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CCE-066 ｜ Does Federalism Offer an Institutional Option for China’s Future?

Free China Movement

CCE-066 ｜ Does Federalism Offer an Institutional Option for China’s Future?

v1.0 ｜ 2026-10-20

CCE-100 Civic Education Project · Index entry CCE-066

Does federalism offer an institutional option for China’s future?

Abstract: Federalism is a state structure in which the constitution divides power between the national government and member units, and neither side can unilaterally rewrite that division. This article’s answer is: as an institutional option, federalism truly existed in modern Chinese intellectual history, and it was repeatedly proposed by different camps — including the Chinese Communist Party itself in 1922; but it is not a key that can work on its own. For federalism to play its roles of dividing power and protecting minorities, three preconditions must hold: the constitution must be genuinely binding, there must be independent adjudicating institutions, and local officials must answer to local voters rather than to their superiors. Under one-party rule, economic “de facto decentralization” can exist, but it can be taken back by the center at any time; in a democratic transition, federal designs drawn along ethnic lines could amplify separatist pressures. Federalism is therefore more like a design question that comes after democratic constitutionalism is established, not a shortcut around democracy.

I. Two Fates Under One Country Name

In July 1922, the Second National Congress of the Chinese Communist Party adopted a manifesto in Shanghai. The manifesto listed the party’s objectives at the time; Articles 4 and 5 read: “the three territories of Mongolia, Tibet, and Hui-Jiang shall practice autonomy and become democratic autonomous states”; “using the free federal system, unify China proper, Mongolia, Tibet, and Hui-Jiang, and establish the Chinese Federal Republic.”[1]

Eighty-six years later, in December 2008, Charter 08 — drafted by Liu Xiaobo and others and initially co-signed by more than 300 people from various walks of life — was published. Its Article 18, titled “Federal Republic,” proposed “to explore with great wisdom the possible paths and institutional designs for the common prosperity of all ethnic groups, and to establish the Chinese Federal Republic within the framework of democratic constitutionalism.”[2] On December 25, 2009, the Beijing No. 1 Intermediate People’s Court sentenced Liu Xiaobo to eleven years’ imprisonment for “inciting subversion of state power.” According to related reporting, the judgment cited content from Charter 08 including this very sentence.[3]

The same country-name idea: the first came from a party that would later take power; the second from a group of citizens with no power at all — and their fates could not have been more different. This fact alone cannot prove federalism good or bad, but it prompts this article’s first judgment: in mainland China, federalism was never just an administrative-technical question; it directly touches on “who has the right to decide how power is divided.”

II. Getting the Concept Straight

Federalism is not synonymous with “local governments having a lot of power.” Comparative politics usually identifies it with three criteria: first, there are at least two levels of government, each governing the same citizens directly; second, the powers of the two levels are divided by the constitution, not granted by the center through ordinary legislation or executive orders; third, this division cannot be changed unilaterally by either level of government — constitutional amendment usually requires the participation of member units, and disputes over jurisdiction are adjudicated by courts or similar independent bodies. In his classic 1964 study, American political scientist William H. Riker defined federalism precisely as the constitutional arrangement in which each of two levels of government has final decision-making authority in at least one domain.[4]

By contrast, in a unitary state local power is granted by the center and can be taken back by the center. A unitary state can also be highly decentralized — for instance, with locally elected chief executives and independent local tax bases; a federal state can in practice be highly centralized. The key to telling the two apart is not how many things local governments “manage,” but where local power “comes from and whether it can be taken away unilaterally.”

Two paths to federalism must also be distinguished. In 1999, political scientist Alfred Stepan pointed out that American-style federalism is a “coming-together” of originally independent units; India, Spain, Belgium, and others are originally unitary states that devolved power to localities in order to maintain unity — “holding-together.”[5] If mainland China ever discusses federalism, the only realistic path would be the latter. That means the federation would not be negotiated by the provinces, but decided by a nationwide constitution-making process.

III. What the CCP Government’s Constitution Says

The preamble of the current Constitution of the People’s Republic of China states that the PRC is a “unified multi-ethnic state” jointly founded by the people of all ethnic groups. Article 3 provides that state organs practice democratic centralism, and that “the division of powers between central and local state organs follows the principle of giving full play to the initiative and enthusiasm of the localities under the unified leadership of the center.” Article 4 provides that regional autonomy is practiced in areas where ethnic minorities live in concentrated communities, while emphasizing that “all ethnic autonomous areas are inseparable parts of the People’s Republic of China.” Article 31 provides that “the state may establish special administrative regions when necessary,” and that the systems implemented in the special administrative regions “shall be prescribed by law by the National People’s Congress.”[6]

By the three criteria above, this is a textbook unitary design: local powers are arranged by national legislation “under the unified leadership of the center,” with no member-unit participation in constitutional amendment and no independent body to adjudicate power disputes between the center and localities. The “high degree of autonomy” of Hong Kong and Macao is the same. A white paper published in June 2014 by the State Council Information Office, The Practice of the “One Country, Two Systems” Policy in the Hong Kong Special Administrative Region, states that the center has “comprehensive jurisdiction” over the Hong Kong SAR, and that Hong Kong’s high degree of autonomy “is not inherent; its sole source is the authorization of the center.”[7] That sentence is almost the mirror image of the definition of federalism.

