cp.signals • weekly • domestic policy movement

A draft amendment to the Personal Income Tax Law proposes a bold update to China’s income tax system. The current system is a patchwork of taxes on different types of income withheld at source. The draft proposes a system closer to common international models, in which the state will levy a single income tax, covering earned and unearned income, based on tax returns.

cp.signals • weekly • domestic policy movement

Xi Jinping sees ending poverty in China as a major test of socialist policy—and one he takes a great interest in supervising. Set at the low level of C¥2,300 per person per year, China’s poverty line is some 50 percent lower than the World Bank’s widely-used definition of extreme poverty. Pledging to raise the remaining rural poor up to this poverty line by 2020, Xi has made the campaign a whole-of-government priority.

cp.signals • weekly • domestic policy movement

A ‘financial opening’ agenda is under way, designed to improve market access and business conditions for international investors in the financial sector. Admitting the need for international expertise to raise the performance of the financial sector, the agenda echoes China’s rationale for its 2001 WTO accession, and delivers on some still unfulfilled accession commitments.

cp.observer • monthly • complimentary roundup

june: facing the slowdown

When launched at last year’s 19th Party Conference, ‘Xi Jinping thought’ on foreign policy stressed self-confidence and Party authority. Repeated by Xi at a foreign affairs work conference 23-24 June, the space for debate seemed to narrow further. Yet doubt, debate and cautious stocktaking remained in the air. Much uncertainty was due to Trump, whose odd concessions, e.g. on ZTE, and deference to Chinese rhetoric collided with trade threats and strategic tensions, a chaotic mix not easily amenable to Xi’s ‘China solution’.  

cp.signals • weekly • domestic policy movement

Cities need more college graduates. That appears to be the view of local decision-makers: over the last two years, measures to attract and retain college graduates have proliferated. The first salvo was fired December 2016 when Shenzhen allowed all graduates under the age of 35 from technical colleges and above to apply for hukou. The wealthy megacities of Beijing and Shanghai are not competing very strenuously, but smaller cities seek to win the so-called ‘talent war’. Since March 2017, nearly every month one or more cities have issued talent policies, sparking a bidding war that central policy-makers are now trying to tame.

cp.positions • audit of shifts across sectors • alternating weeks economy/governance

In a blow to the solar industry, National Development and Reform Commission (NDRC), Ministry of Finance and National Energy Administration (NEA) on 4 June jointly announced the ‘most stringent solar power regulations yet’, restricting 2018 solar power project construction and slashing project subsidies. The new policy caught the industry off guard: solar PV manufacturers’ stock prices plummeted, reports Caixin, with some firms scaling back production and considering layoffs.

cp.signals • weekly • domestic policy movement

Despite short-term uncertainty, China’s own ag outlook projects sustained rise in animal protein imports for the next decade.

cp.positions • audit of shifts across sectors • alternating weeks economy/governance

China countered new US tariffs on its goods announced 15 June, levying an equal amount; recent attempts at a working compromise will be abandoned. The two sides will add tariffs on imports of each other’s goods worth US$34 bn from 6 July, with another US$16 bn to be potentially added after public consultation.

cp.signals • weekly • domestic policy movement

Online services are part of plans to reduce pressure on overcrowded top-tier general hospitals located in coastal cities. Better data transfer between hospitals and local healthcare stations can reduce the number of hospital visits. IT can also improve access to healthcare in remote regions, low-hanging fruit to meet ‘Healthy China 2030’ goals.