driving the day
1. You probably weren’t invited
Yesterday, top leaders took time to participate in this week’s most exciting event:
- The All China Federation of Supply and Marketing Cooperatives (ACFSMC) 7th Congress.
Xi Jinping was all praise, hailing the ACFSMC’s (CCTV):
- “Long history, glorious tradition, and role as an important force in developing agriculture and rural areas.”
Ok stop. Who are these guys?
- The ACFSMC was set up in 1950 to distribute farming supplies and daily necessities in townships and villages, and to move wholesale ag products into cities.
- The ACFSMC is massive – its 2018 revenue totaled RMB 5.9 trillion, twice the turnover of Sinopec. It comprises a vast network of more than 30,000 entities (Guangming Daily).
Xi further instructed the federation to (CCTV):
- “Become a comprehensive platform for farm production needs, and keep the Party and the state in close contact with farmers.”
And Premier Li Keqiang told the ACFSMC to:
- “Improve rural social services, modernize village logistics, and partner with farmers’ cooperatives.”
Ringa bell? Just yesterday, the Central Committee and the State Council redirected a big chunk of change to rural revitalization (see September 24 Tip Sheet).
Get smart: The ACFSMC meeting schedule is ad hoc, meaning this session was called for a reason. Perhapsto get a first look at the rural revitalization and dual circulation aspects ofthe 14th Five-Year Plan.
2. Grab the popcorn: UN edition
On Thursday, Foreign Minister Wang Yi delivered a virtual address to the United Nations (UN) Security Council’s ministerial meeting on the sidelines of the ongoing UN General Assembly meeting.
Some context: Xi Jinping addressed the UN General Assembly on Monday, calling on the nations of the world to embrace multilateralism and international cooperation (see Monday’s Tip Sheet).
Wang’s speech was more of the same (CGTN):
- “In such a challenging moment, major countries are…duty-bound to put the future of humankind first, discard Cold War mentality and ideological bias and come together in the spirit of partnership.”
But US ambassador to the UN Kelly Craft wasn’t having it:
- “Craft blamed China for mishandling coronavirus…and said that China must be held accountable for the pandemic.”
- “She also said China’s actions ‘prove that not all member states are equally committed to public health, transparency, and their international obligations.’’’
Craft’s Chinese counterpart Zhang Jun offered a rebuttal, accusing the US of:
- “[A]busing the platform of the UN and its Security Council” and “spreading political virus [sic] and disinformation, and creating confrontation and division.”
Get smart: International cooperation doesn’t look particularly achievable when US and Chinese ambassadors are yelling at each other on the (virtual) floor of the UN.
3. No reason to worry
On Monday, we told you that China’s long-lost Unreliable Entity List had reappeared after the Ministry of Commerce (MofCom) detailed the consequences for ending up on the list (see Monday’s Tip Sheet).
- We said that the list would provide Beijing with a legal mechanism to retaliate against US firms amid a barrage of American sanctions.
But on Thursday, MofCom spokesperson Gao Feng insisted that the list was not aimed at anyone in particular (MofCom):
- “[T]he Unreliable Entity List does not target specific countries or enterprises.”
- “Whether enterprises will be included on the list depends on [their] behavior.”
Gao also emphasized that economic opening was still a priority:
- “[T]he Chinese government’s position of…deepening reform, expanding opening up, and firmly protecting the legitimate rights and interests of various market entities will not change.”
- “There is no need for honest and law-abiding foreign entities to worry.”
Our take: Gao’s reassurances notwithstanding, we doubt that the list would have reappeared if not for Washington’s full court press against Chinese businesses.
Get smart: Beijing will only use the list as a last resort. Chinese leaders are trying to convince foreign companies that China is open for business. Sanctioning US firms would badly undercut that message.
4. Lou Jiwei tells it like it is
Hold on to your hats folks, the plain-speaking former finance minister Lou Jiwei has been at it again.
At a closed-door symposium of the influential China Economists 50 Forum on September 15, Lou took the opportunity to share some thoughts on China’s new economic framework – the dual circulation strategy (DCS).
Some context: The China Economists 50 Forum was founded by now-Vice Premier Liu He 20 years ago. It is made up of reform-minded policy advisors and former economic officials.
- Liu hasn’t presented or spoke at the forum since becoming vice premier. But his office still sends people to attend.
Lou didn’t hold back on what he thinks China needs to do to make the domestic economy work more efficiently – the key goal of DCS:
- Speed up implementation of market-based reform of factors of production (see September 2 Tip Sheet).
- Institute rules- and law-based governance to provide stability for businesses.
- Keep infrastructure development from running so far ahead of other investments that it raises user costs and makes public debt unsustainable.
- Proactively shape new global commercial rules, as geopolitical tensions will increasingly affect the global industrial chain.
Get smart: Reform-minded (former) officials will use the urgency created by the DCS to try and push through longstanding (and long idled) economic reforms.
5. Virus onshoring in Qingdao
Since August 15, China hasn’t reported any domestically transmitted cases of COVID-19.
- On Thursday, the Qingdao Health Commission reported two asymptomatic carriers of COVID-19, working as loaders at a port facility.
- The cases were found while conducting routine testing of at-risk personnel.
Qingdao wasted no time to contain the situation.
- Authorities quickly quarantined 147 close contacts of the two asymptomatic carriers.
But that’s not all, within 24 hours Qingdao authorities also:
- Identified and quarantined 228 “close contacts of the close contacts”
- Identified another 4,341 “regular contacts” of the infected workers
- Tested 1,440 environmental samples from the port facility
The (premature) good news: All identified close and regular contacts have tested negative for COVID-19.
- However, 51 of the environmental samples tested positive.
What that means: The two port workers likely contracted the virus while handling imported frozen food.
Get smart: Asymptomatic infections are hard to identify – let alonecontain. But the early testing results indicate the situation is likely well under control, thanks to speedy contact tracing and testing.
Get smarter:Food products imported via cold chainlook set to see more screening and scrutiny.