China to scrap rail ministry – Beijing drive to reduce meddling in economy & society

March 10: China is firing the boss of all babudoms, burying a tradition that was replicated with messianic zeal in Bengal and some other parts of India.

China announced today that it would dismantle its railway ministry, known as “Boss Railway” because of the sweeping powers the bureaucratic behemoth wielded, as part of its biggest streamlining exercise since 1998.

The restructuring marks the country’s latest attempt to reduce government meddling in the economy and society — something many in India are familiar with.

Similarities between the Indian Railways — which presents its annual budget in Parliament while other carriers take care of their accounting in less hallowed real estate — and the Chinese giant are striking.

The Chinese railway had its own police force till recently. The Chinese utility still has something that should warm Mamata Banerjee’s heart and make her overlook the neighbour’s tenuous connection with the CPM: the Railway Art Troupe that sings, dances and puts on acrobatic shows and operas. Not to mention the China Locomotive Sports Team, which trains athletes in soccer, boxing, weightlifting, swimming and track and field.

The Chinese railway handles 1.8 billion passengers a year and employs 2.1 million people.

But under a new plan introduced in the rubber-stamp national legislature of China, the railway ministry will be split. Its regulatory responsibilities will go to the transport ministry and its operations to a commercial entity.

The other key proposed changes are:

Another influential bureaucracy, the family planning commission, which enforces the much-disliked rules that limit many families to one child, will be merged with the health ministry.

Two agencies that censor broadcasters and the print media will be combined into a super media regulator.

Five agencies that police fisheries and other maritime resources are being united into one to better assert China’s control over disputed waters, potentially sharpening conflicts with Japan, Vietnam and the Philippines.

The National Energy Administration, created five years ago to help oversee a pressing need for the fast-growing but resource-strapped economy, would be expanded to absorb a regulatory body that sets electric rates.

Overall, the realignment would do away with four agencies and reduce the number of ministry-level bodies by two to 25.

“Departments of the State Council (cabinet) are now focusing too much on micro issues. We should attend to our duties and must not meddle in what is not in our business,” Ma Kai, secretary-general of the council, told legislators.

Ma’s words will touch a raw nerve in Bengal, where the Left Front government had patented the science of inventing ministries to accommodate sympathisers and partners.

The ministries of fire, library and school education (in addition to a higher education cousin) are trophies Bengal has donated to the museum of redundancies whose principal objective is to find chairs for ministers who usually kill time twiddling their thumbs.

The Mamata government has merged some departments such as the education cousins (technical education is still a separate berth). But fire and library are still burning bright, although the number of ministries is within the prescribed limit.

CPM central committee member Mohammad Salim said in response to a question: “Bengal’s and China’s political scenes are vastly different. In Bengal, we ran a coalition government which entailed allocation of different departments to different Left Front constituents. That was required to maintain the coalition. However, if a CPM-led Left Front returns to power, objective conditions will have to be examined before taking decisions like downsizing departments.”

A central minister more or less echoed Salim. UPA government spokesperson and I&B minister Manish Tewari said: “It is difficult to extrapolate from one country to another; every country takes decisions based on local imperatives. And in a developing economy, the ministry of railways plays a unique and very important role.”

The same compulsion was cited by China, too, once. Some features that should ring a bell in India: the railway is the most popular form of long-distance transport, especially for Chinese who cannot afford to fly.

But buying tickets is difficult, and food, drink and other services on trains are poor — problems often attributed to corruption.

Even some forms of corruption share a good neighbourly relationship: in one case, almost all of a $260-million railway line in China had to be redone because unqualified sub-contractors had filled bridge foundations with rocks and sand instead of concrete.

Despite occasional efforts to arrest the trend, the Chinese government’s role in the economy and the power of state companies have grown over the past decade, often to the detriment of private and foreign companies, which face a welter of industrial and other policies that have raised barriers to success.

This time, the streamlining plan includes guidelines to restrict and better define the central government’s responsibilities, limiting its issuance of permits for projects, setting of standards and other policies that have slowed decision-making.

The scope and power of the Chinese railway ministry made it a natural place for the leadership to stamp its determination. As it expanded the railway system and built the world’s largest high-speed rail network, the ministry ran up hundreds of billions of dollars in debt and sank into corruption, giving critics an opportunity to pounce.

The ministry was so pervasive and powerful that it resisted government reform efforts for 15 years.

At each turn, the ministry’s long-standing ties to the military and a record for performance stood it in good stead. Over the past decade, it created the showcase high-speed rail system touted by the leadership as a symbol of Chinese technological power on a par with the manned space programme.

The ministry’s ability to throw money around to get things done and preserve its power in the end helped bring it down. Liu Zhijun, the bullet train network’s top booster, was ousted as minister two years ago amid accusations that he took massive bribes and steered contracts, some of them associated with the high-speed rail network. Among his rumoured misdeeds: having 18 mistresses.

