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The Daily Brief for Friday, 20 October 2017

Beijing party congress: Cheng Li, one of the world’s top authorities on China’s leadership, believes that President Xi Jinping may formally tap Hu Chunhua, 54, the party secretary of Guangdong, as his successor, Doug Tsuruoka writes. The director of the John L Thornton China Center at Washington’s Brookings Institution also believes that Wang Qishan, Xi’s 69-year-old anti-corruption tsar, will step down, honoring “the norm” for the party’s retirement age limit of 68, which he has already passed. The main task of the week-long 19th Party Congress is to select the members of the ruling Chinese Communist Party’s Politburo Standing Committee as Xi embarks on his second five-year term as China’s leader. This, in turn, will set the pace for the country’s economic, political, cultural, military and other reform efforts. Xi proclaimed a “new era” in China’s development as the pivotal meeting kicked off on Wednesday.
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China corporate debt: Give a Western investor a word-association test with the word “China,” and the response will be “debt bubble,” David P Goldman writes. Corporate debt levels in China, to be sure, look huge by international comparison. But a detailed look at the country’s corporate debt shows that infrastructure spending rather than speculation explains most of the debt growth of the past ten years. Manufacturing, healthcare, and other major corporate sectors actually show declining leverage. The bulk of corporate debt has built up in energy, power production, rail, and airlines – sectors that in many other countries would be funded directly via the state budget. China’s industrial profits are up by 24%, balance sheets are improving and much of corporate debt should be viewed as “public works” by the government. Overall, debt is in a good place to be supported by the economy.
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Global inflation fears: Japan’s election on Sunday probably isn’t foremost in Janet Yellen’s mind, William Pesek writes. But the headwinds holding back Asia’s No. 2 economy offer insights into why inflation isn’t the urgent problem the Federal Reserve chair fears. Yellen leads the globe among monetary bigwigs bracing for accelerating consumer prices. Last weekend, she said her “best guess” is that inflation will perk up soon, but her worries are overdone. To understand why, consider the Bank of Japan’s plight dating back more than a decade. By March 2006, then-governor Toshihiko Fukui was comfortable enough with growth trends to scrap the BOJ’s five-year-old quantitative-easing program. Four months later, he hiked short-term rates by 0.25%. Another tightening in February 2007 put borrowing costs at 0.50%. With remarkable speed, pricing power among companies weakened and any hints of accelerating growth vanished.
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Philippines counterinsurgency campaign: Shortly after the Southeast Asian country’s military killed the reputed top brass of Islamic State (IS)-affiliated militants this week, President Rodrigo Duterte declared: “I hereby declare Marawi city liberated from the terrorist influence.” Almost five months into the siege of Marawi, security officials this week verified the death of Isnilon Hapilon, the designated “emir” of the IS movement in Southeast Asia, and Omar Maute, the top military commander of the IS-linked Maute Group in the Philippines, Richard Javad Heydarian writes. Omar’s brother, Abdullah, was killed in September, decapitating the eponymous group’s twin leadership. Intermittent firefights have continued across the city, with several foreign fighters still holding hostages and refusing to surrender to the authorities. Officials are now cautiously assessing the situation on the ground before giving the green light for the return of hundreds of thousands of displaced Marawi residents.
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New Zealand politics: The country’s change of government is another nail in the coffin of the TPP-11 revival and sets new boundaries for multilateral trade in the Asia-Pacific region, Giovanni Di Lieto writes. The previous conservative government was firmly set alongside Japan and Australia in trying to revive the so-called TPP-11, hoping to keep the door open for the US at a later time by not changing the terms negotiated in the Trans-Pacific Partnership agreement before Washington’s notorious withdrawal. The leader of the moderately populist New Zealand First political party, Winston Peters, has announced that he will back the Labour-Green bloc to form a coalition government, making the Labour Party’s leader, Jacinda Ardern, the country’s youngest-ever prime minister. Ardern, 37, is replacing incumbent National Party PM Bill English thanks to an exhilarating campaign run on a platform of political rejuvenation after nearly a decade of conservative rule.
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Asia Times app: Asia Times has launched an app for both iOS- and Android-based devices that delivers the publication’s regular daily news, commentary, blogs and live coverage while also bringing readers added functionality. As we report here, the app, launched on July 25, includes content notification, share and save functions and is free to download from both the Apple Store and Google Play

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Posted inChinaShanghai

China Digest for Friday, 20 October 2017

China’s banking industry faces tighter rules

China will continue to tighten regulations on the banking and finance industry, as well as strengthen risk control folllowing the 19th Communist Party Congress, said Guo Shuqing, head of the China Banking Regulatory Commission, reported by China Securities Journal.

PBOC promotes ‘double pillar’ regulatory framework

The People’s Bank of China has been exploring the “double pillar” regulatory framework, according to Zhou Xiaochuan, head of PBOC, the 21st Century Business Herald reported.

Problematic officials the focus of anti-corruption drive

Following the 19th Communist Party Congress, the Central Commission for Discipline Inspection (CCDI) will continue to focus on problematic officials who are in important positions and likely to be promoted, said Yang Xiaodu, the deputy party secretary of CCDI, reported by 21st Century Business Herald.

Shanghai to establish technology and innovation centre

Shanghai will build up the basic framework for a technology and innovation center by 2020 and establish the core function by 2030, said Ying Yong, the mayor of the city, Yicai.com reported.

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