China's Massive Government Overhaul: What You Need to Know
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China's Massive Government Overhaul: What You Need to Know


When the National People’s Congress of China formally passed a series of constitutional amendments on Sunday, it would have been the highlight of most annual sessions. But this year’s NPC was just getting started.

Next on the agenda: an extensive overhaul of a laundry list of government agencies. Through mergers and setting up new offices, Beijing hopes to make policymaking more efficient – and the changes thus offer insights into the areas where China’s government is most interested in boosting its performance.

The plan will restructure the bureaucracy under China’s State Council “to make the government better-structured, more efficient, and service-oriented,” according to state new agency Xinhua. This mostly means consolidating existing functions; according to Xinhua’s report, the restructure will result in eight fewer ministerial-level bodies and seven fewer vice-ministerial level ones. Xinhua has a list of what ministries and commissions will make up the State Council after the reshuffle.

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China is also setting up a new National Supervision Commission, but that body, thanks to the newly amended constitution, will operate about the State Council. The draft Supervision Law, also introduced to the NPC on Tuesday, will thus be considered separately from the State Council reorganization.

The changes to the State Council are immense, and many of the details will become more apparent once the new organization takes effect. For now, here’s a rundown of the most notable changes, and how they relate to the government’s priorities.

New Ministries

As part of the reorganization, the State Council will gain seven new ministries. A few words about each below:

Ministry of Ecological Environment: This new ministry will replace the previous Ministry of Environmental Protection (MEP) while also assuming responsibilities previously assigned to the National Development and Reform Commission (NDRC), Ministry of Water Resources, Ministry of Agriculture, and Ministry of Land and Resources. The current MEP is often seen as toothless, unable to adequately enforce environmental regulations – in part because those oversight functions were spread out among different ministries. The plan for a new, streamlined ministry is a sign of China’s upgraded dedication to the task of improving its environment, as pollution issues are one of the most common sources of dissatisfaction among China’s citizens. In another example of the elevated importance of environmental issues, new language emphasizing environmental goals made it into China’s constitution (such as adding the creation of an “ecological civilization” and “beautiful” country to the list of goals).

Ministry of Natural Resources: This ministry will oversee the protection and development of natural resources (including forests, wetlands, and grasslands) as well as maritime resources. Similar to the Ministry of Ecological Environment, it’s designed to help boost environmental protection in China.

Ministry of Agriculture and Rural Affairs: The previous Ministry of Agriculture will see its functions spun off into other ministries. Its replacement will combine the oversight of agriculture (including, for example, regulating the quality of agricultural products) with rural development. China is seeking to eliminate extreme poverty, most of which is concentrated in rural areas, as well as boost agricultural production through more efficient use of land and technology; the new ministry will be responsible for implementing policies to achieve both goals.

Ministry of Veteran Affairs: This ministry will serve the dual purposes of preventing resentment-fueled protests by veterans and enticing qualified new recruits. China’s push to modernize its military has been making headlines for years, but similar efforts to boost the quality of the actual men and women who make up the People’s Liberation Army have gotten less press. China is hoping to attract more educated recruits to a military that now focuses on winning “informationized” war. However, another aspect of China’s military reform is streamlining the force by reducing the overall number of personnel – leading to a large number of newly unemployed former soldiers. One responsibility of the new ministry will be to “improve the service and management system of demobilized military personnel” to prevent widespread dissatisfaction as the PLA scales down.

Ministry of Emergency Management: This new ministry will be tasked with handling both work safety issues and natural disasters (fire, flood, drought, earthquakes, etc). High-profile accidents linked to safety violations – the 2015 explosions in Tianjin being perhaps the most notable example – have led to repeated promises to step up enforcement of safety regulations. In addition, the new ministry will streamline preparations and planning for natural disasters, a cause of increasing concern in China as climate change has increased the frequency and severity of both flooding and drought.

Ministry of Culture and Tourism: According to Xinhua, this new ministry is “aimed at coordinating the development of cultural and tourism industries, enhancing the country’s soft power and cultural influence, and promoting cultural exchanges internationally.” Under President Xi Jinping, China is making a push to increase its global clout in all senses, including soft power. The new ministry will be tasked with both government oversight of culture at home and promotion of Chinese culture abroad.

National Health Commission: With access to quality healthcare a growing concern in China, the new ministry will be responsible for “coordinating and advancing medical and healthcare reform, establishing a national basic medicine system, [and] supervising and administering public health, medicare and health emergencies” in addition to formulating national health policies.

New Administrations

In addition to the new ministries, there are a number of new administrations and agencies being set up. These bodies also have interesting implications for both China’s priorities and how China interacts with the world.

International Development Cooperation Agency: For the first time, China is setting up a dedicated agency to coordinate its foreign aid policies. The new agency, which will report directly to the State Council, will take over related roles previously divided between the Ministry of Commerce and Ministry of Foreign Affairs. Unsurprisingly, it will have a special focus on supporting the Belt and Road Initiative, which has become the defining framework for China’s foreign policy writ large.

State Immigration Administration: This new body, operating under the Ministry of Public Security, will create and enforce China’s immigration rules. As China has grown in both prosperity and global influence, more and more foreigners have come to the country to work and live. According to Wang Yong, the state councilor who briefed the NPC on the changes, the increased number of foreigners “rais[es] new requirements on immigration administration and services.” The creation of a new administration is partly motivated by a desire to cut red tape for potential immigrants, as China hopes to attract top foreign talent to help in its domestic innovation push. However, Beijing may also use the new administration to keep closer tabs on foreigners; there are already some worrying signs in that direction.

Banking and Insurance Regulatory Commission: In a highly anticipated move, China is merging the China Banking Regulatory Commission and China Insurance Regulatory Commission to create a new super-agency responsible for overseeing much of the financial sector. The Chinese government is looking to curb risks in the financial industry, from ballooning debt to unregulated financial products. The recent crackdown on Anbang Insurance Group foreshadowed stricter government control and the new commission will continue that trend.

Market Supervision Administration: This new body will be tasked with anti-monopoly enforcement as well as supervising pricing. Reuters notes that previously these functions were spread among the NDRC, the Ministry of Commerce, and the State Administration for Industry and Commerce (SAIC). The Market Supervision Administration will be of particular interest to foreign firms, which have often complained they are unfairly targeted by anti-trust investigations and penalties. How it operates and its areas of emphasis will say a lot about the extent of China’s promises to open its markets to the world. The administration will also take over the functions of Administration of Quality Supervision, Inspection and Quarantine and China Food and Drug Administration, making it responsible for food safety, another hot button issue for the average Chinese citizen.

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