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A Supplement to Heilmann’s “Experimentation Under Hierarchy”: The Politics of Chinese Industrial Innovation in the Xi Era

Introduction The Chinese Communist Party’s (CCP) policymaking and implementation processes are often opaque, as is the process of policy innovation and diffusion. Some scholars have analysed how policy innovations introduced by local governments are developed into nationwide reforms (Florini, Lai, and Tan 2012). Sebastian Heilmann has suggested the term “experimentation under hierarchy” to describe China’s policy innovation and implementation process. According to Heilmann, there are two important elements in this process: “model experiments” (dianxing shiyan 典型試驗), or pilot projects, and “proceeding from point to surface” (youdian zhimian 由點至面), or diffusion. Heilmann argues that, during the process, the central government always plays a leading and regulating role (2008a, 2008b, 2018). He explains how policies tried and tested through pilot projects are diffused nationwide. Under Xi Jinping, the CCP has emphasised the concept of “top-level design” (dingceng sheji 頂層設計) (Schubert and Alpermann 2019), which requires local governments to follow the central plan (guihua 規劃) for their locality when introducing policy innovations.^[1] In this article, we take the case of the industrial innovation policy proposed by the CCP under Xi Jinping as an example. In 2014, the CCP announced the shuang chuang (雙創) policy framework (full title: “An entrepreneurial people, an innovative populace,” dazhong chuangye, wanzhong chuangxin 大眾創業, 萬眾創新).^[2] Then in 2015, the central government released a document entitled the “Guiding Opinions of the General Office of the State Council on Expanding Makerspace and Promoting Innovation and Business Start-ups by the General Public” (Guowuyuan bangongting guanyu fazhan zhongchuang kongjian tuijin dazhong chuangxin chuangye de zhidao yijian 國務院辦公廳關於發展眾創空間推進大眾創新創業的指導意見, referred to hereinafter as the “Guiding Opinions”). According to this guidance, the shuang chuang policy is to be implemented by local governments in harmony with local conditions and in line with the central plan for their area. In this article, we examine how shuang chuang has been implemented in two provinces: Fujian and Guangdong. In the case of the former, the main approach has been to link the policy with united front work directed at Taiwan, while in the latter case, shuang chuang implementation has focused on attracting high-tech companies. In short, it appears that local policy innovation is subject to central government design. Almost all the policy innovation processes introduced during the Xi period follow the pattern of Heilmann’s “experimentation under hierarchy,” but they also include another component: “nationwide coordinated work” (quanguo yipanqi 全國一盤棋), which implies that the central government treats the country as a chess board and local governments as the chess pieces. Just as a chess player must have a holistic view of the game and make sure that each piece on the board contributes to their ultimate victory, so must the CCP make sure that local governments contribute to its victory in the political “game.” In our opinion, local governments, under central guidance, adapt their policies to suit local conditions while staying in line with the overall plan laid down by the central government for their region. The results of these local policies are fed back to the central government so that it can adjust its plans accordingly.^[3] The difference between policy experimentation under Xi Jinping and Heilmann’s model described above is that the central government plays a more significant and defined role at all stages of policy innovation: initiating, designing, evaluating, and extracting elements for new national regulations and models. Thus, the process is more technocratic under Xi Jinping, in line with top-level design, and there is less room for local discretion.[4] The idea of “nationwide coordinated work” harks back to the early years of the People’s Republic of China. As far as policy implementation is concerned, the term means that the central government delegates an appropriate degree of power to local governments, which can adjust policies to suit local conditions. The localities then provide feedback to the central government. As early as 1956, in “On the Ten Major Relationships” (Lun shida guanxi 論十大關係), Mao Zedong 毛澤東emphasised the need to bring into play the enthusiasm (jijixing 積極性) of both central and local governments, because “we can’t concentrate everything in the central government like the Soviet Union and leave the localities without any right to manoeuvre” (1977: 275). In the wake of the nationwide economic recession brought on by the 1958 Great Leap Forward policy, senior leaders began to propose ways to improve policy making. The term “nationwide coordinated work” was first mentioned in 1959 by Ke Qingshi 柯慶施, who at that time was secretary of the Shanghai Municipal Party Committee. Ke held that good policy implementation depended on correctly handling the relationship between the “whole” (quanju 全局, i.e., the central government) and the “part” (jubu 局部, i.e., the local government). This meant that under the overall leadership of the central government, local governments must be permitted to adjust specific practices based on local conditions. In a report issued the same year, Deng Xiaoping 鄧小平 also mentioned the term in relation to giving “full play to Shanghai’s advantages and achieving a faster development of Shanghai” (Yan 2010). As far as policy implementation is concerned, “nationwide coordinated work” means that the central government delegates an appropriate degree of authority to local governments, allowing them to adjust policies to suit local conditions. The localities then provide feedback to the central government. In this, Xi Jinping has learned a lot from the Mao era (Lam 2016: 410-2), adopting the concept of “nationwide coordinated work” with regard to the promotion of local reforms and policy implementation.