Alongside China's rapid economic development and profound social transformation, Chinese society has witnessed widespread and intensifying social conflicts and collective protests aroused by issues such as exorbitant exactions on peasants, massive layoffs of workers, forceful land appropriations and environmental degradation. A less discussed but no less disturbing source of social tensions is the extraction and processing of mineral resources. Because mining industries almost inevitably generate adverse impacts such as geological hazards and pollution on surrounding areas, they tend to garner popular grievances which give rise to social unrest. As exemplified by the large-scale protests in Weng'an county 瓮安县 in Guizhou province in 2008Footnote 1 and in Shifang city 什邡市 in Sichuan province in 2012,Footnote 2 many mining areas in China have experienced resource-triggered social conflicts (hereafter referred to as resource conflicts) of various scales and levels of intensity.
How does the Chinese Communist Party-state, which attaches top priority to maintaining social stability, respond to these unnerving social conflicts? Through in-depth field research in multiple mining areas in China, we find that the Chinese state devises both reactive and pre-emptive strategies to ease tensions, appease aggrieved citizens, and prevent resource conflicts from escalating into major crises that may threaten regime stability. In reaction to existing conflicts, local governments actively mediate between the citizens and the mining sector and, as a backup, skilfully use coercive power to suppress collective protests. To prevent potential conflicts, local governments in mining areas proactively intervene in dispute-prone processes such as land acquisition, and hand out economic appeasements such as employment opportunities, public goods and social welfare benefits to the citizens in order to to create vested interests and mitigate popular grievances. We argue that these reactive and pre-emptive strategies ultimately are driven by the party-state's tight control over local officials, which prevents the total capture of the local state by resource interests, and are enabled by the party-state's strong capacity to reach deep into society and mobilize resources towards conflict resolution. The local state has both the incentive and the capacity for resource conflict resolution.
This research contributes to existing studies on stability maintenance and conflict resolution in China in at least three ways. First, we show that the Chinese state has a wide range of tools with which to manage social conflicts and enhance regime durability. In addition to repression and buyouts, two commonly noted strategies for stability maintenance, the Chinese state actively mediates between conflicting interests to broker agreements and, more importantly, it proactively prevents social conflicts through intervention and redistribution. Second, while existing studies have rightly pointed out that China's cadre management system provides the fundamental incentive for localities to maintain stability, we highlight the significance of the party-state's penetration of society, which provides the capacity for local governments to devise soft strategies instead of using outright coercion to resolve social conflicts. Third, although we focus on resource conflicts, the strategies used in mining areas may well be applicable to other types of social conflict resolution in China. After all, resource conflicts often intertwine with other social conflicts such as land disputes and environmental protests.
This study mainly draws from the authors' extensive field research in multiple mining areas in China between 2012 and 2015. During the field trips, we conducted semi-structured interviews with government officials, managers and employees of state-owned and private mining enterprises, researchers, and local citizens. We also obtained official documents and statistical reports that were publicly unavailable, and closely observed the operations of local governments and mining companies. Specifically, we visited nine localities in Jiangxi, Shanxi, Henan, Inner Mongolia Autonomous Region and Xinjiang Autonomous Region (see Appendix 1). These localities were not randomly sampled but were selected for three reasons. First, they all host sizable coal mines and mining-related industries play a dominant role in their local economy. Second, they cover eastern, central and western regions of China, and arguably are representative of resource-rich Chinese regions. Last but not least, the authors could obtain reliable inside information on local governments and mining industries. Although the nine localities vary widely in size, population, level of economic development, amount of coal reserves, and ownership and scale of mining companies, we observed some common patterns in their resource conflicts and strategies for conflict resolution. This leads us to infer that the strategies used successfully in these cases are likely to be applied in other resource-rich localities in China. To cross-validate the field research, we also collected information from secondary sources, including media reports and scholarly publications. These supplementary data lend support to our understanding of the patterns and rationales of resource conflict resolution in China.
The rest of the paper is organized as follows. The next section reviews the literature on social conflicts and stability maintenance in reform-era China and highlights the need for more research on the Chinese state's conflict resolution strategies. Section three examines resource conflicts in China and argues that the negative externalities of the resource sector imposed on neighbouring communities have been the major source of social instability in mining areas. The paper then goes on to analyse the reactive and pre-emptive strategies used by the state to manage resource conflicts. This is then followed by an explanation of the incentives and capacities of local governments that provide the necessary conditions for resource conflict resolution in China. The last section concludes.
Social Instability and Conflict Resolution in China
Collective protests have been increasing in frequency and intensity in reform-era Chinese society, signalling an accumulation of popular discontent and social tensions.Footnote 3 Many different groups such as workers,Footnote 4 rural residentsFootnote 5 and ethnic minoritiesFootnote 6 have been found to initiate and participate in collective protests, and a multitude of triggers have been identified, such as the exorbitant fiscal exactions on peasants prior to the agricultural tax reform,Footnote 7 state-owned enterprise reforms,Footnote 8 violations of labour rights,Footnote 9 land disputes arising from urbanization and industrialization,Footnote 10 displacement owing to infrastructural developmentFootnote 11 and environmental degradation,Footnote 12 to name but a few.
