Central Economic Work Conference; Xi in Vietnam; Short video crackdown

As I wrote earlier today, I have posted a working translation of the Central Economic Work Conference (CEWC) readout here. Thanks to everyone who has already commented and improved it. It is an ambitious document heavy on aspiration and light on details. I think you can find reasons to start feeling more constructive on the PRC economy, but still lots of reasons to be skeptical. As discussed earlier today I do not think we can say from what is in this readout that the leadership has realized they have gone too far with national security vs. development and so are recalibrating back to something more tolerable, especially for foreign investors. Maybe they are and I just do not understand what they are trying to say. I also stick to what I wrote yesterday, that there is no indication of any massive stimulus in the works, but they will be doing more to keep the wheels from falling off while trying to upgrade the development model, including more support for real estate and measures to deal with the debt crises.

I have pulled some of the sections I found interesting and included them in this issue, but I do recommend reading the full document. We need to be cognizant that PRC commentary on this readout and economic policy in general will be even more skewed to pushing “positive energy”, with “we must strengthen the consistency of macroeconomic policy orientation and strengthen publicity and public opinion guidance on economic affairs” from the Friday Politburo meeting statement and “strengthen economic propaganda and public opinion guidance, and promote a positive narrative about the bright prospects for the Chinese economy“ from today’s CEWC readout.

The meeting also calls for creating an “Invest in China ‘投资中国’品牌” brand. Promoting the “Invest in China” brand should be a business opportunity for ad agencies, PR firms and foreign media, though nothing in this readout appears to address clearly a key concern of foreign investors and businesses - risks related to an expanding definition of national security.

Today’s format is a little different. I still have the top items but they are light on commentary, since much of today was spent on the CEWC.

Here are some highlights from the readout:

Assessment of the economic situation:

The meeting pointed out that further promoting the economic recovery and improvement requires overcoming some difficulties and challenges. The main issues are insufficient effective demand, overcapacity in some industries, weak social expectations, and still numerous risks and hidden dangers. There are bottlenecks in the domestic big cycle, and the complexity, severity, and uncertainty of the external environment are increasing. It is necessary to enhance the awareness of potential dangers and effectively address and resolve these issues. On the whole, the favorable conditions facing China's development outweigh the unfavorable factors. The basic trend of economic recovery and long-term improvement has not changed, and it is important to strengthen confidence and resolve. 会议指出，进一步推动经济回升向好需要克服一些困难和挑战，主要是有效需求不足、部分行业产能过剩、社会预期偏弱、风险隐患仍然较多，国内大循环存在堵点，外部环境的复杂性、严峻性、不确定性上升。要增强忧患意识，有效应对和解决这些问题。综合起来看，我国发展面临的有利条件强于不利因素，经济回升向好、长期向好的基本趋势没有改变，要增强信心和底气。

Nine key points for 2024 economic work:

First, lead the construction of a modern industrial system with scientific and technological innovation 一是以科技创新引领现代化产业体系建设;

Second, focus on expanding domestic demand. 二是着力扩大国内需求;

Third, deepen reforms in key areas. 三是深化重点领域改革;

Fourth, expand high-level opening up to the outside world. 四是扩大高水平对外开放;

Fifth, continuously and effectively prevent and resolve risks in key areas. 五是持续有效防范化解重点领域风险;

Sixth, persistently and diligently work on agriculture, rural areas, and farmers ('three rural issues'). 六是坚持不懈抓好“三农”工作;

Seventh, promote the integrated development of urban and rural areas and regional coordination. 七是推动城乡融合、区域协调发展;

Eighth, deeply promote the construction of ecological civilization and green, low-carbon development. 八是深入推进生态文明建设和绿色低碳发展;

Ninth, effectively guarantee and improve people's livelihoods 九是切实保障和改善民生

Some other noteworthy bits:

We must adhere to high-quality development as the hard truth of the new era 必须把坚持高质量发展作为新时代的硬道理…

We must adhere to the positive interaction between high-quality development and high-level security, use high-quality development to promote high-level security, and ensure high-quality development with high-level security, achieving a dynamic balance and mutual enhancement between development and security [Bill: As a subscriber helpfully pointed out, this language on security and development resembles language used in the readout from the December 12, 2020 Politburo study session on National Security: 四是坚持统筹发展和安全，坚持发展和安全并重，实现高质量发展和高水平安全的良性互动，既通过发展提升国家安全实力，又深入推进国家安全思路、体制、手段创新，营造有利于经济社会发展的安全环境，在发展中更多考虑安全因素，努力实现发展和安全的动态平衡，全面提高国家安全工作能力和水平. So perhaps less here than hoped for a recalibration around security?] . We must regard advancing Chinese-style modernization as the greatest political task, unite the broadest masses of people under the unified leadership of the Party, focus on economic construction as the central task and high-quality development as the primary task, and step by step turn the grand blueprint of Chinese-style modernization into a beautiful reality. 必须坚持高质量发展和高水平安全良性互动，以高质量发展促进高水平安全，以高水平安全保障高质量发展，发展和安全要动态平衡、相得益彰。必须把推进中国式现代化作为最大的政治，在党的统一领导下，团结最广大人民，聚焦经济建设这一中心工作和高质量发展这一首要任务，把中国式现代化宏伟蓝图一步步变成美好现实…

A proactive fiscal policy should be moderately intensified, with improved quality and efficiency. It is necessary to make good use of fiscal policy space, enhance the efficiency of funds and policy effects. Optimize the structure of fiscal expenditures and strengthen financial support for major national strategic tasks. Reasonably expand the scope of local government special bonds used as capital funds. Implement structural tax reduction and fee reduction policies well, focusing on supporting scientific and technological innovation and the development of the manufacturing industry. Strictly supervise the management of transfer payment funds and enforce fiscal and economic discipline. Enhance fiscal sustainability and ensure the basic 'three guarantees' at the grassroots level. Strictly control general expenditures. Party and government organs should get used to living within tight budgets 积极的财政政策要适度加力、提质增效。要用好财政政策空间，提高资金效益和政策效果。优化财政支出结构，强化国家重大战略任务财力保障。合理扩大地方政府专项债券用作资本金范围。落实好结构性减税降费政策，重点支持科技创新和制造业发展。严格转移支付资金监管，严肃财经纪律。增强财政可持续性，兜牢基层“三保”底线。严控一般性支出。党政机关要习惯过紧日子.