Thursday, Nov 27, 2014, 11:10 AM CST – China

Politics

Civil Service

Bloated Bureaucracy

Overstaffed government agencies have become a burden on China’s economy, derailing all attempts to make governance more efficient

Applicants prepare to take the civil service examination in Wuhan, Hubei,November 27, 2011 PHOTO BY CFP

"The number of public servants in China has been increasing at a rate of 1 million each year, from 6 million in 2006 to 10 million in 2010,” said Liu Xirong, vice chairman of the Legal Committee of the National People’s Congress (NPC), during an NPC panel discussion in March. “Although the Chinese people are known for being hardworking, they are simply unable to support such an enormous contingent.”

Liu’s remarks were a remarkably bold admission of how bloated China’s vast bureaucracy has become. To limit the damage caused by his inflammatory remarks, the State Administration of the Civil Service (SACS) immediately responded that the number of public servants in 2010 stood at 6.89 million, representing only 0.5 percent of the total population.

Liu refused to back down, claiming that his figure came directly from Zhao Qizheng, the spokesman for the Chinese People’s Political Consultative Conference (CPPCC).

A Game of Numbers

Pundits stepped in to defend Liu’s claims, stating that official figures on the scale of China’s civil service are misleading. Unlike Western countries, which include anyone on the public payroll as a public servant, in China the term refers exclusively to a specific group of government employees, who are officially listed as civil servants, enjoying a wide range of benefits including the virtual guarantee of a job for life as well as privileged access to healthcare and pension provision.

According to Professor Zhou Yongtian from the Central Party School, a huge number of officials and employees of Party organs and government institutions which operate under the guise of social organizations, labor unions, the State media and State-owned enterprises are not recognized as civil servants, despite being on a government payroll. It is estimated that in China around 1.26 million social organizations funded at least partially by the government currently employ more than 30 million people.

There also exist a considerable number of retired government employees living entirely on State pensions rather than on social security funds, who constitute an ever-increasing burden on the public purse.

Currently, no unified data on the scale of China’s bureaucracy exist. The SACS, the Ministry of Human Resources and Social Security and the Ministry of Finance all calculate numbers independently in line with each ministry’s policy priorities.

“To figure out the exact number of government employees is a sheer game of numbers,” Professor Wang Yukai at the China National School of Administration told NewsChina.

However, some old data may shed some light on the true figure. In 2005, Ren Yuling, a consultant for the State Council led a campaign against the overstaffing of government agencies. According to Ren, there were 45.72 million people on the government payroll in 2004, with 5 million more living on various fees and fines they are authorized to collect. In total, these people accounted for about 4 percent of China’s total population. Accommodating recent increases in staffing for certain government agencies, the total number of government employees may be reach 60 million by 2011, according to one estimate.

Fudging

The central government has launched several rounds of institutional reform in recent decades aimed at downsizing overstaffed government agencies. Ironically, these reforms appear to have increased the public payroll.

For example, a major reform in 1982 cut the number of ministries, agencies and administrations under the State Council from 100 to 61. But the number of “cadres” in the State Council system increased from 2.8 million in 1979 to 8 million in 1997. To deal with overstaffing, the then Chinese Premier Zhu Rongji launched a high-profile institutional reform in 1998 aimed explicitly at “cutting down the government’s size and increasing its efficiency,” which further reduced the number of ministries under the State Council to 29.

While the reform claimed to have reduced the number of the central agencies by 50 percent, the total number of “government cadres” showed a steady, and somewhat paradoxical, increase. By 2004, it was estimated that the number of “government cadres” at county level and below alone had hit 13 million.

Immediately following the campaign against government overstaffing in 2005, the National People’s Congress passed the Law on Civil Servants to regulate the size and management of the country’s civil service. However, this law was powerless to regulate the majority of government employees not officially recognized as public servants.

In 2008, yet more institutional reforms were launched to merge various departments into a more compact government structure. Meanwhile, efforts were being made to streamline the government hierarchy from five levels (province-ministry, city, county, township and village) to three levels (province, county and village). The impact of these measures on the scale of the civil service is unknown, as no data have been made public. One direct result, however, was a burgeoning number of deputy posts in many government departments which were compelled to accommodate the deputy leadership of dissolved agencies. 

In Foshan, Guangdong Province, for example, many bureaus have more than 10 deputy directors, and the city’s land resources bureau has 19. This is by no means an isolated case. Tieling, Liaoning Province, has nine deputy mayors and 20 vice secretaries-general. Xinxiang, Henan Province has 11 deputy mayors and 16 vice secretaries-general. Even within the State Council, the newly established Ministry of Human Resources and Social Security has nine vice-ministers.

According to Mao Shoulong, a professor of public administration at Renmin University, the root cause for the explosion of deputy chiefs lies in the country’s unique administrative culture, which fails to accommodate an “exit strategy” for officials of a certain rank.

“Once a government employee becomes an official, they will remain an official forever,” Mao told our reporter. “Worse still, the reality is that officials can only take higher posts, never lower posts.”

Therefore, when an agency is abolished or merged into other government body, the total number of officials remains much the same, as many of them are simply transferred to the new agency, regardless of how many others hold the same post. In many cases, new social organizations on the government payroll are created simply to accommodate former government employees of newly-defunct bureaus.

Such a system effectively blocks any attempt to streamline it, further bloating government and undermining its efficiency as new civil servants are presented with their “iron rice bowls” each year.

Vested Interests

According to Professor Wang Yukai, with both the power to establish new bodies and to hire and fire any and all State employees, the government has a vested interest in maintaining the status quo. “Personnel management is entirely in the hands of the executive, and is undertaken in an ad hoc fashion, with no national legislature regulating the field.”

Wang told NewsChina that fellow researchers and specialists have repeatedly urged the drafting of a law to curb this trend, but theirpleas have fallen on deaf ears.

“The government’s answer is that it is still premature to make current institutional arrangements into law, as China is in the process of constant reform, with institutional structures yet to be finalized,” he said.

As China’s legislature lacks any official powers over government personnel and budget, change can only come from the government itself.

In the meantime, a draft plan of yet another reform to the composition of ministries under the State Council, expected to be launched after China’s new leadership is unveiled in the fall, is circulating online.

According to the unconfirmed draft, China’s 29 current ministries will be reduced to 17. Observers believe that the reform ostensibly aims to streamline overlapping government agencies to boost the functions of government. Even China’s top leadership is increasingly aware that the excessive number of government agencies has long impacted negatively on the country’s mounting rate of inflation, and prevents the development of a strong consumer society, which has become an acute problem given slowing economic growth.

On April 16, the State Council released guidelines on reforming social organizations over the next five years. Through streamlining disparate organizations according to their functions, the reform is intended to reduce the overall scale of government-based social organizations. Some social organizations with administrative responsibilities will be turned into fully-fledged government agencies, while those operating under a more business-oriented model will be removed from the public payroll, freeing up resources for those organizations that directly provide public services.

In addition, the guidelines pledged that “No more social organizations that do not provide public services will be allowed to be set up.”

None of these reforms, however, has addressed the issue of transparency in China’s bureaucracy, or called for greater supervision. For Liu Xirong, the vice chairman of the NPC’s legal committee, only a new, enforceable law slapping strict staffing restrictions on China’s immense civil service can avert a similar fudging of reform in the sector as has happened in the past.

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