Merger of ministries means better efficiency

By Wang Yukai (China Daily)
Updated: 2008-02-19 07:23

Structural reform to China's central government, the so-called "big ministries system", is one of the hottest topics being discussed by the public and the media since it was made known in November last year.

According to this plan, those central-level ministries, commissions and departments whose functions are similar, overlapping or in the same administrative spheres will be merged into one super-ministry. Thus, administrative efficiency will be boosted and costs will be reduced.

The necessity of this reform stems from the evolvement of the administrative itself.

In the first three decades after the People's Republic of China was founded in 1949, the economy operated according to strict planning by the central authorities. Because of the extensive and detailed planning, it was inevitable that the government would be a gigantic one with numerous departments, each governing different economic sectors.

The former Ministry of Mechanics and Industries is a typical example. The ministry had nine departments, each of which took care of one specific industry, ranging from electronic products and machinery to aircraft.

After China started economic reforms in the late 1970s, the administrative had to adjust to a fledgling market economy. The administrative has undergone five major restructures since 1982. One of the common missions was to streamline the administrative according to the goals of the economic reform at the time.

In 1982, the central government had 100 subordinating departments, which were cut down to 61 after the restructure. The 1998 restructure reduced the subordinating departments of the State Council from 40 to 29. The departments removed were mostly those directly governing the industries.

Admittedly, the governing structure of the administrative has been remarkably improved compared with that under the strict planned economy. But it obviously needs further reforms to better match the needs of the market economy.

There are 28 departments at the ministerial level under the central government, which is much more than those in a mature market economy. The Japanese government has 12 ministerial-level departments, the United States 15, and Britain, 17.

Although there are successful precedents in other countries about establishing super-ministries, Chinese authorities have to be very careful when making such a decision.

In the new reform, several pitfalls will have to be avoided.

With more power, the super-ministries will have to be watched more carefully. When the administrative is restructured and super-ministries established, it might also be necessary for the legislature to make adjustments accordingly. And it is also worth discussing whether the super-ministries be established all at the same time or gradually.

As to the mechanism for checking the power of the super-ministry, there are several alternatives.

One feasible means is to grant the power of decision-making to one ministry, let another ministry execute the policies and give a third ministry the power of supervision.

Another is to divide the policy formulation, execution and supervision to different sectors within a super-ministry.

Of course, the most effective binding to these super-ministries should be from parties outside of them, including supervision from the People's Congress at different levels, the law execution departments, the public and even the media.

Another issue frequently mentioned by the public about the reform is whether the big ministries system will check the growing impulse to protect their own interests.

Some people are worried that the restructure will give these ministries more incentive to protect their own interests, which cannot be challenged because of their power.

They back their views by quoting the example of the National Development and Reform Commission (NDRC). They believe NDRC, which oversees the economy of the country, has become a miniature of the State Council and many local officials view the NDRC as a troubleshooter, not seeking suggestions from the State Council.

As a facilitator in the State Council, the NDRC does have close cooperation with almost every ministerial department. However, it is far from a super-ministry. The current role of the NDRC and its method of operations should be discussed to see whether it could be improved.

In the 2003 restructure of the administrative, the department in charge of economic reform became a subordinate of the NDRC.

Such a shift has left much to be desired. After all, a department in charge of the process of economic reform should be beyond the interests of all ministries.

As part of the administrative restructure, the big ministries system will significantly boost the government's efficiency. But more can be achieved if it is incorporated into a greater cause of political reform.

The author is a professor with the National School of Administration

(China Daily 02/19/2008 page8)

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