In this issues

USEFUL LINKS
Unirule Institute of Economics
China-Review
CCPPP

SUBSCRIBE
To subscribe to Unirule's bi-monthly newsletter, please mail to
unirule@unirule.org.cn

Unirule

Unirule
The Unirule Institute of Economics (Unirule) is an independent, nonprofit, non governmental (NGO) think tank, which was jointly initiated in July of 1993 by five prominent economists, Prof. Mao Yushi, Prof. Zhang Shuguang, Prof. Sheng Hong, Prof. Fan Gang, and Prof. Tang Shouning. Unirule is dedicated to the open exchange of ideas in economics in general, with a particular focus on institutional economics, and maintains a highly prestigious status within academic circles.

Address: Zhengren Building,6th Floor, No. 9, Chong Wen Men Wai Street, Dongcheng District, Beijing 100062, China
Tel. 8610-52988127
Fax. 8610-52988127

Economics on China's Problems?
By ZHANG Shuguang


The Natural Law is the Gentlemen's Mission?
By SHENG Hong


Rules and Prosperity
By FENG Xingyuan


A History of China?
By YAO Zhongqiu


On Hayek
By YAO Zhongqiu


The Limits of Government Ⅱ
By YAO Zhongqiu


Capital Freedom of China
2011 Annual Report

By FENG Xingyuan and
MAO Shoulong


Coase and China
Edit by ZHANG Shuguang and SHENG Hong

Where the Chinese Anxieties Come From
By MAO Yushi


 

Humanistic Economics
By MAO Yushi


Food Security and Farm Land Protection in China
By MAO Yushi ,ZHAO Nong and YANG Xiaojing


Report on the Living Enviroment of China's Private Enterprises
By FENG xingyuan and
HE Guangwen


Game: Subdivision, Implementation and Protection of Ownership of Land
By ZHANG Shuguang


The Nature, Performance and Reform of State-owned Enterprises
By Unirule Institute of Economics


Rediscovering Confucianism
By YAO Zhongqiu


 


Virtue, Gentleman and Custom
By YAO Zhongqiu


China's Path to Change
By YAO Zhongqiu




The Great Wall and the Coase Theorem
By SHENG Hong

 



Innovating at the Margin of Traditions
By SHENG Hong

 





Economics That I Understand
By MAO Yushi

 





Why Are There No Decent Enterprisers in China?
By ZHANG Shuguang

 



What Should China Rely On for Food Security?
By MAO Yushi and ZHAO Nong


 



Case Studies in China’s Institutional Change (Volume IV)

 

 
 

 

 

 

 

 

 

Highlights

Fees Can Be Collected from Drivers to Solve Traffic Congestion

Resource allocation refers to: electricity is generated for the society, and to generate electricity, coals are needed, and the electricity is distributed according to certain standards among people; crops are grown for the society, and to grow these crops, fertilizers are spread; tooth paste is a common commodity, and to produce tooth paste, various materials and process, such as ingredients, paper boxes, printing, and transportation are called for. The production of such commodities is highly complicated. How, then, to undertake the production of such commodities? There are two answers to this question. The first answer is planned economy where plans are made by planning departments of the government to cover the production of commodities. Even though it’s impossible for such plans to entail every detail of the production of every commodity in the society, major commodities are listed on the national plan, and the productivity and consumption are balanced by the central government. The other answer is market economy. To put it simply, market economy is free economy without intervention from any controlling parties. Choices are made by every single producer and consumer in the market, they are able to produce and purchase according to their free will.


Some would think the market economy does not make much sense. Important things such as production cannot be left to individual choices at their free will. The Great Recession in the 1930s proved problems did exist for market economies. Therefore, some one third of the population in the world chose planned economy and carried out this economic experiment for more than half a century. We know how this experiment ended. It failed to such an extent that even basic food supply could not be guaranteed and people starved. As of today, there are still a small number of countries which continues to adopt the planned economy with their counterparts switching to market economy, among which China is quite a successful one.


