High Hopes for Administrative Reforms in Shenzhen

Original article: [Chinese]

Three decades after leading the way as China's first Special Economic Zone, Shenzhen is once again at the forefront of another comprehensive reform program.

This time the reforms, which follow naturally from economic development in the area reaching a certain level, are aimed at shaking up the structure of government administration.

Surprisingly, the notion of separating the administrative functions of policy making, execution and supervision, which had been shelved for the past five years, have now reappeared as part of the "General Proposal of Shenzhen Comprehensive Reforms" legislation that was approved by the State Council in early May.

Reform of the government administrative system will no doubt involve dealing with many deep-seated and complicated problems, and the process is likely to be arduous.

What sets Shenzhen apart from the other two areas involved in the pilot program - the Pudong Economic Development Zone and Tianjin Binhai New Area - is that Shenzhen is the only one that has been vested with a certain legislative power.

Given this, Shenzhen has more room to move in the design of the new administrative system and thus the public have high expectations of the Shenzhen reforms.

The past three decades of China's reform relied on two "magic weapons". The first was property rights, which gave birth to the micro-foundation of the country's social market economy and generated the driving force of economic growth.

The other was separation of powers, which laid the foundation for the macro-management system and solved the incentive problems of administrative management. Combined, these two "magic weapons" are at the heart of the so-called "China Miracle" and "China Model".

When we talk of separation of powers, most people only consider the vertical decentralization of economic power from central government to local ones, but pay little attention to the horizontal separation of power among various government departments.

In the past, under the influence of central planning, Chinese government agencies were structured in accordance with industry sectors resulting in too many departments and giving rise to coordination difficulties as well as high management costs.

Since then, governments at all levels have succeeded in separating their administrative role from enterprise management and other areas. Now it's time to turn our attention to the horizontal separation of administrative powers.

The principle for separating out the three administrative functions of government should result in fewer policy-making bodies, more departments devoted to the execution of policy and the independence of supervisory bodies.

In the wake of this separation of administrative powers, a large number of bodies devoted to the execution of public policy will be responsible for providing services to the public or will contract out these services to private enterprises.

As China continues to deepen government administration system reform, we can envisage this horizontal separation will no doubt result in the privatization of more public utilities.

The difficulty of this reform lies in dealing with the so-called "administrative institutions" in sectors such as education, health care, culture, the press and broadcasting.

Each of the agencies in charge of administrating these areas is still in control of decision-making, implementation and supervision and retains a strong flavor of the former planned system. If these problems are not solved, it will be hard to say that the reforms have been successful.

We should also remind ourselves that although the separation of administrative powers is indeed a big advance, it is still only a step along the way and can't represent the long-term goal of reform.

We should be aware that the pilot project can't solve all the deep-rooted problems in the system of governance. After all, there still exists room for reform exploration. For instance, Shenzhen can take advantage of its legislative power to intensify efforts in promoting the establishment of a supervisory system that allows for the greater participation of public stakeholders.

The great hope of the public is that, whether it be the establishment of a special economic zone or the introduction of a comprehensive reform program, all reform methods must conform to the principles of a market economy and international practice - the end goal should be the establishment of a society with a modern administrative and political culture.

Translated by Liu Peng