Social cohesion in greater China: challenges for social policy and governance [Online-ausg. ed.] 9789814291927, 9814291927, 9789814291934, 9814291935

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SOCIAL COHESION IN GREATER CHINA Challenges for Social Policy and Governance

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Series on Contemporary China

(ISSN: 1793-0847)

Series Editors: Joseph Fewsmith (Boston University) Zheng Yongnian (East Asian Institute, National University of Singapore) Published* Vol. 12 Tobacco Control Policy Analysis in China: Economics and Health edited by Teh-Wei Hu Vol. 13 China's Science and Technology Sector and the Forces of Globalisation edited by Elspeth Thomson & Jon Sigurdson Vol. 14 Migration and Social Protection in China edited by Ingrid Nielsen & Russell Smyth Vol. 15 China’s Reforms at 30: Challenges and Prospects edited by Dali L Yang & Litao Zhao Vol. 16 Political Booms: Local Money and Power in Taiwan, East China, Thailand and the Philippines by Lynn T White Vol. 17 Politics of China’s Environmental Protection: Problems and Progress by Chen Gang Vol. 18 Oil in China: From Self-Reliance to Internationalization by Lim Tai Wei Vol. 19 China’s Elite Politics: Governance and Democratization by Bo Zhiyue Vol. 20 China’s New Social Policy: Initiatives for a Harmonious Society edited by Zhao Litao & Lim Tin Seng Vol. 21 Oil and Gas in China: The New Energy Superpower’s Relations with Its Region by Lim Tai Wei Vol. 22 China and The Global Economic Crisis edited by Zheng Yongnian & Sarah Y. Tong Vol. 26 Social Cohesion in Greater China: Challenges for Social Policy and Governance edited by Ka Ho Mok & Yeun-Wen Ku

*To view the complete list of the published volumes in the series, please visit: http://www.worldscibooks.com/series/scc_series.shtml

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Series on Contemporary China – Vol. 23

SOCIAL COHESION IN GREATER CHINA Challenges for Social Policy and Governance

editors

Ka Ho Mok

The Hong Kong Institute of Education, Hong Kong

Yeun-Wen Ku

National Taiwan University, Taiwan

World Scientific NEW JERSEY

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LONDON

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SINGAPORE

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BEIJING

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SHANGHAI

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HONG KONG

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TA I P E I

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CHENNAI

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Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library.

Series on Contemporary China — Vol. 26 SOCIAL COHESION IN GREATER CHINA Challenges for Social Policy and Governance Copyright © 2010 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher.

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ISBN-13 978-981-4291-92-7 ISBN-10 981-4291-92-7

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Chapter

Contents Acknowledgments

ix

Notes on Contributors

xi

Introduction: The Quest for a Balanced Economic Growth and Social Development — Ideas and Practices Promoting Social Cohesion in Greater China

1

Ka Ho Mok, Ka Kuen Leung and Yeun Wen Ku PART I: CONCEPTS OF SOCIAL COHESION AND POLICY RESPONSE

41

Chapter 1

43

Social Cohesive Efforts to Meet Youth Development Needs in Tin Shui Wai, Hong Kong Sandra K.M. Tsang and Yiu Kong Chu

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Chapter 2

In Search of Harmonious Society in China: A Social Policy Response

69

Kinglun Ngok and Yapeng Zhu Chapter 3

Social Cohesion in a Divided Society: Lessons from Taiwan’s Welfare Politics

95

Yeun Wen Ku Chapter 4

One Country, Two Cities: A Comparison of Perceived Cohesion in Guangzhou and Hong Kong

121

Simon T.M. Chan, Sammy W.S. Chiu and Marcus Y.L. Chiu PART II: SOCIAL CHANGE AND URBAN GOVERNANCE

147

Chapter 5

149

Governing a Global City in the Context of Political Transition Tai Lok Lui

Chapter 6

Embracing the Market: Examining the Consequences for Education, Housing, and Health in Chinese Cities

187

Ka Ho Mok, Yu Cheung Wong, Richard M. Walker and Xiulan Zhang Chapter 7

Urban Governance from Below: A Case Study of Kaohsiung, Taiwan Shiuh Shen Chien and Yeilong Wu

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PART III: ECONOMIC WELL-BEING, URBAN POVERTY AND PENSION REFORMS

251

Chapter 8

253

Elderly Poverty and Old-Age Pension Reform in Hong Kong: Issues and Prospects Ernest Chui and Lisanne Ko

Chapter 9

Is Welfare Restructuring and Economic Development in Post-1997 Hong Kong in Search of a Cohesive Society?

287

Maggie Lau and Ka Ho Mok Chapter 10 Economic Development and Household Economic Well-Being in Urban China

319

Xiulan Zhang, Terry Lum and Yuebin Xu Chapter 11 The Fragmentation of the Old-Age Security System: The Politics of Pension Reform in Taiwan

339

Shih Jiunn Shi Index

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Acknowledgments The coeditors would like to thank Professor Ian Holliday, Dean of Faculty of Social Sciences, The University of Hong Kong and Professor Yung-Mau Chao, Dean of College of Social Sciences, National Taiwan University for offering the financial support to successfully co-organize the symposium on The Quest for Social Cohesion in Greater China: Challenges for Social Policy and Governance in June 2008. Most of the chapters in this book are selected from this conference. This book is under the auspices of the Center for China Studies, College of Social Sciences, National Taiwan University and the Faculty of Social Sciences of the University of Hong Kong. Thanks must be extended to all contributors of the present volume and the editorial support provided by the publisher and the research assistant Ka Kuen Leung.

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Notes on Contributors Simon T.M. Chan, PhD, is an Assistant Professor in the Department of Social Work at Hong Kong Baptist University. His research interests lie in cohesion of the community, family therapy, clinical processes, help-seeking patterns of men and indigenous clinical practice. He has approximately 20 years of family therapy experience, with expertise in the schools of both modernism and post-modernism. He has received training from leading proponents of family therapy including Steve deShazer, Insoo Kim Berg and Michael White, and has received intensive clinical supervision in structural family therapy from Salvador Minuchin and Wai-Yung Lee. He has published seven books, as well as a large number of book chapters in the area of family practice. He is now an Associate Fellow of the Hong Kong Professional Counselling Association and a Research Fellow of the Center for Youth Research and Practice, Hong Kong Baptist University. Shiuh Shen Chien obtained his PhD in London School of Economics and Political Science and now is an Assistant Professor in Human Geography at National Taiwan University. Prior to that he was visiting research fellow of East Asian Institute at National University of Singapore. His research interests cover human geography, xi

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development studies, geography of globalization, transnational innovation, and political economy of urban and regional development with empirical focuses on transitional and developing countries. His articles in print are able to be seen in Environment and Policy C: Government and Policy, Urban Studies, Regional Studies, Built Environment, Pacific Economic Review, and so on. Marcus Y.L. Chiu received his postgraduate training in psychiatric social work from Manchester Medical School, UK and currently works as an Associate Professor in the Department of Social Work, Hong Kong Baptist University. Apart from teaching and research, Dr. Chiu is actively involved in the field of psychiatric rehabilitation. He is the advisor to all major mental health-related advocacy groups in Hong Kong. His current research interests are social stigma, social inclusion of the mentally ill, and family education for caregivers. He is the co-founder of FamilyLink Program for families with mentally ill patient in Asia. Sammy W.S. Chiu studied social work at the then Hong Kong Baptist College. He went on to do postgraduate social work studies at the Swansea University (Wales), where he was qualified as a social worker. He then studied social service planning at Essex University, where he obtained an MA, and social policy at Sheffield University, where he got his PhD degree. He is currently Professor, Department of Social Work and Director, Center for Youth Research and Practice, Hong Kong Baptist University. His current research interests are mainly surrounding, among other topics, social policy and the promotion of social harmony, social exclusion of young people, and the reclaiming of social citizenship in Hong Kong. Yiu Kong Chu is an Assistant Professor in the Department of Sociology and a Fellow in the Center for Criminology of the University of Hong Kong. He is one of the founding members of the Asian Association of Police Studies and the Hong Kong Juvenile Delinquency Research Society. He is conducting research on organized crime, policing and juvenile delinquency. His book The Triads As

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Business published by Routledge in 2000 is the first comprehensive academic study of Hong Kong Triads, focusing on their roles in legal, illegal, and international markets. He has been invited by various law enforcement agencies in Hong Kong, Asia, and Europe to give guest lectures on organized crime and policing. Ernest Chui is an Associate Professor at the Department of Social Work and Social Administration and Associate Director of the Sau Po Center on Aging of the University of Hong Kong. Dr. Chui’s teaching and research interests lie mainly in social policy, urban development, housing, community work, and elderly issues. His publications can be found in academic journals like International Journal of Social Welfare, Asia Pacific Journal of Social Work and Development, Community Development Journal, Housing, Theory and Society, Australasian Journal on Ageing, and many others; and is also the member of editorial board or reviewer for journals such as International Journal of Social Welfare, International Journal of Sociology of the Family, and Asian Journal of Social Policy. He is also a member of the Review Committee and District Advisory Committee of the Urban Renewal Authority in Hong Kong. Lisanne Ko is an Assistant Professor at the Nethersole School of Nursing of The Chinese University of Hong Kong and Fellow of the Sau Po Center on Aging of the University of Hong Kong. She has been working in the fields of health and the elderly. Dr. Ko has extensive research experience on the elderly, ranging from active aging, housing, social, and health care services to financial sustainability; besides colonization and indigenous medicines. Her teaching areas are mainly medical sociology, sociology of aging and culture and health. Yeun Wen Ku is a Professor and Department Head at the Department of Social Work, National Taiwan University. He was awarded his PhD at the University of Manchester, and then taught social policy at Department of Social Policy and Social Work of National Chi Nan University, Taiwan for many years, before he was recruited to the

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current position. He has written widely on welfare development and policy debates in Taiwan, extending to comparative study on East Asian welfare. His publications include single-authored Welfare Capitalism in Taiwan (1997, Macmillan), many collected volumes (e.g., Welfare Capitalism in East Asia, Palgrave, 2003), and journal papers both in English and in Chinese. He is now also the Chair for Taiwanese Association of Social Policy (TASP) and the editor for Social Policy and Social Work, which is the highest recommended social policy journal published by TASP in Taiwan. Maggie Lau is an Assistant Professor in the Department of Social Sciences at the Hong Kong Institute of Education. She obtained her PhD from the University of York in the United Kingdom. She received her MPhil and Bachelor degrees from the City University of Hong Kong. She was a Postdoctoral Research Fellow in the Department of Social Policy and Social Work at the University of York (2008). She has also worked as an Honorary Research Fellow of the Committee on Youth Smoking Prevention of Hong Kong since 2005. Her current research interests are poverty and social exclusion, child poverty and child well-being, adolescent health behaviors, as well as development studies. Her publications will appear/appeared in the Journal of Societal and Social Policy, Policy Studies, Benefits, Public Administration and Policy, Asia-Pacific Journal of Public Health, Nicotine and Tobacco Research, and Social Development Issues. Ka Kuen Leung is a Research Assistant of the Faculty of Arts and Sciences at the Hong Kong Institute of Education. He obtained his MPhil and Bachelor degrees from the School of Journalism and Communication at the Chinese University of Hong Kong. Tai Lok Lui is a Professor of Department of Sociology at the University of Hong Kong. His recent interests are in the areas of class analysis, economic sociology, and urban sociology. His recent publications include Hong Kong: Becoming a Chinese Global City (Routledge, 2009), Hong Kong, China: Learning to Belong to a Nation (Routledge, 2009), Hong Kong Toy Story (MCCM, 2005),

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and Consuming Hong Kong (Hong Kong University Press, 2001). He is also a columnist for leading newspapers and magazines in Hong Kong and Mainland China. Terry Lum is an Associate Professor at the University of Minnesota’s School of Social Work. His research interests are in aging policy and services. He was a co-investigator of the evaluation of the first Green House project in Mississippi and of a Center for Medicaid and Medicaid Services funded project to examine states’ efforts to rebalance long-term care. Dr. Lum served on the national advisory committees of the Cash and Counseling Program and the Institute of Geriatric Social Work. In 2001, Dr. Lum was awarded the prestigious Hartford Geriatric Social Work Faculty Scholar award. Dr. Lum received his B.Soc.Sc. in Economics and Master of Social Work degrees from the University of Hong Kong. He received his PhD degree in social work from the Washington University in St. Louis. Before he joined the faculty of the University of Minnesota, he had worked as a social worker in both Hong Kong and the United States. Ka Ho Mok is the Associate Vice President (External) and Dean, Faculty of Arts and Sciences of the Hong Kong Institute of Education. Before joining the Institute, he was an Associate Dean and Professor of Social Policy, Faculty of Social Sciences, University of Hong Kong. He was a Chair Professor in East Asian Studies and the Founding Director of the Center for East Asian Studies at the University of Bristol. He is now a visiting Professor of the Graduate Education and Centre for East Asian Studies, University of Bristol, United Kingdom. He also served as an Associate Dean of Faculty of Humanities and Social Science at City University of Hong Kong before taking up the position at the University of Bristol. Ka Ho had his undergraduate education in Hong Kong and he got his higher degrees from Chinese University of Hong Kong and London School of Economics and Political Science, University of London. Ka Ho is a founding editor of Journal of Asian Public Policy and Comparative Development and Policy in Asia Book Series (published by London: Routledge, Taylor & Francis Group). He has published extensively in

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the fields of comparative education policy, policy studies, and governance and social development in contemporary China and East Asia. Kinglun Ngok, PhD, is currently Professor at School of Government and Research Center for Public Administration, Director of Institute for Social Policy and Social Security, Sun Yat-Sen University, Guangzhou, China. His research interests focus on social policy, public policy, and administration in China and labor and education policy in China. His academic articles appear in International Labor and Working Class History, International Review of Administrative Sciences, Social Policy and Administration, Asia Pacific Education Review, Asian Review, Issues and Studies, Problems of Post Communism, Chinese Law and Government, Education and Society, Asian Profile, Journal of Social and Societal Policy, and some Chinese journals. His recent publications include Labor Policy in China: Marketization and Globalization Perspectives (Beijing: Social Sciences Academic Press, 2007) and Social Policy in China: Development and Wellbeing (Bristol: Policy Press, 2008). Shih Jiunn Shi is an Assistant Professor of Graduate Institute of National Development at the National Taiwan University. He received his PhD from the Faculty of Sociology, University of Bielefeld, Germany, in 2007. In his dissertation, Dr. Shi explores the relationship between social policy and the life course in rural China. During his doctoral study, he has also worked as a lecturer (wissenschaftlicher Mitarbeiter) in the Faculty of Sociology, University of Bielefeld, for five years, teaching several undergraduate and postgraduate courses in European welfare states and comparative pension policy. He has published papers in several journals including the Social Policy and Administration and the Zeitschrift für Gerontologie und Geriatrie. Currently, he is conducting research projects on the development of social policy in China; and also collaborating with other scholars of the National Taiwan University in the research on East Asian social policy. Sandra K.M. Tsang is a Head and Associate Professor of the Department of Social Work and Social Administration of The

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University of Hong Kong. She is a Chartered Clinical Psychologist, a Registered Social Worker, an Accredited Family Mediator and a Fellow of the Hong Kong Psychological Society. Her research, publications, and media profile focus on children with special educational needs, parent education, children and youth development, and special education. She was awarded the HKU University Teaching Fellow for outstanding teaching, and frequently gives media presentations and public lectures. She is a current member of the Commission on Youth and the Hong Kong Council of Social Service Executive Committee. She had served as Chairperson of the Committee on Home-School Cooperation of the Education and Manpower Bureau, member of the Education Commission, member of the Review Panel on Family Services in Tin Shui Wai, Council member of the Hong Kong Psychological Society and Chairperson of the Division of Clinical Psychology. She is a Christian and has two teenage children. Richard M. Walker is a Professor of Public Management and Policy at the Kadoorie Institute at the University of Hong Kong and Cardiff University (United Kingdom). His research examines question of public management with particular reference to the determinants of organizational performance, innovation, red tape, and strategic management. Policy work focuses upon governance issues in the field of environment and sustainable development. Richard’s work has been published by Cambridge University Press and Oxford University Press, and has articles in Journal of Public Administration Research and Theory, Public Administration, Public Administration Review, Policy and Politics, and Urban Studies. He has received grant awards from the UK Economic and Social Science Research Council and the Chinese National Science Foundation and provided consultancy services to APEC, OECD, and governments in Hong Kong and the United Kingdom. Yu Cheung Wong, PhD, is an Assistant Professor of the Department of Social Work and Social Administration, University of Hong Kong. He is the Director of Master Social Work Programe at his department. He has also served as the coordinator of MSW/MSSM collaboration

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programe between HKU and Shanghai Fudan University. He teaches community development, social work research and social policy for students at both undergraduate and postgraduate levels. He currently supervises two PhD students. His major research areas include digital inclusion, social security, social work education, and urban renewal in Hong Kong and China. He is active in conducting consultancy study for various government departments such as Social Welfare Department, Office of Government Chief Information Office, Urban Renewal Authority, etc. He is also active in conducting service evaluation for local NGOs, such as FuHong Society, Society for Community Organizations, and Harmony House. Yeilong Wu obtained his PhD in Urban Planning at National Chengkung University. He is a very experienced urban-related practitioner in Taiwan, and worked as Director of Bureau of Urban Development of Kaohsiung City Government, Taiwan, and Deputy Secretary-General of Kaohsiung City Government. His interests cover globalization of Asian cities, urban development (including planning, design, and renewal) as well as sustainable management. Yuebin Xu, PhD, has worked with the School of Social Development and Public Policy, Beijing Normal University since 2003. He obtained his PhD degree in social policy from the Department of Social Work and Social Administration, the University of Hong Kong in 1997. Before joining Beijing Normal University, he worked at China Civil Affair College of the Ministry of Civil Affairs for over ten years. His major research interest includes social services management, poverty, and social security. Xiulan Zhang obtained her PhD degree in social welfare from the University of California at Berkeley, United States. She is a Professor and Director of the Institute of Social Development and Public Policy, Beijing Normal University, where she teaches public organizational theories, public finance, social problems, and social policy in China, as well as research methods. Currently, she is the national lead expert in social assistance; is a member of the Academic Advisory

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Committee of the Ministry of Civil Affairs, and the Academic Advisory Committee of the National Aging Association; the Director of Social Safety Net Research Base of the Ministry of Education; the vice-president of the National Social Policy Association in China. She is also on the Expert Committee of the State Council Urban Resident Health Insurance Evaluation Commission, China. Yapeng Zhu, PhD, is currently Research Fellow at the Institute for Social Security and Social Policy and the Center for Public Administration and Associate Professor at the School of Government, Sun Yat-Sen University, Guangzhou, China. He is editor of Public Administration Review (Guangzhou) and Chinese Public Policy Review (Guangzhou). His research focuses on social policy, and housing research in China. Main publications include Housing Reform in China: Policy Innovation and Housing Inequality (Sun Yat-Sen University Press, 2007), “Urban governance, neoliberalism, and housing reform in China” (With James Lee), the Pacific Review 19(1) (2006). His recent research project focuses on social policy and NGOs in China.

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1 Introduction: The Quest for a Balanced Economic Growth and Social Development — Ideas and Practices Promoting Social Cohesion In Greater China Ka Ho Mok,* Ka Kuen Leung* and Yeun Wen Ku †

In the last few years, governments in Mainland China, Taiwan, and Hong Kong have tried to promote social harmony through adopting various measures to help those people who have been socially marginalized throughout the period of the Asian financial crisis in 1997 to better adapt to the rapidly changing socioeconomic environment. Unlike the precrisis period that governments and people of these societies had enjoyed a very steady economic growth, as what the World Bank called it as an “East Asia

*Faculty of Arts and Sciences, The Hong Kong Institute of Education. †Department of Social Work, National Taiwan University. 1

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2 Ka Ho Mok et al. miracle”, nowadays citizens living in these economies confront unpredictable economic growth, widening gap between the rich and the poor, growing unemployment, reduction in wages and immense pressures for enhancing their global competitiveness by cutting production costs in an increasingly globalizing economy context. To strike for a balance between economic growth and social development, these governments have begun to review their economic development policies, adopting new strategies to promote economic growth with considerations given to enhancing social harmony. This chapter attempts to set the context for the present volume, with particular reference to examine the notions of social cohesion and social harmony in the context of three Chinese societies, namely, Mainland China, Taiwan and Hong Kong.

1. INTRODUCTION Despite the fact that the importance of “social cohesion” has been recognized by a growing number of nation states across different parts of the world, we are still having difficulty in reaching any consensus on how “social cohesion” should be defined. Even when people can come to an agreement of the definition of “social cohesion”, they would encounter problems in agreeing on ways to promote “social cohesion” because of the tensions between the promotion of social cohesion and the quest for economic competitiveness in the global market place. This chapter sets out in this wider context to critically review the notion of “social cohesion”, examining also the relationship between promoting “social cohesion” and social policy and governance. More specifically, this chapter highlights some critical themes when debating about social cohesion, with particular reference to how the concepts of “social cohesion” and “social harmony” have been incorporated in public and social policies in Mainland China, Taiwan and Hong Kong. The final part of the chapter outlines the structure of this book and major arguments of chapters in the present volume.

2. UNDERSTANDING SOCIAL COHESION AND SOCIAL HARMONY People hold different interpretations of the notion of “social cohesion”. According to the Oxford Dictionary, the word “social” means

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“the organization and relations between people and communities” and “cohesion” means “the tendency to stick together”. However, when the concept is interpreted in the empirical world, we should pay attention to the following aspects, including an identification of the form of society, location of the positions and roles of different social groups within, as well as clarification of the constitutive elements of cohesion. At the personal and community level, social cohesion is often defined as an “affective bond (feelings of solidarity) between citizens”; friendship, relationship and family are thus the manifestations in social lives (Chipkin and Ngulunga, 2008, p. 61). This line of thought runs coincident with “social capital” theory, which explicates that features of social organization such as networks, norms and social trust … facilitate coordination and cooperation for mutual benefit (Putnam, 1995). Social cohesion is essential to the making of a good social life as seen in this light. Moreover, for “social cohesion” is an ambiguous concept, other scholars tend to understand and characterize it not only by its own virtues, but also by the deficiency of its absence, in order to make the concept more concrete. Jenson (1998) identifies five pairs of dimension of social cohesion: belonging/isolation, inclusion/exclusion, participation/noninvolvement, recognition/rejection, and legitimacy/illegitimacy. Based upon this categorization, Bernard (2000, p. 19) introduces the sixth dimension, equality/inequality, and further develops these six dimensions into a typology by which social cohesion can be systematically examined in the empirical world (see Table 1). Table 1.

A Typology of Dimensions of Social Cohesion. Character of the relation

Spheres of activity Economic Political Sociocultural Source: Bernard (2000, p. 19).

Formal Insertion/exclusion Legitimacy/illegitimacy Recognition/rejection

Substantial Equality/inequality Participation/passivity Belonging/isolation

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In the typology, Bernard divides “spheres of activity” into three domains: economic, political, and sociocultural and character of relation into two forms: formal and substantial. Formal relation refers to the formal principles as explicated by state policies, while substantial relation the substantial reality that is the outcomes of these policies. This conceptualizes social cohesion as both guiding principles and goals of policies (independent variable affecting policy) and policy outcomes (dependent variable affected by policy). In fact, what also makes the definition of social cohesion so complicated is that its measurement encompasses indicators of objective well-being and also of subjective well-being of the residents, whose criteria and judgment of social cohesion vary with the economic, political, and sociocultural specificities of the place within which they are living and on which they are drawing reference (Duhaime et al., 2004). Besides defining the scale and form of social cohesion, the intrinsic nature of social cohesion also needs critical examination. To many people, “social cohesion” used as a policy metaphor and knowledge can trigger a moral imagination that it “deals with how participatory relations ought to operate, relies heavily on representation and has emotional (rather than rational-calculative) foundations (Harris and William, 2003, p. 206, original emphasis). This imagination renders an intuitive good conception of social cohesion in the absence of an investigation into its actual meaning. However, the seemingly selfevident appraisal of social cohesion draws criticism from critical perspective, which posits that consensus-building and seeking common ground in public arena have always been treated as a trick of assimilation and an excuse for negligence and suppression of social differences (Fraser, 1997). According to Maloutas and Malouta (2004, p. 452): taking it (social cohesion) at face value limits its scope to a vague positive target, on which almost anyone can agree, but which can at times legitimize policies that do not really face issues of oppression and inequality. Putting the above observations together, it is clear that we would encounter difficulty in building a consensus for how social cohesion should be defined and be examined. The confusion and ambiguity, yet also the vitality, of the concept are best illustrated by a wide range of

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social cohesion studies across different parts of the globe. For instance, Canada is among the first tiers of Western countries to address social cohesion as part of government agenda for promoting multiculturalism to order to measure up to the worldwide recognition as an immigrant and culturally diverse society. Other research may focus on racism in Africa (Chipkin and Ngulunga, 2008), ethnicities in Europe and Central Asia (Heyneman, 2000), economic inequality and insecurity in Latin America (Tokman, 2007). That being said, social cohesion is interpreted as a “quasi-concept” in regard to the diversity of both relevant academic and policy literatures (Bernard, 2000). On the one hand, the concept maintains a vagueness so as to be adopted and explored by various actors in various situations. On the other hand, it is concrete for it has to draw empirical relevance to the reality. To avoid a static definition of social cohesion and to link it to the empirical world, Chan et al. (2006, p. 290), therefore, propose a broad and an integrated definition of social cohesion, referring it to a state of affairs concerning both the vertical and the horizontal interactions among members of society as characterized by a set of attitudes and norms that includes trust, a sense of belonging and the willingness to participate and help, as well as their behavioral manifestations. Members of society are defined as actors at all levels: individuals, groups, organizations and institutions. Differing from the definitions discussed earlier which focus on examining the constitutive elements and virtues of social cohesion, Chan and colleagues highlight the importance of the context and the dynamism of social cohesion as an exposition of the juxtaposition of interactions of all stakeholders in the society. This thesis is welltaken in this present volume in order to examine the notion of “social cohesion” in this fast-changing world in the midst of globalization.

3. THE RELATIONSHIP BETWEEN SOCIAL COHESION AND SOCIAL POLICY/ GOVERNANCE Although we have difficulty to come to a simple agreement on the definition of “social cohesion”, a growing body of literature related to social cohesion has emerged in the last decade or so (see for example,

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Popay et al., 2006; Silver, 1995). Sen (1990, 1992, 2000) contributes to the discussion of social exclusion by providing a useful framework for analysis. According to Sen, social exclusion is caused by various deprivations, which prevent people from having “a minimally decent life” (Sen, 2000, p. 10). Sen argues people suffering from social exclusion are the result of the inherence of deprivation and the intention of deprivation. Under the notion of “inherence of deprivation”, people experience constitutive deprivation, which is related to some kinds of social exclusion that are intrinsically part of deprivation and instrumental deprivation, which is excluded from some other things is not capability deprivation on its own, but rather, this type of exclusion may further result in deprivation. In regard to intention of deprivation, there are two major forms of exclusion, including active deprivation, which occurs when a group of people are deliberately excluded by policies or regulations; and passive deprivation, which comes about through social processes in which there is no deliberate attempt to exclude (Sen, 2000, p. 21). Obviously, the discussions on “social exclusion” and the debates regarding “social cohesion” should go hand in hand. Having discussed the complexity of the concepts of “social exclusion” and “social cohesion”, one may ask how these concepts are related to social policy formulation and modern governance in the globalizing world. In particular, some key questions would be raised when debating the relationship between making social policy decisions and the promotion of social cohesion, including: 1. Is there a particular group of people being excluded, marginalized, discriminated or deprived in the society? What particular groups of people are they? 2. What are the reasons for that? Economic, political, cultural, or religious factors? 3. What needs to be done for the state, market and civil society to integrate the society? The first two questions simply deal with the identification of the socially excluded actors and the social structures behind or that

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engender the exclusions. While the third question is the most challenging and controversial one for it points to the solutions of the problem, questions like “who should play what part to solve the problem?” and “who should be blamed for the problem?” surely raise the heat of the debate. Beyond scapegoating, these questions touch upon the critical questions regarding the arrangements of the economic, political, and social systems, of which juxtapositions ultimately affect the way governance is structured. From the administrative perspective, social cohesion studies are concerned about the management of a society than the understanding of personal feeling, though the two are inextricably linked. To eradicate the social exclusion and minimize the social conflict, governments are required to undergo an all-round overhaul of the economic, political, and social institutions and the social policies which each institution is responsible for (see Wong et al., 2006). Social policy is often meant by the policy that affects the social rights and economic well-being of people. According to Mkandawire (2004, p. 1), social policy is defined as collective interventions in the economy to influence the access to and the incidence of adequate and secure livelihoods and income. It is notable that the major force behind that intervention has always been the government through the means of welfare provisions, such as on education, health care, housing, social security and pension. As argued earlier, social cohesion can be referred as the outcome of social policy as well as the necessary condition on which social policy can be successfully implemented. But whether the provision of social policy/social service can bear fruit depends on the way the society is governed. Therefore, the quality of governance is essential to social policy delivery because it sets the tone for design, representation, coordination, and execution of social policy. To policymakers, social cohesion should be promoted in order to push forward policy agendas smoothly and ensure legitimacy, which are the foundations of good governance. Traditionally, governance is a synonym for government and government-centered actions, but recently governance is emerging as a new paradigm (Jessop, 1998). According to Rhodes (1996, pp. 652–653, original emphasis), “governance signifies a change in

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the meaning of government, referring to a new process of governing; or a changed condition or ordered rule; or the new method by which society is governed”. Governance in pluralistic and diverse societies is no longer confined to dominance, authority, and exercise of state power, but rather a static-initiated mechanism of seeking ways to manage the society in an effective and efficient way, in recognition of the fact that the role of government has been retrenching due to the rise of market power and civil society (Merrien, 1998). Stoker (1998) succinctly outlines five propositions for this new kind of governance: 1. Governance refers to a complex set of institutions and actors that are drawn from and also beyond government. 2. Governance recognizes the blurring of boundaries and responsibilities for tackling social and economic issues. 3. Governance identifies the power dependence involved in the relationships between institutions involved in collective action. 4. Governance is about autonomous self-governing networks of actors. 5. Governance recognizes the capacity to get things done which does not rest on the power of government to command or use its authority. It sees government as able to use new tools and techniques to steer and guide. Noting that government alone cannot solve every problem, “trust” is always posited as a form of social virtue that binds society together (Fukuyama, 1996), acts as a changing agent of political attitude in government spending (Rudolph and Evans, 2005), and is a facilitator in formulating the public policies and enhancing the governance (Ku, 2009). Here, trust is essential to the relationship among individuals and groups and their relationships with the government. Whereas trust is vital to the harmonious relationship between the government and the society, especially in a fractionalized, pluralized, and democratic society, the conception of policymaking should change from a simplistic and mechanical “means-and-ends relationship” to “instrument mixes and governance” that places more

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emphasis on “increased coordination, partnership, civil participation, and network development” (Ku, 2009, p. 155). Seen in this light, social trust can no longer be simply implemented and ordered by the state, rather it is a “social atmosphere and culture” that the state can indirectly promote by encouraging civic participation and shared actions with voluntary associations (Ku, 2009, p. 154). Considering the importance of social cohesion in public policy and governance, a growing number of governments have swiftly committed to pushing the agenda for social cohesion. It was particularly prevalent in Canada in the 1990s and Europe in the 2000s (Hulse and Stone, 2007). Similarly, other transnational intergovernmental organizations are keen to follow the trend. For instance, the Council of Europe defines social cohesion as “the capacity of a society to ensure the welfare of all its members, minimizing disparities and avoiding polarization” (Council of Europe, 2004; quoted in Turzi, 2008, p. 131). In Latin America, the Economic Commission for Latin America and the Caribbean (ECLAC) refers “social cohesion” both to the efficacy of established social inclusion mechanisms and to the behavior and values of members of society (ECLAC, 2007; Quoted in Turzi, 2008, p. 131). In one of the United Nations’ meeting, Secretary-General Ban Ki-moon once addressed, “Social cohesion” is crucial to efforts to reach the Millennium Development Goals — our common vision for building a better world in the 21st century. We cannot meet our goals on hunger, poverty, education, environment and health, if economic growth benefits a few while many others are woefully left behind” (United Nations, 2007), despite his vision of social cohesion is more on a global cooperation level.

4. CRITICAL THEMES IN UNDERSTANDING SOCIAL COHESION There are three major themes related to the quest for social cohesion in the midst of rapid social and economic changes, namely, social cohesion and economic competitiveness, social cohesion and urban governance, and social cohesion and welfare regime.

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4.1. Social Cohesion and Economic Competitiveness While it is illusory to perceive there is only little discussion on social cohesion in Western societies, where individual liberties and rights always precede societal compromise and consensus-building (Wong et al., 2006), the similar issue of social inclusion/exclusion in relation to economic growth has been intensively researched. In fact, modern studies on social inclusion can be traced back to French sociologist Durkheim’s studies on social solidarity in the 19th century. His categorization of “organic solidarity” and “mechanical solidarity” has vividly captured the transformation of modern society from agricultural economy to industrial economy. His concern has linked work to the moral dimension of solidarity, worrying that division of labor could lead to the dismantling of collective norm and social order (Levitas, 2005, p. 22). Social conditions undoubtedly have changed drastically for the past two centuries, thus the way how social cohesion is to be achieved entails an overhaul, but the concerns for social cohesion and economic inequalities remain persistent and passionate. One of the most pressing concerns of social cohesion is its compatibility with economic globalization (Eraydin, 2008). The inquiry is whether in the context of globalization the economic competitiveness of a region can go hand in hand with its cohesion. From a leftist’s perspective, globalization is an extension of capitalism and wealth accumulation, aggravating the inequality between the rich and the poor and undermining social justice. To reconcile the left and right, Giddens (1999) proposes the political doctrine of “third way”, fostering economic freedom and prosperity as advocated by the right, while promising equally distributed wealth and basic needs of all people as promised by the left. His idea is empirically supported by research studies (Ritzen, 2001; Rodrik, 1999) that generally indicate that the more cohesive the societies are, the stronger economic growth they possess because all stakeholders in the society are more willing to come together to confront the challenges. It is against such a wider context that a number of governments are now targeting economic growth and poverty reduction without

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undermining the conditions of social equality and justice. In accounting for the social policies and welfare system in Britain under the leadership of the New Labor in the 1990s, Levitas (2005) argues a competition existed between two discourses of social exclusion: redistributionist discourse (RED) and social integrationist discourse (SID). The redistributionist discourse articulates social cohesion with social justice and points to a more equal and just distribution of wealth and resources. The social integrationist discourse aims to achieve social cohesion through an accessible system to accommodate as many people as possible. Similar to Durkheim’s idea, the New Labor administration chose to adopt the social integrationist discourse through maintaining the quality of life by engaging everyone into the employment market.1 Obviously, this policy agenda of New Labor was not unprecedented and surely it would not be the only one to do so. For example, in 2005, the European Union re-launched the Lisbon Strategy. The premise of this strategy is set to promote social inclusion/ cohesion through creation of better jobs and maintaining sustainable economic growth (Dieckhoff and Gallie, 2007). It is in the quest for a solution to make social cohesion and economic competitiveness compatible and even synergistic (Fainstein, 2001) that governments worldwide are now rethinking the relationship among the state, market and society and reconfiguring it into a cooperative and reciprocal one.

1

There is a crucial point demarcating social justice from social inclusion that can be noted here. As Gray (2000) points out, “inclusion” does not necessarily imply “equality”. What social inclusion concerns about instead is the provision of fair opportunities of access and satisfaction of basic needs. It means that once basic needs are met, the matter of distribution will become irrelevant. Following this thought, it is explained, for example, that universal public services, such as libraries, are based upon the idea of inclusion rather than equality. As Gray (2000, p. 31) succinctly puts it, “the ideal of inclusion, then, is distinct from any ideal of equality, but it acts as a constraint on inequalities at both the bottom and the top”. Apart from achieving equality, accommodating social differences is also the core element of social justice (Lister, 2000), which recognizes the heterogeneity of a society rather than to search for a homogeneity.

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4.2. Social Cohesion and Urban Governance Social cohesion is almost a universal virtue, regardless of the size and form of a region. Yet, it is the social cohesion in cities that has caught the spotlight. What drives the problem of social cohesion in cities so unique is that they are more open, inclusive, and pioneering, and therefore are more exposed to influences and forces beyond their own borders than rural areas. Not only physical infrastructures have to be rebuilt to accommodate and cater for a diverse population, values, and identities of people are also always subject to constant contestation and reconfiguration. As Forrest (2009, p. 291) explains, “cities … will have an influx of newcomers, new housing areas, new employment patterns, and an almost inevitable weakening of the intermediate institutions that have previously constituted much of the social cement. This may relate to the weakening of traditional family structures, trade unions, and other political organizations, religious groups or the erosion of less visible norms and routines which have grown up in more settled times”. As a result, social cohesion in urban setting is under greater challenge than in rural areas, giving rise to the inquiry that how urban governance will be reformed accordingly. Drawing on the case of Britain, Kearns and Forrest (2000, p. 1006) demonstrate that urban governance occurs simultaneously at different spatial scales: national/interurban, city/city-region and neighborhood, with each scale tackling different dimensions of social cohesion, such as fostering “common values/civic culture”, “social solidarity/wealth disparities”, “place attachment”, and “social networks/social capital”. For different governance situations vary in different spatial scales, the realization of social cohesion, therefore, is largely determined upon interconnectedness of those scales, which may be “potentially contradictory as well as complementary” (Kearns and Forrest, 2000, p. 1013). As one of the urban studies leading scholars Manuel Castells postulates, we are now living in a globalizing and “network society”. According to Castells, a network society is characterized with global networks of wealth, power, information, and images, which circulate and transmute in a system of variable geometry and dematerialized

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geography (Castells, 1997, p. 359). In this regard, we can argue that a rigid physical locality, such as cities and rural areas, may not be a valid unit of analysis, because people in cities are heterogeneous due to different networks they are engaging in. In line with this logic, governments will have to devise and differentiate workable strategies to cope with social demands at all levels. As Kazepov (2005, p. 32) explains the networking mechanism of urban governance, for example that, “passive policies (such as unemployment or social assistance benefits) are still defined mainly at the national level, where activation policies are defined more at the local level”. Taking education as example, it has long been hailed as an important tool of integrating children from all walks of life by empowering them with knowledge and social skills. While education policy may be decided on a national level, the provision of information services, for instance, public libraries in the communities for enhancing literacy for minorities, is largely locally addressed (see Caidi and Allard, 2005; Pateman, 1999). An integrated policy framework is therefore needed to make different programs and plans of different levels complementary to each other. All in all, to improve the efficiency of public service delivery, modern governments need to assert their roles in establishing, coordinating, and mobilizing the responsible stakeholders in society to rally behind the common cause of good urban governance. But the biggest obstacle toward this goal is that government no longer has absolute power to direct all good wills and resources to its favor, for many things are now out of its command and control.

