China
Chinese leadership: The challenge in 2012
Author: Kerry Brown, Chatham House One side-effect of the Dengist economic reforms which started to penetrate deeply in the 1980s was the transition from a ruling Chinese Communist Party that was focused on class struggle and revolutionary aspiration under Mao, to one in which a new technocratic elite were in control. In the words of Wang Hui, one of contemporary China’s foremost public intellectuals, that meant that the party started fulfilling a more ‘evaluative’ function and became the sort of ‘bureaucratic machine’ that Mao had tried to prevent. While the economy grew and prospered , the party looked at its own internal governance , at how it promoted key officials, how it dealt with its own accountability, and disciplined those in its fold who had become corrupt. In short, it tried to professionalise itself. Central to this task was the need to have a mechanism (mostly peer pressure) by which the top elite controlled themselves. There was no question of some entity, like the legal system or civil society, standing above the party and placing obligations and regulations upon it. But there was a sense that the party needed to tidy up its act, and that another messy leadership transition of the kind that had occurred between Mao and Deng (which had taken almost two years to achieve) was a luxury the party could no longer afford. Party congresses which had occurred sporadically before 1982 started to happen every five years. Time limits were set on those holding high office. By stealth rather than by stated aim, retirement ages were brought in. By 2002, when there was a transition from the third to the fourth generation of leadership (from Jiang Zemin to Hu Jintao), nervousness that this process would lead to infighting among factions in the party remained evident till some years into Hu’s era. Only in 2007 was Hu seen by commentators and experts of the party to become his own man with the party congress, meaning he could then elevate a number of people close to him, and gently ease out of positions of influence those seen as close to Jiang before. The imminent party congress in late 2012 is arousing all the speculation that the congress of 2002 did. There has been a decade more of the party being able to build its own internal governance, and trying to modernise its own structures. In the last few years it has practised what has been called ‘intra-party democracy’, attempting to make its processes more predictable and a little more transparent. In a strategy of careful management, the likeliest successor to Hu next year, Xi Jinping, looks like he is following exactly the same path to the crucial position of General Secretary of the CCP — elevation to the Standing Committee of the Politburo as Vice Premier (like Hu), and vice chairmanship of the Central Military Commission, in charge of army affairs (like Hu). A range of leaders around him are also being carefully groomed to slip into major leadership positions when the current incumbents on the all-important standing committee of nine see seven of their members retire. So far, so good. While the party has managed its affairs with great care and attention (Hu is known to almost religiously follow due process, and attempts to build broad consensus across all shades of party opinion for what he does), there is still a nagging sense that while this fourth generation leadership may well have got the internal issue of succession well sorted, it has done so by pushing aside the larger, and much more contentious and challenging issues of broader political reform that are now staring it in the face. Since its entry into the World Trade Organisation in 2001, China’s economy has rocketed ahead — as much to the surprise of its leaders as those outside. Good economic performance was predicted back in 2001, but not one in which, in less than ten years, China would become the world’s largest exporter, largest importer, largest holder of foreign reserves and second largest economy. Five years ahead of what had been expected, China is in a much more powerful position than it, or others, had believed possible. This has been a double-edged sword. While it has bought massive increases in GDP and prosperity, it has also created a society where there remain sharp divisions between the haves and the have-nots, and where social classes, from entrepreneurs, to the urban middle class , to the farmers — who, after all, still make up over half the population — are increasingly in conflict with each other over issues from property rights, the state of the environment, rights over pensions, and demands to have more of the wealth that the country has created. The increasing repression since June 2009 , where rights lawyers and activists have been victimised and frequently imprisoned, is symptomatic of a leadership that has been bold in its economic thinking but profoundly cautious in its political views. In the new leadership there are no signs, as yet, that anyone has a particularly strong idea about how, for instance, to deepen the rule of law in the country by allowing