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China: after the institutional changes, a new form of absolute power is born

Beijing releases plan on reforming Party and state institutions


Focus on China


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The plan on reforming Party and state institutions came out Thursday. This will give Xi and the Central Party total control over all key parts of the system.

Here are the new Party bodies:

  • Central Financial Commission 中央金融委员会

  • Central Financial Work Committee 中央金融工作委员会

  • Central Commission for Science and Technology 中央科技委员会

  • Social Work Department of the CPC Central Committee 中央社会工作部

  • Central Office for Hong Kong and Macao Affairs 中央港澳工作办公室



So the China unveiled a finalized plan to set up a central commission for finance, a top-level body aimed at ensuring financial stability under the leadership of the Communist Party of China (CPC) Central Committee, only days after the annual meetings of the country's national legislature and political advisory body concluded.

As part of the plan on reforming Party and state institutions released by the CPC Central Committee and the State Council, the central commission for finance will answer directly to the top Party leadership.

A central commission for finance will be established to strengthen the CPC Central Committee's centralized and unified leadership over financial work, according to an institutional reform plan released by the Xinhua News Agency.

It will be responsible for top-level planning, coordination, overall advancement of financial stability and development, and for supervising the work's implementation. The commission will also study and deliberate major policies and matters in the financial sector, among others. An office of the commission will be set up, the plan said.

The reform plan released on Thursday also said that a committee will be formed to strengthen the unified leadership over the Party's work in the financial sector.

"The two committees will place financial security first, which is a top priority of national security," Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Thursday.

In addition to the central commission for finance, a central commission for science and technology will also be set up to enhance the CPC Central Committee's centralized and unified leadership over the work of science and technology, the plan said.

The Hong Kong and Macao Affairs Office of the State Council on Thursday expressed its full support for the implementation of the reform, saying such arrangements reflect the central government's great attention and firm determination to carry on and improve the policy system of One Country, Two Systems.

A social work department of the CPC Central Committee will be formed, the plan said. It will coordinate and guide the work in handling public complaints and soliciting people's opinions.

The department will also be responsible for Party building work in mixed-ownership and non-public enterprises, and new types of economic and social organizations and among groups in new forms of employment, according to the plan.

The department will oversee the National Public Complaints and Proposals Administration.


The centralization of the decision-making process in domestic politics

“Xi dominates China's political system,” writes Neil Thomas, China Analyst at Eurasia Group. Since becoming General Secretary in November 2012, Xi has acquired a level of power that surpasses his predecessors Hu Jintao (2002-2012) and Jiang Zemin (1989-2002) and evokes the authority supreme of former prominent leaders, Deng Xiaoping (1978-1994) and Mao Ze dong (1949-1976).

Xi has launched a broad anti-corruption campaign that has addressed legitimate governance issues, but has also been instrumental in crippling rival powerhouses, such as the Communist Youth League of China (CYLC) affiliated with Hu Jintao and the “Shanghai Gang” of Jiang Zemin's followers. You have taken control of politics, concentrating power decision-making in several new Organs of the Party that he leads, in particular the Central Commission for Deepening the CPC Reforms (CCDRC).

He “remade the CCP in his own image,” touting his individual leadership and launching vast ideological campaigns to build allegiance within the Party and reclaim the title of “top leader.” Xi reformed the People's Liberation Army (PLA) and security services, becoming its head. At the 19th Party Congress in October 2017, he established his equal position with that of Mao and Deng, inserting his personal creed into the CPC Constitution: "Xi Jinping's Thought on Socialism with Chinese Characteristics for a new era".

In particular:

  • small leadership groups (LSG) were created within the Party to directly govern different policy areas, such as economic reform and safety. This transferred power from the state to the party;

  • governance campaigns, such as the one on environmental protection and poverty, so that Party working groups directly implement important policies at the local level;

  • anti-corruption campaigns, Party discipline, retirements and promotions to purge political opponent factions. In practice, Xi destroyed the previous political system which was based on factions;

  • more binding policy targets are provided for the promotion of local officials;

  • digital tools are used to directly monitor local governance.

These mechanisms transferred direct power to the Party and its leadership and removed political opposition. This facilitates centralized (top-down) governance because the governing structure is less fragmented between party and state and between central and local levels of government, and removes much of the previous policy discretion present

in the system - notes Jessica C. Teets, a professor at Middlebury College. Xi ended any notion of “separation of Party and state” by integrating a number of state functions into CCP agencies. He established the CCDRC and several new Commissions to strengthen his political leadership in the economy and finance, sidelining former Premier Li Keqiang and his State Council (China's Cabinet) from traditional roles and in other key areas including national security, cyberspace, foreign policy, military-civilian fusion and legislation.

In addition to the three titles – General Secretary of the CPC, Head of State and Commander-in-Chief of the People's Liberation Army (PLA) – Xi also chairs a dozen commissions and “heads small groups” (LSG) that serve as nerve centers of the decision-making system of the party. There are currently thousands of LSGs at all levels of the state and the party. Each group consists of a chairman, usually the highest-ranking official, a director who is responsible for managing the group, as well as representatives of relevant party and state bodies.

The LSG and Central Commissions give Xi Jinping a seat at the table of all major policy areas, and he chairs many of these Bodies that surpass normal party and state bureaucracies such as ministries. Covering everything from security to the economy, digitalization to legal reforms, the central executive sets policy priorities under Xi's watch and serves as a political nerve center.

The result of this centralization of power is that today's CCP is much more directly involved in all phases of the political cycle in important areas, including foreign affairs, national security, financial and economic affairs, political and legal affairs, and cyber.

Furthermore, the institutional reforms of recent days have ended up depriving the State Council of power to the advantage of the CPC Commissions.

The path of transforming the party-state into absolute power in the hands of Xi Jinping seems to have come to an end.

A new form of individual power was born.

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