One strand of research on social instability in China focuses on how the Chinese Communist Party (CCP) responds to such social volcanoes, and comes to the common understanding that since the 1989 Tiananmen movement and the collapse of the communist regimes in Eastern Europe, the CCP has made regime stability a top priority and thus exerts enormous pressure on local governments and officials, through the cadre evaluation system, to achieve this goal.Footnote 13 Stability maintenance is a hard evaluation criterion of cadre performance and carries veto power for political promotion (yipiao foujue 一票否决). Fearful of any disturbance to social order that may pose a threat to their political careers, local officials, especially at the grassroots levels, go to extraordinary lengths to resolve or suppress social conflicts within their jurisdictions.Footnote 14
While the incentive structure for stability maintenance has been thoroughly discussed, there has been only limited research into the concrete strategies adopted by the state to manage social conflicts and interact with the participants of collective protests on the ground. Since reform, conflict resolution and stability maintenance in China have moved first towards and then away from legal methods.Footnote 15 Outside the legal framework, outright suppression has often been observed as the response to multi-sourced and deep-rooted social conflicts.Footnote 16 To ensure the suppression of such conflicts, the CCP enhances the state's coercive capacity and the loyalty of its coercive organs.Footnote 17 However, the Chinese government also makes occasional concessions, sometimes even unconditional concessions, in order to appease aggrieved citizens and contain conflicts.Footnote 18 An oft-used method of concession is to “resolve people's internal contradictions with renminbi” (renmin neibu maodun, renminbi jiejue 人民内部矛盾, 人民币解决); in other words, it buys off aggrieved citizens and defuses protests with monetary incentives.Footnote 19
The Chinese government, especially at local levels, applies a wide range of intricate strategies that fall in between suppression and concession to achieve a so-called “harmonious society.” For example, Yanhua Deng and Kevin O'Brien reveal how local governments mobilize social networks to dissuade protestors from participating in collective actions, a strategy they call relational repression.Footnote 20 Kai Zhou and Xiaojun Yan find that instead of always ruthlessly repressing disturbances, the police combine pre-emption, persuasion and the selective use of coercive force to manage and moderate protests.Footnote 21 In addition, Ching Kwan Lee and Yonghong Zhang notice how conflicts can be bureaucratically absorbed in order to buy time and delay the eruption of tension.Footnote 22 In recent years, scholars have noticed the increasing use of mediation in conflict resolution. Reviving an old tradition, many local governments resort to “grand mediation” for conflict management, under which administrative and judicial departments, social organizations and common citizens are integrated to detect and resolve social conflicts.Footnote 23 For labour disputes in particular, the Chinese state prioritizes mediation through courts and/or labour arbitration agencies.Footnote 24
These seminal works shed significant light on the diversity and intricacy of the Chinese state's responses to surging popular contentions, and help explain the resilience of the regime in the face of monumental challenges. However, considering the diverse types and triggers of social conflicts in reform-era China, we are far from getting the full picture. More scholarly efforts are needed to scrutinize the state's nuanced conflict-resolution strategies.
Resource Conflicts in China
Comparative studies find that resource-rich developing countries have higher risks of civil conflict. Natural resources such as oil, minerals and gemstones provide both the economic incentive and funding sources for contention, often through violent means, over the control rights of the resource wealth.Footnote 25 At the same time, a resource-dependent economy creates victims and breeds popular discontent which can lead to civil conflicts. There are several reasons for this: price shocks in an unstable resource market can lead to income instability, the unequal distribution of resource rents can create tensions between different social groups, and extractive industries can generate serious negative externalities such as environmental hazards on neighbouring communities.Footnote 26 China, which hosts a large variety and quantity of mineral resources such as coal, metals and non-metal minerals, is not immune to these problems. Based on our field research and media reports, we have observed widespread conflicts in resource-rich Chinese regions.
