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- The ruling Chinese Communist Party is setting up a commission to oversee finance and technology, state media said Thursday.
- The change comes because Chinese President Xi Jinping believes unity under the party is essential to building the country.
- Beijing has yet to announce who will head the new party committee.
People visit the Museum of the Communist Party of China in Beijing on March 3, 2023, and pose with the flag of the Communist Party of China before the annual meeting of the National People’s Congress on March 5.
Greg Baker | Afp | Getty Images
BEIJING — The ruling Chinese Communist Party is setting up a commission to oversee finance and technology, state media said Thursday.
The change comes because Chinese President Xi Jinping believes unity under the party is essential to building the country. This contrasts with the tendency of Chinese leaders to delegate more power to governments and ministries over the past few decades.
State media said Thursday in Chinese that a new “Central Monetary Commission” would be set up to strengthen “centralized and unified leadership over financial operations,” according to a translation by CNBC. The commission is responsible for high-level planning in financial stability and development, the report said.
The Chinese government’s annual legislative session this month highlighted that addressing financial risks is a priority for policymakers this year.
The secretariat of the new commission will take over the responsibilities of the State Council’s Financial Stability and Development Commission, the report said.
Alongside the secretariat, a “Central Financial Working Commission” will be set up to focus on ideological and party-related work in the financial industry, according to state media.
Although state media did not disclose, a financial working committee of the same name was established in the aftermath of the 1998 Asian financial crisis. The commission was disbanded after about five years, and in 2003 the now-defunct Chinese banking regulator was established.
It is unclear how the Commission’s future work will compare to history.
In the late 1990s and early 2000s, the Central Monetary Working Commission helped make financial regulation and supervision more streamlined, minimizing the influence of powerful interest groups on regulators, said the China Political Economy at the University of Trier. said Sebastian Heilmann, Professor of Science. on paper. After that, he became the first director of the Mercator Institute for China.
“However, party-dominated hierarchical systems have failed to introduce market-based incentive structures for financial executives and have failed to curb fiscal mismanagement and corruption,” Heilmann wrote in 2004. . Foreign investors are becoming more active. ”
Thursday’s announcement included previously announced details of plans to reorganize China’s top executive body, the State Council, with the establishment of the Central Science and Technology Commission.
Responsibility for that party committee falls to the reorganized Ministry of Science and Technology.
A change in the State Council created the State Financial Supervisory Administration, which oversees most financial industries except the securities industry. It also changed the name of the China Securities Regulatory Commission within the State Council from something akin to the Commission’s Development Research Center to Customs.
Beijing has yet to announce who will head the financial administration or the new party committee.
The changes announced Thursday are expected to take effect at the national level by the end of the year.
Other new commissions include a group that oversees the party’s work in trade associations and Hong Kong and Macau affairs, state media said. Under the “one country, two systems” policy, Beijing has strengthened its control over areas that enjoy freedoms not found on the mainland.
China’s president and party general secretary, Mr. Xi, is consolidating power and increasing the party’s presence in the economy, including in non-state-owned enterprises.
The new committee is part of the party’s Central Committee, which has about 200 members. From these members comes the core leadership – the Politburo and its Standing Committees.
Membership changes are made every five years at party conventions, with the most recent one being held in October. At that convention, Xi packed the party leadership with supporters, paving the way for an unprecedented third term as president.
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