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Chapter 5 The Socialist Corporatism of Business Associations
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Chapter 5
The Socialist Corporatism of Business Associations

Post-Mao China has witnessed a revitalization of "associations" (xiehui ). Partial political liberalization, combined with extensive if incomplete decentralization of the economy and the concomitant strengthening of economic actors, has allowed a limited, Chinese-style associational life to emerge. The foreign and private sectors have not been excluded from these developments. New associations for the post-Mao business elite differ markedly from their "mass organization" (qunzhong tuanti ) counterparts of the Maoist era, which were "transmission belts" for state policy and hence rather completely dominated by state interests. Do associations truly promote the interests of their members from a position of autonomy, and reflect, as some have suggested, the emergence of pluralism or civil society?[1] Alternatively, are associations tightly controlled by state actors, having undergone face-lifts but remaining in their essence mass organizations? Or do they simultaneously exhibit elements of both state domination and autonomy?

The historical record of Chinese merchant associations, discussed in chapter 2, offers initial insight into the role of these new institutions. Merchant organizations in Qing China were neither wholly autonomous nor state-dominated; rather, guilds were situated between state and society, often performing, on behalf of the state, gong ("public") acts that reached well beyond guilds' commercial activities. Guilds and other associations were, on the one hand, self-regulating bodies that


had much freedom to supervise their own business activities. But, on the other hand, these organizations lacked authority to oppose the state on behalf of their private interests. The tradition of dualism was adapted to the modernizing nation-state in the twentieth century when the court created chambers of commerce designed to both unleash commercial power on behalf of China and to control a growing dynamic group. The court's attempts were in vain, for the dynasty disintegrated after 1911 and merchant organizations subsequently entered the "golden age" of merchant autonomy and political influence. The Nationalists tried once again to re-establish control over business by draining the existing organizations of their independence, co-opting many of the business elite, and re-orienting the associations toward serving state functions.

This historical dualism has been reshaped in the post-Mao context into a socialist version of state corporatism.[2] The concept of socialist corporatism introduced in chapter 1 begins with the classic state-corporatist situation. Institutionally, the state sanctions a limited number of associations, centralizes the organization, controls leadership selection and interest articulation, and retains ultimate authority. In terms of function, the state recognizes the legitimacy and limited autonomy of certain societal interests, but—with overtones of the gong realm of the Qing—coordinates them with its own interests in rapid development and regime maintenance. The concept of socialist corporatism builds on state corporatism to accommodate features of a transition from Leninism, namely, the socialist regime's efforts to pre-empt the emergence of more autonomous business groups, the devolution of limited power to groups (some of them outside the Party-state), and the context of a huge existing bureaucracy and weak societal institutions. This chapter examines the socialist-corporatist associations that link business to the state in post-Mao China.

The Growth of Economic Associations in the Post-Mao Era

In tandem with economic reforms, greater intellectual and organizational diversity have emerged in post-Mao China. Over the


past decade, and in contrast to the Maoist era, reformist officials and many intellectuals have come to argue that Chinese society is made up of different yet manageable interests, and that societally based groups should be permitted, within limits, to pursue these interests).[3] In reasoning that echoes the views of late Qing reformers, contemporary reformers have advocated granting authority to intermediate organizations in order to harness their members' expertise. While it is not claimed that merchant energies will "save China" (jiuguo ), business associations are seen as facilitators of the state's economic work. Market reforms and the growing complexity of the economy dictate that the state devolve many functions to social groups which, "free from the restrictions of departments and regions . . . are highly responsive to changes and able to meet the requirements of socialized management."[4]

Based on this rationale, professionals and intellectuals in urban China have been allowed and even encouraged to organize into "social organizations" (shetuan ) including associations, chambers of commerce, federations, societies, research units, foundations, cooperatives, and "privately run" (minban ) research institutes. By early 1988, nearly one thousand national-level groups had been formed officially across a range of fields, with eleven hundred more reportedly established between 1988 and 1989. Local-level associations also have flourished; over 100,000 had been formed by the late 1980s. The number of registered groups in Shanghai reportedly grew more than 300% between 1981 and 1984. Economic associations formed throughout the 1980s, particularly after what one report called "a nationwide campaign for horizontal association" in the mid-1980s.[5] Associations specific to the economy include those for rural marketers, specialized households, trade, export, and industrial organizations, managers in the state and collective sectors, individual entrepreneurs (getihu ), and private businesses (siying ).[6] Part of this process was the strengthening at the local levels of Mao-era


mass organizations, including the formation of 150 voluntary branch "guilds" under the All-China Federation of Industry and Commerce (ACFIC, or Gongshanglian) between 1987 and 1989, which reached a total of nearly 2,300 by early 1994.[7]

