Politburo on capital; Mass testing; Beijing outbreak; Blinken speech on US-China; Jack Ma
On Friday afternoon, after the release of the Politburo meeting readout that injected positive energy into the markets just before the holiday, the Politburo held a study session.
The topic of the study session was “regulating and guiding the healthy development of capital in China according to law 依法规范和引导我国资本健康发展 发挥资本作为重要生产要素的积极作用” and the discussant was Liu Yuanchun, vice president of Renmin U 中国人民大学副校长、教授刘元春 .
There did not appear to be any real shifts from the discussion of capital coming out of the Central Economic Work Conference in December. Regulators will be busy, as there are 26 mentions of 监管 "oversight" in the readout. I am not convinced this study session should give “capitalists” confidence.
Near the end of the readout we get a warning that more corruption cases are coming, and there may be more headline risk ahead for platform companies.
Here are some excerpts from the Xinhua translation:
Xi stressed that capital is a major factor of production in the socialist market economy. How to regulate and guide its development in the socialist market economy is an issue of economic and political importance and an issue of theoretical and practical significance. This issue concerns our basic economic system of socialism, the fundamental national policy of reform and opening up, high-quality development and the pursuit of common prosperity. It also matters to our national security and social stability…
We have deepened reform in all respects, stressed the need to let the market play the decisive role in the allocation of resources and the government better fulfill its role, and created a more favorable market and legal environment for the development of all types of capital. We have taken stronger actions against monopolies, curbed the disorderly expansion of capital, guarded against risks, and safeguarded fair market competition. We have paid attention to preventing and defusing financial risks, reversing the tendency of capital being diverted out of the real economy, and addressing risks arising from non-performing assets and bubbles…
All types of capital deserve full recognition for their positive roles in this process. At present, capital in China comes in various forms, such as state-owned, collective, private, foreign and mixed-ownership capital, which is witnessing significant expansion in scale, further diversification in ownership, faster pace of operation and massive inflows of international capital…
It is necessary to stimulate the vitality of capital of all types, including non-public capital, and give full play to its positive role in promoting scientific and technological progress, boosting market economy, facilitating people's lives and participating in international competition, so that it always follows and serves the interests of the people and the country, and contributes to building a modern socialist country in all respects and realizing the rejuvenation of the Chinese nation.
Xi stressed that we should intensify the research on capital theories in the new era. How to regulate and guide the healthy development of capital under the socialist system is an important theoretical and practical issue that Marxist political economists must study and solve in the new era…
We need to foster a fine culture of trustworthiness and guide capital entities to practice core socialist values and promote credibility, responsibility and integrity…
Xi also stressed the need to fight corruption in the capital field. It is important to maintain a high stance against corruption, crack down on profit-seeking activities of capital through abuse of power, and strictly handle corruption-related activities behind disorderly expansion of capital and platform monopolies. [习近平强调，要加强资本领域反腐败，保持反腐败高压态势，坚决打击以权力为依托的资本逐利行为，着力查处资本无序扩张、平台垄断等背后的腐败行为]
Here is the full Chinese readout 习近平在中共中央政治局第三十八次集体学习时强调 依法规范和引导我国资本健康发展 发挥资本作为重要生产要素的积极作用.
Today’s Essential Eight:
Shanghai situation improving but still a ways to go - There have been dozens of cases outside the closed management system over the last two days.
Beijing still not locking down - More tests, more restrictions, schools back online, but there is a decent chance Beijing acted early enough that it can avoid a Shanghai-style disaster.
More frequent mass testing starting - Testing everyone on a much more frequent schedule makes sense in the context of dynamic zero-covid, it should catch outbreaks much faster, help avoid Shanghai-style lockdown disasters.
Say no to spiritually American people 对“精神美国人”说NO - An entry on the Fudan University web site by Fudan professor Zhang Weiwei in praise of the PRC response to COVID. Zhang is rumored to have been beaten up a couple of weeks ago during protests on the Fudan campus over the lockdowns.
US-China - Secretary of State Blinken will give a long overdue speech outlining the Administration’s policy toward the PRC on Thursday, May 5, at 11:00 am ET at George Washington University.
Only positive economic energy allowed - Economists and investment strategists saying negative things about the economy and markets have been digitally disappeared
Jack Ma not under investigation for subversion - A brief alert from CCTV and other outlets that someone surnamed Ma had been detained by State Security in Hangzhou sparked a flurry of rumors that the person was Jack Ma, leading to a nearly 10% drop in Alibaba’s stock in Hong Kong. It was not Jack Ma, but the reaction shows how nervous investors are, and how ineffective the recent statements that some see as signaling a shift towards being nicer to tech firms have been.
More on lessons from Ukraine
Thanks for reading.
The Essential Eight
1. Shanghai situation improving but still a ways to go
Local officials had hoped to confine infections within quarantined areas. Instead, the local health commission detected 73 cases in the “precautionary zones” – those that have not had an infection in the previous 14 days and their neighbouring areas – up from 58 a day earlier.
“Rising infections in the unguarded zones prevented local authorities from announcing that Shanghai had achieved the societal zero-Covid goal,” said Meng Tianying, a senior executive at Shanghai-based consultancy Domo Medical. “It will take another few days for Shanghai to drastically ease lockdown although it has lasted for more than a month.”
Data shows the epidemic situation is steadily improving and under effective control in the city. Newly reported COVID-19 cases in a single day have fallen from a peak of 27,000 to 7,189, and nearly two-thirds of the infections have recovered in the city.
The vice premier stressed downgrading the control measures for communities without new infections for seven consecutive days to restore normal social order.
Sun also demanded strengthening treatment and care for elderly patients, maximizing the cure rate, and reducing the fatality rate.