However, the unsustainability of planned economies is not widely acknowledged. Many even greeted the planned economy in disguise with rejoice. For example, some believe that it is necessary to set a minimum amount of fertile lands to guarantee food security. In a market economy scenario, the amount of crops needed to feed the people, the amount of lands to grow these crops, and the amount of fertilizers used are all determined by the market without intervention. Indeed, major countries in the world do not set “redlines” for the quantity of land to secure food supply because they are convinced that the market will best allocate resources while interventions will distort the market. We are sorry to see this simple idea is still debated in China and in many of China’s policy the ghost of planned economy is still seen.

The mystery of market economy is easily put into words, that is, fluctuation of prices will balance supply and demand. If there is any short of supply of a certain commodity, the price of the commodity will go up as a result. As the price goes up, supply goes up and demand decreases, where supply and demand come to balance. On the other hand, when supply overtakes demand, the price goes down. Therefore, all commodities can be sold and bought, and there will not be any imbalance of supply and demand in the long term. From this perspective, traffic congestion can be understood as an insufficient supply of roads. The cause of this phenomenon is that the use of roads is for free, or to say, the price for using roads is zero. At such a low price, everyone can use roads for free, which further exacerbates the traffic congestion. Therefore, the utmost solution to the traffic congestion is to charge for the use of the roads.


The real question is how to charge. In crowded cities, if every car stops to pay, how can the traffic situation be mitigated? But there are ways to charge for a road with only one entrance and only one exit without cars stopping to pay the bill. We have to admit that there are no methods to accurately record the distance data of each and every vehicle running in a network of roads.


Thanks to the rapid advances in modern electronic technology and computational capacities of digital devices, there will be new methods developed to carry out the aforesaid tasks. One way to do this is to set road cameras in all the crossings of a road network to record cars, a particular car shall be recorded at the starting point and tracked until it exits the network. The distance can be recorded and calculated and the tracking data can be read thanks to computing and storage technologies. And this data can be used to charge the drivers for the use of the roads, this method causes no congestion nor waste of road resources. And the fluctuation of prices can then step in.


When the use of roads can be accurately recorded, fees paid by road users will cover the total cost of road construction. This works the same way as how the prices of general commodities are determined. In the long run, the price will approach the cost. As long as road users are paying, new roads can be constructed by the municipal governments. There will not be any short supply or over-demand. In this way, traffic congestion is solved once and for all. Wherever you’d like to go, as long as you pay, there is simply no stopping. Lost due to traffic congestion will also be lowered to zero. And you can always get to your destination be it a meeting or your office punctually without worries for traffic.


Those who use the roads pay, which is the most fair way to distribute the burden of building roads. In China, most drivers belong to the high-income group. The system we use now is unfair as the cost of the road construction is shouldered by all the tax-payers. It should be alternated to the policy of “those who use the road pay for it.” It is just like buying and selling of general commodities, everybody is satisfied.


The free use of roads will disturb the market equilibrium which leads to more serious problems. Firstly, free use of roads will encourage more people to drive to only find themselves stuck in the heavy traffic. For example, when you don’t have to pay electricity bills to supply your fridge, more people will buy fridges. In global trade, when many cars are imported in a country, more roads will be built for these cars. Compared to the scenario where people pay to use the roads, imported cars will be increasing, and the government has to use tax payers’ money to subsidize the free use of roads for those who buy imported cars. As a result, tax payers’ burden increases, while those who purchase cars benefit.


There is one more advantage of charging drivers for the use of roads, i.e., the quantity of land used to construct roads in a city will be, then, best determined. To take a look at major cities in the world, the ratio of land used to construct roads vary largely. In LA, USA, roads occupy large pieces of land and residences are scattered with few tall buildings. On the contrary, population density is very high in New York City where there are a lot of skyscrapers, and the ratio of land occupation to roads is very low. Which one makes more sense? Is it better to have more or less roads in a certain piece of land? Without the method I proposed above, it is hard to estimate. Now with road as a general commodity, the area for roads is not determined by any person, but the market that run according to supply and demand. Every road then has a price, a price that customers are willing pay. If the cost of building a road is too high for the consumers, then the road will not be constructed.