[5] We agree with Heilmann that “model experiments” and “proceeding from point to surface” are key elements in experimentation under hierarchy. However, we hold that under Xi Jinping, a third element should be added: “nationwide coordinated work.” This consists of three steps: (1) the centre issues a law or regulation and then instructs a local government to formulate local policies in accordance with that law/regulation, and based on the specific directions for that locality; (2) if successful, these local policies may then be adopted by the central government; and (3) the central government adapts its regulations based on local experience to make them more specific and practical. We can gain an insight into the “nationwide coordinated work” framework from the implementation of the shuang chuang policy. This will give us a clearer understanding of the Chinese government’s policy innovation and diffusion model under Xi Jinping. The politics of innovation in China In essence, shuang chuang is a policy that encourages local governments and enterprises to carry out industrial innovation. There are many discussions of the Chinese government’s policy innovation process in the literature (Teets and Hurst 2015: 8-12). Some scholars believe that innovations introduced by local governments can solve China’s governance problems (Yu 2011); others focus on the cadres who promote innovation, regarding them as “policy entrepreneurs.” They investigate whether these officials’ career progression leads to the further diffusion of their innovations (Zhu and Xiao 2015; Zhu 2018). Ma Liang notes that if there is a change in local leadership, the new leader will drop the innovation introduced by their predecessor. This is because introducing yet another innovation is more beneficial for the new leader’s career than continuing to develop the existing one (2017: 594). One contribution local governments make to policy innovation is the feedback they give to the central authorities concerning the trial of a new policy (Heilmann, Shih, and Hofem 2013). All of these studies argue that local governments play an important role in promoting policy innovation in China. However, other scholars contend that the role of local governments has been exaggerated, and that many of China’s policy innovations have been engineered by higher levels of government. Mei Ciqi and Liu Zhilin question whether the Chinese government formulates its policies through local pilot projects. They find that in many cases, the direction and content of local innovations must be determined by the superior government, including which systems can be promoted and to what extent (2014). This view of the central government’s role in leading innovation is particularly appropriate to the style of politics during the Xi Jinping period. Under the framework of “top-level design,” local innovations or reforms must conform to the overall plan of the central government. Beijing has centralised the whole process of policymaking and tends to intervene directly in local decision-making rather than following the chain of command (Heilmann 2018: 204-6). The promotion of the innovations and reforms that Xi Jinping is particularly concerned about is even more subject to central planning, and the shuang chuang policy is a typical example. China’s industrial policy was formerly regarded by the outside world as lacking in genuine innovation and being mainly a matter of imitation (Economy 2018: 124-6). After Xi came to power, he declared that he would do his best to promote shuang chuang, as part of the effort to realise the “Chinese Dream” (Zhongguo meng 中國夢) and the “Two Centenaries” (liang ge yibai nian 兩個一百年).^[6] This policy is regarded by the CCP as being of strategic importance, and the official media announced that it would be promoted according to the concept of “nationwide coordinated work,”^[7] indicating that in promoting the shuang chuang policy, local governments must conform to the central government’s plan. Shuang chuang pilot projects and policy diffusion China’s shuang chuang policy has been formulated through pilot projects and policy diffusion, the two constituent parts of Heilmann’s experimentation under hierarchy. There are three steps in the first stage of shuang chuang. The first step involves drawing on Western experience.^[8] Several Western sources have influenced contemporary Chinese leaders’ thinking on industrial policy, including The Third Industrial Revolution published by the American scholar Jeremy Rifkin in 2011. This wave of academic interest in technological innovation drew the attention of the top CCP leadership. By the time of the CCP’s 18^th National Congress in 2012, many of the 24 new members of the Politburo had read Rifkin’s book. [9] During his first month as general secretary, Xi Jinping proposed 10 policies designed to capitalise on a “strategic turning point” in China’s development. The fifth policy was none other than “storming the high ground in the ‘third industrial revolution.’”