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Domestic reform and global integration: public administration reform in

China over the last 30 years
Lan Xue and Kaibin Zhong
International Review of Administrative Sciences 2012 78: 284
DOI: 10.1177/0020852312438784

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 International
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International Review of
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78(2) 284–304
Domestic reform and global ! The Author(s) 2012
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DOI: 10.1177/0020852312438784
reform in China over the last ras.sagepub.com
30 years
Lan Xue
School of Public Policy and Management, Tsinghua University

Kaibin Zhong
National Institute of Emergency Management, Chinese Academy
of Governance

Abstract
This article tries to depict China’s public administration reform as an interactive process
between two major themes, domestic reform and global integration. The development
and implementation of public administration reforms in China from 1978 to 2008 are
reviewed. The driving forces shaping the process of public administration reform in
China are analyzed, using a territorial locus (domestic/international) – policy dimension
(supply-side/demand-side) analytical framework. Our analysis suggests that the
public administration reforms over the past few decades have demonstrated the
Chinese government’s intention to advance the government’s transition from an
economic-centered state to a people-oriented one. While much progress has been
made, there are many issues that remain to be resolved by the new generation of
leadership in China.

Points for practitioners

This article aims to contribute to the discussion about the process of China’s
public administration reform over the past three decades since late 1978 – the
reform-and-open up years. In China’s public administration reform, the transition of
the economic system from a planned economy to a socialist market economy has
become the most important driving force, which is coupled with the transformation
from a public administration system based on personal will and charisma to one that is
increasingly based on rule of law. At the same time, the influence of other countries has
also played an important role in today’s globalized environment. China has learned a great

Corresponding author:
Kaibin Zhong, National Institute of Emergency Management (NIEM), No. 6, Changchunqiao Street, Haidian
District, Beijing, 100089, China
Email: zhongkb@nsa.gov.cn

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Xue and Zhong 285

deal from international experiences in public administration reform. The entry into the
WTO has also provided a strong impetus for China to integrate with global public admin-
istrative practice. So, China’s public administration system has always actively engaged in a
transformative process characterized by domestic reform and global integration.

Keywords
civil service, functional transformation, global trends in administrative reforms,
government organizational restructuring, public administration reform, reform in China

1. Introduction
The great achievement of China’s economic reform over the past three decades
has been recognized as a miracle in the history of human economic development
(Lin et al., 2003). Most of the analysis of this miracle has been on the economic
front, yet the reform of the public administration system has often been neglected.
While this transformation is far from complete, it has played a major role in
facilitating economic and social development, and has increasingly become an
important end in itself. At the same time, reform of the public administration
system has also benefited greatly from the rapid economic development. The inter-
action between economic reform and public administration reform has actually
characterized the entire reform and development process over the past 30 years.
The fact that public administration reform was left unnoticed was not by acci-
dent. Until the early 2000s, the top priority of the Chinese government was eco-
nomic development and many public administration reform measures were either
bundled with economic reform or were perceived as measures to enhance economic
development. In addition, the essence of many public administration reforms is
also focused on changing the economic incentive regimes. Most of these reforms,
such as the rural household contract responsibility system, enterprise contract
management responsibility system, contract system on fiscal revenue and expend-
iture, were Pareto improvements and relatively easy to implement and accepted by
all participants. However, since the mid-1990s, Pareto improvements have been
increasingly harder to achieve as the easy reforms had already been carried out.
What have been left are the more complex and difficult ones that require careful
analysis and tough choices. For example, considering the large population and
undeveloped economy, how can affordable housing, medical service, and educa-
tional services be provided? How can regional disparities be addressed without
having to tax too much those regions that have experienced high economic
growth? Further, along with economic prosperity and openness, there is an increas-
ing demand for government transparency and accountability from the general
public, who have become increasingly diversified in terms of their interests and
value preferences. They want more channels to express their opinions in the public
policy process. How to balance the different interests of these groups has become a
great challenge in any policy development. Finally, Chinese society has been greatly
intertwined with the global community which has also introduced pressures both

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286 International Review of Administrative Sciences 78(2)

from within and outside for further government reform so as to bring the Chinese
public management practice on a par with their international peers.
As a result, the priority of China’s reform has already quietly begun to shift
from being mainly focused on economic incentive regime to explicitly include
public administration reforms as well. Similar to China’s economic reform, many
of the public administration reforms have been tried and carried out gradually and
at different levels. To analyze the evolution of China’s public administration reform
in a comprehensive way would be very difficult. This article tries to depict this
fundamental change in a more systematic way and analyze the driving forces
behind this change. Limitations and implications of this change will also be
discussed. Hopefully, this will generate further interest in research into this area.
The rest of this article is organized as follows: in Section 2, we will provide a
brief review of the relevant literature and propose a framework for analyzing the
public administration reforms in China from 1978 to 2008. In Section 3, we will
analyze the six rounds of major public administration reforms based on the frame-
work. The driving forces of these reforms will also be analyzed in Section 4. In
Section 5, the limitations of the six rounds of China’s public administration reform
have been addressed. Section 6 concludes the article.