The proposal to charge for the use of roads has been put forward long ago, but it was hard to implement due to the fact that it was hard to record and calculate the distance of a vehicle in a road network. However, now that data processing capacities of computers are remarkable, task aforesaid can be done in a blink of an eye. We can see the last technical barrier to charge for the use of roads is already surpassed. Now it’s time to charge.

maoyushi

MAO Yushi,  Honorary President of Unirule Institute of Economics

 

 

Current Events

Moral Foundation behind Voluntary Exchange- Unirule Saloon for Young Scholars (IV) Held at Unirule

The fourth Unirule Saloon for Young Scholars was held on the evening of June 6th at Unirule Institute of Economics. This saloon aims at providing a platform for academic conversations for young scholars from the east and the west. (For more information)

 

 

2014 Forum on Public Utility and Urban Development of China Held in Beijing

The 2014 Forum on Public Utility and Urban Development of China was jointly held on May 29th, 2014 in Beijing by Unirule Urban Development Research Center; Research Institute for Fiscal Science, Ministry of Finance; JunZejun Law Offices(Guangzhou); and Beijing Sihai Changxin Consulting Firm. The forum was proud to be joined by Mr. JIA Kang from Research Institute for Fiscal Science; Professor SHENG Hong and Researcher Mr. ZHAO Nong, Researcher Ms. QIAN Pu, and Academic Assistant Mr. ZHANG Lin, from Unirule; Mr. SUN Jie from the Public-Private Partnerships Research Committee of China Public-Finance Academy; Mr. WANG Qiang from Shanghai Chengtou Holding Co.,LTD.; Mr. WU Yaguang and Ms. ZHANG Ying from Beijing Sihai Changxin Consulting Firm; Mr. YAN Jun from JunZejun Law Offices(Guangzhou); and Mr. ZHAO Xu from Unirule Development Research Center Guangzhou(UDRC). (For more information)


 

Former UN FAO Chief Dr. James Riddell Spoke at Unirule

On the morning of June 10th, 2014, Roundtable on The Framework of the Principles of Land Law System was held at Unirule Institute of Economics. Former UN FAO Chief Dr. James Riddell spoke on “Dynamics of Property Rights: Some American Cases”. Joined in the seminar were Professor SHENG Hong, Research Team Leader of “The Framework of the Principles of Land Law System”; Associate Professor XU Zhenyu, Research Team Member; Mr. ZHENG Zhenyuan, former Department Chief, Ministry of Land and Resources of the PRC; Associate Professor XU Jianguo, National School of Development, Peking University; Professor ZHANG Shuguang, President of Unirule Academic Committee; and Professor FENG Xingyuan, Director of Unirule China Entrepreneur Research Center(UCERC). 

(For more information)

 

Unirule Reading Circle (IV) - On the Selection of Good Leaders in a Political Meritocracy

 On June 9th, 2014, Unirule Reading Circle (IV) was held at Unirule Institute of Economics.

Unirule Reading Circle (IV) invited Professor Daniel A. Bell from Tsinghua University to talk on his upcoming book On Meritocracy: China and the Limits to Democracy. This event was also gracefully joined by Professor YAO Zhongqiu (Qiufeng), President of Unirule; Professor SHENG Hong, Director of Unirule; and Mr. ZHI Zhenfeng, Associate Researcher from Chinese Academy of Social Science.

Professor Daniel A. Bell started by introducing the political ideal of Confucianism. He thinks the selection of good political leaders according to Confucian ideals is different from that of communism because in Communism there was no state, nor would there be need for governing talents. Then he used the meritocratic traditions of the West to illustrate the selection of political leaders in modern democracy, i.e., the voting mechanism. He believes this system is flawed due to two reasons. Firstly, the electorate is irrational. And secondly, the election can be heavily affected by the present interest which could jeopardize and harm future benefits of the people. Professor Bell believes the selection of political leaders in Singapore, which is meritocratic, brought a very helpful lesson for many countries. And this lesson found its roots in ancient China, but it’s only coming back to life in the post 1990s. Professor Bell then compared the single-party system and the multi-party system. He also listed the advantages and disadvantages of the Imperial Civil Examination System. At last, he proposed an improved method to select political leaders in a democracy.(For more information)

 

The Commencement Ceremony of “MAO Yushi’s Class 2014”Held in Beijing

On the afternoon of June 15th, 2014, Unirule held “MAO Yushi’s Class 2014”  commencement ceremony in Beijing. This class is a follow-up of MAO Yushi’s Class 2013 which came to a successful closure last October.

