governance

watching for

  • webcast firms closing due to SAPPRFT rules
  • slow transfer of environmental powers to provinces
  • civil organisations to set up internal Party units

At a little-noticed forum in Zhejiang, Shen Jianguang 沈建光 Ruisui Securities chief economist repeated his call, first made in 2013, for merging the NDRC into the Ministry of Finance (MoF), giving the latter power over government finance, investment and state-owned assets. The move would end fragmented economic management, says Shen, giving the ‘super ministry’ an authority matching foreign counterparts. This time, Shen was echoed by representatives of both agencies, including the influential Jia Kang 贾康 MoF economist, raising the possibility the NDRC’s future will be on the agenda at the Central Economic Conference in December.

Following the outlawing of personal information encryption in June 2016, a new document, issued by Ministry of Public Security, Supreme People’s Procuratorate and Supreme People’s Court, authorises police access to all information stored online. Internet firms have no means to deny access or appeal to courts. The rules constitute illegal ‘joint self-authorisation’, says Tong Zhiwei 童之伟 constitutional scholar, calling on the NPC to repeal the document and censure the three agencies involved. The move goes far beyond Article 40 of the constitution, a clause which protects personal privacy from state intrusion, says Chen Jieren 陈杰人 legal commentator, yet again showing the constitution’s irrelevance. Some state media outlets also flagged privacy concerns.

Lawyers are again the focus of judicial reform. A prominent civil rights lawyer Xia Lin’s 夏霖 conviction was followed by revised Ministry of Justice regulations, ordering law firms to install internal Party units. These regulations ban lawyers from activism on pain of penalties applied to their firms. The move has drawn protest from lawyers and legal experts, who call it excessive, outdated and impractical. The regulations indicate how far China remains from the 2014 Fourth Plenum call to guarantee lawyers’ professional rights, says Xu Xin 徐昕 legal reform advocate. A parallel document initiating long-delayed reform to policing procedures may be intended as compensation.


new ‘Opinions’ make judiciary central to emerging social credit system

society

watching for

  • local plans connecting poverty alleviation and minimum welfare
  • internet+ government service system
  • points-based hukou for Nanjing

New ‘Opinions’ make the judiciary central to the nationwide social credit system for firms and individuals. The state calls for a nationwide, interagency effort to share information on a central platform, due to be finished by 2018. Penalties for those on the court-procured list of violators include restricting ability to work in food, pharma and real estate, and to travel abroad and access education, among others. China should look to Australia and South Korea, argue experts, which emphasise officials’ conduct and ethical standards in industry, personal privacy and mechanisms to recover credit, respectively.

The state plans to relocate 16 million people from impoverished areas to nearby townships, counties, or newly built districts near industrial parks. This will require 950 bn, according to NDRC, with low-cost, long-term loans also on offer. The relocated will be offered reskilling and other resettlement support, and basic urban social security, if moving to cities. The state should avoid creating conflict, says Xinhua, and listen to those affected. Villagers should keep original land use rights, says the article, while receiving sufficient rights at new sites.

Urbanisation has fallen behind schedule, says Xiaokang Caizhi; peasants are unwilling to exchange land rights for nebulous urban benefits. Unless hukou distinctions are abolished, ‘closing the urban-rural divide’, ‘improving fairness’ and ‘small-town urbanisation’ are empty phrases, argues Lu Hupeng 陆沪鹏 on Consensus Online. Hukou has divided urban and rural residents for decades, says Lu, damaging the countryside for the sake of urbanisation, industrialisation, and vested interests. Pushing rural residents to urban areas in a short period is unrealistic, says Chen Xiwen 陈锡文 former Central Rural Work Leading Group vice director, arguing the urban push does not excuse poor rural services.

Beijing municipality announced plans to abolish urban and rural hukou distinctions, following most other localities. Measures are needed to protect the rights of rural residents, says Zhang Yinghong 张英洪 Beijing Agricultural Research Centre, including integrating social service infrastructure and safeguarding land rights. The move will revolutionise land markets, as the next generation will not be allocated homestead or contract land, says columnist Ye Tan 叶檀, giving localities more sway. Abolition is primarily about population control, not integration, says Tang Liming 唐黎明 Anbound Consulting, predicting considerable resistance from rural hukou holders.


