The National People’s Congress is becoming more willing to challenge the State Council on some issues in the public spotlight, notably environmental protection and public finance.
NPC’s push to increase its influence, however subtle, is significant. For a long time, the NPC passively approved new laws. Now, the Party may no longer be able to take for granted that the NPC will approve legislation—exposing tensions as ministries fight its larger role.
The top-level plan for fixing China’s bloated and inefficient state sector, 22 months in the making, disappoints. The November 2013 Third Plenum Resolution represented a progressive blueprint for breaking policy gridlock, but the Party’s determination to retain control of economic management shows no sign of abating. The new document restates key Third Plenum principles.
- thou shalt be an entrepreneur
- healthcare goes digital
- SOE reform plan underwhelms
- reshaping farms
- Energy Law and Environment Protection Tax Law
- cybersecurity looms large in lead up to Xi state visit
New rules give the go ahead to invest a portion of pension funds in stock. Cleaning up a fragmented system is needed, but the reforms are not enough to either make a dent in pension shortfalls or stabilise the stock market.
Learning from a slew of poor-performing overseas investments, ‘going global’, rebranded as ‘capacity cooperation’, will insert Chinese capital and know-how into partner ventures rather than dominate whole value chains. Rolling out ahead of Belt and Road, it will take a more calibrated approach to exporting capacity.
- reversing NPC’s rubber stamp status will be slow
- pension funds to the market
- e-commerce techno-cure
- yet another food safety law
- big parade wins domestic hearts and minds
A surprise currency devaluation and another jolt in local equity prices sent jitters through peripheral currencies and global markets. Doomsayers would be wrong to see portents of downfall in either. The popped stock market bubble and weakened RMB demand are symptomatic of deferred structural transition. The consequent slowdown, long in the making, is hardly news.
A self-confident Xi Jinping 习近平 is no longer ‘hiding and biding’, pronounced a 15 August 2015 news report. This ‘remoulding’ of Deng Xiaoping’s 邓小平 famous maxim was rapidly echoed across the media, reinforced by the military parade on 3 September.
The shift from arbitrary pollution control fees to a tax framework signals China’s strengthening response to polluters. The draft Environmental Protection Tax Law (EPT Law) released 10 June by MoF, SAT, and MEP also points to a transition from a whack-a-mole approach using administrative decrees, to a legal framework that allows for more rational arbitration of interests.
- MoF and NDRC pushing agri reform
- SOE reform plan delayed 17 months
- cyberspace sovereignty
- muted response to Abe’s end WWII speech
- lifelong accountability for environmental damage
- streamlining and tightening drug approvals
MIIT’s 23 July plan to build 100 intelligent SME clusters around established firms encourages SMEs as innovators and manufacturing hubs in their own right. The plan marks MIIT’s debut as driver of macro-policy, but reveals its limitations. Securing funds—SMEs’ biggest constraint—lies beyond MIIT’s remit or political clout.
Centrally-planned regional upgrade aspires to offset economic slowdown and climate change in one move, achieving national showcase status. Among multiple objectives, dismantling provincial protectionism while boosting regional integration and cooperation rank high. The June 2015 Coordinated Development Outline details planned transport corridors, activity zones and environmental protection.