Beginning in the mid-1980s, it became de rigueur in China for these associations to describe themselves as minjian ("non-governmental"). The term minjian implies a distance from the state; on a hypothetical spectrum of state-society relations ranging from state domination to autonomous society, minjian suggests that an organization is located toward the pole of autonomy. The term distinguishes them from the mass (qunzhong ) organizations—"transmission belts'—of the Maoist era.[8] As we shall see, minjian groups have made attempts to influence the government. For example, managerial associations at times have voiced complaints about bureaucratic abuses, stimulating debate in local representative assemblies.[9] There also has been some pressure for autonomy. A Beijing ribao article argued, for example, that the state and associations should not have the relationship of "leader and led," and that state administrative organs should refrain from intervening in the internal activities of associations or transmitting administrative directives.[10]

But minjian groups are decidedly not the equivalent of autonomous Western-style interest groups, and the term does not suggest they are free from government ties. Rather, consistent with the broader rationale for pluralization of society, their "intermediary status determines that they are a bridge of relations linking the party and government with the broad masses of the people."[11] They are, moreover, to serve as "the aide of the party and government" in the economic reform effort—in other words, to take on functions with which the government itself no longer wants to be burdened. The state, accordingly, plays a central role in the establishment and management of such groups, even when such groups are not formally part of a government organization. Some organizations that have been labeled minjian in the reform era are actually revamped


mass organizations from the pre-reform era. A prime example is the ACFIC, a mass organization under the Party's United Front Department (which itself had origins in the Nationalist period). Despite their history, mass organizations have been granted significantly greater autonomy in the post-Mao era, though they are subject to the same constraints as other minjian groups.

The enthusiasm that reformers were expressing in the mid-1980s for the growth of "interest groups" and "social pluralism" was accompanied by the growth, immediately prior to and during the Tiananmen demonstrations, of what appeared to be an autonomous Chinese associational life. Examples of new organizations included the Beijing Autonomous Students' Union and the Capital Independent Workers' Union, which were founded during the 1989 protests. Similarly, the Beijing Institute for Research in the Social and Economic Sciences was founded in 1984 by Chen Ziming and Wang Juntao, both of whom had been active in the 1979 Democracy Wall movement and, later, the publication of Beijing Spring. These organizations were perceived by some to be harbingers of a second "golden age" or even of civil society.[12] Yet these liberalizing trends of the mid-1980s, along with many others, were reined in by the 1989 Tiananmen protests. The autonomous organizations proved to be highly vulnerable and failed to become enduring features of post-Mao state-society relations. The unions were crushed by the government, while the Institute saw much of its autonomy undermined subsequent to the arrests of Chen and Wang for their role in the 1989 events. Dualism—expressed in the post-Mao era as the idea that societal interests can exist legitimately but have only "relative independence" and must "adhere to the principle that the interests of the part must be subject to the interests of the whole situation and immediate interests must be subject to long-term interests"—resurfaced, and the state-linked aspect of minjian was reinforced.[13]


The official criticisms of "pluralism" signaled a concerted effort by the state to prevent the further emergence of autonomous social groups. With the drafting of laws on associations, minjian groups were required after the autumn of 1989 to register with the Social Organizations Department (Shetuansi) of the Ministry of Civil Affairs and to adhere to the department's regulations.[14] (This department actually had been formed in mid-1988 as part of broader administrative reforms, suggesting that plans to maintain a grip on social groups existed even during these groups' apparent heyday.) By law, an approved "social organization" is to be granted a monopoly in its functional area. But to register in the first place, an organization must show that no other similar organization has been approved. Perhaps the most important part of the regulations was the requirement that such organizations be affiliated with an official unit (guakao danwei ), most often a government office (to whom the organization might pay a fee and from whom it might receive some funding and staff). Affiliation with a government organization was already a fact for many of the larger minjian associations that existed prior to the promulgation of the regulations. This was the case, for example, for former mass organizations such as the ACFIC, that had long been under the jurisdiction of the State Industrial and Commercial Administration (Gongshangju). The regulations thus were designed to ensure similar restrictions on minjian organizations, regardless of their origins in either state or society.

