CCDI Plenum Communique; Big Data and anti-corruption work; Trouble for economist Gao Shanwen; Expansion of trade-in subsidies

Summary of today’s top items:

1. CCDI Plenum Communique - The absence of a mention of specific sectors in Xi’s public speech Monday to the CCDI Plenum was not a sign that the corruption crackdown in sectors like finance and energy has peaked. The communique for the Plenum calls on officials to “maintain unrelenting efforts to punish corruption, severely investigating cases in which political and economic issues overlap, focusing on finance, state-owned enterprises, energy, firefighting, tobacco, medicine, higher education, sports, development zones, engineering and construction, and bidding and tendering 着重抓好金融、国企、能源、消防、烟草、医药、高校、体育、开发区、工程建设和招投标等领域系统整治”. The 2024 CCDI Plenum Communique called for deepening the “rectification of corruption issues in finance, state-owned enterprises, energy, tobacco, pharmaceuticals, infrastructure projects, and bidding and tendering 深化整治金融、国企、能源、烟草、医药、基建工程和招投标等领域腐败问题”. So firefighting, higher education, sports and development zones are a new area of focus.

The Communique lists eight key tasks for the next year:

1. Reinforce political oversight around the major decisions adopted at the Third Plenary Session of the 20th CPC Central Committee, striving to further deepen reforms and ensure steady, long-term progress in Chinese modernization. Resolutely uphold the Party Central Committee’s centralized, unified leadership over the agenda of further deepening reforms, stay aligned with the overall objective of reform and “seven focal points” as well as 13 sub-field objectives, refine the content of oversight, and prompt Party organizations at all levels to concentrate on reforms and ensure real implementation;

2. Consolidate and deepen the results of Party discipline study and education, fostering a strong atmosphere of compliance with discipline and dedication to public service…;

3. Improve the mechanism for simultaneously investigating and rectifying misconduct and corruption, promoting integrated efforts against undesirable conduct and corruption…;

4. Continuously deepen the rectification of misconduct and corruption at the grassroots, ensuring that the fruits of reform and development more equitably benefit the general public…;

5. Uphold the political nature of inspections, focusing on identifying and effectively addressing problems through inspections…';

6. Deepen the implementation of discipline inspection and supervisory system reforms, contributing to improving the system of Party self-revolution institutions and regulations…;

7. Strengthen the political responsibility for comprehensive and rigorous Party self-governance, ensuring that the strict governance tone remains consistent to the end…;

8. Conduct a “Year of Building More Standardized, Law-Based, and Regularized Discipline Inspection and Supervision Work” campaign, driving the construction of an even stronger “iron army” in the discipline inspection and supervisory ranks.

2. Big Data and anti-corruption work - One of the themes from the propaganda work around this year’s CCDI Plenum, and the communique, is the use of big data and AI to probe officials and their potential links to corrupt activities. Given everything is now digital, and given how the PRC mastered the science of contact tracing during the COVID-19 era, it should be much easier to find corrupt officials, but it only works systematically if any and every official can be probed like this. The communique calls on officials to:

Through “joint rectification,” eliminate common roots of misconduct and corruption. Strengthen early warning and oversight of leading officials whose spouses, children, or children’s spouses run businesses in violation of regulations; establish a mechanism for Party committees to lead political ecosystem analysis in coordination with discipline inspection agencies and other relevant departments; improve the joint punishment mechanism for key bribe-givers. Formulate a three-year action plan (2025–2027) for building a clean and honest culture in the new era; tell the story of China’s fight against corruption. By integrating “investigation” and “rectification,” halt the progression of misconduct into corruption. Develop an opinion on promoting the combined investigation and rectification of undesirable conduct and corruption, and adopt data-enabled, IT-driven approaches for improving discipline and anticorruption efforts.

3. Economist Gao Shanwen in trouble - According to the Wall Street Journal Gao Shanwen, chief economist of SDIC Securities, is banned from speaking publicly after making comments about China’s GDP and economic policy on a recent trip to Washington DC that went against the official line. I saw Gao at a non-public roundtable with his group the day after this PIIE meeting. He spoke but not much, the rest of the delegation was fairly candid, no one seemed confident the policy measures to date are adequate. This kind of punishment for speaking about economic data and policy just makes it harder for anyone paying attention, inside or outside China, to have confidence in the policy direction.

4. Expansion of trade-in subsidy consumption stimulus - The program now includes twelve categories of goods, from the original eight. The four new categories are dishwashers, water purifiers, microwave ovens, and rice cookers. According to Yica “individual consumers purchasing energy-efficient and water-saving products from any of the 12 categories -- including refrigerators, washing machines, televisions, air conditioners, and computers -- can receive subsidies of 15 to 20 percent of the product price. Consumers are eligible for one subsidy per product category, with a maximum subsidy of CNY2,000 (USD273) per item”. At the press conference announcing the expansion an NDRC official also confirmed that the government will “raise fiscal funds from selling ultra-long special treasury bonds to support durable consumer goods trade-ins and large-scale equipment upgrading in 2025”, but the amount will not be officially announced until the Two Sessions in March. This seems more like tweaking than any meaningful additional stimulus?