Keywords: Election fraud in Liaoning’s legislature, Rights lawyer Xia Lin, overheat property market in China, Hukou system reform in Beijing, land development controversy in Hong Kong.

CHINA – POLITICS

1. Election result of National People’s Congress was called void after fraud among the delegates from Liaoning Province on 13 September

On 13 September, the National People’s Congress Standing Committee (NPCSC) held an extraordinary session to void the membership of 45 NPC delegates from Liaoning Province, about 44% of the NPC delegates from this province. They were dismissed because they have bought their offices in the 2013 election of Liaoning’s delegates to the National People’s Congress among the Liaoning’s lawmakers. Of the 45 NPC delegates who are dismissed, 38 are also members of the 62-strong standing committee of the Liaoning’s People’s Congress. As over half of the standing committee of Liaoning’s legislature is now disqualified, the provincial legislature is rendered unable to form the official quorum and thus non-operational. For this reason, the NPCSC needs to make “innovative arrangement” by setting up a preparation committee to organize meetings at the Liaoning’s Legislature. A meeting was scheduled in 01 November to select new members of Liaoning’s Legislature in replacement of those dismissed.

Liaoning in this year has experienced a number of personnel reshuffle. In August, Wang Min (王珉), the former party secretary of Liaoning Province, was investigated by the Central Commission for Discipline Investigation. Unlike the case of Hengyang City of Hunan Province in 2013, this is the first time vote-buying fraud was identified by the NPCSC and cited as a reason to void the election result. The NPCSC’s action is unprecedented in PRC’s history.

• //The Standing Committee of the National People’s Congress convened an extraordinary session to grapple with the fallout from a vote-buying fraud at the core of the Liaoning provincial legislature. The provincial body was rendered inoperable after more than half of its standing committee members were disqualified over the fraud, making the committee incapable of forming a quorum. State-run CCTV reported that there was no precedent since 1949 for a provincial legislature to be made inoperable, and top national lawmakers had to come up with a remedy that would conform with the constitution. The election fraud in Liaoning was part of a bigger corruption scandal that saw its former Communist Party boss Wang Min, also an NPC Standing Committee member, detained as part of a graft investigation on the eve of the NPC’s annual meeting in March. Wang, who also doubled as head of Liaoning’s legislature during his tenure in the province, was later accused of being responsible for widespread corruption in both local legislative elections and the promotion of government ­officials. // Source: SCMP, 13 September 2016.

• //About 45 NPC members from Liaoning, or nearly half of all those representing the province, were expelled on September 13 during an extraordinary session of the national legislature’s Standing Committee. In addition, an estimated 523 lawmakers were dismissed or resigned from the 619-member Liaoning People’s Congress, a provincial branch of the NPC, after being linked to the election fraud scandal. Five high-level Liaoning officials were subsequently arrested, including Li Feng, a former vice chairman and the party secretary of the Liaoning People’s Congress Standing Committee. // Source: Caixin (English Edition), 20 September 2016.

The Liaoning’s People’s Congress on 17 September announced its acceptance of the resignation of 454 members, out of 523 members who are reported to have relations with the election fraud. Yet, it remains to be seen whether these resigned members will receive any further punishment.

• //2013年遼寧省選出102名全國人大代表，其中45人涉賄，13日被全國人大常委會第23次會議宣布當選無效。由於本案的「選民」就是遼寧619位省級人大代表，其中弊端叢生，遼寧省人大會17日宣布，接受452名省人大代表辭職。此外，由於前遼寧省人大常委會副主任李峰被罷免，加上涉嫌嚴重違紀被立案調查的吳野松也辭去職務，去職省人大總人數已達454人。BBC中文網稱，這400多名去職者的名單公布，但未公告這些人是否將受進一步處分。// Source: China Times, 19 September 2016.

The NPCSC-designated committee to prepare meetings of the no-longer functional Liaoning’s legislature has scheduled a new meeting on 01 November to select new members of the Liaoning’s legislature.

• //在辽宁省十二届人大一次会议选举全国人大代表过程中，有45名当选的全国人大代表拉票贿选，涉及此案的辽宁省人大代表的资格已按照法律程序被终止。　　辽宁省十二届人大七次会议筹备组第一次会议就补选好省人大代表工作强调，要切实在思想上高度重视、认识上高度统一、行动上高度自觉，要在人选上把好政治素质关，突出代表性，保证履职能力，确保推荐出的人选符合中央要求、符合人民意愿、符合工作需要。要在程序上合法合规，严格执行选举法、代表法、地方组织法等相关法律和规定，确保各项程序于法有据。据介绍，辽宁省十二届人大七次会议将于11月1日举行，会议将补选辽宁省十二届人大常务委员会组成人员，将通过辽宁省十二届人民代表大会有关专门委员会组成人员。// Source: People’s Daily, 18 September 2016.

The President of NPCSC Zhang Dejiang said the case of election fraud in Liaoning Province was the first one identified at the provincial level since the establishment of the PRC. He continued that it severely violated the Party’s rule and the state law, and has touched the bottom line of the socialist system with Chinese characteristics and the bottom line of the CCP’s rule.

• //张德江说，辽宁拉票贿选案是新中国成立以来查处的第一起发生在省级层面、严重违反党纪国法、严重违反政治纪律和政治规矩、严重违反组织纪律和换届纪律、严重破坏人大选举制度的重大案件，是对我国人民代表大会制度的挑战，是对社会主义民主政治的挑战，是对国家法律和党的纪律的挑战，触碰了中国特色社会主义制度底线和中国共产党执政底线。依纪依法彻查和处理辽宁拉票贿选案，充分体现了以习近平同志为总书记的党中央坚定不移推进全面依法治国、全面从严治党的鲜明态度和坚定决心，维护了人民代表大会制度的权威和尊严，维护了社会主义法治的权威和尊严。// Source: Sina, 14 September 2016.

Further reshuffle of major officials in four cities of Liaoning Province was reported after the NPCSC’s action:

• //因為賄選案影響，遼寧省在近日出現人事變動。據政府網站消息，9月17日，遼寧省委組織部發佈公告，公示擬任領導職務人選，其中，營口、錦州、丹東、盤錦等四市主要領導將有所調整。據公告顯示，王戒驕擬提名為營口市副市長、王德佳擬提名為錦州市市長、劉興偉擬任丹東市委書記和高科擬任盤錦市委書記。現任丹東市委書記孫兆林、盤錦市委書記孫國相將另有任用。遼寧「拉票賄選案」被全國人大委員長張德江形容為「利用資本操縱選舉」和「觸碰了共產黨執政底線」，隨著對涉及「拉票賄選案」人員的處理，遼寧各級領導班子在未來或會繼續出現各種人事變動。// Source: Hong Kong 01, 20 September 2016.