The unstated intention of these new regulations to co-opt social groups was bolstered in the early 1990s by evidence of the government's public consideration of state corporatist arrangements in the economy. The State Commission on Reforming the Economic System (Tigaiwei) proposed in 1992 that the regulatory functions of industrial ministries be shifted to the minjian peak association in each industry.[15] The ministries would be abolished, and a new "super agency"—called the Economic and Trade Office and modeled on Japan's Ministry of International Trade and Industry (MITI)—would be left to give indirect "guidance plans." A similar proposal was made by Deputy Premier Zhu


Rongji at the 14th Party Congress later that year. While Zhu's proposal was deferred at the national level, a local version was tried out in Shanghai, where the fourteen municipal industrial bureaus were abolished and fourteen industry associations set up in their stead.[16]

These moves did not completely squelch pressure by associations for greater autonomy, and group interests sometimes have been voiced. For example, the association for entrepreneurs has called for more autonomous management of state-owned enterprises.[17] Yet with the regulations on social organizations and the active consideration of replacing ministries with corporatist economic bodies, the reform government made important steps toward initiating not civil society but socialist corporatism. We see the results of these trends carried out specifically in the foreign- and private-sector business associations.

China's Foreign-Sector Business Association (CAEFI)

The China Association for Enterprises with Foreign Investment (Zhongguo waishang touzi qiye xiehui, or CAEFI) was established in 1987.[18] After making a strong initial push for membership, the national organization claimed 15,000 enterprises as members by late 1992.[19] It has sub-associations in each province, municipality, and autonomous region, as well as local associations in provincial or municipal jurisdictions containing large numbers of foreign-funded enterprises. (In the early 1990s, these branch associations numbered forty.) Membership in the association is usually held by the enterprise itself, though individuals may join. Foreign managers may become members, but the vast majority of members are Chinese, and the association is geared heavily toward their participation. Membership appears voluntary, since there have been no signs of coercion to join. Even so, the association's leaders claim to have a fairly broad membership. For example, the Shanghai branch (which was founded in 1988) claims that


71% of the seven hundred foreign-funded enterprises that had begun operations in Shanghai as of late 1991 were members. Nationally in that year, the figure was said to be about 40% of the eligible businesses.

Like other social organizations, CAEFI treads the familiar path between state and society: it is dominated by the state in key respects, and yet manifests certain types of autonomy. In three dimensions, establishment, leadership, and functions, CAEFI and its branches are closely tied to the Chinese state, and particularly to MOFTEC. The association was formally organized and approved—"licensed," in the language of corporatism—by MOFTEC, with the support of the State Council's Leading Group on Foreign Investment, the State Planning Commission, and the (now-defunct) State Economic Commission (SEC). Local officials have been influential in founding branch associations. Government offices also have provided financial backing. Although the national association and its branches are primarily self-funding, MOFTEC allocated 300,000 yuan (approximately $58,000) to CAEFI to meet its initial costs.[20]

State personnel pervade the organizational structure. Most top leaders of the association are former high-level officials who are retired from MOFTEC or the SEC.[21] (This led one interviewee to joke that CAEFI is a "retirement home for old cadres.") The two heads were previously vice-ministers of MOFTEC and, as of 1990, ten of the fourteen standing councilors of the national association were officials (both active and retired) from bureaucracies concerned with foreign economic affairs.[22] A similar situation exists at the branch level; for example, the acting head of the Shanghai branch in the early 1990s was the retired leader of MOFTEC's Shanghai office. Prominent officials also serve as national-level advisors, as exemplified by State Councilor Gu Mu's position as "Honorary Chairman." This interlocking directorate between MOFTEC and CAEFI has the potential to institutionalize ministerial influence within the association. An interlocking structure also exists among associations. For example, a CAEFI vice-chair, Ma Yi, is also a


vice-chair of the ACFIC, as well as a former SEC advisor. The state's influence in personnel reaches into the middle ranges as well. Both central and local governments are obliged to "support and assist the associations by providing the necessary personnel," though the association should also recruit its own personnel.[23] The middle-level staff is not always professionally qualified, however, as officers frequently have been assigned from related or even unrelated government bureaus (as in the case of one deputy director transferred from an office that oversees prisons), based on guanxi or as a reward for past work.

