China Reform Monitor: No. 1196

December 8, 2015 Joshua Eisenman

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November 11:

State-backed Chinese Overseas Ports has taken control over Pakistan's Gwadar Port free-trade zone, positioned near the Strait of Hormuz at the entrance to the Persian Gulf 120km from the Iranian border. Under the 43-year lease agreement, China plans to make Gwadar a sea transportation hub as part of the $46 billion China-Pakistan Economic Corridor (CPEC) scheme and build a 3,000km railway linking Gwadar to Xinjiang. China imports most of its oil from the Middle East, which passes through the Malacca Strait in Southeast Asia. Gwadar is expected to cut shipment times by 85% and expand Pakistan as a market for Chinese goods. Since terrorism remains a concern, Pakistan is forming a special security force of 10,000-25,000 men to protect Chinese workers at Gwadar, the reports.

State Councilor Yang Jiechi addressed over 400 government officials, entrepreneurs and scholars from China and 26 African countries at the opening ceremony of the Second Forum on China-Africa Local Government Cooperation in Beijing. The two-day forum included three sub-forums focusing on "energy resources development and industrial cooperation," "infrastructure and local capacity building," and "agricultural and marine economy and local cooperation." Representing African delegates, Saviour Kasukuwere, Zimbabwe's minister of local government, rural and urban development and a member of Robert Mugabe's ruling ZANU-PF, said: 'Africa should learn from the Chinese development model," and praised China's infrastructure construction, preferential loans and technical training. Kenya's Michael Munyao called for more technology transfer, hospital construction, railway maintenance, and more education and scholarships for African students, the official Xinhua reports.

November 12:

Over the past two weeks the official PLA Daily published five commentaries calling for the military to obey the party. The commentaries suggest that chairman of the Central Military Commission 's military reform and personnel cuts are meeting resistance from vested interests within the military. "Our military has endured several rounds of streamlining and restructuring since the 1950s, with one million personnel cut in 1985 and every time, all officers and soldiers obeyed. Today, despite the great changes in social context obeying the party's command and central leadership's order is still the army's most valuable spirit," read the fifth commentary. In September, as part of Xi's push to turn the army into a nimble and modern force on par with the U.S., he announced cuts of 300,000 troops (including 170,000 officers), reducing the force to two million by 2017, the South China Morning Post reports.

November 13:

Since China launched a new counter-espionage law in November 2014, local security officers in Sichuan arrested four employees suspected of leaking confidential information on an unnamed State-owned defense company to overseas spy agencies,the official Global Times reports. Meanwhile, security authorities in Jilin and Hainan have both launched counter-espionage hotlines for citizens and organizations to report suspected espionage.

November 14:

Lu Hao, governor of , is widely believed to be a protégé of President Xi Jinping being groomed for power. Born in 1967, Lu is the youngest of China's current provincial governors and the youngest full member of the CPC's 370-member Central Committee. He is a member of what party officials call the "sixth generation" of leaders – the first having been led by Mao Zedong, with Xi representing the fifth generation. Other future leaders include , Lu's predecessor as head of the Communist Party youth league, who is now the party boss of Guangdong, and , the party chief of Chongqing. Another rising star, Su Shulin, was removed last month as governor after being snared in a corruption investigation, the Economist reports.

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