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China Scraps 9 State Bureaus, Cutting Government Meddling of Businesses
Nine of the 10 vice-ministerial state bureaus, under the caretaker of the State Economic and Trade Commission (SETC), will be scrapped before December 1, the Hong Kong-based Wenhui Pao reported on Monday.
And, the 800 or so governmental employees in the departments will be channeled to other positions, including working in the SETC, various trade associations and enterprises.
The drastic dumping of government departments are widely believed to increase the competitive edge of Chinese firms, which faces fierce rivalry upon the country's imminent entry into the World Trade Organization late this year.
The move is the biggest and also the most substantial one undertaken by the Chinese central government under Prime Minister Zhu Rongji to relieve enterprises of administrative meddling from the above.
Upon his confirmation at the first session of the Ninth National People's Congress, China's legislature, in March 1998, Zhu initiated to slash then swollen and ineffective State Council ministries from 40 to 29.
The nine industrial state bureaus to be eliminated include: the State Internal Trade Bureau, State Machine-Building Industrial Bureau, State Metallurgical Industrial Bureau, State Petro-chemical Industrial Bureau, State Light Industrial Bureau, State Textile Industrial Bureau, State Building Materials Industrial Bureau, State Non-ferrous Metals Industrial Bureau, and State Coal Industrial Bureau.
Another bureau, the State Tobacco Monopoly Bureau will escape the axe, because the government needs it to fight free production and sale of tobacco in order to ensure entries to the state coffers.
Following the disposal of the nine bureaus, the administration authority of the above nine industrial sectors will be transferred to the State Economic and Trade Commission (SETC), said Wenhui Pao.
The newspaper reported that the central government hoped the SETC would be restructured accoring to the mode of Japanese cabinet ministry of economics and trade.
Analysts said that the move would be greatly welcomed by China's state-owned enterprises, which, since the People's Republic of China was set up in 1949, have been put under the administration of the government at different levels.
Under a centralized planning economic system then, material supply, worker recruitment, pay and welfare, production and sale of a firm were all decided by the government.
Thanks to the reform drive carried out in early 1980s, China gradually lessens government control over its enterprises, letting them compete with each other on the market place.
A recent report from China's official Xinhua News Agency said China's SOEs (state-owned enterprises) were expected to pose a total of 200 billion yuan (US$24.2 billion) of net profits by the end of this year.
And by September, 3,630 large- and medium-sized SOEs had walked out of deficit, leaving less than 3,000 such firms still running in the red, the report said. [Source: chinadaily.com.cn]
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