SPECIAL ISSUE
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Davis Michael C.
    The Case for Chinese Federalism
    in Journal of Democracy , Vol. 10, n. 2 ,  1999 ,  124-137
    China presents many faces to the outside observer. The dramatic economic reform processes of recent years have contributed to its diversity. What is less understood overseas is that this diversification has been accompanied by a marked tension in the relationships between the Beijing government and its assertive peripheral and regional communities. Throughout this period, China has resisted fundamental political reform, clinging to an authoritarian and ostensibly unitary system that emphasizes maintaining central political control. This need for central control has important implications for the prospect of political liberalization and democratization in China. Beijing's political intransigence notwithstanding, decentralization and rampant regionalism have accompanied economic liberalization. There is an even greater contrast between the authoritarian center in Beijing and the trend toward liberal democracy in the highly developed peripheral communities of Hong Kong and Taiwan. These developments have produced tremendous pressure on China to loosen the grip of its authoritarian government and to rationalize its territorial political structure. In view of the structural tensions China is encountering in dealing with Hong Kong, Taiwan, and the mainland regions, a combination of federalism and confederalism would seem to offer a promising alternative path forward. (This path may eventually also help to resolve the status of areas in western China like Tibet, Xinjiang, and Inner Mongolia that have been promised autonomy and share peripheral status with Hong Kong and Taiwan, but the special circumstances of these communities will not be addressed here.) [End Page 124] It is doubtful whether China's unitary system can adequately address the political-reform issues on the horizon. The unitary system has sometimes been elevated to the level of a cultural myth. It holds that China has always had a unitary territorial system, which is culturally ingrained in the Chinese identity. This myth, however, appears to explain more about the historical imperatives of maintaining central control than it does about Chinese culture. In ancient times, much of what is now Chinese territory in Central Asia and elsewhere on the periphery was made up of tributary states or protectorates, where central control from the Chinese imperial capital was often minimal or nonexistent. Over several thousand years of war and conflict, these peripheral communities, as well as forces emerging from the Chinese heartland, would frequently compete with the regime at the center for control, often splitting China into competing kingdoms. Since these regimes all featured autocratic or authoritarian rule, the myth of a unitary state under strong central leadership emerged. According to this myth, a regime that relinquished strong central control would be perceived as weak and have its territory seized or its government toppled by its opponents. In the communist period, the unitary myth was reinforced by the Marxist-Leninist commitment to dictatorship and democratic centralism. In the 1980s and 1990s, the historical tradition of a unitary system has presented problems for advocates of political reform in China, as it is difficult to imagine such a high degree of central control in a large democratizing state. The heavy-handed tactics that Beijing has employed to maintain its unitary system have also presented problems for its foreign partners, who are continually admonished to stay out of the many areas that China classifies as its internal affairs. These concerns point to the merits of federalism (on the Chinese mainland) and confederalism (with peripheral communities) as a mechanism for addressing China's territorial and political problems. In the present discussion, the term "confederalism" will be understood simply to signify a higher degree of subunit independence with a more enforceable status. Confederalism often reflects a coming together by agreement--as in the case of the European Union--and the subunits may even have substantial international status (in the European case, even state status) or the right to opt out. Federalism, on the other hand, will be understood to include a lesser degree of local autonomy and a stronger center with broader authority and more pervasive integrative institutions. In the United States, federalism evolved over time from a states-rights orientation to a substantial level of central power. In a federal system, the right to opt out may be excluded and the subunits may be allowed little or no role in international relations. Beijing has recently adopted policies that move in contradictory directions. It has sought to maintain the myth of a unitary political [End Page 125] system, but has also pursued policies favoring multiple legal jurisdictions (with its peripheral communities) and decentralization (on the mainland), while providing few umbrella institutions to promote integration and