[10] Premier Li Keqiang 李克強 has also taken note of this book. When it was first published, the then vice-premier immediately ordered the National Development and Reform Commission (NDRC) and the Development Research Centre of the State Council to “closely consider” its contents.[11] The second step consists of investigation and information gathering (Wong 1979: 63-77). One example of this was the visit of Xi Jinping, Li Keqiang, and other leaders to the Zhongguancun  Science Park in Beijing, as part of a Politburo collective study session on 30 September 2013.^[12] They reviewed the research being carried out at the science park and asked questions on the development and application of 3D printing, cloud computing, big data, high-end servers, nanomaterials, biochips, and quantum communications, following which they listened to a report delivered by the CEO of Baidu, Li Yanhong 李彥宏. The third step consists of the actual establishment of the pilot projects. Central government ministries have been responsible for deciding on the location of the pilots, also known as shuang chuang bases. From these pilot schemes, the central government extracts a number of successful development models that can be imitated and studied by regional governments nationwide (Florini, Lai, and Tan 2012). Government ministries have hosted conferences for cadres working at all levels to familiarise them with the successes of the shuang chuang bases and their companies. Most of the attendees were important leaders at the regional level.^[13] The conferences furnished them with successful models they could adopt for the development of the telecommunications industry in their provinces. The “from point to surface” policy diffusion consists of two steps. In the first step, diffusion is carried out through leading groups.^[14] In August 2015, the NDRC led an interdepartmental joint meeting to promote innovation and business start-ups by the general public (tuijin dazhong chuangye wanzhong chuangxin buji lianxi huiyi zhidu 推進大眾創業萬眾創新部際聯席會議制度), hereinafter referred to as the “Joint Meeting”), attended by representatives of 24 government departments. The “Joint Meeting”, the purpose of which was to strengthen interdepartmental cooperation and communication, was conducted on the pattern of a leading group (lingdao xiaozu 領導小組).[15] The second step in policy diffusion consists of the formulation of regulations at the central and provincial levels, which enables shuang chuang policies to be diffused nationwide. In March 2015, the State Council published “Guiding Opinions,” which stated that government funds would be unlocked and relevant institutions reformed to promote shuang chuang.^[16] The above content is summarised in steps 1 to 5 in Table 1. We will later examine how step 6 of Table 1 applies to the cases of Fujian and Guangdong Provinces, respectively. In particular, we will focus on how these two provinces have adapted policies to suit local conditions in order to promote regional development through shuang chuang.^[17] Finally, we discuss how steps 7 and 8 of Table 1 apply in the cases of these two provinces.   Table 1. The promotion of industrial innovation policies under Xi Jinping

Stages	Academic sources	Steps
“Model experiments”	Heilmann	1	Central leaders learn from the industrial innovation policies of advanced countries
		2	Investigation and information gathering
		3	Models established and cadres mobilised to learn
“From point to surface”	Heilmann	4	Implementation enhanced through leading groups
		5	Central government issues regulations
“Nationwide coordinated work”	Tsai and Lin	6	Local governments adapt policies in accordance with the direction laid down by the central government
		7	Regional feedback to the central government
		8	Central government uses feedback to revise regulations and perfect the policy
		Cases
		Pattern	Politically-oriented	Market-oriented
		Case	Fujian	Guangdong

Source: Sebastian Heilmann’s “experimentation under hierarchy” (2008b: 28) modified by the authors. According to the economic and political conditions pertaining to those provinces, the central government has specified different shuang chuang policies for Fujian and Guangdong. Guangdong counts among China’s most economically advanced provinces, while Fujian is relatively backward. Fujian’s GDP in 2018 fell short of that achieved by Guangdong in 2010 (National Bureau of Statistics 2019). In addition, Fujian is just across the water from Taiwan and has long borne important united front responsibilities with regard to the island. Xi Jinping has visited Fujian and Guangdong on many occasions since he came to power. During one visit to Fujian, he said that the province’s proximity to Taiwan meant that it should have the courage to explore a new path for the development of relations across the Taiwan Strait. [18] While in Guangdong, he directed that the province should unswervingly adhere to an innovative development strategy so as to build a global hub for high-technology and industry.[19] These words from Xi Jinping indicate that shuang chuang in Fujian is politically oriented, and in Guangdong it is market oriented. Policy tailored to united front work: Fujian Province The implementation of the shuang chuang policy in Fujian is led by the province’s Development and Reform Commission (DRC). However, the Taiwan Affairs Office of Fujian Province (TAO) plays a more important role in implementation than it does in other provinces. The TAO is responsible for coordination and communication between the DRC and other provincial departments to ensure that Fujian’s shuang chuang policy is centred on united front work towards Taiwan. So, shuang chuang is implemented by all relevant provincial departments under the leadership of the DRC and the TAO. This kind of cross-departmental cooperation is necessary when, for example, young entrepreneurs from Taiwan are encouraged to set up businesses in the province, as that involves the departments of Finance, Housing and Urban-rural Development, Science and Technology, and Human Resources and Social Security.