- David Gitter, Julia Bowie, Brock Erdahl
Weekly Report 1|13 1.13.2018-1.19.2018
EXECUTIVE SUMMARY
The Politburo Standing Committee met this week to hear work reports from the Party groups of various state bodies. At the meeting, it was stressed that this practice strengthens and unites the Party’s leadership.
An article published by several important Party outlets, including the People's Daily, PLA Daily and Guangming Daily, says that the global challenges of poverty, climate change, and terrorism have presented China a window of opportunity to take a leadership position in shaping the global order. The article was recognized as evidence of China’s growing global ambitions.
The Central Commission for Discipline Inspection concluded its second plenum with calls for more a more aggressive posture in the anti-corruption campaign and more attention to the Party’s “political life.”
New regulations were introduced to the Commission for Discipline Inspection of the Central Military Commission intended to reinforce the Party’s “absolute leadership over the Army.”
The National Bureau of Statistics released its annual economic statistics. Every indicator described is reported as increasing at an accelerated rate compared to last year.
SENIOR LEADERS
Xi Jinping Convenes Meeting of the Politburo Standing Committee
1.15 The Politburo Standing Committee (PSC) met in Beijing to hear the work reports from the Party groups (党组) of various state bodies, including the Standing Committee of the National People’s Congress, State Council, National Committee of the Chinese People’s Political Consultative Conference (CPPCC), Supreme People’s Court, and Supreme People’s Procuratorate. An article posted to CPC News Net emphasized that the PSC has made a practice of listening to the work reports of the above-mentioned bodies for three consecutive years, a necessary and meaningful practice which has proven to strengthen and unite the Party’s leadership, and must be adhered to. The article concluded that, as this year is a crucial year for comprehensively building a moderately prosperous society and implementing the 13th Five Year Plan, the above-mentioned bodies must maintain a high degree of unanimity with the CCP Central Committee with Xi Jinping at its core.
Xi Jinping and Trump Conduct Phone Call
1.16 A CCTV article summarizes the important points of Xi’s phone call with US President Donald Trump. According to the article, Xi told Trump that US-China relations have remained stable over the past year. He emphasized that US-China economic and trade cooperation has brought tangible benefits to both countries, and both sides should take a constructive approach to opening up their markets to each other and resolving trade concerns. Xi also answered questions about the situation on the Korean peninsula, pointing out positive changes in the region. He said that China would continue to work closely with the international community, including the US, to make continuous progress in building up mutual respect, mutual trust, strengthening cooperation, and promoting a “proper solution.”
CBRC Chairman Guo Shuqing: Fight Well the Battle to Prevent and Solve Serious Financial Risks
1.17 China Banking Regulatory Commission (CBRC) Chairman Guo Shuqing (郭树清) said in an interview with People’s Daily that although China’s financial system is currently under control, it is still prone to risks. He pointed out that many internal control mechanisms of financial institutions are still inadequate, and the shadow banking level is still high. Furthermore, illicit financial activity has often occurred. Therefore, once a major systemic financial upheaval takes place, economic and social development will be severely affected and the goal to achieve comprehensively building a moderately prosperous society will be disturbed. In response to this, Guo suggested that the corporate debt ratio and the leverage ratio of households should be lowered, and cross-market financial products should be strictly regulated. His statement contrasted the head of the People’s Bank of China Zhou Xiaochuan (周小川)’s comments in last October, saying that China did not have to cut the household leverage ratio. The change demonstrates that China may now strengthen its control on lending to sectors such as the property sector for risk control.
PROPAGANDA WORK
“Breaking the Silence”
1.12 People’s Daily published a brief comment via Weibo in support of China’s burgeoning #MeToo (#WoYeShi) movement, after a Beihang University professor was removed from his position due to sexual harassment allegations against him. The post urged more to people break their silence in order to reduce the problem of sexual harassment of college campuses.