unity. The main sources of whatever unity exists are political blustering and party networking from the center, hardly a formula to inspire loyalty and confidence. Three aspects of this unfolding historical drama exert pressure on China to restructure itself: 1) the tensions and contradictions evident in the central government's attempts to contain democracy in Hong Kong; 2) Taiwan's reluctance to take unification seriously in the absence of a more reliable political formula; and 3) the tensions over political reform and China's territorial political structure, as reflected in the debate over regionalism on the mainland. The Transition Process in Hong Kong Many of the tensions between an authoritarian center and a liberalizing region have been most visible in the Hong Kong transition process. As the prototypical example of China's "one country, two systems" formula in practice, Hong Kong's experience has wider implications. The 1984 Sino-British Joint Declaration promises Hong Kong self-rule and a high degree of autonomy, along with the essential elements of liberal constitutionalism: democracy, human rights, and the rule of law. The legislature is to be chosen by elections, and the chief executive by elections or consultations held locally. Approximately 16 liberal human rights are promised, and it is now widely accepted that the clauses on the rule of law ensure that constitutional judicial review of legislation will be practiced locally. The Joint Declaration also promises Hong Kong the right to conduct its own "external affairs" in regard to commerce, culture, sports, the arts, science, and related areas. China retains power over Hong Kong's defense and "foreign affairs." The Joint Declaration stipulates that its requirements be included in the Hong Kong Basic Law, a document that was promulgated in April 1990 after a lengthy drafting process controlled by Beijing.1 The welcoming of Hong Kong back into the Chinese fold on these terms has fundamentally altered the nature of the Chinese state. In essence, Beijing has recognized the international legitimacy (for certain purposes) of two territorial governments in China, thereby diminishing the unitary character of the Chinese state. A regional government has been elevated to a partially confederal status by being given the right to demand compliance with the guarantees provided in the Joint Declaration. This partial confederal status embodies a much lower level of integration than normally obtains in either unitary or federal systems--in effect, recognizing two constituent legal systems and no overarching one. [End Page 126] The liberal democratic commitments in the Joint Declaration, along with Hong Kong's democratic challenge, have been perceived as politically threatening by the authoritarian center in Beijing. The Chinese leaders have sought to contain this threat at every turn. The Basic Law, while conforming to most of the requirements of the Joint Declaration, reflects China's very conservative posture toward democracy. It provides for Beijing's appointment of the chief executive, and establishes a complicated and restrictive electoral formula for the Legislative Council.2 Other provisions in the Basic Law severely limit the powers of the elected Legislative Council. In effect, only the government can propose legislation, at least where expenditure or government policy is involved. Even when legislative amendments to government bills are proposed, they must be passed, in a split voting system, by a majority of the 30 functional-sector legislators. This strips the elected Legislative Council of power and bestows it on an appointed chief executive who answers to Beijing. China's containment policy has been directed against the prodemocracy camp in Hong Kong. Before the June 1997 handover, popularly elected democrats were excluded from nearly all of China's appointed transition bodies. After the handover, these democrats refused to join the appointed provisional legislature. China has warned that Hong Kong must not be a base of subversion, especially since the 1989 Tiananmen-related demonstrations in Hong Kong (where a million demonstrators led by the prodemocracy leaders took to the streets). At that time, leaders of Hong Kong's prodemocracy movement were specifically accused of subversion. At the heart of all these policies is the principle of maintaining the current mainland system, both as an authoritarian regime and as a unitary state. Accordingly, Taiwan sees Hong Kong as an example of the sort of tension that would be likely if it entered into any relationship with the mainland. Were China to undergo fundamental political and structural reforms, the current policy of containing democracy in Hong Kong would no longer be necessary and the tensions noted above would be reduced. If reforms are not pursued on the mainland, however, tensions between an authoritarian center and a liberalizing region will only increase as democratization slowly moves forward in Hong Kong. Taiwan If unification with Hong Kong has created difficulties for Beijing, unification with Taiwan would stretch the mainland's authoritarian