China Newsletter (Issue 92 – August 15, 2021)

Subscribed? Check “update your preferences” at the bottom of this newsletterChina NewsletterWhat China Is ReadingIssue 92 – August 15, 2021Reader Feedbacks to China Newsletterto improve our China Newsletter!In This IssueThe 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. Editorial1. View of the 2022 20th National Congress of the Communist Party of China from the Perspective of the Centennial of the Communist PartyII. Policy2. The “Reverse Movement” of Modern Urbanization and the Chinese Logic of Grassroots Governance: Theoretical Reflections Based on Shanghai’s Innovative Social Governance Experience3. How Does “Red Tape” Affect Performance in Specialized Governance? — A Mixed Study Based on Primary Government Data4. The Rise of Health Codes, Digital Identity and Authentication Infrastructure5. Village Governance through “Face”: An Anthropological Study of Dispute Management in a Village in South Central Guangxi Zhuang Autonomous RegionIII. Politics6. Alibaba is Fined: How Does the Country Regulate a Technology Leviathan? 7. China’s Digital Renminbi Will Weaken the Impact of the United States Financial Sanctions8. The Possibility of Another War Between China and Japan IncreasesIV. Society9. What Should We Be Most Concerned About Behind China’s Population of 1.4 Billion People?V. Finance and Business10. Digital Renminbi is Coming, Will Cash Disappear?11. Behind the 300 Million People “Revenge” Traveling, Who is the Biggest Unexpected Winner?Editorial1. View of the 2022 20th National Congress of the Communist Party of China from the Perspective of the Centennial of the Communist PartyWang Dan – Think Tank – August 15, 2021As the Communist Party of China celebrates 100 years since its founding, it is constantly lavishing praise on itself about its political achievements in official media. But there are hardly any reverberations in international public opinion. Discussion on the “Communist Party of China’s Centennial” in the Western academic community and media is also pathetically low. The reality of the Communist Party of China as utterly isolated, compared with paramount leader Xi Jinping shouting himself hoarse with the slogan: “Long Live the Communist Party of China” from the Tiananmen Square rostrum on July 1, 2021 is simply a drama and a farce.

But the outside world must not underestimate the ability of the century-old Communist Party of China to remain in power. Despite its showing signs of rigor mortis, any prediction of the imminent downfall of the Communist Party is wishful thinking. No matter how many particular problems there are, from a big picture perspective China is now the world’s largest trading nation and the second largest economy in the world after the United States. It is the chief trading partner for all other countries in Asia. At its inception in 2013, 64 countries participated in the Communist Party’s ambitious so-called “One Belt, One Road” project. If this project is successful, it will further significantly expand China’s economic and diplomatic impact and presence in Southeast Asia, Central Asia, the Middle East and Europe. In recent years, China’s economic growth rate has slowed. The annual growth rate has dropped from double digits to less than seven percent. But as long as it can maintain a growth rate of at least three percent in the foreseeable future, it can overtake the United States to become the world’s largest economy. More importantly, at present we do not see any strong political opposition force inside China, nor is there any sign of a breakdown in social order. For this reason, on the surface it seems that the 100-year-old Communist Party of China’s foundation for maintaining political rule is still solid.
This kind of large country, for the whole world and neighboring countries, naturally presents a great threat, not to mention the complete lack of democracy in China’s political system. What’s more, 100 years after the Communist Party of China’s founding, there is an increasing possibility that it will gradually take the path of militant fascism. For quite a long time, many people thought that with China’s economic growth, it would integrate into the world economic system and become more politically open. They believed that it would at least realize partial political liberalization. But this development has not taken place so far. The People’s Republic of China is still a single-party dictatorship. At the same time, leveraging the growth of its economic power, China’s military strength is also rapidly increasing. The PRC’s defense budget increased from US$1.7 billion in 1990 to US$15.2 billion in 2017, an increase of 900 percent. Observers must squarely recognize this problem. What does a rising, authoritarian China mean for Asia and the world order? Xi Jinping, who took over the reins of power in 2012 as a new political strongman, adds to the complexity of the problem.

