China Newsletter

Issue 90 – July 15, 2021

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In This Issue

The articles shared here do not necessarily reflect the views of China Newsletter or Dialogue China. All articles sourced from WeChat public accounts unless otherwise noted.I. Editorial

1. How to Understand the Communist Party of China (Part One)

II. Policy

2. Government Size, Fiscal Decentralization, Official Characteristics, and Regional Corruption Levels: A Quantitative Analysis Based on Data from 333 Prefectural Cities

3. How to Deal with the Dilemma of Having Duties but no Authority in Village and Township Rural Government

III. Politics

4. China-Japan Space Governance: Prospects for Competition and Cooperation

5. The Biden Administration’s Economic Alliance with China is Becoming Clearer

IV. Society

6. High-Priced “Life-Saving Drugs”: Squeezed Into the Door of Medical Insurance, Difficult to Pass the Hospital Gate

7. Rural College Students: the Psychological Cost of Upward Mobility

V. Finance and Business

8. China, the BRICS [Brazil, Russia, India, China and South Africa], and the Limits of Reshaping Global Economic Governance

9. Fundamentals and Strategies of Chinese Digital Renminbi

10. A Real Estate Tax is Coming, Will Housing Prices Rise or Fall?

Editorial

1. How to Understand the Communist Party of China (Part One)

Wang Dan – Radio Free Asia Opinion Column – June 21, 2021

July 1, 2021 was the centenary of the founding of the Chinese Communist Party. The Communist Party early on seized on this opportunity to extol itself, constantly praising its “greatness, gloriousness and correctness.” This kind of self-aggrandizement, of course, is no longer marketable, and I’m afraid that even the members of the Central Propaganda Department’s writing team themselves do not believe every word they write. But on the other hand, this centennial of the Chinese Communist Party’s founding has had and is still having a tremendous impact on the development of China over the past century. We certainly do not agree with the statement that “without the Communist Party, there would be no new China.” But it is certain that without the Communist Party, China would be a very different place today. For such a century-old party that has shaped the fate of China’s development over the past 100 years, on the occasion of its centennial it is necessary to do some analysis and increase understanding of it. I have some simple ideas that I would like to share with my listeners in several sessions.

First is the Chinese Communist Party’s violent nature. We must recognize that the Communist Party, from the first day of its establishment until now, has had one distinctive characteristic and that is “violence.” It is a party that worships violence, has blind faith in violence, was founded on the appeal of violence to attract supporters, expanded its political power through violence, seized political rule by violence, and relies on violence to maintain and consolidate its ruling party position. This political party, because it completely relies on violence, does not have the conditions and is not naturally equipped to evolve into a modern political party. We also cannot imagine that it is willing to resolve social conflicts in a modern and civilized way. Even after it had been in power for forty years, in 1989, when the people rose up and appealed for political reforms from it, it resorted to violent means to repress the reform appeals. This demonstrates that violence has become the Communist Party’s habitual approach to solving problems.

More importantly, violence has characterized more than just the Party’s conduct. Violence has profoundly influenced the Chinese Communist Party’s mindset, making the Communist Party’s political line violent as well. Such a line has permeated the soul of the Communist Party, and has become the deepest foundation of the Communist Party’s ideas and policies. The influence of violence on the Communist Party began in its infancy, and has been intensified and deepened over the past 100 years. It can be said that the Communist Party has developed a path dependence on violence, and it is impossible to get rid of its influence. It is very important to realize this, because only by clearly recognizing the violent nature of the Communist Party can we abandon our false illusions and face up to the difficulty and cost we will have to pay to end the Communist Party’s single-party dictatorship.

Second is the Communist Party’s legitimacy. It has been 100 years since the Chinese Communist Party was founded, and 72 years since it came to political power. We seem to just accept the legitimacy of the Communist Party as the ruling party of China. But we in fact should realize that there is no procedural legitimacy for the Chinese Communist Party to exercise its ruling power in China. After using the means of warfare to defeat the Nationalists [Kuomintang], the Chinese Communist Party declared the establishment of the People’s Republic of China. This process has never been legitimized through popular elections, which is the minimum standard for establishing a ruling political party’s legitimacy.

Although the world recognizes the People’s Republic of China, the legitimacy of a regime is not only based on the recognition of other countries, but must also be based on the recognition of the people of its own country. In this regard, the Chinese Communist Party asserts that it has the support of the whole country, but it cannot produce any concrete evidence. For seventy-two years, the Communist Party has never proven the legitimacy of its rule through a legitimate means. The Chinese Communist Party claims to “serve the people,” but the Chinese people have never had a chance to freely express their choice by voting. What is more, as a political party with an organizational structure at all levels of society, the Communist Party has not even registered as a political party with the Ministry of Civil Affairs. So strictly speaking, the Communist Party itself is an extra-legal organization. There is certainly no legitimacy to the rule of an extra-legal organization.

Since Communist Party General Secretary Xi Jinping came to power, the Chinese Communist Party has continued to emphasize all kinds of self-confidence. If they are really so confident, they should hold popular elections and let the results establish the legitimacy of their rule and prove that they really have the support of China’s people. No matter how confident they are in their words, they always remain afraid to test their legitimacy in a formal way. This shows that they themselves do not have confidence in their own legitimacy, so on what basis do we recognize their claim of legitimacy?