First of all, extractive industries generate various environmental hazards including, but not limited to, pollution, water shortages and land subsidence. For instance, the coal industry is responsible for the serious air pollution in many regions of China. Citizens working in or living close to the mines often suffer from different forms and degrees of health problems, with pneumoconiosis as the most common disease. Meanwhile, owing to the extraction of large volumes of minerals from under the ground, mining areas are often affected by land subsidence, which can damage property and even lead to fatalities.Footnote 27 The environmental hazards exact a heavy toll on the health and livelihoods of local residents in surrounding areas. However, owing to the technical difficulties in determining who is liable for any damage and reluctance on the part of the mining enterprises to provide compensation, victims rarely receive proper and timely redress.Footnote 28 As a result, aggrieved citizens often resort to staging collective protests and some may take more radical, violent means to vent their anger, such as attacking government bodies and the mining companies concerned.Footnote 29
Second, in association with the environmental hazards, there are frequent economic disputes in mining areas between the mining sector and local residents. These can escalate into violent clashes and pose a tangible threat to social stability. The most common type of dispute is over land in mined-out areas.Footnote 30 There are often disagreements between local citizens and the mining companies regarding the appropriation of land and proper compensation.Footnote 31 However, lacking an effective and trustworthy judicial system, mining companies and affected local citizens rarely settle their disputes through legal procedures, and instead often resort to private negotiations or extra-legal means. When no agreement can be reached, forced relocations and violent clashes may ensue and escalate into large-scale riots. According to some estimates, land and resource-related social conflicts have accounted for more than 65 per cent of all the eruptive collective movements in rural China in recent years.Footnote 32 In addition, owing to the constant traffic of heavily loaded trucks transporting mineral products, the roads in mining areas throughout China are usually in a very poor state. Broken roads pose a great inconvenience to local residents and are the cause of frequent traffic accidents; however, the mining and transportation companies rarely provide any compensation for the damage. One township official worried that such grievances, if not addressed in a timely and proper fashion, could erupt into major protests and crises for the government.Footnote 33
Third, labour disputes are a common occurrence within the mining industries. Vulnerable to market shocks, mining firms usually cut back production and lay off workers or delay payments in response to economic downturns. With no adequate social welfare safety net to fall back on, affected workers are quick to respond to hasty dismissals or payment arrears with protests. For instance, thousands of workers in a state-owned coal company in Heilongjiang province took to the streets in March 2016 to protest against wage arrears.Footnote 34 We observed similar instances during our fieldwork. For example, when one coal company in Jiangxi province suddenly declared bankruptcy and closed its mines because of the sharp drop in the price of coal in 2013, the workers angrily protested to the local government and threatened to use more radical measures to exact compensation.Footnote 35 Besides unemployment and wage arrears, workplace injuries and deaths, which are far from rare in extractive industries, especially in medium and small-scale mines with substandard safety conditions, are a routine cause of clashes between mining companies and employees and their families. When there are no clear standards for compensation or when the compensation is too paltry or delayed, these conflicts often escalate into collective protests.Footnote 36
Overall, resource extraction directly contributes to social conflict in China by imposing negative externalities on the neighbouring communities. The conflicts between the mining sector and local residents form a widespread source of popular contention that targets not only the resource sector but also the state. Thus, these conflicts are perceived as a direct threat to social stability. Moreover, as resource conflicts are “disorganized contentions” (using Feng Chen and Yi Kang's terminology)Footnote 37 that pop up in scattered and diverse ways but with the same targets (mining industries) and similar demands (mostly remedial measures and compensation), local officials have to run around like firefighters and painstakingly prevent them from escalating into major crises.
Reactive Strategies
How does the Chinese government, which sees social stability as a top priority, handle resource conflicts? Our research finds that resource-rich local governments across China have devised a full range of strategies. While detailed practices vary widely, the strategies largely fall into two categories: reactive and pre-emptive. Reactive strategies are piecemeal treatments for individual existing conflicts, while pre-emptive strategies target the potential sources of conflicts. The next sections examine both categories.
Mediation
Mediation is commonly used to resolve resource conflicts. Many citizens see the judicial system as ineffective and untrustworthy, so they are discouraged from going through the courts when seeking justice and a resolution to their disputes with the mining companies. Instead, they choose to complain to local governments directly, and lobby leading cadres to put forward their requests.Footnote 38 As studies have pointed out, the Chinese government encourages the use of mediation as a more efficient and less confrontational method of conflict resolution.Footnote 39 Under such circumstances, local governments in resource-rich regions are directly involved in the arbitration, mediation and resolution of resource conflicts and try to broker agreements between the mining firms and local citizens.
We observed various cases of local government-led mediation in collective protests over land issues, environmental damage and other problems caused by mining. When they perceive a threat to social stability from an escalating resource conflict, local governments usually step in to mediate between the aggrieved citizens and the mining companies and negotiate remedial measures, which often boil down to securing compensation in economic terms. As briefly mentioned above, one coal company in X county in Jiangxi province suddenly declared bankruptcy and closed down its mining operations because of the plummeting price of coal in 2013. All of its 357 workers lost not only their jobs but also their medical benefits and retirement pensions. Dozens of workers protested angrily to the county government and threatened to escalate the protest further with more radical actions. The local government quickly stepped in to mediate and eventually pressured the coal company into paying five million yuan to the workers in order to settle the dispute.Footnote 40 In another incident, more than a hundred villagers in F city in Jiangxi province complained to the city government about land subsidence and accused one coal-mining company of being responsible for the damage to their properties. The coal-mining company refused to accept any responsibility for the damage and instead placed the blame on a cement company. Alarmed by the collective action, the city government demanded that both firms should hire their own investigation teams to assess the cause of the damage. However, regardless of the two assessment reports, F city government declared that both firms should pay compensation and that the amount should be split equally between them, which eventually defused the protest.Footnote 41 Such state mediation is commonly seen in other mining areas as well. Local governments often broker agreements between aggrieved local citizens and mining companies that use financial compensation in settlement, with the payments normally falling somewhere between the amount requested by the protestors and that willingly offered by the companies.
