From  “The  Economist”  -  August  18th  -  2018

Reform experiments

Feeling the stones

Under Xi Jinping, China is losing its creativity with reform experiments

STANDING at the edge of a field where his soyabean crop will be harvested in a month's time, Liu Xijiang gives a tepid review to a local experiment with rural land reform which the central government is promoting as a great success. "It's a good idea and it's working well enough, but in reality it doesn't make all that much difference to most of us," he says. The experiment in Linying, a county in the central province of Henan, relates to one of China's biggest policy conundrums: how to let farmers squeeze more value from the tiny parcels of land allocated to them than they can earn by farming it themselves.

Officials resist the obvious solution-letting them sell it, build on it or rent it out for other purposes. That, they fear, might lead to an unacceptable loss of arable land. But in 2014 the central government began allowing localities to test ways of helping farmers to sell the right to use their land for agricultural purposes. (Many places had been quietly allowing this anyway.) Ownership would remain, in effect, in the hands of the state, which allows farmers to use land on renewable contracts.

Linying county, in China's agricultural heartland, responded by establishing what officials called a "land bank" - a government-run intermediary between farming households and investors who want to take over farmers' contracts and work the land on a bigger and more efficient scale.

State media say that farmers have put almost 17,000 hectares, or half of the county's farmland, into the land bank. Much of this has now been consolidated into large farms, which are proving more profitable than smallholdings.

Though it brooks no dissent and has a taste for strongman politics and centralized leadership, the Communist Party has 'shown an admirable willingness to let small areas of the country try out reforms before they are introduced nationwide. These local experiments with reform have been cited by some Western scholars as examples of China's "adaptive authoritarianism". This is a way of describing the party's ability to avoid the fate of its counterparts in other communist-ruled countries by flexibly adjusting policy in order to satisfy public demands for greater prosperity. The pilot system has been an important means of achieving this. There are signs, however, that it is losing steam.

In the past, the central government was sometimes ready to devolve considerable power in order to promote experiments with reform. Take the "special economic zones" (sezs), which the party set up along the southern coast in the 1980s. In these, local officials were given extraordinary leeway to approve foreign investments, grant tax breaks and waive price controls. Their experiments succeeded in producing rapid economic growth. They were, in effect, the pilot projects for the market-oriented policies that helped China become the economic giant it is today.

A raft of other experimental reforms followed elsewhere, including the introduction of stock exchanges and greater tolerance of private enterprise. Xu Chenggang of the Cheung Kong Graduate School of Business in Beijing says that in the first three decades of the reform era, which was launched by Deng Xiaoping at a meeting of the party's Central Committee in December 1978, nearly all the main economic changes began as local pilot schemes. "Crossing the river by feeling the stones" was how reformists described the process (contrary to common belief, there is no record of Deng having said this).

This year, with relentless fanfare, China has been trumpeting the 40th anniversary of Deng's reforms. But in what the party calls the "new era" under Xi Jinping, the current leader, officials show less enthusiasm for creative experiments.

The land bank in Linying is one underwhelming example. For each mu of land (about one-fifteenth of a hectare) that he rents out through the land bank, Mr Liu, the soyabean farmer, receives 900 yuan ($130) yearly. That's roughly what he could earn from farming. But the money from the land bank is guaranteed, even in years of poor harvest. He gets it without any labour, which gives him time to work in town. That provides about 3,000 yuan a month, his main income. "But the truth is, we've always been able to find people to rent to on our own. Less paperwork, no one interfered and the result was the same," he says. Early in Mr Xi's rule, which began in 2012, there was speculation that more profound change in the rural land system might be in the offing, possibly allowing farmers to sell at least some of their land. Not much has happened.

Even before Mr Xi took over, the pace of experimentation had been slowing. Sebastian Heilmann of the University of Trier in Germany reckons that the number of provincial-level policy pilots declined from around 500 in 2010 to about 70 in 2016. Over the same period, the share of national regulations with experimental status dropped from nearly 20% to about 5%.

But the decline is partly the result of Mr Xi's hardline rule. This has been a surprise to many observers, given the reformist credentials of his late father, Xi Zhongxun. (As party boss of Guangdong province, the elder Mr Xi oversaw the founding of the most important sez, Shenzhen.) The younger Mr Xi's ruthless crackdown on corruption and demands for unswerving loyalty to himself as the leadership's "core" have spread fear among bureaucrats. Few want to risk the unwanted attention that might result from reforms going badly. Mr Heilmann says the central government has also become less open to input from below. "Experiences and initiatives put forward by various regions tend to be ignored" under Mr Xi's more centralised and personality-based leadership, he says.

Local trials are still being carried out. The decision by China's legislature earlier this year to establish a national anti-corruption agency, for example, followed the successful piloting of such bodies in the provinces. In 2016 experiments were launched with innovative public-private ownership structures at some of the country's largest state-run enterprises. Last year five pilot "green finance zones" were established in various parts of the country. These are intended to try out markets for the trading of water - and energy-use rights and, it is hoped, help banks to lend in an environmentally friendly way.