Gu Honghui, Shanghai’s deputy secretary-general, told a Sunday press conference that residents in the districts of Jinshan, Fengxian, Chongming, Qingpu, and Songjiang can move freely inside their district, which means residents can visit grocery stores and hospitals, as well as take public transportation. The five districts are non-downtown districts that have reached zero-Covid status at the community level.
A sixth district, Putuo, also met the zero-Covid status target, but there are limitations as Putuo is considered a downtown district. While residents can roam around their neighborhood, they are only allowed to visit designated shops.
Five officials including head of local civil affairs bureau and head of a local welfare house in Shanghai's Putuo district were held accountable after a video showing employees of the house transferring a living elderly person to a mortuary, which went on viral on Chinese social media on Monday.
2. Beijing still not locking down
More tests, more restrictions, schools back online, but there is a decent chance Beijing acted early enough that it can avoid a Shanghai-style disaster.
Beijing reported 53 locally transmitted confirmed COVID-19 cases between 3 p.m. Monday and 3 p.m. Tuesday, local authorities have said.
On Tuesday, one area in Chaoyang District and one area in Fangshan District were upgraded from medium-risk to high-risk areas for COVID-19, according to a press briefing held by the municipal government.
Sporadic hidden transmission sources persist in the city's communities, said Pang Xinghuo, deputy head of the Beijing municipal disease prevention and control center.
Beijing's 12 districts have started three rounds of nucleic acid screening from Tuesday till Thursday on a daily basis in succession to curb the COVID-19 resurgence.
All kindergartens, primary and middle schools and secondary vocational schools in Beijing will postpone resuming classes for a week until May 11. When students will return to schools would be based on the COVID-19 epidemic situation, Beijing authorities told a press conference on Tuesday...
Those who really need to leave Beijing must present a nucleic acid test negative certificate taken within 48 hours and a green health code before boarding a plane or a train. Airports and railway stations will strengthen inspection, and spot checks will also be carried out on those leaving Beijing by road
wonder why the virus is so different in beijing than it was in shanghai, where asymptomatic cases have been 90%+. This report says of the 448 Beijing cases only about 40 have been asymptomatic…A sarcastic question, Shanghai officials were playing games with the definition of “asymptomatic”
While Beijing has recorded only 400 cases since April 22, the move to start using the Xiaotangshan hospital, which has more than 1,000 beds, appears to be aimed at avoiding the fate of Shanghai, which is still under lockdown. The hospital was built in seven days in 2003 to treat patients of the SARS epidemic and was used again in 2020 to treat Covid-19 patients.
3. More frequent mass testing starting
Testing everyone on a much more frequent schedule makes sense in the context of dynamic zero-covid, it should catch outbreaks much faster, help avoid Shanghai-style lockdown disasters. And some folks will make a lot of money.
On the premise that the dynamic zero-COVID policy remains unchanged, large-scale lockdown can only be avoided through regular and normalized nucleic acid testing, meaning economic development and anti-epidemic work can be balanced; meanwhile, normalizing nucleic acid testing is a transitional means at minimum cost to the opening of the whole society and free movement of people in the future, Chinese experts said on Monday after several Chinese metropolises including Beijing issued new guidelines to normalize nucleic acid testing...
A senior expert close to the Chinese Center for Disease Control and Prevention (CDC) told the Global Times on Sunday on condition of anonymity that regular nucleic acid testing in big cities was to discover cases as early as possible and help government come up with more targeted epidemic prevention measures under China's current dynamic zero policy.
"We don't have other options except for nucleic acid testing to find early cases amid the stealthy spread of Omicron, and decision-makers can come up with more targeted and dynamic epidemic measures based on the analysis of the results of regular testing in order to prevent cities from resulting in large-scale lockdown like that in Shanghai," the expert said.
Public-health officials have been told to regard Shanghai’s struggles as a warning against looser controls and that the leadership, at least for now, plans to continue the current approach until at least the Communist Party Congress in the fall when Mr. Xi is expected to secure a third term as China’s leader, according to people working at China’s Center for Disease Control and Prevention...
Public-health experts, after studying their two different outcomes, concluded that a swift and short lockdown together with mass testing early on in the outbreak allowed Shenzhen to bring Covid-19 under control, according to the people working for China’s CDC.
Shanghai, by contrast, let time pass while public-health experts and officials argued over whether to lock down the entire city and whether it should allow home quarantine, the people said.
One government policy adviser, who asked not to be identified, said making Xi understand that his previously successful zero-Covid policy might not withstand the highly contagious Omicron variant without devastating economic costs was now a “key challenge for the system”.
“People are telling Xi the lockdowns are a concern but I don’t think they’re saying how big a concern it really is,” the adviser said. “He’s just so proud of China’s accomplishments fighting Covid that I don’t think he worries about the economy.”
“I don’t think Omicron is going to be contained but this is what the big leader said, so people are making decisions based on this assumption,” he said, adding that the situation in China was now worse than when Covid first spread in early 2020.
Deng Yuwen, a former editor at a state-run newspaper and now a researcher at the New York-based think tank China Strategic Analysis, argued that sidelining Li [Qiang] might make more strategic sense for Xi than risking an internal backlash by promoting him.
“Sacrificing Li will not cause any fundamental damage to Xi -- he could fill the position with other allies,” Deng said. “And this will serve as a warning to other party cadres: Being a close ally to Xi will not mean your promotion is guaranteed. You have to do your job well.”
Comment: I agree with Deng Yuwen. and I still think the odds are high li qiang gets replaced. And I will not be surprised if we start hearing more blame on hostile forces, foreign and domestic, for the mess in Shanghai. Xi is never one to waste a good political crisis, this mess could be useful to root out more remnants of the "Shanghai faction"
They really are stuck with dynamic zero covid, if they back off they will see a lot of deaths from all the unvaccinated elderly, and even if they started a mass forced vaccination campaign for those people tomorrow it would 6+ months before they were boosted and so had decent protection. There is a scenario in which the Shanghai disaster really is anomalous and they are able to get by with smaller scale lockdowns. Up until March the current policy had a ton of support, and obviously had been a huge propaganda win for Xi and the CCP.