2. Literature review and the framework of analysis

The contemporary public administration system in China was established after the
founding of the People’s Republic of China (PRC) in 1949, following the Russian
model with a high concentration of authority at the top to accommodate the cen-
trally planned economy. While there were many reforms in the system from 1949 to
1978, they were not intended to nor did they actually change the bureaucracy and
its behavior in any substantive way.
After the devastating ‘Cultural Revolution’, China entered into a new era of
great social transformation in late 1978 – the reform-and-open up years. Over the
last 30 years, six rounds of public administration reforms have been carried out in
1982, 1988, 1993, 1998, 2003, and 2008, with much broader mandates aimed at
improving bureaucratic efficiency, flexibility and innovation. Those changes had
been necessitated by China’s transition from a planned to a market economy,
and the subsequent changes needed in the governance system reform in light of
economic development, internationalization, and social changes (Zheng, 2004).
Most of the literature has been focused on these sets of reforms.

2.1. General review

Since the early 1980s, public administration reform has become one of the points of
focus of each major term of the National People’s Congress (NPC), though the
changes that were finally announced usually turned out to be much less drastic
than expected. At the same time, research on public administration reform has
become a hot topic among Chinese scholars, particularly when a new round of the

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Xue and Zhong 287

public administration system is initiated at the central level (Morgan, 2003;

Y.K. Wang, 1998; Zhou, 1996). Some scholars have focused on certain aspects of
this reform process, such as the instititutional reform (Brodsgaard, 2002), down-
sizing of government (Chan, 2000) and central–local government relationships
(Yang, 2001). Others have focused on government reform at the local level, such
as in Shunde County in Guangdong during the 1990s (Caulfield, 2006; Li, 2004).
More recently, people have begun to examine the historical background, para-
digm transformation and driving forces for public administration reform since the
1980s. For example, Zhang and Zhang (2005) investigated the development and
problems of the first four rounds of public administration reform in China, and
concluded that Chinese public administration reform needs to begin with reflection
and critique of the traditional state–center governance paradigm to establish a new
citizen–center governance paradigm that conforms to the changing society in the
twenty-first century. When the sixth round of public administration reform was
initiated in 2008, which coincided with the thirtieth anniversary of the reform and
opening-up era, many studies have addressed the ongoing process of the six rounds
of public administration reform in China from a historic perspective (for example,
L.M. Wang, 2009; Y.K. Wang, 2009; Zhang, 2009).
In addition, there has been growing interest in understanding public adminis-
tration reform in China from a comparative perspective (for example, Straussman
and Zhang, 2001; Zhang, 2006, 2009; Zhang and Straussman, 2003; Zhang and
Zhang, 2005). However, compared with the abundant scholarly efforts in the
field of public administration reform in Western advanced democracies, the
mainstream public administration literature has paid little attention to public
administration reform in socialist countries in general, and to those of China in
particular (Zagreb Office, 2004).

2.2. Key elements of public administration reform

It has been claimed that ‘public administration has no generally accepted definition’,
because the ‘scope of the subject is so great and so debatable that it is easier to
explain than define’ (Kernaghan, 2010). Similarly, it is also too complicated to
agree on a single definition of public administration reform. In reality, public admin-
istration reform can be quite comprehensive, including process changes in areas such
as organizational structures, personnel management, public finance, results-based
management, regulatory reforms and revision of the civil service statute.
This article will focus on the following four aspects of the public administration
reform process in central government that we believe are the essential elements that
can reflect the progress of public administration reform in China since the
late 1970s.

Government function. Government function refers to any activity to implement public

policy through the provision of public goods and services or the transfer of income,
primarily supported by compulsory levies on other activities (Croce, 2002).

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288 International Review of Administrative Sciences 78(2)

It changes from time to time along with the economic and social development of the
society. The World Bank (1997) pointed out that the profound development of the
global economy urged us to reconsider some fundamental issues of government,
such as, what is the core purpose or function of the government? What can it do,
what can it not do and what is the best way to do these things? These questions have
been raised again and again in China’s public administration reforms.

Organizational structure. Organizational structure refers to the pattern of hierarchy

that reflects the proper distribution of functions and duties and the linkages among
different units that ensure proper coordination to achieve the final goal. The organ-
izational structure of the government generally includes the reporting lines and
accountability arrangements for ministries, departments, and other organizational
units. In China’s case, organizational structure has undergone many changes each
time there is a public administration reform.

Personnel management. Personnel management means recognizing, developing

and effectively utilizing human resources while advantageously designing and
implementing change – for the person’s and the government’s success. To build a
capable civil service system is a central feature of almost all public administration
reform programs. In China’s case, the task was even more daunting since China
did not have a civil service system when the reform and opening-up started in the
late 1970s.

Operations management. Operations management means realizing organizational

goals and objectives through business processes. With the rapid development of
information technology, the past several decades have witnessed the significant
improvement of public services and simplification of operational procedures
through e-government. Using the tools of e-government, public managers shift
from emphasizing producer concerns, such as cost-efficiency, to focusing on user
satisfaction and control, flexibility in service delivery, and network management
with internal and external parties (Ho, 2002).

