China Policy

Join Philippa Jones and Erlend Ek who will be our speakers at the next Menas Associates webinar on the implications for western companies of China's vast green technology sector.

sanming healthcare reform 三明医改 sānmíng yīgǎi A healthcare reform mode originating in 2012, when insurance funds in Fujian’s Sanming City province dealt with issues threatening localities nationwide such as · health insurance funds in deficit · state finances declining to cover the shortfall · the public hit by crippling medical costs · doctors paid low salaries A leadership group coordinating the response was set up by Zhan Jifu 詹积富 then a Sanming vice mayor. It tackled pharmaceutical and medical supplies issues via · launching zero mark-up sales on medical supplies citywide · limiting pharmaceuticals within the ‘two-invoice system’ · limiting purchase of a given pharmaceutical to a maximum of two receipts · centralised volume-based procurement · real-time monitoring of high-cost drugs with uncertain efficacy controlling inflated prescriptions and trimming charges for major equipment tests Medicine prices and healthcare costs fell citywide. Insurance fund deficits were curbed, with surpluses for years in a row. Service fees were raised, rewarding skills. Total salaries paid out in 2013 rose from C¥ 382 mn to 2.0 bn 2011–22. State Council issued its ‘Key tasks for deepening healthcare system reform 2021’ in June 2021, urging ‘promoting Sanming reforms nationwide, speeding up coordinated reform of medical services, health insurance, and medicines’. With a growing elderly population straining healthcare insurance, State Council reiterated the need for Sanming-style reform on 6 June 2024. https://lnkd.in/gUXcAnqV

The 24 September 2024 ‘stimulus’ is misnamed. Giving moderate easing only, it’s better seen as a new round in a bid since October 2023 to turn stock markets around. New policy tools shift the game in equities, explains Xu Gao 徐高 Bank of China, trimming the gap between stocks and PBoC-created currency, with trillions in support pledged. Dividing stock performance from GDP is the point, allowing prices to outpace growth. A  post-decision CSRC Opinion coaxed ‘patient capital’ into deeper exposure in hope of stable, bankable returns. PRC stocks then saw their best week ever; the RMB rallied, punters rushing brokerages nationwide to share the bull run. Feelings soon cooled: the Shanghai Composite lost 10 percent in the trading week before 14 Oct 2024. Solid fiscal support in hand: this is what markets must sense, if the sustained recovery sought in asset prices—with spillover to consumption and investment—is to arrive. Two chances to deliver this sense have passed: NDRC and MoF media conferences 8 and 12 October made no mention of trillions in ‘ultra long-term’ bond offerings clamoured for since late 2023. More is coming, insisted the Politburo on 26 September 2024, but what it amounts to remains murky. https://lnkd.in/gzStvdcz by Itamar Waksman

september: FOCAC leaders in force in Beijing, by @policycn https://buff.ly/4gDpW01

institutional opening 制度型开放 zhìdù xíng kāifàng  Since its first mention at the 2018 Central Economic Work Conference, ‘institutional opening’ has risen as a trade and development priority for Beijing. Referring to ‘behind-the-border’ opening, addressing non-tariff barriers, and improving standards and policies beyond its WTO commitments, it is now frequently spotlighted in high-level conclaves such as Two Sessions and the Third Plenum.   Against shifts in geopolitics and emerging trade trends, ‘institutional opening’ is becoming integral to the process whereby Beijing is renegotiating and rewriting trade rules with the world. Much exploration and trial-and-error is in train. While advanced trade rules like CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) guide some reform efforts at home, Beijing is also championing norms-setting agendas of its own as a counterweight, not least via friendly bilateral initiatives and regional pacts such as BRI (Belt and Road Initiative) and RCEP (Regional Comprehensive Economic Partnership). Action is also underway to test new ‘institutional opening’ rules via the country’s many special zones, such as the FTZs (free trade zones). https://lnkd.in/gqwU_aqs

september: FOCAC leaders in force in Beijing, by @policycn https://buff.ly/4gDpW01

How effective is #China in closing the urban-rural development gap? The current round of ‘rural revitalisation’ launched in 2018 builds on earlier poverty alleviation initiatives. Rural incomes grew some 270 percent 2010-20 (vs.170 for urban incomes). https://lnkd.in/gqgUYQai That still leaves a C¥30K rural-urban income gap underscoring continuing inequity and inequality. Rural incomes may be growing, but migration to the cities remains a reality. Cities produced over 75 percent of GDP in 2023. The #ThirdPlenum again urged urbanising rural migrants. Beyond income growth, boosting rural revitalisation entails improving public services, argued Han Jun 韩俊 MARA. State-funded teaching programs and lunch programs were launched aiming to improve rural education and tackle health and eyesight issues among students. Some critique the teaching programs’ perverse incentives–some teachers only joined only for career advancement. A 2023 audit report also shows misuse in the lunch fund. The rural-urban divide threatens modernisation, warns Liu Shouying 刘守英 Renmin University.

august: summer of discontent, by @policycn https://lnkd.in/gPjctvSg

building Zhonghua identity @policycn read full article https://lnkd.in/gmW7a2hw Kalos Lau is a governance and law analyst at China Policy. David Kelly is co-founder of CHINA POLICY and author of Beijing Baselines. In this piece, they examine how Beijing is promoting a ‘Zhonghua’ (Sinitic) nation to fuse together the multiple identities within the vast Chinese population.

I am glad to have contributed to our team's new policy brief, examing novel judicial and legal support provided to the Chinese private sector. Boosting private economic growth remains a paramount task for Beijing. In the Third Plenum, the state reaffirmed its commitment to support both public and private sectors, offering a balanced approach to development. Notably, the NDRC confirmed that the state had accelerated progress on the long-awaited Private Economy Promotion Law, supported by renewed Social Credit Systems and local law review mechanisms. Interested in the shifting dynamics within the world's second largest economy? Click below to uncover the details.