According to one commentator from Hong Kong 01, Ho Yik Man, each briber has spent 500,000 yuan on average on 523 members of Liaoning’s legislature in order to win the election.

• //遼寧全國人大代表賄選案披露，平均每名「當選」者的賄選開支是50萬元人民幣，打破2012年湖南衡陽賄選的人均18萬紀錄。除了金額，2013年1月27日的會議上，當日參加投票的619名代表中523人涉及受賄。他們當中至少有副省級官員9人，除去5名省人大常委會負責人，還有遼寧副省長江瑞、原瀋陽軍區裝備部副部長宋寶華、上海復旦大學黨委書記魏小鵬等。 此外，涉及在香港上市的內地公司就有5間。因為賄選，遼寧省十二屆人大常委會本來有62名常委，其中已有38人代表資格被終止，常委會成員不足半數，無法開會履職。[…] 今年2月，中央巡查組殺回馬槍（俗稱「回頭看」)，發現遼寧高層嚴重貪污案，省委書記王珉落馬，牽扯出震驚全國的人大代表賄選案。// Source: Hong Kong 01, 19 September 2016.

Commentator of the People’s Daily Xia Kedao (侠客岛) pointed out the significances of the void election result by the NPCSC lie in 1) the fact that it is the first time an extraordinary session was convened by the NPCSC to deal with election fraud since the establishment of PRC, 2) it is the first time election fraud was investigated as high as the provincial level, and 3) as much as 44.1% of the NPC delegates from Liaoning were declared void in this action.

• //不寻常之处何在？首先，这是一次全国人大常委会“临时召集”的会议，这一举动就非常不寻常；而之所以临时召集，则是为了表决辽宁省的部分全国人大代表当选无效，内容也非常不寻常。临时：按照1987年颁布的《全国人大常委会议事规则》，全国人大常委会，一般会期是两个月一次，“有特殊需要的时候，可以临时召集会议”。这一次的临时召集有多特殊呢？这么说吧，在全国人大网上，可以翻阅“历次常委会”的专题。这一专题最早的更新，是2004年2月，第十届全国人大常委会第七次会议；自那到现在的12年间，这一机制几乎完全按照2个月的间隔来进行。仅有三个“例外”：1，新一届常委会产生后的第一次、第二次会议，一般间隔一个月，这已是惯例；2、2004年4月，一个月内召开了两次会议，但没有说是“临时召开”的，按照日期推算，加开的那一次，是因为要决定香港行政长官和立法会的产生办法；3，这一次。换句话说，至少12年来，这是全国人大常委会第一次召开临时会议。定性：会议的内容则更加重磅：辽宁贿选。因此案件，辽宁的官场正迎来深度洗牌。此前，四名落马的省级高官——辽宁省委原书记王珉，辽宁省人大常委会原副主任王阳、郑玉焯，原省委常委、政法委书记苏宏章，都在审查通报中被点名与此拉票贿选案有关。一批厅级官员、企业家、人大代表，也卷入此案当中，后续余震不断。今天，张德江的讲话中，也是首次对辽宁贿选案“定性”——这是“新中国成立以来查处的第一起发生在省级层面、严重违反党纪国法、严重违反政治纪律和政治规矩、严重违反组织纪律和换届纪律、严重破坏人大选举制度的重大案件，是对我国人民代表大会制度的挑战，是对社会主义民主政治的挑战，是对国家法律和党的纪律的挑战，触碰了中国特色社会主义制度底线和中国共产党执政底线。” “新中国成立以来第一起”、“省级层面”，已经凸现了不同。此前曾用过类似表述的是衡阳贿选案，不过不是“省级”。数据也确实可以证明原因。要知道，十二届全国人大代表中的辽宁代表，一共才102名，这一次就一下失效了45名，占到全省总数的1%；新华社的数据则更加令人触目惊心：523名辽宁省人大代表涉及此案！辽宁省的十二届人大常委会，本来有62名人员，已有38人代表资格被终止。因此，其常委会成员已经不足半数，无法正常履职；“一个省级人大常委会出现这种情况，新中国历史上还没有过”！// Source: Sina, 14 September 2016.

Many of those disqualified are bosses of private companies or leaders of state-owned enterprises:

• //In the Liaoning case, most of the 45 members are bosses of government-linked businesses. They include former Lingyuan Iron and Steel chairman Zhang Zhenyong; former Liaoning Tongda Huajin Chemicals chairman Liu Yunwen; and Zhang Yukun, chairwoman of Shengjing Bank.// Source: SCMP, 15 September 2016.

A Shanghai-based report shows the extent of the businesspeople’s connection with the NPC and points out that one in seven richest men in China are delegates to the National People’s Congress or its advisory body:

• //Often derided as a rubber-stamp legislature, the congress and its companion advisory body have in recent years become a club for some of China’s wealthiest executives, keen to rub elbows with government officials. Holding such high office also brings prestige and, much like peerage or knighthood in Britain, is seen as a marker of status in the Communist Party-dominated establishment. In China, it is sometimes known as “wearing the red hat.” […] Serving as a lawmaker has become so attractive to the wealthy that last year, of the 1,271 richest Chinese people tracked by the Shanghai-based Hurun Report, a record 203, or more than one in seven, were delegates to the National People’s Congress or its advisory body. […] The vote-buying scandal in Liaoning has been brewing for at least five years, with hundreds of officials and lawmakers in its provincial bodies accused of engaging in the bribery, according to a report in Caixin, a well-regarded Chinese newsmagazine. The report, posted online on Tuesday, has since been taken off the internet.// Source: New York Times, 14 September 2016.

Prof. Zhang Ming from the Renmin University argued that the exposure of election fraud in Liaoning could not bring about a big change unless the fundamental reform on the election system takes place. He further pointed out that the NPC has now became a club of businesspeople and officials and a symbol of status and position for them. The membership with the legislature may also confer influence, connections, and protection against police detention. Hong Kong-based Suzanne Pepper concurred the view that businesspeople see their NPC membership as a mark of social status.

