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Download this week’s newsletter as a PDF here: CPW No. 51
Dear friends and colleagues,
A busy week this week, so limited commentary. Thanks to all of those who responded to last week with offers of assistance; apologies that I have not replied to many of you- climbing out from under a mountain of work and admin, so you should hear from me soon.
One step closer to common destiny.
Xi made a state visit to Pakistan, where he upgraded the bilateral relationship to an “all-weather strategic partnership of cooperation”. He then headed to Jakarta, Indonesia to attend the 2015 Asian-African Summit and commemorate the 60th anniversary of the Bandung Conference. The visits come as China reorients its foreign affairs to give priority to regional diplomacy. China lavished money on Pakistan and promised in Jakarta to support developing countries with no political strings attached. The visits served to reinforce the perception that China is increasingly becoming the center of gravity for the region.
In Jakarta, Xi met with Japanese Prime Minister Shinzo Abe. Optics from the meeting looked a lot better than the famously frosty handshake in Beijing last November. Hopefully this means relations are thawing. 2015 could still be an explosive year as WWII commemorations to be held in both countries have the potential to stoke nationalist passions and further strain the relationship.
Monday’s State Council meeting stated that there is “growing pressure on employment” and announced several measures to address the issue. These include: tax benefits for companies hiring people who have been jobless for more than six months; easing location restrictions for new businesses; raising the maximum amount of guaranteed loans for startups; and other measures.
The meeting marks a distinctive shift in tone. Previously, Premier Li has touted the fact that employment grew by 13 million last year, well above the government target of 10 million. That the official line is now that there is “growing pressure” points to further weakening of the economy- and increasing anxiety in Beijing.
Allow the people to buy with confidence
China’s legislature held its bimonthly Standing Committee meeting this week. They passed new versions of the Food Safety Law and Advertising Law. The general thrust of revisions is towards enhancing consumer protection.
Free trade with the rebel province
After Monday’s State Council meeting, Li Keqiang headed to Fujian for a three-day inspection tour in Fujian. The purpose of the trip was to give support and momentum to the newly inaugurated Fujian Xiamen Free Trade Zone. The new FTZ is focused on promoting cross-straits trade and investment. During the trip Li was explicit in telling Taiwanese businessmen that new regulations limiting the ability of local governments to offer tax breaks and other investment incentives would not affect already existing agreements with Taiwanese firms. Yu Zhengsheng delivered the same message during his inspection tour to Nanjing.
Cross-strait relations don’t get much press these days, but they still constitute perhaps the greatest risk to regional stability. Despite increased economic integration, Taiwanese identity continues to develop in a way that makes reunification with a CCP-led mainland increasingly unpopular on the island. Presidential elections in January 2016 could very well see a return of the DPP to power; this would almost certainly complicate cross-strait relations. Beijing is right to make sure that it continues to court favor with Taiwanese businessmen as they provide an important pro-Beijing voice in Taipei.
|About CPWChina 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.
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