Eye on China World

President For Life

A weekly bulletin offering news and analysis related to the Middle Kingdom.

The Lead

  1. Constitutional Amendments: It was a newsworthy Sunday, as state media made public a raft of amendments to the Chinese constitution that had been proposed by the CPC Central Committee. Here’s the details of all the changes and below is your a cheat-sheet:
  • It is proposed that the expression, the President and Vice-President of the People’s Republic of China “shall serve no more than two consecutive terms” be removed from the Constitution.
  • Central and local National Supervisory Commissions will be listed as state organs. (Read this, in this context)
  • Xi Jinping Thought and Scientific Outlook on Development will be included in the constitution.
  • Working to build a community with a shared future for humanity will be part of the constitution.
  • A sentence to be added stating, “the leadership of the Communist Party of China is the defining feature of socialism with Chinese characteristics.”
  • The phrase “core socialist values” will find its way into the constitution, i.e., greater socio-economic control policies. (Read this, in this context)

Here are some good explanatory pieces on the implications of these changes, particularly the ones related to presidential terms.

State media and the Chinese military were very supportive of the proposed amendments. Here’s some examples, but if you want a broad overview, the Guardian has a good one.

It is interesting to note that the proposed amendments were first reported in English by state media and then in Mandarin. The Xinhua editors who put together that initial story now reportedly find themselves in a bit of trouble.

The proposed amendments haven’t entirely been welcomed by the Chinese public, with memes and criticism aplenty on social media leading to greater online censorship. The most serious mainstream criticism, however, came from Li Datong, former top editor of Freezing Point, a respected supplement of the China Youth Daily newspaper, who penned an open letter asking NPC deputies to vote against the changes.

Importantly, there appears to be an acknowledgement of the disquiet that the decision on presidential term limits has evoked. For instance, People’s Daily expressly stated in an editorial that this “does not mean a life-long term system for leading officials.”

  1. Cabinet Reshuffle: One of the key outcomes of the upcoming NPC meeting will be the appointment of new people to key state positions. In last week’s newsletter, I’d discussed some of the changes that we are likely to see. This week, there’s more information out about potential frontrunners for different posts.

Other stories:

  1. Trade partners threaten retaliation as Trump announces steel and aluminum tariffs/ U.S. holds ‘frank’ talks on trade with Chinese envoy: White House official/ China angered with U.S.-Taiwan travel bill, adding to tensions
  2. Bypassing Tsai Ing-wen, China Offers Perks to Taiwan’s People/ Taiwan warns its firms to be wary as China grants greater access/Former Taiwan presidents back independence referendum call
  3. Apple moves to store iCloud keys in China, raising human rights fears
  4. China hands out free TVs to beam propaganda into poorest regions
  5. An Anbang-Linked Revolutionary Heir Dies in China. Speculation Begins
  6. Philippines says any South China Sea energy deals with China will be solely commercial agreements
  7. China Is Said to Probe Chairman of Emerging Energy Star CEFC
  8. China implements tighter rules on ‘irrational’ overseas investments

Indian Interest

1. Rebooting Sino-India ties: India’s new foreign secretary Vijay Gokhale visited Beijing this week, in what has been seen as a bid to reboot ties after what has been a difficult 18 months. The visit reportedly saw the two sides agreeing to build on “the convergences between them” and address differences on the basis of “mutual respect and sensitivity to each other’s concerns, interests and aspirations.” The visit also sets the stage for a planned visit by the Indian PM to China for the Shanghai Cooperation Organisation summit later this year.

The Indian Express reported on Friday that before heading to Beijing, Gokhale, in a note to Cabinet Secretary P K Sinha, requested “senior leaders” and “government functionaries” to skip events planned for March-end and early April by the “Tibetan leadership in India” to mark the start of 60 years in exile of the Dalai Lama, arguing that this was a “very sensitive time” in bilateral ties.

Meanwhile, after the Financial Action Task Force decision on Pakistan last week, India’s Ministry of External Affairs this week congratulated China on its election as FATF Vice President.

So does all this mean that we are looking at smoother Sino-India ties moving forward? Not quite, assesses Rajeswari Pillai Rajagopalan in The Diplomat.

  1. Assurances on Hambantota: During his visit to India, Sri Lanka’s Chief of Defence Staff, Admiral Ravindra Wijegunaratne, sought to assuage Indian concerns with regard to the Hambantota port. Speaking at the Indo-Pacific Regional Dialogue 2018, he is reported to have said:

“There had been a widespread claim about Hambantota port being earmarked to be used as a military base. I can assure that no action will be taken in our harbours and waters which would jeopardise India’s security concerns. I can assure that no action whatsoever will be taken which will jeopardize India’s security concerns.”

Sri Lanka formally handed over the port to China on a 99-year lease late last year. The China Merchants Port Holdings Company (70 percent stake) and the Sri Lanka Ports Authority (30 percent stake) will own the port and the investment zone around it, according to officials.

