People pose with the flag of the Communist Party of China during a visit to the Communist Party of China Museum in Beijing on March 3, 2023, before the opening of the annual session of the National People’s Congress. country on March 5.
Greg Baker | afp | beautiful pictures
BEIJING — China’s ruling Communist Party is setting up committees to oversee finance and technology, state media announced on Thursday.
Changes come when the President of China Xi Jinping considers unity within the party to be essential for nation building. That contrasts with the trend of China’s leaders in recent decades to delegate more power to the government and its ministries.
A new “Central Finance Committee” is set to strengthen the “centralized and unified leadership of the party over financial affairs,” state media said Thursday in Chinese, according to a translation by CNBC. The committee is responsible for high-level planning for financial stability and development, the report said.
The Chinese government’s annual legislative meeting this month highlighted that addressing financial risks is a top priority for policymakers this year.
The report says the new commission’s administrative office will take over the responsibilities of the State Council’s Financial Stability and Development Committee — a group that was once supervised by Liu He basically retired and now dissolved.
Besides that administrative office, a “Central Financial Work Committee” will be established to focus on ideological and party-related work in the financial industry, state media said.
While state media did not elaborate, a financial working committee of the same name was established in the aftermath of the 1998 Asian financial crisis. The committee was dissolved after about five years, leading to to the establishment of the now defunct Chinese banking regulator in 2003.
It is unclear how the future work of the committee will compare with history.
Back in the late 1990s and early 2000s, the Central Financial Work Commission helped make financial regulation and supervision more streamlined — minimizing the influence of powerful interest groups on regulators. reason, Sebastian Heilmann, professor of political economy of China at the University of Trier, said in a note. He later became the founding president of the Mercator Institute for China Studies.
Heilmann wrote in 2004: “But the hierarchical institutions of the Control Party are incapable of providing market-based incentive structures for financial executives and fail to prevent financial underperformance. weakness and corruption. increasing activity of foreign investors.”
Restructuring the Council of State and Technology
Thursday’s announcement includes previously released details about the plan restructuring of the Council of State — the highest executive body of the Chinese government — with the establishment of the Central Committee of Science and Technology.
The responsibilities of that party’s cadres are assumed by the restructured Ministry of Science and Technology.
Changes to the State Council created a National Financial Conduct Authority to oversee most of the financial industry — with the exception of the securities industry. The plan also changes the name of the China Securities Regulatory Commission within the State Council from something similar to the council’s Research and Development Center to the name of the customs authority.
Beijing has yet to announce who will head the financial regulator or new party committees.
The changes announced Thursday will take effect at the national level later this year.
Other new committees include groups that oversee the party’s work in industry associations and Hong Kong and Macao affairs, state media said. Beijing has tightened control over areas – under a “one country, two systems” structure – that enjoy freedoms that do not exist on the mainland.
Xi — China’s president and party general secretary — has consolidated his power and oversaw the party’s growing presence in the economy, including in non-state-owned enterprises.
The new committees are part of the party’s central committee, which has about 200 members. From those members came the core leadership – the Politburo and its standing committee.
Membership changes are made every five years at party congresses, the most recent of which was held in October. At that congress, Xi paved the way for unprecedented third term as president and The party leadership is packed with loyalists.