2.3. Driving forces of public administration reform

Many studies have found various external and internal driving forces that explain
public administration reforms at the national and global levels. For example,
Kamarck (2001: 232) indicated four major driving forces in the global waves of
public administration reform: global economic competition, democratization, the
information revolution, and the performance deficit. Cheung (2005) explained that
public administration reform is influenced by a combination of factors, such as the
innate influence of national administrative traditions, political evolutions arising
from decolonization, democratization and nation-building, and global trends in
administrative reform and government reinvention.

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Xue and Zhong 289

By tracing administrative reforms in Asia, Cheung (2005) has provided two

modes of explanation from the supply–demand perspective. A supply-side explan-
ation of administrative reform rests on the claim that certain ideas and practices
proving to be effective are being spread or ‘exported’ by reform pioneers and
leaders to the follower/learner/imitator countries. A demand-side explanation
claims that the reason why countries adopt or borrow certain reform strategies
and models depends on both the normative appeal of such strategies and models as
well as the reform agenda-setting process conditioned by national needs and
political demands. Meanwhile, a domestic–international perspective is also often
used by scholars to explain public administration reform, focusing on the relative
significance of domestic political and institutional forces on the one hand and
international exchange and diffusion on the other (Stolk and Wegrich, 2008).
To provide a conceptual framework within which to cluster a range of diverse
evidence to facilitate the analysis of their relative significance in shaping the process
of public administration reform in China, we have used the above two analytical
dimensions to differentiate and group the potential range of factors, and these
dimensions are the territorial dimension (domestic/international) on the one
hand and the policy dimension (supply-side/demand-side) on the other hand.
These two dimensions can be combined into a 2  2 matrix that ‘locates’ the driving
forces shaping the process of public administration reform in China (see Table 1).

3. Public administration reform in China since the late 1970s

The reform and opening-up process that started in the late 1970s has made a
tremendous impact on public administration system changes. In all, six rounds
of public administration reform were carried out in 1982, 1988, 1993, 1998, 2003,
and 2008, respectively, corresponding to the six major terms of the National
People’s Congress. These reforms have different objectives and focuses, but
invariably focused on the four key elements as outlined previously. The ultimate
objectives of these reforms are to resolve conflicts in functional arrangements,

Table 1. Driving forces for public administration reform in China

Territorial policy Domestic reform International integration

Supply-side  Vision and judgment of  Learning from the experiences

the leadership of the developed countries
 Learning from the local
successes and past mistakes
Demand-side  Transition of economic system  Economic integration into the
international community
 Pressures from the local
governments

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290 International Review of Administrative Sciences 78(2)

simplify the organizational structure, create a capable civil service, and streamline
the operations of the government.

3.1. Organizational restructuring

Organizational restructuring has always been considered as the starting point of
public administration reform in China in the reform and opening-up era. In fact,
China has had 12 major organizational restructuring initiatives since the founding
of the PRC in 1949 (see Table 2), which have resulted in significant fluctuation in
the number of government agencies under the State Council.
The first round of public administration reform took place in 1982, when the 5th
People’s Congress decided to initiate a major overhaul of the government structure
to streamline the government in order to meet the new challenges emerging from
economic reform. This round of public administration reform focused on the
improvement of government operations’ efficiency and effectiveness by downsizing
government agencies and the workforce. The number of vice premiers was reduced
and the new position of state councilors was set up. Government agencies were
significantly downsized and adjusted, while ministries, commissions, and directly
controlled organizations were also cut down. Overall, the various government
agencies were reduced to 61, more than one-third down from the 100 of previous
years. Many temporary institutions were abolished as well.

Table 2. Restructuring central government in China (1951–2008)

Agencies directly
Organization Ministries/ under the State Total # of Change in # of
Year Commissions Council agencies employees (000)

1951–1953 42
1954–1956 81
1956–1959 39 21 60
1960–1965 79
1966–1975 1970:32
1975:52
1976–1981 100
1982 45 16 61 51 ! 38.3
1988 41 19 60 50 ! 40
1993 41 18 59 37 ! 29.6
1998 29 23 52 32 ! 16.7
2003 28 23 51
2008 27 21 48
Source: Created by the authors from information collected through Circulars of the State Council of China,
1982–2000, http://www.gov.cn/test/2009-01/16/content_1206928.htm; and Guo and Pan (2006).

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Xue and Zhong 291

In the 1988 public administration reform, organizational restructuring was still a

