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05/03/2016

The Limits of Growth: Economic Headwinds Inform China’s Latest Military Budget – China Real Time Report – WSJ

With an official defense budget increase of 7.6% to 954 billion yuan ($147 billion) announced today, Beijing’s quest to restore China’s historic “greatness” and to attain international status as a military power commensurate with its economic standing continues.

Yet with GDP growth slowing and social and demographic headwinds mounting, Chinese leaders face increasingly difficult tradeoffs concerning how to allocate government largesse.

With Beijing’s 2016 official defense budget, it is clear that even military spending is not immune to China’s economic and fiscal realities. Advance reports that this year’s official budget would entail an increase of as much as 20% proved significantly off-the-mark. So, what’s in a number? Nothing short of this: Beijing’s latest defense spending figure provides further evidence that it is determined to avoid succumbing to Soviet-style military overextension – yet it remains committed to enhancing capabilities to further its priorities, especially vis-à-vis contested island and maritime claims in the East and South China Seas.

Make no mistake: drawing on the world’s second-largest (and growing) economy, the People’s Liberation Army (PLA) is increasingly well-endowed and capable of asserting China’s regional interests. Even as GDP growth continues to slow, President Xi Jinping appears determined to order, and fund, ambitious military modernization and PLA reforms. The PLA is now far-and-away the world’s second best-resourced military and, unlike the globally-distributed and -deployed U.S. military, is focused overwhelmingly on its immediate neighborhood.

Source: The Limits of Growth: Economic Headwinds Inform China’s Latest Military Budget – China Real Time Report – WSJ

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05/03/2016

China Sets Economic Growth Target of 6.5% to 7% for 2016 – China Real Time Report – WSJ

China has set an economic growth target of between 6.5% and 7% for 2016 and an average of at least 6.5% over the next five years, goals that acknowledge slowing momentum in the world’s second-largest economy but which still could be difficult to reach.

As WSJ’s Mark Magnier reports:

By adopting a range for the first time in two decades, China has given itself more flexibility in a system where hitting goals set far in advance, regardless of conditions on the ground, remains politically important.

The targets released here on Saturday at the opening of the National People’s Congress, China’s annual parliament, weren’t a surprise given that senior officials from President Xi Jinping on down had flagged them in recent months.

But they underscore that the government continues to prioritize stability, as output in the world’s second-largest economy downshifts faster than expected.

Last year, China’s economy grew 6.9%, its slowest pace in 25 years, compared with the 2015 target of about 7%. This year could bring a new quarter-century low, as traditional growth engines continue to lose traction.

Source: China Sets Economic Growth Target of 6.5% to 7% for 2016 – China Real Time Report – WSJ

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02/03/2016

A look back at the 25 goals of 2015|Government|chinadaily.com.cn

Amazing achievement.  How many countries declare goals in such clear numerical form and then exceed 23, meet 1, and fail on only 1 out of 25!

A look back at the 25 goals of 2015

1 Revitalize more than 212.4 billion yuan in central finance fund stock. Fulfillment: 237 billion yuan revitalized.

2 Investment within central budget increased to 477.6 billion yuan. Fulfillment: Investment of 521.1 billion yuan.

3 Railway investment to exceed 800 billion yuan. Fulfillment: Investment of 823.8 billion yuan was completed.

4 Utilize more than 8,000 km of newly built rail. Fulfillment: Newly built rail of 9,531 km was put into use.

5 Start construction of 27 major hydro projects. Fulfillment: Construction of 28 initiated.

6 Cancel all non-administrative approvals. Fulfillment: 453 items were cancelled or adjusted.

7 Cut items limiting foreign investment by half. Fulfillment: 41 of 79 items were deleted.

8 Keep grain yields above 550 million tons and increase deep-plough land by 13.33 million hectares. Fulfillment: Grain yields reached 621 million tons, Deep-plough land increased by 13.648 million hectares.

9 Construct or reconstruct 200,000 km of highways in rural areas. Fulfillment: Rural areas saw 251,000 km of newly constructed or reconstructed highways.

10 Build bridges to replace sliding-chairs to cross remote mountainous areas in the West. Fulfillment: All 288 projects have started construction.

11 Ensure that the more than 200,000 people in the country with no access to electricity get access. Fulfillment: 238,000 got access to electricity.

12 Provide safe drinking water to 60 million rural people. Fulfillment: 64.336 million rural people got access.

13 Eliminate all the 1.162 million heavy-emission vehicles with yellow stickers put into operation before the end of 2005. Fulfillment: 1.26 million such vehicles were eliminated.

