In What Arenas Does Bargaining Occur?

There are several arenas (or types of arenas) that play central and recurrent roles: the SPC, other commissions, the Standing Committee of the State Council,^[43] the Politburo, state councillors, ad hoc interprovincial and interministerial committees, the National People's Congress, the national finance and planning conferences, materials-allocation confer-

ences, central work conferences, and specific policy-issue committees. These forums are replicated at all system levels . At this, we see only the tip of the iceberg of conflict-resolving arenas. Below I concentrate simply on national arenas.

The SPC (in 1989 consisting of the pre–April 1988 State Planning Commission and the old State Economic Commission) is one of the most important bargaining arenas. As a commission, the SPC stands as a buffer between individual ministries and the State Council. In an interview I was told that the way in which allocations among ministries are determined is "complicated" and that there is "lots of discussion." The interviewee went on to say that every province and municipality wants allocations that they consider small but that become a huge sum when aggregated. The SPC is the organ charged with mediating these conflicting claims and avoiding deficits and material bottlenecks.^[44] Because the SPC is divided into functional bureaus, conflict patterns within the organization tend to reflect those in the wider bureaucratic environment.^[45]

Another, and indeed higher, arena for bargaining among territorial and functional interests is the State Council, meaning either its Standing Committee (with a large permanent bureaucracy of its own, which needs a great deal more study) or the entire State Council. Conflicts that cannot be resolved by individual commissions or ministries are referred upward to this next higher level. For instance, to paraphrase one interviewee, "Say there is a high value investment to be made ... and say four provinces or municipalities all want it ... obviously this is a difficult task. ... The SPC can reach agreement with mayors, but if that is not possible, it then goes to the Standing Committee of the State Council."^[46]

It appears from my interviews, as well as from the work of Oksenberg, that one of the key systemic problems is that an excessive number of issues cannot be resolved by the ministries and localities themselves, even though, as Susan Shirk says in chapter 3, there is a desire to resolve issues at the lowest possible level. This can overwhelm the top echelons of the State Council (and Politburo) in a Niagara Falls of issues, a torrent whose volume is greatly increased by the fact that market mechanisms are not in place that elsewhere greatly reduce the number of items requiring conscious bureaucratic (political) decision in the first place.

In an effort to reduce the number of issues kicked to the next higher level, the Chinese have repeatedly tried to merge organizations that habitually conflict (and yet need to coordinate policy). The Water Conservancy and Electric Power ministries are just one of several such cases. In 1982, for instance, the Water Conservancy and Electric Power

ministries were merged. As one interviewee expressed the logic of the move, discussions would now be "in the family" rather than "between families."^[47] This union ended in divorce in April 1988, once again, with the re-creation of the Ministry of Water Resources and the merger of the Electric Power Ministry and other units into a new Ministry of Energy Resources.^[48] What is fascinating is that even when the water-conservancy people had been joined in a "shotgun union" with the electric-power people, individuals from each of the old ministries still referred to their new organization as the Ministry of Water Conservancy and Ministry of Electric Power, respectively.

Not only are conflicts resolved in the SPC and the State Council, there also is a rich repertoire of regularized and ad hoc procedures, conferences, and committees to resolve disputes in both the formulation and the implementation phases of the policy process at all system levels. Among the most important are the National Finance Conference and the National Planning Conference. One informant described the National Planning Conference as a Chinese market in which delegations from various provinces and ministries worked out deals. Lieberthal and Oksenberg explain that in the planning process the Ministry of Finance (MOF)

must go over the draft plan from the SPC with a view to its financial feasibility and implications. Not surprisingly, the perspectives of the three major participants in this process (the line ministries and provinces; the SPC; and the Ministry of Finance) often differ as to both the revenue and expenditure implications of their proposals. ... The key forums for resolving the differences among these various groups in the annual planning cycle were generally the National Planning Conference and the National Finance Conference. ... Since not all problems could be solved at these meetings, a central work conference that brought together provincial Party first secretaries as well as Politburo members and other key officials usually met to reach final decision on particularly contentious issues. The Politburo itself met separately to determine its position, where necessary.^[49]

When the Politburo finds itself deadlocked, the supreme leader, in this case Deng Xiaoping, and before him Mao Zedong, becomes the court of last resort. From a system-development perspective, the critical questions for the future are these: Will the system be able to reduce the number of issues bumped up to this level for resolution? And will individual leaders assume less importance as institutions achieve greater legitimacy?

Finally, one of the most interesting developments of the first decade of reform in the post-Mao era was the rise of the National, and local,

People's Congress (NPC) as an arena for bargaining. For instance, during the March 1989 session of the NPC, Xinhua carried the following report, quoting one NPC deputy named Yang Lieyu: "However, he noted, as most provincial governors and mayors of major cities are NPC deputies, who usually spoke a lot, asking for everything ranging from favorable policies to energy and raw materials, from cabinet members and ministers, deputies' group discussions sometimes became bargaining sessions between the central government and local authorities."^[50]