China moves to halve state jobs, cut bureaucracy

For years the most secure job in communist China has been that of party or government official

For years the most secure job in communist China has been that of party or government official. With it often went a mobile telephone, frequent banquets, possible kick-backs, and access to a black limousine with tinted windows and special number plates.

But the concept of small government, the core issue of many election campaigns in the US, has at last come to China as it moves from command to market socialism, hastened by the prospect of an Asian-style financial crisis.

Yesterday the Beijing leadership announced a daring plan to close 15 ministries or state bodies, and lay-off half of all government officials by the end of the year.

The boldness of the move is best appreciated when seen in the context of Chinese history. China invented the bureaucracy, along with ministries and elaborate hierarchies, long before the communists came to power in 1949. While European states and the Ottoman empire were struggling in the late Middle Ages to develop government structures, a massive bureaucracy was already in place in China, administering an immense body of statutory laws.

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Attempts to cut the bureaucracy down to size are nothing new. A Beijing opera tells the story of an emperor who tried to reduce the number of mandarins and met a very nasty end.

Mr Zhu Rongji, China's economic czar, is said to have emerged from a performance of the opera looking very sombre indeed. Mr Zhu (69) is expected to be elected Premier by the Congress, replacing Mr Li Peng, with responsibility for restructuring China's state-owned sector, shedding hundreds of thousands of government jobs in the process.

The Chinese President, Mr Jiang Zemin, is also proposing the election of younger cadres to push the reform along, including Mr Hu Jintao (54), a powerful party figure and a fighter against corruption, whom he wants as his vice president.

The 15 ministries to be dissolved are mostly those which had their heyday in the era of communist central planning. They include physical culture, machine building, coal, power, internal trade, chemical industry, metallurgical industry, electronics industry, posts and telecommunications, labour, and mineral resources. Four powerful new bodies will be created to take over some of their functions. There will be a State Commission of Science, Technology and Industry, and Ministries of Information, Labour and Social Security, and Land Resources. The streamlining of government was announced in a white paper presented to the National Congress by the cabinet secretary-general, Mr Luo Gan. "The impact of Asia's financial turmoil has reached the whole world and has posed a severe challenge to our country's economic development," he said. "The malady that sticks out is the lack of separation between government and enterprises." The Finance Minister, Mr Liu Zhongli, hammered home the message in 1998 budget proposals which called for a deficit 17 per cent smaller than last year.

"We must downsize state bodies, shrink payrolls, reduce the number of personnel supported by state coffers and economise on expenditures," Mr Liu told the legislature.

The streamlining will inevitably encounter resistance from cadres in the huge Beijing ministry headquarters and provincial branches who have not made mistakes, the only criterion before now for dismissal. To counter this the government is planning to pay compensation and offer training programmes for laid-off bureau crats.

The white paper does not predict the number of lay-offs but says one half of higher level civil servants must be on their way out by the end of this year. Chinese media reports say four million civil service officials - one half of the total - will be removed over three years.

There are an estimated 33 million officials in government institutions throughout China, including eight million engaged in party or administrative functions.

Mr Hu Jintao is a Standing Committee member of the Political Bureau and former head of the party in Tibet, with responsibility for deciding the fate of officials charged with corruption. He has called on party officials to help to address the problems facing laid-off workers, the retired and the poor, while ruthlessly exposing and criticising misconduct. Mr Jiang is reported to have pressed for Mr Hu's elevation in place of the octogenarian Mr Rong Yiren by explaining to colleagues that while with US and western European leaders, he felt that they were two generations apart, as those countries' leaders were young, energetic and familiar with new knowledge.

Special police units reinforced regular Hong Kong police patrols yesterday after suspected triad-related bomb attacks this week.

The incidents strongly resembled bombings and other violence in the nearby Portuguese-ruled enclave of Macau in the past two years which have been linked to triad turf wars.