Publications

    The Risks for International Business under the Hong Kong National Security Law

    Dennis W. H. Kwok and Elizabeth Donkervoort, July 2021 

    Hong Kong, a former British colony, has been a special administrative region of the People’s Republic of China (PRC) since 1997. The National People’s Congress promulgation of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (Hong Kong National Security Law, HK NSL) on June 30, 2020, has a substantial impact on Hong Kong’s constitutional structure known as “One Country, Two Systems.” Enshrined under the Basic Law (Hong Kong’s constitution under the Sino British Joint Declaration), One Country, Two Systems guaranteed that Hong Kong would exercise a high degree of autonomy—with its own political, economic, and legal systems—based on the rule of law. The HK NSL has been in operation for one year. This article analyzes the impact of the HK NSL on Hong Kong’s legal system and, in particular, its civil law jurisprudence. The article also explores the new legal risks and challenges international businesses face when dealing with PRC businesses or matters impinging on national security in mergers and acquisitions, commercial transactions, and civil disputes. These issues will be examined against the current geopolitical landscape and rising tensions between the PRC and other nations.

    From Rebel to Ruler: One Hundred Years of the Chinese Communist Party

    Tony Saich, July 2021 

    Mao Zedong and the twelve other young men who founded the Chinese Communist Party in 1921 could hardly have imagined that less than thirty years later they would be rulers. On its hundredth anniversary, the party remains in command, leading a nation primed for global dominance.

    Tony Saich tells the authoritative, comprehensive story of the Chinese Communist Party—its rise to power against incredible odds, its struggle to consolidate rule and overcome self-inflicted disasters, and its thriving amid other communist parties’ collapse. Saich argues that the brutal Japanese invasion in the 1930s actually helped the party. As the Communists retreated into the countryside, they established themselves as the populist, grassroots alternative to the Nationalists, gaining the support they would need to triumph in the civil war. Once in power, however, the Communists faced the difficult task of learning how to rule. Saich examines the devastating economic consequences of Mao’s Great Leap Forward and the political chaos of the Cultural Revolution, as well as the party’s rebound under Deng Xiaoping’s reforms.

    Leninist systems are thought to be rigid, yet the Chinese Communist Party has proved adaptable. From Rebel to Ruler shows that the party owes its endurance to its flexibility. But is it nimble enough to realize Xi Jinping’s “China Dream”? Challenges are multiplying, as the growing middle class makes new demands on the state and the ideological retreat from communism draws the party further from its revolutionary roots. The legacy of the party may be secure, but its future is anything but guaranteed.

    Risk Mitigation and Creating Social Impact: Chinese Technology Companies in the United States

    Wenchi Yu, April 2021

    Chinese technology companies have become a topic of interest to not only the business and investor communities but also increasingly the national security and intelligence communities. Their scale and level of innovation present new possibilities and new competition as well as shape global trends. Yet the relationship of such companies to the Chinese government is often opaque. As a result, their growing integration into the global telecommunications system also casts doubt on their intentions and legitimacy.

    This paper reviews key US policy developments under the Trump administration, both broadly toward China and more narrowly relating to trade and technology, and examines the business strategy of four Chinese technology companies operating in the United States. It outlines the benefits of a corporate risk mitigation approach that incorporates social impact creation as an integral part of business and nonmarket strategy for Chinese technology companies, in the United States, and elsewhere. However, this paper also argues that corporate actions can only go so far. Because technology necessarily involves concerns of national security, the role of government—and government cooperation—is essential. It is only through a combination of more locally engaged corporate actions and internationally agreed upon sectoral rules and standard settings that we will be better able to improve transparency and trust-building across borders.

    Chinese Regional Planning Under Xi Jinping: The Politics and Policy Implications of the Greater Bay Area Initiative

    Jason Jia-Xi Wu, April 2021

    This paper seeks to explain the logic of Chinese regional planning pertaining to the Guangdong-Hong Kong-Macao Greater Bay Area (粤港澳大湾区 , hereafter GBA) and the challenges it entails for spatial development. Three questions guide the inquiry of this research: First, what are the institutional underpinnings of the GBA initiative, and how is the path dependency of regional integration in the Pearl River Delta (PRD) unique compared to that in China’s other coastal macroregions? Second, how does Beijing’s changing strategy toward Hong Kong inform the costs and limits of the GBA initiative, and what are their policy implications for the future development of the PRD? Third, why is regional planning uniquely favored by the Chinese Communist Party (CCP) central leadership, and what does this tell us about the changing policy parameters that govern center-local relations in China?

