Zhuoran Li has a neat description of China’s frontline bureaucracy at the township level that resonates with many other accounts. It is worth extracting in detail and discussing its lessons for countries like India.
The township, which includes both the rural and urban areas, is responsible for the implementation of most functions of the government such as education, healthcare, public welfare, and municipal services. This is a description of the administrative hierarchy at the township level.
At the top of the township government hierarchy are local leaders, who are township cadres with administrative rankings. A township typically has three section-level (科级) leaders: the township Chinese Communist Party (CCP) secretary, the township mayor, and the chief of the Township People’s Congress, who is often the former township party secretary transitioning to retirement. In addition, there are approximately 10 vice section level (副科级) leaders, including vice party secretaries, vice mayors, the discipline inspection secretary (纪检书记), and the heads of several key offices. Officials heading less critical offices or serving as vice chiefs of any office do not hold administrative rankings and, therefore, are not considered leaders.
The next level below government leaders are civil servants with no rank who hold bianzhi (编制), which refers to established posts within government offices. Bianzhi status grants significant benefits, including superior welfare compared to regular citizens and lifelong employment (unless the employee commits a crime). Within the bianzhi workforce, “cadres” and “officials” hold civil servant bianzhi, while other bianzhi workers have public institution bianzhi – the same designation given to teachers and doctors in public hospitals. Only those with civil servant bianzhi can reasonably expect opportunities for promotion. In contrast, those with public institution bianzhi have no career advancement prospects.
Li points to several career progression challenges at the township level.
The path to promotion begins only when an official is elevated to the vice section level, becoming a township leader. Making it to vice section level is not difficult. Officials attest that almost all cadres can expect this promotion as long as they don’t make any serious mistakes. However, further promotion from here becomes extremely difficult. Therefore, most township leaders do not view promotion as a strong incentive and often describe themselves as “not caring much about promotion.”
Promotion opportunities at the township level are rare, as leaders face intense competition and strict age cutoffs. As Chien-wen Kou and Wen-Hsuan Tsai noted, the age cutoff for promotion to vice section and section levels is 40, while the cutoff for vice division (副处) level is 45. In reality, interviews indicate that in many places, the cutoff age for the vice section level can be as early as 35. Promotion opportunities are further constrained by the competition among vice section leaders, 10 of whom may vie for just two section-level positions. Moreover, township party secretaries and mayors are often not promoted from the pool of vice section leaders within the township. Instead, county-level governments may appoint section-level leaders through temporary transfers (挂职), effectively fast-tracking their promotion… As a result, township governments are often referred to as a “black hole for young cadres,” trapping many in perpetual vice section level assignments. They frequently surpass the promotion cutoff age and remain indefinitely in vice section positions.
Promotion prospects do not improve for section-level leaders, as they face even fiercer competition. A county typically has only around 10 vice division (副处) level positions. Township and street (街道) party secretaries and mayors compete for these roles alongside section chiefs from the county government. As several cadres have concluded, promotion opportunities are largely reserved for those with the right connections…
The lack of promotion incentives is a widespread phenomenon. According to research by Jianxing Yu and Xiang Gao, more than 70 percent of surveyed officials in Zhejiang stated that they know their terminal position early in their careers. Therefore, since early in their career, many local officials decide not to participate in the promotion tournament.
This is a good nice description of how officials manage to work the system to get assigments of their choice.
Since promotion opportunities are rare, township leaders have developed different career calculations. Some are primarily motivated by the goal of “escaping the township.” Many township leaders keep their families in the county center to access better housing and educational opportunities for their children, while residing in township government dormitories during the workweek. Consequently, they aspire to secure an administrative reassignment (平调) to the county government as a section chief, which would allow them to work closer to their families. Obtaining such a reassignment depends largely on strong personal connections with county leadership and the Organization Bureau. Others, however, prefer to remain in the township because they value the benefits of “holding real power” (大权在握). Many leaders enjoy the authority that comes with being “number one” (一把手) – and the ability to leverage this nearly unchecked power to enrich themselves. For such figures, an administrative reassignment to the county government is seen as a career downgrade.
The similarity with India’s district and below level bureaucracy is remarkable.
This about contract workers.