• //[R]enmin University political scientist Zhang Ming said the election fraud in Liaoning was unlikely to be a lone case because the practice of vote buying was widespread across the country. “I think [the fraud in Liaoning] has been exposed as a warning to other provinces, but it won’t be effective, because fraud is inevitable – the election system itself is at fault,” Zhang said. […] However, the political impact of the fraud could go far beyond the party congress. It raises a fundamental question over whether the mainland’s political institutions, which were adopted in the mid-1950s, can properly function in a rapidly changing economy. The NPC is repeatedly criticised as a club of money and power instead of a house representing interests of the general public. Businesspeople and officials alike are eager to become delegates because the position confers influence, connections and even protection against police detention. The ranks of the NPC’s roughly 3,000 delegates are stuffed with local government officials, state enterprise managers and the wealthy elite. “The NPC has become a club for senior officials and top executives,” Zhang Ming said. “If you don’t get in, you can’t mingle with the others. It is a symbol of status and position.” Other scandals have afflicted the people’s congress system. In 2013, 518 of 529 members of the Hengyang people’s congress in Hunan province were found to have taken bribes to vote to send delegates to the provincial legislature.// Source: SCMP, 15 September 2016.

• //“For reasons that don’t make sense to outsiders given the ‘rubber stamp’ nature of the N.P.C., membership in any honorary body is coveted by people who see it as a mark of social status, something to add to their resumes,” said Suzanne Pepper, a scholar based in Hong Kong who studies Chinese elections. Many of the expelled delegates are executives of private businesses or leaders of state-owned companies, rather than career politicians and military officers — who are also well represented on the body.// Source: New York Times, 14 September 2016.

In addition to social status, the NPC membership may also bring enormous economic benefits to businesspeople, as pointed out by the lecturer of the Baptist University of Hong Kong as well as Head of BBC Chinese Raymond Li (李文):

• //香港浸會大學傳理學院高級講師，中國政治分析人士李文在接受BBC中文網採訪時說，不惜重金賄賂獲得人大代表資格，是因為人大代表的身份可以帶來巨大的政治經濟利益。李文說，這些人大代表到北京開會時，可能是舉手機器，橡皮圖章。但回到地方上，全國人大代表的身份是非同小可的，可以在官場上，在生意場上，在社會上，換取可以實際衡量的利益。據財經網報道，有數十名來自遼寧省的人大代表正在接受調查，部分有實力的企業老闆不惜重金賄選，這些企業老闆當選後插手司法，甚至以「司法建議書」的形式干預案件辦理。// Source: BBC (Chinese Edition), 15 September 2016.

Commentator from Caixin, Hui Shuli, pointed out that Liaoning’s mess in the political sphere is coupled with downward economy. In 2015, it was the only province in China to register negative economic growth. She continued to argue that the Liaoning’s government culture that block progressive institutional reform and the small share of private sector contribute to the incentive for businesspeople in Liaoning to secure their business through bribery.

• //Liaoning has long been known as a province with an unhealthy political environment. It’s also struggling economically. Heavy industry once thrived in Liaoning as well as in nearby Jilin and Heilongjiang provinces. But excessive reliance on heavy industry has been the region’s Achilles’ heel. Liaoning was the only province in the country to register negative growth in the first half of this year: Its gross domestic product declined 1 percent compared with the same period in 2015. […] Liaoning is not only well-endowed with industrial infrastructure, but it’s also rich in natural resources. And about 120 institutions of higher learning call the province home. But Liaoning is also the home of a rigid, slow-to-reform system of governance that hasn’t changed much since the planned-economy era. Its official-centric government culture, which has become deeply ingrained, hinders institutional reforms and breeds inefficiency. […] Liaoning’s private sector has long lagged behind those in other parts of the country. Private business’ share in the province’s economy is below the national average. And many private entrepreneurs have veered away from investing in the province due to concerns about local government interference and property rights protection. Business favors obtained through bribery helped some Liaoning entrepreneurs get rich. Others involved in the voting scandal rose to success thanks to years of hard work. The Liaoning political climate is not a valid excuse for illegal behavior, but it’s not hard to understand how helpless the entrepreneurs must have felt. Given the climate, they’ve had no choice but to go with the flow by buying protective talismans for their businesses.// Source: Caixin (English Edition), 20 September 2016.

In August this year, the former party secretary of Liaoning Province, Wang Min, who was also a member of the Central Committee of CCP, was arrested for graft and violation of the Party’s rules.

• //经中共中央批准，中共中央纪委对第十八届中央委员，第十二届全国人大教育科学文化卫生委员会原副主任委员、辽宁省委原书记王珉严重违纪问题进行了立案审查。经查，王珉严重违反政治纪律和政治规矩，身为省委书记没有履行管党治党政治责任，未按照中央要求履行换届工作第一责任人的职责，对辽宁省有关选举发生拉票贿选问题负有主要领导责任和直接责任；履行全面从严治党主体责任不力，公开妄议并违反中央八项规定精神，公款大吃大喝、顶风违纪，对抗组织审查；违反组织纪律，利用职权和职务影响，在干部选拔任用等方面为他人提供帮助并收受财物；违反廉洁纪律，在企业经营等方面为他人谋取利益，其亲属从利益输送中获得经济利益；利用职权和职务影响为他人谋取利益并收受财物，涉嫌受贿犯罪。王珉身为中央委员，理想信念动摇，纪律意识丧失，严重违反党的纪律，且在党的十八大后仍不收敛、不收手，造成恶劣政治影响，应予严肃处理。依据《中国共产党纪律处分条例》等有关规定，经中央纪委常委会议研究并报中共中央政治局会议审议，决定给予王珉开除党籍、开除公职处分；收缴其违纪所得；将其涉嫌犯罪问题、线索及所涉款物移送司法机关依法处理。给予王珉开除党籍的处分，待召开中央委员会全体会议时予以追认。//Source: The People’s Daily, 11 August 2016.

2. Rights lawyer Xia Lin was sentenced to 12-year imprisonment for alleged fraud

A prominent rights lawyer Xia Lin (夏霖) who had given legal assistance to persons involved in many politically sensitive cases was caught in 2014 and sentenced to 12 years of imprisonment for fraud. Xia, his defending lawyer and his wife all regarded the verdict as political retaliation against Xia for his involvement in many politically sensitive cases. Before the release of the verdict, some leading legal scholars in China published a joint letter in June 2016 questioning the fairness of the verdict.

