Richard McGregor and Mure Dickie

BEIJING CREATES FIVE ‘SUPER-MINISTRIES’

China has announced five new “super-ministries” as part of an effort
to streamline a bloated bureaucracy and clarify conflicting
responsibilities that stymie top-level decision making.

The plan,
submitted to the National People’s Congress for formal approval
yesterday, will transform the present administration of construction,
transport, IT policy and social security.

The environment agency
has been elevated to ministerial status, but plans to create a new
energy ministry have been put off because of strong opposition from
powerful state companies in the oil and power sectors.

A new “energy commission” will be established but it will report
through the National Development and Reform Commission, the chief
economic co-ordination body, which already has overall responsibility
for energy issues.

The NDRC, however, which contains the remnants
of China’s old “planned economy” functions, lost out elsewhere, with
local authorities taking some investment approval decisions away from
the central agency.

The NDRC has been heavily criticised for its
planning functions in recent years because of its failure to foresee
with any accuracy China’s energy demands, and also for opposing market
reforms in many sectors of the economy.

The super-ministries will
eventually lay the ground for further reforms to separate policymaking
and regulatory functions, and also force government agencies out of
business.

“It is a realistic plan,” said Mao Shoulong of Renmin
University in Beijing, who said the reforms should be able to be bedded
down more quickly than a similar ministerial shake-up in 1998.

The
reorganisation includes the creation of a potentially powerful new
ministry with responsibility for general industrial policy and
development of the information technology sector.

The new body,
to be called the Ministry of Industry and Informatisation, will absorb
the current Ministry of Information Industry (MII), parts of the NDRC
and most of the Commission of Science, Technology and Industry for
National Defence (Costind).

The move should help to smooth policy
toward IT and telecoms standards, which has long been undermined by
bickering between rival bureaucracies, and might help Beijing promote
the development of “dual use” technologies with both military and civil
applications.

The ministry will “promote autonomous innovation
and the development of major technical equipment” while “protecting
national information security”, the announcement said.

However,
the ministry will retain the MII’s dual role as both policymaker and
regulator for the telecoms sector, a position analysts have criticised
as contributing to regulatory confusion.

The notorious opacity
of Beijing’s telecoms policy has been highlighted in recent weeks by
fevered speculation surrounding a long- delayed plan to force
consolidation among China’s four state-controlled but
internationally-listed telecoms operators.

The reform announced
yesterday is the sixth such administrative restructuring since 1982,
when the number of ministries under the State Council, or Cabinet, was
cut from 100 to 61.

After the latest shake-up, there are now 27 ministries under the State Council

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