major theme with the aim of shifting the focus of the government agencies from
micro-management of economic affairs to more macro and strategic issues. While
the overall number of agencies did not change much, there were quite important
structural changes within various government agencies, including abolishing some
ministries and creating new ones. Also, the ‘three fixes’ (San ding), which means to
fix the specific functions of a government agency, to fix the internal structure of the
agency, and to fix the number of civil servants and their ranks in the agency, were
introduced for the first time to try to rationalize the existence of a government
agency (Morgan, 2003).
By the end of 1991, the number of public employees in the government and
party system reached a new high of 9.2 million. Therefore, in the 1993 public
administration reform, downsizing government through personnel reductions
again became a major concern while the structural issue was secondary.
The reform of 1998, carried out by then premier Zhu Rongji, was the most
radical one, with probably the greatest structural change and personnel reduction.
Almost all ministries in charge of specific industries, such as the Ministry of the
Coal Industry, the Ministry of the Chemical Industry, the Ministry of Machinery,
and the Ministry of Electricity and so on, were abolished. Extensive rationalization
and adjustments of government functions were also carried out among various
government agencies. Overall, 15 ministries were closed, four new ministries were
created, and one transformed from a ministry into a consultation agency.
The number of central government employees was cut by over 47 percent.
The organizational restructuring in the 2003 reform was quite limited, in light of
the previous major change in 1998. However, the structural change in 2003 wit-
nessed the government’s attempt to strengthen the regulatory functions of the state.
The State-owned Assets Supervision and Administration Commission of the State
Council was created as a special agency directly under the State Council, to manage
large state-owned enterprises (SOEs). Existing financial regulatory bodies were also
reorganized into the People’s Bank of China, the China Banking Regulatory
Commission, and the China Insurance Regulatory Commission. State Food and
Drug Administration and the State Administration of Work Safety (formerly man-
aged by the National Economic and Trade Commission) were reorganized and
upgraded to be independent agencies reporting directly to the Premier. These struc-
tural changes were implemented to deal with the food safety and product safety
scandals and the increasing number of mining accidents, chemical plant explosions,
and environmental disasters (Wang, 2006).
The catchword of the 2008 public administration reform was dabuzhi, which
essentially means the reorganization of existing institutions into so-called ‘super-
ministries’ that have broad mandates. The concept of ‘super-ministries’ was offi-
cially introduced at the 17th Party Congress in October 2007 as a government
reform guideline in order to improve the efficiency of the government. However,
the final changes that were formally announced turned out to be much milder than
expected. Five new ministries were formed in environmental protection,

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292 International Review of Administrative Sciences 78(2)

transportation, industrial policies, housing, and social security. These changes and
reorganizations reduced the total number of ministerial agencies from 28 to 27.

3.2. Functional transformation

All public administration reforms since the late 1970s, except the one in 1982, have
made the transformation of the government functions to be the core and critical
part of the reforms. As China’s economic liberalization continued, it was
increasingly clear that, in order to make the market work, the role of government
had to be changed from direct management of economic affairs and tight control of
enterprises to one that focused more on creating good business environments,
regulating the market, and providing public service.
The reform in 1988 proposed for the first time that transforming government
functions is the key organizational reform. In 1992, it was officially stated again that
government functions should be transformed and aligned with the principle of
separating the functions of government from those of enterprises. The government
should avoid interfering with issues that should be managed at the enterprise level,
simplify and streamline procedures in regulating the enterprises, and strengthen
macro-economic policy coordination. The 1993 public administration reform put
great emphasis on redefining government functions and separating them from
enterprise functions, which was formally adopted in the landmark document in
China’s transition to a market system, Decision on Several Issues of Building a
Socialist Market Economy System, passed at the Third Plenary Session of the
14th CPC central committee on 14 November 1993.
Despite repeated calls and efforts to reduce the interference of government
agencies in enterprise management, many government agencies were reluctant to
give up their power. In the 1998 public administration reform, the central govern-
ment had to abolish many ministries in charge of various industries altogether, and
to reorient the remaining ones to focus more on macro-management instead
of micro-management, to focus more on better policy guidance and coordination
instead of direct interference in enterprises’ production and operation (Guo, 2000).
In the end, the State Council shifted 280 functions from the central government
agencies to state-owned enterprises, social intermediate organizations, and local
governments (Zhang, 2009).
The 2008 public administration reform was carried out in a new political envir-
onment where the concept of ‘scientific development’ was advocated by the central
government as the major guideline for China’s future development. ‘Scientific devel-
opment’ refers to an attempt to move China away from its single-minded pursuit of
GDP growth to a development path that is people-centered and more balanced and
sustainable (Wang and Zheng, 2007). In accordance with this overall change of
development strategy, government functions were required to expand rapidly in
providing more and better public services and to improve regulation of the
market. In a major policy document issued by the Central Government in 2008,
Opinions on Further Reforming the Government Administration System, it was argued

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Xue and Zhong 293

that China should ‘achieve the fundamental transformation of changing government

functions to create a better development environment, provide public services of
high quality and sustain social equity and justice’. To what degree this new change
can be implemented successfully is yet to be seen.