• //A prominent mainland rights lawyer who took on high-profile politically sensitive cases has been jailed for 12 years for fraud in one of the harshest sentences to be imposed on rights advocates in recent years. After being detained for two years, Xia Lin, 46, was found guilty in the Beijing No 2 Intermediate People’s Court on Thursday of fraud involving 4.8 million yuan (HK$5.6 million). Xia, whose former clients included outspoken artist Ai Weiwei, insisted he was innocent and vowed to appeal. As court officers dragged him out of the courtroom, Xia called the sentence “an act of retaliation” by the authorities for his involvement in sensitive cases, according to his defence lawyer and his wife, who were present at the sentencing. […] Xia also defended Sichuan earthquake rights activist Tan Zuoren, rights lawyer Pu Zhiqiang, and Deng Yujiao, a Hubei waitress who killed a government official in self-defence during a sexual assault in a case that made national headlines. […] Leading legal academics on the mainland published a joint letter after the sentencing, questioning the fairness of the verdict. The group said their detailed review of the procedures in the case from the investigation to the court hearing gave them “solid reasons to think that Xia Lin was not treated fairly and it is very likely that the court has given an unfair verdict”. “We believe lawyer Xia Lin is completely innocent,” the joint letter said. It is not uncommon for authorities to use non-political charges against activists. Ai was detained for more than two months in 2010 for suspected tax evasion.// Source: SCMP, 22 September 2016.

• //內地知名維權律師、北京華一律師事務所合伙人夏霖案昨日上午在北京第二中級法院一審判決。法庭判決夏霖詐騙罪名成立，監禁12年，剝奪政治權利3年，並處12萬（人民幣，下同）罰金。夏霖今年46歲，因長期代理人權案件聞名，包括知名藝術家艾未未的案件、蒐集汶川大地震死亡學生名單的四川維權人士譚作人案、湖北洗腳妹鄧玉嬌刺死淫官案及北京小販崔英傑殺死城管案等知名案件。前年，夏代理同屬華一律師事務所的維權律師浦志強案，後來又代理曾為聲援香港佔中而被捕的北京學者郭玉閃案；2014年11月9日夏霖涉嫌「賭博」和「詐騙」被刑拘，一個月後，夏因涉嫌詐騙被正式逮捕。[…] 夏霖的辯護律師之一、北京莫少平律師事務所律師丁錫奎對本報轉述，夏霖認為自己的遭遇，是當局對他多年來堅持代理維權人權案件，特別是被捕前代理郭玉閃案的報復，「他（指夏霖）認為這是政治審判，我完全同意他的說法。」[…] 對此，辯護律師堅稱這是民間借貸行為，夏霖在羈押期間全程保持緘默，堅持「零口供」。6月23日，北京大學法學院教授賀衛方、張千帆，《律師文摘》主編孫國棟，中國政法大學法學院副教授仝宗錦、王建勛、蕭瀚以及清華大學法學院教授許章潤發表「法律意見書」，指「夏霖一案所涉款項的性質屬於民間借貸問題，被告人完全不構成詐騙罪」。夏霖是貴州人，1988年進入西南政法大學，畢業被分配到公安局工作，自稱因「不願當鷹犬」而考取律師執業證，成為最早在貴州開辦律師事務所的人之一。夏霖妻子林茹昨日指，判決很荒唐，這是當局對夏霖的打擊報復，是政治審判。// Source: Ming Pao, 23 September 2016.

The Chinese media generally did not report the case, but some information was shared on the social media.

• //Chinese state media have not reported on the 12-year sentence for Xia Lin, so social media users have mainly been learning of the news via independent publications, or word of mouth. Luo Changping, a journalist at the independent Caijing magazine, posted a picture of Lin Ru, Xia Lin’s wife, crying in someone’s arms. The image has been shared widely, with hundreds of sympathetic, yet resigned comments. Many social media users refused to accept the verdict but also acknowledged that the likelihood of a successful appeal was low. User Zhanzhan080808 wrote: “Xia Lin is innocent”, while user Liu Suli said: “I curse this court, and those behind it and their strength. History will not forgive this trial.”// Source: BBC, 22 September 2016.

William Nee from Amnesty International argued that the sentencing is harsh and sends a message to those who still refused to cooperate with the authorities. Maya Wang from Human Rights Watch was shocked not just about the length of the imprisonment, but also to a rights lawyer who has been low-profile with his work.

• //William Nee, a researcher with Amnesty International, told Quartz that the sentence was “shockingly harsh,” and that it seems to be “really a smokescreen that hides the real intent of the government to crackdown on lawyers who are willing to take up political cases,” especially after most lawyers caught in last year’s crackdown were released or given mild sentences. Xia’s sentence is a message to the lawyers who were not released, he said. “Those who have refused to cooperate and admit their guilt are still awaiting trial, and among them, Xia Lin is the first to be sentenced. Such a harsh sentence could be meant to send a message to those who have still refused to cooperate in spite of the enormous pressure that has been put on them and their families,” he said.// Source: Quartz, 22 September 2016.

• //Maya Wang, Asia researcher at Human Rights Watch, said the 12-year jail term was likely to send a “chill” through the human rights community. She told AFP: “The sentence is shocking, not only because of its length, but also because it was handed down to a rights lawyer who has tried to protect himself by deliberately taking a low-profile, technical approach to his work.”// Source: BBC, 22 September 2016.

CHINA – ECONOMY

1. China’s Overseas Direct Investment (ODI) more than its Foreign Direct Investment in 2015 for the first time

On 22 September, the Chinese authorities have announced a report on China’s overseas direct investment (ODI) in 2015. For the first time in PRC’s history, the ODI mounts to 145.7 billion USD, not only being more than the foreign direct investment (FDI) used in China in the same year, but also surpassing Japan as the world’s second largest. Of the entities who make overseas investment, over 65% are private companies. Scholars suggest that private companies have great incentives to search for overseas market when the domestic market in China suffers from overcapacities in several sectors, provides less return on investment, and offers fewer investment opportunities.

