China to Conduct Gov’t Downsizing

China will overhaul all government bodies, with the central government to undergo streamlining, organizations with similar functions to merge, and lower-level provincial entities to unify.

Chinese President Hu Jintao has made government reorganization a key task for his second term. He has appointed Li Keqiang, a member of the Politburo Standing Committee of the 17th Communist Party Congress, to carry out his reshuffle.

▽ Provincial organizational shake-up

Subject to reform are the lowest-level bodies of the four-tiered provincial government organization, namely “seong,” “ji,” “hyeon” and “hyangjin.” Another administrative unit, the village, is not considered an official government body though it has a village committee and secretary in charge of agriculture and administration.

By absorbing 37,500 hyangjin and 645,000 villages into a new encompassing administrative body called the mega-village, the Chinese leadership seeks to reduce the number of public servants while raising administrative efficiency. This plan also aims to enhance living standards in rural areas through semi-urbanization.

Rural areas of China have been hallowed out as large segments of the population migrate to cities. Thus rural areas do not need as many administrative bodies and public servants as before. The number of lower-level provincial officials is 6.8 million, or 2.8 million for hyangjin and four million for village leaders).

The merging process has been active in eastern China, including in Zhejian, Jiansu and Shandong. From 2001 until the end of 2005, Shandong reduced the number of its villages to 75,000 from around 81,000.

▽Mega-ministries

The central government shake-up will merge organizations under the State Council by function.

The central People’s Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission will be merged into a super regulatory body.

The Communications Ministry, Railways Ministry, Civil Aviation Administration of China and State Post Bureau will be absorbed to the Communications Ministry. The State Grain Administration and the State Forestry Administration will be merged into the Agriculture Ministry. The Energy Ministry will be set up to take over functions exercised by the State Development and Reform Commission, the Assets Supervision and Administration Commission and the State Electricity Regulatory Commission.

The Land and Resources Ministry and the State Environment Protection Administration under the Construction Ministry will be merged into the Environment and Construction Ministry. The Labor and Social Security Ministry will handle health insurance and welfare.

The Chinese government said it expects to reduce the number of state council institutions from 28 ministries and offices and 150 affiliate organizations to about 20.

orionha@donga.com