East Asian Policy

At the 18th National Party Congress, the fourth generation leadership under Hu Jintao transferred its power to the fifth generation leadership under Xi Jinping. The Congress elected a central committee of 376 members and a central disciplinary commission of 130 members. Hu Jintao also retired from the Central Military Commission (CMC). In his inaugural speech, Xi Jinping emphasised his commitment to rejuvenating the Chinese nation and made anti-corruption one of his highest priorities.

The 18th Central Military Commission (CMC) is a balanced team of high professional quality. Yet it is a transitional team because the top soldier and two other members can only serve for one term, if not shorter. This new CMC is also capable of commanding the PLA effectively. Xi can rely on this new team for power consolidation and employment at an earlier date. The PLA has firmly supported Xi's political leadership style, either for his domestic reforms or external initiatives. The Xi era has commenced smoothly.

Has Chinese elite politics attained a level of institutionalisation that long-term stability can be expected? This article explains the six-phased cadre performance evaluation system widely adopted at local power succession process and analyses the ways in which this system was selectively used in the making of the 18th Party Central Committee. Despite the various loopholes, the system does impose some constraints on arbitrary power; its wide adoption at the lower levels and the flatter power distribution enhance its legitimacy and promotes its institutionalisation.

The Chinese government has expanded efforts to maintain regime stability with a recently developed strategy of “social management.” It is a modification of the existing “maintaining stability” system which has turned out to be incompetent and socioeconomically costly. This new strategy attempts to manage growing civil society with provision of social services, more flexible control of various social sectors and new policy of social organisations.

Chinese official extravagance on vehicles, banquets and overseas trips at public expense (“three public expenses”) has been censured by taxpayers as China's fiscal revenue more than quadrupled over the past decade. China's long history of political ranking distinguished by lavish spending on receptions and luxurious official vehicles is an embedded factor behind the “three expenses”. The strong government consumption accounts for the surge in the sale of luxurious products while cheaper commodities suffer.

Ninety-five per cent (or 1.2 billion) of China's population is covered by social health insurance. In 2011, various social insurance plans took up 25% of total health expenditure. Issues to be addressed for social health insurance include shallow financial coverage, high surpluses, opportunistic behaviours and an underdeveloped private insurance sector. The incentive of social insurers is the key to understanding these issues and for future policy implementation

China's college graduates are suffering from various types of underemployment, especially manifested in a mismatch between their qualifications and expectations and the actual jobs they are in. This is the result of a shortfall in university education and structural problems in the economy. A socioeconomic conundrum, the problem of educated underemployment will require reforms in both higher education and the economic structure.

Democratisation and highly competitive electoral politics in the past two decades have driven Taiwan's social welfare system to expand rapidly. Its universal national health insurance scheme is the most favoured social policy in Taiwan and the occupation-based pension programmes generally provide high income replacement rates. The expanded social welfare system has also generated an increasingly positive redistributive effect on income equality in Taiwan. However, financial sustainability is its largest challenge.

It has been generally expected that the Chief Executive of the Hong Kong Special Administrative Region has to be someone trusted by the Chinese leadership and accepted by the local business community. The latter was initially based on the Chinese authorities' Hong Kong policy during the Sino-British negotiations on the territory's future and in the transition period before 1997 when they had to retain investors' confidence in order to maintain Hong Kong's stability and prosperity.

Many scholars have argued that Japanese involvement in free trade agreements (FTA) with the Association of Southeast Asian Nations (ASEAN) is part of a regional competition with China over leadership in East Asia. However, this paper redefines the vigorous Japanese pursuit of FTA policies with ASEAN as an essential agenda to serve various economic and political domestic interests of Japan.

The Diaoyu Islands issue had again stirred up diplomatic rows between China and Japan and has further cast a shadow over structural issues like US-Japan alliance and China's foreign and security policies. The 2012 rows were caused by Japan's nationalisation of the islands. Ensuing miscalculation further exacerbated the dispute which has entered a new stage that requires new perceptions, efficient measures and firmer political wills for conflict management and peaceful resolution.