Driving the Day
1.Xi wheels and deals in France
Xi Jinping held talks with French President Emmanuel Macron in Paris on Monday.
Some context: Macron has been advocating for a much tougher European approach to China. On Friday, when discussing China, he said:
- “The period of European naiveté is over.”
You wouldn’t know anything was amiss from the Xinhua readout, though:
- “Chinese President Xi Jinping and his French counterpart, Emmanuel Macron, on Monday agreed to…forge a more solid, stable and vibrant China-France comprehensive strategic partnership.”
Macron’s wariness did not stop the two sides from doing some business (France24):
- “A 300 plane order from China for Airbus planes is worth about €30 billion euros ($33.94 billion), a French presidency official said.”
- “France’s Fives and China National Building Materials Group signed a €1 billion deal to cooperate on energy savings in developing countries. CMA-CGM and China State Shipbulding Corporation signed €1.2 billion deal to build 10 containers.”
Get smart: Macron will have a difficult time forging a united European approach to China. That’s because several EU capitals (e.g. Budapest, Athens) are as skeptical of Brussels as they are of Beijing.
What to watch: Xi is set to meet with Macron, German Chancellor Angela Merkel, and European Commission President Jean-Claude Juncker today.
2.Lou Jiwei retires
One of China’s most outspoken economic reformers has retired, Caixin scoops:
- “Lou Jiwei, an outspoken former finance minister who has headed China’s 2 trillion yuan ($297 billion) social security fund since 2016, has retired from the post.”
Before heading the social security fund, Lou had a long career as an economic policymaker, most recently as minister of finance:
- “Lou, China’s finance minister between 2013 and 2016, has been considered one of the most outspoken reformists in the Chinese government.”
- “As finance minister, Lou influenced tax system reforms that, for example, replaced China’s business tax with a value-added tax, introduced resource and environmental tax regulations, and pushed for property taxes.”
Why it matters: Alongside the retirement of other well-known reformers like long-time central bank governor Zhou Xiaochuan, Lou’s retirement feeds into a sense that there is a changing of the economic guard.
Get smart: That will lead many to question whether the next generation can be successful in moving financial reform forward. But China has a deeper bench than many folks think.
Now, it’s up to the likes of Yi Gang and Xu Zhong (both at the central bank) to move the agenda forward.
Caixin: Exclusive: China’s Social Security Fund Chief Lou Jiwei Retires
3.Li Keqiang promises more protections for foreign businesses
On Monday, Premier Li Keqiang met with business leaders attending the China Development Forum.
Five lucky global CEOs were permitted to ask questions:
- Daimler Chairman Dieter Zetsche
- IBM Chairman Ginni Rometty
- BMW Chairman Harald Krüger
- Pfizer CEO Albert Bourla
- Rio Tinto CEO Jean-Sebastien Jacques
Li Keqiang’s message – China wants foreign business to feel welcome (gov.cn):
- “China’s large, open door will become ever larger and ever more open.”
Li touted the recently passed Foreign Investment Law (FIL) as proof of China’s commitment to further opening.
He also tried to address concerns that the law had been passed quickly and without sufficient input from foreign businesses:
- “Based on…the responses of foreign businesses, we will continue to roll out a series of specific implementing measures that will strengthen the protections for foreign companies’ legal rights.”
Get smart: The Chinese government knows that the FIL left many foreign businesses unsatisfied. The question is whether or not forthcoming implementing measures can satisfy those complaints.
4.Wang Yang urges more balanced approach inXinjiang
Wang Yang, head of the country’s top political advisory body (CPPCC), just got back from Xinjiang.
Some context: As head of the CPPCC, Wang oversees policies towards minorities and religion.
Wang was in Xinjiang from March 20-25. He traveled to Kashgar, Tumshuq, Yili, and Urumqi.
Not surprisingly, Wang’s visit focused on “stability maintenance.”
Some context: There have been repeated instances of unrest – and terrorist attacks– in Xinjiang since 2009. To combat this, the authorities have turned the region into a police state, interring as many as a million people in re-education camps.
Wang told officials that they need to take a balanced approach (CPC People):
- “[We should] resolutely oppose and crack down onseparatist forces, and at the same time guarantee the same rights and obligations of all ethnic groups in accordance with the law.”
Why that’s notable: Last year, Xinjiang policy only focused on the “cracking down,” and totally ignored “guaranteeing rights” (see last year’s Xinhua article below).
Get smart: The Xinjiang policy has become increasingly controversial even among Chinese policymakers, some of whom may realize it’sengendering a generation of disaffected Uyghurs.
Our take: This policy shift is way too little, way too late.
5.NDRC gets a mini makeover
China’s mini State Council, the NDRC, is quietly restructuring.
One example:TheWestern Development Department has been rechristened as the Regional Opening Department.
Why it matters: It shows that the Western Development strategy has been subsumed under the Belt and Road Initiative (BRI).
Practically, not much has changed:
- Zhao Ai remains head of the department.
- The department still houses the office of the BRI leading small group.
- NDRC Vice Chairman Ning Jizhe still has responsibility for the office.
That’s not the only new department.
- A readout from a March 5 meeting on poverty alleviation revealed another new department, the Evaluation and Supervision Department (ESD).
The ESD will focus on a perennial problem – evaluating the success of policy implementation.
Our question: How big will the ESD’s remit be? Will it only evaluate the NDRC’s work, or will it also have the authority to evaluate other government agencies?