4.3. Social Cohesion and Welfare Regime Marshall (1950) defines social rights as the rights of citizens to social welfare on the basis of citizenship. On this basis, whether citizens conceive the society in which they are living in is cohesive is often based on the benefits they can receive as equal individuals under just law. Hence welfare system is critical to making social cohesion and economic well-being compatible. Esping-Anderson (1990), in his seminal book The Three Worlds of Welfare Capitalism, identifies the liberal, conservative, and social democratic types of welfare regimes.

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Each of them entails a different kind of relationship among the state, market, families, and individuals: For liberal regime, the government steps back in public spending and lets the market function to its full extent; for conservative regime, the government also favors a strong market and remains limited in state intervention, while at the same time emphasizing family support on which people in need can rely; for social democratic regime, the government takes up a progressive role in providing (universal) public services to citizens and redistributing wealth and resources. The social democratic policy agenda is similar to Anthony Giddens’s “third way” theory discussed in the earlier part. Based upon Esping-Anderson’s general categorization, there are further attempts to identifying the welfare systems on a regional level, which can be easily shown in the literatures on East Asia, including places like Japan, South Korea, Taiwan, Singapore, and Hong Kong. Theoretical concepts like “Confucian welfare state” (Jones, 1993) and productivist welfare capitalism (Holliday, 2000) are proposed to highlight the economic, cultural and historical developmental commonalities among those states and argue that they have contributed to the evolving of the so-called “East Asian welfare model” (Aspalter, 2006). However, all these conceptualizations discussed above have recently been criticized, given the empirical reality has been challenged and rendered the presumptions of the theory irrelevant for the East Asian countries (Wilding, 2008). The reason is the previously taken-forgranted high economic growth, justifying for low welfare spending in East Asia, cannot stand in the midst of the global economic crisis and the growing challenges resulted from the globalizing economy. To a larger extent, another argument for welfare reform worldwide is because nowadays working class is no longer the only victims or laggards in the globalizing economy, whereas middle class, career professionals and young university graduates who previously enjoy a considerable stable work and living are also exposing to new risks and uncertainties, which are largely beyond their control and sometimes even beyond their nation states’ control. Yet, nation states are urged to reconsider the rationale of their welfare systems to cope with the changes in employment market. For instance, in explaining the effects

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of globalization and economic liberalization upon European cities, Kazepov (2005) attributes the differences of those effects to corresponding welfare regimes (such as, North Europe as neostatist welfare regime; Continental Europe as neocorporative welfare regime; South Europe as neofamilistic welfare regime) that despite the seemingly unstoppable force of globalization, local welfare institutions still provide a structured normative, cognitive, and regulative context for local policy deliveries and can act as filter, moderator, and intermediary to external contextual change. To recapitulate, we have brought up three recurring themes of social cohesion in recent years: economic competitiveness, urban governance, and welfare regime. Despite they are addressed individually above, they have strong interrelations and constitute a holistic challenge to social cohesion worldwide: Under the context of neo-liberalism, economic competition has become the core task of every government. It should strive for economic efficiency while at the same time ensuring social equality, especially for those lagging behind in the globalizing economy. Therefore, governance, especially urban governance in diverse and pluralistic societies, is being challenged to deliver appropriate social policy that rightly addresses the social problems facing each particular social group on one hand and that is also fostering and compatible with economic growth and development on the other hand.

Construed as such, social cohesion needs case-specific examination of every place to take the social, economic, and political contexts into account.

5. CHANGING POLICY CONTEXTS FOR PROMOTING SOCIAL HARMONY IN GREATER CHINA In the previous part, we have discussed three major themes related to the promotion of social cohesion in the rapid social and economic change context. In this section, we will focus on how these themes are interpreted, articulated, adopted, and responded in the three Chinese societies, Mainland China, Taiwan, and Hong Kong.

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5.1. Mainland China: Social Harmony as New Governance Paradigm Throughout the last 60 years, the Chinese government has undergone three phases of policy paradigms since its establishment in 1949: “catching-up development policy” (1949–late 70s), “unilateral economic growth” (1978–2003) and “people-centered development” (2003 onwards). For the first phase, the core principle of development was to deliver policies and programs to increase the productivity to compete with Western developed countries. The transformation from the second phase to the third phase is a watershed of governance from an economically led one to a socially led one (Ngok, 2009), which is relevant to the discussion here. In 2003, the Chinese Central Government first launched the guiding governance principle — “scientific approach to development” (kexue fazhanguan) (CCCCP, 2003) at the Third Plenary Session of the 16th Central Committee of the Chinese Communist Party, advocating a full development of people’s well-being. In the quest for a harmonious society, Chinese President Hu Jintao further introduced many new terms and phrases to delineate the policy focus of his administration, such as “maintaining the advanced quality of Communist party members” and the “New Three People’s Principle”: “power used for the people, benefits raised for the people, affection centered on the people”, that aim to address the basic needs of ordinary people. Besides official discourse, there have been enormous debates and discussions about social cohesion/social harmony in the society by prominent political figures and opinion leaders. For instance, some local journalists and academics identified eight challenges to building a harmonious society, with particular emphasis on the widening gap between rich and poor, corruption, and a lack of protection for some social groups (Xinhua News Agency, 8 October 2006).2 2

The experts cited in the newspaper article were Huang Weiting, associate chief editor of Red Flag Press and Shen Jie, a researcher with the Chinese Academy of Social Sciences. Five other challenges to social cohesion identified by them were unemployment, an inadequate social security system, unsustainable economic growth due to environmental pollution, backwardness in science, education, culture, medical care and sports, and a general lack of managerial skills.

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According to Wong (2008, pp. 3–4), “In general, the European concept of social quality is founded upon a higher level of economic development and modern institutional arrangements, including political democracy, for negotiating differences in social and economic affairs; whereas, the Chinese concept of social harmony may reflect the concern on governance for settling social conflicts due to China’s low economic standards and seemingly incompetent institutional arrangements, as illustrated by its poor governance scores”. Recognizing the diversity and complexity of social problems in urban China, the Central government has sought ways to improve the urban governance since the early 21st century. To decentralize the state power, according to Central Government’s policy documents released nationwide in 2000 (Ministry of Civil Affairs, PRC, 2000), “community” was proposed as the basic unit of urban administrative organization that the idea of “community building” should be implemented to counter the “cultural, social and political fragmentation which is often seen as a negative consequence of globalization” (Bray, 2006, p. 531). The notion of “community building” is regarded as the tool to rightly address local problems and to rejoin the fragmented parts of society, and maybe more importantly, as the channel through which the Central government can perform “party building” at a grassroots level by the establishment of corresponding urban institutions (e.g., Residents Committees, Street Offices) and provisions of various kinds of social services. All in all, the practice of “community building” points to the new mode of “governance through community” and “self-governance” of the community. For a country as large and diverse as China is, geography and the flow of people should also be taken notice of for understanding social cohesion. In recent decades, scholars have started paying their attention to problems arising from urban–rural migration, for example, some have focused on the importance of employer provision, personal social network and nongovernmental efforts in overcoming the inadequacy of state provision for migrants (Li, 2006). In addition, some scholars call for more efficient and effective government efforts and expanded role of nongovernmental organizations in providing safety nets to citizens in light of dismantling of the “iron rice bowl” employment system (Cook, 2002), while some others concern about

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income disparities between urban residents and rural migrants (Meng and Zhang, 2001). In the eyes of the some China observers in the West, the Chinese government’s recent call for social cohesion is a hidden agenda of strengthening the control of the Chinese state, especially silencing the dissident opinions (Baum, 2005). For instance, Cheng (2005), Vice-Chairman of the Standing Committee of the 10th National People’s Congress (NPC), posited three premises underlying a harmonious society in Mainland China are (1) a strong unity that though there are conflicts among social members, they are not antagonistic; (2) an inclusiveness that seeks common ground yet recognizes differences; and (3) a flexibility and capacity in enhancing the state of social cohesion. To achieve these goals, Cheng believes the leadership of the Chinese Communist Party should be strengthened by stressing the need of rule by law, enhance the educational and cultural status of citizens, and hold firmly the flag of nationalism. In his opinion, these suggestions should be based on the premise of a strong state led by the Chinese Communist Party. Even with Chinese government’s hard state power and soft approach of social harmony, attack and sarcasm targeting to it have not totally disappeared. For instance, starting from January 2009, a cultural prank of an imagined creature, the “grass-mud-horse”, has become a fad on the Internet. Songs and poems were written about the grass-mud-horse, which pronunciation in Putonghua, caonima, resembles a Chinese slang. In the original song, there is one line of lyrics which says “They (the grass-mud-horses) defeated the river crabs in order to protect their grassland”. What makes this prank so politically sensitive is that the Putonghua pronunciation of “river crab” (hexie) resembles to that of “harmony” (hexie), with a difference just in pitch. Obviously, this prank aims at overtly criticizing the social harmony agenda of the Chinese government. Therefore, no sooner had this prank been popularized on the Internet than related online sources were strictly censored. Despite the livelihood of Chinese people has been improving in the past three decades after the opening up of the economy, what they

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are concerned is now beyond economic well-being but more social and cultural, best illustrated by the emergence of new social movements in Mainland China: the enduring “rights protection” (Weiquan) movement against corruption and authoritarian rule; the environment protest in June 2007, where over a thousand of citizens in the city of Xiamen in Fujian province took to the streets to protest against the construction of a chemical factory in the community, which they feared it would affect the environment and the health of the people living around; the protest against torture on dogs and eating cats in Beijing in 2006 and 2008 respectively. China is now experiencing urbanization, informationalization, and globalization simultaneously, such developments have inevitably posed enormous challenges to the Chinese regime to design and carry out specific policies for every specific group. It has to do with a way of decentralizing state power to market and civil society while maintaining the state legitimacy.

5.2. Taiwan: Party Grievances Resulting in Social Conflicts Comparing to Mainland China, social cohesion/harmony has received less attention as a political discourse in Taiwan, but it does not mean that social stability is not taken care by the Taiwanese society, especially when the state of social cohesion can also be documented and examined through the presence of social conflicts. In Taiwan, party grievances have dominated social conflicts in past few decades. Democratization, welfare provisions, and cross-strait relations have been the dominant issues that have set the two major parties Kuomintang (KMT) and the Democratic Progressive Party (DDP) apart in stance on social policy and put their supporters in dismay. Although these three issues seem to be distinct, they are in fact inextricably linked. As Ramesh (2004, p. 15) argues, in the face of lacking formal recognition from international organizations due to China’s diplomatic power, since the 1980s Taiwan has been using democracy and social development to appeal to the international community in quest for their support.

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Besides the geopolitical factor, the relationship between democratization and welfare provisions already has a great explanatory power over the ideological differences among the Taiwanese people. In Taiwan, political trust of people seems to fall along the party lines. In comparing political trust, defined by people’s belief toward the political system, between China and Taiwan, Shi (2001, pp. 415, 416) argues that cultural factor has a part in determining the political trust alongside with rational calculation and choice, and finds that political culture is a governing and significant factor that contributes to the difference in political trust between China and Taiwan. In China, authoritarian culture can diffuse people’s grievances should state policies are not measuring up to public expectation. Adopting Weber’s conception of authority and legitimacy, we can argue that the transition of Taiwan government from an authoritarian regime to a democratic state indicates a change of basis of legitimacy from traditional authority to rational–legal authority. That explains why welfare reform and other social policies development in Taiwan have come concomitant with the process of democratization since the 1980s, driven and triggered by various emerging social movements and a “demanding civil society” (Hsiao, 1990). Traditionally, Taiwan was categorized as one of those “productivist welfare capitalism” in East Asia, which possess the following characteristics, as Paul Wilding suggests: Low public expenditure on social welfare; a productivist social policy focused on economic growth; hostility to the idea of the welfare state; strong residualist elements; a central role for the family; a regulatory and enabling role for the state; piecemeal, pragmatic and ad hoc welfare development; use of welfare to build legitimacy, stability and support for the state; and limited commitment to the notion of welfare as a right of citizenship. (quoted in Holliday, 2000, p. 715)

For these states, social policy is subordinate to economic policy that the former is seen to be the condition and tool for the actualization of the latter (Holliday, 2000). However, as Aspalter (2006, p. 294) suggests, since the 1950s the long-time ruling party KMT has decided

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to advance social policies primarily for the purpose of gaining public support and establishing the state’s legitimacy rather than fixing the goal on economic development. Yet the implementation of those policies was far from universal and egalitarian, since the major beneficiaries were mostly military personnel, civil servants, teachers, private school employees and low-ranking district and block officers, who were the core base of supporters of KMT and the authoritarian regime. Another commonly seen deficiency of Taiwan’s welfare system is that it has been highly fragmented across different occupations, with each insurance scheme of different provision benefits and entitlements covering the different sectors of the workforce. With the two above-mentioned characteristics, Taiwan’s welfare regime is regarded by some as one characterized with “etatism” and “corporatism” respectively (Ku, 2000, p. 88). In the face of the competing or even conflicting interests in the welfare system, since the opening up of the democracy and the slowdown of economic development from the 1990s, the two Taiwanese major parties have been competing in proposing the numerous welfare reform initiatives that can help improve people’s lives in order to build up or retain their political power, thus creating serious ideological and political conflicts that are still fettering the achievement of social cohesion in the territory until now. Besides legitimate policy debate on the role of government in welfare provisions, party competition in Taiwan, however, is so fierce and threatening that it may result in violence. In 2006, there were rumors that some DDP-controlled or affiliated clandestine radio stations have advocated DDP supporters to assassinate KMT chairman Ma Ying-Jeou, then the current Taiwan President (Yazhou Zhoukan, September 2008). Despite the fact that Ma was elected in 2008 with a comfortable size of vote margin, party bickering remains antagonistic. After Taiwan’s economic downturn for the past decade, the decision of President Ma to forge amiable relationship with Mainland China in return of economic benefits has stirred waves of controversy and conflicts, angering the DDP supporters who fear that Taiwan’s economic cooperation or even integration with China would eventually lead to a loss in political autonomy. In short, what can be anticipated in the discussion of social cohesion

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in Taiwan in near future would be the further welfare reform and the coupling of economy and polity, which is largely determined by the cross–strait relations. Thus, the lens of party competition through which social cohesion/social conflict is to be understood remains a valid tool.

5.3. Hong Kong: Economic Restructuring and Democratization as Social Debates Hong Kong has been labeled as the “city of protests” in recent years, when it has undergone significant economic and political changes since the 1997 handover. The economy, concomitant with the stock market, has gone up and down dramatically in the Asian Financial Crisis, the SARS crisis, and the 2008 global financial turmoil; the political reform on universal suffrage has been in stalemate in which the relationship between Hong Kong and Mainland China is often weakened. Feeling the heat of the rise of several major Mainland cities such as Shanghai and Guangzhou, the trust of Hong Kong people toward themselves, their government, and their city are being put into doubt. The Hong Kong government has recognized this alarm and intended to deliver policies to change the course. Former Chief Executive Tung Chee Hwa, in his Policy Address in 2005, strived to achieve social harmony for Hong Kong. The Policy Address, entitled “Working Together for Economic Development and Social Harmony”, proclaims that: Hong Kong people have always attached great importance to social harmony. The saying “A family that lives in harmony will prosper” epitomizes harmony as a core value in our tradition. A stable environment is the prerequisite for social progress, economic prosperity, constitutional development and better living. (Hong Kong SAR Government, 2005a, p. 10).

In echoing the change of governance of the Central Government from economic development to social development, political jargon such as “‘people-based’ governance” was posited in the Policy

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Address. The Hong Kong government also vowed to maintain the fairness in governance, stabilize the middle class, strengthen the sense of national identity among citizens, and pledge for unity and respect for different political views on the basis of “One Country, Two Systems” principle. After Tung Chee Hwa stepped down in 2005, his successor Donald Tsang, then the former Chief Secretary, recurred to the theme of social harmony in his own Policy Address in the same year. In the opening paragraph of that Policy Address, entitled “Stronger Governance for the People”, Tsang pledged to “secure a ‘people-based’ government which pursues excellent governance, a harmonious community and widespread economic growth.” (Hong Kong SAR Government, 2005b, p. 1). However, the economic and political crises after the handover and the failure of government leadership in dealing with them have deepened and triggered social conflicts (Cheung, 2003). Moreover, the corrosion of social cohesion was also aggravated due to Hong Kong people’s growing cynicism toward the community participation (Chiu, 2005) and declining trust toward their political representatives in the legislature (Ma, 2007). Social trust toward the state, political society, and civil society seems to have been deteriorating, resulting in a fragmented society within which social conflicts are often unresolved. Under these circumstances, Hong Kong scholars are keen on developing indicators to measure the social cohesion quantitatively to better the governance (see Chan and Chan, 2006; Wong and Wong, 2005), especially focusing on the relationship among social cohesion, public perception/expectation, and the quality of governance. For instance, in 2006 and 2008, the Department of Social Work and the Hong Kong Institute of Asia Pacific Studies at The Chinese University of Hong Kong have conducted population-wide telephone surveys to keep track of Hong Kong people’s perception of social cohesion. In 2006, there were 38% of respondents agreeing Hong Kong was a cohesive city, 39.6% said so-so and 22.4% disagreed (Department of Social Work and Hong Kong Institute of Asia-Pacific Studies, CUHK, 2006). In 2008, there were 37.8% of respondents agreeing that Hong Kong was cohesive, 41.4% said so-so and 20.3% disagreed (Department of Social Work and Hong Kong Institute of

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Asia-Pacific Studies, CUHK, 2008). The results indicate a drop in the answers of both “agree” and “disagree”, but a modest increase in “so-so”, but the overall pattern of people’s evaluation on social cohesion remains stable. In the two surveys, Hong Kong people perceived “conflict between the rich and the poor” as the most serious threat to social cohesion; “conflict between citizens and big corporations” the second; “political conflict” and “family conflict and lack of cooperation and love among family members” the third in 2006 and 2008, respectively. To quest for social cohesion, Hong Kong people showed their concerns in both surveys that “maintaining a clean and just government”, “defending the rule of law and protecting individual liberty and property” and “developing the economy and creating jobs” as the most important agendas in promotion of social cohesion. All these suggestions point to a decent and effective government, creating pressures for the nascent SAR administration to live up to the public expectation. For social welfare in particular, Hong Kong has long been seen as a neo-liberal state which espouses the economic philosophy of “small government, big market”, gaining the recognition of being the freest economy in the world for 14 consecutive years.3 However, as Chang (2004) argues, the conventional and commonsensical thinking that East Asia is a “social-policy-free-zone” has not been true for it has overlooked the presence of success of those policies that have addressed a wide range of social problems but just have not been counted as traditionally defined “welfare policies”. The misconception in Hong Kong is best indicated by the expansion of welfare services in the 1970s, when people started to receive the provisions of public housing and nine-year free education. Yet, many critics still see Hong Kong government as an uncompassionate regime, pointing to the high numbers of Gini Coefficient over the years, and the absence of minimum wage law and collective bargaining, to name a few. Hong Kong government’s welfare system is under more severe

3

The Heritage Foundation conducts the rankings. It is an American think tank, which promotes fiscal conservative economic philosophies.

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criticism especially in the face of financial crisis, whereas there is a lack of synchronization of old neo-liberal welfare regimes and new social risks, such as work stability and family integrity, posed by technologytriggered globalizing economy (Chan, 2006). When passive citizenship is at stake, an active citizenship is now being promoted in Hong Kong by a new wave of democracy and urban movements emerging in recent years, of which concerns have extended beyond economic well being to social and cultural lives. For instance, the rise of conservation movements is aiming to pressure the government into reconsidering a new kind of economic growth that should be compatible with environmental protection, preservation of collective memory, and identity and community building. In short, what is at stake in Hong Kong will be the strike for economic growth for the middle class and underclass along with Hong Kong people’s search for a new identity through (re-)discovering their legal and discursive power over their resources and benefits (such as public spaces), these parallel developments will lead to a new reconfiguration of the relationship among the market, the society, and the state. The legitimacy of the government will be in jeopardy should it fail to reform its governance to cope with these changes such that it can be easily subject to challenge from the civil society due to its lack of mandate given by universal suffrage.

6. ABOUT THIS BOOK: THE ORIGIN, THE STRUCTURE AND THE MAJOR ARGUMENTS The theme of social cohesion, whatever label it is adopted (such as social inclusion, social integration, and social harmony), is prevalent in academic research and policy agenda around the world. The recognition of the importance of social cohesion often goes hand in hand with the quest for a stable and prosperous society, characterized by equality, justice, freedom, and effective governance. When reviewing the evolution and use of “social cohesion” as policy concept in North America (The United States and Canada), Europe, and Australia,

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Hulse and Stone (2007) recount that governments tend to address social cohesion on the dimensions of social capital, social exclusion, but neglects the also important cultural dimension. As Levitas (2005, p. 21, emphasis added) elicits, “exclusion is understood as the breakdown of the structural, cultural and moral ties which bind the individual to society”. In Chinese societies, social cohesion is often argued with moral and social order derived from Confucianism (Baum, 2005). This underlying cultural factor may hold the Mainland China, Taiwan, and Hong Kong societies in common, despite their different historical, social, economic, and political differences. But whether this cultural commonality really accounts to the unique meaning of social cohesion in Greater China remains a challenging and intriguing question. In this book, social policy is meant by the policy that affects both the objective and subjective well-being of citizens, economically and socialally. On this basis, social cohesion is both the social condition and social consequence of the execution of social policy, which is determined by the mode of institutions, the delivery of policies, and the quality of governance (see Easterly et al., 2006). Even there is criticism that “social cohesion” may run against the principle of individual rights and is being used as a sugar-coating for social control by the powerful, especially in under-developed democracies, the proposition of achieving social cohesion is generally well-received by ordinary people, as they hope that it may signal a change and departure of governance from an economic-led one to a people-centered one. In the past few decades, the intensification of economic inequalities and political grievances has created far more social conflicts in Greater China. Contributors in this volume address the following major themes when discussing social development issues, changing governance and social policy implications in Mainland China, Taiwan, and Hong Kong. 1. The definition of social cohesion and its uses as policy concept. 2. The transformation of urban governance and political reform. 3. The strive for economic well-being via welfare reform.

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Putting the above discussions of social cohesion in the Asian context, social cohesion is not yet a well-researched concept and well-practiced policy tenet as compared to its North American and European counterparts. For Greater China in particular, the notion of “social cohesion” (shehui ningju) and “social harmony” (shehui hexie) are more commonly adopted by Mainland China, Taiwan, and Hong Kong than the idea of “social inclusion”. Yet, it needs more effort and time to examine whether this rhetorical difference can yield theoretically significant new ingredient to social cohesion studies, but we think that this book is the right beginning to embark on this effort. Most chapters in this book were selected from the papers presented at the “Symposium on the Quest for Social Cohesion in Greater China: Challenges for Social Policy and Governance” held in June 2008 at The University of Hong Kong. The Symposium was co-organized by the Faculty of Social Sciences, The University of Hong Kong and the College of Social Sciences, National Taiwan University, while a few chapters were selected from other international conferences related to social development and social policy in Greater China and Asia. The present volume is organized into three main parts; in each part various kinds of social development and governance issues in Mainland China, Taiwan, and Hong Kong will be examined. After the present introductory chapter, part I of the present volume focuses on a theme of “Concepts of Social Cohesion and Policy Responses”. Chapters in this section touch upon the backgrounds and interpretations of the concept of “social cohesion” in Mainland China, Taiwan, and Hong Kong. More specifically, these chapters deal with issues related to how their governments’ policy agendas, resources allocation, mentality and mode of governance have adapted to promote social cohesion. In Chap. 1, Tsang and Chu study the youth development of a newly developed town in North West Hong Kong — Tin Shui Wai, which is regarded as a “city of sadness” for it encompassing various kinds of social problems, ranging from unemployment, youth gangs and family violence to suicide. Departing from a top–down governance approach, the authors adopt a bottom–up perspective to

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examine the motivations, strategies, and limitations of different community stakeholders — schools and teachers, religious groups, youth service agencies and businesses — who have successfully collaborated to transform the once bizarre living environment into a more dynamic and safer place for youth development. Drawing upon this success, the authors explore that social capital and social networks among residents, alongside with economic well-being, are the keys to cohesion in a community setting, where a bottom–up initiative is also equally important, if not more, as a top–down one. In reviewing the shift of tone and substance of Chinese Central government’s policy agendas in the past three decades, Ngok and Zhu attempt to delineate the recent change of governance from simply addressing the economic development to fostering social development, and how this change has translated into policies and actual practices in Chap. 2. The authors argue that since 2003, when the government first proposed the idea of “harmonious society”, a wide range of policies including education, health care, employment, housing and social security have been modified and launched to meet the pressing demands of citizens. Ultimately, the reforms taken serve the legitimacy of the central government. But on the other hand, social unrest may happen should the government’s actions cannot measure up to the heightened public expectations. Therefore, “social harmony” in China is a double-edged phrase that the government should raise and operationalize it in a careful and cautious manner. Believing that welfare provision is inextricably linked with politics since it involves interests and resource allocation, Ku reviews the development of welfare politics in Taiwan since 2000 in Chap. 3. With particular reference to welfare reform, Ku documents how the long-time opposition party DDP finally took the power over the ruling party, the KMT, by winning the presidential election in 2000 and 2004. He examines that, under the DDP’s eight-year administration, the Taiwanese society was divided or polarized on several fronts: the employed and the unemployed; workers in different industries whose works are subject to different influences of global division of labor; income inequalities between households. In addition to these were the rises in crime and suicide cases. Altogether these worsening social

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conditions have contributed to the diminishing trust in government; intensifying party bickering and scapegoating, which have poisoned the politics of Taiwan, led to the stalemate in welfare reform and division of the country. But fortunately, the expansion of volunteer services and the maintenance of traditional family ties have constituted an informal and bottom–up force and helped establishing and fostering trust, which is essential to the stability of society. In Chap. 4, Chan, Chiu, and Chiu argue that whereas a number of social cohesion studies focus on the delivery of government policies and the measurement of objective well-being indicators, it is no less significant and insightful to examine the subjective dimension of social cohesion. Adopting a well-established “Perceived Cohesion Scale” (a measurement of “sense of belonging” and “feeling of morale”) developed in Western context, the authors have done two large-scale surveys on how Guangzhou and Hong Kong residents perceive the notion of “social cohesion”. The statistical results indicate that generally Hong Kong residents enjoy a lower level of “perceived cohesion” than Guangzhou people. The authors believe that this difference may be caused by the two different welfare provision systems. Furthermore, the influx of struggle for identity during the political transition after the 1997 handover may also contribute to the low level of “perceived cohesion” of Hong Kong people. Part II addresses a theme of “Social Change and Urban Governance” by looking into the political transformations behind the shift in urban governance in Mainland China, Taiwan, and Hong Kong. In this part, the three chapters have examined urban governance at the level of city, which has widely been seen as the unit of competition in the globalizing economy. In Chap. 5, Lui examines the thesis of global city in the context of Hong Kong. Rejecting the established and conventional theses on the evolution of global cities, which tend to be structural and ahistorical, Lui attempts to dig into the particular process of how a global city comes into being by exploring the economic, social, political, and historical specificities. Having recapped the economic and political structuring of Hong Kong after the 1997 handover, Lui uses the West Kowloon Cultural Development project, the mega-cultural initiative by Hong Kong

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government to project Hong Kong to the world stage, as a case to demonstrate the potential and limitation of Hong Kong governance. He argues that the weak mandate of the governing administration resulting from an absence of universal suffrage, and its isolation from the civil society due to rigid bureaucracy has contributed to the failed governance in Hong Kong. Underlying this failure is also the lack of cohesiveness in the existing power structure, where different business interests are competing for rent-seeking activities. In order to search for good governance, Lui believes the government should re-establish itself as an arbiter and a coordinator of various interest groups. In Chap. 6, Mok and colleagues study the “three mountains” (education, housing, and health care) in social policies in eight Mainland China cities. Having conducted large scale surveys in the eight selected and representative cities, the authors discuss how the urban households within and between cities have been experiencing the hardship as a result of the financial burdens in terms of household expenditure related to education, housing, and health. Reversing the socialist policy of welfare provisions in the Mao era, Chinese governments in post-reform period have embarked on the effort of privatizing the social services in order to alleviate the burden of the state; the increasing financial costs on city residents are the result of that. The authors find that despite the overriding force of marketization and privatization, urban households in different localities suffer various degrees and ways of hardship. Ultimately, this comparison studies of different cities shed light on the understanding of the complexity of urban income disparities in Mainland China. In Chap. 7, Chien and Wu give an account of the practice of “urban governance from below” in one of the most prosperous and politically significant cities in Southern Taiwan, Kaohsiung, which is a center of many heavy- and light-manufacturing industries. Paying particular attention to urban reform and public space (re-)construction, the authors examine the introduction of the operating mechanisms of “advocate planners”, “community architects and planners”, and “citizen conferences” in urban administration, which play a significant part in

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the process of urban design, public consultation, and bargaining of interests. This “urban governance from below” in Kaohsiung is a pioneer and an exemplar of citizen and community participation in Taiwan, decentralizing resources, control and power to residents over the communities and public space by allowing them to select their representatives and voicing out their own opinions. Yet this bottom–up approach of governance is far from ideal, mainly due to the resistances from the vested interests in public and private sectors, the ambiguous professional role of the “advocate planners” and “community architects and planners”. And whether this “urban governance from below” can be implemented nationwide is really subject to decision and determination of the local state. Part III of the book chooses a theme of “Economic Well-Being, Urban Poverty and Pensions Reforms”, critically examining the welfare provisions in Mainland China, Taiwan and Hong Kong. Equality and broadly distributed prosperity are the pillars of any stable and cohesive society in which welfare regime is responsible for enhancing the economic well-being of people, thus it is the core concern in the four chapters in this part. In Chap. 8, Chui and Ko alert that in Hong Kong the ever-increasing aging population has been giving rise to elderly poverty. They critically examine the mechanism of the pension scheme, the Mandatory Provident Fund and how it should be reformed to tackle elderly poverty. Elderly poverty has long been a social problem in Hong Kong even during the period of soaring economic growth in the 1970s and 1980s. In a neoliberal economy such as Hong Kong, personal responsibility and reliance are always put ahead before state support. While advocating that “bringing back the state in” is the right direction to pension reform in the future, the authors argue a low-tax regime should be kept intact to maintain Hong Kong’s competitiveness in the globalizing economy. To seek a way out of balancing fiscal vitality and social assurance for the needy, the authors propose that the government can use its financial reserve to expand social security schemes in the short run to cater for the elderly people, who are left out of the nascent pension scheme, which was established long before they had retired.

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Similar to Chui’s chapter, Lau and Mok discuss in Chap. 9 the problems facing the provisions and deliveries of welfare services in Hong Kong, which are posed by economic restructuring from manufacturing to service sector amidst the trend of globalization, aging population, and privatization and marketization of public services. Under these circumstances, the authors engage in the latest debate on whether East Asian welfare models, in particular the idea of “productivist welfare captialism”, which relies on the premises of high economic growth and productivity, are still appropriate and relevant to the understanding of Hong Kong welfare regime. Submitting to the governing principle of “small government, big market”, Hong Kong government, like many other East Asian states, have been advancing policies for the prime goal of economic growth; social policy and social development have been made subordinate to this agenda. But the authors argue, while Hong Kong have been experiencing the above structural changes in recent years, the livelihoods of low-skilled and -educated workers and the elderly become at stakes, requiring new social polices to fix the problems of the current employment market structure and social security scheme. In Chap. 10, Zhang, Lum and Xu deal with the rising phenomenon of “new urban poverty” in Mainland China cities against the background of urbanization and economic development. The authors explain that the restructuring of state-owned enterprises, the failure of them granting benefits to labor, the liberalization of market and the commodification of public services are the major causes of “new urban poverty”. These new economic restructurings have exposed many urban residents into new risks and uncertainties, and what is worse is the government policy that replaces the state provisions of social services with personal choices and responsibilities. Under such context, the authors examine the subjective economic well-being, the degree of economic hardship and economic capacity of urban households in eight selected cities and how these “economic well-being variables” vary with demography, housing environment and development level of a city. While results show that people with higher incomes and living in highly developed cities do not necessarily possess a higher

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level of economic well-being, it is argued that a “new urban poverty” is emerging in Mainland China. Shi concludes the present volume by addressing the transformation of pension insurance system in Taiwan along the progress of democratization from the 1990s until now. Over the years, the Taiwanese government has failed to deliver an integrated pension system, causing lasting policy confusion and inequality of welfare provisions. Old-age security system in Taiwan has long been status and occupation-oriented; both approaches having been leaving certain sectors of old-age population into plight without covering their needs. The author argues that the major impediment toward such a reform has been the conflicts of interests and seizure for power between the two major political parties, the KMT and the DPP. In reforming the pension system, the two political parties have always skewed the benefits toward their voting constituencies, overtly putting their own political interests before public interest, thus failing to achieve an equal pension system for all people. It is illustrated by the fragmentation of different pension institutions, which are often uncoordinated due to the lack of an overarching institutional framework. Therefore, ambitious efforts will be needed to set aside party competitions to put welfare reform back on track.

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Part I CONCEPTS OF SOCIAL COHESION AND POLICY RESPONSE

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Chapter

1 Social Cohesive Efforts to Meet Youth Development Needs in Tin Shui Wai, Hong Kong Sandra K.M. Tsang* and Yiu Kong Chu †

Tin Shui Wai (TSW), known as “City of Sadness”, is one of the most rapidly expanding new towns in Hong Kong. The young people in TSW could not enjoy equal opportunities for development due to geographical isolation, inadequate infrastructure, few and skewed employment opportunities, clustering of low education and low income residents, over-representation of new arrivals and single parents with dependent children. Sarcastically, repeated cases of family tragedies in TSW acted as catalysts to attract attention and cohesive synergy from within and outside the district, and from community leaders to local residents and youths themselves, to create resources for youth development. The chapter illustrates how unfailing social cohesive efforts have picked up momentum eventually and

*Department of Social Work and Social Administration, The University of Hong Kong. †Department of Sociology, The University of Hong Kong. 43

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Sandra K.M. Tsang and Yiu Kong Chu opened useful ways out for the TSW youths. “Social cohesion” is always seen as a desirable end state of a community. In the case of TSW, it can also be treated as means to produce the right climate for community building.

1. INTRODUCTION Tin Shui Wai (TSW), one of the most rapidly expanding new towns in Hong Kong, is located in a remote northern corner of the city. Its first two public housing estates were completed in 1992. By 2009, over 270,000 people have made TSW their home, and about 20% of its population was under the age of 15. Different reports have shown that community facilities for the young people there are insufficient, and there is a lack of coordination on how to increase the pace of the construction of such facilities. Even worse is that TSW has always been portrayed by the media as a “city of sadness”, vested with serious poverty, family violence and youth gang problems. It seems that this geographically and socially isolated community promises little prospect for youth development. The chapter, however, illustrates how unfailing social cohesive efforts from stakeholders within and outside TSW have picked up momentum eventually and opened useful ways out for the TSW youths. Cross-sectoral cohesive synergies involving schools, government and non-government social service agencies, religious organizations, as well as young people and their parents have all played constructive roles in their community advancement. This chapter is largely based on information derived from the “Tin Shui Wai Youth Development Project” (TSWYDP) conducted by the authors from 2005 to 2007 under the support of the Mrs. Li Ka Shing Fund made to the Faculty of Social Sciences of The University of Hong Kong (HKU). Data sources include extensive literature review, newspaper clippings, findings from the project team’s surveys on 1,374 TSW Secondary 3 students and 1,014 mothers in 2006, as well as supplementary qualitative data collected from 2006 to 2008 through interviews, focus group discussions, field observations, agency visits, roundtable seminars and a regional conference in TSW conducted in April 2007.

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2. YOUTH DEVELOPMENT NEEDS IN TIN SHUI WAI The Hong Kong New Towns Program was initiated in 1973. By 2008, nine new towns including TSW have been developed to house 3.3 million people, which constituted nearly half of Hong Kong’s population. TSW, located in the northwest part of Hong Kong, was originally occupied by farmlands and fish ponds. By 2009, over 270,000 people were made TSW their home. TSW was designed, short-sightedly, as a residential district to ease the mounting housing demand of the grassroot population in Hong Kong. There were more public than private housing estates, very limited employment opportunities, and slow to develop transportation connections to the more economically active and vibrant parts of the city of Hong Kong. Such housing policy created an overrepresentation of low-income group, public assistance recipients, as well as new arrivals from Mainland China and other Southeast Asian countries. TSW is the most youthful new town in Hong Kong. The 2007 By-Census population statistics showed that one in five people living in TSW was below 15. However, the remoteness, the expensive transportation connections to town, the insufficient recreational and cultural facilities and work opportunities, the over-presentation of grassroot families with limited resources in TSW have confined the development of young people. According to the findings of the 2006 “Tin Shui Wai Youth Survey” (Tsang et al., 2006) on 1,374 secondary school students, “school”, “home” and “TSW shopping centers” were the top three most common places, where these youths spent their after-school time. Over 80% claimed they seldom used community facilities; 33% claimed these facilities, which were normally within walking distance from home or school in the more developed parts of Hong Kong, were too scattered and inconveniently located even within the district. Although 60% found their neighbors agreeable and helpful, 48% claimed if given the choice, they preferred to move out of TSW. The unfortunate reality was that even if young people decided to quit schooling after completing the nine-year compulsory education, they

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could not afford to travel too far for work because a one-way bus ticket to town was HK$21, comparable to the price of an average lunch box. These youths were often forced to work for low-paid jobs in nearby towns or just idle around in TSW. Since the late 1990s, official statistics on social problems in TSW have always topped among the 18 districts in Hong Kong. These problems include child and spouse abuse, youth drug misuse, juvenile crime, single-parenthood (Tsang, 2007), and families with inadequate or no income (Yuen Long District Social Welfare Office, 2007, 2008, 2009). The family violence and juvenile problems have attracted a lot of sensational media labeling. For instance, the headline of Sing Pao on 19 February 2004 was “Triad youth gangs have contaminated Tin Shui Wai for ten years”, and the image that TSW is the “city of sadness” was further reinforced with the two family homicide cases resulting in four deaths in 2004 and three deaths in 2007. In April 2004, a couple with their two young daughters were killed in a tragic family violence in TSW. Family and social service providers in TSW observed that the disaster only revealed the tip of the iceberg, and TSW warranted an urgent review on the adequacy of services to support the families in the community. The Family Service Review Panel, of which the first author was a member, concluded that the TSW challenges could be attributed to new town design shortsightedness in making appropriate, adequate and timely physical and social provisions. The Panel advocated for immediate and long-term measures at the macro, meso and micro levels to step up the provision of social support services and the construction of facilities in TSW (Tsang with Review Panel, 2004). However, implementation of such recommendations was slow and piecemeal. Sarcastically, it was not until October 2007 when another family disaster in which a depressed mother threw two teenage children from height and then jumped to her own death when the problems and image of TSW hit rock-bottom, that more explicit government efforts were made to enlist social cohesive efforts to improve the social climate and foster positive social change in TSW. The following sections will outline some top–down

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government and bottom–up local and territory-wide efforts to help the youths in TSW.