^[20] As part of its “nationwide coordinated work” plan, Beijing requires Fujian to combine two policies: united front work towards Taiwan and shuang chuang. Because of its proximity to Taiwan, Fujian must always be ready for conflict. That is why the roads in Fujian’s major cities, including the provincial capital Fuzhou, were engineered in such a way as to be suitable for military vehicles. After 2016, Tsai Ing-wen 蔡英文, a member of the Democratic Progressive Party, was elected president of Taiwan. Because of her policy deemed as “anti-China,” cross-strait relations have deteriorated. In order to strengthen China’s influence on Taiwan, Fujian became an important actor in united front work and gained more policy innovation powers in this area. With the advent of the shuang chuang policy, the central authorities expected that Fujian would combine the policy with united front work and try to attract young Taiwanese to work or start businesses in mainland China.^[21] During the plenary sessions of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference (liang hui 兩會) in 2019, Xi Jinping delivered a speech to the Fujian delegation in which he urged the province to become the first home of Taiwanese companies and compatriots on the Mainland.^[22] When Fujian began its promotion of shuang chuang, the provincial DRC and TAO sought to absorb as much Taiwanese investment as possible. This coincided with the unveiling of a new Taiwan policy by the central government in February 2018, set out in the document “Several Measures for Promoting Cross-strait Economic and Cultural Exchanges and Cooperation” (Guanyu cujin liang’an jingji wenhua jiaoliu hezuo de ruogan cuoshi 關於促進兩岸經濟文化交流合作的若干措施, hereinafter referred to as the “31 Measures”). The introduction of Taiwanese businesses in all provinces was one element of this new policy. After the “31 Measures” were released, the Fujian DRC and the leaders of the TAO convened a meeting with representatives of other relevant departments at which those departments were requested to swiftly draw up the regulations necessary for putting the measures into practice.^[23] Subsequently, the Government of Fujian Province released two documents, the “Opinions on the Implementation of the 31 Measures” (Guanyu cujin liang’an jingji wenhua jiaoliu hezuo de ruogan cuoshi shishi yijian 關於促進兩岸經濟文化交流合作的若干措施實施意見, hereinafter referred to as the “66 Measures”) and the “Opinions on Exploring the New Path of Cross-strait Integrated Development” (Tansuo liang’an ronghe fazhan xin lu de shishi yijian 探索兩岸融合發展新路的實施意見, or the “42 Measures”). The incentives offered to Taiwanese businesses and Taiwanese individuals by these two sets of measures trumped those of the central government’s “31 Measures.” The incentives include rewards and subsidies for talented Taiwanese coming to work in Fujian (300,000 RMB for individuals with doctorates, 200,000 RMB for those with Master’s degrees, and 100,000 RMB for university graduates), and financial support worth 300,000 to 600,000 RMB for new businesses set up by Taiwanese entrepreneurs. These incentives exceed the national standards. The Fujian government played a guiding role in attracting Taiwanese businesses and talented young individuals. The policies listed in the “66 Measures” and the “42 Measures” included subsidies for young Taiwanese entrepreneurs starting up businesses at shuang chuang bases, extra allowances for in-demand talent, and subsidies for Taiwanese-financed start-ups. Among these, the government concluded that the most effective way of encouraging young Taiwanese to set up businesses in Fujian was through youth start-up incubators. As a result, shuang chuang bases for Taiwanese youth were established in cities such as Fuzhou and Xiamen. Moreover, the Fujian government encouraged existing shuang chuang bases to double their efforts to attract Taiwanese youth. It issued regulations stipulating that bases with more than 20 Taiwanese companies and 60 young Taiwanese entrepreneurs would receive a 5 million RMB bonus paid out of the provincial budget. Fujian was offering more incentives to Taiwanese technology workers and Taiwanese-funded start-ups than any other province.^[24] In Fujian, it is the TAO that is responsible for attracting young Taiwanese to the province as part of the shuang chuang policy. After a process of consultation and investigation by experts, the TAO decided that the establishment of “youth entrepreneurship bases” (qingchuang jidi 青創基地) was the most effective way of attracting young Taiwanese entrepreneurs, and this idea was approved by the provincial government.^[25] Fujian officials have agreed to combine shuang chuang policies with the united front towards Taiwan because that is conducive to economic development in the province. As one cadre who had worked in Fuzhou for many years told us, local officials’ performance assessments overwhelmingly depend on how effective they have been in promoting economic development. For Fujian, attracting Taiwanese investment is the easiest route to economic success, because Fujian and Taiwan share similar cultural traits. This is why officials in the province are keen on combining shuang chuang with united front work.