The ministerial-level body, due to be approved within days at the annual session of the National People’s Congress, will follow the example of the US Food and Drug Administration.

It will integrate regulation and law enforcement in one agency.

[…] Despite numerous nationwide crackdowns, consumer confidence in the mainland’s food and drug industry has been shattered. The current system is tangled in red tape, with up to 13 government agencies controlling food and drug regulation and supervision.

The industrial and commerce authority, for example, is responsible for packaging, while the Ministry of Health handles food safety standards.

The Ministry of Agriculture steps in if animals are involved.

Academics and food safety watchdogs have long complained that the numerous agencies create blind spots and overlaps of power that contribute to the chaos.

Super-sized ministries may not fulfill their promised efficiency gains, however, as The Economist (via CDT) recently explained.

The structure of Chinese food production is also highly fragmented. Here, too, consolidation seems likely, as huge numbers of small-scale suppliers give way to a much smaller number of industrial-scale farms. While big agribusiness can bring its own problems, this trend is expected to greatly simplify food production chains and ease monitoring and enforcement of food safety.

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Post tags: drug safety, food safety, GAPP, ministries reorganization, Ministry of Agriculture, Ministry of Culture, Ministry of Health, National People's Congress, public health, SARFT, super-ministries, two sessions
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Caijing learned in late February that the draft plan for a new round of “super ministries” reform will be discussed during the upcoming second plenary meeting of the 18th CPC Central Committee, putting “super ministries” on China’s reform agenda once again after five years of exploration and debate.

Super ministries reform features consolidating government agencies with similar functions to reduce administrative overlapping and promote efficiency.

[...]Under the plan, the Railways Ministry will be merged with the Ministry of Transport, in a move which has won popular support. In addition, food and drug safety authorities will be integrated into a regulator dedicated to market supervision; and the powers of the Ministry of Civil Affairs and the State Oceanic Administration will be expanded. However, consolidation of government agencies in the energy, cultural, and financial sectors, as well as the formation of a national organization which coordinates reforms in different sectors, though widely anticipated, have not been included in the plan.

The draft plan, though basically completed, may be subject to changes before being put on the table of the central leadership, said an expert who participated in drawing up the plan. The version that comes out after the second plenary meeting of the 18th CPC Central Committee is expected to be final, said the expert.

Recently, a far-reaching web of corruption was discovered in the Ministry of Railways.

In the beginnings of China’s “reform and opening up” era, attempts to streamline bureaucracy by merging public ministries were taken in effort to increase government efficiency. AP covers the recent closed-door meeting where new rounds of bureaucratic mergers were discussed, provides an overview of the first round three decades ago, and touches on the controversial nature of this practice:

In 1982, the number of Cabinet-level ministries and commissions was slashed from 100 to 61. In the 1990s, museum pieces such as the Ministry of Machine Building that were no longer needed to set prices and tell companies what to produce were eliminated. In 1998, then-Premier Zhu Rongji shrank the number of ministries further from 40 to 29.

At the same time, Beijing created Western-style regulators for banks and securities. A Ministry of Commerce was formed in 2003 to bring together trade and planning agencies, simplifying some trade regulation to make it easier for private sector traders to function.

Such change can provoke furious opposition. In the last round of proposed reforms in 2008, the only thing leaders finally agreed on was to make the environmental regulator a full-fledged ministry in response to an avalanche of pollution scandals.

Creating fewer, bigger ministries would fit with party pledges to make the economy more productive and keep incomes growing. Xi has called for a “renewal of the Chinese nation,” raising hopes a new leader whose attitude toward reform is still unclear might throw his political weight behind remaking the government.[...]

Also see “Government Reform: Super-Size Me,” via CDT.

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[...]The government believes that fewer and bigger ministries will boost bureaucratic efficiency. It could also, officials say, help the country change in more fundamental ways.