The CCP’s official party-history narrative also acknowledges this as a turn. An article titled “Establishing a Unitary Multi-Ethnic State” on the party-history channel of People’s Daily Online admits that the Second Congress manifesto advocated federalism to achieve the united unity of all ethnic groups, but criticizes the proposal as having “a rather heavy color of dogmatism and ‘economic determinism,’ basically copying” the Soviet and Comintern model.[8]

IV. The Questions Federalism Claims to Answer

Those who advocate federalism usually point to three problems.

First is scale. Mainland China has more than thirty provincial-level administrative units; many provinces have populations exceeding those of a mid-sized European country, and economic structures, languages and cultures, and levels of development vary widely across regions. Having one central government decide education, health care, household registration (hukou), and industrial policy for all of them distorts information and accountability layer by layer. Federalism allows different regions to make different choices, and lets failed policies exact their price only locally.

Second is constraining power. A constitutional division of powers adds, alongside the horizontal separation of legislative, executive, and judicial powers, a vertical division: the center cannot arbitrarily strip localities of their fiscal and personnel powers, and localities cannot override nationwide basic-rights protections. Article 2 of Charter 08, “Separation of Powers and Checks and Balances,” proposes exactly this: “establish a system of separation of powers and checks and balances between the center and localities; central power must be clearly defined and authorized by the constitution, and localities shall practice full autonomy.”[2]

Third is multi-ethnic regions and special regions. Regional autonomy in places like Tibet, Xinjiang, and Inner Mongolia is granted by the center under the current system and directed by party committees at every level. Some exiled scholars and democracy-movement figures — for example Yan Jiaqi in his 1992 book The Federal China Idea — advocate using federal or even confederal arrangements to accommodate differences across regions.[9] Charter 08 also placed the federal republic together with safeguarding the free institutions of Hong Kong and Macao, cross-Strait reconciliation, and the common prosperity of all ethnic groups in the same article.[2]

One thing must be made clear here: the Republic of China (Taiwan) is a political entity that practices democratic constitutionalism, with its government elected by the people. No “federal” scheme can be applied to Taiwan without the democratic consent of the Taiwanese people; Charter 08 itself only speaks of “equal negotiation and cooperative interaction.” Treating federalism as a ready-made solution to the Taiwan question is a misuse of the concept.

V. Two Moments When Practice Came Close

The “provincial self-government” movement of the early 1920s was the closest federal thinking ever came to practice in China. Hunan, Zhejiang, Guangdong, and other provinces successively drafted or passed provincial constitutions. The Hunan provincial constitution was promulgated on January 1, 1922; in a circular telegram that May, the provincial assembly convened under it stated that drafting a provincial constitution was intended to promote a national constitution and seek unification.[10] The Zhejiang provincial constitutional assembly promulgated its provincial constitution on September 9, 1921 (commonly known as the “Double-Nine Constitution”), but that October the provincial assembly, on the grounds that it had not been put to a province-wide popular vote, resolved to suspend its implementation.[11] A November 1922 commentary in The Eastern Miscellany compared in detail how the provincial constitutions of Hunan, Zhejiang, Guangdong, and Jiangsu selected their chief executives — showing how detailed institutional design was at the time.[12]

Yet most of these documents never left the paper they were written on. Warlords used “self-government” as a cover to carve out their own territories, and provincial constitutions became tools for holding territory. Precisely for this reason, the Second Congress manifesto, while advocating the “Chinese Federal Republic,” explicitly opposed “warlord-style provincial self-government.”[1] Even earlier, in 1917, an essay “A Sketch of the Provincial System” in The Eastern Miscellany proposed a provincial system “resembling federalism yet not federal,” in which a province would be both a national administrative district and a local self-governing body.[13] This shows that the debate at the time already went beyond the two extremes of federalism and centralization.

The second moment came in 1946–1947. The Political Consultative Conference discussed having provinces draft their own constitutions and elect their governors by popular vote.[14] The Constitution of the Republic of China, which took effect in 1947, ultimately adopted a compromise “equal power” (均权) design: Articles 107–110 enumerate the powers of the center, provinces, and counties respectively; Article 111 provides that matters not enumerated, “if national in nature, belong to the center; if province-wide in nature, belong to the province; if county in nature, belong to the county,” and that “in case of dispute, it shall be resolved by the Legislative Yuan”; Article 112 allows provinces to convene provincial assemblies of people’s representatives and, in accordance with the general principles of provincial and county self-government, to enact provincial self-government laws.[15] This is not federalism: jurisdictional disputes are adjudicated by the central legislature, and provincial self-government laws must conform to centrally enacted general principles. But it was a division of power written into the constitution and protected by it.

This design was never implemented in mainland China. In the Republic of China (Taiwan), it was long frozen by martial law and the mobilization-for-communist-rebellion regime; after democratization, the 1997 constitutional amendments actually streamlined the provincial level, and the Local Government Act promulgated in 1999 stipulates that “the province is not a local self-governing body.”[16] A society that had already democratized chose to shrink rather than expand the intermediate tier. This reminds us that federalism is not a necessary product of democracy, but a structure a democratic society may — or may not — choose.

