watching for

  • debate in Party media on grassroots governance models
  • reason given for rescheduling provincial legislatures
  • judiciary and legal officials arguing for loosening political controls

better governance through stricter guidance

Deepened supervision of Party cadres and their conduct is now accompanied by tighter oversight of civil servants, as revisions to the Civil Service Law emphasise firmer control, including evaluations based on political requirements. Shortly after issuance of the new regulations, an authoritative commentary appeared in People’s Daily, arguing that revisions are meant to secure better policy outcomes by holding civil servants accountable—a sign that some officials were unhappy with the changes.

Clarifying the role of politics in the work of government officials extends to even stronger oversight of the judiciary and legal institutions. The Supreme People’s Court released more specific guidance to judges on how their internal decision-making should be conducted, while Ministry of Public Security issued new regulations broadening both the responsibilities of law enforcement and the legal protection they are entitled to in carrying out their duties. For its part, the Politburo defended political oversight of legal work, insisting that better, more modern governance would result from enhanced guidance and supervision.

Directives from Beijing do not seem to be resolving difficulties encountered by local governments. A survey in a Hunan city found that Party cadres were bearing heavy emotional burdens brought on by their workload, with no mechanisms to provide relief. In a Sichuan county, the problem was not too many responsibilities but too few positions had to be created so that rural cadres could be assigned actual work, because their qualifications did not match the needs of the region where they were assigned.

tags: accountability, personnel, judicial reform

in other developments…

‘Year of the Pig’ stamp suggests intent to scrap all birth limits


watching for

  • ‘Management measures on the Islamic pilgrimage to Mecca’ call for comment
  • influenza A (H1N1) prevention and control measures
  • stronger incentives to prevent housing market recession

holistic approach urged to birth, aging, gender, family and migration

Based on meagre Jan-Nov 2018 birth figures from Ningbo, Qingdao, Liaocheng and other cities, Southern Metropolis Weekly argues that the unconditional second-child policy has lost its vigour three years after enactment, with less than 15 million total births in 2018. Chinese Academy of Social Sciences’ (CASS) ‘Report on China’s population and labour’ projects a bleak scenario of negative population growth starting in 2027 should the total fertility rate remain below 1.6 after 2015. The elderly population (65+) is expected to grow 3.62 percent annually, accounting for 23.84 percent of the population by 2040; the old-age dependency ratio is expected to surpass child dependency in 2018, hitting 56 percent in 2032.

Declining fertility may be due to delayed marriage and falling numbers of women of childbearing age, says Huang Kuangshi 黄匡时 China Population and Development Research Centre. But voluntary childlessness is also a factor, due mainly to swelling education costs, housing prices and household debt, concludes a report by Evergrand Research Institutes. A third problem is work-family conflict, argue Ji Yingchun 计迎春 Shanghai University and Zheng Zhenzhen 郑真真 CASS Institute of Population and Labour Economics, as a result of both mishandled maternal welfare policies and archaic patriarchal values affecting gender and family roles. They recommend such holistic approaches to the issue as state-sponsored early-childhood care services, flexible working, gender equality in the workplace, greater male engagement in house and care work, maternal insurance, maternal leave and cash incentives.

Baby gloom and population aging are also changing the dynamics of urbanisation and internal migration. National Health Commission (NHC) reports that the rural-to-urban migrant population peaked in 2014 (253 million) and continues to drop, but the elderly migrant population is growing at 6.6 percent annually, reaching some 13.04 million in 2015. Industrial transfers also gave rise to north-to-south and coastal-to-inland migration flows, according to Yin Deting 尹德挺 Beijing Administration Institute.

