China鈥檚 trade groups to get freer rein
Print Edition
CHINA’S trade associations, which traditionally have a close relationship with the government, will be given more independence, but under stricter scrutiny.
According to a plan released by the State Council, all operational, financial and personnel affiliation between the government and trade associations will be severed.
From 2018, the government will stop sponsoring trade associations and instead contract their services as outside agents. Those that are linked to government departments or public institutions will have to separate their staff, work and property, it said.
When the plan is implemented, all trade associations will be considered non-profitable NGOs and subject to related rules.
A pilot project involving 100 associations will start this month, before being extended next year and in 2017, authorities said.
While cutting ties, the government has pledged to tighten external supervision.
The Ministry of Civil Affairs, which will supervise the pilot, said yesterday that senior association officials will be put under strict supervision.
The recruitment of senior officials and their behavior on the job will also be closely watched. All will be subject to auditing upon retirement, and will be held accountable for any wrongdoings during their tenure.
The ministry will record and rate the creditability of associations, with the aim of drawing up a blacklist of those sullied by wrongful practice.
The plan is the latest move by the government to distribute its power and duties, as a way to empower industries to self regulate.
Established organizations will act as a bridge between the market and the government, offering consultation on policies and serving industrial development interests, said Sun Fengyi, a research fellow with the Institute of Economic System and Management under the National Development and Reform Commission.
The organizations will take the reins of responsibility left by the government, as it steps back from direct interference, he said.
Trade organizations in China have notable shortcomings.
Due to their close links with the administration, some are run by retired government officials, who act more like semi-government regulators than organizers and leaders of industry.
Also, some declining associations are overstaffed, while some booming industries do not even have representative groups.
“Only if trade associations walk out of the shadow of the government will they fulfill their duty and improve the market,” said Zhang Zhanbin from the Chinese Academy of Governance.
Trade associations are aware of the urgency and need for change, said a source with the China Iron and Steel Association, who preferred to remain anonymous.
“The reform will force us to improve. We will have to sharpen our understanding of our industries,” he said.
The government also promised to push forward legislation in the area, and a law on trade associations is being drafted.
Liu Junhai, with the School of Law at the Renmin University of China, said the urgent need is to ensure the effective internal management of trade organizations.
“In the worst case scenario, some organizations simply copy the rules of other organizations with no intention of following them,” he said.
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