June: graft busters enforce reform
Li Keqiang 李克强 finally moved into politically tricky SOE reform, calling for slimmer and healthier firms as Central Commission for Discipline Inspection (CCDI) censured SASAC for its failings. SASAC responded, announcing a new policy placing Party officials above boards of directors. Several SOEs have already complied. CCDI, previously limited to graft-busting, is moving into policy enforcement, condemning several other major central agencies for lagging on reform and neglecting Party values.
Robotics M&As in Germany indicate tightening relationships between domestic and global investment cycles. More regulations push NGOs to become quasi-social service agencies. A State Council water plan marks a shift in priority from from maximising use to conservation. New scandals, this time chemical-laden schoolyard running tracks making children sick, again put the spotlight on environmental standards. A watered-down anti-smoking law draft left advocates disappointed. The tertiary education entrance exam (高考 gaokao), and plans to increase quotas for students from underdeveloped provinces, pushed cross-regional rivalries, and inequalities, to the fore.
Most agree that the Brexit black swan, threatening international trade stability, gives no advantage to China. Global Times, however, sees some hope, arguing a fragmenting Europe will see opposition to arms sales ease. China prepares to ignore what it predicts will be a negative finding in the Philippines v. China case at the Permanent Court of Arbitration at the Hague on 12 July. Local media and legal experts are readied and in unison, citing a range of international authorities and research to argue China's position is ‘quite legal’.
We look to outcomes of the pending leaders’ summer retreat at Beidaihe seaside resort.
featured analysis
courtesy of CP’s signal services
linking people, land and money for deep urbanisation
A new central strategy ‘linking people, land and money’ better incentivises local governments to realise ‘deep urbanisation’: offering full urban entitlements to new residents, while limiting urban sprawl and soaking up housing oversupply. full post open access →
policy movers
can't put a name to the face? go to page footer
1.We are an interagency panel set up in 2007 under the Anti-Monopoly Law, now chaired by vice premier Wang Yang 汪洋, coordinating policy and enforcement between NDRC, SAIC and Ministry of Commerce.
Thus far we have been ineffective, hence suggestions that our role be expanded under a proposed fair-competition review, with the hope that we will, like the US Federal Trade Commission, preside over anti-monopoly law, ending current agency overlap and confusion.
2. I was appointed Minister in 2007 and rose from the ranks of senior engineers, with a tour of duty as Xinjiang vice governor from 2005-7.
I now oversee a critical policy shift from maximising water use and securing output, to conserving water resources through better regulation. A specialist in farmland irrigation, I have also helped develop large-scale hydro projects, including the Three Gorges Dam.
3. Arguing that modern industry will depend on internet infrastructure, I proudly reported in June 2016 that in Q1 2016 China had 390 million fibre to the home and 530 million 4G users.
I led information and communication development and network security after my promotion to central MIIT in 2015 after seven years in Hunan. My background is in computer science, and have researched AI applications in translation and language representation.
finance
premier on the front foot
Since 2013, Li Keqiang’s key initiatives, including devolution and innovation, have avoided politically tricky SOE reform. Amid growing political pressure, and with economic troubles continuing, Li is now interceding. full signal client access →
mid june position:
SOE reform changing directions
end june position:
corporate debt skyrockets
geopolitics
mid june position:
overseas voices given domestic coverage
end june position:
Xi and Putin eye Brexit
society
mid june position:
social support going beyond the state
end june position:
low safety standards put children in harm's way
agriculture
mid june position:
water regulations focus on conservation
end june position:
agriculture going global now state priority
trade and industry
mid june position:
developing precision medicine
end june position:
robot industrial chains
governance
mid june position:
CCDI moving from fighting graft to implementing policy
end june position:
fair competition, or is it?
policy ticker highlights
Xi loosens rhetoric over local reforms in deepening reform group meeting
People's Daily | 27 june
In the face of stagnated reform initiatives and criticisms of decentralising power, Xi Jinping 习近平 specifically addressed local party authorities in the 25th Central Leading Group for Deepening Reform meeting. Blaming stagnation in reform initiatives on special interests, Xi instructed central agencies to expand inspections on local enforcements.
China-Russia declaration on the promotion of International Law
The Paper | 27 june
On 25 Jun 2016 during Putin's visit to China, foreign ministers from both sides signed and issued 'Declaration on the promotion of International Law'.
start belt and road with agriculture
Ifeng | 20 june
Agricultural projects can be set up quickly and will generate support from the 64 Belt and Road countries, most of which are developing countries, said Du Zhixiong 杜志雄 CASS Rural Development Institute deputy director at China Entrepreneurs Forum in Hainan.
children’s health and safety scandals are systemic issues
Xinhua | 19 june
Fixing health and safety scandals must start from legislation, scholars tell Xinhua, after children fell ill from hazardous materials in school running tracks.
seven steps to make fair-competition review successful
The Paper | 17 june
State Council’s new competition review plan will require seven steps to be effective, argues Liu Xu 刘旭.
Krauss-Maffei merger more than grabbism
China Economic Net | 13 june
ChemChina has acquired the German manufacturer Krauss-Maffei for €925 million, reports Feng Hu 冯虎 China Economic Net, noting similarities between ‘Made in China 2025’ and Germany’s ‘Industry 4.0’ policies.
selected texts of the month (clients only)
governance
finance
society
lexicon
‘nonprofits’ hiding in the hills 山寨社团 shānzhài shètuán
Grouped with offshore social groups (lí àn shètuán 离岸社团), ‘nonprofits’ hiding in the hills are overseas shell companies disguised as nonprofits on the mainland. After the March 2016 release of the domestic Charity Law, Ministry of Civil Affairs (MCA) launched a major campaign, exposing 644 in the first three months. This coincided with release of new charity regulations and passage of the strict Overseas NGO Management Law seeking to regulate and tighten activities of overseas groups.
mass entrepreneurship and innovation 大众创业、万众创新 dàzhòng chuàngyè, wànzhòng chuàngxīn
Often shortened to ‘双创’ shuangchuang, it is an idea proposed by Li Keqiang 李克强 at 2014 Summer Davos. It has become a focus of innovation policy, seeking to boost the capacity of capital-starved individuals and SMEs. Measures includes tax breaks, subsidies for startups, innovation demonstration zones, and alternative finance mechanisms for SMEs. Li has mooted integration with related innovation efforts, like ‘Made in China 2025’ and ‘Internet+’.
land kings 地王 dì wáng
Tracts of land bought at extremely high prices through a formal bidding process. Housing prices are largely determined by land prices, hence public concern that such massive purchases making housing unaffordable. Central agencies issued a partial ban on central SOE land kings in 2010, allowing only 21 land-related SOEs to buy land. But unrelated SOEs, fuelled by easy bank credit, continue to do so. 2016 has already been nicknamed the ‘year of the land kings’: in May alone, 69 were ‘crowned’ in land auctions, many by SOEs, further stoking booming housing markets in tier 1 and 2 cities.
in the media
Jingjinji Integrating A Chinese Megapolis
World Policy Journal | 27 june
Josh Freedman, a researcher from China Policy, a Beijing-based research and advisory firm, said that despite being close neighbors, Beijing, Tianjin, and the surrounding Hebei province have long been politically and economically divided. “Each area—and even administrative divisions like counties or districts within these three areas—has its own interests and bases of power. Jingjinji is an attempt to break down some of these divisions through technological and infrastructural integration.”
quiz answers:
1. State Council Anti-Monopoly Commission 国务院反垄断委员会
2. Chen Lei 陈雷 | Ministry of Water Resources minister
3. Chen Zhaoxiong 陈肇雄 | MIIT vice minister
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