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The CCP’s New Control over the State Council and the People’s Congress

The Chinese Communist Party (CCP) published a “(Communist) Party and State Organization Reform Plan (党和国家机构改革方案)” on March 16. The Epoch Times commented that the essence of the Reform Plan is to “strengthen the party central committee’s centralized and unified leadership,’” to further consolidate power under the CCP and to use the CCP’s organs to oversee and manage the state functions.

Item one of the plan is to establish the CCP’s Central Finance Committee (中央金融委员会) to “study and review major policies and issues in the financial field.” The CCP will dissolve the State Council’s Financial Stability and Development Committee (国务院金融稳定发展委员会) and move its responsibilities and place them under the office of the new party committee. Item two of the plan is to create the CCP’s Central Finance Working Committee (中央金融工作委员会) so as to “unify the party’s work in the financial field.” These two items set the structure for the CCP to define financial policies and manage work directly. The State Council will establish the Bureau of Financial Supervision and Administration (国家金融监督管理总局) as an execution vehicle.

Item three is to establish the CCP’s Central Technology Committee (中央科技委员会), to let the party “provide centralized, unified leadership” over the technology field, including resolving major strategic, directional, and overall issues, defining national strategic technological tasks and significant research projects, managing national labs, and coordinating military-civilian technology fusions.

Item four is to establish the CCP’s Central Social Work Department (中央社会工作部), to oversee the party’s development work throughout the whole country and in every economic structure (in the public and private sectors) and every industry. It also “provides guidance on working on people’s complaints (信访工作).”

Item five is to establish the Office of the (CCP’s) Central Hong Kong and Macao Affairs Work (中央港澳工作办公室), which also uses the name of the State Council’s Hong Kong and Macao Affairs Office, but that state council office is no longer a separate office by itself.

Item six is to establish the National People’s Congress Representatives Work Committee (全国人大常委会代表工作委员会), which is responsible for allocating representative quotas and reviewing qualifications, directing and coordinating representative’s research work, managing representative’s proposals, and other related functions. Thus, the party is directly managing the congress representatives.

Source: Epoch Times, March 17, 2023

Chinese City Announced Stoppage of Public Transit Operations

An Internet picture showed a notice from the Public Transit Company at Mohe City, Heilongjiang Province, announcing it would stop its public transit operations due to heavy financial losses. The notice said that it had not been able to make payments on its bus purchase loans, employee salaries, and electric fees on charging poles. Usually public transit companies rely on government funding to subsidize their low fare. The financial problem showed the local government had a severe shortage of money.

After the announcement, the city government contacted the company and settled the issue. The public transit operation did not stop.

Source: Guancha, February 13, 2023

RTI: Zero-Covid Government PR Content Disappeared from Chinese Search Engine

Radio Taiwan International (RTI) recently reported that Chinese Communist Party leader Xi Jinping set the tone at the Politburo Standing Committee held recently, when he pointed out, “China has achieved a decisive victory in the three-year fight against Covid-19, creating a miracle in the history of human civilization.” During the pandemic period, the Chinese government vigorously promoted slogans such as “Insist on the unshakable Zero-Covid policy.” However, some Chinese netizens discovered that, those pictures of the slogans have mysteriously and swiftly disappeared in Baidu search results. The official celebration of the success performed in the Standing Committee meeting kept silent about the “master policy” of Zero-Covid as well. If the Communist Party has achieved a miracle in fighting the pandemic, how could this miracle be achieved without the guidance of the master policy? The fact is that, Zero-Covid caused a huge humanitarian disaster in China, because its basic means are isolation, blockade, city closure, district closure, and even province closure. People also found that, the shelter hospitals and countless Covid testing stations that played an important role in creating these “miracles” were also instantly abandoned. Baidu is China’s largest search engine and Google is banned in China. Without political intervention or orders “from above,” do tech companies like Baidu have the guts to remove the traces of government’s master policy which led to a major success? What is the reason for clearing these government promotional images from China’s domestic Internet?

Source: RTI, February 20, 2023

Workers’ Daily: Promoting Young Elderly to Continue to Work to Benefit from the “Silver-Hair Dividends”

Worker’s Daily published an article to suggest getting the young elderly to continue working. “Young elderly” (低龄老年) refers to people who retired  at a  relatively younger age than others.

It recommends extending the retirement age. Currently China’s retirement age is 60 for male cadres and employees, 55 for female cadres, and 50 for female employees. The article didn’t give a specific age to which to extend the retirement age. Some other articles mentioned to extend it  to  65 years old for males and 60 years old for females.

The article describes this retirement age delay act as a benefit for the “silver-hair dividends” (银发红利).

Source: Sina, February 20, 2023

ZhouXiaochuan: China’s Pension System Lacks Funding

Zhou Xiaochuan, a former President of the People’s Bank, (China’s Central Banker), recently said that China’s pension system does not have enough funding. Zhou made that  statement on February 25, at the Fifth Global Wealth Management Forum. Zhou said that expansion of the coverage of China’s pension system and the aging trend make the current funding insufficient. The state managed funds can only provide rudimentary coverage. The gap needs to be covered by each person’s own individual retirement account (funded by that person himself).

Zhou said China’s pension fund reserve has a few trillion yuan. One can use the pension reserve as a percentage of the GDP to compare it with other countries. Many countries have a ratio between 50 and 100 percent. But China’s ratio is only 10 percent; some even say 6 percent, and some even say only 2 to 3 percent.

Source: Sina, February 25, 2023


People’s Lives: Self-Employed Chinese Are Quitting the Social Security Program

Facing a big shortage in the government’s medical insurance system (partly due to COVID spending and partly due to corruption), many local governments have adjusted the medical insurance funds: The first adjustment was to cut the monthly payments to individual healthcare accounts for those who are company employees. The second was to cancel the monthly payment to self-employed people.

This triggered the public’s concern about the government’s changing its policy at will.

As a result, many self-employed people recently decided to quit their participation in the government’s social security program. The reasons: One, they cannot afford the monthly contribution of 1,492 yuan, while many of them have a monthly income of only three or four thousand yuan. Two, the government keeps adjusting the benefit payout plan. Some local governments extended the minimum contribution period from 15 years to 25 or 30 years, and there is a rumor that the government may defer the retirement age to 65. This means the participants will have many more years to contribute but fewer years to receive benefits. On a simple calculation without adjusting for inflation, paying 1,492 yuan per month for 20 years will end up contributing 358,000 yuan in total. If the retiree starts to receive a social security payment of 2,000 yuan per month at age 65, he needs to live to age 80 to break even, but the average age for Chinese is only 77. Thus many people may end up receiving less than what they contributed. Therefore, they would rather keep the money in their own account instead of putting it in the government’s account.

According to the National Labor Union’s statistics, in the year 2021, China had over 200 million self-employed people. Only 48.6 million, or 24 percent, participated in the social security program.

1. website, February 21, 2023
2. Radio Free Asia, February 21, 2023

Local Governments Consolidate Offices to Save Money

As local governments are running out of money, they have started to try creative ways to cut spending. One option is to shrink the government. In Loufan County, Shanxi Province, a pilot reform county in the province, announced that it will cut down the county-level Party offices from nine to six, county-level government offices from 26 to 16, and county-owned business units from 133 to 104.

In Heilongjiang province, Yichun city and Qiqihar city have started converting a Street Office (街道办事处) into a Township Office (镇). China differentiates people into urban dwellers and farmland dwellers, where the former enjoy many more benefits than the latter. Townships are usually set up for farmland residents, while the street offices are inside a city and thus their residents are urban dwellers. Therefore, local governments have decided to convert Township offices into Street offices, which will then enjoy better treatment (government spending) in the areas of education, healthcare, and culture events, etc. However, the recent actions of reverting Street Offices back to Townships indicates that local governments are low on population and therefore are consequently losing revenue (budget). For example, Yichun City lost 270,000 people between the 2010 census and the 2020 census.

1. Sohu, February 3, 2023
2. Sina, February 10, 2023

Public Opinion: How Can a County Executive’s Family Pay a 10M Yuan Ransom?

Some hot news spread on the Internet on February 10. It was about the ransom of a former county Communist Party Secretary (the highest-ranked official in the county). Huang Dongming,the  former Teng County Party Secretary of the Guangxi Zhuang Autonomous Region, was kidnapped. The kidnappers asked for 30 million yuan (US$4.31 million) in ransom. Huang’s family paid 10 million yuan, but the kidnappers refused to release Huang. Then the family reported the kidnapping to the police who were able to rescue the hostage.

The public focus was on how Huang’s family could afford to pay 10 million yuan. Teng county is a very poor county in China and, on the surface, the officials’ salary is not high at all. Many commentators took it as indication that, in the past, Huang had collected a large amount of illegal money.

Also, several Chinese media reported on February 7 that Zhang Enliang, the former Hegang City Party Secretary in Heilongjiang Province, was accused of taking a bribe of 73 million yuan.

Official corruption is a severe problem in China that the authorities are unable to fix.

Source: Radio Free Asia, February 10, 2023