In the beginning of May, Guangdong province launched a new round of massive personnel reshuffle on prefectural level—the first of its kind since the announcement of the Greater Bay Area (GBA) Plan. On 10 May 2019, former Guangdong Council for the Promotion of International Trade (CPIT) Chairman Lin Tao (林涛)was appointed Heyuan Mayor, succeeding the outgoing Ye Meifen (叶梅芬) who is not being appointed to another post. On 10 May 2019, former Shantou Party Secretary Fang Lixu (方利旭)was appointed Guangdong CPIT Chairman, succeeding aforementioned Lin Tao. On 7 May 2019, former Guangzhou Vice Mayor Ma Wentian (马文田)was appointed Shantou Party Secretary, succeeding aforementioned Fang Lixu. On 7 May 2019, former Guangdong Government Vice Secretary-General Li Yalin (李雅林)was appointed Chaozhou Party Secretary, succeeding outgoing Liu Xiaotao (刘小涛) whose new appointment is to be announced. On 7 May 2019, former Jieyang Mayor Ye Niuping (叶牛平)was appointed Jieyang Party Secretary, succeeding outgoing Li Shuihua (李水华) whose new appointment is to be announced. On 10 May 2019, former Guangdong Ethnic Affairs Commission Chairwoman Yuan Gujie(袁古洁) was appointed Maoming Mayor. Ye Meifen’s departure is likely due to her potential wrongdoings. Born in 1968, Ye was only two years into her job as Heyuan Mayor and way before the retirement age limit set for mayors. The appointment of Fang Lixu to Guangdong CPIT Chairman position is a clear signal that Guangdong CPIT’s political status is being elevated—Fang was a prefectural party secretary before joining Guangdong CPIT, while his predecessor as Guangdong CPIT Chairman Lin Tao joined Guangdong CPIT as Shanwei CCPSC member and Executive Vice Mayor, a vice-prefectural position. However, two sources have told us that Fang’s appointment to Guangdong CPIT was more than an elevation of Guangdong CPIT status—Fang Lixu is of Teoswa origin and Shantou was a Teoswa stronghold—his move fits the pattern as Guangdong provincial leadership seeks to break down Guangdong’s local factions. In contrast, Fang’s successor as Shantou Party Secretary Ma Wentian is a non-native official known for alienating himself from Guangdong’s corrupt factions. Similarly, non-native official Li Yalin is replacing Hakka official Liu Xiaotao as Party Secretary of Chaozhou, a Teoswa stronghold; non-native official Ye Liuping is replacing Hakka official Li Shuihua as Party Secretary of Jieyang, another Teoswa prefecture. The appointments are clearly coordinated moves to weaken the power of local Teoswa and Hakka officials. A Hunan native, Zhang Jianfei was initially promoted onto vice-provincial level in November 2013 as Hunan Vice Governor, and then took concurrent appointment as Hunan SASAC Party Secretary, a position that only has full-departmental ranking, in July 2017. Zhang was promoted into Hunan CCPSC in December 2017, and gave up his vice governorship one month later in January 2018, only keeping the Hunan SASAC Party Secretary position. In such way, Zhang is the only provincial CCPSC member nationwide that takes the concurrent appointment as provincial SASAC Party Secretary. It is possible that the leadership of Hunan really valued SASAC work, but it is still highly unprecedented to have a provincial CCPSC member supervising SASAC. Now that Zhang has taken the position of Hunan CCP Committee Secretary-General, we expect him to give up the Hunan SASAC Party Secretary position in the very near future.
News: China’s State Council released a new regulation on government investment on 5 May. It draws out a clear-cut investment scope, and specifies that for any investment plan to get approved, it must align with national economic and social development goals. Moreover, budgetary constraints are also hardened on government investment funds, which are now prohibited from being raised through illegal borrowing. The new regulation will come into effect on 1 July 2019. Quick Take: This is yet another effort to tackle down China’s rampant borrowing and risky lending practices, as well as the country’s alarming local debt issue over the years. The enormous amount of off-balance-sheet local debt, mostly originated from local governments’ unsafe financial operations and reckless investments to hit GDP targets in previous years, has become a grave concern especially amid the economic slowdown. Struggling to maintain stability in the economy while fendig off such potential threats, the central government is now toughening up its hold in financial activities. Following the regulation, investments will now be mostly directed to public sectors including infrastructure facilities, agricultural sectors, social services, and environmental protections etc.
