Driving the Day
1. Keeping Labor Day local
This morning, the National Health Commission (NHC) dropped the latest numbers for domestic COVID-19 cases.
On April 28 (NHC):
- There were 22 new confirmed cases, 21, of which were imported. Both are the highest number since April 21.
- The one local case was from Shenzhen in Guangdong province.
- There were also 26 new asymptomatic infections, of which five were imported – down from 40 asymptomatic cases with three imported on April 27.
Here’s good news: There were no local cases in Heilongjiang province for the first time since April 13.
The virus looks under control, but things are still far from normal.
Case in point: This year’sfive-day Labor Day holiday, whichstartsFriday.
- Cities in at least eight provinces have advised students and their families not to leave the city or province during the holiday (see Monday’s Tip Sheet).
- Tourist sites across the country all put a cap on daily visitor numbers and people will need to book tickets in advance.
Get smart: People will still get out, but the trips will be shorter and more localized than in previous years.
2. Government takes hands off approach to new infrastructure
The State Council did its thing Tuesday, holding its weekly executive meeting.
Top of the agenda: Boosting investment in “new infrastructure.”
Some context: The government has identified investment in new infrastructure as a policy priority since late March (see March 27 Tip Sheet).
More context: The NDRC clarified the definition of new infrastructure last week (see April 21 Tip Sheet).
Tuesday’s State Council meeting identified “information networks” as the top priority within the new infrastructure push.
- Efficient information networks are an economic multiplier that will increase productivity in numerous other industries.
- The government describes this as “using one industry to pull forward a hundred industries.”
Check this: The government says it doesn’t want to get too involved, per Premier Li Keqiang:
- “The government is not going to get itself involved every step of the way.”
- “Application is key to the development of the information networks, and the market plays a vital role in shaping application.”
- “It is important to… attract private investment in this process.”
Get smart: In 2008/2009 a government spending spree to combat the global financial crisis led to scads of misallocated capital. The government is focused on not repeating those mistakes in its response to COVID-19.
Gov.cn: 李克强主持召开国务院常务会议 听取2019年全国两会建议提案办理情况汇报等
3. Consumers still not warming up
For those expecting a consumption binge as China emerges from lockdown, the central bank (PBoC) has some bad news for you.
According to a first quarter survey by the PBoC of 20,000 depositors in 50 cities (The Paper):
- 53% of respondents said they are inclined to save more, up 7.3% from the previous quarter.
- Only 22% said they intended to consume more, down 6%.
- And 25% said they would invest more, down 1.3%.
The propensity to save seems to be a function of unease about job security, with 42.3% of respondents saying that the unemployment outlook was either difficult or uncertain.
And get this: The unease looks likely to dampen housing demand.
- “In the next three months, 19.2% of residents intend to buy a house, compared with 21.5% in the third quarter of last year.”
Get smart: China’s authorities have been promoting the idea that the end of the lockdown would bring a wave of “revenge spending” that would reinvigorate the consumer economy. That’s looking increasingly unlikely.
The Paper: 央行调查：一季度倾向“更多消费”的居民占比下降6个百分点
4.Ringing Iran, Calling Nepal
Xi Jinping was back at iton Monday, making calls to world leaders with expressions of solidarity in the fight against COVID-19.
Some context: Regular Tip Sheet readers know that Xi Jinping and Premier Li Keqiang been on a major public relations kick in recent weeks, looking to shore up China’s international image with frequent phone calls to foreign bigwigs.
This time, Xi phoned up:
- Iranian President Hassan Rouhani
- Nepali President Bidhya Devi Bhandari
By now, Xi’s calls to foreign leaders follow a fairly standard formula as exemplified by his comments to Rouhani (Xinhua 1):
- “Xi…stressed that in the face of this major global public health emergency, the international community must strengthen coordination and cooperation to…overcome the epidemic.”
- “China is willing to work with Iran and other international communities to…fight against the epidemic and contribute to the maintenance of world public health and safety.”
Xi also took a not-so-veiled swipe at the US:
- “Unilateral sanctions hinder the efforts of Iran and the international community to fight the epidemic.”
- “China…firmly supports Iran in safeguarding national sovereignty and dignity.”
Get smart: Beijing wants to spin its role in global COVID containment efforts as positively as possible.
5. MEE divides and conquers
Yesterday, the Ministry of Environment and Ecology (MEE) got a new minister – Huang Runqiu.
What that means: The top two positions at the ministry, usually held by one person, are now held by two.
- As avid Tip Sheet readers know, Sun Jinlong already took over the gig as Party secretarytwo weeks ago (see April 14 Tip Sheet).
A little about Huang:
- He worked for 27 years at the Chengdu University of Technology, including 15 years as vice president.
- He’s been a vice minister of the MEE since March 2016.
- He’s a vice chairman of the Jiusan Society – one of the eight democratic parties of China.
Get smart: Having a non-Party member head a ministry is rare – but not unheard of, particularly for more technocratic ministries.
Two recent examples:
- Chen Zhu – minister of health from 2007-2013
- Wan Gang – minister of science and technology from 2007-2018
Get smarter: Appointing a non-Party member as minister is a clear sign that Beijing wants the most qualified person for the job.
What to watch:Having two people at the top could lead to better management of the MEE since the minister won’t have to spend time onboring Party stuff.
But…the move could also backfire if Sun and Huang don’t get along.
6.Two Sessions date fixed
It is decided.
Earlier today, the National People’s Congress Standing Committee (NPCSC) – China’s legislature – agreed on a date for its annual meeting.
- It’s all going down on May 21 – that’s when the political advisory body (CPPCC) begins its annual session.
- The NPC’s annual session will begin the day after, on May 22.
Some context: Together, the NPC and CPPCC annual sessions are known astheTwo Sessions. The Two Sessionsis an important annual political event, convened to approve the government’s work report, which signals policy priorities for the year to officials at all levels as well as the business community.
More context: The Two Sessions was originally scheduled for March 3this year, but was postponed indefinitely due to the COVID-19 outbreak (see February 17 Tip Sheet).
Get smart: Having thousands of delegates, including key local officials, transported to Beijing means that the government is confident the epidemic situation is well and truly under control.
China’s top legislature to open annual session on May 22