News of several hardline quarantine measures has been getting passed around Chinese social media in recent days. In Qianan, North China’s Hebei province, residents have been told to hand in their house keys to authorities to ensure they don’t leave their homes. Residents who refuse to cooperate will have their doors sealed from the outside and cordoned off with barbed wire.
Faced with overwhelming online criticism, Qianan authorities released a statement Wednesday that blamed a lone residential community for its “simplistic and radical means” of keeping Covid under control...
It is an understatement to refer to locking residents in their homes and forcing them to hand over their keys as “simplistic and radical means.” It is a direct violation of citizens’ property rights and personal freedom.
Schools in the main city district will go online, while employees with government organisations and companies in the area must work from home during that period, according to a statement on the city's official WeChat account.
Zhengzhou announcement - 河南郑州：4日零时起非必要不离郑、不入郑|郑州市|河南省|疫情_新浪新闻
4. Say no to spiritually American people 对“精神美国人”说NO
An entry on the Fudan University web site by Fudan professor Zhang Weiwei. Zhang is not some random crank, he was the discussant at the June 2, 2021 Politburo Study Session on "strengthening the country's international communication". Zhang is rumored to have been beaten up a couple of weeks ago during protests on the Fudan campus over the lockdowns.
Beginning with the 2020 outbreak, I have compared the data on the U.S. and Chinese outbreaks almost every three months, suggesting that China's safety from contracting and dying from COVID-19 is much higher than that of the United States, from more than 100 times at the beginning, to more than 300, 500, and 600 times later. These findings frightened many "spiritual Americans" to death. It is ridiculous for them to take advantage of the problems that emerged during the Shanghai epidemic to deliberately set the pace and try to deny the success of the Chinese model. The vast majority of Chinese people have enjoyed more than two years of peace and quiet, and China is the only mega-economy in the world with positive economic growth. Wuhan has succeeded, Shenzhen has succeeded, Xi'an has succeeded, Jilin has succeeded, Tianjin has succeeded, so why can't Shanghai succeed? Shanghai once strayed from the anti-epidemic model explored by the Chinese people and took a bit of a detour, but is now on the right track under the strong leadership of the Party Central Committee and with the strong support of the whole nation. Shanghai is a city that has seen the world, and where it falls, it gets up and continues to fight. By April 27, the number of new cases in community transmission had dropped to 171, and the dawn is near...
"The prevalence of COVID-19 in China is 8.9 per 100,000, which is 1/1,678 of that in the United States, and the death rate is 0.4 per 100,000, which is 1/606 of that in the United States." Based on this figure, I have since said on different occasions that people in China are more than 1,600 times freer or safer from contracting COVID-19 than in the United States, and more than 600 times freer or safer from dying from COVID-19 than in the United States...
These figures seem to have galvanised a group of "spiritual Americans". In the process of COVID-19 prevention and control in Shanghai, these people envy the U.S. model of "lying flat," which has killed one million people and infected more than 80 million people. The Chinese people, including the people of Shanghai, will never allow "spiritual Americans" to lead our epidemic prevention and control, or allow the "defeated nation" model to replace the "victorious nation" model. Of course, our model will evolve with the times, but at the current level, it is much better than the American model.
Thankfully although these "spiritual Americans" can still influence local public opinion through disinformation and slander with the support of Taiwan's "1450" online army and Western forces, their days of calling the shots have come to an end, behind which the American model they kneeled to has fallen from grace in China, and the American myth has been shattered among the majority of Chinese people, especially among young Chinese.
Fudan University in Shanghai was the scene of chaos when large numbers of students demonstrated on the campus on 20 April. Riot police were sent in, with arrests reportedly made in what is regarded as the most serious campus incident of China’s current coronavirus wave.
Parents of students at the Shanghai university reported that Fudan had been disconnected from the internet when the protests occurred. It is unclear how many arrests were made or whether the students were later released.
Secretary of State Blinken will give a speech outlining the Administration’s policy toward the PRC on Thursday, May 5, at 11:00 am ET at George Washington University.
Multiple sources say that Blinken will underscore the administration’s existing policy toward China modeled on that inherited from the Trump administration. The speech will render a topline overview of the strategy rather than details on its mechanics, which along with the complete text of the document itself won’t be made public...
The upcoming speech will kick off a month of intense administration engagement with Asia, including next week’s U.S.-ASEAN Special Summit in Washington, Biden’s trip to South Korea and Japan and the first in-person meeting May 24 of leaders of the Quad, including Japan, India and Australia...
“The China Strategy is basically ‘Trump-plus with sophistication’ but with partners and allies,” said a China expert familiar with the strategy’s contents who asked for anonymity in order to speak freely. The expert expressed concern that the strategy “has been sitting on Biden’s desk since November” although Blinken described the bilateral relationship in January 2020 as “arguably the most important … that we have in the world.”
The Treasury Department, which oversees CFIUS, earlier this month sent lawmakers a proposal for a watered-down version of a draft measure that Congress is considering. The Treasury’s framework suggested the government could trial monitoring U.S. investments in China without any new enforcement measures.
The Treasury’s proposal wasn’t shared with White House national security officials before it was sent to Congress, and doesn’t reflect the Biden administration’s views, people familiar with the matter said...
The dispute over scrutinizing outbound investments is just one example of the administration’s struggles to settle on a comprehensive China policy. Officials have sparred privately -- and in some cases made contradictory statements in public -- over whether to maintain the Trump administration’s tariffs and the former president’s trade deal with China. Months of deliberations have yet to produce a consensus.
U.S. officials told Reuters in recent days they remain wary about China's long-standing support for Russia in general, but that the military and economic support that they worried about has not come to pass, at least for now. The relief comes at a pivotal time.