Xuan Yan: Firmly Grasp the Historical Period of Opportunity
1.15 An article published under the byline Xuan Yan (宣言) was posted on several important Party outlets including the People’s Daily, Guangming Daily, and PLA Daily. The article supplements Xi Jinping’s January 5 declaration that China is now at a "historical period of opportunity." The article states that global problems such as the poverty, terrorism, and climate change continuously emerge and that China’s leadership presents a new option for the world to solve these issues. Consequently, the world had never needed or paid this much attention to China until now. Facing this window of opportunity, China has to develop quickly (快干), sturdily (实干), and effectively (会干). At its conclusion, the article points out that China will follow the path of comprehensively building a moderately prosperous society by 2020, fundamentally realize the modernization of socialism by 2035, and comprehensively build a strong and modernized socialist nation (社会主义现代化强国) by 2050.
Tsinghua University Establishes Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era Research Center
1.15 Tsinghua University established a research center for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era (习近平新时代中国特色社会主义思想研究院). The center will hold seminars and publish academic papers that address Xi Thought and focus on creating an innovative mechanism for educational propaganda work, such as using Internet columns and Wechat. The academic committee includes the Consulting Committee for the CCP Central Committee's Project for the Study and Development of Marxist Theory Director Xu Guangchun (徐光春) and Qiushi Journal President Li Jie (李捷). Recently, ten research centers for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era have been approved by the Central Committee to be established within the Central Party School, Ministry of Education, Chinese Academy of Social Sciences, National Defence University, Tsinghua University, Renmin University of China, and Beijing University, etc.
Zhong Sheng Series: 2018 World Circumstances Forecasts
People’s Daily
1.15-1.19 The People’s Daily published a series of 2018 world circumstances forecasts using the commentary pen name “Zhong Sheng” (钟声), which stands for “Voice of China” and/or “Sounding the Alarm Bell” and authoritatively transmits the official positions of the People’s Daily on matters of international affairs.
The first article explains how major changes in world affairs that occured in 2017 should be understood. Rather than describing the world as disordered and chaotic, the article argues it would be better to say that the world is transforming and adjusting. More specifically, it claims the era of high-income countries dominating world affairs has ended, the roles of new market economies and developing countries have increased in importance, and that a failure to grasp these developments would disrupt world governance. The article ends with a call for all countries to work together to resolve global challenges and create a peaceful, prosperous future.
The second article focuses on the importance of using reform to promote long-term economic and social development in 2018. Due to recent changes in the world order, including the global economy’s escape from the shadow of economic crisis and the conclusion of important elections in major countries, the article argues that 2018 is a period of historic opportunity for reform which can lead to a higher level of prosperity. It cites China’s experience with Reform and Opening Up as a powerful example of a country having the courage and wisdom necessary to undertake reform and claims every country’s reform policy must be coordinated and strategically linked to ensure the strong, sustainable, and balanced growth of the world economy.
The third article highlights the significance of innovation in the modern economy. It notes that, since only innovators are strong, innovation has become a high-level site of global competition for businesses and countries alike. Additionally, it states that, just as the rise of “Made in China” has already transformed the world economy, “Innovated in China” is also increasingly responsible for profound changes. Yet, the article also warns that a foundation of cooperation is necessary to ensure competition remains orderly and serves as a positive catalyst. It portrays China as an advocate of global cooperation and innovative development and uses the Belt and Road Initiative as evidence of both.
The fourth article centers on prolonging the “sweet moment” (甜蜜时刻) the world economy is currently experiencing. It lists the world economy’s recovery from the global financial crisis and the optimistic predictions of future economic growth as positive trends. However, the article notes the world economy still faces many challenges, including the public’s lingering sense of crisis and fear that bubbles will pop, as well as various structural factors. It also claims scientific and technological progress usually emerges during times of economic crisis, drives growth, and serves as the root of recovery. Accordingly, new technologies that appeared during the global financial crisis are described as constituting a historic opportunity with limitless potential.
