Infrastructure spend and other policy signals for 2020

Reuters reports on one of several policy signals from Beijing in the last few days:  

China plans 800 billion yuan ($114.38 billion) in railway investment, 1.8 trillion yuan in highway and waterway investment and 90 billion yuan in civil aviation investment in 2020, state radio said on Thursday citing Minister of Transport Lǐ Xiǎopéng 李小鹏 as saying.

Li Xiaopeng is the son of the late, much-hated former premier Lǐ Péng 李小鹏.

Residence permit reform? Another new development: “China outlined plans late Wednesday to promote the freer movement of labor as authorities look to cushion slowing growth in the world’s second-biggest economy,” according to Bloomberg (porous paywall).  

The policy statement issued by the State Council [in Chinese], China’s cabinet, included a pledge to relax the country’s household registration (hùkǒu 户口) system, which has been criticized as discriminatory and a deterrent to urbanization. Authorities will also make it easier to move between employers and improve incentive systems aimed at encouraging workers to go to less developed regions.

These are the latest in a slew of policy announcements Beijing has made in the final weeks of 2019 after President Xí Jìnpíng 习近平 led a December meeting of top officials to plan out the coming year’s economic priorities. The readout from that conclave signaled both an aversion to broad-based stimulus and an emphasis on spurring “new drivers of growth” through reform…

The steps outlined by the State Council would eliminate the hukou system in cities with less than 3 million residents and relax it in cities with populations of 3 million to 5 million. For cities home to more than 5 million, such as Beijing and Shanghai, the household registration system will be simplified, it said, without giving details. These steps mirror policies released by the National Development and Reform Commission in April [in Chinese].

Will it actually happen? There has been talk of reforming or eliminating the hukou system since the 1990s, so we can expect implementation to be slow and problematic: Local governments may not like the possible increased burden on social services as rural residents move to cities. There does, however, seem to be a more concerted effort by the government to actually do something in the coming year.

Finally, China is planning a new push to reform state enterprises, “with an aim to improve the performance of the sector and create world-class champions,” according to Bloomberg (porous paywall):  

The plan will tighten how the performances of state firms, often referred to as SOEs, are evaluated, and also seek “new breakthroughs” in introducing more strategic private-sector investors.

This sounds like a story I first read in the China Daily in 1995. I must have read comments along the same lines from government officials every year since then.