Saturday, April 11, 2009

China sets up 'super think tank'

One year after leaving the government, Zeng Peiyan, a former Chinese vice premier, was elected chairman of the executive council of the China Center for International Economic Exchanges (CCIEE), a high-level think tank recently established in Beijing.

Tagged "China's top think tank" and a "super think tank," CCIEE has drawn widespread attention at home and abroad. Set up against a backdrop of the worst financial crisis since the Great Depression, it aims to help decision makers chart a course through the increasingly choppy waters of the economy and society, according to a 21st Century Business Herald report. Facing increasingly complex challenges, the nation's top decision makers felt they were not receiving adequate service from their existing support system of think tanks advisors.

The CCIEE has come into the world loaded with high expectations, and many feel it marks the beginning of a major overhaul of China's entire think tank system.

Birth of the 'super think tank'

CCIEE was officially launched on March 20, 2009 at a grand ceremony in Beijing. The think tank undoubtedly has a strong leadership, headed by Zen Peiyan. Other well known figures include the former director of the Central Leading Group on Financial and Economic Affairs, vice director of the National Development and Reform Commission, president of China Development Bank, and the president of China National Petroleum Corporation.

Jiang Yong, a researcher at another think tank, the China Institute of Contemporary International Relations, described CCIEE's leadership team as "broad-based and impressive." And apart from its impressive human resources, CCIEE also has top level backing, having been established on the instructions of Premier Wen Jiabao.

Last November, Wen said that with the world economy changing and becoming more complex, decision making could not be left to the experience and knowledge of a small group of people. A broad range of opinions should be consulted to ensure scientific and democratic decision-making.

Speaking at the CCIEE founding ceremony, Zeng Peiyan said the think tank would "focus on the major and pressing issues concerning the world economy; conduct strategic, macroscopic, forward looking research, and work hard to achieve pertinent, applicable conclusions."

CCIEE's first batch of research projects cover the possibility of a second wave of the financial crisis, the construction of new world financial order, the strategic cooperation between China and the US, the strategic relationship between China and Japan, cooperation between China and Russia on energy and resource development in central Asia, the decision-making systems of foreign governments, and the role of think tanks in formulating government economic policy.

Increasing complexity challenging decision makers

According to Zeng Peiyan, an increasingly complex world is "posing a challenge to all think tanks."

The past decade has been a difficult period for decision makers. Both officials and business leaders have found themselves at a loss in the face of an ever more unstable economic situation and frequent changes in government policy.

Furthermore, inaccurate forecasts have made economists and researchers a standing joke in the country.

At the end of 2007, a renowned economist at the Chinese Academy of Social Sciences predicted inflation would remain stable and not go above 4 percent. Two months later the CPI rocketed to 8.7 percent and by the end of 2008 had plunged to 1.2 percent.

"In addition to their weak academic background, domination by special interest groups also leads Chinese think tanks into errors and misjudgments," said Jiang Yong.

In a special study on "departmental interests", Jiang found that some ministry-sponsored think tanks were essentially working to promote special interests. Researchers tend to bend their academic opinions to comply with the institution's general principles, and sometimes modify their opinions for fear of being criticized by their boss.

Powerful companies are also increasingly sponsoring think tanks. One Beijing think tank was set up with money from coal mine owners in Shanxi Province. Researchers at the think tank were tasked with "tactically expressing opinions that are in the best interests of coal mine owners."

According to Jiang Yong, such practices result in "absolute obedience to sponsors' orders". In his view, think tanks set up on this basis are essentially acting as representatives of special interests groups and failing in their responsibility to offer independent, objective, scientific advice to the government.

"As society changes think tanks will have to reform," said Liu Kegu, former vice governor of China Development Bank and now a CCIEE researcher.

According to Liu, the future trend will be towards high-level, comprehensive think tanks with both government and non-government sponsorship.

The establishment of CCIEE is being widely viewed as step in this direction. "Research on complex economic phenomena like the financial crisis requires interdepartmental, trans-regional, interdisciplinary efforts," said Liu Kegu. CCIEE is composed of researchers from government departments, NGOs, large enterprises, chambers of commerce, banks and other financial institutions, colleges and universities.

Another notable remarkable feature of CCIEE is its reliance on both governmental and non-governmental sources of funding.

After visiting the Brookings Institution, the Rand Corporation and other renowned foreign think tanks, Liu Kegu came to the conclusion that the Chinese advisory system was pressing need of institutions with both governmental and non-governmental support.

"Government think tanks are often hampered by government rules but non-governmental think tanks often do not have a clear understanding of decision makers' needs," Liu pointed out.

High-level think tanks in the US, by comparison, are better at addressing the needs of government and the public. Before entering the White House, both Henry Kissinger and Zbigniew Brzezinski had worked for the Rockefeller Brothers Fund and the Rand Corporation. They both chose to return to think tanks after leaving government. "Think tanks should maintain close contact with the public but also have an intimate knowledge of how government operates. They must have a clear idea of what decision makers want," Liu Kegu said.

In an attempt to integrate the governmental and non-governmental aspects of its work, CCIEE invited Zeng Peiyan and several other retired government officials to sit on its board of directors. On the one hand, being retired, they can listen to public, non-governmental voices. On the other hand, they have easy access to top state leaders and can quickly report public opinion to decision makers.

Apart from government, CCIEE also has managers of large state-owned enterprises as members. This has sparked a heated debate. Some experts say the new think tank will lose its academic independence if it takes money from enterprises.

But funding is a secondary issue according to Liu Kegu. "Every think tank uses multiple channels to raise funds. The majority of its funds may come from society at large while the rest may be given by the government. The most important thing is to avoid having a sole sponsor."

For instance, Rand Corporation, sometimes referred to as the "external head" of the US government, has acquired a reputation for independent thinking despite the fact that 65 percent of its revenue comes from the federal government, while the other 35 percent is provided by state governments, foreign governments, private companies and foundations. Rand acquired a globe reputation because it follows a strict project methodology and remains objective in its work, said Liu.

( by Chen Xia, April 10, 2009)