3. TOP–DOWN COHESIVE EFFORTS 3.1. Government’s Central Policies In response to the Family Service Review Panel Report (Tsang with Review Panel, 2004), the government launched a couple of policy initiatives to strengthen a sense of belonging in the neighborhood in TSW. The Home Affairs Department earmarked about HK$2 million to launch the “Tin Shui Wai Neighborhood Mutual Help” sponsorship scheme in 2007–2008 to build and strengthen the support network at neighborhood level. Each Mutual Aid Committee (MACs) in TSW could apply for sponsorship of up to HK$20,000 a year to organize one or more events to promote a closer and caring mutual help network in the neighborhood (Information Services Department, 2007a). The government also worked through the Community Investment and Inclusion Fund (CIIF) for TSW community-building. The CIIF was set up by the government to build up social capital through the enhancement of personal capability, improvement of interpersonal relationship and promotion of cross-sectoral integration in communities. In 2007, 11 projects under CIIF were launched in TSW. In 2009, another 20 new projects were underway. All the projects aimed to build mutual support networks in the district. For example, the “Project to Promote Family Cohesion and a More Colorful Family Life” recruited new arrivals and local residents as volunteers and tutors to teach Putonghua and craftsmanship to their neighbors (Information Services Department, 2007b). After the homicide–suicide family tragedy in October 2007, TSW received even more attention from policymakers. In February 2008, Financial Secretary John Tsang in his budget speech for the 2008–2009 financial year highlighted several major government policies to help the TSW residents in need. These policies included (a) setting up an integrated community center for mental wellness;

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(b) providing land for long-term commercial or hotel development; (c) launching a two-year pilot scheme whereby chronically ill persons can be provided with private clinic services for the same fee as that charged by clinics under the Hospital Authority; and (d) constructing a general out-patient clinic in TSW North, and considering building a hospital in the district (Information Services Department, 2008). In 2008, the government allocated another HK$43 million to 29 community projects, 14 of which in TSW, to strengthen the relationships in the neighborhoods. These projects included a home service for children after classes, a mentorship program to build up the neighborhood network, and some get-togethers (South China Morning Post, 7 March 2008). It was fortunate that aside from stepping up the above remedial services, some primary prevention measures were also launched to enhance the social cohesion of specific target groups. In 2008, the Housing Authority launched a HK$4 million pilot scheme to reach out to secluded families in TSW. A team of five social workers from the Christian Family Service Center was set up to help new residents to settle in. They also hosted a hotline service for the 50,000 households living in the area (The Standard, 22 December 2007). The team briefed new residents on transport networks, schools and social facilities in the district before the tenants moved in. Their staff paid home visits to them afterwards. The team also held regular meetings with the 11 estate management advisory committees in TSW, which kept in contact with the 52 NGOs in the district, to reach out to families (South China Morning Post, 22 December 2007). Unemployment, especially unemployment of school leavers who only finished junior secondary education, is a major problem in TSW. Since 2008, The Labor and Welfare Bureau stepped up efforts to promote employment. The Labor Department collaborated with business and professional organizations to organize job fairs in TSW and provided thousands of vacancies for young job-seekers. The Labor Department also installed touch-screen vacancy search terminals in the region and opened a job center in Yuen Long downtown to help local residents find jobs. In addition, the Transport Support Scheme

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has been expanded to encourage residents in remote districts like TSW to find jobs or work across districts (Information Services Department, 2008).

3.2. Local Government Collaborative Strategies TSW is under the administration of the Yuen Long District. Among the various government units serving TSW, the Social Welfare Department Yuen Long District Office can be considered very active and successful in working in partnership with local stakeholders to promote the healthy development of young people and families in TSW. Since 2003, that District Office has been organizing the “Yuen Long Community Service Planning Forum” every year to collect ideas from different concerned parties on social welfare service planning for the district. From 2007 to 2009, the annual work plan of the District Office was themed: “Creating a Harmonious Community; Strengthening Confidence and Enhancing Capacity; Promoting Cross-Sector Collaboration”. The objectives are eight-fold and include (a) enhancing the resilience and cohesion of family; (b) building a caring community; (c) enhancing youth services; (d) strengthening parenting skills; (e) providing diversified employment assistance; (f) enhancing communication platform; (g) enhancing effective information flow of welfare services; and (h) strengthening collaboration among the public, private sector and the government. It is hoped that such collaborative atmosphere among the government and non-government social service organizations and private sectors can continue to foster the welfare and social cohesiveness of the residents in TSW. Under the District Office, the Yuen Long Local Committee on Service for Young People, Yuen Long District Coordinating Committee on Family and Child Welfare, and the Yuen Long District Coordinating Committee on Promotion of Volunteer Service meet actively to plan and launch various types of services for TSW. The annual “Yuen Long District Outstanding Volunteer Election” campaign is a typical example of productive projects, which can empower many potential and actual welfare service-users to solve their community

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problems, devise solutions, and turn themselves into social assets like volunteers that can serve the community.

4. LOCAL COMMUNITY COHESIVE EFFORTS 4.1. Youth Service Agencies Non-government organizations (NGOs) excel in starting innovative services to fill gaps in public services. The “Leaders With Heart Project” run by the Evangelical Lutheran Church of Hong Kong (ELCHK) Tin Shui Wai Integrated Youth Service Center is a good example to show how youth-serving organizations can apply principles of positive youth development (Catalano et al., 2002; Damon, 2004; Shek et al., 2007), use tailor-made leadership programs and mobilize different local resources to turn at risk youths into contributing members of the community. The project identified 50 at risk youths (those with difficulties in school learning, or coming from disadvantaged families) and aimed to turn them into “young leaders with heart” through leadership training, mentorship programs and community services. The project was implemented from October 2006 to February 2007 and four community leaders including one retired police officer, two district councilors and one government official mentored four groups of youths to initiate, plan and provide some social services to the community. The participants were significantly empowered through the experience and many continued to serve as core volunteers of the center. While the labor department arranged work fairs and connect youths to job vacancies, efforts must be made to launch the youths from school to work, and to equip them with necessary skills and attitudes to sustain their employment. Some youth service organizations provided such programs on career skills training and job placements. The TSW Western Restaurant of the Kingswood Villas Resident Club set up by ELCHK is a social enterprise on catering to provide service, make profit and train catering personnel. Since its inception, the restaurant has trained more than 20 young people, and the result was very impressive. About 70% of the young trainees successfully joined

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the labor market, and 20% chose to return to schools or other learning institutes to further their education. Another successful project, in response to the recommendation of the Family Service Review Panel Report (Tsang with Review Panel, 2004), involved the consent from the Housing Authority to convert part of a public carpark into a youth center, an NGO to run the center, and a local enterprise (a bicycle shop) to develop service and business there (rent-a-bike and bike repair service). The project not only trained youths for bicycle leasing and repair. Cycling in TSW has become a tourist attraction, which generates business for touristguides-on-bike and supports the catering and retail markets in TSW.

4.2. Schools, Teachers and Religious Groups 4.2.1. Schools The 2006 “Tin Shui Wai Youth Survey” found that students preferred to stay in school after school hours. In the focus group discussions with teachers and youths to facilitate proper interpretation of the findings, both teachers and students emphasized that the schools actually house the more reliable social support for the youths, namely, their peers, teachers and social workers. The schools also house educational and recreational facilities not adequately provided in the TSW community. These demonstrate that the schools are the social hub and source of social cohesion and social capital for TSW youths when their parents and neighbors are much less resourceful and probably burdened with personal and family problems. The school personnel in TSW have been very mindful of their pivotal role to support youth development in TSW. Three special projects illustrate some innovative attempts to develop the youths. The first project was a direct and concrete effort by a secondary school to tackle the lack of cultural facilities, like libraries, in TSW. In 2005, the Jockey Club Eduyoung College opened the Eduyoung Reading Room to serve the community. Its Principal holds the view that the mission of schools is not just to educate the students. Schools should also enhance the cultural competence of the residents in the

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community, and the students’ family members, including parents, grandparents and siblings, should all be the service targets. The Reading Room opens on weekday evenings, and afternoons of Saturdays and Sundays to make library facilities accessible to the residents. It has proved to be a welcome facility to supplement the perhaps better-equipped but less accessible public facilities. The second project involved bringing TSW youths to connect with other parts of Hong Kong so that they experience a stronger sense of social connectedness with other residents in Hong Kong, and have some social capital beyond their immediate family and school circles. A school in TSW used the funding from the Schoolbased After-school Learning and Support Programmes (SALS) of the Education Bureau to bring their students to visit museums and country parks on Hong Kong Island. The idea was very successful and in 2006, The University of Hong Kong also arranged some 50 youths from TSW to tour its campus and visit a youth rehabilitation center in the southern part of the island. It was the first time many of such youths made such visits and they commented that the visit empowered them regarding their rights and opportunities to study in HKU, and also alerted them to take charge of their own development to avoid being sentenced into juvenile rehabilitation settings. The third and most remarkable out-reach effort from TSW schools was that in 2007 the Queen Elizabeth School Old Students’ Association Secondary School hosted a seven-day international conference for 300 participants from over 30 countries to discuss environmental protection issues. The great success of the conference clearly demonstrated that schools and youths in TSW can be equally, if not more, competent than their counterparts in other parts of Hong Kong to go from local to global on meaningful agenda.

4.2.2. Teachers The geographical remoteness and isolation of TSW pose a challenge to the teachers to get counseling and guidance support for their students. The commitment and passion of the school Discipline

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Masters in the district engineered them from as early as 1996 to initiate a unique network for mutual support and resource sharing. All 21 secondary schools in the district joined the network and all members of the “Tin Shui Wai Secondary School Discipline Teachers’ Network” were connected through mobile phone, fax and email. One of their major tasks is after-school patrol in the community. Individual discipline teachers not only take care of their own students, but also help other school students if they are in trouble. The Network also serves as an informal intelligence system to report cases worthy of attention to the discipline masters in other schools to facilitate early intervention. The Network members work closely with social work agencies and police for case referral, cross-school leadership training and joint extracurricular activities. The Network organizes three to four meetings every year. Local stakeholders such as social workers, police school liaison officers and representatives of the Social Welfare Department attend the meetings to share their views and devise partnership work plans with the discipline masters and the schools. An example is the “Teen Road to Same Heart Home-School Support Network Project” launched in 2006. The project was funded by the Yuen Long District Council. It strived to serve secondary school students, who had poor relationship with their parents to improve the student–parent relationship to counteract the negative influences of undesirable peers. Another project of the Network involved working with the police and social work agencies to rehabilitate students, who had committed crime and were serving under the Police Superintendent’s Discretion Scheme. The Network Chairperson stated that although their work had no funding or resource support, it was a typical bottom–up local social cohesive effort energized by a shared mission to foster youth development in the district and a felt need to work together to combat youth challenges in TSW.

4.2.3. Religious groups Aside from government departments, NGOs and schools, local religious bodies also play important roles to meet the spiritual, social

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and educational needs of the TSW residents. The Tin Shui Wai Christian Pastoral Fellowship, a group of 24 churches in the district, launched a campaign in 2008 to develop a caring culture in TSW. About 3,500 TSW residents have pledged to become good neighbors to the needy in the campaign. They would visit the elderly, single-parent families and the underprivileged. A participant said that she became motivated to care for her neighbors after the Tin Yiu Estate family tragedy in October 2007. She said, if that mother had been given enough care, she might not have decided to kill her two children before committing suicide. The participant was now volunteering in a primary school in TSW to tutor pupils and visit their families (South China Morning Post, 2 January 2008). Another Christian organization which runs a church and a school in TSW has also started an evening school to provide part-time courses to youths and adults, who want to advance their education. Such investment in continuous education should enhance the sustainable development of the residents in TSW.

4.3. Youth as Cohesive Assets According to official crime statistics and reports from the Police and the school Discipline Masters in the focus group discussions of the TSWYDP, youth crime and deviance in TSW have been high in frequencies but not serious in nature (Chu, 2005, 2007). Given the less than satisfactory provisions for youth development and stimulation in TSW, it is logical to question what protective factors exist to keep youth crime within tolerable limits. Again, the 2006 “Tin Shui Wai Youth Survey” provided some useful clues. The secondary school respondents reported that in times of stress, their most commonly used social support were peers (79.8%), parents (48.8%) and classmates (32.3%). This pattern is similar to the findings of the Benchmark Study on Civic Engagement and Social Network (The University of Hong Kong Policy 21 Ltd., 2006). It was found that 57.4% of the respondents reported to have four or more good friends. In addition, 60.7% held a very positive impression of their neighbors. They found TSW people to be caring and helpful. However, when asked if they would like to “move out of TSW”,

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47.8% indicated a desire to do so. Taken negatively, this showed that although the participants treasured their social networks in the district, other deficiencies in the community made them aspire for opportunities outside TSW. Taken positively, it can also be interpreted that despite coming from grassroot families, these youths have great aspirations and courage to transcend their social and physical confinements to strive for new horizons. With 20.6% of its population under the age of 15 (Census and Statistics Department, HKSAR Government, 2007a, b), TSW is the most youthful community in Hong Kong. While the public and the media often focus on youths with problems, it is important to emphasize that the majority of youths in TSW have been managing quite well, whether they come from problem-free or -laden families. A significant proportion even becomes very active volunteers for the TSW community. Evidence can be found in the youth’s representation in the annual “Yuen Long District Outstanding Volunteer Election” campaign. The election, launched by the Yuen Long District Coordinating Committee on Promotion of Volunteer Service of the Social Welfare Department, was first organized in 2002 to promote volunteering and recognize volunteers’ contribution. From 2002 to 2006, over 3,149 people were nominated to participate in the election. 21.8% or at least 687 were young people, including children, adolescents and youths in Yuen Long and TSW.

5. COHESIVE RESOURCES FROM THE LARGER COMMUNITY With increased advocacy on corporate social responsibilities, and that company should be “caring companies”, initiatives from international corporations, large local companies and tertiary institutions to connect new town youths to the mainstream are increasingly evident. The 2005–2007 HKU TSWYDP is a good example to show how academic institutions can work together with local stakeholders to devise community-sensitive measures to meet youth needs in the district. The Project Team collaborated with TSW community partners such as social service agencies, schools and the police and worked through

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services, research and advocacy to enhance the positive development of young people in TSW. In early 2006, the project team worked with the ELCHK Tin Shui Wai Integrated Youth Service Center to run the “Anti-Substance Tobacco Refusal Operation (ASTRO)”. It was a psychosocial primary prevention program developed in Hong Kong in 2003 to help young people aged 13–16 to refuse drugs, early sex and other delinquent behaviors. A total of 179 teenagers from five secondary schools benefited from the program. In the summer of 2006, the project team conducted a large-scale survey on over 1,300 secondary school students and their parents in TSW to document their needs and concerns to facilitate the service planning. To draw upon local and overseas expertise to advocate for community synergy to foster youth development, the HKU TSWTDP and the ELCHK Social Service Department organized the “Tin Shui Wai Youth Development Roundtable Seminar” in The University of Hong Kong in October 2006 and the “Youth Development in New Towns in Chinese Societies” regional conference on 20–21 April 2007 in a school hall in TSW. The conference is the first regional conference held in TSW. Academic experts and youth service practitioners from Shanghai, Shenzhen, Taiwan, Macau and Hong Kong made presentations in the conference. About 60 students from three top Hong Kong secondary schools outside TSW were invited to join the conference. They also made a community tour to see the real TSW so that they would not continue to be misled by second-hand media portrayal of the district. A Chinese book “Critical Moment: 18 Youth Stories in Tin Shui Wai” was also published in 2007 to document the success stories of 18 TSW youths in combating their life challenges and developing meanings in life and a web site was created to make the work even more publicly accessible. The donation from the Mrs. Li Ka Shing Fund to the TSWTDP represents another important cross-sectoral support to youth development in TSW. As a matter of fact, every family tragedy in TSW urges prompt and generous support from the private and business sectors to TSW. These supports take the form of monetary donations, contribution of expertise in school administration, and even person-toperson mentoring of young people of TSW by successful businessmen

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and professionals who do not work or reside in TSW. Some of such support is offered on individual and ad hoc bases, while others are formalized long-term multifacet commitments. Concerned government departments might find it useful to identify, document and better coordinate such energies to optimize their usefulness for the youths and their families in TSW. After the second family tragedy in October 2007, TSW has become the focus of public concern. Various charity organizations and concern groups are very concerned about the underprivileged area and initiated numerous programs to help the TSW youths. Community Business, a nonprofit organization in Hong Kong, aims to promote corporate social responsibility in corporations. Its members and sponsors include some of the world’s largest companies. Learning from the success of the TSWYDP’s successful HKU and youth center visit in 2007, Community Business launched the “Journey of Opportunity” Action Day in May 2008 in which TSW youths met employees from leading companies in Hong Kong. The day was designed to inspire young people and to show them the opportunities that are available for further educational and employment. Corporate volunteers acted as mentors and accompanied the youths on visits to educational institutes, such as the University of Hong Kong, and corporate offices, including those of Microsoft (South China Morning Post, 7 June 2008). Similar projects on visits and exposure experiences include Hong Kong Jockey Club’s guided tour to its headquarter, Chung Ying Theatre Company’s cultural tour to the Academy for Performing Arts in Wan Chai, and film gala show sponsored by the Roundtable Community to enlighten the youths of TSW. Aside from one-shot exposure, the HKU 1980 graduates also organized a mentorship project to arrange volunteer professionals to mentor youths from grassroot families, and TSW youths were one of the target groups they served. Celebrities also volunteered to compose songs and present shows or be nominated as Stars of TSW to help promote more positive aspects of TSW. These, together with the employment campaigns and job fairs to create job opportunities for TSW youths and other residents, were all active efforts from the larger community to

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enhance the social cohesion between the remote TSW and the other parts of Hong Kong.

6. DISCUSSIONS AND IMPLICATIONS Having cited numerous social cohesive efforts initiated by the policymakers, NGOs, as well as Hong Kong citizens living inside and outside TSW to cater for the optimal development of young people in the area, it will be useful to evaluate to what extent such efforts have promoted social cohesion in TSW in effective and sustainable manners, and to what extent such achievements can be transferred to the development of other new towns in Hong Kong. To guide the evaluation, a brief summary of the concept and parameters of social cohesion will be useful.

6.1. Social Cohesion, Social Harmony and Policy Agenda “Social cohesion” is advocated by Alan Walker and his co-researchers in the late 1980s in the European Foundation on Social Quality as one of the four conditional factors of social quality: socioeconomic security, social cohesion, social inclusion and social empowerment.1 Since the 1990s, the promotion of social cohesion has become a popular government policy initiative especially in Western societies to respond to increasingly tense social relationships in deprived communities, arising from joblessness and homelessness, ethnically diverse neighborhoods, and high incidence of crime. It is also considered

1Alan Walker is a Professor of the Department of Social Policy of the University of Sheffield, the United Kingdom. He is the Chair of the European Foundation on Social Quality (EFSQ) based in Amsterdam, responsible for developing the concept of social quality. For his works on social quality, see Beck, W et al. (eds.) (1997) The Social Quality of Europe, The Hague and Cambridge (MA, USA): Kluwer Law International, Reprinted in paperback by Policy Press (Bristol), 1998; Beck, W et al. (eds.) (2001) Social Quality: A Vision for Europe, The Hague and Cambridge (MA, USA): Kluwer Law International.

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important in building the social capital of the residents, especially for the young generation. By the late 1990s, leaders in Mainland China and Hong Kong have also treated social cohesion and social harmony as important social and political agendas to manage increasing social tension arising from widening economic and social disparity between ethnic groups and social classes. Over the years, the conceptualization of social cohesion has expanded from economic focus to become more multifaceted. There was agreement that social cohesion should go beyond “not having much tension” and “rubbing along together”, to “having positive collaborative relationship” for productive social changes. For instance, Hudson and colleagues (2007) claimed that social cohesion should not only help to erode disparities, inequalities and social exclusion. It should encourage positive relationships between different groups in a community to nurture the social infrastructure of neighborhoods, social relations, interactions and ties to achieve the positive social changes. These theorists tend to treat social cohesion as an end, and indices were devised to assess the social cohesiveness and to quantify the social capital. In Hong Kong, social cohesion has been emphasized as an important policy guideline in the annual policy addresses of both the former and the current Chief Executives. The concepts of social cohesion and social harmony were often used together or interchangeably. In his 1999 policy address, Mr. Tung Chee-Wah claimed all Hong Kong people desired a society of greater harmony in which everybody in that society respected and treated others well. In his 2000 Policy Address, policies to promote social cohesion and social harmony were proposed in the areas of school education, young people, culture and sports. Mr. Donald Tsang elaborated along this direction, and his 2005 policy address (HKSAR Government, 2005) was entitled “Working Together for Economic Development and Social Harmony (HKSAR)”. Related policies included upholding social justice, development of welfare services, helping the needy and protecting environment and health. In subsequent years, issues of policy concern explicitly included supporting the family, community and neighborhood, and even promoting mediation services to

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ensure more effective resolution of conflicts (HKSAR Government, 2006, 2007). After addressing the “what” and “why”, it is also important to work out the “how” in fostering the social cohesion. Berger-Schmitt (2000) emphasised that besides top–down government-initiated social policies, bottom–up efforts initiated by local stakeholders like residents, grass-root organizations and NGOs often work more directly and effectively in building a harmonious community. In the United Kingdom, the London Department for Communities and Local Government (2007) reported on six community case studies and stated that addressing economic needs is necessary but not sufficient in building the social cohesion. Promoting meaningful, positive and engaging interaction among the residents is equally, if not more, important than providing for their material or employment security. Key guiding philosophy includes “empowerment and ownership”, and operational principles include “participation and partnership”. Specifically, social cohesion promotion should include the engagement and involvement of stakeholders (especially young people); supporting the socioeconomic well-being of individuals and communities; generating a sense of commonality and positive relationships; and effectively managing events that threaten cohesion into opportunities that enhance the identity and security.

6.2. Fostering Social Cohesion in the Challenged City of TSW Since the 1970s, Hong Kong has started to develop satellite new towns outside its central business district to ease the congestion around the harbor. The development of new towns has always been vested with problems such as poor synchronization of facilities and services resulting in some social problems such as unemployment leading to family stress and social disharmony. However, it was not until the very problematic development of TSW, including the occurrence of the 2004 and 2007 family tragedies, that really rang an alarm to the government and stakeholders on what can be done to help this

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city of sadness, and what should be done in developing more new towns. Fortunately, as outlined in the above sections, attempts to save this “City of Sadness” started with but did not stop at injecting material resources into TSW. Both top–down and bottom–up networks and partnerships were formed to pace up some development work. These include improving the physical environment and facilities; advancing transportation networking; creating more opportunities for continuing education and employment; fostering social networking and cohesion across social strata and ethnic groups; improving district image by portraying TSW as a tourist attraction for naturelovers and cyclists. The experience of launching the TSWYDP, especially the insights shared in the roundtable and conference discussions arranged as part of the project, showed that some of the recommended good practices highlighted in the social cohesion literature (Berger-Schmitt, 2000; Hudson et al., 2007; Easterly et al., 2006; London Department for Communities and Local Government, 2007) have been used effectively in improving the fate of TSW. The provision, through numerous social enterprise projects, of creative employment opportunities for different members of the TSW community keeps them meaningfully engaged, makes them feel dignified, respected and mentally healthy, and offers them the resources to become consumers and customers to contribute to further community development. Engaging local residents to utilize local natural scenery, skills and products to create business opportunities and energize local market have reaped initial success in the past couple of years. The self-satisfaction and social identity generated through such direct input into the home community can be easily seen from the proud faces of the TSW residents.2 In sustaining social cohesion in TSW, schools and school teachers have assumed pivotal roles in cultivating the pro-social attitudes 2More

examples can be found from the book Critical Moment: 18 Youth Stories in Tin Shui Wai, edited by the Department of Social Welfare of Evangelical Lutheran Church of Hong Kong and Faculty of Social Sciences of the University of Hong Kong in 2007.

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and values in the young people, especially when TSW families are over-represented by public assistance recipients and mother-headed single parent families, and often under stress (Tsang, 2007). Parents are often not the best agents to foster the best social identity for their children. Schools have functioned as the most legitimate, natural and resourceful platform to nurture such perceptions and attitudes in young people. Through active extracurricular activities, assumptions of responsible positions for one’s class, school and even Hong Kong are all favorable factors that have sustained the social cohesion in the younger generation of TSW. The thrilling success of hosting an international academic conference in a secondary school in TSW, the proud statement of some youths such as “I will be one of the first university graduates among the many families in my floor”,3 the willing parent–child volunteer teams to serve needy families in the neighborhood, the rapid and very enterprising development of volunteer networks and parent–school collaborations networks in TSW, the mentorship network with community and business partners outside TSW, are all obvious examples of such positive social synergy. In the authors’ close interactions with government departments and NGOs, it was noted that collaboration between government departments was sometimes even less smooth and more bureaucratic than collaborations between government departments and NGOs, or among NGOs. For example, the Housing Department collaborated with an NGO instead of with the Social Welfare Department to start a social work team to orient new residents to move into a new public housing estate. Incidentally, after the 2007 family tragedy, and the assertive directives from Secretary for Labor and Welfare Matthew Cheung Kin Chung to rebuild TSW as soon and as far as possible, the annual district welfare forum witnessed increased collaborations among the government departments. The 2009 forum was 3Housing in Hong Kong are typically multistorey high rise buildings. Each floor houses many families each living in separate apartments. Given the young history of TSW, it is expected that more and more families will begin to benefit from having children who completed tertiary education.

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a joint function by Home Affairs Department, Social Welfare Department, Education Bureau and Housing Department. It is promising that both top–down and bottom–up efforts to foster social cohesion in TSW can be brought to fruition in the near future. With the active articulation of an ecological-systems perspective (Bronfenbrenner, 1979) involving tripartite collaboration among the government, NGOs and business sectors to foster community wellbeing, it is probable that more cross-sectoral synergy will be even more forthcoming.

6.3. Transferring Practice Wisdom to New Town Development The rugged trajectory of TSW development shows that the Hong Kong government is still learning how to develop new towns. The case clearly shows that new town planning should go way beyond physical environmental planning and building, and pay due attention to the human aspects of social quality like social cohesion, social inclusion and social identity building. It should be a central policy objective, as stated in the annual policy address and district welfare forums (Yuen Long Social Welfare District Office, 2009), to enable officials and residents to meet each other, enjoy and collaborate with each other to enhance themselves, their families and the community, and to contribute to community building. In addition, there should be explicit support to research which creates locally sensitive and valid outcome indicators for social cohesion and harmony (Wong et al., 2006).4 The availability of such indicator can guide resource investment to ensure that injected resources and input can be used most cost-effectively. 4 In Wong et al.’s study (2006) respondents from a telephone survey stated that the most effective ways for the Hong Kong government to achieve the social harmony include “maintaining a clean and just government, maintaining the rule of law, promoting economic prosperity, promoting fair market competition, protecting labor rights, respecting cultural diversity and strengthening family cohesion” (40).

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7. CONCLUSION The efforts in theorizing and developing operational definitions of the concept of social cohesion suggested that social cohesion is a multifaceted concept. It can be treated as a desirable end state of a community. It can also be treated as means to produce the right climate for community building. Guided by such conceptualizations, this chapter illustrates with examples that in the case of youth development in TSW, youth development can be hampered by natural or incidentally created risk factors such as geographical isolation, inadequate infrastructure, few and skewed employment opportunities, clustering of low education and low-income residents, over-representation of new arrivals and single parents with young dependent children. Sarcastically, repeated cases of family tragedies acted as catalysts to attract attention and cohesive synergy from within and outside the district, and from community leaders to local residents and youths themselves, to create resources for youth development. To optimize and sustain the positive impact of such cohesive energy, due attention must be paid to the early detection and prevention of evident threats to youth development in TSW. The young population in TSW is growing up and leaving school for work. There is an urgent need to meaningfully engage these low-skilled and inexperienced young people for gainful employment so that they do not bury themselves at home or roam the street and create social unrest to offset the boredom arising from no-school, no-work. With the financial tsunami that has threatened local and global economic viability, the creation of employment opportunities has become more challenging than ever. At the same time, the geographical proximity between TSW and Shenzhen, another mega city in South China, poses strong attraction for TSW youths to work and seek recreation there. Unfortunately, increased economic activities between the two places is also coupled with escalating youth problem statistics, including drug consumption, drug trafficking, crime and commercial sex activities. Even the police and Discipline Masters in the secondary schools indicated worries in maintaining the TSW youth crime at a “high frequency but low severity” state.

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The proportionately higher new arrivals from China and racial minority population in TSW also pose challenges of social inclusion in the district. Fortunately, Shenzhen has been selected by the Chinese government as the pioneer city to develop social work and train up social service personnel for China, and relevant resources have been injected to implement such plans (Ministry of Civil Affairs, PRC, 2006, 2008). There is also intense interest in personnel training and conference sharing to ensure that social enterprises are viable business instead of charity-under-business-cover. With the concerted support from the Hong Kong community to TSW development, and the Chinese government’s support to Shenzhen’s social service development, it is promising that the district will grow richer with youth development, recreation and employment opportunities.

ACKNOWLEDGMENTS The authors would like to acknowledge the generous financial sponsorship by the Mrs. Li Ka Shing Fund to the “Tin Shui Wai Youth Development Project”.

REFERENCES Beck, W et al. (eds.) (1997). The Social Quality of Europe. The Hague and Cambridge (MA, USA): Kluwer Law International. Beck, W et al. (eds.) (2001). Social Quality: A Vision for Europe. The Hague and Cambridge (MA, USA): Kluwer Law International. Berger-Schmitt, R (2000). Social Cohesion as an Aspect of the Quality of Societies: Concept and Measurement. EuReporting Working Paper No. 14, Centre for Survey Research and Methodology (ZUMA) Social Indicators Department Mannheim. Bronfenbrenner, U (1979). The Ecology of Human Development: Experiments by Nature and Design. Cambridge, MA: Harvard University Press. Catalano, RF et al. (2002). Prevention science and positive youth development: Competitive or cooperative frameworks? Journal of Adolescent Health, 31(6), Supplement 1, 230–239.

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Census and Statistics Department, HKSAR Government (2007a) 2006 Population By-Census: Summary of Results. Hong Kong: Census and Statistics Department. Census and Statistics Department, HKSAR Government (2007b) 2006 Population By-Census Basic Tables for Constituency Areas: New Territories. Hong Kong: Census and Statistics Department. Chu, YK (2005). An analysis of youth gangs in Tin Shui Wai. Hong Kong Journal of Social Sciences, (29), 1–27 (in Chinese). Chu, YK (2007). Youth violence in Tin Shui Wai in Hong Kong. Journal of Youth Studies, 10(1), 14–28 (in Chinese). Damon, W (2004). What is positive youth development? American Academy of Political & Social Sciences, 591, 13–24. Department of Social Welfare of Evangelical Lutheran Church of Hong Kong and Faculty of Social Sciences, The University of Hong Kong (2007). Critical Moment: 18 Youth Stories in Tin Shui Wai. Hong Kong: Evangelical Lutheran Church of Hong Kong (in Chinese). Easterly, W et al. (2006). Social cohesion, institutions, and growth. Economics & Politics, 18(2), 103–120. Hong Kong Special Administrative Region Government (2005). Hong Kong Chief Executive Annual Policy Address 2005–2006. Retrieved on http:// sc.info.gov.hk/TuniS/www.policyaddress.gov.hk/2005/eng/index.htm [April 2009]. Hong Kong Special Administrative Region Government (2006). Hong Kong Chief Executive Annual Policy Address 2006–2007. Retrieved on http:// sc.info.gov.hk/gb/www.info.gov.hk/gia/general/200610/11/P2006 10110131.htm [April 2009]. Hong Kong Special Administrative Region Government (2007). Hong Kong Chief Executive Annual Policy Address 2006–2007. Retrieved on http://sc.info.gov.hk/gb/www.info.gov.hk/gia/general/200710/ 10/P200710100084.htm. [April 2009]. Hudson, M et al. (2007). Social Cohesion in Diverse Communities. York: Joseph Rowntree Foundation. Information Services Department, HKSAR Government (2007a) Press release, Hong Kong: Information Services Department of the Hong Kong SAR Government, 15 November 2007.

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Information Services Department, HKSAR Government (2007b). Press release, Hong Kong: Information Services Department of the Hong Kong SAR Government, 13 December 2007. Information Services Department, HKSAR Government (2008). Press release, Hong Kong: Information Services Department of the Hong Kong SAR Government, 26 February 2008. London Department for Communities and Local Government (2007). What Works in Community Cohesion. London: Department for Communities and Local Government. Ministry of Civil Affairs, PRC (2006). The Speech by the Deputy Minister Mr. Li L. Q. on the Construction of Social Work Workforce, 12 December 2006. Retrieved on http://sw.mca.gov.cn/article/ldjh/200710/ 20071000002609.shtml (in Chinese), [May 2009]. Ministry of Civil Affairs (2008). Highlights of China Civil Affairs Development Report, Ministry of Civil Affairs. Retrieved on http://www.china.org.cn/ government/central_government/2009-02/06/content_17233163. htm (in Chinese), [May 2009]. Shek, DTL et al. (eds.) (2007). Positive Youth Development: Development of a Pioneering Program in a Chinese Context. London and Tel Aviv: Freund. Sing Pao, 19 February 2004. South China Morning Post, 10-member team to help new arrivals fit in, 22 December 2007, p. City 4. South China Morning Post, Deprived site could host tourist attraction, 2 January 2008, p. City 3. South China Morning Post, Tin Shui Wai top recipient of new community projects, 7 March 2008, p. City 3. South China Morning Post, Window of hope in “City of Sadness”, 13 June 2008, p. EDU 6. The Standard, Outreach aid planned for Tin Shui Wai, 22 December 2007, p. P07. The University of Hong Kong Policy 21 Ltd. (2006). Benchmark Study in Civic Engagement and Social Network of Youth in Hong Kong. Research commissioned by the Commission on Youth, Home Affairs Department of the Hong Kong Special Administrative Region Government, Hong Kong: The University of Hong Kong Policy 21 Ltd.

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Tsang, SKM (2007). Challenged motherhood: Risk and protective resources perceived by mothers with adolescent children in an impoverished new town in Hong Kong. Paper presented in The Fourth Annual East Asian Social Policy Research Network (EASP) International Conference Restructuring Care Responsibility: Shifting the Family-State-Market Boundary in East Asia, The East Asian Social Policy research network. The University of Tokyo, Japan, October 2007. Tsang, SKM et al. (2006). Transcending social woes: Risks and protective resources perceived by adolescents in Tin Shui Wai (P0986). Paper presented in the 5th International Conference on Social Work in Health and Mental Health, Hong Kong, 10–14 December 2006. Tsang, SKM with Review Panel (2004). Report on review of family services in Tin Shui Wai. Review commissioned by Social Welfare Department of the Hong Kong SAR Government after the Tin Shui Wai family tragedy, Hong Kong: Authors, April 2004. Wong, CK et al. (2006). The theory and practice of building a harmonious society: The views of Hong Kong citizens and related policy implications. In Research Report, Hong Kong Institute of Asia–Pacific Studies, The Chinese University of Hong Kong, Hong Kong. Yuen Long District Social Welfare Office (March 2007). Yuen Long district information sharing. Paper presented in the Yuen Long District Welfare Services Planning Forum on 13 March 2007, Hong Kong (in Chinese). Yuen Long District Social Welfare Office (March 2008). Yuen Long district information sharing. Paper presented in the Yuen Long District Welfare Services Planning Forum on 18 March 2008, Hong Kong (in Chinese). Yuen Long District Social Welfare Office (March 2009). Yuen Long district information sharing. Paper presented in the Yuen Long District Welfare Services Planning Forum on 17 March 2009, Hong Kong (in Chinese).

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Chapter

2 In Search of Harmonious Society in China: A Social Policy Response Kinglun Ngok * and Yapeng Zhu*

In the past 30 years of economic reform, China has made great economic achievements and become the fourth largest economy in the world. However, the unilateral focus on economic growth has led to a serious imbalance among economic growth, environmental protection, and social equality. The outbreak of the severe acute respiratory syndrome (SARS), crisis in 2003 made China’s new generation of political leadership aware of the importance of social development and social construction. As a result, some new policy ideas, such as “harmonious society” and “scientific development”, have been formulated as new direction of public management and public policy in China. In line with this new direction, more and more social policies have been made and implemented by the central government. This chapter will first outline the socioeconomic context in which the concept of “harmonious society” was formulated. Then, the meaning and *Institute for Social Security and Social Policy, Sun Yat-sen University. 69

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Kinglun Ngok and Yapeng Zhu policy implications of the concept will be explained. The core of the chapter is to examine the new developments of social policy in China since 2003 and their impacts on building a harmonious society.

1. INTRODUCTION Although market-oriented economic reforms in the past three decades have brought unprecedented economic growth and improved the living standards of over one billion people in China, the unilateral focus on economic growth by the governments at all levels has adverse developmental implications. It has led to a serious imbalance among economic growth, environmental protection, and social equality. That imbalance is apparent in a widening gap between the rich and the poor, an increasing urban–rural divide, and destabilizing regional disparities. Such an imbalance has been further compounded by population expansion, escalation of conflicts between economic development and ecological environment, and natural resources, a backward mode of economic growth, poor performance, and low competitiveness of the overall economy. These developments and the grievances of those who have lost ground as a result of the economic reform process have led to widespread of civil unrests in China (Cheng and Ngok, 2004). Reflecting on these contradictions and problems in the course of China’s rapid economic development over the past three decades, especially on the bitter experiences of the severe acute respiratory syndrome (SARS) crisis, the new generation of Chinese leadership led by President Hu Jintao sought to redefine the concept of development in China to maintain the balanced development in economy and society. As a result, the “theory of scientific development” (kexue fazhanguan) was formulated in the late 2003. This new approach to development calls for a “people-centered development, which is comprehensive, coordinated and sustainable, for the promotion of overall harmonic development of economy, society and human beings” (CCCCP, 2003). Based on the “theory of scientific development”, the new notion of “harmonious society” (hexieshehui) was brought forward at the Fourth Plenary Session of the 16th Central

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Committee of the Chinese Communist Party (CCP) in 2004. In November 2006, the Sixth Plenary Session of the 16th Central Committee of the CCP launched the “Resolution on the Major Issues Regarding Building a Socialist Harmonious Society” (hereafter “the 2006 Resolution”). The 2006 Resolution highlights the importance, guidelines, and goals of building a socialist harmonious society. It puts forward the principles to be followed, the main objectives and tasks for building such a society by 2020, such as further improving the socialist democratic and legal system and narrowing the gap between urban and rural development and between different regions (CCCCP, 2006). This chapter firstly outlines the socioeconomic context in which the concept of “harmonious society” was formulated. Then, the meaning and policy implications of the concept will be explained. The core of the chapter is to examine the new developments of social policy in China since 2003 and their impacts on building a harmonious society.