On 6 May 2019, CCDI’s top liaison in MFA, Xie Hangsheng (谢杭生), was replaced by Zhang Ji (张骥). In recent months, Xi has been systematically bringing in officials from outside the diplomat circle to MFA, in what we believe is an effort to clean house in the ministry, the least-touched government entity in Xi’s anti-corruption campaign. On 29 January 2019, former Deputy Head of CCP Central Organization Department Qi Yu (齐玉) was appointed Party Secretary of MFA, replacing the outgoing Zhang Yesui (张业遂), former Chinese Ambassador to the US who has reached age of retirement. Qi has become the first MFA party secretary without any prior exposure to foreign affairs. His predecessors were all career diplomats. MFA has been an isolated “kingdom” in Xi’s anti-corruption campaign primarily because most of the employees of the ministry, namely the diplomats, have been stationed abroad in embassies and consulates, making it extremely hard for CCDI to discipline or investigate. The position of CCDI’s top liaison in MFA had been mostly taken by diplomats—the retiring Xie Hangsheng was China’s ambassador to Bulgaria from 2002 to 2005 and to Denmark from 2005 to 2011, before being appointed CCDI’s top liaison in MFA. As such, Xie is more closely identified as a diplomat rather than as a CCDI inspector. His replacement, Zhang Ji, was handpicked by former CCDI Chairman Wang Qishan (王岐山) as CCDI’s top liaison to the Office of Central Foreign Affairs Commission, CCP’s top foreign policymaking body directly reporting to the Politburo and the Politburo Standing Committee (PBSC). The Office is currently headed by Politburo member Yang Jiechi (杨洁篪). Before joining CCDI, Zhang worked for decades in Ministry of Commerce (MOFCOM). The appointment of Zhang Ji as CCDI’s top liaison in MFA, following the appointment of Qi Yu as MFA Party Secretary, reinforces our view that Xi’s CCDI will finally touch on MFA.
News: According to the latest announcement from the Ministry of Finance, local governments are asked to accelerate the process of issuing local bonds, and should “scientifically” determine the maturity structure of the bonds. The issuance of all new bonds, which are worth of CNY 3.08 trillion, is expected to complete by September 2019. Quick Take: As China seeks to bolster market growth this year amid economic downturn, great pressure has fallen onto local governments on selling more debt to aid local development, particularly on the financing for infrastructure and constructions. However, considering that many local governments has been facing huge amount of invisible debt which poses tremendous threat of default, such requirement from the central government indeed seems difficult to achieve. The biggest question remains whether the region’s fiscal revenue is able to catch up with its increasing debt; if not, the sustainability of economy would be of serious concern. Now how regional governments would maneuver to accomplish the requirements by September without curbing its balance sheet remains to be seen.
News: Former Inner Mongolia People’s Congress Standing Committee (PCSC) Vice Chairman Xing Yun (邢云) was expelled from CCP for serious violation of party discipline and law. Quick Take: An Inner Mongolia local, Xing had spent his entire career in the province, and had served as Political and Legal Commission Chairman for five years before stepping down to PCSC Vice Chairman in 2012, as he approached retirement age. Xing was indeed under investigation last October, and his ouster is followed by several others in the region’s public security sector, including former Inner Mongolia Public Security Deputy Director Meng Jianwei (孟建伟). Due to such collapsing corruption, CCP has determined to deeply clean up the region’s public security sector, and Inner Mongolia is now one of the only three out of all 31 provinces where its Vice Party Secretary concurrently serves as the Political and Legal Commission Chairman.