    This paper argues that the GBA initiative is an overly ambitious plan with very few policy instruments and little regulatory flexibility. It contends that the tensions between the GBA’s intended goals and the means of policy implementation are jointly resulted by three factors:

    1. Beijing’s emerging inclination toward using regional planning as an instrument to police center-local relations and cement its national security interests rather than using it as a mere instrument of economic governance.
    2. The declining room for policy experimentation at the local level, which reduces the state’s responsiveness to local demands and capacity to learn from mistakes.
    3. The historical and strategic importance of the Pearl River Delta to the People’s Republic of China (PRC), which causes Beijing to prioritize the political interests of PRD integration much more than its pursuit for regional development in China’s other macroregions.

    These changes are reflective of a broader paradigm shift in Beijing’s regional developmental strategies, under the climate of power centralization in the Xi Jinping era (2012–present). Finally, this paper demonstrates that such changes in the CCP’s regional planning in relation to the GBA initiative will engender both the decline of adaptive governance and premature deindustrialization.

    Disciplining of a Society: Social Disciplining and Civilizing Processes in Contemporary China

    Thomas Heberer, August 2020

    In this paper, we specifically focus on the social disciplining process in China since 2012, i.e., in the Xi Jinping era, although we also briefly touch upon historical aspects of disciplining (Confucianism, Legalism, New Life Movement” in the 1930s political campaigns in the Mao era, etc.). The approach adopted in this paper is to conduct an analysis of the disciplining/civilizing top-down project of the state.
     
    We argue that the function of the current Chinese state as a disciplining and civilizing entity is the connecting link tying policies such as the state’s morality policies, its anti-corruption drive or the so-called “social credit system” together under a specific governance logic: to discipline and civilize society in order to prepare the people to become modernized. In fact, modernization and modernity encompass not only a process of economic and political-administrative modernizing but concurrently one related to the organization of society in general and the disciplining of this society and its individuals to create people with “modernized” minds in particular.
     
    Our principal research questions in this paper are twofold: (1) How should disciplining and civilizing processes in general and in contemporary China in particular be understood? (2) What kind of policies and tools does the Chinese state use to pursue and implement its disciplining objectives?
     
    A Turbulent Decade: The Changes in Chinese Popular Attitudes toward Democracy

    Yinxian Zhang, August 2020 

    In light of the increasingly aggressive policies and rhetoric of the Chinese government, many came to believe that China may pose a severe threat to democracy and the international order. However, less attention has been paid to Chinese popular attitudes toward democracy and authoritarianism. How does the Chinese public think of democracy in the changing domestic and international environment?

     

    This paper uses a novel data set of Chinese social media posts generated between 2009 and 2017 and investigates the changes in popular attitudes toward democracy in the past decade. Results show that online discussion around democracy has decreased and voices questioning democracy have become pronounced since 2013. While tightened state control is a critical factor shaping popular attitudes, this paper demonstrates that people’s increasing exposure to two types of foreign information has also played into this trend. These information lead to a perception of dissatisfying performance of other countries and an awareness of racial attitudes of the West. Lastly, increasing doubts about democracy are not necessarily translated into a strong authoritarian legitimacy. Instead, online discussion presents a sense of ambivalence toward the two models, and the Chinese regime has continued to face a predicament of legitimacy.

     

    Cunningham, Edward, and Philip Jordan. 2020. “Our Path to “New Normal” in Employment? Sobering Clues from China and Recovery Scores for U.S. Industry.” Ash Center for Democratic Governance and Innovation. Read the full report Abstract

    Edward Cunningham and Philip Jordan, July 2020 

    The US National jobs reports for May and June exceeded expectations, and for many, this signaled that April was the true peak of American job losses and real recovery may be underway. Yet mounting evidence suggests that a job recovery is a long way off and that many jobs may not return.

    Part of the analytic disconnect stems from the fact that the global pandemic is a novel challenge for policymakers and analysts. We lack current, useful benchmarks for estimating the damage to the labor market, for estimating what recovery would look like, and for measuring an eventual recovery in jobs. Given this paucity of models, one place to look for patterns of potential recovery – particularly relating to consumption and mobility – is China.

    The Chinese economy is driven largely by consumption, urban job creation is driven by small and medium-sized companies, and China is several months ahead of the US in dealing with the pandemic’s economic and labor impact. An analysis of China’s experience may, therefore, offer important clues about our recovery here at home, and inform new models of thinking about American job recovery.