2. MARKET-ORIENTED REFORM, ECONOMIC MIRACLE, AND SOCIAL INEQUALITY Given the economic backwardness and poor economic performance of the state sector, the post-Mao leadership, led by Deng Xiaoping, shifted their focus on economic growth from the class struggle in the late 1978 when the reform and open-door policy were adopted. While open-door policy were adopted to attract foreign investment and advanced technology, the market-oriented reform strategy was launched to revive the poor national economy. To destroy the egalitarian legacy of the Maoist era, unbalanced growth theory and pragmatic principles were justified. New policy slogans, such as “Getting rich is glorious”, “Let a few people get rich first”, and “No matter it is white or black, those who can catch mice are good cats”, became popular. Economic growth became the paramount policy goal of the party-state and the source of its legitimacy. As Deng Xiaoping put it, “(G)rowth is the hard truth” (fazhan shi yingdaoli).

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Traditionally, politicians use the gross domestic product (GDP) as an indicator of public well-being. In Deng Xiaoping era, the emphasis of economic building was placed on the narrow economic dimension. As a result, the measure of GDP has become the most dominant concern in adopting national development plans. GDP per capita has been treated as the primary measure of development objectives, economic success, government’s performance, and citizens’ national welfare. In line with the decentralization policy, the growth of GDP and the measure of GDP per capita have been used to determine the economic status and rank of local governments in the overall hierarchy of national development. They are even used as the most important indicators to measure the performance of local leaders. In other words, the measure of GDP has been used to determine the career development of local officials. As a result, the pursuit of GDP has become the central task of officials at all levels. Officials have been participating in a national campaign of GDP production. No matter how parochial, superficial, and misleading the GDP measure may be, it has been effectively used by economists, politicians, and ordinary people in certifying the rank of a county, a city or a province in national economic order. It has been widely and explicitly observed that the measure of GDP is accepted as the principal indicator of economic progress, sign of well-being, yardstick of success, performance of local leaders, and basis of policy debate in the post-Mao China, especially in the 1990s. As a result, inappropriate development policies and strategies were launched to boost GDP nationwide. China has achieved greatly in terms of the GDP figures. From 1978 to 2004, China’s GDP has increased from 147.3 billion US dollars to 1.6494 trillion US dollars with an average annual growth rate of 9.4%. Its foreign trade has risen from 20.6 billion US dollars to 1.1548 trillion US dollars, averaging an annual growth rate of over 16%. China’s foreign exchange reserve has increased from 167 million US dollars to 609.9 billion US dollars. The number of rural poor has dwindled from some 250 million to 26 million (Hu, 2005). Apparently, China’s market transition since the late 1970s has been in parallel with the worldwide dominance of market-driven

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neoliberal ideology. Since the early 1980s, in the global atmosphere dominated by neoliberal market ideology and neoclassical approach of economics, there has been a fundamental pro-market shift in the policy orientation of developing nations. China is no exception though it has totally different starting point. For the purpose to improve the dire economic performance and provide Chinese people with enough food, the post-Mao Chinese leadership with Deng Xiaoping as the core decided to give up the traditional socialist planned economy through the adoption of reform and opening-up policy in the late 1970s. In doing so, China began to embrace a new set of market-led policies, such as the creation of private market, privatization of state enterprises, downsizing of the state sector, deregulation of market controls, liberalization of trade and foreign investment, and withdrawal of welfare subsidies. These changes in policies have been pursued in order to enhance market competition, increase economic efficiency, and accelerate economic growth. Although the state still plays the principal role in policymaking, newly emerged interest groups, especially the political and economic elites, have a role to play. Since market institutions are underdeveloped, political power is still monopolized by a few elites, and interests are not fully organized and well represented, the economic and political elites could use development programs to make economic gains and legitimize their repressive rule. As a result, the development initiatives become an instrument of state domination. After about three decades of implementation of the reform and open-door policy, China has accomplished great economic achievement and became the fourth largest economy in the world in 2006. Nevertheless, the unilateral economic growth policy has wielded income inequality, social erosion, environmental degradation, and ecological crisis. Not only social tension among different social groups has been intensifying but there have also been worsening forms of environmental degradation, such as air and water pollution, land degradation, deforestation, and biodiversity loss. As Liou (2000) points out, China’ economic reforms have also resulted in problems of social control, official corruption, social inequality, urban-rural conflict, social unrest, and crime. These problems are especially

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noticed in service areas such as public education, public health, and customer protection. Social inequality in China is first reflected by the income inequality. Before the economic reforms, the income inequality in China was relatively low, but the Gini coefficient, a common indicator of income inequality with zero representing absolute equality and one representing absolute inequality, has been rising rapidly since the economic reforms. Income gaps between urban and rural and between the prosperous coastal region and the interior parts have been widening. Based on estimates made by some scholars about the national income inequality during the early years of reform, the Gini coefficient was 0.30 (Yang and Xin, 2002). According to data from the first household survey conducted by the income distribution research team of the Institute of Economics, CASS (Chinese Academy of Social Sciences), the national Gini coefficient was estimated at 0.382 in the late 1980s. The same research team conducted another national household survey in 2002, showing the national Gini coefficient for that year was close to 0.46. By comparison, we can find that the Gini coefficient in China has increased from 0.3 in the early 1980s to 0.46 in the early 21st century. That means China’s national income inequality has widened by more than 50% in the last two decades (UNDP, 2005). The 2005 UNDP report also shows that in all major categories of the human development index — from per capita income to life expectancy to literacy rate — regional imbalances are severe and are growing in China. The report also reveals that China ranks 90th in the UNDP’s 131-nation human development index (UNDP, 2005). All these data show that China has changed from an egalitarian country into one of the most unequal countries. The impressive reforms have, however, also produced a huge gap between the rich and poor. Based on the national samples, the income share of the highest-income group in 1988 was 7.3 times that of the lowest-income group. When comparing the income shares of different income groups in 2002, the 1% with the highest income controlled 6.1% of the total income. The top 5% controlled nearly 20% of the total income, while the top 10% controlled nearly 32%. The average income of the highest-income decile group was eleven

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times that of the lowest-income decile group. The widening was more evident in rural income inequality in the late 1980s, in urban income inequality in the early 1990s, and in urban–rural income gap since the late 1990s (UNDP, 2005). Along with the increasing income inequality, a substantial underclass of about 40 million rural poor people and 10 million urban poor is produced. Among them, laid-off workers, the unemployed, retirees, workers in poorly run enterprises, poor peasants, migrant workers, and land-expropriated farmers are worst affected. Although official poverty lines have been set locally since the mid-1990s, many living under the lines have not been offered official relief. An official survey conducted in 1999 revealed that the per capita monthly income was less than 100 yuan for 6–10% of all urban families. Those in the top 20% secured 42.4% of the total income of the country, while the bottom 20% earned just 2.2% of the total income (Yang and Xin, 2002). Despite the economic growth, the urban–rural divide has been an enduring problem in China, and China now has the biggest urban–rural gap in the world, with per capita income among urban residents about four times that of rural residents, compared to the global average ratio of about 1.5. Rural income has been in decline since 1997 (Yang and Xin, 2002) and the urban–rural income gap has led to a large-scale migration from villages to cities. The largest internal migration in the world in peacetimes — 100 million peasants — move from city to city looking for work in the so-called mangliu (blind flow). In addition, wide disparities exist between the coastal regions and inland regions, especially the inland regions with substantial ethnic minorities. Some scholars described China as “a country with four worlds”. The first world refers to the most prosperous urban areas, the second the relatively prosperous coastal provinces, the third the poor interior provinces, and the fourth the poverty-stricken border regions and the rural areas dominated by ethnic minorities. In 1999, average income in Shanghai (US$15,516) was twelve times that in Guizhou province (US$1,247), an interior province in the “fourth world” (Hu et al., 2001).

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The result of the imbalanced development is the rising tension in Chinese society, and is the increasing worries concerning potential social instability since the mid-1990s. Sporadic protests occurred in rural villages and cities have become a widespread and serious social crisis. In 2001, a report by a Communist Party research organization on mounting public anger over inequality, corruption, and official aloofness in China described a spreading pattern of “collective protests and group incidents” arising from economic, ethnic, and religious conflicts. The report cites growing inequality and corruption as major sources of discontent, and warns that even greater social conflicts are likely as China opens its markets to foreign trade and investment (Eckholm, 2001). In August 2002, three prominent scholars issued a serious warning against the social crisis in China. In their article titled “The most serious warning: the social crisis behind the economic prosperity”, the authors, using a large number of statistics and data, argued that the civil discontent in China is growing fast, and the society is on the edge of great crisis. If not handled properly, the society will be out of control, and the government will be toppled down. According to the article, the main reasons for social crisis include unemployment, political corruption, the heavy tax burden of the peasants, the increasing gap between the rich and poor, the deterioration of law and order, and so on (Wang et al., 2002). The above-mentioned evidences show that China’s high-GDPcentered development paradigm is too costly to sustain. In general, the GDP of a country or a region represents the total money value of annual goods and services produced in a country or a region. The obvious limitation of the GDP measure is that it is incapable of measuring the noneconomic (social) dimension of human welfare, which constitutes an essential part of overall development. In addition, the GDP measure overlooks the issue of income distribution, any economic gains made by a few high-income households may be understood as benefits to all; it does not make a distinction between the gainers and losers of higher economic growth. In the absence of market transparency and competitive local buyers, valuable public assets have often been sold at nominal prices to the vested interests, which are associated with the policymaking elites,

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without much concern for public accountability. The policy of streamlining state sector and reducing welfare subsidies has adverse impacts on low-income citizens. The retreat of the government from the fields, such as education, health, housing, and so on, represent a major challenge to the realization of basic needs for the poorest households. Low-income citizens, mainly the unemployed urban people, the rural–urban migrant workers, and the peasants, are not affordable for education, health care, and housing. Patients without money are rejected by the hospitals and students with economic hardship are not allowed into schools and universities. Property price is so high that only a small number of rich people can buy. The neglect of the basic needs of the ordinary people has invited much social unrest. Since the late 1990s, the unilateral economic growth paradigm has been facing serious challenges and public oppositions in China.

3. SARS CRISIS, LEADERSHIP SUCCESSION, AND HARMONIOUS SOCIETY To maintain social and political stability, some policy adjustments have been made in China since the mid-1990s. To placate the peasant discontent, the central government has made periodic criticisms of the excess taxes and corruption of the local and grassroots levels of government. Village elections have been promoted as giving more power to the peasants. The government has also carried out a social security policy of setting minimum prices for agricultural commodities and purchasing grain that fails to be sold at the minimum prices. A new scheme, tax for fee was introduced in rural China, which aims at abolishing all taxes levied by township and village councils and replacing them with a national tax that should not exceed more than 5% of household income (Li, 2006). To pacify the disgruntled workers, more money has been invested in the national scheme of the minimum living guarantee, a public income maintenance system for the laid-off workers and urban poor people (Wong and Ngok, 2006). The first few years of the new century witnessed further policy changes in China. In order to narrow down the regional disparity, the

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strategic policy of “Go West” was implemented in 2000. One year later, China joined the World Trade Organization (WTO) so as to respond the challenges of economic globalization. Nevertheless, the worsening social conditions resulted from the public policies, which unilaterally focused on economic growth in China, had not been recognized fully by the policymakers until the outbreak of the SARS epidemic. In the early 2003, SARS, an unprecedented public crisis, hit China heavily. The initial responses of the Chinese government to the SARS crisis reflected the constraints of the old policy paradigm of unilateral economic growth. That is, in order to secure stable social settings for economic growth, paramount priority is given to social stability. In doing so, all events with potential damage to social stability are suppressed. However, in the era of globalization, domestic efforts to keep state secrets, such as the SARS epidemic, were not effective as before. SARS epidemic was soon out of control and became an international crisis. Suddenly, the Chinese government was under unprecedented international pressure. Obviously, the widespread outbreak of SARS in China was a significant policy failure, and such a failure did much to discredit the prevailing policy paradigm. In this sense, the outbreak of SARS was the triggering event to initiate the course of policy paradigm shift (Guo et al., 2004). Under these circumstances, the newly established leadership of China led by President Hu Jintao and Premier Wen Jiabao was determined to push a policy change. A U-turn in government policy occurred in the late April 2003. After the SARS crisis, many new developments occurred in Chinese public management and public policy: the increase of transparency brought by the increasing role of mass media; the emergence of public accountability demonstrated by the dismissal of unqualified officials; and the turn to social justice as more attention was directed to the socially disadvantaged groups. Meanwhile, the government’s public relations management capabilities have improved considerably. It seems that these changes in Chinese public management and public policy were not the only instinctive reaction to the SARS crisis. In fact, the SARS crisis forced the Chinese policymakers to think

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about how to strike a balance between economic growth and social development. Taking lessons from the SARS crisis and the worsening developmental conditions, the new leadership sought to formulate a new set of ideas on Chinese social construction. In October 2003, at the Third Plenary Session of the 16th Central Committee of the CCP, the Chinese leadership put forward a new theory of “scientific development”. In line with the “theory of scientific development”, a new concept of “building socialist harmonious society” was formulated at the Fourth Plenary Session of the 16th Central Committee of the CCP in 2004. This new concept was further elaborated at the Sixth Session of the 16th Central Committee of the CCP in October 2006. At this session, a special resolution on building a socialist harmonious society was issued, which highlights the importance, guidelines, goals, and principles of building a socialist harmonious society in China. It is said that social harmony is the intrinsic nature of socialism with Chinese characteristics and an important guarantee of the country’s prosperity, the nation’s rejuvenation, and the people’s happiness (CCCCP, 2006). The resolution was not only the guideline of building harmonious socialist society but also the outline and announcement of social policy of China (Ngok, 2007). The promulgation of the resolution marked the coming age of social policy in China. In order to build a harmonious society, the policymakers of the central government rediscovered the value and importance of social policy, which was ignored in the past three decades.

4. THE QUEST FOR A HARMONIOUS SOCIETY: THE RESPONSES OF SOCIAL POLICY According to the official definition, the so-called “socialist harmonious society” is a democratic society under the rule of law, and based on equality and justice. It would also be an honest, caring, stable, vigorous, and orderly society in which humans live in harmony with nature (CCCCP, 2006). The Chinese leaders also mapped out the main objectives and tasks for building a socialist harmonious society by 2020, which include the “further improvement of the socialist democratic and legal system; implementation of the fundamental

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principle of administering the country according to law; guaranteeing respect for people’s rights and interests; narrowing the gap between urban and rural development and between different regions; favoring the emergence of a reasonable and orderly income distribution pattern; increase of household wealth and enabling people to lead more affluent lives” (CCCCP, 2006). Under the policy framework of “building a socialist harmonious society”, China’s public policy pattern is under transformation. Some scholars even concluded that a paradigmatic shift from the economic policy dominated policy pattern to the social policy dominated one has occurred in China (Wang, 2008). To tackle various social problems and promote social welfare has become the key work of the government. It is reasonable to argue that an era of social policy has come in China (Ngok, 2007). First and foremost, the basic value and goals of social policy in China have been formulated. On 15 October 2007, in his report to the Seventeenth National Congress of the CCP, President Hu Jintao defined clearly the values and goals of social policy in China. He announced that “(S)ocial development is closely related to the people’s well-being. More importance must therefore be attached to social development on the basis of economic growth to ensure and improve people’s livelihood, carry out social restructuring, expand public services, improve social management, and promote social equity and justice. We must do our best to ensure that all our people enjoy their rights to education, employment, medical and old-age care, and housing, so as to build a harmonious society” (Hu, 2007). In Section Eight of his report on “Accelerating Social Development with the Focus on Improving People’s Livelihood”, Hu identified specifically six major tasks central to people’s livelihood, including giving priority to education and turning China into a country rich in human resources; implementing a development strategy that promotes job creation and encourages entrepreneurship to create more employment opportunities; deepening reform of the income distribution system and increasing the income of urban and rural residents; accelerating the establishment of a social security system covering both urban and rural residents and guaranteeing their basic living

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conditions; establishing a basic medical and health care system and improving the health of the whole nation; and improving social management and safeguarding social stability and unity (Hu, 2007). Based on Hu’s speech, we can clearly identify the core values, long-term goals, and basic framework of social policy in China in the new century. The core values of China’s social policy are putting people first, guaranteeing people’s livelihood and enhancing people’s well being, and promoting social equity and justice. Its long-term goal is to establish a harmonious society. Second, for the purpose to build up a harmonious society, social policy has become the core work of the government as an array of social policy initiatives has been launched since 2003. By analyzing the work report of the central government presented by Premier Wen Jiabao from 2004 to 2008, we can find that the government has paid much more attention to social policy as more social policy areas have been covered. For example, in the 2004 work report of the central government, only two social policy areas, that is, education and public health had attracted attention from the government. Apparently, government’s attention to public health was just a reaction to the SARS crisis. In the years afterwards, more social policy areas have gained places on government agenda, and the relevant policies have become much more meticulous and comprehensive, especially in the areas of education, public health, and social security. In 2008, all the five classical areas of social policy, i.e., education, health, employment, social security, and housing, have been covered in the government work report (see Table 2.1). Taking education policy for example, in 2005, free compulsory education was first implemented in “poverty-stricken counties”. Then the free education has expanded to students of rural areas and cities all over the country in 2007 and 2008, respectively. This was the first time for China to achieve the real nine-year compulsory education for its citizens. As for other social policy sectors, the new type of rural medical cooperative system has been established all over the rural China. Meanwhile, the minimum living standard system was extended to cover both urban and rural residents in 2007. According to the 2008 government work report, a housing guaranteeing system

2006

Providing living allowance for boarding students

Providing free Extending the textbooks for scope of more than free textbooks 240 million primary and junior high school students from poor rural

Waiving all tuition Giving top priority fee and miscellaneous to middle-level of rural primary and vocational junior high school education students within two years

Free compulsory education in the whole China

Strengthening the infrastructure capacity of vocational education

Supporting and normalizing private education

(Continued )

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Two key education programs in western China commenced

Free compulsory education in Rural China

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Exempting fees of Exempting the textbooks and tuition fee and exercise books and miscellaneous of miscellaneous of primary and junior primary and high school students secondary students from rural families in from the key whole the western poverty-stricken region and some regions counties in the middle China

2008

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New round of action plan for education revitalization

2007

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2004

Social Policy Developments in China since 2004.

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Table 2.1.

2004

2005

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Table 2.1.

(Continued ) 2006

2007

2008

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families in the middle and western regions

Launching the urban residents basic health insurance system Building up the basic health care system covering both urban and rural residents

Extending the new type of rural medical cooperation system to the who country Improving the three-level health care service networks in rural areas and urban community health care service system (Continued )

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Strengthening the Building up the Launching the plan of building of disease preventive building and public health and control system developing rural system that covers three health care tiers of province, service system city, and county Advancing the Extending the pilot Developing urban pilot reform reform of new community health of urban type of rural care service, health care cooperative health deepening the system care system health system reform

In Search of Harmonious Society in China 83

Health

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Improving national student scholarship and loan and grant system

More policy support for and money investment in employment and re-employment

Opening multiple channels of job creations

Incorporating Building the basic preliminarily the living social assistance allowance system for the laid-off workers into the unemployment insurance system

Turning the collectively funded rural “five guarantees” system into the governmentfinanced “five guarantees” system

Implementing the law on employment promotion and the labor contract law Strengthening the resolution of labor disputes and labor inspection

Developing rural insurance industry

Including more peasant workers, employees in non-state economic entities and employees in informal sectors into the social insurance system (Continued )

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Helping family without employed members and people with difficulty in jobseeking

Universalizing the labor contract system

2008

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Solving the wage arrears problem of peasant workers

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Social security

Implementing measures to promote employment and reemployment

2006

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2004

(Continued )

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Table 2.1.

2005

2006 Improving the supervision of the social insurance funds

2007

2008

Giving priority to the lowincome families with difficulty in housing

Increasing the provision of middle and small size of housing at the middle and low price

Partially build up rural minimum living standard system Housing

Giving priority to developing ordinary commodity housing and economy housing

(Continued )

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Speeding up the pace to establish the social pooling of social insurance programs at the provincial level

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Building up the rural minimum living standard system in the whole country

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Exploring the way to build the minimum living standard system for rural residents

(Continued )

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2004

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2006

Putting more efforts to build public rental housing and economy housing, and meeting the housing demand of the middle and low income level families Building up housing guaranteeing system

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Source: Chinese Premier Wen Jiabao’s Government Work Report, 2004–2008.

Giving more fiscal and tax policy support for the building of the public rental housing system and improving the economy housing system

2008

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Building and improving the public rental housing system and housing renting system

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2004

(Continued )

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Table 2.1.

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will be established in the next five years. Urban poor families will be eligible for affordable housing. In addition, the most significant changes can be found in the housing policy area. Before 2006, housing policy was regarded as a part of real estate policy, and no social housing policy was recognized. In the 2006 government work report, social housing policy was separated from the real estate policy. As a result, the housing demand of the middle- and low-income families has become the core target of housing policy. Third, a social policy-oriented budgeting is taking shape in China. As we know, treasure is an important instrument in implementing public policy. To recognize the actual purposes and goals of policies, we can look into which items receive the most of investment from the government (Wang, 2004). Theoretically, public policy and public budget are the two key governing instruments used by any government in any society. To make sure of effective governance, these two instruments should be combined and coordinated. However, policy process and budget process always separate from each other. Such a phenomenon exists in both developed and developing countries (Ma and Hou, 2005). That means some policies will fail because of insufficient money. The separation of policy process and budget process is distinct in China, especially in the social policy areas, as the government has a strong economic growth orientation. This has resulted in symbolic policy implementation in some fields. For instance, the public rental housing scheme was introduced as one of the three major forms of housing provision in 1998 when the central government dismantled the in-kind welfare housing provision system and provided cash allowance instead. However, there had been no specific stipulation about the financial resource for carrying out the scheme. As a result, public rental housing scheme had been poorly implemented subject to local leaders’ preference. By the end of 2002, there were only about several thousand public rental flats available all over the country, which provided a shelter to only 7% of the target groups (Li and Sun, 2002). Fortunately, as the Chinese government began to shift its emphasis to social policy more public funding has been appropriated, which

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is a prerequisite for desired policy outcome. As shown in the work reports of the central government during the past five years, the Chinese government has started to integrate policymaking and budget-making process gradually. More and more social policies are accompanied by fiscal resources. As a result, the share of social policy expenditure in the total public expenditure and its ratio to GDP has increased (see Table 2.2). For instance, in the 2008 government work report, every social policy statement includes not only policy goals as usual but also the corresponding financing arrangements. Besides, the responsibilities of the central and local government were defined clearly in the report too. The central government began to take more fiscal responsibilities in funding social policies (see Table 2.3). All of the above show that a more reasonable social policy regime is taking shape in China.

5. DISCUSSION AND CONCLUSION As discussed above, along with the succession of new leadership of President Hu Jintao and Premier Wen Jiabao, a quite fundamental policy change has emerged in China with much emphasis attached to the social policy dimension. At least two reasons could be raised. First, when the leadership transition occurred, China was facing severe social economic problems and environmental degradation (Economy, 2004). Obviously, the succession of new leadership was a “policy window” for the urgent policy changes. To some extent, the generational change of leadership in China did matter in terms of policy orientation shift (Breslin, 2008). Second, new policy orientation is a strategy or tool for the new leadership to consolidate their authority and legitimacy. Due to the opaque nature of the politics and policymaking process in China, factional formation and conflict are considered very useful to explain leadership transition and policy change (Breslin, 2008). Following this thread of thought, the introduction of “scientific conception of development” and “harmonious society” is an instrument with which the new leadership sought to strengthen their authority and legitimacy or a cementing outcome of internal power struggle or

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Table 2.2.

The Share of Social Policy Spending in Overall Public Expenditure and GDP (2005–2006).

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Spending on social policy (billion)

Education

2005 2006

1031.23 1249.68

364.93 433.77

395.16 475.27

Health

Technological innovations

Cultural development

Ratio to total public expenditure (%)

Ratio to GDP (%)

102.70 131.19

99.16 126.04

69.29 83.45

30.59 31.08

5.63 5.96

Source: Calculated from the Report on the Central and Local Governments Budget Implementation Situation in 2005 and the Central and Local Governments Draft Budget in 2006 and the Report on the Central and Local Governments Budget Implementation Situation in 2006 and the Central and Local Governments Draft Budget in 2007.

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Employment and social security

In Search of Harmonious Society in China 89

Year

Total amount

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Kinglun Ngok and Yapeng Zhu Table 2.3. The Central Government Investment in Major Social Policy Areas (2005–2008) (in billion).

Education Health Social Security

2005

2006

2007

2008

38.44 7.08 162.36

53.60 13.80 201.00

107.64 66.43 230.32

156.18 83.16 276.16

Source: Reports on the Central and Local Governments Budget Implementation Situation and the Central and Local Governments Draft Budget, 2005–2008.

interest conflicts between factions, though there might be no much space for the new leadership to make innovation as a result of the deideologicization and increasingly diverse interests among elites (Breslin, 2008). Despite the ambitious goal of building up a “harmonious society”, which attempts to optimize the relation between economic growth and social development, the rural and urban, and “man” and the environment, the task is challenging. First, the quest for a harmonious society means a shift of central work or emphasis of the government work and function, which necessitates a restructuring and redistribution of power and interest of government departments. Failures of previous governmental reforms show that it is really a tough if not totally impossible job. Second, the expecting outcome of the new policy initiatives is preconditioned by a change of central–local relationship. Since the establishment of a harmonious society involves an array of social welfare provision and social development programs, it is indispensible to adjust financial relationship and clarify roles and functions in providing social services among various levels of governments and departments or within a certain layer of government. Third, many people benefit from the economy centered policy, including local governments, local officials, civil servants, entrepreneurs close to government departments, etc. They tend to resist or oppose the new policy initiative, which may harm either their interests or their prestige. Last but not the least, the seeking for a harmonious society, in essence, entails a new relationship of the state and the society, which means a commitment of the

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government to fulfill social citizenship, civil citizenship, and, to some extent, political citizenship in the long run and could only be achieved by a series of political reforms and political development. Explicitly, all of the above are extremely painful and risky for the regime. Hence, the new policy orientation that emphasizes social policy and integration of social development and economic growth marks a right direction of policy trends. However, whether it could be achieved is still a big question mark. It is noteworthy that the quest for building a “harmonious society” in the Chinese context has both similarities and difference with the promotion of social cohesion in the Western sense, although there has been an increasing confusion among researches especially on its definition (Friedkin, 2004). Scholars adopt a multidimensional/multi-indicator approach in the Western literature; for instance, Kearns and Forrest (2000) proposed that social cohesion has such constituent dimensions as common values and a civic culture; social order and social control; social solidarity, social networks, and social capital; and territorial belonging and identity. Applying this definition of social cohesion, we can roughly argue that the Chinese operation of building a harmonious society mainly confines its essence to reductions in income and wealth disparities and regional development gaps, without either touching profound value and culture dimension or promoting social networks and social capital. To some extent, the introduction of building a harmonious society is only a practical makeshift to tide the regime over all kinds of challenges resulting from the market transition and globalization, rather than alleviating the internal tension between the political regime and social development. In a conclusion, by formulating the ambitious goal of building up a socialist harmonious society, the new leadership demarcated themselves from their predecessors. On a whole, we can say that policymakers in China are on the right track struggling to alleviate different kinds of social problems, integrate social and economic development, and harmonize economic development and environmental protection. An array of social policies issued in recent years suggests that the Chinese government has both political inclination and financial

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capacity to provide more welfare and benefits to Chinese people. The era of social policy has come in China. Nevertheless, whether or not or to what extent the goal of building up a harmonious society could be achieved will be a big question mark. The new policy orientation involves a redistribution of functions and powers of governmental departments between various levels and within a specific layer. It also entails a fundamental change of relationship between the state and the society and reshuffling of interest among different social groups, sectors, as well as regions. Hence, the call for establishing a harmonious society might be a starting point for further political changes and development. It is also possible to be symbolic policy as what has happened in different policy domains. However, although the bright picture of a harmonious society committed by the government has been acclaimed by most citizens and thus has strengthened the legitimacy of the regime, it is a double-edged sword. If the government cannot materialize the policy, it might be risky. Hence, there is one thing for sure: either the government really strives to overcome impediments to realize it or the Chinese people would press it to do so. In either possibility, changes would be bound to happen. That is to say, building up a harmonious society can be a remedy for the government to tackle all kinds of problems and to sustain the regime; it may indicate a chance for further political development and thus makes China more democratic.

REFERENCES Breslin, S (2008). Do leaders matter? Chinese politics, leadership transition and the 17th Party Congress. Contemporary Politics, 14(2), 215–231. CCCCP (Central Committee of Chinese Communist Party) (2003). The Communiqué of the Third Plenary Session of the Sixteenth Central Committee of the Chinese Communist Party, 14 October 2003. CCCCP (Central Committee of Chinese Communist Party) (2006). The Resolutions of the CCP Central Committee on Major Issues Regarding the Building of a Harmonious Socialist Society, 11 October 2006.

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Cheng, J and KL Ngok (2004). The potential for civil unrest in China. In Searching for Peace in Asia Pacific, A Heijmans et al. (eds.), pp. 166–180. Boulder and London: Lynne Rienner Publishers, Inc. Eckholm, E (2001). Chinese warn of civil unrest across country. International Herald Tribune, 2 June 2001. Economy, E (2004). New China leadership faces major economic and political problems. Interviewed by Bernard Gwertzman. Retrieved in March on http://www.cfr.org/publication.html?id=7408 [27 September 2004]. Friedkin, NE (2004). Social cohesion. Annual Review of Sociology, 30, 409–425. Guo, WQ et al. (2004). Zainangzhong Xuexi: SARS weiji yingdui (Learning from Disasters: Coping with the SARS Crisis), CSSA Public Policy. Hu, AG et al. (2001). The regional disparity in economic and social development in China between 1978 to 2000. In Zhongguo Shehui Xingshi Fenxi Yu Yuce (Analysis and forecast of social conditions in China, 2002), X Ru et al. (eds.), pp. 167–184. Beijing: Social Science Documentation Publishing House. Hu, J (2005). Speech at the opening ceremony of fortune global forum in Beijing, 16 May 2005. Hu, J (2007). Hold high the great banner of socialism with Chinese characteristics and strive for new victories in building a moderately prosperous society in all. Report to the Seventeenth National Congress of the Communist Party of China, 15 October 2007. Kearns, A and R Forrest (2000). Social cohesion and multilevel urban governance. Urban Studies, 37, 995–1017. Li, B and YB Sun (2002). Social rental housing system not established in more than half major cities in China. China Construction, 7 August 2002. Li, LCL (2006). Embedded institutionalization: Sustaining the rural tax reform in China. Pacific Review, 19(1), 63–84. Liou, KT (2000). State-society relations in Post-Mao Chinese economic reforms: Changes and challenges. International Journal of Economic Development, 2(1), 1–17. Ma, J and YL Hou (2005). From budgetary process to policy process: A case study of two Chinese provinces. Comparative Economic and Social Systems, 20(5), 64–72.

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Ngok, KL (2007). Redefining development concept in China: Towards a new policy paradigm in the new century. China Public Policy Review, 1, 46–61. UNDP (2005). The National Human Development Reports for China. Retrieved on http://www.undp.org.cn/downloads/nhdr2005/ NHDR2005_complete.pdf. Wang, SG (2004). The changes accord with public opinion: Observing policy adjustment of Chinese government from the flow of financial fund. (Shunying Minxin de Bianhua: Cong Caizheng Zijin Liuxiang Kan Zhongguo Zhengfu Zhengce Tiaozheng), Zhanglue yu Guanli (Strategy and Management), 2, 51–60. Wang, SG (2008). Great transformation: Double movement of China since 1980s. Social Science in China, 1, 129–148. Wang, SG et al. (2002). The social crisis behind the economic prosperity (Jingji Fanrong Beihou de Shehui Weiji). Zhanglue yu Guanli (Strategy and Management), (3), 26–33. Wong, L and KL Ngok (2006). Social policy between plan and market: ‘Xiagang’ (off-duty employment) and the policy of the re-employment service centres in China. Social Policy and Administration, 40(2), 158–173. Yang, YY and XB Xin (2002). The current pattern of income distribution and its development trend in China. In Zhongguo Shehui Xingshi Fenxi Yu Yuce (Analysis and Forecast of Social Conditions in China, 2002), X Ru et al. (eds.), pp. 144–152. Beijing: Social Science Documentation Publishing House.

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Chapter

3 Social Cohesion in a Divided Society: Lessons from Taiwan’s Welfare Politics Yeun Wen Ku*

The importance of welfare provision in improving social inequality and therefore maintaining social cohesion has been widely addressed, while the politics in policymaking also remarkably influences the extent welfare can fulfill such function. Democratization in Taiwan did contribute significantly to its welfare expansion after the 1990s, but the Democratic Progressive Party (DPP) as the first democratic government was not able to realize its promise of a more equal and solidaristic society. The decline of public confidence in government not only induced the failure of the DPP in the 2008 presidential election but also raised the important issue of state failure in the establishment of institutional welfare system. Without trust from the people, statutory welfare will lose its root as a reliable source of security against risks along with human life, resulting in the limited effects of social integration and cohesion. Moreover, trust will be helpful to reduce the *Department of Social Work, National Taiwan University. 95

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Yeun Wen Ku complexity of a globalizing and fractionalized world, and good governance is more likely to be secured if trust can be fostered and maintained. This also explains the possibility of social cohesion in an unequal and divided society. Even in the most social democratic welfare state, some kinds of inequality are still there. The lesson of Taiwanese welfare politics to any democratic government is that how to acquire public confidence through consistency between social policy and public expectation should be the first priority and this is particularly important to social cohesion in a divided society.

1. INTRODUCTION Welfare provision has ever been regarded as an important way to remedy negative impacts of inequality induced by market mechanism, by which an even closer solidarity can be realized. Such argument underpins the necessity of state intervention into welfare with many social policy instruments ranging from means-tested to contributory/noncontributory benefits. However, politics in policy process will deeply influence the direction of social policy and the extent it can be implemented, and, especially, all of these will also in turn change the real function of welfare as solidarity. The decade of the 1990s witnessed a remarkable development of statutory welfare system in Taiwan, including the realization of the national health insurance (NHI), unemployment insurance, allowances for elderly people, special protection for children and women against violence, and a lot of policy debates on national pension insurance scheme (NPI) that was finally enforced in 2008. Obviously the state played a very significant role in promoting such development, but this was not a process without conflicts. The lesson from the so-called “Welfare State in Crisis” and the ideology of economic growth first have contributed to reluctant attitudes of state welfare. However, democratization, and especially the ever intensive power competition between the two major political parties, namely the Kuomintang (KMT) and the Democratic Progressive Party (DPP), was the real force behind the welfare development throughout the 1990s.

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This chapter is going to review the Taiwan’s welfare politics after the year 2000, when Chen Shui-bian and the DPP took the presidency with a strong image of social welfare reform. The growing divided society has been accompanying with the DPP government until its final failure in 2008. This provides us a very interesting case to examine the possibility of welfare and its related policy instruments against divided impacts of economic polarization and political identity or, more specifically, welfare politics under the DPP government.

2. THE IMPLICATIONS OF DEMOCRATIZATION FOR WELFARE Even with the hostility toward state welfare, some welfare schemes have been expanded, some remarkably, in East Asia. Midgley (1986) sees the explanation in the incrementalist style of social policymaking, but, more specifically, it is due to declining state legitimacy in the wake of democratization. This explanation is particularly important as we examine welfare expansion in Taiwan (see for example, Ku, 1995) and Korea (see example, Kwon, 1999) over the 1990s. Tang (2000, p. 60) also concludes, “The experiences of Korea and Taiwan have shown that democratization could be a crucial factor which influences social welfare development”. Furthermore, Gough extends this explanation to newly welfare states in Southeast Asia, saying: Democracy is belatedly emerging in East Asia, at least in the form of opposition parties and contested elections. Korea and Taiwan both witnessed democratic contestation in 1987; the result was a significant shift towards state responsibility in social welfare in the 1990s. It is not too optimistic to expect similar transformations in Southeast Asia.

Generally, there are two implications of democratization for welfare. First, (Gough, 2004, p. 207) differing from authoritarian regimes, pluralistic policymaking will be the normal pattern in democratic politics that advocates with their different, and even conflicting, policies are able to confront and debate with one another in an open political setting. In his study of health policy in Taiwan and Korea,

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Wong provides a good example, concentrating his analysis on the impact of democratic change on social policymaking. It means a dynamic and continuing process of democratization that has changed all important elements of policymaking in respect to agenda setting, interests and ideas formation, actors and networks involved, as well as the specific opportunities for policy change (Wong, 2004). Second, democratization also alters the vertical and top-down relationship between the state and the people by endowing the people with more power and rights against the dominance of the state and its agents. Duration and election are both important and connected mechanisms for governments and policymakers to make their accountability good to the people. Persuading and discussing processes through direct and indirect networks come to be heavily relied on by governments and policymakers for maximizing their accountability in democratic politics. Welfare expansion is therefore underway for the sake of state legitimacy. In contrasting to liberalist explanations of economic development in terms of relying on market mechanism, the developmentalist strategy in East Asia focuses much on the role of the state in leading to economic development. This theme requires good policy intervention for overcoming certain major constraints inherent in the domestic structure and international environment (White and Wade, 1988, p. 2), which is not likely the only explanation behind East Asian development under democratization. In most recent studies, more elements have been generally identified, including educational level, physical infrastructure, corporate governance, competition and economic openness, political stability, and flexible labor market. There are also other elements that might be better defined as social capital in particular, such as interpersonal trust, social cohesion, association, and cooperation (Mkandawire, 2004, p. 9). The importance of trust is especially noted by some scholars. For example, in his study of economic success in America, Germany, and Japan, Fukuyama (1995) shows the success to be predicated on reservoirs of social trust which, in turn, depend on some kinds of associational infrastructure. Because of its important impact on the formation of trust and trustcreating social conditions, social policy is no longer regarded as pure

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consumption by developmentalist scholars. As Kwon (2005, p. 5) argues, for example, “economic development requires social policy”. However, we should also note that democratization does not guarantee any good result. Rather, it opens opportunities for policymakers, stakeholders, and people to rethink the welfare they would like to have and the way to provide it. Immergut (1992, p. 239) emphasizes it strongly, saying “Political institutions do not predetermine any specific policy outcome; rather, they construct a strategic context in which political actors make their choices”. Then, how can such context be created? It is not simply a policy issue but depends on some kinds of collective awareness of social cohesion under democratic politics. It depends essentially on relationship of trust between the government and people that will be examined with the coming of political elections. The existing policy can be overruled and therefore a shift of welfare regime will be possible. For this reason, the importance of democratization is its offering a possibility for policy change particularly whenever needed.