Unlike his predecessors Hu Jintao and Jiang Zemin, as soon as Xi Jinping became the General Secretary of the Communist Party of China, with shocking speed he broke the consultative decision making structure within the Communist Party that had gradually developed since the [1966-1976] Cultural Revolution, and reconstructed what is reminiscent of the personal dictatorship of the Mao era. At the same time, by imposing harsh suppression of civil society, thought, and public opinion, Xi Jinping appears to be attempting to return China – which has become socially and economically diverse – to the totalitarianism of the Mao era. In terms of external relations, Xi Jinping has also abandoned the traditional practices inherited from Jiang Zemin and Hu Jintao, the Deng Xiaoping-established policy of “hiding one’s abilities and biding one’s time.” Aggressive and overbearing in handling relations with neighboring countries, more assertive and increasingly tough in dealing with major powers such as the United States. More importantly, Xi Jinping is wholeheartedly bent on re-establishing the Chinese Communist Party’s control over every aspect of society. The so-called policy of “the whole country is surnamed the Communist Party, and the whole Communist Party is surnamed Xi” is in full swing. For Xi Jinping, the “Chinese dream” is mainly based on the abolition of civil society and the reconnection of the whole society and every person in the country through Communist Party organizations. Consequently, in a reality where opposition forces are unlikely to quickly replace the Communist Party, the future development of the Party – which celebrates its centennial this year – is an extremely important variable to watch. The first thing to pay attention to is the 20th National Congress of the Communist Party of China which will be held next year.
If there are no surprises, in autumn 2022 the 20th National Congress of the Communist Party of China will be held. The general prediction of the outside world is that at the 20th National Congress, Xi Jinping will break with the Communist Party’s established succession practice and continue to rule for a third five-year term while not even nominally making preparations for a successor. The 20th National Congress is likely to further remove obstacles to Xi Jinping’s personal centralization of power, and strengthen and consolidate his strongman rule. His name and ideological expression will probably be further raised to the level of “Mao Zedong Thought.” In the organization of personnel, Jiang Zemin’s faction within the Communist Party (the so-called “Shanghai Gang”) and the “Communist Youth League faction” (of which Hu Jintao was the leader) will see further decline. More of Xi Jinping’s cronies will be elevated to the top leadership, and the “Xi Family Army”* may gain a unique advantage.
* A double entendre based on The Yang Family Generals 楊家將, a collection of Chinese folklore, plays, and novels on a military family from the earlier years of imperial China’s Song Dynasty (960–1279). The stories recount the unflinching loyalty and the remarkable bravery of the Yangs as they sacrificed themselves to defend their country from foreign military powers, namely the Khitan-ruled Liao Dynasty (907–1125) and Tangut-ruled Western Xia (1038–1227). Spanning the century from 950 to 1050, the mostly fictional saga was based on the lives of historical characters Yang Ye (died 986), Yang Ye’s son Yang Yanzhao (c. 958–1014) and Yang Yanzhao’s son Yang Wenguang (died 1074). As Yang Yanzhao was nicknamed “sixth son” (六郎) in history, the stories made him Yang Ye’s sixth eldest son. Also, as Yang Wenguang was close to two generations younger than his father, the stories made him Yang Yanzhao’s grandson instead.
Regarding next year’s 20th National Congress of the Communist Party of China, we have a lot of questions to start thinking about: The rise of Xi Jinping’s strongman rule and efforts to return to Maoist totalitarianism, what will be the impact on the future and destiny of China? Can it revitalize the Communist Party as Xi Jinping expects it to, reinforcing the single-party rule of the Communist Party? Will it make the Communist Party stronger or weaker? Regarding Xi Jinping’s centralization of personal power, will the tug-of-war between factions at the top make the Communist Party more unstable? In the return to totalitarianism, and a more repressive political environment, what will be the reaction of ordinary people in China? Will China’s democrats get a chance to push China’s transition to democracy? Can the Chinese Communist Party bypass the so-called “middle-income trap”? Can Xi Jinping’s return to Maoist totalitarianism succeed?
Regarding Taiwan, the critical 20th National Congress of the Chinese Communist Party affects the fate of Taiwan. What does a rising, more authoritarian China mean for the global order? In particular, what does it mean for Taiwan Strait relations? Since the two general elections in 2016 and 2020 in which the Kuomintang [Nationalists] were defeated, Taiwan Strait relations are once again entering a relatively difficult period. This situation has been further exacerbated by Xi Jinping’s strongman rule through the 19th National Congress of the Communist Party of China. Will this trend continue? Will Taiwan face more pressure or threats? What is the difference between Xi and his predecessors on Taiwan Strait relations? How likely is he to show flexibility and pursue negotiations, communicating and solving problems in the Taiwan relationship, or acting tougher than ever, even resorting to military force? The current United States president has a great deal of unpredictability. This situation is very important for the Asian situation. What will the impact be on Taiwan Strait relations? How does Taiwan influence and support civil society’s efforts to fight for human rights and democracy in China?
The Communist Party is 100 years old. It is reasonable to believe that it is drawing its final breaths. But just as Chinese folk wisdom has it that the top leaders of the Communist Party hope to extend their lives through blood transfusions, the Chinese Communist Party will certainly require new blood to prolong its ruling position. The 2022 20th National Congress of the Chinese Communist Party will be a crucial conclave on how the Communist Party will extend its life. It is likely to be another critical milestone in the 100 year history of the Communist Party. Only this milestone points to different possibilities. The outside world should gather more information to reach a more accurate judgment.【Back to TopPolicy2. The “Reverse Movement” of Modern Urbanization and the Chinese Logic of Grassroots Governance: Theoretical Reflections Based on Shanghai’s Innovative Social Governance ExperienceLi Jinfeng, Yu Zucheng – Political Scientist – April 14, 2021Why Read This?
Market expansion and protective “reverse movement” coexist in modern society, it is a problem for any place where a market economy exists. As the engines of development of modern society, this problem is even more prominent in cities. The proportional distribution and degree of realization of market expansion and “reverse movement” form different governance requirements and determine the direction of urban development. Shanghai has responded to the challenges of the market economy through various measures of grassroots governance, and thus has universal significance, forming a Chinese logic of urban grassroots governance in four ways.(Read the full text

