The Banking and Strategy Initiative

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China wins again! A new regime creeps in

China’s change of guard due this year with changes at all provinces and state run authorities already in motion, changes are expected to go beyond changes in person under the new leadership. Taiwan also goes to election next month but that election is unrelated to the fortunes o f China determined by this fall’s changes in leadership

A super ministry for Power

The various energy regulators in China for Thermal, Nuclear and probably regional councils ( speculating here!) will come under the governance of a new council, headed by a new super ministry taking charge in the government ahead of changes at Premier and President with and Xi Jinping and Li Kequiang likely to be selected as leaders of the Politburo standing committee.

A Younger generation takes hold of polity

After the so called Fourth Generation took power in the 2002 changes in leadership which brought in Hu Jintao, the entire older generation of china’s politicians is well and truly replaced in the new provincial councils and leadership of state enterprises and Xiling’s presidentship is likely to attempt strategic changes in speed and direction probably along the lines of the 12th Plan finalised last year. The 62 provincial leaders of the 31 provinces that will now take reins are mandated for the next few decades of leadership of China and would be groomed for bigger Politburo roles and few among them will even lead China in the later decades.

Seven of the nine Politburo standing committee will retire in the 18 th Congress in August 2012 and Xi Jinping and the Vice Premier elevated into roles as Preseident and Premier. The other 16, will lose another 14 to retirement and younger leaders selected in their place at the 25 member Polit buro, in total only leaving 2 from the old generation in the new 100 strong leadership of the country.

The largest provinces of Shandong, Henan, Guangdong, Sichuan and Jiangsu are larger than Western Europe. Provincial leaders are expected to lead them like nations with welfare, social stability, distributive justice and other national concerns makin gthem a grooming ground for future leaders(Hoovers, China Leadership Monitor no. 24) Leaders like Chen Xitong and Chen Liangyu were decimated in provincial politics by current incumbents Jiang Zemin and Hu Jintao. Concurrently, the new decade may also see a curb on Provincial powers.

A new leadership style for Xi Jinping

As the younger generation takes hold, and China’s military increasingly feels marginalised in the Polit Buro and the People’s Congress might well agree to more sophisticated measures as China continues into the secon dphase of its Currency Domination strategy with Yuan trade making a 15% share of its global trade thru last years’ agreements with Brazil, Japan and others.

The new leadership’s stance on the minorities like Uighurs, Hans ( migrated into Uighur domnated Xiajiang for 10 years) It last broadedned police powers less than six months ago allowing detention without recourse for upto 6 months on charges of serious corruption or terrorism at an undisclosed location China’s policy schools have spent the last ten years tackling the national stance on social stability and political reform and changes in the CPC (Communist Party of China) The CPC celebrated its 90th anniversary last year(here)

Meanwhile, recent aggressive politicking by the Chinese Military establishment in the South China Sea has also put US on guard whil eit has been increasing troop formations on the McMahon Line border with India as it continues to refuse recognition to Arunachal Pradesh and Kashmir using diplomacy as a pawn

Tax on Services in most cases is capped at between 3-5% as China looks to grow its services and power availability and labour wage increases stifle manufacturing growth

There is still a lot to do for the new team to ensure the maturing of China’s business interations with t he west and its new role as the likely Superpower it aspires to.

The new Power ministry

As Reuters reports, China, the world’s biggest energy consumer, has been trying to draw up a long-term strategy on the security of overseas oil-and-gas supplies, rationalize pricing and taxation policies, boost nuclear and renewables and cut greenhouse gas emissions.

Without a unified energy regulator, Beijing has struggled to achieve many of its priorities, including establishing a strategic petroleum reserve and reining in its chaotic coal industry.

Among other changes, the proposal — being considered by the State Council, China’s cabinet — calls for giving the new ministry the power to set oil, gas, coal and electricity prices, work now handled by the powerful National Development and Reform Commission (NDRC), China’s state planner.


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