The Sinocism China Newsletter 10.08.13–Third Plenum Plan Emerging?

I am trying to get this out before a morning meeting, so apologies in advance for any typos or awkward writing…

Everyone is trying to figure out what will be decided at the November Third Plenum. Given the hope and expectations that many hold for this meeting it is hard to see how many people, and the markets, will not be disappointed with whatever is decided.

Signs of what will be on the agenda are appearing, and the clearest yet may be the speech Xi Jinping just gave in Bali to the Asia-Pacific Economic Cooperation (APEC) CEO Summit. From Xinhua’s English Chinese president vows to deepen reform, opening-up in all respects summary of that speech:

“China is drawing up a master plan for the deepening of reform in all respects,” said Xi, adding that challenges cropping up in development and institutional obstacles will be targeted, so as to create new impetus to economic development through reform in a balanced manner…

To overcome those challenges and obstacles, China will improve its basic economic system, reform the administration system and enhance innovation capability, Xi noted, pledging to promote social equity and justice…

Also in his speech, the president said that China will follow a more proactive opening-up strategy, which underlines balance in foreign trade, a legal environment in which foreign companies in China can operate in a level playing field, and overall planning for global and regional opening-up and cooperation, among others.

Today’s People’s Daily has the full text on page 3. I have pulled what at a fast first read looks to be some of the key points of his speech–深化改革开放 共创美好亚太 ——在亚太经合组织工商领导人峰会上的演讲 :

中国正在制定全面深化改革的总体方案,总的是要统筹推进经济、政治、文化、社会、生态文明建设等领域的改革,努力破解发展过程中出现的难题,消除经济持续健康发展的体制机制障碍,通过改革为经济发展增添新动力…

我们将完善基本经济制度,加强市场体系建设,推进宏观调控、财税、金融、投资领域体制改革,深化利率和汇率市场化改革,增强人民币汇率弹性,逐步实现人民币资本项目可兑换。我们将推进行政体制改革,进一步转变职能、简政放权,理顺政府和市场关系,更大程度更广范围发挥市场在资源配置中的基础性作用。我们将健全科技体制,提高科技创新能力,着力构建以企业为主体、市场为导向、产学研相结合的技术创新体系。我们将以保障和改善民生为重点,促进社会公平正义,推动实现更高质量的就业,深化收入分配制度改革,健全社会保障体系和基本公共服务体系。我们将加强生态环境保护,扎实推进资源节约,为人民创造良好生产生活环境,为应对全球气候变化作出新的贡献…

中国是一个大国,决不能在根本性问题上出现颠覆性错误,一旦出现就无法挽回、无法弥补。我们的立场是胆子要大、步子要稳,既要大胆探索、勇于开拓,也要稳妥审慎、三思而后行。我们要坚持改革开放正确方向,敢于啃硬骨头,敢于涉险滩,敢于向积存多年的顽瘴痼疾开刀,切实做到改革不停顿、开放不止步。

Caixin has a short piece up on this speech saying it may reveal the overall reform plan that will emerge from the Third Plenum (习近平演讲透露全面深化改革总体方案_财新网) though Caixin’s Hu Shuli commented on her Weibo that there are a lot of gaps if this is really the complete framework of the reforms on the table (这不算是方案的完整框架吧?有部分内容,但缺口很多.)

Reuters is out with a piece this morning about what may be in the Plenum plan. China’s grand makeover plan a work in progress; fuzzy on implementation says that:

People familiar with the discussions say that out of a long list of reforms that the Communist Party’s 200-member Central Committee is set to announce, only a mooted financial overhaul has reached a point where there is a plan and a roadmap…

Fiscal, land and residency registration reform – all key ingredients of China’s declared goal of boosting its urban population – are the major sticking points as politicians debate how to implement the changes and as they also face resistance from powerful interest groups, such as state-owned monopolies…”The meeting will deepen reforms in all fronts,” said a senior economist with a government think-tank in Beijing, which has been involved in drafting the reform blueprint…

“The focus will be economic reforms – financial reform, tax and fiscal reform, resource pricing reform, and there will be reforms in related areas, such as social welfare and income distribution,” said the economist who declined to be identified because discussions of reform plans remain confidential.

