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November 21, 2020

The pattern of Chinese towns’ leadership and how it may affect pitching to Chinese governments

In the American (and many other European countries’) political system, the leader of a town is elected by local residents. And “from local, for the local” is always a brag-worthy feat of candidates. After all, who knows the best about a town if not a local? Who cares about the true benefit of its residents other than someone who grows up and still lives there?

But things are done exactly the opposite way in China. For one thing, town leaders are assigned by the state or provincial government, not by election. And apparently locality is an extremely scarce feat to come by. I’ve found this possible pattern of “ruling a town with a stranger” some time ago. To prove the concept, I did a random sampling of Chinese towns and their leadership.

Thanks to the internet, nowadays it’s possible to look up the background of most senior Chinese government officials. Therefore I conducted this random sampling. The process is relatively crude, and the sampling size small, not really scientific. But the result says something with shocking percentage of “strangerness”.

This is how it works: I asked my wife for support: open up a map of China, browse through all the towns marked on the map, and name 15 of them that instantly sound interesting to her. The only criteria was “don’t focus on huge cities or just a few selected area”. After that, I look up the background the main officials of those towns, and make a list.

Before presenting the list, a few concepts should be made clear, for better understanding.

  • Each Chinese town has two regulatory systems parallel to each other. The mayor is in charge of administrative works, while the party secretary regulates the political works and human resource management (every member of the government must be politically acceptable by the communist standard). In theory the party secretary is the top leader, because in extreme cases, he/she should have the power to fire the mayor. But in reality it’s more like a draw game: the mayor could hinder the party secretary by many administrative means too.
  • “From” is a key factor in my sampling list. This means the town or province where the person in question is born and brought up. All his “stakeholder”, i.e. most important family members and close friends are there.
  • “Political career” in the list means the part of a person’s career as an employee of a real government organ, on administrative or political inspective posts. Examples of what’s not included in political career are: manager in a state-owned enterprise, engineer in a research lab under Chinese Ministry of Land and Resources, leader of some business association under Chinese Ministry of Commerce, etc.
  • When a person started its career not in any town in particular, but in the party branch or administrative team of a PROVINCE, the start of his/her political life will be marked as “provincial government” in a broader sense. Similarly they can debut from ministries of the state government too.
  • One could start his/her political career in seemingly strange places. For example, if a person becomes the party secretary of a university, he/she is considered to have made a debut for his/her political career in my list.
  • The purpose of my list is to provide support to my speculations. It’s not personal. So I’m not going too far into details. The names of officials, for example, will be completely absent.

So it starts, a list of government officials of 15 Chinese towns that are considered tier-2 (economically major cities and provincial capitals) and below:

Yuyao, Zhejiang Province
Mayor: from Fenghua (Zhejiang Province), political career started in his hometown
Party secretary: from Ningbo (Zhejiang Province), political career started in his hometown

Xi’an, the capital city of Shaanxi Province
Mayor: from Hancheng (Shaanxi Province), political career started in Xianyang (Shaanxi Province) after serving in the military
Party secretary: from Weinan (Shaanxi Province), political career started in Henan Province

Kaifeng, Henan Province
Mayor: from Luoyang (Henan Province), political career started in hometown
Party secretary: from Puyang (Henan Province), political career started in Henan provincial government

Zhuhai, Guangdong Province
Mayor: from Maoming (Guangdong Province), political career started in hometown
Party secretary: from Hunan Province, political career started in Zhongshan University

Guilin, Guangxi Province
Mayor: from Hebei Province, start of political career is a mystery
Party secretary: from Hunan Province, political career started in the Ministry of Forestry

Leshan, Sichuan Province
Mayor: from Nanchong (Sichuan Province), political career started in Qinghai provincial government
Party secretary: from Shandong Province, political career started in Sichuan provincial government after military service

Hohhot, Inner Mongolia
Mayor: from Chifeng (Inner Mongolia), political career started in hometown
Mayor: from Chifeng (Inner Mongolia), political career started in hometown

Cangzhou, Hebei Province
Mayor: from Shijiazhuang (Hebei Province), political career started in Hengshui (Hebei Province)
Party secretary: from Hengshui (Hebei Province), political career started in hometown

Qufu, Shandong Province
Mayor: from unknown, political career started in Jining (Shandong Province)
Party secretary: from Liaocheng (Shandong Province), political career started in Jining (Shandong Province)

Bengbu, Anhui Province
Acting mayor: from Liaoning Province, political started in the Ministry of Agriculture
Party secretary: from Tianchang (Anhui Province), political career started in Hefei (Anhui Province)

Jinhua, Zhejiang Province
Mayor: from Hunan Province, political career started in what’s now reformed into the Ministry of Commerce
Party secretary: from Wenzhou (Zhejiang Province), political career started in Lishui (Zhejiang Province)

Ganzhou, Jiangxi Province
Mayor: from Yichun (Jiangxi Province), political career started in hometown
Party secretary: from Liaoning Province, political career started in Tongliao (Inner Mongolia)

