driving the day
1. Xi congratulates Biden
On Wednesday – some two and a half weeks after the US presidential race was called in favor of Joe Biden – President Xi Jinping finally congratulated the US president-elect on his victory.
Xi looked to get things off on the right foot (SCMP):
- “We hope both countries uphold the spirit of non-conflict, non-confrontation, mutual respect and win-win cooperation, focus on cooperation, manage and control conflict, to promote China-US relations towards a healthy and stable path.”
Some context: Chinese leaders held off for an unusually long time on officially recognizing Biden’s victory (see November 12 Tip Sheet).
- Beijing was worried that prematurely congratulating Biden would draw the ire of outgoing US President Donald Trump, who has still not conceded the race.
So what changed?
- On Monday, the Trump administration formally authorized the presidential transition process to begin.
- China didn’t want to be the last one to reach out. If Beijing had delayed much longer, it would have risked offending the Biden administration instead.
Get smart: Xi wants US-China relations to stabilize.
Get smarter: While the Biden administration will probably look to put a floor under bilateral tensions, the structural factors that have put Beijing and Washington on a collision course aren’t going anywhere.
2. Liu He sets his sights on household income
On Wednesday, Vice Premier Liu He published an essay in the Peoples’ Daily.
- He lays out his vision for the economy over the coming five years.
This got our attention: Liu called for households to get a bigger slice of the economic pie(Gov.cn).
- “The socialist distribution system is…conducive to encouraging advancement and promoting efficiency…preventing polarization, achieving common prosperity, and enabling the people to share the fruits of reform and development.”
Liu stressed that it’s necessary to:
- “Improve the mechanism for ensuring regular wage increases.”
- “Strengthen the system for ensuring the payment of wages.”
- “Expand the middle class…[as being important] to maintaining social stability.”
- “Increase the share of labor compensation as part of overall distribution.”
That last point is big: It means Liu wants household income growth to exceed that of the overall economy.
- Historically, policymakers have targeted household income growing at the same pace as the overall economy.
Get smart: Liu’s article is an important policy flag in the sand. But if he really wants a greater share of national income to reach households, he will have to wrest wealth away from the state-owned sector. That won’t be easy.
3. Ready for battle
Yesterday, Xi Jinping held a Central Military Commission (CMC) meeting on military training in Beijing.
Some context: The CMC’s last publicly announced meeting on military training meeting was in 2006. The 2006 meeting focused on transitioning from “training under mechanized conditions” to “training under informationized conditions.”
Xi’s message: Focus on training the military for actual warfare (Xinhua).
- “He noted that changes are taking place in the country’s security environment, military combat situation, and forms of modern warfare, bringing the military’s training to a new stage.”
- “He called for better strategic planning and top-level design to allow military training to evolve and accommodate the needs of real combat.”
Get smart: At October’s Fifth Plenum, top leaders set a goal for the PLA to develop the capacity to defend national sovereignty, security and development interests by its 2027 centenary.
- Xi’s efforts to reform the armed forces will only intensify.
4. Premier Li talks Xi Thought on the Rule of Law
On November 25, Premier Li Keqiang led a meeting of the State Council Party Group focused on Xi Jinping Thought on the Rule of Law.
Some context: Xi Jinping Thought on the Rule of Law is in the limelight this month.
- It was highlighted in Qiushi, the Party’s top journal (see the November 17 Tip Sheet).
- It was also front and center at the first-ever central work conference on law-based governance (see the November 18 Tip Sheet).
The meeting’s read-out stressed that rule of law requires setting boundaries (Gov.cn):
- “Use the rule of law to set rules and draw boundaries for administrative power…, further clarify the boundaries between the government and the market, government and society…, strengthen constraints on and supervision of administrative power.”
Participants discussed improvements to rules, regulations, and normative documents:
- They should be practical, pertinent, applicable, and implementable.
- The government should solicit and listen to the opinions of enterprises, trade associations, chambers of commerce, and the public.
They also said useless red tape should be canceled (Gov.cn):
- “Resolutely cancel administrative enforcement matters that are not based on laws and regulations or are unnecessary or duplicative. “
Our question: Making these changes will require bureaucrats to give up some authority; what incentive do they have to do so?
5. Han Jun appointed governor of Jilin
Han Jun just took over the number two spot in Jilin province, as governor and deputy Party secretary.
Some context: Last week saw a bunch of high-level personnel appointments. We already told you about two of the new provincial Party bosses:
- Jing Junhai, the new Party secretary in Jilin (see the November 24 Tip Sheet)
- Xu Dazhe, the new Party secretary in Hunan (see yesterday’s Tip Sheet)
We’ll admit it: Han’s appointment surprised us.
- We thought he was in to take over as Minister of Agriculture and Rural Affairs.
A little about Han:
- Han entered university in 1979 at 16 years old, and completed his PhD in agricultural economics by 25.
- For the past three decades, Han has been almost entirely based in Beijing, moving between increasingly high-ranking posts at government affiliated think tanks before serving in a senior role on the Central Leading Group for Rural Affairs (CLGRA).
- In 2017, Han became director of CLGRA general office – making him the highest-ranked rural policy advisor in the Party system – and arguably the country.
- He took a demotion on paper when the CLGRA office was reorganized under MARA in 2018.
Get smart: Han’s career prospects are bright – provided he can succeed in his first-ever leadership role outside Beijing.
What to watch: Although it won’t be Han Jun, we should see a new minister of agriculture soon. The current minister, Han Changfu, reached retirement age over a year ago.