Part Three
Remaking Local Political Networks

Six
Bureaucratic Patronage and Private Business: Changing Networks of Power in Urban China

David L. Wank

China's command economy gave rise to a clientelist political orden This order had several distinct features (Oi 1985, 1989; Walder 1986). First, the command economy gave lower-level officials a monopoly in the allocation of resources on which citizens were dependent. Officials had wide discretion in the allocation of material goods and career opportunities. Individuals could gain access to these resources through particularistic ties with officials. This created networks of patron-client ties across local boundaries between state and society. Second, relations between patrons and clients were stable over time. This stability was because of the closed nature of the workplace: goods and opportunities were distributed within the work unit and movement between workplaces was extremely rare. Stability was also reinforced by emotional bonds of loyalty and obligation that developed in many patron-client relations. Third, dependent clientelism was the foundation of what Michael Mann (1986) would call the state's "infrastructural power": its ability to penetrate and coordinate society. Clients helped officials mobilize compliance with central policies and directives. Clientelist networks also created social cleavages between clients and nonclients, inhibiting the development of organized opposition to the state.

What have been the consequences of China's commercial reforms for

this clientelist political order? Commercialization undermines the monopoly of officials over the allocation of goods and opportunities and should serve to undermine the basis of dependent clientelism. The reemergence of private business would appear to be especially consequential, inasmuch as it operates outside the command economy.

Debate about the consequences of private enterprise reflects three distinct views. The first view, most fully elaborated by Victor Nee (1989a, 1989b, 1991), sees private business as eroding dependent clientelism by undermining the basis of patron-client exchange. In the command economy, citizens depend on officials for resources, but private business creates new resources, access to which is through markets rather than bureaucratic allocation. As markets develop, therefore, the resource dependence of entrepreneurs on officials is reduced. Nee makes a distinction between long-term and short-term consequences. In the short-term, during the transition to a market economy, officials use their remaining power and influence to force a one-sided predatory extraction. "The niches in which peasant entrepreneurs operate and compete are typically crisscrossed by patronage networks dominated by local cadres who can use their power and influence to pressure, bully, and squeeze entrepreneurs" (Nee 1989a, 172). However, in the long-term, markets have a "subversive effect … on established social relationships such as patron-client ties" (Nee 1991, 279), leading to the declining power of officials and enhanced autonomy of society from arbitrary state power.

This view is contradicted by a second found in studies documenting new patterns of cooperation between local officials and entrepreneurs running larger private enterprises. Noting how the tax revenue generated by private business fills local government coffers, Liu Yia-ling (1992) describes a new "interest convergence" between officials and entrepreneurs. In the effort to stimulate private business, local officials shelter it from restrictive central policies and let entrepreneurs register their enterprises as collectives in order to bypass restrictions on private business. Dorothy Solinger describes a "symbiotic relationship" between entrepreneurs running larger private firms and officials staffing the lower bureaucracy; entrepreneurs give officials income through bribes and other payments, while officials give entrepreneurs access to capital in the state structure (Solinger 1992, 128–30). In this view, private business creates new interests at the local level for entrepreneurs and officials to cooperate in ways that deviate from central-state intentions.

A third view is found in studies of clientelism in China's commercializing economy (Oi 1985, 1986; Paltiel 1989). The emergence of markets in the context of uncertainties regarding the control of assets, restraints on state power, and fluctuating state support for private property rights engenders patron-client ties among local actors in state and society to reduce these

uncertainties. Clients seek patrons in the bureaucracy for political protection as well as for commercial advantage. This chapter furthers this view by extending it to a hitherto unexamined commercial activity, private capitalist business; by describing the strategies through which patron-client ties are built; and by analyzing the role of these ties in the local political order. This third view diverges sharply from the first view in arguing that there is no necessary correspondence between the emergence of markets and the decline of patron-client relations. The third view also encompasses the second view in emphasizing local cooperation between officials and entrepreneurs, but differs in its emphasis upon the individualized exchanges between officials and entrepreneurs for personal advantage that are often blatantly illegal. The distinctive contribution of this third view is therefore to emphasize the particularistic basis of the emerging alliance between entrepreneurs and officials in China's market economy.

In this chapter, I refer to the alliance between entrepreneurs and officials as "symbiotic clientelism." This new relationship is unquestionably clientelist: it involves an imbalance of power between official patrons and entrepreneurial clients, it involves the exercise of discretion by officials in allocating resources and opportunities, and it is embedded in personal ties. The key change from the earlier form of clientelism is that the degree of client dependence is greatly reduced, as the entrepreneur-clients have resources upon which officials now also depend.

In the next section of this chapter, I document the rise of private capitalist business in one Chinese city. In the succeeding sections, I in turn explain why capitalist entrepreneurs need bureaucratic support; clarify ways in which officials are able to support entrepreneurs; describe the strategies used by entrepreneurs to influence officials to help them; and describe how the resulting clientelist ties evolve and change. In the conclusion, I examine the political consequences of private capitalist business by contrasting dependent and symbiotic clientelism. The analysis is based on data from fieldwork conducted in the southeastern city of Xiamen, Fujian Province, during eighteen months of residence between June 1988 and June 1990. I interviewed entrepreneurs running one hundred private capitalist firms.^[1]

The Development of Urban Private Business

Private business was revived beginning in 1979 after more than two decades of suppression. The state's intention was similar to that of reformers in Hungary, as described in chapter 3 of this volume. It was to supplement the

[1] I conducted all the interviews myself in Mandarin Chinese. Introductions to entrepreneurs were provided by bureaus, private individuals whose friends and relatives were entrepreneurs, employees of public units who had business contacts among private entrepreneurs, and through referrals from other entrepreneurs. I also viewed officials in administrative bureaus, state commercial bureaus, public manufacturing enterprises, and state banks, as well as the officers of residents' committees.

production and circulation of consumer goods and services, create jobs, and stimulate economic competition. Private business has grown rapidly both by reviving licensed private business and by innovating within the "collective" sector.

Licensed private business first revived under the individual business family policy (see Gold 1989; Hershkovitz 1985). This permitted petty private enterprises and limited them to a maximum of seven employees and to nonmechanized forms of production and transport in a narrow range of businesses. Most of these original restrictions were subsequently removed in 1983. However, the limit on employees was politically sensitive and was not removed until the 1988 Private Enterprise Interim Regulations, which permitted private enterprises with eight or more employees (see Young 1989).

Innovations in the collective sector began with policies in the early 1980s that let groups of four or more unemployed individuals pool private capital to set up a collective enterprise (see Wank 1993, 75–85). The "public" status of these privately run collective enterprises — hereafter called cooperatives — enabled entrepreneurs to bypass restrictions faced by licensed private business and enjoy public enterprise advantages such as lower taxes and easier access to bank loans. Although cooperatives are formally classified as publicly "owned," they are considered private by entrepreneurs and the officials who regulate them, in that they are not managed by officials or people appointed by them.

Private business has grown rapidly. The number of petty private businesses grew from 150,000 in 1978 to 15.3 million in 1993. There were also 225,000 larger private enterprises, including 50,000 cooperatives by 1988, that hired on average sixteen employees (Zhang and Qin 1988). However, official figures for the larger enterprises are only an estimate; their number is probably much greater. One reason for this underestimation is that many cooperatives are counted as part of the collective rather than private sector.^[2] A significant portion of collective-sector growth is thus owing to private business. From 1978 to 1992, the private sector's share of total retail sales grew from 0.1 to 20 percent, while the collective sector's share of industrial output grew from 23 to 38 percent (State Statistical Bureau 1993, 23).

The development of private business varies regionally because of local

[2] The official figure of 50,000 cooperatives in 1988 is admittedly conservative (Jia and Wang 1989). Yet according to a survey published in 1989, 60 percent of all the collective enterprises in Fujian province alone are privately run cooperatives (Lin 1989, 34). The Xiamen Bureau of Industry and Commerce determined that 20 percent of the 6,324 collectives in the Greater Xiamen Municipality were really cooperatives.

differences in geography, history, and government policy. The situation in Xiamen, the field site for this study, reflects the rapid growth of private business in the southern coastal region, which enjoys more liberal economic policies and easier access to financial capital and trade through connections with Chinese in Taiwan, Hong Kong, and overseas. Xiamen, a former British treaty port, is the commercial hub of Fujian Province, has the same local dialect as in Taiwan (which is one hundred miles across the Taiwan Straits), and is in the ancestral region of one-fifth of the world's overseas Chinese.^[3] These favorable conditions led to the city's designation in 1980 as one of China's five special economic zones to take the lead in creating a market economy and attracting foreign investment. In contrast to other local governments, which restrict private wholesale trade in order to control the local circulation of commodities and prices, Xiamen is one of the few local governments to issue private business licenses to general trading companies. This is because the main concern of the Xiamen government is to hasten the circulation of commodities between domestic and international markets through Xiamen in order to spur the economy of the special economic zone.

Private business in Xiamen has grown rapidly. By 1988, there were 15,254 private businesses registered under the individual business family policy, mostly in commerce and trading in consumer commodities. There were also 621 private capitalist trading firms by 1989, with 180 in the licensed private sector and 441 cooperatives.^[4] The entrepreneurs who run these capitalist firms have no jobs in the state structure. They hire from eight to several hundred employees, provide their own start-up capital, keep account books, and reinvest profits for expansion. They pursue national and international trade in such consumer commodities as home appliances, car parts, and designer clothing, and in such producer commodities as chemicals, metals, and construction materials. A number of firms have diversified into manufacturing ventures in areas such as textiles, foodstuffs, handicrafts, and assembly of imported computers and medical equipment, or have established restaurants, automotive repair firms, scientific institutes, or computer software development companies. Many have also launched joint business ventures with public agencies or enterprises, and a few with overseas Chinese and foreign businesses. Their annual sales volume (at the time of the fieldwork) ranged from 1 million to 120 million yuan.^[5]

[3] Xiamen's registered urban population was 579,510 in 1988. Like other prosperous Chinese cities, Xiamen had an unregistered population of migrant laborers estimated at from one-quarter to one-third of the registered population.

[4] All statistics were obtained through interviews with the Bureau of Industry and Commerce, which licenses private businesses. The figure for cooperatives is a bureau estimate.

[5] In mid 1989, 1 yuan equated U.S. $0.27.

Why Entrepreneurs Need Bureaucratic Support

The strong desire of entrepreneurs for support from the bureaucracy was apparent during interviews. Particularly revealing was their response to an open-ended question on the prerequisites for business "success." I did not define success, but in interviews entrepreneurs consistently defined it in terms of business scale. To be successful was to be a boss (laoban ) running a company (gongsi ) and doing business in a big way (zuo da shengyi ) as opposed to being a peddler (shangfan ) running a shop (shangdian ) and doing petty trade (xiao shengyi ). The most successful entrepreneurs run enterprise groups (qiye jituan ) diversified not only across business lines but across the formal categories of the economy into the collective and state sectors through various joint-venture arrangements. Achieving this success requires the support of officials in a wide range of matters. Some entrepreneurs talked about this support in terms of access to profit opportunities. For example, one said, "Your skill and ability as an entrepreneur are less important than having proper support [zhichi ] from the local government. With proper support you can get whatever you need. If you don't have capital, then you can get capital. If you need scarce goods, then you can get scarce goods" (informant no. 27).

Others talked about support in terms of protection from arbitrary sanctions and regulations. Another entrepreneur said, "Everything depends on personal ties [guanxi ]. If you have good ties with officialdom [guanfang ], everything is easy to deal with. If you do something wrong, your friends in the relevant bureau will see that the matter is forgotten. But if your ties are bad, then officialdom will make trouble for you even if you've done nothing wrong" (informant no. 17). Ideal bureaucratic support is provided by patrons (houtai laoban ) and backers (kaoshan ). These are officials highly placed in public units who use their discretion regarding decisions over the allocation of resources and in administrative matters to create opportunities and overcome problems for entrepreneurs. This kind of support is considered "solid" (ying ). Lower-ranking officials and public-unit employees with narrow spheres of discretion can also provide support, and, indeed, entrepreneurs running smaller capitalist enterprises rely entirely on these kinds of support.

An entrepreneur in the construction trade (whom I shall refer to as Zhang) shows how entrepreneurs draw bureaucratic support from a range of officials and public employees. Zhang manufactures and sells tiles, as well as a peel-resistant paint he developed for Xiamen's humid climate. He employs about sixty workers in several factories that are subsidiaries of his licensed private trading firm. My interview with him was interrupted by numerous visitors and at lunch together afterward I found out more about those who were officials and public employees. Below is an edited excerpt

from my field notes on some visitors, which illustrates the extent of his ties with local officials:

The first visitor was an out-of-uniform official from the Bureau of Industry and Commerce. He wanted to buy a certain color of tile. Zhang had only one lot in stock and had already promised it to another customer. But Zhang went ahead and sold it to the official at only slightly above his production cost. It turns out that the bureau issues Zhang's business license, which lists the commodities that he can legally sell. Since the license was issued, changes in state policy have banned several of the listed commodities for private trade. However, in Zhang's case, the bureau interpreted the policy in his favor by not deleting these commodities from his license, on the grounds that the policy was not retroactive. To ensure this kind of support from the local bureau, Zhang gives its officials "special treatment" (teshu youdai)…. The fourth visitor was an employee in the Railroad Bureau and former co-worker of Zhang's father, who passed away several years ago. He wanted some tile for the floor of the house he was building. Zhang sold it to him at cost and gave him some paint as a housewarming present. This individual works in the freight depot assigning freight space in railroad cars in the state-run railroad. Because there is only one railroad track through Xiamen, freight space is at a premium. Good relations with this individual assure Zhang of space when he has to ship his manufactured products to customers…. The eleventh visitor was a uniformed official from the local Public Security Bureau substation. He sat for a long time and smoked his way through half a pack of Zhang's imported Marlboro cigarettes lying on the coffee table in front of the sofa. When he got up to leave, Zhang took the remaining cigarettes out and pushed them into his hand. Zhang later told me that the substation officials look the other way when he does not register his nonlocal workers at the substation. Zhang prefers nonregistration, because it is then easier to fire workers. It also minimizes the apparent scale of his factory, thereby reducing taxes.

The business activities of an entrepreneurial couple give insight into higher levels of bureaucratic support. The husband had been a highly regarded mechanic in a local army unit who had left in the mid 1980s to set up his own car-repair garage. By the time I met the couple in 1989, they were running an enterprise group that consisted of the original garage, a trading firm dealing in car parts, and a transportation firm with trucking and taxi operations. They lived in a suburban four-storey mansion, where I visited them several times. During the first visit, they attributed their success to the capital provided by overseas relatives of the wife, who came from a prerevolutionary business family, as well as to "support from the social environment" (shehui huanjing de zhichi ). I subsequently found out the nature of this support. On my next visit, as I was being entertained in the family's private quarters by the wife, teenage children, and visiting relatives, the boisterous sounds of drinking and feasting one floor below could be heard. It turned out that the husband was entertaining officers from the local army unit, in

which he had previously worked. After the husband left the army in the early 1980s, he continued to repair army vehicles in his former unit on a contract basis. When he set up a cooperative repair garage in 1985, he gave shares in the firm to these army officers, who arranged for the site for the garage and sold the entrepreneur practically brand-new equipment, at much lower prices, as damaged second-hand goods. During another visit, I literally stumbled into another form of the couple's social support when I bumped into an official wearing plastic slippers and an unbuttoned tunic emerging from the bathroom. His wet hair was plastered down, he was carrying a wet towel and a washbasin, and it turned out he was from the Transportation Bureau next door, whose personnel had a standing invitation to take hot-water baths in the entrepreneurial couple's house — a luxury, since most houses lack hot water. Needless to say, the couple had few problems regarding drivers' licenses and the registration of trucks and taxis. Near the close of my fieldwork, I was invited to the wedding of their daughter to a young official from the bureau.

