geopolitics

watching for

  • friction with India and Japan on hold during Trump’s visit
  • warming up the ‘community of shared destiny for humankind’
  • new North Korean missile tests

preparing for Trump’s art of the deal
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 latter’s visit commencing 8 November 2017 provides an early test of ‘major power diplomacy’. Toughening North Korea sanctions reflects changes in Beijing’s strategic thinking, argues Deng Yuwen 邓聿文 Charhar Institute, warning Pyongyang against further tests while minimising US criticism of lax enforcement. Relations with Japan may warm following Abe’s strong showing in the lower House elections; China must reshape its understanding of Japan, a rival but not necessarily an enemy, argues Zhu Feng 朱锋 Nanjing University. Amendment of the constitution is now a consensus in Japan’s political class, notes Liang Yunxiang 梁云祥 Peking University, but China need not be overly concerned, given the nation’s political constraints on excessive military spending.

Sino–US relations
key commentary
a new balance in Sino–US relations

Northeast Asia
key commentary
China getting tougher on North Korea
Zhu Feng: China must reshape its understanding of Japan
Abe’s reappointment should not worry China
further reading
cp.signal: debating North Korea

maritime governance
key commentary
US interpretation of UNCLOS is erroneous
maritime power more a matter of economy than ecology
further reading
China: a new great maritime power preserving core interests

other
key commentary
Sun Zhuangzhi analysis of security situation in Central Asia
China remains in the primary stage of socialism
foreign policy goal: community of shared destiny
a strong China will look at the world differently


Chinese students at their graduation ceremony, Columbia University

society

watching for

  • favourable policies for financing rental housing
  • streamlined approval for imported pharmaceutical and medical devices
  • poverty alleviation campaigns

graduates increasingly choosing China
There is much media hype about overseas graduates choosing to come back. Despite the stereotype that they join foreign companies and earn well above their home-trained counterparts, their salaries are severely polarised; annual earnings of some are in the tens of thousands while some make over a million. Overseas education rarely ensures inexperienced junior returnees an advantage when they compete with domestic graduates. Top returnees with unique skills and years of work experience abroad are nonetheless well paid. This cohort are increasingly returning as aspiring entrepreneurs, taking advantage of state initiatives that target this group. Startups launched by overseas returnees are favoured by investors over their housebound cousins. More than half of overseas returnees join Chinese private firms, above all Alibaba, Tencent and Baidu, favouring industries like IT, finance and education and training.

education
key moves
domestic private companies take more than half of overseas returnees
entrepreneurship: an increasing option for overseas returnees
startups by overseas returnees favoured by investors
salaries for overseas returnees polarised
key commentary
Xiong Bingqi: why do most overseas students come back?


Beijing Supervision Commission head Zhang Shuofu sworn into office in January 2017

governance

watching for

  • more penetration of Party committees in private enterprises
  • tightening internet censorship
  • release of a new Competition Law

new anti-corruption apparatus taking shape
More details emerged about the National Supervision Commission, an all-encompassing state body set up to reinvigorate and routinise the anti-corruption campaign. First piloted in Beijing, Shanxi and Zhejiang in 2016, the system will be rolled out nationwide at end 2017. Covering all but grassroots administrative levels, it aggregates the powers of the Procuratorate anti-corruption offices and the Ministry of Supervision, holding power over all public employees regardless of their Party affiliation. Its members, elected by the NPC from veteran anti-corruption agency workers, will enforce the Supervision Law, where their investigation methods are laid out. In view of its extra-judicial status, the Supervision Commission will need to acquire well-defined legal procedures, working with the procuratorates and courts. It will not replace the Central Commission for Discipline Inspection (CCDI), contends Yang Xiaodu 杨晓渡 CCDI vice Party secretary, but work in conjunction with it.

stepping up online news censorship
key moves
correct political values for journalists and online celebrities
online news apps must not radicalise public opinion
further reading
Party keen to expand presence in tech companies
internet group messaging service management regulation

post-Congress personnel reshuffle
key moves
Ding Xuexiang now president’s chief of staff
Li Xi appointed Guangdong party secretary
Chen Xi appointed Central Organisation Department director
New Party propaganda chief, Huang Kunming
further reading
first post-Party Congress Politburo meeting further moves away from collective leadership


new China National Convention and Exhibition Centre in Shanghai, where the first China International Import Expo will be held from 5-10 Nov 2018

trade policy

 

watching for

  • steps towards finalising RCEP at ministerial meeting
  • Trump flattered into a trade compromise
  • new e-Commerce Law draft

