As a pilot program for the classification reform of public institutions in Anhui Province, Anhui’s geological exploration units have entered the final year of their three-year transition period. Recently, the Department of Geological Exploration of the Ministry of Natural Resources, together with the China Institute of Land and Resource Economics, made a special trip to Anhui Province to conduct an in-depth study on the reform and development of the geological exploration sector. They held symposiums and exchanges successively with the Anhui Provincial Department of Natural Resources, the Bureau of Geology and Mineral Resources, the Coalfield Bureau, the East China Metallurgical Geological Exploration Bureau, and their affiliated units. During these meetings, they gained a detailed understanding of the progress of the classification reform of geological exploration units under a series of specific supporting policies, and engaged in thorough discussions on various issues related to the reform and development of the geological exploration sector. The team directly addressed the challenges and uncertainties faced by geological exploration units in Anhui Province—and indeed, across the country—during the classification reform process.

　　The classification and delineation of the organs and affiliated units of the “Three Major Bureaus” have been completed, and implementation guidelines and supporting measures for the reform have been successively introduced.

　　As China’s economy enters a “new normal,” geological exploration units in Anhui Province have also entered a stage of “four overlapping phases”: industrial economic transformation and upgrading, profound adjustments in mining development, a shift from rapid to slower-paced mineral exploration, and the continued advancement of categorized reform.

　　Anhui Province’s state-owned geological exploration teams primarily include the Bureau of Geology and Mineral Resources, the Coalfield Bureau, and the East China Metallurgical Geological Exploration Bureau—collectively referred to as the “Three Bureaus”—which are directly under the provincial government, as well as the General Institute of Chemical Geological Exploration, managed by the Department of Natural Resources and Land.

　　In March 2011, the State Council issued the "Guiding Opinions on Promoting the Reform of Public Institutions by Category," marking the official launch of the nationwide reform of public institutions based on categorization. In 2013, the People's Government of Anhui Province issued the "Implementation Opinions on Promoting the Reform of Public Institutions by Category." In 2014, the Organization and Establishment Office of Anhui Province separately issued documents to classify the "Three Major Bureaus" and their affiliated public institutions and adjust their organizational structures and staffing levels.

　　From a classification perspective, the headquarters of the “Three Major Bureaus” and their specialized geological survey teams are largely categorized as first-class public welfare institutions, totaling 16 in number; whereas the comprehensive geological survey teams affiliated with the bureaus and the educational institutions under their jurisdiction are mostly classified as second-class public welfare institutions, totaling 24 in number.

　　Building on the clear classification of public institutions, in 2014, the General Office of the Anhui Provincial Government issued the "Implementation Opinions on Promoting the Standardized Management and Deepening Reform of Geological Exploration Units Based on Classification." In 2016, the Department of Finance of Anhui Province successively issued documents such as the "Notice on Fiscal Subsidy Policies Following the Categorization Reform of Provincial Public Institutions" and the "Notice on Further Strengthening Financial and State-Owned Asset Management of Geological Exploration Units." Judging from this series of supporting policies, the main measures adopted by Anhui Province after the categorization reform of the geological exploration sector fall into five key areas:

　　First is the categorized personnel management system. Geological exploration units implement total staffing control, reducing staff numbers but not increasing them. Public-interest Class I geological exploration units establish positions within their approved staffing levels; existing vacant positions are primarily used to attract high-level, urgently needed talent for units engaged in fundamental and strategic geological exploration tasks. Public-interest Class II geological exploration units establish positions within their filed staffing levels and are granted flexible personnel management authority.

　　Second, there is a differentiated fiscal subsidy policy. For Class-I public-interest geological exploration units, corresponding financial resources are provided based on their normal operational needs. Both active-duty and retired personnel receive subsidies according to the approved standard, averaging around 90,000 yuan per person. For Class-II public-interest geological exploration units, funds for institutional development are allocated based on the actual number of staff within the established staffing levels, at a standard of 45,000 yuan per person per year, provided in the form of project-based expenditures and supported through government procurement of services. Starting from 2018, these units have been subsidized in accordance with the relevant policies applicable to Class-II public-interest institutions.

