watching for

  • Shenzhen plan to raise GP salaries
  • more measures targeting key unemployed groups and areas
  • pilots to integrate maternity and basic medical insurance to launch by June

Central doc no 1, issued 6 February 2016, is the key rural affairs policy document. In a major breakthrough in rural land reform, says 21st Century Business Herald, private capital can now invest in rural tourism and aged care projects via PPP, and peasants can sell contracted farmland or homestead land use rights to private businesses in these sectors. The state is clamping down on unregulated construction land transfers, according to Caixin. aiming to build an all-encompassing secondary land rights transfer platform by end 2018, covering information posting, contract signing and transaction supervision. The market has existed since the late 1980s, says Huang Xiaohu 黄小虎 China Land Surveying and Planning Institute researcher, but local governments, many holding the ‘right of first refusal’, have exploited the system, selling on rights for huge profit.

State Council is targeting major improvements to pharmaceutical production, supply and use, following National Health and Family Planning Commission (NHFPC) announcing in January 2016 it plans to roll out the two-receipt system nationally by end 2018. Related pilots for changes to salary systems in public hospitals and others for disease-based medical pricing will also expand. A 2015 plan to boost visits by appointment at tier-three hospitals has made some ground, according to National Business Daily, with NHFPC reporting 38.6 percent of visits in 2016 were made in this way.

Beijing aims to reduce its total construction land from 2,921 to 2,800 square kilometres by 2020, according to Cai Qi 蔡奇 Beijing mayor, an average decrease of 30 square kilometres per year, removing or relocating manufacturing enterprises, wholesale markets and logistics centres. The announcement comes as Caixin reports the municipality is also downsizing universities, reducing student quotas, and moving some campuses to outer areas, such as Tongzhou and Huairou, as well as Tianjin and Hebei. The local government has outlined a similar program for Beijing’s public hospitals, with a plan to move them to areas between the fifth and sixth rings roads already underway, though behind schedule.

two policemen monitoring online shopping, 1 January, Yinchuan, Ningxia


watching for

  • the cybersecurity review office becoming operational
  • state media shaming localities for misusing judicial staff
  • start of campaign against village clans

A pending new office under the Cyberspace Administration to preside over cybersecurity review alarms multinational companies, as they worry it will be yet another trade barrier to products and services. This is incorrect, says Xinhua, claiming the office, codified in the 2016 Cybersecurity Law, brings clarity and accountability to the censorship machine. The office’s reviews cannot be refused, however, adding legal cover to protectionist policies which have troubled foreign IT giants like Microsoft and Qualcomm.

Supreme People’s Court (SPC) outlawed practices that undercut judicial authority, in particular localities drafting court personnel for non-judicial, even illegal, activities. State media celebrates achieving this long-term goal as a major reform victory, warning local principals the judiciary only serves the law and is not some backup labour force to clean streets, woo investors, collect taxes or violate citizens’ property rights. The move is part of SPC efforts to promote public respect for judges and reduce threats to judges’ safety from disgruntled individuals who lose court cases.

Supreme People’s Procuratorate (SPP) has grabbed attention

  • issuing a document with the Ministry of Public Security and Ministry of Environmental Protection on fast-tracking police and prosecutors’ probe and prosecution of polluters
  • publishing 17 public interest lawsuits filed by Anhui prosecutors since December 2016 against local authorities for failing to regulate pollution and illegal resource extraction
  • backing up the SPC by publishing the forensic analysis of the Nie Shubin 聂树斌 case, signalling prosecutors will no longer take police evidence at face value, and supporting an SPP proposal to bring in prosecutors from other jurisdictions to examine cases when original criminal verdicts are likely wrong

Wang Yi and Rex Tillerson talk during meeting of G20 foreign ministers, 17 February


watching for

  • Russian denial that ‘deal’ with Trump harms China
  • Sino-US conciliation on the Korean crisis
  • further budgetary control on foreign aid, Belt and Road

A month into his presidency, Trump confirmed US support for the One China policy. Negating the position signalled by his phone call with Taiwan’s President Tsai Ing-Wen on 2 December 2016, this was a clear gift to Xi in a critical mid-term year.

