China's Public Administration Reform: New Approaches

Mr. Xu Songtao
Former Vice-Minister of Personnel
CHINA

China's Public Administration Reform: New Approaches
By Mr. Xu Songtao, Vice-President of
IIAS Former Vice-Minister of Personnel,
China

Since 1980's, rapid development of globalization and technology revolution and thechanges taking place in society and economy have driven worldwide public
administrative reforms. With the impact of New Public Management, there has been agreat drive of administrative reforms resulting in the creation of reforms models withregard to the administrative functions, methodology, operational mechanism and self
management. According to Peters, the American scholar, these reforms models are
categorized as market model, involvement model, flexible government model andnon-regulated government model. Public administrative reforms were placed ingovernment agendas and even taken as important mission of administration together
with various kinds of programs. The wave of public administrative reforms did not
involve industrialized countries but also developing countries, especially those Asian
countries undergoing intensive changes. Like other Asian countries, China takes public
administrative reforms as the requirements of domestic changes and international
competition as well as an important dynamics to speed up the social and economic
modernization.
One. Administrative Reform: An Important Component of China's Political andEconomic System Reform
China's reform of its administrative system has been going along with its economic andpolitical reforms process. We view the administrative reforms as an important part ofour political system reforms and the conditions of setting up market economic system
and accelerating the modernization.
I. Economic Transition Requires Administrative Reform. It has been a long time that
China carried out a highly centralized planning economy, where national resourceswere allocated by administrative means and the government administered all the thingsof the society and directly controlled all the economic organizations including theenterprises and public institutions. Begun in 1980's, we started the reform and opening
up to outside world policy and gradually established a market economic system where
public ownership played a backbone role while other economic components developed.
This new establishment required strongly to reform the administrative system, changing