　　Third, clarify the rules governing foreign investment activities. Public-interest Category I institutions are strictly prohibited from establishing new foreign investments or directly engaging in specific production and business operations. For Public-interest Category II institutions, any foreign investment must undergo feasibility studies and collective decision-making, be reviewed by the competent authorities, and obtain approval from the Provincial Department of Finance. Major investments must also be submitted to the Provincial Government for approval. In principle, cross-industry investments are not permitted. Geological exploration institutions are strictly prohibited from initiating new real estate projects and must gradually reduce and divest non-core businesses such as real estate that are unrelated to their primary operations.

　　Fourth, we will comprehensively promote the separation of government functions from enterprise operations. On the basis of a thorough inventory and verification of assets and clear delineation of property rights, geological exploration units and their affiliated enterprises will achieve complete separation in terms of personnel management, financial management, and asset management. Enterprises established by Class-I public-service geological exploration units will gradually disengage from their sponsoring entities through methods such as transfer, sale, or restructuring. Staff members of geological exploration units are prohibited from holding concurrent positions and receiving remuneration from their affiliated enterprises.

　　Fifth, there should be separate revenue and expenditure lines. Any revenue generated from state-owned assets legally obtained by geological exploration units must be incorporated into the departmental budget. In principle, Class-II public-interest geological exploration units are prohibited from making cross-industry investments and must strictly control investments outside their core business areas. For investment returns from mining rights acquired through cooperative arrangements by Class-II public-interest geological exploration units, the post-tax income must be promptly and fully remitted to a special provincial fiscal account, and managed under the “separate revenue and expenditure lines” system.

　　With reduced investment, mismatched “powers and responsibilities,” and insufficient involvement in extended industrial sectors, new challenges have emerged among geological exploration units following the transition period of reform.

　　Although a series of supporting policies and regulations have been put in place, Anhui has inevitably encountered a number of issues during the process of classifying and reforming its geological exploration units.

　　— Due to unclear functional positioning, Class-I public-interest geological exploration units are facing the predicament of “having nothing to do.”

　　Before the classification reform, geological exploration units all had clearly defined functional roles. However, after the classification reform, relevant policy documents have failed to assign specific functions to geological exploration units based on their respective categories. As the classification reform deepens and accompanying measures such as fiscal budget reforms are gradually introduced, the mismatch between powers and responsibilities within geological exploration units has become increasingly apparent—this discrepancy is particularly pronounced among Class-I public-interest geological exploration units.

　　According to relevant policy documents issued by the national and provincial authorities, public-interest institutions of Category I are neither the purchasing entities nor the service-providing entities in government procurement of services; therefore, they are prohibited from participating in such procurement activities. Moreover, the public-interest nature of Category-I geological exploration units must be strengthened. Through measures such as transfer, sale, and restructuring, these units should be decoupled from any enterprises they have established. Additionally, Category-I geological exploration units are strictly forbidden from making new external investments or directly engaging in specific production and business activities. Simply put, Category-I geological exploration units must enhance their public-interest functions. In the future, they will no longer be allowed to establish enterprises, engage in investment activities, or participate in government- or market-driven service procurement. By the end of this year, Anhui Province’s three-year transitional period for classification reform will come to an end. Under the current policy framework, starting from 2018, Category-I geological exploration units in Anhui Province will find themselves in the awkward situation of having “nothing to do.” Meanwhile, due to the lack of rigorous scientific justification during the initial classification process, Category-I geological exploration units tend to be relatively large in scale and proportion, which could lead to a waste of productive capacity within these units.

　　—The transition period is relatively short, and public-interest Class II geological exploration units will face considerable pressure in the coming years.