unitary system to the breaking point. To date, Taiwan has responded coldly to the mainland's offer of unification on the "one country, two systems" model. Although both sides favor improved legal arrangements for their blossoming trade and other private-sector relationships, [End Page 127] neither side has made any commitments that would substantially meet the other's concerns when it comes to formal political status.3 The mainland authorities insist on Taiwan's submission to one China, dominated by the current government in Beijing. They seek to impose this view on China's foreign partners, as was evident in President Bill Clinton's articulation during his 1998 visit to China of the U.S. policy of "three nos"--no support for Taiwan's independence, no support for Taiwan's entrance into state-based international organizations, and no "two-China" policy. Beijing is willing to concede a slightly higher degree of autonomy for Taiwan than for Hong Kong, allowing the former local military defense and "certain rights in foreign affairs," in addition to the other elements of local self-rule and control over external affairs enjoyed by Hong Kong. But Beijing has been extremely reluctant to allow Taiwan the security of substantial autonomy in international relations. In any case, Taiwan has shown no confidence in the "one country, two systems" formula. It has pursued a policy of democratic reform at home, while seeking to enhance its international status through practical diplomacy. In negotiations with Beijing, it has limited its overtures largely to trade and various private exchange arrangements, insisting that democratic reform on the mainland precede further steps toward unification. Recent surveys in Taiwan show that a substantial majority favors this policy. Taiwan shows little current interest in unification. The mainland's proposals offer Taiwan little incentive to respond favorably to unification. People on Taiwan undoubtedly feel a historical affinity with Chinese civilization, but they view the current regime on the mainland with trepidation. While the benefits of more secure trade with the mainland and the promise of noninterference in Taiwan's external trade relations are attractive, they are clearly not sufficient to persuade an economically successful democratic community to surrender its independence to an authoritarian power. Any successful unification arrangement must give Taiwan confidence about its status in a reconstructed Chinese state. Some flexibility on Beijing's part as to what unification means seems imperative. Regionalism on the Mainland In considering the possible reconstruction of China's unitary system, we must also understand how regionalism on the mainland encourages political federalism. First, it should be noted that regionalism is not the only force propelling China toward political reform. The diverse social and economic interests created by economic liberalization encourage a search for formal channels of interest representation and conflict resolution. The democratization that this implies may ultimately be the [End Page 128] primary force that encourages federalism. But regionalism is a related force that must also be reckoned with. As a result of China's economic reform policies, the economy has decentralized at a rapid rate, but constitutional structural change has lagged behind.4 In many respects, decentralization and regionalism appear to have produced a form of economic federalism in mainland China.5 With the central government increasingly overburdened, regional initiative has had to supply the guidance that the economy needs. Steven Solnick points out that in China's developing market system, the initial decentralization of the economy involved the transfer of control from central planners to local officials, creating a class of local cadreentrepreneurs.6 By making it lucrative for these officials to remain in their posts, China at least initially avoided the large-scale theft of state property by local officials that took place in Russia. Under such conditions, however, the operation of regional power suffers from the lack of openness and democracy. The mixing of government and business encourages corruption and market interference, including regional protectionism, local interference with courts and other legal institutions, backroom dealing, mistreatment of nonlocal trading partners, environmental degradation, out-of-control bank lending practices, and a general failure to secure equal rights.7 Many of these problems are exacerbated by a judiciary that is often corrupted and captured by regional forces. Various fiscal and tax problems have also emerged. The reform of the state-owned enterprise (SOE) system is seriously burdened by enterprise-based housing and retirement systems rooted in the Marxist past, making it difficult to allow unproductive SOEs to fail. Accordingly, regional and local governments continue to be confronted with the seemingly contradictory tasks of managing and regulating state enterprises. In the context of these difficulties, people will demand greater accountability from local, regional, and national