driving the day
1. The Party wants to make a deal with private businesses
On Tuesday, Chinese People’s Political Consultative Conference (CPPCC) Chairman Wang Yang attended the National United Front in Private Enterprises Work Conference.
The purpose of the conference: To better “unite and guide” the private sector.
Some context: On Tuesday, the General Office of the CPC Central Committee issued a document entitled Opinions on Strengthening the United Front Work of the Private Economy in the New Era (see yesterday’s Tip Sheet).
More context: Promoting the private sector has been a focus since November 2018, when Xi Jinping held a high-profile symposium with business leaders (see November 2, 2018 Tip Sheet).
Xi sent some written instructions to Wednesday’s meeting (Xinhua):
- “The United Front and All-China Federation of Industry and Commerce should unite people from the private sector around the Party and better promote the healthy development of the private economy.”
Xi’s deal with the private sector:
- The Party will help you flourish. But you must swear allegiance to the Party.
Get smart: Under Xi, the Party has tightened its grip over all aspects of society, but Xi wants it to reach even further.
Get smarter: This will make it more difficult for companies like Huawei and ByteDance to argue that they operate independent of Party influence.
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Xinhua: 习近平对新时代民营经济统战工作作出重要指示
finance economics
2. Just a little off the top
Beijing has been giving money hand-over-fist to local governments to mitigate COVID-19’s economic fallout.
- According to the Ministry of Finance, as of mid-August, the central government had directly distributed RMB 1.674 trillion worth of funds to support local governments (Jieman).
However, only 30%, or RMB 509.7, billion has been used.
Some background: Most of this cash came from RMB 1 trillion in Special Treasury Bonds (STBs) that the central government handed out to cities and counties.
The funds are supposed to be used for:
- Infrastructure
- Rent subsidies
- Loan discounts for key enterprises and new businesses
- Employment stabilization
- Allowances for people in need
So, what’s the problem?
One issue is that some local government agencies are hoarding the funds rather than delivering to citizens in need.
- “An investigation by MoF’s Fujian Supervision Bureau found that local finance departments in some cities and counties don’t always directly distribute funds to enterprises or individuals.”
- “First, they transfer the funds to other departments to pay for local government expenses.”
- “[What’s left over is then] allocated to recipients.”
Get smart: Local government finances were overstretched prior to the pandemic. Siphoning off a bit of the central government’s funds helps keep the lights on.
Get smarter: Beijing’s fiscal stimulus just hasn’t been as stimulating as intended.
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Jiemian: 2万亿元中央补助资金支出仅3成，截留挪用问题频发
politics policy
3. School’s back in session
Yesterday, Xi Jinping took a trip to Hunan.
His trip began in Shazhou, a quaint Yao minority village in the southern part of the province.
In Shazhou, Xi visited:
- A revolution-themed exhibition hall
- A village social services center
- A local medical clinic
- An agritourism demonstration base
- Local homes, where he learned about local revolutionary history and the village’s poverty relief efforts
Quick take: Xi’s campaign to eradicate poverty before year end is still a top priority.
Xi also visited a local primary school, where he asked the students to:
- “Study hard, make progress every day, and be well-prepared to join the socialist cause.”
Some context: The Party’s control over education is getting tighter under Xi, who’s long been set on bringing more ideology into the education system (see September 11, 2018 Tip Sheet).
The big deal: There wasn’t a mask in sight during Xi’s school visit.
Get smart: With kids returning to classrooms bare-faced, China’s victory over COVID-19 has been well and truly secured.
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Xinhua:习近平赴湖南考察调研
Xinhua: Xi encourages rural pupils to grow into “towering trees” of Chinese nation
4. Li Keqiang pledges more opening
On Tuesday, Premier Li Keqiang joined a virtual dialogue with global business leaders hosted by the World Economic Forum.
Li had an important message for his audience:
- China is open for business.
The premier said that China’s economy was normalizing (Gov.cn 1):
- “Major indicators making a steady recovery in recent months [reflect] the great resilience of the Chinese economy.”
Li said that greater economic integration is a global imperative and that China is willing to do its part:
- “Joint efforts should be made to uphold trade and investment liberalization…to reinvigorate the world economy.”
- “No matter how the external environment may evolve, China will resolutely open wider to the world.”
- “China will continue to ease market access, protect lawful rights and interests of foreign investors, and build a market environment whereby domestic and foreign enterprises will be treated equally.”
He also gave an obligatory shout-out to the dual circulation strategy (DCS):
- “China’s new development pattern is an open dual circulation of domestic and foreign markets, which requires…lift[ing] China’s opening-up to higher levels.”
Get smart: Add Li to the list of officials insisting DCS doesn’t mean a closed economy.
Get smarter: Officials are saying all the right things, but can they deliver?
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Gov.cn: Premier calls for consensus to address COVID-19 impact on world economy
Gov.cn: 李克强出席世界经济论坛全球企业家特别对话会
World Economic Forum:Chinese Premier Li Addresses Global Business Leaders for First Time Since Pandemic Outbreak
5. The sheer opacity!
Yesterday, the Chinese Academy of Social Sciences published its 2020 Chinese Government Transparency Report.
The report measured transparency by examining whether government websites published their “power list” and whether it was kept up to date as responsibilities changed.
Wait, what’s a “power list”?
- It’s a list of administrative powers that each government body can exercise, including administrative approvals and punishments.
Some context: The public “power list” is part of the State Council’s broader “open government” initiative, aiming to squeeze the discretionary power of various government bodies.
So, how’d they do?
Provincial governments did pretty good (21st Century Biz):
- “The power list disclosure rate by provincial governments increased from 96.77% to 100%.”
But there was some backtracking at the municipal level:
- “Municipal governments’ disclosure rate decreased from 95.90% in 2018 to 91.84%.”
And the central government? Umm…
- “Only four State Council departments disclosed their power lists in 2019 – the disclosure rate was just 8.16%…and the categories in the list are incomplete.”
Ouch…that looks bad!
Get smart: Publishing a list of what you are actually authorized to do is just one aspect of government transparency – and probably not the most important one.
The big picture: Despite official efforts, there is still a loooooong way to go to improve government transparency.
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21st Century Biz: 《中国政府透明度2020》：国务院仅4部门公布完整清单，大量地方政府未动态调整