Some of the lecturers of the Class were present, including Professor MAO Yushi, Honorary President of Unirule; Professor SHENG Hong, Director of Unirule; Professor ZHANG Shuguang, President of Unirule Academic Committee; Professor FENG Xingyuan, Deputy Director of Unirule; Professor ZHAO Nong, Vice President of Unirule Academic Committee; Professor WANG Guoxiang from University of International Business and Economics; Mr. LEI Yi, Researcher from Chinese Academy of Social Sciences; Professor WANG Jianxun from China University of Political Science and Law; alongside with all the students of the Class 2014, and students from the previous year. Mr. LI Yunzhe, Project Officer of Unirule Culture and Institution Research Center, hosted the commencement ceremony.(For more information)


 

Kick-Off Meeting of “Business Ethics Declaration of Chinese Entrepreneurs” Held in Beijing

On June 18th, 2014, kick-off meeting of “Business Ethics Declaration of Chinese Entrepreneurs” was held at Unirule Institute of Economics in Beijing. Joining the meeting were Professor MAO Yushi, Honorary President of Unirule; Professor YAO Zhongqiu (Qiufeng), President of Unirule; Professor ZHANG Shuguang, President of Unirule Academic Committee; Professor SHENG Hong, Director of Unirule; Mr. WANG Weijia, President of General Wireless Communications; Professor LIU Yejin, Capital University of Economics and Business; and Ms. LIU Yan, Editor of Caijing Magazine.(For more information)

 

Unirule Reading Circle (V) Held in Beijing

On June 27th, 2014, Unirule Reading Circle (V) on “Where Did the Universe Come From?” by Yew-Kwang Ngwas, was held in Beijing. The author of the book, Professor Yew-Kwang Ng from Monash University, along with Professor MAO Yushi, Honorary President of Unirule; Professor SHENG Hong, Director of Unriule; Professor ZHAO Nong, Vice President of Unirule Academic Committee; and Doctor Candidate Mr. QIN Wei were present at the event. This event was held by Dr. WANG Jun, Director of Unirule International Cooperation Center.(For more information)

 

Unirule Oil Industry Seminar Held in Beijing

On June 25th, 2014, Unirule Oil Industry Seminar was held at Unirule Institute of Economics. Professor Eugene Beaulieu from University of Calgary, Canada, presented “The Impact of Foreign Investment Policy on Stock Returns of Oil Sands Companies”. Present at the event were Professor SHENG Hong, Director of Unirule; Dr. Christer Ljungwall, Swedish Embassy; Dr. QIAN Pu, Deputy Director of Unirule China Center for Public-Private Partnership; and Dr. WANG Jun, Director of Unirule International Cooperation Center. This seminar was hosted by Dr. WANG Jun and interpreted by Mr. MA Junjie, Assistant to the Director of Unirule International Cooperation Center. (For more information)

 

News

Unirule Received Researchers from French Institute of International Relations

 

 On the morning of June 20th, 2014, Unirule Institute of Economics received Dr. Francoise Nicolas, Director of Center for Asian Studies from French Institute of International Relations(IFRI); Dr. Alice Ekman, Associate Research Fellow; and Dr. John Seaman, Research Fellow. Professor ZHANG Shuguang, President of Unriule Academic Committee; Professor FENG Xingyuan, Deputy Director of Unirule; and Mr. MA Junjie, Assistant to the Director of Unirule International Cooperation Center hosted the reception. (For more information)

Current Researches/ Consulting

Business Ethics Declaration of Chinese Entrepreneurs

Over the last three decades, China’s economy has been embracing rapid growth with entrepreneurs being a key drive. The biggest and most significant structural change is the rise of entrepreneurs who constitute the pillar of the society nowadays. Today, the biggest, and the youngest group of entrepreneurs are going international, bridging China and the world.


However, because of the abnormal political, social and ideological environment of China for the last five decades, Chinese entrepreneurs happen to be widely confused and for the last thirty years, the emerging group of entrepreneurs has been suffering from severe anxiety over identity:


Firstly, due to the long time anti-market ideological propaganda by the authorities, many entrepreneurs believe they have the “original sin”. They are led to believe that their profits are based on exploiting the workers, which further leads to their confusion and anxiety over the ethical justification of their fortune and profits.