genuinely independent courts, or giving a proper legal status to civil society groups. In 2011 the fundamental contradiction of contemporary China is that it runs on a largely centralised system inherited from the Soviet Union in the mid 20 th century while its economy is one of the most modern in the world. As it becomes clearer who the fifth generation leaders will be, and how jobs will be allocated among them, scrutiny will be focussed on what clues they give about how they might approach this hugely challenging and sensitive issue of political reform. The 12 th Five Year Program which was passed in Beijing last March at the annual National People’s Congress, the Chinese parliament, gave some recognition to this in talking a little about the need to build social infrastructure and a more stable, equal society. For the next decade, therefore, the issue will not be about the first battle — to build GDP — but about the conflicts that have come after that, to deal with the issues China will face as it progresses towards a middle-income-status country (its stated aim by 2020). These are proving to be far trickier and more demanding than simply pumping out good growth rates, and it is on these, more and more, that the future leadership of China will need to show the same kind of strong vision that their predecessors did about the economy, back in the late 1970s. So far there is little sign that they have the vision, or the capacity, to do this. But like it or not, over the coming decade, this more than anything else will be their key task. Kerry Brown is head of the Asia Program at Chatham house, London, where he leads Europe-China Research. He is author of ‘Ballot Box China’ (Zed books, 2011) and a biography of Hu Jintao which will appear in early 2012. This article appeared in the most recent edition of the ‘East Asia Forum Quarterly’, ‘Governing China’ . Chinese dam diplomacy: Leadership and geopolitics in continental Asia The challenge of China and China’s challenge – Weekly editorial Chinese leadership and Tibet
Author: Kerry Brown, Chatham House
One side-effect of the Dengist economic reforms which started to penetrate deeply in the 1980s was the transition from a ruling Chinese Communist Party that was focused on class struggle and revolutionary aspiration under Mao, to one in which a new technocratic elite were in control.
In the words of Wang Hui, one of contemporary China’s foremost public intellectuals, that meant that the party started fulfilling a more ‘evaluative’ function and became the sort of ‘bureaucratic machine’ that Mao had tried to prevent. While the economy grew and prospered, the party looked at its own internal governance, at how it promoted key officials, how it dealt with its own accountability, and disciplined those in its fold who had become corrupt. In short, it tried to professionalise itself.
Central to this task was the need to have a mechanism (mostly peer pressure) by which the top elite controlled themselves. There was no question of some entity, like the legal system or civil society, standing above the party and placing obligations and regulations upon it. But there was a sense that the party needed to tidy up its act, and that another messy leadership transition of the kind that had occurred between Mao and Deng (which had taken almost two years to achieve) was a luxury the party could no longer afford. Party congresses which had occurred sporadically before 1982 started to happen every five years. Time limits were set on those holding high office. By stealth rather than by stated aim, retirement ages were brought in. By 2002, when there was a transition from the third to the fourth generation of leadership (from Jiang Zemin to Hu Jintao), nervousness that this process would lead to infighting among factions in the party remained evident till some years into Hu’s era. Only in 2007 was Hu seen by commentators and experts of the party to become his own man with the party congress, meaning he could then elevate a number of people close to him, and gently ease out of positions of influence those seen as close to Jiang before.
The imminent party congress in late 2012 is arousing all the speculation that the congress of 2002 did. There has been a decade more of the party being able to build its own internal governance, and trying to modernise its own structures. In the last few years it has practised what has been called ‘intra-party democracy’, attempting to make its processes more predictable and a little more transparent. In a strategy of careful management, the likeliest successor to Hu next year, Xi Jinping, looks like he is following exactly the same path to the crucial position of General Secretary of the CCP — elevation to the Standing Committee of the Politburo as Vice Premier (like Hu), and vice chairmanship of the Central Military Commission, in charge of army affairs (like Hu). A range of leaders around him are also being carefully groomed to slip into major leadership positions when the current incumbents on the all-important standing committee of nine see seven of their members retire. So far, so good.