• //9月22日，中国商务部、统计局、外管局联合发布《2015年度中国对外直接投资统计公报》（以下简称《公报》），2015年中国对外直接投资同比增长3%，创下1456.7亿美元的历史最高值，首次超过日本，位居全球第二。2015年中国实际使用外资金额是1356亿美元, 首次低于ODI。商务部国际贸易谈判副代表张向晨称，从统计上来说，2015年中国正式成为资本的对外输出国。[…] 值得注意的是，非公经济已经成为中国对外投资的主力。《公报》显示，2015年非公经济占中国对外投资的65.3%，在境外并购金额中的占比达到75.6%，数量和金额上都首次超过国有企业。[…] 清华大学经济管理学院创新创业与战略系副系主任李东红财新记者分析，在经济转型阶段，企业到海外寻求机会，一方面是在追求更高的回报率，另一方面也有助于企业完成自身的转型升级。对民营企业“走出去”热情高涨，李东红认为，很多民营企业处于过剩产能行业，国内处于经济增速换挡期，投资机会减少，投资回报下降，企业在这样的时候大规模“走出去”是必然现象。// Source: Caixin, 23 September 2016.

2. Housing prices keep increasing across China’s major cities

The commentator from the People’s Daily (Overseas Edition) Xia Kedao (侠客岛) published a long article to describe the current craze with the property development sector in China as well as analyzing the underlying causes for the unstoppable increase in housing prices across China despite the economic slowdown. He argued that the first-tier cities such as Beijing and Shanghai have limited land supply but economic attractiveness lead to unstoppable increase in housing price, while other second-tier cities also experience sharp increase in housing price without economic performance because of the loose environment for credit lending across China that results in a flow of capital into the property market. Also, the local government is under financial pressure to keep land price high in support of local expenditure, suggesting a tacit consent to the increased housing price.

• //数据显示，2016年上半年，全国土地出让金达到4万亿元，同比增长9.7%；其中，30大典型城市土地出让金总额为7356.8亿元，增长145.7%；除了杭州破天荒拿到830亿土地出让金外，苏州、南京、合肥、上海等城市的土地出让金总额也突破600亿大关——要知道，除上海之外，其他四个城市可都算是“二线城市”。到底是什么，催生了这一波楼市的行情? […] 一个城市的自然禀赋够好（如厦门、杭州、三亚等），可能就会吸引人留下来。更重要的，可能是这个城市就业、创业、营商环境等足够好，也会吸引人口流入（典型如北上广深）。在土地面积有限的情况下，资源的紧缺自然会促使房价的上涨。在去年列入统计的27个重点城市中，排名前三的是上海、北京和深圳，净流入都在780万人以上，而这三个城市也恰好是目前房价最高的三个城市。同时，今年上半年，这些一线城市的土地推出面积、出让金都下降了15%左右，在供应紧缺的情况下，其楼面价则上涨25%、溢价率达61%，比去年上升了44个百分点。[…] 但当前的楼市显然已经不能完全用供需关系这种基础的经济学原理解释。一个典型例证就是，诸如郑州、济南等土地和住房均供应充足的城市，楼价也在节节攀升。在去年的一波行情中，这些城市也曾经“领涨”，之后又“领跌”，已经充分说明了泡沫的存在。[…] 换句话说，一二线城市土地供应严格控制，会刺激土地价格和房价上涨；货币超发又刺激了需求，又放大了这种上涨的力量。越调控越上涨的循环，就这样闭合了。而无论是当年的四万亿政策，还是今年以来一系列支持经济的刺激政策，资金有很大一部分都没有流入最需要资金的实体，而是流向了楼市。[…] 数据不骗人。今年第一季度，我国银行信贷和社会融资宽松程度史无前例，新增贷款规模4.61万亿元，社会融资规模总额6.5万亿元，均超过或接近历史最高水平，货币规模一直在扩大。[…] 今年年初以来，银行系统降低了首付的比例，鼓励按揭利率打折，以及有史以来最高的信贷规模，都在鼓励居民加杠杆买房；同时，在营改增之后，地方税收的下降，也给了地方政府以推高土地价格的动力——要知道，在分税制改革之后，地方的基础财政基本只够用于行政和日常建设。但在财权和事权不对等的现实下，城市要发展就要有钱，今年又关闭了很多地方融资平台，怎么办？土地出让金就成了最大的一块收入来源。所以，就有了怀疑“默许”上涨的声音。// Source: Huanqiu, 22 September 2016.

The China’s Financial Times run by the People’s Bank of China published an article which argues that the local governments must bear the responsibilities of the failure to manage the overheat property market. The article openly calls the local governments for cooperation with the central government in implementing the central policies to manage the overheat property market.

• //近些年来，地方政府在房地产市场调控过程中发挥着不可替代的作用，而部分城市房地产市场调控政策频频落空，甚至出现通过“加杠杆”方式实施去库存等政策走偏的现象，对此地方政府也有一定的责任。比如，在国家统一部署房地产去库存政策的2016年，先是京、沪、广、深一线城市的房价出现暴涨，接着部分二线城市出现房价飞涨。在这些城市，“地王”、购房“零首付”、楼盘“一日光”以及为购房出现的“离婚潮”等乱象频出，导致地价、房价迅速上涨，老百姓越来越买不起房。有人甚至得出结论，对于楼市调控，地方政府不能担当起主要责任，或者不能把楼市调控的基本职责交给地方政府。[…] 一方面，从经济规律看，地方政府应当切实担当起房地产调控的基本职责。[…] 国家根据全国房地产市场的阶段性情况可以出台统一的调控政策方针，其目标是促进全国房地产市场持续健康稳定发展，但调控政策不能“一刀切”，也很难针对某个城市出台具体的调控措施。各个城市在遵从国家调控政策的前提下应当有的放矢，根据自己的特点制定和实施具体的调控政策和措施。国家实施房地产市场调控政策，实质上就是要求地方政府切实把国家政策方针与各地实际结合起来，制定和实施具体的调控政策。对各地房地产市场的调控，责任最终将落到地方政府的肩膀上。另一方面，从实际结果看，一些地方政府确实没有很好地尽到房地产调控的重要职责。比如上文提到的，“地王”频现、购房“零首付”、楼盘“一日光”以及为购房出现的“离婚潮”等乱象，最终导致房地产价格反复、快速上升，这表明一些地方政府没有很好地落实中央政府宏观调控政策和方针要求，没有很好地完成促进房地产市场健康稳定发展、保障民生、防范风险的目标。[…] 当前高企的房价，已让广大民众抱怨连天，而楼市的泡沫化倾向，也成为国际上某些机构打压中国经济前景的口实。一线城市楼市“高烧”不退、部分二线城市楼市价格短期暴涨，这是前期地方政府没有很好地调控楼市的结果，也是将来楼市可能出现风险的隐患。[…] 一叶障目，不见森林。各地政府只有抛开唯本地利益第一的观念，自觉将地方局部利益与国家整体利益有机统一起来，才能打赢房地产市场调控这场涉及国家经济健康发展前景的持久战。// Source: Xinhua, 20 September 2016.