Keep in mind that the Plenum is a Party meeting and even if the plan is bold and sweeping and it will take months and years for all the reforms to flow through the state bureaucracy, especially when the political transmission processes from Beijing to the ministries and local governments are at times less than efficient.

The Wall Street Journal has a long story about Liu He, who apparently is Xi’s architect of the reform plan. Meet Liu He, Xi Jinping’s Choice to Fix a Faltering Chinese Economy is paywalled, here are some highlights:

When then-U.S. National Security Adviser Tom Donilon flew to Beijing in May to set up a China-U.S. summit, he didn’t schedule a meeting with one of the most important men shaping China’s future.

Chinese leader Xi Jinping quickly made clear that was an oversight.

“This is Liu He,” Mr. Xi told Mr. Donilon, pointing to a tall, scholarly looking aide by his side. “He is very important to me,” Mr. Xi said, according to officials familiar with the interchange…

Mr. Liu’s more significant power may be his long-term connection with Mr. Xi, whom he has known since both were schoolmates in Beijing’s Middle School 101 in the 1960s. Mr. Liu is a regular in the Xi inner circle, accompanying him on a high-profile visit to South China last year, which mirrored a 1992 trip by then-paramount leader Deng Xiaoping to promote economic reform…

Liu He was at Sunnylands with Xi and joined him on his July Hubei inspection tour, out of which came several markers for what to expect at the Plenum.

The latest issue of the excellent China Leadership Monitor is out and it contains two interesting essays on reform and the Third Plenum. Alice Miller (my grad school advisor, so I have a bias to her work), writes in The Road to the Third Plenum that:

Since the 18th Party Congress, the Xi leadership has launched two carefully orchestrated, interrelated campaigns to demonstrate its seriousness about eradicating corruption and to improve public support for the regime. The twin campaigns appear aimed at paving the way to economic and government reforms at the 18th Central Committee’s upcoming Third Plenum that Chinese media promise will be substantial.

Barry Naughton writes in The Narrow Road to Reform that:

The reform policy process this year will culminate in the Third Plenum, which has now been pushed back to November. While the process is on track, delays show the difficulty in crafting a reform design that must adapt to the privileged position of state-owned enterprises and other limitations on reform design. Turbulence in short-term financial markets in June indirectly illuminates some of these problems.

Today’s Links:

THE ESSENTIAL EIGHT

China urges U.S. to prevent debt default – Xinhua “The U.S. is the world’s biggest economy and a major country issuing reserve currency. Safeguarding the debt is of vital importance to the economy of the U.S. and the world,” China’s Vice Minister of Finance Zhu Guangyao told a press briefing held by the Chinese Foreign Ministry. “This is the United States’ responsibility,” he said, adding that China hopes the U.S. will address the challenges facing its economy, solve the government disputes over the debt ceiling and keep the recovery process in the U.S., and the world, going.

Obama’s Absence Leaves China as Dominant Force at APEC – NYTimes.com The absence of Mr. Obama took some gravitas out of the conference, and there were deep questions about how the president could get a trade pact through Congress given the hostility of conservative Republicans in the House of Representatives toward his domestic programs. The prime minister of Singapore, Lee Hsien Loong, who maintains friendly relations with China, was the most direct in describing the damage to the summit meeting by Mr. Obama’s absence. “No other country can replace” the American engagement in Asia, he said. “Not China, not Japan, not any other power. That is something which we continue and encourage at every opportunity.”

Related: PacNet #74 – Pogo was Right! | Center for Strategic and International Studies Memo to Congressional Republicans: Remember Ronald Reagan’s “shining city on a hill”? You just turned the lights off. Memo to President Obama: remember your “pivot” to Asia? Its credibility is fading even faster than Congressional approval ratings.

