China's Future is a Flexible Federal System

China has been trying to modernize itself for the past 100 years. But China still faces major hurdles going forward. Two major issues stand out, China's political mindset and the level of diversity and complexity it faces.

The dominant Chinese political mindset is about achieving absolute power and control by suppression. This power obsession was true in dynastic China and still very true under the communist rule today.

Absolute power and suppression can only lead to cycles of instability. Two thousand years of dynastic China clearly showed this cyclic characteristic. In the name of stability, dynastic China would sacrifice economic, technological and other human developments. Today, we see the same sacrifice in China's refusal of political reform and its insistence of "stability trumps everything". It is time China outgrows this outdated political mindset.

The other major difficulty China faces, is the diversities within its border. The diversities include ethnic, religion, linguistic, cultural and geographical. Currently, there are independent and self rule demands from Taiwan, Tibet and Xingjian. In addition to these demands, the current unrest among unemployed workers and peasants make the fear of disintegration real.

Power monopoly and suppression can not build a modern and vibrant China. It will only stifle it. Diversities need to be cherished and given freedom to flourish.

The goal of a modern China must be of human development and security. It must allow its provinces and regions the freedom and dignity of self governance. At the same time the central government must guaranteed individual and minority rights. A flexible federal system is called for if China desires to hold all its diversities together.

This paper examines the Canadian experience to see what lessons we can learn for the future China. This paper is limited in its scope in that it covers only the Canadian experience. However, the Canadian experience is of particular relevance. Canada is particularly creative in its handling of a multi-race society and the Quebec Independence Movement.

The current Canadian effort in adapting to the internet and globalization world is also of value. A Historical Outline of the Canadian Federation

Before the Canadian federation was formed, Canada already had many existing communities. These were the colonials scattered across the land. They were made up of two linguistic groups, the French colonials in Quebec and the English colonials in the rest of Canada. These communities formed the Canadian Federation in 1867.

>From 1867 to 1900, the first thirty years of confederation, most of the effort was spent on defining provincial power vs. federal power. This period established the fundamental nature of the Canadian federation. That is provincial power is fundamental and unchallengeable.

The 1960s and 1970s saw the rise of Quebec independence movement. This and other provincial rights triggered the Constitution Act of 1982. This Act stipulates a 2/3 majority of the provinces is required for any constitutional amendment. More importantly it added the Charter of Rights and Freedom to the Constitution to safeguard individual rights across the land. This is a federal responsibility and any separation will have to address the Charter's concern.

The Charter brought in a new dynamic and tension between provincial rights and individual rights. Quebec argued that an individual's potential can not be fully realized if the community he/she belongs to is not doing well. Therefore Quebec insists on the right to override individual rights in favor of collective rights (Bill 101, a bill for French language protection, overrides the Charter's freedom of expression right).

However, Quebec has not left Canada yet. This is largely due to the fact that Quebec is its own master within the province. At the same time it enjoys the benefit of being a part of Canada. This is better than being an independent but a very small country (6 million populations) and faces the real threat of assimilation by the English speaking North America.

Characteristics of the Canadian Federation

The Canadian system is a constitutional federation. This means sovereignty belongs to the people. It also means the division of power between the federal and the provincial government is spelled out in the constitution. The Supreme Court has the final authority in the interpretation of the constitution. It also acts as the umpire between the two levels of government. The Canadian system is also a distributed and asymmetrical federation. The provincial power is roughly equal to that of the central government, but of different nature. Asymmetry arises due to the diversities between regions. The Canadian system allows different treatment of the provinces.

The Canadian system relies on flexibility in processes to function well. These include delegation of power, joint programs, tax and funding arrangements. The flexible process approach proved to be far more successful than the route of constitutional amendments.

The Canadian success is also due to the authority of the Supreme Court being accepted and obeyed by both levels of government.

The key features of the modern Canadian federation can be summed up as: individual rights and freedom, a vision of multiculturalism, and a distributed and asymmetrical federalism. Multiculturalism means equality in identity, and pride in ancestry, so that citizens feel secured and self confident. They will then be more open and accepting of other cultures leading to harmony.

The Canadian Mindset in Nation Building

>From the beginning, the provincial power movement in Canada was motivated by the liberal ideal of self government. The 1982 addition of the Charter of Rights and Freedom is also based on liberalism but focused at the individual level. Although there are tensions between individual vs. collective rights, they both sprang from the same root of liberalism. Liberalism here means the belief in self government, the rule of law and freedom. Going forward, the Canadian approach will continue to seek a balance between individual vs. collective freedom while maintaining peace, order and good governance.

