Archive for ‘Reform’

21/03/2014

China Wants Its People in the Cities – Reuters

From: http://www.businessweek.com/articles/2014-03-20/china-wants-its-people-in-the-cities

Thirty-five years ago, when paramount leader Deng Xiaoping launched gaige kaifang, or “reform and opening,” China was a much more agricultural country, with less than a fifth of its people living in cities. Since then hundreds of millions of rural residents have left the countryside, many seeking jobs in the export-oriented factories and construction sites that Deng’s policy promoted.

Commercial and residential buildings stand in the Luohu district of Shenzhen, China, on Dec. 18, 2013 In 1978 there were no Chinese cities with more than 10 million people and only two with 5 million to 10 million; by 2010, six cities had more than 10 million and 10 had from 5 million to 10 million. By the following year, a majority of Chinese were living in urban areas for the first time in the country’s history.

Now urbanization has been designated a national priority and is expected to occur even more rapidly. On March 16, Premier Li Keqiang’s State Council and the central committee of the Communist Party released the “National New-type Urbanization Plan (2014-2020),” which sets clear targets: By 2020 the country will have 60 percent of its people living in cities, up from 53.7 percent now.

What’s the ultimate aim of creating a much more urban country? Simply put, all those new, more free-spending urbanites are expected to help drive a more vibrant economy, helping wean China off its present reliance on unsustainable investment-heavy growth. “Domestic demand is the fundamental impetus for China’s development, and the greatest potential for expanding domestic demand lies in urbanization,” the plan says.

To get there, China’s policymakers know they have to loosen the restrictive hukou, the household registration policy that today keeps many Chinese migrants second-class urban residents. China will ensure that the proportion of those who live in the cities with full urban hukou, which provides better access to education, health care, and pensions, will rise from last year’s level of 35.7 percent of city dwellers to 45 percent by 2020. That means 100 million rural migrant workers, out of a total 270 million today, will have to be given urban household registration.

To prepare for the new masses, China knows it must vastly expand urban infrastructure. The plan calls for ensuring that expressways and railways link all cities with more than 200,000 people by 2020; high-speed rail is expected to link cities with more than a half million by then. Civil aviation will expand to be available to 90 percent of the population.

Access to affordable housing projects funded by the government is also expected to rise substantially. The target is to provide social housing (roughly analogous to public housing in the U.S.) to 23 percent of the urban populace by 2020; that’s up from an estimated 14.3 percent last year, according to Tao Wang, China economist at UBS Securities (UBS) in Hong Kong. That means providing social housing for an additional 90 million people, amounting to about 30 million units, over the next seven years, Wang writes in a March 18 report.

The urbanization plan appears to face several big challenges. First, the government wants to maintain restrictions on migration to China’s biggest cities, which also happen to be its most popular. Instead, the plan calls for liberalizing migration to small and midsize cities, or those with less than 5 million. Whether migrants will willingly flock to designated smaller cities, rather than the megacities including Beijing, Shanghai, Guangzhou, and Shenzhen, is an unanswered question.

Another obstacle to faster urbanization is that the plan doesn’t propose how to reform China’s decades-old land tenure system. Changing the system could allow farmers more freedom to mortgage, rent, or sell their land.

Finally, one of the most daunting problems is figuring out how to pay for implementing the ambitious urbanization targets. The cost of rolling out a much more extensive social welfare network will be substantial (today, most Chinese in the countryside have far lower levels of medical and pension coverage, as well as far inferior schools); building the new urban infrastructure will also be expensive.

 

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09/03/2014

* With legal reforms, China wants less interfering in cases, fewer death penalty crimes | Reuters

China has curtailed the power of the ruling Communist Party’s Political and Legal Committee, a secretive body overseeing the security services, to interfere in most legal cases, scholars with knowledge of the situation said – a significant reform at a time of public discontent over miscarriages of justice.

