Archive for ‘Reform’

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.

21/11/2013

As Xi Jinping Reforms China, Expect Power Consolidation, Not Democracy – Businessweek

Chinese President Xi Jinping is all about reform. That’s “reform” as in “kicking butt.” The main take-away from the Third Plenary Session of the Communist Party’s 18th Central Committee is that Xi has consolidated power remarkably quickly and is eager to use it. Some parts of his agenda impress outsiders, such as further relaxing the one-child policy and closing reeducation labor camps. Such steps defuse popular anger toward the regime. Other Xi initiatives are decidedly less appealing, like the vow to “utilize and standardize Internet supervision,” which is code language for censorship. But whether liked or disliked outside China, everything Xi intends to do is directed toward one goal: to consolidate the Communist Party’s central and permanent role as the leader of the nation.

As Xi Jinping Reforms China, Expect Power Consolidation, Not Democracy

Democracy is the yielding of power from the party to the people. That’s not what Xi wants. He wants to gather power inward on the theory that only a strong leader can govern a country in which the mountains are high and the emperor is far away. Getting local governments to toe the line “requires a lot of political brute force, and it’s something you can only achieve if you are extremely vigorous,” says Arthur Kroeber, Beijing-based managing director of economic research firm GK Dragonomics. Kroeber says Xi’s anticorruption campaign seems to warn, “Look, this is the way it’s going to be, and if you don’t like it, we have a lot of space in the jails for you.”

The theme of the third party plenum, held on Nov. 9-12, was “reform and opening up.” That’s a phrase consciously copied from an earlier third party plenum—the one in December 1978 at which Deng Xiaoping began to launch China into the global economy. Deng helped lift hundreds of millions of Chinese out of poverty, giving the world’s most populous nation what is now the world’s second-biggest economy. Xi wants to show his countrymen he’s determined to carry on Deng’s legacy, yet he draws inspiration from the man Deng repudiated: Chairman Mao Zedong. Xi’s father, Xi Zhongxun, fought alongside Mao. According to the official story, Mao saved him from execution, and the elder Xi repaid the favor by sheltering Mao and his troops at the end of the Long March retreat from the Nationalist forces of Chiang Kai-shek.

As a princeling, Xi is determined to demonstrate his ties to the founding generation. Intent on returning China to a purer past, he has presided over a crackdown on corruption that has netted senior party officials—even as members of his own extended family have become rich. He’s brought back the Maoist notion of a “mass line” that enforces ideological discipline by requiring officials to “listen to the people,” introspect, and cleanse themselves of any deviations from party doctrine. He isn’t making it easy for the people to speak, though; in September, China’s top court said Web users could face jail time if “defamatory” rumors they put online were read by more than 5,000 people or reposted more than 500 times.

Xi doesn’t trumpet his differences from his predecessors as an American would. Chinese leaders worry that the people will lose faith in the party if it seems to be swerving in different directions. (“Unswerving” is a big word in China.) So in its 60-point resolution, the Central Committee dutifully name-checks “Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the important thought of ‘Three Represents,’ and The Scientific Outlook on Development”—those last two being the slogans of past presidents Jiang Zemin and Hu Jintao, respectively. It’s as if Barack Obama obsessively paid tribute to President George W. Bush’s “compassionate conservatism.”

via As Xi Jinping Reforms China, Expect Power Consolidation, Not Democracy – Businessweek.

21/11/2013

China Supreme Court rules out confession through torture | Reuters

Using torture to extract confessions must be eliminated, China\’s Supreme People\’s Court said on Thursday, singling out a widespread practice that has long attracted international condemnation.

Policemen guard the entrance outside Shandong Province Supreme People's Court in Jinan, Shandong province, October 25, 2013. REUTERS/Aly Song

\”Inquisition by torture used to extract a confession, as well as the use of cold, hunger, drying, scorching, fatigue and other illegal methods to obtain confessions from the accused must be eliminated,\” the Supreme Court said in a statement posted on its official microblog account.

The Supreme People\’s Court also introduced more stringent rules for death penalty cases, saying adequate evidence must be furnished and that only experienced judges should handle capital punishment trials.

China\’s government said last week it would work to reduce the number of crimes subject to the death penalty.

via China Supreme Court rules out confession through torture | Reuters.