government functions and returning power to SOEs and grass root organizations. The
government functions were redefined as ensuring law reinforcement and management
such as promoting economic development, enhancing urban management, bettering
environment, guaranteeing social stability and providing public services. In brief, thegovernment should focus on delivering macro management, creating a sound market
environment to change the administration that used to serve planning economy to be on
the track of market economy development.
II. Administrative Reform Is the Needs of Globalization. Reform and Opening Up to
the Outside World has broken through the isolation of China from the world for
hundreds of years. China's economy will become an indispensable part of the world
economy when it joins WTO. The development of multinational corporations'business has shown the weakening borders and globalization of economy requires
diversity of administrations. Economic interdependence brings about more risks foradministration and the demand of globalization is that domestic administration must
be in line with international practice. In a sense, China's administration will go firstfacing the challenges in the course of entering WTO. China's status in the intensive
international competition is subject to its administrative efficiency and effectiveness.
III. Administrative Reform Is the Need of China's Democratic Politics Development
and Diversity of Societal Structures. The market economy and the opening-up
framework have made economic components, economic interests, socialorganizations, employment and ways of living diversified. The administration is facedwith the complexity and diversity that it has never experienced. People of all walks oflife are demanding more participation of politics and administration. Their demandson the objectives and standards of government services are also various. They ask fora more open and transparent administration and a system in which their grievance on
mal-management can work better. All these aforementioned are the needs of socialist
democratic politics and the direction of public administration reform, too.
IV. Administrative Reform Is the Needs of Improving Administrative Efficiency andRedesigning the Government Image. We have deeply recognized that the long-lastingoversized and overstaffing government organizations and the poor efficientadministration could neither meet the needs of reform and development nor the
expectation of the people on the government. That is the social pressure on thegovernment administration. The government needs to restructure its organizations,improve administrative efficiency; perfect management practices and improves therelations of the government and the public so as to acquire a high prestige.
All in all, to meet the challenges from the social and economic changes, we have todeepen the public administration reform and promote system and management
innovation. By doing these, we could then meet the needs of set-up of the socialist
market economy, globalization and China' entry to WTO, the needs of knowledge based
economy and informationized national economy and the modernization.
Two. Government Restructuring in China
The core of administrative reform is government restructuring. Since 1980' s, China has
restructured its government organizations for four times. These reforms were conductedin the year of 1982, 1988, 1993 and 1998 respectively. The reform of 1998 is the mostextensive and dynamic one.
The objective of the reform in 1998 was to organize an administrative system that was
running highly efficient, operating in a coordinating manner and guided by astandardized code of conduct.
The reform also aimed at improving the civil service to create a quality and professionalteam of administration. These efforts would make China's administrative system moresuitable to the socialist market economy.
In order to achieve these objectives, five principles were presented. 1. Redefining
government functions and separating government from the enterprises. Placing
government mandates on macro management over the national economy and provisionof public service. 2. Restructuring government organizations by optimizing
administrative structure, downsizing civil service and improving administrative
efficiency. 3. Rationalizing administrative responsibility and reducing the overlappingin accordance with terms of accountability. 4. Guiding administrative reforms of local
government organizations according to the respective local status of economic andsocial development. 5. Establishing a legal, procedural and standardized framework foradministration, in which the organizational establishment and budgeting are interdisciplined.
At present, the restructuring has been done in. central and provincial governmentorganizations and scored remarkable achievements that have made progresses asfollows:
1. Government functions have been changed. More than 280 functions that used to behandled by central government departments have been given to enterprises and otherintermediate social bodies. An across-board reform of procedure for administrative
examination and approval have been made in central and local governments and those
programs being handled illegally have been firmly eliminated. In the course, we didwhatever we can to streamline and delegate downward the programs and also put some
programs on record only. Oversight is strengthened to ensure those program that must
be examined and approved by the government are well processed. In addition, approval
procedures and results are required to open to the public on schedule.
2. Administration separated itself from enterprises management. In central government,
almost all the ministries and departments that used to control the industry directly havebeen eliminated including 9 government industry departments. The State Commissionof Economy and Trade is taking the responsibility of macro management over theindustry. The provincial governments did the same and turned some companies having
administrative functions into pure economic entities. Their administrative function has
been returned to government organizations. Some economic organizations that was
managed in the past by the governments have disconnected its linkage with thegovernment and become' entities in the market taking full responsibility of theirbusiness, profits and losses. They run the business on their own.
3. Downsizing the government organizations by reducing the number of ministries anddepartments from 40 to 29. Within the ministries and departments, more than 200
composing sections (25 %) are reduced. At the provincial level, the average number ofthe departments have been reduced from 55 in the past to 40 at present and 20 percent
reduction have taken place to the internal sections within the departments.
4. Staff reduction. In the central government organizations, the staffing establishment
has been reduced from 32,000 to 16,000 (50%). The average reduction at provincial
government is 48%. Starting from 2001,the organizational restructuring and staffing
downsizing have been lunched in city, county and township governments. 20%
administrative staffing will be reduced accounting for 800,000 people. The total
reduction will be 1,200,000 people if we count on those who are already redundantagainst the established staffing.
Three. Personnel and Administrative Reforms in China
One of the important components of public administration reform is to improve the civil
service system in the process of structural reform in order to build a highly qualified andprofessional administrative management workforce.
Administrative reform confronts two major problems-streamline the workforce anddivide responsibility. The structure reform that was launched in 1998 and still underway
results in reductions of public workforce of an unprecedented magnitude. The central
and provincial governments see a 50% of workforce downsizing, the city and county

governments 20%, which mean about one million government workers have been
separated from government. We took this great pressure as a propelling force,transforming the structural reform into an ideal opportunity for deepening personnel
system reform. In accordance with the overall requirements of structural reform, we
moved to adjust and optimize the structure of civil service and grassroots workforce inorder to improve the civil service system; We strengthen career and on the job training,retained the capable and fully utilizing their expertise, in order to raise theadministrative efficiency and to build a lean, clean, of high quality and professional
civil service that can satisfy the needs of the people.
In the restructuring process, particularly with regard to determine the department,
determine their functions and determine their staffing quotas, following has beenstressed: compliance with the job requirements, participation of broad masses,
comprehensive evaluation, and decision by the leadership. By compliance with the job
requirements, it means to assign position to the appropriate persons in compliance withthe requirements of the position and optimizing the staff structure in order to achieve theability of the staff be fully tapped. By participation of the broad masses, it means toincrease the transparency and enable the general civil servants to participate in andmonitor the reorganizing process. By comprehensive evaluation, it means that, inassigning person to positions of director general or division director, to publicize thepositions and qualifications, recommend candidates by certain method before thecandidates are determined by management departments of the civil servant throughcomprehensive evaluation. Decision by the leadership means that the responsible civil
servant management department leadership makes collective decision on theappointment from the candidates in accordance with their personnel responsibilities andin strict compliance with provision of appointment procedures and regulations.
By doing so, the structure of the civil service has been further optimized, themanagement civil service system has been better improvement, and the quality of thecivil service has been enhanced. Take the civil service of the State Council as an
example after the restructuring, the civil service is better educated. The percentage ofthe civil servants that have university degree has risen from 70% to 78% with anincrease of 8 percent. The civil service is younger. The percentage of the civil servants
under age of 40 has raised from 54% before the restructuring to 60% at present with anincrease of 6 percent. The working manner and efficiency have seen improvement by alarge margin.
In order to ensure a smooth streamlining process, the government conducted therestructuring in accordance with the principle of separation with payment, reorientation
training, strengthening enterprises and optimizing the structure. Separation with