3. TRUST AND GOVERNANCE IN SOCIAL POLICY In a democratic and plural society involving so many cultures, ideas, interests, actors, and networks, locally as well as globally, how to maintain and further promote social cohesion is now an issue preoccupying contemporary governments and thinkers. Trust as a key element in social cohesion has been addressed by many scholars, though the themes are not all the same. For example, Giddens, the founding father of the third-way theme, has long emphasized the importance of trust in the fractional post-modern society, arguing that trust is necessary to a solidaristic society in which interdependence and reciprocity together contribute to people’s sense of community and security (Giddens, 1998a). Beyond the old left, the third-way theme aims to provide a new bridge between equality and meritocracy. As a key element of socialist thought, equality has long been accused of reducing people’s competitive drive and motivation. In an ideal society of the new right, the distribution of income, wealth, and opportunity is

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according to individual talents and efforts and it should never be equal. This constitutes the difficulty for Giddens to work out a new approach between left and right. Blair (1998, p. 3) has argued that “Talent and efforts should be encouraged to flourish in all quarters, and governments must act decisively to end discrimination and prejudice”. Giddens (1998b) has taken a more positive view of meritocracy, which he avoided in his previous work. He claims, “a meritocratic approach to equality is inevitable … we should want a society that is more egalitarian than it is today, but which is meritocratic and pluralistic …” (Giddens, 2002, p. 38). Giddens’ own answer to the possible resulting problems lies in trust in the fairness of the social order. This enables people to feel more secure, believing that there is not always a downward course in their life. Without trust in the fairness of the system and a sense of underlying security, meritocracy will create a state of relative deprivation in which no one will really feel satisfied, no matter how open the society or how equal the outcomes. On the other hand, trust is also addressed because of its close link with governance. Trust, as an aspect of good governance, owns the function to remedy the inevitable limitations of formal institutional arrangement. Although healthy financial balances, an efficient and honest civil service, and properly contested elections are often identified by international organizations as the key pillars of good governance, we should not overlook some more informal factors behind the process through which individuals and officials may interact to express their interests, exercise their rights and obligations, work out their differences, and cooperate to produce public goods and services. Even certain clientelistic measures, usually thought of as negative and destructive, may have hidden positive functions, such as giving poor people access to resources (Brinkerhoff and Goldsmith, 2005). The distinction to make between good or bad governance is whether real democratic principles, such as transparency, pluralism, citizen involvement in decision making, representation, and accountability, can be widely accepted and implemented, so the voices of the poorest and the most vulnerable are heard and understood. Giddens (1990, pp. 148–149) thus develops the concept of “active trust” to mean

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“on a personal level, decisions must be taken and policies forged … No one can be completely outside”. Trust will be helpful to reduce the complexity of a globalizing and fractionalized world, and good governance is more likely to be secured if trust can be fostered and maintained. This also explains the possibility of social cohesion in an unequal and divided society. Even in the most social democratic welfare state, some kinds of inequality are still there. The distinction between universal and selective welfare policies is the degree of universal coverage, rather than the total equal distribution of real resources. Rothstein (1998, p. 19) interprets it further, “This means, simplifying somewhat, that benefits and services are intended to cover the entire population throughout the different stages of life, and on the basis of uniform rules”. Similarly, income equality is never the only reason for social cohesion, as addressed by Marshall in his classic work on citizenship and welfare: The extension of the social services is not primarily a means of equalizing incomes … What matters is that there is a general enrichment of the concrete substance of civilized life, a general reduction of risk and insecurity, an equalization between the more and the less fortunate at all levels — between the healthy and the sick, the employed and the unemployed, the old and the active, the bachelor and the father of a large family … Equality of status is more important than equality of income (Marshall, 1992, p. 33).

The statement clearly demonstrates the human as social being in an institutional context. There could be some kinds of inequality, but these can be acceptable to people with no harm to social cohesion. The crucial factor is actually subjective one, especially the people’s trust in the institutional arrangement by which life risks can be pooled and security can be confirmed. A further question emerges. How could people trust in the institutional arrangement, accept inequalities for here and now but also make sure such inequalities not always doing so? It is actually a political problem, as Esping-Andersen (1996, pp. 264–265) argues. The state as the biggest source of public authority should acquire people’s trust in its policy that heavily relies

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on its capacity in governing the modern world where is getting to higher degrees of fraction, isolation, complexity, uncertainty, and risk, which challenges and shakes our existing primary interpersonal contacts and relationships. Moreover, market is not likely a good mechanism to promote trust because of itself as the source, if not only, of risk and uncertainty. In his study of trust in pension policy, Ring (2005, p. 69) has discovered the destructive effects as government is reluctant to play the role of securing financial market stability and leaving the people alone to take all the risks with an uncertain pension future. Furthermore, Ring calls for governmental policies and actions attempting to restore trust in the structures of private pension provision and even to involve a greater role for government as provider. Trust is even more important during restructuring of existing welfare provision when people’s benefits and well-being are firstly hit and this, in turn, could result in a considerably damaged trust-based public order. Governments must acquire trust from people as policies will be put forward for implementation, and eventually their accountability will be under the examination of the people. This is precisely the story of the first democratic government in Taiwan, suffering a radical decline of public confidence.

4. A DIVIDED SOCIETY The importance of trust in social policy has been explored in the previous section. Rudolph and Evens put it forward: Political trust, a global affective orientation toward government, has long been thought to reflect citizen’s policy satisfaction. Trust is higher when policies are viewed as effective or when there is perceived congruence between citizens’ expectations and policy outputs (Rudolph and Evens, 2005, p. 661).

While the welfare development under democratic Taiwan is ever so much better than before, whether it can effectively satisfy people’s expectations remains as a doubt over the governmental legitimacy and, particularly, this will be examined with every coming of elections. The year 2000 was a historic watershed for Taiwanese politics.

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For the first time, the authoritarian ruling party, the KMT, lost its power in the presidential election and was replaced by the young opposition party, the DPP. As the strongest opposition party in the 1990s, the DPP was well known not only for its political argument for Taiwanese independence but also for its pro-welfare ideology, in contrast to the KMT’s mainlanders’ identity and economy-first policy. This was significantly demonstrated in the DPP’s white paper on social welfare in 1993, which proposed a wonderland of social democratic welfare state. For instance, in the midst of the year 2000, the pro-welfare image of the DPP was helpful to its presidential campaign, with Chen Shiu-bian’s statement arguing for the following welfare policies: (1) NT$3,000 welfare allowance per month for elderly people who were not receiving a pension; (2) free medical care for children under three years old; and (3) low-cost mortgage with a 3% interest rate for young first-time house buyers (Ku, 2003, p. 187). The dominance of the DPP from 2000 to 2008 signified a new era of Taiwanese democratization and raised expectations for social reform; however, there was not a happy ending to this story. The following indicators demonstrated social situations were worse than expectations. We can learn the general economic situation from Fig. 3.1, showing the changes of unemployment from 1991 to 2006. In the 1990s when the KMT still dominated, unemployment was increasing but kept below 3%. There was a radical jump of unemployment as the DPP took over the government, increasing to 5% and never coming back to the level in the 1990s. Similarly, the average weeks of unemployment noted the increasing difficulty of looking for a new job. In 2006, even though improving from 2003, the average time for an unemployed worker moving to another job was about 25 weeks, while it was only 15 weeks in 1991. The reason behind unemployment is another issue we can examine from Fig. 3.2. In 1991, the main reason of unemployment was dissatisfied working condition, so that workers would like to resign from their former jobs and look for new opportunities. The reason of lay-off was existing but below 20% of the unemployed. The gap between these two reasons was shrinking until 2001, when the first

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104 Yeun Wen Ku Unemployment rate (%)

Average weeks of unemployment (weeks)

6

35.00 30.00

5

25.00 4 20.00 3 15.00 2 10.00 1

5.00

0

0.00 1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.: http://www.dgbas.gov.tw/.

Fig. 3.1. Unemployment rate and average weeks of unemployment, 1991–2006.

Lay-off (%)

Dissatisfied work arrangement (%)

1996

1998

60

50

40

30

20

10 0 1991

1992

1993

1994

1995

1997

1999

2000

2001

2002

2003

2004

2005

2006

Source: Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.: http://www.dgbas.gov.tw/.

Fig. 3.2. Reasons of unemployment in Taiwan.

time the reason of lay-off was significantly overtaking dissatisfied working condition with nearly 30%. Since then, lay-off was the main reason of unemployment until 2005 that signified the important impact induced by the migrant movement of businesses at the global

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level, especially a lot of Taiwanese enterprises were moving to China where was legally prohibited from the DPP government. On the other hand, social inequality, in terms of income gap, was getting worse too. The income gap between top 20% and bottom 20% households has been increasing from five times in 1991 to over six times during the first half decade of 2000s. The most radical jump happened in just one year between 2000 and 2001, from 5.6 to 6.4 times, showing that the DPP’s welfare efforts and promises for social reform did not really enforce. We can examine this issue with public transfers as percentage of personal income. In the first decade of the 1990s, public transfers were kept lower because of the KMT’s economy-first policy orientation, with just around 1% of personal income. The figure was increasing, along with political competition from the DPP, to about 3% by the end of 1990s. The most significant example about this situation was the competition between the pension policies of the KMT and the DPP in 1993. In order to win the local election in that year, the DPP announced a universal pension system on 2 October, in which citizens who were 65 years old and beyond would receive NT$5,000 every month. The KMT fiercely criticized such a policy as a collective bribe to the elderly voters, but it pressed ahead to launch some measures for elderly people. On 2 October, the Ministry of Interior Affairs said that a policy draft on a national pension system would be published in November and on 6 October, the allowance for low-income elderly people was increased from NT$3,000 to NT$5,000 per month. On 7 October, the DPP announced a further pension scheme specific to farmers, leading to President Lee Teng-hui, who was also the leader of the KMT, asking the Executive Yuan to enact the same scheme as soon as possible. The cabinet meeting on 21 October announced the allowance for lowincome elderly people would increase further to NT$6,000 per month and an extra NT$3,000 for middle- to low-income elderly people. The DPP held a public hearing for its pension policy on 22 October, while the Ministry of Interior affairs also published its policy draft on a national pension system (Ku, 1997, pp. 247–248). All of these benefit increases happened just in one month. However, public transfers did slightly increase during the DPP’s dominance,

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106 Yeun Wen Ku Ratio of disposable income of highest 20% to that of lowest 20%

Transfers from government as % of personal income

Ratio of average savings of highest 20% to that of lowest 20%

7.0 6.2

6.0 5.2 5.0

500.0

428.2 6.4

5.4

5.4

5.3

5.4

5.4

5.5

5.5

6.1

5.6

6.0

6.0

6

353.7

450.0 400.0

5.0

350.0 300.0

4.0 3.6 3.0

3.1

2.9 2.6

2.3

2.7

3.2 2.9

3.6

3.6

3.2

2.8

250.0 200.0 150.0

2.0 1.2 1.0

100.0

1.1

18.3

21.7

0.8 29.2

1991

1992

1993

0.8

45.1 23.8

23.8

1994

1995

44.4

32.9

30.2

25.1

1997

1998

1999

50.0 0.0

0.0 1996

2000

2001

2002

2003

2004

2005

2006

Source: Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.: http://www.dgbas.gov.tw/.

Fig. 3.3.

Changes of income and saving between top and bottom households.

while such efforts were not enough to improve income gap. Though not complete, the data in Fig. 3.3 also reveals the amazing gap between average saving of top and bottom households. The harsher social conditions stimulated further instability in Taiwan. Figure 3.4 demonstrates the increase of crime cases per 100,000 people on the one hand, and the decline of clearance rate on the other hand. Once again, we learned the worse situation in the 2000s, implying that the DPP government was not able to maintain social order for public safety. As long as the worsening conditions at every aspect of unemployment, inequality, and insecurity, a social feeling of unhappiness and dissatisfaction has occupied the period of DPP’s dominance that completely and ironically contrasted with its political slogans of happiness and well-being in the 2000 presidential campaign. Responding to such social atmosphere, the number of people committing suicide increased significantly. Figure 3.5 reveals the comparison between suicide and general death rate in Taiwan. We can find the sharp growth of suicide cases particularly after the year of

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Social Cohesion in a Divided Society 107 Crime cases per 100,000

Clearance rate (%) 80.0

3000.0

70.0 2500.0 60.0 2000.0

50.0 40.0

1500.0

30.0 1000.0 20.0 500.0

10.0

0.0

0.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.: http://www.dgbas.gov.tw/.

Fig. 3.4. Crime cases and its clearance rate.

140.0

% 120.0 116.5 119.3 100.0 80.0 77.6 60.0

63.7

67.6 Total

52.8

Suicide

40.0 38.7 30.1 27.6 30.5

20.0 0.0 0.0 -20.0

3.2

2.6

4.2

8.6 1.7

13.6 10.1 8.1

9.4

11.2 9.9

15.6 11.0 10.7 12.7

19.7

15.9

-6.8 -6.8 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 -13.9

-40.0

Year

Source: Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.: http://www.dgbas.gov.tw/.

Fig. 3.5. Comparison between suicide and general death rate per 100,000 population (1991 as base line).

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108 Yeun Wen Ku

2000, in contrast to general death rate that remained stable during the same period. Summing up the above indicators, the society was divided with the following aspects: • •

•

• •

Polarization was emerging between the employed and the unemployed, due to the change of labor market. Workers in the industries moving outwards were suffering more than those in the industries for local market, due to global division of labor. Income inequality was growing between well-off and worse-off households, due to combined effects of labor market change and welfare failure. Social disorder and distrust among people were worsening, due to security seriously threatened by the increase in criminal cases. The increasing suicide cases witnessed of anomie and alienation from social context, due to more and more people falling into an uncertain and powerless situation.

In short, the dream for social reform soon turned into a nightmare. The DPP’s excuses to its failure did not acquire people’s trust; on the contrary, it divided the society into two conflicting fundamentalist positions even deeper and dangerous to social cohesion in Taiwan. We will look into this issue in the next section.

5. DPP’S DISCOURSE ON ITS FAILURE Although the government change in 2000 ended the authoritarian one-party regime since World War II and therefore consolidated democratization with two-party competition in Taiwan, social situation did not get improvement with this remarkable political transition. The political opposition movement, the origin of the DPP, can be traced back to the early stage of the KMT ruling when Taiwan was transferred from a Japanese colony to a province of China in 1945. Governor Chen Yi, appointed by the President Chiang Kai-shek, and his subordinates perceived that the Taiwanese had been tainted

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for 50 years by what they considered inferior Japanese culture. They, therefore, did not give the Taiwanese proper respect. Meanwhile, communication was a serious problem because few Taiwanese people spoke Mandarin and few of the KMT officials and soldiers spoke Taiwanese. Few of the Taiwanese elites were appointed by Chen Yi to join the government except those who had been members of the KMT on the mainland during wartime. Dissatisfaction grew among the Taiwanese people because they had hardly any voice in the political decision-making process and found the rule of the KMT no better than that of its predecessor. Furthermore, in order to support the civil war in the mainland, the KMT did its best to extract resources from Taiwan. This caused food shortages and critical inflation. The ill feeling between the Taiwanese people and the KMT came to a head on 28 February 1947, when plain-clothes police officers killed a Taiwanese woman who had been selling black-market cigarettes to make a living. A mob formed, and the police fired into the crowd, killing four people. Widespread rebellion erupted — an event that is now known as the 2-28 Incident symbolizing the 28th day of the second month of 1947 (Copper, 1990, p. 27). Chen Yi regarded the protest as a pro-Communist rebellion. Martial law was enforced and over 20,000 KMT troops were sent to Taiwan to repress the rebellion. Those who were killed or arrested included students, professors, lawyers, and local politicians, actually consisted of the Taiwanese social elites (Chuang, 1991, pp. 151–154). For this reason, the 2-28 Incident has also been interpreted as a planned political operation to eradicate possible opposition. Since then, a deep divide has been drawn between mainlanders and Taiwanese. Moreover, hostility toward China was further enhanced in the era of Cold War that gave the opposition movement another reason to argue for Taiwan’s independence from China. The conflicting identity of China and Taiwan constituted the most important, but also the most unstable, part of Taiwanese politics that was even more critical after democratization. The KMT and the DPP were regarded as the pro-China and the pro-Taiwan parties respectively that made some ambitious politicians able to operate and expand their political interests. This is the precise way for President Chen Shui-bian to

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excuse his disability to deliver promised social reform, for which we can clearly learn his intentions from the DPP government’s policy statement entitled “Challenge 2008: National Development Plan (2002–2007)”. In the statement, the DPP recognized three major challenges, saying: 1. Global Competition: a growing intensive global competition for talent and capital that has significantly changed core production elements to quality, creation, and speed, implying a more flexible production and more investments on knowledge. 2. Mainland China’s Magnetic Effect: China as an even stronger competitor with cheap labor and land, and vast market that has attracted a lot of Taiwanese businesses and, in turn, made impact on increasing unemployment in Taiwan. 3. Historical Burden: such as social problems left over from the period of authoritarian regime and democratic transition (e.g. black gold politics), rigid administrative and legal systems, and long accumulation of bad debts and financial burdens (CEPD, 2002). In short, the DPP blamed China and the KMT for its own failure. Interestingly, Taiwan has accumulated a lot of trade surplus from China, increasing remarkably from US$7 billion in 1991 to US$22 billion in 2002. However, during the same period, government statistics showed that Taiwanese businesses have invested over US$24 billion in China, occupying about 70% of the total outward foreign direct investment (FDI) in Taiwan, while the inflow of FDI in Taiwan was only US$17 billion. A tricky picture emerged. Taiwan had to rely on China’s market for profits, but China is also regarded as the major competitor for Taiwanese private investments, as well as other foreign capital (Ku, 2004). However, a survey at the same year revealed a very interesting result, as indicated in Fig. 3.6. As the question asked the reason for Taiwan’s going-down, most respondents blamed the DPP’s poor

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Social Cohesion in a Divided Society 111 80.0 70.0 60.0

66.7 55.0

53.3

50.0

42.5

40.0 30.0 20.0 6.7

10.0 0.0

Poor government Competition from performance China

Political uncertainty

World recession

Others

Source: Global Views Magazine (in Chinese), October 2002. http://www.gum.com.

Fig. 3.6. Why Taiwan is going down? (multiple choices).

performance, occupying 66.7%, and the uncertainty caused by its policy, occupying 53.3%. The external factors of competition from China and world recession were indeed there, but these could not explain all the reasons. In other words, the respondents held the DPP for full responsibility because it was not able to propose consistent policy, effectively mobilize public resources, and empower Taiwanese political economy with good governance. President Chen Shui-bian and his party were caught in the heart of political storm. To restore legitimacy, blaming China and the KMT was becoming the DDP’s strategy in every election, locally and nationally, that pacified the fundamentalist for Taiwan’s independence and therefore secured its supporters. However, such strategy further angered China and the opposite fundamentalist for unification. In the following years, ideological disputes were full of Taiwan’s politics, and policy for social reform was left behind, explaining the disappointing social indicators under the DPP’s dominance. Moreover, social cohesion was torn apart into two opposite camps not only between the unemployed and the employed, the well-off and the worse-off, and the employers and the employees but also between mainlanders and

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Taiwanese, and different political ideologies. It was not surprising at all for that public confidence in the government was almost collapsing with such political chaos.

6. COLLAPSE OF PUBLIC CONFIDENCE IN THE GOVERNMENT In East Asia, a lot of concepts, such as “governing market” (Wade, 1990), “disciplined market” (Amsden, 1989), and “guided market” (White and Wade, 1988), have been widely used to refer to the relationship between the state and the market. However, as we discussed in the first section, democratization has changed the stateled and top-down process of policymaking and required more open participation of various stakeholders such as interest groups and parties. The legitimacy of a democratic government, therefore, is based not only on its capacity of policy implementation but also on public confidence of executing just policy accountable to citizens. For instance, in an OECD Ministerial Meeting on 28 November 2005, Netherlandish Chairman Alexander Pechtold spoke in the opening remarks: … there can be no higher priority for any democratic government than maintaining the trust of its citizens … . This is especially important in today’s globalized world where effective and efficient public governance is more important than ever in order to ensure economic and social development. Quoted in Ku, 2009, p. 140

Taiwan under the DPP’s dominance was facing the crisis of people’s distrust. A social trust survey in 2002 asked people who they trusted and distrusted most. The top three rankings of trust were families, primary school teachers, and physicians, while the top three distrust rankings were legislators, government officials, and commercial advertisements. Ironically, President Chen Shui-bian ranked eleventh, even lower than fortune tellers, who ranked eighth. Such situation did not get any improvement in the following years. For

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example, the Political Confidence Index published by the Global Views Survey Research Center, a private think-tank of famous journalism, showed that in 2007, one year before the presidential election, President Chen Shui-bian and the DPP remained at the lowest level of public confidence, around 35 (in 100 scores) as compared to the KMT’s presidential candidate Ma Ying-jeou, whose was about 54. Also, the United Daily News, an elitist national newspaper, criticized President Chen Shui-bian’s undependable policy style and changeable discourse that made him even deeper into the crisis of public confidence were not only in his words but also in his ability and qualification as the president to lead the country. As long as the decline of public confidence in the president, the DPP government was suffering too. Distrust in the public authority has become the general social atmosphere. We can find, from the result of social trust survey in 2002, that the public sector (e.g. legislators and government officials) ranked the number one the people did not trust, while the informal sector (e.g. families, school teachers, and physicians) ranked highest the people did trust. There were two important implications. First, in the bad sense, the decline of public confidence in the government will retard people’s willingness to be royal taxpayers and they would like to keep money in their own pockets as much as possible. This will eventually damage financial feasibility of statutory welfare systems because active participants, no matter who are insurance premium contributors or general taxpayers, are fundamentally important. Social cohesion will be accordingly declining if these statutory welfare systems cannot fulfill their functions of remedying social inequality and therefore the society could be divided even further. Figure 3.7 demonstrates the interesting changes of public confidence in the government between 1992 and 2004. In the four questions regarding government’s functions, people’s distrust increased significantly. This picture was radically contrasted to the traditional image of developmental states in East Asia, characterized with effective and efficient state intervention in economic and social development. Chen (2006) concluded his important findings about the situation, arguing that, as for factors affecting levels of political trust, aside from

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114 Yeun Wen Ku Welfare is not the first priority of the government

Waste the taxes ,

Government does not do the right things

Officers public talk is not believable

80 69

68

70 65 60

65

57

69

60 55

% 50

55

49 46

42

39

43

40

36 33

38

30 24 20

29

21

10

0 1992

1995

1998

2001

2004

Source: Chen (2006), see Table 1.

Fig. 3.7.

Public confidence in the government, 1992–2004.

ethnic backgrounds and the political generations to which people belong, both people’s feelings toward the ruling party and retrospective evaluations of the economy affected their level of political trust significantly. As for major variables determining voters’ choices in the 2004 legislative elections, political trust, partisan preference, Taiwanese identity, and the approval rate of President Chen’s performance over the past four years played major roles in influencing voters’ choices. Second, however, in the good sense, the willingness of people’s supporting each other through personal contexts did not suffer the same decline of public confidence in the government. Figure 3.8 shows that the number of people who would like to join voluntary services increased significantly. More importantly, even though in the period after 2004 when President Chen Shui-bian and the DPP were in deep trust crisis, the volunteers increased a lot, implying that traditional social supporting networks were still functioning well and this somehow maintained social cohesion, without it collapsing too much.

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Social Cohesion in a Divided Society 115 As % of population

Average hoursofvolunteer per week 2.5

0.5 0.45 2.2

0.4

0.4 2.0

0.35

1.9

1.9

1.7

0.3 0.25

0.3

1.8

0.3

0.2 0.2

0.2

1.6

1.6 0.3

0.3 1.6

1.6 1.5

0.3 1

0.2

0.2 0.15

1.7

2

0.2 0.5

0.1 0.05

0

0 0.0 1991

1992

0.0 1993

0.0 1994

0.0 1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: Taiwan’s Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.: http://www.dgbas.gov.tw/.

Fig. 3.8.

Persons of social welfare volunteer services, 1991–2006.

The combined picture of declining public confidence in the government and rising social supporting networks raises a very interesting issue concerning with the nature of East Asian welfare regimes. The informal sector has long been regarded as an important pillar of welfare provision in East Asian societies and this explained why the East Asian welfare states have been described variously as family-centered, reluctant, traditional-charity, and authoritarian; all implying the marginal role of the state in the actual provision of welfare (Ku and Jones, 2007). The most significant characteristic is derived from the cultural context, in particular from Confucianism. This is not a new explanation; indeed it may be traced back to the 1980s when East Asian welfare studies was in its infancy. Nelson Chow (1987), a Hong Kong social policy scholar, equates the most significant difference between Western and Chinese ideas of social welfare to the importance of family and kin networks in Chinese society. Similarly, Jones (1990) rests her concept of the Oikonomic welfare state on its roots in Confucianism, with the family household (Oikos) as the key unit and ideal model for how society as a whole should be conducted; wherein filial piety ensures due deference upwards and patriarchal responsibility ensures due care and protection

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downwards. Cultural explanations have continued to inspire efforts at East Asian welfare studies right up to the present (see Rieger and Leibfried, 2003). After a protracted discussion of East Asia as a challenge for comparative welfare state research, Rieger and Leibfried insist that: when we look at the substance of social policy, the difference is … that in the East Asian societies all the positions reflect a Confucian agenda, in the same way as in the West all the positions reflect an agenda informed by Judaeo-Christian values. Rieger and Leibfried, 2003, p. 334

Even so, the declining capacity of Confucian familialism to support its members has been recognized, so that state intervention expanded significantly into the traditional domain of the family with the establishment of statutory welfare systems. Ironically, the collapse of public confidence reminded us the possibility of state failure and brought back the importance of informal sector, especially in the case of Taiwan. Should we and can we rely on the government as major source of welfare? The answer will eventually determine the possibility of Taiwanese welfare state, or more precisely, the real welfare mixes in Taiwan.

7. CONCLUSION: LESSONS FROM TAIWANESE WELFARE POLITICS This chapter has examined the failure of the DDP’s welfare politics that brought about deconstructive impact on social cohesion in Taiwan. Therefore, it was not surprising at all for the result of the 2008 presidential election, bringing the KMT back to power with a 58.45% vote majority versus the DPP’s 41.55%. But it does not mean the return of public confidence in the new government. On the contrary, people will look into the consistence between policy performance and public expectation even more rigorously and their trust or distrust will in turn decide the next voting for or against this new government.

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What kinds of lessons can we learn from Taiwanese welfare politics? First, policymaking in a democratic government requires more coordination, partnership, civil participation, and network development in a more fractionalized and plural world. Trust is noted in many theoretical discussions as an important and necessary element in determining a just society, good governance, and real democracy. Although there is always a tension between limited resources and welfare provision, a just social policy can promote social integration and cohesion by remedying inequality and deprivation. To achieve this task, the government must assure the people of the accountability of consistency between policy efforts and public expectations; otherwise distrust will be growing with political excuses, which will critically damage its legitimacy and the success of policy implementation. Second, the rise of the DPP with the expectation for social reform in 2000 and its final failure with the great pressure of dissatisfaction in 2008 clearly raises the lesson of possibility of state failure. The government has become the biggest source of citizen’s distrust, implying a deep crisis of public confidence not only in politicians’ words but also in statutory welfare as reliable source of security. This situation could retard the efforts toward institutional welfare systems, resulting in the limited effects of social integration and cohesion. Third, the growth of volunteers demonstrates the importance of informal sector as one pillar of welfare provision that has been traditionally addressed in East Asian societies. It is helpful to maintain fundamental social cohesion through individual networks, implying the importance of society’s self-stabilizing mechanism, particularly in the period when public authority has gone. However, we also note that, without collective efforts and resources, it is difficult to realize a wider range of social reforms for a more equal society. Finally, and most importantly, how to acquire citizen’s trust should be the top priority of social cohesion for any democratic government. It may be true that we cannot directly regulate and intervene in the formation of trust by public means but trust can be motivated and encouraged, or discouraged. The participation of voluntary associations has long been regarded as an important factor to foster trust in society and this, in turn, will better enable society to

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create and maintain a real democracy, with the special reference to social capital perspective. The increase of civil participation in Taiwan has been addressed and we can examine it further in the future, to see how it affects general social trust.

REFERENCES Amsden, A (1989). Asia’s Next Giant: South Korea and Late Industrialization. New York: Oxford University Press. Blair, T (1998). The Third Way: New Politics for the New Century. London: Fabian Society. Brinkerhoff, DW and AA Goldsmith (2005). Institutional dualism and international development: A revisionist interpretation of good governance. Administration and Society, 37(2), 199–224. CEPD (Council for Economic Planning and Development) (2002). Challenge 2008: National Development Plan (2002–2007), Taipei (in Chinese). Chen, LH (2006). Political consequences of political trust: The case of 2004 legislative elections in Taiwan. Taiwan Democracy Quarterly, 3(2), 39–62 (in Chinese). Chow, NWS (1987). Western and Chinese ideas of social welfare. International Social Work, 30(1), 31–41. Chuang, CN (1991). An Angry Taiwan. Taipei: Chien-wi (in Chinese). Copper, JF (1990). Taiwan: Nation-State or Province? Boulder, Colorado: Westview. Esping-Andersen, G (1996). Positive-sum solutions in a world of trade-offs. In Welfare States in Transition: National Adaptations in Global Economies, G Esping-Andersen (ed.), pp. 256–267. London: Sage. Fukuyama, F (1995). Trust: The Social Virtues and the Creation of Prosperity. London: Hamish Hamilton. Giddens, A (1990). The Consequences of Modernity. Cambridge: Polity. Giddens, A (1998a). Post-traditional civil society and the radical center. New Perspectives Quarterly, 15(2), 14–20. Giddens, A (1998b). The Third Way: The Renewal of Social Democracy. Cambridge: Polity.

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Giddens, A (2002). Where Now for New Labour? Cambridge: Polity. Gough, I (2004). East Asia: The limits of productivist regimes. In Insecurity and Welfare Regimes in Asia, Africa and Latin America: Social Policy in Development Contexts, I Gough and G Wood (eds.), pp. 169–201. Cambridge: Cambridge University Press. Immergut, EM (1992). Health Politics: Interests and Institutions in Western Europe. Cambridge: Cambridge University Press. Jones, C (1990). Hong Kong, Singapore, South Korea and Taiwan: Oikonomic welfare states. Government and Opposition, 25(3), 446–462. Ku, YW (1995). The development of state welfare in the Asian NICs with special reference to Taiwan. Social Policy and Administration, 29(4), 345–364. Ku, YW (1997). Welfare Capitalism in Taiwan: State, Economy and Social Policy. Basingstoke: Macmillan. Ku, YW (2003). Welfare reform in Taiwan: The Asian financial turbulence and its political implication. In The Welfare State in Emerging-Market Economies, C Aspalter (ed.), pp. 171–192. Hong Kong: Casa Verde. Ku, YW (2004). Is there a way out? Global competition and social reform in Taiwan. Social Policy and Society, 3(3), 311–320. Ku, YW (2009). Comparative welfare policy instruments in East Asia: Embedding trust in policy. In Changing Governance and Public Policy in East Asia, KH Mok and R Forrest (eds.), pp. 140–158. London: Routledge. Ku, YW and C Jones (2007). Developments in East Asian welfare studies. Social Policy and Administration, 41(2), 115–131. Kwon, HJ (1999). The Welfare State in Korea: The Politics of Legitimation. Basingstoke: Macmillan. Kwon, HJ (2005). An overview of the study: The developmental welfare state and policy reforms in East Asia. In Transforming the Developmental Welfare State in East Asia, HJ Kwon (ed.), pp. 1–23. Basingstoke: Palgrave Macmillan. Marshall, TH and T Bottomore (1992). Citizenship and Social Class. London: Pluto Press. Midgley, J (1986). Industrialization and welfare: The case of the four little tigers. Social Policy and Administration, 20(3), 225–238.

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Mkandawire, T (2004). Social policy in a development context: Introduction. In Social Policy in a Development Context, T Mkandawire (ed.), pp. 1–33. Basingstoke: Palgrave Macmillan. Rieger, E and S Leibfried (2003). Limits to Globalization: Welfare States and the World Economy. Cambridge: Polity. Ring, PJ (2005). Trust in UK pension policy: A different approach? Policy and Politics, 33(1), 55–74. Rothstein, B (1998). Just Institutions Matter: The Moral and Political Logic of the Universal Welfare State. Cambridge: Cambridge University Press. Rudolph, TJ and J Evens (2005). Political trust, ideology, and public support for government spending. American Journal of Political Science, 49(3), 660–671. Tang, KL (2000). Social Welfare Development in East Asia. Basingstoke: Palgrave Macmillan. Wade, R (1990). Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton, NJ: Princeton University Press. White, G and R Wade (1988). Development states and markets in East Asia: An introduction. In Developmental States in East Asia, G White (ed.), pp. 1–29. Basingstoke: Macmillan. Wong, J (2004). Healthy Democracies: Welfare Politics in Taiwan and South Korea. Ithaca: Cornell University Press.

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Chapter

4 One Country, Two Cities: A Comparison of Perceived Cohesion in Guangzhou and Hong Kong Simon T.M. Chan*, Sammy W.S. Chiu* and Marcus Y.L. Chiu*

Social cohesion and social harmony are important social agendas in China and Hong Kong. While they are promoted in China under rapid economic expansion and rising wealth disparity, they are upheld to promote social stability in Hong Kong. Rather than discussing the content of social policies that contribute to social cohesion, this chapter instead discusses the subjective dimension of social cohesion. Two surveys were conducted to compare and discuss the concept of “perceived social cohesion” (Bollen, 1984) in Hong Kong and Guangzhou. The total sample size of two surveys was 2,127. Results show that generally, residents in Guangzhou had a higher level of “perceived social cohesion” than that of Hong Kong. Further Statistical analyses examine the differences of “perceived social cohesion” levels of different demographic groups. Finally, this chapter attempts to argue that while China is still playing a strong *Department of Social Work, Hong Kong Baptist University. 121

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122 Simon T.M. Chan et al. role in social care and in keeping social cohesion, Hong Kong is still emphasizing on individual responsibilities. Social cohesion cannot be treated as a moral and political campaign, but has to be anchored in social policy based on citizenship if it is to be realized.

1. INTRODUCTION Social cohesion and social harmony are important social agendas in both Mainland China and Hong Kong in recent years. Wu Bangguo, chairman of the 10th NPC Standing Committee, said, “We must … fully implement the law on oversight and put the focus of oversight on serious problems that affect overall reform, development and stability, that have an impact on social harmony and that cause great resentment among the masses” (People’s Daily Online, 2008c). The Chinese President Hu Jintao also shares Wu’s view on social harmony, “… to enhance stability and prosperity, and to ensure a stable border area by making local people rich … to achieve sound and rapid economic development, ensure people’s well being, improve their lives, enhance social harmony, improve work related to religious and ethnic affairs, and make more efforts in strengthening unity among ethnic groups” (People’s Daily Online, 2008a). The Chinese Premier Wen Jiabao said at the Great hall of the People, “[we] will continue to free our mind, stick to reform and opening up, promote social harmony and strive for new achievements in building a moderately prosperous society” (People’s Daily Online, 2008b). To conclude, in China, the Civil Affairs Bureau is charged with the responsibility to promote social cohesion and social harmony in the midst of rapid economic expansion and rising disparity of wealth. In Hong Kong, both the former and the current chief executives have made social cohesion and social harmony their focuses during their annual policy addresses. In the 1998 Policy Address, former Chief Executive Tung Chee Hwa commented on urban renewal as “the quality of life in many of the older parts of Hong Kong contrasts unfavorably with that in our new towns. Buildings are rundown, hygiene is poor and there is a lack of social cohesion”. When addressing moral values in his 1999 Policy Address, the former chief

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executive believed “we all desire a society of greater harmony, in which everybody respects and treats others well”. In his 2000 Policy Address, Mr. Tung addressed social cohesion and social harmony in the areas of school education, young people, and culture and sports. His addresses on social harmony and social cohesion continued during his remaining terms as the Hong Kong chief executive (Policy Address, 2001, 2004). When Mr. Tsang Yam Kuen became the Hong Kong chief executive in 2005, he has made social harmony and social cohesion a much more important focus in his Policy Addresses (2005, 2005–2006, 2006–2007, 2007–2008). In the 2005 Policy Address entitled “Working together for Economic Development and Social Harmony (HKSAR)”, he mentioned in the part “Maintaining Social Harmony” that Hong Kong people have always attached great importance to social harmony. The saying “a family that lives in harmony will prosper” epitomizes harmony as a core value in our tradition. A stable environment is the prerequisite for social progress, economic prosperity, constitutional development, and better living. This explains the strong desire of the public for social stability and their increasing loathing of the conflicts and confrontations that have surfaced in recent years. The public is well aware that social harmony is the foundation of stability and prosperity. Other than social harmony, Tsang included “upholding social justice”, “encouraging fair competition”, “development of welfare services”, “helping the needy”, “cherishing family values”, “protecting labor rights”, and “environment and health” in his plan for promoting social harmony in Hong Kong. He said, “We cannot turn a blind eye to those factors that threaten long-term harmony … employment difficulties … declining real pay levels … polarization of the middle class; a widening income gap; an ageing population; adaptability problems … serious challenges to traditional family values” (Policy Address, 2005–2006, p. 13, paragraph 38). However, the focus on social harmony remains strong in his subsequent policy addresses in which the concerned areas expanded to “supporting the family”, “subsidizing early childhood education”, “gifted education”, “community and neighborhood”, “progressive

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development”, and “mediation services” (Policy Address, 2006–2007, 2007–2008). From the previous policy addresses delivered by the two chief executives of Hong Kong SAR, we can unequivocally identify that social harmony and social cohesion have been promoted as important social agendas since 1997. Conceptually, however, social harmony and social cohesion are two different though interrelated concepts. But in Hong Kong SAR, these two concepts have been used by the former and present chief executives and the respective administrations similarly as a moral campaign to promote social stability and governmentality. There are three major objectives in this chapter. Firstly, we are to discuss the contentious conceptual bases of social cohesion in order to bring out the many faces of the construct, and in so doing we want to raise the awareness that social cohesion is not as simple as a solid state out there to be achieved. We hope the readers would appreciate the subtlety of the different concepts and have a broader and deeper understanding of social cohesion than the terms generally used in policy addresses. Secondly, we report the interesting similarities and differences in the perceived social cohesion in a recent survey study in Guangzhou and Hong Kong. Finally, we try to relate some of the major findings to the possible politicalsocio-economic-cultural contexts that may have contributed to the observed differences, and suggest a major direction of bridging the gap between what the social cohesion construct implies and the term used by policymakers.

