Politics and Change in Guangdong Province.

Guangdong Province is in the forefront of change in the People's Republic of China. Not only was it among the first to undergo the major economic reforms in the drive for modernisation initiated under Deng Xiaoping, but it was one of the first two provinces (Fujian was the other) to establish Special Economic Zones (SEZs) on an experimental basis. It was also in the forefront of experimentation to update the local administration in the drive for efficiency. More contentiously, many see Guangdong in the leading pack pushing for a greater degree of autonomy from the centre. The province has the fastest economic growth rate in the People's Republic of China with a Gross Domestic Product (GDP) which doubled in the period 1980-1990. Indeed, many of the questions relating to China's future, and no doubt some answers, are to be found in the study of the politics of Guangdong. Within the broad framework of China's future in relation to political developments and the question of regionalism, federalism or disintegration, Guangdong and its behaviour might provide some crucial clues to future trends.

Guangdong, has a marked sense of what the Chinese would call 'difang zhuyi' which has contributed to the identification of loyalty to a geographical unit other than the nation-state alone. Historically, and largely because of its geographical location, the province established its horizons across the sea looking to the West as well as to the imperial governments to the North. Linguistically it has its own language, Cantonese which is markedly different from other Chinese 'dialects'.. There is some dispute as to whether Cantonese is a language or a dialect. What is certain, however, is that Cantonese is a language in so far as it when spoken it is unintelligible to Mandarin (Putonghua) speakers. However, in the written form there is little difference., and which is far more commonly spoken, than the official national language, Putonghua. Personal identification, although subordinate to the all embracing Chinese nation, is sufficiently distinct and different to allow legitimate reference to the Cantonese people. Indeed, there is some truth in the Chinese proverb that, `the mountains are high and the Emperor far away' when applied to the attitude of the Guangdong people looking to their neighbours far to the north. Economically, a long tradition of trade with Asia and the West, a robust entrepreneurial spirit and a willingness to embrace new opportunities, was only briefly stifled by the establishment of the People's Republic of China in 1949. That economic dynamism was, however, among the first to express itself in the major reforms begun by the Chinese leadership in Beijing in 1978. With the acceleration of economic reforms there were to follow changes in the administrative structures, a change in the nature of accountability to the central government on matters relating to economic reform and a recognition of the need to find a new political relationship with the central authorities.

Guangdong Province is in the southern part of the People's Republic of China, (approximately longitude 110E-117E and latitude 20N-25N). Moving from west to east, it has land borders with Guangzi, Hunan, Jiangxi and Fujian provinces. To the south lies the South China Sea with Hainan Province situated off the south-west tip of Guangdong. Finally, the British administered territory, Hong Kong, (until 1997) lies on the eastern estuary of the Pearl River. Macau, the Portuguese administered territory, (until 1999) is on the western side of the same river. The national capital Beijing (Peking), is 1,887 kilometres from the provincial capital of Guangdong, Guangzhou (Canton). The total area of Guangdong is some 177,901 square kilometres, larger than England at 130,439 square kilometres. There is some 2,400 kilometres of coastline bordering on the South China Sea.

The population of the province has been increasing rapidly over the last ten years from 56,810,000 in 1982 to an estimated 63,489,500 in 1991. The population grew partly by natural increase, but more markedly by a migration of the population from both the surrounding provinces and those in the north. For example net migration increased the population by 1.25% in 1978 rising to 2.14% in 1991. Total population density is 356.88 per square kilometre. However, population is unevenly distributed with nearly 10% living in the provincial capital, Guangzhou alone. With the rapid economic developments in the province concentrated in the lowlands of the south, on or around the Pearl River, it is hardly surprising that there has been a drift of population from the less developed areas concentrated in an inland crescent of the province which stretches north-west to north-east. Most of the population are primarily Cantonese although there are important non Cantonese groups, the most important being the Hakka.

There is little question that the Cantonese in Guangdong have had a long association with the outside world. In terms of economic activity much of the history of the province has been far more outward looking than other provinces. Seaborne trade between the Pearl River Delta area and Indochina can be traced to the fourth century, from India in the fifth and from Arabia in the sixth. Consequently Guangzhou became, from the fourth century onwards, the most cosmopolitan and mercantile of all Chinese cities. Extensive trade with Europe came somewhat later with the arrival of the Portuguese in the sixteenth century (obtaining a lease on Macau under tribute to the Chinese in 1557), and the British in the second half of eighteenth century. Despite opposition from the Qing (Ch'ing) Dynasty (1644-1912) British interests dominated, with the consequence that China was forced to cede an area of Guangdong, namely Hong Kong Island (1842), to the colonising power. Also, after 1842 the whole of Guangdong province was subject to increasing economic intrusion by the West under agreements forced upon a reluctant central government in Beijing. Guangdong, in general, and Guangzhou, in particular, throughout the nineteenth century remained a centre of trade with the outside world, much of which was channelled through Hong Kong.

Such intimate contact with the European powers, by now firmly established in Guangdong, led to the recognition by many in the province of the need for political change. The dynamism of the West, with its markedly differing political and economic ideas, was in stark contrast to the obvious shortcomings of the late Qing dynasty. That dynamism, allied to the humiliation of the Chinese people by the colonising powers, was to produce many local leaders agitating for radical political reform, not only for Guangdong, but for the whole of China. The ideas for reform were often championed by Cantonese who had travelled abroad, many of whom had received a Western education. In particular, Sun Yat Sen, the founder of the Chinese Republic, was Cantonese. Indeed the revolution itself, which was to topple the Qing dynasty, was largely funded and centred originally in the province. The drive by the Guomindang (Kuomintang) to unify China under its leadership (The Northern Campaign 1926-1928) began in Guangdong province.

