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SCMP: Why US is a factor in Xi Jinping’s Communist Party restructuring plans

Hamartia Antidote

Nov 17, 2013
United States
United States

  • The reform will give the party’s Central Committee more power over technology and finance, as well as Hong Kong and Macau affairs
  • The move comes as the country’s leadership looks to address the growing challenge from the US and curb financial risk
The Chinese leadership on Thursday unveiled details of a plan to overhaul state and Communist Party organs to strengthen control over the financial sector and boost the development of science and technology in the face of what President Xi Jinping believes will be an increasingly turbulent and chaotic external environment.

The plan includes the establishment of dedicated bodies under the party’s Central Committee to oversee these sectors and Hong Kong and Macau affairs.

The move comes at a time when Beijing is increasingly focused on tackling financial risk and facing heightened tensions with the United States, which is trying to curb the country’s rise by stepping up technology restrictions.

Xi’s solution is to strengthen the party’s control in key areas – finance, technology and local governance – to ensure China will have a stable and secured environment and can break the US stranglehold.

The Central Financial Committee will be tasked with strengthening party’s leadership over the sector, focusing on stability, high-level planning, and policy coordination. The Financial Stability and Development Committee, a regulatory body under the control of the State Council – the country’s cabinet – will be abolished as part of the overhaul.
Meanwhile, a Central Technology Committee will be formed to “centralise and unify” the party’s leadership, coordinate and promote innovation, streamline policymaking and coordinate the development of military-civilian technology.

The plan also stated that a Hong Kong and Macau Affairs Work Office will be established as an “executive body” responsible for overseeing the implementation of Beijing’s policies and decisions for the two special administrative regions.

Under the plans, the Communist Party will also establish a new social work department to handle public petitions and improve grass-roots governance.

The department will also be given responsibility for party-building in private enterprises and new businesses in the modern economy.

The reforms were unveiled at a time when Xi Jinping – who has just begun his norm-breaking third term as president – is seeking to strengthen the party’s control over areas such as the private economy and social enterprises as part of his plans to ensure economic stability and spearhead China’s drive to become technologically self-reliant.

The “Party and State Institutional Reform Plan” – which involves a restructuring of party, legislative and state institutions – was reviewed and approved when the party’s new Central Committee- its top policymaking body – gathered late last month.

However, details of the plan were only made public on Thursday, days after the National People’s Congress – the country’s legislature – wrapped up its annual session this week.

Under the plan, institutional restructuring at the central level has to be completed before the end of this year, while local level reorganisation will be wrapped up by the end of next year.

The Chinese leadership has made ensuring stability in the country one of its top priorities in the face of slowing economic growth and heightened competition with the US, which it fears is trying to encircle China.

During the national legislative session last week, Xi told private entrepreneurs to help overcome “comprehensive containment and suppression by Western countries led by the US”.

Meanwhile, the country’s financial system has been hit by a string of crises in recent years, including the bankruptcy of regional lender Baoshang Bank, the restructuring of national joint-stock bank Hengfeng, runs on small banks, and the collapse of peer-to-peer lending platforms that wiped out household wealth and triggered rare protests.

The country’s leadership has set a relatively modest economic growth target of “around 5 per cent” for this year, but it is urgently looking at ways to contain spillover financial risks from the external markets.

The concerns have been heightened by the fallout in the global markets from Silicon Valley Bank and Credit Suisse’s recent problems.
China has carried out two rounds of government restructuring since Xi came to power in 2012.

The first one, in 2013, focused on establishing new government agencies or merging existing ones

The second one in 2018 was more extensive, and looking to centralise power, with the formation of several party leading groups covering areas that ranged from foreign affairs to public health.

In the first public speech since securing a third term as president last week, Xi told deputies from the National People’s Congress that the party’s leadership is paramount.

“To build a strong nation, we have to stick to the leadership of the Communist Party, and the centralised and unified leadership of the party’s Central Committee,” he said, referring to the roughly 200-member body from which key positions in the government, diplomatic corps and military are filled.


Jul 21, 2021
This article is full of nonsense.

The current institutional reform in China is to abolish some useless institutions and concentrate power and work on the main institutions.

This is another reform to improve the efficiency of govt work, and it has nothing to do with USA. This is our internal thing, and it happens with or without USA.

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