While the party has managed its affairs with great care and attention (Hu is known to almost religiously follow due process, and attempts to build broad consensus across all shades of party opinion for what he does), there is still a nagging sense that while this fourth generation leadership may well have got the internal issue of succession well sorted, it has done so by pushing aside the larger, and much more contentious and challenging issues of broader political reform that are now staring it in the face. Since its entry into the World Trade Organisation in 2001, China’s economy has rocketed ahead — as much to the surprise of its leaders as those outside. Good economic performance was predicted back in 2001, but not one in which, in less than ten years, China would become the world’s largest exporter, largest importer, largest holder of foreign reserves and second largest economy. Five years ahead of what had been expected, China is in a much more powerful position than it, or others, had believed possible.
This has been a double-edged sword. While it has bought massive increases in GDP and prosperity, it has also created a society where there remain sharp divisions between the haves and the have-nots, and where social classes, from entrepreneurs, to the urban middle class, to the farmers — who, after all, still make up over half the population — are increasingly in conflict with each other over issues from property rights, the state of the environment, rights over pensions, and demands to have more of the wealth that the country has created.
The increasing repression since June 2009, where rights lawyers and activists have been victimised and frequently imprisoned, is symptomatic of a leadership that has been bold in its economic thinking but profoundly cautious in its political views. In the new leadership there are no signs, as yet, that anyone has a particularly strong idea about how, for instance, to deepen the rule of law in the country by allowing genuinely independent courts, or giving a proper legal status to civil society groups. In 2011 the fundamental contradiction of contemporary China is that it runs on a largely centralised system inherited from the Soviet Union in the mid 20th century while its economy is one of the most modern in the world.
As it becomes clearer who the fifth generation leaders will be, and how jobs will be allocated among them, scrutiny will be focussed on what clues they give about how they might approach this hugely challenging and sensitive issue of political reform. The 12th Five Year Program which was passed in Beijing last March at the annual National People’s Congress, the Chinese parliament, gave some recognition to this in talking a little about the need to build social infrastructure and a more stable, equal society. For the next decade, therefore, the issue will not be about the first battle — to build GDP — but about the conflicts that have come after that, to deal with the issues China will face as it progresses towards a middle-income-status country (its stated aim by 2020). These are proving to be far trickier and more demanding than simply pumping out good growth rates, and it is on these, more and more, that the future leadership of China will need to show the same kind of strong vision that their predecessors did about the economy, back in the late 1970s.
So far there is little sign that they have the vision, or the capacity, to do this. But like it or not, over the coming decade, this more than anything else will be their key task.
Kerry Brown is head of the Asia Program at Chatham house, London, where he leads Europe-China Research. He is author of ‘Ballot Box China’ (Zed books, 2011) and a biography of Hu Jintao which will appear in early 2012.
This article appeared in the most recent edition of the ‘East Asia Forum Quarterly’, ‘Governing China’.
- Chinese dam diplomacy: Leadership and geopolitics in continental Asia
- The challenge of China and China’s challenge – Weekly editorial
- Chinese leadership and Tibet
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Chinese leadership: The challenge in 2012
China
Putin and Xi: Beijing Belt and Road meeting highlighted Russia’s role as China’s junior partner
The recent Belt and Road Forum in Beijing saw decreased attendance from world leaders, highlighting geopolitical tensions. Vladimir Putin emphasized Sino-Russian cooperation, but trade imbalances reveal Russia’s subordinate role.
The third Belt and Road Forum held in Beijing recently attracted fewer heads of state or senior officials than the previous forums in 2017 and 2019. There were 11 European presidents and prime ministers at the 2019 forum. But last week’s forum attracted only three.
This is understandable, given that the two-day meeting took place against the backdrop of high tension in the Middle East caused by the conflict between Israel and Hamas as well as the war in Ukraine – both wars which have highlighted differences in views on regional and global order between the west and a number of non-western countries.
One enthusiastic participant was the Russian president, Vladimir Putin. For Putin, the forum provided an opportunity to meet other leaders without fear of arrest, given his indictment by the International Criminal Court for war crimes which had kept him away from September’s Brics summit in South Africa.
