Li Keqiang and simplifying governance

Premier Li Keqiang is looking to simplify China’s governance, in a bid to bring the economy in line with the market and emphasize fairness. [photo / Xinhua]

During the past year, we have witnessed a premier who always maintained a low profile and who wants to simplify the government, by removing unnecessary branches.

As one of the men in charge of running China, Li Keqiang is gradually allowing more things to be decided by the market. His proposals and ideas are mostly consistent with the basic principles of economics. This has made him appear unspectacular to some observers.

Simplifying governance is an undertaking feasible only to the low-profile few such as Premier Li, because every cut will mean the loss of some approval authorities, along with the benefits that tag along. But these cuts will also mean that new companies are created, small enterprises that grow quickly, and creativity and employment will be given a boost.

The premier, who is resolute about stripping down government powers, despite pressure from a slowing growth rate and the false prosperity that comes from outdated industrial capacity, is driving forward the structural transformation of China’s economy, before it is too late.

Like Steve Jobs, Apple's founder who developed simple and elegant products, Premier Li has shown his dislike of pointless redundancy, and has made “trimming the fat” a major task in his work, starting from government organs.

It is the first time that a Chinese premier has explicitly stated in the Government Work Report that economic growth should be based on the market.

On March 19, Premier Li presided over a State Council executive meeting, during which he stressed: "We must fully rely on the market to stimulate the creative potential of society." The news was directly reported by Gov.cn, the portal of the Chinese government, instead of via the People's Daily or Xinhua News Agency, a direct message to mean the government is now showing its determination.

Li Keqiang has painted a clear picture about how his simplification of governance should be carried out:

"Last year, amid the downward pressure in the economy, reform has been a major driving force, which has helped us to achieve all of our economic targets. Decentralization, as in the first part of the reform, will see more than 200 administrative approvals either go to lower authorities or be cancelled once for all."

Premier Li's plan achieved some initial successes last year. After loosening some approval restrictions, the number of new company registrations increased by 27.6 percent, of which registrations in the private sector rose by 30 percent.

All reforms intending to decentralize powers have been accompanied by internal misunderstandings and pains. Li also gave a warning, by saying: "I hope you will refrain from clinging to the little power in your hands that prevents the government's big undertakings. That will do more harm than good."

But, for a government huge enough to directly feed at least 7.08 million employees, and another 53 million who are actually on its payroll, every cut will cause pain and deprive someone of approval powers.