More bureaucracy won’t hasten reform

By He Keng Source:Global Times Published: 2013-3-3 17:13:01

Recently, Wu Jinglian and other economists have appealed for a National Reform Commission (NRC), but I disagree.

Although think tanks are needed for reform, the current National Development and Reform Commission (NDRC) can achieve the same effects if its role is shifted to a more advisory and less interventionist one.

Adding an intermediary agency between the State Council and functional ministries and commissions can do more harm than good.

China was exploring the transition from planned economy to market economy in the 1980s, when two schools of thought competed fiercely with each other.

To push the development of the market economy, Deng Xiaoping and other central leaders proposed establishing a National Economic System Reform Commission (NESRC), which played a major role in building consensus and pushing reform ideologically.

It also contributed a lot to liberating ideas and encouraging academic contention.

At that time, China faced a lot of resistance in economic transition. Thanks to the NESRC, disputes were settled and reform was promoted.

However, three decades after the reform and opening-up, it's not necessary to establish a NRC.

China's reform has made great achievements. A market economy system has been basically, if not perfectly, established.

Even though State-owned enterprises have many problems, they have experienced a round of reform. Finance has now become the key to another round of reform.

Therefore, the direction of the socialist market economy has been basically set.

The major problem now is how to deepen reform, an area which official, semi-official and nongovernmental think tanks are researching, with an abundance of talent involved.

The Academy of Macroeconomic Research under the NDRC has nine research institutions already, with an adequate division of labor. The Ministry of Finance has Research Institute for Fiscal Science, and other ministries like the Ministry of Commerce have relevant research institutions. Under this circumstance, there is no need to establish a NRC.

Besides, the NDRC, the successor to the State Planning Commission in the planned economy era, is expected to be an advisor and assistant of the State Council. Its main job is to research major reform issues.

However, it has taken on more functions directly intervening in the economy, which are questioned by public opinion and opposed by nigh on every sector.

I suggest that the NDRC's direct intervention be diluted during the restructuring of institutions. Each sector can have clear and separate economic management functions after the reform to set up "super ministries," and another commission between the State Council and ministries is not needed.

The NDRC should return to the position of offering suggestions for the State Council on deepening reform and promoting development.

At present, the NDRC has strong research capability, which can be further strengthened if it proves inadequate. Shrinking the government is the top priority, and there is no need to create a NRC.

Reform is a major national decision. It is mostly nongovernmental think tanks, rather than official missions alone, that offer programs and advices on national reform.

I believe to set a new agency between the State Council and ministries could never be beneficial to reform, for the more administrative levels are created, the more efficiency will be lost.

The author is a member of the 10th and 11th National People's Congress Standing Committee, Vice-Chairman of the Financial and Economic Affairs Committee of the 11th National People's Congress, and dean of the School of Statistics at the Central University of Finance and Economics.

Posted in: Viewpoint, View Points

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