3.3. Civil service reform

One of the important components of public administration reform in China is to
improve the civil service system to build a highly qualified and professional admin-
istrative management workforce. While the basic framework of China’s cadre
management, named the Nomenklatura system (Manion, 1985; Burns, 1987), has
remained more or less intact in the process of economic transformation, the civil
service system has undergone some significant changes in the reform era.
Before 1978, senior cadres’ appointment, promotion, transfer or removal was
based on political criteria at the expense of professional and technical criteria.
In the late 1970s and early 1980s, the new official criteria Sihua (the four trans-
formations), namely revolutionary (or reform-minded), younger, better educated,
and professionally more competent for cadre promotion, were introduced by Deng
Xiaping (Zhong, 2003: 109). The life-long cadre system was abolished and a fixed
tenure system was institutionalized, stipulating retirement for most officials at age
60 for men and 55 for women. Efforts were also made to alleviate the problems of
secrecy and nepotism in the cadre appointment process, and to recruit younger and
better-educated officials (Howell, 2004: 39). By doing so, the framework of
cadre management was gradually transformed toward a stronger emphasis on aca-
demic credentials.
In the mid-1980s, the concept of establishing a civil service system with Chinese
characteristics emerged in China’s political agenda. The 13th Party Congress of the
CPC in 1987 endorsed a very progressive version of the system, in which a dual-track
structure within the bureaucracy was introduced, a cadre of professional civil
servants, selected by meritocratic examination and promoted on professional
criteria, alongside the administrative officials appointed and promoted by the
Party organization departments (Lieberthal and David, 1992). The then General
Secretary of the Party, Zhao Ziyang, announced that a civil service system would
be established for cadres working in government agencies in order to regularize the
functioning of the government, to ensure appointment and promotion decisions
were based on professional qualities rather than personal loyalties and to help clarify
duties and lines of authority (Burns, 1989). However, this initiative had to be put on
hold because of the Tiananmen Incident in 1989.
It was not until 1993 that the Promulgation of Provisional Civil Service
Regulations was formally issued by the central government as the guideline for
establishing China’s civil service system. Since then, the Ministry of Personnel,
which was reincarnated in 1988 and specifically tasked with implementing the
new civil service system, has issued more than a dozen new regulations on civil
service management that cover virtually all aspects of that process. Civil service

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294 International Review of Administrative Sciences 78(2)

reform was carried out in the midst of two vigorous attempts to downsize the gov-
ernment (1993 to 1996 and since 1998), the latter of which has been relatively
effective (Howell, 2004: 39). It is officially reported that the structural reform
that was launched in 1998 had resulted in reductions of the public workforce of
an unprecedented magnitude. The central and provincial governments see a 50
percent downsizing of the workforce, the city and county governments 20 percent,
which means that about one million government employees have been let go from
their government positions.
Since its inauguration in 1993, China’s civil service system has helped to enhance
the state’s ability to respond to new personnel needs emerging in a rapidly changing
socioeconomic environment. However, the implementation process generated a
dynamic between central policymakers who sought to optimize economic ration-
ality and local leaders who placed more emphasis on coping with conflicts arising
from the implementation of the reform; therefore, many of the reform initiatives
were symbolic (Chou, 2004), particularly at the local level. It is estimated that there
were about 6.37 million civil servants and more than 30 million personnel working
in publicly funded organizations across the country by the end of 2003. To estab-
lish a civil service system with Chinese characteristics remains a challenging task for
the Chinese government. On 27 April 2005, the Civil Servant Law of the PRC was
approved at the 15th meeting of the standing committee of the 10th NPC, becom-
ing the country’s first Civil Servant Law to professionalize its civil service for better
governance.

3.4. Operations management

Over the last 30 years, China has made much progress in standardizing and ratio-
nalizing government behavior by drafting laws, regulations, and provisions, some
of which were updated and enacted, such as the Law on Organization of the Local
People’s Congress and Local People’s Governments of the PRC (1979), and the Law
on Organization of the State Council of the PRC (1982). Other laws, such as the
Administrative Litigation Law (1989), the State Compensation Law (1994), the
Administrative Punishment Law (1996), the Administrative Reconsideration Law
(1999), and the Administrative License Law (2003), were successively introduced,
enacted and implemented to standardize administrative practice, strengthen admin-
istrative law-enforcement agencies, and reduce the number of approvals required
by the administrative examination system.
Meanwhile, e-government initiatives have also been launched to simplify
procedures and increase the accountability and transparency of government oper-
ations. Other measures have also been adopted to keep the government more open
and transparent, such as the spokesperson system and official websites. More than
80 laws and regulations such as the Administration License Law (2003) have all
made provisions on government information disclosure. The Regulation on the
Disclosure of Government Information, published on 24 April 2007, further made
provisions on the disclosure of government information into a law. Websites of all

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Xue and Zhong 295

levels of government have become important platforms to build a service-oriented

government. On 1 January 2006, the central government officially opened its
website. A recent analysis shows 96 percent of the ministries on the State
Council have a government website, and about 90 percent of the provincial
government, 96 percent of the municipal government, and 77 percent of the
county government have a government website (Hong, 2006).

4. Driving forces of administration reform in China

Based on the conceptual framework proposed in Section 2, we have summarized
the driving forces that have shaped and moved the reform process of public admin-
istration in China into five categories. The reform in public administration since
late 1970s has been shaped by these forces, some of which are from inside China
and some are from outside. While different driving forces have played different
roles in the Chinese reform, they can be ranked as follows with respect to their
relative importance.

4.1. Transition of the economic system

The transition of the economic system from a planned economy to a market econ-
omy has become the most important driving force in pushing public administrative
reform in China. The objectives of the six rounds of public administrative reform
differ from each another, but one consistent theme is how to adapt the public
administration system to the needs of a market-based economic system. The chal-
lenge of this transition is that the concept of the market-based economic system
itself has been changing in China. The reform of 1982 was centered on the eco-
nomic form of ‘the centrally planned economy complemented by market mechan-
isms’, whereas the ‘socialist planned commodity economy’ became the new concept
in the reform of 1988. Only with the reform of 1993 did the ‘socialist market
economy’ become the dominant paradigm.
Along with the changing conceptualization of the market economic system, the
focus of the consequent public administration reform has also been changing.
In December 1982, the Central Party Committee and the State Council pointed
out in the Notice about Some Problems in Party and Government Institution Reform
in Province, City and Municipality that with the reform of the economic system,
government agencies in charge of economic management should be simplified and
their power be curtailed, while government agencies in charge of economic coord-
ination, supervision, and enforcing laws and regulations should be strengthened.
There is also a need to separate the functions of government agencies from those of
enterprises, and to manage the economy through economic measures instead of
administrative measures.
The 13th Party Congress in 1987, which laid the foundation for the reform of
1988, emphasized that the objective of the economic system reform was to con-
struct new planned commodity economy system gradually, requiring that the