Tony Abbott expects free trade pact with China in the next 12 months | World news | theguardian.com Tony Abbott told reporters in Bali he would be “disappointed” if Australia couldn’t conclude a “significant” free trade agreement with China during the next 12 months. Abbott also used the opportunity to send an unequivocally positive message on Chinese investment in Australia, including from state owned enterprises – an issue that has been a vexed one internally within the Coalition because of philosophical resistance by the Nationals to foreign purchases of farmland and agri-businesses, particularly by foreign government interests.

China’s Xi sees ‘long and tortuous’ world economic recovery | Reuters Chinese President Xi Jinping said on Monday he expected a “long and tortuous process” of world economic recovery, while China’s economic growth rate of about 7 percent was “within a reasonable and expected range”.// 习近平在亚太经合组织第二十一次领导人非正式会议上的讲话-高层动态-新华网

World Bank cuts China, East Asia growth forecasts | Reuters The World Bank now expects the Chinese economy to expand by 7.5 percent this year, down from its April forecast of 8.3 percent and below the International Monetary Fund’s most recent forecast of 7.75 percent. China’s 2014 growth is estimated at 7.7 percent, the World Bank said, down 0.3 percentage point from the previous prediction. The IMF is due to publish its new world economic outlook on Tuesday ahead of the fund’s annual meeting.

Meeting of cross-strait officials moves China-Taiwan exchanges forward – The Asahi Shimbun Top Chinese and Taiwanese officials in charge of cross-strait relations met for the first time in what some observers believe is an attempt to pave the way for a historic China-Taiwan summit, possibly in Beijing next year. Zhang Zhijun, director of the Taiwan Affairs Office of China’s State Council, and Wang Yu-chi, minister of the Mainland Affairs Council of Taiwan’s Executive Yuan, sat in on a meeting between Chinese President Xi Jinping and former Taiwanese Vice President Vincent Siew on Oct. 6.

Related: Use of official titles at APEC marks milestone in Taiwan-China ties–WantChinaTimes.com Chou Jih-shine, a professor at National Taiwan University’s Graduate Institute of National Development in Taipei, said the use of official titles marked a big step forward, noting that Beijing had previously recognized only the Straits Exchange Foundation — Taiwan’s semi-official organization in charge of cross-strait negotiation — and not the Cabinet-level MAC.

Public opinion analysts get exam recognition |Society |chinadaily.com.cn different than monitor or censor // China is set to officially recognize the profession of public opinion analysts, a move insiders say will help policymakers better understand and engage with society. The Ministry of Human Resources and Social Security plans to issue its first batch of certificates for public opinion analysts in mid-December. On Sept 5, the ministry’s China Employment Training Technical Instruction Center andpeople.com.cn, a news portal run by People’s Daily, jointly launched a training and testing program for the profession….The first training class will start in Beijing on Oct 14, according to a news release. Enrollment costs 7,800 yuan ($1,270), which covers tuition and exam fees. Weng Zhihao, a 23-year-old college student from Beijing who majored in journalism, said he is interested in signing up for the training course, believing the certificate will make him more competitive in the job market.

SPECIAL REPORT-The education of China’s oil company | Reuters it is now anything but clear that the Nexen acquisition was wise for CNOOC’s constituents – the Chinese government and shareholders in the publicly traded company. As one company insider told Reuters: “For CNOOC, the closing of the deal marked the end of euphoria, and the beginning of pain.” The central problem, analysts say, is that in a global energy industry transformed by the shale gas revolution in North America and elsewhere, CNOOC overpaid. And it underestimated the risks of monetizing the landlocked oil-sands and shale-gas assets in Canada that account for 75 percent of Nexen’s proven and probable reserves.

 

BUSINESS, ECONOMY AND TRADE

China to rejoin IT trade talks to cut tariffs on electronic goods – FT.com US-led negotiations to reduce tariffs on a wide range of electronic goods are set to resume within weeks after China indicated it would shorten a list of products it had wanted excluded that caused the plurilateral IT trade talks to collapse in July. The move came as China also submitted a formal bid to join negotiations to reach a separate agreement on regulating the $4tn annual global trade in services.