The fifth article expresses concern over the global ideological trends of populism, protectionism, and isolationism, asserting they cast a shadow of instability and uncertainty over the world. It locates the roots of these trends in the enlargement of the wealth gap and loss of a “sense of gain” (获得感) among the masses. The article states the Party has led China along the path toward poverty alleviation, a moderately prosperous society, and socialist modernization by taking innovative, coordinated, green, open, and shared developmental concepts as a guide. Likewise, it argues Chinese concepts and practices provide the world with a clear way out of the predicaments caused by economic globalization.
Freedom of Speech is not a Loincloth for “Hong Kong Independence”
1.18 The student government association of the Chinese University of Hong Kong (CUHK) recently posted a recruitment ad for the “Society for the Study of Hong Kong Independence” (香港独立研究学会), which is intended to discuss the “feasibility of realizing ‘Hong Kong independence’” on campus. A People’s Daily Foreign Edition article uses the Chinese idiom “hanging out a sheep's head while selling dog meat” (挂羊头卖狗肉), which means to dishonestly disguise one’s action, to describe using academic freedom as “the sheep head” used to sell the “dog meat” of civil disobedience (公民抗命) and Hong Kong self-determination (香港自决).
The article criticizes Associate Professor of Law at the University of Hong Kong Benny Tai (戴耀廷) and Scholarism (学民思潮) student leader Joshua Wong (黄之锋) for calling the discussion of self-determination and Hong Kong Independence freedom of speech. The article argues that while Hong Kong does have academic freedom, obeying the law should be the premise for any kind of freedom. Spreading “Hong Kong Independence” has violated the national constitution and the Basic Law. The “air of freedom,” which is supposed to be a breeding ground for academia, has now been used as a “loincloth” for political struggles.
UNITED FRONT WORK
Wang Yang Attends Nationwide United Front Work Department Heads Meeting
1.16 A meeting for the heads of the united front work departments nationwide (全国统战部长会议) was held in Beijing on January 16th. United Front Work Department head and CCP Secretariat member You Quan (尤权) presided over the meeting and emphasized the reinforcement of Party building, especially political construction, in the united front work system. Politburo Standing Committee member and Vice Premier Wang Yang (汪洋) attended the meeting and said that the study and implementation of the spirit of the 19th Party Congress should be the core mission of the Party’s united front work.
Nationwide United Front Work Department Heads Meeting: Reinforce United Front Work Targeting the Members of the New Social Classes This Year
1.18 The Nationwide United Front Work Department Heads Meeting laid out the overall requirements for united front work in 2018. Through its Wechat account, the United Front Work Department published an article saying that “central theme,” “opportunity,” and “implementation” are the three key words to understand these requirements. First, the “central theme” of the requirements is to set the deep study and implementation of the spirit of the 19th Party Congress as the primary political task, and use it to guide united front work. Second, in order to grasp the new “opportunity” for united front work in the new era, united front work must adapt to the new missions it faces in the new era. Third, the “implementation” part of the requirement emphasizes resolutely carrying out the Central Committee’s decisions and deployments on united front work.
The article lists seven measures for implementation, including increasing the efficiency of the multi-party cooperation system by reinforcing the ideological and political construction of the democratic parties, and strengthening united front work targeting intellectuals outside of the Party, especially members of the new social classes. Other measures include focusing on united front work in the non-public sector of the economy, raising the political quality of religious representatives (代表人士), and reinforcing national, ethnic, and cultural identities in Hong Kong, Macau, and Taiwan.
PARTY DISCIPLINE
19th CCDI Second Plenum Communique
1.13 At the close of the CCDI’s second plenum, Xinhua released a communique that outlines the CCDI’s priorities for 2018. First, the CCDI must prioritize the Party’s political construction, improving political discipline and strengthening supervision of the political life of the Party. Second, it must comprehensively reform the state supervisory system, strengthening the Party’s unified leadership over anti-corruption work and establishing a unified, comprehensive, authoritative, and efficient supervision system that covers all public officials exercising public authority. Third, consolidate and expand the spiritual achievements of the “eight guidelines” (中央八项规定). Fourth, allow inspections to manifest as a “sharp sword.” Fifth, comprehensively strengthen the Party’s discipline construction by improving the Party’s discipline education. Sixth, consolidate and develop the Party’s “overwhelming posture” (压倒性态势) in the struggle against corruption. Seventh, firmly bring corruption close to the masses under full control, focusing on controlling corruption in the field of poverty alleviation. Eighth, promote the full implementation of strict Party responsibility. The communique concludes that it is “necessary to enhance the sense of urgency in preparing for danger during times of peace.”