[...]In recent weeks speculation has been growing that a new round of ministry mergers will soon unfold. The 370-odd members of the Communist Party’s central committee are expected to meet later this month to finalise arrangements for the annual session of the National People’s Congress, China’s legislature, which begins on March 5th. Further steps to create what officials call a “big-ministry system” are likely to be discussed.[...] Bigger ministries, it is argued, should mean smaller government.

[...]Some worry that creating bigger ministries with more responsibilities could backfire. Instead of making government more efficient, it could create even more powerful bureaucratic interest groups that could thwart efforts to make government nimbler and more responsive to public needs. In recent months discussion has burgeoned online in China about the possibility of creating a new commission to oversee economic and political reforms and ensure that ministries co-operate in carrying them out. The lack of co-operation has been evident recently in behind-the-scenes feuding over a blueprint for reducing the wealth gap. It was eventually published on February 5th, with a telling lack of detail.

Officials say that the “big-ministry system” is not just about redefining bureaucratic boundaries, but is an important part of more thoroughgoing political reform. Alongside small government, they sometimes stress a need for “big society”, with much greater non-governmental involvement in the provision of basic services.[...]

Wen Jiabao’s 2008 announcement of the plan to fuse government agencies into “super-ministries” also met with skepticism.

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The Ministry of Industry and Information Technology (MIIT), one of the five “super ministries” approved by the National People’s Congress (NPC), the Chinese parliament in March this year was inaugurated on Sunday.

A total of 24 departments have been approved for establishment under the new ministry.

The new ministry, transformed from the Ministry of Information Industry, will integrate the National Development and Reform Commission (NDRC)’s functions on industry and trade management, the functions of the Commission of Science, Technology and Industry for National Defense except that on nuclear power management, and the functions of the Ministry of Information Industry and the State Council Informatization Office, according to the NPC’s decision.

Some background on China’s ministerial reorganization from The Xinhua News Agency:

Chinese lawmakers will on Tuesday afternoon deliberate a State Council proposal for institutional restructuring of the government, which involves the installation of “super ministries” on energy, transportation, industries and environment protection.

[...]

The target for this round of government reshuffle is to explore a “super ministry” system to streamline government department functions, and to form some “bigger departments” to strengthen macro-economic regulation, maintain national security of energy supply, integrate information development and industrialization.

For the implications of the new ministry system, see CDT’s coverage here, here, and here.

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The new ministry would encompass commercial real estate and government subsidized housing. Previously, the construction ministry focused on real estate regulation, overlooking housing needs of middle- to low-income people. The new ministry would replace the current construction ministry whose supervision of public transportation would be shifted to a new Ministry of Transport, Caijing reported.

The government recently shifted its policies to boost public housing, allocating 6.8 billion yuan for building low-rent flats in 2008 — a 33 percent increase in spending compared to last year.

Industry insiders, however, have expressed some concerns about the new ministry’s effectiveness. For example, they say government regulators will have to compete against the interests of other ministries — including finance, tax and land agencies — which could reduce the effectiveness of any policies aimed at controlling real estate prices. Untangling such a complex web of interests could pose a major challenge for the new housing ministry’s leaders.

China’s housing prices re some of the highest globally, compared to earnings, China Daily found.

In New York, the average price for per sq m is $2,059, and figures from the US Department of Commerce show the American average annual income was $36,000 or $3,000 per month.

And in Tokyo, residents pay 2.1 million yuan for an 80-square-meter home and one parking spot, or $3,657 for per sq m, while the average annual income there is $34,510, or $2,875 per month.

In Shanghai, the average income in the first half of 2007 was 12,278 yuan ($1,727), and yearly income was expected to exceed 26,000 yuan by year end, for a monthly income of 2,167 yuan ($304.84).

Meanwhile, housing prices went up 11.3 percent in January, according to Xinhau, despite a slump in the Beijing real estate market reported by Shanghai Daily.

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First things first, the general idea behind “ministry reform” is to merge various government agencies to eliminate overlapping responsibilities (政府职能交叉问题), resulting (hopefully) in greater efficiency and cost-saving.

