Updated: March 16, 2013 01:27 IST

In restructured Chinese government, market given a major role

  • Ananth Krishnan
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Chinese Communist Party General Secretary and incoming-President Xi Jinping reads a report during a plenary session of the National People's Congress at the Great Hall of the People in Beijing on Sunday.
Chinese Communist Party General Secretary and incoming-President Xi Jinping reads a report during a plenary session of the National People's Congress at the Great Hall of the People in Beijing on Sunday.

Reduction in ministries to increase efficiency

China’s new leadership on Sunday unveiled the most significant government restructuring plan in more than a decade, announcing the dismantling and merging of several crucial Cabinet-level ministries with the aim, officials said, of reducing the government’s role and promoting non-governmental and market forces.

The plan includes breaking up the vast and influential Ministry of Railways, which has recently been embroiled in corruption scandals, and merging the powerful Family Planning authority – in charge of enforcing family planning rules – with the Health Ministry, a move seen as a possible first step in reforming the unpopular restrictions known commonly as the “one-child policy”.

It has also sanctioned the setting up of a unified National Oceanic Administration (NOA) to beef up and centralise China's maritime law enforcement forces amid an escalating number of disputes, with Japan in the East China Sea and with half a dozen countries in the South China Sea.

The measures were outlined here on Sunday by the State Council, or Cabinet, amid the on-going annual session of the National People’s Congress (NPC), or Parliament, which will formalise the appointment of officials to head the new government under Xi Jinping. Mr. Xi, who replaced Hu Jintao as the General Secretary of the Communist Party of

China (CPC) and as head of the military in November last year, will be appointed as President in the coming week. Second-ranked Politburo Standing Committee member Li Keqiang is expected to succeed Wen Jiabao as Premier and head of the State Council.

First major reform

The restructuring is the first major reform measure announced by the new leadership under Mr. Xi, who has emphasised tackling corruption and bureaucratic inefficiency since he took over as the head of the party in November.

The State Council said the restructuring plan reflected the government’s desire “to not meddle in what is not in our business”. “Departments of the State Council are now focusing too much on micro issues,” it said, adding that it hoped to transform the role of the government “to reduce administrative intervention in the market and social issues". The plan called on the government to “ensure the market’s fundamental role in allocating resources and to let social organisations play a better role in managing social issues.”

It said the government would streamline procedures for approving investment projects and licences, and consider easing restrictions on non-governmental organisations (NGOs). Most NGOs in China operate with strict supervision from the government, particularly when sensitive issues such as political and religious rights are involved. NGOs are required to be registered with government ministries, and often face obstacles in acquiring permits. “The current management mechanism is no longer suitable for the standardised development of social organisations,” the plan admitted.

However, it also underscored the limits of any future loosening of policy, stating that establishing an NGO “concerning politics, law issues and religions is subject to the government’s examination and approval before registry”. The restructuring has also proposed creating a single authority to regulate the media and enforce censorship restrictions, by merging the General Administration of Press and Publication (GAPP) and the State Administration of Radio,

Film and Television (SARFT). The State Council said the new authority that will regulate China’s media would “coordinate resources of each sector and promote reform of cultural institutions”.

Railways overhaul

The most significant restructuring measure proposed the dismantling of the influential Ministry of Railways, which has, in the past, operated as possibly the most powerful and wealthy of ministries. The ministry has been roiled by recent corruption scandals that led to the sacking of former Minister Liu Zhijun and exposed an alarming lack of oversight.

Now, the Ministry will function under the Ministry of Transport, which will handle its administration with an aim to increase the “integration efficiency of various transport means”. The commercial functions will be handled by a separate China Railway Corporation company.

Oceanic administration

The restructuring has also overhauled the country’s oceanic administration. Maritime disputes with Japan over the East China Sea and with several countries over the South China Sea had in recent months triggered calls for a more efficient and powerful maritime authority.

Officials and analysts have said an uncoordinated response from coast guards and maritime forces run by different ministries had prevented efficient and nimble reactions to the increasing number of clashes between Chinese fishing boats and naval vessels with those from other countries. A report by the International Crisis Group (ICG) last year warned that "the conflicting mandates and lack of coordination among Chinese government agencies... have stoked tensions in the South China Sea".

Now, a unified National Oceanic Administration (NOA) will supervise all of China’s maritime law enforcement forces, including the coast guards, fisheries forces and anti-smuggling agencies, and will be charged with “better safeguarding the country’s maritime rights and interests”, the State Council said.

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