With the victory of Mao Zedong in 1949, Guangdong was largely cut off from its traditional contact with the West. External trade with China (excepting that with the Soviet bloc), which had begun to revive following the second world war, collapsed with the establishment of the American embargo shortly after the outbreak of the Korean War. After that, increasing party interference through a centralised bureaucracy and a vertical administrative socialist system of economic control stifled local and provincial initiatives. That combined with such disastrous policies as the nation wide Great Leap Forward (1958-1961) and the Cultural Revolution (1965-1969) had a profoundly negative influence in the Province.

With the death of Mao Zedong on 9 September 1976, the stage was set for major reforms in the PRC that were to have profound effects upon Guangdong Province. The Four Modernisations were made official policy and included in the party constitution and state constitutions on 18 August 1977 and 5 March 1978, respectively. Hua Guofeng's vision of the means to achieve economic modernisation failed to reach their objectives. His ideas for reform were effectively subordinated to those of Deng Xiaoping and his moderate supporters. Guangdong was fortunate to have, as provincial party secretary from 1974, Wei Guoqing who was a close ally of Deng. Furthermore, in 1979 Xi Zhongxun and Yang Shangun, who sided with Deng, became the leaders in Guangdong. It would be mistaken to suppose, however, that Guangdong province had a major effect upon the decision to modernise as this was a primarily central government decision.

In the same year, the central government decided to implement special policies that were to allow for greater flexibility to two provinces in particular, namely, Guangdong and Fujian. Both were in Southern China with Guangdong looking to the Hong Kong connection and Fujian facing Taiwan across the Taiwan Strait. Both also had a tradition of emigration. These emigrants still maintained links with their provinces and might prove a rich source of investment from abroad. It was, therefore, no coincidence that these were chosen, as the policy of interior-orientated investment at the expense of the coastal regions had proved both costly and inefficient.

In 1979, Guangdong, in distribution of Per Capita Industrial Output by Province (percentage of national average), had fallen compared to some of the other provinces in the People's Republic of China. Dali Yang commented in his article that, "Between 1957 and 1979 the per capita industrial output of five of the 11 coastal regions declined". Conversely, the main beneficiaries had been many poorer regions of the Western and Central Region provinces. However, growth rates averaged 8.9% in gross agricultural and industrial output value against an average of 9.8 national growth, with the emphasis on heavy industry and agriculture at the expense of light industry. Guangdong just before the introduction of the four modernisations was ranked seventh and eight respectively in G.D.P. and National Income. In 1979 the province was to increasingly benefit from the reforms introduced, so much so that it moved up the league table to first and second during the 1980's.

The policy of economic reform led to a major review of the administrative structures by which the province was governed. The old administrative and political structures inherited in 1978, quite simply, would not have been able to accommodate the needs for effective economic modernisation. It is instructive, for a moment, to look at the areas of economic change in more detail and to analyse how these nurtured growing requirements that led to further demands for reforms, particularly in the administration of the province.

Equally significant was the tilting of the balance over the investment strategies from the centre to the province. Financial contracting systems, including those with foreign interests, were reorganized, again with the province having a major say in these matters. The sharing of foreign exchange revenue was a matter of consultation between Beijing and the Province itself, with Guangdong increasingly retaining large balances on an expanding base. General fiscal revenue for the balance of remittance to central government and retention in the province worked most markedly in favour of Guangdong.

As far as Guangdong was concerned, the relationship with the outside world was of great significance. This was to constitute what was to become known as "The Open Door Policy". Decentralisation of foreign trade, with the right of local officials to conduct business, was actively encouraged. This policy, although hesitant at first, soon bore fruit. Between 1983 and 1987, the value of Guangdong's exports doubled. In 1988, overseas exports increased by a further 38%. That trend, despite a brief hiatus after the Tiananman Square massacre, continued to burgeon into the 1990's. If a comparison is taken between the years 1950-1978 and 1979-1988, there was an increase of 260% in total exports. Detailed figures from 1991 show total exports trebling in the five years from 1985 to 1990. The period 1990-1991 alone showed a 30% increase.

In 1988 Guangdong attempted to liberalise even further, with a report submitted to the central government arguing for state control over the economy to be reduced to a guiding role only. That request, in combination with the arguments between the reformists and conservatives in Beijing, was to remain unresolved in the brief period prior to the Tiananman massacres. Li Peng and Yao Yilin the more conservative of the leaders, wished to slow the rate of economic growth to some 6%. One of Guangdong's strongest allies in central government, Zhao Zyang was purged. The result, albeit temporary, was a victory for the conservatives which resulted a slow down in growth, with Guangdong having to reduce investment, and subject themselves to greater macroeconomic control from Beijing.

The reformists, with Deng Xiaoping at the head, reentered the fray in 1992, championing the acceleration of reforms with a growth target of at least 10%. It was no coincidence that Deng chose Guangdong province to promote his policies. In January 1992, he visited Guangdong with its booming towns and the Special Economic Zones, and praised it as a model for the rest of China. In the National People's Congress in the Spring of 1992, Deng was triumphant and Guangdong was set for even faster growth based on a high degree of economic autonomy. Deng's economic policy of rapid growth was directly supported by the Guangdong authorities. Zhu Xenlin made two major policy speeches in March 1992 both praising the pace of economic reform espoused by Deng. Indeed, the province was quick to respond to Deng's encouragement suggesting just how much they had been champing at the bit. In March 1992 a major new set of economic initiatives were announced. The SEZ's, the Pearl River Delta and areas adjacent to the Zhu Jiang Delta were told to speed up reforms and encourage even more investment from the outside world.

The Special Economic Zones (SEZs) in Guangdong are of great significance. By far the most important is Shenzhen (adjacent to Hong Kong and 327.6 sq. kilometres), the much smaller Zhuhai bordering onto Macau (121 sq. kilometres) and Shantou (52.6 sq. kilometres situated some 300 kilometres east of Hong Kong on the coast of Guangdong Province). Hainan, established as an Administrative Region under Guangdong in 1981, was upgraded in 1988 to a Province in its own right and therefore falls outside of the ambit of this chapter.

