Abstract: This paper introduces an analysis of administrative subcontracting in relation to the promotion mechanism in Chinese government administration and redefines the organizational boundary between internal and outsourcing administrative subcontracting. The relationship between administration and subcontracting is examined through the two salient features of government, namely, multitask and monopoly of public services and state violence. Subcontracting tends to save fiscal and administrative costs for the principles and offer high-powered and differentiated incentives to subcontractors. However, it can also lead to power abuse and multitask distortion. To prevent subcontractors' misbehaviors, bureaucracy is also compelled to impose various administrative measures such as oversight authority, veto power, rules and procedures. The paper further examines the organizational boundary between internal and outsourcing subcontracting through the rank competition and promotion mechanism. If subcontracting is part of competition and promotion process, it is regarded as internal subcontracting within organization; whereas subcontracting separated from the bureaucratic hierarchical mobility is considered as outsourcing subcontracting. Using this new lens of rank promotion mechanism, we reinterpret the so-called “the separation of officials and local staff” (guanli fentu) in imperial China and the stratified mobility in modern time.The paper argues that the twofold process of “separation of officials and staff” and “convergence of staff and hired-hands” in imperial China from Qin-Han to Ming-Qing marked a significant change in state governing boundary from internal subcontracting to outsourcing subcontracting. This occurred because of the increasing revenue pressure. It is our hope that this study opens further dialogues on Xueguang Zhou's administrative subcontracting theory.

Key words: organizational boundary of government, administrative subcontracting, promotion, administrative outsourcing, the separation of officials and local staff