19 jan 2015: draft Foreign Investment Law open for comment until 17 feb. After enactment foreign investments need only be reported to MOFCOM and should enjoy national treatment. In restricted areas approvals will still be required.
In the mirror of imperial history, who does Xi Jinping 习近平 see? An article under his name on the Central Discipline and Inspection Commission website in early February gives a hint. Emperor Yongzheng 雍正皇帝 was the fifth Manchu Emperor, and among the most controversial. Parallels abound, as liberal critics have already noted: Yongzheng despatched kin and counsellors with the same aplomb as Xi when downing ‘tigers’.
Investment is often raised and delivered in China, as elsewhere, through projects. But unique to China is a 50-year history of attempted central planning and its institutional legacy… Among the by-products of this legacy is the ‘project system’, a set of workarounds and operating procedures that grew up following the demise of the ‘danwei society’…
The annual no.1 Central Document responds to slowing growth, rising production costs, resource shortages, and urban-rural gaps. Renewed vigour behind the buzzwords ‘agricultural modernisation’ flags the centre’s aspiration for innovative, sustainable and larger-scale operations. Yet hardware trumps software again with no concerted effort on boosting farmer skill sets..
Anti-corruption has lost a little lustre amid cries of foul play. Anbound, an insurance giant with links to princeling families, has been seeking to take over the private Minsheng Bank. President Mao Xiaofeng 毛晓峰 resigned as he was detained by the Central Discipline Inspection Commission.
In a modern state, interests are legitimate and can be arbitrated. In China’s Party-state, interests are not clearly legitimated and therefore elude arbitration, with guanxi networks proliferating to fill the gaps. Every group in society was in theory unified under the Party to work for a single purpose—the salvation and progress of the Chinese nation. Interests were articulated and pursued in a grey zone…
The banking sector shuddered at troubling signals from credit markets at the end of Q3. Accelerating NPLs suggest economic transition is a false start. In theory, ameliorating credit market risk and redirecting economic activity should be mutually reinforcing processes. In practice, banks’ heightened risk protocols are a tourniquet on targeted stimulus.
Xi’s interpretation of hukou reform at the end of September extinguished notions rural land might be individually owned. The possibility reignited debate on land reform. Appeals to equity found alliance in reformers urging economic expediency: dismantle the dual rural-urban structure and erect a system recognising workarounds like grey market housing.
The summer’s anti-monopoly fanfare may be indicative of more to come. Foreign auto companies appear to be in the cross hairs, as the NDRC realises industrial policy through sanctions. A more hostile environment with idiosyncratic enforcement awaits foreign enterprises.
The problems plaguing the South North Water Diversion Project, slated to open its middle route this fall, are a microcosm of China’s environmental and energy governance. Routine delays are a symptom of poor central coordination. Well over-budget, costs continue to escalate from unforseen contingencies such as treating water from polluted tributaries.
The Third Plenum is a Party meeting. Xi Jinping will stamp his authority and shore up his power base; the Party-state will commit to deeper reform; interest group privileges will be rebalanced; a broad policy ‘road map’ will be laid out; a balance will be struck between politics and economics.
The China Policy Christmas and New Year of the Sheep present for all our friends and supporters: a fabulous slide show of modern Chinese cinema with links to the movies. Our selection brings another dimension to your China insight and, if not quite carefree, offers a more relaxed way to keep you on your China toes.