China’s Investment Addiction by Yu Yongding – Project Syndicate While investment in social housing should be welcomed, real-estate investment, currently running at 10-13% of GDP, is already far too high. On the other hand, if real-estate investment growth falls, overcapacity will be difficult to eliminate. This dilemma highlights the structural-adjustment challenge that China faces – and should give investors reason to hold their breath. That said, there are two caveats. First, unlike other categories of investment, real estate investment does not increase productive capital stock. There is no fundamental difference between a house and an expensive durable consumer good. Second, in China’s statistics, the growth rate of gross fixed-asset investment is much higher than that of gross capital formation. This indicates that data on the growth rate of fixed-asset investment may have exaggerated the pace of capital-stock accumulation. Hence, while the Chinese government should be firm on reducing the dependence of growth on investment, it must exercise utmost care when doing so.

国庆多地现抢房大战 超十市房价涨幅超调控目标_新闻_腾讯网 Home buying a popular activity over the holiday, more than 10 cities have now seen price increases exceed the government’s real estate repression policy price targets

党报批上市公司蜂拥办银行 资本高回报是主因|上市公司|民营银行|高回报_21世纪网 核心提示:从战略的角度来考虑,上市公司积极申请银行牌照内在原因,资本高回报率,通过银行体系实现自身封闭体系内的资金流通。

 

POLITICS AND LAW

曝村干部花巨资办婚宴 北京朝阳区纪委介入调查_网易新闻中心 Beijing Chaoyang District Discipline Inspection Commission already investigating the lavish, 3 day, 1.6 million wedding thrown for the son of a Beijing village official over the holiday…brazenness remarkable // 对于在国家会议中心举办婚宴和请演员一事,马林祥说:“这些钱都是亲家花的,具体花多少我也不清楚。” 马林祥表示,亲家是江苏人,经济条件比较好,两家决定在北京合办婚礼。他说:“作为一个村干部,我也知道中央的 八项规定 ,不该这么搞,但亲家执意要搞,我拦也没拦住。我接受组织的批评和调查。”

薄瓜瓜的两年:从明星留学生到“失宠”小儿子-燕赵都市网-河北新闻资讯一网打尽 interesting look at Bo Guagua in a local newspaper

China: ‘Capitulate or Things Will Get Worse’ by Perry Link | The New York Review of Books excellent essay by Perry Link, paywalled // Today China-watchers are writing about the regime’s “resilience” and “adaptability.” Sebastian Heilmann and Elizabeth Perry have published a conference volume called Mao’s Invisible Hand, in which they describe in detail this surprising resilience. They trace its origins to Mao Zedong, whose “guerrilla policy style” permitted flexibility in all things but one: Mao stayed on top. The approach, they write, “is fundamentally dictatorial, opportunistic, and merciless. Unchecked by institutions of accountability, guerrilla leaders pursue their objectives with little concern for those who stand in their way.”

党报文章指出一些教师对社会主义前途信心不强|教师|社会主义|理想信念_新浪新闻 从目前的情况看,教师的理想信念状况,主流是积极健康向上的。他们对党的大政方针、对中国特色社会主义事业的理想高度认同;他们时刻关注国家的前途命运,毫无保留地传播科学文化知识,为全社会树立了崇高的道德标杆;他们不改育人之乐,以学生的成长进步为毕生追求,成为良好社会主义道德风尚的推动者。当然,我们也应该注意到,当代教师在理想信念方面呈现出日益多样化的倾向,一些教师在市场经济的冲击下,过于重视和追求个人私利,共产主义理想信念淡薄,对社会主义前途信心不强,各种消极的政治观点和错误的价值观念还存在一定的市场。

