Reform agenda puts China’s economic super agency under scrutiny
Behind China’s two investigations into irregular pricing of infant formula and pharmaceuticals announced this month is one powerful institution and its struggle for relevance as Beijing attempts a transition to a more consumption-led economy.
Behind China’s two investigations into irregular pricing of infant formula and pharmaceuticals announced this month is one powerful institution and its struggle for relevance as Beijing attempts a transition to a more consumption-led economy.
The investigations have entangled big foreign companies including Danone, Nestle and GlaxoSmithKline. But some analysts say there may be something deeper at work - jockeying over the direction of policy in the world’s second largest economy in the years ahead.
The NDRC trumpets how big reductions will be, but when it comes down to it, prices only fall a bit. The NDRC’s main consideration is public relations
The National Development and Reform Commission (NDRC), Beijing’s economic superagency, sets policy for strategic industries, approves big investments, mergers and acquisitions, and has the authority to influence prices for everything from liquor to petrol.
Its powers are so sweeping that it is often called the “little State Council”.
But in recent months, as President Xi Jinping and Premier Li Keqiang have begun an attempt to steer China’s economy away from its reliance on state-led investment towards a more consumer-focused model, academics and even senior officials have begun to publicly cast doubt on the NDRC’s role.
While the NDRC has always had a price-setting role, its decision to launch high profile predatory pricing probes into infant formula and drugs now could be a bid by the commission to prove its usefulness as a regulator.