20/11/2013

The party plenum: Everybody who loves Mr Xi, say yes | The Economist

COMMUNIST Party plenums are rituals of unchanging arcana. The closed-door, four-day conclave of some 370 senior party leaders that ended in Beijing on November 12th was a typical example, as usual summing up its decisions in a gnomic communiqué full of ambiguities. Yet a parsing of the document suggests President Xi Jinping (pictured above, centre) is tightening his grip on power, and with it his ability to achieve breakthroughs in economic and social reforms.

China’s state-controlled media have hailed the meeting, known as the third plenum of the 18th Central Committee, as “a new historical starting point”. Global Times, an English-language newspaper, said it was just as important as the most famous plenum in the party’s history, which brought Deng Xiaoping to power in 1978 and ushered in profound changes that turned China into the world’s second-largest economy. There is little in the communiqué to back such bullish assertions, but the summary of the proceedings offers hope that the pace of reform will pick up.

For the first time in such a document, the party has called for markets to play a “decisive” role in the allocation of resources. This has been glossed by official media as a step up from previous party language that described the role of market forces as merely “basic”. This new language, according to an academic quoted by Global Times, aroused much debate during preparations for the plenum. Semantics can be very important. The party’s decision in 1992 to create a “socialist market economy”, not just a socialist one, caused an upsurge of reformist zeal, including the privatisation or closure of tens of thousands of state-owned enterprises, as well as market-opening measures that paved the way for accession to the World Trade Organisation a decade later.

As expected, this week’s communiqué contained few indications of specific new policies. These will become clearer in a few days or weeks when the resolution is published, and after senior economic officials meet in December to decide on the country’s economic strategy for the year ahead. There was no mention of financial reforms to allow market forces to determine interest and exchange rates, which many economists view as crucial. On rural land reform, also closely watched, the document merely repeated language introduced at a plenum five years ago about the need to unify urban and rural property markets. Despite its reassuring words about the role of the market, it said the state sector should remain the “main body” of the economy, an odd concept, especially since China’s GDP is now largely generated by the private sector.

But at party plenums, repetition of familiar language is not necessarily a sign of inertia. The meeting in 1978 was laden with Mao-era rhetoric, but led to the ditching of Mao’s economic policies. More important were the signals it sent about Deng’s grip on power, including the return to central roles of many of Deng’s allies who had been purged by Mao. The just-concluded plenum announced two institutional changes that suggest Mr Xi has moved fast to consolidate his position.

The first of these is the setting up of a “state-security committee”. Details of this have not been revealed. It may be Mr Xi’s attempt to rein in a security apparatus that had become too powerful in recent years. Some of its functions are expected to mirror those of America’s National Security Council, which advises the president on foreign policy and tries to ensure that all government agencies are well co-ordinated. China’s new body is thought likely to include representatives from the army and police as well as ministries responsible for foreign and economic affairs. It would be a sign of Mr Xi’s growing power if he has at last persuaded the security forces to act more in concert with the rest of the bureaucracy.

The other notable change is the establishment of a “leading small group” to supervise reforms. Such groups count. They report to the Politburo and help to form and implement policy decisions. Again, no details have been given of the new body, but it could help to overcome bureaucratic rivalries that often stymie reforms. It may even be chaired by Mr Xi. The communiqué calls for “decisive results” by 2020 in unspecified “important areas” of reform.

Not surprisingly, given a fierce crackdown on political dissent in recent months, the document said little about political reform (although for the first time in the history of party plenums, Chinese television indulged in a show of glasnost by broadcasting scenes of group discussions, though participants’ voices could not be heard). The communiqué favourably mentions democracy 12 times, but plenum-watchers learned long ago that this particular count is best ignored.

via The party plenum: Everybody who loves Mr Xi, say yes | The Economist.

20/11/2013

The Trouble With China’s Reform Plan – Businessweek

The Chinese leadership’s 60-point reform plan announced two days after the close of the Communist Party of China’s third plenum on Nov. 15 went way beyond most expectations. It proposes sweeping changes across broad swathes of the economy, dealing with all of the critical issues and challenges facing China as it reaches for the next stage of development.

