Wu Guangqiang

    ON April 16, the Central Government issued a road map for reforming public institutions in a bid to make the government slimmer and more efficient and to make society fairer and more robust.

    The term “public institutions” may sound mysterious and confusing to many. By definition, public institutions refer to units set up and run by the State authority or other organizations utilizing State funds. These organizations engage in a wide range of activities such as education, science and technology, culture, health and social services. They are supposed to be nonprofit, depending on fiscal appropriation.

    The main problem facing public institutions is that on the one hand, the government is busy doing much of what should be done by the market and on the other hand, it is not doing well what are its obligatory functions.

    Take a look at the status quo of the public institutions. Nationwide, there are some 1.28 million public institutions with nearly 40 million employees (about the population of Spain or Poland) who enjoy an “iron rice bowl” (meaning lifelong employment and attractive income). Coveting an easy life in the institutions, millions of people try their best to grab a place there, hence enlarging the legion of idle workers. Almost every unit is overstaffed and inefficient. Meanwhile public administrative expenses have been spiraling up, with an annual increase of 100 billion yuan (US$15.8 billion). Currently the total expenditure has reached 900 billion yuan, of which expenses on official vehicles (as many as 2 million units) alone exceed 200 billion yuan.

    Even for ordinary Chinese, it’s difficult to tell a civil servant from a worker at a public institution. Essentially, public institutions include occupations such as teachers, doctors and nurses, athletes, editors of magazines and newspapers, researchers at scientific institutes, and workers at public utility administrative agencies, legal service offices and notary offices. The list is very long.

    Among these institutions, some like hospitals and schools perform indispensable functions, thus need public funds. Yet there are some private schools and hospitals, though relatively few. To encourage competition and boost efficiency, more incentives should be given to set up more private hospitals and schools.

    Most other functions are supposed to be carried out by the market or by nonprofit social organizations. For instance, a scientific institution should manage to survive and grow by plunging itself into the surges of the market. Similarly, most newspapers and magazines should be responsible for their own survival. It’s also absurd to keep an army of athletes at the expense of huge public funds simply to win gold medals. Behind the large crowd of athletes is an equally large crowd of sports officials.

    What sickens the public is the fact that many of these nonprofit organizations have taken more than their fair share of money. With their administrative power, they pocket easy money with little effort. In January 2011, an online post disclosed a payroll sheet that showed the average income of staff at the Shenzhen Residential Leasing Management and Service Center, a public institution, was about 300,000 yuan (US$45,140) a year, or 23,469 yuan a month. The highest annual salary ran to 680,000 yuan. The post caused quite a stir nationwide as evidence of social injustice.

    In many cases, such an institution serves as a means by some officials to seek financial benefits as well as a tool for corruption.

    The reform brooks no more delay, but cautious plans and elaborate measures are the key to success. The reform involves the interests of tens of millions of people, none of whom deserve to be victims. The “iron rice bowl” must be smashed, but the reform should not lead to them losing their jobs.

    China has seen some encouraging progress in the reform. In the past nine years, thousands of public institutions, mostly publishing houses and cultural institutions, have become self-sufficient, subject to market forces.

    The reform may take many years, but China will be a more vibrant society when the day comes of “the government doing the government’s work” and “the market doing the market’s work.”

    (The author is an English tutor and a freelance writer. He can be reached at jw368@163.com.)