The implications of the mini-state council


Willy Lam weighs up the pros and cons of two recently launched commissions. 

Beijing unveiled in February, its largest-ever governmental entity, the National Energy Commission, to set policies for ensuring the fast-rising quasi-superpower’s “energy security” in the coming decades. Dubbed a mini-State Council, or cabinet, the NEC is headed by Premier Wen Jiabao. First Vice-Premier Li Keqiang, who is tipped to succeed Wen as head of government in 2013, serves as Vice-Director. Then, 21 ministerial-level cadres from as many government, party and military departments and agencies were made ex-officio members.

Apart from Minister of Foreign Affairs Yang Jiechi, the heads of civilian and military intelligence, respectively Minister of State Security Geng Huichang and the People’s Liberation Army’s Deputy Chief of the General Staff, Zhang Qinsheng, have been inducted into the high-powered body. Other big shots sitting on the NEC include Finance Minister Xie Xuren, Governor of the People’s Bank of China Zhou Xiaochuan, Environment Minister Zhou Shengxian and Commerce Minister Chen Deming.

The establishment of the NEC testifies to the fact that a one party-ruled state may not necessarily be able to move faster than a typical Western, multi-party democracy. It is true that the Chinese Communist Party (CCP) administration does not need to worry about opposition parties or a probing press. It is for this reason that in response to the oil price hike in the 2000s – and the challenges of global warming – Beijing has quickly laid the groundwork for dozens of nuclear power plants for the coming two decades.


It has, however, taken the administration of President Hu Jintao and Premier Wen more than seven years to cobble together the NEC. Premier Wen and First Vice-Premier Li were close to setting up an NEC like body in March 2008, when the second Wen cabinet came into being. The repeated delays were mainly due to bureaucratic in-fighting and back-pedalling.

For example, it is understood that China’s three super-rich oil-and-gas monopolies, namely China National Petroleum Corporation, Sinopec and CNOOC did not want to be subsumed under a super-ministry. The three oil conglomerates, together with state-held giants in the electricity and other energy sectors, have been criticized by even the country’s docile media for being empires unto themselves particularly when it comes to handling their multi-billion yuan profits.

For foreign governments and multinationals, however, the most significant implication of the NEC’s establishment is that the entire Chinese government’s weight will be brought to bear on strategic moves such as buying oil fields in regions ranging from Africa to Latin America. This means that China’s Big Three will have an even more lopsided advantage when competing with private multinational energy firms in global mergers-and-acquisition battles.

Moreover, the Hu-Wen leadership is optimistic that major energy-related manoeuvres will better serve Beijing’s national-security objectives. For example, Sinopec has to take into consideration the advice of diplomats as well as PLA generals before making a decision on snapping up assets in sensitive countries such as Iran and Sudan. For ordinary Chinese, the upside of the new energy landscape is that oil, electricity and other energy companies will be put under heavier pressure to set publicly acceptable price levels.

These firms will also be paying more attention to the environmental impact of new oil refineries or hydroelectric stations. Yet the inclusion of so many powerful bureaucracies in energy-related deliberations will not necessarily render decision-making more efficient – or more transparent. The participation of senior intelligence officials in the NEC could mean that the “mini-State Council’s” agenda and deliberations may be wrapped in secrecy.

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At about the same time, Beijing announced the establishment of another super-ministry, the interdepartmental National Food Safety Commission. (NFSC). It is headed by First Vice-Premier Li, while Vice-Premiers Hui Liangyu and Wang Qishan serve as the two vice-directors. This high-level organ came into being apparently in response to a new spate of food poisonings caused by melamine-tainted milk powder. In 2008, more than 300,000 children developed kidney stones and other ailments after drinking contaminated milk in what was described as China’s worst food-safety scandal. The official media has pointed out that the NFSC’s establishment signals the CCP leadership’s determination to eradicate the astronomical amount of fake food, drink, cigarettes, liquor and health supplements that flood into Chinese supermarkets every minute. Ministers and vice-ministers from 15 different departments sit on the NFSC. That almost all units in the central government – including the police, the Finance Ministry, the Ministry of Environmental Protection, and the Ministry of Science and Technology – are involved, however, could exacerbate the passing of the buck with Chinese characteristics. Of all the departments corralled into the NFSC, the National Food and Drug Administration bears direct responsibility over food safety.
In 2008, then NFDA director Li Changjiang was fired for failing to handle the tainted milk mishap. Unless the culture of corruption, nontransparency and prevarication is cured, however, there is no guarantee that a bigger and apparently more powerful commission can do the job. For the past eight years, the Hu-Wen leadership has time and again resorted to the so-called “inter-departmental solution” when tackling nettlesome socio-economic issues.

In the past year, ad hoc “working groups” consisting of senior representatives from at least seven or eight ministries have been formed to handle tasks ranging from cooling down the overheated property market to weeding out pornography and prostitution. The results, however, have been disappointing. For example, partly owing to the fact that real-estate speculators enjoy sterling political connections, housing bubbles have reappeared on the economic landscape with alarming frequency.



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