No holiday for China's renegade regions
By Wu Zhong, China Editor

HONG KONG - In an apparent move to safeguard the authority of the central government, the State Council - China's cabinet - last Wednesday issued an urgent circular ordering regional governments to strictly carry out its regulations on public holidays and not to reinstate the "Golden Week" holiday around Labor Day on May 1.

Although it named no names, the State Council's toughly-worded circular was primarily targeted at the Guangdong provincial government. Guangdong had unilaterally announced a day earlier that people in the southern province could take seven days for the 
SUN WUKONG
No holiday for China's renegade regions
By Wu Zhong, China Editor

HONG KONG - In an apparent move to safeguard the authority of the central government, the State Council - China's cabinet - last Wednesday issued an urgent circular ordering regional governments to strictly carry out its regulations on public holidays and not to reinstate the "Golden Week" holiday around Labor Day on May 1.

Although it named no names, the State Council's toughly-worded circular was primarily targeted at the Guangdong provincial government. Guangdong had unilaterally announced a day earlier that people in the southern province could take seven days for the

 

holiday as their spending would help spur domestic consumption.

With Guangdong, China's richest province, taking the lead, many other provinces and municipalities, such as Chongqing, Jiangsu, Zhejiang , Hunan, Henan and Xinjiang, also immediately announced they would seek the central government's permission to restore the holiday. Some even said they would just go ahead with their plans like Guangdong without seeking Beijing's approval. This was what prompted the State Council's urgent ban.

At first glance, this may seem a trivial skirmish between the central and regional governments. But Beijing apparently saw Guangdong's move as an explicit challenge to its authority. In Beijing's eyes, any acquiescence to Guangdong's plan could have paved the way for further decentralization of power, which it views as intolerable.

Centralization is traditionally the core of Chinese political culture. In history, whenever the centralized power collapsed, the Middle Kingdom would fall apart into warring states. In this regard, the period of the Three Kingdoms is but just a brief chapter in Chinese history. This is why, in history and reality, China's power center will always take every effort possible to carefully safeguard its authority.

But a market economy in nature favors decentralization. In its drive to turn its formerly socialist command economy into a market-oriented one, over the past three decades of reform and opening up Beijing has had to let the regions have a bigger say on their local economic affairs. As a result, regionalism has grown. But Beijing will never allow its policies towards national, particularly political, affairs to be challenged, despite the fact that some of its policies have been distorted or circumvented by the regional authorities.

For Beijing, Labor Day is a national public holiday, so how many days are to be taken off is a national affair to be decided on by the center. This why the State Council said in the circular that all regions must "strictly carry out" its regulations on public holidays and "not make any changes on their own initiative".

Feeling the heat from Beijing's reprimand, Guangdong provincial government on Wednesday evening immediately issued an emergency notice canceling its arrangements for Golden Week. Quietly, previous notices about the long holiday were dropped from all the Guangdong government's websites. "No comment," said Guangdong officials when asked by reporters if they had sought Beijing's approval before announcing the arrangement.

After the Asian financial crisis in 1997, the State Council under then premier Zhu Rongji established the Golden Week policy to boost domestic consumption to offset the negative impact on the country's exports. In 1999, the cabinet formally decided to introduce three Golden Week holidays: around Lunar New Year, May 1 Labor Day and October 1 National Day. The first Golden Week holiday started in 2000 on National Day and proved quite effective at stimulating tourism and other related industries.

However, after several years, the public began to complain about problems such as traffic jams, accidents and crowded tourist spots during the week-long holidays. A few years ago, the calls grew louder and some of the Golden Week holidays were scrapped and replaced with one-day holidays.

At the end of 2007, the State Council decided to cancel the Golden Week holiday on May 1, shortening it to a three-day (including a weekend) public holiday. To compensate for this, three traditional Chinese festivals - the Qingming, Duanwu and Middle-Autumn (Moon) festivals - were made statuary public holidays. Last year was the first year spent in China without the May 1 Golden Week.

Another reason for Beijing's prompt action could be concerns that backing down to Guangdong's plan could be seen as an acknowledgement that its original decision to cancel the holiday was wrong. It is rare and difficult for China's power center to admit it has done anything wrong. A quick change of a decision could give the public the impression that it cannot keep its policy constant, and this could hurt its public image.

But it is equally rare for Beijing to publicly veto a provincial government's decision. Therefore, the State Council's urgent circular, a slap on the face of the Guangdong provincial government, shows how upset it was with such an explicit challenge to its authority.

Before Guangdong announced its initiative, some central government departments were already planning to propose to the State Council that the May 1 holiday be reinstated to boost domestic consumption amid the global financial crisis. Even on the day that the State Council issued the urgent circular, secretary general of the National Development and Reform Commission (NDRC) Han Yongzheng said at a meeting that his commission had already sent a proposal to the State Council to extend the May 1 holiday and that the cabinet was considering it, according to China Business News.

The State Council's Development Research Center had made a similar proposal, saying "long-holiday consumption proves effective in economic stimulus".

All signs suggest that the State Council itself was pondering whether the May 1 Golden Week should be reinstated before Guangdong took its surprise move. Now with the urgent circular, the lid seems to have been put on the issue.

This has by no means silenced public controversy over the issue. A day after the State Council issued the circular, a signed commentary on the website of the Beijing-based Guangming Daily, a national newspaper targeting intellectuals, advocated the decentralization of decisions on public holidays. As there are different opinions regarding the restoration of the annual vacation, it said, the decision-making on this should be decentralized. Why not just let the regions make their own decisions according to their local circumstances, the commentary asked.

There is something in the view that Beijing should consider giving regions more autonomy regarding certain affairs. China is a huge country and the pace of economic and social development varies in different regions. But in practice, if Beijing goes too far in decentralization, regional protectionism will run wild, as a popular saying nowadays has it that "wherever decision-making is too highly centralized there is no vitality, wherever decision-making is decentralized there is chaos".

China needs a new structure of government in which regions have greater autonomy to decide on certain affairs, while the central authority is not jeopardized. This calls for political reform, and how to implement it will require great political wisdom.