politics policy
1. Trade deal review to be rescheduled
On Monday, we told you that the review of the US-China phase one trade deal originally scheduled for last weekend had been postponed (seeAugust 17 Tip Sheet).
Did you panic?
- We told you not to!
On Thursday, the Ministry of Commerce (MofCom) confirmed that the talks are still on.
MofCom spokesman Gao Feng gave this laconic reply to a journalist’s question on the status of the review (MofCom):
- “Both sides have agreed to hold a call in the near future.”
So there you have it!
So far, the US side has kept mum about the rescheduling (Reuters):
- “Two U.S. sources familiar with the plans said on Thursday no new meeting date has been scheduled.”
- “White House economic adviser Larry Kudlow did not comment on possible talks with Chinese officials.”
Get smart:Beijing wants to keep the trade deal alive at all costs. It’s the only point of light in an otherwise abysmal bilateral relationship.
Get smarter: The Trump administration doesn’t want to see the deal sunk either, since it’s got China buying literally tons of American agricultural products.
The big question:How will the two sides spin China’s failure to buy US goods at a rate consistent with its obligations?
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MofCom:商务部召开例行新闻发布会(2020年8月20日)
Reuters:U.S., China differ over plans for Phase 1 trade deal talks
2. Xi focuses on floods
Xi Jinping continued his trip to Anhui on Thursday (see yesterday’s Tip Sheet).
There is still relatively little reporting about the trip – but we expect to get more details soon.
Here is one thing we do know:On Thursday, Xi chaired a meeting to discuss the PLA’s efforts at flood control and disaster relief.
Xi has already mobilized A LOT of servicemen to battle the floods (Xinhua):
- “As of Wednesday, dispatches totaling more than 1.2 million head counts from the PLA and the People’s Armed Police Force and more than 300,000 from the militia had been made in flood control missions in 17 provincial-level regions.”
Xi’s message:
- “Xi stressed the need for the military to continue emergency rescue and disaster relief efforts, assist flood-hit areas in post-disaster recovery and reconstruction, and complete the follow-up tasks of flood control and disaster relief.”
Get smart: The Party has won a lot of popular support for its effective response to COVID-19. But those gains could all be lost if it is seen to be negligent in minimizing the negative impacts of the flooding.
The bigger picture: 2020. Is. The. Worst.
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Xinhua:Xi Focus: Xi instructs army to complete follow-up flood control work
3.Li Keqiang inspects Chongqing
Xi wasn’t the only one hitting the road yesterday(see previous entry).
On Thursday, Premier Li Keqiang was in Chongqing talking to local people and inspecting the impact of the aforementioned catastrophic seasonal flooding.
On his visit, Li inspected the under-construction Dashiqiao reservoir in Tongnan district, where he emphasized the importance of water conservancy projects in preventing disasters and improving people’s livelihoods.
- Li told the engineering personnel at the site to build the reservoir well.
Thanks for the tip, dude!
Li also:
- Paid a visit to the flood-ravaged village of Shuangba, asking the residents how the government could help them.
- Spoke with local merchants in the town of Ciqikou, asking about the impact of the deluge (and COVID-19) on their businesses.
Before leaving town, Li also did his bit for local business(Gov.cn 3):
- “[T]he Premier bought three bags of fried dough twists in a local snack store, supporting the business as a customer.”
What a guy!
Get smart: Between COVID-19 and flooding on a biblical scale, folks in southern China have had a rough go of it this year.
Get smarter:Li’s visit reinforces the message that the government is taking the people’s plight to heart and taking steps to alleviate it.
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Gov.cn:李克强来到重庆磁器口,用实际行动支持商家带动消费
Gov.cn:李克强来到重庆看望慰问受灾群众:勉励大家重建好家园
Gov.cn:Premier stresses support for business in Chongqing
Gov.cn:Premier stresses reservoir construction in flood-hit Chongqing
Gov.cn:Premier Li encourages Chongqing residents to rebuild flood-hit homes
4. Local governments twist Beijing’s arm over Budget Law
Yesterday, the State Council finallyreleased the new implementing regulations for the long-awaited Budget Law.
Some context:The State Council approved the regulations back in July (seeJuly 16 Tip Sheet).
More context:It took the central government more than five years to pass the draft revision without much explanation for the long delay.
But we’ve got a pretty good inkling about what the slow-roll was about:
- It’s an internal tussle between the central and local governments over fiscal power.
Compared to the draft for comment, released in 2015, the final version of the Budget Law significantly dialed back restrictions on local governments.
Most notably, it dropped the following stipulations:
- Ministries and local governments are not allowed to set preferential tax policies without the approval of the State Council.
- Local governments can transfer fiscal money to lower level governments for the purpose of economic and social development only when the market mechanism cannot achieve this outcome.
- Local governments cannot make rules that will affect the central government’s revenue.
- Regions with high debt risk will be not allowed to increase their debt load.
Get smart:Nothing speaks to the contentious central-local power dynamic more than the distribution of fiscal power.
Get smarter:Even under Xi Jinping’s more centralized state apparatus, local governments still hold some leverage over Beijing.
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Gov.cn:中华人民共和国预算法实施条例
5.A nudge from the Ministry of Education
This morning, the National Health Commission (NHC) dropped the latest COVID-19 stats.
On Thursday, China reported no new domestically transmitted cases for the fifth consecutive day (NHC):
- There were 22 new imported cases – up from seven on Wednesday.
- There were also 23 new asymptomatic cases – 22 of which were imported from abroad.
- The one domestically transmitted asymptomatic case – just like on Wednesday – was reported in Shanwei, Guangdong.
Because local authorities acted early and fast, the asymptomatic case in Shanwei was discovered among people already under quarantine.
Given that the situation looks basically under control, yesterday the Ministry of Education ordered all schools to proceed with “comprehensive” reopening.
It issued a notice saying(MoE):
- “Schools everywhere should fully understand the significance of restoring normal education and teaching activities to the overall economic and social development.”
Translation please:School resumption is a political task that carries serious symbolic heft.
Get smart:The government’s message here is clear –if we can keep epidemic risk in check with tens of thousands of teenagers back together, y’all have no excuse not to restore normal economic activity.
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Gov.cn:2020年8月21日广东省新冠肺炎疫情情况