China Politics Weekly

China Politics Weekly aims to keep business leaders, investors, diplomats, scholars and other China hands up to date on important trends in China. It is produced by Trey McArver, a London-based consultant providing advice and intelligence to firms and investors engaged in China and the region. You can find out more about Trey and CPW in this interview.

Issue No. 52 – May 5, 2015

Dear friends and colleagues,

I’m celebrating Labor Day by taking a week off from commentary. Leaders’ activities still provided below.

 

PBSC Week in Review
Xi Jinping  May 5 Xi chaired a meeting of the Leading Small Group on Comprehensively Deepening Reform.The Leading Group continues to be very productive. This meeting saw passage of at least five different “plans” or “decisions”, including on: 1) regional reforms; 2) public interest lawsuits; 3) legal aid; 4) the science and technology system; and 5) the China Association for Science and Technology.
    Xi attended the 10th general congress of the Red Cross Society of China (RCSC). 
  May 4 Xi met with Kuomintang Chairman Eric Chu.
  May 1 Xi delivered a welcome address via video on the opening of the China Pavilion in Expo Milano 2015. 
  Apr 30 Xi chaired a Politburo meeting.Discussed economy, United Front work and Beijing-Tianjin-Hebei integration. 
    Xi chaired a Politburo study session on urban-rural integration. 
  Apr 29 Xi met with Algerian Prime Minister Abdelmalek Sellal. 
  Apr 28 Xi spoke at a ceremony to celebrate model workers and International Labor Day.Full text of the speech is here (in Chinese). 
    Xi held talks with Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo.Two pledged to pledged to lift the bilateral relationship to an all-round partnership.Xi said that “China and Africa have always been a community of common destiny”. 
    Xi spoke with President of Kazakhstan Nursultan Nazarbayev by telephone. 
  Apr 27 Xi met with U Shwe Mann, chairman of Myanmar’s ruling Union Solidarity and Development Party (USDP). 
    Xi congratulated Omar al-Bashir on his reelection as President of Sudan. 
Li Keqiang  May 5 Attended meeting of Leading Small Group on Comprehensively Deepening Reform. 
    Attended the 10th general congress of the Red Cross Society of China (RCSC).
  May 4 Li met with Helen Clark, deputy secretary-general of the United Nations and head of the UN Development Program (UNDP).
    Li met with Syed Hamid bin Syed Jaafar Albar, chairman of Malaysia’s Land Public Transport Commission.
    Li sent a letter to a maker student group at Tsinghua University in honor of China Youth Day.“The most important part of public entrepreneurship and innovation is to encourage people’s creativity, especially young people whose willingness and determination leads to a prosperous and vigorous society and country,” Li said in the letter. 
  Apr 29 Li held talks with Prime Minister of Algeria Abdelmalek Sellal. 
    Li met with Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo. 
    Li sent instructions to a work conference on deepening reform of the medical care system. 
  Apr 28 Li chaired an executive meeting of the State Council. 
    Li chaired a ceremony to commemorate model workers and celebrate International Labor Day. 
  Apr 27 Li met with Professor Emeritus at Hong Kong University Rao Zongyi. 
Zhang Dejiang   Zhang met with Japanese representatives from the Japan-China Friendship Parliamentarians’ Union.“China expects Japan to talk and act in a responsible way and properly settle sensitive issues,” Zhang said. 
  Apr 28 Attended a ceremony to commemorate model workers and celebrate International Labor Day. 
  Apr 25-27 Zhang went to Chongqing to inspect implementation of the Vocational Education Law. 
Yu Zhengsheng May 5 Yu met with Malaysian Senate President Abu Zahar.
  May 3 Yu attended and spoke at the 10th Cross-Strait Economic, Trade and Culture Forum.Full text of his speech (in Chinese). 
  Apr 29 Yu met with Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo. 
    Yu addressed a ceremony to celebrate 45 years of relations between China and Equatorial Guinea. 
  Apr 28 Attended a ceremony to commemorate model workers and celebrate International Labor Day. 
    Yu met with Algerian Prime Minister Abdelmalek Sellal. 
Liu Yunshan May 5 Attended meeting of Leading Small Group on Comprehensively Deepening Reform. 
    Attended the 10th general congress of the Red Cross Society of China (RCSC).
  Apr 29 Liu attended the graduation ceremony for participants in the Central Party School’s spring term advanced studies class. 
  Apr 28 Attended a ceremony to commemorate model workers and celebrate International Labor Day. 
  Apr 27 Liu met with U Shwe Mann, chairman of Myanmar’s ruling Union Solidarity and Development Party (USDP). 
Wang Qishan  Apr 28 Attended a ceremony to commemorate model workers and celebrate International Labor Day. 
Zhang Gaoli May 5 Attended meeting of Leading Small Group on Comprehensively Deepening Reform. 
  Apr 30 Zhang spoke with Russian Deputy Prime Minister Arkady Dvorkovich by telephone. 
  Apr 28 Attended a ceremony to commemorate model workers and celebrate International Labor Day. 

