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Will Big Cabinet Changes Lead to Big Societal Changes?
State Council restructuring moves to improve governance
By Josef Gregory Mahoney | NO. 13, MARCH 29, 2018
Newly-appointed officials take oath of allegiance to the Constitution after the Seventh Plenary Meeting of the First Session of the 13th National People's Congress on March 19 (XINHUA)
State Councilor Wang Yong delivers an institutional restructuring plan of the State Council at the Fourth Plenary Meeting of the First Session of the 13th National People's Congress on March 13 (XINHUA)

One of the central concepts in Chinese philosophy is the perpetuity of change, and as a great number of scholars have pointed out, it is an extraordinary capacity for change, even radically when necessary, that is the hallmark of the political system of the People's Republic of China.

The 18th National Congress of the Communist Party of China (CPC) in 2012 saw the election of Xi Jinping as general secretary of the Party's Central Committee and a new generation of the Party's leadership with a mandate for new reforms. That same year, a widely discussed book by Pierre Landry illustrated how the Party had successfully empowered local governments to improve development and governance while nevertheless maintaining effective central control.

Scholars found another trend: the proliferation of ministries and bureaus at local and national levels that could at times be at odds with each other. Some of these tensions were seen as positive, for example ecological protection versus commerce and energy, which in some cases provided official pushback against national plans that might have undermined environmental protection. But they also ran the risk of increasing confusion, red tape and inaction in both government and society.

Reforms launched at the 19th CPC National Congress in October 2017 and follow-up meetings, including the Third Plenary Session of the 19th CPC Central Committee and the First Session of the 13th National People's Congress (NPC), China's top legislature, have endorsed a major reshuffle of cabinet-level portfolios. While the Party has made it clear that it will continue to empower local governance, it will also better supervise it institutionally.

According to an institutional restructuring plan approved by the NPC, the State Council, China's cabinet, will now consist of 26 ministries and commissions. The number of ministerial-level entities will be reduced by eight, while those at the vice-ministerial level will drop by seven after the reshuffle, producing in some cases what have been described unofficially as "super ministries." These include ministries devoted to health, ecological and environment protection, culture and tourism, and agriculture and rural affairs, among others. The stated aim is to create more coherent approaches to policymaking and regulation, thereby improving governance related to economic management, market supervision, social management, public service and ecological and environmental protection.

On the one hand, these reforms present as logical steps forward, as they straight away aim to reconcile differences that inevitably arise in regulation, oversight and development. Such problems are present in even the most advanced countries, and China's system has certainly not yet reached the pinnacle of such development, as President Xi Jinping has made clear in two lengthy published volumes discussing the need to reform China's governance.

At the same time, such reforms always accompany a fast-developing society and economy like China's. Additionally, the Chinese political system requires a certain amount of centralization, otherwise it might stumble into unmanageable disarray while providing poor service. Therefore, in some cases, recentralization can serve as a type of renewal, particularly in a new era that is marching to the tune set by changing conditions and needs.

On the other hand, looking at China's long history and comparing it with others, no other country has proven a greater civilizational capacity to over-bureaucratize, frequently to the point of self-paralysis with respect to the ability to advance meaningful reforms and progress. While these reforms aim to correct this tendency in part, they do so by streamlining to increase and improve oversight in lieu of increasing decentralization and even, deregulation, i.e. the sort of reform remedies that historically have tended to track more closely with increasing marketization.

There will be at least three major challenges going forward. First, one of the advantages of previous "looseness" is that it allowed for some flexibility that, in turn, empowered change and development, particularly given differences that affect China by locality.

Second, will then better-centralized governance ultimately disempower local governance, contrary to aims at advancing it? In short, how will the new system retain the positive consequences of such flexibility and local empowerment while mitigating the possible negative outcomes? Additionally, do so-called "super-ministries" risk becoming bureaucratic monoliths? In both cases, efficiencies and economies of scale can become reductive to the point of vitiating their advantages. Furthermore, some analysts have pointed to this as a problem that can make the middle-income trap more likely to occur, which China has been determined to avoid.

In effect, the status quo becomes institutionalized and resistant to change because of the growing layers of rules and laws with an increasingly all-encompassing scope. As new problems emerge, they become systemic to the point where the system is incapable of adjustments or reforms because the system itself is complicit. This has been described as a problem which Japan is facing, for example. Somewhat similarly, Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, described a polarizing incapacity for substantial reforms in the United States in his book, America Against America, an analysis that some would argue has stood the test of time.

Third, Xi often talks about building "innovative governance," one that also fosters innovation in society. In some direct cases, for example, the reforms affecting the protection of intellectual property rights indicate clear benefits for encouraging innovation. Moreover, improving governance by making it more rational is usually rewarded by the market. In particular, investors and decision-makers considering new product development and other market moves want above all to know what the rules are and see them enforced consistently.

Nevertheless, these new reforms, particularly the consolidation and elevation that have created new and super ministries might produce organizational structures that have more power than ever before. Again, as history indicates, the general tendency of bureaucracy is to place itself increasingly above the people, as every Chinese leader since Mao Zedong has understood and struggled to address and which these reforms also aim to tackle, in part.

In recent years, as part of publicizing streamlining and better services, senior leaders have frequently attended exhibitions where official seals, or gongzhang, are retired. Thus, vigilant oversight and supervision that can transcend bureaucratic tendencies will be vital for restraining that always-lurking potential for self-defeating "improvements." How to create innovative governance across the board that also encourages innovation, therefore, will be a major question going forward, and will test more than ever before what has been the system's incredible capacity for change.

The author is Director of the International Center for Advanced Political Studies at East China Normal University in Shanghai

Copyedited by Rebeca Toledo

Comments to zanjifang@bjreview.com

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