Xi to meet Putin; Two establishes; RMB; Weak trade data

Summary of today’s Essential Eight:

1. Outbreaks - Chengdu’s lockdown extended, Shanghai and Beijing have cases spreading in the community, Tianjin has ordered a round of city-wide testing starting September 9, Guiyang finds another 301 cases.

2. Xi to meet with Putin next week - Tass reports that Xi and Putin will meet next week in Samarkand. The PRC side has not yet confirmed this. Li Zhanshu met Putin today and per Russian media said that “that Russia's economy has not been crushed by Western sanctions, and Russia is still an important country for international investment cooperation'“.

3. Propaganda work into the 20th Party Congress - The “School Affairs” Committee of the Party School of the Central Committee of the Communist Party of China 中共中央党校（国家行政学院）校（院）务委员会 has written a piece for the theory page of the Wednesday People's Daily on studying the 4th edition of Xi's "Governance of China" - A deep understanding of the decisive significance of the "two establishes" from a political perspective. The “two establishes” are a key part of the theoretical construct built to justify Xi staying in power at the 20th Party Congress and beyond, and to further enshrine his thought. This piece is unsurprising but still interesting given the imminent 20th Party Congress, and the fact that the Central Party School is an incredibly important institution in the system. There are plenty of reasons for cadres and others to be unhappy with the current state of affairs, but most people in the system are risk adverse, and one signal from this kind of messaging from the center is that any resistance there may be is futile. It is worth noting that in the piece the word used for leadership and leadership authority is “领袖/领袖权威 Lingxiu/Lingxiu quanwei”, in what is probably another sign that Xi will be more officially given some sort of "领袖" title at the 20th Party Congress, perhaps 'People's Leader 人民领袖“。

4. Hong Kong speech therapists guilty, journalist arrested - The five speech therapists who printed a children’s book with wolves and sheep have been found guilty of sedition, and the chair of Hong Kong’s biggest journalist has been detained for “obstructing police officers and disorder in a public place”.

5. Disappointing trade data - Imports and exports miss expectations.

6. RMB has more to fall against the USD - A break below 7 to the USD looks imminent. But good luck to any shorts who think it is a one way bet; the PBoC loves torturing shorts, especially foreign ones.

7. Real Estate - Still see no reason to be optimistic we are anywhere near the bottom.

8. More on the meeting of the Central Commission for Comprehensively Deepening Reform - Xinhua has published a full translation of the readout from the Tuesday meeting of the Central Commission for Comprehensively Deepening Reform. The call to build a new national system “to facilitate core technological breakthroughs in key areas” got the most attention, but the bits on resource conservation and rural collective land also look interesting, though it is disappointing that after so many years ot talk about land reform they are still only “deepening pilots”.

Thanks for reading.