Driving the Day
1. Government responds to national health emergency
The coronavirus first discovered in Wuhan 40+ days ago is spreading – quickly.
The latest stats:
- 446confirmed cases
- 139suspected cases
- 25 cured
- 9 dead
The virus has spread throughout the country, including:
It’s going global. The first confirmed case in the US was reported on Wednesday.
Following top leaders’ directives (see yesterday’s Tip Sheet), governments at all levels have mobilized to address the issue.
- 1,200 beds have been added on top of the existing 800 beds in Wuhan to house confirmed patients.
- The Wuhan government strengthened control over themovement of people in and out of the city.
- The Ministry of Transport and the Civil Aviation Administration of China ordered free refunds to travelers who cancel tickets to or from Wuhan by air, railway, road, or water.
- The National Healthcare Security Administration has said it will reimburse the cost ofall drugs and medical services used to fight the coronavirus.
Get smart: The world’s largest annual migration for the Spring Festival holiday is already well underway. Whether authorities can keep the virus from spreading is a HUGE question.
AP: Washington man is 1st in US to catch new virus from China
2.Slack for local governments whacked by lack of tax stacks
If you’re a regular Tip Sheet reader, you know that government officials have gone hog wild with tax and fee reductions over the past year.
Business owners are happy with the arrangement…cash-strapped local governments not so much.
That’s why the Ministry of Finance (MoF) has opted to recalibrate the way it grades local governments on their financial management.
- Beginning in 2020, the MoF will no longer assess tax revenue as a proportion of overall budget revenue when evaluating local financial performance.
Get smart: That’s a big weight off the chest of local officials who were worried about their job evaluations.
Get smarter: It’s also a recognition on the part of policymakers that tax revenue will continue to be low at the local level.
3. Shandong gets it wrong
On January 21, the Shandong provincial government held anembarrassing press conference.
Turns out, the province’s 2018 GDP numbers had to be revised down.
Like, to the bottom of the Marianas Trench down.
Shandong’s GDP in 2018 is now estimated at RMB 6,664.9 billion—a reduction of RMB 982.1 billion, or nearly 13%.
Lu Wanming, deputy director of the Shandong stats bureau explained that his department was looking to correct errors in its data collection process stemming from problems with source data and “the complexity of survey objects.”
Our take: It’s normal for provincial governments to revise their GDP figures as more data becomes available, but Shandong’s adjustment stretches credulity. Something fishy is going on here.
Get smart: Bad data impedes good policymaking.
What to watch: We have a feeling Shandong willnot be the last province to make a major data revision.
China News: 山东省2018年GDP调整为66649亿元
4.Han Zheng defends globalization at Davos
Yesterday, Vice Premier Han Zheng gave a speech at the World Economic Forum in Davos, Switzerland.
Han channeled Xi à la Davos 2017 – coming out strongly in defense of globalization (Xinhua):
- “[We need to] build an inclusive and open world economy and uphold multilateralism in support of economic globalization.”
He said that international affairs shouldn’t be dictated by any one country (Reuters):
- “Unilateral and protectionist practices which run counter to the global trend will lead nowhere.”
I think we all know who Han was talking about.
Han said that China has embraced globalization (Xinhua):
- “[We]succeeded in transforming a closed and semi-closed economy into a fully open economy.”
- “Openness has become a trademark of today’s China.”
There is more to come, according to Han. China will:
- Continue to widen market access for foreign investors and cut the negative list
- Import more goods and services
- Further improve the business environment
Get smart: Although China is becoming more open, it still lags far behind most advanced economies in terms of openness.
Xinhua: Chinese vice premier calls for joint efforts to bolster economic globalization
Reuters:China vice-premier says will continue to open up, prepared for all challenges
5.Xi in Yunnan, part deux
Today, Xinhua released more juicy details on Xi’s inspection tour to Yunnan, which concluded yesterday.
Apart from focusing on poverty alleviation, rural revitalization, and environmental protection (see yesterday’s Tip Sheet) – Xi was all about political education.
On Sunday Xi visited the memorial hall of Marxist philosopher Ai Siqi in Heshun Village.
Xi wants more people to be like Ai (Xinhua 1):
- “[China] needs a large number of talented individuals who can explain the adaptation of Marxism to the Chinese context well and who can use easy-to-understand language to spread the Party’s new theories to more ordinary households.”
On Monday, Xi visited the Yunnan Normal University campus and mused about socialist training for the masses (Xinhua 2):
- “The purpose of our education is to train socialist builders and successors.”
And on Tuesday afternoon, while listening to work reports from Yunnan officials, Xi noted that while the “stay true to the Party’s founding mission” study campaign might have concluded:
- “… there is a time limit for study campaigns, but an infinite period for putting them into practice.”
Get smart: As we pointed out yesterday, these trips signal Xi’s policy priorities. Political education continues to be at the top of the list.