China’s Institutional Reform

China’s State Council unveiled plans for institutional reform and the transformation of government functions. The number of ministries under the State Council will fall from 27 to 25. The Ministry of Railways and the National Population and Family Planning Commission are viewed as key areas for reforms.

Nations compete not only in economic, military and scientific and technological fields, but also in administration. The new round of government institutional reform aims at streamlining administration and delegating power to the lower levels, stimulating market and social vitality, respecting changing national situation, and going with tide of the globe in optimization of administration.

Since the outbreak of the financial crisis, major European and American economies have gone through huge changes. Institutional reform has become a governance concept for major countries to promote economic transformation and recovery. More efficient government, more transparent communication between government and enterprises and more favorable investment environment… Reform intentions of some countries have been announced, and the competition between them has started.

US President Obama put forward a reform scheme on commerce departments in 2011. According to the reform scheme, the Obama administration plans to integrate six agencies responsible for commerce and trade into a new one which will provide one-stop services for enterprises.

The British administration put forth reform plan for governmental agencies in 2010, and updated it in the following two years. Now, British commerce, education, culture, environment, health and justice departments have promulgated detailed rules for implementation, made objectives for different stages, made public the implementation progress and will receive public supervision.

In addition, Russia, Australia and Italy also launched or planed to launch government institutional reform in recent years. Analysts pointed out that though countries are at different stages of reform, the reforms comply with the trend of the times to promote an efficient and clean government governed by law with an appropriate scale.

Since China’s reform and opening-up policy implemented, China has done large-scale government institutional reform in six occasions, and now is launching reform the seventh time. Looking back, we can easily find out that all institutional reforms are staged at crucial times of reform and opening up, such as dramatic changes of international strategic situation, adjustment of domestic industrial structure, establishment of market economy, China’s entry into the WTO, etc.

It is necessary to understand that beyond the increase and reduction and merge and integration of institutional departments, going with tide of the times, respecting market rules and enhancing administrative efficiency is an important hallmark of China’s institutional reform, and promoting transformation of government functions, better servicing economic development and improving people’s livelihood is the principal line.

The background of current China’s institutional reform is the profound changes of global and national situation, and the urgent need to adjust economic structure and transforming development mode. At present, the reform has entered the essential stage, to seize the development opportunity and effectively cope with crisis and challenges, China must improve its superstructure, promote the transformation of functions of government agencies, and realize the transformation from examination and approval-oriented government to service-oriented government.

Demographic dividend will not last forever and resource dividend will finally end. However, the new dividend released by institutional reform and function transformation will help to reinforce China’s soft strength, competitiveness and attraction, promote economic transformation, and support the balanced and sustainable growth of China’s economy.



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