Other Stories:

  1. Chinese sailors allowed landing at Indian port in a decade
  2. To view developments in the neighbourhood simply as ‘pro-China’ or ‘pro-India’ is myopic
  3. China-backed AIIB eyes $1 billion infrastructure push in India
  4. India to host mega naval exercise amid China’s manoeuvring in high seas/ Maldives declines India’s invite for naval exercise: Navy chief Sunil Lanba/ The Real Significance of India’s MILAN Navy Exercise/ Global Times’ take: India naval exercises inflame tensions with China, expand potential conflict from land to sea: observers
  5. India must address Vietnam’s concerns in the South China Sea
  6. India-China border situation sensitive, has potential to escalate: Subhash Bhamre
  7. China praises Pakistan’s counter-terrorism efforts

III. Belt & Road:

  1. What are Western banks doing? While BRI might have become a political issue with the Quad alternative in works and lack of endorsements from Britain’s May and France’s Macron, Western banks appear to be betting big on the initiative. A Financial Times piece this week assess how big players like Citigroup, HSBC and Standard Chartered have responded to BRI.

It says: “The big banks have held conferences on BRI, appointed senior bankers to champion their role in the initiative and set up committees to co-ordinate their approaches across different business activities. They say these efforts are bearing fruit, listing dozens of financing deals they have won that are related in some way to the project.”

The report then lists out some of the major project investments that have been made, along with the strategy that these banks are adopting to assess economic viability of their BRI-linked investments.

Other Stories:

  1. China’s Flagship Port in Pakistan Shackled by Heavy Security
  2. BRI could improve Chinese military posture, says US top general
  3. Confusion Over Chinese Talks With Baluch Separatists In Pakistan
  4. Chinese prisoners working on CPEC: Pakistan MP
  5. China Needs A Win In Afghanistan To Keep Its Edge In Asian Trade
  6. Japan’s Belt and Road Puzzle, Decoded
  7. First 20,000 teu Cosco Shipping containership calls Piraeus

Military Matters

Budgetary jostling: Reuters reports that ahead of the NPC session, the PLA has been “privately unhappy that it got less than double-digit funding increases the past two years.”

The report says: “In the run-up to the defence budget, “state media outlets have been filled with coverage of military drills, advanced new equipment and thrilling tales of derring-do in a new film very loosely based on China’s evacuating people from Yemen’s civil war in 2015. The overall message is clear: China faces serious challenges…Confronting those challenges requires cash, a point the military is now trying to drive home.”

China’s official defense budget in 2017 was $151.43 billion, which was an approximate 7% increase from the year earlier — the lowest percentage increment in over a decade. However, assessments by the US and the Stockholm International Peace Research Institute peg defense spending at far higher levels.

Other Reads:

  1. South Korea protests over Chinese military aircraft intrusion
  2. Indian military scrambles to keep up after China moves to put forces in Africa
  3. China aims for nuclear-powered aircraft carrier by 2025
  4. Of course, China’s navy is not untoward in blue water: China Daily editorial
  5. Chinese military drone sales hover over Middle East
  6. China’s hypersonic heavy bomber plans revealed
  7. How China becomes third-largest supplier of weapons worldwide?
  8. Formal acknowledgement of the recent drills in the eastern Indian Ocean

Beijing’s Take

The Third plenum of the CPC central committee has become synonymous with reform, ever since the landmark meeting in 1978. From February 26 to 28, the third plenum of the 19th CPC Central Committee was held in Beijing. The meeting set the agenda for the upcoming NPC session.

The overarching theme in the communique that was issued after the meeting was:

  • Reform of the CPC and state institutions to improve China’s governance level and capacity.
  • Deepening reform of the Party and state institutions to strengthen the CPC’s leadership in every sector.
  • Improved relations between central and local authorities. “The setup of central and local institutions and the allocation of responsibilities should be improved to build a smooth, vigorous system in which orders are executed without fail.”
  • Economic reform should focus on promoting high-quality development, developing a modernized economy.
  • Transform government functions and remove institutional barriers so that the market plays the decisive role in resource allocation and the government plays its role better.

The above sits neatly in the framework put together by the Paulson Institute’s Evan Feigenbaum, who (in a must read piece) argues that there is a disconnect between Western and Chinese definitions of the term reform. To Beijing, he says, reform means:

  •  Market liberalization
  • Administrative measures to increase bureaucratic and operational efficiencies, and
  • A rebalancing of authorities and decision powers among central and local levels of government.

This article first appeared on the Indian National Interest.

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About the author

Manoj Kewalramani

Manoj Kewalramani is a multimedia journalist based in New Delhi. Over the past 11 years, he has worked with prominent news networks in India and China. His news and editorial work includes field reporting, commissioning and managing assignments and producing shows and documentaries along with formulating and executing digital news strategies. Manoj is an alumnus of Takshashila’s Graduate Certificate in Public Policy. At Takshashila, he curates a weekly brief, Eye on China, which tracks developments in China from an Indian perspective.