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296 International Review of Administrative Sciences 78(2)

approaches the government used to manage enterprises changed from relying heav-
ily on administrative measures to using other indirect measures. The reform in 1988
tried to follow these requirements by delegating micro-management functions to
the lower level of government or enterprises while strengthening the function of
macro adjustment and control. Meanwhile, part of the functions formerly taken by
government agencies were also transferred to different industrial associations.
Despite these efforts, the 14th Party Congress in 1992 still found the functions
and organizational structure of the public administration system to be contradict-
ory to those needed in a socialist market economy, and advocated for further
reform of the public administration system. This line of argument continued
through 2007, when the 16th Party Congress emphasized again that the Chinese
government should ‘accelerate the separation of the functions of the government
from those of enterprises, state assets management authorities, public institutions
and market-based intermediaries, standardize administrative practices, strengthen
administrative law-enforcement agencies, reduce the number of matters requiring
administrative examination and approval and standardize such procedures, and
reduce government intervention in microeconomic operations’.
To sum up, a major driving force in the six rounds of public administration
reform since the late 1970s is the need for the government to adapt to the
functioning of a government for a market-based economic system instead of one
serving a planned economy. In terms of government functions, the key is to
separate the functions of government from those of enterprises and only focus
on those that should be done by the government, such as setting macro-economic
policies and regulating the market. Also, more power and rights are delegated to
the local governments. In terms of organizational structure, government agencies
or departments within government agencies in charge of economic management
have become the focus of the reform, many of which were abolished, merged or
transformed (Xue and Pan, 2010).

4.2. Pressures from the local governments

Local governments are in the front line of promoting economic development,
providing public services and regulating the market. However, in a unitary
system, the authority and resources in the hands of local governments are quite
limited, which was particularly true in the early days of reform. Therefore, there is
a constant bottom-up pressure from local governments on the central government
to delegate more authority and resources to the local government or to the enter-
prises when appropriate.
For example, local government pressure played an important role in the reform
of the administrative approval system in China. While local governments have been
the key drivers in various economic development initiatives, most of these initia-
tives, such as investment in infrastructure or foreign direct investment in setting
up a manufacturing facility, would have to go through an elaborate approval
process from the higher levels of government depending on the scale of the project.

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Xue and Zhong 297

Other approvals needed can include a license or permit to enter a particular line of
business, which can take months or even years to get. For many local governments
which are also competing with other local governments, the ability to get such
approval or licenses is the key to developing the local economy. To respond to
the pressures from local governments, the State Council launched the administra-
tion examining and approving reform in 2001. By 2006, nearly 3000 legislations
and ordinances were abolished, revised, or newly created. A law on administrative
approval was enacted in 2004 (Fang and Zhang, 2006; Zhang et al., 2007).

4.3. Integration into the global economic system

In addition to domestic reform, another major impetus of China’s development
over the last 30 years has been the process of opening up to the outside. Since the
reform and open-door policy was started in late 1978, China has become part of the
global community through the development of an international network of
contacts, associations, and relationships. This has significantly shaped China’s
domestic public administration reform, as China’s leadership has a better
understanding of the expectations of the international community and their poten-
tial impact on China’s domestic governance.
A major event in China’s effort to get fully integrated into the global economic
system was the entry to WTO on 11 December 2001, after many years of difficult
negotiations. It became a top priority to accelerate public administration reform so
as to ensure that the government functions, the operations of government, and the
rules and laws were in line with WTO standards. After entering the WTO in 2001,
the Chinese government made great efforts to restructure government agencies,
streamline processes and procedures, and improve government behavior by follow-
ing the principles of nondiscrimination and transparency to fulfill its commitment
to WTO. For example, in the public administration reform of 2003, the functions
of the former State Planning Commission, the former State Economic and Trade
Commission and the former Ministry of Foreign Trade and Economic
Cooperation were all transferred to the newly created Ministry of Commerce.
According to one official report, nearly 3000 items of law and regulations at the
central government level and 200,000 items of law, regulations and policies at the
local level were abolished, revised, or created in the five years after China’s entry
into the WTO (Fang and Zhang, 2006).

4.4. Vision and judgment of the political leadership

China’s political power ultimately lies within the Party, which runs China through
the party system at every level (McGregor, 2010). The six rounds of public admin-
istration reform at the central government level are all led by the Party. The vision
and judgment of the political leadership is crucial.
Since the 1980s, a political-administrative decision cycle has been adopted
to facilitate the reform process which is less dependent on individual judgment.