[26] Under the influence of the above-mentioned factors, Fujian’s achievements in attracting Taiwanese talent and investment have surpassed those of other provinces. By July 2019, there were as many as 73 shuang chuang bases for Taiwanese entrepreneurs in Fujian – 12 national-level and 23 provincial-level bases – with a total of 2,074 Taiwanese enterprises and more than 5,000 individual Taiwanese.^[27] Fujian has more entrepreneurial bases for young Taiwanese than any other province in China. Under central government guidance, Fujian has successfully combined two policies and developed “Taiwan-focused shuang chuang.” In 2018, Fujian attracted more Taiwan-funded projects than any other province. Fujian has also formulated policies designed to recruit young Taiwanese to undertake internships, offering prospective interns air tickets and accommodation subsidies. For example, the city of Xiamen has paid Taiwanese interns a subsidy of 2,480 RMB per month, a level of generosity rarely seen in other provinces.^[28] One step ahead in market economics: Guangdong Province Guangdong’s shuang chuang work is also coordinated by its DRC, but unlike Fujian, its TAO has little involvement in the policy’s implementation. Beijing does not expect Guangdong to combine shuang chuang with united front work towards Taiwan, but it does want the province to attract investment from world-class high-tech enterprises. To achieve this goal, the DRC has joined forces with other provincial departments. For example, the province’s Intellectual Property Office, Industry and Commerce Administration Bureau, and Justice Department are responsible for safeguarding the intellectual property (IP) rights of enterprises and individuals, while the Commerce Department, the Finance Office, and the Foreign Exchange Administration are in charge of dealing with foreign investment.^[29] Guangdong was the first Chinese province to introduce reform and opening up policies in the late-1970s and early 1980s (Vogel 1989), and with the central government’s support, it was in the vanguard of the development of a market economy. This gave Guangdong more opportunities for innovation in trade and economic development.^[30] Beijing’s expectations for Guangdong can be seen from a 2018 speech delivered by Xi Jinping. Noting that Guangdong had been a pioneer in China’s reform and opening up, Xi said that in terms of science and technology innovation, the province should focus on national strategic needs, try to attract top domestic and overseas scientific and technological talents, and cultivate more innovative enterprises with their own intellectual property and core competitiveness.^[31] Guangdong officials recognise that this kind of high-tech shuang chuang is the best way for their province to achieve rapid economic growth. Indeed, Guangdong has out-performed all other provinces in industrial upgrading. As in Fujian, officials have one eye on their own career development when they comply with the centre’s instructions in this regard.[32] For Guangdong, one of the most important tasks in the promotion of shuang chuang is enhancing the protection of intellectual property rights. In the early years of reform, little attention was paid to intellectual property rights as the province was dominated by traditional manufacturing and original equipment manufacturers (OEMs); this led to frequent infringements (ibid.). From 2008, when Wang Yang 汪洋 was the provincial Party secretary, high-tech enterprises were introduced into the province under a policy of “emptying the cage to change the bird” (tenglong huanniao 騰籠換鳥, i.e. getting rid of labour-intensive, polluting industries to make way for cleaner, higher-value firms). To attract businesses of that kind, it was essential to ensure that their intellectual property was secure. Therefore, Guangdong placed considerable emphasis on intellectual property protection, as expressed in the “Implementation Opinions of the People’s Government of Guangdong Province on Vigorously Promoting Mass Entrepreneurship and Innovation” (Guangdong sheng renmin zhengfu guanyu dali tuijin dazhong chuangye wanzhong chuangxin de shishi yijian 廣東省人民政府關於大力推進大眾創業萬眾創新的實施意見, hereinafter referred to as the “Implementation Opinions”).^[33] Guangdong now welcomes investment from all over the world, mainly targeting high-tech businesses and leading brands. Under the leadership of the provincial DRC, Guangdong has passed a series of laws and regulations. In 2018, the province issued a document entitled “Several Measures of Guangdong Province for Further Expanding Opening Up and Making Energetic Use of Foreign Capital” (Guangdong sheng jinyibu kuoda duiwai kaifang jiji liyong waizi ruogan zhengce cuoshi 廣東省進一步擴大對外開放積極利用外資若干政策措施, hereinafter referred to as the “Several Measures”). Among the incentives offered by the provincial government to large-scale innovative foreign enterprises was a payment of 100 million RMB to any foreign company investing more than 50 million USD in the province. Fortune Global 500 companies or companies with the potential to develop innovative technologies in key areas such as new-generation information technology, intelligent equipment, or biomedical science are eligible to receive even higher subsidies.^[34] In addition, the province applies for “Guangdong superior talent cards” (you Yue ka 優粵卡) on behalf of senior figures in these companies. The cards give the holders fast-track permanent residence privileges and allow their spouses and children to enjoy equal treatment to locals in terms of social security and education.