While Putin was just one among 20 or so world leaders at the Forum, he was photographed at Xi Jinping’s right hand and given a prominent place in proceedings. Delivering a speech at the forum immediately after the Chinese president and staging a press conference for the Russian media before boarding the plane to Moscow, Putin attempted to convey the message of tight cooperation with China.
He was keen to remind his audience of Russia’s credentials as a UN security council member, together with China, responsible for the maintenance of international peace and security. He also noted that he and Xi had discussed both the situation in Gaza and the events in Ukraine, describing these situations as “common threats” which strengthen Sino-Russian “interaction”.
Putin drew particular attention to the high bilateral trade volume between Russia and China, which has reached nearly US$200 billion (£163 billion). This sounds impressive until you remember that the bulk of this trade consists of export of Russian hydrocarbons and other raw materials to China. This is nothing new – in fact trade in hydrocarbons between Russia and China have been boosted by western sanctions.
Perhaps the most instructive aspect of the visit was Putin’s explicit acknowledgement of the different roles played by Moscow and Beijing in international politics. Putin described the Russia-dominated Greater Eurasian Partnership (GEP) – a concept Moscow has promoted as a response to the Belt and Road Initiative (BRI) that would fuse the Eurasian Economic Union with the BRI – as a regional or “local” project. Meanwhile he happily described the BRI as “global” in scale.
For the past decade, Russian policymakers and experts have consistently held up the GEP as symbolising Russia’s equality with China. Russian foreign minister Sergei Lavrov has described it as “the creation of a continent-wide architecture”.
Putin’s words, coupled with the lack of any meaningful results of the meeting (bar a contract on food and agricultural products which has yet to be confirmed by Beijing), illustrate the extent to which Russia’s war against Ukraine has deepened the asymmetry between the two powers.
Holding back?
The lack of genuine progress on the issue of the Power of Siberia-2 pipeline, which will transport gas from Russia’s Yamal gas fields, which used to supply Europe, via Mongolia to China, was further evidence of this asymmetry. Xi was kind enough to express hope that the project could proceed quickly. But he did not outline any concrete steps in that direction.
China’s agreement, if confirmed by a contract, would have been the most clear signal of Beijing’s strategic support for Russia, especially given Gazprom’s shrinking European market. By prolonging negotiations, China seems to be trying to extract specific concessions from Russia, related to the price of gas, possible Chinese ownership of gas fields in Russia, or Beijing’s acquisition of shares in Gazprom.
Meanwhile, in May 2023, China revived the prospect of building the so-called section “D”, enlarging the capacity of the Central Asia-China gas pipeline system, which will bring gas from Turkmenistan via Kyrgyzstan and Tajikistan to China, emphasising China’s other sources of energy supplies.
While continuing to offer Moscow political support and not interfering with Chinese companies’ attempts to take advantage of the exodus of western companies to increase their presence in the Russian market, Beijing has clearly attempted to prevent any embarrassment related to Russia. A gas contract would have overshadowed the BRI summit and generated a strong reaction in the US and Europe, potentially strengthening China hawks in the west.
Beijing making its move
Putin’s delegation was full of ministers and CEOs of key Russian enterprises, from Rosneft and Gazprom to Novatek, so the conclusion of commercial agreements can’t be ruled out, but the probability is low. It is clear that Beijing does not want to be seen to be openly supporting Russia in resisting and bypassing western sanctions.
In the 1990s, Russian officials regularly warned of the dangers of becoming a “raw materials appendage” to China. Today the economic benefits that Russian elites gain from hydrocarbons mean this danger has now become a reality. Russia has locked itself into an economic partnership in which it is the supplicant, a role that Moscow seems happy to play.
But the BRI is not just about economics. It is also a key part of Beijing’s bid to project itself as a “global responsible power”. Beijing has recently outlined what it calls its “Global Security Initiative” which explicitly rejects the Western rules-based order. This comes alongside a “Global Development Initiative” and, nested within these, a “Global Civilisation initiative”. Taken together these question western universalist ideas about human rights and democracy.