Zhou Qiang, President of China's Supreme People's Court, attends National People's Congress (NPC) in Beijing, March 7, 2013. REUTERS/Stringer

The move, which has not been made public by the party but has been announced in internal meetings, would clip the wings of the party’s highest authority on judicial and security matters.

Interference from the committee has led to many wrongful convictions, many of which have been widely reported in the press and even highlighted by President Xi Jinping as an issue that needs to be urgently addressed.

Part of a package of legal reforms, the move signals a willingness by Xi’s government to reform its court system as long as it doesn’t threaten the party’s overall control.

China’s highest court, the Supreme People’s Court, will delivers its work report to parliament on Monday, which could detail some of these reforms.

But the party would still have final say over politically sensitive cases such as those involving ethnic issues and senior politicians – like the disgraced former Chongqing party chief Bo Xilai, who was last year found guilty of bribery, corruption and abuse of power, and jailed for life – and would use the courts to convict citizens who challenge its authority.

via With legal reforms, China wants less interfering in cases, fewer death penalty crimes | Reuters.

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05/03/2014

How Committed Is China to Reform? A Tip From ‘The Old Perfessor’ – China Real Time Report – WSJ

One of the most important questions in the global economy is the commitment to reform by China’s new leaders. Are they more reform-oriented than the last crew, who talked a lot about economic reform but often didn’t carry through?

China Real Time did a quick analysis based on the philosophy of Casey Stengel, the garrulous former manager of the New York Yankees and Mets known by the nickname “The Old Perfessor.” As Stengel often said, “You can look it up.” So we did.

In his just-delivered 2014 work report, Premier Li Keqiang, used the word “reform” 84 times in his lengthy address.  Last year, former Premier Wen Jiabao used “reform” a mere 51 times.

“Transformation?” Mr. Li, 17; Mr. Wen, 5.

What would Mr. Li like to reform? Among many other things: socialism, markets, government, agriculture, science, investment, taxes, finance and schools.

And what would he transform? Industry and foreign trade mostly.

It won’t be easy to do all this, Mr. Li warned:  “China’s reform has entered a critical stage and a deep water zone,” he told delegates to China’s rubber-stamp parliament, the National People’s Congress. “We  must rely fully on the people, break mental shackles and vested interests with great determination.”

Or as  Mr. Stengel reportedly said: “Without losers, where would the winners be?”

via How Committed Is China to Reform? A Tip From ‘The Old Perfessor’ – China Real Time Report – WSJ.

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05/03/2014

* China to ‘declare war’ on pollution, premier says | Reuters

China is to “declare war” on pollution, Premier Li Keqiang said on Wednesday at the opening of the annual meeting of parliament, with the government unveiling detailed measures to tackle what has become a hot-button social issue.

Chinese Premier Li Keqiang gives an address during a news conference with French Prime Minister Jean-Marc Ayrault (not pictured) in the Great Hall of the People in Beijing December 6, 2013 file photo. REUTERS/Mark Ralston/Pool

It is not uncommon for air pollution in parts of China to breach levels considered by some experts to be hazardous. That has drawn much public ire and is a worry for the government, which fears any discontent that might compromise stability.

“We will resolutely declare war against pollution as we declared war against poverty,” Li told the almost 3,000 delegates to the country’s largely rubber-stamp legislature in a wide-ranging address carried live on state television.

Curbing pollution has become a key part of efforts to upgrade the economy, shift the focus away from heavy industry and tackle the perennial problem of overcapacity, with Li describing smog as “nature’s red-light warning against inefficient and blind development”.

“This is an acknowledgement at the highest level that there is a crisis,” said Craig Hart, expert on Chinese environmental policy and associate professor at China’s Renmin University.

“Their approach is going to have to be pro-economy. I think they will pump money into upgrading plants. This could be another green stimulus although it is not being packaged that way.”

China has published a series of policies and plans aimed at addressing environmental problems but it has long struggled to bring big polluting industries and growth-obsessed local governments to heel.