governments, and this requires political reform. In recent decades, Chinese policy makers, scholars, and dissidents have been attracted by ideas of decentralization and even of federalism as they consider how to advance reform and unification. The era of reforms began in the late 1970s and early 1980s when local agriculture was decollectivized. Policy makers then encouraged the decentralization of various sectors of the industrial and commercial economy as a way of fostering greater initiative by the emerging generation of local cadreentrepreneurs. The goal was to loosen the grip of central planning on the economy by, in effect, "federalizing" it. This increasingly decentralized market system has generated fiscal problems, however, giving rise to further reforms aimed at partially federalizing the tax system.8 Economic federalism, however, has not been accompanied by the formal constitutional changes needed to facilitate the performance of [End Page 129] political tasks vital to a federal system. The problems noted above reflect these structural deficiencies. The lack of democratic institutions that can involve the populace in the search for solutions has been the most serious failing. Beijing has instituted village-level elections, which sometimes encourage genuine choice, but the people have not been granted freedom of association, and strong opposition voices are still not tolerated. Popular elections are not tolerated above the village level. The persistent demands of economically successful regions in China's heartland for more reliable local and national governance, even when not explicitly couched in the language of democracy and federalism, pose yet another challenge to China's insistence on a unitary and authoritarian system. Toward a Chinese Federalism What would federalism mean in China? While one can easily construct ideal types of federal and confederal structures that constitution drafters might hope to achieve, it is much more difficult to imagine a path of orderly change that reformers might follow in their effort to democratize and federalize China. Juan Linz and Alfred Stepan identify the chief functions of federalism as either "coming together" or "holding together."9 In the proposal made above for a mix of federalism (for the core of the Chinese mainland) and confederalism (to bring in peripheral communities such as Hong Kong and Taiwan), one can detect stronger elements of "holding together" in the former and "coming together" in the latter. But these are not the only goals that federalism might serve. Chinese reformers are attracted by federalism because it is directly related to democracy. As Linz and Stepan note, it is not meaningful to speak of federalism under authoritarian or other dictatorial systems. Such systems tend to be incompatible with the local or regional self-rule upon which federalism depends. At the same time, merely launching national elections without meaningful democracy at the regional level, as occurred in Russia, may also lead to a failed federalism. One might characterize China's authoritarian decentralization on the mainland as an attempt to achieve economic federalism without democracy. Authoritarian leaders resist political federalism on the grounds that it would be divisive, depriving the center of its last remnants of control. When Beijing is ready to take democratization on the mainland seriously, federalism may facilitate that process. As Stepan points out, the largest democracies in nearly every part of the world are federal. Logically, the notion of popular control suggests units of government small enough to allow voters to influence the decisions that affect their daily lives.10 Federal institutions in a democratizing China should ensure that [End Page 130] politicians have reasons to be committed to the autonomy of their regional subunits while also being solicitous of the interests of the broader political community.11 A fairly standard legislative configuration for a federal system involves a bicameral legislature, with one assembly composed of legislators representing the subunits equally and the other directly elected on the basis of population. Alternatively, a unicameral legislature may include some members who represent the subunits directly. The existence of substantial numbers of local and regional elected offices affords a ladder to political advancement at the national level, thereby encouraging among politicians loyalty to both the subunit and the nation.12 In a federal system, most powers are usually reserved for the regional governments, with further distribution to localities. The federal government should be particularly concerned with the provision of public goods (defense, a unified monetary system, and the like) and with regulating policy areas where the interests of individual regions may be contrary to the larger good of the federation as a whole, or where the interests of subunits are better served by a national policy. In China's case, one such issue would be the creation of a national retirement or social security system to alleviate the enormous burdens in this area now borne by