Falling numbers of working-age (15-65) migrants has provoked debate over lifting birth limits, extending the retirement age and scrapping residence registration (hukou) restrictions. Li Jianmin 李建民 Nankai University School of Economics argues that hukou hinders the accumulation of demographic dividend by perpetuating the urban-rural dichotomy, lowering labour force participation among first-generation migrants and harming second-generation development. Zhou Tianyong 周天勇 Central Party School Institute of International Strategic Studies advocates equal treatment of hukou holders and permanent residents in access to urban housing, infrastructure and public services. Nie Huihua 聂辉华 Renmin University School of Economics worries that unlimited migration will exceed the carrying capacity of urban areas, arguing instead for first removing arbitrary preferential treatment of cities in the administrative hierarchy before lifting barriers to migration like hukou.

tags: demographics, family planning, migrants, hukou, aged care, pension

in other developments…

extended US–China trade talk end with positive notes from both sides


watching for

  • policies boosting service trade
  • results of high-level trade negotiations following Liu He’s trip to Washington in late January
  • joint action plan from US, EU and Japan on technology export controls

Beijing makes conciliatory gestures

Approaching mid-level trade talks with the US, Beijing made some conciliatory gestures: strengthening intellectual property rights (IPR) protection and calls on Chinese multinationals to observe international norms. From 1 January 2019, the Supreme People’s Court (SPC) will handle technical IP-related cases for consistency of adjudication, equal in its effect to the setting up of a national-level IPR appeal mechanism. Rulings were previously meted out by local high courts. In addition, proposed revisions to the Patent Law are under NPC review, effective June 2019. Measures include harsher punishment for infringement, improvements to patent-related public service systems, and longer protection periods for appearance and design patents. Facing stricter technology export control in the US, the NPC prioritised the Export Control Law in its legislative plan, which offers consulting services through the state organ to domestic companies and encourages them to set up internal export compliance mechanisms.

Weak trade data from major exporters in East Asia including South Korea, Japan and China suggests slowing global demand and adds urgency for China to reach terms with the US. Despite Japan’s desire to focus bilateral trade talks on goods only, the US Trade Representative listed 22 areas with specific negotiation objectives, widening the range of topics to services and exchange rates. The China–US talks, extended to a third day, ended with positive notes on each side, although with few details beyond China’s willingness to buy more. On the last day of talks the fifth trilateral meeting of trade ministers of the US, EU and Japan released a joint statement, featuring export control and investment review as tools to combat forced IP transfer. The timing of the release indicates that it might serve as leverage for the US, as trilateral enforcement of export controls would put Chinese tech development under siege.

Albeit a long-term strategy, the government’s hastened moves on import expansion and consumption upgrade also seem like a hedge against continuing trade underperformance. In addition to tax cuts, Beijing has released a series of policies encouraging imports of consumer goods and buoying e-commerce giants’ overseas expansion. The effort to upgrade comprehensive bonded zones is also in the same vein.

tags: technology transfers, research and development, standards and conformity assessment, cybersecurity, trade facilitation, trade barriers, duties and tariffs

in other developments…

Xi and Kim meet in Beijing


watching for

  • response to announced UK military base near South China Sea
  • reaction to elections in DRC, a supplier of minerals for China’s NEVs
  • reaction to Pompeo’s Cairo claim to be a ‘force for good’ in the Middle East

Trump’s loss, Xi’s gain

Invited by Xi Jinping, Kim Jong-un visited Beijing on 8 January, threatening days earlier to pursue other avenues on denuclearisation should the US fail to reconsider its sanctions regime. This, claim analysts, was a clear signal to the US that North Korea is shifting its view of nuclear negotiation progress. Kim’s visit conveys a lack of confidence in US–North Korea relations, writes Zhao Tong 赵通 Carnegie–Tsinghua Global Policy Centre fellow, and an increasing reliance on China over the US or South Korea. North Korea is playing to its default stance: maintaining strategic distance from both superpowers, while taking advantage of their rivalry. North Korea’s renewed closeness to China is intended to counter obstacles it faces in negotiations with the US.

As removing the nuclear threat is the US’s longstanding primary strategic goal in Northeast Asia, short-term progress in negotiations is unlikely, writes Zou Zhibo邹治波 CASS Institute of World Economic and Political Affairs. While the short-term outlook is not optimistic, the constructive role of other countries in Northeast Asia offers grounds for hope, especially South Korea’s firm stance opposing nuclear weapons.

