Politburo meeting on the economy; Qin Gang; Measures to encourage private investment; RIP Gen. Wang Shaojun
Summary of today’s Essential Eight:
1. Politburo meeting - The Politburo met Monday to discuss the economy. I was surprised it was today, as these monthly meetings tend to be closer to the end of the month; the July Politburo meetings from 2017-2022 were held on either on either July 30th or 31st, except for the 2022 one that was held on July 28th. Xi will be in Chengdu 7.27-28, so perhaps other scheduling concerns pushed it forward? The readout was fairly dovish, and so may give some hope to those wanting more policy support, but does not seem to signal much more significant stimulus incoming near-term. The description of the state of the economy is interesting:
The meeting pointed out that the current economic operation faces new difficulties and challenges, mainly due to insufficient domestic demand, difficulties in some enterprises' operations, more risks and hidden dangers in key areas, and a complex and severe external environment. After the stable transition of epidemic prevention and control, the economic recovery is a process of wave-like development and tortuous progress. China's economy has great resilience and potential for development, and the basic situation of long-term improvement has not changed.
会议指出，当前经济运行面临新的困难挑战，主要是国内需求不足，一些企业经营困难，重点领域风险隐患较多，外部环境复杂严峻。疫情防控平稳转段后，经济恢复是一个波浪式发展、曲折式前进的过程。我国经济具有巨大的发展韧性和潜力，长期向好的基本面没有改变。
I would caution against getting too excited about the absence of the phrase “houses are for living, not for speculation 房子是用来住的，不是用来炒的” from this readout, as it has been absent from readouts of other meetings only to reappear later. My guess is that while the readout may signal some more loosening in tier 2 and below cities, policymakers are not ready to significantly relax the housing purchase restrictions in cities like Beijing and Shanghai, even though those real estate markets appear to be coming to a standstill too.
Other interesting language included “raise the strategic height of stabilizing employment to a comprehensive consideration 把稳就业提高到战略高度通盘考虑”, in a sign of how worried the leadership is about the employment situation, and “we should effectively prevent and resolve local debt risks and formulate and implement a package of debt plans 要有效防范化解地方债务风险，制定实施一揽子化债方案”, so help is likely coming for local governments.
This Item 1 is only a lightly edited translation of the full readout. Xinhua will probably issue a full official translation sometime Tuesday. Item 2 includes some commentaries on the readout.
2. Commentaries on the Politburo readout
3. Qin Gang news Tuesday? - It has now been 29 days since we have seen or heard from State Councilor and Foreign Minister Qin Gang. Today Xinhua announced that the Standing Committee of the National People’s Congress will meet Tuesday to “to review a draft criminal law amendment and a decision on official appointment and removal 提请审议刑法修正案（十二）草案的议案；审议有关任免案”. The language "decision on official appointment and removal 审议有关任免" in these kinds of announcements is not that rare, but this announcement, on the same day as the Politburo meeting, and for only a one day session to be held the next day, is unusual. As the excellent NPC Observer noted “It was called just a day earlier, unlike the previous ones, which were all scheduled at least seven days in advance, as required by law in non-emergency situations”. So of course there is lots of speculation that this meeting will decide on a replacement for Qin. I have no idea, but in case the speculation is true this time I have some thoughts.