Quanzhou, Fujian Province
Mayor (the only female in this entire list): from Quanzhou, entire political career stays in Quanzhou
Party secretary: from Fuzhou (Fujian Province), political career started in Nanping (Fujian Province)

Xiangtan, Hunan Province
Mayor: from Yueyang (Hunan Province), political career started in Hunan provincial government
Party secretary: from Yongzhou (Hunan Province), political career started in Hunan provincial government

Harbin, the capital city of Heilongjiang Province
Mayor: from Shandong Province, political career started in Harbin
Party secretary: from Shandong Province, political career started in Beijing

Now, in case you are wondering about China’s tier-1 cities, i.e. the “behemoth international metropolitans” that are known to even the most China-unaware foreigners, things are looking a bit different. It should be known that these cities are the spearheads of China’s economic development, and all sorts of economic and political resources are focused on them. They have more job opportunities and average income than any other Chinese city. People from all over the country rush into these four cities for a possibly bright future. “Locality” as a concept becoming meaningless in such places where “locals”, the ones with roots planted there for generations, actually are the minority. In lower-tiered cities, governors are usually parachuted from somewhere else in the same province. But for tier-1 cities, they can be from just anywhere:

Acting mayor: from Henan Province, political career started in the Ministry of Land & Resources, sort of “in Beijing” in geographic sense
Party secretary: from Heze (Shandong Province), political career started in Beijing

Mayor: from Zhejiang Province, political career started in Shanghai
Party secretary: from Zhejiang Province, political career started in Yantai (Shandong Province)

Guangzhou, the capital city of Guangdong Province
Mayor: from Lufeng (Guangdong Province), political career started in Guangdong provincial government, sort of “in Guangzhou” in geographic sense
Party secretary: from Meizhou (Guangdong Province), political career started in hometown

Shenzhen, Guangdong Province
Mayor: from Jiangsu Province, political career started in what’s now reformed into the National Development and Reform Commission
Party secretary: from Jiangsu Province, political career started in Jiangsu provincial government

In summary, my sampling covered 38 leaders in 19 Chinese cities. If we define “local origin” as having grown up or having spent substantial years in the town he/she is leading, only six of them could be considered so: the mayor of Quanzhou, Harbin, Shanghai, Guangzhou, and the twin leaders of Beijing. 15.8% in percentage. Excluding tier-1 cities for their special nature, the “locality rate” will be brought sharply down to 2 out of 30, or 6.7%. And only one of the 38 leaders is female, which could mean in Chinese political world there’s absolutely no such thing as equal rights, not remotely. But that’s not the topic of this post. Let’s forget about it for now.

Why is it so? The most reasonable explanation seems to be that the Chinese communist party is trying to keep officials away from their hometown, or those in which they have vast connections, to avoid the possibility overgrown local forces. The communist party itself came into power by uniting local forces from the rural area six decades ago, therefore it won’t allow others any chance to play the same card against itself. If true, the “stranger rule” is somewhat reasonable, if not a bit too paranoid.

But in such model, how could a town leader genuinely LOVE the town he’s ruling? Or the question could be revised as “how could they care anything about the towns they are ruling”, if we have a look at the common track of Chinese officials’ political careers:

For most town leaders, the career curve usually happen this way:

  1. Start off as a low rank government employee in his/her hometown, or the town of his/her college.
  2. Climb up the hierarchy gradually, all the way up to the director of one of the bureaus directly under the city government.
  3. Further promoted from the seat of bureau director, not into the shoes of his/her immediate leader, but transferred to another town, usually worse economy than his/her original, as a deputy mayor or deputy secretary.
  4. Promoted from his/her post in the new town, now a full mayor or party secretary.
  5. Promoted again from the poor town, transferred to a much better place, maybe a senior position in the provincial government, or a deputy position in the leader team of the provincial capital.
  6. Promoted again. Upward the provincial hierarchy, or become the primary leader of the provincial capital. Depends on how the previous promotion went.
  7. Promoted again, into a senior position in one of the ministries directly under the Chinese central government.
  8. If not dead/retired/jailed yet, continue being promoted in the central government system over the years.
  9. In really rare cases, become the president (or the “state chairman” as the Chinese call it natively).

Most officials can’t make it to step 6. Those hitting step 5 should be considered lucky enough. Alternatively, some officers progress in a “top-down” fashion:

  1. Start from the lowest rank in a provincial government, or even in the ministries. This is not easy. One need seriously great education background or considerably powerful connections to make a debut this way.
  2. Slowly climb the ladder of hierarchy, until reaching some administrative positions such as department head.
  3. Promoted, booted out of the provincial government or ministry, into a town government, usually as deputy mayor or deputy secretary.
  4. Continue the career, become full mayor or party secretary.
  5. Further promotion, into better towns. Eventually back to the provincial government or ministries, as a senior executive this time.
  6. March to the throne of president!