 

Issue No. 53 – May 11, 2015

Another bear hug

Events this week were dominated by Xi’s trip to Moscow to attend Russian President Vladimir Putin’s Victory Day celebrations. The visit- which represented the ninth meeting between Xi and Putin in two years- resulted in the signing of series of cooperation deals on energy, transportation, space, finance, media exchanges, high-speed railway, infrastructure construction and military interaction. Highlights include:

  • A cooperation agreement between the Russian Direct Investment Fund (RDIF) and China Construction Bank to attract up to USD 25 billion in Chinese investment into Russia in the next 2-3 years.
  • An agreement between the government of Heilongjiang, RDIF and the Russia-China Investment Fund (RCIF) to create a USD 2 billion fund for agricultural products.
  • An agreement between Russia’s Federal Space Agency and China’s Satellite Navigation Office to jointly exploit the Chinese BeiDou system with Russia’s Glonass navigation system.
  • An agreement between the Three Gorges Corporation and Russia’s hydropower company RusHydro to jointly develop a hydropower project in Russia.
  • An agreement among Chinese and Russian investors to create a leasing company to promote the sale of Russian Sukhoi Superjet-100 (SSJ-100) passenger planes in the Chinese and Southeast Asian markets over the next three years. The consortium of investors includes the Sukhoi Civil Aircraft Company, the United Aircraft Corporation, the RCIF, the Management Committee of the Xi’an District and the Chinese company New Century International Leasing.

The visit, and the deals, highlight the fact that the Sino-Russian relationship is at an historic high point. Many analysts predict that relations will regress to their historical mean of suspicion and competition. This may be true in the long run, but there is no reason to believe that ties between the two countries will weaken any time soon. The reasons are simple: cooperation between the two is mutually beneficial economically, politically and diplomatically.

Economically, Russia needs Chinese money and China needs Russian oil, gas, agriculture and technology. Politically, the two share a concordance of views on information control, “internet sovereignty” and restriction of foreign NGOs. Diplomatically, both are seeking to counter Western influence in their respective regions. It also doesn’t hurt that the two leaders seem to genuinely respect each other. None of the above looks likely to change in the near term; if that’s the case, it is unlikely that bilateral ties will weaken.

Many have noted that China’s rising influence in Central Asia- Russia’s traditional backyard- could strain the relationship. This looks less likely after Xi’s visit. Xi and Putin agreed to coordinate their strategies for the region, and have signed an agreement to integrate Russia’s Eurasian Economic Union (EAEU) and China’s Silk Road Economic Belt. Following the signing of the agreement, Chinese Minister of Commerce Gao Hucheng said that China is ready to introduce institutional arrangements to facilitate trade with the EAEU and eventually build a free trade zone with it.

A free trade zone encompassing China and Russia is still a long way off, but the fact that the two countries are moving in that direction should be taken as further proof that the two leaders are serious about further enhancing cooperation. Ties between the two are likely to get stronger, not weaker.

Grey zones

Back at home, Premier Li continued his push to reform China’s unwieldy bureaucracy. Wednesday’s State Council meeting announced that all non-administrative approvals would be abolished or turned into explicit administrative approvals. The aim, said Li, is to “clarify the limits of government powers”.