President Joe Biden is preparing for a trip to Asia later this month dominated by how to deal with the rise of China and his administration is soon to release his first national security strategy about the emergence of China as a great power.
Tai said that the U.S. needs to make sure that the tools it deploys to meet the short-term challenge of inflation are effective and don’t undermine the medium-term goal of changing the relationship with China.
Washington’s trade office told US businesses on Tuesday that it had begun a statutory process that could ultimately end up removing tariffs on Chinese goods.
The notification, part of a legal requirement to review the tariffs four years after they were first put into place, puts the burden on US businesses benefiting from those tariffs to speak out and say that they want the policy to continue, the office of the US Trade Representative (USTR) said.
Negative views of China have also increased slightly over the past year. Around eight-in-ten (82%) have unfavorable opinions of China, including 40% who have very unfavorable views of the country. This is a 6-point increase in negative views from 2021 and a new high since the Center began asking this question on its American Trends Panel in 2020. The current reading is also a record reading of unfavorable opinions since 2005, although the mode shift from phone surveys to the online panel makes it difficult to directly compare today’s numbers with data from before 2020.
Government officials and state and party media from the People’s Republic of China (PRC) and the Chinese Communist Party (CCP) routinely amplify Kremlin propaganda, conspiracy theories, and disinformation. This amplification rationalizes President Putin’s unjustified and unprovoked war against Ukraine while undermining trust in the United States and other countries, democratic institutions, and independent media. Using social media platforms banned within the PRC, PRC and CCP media and PRC “wolf warrior” diplomats convey biased Kremlin talking points to audiences in multiple languages and regions across the world. Meanwhile, within the PRC, CCP and state-backed entities censor credible reporting on Russia’s atrocities in Ukraine while blaming NATO and the United States for Putin’s brutal war of choice. The “pro-Russia neutrality” of PRC officials avoids explicit public endorsement or condemnation of Russia’s invasion of and conduct in Ukraine, and continues to insist Beijing is a neutral stakeholder that respects the “sovereignty and territorial integrity of all nations.” However, PRC and CCP media and officials’ further uncritical amplification of Moscow’s messaging demonstrates Beijing’s support for Russia.
For some time, the United States and some other countries as well as the North Atlantic Treaty Organization (NATO) have been spreading disinformation about China's stance on the Ukraine situation, and making groundless accusations to attack and smear China. The falsehoods, confusing right with wrong are an attempt to mislead the world. China's position on the Ukraine issue is above board, objective and fair. Some examples of the disinformation and the reality are presented below to help the world understand what is really going on.
Kurt Campbell, the White House Indo-Pacific co-ordinator, and Laura Rosenberger, the top National Security Council China official, held a meeting on Taiwan with UK representatives in early March, according to people familiar with the situation. It occurred during a broader two-day meeting with their respective teams on Indo-Pacific strategy.
Three people familiar with the stepped-up engagement said the US wanted to boost co-operation with European allies, such as the UK, to raise awareness about what the administration regards as Beijing’s increasingly assertive attitude towards Taiwan, which it considers part of China.
Biden’s current China policy is completely consistent with this history, Jiang insists, and Biden’s goal is to press human rights claims against China merely to safeguard the interests of America’s world empire. Americans may not realize the contradictions in their own thinking about human rights, Jiang argues, but Chinese should not be led astray by lofty talk about Xinjiang and Hong Kong, because the final issue is money and power, after all.
6. Only positive economic energy allowed
Comment: Grim, only positive energy allowed. This is not how you restore investor confidence in your economy and your markets. And it is a sign of how worried authorities are about the trajectory of the PRC economy. Worrisome how some research firms with personnel in the PRC increasingly under pressure, having to pull punches will become increasingly problematic
One of China’s highest-profile market strategists, Hao Hong, has left his state-owned employer days after his social-media accounts within China were censored.
In recent months, the Hong Kong-based analyst’s research and social-media posts have covered potentially sensitive issues such as U.S. delistings of Chinese companies, the risk of capital flight from China and the economic impact of lockdowns.
Recent research notes from Mr. Hong, who had been a managing director and head of research at Bank of Communications International Holdings Co., were titled “What should Chinese ADRs worry about” and “Be wary of capital flight.”
Weibo also recently suspended the accounts of a few other economists and market analysts, including Fu Peng, chief economist at Northeast Securities; Dan Bin, chairman of Shenzhen Oriental Harbor Investment; and Wu Yuefeng, partner and fund manager with Beijing-based Funding Capital. All of their suspensions were said to be for “violating related laws and regulations”.
Some folks at UBS probably not weeping for Hao Hong - 2019 UBS puts top economist on leave as ‘pig’ row deepens | Financial Times
“Chinese consumer prices rose. This was mainly due to sick pigs,” Mr Donovan, chief economist at UBS Global Wealth Management, said on Wednesday in comments about the impact of African swine fever in China. “Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world.”..
The charge against Mr Donovan was led in part by Hao Hong, head of research at Bank of Communications International, the state-run Chinese bank’s Hong Kong unit.
Mr Hong called the comments “distasteful and racist language” in a Twitter post.
7. Jack Ma not under investigation for subversion
A brief alert from CCTV and other outlets that someone surnamed Ma had been detained by State Security in Hangzhou sparked a flurry of rumors that the person was Jack Ma, leading to a nearly 10% drop in Alibaba’s stock in Hong Kong. It was not Jack Ma, but the reaction shows how nervous investors are, and how ineffective the recent statements that some see as signaling a shift towards being nicer to tech firms have been.
Alibaba plunged as much as 9.4% in Hong Kong, erasing about $26 billion of market value, after state broadcaster CCTV reported that authorities in the company’s home base of Hangzhou had imposed curbs on an individual surnamed Ma.
