- China’s ruling Communist Party is establishing commissions to oversee finance and technology, state media announced Thursday.
- The changes come as Chinese President Xi Jinping sees party unity as essential to building the country.
- Beijing has not yet announced who will lead the new party commissions.
People pose with the flag of the Chinese Communist Party during a visit to the Museum of the Communist Party of China in Beijing on March 3, 2023, before the opening of the annual session of the National People’s Congress on March 5.
Greg Baker | Afp | Getty Images
BEIJING — China’s ruling Communist Party is establishing commissions to oversee finance and technology, state media announced Thursday.
The changes come as Chinese President Xi Jinping sees party unity as essential to building the country. This contrasts with the tendency of Chinese leaders in recent decades to delegate more power to the government and its ministries.
A new “Central Finance Commission” is set to strengthen the party’s “centralized and unified leadership on financial work,” state media said in Chinese on Thursday, according to a CNBC translation. The commission is responsible for high-level planning in financial stability and development, according to the report.
The Chinese government’s annual legislative meeting this month emphasized that addressing financial risks is a priority for policymakers this year.
The report said the new commission’s administrative office will take over the responsibilities of the State Council’s Financial Stability and Development Committee, a group previously overseen by the essentially retired and now disbanded Liu He.
Alongside this administrative office, a “Central Commission for Financial Work” will be established to focus on ideological and party-related work in the financial industry, state media said.
Although not specified by state media, a financial work commission of the same name had been created in the wake of the Asian financial crisis in 1998. The commission was disbanded after about five years, leading to the establishment of China’s now-defunct banking regulator in 2003.
It’s unclear how the commission’s future work will compare to history.
In the late 1990s and early 2000s, the Central Financial Labor Commission helped streamline financial regulation and supervision, minimizing the influence of powerful interest groups over regulators, said Sebastian Heilmann, professor of the political economy of China at the University of Trier. on a paper He later became founding president of the Mercator Institute of China Studies.
“But the party’s hierarchical institutions of control were unable to introduce market-based incentive structures for financial executives and failed to suppress financial mismanagement and corruption,” Heilmann wrote in 2004. “Furthermore, led to friction with emerging new forms of corporate governance and the growing activity of foreign investors.”
Thursday’s announcement included previously released details of plans to restructure the State Council, the top executive body of the Chinese government, with the establishment of the Central Science and Technology Commission.
The responsibilities of this party commission are borne by the restructured Ministry of Science and Technology.
The State Council changes established a National Financial Regulatory Administration to oversee most of the financial industry except the securities industry. The plan also changed the designation of the China Securities Regulatory Commission within the State Council from one similar to the council’s Development Research Center to that of a customs agency.
Beijing has not yet announced who will lead the financial administration or the new party committees.
The changes announced Thursday will take effect nationwide later this year.
Other new commissions include groups to oversee the party’s work in industry and affairs associations in Hong Kong and Macau, state media said. Beijing has strengthened its control over the regions, which, under the “one country, two systems” structure, enjoy freedoms that do not exist on the continent.
Xi, China’s president and party general secretary, has consolidated his power and overseen a greater party presence in the economy, including among non-state-owned enterprises.
The new committees are part of the party’s central committee, which has around 200 members. From these members comes the basic leadership: the Politburo and its standing committee.
Membership changes take place every five years at party congresses, the most recent of which was held in October. At that congress, Xi paved the way for his unprecedented third term as president and filled the party leadership with loyalists.