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China administrative system reform enters 'deep water'
Updated: 2013-11-11

The Yeji experimental zone in Anhui province gained instant fame for a series of administrative system reforms launched nearly two decades ago, but reversals to earlier practices over the past years have shocked many experts and reform watchers.

Yeji, which administers three townships in the city of Lu'an in west Anhui, was approved by 11 ministries and the provincial government as an experimental zone for administrative system reforms in the 1990s.

During the early years, local government departments in the Yeji zone were streamlined into 17 larger departments, a sharp decrease from the 72 previous departments.

Zhou Gulian, then head of the provincial commission for economic restructuring who oversaw the experiment, said Yeji was the first region in Anhui to streamline government agencies in a bid to improve government efficiency.

The streamlining helped avoid internal fighting for power and interests, better coordinated relevant parties and increased efficiency, said Zhang Chengmin, then director of the countryside development bureau in Yeji.

The countryside development bureau merged 10 government agencies, including the agricultural, forestry and water resources departments.

The streamlining led to a smaller government and improved government efficiency, but after a decade, many of the reforms have failed.

Over the past couple years, many once-merged departments have once again become independent, and the number of public service workers has expanded quickly to 579 from 358 in 1999.

Many fiscal funds were allocated to corresponding lower-level departments, and the absence of dozens of these lower-level departments in Yeji meant it was denied many funds.

The Yeji experiment lacked supporting reforms in its fiscal and taxation systems and, in past years, more fiscal funds were channeled down to counterpart agencies, said Zhou.

The central government has increased transfer payments to lower-level authorities over the past years. But Yeji had its applications for funds rejected again and again, simply because it did not have the corresponding agencies to the upper-level governments.

This dilemma forced the local government to restore once-merged agencies simply for the convenience of getting fiscal funds.

The reversal in the Yeji experimental zone is an example of the complexity and difficulty China's administrative system reform faces, and has charted the path for future reform designs.

Chi Fulin, director of the China (Hainan) Institute for Reform and Development, said that compared with economic system reform, administrative system reform is a more arduous task.

"Each round of administrative system reform is virtually the adjustment of power patterns, rather than an increase or reduction in the number of institutions and staff on the surface," Chi said.

Over the past 35 years of reforms and opening-up, China has experienced six rounds of administrative system reforms. The number of ministries and commissions under the State Council, China's cabinet, has been cut by half and the government is operating in a scientific, efficient and transparent way.

The administrative system reforms have waded into "deep waters," meaning there are high expectations among the public for deeper reforms and a service-oriented, clean and frugal government, experts said.

Wang Yukai, a professor at the Chinese Academy of Governance, said excessive, lazy or mediocre governance not only damages the trust between the public and governments, but also curbs local economic and social development.

During the transformation of government functions, shortcomings should be corrected first, Wang said.

To improve government efficiency, the Chinese government has simplified some review and approval procedures to reduce its excessive intervention in some market activities.

The State Council, in a meeting on Sept. 25, approved revisions to an investment list, allowing projects with sufficient market activity and in line with structural adjustment only to report to authorities, rather than requiring government approvals.

The meeting exempted another 75 items from central government approval, taking the total number of exempted items to 221 since the new leadership assumed office in March.

In the newly-established free-trade zone in Shanghai, a company requires only four days, compared to the 29 days required previously, to get registered.

Meanwhile, in the Binhai New District of the municipality of Tianjin, the administrative system was streamlined after removing three sub-district governments.

Reforms in localities might encounter setbacks, but as long as the reforms help nurture an efficient, clean and service-oriented government, they are worth a trial, said Cheng Biding, vice president of the Chinese Society of Regional Economy.

Source: Xinhua