Such mediation could not succeed without the formal and informal bargaining power that local governments and officials command over both the mining sector and the citizens. First of all, the administrative and coercive power of local governments places them in an advantageous position as the mediator. Mining companies are typically regulated by multiple administrative departments such as the taxation bureau, industry and commerce bureau, and the departments of safety supervision, land and resources, and environmental protection, any of which has the formal authority to intervene in a company's operations.Footnote 42 When mediating in a resource conflict, local governments normally first subject the mining company to “thought work” (sixiang gongzuo 思想工作) through the relevant administrative departments. For example, land disputes are handled by the land and resources department; environmental protests are handled by the environmental protection department; and coal bureaus handle a wide range of issues specifically related to coal mining. If thought work fails, local governments can threaten to cut off the uncooperative company's water and electricity supplies.Footnote 43 In such cases, mining companies (except for those large central or provincial state-owned companies with a higher political ranking) usually succumb to the requests of the local government.
Successful local government mediation also relies heavily on the personal connections of grassroots officials with both parties in resource conflicts. Owing to extensive government regulation in the resource sector, mining companies have to deal with local officials on a regular basis and know them personally through all kinds of official and casual meetings. Equally, grassroots officials, especially at the township and village levels, are inevitably embedded in extensive interpersonal networks within local communities. The personal connections between officials, mining companies and common citizens provide a useful tool for communication and persuasion in conflict resolution.Footnote 44 In the words of one township official in the office of letters and petitions, “people all know each other. We can sit down and talk things through.”Footnote 45
Repression
Nevertheless, government mediation cannot always provide a successful and peaceful settlement. When the gap between the conflicting interests is too wide to bridge, or when aggrieved citizens take highly disruptive measures to advance their requests, local governments also resort to coercive power, albeit often deployed in tactful and less confrontational ways, to suppress protests. A good example case is from 2004, when large-scale mining caused land to collapse in X county in Jiangxi province. The collapse caused several fatalities and affected more than 1,800 people in three villages. The angry villagers first took their protests to the prefecture and provincial governments, demanding compensation and the closure of the coal mine they believed to be at fault. Receiving no satisfactory response, more than three hundred villagers launched an assault on the coal mine, almost causing the deaths of the hundreds of mine workers operating underground. Extremely alarmed county and township officials rushed to the site and devised a two-pronged strategy. One strand of the strategy involved sending leading cadres to the affected villages to conduct extensive “thought work” and placate the villagers with a promise of three million yuan in compensation. Later, the township government, on behalf of the villagers, sued five mining companies and unsurprisingly won the case and received the compensation. Meanwhile, under the guise of providing the villagers with “legal education” (fazhi jiaoyu 法制教育), 260 policemen and officials from the political and legal departments were stationed in the villages to stop rising tensions from turning into violent clashes. Another 200 officials from the county government were organized into a reserve force to prevent any further disruptive collective actions. More importantly, the local authorities identified a few leading activists among the protesters and arrested them on unrelated charges such as tax evasion. Receiving the compensation and scared by the arrests of their leaders, the other villagers mostly gave up their protest and the incident was settled peacefully.Footnote 46
Indeed, the suppression of protests can be a powerful supplement and backup to mediation for Chinese local governments in their efforts to resolve resource conflicts. Instead of indiscriminatingly punishing all the participants in mass protests, local governments usually tactically arrest some leading activists on charges related or unrelated to the protests.Footnote 47 Some commonly used charges include disrupting public security (raoluan shehui zhi'an 扰乱社会治安) and disrupting the order of government organs or enterprises (raoluan jiguan qiye danwei zhixu 扰乱机关企业单位秩序). Oftentimes, local governments try to discredit protest leaders and undermine their authority by digging the dirt on them and exposing any unrelated illicit behaviour. The arrest of the leaders is usually effective at deterring others from taking part in collective actions. As one local official put it, “the citizens are afraid of arrests. Put some in jail, and the rest will become good citizens.”Footnote 48
Pre-emptive Strategies
Besides handling existing resource conflicts on an individual basis, local governments also employ pre-emptive strategies to eliminate the triggers for resource conflicts procedurally. Moreover, local governments in mining areas have taken steps that permit local residents to share in the resource wealth and prevent mining companies from forming enclaves that extract resources without paying anything back to local communities. Resource-based economic opportunities and the redistribution of resource wealth have helped to create vested interests and minimize tensions between the mining sector and local citizens.
Intervention in dispute-prone processes
Land disputes are a major source of resource conflicts. Mining companies, driven by economic interests, often pay lower than the market rate for expropriated land.Footnote 49 At the same time, land-losing rural residents, who not only lose their homes but also their essential means of earning a living, have a strong incentive to maximize any compensation. As the residents are not in a position to determine the amount or the price of the land to be expropriated, all they can do is try to increase the value of the property attached to the land. Thus, some residents choose to hastily build up houses and plant trees or crops in the short period of time leading up to the expropriation, because habituated and cultivated land is compensated at higher rates.Footnote 50 Therefore, the negotiations between the mining companies and local residents can be very tricky and prone to disagreement.