Zhao Leji: Build the 19th CCDI Members into a Collective that Stays Loyal to the Party, Takes on Responsibilities Willingly, Fights Firmly, and is Highly-Skilled, Upright and with Integrity
1.15 Central Commission for Discipline Inspection (CCDI) Secretary Zhao Leji (赵乐际) addressed a CCDI seminar on implementing Xi Jinping’s thought on socialism with Chinese characteristics for a new era after the close of its second plenum, emphasizing loyalty to the Party and the Party’s core leadership. He told the assembly that in order to effectively execute discipline and supervision work, CCDI members must take Xi thought on socialism with Chinese characteristics as a guide. He emphasized that CCDI members must resolutely safeguard Xi Jinping’s central position in the Central Committee and the Party, and resolutely safeguard the authority of the Party’s centralized and unified leadership. Zhao said that being a CCDI member is a duty, not an honor. Members must take the lead in demonstrating loyalty to the Party and build themselves into a team of CCDI cadres that is trustworthy.
Violations of the Eight Guidelines in December 2017
1.17 In December 2017, 7,594 individuals were investigated, 10,672 were punished, and 7,329 received Party and governmental disciplinary punishments for violations of the eight guidelines. Throughout 2017, these figures were 51,008, 71,644, and 50,069 respectively.
Increase Efforts to Investigate and Punish the Four Forms of Decadence
1.17 The CCDI’s website published a special commentary on investigating and punishing the four forms of decadence and violations of the eight guidelines. It stated that the growth in the number of cases in December 2017 reflected a zero tolerance policy following the 19th Party Congress. The commentary also contained three diagrams. The first classified December 2017’s investigations into nine types of violations. Granting subsidies and benefits was the largest and accounted for nearly 30% of the violations. The second categorized those punished in December 2017 according to their administrative level. The vast majority (about 90%) came from the village level while none came from the provincial level. The third demonstrated that more punishments were carried out in December 2017 than any other month of the year, exceeding the nearest month by almost 3,000.
CENTRAL MILITARY COMMISSION (CMC)
“Central Military Commission Inspection Work Regulations”
1.17 The People’s Daily announced that new inspection work regulations for the Central Military Commission came into effect on January 15. The regulations are intended to implement the Chairman Responsibility System, strengthen the armed forces for the new era, and uphold the Party’s absolute leadership over the army. The announcement emphasizes that implementing these directives from the Central Committee is of great significance. The regulations will guide the political inspection work of the CMC, Army, Navy, Air Force, Rocket Force, Strategic Support Force, and People’s Armed Police in order to discover and correct the weak governance of the Party, indifference to Party ideology, loose organization, and the relaxation of discipline.
Zhang Youxia: Resolutely Implement Chairman Xi’s Important Directives, Unswervingly and Steadfastly Advance the Strict Rule of the Party over the Army
1.17 Politburo member and CMC Vice Chairman Zhang Youxia (张又侠) addressed a meeting of the Commission for Discipline Inspection of the Central Military Commission emphasizing the strict control of the Party over the military and the necessity of implementing the Party’s strict demands.
