1. China opens up the pork reserves
In a notice released on Tuesday, the China Merchandise Reserve Management Center (CMRMC) announced it will release 10,000 metric tons of frozen pork from its reserve through auction.
So who is CMRMC?
- It’s essentially a subsidiary ofCOFCO Corporation, the state-owned food processing behemoth.
The details of the pork release:
- A three-hour auction will be held Thursday withpre-vetted companies.
- Each company canpurchase up to 300 tons of frozen pork.
CNN reports the soon-to-be-released pork was previously imported from:
- United States
- United Kingdom
Some context: Pork prices have soared in recent weeks due to the African Swine Fever outbreak.
More context: Government agencies have come up with a series of policy measures to stabilize pork prices and promote pork production (see September 11 Tip Sheet).
Get smart: 10,000 metric tons is only part of the national pork reserve. Expect CMRMC torelease more pork soon,to further containprices in the lead up to the PRC’s 70th anniversary celebration on October 1.
2.Xi promotes advancedmanufacturing
Xi continued his travels in Henan on Tuesday, headingup to the provincial capital Zhengzhou.
According to reports, he made three stopsin the city at:
- Zhengzhou Coal Mining Machinery Group (ZMJ)
- The Yellow River Museum
- Yellow River National Geological Park
At ZMJ, Xi stressed the importance of manufacturing (Xinhua):
- “Manufacturing is the important foundation ofthe real economy.”
- “Self-reliance is the starting point for our struggle.”
- “Although our manufacturing industry is the biggest in the world, [we] still need to make progress … moving up the value chain.”
Get smart: Upgrading the manufacturing sector has risen to the top of the economic agenda recently (see September 10 Tip Sheet).
Get smarter: Xi has also made clear that protecting the environment is one of his top priorities. But by visiting one of the world’s largest coal mining equipment manufacturers, he is signaling that fossil fuels still have an important role to play in his “beautiful China.”
3. Привет Mr. Premier
Yesterday, Premier Li Keqiang met with his Russian counterpart, Dmitry Medvedev, in St. Petersburg.
Some context: Li’s in town for the 24th regular meeting between Chinese and Russian heads of government – part of a three-day state visit to Russia.
In a weekend interview with Russian News Agency TASS, Li said:
- “We will use this opportunity to integrate China’s industrial, capital and market advantages with Russia’s strengths in resources, technology and talent to lend new impetus to our economic and social progress.”
And use it they did.
At the meeting, the two premiers agreed to further enhance cooperation in:
- Science and innovation
- Nuclear power
Li also reiterated the goal to double annual bilateral trade to USD 200 billion by 2024 (see June 6 Tip Sheet).
Of course, Medvedev was completely on board (Xinhua):
- “It is Russia’s priority of foreign policy to develop ties with China as it accords with Russia’s own needs.”
Get smart: China and Russia were already tight because of shared strategic outlooks. Now the US-China trade war is pushing their economies closer together as China looks to Russia to make up for energy and agricultural products previously imported from the US.
4.Government wants to hear from businesses
Limited access to the policymaking process is a big problem for businesses operating in China.
Increasingly, the government seems to be realizingthis fact.
On Tuesday, China’s macro planner (NDRC) issued a document geared towardgiving businesseseasier input into policymaking. Specifically, the new regs focus on:
- Industry development and reform
- Market access
- Environmental protection
- Production safety
- Procurement and bidding
- Industrial standards
That’s not all. The government will also accept input on some macro policies, including long-term economic plans, opening-up policies, and major reform plans.
And check this out. The government will not be allowed to simply ignore suggestions from business.
- The new policy requires that the government communicate the reasoning behind any rejection of advice from businesses.
And here’s the kicker – a policy can be changed if there’s widespread grumbling among industry players.
Sounds almost too good to be true?
Well, there’s a catch: The government can choose who they want to listen to (NDRC):
- “We should scientifically and rationally select the representatives of entrepreneurs to participate in the formulation of enterprise-related policies, taking into account different [kinds of] enterprises.”
Get smart: The push to promote a better business environment continues. But getting the government to actually listen to businesses is an uphill battle.
5.Shenzhen mandates that ride-hailing vehicles be electric
On Monday, the Shenzhen Press Group reported that the city’s government has passed new draft regulations on ride-hailing…at least “in principle.”
The big news:
- All new cars providing ride-hailing services will soon need to be pure battery-poweredelectric vehicles (BEVs).
This isn’t totally new.
- Last year, Kunming also said it would only register BEVs for new ride-hailing vehicles, starting in 2019.
It’s still unclear when Shenzhen will enforce the requirement.
Some context: Approximately 58,000 vehicles are presently registered to provide ride-hailing services in Shenzhen.
Get smart: Requiring the use of more BEVs should decrease air pollution. That’s the whole point.
6.State Council promotes sports
Get your skis out.
China is promising to promote winter sports – and all sports.
That’s according to new regulations released by the State Council General Office on Tuesday that seek to turn the sports industry into a “pillar” of the national economy (Xinhua).
Some context: In 2014, the State Council released Document No. 46, which aims to foster a sports industry with annual output of RMB 5 trillion by 2025.
Here’s some of what the government plans to do:
- Give tax breaks to companies in the sports industry
- Make it easier to hold sporting events in public stadiums
- Increase the number of public exercise facilities
- Promote interscholastic sports tournaments
Get smart: It’s hard to measure the sports industry, because it’s not exactly clear what all is included. That said, it is undeniable that sports of all kinds are growing quickly in China – and will continue to do so in coming years.