SOEs. The central government should also provide a regulatory framework for commerce among individual subunits and with outsiders. These are areas where the absence of a federal legal and political structure in China has resulted in fiscal difficulties, regional protectionism, suppression of minorities, corruption, lack of economic reliability for outside investors and lenders, and the suppression of information vital to corrective actions. Independent federal courts are also important in addressing these concerns. Federal courts, if not under the thumb of regional officials, can help to integrate the system and to implement federal guarantees by reviewing regional and national laws and official actions for conformity to constitutional and other legal requirements. In a civil-law country such as China, a separate federal constitutional court may be needed to adjudicate questions of constitutional rights and to police jurisdictional boundaries. Local courts can also be employed to foster a commitment to local jurisdiction and laws, within appropriate constitutional constraints. If reformers in China wish to get to federalism in an orderly fashion without a major crisis, then the current economic reforms, decentralization, and moderate political and legal reforms may point the way forward. Democratization should clearly be part of this trajectory. China has already instituted village elections and talks of expanding them to the county and provincial levels. Even at the village level, however, democracy is still limited. There is a great deal of room for interference on the part of the elite, and multiparty contestation is [End Page 131] forbidden. Recent surveys have shown that 60 to 70 percent of local officials in less developed provinces have a "tense" or "relatively tense" relationship with the people.13 China would be well advised to grant broader freedom of association and to encourage the formation of genuine opposition parties. (Unfortunately, recent attempts to register an opposition party, the China Democracy Party, were met with rejection and arrests.) Under this scenario of gradual reform, the National People's Congress (NPC) might initially be retained as the national legislature and the body out of which the national government can be formed, though its size should be reduced well below its current membership of approximately 3,000. Under the present system, the NPC is formally chosen by people's congresses at lower levels of government in a pyramid-like structure. If democracy with direct competitive elections were instituted at the provincial level and the provincial assemblies still chose the national legislature, there would be an incentive for parties to organize on a national level or to form political alliances in order to acquire influence in the national body. China has made other institutional moves that could pave the way toward a federal democracy. It recently signed the International Covenant on Civil and Political Rights, affirming in principle a national commitment to basic rights and freedoms. In recent years, proposals for a constitutional court have also been advanced. A national court system already exists, and it could be restructured to create local provincial courts and federal courts. If Beijing were merely to carry out these steps and to cut back the special status of the Chinese Communist Party, it would arrive at a position just short of formal federal democracy on the mainland. With a national democratically elected body and minimal legal institutions in place, there would be time to consider formal constitutional steps toward federalism. These might include the calling of a constitutional convention, instituting bicameralism, reforming the legal and judicial systems, reducing the size of the NPC, and adopting alternative methods for forming future governments. Similarly, elected provincial assemblies could take the necessary steps to reconstitute provincial governments. This would be a sensible route toward democratization on the mainland. A Confederal Solution A confederal arrangement for China's peripheral communities would provide a reliable umbrella of national laws and institutions under which these communities could be brought back into the fold. Such an arrangement would involve many of the same types of institutions envisioned in the proposed federal structure for the mainland, [End Page 132] but a more limited role for the central government must be accepted. The key question, once again, is how to get there. In offering Taiwan the same arrangement that it granted Hong Kong, plus substantial rights in the area of self-defense and foreign affairs, Beijing has moved toward a confederal formula--though not far enough to attract Taiwan. Beijing's policies still fail to offer an overarching institutional structure for unification that would be acceptable to a democratic community. It insists on political domination of the peripheral communities by an authoritarian center. In response to Beijing's overtures, Taiwan stresses the need for democratization on the mainland and a more egalitarian and consensual cross-strait