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Policy

2. Government Size, Fiscal Decentralization, Official Characteristics, and Regional Corruption Levels: A Quantitative Analysis Based on Data from 333 Prefectural Cities

Ni Xing, Liu Fei – Political Scientist – March 27, 2021

Why Read This?
Government integrity is the key to determining the overall competitiveness of a region, and the size of government, fiscal decentralization and characteristics of officials are the main factors affecting the level of integrity of a region. Therefore, in the process of promoting the modernization of clean governance, in addition to maintaining the high pressure of punishing corruption, it is also necessary to attach great importance to the reform of supporting systems, properly restrain the size and financial autonomy of local governments, increase the mobility of local principal officials, promote economic development, expand government spending on public services, emphasize the development of education, and cultivate modern citizens with public awareness.（Read the full text）

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Policy

3. How to Deal with the Dilemma of Having Duties but no Authority in Village and Township Rural Government

Yan Changwu, Xu Danmin – Political Scientist – April 1, 2021

Why Read This?
As an administrative system, territorial management emphasizes the division of responsibilities between governments on a territorial basis and gives territorial governments a certain degree of autonomy, with a view to achieving the institutional goal of having responsibility for the land. A survey of the town of Z in eastern Guangdong Province shows that: The local management in the grassroots governance is more of a responsibility implementation and accountability mechanism, and gradually evolved into a tool for the higher functional departments to shake off the responsibility, the township government is thus caught in a governance dilemma of having duties without the requisite authority.（Read the full text）

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Politics

4. China-Japan Space Governance: Prospects for Competition and Cooperation

Saadia M. Pekkanen – National Politics Scholar – April 6, 2021

Why Read This?
Both China and Japan are world-class space powers with excellent technological capabilities in conventional and “new space” capabilities. Since the early 1990s, both countries have had a strong interest in outer space governance. However, the two countries have very different approaches to governance, which raises questions about Asian countries’ preferences for soft and informal mechanisms. This paper assesses the activities of China and Japan in the new space race, discusses how and why their space governance designs differ, and considers the prospects for competition and cooperation between the two countries.（Read the full text）

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Politics

5.The Biden Administration’s Economic Alliance with China is Becoming Clearer

Zhao Lan – Political Science and International Relations Forum – April 8, 2021

Why Read This?
Since Democratic President Joe Biden took office, there has been widespread concern in the international community about the future direction of U.S.-China relations, especially whether the Biden administration will maintain its hard line attitude toward China under Trump. A new Biden coalition is forming to try to use economic tools to surround China.（Read the full text）

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Society

6. High-Priced “Life-Saving Drugs”: Squeezed Into the Door of Medical Insurance, Difficult to Pass the Hospital Gate

Huang Sizhuo, Chen Jieling – Southern Weekend – March 14, 2021

Why Read This?
High-priced “life-saving drugs” have been squeezed into the door medical insurance, but hospitals cannot afford them, so the phenomenon of patients needing to go to self-pay pharmacies to buy them is still common. The innovative drugs that are included in the medical insurance reimbursements in most hospitals still face difficulties in being approved, “through the negotiation of drugs included in the medical insurance catalog, some hospitals into fifty-six percent, sixty to seventy, some only into two or three, three or four varieties.” In the past, the sale of drugs was a profitable item for hospitals. After the implementation of the zero-plus-cost drug policy nationwide in July 2017, the sale of drugs became unprofitable and hospitals lacked incentive to select and introduce new drugs.（Read the full text）

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Society

7. Rural College Students: the Psychological Cost of Upward Mobility

Wang Hengping, Yuan Jing – Qualitative Research – March 21, 2021

Why Read This?
Through the analysis of data and in-depth interviews on the topic of “rural college students” on Zhihu*, this paper finds that rural college students in the process of social mobility have positive emotional experiences, but also negative emotional experiences that are neglected and suppressed, which supports the explanation of the “dissociation” effect. This experience is based on the dual logic of: “retracing the path of the heart” and “comparing class travel,” which link the themes of identity, educational mobility, class loyalty and class position. The conclusions of this paper can provide a new perspective on the current interventions for campus and workplace adaptation of rural university students.
* Zhihu is a Chinese question-and-answer website where questions are created, answered, edited and organized by the community of its users. Its website, zhihu.com, was launched on January 26, 2011. In Classical Chinese, Zhīhū (知乎) means “Do You Know?”（Read the full text）

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Finance and Business

8. China, the BRICS [Brazil, Russia, India, China and South Africa], and the Limits of Reshaping Global Economic Governance

He Chenhui – National Politics Scholar – April 2, 2021

Why Read This?
This article examines how and why China and the BRICS countries [Brazil, Russia, India, China and South Africa] are reshaping global economic governance, and the extent to which the BRICS and BRICS institutions represent a new trend in global economic governance. More importantly, this article analyzes how China is reshaping global economic governance through the BRICS organization, and the impact of China’s independent initiative on the reshaping of global economic governance by the BRICS countries.（Read the full text）

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Finance and Business

9. Fundamentals and Strategies of Chinese Digital Renminbi

McNally – Great Statecraft Think Tank – March 26, 2021

Why Read This?
Chinese monetary authorities have been working on digital RMB since 2014. This led to the establishment of the People’s Bank of China Digital Currency Institute in mid-2017. Digital Renminbi – officially named “Digital Currency Electronic Payment (DCEP)” – various trials are currently being conducted across the country. Once offered free of charge as legal tender, its technical features could lead to a monetary revolution with significant global impact.（Read the full text）

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Finance and Business

10. A Real Estate Tax is Coming, Will Housing Prices Rise or Fall?

Xie Jiu – Sanlian Life Monthly – April 9, 2021

Why Read This?
On April 7, 2021, Wang Jianfan, Chief Secretary for Taxation of the Ministry of Finance, said that during the Fourteenth Five-Year Plan period, the Ministry of Finance will “actively and steadily push forward real estate tax legislation and reform.”（Read the full text）

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