Driving the Day
1. Xi tells ambassadors to follow orders
On Wednesday, Xi Jinping met with Chinese ambassadors from all over the world at the 2019 Annual Overseas Diplomats Work Conference.
Some context: These meetings used to be held every five years, but since 2016 Xi has made them annual affairs.
Why it matters: The increased frequency of these meetings reflects Xi’s greater focus on foreign affairs.
After a meet and greet with Xi, the ambassadors got down to business, led by State Councilor Wang Yi.
Wang urged the diplomats to take the long view (CPC):
- “The meeting deeply analyzed the current international situation and the historical position of China’s development.”
But more importantly, he instructed them to do as they are told (Xinhua):
- “At the work conference, the envoys were urged to fully carry out the plans and arrangements of diplomatic work of the CPC Central Committee under the guidance of Xi Jinping Thought on Diplomacy and to keep on working with great determination.”
Get smart: The Ministry of Foreign Affairs has seen more turnover in its leadership than any other central ministry this year. The shakeup appears to be about increasing loyalty among China’s diplomats.
CPC People: 习近平会见2019年度驻外使节工作会议与会使节
Xinhua: Xi meets Chinese diplomatic envoys to foreign countries
2.Xi tries to fix the Party
Back in May, Xi Jinping launched a new education campaign encouraging cadres to stay true to Party’s founding mission (see May 14 Tip Sheet).
Xi is using the campaign to try to address some of the Party’s deficiencies.
The campaign’s official “curriculum” was released yesterday.
Cadres are required to:
- Implement Xi Jinping’s instruction, obvs
- Carry out major tasks related to risk prevention, supply-side structural reform, controlling core technologies, and Party-building
- Alleviate burdens on grassroots officials (see March 12 tip sheet)
- Ensure that relatives are not engaged in untoward business
- Enhance grassroots Party-building, including in private companies
Cadres better not:
- Participate in unsanctioned seminars and forums
- Embezzlepoverty alleviation funds
- Falsify statistics
- Provide cover for organized crime (see Jan 26 tip sheet)
Get smart: This campaign differs from previous campaigns in its focus on specific issues. That makes it more likely to effect actual change.
3. No trade deal in sight
On Wednesday, US President Donald Trump threatened more tariffs on Chinese goods (Bloomberg):
- “We have a long way to go as far as tariffs where China is concerned, if we want.”
- “We have another $325 billion we can put a tariff on, if we want.”
Surprise, surprise…Ministry of Foreign Affairs spokesperson Geng Shuang does not think that’s a good idea (MoFA):
- “[I]f the US does impose new tariffs, that will indeed set new obstacles for the trade talks.”
- “There will be a even longer way to go before reaching a deal.”
- “China will firmly defend its own interests.”
Get smart: Trump’s hot and cold nature on the trade war has leaders in Beijing increasingly convinced that he is not a person they can do business with.
Get smarter: Increasingly, Beijing is hoping that it can wait out Trump – and deal with a new US administration.
4.China doubles down on the platform economy
The State Council held its weekly executive meeting on Wednesday.
Top of the agenda: The “Internet Plus” initiative.
Premier Li Keqiang hammered home the importance of building a legal and regulatory framework to strengthen the growth of the “platform economy”, specifically by:
- Supporting the development of an internet-driven service sector
- Pushing forward industrial upgrading and intelligent manufacturing
Quick refresher: The term “platform economy” refers both to businesses like Taobao and Didi whose model is based on playing matchmaker between service providers and users, as well as tech frameworks on which digital products can be developed, like Alibaba Cloud.
To keep the sector hopping, Li wants to:
- Relax registration requirements for businesses in emerging industries
- Improve employment policies for platform enterprises
- Strengthen IP protection and patent laws
- Encourage support from financial institutions
- Clamp down on online fraud and misuse of user data
Get smart: Top officials know that the future economy will be powered by the internet. That’s why we see concerted efforts on the part of the government to facilitate development of the tech sector.
Gov.cn:李克强主持召开国务院常务会议 确定支持平台经济健康发展的措施 壮大优结构促升级增就业的新动能等
5.State Council looks to boost IP protection
Intellectual property issues were also on the docket of yesterday’s State Council meeting.
The meeting committed to stepping up IP protection through the accelerated development of verification, examination, and enforcement mechanisms.
Premier Li Keqiang had this to say: (Gov.cn)
- “Further enhancing the protection of intellectual property rights is…required by scientific and technological innovation and essential for China’s greater opening-up.”
Li also highlighted the importance of getting new IP registered and protected:
- “[A] greater number of patents in core areas and with high value will be promoted.”
- “It is particularly important to increase the patent commercialization rate, which is relatively low at the moment.”
Get smart: As we’ve said before, China’s on a mission to convince the world it’s still a worthwhile place to do business. IP protection is a crucial piece of that puzzle.
Get smarter: This isn’t just about foreign companies. China also has an increasing amount of its own IP that needs protecting.