How to Manage China

1. China is by far the world’s largest and most populous country that does not use a federal system of government.

2. In China, all political power and major decision-making are controlled from the political center in Beijing.

3. This hierarchical structure reflects a long tradition of Chinese political thought.

4. The notion of a single unitary state, or dayitong, has historically been seen as the natural goal of any government in China.

5. For that same reason, Chinese scholars and leaders have long warned of the dangers of “localism.”

6. In contrast, countries from Australia to Venezuela have tried to solve the problem of governing large and diverse territories by granting substantial autonomy to sub-national regions.

7. Around the world, the forms of federalism vary. In places like Russia, they even co-exist with authoritarianism.

8. Federalism has much to offer China — but it would require the leaders in Beijing to give real political and decision-making power to local authorities.

9. As China’s current system works, the role of provincial and local governments is simply to implement policies set at the central level.

10. However, in order to carry out the central government’s mandates, local leaders are given wide discretion over how to spend money.

11. Surprisingly, local governments in China are responsible for a larger share of total government spending than in the (federal) United States of America or Switzerland.

12. However, this economic decentralization does not equal federalism. Local governments only carry out policy, they do not determine it.

13. In environmental protection, the central government sets unrealistic standards that local governments cannot meet without jeopardizing economic growth.

14. If local leaders could set locally appropriate standards, they would have both greater accountability and greater interest in ensuring these standards are met.

15. Federalism’s biggest benefit for China is perhaps its promise to better address the concerns of restive minority regions.

From The united states of China by Scott Moore (Harvard’s Belfer Center for Science and International Affairs).