholar noted: ‘shequ construction is not simply a reorganization of government, but a deep reform that will have a significant effect on our society’.93
    
    93 Tuo Su, ‘On shequ study’, p. 30.
    
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    Degree of autonomy from local government Low Administered by the sub-district office of the local government Relation to local government Responsibilities Funding Almost wholly funded by local government Low Administered by various levels of local government, but primarily by the sub-district office of the local government Almost wholly funded by local government Moderate Largely operates as a separate level of administration Administered by various levels of government, but has developed a moderate level of autonomy Almost wholly funded by local government Almost wholly funded by local government Similar to a neighborhood committee. Policy is drafted by the local government. Shequs can only implement policy Priorities are set by the local government, but the shequ is allowed some policy formulation influence and moderate autonomy in implementing policies Significant policymaking and policy implementing autonomy Priorities are set by the local government, but the shequ is allowed some policy formulation influence and moderate autonomy in implementing policies
    
    Appendix I
    
    Shequ model
    
    Leadership selection method
    
    Shanghai
    
    Direct election
    
    JAMES DERLETH AND DANIEL R. KOLDYK
    
    Wuhan
    
    Indirect selection
    
    Shenyang
    
    Direct election
    
    Qingdao
    
    Appointed, but moving Moderate towards direct elections
    
    THE SHEQU EXPERIMENT
    
    Figure A1. MOCA-shequ organizational structure.
    
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    Appendix III: Model Shequs In 1999, the Ministry of Civil Affairs created the following 26 model shequs. Province Anhui Beijing Chongqing Fujian Guangdong Hainan Hebei Heilongjiang Henan Hubei Jiangsu Jilin Liaoning Liaoning Sha’anxi Shandong Shandong Shanghai Tianjin Xinjiang Zhejiang
    a
    
    City Hefei Xiamen Foshan Haikou Shijiazhuang Harbin Luohe Wuhan Nanjing Changchun Shenyang Benxi Xian Jinan Qingdao Kelamayi Hangzhou
    
    Districta Xishi Xicheng Jiangbei Kaiyuan Chengnan Zhendong Chang’an Daoli and Nangang Yuanhui Jianghan Xincheng and Gulou Chaoyang Shenhe and Heping Xihe Xincheng Lixia Shinan and Sifang Louwan Heping and Hexi Kelamayi Xiacheng
    
    Some cities have shequs in more than one district.
    
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    Appendix IV: Shequ selection criteria Selected data from model cities (1998). Salary grade 1 4 5 3 2 4 4 3 2 3 1 4 4 2 3 4 2 City Beijing Benxi Changchun Chongqing Foshan Haikou Hangzhou Harbin Hefei Jinan Kelamayi Nanjing Qingdao Shanghai Shenyang Shijiazhuang Tianjin Wuhan Xian Xiamen Luohe Population 1,223.39 N/A 686.87 3,059.69 N/A 52.79 611.64 921.83 425.98 553.54 N/A 532.31 699.57 1,306.58 674.86 867.27 905.09 731.79 668.22 126.59 N/A Average annual salary 12,451.06 N/A 7,869.13 6,433.53 N/A 9,588.98 10,555.08 6,602.85 7,314.36 8,326.57 N/A 10,661.21 8,241.96 13,580.56 7,810.95 6,969.69 9,948.44 8,254.61 6,921.59 12,238.54 N/A
    
    Note: Numbers 1–5 equal average salary levels: 1. $1,500 RMB12,300: Beijing Shanghai, 2. $1,200 RMB9,840: Nanjing, Tianjin 3. $1,000 RMB8,200: Jinan, Qingdao Wuhan 4. $800 RMB6,560: Harbin, Shenyang, Shijiazhuang 5. $800 Chongqing.
    
    Appendix V: Governmental Type in Cities with Model Shequs Centrally governed cities: Provincial capitals: Special Economic Zones: Others: Beijing, Tianjin, Shanghai, Chongqing Shijiazhuang, Shenyang, Harbin, Nanjing, Jinan, Wuhan, Changchun, Nanjing, Hangzhou, Hefei, Xiamen, Jinan, Haikou, Xian Shenzhen Foshan, Qingdao, Benxi, Luohe, Kelamayi
    
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