Further reform should abolish administrative rankings for State-owned enterprises and public institutions

The seventh government restructuring plan since reform and opening-up was issued by the State Council this month. These reforms will repay historical debts, because many similar departments of the planned economy completed such reforms 15 years ago.

The reform plan favors functional transformation. The abolition of the Ministry of Railways will see the government's administrative functions performed by a State railways administration, supervised by the Ministry of Transport, while a new railway corporation will run its commercial operations. The dissolution of the National Population and Family Planning Commission, another product of the planned economy, also reflects a policy transformation from population control to population service. It's appropriate to merge the Commission with the Ministry of Health in order to administer medical care, public health and family planning services and plan the allocation of resources to them. However, instead of the proposed national health and family planning commission, the merged entity could still be called the Ministry of Health.

Merging the General Administration of Press and Publication with the State Administration of Radio, Film and Television is also a necessary step to take. The two former institutions have similar and overlapping management functions and services, which have resulted in the two administrations passing the buck to one another and a waste of resources.

The reform plans to centralize control over the country's maritime law enforcement agencies in the State Oceanic Administration in order to enhance maritime law enforcement and strengthen protection and use of its oceanic resources, especially disputed maritime rights and interests involving neighboring countries. The State Oceanic Administration is now the organization that will implement public administration of China's sovereign waters, which requires more resources and authority, especially paramilitary law enforcement resources.

Upgrading the State Food and Drug Administration to the ministry level is aimed at solving the country's serious food and medicine quality issues, as it can better coordinate with other ministries and local authorities to supervise the food and medicine chains. However, how effective this will be is unclear as the key to food and medicine quality is policymaking, implementation and supervision.

Reform of the National Energy Administration is aimed at streamlining the administrative and regulatory system of the energy sector.

Generally speaking, the government has steadily advanced national institutional reform this round, but there's still room for further reform, especially the abolition of administrative rankings for State-owned enterprises and public institutions.

Managing State-owned enterprises with administrative rankings is a legacy of the planned economy. Many enterprises that should be separate from the government have become second-tier government bodies with administrative management. If the proposed railway corporation retains its official rankings and is administratively managed, the reform will really be in name only. If institutional reform is only dismantling a ministerial level department into several vice-ministerial level organizations, it will not be effective.

Public institutions' administrative rankings should also be abolished. Managing public institutions according to their administrative rankings is also part of the planned economy. Management positions at public institutions, including universities and colleges, are at the ministerial or vice-ministerial level, which attract many people who want to enjoy the same benefits as officials and administrative officials who are unable to get promotions in the bureaucratic system. These people impede China's scientific research as well as development of the education system. Without removing the administrative rankings any reform in public institutions will be undermined.

The government should also strengthen specialization of policymaking. The National Development and Reform Commission is a policymaking consultative department of the State Council, but it's also an administrative department now. The State Council's research office and advisory office are research departments, but they fail to play a role in public policymaking. The public policymaking mechanism should be organized from the top down so that policymaking is public policymaking, democratic policymaking and specialized policymaking. Independent bureaus should have a single function and comparatively sound internal decision-making, supervision and implementation systems.

Future reform should focus on removing the administrative rankings of State-owned enterprises and public institutions, and focus on decision-making and the implementation and supervision of public policy. Without these basic reforms, it will be hard to form the basic framework of the State Council.

Besides these basic reforms, it's also important to review the function of current governmental organizations and appropriately determine their positions.

The author is a professor at the School of Public Administration at Renmin University of China.

(China Daily 03/18/2013 page10)