Secondly, this anti-market ideology also affects the public; leading the public to envy the fortune of entrepreneurs while disrespect them since their deeds are “unethical” and “dishonest”. This public opinion, in return, affects entrepreneurs’ self-identity. They, therefore, can’t convince themselves of the contributions they make to the society, or identify themselves within the social hierarchy.


Thirdly, Chinese entrepreneurs, especially those whose enterprises have gone international, are bothered with this severe identification anxiety. Chinese people stand out in entrepreneurship, so do Chinese enterprises. But what are the driving forces behind? Thanks to the long time culture break-up from the traditions, and the anti-tradition propaganda, Chinese entrepreneurs find it hard to comprehend and identify their cultural and social roles. This leads to the chaotic and restless mental state of entrepreneurs. This also results in the lack of a cultural supportive pillar for enterprise management in China.


“Business Ethics Declaration of Chinese Entrepreneurs” aims to provide answers to the anxiety over identity for Chinese entrepreneurs, to re-identify them by providing authentic and orthodoxical conceptions, to help them mature their thoughts and corporate social responsibilities.

This research project is committed to establishing a value system for Chinese entrepreneurs. To confront the anxiety over identity for Chinese entrepreneurs, this project provides answers to the three questions below:


1.Do Chinese entrepreneurs have the “original sin”?
2.What do Chinese entrepreneurs contribute to the society?
3.How do Chinese entrepreneurs gain respect?

 

Improving Entrepreneurs' Survival Environment: Abolishing Death Penalties in Relation to Fund-Raising Cases in China

In recent years, environment for private enterprises has been taking a deteriorating turn, which attracts attention from the media and the academia. The causes are complex and multi-faceted, including: 1, the abuse of powers by government officials as the government powers expand; 2, “the private-owned deteriorating with the state-owned advancing”(guojin mintui) worsens the picture where the survival environment for private enterprises gets more and more squeezed; 3, external demands of enterprises decrease while internal cost increases; 4, financial suppression escalates with the industrial restructuring and updating lagging behind; and 5, the fluctuation of macroeconomic policies by the government poses uncertainty for production and investment. Moreover, many innocent entrepreneurs were labeled and persecuted for their “gangster behaviors” by the policy and law enforcements in Chongqing city, which was just a glimpse of similar occasional “gangster crashing” movements in the country. Many entrepreneurs are suppressed and sanctioned in the name of “illegal fund-raising”. According to active law, the court can sentence entrepreneurs to death penalty with this charge.


Unirule Institute of Economics is planning to undertake research on the problems of the crime of “illegal fund-raising” and specific method to abolish this charge.


It is fit for Unirule to carry out this research project. Unirule Institute of Economics is a non-profit, non-governmental organization, which focuses on institutional economics with expertise in economics, laws, and politics. It has been dedicated to independent research on China’s institutional reforms and public policies as well as the reform of private finance. In 2003, 2011, and 2013, Unirule held seminars on the cases of Mr. SUN Dawu, Ms. WU Ying, and Mr. ZENG Chengjie. These seminars have been very influential before and after the close of the cases.


Unirule Institute of Economics has undertaken research projects in corporate finance and private finance in recent years. Over the years, Professor FENG Xingyuan has been carrying out pioneering research on private finance and private enterprises. He has gained rich experience and published many publications and papers on relevant topics, including Report on the Freedom of China’s Corporate Capitals, Report on the Survival Environment of China’s Private Enterprises 2012, Research on the Risks of Private Finance, etc. In August 2013, Professor FENG Xingyuan and his research team completed and released the Report on Private Enterprise Fund-Raiding in West Hunan and the Case of Mr. ZENG Chengjie, which analyzed and assessed the process, nature, problems, and causes of a series of events and proposed policy recommendations concerning the fund-raising activities in West Hunan and the case of Mr. ZENG Chengjie. Besides, Professor MAO Yushi, Honorary President and celebrated economist of Unirule Institute of Economics, is also an expert in private finance as Professor FENG Xingyuan.

 

Theoretical Research and Reforming Solution on Opening the Markets of Crude Oil and Petroleum Products

The present system of petroleum industry in China generally has 3 characteristics —— it focuses on state-owned business, price control and restricted access. Thus China’s petroleum industry shows a highly administrative monopoly. A few enterprises have completely monopolized the supply lines from its exploration, mining, refining, wholesale and retail, even to its imports and exports. The research intends to break the administrative monopoly of petroleum industry, stating its objective for the reform and meanwhile figuring out feasible reforming solutions to further liberate the markets of crude oil and product oil.

