Nanfang Zhoumou [Southern Weekend] February 27, 1998
Yang Fan
There are profound causes behind the pathological expansion of the selfish interests of government departments.
First, while the economy was switching to a new track, the “joining of power and the market” created a trend of government departments strengthening themselves and expanding their influence. Administrative power refers to the power of local authorities and to the power of government departments. During the course of China’s gradual reforms, power was gradually devolved and power was combined with the market. Central government capital became the capital of local government and of the central government departments. But administrative power which benefited from the market economy was not only not willing to retreat from the market it actively plotted to monopolize the market.
Secondly, the problem of “unevenness in benefits” was not resolved. The problem of “evenness of benefits” exists in every country. There are always a few highly organized interest groups. The fewer the number of members in these interest groups, the higher the average income of the group members. In this situation the interests of the majority are difficult to safeguard since organizing requires capital and people would not want to pay this capital but put up with other people “hitchhiking” for free. This is the problem of a few interest groups that use power to gain a selfish advantage at the expense of the interests of everyone. In China, where there is no mechanism for openly exchanging benefits, the problem of not separating administration from business enterprise [zhengqi bufen] has not been solved. Government regulatory departments regularly participate in interest groups. This makes the phenomenon of “uneven benefits” grow steadily more serious.
Thirdly, it is already very difficult to restrain the expansion of the selfish interests of government organizations by relying on administrative power, on the inspection of financial accounts by disciplinary organizations, or even using judicial processes. We need more political reforms and we need stronger democracy and supervision by public opinion -- that is, social restraints to address this problem. We need to accelerate the process in which the selfish interests are out in the open and in which these selfish interests are addressed in framework of a legal system. In this way various interest groups will place checks upon each other. But out of consideration for the stability of the overall situation, social reform has been relatively slow over the past few years. Some local authorities and central government departments use administrative power to restrict supervision by public opinion.
Fourthly, Piecemeal emphasis on “strengthening management” is often counterproductive. The problems described above arise chiefly because of the excessively powerful administrative powers left over from the centrally planned economic system. In the centrally planned economy, administrative power was checked by the centralization of power. Power was devolved during market reform and there are no social restraints on that power. The result was the combination of power and the market. Faced with severe corruption and situations that are out of control, we certainly must adopt various measures to strengthen management and take stringent measures to rectify the situation. However some people, because they don’t have a deep understanding of the background of social and political reform, call for measures that strengthen management but just end up strengthening administrative power. This blocks the deepening of reform and prevents strong remedial forces from coming to bear on corruption. This “strengthening of management” in some areas even fosters the growth of corruption in some domains.
Now Chinese reform has entered its most critical and most difficult period. Moreover the combination of power and the market, including the pathological expansion of the selfish interest of government departments has also progressed to a very serious stage. If it continues to grow, very serious consequences will result. The first consequence is that the rapid increase in corruption and polarization that very seriously threatens the reputation of the Party and the Government and affects social stability even to the extent of creating a crisis of confidence. The second consequence is the delay of reform and the establishment of market and economic regulations, thereby affecting China’s international image and the confidence of foreign business in investing in China. The third consequence affects the development of the new motor of Chinese economic growth: it makes it harder for ordinary families to buy homes and automobiles. It is only because economic demand comes largely from these interest groups that an apparent surplus exists. Therefore we need across-the-board reform that will the put the selfish interests out in the open and to address them in a legal framework. We need to separate power from the market so that China can smoothly advance to a healthy socialist market economy.