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plenumteam
In Personnel Tracker, Public

Personnel reshuffling continues in Guangdong

News: Former Shantou Party Secretary Fang Lixu (方利旭) was appointed head of China Council for the Promotion of International Trade (CCPIT) Guangdong Committee (广东贸促会) today, replacing Lin Tao (林涛), who was promoted to Heyuan Mayor. Fang’s successor is Ma Wentian (马文田), former Guangzhou Vice Mayor. Quick Take: As we observed, there has been a notable wave of personnel reshuffling in the Teoswa region in Guangdong recently, following the latest ones on 8 May. CCPIT is a provincial foreign trade promotion organization, with main responsibilities to promote Guangdong’s cross-border economic cooperation and further the internationalization of local businesses. CCPIT has previously played an important role particularly with trade and matters concerning HK and Macau. More importantly, Fang is the first departmental-level ranked official to be appointed to the post—his predecessor Lin Tao was only ranked vice departmental-level as Shanwei CCPSC member and Propaganda Department Chairman before being transferred to CCPIT. This means that CCPIT is going to play a bigger role in the region, most likely to better assist the rapid development of the GBA.

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In Personnel Tracker

Former Yunnan Party Secretary Qin Guangrong (秦光荣) surrendered himself to the Central Commission for Discipline Inspection (CCDI)

Qin is the eighth provincial party secretary ousted since the beginning of Xi’s anti-corruption campaign, and the second Yunnan Party Secretary ousted. Qin’s predecessor as Yunnan Party Secretary, Bai Enpei (白恩培), was ousted on 29 August 2014 and was sentenced for death penalty with two-year reprieve. When the sentence was automatically reduced at the end of the two-year term, Bai was sentenced to life imprisonment without commutation or parole. Qin’s voluntary surrender to CCDI is a result of the investigation of CCDI against his son Qin Ling (秦岭) that was launched weeks ago. Qin Ling was a senior manager of China Huarong Asset Management Co. Ltd., where former Board Chairman Lai Xiaomin (赖小民) is being prosecuted for accepting bribes, corruption, and bigamy. Under Lai, Qin Ling served as Board Chairman of Huarong Investment Stock Co. Ltd. (02277.HK), a Hong Kong-listed subsidiary of Huarong Asset Management. According to two sources in Beijing, Qin Ling leveraged his father’s connection to help arrange meetings between already-ousted Politburo member and Chongqing Party Secretary Sun Zhengcai (孙政才) and Lai Xiaomin, who aspired to utilize his SOE experience and take senior government/party positions before being ousted. Xi has been very sensitive to local leaders colluding with each other—especially as Chongqing and Yunnan are neighboring provinces—any collusion by local leaders would potentially pose threat to regime stability and central government’s firm grasp of local politics. Other than Qin and Bai, ousted provincial party secretaries include aforementioned former Chongqing Party Secretary Sun Zhengcai, former Hebei Party Secretary Zhou Benshun (周本顺), former Liaoning Party Secretary Wang Min (王珉), former Tianjin Party Secretary Huang Xingguo (黄兴国), former Gansu Party Secretary Wang Sanyun (王三运), and former Shaanxi Party Secretary Zhao Zhengyong (赵正永). In Yunnan, five other vice-provincial officials have been ousted since the beginning of Xi’s anti-corruption campaign, including former Yunnan Vice Party Secretary Qiu He (仇和), former Yunnan CCPSC member and Kunming Party Secretary (张田欣), former Yunnan CCPSC member and CCP Committee Secretary-General Cao Jianfang (曹建方), former Yunnan CCPSC member and Political and Legal Affairs Commission Chairman Meng Sutie (孟苏铁), and former Yunnan Vice Governor Shen Peiping (沈培平)—all of whom had worked under both Bai and Qin, who were Yunnan Party Secretary from 2001 to 2011 and from 2011 to 2014, respectively. Even before Qin’s ouster, Yunnan was one of the provinces where corruption was most prevalent—Qiu He was Zhang Tianxin’s predecessor as Kunming Party Secretary before being promoted to become Yunnan Vice Party Secretary, while Zhang’s successor as Kunming Party Secretary Gao Jinsong (高劲松) was also ousted, right after his Kunming Party Secretary appointment when Yunnan CCPSC didn’t even have the chance to appoint Gao into the provincial CCPSC. This pattern, where a number of officials consecutively taking the same position were all found corrupt, is distinctive especially in Yunnan, which means the corruption networks were stronger and more interconnected than those of other provinces. With Qin’s latest ouster, we expect that he will give up more names of his corrupt subordinates during the investigation in exchange for shorter sentence, especially if he himself did not take much bribe other than helping his banker son politically. This means that more disruption should be expected in local officialdom of Yunnan, which is still recovering from massive ousters caused by the investigation of Bai Enpei and Qiu He, former no.1 and no.3 of the province. Notably, Qin was a senior leader of Communist Youth League (CYL) in Hunan in the early stage of his career, and was very well-liked by Ling Jihua (令计划) and Li Yuanchao (李源潮), chief of staff and HR manager to Hu Jintao, respectively. The ouster of Qin Guangrong also increases the chance of ouster of former Jiangsu Party Secretary Luo Zhijun (罗志军), who was Li Yuanchao’s close associate in Jiangsu and another senior figure of CYL.