The stock erased the majority of those losses after a statement from Hangzhou police indicated the accused person’s name was spelled with three Chinese characters. Jack Ma’s Chinese name is the two-character Ma Yun.
Ma, who was born in 1985 in Wenzhou of Zhejiang Province, works as the director of hardware research and development department of an IT company, the Global Times has learned. Being brainwashed by outside anti-China forces, Ma has viewed anti-China forces as “mentors” and become one of their tools to contain China.
Since March 2022, with the incitement of an anti-China figure, Ma created an online anonymous group to play the role as agent of outside forces, spread rumors and disinformation and release so-called independence declaration to split the country and subvert the state.
Legal Daily later identified Ma as a 37-year-old man from Wenzhou, also in Zhejiang.
In addition, the report accused him of colluding with overseas anti-China forces and using the internet to incite secession and subversion of state power...
According to the Legal Daily report, Ma had taken steps to establish an “interim parliament”, “assigned individuals to draft the so-called ‘legal system’” and “declared [his intention] to leverage external forces to overthrow the Chinese government”.
Comment: This may be the person. Here is a tweet with a declaration of independence:
8. More on lessons from Ukraine
Chinese regulators have held an emergency meeting with domestic and foreign banks to discuss how they could protect the country’s overseas assets from US-led sanctions similar to those imposed on Russia for its invasion of Ukraine, according to people familiar with the discussion...
The internal conference, held on April 22, included officials from China’s central bank and finance ministry, as well as executives from dozens of local and international lenders such as HSBC, the people said. The ministry of finance said at the meeting that all large foreign and domestic banks operating in China were represented...
“No one on site could think of a good solution to the problem,” said another person briefed on the meeting. “China’s banking system isn’t prepared for a freeze of its dollar assets or exclusion from the Swift messaging system as the US has done to Russia.”
Among those observing the Russian military’s ongoing operations in Ukraine, few will be watching and assessing its performance more intensely than those in the Chinese People’s Liberation Army (PLA). Analyzing the wars of other countries continues to play an important role in Beijing’s decision-making about military modernization, along with the PLA’s own field experiments and its increasing use of big data, AI, and simulations. In the first phase of the Ukraine conflict, PLA analysts — who have traditionally held the Russian military in high regard — will undoubtedly find Russian operations wanting....
Among the weightiest strategic-level issues generated by the Russo-Ukrainian war will be the issue of nuclear deterrence. One can imagine that PLA analysts and others in the Chinese national security community will study the role that Russia’s possession of a serious nuclear deterrent is playing in shaping the choices of the United States and NATO in their responses to Moscow’s operations, including the early decision not to intervene militarily. Doing so will likely validate Beijing’s decisions, made long before the Ukraine war, to increase the size and survivability of its nuclear arsenal. At the same time, it could also raise questions about the future efficacy of China’s long-standing “no first use” nuclear doctrine. One suspects the nuclear issue will be looked at long and hard by Beijing’s military and civilian strategists.'
This is not the first time Beijing has found itself caught between major rival powers. Between 1958 and 1971, the People’s Republic of China faced the most hostile international environment in its brief history. During this period, it had to confront strategic threats from the United States and the Soviet Union simultaneously. In response, the Chinese government devoted all its economic resources to preparing for a full-scale war against one of the two powers. To better shield its industrial base from attack, it moved many factories from more developed areas in eastern China to underdeveloped and mountainous western areas, hiding them in artificial caves. This large-scale industrial reorganization plunged China into a significant economic hardship, causing severe commodity shortages and widespread poverty.
Comment: Hard to take Yan seriously in this piece when he elides the Great Leap Forward like this. What else is he self-censoring/misleading readers about? And how did Foreign Affairs editors not catch this?
Business, Economy and Trade
Interview: Vice minister highlights fiscal tools stabilizing economy-Xinhua "Tax and fee cuts are key measures to sustain stable macroeconomic performance," said Vice Minister of Finance Xu Hongcai in an interview with Xinhua, asserting that China is accelerating the implementation of related policies..."The stable operation of the treasury bond market mirrors investors' confidence in the healthy development of the Chinese economy," Xu said, adding that "with strong resilience and vitality, the fundamentals of the Chinese economy will remain unchanged."
努力实现全年经济社会发展预期目标——国家发展改革委党组成员、秘书长赵辰昕谈扎实稳住经济-新华网 The impacts of COVID are temporary and the Chinese economy will soon return to the “normal track,” Zhao Chenxin, Secretary General and Member of the CPC Leadership Group of the NDRC, told Xinhua in an interview published on April 30. He noted that “domestic demand” contributed 96.3% to China’s GDP in the first quarter and that government support measures were working. Moving forward, he said China would continue to expand domestic demand, aid firms battered by the pandemic, “study” support measures of greater scale, stabilize employment, and secure energy supplies.
取消限购！补贴1万！更有3700万消费券！楼市又有大消息 - 21经济网 Wuxi, which saw home sales plunge almost 50% in the first quarter, has become the latest city to tweak property tax rules in a bid to make it easier for residents to sell second-hand homes. In the same week, Meizhou of Guangdong moved to lower down payment for second homes. In Zhuzhou, Hunan, cash incentives have been rolled out to encourage people to buy homes. As of the end of March, personal home loans across China grew 8.9% year on year.
China to Suspend Import Taxes on Coal to Keep a Lid on Energy Costs - Caixin China will cut its import tax on coal to zero starting Sunday, according to a statement released Thursday by the State Council’s Customs Tariff Commission. The suspension will remain until March, 31, 2023. Currently, coal importers in China have to pay a tax that typically ranging between 3% and 6%, depending on the type of coal.
