1. Data dump – trade
China’s General Administration of Customs released trade data for December on Thursday.
- Exports rose 18.1% y/y in dollar terms compared with 21.1% y/y growth in November.
- Imports increased by 6.5% y/y, stronger than the 4.5% y/y growth recorded in November.
- The trade surplus rose in December, coming in at USD 78.2 billion compared with USD 75.4 billion in November.
Get this: December’s trade surplus was the largest on record.
- For 2020 as a whole, China recorded the largest trade surplus since 2015.
Get smart: China’s export boom was a major prop to growth in 2020. Sustaining shipments on that scale in 2021 will be challenging.
Go deeper: For more in-depth analysis of the numbers, check out today’s China Markets Dispatch.
2. Data collection’s year of reckoning
On Monday, the People’s Bank of China (PBoC) proposed new regulations to tighten oversight of personal and corporate credit information by businesses.
- The new rules, in the works since 2016, focus on greater transparency and protecting individual rights.
Some context: Personal data collection has become a growing area of concern, with policymakers pushing for more robust data privacy protections.
According to The PBoC (Caixin):
- “[T]he lack of clear regulations has led to problems such as ambiguous credit reporting boundaries and inadequate measures to protect the rights and interests of those whose data are being collected.”
The draft rules state that:
- Companies need to tell individuals how their data will be used and ask for their consent.
- For non-public corporate information, enterprises need the consent of the concerned businesses.
- Institutions that obtain personal credit information from credit reporting companies should only use the data for the purposes consented to by the individuals from which they collected the data.
Get smart: Up to now, data collection has largely been a free-for-all in China. No longer.
3. China appoints new trade chief
China’s got a new chief trade negotiator.
On Wednesday, the Ministry of Commerce (MofCom) announced that Yu Jianhua will had been appointed China International Trade Representative.
Yu is well-qualified:
- Yu has spent nearly his entire 30-year career working on trade issues.
- He has twice served as deputy international trade representative, first from 2010 to 2013, and most recently from April 2019 until his most recent promotion.
- Yu also formerly served as China’s ambassador to the World Trade Organization from 2013 to 2017.
Yu’s got a big to-do list. China is currently in negotiating several free trade agreements (FTA) or upgrades to existing FTAs including:
- A China-Japan-Korea trilateral FTA
- An FTA with the Gulf Cooperation Council
- An FTA with Norway
- An FTA with Israel
- An upgrade to the FTA with New Zealand
- An FTA with Panama
Get smart: While trade skepticism flourishes in the West, China is still intent on deepening trade relations with the rest of the world.
Our question: The position of international trade representative has been vacant for two years. Why has it taken so long to appoint Yu, who is an obvious candidate for the job?
4. More platforms feel antitrust heat
On Thursday, the State Administration for Market Regulation (SAMR) announced that it has launched a probe into Vipshop for alleged anticompetitive behavior.
Some context: Vipshop is a Chinese e-commerce platform specializing in discount sales.
- SAMR didn’t reveal specifics about the probe other than that it was responding to reports.
One possible trigger: In September, Aikucun, one of Vipshop’s competitors, reported the company to SAMR for allegedly forcing its vendors to abandon other platforms.
More context: December’s Politburo meeting signaled that antitrust regulation would be a major priority in 2021 (see December 14 Tip Sheet).
One problem: The legal difference between a monopoly and unfair competition is not that clear.
In an op-ed, Wang Xianlin, policy advisor to the State Council’s Anti-Monopoly Commission (AMC), proposed to resolve the ambiguity by (CE.cn):
- Replacing the AMC with a State Council Fair Competition Commission (FCC)
- Then having FCC coordinate investigations into monopolistic behavior and unfair competition
Get smart: Regulators are building out their antitrust toolkit. They will be eager to use their new tools.
5. MEE lays out responsibility for climate protection
On Monday, the Ministry of Ecology and Environment (MEE) released its guiding opinions on work related to climate change and environmental protection.
The big development: Climate change mitigation targets will be integrated into national economic and social development plans and provincial governments will be responsible for controlling both carbon emission intensity and volume.
Some context: The MEE has been busy formulating a carbon emission reduction plan for the coming decade (see January 12 Tip Sheet).
- It issued its finalized rules for national carbon emissions trading last week (see January 6 Tip Sheet).
Under the guiding opinions, the MEE will:
- Reduce emissions by promoting efficiency, optimizing processes and upgrading industry
- Improve transportation
- Promote plans to peak emissions in industries such as steel and petrochemicals
- Expand the coverage of the national carbon emissions trading scheme
Jobs may be on the line:
- One key accomplishment of the guiding opinions is that it assigns responsibility for emission control.
- Officials will have to explaint themselves to inspectors if they fail to meet climate change and environmental protection targets.
Get smart: Climate change mitigation and environmental protection are rarely geographically constrained, so officials will need to work across jurisdictions to meet targets.
6. China reports highest daily COVID-19 surge since April
The COVID-19 comeback continues (see January 13 Tip Sheet).
On Wednesday, China added:
- 81 confirmed cases and four asymptomatic cases in Hebei
- 43 confirmed cases and 68 asymptomatic cases in Heilongjiang
- Two asymptomatic cases in Jilin
- One asymptomatic case in Zhejiang
Currently, the two major clusters are in:
- Shijiazhuang, Hebei’s capital
- Wangkui County in Suihua, Heilongjiang
Cases are at a nine-month high:
- China’s total number of new confirmed cases, 124, is the highest since April 16.
- Hebei has now reported China’s first COVID-19-related death since April 14.
Authorities are preparing for the worst:
- Since Tuesday, more than 20,000 residents in Shijiazhuang were being transferred to centralized quarantine facilities.
- On Monday and Tuesday, Hebei and Liaoning provinces announced they would postpone their provincial legislature meetings originally scheduled for the end of January.
- On Wednesday, five asymptomatic COVID-19 cases were reported onboard a train from Heilongjiang to Beijing.
Get smart: The outbreaks in Hebei and Heilongjiang are far from being contained.
The bottom line: Brace for impact to travel and the economy.
7. Going somewhere?
On Wednesday, China Railway changed its ticketing rules, shortening the pre-sale period for train tickets nationwide.
- Starting January 29, travelers can only purchase train tickets 15 days prior to departure – instead of the normal 30 days.
- Starting Thursday, passengers will be able to get a full refund on their train ticket until eight days before departure – instead of the normal 15 days.
- Since earlier this month, China Railway has offered full refunds for train tickets purchased before January 6.
Some context: The seven-day Chinese New Year holiday travel rush, the world’s largest annual human migration, begins February 11.
On Wednesday, the Ministry of Transport also issued an emergency notice, requiring:
- Medium and high-risk regions to suspend cross-city ride hailing services
- Frequent disinfection and ventilation at public transportation stations
- Strict temperature and health checks of travelers
- Mask-wearing by all passengers
Get smart: How bad will things have to get before authorities’ “helpful suggestions” to avoid holiday travel become outright orders?