The SEZs, are an innovative administrative unit of the governmental structure of the PRC. They were established to help in the Four Modernisations, specifically, as doorways through which twoway traffic could pass between China and the outside world. The basic idea, still operative, was that foreign business, joint ventures and the use of foreign capital, technology and techniques could be introduced in the SEZs. This would allow for the benefits to percolate into the rest of the province and the country, without the more disruptive effects that might arise from their wholesale introduction. In this sense the SEZs were experimental workshops in new managerial, and even governmental styles.

The results of these reforms have led to a startling transformation of the SEZs. Economically, Shenzhen, by far the most significant of the SEZs, has outperformed even the most optimistic expectations of the early 1980s. A rather amusing new maxim in China is that 'There is nothing a Pekingese won't say, nothing a Shanghainese won't wear, nothing a Cantonese won't eat and no money a Shenzhenese won't earn'. Certainly figures seem to bear out the entrepreneurial skills present in the SEZ. Its Gross Domestic Product has increased by an annual average rate of 50% per year since 1980, reaching RMB.17.4 billion (US$3.16 billion) in 1991; exports over the same period have climbed by an annual average of 75% to US$3.4 billion. Wages for an unskilled worker are some RMB. 500-700 per month compared with RMB. 150-200 in the Pearl River Delta. In the fiveyear period 1991-1995 the plans were for an annual GDP growth of 17% and an increase in gross industrial output of 16.5%. That projection was revised upwards following Deng's successful call for a 10% growth in the national economy.

General economic growth in Shenzhen, however, has not been without political and social costs. Corruption has undoubtedly increased in both the private and public sectors, and private and industrial rents have increased enormously. The population has grown dramatically, from 70,000 in 1978 to an estimated two million legal residents (and 500,000 illegals) with the concomitant strains on the health, housing and educational infrastructure. Inflation is eating away at the standard of living and there are disturbing signs of the growth of `sweat shops' as well as marked differentials in levels of pay. Prostitution and vice are also areas of growing concern. In 1994 a series of accidents serve to highlight the problem. Illegal structures have collapsed killing those inside, safety precautions have been totally ignored and a series of disastrous fires has burned down factories. All these factors have led to dissatisfaction in Shenszhen that, although muted at the moment, could in the longer term lead to a degree of political alienation between the government and important sectors of the governed.

There have been attempts to design an administrative system that meets the requirements of Shenzhen, more suited to the changing circumstances. The executive is elected by the local people's congress and confirmed by the centre. The SEZ itself is under the formal authority of the State Council, and not the Guangdong Provincial Government. However, it should not be assumed that the local Shenzhen officials are without a degree of power and influence. They have lobbied regularly to allow greater autonomy for the SEZ and have met with considerable success. This applies not only in the strict economic sphere where power of decision making has rapidly devolved, but also to other areas of administration. The process culminated, after intense lobbying in Beijing and opposition from Guangdong officials, in the granting of legislative powers to the Municipal People's Congress, a privilege hitherto reserved to provincial governments. Examples of where Shenzhen is pressing for a different set of legislative procedures, include: stock market rulings more attuned to the West; the further easing of border controls with Hong Kong; and, also, the introduction of further restraints upon movement into the SEZ from other parts of Guangdong. Much of the pressure for change has come from the business and finance communities in Shenzhen who have transmitted their demands to the local authorities and through them to Beijing.

Guangdong province, outside the Special Economic Zones, has also undergone a whole host of governmental reforms since 1978. All have been introduced in response to rapid changes taking place in the Province itself. Prior to 1978 there was only one prefectural level city, namely Guangzhou. Other areas were prefectures directly under the provincial government. Within the prefectures the organisation was as sub-divided into county, city, commune, brigade and production team. This form of government was more attuned to the days of Mao. It was inefficient, over-centralised both at province and national level and led to a lack of economic coordination between the urban and rural areas. It was also over-hierarchical and ignored the needs of horizontal and integrative planning. With the four modernisations demanding a more streamlined, efficient and responsive local administration wholesale reforms were introduced. These reforms took place throughout the 1980's culminated in the major changes which took place in the 1988 reorganisation.

Now Guangdong Province is reorganized so that all the old type prefectures, (which are still to be found in many other provinces) have disappeared. The units in 1993 consisted of a total of twenty prefectural level cities and 6 County level cities. There were sixty nine counties, and three autonomous counties. (The latter being for the minority groups and directly controlled by the provincial government.) At the lower level to the county was the town administrative unit.(PUT GUANGDONG PROVINCE ADMINISTRATIVE DIVISIONS MAP AND THE ACCOMPANYING TABLE HERE)

The clear advantages of the new organisations are easily identified. Divisions are simpler and conform more clearly to economic function. The distinctions between the rural and urban areas are less marked, thus allowing for a smoother transition as industrialisation and commercialisation progress in the province. Horizontal linkages encourage cooperation, bureaucratic delay is reduced and information flows are more efficient. Integrated planning is improved and points of decisionmaking more easily identifiable.

The broader provisions for local government were outlined in the 1982 State Constitution of the People's Republic of China. In Article 30 the administrative framework was divided into three layers of government, namely provinces, autonomous regions and municipalities directly under the Central Government. Under the Provinces (of which Guangdong is one), is the creation of autonomous prefectures (PLCs in the case of Guangdong), counties, autonomous counties and cities. Counties are then subdivided into townships, nationality townships and towns. (PUT STATE STRUCTURE OF THE PEOPLE'S REPUBLIC OF CHINA HERE.

In each unit there are provisions for congresses and local government organs. The local congresses above the level of county are allowed to establish standing committees. From the county level upwards there is the indirect method of election. That is, deputies to the Guangdong Peoples Congress, directly under the control of the central government and county People's Congresses, are elected to office by the people's congresses by the next lowest level. At the county level and below there are direct elections by constituencies to office. The terms of office are now five years, except the lower echelons which are limited to three years.