While some analysts hail renewed warmth in China–North Korea ties, others remain cautious. It is essential for China and South Korea to establish crisis management mechanisms to handle disagreements on security issues, manage potential crises andjointly tackle regional security challenges, argues Zhang Tuosheng 张沱生 Peking University Institute of International and Strategic Studies. The potential emergence of US–North Korea conflict should be countered by strong cooperation between South Korea and China to maintain stability in the region.

tags: North East Asia, US/Canada, foreign policy rhetoric

in other developments…

  • Taiwanese President Tsai Ing-wen said that she would welcome British bases in the South China Sea following remarks from UK Defence Secretary Williamson that the UK would establish a range of military bases across Southeast Asia. Tsai’s comments were made days after Xi affirmed the strength of cross-strait relations
  • reports confirmed China–Pakistan military cooperation, which Colonel Yang Lei 杨磊 says increases both mutual trust in military affairs between China and Pakistan and friendship between the two armies. Cooperation is intended in part to address terrorism in the region, a security risk for BRI’s flagship project, the China–Pakistan Economic Corridor


Deng Xiuming 邓修明 | Tianjin Municipal Standing Committee, Municipal Discipline Commission and Supervision Committee Secretary

A former middle school teacher and Sichuan People’s Court law clerk, Deng’s diverse background has nonetheless produced views that are consistent and often strident. He argues that in order to win an overwhelming victory against corruption, the political environment must be purified. Deng insists on the jettisoning of those who are dishonest or disloyal to the Party, and fighting against all acts that endanger its authority. Formalism and bureaucracy, he notes, prevent realisation of major policies and principles by putting more emphasis on talking than doing. Deng urges a protracted war against mediocrity, laziness, individualism and inaction, and strengthening cadres’ political, ideological and emotional identification with General Secretary Xi Jinping.

Hu Zhan 胡湛 | Fudan University Centre for Population and Development Policy Studies research fellow

Alleged to be the first PhD in psycho-informatics engineering in China, Hu focuses on interdisciplinary research in aging, family changes, social mentality and social policy. Hu argues that population policies and institutional reforms should respond to demographic changes, rather than the opposite. China has geared its society towards one-child families for the past three decades, says Hu, arguing that it is high time Beijing change its way of thinking and give fertility autonomy back to the people. Hu stresses the importance of childraising as well as childbearing, and the quality of human capital as well as population size, in order to cope with future changes in the labour market.

Huo Jianguo 霍建国 | China Society for World Trade Organisation Studies vice president

The concept of ‘macro-commerce’, first proposed at the national commerce working conference in late 2018, calls, says Huo, for an awareness of the full picture of the national economy. Under this concept, focuses of commerce development stretches beyond trade, FDI, and ODI, examining closely their relations with employment, fairness in the domestic competition and international development environments. Aspects in which work on ‘macro-commerce’ should focus in 2019 are, says Huo, balance between an export-oriented economy, attracting foreign investment and deepening domestic reform, as well as between import expansion and export stabilisation.

Zou Zhibo 邹治波 | CASS Institute of World Economic and Political Affairs senior fellow and deputy director

An expert on nuclear and missile technologies, Zou is a nuclear strategy and arms control expert at the Ministry of Defence, among other advisory roles. He now researches Asia Pacific security. Zou asserts that the strategic pattern and national strategies of China, Russia, and the US will remain unchanged long-term by the Trump presidency. Denuclearisation on the Korean peninsula remains the core strategic objective of the US in Northeast Asia, regardless of fluctuations in Trump’s foreign policy objectives. Long-standing principles in American foreign policy drive this desire, making true compromise and progress on the Korean peninsula unlikely.

in case you missed it…

cp.signals—domestic policy movement
ag insurance covers new ground
anti-corruption: success and stalemate

cp.positions—audit of shifts across policy sectors
economy: MIIT work conference and more…
governance: Huawei dispute and more…—monthly roundup
december: CEWC and more…
november: summit season