We found that when dealing with the thorny issues of land acquisition and compensation, local governments in mining areas proactively intervene and serve as a buffer zone between the mining sector and the citizens. Instead of letting mining companies negotiate directly with local residents, it is common for the local government to lead the negotiations while the companies pay the bills (zhengfu qiantou, qiye chuqian 政府牵头, 企业出钱).Footnote 51 For instance, the land acquisition process in Y county in Inner Mongolia was institutionalized by publicizing detailed, standardized compensation rates for different types of farmland, grassland, crops, plantations, residential buildings, pens, graves, and other properties attached to expropriated land.Footnote 52 With these pre-set standards, township officials, with the assistance of village cadres, would work together with the villagers to determine the amounts of compensation due. There were often disputes among the villagers about the ownership of certain properties, so the township officials responsible for the village (baocun ganbu 包村干部) had to play the roles of arbitrator and mediator to ensure peaceful settlement of these disputes. Only after most of the disputes were resolved and publicized in the village would the mining companies sign contracts with the villagers. And only after the companies settled the payments under the supervision of the township government were they allowed to start operations.Footnote 53
Although tedious and time consuming, such government intervention can effectively forestall most land disputes between local citizens and mining companies and supposedly protect local citizens' interests. First, although the local government takes the lead in the negotiation process, the various operation and compensation costs are actually borne by the mining companies. Since the local government has little incentive to under-compensate local citizens and stir up trouble, the risks of land conflicts arising are reduced. Second, having standardized official compensation rates eliminates unequal or unfair compensation payments resulting from individual negotiations between mining companies and local residents. Third, when the local government adopts relatively rigorous and transparent methods to determine compensation rates and amounts, it puts a stop to fraudulent schemes such as hastily erecting buildings or planting trees or crops in order to extort more compensation. Essentially, the local government acts as a buffer zone between the mining companies and local citizens and by doing so neutralizes their conflicting interests. Because of its considerable formal and informal bargaining power, the local government can normally broker agreements between the two parties, or at least this was the case in the mining areas that we visited.
Resource-based economic opportunities
In addition to intervention, local governments in mining areas try to create economic opportunities based on the resource sector, so that local citizens can also have a share in the resource wealth. Local authorities commonly require or encourage mining companies to hire local citizens. Although mines themselves have limited and unattractive jobs on offer owing to increasing mechanization and harsh working conditions, there are abundant employment opportunities in the derivative businesses such as catering, property management, environmental recovery and transportation services that serve the mining sector.Footnote 54
However, there are many hurdles for rural residents to overcome as they transition from the agricultural sector to the service industry. First, they lack the necessary skills and start-up funds for providing the services needed. Second, small rural businesses have rather weak bargaining power against the mining industry they intend to serve, and third, they also face fierce competition from each other and also from outsiders. Realizing these problems, some grassroots governments take on trade union-type roles in order to organize local citizens, protect their interests by collectively bargaining with the mining companies and fend off outside competition.Footnote 55
In one innovative move in Y county in Inner Mongolia, the village branches of the CCP set up village-based companies which employ the villagers and provide various services such as transportation, environmental recovery and catering to the mining companies operating in the area. As the village companies are legal entities, the villagers, usually under the leadership of the village cadres, can collectively negotiate with the mining companies for better prices and terms of service, and get paid in a timely fashion for their services. Because the mining companies need to expropriate land from the villages, they have to comply with the village companies' requests. Meanwhile, the village companies discourage competing transportation service providers from outside the villages by imposing so-called management fees on them. Furthermore, the village cadres mobilize their political connections to secure support from higher-level governments in the form of tax breaks and favourable land policies which help to foster the growth of the village companies.Footnote 56
Redistribution of resource wealth
Besides creating resource-based economic opportunities, the local governments in mining areas also design various mechanisms to redistribute the resource wealth among the local citizens. Commonly, mining enterprises are required to provide various public goods for local communities. State-owned mining companies, especially those established during the Maoist era, shoulder many social responsibilities not only for their employees but also for the citizens in the neighbouring areas. All the state-owned mining companies we observed provide certain public goods such as water and electricity for local residents as well as financing public infrastructure projects. Some companies run their own elementary and secondary schools and hospitals, and some have their own police force to maintain public security in the neighbourhood. Prior to the abolition of agricultural taxes in 2006, some companies even paid the agricultural taxes of neighbouring villages.Footnote 57 These state-owned mining companies are closely intertwined with local communities and become a necessary part of local residents' daily life.
