Environmental conservation has clearly risen in the Xi administration’s estimate as key to the nation’s shift to high-quality growth and social stability. And ‘taking another look’ follow-up inspections have emerged as a testing ground of the Ministry’s governance.
The 31 October Politburo meeting omitted mention of de-leveraging and real estate control, highlighting instead the imperative to stimulate growth. The next day, Xi Jinping 习近平 reassured selected private entrepreneurs that their sector remains core to the socialist economy, and that more support is forthcoming. Attendees, however, were hand-picked from high-tech ‘national teams’ or industrial champions, scarcely representative of the private sector as a whole.
China–Japan relations were centre stage 25-7 October, with Japanese PM Shinzo Abe’s state visit to Beijing promising renewed economic cooperation (see also our Trade position). Abe and Xi pledged to set aside political differences and promote free trade, reaching deals across sectors from infrastructure to energy.
October was punctuated by high profile moments in foreign relations, notably with the US and Japan. At the beginning of the month, Pence made waves with blunt assessment of China’s strategic threat. Attacking it as paranoia, Chinese commentary absorbed it as laying a new baseline, while also subtly framing it as judgement on Beijing’s previous naivety.
China’s naval forces have long suffered from fragmented administration, limiting their capacity to combat crime at sea and defend China’s sovereignty. Power was consolidated into a China Coast Guard in 2013, but the move failed to address remaining ministerial overlap between the SOA, Ministry of Land and Resources and Ministry of Public Security. March 2018 reforms now empower the China Coast Guard (CCG) with law enforcement authority.
With market confidence sliding amid talk of new rounds of ‘state advances and private retreats’, top officials have stepped out in force to reassure investors. Liu He 刘鹤 vice premier was jointly interviewed by People’s Daily, Xinhua and CCTV on 19 October, pledging to stabilise and reform the stock market, solve private enterprise financing challenges and push forward state-owned enterprise (SOE) reform.
Official trade data released 12 October shows record-breaking growth in September. Total exports grew 14.5 percent y-o-y, much higher than the estimated 10 percent, and exports to the US grew 16.6 percent, bringing the surplus to a new monthly high of US$34.13 bn.
Since the 5-year plan for rural revitalisation was released late September, public and private entities have issued a flood of related policy documents, action plans and cooperation agreements. Releases last week included a strategic cooperation agreement between state-owned investment giant CITIC Group and Ministry of Agriculture and Rural Affairs (MARA), along with substantial debate on dairy industry revitalisation.
Where Jiang and Hu saw reform driving the Party, Xi thinks matters should have been the reverse. Xi envisions a Party that is stronger, smarter and ideologically coherent at all levels of administration.
The five-year rural revitalisation strategic plan, anticipated since March, was at last published by the Central Committee and the State Council 26 September.
In the wake of 19th Party Congress commitments to a ‘New Era’ growth model, old zones are being consolidated while Beijing plans a new generation of centrally controlled zones to pursue ‘high quality’ and ‘high tech’ growth eschewing subsidies. These new-model zones are the cutting edge of China’s effort to transition to a new economic model. Trade tension, forcing external adjustments to supply chains, adds urgency to this effort.