Institutional reforms will enable a solid setup to tackle intl challenges
Published: Mar 12, 2023 10:56 PM
Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

The 14th National People's Congress (NPC), China's top legislature, on Friday approved the latest reform plan for State Council institutions, and the revamp is expected to significantly improve the central government's operational and regulatory efficiency, intensify the efforts to strive for high-quality economic growth, and position the country to prevail in the face of fiercer global competition in the coming months and years.

China's comparatively high-speed economic growth over the past 40 years derives from late Chinese leader Deng Xiaoping's epoch-making drive of "reform and opening-up" since 1978. Time and again, reform has delivered miracles whenever the country set forward a transformative agenda to re-energize the economy, be it the Asian financial crisis in late 1990s or the global financial tsunami in 2008-09.

Now facing a profound change in global geopolitical landscape and, in particular, the unrelenting economic and technology containment from the US and a few of its hardcore allies, China needs to constantly restructure its organizational system and strengthen its governance so that new breakthroughs in resource use, tech innovations and business models will be made, which will help make the country unbeatable and invincible on the global stage. 

A Chinese proverb says that one always needs to make progress with the changing times. It is imperative for a country to overhaul its governmental structure so that the resources are best utilized, and the hidden problems are addressed in a timely manner. The stasis in the Western model of governance, such as many years of policy inaction caused by widening political division and intense partisan infighting, had led to anemic economic growth, class polarization between the haves and have-nots, cyclical inflation, deflation and financial crises, ballooning national debt, and serious disrepair of infrastructure.

Looking through the approved reform draft of the State Council departments, one could get the impression that the restructuring is fully "problem-focused" with a clear-cut target to accelerate scientific research and technological innovation so that China is able to lead the world in all segments of technology, advanced manufacturing and innovative business models. For instance, people traveling in China are impressed by the country's 42,000-kilometre high-speed rail network and its almost ubiquitous paperless mobile payment, there should be more miracles to come. After all, only non-stop tech innovations could deliver new wonders.

Now, the Ministry of Science and Technology has been reshuffled, which will be primarily tasked with improving a "new-type whole-nation system" to achieve innovational breakthroughs and revving up the macro-management functions relating to high-tech research and development. 

Also, a new national data administration will be established to coordinate integrated sharing, development and use of China's massive data resources, while the China National Intellectual Property Administration will be elevated to a top-level agency directly under the State Council to ramp up the IPR protection, so that professors, scientists and engineers are able to obtain their due royalties whenever their inventions are used.

Meanwhile, a central science and technology commission will be set up to facilitate the Communist Party of China Central Committee's centralized and unified leadership role in setting the road map for China's comprehensive technology advances. Apparently, a significant aim of the institutional reform is to place a "laser focus" on technology innovation, replicating what the country has achieved in the high-flying aerospace sector by pooling human and material resources and set the nation's advantage in near-Earth and deep space explorations. 

When a few bottlenecks in semiconductor microchips and other high-tech fields are addressed, China could stand on the highland of top-caliber manufacturing and better face international competition, and consequentially, the US government's so-called tech decoupling will break up and become futile, and eventually, Washington's ill-intended attempt to strangle China's development will fail.

In another major area of the reform plan, a national financial regulatory administration will be set up to oversee the country's entire financial sector, with an exception for corporate stocks and bonds which fall under the oversight of the national securities regulatory commission. The People's Bank of China, the country's central bank, will be relieved from financial management issues and will concentrate on deciding on monetary policies and fine-tuning interest rate levels and money supply to maintain low inflation and steady GDP growth. 

The new financial regulatory administration will shoulder the responsibility of overseeing all commercial banks, insurance companies and other financial companies, protecting individual consumers' rights, and cracking down on illicit fund-raising activities, such as previously rampant online peer-to-peer lending. It is also tasked with detecting and preventing financial risks from forming and enveloping, endangering the whole system, like the 2008 subprime financial crisis in the US.

To improve the efficiency of the government, the reform plan orders an across-the-board 5 percent cut in the number of personnel at all central government institutions. Bloated and counterproductive bureaucracy should be stamped out. The next five years will be important for the comprehensive construction of a modern socialist country with Chinese characteristics, so the restructuring of the central government departments carries much significance for China to achieve the "second centennial goal" of developing China into a great country that is "prosperous, strong, democratic, culturally advanced, harmonious and beautiful" by the middle of this century. 

Given the fast-changing times and rising specter of global protectionism and volatility, the institutional reforms need to be quickly implemented. An optimized organizational system should assist the country shore up its modernization foundation, better cope with the challenges, and help crack the hard nuts head-on - no matter whether it is a specific high-tech laggard or a potential financial risk.

The author is an editor with the Global Times.