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September 07, 2010

Performance Management in China – A Gradual Evolution

Posted by John P. Burns[1]

From at least the mid-1980s the Chinese government has implemented a performance management regime that has grown in complexity and sophistication. Emerging first at local government level, China’s 'objective responsibility system’ (ORS) involved setting objectives for subordinate government units and holding individual leaders responsible for their fulfillment. Initially voluntary and lacking unified guidelines, by the 1990s the system became increasingly institutionalized. Officials at all levels understood its utility for achieving control of policy implementation.

As it operates today, targets set in China’s five-year plans (we are now in the 11th Five-Year Plan), especially economic growth targets (GDP and GDP per capita) are cascaded down to provincial governments, which add their own targets such as budget revenue, total value of investment in fixed assets, total value of imports and exports, and so forth, which then become targets for larger cities (prefectural level). They then add additional targets such as total value of retail sales, and pass on the targets to the county level. At least initially, the system focused on meeting targets related to the economy.

As it has developed, however, the government has added additional targets for family planning, dealing with mass complaints, production safety (in those areas where safety issues were a problem), and developing a comprehensive social security system. In all of these areas meeting the targets has increasingly been tied to personnel decisions within leadership groups. That is, for the high-priority targets (especially economic growth, tax revenue, family planning, and social stability-related) meeting the targets has been an important pre-condition for promotion and upward mobility within the civil service.

Compliance is monitored by the audit bureaus that are attached to local government at each level and by other arrangements that include the specialist agencies that have responsibility for policy implementation in the various areas. Thus family planning targets at one level are monitored by the family planning agency at the next highest level. In addition, prefectural-level cities carry out ad hoc inspections and other checks and produce league tables of the various units under their supervision to identify those that have had the best results.

Since the early 1990s the central government became increasingly involved in the process, pushing standardization, more clearly specified measures of performance, and moving the system from one that was almost entirely input based to one that increasingly measures outputs. Indeed in 2008 Premier Wen Jiabao, formally announced that the central government would introduce ‘performance management’ for government, the first time the term publicly appeared in an official document. The ORS has provided higher-level authorities with an effective lever to encourage compliance of subordinates, especially because of the links between the ORS and the personnel system. Increasingly the targets have become more concrete, specific, and measurable, and have been broadened to include social and sustainability goals. Still, many targets continue to focus on inputs.

Weaknesses of the ORS include the practice of leaving the monitoring of target achievement in the hands of local agencies (locally established audit bureaus and development and reform commissions). This encourages them to tailor performance reporting to fit local needs such as inflating economic growth and helps to explain the phenomenon of mismatch of China’s national GDP with the sum of provincial-level GDP (the latter in recent years has always exceeded the former). The ORS encourages officials to perform to the targets, which means that others areas are quite naturally given a lower priority. The ranking system also can have negative consequences, encouraging competition rather than collaboration to solve cross boundary problems such as environmental pollution. Further efforts are needed to encourage collaborative arrangements to address pressing public problems such as environmental protection and water conservation. Finally, more public participation in the performance management system would enhance its legitimacy.

Further reading:

Chan, Hon S. and Gao Jie (2008) ‘Performance measurement in Chinese local governments, Chinese Law and Government, 41 (2-3) March/April-May/June, 1-126.

Chan, Hon S. and Gao Jie (2009) ‘Putting the cart before the horse: accountability or performance?’ Australia Journal of Public Administration, 68 March, S51-S61.

Gao, Jie (2009) ‘Government by goals and numbers: a case study in the use of performance measurement to build state capacity in China,’ Public Administration and Development, 29:1, 21-31.

Zhou Zhiren (2008) ‘Public participation in performance measurement in China: a historical review and prospects,’ Chinese Public Administration 1 (in Chinese).

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[1] John Burns is Chair Professor of Politics and Public Administration at the University of Hong Kong (jpburns@hku.hk). He teaches courses and does research on comparative politics and public administration, specializing in China including Hong Kong. His research interests focus on public sector human resource management, civil service reform, party-state relations, and public sector reform. He is a member of the Editorial Committee of the China Quarterly and served on the HKSAR Government's Civil Service Training and Development Advisory Committee from 1997 to 2003.

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