Elite Chinese Politics and Political Economy

Shandong gets a new party secretary since recently appointed Li Jianguo has been kicked off to the NPC. The new party secretary of Shandong is Jiang Daokang, who worked for a long time in the central office under Zeng Qinghong. This shows nearly the end of Li Ruihuan's influence, and the continual strength of Zeng Qinghong's influence.


姜异康任山东省委书记 李建国不再兼任
http://www.sina.com.cn 2008年03月31日10:09 新华网
姜异康任山东省委书记李建国不再兼任
姜异康

姜异康任山东省委书记李建国不再兼任
李建国

　　新华网北京3月31日电 日前，中共中央决定：

　　李建国同志不再兼任山东省委书记、常委、委员职务；姜异康同志任山东省委委员、常委、书记。

　　李建国简历

　　十一届全国人大常委会副委员长兼秘书长，山东省人大常委会主任。

　　男，汉族，1946年4月生，山东鄄城人，1971年6月加入中国共产党，1969年9月参加工作，山东大学中文系汉语言文学专业毕业，大学学历。

　　1964—1969年　山东大学中文系汉语言文学专业学习

　　1969—1970年　留校待分配

　　1970—1972年　天津市宁河县东棘坨公社姜庄大队劳动锻炼

　　1972—1976年　天津市宁河县文教局、县委宣传部干事

　　1976—1978年　天津市农委宣传处干事

　　1978—1981年　天津市委办公厅办公室干事

　　1981—1982年　天津市委办公厅办公室副主任

　　1982—1983年　天津市委办公厅副主任

　　1983—1988年　天津市委办公厅主任

　　1988—1989年　天津市委副秘书长兼办公厅主任

　　1989—1991年　天津市委秘书长

　　1991—1992年　天津市委常委、秘书长、和平区委书记

　　1992—1997年　天津市委副书记

　　1997—1998年　陕西省委书记

　　1998—2007年　陕西省委书记、省人大常委会主任

　　2007—2008年　山东省委书记

　　2008—　十一届全国人大常委会副委员长、党组成员兼秘书长，山东省委书记(至2008年3月)、省人大常委会主任

　　中共第十四届中央候补委员，十五届、十六届、十七届中央委员。第十一届全国人大常委会副委员长、秘书长。

　　姜异康简历

　　国家行政学院党委书记、副院长。

　　男，汉族，1953年1月生，山东招远人。1969年12月参加工作，1970年12月加入中国共产党。中南工业大学管理工程硕士。

　　先后在部队、工厂、机关工作。

　　1988年3月起任中共中央办公厅秘书局副局长、中共中央直属机关事务管理局常务副局长、局长。

　　1995年7月任中共中央办公厅副主任兼中共中央直属机关事务管理局局长。

　　1997年4月任中共中央办公厅副主任兼中共中央直属机关事务管理局局长，中央精神文明建设指导委员会委员、办公室副主任。

　　2000年10月任中共中央办公厅副主任，中央精神文明建设指导委员会委员、办公室副主任。

　　2002年10月任中共重庆市委副书记，2002年11月兼任中共重庆市委党校校长，

　　2005年5月兼任中共重庆市委移民工委书记。

　　2006年6月起任国家行政学院党委书记、副院长(正部长级)。

　　中共第十六届中央候补委员、第十七届中央委员，十届全国人大代表，九届全国政协委员。(简历来源：国家行政学院网站)

I was hanging out with my student in Beijing, but suddenly the TV screen was filled with rioters in Lhasa. This was a bit of a surprise, and it has certainly stirred things up a bit in the run-up to the Olympics. Once again, I attach Willy Lam's excellent analysis on this topic. Also, if you look at TAR party secretary Zhang Qingli's profile, you know he is no "pure hearted pilgrim" as the saying goes.
1. The nephew of former CMC vice chairman Zhang Wannian
2. Commander of the Xinjiang Production and Construction Corp


Tibet Riots: Hu Jintao is the Biggest Loser

Strongman¡¦s Olympic glory is already tarnished by the unrest

By Willy Lam from www.asiasentinel.com March 17, 2008

http://www.asiasentinel.com/index.php?option=com_content&task=view&id=1105&Itemid=31

President Hu Jintao and his ¡§Tibet Faction¡¨ have turned out to be the biggest losers in the wake of the most horrendous disturbances in Tibet and adjacent provinces since the 1959 Tibet Insurrection.

