By Chun Han Wong
BEIJING—China unveiled plans for overhauling its government bureaucracy, combining some financial, markets and business regulators, as part of President Xi Jinping’s efforts to strengthen Communist Party control over levers of power. Presented Tuesday to China’s legislature, the proposal calls for merging the banking and insurance regulatory commissions, consolidating bureaus that regulate business and pricing into a new market supervision agency and creating a new ministry to manage land, ocean and other resources.
Broad-ranging changes in the plan include a powerful supervisory commission to further press Mr. Xi’s anticorruption crackdown and a new ministry to handle veterans affairs, following years of sporadic protests by demobilized soldiers over welfare. A new office of international development cooperation is being set up to oversee the country’s rising financial aid programs like Mr. Xi’s Belt-and-Road initiative to build infrastructure across much of the world.
A look at China’s restructuring of government agencies.
COMBINED: Separate banking and insurance regulators will be merged into a single agency to better fend off risks in the country’s financial system.
SETUP: A national market regulatory administration with sweeping responsibilities will incorporate functions of a half-dozen offices to oversee business competition and practices, from corporate and antitrust regulation to pricing and food safety.
RETOOLED: A National Health Commission, with responsibilities over public health issues, is replacing the National Health and Family Planning Commission, de-emphasizing government-set birth limits and refocusing policy for an aging society.
REVAMPED: A beefed-up environment ministry will add to its environmental-protection mission, taking on antipollution and conservation functions currently spread across six other agencies.
MERGED: Merging the Culture Ministry with the national tourism administration, in a push to develop and promote Chinese culture, and enhance China’s soft power.
The overhaul comes on the heels of constitutional amendments that in effect boost Mr. Xi’s power, and fits with his broader plans to install himself and the 89 million-member party at the center of China’s political landscape.
A party directive issued last month said the reorganization aimed to “strengthen the Communist Party’s leadership in every sector.” Key to that is eliminating the bureaucratic inertia that Mr. Xi and other senior leaders say has hampered efforts to shift the economy away from wasteful investment toward more sustainable growth and make China a global power.
In a commentary published Monday in the party’s flagship newspaper People’s Daily, a top political aide to Mr. Xi, Ding Xuexiang, said the reforms would help “combat various efforts to deny, weaken and dilute the party’s leadership.”
Though Beijing tweaks its bureaucratic structure every few years, the current plan is the most sweeping in a decade and a half. It is all but certain to be approved by the party-controlled congress on Saturday, since the reorganization was finalized at a closed-door, high-level party conclave late last month. Separate reforms have also been planned for the party’s internal agencies.
Given the plan’s emphasis on control, foreign businesses—which have complained about unfair and selective regulation—are likely to face more formidable government agencies. The new national market regulatory administration in particular brings under one roof separate bureaus that handled pricing regulation and antimonopoly enforcement, which have in the past pursued high-profile cases against foreign companies.
Overall, the restructuring aims to reverse a trend started four decades ago when Beijing started free-market reforms to invigorate the sluggish command economy. China’s leadership under the reformer Deng Xiaoping sought to separate powers, giving the party a guiding role while the government directly managed the economy. A result has been to weaken the party’s dominance over society—a process Mr. Xi now wants to change.
“Xi is telling everyone that not only is the party in charge (it always has been) but also now that the party must be seen as running the government,” said Ryan Manuel, an expert on Chinese politics at the University of Hong Kong. “He wants to use more party methods to rule the government, as opposed to the traditional method of having two separate trains running in parallel, with cadres forced to leap back and forth across the tracks.”
Squabbling between agencies and uncoordinated responses from bureaucracies in recent years have hampered the government’s ability to respond to turmoil in financial markets and to entice more private capital into public projects.
To get a better hand on China’s economy, the overhaul creates a national market regulatory administration by merging bureaus that handle price regulation, business licensing, antimonopoly enforcement, quality control and food and drug safety.
Merged into one agency will be the currently separate commissions that regulate the banks and the insurers—a move to better manage the institutions that are a major source of funds for financial markets and the economy. In addition to the pricing and antimonopoly powers, the market supervision agency will also oversee business licensing, quality control and food and drug safety.
Other changes also reflect new government priorities. With Mr. Xi vowing to end rural poverty, a new ministry will subsume the Agriculture Ministry and take on authority for rural development that are currently shared with the Finance Ministry and three other agencies.
The national police, the Public Security Ministry, will get a new immigration bureau to better manage the increasing numbers of foreigners living and working in China.
Animating the reorganization is an attempt to further centralize control. Since becoming party chief in late 2012, Mr. Xi has concentrated decision-making powers in party committees that he chairs, assuming much of the government’s traditional influence over policy.
Mr. Xi has demanded state-owned enterprises pledge allegiance to the party’s leadership, called for a more muscular party presence in private businesses and imposed political controls over universities and schools. On Sunday, lawmakers repealed term limits on Mr. Xi’s presidency, bringing the tenure for the state post in line with those of his more powerful party posts, and allowing him to rule indefinitely.
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