BEIJING (BLOOMBERG) - Chinese President Xi Jinping is preparing to extend a sweeping government overhaul that would give the Chinese Communist Party (CCP) greater control over everything from financial services to manufacturing to entertainment in the world's second-largest economy, two people familiar with the matter said.
The changes are part of a proposed "CCP leadership system" approved by the party on Feb 28, the people said. Details of that document, which called for merging more than a dozen state agencies, are due to be revealed by March 17 when the National People's Congress - China's rubber-stamp legislature - votes on the plan.
The leadership expected ministries to complete the reorganisation within the year, said the people, who asked not to be identified because the details aren't public. In some cases, party organisations would completely absorb state agencies, the people said.
"It marks a significant shift in governance philosophy and unabashedly puts the party in charge and declares that this shows the superiority of China's socialist system," said Dali Yang, a political scientist with the University of Chicago.
"The move will fuse the party with state institutions ensure the party is in the lead."
The moves would solidify Communist Party control over key functions of government, further centralizing power in the nation of 1.4 billion people. That represents China's most decisive shift yet from 1980s reforms led by Deng Xiaoping aimed at professionalizing the government after Mao Zedong's disruptive party-led political movements led to famine and bloodshed.
At the time, Deng had said "the separation of the party and government" was necessary to unleash an economic boom that continues to endure. Yet Xi has gone in the opposite direction, arguing that China's centralised system provides an alternative model for countries to get rich without embracing Western democracy.
"A primary task of deepening reform of the party and state institutions is to strengthen the CCP's leadership in every sector," the Central Committee said Sunday, citing a decision during the body's conclave last week in Beijing.
Since taking power in 2012, Xi has re-asserted the party's authority with new loyalty rules and a series of panels to take over policy-making duties traditionally left to Premier Li Keqiang and his State Council. That led to confusion over who was responsible for policies and prompted multinational corporations to start lobbying secretive party agencies about policy changes.
The National People's Congress gathering that began Monday in Beijing was poised to formalise and expand that structure. Lawmakers also prepared to appoint Xi to a second term and repeal constitutional term limits preventing him from staying on indefinitely.
Some of the planned changes have already been reported, including the merger of the China Banking Regulatory Commission and the China Insurance Regulatory Commission. The Transport Ministry will also be reformed, Yang Chuantang, the ministry's party secretary, told Bloomberg on Tuesday.
While the people didn't reveal all the planned changes, the ones they mentioned included:
- Merging the State Administration for Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, and some functions of the National Health and Family Planning Commission
- Combining the Ministry of Human Resources and Social Security with the Ministry of Civil Affairs.
- Consolidating China Central Television, China Radio International and China National Radio into a single broadcaster
- Merging the land and water ministries with the State Forestry Administration Combining the offices that oversee policy for the democratically run island of Taiwan and the semi-autonomous former colonies Hong Kong and Macau
The plan will also see the party take over certain agencies, the people said. For instance, they said, the party's Publicity Department will be merged with the State Administration of Press, Publication, Radio, Film and Television, which regulates newspapers and Hollywood films.
The State Council Information Office referred questions to the National People's Congress media office. A representative at that office declined to immediately respond to questions on the proposal.
"From the party's perspective, it doesn't make much difference to consolidate these bodies, but combining them helps coordinate the agencies and make sure the message is unified," said Ether Yin, a partner at research firm Trivium China in Beijing.
"The key power levers for the party are the pen and the gun. In terms of the pen, they want tighter control of the propaganda system and cyberspace, the new battlefield for propaganda."
China has previously announced plans to expand the mandate, powers and legal basis of the party's main anti-graft watchdog, which has punished an unprecedented 1.5 million cadres as party of Xi's crackdown on corruption.
The National Supervision Commission, which also requires a constitutional amendment, would police millions of public servants, party officials, academics, journalists and state company managers.
'Clear-Cut and Righteous'
For Xi, the proposals represent the culmination of a five-year push to reassert party control. In October, he revived a phrase from Mao and declared, "east, west, south, north and center - the party leads everything."
Lawmakers were also expected to amend China's constitution to establish the party's leadership as a "defining feature" of the political framework.
Perhaps the clearest signal of China's intentions to reject Deng's calls for the separation of the party and government came last March from former anti-graft chief, Wang Qishan.
"There's only the division of labour between the party and the government, but there's no separation of the party and the government," Wang said while attending an NPC briefing with the Beijing delegation's group.
"We must be clear-cut and righteous about this."