Ethiopia-Djibouti railway: ‘China Program’ in action

geopolitics

watching for

  • limited restoration of Consensus Online
  • aggregation of other initiatives under ‘China Program’
  • US policy re-geared for likely Clinton victory

In the last governance cp.positions, predictions of Western decline were openly questioned through the G20; Jin Canrong 金灿荣 foreign policy expert relished a tougher tone in China’s South China Sea backlash. The current affairs portal Consensus Online (www.21ccom.net) was shut down on National Day, 1 October 2016. Service may well be restored, but views expressing intellectual ‘soft resistance’, also noted by Jin Canrong, are likely to be further curtailed. The only other outlet consistently at odds with official rhetoric is the hyper-nationalist Global Times.

Increased pressure coincides with the rise of the buzzword, ’China Program’ (Zhongguo fang’an). Now widespread in the media, it was cited in Xi Jinping’s 习近平 celebration of Party history on 1 July 2016, and further presented to a global audience at the G20 Summit in Hangzhou in September. Aggregating a number of policies, it is expected to incorporate China Dream, Belt and Road, AIIB, and other initiatives. Problems with the newly opened Addis Ababa-Djibouti railway in East Africa are, for instance, said to be solved with the China Program. For Xi, the Program marks China’s renewed ‘cultural self-confidence’.

Western values are inimical to Chinese interests, according to the Program; there is nothing to be learned from them. Such claims do not escape scrutiny in the Sinosphere. ‘Geopolitically, the US was the major winner from the South China Sea (SCS) ruling’, claims Zheng Yongnian 郑永年, writing from much-berated Singapore, agreeing with criticism of ‘strategic overreach’ in foreign policy.

While hawkish Jin Yinan 金一南 China National Defence University Strategy Institute director demands Singapore be ‘made to pay’ for harming China’s interests, economists have offered a more inclusive image of the China-centric community. Distinct from Belt and Road but setting a foundation for it, the community would superimpose a ‘Sinitic’ value chain via FTAs and a customs union. Singapore, along with North and South Korea, Vietnam and others, are invited to concentrate trade and diplomacy within a Beijing-dominated space.


in the spotlight

Shen Jianguang 沈建光| Ruisui Securities chief economist

Previously at the European Central Bank and IMF, Shen formally advocates restructuring the economic regulatory framework. Since 2013, he has called for a simplified system that meets international norms. PBoC should take over from regulatory commissions on securities, banking and insurance, says Shen, to unify financial regulation, eventually becoming a real central bank responsible for overall monetary policy. NDRC ‘flexibility’ in approving investment projects, at odds with fiscal restraint, is a major source of overcapacity, overheating and mounting debt, he says. The solution is to put project certification and state-owned assets under the Ministry of Finance, argues Shen, creating a ‘super ministry’ to manage and overhaul the fiscal system as a whole.

Huang Yan 黄艳 | Ministry of Housing and Urban-Rural Development vice minister

The former head of Beijing Municipal Commission of Urban Planning, Huang wants a reform of urban planning in megacities. Comprehensive thinking is lacking, she argues, and boundaries between powers and duties are vague. Plans should be made at city rather than district level, she says, and approval procedures simplified to increase efficiency. Lamenting the gap between vision and implementation, Huang argues conceptual layout is often at odds with regulatory planning, which is in turn contradicted by site planning. Administrative and legal measures are needed, she says, to improve official and private sector compliance.

Jin Yinan 金一南 | PLA National Defence University Strategic Research Institute director

Attracted to ‘military operations other than war’, Jin often calls for ‘punishment’, ‘payback’ and ‘retaliation’, while avoiding explicit military threats. China would have to punish the US, he said in 2010, if it sold more arms to Taiwan. ‘Making Singapore pay the price’ for harming Chinese interests should not be restricted to attacking its public image and imposing sanctions, says Jin, but should also involve unspecified ‘measures’. These are needed to end bullying and humiliation of China by states like Vietnam and the Philippines, which he deems catspaws of the US.


in case you missed it…

cp.signals—domestic policy movement hospital quotas under the knife big green overcapacity machine cp.positions—audit of shifts across policy sectors economy: growth over reform, and more… governance: paying for reform, and more… cp.observer—monthly roundup september roundup: safe as houses august roundup: central-local fiscal rebalancing


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