Name Lu Fuyuan
Born 1946 in Heilongjiang
Education BSc in Physics from Jilin University
Career 1972-81 employee at Changchun Motors; 1981-83 visiting scholar at University of Montreal; 1985-90 high-level engineer and manager at Changchun Motors; 1994-98 vice minister of the Ministry of Machinery and Industry; 1998-2002 vice minister of the Ministry of Education; 2002 vice minister of Moftec.
Strengths While Lu emerged from China's bureaucracy, he is considered to be more intellectual than most high-ranking government officials. His background as an engineer gives him the technical tools to manage, and his long periods at the ministries of education and foreign trade have helped him to develop his leadership skills.
Among the numerous and far-reaching reforms announced at the 10th National People's Congress, the creation of the Ministry of Commerce was perhaps one of the most logical decisions. After
China's accession to the WTO and the increasing pressure for faster decision-making and more transparent policy, the separation of domestic and foreign economic regulatory functions in the State Economic and Trade Commission (SETC) and Ministry of Foreign Trade and Economic Co-operation (Moftec) have become a burdensome legacy from the planned economy era.
The system of separating domestic and foreign economic policymaking functions originated in 1952 with the dissolution of the Central Trade Ministry, and the joint establishment of the Foreign Trade Ministry and Commerce Ministry in an attempt to better deal with the burgeoning trade with the USSR and eastern Europe. After another round of ministerial reshufflings in 1982, Moftec was established in 1993. With the increasing need for regulatory uniformity and greater co-operation in policy promulgation in the post-WTO era,however, domestic and economic policy was once again united under one ministry's control.
The Commerce Ministry will be responsible for both domestic and foreign activities, including the setting of economic goals and the regulation of monopolies and unfair selling practices. It will also encourage qualified domestic firms to invest abroad, foreign firms to invest in China and regional economic co-operation generally.
While the merger of the SETC and Moftec was a needed step on China's road to a market economy, the new ministry still faces pressing economic challenges. Serious inefficiencies and abuses remain in the domestic market, as well as in some of the promises made to open up domestic competition in the automobile and financial services industries.Whether the new Commerce Ministry will be able to competently regulate and solve these questions will probably depend on the determination of the newly elected leaders to tackle these problems.
The newly appointed Minister of Commerce, Lu Fuyuan, is a technocrat like many other fourth-generation leaders. While Lu's industrial background is conducive to understanding the complexities of the new ministry, his mandate is not clearly laid out.
Written by China Concept's Noah Friedman, financial services specialist, senior consultant, and Erik Tollefson, government affairs specialist, senior consultant. China Concept is an international consulting firm that helps global businesses analyse China's market. www.chinaconcept.com