Merchant Positioning Of Chinese Local Officials

On the morning of January 21st, thousands of merchants in the wholesale shopping area of Kunming's downtown district were not forced to make reasonable compensation because of the forced relocation of the government. This has made the pattern of economic growth and urban transformation again become the focus of public opinion.

Kunming is not special.

Hatred and eye-catching, but looking at it, hatred is not special. The pattern of efficiency priority is the manifestation of local government officials' behavior patterns since the middle of 90s. Officials from all provinces, municipalities, counties and even townships across the country are different versions of hatred. Even if there is no hatred, other officials are in charge of the executive power of Kunming, and they may still carry out large-scale demolition like the enemy. Because the existing institutional environment is most suitable for this type of official growth.

The core incentive system that gives rise to hatred officials is the competition between officials. Many scholars have used the "competition among local governments" to explain the rapid economic growth of China over the past decade, but the competition here does not take place between governments. It is more about local officials' competition for promotion. This is totally different from ordinary market competition. It is carried out in order to attract higher authorities' attention and obtain promotion qualifications. Over the past decade or so, economic growth has been regarded as the most important political task. The higher authorities mainly use the growth rate of GDP and fiscal revenue as the main indicators for assessing junior officials, and officials have also competed fiercely around this "trophy".

What kind of competition strategy will officials choose? In economics, officials prefer investment in the three GDP components of investment, consumption and exports. First of all, investment is the most effective. The short term of office officials also strengthened the investment preference of local government officials. At present, local government officials usually fail to complete one term prescribed by law and will be mobilized to other posts. This leads to short-term anticipation of officials and tends to look for ways to increase economic performance most effectively in the short term: investment. Therefore, over the years, all levels of government officials are scrambling to take various preferential policies to attract foreign investment. Economic experts have been discussing the problem of high investment in the economic structure. The problem is that this distortion is not caused by economic factors, but rather by political structure.

In coastal areas, the main direction for officials to attract foreign investment is to attract external investment in industry and technology and cultivate export-oriented industries. The advantage of the mainland is not obvious, the most is to receive industries transferred from coastal areas. Mainland officials have to create opportunities for themselves. The main purpose of large scale demolition and urban transformation is to achieve economic growth and create investment opportunities artificially. In fact, the phenomenon of large-scale demolition and violent demolition in the whole city is common in the central region, such as Anhui, Hunan and Shijiazhuang over the past few years.

The game between power and right

The reason why the government is keen on demolition is another very secret reason: through demolition, the government has revitalised its own assets, and the value of land can be realizable. Today, the sale of land by local governments is a huge source of income. If we do not relocate, we will not get the revenue.

Driven by the arrogance of power and the greed of businessmen, the government will not take account of the endogenous order formed by the market and society when it is being demolishing or reconstructing. The transformation of the snail Bay wholesale market is a typical example. The market has been formed for more than 20 years, and is one of the ten wholesale markets for daily commodities in China. The market property rights are legally owned by more than 20 enterprises including state-owned restructured enterprises, Hong Kong funded enterprises, Taiwan funded enterprises and private enterprises. There are more than ten thousand existing businesses and nearly one hundred thousand employees. It has become an organic part of city commerce, social order and even cultural ecology. Closing the market will have a huge impact on the rights and interests of more than ten million people.

However, in the eyes of local officials, these rights and interests are nothing compared to his grand blueprint for the city and the achievements of attracting foreign investment. The Kunming authorities decided to move the new market to a place more than 20 kilometres away without considering whether such a broken move would ruin the life of the market. Of course, in the process of relocation, the government also makes full use of its coercive power and its domination over the land. Businesses face the double identity of the government: they either accept the provisions of the government, or if they do not accept it, they do not have any normal channels to express their rights and interests, and they can only adopt the way of group events, which will immediately be described by the government as disturbing public order.

There is no doubt that the government took advantage of such power in its hands to demolishing and reconstructing the cities. Indeed, it created countless investment opportunities to carry out its strategy of attracting foreign investment, and indeed created a very impressive achievement: the rapid growth of the local economy and the corresponding growth of government revenue. The process of creating official achievements is also likely to bring some benefits to the public. For example, urban infrastructure has improved, and even people's income may increase with the success of attracting foreign investment.

Scientific Outlook on Development needs real practice

However, this mode of economic growth is ultimately a strategy of gain and loss. In the process of attracting foreign investment and urban transformation, due to the lack of rights and interests of all parties, being placed in an unequal position, there is no fair procedure for bargaining between the parties concerned. The government even uses coercive power to intervene in the transaction, resulting in such activities that some people's rights and interests are seriously and systematically violated, while others enjoy privileges. As a result, the process of economic growth is always accompanied by the imbalance of income distribution, creating new social contradictions and generating new discontent among some people.

The problems of Chinese society are actually caused by this growth pattern, and the economy has grown, but the tension and conflict in the society are intensifying. The high level put forward the idea of "Scientific Outlook on Development" to try to correct this bias. But in reality, the effect is not obvious, and local officials remain unchanged. The crisis of economic recession has given local officials the opportunity to make bold use of this growth pattern.

Faced with the forklift which runs across cities, facing the angry residents and merchants on the streets, people need to think about a fundamental question: what is the responsibility of the government? What is the nature of the government's ownership of land and other resources, and how to restrict the power of officials?