COMPREHENSIVELY DEEPENING REFORM
China’s State Owned Enterprises Increase Profitability by 15.2% Achieving a 5-Year High
1.16 Xiao Yaqing (肖亚庆), chairman of the State-owned Asset Supervision and Administrative Commission of the State Council (中国国务院国资委) also known as SASCA, released data on 2017 SOE performance at a recent meeting. Not only did SOEs overall break a 5-year record with an annual profit of 1.4 trillion yuan ($218 billion), but additionally State-Owned Supervisory Enterprises (国资监管系统企业) were reported to have increased YoY profitability by 23.5% with 2.9 trillion yuan ($452 billion). The article quotes Li Jin (李锦), a researcher at the Research Center for State-owned Enterprise Reform and Development at Renmin University of China, who notes that this meeting is significant as it is the first time SASCA included improving return rates, liquidity, and reducing debt-to-asset ratios among its priorities; while explicitly omitting quantitative growth targets.
National Bureau of Statistics: 2017 GDP Increases 6.9% to Reach 82.7122 Trillion Yuan
1.18 The National Bureau of Statistics released its annual economic statistics at 3pm (originally, the announcement was scheduled for 10 am.) The announcement includes statistics on growth across industries and corporate structures, as well as data on consumer prices, incomes, and population. Every indicator described is reported as increasing at an accelerated rate compared to last year. A few of the highlights are included below:
Online shopping, real estate, and services: The operating income of services increased by 13.9% from January to November 2017, and operating profit increased by 30.4%. Infrastructure investment increased 19% to reach 14 trillion yuan ($2.186 trillion). Total consumer good sales increased 10.2% and reached 36.63 trillion yuan ($5.72 trillion). Residential development and purchasing increased as well, with 10.98 trillion yuan ($1.71 trillion) put towards real estate development this past year. Online retail accounted for 7.18 trillion yuan ($1.12 trillion) worth of sales, over 32.2% more than 2016.
Consumer prices and incomes: Overall consumer prices rose by 1.6%, per capita income increased to 25,974 yuan ($4055) (urban residents: 36,396 yuan; rural residents: 13,432 – according to the report rural residents saw a greater increase than urban residents) and per capita consumption expenditures increased to 18,322 yuan ($2860.) The report listed disposable income by groups, low-income: 5,958 yuan ($930), middle-lower income: 13,843 yuan ($2161), middle-income: 22,495 ($3513), middle-higher income: 34,547 ($5394), higher income: 64,934 yuan ($10,137). There were 286.52 million migrant workers, 4.81 million more than the previous year.
Supply Side Reform: Strong progress was reported on Xi Jinping’s supply side reform strategy “three cuts, one reduction, one strengthening” (三去一降一补). The strategy focuses on eliminating overcapacity, excess inventory, and high debt. The report credits successful follow-through on “three paths towards reduction and solution” in dealing with steel and coal overcapacity, housing oversupply, and reducing industrial debt ratio. The report also affirms solid progress being made in “green development” (绿色发展).
MISCELLANEOUS
Wang Yi: Africa Cannot Pass Over Participating in the Belt Road Initiative
1.14 Foreign Minister Wang Yi (王毅), currently on a tour of Africa, gave a speech in Rwanda to address the upcoming China-Africa Cooperation Summit (中非合作论坛峰会) and the importance of Africa in the Belt Road Initiative. He expressed the hope Africa and China would work together on BRI, thus strengthening their “mutually beneficial cooperation” (互利合作) and work toward the “common development” (共同发展) of China and the world. Wang linked BRI’s goals to the UN 2030 Agenda for Sustainable Development, and invoked the principal of “discussing together, building together, and sharing together” (共商共建共享).
INTERNATIONAL LIAISON WORK
1.15 International Department Vice Minister Guo Yezhou (郭业洲) met with the Chairman of the 48 Group Club Stephen Perry in Beijing. They exchanged opinions on issues of common concern in China-United Kingdom relations.
1.17 International Department Vice Minister Li Jun (李军) met with an Algerian National Liberation Front cadre inspection team in Beijing.
1.19 Guo Yezhou met with the British Ambassador to China Barbara Woodward in Beijing.
ORGANIZATION WORK
1.16 Liang Yanshun (梁言顺) was appointed Deputy Secretary of the Work Committee of the Central Government Departments under the CPC Central Committee.