大爱说爱国_新闻频道_央视网 CCTV series during the National Day Holiday Week, interviewed 2000+ people, asked them “what does patriotism mean to you”? // 说到爱国,你会想起哪一句名言或一句歌词?说起爱国者,你会想到谁?你认为哪种行为是爱国?哪种行为是不爱国?2013年国庆期间,中央电视台推出以爱国为主题的“走基层·百姓心声”特别节目,欢迎您的收看! // [视频]国庆特别节目“爱国 让你想起什么”_新闻频道_央视网 Monday CCTV Evening News summary of the patriotism series

China’s Xi Jinping Gets Mocked After Apparent Bid to Milk New Zealand Dairy Scandal – China Real Time Report – WSJ Xinhua said Mr. Xi “urged New Zealand to take tough measures to ensure food quality and thus maintain the sound momentum of economic and trade cooperation between the two countries.” Chinese social media users, inundated on a monthly basis with reports of domestic food scandals, responded with a collective face-palm. “The entire country is laughing,” wrote one user of the Twitter-like Sina Weibo microblogging service, where the news was greeted with an outpouring of animated guffawing emoticons.

于建嵘挂职地官员现分歧 乡村建设计划暂停(图)_资讯频道_凤凰网 昨日下午,记者联系到于建嵘时,他称:由于当地领导之间看法不一,自己的抢救布依族村落的发展计划目前处于暂停状态。// Yu Jianrong running into resistance in his new post in Guizhou

 

FOREIGN AND DEFENSE AFFAIRS

China warns U.S., Japan, Australia not to gang up in sea disputes | Reuters “The United States, Japan and Australia are allies but this should not become an excuse to interfere in territorial disputes, otherwise it will only make the problems more complicated and harm the interests of all parties,” Chinese Foreign Ministry spokeswoman Hua Chunying said on Monday. “We urge the relevant countries to respect facts, distinguish right from wrong, be cautious, and stop all words and deeds that are not beneficial to the proper handling of the issue and undermine regional stability,” she said in comments on the ministry website.

Kremlin.ru–President of Russia–Meeting with President of China Xi Jinping We are continuing to develop our political contacts. I would like to note that our coordinated position on the international arena is paying off. We have been able to achieve coordinated decisions on the most difficult matters, with Syrian issues being the latest example. We are developing economic ties. We are cooperating in some very sensitive areas, such as military technology cooperation and military affairs. Our service members have already conducted two major trainings, on land and in the sea. We have very good prospects. I am happy for the opportunity to discuss the directions of our further cooperation with you today.

Chinese Views on Cybersecurity in Foreign Relations | Hoover Institution Michael D. Swaine–In recent months, the issue of cybersecurity has become a major source of both tension and potential cooperation for the U.S.-China relationship. With Western assessments pointing to China—not only to Chinese individuals, but also most likely the Chinese government (and especially military) sources—as the source of an increasing number of destructive cyberattacks on commercial enterprises and government institutions, Washington has greatly intensified its expression of concern to Beijing.

Avery Goldstein | Imminent Threats to U.S.-China Relations | Foreign Affairs It is true that China and the United States are not currently adversaries — certainly not in the way that the Soviet Union and the United States were during the Cold War. But the risk of a U.S.-Chinese crisis might actually be greater than it would be if Beijing and Washington were locked in a zero-sum, life-and-death struggle. As armed adversaries on hair-trigger alert, the Soviet Union and the United States understood that their fundamentally opposed interests might bring about a war. After going through several nerve-racking confrontations over Berlin and Cuba, they gained an understanding of each other’s vital interests — not to be challenged without risking a crisis — and developed mechanisms to avoid escalation. China and the United States have yet to reach a similar shared understanding about vital interests or to develop reliable means for crisis management.

