Covid controls tightening through October; New measures to stimulate employment and demand; Li Zhanshu in Russia; Biden still undecided about tariffs
Summary of today’s Essential Eight:
Covid controls to tighten through October - I expected Beijing to tighten up Covid controls soon to prepare for the Party Congress, but in fact they are tightening up nationwide, from now through October 31. This is not going to help the economy and will once again ruin the October Holiday for most people. Between this and the various lockdowns Q3 and Q4 GDP estimates seem high...
Worries about employment and demand - Employment and demand seem to be stressing Premier Li Keqiang. This week's State Council Executive meeting announced a series of additional measures to boost employment, stimulate demand, and support small, medium and micro enterprises. The readout mentions the need to give social insurance subsidies to gig workers of platform companies and that "financial institutions will be guided to extend special loan support to key platform companies". I guess there is some regret from the regulatory bashing of those firms over the last two years, now that there is a youth employment crisis?
Zhengzhou real estate cleanup - Nothing like threats of criminal and tax investigations to focus minds. These projects will probably restart by October 6, and perhaps this will be a model for other places dealing with the unfinished housing mess.
Li Zhanshu in Russia - Li Zhanshu comments at the 7th Eastern Economic Forum (EEF), at which he shared a stage with Putin, may be a useful indicator of how Xi and Putin's meeting will go next week. It sure does not look like there is any daylight between the two.
Biden still can not make up his mind about tariffs - And it seems likely no decision will be made until after the early November US mid-terms, and then it will be interesting if the US again tries to cut some deal in advance of a possible Biden-Xi meeting around the G-20.
US business frustration - This US-China Business Council survey came out while I was on vacation, apologies if you have seen it but it is important for US-PRC relations, as it is another sign of the eroding ballast in the relationship, and the damage that dynamic zero-Covid is doing.
Germany also frustrated - Reuters reports that the German economic ministry may introduce measures to lessen German dependence on the PRC economy, and may also submit a complaint to the WTO, along with other G-7 countries. Will they really does as winter looms and the economy heads into recession in the midst of the Russia-Ukraine war? It would be a remarkable shift if they do, and another sign of just how badly Xi has bungled the relationship.
New report on the PRC’s global media influence - Freedom House has released a report on the PRC’s efforts to increase global media influence, aka “global discourse power”. The report is actually a bit encouraging about the lack of success in many democracies, but the rest of the world is a much more receptive target, and there I think the PRC is having a lot of success.
Thanks for reading, hope to see many of you in tomorrow’s weekly open discussion, back after a few weeks hiatus. And if you have the Substack app the Sinocism threads are always open: