East Asian Policy

Xi Jinping has become a controversial figure as to the direction he is taking China. The effort to "canonise" Xi to the "core" leadership had unnerved many. Xi’s effort to upgrade himself to "core" status symbolises his quest for personal power on top of the institutional power he has already amassed. It is indicative of a crisis of governance resulting from a demoralised cadre corps and an intensified power struggle within the regime.

With recent reshuffles at the provincial level, Chinese President Xi Jinping has been consolidating power in preparation for the 19th Party Congress in 2017. Since early 2016, more than 40 political stars have been promoted or transferred to new provincial posts. Only the party chiefs and governors of Beijing, Shanghai, Chongqing, Guangdong and Tibet have retained their positions since 2013. Substantial changes to the leadership in these regions are expected before the 19th Party Congress.

Restructuring has empowered Xi to control the People’s Liberation Army by dismantling general departments and requiring new Central Military Commission agencies to report to him directly; by separating monitoring agencies from performing agencies to enhance "checks and oversight"; and by dividing powers for "construction" and for "operations" between services and theatres. Restructuring has also divested regional headquarters of responsibility of running army units. This enables theatres to become genuinely multi-service, laying the basis for joint operations.

China’s rule of law took an ugly turn in less than a year after the legal reform was announced. The country detained lawyers on 9 July 2015. The Chinese Communist Party seems to have inherited the "Rule of Man" from the past and acts like an "organisational emperor". While it took the West a few centuries to build its system of rule of law, it will take China even longer to do so.

Supply-side structural reform has been a catchphrase in China since 2015 in official media. While there is a lack of details, the government seems to have placed hope on formulating policies to address both short-term problems, such as production overcapacity, and long-term issues like cultivating growth engines for sustainable development. Although the importance of structural reforms has been stressed, formulating coherent and effective policies remains tricky. The outcome remains to be seen.

Innovation-driven development is the hallmark strategy of the Xi Jinping leadership. At the National Conference on Science and Technology in May 2016, Xi announced a three-step road map for China’s innovation-driven development. The first is to build China into an innovative nation by 2020; the second is to move China to the forefront of innovative countries by 2030; and the third is to make China an innovation power by 2050.

In 2014, China’s total government debt was an estimated 60% of gross domestic product (GDP), close to the upper limit set by the European Union. The Xi administration has set budget deficit at 3% of GDP for 2016 and announced that government budget revenue will grow only 3.2% in 2016! It has also recently abolished local government financing vehicles, legalised local government bond issuing in 2014 and started "the debt swap" reform.

The "13th Five-Year Outline Plan" (2016-2020) has poverty alleviation as one of the major tasks for the Chinese government. Two sets of policies have been underlined: poverty alleviation (jinzhun fupin) plan to improve the targeting accuracy of these programmes and policies to focus on adjacent regions with disadvantaged natural and economic conditions. However, the efficacy of these programmes has been saddled with issues including low government capacity and the difficulties to mobilise the private sector.

Since 2009, Alibaba has aggressively built its media landscape by buying up media assets and integrating old and new media. Alibaba’s founder Jack Ma has reportedly maintained good relations with the Chinese government, a win-win situation that is beneficial to the development of China’s big data technology and internet/e-commerce sector. In 2016, China for the first time became the world’s biggest "acquiring nation" in the technology industry.

Japan has brought peacebuilding into the centre of its foreign and security policy since 2002. As it has widened the regional and international role of peacebuilding in Asia and beyond, Japan has also considered human resource development for fostering civilian peacebuilders as an important way of contributing to peace and stability in Asia even though Prime Minister Abe Shinzo’s security laws in 2015 had generated heated debated among scholars and the public.