 

Strategy of Developing Areas and Planning Studies on Urban Industrialization For Yangcheng County in Jincheng City of Shanxi Province

On the basis of rethinking the strategy of development, the transformation of urban functions and the adjustment to industrial structure for Yangcheng County, Unirule Institute of Economics has developed a unique space-institution mathematical economic model, which can reunite three-dimensional space-time of cities and regions, their industries and institutions, and their economic policy analysis. The Unirule Institute will put the strategy into practice. Meanwhile, such mathematical model will be used to simulate market mechanism, to predict the final size for the long-term developing balance of cities and regions, the space distribution of population density and other economic density, the development time and process of cities and regions, the industrial distribution and its development track, and to test the flexibility of economic systems and policies. Thus the model can be used for the spatial planning of urban and rural areas in Yangcheng County.

 

Fairness and Efficiency of Financial Resource Allocation

The first scale problem of the fairness and efficiency of financial resource allocation is whether the overall tax bearing standard falls within the optimal interval, whether the design of tax kinds and the mechanism will harm the development of the economy. The second scale problem is whether the expenditure structure of the existing financial resource allocation, especially transfer payment, obeys the principal of justice, and the efficiency of financial expenditure especially the general administrative costs.
Unirule Institute of Economics is going to undertake research on the fairness and efficiency of financial resource allocation with the emphasis on the second scale problem. In order to fulfill the ideal of justice in a society, the involvement of financial resource allocation is one of the methods, and a universal one. A state can promote justice by implying financial expenditure in two ways: the direct and the indirect way. When applying the direct way of implying financial expenditure measures to promote justice, financial expenditure is directly distributed to individuals to fill the gap of incomes between individuals. Among the financial expenditure items of China are pensions and relief funds for social welfare, rural relief funds as well as social insurance funds. The indirect way is by governments' increase in expenditure used for supporting agriculture and villagers, construction of infrastructure, education and medical treatments. This research is on the justice of financial resource allocation and it deals mainly with whether the transfer payment of financial resources obeys the second rule of Rawls's theory of justice, which states that when violation to the first rule has to be made, resource allocation can be towards the poorest group of people. Besides the justice issue, efficiency is also involved in the financial resource allocation. The administrative costs of China have long been above the average standard of other countries in the world, therefore, a big amount of public financial resources are wasted (trillions of RMB per year as estimated). In regard with the efficiency issue of the financial resource allocation, this research deals mainly with the change of ratio of administrative costs by government agencies (in addition to other costs, such as medical treatments of government officials covered by public budgets, and housing subsidies) of financial income. The reform of the fiscal and taxation system is one of the core issues in China's on-going reforms. This research aims not at a comprehensive examination of the fiscal and taxation system, but a specific aspect which is the "fairness and efficiency of financial resource allocation", and evaluating the status quo of China's financial resource allocation.

Research on China's Urbanization on the Local Level

Urbanization is one of the most essential economic and social policies of the new administration. The emphasis of this policy is posed on medium and small cities as well as townships. As noticed, there are thousands of industrialized townships in China with their social governance lagging far behind their economic development.
Firstly, a big population is located in between the urban and rural level, which can't transform into citizens. Hundreds of millions of people have left their villages and moved to commercialized and industrialized towns. They are in industrial and commercial occupations and it is highly unlikely that they would go back to their villages. However, they are not entitled to local Hukou registration, which further leads to the deprivation of various rights, for example, the right of education. Secondly, public governance in such industrialized and commercialized towns, in general, is at a rudimentary level. The number of officially budgeted posts is asymmetric with the population governed, which leads to the employment of a large number of unofficially budgeted staff and unjustified power to govern. There is a lack of financial resources for the local government to carry out infrastructure construction or to provide public goods sufficiently. Thirdly, the urbanization results in imbalanced development of the structure of society. Since the industrialized and commercialized townships are unable to complete urbanization, urbanization in China has basically become mega-urbanization which is dominated by administrative power. Local governments centralize periphery resources with administrative power and construct cities artificially, which impedes townships and villages from evolving into cities by spontaneous order. Fourthly, industry upgrading can't be undertaken in those industrialized and commercialized townships and the capacity for future economic development is greatly limited. The industry upgrading is, in essence, the upgrading of people. Enterprises ought to draw and maintain technicians, researchers, and investors, to meet their needs for living standards, which cannot be satisfied by townships. Similarly, the lagging urbanization reversely sets back the cultivation and development of the service industry, especially the medium and high-end services.
Unirule Institute of Economics is going to carry out research on urbanization of China on the local level, aiming at improving public governance of the industrialized townships, optimizing the urbanization methodologies, and improving the "citizenization" of migrant workers, therefore further pushing social governance towards self-governance and democracy.

