New industry ministry comes up short: analysts

PUBLISHED : Sunday, 16 March, 2008, 12:00am
UPDATED : Sunday, 16 March, 2008, 12:00am
 

Analysts say the establishment of the Ministry of Industry and Information will help the world's fourth-largest economy respond more rapidly to the shifting demands of the domestic and overseas markets.

But they also say the ministerial revamp has failed to tackle the long-standing need to restructure the telecommunications and information sector, because the new agency will not have the power to regulate the electronic media. The State Administration of Radio, Film and Television (Sarft), which oversees the mainland's media, was not included in the restructuring.

The new super ministry includes functions previously held by the National Development and Reform Commission, the Commission of Science Technology and Industry for National Defence, the Ministry of Information Industry and the State Council Informatisation Office. The Ministry of Information Industry, set up in the last government reform in 1998, has been abolished.

The new ministry will also plan and oversee the development of important sectors including most traditional industries, such as the chemical, machinery, iron and steel and non-ferrous metals industries.

Wang Xudong , the man who headed the Ministry of Information Industry, said the revamp could streamline the supervisory system and reduce the duplication of duties.

'It would also facilitate macro-management,' he said on the sidelines of the annual National People's Congress meeting last week.

China Enterprise Management Science Foundation vice-president Pan Chenglie , from Tsinghua University, said a key factor driving the urge to merge was a growing sense that information should take the lead in the development of most industries.

'The setting up of the Ministry of Industry and Information will help China's manufacturing industries to respond to fast-changing market demands, both domestically and globally,' Professor Pan said. 'It also suggests that the government has come to realise that there will be no upgrading of China's manufacturing industries, the largest in the world, without the development of up-to-date information technology.'

Yang Peifang , the secretary-general of a committee of telecom economics experts under the former Ministry of Information Industry, said the new arrangements reflected 'the government's emphasis on industrial production'.

He questioned the new ministry's role in restructuring telecoms, saying, 'it overlooked how to co-ordinate and regulate the telecommunications operators'.

Zeng Huiming , the president of Broadcasting, Television and Information magazine, said the restructuring would make it 'more difficult for the government to promote the integration of internet, telecommunications and television broadcasting'.

He said the long-anticipated telecoms restructuring hinged on the reshuffle of central agencies. The central government plans to merge the six state-owned telecoms operators - directly under the State-owned Assets Supervision and Administration Commission - to create three full-service operators providing wireless and fixed-line services.

'This will involve conflicts of interest between the two central ministries over the management and regulation of the industry,' Mr Zeng said.

Many industrial analysts hoped the new ministry would also include Sarft, to cover the electronic media, because many fixed-line, internet and mobile-phone operators would also be involved in those businesses.

Xiong Wenzhao , a professor of public administration with the Central University of Nationalities, said the restructuring was the result of political compromise among bureaucrats from various departments rather than a scientific plan.

'The failure to include the electronic media under the jurisdiction of the Ministry of Industry and Information reflects the State Council's compromise to the party's propaganda machines,' Professor Xiong said, pointing out that the media were traditionally part of the Communist Party's domain rather than the government's.

'It is more of a political and ideological consideration than an economic one.'

Wang Yukai , of the National School of Administration's public administration department, warned that the reform would meet opposition and resistance from vested interests.

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