China is restructuring key government agencies to outcompete rivals in tech

Chinese State Councilor and Secretary-General of the State Council Xiao Jie bows to delegates before delivering a speech during the second plenary session of the National People's Congress at the Great Hall of the People in Beijing on Tuesday.

TAIPEI, Taiwan — China is proposing to vastly restructure its science, technology and finance regulators as part of an ambitious, ongoing effort to outcompete geopolitical rivals while also tamping down risk at home.

The reorganization attempts to modernize the Science and Technology Ministry and will create a new, consolidated financial regulator as well as a data regulator.

The changes were proposed by the State Council, akin to China's cabinet, during annual legislative and political meetings where Chinese leader Xi Jinping is also expected to formally confirm his third term as president.

Much of the annual meetings this year — called the Two Sessions in China — has been aimed at boosting the country's self-reliance in key industry and technology areas, especially in semiconductors, after the United States imposed harsh export sanctions on key chip components and software on China.

"Western countries led by the U.S. have implemented comprehensive containment, encirclement and suppression against us, bringing unprecedented severe challenges to our country's development," Xi was quoted as saying this week, in a rare and direct rebuke by name of the U.S.

Broadly, the Science and Technology Ministry will be reconstituted so as to align with state priorities in innovation, investing in basic research and translating those gains into practical applications, though the State Council document laying out these proposed changes had few details about implementation. The proposal also urges China to improve its patents and intellectual property system.