ENGLISH EDITION OF THE WEEKLY CHINESE NEWSPAPER, IN-DEPTH AND INDEPENDENT
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Issue 609 04-03-2013
Summary:A Fine-tuning of China's Political Machine, Shaking up China's Censors and Unusually Chilly February for Luxury Goods


Highlights from the EO print edition, No. 609, Mar 4, 2013


A Fine-tuning of China's Political Machine
News, page 2
~ Over the past 31 years, China has made reforms to the central ministries and departments under the control of the State Council on 7 occasions.
~ Although details of this year's reform plan have yet to be released, there has been plenty of media conjecture hinting at the likely targets of reform.
~ Unlike the shake-up back in 2008 when several "super-ministries" were formed by the amalgamation of various smaller regulatory bodies or departments, this year's reforms are likely to be more focused on "functional transformation" (职能转变).
~ This "functional transformation" is said to be composed of two components, the first is "the promotion of the separation of government and business, of government and capital, of government and social services and of government and society and the establishment of clear responsibilities for each department." The second component relates to "establishing a scientific, clean and efficient system of administration that is service-oriented and with which the people are satisfied."
~ Wang Yukai (汪玉凯), one of the officials who helped design the reforms in 2008, told the EO that the general direction of this year's restructuring has already been settled and that the plan is to make only minor reforms. Wang said that as this year marks a political transition in China, and the amount of time available to consider any reform plans was limited. Wang noted that many of the reforms that will be instituted this year will address urgent or outstanding problems and that broader reforms will perhaps have to wait another 5 years.
~ Zhu Lijia (竹立家), an academic from the Chinese Academy of Governance, a training center for middle and senior government officials which operates under the authority of the State Council, agreed with Wang Yukuai's analysis. Zhu said that from what he could tell, this round of reforms would be aimed at improving the "software" of how the various departments operate with a focus on bringing many of the second-level entities that have fallen between gaps in management back into the fold and exposing them to more oversight.
Original article: [Chinese]

Railways Ministry Restructuring Not Finalized Yet
News, page 2
~ Since 2008, the possibility of restructuring the Ministry of Railways has consistently been discussed around the "Two Sessions," the annual meeting of the full bodies of China's Political Consultative Conference (CPPCC) and the National People's Congress (NPC).
~ Rumors have been reported in the media that the ministry will be absorbed by the Ministry of Transportation, but there's been no official announcement yet.
~ Previously, Sun Yongfu (孙永福), former vice minister of the Ministry of Railways and a member of the CPPCC, said in an interview that the government is still discussing a possible merger. The Economic Observer confirmed from several different sources that the reform plan indeed hasn't been finalized yet.
~ A source working in the Shanghai Railway Bureau said that current signals suggest the reform won't have any impact on local railway bureaus.
~ Railway system reform has been a polarizing issue. "Reformists" like Peking University Professor Zhao Jian (赵坚) say the railway ministry has mixed the functions of government and business for a long time. He says this is the biggest obstacle in the rail sector. However, others argue that, given the system's enormous scale and importance in the economy, the government should continue to exercise a predominant role. Wang Mengshu (王梦恕), an academic from the Chinese Academy of Engineering, says that integration of government administration and enterprise is best for the development of China's railways.
Original article: [Chinese]

Shaking up China's Censors
News, page 3
~ China is on the verge of a government reshuffle that's likely to see several major bureaus merged and streamlined. For months it\'s been rumored that the General Administration of Press and Publication (GAPP) and the State Administration of Radio, Film & Television may both be absorbed by the Ministry of Culture.
~ The Economic Observer has learned that this round of government agency reform may not involve the Ministry of Culture. However, GAPP and SARFT are expected to merge into one agency. The plan should be finalized during the "Two Sessions."
~ Professor Zhu Lijia (竹立家) from the Chinese Academy of Governance says that care should be taken to avoid blindly merging culture, radio, television, print publications and other departments under one umbrella. This could disturb the normal operations and regulation of certain organizations.
~ Wu Chunyong (吴纯勇), an expert in radio and television studies, says that the advantages of merging outweigh the disadvantages, especially in terms of copyrights. The controversial issue of copyright approval authority should finally be resolved.
Original article: [Chinese]


A Thrifty Two Sessions
News, Page 6
~ The annual "Two Sessions," began in Beijing this week and will last roughly two weeks. This year will be a bit different from past conferences though.
~ In a word, this year's unofficial theme is "thrift." Representatives will follow the principle of simplicity and frugality. There will be no flowers provided in their hotel rooms and no small gifts or souvenirs given. There will be less variety in their meals, strict controls on drinks and a ban on large banquets. Road blockages and police escorts for officials will also disappear this year.
~ High-end domestic alcohol like Moutai and Wuliangye are also restricted. Red wine has emerged as a permitted substitute though, which has seen its sales skyrocket recently.
~ Insiders say that a ban on using public money for these things doesn't mean they won't happen. However, they will inevitably happen far less.
Original article: [Chinese]


Special Feature: Two Sessions
Nation, page 9-15
~ This week's Nation section focuses on the ongoing "Two Sessions" with a particular focus on budget transparency.
~ There is an article that examines what is likely to be in the Social Security Fund budget that will go to the NPC for approval for the first time this year. This is despite a budget law being on the books for 18 years requiring that the budget be approved by the NPC.
~ Another article looks at the brief history of getting state-owned companies to pay dividends into central government coffers and looks at how the money is spent.
~ The feature is also paired with a front-page editorial that calls on delegates to the National People's Congress to take their vote on passing the annual budget very seriously.
Original article: [Chinese]


Unusually Chilly February for Luxury Goods
Corporation, Page 28
~ Usually February is a busy season in the luxury market, but during Spring Festival this year, sales of luxury goods dropped to the lowest point in five years, according to research by the World Luxury Association.
~ Since the Central Committee stepped up efforts to crack down on corruption last year, sales of high-end watches have decreased by 30 to 40 percent. Other popular luxury brands like LV, Gucci, and Burberry are feeling a similar crunch.
~ Companies are now trying to think up ways of marketing their products. Bottega Veneta, a well-known luxury brand, has managed to buck the trend by keeping a low profile and keeping its logo hidden inside the handbags it sells.  
Original article: [Chinese]

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