2. SOCIAL COHESION: SOME CONCEPTUAL DISCUSSIONS Social cohesion is a contested concept. As pointed out by Friedkin (2004), the more social cohesion was researched on, the more confused the concept becomes. As a matter of fact, social cohesion is a subject of both sociological and psychological concern. According to Friedkin (2004), social psychologists tend to place the emphasis of their definitions of social cohesion on individual’s membership in a group. For example, Festinger (1950, p. 274; quoted in Friedkin,

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2004, p. 411) suggested that cohesion is “the resultant of all forces acting on the members of a group to remain in the group”. In this view, cohesiveness exists when members of a group develop a sense of belonging and share a common membership. Cohesiveness can be regarded, thus, as both a subjective experience of group members as well as an objective condition of a group whereby sharing common values and commitment are essential. At a more macro level, early sociologists suggested that social consensus in terms of commitment of shared values and commitment to shared social norms were essentially important for a liberal democratic society to achieve social harmony (Dahl, 1967; McKenzie and Silver, 1968). However, this view was contested by Mann (1970) who held that the values, norms, and beliefs that were deemed to glue the society together were actually very general and vague. In this sense, it would be hard to establish the argument that social cohesion must be built upon shared values and shared norms, especially in a liberal and democratic society where values are diverse and conflicts almost unavoidable. In spite of Mann’s discontent, other sociologists seem to approach social cohesion in the perspective of having shared elements in the society. A typical example is the framework of Jenson (1998), in which social cohesion is conceptualized into five dimensions, covering belonging versus isolation; inclusion versus exclusion; participation versus noninvolvement; recognition versus rejection; and legitimacy versus illegitimacy. Within these five dimensions, the important elements include shared values and identity, equality of opportunity, as well as the respect for differences. In this light, common values might not be the only important factor for the production of social cohesion. Rather it is the ability of the society to respect, or at least tolerate, differences that matters. Furthering Jenson’s work, Beauvais and Jenson (2002; quoted in Chan et al., 2006) suggested five possible domains of social cohesion, including, inter alia, common values, and a civic culture; social order and social control; social solidarity and equality; social network and social capital; and an attachment to place and identity. In spite of the debate and different views of what should be included, this five-domain

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framework of social cohesion does offer bases for operationalization. Forrest and Kearns (2001, p. 2128), in discussing about space and social cohesion, also based on the framework of Beauvais and Jenson (2002), and suggested that “a society lacking cohesion would be one which displayed social disorder and conflict, disparate moral values, extreme social inequality, low level of social interaction between and within communities and low levels of place attachment”. However, Forrest and Kearns (2001) went on to argue that one cannot underestimate the importance of residentially based neighborhood networks in building social cohesion because we learn tolerance and cooperation and acquire a sense of social order and belonging through these networks. In other words, in addition to the macro social elements such as shared values and identity necessary for gluing groups and people together to form a cohesive society, sense of belonging and cooperation can be enabled at a meso level by empowering community and fostering mutual help and cooperation at neighborhood level. In social policy terms, Gough and Olofsson (1999) referred social cohesion to social integration and social solidarity; thus, the study of social cohesion in Western capitalist states is to a considerable extent the study of social exclusion. It is to suggest that if in a society where certain groups and communities are excluded, the resentment and resistance it causes would be counterproductive for the development of cohesiveness. The conceptualization of Gough and Olofsson (1999) is consonant with that of the European Commission. In the first report on social cohesion, the European Commission, though has not put forward a concrete definition, linked social cohesion in direct connection with social solidarity, social inclusiveness, and reduction of disparities in its policy model (European Commission, 1996). Along a similar line, Beck and colleagues (2001), in bringing forward the concept of social quality as guiding principles for social policy in Europe, also proposed to examine social exclusion, polarization, participation, empowerment, as well as social integration as dimensions of social cohesion. Accordingly, social cohesion covers such domains as economic cohesion, social status cohesion, political

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cohesion, and altruism. Phillips and Berman (2001, 2003), in proposing a framework for studying community citizenship, elucidate the way social cohesion is related to community and the nation state: community social cohesion serves as the basis for performing collective roles; and societal social cohesion is the infrastructure which facilitates community inclusion and empowerment. Phillips and Berman (2001) went on to suggest that social inclusion, social cohesion, and empowerment are closely connected: social inclusion provides the basis for empowerment through scaffolding equal opportunity; while social cohesion enables empowerment through the creation of cohesive networks and infrastructure in the community. Notwithstanding the difficulties in coming up with a dictionarylike definition of social cohesion, there are, however, certain common components that we can draw upon: (1) a set of shared norms and values; (2) a sense of shared identity or belonging to a common community; (3) a sense of continuity and stability; (4) the presence of institutions which bear risks and provide collective welfare; (5) an equitable distribution of rights, opportunities, wealth, and income; and (6) a strong civil society and active citizenship. These components can be regarded as necessary social conditions for social cohesion. The measurement of social cohesion is also a highly contested issue since different disciplines emphasize different aspects of the necessary conditions. Beyond this, there are also concerns of subjective versus objective evaluation of social cohesion, as well as the consideration of the unit of analysis. For example, social cohesion can be examined within small groups or local communities; within larger, virtual, or distributed communities; at the level of the whole society, or even at the global level. Much of the quantitative analysis has focused on the values, attitudes, and behaviors of the individuals which may be deemed conducive to bonding within communities. However, it is equally contentious whether these essential elements do bring about desired outcome within expected period and whether the desired outcome, if exists, is attributable to such elements. In our study, we chose to look at perceived cohesion, a subjective assessment of social conditions because perception influences behavior and

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reflects the personal evaluation and agency one has in relation to social cohesion. Nevertheless, we shall also discuss the findings in relation to the objective necessary social conditions for developing social cohesion in Hong Kong and Guangzhou.

3. SOCIAL COHESION IN HONG KONG AND GUANGZHOU The first social cohesion survey in Hong Kong was conducted by Chan and Chan (2006). They adopted the framework that consisted of both a vertical and a horizontal dimension. Vertically, social cohesion was conceptualized as the trustful relationship between governing authorities and general public, whereas, horizontally, it was conceptualized as the degree of unity or sense of belongings that citizens have expressed toward one another. Resonating with what we have mentioned earlier, vertical dimension of social cohesion is manifested in the presence of institutions that bear risks and provide collective welfare, an equitable distribution of rights, opportunities, and wealth. Horizontal dimension of social cohesion is, on the other hand, expressed in a shared norm, a collective identity and a sustained sense of mutuality. It is found that horizontally, Hong Kong society feels cohesive but the feeling is not supported by corresponding behaviors such as participation in voting, active exercising of citizens’ right and involvement in charitable acts, and volunteering in neighborhood. Vertically, the society has much higher trust in the judiciary than the executive branch of the government. They concluded that however cohesively the society feels, it still lacks much institutional mediation and social engagement. To study social change and social interaction in Guangzhou at the level of urban neighborhood, Forrest and Yip (2007) conducted a social survey of three contrasting neighborhoods. The study has successfully explored the meaning of neighborhood, sense of local belonging and community, and patterns and incidence of mutual assistance. In the study, perceptions of and attitudes toward the

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neighborhood, commitment, and sense of belonging are captured because they are all regarded as valid indicators of social cohesion. Irrespective of the differences in the measurement and the scope of the samples (college students versus neighborhood) between the studies of Chan and Chan (2006) and Forrest and Yip (2007), the two studies have commonly defined perceived cohesion as an attribute of individuals in a group that reflects an appraisal of their own relationship to the group. Appraisal of their relationship to the group results in judgment of their personal sense of how much they belong to the group and their personal feelings of morale associated with membership in the group. Bollen and Hoyle (1990) created the perceived cohesion scale (PCS), a six-item measure reflecting two underlying dimensions of cohesion: belonging and morale (see Table 4.1). The stability of the scale was further examined in a sample of 102 students from a small college and 110 residents of a mid-sized city. Confirmatory factor analysis was used as well to assess their two-factor model of cohesion. Chin and colleagues (1999) administered questionnaires containing the adapted PCS to 330 undergraduate subjects (forming 70 groups) at a Canadian university, with group sizes ranging from four to five participants, comprised of a balanced mix of males and females. An Table 4.1.

Perceived Cohesion Scale.

Sense of belonging subscale Item 1 Item 2 Item 3

I feel a sense of belonging to __________. I feel that I am a member of the _______ community. I see myself as part of the _____________ community. Feelings of morale subscale

Item 1 Item 2 Item 3

I am enthusiastic about ____________. I am happy to be at [live in] ___________. ____________ is one of the best schools [cities] in the nation.

Responses are recorded on Likert scales ranging from 0 (“strongly disagree”) to 5 (“neutral”) to 10 (“strongly agree”). The name of cities, Wanchai and Guangzhou are substituted in the scale.

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evaluation of this small-group PCS by Chin and colleagues (1999) revealed that the scale exhibited excellent psychometric properties, similar to the original scale. In summary, Chin and colleagues (1999) were successful in extending PCS to the small group setting. Salisbury and colleagues (2006) further extended PCS to the virtual team context by inviting 110 undergraduate respondents of three universities. Among the 83 responses (response rate: 75.4%), the cohesion measures were identical to Chin and colleagues (1999) except for slightly different anchors. Since the cohesiveness measure has been validated, the scale will be adopted in this study to measure the sense of belonging of and morale of the residents in Hong Kong and Guangzhou. It will be interesting to draw on community samples and to look into the level of social cohesion of Hong Kong with reference to a similar yet different city (i.e., Guangzhou); whether there are any major differences between the two cities under the same country, and whether such differences, if existed, can be explained in terms of responses to local policy practice. By such a research effort, hopefully, we will then be able to argue that social cohesion must not be discussed in a social vacuum and that there are certainly policy practice that can bring nearer or farther the realization of this specific social objective.

4. METHODS A total of 2,400 Chinese respondents resided in Hong Kong and Guangzhou were invited to participate in this survey. Respondents were systematically sampled from each of the following categories: 1. 2. 3. 4. 5.

middle age or elderly citizens age 55 years or older, citizens with full time or part time employment, adolescents and youth age 10 to 24 years, general citizens of any age, and female aged 18 or above.

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Each respondent was invited to complete a 21-item structured questionnaire on perceived cohesion and basic socio-demographic information. Respondents who reported difficulties in completing the questionnaire were assisted by an interviewer on site. 2,127 (89%) respondents consented to participate and completed the full questionnaire.

5. PARTICIPANTS 1,127 respondents were recruited from Hong Kong and 1,000 were from Guangzhou. The respondent pool consisted of 892 male and 1,233 female with a mean age of 38.82 years (SD = 20.17). One-fifth of respondents were aged below 20, and 60% were aged 20–59 while the remaining were aged above 60. More than half (60%) of them have completed high school education, with 30% attained tertiary education or above. Approximately one-third of the respondents earned a monthly income of HK$5,000 (US$641) or below, and about one-half of them earned an income below HK$10,000. Those who reported a monthly income of HK$30,000 constitutes 12% of the overall sample. A substantial proportion of the respondents were full-time students (37%), followed by employees/self-employed (28%), retirees (19%), homemakers (8%), unemployed (6%) and other occupational statuses (3%).

6. MEASURES Perceived social cohesion was measured by PCS. The scale was translated by experienced linguist from English into Chinese for use in the present study. The reliability of Chinese translation of PCS was found to be excellent with Cronbach alpha value of 0.92, 0.93, and 0.83 for the full scale, sense of belonging subscale, and morale subscale respectively. To explore the psychometric property of PCS, principal component analysis was performed to estimate the number of valid components contained in the PCS. A single factor has been identified (eigenvalue > 1), which explained 72.58% of the total variance of the scale. The results supported the existence of only one single factor

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underlying the PCS; thus, it is the full-scale rather than the subscale score of PCS that was used for regression analysis. For easy comparison, the final Cohesion score was computed to range from 0 to 100, with higher value indicating higher level of cohesion.

7. STATISTICAL ANALYSIS Data were analyzed by using SPSS Version 15.0 for Windows. To determine whether there is significant difference in perceived cohesion between the two sites that are Hong Kong and Guangzhou, multiple regressions were performed to explore the association between the dummy variable “site” and the cohesion score. In order to control for difference in sociodemographic profile of the two sites, age, gender, educational attainment, and family income were all included in the regression analysis. The regression models from the two sites were then compared to contrast the common and unique predictors of social cohesion.

8. RESULTS The distribution of sociodemographic variables in the two sites is described in Table 4.2. As anticipated, the age distribution, family income structure, and occupational status of the subjects of the two sites were quite different. The Hong Kong respondents tended to be earning higher income, be older (mean age of 42 years old) and composed more of students, homemakers, and retirees, while the Guangzhou sample had a higher proportion of employees (or selfemployed) and unemployed respondents. In terms of perceived cohesion, the Hong Kong sample reported significantly lower level of cohesion than the Guangzhou sample. This difference remained so even after age, gender, educational level, and family income were controlled (β = −0.23, p < 0.001) (see Table 4.3). In separate analysis of the Hong Kong and Guangzhou sample, age (β HK = 0.17, p < 0.01, β GZ = 0.42, p < 0.001) and gender (β HK = −0.11, p < 0.01, β GZ = −0.07, p < 0.05) were found to be significantly associated with perceived cohesion. Being older and being

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A Comparison of Perceived Cohesion in Guangzhou and Hong Kong 133 Table 4.2.

Sample Characteristics. Data collection sites

All respondents Variables

Hong Kong

Guangzhou

%

(n)

%

(n)

%

(n)

20.8 18.8 17.0 12.4 11.7 8.6 7.0 3.7 38.82

(414) (374) (338) (247) (232) (171) (139) (74) (20.17)

20.9 12.8 13.5 15.6 11.6 9.3 10.2 6.0 42.07

(207) (127) (134) (154) (115) (92) (101) (59) (21.95)

20.7 24.7 20.4 9.3 11.7 7.9 3.8 1.5 35.62

(207) (247) (204) (93) (117) (79) (38) (15) (17.68)

42.0 58.0

(892) (1,233)

41.3 58.7

(466) (661)

42.7 57.3

(426) (572)

4.2 10.8 19.9 24.4 10.3 11.9 17.3

(89) (226) (424) (518) (220) (254) (367)

4.7 12.6 17.4 24.3 10.6 11.9 18.5

(52) (141) (194) (271) (118) (133) (206)

3.8 8.6 23.4 25.1 10.4 12.3 16.4

(37) (85) (230) (247) (102) (121) (161)

34.6 15.2 7.0 8.6 6.2 11.6 16.8

(737) (324) (149) (182) (131) (246) (358)

11.7 7.2 6.7 12.7 9.7 20.2 31.8

(132) (81) (76) (143) (109) (228) (358)

60.5 24.3 7.3 3.9 2.2 1.8 0.0

(605) (243) (73) (39) (22) (18) (0)

Age Under 20 20–29 30–39 40–49 50–59 60–69 70–79 80 or above Age, years [mean (SD)] Gender Male Female Education level No formal education Primary or below Junior high school Senior high school Matriculation Tertiary education University education or above Family income1 1–5,000 5,001–10,000 10,001–15,000 15,001–20,000 20,001–30,000 Above 30,000 Not reported

(Continued)

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134 Simon T.M. Chan et al. Table 4.2.

(Continued) Data collection sites

All respondents Variables

%

(n)

Hong Kong %

(n)

Guangzhou %

(n)

Occupational status Employee/selfemployed Full time students Homemaker Retiree Unemployed Others

27.7

(590)

10.7

(121)

46.9

(469)

37.3 7.6 18.6 5.7 3.1

(793) (162) (395) (122) (65)

48.9 11.1 22.5 1.3 5.4

(551) (125) (254) (15) (61)

24.2 3.7 14.1 10.7 0.4

(242) (37) (141) (107) (4)

Sense of cohesion Cohesion score2 [mean (SD)] Sense of belonging subscale3 [mean (SD)] Morale subscale4 [mean (SD)]

70.79

(24.04)

65.46

(24.10)

76.78

(22.53)

35.65

(13.05)

33.20

(12.95)

38.45

(2.53)

35.10

(12.10)

32.25

(12.10)

38.35

(2.26)

Notes: 1. Family income is based on local currency of Hong Kong (HK$) and Guangzhou (Yuen), the exchange rate from HK Dollar to Yuen is 1 : 0.87. 2. Higher cohesion score indicates a higher level of cohesion. The score range from 0 to 100. 3. Higher sense of belonging subscale score indicates a higher sense of belonging to the community. The score range from 0 to 50. 4. Higher morale subscale score indicates a higher morale as being a member of the community. The score range from 0 to 5.

female favorably predicted a higher level of cohesion in both sites. Educational attainment was negatively associated with cohesion among respondents from Hong Kong, (β = −0.17, p < 0.001), but positively associated with cohesion among respondents from Guangzhou (β = 0.08, p < 0.05). Family income was not a significant predictor of social cohesion in both sites. As for occupational status, retirees were associated

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A Comparison of Perceived Cohesion in Guangzhou and Hong Kong 135 Table 4.3. Association between Site and Perceived Cohesion after Controlling for Age, Gender, Educational Attainment, and Family Income. Unstandardized coefficient Predictor variables Site (Hong Kong) Age Gender (male) Educational attainment Family income Constant N Variance explained (%) F statistics Sig.

Standardized coefficient

Sig.

B

S.E.

B

p-value

−11.11 0.20 −5.15 −2.25 −0.18 66.82 1,669 11.5 43.29 < 0.001

1.46 0.07 1.81 0.54 0.54 5.49

−0.23 0.17 −0.11 −0.17 −0.01

< 0.001 < 0.01 < 0.01 < 0.001 0.74 < 0.001

with a higher level of cohesion in Hong Kong (β = 0.17, p < 0.05); employees and students were associated with a higher level of cohesion in Guangzhou (β = 0.15, p < 0.01) and (β = 0.47, p < 0.001). Further analysis of the relationship between age and perceived cohesion showed that age increases with sense of cohesion from aged 20 onward, up to the aged 60. After the age of 60, the increase becomes more gradual (Fig. 4.1). As for the relationship between educational level and sense of cohesion, the Hong Kong and Guangzhou samples demonstrated different trends. The respondents from Hong Kong showed a continual drop in the level of cohesion at increasing educational attainment. Whereas the respondents from Guangzhou showed a similarly high level of cohesion for those with no formal education, an increasing level of cohesion for those with primary to senior high school education, and a stable but much higher level of cohesion for those with matriculation education or above (Fig. 4.2). Figure 4.3 shows the difference between the two samples at different occupational sectors. The employed respondents or students in Hong Kong showed a substantially lower level of cohesion than their Guangzhou counterparts. For the homemakers,

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Fig. 4.1.

Associations between age and sense of cohesion in the two sites.

retirees, or the unemployed, respondents from the two sites showed similar level of perceived cohesion (Fig. 4.3).

9. DISCUSSION We must acknowledge from the outset that our findings only show the perceived social cohesion of the residents in Hong Kong and Guangzhou. Although as pointed out by Phillips and Berman (2003), social cohesion in a community involves more elements of subjective appraisal, and thus may be possible to be assessed by means of some sort of quantitative measurement, we are aware that there are other objective factors such as social equality as well as income disparity, etc., which are also important in creating social cohesion (or otherwise division). In this light, the following discussions reflect an attempt to

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A Comparison of Perceived Cohesion in Guangzhou and Hong Kong 137

Fig. 4.2. Associations between educational attainment and sense of cohesion in the two sites.

draw some insight from our findings rather than to conclude and establish that one society is necessarily more cohesive than the other. Moreover, this study does not provide sufficient data for an adequate explanation, and that is why we do not attempt to be explanatory. Having said this, however, there are several interesting findings that we should like to highlight for further social policy discussion. First, the two cities alike, older age groups had higher perceived social cohesion. However, we have to be cautious not to interpret this as a general effect of increasing age. It may in fact be attributed to other mediating factors. For example, older people came closer to the experience of extreme hardship of after the war and Japanese invasion, and the supportive neighborhood in 70–80s for both cities. Women are found to have higher perceived cohesion scores than men

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Fig. 4.3. two sites.

Associations between occupational status and sense of cohesion in the

because they had more familial responsibility and in performing these roles they were more likely to create the sense of inter-dependency and supportive neighborhood. It is interesting to note that students and employees of Hong Kong enjoyed significantly lower sense of social cohesion than their Guangzhou counterparts while other occupational groups are in fact quite similar. Hong Kong students in secondary schools and universities have gone through the most radical educational “reform” in these ten years. Fundamental changes with regard to education structure, public examination syllabi as well as language policy took place with everyone’s notice. In contrast, irrespective of expert evaluation, the structure of education in Mainland is relatively stable. For employees, the slashing of jobs and downward adjustment of salary

Prediction of Sense of Cohesion in Hong Kong and Guangzhou Using Multiple Regression Analysis.

Unstandardized coefficient

Sig.

Unstandardized coefficient

Standardized coefficient

Sig.

B

S.E.

B

p-value

B

S.E.

β

p-value

0.20 −5.15 −2.25 −0.18

0.07 1.81 0.54 0.54

0.17 −0.11 −0.17 −0.01

< 0.01 < 0.01 < 0.001 0.74

0.53 −2.94 1.08 0.55

0.06 1.42 0.46 0.69

0.42 −0.07 0.08 0.03

< 0.001 < 0.05 < 0.05 0.42

−3.41

4.45

−0.05

0.45

6.77

2.43

0.15

< 0.01

1.98 7.10 9.94 66.82

3.93 4.56 4.84 5.49

0.04 0.10 0.17

0.61 0.12 < 0.05 < 0.001

24.51 0.39 −0.32 44.37

2.96 9.75 3.08 3.81

0.47 0.00 −0.01

< 0.001 0.97 0.92 < 0.001

Occupational status Reference group = unemployed employee/self-employed Student Homemaker Retiree Constant N Variance explained (%) F statistics Sig.

686 20.8 22.18 < 0.001

946 11.6 15.36 < 0.001

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Age Gender (male) Educational attainment Family income

Standardized coefficient

2:53 PM

Predictor variables

Guangzhou

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A Comparison of Perceived Cohesion in Guangzhou and Hong Kong 139

Sites

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Table 4.4.

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are commonly experienced in this period of economic turmoil. Although namely the financial tsunami struck employees of all cities, perhaps what disappointed the Hong Kong employees is the lack of government initiatives to protect their jobs and living. Educational attainment acts differently on social cohesion for the two cities. It was positively associated with cohesion among respondents from Guangzhou, but negatively associated with cohesion among respondents from Hong Kong. Again, it would be too hasty to jump to argue that what has been there for the education in Guangzhou has not been there for Hong Kong. Built on an entirely different philosophical ground and operation, the education system of Guangzhou and Hong Kong are simply different. It is more sensible to argue that what works for the education in achieving social cohesion in Guangzhou may not be workable and transferable to Hong Kong. In spite of the fact that social cohesion has been campaigned by both the Hong Kong SAR and the Chinese central governments, the Hong Kong sample reported significantly a lower level of cohesion (β = −0.23, p < 0.001) than the Guangzhou counterpart, after controlling for age, gender, educational level, and family income. This piece of finding may appear, to many, to be totally unsurprising. As a matter of fact, the domain of social solidarity, reflected in the equitable distribution of wealth and income is badly performed in Hong Kong. According to a very recent report released by the United Nation Human Settlements Program (UN-HABITAT, 2008), Hong Kong has the highest Gini-Coefficient in Asia (0.533), which indicates that the disparity between the rich and the poor is the worst in Asian cities. Contrasting with Hong Kong, in spite of the rapid economic development that at some point enlarges the wealth gap between the rich and the poor in China, Beijing still has the lowest disparity of wealth in the world, where its Gini-Coefficient is 0.22. With minimal differences in tax and other redistributive policies between Beijing and Guangzhou, one can estimate that the disparity of wealth between Hong Kong and Guangzhou is as huge as between Hong Kong and Beijing. According to Hong Kong Census Statistics, the bottom 10% of income earners in Hong Kong only shared 1.4% of

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the total income in 2006, while the top 10% earned 40.9%, representing 30 times of the income of the bottom 10% (Census and Statistics Department, HKSAR Government, 2007). The huge income gap inevitably weakens the basis of social cohesion. In addition to income disparity, welfare mechanism and provisions in the two cities may also contribute to the differences in perceived social cohesion between Hong Kong and Guangzhou respondents. On the one hand, in Hong Kong, there is only minimal provision for risk sharing and risk protection as far as unemployment, old age, and low income as well as other income loss are concerned. This is at least true for the majority of the income earners. Unless one is a civil servant, one is not protected by a retirement pension. For the majority of income earners, the only retirement protection is the mandatory provident fund, which is without any risk sharing effect. On the other hand, in Guangzhou, the previous state responsibility and collective welfare (“big rice bowl”) have been replaced by shared responsibilities of the state, enterprise, family, and individuals. Yet among them, the state and enterprise still share significant contribution to basic risk protection, in spite of the fact that individual differences are allowed. The state and the enterprise still share significant contribution to basic risk protection, in spite that individual differences are allowed. In this sense, the mechanism that enable risk sharing is largely absent in Hong Kong, at least as far as unemployment and retirement are concerned. Thus, the absence of the spirit of mutual responsibility in Hong Kong would likely weaken the sense of community and the perceived cohesion. Not only that social policy in Hong Kong has become more punitive, the welfare discourse is also dividing rather than uniting. For example, in attempting to contain public expenditure on old age allowance, the government first intended to introduce means test into this provision that was all along universally provided. In justifying this de-entitlement measure, the government blamed the increasing number of old people as the cause for making public burden unbearable. Other examples could be seen in dividing the general population and the social service user groups, such as the new immigrant families from Mainland China, the single parent families, and sometimes the unemployed. If we look at our counterpart in Guangzhou, social services have not been

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used as a dividing measure and the Guangzhou municipal government has rarely relied on dividing measure to control public expenditure. As far as social and political identity is concerned, research findings have shown that more Hong Kong people tended to identify themselves as Chinese citizens rather than simply as Hong Kong people, compared to the situation when Hong Kong was under British rule.1 However, as argued by Mann (1970), this could be only a very general political label with limited explanatory power. It is hard to establish that Hong Kong people now have a stronger shared political identity than before. This could be reflected by the fact that when the Hong Kong SAR government intended to enact local laws to implement Article 23 of the Basic Law (concerning state security) in 2003, a consensus could hardly be reached. Throughout the process, different political groups representing different interests in the society engaged in very dividing debates. At the end, the SAR government reluctantly withdrew the bills and ended the struggle. The example is used here to suggest that a shared political identity of being a “Chinese national” does not seem to create a good ground to unite Hong Kong people. Arguably, because of different political aspirations of the people in Hong Kong and Guangzhou, what is meant by being a Chinese national is bound to be different from the connotation among the people in China. After all in Hong Kong, the question of “what is a Chinese” is morally reinforced and has not been openly debated, not to mention to have arrived at a consensus and a shared understanding. In this light, while a shared and common identity is essential for building up social cohesion, it has to be built by genuine consensus from the grassroots, and with a clear and specific understanding of the core values and spirit rather than by a vague moral and political campaign. In addition to the macro social conditions, which help explain why perceived social cohesion is generally lower in Hong Kong, the findings also suggest that the higher educated group in Hong Kong

1For relevant research studies, visit the Public Opinion Program, The University of Hong Kong on http://hkupop.hku.hk.

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who are more politically and socially conscious show lower level of perceived social cohesion. This may be explained in terms of the dissatisfaction of the higher educated group toward the social and political conditions of Hong Kong. If this observation is true, the implication is obvious that social cohesion in Hong Kong could hardly be achieved simply by moral campaigns. Without an institutional framework where risks are shared, common identity is built and social resources are equitably distributed, social cohesion in Hong Kong will remain a political propaganda with only very limited effect. The Hong Kong’s case of social cohesion, as argued above, is unique to Hong Kong itself. One cannot transplant the explanation for the Hong Kong’s case directly to other societies without paying attention to their distinctive social and political contexts. Also, one should be cautious to conclude that the failure of the Hong Kong case directly implies the success of the case of Guangzhou because drawing such simplistic contrast could lead to very misdirected if not misleading conclusion. However, certain insights could still be generated from the experience of Hong Kong, which may likely be of interest to other Asian societies. Firstly, if social policy perpetuates and aggravates inequalities, it will act in the direction of division rather than cohesion. People in the society will not be glued together by dividing interests. Secondly, a shared identity can hardly be reinforced by top-down government-led activities alone. Thirdly, social cohesion could hardly coexist with serious disparity of wealth, status, and power, especially in a civil society where people are conscious of the existence of such disparities and find it intolerable. Finally, the promotion of social cohesion would have become very shaky and feeble if the people in that society have no trust in the government, no matter whether such trust is established through democratic election or other nondemocratic means.

10. CONCLUSION Based on the findings about perceived social cohesion, this chapter attempts to give a preliminary discussion of social cohesion in Hong Kong and Guangzhou. Among all the data we generated, we focused

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our discussion on the level of perceived cohesion and attempted to provide a related social policy discussion. We attempted to argue that the relatively lower perceived cohesion in Hong Kong compared to that of Guangzhou is, amongst other factors, related to the absence of social foundation for social cohesion, including conditions for better redistribution of social resources, shared risks, and risk protection as well as the conditions for coming up with a shared social and political identity. Against this context, the SAR government’s efforts to promote social cohesion and social harmony in Hong Kong would need to go beyond a moral and political campaign and to realize its rich meaning embedded in these concepts.

ACKNOWLEDGMENTS We are indebted to Dr. Winnie Ho who contributed her valuable expertise in the part of quantitative analysis.

REFERENCES Beauvais, C and J Jenson (2002). Social cohesion: Updating the state of the research. CPRN Discussion Paper No. F/22. Canadian Policy Research Networks, Ottawa. Beck, W, JG Laurent, van der Maesen, F Thomése and A Walker (eds.) (2001). Social Quality: A Vision for Europe. The Hague and Cambridge (Mass, USA): Kluwer Law International. Bollen, KA (1984). Multiple indicators: Internal consistency or no necessary relationship? Quality and Quantity, 18, 377–385. Bollen, KA and RH Hoyle (1990). Perceived cohesion: A conceptual and empirical examination. Social Forces, 69(2), 479–504. Census and Statistics Department, HKSAR Government (2007). 2006-By Census: Thematic Report on Household Income and Distribution. Hong Kong SAR Government Printer. Chan, J and E Chan (2006). Charting the state of social cohesion in Hong Kong. The China Quarterly, 187, 635–658.

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Chan, J, H-P To and E Chan (2006). Reconsidering social cohesion: Developing a definition and analytical framework for empirical research. Social Indicators Research, 75, 273–302. Chin, WW, WD Salisbury, AW Pearson and MJ Stollak (1999). Perceived cohesion in small groups: Adapting and testing the perceived cohesion scale in a small group setting. Small Group Research, 30(6), 751–766. Dahl, RA (1967). Pluralist Democracy in the United States: Conflict and Consent. Chicago: Rand McNally. European Commission (1996). First Report on Economic and Social Cohesion. European Commission. Festinger, L (1950). Informal social communication. Psychological Review, 57, 591–602. Forrest, R and A Kearns (2001). Social cohesion, social capital and the neighbourhood. Urban Studies, 38(12), 2125–2143. Forrest, R and N Yip (2007). Neighbourhood and neighbouring in contemporary Guangzhou. Journal of Contemporary China, 16(50), 47–64. Friedkin, NE (2004). Social cohesion. Annual Review of Sociology, 30, 409–425. Gough, I and G Olofsson (eds.) (1999). Capitalism and Social Cohesion: Essays on Exclusion and Integration. Basingstoke: Macmillan. Jenson, J (1998). Mapping social cohesion: The state of Canadian research. Paper SRA-321, Strategic Research and Analysis Directorate, Department of Canadian Heritage, Ottawa. Mann, M (1970). The social cohesion of liberal democracy. American Sociological Review, 35(3), 423–439. McKenzie, R and A Silver (1968). Angels in Marble: Working Class Conservatives in Urban England. London: Heinemann. People’s Daily Online (2008a). President Hu calls for scientific development, social harmony in Uygur region, 2 October. People’s Daily Online (2008b). Premier Wen: China to stick to reform, opening-up, 6 October. People’s Daily Online (2008c). Water pollution, laborers’ rights top Chinese legislature’s supervision list, 6 October. Phillips, D and Y Berman (2001). Social quality and community citizenship. European Journal of Social Work, 4(1), 17–28.

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Phillips, D and Y Berman (2003). Social quality and ethos communities: Concepts and indicators. Community Development Journal, 38(4), 344–357. Policy Address, HKSAR Government (2001). Building on Our Strengths, Investing in Our Future. Hong Kong. Policy Address, HKSAR Government (2004). Seizing Opportunities for Development Promoting People-Based Governance. Hong Kong. Policy Address, HKSAR Government (2005). Working together for Economic Development and Social Harmony. Hong Kong. Policy Address, HKSAR Government (2005–2006). Strong Governance for the People. Hong Kong. Policy Address, HKSAR Government (2006–2007). Proactive, Pragmatic, Always People First. Hong Kong. Policy Address, HKSAR Government (2007–2008). A New Direction for Hong Kong. Hong Kong. Salisbury, WD, TA Carter and L Chidambaram (2006). Cohesion in virtual teams: Validating the perceived cohesion scale in a distributed setting. Database for Advances in Information Systems, 37(2/3), 147–155. UN-HABITAT (2008). State of the world cities 2008/2009: Harmonious Cities. Retrieved on http://www.unhabitat.org/content.asp?cid=5979& catid=5&typeid=6&subMenuId=0.

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Part II SOCIAL CHANGE AND URBAN GOVERNANCE

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Chapter

5 Governing a Global City in the Context of Political Transition Tai Lok Lui *

Hong Kong has been undergoing a process of double restructuring (economic as well as political) in the decade of 1997–2007. On the one side, it has to deal with the economy’s transition into post-industrialism. On the other, the return of Hong Kong to China has major implications to state–society relations. Our discussion in this chapter is divided into three sections. First, we shall discuss why the issue of governance has been largely sidelined in the literature on global city and why it is important to bring it back into our research agenda. Second, we shall look at how Hong Kong has dealt with economic restructuring in the context of growing competition. While it benefits from its integration into China’s national economy and its globalization, it encounters great difficulties in changing gear and developing new areas of economic competence. This is most evident in the HKSAR Government’s attempt of launching a mega-cultural project, namely, West Kowloon Cultural Development (WKCD) project. The

*Department of Sociology, The University of Hong Kong.

149

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150 Tai Lok Lui source of its problem is largely political in nature. A failure of building consensus and securing political support brought the project to a standstill in 2006. Third, it will be argued that Hong Kong’s political transition before and after 1997 has serious consequences to state building after decolonization. Its partially democratized political institution is problematic and is a cause of the present political impasse. As a result of the weakening of the post-colonial state’s authority, it is difficult for the government to launch new initiatives and to promote long-term development.

1. INTRODUCTION According to the Hong Kong Special Administrative Region Government (Information Services Department, 2008, p. 66), in 2007 Hong Kong was the world’s 11th largest trading economy, the 15th largest banking center according to external banking transactions, the sixth foreign exchange market on the basis of turnover, and the seventh worldwide and third largest stock market in Asia in terms of capitalization. Almost 4,000 international corporations established regional headquarters or offices in Hong Kong. Hong Kong’s status as a global city is widely recognized (see, for example, the lists of global cities in Beaverstock et al., 1999; Friedmann, 1986; Taylor, 2004, p. 92). But, it is less so in terms of the relevance of the case of Hong Kong to the broader literature of global cities. It is my argument in this chapter that Hong Kong has a lot to offer to global city research. Its recent experience in economic as well as political restructuring best illustrates the significance of the issue of governance, an issue that has been unduly neglected in the existing literature, in determining the future development of a global city. After all, the future of a global city is not simply an outcome of the changing global economy and its resultant changing opportunity structure. Whether a global city can manage to get the best from new opportunities or otherwise is also structured by its own capability of city building. In this regard, politics is one of the key concerns of a global city. The question of governance of a global city plays a critical role in shaping the formation process as well as the future prospects of a global city.

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This chapter is an attempt to show the importance of governance in structuring a global city’s current and future development. Our discussion is divided into three sections. First, we shall discuss why the issue of governance has been largely sidelined in the literature on global city and why it is important to bring it back into our research agenda. Indeed, without a proper understanding of the issue of governance, it is difficult to explain how a global city can or cannot capture new opportunities and launch new initiative to sustain its growth and development. Second, we shall look at how Hong Kong has dealt with economic restructuring in the context of growing competition and in an environment of flux and uncertainty. It is suggested that while it benefits from its integration into China’s national economy and its globalization, it encounters great difficulties in changing gear and developing new areas of economic competence. This is most evident in the HKSAR Government’s attempt of launching a megacultural project, namely, West Kowloon Cultural Development (WKCD) project. The source of its problem is largely political in nature. A failure of building consensus and securing political support brought the project to a standstill in 2006. This brings us to the third part of our discussion: the significance of governance. It will be argued that Hong Kong’s political transition before and after 1997 has serious consequences to state building after decolonization. Hong Kong’s partially democratized political institution is problematic and is a cause of the present political impasse. As a result of the weakening of the post-colonial state’s authority, it is difficult for the HKSAR Government to launch new initiatives and to promote long-term development.

