Subscribe to the weekly email to get CPW in your inbox days before it is posted to the web. Just send an email to info@chinapoliticsweekly.com.
Download this week’s newsletter as a PDF here: CPW No. 33
Dear friends and colleagues,
This week’s newsletter below. Your comments and feedback are always welcome. Old issues are always available at www.chinapoliticsweekly.com. Sign up or unsubscribe by sending an email to info@chinapoliticsweekly.com.
In charge
Xi Jinping attended the work conference on political work in the military held in Gutian, Fujian. Gutian is famous for being the place where in 1929 Mao Zedong established definitively that the army would be subservient to the Party. 85 years on, the message from Xi is exactly the same: “The Party commands the gun”.
Xi has worked hard to ensure control over the military since taking over as Party general secretary and chairman of the Central Military Commission two years ago. This was an urgent task as Xi’s predecessor Hu Jintao was thought to not command full support from several quarters of the military.
Xi seems to have succeeded where Hu failed. Xi’s revolutionary heritage, experience working with the military throughout his career and strong stance with regards to territorial disputes in the East and South China Seas earn Xi respect among those in uniform.
And Xi is clear that he will come after those that oppose him. Xi exhorted officers to carefully study the case of Xu Caihou- the former CMC vice chairman and general who has been one of the biggest “tigers” caught in Xi’s anti-corruption drive- and was quoted as saying, “We’ll never slacken the efforts to deepen the fight against corruption in the army”.
Reasserting Party control over the military is a positive development for regional stability. It reduces the chance that hardliners within the military could bring China into conflict of their own accord.
In the long run, cleaning up corruption in the PLA will create a stronger, more effective military. The implications of this are more ambivalent. A China more confident in its military capabilities may be more inclined to put them to use.
Let’s get negative
After Gutian, Xi headed to Pingtan, a large island off the coast of Fujian across the strait from Taiwan. The visit follows one by Vice Premier Zhang Gaoli this summer and would seem to show that the central government is fully behind Pingtan’s reforms to attract foreign investment.
Pingtan’s Comprehensive Pilot Zone (CPZ) instituted a negative list approach to foreign investment in June 2014. It became the second locality to do so after the Shanghai Free Trade Zone. Considering the high-level attention that the CPZ has received, it would not be surprising to see other local governments instituting negative lists as well. The Chengdu government saw the writing on the wall and introduced its own negative list in August.
As more governments institute a negative list approach to foreign investment, it should create a competitive dynamic in which different cities seek to “out-reform” each other. This will gradually help to open more sectors to foreign investment. And as more and more governments successfully implement negative lists, it will give the central government more confidence to go farther in its bilateral investment treaty (BIT) negotiations with the US and EU (in which China has adopted a negative list approach).
Baby steps
The State Council meeting on October 29 said that it would open the bank card-clearing business to foreign and private businesses. It’s a small measure, and there is a lot of uncertainty as to exactly how wide the opening will be and how quickly it will be implemented. But it’s another clear, if tiny step in the right direction with regards to structural economic reforms.
Officials got to get paid
During the six-day session of the NPC Standing Committee held last week, the Internal and Judicial Affairs Committee delivered a report on improving recruitment and appraisals of civil servants. Importantly, the report stressed that civil servant incomes have not risen since 2006, despite high economic growth and considerable price inflation.
Addressing the low pay of officials is an important part of stamping out corruption in the government and Party. A big reason that official corruption is so low in Singapore (viewed as a model of one-party governance by officials and academics in China) is because government salaries are so high. Well compensated officials have fewer incentives to take bribes or otherwise extract rents from constituents.
Addressing corruption in China is a very complex issue because it is engrained in every level of society. Raising officials’ salaries will not solve the problem, but it will help.
| About CPW
China Politics Weekly aims to keep business leaders, investors, diplomats, scholars and other China hands up to date on important trends in China. It is produced by Trey McArver, a London-based consultant providing advice and intelligence to firms and investors engaged in China and the region.
Want to help? Please tell us how we can make this newsletter more useful to you. Feedback on both form and content are always welcome, as are suggestions for topics to be covered. Please contact us at info@chinapoliticsweekly.com. We look forward to hearing from you.
Want more? We offer tailored briefings and research reports for senior management who need to know more about China. Our network of analysts and associates have experience across a range of sectors. Please email us to discuss your needs and get a quote.
|