Broad, Vague Policy Language is Just Indecision (2019)
"They frequently lack details.. Even when such details are included, they are often vague, using terms like 'encourage' and 'support' without specifying how." Plus too many grand narratives & theories
Ever been puzzled by the broad and vague language in policy documents? Essentially, many of them are simply a result of inter-departmental, inter-agency indecision, according to Xu Zhong, then Director-General of the Research Bureau of the People’s Bank of China in 2019, and now Deputy Secretary-General of China’s state-backed National Association of Financial Market Institutional Investors, a self-regulatory organization in the inter-bank market.
The following is based on a written record by the Chinese Economists 50 Forum published in March 2019. Xu was attending the “Chinese Economists 50 Forum 2019 Annual Conference” and was delivering remarks titled 对改革决策中一些现象的思考 Reflections on Certain Phenomena in Decision-Making of Reforms.
Xu Zhong said that many of China’s existing policy documents often fail to mention the key difficulties of reform and the specific issues that need to be addressed. This is because most policy documents are drafted by 处长 directors of divisions, and due to differences in understanding or departmental interests, it is difficult for different departments to reach a consensus. As a result, contentious issues are often removed from the documents. “However, these contentious issues are precisely the key and difficult points that need to be addressed in the reform process.” Xu Zhong pointed out that only by further improving the decision-making mechanism, reforming the accountability system, rethinking the design philosophy of policy documents, and improving the style of policy writing can the expectations for reform be strengthened and market participants’ confidence in China’s economic development be enhanced.
对改革决策中一些现象的思考
Reflections on Certain Phenomena in Decision-Making of Reforms
The key to promoting economic transformation and high-quality development lies in establishing a high-level market economy system with clear rules, transparency, market orientation, and rule of law. To achieve this goal, one issue must be prioritized: improving the scientific, effective, and precise nature of decision-making. The Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee made a major decision to comprehensively deepen reform, establishing an overall framework and providing a “top-level design” for reforms. Guided by this, government officials have been working day and night, adhering to a “5+2” work schedule (five weekdays plus weekend overtime), racing to introduce reform plans. However, public evaluations of some major reform measures have been mixed, and some people feel that the tangible benefits of reform have not been strongly felt. This is an issue that requires careful examination.
A close review of China’s existing policy documents reveals several key observations:
1. Decision-Making Mechanism: While some policy documents are consistent with the spirit of the Third Plenary Session of the 18th CPC Central Committee and central policies, they often fail to mention the key difficulties of reform and the specific issues that need to be resolved. This may be related to how these policy documents are formulated. Most policy documents are drafted by division directors, and during interdepartmental discussions, disagreements frequently arise due to differences in perspectives or departmental interests. Given the pressure to complete the policy within a set timeframe, contentious issues are simply removed from the documents. As a result, while policy documents appear to reflect a consensus, they exclude crucial points of contention central to meaningful reform.
2. Writing Style: Policy documents tend to be broad and comprehensive, but they often lack clear guidance on specific implementation steps. Most policy documents in China follow a standardized structure, covering all aspects of reform—from situational assessments to the necessity of reform, from guiding principles to fundamental principles. However, they frequently lack details on how policies should be implemented. Even when such details are included, they are often vague, using terms like “encourage” and “support” without specifying how such encouragement or support should be provided. One reason behind “implementing policies through additional policies” is that higher-level documents fail to provide sufficient detail. When multiple documents are issued without clear implementation plans, market participants’ expectations can be affected. Additionally, there may be a cultural tendency in China to avoid spelling things out in plain language that ordinary people can understand. Instead of recording and describing details, there is a preference for grand narratives and theoretical discussions.
3. Policy Design Philosophy: The scientific basis of policy formulation, the presence of incentive-compatible mechanisms, and the market-oriented approach are critical. Many policy documents still have room for improvement in these areas. Moreover, there is a tendency to alter long-term institutional frameworks through administrative measures to meet short-term goals, but institutional stability is crucial for maintaining stable market expectations.
4. Implementation Issues: Fourth, from the perspective of implementation, the departmentalization of legislation and the broad discretionary power of administrative agencies prevent genuine marketization and legal standardization. The legislative body delegates the authority to draft legislation to administrative agencies. The formulation of laws, regulations, and policies requires bottom-up communication and coordination among various departments. However, when the division head responsible for drafting a document solicits opinions, differing views among departments often arise. Since conflicting opinions cannot be incorporated into the law, the resulting provisions tend to be vague and generalized. Consequently, the implementation of laws, regulations, and policies inevitably relies on administrative agencies to issue detailed rules, define standards, and establish operational procedures, thereby granting them substantial discretionary power.
The same rules, when subject to excessive discretionary power by the implementing agencies, can lead to significantly different outcomes, inevitably disrupting market expectations and undermining market confidence.
In recent years, China has implemented a series of reforms, and the results have been tangible. The public has high expectations for further deepening reforms and unlocking reform dividends. Against this backdrop, it is essential to continue improving the decision-making mechanism, reforming the accountability system, refining the design philosophy of policy documents, and enhancing the clarity of policy writing. Doing so will help consolidate reform expectations and strengthen market participants’ confidence in China’s economic development. Moreover, improving the approach to reform will not only enhance the public’s real sense of reform benefits but also improve the work-life balance of civil servants.
