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CHINA DAILY Tuesday, July 30, 2019 | 9Liu DongchaoConsolidating institutional reform
R
eviewing the reform of Party and
State institutions at a meeting on
July 5, Xi Jinping, general secretary
of the Communist Party of China
Central Committee, said the reform’s
achievements should be consolidated and
China’s system and capacity for governance
modernized.
As the country enters a new era of social-
ism with Chinese characteristics, the less
than optimal structure and allocation of
functions among Party and State institutions
have created problems leading to low effi-
ciency, which have made institutional
reforms imperative. But given the complexity
and risks involved and the possible profound
influence of the reform, the CPC Central
Committee has adopted a cautious but pro-
active approach to the issue.Coordinating the reform of
Party and State institutions
The Third Plenary Session of the 18th CPC
Central Committee in November 2013 put
forward the task of “coordinating the Party
and State institutions’ reform and straighten-
ing out departments’ responsibilities and
relationships”, while Xi, also China’s presi-
dent, asked the Central Leading Group for
Deepening Overall Reform to intensify
research on the reform of Party and State
institutions in 2015.
The Third Plenary Session of the 19th CPC
Central Committee passed the Decision of
the CPC Central Committee on Deepening
the Reform of the Party and State Institu-
tions and the Plan on Deepening the Reform
of the Party and State Institutions in Februa-
ry 2018, which has propelled the comprehen-
sive implementation of the reform. After one
and a half years of strenuous efforts, the
framework of a system for Party and State
institutions’ functions which meets the
requirements of the new era was basically
established.
First, the national governance system and
capacity have been comprehensively
strengthened thanks to the emphasis on asystematic and holistic approach to strategic
reforms. This round of reform is aimed at
promoting various reforms in central- and
provincial-level institutions and restructur-
ing the leadership, governance, military and
mass work systems, as well as strengthening
the leadership of the Party, enhancing gov-
ernments’ executive powers, the armed for-
ces’ fighting capability, and the vitality of
mass organizations.CPC’s centralized, unified
leadership strengthened
Tangible results have been achieved thanks
to the meticulous work of the central and
local governments and different depart-
ments. As President Xi said, the functional
system that safeguards the centralized and
unified CPC leadership has been improved; it
is more convenient for the Party and State
institutions to perform their duties; the allo-
cation of functions among different institu-
tions is more suited to the requirements of
the general strategic layout; an unhindered
and vibrant work system covering the central
and local governments has been built;
reform in the military and civilian fields has
been smoothly advanced; and various rele-
vant reforms have been simultaneously car-
ried forward.
Therefore, it can be said that the Party and
State institutions system has been optimized,
their functional capability enhanced; and
problems such as disconnect between power
and responsibility, overlapping of responsi-
bilities, and weak supervision have been
resolved. Also, China’s governance system
and capability have modernized.
Second, the CPC’s overall leadership,
which is the fundamental guarantee for
deepening the reform of the Party and State
institutions, has been established. Building
and improving the Party’s leadership mecha-
nism in major works and strengthening the
Party institutions’ leadership among institu-
tions at the same level are key tasks in this
round of reform. Therefore, in the process of
the Party and State institutions’ reform, aswell as the outcomes of the reform, the Par-
ty’s overall leadership has been effectively
strengthened.New institutions boost
the Party’s leadership
In the process of reform, meetings at all
levels and the work of institutions such as
the Central Comprehensively Deepening
Reforms Commission have comprehensively
carried forward the Party’s will. Thanks to
the reform, some leading groups at the cen-
tral level have been upgraded to commis-
sions and new institutions, including the
Central Commission for Comprehensive Rule
of Law and Central Audit Commission, set up
to strengthen the Party’s unified and central-
ized leadership of major work.
The State Administration of Civil Service
has been incorporated into the Organization
Department of the CPC Central Committee,
the State Administration of Radio, Film and
Television included in the Publicity Depart-
ment of the CPC Central Committee, and the
State Bureau of Religious Affairs merged into
the United Front Work Department of the
CPC Central Committee in a bid to transfer
relevant administrative functions to the Par-
ty institutions to help them better and more
directly perform their duties.
Third, the reform of the Party and State
institutions has legal safeguards as the rule
of law is the basic strategy of socialism with
Chinese characteristics. To this end, Xi made
it clear that major reforms should be carried
out in accordance with law. Consequently,
national laws and Party regulations were
amended, and the Decision of the Standing
Committee of the National People’s Congress
on Adjustment of Responsibilities of Admin-
istrative Departments Concerning Laws and
Regulations in the Party and State Institu-
tions Reform was passed on Apr 27, 2018.