The plan’s overarching goals hit all the right reformist notes: “The core issue is to handle the relationship between government and the market”; “In allocating resources the market must play a decisive role”; China “must actively and steadily push forward the breadth and depth of market-oriented reforms,” and “vigorously develop a mixed-ownership economy” (meaning the private sector along with state-owned), says the document, formally called the “Decision on major issues concerning comprehensively deepening reforms.”

The optimists, who have long said the new leadership would meet their lofty expectations and deliver a new vision at the plenum, clearly have been vindicated. The plenum also shows that the new leaders, and Party Secretary Xi Jinping in particular, have decided that major reform is necessary for the continued growth of the Chinese economy. (We already knew that’s where Premier Li Keqiang’s allegiances were.) Good news indeed.

This, however, doesn’t change what has always been true: Defining what specific policies will be adopted to carry out these sweeping reforms, and even more, implementing them, will be extremely difficult. Each of the reforms will have costs for, and adversely affect powerful players in, the Chinese system. The party leaders have set the year 2020 as a target for implementing all of this, presumably in a nod to how tough it will be. And, of course, there’s no guarantee that these reforms won’t be delayed or even abandoned, as the scale of the obstacles ahead becomes more and more apparent.

Very quickly the reforms will come head to head with vested interests that stand to lose huge power. Those include state enterprises, local governments, banks, well-connected princelings, security authorities, and ultimately the party itself.

That is the central paradox of what has been proposed: On the one hand, China can’t continue growing the way it has, and indeed risks social and economic fracture if these reforms aren’t carried out. On the other hand, by pursuing these reforms the party is diluting its control in multiple ways: its privileged role controlling the purse strings, if more and more lending is to go through non-state banks; its leading position guiding the economy’s development, if the private sector starts to move into areas long controlled by state enterprises; and increasingly its sway over the people, as the party loosens the hukou and allows migrants to move more freely where they want, and as it gives farmers more power over the land they occupy. (All with the associated possibility of greater social unrest if huge new numbers of people flow into the cities and feel less inclined to be quiet when they feel the state has mistreated them.)

via The Trouble With China’s Reform Plan – Businessweek.

20/11/2013

China Legal Reform Promises Cause for Cautious Optimism – China Real Time Report – WSJ

The initial communiqué that emanated from China’s major meeting of top Communist Party leaders on November 12th focused on economic reform and had little to say about the legal realm. That changed three days later when the Central Committee of the Chinese Communist Party released a 60-point “resolution” that announced two potentially significant legal reforms and provided more detail about additional reform targets.

While it’s only possible to gauge the transformation of rhetoric into action after the fact, I’m not alone in welcoming the new goals. I recently attended a long-planned meeting in Seattle of a group of specialists on Chinese law. The meeting began on November 14, and the mood was discouraged given the scarcity of references to legal institutions in the communiqué. By the next morning, however, the atmosphere shifted as details of the just-released resolution trickled in.

The resolution specifically mentions two potentially important reforms: abolition of the system of “re-education through labor” (in Chinese: laojiao) and a plan to move the courts and the procuracy (prosecutors) away from the influence of local governments.

Laojiao, initiated in 1957, is a system under which the police may send people to labor camps for up to four years without formal arrest or trial.  Initially established to deal with recidivist petty criminals who would otherwise burden the courts, it has been extensively used to incarcerate “counter-revolutionary” dissidents, aggressive petitioners, members of the Falun Gong religious movement and other persons deemed to present unwelcome political challenges to CCP rule. It has long provoked criticism by Chinese legal scholars, other advocates of legal reform and members of the public.

via China Legal Reform Promises Cause for Cautious Optimism – China Real Time Report – WSJ.

19/11/2013

China to ease decades-old one-child policy nationwide | Reuters

China will ease family planning restrictions nationwide, the government said on Friday, allowing millions of families to have two children in the country\’s most significant liberalization of its strict one-child policy in about three decades.

A mother pushes her daughter on a swing in Beijing April 3, 2013. REUTERS/Jason Lee

Couples in which one parent is an only child will now be able to have a second child, one of the highlights of a sweeping raft of reforms announced three days after the ruling Communist Party ended a meeting that mapped out policy for the next decade.

The plan to ease the policy was envisioned by the government about five years ago as officials worried that the strict controls were undermining economic growth and contributing to a rapidly ageing population the country had no hope of supporting financially.