Many township governments often employ more contract workers than official bianzhi workers. They perform similar tasks and often work closely with officials. In fact, township contract workers are often more competent than their counterparts. Unlike officials, who are required to rotate posts and localities under the Civil Servant Law, contract workers often remain in the same position for their entire career. This continuity allows them to develop a deeper understanding of local conditions and acquire specialized skills… In theory, a township government can terminate a contract worker’s position at any time. However, the specialized skills that contract workers possess make them irreplaceable, granting them de facto job security… township governments are highly reluctant to fire contract workers unless they commit a crime or a serious mistake.
The primary distinction between contract workers and regular officials is that contract workers do not receive the welfare benefits that officials are entitled to. They only receive basic wage, which is lower than bianzhi workers’, and do not enjoy any bonuses or subsidies… contract workers enjoy more freedom compared to officials. They are not subject to investigations by the commissions for discipline inspection at various levels, since many of them are neither civil servants nor CCP members. Additionally, they are exempt from sitting through the grueling meetings or participating in political activities that are typically reserved for officials and Communist Party members.
Li has this summary of the local government performance.
China’s township governments are best described with one word: stagnation. One cadre captured the reality of township government succinctly: “Everyone is stuck.” Such stagnation will inevitably lead to organizational decay. The resiliency of the CCP comes from its grassroots, and a stable Chinese state depends on local governments delivering services. Decaying local governments will lead to long-term social consequences.
So what are the lessons for countries like India from the Chinese administrative structure?
1. In India’s administrative hierarchy, the township appears akin to the block, the county to the sub-division, and the prefecture to the district. However, unlike in India, the Chinese administrative units appear to have been created keeping in mind their size and functional importance. Accordingly, the largest cities like Beijing and Shanghai have province-level status, some larger cities have prefecture-level status, and some others have county-level status. This is in contrast with India where all municipalities and districts are alike in their administrative powers. In the Chinese administrative structure, Mumbai and Bangalore would have the powers associated with state governments.
2. The bianzhi are similar to the field staff in local governments in India, and the Vice-Section level and above forms its leadership. In terms of career progression, in most states, their progression is limited to their local government. In this respect, their prospects are similar to their Chinese counterparts. Further, local governments in India are generally are headed by officials appointed from the state governments.
The portrait of the bianzhi painted by Li is not flattering. They appear no more or less motivated or institutionally primed (to perform) than their Indian counterparts. As Yuen Yuen Ang and others have pointed out, these levels of government are also rife with petty corruption and speed money. This requires more understanding.
It is possible that most of the government actions in terms of economic growth happens by way of policy decisions on economic growth and investment happens at the level of prefecture and provinces. The frontline bureaucracy, represented by the township level, may be merely delivering public services, for which China’s higher baseline of state capability may be sufficient.
3. The role of contract workers appear similar to that in India. It is not uncommon across government levels in India for contract employees, or consultants, to have become more indispensable than the regular employees. The Chinese frontline state appears as much dependent on the non-regular employees as India’s.
All these raises questions concerning the frontline functionaries and the state they represent. Is the median office clerk or teacher or nurse or tax inspector or policeman or land official in China more capable and/or more motivated than their Indian counterpart? Or is it that there are more of them than in India, thereby reducing the administrative burden? Or is the system less politicised at the frontline, given the single, unified Commuist Party in China? Or is it about greater administrative discipline and bureaucratic efficiency in monitoring and execution?
4. The Chinese officials at the larger county and at the prefecture levels appear similar to the IAS officers, who though enter laterally. The Xuandiaosheng, a Party-run track for top university graduates, but starting in village or township posts and then fast-tracked, appears the nearest to a selected elite stream.
In fact, one study by Genia Kostka and Yu Xiaofan of career backgrounds of 898 municipal (or prefecture-level) Party secretaries between 1990-2011, found that only 5.4% had mainly county-level careers, and under 1% came directly from a county post. About 56% were mainly municipal, 32% provincial and 3% central. The study points to a “glass ceiling” for county cadres.
Our analysis finds that obstacles hindering leading county cadres from rising to the upper ranks of the municipal apparatus include age and education restrictions; limited positions at the municipal level; the lack of networks linking to provincial leaders; and provincial leaders’ appointment preferences. Limited career advancement opportunities for county cadres have important implications for understanding the incentive foundations of China’s bureaucracy. With only slim prospects for leading county cadres to rise to top municipal positions, the political incentives outlined in the cadre evaluation system might not be as effective in steering cadre behavior as currently claimed in the literature.