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plenumteam
In Personnel Tracker, Public

Former Yunnan party secretary surrendered to CCDI…

News: Former Yunnan Party Secretary Qin Guangrong (秦光荣) turned himself in today to CCDI for committing serious violations of party discipline and law. Quick Take: Qin is the second Party Secretary to be taken down in Yunnan—Qin’s predecessor Bai Enpei (白恩培) was ousted in August 2011 for committing millions of bribes and charged of suspended death sentence, the harshest penalty ever given to a senior official since the whole anti-corruption campaign. Moreover interestingly, Qin Guangrong’s son Qin Ling (秦岭), former executive director of Huarong Asset Management Co., (华融资产管理股份有限公司), had also been under investigation previously, as one of the continuous disruptions in the company after its then-board chairman Lai Xiaomin was ousted in October 2018. Qin Guangrong’s surrender is very likely related to his son’s wrong doings. In any case, we expect more disruptions to follow shortly in Yunnan.

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In Public

High-profile national conference held on public security

News: A national conference on public security was held in Beijing on 7 and 8 May. The conference was attended by a number of senior officials including Chinese president Xi Jinping, PBSC member and Vice Premier Han Zheng, and PBSC member and Central Committee Secretariat Wang Huning. In his keynote speech, Xi stressed the importance of police loyalty and competence, and the need to reform through technology. Last but not least, Xi also pointed out the “zero-tolerance” to any violations of party discipline within the police force. Quick Take: It’s been 16 years since last such conference on public security was held, under the lead of then-president Hu jintao in 2003. The implication is two-fold—firstly, it was Xi’s first appearance at such high-profile conference centered on public security. The department has previously been relatively sidelined from core political dynamic; however, as the former Public Security Vice Minister Meng Hongwei (孟宏伟) was taken down for corruption and political wrongdoings in October 2018, it has then gained much attention and became a key target of CCDI’s antigraft investigation in 2019. There have recently been countless disruptions within the department and multiple departmental and county-level officials taken down nationwide. Secondly, loyalty to the party and to Xi personally becomes an increasingly important factor in officialdom, not just in public security but also in all government organs.

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In Public

Personnel changes in Guangdong’s three Teoswa prefectural-level cities

News: Three of Guangdong’s prefectural-level cities have their new Party Secretaries reshuffled today. Ma Wentian (马文田) was appointed Shantou Party Secretary, Li Yalin (李雅林) was appointed Chaozhou Party Secretary, and Ye Niuping (叶牛平) was appointed Jieyang Party Secretary. Notably, all Shantou, Chaozhou and Jieyang are identified as Teoswa region, located in the east of the province and distinguished by its dialect. Quick Take: Guangdong has always been a region with vast factional network, mainly characterized by its dialects. Local officials identified with different factions have thus been highly divided into different gangs, which was indeed the root cause of the province’s entangling corruptional network that has been troubling Xi over the years. The situation only started to change since 2012 when CCP started transferring officials from outside to the province, a major remedy to break down the regional gangs. However, such personnel reshuffling has indeed only remained on the provincial level—due to regional particularities in different localities, the major posts in prefectural-level cities are mostly taken by locals. Interestingly, even though all three newly appointed officials today have previously served in the province, none of them are Guangdong local—Ma is from Henan, Li from Shandong, and Ye from Anhui. As the province turns into an increasingly significant region both economically and technologically, the antigraft campaign comes along strong too. Such trend to transfer non-local officials to cities with clear factional identification is likely to continue within the province.

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In Public

New CCDI personnel appointment in MFA

News: Former Chief Inspector of Central Commission of Discipline Inspection (CCDI) at Foreign Affairs Office Zhang Ji (张骥) was transferred to become Chief Inspector of CCDI at Ministry of Foreign Affairs (MFA) today. Quick Take: Zhang is to replace Xie Hangsheng (谢杭生), who has been working in CCDI system at MFA for more than seven years. Now aged 64, one year over the stated age limit, Xie will now officially enter retirement. Including Zhang’s appointment today, there have been a continuous wave of personnel reshuffling in MFA since the beginning of this year, including Assistant Minister Liu Xianfa (刘显法) and Party Secretary Qi Yu (齐玉). Apart from this, we have also observed a notable crossover between commerce and foreign affairs in the background of many recently transferred officials—for example, Zhang Ji spent most of his career in Ministry of Foreign Trade and Economic Cooperation and Ministry of Commerce before serving for CCDI; moreover, Liu Xianfa has previously worked for SINOPEC and NDRC before entering Foreign Affairs. Last but not least, recently appointed Ministry of Commerce Vice Party Secretary Yu Jianhua (俞建华) has also taken several posts in foreign affairs such as China’s permanent representative to the UN office in Geneva. This emerging trend suggests that officials’ previous work experience in these two fields is now being increasingly valued for promotion.

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plenumteam
In Personnel Tracker

Massive personnel reshuffle occurred in Guangdong

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.

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In Public

New regulation released on government investment

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.

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In Personnel Tracker

CCDI changes its top liaison to Ministry of Foreign Affairs (MFA)

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.

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In Public

Local governments urged to accelerate issuing local bonds

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.

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