The topic has actually been in the headlines for several months in China. A January 24 article run on Sina.com and other websites talked about the pending merger of government agencies dealing with the telecoms industry, including the Ministry of Information Industry….Official party newspapers have loudly touted “ministry reforms” this week, and identical online feature spreads appeared at major Web portals aggregating news, history and favorable commentary on the topic.

…Behind the rhetoric, however, there are some very basic questions that leave “ministry reforms” landing, according to some readings, with an inconsequential THUD. Given the party’s clear efforts to champion these so-called reforms, it is interesting that we should be hearing these dissenting views at all.

Although he doesn’t dig nearly as deep into the language of the debate, Reuters’ Chris Buckley also appears highly skeptical of the super-ministry proposal.

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Chinese Premier Wen Jiabao on Tuesday unveils a bureaucratic redesign that he hopes will foster greener, more efficient government by creating new “super ministries”.

Yet with fierce rival interests at stake, experts said the plan was unlikely to end turf wars over energy policy, pollution and industry giants.

The reforms will herd together dozens of agencies, creating big departments for industry, transport and the environment, according to officials and local press reports that have dubbed them “super ministries”.

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Post tags: ministries reorganization, NPC 2008, political reform
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March this year brings more than spring to Beijing. Six months on from the 17th Congress of the Communist Party of China (CPC), the first plenary session of the 11th National People’s Congress (NPC) is due to open here shortly, as is the first plenum of the 11th Chinese People’s Political Consultative Conference (CPPCC) – events often referred to as “Two Meetings.” Once again, people’s attention will be on political reforms, and there will be much expectation about the outcome of a number of unresolved issues. There will not be too many surprises on personnel reorganization, as several indications so far already suggested how that question might be resolved at the “Two Meetings.” More interesting will be the unveiling and discussion of what is popularly known as the “super ministry plan” – the “Program for Reform of Institutions under the State Council” (“the Program”). The exact details of the plan, and the way in which it is implemented, are sure to influence the direction of China’s reform, economic development and social transformation in the near and medium term.

The detailed contents of the Program and of the “Opinions Concerning Deepening Reform of Administrative and Management Systems” are still unknown. However, core values in the report from the second plenum of the 17th CPC Central Committee, relate to building democratic politics, something long hoped for by the general public. Not only does the report reaffirm the goal of “developing socialist democratic politics,” it for the first time also contains the phrase “holding higher the banner of people’s democracy.” The report acknowledges the pressing and essential need for political system reform, and stresses “deepening reform of the political system” and “institutionalization, standardization and proceduralization of socialist democratic politics.” In addition to recognizing administrative systems reform as part of reform of the political system, emphasis was also given to its “importance and urgency.” In light of the above, we are justified in holding higher expectations for this soon-to-be-implemented round of State Council institutional reforms and hoping that something more profound will be achieved by them.

More related Caijing articles: Macroeconomic Policy on NPC Agenda and Activities of the National People’s Congress

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Post tags: Hu Shuli, ministries reorganization, NPC 2008, political reform
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As if to boost its authority ahead of the anticipated upgrading, SEPA has been gearing up to launch one after another of what the Chinese media call “green whirlwinds”. So much so that the word “green” has become very fashionable in the country recently.

On February 25, SEPA unveiled a “green securities” policy. Pan Yue, vice director of SEPA, said the agency had issued a regulation stipulating that highly polluting companies must pass environmental inspections when applying for initial public offerings (IPO). Listed companies with high pollution emissions and energy are required to make environmental disclosures and pass environmental inspections for refinancing.

Along with numerous other “green” initiatives, SEPA shows signs that its authority is growing. Yet, the connection between the government and many potentially polluting companies makes SEPA’s effectiveness questionable, even as a Ministry of the Environment.

Therefore, whether the new environment authority can effectively exercise its function still largely depends on whether other government departments or provinces are willing to cooperate and coordinate. In the three “green” policies, for example, SEPA has the full support of the three financial regulators.