News: Former Guangdong CCPSC member and United Front Work Department Chairman Zeng Zhiquan (曾志权) stood trial for corruption and bribery today. Zeng was charged for illegally accepting money and goods worth over CNY 140 million during his term in Guangdong between 2004 and 2017. Quick Take: Zeng had previously been working in Guangdong Department of Finance for 34 years since 1986, and worked all the way up to departmental-level ranking when becoming its director in 2010. He was further promoted to provincial CCPSC in May 2017, and became United Front Work Department Chairman in April 2018. Known as a province filled with factional gangs, Guangdong has been deeply troubled with massive corruption network directed by local officials and past principal leaders. In fact, originally from Wuhua, Zeng is identified as a Hakka (客家) official. Some previously ousted tigers including Wan Qingliang (万庆良) and Liu Zhigeng (刘志庚), who both shared several years of office with Zeng in the provincial government, were also Hakka officials. Now that Xi’s been pledged to clean up all local mafia in the province with anti-graft investigations, Zeng’s ouster indeed implies a diminishing influence of Hakka as well as factional networks in Guangdong. New Shanxi vice governor appointed… News: Shanxi CCPSC member and Party Secretary-General Hu Yuting (胡玉亭) is appointed Shanxi Vice Governor today. Quick Take: Hu’s appointment today fills up the vacancy left by Lin Wu (林武), who got promoted to Shanxi Vice Party Secretary in December 2018. Ever since its notorious coal-mining collapsing corruption in 2013 that has taken down more than 330 officials, Shanxi has been undergoing an overwhelming wave of anti-graft investigations and a turbulent series of government restructuring. In fact, this is the third personnel adjustment in its CCPSC this year, and Hu is now one of the only three Shanxi local officials among the current 12 CCPSC members. Moreover, apart from political alert, the province’s free-falling economy in the recent decade also puts it under massive pressure to improve the economy. The province’s performance will be key to watch this year. Sichuan vice governor ousted… News: Sichuan Vice Governor Peng Yuxing (彭宇行) is currently under investigation today for serious violation of party discipline and law. Quick Take: Peng is an academic-turned official—notably, he received his PhD and post-doc degree in France specializing in polymers and materials, and then worked for Chinese Academy of Sciences from 1993 to 2009. Peng entered active politics in 2015 as Party Secretary of Mianyang, a city known as a technology and defense industry hub. He was further promoted to Sichuan Vice Governor in September 2017, mainly in charge of defense-related industrial and technological development and civilian-military integration. Peng’s ouster appears quite unexpected, as defense technocrats are now highly valued by CCP and likely to obtain good political fortune. Newly appointed Hubei CCPSC member destination confirmed… News: Luo Yonggang (罗永纲), former Inner Mongolia Political and Legal Affairs Commission Chairman and Secretary-General who was appointed Hubei CCPSC last Friday, has been confirmed to take the post of Hubei Political and Legal Affairs Commission Chairman. Quick Take: As analyzed in our last Friday’s edition, Luo now fills up the vacancy left by Wang Xiangxi (王祥喜) who was transferred to a Chairman post in SOE earlier in March. He has previously served six months of Political and Legal Affairs Commission Chairman in Inner Mongolia from October 2018 until April 2019. Moreover, Luo’s appointment also completes the province’s CCPSC, in which five out of 13 were appointed from outside of the province.
News: Former Inner Mongolia Political and Legal Affairs Commission Chairman and Secretary-General Luo Yonggang (罗永纲) was appointed Hubei CCPSC today. Quick Take: Originally from Shanxi, Luo has indeed based his entire political career in Inner Mongolia since 1986. He was appointed Inner Mongolia CCPSC and Secretary-General in 2016, and took on the post of Political and Legal Affairs Commission Chairman in October 2018. In 4 April 2019 he was replaced by Lin Shaochun (林少春), the newly appointed Inner Mongolia Vice Party Secretary in March who was then concurrently appointed head of Political and Legal Affairs Commission. Luo’s specific post in Hubei CCPSC remains to be seen, but will most likely fill up the vacancy of the province’s head of Political and Legal Affairs Commission. It was left by Wang Xiangxi (王祥喜), who departed in March to become Chairman of China Energy Investment Co., a central SOE and China’s largest power company.