Subscribe to our newsletter

     By signing up, you agree to our Terms Of Use.


    • About Us
    • |
    • Contribute
    • |
    • Contact Us
    • |
    • Sitemap

    Why Public Institution Reform Is a Poisoned Chalice in China

    A further 10 million ‘iron rice bowl’ jobs are at stake, but the new system will turn employees against one another.

    While reform of China’s vast bureaucracy is generally locked in a stalemate, there has been some progress in reforming public institutions, or shiye danwei. The term is used to describe institutions in the educational, sporting, cultural, and medical care sectors, among them public hospitals and colleges. Since 2011, a large number of them have either been turned into new government agencies or sold off either fully or partially. The remaining ones have been restructured as nonprofit organizations providing public services, such as higher education and health care.

    This year, the government has gone further. At a press conference held by the Ministry of Human Resources and Social Security on July 22, it was announced that a system of contract-based employment would replace the current bianzhi system. The current scheme lists the number of officially budgeted positions in public institutions, for which funding is provided regardless of whether the post is filled.

    The winds of change are therefore blowing through the public sector, and the reform will come as a particularly sharp shock to the academic and medical professions. A further 10 million “iron rice bowl” jobs — cradle-to-grave state positions — are now at stake, while the dual-track employment system, which lasted for decades and clearly defined bianzhi and non-bianzhi jobs, is about to be fundamentally overhauled.

    First and foremost, the reform is supposed to be the antidote to inflexible employment practices, nepotism, internal inequality, deep-seated inefficiency, and unreasonable management costs, all of which are problems within the bianzhi system. In the short term, existing positions will be protected, and only new employees will be subject to the policy change. 

    In the long run, however, most public institutions will be streamlined. Those who currently hold bianzhi posts and consequently enjoy higher income, comprehensive insurance plans, generous pension programs, and greater job security, will find their privileges cut. They will be expected to compete with those who are hired on a contractual basis. Depending on which government department you examine, contractual employees already constitute 20 to 50 percent of total employees, and that proportion will soon expand.

    The exact policy details are still under deliberation, but they have already been cold-shouldered — if not openly opposed — by major stakeholders. This has come about despite claims that doctors and professors will finally be able to charge higher market rates for their services, and citizens will benefit from the introduction of greater competition and efficiency into these professions.

    While doctors and professors are hardly nostalgic for the lifelong employment system offered by the more restrictive pre-reform era regime, they understand far better the distinctive nature of their work than policymakers and citizens do. Their authority as employees arises not only from their knowledge of theory and technology — which already acts as a barrier to many trying to compete with them — but also from their commitment to social values, such as justice, the value of human life, and the importance of empirical research. For these people, the question is how to strike a balance between upholding these values and earning a satisfactory income from their work.

    In modern Western societies, especially the United States, employees achieve this balance by forming trade unions and other professional associations. Individual members are disciplined by standardized codes of conduct, and community pressure ensures that work remains within certain ethical boundaries. The result is a positive paradox, wherein professionals provide marketable services to make money, but simultaneously deny the more vulgar aspects of unrestricted marketization to achieve legitimacy in the public eye.

    For instance, American professors are protected by the tenure system. Once they get through the first six fiercely competitive years, they are given an appointment that lasts until retirement age. In the same vein, doctors also enjoy considerable job security after having completed three to four years of residency at their respective clinics. Any violation of professional codes of conduct, as well as employment disputes, are sanctioned and mediated by the professional community rather than the state.

    In comparison, Chinese professionals are far less autonomous. They are regulated by the state in terms of training, employment, income, and professional development. The bianzhi posts have actually been key organizational mechanisms of state control, which have led employees to sacrifice personal autonomy for the benefits of job security. While some trade unions and professional organizations do exist, they are tightly monitored by the state. Chinese professionals are largely not permitted to self-organize or exercise their own disciplinary codes.

    Under such circumstances, the abolition of the bianzhi system is by no means a blessing. On one hand, Chinese professionals are no longer protected by the state from the possibility of declining markets and consequent unemployment. On the other hand, they lack the necessary organizational powers to unite and protect themselves. As the emergence of any voluntary trade organizations would exacerbate state anxiety over the power of Chinese civil society, the reforms will force many to put their need to make a living above their desire for professional cooperation. Instead of becoming a community of like-minded workers, they will turn against one another.

    Public institutions in China, much like the large corporations in the U.S. that have gradually subordinated lawyers and doctors under their reign, will be able to exercise more discretion in terms of employment, professional responsibilities, and ethical codes. The professionals themselves are left even more powerless: They may have shaken off the restraints of old, but only to release themselves into new and potentially more sinister forms of bondage.

    For instance, Chinese elite universities have poured huge amounts of money into building think tanks in the past couple of years. Even before public institution reform took on a life of its own, university management had begun to hire a considerable number of professional policy researchers on a contractual basis and evaluate their performances via precise quantitative metrics. To guarantee continued public investment, these universities will now capitalize on the reform by reshuffling personnel and sidelining those who express dissatisfaction with the new system. Contractual employment will thus quickly become the only game in town.

    In a nutshell, this is another example of how a well-meant policy reform could possibly go awry. In itself, the policy is neither good nor bad. But when placed in the political context of contemporary China, it may result in the fragmentation of some of the pivotal professions that serve public interests and the demoralization of those who work in them. And what’s more, consumers will also find it more difficult to enjoy high-quality public services as a result.

    That said, Chinese policymakers still have enough elbow room to soft-pedal the final policy or to complement it with other remedies, such as loosening constraints on professional associations or establishing special labor arbitration councils for professionals at different administrative levels. For now, though, professors and doctors can only cross their fingers and hope for the best.

    (Header image: Han Meng/Sixth Tone)