IT turned cold in Guangzhou last week - and how glad I am to be able to catch a brief period of the cold part of a year of seasonal change. Just as the novelty disappears and the colder (but not quite) winter climate becomes a pain in the behind to live with, we fly to Bangkok and spend our winter in the tropics.

December 5, 1990. That's the date I received my first PRC business license. It is the day I consider as the start of life on this, the Asian side of the Pacific. I first came to Thailand a few years after that but it was not until recently, just a few years back, that we decided to make Bangkok a more integral part of our lives. I grew up in Brooklyn, New York, envious of the old farts who abandoned NYC during the winter for Miami, Florida. To put it simply: a few years ago, Bangkok became our Miami! Life is vertical, now that we've eliminated east-west travel from our lives - that two time zone difference between Thailand in the south, the Pearl River Delta (Guangzhou and Hong Kong) as our home base and visits to family in Japan (and live baseball games!!!) makes jet lag a thing of the past. And as I have ‘gentrified' over the years where my travel patterns have changed, I've kept up on the tax scene in those areas I live in or visit.

China's my home. I established residency there before I even started living in Hong Kong. True, Hong Kong gave me an unparalleled flexibility of life which I was able to obtain through the seven year process of permanent residency. This makes a very big difference insofar as the type of visa I get for being in China. But I have actually ‘lived' in Hong Kong on a part time basis for all these years. I probably qualify for some sort of record, having rented the same 275 square feet of space in Hong Kong for 22 years. I like coming into Hong Kong. It is really a thrill to set sight upon Victoria Harbour after an absence. Yet after 8 - 10 days of life in Hong Kong, it is even more exciting to get the hell out of there and happily go back to Guangzhou. If life in China is an acquired taste, then after a quarter of a century, I've certainly acquired it!

We know the worldwide economic news - it stinks! We're in (and have been in for a half-decade) an international depression, only no one wants to recognize it as such. Regardless - and just possibly because of this - it is wonderful to be reading about the developing blueprints for the 13th Five Year Plan (2016-2020) of the People's Republic of China.

I started following the five year plans way back when the 9th Five Year Plan was being introduced (O.K. - if you are truly interested, then count back, yourselves - find the year on your own!). I quickly discovered that the economists piecing this together were very, very serious; that the five year plan economic blueprint was religiously followed - and that says a lot, coming from an ethical existential cynic like me! The 12th Five Year Plan, a half-decade ago, introduced the three new Pearl River Delta economic zones of Guangdong Province and I wrote about how Guangdong was given this special status within that plan. I followed other aspects of the 12th plan and found it quite informative in trying to understand the economic direction that China is taking. I know, I know, this article should be more focused upon tax yet if you are going to try to understand the direction China is taking, look at far more about the economy than just tax. The economic policy the country takes will force the tax modifications that most assuredly will follow.

Thus, I am going to devote the balance of this article to the 13th Five Year Plan of the People's Republic of China, a plan that is just around the proverbial corner…..

My first comment is that all economic development forthcoming from Beijing is going to be centered around four basic factors that will impact the next generation of the Chinese economy:

a)  Corruption. Xi Jinping is very, very serious about changing thousands of years of corruption. Can this be done? Will his actions last beyond Xi's current and next term of office? The whole world (with the exception of Singapore, perhaps) is, alas, corrupt. Some peoples, some cultures are capable of using more finesse in masking their corrupt exploits as human greed discovers ingenious ways to work around the law as corruption is corruption is corruption and will be here to stay Yet Xi seems to be setting a course that will reduce (not eliminate) that grease that seems to make those broken wheels work the way you want them to. India, take note: If China can do this, you, most certainly, can do so, too!!!

b)  The Asian Infrastructure Investment Bank. The IMF and World Bank are no longer going to be the only game in town. China started something here that can be politically self-serving and simultaneously of value to Asia (and Africa!!) in infrastructure development. Quite frankly, the U.S. blew it, here, in a major foreign policy blunder, by not joining and appearing to block it, instead. Let us see the sort of example China sets in making this bank work.

c)  One Belt - One Road. Once, a long time ago, there was the Silk Road. Later, there was the Trans-Siberian Railway. Way before that, China was a maritime power, going out, by sea, throughout Asia and Africa. And now there is a new commercial initiative - by land (i.e. rail - Chinese developed, of course) from Asia to Europe and by sea from that long, vast Chinese coast, to all parts of the world. Logistics technology during a depression? It's happening in China for both rail and maritime - and the Chinese can afford to do the financing for those desirous of new infrastructure. Does anyone have truly competing technology as up-to-date as that being developed nationwide throughout China?

d)  BRICS. China has far more to gain from maintaining close economic development ties with it's theoretical economic counterparts in the emerging economic world than you can ever imagine. Brazil, Russia, India and South Africa, as a bloc, with China, presents some interesting alternatives to dealing with Europe or the U.S. There are simply too many areas of political commonality amongst BRICS. Will there be more cooperative effort? Only time will tell…..

So… here we are, ready to review the broad blueprint. Credit is due to China Daily's 4 November 2015 edition (which, in turn, came from People's Daily) which thoroughly covered the plan, listing 32 categories where the central government has stated in broad generalities the areas it will involve itself with over the next half-decade. How did they determine the order of the 32 categories? Good question! I'll be damned if I know the answer but I'm going to comment upon about a third of them - writing the explanation exactly as the government-written explanation with some additional comments, strictly my own opinions. I'm listing those ‘meaningful' to me in the order of their issuance by the government:

#3 Competition to be further improved in national monopoly sectors, including electricity, telecommunications, transportation petroleum natural gas and public services.