Research on the Public Governance Index of Provincial Capitals

At the beginning of the year 2013, Unirule conducted field survey, including more than 10 thousands of households in 30 local capital cities. According to the field survey, the Public Governance Index was derived. The main conclusions of the PGI report as below:
Three statements summarize the status quo of public governance in provincial capitals. Firstly, public services have generally just gotten a pass. Secondly, protection to civil rights is disturbing. Finally, governance methodologies need improvements. These statements point out the solution: the structure of the society needs to be altered from that with a government monopoly to a civil society with diverse governance subjects. The ranking of provincial capitals in the public governance assessment from the top to the bottom is as follows: Hangzhou, Nanjing, Urumqi, Tianjin, Chengdu, Shanghai, Beijing, Nanchang, Xi'an, Xining, Shijiazhuang, Wuhan, Guangzhou, Yinchuan, Hohhot, Chongqing, Shenyang, Changsha, Jinan, Kunming, Nanning, Haikou, Fuzhou, Guiyang, Harbin, Hefei, Changchun, Zhengzhou, Taiyuan and Lanzhou. Generally speaking, all provincial capitals are graded comparatively low in the three public governance assessments from 2008 to 2012. Even those that ranked the highest in performance have just barely passed the bar of 60 points. Few provincial capitals with poor public governance got over 50 points.
There is a certain amount of correlation between the changes of ranking and improvements in public governance in provincial capitals. In the short term, should the capital cities be willing to raise their rankings, they can achieve this by increasing transparency in government information and civil servants selection, encouraging local non-governmental organizations, or promoting wider participation in local affairs. There is but a weak correlation between public governance and the local GDP level. However, a strong correlation exists between the rankings and the equity of local fiscal transfer payment. That is to say, a region gets a higher ranking in public governance if subsidies to local social security, medical care, education and housing are distributed more to the poorest residents in that region. On the contrary, a region's ranking falls if such resources are distributed with prejudice to the groups with high incomes. This phenomenon shows that equity is of significance in the assessment of the government by the people.
When residents are not satisfied with medical care, elderly support system, water supply and electricity supply, the situation can be improved when they complain to the government. But when similar situations take place in public transportation, environment greening, heating systems, and garbage management, whether by collective actions or filing complaints to government agencies, residents can hardly be satisfied with what the government does.
According to the three public governance assessments carried out from 2008 to2012, we discovered that the Gini coefficient of residents in provincial capitals was decreasing and the income fluidity was improving. From 2010 to 2012, citizens' comments on protection of civil rights are deteriorating, especially in terms of property and personal security. The request for freedom of speech is also increasing. For the moment, citizens in provincial capitals have a low evaluation on the cleanness and honesty of local governments.

Research on Disclosure of Government Information

Room for reforms is getting narrower as the opening-up and reforms deepen. It also leads to a more stabilized vertical mobilization of the demographic structure with the conflicts in the distribution of interests exacerbating. A collaborative system centering the political and law system and involving close cooperation between the police, courts, petition offices, and the city guards (Chengguan) is developed to deal with social unrest. This system is operated by local governments and finalized as a system of maintaining stability (Weiwen). There have been Internet spats over the amount of Weiwen funds. It is unsustainable to maintain such a Weiwen system, and the disclosure of government information is the most significant approach for this end. The essence of public governance is to dissolute conflicts instead of hiding and neglecting them. And one way to achieve this is by sufficient communication. Public and transparent appraisement and supervision cannot be achieved without transparent government information, otherwise the result will be the exclusion of citizens from public governance.
Unirule Institute of Economics has been undertaking research on the disclosure of government information since 2011. This research is carried out not only from the perspective of the regulations for the disclosure of government information which evaluates whether governments of various levels are obeying the regulations and their performances, but also by examining information disclosure laws in developed countries while looking at the status quo in China. There are seven aspects where government information disclosure can be improved, namely, information disclosure of government officials, transparency of finance, transparency in the decision-making mechanism, transparency in administration, transparency in public services, transparency of enterprises owned by local governments, and transparency in civil rights protection.

