1. State Council hits familiar notes
The State Council got together for its weekly executive meetingon Monday.
No prizes for guessing what they talked about.
That’s right! Supporting the economic recovery.
Monday’s meeting wasn’t aboutnew ideas, but rather reiterating current policy.
The State Council stressed that:
- Liquidity will be maintained at reasonable and sufficient levels.
- There will be no “flood irrigation” when it comes to monetary policy.
- Liquidity will be directed in ways that help small firms.
The State Council also had a few words of praise for the financial sector:
- They noted that it had relieved the financial burden on firms by RMB 870 billion this year through a mix of deferred loan payments, fee reductions, and lower interest rates.
However, the State Council said that officials must do more.That includes:
- Rolling out more financial support policies for small firms
- Inspecting of illegal and unreasonable bank fees
- Preventing financial risks
Get smart: Similar messaging has been coming from the central bank and banking regulatorin recent weeks. In short:
- Monetary policy will stay the course.
- Small firms still need help.
- It is necessary to remain vigilant against financial risks.
2. Premier Li keeping tabs on stimulus spending
Monday’s State Council meeting discussed more than monetary policy(see previous entry).
Also on the agenda:How to get stimulus money to households and small businesses.
Some context: In May, the central government earmarked RMB 2 trillion to be directly transferred to lower-level governments to support struggling businesses and households (see June 2 Tip Sheet).
On Monday, Premier Li said that 97.8% of those funds have already been transferred to local governments.
But not all funds are making it to their intended targets (Gov.cn):
- “The next step is to guide cities and counties… to accelerate disbursement to companies and people.”
- “Where distribution is slow, or funds are lying idle, we must take necessary measures to rectify the situation.”
The government is adamant that this money not be misappropriated (Xinhua):
- “The allocation, disbursement and use of funds will be tracked on a regular basis.”
- “A special treasury account reconciliation mechanism will be set up for the directly funneled funds, to ensure clear bookkeeping, detailed usage, and matching accounts.”
- “Any fraudulent reporting, false claims, retention and embezzlement of the funds will be strictly dealt with.”
Get smart: China’s 2008-09 stimulus resulted in a lot of wasteful spending. Authorities are determined not to repeat those mistakes.
3. More work needed onData Security Law
On Sunday, the public commenting period closed for the all-important Data Security Law .
Some context: The legislature introduced the law in June(see July 7 Tip Sheet).
The public had a thing or two to say about the draft law (Caixin):
- It received 651 comments over 45 days.
Caixin summarized the criticisms of experts:
- “This draft hasvague articles, overly broad definition of regulatory bodies, and possible conflicts between jurisdictions.”
- “Many provisions need to be further revised.”
In particular, two things have raised eyebrows within the commentariat:
- The draft law authorizes local governments and industry regulators to formulate their own catalogue of key data sets subject to high-level security protection measures. That could cause a profusion of different catalogues,hampering the flow of data.
- The law does not allow for judicial review of government decisions related data security reviews.
Get smart: The law is hugely important for Chinese and foreign companies alike.
Get smarter: The legislature is not expected to review the draft again in 2020. Debate and speculation about the law will continue until it does.
You can do anything. But never go against the family.
- That’s the lesson that Cai Xia, a retired Central Party School professor, learned the hard way.
Critiques by Cai of Xi Jinping were leaked in June.
Cai was biting (CDT):
- “Can you even still call this a political party? It is no longer a political party.”
- “It is just a tool in the hands of a mafia boss.”
- “I think the best solution is of course to replace the person.”
- “If this person doesn’t go, then our Party has no chance.”
No points for guessing who “the person” is.
Comments like that don’t fly in Xi Jinping’s China.
- On Monday, the Central Party School announced that Cai had been expelled from the Party and her retirement benefits cancelled.
Cai is not alone. Last month:
- Property tycoon Ren Zhiqiang was expelled from the Party after publicly criticizing the leadership’s coronavirus response.
- Tsinghua University law professor Xu Zhangrun was fired after publishing criticisms of China’s leadership.
Get smart: The range of acceptable discourse has narrowed dramatically under Xi Jinping.
Get smarter: Cai, Ren, and Xu’s real sin wasn’t criticizing the Party – it was criticizing the Party in public.
5. Guangdong sees no further virus spread
This morning, the National Health Commission (NHC) dropped the latest COVID-19 stats.
On Monday, China reported no new domestically transmitted cases for the second day in a row (NHC):
- However, there were 22 new imported cases – the same number as on Sunday.
- There were also 17 new asymptomatic cases – 16 of which were imported from abroad.
- The one domestically transmitted asymptomatic case was reported in Xinjiang.
Local infections reported in Guangdong over the weekend (see yesterday’s Tip Sheet)do not seem to have spread further.
- On Monday, Guangdong reported only one new confirmed case and six new asymptomatic cases – all imported from abroad.
Since the first Guangdong case was discovered on Friday, Shenzhen authorities have:
- Tested more than 256,000 people – with 210,301 people testing negative. The remaining test results are still pending.
- Tested 1,545 environmental samples and 1,125 food samples from the supermarket where the first case works. So far, all samples have tested negative for COVID-19.
- Set up a centralized screening center to disinfect and sample-test all imported frozen food products
Get smart: Local authorities are getting more and more skilled at quashing potential outbreaks before they spread.