The lower congressional levels are designed specifically for consideration of local economic and cultural development and the development of public services. At the level of county and above the function of the legislative branch is to examine and approve the plans for economic and social developments, the budgets of their respective administrative areas and the plans for their implementation. There is also the clear provision that at provincial level, the making of local regulations is permitted --- but that they must not contradict those of the national constitution and must, when proposed, be reported to the Standing Committee of the National People's Congress for the record. Furthermore, the requisite local people's congresses elect, and have the power to recall, governors and deputy governors, or mayors and deputy mayors, or heads and deputy heads of the lower congressional echelons.

The executive organs of government at the provincial level are outlined in Articles 105-111 of the State Constitution. The chief executives are, in descending administrative units, governor, mayors, county heads and town heads. They are designed for the administration of `work concerning the economy, education, science, culture, public health, physical culture, urban and rural development, finance, civil affairs, public security, nationalities affairs, judicial administration, supervision and family planning in their respective administrative areas; issue decisions and orders; appoint, remove and train administrative functionaries, appraise their work or punish them'. In the event of a conflict the next and higher level of government has the power to impose its decisions. On a hierarchical ladder the line of authority moves up, at least constitutionally, inexorably to the highest level at central government namely the State Council.

There is little question that the trend in both local government, in the congresses in Guangdong (partly as a consequence of the administrative reforms mentioned above, and partly because of rapidly changing attitudes within the province) has led to an increasing level of autonomy at all levels, even though there are variations in the degree of autonomy enjoyed by different geographical areas. It would be inappropriate to assume that provincial government takes kindly to undue interference, particularly in those areas it sees as of local concern, from the central government organs, as will be discussed later in this chapter.

Unlike the major administrative reforms undertaken in Guangdong since the Four Modernisations, the changes in the party structure have been much more modest. Power still flows in a downward direction from the centre to the province. Each upper level ensures that the lower levels observe the directives sent to them. (PUT CHINESE COMMUNIST PARTY ORGANISATION HERE) Statements emanating from top political cadres looking to increase the legitimacy of the party by introducing structural reforms have not been associated with any real action. Granted, some changes was made in 1984, when a degree of decentralisation of personnel management of the Party took place, with the Central Committee and other Party Committees enjoying nomenclatura authority over only one level down the hierarchy. (This meant that Beijing directly controlled the appointment of key provincial posts in Guangdong but not appointments at the lower levels.) Granted, attempts were made to professionalise the cadres, establish clearer objectives for the Party in the new economic environment and improve the efficiency of the Commission for Discipline Inspection at Provincial and County level) Granted, Li Peng, in a speech on 1 October 1991, stated that `China is implementing the reform of the economic and political structure. We think that the reform of the economic structure must be commensurate with that of the political system'.

Nevertheless, the political reforms enacted were in the administrative sphere outside the party rather that in the party itself. This position was reenforced by the experience of the Soviet Union, where the collapse of party authority led, in the eyes of the Chinese hierarchy, to the chaos that has ensued. That experience was made even more urgent by the Tiananman incident, which brought to a screeching halt any tentative moves to reduce party dominance. The nightmare of loss of control by the central party still haunts the leaders. Any attempts to allow other parties to gain effective influence, any loss of authority by the Party, any deviation from ideological directives, were given short shrift. Even three years after Tiananman, the amendment to the Party Constitution adopted on 18 October 1992 made allowance for the economic changes by entering the theory of `building socialism with Chinese characteristics', but no consideration of the devolution of party power.

No reference to reorganisation, party modernisation or devolution of power was considered. Instead the emphasis at the Thirteenth CPC Central Committee, from which the constitutional amendment emerged, was on improvement of work style within the prevailing structure, economic modernisation and the elimination of corruption. To achieve this was the call for concerted efforts from all party members, Communist Youth league members, workers, peasants, intellectuals, cadres, people's armed forces, democratic parties mass organisations and even patriots with no political affiliations to strengthen ties with the masses. Indeed far from looking towards a more relaxed style of control, the theme was party discipline, strict observance of the party line and adherence to the Four Cardinal Principles.

How successful the Party has been in imposing its authority in Guangdong is another matter. As will be seen later, the provincial party members at the centre are not without influence. They have combined with other provincial leaders at the central level to press their case for lessening of economic constraints. They allied with Deng to continue the economic reforms when they were under question from factions at the higher levels of the Party. Equally significantly the local party members worked with other areas of government in the interests of Guangdong province forming an alliance with the emerging economic reform pressure groups. Whilst rarely challenging the ideological dictates from Beijing, in many circumstances their application of those directives has been lukewarm when not really approved. (Good examples, in this context, are in the response to the Tiananman incident and the treatment of dissidents, the same could be said of the central decision in 1989 to slow down growth rates in the province and the attempts by Guangdong to circumvent such moves)

With many of the cadres at all levels coming from Guangdong itself, and given the reformist nature of those cadres, it is hardly surprising that they have sometimes circumvented in action that which they approve of in words. Equally significant are the signs, certainly in the lower echelons of party cadres of a marked lack of enthusiasm for political work and indoctrination. Despite attempts to inculcate dedication and to impose discipline success seems to be limited at the grass roots. Finally, as will be seen, the masses in the province are more concerned with other and more pressing matters than party ideology and control.

The Pearl (Zhujiang) River Delta has long been the most affluent area in the Province. It has, of course, the navigable river that divides Hong Kong and Macau, is situated close to the South China Sea, has a relatively good communications system, and, as indicated earlier long historical and cultural connections with the outside world. The early choice of Guangdong province as an area with special privileges, outlined in the Four Modernisations programme, benefitted the area enormously. Its early start gave the impetus for further benefits in February 1985 when the cities and counties of the inner delta were amalgamated into a larger unit termed the Pearl River Delta Economic Development Zone. Within that Zone were four cities, Foshan, Jiangmen, Zhongshan and Donguaan and twelve counties. In October 1984 Guangzhou was made into an open coastal city and it was granted provincial level economic power in 1984. In essence in both cases it built upon special tax and other incentives to attract further outside investment and export opportunities.

