China to streamline public service system

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Last updated at: (Beijing Time) Wednesday, March 24, 2004

China to streamline public service system

The central government is considering an overhaul of its public service agencies, a move that may affect tens of millions of employees on the pay roll of the government.

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The central government is considering an overhaul of its public service agencies, a move that may affect tens of millions of employees on the pay roll of the government.

Li Shenglin, vice minister in charge of the State Development and Reform Commission (SDRC), told an international forum here Tuesday that the reform of public service units (PSUs) is yet another major task that China will face following the reform of state-owned enterprises and a streamline of governmental departments.

The central government has given full support to study and preparation for the reform of public service units, Li said at the International Seminar on International Experience with Public Service Reform and China's PSU Reform.

China's public service units are mainly responsible for the provision of such public services as education, medical care, research and development, cultural activities, entertainment and sports. The PSUs are a major source of jobs and share a major part of the social service functions of the government and enterprises.

Official statistics show that China now has more than 1.3 million public service units, employing over 29 million staff members and managing nearly 300 billion yuan (36 billion US dollars) worth of state-owned assets. Over 70 percent of scientific research personnel and over 95 percent of teachers and doctors work for various PSUs. The government spent more than 30 percent of its budget on this sector.

However, Li said the PSUs developed under the planned economy system no longer fit into the growing market economy due to heavy overstaffing and inefficiency. Since a lot of PSUs exert the authority of government, they mix government jurisdictions and thus incur poor administration, low efficiency and bloated budget expenditures.

Li said various PSUs belong to different governmental departments, thus exacerbating government monopolies in certain public service sectors and leading to market partition and waste of resources.

The aim of the reform is to develop a streamlined, highly efficient public service system that fits into the market economy, Li said.

Local expert Fan Henshan said the country should reduce the total number of PSUs. He said the country should adopt a new governance system and introduce a competitive employment system into the PSUs.

Fan said the reform of PSUs is a complicated work of high risks and cannot be completed overnight. He said the reform should proceed with other complementary reform measures such as social security.

The two-day seminar is jointly sponsored by the SDRC, OECD and World Bank.

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