Unlike U.S. holidays, many of China’s holidays are fixed to the 1^st day of a month. This may be related to China’s culture of “An hour in the morning is worth two in the evening,” and “The whole year’s work depends on a good start in the spring.” Anyway, the beginning of anything is very important and valuable in Chinese culture. So, May 1 is China’s Labor Day holiday; June 1 is Children’s Day; July 1 is the Chinese Communist Party “birthday;” August 1 is the Chinese Army’s “birthday;” and October 1 is China’s National Day holiday.

Many people in China and abroad were quite shocked by the way the Xi Jinping government celebrated the July 1 Party birthday. On June 30, the front page of all major Chinese newspapers published headline news something like this: China’s ruling party said there will be no tolerance of corruption in the Party and the military, no matter how high ranking an official may be. This came right after a top-level military general was kicked out of the Party on the eve of its birthday. The Political Bureau, composed of the 25 most powerful people in the country, expelled Xu Caihou from the Party for corruption. This is actually a little reminiscent of how Mao and Deng handled matters and shows that the new Xi government is indeed determined to fight corruption.

Xu, 71, former vice-chairman of China’s Central Military Commission, is the highest military leader investigated since China’s reform and opening-up in 1978. Importantly, he is also the second former member of the Political Bureau of CPC Central Committee investigated for corruption – the first being Bo Xilai, former Party chief of Chongqing. According to the political bureau, Xu accepted bribes related to promotions, and accepted money and gifts illegally.

Beijing also celebrated this year’s Party birthday with a Political Bureau announcement that three senior officials were being expelled from the Party — Jiang Jiemin, former head of the State-owned Assets Supervision and Administration Commission of the State Council; Li Dongsheng, former vice-minister of Public Security; and Wang Yongchun, former Vice General Manager of China National Petroleum Corporation. Based on the many emails and messages that Mr. Gu received by WeChat, the Chinese people’s reaction to all this is really very positive. They seem to be more confident that Mr. Xi’s government can really do a better job of cleaning up government. If so, it is really encouraging news for those who wish to do business in China in a fairer competitive environment. Let’s keep our eyes open and see.

Mr. Gu just returned home from China last week. He visited Beijing, Chengde, Tianjin, Shanghai, Ningde in Fujian Province, and Fuzhou, Capital of Fujian. He reported that many Chinese companies, state owned and private, are doing better than when he last visited. Also, we believe that more and more Chinese buyers are really looking more at value instead of only price. And on the supply side they are increasingly competing with design and engineering capability to produce higher quality products. For example, a privately owned company that Mr. Gu visited in a small city, Ningde, Fujian Province, comes to the US every year to participate in the huge PowerGen show and has in fact already sold several million dollars in products to U.S. power equipment companies. Although there is a growing problem with labor shortage, the cleaner government environment and investment system will help many companies in China to grow this year.