In sum, the development of private business is embedded in bureaucratic support. This support consists of decisions by officials and public employees to enhance or "maximize" profit and protection for entrepreneurs. Individuals in the bureaucracy give entrepreneurs access to various resources that they control. The next section examines these various resources and the ways they enhance profit and protection in private capitalist business.

How Officials Support Entrepreneurs

Access to Profit

The resources controlled by the local bureaucracy are vast. They include previously unpriced assets, such as commodities that formerly circulated only in the planned economy and publicly owned real estate. Commercialization has given these assets a market price, thereby increasing their value. Other resources include access to financial capital, permission to trade in restricted products and engage in direct foreign trade, and advantages in the handling of routine administrative procedures that can confer competitive advantage. These resources all support the development of private business and are energetically sought by entrepreneurs.

First, entrepreneurs seek access to scarce commodities and raw materials. This scarcity often stems from a two-track price system that restricts the market circulation of commodities and raw materials. Before 1980, the prices of commodities produced by public enterprises were set by administrative fiat. Also, raw materials and commodities in scarce supply, such as steel, rubber, fertilizer, and lumber, were produced and supplied to factories according to state plan and at administrative prices; public enterprises were

not permitted to exchange or resell these commodities. Beginning in 1980, commodities were gradually released from regulation and enterprises could sell or purchase them at market prices. Market prices are usually much higher than administrative prices, which do not reflect actual production costs or market demand. Thus any individual or enterprise that can obtain valuable commodities at administrative prices can reap large profits by reselling at market prices. Many officials divert quantities of administratively priced commodities that they control to sell at market prices for their own gain. Through relations with officials, entrepreneurs can obtain access to these scarce goods.^[6] Although access might include price discounts, the officials reap the lion's share of this administratively generated rent. However, for entrepreneurs to obtain scarce commodities, even at market prices, is often valuable enough.

A second source of profit is the vast amount of real estate owned by public units and controlled by the officials in them. Real estate values have sky-rocketed since the late 1970s. According to official figures, land prices in Xiamen rose approximately 900 percent from 1979 to 1986 (Xiamen City Real Estate Company 1989, 96). In interviews, entrepreneurs told me of much higher actual increases, including one of 26,566 percent.^[7] Bureaucratic support in this regard can consist of access to business sites at below market prices. For example, in 1983 an entrepreneur leased a store owned by a street committee at a monthly rental rate of 1.10 yuan per square meter. In 1990, the store next door was leased to another entrepreneur for 56 yuan per square meter. However, the entrepreneur who had signed the lease in 1983 was able to avoid a lease renegotiation to reflect the increased market value because he had regularly given sums of money to the officers staffing the committee.^[8] For the officers this under-the-table cash was easily diverted to personal uses and therefore preferable to contracted rental income, which would have generated greater cash flow into public coffers, but would be more difficult to pocket. Bureaucratic support can also consist of preferential access to choice real estate. For example, urban school playgrounds and the large tracts controlled by the suburban village and township government are highly desired by entrepreneurs for factories.

[6] Goods exchange hands many times before reaching their final market at prices far above the administrative price. One example told to me was of beer acquired by an official for 1.70 yuan a bottle and resold at 2.50, a price markup of 68 percent. In another case, fertilizer that was resold three times underwent a markup of 94.4 percent (China News Analysis 1988, 4).

[7] This involves an individual renting a small apartment just off the main commercial street. The apartment was publicly owned, and the administrative rent was 3 yuan a month. The individual renting it then subleased it to an entrepreneur for 800 yuan a month.

[8] I refer to the individual staffing the residents' committee as "officers," as distinct from officials. The latter have formal bureaucratic careers, whereas the former are local residents, often elderly men and women, staffing this most local level of government.

A third profit opportunity is access to financial capital. Bank officials have wide discretion both in approving loans and in setting the interest rates. For example, when I asked entrepreneurs the monthly interest they paid on commercial loans, they mentioned rates of from 4 to 20 percent. Support from officials is crucial to obtaining loans and at preferential rates. The case of Xiamen's largest private firm in the late 1980s illustrates this form of bureaucratic support. The entrepreneur had high backers in the city government who arranged a large loan from a state bank in 1985. He used the loan to buy a controlling share of a newly established district-level cooperative bank. He then obtained further loans from the cooperative bank that made his private firm Xiamen's largest and gave him a national reputation. Bureaucratic support regarding access to capital is often forthcoming through the various forms of public-private business ventures discussed below.

Fourth, access to restricted trade opportunities is another source of profit. For example, only state foreign-trade corporations have the legal authority to conduct foreign trade. However, many entrepreneurs get them to sponsor their direct private trade with overseas businesses. The entrepreneurs pay foreign-trade corporation officials commissions in return for the necessary customs certificates and the use of the corporation's foreign exchange bank account to receive payment from overseas. Commissions range from less than 1 percent in the highly competitive seafood business to more than 4 percent in the more administratively restricted trade in raw materials.^[9] Another method involves discretionary access to local exemptions from state policy restrictions. For example, in Xiamen it was initially prohibited for private enterprises with private business licenses to trade in cement. In order to ensure a steady supply of cement for the local construction boom, the city government authorized a few private enterprises to trade it. As these exemptions were limited in number, access to them depended entirely on official discretion.

Fifth is access to public customers. Because public units are large in scale and have easier access to bank loans, they are potentially much larger customers than private firms. They are also more reliable trading partners, inasmuch as they are less likely to disappear or go bankrupt after taking delivery of commodities. The largest capitalist firms all conduct the bulk of their domestic trade with public units. Much of this trade takes advantage of Xiamen's geography and status as a special economic zone. A number of entrepreneurs import car parts, designer clothing, and home appliances to sell to public units in northern cities such as Beijing and Shenyang. In

[9] For example, during the 1989 student movement, students charged that the China National Coal Import/Export Corporation, presided over by Deng Xiaoping's daughter, charged acommission of 4.7 percent on coal exported to Hong Kong businessmen (Han 1990,30).

return, these trade relations give them access to the restricted commodities that officials in these units control such as cable and construction materials.

Sixth, entrepreneurs seek public status through joint public-private enterprises. These are legally licensed as "public" enterprises, enabling entrepreneurs to bypass restrictions on licensed private business such as proscriptions on the sale of wire, cable, pipes, and other scarce and lucrative commodities. Public enterprises also have advantages such as lower tax rates and larger tax breaks, have easier access to bank loans, are considered more trustworthy, are less subject to bureaucratic harassment, and are less likely to be suspected of illegal activities. Joint public-private enterprise takes several forms. One is the cooperative firm. Larger firms are sponsored by district-level urban governments and smaller ones are sponsored by lower levels, such as residents' committees. Entrepreneurs pay monthly management fees to their sponsoring public units, ranging from several hundred to a thousand yuan in the late 1980s, in return for a free hand in doing business. Another form is the jointly run (lianying ) firm. Entrepreneurs provide a share of start-up capital, and management expertise and market connections, while the public unit provides a share of start-up capital, the business site, and a public registration. Leased (zulin ) commercial firms are a third form. These are collective firms leased by entrepreneurs. In the late 1980s, leasing contracts were for three to five years, and the monthly rents paid to parent units ranged from one to three thousand yuan. Entrepreneurs provide the commercial capital and have a free hand to conduct business, with public status. A fourth form is village and township enterprise (xiangzhen qiye ). These are usually manufacturing firms set up with rural local governments and are registered as collectives. Entrepreneurs provide the start-up capital, while the rural government provides the site, employees, and public status, and its officials often serve as the managers.

A seventh way involves discretionary decisions in routine administrative matters in practically all administrative bureaus, one example being the regulation that entrepreneurs must obtain a temporary residence permit for nonlocal workers by registering them at the closest public security substation. Some entrepreneurs prefer not to register workers, in order to keep down tax assessments by minimizing the apparent scale of their businesses, and to make it less administratively cumbersome to fire workers. Other entrepreneurs prefer to register nonexistent workers, a form of payroll padding that lets them launder money. They withdraw money from the bank as wages for these ghost workers, which is then used to pay off officials. These misrepresentations of the size of the workforce would seem to be impossible without at least the tacit consent of officials in public security substations. The Tax Bureau was also often mentioned as the site of crucial discretionary decisions. It is no secret that entrepreneurs keep two account books, and that the ones given to the tax authorities are doctored. Charges

of tax evasion are therefore less a question of whether the evasion occurred (of course it did!) than of whether the tax officials decide to accept the doctored books.

Access to Protection

The bureaucracy can interfere with or obstruct private business in many ways. Some involve the harassment of entrepreneurs by administrative measures and sanctions. Others include policy actions emanating directly from the central state, such as sudden policy shifts and extraordinary bureaucratic campaigns, the implementation of which is in the hands of local officials. Bureaucratic support in these matters consists of discretionary decisions by officials that protect entrepreneurs from these hazards.

First, entrepreneurs seek protection from local bureaucratic harassment. Harassment consists of the use of administrative procedures to make life difficult for an entrepreneur who has displeased officials in some way. It is referred to colloquially as being made to "wear small shoes" (chuan xiao xiezi ). For example, entrepreneurs who protest about the Bureau of Industry and Commerce's licensing fee might have the fee raised or their legal business scope — the commodities they can legally trade in — reduced. Entrepreneurs who do not comply with the edicts and demands of other bureaus can be harassed by summoning them at short notice for meetings, charging them surcharges and fees, and making them strictly adhere to rarely enforced regulations regarding sanitation, working conditions, and exterior decorations. By cultivating ties with officials, entrepreneurs seek to ensure both that these officials will not harass them and that they will intervene to protect them when other officials do so. Intervention can be highly effective, as illustrated in the case of one entrepreneur running a cooperative. He purchased an expensive imported car for his exclusive use as head of the firm. The Tax Bureau sought to tax the car as private income, but the entrepreneur insisted it was public property that belonged to the cooperative. His sponsoring public unit intervened on his behalf, as he describes: "I called my mother-in-law [popo]^[10] and she came and told the Tax Bureau, 'This is a publicly owned firm and the car belongs to the firm. There is nothing in this for the Tax Bureau.' So everything was all right. If I have a problem and call mother-in-law, everything is all right" (informant no. 2).

Second, entrepreneurs seek protection from arbitrary local sanctions. Officials can impose fines and confiscate goods, regardless of whether an entrepreneur has committed an infraction or not. Indeed, sanctions are often used to generate an income for bureaus by selling confiscated goods (neibu chuli ). The Bureau of Industry and Commerce can confiscate goods

[10] Slang for a bureaucratic sponsor.

not in a firm's legal business scope, the Tax Bureau can seize goods in lieu of unpaid taxes, and the Customs Bureau can seize smuggled goods.^[11] Officials also warn entrepreneurs of impending regulatory actions against them. One example involves an entrepreneur who set up a jointly run firm in Xiamen with a rural township government. An official from the township government who was a firm manager absconded with the firm's cash, and the entrepreneur was unable to make interest payments on loans. When the city procuratorate placed a lien on the firm, a friendly official tipped the entrepreneur off, giving him time to hide his inventory and office equipment.

Third, central-state policies are subject to sudden change. Practices that have been condoned and encouraged are suddenly proscribed and condemned. For example, in late 1988 the practice of letting entrepreneurs privately manage collective firms, such as cooperatives, was condemned by the central state. Previously, entrepreneurs running cooperatives had been praised in the state-run media for using private resources to solve public problems such as unemployment. Now they were condemned for using public status for private gain. Locally, the Bureau of Industry and Commerce tried to get cooperatives to reregister as licensed private firms. But most entrepreneurs successfully resisted reregistration through the intervention of their bureaucratic sponsors. In another case, an entrepreneur purchased a large quantity of beer in another province, where lower taxes made it cheaper, and chartered a boat to ship it to Xiamen. Shortly after leaving port, the Fujian provincial government issued a new regulation prohibiting shipments of cheaper beer into the province. A friendly official in the Customs Bureau informed the entrepreneur that the boat would be seized and its goods impounded as smuggled contraband upon arrival in Xiamen harbor. This enabled the entrepreneur to unload the boat secretly along the coast.

Fourth, entrepreneurs seek protection from bureaucratic campaigns. These are extraordinary central-state interventions targeted at problems that have defied solution through more routine regulatory measures. They unfold like the political campaigns of the Mao era: a problem is first identified by the central state; its extent is determined by several spot investigations, and a quota of transgressors is established for the local bureaucracy to fill; local results go back to the central state, which then sets punishment and quotas for each degree; and finally the local level metes out punishment according to quota. While quotas have to be filled, officials have discretion in deciding which entrepreneurs and firms are actually labeled transgressors.

[11] Confiscated merchandise is sold quickly at bargain prices. One entrepreneur obtained smuggled television sets, VCRs, and refrigerators confiscated by the Guangdong Provincial Customs Bureau at 15 to 20 percent below the market price.

Needless to say, entrepreneurs seek to cultivate officials who can warn them of upcoming campaigns and ensure they are not labeled transgressors. There are several such types of campaigns. One is the economic rectification (jingji zhengdun ) campaign that targets problematic economic institutions. For example, among other things, the campaign launched in September 1988 targeted activities that complicated state regulation of the economy by blurring the boundaries of public and private enterprise, such as cooperatives. Other forms are clean government (lian zheng ) campaigns that focus on corruption and economic crimes committed by individuals, and tax-investigation campaigns (shuishou dajiancha ). Officials in a wide range of bureaus can provide support. For example, officials in the Tax Bureau can give advance warning of spot checks and show discretion in whom they target as transgressors in tax-evasion campaigns. In another example, the sudden flight abroad (to Bolivia) of one of Xiamen's best-known private entrepreneurs shortly after the start of the Economic Rectification Campaign in September 1988 was reputedly aided by an official in the city procuratorate, who had warned him of his impending arrest on bribery and smuggling charges.

How Entrepreneurs Influence Officials

I have just described the kinds of bureaucratic support that entrepreneurs seek in order to enhance the profits and protection of their businesses. All these forms of support depend on the exercise of discretion by officials. Furthermore, much of it is dubious or blatantly illegal, and is therefore more likely to be forthcoming among individuals who know and trust one another. For any single entrepreneur, the task is therefore to ensure that specific officials and public employees make decisions that support his or her firm (and not competitors'). This is achieved by strategies of personal influence that involve the cultivation of ties with individuals in the bureaucracy. Broadly speaking, entrepreneurs use three such strategies: payoffs, employment, and partnerships. Each strategy involves a distinct level of bureaucratic power and distinct mode of institutionalization. Payolfs involve street-level officials and public employees, while the other two strategies involve higher-ranking officials and greater institutionalization of exchange within the firm structure.

Payoffs

This strategy involves buying off the street-level officials and public employees whose duties bring them into contact with entrepreneurs and other citizens on a regular basis. Their power stems from their position as the most

local implementors of state policies: they enforce regulations in society; take care of public assets; and gather information on society to inform higher levels of the local situation. They have some discretion in this local implementation, which entrepreneurs seek to influence by buying them olf with cash payments and gifts. This strategy is indicated by various terms used by entrepreneurs. Terms such as "kickbacks" (huikou ) and "red envelopes" (hong bao ) refer to cash payments, while expressions such as giving officials "convenience" (fangbian ) and "special treatment" (teshu youdai ) refer to gift-giving.

The terms of exchange in cash payments are relatively clear-cut. For example, entrepreneurs encourage public-unit purchasing agents to place orders with their private firms through kickbacks. This practice is especially important in such highly competitive lines as auto parts. As such commodities all originate from a few Hong Kong—based suppliers, there is little variation in price, and purchase orders depend on the side benefits that an entrepreneur can give purchasing agents. One entrepreneur organized an exhibition of car parts and invited purchasing agents from public units from all over China. He put them up in local hotels and used kickbacks to land large orders from them.