 

Upcoming Events

Unirule·Journey of World Civilization (I) The Trip of Seeking Resources---Israel 
Unirule Institute of Economics plans to host a 9-day trip to Israel to seek resources. We set up 6 topics for visiting and discussion including Judean Glamour, Faith Core, Jesus Footprint and Wisdom Business. We are going to visit the humanities and natural landscapes in Tel Aviv, Jerusalem and Galilee, etc. Besides, we will develop both formal and informal discussion to unlock the mystery in our minds. Only 30 people are designed to join us in this trip. Unirule·Journey of World Civilization combines visiting, learning and exchanging and disseminates the positive energy of civilization. Welcome to join us! For more information or signing up in advance, please contact:

Email for signing up: wmzl@unirule.org.cn
Contacts: LI Yunzhe 13718353757 ZHAO Huijuan 13661058464

PS.
1.Cost:Applicants must pay RMB1000 for application fee. After approval, the overall cost of the trip should be separately paid for RMB68,000.
2. Tips: Applicants sign up before the official enrollment i.e. the applicants in advance will enjoy 88% discount (cost of the trip RMB59,840 ). The application deadline is April 5, 2014.
3. Cost for family members: The family members of applicants signing up before April 5 can get 70%discount and those signing up after April 5 can also get 80%discount.
4. Gentle hint: For the sake of SAFETY, we don’t suggest that the kids under 10 years old join this trip.


2014 Unirule Education Forum
“2014 Unirule Education Forum” will be held in Beijing in the second half of 2014. This event will focus on the development of private education and social science of higher education.


Unirule Biweekly Symposiums 
Unirule’s Biweekly Symposiums are known in China and throughout the world for their long history of open and in-depth discussions and exchanges of ideas in economics and other social sciences. Over 380 sessions have been held and over 15,000 scholars, policy makers and students, as well as countless readers on the web, have directly and indirectly, and participated in the Biweekly Symposium for close to 20 years. 
Biweekly Symposiums begin at 2 p.m. every other Friday and are free and open to the public.

Schedule 
Biweekly Symposium No. 505: 18th July, 2014
Biweekly Symposium No. 506: 1st August, 2014

Previous Biweekly Symposiums

Biweekly Symposium No. 499
Time: April 25th, 2014
Topic: Why Do I Study Zhang Xun's Restoration?
Lecturer: Professor ZHANG Ming
Host: SHENG Hong
Commentators: MA Yong, YAO Zhongqiu (Qiufeng), LEI Yi, YUAN Gang

Professor ZHANG Ming introduced the historical background of society, political arena, the military junta, and the bureaucrats’ bloc around 1917 when ZHANG Xun’s Restoration took place. He thought the attempt to establish democracy during the era of the Republic of China (1912-1949) was premature, which also revealed the flaws in China’s polity on the institutional level and this flaw remained even up until now. He thought this is also why modern China did not establish democracy. Lastly, he pointed out the three conditions for democracy in China: the wide awareness of democracy, wisdom for transition and time.


Editor: MA Junjie
Revisor: Hannah Luftensteiner

 
 

Comments? Questions? Email us at unirule@unirule.org.cn




If you no longer wish to receive these emails, please reply to this message with "Unsubscribe" in the subject line

“天则”语出《诗经》“天生烝民,有物有则”,取意为“合乎天道自然之制度规则”,其中的“制度”既包括企业、市场等经济制度,也包括政治、文化制度。天则经济研究所是一个非营利、非政府和有着独立精神的民间智库。

北京天则所咨询有限公司,北京天则经济研究所(Unirule Institute of Economics)版权所有。
地址:北京市东城区崇文门外街道崇外大街9号正仁大厦6层  邮编:100062
电话:8610-52988126 Email:unirule@unirule.org.cn