payment means that those that separated from the government through thisrestructuring will maintain their previous salary grade and benefits. Re-orientationmeans that those separated will receive formal and professional training in fields where
market has great demands, so that they can prepare for new job opportunity.
Strengthening enterprise means to conduct specific training to the selected people
from those separated in the restructuring before re-deploy them to specific sectors of
public service such as financing, industrial and commercial enterprises, taxation andquality control departments. Optimize the structure means to improve the structure ofage, knowledge and specialty of the administrative departments, enterprises, and grassroots administrative organs through the restructuring process in order to achieve
optimizing the components and raise the overall quality . The government encourage
the separated staff to seek employment on their own, to lead or set up enterprises or non
profit institution, or work in sectors of other ownership and grant them some financial
compensation. The government also encourage those who approach retiring age to go
home. These people will maintain their salary and benefits and would only retire
formerly when they reach the statutory retirement age. By implementing those policies,
the government take fully into account of the interests of the separated people and thus
ensure the smooth execution of the restructuring.
At present, China's public administrative reform is progressing further in term of depth
and magnitude on the basis of completing the restructuring and personnel system
reform. Some highlights include: 1. Make public administration open by focusing on
providing service to the public. All government agencies that handle affairs matter tothe interests of the people, so long as the affairs do not involve state secrets, must makethe process open within the agencies, to certain degree or to the general public in
accordance with needs of the serviced. Subjecting the government and civil servants
into the outside scrutiny in their discharging their responsibilities can help to avoid
subjectivism, secrecy, arbitrariness, abusive of power, and corruptive behavior , will
provide necessary check to government and its officials, and safe guard the public
interests. 2. Promote community services. Government agencies such as industry andcommerce, taxation, personnel management, labor, health care and residence
administration that provide services to the general public have their field offices basedin community so that people can have convenient access to government agencies, makefewer trips to and spend less time on going to government offices. 3. Build
e-government. Government construct net platform where public can have access to all
the information that can go public. Public services wherever possible will be delivered
via internet. Since 1999 when the government launched "Government Internet
Program", there has been steady progress in e-government. For instance, the Ministryof Personnel started to provide services such as civil service exams, personnel mobility,
issuance of residence permits and employment of Chinese nationals that return from