Private mining companies are also called upon to provide various public goods such as paved roads, public facilities and funding for schools. Based on the claim that mining companies profit from state-owned resources, both local governments and citizens expect the companies to give back to the local communities. However, unlike the regularized public services that state-owned companies are expected to provide, private companies are subject to contingent fundraising requests from local governments. For example, when Q county government in Shanxi province wanted to organize a basketball match, it solicited sponsorship from a private coal company.Footnote 58 At the same time, local citizens also seek miscellaneous benefits from the mining companies. For example, coal-mining companies are normally expected to provide coal to the surrounding villages at cheaper prices and to distribute free food, coal or other gifts to the villagers during festive times. To appease local residents and avoid conflict, local governments normally acquiesce in or even encourage such requests. Whether out of a strong sense of social responsibility or a utilitarian calculation to gain positive publicity and improve their public relations with the local government and citizens, private mining companies usually willingly or grudgingly accommodate these requests.Footnote 59
Although the public goods and services generate extra costs for the mining companies, they partly compensate for the negative externalities imposed on local residents. Moreover, they create vested interests among local residents who, despite their many disputes with the mining sector, in general still appreciate the existence and prosperity of the mining companies owing to the economic benefits they bring to the local communities. This mentality makes it much easier to resolve or prevent resource-related conflicts between the citizens and the mining sector.
Further to the provision of public goods by the mining enterprises, local governments may also redistribute resource wealth to citizens through the fiscal system. Governments of resource-rich regions collect from mining companies not only taxes but all kinds of non-tax exactions such as environmental management fees, resource compensation fees and land compensation fees.Footnote 60 With the abundant fiscal revenue generated from the resource sector, some resource-rich regions have significantly increased their coverage and standards of social welfare benefits such as low-income allowance, retirement pension and medical insurance, so as to offset the detrimental effects of the mining sector on local residents. For example, as a rare initiative among Chinese localities, Shenmu county in Shaanxi province, which became rich off the back of its coal resources, offered free medical insurance to all local residents and extended the period of free compulsory education from nine years to 12 years.Footnote 61 Similarly, Y county in Inner Mongolia devised very generous unemployment compensation and retirement pension schemes for those rural residents who had lost their land to the mining sector. In addition, it significantly improved the medical insurance coverage for all its rural residents. Furthermore, the county government shoulders the medical insurance expenses for all low-income citizens, citizens with disabilities, ethnic minorities and students. Moreover, the county covered the tuition fees for all schools in its jurisdiction, from kindergartens to senior high schools.Footnote 62
Other mining areas in China may not be able to match the generous packages in these cases, but they nevertheless distribute various social welfare benefits to local citizens, mainly through low-income allowances, medical insurance contributions and retirement pensions. For example, when mining-related environmental degradation such as pollution or water shortages decrease the productivity of farmland, the local governments may offer the affected farmers low-income allowances to offset their losses. In some areas, medical insurance or low-income allowances are allocated to citizens suffering from health problems or incapacitation owing to environmental hazards caused by local mining operations. And, one-off subsidies are also handed out to residents in extreme financial difficulties.Footnote 63 These social welfare benefits, which are partly financed by the mining sector's tax and non-tax contributions, provide a safety net for local residents and to a certain extent help to mitigate popular grievances against the mining sector, thus keeping social unrest at bay.
Explaining Resource Conflict Resolution in China
Why is it that local governments in resource-rich regions in China are willing and able to devise these reactive and pre-emptive strategies to resolve resource conflicts instead of simply colluding with the resource sector at the expense of local citizens? We argue that the local governments have both the incentive and the capacity for successful resource conflict resolution. The Chinese party-state's tight control over its local officials prevents the capture of the local state by resource interests and creates the fundamental incentive for local officials to respond to citizens' requests to a certain degree. Moreover, the party-state's deep reach into society enables grassroots governments to both negotiate between conflicting interests and mobilize resources for conflict resolution.
Incentive for conflict resolution
Resource conflicts create a difficult dilemma for local governments, placing them in an awkward position between the resource sector and local citizens suffering from its negative externalities. Indeed, local governments and officials in resource-dependent regions have strong reasons to align with resource interests not only because of their importance to local economic and fiscal incomes but also because of the abundant opportunities for local officials to seek rents in mining-related businesses.Footnote 64 As a local official who deals with resource conflicts on a daily basis put it, “we [the government] serve the [mining] companies and help them solve the problems that they cannot solve.” Following this, he remembered to add, “we also serve the people.”Footnote 65 Thus, local governments tend to be biased towards mining industries when resolving the latter's conflicts with citizens, and are reluctant to enforce harsh punitive measures against mining companies in case they kill the engine of growth and source of income.
