driving the day
1. Politburo signals policy continuity into H2
Get excited: The Politburo held its monthly meeting on Thursday.
Top of the agenda: Getting the Party’s 5thplenum on the calendar.
- The plenum will take place in October
- Party officials will use the plenum to discuss the 14th Five Year Plan and long-term development goals out to 2035
After getting that out of the way, officials turned to more a more pressing issue – assessing the economy.
Some context: At their July meeting each year, Politburo members assess economic performance in the first half of the year and lay out policy priorities for H2 – so it is a particularly important meeting on the econ front.
The headline: Officials are pleased as punch with where the economy stands (Gov.cn).
- “The economy has recovered steadily and the resumption of work and production has improved month by month.”
- “Economic growth in the second quarter was significantly better than expected.”
The bottom line: China’s top policymakers are happy with the economy’s positioning and the overall trajectory of policy – so there won’t be major policy adjustments in the second half of the year.
Go deeper: We’ve got a full rundown of thePolitburo’s macro policy discussion in
today’s China Markets Dispatch
. Make sure to check it out.
2. Stabilizing trade and investment
On Wednesday, the State Council did its thang, holding its weekly executive meeting.
Top of the agenda: Stabilizing trade and investment.
To get it all sorted, the meeting called for efforts to (Gov.cn 1):
- Enhance foreign trade enterprises’ ability to withstand risks, including viaexport credit insurance
- Encourage central, western, and north-eastern China to support labor-intensive foreign trade industries, in order to keepcompanies from moving labor intensive factories to other low-wage countries
- Improve the policy environment for attracting foreign investment
Finally, in a more concrete effort (Gov.cn 2):
- “The pilot program on the innovative development of trade in services will be expanded to cover parts of 21 provincial regions.”
Some context: The pilot program was first rolled out in February 2016 and then expanded in June 2018, covering telecommunications, tourism, engineering consulting, finance, and legal services in 17 cities and areas (see May 24, 2018 Tip Sheet).
Get smart: Amid worsening relations with the US and… a few more countries…the central government is keen on showing that China is open for business.
Get smarter:Policymakersare also very much looking forways to stabilize the external-facing part of the economyas part of broader efforts to keep the economic recovery on track.
Gov.cn:李克强主持召开国务院常务会议 部署进一步扩大开放稳外贸稳外资 决定深化服务贸易创新发展试点等
Gov.cn:China stresses stabilizing foreign trade and investment
21st Century Biz:国常会部署稳外贸外资 服务贸易试点将扩大到21个省份
3. Supporting migrant workers
Yesterday’s State Council executive meeting (see previous entry) didn’t just tout trade and investment, no sir.
Also on the agenda: Improving employment and entrepreneurship opportunities for migrant workers.
Some context: Migrant workers have been hard hit by the economic fallout from the COVID-19 pandemic. Without stable employment and with little work available, many have struggled to make ends meet.
To help struggling migrant workers, Premier Li Keqiang called for efforts to:
- Develop service and labor-intensive industries
- Implement employment support policies that treat urban residents and migrant workers equally
- Promote the urbanization of counties and towns
- Make the employment of migrant workers a condition for urban construction projects
In addition, first-time business owners that operate normally for at least six months can now apply for a one-time start-up subsidy.
Get smart: The central government has been trying to help migrant workers for a while now, with limited success.
Get smarter: Companies are still reluctant to begin hiring due to economic uncertainty, and migrant workers often lack the necessary capital to start their own businesses. These efforts by Li and Co. won’t square that circle.
Go deeper: Another huge factor holding back the employment of migrant workers is the fact that the cohort is quickly aging. For more on the challenge of an aging migrant workforce, check out
today’s China Markets Dispatch
4. NPCSC to meet next week
Mark your calendars!
On Wednesday, China’s top legislature (NPCSC) decided to hold its next bi-monthly session from August 8-11.
That’s a tad bit earlier than normal.
Some context:The NPCSC normally meets at the end of the month.
This time around, nine draft bills will be up for review (NPC Observer):
- The Urban Maintenance and Construction Tax Law
- The Deed Tax Law
- A revision to the Animal Epidemic Prevention Law
- An amendment to the Copyright Law
- A revision to the Juvenile Delinquency Prevention Law
- Amendments to the NPC Organic Law
- Amendments to the NPC Rules of Procedure
- Amendments to the National Flag Law
- Amendments to the National Emblem Law
Aaaand…there is more (Xinhua):
- The NPCSC will also listen to a report on several special studies for the 14th Five Year Plan (FYP).
Get smart: Despite the disruptions from COVID-19, the drafting of the 14th FYP looks to be largely on schedule.
Our question: What does the unusual timing mean for the Beidaihe Beach Party (i.e. the annual conclave for senior leaders usually held in the first half of August)?
5. Contain this
This morning, the National Health Commission (NHC) dropped the latest COVID-19 numbers.
On Wednesday, China reported 105 newly confirmed cases – up slightly from 101 on Tuesday (NHC):
- Only three of thesewere imported from abroad – same as on Tuesday.
- The other 102 were all domestically transmitted – up from 98 on Tuesday.
Of the 102 domestic cases (NHC):
- 96 were in Urumqi, Xinjiang – up from 89 on Tuesday.
- Five were in Dalian, Liaoning – down from eight on Tuesday.
- One was in Beijing – same as on Tuesday.
In addition (NHC):
- China reported 21 new asymptomatic cases on Wednesday – one of which was imported from abroad.
- Of the 96 cases in Urumqi, only eight were confirmed from existing asymptomatic cases.
- The new Beijing case, and the two cases confirmed in the city on Monday and Tuesday, are allmembers of the same family, with the first persongetting the virus inDalian.
Our take 1: The Xinjiang outbreak hasn’t peaked yet, but is largely contained within Urumqi.
Our take 2: The Dalian outbreak has peaked, and is winding down.
Our take 3: The Beijing mini outbreak is very much under control – with authorities testing more than 12,000 people living near the infected family and finding no spread so far.