At a forum held in Ningbo on 24 September, a number of economists argued that there are tools for the governments to cool down the overheat property market, but not without consequence to the economic slowdown.

• //全国各大城市房市疯涨，有没有措施适当进行调控？政府会不会采取这样的措施？在9月24日由中国与全球化智库（CCG）与宁波市人民政府主办的“2016全球化企业发展中国论坛”上，多位经济学者表达了颇为一致的看法：调控办法有，关键看有没有决心。[…] “有没有措施把它打下去？肯定是有的。”他说 (摩根大通大中华区首席经济学家朱海斌)。一是资本利得税，国际上通行的税率是20%，中国并没有开征。二是放开土地供应，类似上海这样停止土地拍卖，从经济学角度来说完全是南辕北辙的，想控制房价怎么能采取控制土地供应的措施？在控制市场流动性方面，可以采取限贷类措施，打击首付贷，或者将每个月房贷还款上限与还贷者收入水平挂钩。但是政府现在不愿意这样做。他说，目前主要是看政府下不下这个狠心。目前的逻辑是，基本上中央政府不会出手，考虑各个城市之间的发展很不一样，现在的策略是一城一策，地方政府自己去制定政策。但是地方政府肯定没有积极性将房价打下去。“我觉得中央政府现在肯定不会出手。”东方证券首席经济学家邵宇说。当然，在这一假设下，还是建议要把首付比例调高一点。“其实回过头来看，国内这两年折腾了很多事，各种各样的创新谈了很多，但是保持经济温度的还是基建、房地产和汽车。”邵宇说。// Source: Caixin, 24 September 2016.

CHINA – SOCIETY

1. Beijing’s amendment to the city’s household registration system

Beijing has recently announced its plan to transform the household registration system along the city-rural divide into a unified resident account. As at this point, there have been 30 provinces which have announced plans for the reform of household registration system. Beijing’s new plan is also intended to have a better control and management of the population increase in the city.

• //《北京市人民政府关于进一步推进户籍制度改革的实施意见》昨日公布。意见》提出，本市将建立城乡统一的户口登记制度，取消农业户口和非农业户口性质区分，统一登记为居民户口，体现户籍制度的人口登记管理功能。至此，全国出台户籍制度改革方案的省份增加到30个。北大教授陆杰华表示，居民户口主要解决过去城乡分割的户籍制度，打破城乡户籍壁垒，是改革的重要方向。对于北京来说，其难度比其他城市更大。很多农民认为其宅基地是未来生活的保障，因此对转为居民存有顾虑。所以不能靠强制手段进行改革，要采取措施吸引农民进行登记，这是制度设计要考虑的重要方面。在完善户口迁移政策方面，《意见》提出，贯彻执行好本市积分落户政策，有序推进长期在京稳定就业和生活的常住人口落户工作。适应构建“高精尖”经济结构需要，健全高层次人才、紧缺急需人才落户制度，吸引海内外高层次人才在京创新创业。[…] 实施居住证制度，居住证持有人依法享有劳动就业、参加社会保险、缴存提取和使用住房公积金等权利。积极创造条件，稳步扩大居住证持有人享有的公共服务范围，并逐步提高服务标准。// Source: People.cn, 20 September 2016.

• //《意见》提出，建立户口迁移政策统筹机制，研究“户随人走”的户口迁出政策。对此，陆杰华称，目前户口不是就业等的前置条件，所以一些居民去外地长期就业也没有把户口迁走，另外，由于现在动态的信息采集还不完善，所以人口流动的信息很难掌握，“户随人走”的户口迁出政策实际操作也存在难度。《意见》提出，严守人口总量红线，积极推动“人随功能走、人随产业走”，不断降低中心城区人口密度。到2020年，全市常住人口控制在2300万人以内，城六区常住人口在2014年基础上下降15个百分点左右。加快建设全市实有人口和常住人口动态监测平台，为城市管理和人口调控提供支撑。分类完善劳动就业、教育、收入、社保、房产、信用、卫生计生、税务、婚姻、民族等信息系统，逐步实现跨部门信息整合和共享。// Source: Xinhua, 20 September 2016.

Prof. Lu Jiehua (陆杰华) from the Peking University explained why the conversion from agricultural account to non-agricultural account has not been so attractive to the holders of former type because they do not want to relinquish the benefits associated with the account if the new resident account does not give similar package of social benefits.

• //“这就在于制度设计。”陆杰华说，从现实来看，尤其北京的农民不愿意农转非。好多人到城镇打工，包括大学生到城市里上大学，都不愿意迁户口，就是因为觉得宅基地和责任田是农民固有的优势，如果没有对等的权益补充，可能也不愿意放弃。“户籍制度的改革，重要的是城乡的福利能否逐渐趋同”，陆杰华说，不是把农民户籍改成居民，换一个“马甲”就行了，很重要的是这个“马甲”能带来什么。“这其实就是农民在农转非过程中的期望，他期望得到什么，这是下一步改革需要关注的。”陆杰华说，当然农民的利益诉求不可能无限制的，政府和农民要寻求一种合理路径，利益的补偿要对等。//Source: New Beijing News, 20 September 2016.

Prof. Zhu Lijia from the Chinese Academy of Governance praised the plan as an important step to overcome the city-rural divide. He also points out that the reform could help monitor the movement of residents in and out of Beijing, offering a better support for city control and population management.

• //根据北京市出台的户籍改革实施意见，将建立城乡统一的户口登记制度，取消农业户口，统一登记为居民户口。国家行政学院教授竹立家表示，此次户籍制度改革是打破城乡户籍壁垒的关键一步，在公共服务均等化方面提供制度、政策上的保障，促进整个社会的公平正义。 […] 竹立家表示，北京由于土地价值较高，农业户口因为潜在的土地拆迁收益蕴藏较多“含金量”，“执行居民制度不是剥夺农民的财产，而是给予农民平等的身份，平等的待遇。农民的财富不但不会降低，还会保值增值，促进公平。”[…] 意见提出，２０２０年常住人口控制在２３００万人以内，城六区常住人口在２０１４年基础上下降１５个百分点左右。[…] 对此，汪玉凯表示，除了北京目前采取的以业控人、以房控人等举措，实施意见中一个值得关注的新办法是统筹整合各部门人口数据，加快建设实有人口和常住人口动态监测平台，为城市管理和人口调控提供支撑。// Source: Jie Fang Daily, 21 September 2016.