Later, the NPC Standing Committee
amended more than 40 laws. The Decision
on Adjustment of Responsibilities of Admin-
istrative Departments Involving Laws and
Regulations in the State Council Reform wasissued by the State Council, China’s Cabinet,
on May 24, 2018, and the problem of the
legitimacy of restructuring, adjusting
responsibility, and managing and enforcing
the law before the revision of relevant laws
and regulations was solved.Reform regulations
straightened out
Besides, the General Office of the CPC Cen-
tral Committee has straightened out the Par-
ty regulations and relevant documents on the
Party and State institutions reform, abolish-
ing three and revising 35 documents. Which
has provided the legal and regulatory basis
for institutional reform.
And fourth, the Party disciplinary system
and national supervision system have been
unified. The Decision on Comprehensively
Deepening the Party and State Institutions
Reform proposed to establish national-, pro-
vincial-, municipal- and prefecture-level
supervision committees to jointly work with
the Party disciplinary organs, in order to uni-
fy inner-Party supervision and the supervi-
sion of national institutions. And with the
establishment of the National Supervisory
Commission on March 23, 2018, and the cov-
erage of all civil servants by supervision
organs, the anti-corruption battle will be car-
ried forward with greater force.
Despite the smooth implementation of
the Party and State institutions’ reform in
the previous stage, which centered on orga-
nizational restructuring and adjustment of
functions, much more work requires to be
done to fully implement the reform and
establish its significance. As Xi said, real
“chemical reactions” are needed, as only
superficial problems have been solved until
now. The Party and State institutions’
reform is a systematic project that requires
coordination among all sides under the
leadership of the CPC.The author is a professor at the Party School
of the CPC Central Committee. The views don’t
necessarily represent those of China Daily.Developing
nation status
not for US
to challenge
T
he United States’ latest
attempt to coerce the
World Trade Organization
into changing the develop-
ing-nation status of some WTO
member countries is destined to hit
a wall of opposition.
In a memorandum it issued on
Friday purportedly to promote
WTO reform, the US administration
threatened action by the US Trade
Representative if “substantial
progress” toward changes to the
special and differentiated treatment
for developing economies was not
made within 90 days.
When it comes to the reform of
one of the world’s most important
multilateral organizations, messing
with its basic principle and trying to
replace its rules with US laws are
bound to end in failure.
The special and differentiated
treatment is a basic right endowed
to the WTO members with develop-
ing-country status. More important,
it is a pillar of the organization. It
takes into full consideration the
gaps between developing and devel-
oped countries, embodies the inclu-
siveness of the multilateral trading
system and serves the long-term
interests of all countries.These gaps are comprehensive in
nature: per capita income, techno-
logical strength, economic structure
and quality of development, to
name a few. As there is no simple,
universal definition of a “developed”
or “developing” country, any assess-
ment of a country’s development
level must be done based on an
overall perspective and economic
facts. However, the US is attempting
to “upgrade” some developing mem-
ber countries by overstressing
selective indicators, in order to
deprive them of the legitimate rights
and interests they are entitled to by
virtue of their actual status.
This is not only controversial but
also a sure recipe for chaos, as it
would put new obstacles in the way
of WTO reforms. The US memo
pointed the finger at China and oth-
er developing countries while con-
veniently ignoring the yawning gap
between China and the developed
countries in terms of economic and
social development.
True, China has become the
world’s second-largest economy, but
it is also the largest developing
country. China’s per capita GDP was
only 15 percent that of the US in
2017, and it has a prominent imbal-
anced development problem, with
more than 10 million people still liv-
ing in extreme poverty.
China has never used the special
and differentiated treatment as an
excuse to shun its due obligations.
Since becoming a WTO member in
2001, it has actively safeguarded the
multilateral trading system and
made widely recognized contribu-
tions to global free trade and invest-
ment. By contrast, the US has
trampled WTO rules and under-
mined the rights and interests of
developing countries for its own
benefit, casting a shadow over mul-
tilateralism, and jeopardizing free
trade and the world economy.
The timing of the US move indi-
cates it could use the memo as a
new bargaining chip in the upcom-
ing 12th round of China-US high-
level economic and trade
consultations. The US tactic of
imposing pressure is nothing new,
only that it has never worked.
