By Weng Shiyou, Ouyang Xiaohong
Published: 2008-03-06
From News, page 3, issue no. 357 Mar 3 2008
Translated by Rui Bingyou
Original article: [Chinese]

From February 25 to 28, the Standing Committee of China's 17th Party Congress passed two key measures that promise to shrink government and more clearly delineate power and jurisdiction for Chinese ministries and commissions.  

According to procedure, the two measures, called "Suggestions Regarding the Deepening of Reform of the Administrative Management System" and "State Council Reform Scheme", would be submitted to the National People's Congress in March.

The EO has learned that the latter scheme proposed a gradual approach, the first step of which would call for pairing down the 28 bodies of the State Council into 21, starting with those that deal with energy resources, transportation, industry, and environmental protection.

Starting off with small-scale adjustments
In October of 2007, President Hu Jintao, at the 17th Party Congress, brought up "stepping up institutional adjustments," after which point reform schemes dealing with "super ministries" entered the drafting process.

On February 22 2008, the Party's Central Committee discussed what would eventually become the "State Council Reform Scheme". Sources told the EO that suggestions from three difference offices under the State Council were integrated at that meeting.

Recently, due to the snowstorms that struck China's south during February, most ministries have been focused on rebuilding efforts instead of the drafting of the law. Officials say a delay in rebuilding in order to move forward with the reform scheme would lead to social instability, and that this combined with the Olympics would keep the plan more conservative than it otherwise might be.

As a result, sources said that areas such as agriculture, culture, and finance would not be dealt with by this plan.

Instead, certain sectors of transportation – namely, civil aviation and public roads - were the most likely to be reorganized first. At a November 1 national railways working conference, Liu Zhijun, head of the railways department, clearly stated that he had not been notified of any possible restructuring of his ministry, and thus doubts that in the short term there will be any.

Obstacles to Energy Reform
Compared to the previously mentioned three large ministries, calls for establishing a new Energy Ministry have been the loudest. But one official who wishes to remain anonymous told the EO that the possibility that this would happen in the near term is low.

Xiao Guoxing, an expert on energy resource legal expert at Huadong Polytechnic University, told the EO that there is a legal precedent in Energy Law for establishing such a ministry, but what exact shape that ministry would take on was left open.

Xiao believed that because energy touched on so many other departments, those who would be affected by such restructuring and thus those providing input on it are many. A new super ministry administering energy would encroach upon the rights of numerous government departments, and how to solve these problems remains the greatest obstacle.

A resource and energy expert who wished to remain anonymous told the EO that recently, the National Reform and Development Commission's (NDRC) energy resources department had been supervising national coal, electricity, oil, and gas supplies. Though it was made up of eight departments employing over 30 people, they had long been overwhelmed by the workload. Most of the work involved assessing and approving energy projects, and staff have had virtually no time to develop a long-term energy administration strategy.

Aside from electrical power, coal and oil basically have no specialized supervisory organs. They operate in an environment of weak government and strong business.

Scholars estimated that reforming energy administration will involve an integration of the State Electricity Regulatory Commission, the NDRC's environmental resources office, pricing office, investment office, and other that maintain energy-related functions. In the meantime, it is hopeless for a new energy ministry to materialize, though after the above-mentioned trial restructurings in transportation etc. are over it may be pushed for..

Chen Wangxiang, vice-director of the China Investment Association's energy resource research office, said that regardless of whether it's a new department or office or ministry, it will face the same problems of division of authority if the three previous would split and restructurings of the department are any indication.

Break Down, Rebuild, Rinse & Repeat
After 1949, the Fuel Industry Department effectively played the role of an energy resources ministry, governing coal, oil, electricity, and hydropower. As a result of its increasing role, in July of 1955, it was dismantled. Chen, a Tsinghua University graduate who worked at that early incarnation of an energy ministry, was a close witness to its metamorphoses.

Chen told the EO that the ministry's second rebirth came in 1982, under the moniker of the State Council Energy Committee. After two years of operating separately from other energy-related departments that administered oil, electricity and coal, redundancy of jurisdiction between them and the National Planning Commission led to its dismantling.

In 1988, there was another attempt at establishing a national energy ministry. This time, oil and nuclear energy resource industries were not included, leaving only electricity and coal, the latter of which subsequently dropped out. By this point, administering only electricity, it was undeserving of its own name, and in 1993 was turned into the Ministry of Electricity by the first session of the eight National People's Congress (NPC)

Three times established, three times dismantled. In 2005, Chen approached the State Council and suggested the establishment of an energy ministry. To him, how national energy resources are managed would ultimately depend on the first trial round of administrative restructuring, and more importantly, depend on how its relationship to the NDRC would be set.

After the Passage: SASAC Hopeful
Scholars have estimated that shortly after the State Council Reform scheme would be passed during this year's two congresses, new high-level appointments and dismissals could be expected. According to the work style of the State Owned Assets Supervision and Administration Commission (SASAC) and other organs, the new departments will likely "first hang out their signs, then re-organize"

But problems that will follow restructuring have loomed large on the minds of legislators. Many have pondered what to do with all of those whose jobs would be eliminated by the restructurings. Even more critical would be how to limit the power of these larger government entities, or "super ministries".

Recently, SASAC had an ongoing internal discussion of how it would interact and coordinate with super ministries and commissions after the restructuring. Much of the assets that would be managed by them were supervised by the SASAC.

"It feels like after the administrative reform, SASAC will become more important, it will be entrusted with a higher authority," one official told the EO.

Still a Massive Overlap in Chinese Government
Partial data showed that there are at least 80 or more overlapping institutions in the State Council.

Beyond this, there was significant overlap between party and governmental units—for example between propaganda, cultural, broadcasting, news and publishing departments.

Because the role of governmental and society were not legally clarified, there has existed what has been called a "2nd government"—large associations in various industries whose activities have made it difficult to draw a clear line where government institutions end and society's begin.

Background: China's Five Major Restructurings Since 1978
1982: The State Council was reduced from 100 to 61 administrative units, staff was reduced from 51,000 to 30,000. The electricity, hydropower, and commerce departments were all dismantled. This instance of restructuring also eliminated the life-long tenure system for cadres, clarified leadership ranks, and sped up the process of letting in more young cadres into government.

1988: The State Council's ministries and commissions were reduced from 45 to 41, and led to a staff reduction of 9,700. The State Planning Commission and the National Economic Planning Commission were both canceled, and a new National Planning Commission was formed. Bodies governing coal, oil, and nuclear resources were dismantled and remade into an Energy Ministry. Specialized economic departments that directly interfered with the economy were weakened.

1993: The State Council was remade, with 86 subsidiary departments being reduced to 59, and 20% of staff eliminated. The one major restructuring of the year involved placing the Party's Central Commission for Discipline Inspection and the Ministry of Supervision into the same office. At the same time, new departments to deal with Taiwan affairs and news media were created. This was the first time it was mentioned that the goal of government reform should be to better suit the establishment of a socialist market economic system.

1998: State Council ministries and commissions were reduced from 40 to 29. Fifteen were eliminated outright, four were remade, and three were renamed. Government and party units were simplified, and 1.15 million positions were cut. This round of reorganization saw a marked change in the role of government, with nearly all departments specializing in industry-specific economics being eliminated.

2003: The State Council was reformed into 28 departments. SASAC and the Banking Regulatory Commission, were established. The Ministry of Commerce, the State Food and Drug Administration and the State Administration of Work Safety were all reformed. The State Development and Planning Commission was renamed the National Development and Reform Commission, or NDRC.