However, despite a tendency towards local capture by resource interests, local officials cannot completely ignore citizens' complaints, because they face immense pressure from above regarding the maintenance of social stability. As earlier studies have rightly pointed out, China's cadre evaluation system plays a key role in motivating local governments to do their utmost to maintain stability.Footnote 66 The cadre evaluation system explicitly lists the absence of any major social unrest as a key criterion and necessary condition for the promotion of Chinese officials at all levels of the political hierarchy. Fearful of any disturbance to social order that may threaten their political careers, local officials go to extraordinary lengths to resolve or suffocate any social conflicts that occur within their jurisdictions. The tight control over personnel exerted by the Chinese party-state ensures that local officials cannot be entirely aligned with resource interests because they have to respond to the complaints and requests of local citizens to a certain extent. For example, environmental complaints have been a major source of resource conflicts in China. When local governments perceive the complaints to be serious enough so as to pose a threat to social stability, they will act on behalf of the aggrieved citizens and force the mining companies to take some remedial action, such as installing a dust gauze or water purifier to reduce air or water pollution, to eliminate the immediate causes of the problem. If conditions allow, local governments may also relocate the affected citizens to other areas if the environmental problems are too serious to solve.Footnote 67 To put it briefly, local governments must strike a delicate balance between cultivating a favourable environment for the extractive industries and placating the victims of their negative externalities.
It is worth noting that when the Chinese central government adjusts its cadre evaluation standards and places more emphasis on certain criteria, local officials have to adjust their strategies accordingly. In earlier years, when economic growth was the single most important criterion for political promotion, local cadres paid little heed to public complaints about problems springing from the resource sector such as environmental degradation. However, as the central government has gradually strengthened environmental regulation in response to increasing problems and protests across China, local governments in mining areas have had to enforce environmental standards more stringently. Similarly, injuries or deaths caused by mining accidents were awarded very paltry compensation, which frequently stirred conflicts between victims and their families and the mining companies. However, as the central government has stepped up labour rights protection and punished local officials more severely for safety accidents in the 2010s, local governments in mining areas have accordingly had to raise local compensation standards and put more pressure on mining companies to meet safety standards. Although cases of under-compensation are still commonly seen, victims of mining accidents now receive much more generous compensation than before. Furthermore, safety standards have been notably raised in the mines.Footnote 68 Therefore, the party-state's cadre management system significantly shapes the behaviour of local governments.
Capacity for conflict resolution
We argue that the conflict resolution strategies employed by local governments in China, which require extensive and often personalized contacts and negotiations between the mining firms and local citizens, rely heavily on the party-state's deep reach into society. Unlike the rentier states in other resource-rich countries, which comparative studies find typically lack socially intrusive and elaborate bureaucracies,Footnote 69 local governments in China, including those in mining areas, maintain a fair degree of control over the economy and society. The extensive and close contacts grassroots officials maintain with both the extractive industries and local citizens equip local governments with a valuable toolkit they can use to broker agreements between conflicting parties and settle disputes.
Although China has gradually moved away from totalitarian rule since the end of the Maoist era, the party-state continues to exert its control over the economy and society through its grassroots organs. In what is generally referred to as local state corporatism, the local state and the business sector maintain close contacts and exchange favours.Footnote 70 Local governments and their administrative departments deal with enterprises on a daily basis for regulation, taxation and policy implementation purposes, etc. Local governments can hand out favourable policy treatments as well as inside information that may generate business opportunities for mining companies in exchange for the latter's cooperation on various issues. When mediating in resource conflicts, local governments often resort to informal negotiations with the mining companies. Bearing in mind any potential future benefits such as policy favours, and fearful of any retaliation such as the imposition of unusually stringent environmental regulations, mining companies tend to comply with local government requests. Meanwhile, owing to the extensive contact between state and business, local officials are able to build up ties with the owners and managers of mining companies on a personal level. Personal favours and “face giving” (gei mianzi 给面子) can also prove to be useful tools in informal negotiations – which are often conducted across dining tables and after glasses of wine. Only when such informal negotiations fail do local governments resort to coercive means, such as cutting water and electricity supplies, to pressure the companies into submission.
Besides this bargaining power, the party-state maintains a strong capacity to mobilize resources from within the mining sector. The government collects a large variety of taxes and non-tax levies from the resource sector. With resource-generated fiscal revenues, local governments can afford to hand out the aforementioned social welfare benefits through the fiscal system. More directly, the non-tax levies provide important funding sources for local governments to settle resource conflicts with compensation.Footnote 71 Moreover, the personalized state–business relations allow local governments to solicit financial support from the mining companies for public services, infrastructure projects and welfare benefits for local citizens on an ad hoc basis. To give face to local leaders and cultivate a favourable environment for their operations, mining companies would normally accommodate these requests. Some mining entrepreneurs even actively participate in charity work in order to build a reputation as a philanthropist, which not only generates good publicity for business purposes but also helps them to gain the support of local leaders when they wish to gain a seat on the local people's congress, people's political consultative conference or any other such political position.Footnote 72 Basically, there are many channels through which local governments can mobilize resources from mining companies and redistribute them to local citizens for the purposes of conflict resolution.
