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Politics and Policy

The Outbreak Will Reshape Governance in China

Beijing decided to postpone the annual meeting of the National People’s Congress (NPC) this afternoon due to the outbreak. We hold the view that it is likely to be held in late March with about two weeks delay, and there is a small chance that it will be delayed into April (See: Expect More Delays to Restoring Business). The healthcare system would certainly be a top priority for discussion at this year’s NPC annual meeting.

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How China Became More Centralized

Xi has achieved a more effective central leadership and a clear-cut decision-making process. Ambitious policy initiatives such as financial de-risking and cutting industrial capacities were carried out forcefully and rapidly. But at the same time, as local officials become wary of potential wrongdoings, the centralization process has also caused inertia across local governments, resulting in potential risks in policy implementation.

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Top 10 Political Scandals of 2019

As the new year is just around the corner, we decided to present something a little bit light in today’s note – China’s top 10 political scandals of 2019. While not all of them are market movers, these cases do demonstrate the scope, depth, and implications of Beijing’s anti-corruption campaign, which shapes policy outcomes at both local and central levels.

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Provincial Leadership Reshuffle Begins

The new pattern makes provincial vice party secretary position much more important for officials seeking top provincial jobs, and an important bellwether to identify emerging, future leaders. It also means that when officials were appointed provincial vice party secretaries or governors, they were already expected to become governors and eventually provincial party secretaries.

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Rocket Scientists Off the Ground

Traditional political factions, which used to be important in understanding China’s political dynamics, have been weakened by the anti-corruption campaign and lost their prominence, and other groups are on the rise. Among them, a couple groups of technocrats stand out. They are the rocket scientists and bankers. Some of them are expected to join the 25-people Politburo in the upcoming party congress and become the country’s most powerful leaders.

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