By Sunday, March 16, more than 10,000 lamas and other Tibetans had staged rallies and demonstrations ¡V and clashed with Chinese police, soldiers and People¡¦s Armed Police (PAP) officers in the Tibet Autonomous Region (TAR) and the nearby provinces of Qinghai, Sichuan and Gansu. The Xinhua News Agency and Hong Kong newspapers have quoted authorities, including the Mayor of Lhasa, Duoci Cizhu and Gansu Governor Xu Shousheng, as saying that things are back to normal in these areas. After mass arrests of alleged ringleaders in Lhasa and other cities, virtual martial law has been imposed on the Tibet capital.

While the first wave of the ¡§Free Tibet in the Olympics Year¡¨ campaign has apparently subsided, Hu, also the Chinese Communist Party (CCP) General Secretary and commander-in-chief, may have suffered the most devastating blow to his career.

First, as Party Secretary in Tibet from 1988 to 1992, Hu is the party¡¦s leading authority on the region. As chairman of the Central Military Commission, Hu signed orders in mid-2007 to move more soldiers into both Tibet and Xinjiang so as to make sure that ¡§splittists¡¨ in both autonomous regions would not make trouble for Beijing in the run-up to the Summer Olympics. He also called up members of the 650,000-strong paramilitary People¡¦s Armed Police

These precautionary measures, however, failed to prevent unrest. Moreover, conditions in Xinjiang have remained restive in the wake of an alleged terrorist incident on board an Urumqi-Beijing flight on March 8. As both party and military chief, Hu cannot shirk his responsibility for failing to, in CCP parlance, ¡§nip the forces of instability at the bud.¡¨

Much more significant is the fact that since becoming a member of the CCP Politburo Standing Committee ¡V and heir apparent to ex-president Jiang Zemin ¡Vin 1992, Hu has elevated dozens of his former underlings in Tibet and neighboring provinces to senior positions.

The current party secretaries of Tibet and Xinjiang, respectively Zhang Qingli and Wang Lequan, are longtime Hu protégés. Several fifth- and sixth-generation rising stars whom Hu is grooming for leadership positions also earned their first spurs in Tibet. A notable example is Hu Chunhua, 44, the party secretary of the Communist Youth League, which President Hu headed in the mid-1980s. The younger Hu spent more than 10 years in Tibet and has already been mentioned as a potential successor to newly installed State Vice-President Xi Jinping, who is due to take over the top party post when President Hu retires in 2012.

A party source in Beijing who is close to Hu Jintao¡¦s personal think tank said the domino effect set off by the unrest in Lhasa on March 10 could end up hurting the entire Hu Jintao Faction.

¡§A key reason why Hu was picked by Deng Xiaoping in 1992 as a future leader was the ruthless and efficient way in that he put down the riots in Lhasa in March 1989,¡¨ the source said. ¡§19 years later, however, commander-in-chief Hu and his protégés have failed to contain the disturbances in spite of the larger troop presence in the autonomous region.¡¨

Diplomatic analysts in Beijing say Hu and his Politburo colleagues have been hamstrung by Olympics-related factors in this effort to suppress the ¡§splittist conspirators.¡¨ Talking to reporters Monday morning, Tibetan region Governor Qianba Puncog said that police and PAP officers had used ¡§non-lethal weapons¡¨ against the rioters. ¡§The police have displayed great restraint, and they are doing everything in accordance with the law.¡¨ This was despite reports by overseas offices of the Tibet exiled government that PAP officers had shot dead several Tibetan protestors.