relationship. China's willingness to concede to Taiwan a high degree of autonomy, combined with this seeming impasse over democratization and the consensual character of any settlement, has led some to raise the possibility of confederation.14 What would a confederal arrangement mean for China? Confederal arrangements commonly involve the coming together of territorial communities by consensual agreement. The purposes of confederation usually include commerce and trade, and may also extend to security, defense, public health, human rights, and monetary issues. Decisions usually require the unanimous agreement of the confederal partners, though, as time goes on and trust is built, this may be reduced to a supermajority requirement for more routine subjects. The operative body for securing such consent may initially be composed of a council with a representative from each partner. While a directly elected legislative assembly or parliament may be employed in an advisory capacity, the representative council is unlikely to concede its final authority. These representative bodies are usually served by some executive authority or secretariat to provide administrative services in drafting and implementation.15 Recent scholarship has especially emphasized the importance of a judicial organ for third-party dispute resolution and for implementing confederal requirements. A confederal judicial body can encourage the penetration of confederal law--both treaty and secondary law--into the domestic law of the subunits and produce a spillover effect from the narrowly economic into other areas of law and politics.16 This reduces the politicization of many issues and allows for incremental change. The European Court of Justice (ECJ) offers a good model. By ordering the direct application of community laws in national courts and accepting referrals for preliminary rulings, the ECJ has encouraged the development of confederal jurisprudence and has helped to constitutionalize and integrate the European system. Furthermore, the routing of member-state complaints to the European Commission before the Commission submits them to the ECJ tends to reduce conflict. To [End Page 133] ensure that members of the court do not favor any one state, the ECJ employs a system providing for secrecy of deliberations and does not issue dissenting opinions. In China's case, some form of confederal arrangement linking the mainland with peripheral communities could contribute to the rationalization of its internal order. China has so far been able to keep its peripheral communities under control (or in the case of Taiwan, to ensure a degree of restraint) through its clear willingness to use force. A democratic China, however, would find it difficult to adopt such a menacing posture. In a sense, then, democratization is now a hostage to the perceived need for forcibly controlling the periphery. This dilemma can be resolved only by coming up with a more consensual unifying arrangement as an alternative to authoritarianism and force. The key here is that the periphery (initially Taiwan, and conceivably later Hong Kong) would not be submitting to Beijing but joining in a partnership--in effect, creating a Chinese political community. Given the great difference both in size and socioeconomic conditions between the mainland and Taiwan, an initial arrangement might confine itself to specifying and policing trade and investment rights. As the mainland democratizes and liberalizes its system and experiences further economic development, confederal jurisdiction might expand to new subject areas by consensus. At first the only institutions might be a joint council, an executive authority, and a judicial body. The council would ensure that all decisions were made by unanimous consent, and the staff of the authority could produce any regulatory material and reports requested. The authority could also investigate official complaints from confederal members before any submission to the judicial organ, which would adjudicate these official complaints and any private complaints referred from the subunit courts. The latter could be referred for preliminary rulings on confederal requirements and jurisdictional conflicts. If the confederal requirements are directly enforceable by individuals in the courts, then the confederal judicial body may contribute to the development of the rule of law in China's subunit territories by offering authoritative interpretations of rights and of jurisdictional and choice-of-law requirements in individual cases. Keeping their deliberations secret and not issuing dissenting opinions would also help to insulate confederal judges from political pressure. If these arrangements succeeded in satisfying both the center and Taiwan, they could be considered as a basis for ensuring autonomy in other peripheral communities.17 Any confederal arrangement must also include an external dimension. The twentieth century has witnessed a dramatic evolution in the role of the nation-state and in the structures and rights of international participation. Traditional nineteenth-century views of sovereign exclusivity have been