^[35] Guangdong is trying its best to attract high-tech companies, but it does not seem keen to grant special concessions to companies from Taiwan, or even its close neighbour Hong Kong. Fujian offers more privileges to Hong Kong firms than Guangdong does. Guangdong’s subsidies for Hong Kong companies are similar to those offered to any other foreign or local firms, as can be seen from the “16 Policy Measures to Benefit Hong Kong” (16 xiang hui Gang cuoshi 16項惠港措施) introduced in 2019.^[36] In terms of attracting Taiwanese investment, although the provincial government has introduced the “Measures to Promote Economic and Cultural Exchanges and Cooperation between Guangdong and Taiwan,” (Guanyu cuijin Yue Tai jingji wenhua jiaoliu hezuo de ruogan cuoshi  關於促進粵台經濟文化交流合作的若干措施), these merely give Taiwanese enterprises and individual Taiwanese equivalent treatment to locals.^[37] In short, Guangdong is predominantly a market economy, and its shuang chuang is high-tech oriented. Guangdong welcomes investment from any high-tech, high quality business, including those from Taiwan and Hong Kong. Political factors such as promoting “united front work” are a relatively minor concern for Guangdong. In an environment dominated by market competition, Guangdong has excelled in attracting both domestic and foreign companies. Honda, Samsung, and Toyota, among other FTSE 500 companies, have all opened research facilities in Guangdong. More than 80 of the top 100 foreign companies in Guangdong are engaged in industries such as new-generation information technology, advanced equipment manufacturing, biomedical science, new energy, new materials, and modern service industries.^[38] As for domestic companies, in 2019, 21 home-grown Guangdong companies achieved revenues of over 100 billion RMB, with 13 entering the FTSE 500. Many of these companies have conducted research and invested in Guangdong’s shuang chuang bases.^[39] True to its history as one of the most economically developed provinces in China, Guangdong held first place in China’s regional innovation rankings for three consecutive years from 2017.^[40] In short, the shuang chuang policy promoted by Guangdong Province has proved to be a route to attracting world-class high-tech enterprises and has achieved significant results. The innovation capability of companies investing in Guangdong is very high, encompassing cutting-edge knowledge and the development of new technologies. For instance, Huawei holds 15% of the world’s standard essential patents related to 5G technology, more than any other company globally. Moreover, China’s Internet giant, Tencent, has applied for more than 30,000 patents, second only to Google.^[41] Guangdong has a very good record for protecting intellectual property rights, which further incentivises firms to innovate. The aforementioned “Several Measures” specifically emphasise support for R&D innovation and the protection of intellectual property rights.^[42] The authoritarian state’s laboratory: Policy feedback and adaptation Because the shuang chuang policy has been designated “nationwide coordinated work,” different regions are subject to different plans. The provinces we examine in this article, Fujian and Guangdong, may be described as “policy laboratories of the authoritarian state.”^[43] Regions selected by the central government to act as policy laboratories are given additional rights to try out policies in specific areas. Fujian is tasked with integrating shuang chuang with united front work towards Taiwan (politically oriented), while Guangdong is expected to implement the policy in a more market-oriented way by attracting high-tech investment. The two provinces then give feedback to the central government to assist it in formulating regulations designed to improve united front work and the introduction of advanced technologies. In this article, we have examined these two disparate industrial innovation ecosystems through a political lens and a market-oriented one. The contents of the above sections are summarised in Table 2. Table 2. The shuang chuang policy in Fujian and Guangdong Provinces

Pattern of policy	Fujian (politically-oriented)	Guangdong (market-oriented)
Political-/ market-led	1. Government encourages the introduction of talented young Taiwanese and Taiwanese businesses (a) 2. Taiwanese youth entrepreneurial bases established under guidance (b)	1. Fair and competitive market environment created (g) 2. Help given to overseas businesses in Guangdong (h) 3. Market mechanism perfected and scope of market access expanded (i)
United front / operation of the market	1.Shuang chuang bases attract large numbers of Taiwanese companies with government incentives (c) 2. Special subsidies available for top Taiwanese talent (d) 3. Special subsidies available for new Taiwanese companies (e)	1. Foreign business people can have sole proprietorship in transportation and finance (j) 2. Overseas talent accorded equal treatment with local talent (k) 3. Investment approval times reduced and procedures simplified (l)
Technological innovations	Introduction of more Taiwanese high-tech enterprises (f)	1. Support for R&D innovation (m) 2. Accelerated introduction of high-tech firms (n)
Intellectual property protection	No relevant regulations	Protection of intellectual property rights enhanced (o)

Notes: i. “66 Measures”: a (articles 2, 46); b (article 35); c (article 35); e (article 2); f (article 5)

