driving the day
1. COVID-19 testing needs an upgrade
This morning, the National Health Commission (NHC) dropped the latest stats on COVID-19 numbers.
On May 25, China reported (NHC):
- Seven new confirmed COVID-19 cases, all of which were imported from abroad
- 29 new asymptomatic cases, down from 40 the day before
That makes 18 new confirmed cases in the past two days, after only 13 had been reported in the seven days previous.
On Monday, the Wuhan health commission said it would release the results of its citywide testing drive soon.
We’ve already got some preliminary figures (The Paper):
- From May 15 to May 23, Wuhan tested 6,501,302 people in total.
- From May 15 to May 24, Wuhan reported 218 new asymptomatic cases, and one confirmed case.
The big question:How contagious are asymptomatic carriers?
2. Business resumption still struggling
Aaaaaaand we’re back – with updated business resumption numbers as of May 26.
Super keen Tip Sheet readers will have seen that we haven’t been updating our indices as regularly recently.
It’s not (completely) our fault:
- There have been fewer releases of the official data points off of which we calculate our indices in recent weeks.
Good news resumption fans:
- After some digging, we’ve been able to refine our methodology – and very slightly revise the data series from the past month.
The big picture hasn’t changed: Rates of business resumption continue to level off – showing a concerning trajectory.
- The Trivium National Business Activity Index indicates that China’s economy is operating at 87.3% of typical output, showing marginal improvement from the 82.8% seen a month ago on April 26.
- The Trivium National Large Enterprise Activity Index indicates that China’s large enterprises are operating at 87.7% of typical output, up from the 84.2% seen on April 26.
- The Trivium National SME Activity Index indicates that China’s small businesses are operating at 87.0% of typical output, up from 81.9% on April 26.
One caveat: Our indices are weighted toward industrial companies. If they included the services sector, resumption rates would likely be even lower.
The bottom line: We’re still a long way from normal.
Getting China back to work
3. Xi gives Hubei some love
On Sunday, Xi Jinping sat down with the Hubei delegation to the National People’s Congress.
He kicked things off by acknowledging the struggles that the province has faced in dealing with COVID-19 (Xinhua):
- “The people of Hubei and the people of Wuhan deserve to be called heroes.”
Now that the virus looks to be under control, the priority is how to return to some sort of normalcy:
- “We need to speed up the resumption of work and production, and the resumption of commerce and markets.”
Xi said that the central authorities will offer help:
- “Central [Party] and state institutions, as well as centrally [controlled] SOEs will continue to increase the strength of their…support measures.”
Get smart: Getting Hubei up and running again is the last piece of the puzzle with regards to resuming economic activity.
Get smarter: For most of the country, China’s response to COVID-19 has bolstered faith in the Party. But in Hubei, the picture is more complicated, as many were affected by the initial botched response. A priority for Xi and the other top leadership is to boost the Party’s image in Hubei.
4. NPC lays out ambitious legislative plan
On Monday, National People’s Congress (NPC) Chairman Li Zhanshu delivered the NPC’s annual work report.
The NPC will prioritize the drafting of 10 new laws:
- Yangtze River Protection Law
- Rural Revitalization Promotion Law
- Futures Law
- Hainan Free Trade Port Law
- Social Assistance Law
- Veterans Protection Law
- Biosecurity Law
- Personal Information Protection Law
- Data Security Law
- Export Control Law
And will look to amend 15 laws:
- Patent Law
- Wildlife Protection Law
- Law on the Prevention and Control of Infectious Diseases
- Frontier Health and Quarantine Law
- Emergency Response Law
- Vocational Education Law
- Administrative Penalties Law
- People’s Armed Police Law
- Anti-Money Laundering Law
- People’s Bank of China Law
- Commercial Bank Law
- Insurance Law
- Organic Law of National People’s Congress and Rules of Procedure
- Electoral Law
- National Flag Law
Finally, they have also promised to pass an amendment to the Criminal Law.
Get smart: This is a crazy ambitious agenda. Last year the NPC only sought todraft or amend 14 laws. They are aiming for 25 this year.
5. The case of the missing adjective
Eagle-eyed readers may have noticed an interesting omission from the Government Work Report (GWR).
- Namely, a reference to the “peaceful” reunification of Taiwan with the mainland.
Important context: Previous GWRs have contained the set phrase implying Beijing’s preference for a peaceful resolution of the Taiwan question.
There are several possible reasons for this small, but highly important difference:
- The omission represents Beijing’s hardening stance against Taiwan.
- It was a typo on the part of the drafters.
- The “peaceful” was implied.
But our favorite explanation came from Chinese state media (CCTV via Sina):
- “The length of the [GWR] has…been greatly reduced.”
- “[At] only 10,000 words this year, [this] is the shortest [GWR] in recent years.”
Our take: The word count argument seems pretty flimsy. It’s hard to believe that drafters would omit such an important word from a key section of the report.
In any case, officials are now pointedly emphasizing the word “peaceful.”
- On Sunday, Vice Premier Wang Yang met with the Taiwan delegation to the National People’s Congress, where he stressed “upholding the fundamental principles of ’peaceful reunification.’” (China Daily)
Get smart: Wang Yang oversees the Taiwan portfolio, so we can be confident that “peaceful reunification” is still the priority.
So what happened? It’s not clear.
- If Beijing was really planning such a majorchange in policy, we don’t think they would back down so quickly. That’s not the way Xi Dada rolls.
- But it’s also disconcerting that the report drafters did not foresee the uncertainty that removing “peaceful” would cause.