1. Xi’s big tech reveal
On Monday, Xi Jinping indicated that the state will further tighten its grip over big tech.
What happened: Xi chaired a meeting of the Central Commission of Financial and Economic Affairs (CCFEA).
Some context: The CCFEA is the Party’s top body for deliberating economic strategies. It typically meets three times a year.
Top of the CCFEA’s agenda: The “healthy development” of internet platform-based companies.
What that means: The authorities will increase oversight over China’s large platform companies (i.e. Alibaba and Tencent).
In particular the meeting stated that regulators will:
- Expand their anti-monopoly manpower and authority
- Increase oversight of tech companies’ financial business
Regulators will also require the platforms to do more to ensure:
- Product quality
- User privacy
- Data security
- Employee rights
Xi is clamping down on big tech, but he still sees them as playing an important role, according to the meeting’s readout (Gov.cn):
- “The platform economy is conducive to improving the efficiency of resource allocation…[and] promoting the accelerated evolution of technological and industrial reforms towards informatization [and] digitization.”
Xi just wants to make sure that big tech is playing by the Party’s rules.
- He said that the state and big tech should cooperate to “forge a national competitive edge.”
Get smart: Xi wants big tech to advance national goals, like fostering innovation, upgrading the manufacturing sector, and improving wellbeing of citizens.
Get smarter: The message is clear – big tech prospers at the Party’s pleasure.
2. Xi’s big plans for new energy
Monday’s CCFEA meeting didn’t just talk about the platform economy (see previous entry).
Also on the agenda: Green and low-carbon development.
Xi Jinping said that green development is a fundamental concern:
- “It concerns the sustainable development of the Chinese people.”
According to the meeting readout, the authorities want to:
- Create a national low carbon energy structure
- Build a national energy-saving industrial structure
- Inspire environmentally sound production methods and lifestyles
Okay. Sounds good. So how will they do it?
Improving energy efficiency will be front and center of the green development drive, particulary for the following sectors:
- Industrial production
Renewable energy will also get a big push.
Check this: Xi called for efforts to establish a “new-type electrical system centered around new energy.”
Quick take: That’s a new phrase. It signals policies to support renewables are coming down the pipeline.
Get smart: Energy policy is all over the place these days. Xi talks about promoting green development all the time. But other parts of the bureaucracy keep stressing the importance of coal (see March 5 Tip Sheet).
Something’s gotta give.
3. Do more with less
On Monday, Premier Li Keqiang did his thing – chairing the routine State Council executive meeting.
On the agenda: With the Two Sessions wrapped up, Li and his posse used the meeting to plan how to implement tasks laid out in the annual Government Work Report.
Supporting the continued economic recovery remains at the top of the priority list, by:
- Promoting employment and stabilizing prices
- Delivering support to the service sector, small and micro-enterprises, and some hard-hit localities
- Ongoing efforts to improve the business environment through simpler registrations and reduced government fees
This caught our eye – Li explicitly directed local governments to reduce debts:
- “To keep the macro leverage ratio basically stable, the government leverage ratio must be reduced.”
Still, Beijing knows flexibility is needed:
- “[We will] closely track changes in the world…[and] domestic economic operations, conduct in-depth analysis of new conditions and issues, and ensure timely adjustment and fine-tuning of policies.”
What to watch: Ministries and localities will publish plans for implementing the Government Work Report in the weeks to come.
Get smart: Local governments are under pressure – the central government expects them to do more and more with less.
4. Anti-corruption drive digs deeper
We’ve been jonesing over here at Trivium HQ.
Having binged on chunky policy docs during the Two Sessions, we were starting to go into withdrawal after the proceedings wrapped up last week.
Lucky for us, on Tuesday, People’s Daily released the full transcript of anti-corruption czar Zhao Leji’s 2021 work report to the Central Commission for Discipline Inspection (CCDI).
Some context: Zhao delivered the report on January 22, during the CCDI’s annual plenary session (see January 25 Tip Sheet).
The report covers a lot of ground. But two things stood out to us.
First, Zhao said the financial sector is in the CCDI’s crosshairs:
- “[We will crack down on] ‘elegant bribery,’ ‘shadow shareholders,’ and other forms of hidden corruption.”
- “We will deepen anti-corruption work in the financial sector and strengthen financial supervision and internal governance.”
Second, Zhao put leading officials on notice:
- “We will urge the implementation of the regulations governing the conduct of leading cadres’ [families] in business.”
- “Efforts should be made to solve the problems of supervision over ‘top [government and Party] leaders.’”
Get smart: Xi’s anti-corruption campaign is the widest-ranging, longest-lasting in Party history.
- It shows no sign of slowing down.
5. China’s vaccination struggles
On Monday, the State Council’s COVID-19 Joint Prevention and Control Mechanism held a press conference with updates on the progress of its vaccination campaign.
The key stats:
- As of March 14, China had administered 64.98 million vaccine doses, up from 52 million doses on February 28.
- That amounts to an additional 0.927 million doses per day on average.
That means Beijing is behind schedule (Reuters):
- “[China aims] to inoculate 40% of its 1.4 billion people by the end of June.”
- “[The country] needs to average around 4 million shots a day to meet that target.”
China is also falling behind other major economies in terms of total percentage of the population that’s been vaccinated.
- By late February, less than 4% of China’s population had gotten the jab, compared with 30% in the UK and 22% in the U.S. (see March 4 China Markets Dispatch).
In particular, officials have pinpointed a rather ironic reason for the low vaccination numbers:
- Because COVID-19 has been tightly controlled in China, many people don’t feel urgent pressure to get the jab, since the risk of being infected is extremely low.
Get smart: Low vaccination rates won’t significantly affect the economic recovery.