This trend is also reflected in the career profiles of top government and Party leaders like Xi Jinping and Li Qiang.
5. The appointments and promotions into the government and Party at each level are managed by one level above, by the Organisation Department of that level. Interestingly, unlike other Departments, this Department functions as a Party body and not a government ministry. The centre appoints ministers, governors and provincial Party secretaries, and each Party committee manages cadres one level below it. So the province, not Beijing, picks prefecture heads. This points to a significant level of delegation of responsibilities in personnel management and a highly capable, objective, and professional Organisation Departments across levels.
Since most officials are also Party members, they move routinely between the Party and the government. As you go up, careers alternate between the two tracks.
6. The mainstream accounts of China’s bureaucracy paints a picture of managed competition among local governments as the driver of its success. This calls for a highly capable set of leadership level officials, institutional capabilities, and strong alignment of institutional and personnel incentives. These accounts describe a highly competitive and empowered system that also aligns the career progression of officials to jurisdictional performance in expanding the economy and creating jobs. This requires a highly meritocratic set of incentives and their disciplined compliance and enforcement from the top.
The deeper institutional innovation in China may be that of local governments (prefectures and provinces) being able to capture some of the returns to local economic development while their officials were simultaneously evaluated on that development and their career progression was dependent on the evaluation. This innovation has been underpinned by managed competition among local governments.
7. Even with this administrative structure, the fuel that fired competition was financial resources - revenues from land sales (and the raising of debt through Local Government Financing Vehicles, LGFVs), share of tax revenues from local economic activity, the profits from ownership of stakes in State owned enterprises. This resource stream is also important since the local governments receive very little provincial or central support and are responsible for over 85% of the government spending. Further, China does not have property tax, and after 1994, the central government dispensed with the retention of marginal revenues beyond the contracted base and recentralised a substantial share of tax revenues.
There are very few countries which can even remotely closely mimic this institutional structure and the scale of financial resource availability at the local government level.
Imagine an Indian parallel, where larger cities and districts, headed by IAS officers, are empowered to sell lands, set up off-balance sheet entities to raise debt and finance infrastructure, establish companies and subsidise them, court private companies to build factories and provide them bespoke incentives, mobilise funds and invest in innovative sectors, etc. This would be far beyond their capabilities. Even if the capabilities were miraculously mobilised, creating the institutional and personnel incentives to do these activities with reasonable fidelity would be difficult, if not impossible. It must be borne in mind that even state governments in India struggle to do these activities with any degree of effectiveness. In fact, even the central government has struggled to effectively manage the disbursal of its flagship innovation fund.
There are so many questions that come to mind.
How does the Chinese adminstrative system maintain its discipline given, say, the discretion available to mayors and governors in picking winners and allocating them large amounts, or controlling state-backed venture funds (as outlined here)? How does this discipline co-exist with several accounts of widespread corruption and aggrandisement among senior officials at these levels? Or is it that the centre condones these excesses to some extent as long as the headline outcomes on economic output and jobs are delivered? Or is it that the extent of administrative powers and financial resources available endow local governments with the levers to generate economic outcomes even with the indiscipline? Or is it that the magnitude and scorching pace of economic growth has offset all the inefficiencies?
How much of the success of the Chinese bureaucracy in delivering outcomes is due to the presence of a parallel Party structure, especially given that the Party Secretary outranks the mayor or governor? How much of the discipline within the government bureaucracy is due to the Party oversight? How much is it due to the personnel management of the government itself being done by the Party-controlled Organisation Department? How much of the discipline arises from the incentives on rising up the hierachy? How much of the motivation and drive to realise national goals among leaders is due to their Party membership and indoctrination?
It is difficult to not come away with a strong belief that the Chinese administrative system is sui-generis and may offer limited lessons for others to emulate in both reforming their own less effective administrative systems and also in creating institutional structures to enable and sustain high growth rates.
I had blogged here on China’s management of their public sector units, another sui-generis arrangement which might be difficult to replicate in countries like India.