Below is the background of the reform of the household registration system since September 2013. For a thematic coverage of the reform on the household registration system, please find here prepared by Xinhua.

• //据了解，2000年，我国全面放开了县以下城镇的落户限制；2011年，全面放开了农民进入中小城市的落户限制；2012年，首次放开地级市户籍，部分大城市和特大城市户籍制度也在进行探索。不久前，广州市取消农业户口和非农业户口划分，统一登记为“居民户口家庭户”，引发人们对于户籍制度改革加速推进的猜想。此外，河北、辽宁、江苏、山东、重庆、四川、广西等10多个省区相继取消了农业户口和非农业户口的二元户口性质划分，统称为“居民户口”。有专家指出，一些地方户籍制度改革存在“空转”现象，即直接把农民的户籍变了，但并没有改变他们生产和生活居住条件，这样的户籍改革没有意义。北京大学中国地方政府研究院院长彭真怀认为，依附在户籍上的社保、医疗、教育、养老等问题不是公安部门和户籍制度本身能够解决的，户籍放开之后，更重要的是解决农民进城的问题，真正实现人的城镇化。[…] 户籍制度改革最终要实现城乡公共服务的均等化，还需要社保、财税、土地政策等一系列改革配套。在实际操作中，很多城市不愿意放开户籍还有现实的考虑，主要就是因为地方财力难以承担农民工市民化的高成本。[…] 因为农民市民化和土地财产权利挂钩，在重庆、成都等地的户籍改革试点中，出现了不少“逆城市化”的现象。一些农民工不愿意要城市的户口，甚至于很多原有城市户籍的人口，希望换成农村户籍，以分得田地，享受城镇化带来的红利。[…] 中国(海南)改革发展研究院院长迟福林建议，一方面要尽快剥离土地的社会保障功能，尤其是在农村土地得不到物权保障、不能抵押贷款的情况下，不能硬性要求农民工以放弃土地权利为代价来获得城市基本公共服务；另一方面要切实保障农民的土地收益权。在符合城乡土地规划的前提下，建立完善的农村土地使用权的转让、出租、抵押、入股的相关制度安排。// Source: Xinhua, 25 September 2013.

HONG KONG – POLITICS

1. Land development dispute in Yuen Long, the New Territories

The Legislator-elect Eddie Chu has been demanding rural leaders as well as the government an explanation for the scaling down of a public housing project in Wang Chau, Yuen Long, from 17,000 to 4,000 flats since the Legislative Council Election. The issue fomented after the election with a number of investigations into the case by mass media, questioning who made the decision to scale down the project and whether they are allegedly afraid of the rural interests involved in the project. More importantly, it is concerning whether any exchange of personal benefits between the top-level officials and the land-owning rural leaders in the government’s decision to scale down the public-interested project. The responses by government officials added mysteries to the case.

Apple Daily revealed that the Chief Executive set up a task force to deal with the housing project in question in conjunction with another project in Fanling. While the Chief Executive mentioned the involvement of the Financial Secretary as well as the Chief Secretary, both secretaries issued press releases to distance themselves from the project.

• //根據《蘋果》最新取得一份政府內部郵件，內容指明特首主動要求成立工作小組（high-level Task Force be set up），以估量（consider）及解決（iron out）與橫州及皇后山公屋發展計劃相關的事宜；與梁振英昨指工作小組只負責「協調」各政府部門的說法不同。信件又提到，特首欲親自主持第1、2次工作小組會議，並將首次會議日期定於「今個星期四」（this thursday），並註明是6月27日，估計有關信件在開會前數天才向部門發出。// Source: Apple Daily, 19 September 2016.

• //梁振英昨向傳媒解釋成立工作小組的原因，指橫洲及皇后山項目牽涉公屋發展及土地規劃，有關工作分由政務司和財政司轄下的的運房局及發展局等跨部門工作，故需由他親自作高層次統籌及協調。問及有否參與先興建4,000個單位的決定，梁未有正面回應，反引述本報早前披露的政府內部文件，指文件有列明項目細節由財政司長曾俊華擔任主席的土地供應督導委員會跟進，又刻意強調該委員會與自己無關；指當局會在幾日內整理資料，再開記招交代。[…] 翻查資料，土地供應督導委員會（前身為房屋用地供應督導小組）屬常設委員會，早於2010年成立，負責統籌全港土地開發和供應計劃。財政司長辦公室昨夜回 應事件，指自己也是特首主持的工作小組成員之一，惟從未出席有關會議；至於由他領導的督導委員會也沒決定將橫洲發展計劃以分期形式進行。政務司長辦公室晚上發稿，指林鄭月娥並非督導委員會或工作小組的成員。[…] 房委會資助房屋小組委員會成員黃成智坦言，任職小組成員及立法會議員多年，未聽聞會有公營房屋項目由特首親自督師，「好罕見……新界東北發展項目都未去到特首咁高層次，最多去到林鄭嗰個位」。// Source: Apple Daily, 20 September 2016.

Apple Daily revealed the government’s internal documents relating to the housing project, which indicates that the scaling down of the project was due to the opposition from the local force and the result of a few “soft lobbying” with them.

• // 《蘋果》今次取得的文件，屬政府內部就全港所有土地規劃及房屋事宜的進度報告，內容會定期更新。《蘋果》比對2014年及2015年的版本，發現文件在房屋署的意見前刪走「基於游說結果」的字眼，疑是欲撇清政府縮減發展規模的決定與鄉事壓力的關係。在文件於2014年8月的寫法，是「房屋署基於游說結果（given the outcome of soft lobbying），認為除非政府檢討露天貨倉用地的安置政策，否則第2及第3期的發展在短至中期都難以推展」；至於在2015年4月的版本，關於橫洲的內容大致不變，但就特別刪走了「基於游說結果（given the outcome of soft lobbying）」的字眼。文件證實政府是礙於鄉事在棕土上的業務利益而暫時縮減發展規模，但同時證實了政府一直都有將橫洲計劃分3期發展的打算，在文件中亦稱鄉委會「支持第1期公屋發展」；不過在提交元朗區議會的主文件中，政府卻未有使用此稱呼，只簡單稱作「橫洲研究」，令一眾區議員均以為政府已擱置其餘期數的發展計劃。// Source: Apple Daily, 17 September 2016.

