The China problem: too many priorities - the WTO-column

"You have to help we with this, this must have your highest priority," says the voice at the other side of a Skype conversation. You might recognize this tone: urgency seems to be part of the Chinese genes and it must be contagious, since also foreigners who have stayed in China for a longer time have this peculiar way of setting other people’s agenda. You work your butt off for a week to help your friend and you call him back a week later. He has already forgotten last week’s priority and new priorities have emerged.

It is not different on a political level.

Because China's public political season is condensed into two weeks per year, you might easily get overwhelmed by the number of priorities emerging from those - otherwise rather boring - sessions. While the direction is guided by this catch-all phrase of a "harmonious society", under that label you see a wealth of issues where China's leaders promise to make a difference. A short impression, not sorted according to importance:

• The reform of the tax system

• the abolishment of the labor camps

• missing: 12 million jobs

• the stiff reduction of death penalties

• the reform of the health care

• the reform of the education

• the reform of the army

• the ongoing reform of the economy

• the eradication of corruption

• attacking IPR infringements

• guaranteeing the property rights in the law

• reversing the deterioration of the environment

• bridging the gab between poor and rich, the country side and the cities

And this is only the domestic agenda. I have not mentioned the active role Beijing in playing in dealing with some longstanding international issues.

I'm not complaining here: all those issues are very important and when China is unable to deal with those major problems, it is heading for even more trouble than it has now. It is partly the legacy of the previous government for whom economic growth had first priority at the expense of legal rights, the environment, the health care and the education. Using that growing wealth to deal with some of the negative fallout it has caused is a long overdue challenge.

But is it going to work?

Traditionally the power of the central government is limited. To really set priorities, just writing a law is not enough: it needs to convince power brokers on provincial, industrial or local level about the importance of those priorities that are being set at a national level. That is always going to be a trade-off. Depending on the interests of those different power brokers, some priorities might prevail over others.

That is also the dilemma of the current priorities: only two or three are going to make it. And what is worse: the real problem that is the basis of many others is not even on the list.

At a meeting of the Singapore based Nanyang Technological University in early March in Shanghai professor Tan Kong Yam gave a nice overview of the real conundrum. According to his estimates a huge part of the fees on land and property stay at a local level, curtailing the power of the central government. Because of that lack of money, the Chinese government is spending - even compared to other developing nations - an appalling small percentage of its GDP to education, health care and social welfare. Household expenditure is therefore slowing down, compared to the savings by companies, because the households have to spend money on education, health care en pensions themselves.

Too much power at a local level, too little leverage on a national level is China's real problem in setting priorities. And since that is very unlikely to change, the central government can only pursue a limited agenda. The question then is, which of those very real problems will drop off the agenda?

Fons Tuinstra