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298 International Review of Administrative Sciences 78(2)

The Party Congress runs on a five-year term, the same as the National People’s
Congress (NPC). Every new Party Congress has always been held about five
months ahead of the new NPC. Based on studies, surveys and discussions within
the Party system and with representatives of the people outside the Party system, a
final strategic planning report, summarizing the past and proposing new reform
and development initiatives, will be delivered to the Party Congress and become the
policy guidelines for the next five years. The NPC held five months later then
proposes actionable policies and programs to implement the strategic plan set by
the Party Congress. Invariably, public administration reform has always been a
major issue in these strategic plans.
The plan of 1982 public administration reform was adopted in principle at the
12th Party Congress and then was adopted at the 1st Session of the Standing
Committee of the 7th NPC. Likewise, the plan of major reorganization of the
State Council in 1998 was first discussed at the Party’s Central Committee and
adopted at the 1st Session of the Standing Committee of the 9th NPC. The other
rounds of reform in 1993, 1998, 2003, and 2008, respectively, were all developed
and implemented in the same fashion. A similar political-administrative cycle can
also be observed at the local level.

4.5. Learning from the local successes and past mistakes

Another way to push China’s public administration reform is through a local–
central learning process. The crucial role of decentralized experimentation has
been highlighted by many scholars to explain the capability of China’s Party-
state to generate institutional and policy innovations for economic reform and to
adapt to a rapidly changing economic environment. This has decisively shaped the
policy-making process in domains as diverse as rural decollectivization, foreign
economic opening, the promotion of private business, state-sector restructuring,
and stock market regulation (Heilmann, 2008). China is a large country with many
administrative sub-units such as provinces, municipalities, and counties, which
vary a great deal in terms of natural endowments, culture and traditions, and
economic development stages. It is often very difficult to come up with reform
policies from the top that can be applied nationwide.
A major reform strategy in China over the last 30 years has been to give local
governments more autonomy to experiment, which is the key to understanding
China’s policy process. A trial-and-error, evaluation-and-improvement, adop-
tion-and-dissemination process, in which central policy-makers encourage local
officials to try out new ways of problem-solving and then feed the local experiences
back into national policy formulation, has been a pervasive feature in China’s
public administration transformation. Through experimentation under hierarchy,
that is, the volatile yet productive combination of decentralized experimentation
with ad hoc central interference, local experiences can be selectively integrated into
national policy-making (Heilmann, 2008). The central government can then learn
from the lessons gained from such experiments. One consequence of this strategy is

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Xue and Zhong 299

that the local governments always want the central government to review their
experiences, to approve their reform measures, and to change these experimental
measures into formal policies, therefore pushing the central government to move
forward in public administration reform.

4.6. Learning from experiences of the developed countries

In today’s information age, it is not surprising that public administration reform in
one country often has impact on others. China’s public administration reform has
benefited greatly from the experiences of other countries. It was found that govern-
ments in both Eastern and Western countries had conducted government reform on
a large scale to meet the challenge of technology innovation, globalization, and
world-wide competition since the 1980s (Hughes, 1998; Kamarck, 2001, 2003).
These experiences have had an important demonstrable effect on China’s public
administration reform. It is pointed out that there are some surprising similarities
between China’s public administration reform and others’, which reflects conver-
gence, rather than divergence, despite the seeming differences (Zhang, 2009). One
study found that the administrative reform in China has 12 similar characteristics
with Japan, Britain and America, demonstrating that China was always learning
from the Western world (Zhang and Straussman, 2003). Some scholars conclude
that, while there are some ‘unique’ features, most of the themes (and even the results)
of modern Chinese reforms are not unique and have parallels in Western countries.
Moreover, aside from the similarities in the content and substance of public admin-
istration reforms, the patterns and styles of reform in China and in the West in the
past 20 years show marked similarities and parallels. Thus, external reform ideas and
influences are being diffused through reform processes (Christensen et al., 2008).
There are many ways in which China can learn from developed countries. China
has been very active in sending government officials abroad for training in various
topics, mostly public administration related. While most of these programs are a
few weeks on selected topics, increasingly more (estimated at 6000 a year) people
opt for MPA degrees. These training programs have provided many trainees with
new perspectives and tools popular in Western countries that they can use in their
public administration reform effort. At the same time, public administration
reform has also benefited from research conducted in academia in China. Since
the late 1980s, theories of governance and New Public Management were intro-
duced to the Chinese audience, particularly in the government agencies. Some
scholars were also invited to serve as consultants or advisors for some of the gov-
ernment reform initiatives, which provided a natural conduit for the dissemination
of the new concepts and theories.

