Understanding the role of the central-local relationship in China, and its impact on healthcare policy

China is a huge country with a big territory and an even bigger population. The issue of how to deal with local government is one that has long vexed the central government of every Chinese epoch. Since the establishment of the People’s Republic of China, China has experienced rounds of decentralization and centralization. The central-local relationship has experienced many changes as well. Thus, there is fierce debate over whether China is still a unitary country or whether it has transformed into a federalist nation. The central aim of this thesis is to provide an examination of the nature of the central-local relationship in Chinese governance, and to provide an understanding of how this central-local relationship affects healthcare social policies in China.
Research was conducted cumulatively in three steps. First, it drew a lesson from the variety of literature on arrangement of central-local relations and policy process to build a theoretical context and foundation for this research. Secondly, the research examined whether the central-local relationship in China could be categorized as a federalist system or a unitary system, or whether neither label was suitable. This examination led to an understanding of “de facto federalism”, which provides an institutional description of the central-local relationship in Chinese governance. The examination was also conducted with reference to Paul Pierson’s three characteristics of federalism, namely: reservation of specific powers to constituent units; expression of interests to the centre; and the extent of commitment to fiscal equalization across the states. Thirdly, this research conducted a fieldwork study which included a document study and semi-structured interviews in three different Chinese provinces to examine and explore the nature of central-local relation in China and its impact on healthcare policy.
It was observed that the de facto federalism partly captures the nature of central-local relationship from perspectives such as the extent of local autonomy and the reciprocity mechanism within central-local interactions. However, the central-local relationship in China does have many unique features. It is profoundly influenced by the culture of unity, which seems to be the boundary of any reform in China. Meanwhile, China has a long history of non-institutionalized central-local power distribution, which is the result of a “dynamic” central-local relationship. The central government takes more initiatives to change the power distribution within such a dynamic central-local relationship. Indeed, de facto federalism has been constrained by these features. The rise of the “project mechanism” could be regarded as a sign of this dynamic relation and the central government seems to take more and more initiative when dealing with local governments.