Li’s dedication to reducing government interference in the economy is clear. However, local officials are loath to cede authority and serious doubts remain about the center’s ability to push through its agenda across the country.

PBSC Week in Review
Xi Jinping  May 10 Xi flew from Russia to Minsk, Belarus.
  May 9 Xi attended a ceremony celebrating victory in World War II. 
    Xi met with Russian Prime Minister Dmitry Medvedev. 
    Xi laid a wreath at the Tomb of the Unknown Soldier in Moscow along with other visiting dignitaries attending Russia’s Victory Day commemorations.Other attendees included UN Secretary-General Ban Ki-moon, President of Kazakhstan Nursultan Nazarbayev, President of Azerbaijan Ilham Aliyev, President of Armenia Serzh Sargsyan, President of Kyrgyzstan Almazbek Atambayev, President of the Czech Republic Milos Zeman, President of the Council of State and President of the Council of Ministers of Cuba Raul Castro, President of Venezuela Nicolas Maduro and President of Mongolia Tsakhiagiin Elbegdorj. 
    Xi exchanged congratulatory messages with Swedish King Carl XVI Gustaf on the 65th anniversary of China-Sweden relations. 
  May 8 Xi held talks with Russian President Vladimir Putin. 
    Xi met with Russian World War II veterans. 
    Xi met with a group of Russian experts who once worked in China. 
    Xi flew from Astana, Kazakhstan to Moscow, Russia. 
    Xi met with met with Kazakh Prime Minister Karim Masimov. 
  May 7 Xi held talks with President of Kazakhstan Nursultan Nazarbayev. 
    Xi arrived in Astana, Kazakhstan. 
    Xi left Beijing for Kazakhstan.
  May 6 Xi exchanged congratulatory messages with European Council President Donald Tusk and European Commission President Jean-Claude Juncker on the 40th anniversary of China-EU relations.  
Li Keqiang  May 8 Li sent a congratulatory message to a concert in Moscow by a Chinese-Russian youth orchestra.This is China-Russia Youth Friendly Exchange Year. 
    Li sent a congratulatory message to British Prime Minister David Cameron on the success of the Conservative Party in the British elections. 
  May 7 Li visited Zhongguancun and the Chinese Academy of Sciences.Said government will increase funding for basic research. 
  May 6 Li chaired an executive meeting of the State Council. 
    Li met with Federica Mogherini, EU High Representative for Foreign Affairs and Security Policy.Said China is willing to push forward talks on a bilateral investment treaty built around pre-establishment national treatment and a negative list. Big question remains how long the negative list will be… 
    Li met with Malaysian Senate President Abu Zahar. 
    Li exchanged congratulatory messages with European Council President Donald Tusk and European Commission President Jean-Claude Juncker on the 40th anniversary of China-EU relations. 
Zhang Dejiang May 7 Zhang met with Volkmar Denner, chairman of the board of management of Bosch. 
  May 6 Zhang exchanged congratulatory messages with European Parliament President Martin Schulz on the 40th anniversary of Sino-EU relations. 
Yu Zhengsheng May 8 Yu met with a delegation of Japanese congressmen led by Fukushiro Nukaga, head of the Heisei Kenkyukai, a faction under the co-ruling Liberal Democratic Party (LDP).Yu is reported to have said, “If Japan does not feel sorry for having caused tremendous misfortune to other countries, we have no choice but to show concern that it may repeat the same mistakes.” 
  May 7 Yu chaired a biweekly CPPCC symposium.Meeting focused on development and integration of traditional and new media. 
Liu Yunshan May 8 Liu met with president of the Malaysian Chinese Association Liow Tiong Lai. 
Wang Qishan  May 7 Wang met with U.S. members of the U.S.-China High Level Political Party Leaders Dialogue.U.S. side led by Former US Trade Representative Ronald Kirk and former Secretary of Veterans Affairs and former Republican National Committee Chairman Jim Nicholson. 
Zhang Gaoli    

 

 

 

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China Politics Weekly – May 5-May 11, 2015
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