The US needs to show good faith
at the trade talks. If it plans to do
otherwise — flex its economic mus-
cles, for example, to harm the Chi-
nese economy — China is ready to
face it and nullify its designs.Xinhua The views don’t necessarily
represent those of China Daily.By contrast, the US has
trampled WTO rules
and undermined the
rights and interests of
developing countries
for its own benefit,
casting a shadow over
multilateralism, and
jeopardizing free trade
and the world
economy.Huawei is a good example of an innova-
tion-driven high-tech Chinese company. For
years Huawei’s R&D intensity has been
above 14 percent. In actual terms, Huawei’s
R&D investment last year was 101.5 billion
yuan ($14.77 billion) — the fifth-highest in
the world and more than that of Microsoft,
Apple and Intel. Also, by the end of last year,
Huawei had more than 87,800 global pat-
ents. No wonder Huawei’s R&D investment
and abundant innovation have placed Hua-
wei at 61 on the 2019 Fortune Global 500 list.
And despite Washington preventing US
companies from selling components to Hua-
wei in the first half of this year, the compa-
ny’s mobile phone shipment grew
continuously.
Since the beginning of this century, Chi-
nese companies have been applying or try-
ing to apply modern information technologyto improve production and operations. The
Internet Plus strategy has helped expedite
the integration of enterprises and the inter-
net. And many enterprises have achieved
rapid growth by making use of innovative
business models thanks to IT.
When it comes to fast-developing Chinese
companies, Xiaomi is an apt example,
because just after eight years of its establish-
ment in 2010, it has made it to the Fortune
Global 500 list, becoming the youngest com-
pany to do so.
Xiaomi’s “hardware plus internet” busi-
ness model has helped it to avoid direct
competition with other mobile phone com-
panies and achieve high-speed growth
through internet marketing. Later, it
changed its business model to “hardware
plus new retail plus internet”, which organi-
cally integrated retails with the internet tofurther propel the company’s growth.
Yet we should be aware of the gap
between Chinese enterprises and their
European and American counterparts. For
example, the net asset income rate of Chi-
nese companies is remarkably lower than
that of European and American enterprises
— which means there is much room for
improvement in China’s industrial struc-
ture.
So Chinese enterprises should accelerate
the development of strategic emerging
industries and the modern service industry,
and achieve upgrading through reform and
innovation, in order to climb up the global
industrial and value chains.The author is a researcher at Chinese Enter-
prise Confederation. The views don’t neces-
sarily represent those of China Daily.Liu XingguoR&D, innovation behind Fortune 500 success
F
or the first time in the 29-year histo-
ry of the Fortune Global 500 list, Chi-
nese companies (129) outnumber
those from the United States (121).
This is also the first time that a country other
than the US has more companies on the list.
Among the 129 Chinese enterprises on the
list, 119 are domestic in nature whose aver-
age revenue increased 9.2 percent year-on-
year — higher than the average revenue
growth of Fortune Global 500 companies.
These enterprises’ rates of profit and net
asset profit were 5.3 percent and 9.9 percent,
up 0.2 percentage points and 1.0 percentage
point year-on-year.
The Chinese enterprises have also taken
firm steps toward high-quality development.
And although they have encountered some
difficulties due to the Sino-US trade frictions
and the technological containment meas-
ures taken by the US government and some
US enterprises, their growth has continued
unabated.
Three major factors are behind the Chi-
nese enterprises’ continuous and rapid
development: reform, demand and innova-
tion. China’s supply-side structural reform
has improved the market competition envi-
ronment, promoted qualitative supply,
increased the enterprises’ earning power,
and enhanced their development potential
and momentum.
Increasing global demand for Chinese
products due to their cost advantage and
rapidly growing domestic demand driven by
income growth form the basis of their
expanding scales. But the greatest factor
driving Chinese enterprises’ continuous
development is innovation.
Reform will promote innovation. Innova-
tion will generate new demand and prompt
Chinese enterprises to improve their quality,
while technological innovation is key to their
development and expansion. And to change
their long-term dependence on low-end prod-
ucts, the Chinese companies, with the govern-
ment’s active help, have invested more in
research and development to facilitate their
qualitative growth and expansion.
Last year, China’s total investment in R&D
accounted for 2.18 percent of GDP, equiva-
lent to the average of OECD countries, with
the average R&D intensity of high-tech
enterprises and A-share listed companies
being about 3 percent and 4.87 percent.
Higher R&D investment has increased the
enterprises’ capacity for independent inno-
vation and competition advantage.
In particular, since the 18th National Con-
gress of the Communist Party of China in
November 2012, which formulated the inno-
vation-driven development strategy and five
new development concepts, Chinese enter-
prises have increased R&D investment and
achieved remarkable breakthroughs in core
technologies. In fields as important as avia-
tion, railways and 5G technology, Chinese
enterprises have even taken a leading posi-
tion.LI MIN / CHINA DAILY