Will Xi’s ‘Zhejiang Clique’ dominate the top echelon of power? Plus overcapacity corruption challenge and record travel numbers

BUSINESS

Corruption in the provinces is hindering Beijing’s efforts to push heavy industries to cut back on excess capacity

Graft involving local officials is proving problematic to China’s attempts to reform major industries that are dragging down the economy. In one case announced this week, an official in Hebei Province was accused of diverting at least $6.3 million in state funds for laid-off workers through a scheme in which factories exaggerated how much production capacity would be trimmed. / WSJ

Moving money:

• China’s economic slowdown is stalling efforts to narrow the wealth gap among provinces and regions / The Economist

MORE IN BUSINESS:

• China’s property speculators head inland to seek bargains, but prices rise sharply in the process / Reuters
• The Japanese yen offers lessons for China on how difficult it can be to rival the U.S. dollar’s status as a global reserve currency / Bloomberg
• China’s quantitative hedge funds are expanding rapidly throughout Asia amid restrictions at home and more Chinese wealth overseas / Bloomberg
• Samsung apologizes for the confusion in China over exploding Galaxy Note 7 smartphones, but insists that initial reports of battery fires were false / WSJ

POLITICS

To further cement his power, Xi tries to undercut a rival group’s role in China’s top ruling body, sources say

Ahead of next year’s meeting that could determine who leads China after Xi Jinping, Xi is trying to stop the Communist Youth League faction from having a majority on the Communist Party’s Standing Committee, and instead populate it with people loyal to him, anonymous sources close to the Chinese leadership said. / Reuters

A purer party?

• A former Communist Party chief of Guangzhou is sentenced to life in prison for corruption in another apparent victory for Xi Jinping’s anti-graft efforts / Reuters
• Opinion: A corruption scandal in China’s national congress shows the institution’s lack of relevance and need for reform / ChinaFile

MORE IN POLITICS:

• Forty years after Mao’s death, his renewed popularity among militant leftists poses a threat to the country’s stability / Financial Times
• Pakistan’s Gwadar port will be a key project for China’s new Silk Road despite the challenges posed by mountains, rebels and territorial disputes / Bloomberg
• Hong Kong’s South China Morning Post has been subject to years of pressure from Beijing, even well before Jack Ma bought the paper / NPR
• A new government website offers a view into the Chinese legal system with live streaming of court trials / BBC News
• Three Chinese fishermen die in a boat fire after South Korean coast guard officers confront them with flash grenades / Reuters

SOCIETY

The weeklong National Day holiday will see almost half of China’s population hitting the road

A record 589 million Chinese are expected to travel domestically and abroad during the period surrounding the October 1 National Day, an increase of 12 percent over 2015. / Fortune

MORE IN SOCIETY:

• Food security, efficiency and rural income levels are key areas of focus in China’s plans for a $450 billion agricultural overhaul / Grist
• Official’s claim of spike in maternal mortality rates sparks concerns about ‘old mothers’ trying for a second child following repeal of the one-child policy / The New York Times
• English-speaking nannies and maids from the Philippines are in demand among China’s wealthy, but visa restrictions have created a thriving black market / Financial Times
• Opinion: Ubiquity of smartphones and drama in China helps documentary filmmakers do quality work, despite small audiences and media controls / The Economist
• With mainland cities overtaking Hong Kong as leaders of Chinese culture and business, the power of Cantonese pop music fades / AsiaOne
• Opinion: Electronic music finds millions of fans through new festivals in Beijing, Shanghai and beyond / Billboard
• A Dutch designer debuts the ‘Smog Free Tower’ in Beijing, capable of filtering a football stadium of air per day / CNN
• As dog ownership in China skyrockets, with 62 million now kept as pets, pressure grows to end consumption of the animals / TIME