Back to topPolicy3. How Does “Red Tape” Affect Performance in Specialized Governance? — A Mixed Study Based on Primary Government DataYang Fan – Political Scientist – April 19, 2021Why Read This?
Based on data from 411 local governments across the country, this paper examines how the number of primary documents affects the performance of special governance. Research findings: the performance of the special treatment increases and then decreases with the increase of the number of primary documents. When the “performance inflection point” is crossed, in order to pursue efficiency goals, neglecting the task subdivision caused by an excessive amount of documents, system overlap and other issues, perhaps in pursuit of legitimacy goals, production of documents that are not in line with the actual performance of the organization, and finally, the phenomenon that organizational performance decreases as the number of documents increases.(Read the full text

Back to topPolicy4. The Rise of Health Codes, Digital Identity and Authentication InfrastructureHu Ling – China Law Review – May 31, 2021Why Read This?
When discussing the issue of health codes from an infrastructure perspective, it is important to understand how health codes can be transformed from a common media tool (QR code*) to a tool for enhancing health authentication of social subjects in a mobile environment. During the novel coronavirus pandemic, health codes have helped enable more mobility and related technologies around “connectedness” — the system innovation and the extension of the digital infrastructure construction after the improvement of the pandemic, its physical, institutional and public-private partnership characteristics deserve in-depth consideration and conclusion.
* A machine-readable code consisting of an array of black and white squares, typically used for storing URLs or other information for reading by the camera on a smartphone. Abbreviated form of quick response code.
Read the full text

Back to topPolicy5. Village Governance through “Face”: An Anthropological Study of Dispute Management in a Village in South Central Guangxi Zhuang Autonomous RegionZheng Zhenqing – Beijing Cultural Review – May 03, 2021Why Read This?
Anthropology has a long history of “face” research. How to preserve the role of “face” in the new era for effective rural governance? The author attempts to use one of the instruments of rural governance — “face” as a perspective, disputes over the practice of peasant life in a village in south central Guangxi Zhuang Autonomous Region as an entry point, exploring the social changes in the context of explaining and exploring the operation mechanism of “face” in the process of rural social governance.(Read the full text

