The reality of reform in modern day China

People a lot to say about China at the moment. Many are looking to bring reform to the world's economic over-achiever. But most miss the point. The politics of reform in China have more twists and turns than the Great Wall and the complexities are just as enduring.

Take, for instance, environmental reform. China is one of the world's largest carbon polluters. Many rivers are contaminated and breathing the air in many areas in considered to be like smoking a handful of cigarettes.

But Beijing, it seems, is making an effort. For instance, it has sought to introduce a "green GDP" in which national production estimates factor in environmental damage. It is keen to ensure the 2008 Olympics in Beijing is a showcase of cutting-edge environmental management. It is aggressively pursuing alternative energy solutions to fix its creaking coal-driven electricity grid.

Its are also looking useful. The revamped and re-energized Environmental Protection Administration has scored important points of late, and its leading light Pan Yue (潘岳) has raised the profile of the office.

So, if you want to talk environmental reform in China, you go to Beijing, right? Let's see.

Tim Clissold's 2004 book Mr. China is considered by most to be the definitive tale of the foreign investor trying to make a buck in the post-Deng miracle. But Clissold, in his often doomed and always messy negotiations with company bosses, officials and regulators, almost never spoke with officials in Beijing. It was always those in the provinces: the local mayor, the party boss or the small-time potentate.

This gives the clue to the reality in China.

A deeply embedded turf war between Beijing and local interests has been simmering since the decentralization of the tax system in the early 1990s. Since income taxes from local companies have been shunted into the coffers of local administrators, the boom in China has been paralleled by a tooth-and-claw grab for the tax revenue and political power being generated by local state-owned companies, town and village enterprises and foreign investment interests.

The upshot of this is that even the most glittering of policies to emerge from Beijing are unlikely to be implemented.

As such, environmental reform in China, while seen to be pushed by Beijing, falters as it filters down to the operators outside the central party machinery.

Other are emerging which may compete with those expressed by party apparatchiks.

Widespread unrest, caused in large part by dodgy local government policies over land access, is awakening the masses. Out of this, new political forces are beginning to emerge, as those who organize hitherto unheard-of street marches and protests become bolder.

These forces are engendering greater confidence in other areas. The recent walkout of journalists at the brash Beijing News over an editorial dispute with the central government may be the first of many examples of a new political dimension in China.

Then the burgeoning civil sector. Non-governmental organizations (NGOs) need to be registered and therefore find it difficult to take an anti-government line. But Beijing is seeking to utilize NGOs in a way that is likely to empower them and make it more difficult to control them.

Further, the unofficial presence of such groups as Greenpeace in China -- is set to influence similar groups elsewhere in the country.

Pushing reform is an important enough undertaking to ensure that emerging stakeholders are not ignored. It's one thing to be deceived in China. It's quite another to want to be deceived.

James Rose is Asia-Pacific editor for London-based Ethical Corporation magazine and its Web site, www.ethicalcorp.com.