There is a hierarchical relationship between the national association, located in Beijing, and the branches. The position of the national organization was in fact strengthened when the original 1987 constitution was revised in 1990 to state that the sub-associations would be "directed by" the national association.[24] Echoing tensions that are rife in central-local fiscal relations, the effort to strengthen the national bureau may have been precipitated by difficulties in collecting what it argues is its share of membership dues from branches.[25]

The functional ties between CAEFI and the government are extremely close, and continue the pattern of state domination. The association's original constitution specifies that two of its main functions are "to implement the government policies, laws and provisions" relating to the open policy, and "to publicize the governmental policies" on foreign enterprises (Article 4). The goal of transmitting information from the government is reflected in the publications of local branches. The Shanghai and Guangzhou branch journals, for example, devote much space to reprinting laws concerning the operations of foreign-invested enterprises. CAEFI's leaders also have endorsed traditional methods of social control, including ideological and political work.[26] Suggesting close links, too, are the familiar ways in which association officials depict CAEFI's relationship with the government. While calling CAEFI minjian , its leaders (often in the same breath) described the association as a "bridge between enterprises and government," a "braid" in which the government and foreign-invested enterprises are intertwined, or the joining together of state and people (guan min hejie ).[27] At times, though, the state's strand of the "braid" is depicted negatively as dom-


inating association activities. Even the former MOFTEC official who heads the national office complained that, while the association receives virtually no funding from the government, the government nonetheless tries to control it ("zhengfu bu yang women danshi yao guan women ").

Toward what common end are CAEFI and the government supposed to cooperate, then? They are to work together to create an environment favorable to foreign investment. This can be achieved if the association passes information from the government to member enterprises, and transmits data, suggestions, and complaints from the member firms up to MOFTEC and other relevant ministries. As Wei Yuming suggested, "The association should cooperate with the relevant departments of the government to make thorough investigation and study of the causes, and put forward solutions and proposals, to help those enterprises that have troubles."[28] The association also is charged with carrying out activities that the government feels it should or can no longer perform as a result of economic reforms. Reflecting the rationale voiced for all post-Mao associations, an official of the Shanghai branch explained that foreign-funded enterprises "have met problems [but] it is inconvenient for government organizations to coordinate these things." So the association is to step in to do so, in effect allowing the state to capture the benefits of the efforts of a semi-autonomous group.[29] In addition to helping solve problems between foreign-invested enterprises and the government, the association has assumed the post-1949 government's tradition of giving citations to model enterprises; it annually commends enterprises that meet the state's goals for foreign investment, i.e., those that have high export earnings and profits.[30] CAEFI and the government are also to coordinate their actions and share expenses in defending themselves against foreign governments' accusations of dumping and of protectionism by member firms and, by extension, by China, though such activities were not well organized as of the early 1990s.[31] As this latter example suggests, the formal functional line between the association and MOFTEC is not always clear, a fact acknowledged by the Shanghai branch head. In short, CAEFI and its branches—established, officially sanctioned, and licensed by the government, run with the involvement of former or active foreign trade officials, and charged


with helping the state implement, promote, and improve China's investment policies—have strong ties to, and in some respects are controlled by, the state.[32]

Reflecting these ties with the state, CAEFI is identified with government offices in the minds of many foreign-sector managers. Although some have never heard of it, and others confuse it with FESCO or MOFTEC's Foreign Investment Association (both of which are unambiguously government offices), those who have heard of CAEFI and know its status as an association perceive it to be primarily a government-linked organization. At the same time, consistent with the belief (discussed in chapter 4) that formal means for influencing the government do not exist, most do not consider CAEFI to be a serious channel in which to put forth suggestions or have complaints redressed. Although they have not done so, a few interviewees reported that they would consider trying to use the association to solve problems because CAEFI leaders often are former officials or have close ties to the government. They see such ties as the crucial means by which CAEFI can influence officials on behalf of its members. Also consistent and expected are their reports that they would use CAEFI to redress only narrow business problems.