Back to topPolitics6. Alibaba is Fined: How Does the Country Regulate a Technology Leviathan?Political Scientist – Political Scientist – April 13, 2021Why Read This?
Due to abuse of its dominant position in the of e-tailing platform services market in the People’s Republic of China by the Alibaba Group, the General Administration of Market Supervision imposed administrative penalties on them. Alibaba was ordered to stop the illegal activity, and fined 4 percent of its 2019 domestic sales in China, amounting to ¥18.228 billion. Over time, opposition to Internet monopolies has become a hot topic in society. In recent years, accompanying the advent of the fourth industrial revolution has been the strong rise of technology giants in the market, the monopoly of technology giants, and corresponding opposition to monopoly state action has become a global political phenomenon.(Read the full text

Back to topPolitics7. China’s Digital Renminbi Will Weaken the Impact of the United States Financial SanctionsDow Jones – Great Statecraft Think – April 15, 2021Why Read This?
A thousand years ago, when all money was in the form of coins, China invented paper money. Today, China is creating a digital cash system, a reimagining of its currency that could shake up United States financial hegemony. China will promote the international use of digital renminbi, and design it to be unconstrained by the global financial system. The United States dollar has been the chief architect of the global financial system since the end of World War II. China is embracing many forms of digitization, including monetary digitization. China’s launch of a legal tender digital currency is the first of its kind among the world’s major economies.(Read the full text

Back to topPolitics8. The Possibility of Another War Between China and Japan IncreasesChu Jianguo – Great Statecraft Think Tank – April 26, 2021Why Read This?
A RAND report recommended that the United States should back off or get out of the way on the Diaoyu Islands dispute. However, it was stressed that if China attacked the Japanese mainland, the United States must do its utmost to protect Japan. When some Chinese saw the report, they recognized its wisdom, but were not convinced by its emphasis on a possible war between China and Japan. In fact, this emphasis by RAND is worthy of attention. The possibility of a war between China and Japan may be greater than that between China and the United States.(Read the full text

Back to topSociety9. What Should We Be Most Concerned About Behind China’s Population of 1.4 Billion People?Huang Ziyi – Sanlian Life Weekly – May 13, 2021Why Read This?
In recent years, the issue of China’s small and aging population has attracted continuous attention. According to the authors, the census total of 1.4 billion people basically matches the number of births previously announced by the officials every year. This verifies that the actual fertility rate in the past decade is not as low as the sample survey shows, but it is still very low. After the total population reached 1.4 billion, a particular point of concern is that recent data show a significant decline in the number of births. According to this trend, China’s population will soon reach an “inflection point” of negative population growth.(Read the full text

Back to topFinance and Business10. Digital Renminbi is Coming, Will Cash Disappear?Old Stinking Ninth Finance and Business – Sanlian Life Weekly – May 13, 2021Why Read This?
Currently, the number of pilot cities for digital renminbi has been expanded from the original four regions of Shenzhen, Suzhou, Chengdu and Xiong’an New District to 10, and the number of banks participating in the test has been expanded from the original six state-owned banks to include online merchant banks (Alipay). There is no timetable for the full implementation of digital renminbi, but according to the general expectation of the industry, if everything goes smoothly, digital renminbi may be implemented nationwide after the Winter Olympics next year.(Read the full text

Back to topFinance and Business11. Behind the 300 Million People “Revenge” Travelling, Who is the Biggest Unexpected Winner?Liu Binghui – Beijing Cultural Review – May 1, 2021Why Read This?
The author believes that the development model of rural tourism does match the current consumption level and social structure of China. Based on the field research of five villages in Ningbo, Zhejiang Province, the authors restore the development paths of five villages with different conditions, and explore the regular phenomenon of China’s rural revitalization. The author points out that the transformation of several villages to tourism service industry is a major trend of continuous evolution of the leading industry and geographical space for the revitalization of villages. As China enters the post-industrial era, continuous large-scale infrastructure investment has facilitated access to remote villages, which coincides with the wave of consumer overflow from the middle class.(Read the full text

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