If you read Chinese news, you’ll often see the term “Pilot Scheme.” But what does it mean and why does it seem like China is creating pilot schemes for just about everything? When did it all start?
"Pilot Schemes" is one way of referring to pilot projects, trial runs, policy pilots and the like. They are generally understood as a process whereby higher levels of the Chinese government submit a given policy to repeated trials on a small scale before implementing it. From the establishment of special economic zones and reforms to the pension system to the national carbon trading scheme, the concept of pilot schemes is an integral part of China’s reform and opening-up. As a feature of the country’s governance originating in the early phases of its revolutionary period, the distinctly "home-grown" Chinese-style of implementing pilot schemes has contributed significantly to the country’s development.
Throughout its move towards modernization, China's pilot scheme system has shown itself to be resilient and surprisingly adaptable and flexible in many policy areas. As one of the most frequently used practices in Chinese policy-making, they have been especially crucial to China's recent surge in growth. Policies that were implemented, such as the aforementioned coastal economic zones and carbon emissions scheme to social policies like pension and medical care – all began as pilot schemes.
Pilot Schemes or “policy pilots” involve a process of trial and error with ongoing collaboration between higher-level government and a designated body to handle a given pilot. Together, they outline an implementation plan before a policy is officially adopted and rolled out at full scale. This method has been used so consistently over the past 30 years that it has become a standard feature of Chinese governance, one that nurtures innovation.
Naturally, this concept didn’t suddenly materialize from an individual leader’s moment of inspiration. It dates back to China’s revolutionary period and has been developing ever since.
Progress Taking Shape
Starting in 1928, Mao Zedong (毛澤東) made several small-scale attempts at land reform in Jinggangshan (井岡山) and Dengzihui (鄧子恢) in western Fujian. These early experiments would provide practical experience and lay the foundation for future land policies. Later, the central government would implement policies throughout the rest of the country based on their performance in a few “typical” regions.
Some studies have pointed out that Deng Zihui, the founder of the western Fujian base area, was the first to put forward a "point-to-face" policy test during the land reform movement. It was Mao Zedong, however, who would refine and promote it to a widely applicable procedure.
After entering the period of the Second Sino-Japanese War, those working methods, mainly derived from the practice during land reform, was applied to other fields due to its effectiveness.
In the period of the Liberation War, pilot schemes were even more extensive as they became a typical phase of new policies under consideration and evolved from work experience in a specific field to a universal methodology.
After the founding of the country, the pilot scheme approach was applied to various government agencies. On September 20, 1963, The People’s Daily published an editorial with a comprehensive and systematic assessment of the approach. Since then, ideas like “typical trials,”(典型試驗) “typical models,”(典型示範) “from narrow to wide,”(由點到面) “gradual promotion”(逐步推廣) and “broad but focused vision”(點面結合) have kept their original meanings and become key phrases in China's political lexicon.
As China continued to modernize, this method played a larger role in supporting the country’s economic and social transformation. Framing debate around such trials across different fields almost became the sole accepted method when faced with challenging issues. Likewise, the emphasis on experimentation continued to make its way into important reports, embedding itself in the ideology driving China’s advances.
Since the early 2000s, as the government’s role has evolved, pilot projects have continued to roll out across China, culminating in a system made complete by decades of precedent.
pilot reports of the People's Daily from 1992 to 2003
The graph above summarizes the results of a study conducted by Mei Ciqi (梅賜琪), Wang Xiaonan (汪笑男), Liao Lu (廖露), Liu Zhilin (劉志林) and others based on the pilot report of the People's Daily from 1992 to 2003, which covers all aspects of economic development, social welfare, environmental protection, science, education and culture.
The most widely-known example of a pilot scheme are China’s special economic zones, used as early-stage troubleshooters to test policies and economic regulations before opening up to the global economy.
Other pilot schemes that have contributed to China’s success include family planning, relaxing the one-child policy, reform of state-owned enterprises, changes to the educational and scientific research system, commercialization of housing, Tax for Profits, the urban social security system, farmland-to-forest reclamation, RMB cross-border trade settlements, reform of public hospitals and carbon emission policies and measures.
Among these, some projects were selected by policy-makers first and then gradually promoted based on successive outcomes until they reached full implementation. For instance, the initial four special economic zones were established in the coastal areas of Guangdong and Fujian. Eventually 14 coastal port cities were opened to overseas investment. This led to a series of other special economic development zones and open ports that in turn catalyzed other developments throughout the country.
Other pilots stem from a temporary delay in government action (a game of “wait and see”) or situations where decision-making or the policy statement is ambiguous. These scenarios offer regions, departments, and other agencies room to propose stronger or better ideas after which the government can renew its support in formulating concrete visions for policies before promoting them more widely. The rural housing contractors and self-employed workers are examples of this.
Regardless of the type of Pilot Scheme, its inception typically involves three steps:
First, a pilot zone is designated within a given area. Selected cases that demonstrate the success of the pilot’s objectives are then highlighted as typical experiences before the pilot is expanded to a wider area and finally, the trial continues.
Naturally, the overall feasibility of the policy is evaluated and its conditions adjusted based on the test results obtained during this period. That said, the process can be quite lengthy. The controversial Bankruptcy Law is a typical example. The bill began with its first trial implementation in 1984 and was only finally passed in 2017 after 23 years of repeated attempts to implement it undertaken by different cities, industries and enterprises.