Local Governments Again Break Out the Coupons to Boost Consumer Spending-Caixin Since late April, authorities in at least 12 provincial-level regions have announced they will distribute coupons, according to Caixin’s calculations. Cities in South China’s Guangdong province have announced they will hand out 1.1 billion yuan ($166.4 million) worth of coupons during the last three days of the five-day May Day holiday, which ends Wednesday...n early 2020 when the inchoate pandemic blew a hole to China’s economy, local governments issued 19 billion yuan in coupons from March to May. The effect could be seen on WeChat’s payment platform, where — for some industries — the number of transactions in regions that issued coupons was 25% higher than those that didn’t, according to a study by economists at Peking University.
Chinese EV-Makers’ Deliveries Plunge as Lockdowns Hit Dealers, Plants - Caixin According to the China Automobile Dealers Association (CADA), China’s Vehicle Inventory Alert Index of April stood at 66.4% — way above the 50% threshold, showing that producers are facing high inventory volume and low market demand. The figure is also 10 percentage points higher than the figure of the same period a year earlier. In another statement released by the CADA, it said that car dealers in 25 out of 90 sample cities could not open for business in March due to Covid restrictions, and less than 10% of car dealers could meet their monthly sale targets.
China GDP 2022: Fitch Trims Growth Forecast on Covid Lockdowns - Bloomberg The agency trimmed its growth estimate to 4.3% from 4.8%, according to a statement from the agency on Tuesday. China’s economic activity contracted sharply in April as restrictions put in place to stem the spread of the virus closed factories, curbed mobility and snarled supply chains.
Hong Kong economy shrinks by a worse than expected 4 per cent in first quarter | South China Morning Post Hong Kong’s economy shrank by 4 per cent during the first quarter of 2022, worse than previously expected by analysts, as businesses were hammered by a fifth wave of coronavirus infections and a fresh outbreak across the border in mainland China.
China Lockdowns Wreak Havoc on Economy as Xi Pledges Support - Bloomberg “I expect GDP growth in the second quarter to turn negative, as lockdowns will likely be on and off,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “The key issue going forward is how the government will fine-tune its ‘zero tolerance’ policy to mitigate the economic damage.”
China’s biggest insurer Ping An calls for HSBC break-up | Financial Times $$ Ping An has argued that an independent Asia business listed in Hong Kong would have higher profitability, lower capital requirements and greater autonomy to make decisions. A second top-10 shareholder told the Financial Times that Ping An’s proposal was a “pretty interesting idea”, adding: “For HSBC, it’s existential. They are not in a tenable structure. You wouldn’t create this institution from scratch.”
PwC and Grant Thornton quit as auditors for R&F, Kaisa and Shimao as Covid-19 controls gum up accounting work, casting cloud over financial transparency | South China Morning Post Three of China’s biggest property developers have lost their audit firms, as Covid-19 quarantines disrupted accounting work, in a collective setback for investors as they would have to wait several months longer to get a glimpse of the financial results of some of the country’s biggest debtors. PricewaterhouseCoopers (PwC) resigned as the auditor of Guangzhou R&F Properties on April 28, ceased acting for Shimao Services Holdings a day later, according to separate filings late Friday night to the Hong Kong stock exchange. The firm quit as Hopson Development’s auditor on January 27, citing inadequate access to necessary information. // Comment: Yes I am sure Covid is the problem...
Russia Wants to Sell More Energy to Asia, but Has to Slash Prices - The New York Times “Even the private Chinese coal traders these days don’t want to touch Russian coal, because of the fear of Western sanctions,” said Zhou Xizhou, a longtime specialist in Chinese energy who is now at S&P Global.
Politics and Law
Close ally of Xi Jinping named new head of influential Chinese think tank | South China Morning Post Shi Taifeng, 65, was named president of the CASS on Saturday soon after Xinhua reported that he had been replaced as Communist Party boss of the Inner Mongolia autonomous region, a post he had held since 2019. He was vice-president of the Central Party School when Xi headed the cadre-training academy between 2007 and 2012.
人事观察｜“70后”上海市委副书记诸葛宇杰兼任政法委书记_政经频道_财新网 Newly appointed Shanghai Deputy Party Secretary Zhuge Yujie is now also Shanghai political and legal affairs secretary 全国首位“70后”省级党委副书记诸葛宇杰，日前再兼新职。据东方网更新的诸葛宇杰简历显示，他已二度接替升任人民日报社总编辑的于绍良，并循前例兼任上海市委政法委书记
Beijing centralises power in the provinces ahead of Communist Party congress | South China Morning Post The shift towards promoting outsiders to provincial roles is not unique to Guangdong. Numerous studies measuring provincial leadership rotations show an intensifying trend towards centralisation of power.
The country aims to develop philosophy and social sciences with Chinese characteristics, which have considerable academic frameworks, strong academic capacities, high research levels, and international influence, noted the plan issued by the general office of the Communist Party of China Central Committee.
More resources will go to Marxism research, adapting Marxism to China's conditions and keeping it updated.
The country will speed up its efforts to establish a discipline system, academic system, and discourse system of philosophy and social sciences with Chinese characteristics and enhance their independence, creativity, adaptivity to the local context, and competitiveness.
It will also step up efforts to build new think tanks with Chinese characteristics to contribute to the country's decision-making process, governance, and economic and social development, said the plan.
中国社会科学院职能配置、内设机构和人员编制规定_中央有关文件_中国政府网 “Provisions on the function allocation, internal structure and staffing of Chinese Academy of Social Sciences”
(1) adhere to the guiding position of Marxism, strengthen the overall and systematic research and interpretation of Xi Jinping's socialist thought with Chinese characteristics for a new era, focus on the study of major theoretical and practical issues of China's reform, development and stability, deepen the research and construction of Marxist theory, promote the modernization of Marxism, adhere to and develop contemporary Chinese Marxism and 21st century Marxism.