Li said efforts would focus first on reducing hazardous particulate matter known as PM 2.5 and PM 10 and would also be aimed at eliminating outdated energy producers and industrial plants, the source of much air pollution.

China will cut outdated steel production capacity by a total of 27 million tonnes this year, slash cement production by 42 million tonnes, and also shut down 50,000 small coal-fired furnaces across the country, Li said.

The 27 million tonnes of steel, equivalent to Italy’s production capacity, amounts to less than 2.5 percent of China’s total, and industry officials have warned that plants with another 30 million tonnes of annual output went into construction last year.

The targeted cement closures amount to less than 2 percent of last year’s total production.

The battle against pollution will also be waged via reforms in energy pricing to boost non-fossil fuel power. Li promised change in “the way energy is consumed and produced” through the development of nuclear and renewables, the deployment of smart power transmission grids, and the promotion of green and low-carbon technology.

The National Development and Reform Commission (NDRC), the country’s economic planner, said in its report that new guidelines would be issued on relocating key industries away from urban centers to help tackle smog.

via China to ‘declare war’ on pollution, premier says | Reuters.

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05/03/2014

* China signals focus on reforms and leaner, cleaner growth | Reuters

China sent its strongest signal yet that its days of chasing breakneck economic growth were over, promising to wage a “war” on pollution and reduce the pace of investment to a decade-low as it pursues more sustainable expansion.

An attendant serves tea for China's President Xi Jinping during the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, March 5, 2014. REUTERS-Jason Lee

In a State of the Union style address to an annual parliament meeting that began on Wednesday, Premier Li Keqiang said China aimed to expand its economy by 7.5 percent this year, the highest among the world’s major powers, although he stressed that growth would not get in the way of reforms.

In carefully crafted language that suggested Beijing had thought hard about leaving the forecast unchanged from last year, Li said the world’s second-largest economy will pursue reforms stretching from finance to the environment, even as it seeks to create jobs and wealth.

After 30 years of red-hot double-digit growth that has lifted millions out of poverty but also polluted the country’s air and water and saddled the nation with ominous debt levels, China wants to change tack and rebalance its economy.

“Reform is the top priority for the government,” Li told around 3,000 hand-picked delegates in his first parliamentary address in a cavernous meeting hall in central Beijing.

“We must have the mettle to fight on and break mental shackles to deepen reforms on all fronts.”

Idle factories will be shut, private investment encouraged, government red-tape cut and work on a new environmental protection tax speeded up to create a greener economy powered by consumption rather than investment, Li said.

via China signals focus on reforms and leaner, cleaner growth | Reuters.

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10/01/2014

Urban renewal (1): New frontiers | The Economist

THE furniture market in Foshan claims to be the biggest in the world. It boasts a bewildering mix of things to sit on, sleep in and eat at. One shop, named the “Louvre”, offers a range of styles from neoclassical to postmodern, which an assistant defines as a cross between European and modern, suitable for “successful people”.

The market, which sprawls over 3m square metres (32m square feet), showcases the manufacturing powers of Foshan, a city of 7m people in the southern province of Guangdong. The city is an archipelago of industrial clusters, dedicated to furniture, textiles, appliances, ceramics and the equipment required to make them. These clusters have produced some of China’s most successful private firms, such as Midea, a maker of household appliances, which began as a bottle-lid workshop, and now employs 135,000 people, generating over $16 billion in revenue in 2012.

Many economists worry that China will succumb to a “middle-income trap”, failing to make the jump from an early stage of growth, based on cheap labour and brute capital accumulation, to a more sophisticated stage, based on educated workers and improvements in productivity. But no economy, let alone one the size of China’s, moves in lockstep from one growth model to another. Some regions always outpace others. Provinces like Gansu, in China’s north-west, are still struggling to wean themselves off state-owned mines and smokestacks (see article). Other parts of China’s economy are already comfortably high-income, according to the World Bank’s definition. For example, Foshan’s GDP per head was almost $15,000 in 2012, higher than in some member states of the European Union.

