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China promotes foreign aid, bolsters environment ministry in government shake-up

China will bolster the power of its environmental ministry and establish a new agency to better coordinate its foreign aid program, as part of one of the biggest shake-ups of the structure of its government in decades.

The changes cut the number of ministries in China’s cabinet, the State Council, by eight to 26, in a move designed partly to streamline government and reduce bureaucratic infighting, but mostly to strengthen the Communist Party’s top-down control, one of President Xi Jinping’s overriding goals, officials said.

The overhaul also included a decision to merge the banking and insurance regulatory agencies to improve supervision of the country’s debt-laden financial sector, according to proposals released Tuesday.

The changes will be formally approved Saturday by the National People’s Congress, the country’s rubber-stamp parliament. 

Liu He, the president’s top economic adviser and a member of the party’s 25-member Politburo, called the changes “profound” in an article for People’s Daily, the Communist Party mouthpiece, published Tuesday.

“Strengthening the party’s overall leadership is the core issue,” he wrote, citing a quote from Mao Zedong that is also used by Xi. “Party and government, the military, civilian life and learning — east, west, south and north, the party leads them all.”

The changes appear to weaken the country’s top economic policy-making body, the National Reform and Development Commission (NDRC), sometimes dubbed the little State Council because of its power within the bureaucracy and wide range of responsibilities.

The Ministry of Environmental Protection has been renamed the Ecological Environment Ministry and it will take over responsibility for climate change policy from the NDRC. The new ministry will also supervise the work of other ministries to prevent groundwater pollution, including pollution from agriculture and sewage, as well as marine environmental protection and nuclear radiation safety.

Li Shuo, a senior climate policy expert at Greenpeace East Asia, called the changes a “net positive” for the environment, but warned that moving the climate change policy away from the powerful NDRC into the historically weaker environmental ministry, could be a double-edged sword.

“Climate change was the poster child of China’s environmental transition,” he said. “A large part of that was due to the fact that the climate agenda had the blessing of the NDRC. Now it is like a pretty bride marrying into a poorer family.”

A new national agency for international development and coordination has also been established, in a move that reflects China’s ambitions to more effectively project its power and influence on the world stage.

The new agency will integrate responsibilities currently undertaken by the Ministries of Commerce and Foreign Affairs, and integrate its work with Xi’s ambitious Belt and Road project, a major effort to increase Chinese lending for infrastructure development around the world.

The new agency will draft foreign aid policies, grant aid and supervise projects.

The move is designed “to give full play to foreign aid as a key means of major-country diplomacy,” enhance its coordination and “better serve the nation’s diplomatic strategy” and the Belt and Road project, the proposals said.

China provides few details of its aid program, but said it sent more than half of its foreign aid of more than $14 billion between 2010 and 2012 to Africa.

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