But the growing indifference of the central leadership to feedback from the grassroots is hampering experiments. So too is a problem that long predates Mr Xi's rule: a culture of secrecy that often shrouds pilot projects, especially in their early days. Investigations of them by Chinese journalists are often consigned to classified publications (a widely read one among the elite is called Reform Internal Reference—the fortnightly magazine is marked "secret", which means that showing it to unauthorised eyes could result in years in jail). Even when state media are given permission to discuss pilot schemes, they often gloss over any flaws. Public opinion is routinely ignored. "This should involve more civil-society participation," says Cui Zhiyuan of Tsinghua University in Beijing. But Mr Xi has been even tougher on civil society than his predecessors. He has tried to strengthen the party's control over NGOS and suppress those that argue with the government. Experimentation in this area is something he will not accept. 


Taming the tigers

The government sounds the alarm over stressed-out schoolchildren

LIN MING, a ten-year-old who has two years left at his primary school in Beijing, does not remember the last time he returned home before 6pm on a weekday during term. As soon as school is out, his mother, Yang Mei, shuttles him around the city, dropping him off at tutoring agencies where he studies advanced maths and English grammar. Ms Yang accepts that she is "maybe putting a bit too much stress" on her son. But she has no choice. "Around 90% of my son's classmates attend after-school lessons. It's a competition I can't lose." When the new academic year begins next month, Ms Yang estimates that she will spend 3,000 yuan ($435) a month on her son's tutoring, about one-fifth of her household's monthly income.

Many Chinese schoolchildren do well academically. In the latest Programme for International Student Assessment (PISA) test, held in 2015, Chinese 15-year-olds in some cities did better in science and maths than their counterparts in most members of the OECD, a club mostly of rich countries. Yet Chinese officials worry that pupils' achievements may exact too heavy a mental and physical price. In July the Ministry of Education released its first "comprehensive quality assessment" of the country's primary - and junior-high school education. The unusually critical tone of the 26-page report has been causing a stir among China's online commentators.

One concern the document raises is that pupils get too much homework. The ministry reckons that nearly one in ten pupils in the penultimate year of primary school spend more than two hours on Chinese-language homework alone, every school day. Even before the report was published, some education authorities had been trying to lighten workloads. In March, for example, primary-school pupils in the eastern city of Hangzhou were told by their teachers to stop doing homework at 9pm if they were unable to complete it by that time. Junior-high school pupils were given until 10pm.

Another, related, problem is that Chinese pupils are out of shape. Nearly a fifth of nine-year-old boys and 13-year-old girls are overweight or obese, says the report. That is partly because many schools, often under pressure from tiger parents, teach more sessions of core subjects like maths and Chinese than is required by the education ministry, bumping physical-education classes. From now on, however, schools will be evaluated not only on how well pupils do in academic tests but also on their athletic ability, based on their performance in challenges such as 50-metre sprints and standing long-jumps.

Yet the ministry's harshest criticism is reserved for schools and tutoring agencies that overburden pupils by "teaching ahead" - imparting knowledge that is too advanced for a given age group. Zhang Ling, the head of Ben Jen kindergarten in Beijing, suspects that most nursery schools in the city use materials that are designed for the first or second years of primary school. That will no longer be allowed.

In July the ministry ordered kindergartens nationwide to focus on "fun and games" in the classroom. Fun inspectors will be dispatched later this year to enforce this. Ms Zhang, who says her kindergarten was already in compliance, welcomes the greater scrutiny. She says she can now wave an official document at parents who insist that their children be exposed to too-advanced academic fare.

To ensure that tutoring outfits do not offer "unsuitably" stretching courses, the government instructed them in February to provide education authorities with details of syllabuses and lists of their pupils along with which year they are in at which school. They must also agree to spot inspections. The ministry is cracking down on rogue pedagogues who refuse to teach academic material in school, and instead steamroller pupils into attending evening classes at tutoring centres where the teachers moonlight. This summer 31 teachers in the northeastern city of Harbin received unspecified punishment for doing that.

Ms Yang, the parent, says the new rules are well-intentioned, but may end up hurting middle-class folk like her. That is because those with deeper pockets can always hire home tutors, who are difficult for the government to monitor, to teach their little ones the advanced stuff. A customer service agent for Xue Er Si, a national tutoring chain, says the new restrictions mean that classroom-based tutors will have to be more cautious about what they teach. But she nonetheless reassures parents that the course content will still be harder than that found in school textbooks.

The clampdown on over-eager teachers and out-of-school instructors fails to tackle the root cause of pupils' stress, notes Zeng Xiaodong of 21st Century Education Research Institute, a Beijing-based think-tank. As long as admission to senior-high schools is based on results from the gruelling zhongkao exam, parents are likely to exploit every loophole to give their children an edge. Typically only the top 60% of zhongkao-takers secure a spot at an academic school. The rest are shunted to vocational ones. A better way to reduce stress for young children, argues Ms Zeng, is to scrap entrance exams to senior-high schools. The education ministry has correctly identified a problem. It needs to study harder how to solve it. ■