Payments are also made in response to requests by officials in bureau substations for "donations." These payments assure that the officials will not cause trouble, an arrangement verging on extortion. One entrepreneur explained this as follows:

Only those organizations that have some connection with me will ask for money. It could be a new building for the Self-Employed Laborers Association, the retirement fund for the public security substation, [or] the social welfare fund for the residents' committee. The amount is not that much, twenty yuan here, forty yuan there. It is a token sum. Of course, if you don't want to give money, they will not force you to do so. But there is a saying, 'You can get by the first of the month, but perhaps you won't be able to get through the 15th of the month.' Who knows? If you don't give money, maybe they will never make trouble for you in the future. I have never encountered this trouble yet. I have never met with any difficulty. But I have never refused to donate. (informant no. 17)

Other payoffs appear more as gifts. Gifts differ from payments in that they are actively given by an entrepreneur. However, many so-called gifts are actually given in response to hints and indirect demands by officials. This can be seen in the comments by an entrepreneur running a transportation firm:

The local head of the residents' committee is like the Kitchen God. He has been the head since 1952…. I am doing business on a large scale. Now he

comes to me and says, 'Aiya, you have quite a lot of money. The country has asked me to sell these bonds, so could you help me out and buy a few extra?' He has a quota to sell. It is difficult for him to ask those old grannies and mothers with children to buy them, because they barely have enough money to fill their market baskets. So I asked the head how much the quota was. '1,000 yuan,' he said. So I said, 'Forget about asking the others. I'll take them all.' So he was very happy. It was as if a weight had been lifted from his shoulders. (informant no. 36)

In this kind of gift-giving, the terms of exchange are less clearly defined. This serves to build up reservoirs of gratitude and obligation (bao ) on the part of the receivers, which entrepreneurs can tap to deal with future uncertainties. For example, one entrepreneur gives to the local residents' committee so that its officers will be favorably disposed to him. This can be useful during bureaucratic campaigns. As he says:

The old ladies on the street committee are really fierce. You should not take them lightly. They are all tongues and lips when it comes to gossip. They are also very important for how people think of me…. If there is a campaign, the cadres from the bureau always come to the residents' committee to understand the local situation…. So I need them to say good things about me. So I told the old wives to just let me know when they have some need. I give them some money on my own every month, and when they have special meetings, I give them forty, fifty or sometimes one hundred yuan. If you give them a little money, they will practically die of joy. (informant no. 19)

This kind of gift-giving involves numerous bureaus and their substations. One entrepreneur sold construction materials at cost to a public security substation when it was renovating its facilities. Another entrepreneur, who runs a garage, does free repairs on the motorcycles owned by substations that have jurisdiction over him.

Gifts can also be given to officials as individuals rather than as representatives of bureaus. When officials visit firms, entrepreneurs are quick to note which items they express an interest in and let them "borrow" the goods indefinitely. One entrepreneur described this as follows: "They will never say, 'Give me this' or 'Give me that.' lnstead, they will say, 'This is very pretty,' and so you then say, 'Take it home and show your family.' Or they will say, 'This is quite interesting,' and so you say, 'Go ahead and borrow it'" (informant no. 23). Officials who drop by private restaurants are treated to free meals. Gifts can also be given to officials on opportune occasions. They are treated at banquets during the feasting that occurs during the summer Ghost-feeding Festival. During the winter Spring Festival, officials are treated to nightclub entertainment and banquets at the year-end business parties held by firms. The Spring Festival is also a convenient time to give gifts of cash. Large amounts are placed in the red envelopes traditionally

given to children with small sums of money in them and presented to officials under the guise of gifts for their children's education.

Employment

Another strategy is to hire officials to work in private firms. These officials occupy the more middle echelons of public-unit hierarchies and have less regular contact with citizens during the course of duty. They have a greater range of discretionary authority and useful contacts with other officials in the bureaucracy. This strategy is indicated by terms such as "advisors" (guwen ) and "managers" (jingli ). There is a basic distinction in this strategy between kin and nonkin officials.

There are several ways to employ nonkin officials. In some cases, officials who have ties in bureaus critical to the firm's business are hired as advisors. Such officials do not work regular hours, but only when needed. One entrepreneur explained the work of an advisor as follows: "If there is a problem, he invites the relevant officials out for dinner. This is all he does" (informant no. 25). In some cases, these advisors are paid fees and given company shares, generating incomes several times their public salaries. For especially useful information or actions, they can be given bonuses or commodities (e.g., television sets, refrigerators, etc.). Because of policy prohibitions against moonlighting by officials in private firms, entrepreneurs prefer to hire recently retired officials. These officials have strong personal ties with the bureaucracy accumulated during their long careers, which are still fresh, because their retirement is recent.

In another pattern, nonkin officials are hired for their business skill and acumen as well as for their personal ties. I encountered several former manager-officials of collective trading firms in their late thirties who had been hired as full-time managers in private firms. These former manager-officials possess substantial business experience and personal ties in district governments. Entrepreneurs became acquainted with them during business and lured them from public employment with offers of monthly salaries five to six times their public ones, commissions on sales, health insurance, and other social benefits that entrepreneurs provide for key employees. In good business times, they can realize monthly incomes of two to four thousand yuan, roughly eight to sixteen times their former public salaries. Entrepreneurs also hire other public employees who have accumulated extensive commercial connections in the public sectors. This usually involves public-unit purchasing agents who work as salesmen for entrepreneurs. Their personal ties with the heads of public-unit purchasing departments can dramatically expand the market connections of the private firm. In some cases, they still hold public-unitjobs and do private business for the entrepreneurs on the side, in effect giving entrepreneurs well-connected sales personnel who

travel at public expense. Other purchasing agents resign their public jobs to work in private firms. They are paid base salaries of four to five times their public salaries, receive sales commissions, and are reimbursed for traveling expenses on successful deals. In good times, this can generate an income dozens of times their public salaries. One former purchasing agent I talked with boasted that his monthly income regularly exceeds ten thousand yuan (more than 50 times the average urban wage).

A less direct strategy is to hire nonofficials who have personal ties with officials. The largest private firms have "brain trusts" of economics and international finance professors from the locally based national university. They are paid retaining fees for advice on business strategy. Many of them are the former classmates and teachers of officials in strategic bureaus such as the Foreign Trade Bureau, the Tax Bureau, and the Policy Research Institute. These professors therefore have valuable ties with these bureaus which they use to influence officials on behalf of the entrepreneurs who hire them. Another example concerns retired auditors from the Tax Bureau who work in private firms. They have former colleagues in the Tax Bureau whom they can influence to accept the account books of the firms, and from whom they receive warnings of upcoming campaigns against tax evasion. One accountant can manage the books for up to half a dozen firms at the rate (in 1989) Of 200 yuan per month per firm, thereby earning four to five times his or her former public salary.

Officials who are immediate kin can also be "hired" to work in the firm. I encountered numerous instances of entrepreneurs who were recently retired officials working in their offsprings' firms. In one pattern, the parent is an ad hoc advisor who dispenses advice and introductions when needed. Some instances I came across involved fathers who had worked in city government bureaus and who were well versed in bureaucratic procedure, but had few ties with public enterprises and bureaus. In another pattern, the parents who "work" in the firm are the de facto entrepreneurs. This involves parents who previously worked in public agencies that distribute commodities, such as state commercial bureaus, and who now use the personal ties accumulated during their public careers for private business. By designating their children the legal owners of the firms, they seek to deflect criticism that they are cashing in on bureaucratic connections. For example, in one firm ostensibly run by a woman in her mid twenties, the top managers are her parents, who have retired from bureaus that allocate textiles and chemicals in the command economy. Not surprisingly, the firm trades heavily in textiles and chemicals. Other examples I encountered included parents working in their offsprings' construction firms who had previously been employed by city or district construction companies; former officials in bureaus allocating foodstuffs working in their children's seafood and food-stuffs

firm; and former State Foreign-Trade Bureau officials working in firms belonging to their children that exported raw materials and minerals.

Partnerships

This strategy involves officials who occupy high leadership positions. Those in public manufacturing enterprises and state commercial bureaus have wide discretion over the resources of their units, while those in administrative bureaus have the discretionary power to interpret and adapt centralstate policies to fit local contexts. Terms such as patrons and backers refer to this bureaucratic support. There is also a basic distinction in this strategy between kin and nonkin.

Partnerships can be secured through material incentives. Officials are given shares in the company—referred to as "power shares" (quanli fen ) because the officials invest their bureaucratic power rather than financial capital in the firm—and positions on the board of directors. These practices integrate powerful officials into the firm's structure and give them a vested interest in the well-being of the firm, improving the likelihood that they will actively intervene on behalf of the entrepreneur. The case of an entrepreneur in the highly competitive construction trade is a case in point. In order to guarantee a source of cement, the entrepreneur gave a 15 percent share in his firm to a cement factory run by a suburban township government in exchange for an agreement to make the firm the sole Xiamen distributor of the factory's cement output. At the onset of the 1988 Economic Rectification Campaign, when new restrictions on the private sale of cement appeared imminent, the official managing the factory leased its trucking fleet to the entrepreneur. This enabled the entrepreneur to continue the private trade under the guise of public trade, protecting it from policy shifts. The entrepreneur was also permitted to use the factory's bank account to receive payments for the cement, a practice that further obscured the private nature of the business.

Partnerships can also be forged through family ties. For example, one entrepreneur returned to his ancestral village along the coast to set up a fish farm. The fish farm is registered as a village enterprise and managed by a cousin of his, who is the village Communist party secretary, while the entrepreneur devotes his time to drumming up sales from luxury hotels. In another case, an entrepreneur's brother, sent to a suburban village in the 1960s during the Cultural Revolution campaign to rusticate urban high school graduates, had become the manager of a township factory in the village. Through this brother, the entrepreneur was able to contract with a workshop in the factory to manufacture goods for export. More highly placed officials tend to support private firms only at crucial stages. For

example, in a cooperative garage, one of the founding partners has a father who heads a city government bureau. The firm received its big break in 1985, when the father leaned on a friend heading another bureau to send its vehicles to the garage for repairs. This was the beginning of a business relationship with the bureau that has enabled the firm to become one of the largest of its kind in Xiamen. In the mid i98os, when this happened, the status of private business was low and the father's intervention was crucial in overcoming the resistance of the bureau to doing business with the private garage, although subsequent business has depended on the quality of goods and service.

Shifting Influence Strategies and Business Growth

The three strategies I have just described are not mutually exclusive: an entrepreneur may deploy them simultaneously. However, the mix of strategies shifts in the course of private business growth. This section will examine several principles that underlie this shift. One concerns the levels of bureaucratic support: entrepreneurs seek ties with more highly placed officials. The other concerns the nature of the personal tie: entrepreneurs shift away from blatantly instrumental ties to more enduring ones.

Shifting to Higher Levels of Bureaucratic Support

An entrepreneur forges alliances with higher-level officials in order to reduce the cost of obtaining bureaucratic support. First, low-level officials control few, if any, profit-enhancing assets, while their protection extends no further than their own actions. The relationship is often little more than extortion: an entrepreneur makes payments to such officials in order to avoid further costs directly threatened by them. In contrast, higher-level officials provide more bureaucratic support. Such official patrons control significant profit-enhancing assets and provide protection, not only from their own actions, but from those of other officials as well. This can be seen in the case of an entrepreneur who is the son of a high city-government official. After moving to a new business site, he was repeatedly visited by officials from a local bureau substation demanding payment of ad hoc taxes. The entrepreneur complained to his father, who in turn complained to a friend who was a vice-head of the bureau in question. The harassment stopped immediately.

Second, having higher levels of support reduces the time an entrepreneur must spend cultivating ties with officials. The gift-giving that characterizes ties with lower-ranking officials is especially time-consuming. The demands of these officials can be indirect, and entrepreneurs have to spend time figuring out just what they want. As the presentation of a gift is as

important as the content, entrepreneurs have to select an opportune occasion to present it, and go through the giving ritual. In this regard, I was struck by how much time entrepreneurs running smaller capitalist firms spend interacting with lower-level officials by visits to their offices and to their houses at festivals. In contrast, payments to higher officials are routinized in the firm structure as salaries and dividend payments disbursed by the cashier, obviating entrepreneurial concern with the content, timing, and form of the exchange.

Third, higher levels of support are more "efficient." Higher-level officials have greater discretionary power than lower-ranking officials. Also, a higher-level official can usually offer both profit and protection, in contrast to a lower official, who can usually offer one but not the other. To achieve the same outcome, an entrepreneur with higher support therefore needs to rely on fewer officials than an entrepreneur with lower support. The former expends less time and money cultivating strategic officials than the latter.^[12] This logic is illustrated by the example cited above of the entrepreneur engaged in the cement business with a township government, a reasonably high level of bureaucratic support. The partnership enhanced his profits by providing access to public status and scarce commodities, making it possible to evade regulations, and enhancing his protection from central-state policies. This wide range of support was achieved by entrepreneurial cultivation of only one individual in the bureaucracy, the township official managing the cement factory.

Shifting to More Enduring Ties

There are more and less instrumental strategies for exerting influence. Payoffs can be through either highly instrumental cash payments or less brazen gifts. Employment and partnerships can be through either businesslike relationships involving salaries and stock dividends or less instrumental relationships involving kinship ties. Entrepreneurs prefer less instrumental strategies, because they are more enduring.

One reason is that less instrumental strategies enhance the depth of support. For example, a highly instrumental strategy such as cash payment is based on a clear quid pro quo. The terms of exchange are known ahead of time, and the cash payment is for a specific discretionary act on the part of the official or public employee. Subsequent support is unlikely to be forth

[12] This is not to say that entrepreneurs with higher support cultivate fewer officials in absolute terms. These entrepreneurs engage in business activities that are more far-flung and diverse than those of entrepreneurs with lower levels of support, and their overall ties with officials are probably greater in number. Rather, I am arguing that entrepreneurs with higher support pay less for each individual tie with an official, relative to business profits, than entrepreneurs with lower support: in this sense, higher support "costs" less.

coming until new terms of exchange have been negotiated. However, many problems faced by entrepreneurs are uncertainties stemming from future shifts in central-state policies or harassment from other bureaus. Since the occurrence of these problems is unpredictable, it is impossible to negotiate bureaucratic support ahead of time. To refer to a previous example, when officials from a bureau come to the residents' committee during a campaign for information on an entrepreneur, the officers staffing the committee do not have time to bargain with the entrepreneur about the committee's response to the officials. The solution is for entrepreneurs to ensure that individuals in the bureaucracy support them of their own volition. Gift-giving is more useful than cash in achieving this, since it cloaks the payoff as kindness (renqing ) rooted in concern for the officials in question as human beings, engendering feelings of gratitude and obligation on their part, which are more likely to result in decisions on behalf of the entrepreneur.

A second reason why entrepreneurs favor less instrumental exchanges is that they avoid the blatant appearance of corruption and economic crimes associated with instrumental strategies such as cash payments. An entrepreneur who relies heavily on payments is more likely to be identified as a transgressor during bureaucratic campaigns and be charged with corruption and economic crimes. In contrast, when an entrepreneur donates commodities to a local bureau without specifying anything in return, this is less likely to be labeled corruption. The same is true with employment and partnerships. An official on the payroll or board of directors can more easily be accused of abusing bureaucratic authority when supporting a firm than a family member, who might only receive a nominal salary.