The association is not wholly state-dominated in the tradition of mass organizations. In contrast to the views of most of those whom the association is to represent, its leaders often emphasize the autonomy implied in the term minjian and reinforce the claim that CAEFI is "non-governmental" by pointing out that the members join voluntarily and that the organization supports itself primarily through membership fees. (Annual dues amounted to about 1,000 yuan [$200] in the early 1990s.) The government leaves the association a fair amount of discretion in its area of functional expertise. Many of its activities are geared toward helping foreign-invested enterprises, individually or as a group, solve problems or meet business goals. For example, CAEFI promotes business activities by organizing exhibitions in China and abroad, much as chambers of commerce do elsewhere. CAEFI also sets up permanent marketing points for member companies, and trains Chinese managers and staff; in late 1992 it set up a service center to provide information to foreign investors.[33] Its leaders also hope to engage in more fee-based consulting to investors. Taking seriously its charge to improve the envi-


ronment for foreign investors, it tries to help member businesses solve problems involving the government bureaucracy. Such assistance often involves minor problems, such as coordinating the installation of telephone lines.

CAEFI is involved in the resolution of more important issues as well. For example, it has facilitated arbitration over disputes among member enterprises. A branch may also arrange for the local MOFERT bureau to help members coordinate with other government offices, such as customs and foreign exchange bureaus. It serves further as a representative to officials on behalf of joint ventures and wholly foreign-owned enterprises. As the Shanghai branch leader said, "Foreign-funded enterprises may have a conflict with the government enterprises themselves, and so we need non-governmental organizations to speak on their behalf." Toward this end, CAEFI claims to pass complaints of members upward to relevant governmental authorities, and holds seminars or retreats at which managers may question officials directly about policies. The Guangzhou branch, for example, holds three or four meetings a year with government officials to try to solve the problems of its members.

In the course of helping foreign-invested enterprises solve their problems, CAEFI is, of course, helping the government achieve one of the government's goals; it is wholly consistent that a state which wishes to promote foreign investment—and recognizes that bureaucratism is a major disincentive—allows a semi-autonomous organization to help sort out investors' problems. But CAEFI's actions have gone beyond helping firms troubleshoot. It has occasionally criticized government policy through the business press. For example, the secretary-general of CAEFI in 1994 called for the government to cede its monopoly on exporting agricultural products and to allow participation by foreign investors. He further lent support to the government's efforts to allow foreign banks to engage in currency transactions and open more branches in Chinese cities.[34] Moreover, on issues involving disputes between foreign-sector enterprises and government officials or regulations, CAEFI has on occasion taken up positions against existing policy or the decisions of government officials. Such opposition, even if gentle, clearly distinguishes this post-Mao association from mass organizations of the Maoist era.

Directors from the national office and local branches offered illustrations of how the association has intervened on behalf of enterprises.


The Beijing branch pressed the Beijing municipal government to standardize the issuance of visas, for Chinese managers working in foreign enterprises, to travel overseas on business. This was a response to complaints of members that they lose precious business opportunities overseas while waiting for a business visa to be issued. The Shenzhen branch complained to local authorities that an anti-pornography campaign, which aimed to shut down all sauna houses, was too sweeping, for it closed legitimate businesses as well as those linked with prostitution. The national association also intervened when the parent (local ministerial) office of the Chinese partner to a Hubei Province joint venture tried to fire the Chinese general manager by going over the head of the supposedly autonomous board of directors. The manager was reinstated. The Shanghai branch strongly lobbied on behalf of its members against a new rule, promulgated by the State Administration for Exchange Control (SAEC), requiring foreign-invested businesses to report to it any transaction that earned foreign exchange soon after it transpired. The branch successfully lobbied the central SAEC office to require only quarterly reports of transactions, and only transactions over a minimum amount. CAEFI reported to the Jiangxi provincial government that components produced by a member business in Guangdong Province were not being allowed to be shipped through Jiangxi to Shanghai; a joint investigation between the association and the Jiangxi government ensued. The Guangzhou municipal branch also coordinated the settlement of a dispute between the local public security bureau and a Hong Kong businessman whom the bureau had illegally detained and arrested.