It is nonetheless true that it is in the interest of Hu and company to steer clear of large-scale bloodshed so as to avoid a possible boycott of the Olympics by some athletes. In any event, the Chinese supremo¡¦s dream of having a spotless Chinese Olympics go down as part of his legacy has already been shattered. The same can be said for the promotion prospects of members of the Chinese strongman¡¦s ¡§Tibet Faction.¡¨

From zh.wikipedia.com

張慶黎（1951年1月－)，山东东平人。现任中國共產黨西藏自治區黨委書記，他在2005年12月26日暫代因腦溢血而被送往北京醫治的楊傳堂。張慶黎是中共中央軍委前副主席張萬年的侄兒。

張慶黎曾任山東省泰安市市委书记、省委常委及宣傳部長，甘肅省委常委及蘭州市委書記，新疆生產建設兵團司令員。

2006年5月正式出任中共西藏自治區黨委書記。

中共第十六屆、十七屆中央委員，第八屆、十屆全國人大代表。 　

So here I was, having a great dinner with my good friend from a major i-bank. He receives a text from someone and asked "guess what the February CPI figure is?" I was bold and suggested "8.2%?" No, 8.7%!!I think it would be quite a milestone if China breaks 10% this month; it would be the first time in over 10 years. Let's not kid around; things are getting expensive here.

Goodness, I think there is some chance for central bank independence in China yet. Check out the "Fed talk" unleashed by Zhou at the news conference today:

"Everyone noticed that all nine measures mentioned by Premier Wen yesterday targeted inflation. I personally think it is not necessary to view accelerating changes in the exchange rate as (a means of) constraining inflation. But from an analytical perspective, the direction (of exchange rate movement) is correct."

[周小川]:大家注意到，昨天温家宝总理谈到了九项措施，这些都是针对通货膨胀来做的。我个人认为，不必要把汇率变化更多地看作是为了抑制通货膨胀。但从分析的角度，方向也是对的。谢谢。 [10:51]

Eh, what did he mean? Does he agree with Wen or not? The answer is not really. He said it is "not necessary" to view exchange rate movement as a way of constraining inflation, but this means it can be viewed as such. He made that clear by saying that "from an analytical perspective," exchange rate movement is the way to go. So there, all those out there who thought Zhou was a cheerleader of revaluation is right. Before you get too excited, however, remember that Zhou is a central committee member, while Wen is a PSC member. Wen trumps Zhou, unless he has powerful allies at the top. I think he does, but would they go out on a limb on a mundane issue such as exchange rate?

Dear Readers, Wen just delivered his remarks at the NPC. There are definitely passages that take a hard line on lending, blaming inflation mostly on domestic sources. He urges continuation of loan ceilings, although with some adjustments favoring agriculture and energy efficient industries. However, the message is not completely unambiguous, as his number four point cautions against "cutting with one knife" and "hard landing," both phrases that conjure an uncompromising loan ceiling.

Here are some excerpts:

温家宝说，几年来，针对固定资产投资增长过快、货币信贷投放过多、外贸顺差过大，以及农业基础薄弱等经济发展中不稳定、不协调、不可持续的问题，严把土地、信贷两个闸门，提高市场准入门槛，适时调整财政政策、货币政策，完善产业政策和土地政策，调整经济结构，加强薄弱环节。根据经济形势的变化，多次及时调整金融机构存款准备金率、存贷款基准利率，取消或降低高耗能、高排放和资源性产品的出口退税。　[ 2008-03-05 09:14:23 ]

The soft part:

温家宝说，几年来，针对固定资产投资增长过快、货币信贷投放过多、外贸顺差过大，以及农业基础薄弱等经济发展中不稳定、不协调、不可持续的问题，严把土地、信贷两个闸门，提高市场准入门槛，适时调整财政政策、货币政策，完善产业政策和土地政策，调整经济结构，加强薄弱环节。根据经济形势的变化，多次及时调整金融机构存款准备金率、存贷款基准利率，取消或降低高耗能、高排放和资源性产品的出口退税。　[ 2008-03-05 09:14:23 ]

The harder part

[温家宝]━━ 经济运行中一些突出问题和深层次矛盾依然存在。近年来固定资产投资增长过快，货币信贷投放过多，国际收支不平衡。长期形成的结构性矛盾和增长方式粗放问题仍然突出。投资与消费关系不协调，投资率持续偏高；一二三产业发展不协调，工业特别是重工业比重偏大，服务业比重偏低；自主创新能力不强，经济增长的资源环境代价过大。农业基础仍然薄弱，农业稳定发展和农民持续增收难度加大，城乡、区域发展差距扩大的趋势尚未扭转。特别是影响经济发展的体制机制障碍还相当突出，改革攻坚任务繁重。　[ 2008-03-05 10:05:26 ]

The part where he blames global food prices....well I think someone else put him up to it, or maybe not. But he does blame rising housing prices, so more policies to deal with that problem on the way....

[温家宝]━━ 涉及群众切身利益的问题有待进一步解决。当前物价上涨、通货膨胀压力加大。去年居民消费价格总水平比上年上涨4.8%，主要是食品和居住类价格涨幅较大。物价上涨有多方面的因素：国内农产品价格多年在低位运行，近期的价格上涨有其必然性和一定的合理因素，但对群众特别是低收入群众生活影响较大；近年来国际市场初级产品价格大幅上升，也直接影响国内价格上涨。由于推动价格上涨的因素还将存在，今年价格上涨的压力仍然较大。同时，生产资料价格不断上升，房地产等资产价格上涨过快，防止通货膨胀的任务相当艰巨。劳动就业、社会保障、教育、医疗卫生、收入分配、住房、产品质量安全、安全生产、社会治安等方面，还有不少问题需要认真加以解决。　[ 2008-03-05 10:05:42 ]

Then my favorite part:

"We will implement tightening monetary policy, mainly considering that the pressure of a rebound of fixed asset investment is quite high. Also, lending remains high, while liquidity surplus has not eased, thus upward price pressure remains obvious. This all needs strengthening of financial control--limiting the supply of money and the overly fast growth of lending"

Okay, this sounds very hard-line right? Not so fast: Note, only "overly fast growth of lending"(过快增长) should be limited, not fast growth of lending. When is lending growing "overly fast"??? Also, lending should not be given to energy intensive industries, but what about real estate? If the premier is so concerned about real estate prices, why isn't there explicit statement channeling loans away from the real estate sector???

[温家宝]温家宝指出，实行从紧的货币政策，主要是考虑当前固定资产投资反弹压力较大，货币信贷投放仍然偏多，流动性过剩矛盾尚未缓解，价格上涨压力明显，需要加强金融调控，控制货币供应量和信贷过快增长。一要综合运用公开市场操作、存款准备金率等方式，加大对冲流动性力度；合理发挥利率杠杆调节作用；完善人民币汇率形成机制，增强汇率弹性。二要着力优化信贷结构，严格执行贷款条件，有保有压。控制中长期贷款增长，特别是对高耗能、高排放企业和产能过剩行业的贷款；创新和改进银行信贷服务，完善担保、贴息等制度，加大对“三农”、服务业、中小企业、自主创新、节能环保、区域协调发展等方面的贷款支持。三要深化外汇管理体制改革。完善结售汇制度，加强跨境资本流动监管，稳步推进资本项目可兑换。拓展外汇储备使用渠道和方式。同时，采取综合措施，努力改善国际收支状况。　[ 2008-03-05 10:20:14 ]

Dear Readers, I know I have not contributed much of substance lately, but here is a piece of my mind. Exactly 20 years ago, China's inflation rate was going through the roofs, surpassing the 20% mark in many cities. Yet, a group of young scholars who worked for a think tank set up by then Premier and Party Secretary Zhao Ziyang wrote article after article about "acceptable" inflation--the idea that 20% inflation was normal for a developing country like China (for full story, READ MY BOOK). It turns out that there was some support for what they said, but they mainly made the argument because their political patron, Zhao Ziyang, wanted them to say so.

