China Reform Monitor - No. 1273
China targets ROK over THAAD deployment;
Beijing still battling capital flight
March 13, 2017
President Xi Jinping has been moving to tighten his grip on power ahead of the upcoming leadership reshuffle at the 19th Party Congress, when several Politburo Standing Committee members are due to step down, the South China Morning Post (SCMP) reports.
He Lifeng, a close associate, has been appointed to lead the National Development and Reform Commission (NDRC), a powerful state agency in charge of economic policy planning. There has also been a spate of leadership and personnel changes at the justice and commerce ministries. Zhong Shan, former deputy governor of Zhejiang under Xi, is the new Minister of Commerce (Mofcom), SCMP also reports. Zhang Jun, 61, a deputy of the party's anti-corruption watchdog, was appointed Minister of Justice. Zhang has worked under Xi's anti-graft chief Wang Qishan since 2012, and previously served as deputy director of the Supreme People's Court. He becomes the fourth Wang protégé to be appointed as a minister. Earlier this month, SCMP reported that Beijing mayor and longtime Xi ally Cai Qi was named to head a high-level military reform leading group. Cai is likely to be promoted to a top politburo post later this year.
The crackdown on capital flight announced late last year has delayed or even stopped the majority of large Chinese overseas transactions, the Financial Times reports. Even state-owned enterprises are having trouble getting money offshore. Already-approved pending buyouts are also being "re-evaluated" forcing companies to go back and review acquisitions that have already been approved. State Administration of Foreign Exchange, has not rejected any deals, but has delayed them by requiring re-evaluation by the NDRC or Mofcom. Regulators are increasingly concerned about the amount of money being moved overseas. Chinese companies have announced 14 cross-border transactions worth more than $100 million each since the start of the year.
Chen Xiaoyan, a Chinese woman with close business ties to Beijing, bought a $15.89 million four-bedroom, 5 1/2-bathroom, 4,164-sq. foot penthouse at Trump Park Ave. (a.k.a., 502 Park Ave.), from President Trump in an off-market, private purchase on February 21, the New York Post reports. Although Trump has removed himself from the board of directors of Trump Park Avenue LLC, which sold the unit, he remains the owner of the LLC. Chen, who currently lives in a fifth-floor Trump Park Avenue unit that she bought for $3.6 million, is the founder and managing director of Global Alliance Associates (GAA) which, according to its website, "opens the right doors to China." "For a highly select clientele, our China Strategy Group facilitates access and establishes critical strategic relationships with the most influential public and private decision makers. We help assure our clients of a smooth and efficient transition into China by putting them in direct contact with key decision makers."
The persecution of Christians and other religious groups in China has "intensified" since Xi Jinping came to power in 2012, according to a Freedom House report. The group estimates that a third of all religious believers in faith groups in China face "high" to "very high" levels of persecution ranging from harassment and economic exploitation to harsh prison terms and violence. "The scale and severity of controls over religion, and the trajectory of both growing persecution and pushback, are affecting Chinese society and politics far beyond the realm of religious policy alone." Freedom House found that 60-80 million Protestants in China have been affected by cross-removal and church-demolition campaigns, punishment of state-sanctioned leaders, and the arrest of human rights lawyers, FOX reports.
A range of Chinese actions have been taken to punish Seoul over its plans to install the U.S. Terminal High Altitude Area Defense (THAAD) missile-defense system. Beijing travel agencies can no longer arrange trips to South Korea amid a clampdown by the China National Tourism Administration posted travel tips that urged Chinese tourists to carefully consider "the risks of outbound travel" when considering trips to South Korea. Chinese travelers are a major and growing source of tourism revenue for South Korea. South Korea's fifth-largest company, Lotte, has had its website downed by cyberattacks after providing land for the military facility. Lotte also faces a consumer boycott in Jilin Province, where protesters last weekend unfurled a banner at a Lotte Mart store saying "Lotte supports THAAD, get out of China immediately." Last month, the company was forced to halt construction of a $2.6 billion theme-park project in northeastern China after authorities discovered safety problems, Taipei Times reports.