There is no guarantee that government officials will respond to complaints articulated by CAEFI, and it is not clear if the association was successful in the cases of the Shenzhen sauna houses or the Jiangxi shipments. Yet the success of the lobbying effort in cases involving the business visas, the change of the SAEC rule, the jailing of the Hong Kong businessman, and the reinstatement of the general manager—all of which involved sensitive issues—demonstrates that CAEFI has been able to effect some influence on officials on behalf of its members. Although it is by no means impossible that the state organs would have made changes at their own initiative, it is unlikely that they would have suppressed their own rules absent the outside pressure. It also should be noted that, in most of the examples, the association (particularly the branches) was pressing for rule changes by local rather than central officials. The focus on action at the local level reflects in part the fact that much of the interference in foreign enterprises is made by local govern-


ments. It also suggests that attempts at influence are made more often, or are more successful, at the local level.

CAEFI intended in 1991 to press for further autonomy. The revisions made to its charter in 1990 attempted to institutionalize further the concept that the organization is "non-governmental," and to downplay (though by no means eliminate) its work on behalf of the state. New articles replaced a commitment "to explain requirements and objectives of the national development plans" to members, a role which was felt to be too onerous, with a commitment merely to "introduce" the investment environment and to "provide information" for foreign businesses. Other new language explicitly guaranteed the right of members to withdraw from the association.[35] These and other constitutional changes were made at the prompting of branches, again suggesting that the strongest impetus for further autonomy may come from the local level. Some association leaders also seemed anxious to redefine their organizations' tasks on a more Western model, as indicated by one branch leader's comment that "we intend to change this association toward a kind of chamber of commerce as you have in foreign countries." Both he and a key figure in the national association requested that they be sent materials on American chambers of commerce and business associations.

In these ways CAEFI's experience reflects the elements of limited autonomy that are accommodated in the concept of socialist corporatism. CAEFI enjoys some autonomy in its realm of expertise. Its efforts to change certain government regulations show in particular that it has been able to exercise a degree of independence on the basis of its claim to protect the legitimate interests of the foreign sector. Its very establishment outside of the state structure signifies an effort by the government to devolve power away from its own organs to more functionally specific and competent organs with some basis in a societal constituency.

Yet these promising signs of autonomy and dynamism from the early 1990s, while real, are only part of the story. The limits on CAEFI's autonomy are brought into relief by the recognition that it does not engage in a number of the types of activities that its guild predecessors in the "golden age" did, notably the overt political activism that challenged the government and led to boycotts of foreign goods. Nor does CAEFI's role as an independent advocacy group appear to be deepening over time. Although foreign-sector managers interviewed in 1995


identified the association correctly more often, they continued to feel that it was state-dominated and at the same time unimportant as a channel for helping them resolve problems. They stated regularly that they had no time to participate in such an association, an attitude further suggesting the irrelevance of CAEFI to their lives, i.e., its weak institutionalization. Personal ties to officials remain the most important channel for solving problems involving government rules.

Thus, it is clear that, although the state does not wholly dominate CAEFI, the state's intention is to remain heavily involved. It fits the criteria central to the concept of socialist corporatism, to wit: (1) the state has sanctioned and established this functionally based association and its branches; (2) the state has granted CAEFI a near-monopoly such that it approximates a singular "peak" association—there is only one national association in the foreign sector, and each locality has only one branch;[36] (3) a clear hierarchy exists between the national association and local branches, with the predominance of the former being even further strengthened in 1990; (4) officials, often from high levels, constitute the leadership and have a role in setting the agenda; (5) many members believe they may only raise narrow complaints, and the officials are elected to leadership positions unanimously, suggesting an implicit agreement that members will observe certain controls on the articulation of demands.[37]

All these controls play a regime-maintenance function, moreover, for they help to stabilize the role of the socialist state at a time of rapid economic and social transition. Corporatist controls are further designed to foster cooperation by the foreign sector in meeting the regime's goals of economic development without threatening systemic change. The state's formation and oversight of CAEFI is an effort to pre-empt the rise of independent organizations representing new social forces. The fact that many of the association's branches (such as in Tianjin and Henan) were established after the 1989 Tiananmen events also suggests an effort to co-opt potentially disruptive social forces at the local level. In many ways these moves are reminiscent of the imperial court's 1904


call for the formation of chambers of commerce. Also reminiscent of that earlier period is the fact that these institutions are as of yet not taken very seriously by foreign-sector managers; the state-corporatist intentions of the central government appear to be only weakly realized.

