With NEV (new energy vehicle) sales hitting 500,000 in 2016, China, the world’s largest market for new cars, aims for sales of five million new energy passenger cars by 2020. The state designated NEVs—pure electric, plug-in hybrid electric and fuel cell vehicles—a key strategic emerging industry in 2010. Full-scale subsidies took off in 2013, and the industry grew rapidly as manufacturers cashed in, favouring short-term profit from low-end tech over R&D.
At his 11 January 2017 confirmation hearing, US Secretary of State designate Tillerson pledged to ‘send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed’. This sets up Washington for some hot exchanges with Beijing. Trade war remains a deep concern, though warm exchanges between Trump and Alibaba CEO Jack Ma 马云 gave some sign of a silver lining.
While they outline a broad reform program, state media stressed a focus on protecting private property: rebalancing power between individuals and the state, and reassuring the public that their personal and corporate assets are inviolable. The ‘Opinions’ call for strengthening the property rights legal system, especially through drafting the Civil Code and abolishing legal discrimination against private property holders
State Council released the ‘2016 China aerospace white paper’, encouraging private and foreign capital to invest in commercial rocket development, satellite R&D and commercial projects. The commercial aerospace industry is blossoming, notes Liu Ruopeng 刘若鹏 Shenzhen Kuang-Chi Research Institute director, thanks to steady government support since 2014.
13 million new jobs will have been created in 2016, well over the annual goal, predicts Ministry of Human Resources and Social Security. The number of new migrants working outside their home province, however, increased just 630,000 in 2015 (compared to 8.03 million in 2010), reports Li Tie 李铁 NDRC Centre for Urban Development director, attributing the change to inhospitable settlement policies and declining labour demand: bad news for urbanisation plans.
Risk management mantras dominated the December policy reviews. At the16 December Central Economic Work Conference officials stressed the need to restrain real estate bubbles: ‘houses are for living in, not speculation’. Downplaying growth, they focused, as ever, on decapacity in the coal and steel sectors. The Central Rural Work Conference, a few days later, warned again on the imperative to resolve gridlocks in land ownership and grain pricing. They sounded again the note of high quality, environmentally friendly production.
Managing financial risk was the core message of the 2016 Central Economic Work Conference, winding up 16 December. Officials highlighted the need to restrain real estate bubbles: ‘houses are for living in, not speculation’. Restrictions on buyers and developers appear effective, with price rises slowing in November. The bubble, argue Yin Jinnan 尹晋男 and Feng Jianlin 冯建林 from Beijing think tank FOST, was created by easy credit and supply–demand mismatches.
What will 2017 bring? As a diversion from worries ahead, we continue our holiday series and delve into contemporary Chinese culture. This year we have engaged Timothy Coghlan, PRC fashion industry specialist, to update you on ‘what’s in’ on the local scene..
Cyberspace Administration of China (CAC) is targeting major news websites. It censured Sina, Netease, Sohu and Ifeng for sensationalist and obscene clickbait titles. It then ordered Ifeng to shut down multiple news programs: only traditional media outlets may produce news content. MIIT announced a clean up of unregistered domain names, aiming for official certification of 99.9 percent of websites.
The plan recognises that more integration with international agri markets is in China’s interests. Acknowledging high domestic prices and widespread natural resource damage, it seeks to invest and cooperate overseas. Now allowing markets to play a larger role, China may further concede imports to efficient international commodity crop producers as it seeks to exploit its own comparative advantage in horticulture exports, The plan also pushes for a larger role in setting global standards.
The ‘market economy status’ clause in China’s accession agreement to the WTO expired yesterday, 11 December 2016. The US, Japan and the EU, China’s key trading partners, have not yet indicated how they intend to now calculate anti-dumping duties against China. Denying China market economy status could lead to a trade war, warns Xue Rong 薛荣 China WTO Research Association vice president.
Public Private Partnerships (PPPs) have drawn limited private interest and sparked an interagency turf war. PPP was repeatedly promoted by Li Keqiang 李克强 in State Council executive meetings throughout 2016. Lou Jiwei 楼继伟 former finance minister pushed for exploring mandatory PPPs and fought to control their supervision.