No matter which path, one thing is in common: the progress of career is accompanied by frequent relocation. To them, every town is just a temporary stop, quite often unpleasant ones, since the career curve usually takes a sharp dive first in terms of “town greatness”, then start working up gradually from the lowest point. Say, if this were you, do you really care about a town where nobody knew you before, and will forget about you soon after your departure? Will you consider the long term benefit of a place where you won’t stay for very long? Don’t you want to prioritize “getting out of this hole of poverty”? Isn’t promotion the most important thing on your mind, to quickly get on with the better part of your career?

Promotion for Chinese town leaders is entirely result-driven. Unfortunately, “long term benefit” is not a consideration. The most important is how your leadership has visibly affected the town, things could be put in figures, or can be observed with naked eye on the streets. Effects could include the town’s financial balance sheet or improvement on the general look of the streets. Taking 10 years to build an industrial that will continue to pump up the town’s economy for several decades won’t help you much personally: unless miracle drops out of the blue sky, it means you will be locked up in the same poor town for the next decade, until positive records begin to show up. On the other hand, several “short-termed” tricks could do magic to your career:

  • Build 25 residential compounds in 3 years by demolishing old buildings and getting huge loans from local banks. The town will look massively “modernized” at the end of the campaign, earning you a huge favor in front of inspectors from your provincial government. And these could greatly vitalize local real estate business, simulating the GDP. Double reward.
  • Planting 50,000 trees in a matter of a year. The fully grown kind of trees I mean. Don’t hesitate at the cost of tree transplantation. Ask local banks for loans. At the end, present your work as “successfully building a forest/garden city”. Sometimes the state government grants rewards for the building of “green cities”. Your lucky day if the timing is right.
  • Attracting investment from foreign corporations or governments. A penny from them is a penny saved for your provincial government, therefore a penny earned by you. “Earning money” this way isn’t as impressive as seemingly improving your city though.

You may have noticed two things: 1) a whole lot of Chinese local governments are doing exactly that right now; 2) most of these tricks can’t be pulled off without heavy loans from the bank. Well, brilliant, you are right. There are huge concerns in the international society about Chinese local governments’ huge and increasing debts. I believe this is a major source of them.

There is little concern for local leaders to adopt such suicidal development plan and projects of nothing but facial value, because:

  • I’m not from here, none of my important family members is here, and personally I don’t have anything at stake here, except for the house I’m living in. Even if things go insanely wrong, the people here can’t track and kill my parents.
  • If things work out half-right, I’ll be out of here in no more than 5 years, high up in the province, or in a much better town.
  • Whatever trouble from the loan, it will my successor’s fish to fry.

The logic sounds perfect, although side effects are showing up with its wide adoption. At a macro level, the primary problem is the mounting debts of local governments. And at personal level, it’s quite nasty: get a promotion, relocated to a poorer town but as a key leader, only to land in the huge debt left by your predecessor besides the town’s original poverty.

If that were you, what will you do? The natural reaction would be to hurry the heck up, find out some way to get even more bank loan, fuel more impressive facial projects, impress the provincial leaders, haul yourself out of the looming doom, and leave whatever disaster (now double disaster, half from you) to your successor.

The model works like an infinite loop powering itself. Towns are there, leaders shuffle. Big cities are fine because they have better economic foundation for crazy attempts. But poor ones are more or less doomed. These places were poor to start with. After a handful rounds of leader shuffling and enormous budget poured into various grand but not necessarily sustainable projects, the towns are taxed with heavy debts, but haven’t gained any real source of extra revenue. Good to better, bad to worse. This could probably explain, partly, why China’s ongoing plan to develop the impoverished regions haven’t been working well, and development gap between Chinese towns are worsening instead of improving. A circle of unsustainability that is perfectly sustainable. Irony at its best.

And what does that mean to you, dear reader, who most likely is a businessman(woman) currently in a potential partnership with some Chinese township government, trying to make an impressive pitching to local leaders?

Well, it means calibrate the cue of your pitch. Focus on the immediate (or as close to that as possible) effect of your partnership. Say how much tax your JV company will contribute upon launch. How much more beautiful/modern the whole town will look if they replace all street lamps with your product. Don’t say it explicitly, but always focus on “how working with us could improve your achievement list as a mayor/party secretary, therefore accelerate your promotion.” And “our plant will empower your town as one of the key driving forces in China’s [insert sector name] industry within 15 years” will quite likely to fail.

As the representative of “foreign capital”, you have starter advantage already: a penny from you is a penny earned by them, remember? Try to enhance your position based on that, not to damage your own standing.

Contact us if you want to discuss more about China’s political and economic condition, and how to adjust your business strategy accordingly. Or if you have done a similar sampling but on a much larger size (say, 200 Chinese towns / 400 local leaders) and found my conclusion utterly wrong for lack of data, please let us know. I’ll be happy to cancel my own point on this. It’s a very ugly outlook, and seriously, like everyone else, I don’t like it one bit.

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