Finally, a third reason for the shift away from cultivating support through instrumental personal ties is that they create tensions in the bureaucracy between officials who benefit from the firm and those who do not. This exacerbates competition between the officials that can engulf the entrepreneur in intrabureaucratic conflict. The career of an entrepreneur running Xiamen's largest private firm in the late 1980s is a case in point.^[13] Originally a stevedore, he set up a grocery shop in 1979, when he was in his mid twenties. In 1982, he set up a cooperative firm sponsored by a district government. In 1985, his patrons arranged large loans from state banks for him to purchase the controlling share in a newly established savings and loan cooperative. He then took out large loans from the cooperative and organized a national car-parts exhibition, using kickbacks to land orders with public units all over China. He caught the eye of city-government officials, who arranged for his election in 1988 as a model national youth

[13] He was jailed soon after my fieldwork began, and I could not interview him. However, I talked to family members, his employees, and entrepreneurs and officials who knew him.

entrepreneur. During the awards ceremony in Beijing, he met the leader of a state factory in Manchuria, who sold him cable and other scarce products. In fall 1988, at the onset of the Economic Rectification Campaign, he was arrested on charges of bribery and smuggling, his downfall being rumored to have been engineered by jealous officials not on his payroll. He was jailed for two years while his patrons tried to prevent a trial to save their skins. Because of the number of high officials involved, his trial was held in secret and he was sentenced to six years in prison.

The Logical Extreme of Bureaucratic Support

The most powerful and least instrumental type of bureaucratic support is to have a parent in the highest levels of the state structure. It is by far the most effective and efficient, inasmuch as it ensures the support of extremely powerful officials without the expenditure of any time or resources to cultivate it. It is also noninstrumental, and the support is therefore deeper, less risky, and unlikely to cause intrabureaucratic competition. Ironically, this kind of support may not involve any patron-client tie. Entrepreneurs may never communicate with the parent about business matters, and the parent may never make a single decision in support of the entrepreneur However, everyone knows that the entrepreneur is related to the official, inducing them to open doors for the entrepreneur "voluntarily" out of awe of his family background and fear of possible reprisals for "noncompliance."

Among the entrepreneurs I interviewed, such support is illustrated by an entrepreneur related through marriage to a family of leading officials in Guangdong province. She acknowledged the importance of the tie as follows: "I use their name in doing business, and so people know that I belong to this lineage. I don't actually have to use their power in business, as people trust me because of the family connection" (informant no. 12). This family tie enables her, among other things, to purchase commodities confiscated from smugglers by the Guangdong province customs authority at bargain prices. The so-called "princes' party" (taizi dang ), consisting of children of the central-state elite, epitomizes this kind of support. Its most illustrious members include the offspring of Deng Xiaoping, Premier Li Peng, and the deposed party leader Zhao Ziyang, as well as the families of other prominent or recently retired members of the old guard, such as Chen Yun, Hu Yaobang, and Liu Shaoqi. They were held up by the students during the 1989 student movement as exemplars of the bureaucratic corruption and profiteering flourishing during market reform. In the aftermath of the student movement, the central state launched a bureaucratic campaign against both corruption in the bureaucracy and economic crimes in private business, motivated in part by the popular outrage over these matters that

surfaced during the movement. Not surprisingly, this bypassed the "princes' party" and fell on entrepreneurs with lower levels of bureaucratic support, such as those I met in Xiamen.^[14]

From Dependent to Symbiotic Clientelism

Although dependent clientelism cannot be found in private capitalist business, this does not mean that patron-client ties are irrelevant to the new commercial environment. On the contrary, such ties are essential to the operation of a successful private business, but they take a new form of symbiotic clientelism. This symbiotic clientelism is a far-reaching departure from previous forms of dependent clientelism: it constitutes a major transformation within a clientelist political order.

Transformations in Clientelist Exchange

In dependent clientelism, officials extend material and career advantages to individuals who work within public units. In symbiotic clientelism, this exchange has in some key respects been stood on its head. First, the material basis of exchange has altered radically. Entrepreneurs no longer rely on officials for access to the necessities of daily life, but rather acquire them through their incomes. Most entrepreneurs own their own homes or apartments and have a full set of consumer appliances, as well as cars or motorcycles, while food, medical care, and educational opportunities can all be purchased.^[15] Instead, it is now the entrepreneur-citizen who gives officials access to material necessities through bribes, salaries, and dividends. This income exceeds public salaries many times over. Moreover, it is an increasingly crucial form of income for officials given double-digit inflation and the increasing commodification of resources, such as education and foodstuffs, formerly provided by bureaucratic redistribution. In the late 1980s, the salaries of officials in Xiamen were between two hundred and four hundred yuan, even including the special subsidies for individuals on the public payroll in the special economic zone. In contrast, officials who work in private firms enjoy base salaries of at least several times this amount. With

[14] Entrepreneurs in Xiamen generally did not support the student movement, because they were concerned that student demands for the state to suppress bureaucratic corruption would target their beneficial alliances with officials. They also feared, correctly as it turned out, that state actions to defuse popular outrage over the princes' party would lead to a crackdown on entrepreneurs at lower levels who were not connected to the central elite (see Wank 995).

[15] In my sample of one hundred entrepreneurs, thirty-nine had bought houses or apartments or had them under construction, and thirty owned houses that had been confiscated from their families in the 1950s and 1960s and returned to them in the 1980s. Thirty-one still lived in public housing, but most intended to purchase private housing. Forty-six entrepreneurs had motorcycles, while thirty-two had cars, trucks, and/ or vans.

bonuses and commissions, those with business acumen and good personal ties can realize monthly incomes up to twenty or more times their former public salaries. Entrepreneurs also entice officials and other talented public employees by giving them one-time lump-sum payments when they come to work in the private firm that are equal to the sum of the public wages they would have earned had they remained in their public jobs until retirement. Entrepreneurs also provide medical insurance and pension plans to core employees comparable to such benefits in the public sectors.

A second aspect of this transformation concerns access to career opportunities. In dependent clientelism, officials gave subordinates in their organizations opportunities for career advancements through promotions and Communist party membership. Promotion is no longer an issue for entrepreneurs who run private firms. Furthermore, while officials still control access to the party, membership has little appeal to entrepreneurs, who regard it as burdening them with time-consuming meetings and the need to uphold selfless standards of behavior incompatible with private business.^[16] In this new form of symbiotic clientelism, entrepreneurs can now give officials significant career opportunities through employment as managers and sales personnel.

Finally, in dependent clientelism, clients held up their end of the exchange by providing officials with intangible resources. Clients served as the eyes and ears of party officials, providing valuable information on possible sources of local opposition and discontent that helped officials in governing. Now patrons in the bureaucracy often serve as the eyes and ears of their clients, providing valuable information on policy shifts, local administrative matters, insider information on prices and auctions of public enterprises and confiscated goods, and regulatory loopholes, all of which help entrepreneurs to conduct business. Also in dependent clientelism, clients helped officials implement policies that came down from above, by taking the lead in the efforts to mobilize societal compliance. In symbiotic clientelism, officials draw on their personal ties with other officials to mobilize support for an entrepreneur within the bureaucracy.

Transformations in Clientelist Networks

The patron-client relations of dependent clientelism had a certain stability. One reason for this was organizational; they were enclosed within work units. As the work unit was the basis of bureaucratic redistribution, and transfer out was extremely difficult, clientelist relations were necessarily

[16] Several prominent entrepreneurs I interviewed had in fact been asked to join the Communist party but refused. Only two entrepreneurs (2 percent) in my sample were party members, a figure consistent with national statistics showing only 1 percent of private business owners were party members in the late 1980s (China Daily 1989).

long-term. In symbiotic clientelism, patron-client relations no longer occur within work units, but between private firms and public organizations. This organizational openness has reduced the stability of patron-client ties. While the bureaucracy provides the best opportunities for enhancing profit and protection in private business, the new organizational openness means that entrepreneurs are no longer limited to one set of officials, but can pick and choose their patrons. However, two caveats must be made here. First, although the stability of patron-client ties has been reduced, their necessity has not: a patron is essential to business success. Entrepreneurs who do not cultivate a patron or some other kind of bureaucratic support are unlikely be successful. Second, despite the greater freedom to change patrons, entrepreneurs still prefer to forge long-term ties with patrons, because cultivating a new patron is costly and long-term relations, by increasing the degree of trust and concern for mutual benefit, reduce the likelihood of opportunistic behavior by official-patrons vis-à-vis entrepreneur-clients.

A second reason for the stability of the patron-client relation in dependent clientelism was its embeddedness in "human feeling" (ganqing ). Instrumental ties were overlaid with bonds of loyalty, gratitude, and obligation. In contrast, relations in symbiotic clientelism can be more blatantly instrumental and involve much larger sums of money and valuable commodities. This transformation can be seen in entrepreneurs' frequent reference to "personal ties of money" (jinqiandi guanxi ), a term that did not exist in the Mao era. The emergence of these money ties reflects the shifting relationship of material wealth to political power. In the planned economic order, wealth was a reflection of an individual's connections to power, but now money can be used to build these connections to power (Meaney 1991, 138). New patron-client relations based on a cash nexus have thus proliferated. Yet narrowly instrumental ties are widely viewed by entrepreneurs as problematic, as explained above. They still prefer noninstrumental ties rooted in kinship relations (real or fictive) and strive to impart a "human feeling" dimension to "money" ties so as to make the patron-client relationship more enduring.

Another transformation involves the emergence of new forms of competition. In dependent clientelism, individuals competed for official favor, successful ones being drawn into patron-client ties, leading to admission into the local elite. In symbiotic clientelism, officials now compete to become linked to the larger private firms.^[17] Entrepreneurs running the larger and wealthier firms are the most desired clients, inasmuch as they can pay more for the discretion of highly placed officials. However, such competition may backfire, as illustrated by the case described in the previous section of the entrepreneur arrested in 1988. His problem stemmed precisely from

[17] I thank Dorothy J. Solinger for bringing this point to my attention.

the fact that competition and jealousies among officials over the rewards and opportunities stemming from his firm grew out of control. His arrest was initiated by officials outside his firm's patronage networks. The emergence of competition among patrons for clients thus adds a new form of instability to clientelist networks.

Transformations in Clientelism and State Infrastructural Power

Dependent clientelism reinforced state infrastructural power, whereas symbiotic clientelism undermines it in several ways. First, dependent clientelism reinforced the hierarchical lines of authority within the bureaucracy. Holding out the promise of reward and opportunity was an important way for the central state to ensure the loyalty of officials and for superiors to ensure the compliance of subordinates. Officials were loyal and compliant in order to attain the rewards and opportunities over which superiors had discretion. In contrast, in symbiotic clientelism, the rewards and opportunities for officials available outside the bureaucracy now far exceed those within it. As the value of the bureaucracy's reward structure declines, lower-level officials increasingly seek incomes in the market economy through the exercise of their bureaucratic discretion. Having lost control over the most lucrative rewards and opportunities, the central state is less able to maintain the loyalty of officials and responsiveness of its bureaucracy.^[18]

Second, dependent clientelism gave officials a societal constituency that facilitated the implementation of state policies. Clients (activists) took the lead in setting compliance standards for society, a role that assisted officials in orchestrating acceptance of state policies. In contrast, patrons and clients in symbiotic clientelism no longer interact in ways oriented to fulfilling state goals. Instead, interaction usually involves willful deviations from central-state policies. Entrepreneurs and officials seek commercial gain through dubious and illegal practices, which they conceal from central-state supervision. Officials sell administratively priced goods obtained in the planned economy at market prices and then declare them as lost or spoiled; they lease real estate and public firms at below market value in exchange for bribes and shares in firms, and they give entrepreneurs low-interest loans in exchange for kickbacks. These activities undeniably enrich officials and stimulate private capitalist business, but they also squander public assets and deprive the state of revenue.

Finally, dependent clientelism supported state infrastructural power by creating a deep political cleavage in society between clients and nonclients, which inhibited the expression of popular dissatisfaction against the state.

[18] The shifting orientation of officials is suggested by the statistic that 70 percent of economic crimes in 1987-88 were committed by officials (Chang 1989, 25).

Indeed, popular dissatisfaction with the state and local officials was often vented against clients (activists). In contrast, symbiotic clientelism creates a new cleavage between the central state on the one hand and communities composed of local state and society actors on the other. The actors in this community increasingly cooperate to generate prosperity through locally based resources rather than looking to the state hierarchy to provide these resources through bureaucratic redistribution. This new orientation leads local actors to cooperate in releasing the market value contained in local public resources even when this deviates from central-state policies and intentions.

Conclusion

Scholarly analysts widely expect the erosion of patron-client relations to be furthest advanced in locales that are highly commercialized and have many overseas contacts. Yet the symbiotic clientelism described in this chapter is pronounced in Xiamen, which is just such a locale. How can this be explained? By examining this question in a speculative fashion, I shall offer some reflections on capitalism and clientelism in China's departure from central planning thus far .

China's departure has emphasized a gradual path of state-initiated economic reform without corresponding political reforms (Shirk 1993). Several features of this path have been so pervasive since the late 1970s as to be stable features of the departure itself, rather than a corruption of an as-yet-unrealized "complete" or "true" market economy. These features include the two-track pricing system, unstable state policies, ambiguous property rights, and minimal legal restraints on lower officials. In such an institutional environment, the logic that drives entrepreneurs to seek bureaucratic support is reinforced through greater commercialization. This is because as commercialization drives up prices, it also raises the gap between the market prices and administrative prices. This in turn raises the value of these resources to entrepreneurs and leads to a corresponding rise in the price of officials' control over these profit opportunities. Furthermore, as the scale of private business is greater in more commercialized areas, the need of entrepreneurs for guarantees that officials will not give them trouble is correspondingly greater, driving up the value of officials' discretionary protection. In short, the link between business success and bureaucratic support intensifies in more commercialized areas.

In such an institutional environment, the salient feature of the social structure in more commercialized areas is not, as some have argued (e.g., Nee 1989a, 206; Nee 1991 , 279), the reduction of dependent patron-client ties, but rather the rise of symbiotic ones. In areas characterized by petty private business, the smaller scale of commercial activity may erode dependent

patron-client ties without engendering new symbiotic forms. This is because for petty private business, resource requirements are fewer and more easily available without bureaucratic discretion, thereby obviating the need for patron-client ties. In contrast, in areas of greater commercial activity, the resource requirements linked to bureaucratic discretion are also greater, obliging entrepreneurs to cultivate official patrons. In other words, it seems that greater commercialization is more likely to transform the dependent-clientelist order into a symbiotic one.

The dense overseas connections found in the southern coastal regions are another potential reason for the erosion of dependent-clientelist relations between officials and entrepreneurs. In one line of reasoning, entrepreneurs who receive capital from abroad are more autonomous of state power, inasmuch as they are less dependent on officials for access to capital (see, e.g., Solinger 1992, 137). However, a somewhat different logic seems to operate in Xiamen. Thirty-five of the entrepreneurs I interviewed had relied on start-up capital from overseas relatives. While this reduced their dependence on officials for capital, the infusion of overseas capital led them to expand into business activities that did require bureaucratic support. Foreign capital enabled them to set up capitalist firms, which then needed bureaucratic support for access to business sites, direct foreign-trade opportunities, raw materials, and so on. In other words, access to foreign capital reduces dependence on the bureaucracy for one resource, but appears to generate a need for bureaucratic support in acquiring other resources. Thus it can be said that connections with overseas Chinese, rather than reducing the overall dependence of entrepreneurs on officials, stimulates symbiotic relations between them.

In conclusion, China's gradual departure from central planning has created a commercial economy with distinctive institutional features. Private business has emerged as a form of symbiotic clientelism. Private entrepreneurship in such an economy has an ironic political consequence: as it undermines the infrastructural power of the central state, it perpetuates a pervasive bureaucratic presence in the market economy.

References

Chang, Maria Hsia. 1989. "The Meaning of the Tiananmen Incident." Global Affairs 4, 4: 12–35. Cited in Chalmers Johnson, "Forward," in The Broken Mirror: China after Tiananmen, ed. George Hicks, x. Essex, U.K.: Longman, 1990.

China Daily . 1989. "Business Lures Party Members." March 11, 3.

China News Analysis . 1988. Hong Kong. No. 1399a (August 15).

