THE NATIONAL PEOPLE’S CONGRESS will rubber-stamp sweeping reforms to China’s governance in the coming days.
New institutions will oversee the financial and technology sectors, which multiple state organisations currently regulate.
Most notably for this Bystander, a new Party central work commission for the technology sector will oversee the restructuring of the science and technology ministry, which is intended to channel more resources to achieving breakthroughs.
President Xi Jinping is likely to chair the new commission as the intent of the governance reform is to move faster toward self-reliance in the face of what the State Council said were “the severe situation of international scientific and technological competition as well as external containment and suppression”.
Hitherto, the development of an indigenous semiconductor industry, for example, has underwhelmed. However, putting tech development under high-level Party leadership that will impose top-down policymaking will be no guarantee of more successful outcomes, even if policy implementation is less bedevilled by bureaucratic in-fighting and more responsive to the top leadership’s direction.
A new national financial regulatory administration will replace the existing banking and insurance watchdogs and bring supervision of the industry, apart from the securities sector, into a body directly under the State Council. Some powers will be removed from the People’s Bank of China. Details are yet to be made public. The securities regulator will also be directly overseen by the State Council.
The Party’s central financial work commission will likely be revived to enable Party direction of the new financial regulatory architecture which appears to be separating macroprudential regulation from market supervision. The new premier would likely chair the work commission.
Data is the third area of sweeping governance reform. A new national data bureau will be responsible for coordinating the sharing and development of data resources and planning the digital economy. The country’s top state-planning agency, the National Development and Reform Commission, will oversee it.
New central party committees overseeing ministries have been a hallmark of Xi’s governance. Yet, the latest reforms are the most sweeping since the creation of the National Supervisory Commission in 2018 to oversee anti-corruption work.
They reflect what top leadership considers China’s priorities: scientific and technological self-reliance and development, reducing systemic risk in the financial system and tighter control over data collection by private companies and cross-border data transfers.