China’s thinking has gained traction among many countries of the global south, providing a developmental path without lectures on human rights. China speaks to these countries using its dual identity as both a rapidly developing power and a member of the UN security council. By comparison, notwithstanding its security council position, Russia has few tangible benefits to offer these countries. Last week’s BRI forum has driven this point home.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
China
Unlocking Potential: China Welcomes Foreign Investment in Cell Therapy and Fully Foreign-Owned Hospitals in Select Pilot Cities
On September 8, 2024, MOFCOM expanded pilot programs in China’s medical sector, allowing foreign-invested enterprises to engage in cell and gene therapy in select free trade zones and permitting wholly foreign-owned hospitals, while adhering to regulations and restrictions.
On September 8, 2024, the Ministry of Commerce (MOFCOM) published a circular on its official website announcing the expansion of pilot programs for opening up the medical sector (the Circular). This circular lifts bans on foreign-invested enterprises (FIEs) engaging in cell and gene therapy (CGT) in selected free trade zones (FTZs) and permits wholly foreign-owned hospitals in selected cities.
This follows the release of the full text of the “Special Administrative Measures for Foreign Investment Access (Negative List) (2024 Edition)” (2024 FI Negative List) by the MOFCOM and the National Development and Reform Commission (NDRC) on the same day.
While the final 2024 FI Negative List still includes provisions prohibiting investment in human stem cells, gene diagnosis and treatment technology development and application, and limiting medical institutions to joint ventures, the relaxation of foreign investment limits in CGT and medical institutions in pilot cities aligns with the directives from the State Council meeting, offering new opportunities for foreign investors eyeing China’s biotech and healthcare sectors.
Below, we summarize the key points of the Circular and delve into its implications.
According to the Circular, effective immediately, FIEs are now permitted to engage in the development and application of human stem cell, gene diagnosis, and treatment technologies within the China (Beijing) Pilot Free Trade Zone, China (Shanghai) Pilot Free Trade Zone, China (Guangdong) Pilot Free Trade Zone, and Hainan Free Trade Port (FTP). These activities are aimed at product registration, listing, and production. Once registered, listed, and approved for production, these products can be utilized nationwide.
Despite this relaxation, FIEs participating in the pilot program must adhere to relevant Chinese laws and regulations, including those related to human genetic resource management, drug clinical trials (including international multi-center clinical trials), drug registration and listing, drug production, and ethical review, and must follow the necessary management procedures.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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China
Agoa trade deal talks: South Africa will need to carefully manage relations with the US and China
South Africa must navigate its economic relationships cautiously amid rising tensions between China and the US, particularly during the 2023 Agoa Summit, to protect its interests and strengthen diplomacy.
South Africa must tread carefully in its economic relationships to avoid being caught in the escalating tension between east and west, and more specifically China and the US. The country’s hosting, and the outcome, of the 2023 Agoa Summit should strengthen its role in diplomatic relations and contribute towards safeguarding the country’s economic interests.
From 2-4 November 2023, the US and 35 sub-Saharan African countries will meet in Johannesburg for the 20th Africa Trade and Economic Cooperation Forum (Agoa Forum). It entails strengthening trade and investment ties between the US and sub-Saharan Africa through the Africa Growth and Opportunity Act (Agoa), US legislation which provides various trade preferences to eligible countries in the region.
Given Russia’s continuing war in Ukraine and its rising tension with Nato, plus the China-US trade war, tensions between east and west are high. South Africa has come under attack for its non-alignment role in the Ukraine war. It refused to support UN resolutions condemning Russia. This resulted in some US congressmen pushing for the forum to be moved out of South Africa.
The country recently hosted the 15th Brics summit, which resolved to expand the Brazil, Russia, India, China and South Africa grouping to 11 member states. The enlargement will bolster Brics’ role as a geopolitical alternative to the west, which is dominated by the US. Might this be a direct challenge to American hegemony?
I have been researching major global economic developments, such as globalisation and the impact of the 2008 global financial crisis, for 20 years. This body of work shows the risks that come with behaviour like South Africa’s. The country could find itself in the middle of a tense situation.