    Understanding CCP Resilience: Surveying Chinese Public Opinion Through Time
    Cunningham, Edward, Tony Saich, and Jessie Turiel. 2020. Understanding CCP Resilience: Surveying Chinese Public Opinion Through Time. Ash Center for Democratic Governance and Innovation. Read the full report Abstract

    Edward Cunningham, Tony Saich, and Jessie Turiel, July 2020

    This policy brief reviews the findings of the longest-running independent effort to track Chinese citizen satisfaction of government performance. China today is the world’s second largest economy and the Chinese Communist Party (CCP) has ruled for some seventy years. Yet long-term, publicly-available, and nationally-representative surveys in mainland China are so rare that it is difficult to know how ordinary Chinese citizens feel about their government.

    We find that first, since the start of the survey in 2003, Chinese citizen satisfaction with government has increased virtually across the board. From the impact of broad national policies to the conduct of local town officials, Chinese citizens rate the government as more capable and effective than ever before. Interestingly, more marginalized groups in poorer, inland regions are actually comparatively more likely to report increases in satisfaction. Second, the attitudes of Chinese citizens appear to respond (both positively and negatively) to real changes in their material well-being, which suggests that support could be undermined by the twin challenges of declining economic growth and a deteriorating natural environment.

    While the CCP is seemingly under no imminent threat of popular upheaval, it cannot take the support of its people for granted. Although state censorship and propaganda are widespread, our survey reveals that citizen perceptions of governmental performance respond most to real, measurable changes in individuals’ material well-being. For government leaders, this is a double-edged sword, as citizens who have grown accustomed to increases in living standards will expect such improvements to continue, and citizens who praise government officials for effective policies may indeed blame them when such policy failures affect them or their family members directly. While our survey reinforces narratives of CCP resilience, our data also point to specific areas in which citizen satisfaction could decline in today’s era of slowing economic growth and continued environmental degradation.

    China's Most Generous: Examining Trends in Contemporary Chinese Philanthropy

    Edward Cunningham and Yunxin Li, March 2020 

    This annual report highlights leading results from the most recent data analysis of the Harvard Kennedy School Ash Center’s China Philanthropy Project, capturing over one-quarter of estimated national giving in China. We focus on elite giving by building an annual database of the top 100 individual donors, top 100 donors from corporations and other organizations, and also top university recipients of philanthropic giving.

    In 2018, such Chinese giving:

    • was dominated by large organizations (most commonly corporations) rather than individuals,  
    • supported in large part central government policy priorities in the area of poverty alleviation,
    • revealed an intriguing new philanthropy-driven educational model in the country, and
    • remained fairly local in scope.

    Read the report in Chinese 

    Finding Allies and Making Revolution

    Tony Saich, Brill, February 2020 

    What does a Dutchman have to do with the rise of the Chinese Communist Party? Finding Allies and Making Revolution by Tony Saich reveals how Henk Sneevliet (alias Maring), arriving as Lenin’s choice for China work, provided the communists with two of their most enduring legacies: the idea of a Leninist party and the tactic of the united front. Sneevliet strived to instill discipline and structure for the left-leaning intellectuals searching for a solution to China’s humiliation. He was not an easy man and clashed with the Chinese comrades and his masters in Moscow. This new analysis is based on Sneevliet’s diaries and reports, together with contemporary materials from key Chinese figures, and important documents held in the Comintern’s China archive.

    Watch a video introduction to the book 

    William H. Overholt, December 2019

    This is an extensively edited, updated and expanded text of a lecture given for the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School on October 31, 2019. From the origination of “one country, two systems” in 1979 to today, this paper analyzes the history of the unique relationship between Hong Kong, Beijing, and the world.

    Playing by the Informal Rules
    Li, Yao. 2018. Playing by the Informal Rules. Cambridge University Press. Visit Publisher's Site Abstract

    Yao Li, Cambridge University Press, November 2018  

    Growing protests in non-democratic countries are often seen as signals of regime decline. China, however, has remained stable amid surging protests. Playing by the Informal Rules highlights the importance of informal norms in structuring state-protester interactions, mitigating conflict, and explaining regime resilience. Drawing on a nationwide dataset of protest and multi-sited ethnographic research, this book presents a bird's-eye view of Chinese contentious politics and illustrates the uneven application of informal norms across regions, social groups, and time. Through examinations of protests and their distinct implications for regime stability, Li offers a novel theoretical framework suitable for monitoring the trajectory of political contention in China and beyond. Overall, this study sheds new light on political mobilization and authoritarian resilience and provides fresh perspectives on power, rules, legitimacy, and resistance in modern societies.