5. Limitations of China’s public administration reform

The six rounds of public administration reform discussed previously have demon-
strated China’s determination to establish a market-based economic system, to

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300 International Review of Administrative Sciences 78(2)

separate government from specific economic activities, and to facilitate China’s

integration with the global economy.
However, the limitations of these reforms should also be recognized. First of all,
with respect to China’s intention to advance the transition of government from one
that is oriented only toward economic development to one that is more balanced
between economic and social objectives and oriented toward the needs of the gen-
eral public, it has been an incomplete mission. There are signs that government
involvement in economic activities at different levels has increased in recent years,
which is mainly due to the rapid growth in large state-owned enterprises, typically
in capital-intensive and high return industries such as petrochemicals, energy and
automobiles (Naughton, 2008). It has become virtually impossible to divorce gov-
ernment agencies from economic interests and convert them into solely service
providers and regulatory bodies. The state has become the largest owner of the
nation’s wealth. Almost half of the national wealth is controlled by the government
and spent through the various government bodies. Many entrenched interest
groups from these industries have emerged to block reform efforts that may nega-
tively impact them (Zheng and Wang, 2008). Moreover, while there have been
surging waves of regulation reform in many countries worldwide since the 1990s
(Jordana and Levi-Faur, 2003), China is still far from being a regulatory state.
The regulatory authority in China is far too weak, resulting in food and drug safety
issues, environmental pollution, industrial accidents, and many other emergencies.
In addition, China is far from completing reforms on public service units, which
provide medical, education, public research, and other knowledge-based services.
Second, the attempt to build a service-oriented government through downsizing
has shown its limits. There has been a cyclical pattern of downsizing and expan-
sion. Streamlining government institutions and reducing the size of the central
government has been one of the objectives of public administration reforms, but
each round of public administration reform has always been accompanied by a
large-scale rebound. In the sixth round of public administration reform in 2008,
China officially launched the administrative structural reform by separating the
functions of the government into three domains – decision-making, execution,
and supervision – which is designed to make the government more efficient and
build a check-and-balance mechanism in the government to keep it clean. But the
overall result has turned out not to be as satisfactory as expected. There still exist
many incoherencies and inconsistencies both vertically among different levels of
government and horizontally among different government agencies. Many roles
and responsibilities of government agencies are still ambiguous, with many juris-
dictional gaps and contradictions. For example, food safety regulation has long
been shared by various government ministries, including the Ministry of Health,
the State Food and Drug Administration, the Ministry of Agriculture, the Ministry
of Commerce, the General Administration of Quality Supervision, Inspection, and
Quarantine, the State Administration for Industry and Commerce, etc., which is
described as ‘taming the water with nine dragons’ (‘jiulong zhishui’). But the coord-
ination and integration of these agencies is still a daunting challenge.

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Xue and Zhong 301

The third issue is related to civil service reform and the attempt to establish a
Weberian bureaucracy. Although the entrance examination for China’s civil service
applicants is becoming more meaningful as it puts increasingly more emphasis on
competence and capabilities, the Chinese state falls short of developing into a fully
legal-rational administrative state. Loopholes in government hiring and promotion
processes at the local level are still prevalent. The current civil service system has its
limitations in fostering the new generation of civil servants that the government
needs, nor are they equipped to do the job with the necessary knowledge and skills
in public administration. Establishing a Weberian ideal-type bureaucracy would
require appointing and promoting civil servants according to merit rather than
according to their family connections or loyalty to individuals.
The fourth area is related to China’s transformation from a public administra-
tion system based on personal will and charisma to one that is increasingly based
on rule of law, which has been recognized as necessary for a modern state govern-
ment. This transformation, however, requires an independent judicial system and
genuine public participation process. The challenge now is how to deal with the
relationship between the legal system and the Party system in China. Some have
characterized the current legal reform in China as the ‘rule of the Party by law’,
which may be an improvement on the ‘rule of a man’ but does not yet reach the
realm of the ‘rule of law’ (Zou, 2004).
Finally, it must be recognized that there is also a need to push for the acceler-
ation of China’s political reform, which is the root cause of many public admin-
istration problems. Some have advocated a process where democratic reform will
begin within the Party system. Others have argued for reform on the political-
constitutional dimension of governance where the relationship between the Party
and the state needs to be redefined. While many local experiments of various kinds
have been conducted, such as the open election of county mayors, these experi-
ments have not spread widely in the country. Nor have these experiments been
sanctioned officially by the Central government. The growing disconnect between
China’s market-oriented economy with its emerging middle class and the civil
society, and the centralized governance system has given rise to intense discussion
and debate about political reform (Zhao, 2006). How to move forward along the
path of political reform while maintaining social stability will be one of the key
challenges facing the new generation of Chinese leadership.

6. Conclusion
Over the last three decades since the late 1970s, the Chinese public administration
system has been actively engaged in a transformative process characterized by
domestic reform and global integration. While much progress has been achieved,
the road ahead remains long and demanding.
The high rate of economic growth in past decades has encouraged many people
to have higher expectations for public administration reform in China. According
to the official Chinese statistics, over the last 30 years from 1979 to 2008, China’s

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302 International Review of Administrative Sciences 78(2)

gross domestic product (GDP) grew at an annual average rate of 9.8 percent,
making it one of the fastest growing economies and the third-largest economy in
the world as of 2008. In the second quarter of 2010, China had overtaken Japan to
become the world’s second-largest economy. Whether the same miracle can be
generated in the field of public administration reform remains to be seen. In the
Fall of 2012, the Communist Party of China will hold its 18th National Congress,
and the new leadership is due to take over. There should be no doubt that public
administration will be a key area of action in China’s new effort at building a
moderately prosperous society in all respects and advancing the drive of socialist
public administration with Chinese characteristics.

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Lan Xue is Professor of Public Management, School of Public Policy and

Management, Tsinghua University.

Kaibin Zhong is associate Professor of Public Management, National Institute of

Emergency Management, Chinese Academy of Governance.

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