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The government has yet to announce the make-up of the new ministries but officials and scholars in Beijing said the focus would be on streamlining those dealing with transport, industry, energy, telecommunications and the environment.

“The idea of ‘big ministries’ stems from Chinese leaders’ wish to ensure directives passed by party and state authorities in the capital will be enforced by local-level administrations, which are skilled at diluting Beijing’s instructions,” said Jörg Wuttke, president of the European Union Chamber of Commerce in Beijing.

Mao Shoulong, a public policy expert at Beijing’s Renmin University, said the shake-up was part of an effort to bring Chinese governance into line with international norms. The changes were aimed at separating executive decision-making from regulatory and enforcement activities, functions often still handled within the same agency. “It means that ministries will not be able to run their own enterprises,” Mr Mao said. “The power will no longer be centralised in one person.”

Xinhua has released “highlights” of Wen’s report to the press.

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On the cusp of a second five years as president and premier, Hu and Wen Jiabao are determined to strengthen the central government’s hand to ensure their policies of more balanced growth are carried out in the face of opposition from regional and industrial interests.

…The parliament will agree to a series of personnel changes in top government posts following a reshuffle of Party positions last October at a five-yearly meeting that bolstered Hu’s grip and saw Vice President Zeng Qinghong retire from his Party job.

Positions to be filled include at least one vice-president, four vice-premiers, the foreign policy state councillor and the defence minister, sources with ties to the leadership said.

See also “Non-Communists tipped for top posts” from China Daily.

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Under the plan, the agency would become the Ministry of Environment, said Hongjun Zhang, a former agency official and environmental law expert, and Lo Sze Ping of Greenpeace in Beijing.

Zhang said the staff could be increased from 200 people to 300 or 400, and that over time the body would be given more authority over local environmental bureaus, which tend to be beholden to local industries and politicians and often flout the rules.

Critics say this change will have little impact and regulations will likely continue to be ignored.

Even with new powers, the environmental watchdog is likely to face formidable opposition from local governments geared to ramping up economic growth and protecting factories that pay tax revenues.

Local environmental officials also will still answer to provincial or local governments, leaving the new ministry understaffed for the task policing the environment, activists said.

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Democracy and administrative reforms will go hand in hand as political earthquakes will shake the government at the next plenary session of the National People’s Congress (NPC), Chinese parliament, due to open on March 5.

President Hu Jintao wants to reshape the traditional structure of the Chinese power after having launched a program of democratization at the Party Congress last year with the slogan of “scientific development.”

The 28 existing ministries will be reduced to 21 in the near future and will dwindle further to 15 or 16 in order to unify power and cut on turf fights that have been plaguing the Chinese administration in recent years.

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Hong Yaxiong, deputy director at SEPA’s department of policy, said that the move would help the government stop more of its environmental policies falling by the wayside because the central government has been unable to enforce them locally.

‘The difficulty in implementing [environmental] law and the under-staffing of our agency are expected to be largely resolved with the upcoming new ministry,’ Hong told Chemistry World on the sidelines of the first International Forum on China Environmental Investment in Beijing, on 23 and 24 January.

China has passed over 100 environmental laws and regulations, according to a recent article in Science [1]. But the plethora of new rules has failed to curb pollution, which is estimated to have cost the country US$200 billion in 2005 alone – a figure equivalent to 10 per cent of its gross domestic product.

Related Reuters’ report: China Steps Up Efforts to Fight Pollution

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China plans to create “mega-ministries” to improve government efficiency and deal with the more complex issues brought about by its economic reforms. Financial services regulation and agriculture are among the first areas to be considered.

But the domination of Chinese politics by the Communist Party may outweigh any moves towards restructuring. China has already slashed the number of its ministries from 100 in 1982 to the current number of 28. But this has not been enough to deal with the many complex issues brought about by a fast-moving market-oriented economy. The existing structure can no longer cope effectively. [Full Text]

[Image: China currently has 28 separate ministries, from AFP.]

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Post tags: economic growth, ministries reorganization
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