However, not all Pilot Schemes will be promoted. Some scholars believe that getting a pilot scheme promoted is a transition from uncertainty to certainty and from dissonance to consensus: only when policy objectives are clear and the action plan is appropriate and only when the interests of all actors involved are consistent does a pilot become easy to promote.
Yet pilot schemes may just as easily fail. The interaction between local and central governments plays a key role in the process. Driving innovative policies depends on the appropriate division of labor and interaction between the two levels of government whether the approach is more top-down or a balance of the two. For one, it involves the central (superior) “absorbing” or acquiring the experience at the local (lower) level, then formatting it into an “advanced” or “standard” model that is gradually diffused to other areas and promoted.
In sum, the wider objectives of a policy are determined by the central government and specific implementation plans are deliberated by localities before being extended to the rest of the country.
A 1953 periodical on learning theory published by a cadre of academics summarizes the benefits of Pilot Schemes:
First, it can reduce the “guesswork” of implementing unfamiliar policies, providing specialists and the general populace opportunities to experience and observe new policies.
Second, new policies and systems trialled on a small scale allow locals to actively participate in the pilot, which can help it gain the support needed to build awareness across regions beyond the scope of the project.
Third, when a new policy is preceded by a pilot, it saves manpower, material resources and time.
Further, pilot schemes can accentuate the key benefits of a policy under consideration and generate replicable models that later shrink margins of error in the problem-solving process. This, in turn, reduces costs, nurtures creativity in local governments and reduces political risk and resistance.
As a phenomenon unique to Chinese policy-making, Pilot Schemes differ from traditional processes in The West in that they are sorts of “administrative experiments” that precede legislation, according to political scientist and sinologist Sebastian Heilmann.
China's “pilot then promote” approach to policy-making and implementation is the result of continuously and gradually summarizing and distilling the political experience, the embodiment of the popular saying "crossing the river by feeling the stones."
Throughout its lifetime, the pilot scheme system has gone through many stages with a different focus each time and has continued to evolve. However, what has remained constant is its tendency towards exploration and innovation as a means of spurring scientific and systematic innovation.
American scholar of Chinese politics and history Elizabeth J. Perry notes that certain factors in the Chinese revolutionary tradition (which included policy experiments) actually helped the country’s reforms toward a more market-based economy that has taken the world by surprise. Nassim Taleb, author of The Black Swan: The Impact of the Highly Improbable, believes that a country’s ability to innovate is not due to a difference of system per se (be it in terms of market or planned economy, democratic or authoritarian government), but simply due to China’s investment in "maximum trial and error."
In this sense, China's pilot schemes have created excellent conditions for national innovation while addressing uncertainties in the policy-making process and offering reliable scalable models that can serve the country’s diverse interests.
China's "Pilot Scheme" Research (中國「政策試點」研究) by Zhou Wang (周望) Tianjin People's Publishing House (天津人民出版社) 2013
Red Swan - China's unconventional decision-making process (紅天鵝——中國非常規決策過程) by Sebastian Heilmann (韓博天) The Chinese University of Hong Kong Press (香港中文大學出版社) 2018
Characteristics of the Pilot Scheme: a study based on the pilot report of the People's Daily from 1992 to 2003 (政策試點的特徵：基於《人民日報》1992-2003年試點報導的研究) by Mei Ciqi (梅賜琪), Wang Xiaonan (汪笑男), Liao Lu (廖露), Liu Zhilin (劉志林) Public Administration Review (公共行政評論) 2015 Issue8
Pilot Scheme: Mechanism and Internal Logic——A Case Study Based on China's Public Sector Performance Management Policy (政策試點: 發生機制與內在邏輯——基於我國公共部門績效管理政策的案例研究) by Liu Wei (劉偉) China Reform Forum (中國改革論壇) July 1, 2015
Local Pilot and National Policy: Taking New Rural Insurance as an Example (地方試點與國家政策：以新農保為例) by Zheng Wenhuan (鄭文換) China Administration (中國行政管理) 2013 Issue 2
Derivative Effects and Optimization Strategies of "Pilot Scheme" (「政策試點」的衍生效應與優化策略) by Zhou Wang (周望) Administrative Science Forum (行政科學論壇) 2015 Issue4
China's unusual policy-making process: trial and error in uncertain situations (中國異乎常規的政策制定過程: 不確定情況下的反復試驗) by Sebastian Heilmann (韓博天) History and Society (歷史與社會) July 23, 2009
China's "Pilot Scheme": Origin and Trajectory(中國「政策試點」：起源與軌跡) by Zhou Wang (周望) Fuzhou Party School Journal (福州黨校學報) Feb 15, 2014
How to Spread the Pilot Scheme: A Comparative Study Based on Real Estate Tax and Value-Added Tax Reform(《政策試點何以擴散：基於房產稅與增值稅改革的比較研究》) by Zhang Ke(張克) Journal of the Party School of Zhejiang Provincial Committee of the Communist Party of China (中共浙江省委黨校學報) 2015 Issue 2
Institutional Factors of Policy Testing: A Comparative Perspective between China and the West (政策試驗的制度因素——中西比較的視角) by Ning Sao(寧騷) New Vision (新視野) 2014 Issue 2
China's "Policy Trial" Study: Issues, Significance and Prospects--A Perspective from the Policy Process (中國「政策試驗」研究：議題、意義與展望——以政策過程為中心視角) by Zhu Guangxi (朱光喜) Journal of Guangdong Administration College (廣東行政學院學報) 2013 Issue 4