14 Reduce energy use and carbon dioxide emissions by 3.1 percent or more. Fulfillment: Energy use was reduced by 5.6 percent, while carbon dioxide emissions were cut by 6.6 percent.

15 Cut chemical oxygen demand emissions by 2 percent, ammonia emissions by 2 percent, sulfur dioxide emissions by 3 percent and nitrogen oxide emissions by 5 percent. Fulfillment: Chemical oxygen demand emissions were cut by 3.1 percent, ammonia emissions by 3.6 percent, sulfur dioxide emissions by 5.8 percent and nitrogen oxide emissions by 10.9 percent.

16 Return 667,000 hectares of farmland to forest and grassland. Fulfillment: 667,000 hectares of farmland were returned.

17 Plant 6 million hectares of forests. Fulfillment: 6.3245 million hectares were planted.

18 Build 7.4 million units in government-subsidized housing projects, renovate 5.8 million units in shanty-towns and 4.32 million dilapidated houses in rural areas. Fulfillment: 7.83 million units in government-subsidized housing projects were built, 6.01 million units were renovated in shanty-towns and 4.68 million dilapidated houses in rural areas.

19 Create more than 10 million jobs in urban areas. Fulfillment: 13.12 million jobs were created in urban areas.

20 Raise standard of financial assistance for basic medical insurance of urban residents to 380 yuan per person per year. Fulfillment: Average standard has been raised to 446 yuan.

21 Raise standard of financial assistance for the new rural cooperative medical system to 380 yuan per person per year. Raise standard of financial assistance for per capita funding for basic public health services to 40 yuan. Carry out pilot projects for public hospital reform in 100 cities at and above prefecture level. Fulfillment: Standard of financial assistance for the new rural cooperative medical system was raised to 390. 24 yuan per person per year. Standard of financial assistance for per capita funding for basic public health services reached 42 yuan. Pilot projects for public hospital reform were carried out in 100 cities at and above prefecture level.

22 The registered urban unemployment rate should not exceed 4.5 percent. Fulfillment: Registered urban unemployment rate was 4.05 percent

23 Cut the rural poor population by at least 10 million. Fulfilled.

24 Employment opportunities for 7.49 million college graduates. Fulfillment: The employment situation was the same as the previous year.

25 Increase imports and exports by 6 percent. Failed to meet the goal: Import and export volumes in 2015 were $3.95864 trillion, down 8 percent. Exports decreased by 2.9 percent, still making China the best performer in major economies. China is still the world’s biggest trading power and export power.

Source: A look back at the 25 goals of 2015|Government|chinadaily.com.cn

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02/03/2016

Today’s ‘Kings Without Crowns?’ — The Growing Powers of Xi’s Party Disciplinarians – China Real Time Report – WSJ

After hunting corrupt cadres over the past three years, the Communist Party’s much-feared graftbusters are switching gears to political policing.

In the process, they have emerged with an authority perhaps unparalleled since ancient China.

With President Xi Jinping’s blessing, the already-powerful Central Commission for Discipline Inspection is stationing inspectors in all central party and government departments, extending its reach into the top echelons of China’s bureaucracy.

In addition to targeting graft and waste, the CCDI has also become a kind of thought police for officials, academics and propagandists. Its inspectors are increasingly denouncing those deemed disloyalty to the party leadership.

The agency’s expanded scope reminded the Procuratorial Daily (in Chinese), a newspaper run by China’s top prosecutorial agency, of how Ming Dynasty rulers in the 14th century fortified a body of imperial censors who hunted errant officials in the name of the emperor.

Embedded in the Ming court’s six ministries, the censors could make direct representations to the emperor, despite their relatively junior rank, and assist the monarch in administrative tasks.

“But their most important power was to inspect the six ministries and impeach ministers,” the newspaper said. “It was this special status that made them ‘kings without crowns’ in the Ming Dynasty court.”

Recent developments, legal experts say, suggest that Mr. Xi is transforming the agency from a party watchdog into an arm of government.

“In effect, Xi Jinping is creating a parallel bureaucracy that can go around existing party and government institutions, to make things happen,” said Carl Minzner, a law professor at Fordham University who studies the Chinese legal system.

Disciplinary inspectors have also found a role in imposing party ideology beyond the traditional corridors of power.

Source: Today’s ‘Kings Without Crowns?’ — The Growing Powers of Xi’s Party Disciplinarians – China Real Time Report – WSJ

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29/02/2016

China expects to lay off 1.8 million workers in coal, steel sectors | Reuters

China said on Monday it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 percent of the workforce, as part of efforts to reduce industrial overcapacity, but no timeframe was given.