At the same time, partly as a legacy of the Party's mass line (qunzhong luxian 群众路线), the party-state still strives to maintain close and frequent contact with local citizens. In many Chinese localities, county and township-level officials are required to visit the villages under their jurisdiction frequently and station themselves in rural households, during which time they are expected to socialize with the villagers and answer their needs. This interaction allows grassroots officials to forge personal connections with villagers and gain their trust. In Chinese society, social networking still plays an important role and personal favours are highly valued; such personal ties and trust therefore are essential tools for communication and persuasion, especially in rural communities. Moreover, village cadres, although not formally part of the nomenklatura system, are instrumental in extending the state's reach into rural communities. When township or higher-level officials are unable to come to an agreement with protestors, they often summon village Party secretaries and delegate the difficult tasks to them. The village cadres will then recruit their personal connections within the villages and impose social sanctions in order to pressure the uncooperative villagers into compliance.Footnote 73
Therefore, the cadre management system fundamentally shapes the incentive structure of local governments and officials in resource-rich regions, while the party-state's extensive reach at the grassroots level gives it the capacity to resolve resource conflicts and prevent popular grievances from escalating into a major threat to regime stability.
Conclusion
Resource conflicts are widespread across China and arise mostly because of the unaccounted and uncompensated negative externalities associated with the resource sector. Under China's weak rule of law, aggrieved citizens often fail to reach agreement with mining companies regarding levels of compensation either through private negotiation or judicial procedures, and consequently tensions can quickly escalate into organized protest and unrest. We find that the Chinese state has devised a range of coping strategies. In reaction to existing conflicts, local governments in mining areas actively mediate between the conflicting interests to broker agreements on compensation, and as a backup, they also skilfully suppress collective protests. More importantly, they proactively intervene in dispute-prone processes, create resource-based economic opportunities, and redistribute resource wealth to mitigate popular grievances against the resource sector. Compared to compensation and suppression, which use payouts and coercion to make protestors accept the reality, the pre-emptive strategies change citizens' preferences and mindsets and improve relations between the mining sector and local citizens. It seems that the Chinese party-state has many more tools with which to handle social conflicts than the existing literature has realized. The diverse and sophisticated strategies for conflict resolution help to explain the resilience of the Communist regime in the face of mounting social volcanoes.
The implementation of these strategies requires both incentive and capacity on the part of the implementers, the local state. We argue that the party-state's tight control over local officials provides the ultimate incentive for local governments to respond to citizens' complaints to certain degrees. Although the existence of natural resources in China breeds corruption and collusion between local governments and mining businesses,Footnote 74 the cadre management system largely ensures the loyalty of local agents and prevents total capture by resource interests. Meanwhile, the party-state's deep reach into society enables the local state to negotiate between the mining sector and local citizens. Without the many tentacles of grassroots governments and Party organs reaching into the economy and society, the local state would find it difficult to broker agreements between the conflicting interests and mobilize resources to compensate the victims. Therefore, it is the coexistence of local government incentive and capacity that proves to be indispensable in resource conflict resolution in China.
We argue that the key to resolving resource conflicts is to establish some redistributive mechanisms between the winners and losers in the resource economy. The Chinese strategies largely follow this logic, but not without flaws. One fundamental flaw is that these strategies are based on bargaining instead of the rule of law, in the sense that the resolution of resource conflicts does not follow clearly defined rules or procedures, but depends on the relative bargaining power of the involved parties. For example, when local governments face mining companies with stronger bargaining power, such as larger firms that carry more weight in the local economy or those with stronger political connections, they may be more inclined to leniency and so sacrifice the interests of local citizens. Alternatively, if the citizens adopt highly disruptive means to advance their requests, local governments may put more pressure on mining companies to give higher compensation sums in order to settle the disputes. Thus, bargaining-based conflict resolution can be arbitrary, outcome oriented, and incongruous with procedural justice. Furthermore, this form of resolution may defuse immediate conflicts but it cannot eradiate the root of the problem, the unfair distribution of benefits and costs of the resource economy, which should be addressed through the proper and legal regulation of mining industries, standardized accounts of their associated negative externalities, and institutionalized compensatory mechanisms based on the rule of law.
Acknowledgement
The authors acknowledge the financial support of the Hong Kong Research Grants Council (Project ID 14601915) and National Social Science Foundation of China (Project ID 13BGL120). They are grateful for comments by Anita Chan, Stacy Renee Closson, Jiang'ai Dong, Heng Han, Yiqiang Liu, Victor Menaldo, Sara Newland and Yuying Tong on earlier versions of this article. The authors also wish to thank Chuanmin Chen, Haiyan Duan, Jinying Liao, Fenglian Ma, Keke Xi, Ting Xie, Huiteng Zhang and Yuyi Zhuang for their valuable assistance at various stages of this research. All errors remain the authors' own.
Biographical notes
Jing Vivian Zhan is an associate professor in the department of government and public administration, the Chinese University of Hong Kong. She specializes in comparative politics and methodology, with a focus on the political economy, intergovernmental relations and local governance of contemporary China.
Zeng Ming is a professor of public administration at Nanchang University. He received his PhD in political science from Nankai University. His research interests focus on public finance and local governance.
Appendix
Table 1: Basic Statistics of Field Sites