overseas studies via internet. All these administrative reform measures havecontributed the transform the government functions into services and thus makegovernment become truly organ in providing social regulations and services.
Four. Reflections on the Administrative Reforms in China
In retrospect, public administrative reform in China has experienced some ups anddowns over the past twenty years. It is an ever deepening process un~l to date. In thisprocess, we learnt experiences from the market economy countries and some Asian
countries, draw on modern public administration theories, and developed theories thattypical of our own conditions. In a nutshell, it can be summarized as public
administration reform must proceed from the national conditions with a particular focus
on streamlining government workforce and delegation of power, properly settle thedivision of responsibilities among government agencies of various levels and various
government agencies of the same level. Bold in reform on the one hand and giving
adequate attention to stability in a gradual manner so as to establish a clean and efficient
small government suitable to the requirements of market economy.
I. Division of Administrative Functions and Delegate Power. Division ofadministrative functions and delegating power is a core of public administrative reforms.
It is a very important vehicle by which democratic politics can be achieved. It is also aorganizational foundation for a fast economic development. The fundamental goal of
public administration reform is to mobilize and enhance the vitality, effectiveness andactivism of the various sectors. Ambiguous division of power, duplicating functions andover-concentration of power bound to smother the vitality and activism. Effectivenessand efficiency are hard to come by. In our long standing efforts to public administrativereform, we have found it is of great importance to properly settle the three relationships
for a public administrative system suitable to the requirements of socialist market
economy.
1. Properly settle the relationship between the central and local government.
Historically, China used to be a highly centralized the country. For a long period oftime after the founding of new China, China adopted a planned economy with overcentralization of power. Since opening up, we have placed consistent attention toproperly handle the relations between the central and local, centralization anddecentralization. On the one hand, the central government must ensure the its decrees
applied across the whole country and maintain its authority, on the other hand, it mustfully motivate the activism of the local government, and delegate the administrative
power which belongs to the local government such as personnel, finance, material,
approval of project power to the local government. By so doing the balance can beachieved that the macro policy decision of great significance be centralized and theadministration of general social affairs be handled by the local government.
2. Properly settle the relations between the government and enterprises. There had'been a predominant drawback in China's administrative management system. And thatis there was no division between government and enterprises. Government directlyinterfered with the production and management activities of state enterprises, the basic
function of market in distributing resources is difficult to tap. With this in mind, thegovernment were resolute in transforming the government functions and separating thegovernment from enterprises. The government delegated the power of production andmanagement to enterprises and transferred the functions that the society can self
regulate and manage to intermediate social bodies. To achieve these goals, thegovernment drastically abolished the departments that managed production andcommerce industries, strengthened the functions of the departments responsible foroverall economic management and coordination, and social management, thus shifting
the government functions toward macro regulation, social management and providing
service to public.
3. Properly settle the relations among various government departments. In view of thegreat number of government departments, duplicative functions, passing the buckamong government departments, while abolishing and merging some departments, thecentral government, in accordance with principle of unifying the accountability withresponsibilities, also re-adjusted the functions among departments, relocating more than
100 functions among various departments, bear in mind that same and similar functions
be handled by one department. This has solved basically the problems of function
duplications, unclear accountabilities and responsibilities, administering one thing by
multi-department, various regulations over one thing.
II. Proceeding from the National Condition. Successful reform measures are always
rooted in its social, political and economic cultures. There is commonality andindividuality. On one hand, the superstructure must be adaptable to the economic basis,on the other, superstructure reacts on the economic basis. Therefore, public
administration reform must progress along with the economic, social, and science andtechnological development. Public administrative reform either lacking behind or
leading of these developments are not conducive to economic and social development.
The government of China, proceeding from the practical condition of establishing andimproving the socialist market economy, kept the administrative reform abreast of
economic and social development, and made administrative reform better serve theeconomic and social development and viable method for economic development, andsocial stability. China conducted its administrative reform in accordance with theprinciple of separation government from the enterprises, changing the role ofgovernment in managing economy, making possible for the enterprises go to the market,
where enterprises become competitors, government's task is overall planning, gasping
policy, providing information, organization and coordination, providing services,
oversight and monitor and strengthening macro regulations.
III. Downsizing to Achieve Small Government. Establish a market mechanism andtap its potential, give full display of civil vitality, downsize the government and its
workforce. These are the common phenomenon in public administrative reforms invarious countries. These are the goal that China pursued in public administrative reform.
In China, with the socialist market economy taking shape, gradual improvement ofmarket system and functions, the independent management of the enterprises, there are
inevitable demands to government to get rid of the enterprises management functions
performed under the planned economy, and delegate the social functions tointermediate social bodies. The government's functions of direct management overenterprises shrank. As result, there are demands to streamline the government downsize
the workforce so that a lean, more efficient small government. Practice proved theseobservations completely correct. For example, after the restructuring, the workforce of
the State Council reduced by half, the efficiency has raised. Under the socialist market
economy, some government departments no longer played positive role. Rather, theyinterfere with the operation of market, and posed negative effects. Therefore thesedepartments had to be get away with in order to improve the efficiency of market
economy operation.
IV. Taking Both Reform and Stability into Consideration, Advance Step by Step.
Administrative reform is an arduous task requiring a long and gradual process. It must
be implemented step by step. At present, China is in economic transition. The market
development and improvement, the mindset change of the people, transfer ofgovernment functions all take some time. In view of the fact that administrative reform
often lags behind the economic reform, Administrative system needs to be reformed
constantly in order to adapt itself to the economic reform. Therefore it takes long andgradual process. Chinas' administrative reform has always adhere to the principle ofcombination of setting the overall goal with stage by stage implementation plan. In
conducting the structure reform as well as the establishment of civil service system,
China adopted step by step and gradual approach. Take civil service system as example,
it has gone through process of theoretical research, drafting regulations, conducting
pilot trial, overall implementation and improvement. The undertaking started in 1984
and the reform continues to be deepened. With regards to structure reform, the present
stage has been achieved through constant reform and adjustment in relation toorganization structure, division of functions, and working procedure. And it is precisely
due to these factors, although administrative reform of the past 20 years put tens ofmillions of Chinese people's interest at stake, and left several million people separated
from their jobs, we have been able to maintain social and political stability, and ensured
an orderly administrative reform.

The End