Special Issue on China: Interests, Institutions, and Contentions in China

Guest Editor: Dali L. Yang

Market Transformation and the Politics of Governance

FOOD SAFETY AND THE DEVELOPMENT OF REGULATORY INSTITUTIONS IN CHINA
- Waikeung Tam and Dali L. Yang (pp. 5 - 36)

Consumer safety has become an increasingly salient issue for China's rising middle class and regulatory state. This article elucidates the challenges of regulatory development in China through a study of food safety regulation, paying special attention to a scandal involving the sale of fake and substandard milk powder. It highlights some of the deficiencies of the regulatory regime and addresses some salient issues concerning regulatory state building, including the regulatory chasm between urban and rural areas, the appropriate role of the state in socioeconomic regulation, the uncertainties created by government reforms, and the conflict between food safety and employment. (Key words: China, economic development in East Asia)

CORNERING THE MARKET: STATE STRATEGIES FOR CONTROLLING CHINA'S COMMERCIAL MEDIA
- Ashley Esarey (pp. 37 - 83)

Decentralization of state power over media ownership led to new challenges for state control of media content in the 1980s. Following the Chinese Communist Party's legitimacy crisis after Tiananmen, party leaders in charge of China's public media permitted greater freedom for news content deemed politically "safe," while maintaining tight control over politically sensitive news content. In order to supplement coercive strategies, the state developed market incentives to encourage media to produce news that was politically acceptable and popular with consumers. To test the extent to which commercial media have complied with the state's content priorities, this article considers evidence from a case study on news coverage of the Severe Acute Respiratory Syndrome (SARS), an epidemic seen by the party as threatening to regime legitimacy. The SARS case study reveals that in the presence of tremendous market demand for information, state control of the news media was considerable but not absolute. (Key words: China, communist parties, democracy in East Asia)

BREWING TENSIONS WHILE MAINTAINING STABILITIES: THE DUAL ROLE OF THE HUKOU SYSTEM IN CONTEMPORARY CHINA
- Fei-Ling Wang (pp. 85 - 124)

As a key institution in the PRC, the hukou (household registration) system defines and conditions Chinese politics, social life, and economic development. This article describes the current status of the hukou system and its significant changes, and outlines its complicated but crucial functions. The hukou system facilitates a rapid but uneven economic growth and creates significant social and regional disparities. It also helps greatly to stabilize the PRC sociopolitical order through an effective police control, while generating powerful tensions in the areas of human rights, equity of citizenship, and simple ethics. Further reform of the system is needed to continue its role in the Chinese political economy; yet a withering or abolition of the hukou may seriously challenge China's sociopolitical stability and economic growth. (Key words: China, economic development in Asia)

ELECTIONS, GOVERNANCE, AND ACCOUNTABILITY IN RURAL CHINA
- Fubing Su and Dali L. Yang (pp. 125 - 157)

While competitive elections are a crucial aspect of village democracy, they are only one means to achieving good governance. In this article, we consider village elections in the broader context of improving governance in China. We argue that the promotion of village democracy should be complemented by simultaneous improvements in a number of other non-electoral areas that enhance the accountability of public officials. The Chinese central government has paid greater attention to these institutional aspects in recent years. The leadership is willing to encourage local experiments and tolerate some unorthodox practices. This interaction between local initiatives and central interventions will shape the future of village democracy in rural China. We analyze several of them in particular: tax-for-fee reform, new accounting practices, village affairs disclosure, and institutionalized participation in democratic decision making. This article reveals great diversity and discusses the politics of these institutional changes. (Key words: democracy in East Asia, China)

RESOURCES AND STRATEGIES: CONFLICTS AND ITS CONSEQUENCES IN THE CHINESE REAL ESTATE MARKET
- Tianfu Wang and Bobai Li (pp. 159 - 181)

Using the case of house-buying in Chinese cities, this article describes the conflicts between real estate developers and home buyers. During the transition period, social structure reshuffles and social groups reorganize. Developers and home buyers have emerged as two new groups after the commercialization of residential housing in urban China. With different aims and resources, they adopt tactical moves to pursue their interests in the real estate market. Conflicts between these two groups are common. Using it as a specific case, the article also contends that conflicts between these two groups originate in the structural change of the society. At the same time, these conflicts have feedback influence on the construction of a new social structure and on the establishment of new rules. (Key words: China, economic development in Asia)

CASHING OUT: SURVIVAL CRISES FACED BY SHAREHOLDING COOPERATIVES IN SHANGHAI
- Jin Zeng (pp. 183 - 208)

Shanghai, a city with a high concentration of state-owned enterprises (SOEs), had about 11,500 converted shareholding cooperatives by the end of 2003. In recent years, the urban layout of Shanghai has required factories to be relocated in the suburbs to make space for new city development. However, how to use the compensation money triggered severe confrontations between employee shareholders and the management of some urban shareholding cooperatives. This article argues that the shareholding cooperative system does not necessarily clarify individual property rights. Vague property rights and the flaws in institutional designs of shareholding cooperatives alter the incentive structure of shareholders and results in inefficiency and distributional conflicts among current employees, retired shareholders, and management. Local governments, instead of assuming a hands-off stance, need to pay due attention to the development of shareholding cooperatives, especially in regard to the legal environment, guidance for further reforms, and assistance in conflict resolution. (Key words: economic development in Asia, China)

SECURING A RURAL LAND MARKET: POLITICAL-ECONOMIC DETERMINANTS OF INSTITUTIONAL CHANGE IN CHINA'S AGRICULTURE SECTOR
- Gregory T. Chin (209 - 244)

The dimension of China's farm economy that has been least altered since the onset of the reforms in the early 1980s is the rural land system. However, in the face of mounting rural social tension and concerns over the impact of heightened trade liberalization on the domestic agricultural sector, Chinese authorities have recently undertaken a reform program to fundamentally alter the nature of agricultural land rights in the country. In the name of protecting farmers' rights and interests, new institutions are being established to certify rural land use rights and strengthen enforcement of these rights; facilitate the trade of these land use rights according to market principles; and settle disputes over tradable land use rights. These institutional reforms in the agricultural land management system are giving rise to a rural land market in China, based not on private land ownership but on a two-tiered rural land system that combines public ownership with the private leasing of user rights. These reform measures strengthen adherence to the rule of law in rural society and the market orientation of the rural economy, while at the same time reflect efforts to preserve China's state socialism. (Key words: economic development in Asia, China)