driving the day
1. On the road again
Xi Jinping kicked off his annual Chinese New Year (CNY) trip on Wednesday.
- This year, the big man flew down to Guizhou.
Some context: Xi, and Premier Li Keqiang, always make a domestic trip the week before CNY.
More context: Xi has paid visits to poor provinces like Gansu, Shaanxi and Yunan, for seven out of the eight CNY trips since he came to power.
- Poverty alleviation has always been a central theme of his trips.
It’s no wonder he picked Guizhou:
- It was the last province to end extreme poverty (see December 4 Tip Sheet)
- Until recently, it was home to the largest impoverished population in China.
So far, Xi has been busy, visiting:
- A local handicrafts factory that employs minority groups
- A minority family’s home
- A local river to inspect environmental outcomes
Get smart: Xi is taking a victory lap for the successful poverty alleviation campaign.
Get smarter: He’s not quite done yet. After lifting millions of rural poor out of poverty, the government is shifting resources to the rural revitalization strategy – hoping to make the gains sustainable.
The big picture: Top policymakers are working to make the lower classes richer as a means of avoiding the middle-income trap.
2. The Party directs propaganda efforts at Young Pioneers
On Wednesday, the Central Committee released guidelines for strengthening the work of the Young Pioneers.
Some context: The Young Pioneers is a mass youth organization for students aged from six to fourteen. The Party uses them to propagate its ideology to the youth.
The Central Committee’s message for young people: Listen to Xi and the Party (Gov.cn):
- “Remember the words and follow the instructions of General Secretary Xi Jinping.”
- “Recognize China’s great achievements and realize that today’s happiness is rooted in the Party’s leadership.”
The guidelines also made note of the audience’s needs:
- “[We should] Use simple language to guide children…and plant seeds in the young pioneers’ hearts to fight for the cause of communism.”
Easier said than done.
The guidelines also called for expanding the reach of the CYP outside of schools – into rural areas and off-campus communities.
Get smart: As the Party gains confidence, it wants to ensure the youngest generation is getting the ideological message.
3. A RCEPie for implementation
On Wednesday, the State Council held its weekly executive meeting.
At the top of the agenda: Listening to reports on domestic Regional Comprehensive Economic Partnership (RCEP) implementation efforts.
Some context: The RCEP agreement was signed on November 15, linking 15 major Asian economies in what is now the world’s largest free trade agreement (see November 16 Tip Sheet).
Whaddya know, things are going great (Gov.cn 2):
- “As much as 85 percent of the 701 binding obligations stipulated in the agreement are ready to be enforced.”
Still, there’s lots to be done.
The meeting highlighted the need to:
- “[P]ush forward…reform of…domestic management mechanisms”
- “[S]tep up formulation of domestic management regulations on origin and implementation guidelines”
- “[R]efine work procedures and make targeted technical preparations”
The meeting also called to:
- Enhance inter-agency coordination in aligning domestic regulations and policies with RCEP terms
- Provide RCEP compliance training to businesses
- Raise standards in the services sector to prepare for more international competition
Get smart: China is eager to play a larger role in shaping the institutions and norms of global trade.
- Getting its trade agreements implemented correctly at home will go a long way to ensuring other countries take a positive view of China’s leadership in this sphere.
4. Bettering bankruptcy
At Wednesday’s executive meeting of the State Council (see entry above), the gang didn’t just talk RCEP implementation.
Also on the agenda: Improving the bankruptcy system for small and medium-sized enterprises (SMEs).
The meeting’s read-out noted that (Gov.cn):
- “The survival of the fittest is a normal phenomenon in a market economy.”
- “Solving the problem of [market] exits is an important measure to optimize the allocation of factors, and the business environment.”
To make bankruptcy proceedings easier and more predictable, state councilors called for efforts to:
- Simplify the enterprise deregistration system for SMEs to make it easier for small companies to exit the market
- Establish a system to publish companies’ bankruptcy and market exit status in a timely manner
- Ensure that bankruptcy procedures are standardized and promoted in accordance with the law
The meeting further noted that:
- “Efforts should be made to protect the rights and interests of employees, creditors and investors.”
Get smart: Ensuring the orderly exit of weaker firms will help stabilize and improve China’s domestic markets.
5. Perusing provincial priorities
On Wednesday, Xinhua published a list of seven “new buzzwords” that province-level people’s congresses have put front and center in recent sessions.
Some context: Provinces hold local legislative sessions to prepare for the National People’s Congress, which begins March 5 this year.
Here’s the vaunted vocabulary (Xinhua):
- Most provinces set targets at “more than 6%.”
- Provinces are carving out niches within China’s strategy to more closely integrate global trade with the domestic market.
- Liaoning wants to be a hub for trade with Northeast Asia. Xinjiang and Inner Mongolia unveiled plans for free trade zones.
- Plans for emissions reductions and energy transitions were common across the board.
- Wealthier provinces are stepping up digital yuan pilot projects.
- Everyone wants the base station buildout to move faster.
14th Five-Year Plan
- Provinces are developing local plans to help hit the goals of the national one.
- Poorer provinces are transitioning successful poverty alleviation campaigns into ongoing rural revitalization efforts.
Get smart: All of these will pop up again at next month’s NPC.
Get smarter: Despite the chatter around growth targets, it’s clear provinces are more interested in “high quality” growth.