Although Liu awaits trial, his fate — and perhaps the ministry’s — seemed sealed when bullet trains collided near the eastern city of Wenzhou in July 2011, killing 40 people and injuring 177. The accident outraged the country’s growing middle class — the prime users of the high-speed rail.

In the aftermath, the government began taking a harder look at corruption throughout the railways and the ministry.

“In recent years, the railways have developed in leaps and bounds and safeguarded the smooth running of the economy and people’s lives and production. But its government and enterprises are not separated. It doesn’t link smoothly with other modes of transport, and there are other problems,” Ma said.

Reformers crowed at the ministry’s abolition. “It means the country has removed the last ‘stronghold’ in the way of reforming the industry from a planned economy to a market economy,” the official Xinhua News Agency quoted Wang Yiming, a government macro-economic researcher, as saying.

In restructured Chinese government, market given a major role

Reduction in ministries to increase efficiency

China’s new leadership on Sunday unveiled the most significant government restructuring plan in more than a decade, announcing the dismantling and merging of several crucial Cabinet-level ministries with the aim, officials said, of reducing the government’s role and promoting non-governmental and market forces.

The plan includes breaking up the vast and influential Ministry of Railways, which has recently been embroiled in corruption scandals, and merging the powerful Family Planning authority – in charge of enforcing family planning rules – with the Health Ministry, a move seen as a possible first step in reforming the unpopular restrictions known commonly as the “one-child policy”.

It has also sanctioned the setting up of a unified National Oceanic Administration (NOA) to beef up and centralise China’s maritime law enforcement forces amid an escalating number of disputes, with Japan in the East China Sea and with half a dozen countries in the South China Sea.

The measures were outlined here on Sunday by the State Council, or Cabinet, amid the on-going annual session of the National People’s Congress (NPC), or Parliament, which will formalise the appointment of officials to head the new government under Xi Jinping. Mr. Xi, who replaced Hu Jintao as the General Secretary of the Communist Party of

China (CPC) and as head of the military in November last year, will be appointed as President in the coming week. Second-ranked Politburo Standing Committee member Li Keqiang is expected to succeed Wen Jiabao as Premier and head of the State Council.

First major reform

The restructuring is the first major reform measure announced by the new leadership under Mr. Xi, who has emphasised tackling corruption and bureaucratic inefficiency since he took over as the head of the party in November.

The State Council said the restructuring plan reflected the government’s desire “to not meddle in what is not in our business”. “Departments of the State Council are now focusing too much on micro issues,” it said, adding that it hoped to transform the role of the government “to reduce administrative intervention in the market and social issues”. The plan called on the government to “ensure the market’s fundamental role in allocating resources and to let social organisations play a better role in managing social issues.”

It said the government would streamline procedures for approving investment projects and licences, and consider easing restrictions on non-governmental organisations (NGOs). Most NGOs in China operate with strict supervision from the government, particularly when sensitive issues such as political and religious rights are involved. NGOs are required to be registered with government ministries, and often face obstacles in acquiring permits. “The current management mechanism is no longer suitable for the standardised development of social organisations,” the plan admitted.

However, it also underscored the limits of any future loosening of policy, stating that establishing an NGO “concerning politics, law issues and religions is subject to the government’s examination and approval before registry”. The restructuring has also proposed creating a single authority to regulate the media and enforce censorship restrictions, by merging the General Administration of Press and Publication (GAPP) and the State Administration of Radio,

Film and Television (SARFT). The State Council said the new authority that will regulate China’s media would “coordinate resources of each sector and promote reform of cultural institutions”.

Railways overhaul

The most significant restructuring measure proposed the dismantling of the influential Ministry of Railways, which has, in the past, operated as possibly the most powerful and wealthy of ministries. The ministry has been roiled by recent corruption scandals that led to the sacking of former Minister Liu Zhijun and exposed an alarming lack of oversight.

Now, the Ministry will function under the Ministry of Transport, which will handle its administration with an aim to increase the “integration efficiency of various transport means”. The commercial functions will be handled by a separate China Railway Corporation company.

Oceanic administration

The restructuring has also overhauled the country’s oceanic administration. Maritime disputes with Japan over the East China Sea and with several countries over the South China Sea had in recent months triggered calls for a more efficient and powerful maritime authority.

Officials and analysts have said an uncoordinated response from coast guards and maritime forces run by different ministries had prevented efficient and nimble reactions to the increasing number of clashes between Chinese fishing boats and naval vessels with those from other countries. A report by the International Crisis Group (ICG) last year warned that “the conflicting mandates and lack of coordination among Chinese government agencies… have stoked tensions in the South China Sea”.

Now, a unified National Oceanic Administration (NOA) will supervise all of China’s maritime law enforcement forces, including the coast guards, fisheries forces and anti-smuggling agencies, and will be charged with “better safeguarding the country’s maritime rights and interests”, the State Council said.