2. Establish an innovation system for philosophy and social sciences, carry out an innovation project for philosophy and social sciences, establish a discipline, academic and discourse system for philosophy and social sciences with Chinese characteristics, interpret Chinese practice, interpret Chinese theories, disseminate Chinese thoughts, and flourish and develop philosophy and social sciences with Chinese characteristics.
(3) to establish an academic evaluation system for philosophy and social sciences with Chinese characteristics, formulate and improve evaluation standards for Chinese philosophy and social sciences, participate in the formulation of international academic evaluation standards, and undertake and coordinate the academic evaluation of philosophy and social sciences at the national level; We will strengthen the development of a credibility system for scientific research in philosophy and social sciences, and coordinate and guide the management of credibility in scientific research in philosophy and social sciences nationwide.
(4) Strengthen the construction of new think tanks with Chinese characteristics and exchanges between think tanks at home and abroad, build a national literature center for philosophy and social sciences, and build a theoretical platform for philosophy and social sciences with Chinese characteristics; Important information on academic research and ideology should be submitted to the CPC Central Committee and The State Council to reflect the developments of the academic community, and important research results and countermeasures should be submitted to provide intellectual support for the major decisions of the Party and the state.
Chinese Social Media Giants Launch New Campaign Against "Historical Nihilism" - China Digital Times (CDT) Several of China’s major social media companies have launched a campaign to clean up “historical nihilism” on their platforms. The push comes on the heels of an April 20 essay published in Study Times by the head of the Cyberspace Administration of China, the national internet watchdog, on strengthening the Party’s control of the internet. CAC Party Secretary Zhuang Rongwen declared the Party must “dare to brandish the sword” in the struggle to suppress heterodox history. Days later, Douban, Douyin, Toutiao, and Weibo announced efforts to encourage users to report others for posts tainted with historical nihilism, a catch-all term for accounts of the history of the People’s Republic of China and the Communist movement that engage with the less-than-glorious aspects of either.
Developing Online Media Control – China Media Project Late last month, the State Information Center, a policy think-tank under the Chinese government, released its 2021 China Online Media Development Report (中国网络媒体发展报告). Pitched as a broad overview of developments in the country’s online media industry, the report assesses 20 major online media platforms, including both state-owned media websites and private internet platforms.
China's top legal departments urge abduction suspects to surrender-Xinhua Three of China's top legal departments have jointly issued a circular urging all suspects involved in the abduction of women and children to surrender themselves to the authorities. The circular, jointly issued by the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security, ordered the suspects involved in such criminal activities to turn themselves in before June 30. Suspects who comply with the order and confess their misdeeds truthfully will be given lenient punishment in accordance with the law, the circular noted.
China calls for more efforts to protect revolutionary cultural relics-Xinhua The circular, jointly released by the administration and the Publicity Department of the Communist Party of China Central Committee, noted that revolutionary cultural relics are precious wealth of the Party and the country. 中央宣传部、国家文物局：持续开展革命文物名录公布工作_新闻中心_厦门网
Xi encourages youth to help boost China's aerospace sci-tech self-reliance-Xinhua Xi...made the remarks in a Monday letter replying to a youth team working on space station construction at the China Aerospace Science and Technology Corporation (CASC)...He encouraged youth in the sector to carry forward the spirit of "Two Bombs, One Satellite" (Two Bombs refers to the atomic bomb and the intercontinental ballistic missile, while One Satellite refers to the artificial satellite) and the spirit of China's manned space program, and to contribute more on the country's journey to explore space and to its realization of high-level self-reliance in aerospace science and technology through innovation.
New Party chief for Inner Mongolia appointed-Xinhua Sun Shaocheng as new Party chief for the Inner Mongolia Autonomous Region
Communist youth league of China has over 73.7 mln members-Xinhua The Communist Youth League of China (CYLC) has over 73.7 million members nationwide as of December 31, 2021, according to statistics released by the CYLC Central Committee on Monday. Up to 43.81 million CYLC members are students and the rest are in enterprises, public institutions, urban and rural communities, social organizations, and other fields.
广西南宁印发习近平思想“口袋书” | 早报 Nanning City in Guangxi Province has been distributing Xi Jinping Thought little red books
Yuan Peng on Comprehensive National Security - Reading the China Dream In the text translated here, Yuan is writing less as a scholar and more as the Secretary General of the Center for Research on the Overall National Security Concept, and the text appears in the April 26 edition of the People’s Daily. The general subject addressed is the publication of a book entitled Outline of the Overall National Security Concept on April 15, 2022
Foreign and Defense Affairs
Xinhua’s Dueling Interviews w/Lavrov and Kuleba - China-Russia Report Xinhua hosted back-to-back interviews with the Russian and Ukrainian Foreign Ministers on Saturday, April 30th..The dueling interviews do not, at least not by themselves, suggest any imminent changes to Chinese foreign policy.
Xinhua Commentary: NYT's biased report on Shanghai's COVID fight betrays its ignorance of China-Xinhua In a recent report on the COVID-19 fight in Shanghai, the American newspaper jumped to a conclusion that the legitimacy of the Communist Party of China (CPC) is being tested, because residents in Shanghai are volunteering to help each other out during "lockdown" in recent weeks. Such an argument is as ridiculous as it is malicious...In 1936, when the prospect of the CPC-led social revolution was still unclear, Edgar Snow, an American journalist, ventured to north of China's Shaanxi Province, where the CPC and its military "the Red Army" were based and surrounded by resourceful and powerful enemies. Through comprehensive interviews and objective analysis, Snow made an accurate and foresighted judgment in his report that the social revolution "would eventually win."..Eighty-six years later, Snow's professionalism and Mao's words about the CPC's successes can still offer some clues about how the Western mainstream media, including the NYT, can tell their stories of China and the CPC.
