Xi in Saudi Arabia; Foxconn and reopening; People's Leader 人民领袖; US-China
Summary of the Essential Eight:
Reopening - Cases are rising, it is a bit shocking how many people in my Beijing circle have it now, and the authorities are telling people to stay home and self-treat unless they are really sick. Let’s hope that the PRC experts are correct that the vast majority of people will be fine, otherwise we are heading into an awful couple of months, especially as tens of millions or more people start traveling in the next several weeks for the annual Lunar New Year migration.
Did Foxconn trigger the zero-Covid pivot? - The Wall Street Journal reports that Foxconn founder Terry Gou wrote a letter to the PRC leadership warning that “strict Covid controls would threaten China’s central position in global supply chains” and that “health officials and government advisers seized on Mr. Gou’s letter to bolster the case that the government needed to speed up its efforts to ease its tough Covid-19 controls”.
More than a billion PRC citizens will get infected? - So estimates Feng Zijian, the former deputy head of the Chinese Center for Disease Control and Prevention.
Xi in Saudi Arabia - Xi met with the King and the crown prince. Xi and the King agreed to hold head of state meetings every two years. The crown prince, per the PRC readout, said among other things that “Saudi Arabia firmly supports the one-China principle, firmly supports China in safeguarding its sovereignty, security and territorial integrity, firmly supports China's measures and efforts to de-radicalize, and firmly opposes any external forces interfering in China's internal affairs in the name of human rights”. The two sides signed several deals, though the details are sparse so far.
More real estate support ahead - Bloomberg reports that the upcoming central Economic Work Conference may drop the phrase “房子是用来住的，不是用来炒的 housing is for living in, not for speculation", in use since 2016 I believe. That would be a big deal and would signal that the support for real estate is going beyond backstopping real estate developers’ debt and moving towards trying much harder to stimulate homebuying demand.
New Party Secretaries in Tianjin and Chongqing - Politburo member Chen Min’er, 62, moves from Chongqing Party Secretary to Tianjin Party Secretary to replace Li Hongzhong. It is not yet revealed which job Li, 66 and a Politburo member, will get next. The 20th Party Congress was likely disappointing for Chen, as this appears to be a lateral move. Yuan Jiajun, 60 and a Politburo member, moves from Zhejiang Party Secretary to replace Chen in Chongqing. Ding Xuexiang, now a standing committee member, is still the head of the general office, identified as such in readouts of current trip to Saudi Arabia, and Chen Xi is still head of the Organization Department. Both are a bit surprising given we are already over a month past the 20th Party Congress.
People’s Leader and People’s Daily - The propaganda about Xi since the close of the 20th Party Congress has been a bit strange as much, but not all, of the hagiography that was building into the Congress dropped away, including referring to him as "人民领袖 People's Leader". A long Xinhua piece that appears on page 7 of the Friday People’s Daily uses the term twice. Last week in response to the Nikkei article “Analysis: Xi no longer described as 'people's leader' in China” I wrote that the seeming disappearance of the term certainly could be due to some sort of pushback, but there may be other explanations and like a lot of things I think it may be too early to tell. It is possible that he is waiting for a broader campaign to be prepared by Li Shulei, the new head of the Central Propaganda Department, and/or he knew Jiang Zemin was close to death and decided to wait until Jiang was gone and the funeral was over. That is speculation on my part, but having watched the ebb and flow of the term "People's Leader 人民领袖" over the last several years I am wary of concluding Xi has now dropped his pursuit of it.
US-China - The new Congress will establish a select committee on China that will be chaired by GOP Congressman Mike Gallagher from Wisconsin. Reuters reports that Kurt Campbell told a forum in DC that “the last thing the Chinese need right now is an openly hostile relationship with the United States. They want a degree of predictability and stability, and we seek that as well”. The PRC side is trying to find people to talk to and ways to stabilize the relationship. Qin Gang gave the keynote at the annual US-China Business Council Gala, in what may be his last speech in the US before returning to Beijing to succeed Wang Yi as Foreign Minister. He joked about being called a “wolf warrior”.
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