South Africa needs to pull off an exceptional balancing act in managing its international relations in a sensible way that protects and advances its economic interests.
Note that the geopolitical tensions between China and the US are not just about trade disputes. They also include espionage, China’s Belt and Road Initiative, climate change and environmental issues, and tensions over Hong Kong, Taiwan and South China Sea disputes.
As a major source of infrastructure financing to sub-Saharan Africa, China is now the region’s largest bilateral official lender. Its total sub-Saharan African external public debt – what these governments owe to China – rose from less than 2% before 2005 to over 17% in 2021.
Agoa might present a challenge to China as competition for its own interests in Africa. China would like African countries to untie or loosen their agreements with the US. It is thus a good moment to take stock of the actual benefits South Africa has derived from the Agoa agreement with the US.
What Agoa is about
The Agoa agreement was approved as legislation by the US Congress in May 2000 for an initial 15 years. On 29 June 2015 it was extended and signed into law by then president Barack Obama for a further 10 years to 2025.
It will come into review again in 2024, hence the importance of the upcoming summit. Recently, Louisiana senator John Kennedy introduced a bill to the US Congress to extend Agoa by a further 20 years to 2045. This is a bid to counter China’s growing influence in Africa, and to continue to allow sub-Saharan African countries preferential access to US markets.
Agoa’s benefits to South Africa
In 2021, the US was the second most significant destination for South Africa’s exports worldwide, mainly thanks to Agoa. China took the top spot; Germany was third. The US ranked third as a source of South Africa’s imports, following China and Germany. In that year, the total trade volume between South Africa and the US reached its zenith at $24.5 billion, with a trade imbalance of $9.3 billion in South Africa’s favour.
Agoa offers preferential entry for about 20% of South Africa’s exports to the US, or 2% of South Africa’s global exports. The stock of South African investment in the US has more than doubled since 2011, amounting to US$3.5 billion in 2020. American foreign direct investment (FDI) in South Africa increased by over 70% over that period, to US$10 billion. This made the US South Africa’s fifth largest source of FDI in 2019. The US was its third largest destination for outward FDI.
US investment in South Africa is mainly concentrated in manufacturing, finance and insurance, and wholesale trade, which is vital for economic growth. American multinationals doing business in South Africa employ about 148,000 people.
More specifically, Agoa’s benefits include:
duty-free and quota-free access to the US market for a wide range of South African products. This benefits South Africa’s textile and apparel industry in particular. To sub-Saharan African countries, Agoa provides duty-free access to the US market for over 1,800 products. This is in addition to the more than 5,000 products that are eligible for duty-free access under the US Generalised System of Preferences programme
export diversification, especially of items such as agricultural products, textiles, and manufactured goods. This is vital for increasing export earnings, which help to improve South Africa’s balance of payments, particularly its trade account.
capacity building through technical assistance and programmes to help South African businesses meet US standards, thus becoming more competitive in the global marketplace.
economic development and poverty reduction, which aligns with South Africa’s developmental goals.
Balancing economic interests
China is the largest consumer of South African commodity exports, and thus a key influencer of the rand exchange rate. In addition, China and Russia’s planned move towards de-dollarisation (trying to replace the petrodollar system with their own system) puts American interests under threat. This means South Africa needs to carefully navigate its relations with the US and its Brics partners, China and Russia.
It will want to keep strong ties with the US through Agoa without getting into a difficult position between China and the US. The outcome of the November meeting will have serious economic implications.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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- Unlocking Potential: China Welcomes Foreign Investment in Cell Therapy and Fully Foreign-Owned Hospitals in Select Pilot Cities
- Self-Reliance and Openness: Core Principles of China’s Third Plenary Session
- Trade Prevails Over Political Persuasions in China-Germany Relations
- Agoa trade deal talks: South Africa will need to carefully manage relations with the US and China
- Beijing introduces Negative List to streamline Data Export in Free Trade Zone