global trade enters a new era
Freer trade was a theme at the Party Congress, 18–21 October 2017. Advisors called for taking a lead role in bolstering the WTO. China Import Expo, a new platform to boost global trade, will be held in Shanghai in November 2018. Premier Li Keqiang and Russian PM Medvedev signed a joint declaration of closer bilateral trade ties. Global trade has entered a new growth cycle, conjectures Su Qingyi 苏庆义 CASS researcher, despite such risks as China–US trade friction and international power struggles. Trump’s visit from 8 November is mooted to result in a massive Sinopec investment worth US$7 bn and create a wholly foreign-owned Tesla factory in Shanghai FTZ. Urging that the time is ripe for a boost in trade and investment with the US, Wei Jianguo 魏建国 MofCOM former vice minister predicts US will replace EU as China’s biggest trade partner within two years. The US decision to persist in treating China as a non-market economy and its preliminary ruling in the aluminium foil anti-dumping investigation hint at a bumpy road ahead; trade tensions and disputes must be dealt with but should not affect the overall trade ties, says China Economic Times.

key moves
replicating experience in building pilot zones for a new open economic system
key commentary
global trade may have entered new growth cycle
WTO need leadership
Long Guoqiang: China can open its door a bit further
Wei Jianguo: trade deficit likely this year
anti-monopoly measures key to modernising economy in ‘New Era’

ChinaUS trade relations
key moves
Tesla to set up Shanghai factory
Trump visit will seal two big deals: Sinopec investment and Tesla factory
key commentary
China and US should cooperate more in trade and investment
trade deficit has greatly benefitted the US
‘Trump trap’ should alarm all countries
MofCOM comments on US treating China as non-market economy
trade disputes not damaging to China–US trade relations

e-trade and global logistics
key moves
draft of e-commerce law submitted to NPC for second review
key commentary
AQSIQ’s new regulations are good news for businesses in foreign trade
increasing variety of imported maternity products
wine imports growing 10 percent annually

further reading
Sinochem has set an eye on Chilean lithium tycoon SQM


profiles

Yang Jiechi 杨洁篪 | State Councillor Foreign Affairs and Politburo member

Just a year ago, Yang did not rank as a Xi-team insider, with 30 Party members ranked above him. With his elevation to the Politburo at the 19th Party Congress, this is clearly no longer the case, his promotion serving to elevate foreign affairs as a whole. Yang sent an early signal of the importance of foreign policy to Xi’s legacy claims, lauding ‘Xi Jinping thought on foreign relations’ in a July 2017 essay in Party ideology platform Qiushi. His warm relations with the Bush family date from at least as far back as his appointment as ambassador to Washington in 2004. Also important is his crafting of ‘new-style major power relations’, a policy gambit that the Obama administration refused to accept, but eventually paid off with Secretary of State Tillerson’s verbal tribute to it at an early 2017 visit to Beijing. He played a major role in negotiating the resolution of the Doklam standoff with India. Warmth aside, Yang has a hard-line nationalist reputation following his confrontation with Singapore’s Foreign Minister at an ASEAN summit in 2010 over Singapore’s support for the Obama’s South China Sea policy. ‘China is a big country and other countries are small countries’, he stated, ‘and that’s just a fact’.

Xiong Bingqi 熊丙奇 | 21st Century Education Research Institute vice director

A champion of university autonomy, Xiong was named education commentator of the year in 2009 and again in 2011. He made waves by blowing the whistle on higher education scandals in the early 2000s. Studying abroad is no longer an elite privilege, he commented recently, but is moving within reach of ordinary people. The best way to judge its value, however, is to examine how many top graduates are returning, Xiong says. Much to its chagrin, China leads the world in losing its best talent to other countries.

Li Qiang 李强 | Shanghai Party Secretary

Former party chief of Jiangsu, Li was appointed Shanghai Party secretary at the 19th Party Congress, his predecessor Han Zheng having been elevated to the Politburo Standing Committee. A liberal economic reformer and Xi ally, Li is behind key initiatives such as developing feature towns to boost the rural economy, and the trial of negative lists in foreign trade. In Shanghai he is tasked with promoting the city’s profile as an international financial and trading hub by, for example, touting its newly opened, Hong Kong-inspired free-trade port.

Su Qingyi 苏庆义 | China Academy of Social Sciences (CASS) Global Economy and Politics Research Institute

Veteran student of multilateral trade at CASS, Su posits a looming ‘Trump trap’. US trade partners are led astray by this phantasm that tempts them to replicate protectionist regulations and other stances that act against multilateralism. The recovery of global trade, Su argues more positively, is due to global economic growth—3.6 percent by IMF data—and increased trade elasticity. Due to the base period effect, Su explains, trade elasticity may fail to increase as the base of trade goes up, making it unclear whether or not global trade has entered a new growth cycle.[/people]