Foshan best represents China’s “emerging economic frontier”, according to the Fung Global Institute (FGI), a think-tank in Hong Kong. With the help of researchers from the National Development and Reform Commission, China’s planning agency, the institute is studying Foshan for clues about the rest of the economy’s future.

Foshan’s example is relevant to other parts of China, it argues. Unlike the nearby metropolis of Shenzhen, it was never a special economic zone. Unlike neighbouring Guangzhou, it is not a provincial capital. It also shares many of the country’s growing pains. Lacking oil and coal, it is prone to electricity shortages. It is heavily polluted and highly indebted: its government pays 47% of its tax revenues on servicing its liabilities. Wages are going up, land is running out, and growth is slowing down. To tackle such problems, China’s Communist Party endorsed a long list of bold reforms at its long-awaited “third plenum” in November. Economists welcomed the list even as they worried that officials would fail to implement it. But in China, implementation is often a process of gradual diffusion not abrupt transition. Some of the principles proposed by the plenum are already in practice in Foshan. Some may have been inspired by it.

The third plenum resolved that the market should play a “decisive” role in the allocation of resources. In Foshan it already does. In the early 1990s Shunde, one of the city’s districts, pioneered the sale of government-backed enterprises to their managers, workers and outside investors. Foshan now has about one private enterprise for every 20 residents. In 2012 they grew twice as fast as the remaining state-owned firms.

November’s party plenum also called for private capital to play a bigger role in public infrastructure. In Foshan over the past nine years the government has allowed private firms to bid for over 500 projects, including power generation, water plants, and rubbish-incineration plants, according to Liu Yuelun, the city’s mayor. Ahead of the party’s call to consolidate the state bureaucracy, Shunde district had already slashed the number of its departments from 41 to 16.

Another national aim is to unify parts of China’s land market, allowing rural land to be leased on similar terms to state-owned urban plots. In the 1980s Foshan had already created a shadow market in communal land, which villagers leased to budding industrialists, contrary to national law that reserved such land for rural purposes. Because these land rights were technically illegal, many big firms eschewed them. But that made them all the cheaper for scrappy, small firms willing to live in the legal shadows. This grey market allowed Foshan’s industrial clusters to grow organically, according to economic logic rather than arbitrary land laws, argues the FGI. It also allowed villagers to reap some of the gains of Foshan’s industrial transformation. By 2010, the FGI calculates, the average Foshan resident owned property worth almost $50,000.

via Urban renewal (1): New frontiers | The Economist.

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14/12/2013

Six major economic tasks set for next year – Chinadaily.com.cn

Chinese leaders have wrapped up a four-day Economic Work Conference, promising to maintain stable economic policies to achieve reasonable economic growth in the coming year and pointing out six major tasks.

Six major economic tasks set for next year

The four-day economic conference, chaired by China’s President Xi Jinping, decided to maintain the proactive fiscal policy and prudent monetary policy stance in 2014.

In a statement after the conclusion of the close-door-meeting, officials said the country would expand its reforms into different sectors. Especially, focus should be placed on keeping reasonable credit growth and social financing next year. Pushing forward interest rate liberalisation and the internationalisation of the yuan currency also figure on the hit list. The six top tasks for 2014 are

1. Securing food supply, and at the same time, food safety;

2. Changing the industrial structure, resolve the over-capacity issue and promote sustainable economic growth driven by consumption, services and innovation.

3. The government will also try to better manage the debt of local governments.

4. Coordinating the development between different regions.

5. Improve people’s livelihood and boost employment.

6. Last but not least, China will also spur international financial cooperation, mainly in the areas of Free trade agreements and investment deals.It’s widely expected that China’s economy will grow at annual 7.6-7.7 percent this year, above the government target of 7.5 percent.

via Six major economic tasks set for next year – Chinadaily.com.cn.