replaced by an increasing emphasis on international [End Page 134] participation. Since the end of World War II, there has been a dramatic increase in the number of sovereign states, ranging from mammoth countries like China and India to island states with a few thousand citizens. The growth of the international order has reduced the prerogatives of states, and their zone of exclusively internal affairs has contracted. At the same time, a number of territorial communities not formally recognized as states, including Palestine, Hong Kong, and Taiwan, have come to enjoy considerable international status. Moreover, rights to autonomy and local self-rule within states have become matters of international concern. Beijing's official view on the nature of the state and on the boundaries between its exclusive prerogatives and the international order stands in stark contrast to this emerging twentieth-century practice. Applying a nineteenth-century view of sovereignty, the Chinese government is prone to respond to its critics by declaring that its human rights practices and its treatment of domestic autonomous communities are internal affairs. Nevertheless, in practice, it shows evidence of greater flexibility. China has signed various international human rights treaties and has entered into dialogue with other countries regarding human rights. It has also, in effect, internationalized its relationship with Hong Kong by grounding it on an international agreement upon which it invites its international partners to rely. Beijing should recognize that affording an autonomous constituent community a substantial degree of international participation would help to gain its trust in any agreed arrangement. For a confederal Taiwan, this might even include participatory rights normally enjoyed by states. Taiwan's leaders will be reluctant to agree to anything less. The emergence of what has been called "non-territorial global functional space" raises a whole range of new possibilities in international affairs.18 This space includes activities concerned with commerce, the environment, science, human rights, the arts, flows of information, and civil society more generally. The ability of states to attract and regulate such activities depends on the reliability of their institutions.19 In its unification formula, China offers its local partner the power to conduct "external affairs" in this nonstate global channel. Taiwan already operates very effectively in this space. For this reason, China's ability to isolate Taiwan is limited. To attract Taiwan toward unification, Beijing must recognize this international reality. However well a unitary paradigm may have served China in the past, it is proving to be inadequate to address the challenges of the next century. It is too inflexible to meet the needs of a changing and increasingly decentralized economy. It is also the reason why China finds itself torn between the imperative of offering meaningful concessions to induce peripheral communities back into the fold and the fear that such commitments pose a threat to centrally imposed authoritarian [End Page 135] rule. By offering a substitute for this paradigm, the proposal offered in this essay strikes at the root of these problems. If steps are taken in this direction, Hong Kong and Taiwan can become part of the process of finding solutions to China's structural problems and can contribute to the progress of democracy and the rule of law on the mainland. Michael C. Davis is professor of law at the Chinese University of Hong Kong. He is the author of Constitutional Confrontation in Hong Kong (1990) and editor and author of Human Rights and Chinese Values (1995). He has published widely on issues of constitutionalism, human rights, and development. Notes 1. The Hong Kong Court of Final Appeal (CFA), in a landmark decision, recently upheld a generous approach to Basic Law human rights guarantees and asserted the power to review local laws and even examine NPC acts for compliance with Basic Law requirements. (Ng Ka Ling v. The Director of Immigration, Final Appeal No. 14 of 1998, 29 January 1999.) Beijing, however, was angry at the Court's attempt to "put itself above the NPC" and threatened to have the NPC "rectify" the judgment. The Hong Kong government filed an extraordinary motion to "clarify" the judgment on this point. On February 26, the Court granted the motion and restated that it was not putting itself above the NPC and that the NPC was free to "do any act which was in accordance with the Basic Law." This tremendous political pressure exerted on the Court demonstrates Beijing's insecurity about the actions of independent institutions in Hong Kong and raises concerns that judges may become more cautious in the future. 