　　Looking at the revenue performance of the “Three Major Bureaus” in recent years, the three-year transition period appears somewhat insufficient. The geological exploration units are part of Anhui Province’s pilot program for the classification reform of public institutions. For geological exploration, a three-year transition period (2015–2017) was introduced, during which fiscal funding for institutional operations remained unchanged compared to the pre-reform level. Starting from 2018, these units began receiving subsidies according to the policies applicable to Category II public welfare institutions. For Category II public welfare institutions, operational funds are allocated based on the actual number of employees within the established staffing levels, at a standard of 45,000 yuan per person per year. According to regulations, beginning next year, the fiscal operational funding for Category II public welfare institutions in Anhui Province will be reduced to 45,000 yuan per person. Anhui Province’s “Three Major Bureaus” comprise a total of 23 Category II public welfare institutions, with a combined workforce exceeding 17,000 employees, including nearly 8,000 active-duty staff. As a result, fiscal operational funding for active-duty staff will decrease by 360 million yuan annually. Since 2012, the “Three Major Bureaus” have seen their external revenue generation, surplus funds, and profits decline year after year. The surplus and profits have dropped from a peak of 270 million yuan to 210 million yuan in 2015, leaving an annual shortfall of approximately 100 million yuan.

　　Meanwhile, according to policy regulations, public-interest Class-II geological exploration units are, in principle, prohibited from making cross-industry investments. This means that such units will have to rely solely on generating revenue through the geological exploration market in the future to make up for the shortfall in fiscal subsidies. Given the current downturn in the geological exploration economy and the immaturity of China’s commercial geological exploration market, public-interest Class-II geological exploration units will face significant challenges to their survival.

　　— Some geological survey units have yet to adapt to the new policies, which has affected the pace of reform and development.

　　On the one hand, a performance evaluation mechanism tailored specifically for Class-I public-interest geological exploration units has yet to be established. According to policy requirements, Class-I public-interest geological exploration units are supposed to separate their administrative functions from their commercial operations, and employees’ salary levels are to be set no higher than the average level of local civil servants’ allowances and subsidies. Since the new performance evaluation and assessment mechanism has not yet been put in place, salary disparities among employees in Class-I public-interest geological exploration units remain relatively small. As a result, employees now exhibit low work enthusiasm and insufficient motivation.

　　On the other hand, public-interest Class-II geological exploration units face overly rigid policy restrictions. According to these policies, Class-II public-interest geological exploration units are required to separate their public-service functions from their commercial operations and maintain separate revenue and expenditure streams. Employees with public-service status are prohibited from holding concurrent positions in enterprises run by their units and receiving additional compensation for such positions. As a result, employees with public-service status show little enthusiasm for taking up jobs in these enterprises. Currently, the core personnel of the enterprises run by Class-II public-interest geological exploration units are mostly those with public-service status. Consequently, these enterprises will soon face a serious brain drain.

　　— Most geological exploration units have an overly broad scope of business, yet their involvement in related extended industries is insufficient.

　　Starting in the 1990s, as the industry entered a downturn, geological exploration units began to diversify their operations and venture into new fields such as real estate and pile foundations. Today, most geological exploration units have largely shifted their core business away from traditional geological exploration, and their primary revenue sources no longer come exclusively from geological surveys. For example, in 2016, the Anhui Provincial Bureau of Geology and Mineral Resources, the Huaye Geological Exploration Bureau, and the Coalfield Bureau reported operating revenues of 5.01 billion yuan, 2.11 billion yuan, and 2.69 billion yuan, respectively; among these, the proportion of revenue derived from geological exploration was 5.9%, 4.5%, and 14.6%, respectively. Meanwhile, although geological exploration units have diversified their operations across a wide range of sectors, their involvement in businesses anchored on geological exploration technologies remains relatively low. For instance, areas closely related to ecological civilization construction, urban geology, and agricultural geology—sectors that are crucial for supporting economic and social development—have seen slower progress and have yet to play their fundamental and pioneering role as the mainstay of such developments.

　　The competent authorities are guiding and enhancing quality and efficiency, seizing development opportunities. The classified reform of geological exploration units is a long and arduous task.

　　The classification reform of geological exploration units in Anhui Province has been completed, and these units have fully entered the transitional period—a critical phase for reform and development. The research team believes that government departments should strengthen guidance, continuously refine supporting policies, and encourage geological exploration units to focus on supply-side reform, ecological civilization construction, and urban development, thereby enhancing the quality and efficiency of geological surveys and fully leveraging the foundational and pioneering role of geological work in serving national and local economic and social development.

