"Policymakers were busy with two important conferences in the last week. The Central Economic Work Conference (CEWK) concluded Friday and the Central Urbanization Work Conference ended Saturday'.
"The CEWK made no mention of a 2014 GDP target but did lay out six tasks for 2014:
“guaranteeing food safety, reducing industrial overcapacity, containing local government debt, enhancing coordination of regional development, improving people’s livelihoods and promoting further opening up”
The focus on local debt is another obvious sign of leadership concerns about the issue, as is the delay in releasing the results of the Q3 2013 local debt audit. Perhaps we will have to wait for the March NPC meeting and Premier Li’s work report for the 2014 GDP target?
The urbanization conference appears to have concluded without approval of the long awaited urbanization plan but with top-level agreement on the direction of urbanization. Expect less focus on “build it and they will come” local government infrastructure binges and more on limited hukou reform and what the leadership calls “human-centered urbanization”. Local officials and their cronies may not like it but Beijing has been signaling this for a while, with official media also running several stories on “ghost cities” and urbanization white elephants over the last few months. Implementation will of course be messy but when is anything not here?
The Third Plenum ended a month ago and there has been no official release of the composition of the Central Party Leading Group on Comprehensively Deepening of Reform or the National Security Commission. It is unclear if this is a sign something is amiss, the membership lists were never intended to be made public, or is it too soon to tell.
The US-China relationship is not ending 2012 on a positive footing. The White House was apparently given five minutes advance notice of the new air defensive identification zone, exactly the kind of surprise Obama supposedly asked Xi Jinping to avoid in the relationship. And on December 5 a PLA Navy ship attached to the Liaoning aircraft carrier group forced a US Navy vessel to take evasive maneuvers in the South China Sea.
This week we should learn whether or not China will begin effectively expelling reporters from The New York Times and Bloomberg by not renewing their visas, a move that is sure to provoke a reaction in DC. Vice President Biden raised this issue with President Xi Jinping, so if the visas are not renewed expect it to be viewed as a direct rebuke of the VP and his attempts at diplomacy. I expect some to be renewed and some to not, and for Bloomberg to come out better than the New York Times. Otherwise why would any foreign media organization believe Bloomberg-style appeasement is the right approach given the reputational risk?
2013 will be the Year of the Horse, so let’s hope a horse year is better than a snake year for relations between eagles and pandas. Then again, hope is never a responsible strategy…
Rumors about the imminent arrest of former Politburo Standing Committee member Zhou Yongkang continue to swirl. Two Sundays ago the rumor was he was under house arrest and that an official announcement would be made Monday. That obviously didn’t happen, and while where there is smoke there is likely fire so far there has not been a conclusive report on is status. I have no idea what is going on but I can not find any Beijing friend who does not think the rumors are true.
A move against a PBSC member would be both unprecedented and risky, though if Xi pulls it off then he would appear to have control over both the military and security services, making him probably the most powerful leader since Mao. But given the rumors and now the expectations, if he is not taken down then all the tiger talk in the anti-corruption campaign will be seen as just that and Xi’s prestige may take a hit.
Xi issued his “Eight Guidelines” to rein in extravagance just over a year ago and the campaign has been harsher and better enforced than many expected. Businesses and investors still hoping for any near-term rebound in luxury or high-end food and beverage spending will likely be very disappointed by the newly released guidelines to rein in official spending.
Source: The Sinocism China Newsletter