     

    Tony Saich, August 2017

    This analysis argues that the period of easy reforms in China has ended, and the time of difficult reforms that touch core political interests has begun. The resulting challenges facing the Chinese Communist Party (CCP) general secretary Xi Jinping when he is confirmed for another five-year-term span political, economic, and international spheres. This leadership must both maintain a domestic focus to strengthen economic growth and avoid the “middle-income trap,” while also engaging in a host of regional and global actions to cement China’s position on the world stage.

    Arthur N. Holcombe, June 2017

    In this paper Holcombe discusses lessons from successful poverty alleviation in Tibetan areas of China during 1998–2016. In the period between 1978 and 2015, the World Bank estimates that over 700 million people have been raised out of poverty based on a poverty line of $1.50 per capita. It also estimates that about 48 percent of residual poverty in China is located in ethnic minority areas where top-down macroeconomic policies to reduce poverty have been least effective and where strategies to target poor ethnic minority households with additional financial, technical, and other support were not successful in overcom- ing cultural and other barriers to greater income and food security.

    Anthony Saich & Paula D. Johnson, May 2017

    Values and Vision: Perspectives on Philanthropy in 21st Century China is an exploratory study of philanthropic giving among China’s very wealthy citizens. Recognizing the increasing number of successful entrepreneurs engaged in philanthropic activity in China, the study explores the economic and policy contexts in which this philanthropy is evolving; the philanthropic motivations, aspirations and priorities of some of the country’s most engaged philanthropists; and the challenges and opportunities for increasing philanthropic engagement and impact in China.

    Chinese (traditional) translation available here

    Chinese (simplified) translation available here 

    Governance and Politics of China
    Saich, Tony. 2015. Governance and Politics of China . Palgrave Macmillan. Visit Publisher's Site Abstract
    This systematically revised fourth edition of the leading text on Chinese politics covers the major changes under Xi Jinping and Li Keqiang and their predecessors, and the recent attempts to restore Chinese Communist Party prestige and strengthen the role of the market in economic reforms whilst managing urbanization and addressing corruption.

    Tony Saich, August, 2013

    This working paper focuses on an aspect of governance that is crucial to the next phase of China’s development: reducing state monopolies in order to enhance economic efficiency and promote more equitable growth. It is important to note that monopoly control in the Chinese political economy is not simply an economic phenomenon but also a phenomenon deeply embedded in a comprehensive system of power. Monopolies in the economic sphere (resources, prices, markets, and assets) are serious, but they are derived from the legacy of the centrally planned economy. They are also rooted in the traditional structure of Chinese society and its culture. In this paper, we will present a comprehensive examination of the phenomenon of monopoly control in the Chinese system.

    David Dapice, September 2012 

    Myanmar, long isolated from western economies due to its government, is one of the poorest and worst governed countries in the world. Ruled for many years by a reclusive dictator, senior general Than Shwe, it was dependent on China for diplomatic protection and arms. Trade and investment deals reflected its lack of alternatives. China’s “One nation, two oceans“ policy and Yunnan’s “Bridgehead“ strategy envisioned Myanmar providing access to the sea via gas and oil pipelines, deep sea ports, naval docking facilities and transport for Yunnan. Yunnan through its Southern Grid along with CPI (China Power International) saw Myanmar’s Kachin state as providing ample hydroelectric supplies for the landlocked Chinese province. Deals were signed under General Than Shwe without popular review or consultation with the Kachin whose state had most of the hydroelectric sites.

    Chinese Village, Global Market: New Collectives and Rural Development

    Biliang Hu and Tony Saich, Palgrave Macmillan, 2012 

    This book is a story of one village, Yantian, and its remarkable economic and social transformation. The village sits in the Pearl River Delta, the engine of China's emergence as the hub of global manufacturing and production. The village's success relied on the creation of new economic collectives, its ability to leverage networks, and its proximity to Hong Kong to transform forever the formerly sleepy rural area. The result of almost 20 years of field work by the authors, Chinese Village, Global Market shows how outcomes are shaped by a number of factors such as path dependence, social structures, economic resources and local entrepreneurship.

    China Urbanizes: Consequences, Strategies, and Policies
    Saich, Anthony J., and Shahid Yusuf, ed. 2008. China Urbanizes: Consequences, Strategies, and Policies. World Bank Publications. Visit Publisher's Site Abstract
    Over the next 10-15 years, China's urbanization rate is expected to rise from 43 percent to well over 50 percent, adding an additional 200 million mainly rural migrants to the current urban population of 560 million. How China copes with such a large migration flow will strongly influence rural-urban inequality, the pace at which urban centers expand their economic performance, and the urban environment. The growing population will necessitate a big push strategy to maintain a high rate of investment in housing and the urban physical infrastructure and urban services. To finance such expansion will require a significant strengthening and diversification of China's financial system.

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