Raising the bar for libel suits will simply add to the costs of public relations and coordination within the power structure, which in turn will improve their skill set. And even if they abolished Article 246,  could they not still find ways to punish complainers through other laws?       

The Supreme People’s Procuratorate made a decision not long ago regarding making arrests in libel cases.  If a public security organ wants to make an arrest and the prosecutorial office which hears the case believes this is necessary based on the details at hand, they must submit a report to a higher level office before permission is granted.  This is a timely and necessary ruling.  It will help protect the credibility of companies, guarantee human rights for citizens, and prevent the misuse of public power.
Over the past few years Article 246 of the criminal code has become a private tool of public offices to protect “official power” (官威).  The article reads: “If a person is deliberately insulted through violence or other means or the truth is fabricated to slander a person, due to the gravity of the circumstances the penalty of imprisonment, criminal detention, being placed under surveillance, or being stripped of political rights can be meted out for up to three years.  The aforementioned crimes are to be handled only upon complaint, except in matters of severe threat to social order and national interest.”
It is obvious that libel is a criminal act that violates individual rights which is distinct from the crime of inciting subversion of state power through libel or starting rumors.  It is also different from “the crime of damaging the reputation of businesses or products” through rumors or libel.  Cases are usually brought by individuals and if there is no complaint there will be no adjudication.  But there is a proviso in this article which is a special exception in Chinese criminal law.  It forbids “insult or libel of national leaders,” something which does not exist in certain other countries’ written codes.  
Rumor mongering or libel of high level public officials indeed can potentially “severely harm social order and national interest.”  However, the paradoxical aspect of this proviso over the past few years is that it has been used time and again by low level officials.  Since the Pengshui poem case (彭水诗案) in Chongqing in 2006, we have had a steady stream of others come to light, including the Five River SMS case (五河短信), Jishan clerk case (稷山文案), Lingbao cross province pursuit case (灵宝跨省追捕案), and the Zhidan SMS case (志丹短信案).  A quintessential example happened in 2009 when a young man named Duan Lei (段磊) in Shandong posted something online which was reported to Guo Feng (郭峰), party secretary of his town.  The procuratorate declared Duan Lei was “a severe threat to social order” and filed a public suit accusing him of libel.   
Just imagine for a moment the amount of normal citizen complaints and reports on officials which could be investigated by the police and result in criminal libel suits.  With all of the problems that are arising from the transitions in today’s society, how many criminals would there be across the country who run afoul of official power?  What kind of situation are we going to get ourselves into because of emotional intensification between citizens and officials who oppose each other?  What’s more, society will build up resistance to any governing method that treats the symptoms instead of providing a cure.   Since there is unlikely to be any drastic reduction in conflicts with officials or social problems, abusing the power of the legal system to protect officials in power will gradually become less effective.  What more audacious measures will appear when accusations of libel fail to strike fear in citizens who confront official power?  There will be unfettered recklessness!  
In some cases when citizens supervise or criticize employees of the state, there is no clear line that can be drawn for malicious libel or insults to character.  It is common knowledge that the individual rights of these employees must be protected.  But if the problem reaches this level there is a legal channel to solve it, such as when a civil suit claims damages and an apology or even if it is a criminal suit.  
But some local officials frequently make the police and procuratorate go after those who offend officials in power.  The most basic reason is that they have the ability to abuse the power of the justice system with little risk to themselves.  Some people have been slapped with criminal suits because of what was reported in the media, but how many of the officials involved have been seriously punished?   There is no need to speak of the types of cases that are not able rise to the surface.  There is a lot of profit to be made from this practice.  When public powers take the lead and successively detain, prosecute and sentence, the results are instantaneous.  It scares many malcontents into abandoning their plans.  
The Supreme People’s Procuratorate’s introduction of this rule is extremely timely, but it’s difficult to be too optimistic about how useful it will be. It will be very hard to effect any great change in local government because of some technical changes in the judicial system.  Citizens who offend officials in power are frequently accused of libel, which is is not a simple legal matter.  Power is far too concentrated and it cannot be checked or balanced effectively,
This reality will continue for the foreseeable future.  Raising the bar for libel suits will simply add to the costs of public relations and coordination within the power structure, which in turn will improve their skill set.  For example, if a party secretary at the county level feels an Internet post is libelous, he cannot just order the police, prosecutors and courts as he did before.  But if he must first get permission from the city level prosecutorial office, it will not be all that difficult.
Even if higher level offices are not prone to this, citizens are already impeded through punishments from civil suits.  So if local officials lose face, the odds are still great that they will win a criminal suit in a locale that is under their control.  Even if they abolished Article 246,  could they not still find ways to punish complainers through other laws?  There are the crimes of disturbing public order and making false accusations among others. After all, officials in China traditionally have never lacked wisdom in ruling their people.
In the final analysis, the problem of citizens offending officials will only be solved when the problems of limiting and supervising power and ascribing responsibility to those who abuse power are fundamentally solved.  Otherwise, the effect of technical changes on a legal level will be limited.  Of course, every small step taken that protects the rights of citizens should be met with affirmation and welcome.