China has conducted five administrative restructurings since the reform and opening-up, each keeping up with the requirement to develop productive forces. The new institutional reform in 2008 will also be implemented in response to the development of China's market economy.
Looking back on the reform process, the tendency of China's administrative restructuring is quite clear. Political restructurings must be promoted via economic reforms.
'Institutional reform is a revolution'
The year: 1982
Representative: the National Economic Restructuring Commission
The State Council, China's cabinet, started the first institutional restructuring in 1982 after the reform and opening-up officially began in 1978.
The National Economic Restructuring Commission was set up, headed by the Premier of the State Council. The new agency aimed at centralizing the management of the country's daily economic activities and better developing the socialist planned economy.
Additionally, the Ministry of Foreign Economic Relations and Trade was established after merging several ministries and commissions. The newly formed organization has made great contributions for China's entrance negotiations into the WTO.
As a strategic move in modern administration the life tenure system for leading posts was abolished in the restructuring.
Separating government functions from enterprise management
The year: 1988
Representative: China National Petroleum Corporation
The second cabinet reorganization focused on separating the functions of the government from business management.
The State Planning Commission was founded as a macro-management institution in charge of the national economy and social development; it was not meant to exercise any micro control and industrial administration functions.
Several ministerial-level companies also appeared after the second reform. The Ministry of Petroleum was reorganized into the China National Petroleum Corporation and the Ministry of Nuclear Industry into China National Nuclear Corporation.
Establishment of the public servant system was the biggest achievement in this restructuring.
The restructuring was geared to the market economy
The year: 1993
Representative: Ministry of Aviation and Space Industry, etc.
The establishment of a socialist market economy was proposed at the 14th National Congress of the Chinese Communist Party in 1992. Reforms aiming at separating government functions from business were highlighted again in the annual Parliamentary meeting in March 1993.
"The restructuring should be implemented in response to the needs of the growing socialist market economy, making it different from previous reforms," said Luo Gan, the former Secretary-General of the State Council.
Some ministries and commissions were also reorganized into business enterprises during this reform. The Ministry of Aviation and Space Industry was restructured into the China Aviation Industry Corporation and the China Aerospace Industry Corporation.
The Chinese government had been trying to gain experience while actually implementing institutional reforms. Luo Gan said that the government should deepen administrative and institutional reforms in the future.