Gold, Thomas B. 1989. "Urban Private Business in China." Studies in Comparative Communism 22, 2–3:187–201.

Han, Minzhu. 1990. Cries for Democracy: Writings and Speeches from the 1989 Chinese Democracy Movement . Princeton, N.J.: Princeton University Press.

Hershkovitz, Linda. 1985. "The Fruits of Ambivalence: China's Individual Urban Economy." Pacific Affairs 58, 3: 427–50.

Jia Ting and Wang Kaicheng. 1989. "Siying qiyezhujieceng zai Zhongguo de jueqi he fazhan" (The Rise and Development of the Private Enterprise Owner Stratum in China). In Zhongguo shehui kexue 2 (February): 89–100.

Lin Jincheng. 1989. "Jiantan 'jia jiti' de ruogan wenti" (A Discussion of Some Problems of the "False Collectives"). Jingji fazhi 8: 34–36.

Liu, Yia-ling. 1992. "Reform from Below: The Private Economy and Local Politics in the Rural Industrialization of Wenzhou." China Quarterly, no. 130 (June): 293–316.

Mann, Michael. 1986. The Sources of Social Power: A History of Power from the Beginning to 1760, vol. 1. Cambridge: Cambridge University Press.

Meaney, Connie Squires. 1989. "Market Reform in a Leninist System: Some Trends in the Distribution of Power, Status and Money in Urban China." Studies in Comparative Communism 22, 2–3: 203–20.

Nee, Victor. 1989a. "Peasant Entrepreneurship and the Politics of Regulation in China." In Remaking the Economic Institutions of Socialism: China and Eastern Europe, eds. Victor Nee and David Stark, 169–207. Stanford, Calif.: Stanford University Press.

——. 1989b. "A Theory of Market Transition: From Redistribution to Markets in State Socialism." American Sociological Review 54, 5: 663–81.

household.^[8] . 1991. "Social Inequalities in Reforming State Socialism: Between Redistribution and Markets in China." American Sociological Review 56, 3: 267–82.

Oi, Jean C. 1985. "Communism and Clientelism: Rural Politics in China." World Politics 38, 2: 238–66.

——. 1986. "Commercializing China's Rural Cadres." Problems of Communism 35, 5: 1–15.

——. 1989. State and Peasant in Contemporary China: The Political Economy of Village Government . Berkeley and Los Angeles: University of California Press.

Paltiel, Jeremy T. 1989. "China: Mexicanization or Market Reform?" In The Elusive State: International and Comparative Perspectives, ed. James A. Caporaso, 255–78. Newbury Park, Calif.: Sage Publications.

Shirk, Susan L. 1993. The Political Logic of Economic Reform in China . Berkeley and Los Angeles: University of California Press.

Solinger, Dorothy. 1992. "Urban Entrepreneurs and the State: The Merger of State and Society." In State and Society in China: The Consequences of Reform, ed. Arthur Rosenbaum, 121–42. Boulder, Colo.: Westview Press.

State Statistical Bureau. 1993. China Statistical Yearbook 1993. Beijing: China Statistical Information and Consultancy Service Center.

Walder, Andrew G. 1986. Communist Neo-Traditionalism: Work and Authority in Chinese Industry . Berkeley and Los Angeles: University of California Press.

Wank, David L. 1993. "From State Socialism to Community Capitalism: State Power, Social Structure, and Private Enterprise in a Chinese City." Ph.D. diss., Department of Sociology, Harvard University.

——. 1995. "Civil Society in Communist China? Private Business and Political Alliance, 1989." In Civil Society: Theory, History, Comparison, ed. John A. Hall, 56–79. Cambridge, Eng.: Polity Press.

Xiamen City Real Estate Company. 1989. Xiamen shi fangdichan zhi (Annals of Real Estate in Xiamen City). Xiamen: Xiamen University Press.

Young, Susan. 1989. "Policy, Practice, and the Private Sector in China." Australian Journal of Chinese Affairs, no. 21 (January): 57–80.

Zhang Houyi and Qin Shaoxiang. 1988. "Siying jingji zai Zhongguo de shijian" (The Practice of Private Enterprise in China). Jingji cankao, November 14.

Seven
Political Hierarchy and Private Entrepreneurship in a Chinese Neighborhood

Ole Bruun

This chapter addresses changes that economic reform has brought about in a Sichuan urban neighborhood, with particular focus on the reemergence of a private sector in the 1980s.^[1] By including street-level bureaucracy in a framework for appraising the overall significance of these changes, the chapter seeks to demonstrate some innate contradictions at the basic level of an urban Chinese community, and their impact on political processes and institutions in the broadest sense.

The legalization and subsequent growth of private enterprise is the most striking departure from central planning at the local level in China. With the rapid development of private enterprise in practically every urban neighborhood, and the rising numbers of nouveaux riches that have followed, powerful new actors have emerged in local politics. The new entrepreneurs are a potentially powerful group in any local community, but the Chinese state has throughout attempted to maintain its political control and secure continuity in political institutions while invigorating the economy and bringing about higher living standards.

As opposed to a large body of literature contributing to the "civil society" discourse, in which an emerging autonomous society is attributed the potential for the ultimate overthrow of the (communist) state,^[2] this chapter questions the applicability of that notion on the basis of observations in an

[1] I conducted anthropological fieldwork in Chengdu, Sichuan, during parts of 1987, 1988, 1989, and 1991, including intensive interviewing with private business managers, their family members, their employees, customers, market vendors, and local authorities. The neighborhood contains over three hundred private businesses, a few thousand ordinary citizens, and various public bureaucracies. For a full account of the fieldwork, see Bruun 1993.

[2] Although the civil society discourse originates in Eastern European studies (e.g., Szelenyi 1988; Hankiss 1988), a large number of writers view the reemergence of the private economy in China in a similar light, emphasizing its capacity for social change (e.g., Young 1989; Gold 1990; Odgaard 1992).

urban Chinese community. Widespread interaction between the new entrepreneurs and the lower echelons of the bureaucracy, in the form of both enduring relationships and more casual individual agreements, leads me to question the crucial antagonism so often asserted between "state" and "society. " I argue that even though competition over basic resources has sharpened, there is strong continuity in fundamental ideologies, values, and orientations among the social groups within the locality, all of whom seek to establish and utilize connections to the bureaucracy. In fact, a large number of ordinary households may temporarily use segments of the local state apparatus to their own ends. For this and other reasons, much of the political struggle in the local community is absorbed by the bureaucracy and its web of informal ties.

Avoiding the abstractions "state" and "society," I suggest a more fundamental distinction between two segments of the local community: formal and informal hierarchies , which refer to the vertical ties of local participants. The use of this conception will allow us to see structural continuity in the context of rapidly changing economic institutions. Below, I first introduce the neighborhood setting and then separately analyze the micropolitical processes observed in this setting: taxation, exchange relations, and entrepreneurial-bureaucratic alliances. Subsequently, I make some suggestions about the overall importance of these findings.

Private Enterprise in the Local Community

Our setting is the neighborhood of Bin Shen, which is administered by a street committee (jiedao weiyuanhui ), the lowest level of urban administration in China. It is located in the western district of Chengdu City between the huge Temple Street and halfway through the old Manchu quarters, of which it constitutes the southern half. Its streets are narrow and unimpressive, lined with old, mainly wooden houses mostly of pre-Liberation origin. Bin Shen is well known to shoppers, however, as it contains a free market, where several hundred peasants sell their produce during the day, and approximately three hundred private businesses are found side by side there in every possible house or stall that can provide even minimal facilities. The main street of the area bustles with activity throughout the day and is always crowded with shoppers, farmers, itinerant peddlers, and local people. When the reforms began, the one- or two-storeyed wooden houses flanking the street quickly regained their original function, combining private businesses with dwellings behind or above them. Shops facing onto the

street that had been boarded up and converted into living quarters some thirty years previously were reopened as restaurants, workshops, and businesses. In most cases, it was an easy operation, since the facades and wooden shutter boards had been left untouched since the collectivization drive of the 1950s.

The few thousand inhabitants of Bin Shen pursue a variety of professions, since the area was never integrated into a work unit (danwei ), and the houses, bought from defeated landlords after 1949, remained private. Thus the inhabitants attended to their assigned jobs in state and collective units elsewhere in the city, but resided here. Many of the households had been engaged in private business before the large-scale collectivization drives after 1953 and 1966. These households were incorporated into collectives, which turned out to be highly unstable units, regularly rejecting large numbers of workers. For this and other reasons, a substantial number of individuals always remained outside the planned economy. Today the people in Bin Shen are a cross-section of the city's population: there are workers, administrative staff, shop assistants, and teachers, and in addition to these employees of the planned economy, there are an increasing number of self-employed people, mainly in small-scale private business. Over the life span of the present inhabitants, a number of historical events, such as the Japanese bombing of the area in the early 1940s, the Liberation of 1949, and the long series of political campaigns since, have scattered the original population and brought in many new families. The present inhabitants do not form any villagelike community, and few kinship bonds between households exist, although many of those who are now elderly residents were born here or in neighboring areas.

Small-scale private business never needed government support to develop either in Bin Shen or elsewhere in Chengdu. There were 50–100 private businesses in Bin Shen in 1982, approximately 200 in 1985, 270 in 1987, 290 in 1989, and 330 in 1991. The total number of people registered as owners or employees in the private businesses in the area rose from approximately 100 persons in 1982 to an estimated 1,200 persons in 1991 (approximately 25 percent of the adult population). Although the average number of household members registered as business operators was only 1.3 per business in 1987, approximately one additional member per business was found to participate on a full-time basis. However, in most households, all members (on average four to five) are somehow involved in business.

Private businesses have tended to appear in waves, frequently with dozens of identical concerns. A number of the early ones were groceries, since this was an obvious niche where state shops were hopelessly ineffective, and small kiosks soon followed. Other shops became numerous, selling mainly kitchen utensils, plastic goods, and clothes. After a few years, businesses diversified when a large number of primarily elderly craftsmen, incorporated

into collective units mainly in 1953, returned to the private sector in order to run their own small workshops. They were tailors, smiths, a traditional doctor, and makers of signboards, kitchen cutting boards, and bags. Restaurants were among the earliest private businesses, since it was easy to compete with those in public ownership, and in the late 1980s, a new wave of restaurants propagated into Bin Shen. Recently, modern hairdressing salons have also appeared, and in a matter of six months, nine such places were opened, four of them occupying neighboring lots.^[3]

In terms of local social change since the reforms, private enterprise has played a crucial role. Small-scale private business has affected a rapidly growing proportion of city dwellers since its legalization in 1979.^[4] In the early 1980s, apart from urban youths returning from the countryside and setting up small stalls, people were hesitant to register as getihu (individual households), the new stamp put on both the people in private business and their families.^[5] In Bin Shen, the legalization of business implied the registration of a number of people who were already doing minor business on the fringes of the established community: primarily small vendors, repairmen, and barbers. Private business also attracted a number of other people who had never held official positions, but had survived on occasional jobs and temporary employment in collectives, interrupted by long periods of unemployment, mostly owing to chronic illnesses, physical handicaps, criminal records, or political stigmatization. When, soon after the reforms, a pre-Liberation market was officially reestablished in Bin Shen, this similarly legalized an activity already taking place. Even during the Cultural Revolution, vegetables were traded here, although on a much smaller scale. Apparently, small entrepreneurs were always one step ahead of regulations.

Considerable wealth has been generated in the new sector. At the lowest level, consisting of people trading in the street, private enterprise yields profits in the range of 100-500 yuan per month. For business people in rented premises or their own houses, profits grew during the 1980s to approximately

[3] A common expression for such model-following is gan chaoliu (catch the flood). This phenomenon is reported from all parts of the Chinese world: see, e.g., Ma 1988 on Chinese rural areas; Liu 1992 on a southeastern city; and Niehoff 1987, who cites the Taiwanese expression "a swarm of bees" (yi wo feng ). This phenomenon in itself contests the development of a "civil society": private enterprise usually builds on strictly local reference and guanxi agreements without any form of trans-area class consciousness.

[4] When private business was legalized, it was already a social fact. Particularly in the years 1976–78, large numbers of returned "educated youth" started small businesses as a means of survival in the cities. For the history of private business since, see, e.g., Hershkovitz 1985; Yudkin 1986; Rosen, 1987–88; Ma 1988; Taubman and Heberer 1988; Young 1989; Kraus 1991. Specifically on its social impact, see Cold 1989, 1990.

[5] The concept of getihu has a strong negative tone in ordinary language, since it is associated with the unwanted qualities of individualism: selfishness, a low level of culture, and social deviation. Being marginal implies low social status.

200–1,000 yuan for the smaller businesses, and reached several thousands for the larger businesses.^[6] The explosion of private enterprise even demanded a new frame of reference for ordinary people. The old expression for the newly rich, "10,000-yuan households" (wan yuan hu ) gave way to "1,000,000-yuan households" (yibaiwan yuan hu ), since the former level could almost be reached in a single month by certain restaurant keepers, long-distance traders, private brokers, and other successful entrepreneurs.

While private enterprise became increasingly lucrative and secure during the 1980s, state wages lost much of their attraction. In the period 1984–90, wages in the public sector barely kept pace with inflation. For instance, in 1987, when bonuses were generally low, a number of people in the neighborhood were left with standard wages as low as 35–40 yuan. In 1991, state wages ranged between 80 and 150 yuan. Even senior officials in local bureaus rarely earned more than 120–140 yuan per month. Even when the state employees' access to social services was taken into account, the majority of them were economically surpassed by people in the private sector. Serious grudges and social tension arose from the fact that social status and monetary wealth became increasingly discrepant in the local community. While the educated and upstanding members of state units frequently had to tighten their belts during the reforms, an increasing number of private entrepreneurs engaged in reckless and conspicuous consumption.

One significant social and political development is the fact that private sector employment expanded beyond the marginal social groups that embraced it in its initial phase. Increasingly, ordinary citizens began to move into the sector in the late 1980s. Some were hunting for quick wealth, but failing bonuses and the closing of collective, and in some cases even state, enterprises squeezed most out of the public sector.

Beyond this, the forces set free by the market did not give rise to an entirely "new" sector of free enterprise. There was a considerable continuity with pre-Liberation Chinese society (as Szelényi [1988] found in rural Hungary in the 1970s). As already noted, many of the people who joined in had previous experience, and a few even resumed family businesses that had occupied the same lots before Liberation: a restaurant, a bicycle repair shop, and a barbershop. Moreover, the inferior social position of these households continued, and in the city at large, the social disregard for the small private business households rapidly reproduced the pattern of the old society. Despite extensive state propaganda to heighten its status, private business became a disparaged sector of "wealth without social standing." Within the business households, the traditional hierarchy was typically

[6] See Bruun 1988. This report includes statistical material on the household businesses in Bin Shen interviewed in 1987–88 and discusses development issues related to private business.

strengthened (in contrast to families where all adults earned wages outside the home) under the leadership of the eldest male and with a distribution of authority in terms of conventional family roles. To assist in the shops and perform all manual labor, low-paid rural hands and apprentices were hired, constituting a new underprivileged group in urban China.^[7] In 1987, businesses in the area on average employed one person from outside the family. The relatively stable political environment and the abundance of cheap labor encouraged business owners to draw further on this resource, so that in 1991, the average number of employees had reached nearly two. The recruitment of labor in private businesses did not create a new open job market, but largely followed the extension of kinship relations and private networks (guanxi ). Private entrepreneurs relied exclusively on local references when launching businesses. The model of a thriving business was usually a concrete local one, which scores of new businesses would imitate until profits were reduced by a saturated market.