Now, the leader of that young group of scholars, Li Yining, is at it again. As one can see from the passage below, Li now blames inflation in China on current account surpluses and world price shocks. He is clever to admit that high investment was also a cause. The underlying tone of his remarks though is that the central government should loosen monetary policies because the cause really was "structural" (ie having to do with exchange rates). To be sure, Li is quite consistent in his argument; he also blamed inflation in the 80s on the structural problem of having too many SOEs and price controls. Be that as it may, China fortunately never implemented his preferred policy of not imposing retrenchment policies--or it would have faced hyper-inflation. Li's thinking is once again gaining currency, and this time, he has the backing of some subset of the political elite and the real estate tycoons. I don't want to sound melodramatic, but one feels a certain level of relief that Wang Qishan is taking the Vice Premier position at such a moment.


http://news.sina.com.cn/c/2008-03-04/091915071287.shtml
主持人：中行预计2月份CPI涨幅将超过8%。之前报道中你说过，今年上半年我国物价将维持高位运行，请解释一下。

厉以宁：这次物价上涨跟十来年前不一样。90年代初期，物价上涨也很快，是投资规模过大在起作用，引起了信贷过多，需求过望，物价上涨。此时，中央采取双紧政策。财政、货币政策都是紧的，很快见效了。

这次也有投资规模过大的因素，但外汇储备占款过多引起人民币投放过多也是因素，单纯紧缩不能解决现状。另外，物价上涨还受物价上涨引起，比如国际石油价格上涨。现在油价很高，油价上涨，粮价，估价粮价也上涨，有人讲：石油价高，玉米就用作炼酒精。玉米紧缺，饲料价上涨，带动整个粮价上涨。紧缩只对投资规模过大起作用，对另外两种因素不起重要作用。

当前应对物价问题，增加供给是必要的，比如粮价上涨，猪肉价格上涨，就要增加供给。当初用政策调动农民积极性就可增产，现在还需要大规模投入。比如猪肉降价，就要大规模产业化养猪，改革赡养方式。这靠政策号召不能解决。

物价上涨今年上半年还在高位，下半年随着供给增加，宏观紧缩措施取得一定成效，物价可以平稳，先高后低是今年物价上涨的趋势。

主持人：物价上涨对我国的经济会产生什么影响？

　　厉以宁：物价上涨对民生产生影响，老百姓生活负担加重，工资上涨滞后于物价上涨。同时，物价上涨，很多企业生产成本增高，会感到不好经营，特别是农产品的上涨。物价上涨对劳动密集型行业不利，容易把经济导向资本密集型行业，技术密集型行业。企业害怕生产成本上涨，工资上涨，会多买机器少雇人，就会产生就业问题。十来年前的上涨，紧缩出现，物价就下来，这次紧缩后物价不一定下来，我们要连续采取措施，包括加工资措施等。

　　经济学家应该冷静分析，工资上涨是滞后的，低速的怎么办？应采取补贴办法，是市场经济国家在必要时也会采用的暂时手段。

　　主持人：去年有6次加息，中行预测最快3月下旬进行非对称型加息，这会有作用吗？

　　厉以宁：加息只对由需求过多引起的情况有影响，可以降低投资。假如是外汇储备过多而引起的流动性偏大，加息也没有很大用处。不能寄予太大希望。而且调整存款准备金率、加息均属总量调控，是有局限性的，容易一刀切。所以结构性的货币政策调控作用更好。