In March 2023, the Central Committee of the Chinese Communist Party and the State Council of the People’s Republic of China jointly issued the “Reform Measures of the Party and State Organizations.” Among the initiatives to be taken was the establishment of the Central Science and Technology Commission (CSTC). The new commission would take over the strategic planning and policy setting for China’s science and technology development from the Ministry of Science and Technology, which will be relegated to handling administration duties for the Commission. That stated reason for the change was to “unify leadership” in order to “advance the establishment of national innovation system and technology structural reforms.”
On August 21, state media reported the first meeting of the CSTC had been held more than a month prior, on July 10.
The CSTC is clearly central to the Xi Jinping administration’s focus on building China’s self-reliant technology ecosystem, one that Xi hopes would be the most advanced in the world. While China’s government has long aimed at achieving global leadership in science and technology excellence, autonomous innovation and self-dependency, results have been mixed. Now with the U.S.-led targeted sanctions against China’s semiconductor, generative artificial intelligence, and other critical and emerging sectors – including the most recent White House executive order, proposing to ban U.S. investment in China on “national security technologies” – China’s leaders must be far from satisfied with its current performance. Increasing frustration could be one reason for setting up a new body to handle science and technology policy.
The CSTC will dedicate much of its reform efforts to China’s research and development infrastructure, as the country has not been able to reap proportional results in industrial success from its statistical achievements in matters such as patent filings and scientific journal publications. Also, in spite of its ability to attract leading overseas Chinese researchers to return to their homeland to contribute, conversion of research results to markets is alarmingly low, with high levels of wasted resources and under-production, found even by some of the country’s own audits. But problems also exist on the industry side, where top state-owned semiconductor investment fund executives had been arrested in crackdowns since last year.
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The setting up of the new commission also follows a formula often used by Xi to emphasize political leadership over administrative systems. Xi insists on a “working style” for officials that encompasses “enhanced political theory learning,” taking an “elevated political standpoint” in all their endeavors. By superseding the Ministry of Science and Technology, the CSTC is also consistent with the trend under Xi’s China that prioritizes party function over governmental ministries’ power, and political motivation over administrative considerations. Most of all, this makes it easier for Xi to centralize his control through an opaque party apparatus and enables him to make rapid policy adjustments – which he must believe to be of critical importance as he tries to face mounting challenges from all directions, domestic and foreign.
It may be useful for observers to compare the new Central Science and Technology Commission with the Cyberspace Administration of China (CAC), another high-profile administrative institution under the Chinese Communist Party. The CAC, set up in 2014, has evolved over the last nine years into what is known today as the “super-regulator” of all of China’s broadly-defined “cyber” related policies. The body has gradually gained regulatory and statutory law-enforcing authority through powerful legislations such as the Cybersecurity Law, Data Security Law, and Personal Information Protection Law.
The CAC gained global notoriety for ruthlessly driving China’s massive and ongoing tech crackdown since July 2021, when Didi Global’s New York initial public offering was derailed. Since then, whether for national security or child protection reasons, China’s major digital platforms – from social media to online education, digital finance to online games, as well as emerging fields such as artificial intelligence – were all effectively put under the close, direct control of the CAC.
It is highly probable that the new CSTC will follow the CAC’s precedent and be transformed over the coming years into a super-agency with power across a variety of science and technology research and industry functions, from lab to market, from classroom to the trading floor. We can expect the CSTC to eventually cover rule-making in areas such as education, intellectual property, government investment fund operations, industry adoption of research results, and even countermeasures against foreign sanctions, all in the name of “national security.”
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While its success in terms of outcomes is still unsure, some things are certain. For one, the CSTC will operate in an extremely opaque manner. Second, it will still face huge challenges in countering the U.S.-led containment measures, as there are only limited meaningful retaliatory measures that can be taken, given China’s relatively passive positions in global competition in most advanced technology areas. And if the CAC’s example is any indication, the Central Science and Technology Commission will promptly seek to enlarge its influence through administrative actions and legislation to exert full and direct control over research and industrial development of critical science and technology sectors.
Finally, we can expect that the Commission will not be the last effort by Xi’s China to put party rule above government administration. Indeed, also announced in the same “Reform Measures of the Party and State Organizations” document of March were the establishment of the Central Finance Commission and the Hong Kong and Macau Work Office, and the re-establishment of the Central Finance Work Commission – all likewise in centralizing administrative power directly under Xi’s party control. Xi continues to blur and erase any remaining lines separating the party and the state, in his third term of rule.
Although many may think that for a one-party dictatorship like China, administrative demarcation between the party and the state may have little significance, the continuing downgrading of the state bureaucracy does matter. As the CCP gains even more direct administrative power, there will be even fewer means for anyone in China, as well as any foreign players in China or in global markets, to seek public accountability or administrative remedies for any of the Chinese party-state’s decisions.
