A weekly bulletin offering news and analysis related to the Middle Kingdom.
1. Constitutional changes
On Sunday, March 11, 2018, NPC delegates voted in favor of amending the Chinese Constitution. Just two out of the 2,964 delegates opposed the amendments, with three others abstaining. The biggest changes, of course, were regarding presidential term limits, but if you are interested in all the other revisions, then this NPC Observer translation is a good resource.
While Xi Jinping now appears to now be firmly in command, the decision to upend party norms laid down during the Deng Xiaoping era has led to disquiet. This can be gauged from criticism within and outside China.
Responding to criticism in international media and to some degree at home, the Chinese media has been aggressive to say the least. For instance, China Daily was uncharacteristically vitriolic calling critical observers “mean” and “malicious” owing to their “irrational, subjective and unprofessional ideological bias.” Meanwhile, there have also been attempts to rationalise the changes as “much needed move for the development of the Party and country.” Chinese media and officials have also sought to stress that this “doesn’t mean there will be a change in the retirement system of the Party and state leaders or a lifelong tenure for these officials.” That explanation is clearly on very shaky ground.
Two additional pieces in this context that I’d recommend are ICS’ Jabin Jacob’s SCMP piece on the implications for India and my take in Al Jazeera on why despite all the accumulation of power, Xi and the Party remain acutely vulnerable.
2. Government restructuring
Two days after the constitutional changes, a mammoth government restructuring plan was made public. The plan essentially entails cutting down the number of ministries and departments, creating new organs and restructuring roles and responsibilities.
So, the State Council will now consist of 26 ministries, down 8 from earlier, and commissions in addition to the General Office of the State Council. Official reasoning for the changes are that they are aimed at making “the government better-structured, more efficient, and service-oriented,” improve “law-based governance with clear functions and responsibilities” and to “strengthen the Party’s long-term governance capability.”
NPC Observer has an excellent and detailed graphical breakdown of the plan. I highly recommend that you check it out. But if you are short on time, here’s a quick cheat-sheet on the key changes:
- Merging of banking and insurance regulators, with the People’s Bank being strengthened
- Formation of State International Development Cooperation Agency in order to better channelise foreign aid.
- Weakening of the NDRC amid corruption controversies, claims of inefficiency and perceived ideological limitations.
- Formation of a new state market regulatory administration — this will subsume a number of departments, harmonising work.
- Creation of ministry for veteran affairs — (Details Below)
- China’s family planning policy is just about a matter of the past now.
3. The National Supervision Commission
The draft law in this context is currently being discussed. This is a mega agency that is being put together, with implications for reform and national stability.
What we’ve learned from the draft law so far is that:
- The law is aimed at enhancing the leadership of the CPC on anti-corruption campaigns.
- The NSC is a parallel structure to the government; it is ranked above the Supreme People’s Procuratorate and the Supreme People’s Court. It will “not be subject to interference from the government, social organizations and individuals.”
- New supervisory commissions will be established at the national, provincial, city and county levels.
- The commissions are entrusted to oversee state functionaries, investigate corruption cases such as bribery, embezzlement and abuse of power, impose administrative penalty on corrupt officials, and hand over criminal cases to prosecutors.
- Its powers include the right to question, interrogate, freeze assets, detain and search premises during its investigations.
- The NSC will watch for misconduct not only among the Communist Party’s 90 million members but also among managers of state-owned enterprises, hospitals, educational and cultural institutions, sports organisations and even village governments and research institutes, with only managers being covered.
State media has been keen to project the NSC as a Chinese innovation in the global fight against corruption.
4. US-China ties: Trump considers indefinite tariffs, investment restrictions against China/ US asks China for $100 bn plan to cut trade deficit/China had a fraught relationship with Rex Tillerson, but would prefer him over his ‘hawkish’ successor
5. North Korea talks: Trump, Xi discuss North Korea talks — a Chinese perspective on the call & White House readout. Two good reads on this Ankit Panda and Vipin Narang WOTR piece and this Bonnie Glaser piece for NPR.
6. Crackdown in Hongkong: Hong Kong proposes jail terms for insulting national anthem
7. Xinjiang official vows to continue ‘intense’ campaign against separatists/Muslims must practice Islam with Chinese characteristics to avoid societal division — This Sinica Podcast with AP’s Gerry Shih is an excellent resource to understand the complexities of freedom of religion, terrorism and separatism and China’s domestic security concerns.
II. Indian Interest
In continuing with recent steps to deepen the budding recent thaw in ties, Song Tao, the head of the CPC International Liaison Department, is expected to visit New Delhi next week. An interesting angle explored in the TOI piece on this is the Indian government’s desire to develop an alternative channel to China’s top leadership after the aggressive role of the foreign ministry during the Doklam standoff. That rationale makes further sense when one reads that Indian ambassador Gautam Bambawale met with the Guo Yezhou, ILD Deputy Director ahead of planned visits by Indian Defense Minister Nirmala Sitharaman and External Affairs Minister Sushma Swaraj. Even the most strident of Chinese media outlets are sounding positive notes amidst the diplomatic uptick.