2. HONG KONG AND GLOBAL CITY RESEARCH Elsewhere I have summarized the main components of global city research and it is suggested that they include (i) the global urban network and hierarchy thesis; (ii) the global city function thesis and (iii) the dual city (social polarization) thesis (Chiu and Lui, 2009). Given limited space here, I will not go into the details of these arguments. However, it is important to highlight that one of the major

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criticisms of the literature on global cities is that, given its primary concern of mapping the global urban hierarchy and analyzing its connection with the changing world economy, its explanation is primarily structural and ahistorical, failing to recognize the diverse ways that cities respond to global forces (Abu-Lughod, 1999, p. 2; King, 1991; Smith, 2001; Ward, 1995). Such a kind of structural analysis is good at mapping linkages and spelling out the broader framework of inter-city competition but has little to offer on the question of how global cities come into being (Olds and Yeung, 2004; Robinson, 2002; Wang, 2004). How mobility in the global urban hierarchy is materialized cannot be explained solely by an analysis of opportunities and possibilities at the macrolevel. Although the structural mapping can explain the broader context and the availability of opportunities for development, it tells us very little about how individual cities are able to capitalize on the opportunities opened to them by the process of macrorestructuring in the world economy. In addition to a structural analysis of networking, we also need to look into the processes of global city formation. For a more complete understanding of the making of global cities, mesolevel institutional analysis and an examination of the role of agency are required. Brenner (1998) and Olds and Yeung (2004) go further in criticizing the global city research for being hijacked to some extent by the hyper-globalists (Held et al., 1999) so that it has “generally presupposed a ‘zero-sum’ conception of spatial scale” (Brenner, 1998, p. 3) and “neglected the role of state-scale transformation in the current round of globalization” (Brenner, 1998, pp. 2,3). As a corrective to these limitations of the hyperglobalist perspective, our analysis starts by recognizing the place-ness of global city (see discussion below). The above criticisms point to some inherent problems in global city analysis. In the first instance, the foci on structural mapping of global urban hierarchy and inter-city relations and linkages at the global level have led to a de-emphasis or downright neglect of actors in the making of global city. Furthermore, the hyperglobalist tendency in the existing discourse of globalization and the concomitant focussing on mobile global capital have prematurely written off the active role of the state (Wang, 2004) and other critical players

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(e.g., the formation of a pro-growth coalition) in global city formation. Hyperglobalism often takes the form of crude economism: the broader global economic structure, or more directly the functions to be performed by global cities, determines the structure of the global urban hierarchy and the fate of individual cities in this stratified urban system. This economism also takes the form of core-centric functionalism: that is, economic functions required by the core of global capitalism largely determine the role to be played by different layers of global cities. Yet, as Brenner and Keil (2006, p. 12) emphasize, “local agents act and react to pressures of global restructuring, but they are also active producers of globalization processes. They are the builders of the global city.” Furthermore, underlying this hyperglobalist tendency is a EuroAmerican centric perspective (Gugler, 2003; Robinson, 2002; Ward, 1995). This is most evident in the difference in research focus between the studies of global cities in the United States and Europe on the one side, and Asia (perhaps with the exception of Tokyo) on the other. In the study of existing global cities, especially those welldocumented global cities such as New York, London and Tokyo, “All too often structures of city governance are either taken as a ‘given’, or are ignored altogether” (Ward, 1995, p. 298). This Euro-American centric perspective is, as noted above, closely connected with corecentric functionalism and structural hierarchy and ranking built into the literature on global city research. The fact that these cities almost command unchallenged status in the literature leads to an underemphasis on local politics and the institutional basis of governance (Ward, 1995, p. 298). By contrast, studies of potential and aspiring global cities in developing countries, whether in East Asia (Wang, 2004) or South America (Ward, 1995), are keen to “put politics and government back into the world cities agenda” (Ward, 1995, p. 298). Research on global cities outside the core, largely driven by the concern about how to push major cities in the developing countries further up the global urban hierarchy, is far more attentive to the importance of institutional and political analysis and the role of actors/agencies. In other words, it pursues a research agenda concerning the processes that facilitate some cities to become (or fail to

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become) global cities. This leads in turn to a focus on the question of urban governance, which has been unduly neglected, as an important component of the research on global city formation. Critiques of global cities research for its over-reliance on structural analysis also point out that global cities research tends to see such leading cities too broadly in terms of their functions in the global economy. Equally pertinent is the temptation, dangerous indeed, of viewing the city as a globalizing and autonomous economic unit and thus the global economy as no more than networks and flows linking up cities through nodes in the global “urban hierarchy”. While the value of these criticisms is noted, it should be pointed out that global cities researchers have long recognized the importance of the place-ness of global city (see Sassen’s reinstatement of her arguments, 2001, pp. 349–350): The place-ness of the global city is a crucial theoretical and methodological issue in my work. Theoretically it captures Harvey’s notion of capital fixity as necessary for hypermobility. A key issue for me has been to introduce into our notions of globalization the fact the capital even if dematerialized is not simply hypermobile or that trade and investment and information flows are not only about flow. Further, place-ness also signals an embeddedness in what has been constructed as the ‘national’, as in national economy and national territory. This brings with it a consideration of political issues and theorizations about the role of the state in the global economy which are excluded in more conventional accounts about the global economy.

This emphasis on place-ness makes it easier to connect global cities research with the new concept of the global city–region (Scott, 2001). This regional dimension of the place-ness of global city underlines the fact that the development of global city, despite its globality and thus a strong connection with distant economic locations and activity, is always embedded in a wider and yet proximate social, political and spatial context. In other words, the key implication of our discussion of the notion place-ness is that the concept of the global city does allow for more scope to explore the embeddedness of global cities. Instead of seeing global cities as globalizing economic units that are disembedded from their immediate environment, we need to

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tease out how they are contextualized in different layers of the broader socioeconomic and political structures. Global cities are implicated in different kinds of embeddedness (cf. Zukin and DiMaggio, 1990). At the local level, what Amin and Thrift (1994) describe as “institutional thickness” is very crucial to the building of institutional and organizational synergy for sustaining the competitiveness and innovativeness of global cities. Equally significant is the regional factor in reinforcing the centrality of global cities (Scott, 2001). Recent discussion on place scaling and rescaling (for example, Brenner, 1998; Swyngedouw, 1997) emphasizes the social and political construction of scale, and both the “upward” and “downward” transfer of power under globalization. Existing boundaries, especially those structured by the nation–state, are no longer fixed but are constantly under pressure for negotiation and change. Indeed, cities are nodes caught in the crossfire of supra-state, state and sub-state scaling and rescaling forces. Place scaling is always a contentious and political process. As Swyngedouw (1997, p. 140) puts it, scale is “the arena and the moment … where sociospatial power relations are contested and compromises are negotiated and regulated”.

3. GOVERNANCE: WITHOUT AND WITHIN The question concerning Hong Kong’s re-articulation with the national and the regional was dealt with elsewhere (Lui and Chiu, 2009). In the next section, I shall discuss, briefly though, how Hong Kong’s reintegration into the neighboring region and into the grand national development project has shaped its course of development since the mid-1980s. Here I shall underline the point that there are different layers of political embeddedness. As noted above, first, the national is more than just the backdrop for the rise and fall of global cities (Massey, 2007, pp. 17–21). State policy at the national level defines and re-defines how global cities are connected with their neighboring regions and thus draws and redraws the boundary with their hinterland. In this connection, the issue of governance for a global city is, by default, a city–region or city–nation issue. The global city’s management of its growth and development always

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requires coordination and collaboration that go beyond its city boundary. How inter-city as well as city–region “development coalitions” (Keating, 2001) are created to foster the growth and development of global cities is a crucial issue in urban governance that lies beyond the boundary and scope of the global city itself. But no less important is the question of governance within the global city (also see Brenner and Keil, 2006, pp. 130, 131). Ward (1995, pp. 299, 300) criticizes existing research for giving insufficient attention to “the political–administrative structures through which such cities are governed and managed”. The political and institutional basis for the success of leading global cities in attaining their current positions has been largely taken for granted. As noted above, this neglect of the political question is partly an outcome of the use of structuralist (the focus on positioning within the world economy and the global urban hierarchy) and functionalist (the focus on contributions to global financial and producer services) explanations in global city research. It is partly a consequence also of an under-emphasis on the processes of global city formation, i.e., of ignoring how a place is governed and managed in order to capitalize on the opportunities opened by economic restructuring in the world economy. In brief, global city research can benefit from incorporating a political economy of place. Current research on the urban growth machine (Jonas and Wilson, 1999; Logan and Molotch, 1987; Mototch, 1976) and urban regime (Lauria, 1997) does not address the question of governance of global city directly but is still relevant to our discussion here. Despite their differences (Harding, 1995; Stoker, 1995), research on the urban growth machine and urban regime has pointed to some crucial aspects of urban politics, namely, the need to go beyond a focus on the local state, the interplay of public and private agencies in shaping the urban development, the internal politics of coalition building, the building of capacity for action, and a choice of policy or path of development. For a deeper understanding of the growth and development of global cities in developing countries, how a global city project (often expressed in the forms of heavy investments in infrastructure construction, the building of spectacular architectural

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landmarks, hosting of mega-events, etc.) is made viable in terms of capacity building, mobilization of resources, and the construction of a hegemonic alliance to support such a venture is always an open question. Through examining the nature of urban governance, we probe the institutional configuration and the role of actors/agencies in the making of global cities.

4. ECONOMIC RESTRUCTURING AND POSTINDUSTRIAL DEVELOPMENT Hong Kong’s rise to the status of a global city has its historical root in the participation in the global economy since its colonization in the 19th century. It performed the role of a regional trading port and a commercial city, occupying a key position in the economic networks of overseas Chinese capitals in the early decades of the 20th century (Hamilton, 1999; Hui, 1995; Meyer, 2000). Because of the establishment of the Communist regime in Mainland China in 1949 and the Korean War (and the resulting trade embargo on China) in the early 1950s, Hong Kong’s entrepôt trade suffered tremendously. However, the 1950s marked a new phase in the development of Hong Kong’s manufacturing industries. With modest beginnings, Hong Kong, based upon export-oriented, labor-intensive production, was quickly changed into a successful industrial city in the 1960s and 1970s. Starting from 1969 (Jao, 1997), Hong Kong emerged as a regional financial center. The rest is the well-rehearsed story of Hong Kong’s success in climbing up the urban hierarchy in the world economy (see Chiu et al., 1997). But the 1980s and 1990s witnessed a new phase of globalization of Hong Kong’s economy in the form of a dispersal of local production through massive relocation of the manufacturing industries to the Mainland. Squeezed between high production (labor and land) costs and stiff competition from other newly industrialized economies, local manufacturers began to search for greener pastures abroad (Lui and Chiu, 2001). Starting from the mid-1980s, relocation became a leading production strategy for Hong Kong’s manufacturers. Mainland China, especially the Pearl River Delta, with the

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abundant supplies of low-cost land and labor, fits in very nicely with local manufacturers’ plan of expanding production without carrying out rigorous technological upgrading (Lui and Chiu, 1993). In Guangdong province alone, Hong Kong manufacturers operated 25,000 processing factories and employ three million workers in 1993 (Federation of Hong Kong Industries, 1993, p. 3). Such a change in Hong Kong’s role from a production site to an operating center controlling a widely dispersed network of extraterritorial production locales led to other changes. Hong Kong’s manufacturers have changed from being the primary production contractors for overseas buyers to being the agents of “triangular manufacturing” (Gereffi, 1994, p. 114), shifting toward more emphasis on linkages, coordination and management in an increasingly decentralized and sophisticated system of production. Hong Kong is “an ideal base and contact point for foreign companies wishing to penetrate the regional market” (Hong Kong Trade Development Council, 1997, p. 12; also see Birnbaum, 1993). It is also in the eyes of overseas buyers a highly competitive sourcing center for China-made goods. The essential components of the new prototype of successful business include the competitive advantage in handling dispersed manufacturing, skills in supply chain management, customer-sensitive marketing and the capability of providing the so-called “one-stopshop services” (Trade and Industry Department, 2001, pp. 2–15). Hong Kong manufacturers’ and traders’ experiences of working with global sourcing agents since the 1970s and their need of working with offshore production (particularly since the opening of the Chinese economy since 1978) have helped them pick up the skills of effectively and efficiently managing the supply chain. They can handle modularized manufacturing (i.e., the processes of the supply chain being broken up and different parts of the production being farmed out to different companies across the world) and are capable of orchestrating these various processes of dispersed production carried out by a network of suppliers (Fung et al., 2008). Meanwhile, the growth in cross-border trade and other transactions stimulated the growth of other producer services such as financing of production expansions in China, trade-related services, insurance, communication,

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and port, transportation and logistics. What is more relevant to our discussion here is the further development of Hong Kong as a locale for coordinating and managing such transnational flows of economic activities as reflected in regional representation of overseas companies in Hong Kong.1 The number of regional headquarters (RH) rose from 602 in 1991 to 944 in 2001 and then 1,246 in 2007, while the number of regional offices increased from 278 in 1991 to 2,644 in 2007. The deepening of economic integration with Mainland China, particularly with the Pearl River Delta, pushes Hong Kong further onto the path of postindustrial development. Re-exports of Mainland China origin to other places through Hong Kong amounted to some 82–86% of outward processing in the mid-1990s but the proportion has dropped to less than 80% since 2003. The findings of a 2004 survey of local manufacturers and traders that was conducted by the Hong Kong Trade Development Council (2004) confirms this observation. That study found that the percentage of re-exports of Chinamade goods via Hong Kong by local companies dropped from 78.0% in 1994 to 52.3% in 2003. Meanwhile, the proportion involving direct shipment rose from 10.3% to 37.6% in the same period (Hong Kong Trade Development Council, 2004, p. 15). In 2003, about 50% of the total export value of the respondents to that survey belonged to offshore trade (Hong Kong Trade Development Council, 2004, p. 6). The reasons for the increase in direct shipment are diverse: When asked why they opt for direct shipment, 66% of the respondents give “lower transportation cost” as their reason, followed by “buyers’ request”

1An

RH is defined as “an office that has control over the operation of other offices or branches in the region, and manages the business in the region without frequent referrals to its parent company outside Hong Kong”. A regional office (RO) is “an office that coordinates offices/operations elsewhere in the region, in addition to the city in which it is located, and manages the business but with frequent referrals to its parent company outside Hong Kong or a regional headquarters”. See Census and Statistics Department (2001, p. 5). These definitions have been slightly revised (in fact, simplified) since 2006. There have not been major changes in the meanings of the terms.

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160 Tai Lok Lui (46% and “factories far away from Hong Kong” (35%) … Some overseas buyers have set up sourcing centers in China in recent years, but even if they commission the manufacturing or sourcing of goods to Hong Kong companies, they would still prefer to export the goods by direct shipment. Moreover, … since more and more Hong Kong companies, especially traders, have extended their production or sourcing activities to places further away from Hong Kong, it makes more sense to export the goods by direct shipment without touching Hong Kong. Hong Kong Trade Development Council, 2004, p. 17.

So, there are two sides to this phenomenon of a growth of offshore trade. First, as noted above, there has been a fall in trading of goods via Hong Kong. On the other side, it shows that Hong Kong continues to play an important role as a middleman in regional and world trade (Sung, 2006). The role of a middleman includes merchandising (local traders provide services to overseas buyers and suppliers in the handling of purchases and sales of goods and the trading of such goods does not involve import and export activities via Hong Kong) and merchanting (local traders purchase goods produced overseas and such goods are forwarded directly from the suppliers for export without going through Hong Kong customs) (Sung, 2006, p. 155). Merchanting and other trade-related services (MOTS) feature prominently in Hong Kong’s exports of services, increasing from 31.0% among all exported services in 2000 to 34.7% in 2004 (Census and Statistics Department, 2005, p. FB6). Most of these services (89.5%) in 2003 were related to offshore trade (Census and Statistics Department, 2005, p. FB6). Moreover, the major destination of the MOTS is Mainland China (around 30% in 2000–2004), followed by the United States (around 27.5% for the same period). MOTS is an important component of Hong Kong’s trade in services. In terms of exports of services, Hong Kong ranked 10th in 2004 (9th in 2002) (Census and Statistics Department, 2005, p. FB12). The second change relating to Hong Kong’s shift from a production site to an operating center is that Hong Kong’s manufacturers and traders are fully utilizing the resources and opportunities they

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find in Mainland China. They are moving further inward into the inland, turning new towns and districts into Hong Kong’s expanding hinterland. This further extension of the scope and scale of Hong Kong’s economic activity in the Mainland is paradoxically a potential threat to the local economy, particularly in those areas where Hong Kong is becoming increasingly less cost competitive (manufacturing production is one area and logistics will soon become another). On the other hand, relocation of production and the growth of offshore trade have pushed Hong Kong further toward the provision of specialized and professional services for local manufacturers and traders and overseas buyers. The deepening of production relocation means that more and more production-related services, such as management and coordination of production, quality control and inventory management, are handled in the Mainland. As a result, Hong Kong companies turn to focus on professional and specialized services ranging from trade financing to marketing to overall management and planning (see Table 5.1).2 It is evident that not only has the Mainland taken up the core processes of manufacturing, even product design as well as research and development are no longer based exclusively in Hong Kong. The changing division of labor between Hong Kong and the Mainland is a dynamic interactive process. How Hong Kong will further reposition itself in the face of the turbulent global market and the changing conditions in the Mainland is an open-ended question. One thing is certain: this changing division of labor will no longer be one-sidedly shaped by Hong Kong as happened in the 1980s and to a certain extent in the 1990s as we discussed earlier. Rather, Hong Kong and the Mainland, especially the Pearl River Delta region, are becoming “competing partners”, complimentary in some aspects but soon competing in many areas. 2How

Hong Kong can tap into the growing economic sectors in the PRD and provide producer services to Mainland corporations is still an open-ended question. A survey conducted by Yeh (2006, p. 157) in 2002 on manufacturing firms in Dongguan and Zhongshan found that only a small fraction of the domestic factories (10.2%) used external producer services.

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162 Tai Lok Lui Table 5.1.

Hong Kong Companies’ Local and Mainland Operations. Percentage of these activities in Hong Kong or Mainland China

Type of activity

Hong Kong

Mainland China

Overall management and planning Sales and marketing Trade documentation Trade financing/insurance arrangement Product design and development Logistics, warehouse, shipping and consolidation Quality control Purchasing of raw materials Management and coordination of production Manufacturing

85.8 87.6 95.1 82.7

56.1 48.5 71.0 31.4

69.8 80.6

62.7 74.5

64.1 76.4 55.7

84.5 78.7 77.0

21.6

82.1

Source: Hong Kong Trade Development Council (2004, p. 43).

5. CHANGING FORTUNES AND FURTHER GROWTH OF FINANCIAL SERVICES The changing division of labor between Hong Kong and the Mainland in terms of manufacturing and production-related activities is primarily conducted at a regional level. However, in terms of financial and business services, the scale is national. Indeed, unlike the most international financial centers, Hong Kong has become a national center after attaining its status and reputation at the regional and international levels (and not the other way round). And thanks to this return of the national, “Hong Kong surged past New York this year [2006] to become the world’s second most popular place — after London — for companies to float new stock listings” (Foreman, 2006). In the past, emphasis was placed upon Hong Kong’s strategic role in facilitating the economic reform and marketization in Mainland China. However, with China experiencing rapid economic growth

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while Hong Kong’s economy has been badly hit by the economic downturn since late 1997, the Hong Kong SAR Government began to rethink its strategic role by shifting its focus to how to take better advantage of economic opportunities and resources in the Mainland. First, the flows of people. Tourists from the Mainland, particularly those from the so-called “white-collar” stratum (i.e., the middle class), are targeted as potential spenders to boost the economy. Second, the opportunities opened by the maturation of the Mainland’s domestic market. Since China’s admission to the WTO, negotiations have taken place between the Central Government and the HKSAR Government over proposals that would grant Hong Kong preferential treatment to enable it to take advantage of business opportunities in the Mainland before similar privileges must be extended under WTO rules to other countries. The most dramatic new development designed to enable Hong Kong to better capitalize on the opening of China to the world market and the hypergrowth of its domestic market was the implementation of the Mainland/ Hong Kong Closer Economic Partnership Arrangement (CEPA) on 1st January 2004. Lobbying by Hong Kong for preferential treatment, as noted above, had been going on for quite some time. The materialization of CEPA was largely intended as a way to help Hong Kong recover from its economic recession and mollify the growing political discontents in 2003, although this motivation was never openly acknowledged. The spread of SARS in 2003 had a dampening effect on an economy that had not yet fully recovered from its downturn following the Asian financial crisis. But Beijing probably considered the mass rally (some half a million people marched in protest against the Hong Kong SAR Government) on 1st July 2003 a more alarming event. Its strategy to assuage public discontents was to help speed up economic recovery. Thus, the launching of the Individual Visit Scheme would give an immediate boost to services related to the tourist industry. The CEPA agreement would give local people a sense of reassurance, though probably more symbolic than real (Synergynet, 2007), that China would help Hong Kong by opening up access to its vibrant economy, thereby creating new business opportunities for the much-troubled Hong Kong economy.

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The Mainland’s phenomenal economic growth and development constitute the major impetus for reshaping the landscape of Hong Kong’s financial development since 2000. Jao (2006, p. 125) suggests that “Hong Kong’s reunification with China provides the political and legal basis for Hong Kong’s role as an offshore financial center of China”. Institutional competence, global linkages and capital mobility of Hong Kong aside, the fact that the Hong Kong dollar is a freely and fully convertible currency plays a significant role here. “Through this medium, China is able to convert its huge balance of payments surplus vis-à-vis Hong Kong into international reserve currencies” (Jao, 2006, p. 126). Over the years, China has come to occupy an important position in Hong Kong’s banking sector in terms of its share of total assets, deposits from customers and loans to customers (see Table 5.2). Equally significant is that the role of Hong Kong is a fund-raising center for Chinese enterprises. Chinese state-owned enterprises were first listed in the Hong Kong stock market in 1993. Red Chips refer to those locally incorporated Chinese companies that float in Hong Kong whereas H-shares are Mainland firms directly listed on the Hong Kong stock market. The total amount of funds raised in 1993–2004 reached approximately US$110,200 million (Jao, 2006, p. 130). Despite the possibilities of raising funds in the stock markets

Table 5.2.

China’s Stake in Hong Kong’s Banking Sector (HK$ billion).

1997

1998 1999

2000 2001

2002

2003

2004

2005

Assets % of total

957 1,004 11.4 13.8

957 1,050 14.1 15.1

987 1,016 1,079 1,146 1,181 16.0 16.9 16.6 16.1 16.3

Deposits from customers

591

681

676

745

724

754

784

836

842

% of total Loans to customers

22.1 436

23.0 433

21.3 405

21.3 422

21.6 418

22.7 451

22.0 453

22.2 478

20.7 510

% of total

10.6

13.1

14.4

17.1

19.1

21.7

22.3

22.2

22.1

Source: http://www.info.gov.hk/hkma/eng/public/index.htm.

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of Shanghai and Shenzhen and in markets abroad (such as London, New York and Singapore), “Hong Kong remains the market of first choice” (Jao, 2006, p. 130). Red Chips and H-shares are actively traded in the Hong Kong stock market and their significance to the market has been growing, particularly since 2005 (see Table 5.3). Growth and development at the enterprise level and the Chinese economy as a whole have generated a surge in demands for financial services. One of these financial services that Mainland enterprises need is the opportunity to raise funds through an initial public offering (IPO). Indeed, Hong Kong has become a platform in this respect for Mainland enterprises to reach global investors: In 2005, Mainland enterprises accounted for over 90% of IPO funds raised in Hong Kong; seven of the ten most actively traded stocks in Hong Kong so far this year [October 2006] are Mainland companies; and of the 200 largest stocks in the Hong Kong market forming the Hang Seng Composite Indexes, 103 companies derive the majority of their revenue from the Mainland and account for about 45% of the market capitalization. Hang Seng Bank, 2006, p. 2.

With the influx of Mainland enterprises coming to Hong Kong to raise funds through an IPO, Hong Kong has quickly climbed to the top position in the world’s top 10 new issue markets.

6. FURTHER RESTRUCTURING: AN IMPASSE Thus far, we have discussed how Hong Kong has gone further into the restructuring process and has been developed into a postindustrial service economy by capitalizing on the “rediscovery” of a hinterland in the Pearl River Delta and the new opportunities offered by the vibrant economy in the Mainland. However, when it comes to new initiatives and future growth sectors, Hong Kong finds its progress unsatisfactory. Indeed, like other Asian global cities, Hong Kong was looking for a new urban strategy to cope with economic competition from far and near at a time when the impacts of the Asian Financial Crisis and the collapse of her own bubble economy became real and no longer negligible. Also, like other Asian global

Market Capitalization by H Shares and Red Chips in the Hong Kong Stock Exchange.

18,228.70 19,981.32 16,463.77 31,530.63 48,622.01 33,532.66 41,888.78 85,139.58 99,813.09 129,248.37 403,116.50 455,151.75 1,280,495.01 3,363,788.46

0.61 0.96 0.70 0.91 1.52 1.26 0.89 1.78 2.57 3.63 7.36 6.87 15.78 25.39

124,129.51 84,279.33 110,701.97 263,330.90 472,970.42 334,966.21 956,942.33 1,203,551.95 908,854.82 806,407.41 1,197,770.75 1,409,357.12 1,709,960.75 2,951,581.05

Source: http://www.hkex.com.hk/data/factbook.

% of market

Market capitalization (HK$mil)

% of market

4.17 4.04 4.71 7.58 14.77 12.58 20.24 25.10 23.39 22.66 21.87 21.26 21.08 22.28

142,358.21 104,260.65 127,165.74 294,861.53 521,592.43 368,498.87 998,831.11 1,288,691.53 1,008,667.91 935,655.78 1,600,887.25 1,864,508.88 2,990,455.76 6,315,369.51

4.78 5.00 5.42 8.48 16.29 13.84 21.13 26.87 25.96 26.29 29.23 28.13 36.86 47.67

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1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

% of market

Market capitalization (HK$mil)

All

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Year end

Market capitalization (HK$mil)

Red chips

3/15/2010

H shares

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Table 5.3.

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cities (say Singapore, Chang, 2000), Hong Kong was discovering (or re-discovering) her own cultural resources and symbolic capital of the built environment in her search of new competitiveness in a new economy. The proposed WKCD project was an attempt to launch a mega-cultural initiative by an administrative state soon after Hong Kong’s return to China. The HKSAR Government’s failure, at least up to 2006, of pushing this new initiative forward is symptomatic of its overall weakness in finding the new impetus of economic growth and competitiveness. The WKCD began as an initiative of making the best use of a piece of virgin land close to the Kowloon side exit of the newly built West Kowloon Cross-Harbor Tunnel and the reclaimed land nearby, i.e., a prime site, harbor front promenade, remaining vacant without designated usage at the city center (for details see Subcommittee on West Kowloon Cultural District Development, 2005; http:// www.ppwk.org.hk). In early 1998, both the Hong Kong Tourist Association (HKTA) and the Planning Department of the HKSAR Government commissioned studies on a new performance venue and examining the requirements of new cultural facilities respectively. In September 1998, it was suggested by the HKTA that new performance venue was urgently needed and the Public Works Subcommittee of the Legislative Council recommended action to be taken regarding part of the infrastructural works in what it was then known as “West Kowloon Reclamation”. But the idea of building a mega-cultural project really took off only when it was appropriated by the Chief Executive in October 1998, announcing his plan of launching a new performance venue in his policy address. This new initiative was part of strategic development of tourism. It was the government’s vision of cultivating “Hong Kong’s image as the Asian center of arts and culture, and of entertainment and sporting events”. Confirmation of the government’s intention of constructing a major performance venue was restated by the Chief Executive in the following year’s policy address. It was also suggested that the government would hold an open competition for developing a concept plan for this mega-project, hoping to solicit world-class design for this initiative with an objective of creating a new outlook for Victoria

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Harbor. The West Kowloon Reclamation Concept Plan Competition was launched in April 2001. It was announced in February 2002 that Foster and Partners’ canopy design was awarded the first prize. Then a Steering Committee for Development of the West Kowloon Cultural District was established in September 2002. Based upon a consultancy report, the Leisure and Cultural Services Department of the HKSAR Government recommended to the newly established Cultural and Heritage Commission (c. 2000) the building of seven new museums. Later, it was also proposed that there was a need of a rationalization plan for existing cultural facilities, with West Kowloon Reclamation constituting the focal point for the future development of territory-wide infrastructure and services. At the same time, the idea of public private partnership was introduced and was seen as a means for funding new cultural facilities. The Invitation for Proposals was brought to the Executive Council for consultation. So far, the launching of the West Kowloon cultural initiative was carried out within a framework wherein the administrative logic prevailed. The West Kowloon Reclamation had been framed into a mega-project with an emphasis on its contributions to tourism, cultural development, and the shaping of the cultural milieu and landscape. The district was bracketed from its neighboring areas and the neighborhood nearby was accordingly denied of its participation in the planning process. The project was lifted to the status of a megaproject by turning it into the focal point of territory-wide cultural facilities and by inviting leading architects to contribute to the formulation of the concept plan. Being a mega-project and a world-class infrastructure, emphasis was placed on how to reach the world standard rather than soliciting the views of the public and meeting their expectations. But then the HKSAR Government was overwhelmed by a major political crisis in July 2003. A mass rally was held on 1st July 2003, the 6th anniversary of Hong Kong’s return to China. It was reported that about half a million citizens from all walks of life, with many of them being middle class, joined the mass protest. This mass protest symbolized the response of the public to the performance of the

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HKSAR Government under the leadership of the Chief Executive Mr. Tung Chee-hwa (see Lui, 2005; Lui and Chiu, 2007). Similar mass mobilizations, however of a smaller scale, were staged on 1st January and 1st July 2004. Largely an outcome of growing discontents, Mr. Tung Chee-hwa resigned from being the Chief Executive of the Hong Kong SAR Government in March 2005 without completing his term of office. The problems encountered by the HKSAR Government are many. First, the Asian Financial Crisis of 1997 triggered a melt down of its property bubble and a speculative securities market. It also brought about an economic downturn and rising unemployment. Second, weaknesses of its partially democratized political system were fully exposed, with concerned parties of different social sectors questioning the political legitimacy of the new administration. The government constantly found itself in the crossfire of contentious political actions. Without neither political authority nor trust from the public, the administration was in a state of impasse and had immense difficulties in pushing through new initiatives. So when the HKSAR Government introduced the Invitation for Proposals (IFP) in September 2003, which invited single-package tenders for the development as well as management of cultural facilities in West Kowloon under a land grant for 50 years and in return the future developer would be given the opportunity of developing residential and commercial developments on the site, it was severely criticized. A motion was passed by the Legislative Council in November 2003 urging a comprehensive review of the WKCD. It was also suggested the cultural sector should be given a stronger and more participative role in future planning and management of the facilities. The change in the political atmosphere brought the WKDC to the center of political contention. The arrangement of single-package tender, which almost by default eliminating smaller developers from tendering, was poorly received by the public and it was seen as just another example of business collusion. Despite hostile reactions from the public, including small business which saw their interests not being taken care of, the HKSAR Government moved on and announced the results of the preliminary screening of

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the five proposals they had received in November 2004. Public consultation on the three short-listed proposals was organized by the government, hoping that this would relieve some of the pressure from the opposition in the legislature and rally public support of the initiative by introducing a dose of public participation. But instead of confining public debate in the format of commenting on the short-listed proposals, heated debate continued. Indeed, consultation sessions organized by the government in 2003–2004 facilitated the articulation of oppositional views and concerted actions from groups and people in the areas of arts and culture. The People’s Panel on West Kowloon was formed in November 2004 and it quickly became the major platform for expressions of views emphasizing the public participation dialog with the cultural sector concerning the objectives and visions of promoting the culture in Hong Kong, and engagement of marginal and disadvantaged groups. It also took a lead in organizing a campaign promoting a “people’s assessment” of the WKCD. With the growing discontents regarding how the government has handled the WCCD, in January 2005 the Legislative Council passed a motion requesting a major change in the whole concept plan of the WKCD. It was stated that the canopy should not be a mandatory requirement of the project. Furthermore, skeptical of business collusion, the original idea of awarding the entire project to a single tender should be revised. Lastly, a statutory body should be established to take care of planning, developing and management of the WKCD. The House Committee of the Legislative Council decided to form a subcommittee to follow up issues concerning the development of the project. In view of widespread misgivings, the government conceded by introducing additional development parameters to the specifications of the WKDC. These amendments included a requirement of an amount of HK$30 billion up front from the selected developer to finance the operation and services of the cultural facilities in the site and that 50% of the commercial and residential land under the project would now be opened for auction. In consequence, the short-listed developers found the revised development parameters rather unattractive. Neither did the amendments please the critics. At the end, to

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save the idea of building a cultural iconic mega-project, the HKSAR Government decided to shelf the WKCD in February 2006. The government understood its efforts of further pushing through the project were futile. It could only save it by shelving the project and then formed a consultation committee in April 2006 to prepare for re-launching. So, the saga continues. But the act of shelving of the project in 2006 best demonstrated how a plan of developing a stateof-the-art cultural mega-project could fail at last. This WKCD fiasco 1998–2006 was largely an outcome of the HKSAR Government’s attempt of sticking to its former mode of governance of being an administrative state in the context of a muchchanged political environment. First, the WKCD is a top–down mega-project with an emphasis on creating a new landmark for the city (i.e., cultivating new symbolic capital of the built environment for the purpose of economic development and urban competition), bluntly playing down inputs from the public as well as the local cultural sector. Consensus from below about how to serve the purpose of promoting and developing local culture has not been the focus of project preparation and consultation. Core cultural facilities have been specified as major components of the concept plan before thinking of key issues concerning cultural development and management. Planning of facilities is determined more by an estimation of market demands and/or the calculation of world media visibility by installing world-class cultural facilities than a projected vision for cultural development. World standard and quality of the cultural facilities, design by top architects and the monumental status of the buildings are underlined in order to convince the public of the significance of the project. In other words, the emphasis is placed on competing with other global cities on the basis of building equally competitive infrastructure rather than that on a shared vision of Hong Kong’s future cultural development. This, at the end, was proved a problematic strategy. Without a shared vision of future cultural development, world-class facilities are merely empty structures. Second, the HKSAR Government tried to avoid political controversy by introducing the idea of public private partnership in the construction of the cultural district and long-term financing of cultural

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facilities and activities. This arrangement would help the government avoid confronting the partially democratized legislature in gaining its approval of fund allocation. Such arrangement is also expected to enhance the financial viability of the proposed cultural facilities (and thus minimizing state commitment in long-term financing of cultural activities). However, as it was shown in subsequent development, the idea of a single-package tendering IFP backfired. It was criticized as an expression of government–business collusion. On the one side, the public worried that the cultural mega-project was no more than a well package property development initiative. Cultural facilities would be no more than a cover-up for giving a large piece of land in a prime location for real estate property development. More critically, this huge development project would fall into the hands of one gigantic business group. On the other, local property developers, especially the smaller ones and those big firms that had not been short-listed for final assessment, saw it as an expression of political favoritism. In other words, the Hong Kong SAR Government also failed to rally support from the business sector for the purpose of launching this major economic–cultural project. Without serious thoughts on the contents of cultural activities and long-term objectives of cultural development, the proposal simply failed to convince different parties of interests that its substance was essentially cultural rather than economic. The avoidance approach does not help and has actually become a source of political controversy. A convincing cultural mega-project cannot be done without going into the contents. Neither can the decision makers simply focus on construction of hardware, assuming that world-class cultural facilities would guarantee cultural development. The more the government wanted to avoid political controversy, the more it got into a vortex of political arguments. Using the case of the WKCD for illustration, it is suggested that the launching of mega-project and any other major initiative of economic restructuring cannot be a process of muddling through. Nor can it simply be confined to discussion of technical and administrative matters. All such initiatives, given their scale and social significance, have to encounter urban politics. Indeed, one can say that

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urban governance has a critical role to play in shaping inter-city competition. Cities cannot bypass governance issues if they really want to move ahead by changing gear and launching major restructuring initiatives. The root of Hong Kong’s current impasse lies in the government’s failure of building a new coalition with the business sector and winning popular support.

7. HONG KONG’S POLITICAL RESTRUCTURING3 Hong Kong’s political restructuring was triggered by the decolonization of Hong Kong. Here our discussion of global city politics is intended to serve two purposes. The first relates to our criticism of the global city literature for neglecting the political issues underlying the global city formation. It is interesting to observe that many local governments in the periphery and semiperiphery take very seriously the project of becoming a global city. Their political rhetoric of climbing up the urban hierarchy in the world economy and strengthening the global links and connections in order to join the ranks of other major global cities clearly entails more than political symbolism since it often involves substantive policy deliverables. Local governments’ pronouncements that they seek to become a global city often quickly materialize in the form of active support for their participation in ambitious projects ranging from massive infrastructural construction (e.g., the building of a new airport) to heavy investments in culture (e.g., place marketing and promoting urban cultural tourism). Setting a goal of becoming a first-class global city is seldom challenged even if there is much contention over the best way to achieve this goal. While there are numerous discussions of the active role that local governments play in the context of intense inter-city competition to become recognized as a globalizing city (see, for example, on Shanghai, Yusuf and Wu, 2002; and on Seoul, Hill and Kim, 2000), the political dimension has by contrast been largely neglected in the

3This

section is a summary of my paper on this question. For the empirical analysis upon which the argument here is based, see Lui and Chiu (2007).

