Politburo meets; Party turns 104; Involution and deflation; Wang Yi to Europe; WHO report on Covid origins; Dalai Lama
Summary of today’s Essential Eight:
1. June Politburo meeting - As I wrote in my note earlier today with the full translation the only disclosed agenda item was the deliberation of the “Regulations on the Work of the CPC Central Committee’s Decision-Making, Deliberation, and Coordination Bodies 党中央决策议事协调机构工作条例”. As the South China Morning Post wrote:
the new rules build on the broad regulations approved in September 2020 covering the operations of the party’s Central Committee, the Politburo and the Politburo Standing Committee.
Xie Maosong, a senior researcher at the National Institute of Strategic Studies at Tsinghua University, said the new rules would “complement” those endorsed five years ago.
“The 2020 rules chart the work of the upper political structures of the Central Committee, the Politburo and its Standing Committee. But there is a need to chart the work of the many commissions and leading groups working under them,” Xie said.
We have an ongoing chat about this announcement, it is great that we have so many smart people in the Sinocism community.
2. Politburo study session - The theme of the 21st study session of this Politburo was “efforts to advance full, rigorous Party self-governance through forging good conduct”. I translated the readout in full in the note I sent out earlier today. From the CCTV report on the meeting it looks like it was an expanded session, and Xi looks large and in charge, and sporting a new haircut.
The last two attendees shown in the CCTV segment before it closes with a shot of Xi are General Zhang Shengmin, Secretary of the CMC Commission for Discipline Inspection and a Deputy Secretary of the Central Commission for Discipline Inspection, and General Liu Zhenli, chief of staff of the Joint Staff Department of the Central Military Commission. Might that be a sign that PLA corruption and discipline issues were on the agenda?
3. The Party turns 104 - July 1st is the 104th anniversary of the founding of the CPC. According to the Organization Department there were 100.27 million Party members at the end of 2024, a little over 1 million more than at the end of 2023. 31 million members are women. When people talk about how much support the Party has in China, they should consider how many other people are dependent on each Party member; very quickly you are into the hundreds of millions of people.
The June 30th People’s Daily has a page one article titled “Always Be the Pillar of the Chinese People and the Chinese Nation”— Written on the Occasion of the 104th Anniversary of the Founding of the Communist Party of China 永远做中国人民和中华民族的主心骨——写在中国共产党成立一百零四周年之际”. The article states:
The great achievements of the Party and the people’s cause in the new era fundamentally lie in the leadership and guidance of General Secretary Xi Jinping and in the scientific direction provided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.
新时代党和人民事业取得伟大成就，根本在于习近平总书记领航掌舵，在于习近平新时代中国特色社会主义思想科学指引。
The facts speak for themselves: the “Two Establishes” are the most significant political achievement of the new era, the most valuable historical experience, and the most objective practical conclusion.* They represent the greatest certainty, confidence, and assurance for the Party and the people in confronting all uncertainties.
事实雄辩证明，“两个确立”是新时代最重大政治成果、最宝贵历史经验、最客观实践结论，是党和人民应对一切不确定性的最大确定性、最大底气、最大保证。
The July 1st People’s Daily has a page one editorial (社论) for the anniversary- Steadfast in Belief and Confidence, Marching Boldly on the Journey of Rejuvenation (Editorial) — Warmly Celebrating the 104th Anniversary of the Founding of the Communist Party of China 坚定信念信心 阔步复兴征程（社论）——热烈庆祝中国共产党成立一百零四周年. There is more on the “Two Establishes” and Xi as the core:
Over a century of hardship and glory, relentless striving in the new era, and adaptive transformation this year—all profoundly remind us: the centralized and unified leadership of the Party’s Central Committee is the foundation of our ongoing victories; the “Two Establishes” are decisive for confronting risks, challenges, and advancing Chinese modernization; with over 1.4 billion people united in thought and effort, nothing is impossible…
一百多年来的苦难辉煌，新时代以来的砥砺奋进，今年以来的应变求变，深刻启示我们：党中央集中统一领导是我们不断取得胜利的根本所在，“两个确立”对于我们应对各种风险挑战、推进中国式现代化具有决定性意义，14亿多人民心往一处想、劲往一处使，就没有干不成的事。
Looking ahead, time, situation, and righteousness all favor us. Regardless of how international tides shift, with firm belief and confidence—resolute in our own affairs and unrelenting in opening to the global stage—China remains the greatest certainty and stabilizing factor. Let us unite ever more closely around the Party Central Committee with Comrade Xi Jinping at its core, vigorously promote the great spirit of founding the Party, and produce new, outstanding results on this new journey.