2. The Legislative Council includes 20 legislators directly elected from geographical constituencies, 30 elected by functional constituencies representing various business and professional sectors, and 10 selected by an Election Committee (itself largely chosen by the functional constituencies). In the 2000 election, the Election Committee seats will be reduced to six and the directly elected seats increased to 24. In 2004, the Election Committee seats will be eliminated entirely, leaving 30 directly elected and 30 functional constituency seats. (Hong Kong Basic Law, Annex II.) While the Basic Law, in Annex II, allows for the possibility that full democracy could be implemented after 2007, there is little room for optimism in this regard: Under the Basic Law's electoral framework and the conservative electoral laws enacted by the appointed provincial legislature, the conservative and pro-Beijing legislators and chief executive favored by the current electoral system will be in a position to block such a move. Any change would require a two-thirds majority of the Legislative Council and the approval of the chief executive. 3. The mainland and Taiwan white papers on cross-strait relations published in 1993 and 1994 set forth the basic positions of the respective sides. These positions remain largely intact. See Jean-Marie Henckaerts, ed., The International Status of Taiwan in the New World Order, Legal and Political Considerations (London: Kluwer Law International, 1996) (white papers at 267 and 279). 4. See Arthur Waldron, "China's Coming Constitutional Challenges," Orbis (Winter 1995): 19; Gerald Segal, "China's Changing Shape," Foreign Affairs 73 (May-June 1994): 43-58. 5. Yasheng Huang notes: "Political scientists tend to be legalistically oriented and define federalism as a system in which divisions of responsibilities and power are specified constitutionally. Economists define federalism in terms of administrative levels at which allocative decisions are made." Yasheng Huang, "Central-Local Relations in China During the Reform Era: The Economic and Institutional Dimensions," World Development 24 (April 1996): 655. 6. Steven Solnick, "The Breakdown of Hierarchies in the Soviet Union and China," World Politics 48 (January 1996): 209. 7. See Taifeng Shi, "The Influence of Regional Interests in Chinese Judicature," unpublished paper, 1995. See also Andrew Nathan, "China's Constitutionalist Option," Journal of Democracy 7 (October 1996): 43, 50. Attempts to recentralize monetary control and rein in the bank-lending problems have recently resulted in a policy to reduce the number of branches of the People's Bank, China's national bank, from 26 (one in nearly every province) to nine regional banks. 8. Dali L. Yang, "Reform and the Restructuring of Central-Local Relations," in David S.G. Goodman and Gerald Segal, eds., China Deconstructs, Politics, Trade and Regionalism (London: Routledge, 1994), 59. In the last couple of years, there has been some effort to recentralize fiscal policy, but local officials have defended their fiscal- and economic-policy autonomy from central intrusion, as they did recently in opposing the imposition of a federal fuel tax that would have reduced regional revenue. This was challenged as a reversal of economic reforms; requiring the regions to go to the center for handouts was said to encourage corruption. 9. Juan Linz, "Democracy, Multinationalism and Federalism," paper presented at the International Political Science Association XVII World Congress, Seoul, 17-22 August 1997; Alfred Stepan, "Toward a New Comparative Analysis of Democracy and Federalism: Demos Constraining and Demos Enabling Federations," paper presented at International Political Science Association, XVII World Congress, Seoul, 17-22 August 1997. 10. Larry Diamond notes that decentralization may enhance the efficacy, quality, and legitimacy of democracy. Larry Diamond, Developing Democracy: Toward Consolidation (Baltimore: Johns Hopkins University Press, forthcoming in 1999), ch. 4. 11. Peter C. Ordeshook and Olga Shvetsova, "Federalism and Constitutional Design," Journal of Democracy 8 (January 1997): 27, 33. 12. Peter C. Ordeshook and Olga Shvetsova, "If Hamilton and Madison Were Merely Lucky, What Hope is There for Russian Federalism," unpublished paper, April 1995. 13. Minxin Pei, "Is China Democratizing?" Foreign Affairs 77 (January-February 1998): 68, 81. 14. Jiaqi Yan, "From a 'Centralized China' to a 'Federal China'" (21 April 1995) (conference paper on file). 15. The most noteworthy and successful recent example of a confederation in practice is the European Union, an example where all of these components are in operation. 16. Anne-Marie Burley and Walter Mattli, "Europe Before the Court: A Political Theory of Legal Integration," International Organization 47 (Winter 1993): 41. 17. I have already noted that Hong Kong would fit well in this confederal role. The same may also be said about Macau. If recent overtures between the Dalai Lama and the central government take a positive turn, such a confederal framework might afford a more reliable and less contentious autonomy for Tibet. 18. John Gerald Ruggie, "Territoriality and Beyond: Problematizing Modernity in International Relations," International Relations 47 (Winter 1993): 139. 19. See Michael C. Davis, "The Price of Rights: Constitutionalism and East Asian Economic Development," Human Rights Quarterly 20 (May 1998): 303.
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