The results of administrative changes discussed earlier, combined with the growing economic and fiscal privileges, were to result in the phenomenal economic growth of the coastal zones. From lagging behind the Shenzhen SEZ they quickly took on a momentum of their own, not least because, unlike the SEZs, more local officials tended to hold positions of power (the SEZs were much more under the control of central appointees). These local officials had an unofficial network of mutual connections, not only in the Province, but increasingly with Hong Kong and even in Beijing. This situation helped to cut down bureaucratic delay, attract investment, facilitated cooperation between horizontal and vertical decision making groups and fostered continual contact between the government officials and private business.

The more hilly and mountainous area which forms 60% of the land area of Guangdong, with just over 40% of the population, is on the other hand, markedly different from the Pearl River Delta. Partly because of its geomorphology, less developed communications and its distance from the major centres of economic development it has not shown the same degree of resilience as other regions in the province (it still only produces 21% of the total income). The preponderance of the poor is to be found here in the rural areas. If regional distribution of rural per capita net income in 1990 is taken as a guide the situation becomes clearer. In the Inner Delta Area the rural income is 1,360 yuan compared to 845 yuan in the hilly and mountainous regions. Even more marked is the disparity between income in the cities or economic zones where the figure is 2,535 Yuan. In simple terms the average person working the land in the mountainous region is earning only 35% of the counterpart in the cities to the South and the gap is widening.

The provincial and central governments have attempted to address the problems which income disparity brings in its train. Various and complicated plans to rationalise the system, get rid of the pre-modernisation communalisation and encourage different agricultural and forestry programmes were largely unsuccessful. The incomes of the residents in this area continued to show a relative decline. Improvements were patchy at the best when compared to the richer areas of the lowlands. Although there was some attempt to transfer some resources into the area from the region of rapid growth in the province (mostly under pressure from central government) through various policy initiatives, success was limited.

The migration has had major political effects in both the lowland and highland areas. In the former case many unskilled workers have flooded south, helping to exacerbate the shortage of housing, education and hospital provision, unemployment, and contributing to a surge in crime, vagrancy, prostitution and corruption. At the same time inflation has risen to dangerous levels with all its associated problems. The old economic system and many political controls imposed prior to 1978 have largely disappeared with the new entrepreneurs showing little if no interest in ideological matters. The workers are more concerned with wages and material goods. The result is a general culture apathetic to major political interference from outside the province. Control by the old party cadres, the unit and the old bosses in the state factories has withered away, or is in the process of doing so, at an ever faster rate. The ability of the party to regulate information flows is diminishing. The party has also to convince the growing non agricultural population that unrestrained growth, and the widening gap between agricultural and industrial workers, are threatening economic and political instability. In the mountainous areas depopulation caused by the movement of young people from the villages, and the loss of authority of both village elders and party cadres in the old agricultural system, are taking their toll.

What can be seen is the development of new patterns of identification, more divorced from the old ideas of loyalty to ideology, the traditional communist party orthodoxy, or, as will be seen later, on undue subordination to central government when it is seen to conflict with provincial or local interests. Pressure groups, not least those centred on the emergence of new entrepreneurs, are increasingly involved with the promotion of such policies that benefit their sectoral concerns. Access to decision-making provincial centres and officials, both party and bureaucratic, are increasing daily with arguments presented being listened to sympathetically. Impatience with red tape, anxious to promote rapid economic expansion, annoyed by major attempts at perceived unwarranted interference from certain quarters in the central decision making nexus in Beijing, is a hallmark of these pressure groups. This trend is likely to become more vocal, albeit in restricted circles, should Beijing embark on a course perceived as detrimental to rapid economic growth in the Province.

There are also signs that the workers in Guangdong province in general, and in Shenzhen in particular, are looking beyond the party, to assume a more positive role in the protection of their interests. The traditional function of the All-China Federation of Trade Unions (ACFTU) has always been that of control and interest representation on behalf of the central government and party. It is increasingly the case now that the more reform minded union officials hope to see it develop as an organisation to support workers. In 1988 a new charter was accepted by the Communist Party. It clearly stated that in the case of a strike the role of the union was to represent the interests of the workers in negotiations with the employer and not merely to act as spokesmen for the government. In the rapidly developing areas of Guangdong and the SEZs, where private enterprise is paramount, there is no question that the workers are looking to improve wages and in particular working conditions. It appears, therefore, as if two seemingly contradictory trends are emerging.

On the other hand, many factories in the rapidly developing areas are notorious for their poor safety record and lack of social security provision. In fact the poor working conditions as indicated previously were clearly demonstrated by the disastrous fire in a Shenzhen toy factory in 1993. In total the death toll in industrial accidents for the whole of China was 11,600 in the period January to August 1993, an increase of 112.9% in the period over the previous year. Although figures for the province are difficult to locate there is little question that the rise is even more pronounced in Guangdong. Local agitation in response to the increasing casualty rate led to the sending down of investigatory teams from the All-China Federation of Trade Unions to inspect safety conditions. With inflation eroding salaries, poor working conditions and a declining safety record, agitation on behalf of the workers is increasing. Whether the ACFTU will provide the leadership, and will be identified by the workers as the legitimate negotiator on their behalf in the future, or whether other informal actors, who are fairly insignificant at the moment, will appear, remains to be seen. At present an estimated 70% of all joint venture factories are not unionised at all. On the wider front a large number of ad hoc labour organisations have cropped up in Guangdong. Despite Chen Ji, the ACFTU deputy policy research director, protestations that, 'China has no independent unions at all and doesn't need them', it would appear that some activity is taking place. Han Dongfan, a Hong Kong based mainland labour activist calling for the reform of Trade Union laws, stated that if,'workers don't have their own unions to represent them, who else can truly represent their interests?'. Unless the ACFTU can rid itself of it quiescence, and unless the conditions in the factories are markedly improved, there is fertile ground for the growth and expression of independent labour organisations in the future.