A few reads on what’s been happening of late and the debates around India’s China policy — all indicative of the deep lack of trust.
- China steps up “feel good” diplomacy with India
- New Delhi is walking into the China trap
- This is the price India is paying for going out of its way to keep China in good humour
2. South Asia should not become a battleground for competing interests — Interesting piece in Global Times.
III. Belt & Road
China’s financing for BRI energy projects fell from $19.9 billion to $14.3 billion last year, as per a new study by Boston University’s Global Development Policy Centre (Here’s a summarised report of the study). The slowdown in spending last year came as the government cracked down on capital outflows. The report estimates Chinese investments in energy projects in Belt and Road countries from 2001 at $128 billion. Bulk of these investments focus on electricity generation projects.
IV. Military Matters
This is a new ministry that has been proposed under the government restructuring plan. This comes after a pledge by Xi during the 19th Party Congress to “establish an administration for veterans” and “protect the legitimate rights and interests of military personnel and their families.”
Official statistics put the total number of veterans in China at 57 million. The new ministry aims to cut red tape, streamline processes and ensure better economic support in terms of pensions, welfare, training and employment for veterans. At present, these issues are managed by the Ministry of Civil Affairs, Ministry of Human Resources and Social Security and the Political Work Department of the Central Military Commission. The new ministry will now become a single-point contact center.
In addition, the ministry will lead in drafting policies and regulations related to demobilized military personnel, managing military cemeteries and organising commemoration activities. The goal is not just support but also boosting morale and improving social perceptions with regard to the army. All of this comes amid the backdrop of repeated reports of discontent and even protests by former soldiers.
Meanwhile, SCMP reports that the government has also proposed a pay hike, backdated to August, for all military personnel. If confirmed, this will be the second such increment in pay scales since the announcement of the plan to cut 300,000 troops in September 2015. The last pay rise came in August 2016.
The report adds that the increases vary but average about 6 percent.” It further explains that “every retrenched officer, ranging from a lieutenant to a senior colonel, is entitled to a one-off payment of about 1 million yuan, as well as a pension of at least 70 percent of their exit salary every month for the rest of their life, according to PLA policy. The payments will be funded by an expanding defence budget, which Beijing said would grow by 8.1 percent to 1.1 trillion yuan this year.”
V. Beijing’s Take
China’s rise and the cementing of Xi Jinping’s position at the helm of Chinese affairs until he deems fit have deepened anxieties regarding the future of the international order. At its core, this is an anxiety about China seeking to expand global influence and reach while reshaping or even challenging international institutions and norms.
But how does China view its own rise and the challenges that are emerging due to it? A lengthy piece in a PLA-affiliated website this week takes a shot at explaining the Chinese perspective.
It argues that:
- “the political ecology of the world has been filled with ‘chaos and disorder’ over recent years.”
- declining growth and increasing inequality have intensified xenophobia, populism, social conflicts and conservative trends of thought.
- the war on terror and attempts to export democracy have made the “US became the source of political chaos and the troublemaker in the world.”
- China has been “avoiding fighting” with other countries and pursuing common development.
- recent worries of “sharp power” are nothing but extensions of confrontation-based theories, which have sought to contain China. These can be classified as the decline, trap (Thucydides trap) and responsibilities (Kindleberger trap) theories.
- Faced with this, it says “China must remain sober-headed and ensure its own legitimate rights and interests on the basis of transcending the logic of major power confrontation while contributing to global development and maintaining international order.”
- “Renaissance of contemporary China is not based on the US and other Western countries.” It is based on China’s historical experiences and cultural traits.
- It also stresses that the world order is increasingly growing multipolar, with relative decline in US reach and capacity to influence and shape events.
- Finally, it concludes that “transcending the old logic…also means embracing a brand-new world with a broader perspective and structure.”
Here are some of the inferences that we can draw from all this:
- Chinese policymakers understand that current global scenario provides a unique and small window of opportunity for China to expand its influence.
- Yet, China is not interested in overturning global institutions; its goal is to expand its authority and role commensurate to its perceptions of its own power and interests.
- China perceives itself as an exceptional power/civilisation and is keen to position itself as an alternative to the West. But it isn’t interested in a binary, ideological confrontation.
- This manifests in the Chinese perception of a direct and fundamental link between lack of economic growth/development and social conflicts/terrorism. This is one of the key philosophical ideas that underpins China’s global engagement.
- Yet China’s exceptionalist narrative and alternative governance system have led to a lack of openness, whether in terms of market access or with regard to BRI. And unless that is rectified, talk about “common development” and “community of shared future” will be seen as simple doublespeak.
This article first appeared on the Indian National Interest.