China Word of the Day: “Restructuring”

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I’m feeling like a big cliche at the moment, sitting here at a Starbucks in scenic Exton, Pennsylvania and trying to get a little blogging in between other commitments. Blogging at a Starbucks, surrounded by suburban Americans with their bizarre custom coffee orders — it’s like the first half hour of a Rom Com.

Anyway, everyone (not here, but everyone back in China) has been waiting for the policy shoe to drop from the new government for quite a few weeks now. Just what is the new government going to do in response to the significant challenges in the Middle Kingdom? There have been a couple of speeches but no real action thus far.

And now for something completely different: Beijing is messing with the government’s Org Chart.

China plans to restructure government bodies responsible for energy, railways and food safety as the nation’s new leaders seek to cut down on bureaucracy in the biggest top-level reorganization since 2008.

The Ministry of Railways will be split, the National Energy Administration will take over power-market regulation and the food and drug regulator will be elevated to a ministry-level general administration in a bid to improve food safety, according to a plan announced at the country’s legislature in Beijing today. Maritime law enforcement will be combined under a single body as China tussles with neighbors including Japan and Vietnam over disputed islands. (Bloomberg)

From far away, this reshuffling looks like a “one size fits all” fix for very complicated issues. Shuffle the boxes around, shake up the organizations, and let’s see how everything falls together on the other side.

But reorganizations can’t be analyzed from the outside of course. The macro moves might make sense or they might not — depends on what happens on the ground and whether implementation is handled correctly. With the food and drug guys, for example — the SFDA has had endemic corruption and other problems ever since I can remember (I used to do a bit of pharma work back in the day). That’s something that has to be fixed from the inside with a change of culture, among other things. Anyway, if some of the reporting is accurate on the SFDA move, this might be more about food safety and projecting an image of “We really take this stuff seriously.”

Some of the other moves are intriguing and certainly look smart from the perspective of this mostly-ignorant outsider. I’ll be interested to hear from the real industry gurus as time goes on. For example, given the horrific accidents and scandals that have hit China’s rail network, the idea of splitting construction from the owner/operator end of things sounds like a good idea. But really, that’s way out of my blogging comfort zone.

On a side note, I now work in an organization with real transport gurus, including guys who focus on rail, so to the extent I can pump those folks for info on this issue and blog on it without crossing any sort of employer confidentiality line, I’ll try to do so. Granted, these are mostly software sales guys, not industry analysts or anything, but I have a feeling that they know a thing or two about the agencies they deal with on a daily basis.

One more item of interest:

The long-heralded restructuring of State Council ministries and departments was finally announced today. As had been anticipated, the General Administration of Press and Publications and the State Administration of Radio, Film and Television will merge into a new body, the State Administration of Press, Publications, Radio, Film and Television (guojia xinwen chuban guangbo dianying dianshi zongju 国家新闻出版广播电影电视总局). The National Copyright Administration, a subordinate department of GAPP, will also be brought into the SAPPRFT, an unfortunate moniker if ever there was one. (China Copyright and Media)

Rogier (as usual with whatever he blogs about) is spot on regarding the name. It’s like something out of Terry Gilliam’s Brazil. He also points to the most significant take-away from all this that I hope the foreign press do not ignore: this restructuring is not a liberalization story. This is an administrative move grounded in efficiency concerns, in part because of the challenges of new technology, and if anything, may allow for more direct control over some areas of the media and not less.

Each one of these moves is distinct, as each government body has its own special set of challenges. However, I’m not sensing any overall theme here aside from “Let’s see how we can fix this stuff through reform and efficiencies.” Reminds me more of post-M&A restructuring than anything else, and perhaps that shouldn’t surprise anyone. The word “technocrat” isn’t thrown around just for fun by China watchers, you know.

One response on “China Word of the Day: “Restructuring”

  1. Tee

    The major government restructuring that is being carried out is actually part of an effort at liberalisation. Certainly, that the number of government ministries has been reducied from 44 to 25 would appear to be a move to further concentrate power, but it is in fact designed to allow the state to transfer greater power to the markets and society and in the process get rid of the bureaucratic clutter that has produced so much inefficiency and corruption.

    The Ministry of Railway, for example, is now abolished with its former responsibilities divided between the Ministry of Transportation and various state-owned enterprises.