1. “42 Measures”: d (article 26); e (article 23)

iii. “Implementation Opinions”: g (article 3); h (article 27); i (article 1)

1. “Several Measures”: j (article 1); k (article 6); l (article 8); m (article 4); n (article 2); o (article 7)

Source: authors.   In step 7 of shuang chuang (Table 1), local governments give feedback to the centre. In Fujian, the TAO plays a major role in this. For example, the provincial TAO learned from Taiwanese businesses and experts that these enterprises found it difficult to obtain financing or to participate in infrastructure projects, while individual Taiwanese in the province encountered problems with buying a house locally and obtaining promotion. Issues like these may be passed to the provincial DRC, but if a problem is too difficult to be resolved within the province, the TAO will report it to the Taiwan Affairs Office of the State Council to be passed to whichever central government department is responsible.^[44] The provincial TAO does not play such a prominent role in Guangdong’s policy feedback process, and issues with the shuang chuang policy have mainly been coordinated through the DRC system. If the provincial DRC cannot resolve a problem within the province, it will report it to its counterpart at the central government or other relevant units. For example, the Intellectual Property Office of Guangdong Province found that according to current laws and regulations, dealing with infringements of intellectual property rights involved interdepartmental and cross-regional coordination and a lengthy litigation cycle. Strict standards of proof were required and the level of compensation that offenders had to pay was so low that it had little deterrent effect. Problems like this cannot be handled locally but must be resolved through the revision of laws at the centre. In this case, the Intellectual Property Office of Guangdong Province reported its opinions to the provincial DRC, which then submitted them to the relevant central departments.^[45] Finally, feedback from local governments is submitted to the central government so it can refer to it when revising policies (Table 1, step 8). For example, the feedback from Fujian prompted the central government to formulate the “Measures to Further Promote Economic and Cultural Exchanges and Cooperation across the Taiwan Straits.”^[46] This document acted as a supplement to the 31 Measures and allowed Taiwanese businesses and individual Taiwanese to compete on a par with locals. Feedback from Guangdong and other provinces prompted the central government to promulgate the “Opinions on Strengthening Intellectual Property Rights Protection” (Guanyu qianghua zhishi chanquan baohu de yijian 關於強化知識產權保護的意見) at the end of 2019. These opinions set the target date of 2025 for perfecting the national intellectual property system in order to facilitate innovation.^[47] Steps 7 and 8 of Table 1 are presented in more detail in Table 3. Table 3. Local feedbacks on shuang chuang policy and the response of the central authorities

Process Information	Fujian	Guangdong
Step 7. Local feedback	TAO plays important role	DRC system plays important role
	1.              Taiwanese companies find it difficult to obtain financing from Mainland banks. 2.              Taiwanese companies find it difficult to participate in infrastructure projects. 3.              Taiwanese find it difficult to buy houses locally. 4.              Taiwanese in the public sector cannot compete fairly with locals for promotion opportunities.	1.              Lengthy litigation process for intellectual property cases. 2.              Low penalties for intellectual property violations. 3.              Difficulties with interdepartmental coordination in intellectual property cases.
Step 8. Adaptation of policy by centre	Taiwan-related measures	High-tech innovation measures
	26 measures for benefitting Taiwan: 1. Taiwanese companies allowed to raise funds in mainland China (Article 6). 2. Taiwanese companies allowed to participate in infrastructure projects (Articles 1-5). 3. Taiwanese allowed to buy houses in mainland China (Article 18). 4. Taiwanese in the public sector given equal opportunities for promotion (Article 21).	Opinions on strengthening IP rights protection: 1. Optimisation of authorisation and authentication procedures to shorten the review cycle (Article 8). 2. Penalties for counterfeiting and infringement of IP rights increased (Article 1). 3. Cross-departmental and cross-regional cooperation in case handling improved (Article 9).

Source: authors. Conclusion We argue that China’s unique policy innovation process and its system of pilot projects are important factors in allowing the CCP to maintain its powers of governance and in ensuring that its policies are adapted to local circumstances. Heilmann conceptualised this phenomenon as “experimentation under hierarchy.” Heilmann’s original concept consists of two processes: “model experiments,” or pilot projects, and a policy dissemination process known as “proceeding from point to surface.” This article proposes a third process whereby local governments are permitted to adjust central policies based on local conditions. Local experience with implementing the policy is fed back to the central government, which then uses this feedback to fine-tune the policy. From the research presented in this article, it can be seen that the CCP’s promotion of domestic policies under Xi Jinping has indeed moved towards the pattern of “top-level design.” Any local policy reform must be implemented in accordance with directions