The Role of Local Governments in China's Foreign Policy Process

EAI China Research Panel Report No. 9

Author

Shin Jong-ho (申鍾浩)_Research Fellow, Strategic Research Center, Gyeonggi Research Institute. Graduated from the Department of Chinese Language and Literature and the Graduate School of East Asian Studies, Department of Chinese Studies at Hanyang University, and obtained a Ph.D. in International Politics from Peking University. He has served as a legislative researcher in the Foreign Affairs and National Security Team at the National Assembly Research Service (NARS) and as an adjunct professor in the Department of Chinese Studies at Hanyang University's Graduate School of International Studies. His main research areas are Chinese foreign policy and East Asian international relations. Recent research achievements include "Sino-US Relations and the Taiwan Issue After the Global Financial Crisis" (2013), "The 18th National Congress of the Communist Party of China and Prospects for China's Foreign Policy" (2012), "Korea-China Relations 2.0: From National to Local Governments" (co-authored, 2012), and "China's International Crisis Management Behavior and Implications for US-China Relations" (2010), among others.

Abstract

The influence of local governments in China's foreign policy process is steadily increasing. Since the reform and opening-up, as power has been decentralized from the central to local levels, local governments have become one of the diverse stakeholders involved in foreign policy decision-making, and by generating regional interests, they have ultimately contributed significantly to national development. In the process of pursuing foreign policy, Chinese local governments have acted as agents and cooperative partners of the central government, and have secured relatively greater autonomy from the center in the field of economic diplomacy. In particular, local governments in China have become a foundation for the political growth of next-generation leaders. Thus, the pursuit of foreign activities by local governments contributes to the diversification and decentralization trends in China's foreign policy. However, due to the fact that foreign affairs are constitutionally an exclusive domain of the central government, and that foreign affairs fundamentally maintain the central government's leadership relationship with local governments, the foreign affairs of local governments can still be said to have only 'limited authority.' Nevertheless, the role of local governments in China's foreign policy will be strengthened in more diverse forms. This is because, due to the rapidly changing global environment and the emergence of China's domestic socio-economic issues, local governments, which possess faster policy-making systems than the central government, will play a role as relatively independent interest entities with greater autonomy. Therefore, it is projected that in the future, China will utilize local governments as agents or cooperative partners of the central government under the leadership of the central government in the realm of 'high politics' such as sovereignty or territorial issues, while ensuring relative independence and autonomy for local governments in the realm of 'low politics' such as economy, society, and culture.

I. Introduction

Historically, the actors that have most significantly influenced China's foreign policy process have been the Communist Party, various ministries and commissions of the State Council, and the People's Liberation Army. However, in recent years, the roles of new actors such as corporations, civil society, netizens, and think tanks, in addition to the Party, government, and military, have been steadily increasing in the foreign policy process. In particular, as power has been extensively and comprehensively devolved from higher to lower levels of government (or from the center to the localities) since the reform and opening-up, the influence of local governments on foreign policy has been growing.

Although China is traditionally a country with a strong tradition of central authority, since the reform and opening-up, the policy of decentralizing power and authority held by the center to the localities has increased opportunities for local governments to engage in foreign affairs, and naturally, local governments have begun to influence the central government's foreign policy. Chinese local governments have not only actively promoted economic and trade activities in their respective regions on the international stage but have also taken the lead in attracting foreign tourists, foreign direct investment (FDI), and inter-city social and cultural exchanges, thereby enhancing the internationalization of their respective regions while also contributing to the expansion of national interests and the enhancement of national image. In particular, provincial-level local governments, possessing control over the allocation of their own resources, have been able to act as relatively independent interest entities in their foreign activities. While there are still many foreign affairs that require the central government to take the lead in China, in fields such as economic diplomacy and cultural diplomacy, it has become much more efficient for provincial governments to pursue them.

The foreign activities of local governments in China serve as a prime example of 'non-central diplomacy,' and are the closest concept to 'sub-national

government' as understood in the West. As 'sub-national governments,' Chinese local governments possess a certain level of economic and political power

and, at the same time, have faster policy-making systems than the central government, thus leading the phenomenon of 'localization of foreign policy.'

This article analyzes how and in what ways local governments are playing a role in China's foreign policy process. Specifically, it examines whether local governments in China act as agents of the central government's foreign policy or if they represent local interests with greater autonomy. To this end, it first examines the types of foreign activities undertaken by local governments in the context of China's central-local relations and decentralization process, as well as the foreign affairs organizations of local governments. It then attempts to categorize the roles played by local governments in China's foreign policy through specific case studies.

II. China's Decentralization and Types of Local Government Foreign Activities

 

1. Central-Local Relations and Decentralization

From 1949 to 1978, during the Mao Zedong era, China adopted a Soviet-style planned economy and implemented socialist reforms in agriculture, industry, and handicrafts, resulting in centralized and uniform policy-making and implementation. However, following the decision to pursue the policy of reform and opening-up in December 1978, China has pursued a strong decentralization strategy to revitalize the national economy and enhance regional competitiveness. In this process, the central government granted local governments a certain degree of autonomy to achieve national development goals, which in turn led to an expansion of the powers and roles of local governments. The gradual and comprehensive expansion and development of China's opening-up policy along the lines of 'point-line-surface' was, in reality, a process of granting a considerable degree of autonomy to the respective local governments. The central government provided incentives to local governments through 'devolution of power and concession of profits' to enhance economic efficiency, and also transferred policy-making authority in various sectors, including fiscal and personnel management, to local governments.

Following the decentralization policy centered on fiscal authority, which occurred until the early 1990s after the reform and opening-up, China's central government faced issues such as the loss of fiscal control. Consequently, from the mid-1990s onwards, China emphasized the importance of cooperation between the central and local governments to resolve regional development disparities, along with strengthening central government control through the reorganization of central-local relations. First, the central government strengthened its control over the entire national economy by establishing various legal authorities and institutional norms while ensuring a certain degree of autonomy for local governments. In this process, the Chinese government also exhibited a tendency towards 'soft centralization,' such as establishing various regulatory departments at the provincial government level to prevent the negative consequences of decentralization, like local protectionism, and to ensure stable policy implementation.

In the process of economic development since the reform and opening-up, Chinese local governments have gradually moved away from their role as agents executing central policies at the local level under the unified command and control of the center. In particular, provincial governments have secured numerous independent decision-making powers related to regional development. Local governments have transformed into key actors in deciding and implementing major policies during the process of promoting regional development policies. The central government, in particular, requires the active cooperation and coordination of local governments to achieve the strategic goal of balanced regional development, thus the uniqueness and autonomy of local governments in the process of regional economic development have been continuously expanding.

As such, China's central-local relations during the reform period exhibit both conflictual aspects arising from the existing vertical superior-subordinate relationship and cooperative aspects stemming from the common interests of the center and localities in achieving national development strategic goals. Therefore, it can be described as a complex and interdependent relationship where 'centralization' and 'decentralization' coexist, rather than a simple 'zero-sum' game. This is also evident in the foreign activities of local governments...(continued)