1.Supreme People’s Court looking to support private businesses
One key theme of the Two Sessions this year is improving the business environment and supporting private businesses (see March 5 Tip Sheet).
On Tuesday morning, China’s chief justice reiterated the message (Caixin):
- “Zhou Qiang, who is also president of the Supreme People’s Court of China, delivered this year’s report to the National People’s Congress Tuesday morning.”
- “Zhou said that in 2019 China would intensify protections of property rights and protect the legal rights and interests of all categories of market participants.”
- “The legitimate rights and interests of private enterprises and entrepreneurs should be accorded equal protection under the law, Zhou added.”
A focus on property rights isn’t unusual, but the explicit nod to private businesses is:
- “This marks the third year in a row that the Supreme Court’s work report…has mentioned the protection of property rights.”
- “But this is the first time that private businesses have been specifically pointed out in relation to these rights.”
Get smart: You know the rule of law isn’t exactly strong when the chief justice says the key goal is essentially – “we’ll enforce the law when it comes to private companies.”
Get smarter: Private businesses are getting lots of love at the Two Sessions, but we’re still skeptical it will make much difference in practice.
Caixin: China’s Top Judge Highlights Rights of Private Firms for 2019
2.Party cuts local officials some slack
Get excited. 2019 is officially “Alleviate Burdens on Grassroots Cadres Year!”
That’s according to a new circular released by the Central Committee General Office on Monday.
So how, exactly, will burdens of grassroots cadres be alleviated?
- First, the number and length of documents and meetings will be strictly reduced. Specifically, local Party agencies will not be able to release policy documents longer than 10 pages. They are also discouraged from issuing implementing rules that largely duplicate the efforts of higher-level authorities.
- Second, they are going to drastically reduce inspections and the associated reporting.
- Third, mid-level cardres will not be able to excessively burden grassroots officials with mandatory, conflicting targets.
Our take: This document is FASCINATING. It implicitly recognizes that the top-down, target-heavy approach of Xi Jinping is not working. It alsoimpliesthat a lot of mid-level officials are shirking their responsibilities.
The bottom line: Xi Jinping has spent six and a half years trying to retool the Party into a more effective and efficient organization. Those efforts have not been a success.
CPC People: 中办发出《通知》解决形式主义突出问题为基层减负
3.State Council improves property registration process
The State Council General Office released guidelines Monday to make it easier to register property.
They will shorten the process (Xinhua):
- “The time required for general registration and mortgage registration will be cut to no more than 10 and five working days respectively, by the end of this year.”
- “Before the end of 2020, both are expected to be reduced to no more than five working days.”
And simplify the process (Gov.cn):
- “A comprehensive window should be established at the administrative service hall or immovable property registration hall to deal with related items and collect all materials in one visit.”
Local governments are also supposed to improve data sharing:
- “Local government should accelerate the integration and quality improvement of stock data and complete data improvement and exchanges before the end of 2019.”
Why this matters:A better property registration system will make it easier to roll out a property tax.
The bigger picture:A clearer picture of “who owns what” will create a better functioning real estate market.
Gov.cn: China to reduce immovable property registration time
4.Trade negotiations with US plod on
Vice Premier Liu He spoke with US Trade Representative Robert Lighthizer and US Treasurey Secretary SteveMnuchin on Tuesday.
They were discussing a possible agreement to end the trade war.
Liu was up early – the call was at 7 am.
The Chinese readout is, um, pretty thin (Gov.cn):
- “The two sides held specific consultations on key issues of the text and confirmed the next steps for the negotiations.”
What, exactly, those next steps are, however, remains unclear.
Important context (Bloomberg):
- “Trump and his aides have for weeks been pushing for Xi to agree to a meeting at Mar-a-Lago, the president’s club and resort in Palm Beach, Florida, to finalize a deal as soon as this month to end a dispute that has cast a shadow over the global economy.”
- “Trump himself has said that it’s only when the two leaders meet that the final details can be ironed out.”
- “Chinese officials, however, have long been wary of putting Xi in a position where he might be embarrassed by an unpredictable Trump or forced into last-minute concessions.”
What to watch: If we see another face-to-face meeting of negotiators, it means the two sides are making progress.
Bloomberg: Fear of Trump Walking on Xi Haunts China as Trade Talks Near End
5.Pedal to the metal on environment protection
Conventional wisdom is that Beijing will ease up on environmental protection once the economy really starts struggling.
But Li Ganjie begs to differ.
At his Two Sessions press conference yesterday, the minister of ecology and environment said he is going full steam ahead (Xinhua):
- “It is necessary to maintain the strength of ecological and environmental protection.”
- “No wavering, no relaxing.”
- “Otherwise we will not only give up what’s been achieved, but also create [even bigger] aftermath.”
Li wants to keep local level cadres accountable:
- “If [we] find out localities are letting protection give way to development, we…will seriously hold them responsible.”
But Li is also trying to take a more nuanced approach than in the past. Central authorities want to clean up the air, but they don’t want wholesale industrial shutdowns either.
- Local MEE officials now need to give business a grace period to correct environmentally bad behavior before heavy penalties are assessed.
Get smart: The purpose is to actually get companies to be compliant rather than simply shutting them down temporarily. If successful, the policy will create steady, long-term environmental improvements, rather than the start-and-stop progress that we have seen in the past.
6. Li Ganjie diagnosesair pollution
Besides the high-level view on environmental protection policy (see previous entry), Li Ganjie also gave an important update on the state of pollution research.
Some context: Since 2017, the State Council has spent RMB 600 million to study causes and cures for air pollution. In doing so, the body has enlisted over 2,000 of the country’s top experts.
At his presser, Li Ganjie touched on the state of play, saying that four sources account for over 90% of particulates.
The culprits, in order:
- industrial emissions
- burning of coal
- vehicle emissions
- road dust
Get smart: Now that the environmental ministry has a clear diagnosis of the problem, expect it to crack down on the top sources of pollutions even further.
What to watch: The research program will conclude by the end of 2019, and the project team should publish a major study early next year. That study will help to further refine environmental policy.