On January 13, AmCham Shanghai held its first Monthly Member Briefing in 2015. James McGregor, Greater China Chairman of APCO Worldwide in China briefed on how Xi Jinping’s ‘New Normal’ is likely to reshape China’s economic, financial and legal landscape in the near future and how companies might best respond to changing behaviors in changing times.
In opening the event, Kenneth Jarrett, President of AmCham, reminded the audience that the Chamber was officially now in its Centennial year, given the Chamber’s founding in Shanghai in June 1915. He unveiled the logo specially designed for AmCham Shanghai’s 100th anniversary and highlighted a series of events in celebration of the Centennial. The new logo builds on the existing design and embodies the theme of connectivity between the United States and China by linking the two “0”s in the number 100.
In his remarks, McGregor mapped out the challenges President Xi Jinping and the Chinese government now face. Xi inherited an economic model that has run out of gas and faces an expanding middle class that expects clean air, safe food and a better future. In response, Xi is reaching into the traditional Chinese Communist Party toolkit for solutions, some of which involve boosting his leadership role. Anti-corruption and party rectification have been other areas of emphasis. Strengthening the sense of national unity in the face of so-called foreign exploitation has also been an approach used by Xi.
By paring anti-corruption campaign and economic reforms together, Xi aims to galvanize support from the masses in China to support a domestic agenda that will address China’s many challenges and enhance China’s influence abroad. According to McGregor, Xi wants China to follow its own path to modernization and good governance and not just adapt a path advocated by the West. The Party’s Third Plenum outlined an ambitious program of reform and the more recent Fourth Plenum placed a special focus on legal institutions and the constitution. McGregor predicted that the anti-corruption campaign would continue.
In an article that McGregor has in the current edition of the Chamber’s Insight magazine, he explains that the Communist Party is going to roll out policy initiatives “step-by-step, slice-by-slice”. At the January 13 briefing, McGregor expanded on that statement. Xi wants to mobilize “social capital” to address many of the country’s development needs. This would also put pressure on the state sector to operate more efficiently. Experiments with property tax models in support of local government coffers remain underway, the government has announced plans for deposit insurance and there have been outlines for the far-off RMB internationalization, summarized McGregor when citing some examples of economic reform programs.
Analyzing the ongoing anti-corruption campaign, McGregor stated it will be a part of the New Normal in Xi’s era. Emphasis on rule of law and nationwide judicial reform at all levels,, according to McGregor, point to an unprecedented emphasis on the Constitution. At the moment, the focus may be on attacking the symptons of corruption, but the ultimate goal is to cure the disease.