A growing number of scholars had long urged the government to reform the policy, introduced in the late 1970s to prevent population growth spiraling out of control, but now regarded by many experts as outdated and harmful to the economy.

While the easing of the controls will not have a substantial demographic impact in the world\’s most populous nation, it could pave the way for the abolition of the policy.

\”The demographic significance is minimal but the political significance is substantial,\” said Wang Feng, a sociology professor at Fudan University specializing in China\’s demographics, before the announcement.

\”This is one of the most urgent policy changes that we\’ve been awaiting for years. What this will mean is a very speedy abolishment of the one-child policy.\”

In the 1980s, the government allowed rural families with a girl to have two children, Wang said. \”Ever since the \’80s, there\’s been nothing as clear as this,\” he said.

Wang Guangzhou, a demographer from top government think-tank, the Chinese Academy of Social Sciences, estimated the new policy would affect 30 million women of child-bearing age In a country which has nearly 1.4 billion people.

Although it is known internationally as the one-child policy, China\’s rules governing family planning are more complicated. Under current rules, urban couples are permitted a second child if both parents do not have siblings and rural couples are allowed to have two children if their first-born is a girl.

There are numerous other exceptions as well, including looser rules for ethnic minorities and allowing parents who are themselves only children to have two children at most.

Any couple violating the policy has to pay a large fine.

The one-child policy covers 63 per cent of the country\’s population and Beijing says it has averted 400 million births since 1980.

Many analysts say the one-child policy has shrunk China\’s labor pool, hurting economic growth. For the first time in decades the working age population fell in 2012, and China could be the first country in the world to get old before it gets rich.

\”It\’s not a huge reform, there have been small adjustments all along,\” said Liang Zhongtang, a demographer from the Shanghai Academy of Social Sciences.

\”I am just worried that they will make no further adjustments for a very long time after they\’ve made this one.\”

Tian Xueyuan, a retired family planning scholar who helped draft the original one-child policy, told Reuters the rules were only meant to last about 25 years.

\”They could have implemented this policy several years ago,\” he said.

Numerous studies have shown the detrimental effects of the one-child policy. China\’s labor force, at about 930 million, will start declining in 2025 at a rate of about 10 million a year, projections show. Meanwhile, its elderly population will hit 360 million by 2030, from about 200 million today.

A skewed gender ratio is another consequence.

Like most Asian nations, China has a traditional bias for sons. Many families abort female fetuses or abandon baby girls to ensure their only child is a son. About 118 boys are born for every 100 girls, against a global average of 103-107 boys per 100 girls.

Family planning officials have been known to compel women to have abortions to meet birth-rate targets.

Still, the adjustment is likely to be popular.

Zhang Yuanyuan, who has a one-year-old son, said she had already decided to have one more child before the new policy and was willing to pay the fine.

\”We are very, very happy about this new policy,\” Zhang told Reuters.

via China to ease decades-old one-child policy nationwide | Reuters.

19/11/2013

Reform in China: Every move you make | The Economist

DO YOU understand “the three represents” or “the six tightly revolve-arounds”? Have you fully embraced “ecological development civilisation” or “socialist modernisation construction”? No, neither have we. The communiqué issued after the Communist Party’s third plenum of the 18th Central Committee is as opaque and dense as ever. As usual, optimists can find cause for hope and pessimists will see their worst fears confirmed. The one thing they both agree on is that it is unusually important. Third plenums have a special place in Chinese politics as the venue for big changes in direction—and President Xi Jinping had hinted that this one would be no different.

Will this third plenum turn out to transform China as Deng Xiaoping’s did in 1978? More details will emerge. But on the basis of the document, issued on November 12th, and the choreography before the plenum, we are optimistic.

SOE far, so good

With an increasingly vocal Chinese public making growing demands on its leaders, Mr Xi, like his predecessor, Hu Jintao, has learned to talk a good reformist game. But Mr Hu failed to change much, partly because he never found a way round the mass of vested interests, including state-owned enterprises (SOEs) and local governments, who benefit from the current system and so stand in the way. Although the communiqué laying down Mr Xi’s priorities contains plenty of party-speak (just as Deng’s did in 1978), some of its content suggests that this chief may be more serious about reform than Mr Hu was.