It was the first time China has given figures that underline the magnitude of its task in dealing with slowing growth and bloated state enterprises.

Yin Weimin, the minister for human resources and social security, told a news conference that 1.3 million workers in the coal sector could lose jobs, plus 500,000 from the steel sector. China’s coal and steel sectors employ about 12 million workers, according to data published by the National Bureau of Statistics.

“This involves the resettlement of a total of 1.8 million workers. This task will be very difficult, but we are still very confident,” Yin said.

For China’s stability-obsessed government, keeping a lid on unemployment and any possible unrest that may follow has been a top priority.

The central government will allocate 100 billion yuan ($15.27 billion) over two years to relocate workers laid off as a result of China’s efforts to curb overcapacity, officials said last week.

Source: China expects to lay off 1.8 million workers in coal, steel sectors | Reuters

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24/02/2016

China cuts more red-tape – Xinhua | English.news.cn

I wish the UK government would follow this excellent lead.

“The State Council, China’s cabinet, has decided to abolish another 13 items of administrative approval to reduce intervention in the economy.

The items released on Tuesday involve finance and business qualification reviews.

The decision will help vitalize the economy and strengthen growth, the State Council said.

Facing a complicated global landscape and pressure from an economic slowdown at home, the central government has made transforming government functions a top priority.

State Council agencies have canceled or delegated administrative approval powers on 599 items since March 2013, meeting the target to cut the number of items requiring approval by one-third within the term of this government ahead of schedule.”

Source: China cuts more red-tape – Xinhua | English.news.cn

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24/02/2016

China Inc.’s Nuclear-Power Push – China Real Time Report – WSJ

China wants to shift from customer to competitor in the global nuclear industry as it seeks to roll out its first advanced reactor for export, a move that adds new competition for already struggling global firms.

As WSJ’s Brian Spegele reports:

  • Two state-owned firms teamed up to design the advanced indigenous Hualong One reactor with plans to sell overseas. On Tuesday, one of them, China General Nuclear Power Group, hosted dozens of business executives from Kenya, Russia, Indonesia and elsewhere, as well as diplomats and journalists, at its Daya Bay nuclear-power station to promote the Hualong One for export.
  • Asked how much of the global market share for new nuclear reactors CGN wants Hualong One to win, Zheng Dongshan, CGN’s deputy general manager in charge of international business, said: “The more the better.”
  • The move marks a turnaround for China and the nuclear-power industry. For three decades, China served as a big market for nuclear giants including U.S.-based, Japanese-owned Westinghouse Electric Co. and France’s Areva SA. More than 30 reactors have been built across China since the 1990s with reliance on foreign design and technology.

Source: China Inc.’s Nuclear-Power Push – China Real Time Report – WSJ

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23/02/2016

‘Weird’ new buildings banned in Chinese cities| Society

Cities will not be allowed to build more “oversized, xenocentric, weird” buildings devoid of cultural tradition in the future, according to a new directive from the central government.

The State Council, or the cabinet, and the Communist Party of China Central Committee issued the directive on Sunday. It says buildings should be “suitable, economic, green and pleasing to the eye.”

Cities have built some unusually shaped buildings to create memorable skylines in recent years, but many have drawn criticism. Here is one of sixteen very weird buildings in China!'Weird' new buildings banned in Chinese cities

See the other fifteen at:

Source: ‘Weird’ new buildings banned in Chinese cities[12]| Society

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21/02/2016

Xi takes nuclear option in bid to rule for life | The Sunday Times

Very worrying, if true.

“CHINA is moving towards one-man rule as the state media step up demands for personal loyalty to President Xi Jinping, a departure from the Communist party’s collective leadership of recent decades.

Xi Jinping appears to be building a personality cult around him as Mao did

Last week the party’s flagship newspaper issued a call for Xi to have the power to “remake the political landscape of China”. The article, supposedly written by one of a literary group, was put out on a social media account run by the People’s Daily. It said all communists must be loyal to Xi and “line up with the leadership”.

The campaign to enshrine Xi as the infallible “core” of authority is worrying many inside the political elite and coincides with China exerting its military muscle and possibly preparing to change its nuclear weapons strategy.

The People’s Liberation Army (PLA) has just stationed surface-to-air missiles on a disputed island in the South China Sea. The Chinese expansion comes as Barack Obama rallies Asian nations to support free navigation in the strategic waterway. The prospect of one man dominating the party, the state and the army in China could be the most challenging test in the next American president’s in-tray.