Private Business in the Local Political Process

When investigating the impact of private business on basic "political processes," we should put the term in a proper perspective. How can we comprehend and interpret political processes so as not automatically to transfer institutions from the Western heritage, and instead to investigate how they are implanted in Chinese thought and practice? Chinese political reality is not one of democratically elected forums, political representatives responsible to parties, ideological debate over abstract issues and social visions, or established pressure groups—none of this exists in Bin Shen. In the local community, not even a formal structure allocates elective power to ordinary citizens, who thus have no connection to "politics" if defined in conventional terms. This does not, however, mean that people are not actively contesting which groups are to benefit from the reforms and fighting to maintain or change the distribution of wealth within their local spheres of reference. The most important political processes take place within informal political institutions and consist of individual actions, which nevertheless always connect to those of others.

[7] Rural personnel are regarded as inferior to urban employees. The term birth ascribed stratification is used by Sulamith Potter 1983, 465, who argues that after 1949, the distinction between the urban and rural populations may even have increased. William Hinton 1966, 287 speaks of a "concept of hereditary social status." Caste society is the term used by Lucian Pye. "Moreover, by preventing people from moving freely to find better employment, he (Mao Zedong) could not help but increase inequalities by preventing the development of a true labor market," Pye observes (1988, 18). Whatever the term, such assumptions about hereditary social positions are ironic in a communist society and an aspect of the discrepancy between ideals and social practices.

The task is thus to identify concrete actions of political significance, examine the institutions in which they are embedded, and then suggest how the larger processes operate. For that purpose, we must break down the areas of obvious conflict into the concrete strategies adopted by different groups of people to solve problems and secure the largest share of a given resource. Urban bureaucrats' strategies tend to center on various ways to transform power into wealth. The new entrepreneurs' strategies are more complex, since they must to a larger extent take the current political climate, as well as customary codes or rules of action, into account. These strategies may be arranged according to the following areas of institutionalized political behavior: household strategies, bureaucratic commitment, collective passive resistance, systematized exchanges, and the building and manipulation of authority.

Household Strategies

When inquiring into the social significance of small-scale private business, the basic unit of analysis is evidently the Chinese household (hu ). Focus on the domestic group instead of on individuals will provide a different perspective on basic ideologies; there is profoundly less variation among households in their collective aspirations than among individuals in this respect.

Practically all businesses in Bin Shen involved several household members and largely duplicated the organization of the household itself. However, the new market opportunities allowed the household to aggregate its individual members' social and economic capital. The strategies adopted clearly sought to maximize the use of every member's position in the simultaneous pursuit of both new material wealth and maintenance of social status, and if possible social ascendence, thus bridging several sectors of employment.

The continuing value of state employment is emphasized in one widely adopted practice. Many households with both husband and wife in official employment had difficulties making ends meet, and thus considered opening a private business to supplement their income. To maintain the status and security of the household in the transitional period, they started business with only one household member registered, frequently the wife or an unemployed son. Letting the wife run a private business while the husband maintains his position in a state unit has been extremely common; in fact, half of the locally registered business managers in Bin Shen are women. Yet this has also proved problematic, since the wives' incomes rapidly come to exceed the husbands', threatening the status of the male household heads, and thus prompting them sooner or later to take the leap into private business in order to reestablish "harmonious relations" within the

household.^[8] In the late 1980s, when private business seemed secure, a number of such husbands in the local area chose to leave their state work units in order to become managers of household businesses (by 1991, the average number of registered household members participating in business had risen to approximately 1.6). They were, however, mainly people in ordinary state jobs, often in workplaces with dwindling bonuses. Through the 1980s, the leap into private business continued to bring a marked decline in social status, something evidently compensated for only by a severalfold increase in income.

Thus, although private business became increasingly lucrative and secure, it did not threaten the superior security and status of state employment, and there was still a strong incentive to have one household member placed in a secure state job, particularly the household head, which granted social esteem to the entire household. In the outlook of ordinary families, private business provided an opportunity for increasing material welfare, and also for some more freedom, but it never replaced official employment as a provider of basic services, security, and social respectability.

Another common way of bridging the benefits from official and private employment is making use of connections with state units in order to create advantages in business. Retired cadres^[9] are numerous in private businesses, usually being the true managers pulling the strings behind registered wives, sons, or daughters-in-law. Having lifelong pensions, they are legally barred from doing business, but street committees frequently grant them permission for a fee. Their guanxi with former colleagues enables them to establish profitable niches in production or specialized services, including signboard production for a large state unit, delivery of equipment, brokerage services, and translations. A few former craftsmen who had retired with cadre status had easy teaching jobs in state units while also running private businesses.

Connections can also be essential in obtaining restricted materials from the storerooms of public firms—for instance, rare metals for highly specialized production—or deliveries of goods in short supply—for instance, cooking oil and sugar, or the best brands of clothing, cigarettes, and liquor.

[8] Numerous field accounts mention that maintaining "harmony" necessitates a higher male contribution to household income. In Chen village, for example, the men insisted that no man should be allowed to slip below any woman in the scale of prestige as defined by work points in the commune (Chan, Madsen, and Unger 1984, 92). In Sandhead, women could never reach the number of work points assigned to men, in spite of their often harder work. Attempts at equal pay were met with resistance from the men, who were afraid of losing face (Mosher 1983, 204-5).

[9] The term cadre tends to be misleading, however, since only workers, peasants, and the jobless are not cadres; its derivations, such as cadre entrepreneurs , tend to present an especially distorted picture of what is usually small cadres' transfer to private enterprise (see Song Bing 1992).

Merchants with good connections gained an enormous advantage over those who could only obtain the popular brands from the state wholesale departments by accepting "compensation purchases," implying the additional purchase of loads of unpopular goods, which were otherwise left in the warehouse forever. In fact, a large number of small businesses in the neighborhood were established with such personal connections as their main assets. Connections to state units also have advantages in regard to stability in business. In several cases, the local authorities were reluctant to close down businesses that did not comply with regulations if they flaunted powerful connections: for example, a local smithy that the City Reconstruction Bureau wanted removed from the city area could point to the unique repair jobs he did for an adjacent army unit.

Another aspect of the household's optimization of resources concerns its internal organization. In all spheres of social life, formal principles are coupled with an informal social reality. The domestic organization among the private entrepreneurs is often highly pragmatic, with flexible arrangements allowing for considerable adaptation to economic circumstances (Bruun 1993, 59). In order to restore the household as an economically viable unit, an estimated 15 to 20 percent of local business households had incorporated distant relatives or even nonkin—mainly young but in a few cases elderly people—as full "family members." For example, a number of elderly couples without children at home brought in adolescents to help in their shops who lived in as family members.

Enterprising households tend to be more fragmented and incomplete in relation to Chinese ideals than other sorts of families—for instance, they frequently consist of lonely elderly couples; families containing individuals without spouses; or entrepreneurial, freedom-loving young people, for whom a major advantage of individual business is the opportunity to break free from the control of family elders. In terms of basic ideologies, however, such variation does not express differing social values; neither is it seen to characterize particular social identities or professions. Rarely, if ever, is deviation in domestic organization openly displayed or emphasized in the household's identity. On the contrary, serious deviation tends to be hidden—for instance, in the application of kinship terms to newly incorporated members—and in all respects tends to be made up for whenever possible in order to restore "completeness" according to Chinese family ideals. There is only a tenuous link between household identity and a concrete profession. Even though dress, consumption, and modes of speech may contribute to distinguishing present social positions—for instance, between business people and bureaucrats—these individual expressions are not indicative of the long-term aspirations of the household as such.

On the whole, we may regard the present state and position of a given household as a point of departure in the pursuit of commonly shared values,

far more than denoting a specific set of values. It goes for all aspects of life that quick moves are attempted whenever circumstances inspire them —as illustrated by the unstable business environment, with the constant abandoning and launching of businesses that came to prevail after the reforms.^[10] Few households are content with their current status, as is evident from the unwavering pursuit of divorce from manual labor^[11] and social ascendence, which is true of almost all households. Strong competition is seen for what is perceived as a common pool of limited resources: against the background of an unpredictably changing political situation, a higher position is sought in order to increase both the status and the security of the household, since these are perceived to coincide. Moreover, all groups also put great emphasis on the accomplishments of the next generation, a value the reforms have left intact, usually aiming at official employment.

Bureaucratic Commitment

Not only ordinary local citizens resumed activities from before the communist epoch. With the decline of state-sector bonuses in the mid to late 1980s and soaring inflation after 1985, many state employees were heavily hit. Of particular relevance to private business households was the fact that an increasing number of administrative staff, and subsequently entire local bureaus, adopted ways of boosting incomes that were commonly described as "traditional" (chuantong ). The collection of taxes and levies by the local bureaucracy has again become a subject of controversy in the local community, as was the case in the precommunist era. During the latter half of the 1980s, the number of taxes and levies rose from three or four to approximately ten, and the collected sums increased from an average of 30 yuan per month per household in 1987 to an estimated 100 yuan in 1989. State taxes rose only slightly; local, mainly extralegal, charges made up most of the increase. Private businesses had become the happy hunting ground for officials seeking supplements to their meager official wages, and particularly for bureaus losing out in the new economic order, which sought to redress the balance by imposing new taxes on those unable to defend themselves. In 1991, approximately twenty different taxes and levies were collected, to the bitterness particularly of the smaller business owners (Bruun 1993, 182).

[10] The average "lifespan" of a household business is hardly more than four to five years (Bruun 1993, ch. 7).

[11] For instance, the effort to evade manual labor is expressed in the common proverb, "People who work with their minds rule, people who work with their brawn are ruled" ("Laoxinzhe zhi ren, laolizhe zhi yu ren," a classical epigram by Mencius). Since the saying has strong associative value for common people and has been impossible to eradicate, the Chinese authorities have been much aware of it; see e.g., Hu Yaobang: "an obsolete and wrong way of thinking" (Renmin ribao , March 14, 1983).

Bureaucratic authority over the new private entrepreneurs in terms of licenses, protection, and so on is still exclusive, and bureaucratic power is consistently abused.

So what did people do to defend themselves? Complaining to higherlevel authorities was out of the question, since these were either unwilling or unable to interfere. Private entrepreneurs are barred from organizing themselves, and exhibit little interest in doing so.^[12] However, bureaucratic exploitation of local enterprise is only one side of the story. In fact, the local bureaucracy also offers opportunities for a wide range of ordinary people, who may engage in work for the local bureaucracy in order to obtain privileges, manipulate or negotiate rules, or reduce bureaucratic harassment.

After a decade of reform, the street-level bureaucracy is still a large and complex structure, embracing both salaried formal employees and unsalaried informal assistants and volunteers, whose activities penetrate every aspect of daily life. These latter "petty bureaucrats" receive no regular payment, but they frequently have small monetary benefits from the "social work" (shehui gongzuo/shehui fuwu ) they perform—for instance, three yuan per day for organizing meetings or a small sum for performing neighborhood committee work. Equipped with a semi-official status, they are an extension of the bureaus, which are already strictly hierarchical. They are employed in all areas of public administration: public security, health and hygiene inspection, all sorts of registration, propaganda, mediation, and taxation. The street committee, neighborhood committees, and Self-employed Laborers' Association are the main institutions for which they work. The street committee has a substantial number of people assisting the regular employees for shorter or longer periods of time—for instance, during campaigns. The neighborhood committees are exclusively manned by volunteers. Each committee, which typically has three to eight members, is in charge of twenty to a hundred households (there are approximately twenty neighborhood committees in Bin Shen). Altogether, an estimated one out of every three households in the area has one or more members with semi-official duties.

Since the street and neighborhood committees are integral parts of the civil administration, with firm control and intimate knowledge of every household under their jurisdiction, these "social workers" (shehui fuwuzhe ) are indispensable. The simplest tasks of "social work" involve being aware of certain affairs in one's environment, like the cleanliness of streets or courtyards. Others involve a few hours every day, or regular shifts during the night

[12] Neither could secret societies, guilds, or informal organizations influencing prices be traced in the area. The Self-employed Laborers' Association presumably rests too heavily on all businesses and certainly has the eradication and prevention of all other organizations among its purposes. In 1991, however, criminal gangs attempted to establish themselves in the area.

for those on the public security line, on guard for thieves or irregular activities. Other assistants are fully occupied throughout the day. These are association organizers, tax collectors, and mediators and volunteer workers in the street committee's offices. In practice, they perform the greater part of the actual work in the relationship between the bureaus and the public, and in case of conflict, they tend to act as buffers.

Although this petty bureaucracy carries little significance in the formal structure of the city government, its local political role may be very large. In the case of private enterprise, the petty bureaucracy constitutes a large field of interaction between structurally opposed sectors of the local community. Private entrepreneurs of any scale are members of the Self-employed Laborers' Association (Geti laodongzhe xiehui).^[13] The association is divided into branches of businesses, of which some are again divided to reach a convenient size, usually ten to fifteen people. Such groups are endowed with a group head (zhuren ) and two deputy group heads (fu zhuren ) responsible to the Industrial and Commercial Administration Bureau (ICB).

Volunteer work as an institution appears deeply embedded in Chinese culture; motivation for engaging in local community life among the elder generation is positive compliance with "tradition" and orthodox thought: an expression of surplus in one's own household that allows for donating one's time and energy to something that, in the phrase of the present leadership, is "to benefit the masses." It may support personal fulfillment and a sense of totality: authority is supposed to be achieved steadily through life, and old age without authority is easily associated with failure. However, since only a small group of old people were brought up before Liberation, the encouragement for continuing such a "tradition" of devoting work to the "common good" must be sought in the conditions of the present social reality. One such condition is the fact that private business people are compelled to collect taxes among themselves. Contrary to regulations stipulating authorized tax officials to do the job, it is the association representatives, or other "volunteers," who do it on their behalf. The officials are thus shielded from charges of extortion when exorbitant taxes are collected. The tax collectors, on the other hand, are granted a certain leniency in the taxation and control of their own businesses, and any collector of levies from their businesses will face colleagues who themselves also serve as petty bureaucrats. For example, a woman running a textile shop, in which two

[13] The Self-employed Laborers' Association was established in 1980 as a local initiative on the part of eight hundred businesspeople in Harbin, in northeastern China, and quickly spread to other cities. In the process, the organization metamorphosed: by being incorporated into the formal structure of society, it came under the control of the Industrial and Commercial Administration Bureau, which manned its posts (Yudkin 1986). The association is now a "mass organization" of businesspeople with compulsory membership.

young apprentices from the countryside do the actual work, is occupied with "social work" most of the day. She is at the same time mediator, association representative, and assistant tax collector. Her own business has a registered turnover of a few hundred yuan, which she states yields her a profit of only 100 yuan. When they were alone in the shop, however, her employees inadvertently put her profit at about 1,000 yuan. Similarly, a rural hand takes care of all manual work at a small bakery under the control of the wife of another association representative, who is away most of the day doing various jobs for the association. His business, which supports his household without burdening it with much work, has a registered turnover far lower than the actual level, and the tax is consequently insignificant. This petty official formerly ran a large restaurant in a building that was demolished, and he is awaiting compensation so as to start up elsewhere.

What further adds to the complexity of local bureaucracy is the practice of rotating the posts among volunteers—for instance, as association representatives—thus providing opportunities for a substantial number of people. A representative is "appointed by the ICB and elected by the masses," usually for a three-year period. Some representatives say "everyone has the right to elect, and the right to be elected." Thus everyone without grave conflicts with the bureaucracy has a chance of attaining semibureaucratic status for a three-year term, potentially boosting his or her own business. Volunteers tend to be people over fifty years and supporters of "tradition" in family affairs, but the institution of petty bureaucracy as such reinforces the basic characteristics of political struggle in Bin Shen, which is individualized and oriented toward concrete material benefits. The merging of orthodox thought and tangible benefits is conspicuous: individuals and households performing jobs for the bureaucracy are granted tax reductions, smooth access to licenses, small allowances, and political and economic protection.