　　First, strengthen guidance and steer geological exploration units toward reform and development. As the department responsible for business guidance, we recommend that the Department of Natural Resources assist geological exploration units in securing supportive policies tailored to their respective reform categories. Additionally, the Department should organize research into the future directions and key priorities for geological exploration work, thereby guiding these units in their reform and development efforts. At the same time, geological exploration units should proactively collaborate with the Department of Natural Resources in studying current and future trends and priority areas for geological work within the province. They should conduct thorough analyses and assessments of geological needs related to mineral exploration, ecological civilization, disaster prevention and mitigation, as well as new urbanization, industrialization, agricultural modernization, and major infrastructure projects. Furthermore, they should develop and formulate provincial-level strategic plans for the geological exploration industry, providing guidance for the categorized reform and upgrading of geological exploration units and promoting the sustainable development of the entire industry.

　　Second, we should promptly clarify the roles and responsibilities of these institutions to promote their stable development as public-interest geological survey units. It is recommended that the provincial government, the Department of Natural Resources, and the geological survey units strengthen communication and, based on the current situation and trends in regional economic and social development, collaboratively study the needs for geological work within the province. We should quickly define the functional positioning of public-interest geological survey units, especially by promptly identifying and clarifying their specific duties and responsibilities. Public-interest geological survey units should proactively engage in dialogue and exchange with the government, seize opportunities, and take the initiative. Leveraging their own technical strengths and advantages, they should provide adequate public goods and technical support to society and government agencies, closely aligned with the government’s management functions, and actively strive for expanded public-interest mandates. In particular, public-interest geological survey units located outside provincial capital cities should enhance their communication and collaboration with local governments, focusing on areas such as agricultural geology, ecological civilization construction, and urban development, and actively seek out and secure additional public-interest roles.

　　Third, appropriately extend the transition period to help Class-II public-interest geological exploration units make a smooth transition. Given the current downturn in the geological exploration economy, after the transition period ends and fiscal funding for Class-II public-interest geological exploration units is reduced, most of these units will face significant financial pressures. Therefore, geological exploration units should proactively seek an extension of the transition period. It is recommended that the land and resources authorities, from the perspectives of industry services and workforce development, assist geological exploration units in securing a 2- to 3-year extension of the transition period. During the transition period, various bureaus should coordinate and align efforts to transfer enterprises previously run by Class-I public-interest geological exploration units to the management of Class-II public-interest geological exploration units. Moreover, they should support enterprises run by Class-II public-interest geological exploration units in accelerating their development during the transition period, thereby laying a solid foundation for marketization.

　　Fourth, geological exploration units should proactively respond to the reform and carry out foundational work in greater depth. Geological exploration units should earnestly study and thoroughly grasp the national and provincial reform policies and guidelines, fully understand and accurately apply the spirit of these policies, and mobilize all relevant parties to enthusiastically support and participate in the reform. Public-interest geological exploration units should promptly develop and implement performance evaluation and assessment mechanisms tailored to their own specific circumstances. Public-interest units of Category One should boost employees’ work enthusiasm and maintain team stability; public-interest units of Category Two should enhance their market competitiveness, stimulate employee motivation, accelerate the shift in mindset, and adapt to the demands of market-oriented development. In addition, with regard to general reforms—such as pension insurance and retirement arrangements—geological exploration units should take into account their own unique characteristics and actively seek policy support. As for internal reforms—such as deepening income distribution, labor employment practices, and project management—these should be carried out within the scope permitted by existing policies.

　　Fifth, we must seize the opportunities presented by reform and expand our business areas. A new round of industrial revolution is taking shape, with high-tech industries and strategic emerging industries experiencing rapid growth. This has led to a steadily increasing demand for mineral resources related to new energy and new materials, opening up new horizons for geological exploration. Moreover, the construction of an ecological civilization is placing ever-higher demands on the investigation, evaluation, and monitoring of land resources, geological environments, and geological hazards, driving a continuous rise in the demand for geospatial information technologies and thus creating new frontiers for geological services. The Wanjiang Economic Belt and urban planning initiatives also offer vast space and potential for expanding our work areas and enhancing our professional capabilities under the new circumstances. Geological survey institutions must firmly embrace the vision of “large-scale geology, large-scale resources, and large-scale ecology,” continuously broaden the scope of our geological service offerings, ensure steady growth in geological work, and enhance our capacity and effectiveness in using geological work to support economic and social development as well as ecological civilization building.