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global city literature that focuses primarily on New York, London, Tokyo and other North American and European cities (a notable exception is Le Gales, 2002). It is my contention that this underemphasis of the political in global city research is an issue that needs to be redressed. The second purpose of our discussion here is to probe the political dynamics underlying Hong Kong’s current impasse in maintaining its competitiveness in the global hierarchy of urban centers. It is our contention that this impasse is not simply a matter of tweaking economic policy. Nor will the changing global and regional environment automatically provide Hong Kong with the panacea for dealing with the pains of restructuring. Local institutions become pertinent in these circumstances to the structuring of a social, economic and political setting that is conducive to advancing up the stratified system of global cities. The major problem encountered by Hong Kong after 1997 is the failure by the government to rebuild state–society relations. In order to understand why it fails to do so, we need to examine in details the challenges encountered by Hong Kong in terms of state building in the changing political context. As stated above, Hong Kong’s political restructuring began with Sino-British negotiations over the colony’s political future. One major consideration when drafting the Basic Law was to preserve the stable political order developed during British colonial rule. By retaining an executive-led polity, emphasizing the administrative strength of a politically neutral civil service and a legislature that was only partially democratized, it was hoped that Hong Kong would maintain the key features of a colonial system that helped ensure stability and effective governance. This was to result in an autonomous state that commanded respect and compliance from various social sectors, could play the role of referee in regulating competition among different interests, and keep political contention within acceptable limits. As succinctly put by Ngo (2002, p. 112), “the colonial system was maintained by the painstaking upholding of a delicate policy consent among the ruling elite. Like the SAR government, the colonial government was torn between the contradictory tasks of offering privileges to business in exchange for political support,

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assuming an arbiter role among competing business interests, and acting as a watchdog against rent-seeking to prevent widespread discontent”. The colonial system was based on certain assumptions. First, it included major business interests in the political oligarchy. Their dominance is best captured by the colonial-era saying that “Power in Hong Kong ... resides in the Jockey Club, Jardine and Matheson, the Hong Kong & Shanghai Bank, and the Governor — in that order” (Hughes, 1976, p. 23). Until the early 1980s, before any effort to introduce the concept of political representation in major decisionmaking bodies, politics was largely in the hands of the government bureaucrats and the powerful economic elite. Until the late 1980s, large British companies continued to hold a dominant place in the economic structure. Not only did they occupy a central position among the major business groups, some, particularly the Hong Kong & Shanghai Banking Corp., played the role of “playmakers”, serving as intermediaries between those with rival interests. Equally significant, each major group had its own specific area of interest under control. While competition was inevitable, a delicate equilibrium of competing interests had been built, with the colonial government monitoring the overall situation. In other words, the economic power structure and its corresponding representation in the formal political structure allowed the colonial government to coordinate and regulate the conflict among the major vested interests. It was on that basis that the colonial government was able to forge a “substantive consent” within the ruling elite. As Ngo (2000, p. 32) argues: “This substantive consent involved the inseparable components of allowing business domination in the power oligarchy while upholding a policy against preferential treatment for selected business interests. Under this consent, besides the privilege of sharing policymaking power, the oligarchical interests were guaranteed that their profit-making would be protected and facilitated by the government. This was realized by a range of pro-business policy measures, including low profits tax, limited social welfare provisions, minimal labor protection, free enterprise, and free capital inflow and outflow. All worked to facilitate profit maximization — a policy goal that was

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proudly admitted by the government. At the same time, the ruling elite agreed to constrain their privileges by accepting a policy of nonintervention. This meant that the government refrained from using public resources to assist or protect individual business sectors and enterprises. This avoided rent-seeking by individual elite groups, ensuring that policy outcomes were acceptable to the less powerful and to the wider population of players”. The so-called positive noninterventionism practiced by the colonial government was an outcome of such a compromise, with both sides accepting certain limits on their action. As long as the economic outcomes were pleasing, this pact allowed the colonial state to enjoy a high degree of autonomy in managing the social, economic and political affairs. The rise of local Chinese business groups since the 1970s and the consolidation of their economic power in the 1980s by taking over or merging with declining British companies began to upset the status quo, create a new balance of power and gradually restructure relations among the economically powerful. The cohesive business elite of the early 1980s had disappeared two decades later due to decolonization and deregulation. Chinese business groups rose while the British ones, as compared to their previous dominant position, declined. Also, the structure of the new Hong Kong business elite became increasingly nucleated and cellular. Each Chinese business group was, in fact, a conglomeration of economic activities run by a family. At the center of each family business, there were family-based interests and concerns, and the groups grew and evolved around these family concerns. They branched out into different areas of investment and diversified their businesses without creating interfamilial alliances. To a large extent, each family group, rather than specialized one, tended to sprawl and trod the turf of other groups. The rise of those with mainland connections also contributed to the fragmentation of this network. So while the earlier business structure gave rise to dominant players like the HSBC Corp. and the Jardine Group, since the 1980s there has been much decentralization. The rising Chinese groups have worked hard to consolidate, and then expand, their “family

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kingdoms”. In addition, deregulation also affected the Hong Kong economy during the 1990s. Under the pressure of globalization, Hong Kong gradually relaxed its regulations on certain monopolistic sectors. In particular, public utilities were subject to increased competition from new entrants — notably in telecommunications. While there was only one service provider in earlier years, the 1990s saw the introduction of competition in that sector first through multiple operators in mobile service and later in the provision of fixed line services. In transport, such as ferries and bus services, competitors also were allowed to enter hitherto monopolistic sectors. Major business groups, keen to enter the telecommunications sector, began competing head to head, upsetting informal market-share understandings they had previously enjoyed. The overlapping of interests and inter-group competition are commonplace in the business world, and fragmentation by itself is not an issue of concern. Intriguing, however, is how such fragmentation challenged the established order worked out years ago by leading British companies and the colonial administration. In colonial days, the leading British and other major business interests had more or less found their own operating areas and were quite happy to be left to pursue their own economic interests in an environment that was pro-business and had minimal government intervention. As long as the government remained “neutral” (i.e., in general pro-business but not favoring individual groups or sectors) and refrained from becoming intrusive, government–business relations were largely peaceful and collaborative. Such an alliance secured business support for pro-growth strategies, such as infrastructure construction and facilitation of trade and commerce. Equally significant, “the colonial administration converted its noninterventionist precepts into practical protection for the public interests” (Goodstadt, 2005, p. 121). The fortunes of business appeared to be dependent on market forces rather than on a business-biased environment, and positive noninterventionism was perceived as an approach to economic management that would guarantee fairness and uphold a competitive spirit. Such a strategy helped produce stability and prosperity. But the de-centralized structure of the 1990s upset this established order.

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Growing inter-group, and often head-to-head, competition restarted turf wars in the business world. It is worth noting that the consolidation and expansion of Chinese business groups in the 1990s coincided with more than globalization and the resulting push for market liberalization. It was also triggered in part by advances in technology, plus deregulation of major services including telecommunications, energy and public transportation. The opening of new opportunities intensified competition and created the need to find a new balance of economic power among the leading business groups. And once government–business relations have to be restructured, the state found itself swamped by new claims from many players in the business world. The decolonization process also re-embedded the state into the socioeconomic structure. For ordinary people, the issue of political legitimacy, once rarely raised, became contentious. After 1997, when the government failed to ensure economic prosperity and its performance was found unsatisfactory, political authority was challenged constantly. For leading capitalists, because the state needed to rebuild its relationships with the business sector, there began a competition to stake out their rival claims. Previously, the dominance of British business interests was taken as a part of colonial rule, and the colonial administration was able to rise above diverse interests to maintain the effective governance. However, decolonization in a way returned the Hong Kong SAR government to the world of real politics. The government had to strike new deals with the business sector, reassuring its leaders that they would get their fair share of the economic action. This is exactly what the Tung administration struggled to achieve. To be fair, it must be admitted there was not much room for political maneuvring. The growth of Chinese business groups and the fragmentation of the economic power structure had changed the established order, and the Tung administration could not simply repeat the winning formula of colonial times. This meant the Hong Kong government had to work out its own alliance with the business world through a different set of players and within different parameters. In a way, it was forced to test its relationship with major business interests

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via a new attempt at reaching a tacit understanding and collaboration. This gave the Tung administration an almost impossible situation because it had to find new arrangements without upsetting other potential candidates. Such problems persist and the succeeding Tsang administration is also plagued by the same kind of issues that once troubled his predecessor. This was evident in the shelving of the WKCD we discussed in the earlier section. Also important is that because of the failure in building new state–society relations and assuming hegemonic leadership, the HKSAR Government finds it difficult to revert back to the mode of governance (characterized by depoliticization and an emphasis on administrative means and procedures in the handling of controversy) practiced by the colonial state. The political impasse encountered by the HKSAR Government makes it difficult to assume leadership and to give direction to long-term development. Such a failure would prove to be costly to Hong Kong in its competition with other cities in climbing up the global urban hierarchy.

8. CONCLUSION Our discussion of Hong Kong’s experience of political and economic restructuring is intended to illustrate the importance of understanding global city politics. The colonial political order was built on a solid coalition of the territory’s government and big business. It was made possible thanks to a cohesive business community composed of a dense network of major corporations. A business consensus on major policy issues, positive noninterventionism prominent among them, was the foundation of sound colonial governance, making it easier for that administration to win social support for its policies. Since the 1990s, however, this cohesion has crumbled, firstly due to the rise of Chinese business groups and secondly due to the process of deregulation which led them to intrude into each other’s market space. While the colonial state could appear to be an impartial arbiter between conflicts of interest involving major players, the SAR government does not have that luxury. Instead, it has been dragged into rivalry among these groups whenever it sought to intervene in the economic sphere.

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Accusations of government–business collusion have popped up from time to time because whenever the government chose to back a major project, it would inevitably find itself aiding one group at the expense of its rivals. The recent debate over the alleged demise of the “positive noninterventionist” approach to economic management illustrates the double bind in which the government is caught. While it has been trying its best to articulate a viable strategy and carve out a new direction for Hong Kong’s economy, it has been caught in the crossfire of conflicting demands and interests. Such conflicting demands do not emanate merely from the process of democratization or from popular demands for participation and welfare programs. They also are symptoms of the underlying change in the power structure. To construct a viable governing coalition that supports the quest for good governance, the administration must find a way to overcome the fragmentation of business interests and forge more broad-based support for its major development policies. To be competitive, Hong Kong needs to reconstruct its institutional foundation of governance.

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Chapter

6 Embracing the Market: Examining the Consequences for Education, Housing, and Health in Chinese Cities Ka Ho Mok*, Yu Cheung Wong †, Richard M. Walker ‡ and Xiulan Zhang §

Economic and social reforms have gone hand-in-hand in China. Social policy restructuring has been driven by strategies of privatization, marketization, commodification and socialization with the aim of reducing the state burden of financing and providing social welfare; notably in the three

*Faculty of Arts and Sciences, The Hong Kong Institute of Education. †Department of Social Work and Social Administration, The University of Hong Kong. ‡Center of Urban Planning and Environmental Management/Kadoorie Institute, The University of Hong Kong. § Institute of Social Development and Public Policy, Beijing Normal University. 187

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188 Ka Ho Mok et al. mountains of education, health and housing. While the extent of many of these reforms is known, few studies have undertaken comparisons of hardship across policy domains and within and between cities. Data for this chapter are drawn from a 2004 large household survey of eight Chinese cities. Findings show that hardship resulting from increasing financial burdens for housing, medical care and education is concentrated in poorer inland cities, education and health hardships are related to one another but that housing is more likely to be associated with general hardship in daily life or in cities that are more inland. In conclusion, we reflect upon the implication of these findings for the current governments’ movement toward reversing the “rolling back of the state”.

1. INTRODUCTION China’s economic reforms, commenced in the late 1980s, have resulted in a sea change in the countries fortunes. Gross Domestic Product (GDP) has increased from 362.4 billion RMB in 1978 to 13.7 trillion in 2004, with an annual growth rate of nearly 10%, which translates to increases in GDP per capita from 379 RMB to 10,502 RMB (Wang and Chokkalingham, 2006, p. 10). China has become the fourth largest economic power in the world. The rapid growth in the private sector and the success in attracting foreign investment have fundamentally transformed China from a command economy to a market economy. Thus, it is not surprising that The Economist (2004) points out that “China’s leaders still call themselves communists, but they have become capitalists in practice”. The path toward economic liberalization has not been entirely smooth resulting in an intensification of inequalities and social exclusion as the fruits of economic reform have not been equally shared among Chinese residents. The majority of Chinese residents living in the eastern coastal areas have become wealthy, while many people residing in inner parts of the Mainland have only found themselves suffering from widening regional disparities and deepening income inequalities (Chan et al., 2008; Mok, 2000). Alongside economic liberalization the provision of the core public services of education, health and housing have also seen processes

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of marketization, privatization and socialization that have changed provision from hierarchical forms to market-based systems in around two decades. It has been argued that state action has exacerbated the inequalities that arose from economic activity as the state has reduced its role in providing and financing social welfare. People complain that they are now confronted with “three new mountains” because they have to bear more costs for financing education, health and housing. These reforms raise a series of complex questions about the nature and impact of restructuring education, health and housing provision across China. Questions to explore include developing detailed understanding about regional, provincial and city variations, the responses of provinces and local governments to these challenges and the effects on and coping strategies of households. This chapter represents a first stage in unpacking some of these issues. Its main purpose is descriptive, to examine how households in different cites have been effected by the three mountains. Typically evidence exists on the independent effects of education, health and housing, rather than their joint effects. Furthermore, the majority of this evidence is based on single city studies or comparisons between two or three cities rather than multiple city comparisons. In this chapter, we are able to break new ground by reporting on variation across eight Chinese cities to uncover patterns of household experiences in relation to education, health and housing reform. In the next section of the chapter, we provide a brief overview of social policy during the Mao period before going on to examine the nature of the “reform era”. Methods are then outlined. In the subsequent section descriptive data, difference of means tests and factor analysis are undertaken to explore variation and underlying patterns of experience across our eight case study cities. The results suggest that there are indeed substantial variations and that each city has its own unique pattern of experience. In conclusion, we suggest a research agenda and consider the wider responses to the policies of marketization as experienced by urban households.

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2. RESTRUCTURING PUBLIC POLICY 2.1. Social Policy and Social Welfare in the Mao Period In the Mao period, the Communist Party of China (CCP) placed great emphasis on the realization of the human side of material production and developed institutions of social welfare to provide basic social goods to China’s citizens. When examining social policy formulation and development in Mainland China, attention has to be paid to China’s socialist structure, ideology and development. China sees its social system as a reflection of the superiority of socialism. In the Mao period, the abolition of private ownership supposedly had eliminated the basis of exploitation and inequality. After rural collectivization was completed, peasants became members of communes, earning the rights to work and hence a means of subsistence. Distribution of incomes between households in the locality was mostly egalitarian and need based, although disparities existed between different areas. Maoist social policy bore a number of characteristics: upholding the socialist ideals of equality, safeguarding people’s basic needs and the maintenance of social stability. The state was primarily responsible for offering social welfare services and social policies to reduce disparities in living standards and consumption between individuals in urban China. Since the state monopolized social service provision, city residents were beneficiaries of the state’s universal employment policy. Once assigned work by labor bureaus, workers enjoyed life tenure and generous perks given by employers (Wong and Mok, 1995). Chinese citizens in urban areas were thus highly dependent upon their danwei (work units) and had little initiative or autonomy. Through work units, the state provided Chinese people with all kinds of social welfare services, which was well-known as “enterprises running society” that characterized the Chinese welfare society model in Mao’s regime (Walder, 1986). Since the state played a very significant role in social policy and welfare provision, Maoist social policy followed the authoritarian mode. Essentially, the management structure and means of intervention had three features. One was high centralization of authority and

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resources. As a consequence, relations between different tiers of administration were arranged hierarchically. Another was the adoption of bureaucratic measures in policy enforcement. In exchange for this care, total submission was demanded, thus enhancing the legitimacy of the state and the power of enterprises over the work force (Jiang, 1992; Walder, 1986; Wong, 1992). As a consequence, the state dictated the social life of the people and, in turn, the people came to rely on the state for their requirements (Wong and Mok, 1995).

2.2. Changing Social Policy Paradigms in Post-Reform China Since the economic reform initiated three decades ago, China has embarked on two major social and structural changes, namely, institutional transition and structural transformation. “Institutional transition” refers to transition from a highly centralized economic and social planning system to the market economy, while “structural transformation” refers to a social change from an agricultural, rural and closed society to an industrial, urbanized, market driven and open society (Li, 1997). Such transitions have caused changes not only to the economic and social structures, but also to the whole perception of the appropriate state–society relationship. In social policy, the old dependency syndrome was condemned as an impediment to economic progress. The new course was founded on a different interpretation of socialist construction — during the primary stage of socialism; the key task was to resolve the conflict between people’s rising material aspirations and the backwardness of productive forces. Chinese leaders, immediately after the death of Chairman Mao, were fully aware of popular frustrations over meagre living standards. In an effort to make its state-owned enterprise more economically efficient and competitive, Chinese leaders in the post-Mao era have taken significant steps to privatize and marketize social policy and social welfare. Table 6.1 compares and summarizes the differences in terms of social policy goals before and after the economic reform started in the late 1970s.

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192 Ka Ho Mok et al. Table 6.1.

Changing Social Policy Goals in China. The Mao era (1949–1978)

Basis of Ideology

Major Economic Goals Major Social Goals

Upholding “socialist ideals”, emphasizing social protection and social equality Low wages but generous welfare benefits Maintaining “social justice” by means of “redistribution mechanism” Improving people’s quality of life by higher public expenditure

The Reform era (1978–Present) Emphasizing economic efficiency and importance of competitiveness Reduce labor costs by cutting down social welfare Keeping social stability by providing a minimal social relief to the poor and people in needs Involving various nonstate actors in welfare provision

Source: Guan (2001).

Having promoted fundamental value changes in social policy, the post-Mao leaders are well aware of the traditional welfare and social policy model being inappropriate. Nowadays, the Chinese leaders subscribe to the notions that the modern state should act as facilitator and enabler in public policy and public management, believing that the Chinese state should set out an appropriate regulatory framework for governing public policy. The actual financing, delivery and provision of public policy should rest with the market and other nonstate sectors; while the state is responsible for creating a “safety net” to help those most needy and vulnerable. Thus, it is not surprising to see the practices and reform strategies commonly adopted in the neoliberal economies to transform the way social welfare and social policy are managed used to reform the social policy sector in China. Even though post-Mao leaders feel uncomfortable with the term “privatization”, the state has actually reduced its provision of social policy and social welfare. The de-monopolization of the state in the social policy domain has undoubtedly rendered the conventional practices of “managerial paternalism” and “organized

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dependence” inappropriate. Generous welfare benefits that state workers had enjoyed in the Mao period are now considered as welfare burdens on the state (Wong and Flynn, 2001). Hence, major social policy areas such as education, health and housing have experienced reforms by adopting ideas and strategies along the lines of marketization, socialization and privatization, thereby the state has reduced its role in provision and financing while the nonstate sectors such as the market, nongovernmental organizations and local communities are becoming increasingly involved in policy, provision and financing (Mok, 2007; Wong, 1998). Unlike the Mao era when the state took up all responsibilities in social policy provision, financing and regulation, the post-Mao leaders have attempted to re-define the relationships between the state and the market, the community and the civil society (Mok, 2000; Wong, 1998). It is in such a context that social welfare and social policy development in Mainland China have begun to experience fundamental changes along the lines of privatization, marketization and societalization. Education and health services used to be welfare entitlements of urban residents in the Mao era, but people in the reform period no longer enjoy such privileges.

3. MARKETIZATION, PRIVATIZATION AND SOCIALIZATION OF EDUCATION, HEALTH AND HOUSING POLICY Aiming at better use of limited public expenditure, reforms along the line of efficiency gains and value for money, ideas and practices central to the new managerialism have been adopted to transform social policy and welfare delivery. Hence, different market-related strategies are adopted in reforming the education, health, and housing policy. Reform in the three public policy areas differs. In education, the burden of finance has been shifted from the state to individuals, in health the same process is adopted but through insurance schemes which include contributions from employees. In housing, the existing stock has been privatized and individuals using mortgages finance new provision.

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3.1. Education Policy Acknowledging that over-centralization and stringent rules would kill the initiatives and enthusiasm of local educational institutions, the CCP called for resolute steps to streamline administration, devolve powers to units at lower levels so as to allow them more flexibility to run education. Central to the reform, strategies are closely related to the policy of decentralization, whereby schools and higher education institutions have been given more autonomy to run their own businesses (Min, 1994; Mok, 2002) and people now have to pay for their education, especially for higher education. Reshuffling the monopolistic role of the state in educational provision, reform in educational structure started in the mid-1980s and has manifested a mix of private and public consumption resulting in a proliferation of education providers and diversification of finance (Cheng, 1995; Mok, 2006; Wei and Zhang, 1995). Unlike in the Mao era, in which those urban citizens could generally enjoy free education provided by the state, citizens in urban China have to pay for different kinds of fees related to education despite the fact that the Central government has attempted to stop schools in charging unnecessary fees. In the early 1980s, the Chinese government committed itself to raise government investment in education to around 4% of GDP. However, the total allocation of central government fund for education has been lower: in 1995, 2.41% and 2.79% and 3.42% in 1999 and 2002 respectively. By 2005, it had again declined to 2.79% of GDP. Recognizing the importance of providing basic education to Chinese citizens, the school sector has attracted relatively more state funding than that of the higher education. One source suggests the state financial support to higher education had actually declined from 93.5% to 50% between 1990 and 2002 (Chen, 2006). It is not surprising that a number of university presidents and educationalists in Mainland China criticize the government for denying its responsibility in educational financing. Likewise, Professor Chen Zhangliang, President of China Agriculture University and Professor Zhi Baochen, President of People’s University of China, openly raised the concern that the government has never kept its promise in its

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commitment in educational development during the National People’s Congress Conference in Beijing in March 2006 (Mingpao, 8 March 2006). Local government and individual contributions have replaced central government’s prior allocations to education resulting in a mixed economy of welfare described as a “multiple-channel” (duoqudao) and “multimethod” (duofangfa) approach to the provision of educational services during the “primary state of socialism” (shehui zhuyi chuji jieduan). Responsibility has been diffused from the state to society (Cheng, 1990; Mok, 1996). Openly recognizing the fact that the state alone can never meet all of peoples pressing educational needs, the CCP has deliberately devolved responsibilities to other nonstate sectors to engage in educational development by the introduction of a “fee-paying” principle. Early in the 1980s, the plan for fee-charging students was regarded as “ultra-plan”, implying that the in-take of these “self-supporting” students was beyond the state plan (Cheng, 1996). But after the endorsement of a socialist market economy in the CCPs Fourteenth Congress, the State Education Commission officially approved institutions of higher education admitting up to 25% students in the “commissioned training” or “fee-paying” categories in 1992, a trend which has grown since this time (Cheng, 1996; Yuan and Wakabayashi, 1996). Now, all university students have to pay tuition fees. According to a recent report, the tuition fees in higher education have increased by 24-fold, jumping from an average tuition of 200 yuan per student in 1986 to about 5,000 yuan in 2006. More recently, at least onethird of the household consumption in urban China has been allocated to education, health insurance and housing. In 2004 alone, education expenditure constituted around 7.8% of the total expenditure of urban residents in China. Comparing the urban household educational expenditure of 2004 with that of 2000, it increased by 41%, with an annual growth rate of 9% in the last few years. One study regarding the education expenditure conducted by Zhejiang provincial government suggests that an ordinary urban household in the province had to spend around 10,398 yuan annually for children’s education in 2005. If other miscellaneous fees such as private

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tutoring, nursery, interest class fees are taken into consideration, the expenditures related to education in China have constituted a significant part of urban dwellers’ consumption (Dai, 2005).

3.2. Health Policy Health care has not been seen as directly related to economic growth, and the state has set a lower priority for investment (in comparison to education). In addition, confronting the problems of misuse, waste, duplication and cost escalation, reforms have been bold and farreaching in health care. There are three major objectives for health care reforms: to diversify sources of funding; to simplify administration and to devolve responsibility to local areas and treatment centers. The rationale for launching reforms in health care is to improve the range and quality of health care, providing incentives for quality services and to allow more flexibility to offer health services catering for local needs (Holliday and Wong, 2003). In an effort to improve efficiency and economy of its state enterprises, Chinese leaders have started to reduce the welfare burden of state enterprises in financing health care services by launching a contributory social insurance. Urban residents in the mainland now have to engage in a copayment and co-contributions system by joining the contributory social insurance for medical care and medicine, which is contributed to by both employers and employees, with a semicommercial hospital system and commercial medicine provision (Guan, 2001). The major objective of health care reform is to move beyond the traditional “organized dependence” on the state toward “shared responsibilities” of health care, intending to scale down and limit the state subsidies to health care services. In the 1990s, health insurance reforms were started at various cities in the mainland with the intention to rationalize and control health insurance spending (Henderson et al., 1993; Pearson, 1995; Saich, 2004; Yu and Ren, 1997). According to Cheung (2001), none of the schemes successfully resolved the dilemmas of fund insolvency and conflicting interests of treatment providers, insurers and patients. At the end of 1998, the Chinese government started a new health insurance scheme to cover the urban

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workforce. Central to this scheme is joint contribution (employers paying 6% of the wage bill, employees paying 2% of wages), coexistence of individual accounts and pooled funds and basic coverage. Realizing such co-payment scheme may not meet all health care costs, supplementary plans are also encouraged, characterized by plans for civil servants, voluntary top-up schemes by companies and plans to cover serious illnesses. Insurance schemes have been extended to cover standard lists of drugs, treatments and services covered by basic insurance. In short, the introduction of fee-paying and co-contributions systems is central to the health care reforms and the market-oriented approach has been seen to offering more choices for patients to select health care providers. Like the education sector, health care in China now is increasingly marketized, privatized and “societized” (shehuihua, processes denoting the return of the responsibility of health care from the state to society through community financing instead of heavily relying upon state financing) (Cheung and Gu, 2004). Triggered by financial constraints, the Chinese government has to reduce its subsidy to public health care systems continuously and obviously health care establishments in post-Mao China have confronted the continual decline in state funding. From 1990 to 2003, the state began to cut back its public expenditure on health care from 25.1% to 17%, respectively; while the contributions from local community also recorded a decline from 39.2% to 27%. In the same period, individual contributions to health care had increased tremendously from 36% to 56% (Gu, 2005). Within a period of 13 years, individual contribution to health care increased by 13 times, amounting from 267 RMB in 1990 to 3,679 RMB in 2003 (Zhu, 2005). According to the third national health care service survey conducted in mainland China in 2003, about 65% of urban residents relied upon self-financing/self-paying medical services, the state and community contributions had reduced tremendously (Statistics and Information Center, Ministry of Health, PRC, 2004). Against such a policy context, hospitals and clinics have begun to charge additional fees to increase the revenues through overprescription, inappropriate prescription and overcharging of drugs,

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as well as the performance of unnecessary but expensive procedures and surgical operations (Gu, 2005). There has been a consistent trend that urban residents have to spend more on health care. In 1992, per capita health care expenditure was 42 RMB in urban China but it jumped to 528 RMB in 2000, indicating 12 times of growth. Another national survey on health care expenditure also suggests a rising trend of health care costs. For instance, per capita expenditure on a single visit to clinic was 10.9 RMB in 1990, but it increased by 8.9 folds at 108.2 RMB in 2003. Similarly, per capita expenditure on hospitalization jumped from 473 RMB to 3,911 RMB in the same reported period, increased by 7.3 times (Zhu, 2005). Comparing the growth of health care costs with urban income per capita increase from 1989 to 1997, the annual increase in costs for outpatient care and inpatient care had risen by 26% and 24% respectively but urban residents had only about 18% growth in their per capita income. Such figures have clearly suggested people’s income has not kept pace with the rise in health care costs (Liu, 2002).

3.3. Housing Policy Over the past three decades, the nature of housing in China has transformed from a public welfare provision to private consumption. Before the economic reform took place in the late 1970s, most people living in urban China were provided with housing by their employing units (primarily heavily subsidized or provided by the state sector) and urban residents paid a rent far below the market price (if there was any) (Wang and Murrie, 1999). Nonetheless, the average housing expenditure as a proportion of GDP was as low as 0.78% from 1949 to 1978 (Zhu, 2000). Given only limited state investment in public housing, insufficient housing provision with low-quality accommodation and poor maintenance were common housing problems in housing in pre-reform China (Shaw 1997; Tong and Hays, 1996; Wang and Murrie, 1999; Zhao and Bourassa, 2003). Realizing the above housing problems, the Chinese government began to transform the housing policy sector in lines of strategies of

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“privatization” and “localization” (Chan et al., 2008). Deng Xiaoping, the architect of the economic reform in post-Mao China, laid the foundation of urban housing reform by announcing the legitimacy of private property and the private market, which had been previously criticized as “a capitalist tendency” (Wang and Murrie, 1999, p. 972). Adopting commercialization and privatization strategies in transforming its housing sector, we have witnessed a gradual emergence of a property market in China Mainland. From 1979 onwards, a number of experiments, including selling new houses at construction costs, providing housing subsidies shared between work units and city governments and combined economic rents and housing vouchers were undertaken. The marketization and commercialization of housing were further reinformed with the policy A Further Step on Deepening Housing Reform and Accelerating Housing Construction in Urban Areas adopted in 1998. The most important measure proposed by this new policy is to “stop allocating housing through kind and gradually to build a scheme to distribute housing through cash” (SC, 1998). With the introduction of this policy, all enterprises and state institutions had to stop providing housing as part of welfare benefits for their employees. Unlike the old days that the housing market was dominated by work units with a heavily subsidized market, the marketization of housing has given rise to the rapid development of private housing market, decentralized decision making to the local level and local land market used by local governments to raise taxation (Chan et al., 2008; Zax, 2003). In short, all these reform measures taken by the Chinese government have changed the role of the state from a “provider” to a “facilitator” in housing provision (Zhang, 2000). More recent housing reform is the idea of “housing monetarization”, which provides cash subsidies and allowances to urban residents by the government or work units to enable them to purchase in the housing market. With different forms of financial assistance such as family savings, housing provident fund (HPF) and bank loans, urban residents are therefore expected to meet their housing needs through buying in the property market. This housing monetarization policy has significantly changed the work units from taking up the

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housing provider role to become a housing market facilitator role since they are encouraged to offer housing benefit in forms of housing allowance instead of constructing or providing houses or flats for their employees (Chang, 1998). The rapid growth of the housing market in China has resulted in a multilater housing system, under which high income group is expected to buy private housing in the property market, while the middle income group can purchase their properties with considerable government financial help (Zhu, 2008b). The rapid marketization and commercialization of the housing sector in Mainland China has resulted in widening the gap between the rich and the poor. Thus, urban residents in Mainland China have complained the rising housing prices as another new mountain creating additional financial burden and economic hardship in recent years. In view of the intensified inequality problems in housing, the government has adopted various reform measures such as Housing Provident Fund Scheme, Economic and Appropriate Housing Scheme and Social Rental Housing Scheme to help different income groups to get their housing issues sorted (Zhu, 2008a).

4. METHODOLOGY We adopt cities and households as the units of analysis in this chapter. Choosing cities as unit of analysis is because we are interested in inter-city variations in the impacts of reforms; and households because they directly experience the impacts of reform on their daily lives. Household evidence is taken from a 2004 survey with an effective representative sample of 2,823 households with the household head having a local residency status (Cheng Shi Hukou). The total number of individuals in the sample was 8,940. Enumerators were sent to each sampled household and invited one adult member to give information about his/her own household. The Social Development and Public Policy Research Center at Beijing Normal University and the Minimum Livelihood Subsistence Department of the Ministry of Civil Affairs jointly undertook the survey. The survey included eight cities: Beijing, Chongqing, Lanzhou, Wuhan, Nanchang, Taiyuan, Guangzhou and Shenyang. The cities were

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Education, Housing, and Health in Chinese Cities 201 Table 6.2.

Survey Sample. Household composition

Beijing Chongqing Lanzhou Wuhan Nanchang Taiyuan Guangzhou Shenyang All sample

Number of households

Percent of having a child under 18

Percent having an older person 60 or above

Average income

716 298 299 303 300 300 305 302 2823

31.7 31.3 52.8 49.7 53.0 50.0 48.3 27.8 41.4

43.6 53.2 33.8 32.3 41.3 39.3 40.7 47.4 41.8

38,628 16,538 14,138 21,500 14,287 23,876 32,082 15,453 24,556

selected because they represented different geographic locations that had differently experienced economic development across China (see below for further details). The effective sample size in each city was around 300 with the exception of Beijing, which had 716 households. Table 6.2 provides background data on the number of households per city and summarizes their basic socioeconomic characteristics. Such figures clearly show the difference in incomes enjoyed by Chinese residents across different cities. Undoubtedly, people living in major big cities at the eastern coastal area would have earned far more than those living in less economically developed cities in the middle and southwest of China Mainland. In our sample, average household income in Beijing and the relatively well-off southern city, Guangzhou, had the highest level of average income, while Wuhan and Taiyuan, both situated in the central region, had the middle level. Lanzhou located in one of the poorest western provinces (Gansu), Nanchang in the southern Jianxi province and Shengyang in one of the three northeast provinces occupied the lowest position in the income table of the eight cities in our sample.

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A comparison of the average household socioeconomic data with the official statistics available from the National Bureau of Statistics of China in 2004 indicated that the households were representative on key measures such as gender. However, the sample is not representative of household age and income (see Table 6.2). For example, comparison with national income data showed that the household incomes in this sample were lower. The mean annual income in 2004 was around 24,500 RMB, which was around US$3060 at the 2004 exchange rate. The median was less at 17,000 RMB per household. These figures suggest that the sample is biased toward lower income households, as such it may be possible that the findings reported here overestimate the extent to which hardships are experienced by urban households in Chinese cities.

4.1. Measures The questionnaire consisted of 13 sections covering information about basic information of household members, education and training, employment and wages, health condition of members, economic conditions, housing, social support and other psychosocial measurements. The focus of the present study is the three mountains. To this end, we examined a number of questions that explored household experiences in relation to day-to-day living, housing, health and education. Fourteen items regarding the hardship they experienced in the previous year due to lack of financial means were asked. These 14 items included those related to daily subsistence, such as “Not affordable to staple food”, “Not affordable to fresh vegetable, meat, poultry, egg, fruit”; children’s education, such as “Not affordable to child care/tuition/school misc. fees”, “Not affordable to children after school learning fees”; and ways to seek financial support or resources such as “Take loans from bank, friends, relatives”, “Applied social assistance”. Respondents were asked to rate on a 4-point scale ranging from (1) “Never” to (4) “Almost always”. Respondents could also indicate whether the items were applicable to them.

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The imbalance of questions between different areas reflects the fact that the survey was designed for another purpose. However, the questions explore the degree to which households are experiencing hardship in relation to general living and the three mountains in particular. They, therefore, offer a unique insight into the experiences of urban residents in China in the early 21st century.

5. FINDINGS We analyzed the household data in relation to the three mountains in three stages. First, descriptive data are presented from the whole sample before we go on to undertaken difference of means tests across the case study cities. We then undertake factor analysis to determine if there are distinct underlying patterns among the households in the eight cities. The results of the descriptive statistics are presented in Table 6.3. The data aggregate the results for the eight cities. We present them because the overall patterns of these data suggest that, on the whole, the majority of households did not experience any major problems with any of the 14 items reported. Respondents answered each question on a 4-point scale, where 1 is low and 4 is high, suggesting hardship. The highest reported mean score relates to difficulties affording medical expenses, and two other items are similarly responded to and both relate to socializing. Household respondents indicated that their least problematic areas related to selling and pawning goods and mortgage repayments. If analyses were to rest here, our conclusion would point toward quite a rosy picture of reform with no real difficulties experienced among this sample of respondents, but that where problems were experienced they were in relation to health costs and socializing. Table 6.4 presents the descriptive data by city. These descriptive results suggest some variation between our case study research sites, both within cities on the various measures and between cities. A simple eye balling of the mean scores indicates that Beijing was most likely to have the lowest scores across the 11 measures, and in the three cases where it was not the lowest score households

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Descriptive Statistics for All Eight Chinese Cities.

Not affordable to staple food Not affordable to fresh vegetable, meat, poultry, egg, fruit Cannot pay rent, water, electricity, gas, telephone charges on time Not affordable to dinning out for the whole family Not affordable to dinning out with friends Cannot repay collateral debt on time Cannot repay debts to friends and relatives on time Not affordable to child care/tuition/school misc. fees Not affordable to children after school learning fees Not affordable to children Not affordable to medical expenses

Mean

SD

1.10 1.21

0.36 0.54

1.16

0.48

1.32 1.35 1.05 1.28 1.17 1.16 1.19 1.37

0.78 0.81 0.31 0.66 0.53 0.52 0.60 0.75

recorded the second lowest score. This could be read to reflect different stages of socioeconomic development among the selected cities in the present study. In addition, the differences in scores may relate to people’s variations in perceptions especially when some of them still adhere to the traditional values, which are the social responsibility of the family and individuals to finance social services such as education and health. The highest mean scores recorded were typically in Lanzhou, which returned the highest mean for eight of the 11 items, and second highest for a further two. Wuhan followed with two of the highest scores, and reported five of the second highest scores. Lanzhou is the capital city of Gansu and is one of the poorest Western provinces in China. It is likely that the hardship they report can be explained by their limited household income. Wuhan situated mid-way between Chongqing and the Eastern coast along the Yangtze River is at the middle of the income table among the eight cities we studied. The hardship reported could be a result of rising expectations and expenses that the speed of income growth which could not meet rising costs. Overall, these results suggest that there are patterns of variation in household’s experiences.

Descriptive Statistics and Variance of Means Tests Across Eight Chinese Cities.

Beijing

Chongqing

Lanzhou

Wuhan

Nashang

Taiyuan

1

2

3

4

5

6

SD

M

SD

M

SD

M

SD

M

SD

M

Guangzhou Shenyang 7

SD

M

ANOVA

8 SD

M

SD

F

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M

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Table 6.4.

Differences 1 < 3, 4, 7, 8; 2 < 3, 4, 8; 5, 6 < 4

Not affordable to fresh vegetable, meat, poultry, egg, fruit

1.09 0.38 1.23 0.58 1.45 0.76 1.29 0.62 1.10 0.37 1.29 0.62 1.17 0.49 1.18 0.46 17.63

1, 5 < 2, 3, 4, 6; 2, 4, 6, 7, 8 < 3

Cannot pay rent, water, electricity, gas, telephone charges on time

1.08 0.38 1.12 0.48 1.28 0.59 1.24 0.56 1.17 0.47 1.16 0.48 1.14 0.45 1.21 0.50

6.27

1 < 3, 4, 8; 2, 7 < 3

Not affordable to dinning out for the whole family

1.20 0.64 1.45 0.94 1.53 0.96 1.31 0.79 1.20 0.60 1.26 0.69 1.46 0.92 1.27 0.67

9.56

1, 5, 6, 8 < 2, 3, 7; 4 < 3

(Continued )

Page 205

9.11

2:54 PM

1.03 0.22 1.05 0.26 1.17 0.44 1.19 0.46 1.09 0.35 1.10 0.34 1.13 0.40 1.15 0.40

Education, Housing, and Health in Chinese Cities 205

Not affordable to staple food

Chongqing

Lanzhou

Wuhan

Nashang

Taiyuan

1

2

3

4

5

6

M

SD

M

SD

M

SD

M

SD

M

SD

M

Guangzhou Shenyang 7

SD

M

ANOVA

8 SD

M

SD

F

Differences

Cannot repay 1.03 0.23 1.02 0.23 1.02 0.18 1.03 0.21 1.10 0.45 1.06 0.36 1.07 0.29 1.13 0.47 5.56 collateral debt on time Cannot repay 1.13 0.47 1.27 0.67 1.46 0.77 1.49 0.85 1.31 0.69 1.33 0.76 1.26 0.59 1.18 0.50 13.99 debts to friends and relatives on time

1, 3 < 5, 8; 2, 4 < 8

Not affordable to child care/ tuition/school misc. fees

1.09 0.42 1.19 0.61 1.27 0.65 1.24 0.56 1.20 0.60 1.18 0.55 1.12 0.42 1.13 0.44

5.76

1 < 2, 3, 4, 5, 6; 8 < 3, 4, 6; 7 < 3, 4; 5