Other groups in Guangdong are also gaining in influence, if not to the same extent. Some peasants are suffering from a fall in income, compared with their counterparts in the urban areas, and are increasingly concerned about unfair taxes, rising land prices, inflation and corrupt officials. Most of these are concentrated in the less developed parts of the province. They have increasingly become disillusioned with the central government, who they feel have ignored their interests, and the provincial and sub provincial authorities, who they feel are no longer providing those services that they once provided. Other peasants, however, in the rapidly developing south are making large profits out of the sale of land for housing and industrial complexes. The latter category has little to complain about and tends to side with the provincial authorities in the push for economic growth.

In the field of education the autonomy granted to academics has led to their setting up alternative proposals for the governance and economic and social development of the province. It is instructive to note that in 1987 thirty full time scholars left their academic positions in the liberal arts faculties around the province to form "Guangdong Soft Science Co.", an independent think tank primarily involved in social and economic analysis for foreign and domestic companies. Just one year later Zheng Yan Chao, a high ranking academic in the Guangdong Academy of Social Sciences, openly advocated China's need to break with traditional Marxist thinking arguing that new ideas were needed to be encouraged to enhance the nation's production forces.

Religious organisations, mostly Roman Catholic and Protestant, are proliferating in Guangdong province and are actively offering a differing and contrasting set of loyalties to those offered by the Communist Party. The local authorities have waxed and waned in their attitude and behaviour towards these non approved religions organisations. Since 1978 the authorities have been more tolerant of the growth of "house churches" but have occasionally cracked down. In 1983 one of the most famous Christians in Guangdong, Lin Xiangao (known as Pastor Lamb in the West) had his church temporarily closed down, but was then allowed to reopen. In 1988 the Religious Affairs Department of the Guangdong Provincial Government issued a document named the `Stipulations on Administrative Management of Religious Activity Venues in Guangdong Province'. Its provisions were that religious organisations were obliged to register with the government to conduct religious services. These new regulations were employed, after the Tiananman incident, to try to rein in Pastor Lamb who had refused to register. In October 1993, there were further raids on unregistered places of worship, although it was thought that these were in response to the failure of China to host the Olympic games. However, despite these crackdowns, there is very little question that the officials in Guangdong are far more tolerant of the Christian denominations than most other provinces. There are few, if any, underground churches and the degree of persecution is far below that of many other provinces.

Equally, another potential pressure group, namely the student pro-democracy movement found it more advantageous to work with, rather than against, the local provincial government. When, for instance, the central government in Beijing was suppressing the pro-democracy movement with undue force, in Guangdong there was no bloodshed and no martial law. Those few dissidents who were arrested were released without charge or having suffered short sentences. This was despite tens of thousands taking to the streets after the declaration of martial law in Beijing on 20 May 1989 and despite the barricading of provincial government buildings for twelve days. In fact, the mood of cooperation between the provincial officials and the students led to agreements to demonstrate only in the evening so as not to disrupt traffic. Most significantly was the slogan chanted by the students that was very much in tune with the position, before and since, of provincial officials, "Stabilise Guangdong, protect the fruits of reform". After the crack down in Beijing, and the concomitant pressure upon government authorities to detain dissidents fleeing from the capital city, it is thought that Guangdong officials acted slowly enough for 300 or so to be smuggled out of the country.

It would seem, therefore, that there is a greater inclination for emerging powerful, or potentially powerful, interest groups to work more with, than against, the provincial authorities. In turn many in the provincial government are more tolerant, more liberal and more sympathetic towards these emerging groups. The authorities support those who are helping economic growth, are tolerant of those who do not challenge stability and turn, for the most part, a blind eye on dissident groups as long as they do not go too far.

Economic and political change is also being increasingly encouraged by forces outside of the province not least from the territory of Hong Kong. The symbiotic relationship between the territory and Guangdong has become more marked almost by the day. Guangdong has been the recipient of huge investment from the territory which accounts for over 80% of the total. Wage rates and land costs have led to a huge movement of Hong Kong's manufacturing base across the border, where it is estimated some three to four million workers are employed by Hong Kong business. By 1990 Hong Kong/China trade had exceeded HK$400 billion which amounts to a fiftyfold increase since the introduction of the four modernisations. The close family, clan and business links between the inhabitants of Hong Kong, who are overwhelmingly Cantonese, has seen the cross border train movements of persons into Guangdong province increase from some 2.2 million per annum in 1977 to 38 million persons per annum in 1992. Some sixty thousand Hong Kong businessmen are now in Guangdong Province bringing with them the values, beliefs and practices of the territory which, in turn, are more in tune with Western commercial, business and financial norms. The Hong Kong dollar circulates freely in Shenzhen and Guangzhou and is often the currency of choice for business and investment.

Contacts between the authorities in Hong Kong and Guangdong are proliferating at a dizzy rate. Whereas in 1978 cooperation between the authorities was largely restricted to formal and sporadic contact on such questions as the return of illegal immigrants, and the supply of foodstuffs and water supply, the last twelve years have seen regular contact and communication in a host of areas caused initially, and primarily, by the growth in economic relations and fostered further by the reductions in border controls and the concomitant need to encourage functional cooperation. Such functional areas as Immigration control, Customs control, corruption and law and order are subjects of regular contact and discussion on an increasingly reciprocal basis. Delegations from parallel organisations regularly make cross border visits for briefings and joint planning in such diverse areas as the development of the stock market in Shenzhen, harmonisation of business and financial legal practices, comparative public administrative practices and academic exchanges. At the same time many businessmen from Guangdong province are working in Hong Kong either in their own businesses or on secondment to firms in the territory.

Formally, the constitutional relationships for Hong Kong after it reverts to the sovereignty of the People's Republic of China stipulates that it is to be administered as a Special Administrative Region (SAR) of the PRC under the overall control of the Standing Committee of the National People's Congress. The SAR is guaranteed a high degree of autonomy, with very distinctive institutional structures, a major divergence in the roles of the judicial branch and in the criminal and civil law, active and competing political parties and interest groups and the provision for freedoms formally denied to other provinces and regions in the PRC. Within the constitutional framework Hong Kong is clearly different and separate from any administrative or formal political structure in Guangdong.