The Business Associations for Private Entrepreneurs: ACFIC and SELA

Support for the existence of a socialist corporatism framework outside the foreign sector is found in studies of the association for large siying entrepreneurs, the All-China Federation of Industry and Commerce (ACFIC). As noted in chapter 2, the ACFIC was formed as a mass organization for former capitalists under the Party's United Front Department. In the reform era, it is intended to represent the private sector's business elite. Significant steps have been taken to remake the ACFIC into a minjian organization along lines similar to CAEFI. Its revised constitution makes no formal acknowledgment of any ties to the Party, and instead the ubiquitous "bridge" metaphor appears.[38] It has been given a second, less ominous sounding name, the National Non-Governmental Chamber of Commerce.[39] Although, historically, state-owned enterprises could be members, none have been permitted to join since the mid-1980s, and the membership has focused primarily on private enterprises. As with CAEFI, among its main tasks are protecting the interests of members, helping members improve quality and standards, providing education, and the like.[40] It also runs its own enterprises in many regions of the country, including technology and glass companies.[41] During the 1980s, moreover, the ACFIC became vocal on behalf of private enterprises. For example, in a report to the State Council the federation called for protection of private enterprises, and for freedom from harassment by local officials in the wake of the 1988 austerity program and Tiananmen. It has also called on the government to


establish private banks to provide capital to individual businesses. The federation's local branches also have lobbied on behalf of its members. In Tianjin, for example, the district branch reported that it has tried to locate sources of credit for its members and to negotiate lower rates for municipal services.[42]

But as expected, there remain important elements of state control. Beyond its historical links to the Party, the top leaders of the federation continue to be former or active government officials. China's most famous reformed capitalist, Rong Yiren, served as chair of the federation at the same time that he was vice-chair of the NPC Standing Committee in the early 1990s. Wang Guangying, the brother-in-law of Liu Shaoqi, followed Rong in both those positions in 1993.[43] The federation receives a substantial amount of funding from government sources.[44] It takes as a main task the education of members about relevant policies, including tax laws and corruption, both serious concerns of the government with respect to private business. Indeed, these and other tasks designed to coordinate the work of the private sector with the state's goals are reported to have been designated by the Party Central Committee, and to have been communicated through its old controlling body, the United Front Work Department.[45]

The actual influence of ACFIC appears to be similar to that of CAEFI. Although the Tianjin branch has apparently been successful at helping private businesses gain access to municipal services and credit, the federation often does so based on personal and former institutional connections of its officials.[46] At the same time, members of the business elite who had reason to be involved with the federation claimed that its work was not particularly important or influential, either for them or for the private sector as a whole.

The finding of dualism in the activity of the business associations of the foreign and private business elite sets an outer limit on the extent to which we might expect to find autonomous associations more general-


ly in post-Mao China. Given the corporatist constraints on the foreign- and private-sector associations, it is unlikely that associations in other, less independent, sectors will be able to build an independent associational realm. Consistent with this expectation, studies of associations in other areas of the economy suggest that certain aspects of socialist corporatism are being replicated for other groups, and yet these associations have even stronger ties to the state.

A key example is the association for the non-elite members of the private business class, geti entrepreneurs. Like the constitutions of the ACFIC and CAEFI, the 1986 constitution of the Self-Employed Laborers Association (SELA) stresses dual control and advocacy functions. Much like its counterparts, SELA is supposed to perform minor advocacy functions, to protect the "legitimate" (i.e., state-sanctioned) rights and interests of entrepreneurs against arbitrary officials, to help solve problems of individual businesses, and to represent their opinions and demands to higher levels.[47] SELA draws on personal connections of its officers to do so.[48] On the other hand, it too was set up and licensed by the government and is under fairly strict control of and co-optation by its superior organ, the Industry and Commerce Bureau (Gongshangju). Government organs provide many of the association's top personnel.