Xi’s grand plans include a total reorganisation of the Chinese military command structure that has included an internal debate about its nuclear weapons. Xi recently formed a dedicated PLA rocket force to control the nuclear ballistic missile arsenal. A report for the Union of Concerned Scientists, a US-based group, says China may be considering placing its nuclear forces on alert, which means that, like America and Britain, its weapons would be ready to fire on command.

That would be a shift of position for a nation that affirms it will not be the first to use nuclear weapons in any conflict. China has already started an ambitious programme to upgrade its older missiles with multiple warheads like those of other nuclear powers.

Rising military budgets show that despite the slower Chinese economy and big flows of capital out of the country, Xi is seizing any initiative to turn nationalism to his advantage. A source who grew up in the party’s privileged residential compounds in Beijing said the moves harked back to an earlier era: “There is a fear among the families, the long-time party members for generations, that this guy wants to make himself into another Chairman Mao and rule for life.”

It is clear that, like Mao, Xi, 62, is using articles and essays in the state media, often penned by pseudonymous authors or published in the provinces, to intimidate his enemies and promote himself.

Last week a social media platform controlled by the Beijing Daily, the voice of the capital’s municipal committee, launched a striking attack on a party faction opposed to Xi, the Communist Youth League. Officials connected to the league were “ambitious aristocrats whose self-serving attitude did no good to the party and led to scandals”, it sneered.

Targeting the league — whose members include the prime minister, Li Keqiang, and the former president, Hu Jintao — is a signal that Xi has broken with the consensus set after the unrest of 1989 that the party’s factions do not attack one another in public. In the past, a league connection meant a fast-track to promotion for young high-flyers. Now it seems to be a liability.

A study by the Central Commission for Discipline Inspection — the party watchdog unleashed by Xi against rivals accused of corruption — has criticised the “mentality” of league members. The commission’s propaganda publication, the China Discipline Inspection Paper, warned against “those who form their own circles inside the party” and referred to fallen officials as “gangs”.

This Mao-era language singled out the “petroleum gang” under the purged security chief, Zhou Yongkang, whose cronies dominated the Chinese oil industry, and the “secretary gang” around Ling Jihua, a close aide to Hu and a former league stalwart. Ling is already under arrest on corruption and bribery charges.

Defining people as members of “gangs” or “cliques” is a classic tactic of communist infighting and a prelude to destroying them.

Chilled by the signals from the top, half the provincial party chiefs in the country this month pledged allegiance to Xi as “the core”.

The term represents a significant change from the language used about Xi’s predecessors, Hu and Jiang Zemin, who were referred to as being only “at the core” of a collective leadership. The last strongman in China, Deng Xiaoping, exercised his power behind the scenes and scorned a cult of personality.”

Source: Xi takes nuclear option in bid to rule for life | The Sunday Times

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20/02/2016

A slow awakening | The Economist

AROUND 270m people have left China’s countryside to work in urban areas, many of them entrusting their children to the care of a lone parent, grandparents, relatives or other guardians.

By 2010 there were 61m of these “left-behind children”, according to the All-China Women’s Federation. In a directive released on February 14th, the government has at last shown that it recognises the problems caused by the splintering of so many families. The document acknowledges that there has been a “strong reaction” from the public to the plight of affected children. It describes improving their lot as “urgent”.

That is clearly right. There have been numerous stories in recent years revealing the horrors some of these children endure. Last year four siblings left alone in the south-western province of Guizhou apparently committed suicide by drinking pesticide. Numerous sex-abuse cases involving left-behind children have come to light.

The new proposals look sensible enough: minors may not be abandoned entirely; local institutions such as schools and hospitals must do more to notify the authorities of cases of abuse or neglect; social workers should monitor the welfare of left-behind children. Sadly, however, the government’s suggested remedies will achieve little. They largely replicate recent laws and policies designed to protect children (not just left-behind ones), which have been almost universally unenforced. It is already illegal to allow minors to live alone, for example. There is no indication that the new recommendations will be made law or implemented any more rigorously.

The new scheme mentions the importance of giving migrants urban hukou, or household-registration certificates, which are needed to gain access to public services such as education and health care. Most migrants leave their children in the countryside because they do not have such papers. In December the government announced plans to make it easier for migrants to gain urban hukou privileges. But few casual labourers are likely to fulfil the still-onerous conditions that must be met to qualify.

A study published last year by researchers at Stanford University found that among more than 140,000 children assessed in areas such as education, health and nutrition, left-behind ones performed as well as or better than those living in the countryside with both parents. But both kinds of children lagged far behind those who grow up in cities.

Source: A slow awakening | The Economist

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