See also: http://chindia-alert.org/economic-factors/china-needs-to-rebalance-her-economy/

13/12/2013

China’s reformed govt assessment hailed as landmark |Politics |chinadaily.com.cn

China\’s official evaluation system has abandoned GDP-obsessed assessments and puts more emphasis on public well-being and the environment.

\”It\’s a historical turning point that shows solid steps to deepen reform,\” said Wang Yukai, professor with the Chinese Academy of Governance, who believes the new system will help CPC members do a better job.

Gross regional product and its growth will no longer be the main determinants of local administrators\’ success or failure, according to a circular on improving evaluation of local authorities, released on Monday.

The GDP growth has been the major index for assessing local performance for many years and has led to blind pursuit of growth by some local authorities at the cost of the environment and residents\’ livelihoods.

The document issued by the Organization Department of the Communist Party of China (CPC) Central Committee, gives greater emphasis to indices related to the waste of resources, environmental protection, excess capacity and production safety. Evaluation of scientific innovation, education, culture, employment, social insurance and health should all be encouraged, it said.

The new assessment regime will make use of indices of sustainable economic development, quality of life, social harmony and ecological protection, said Xie Chuntao, a professor at the Party School of the CPC Central Committee.

The circular echoes a key reform decision made by the CPC Central Committee last month, part of which vowed to improve the evaluation system.

via China’s reformed govt assessment hailed as landmark |Politics |chinadaily.com.cn.

13/12/2013

Slow change comes to India a year after Delhi gang rape | Expert Zone

(Any opinions expressed here are those of the author and not of Thomson Reuters)

One year ago, a 23-year-old physiotherapy student was raped and murdered. Her story showed the world that women across India are viewed as dispensable, undeserving of full human rights.

One year later, what has changed?

It is heartening that the case of Nirbhaya, as she is known, led to the setting up of the Justice Verma commission that recommended strengthening outdated laws to protect women and their rights. Although change has been slow, more cases of sexual violence are being reported rather than silenced, scuttled or quietly settled. However, crime statistics and prosecution rates show that most of these crimes go unnoticed, unreported and absorbed into the culture of “that’s the way things are.”

Looking through the National Crime Records Bureau’s report for 2012, it is evident that the number of complaints registered with the police, the first information reports on rape, has risen by nearly 3 percent. The number of cases that were charge-sheeted — documented as a crime — was 95 percent. But fewer than 15 percent of rape cases came to trial in 2012.

Violence against women remains the most widespread and tolerated human rights abuse. Catcalling, taunting and grabbing women in public arise from, and perpetuate, notions of masculinity that define “real” men through power and dominance. “Minor” assaults and inequities are part of the continuum that includes rape, domestic abuse and attacks on women and girls.

This culture is enabled by men who tacitly condone it by not challenging it. That’s why to end violence against women, and change the culture, men must stand alongside us.

The Nirbhaya case started an unprecedented wave of activism. Men and women took to the streets. The massive number of men participating proved their growing role as leaders and partners in ending violence against women.

via Slow change comes to India a year after Delhi gang rape | Expert Zone.

11/12/2013

China cuts more red tape, paves way for NDRC slim-down | Reuters

China has stripped dozens of powers away from central government ministries as it bids to cut red tape and prevent Beijing\’s army of bureaucrats from micromanaging the world\’s second-largest economy.

Paramilitary policemen stand in formation as they pay tribute to the Monument to the People's Heroes on Tiananmen Square in Beijing, November 17, 2013. REUTERS/Stringer

China\’s cabinet, the State Council, announced on Tuesday that it was removing 82 powers from a number of central government ministries, including the powerful National Development and Reform Commission (NDRC) and the Ministry of Environmental Protection.

In a series of sweeping reforms published in November, China\’s ruling Communist Party promised to free up the market by simplifying administration and \”restrict central government management of microeconomic issues to the greatest possible extent\”.

via China cuts more red tape, paves way for NDRC slim-down | Reuters.

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