Does this mean privatization of some State Owned Enterprises? Probably. Remember, these privatizations should help finance the social security network China needs to develop. If you are an investor, then this is an area you want to follow.

#6 New-style professional farmers to be nurtured. Reform of the rural land system to deepen the orderly transition of land operational rights promoted.

Is this a new attempt at big agri-business in China?

#7 Most-stringent policies to be adhered to for protection of cultivated land to boost capacity and ensure grain security.

Personally, I think this is more important than a #7 ranking! I don't feel the country has a good handle on the arable land it has that must be kept for farming rather than for development. This is all part of development of a national land registry which is not happening as fast as the central government would like - too much ‘local foot dragging' going on, so it seems…..

#9 Financial reform to be accelerated. The issuance and trading system for stocks and bonds to be improved.

Why anyone, in the past - or present, for that matter - would want to invest in China's stock markets is beyond me. But then, I've never been a stock market investor, anywhere, so my opinions should be taken here with less than a proverbial grain of salt. Still, if the SOEs are to go public, if the stock market is to be the vehicle funding the state's obligations as it cashes in its holdings, then there most be reform, accountability and viable due diligence. And that'll happen - at some point of time in the future (how distant the future is the real question!) a whole lot better now that the government has learned that it ain'tgonna be easy!

#11 Legal land use rights of farmers to be ensured, including those who work in the cities. Renovation of shanty-towns in cities to be speeded up.

Let us face it: rural China and rural India both have pockets of starvation that follows the exodus of rural dwellers from the countryside to the city. China will have better success at reducing shanty-towns than India. Will poverty ever be alleviated anywhere? I doubt it but I do feel that China will do a better job at improving living standards. India does need to do more - and India can do more.

#15 Audit system proposed for officials who leave their current posts, taking environmental protection into consideration. Officials' efforts to protect natural resources to form part of their performance appraisal.

It just so happens that today, the day I write this piece, is the worst polluted day of the year, thus far, in Beijing. Can officials be measured by how they've helped the environment, too? This will be an interesting thing to watch. Could something like this ever be done in Delhi? I agree with Mr. Modi's comments that the developed world has to assume more burden in changing the climate but India and China both have to make far more serious attempts at cleaning their respective environments.

#22 Increased investment from central and provincial governments to integrate various channels for poverty alleviation. Open up more financial channels to explore and combat poverty.

Personally, I feel that emphasis upon poverty elimination/alleviation should be a bit more highly rated than #22 but I am not the economic planner facing all the commitments that have to be faced - and never having faced a situation like this, I wonder how good I'd even be at it. Fortunately, I am not the one responsible for figuring out how to do this. Still, it will be interesting to view, five years from now, how successful this goal's implementation was during the ensuing half-decade. Improving overall quality of life - especially in rural poverty areas. How will it be done?

#25 Social insurance system to be improved to cover all residents living in China, legally. Insurance rates to be lowered to a reasonable level.

There was a bit of an outcry, last year, from non-Chinese who now had to pay into what they thought was an inequitable (at least, for them) social insurance system. Hey, you live in the US and you work? You've got to pay in. Same for virtually all places in Europe.So why not China? This is a system that will change.

#27 Policies to be issued on raising the retirement age progressively. Progress to be made on commercial old-age care insurance and occupational or corporate pension plans.

As the world grows older and people live longer, so must age of eligibility must rise to be actuarially correct. This is just a fact of life. What is not a fact is how this transition will be made during the next five years. Coordination of the entire social insurance net is something that will happen, although the stock markets have to be developed, first, so the eventual privatizations of SOEs to fund the system is dependent upon this.

#28 Full implementation of the supplementary health insurance program proposed for jobless rural and urban residents suffering from major diseases. Retirees who live at places other than their workplaces to have hospitalization fees reimbursed under basic health insurance.

There are two things that interest me, here: firstly, in order to do this, you are going to need a true, national program. How much progress can the PRC make towards this goal during the next five years? Next is the fact that all these programs are for minimum coverage. It will be interesting to see how private coverage develops in the area of health insurance as the domestic middle class had more need for this. I can definitely see development of Chinese-style HMOs in the future. The big question, though, is which are the countries China will follow as it develops its means of servicing the medical necessities of its citizenry?

#29 Advancing comprehensive reform of public hospitals proposed, ending the system used to seek profits. A personnel and remuneration system to be set up that is appropriate for the health industry.

This one obviously goes hand in hand with the other social insurance categories! I have used and I continue to use the hospital/medical system in China but I realize that it is ‘suspect' because it is medicine by ‘red envelope'. You give a red envelope with cash inside if you want better service - or in instances, service at all. Doctors go on big pharma paid medical educational trips (fancy vacations, at that!) and in-turn recommend the payer's product - it happens far too frequently in China and how it will change is going to be interesting to watch.

That's it - these are the Chinese areas of the economy and of economic implementation I want to watch over the next half decade. Tax reform will come, too. When? Sooner than you think. Of course taxes will change in order to cover the other areas of change.

I'm changing, too! My first tax and accounting article was published (in the U.S., in the Journal of Accountancy) in June, 1979. I'm planning for my last tax essay June, 2016: Over 300 articles in 37 years - enough is enough! Oh, I am by no means giving up writing: at age 73, I'm far too young for that! But there are other things I want to write about, other things I'd like to do with my life now that the mortgage has been paid and the final kid financed through university. So, my friends, there'll be six more months of your having to put up with my international tax diatribes… such is life…