1. That’s a lot of resolutions
On Wednesday, the People’s Bank of China (PBoC) posted the readout of its 2021 work conference – held Monday – in which it outlined its policy priorities for the coming year.
- The list is reassuring in its familiarity, suggesting the central bank intends to keep doing what it’s doing.
The PBoC’s 2021 goals include:
- Maintaining a flexible, precise, reasonable, appropriate, and prudent monetary policy
- Improving the formation and transmission of market-based interest rates
- Making deposit rates more market-based
- Continuing to allocate liquidity in small, targeted amounts via “drip irrigation”
- Developing financial institutions that support small firms
- Improving support for green finance
- Improving systemic risk monitoring
- Establishing a macro-prudential stress-testing system
- Improving deposit insurance
- Preventing external risks
- Promoting yuan internationalization
- Improving mechanisms for bond defaults and for punishing illegal behavior in the bond market
- Supporting the use of foreign exchange derivatives and more
Get smart: The PBoC is staying the course it’s carved out for itself over the past half year.
Get smarter: It all boils down to making the financial system safer, improving the functioning of markets, and avoiding stimulating the economy with monetary policy.
2. The more they change
Yesterday, Xinhua published a newly revised version of work rules for the election of local Party organizations.
Some context: This is the first revision to the rules since 1994.
- The revisions didn’t change a whole heck of a lot.
But one thing stands outto us. The Party wants more reps from the masses (Gov.cn):
- The revisions included new rule mandating that no less than 30% of provincial Party congress representatives must be “frontline workers”, such as laborers and farmers.
Two other changes were indicative of the political climate under Xi Jinping.
- More emphasis was placed on candidates’ political correctness and loyalty.
- Stricter rules prohibiting election fraud by local party cadres were instituted.
What hasn’t changed is that the big bosses still aren’t subject to a vote:
- For the Party secretary and deputy Party secretary jobs, only one set of names appears on the “ballot”.
Get smart: Party elections are about sending cadres to places their superiors want them to go.
3. Hypocritical and ridiculous
We thought the last few weeks of the Trump administration might be a relatively quiet interlude for US-China relations.
- Boy, were we wrong.
On Tuesday, US President Donald Trump signed an executive order prohibiting US transactions with eight Chinese apps, including Alipay and WeChat Pay.
Some context: Prior efforts to ban Chinese apps, including TikTok and WeChat, were largely derailed by legal challenges in US courts (see September 24 Tip Sheet).
- This new executive order doesn’t go into effect until mid-February, so it’s likely to meet the same fate.
This left Chinese officials in the awkward position of defending the tech giants they’ve spent the last few weeks criticizing.
Foreign Ministry spokesperson Hua Chunying condemned the executive order at a press conference on Wednesday (Xinhua):
- “Hua called the U.S. actions ‘hypocritical and ridiculous.’”
- “’The United States talks about a free market economy and fair competition, but how does it behave itself?’”
Get smart: The incoming Biden administration may try to roll back these executive orders in exchange for concessions from the Chinese side. Still, the damage to business confidence is already done.
4. Birthday planning
On Wednesday, Politburo Standing Committee member and ideology czar Wang Huning met with propaganda officials from across the country.
The reason: To plan the propaganda push for the CCP’s centenary.
Some context: 2021 is the 100-year anniversary of the founding of the CCP.
Wang’s demand (Xinhua 2):
- “All-out efforts on the publicity work for the celebration of the 100th anniversary of the founding of the CPC, and to tell CPC stories well.”
- “[M]ore efforts to plan the reform and development of the country’s cultural sector during the 14th Five-Year Plan period”
- “Enhance the cultural soft power and strengthen the Party’s leadership over public communication work”
Get smart: Officials love symbolic milestones and self-promotion, but a top-down approach to culture by middle-aged bureaucrats achieves mixed results at best.
Get smarter: With China’s post-COVID economic recovery underway, expect a propaganda push like no other.
5. You may not get to go home for Chinese New Year
Hebei’s COVID-19 cases continue to grow.
Over the past 24 hours (Caixin):
- The province reported 51 confirmed cases and 69 asymptomatic cases.
- Most were in provincial capital Shijiazhuang.
Some context: Since the first case was reported on January 2, local authorities have implemented sweeping measures to contain the spread (see January 5 Tip Sheet).
In addition to closing schools and suspending bus and highway services, local authorities have:
- Closed Shijiazhuang’s train station
- Cancelled flights
- Implemented citywide lockdown measures
In other words, this is the most severe lockdown since Wuhan was shut off from the world in early 2020.
Residents are being encouraged to stay where they are during the upcoming holiday by local governments in:
Get smart: If the situation in Hebei gets worse, suggestions against travel could calcify into restrictions.