From the viewpoint of business people, local bureaucracy is the main opponent of private enterprise. Encroachment on profits and obstruction of the expansion of business is perpetuated by "bureaucrats shielding one another" (guan guan xiang hu ). Local bureaucracy is a unified structure, in that its departments all operate according to the same conventional, if unwritten, rules and have fairly predictable responses. Yet the local-level administration consists of a series of individual bureaus, which all need to be dealt with separately: the ICB and the Self-employed Laborers' Association, the street committee, the Tax Bureau, and the Public Security Bureau. Informal networks operate around each of them, involving a wide range of people. All politically significant struggle in the local community therefore tends to be absorbed into this vast arena, which ties together the opposing interests of bureaucrats, petty bureaucrats, and entrepreneurs, and within which struggle, negotiation, and compromise take place.

As private business spreads, monetary wealth is playing an increasingly

dominant role. Bureaucratic authority has been challenged in this process: changes in the economic base have had a profound impact on the entire institutional setup of the local community by altering the role and authority of some key neighborhood institutions. In Bin Shen, private enterprise rapidly created a powerful Tax Bureau (Shui wu suo), brought considerable authority to the Industrial and Commercial Administration Bureau (Gong shang ju), and reinvigorated the Public Security Bureau (Gongan ju), including local police stations (pai chu suo ), since the last two began to charge entrepreneurs for maintaining law and order. Those bureaus directly involved in the taxation and control of private enterprises gained significant power, easily transformed into monetary benefits. On the other hand, the street committee (jiedao weiyuanhui ), formerly a stronghold of party interests and a linchpin of neighborhood governance (see Whyte and Parish 1984), encountered a decline in its authority: partly owing to the central government's deliberate attempt to reduce party power, partly because the street committees were only granted a minor role in the economic revival. Except for certifying the identity and formal status of applicants for business licenses, all responsibility for private and collective enterprise has been placed with the ICB, in principle reporting directly to the government.

Cooperation between various departments of the local administration has become increasingly problematic. The tremendous size of the local administration itself suggests a need for rationalizing, especially where local bureaus work in related fields, carrying out similar central-government programs aimed at job creation, education, or the control of individual businesses. Faced with this prospect, local departments, prominently including the street committee and the ICB, are competing to maintain their authority in a struggle between the party and the civil administration.^[14] The authority of the one over the other has very concrete implications. After 1987, the central government repeatedly emphasized the correct classification of private businesses into either smaller "individual households" (geti hu ) or larger "private enterprises" (saying qiye ), which had not been implemented by local authorities. In 1991, the street committee and the ICB were pressured to comply. The two bodies reacted by registering the larger enterprises as "collective" rather than "private," because in such an arrangement a percentage of the turnover is usually procured by a local bureau in return for the favor. However, the street committee and the ICB disputed which of them was to be responsible for these enterprises, with the result that the larger business owners were able to play the two off against each other and thus remained "individual households," until at least the next round of rectification.

[14] In 1987 and 1988, several central-government initiatives were aimed at separating party and state interests in administration—for instance, the August 1, 1988, proclamation to abolish party cells in every ministry under the state council (see, e.g., Manoharan 1990).

Collective Passive Resistance

Apart from themselves engaging in efforts to work for the bureaucracy for advantages, entrepreneurs may use passive resistance. In 1988, the Public Security Bureau's new "security charge" met considerable resistance; the charge was felt to be both unfair and blatantly illegal, since people were asked to pay for what the Public Security Bureau was already supposed to have been funded for. A number of the more outspoken and articulate shopkeepers confronted the collectors—for example, by arguing that when anything was stolen, the bureau usually remained passive—and bargained the charge down. Apparently, social position became a distinguishing feature in the actual amounts paid, since the better-educated, who would point out media proclamations about the need to promote the individual economy, frequently got away with lower charges. When word spread, however, the charge was soon resisted by the majority of shopkeepers. Realizing the scale of the protests, the Public Security Bureau retreated. The bureau's original claim was twenty-five yuan per month (at that time, state taxes averaged forty yuan per month), but it was lowered to fifteen yuan per business household. The amounts paid varied greatly, however, and after the crushing of the uprising of 1989, which inspired more cautiousness on both sides, the charge fell to approximately twenty-five yuan every three months.

In early 1989, the introduction of a new charge after a series of others, an "education fee" paid to municipal authorities, was simply resisted by many business people. Word quickly traveled that some had refused to pay, and most others followed. To meet the challenge, the Self-employed Laborers' Association called a general meeting.^[15] The association's claim to be the business people's own mass organization is contradicted by the conduct of such assemblies, as in the case of one I witnessed (see Bruun 1993, 119–20).

All shopkeepers were summoned to a meeting to be held at 9 A.M. in a large tea salon on the first floor of a state restaurant on a main street, 500 meters from the Bin Shen area, which had no accommodation of this size. It was a gray, dreary hall, with a dirty concrete floor, hard wooden benches, and no decoration on the old walls, which badly needed paint. The association treated everyone to tea, served by a grubby old employee from the

[15] Monthly meetings are held in all groups, and in addition regular assemblies are held for the whole Bin Shen area. Participation is compulsory for all shopkeepers, who are here informed of government policies, new regulations concerning private business, and new taxes and charges by the ICB. These meetings are considered the basis of the political education given to shopkeepers. When the central government demands that the masses study certain topics, as was the case in 1988, when all were to "study the law," and in 1989, when political study classes were reestablished, the association is the organization through which individual households are reached.

restaurant below. The business people started coming in around nine, one by one or in small groups, engaged in animated conversation about business affairs. Many were late for the meeting, and even after its start, several groups of young people lingered near the entrance, refusing to sit down in front, where the speakers could be heard. Out of the roughly 250 people obliged to attend, about 170 actually appeared. And it quickly became evident that many shopkeepers had sent substitutes: elderly grandparents, spouses, sons and daughters, distant relatives, and even employees were numerous; actual shopkeepers probably made up only a small minority of the participants. Especially those in the larger businesses were nowhere to be seen. The main topic of the meeting was the introduction of the education fee, a compulsory one-time sum to be paid by all citizens in Chengdu. The organizers of the meeting talked at length about the necessity of this charge. The main speaker at the meeting was a Mr. Wei, an individual shopkeeper who had been promoted to volunteer for the West City level of the ICB. For half an hour, he spoke wholeheartedly about the need to educate the young and with equal enthusiasm asked the shopkeepers not only to pay the compulsory charge but even to exceed it.^[16] While he talked, people were yawning, chatting, and walking in and out of the lavatory; their attitude collectively expressed the triviality of these matters, as new charges were constantly being introduced. Many had placed themselves behind pillars or in distant corners of the room, where they could not possibly follow the speeches. After Wei had finished his monologue, he rushed off to repeat his performance in another area. A local representative took over, but some shopkeepers had already started leaving before the show ended. "Time is money in private business," as one of the youths near the entrance said, using an entirely new phrase, taken from newspaper accounts of the capitalist West.

All such meetings in the local community consist exclusively of one-way communication, in the sense that only one view is propagated from the platform. Comments from the floor or open criticism are unheard of. Yet in this case the absent-minded participants created an atmosphere clearly expressive of their opinion and their degree of tolerance in the matter in question, turning the meeting into a trial of strength. The collective resistance to the new charge resulted in the compulsory sum being lowered, whereafter everyone paid. At these meetings, the association representatives are all dressed as cadres in gray or blue suits, clearly distinguishable from the individual shopkeepers. The prestige gained from performing these semi-official duties is of a kind that may allow for conversion. As one of the

[16] Articles were simultaneously published in a local newspaper about (unnamed) shopkeepers donating large sums of money for this purpose (e.g., Chengdu wanbao , April 13, 1989).

shopkeepers put it: "Yes, it gives them a certain prestige, but they also do it to protect their own businesses. You cannot criticize officials. If we criticized an official, we would not be able to face him afterward, even these small ones."

Systematized Exchanges between Business
And Bureaucracy

The coordination between the central government and the bureaucratic institutions is hardly more than desultory.^[17] Judging from local experience, the implementation of central policies is highly selective, since the leading local cadres are prepared to defy any regulation jeopardizing their interests. From the grass-roots perspective, a precondition for even the state's limited control of the local bureaucracy appears to be the maintenance of exchange relations, securing extralegal privileges for the officials. Petty officialdom is important in this game, since it enters into a long series of exchanges at the lowest level. The system transmits two currents. Loyalty and expression of conformity travel upward, while the countercurrent is one of privileges—administrative freedom that is easily converted into material benefits. Successive levels of the bureaucracy employ similar means to secure their positions, turning the power structure of the local community away from any legal order, in which individuals are equally positioned. Moreover, there are both top- and bottom-level interests in safeguarding bureaucratic power. Because political and material pursuits are openly allowed to coincide, bureaucracy becomes an instrument for broad interests stretching across conventional boundaries.

The vast majority of private enterprises do not depend on the local bureaucracy for anything other than registration. The vast field of interchange is caused by the interest that the bureaucracy takes in private business. Various means to protect a thriving business against infringement exist. The orthodox strategy, to become a petty bureaucrat, tended to be used mainly by the smaller business owners. The large business owners, however, had easier access to privilege through the establishment of regular alliances with powerful officials.

In both an abstract and a material sense, exchange relations between private business and local officials appear to be firmly institutionalized. Restaurant owners had by far the highest earnings in the area, with monthly profits ranging from 1,000 to 5,000 yuan, and they routinely offered free meals to officials from local bureaus in an attempt to win their goodwill.

[17] On the basis of material from Wenzhou, Zhejiang province, Liu 1992 introduces the concept of the "sporadic totalitarian state" to account for the local leadership taking the law into their own hands when liberalizing the economy.

Conversely, many officials occasionally simply demanded huge meals free of charge. Of greater impact, however, are cash payments to emissaries of the pertinent bureaus. The bigger businesses are generally able to reach agreements on taxation far lower than their estimated legal obligations. I estimate that these businesses pay tax on only half of their turnover. Indisputably, it is the state that loses out in the trade-off between big businesses and the local bureaucrats. In terms of additional charges, the large businesses are favored even more. They generally spend equal sums on state taxes and local charges, whereas the smaller businesses tend to spend twice as much on local charges as on state taxes.

Alliances between entrepreneurs and officials tend to be unstable and shifting, however. Relations tend to be focused on cash payments or goods given to officials, who either show an openness to such offerings or explicitly demand them in exchange for a friendly handling of the business owners' affairs. Since cooperation among different departments of the local administration tends to be minimal, a business owner can rarely count on a friendly official in one bureau to smooth relations with other bureaus. Thus the entire structure of local administration tends to create an array of casual alliances (which the business owners can only hope will be effective) and depress the development of an extensive, powerful organization across institutional and occupational boundaries.

In the 1980s, new social hierarchies were generated spontaneously. The notion of hierarchical positions now penetrates every aspect of private business. Despite the fact that private entrepreneurs are regarded as belonging to the lowest social stratum by the general populace, evident status differences are found within the private sector itself. Internally, each business displays a strongly hierarchical organization, with labor being distributed according to kinship relations, gender, and place of birth. Among owners, there is a strong avoidance of manual labor, and of any responsibility except for guarding the cash box and perhaps long-term planning, in an attempt to compensate for an inferior social standing. Conspicuous consumption among private business people is equally prominent. Moreover, testifying to the fact that exchange relations are more complex than payments in cash and kind is the fact that there is sharp competition to attract customers with high social standing. Restaurants, for example, solicit banquets held by officials or other important figures. In Bin Shen, actors and celebrities from the nearby Sichuan television station were also targeted restaurant customers, as were rich Taiwanese tourists. Similar considerations were evident in other businesses: a dealer in second-hand books, for instance, found it more worthwhile to sell a certain book to a scholar than to a commoner, irrespective of price, and a private doctor would prefer prominent patients anytime; apparently, such business can better satisfy the business owners' own aspirations to upward mobility.

Building and Manipulating Authority

Central-government politics form a basis for power by providing the abstract authoritarian rhetoric needed to establish powerful positions, which are duplicated down through the bureaucratic institutions.^[18] The actual exercise of power in Bin Shen, however, is largely unaffected by official state ideologies. Bureaucratic office is perceived as an individual privilege by officials and subjects alike. Entrepreneurs never attempted to use their association to articulate or enforce their rights. The charismatic office holders somehow earn the respect of all, disregarding their means, since might is usually right. The persistence of established practices has hitherto been silently accepted by higher levels of the state bureaucracy, presumably as a prerequisite for maintaining national integration. Grave cases have been attacked by the central government and also given much publicity,^[19] but national policy and everyday practice differ. In a local community such as Bin Shen, the numerous rectification campaigns are merely faint signals. Local power is personalized to a degree where the law is identical with the officials in power, and legality is their specific way of employing personal power. The scope of private entrepreneurship is thus laid down by the practice of local bureaus, which are more concerned with "fairness" than legality. The concept of "fair treatment" (zhengdang ) is in fact far more commonly used than references to law. Some local officials admitted that these were common principles. When asked about the legality of some of the charges extracted from individual businesses, the head of the ICB local office answered after some contemplation: "I don't think it is a question of whether they are legal [hefa ] (since this could not be determined), but if they are reasonable [heli ]." Since the legal foundation for fiscal practices is weak, the struggle is over the amounts paid rather than interpretation of legal codes. Bureaucracy poses a financial obstacle to business, but it is counted as an inevitable overhead.

A theme that permeates all struggle in the local community is the display of conformity. Whether genuine or feigned for strategic purposes, conformity in the outer appearance of things belongs to the shared values of social thought, to some degree resting on a broad, unverbalized consensus. It belongs to "tradition" or the "nature of things," something that can be manipulated, but nevertheless makes up the common platform of public behavior. Fundamental to the display of conformity is the submission to

[18] Formal language draws on the morality of central authorities. In this respect, the Confucian tradition, described as "the doctrine of the exemplary center" (e.g., Geertz 1980, 13–15) is continued in the communist moralizing authorities (e.g., Pye 1988), and the state is thus built on moral, rather than legal, order.

[19] Renmin ribao , September 6, 1989, mentioned, however, that the main fiscal problem was not the rate structure but the administration and collection of taxes.

authority, in domestic affairs as obedience to family elders and in external relations as the recognition of bureaucratic power. This assures those above that their authority can be transformed into privileges, and it provides those below with a recognizable procedure for their own struggle.

Old proverbs and expressions for the administrators' abuse of power are nevertheless many. They stress their lack of morals, ruthlessness, and covetousness. "The officials burn houses, while commoners are not permitted to burn oil lamps." They are the "uncrowned kings" who "divide and rule"; and "when the gods fight, the people suffer." Officials are even compared to old-style landlords in connection with excessive taxes: "to work for Master Liu" means to work without getting the fruits of your own labor.^[20] A long-standing post-Liberation proverb, "The Nationalist party [Guomindang] imposed many taxes; the Communist party [Gongchandang] imposes many meetings," has recently been amended to "the Communist party imposes many taxes and many meetings."

Paralleling conformity within the household, which is tied to respect for authority, conformity in communal affairs revolves around the simultaneous recognition and manipulation of bureaucratic authority. Notwithstanding a certain resistance in recent years, by far the greatest number of shopkeepers still accept and submit to the unwritten codes of the local community. The disciplinary effects of bureaucratic power are obvious, although it is often exercised for purposes other than those intended by the Communist party and government. Ideological control of business people is attempted through the association but carried out by officials not motivated by ideological concerns.

The strategies that individual households adopt toward local bureaucracy are ambiguous. There are certain patterns in these strategies—either conformity and the pursuit of privilege by following the rules set by those in office or, at the other extreme, trying to avoid all personalized relations. This was attempted by a few successful entrepreneurs in the area, who consistently alluded to central-government policies, but the heavy pressure local bureaucrats put on anyone with ample economic resources made it exceedingly difficult. The highly esteemed conformity within the local community means following the rule of custom, rather than the rule of law.

