1. State Councilsupports new forms of consumption
On Monday, the State Council issued new guidelines on boosting “new forms of consumption” in a bid to support economic recovery.
What’re new forms of consumption you ask?
- Good question
New forms of consumption include:
- Online shopping and payments
- Cross-border e-commerce
- Online-to-offline business models
- The online service economy
The guidelines cover a lot of ground (Xinhua):
- “[They put forward] 15 policies in four areas, including promoting integration of online and offline consumption, improving related infrastructure, optimizing the growth environment, and strengthening policy support for new forms of consumption.”
There’s also a timeline.
By 2025, policymakers expect:
- Pilot cities and leading enterprises to be showcasing new forms of consumption
- That online sales will achieve a high market share of total retail sales of physical goods
- That new forms of consumption will continue to grow in popularity
Get smart: The government is keen to make domestic consumption the driving force in the economy. These guidelines won’t get the economy all the way there, but they will move it in the right direction.
2. State Council announces three new free trade zones
On Monday, the State Council unveiled plans for three new free trade zones (FTZs) in Beijing, Anhui, and Hunan.
Some context: This will bring the total number of FTZs in the country to 21.
The three FTZs will focus on different things:
- Beijing will become a center for innovating and expanding trade in services and function as a pilot area for the digital economy, including digital currency.
- Hunan will focus on advanced manufacturing, linking the region to the Yangtze River Economic Belt and the Greater Bay Area and developing economic ties with African countries.
- Anhui will focus on scientific and technological innovation, advanced manufacturing, and development in the Yangtze River Delta region.
According to Vice Minister of Commerce Wang Shouwen, the three localities were chosen for their geography:
- Beijing supports the Beijing-Tianjin Hebei (Jing-Jin-Ji) Region.
- Anhui will promote economic integration in the Yangtze River Delta.
- Hunan will benefit regional development in central China.
Get smart: The new FTZs are all focused on attracting high-tech, high value-add businesses as a part of policymakers’ efforts to move China’s economy up the value chain.
Our question: Do FTZs really entice foreign investors anymore?
3. State Council has some good news for foreign investors
You thought we were done talking about the State Council?
- You must be new here.
Yesterday, the State Council published a list of 29 administrative approvals to be cancelled.
Some context: During its August 26 executive meeting, the State Council decided to cut these approvals in a bid to slash red tape and improve the business environment (see August 27 Tip Sheet).
Out of 29 approvals cancelled, three were related to foreign investment:
- Foreign-invested telecoms companies are no longer required to get pre-approval before applying for telecommunications service licenses.
- Foreign-invested civil aviation projects do not need to get project proposals and feasibility studies approved.
- Qualified foreign institutional investors do not need to get approval for investment quotas, account and fund remittance, and foreign exchange registration certificates.
Get smart: These administrative tweaks may sound trivial, but they’re a big deal for the companies affected by overly onerous approval processes.
What to watch: Ministries will follow up with details soon.
4. Xi needles US atUN
On Monday, Xi Jinping delivered a speech via videolink to the United Nations (UN) General Assembly to markthe 75th anniversary of the organization’s founding.
Xi had some kind words about the beleaguered body (Gov.cn 1):
- “After being tested again and again, the United Nations is still full of vitality and carries the aspirations of more than 7 billion people for a better life.“
- “The UN Charter is still an important guarantee for world peace and development.”
Xi also offered some suggestions as to what role the UN should play in the post-COVID era. These were thinly veiled digs at the United States.
Xi called on the countries of the world to:
- Promote equality between countries and reject hegemonism and multilateralism
- Defend the rule of law internationally and not engage in exceptionalism or double standards
- Promote cooperation and reject zero-sum thinking and Cold War mentality
- Practice multilateralism and reform the global governance system with the UN at the core
Get smart: Xi’s speech was clearly meant to contrast China’s stated commitment to multilateralism with Washington’s “America First” approach.
Get smarter: Despite Xi’s pronouncements, many are unconvinced of China’s benign intentions on the world stage.
5. Li does the rounds in Shanghai
Yesterday, Premier Li Keqiang headed to Shanghai.
Lipopped over to the Pudong district to meet with local officials, listening to reports on:
- The development of Shanghai’s Pudong New Area
- The construction of the city’s free trade zone
- The online integration of government services
Li was impressed with what he saw (Gov.cn 2):
- “Shanghai is a leading city of the Yangtze River Economic Belt, and has been a front-runner nationwide in economic and social development.”
- “The Shanghai free trade zone has…become a national benchmark.”
Then he really got busy, visiting:
- Himalaya Technology, China’s largest audio sharing platform, to learn about the company’s operations and efforts to drive employment and entrepreneurship
- SAP China Research Centre, a software developer and provider of e-commerce platforms for businesses, to learn about its construction of an industrial internet platform
- 51job, a job recruitment platform, to learn about the employment of recent college graduates
He also went on a highly visible inspection tour of Nanjing Road, Shanghai’s main shopping street.
- Li inspected the shops and then bought some of everybody’s favorite milk candy – White Rabbit.
Get smart: Li’s recent trips have sought to portray him as a man of the people.
Get smarter: The trip reads like a check-list of all of Li’s favourite issues – entrepreneurship, employment, and innovation.