In economic policy the communiqué calls for the market to play a “decisive” role in allocating resources. Until now, party literature has said the role of market forces should be “basic”. Words matter in China. This tweak is a sign that Mr Xi wants the market to play a bigger part in shaping the economy; it may even signal that he wants to take on the SOEs, which squander vast amounts of capital. In the political arena, the communiqué proposes the setting up of a new “leading small group” to oversee reforms. Made up of senior party leaders, these groups report directly to the Politburo. The job of this new one will probably be to bang together the heads of obstructionist SOE bosses and provincial leaders to make them work together better, and Mr Xi himself could well chair it.

A new “state-security committee” could be more contentious. In foreign affairs, this is expected to mirror America’s National Security Council, which advises the president and helps co-ordinate government agencies. America has long complained about the lack of coherence within Chinese policy-making, which leaves its most important bilateral relationships vulnerable to unpredictable hiatuses and sudden changes in direction. The committee is expected to include the army and police. If so, it could be a sign of Mr Xi’s growing clout and determination to rein in the free-wheeling security forces to ensure that they work with the rest of the state.

Pessimists will find plenty to be gloomy about. Asian markets fell when the plenum made its announcements, perhaps because of the lack of news about financial reform. The communiqué barely mentions the need for changes in rural land ownership let alone household registration (hukou). Although it nods towards judicial reform, it does not speak of allowing any more political freedom. There are fears that the security committee could be used for internal repression. Some see it as a power grab by Mr Xi to give himself a more direct role in the security apparatus.

Yet if Mr Xi is to overcome China’s conservative interests, these changes or something like them are necessary. Too many people do too well out of today’s system to make change easy. The new small leading group should act as an economic commando force, tackling obstacles to reform within the bureaucracy and the party. The state-security committee could aim to ensure that factions do not embroil China in disputes abroad that escalate to the central leadership only very late, when much of the damage has been done.

The new committees leave Mr Xi with more power than any Chinese leader since Deng. A lot depends on what he does with it. If the coming years see more changes, such as economic reform in the countryside, curbs on the party’s clout and greater recognition of the rule of law, then people will look back on the plenum as the start of a better China just as they do now to the 1978 meeting. If Mr Xi does nothing, the country will be heading in a dangerous direction.

via Reform in China: Every move you make | The Economist.

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19/11/2013

China: Post-plenum blues?

A well thought through analysis, in my opinion.

12/11/2013

China vows ‘decisive’ role for markets, results by 2020 | Reuters

China\’s leaders pledged to let markets play a \”decisive\” role in the economy as they unveiled a reform agenda for the next decade on Tuesday, looking to secure new drivers of future growth.

A worker wields a hammer at a demolition site in front of new residential buildings in Hefei, Anhui province, October 19, 2013. REUTERS/Stringer

China aims to achieve \”decisive results\” in its reform push by 2020, with economic changes in focus, the ruling Communist Party said in a communiqué released by state media at the end of a four-day conclave of its 205-member Central Committee.

The self-imposed deadline for progress – rare for Beijing to lay out in such clear terms – together with the creation of a top-level working group and an emphasis on \”top-level design\”, suggest a more decisive reform push by the administration of President Xi Jinping and Premier Li Keqiang than under the previous leadership.

They must unleash new sources of growth as the economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness.

\”You should look back in history. When Deng Xiaoping started the reform and opening movement, he actually did something very similar in nature, creating a very powerful working group,\” said Steve Wang, China chief economist with The Reorient Group in Hong Kong.

\”These guys report direct into the power center of the Communist Party. This is definitely not something to be looked at as another layer of bureaucracy, this is something to speed things up, to make things more efficient.\”

The leaders also set up a state committee to improve security as Beijing seeks to tackle growing social unrest and unify the powers of a disparate security apparatus in the face of growing challenges at home and abroad.

While the statement was short on details, which prompted disappointment on social media, it is expected to kick off specific measures by state agencies over the coming years to gradually reduce the role of the state in the economy.

Historically, such third plenary sessions of a newly installed Central Committee have acted as a springboard for key economic reforms, and the follow-up to this meeting will serve as a first test of the new leadership\’s commitment to reform.

via China vows ‘decisive’ role for markets, results by 2020 | Reuters.

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