This liberal tradition contrasts starkly with the Chinese tradition of absolute power and suppression.

The Canadian Federal Principles

The most important concept of the Canadian federation is that it is built on provincial consent and not the other way around.

It is based on the principle of divided sovereignty. Each level of government is given its own exclusive jurisdictions by the Constitution.

It is also based on the principle of equality. Each level of government has roughly the same power, but of different nature, so that one level of government can not overwhelm the other. Over the years, some powers were transferred from one level of government to the other by mutual agreements.

The Division of Power and Responsibilities in the Canadian System

Provincial exclusive power of property and civic rights include: provincial tax, provincial land and resources, hospitals, charities, local works, solemnization of marriage, property rights and administration of justice. Federal exclusive power of trade, commerce and external affairs include: public debt and property, trade, commerce, regulations, money bills, taxation, postal service, military, navigation, shipping, currency, banking, Indian Affairs, naturalization, criminal law (anti-hate and anti-discrimination laws), external affairs, old age security, Canada Pension, equalization, progressivity of income tax.

The Asymmetries of the Canadian Federation

Quebec has its own income tax, corporate tax, pension fund, immigration policy, and civil law. The other provinces have the same options but choose not to. Quebec also insists on having its own stock market and deposit insurance corporation. In Bill 101, Quebec overruled the Charter on freedom of expression to protect its language. Quebec is also holding out on the signing of the constitution, demanding a distinct society status. Recently, Quebec is allowed external interfaces in UNESCO and OECD.

Beyond Quebec, the federal government has different programs for the Atlantic, Prairie and Pacific Regions.

The Rule of Secession and the Clarity Act of 2000

In Aug 1998, the Supreme Court of Canada ruled that a province has no right to secede unilaterally under the Canadian Constitution, nor under the international law for self determination. The key word here is "unilaterally". However, a province has the right to hold referendums on the question of secession. If the majority of the population of that province agrees, the rest of Canada has the political obligation to enter into negotiation.

In June 2000, the Clarity Act was passed by the Parliament of Canada to put into effect the Supreme Court's ruling on secession. The Act gives the Parliament the right to determine if the language of a referendum for secession is unambiguous (a referendum to authorize negotiation, or for some form of economic or sovereign association are not considered clear intent of secession). The parliament also has to determine if a clear majority of the population has voted in favor of secession. Simple majority is not acceptable. Only when both conditions are satisfied, will the negotiation begin.

The Clarity Act further spell out the negotiation will involve the federal government and all the provinces. The negotiation will have to settle aboriginal rights and land claims, minority rights and the settling of assets, debts, liabilities and the new border of the seceding province.

Internet, Globalization and Their Impacts on Federalism

Migration of some sovereign power to supra-national bodies such as FTA, WTO and various UN bodies has already begun in the internet and globalization age.

In the internet world, regions and individuals have direct access to the wider world. In some aspects they can be the more effective agent of change than the central government. Regions need to be consulted more often now for trade policies and development programs.

Canada has recognizes this trend and is moving in the direction of further distribution of central power to the regions. This will allow each region to develop its own competitive advantages, and become more effective in the new knowledge based economy.

In the new age, the Canadian government's role in managing a multi race society is more in the setting of national standards and social policies. These include health care, welfare, social security, immigration, multiculturalism, anti-discrimination and anti hate laws, and the balance of development and equalization payments.

What have we learn from the Canadian for the future Chinese Federation?

If the Canadian federal experience has any lesson for us, I believe they are the following. First we must affirm that human freedom and development are the goals and foundation of a modern and vibrant society, not power monopoly and suppression. In addition we must affirm the dignity and the right of self government for regions and minorities. We must also be careful to balance individual rights vs. local collective rights.

Further, the design of federal vs. provincial/regional power can use the Canadian model of exclusivity of jurisdiction, roughly equal division of power, and provincial consent as the true base for federalism.

Flexibility and adaptability are keys to success in the coming age of internet and globalization.

Rule of law and the Supreme Court as the final authority on constitutional matters are crucial for the success of a federal system.

The Canadian Supreme Court ruling on secession is also valuable for our consideration. Joining the federation via consent and leaving must be via negotiation. Minority and individual rights must be protected during the secession process.