Indispensable to Xi’s broader macroeconomic agenda, de-capacity needs the firepower of wider reforms. Domestic heavy industry is bloated and inefficient, requiring the state to force cutbacks in production capacity throughout China’s industrial sector, beginning with coal and steel. The 2017 Government Work Report placed aluminium and coal-fired power next in line to be cut down, with more to come in the year ahead.
economy: 2i integration, bracing for deleveraging, domestic wheat uncompetitive, SOEs going corporate
At its first post-Congress executive meeting, State Council renewed its support for Internet+ and Made in China 2025. 2i integration and smart manufacturing are to speed up, with increased support of basic and industrial internet. 2i integration is not just replacing humans with robots, argues Zhou Ji 周济 China Academy of Engineering director. A complete transformation, it makes manufacturing more smart, automatic, digitalised, and connected.
Shinzo Abe, who welcomed Donald Trump to Japan with ‘Making Alliance Even Greater’ hats, is bent on improving ties with China. Frosty since the 2012 Diaoyu/Senkaku islands standoff, Abe made a number of overtures to China in the lead-up to his recent re-election.
governance: preparing for Trump, polarised overseas returnees, more on new anti-corruption apparatus, new era for global trade
Xi Jinping’s ‘Chinese-style socialism for a new era’ has raised international eyebrows, with post-19th Congress domestic commentary suggesting that ‘in Xi’s new era, Chinese diplomacy will be a display of hard power’. Foreign policy has clearly risen in the Party’s scheme of things, with State Councillor and former Foreign Minister Yang Jiechi 杨洁篪 promoted to the Politburo, possibly to recognise his role in crafting the ‘new-style major power relations’ controversially acceded to by the Trump administration.
The 19th Party Congress etches Xi Jinping’s 习近平 political heft into public consciousness. Launching a ‘new era’ of socialism with Chinese characteristics, his report plumps for a stress on Party, rather than personal, supremacy (though the latter could be glimpsed as a subtext). The ‘new era’ reissues and strengthens old pledges from the Deng and Hu eras of a more inclusive, eco-positive agenda.
economy: rural revitalisation; supply chain innovation; toward a housing solution; Made in China 2025 on track
A rural revitalisation strategy mooted by Xi in his 19th Party congress report has broad implications for domestic agriculture and rural residents alike. Han Jun 韩俊 Central Rural Work Leading Group Office director says rural revitalisation expands on Hu Jintao’s 胡锦涛 ‘new socialist countryside’: urban development and rural revitalisation ought to be mutually beneficial.
This is our final 19th Party Congress bulletin. See previous coverage here:
Xi’s report to the 19th Party Congress: a pre-construction
19th Party Congress bulletin 1: setting the stage
19th Party Congress bulletin 2: shifting fortunes
19th Party Congress bulletin 3: Xi’s report
19th Party Congress bulletin 4: the lineup
The reality of Xi’s firm grip on the Party came through loud and clear at the unveiling of the new Chinese Communist Party’s (CCP) Politburo Standing Committee (PSC) on 25 October 2017.
As we forecast, three steadfast Xi loyalists—Wang Huning 王沪宁, Zhao Leji 赵乐际 and Li Zhanshu 栗战书—feature in the new lineup, guaranteeing Xi a majority in policy-making.
governance: dismantling shuanggui, happy pill for foreign pharma, China–Japan moving on, free trade promises
CCP Central Office and State Council General Office flagged changes to drug and medical device regulation. Clinical trial management, approvals, R&D and market rules will be tweaked as the state seeks to boost medical tech innovation, clearing bottlenecks to market entry for new and critical imports.
Under Mao, China stood up (站起来); since the late ‘70s, it has been busy ‘getting rich’ (富起来) (or at least ‘moderately prosperous’); and now in the Xi Jinping-anointed ‘New Era’ of post-reform China it has ‘gained power’ (强起来).
economy: civil–military integration, inclusive finance, greener pastures, steel industry restructuring
The civilian and defence sectors must work together in sci-tech, stresses the Central Civil–Military Integrated Development Commission. Since central sci-tech funding reform is almost completed, military R&D should engage with scientific and business communities to become more cost-effective.
As rumbles from North Korea’s sixth nuclear test in September 2017 subsided, debate within China exploded into character assassinations and insults. Zhu Zhihua 朱志华 Zhejiang Association of International Relations deputy president savaged Jia Qingguo 贾庆国 Peking University School of International Studies dean, for his proposal to start contingency planning talks with the US and South Korea, which ‘copy the US’ and ‘hint a military attack may be the next step’. Evoking the spectre of Cultural Revolution struggle sessions, he insinuated Jia held a wrong ‘political standpoint’.