面向未来，时、势、义都在我们这一边。无论国际风云如何变幻，坚定信念信心，坚定不移办好自己的事，坚定不移扩大高水平对外开放，中国就是最大的确定性和稳定因素。让我们更加紧密地团结在以习近平同志为核心的党中央周围，大力弘扬伟大建党精神，在新征程上交出新的更加优异的答卷。
It sure does not sound like Xi’s position is in doubt, fever-dream rumors notwithstanding.
4. Involution and deflation but not overcapacity - Over the weekend the People’s Daily ran a front page commentary titled "Achieving High-Quality Development by Eliminating "Involuted" Competition" by "金社平" about fighting involution. The author walked right up to but could not quite say “overcapacity”:
Behind “involution” lie several key contributing factors. One is the temporary mismatch between supply and demand. Rising uncertainty in the external environment and insufficient effective domestic demand have led to a prominent oversupply problem, intensifying industry competition and, to some extent, fueling “involution.”
“内卷”背后，有阶段性供需错配的影响。外部环境不确定性增加，国内有效需求不足，供大于求矛盾凸显，加剧了行业竞争，一定程度上助推了“内卷”。
5. Auditor finds local governments behaving badly - Although the National Audit Office (NAO) found that only about 1.5% - 60 Billion of 4.1 Trillion RMB - was used “improperly”. According to Caixin:
The most serious case involved the misappropriation of around 40.6 billion yuan in basic pension funds across 13 regions, with the money misappropriated for various purposes, including government debt repayment and the so-called “three guarantees” — ensuring basic livelihoods, public sector wages, and essential government operations — the report showed.
6. Wang Yi heads to Europe - Wang’s trip will lay the groundwork for the EU leaders’ pilgrimage to China later in July. It is hard to envision Wang making any big breakthroughs on this trip.
7. Dalai Lama succession - His Holiness the Dalai Lama turns 90 on July 6th and is expected to make his announcement about succession this week. The PRC government of course is insistent that the Party will decide on his successor, so expect an uproar in the next few days when he announces his plans.
8. WHO report on origins of SARS-CoV-2 - On Friday the WHO Scientific Advisory Group for the Origins of Novel Pathogens (SAGO) published its report about the origins of SARS-CoV-2. WHO Director-General Tedros told a press conference:
As things stand, all hypotheses must remain on the table, including zoonotic spillover and lab leak
Despite our repeated requests, China hasn’t provided hundreds of viral sequences from individuals with Covid-19 early in the pandemic, more detailed information on animals sold at markets in Wuhan, and information on work done and biosafety conditions at laboratories in Wuhan
China’s National Health Commission was not pleased, saying in a statement:
Unfortunately, with manipulation and influence from certain countries and individuals, the report has included false information based on subjective speculation, seriously undermining the scientific soundness and credibility of the report, part of which raised groundless requirements for China
Mark your calendar: On Wednesday July 2nd at 11:30 AM ET I will host a Sinocism live discussion about the RMB with Robin Brooks, Senior Fellow at the Brookings Institution, former Chief Economist at IIF and Chief FX Strategist at Goldman Sachs. I will post a recording of our talk later in the day Wednesday.