Wednesday, January 9, 2008

“Regulationism”

My apologies to lexicographers, linguists, and English teachers out there for coining the word “regulationism.” But I couldn’t help it after seeing so many regulations that come into my China New Law alerts on a daily basis. To me, regulationsim means a tendency by a government(s) to resort to administrative regulations to solve social issues that might otherwise be resolved through alternative means.

Most people who know China are aware of the plethora of regulations in China, and my mentioning of the issue is surely no news. But, I am not certain that people know how the almost ubiquitous and countless rules and regulations impact China’s efforts to establish the rule of law, and how they affect people’s daily lives (both good and bad). I am not sure I know either, but I fear that regulations, once they start to “run wild” and become a short cut to the formal legislative process, do come with high costs that citizens probably do not want to pay.

For example, there have been fierce discussions on the regulation/standard on steamed buns in China. Reportedly, all steam buns must be made of flour, and be either oval or round in shape. Understandably, there needs to be certain standards for quality and sanitation, but a required shape for buns? Yes, this regulation will benefit average consumers by ensuring that all steamed buns will have a desirable uniform quality; however, these regulations also result in fewer choices for consumers. What if a consumer wants a triangular bun? What if she desires a bun made of a mixture of flour and corn meal in the market? Therefore, an unexpected corollary of excessive regulation is the blockade of the market mechanism.

In light of the consequence of this steamed bun regulation, its necessity should be called into question. The fact is that China already has Product Quality Law (and its relevant regulations), which should be sufficient to address quality concerns. Why then is another regulation necessary just for steamed buns? The answer, I guess is that the two Chinese agencies, General Administration of Quality Supervision & Inspection and Standardization Administration, subscribe to “regulationism.”

(Note: in the midst of a fury of outcries about the standard shape of steamed buns, the Standardization Administration issued an explanation that the standard shape of steamed buns in the regulations is only a recommendation, not a requirement.) Query, why even a recommendation?

While this topic of excessive regulating is discussed, I just learned of another notice by the State Council issued on December 31, 2007, which has to do with the ban on the production, sale and use of ultra-thin plastic grocery sacks (<0.025 mm). Pursuant to the notice, this ban goes into effect on June 1, 2008, and the National Reform and Development Commission will revise the Investment Guide Catalogue to reflect this national campaign to root out ultra-thin plastic sacks. In addition, starting on June 1, 2008, all markets in China shall cease to offer plastic sacks for free, and shall charge customers a specific fee for sacks requested by customers.

Clearly, this new regulation aims to increase the externality for the use of plastic sacks, which is an annoying solid pollutant in China and elsewhere. Hopefully, it will be effective in achieving its administrative purpose in stemming pollution and shifting the cost of pollution to average consumers and investors in manufacturing of ultra-thin plastic sacks. I don’t doubt the wisdom of the rationale behind the regulation, but I do have qualms about how it will be enforced in China. So many enormous polluters of China’s skies, rivers, lakes, and wetlands go unpunished in spite of China's long existing environmental laws and regulations. Thus, how could a neutral China observer be convinced that the government will go after a small business owner or grocer for selling a few thin plastic sacks, following the announcement of yet another regulation? This leads to, as I see it, another unexpected consequence of regulationism—societal cynicism about excessive regulations. If regulations are not to be strictly enforced, why make them in the first place?

Any thoughts?

4 comments:

Bill said...

Steamed buns are supposed to be round, and made with wheat flour.

Did they define what "round" means ? How about "wheat flour" ? Can we make "wheat flour" from cardboard ? What kind of additives can we put in ? I can think of all kinds of value added ingredients in it to make you slim and healthy.

Anonymous said...

The reason for so many regulations is that the people lack effective rights to protect their interests. The party doesn't want to give too much power to judges. They want you to go to the bureacracy to solve problems, not fight it out in court.

Brad Luo 罗竞雄 said...

Bill,

That is exactly the point. When the gov't tells people what to do on this kind of minute things, there seems to be no end to it. Today is steamed bun; tomorrow it might move on to some other aspect of daily life.

Somethings are best when left to the market.

Brad Luo 罗竞雄 said...

anoymous,

That is a very valid point. But please don't forget that even the judges have their hands tied to the party b/c they are not independent of the "party" yet.