The Party leader scored points not only for Trump’s reversal, but also for cool handling of what experts on all sides called unnecessary provocation. Writing on a meeting between Wang and Tillerson, Global Times proclaimed ‘The Sino-US “major alert” is over; dealing has commenced’, framing the article with a picture of the two leaders smiling and shaking hands. Calls persist in Washington for more freedom of navigation exercises in the South China Sea; one such was in motion this week. China warned against any challenge to its sovereignty.

The departure of US National Security advisor Michael Flynn added to questions he may have been brokering a deal with Russia. The development raises suspicions in Beijing about a ‘game of three kingdoms’, and deeper doubts about the security of Russian partnership. But a People’s Daily feature on S&T cooperation with Ukraine highlighted the latter’s Belt and Road credentials. Hyping the unlikely field of welding science, it reminded Moscow that Beijing has other options for building links with Europe.

More pressing, however, is the security dilemma of the Koreas. Yet another Pyongyang missile test, the assassination of Kim Jong-un’s half-brother in Malaysia, and a clean-up of President Park’s collusion with the Samsung chaebol combined to cast doubt on Beijing’s influence on the peninsula. Urging the US to drop its Cold War mentality has lost impact. Pursuant to UN Resolution 2321, China announced a year-long blockage of North Korean coal imports, effective 19 February.

Budgetary pressure on foreign policy is becoming clearer. President Xi’s call to subject China’s foreign aid to ‘optimised deployment’ neatly balanced the positive spin of commentary hailing the growing role of AIIB in the Belt and Road Initiative. The latter is on notice to upgrade its research, too dependent, according to Zhao Lei 赵磊 Central Party school professor, on library research rather than field surveys.

in the spotlight

Li Peilin 李培林 I CASS vice dean

A professor of sociology, Li writes on entrepreneurial organisation, social structure change and social stratification. Counterurbanisation complements urbanisation, says Li, with both narrowing the urban–rural gap. Those arguing it is irrelevant to a rapidly urbanising China, he says, underestimate the connections migrants maintain with their homelands, the rise of non-agricultural jobs in the countryside, and the growing interest in villages among urbanites. Rural tourism generated 440 bn in turnover in 2015, creating 6.3 million jobs, says Li, while villages and towns are setting up aged care facilities for migrant pensioners. Relocating urbanites have brought new life to villages in Yunnan, Guizhou, Sichuan, Hainan and Guangxi, he adds. To further encourage these trends, Li recommends cleaning up hollowed–out villages, providing equal services and infrastructure in rural and urban areas, preserving villages’ natural and cultural landscapes as they modernise, and doing more to encourage innovation and promote primary, secondary and tertiary sector integration.

Zhou Qiang 周强 I Supreme People’s Court (SPC) president and chief justice

A senior member of the Youth League faction, Zhou, seen by liberal scholars and lawyers as ‘one of us’, was appointed to the SPC in 2013. Zhou’s approach to judicial reform seeks to elevate the judiciary’s standing without invoking Western concepts the Party finds subversive. While repeatedly denouncing ‘judicial independence’ as anti-CCP, most recently on 14 January 2017, at the same time he champions a professional court system under the Party but independent from non-judicial individuals and institutions. His strategy has yielded a long list of reforms, most recently the ban on imposing non-judicial duties on court personnel. Yet, given his background, there is no guarantee his SPC record will be rewarded at the 19th Party Congress.

Wang Haiyun 王海运 I Senior Consultant, China Institute for International Strategy (CIIS)

Wang, a Major General in the military system and former military attaché to Russia, is a ‘reliably nationalistic commentator’, targeting US ‘attempts to stir a colour revolution’ in China and similar security issues. Gaining a particular reputation as a sharp critic of North Korea and the long-standing support extended it by Beijing, he is a major theorist of the ‘game of Three Kingdoms’ (China, Russia and the US).

in case you missed it…

cp.signals—domestic policy movement
everything old is NEV again
protecting private property

cp.positions—audit of shifts across policy sectors
economy: central doc no 1, and more…
governance: Trump appointments, re-ranking professionals, and more…—monthly roundup
january roundup: global glitches, Chinese fixes
december roundup: end of year conclaves reprise policy mantras

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