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China: plan to reform its institutions unveiled

Aggiornamento: 14 mar 2023

Focus on China


G Iuvinale

China's State Council, the Cabinet, unveiled a plan to reform its institutions on Tuesday, March 8.


The plan was submitted to the first session of the 14th National People's Congress for deliberation.

Explaining the plan to national lawmakers, State Councilor and Secretary-General of the State Council Xiao Jie said the State Council institutional reform focuses on optimizing and adjusting the responsibilities of institutions in key areas such as science and technology, financial supervision, data management, rural revitalization, intellectual property rights, and elderly care.

The following are the highlights of the plan:


MINISTRY OF SCIENCE AND TECHNOLOGY

The ministry will be restructured to better allocate resources to overcome challenges in key and core technologies, and move faster toward greater self-reliance in science and technology.

The restructured ministry will play a bigger role in improving a new system for mobilizing the nation to make technological breakthroughs, optimizing sci-tech innovation, facilitating the application of sci-tech advances, and coordinating science and technology with economic and social development.

Its macro management functions in science and technology-related strategic planning, institutional reforms, allocation of resources, comprehensive coordination, formulating policies and regulations, and supervision and inspection will also be strengthened.


NATIONAL FINANCIAL REGULATORY ADMINISTRATION

China will set up a national financial regulatory administration. Directly under the State Council, the proposed administration will be in charge of regulating the financial industry except the securities sector.

It will be established on the basis of the China Banking and Insurance Regulatory Commission, which will not be retained. Certain functions of the People's Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC) will be transferred to the new administration.


LOCAL FINANCIAL REGULATORY MECHANISM REFORM

China will deepen the reform of its local financial regulatory mechanism. To do that, China will develop a local financial regulatory mechanism with agencies dispatched by central financial regulators as the mainstay. The institutional structure and resources of these dispatched agencies will be optimized in a coordinated manner.

SECURITIES REGULATORY AGENCY

The CSRC will become a government agency -- rather than a public institution -- directly under the State Council.

CENTRAL BANK'S LOCAL BRANCHES

China will advance the reform of the branches of the PBOC, or the central bank.

STATE-OWNED FINANCIAL CAPITAL MANAGEMENT

China will improve the regulatory mechanism on state-owned financial capital.

STAFF MANAGEMENT OF FINANCIAL REGULATORS

China will unify and standardize the management of the staff of financial regulators.

DATA MANAGEMENT

China will establish a national data bureau. The proposed bureau, to be administered by the National Development and Reform Commission (NDRC), will be responsible for advancing the development of data-related fundamental institutions, coordinating the integration, sharing, development and application of data resources, and pushing forward the planning and building of a Digital China, the digital economy and a digital society, among others. Certain functions of the Office of the Central Cyberspace Affairs Commission and the NDRC will be transferred to the new bureau.

RURAL REVITALIZATION

China will improve the functions of the Ministry of Agriculture and Rural Affairs.

ELDERLY-CARE WORK

China will improve its elderly-care work mechanism to implement the proactive national strategy in response to population aging and to expand the basic elderly-care services to cover all senior citizens.

IPR MANAGEMENT

China will improve the management mechanism for intellectual property rights (IPR) to upgrade IPR creation, application, protection and management. The China National Intellectual Property Administration, currently administered by the State Administration for Market Regulation, will be adjusted into an institution directly under the State Council, a move aimed at adapting to the demand of building a country of innovation.

NATIONAL PUBLIC COMPLAINTS AND PROPOSALS ADMINISTRATION

The administration will become an institution directly under the State Council from one under the general office of the State Council, aiming to strengthen and improve the handling of public petitions and better safeguard the interests of the people.

CENTRAL - LEVEL STATE INSTITUTION STAFF MANAGEMENT

China's state institutions at the central level will downsize their staff by 5 percent. The State Council will still consist of 26 departments besides its general office after the reform plan is implemented.


On March 10, the National People's Congress approved the State Council Institutional Reform Plan proposed by the Chinese government.

Under the approved plan, a dozen central government institutions will be reorganised, and two new ones will be established. These institutions oversee policy portfolios that include science and technology, financial regulation, rural development, and population ageing.

The State Council Institutional Reform Plan implements changes to state institutions as part of a larger plan — the Party and State Institutions Reform Plan — adopted by the Central Committee at its second plenary session in February.

The Party and State Institutions Reform Plan is expected to be released publically in the coming weeks. This will provide details on the restructuring of Party institutions, giving us a more complete picture of this round of institutional restructuring.


Topic: Restructuring Ministry of Science and Technology

Analysis by Minister Counsellor Gao Changlin from the Ministry of Science and Technology:

The major purpose of the restructuring is to make sure that the Ministry of Science and Technology can better allocate resources to overcome challenges in key and core technologies and move faster toward greater self-reliance in science and technology. The new Ministry will enhance macro management functions in science and technology-related strategic planning, institutional reforms, allocation of resources, comprehensive coordination, formulating policies and regulations, and international cooperation. The national innovation system will be more efficient for scientific discovery, technological breakthrough, industrial innovation, as well as value creation. The newly reorganized Ministry is expected to strengthen and deepen China-EU research cooperation in the frontier of science and in tackling global challenges such as climate change, energy shortage, food security and public health.

Topic: Setting up national financial regulatory administration

Analysis by Counselor Shi Wei from the Department of International Economic Affairs of the Ministry of Foreign Affairs:

The establishment of the State Administration of Financial Supervision is an inevitable requirement for the rapid development, integration and innovation of China's financial market. It addresses the shortcomings of the cross-field, cross-market and cross-industry coordination and supervision mechanism, which is conducive to resolving regulatory gaps, regulatory arbitrage and regulatory lag. It enables the formation of timely and effective regulatory synergies in the face of risk events, the establishment of a regulatory framework that is in line with the innovative development of modern mixed financial operations, and the regulation of the transactions between financial institutions and investors. Italso aims at protecting the interests of investors. It embeds investor protection in all a spects of financial transactions, institutional supervision, and inspection and law enforcement, enabling market-wide, cross-regional and full-coverage supervision through more unified top-level supervision.

Topic: Establishing National Data Bureau (NDA)

Analysis by Counselor Wu Hongliang from the National Development and Reform Commission (NDRC):

Establishing the NDA is a milestone in upgrading China’s data governance structure to meet the demand for digital transformation. The NDA absorbs and consolidates governmental functions previously performed by several ministries to avoid overlapping responsibility and insufficient coordination. As an agency managed by the NDRC, the NDA will be in a better position to integrate digital transformation policies into national development and reform plans and macroeconomic policies. It underlines China’s efforts to speed up digital transformation and improve data governance systems. EU institutions are also making similar efforts to enforce the Digital Governance Act, the General Data Protection Regulation and other regulations and policies to drive a digital transformation. The newly established NDA can play an important role in China-EU digital dialogue and cooperation.

Topic: Improving Intellectual Property Rights management mechanism

Analysis by Counsellor Wang Yi from the Ministry of Commerce:

The National Intellectual Property Administration, currently managed by the State Administration for Market Regulation, will become an institution that operates directly under the State Council. The reform will be conducive to accelerating the efforts to build China into an intellectual property powerhouse and fully upgrading its level of intellectual property creation, application, protection, management and service. The restructuring will contribute to further implementing the innovation-driven development strategy, building an innovative country and promoting high-quality development. It will also help to strengthen the protection of the legitimate rights and interests of foreign investment, foster a world-class market-oriented, law-based and internationalized business environment, and promote high-standard opening up.

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