VI. “Chinese-Style Federalism”: Decentralization Without Constitutional Protection

In the 1990s, some economists used “federalism” to describe post-reform mainland China. In 1995, Gabriella Montinola, Yingyi Qian, and Barry R. Weingast published “Federalism, Chinese Style” in World Politics, arguing that the fiscal contracting system let local governments retain revenue and compete with one another, forming a “market-preserving federalism” that constituted the political basis for economic growth.[17] In 2007, Yongnian Zheng further proposed the concept of “de facto federalism,” referring to the decentralized pattern formed by institutionalized bargaining between the center and the provinces.[18]

These studies happen to show exactly how fragile decentralization is without constitutional protection. In 1993, Shaoguang Wang and Angang Hu warned in their Report on China’s State Capacity that the center’s fiscal extractive capacity was too low.[19] The next year, the CCP government implemented the tax-sharing reform, and the center’s share of fiscal revenue immediately rose sharply. Decentralization was given by the center, and the center could take it back. In 2006, Hongbin Cai and Daniel Treisman went further, questioning whether decentralization was really the cause of growth and arguing that many key reforms were in fact driven by the center.[20] In 2017, the CCP’s 19th National Congress wrote “the Party leads everything — the Party, government, military, civilians, and scholars; east, west, south, north, and center” into the Party constitution, further narrowing the space for local autonomy.

“De facto federalism” has its analytical value, but what it describes is how much the center is willing to give up, not how much localities have the right to keep. By the criteria of Section II, it is not federalism.

VII. The Strongest Objections

The arguments against federalism deserve to be taken seriously; they are not only the CCP government’s position.

First, the risk of secession. The three socialist federations that disintegrated at the end of the twentieth century — the Soviet Union, Yugoslavia, and Czechoslovakia — all divided their member units along ethnic lines. Valerie Bunce’s 1999 study argues that this ethnic-federal structure provided ready-made territory, institutions, and elites for the later secessions.[21] If mainland China hastily implemented a federation organized around ethnic autonomous areas during a transition, it could face a similar risk.

Second, local despotism. Federalism protects local governments, not necessarily local citizens. The southern U.S. states once maintained racial segregation in the name of “states’ rights” until federal courts and federal legislation intervened. Without free local elections and an independent judiciary, federalism would merely divide one large despotism into dozens of small ones. The warlord fragmentation of the 1920s is a ready-made example.

Third, the question of sequence. Federalism depends on a constitutional court capable of constraining the center, on member units’ veto power in constitutional amendment, and on local voters being able to remove local officials. Under one-party rule, even if these institutions were written on paper, they would remain on paper just like the 1921 Zhejiang provincial constitution. In this sense, discussing federalism under one-party rule gets the sequence backwards.

Supporters respond: secessionist pressures come more from long-term repression than from federal arrangements themselves; “holding-together” federations like India and Spain have maintained national integrity within a democratic framework to this day, although disputes such as Catalonia’s have never disappeared.[5] As for local despotism, it can be constrained by nationwide uniform basic-rights provisions and national courts. This debate has no conclusion to this day — and the debate itself shows that the effects of federalism depend on specific designs and accompanying conditions.

VIII. Limitations of This Article

First, regarding the Liu Xiaobo judgment’s citation of the “federal republic” clause, this article relies on second-hand reporting and has not checked the original judgment text. Second, on the relationship between federalism and economic growth and ethnic conflict, the empirical literature is deeply divided, and this article cites only a few representative studies. Third, this article discusses an institutional option and does not predict mainland China’s political trajectory; any arrangement involving the Republic of China (Taiwan) must be premised on the democratic will of the Taiwanese people.

IX. Conclusion

Back to the question: does federalism offer an institutional option for China’s future? The answer is yes, but conditional.

It is a real option, with a century of intellectual history: from the provincial-constitution movement of the 1920s, to the CCP’s own 1922 program, to the “equal power” provisions of the 1947 Constitution of the Republic of China, to Charter 08 of 2008. The questions it seeks to answer — how to govern a super-large state, how to constrain power vertically, and how multiple ethnic groups can coexist — are also real.

But federalism cannot substitute for democracy. Every one of its functions depends on a binding constitution, courts that can adjudicate independently, and local officials elected by local voters. Without these conditions, federalism becomes either unenforceable paper provisions, or a cloak for warlord fragmentation, or “de facto decentralization” that the center can take back at any time. The experience of the Republic of China (Taiwan) also reminds us: even after democracy is achieved, a society may choose a simpler structure.

So a more accurate question may not be “whether mainland China should adopt federalism,” but “whether the people of mainland China have the right to publicly discuss and themselves decide how power is divided.” In 1922 the CCP could openly advocate establishing the “Chinese Federal Republic”; citizens who proposed the same idea in 2008 ended up behind bars. The distance between those two is the heart of the matter.

Sources

Review record: Editorial independent review, 2026-10-19. Verdict: PASS.

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