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. 119
Dear friends and colleagues,
I will be on holiday for the next two weeks, so next newsletter will not be until early 2017. 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.
Still waiting for a vision
The big news (underwater drones aside) is that the Central Economic Work Conference was held last week and set economic priorities for the new year.
Unfortunately, there’s not much in the 2017 agenda to get excited about. Official statements and comments by leading officials at times sound clear-headed, like when vice head of the Office of the Central Economic Leading Group Yang Weimin says that “sources [of the problems in the economy] are large structural imbalances….the fundamental reason [for these imbalances]… is that the market has yet to play the decisive role in resource allocation.” Nothing to disagree with there.
But plenty to disagree with when it comes to the government’s policy. The conference emphasized that “stability” will be the guiding principle of 2017, so don’t expect any changes to the status quo. Markets didn’t play the decisive role in 2016, and they won’t play the decisive role in 2017.
Supply-side reforms remain the priority, but they will continue to be carried out in a haphazard and uncoordinated manner. Under the banner of “stability” they will serve as measures to preserve the current state of affairs instead of forcing changes to upgrade economic efficiency. This is apparent when you look at the “deleveraging” portion of the agenda. Yang admits that actually reducing the overall rate of leverage in the near term is impossible. Furthermore, to the extent that it will be reduced, this will happen through debt-equity swaps and increased equity financing. Basically, under the banner of “preserving stability”, struggling companies will be given bailouts and officials will call it reform.
It’s clear that there is increasing anxiety about the economy. This year’s conference mentioned “problems” more than twice as many times as last year. Statements about controlling asset bubbles and guarding against systemic financial risks were prominent.
There is no question that many top policymakers (like Yang) are aware of these problems. But for now, with all energies focused on the 19th Party Congress, the decision appears to have been made to kick the can down the road for another year. Unfortunately, China’s long-term planners seem increasingly focused on the short-term.
Happy holidays!
| PBSC Week in Review | ||
| Xi Jinping
Party General Secretary; PRC President; |
Dec 14-16 | Xi chaired and spoke at the annual Central Economic Work Conference.
“Seeking progress while maintaining stability” will be the main theme. Proactive fiscal policy and “prudent and neutral” monetary policy for 2017.
|
| Chairman of Central Military Commission | Dec 13 | Xi sent a message of congratulations to Ghanaian President-elect Nana Akufo-Add.
|
| Xi sent a message of condolence to Turkish President Recep Tayyip Erdogan over the Dec 10 blasts in Istanbul.
|
||
| Xi sent a message of condolence to Egyptian President Abdel Fattah el-Sisi over a Dec 11 terrorist attack on a church in Egypt.
|
||
| Dec 12 | Xi met with attendees at a conference to honor model families across the nation.
Full text of his remarks (in Chinese).
|
|
| Li Keqiang
Premier |
Dec 14-16
|
Li attended and spoke at the annual Central Economic Work Conference. |
| Dec 15 | Li sent a congratulatory message to Paolo Gentiloni on his new role as Italian prime minister.
|
|
| Li sent a message to congratulate Uzbekistan’s new Prime Minister Abdulla Aripov.
|
||
| Dec 13 | Li sent a message of congratulations to Bill English on his new role as New Zealand Prime Minister.
|
|
| Li sent a message of condolence to Turkish Prime Minister Binali Yildirim over the Dec 10 blasts in Istanbul.
|
||
| Li sent a message of condolences to Egyptian Prime Minister Sherif Ismail over a Dec 11 terrorist attack at a church in Egypt.
|
||
| Dec 12 | Li met with Thailand First Deputy Prime Minister and Defense Minister Prawit Wongsuwan.
|
|
| Zhang Dejiang
Chair of the National People’s |
Dec 14-16 | Zhang attended the annual Central Economic Work Conference.
|
| Congress | Dec 12 | Zhang chaired a meeting of NPC chairpersons.
The meeting decided the next bimonthly session will be held December 19-25. The session will consider bills to review an e-commerce law, a revision to a water pollution law, the quota and election of national deputies for the 13th NPC, and a draft decision on temporary law adjustments during the reform of the military officers’ system. Lawmakers will also decide whether to ratify a criminal judicial assistance treaty between China and Malaysia and review a draft decision on convening the 12th NPC’s Fifth Session, as well as a report on the qualifications of certain NPC delegates.
|
| Yu Zhengsheng
Chair of the Chinese People’s |
Dec 14-16 | Yu attended the annual Central Economic Work Conference.
|
| Political Consultative Conference | Dec 13 | Yu met with a delegation from the Hong Kong Chiu Chow Chamber of Commerce.
|
| Dec 12 | Yu spoke at a seminar commemorating the 80th anniversary of the Xi’an incident.
Full text of his speech (in Chinese).
|
|
| Liu Yunshan
Head of Party Secretariat; Head |
Dec 14-16 | Liu attended the annual Central Economic Work Conference.
|
| of Propaganda | Dec 12 | Liu met with Vietnamese Secretary of the CPV Central Committee and head of the CPV Central Committee’s Organization Commission Pham Minh Chinh.
|
| Liu met with attendees at a conference to honor model families across the nation.
Liu spoke at the conference.
|
||
| Wang Qishan
Secretary of the Central Commission for |
Dec 14-16 | Wang attended the annual Central Economic Work Conference.
|
| Discipline Inspection | ||
| Zhang Gaoli
Executive Vice Premier |
Dec 14-16 | Zhang attended the annual Central Economic Work Conference.
|
| 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. You can find out more about Trey and CPW in this interview.
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.
|