How China’s balancing act between centralised control and local leadership will be critical to its future
Zhang Jun says while recent years have seen a pullback from the decentralised governance instituted in the Mao Zedong era, it risks stifling growth and innovation. The answer may lie in a system of downward accountability
Five years ago, China’s leaders decided to target modern state governance as a top reform priority. The goal of such reform is to improve the state’s capacity to adapt to the sheer size and increasing complexity of the Chinese economy, and to mitigate risk. Achieving this objective will not be easy.
To understand why, and what it will take to succeed, consider how Chinese governance has worked in recent decades. Overall, governing the country involves a combination of political centralisation and economic decentralisation.
In particular, China’s spectacular income growth has been enabled by a delicate balance between the concentration of political power in the hands of the central leadership and the delegation of economic management to local authorities.
But, within a few years, this system had become so disorganised, due to economic chaos in the wake of decentralisation, that the central government reasserted its control.