Is China ready for aircraft carrier No 4? Talk swirls over stealth fighter jets at PLA naval base | South China Morning Post Satellites spot FC-31 stealth fighters lined up next to J-15 carrier-based fighter jets at Liaoning naval airbase Joint appearance could indicate preparations for a fourth PLA aircraft carrier, say experts
Chinese aircraft carrier leads large strike group into western Pacific as Taiwan tensions rise | South China Morning Post Escorting the Liaoning were five destroyers, including a Type 055 – the most powerful such warship in the Chinese navy – as well as one frigate and one supply ship. The fleet passed through the Miyako Strait between Japan’s Okinawa islands on Monday afternoon to enter the western Pacific before heading south, Tokyo’s defence ministry said.
China Is Frequent Topic, Especially for GOP, in Midterm Campaign Ads - WSJ Roughly one in nine ads aired so far this year in all House and Senate races have mentioned China, a Wall Street Journal analysis of broadcast-television and national cable data from the ad-tracking firm AdImpact shows. That isn’t far behind mentions of inflation, another topic Republicans are especially eager to talk about.
How AI Would — and Wouldn’t — Factor Into a U.S.-Chinese War - War on the Rocks While AI is probably not going to determine the outcome of a U.S.-Chinese war, the bottom line is that the technology would augment U.S. and Chinese military capabilities in important ways. Chinese investments in AI prioritize near-term offensive capabilities. In particular, AI could play a significant role in the People’s Liberation Army’s efforts to disrupt and degrade the U.S. battle network and compensate for its own deficiencies in the undersea and electromagnetic domains.
China lays out big plans for its new Tiangong space station | Space China will launch six major missions before the end of the year to complete its Tiangong space station, which space officials say could soon link up with a powerful telescope and host commercial activities and international astronauts.
PRC Ambassador to Israel - The Chinese version of what's happening in Xinjiang - opinion - The Jerusalem Post In disregard of the fact that Xinjiang is getting better every day, some anti-China forces fabricated tons of lies, including “genocide,” “forced labor” and “reeducation concentration camps.”
警惕辱华病毒“大翻译运动”正悄然发生变异_观点中国_中国网 "Be vigilant against the anti-China virus "the great translation movement", which is quietly mutating" - piece by 中共中央团校的副教授丛培影 Central Communist Youth League School associate professor Cong Peiying
Discourse Power 05/02/2022 - by Tuvia Gering “The Russian-Ukrainian war will alter the strategic direction of Russian-Chinese relations... China will undoubtedly be a great asset in the Russian economy's future recovery and development” According to Prof. Yang Guangbin, dean of Renmin University of China's School of International Studies, "Russian resistance" to the Western-led global order predates the Russia-Ukraine conflict and is part of a century-long struggle between Russian Slavs and capitalist White-Christian Anglo-Saxons.
I highly recommend Discourse Power - by Tuvia Gering, a free Substack focussed on Chinese foreign policy and specifically what Chinese scholars and strategists are saying.
Hong Kong and Macao
Hong Kong chief executive election 2022: John Lee reveals plans for city over next 5 years, with focus on housing woes, governance and competitiveness | South China Morning Post The sole candidate in Hong Kong’s leadership election has unveiled a manifesto laying out his plans for the city over the next five years, with a focus on tackling chronic housing problems, strengthening governance and building a caring society, while maintaining competitiveness.
Hong Kong's axed Human Rights Press Awards to be hosted by Arizona State University from 2023 - Hong Kong Free Press HKFP Arizona State University’s journalism school professor Jeffrey Timmermans, an ex-governor of Hong Kong’s Foreign Correspondents’ Club, told HKFP that “all past winners should be recognised” after the 2022 awards were axed over legal “red lines.”
Macau Gaming Income Falls to New Low on China Omicron Outbreaks - Bloomberg Gross gaming revenue dropped to about 2.68 billion patacas ($331 million), according to the Gaming Inspection and Coordination Bureau. The results were slightly lower the median analyst estimate of a 66.5% year-on-year decline. In March, the city already reported a 56% drop in gaming revenue.
World Press Freedom Day: Hong Kong nosedives in press freedom ranking - below Cambodia, Somalia, Sri Lanka - Hong Kong Free Press HKFP Hong Kong, a regional media hub for both international and local media, has been steadily slipping down the table under Chinese rule. In the last year alone it has plunged 68 places to 148th, sandwiching the international business hub between the Philippines and Turkey.
Hong Kong in Transition: 1995-2020 David Clarke's open access photographic archive for anyone interested in Hong Kong and its history.
Tech and Media
India Accuses Xiaomi of Forex Violations in Latest China Clash - Bloomberg India accused Xiaomi Corp. of breaching the country’s foreign-exchange laws and seized 55.51 billion rupees ($726 million) from a local unit of the smartphone maker, in India’s latest clash with a Chinese company over their activities in the market. India’s anti-money-laundering agency took control of the bank accounts of Xiaomi Technology India under the provisions of the Foreign Exchange Management Act, it said in a statement
Society, Arts, Sports, Culture and History
Update: 8th person rescued from building collapse in Changsha after 79 hours - Global Times At around 7:20 pm Monday, an eighth person was rescued from the building collapse in Changsha, Central China’s Hunan Province, after nearly 79 hours. The residential building collapse on Friday trapped 23 people, with 39 more believed to be missing...On Sunday afternoon, the Ministry of Housing and Urban-Rural Development held a video conference in Changsha, vowing to carry out a thorough investigation of commercial self-built buildings across the country, calling on local governments to earnestly learn lessons from this most recent building collapse, and effectively prevent and curb similar major work safety accidents.
Energy, Environment, Science and Health
Behind China’s New Botanical Garden, a Decadeslong Struggle - SixthTone On April 18, 2022, the China National Botanical Garden officially opened its doors to the public — almost 80 years after it was first proposed. And while he didn’t live to see it happen, no one loomed larger over last month’s ceremony than Hu Xiansu, the man who spent his entire career trying to bring the garden to life.