As a rising power representing a quarter of the world’s people China faces a dilemma: it desires to list certain universal values on its international calling card, while steering the hearts and minds of that same people to embrace a top-down, prescribed set of values of its own.
‘China collapse’ theories that obsess the West, claims the official media on 24 June, are a conspiracy against China. The CCP views issues ‘dialectically’, Xi Jinping 习近平 reiterated in Guizhou last week. This means treating the world as linked and developing. The Chinese economy, he added, is entering a ‘new normal’ full of contradictions and problems.
- anti-monopoly rumble returns
- China’s climate pledge builds Paris momentum
- shantytown renewal is new growth panacea
- Party grip on SOEs tightens
- public housing loans to be fast-tracked
10 june: State Council session extends license approval for consumer financing companies from 16 pilot cities to the nation as a whole; approvals are devolved to provincial level. Expanding lower income groups’ access to credit aims to increase the share of consumption in economic growth.
The weekend saw ‘urgent instructions’ to localities around the country to roll out measures to ‘maintain stability’, not in the regular sense of stern crackdowns on dissent, but of investment-driven growth policies, (upgrading grain storage facilities and other rural infrastructure) in other words more mini-stimulus. This, rather than reform or anti-corruption, is currently at the top of the policy agenda.
To eliminate last vestiges of Mao-era collective farming and shift to an enterprise-based market-driven model. Responsibility for social services (including police and courts) will pass from the enterprise to local state institutions. Consolidating and increasing scale and efficiency of nongken farms and firms, the aim is to make them globally competitive.
It was a week marked by an absence of fanfare in two momentous developments. Making page one of official media on Friday, both the Zhou Yongkang 周永康 verdict and Aung San Suu Kyi’s meeting with Xi Jinping 习近平 were nevertheless muted in tone. Elsewhere, the Zhou verdict was read as drawing a line under Xi’s drive against corruption; his reception of Aung San Suu Kyi as facing down bureaucratic and factional obstruction.
- nuclear poised for growth and policy favour
- taxi apps/innovation debate spreads
- another step toward marketised interest rates
- PBoC to ease liquidity; guide mid-term rates
- accelerating reform has yet to reach education
As drafting of the 13th 5-year plan gets into gear, debate is also stepping up over the relative priority of reform vs. GDP targets. A slowing economy is sidelining reform: curbs on corporate debt, recently imposed, have now been loosened. Domestic commentators speculate that 7 percent GDP growth—an accepted ‘new normal’ benchmark—will be grimly defended through to 2020; reform will have to be scaled back to accommodate.