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TAIPEI, Taiwan — China has proposed a major restructuring of its science, technology and financial regulators, part of an ongoing effort to defeat geopolitical rivals and reduce risk at home.
The reorganization will attempt to modernize the Ministry of Science and Technology and create a new, strengthened financial regulator as well as an information regulator.
The changes were tabled in the State Council, similar to China’s cabinet, at annual legislative and political meetings where Chinese leader Xi Jinping is expected to officially confirm his third term as president.
After the United States imposed tough export sanctions on key chip components and software, most of the annual meetings this year – known as the Two Sessions in China – are aimed at boosting the country’s confidence in key industrial and technology sectors, particularly semiconductors. On China.
“Western countries led by the US have implemented comprehensive control, encirclement and suppression, bringing unprecedented and severe challenges to our country’s development,” Xi said this week in a rare and direct rebuke of the US.
In general, the Ministry of Science and Technology will be re-established to align with state priorities in innovation, investing in basic research and translating findings into practical application, although the State Council document has few details on the implementation of these proposed changes. The proposal urges China to reform its patent and intellectual property system.
Released by the state assembly on Tuesday, the changes still need to be formally approved by the National People’s Congress on Friday, although representatives of the legislature have not voted much against it.
China in 2010
The country has established a National Information Bureau to specifically address data privacy and data storage issues, a responsibility previously held by China’s Cyberspace Administration (CAC). “A new entity that oversees data makes perfect sense,” said Kendra Schaefer, a partner at Beijing-based Trivium China Consulting. “[CAC] It is not designed or equipped to manage data security, particularly cross-border data security.
Among the proposed reforms are the consolidation of the current banking and insurance regulators into one entity, the expansion of the number of regional branches under the central bank and the strengthening of the securities regulator.
Under Xi, China has strengthened regulatory oversight of banking and consumer finance. Financial regulators are investigating financial technology firm Ant Financial for violating banking standards by canceling its initial public offering. Regulators have also cut off loans to heavily indebted property companies, sending property prices plummeting and sales plummeting. After three years of costly Covid-19 controls, China is also struggling to control the ballooning local government debt.
Xiao Jie, Secretary General of the State Council, said in a statement about the financial reform proposals that “it is prepared to resolve long-standing contradictions and problems in financial matters.”
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