SELA has some significant differences from the other two associations discussed here, differences that push the association in the direction of much greater state control. The SELA constitution fails to use the term minjian. It states directly that it is a mass organization under the "leadership" (lingdao ) of the Party and government and receives the guidance (zhidao ) of the Industry and Commerce Bureau.[49] In at least one location, Beijing, it has worked in conjunction with the local Communist Youth League branch to coordinate CYL work among geti entrepreneurs,[50] Three-quarters of its funding comes from its supervising


bureau—a much higher figure than for CAEFI.[51] Membership appears to be compulsory, since entrepreneurs are forced to join at the point of registering their businesses with the local government.[52] To the degree that there is activism it is found within the local branches; yet it appears that the SELA is in fact much less vigorous about promoting its members' interests than are the ACFIC branches (particularly at the district level). For example, one study finds that rather than addressing the genuine problems of its members (problems such as competition from unlicensed vendors) the Tianjin branch organized several trips abroad for members to develop business contacts, even though "the vast majority of small-scale entrepreneurs . . . are far too parochial for foreign contacts to be of any use."[53] This irrelevance is surely one of the reasons its members "hold the organization in very low regard. Further, if faced with any kind of business problem, . . . [they indicated that it] would be the last place they would go for help."[54]

The fact that SELA is in the jurisdiction of the Industry and Commerce Bureau and does not consider itself minjian seems to place it at the outer edge of China's socialist corporatism. This higher degree of state control when compared to CAEFI and the ACFIC makes policy sense from the perspective of the central and municipal governments. Although the geti entrepreneurs who make up the SELA membership provide a useful economic function of providing consumer services, the geti sector arguably serves an even more important function of alleviating unemployment among those who might otherwise generate social unrest. SELA's effort to control this potentially dangerous group (through compulsory membership, for example) is a logical extension of the social control function of the sector itself. SELA's unique character also suggests an effort by the state to tailor its new institutions according to different needs.

The comparison of these three associations, CAEFI, ACFIC, and SELA, highlights an important point: socialist corporatism does not exist uniformly in all business sectors. One key difference between these associations concerns how close the formal ties of the organization to the state are, as illustrated at one extreme by CAEFI's relatively greater


(but incomplete) organizational autonomy, and at the other extreme by SELA's explicit subordination to the Gongshangju. A related difference is the degree of activism—ranging from non-existent to moderate—by local branches on behalf of its members. Indeed, the state likely considers greater autonomy necessary for CAEFI and ACFIC if they are to fulfill a primary goal for foreign and larger private enterprises, namely, to be an important force for modernization. Greater activism on behalf of their constituencies makes sense in light of this goal. In contrast, the control function associated with small entrepreneurs (SELA) limits the need and desirability for them to have even the limited independence of CAEFI and ACFIC.

Despite the lack of uniformity, there are sufficiently similar characteristics to consider them all part of a new socialist corporatist strategy. Reflecting the core features of socialist corporatism, they each have the dual task of serving both control and co-optation functions, on the one hand, and advocacy for newly legitimized interests, on the other. Proposals to expand corporatist institutions to cover ministries, in conjunction with the transformation of existing mass organizations and the establishment of functional associations, also suggest that the state intends corporatism to be a part of the evolving picture of state-society relations in post-Mao China.

Yet evidence from the foreign and private sectors suggests that the socialist corporatist institutions are not especially effective, at least as of yet. Despite some evidence of determined activism by association officials at the local levels, neither foreign-sector managers nor private entrepreneurs feel that, on balance, these associations are very effective advocates. Rather, what is useful to these members of the business elite is the vertical, informal clientelism embedded in these associations. Local associations may press through formal channels against the state, but entrepreneurs are right to perceive them as channels through which entrepreneurs can develop or draw on existing guanxi. Thus, although socialist corporatism is a crucial element of a rather complex picture of state-society relations in post-Mao China, the whole of state-society relations cannot be understood through the corporatist prism alone. Socialist corporatism operates in tandem with clientelism. The hybrid quality of post-Mao relations between state and society is explored further in the concluding chapter.


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