Nevertheless, in reality, the two systems, are moving towards markedly increasing functional cooperation in major areas of mutual concern. There are no indications that the process will be reversed in the future as the economic links are becoming indissoluble. As Guangdong's growth relies in no small part on the goodwill and continued involvement of Hong Kong, so does the future prosperity of the territory lie firmly with the PRC in general, and Guangdong province and the Pearl River Delta in particular. The border, for economic purposes, is permeable to a degree never dreamt of but twelve years ago. Administrative practices and procedures, although different, are beginning to show signs of limited convergence with the practices in Hong Kong as a general example that their counterparts in Guangdong are inclined to follow.

Another increasingly interesting political development is the fostering of relationships between the provinces. The centripetal forces encouraged in the pre modernisation period has been undermined by a degree of centrifugalism between the fast growing provinces on the one hand and the laggards on the other. The forces of disunity and unity have a strong precedent in the history of China itself, a fact made hardly surprising by the sheer size of the country and its geographical, cultural and linguistic diversity. Such differences between regions and provinces have been further marked by the encouragement of inter provincial cooperation in the economic field and between the provincial governments. As vertical control was undermined in the administrative reforms within Guangdong province to be replaced by horizontal cooperation, so did the same general trend manifests itself in inter-provincial relationships. Major reforms were introduced which either lessened or abandoned central monopoly over agricultural goods, procurement and sale of industrial products, commodities and the wholesale commercial system. Trade between Guangdong and the provinces, not only at provincial government level, but at city and county level also, and largely independent of central government, burgeoned. Some indication of this can be seen from the following. In 1988 a "Liaison Centre for Central and Southern China Economic and Technical Cooperation" unit was set up in Guangzhou. By 1985 Guangdong had signed 2,409 agreements and contracts on economic and technological cooperation with twenty provinces, cities and autonomous regions, with a total investment of RMB 2.273 billion. That figure increased to 6,781 agreements with other provinces and units by 1986. In this way Guangdong helped to guarantee its supplies of food and raw materials. It set up joint enterprises in other provinces, established production and sale basis in other provinces along with marketing and maintenance networks for Guangdong's own enterprises. Inward investment from other provinces into Guangdong also took place so that other provinces could establish export channels, market their products in Guangdong and establish their own marketing and maintenance networks.

Feeling left out there is a degree of annoyance in the poorer regions expressed by the local governments and keenly felt by the population at large. Friction has been experienced by the intense competition for raw materials between the richer coastal areas, and Guangdong in particular, and the central and western regions who are the suppliers and who want higher prices. This resulted in an outbreak of protectionism and the non delivery of raw materials to the richer regions of the south despite the agreement to do so. In fact it was admitted by one official that `The current wave of protectionism is the worst in the last 40 years'.

At the same time the mutuality of interest has led to a major surge in cooperation, although within a competitive framework, between the richer coastal areas, in the perceived need to safeguard their interests against any unwanted incursions from central government. Whereas the local units are clearly specified as subordinate to the central authority in the Constitution, there is nevertheless provision for "giving full play to the initiatives and enthusiasm of the local authorities".

It follows that in the formal sense central government can overrule legislation by the local units, impose decisions upon them and negate any polices felt to be inappropriate. National plans and policies decided at the centre are applicable to all the local units and they must abide by them. However, since the introduction of the Four Modernisations, there is clear evidence that the rapidly modernising provinces have increased their informal power of decision making, particularly in the economic sphere, at the expense of the centre. There is, therefore, a clear mismatch between the informal powers of the local units and the formal constitutional relationship, leaving a grey area which the local units have been quick to exploit.

Such exploitation has taken various forms. One is taking advantage of the support afforded by Deng in his drive for modernisation thus increasing legitimisation for greater autonomy. Deng, in his attempts to outflank the conservatives, actively sought and procured the support of Guangdong, Shenzhen and Shanghai officials thus mutually strengthening each others position. The power of the provinces was even further strengthened by their increasing representation in the highest organs of decision making. Xie Fei, the Guangdong Party leader joined the Politburo in 1992, along with the CCP provincial secretaries Chen Xitong (Beijing), Jiang Chunyun (Shandong) and Wu Bangguo (Shanghai Municipality). At the level of Central Committee two of the Guangdong CCP deputy secretaries and the Governor of Guangdong were full members and two vice governors were alternative members. Similar numbers were to be found in the other coastal provinces.

Within the province there has been the appointment of reform oriented leaders, increasingly from among local cadres. Both the First Party Secretary Lin Ruo and the Governor Ye Xuanping, appointed in 1985 were from Guangdong province. This trend of local appointments was repeated after 1989, when despite the reshuffles caused by Li Peng, both Xei Fei, a local cadre and Zhu Senlin, the former mayor of Guangzhou were appointed as First Party Secretary and Provincial Governor.

The push for greater autonomy by Guangdong and the emphasis on localisation of government and cadres has not, as some observers have suggested, been in the direction of overt refusal to accept the overall authority of central government. On the question of ideological policy the provinces have been at least vocally supportive of the centre. Such administrative reforms as have been introduced by the provinces have been approved by Beijing. The relationship between the party and the state apparatus is still hierarchical vis a vis the provincial level, although weakened, although it is clear that central government control at the lower levels of provincial government is reduced.. Recently the new financial and tax reforms, introduced in January 1994, attempting to take from the rich provinces and distribute to the poorer, so necessary if the central government is to keep credible central control, were accepted, albeit grudgingly, by Guangdong province. Anti-corruption drives, law and order campaigns, anti- western cultural drives thought up at the centre are given lip service support, although in practice such support is often luke warm at the best. (Even here, however, the Mayor of Guangzhou Li Ziliu argued that speculation and profiteering were necessary under certain conditions). Probably, any attempt to impose major ideological initiatives that might hamper economic growth would probably meet little approval by provincial officials, as the ability of the central party hierarchy to initiate and sustain mass mobilisation campaigns is no longer present.