Photo collections of PLA’s submarines – Xinhua

India and China preparing to ink Border Defence Cooperation Agreement during Manmohan Singh’s Beijing visit : India Today On the 22nd of October, Prime Minister Manmohan Singh will be travelling to Beijing. Sources have told Headlines Today, that in all likelihood, the two sides will sign the Border Defence Cooperation Agreement or the BDCA during this visit. Here are some of the exclusive details of what the Indian side is pushing for in the final draft

 

HONG KONG, MACAO AND TAIWAN

Settling in for the Long Haul: Stability with Chinese Characteristics | Hoover Institution Alan D. Romberg–The political turmoil created in Taiwan by the Kuomintang’s move to oust Legislative Yuan speaker Wang Jin-pyng in mid-September capped off several months of tumult over such issues as the abuse-related heatstroke death of a military recruit, the Fourth Nuclear Power Plant, and the recently signed cross-Strait services trade agreement. While the extent of the fallout from the Wang episode is yet to be determined, this latest turn of the political wheel has cast into some doubt the shape of politics in Taiwan going forward and the fate of pending sensitive legislative issues. In this context, and as Taiwan’s economic prospects for 2013 remained shaky, both major political parties began to position themselves not only for the 2014 seven-in-one local elections, but also for the 2016 presidential contest. Cross-Strait political relations emerged as an increasingly visible aspect of that positioning.

 

SOCIETY, ART, SPORTS, CULTURE AND HISTORY

Is Chinese Contemporary Ink Painting the Next Big Thing? – Scene Asia – WSJ The smart money has been in this for a while, now it is harvest time // Art dealers and auction houses are saying the traditional is new again, marketing contemporary ink paintings to mainland Chinese buyers. Their hope is to expand and diversify the art market in China by tapping into an art form that domestic audiences are familiar with.

The New Digital Playbook for Learning Mandarin Chinese – Businessweek Instead of waiting years to begin reading Chinese newspapers, a beginning or intermediate Mandarin student can dive right into People’s Daily or Southern Weekly and use social-media apps such as Weibo or Weixin by easily looking up unknown words in Web-based dictionaries. It makes for slow reading, but the ability to focus on current texts can make a huge difference in student engagement. “Before, students were limited for the first few years to canned textbook materials and a teacher’s vocabulary lists,” recalls Moser. “Today, learning Chinese doesn’t have to be a horrible, front-loaded nightmare anymore.”

Pleco Software – Learn Chinese with our Dictionaries for iPhone, iPad and Android worth every penny

河南禁止使用外国人名和地名作为地名_网易新闻中心 Henan bans foreign person or place names in the naming of places in the province // 近日,省政府发布第156号政府令,宣布《河南省地名管理办法》经省政府常务会议通过,自2013年10月15日起施行。这意味着,“一地多名、一名多写”的现象被叫停。《办法》还禁止使用外国人名和地名作地名。

 

FOOD AND TRAVEL

国航航班给乘客吃过期烧饼 致机上多人腹泄_新闻_腾讯网 expired buns served on an Air China flight, diarrhea ensues// 昨天下午,张女士一家人乘坐国航CA1268次航班返回北京,飞机上发放了晚餐,包括一个牛肉烧饼,可等张女士他们吃完后才发现,烧饼已过期4天,她赶紧请乘务长告知其他乘客,不要误食过期食品。没想到,乘务长却拒绝告知。半小时后,张女士的家人开始肚子疼,其他乘客也有呕吐、腹泻症状。张女士要求国航给个说法,却被推来推去,直至昨晚10时才有工作人员带他们到医院检查。今天上午,国航相关负责人表示,将立即调查此事。

 

BEIJING

Beijing’s 20 Most Interesting People: Bill Bishop | the Beijinger | Beijing classifieds, forum, directory, blog, and more | thebeijinger.com I pulled some strings…

 

BOOKS AND LITERATURE

The Man with the Compound Eyes – review | Books | The Guardian What do you expect when you pick up a novel – very probably your first – from Taiwan? A spiky assertion of independence, perhaps, or wistful, Japanese-inspired fables? The literary landscape of mainland China has begun to take shape for western readers, but that of Taiwan remains a blank – despite the island’s sophisticated and long-established publishing industry. The English translation of Wu Ming-Yi’s intriguing fourth work of fiction simultaneously plunges the reader into the melting pot of contemporary Taiwanese fiction and refuses any attempt to define it. //The book on Amazon 

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