Following the public pressure, the Chief Executive agreed to hold a press conference to explain in greater details about the housing project controversy in Yuen Long. For the Questions and Answers by the Chief Executive and the Financial Secretary, please see here by SCMP.

• //Chief Executive Leung Chun-ying has said that he made the decision to conduct the controversial Yuen Long housing project in separate phases, after the housing bureau suggested it to him. Leung turned emotional as he left a press conference on Wednesday, hailing the work of the government to provide more public housing. He said he chairs weekly meetings with the three top government officials – Chief Secretary, Financial Secretary and Secretary for Justice – and housing is one of the issues discussed. In a meeting on January 27, 2014, the Transport and Housing Bureau reported to him that rural leaders strongly opposed building 17,000 units in the Wang Chau area. He said the relevant departments suggested it would take time to handle the brownfield site – a piece of land for the potential 13,000 units which had been turned into a car park by a rural leader. Therefore, the Housing Bureau suggested building Phase One – involving 4,000 units- and delaying the other two phases of 13,000 units. He said the relevant departments suggested it would take time to handle the brownfield site – a piece of land for the potential 13,000 units which had been turned into a car park by a rural leader. Therefore, the Housing Bureau suggested building Phase One – involving 4,000 units and delaying the other two phases of 13,000 units. […] There were four informal meetings – three with rural leaders and one with two pro-democracy district councillors – over the project. According to Leung, the decision to delay the second and third phases was made after two “soft lobbying” sessions with rural leaders. He denied that his decision was influenced by opposition from rural leaders, and said he did not take part in any talks or lobbying activity with people outside government.// Source: HKFP, 21 September 2016.

Background of the land development in Hong Kong provided by Prof. Richard Wong indicates that the development of rural land involves the commercial interests of landowners who can now use the brownfield sites to operate recycling and cargo storage business:

• //In 1899, when the British took over the New Territories, they chose to recognise the rights of the 100,000 or so indigenous inhabitants with regards to land use, land inheritance, and marriage laws. Arrangements were made for residents to prove ownership and be given title to their land registered under the Block Government Lease. These leases did not allow the land to be built on or converted to other uses without permission. But in the 1970s, when the government adopted a policy to build satellite towns and public housing estates and needed more land, the Letters A and B schemes provided a market-oriented mechanism through which government could tap middlemen and market forces to facilitate agricultural land conversion and sales. The Small House Policy also provided a form of compensation to the inhabitants. Subsequently, in the 1980s, there was demand for vacant land for parking container boxes in the New Territories following China’s opening. The indigenous villagers obliged. Despite legal challenges by the government, the Court of Appeal ruled that agricultural land under the Block Government Lease could be used for any purpose that did not require a building. The court decision had a knock-on effect on the land use conversion premium for agricultural land in the New Territories because the land now had a demonstrated commercial use. Getting the government and villagers to an agreed settlement on the premium became far more difficult without a change in government attitudes towards compensation for agricultural land that already had an accepted alternative commercial use.// Source: SCMP, 20 September 2016.

One of the issues involved in the saga is the alleged rivalry between the Chief Executive C. Y. Leung and the Financial Secretary John Tsang. Background about the two political figures are documented by SCMP below:

• //Chief Executive Leung Chun-ying, 62, had risen to prominence quickly in the business world after graduating from Bristol Polytechnic. Upon his return to Hong Kong in 1977, he worked at British real estate firm Jones Lang Wootton and by the age of 30, was the vice-chairman of the company’s branch in the city. His first prominent role in politics came in 1988 when the then 34-year-old was named secretary-general of the Basic Law Consultative Committee. After the handover, he was appointed as an executive councillor and later became convenor of the cabinet. On November 28, 2011, Leung officially announced his bid for the chief executive post, which he won after defeating early favourite Henry Tang Ying-yen. In contrast with Leung who had not worked in the government before taking up the top job, Financial Secretary John Tsang Chun-wah has had a long career in the civil service. Tsang worked in the United States’ Boston Public Schools before returning to Hong Kong in 1982. As a member of the Administrative Service, he took on a number of civil service posts. After the city’s return to China, Tsang, 65, served as director-general of the Hong Kong Economic and Trade Office in London, among other positions. The veteran civil servant has been financial secretary since July 1, 2007. […] Even before the Wang Chau saga, Tsang was widely compared with his more staid, and sometimes bellicose, boss. But he has long been reluctant to give the impression of his being at loggerheads with the city’s leader.// Source: SCMP, 21 September 2016.

2. Occupy students received no immediate jail term after the prosecutors’ bid

• //Eastern Court magistrate June Cheung Tin-ngan spared jail for newly elected lawmaker Nathan Law Kwun-chung and student activists Joshua Wong Chi-fung and Alex Chow Yong-kang last month after finding them guilty. But reviewing her ruling yesterday, prosecutors argued that the only suitable option should be immediate custodial sentences. Refusing to jail the trio, Cheung said she had considered all the grounds put forward by the prosecutors in her earlier ruling. Supporters burst into cheers and applause as soon as they saw the three walk free from Eastern Court. Cheung had sentenced Wong, 19, and Law – both key figures in the 2014 Occupy protests – to 80 and 120 hours of community service respectively. Chow, 25, another prominent student leader of the movement, was given a three-week jail term suspended for one year. The trio were found guilty of taking part in an unlawful assembly and inciting others to take part in the protest on September 26 two years ago. But deputy director of public prosecutions David Leung Cheuk-yin SC on Wednesday argued that an immediate jail term would be required as the trio’s act was premeditated and they had shown no genuine remorse. Citing past cases, Leung drew a parallel with an illegal assembly involving triad members with dyed hair and identical T-shirts. But Cheung said: “The prosecution would agree that triads aiming for their own benefit would be different from students pursuing idealism?” Wong, Law and Chow stormed the east wing forecourt at government headquarters – popularly known as Civic Square – with others in a radical protest that was the immediate catalyst for the 79-day Occupy protests.// Source: SCMP, 21 September 2016.