What, therefore, is taking place is most probably a resetting of the relationships between Guangdong province (and indeed the other rich provinces) and the central government. A relationship where power is brokered with the weakening of authority from the centre, but sufficient deference paid from the local unit for the system to continue to operate. This process is likely to continue since economic modernisation is at the heart of government policy. Whether some kind of federal system with a more explicit division of power enshrined in a constitutional framework is likely to evolve is a subject of intense debate. Such a legal development would go a long way to recognising the emerging de facto powers of Guangdong, and other provinces, and reduce the uncertainties and frictions that are at present expressing themselves.

What is almost certain is that Guangdong in particular, and the rapidly developing coastal states in general, are not looking towards the break up of the sovereign state. Evidence for that is quite simply not present. There is a large difference between a powerful local identification with region, allied to dislike of undue interference from the centre, and a fullblown attempt to break away from Beijing. Despite the stresses and strains in the central-provincial relationship, a partnership still exists. That partnership is changing in so far as the previously junior partner is demanding greater consultation and freedom to operate, but it is still a partnership.

There is little question that the whole of the People's Republic of China is engaged in a bold experiment of reform. Within the general framework of that reform, Guangdong is one of the leading provinces. It held much of the initiative throughout the 1980's and does not look as if it will lose it in the 1990's. Indeed, with the return of Hong Kong to the PRC, with investment continuing to flood in to the province, with the obvious overall success of both the economy and the administrative reforms, the situation looks promising. Positive attempts are being made, albeit slowly, to come to terms with the changing political environment, both within the province and in its relationship with central government. Local elites, both political and economic are emerging, who, while not challenging the overall authority of the centre have increased their power base both in the province and at the centre in Beijing. There is no question that pressing problems in the social environment are likely to express themselves as the economy continues to expand. Indications seem to imply that new forces, divorced from overt party identification, are growing in strength, and will probably continue to do so in the future. They will be highly critical of any attempts to divert growth in the province by the imposition of a clamp down from central government. Other pressure groups will press for more rights such as the rights of workers and the rights to greater religious freedoms. The provincial government has responded with a degree of tolerance not often shown in other parts of China. Attempts by the central government to stamp down to hard on these groups could well lead to social disturbances, a fact recognised by the authorities in Guangdong. Whereas the provincial government may recognise the need to help the other poorer provinces, where unrest is more evident, it will do so reluctantly if it leads to unwelcome levels of taxation or the bleeding away of resources. The possible contradiction between the perceived national needs and those of Guangdong mean that the national government has to find a compromise position. Push Guangdong, and the other rapidly modernising provinces, too hard and there may be outright opposition. Refrain from attempting to relocate resources and the poorer provinces, starved of funds and support could explode.

Whatever the relationship with the central government, one thing is certain. There is considerable agreement between the provincial government, the administration and the vast majority of the population of Guangdong, that market orientated policies should continue to evolve. The marked success of Guangdong since the Four Modernisations has led to government officials predicting entry into the classification of one of Asia's little dragons. There seems little reason to dispute that claim.

Shenzhen was the first place in China granted legislative powers to the Municipal People's Congress. A former Mayor of Shenzhen, pointed out that both the development of market economy, legal system and democratic institution would have to progress at the same pace. He believed that, by the operating of the unique position of the SEZ, Shenzhen should be the experimental workshop of innovation in providing a legal structure for a market oriented system. People's Daily (Overseas), 23 March 1993, p. 4, (Translation).

Guangdong was the first province to reform the labour allocation system thus allowing greater freedom for enterprises to recruit labour in different regions of the province. This new policy helped to integrate the segregated labour market inherited from the old centralized labour allocation system. At the same time, the labour force was granted the freedom of choice in employment within the province. Nevertheless, this policy further intensified the trend of labour migration. People's Daily (Overseas), 13 February 1993, p. 5. (Translation).

There have been major attempts to control the influx of rural labourers from outside the province. Since February 1993 potential immigrants from other provinces have been limited. In 1993 the number was fixed at 150,000. Guangdong has also set up labour offices in the provinces of Sichuan, Hunan, Jiangxi, Henan, Hubei, Guizhou, Yunnan and Guangxi provinces. China Daily, 30 December 1993. It is questionable, however, whether this has been successful in its application as anybody who has been to the Railway stations in Guangzhou will attest.

On the question of control over information, large areas of Southern Guangdong are tuned into the Hong Kong channels. Also Star Satellite Television has made large inroads into the Province. It will be interesting to observe whether the Chinese Minister of Radio, Film and Television, Wang Feng's decision to control receivership of satellite television to Chinese citizens on the grounds that, `Such control is beneficial to the cultivation of patriotism among our citizens, safeguarding the superior tradition of the Chinese race, promoting socialist civilization and maintaining social stability' will have much effect. South China Morning Post, 16 October 1993.

In November 1993 a disastrous fire at the Zhili Handicraft factory in Shenzhen's Kuai Tong district led to the Guangdong Authority introducing new worker safety regulations. In June 1994 a toy factory, being illegally constructed, collapsed killing eleven people and injuring another twenty seven. Such an event suggests that the safety regulations are being disregarded by the entrepreneurs and not enforced by the relevant authorities. For an interesting article on this problem, see Far Eastern Economic Review, 16 June, 1994, p. 32-36.

six months of 1993, six Policy Branches and 38 Departments made a total of 166 official visits to their counterparts in China. Over the same period 130 groups involving nearly 1,000 officials came to Hong Kong. Contact and communication in this field encompassed such areas as banking supervision, infrastructural planning, policing, customs and ICAC contacts and staff exchanges. See Address by the Governor The Right Honourable Christopher Patten at the opening session of the 1993/94 Session of the Legislative Council, 6 October 1993. Official Record of Proceedings, Hong Kong Legislative Council, 1993. Sections 141-142.