Ideological control over activities of no direct interest to the bureaucracy is indeed limited. The severe shortage of housing and steadily increasing rents are a constant source of exploitation among ordinary people. Landlords frequently break contracts and evict shopkeepers when they get better offers, and the letting of dwellings to private business people is also surrounded by cool calculation. Many incidents were reported of landlords continually

[20] Master Liu, a wealthy landlord outside Chengdu, was famous for forcing peasants to work without pay. Now the expression is used of the "people above."

raising the rent, and some even demanded to become full partners in their tenants' businesses, which implied receiving 50 percent of the profits. Such private arrangements are of no interest to the local administration. "Big fish eat small fish, small fish eat shrimp" is a pertinent colloquial expression.

Bureaucracy's Impact: Obstruction Or Promotion Of Business?

Local bureaucratic departments play a considerable political role in marking the bounds for the registration, regulation, and expansion of the private sector. Up to a certain point in time, the three bureaus most important to business—that is, the ICB, street committee, and Tax Bureau—were rated very differently by business people in regard to their attitudes. Being most positive and posing fewer problems, the ICB was to some degree considered a support to business people. In the late 1980s, however, when officials' wages were seriously undermined, this bureau was seen to engage more routinely in the extraction of extralegal fees for issuing and renewing licenses. After 1989, when the entire institutional setup was shaken by popular protests nationwide, the three bureaus were no longer seen to differ. The entire administration was thus as far removed as ever from one based on law.

The two sides followed similar practices: illegal in relation to the "law" as defined by the central government, yet enjoying "conditional acceptance" from the other party. Almost any business practice seems possible if adequately paid for. The reputation for cheating, selling fakes, and so on that the private sector has gained among many ordinary citizens has been steadily nourished by some of its unscrupulous representatives. Many restaurants, for instance, use cooking oil mixed with the oil extracted from pig skin, which is highly unsuitable for consumption, and everybody knows it. Stalls openly sell illegal copies of cassette tapes of famous stars, but the low price matches their quality. Illegal activities are most commonly restrained, not by local authority, but by the immense caution exhibited by customers. Few permanent shops can survive on inferior goods or service. People usually watch out for traveling salesmen, since their tricks are numerous and often sophisticated. Some sell fake medicinal herbs, only staying in the area for a few days before moving on (all sorts of swindlers and con men disappeared for a long period after June 1989). One traveling salesman, a gifted speaker, sold a bicycle-polishing liquid consisting of vinegar and red coloring in fancy-looking bottles. Its effect was limited, and after a few days everyone knew it. Still, he was able to talk strangers passing down the street into buying the stuff, often to the amusement of the nearby shopkeepers, and he made a good profit in spite of being taxed heavily by the collector in the street.

Several shops in Bin Shen sold or processed goods and materials that could not possibly be bought legally by individual households. A local traditional

water-pipe workshop molded pipe bodies in a chromium alloy that was in very short supply and only distributed to key state industries. It was procured from a factory in large amounts by a relative and declared to be scrap metal; the finished water pipe sold at a price apparently lower than the world market value of the solid material used. A producer of plastic containers bought his raw materials, also monopolized by the state, through channels that "take a lot more than just good guanxi ." Another shop sold clothes made for export by a state factory. They were sold on commission for a neighbor who had relatives working at the factory in question. A smithy, on the other hand, could not buy sheet metal at the price determined by the state wholesale department; since it was in high demand, the state shop sold it at a negotiated price (approximately double), making a huge profit. Cigarette sellers in the street have for years openly traded foreign cigarettes purchased on the black market, often connected to illegal money-changing with foreigners.

When confronted with such irregularities, the local bureaucracy remains passive. If it acts, it is only to secure a share of the profit gained through illegal means. While the Tax Bureau denies involvement, its petty officials disclose the practice: in the local free market, the volunteer tax collector willingly admitted that assessments were not made solely according to turnover. The Tax Bureau also embraced "cooperativeness," which in this context may be a way of recognizing local authority; "and if any of them carry out illegal trade we charge them extra — if, for instance, they pump up chickens with water or sell products of inferior quality — in these cases, the tax can be as high as 30 percent of turnover, depending on their political attitude, their agreement with government policies and attitude toward us" (Bruun 1993, 123).

Complaints from people who have been cheated are generally futile. Disputes between residents in the area are mostly sorted out by the volunteer mediators, and only grave cases are transferred to the Bureau of Public Security; this is another example of how petty officials operate as buffers. Cases involving strangers are rarely investigated, as the local public security office claims to lack the power and personnel to operate across administrative boundaries. This was the case when a young woman, who had just started her shop after being unemployed for a number of years, was cheated by two strangers. One day someone posing as a small peasant came to her shop in order to sell her a small quantity of "lotus-root flour," telling her that it was becoming increasingly popular for cooking. He persuaded her to buy a single packet, just to see if she was able to sell it. The next day another man walked by. As he passed her shop, he cried out in joy, pointing to her lotus-root flour. "I have been looking for this for ages," he said. "Can you get me some more? I want to buy a lot." The third day the "small peasant" came back and supplied her with the quantity specified. The woman was stuck

with the useless "flour" and lost all her savings. The public security office merely suggested that she be more careful in the future. Similarly, ordinary thefts reported by shopkeepers were rarely investigated.

Formal versus Informal Hierarchies

The revival of markets and private enterprise and the reduced social control that resulted gave rise to a new set of relations between bureaucracy and private enterprise that was widely recognized on both sides. Bureaucrats reacted to the new sector with self-consciously traditional calculation. How much can a cow be milked? How much can a cart be loaded without killing the horse? Private businesspeople took approaches equally rooted in an earlier era: making optimal use of all household members' positions, paying off officials, doing "social work" to attain privileges, and so on. The two sides shared a strong aversion to the "unknown" — especially intervention in local affairs by higher-level government authorities. In spite of their conflicts, business and bureaucracy had a common interest in resolving conflict locally. History showed external forces to be the most dangerous — when businesses were collectivized on Beijing's orders in the 1950s, businesspeople were deprived of their means of subsistence, and everyone was gradually impoverished. Local people also recalled both the Great Leap Forward, which led to the depression and famine known as the Three Hard Years in 1959–61, when almost every local family experienced deaths, and the atrocities of the centrally ignited Cultural Revolution, when private business was again damned and scapegoated.^[21]

The central government's "class struggle" has given way to a struggle over the division of the new material wealth, and over who should "get rich first."^[22] With the greater economic opportunities, social hierarchies in the local community became increasingly conspicuous, since power now brought real wealth. Formal authority thus gained importance in the local community, since it could easily be capitalized on through extralegal taxation. The new material means substantiated and invigorated personal followings within the formal structure, which were extended downward by the

[21] Almost half of the elderly people in Bin Shen who have returned to private businesses since the reforms told of being seriously molested during the Cultural Revolution: they were dragged through the streets with caps and signs, kicked and beaten up, stabbed with knives, imprisoned, humiliated, and so forth, many to a degree causing permanent physical or mental disablement.

[22] This is a far cry from what Renmin ribao declared on March 30, 1985, on behalf of the party cadres: "In the situation where some people get rich first and the rest get rich later, in order to let the masses get rich first, we are willing to wait to get rich later. If this may be said to be losing out, then this loss is necessary. If this may be said to be a sacrifice, then this sacrifice is glorious."

involvement of petty officials. Within departments of the local bureaucracy, systems to redistribute locally generated wealth according to rank were either established or strengthened. Although some of the levies extracted from private businesses may be appropriated directly by a particular bureaucrat, a large income is frequently distributed to all officials according to rank within the bureau. Petty bureaucracy apparently also provided its clients with advantages besides political protection.

Considerable wealth was created in private business, enabling some large entrepreneurs to build enterprises with a number of employees, and to bind smaller business owners to them through loans and connections. Private business has developed a clear internal status order, both within the household and in labor relations, where social status carries increasing weight; employers and employees often belong to clearly distinguishable social strata.

The reforms have clearly created alternative career opportunities. Moreover, private business may be seen as the structural continuation of a prerevolutionary informal hierarchy:^[23] as its only role is to create wealth, it stands in strong opposition to the bureaucracy, for which political authority and privilege are primary.

State employment and private enterprise may be identified as dual career tracks: "two streams" (liangge chuan ) that constitute opposed, or competing, routes by which to attain the household's collective ambitions, social ascendence and material satisfaction. One presupposes education, the other skills and ingenuity. One is the ideal approach, the other pragmatic. One is the conventional, the other unorthodox and generally debased. They coincide in treating the attainment of superior positions within hierarchical structures as an important means, either to privileged, formal authority or to informal power based on material wealth. Both are characterized by their principals' undisputed authority and stretch downward into meticulously defined positions. They generate equally coveted values in accordance with Chinese ideals of the good life. It is significant that a sense of "totality" is reached only when they are yoked. A central concern to households is the transfer of surplus from one side to the other: the conversion of material wealth into the education of children, positions of status and authority into material benefits, and so on. For obvious reasons, many households in the contemporary Chinese city aim at connections with both spheres by having members both in government jobs and in some sort of business, or in a position combining the two.

Numerous writers, both Chinese and foreign, still envisage the transformation of Chinese society in terms of the growth of horizontal ties among

[23] See, e.g., Adshead 1985 on the dual hierarchical structure in Sichuan around 1900. Others have argued that in late imperial China public associations may have evolved without civic power being turned against the state (e.g., Huang 1991, 320C).

ordinary citizens.^[24] Yet nothing in my fieldwork indicated attempts by small business people to form alliances and defend their rights, or efforts by the employees in the larger businesses to organize for better wages and working conditions. When we view politics at the level of the local community, there is little evidence of class or group struggle, or abstract ideologies.

While there obviously are differences of interest, it would be grossly misleading to distinguish between business and bureaucracy as separate classes, strata, or underprivileged/elite groups, defending particularistic interests, or expressing radically differing outlooks, values, or strategies. Bureaucratic authority is hardly representative of any distinct pattern of behavior as compared to that of the new entrepreneurs, but rather denotes a structurally different entrance into a common field of exchange relations. The connection between the accumulation of capital and the subsequent pursuit of formal status in defense of the gains shows the importance of collective household strategies with respect, for instance, to occupational affiliation.

In a comparative perspective, it seems that anthropological fieldworkers have registered significant "class consciousness" among workers neither in Hong Kong nor in Taiwan. For example, Taiwanese factory women's "perceptions of work … involve factors that go beyond the nature of the tasks they perform; and the satisfactions that they find in work derive in large part from the social context they themselves create" (Kung 1981, 209). Usually, such work is regarded as merely an intermediate stage toward a broader family goal (Nieholf 1987). In Bin Shen, businesspeople would cooperate with bureaucrats well aware that this is highly detrimental to their own common group interests. Theories of unconscious subjugation to political domination through formalization of power (e.g., Bloch 1975) appear absurd when one considers both the conscious political actions involved in local petty bureaucracy and the calculating ideologies in the economic field. Answers must be sought in terms of a cultural disposition in favor of vertical rather than horizontal loyalties. The spontaneous creation of local social hierarchies results from the type of loyalties embedded in paternalism, which is consciously reproduced or further developed through the practice of guanxi cultivation, and a strong element of conscious competition is ever present (see, e.g., Walder 1983, 1986).

Conclusion

In the modernizing Chinese urban areas, all forms of private business play crucial roles in providing "space" for the formation of new ideologies and facilitate

[24] This is often inspired by Chinese official designation: in 1989, for example, the Chinese media singled out individual business households as a new "middle class" (zhongchan jieji ) (Renmin ribao August 22, 1989).

the spontaneous development of new forms of social organizations.^[25] In this respect, private business has the potential for accomplishing what mass campaigns earlier aimed at in the field of modernizing social institutions but were never able to carry through. However, the growth of individual business itself is more truly depicted as an effect of economic and political circumstances, calling for new solutions, rather than an expression of essentially changing values or a growing societal force turned against the state.

After the reforms, business and bureaucracy spontaneously developed into the main political forces in the local community. At least on the surface, however, there is a remarkable consensus on basic ideals in both these sectors, stretching across different social strata: the powerful aspirations of the Chinese household toward ascendence in a total sense, combined with established notions of a given social order, generate dual sources of values and aspirations. Basic social orientations perhaps necessitate a dual hierarchical structure as their counterpart in order to be fully played out. The respective sectors do not determine the individual's identity and permanent economic affiliation.^[26] Conformity implies a profound duality: it is the conscious balancing of seemingly contradictory endeavors, and certainly taking care never to reach out too far in any direction. Thus business and bureaucracy reconstituted themselves as complementary strategies, equally known and established in the urban community.

Correspondingly, although the setting in which basic political relations operate has evidently changed, there are reasons to believe that local communities have the potential to reach a new state of balance between political forces, in which certain fundamental values are preserved. Among these are the social prestige derived from official employment, the debasement of small private enterprise, and the household's pursuit of totality in the sense of combined social standing and material wealth.

In the absence of representative democracy and struggle over abstract political issues, bureaucracy as an institution remains the focus of all formal power in the local community. With the emergence of private enterprise as a new source of material wealth, a potential for widened and diversified

[25] The stem family, comprising three or more generations under one roof, still serves as the model, at least for the older generation, and is the axis around which variation revolves. Even so, "stem family" describes less than 50 percent of households. Wealthier households exhibit a higher degree of compliance with tradition, but historically, the notion that in earlier times most Chinese lived in large or joint families has been discredited. Apparently, considerable deviation occurred (see, e.g., Hsu 1948), with the "family" varying in both residential patterns and internal economic ties (see, e.g., Cohen 1970), and sometimes consisting merely of a "social unit" without a single set of family relations among its members; profound adaptability is evident (see, e.g., Croll 1987). For a discussion of change in family-continuation patterns, see Whyte 1990.

[26] For historical accounts of the perception of social mobility, see Ho 1962; Hu 1933; Kuhn 1984.

political power was created. Judging from the experience in Bin Shen, however, it also created a new interest in local bureaucracy among businesspeople, since the benefits from connections to bureaucratic office tend to be widely dispersed through an informal system of services and rewards. Since street-level bureaucracy is so firmly rooted in history and ideology, it appears to remain qualitatively unchanged by the switch to a market economy. The individual departments have clearly gained greater freedom from their superior institutions through exchanges with and extortion of private business, offering their officials a share of the increased wealth, particularly in urban areas. So even after a critical period of change, it is still worthwhile to be a Chinese official, and in this position at least formally to work to maintain the political status quo.

We should be, careful when interpreting changes in Chinese local communities in terms of universalistic concepts, or Western concepts that have a radically different reading when used rhetorically by the Chinese state. Learning from derailed debates on class struggle, revolutions, and modes of production, we should avoid a blinding new conceptualization of Chinese society to make it fit into universalistic categories, created by a sociology molded by analysis of Western revolutionary processes, and thus far more concentrated on prophecies of change than evaluations of continuity.

When investigating the Chinese political process on the level of basic social institutions and political practices, one observes mainly individualized, concrete actions. The individual action gains its political momentum not by itself, however, but through its endless duplication by others, reckoning on "safety in numbers." Within such a system, people will usually either comply with the established order or seek to topple it. The situation I have described may reflect a fundamental political process, which Chinese public authorities at all levels must comply with. For the system to be coherent, the Chinese state must to a large extent absorb, articulate, and reflect common people's values, orientations, and visions. Although local studies like the present one do not permit predictions about the Chinese state, they may nonetheless be indicative of fluctuations in the Chinese national order. The picture of the Chinese state as a repressive, authoritarian, and largely external power defending party-elite interests, in constant danger of being overthrown by "society," is hard to square with the structure of the local community observed in this chapter. One effect of the prevailing hierarchical relations at the local level is that authorities tend to be replaced, not by their opposites, but by their duplicates.

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