laid down by the central government. We argue that this is a reflection of the principle of “nationwide coordinated work.” In other words, policy innovation in China consists of a continuous process of experimentation and adaptation between the centre and the localities. This echoes the view put forward by Heilmann and Perry that the CCP centre issues ambiguous policies that are conducive to clarification by local governments based on their needs, and that this enhances the flexibility and adaptability of the reform process (2011: 1-29). In this article, we have analysed the politics of industrial innovation under Xi Jinping. In 2015, shuang chuang was diffused nationwide, and all provinces formulated regional policies based on the broad direction laid down by the central government for their area. In the cases of Fujian and Guangdong Provinces, local experience of implementing shuang chuang was fed back to the central government, allowing the CCP to fine-tune its regulations and policies in areas related to Taiwan and high-tech innovation. Through this analysis of the Chinese government’s promotion of shuang chuang policies, we have attempted to form a deeper understanding of China’s “experimentation under hierarchy” policy formulation process. By adding another step to Heilmann’s concept – “nationwide coordinated work” – we have endeavoured to enrich this concept and to give outsiders a more comprehensive understanding of China’s reform model. Acknowledgements We gratefully acknowledge the suggestions from the two anonymous China Perspectives reviewers, and the grant of Taiwan’s ministry of science and technology (No. 109-2410-H-001-024-MY2).   Ruihua Lin (林瑞華) is an assistant professor at the department of international and mainland China affairs, National Quemoy University, No. 1, University Rd., Jining Township, Kinmen County, 892, Taiwan (emmy388@gmail.com). Wen-hsuan Tsai (蔡文軒) is a research fellow at the Institute of Political Science, Academia Sinica, 128 Academia Sinica Rd., Sec. 2, Taipei, 115, Taiwan (whtsai@gate.sinica.edu.tw). Manuscript received on 3 October 2020. Accepted on 16 September 2021.   References ANDERSON, Chris. 2012. Makers: The New Industrial Revolution. New York: Crown Publishing Group. CHRISTENSEN, Tom, Lisheng DONG, and Martin PAINTER. 2008. “Administrative Reform in China’s Central Government: How Much ‘Learning from the West?’” International Review of Administrative Sciences 74(3): 354-7. 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ZHU, Yapeng, and Diwen XIAO. 2015. “Policy Entrepreneur and Social Policy Innovation in China.” The Journal of Chinese Sociology. https://journalofchinesesociology.springeropen.com/articles/10.1186/s40711-015-0012-z (accessed on 3 June 2021). ^[1] Some scholars have noted the CCP’s emphasis on macro-regional plans, such as Heilmann (2018: 159-60). ^[2] “Shuang” (雙) means “double,” or “two.” “Chuang” (創) refers here to the first character of two nouns: “chuangye” (創業, entrepreneurship), and “chuangxin” (創新, innovation). The “shuang chuang” policy framework is therefore a policy focusing on both entrepreneurship and innovation. Sun Boyang 孫博洋, “大眾創業, 萬眾創新: 你我都是中國經濟增長新引擎” (Dazhong chuangye, wanzhong chuangxin: Niwo dou shi Zhongguo jingji zengzhang xin yinqing, Mass entrepreneurship and innovation: Everyone is the new driver of China’s economic growth), People’s Daily (人民日報), 5 March 2015,  http://finance.people.com.cn/BIG5/n/2015/0305/c1004-26643284.html (accessed on 6 April 2020). ^[3] This policy innovation process basically relies on integration and planning by the central government. China’s fragmented government management system has long stood in the way of scientific and effective policy innovation (Hammond 2020). However, Xi Jinping’s emphasis on “top-level design” and “nationwide coordinated work” has mitigated this bureaucratic fragmentation to some extent. [4] We are grateful to one of the reviewers of this article for suggesting that we include this point. [5] “舉國同心: 習近平統籌部署全國一盤棋” (Juguo tongxin: Xi Jinping tongchou bushu quanguo yipanqi, The whole country will pull together: Xi Jinping arranges the plan for nationwide coordinated work), People’s Daily Online (人民網), 9 April 2020, http://politics.people.com.cn/BIG5/n1/2020/0409/c1001-31667592.html (accessed on 18 June 2021). ^[6] “Chinese Dream” and “Two Centenaries” were put forward by Xi Jinping in 2012. The meaning of “Chinese Dream” refers to realising the great rejuvenation of the Chinese nation. “Two Centenaries” are goals paving China’s development process, that is, when the CCP celebrates its 100^th anniversary (2021), it will have “comprehensively buil[t] a moderately prosperous society;” and at the 100^th anniversary of the founding of the People’s Republic of China (2049), it will have transformed China into a “modern power.” “新時期推動科技創新的行動指南” (Xin shiqi tuidong keji chuangxin de xingdong zhinan, A compass for action in promoting technological innovation in the new age), People’s Daily (人民日報), 11 August 2014, http://theory.people.com.cn/n/2014/0811/c40531-25439053.html (accessed on 14 January 2022). ^[7] “全國上下一盤棋: 點燃高質量發展的‘科技引擎’” (Quanguo shangxia yipanqi: dianran gao zhiliang fazhan de “keji yinqing,” Nationwide coordinated work: igniting the “technology engine” for high-quality development), People’s Daily (人民日報), 4 March 2021, http://finance.people.com.cn/BIG5/n1/2021/0304/c1004-32042108.html (accessed on 18 June 2021). ^[8] For discussion of this topic, see Christensen, Dong, and Painter (2008: 354-7). 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