finance economics
1. Qingming spring fling fails to bring the cha-ching
Here at the Trivium offices, we’re feeling pretty refreshed after our 3-day Qingming (Tomb Sweeping) Festival weekend.
So are 102 million of our closest friends.
- That’s the Ministry of Culture and Tourism’s (MCT) official estimate of how many people travelled over the holiday – a 144.6% y/y increase.
- That figure represents a 94.5% resumption of pre-pandemic travel levels.
Some context: China’s short-lived resurgence of COVID-19 in January and February put the kibosh on many Chinese New Year (CNY) travel plans.
- Qingming is the first public holiday after CNY, and people were absolutely determined to enjoy it.
But there’s less to this recovery than meets the eye.
MCT estimated that tourist consumption over Qingming reached RMB 27.2 billion – only 56.7% of pre-pandemic levels.
That’s mainly down to two reasons:
- More tourists stayed close to home, opting for local day trips.
- Hotels and tourist attractions were offering huge discounts to attract visitors.
Get smart: Disappointing spending stats over Qingming are emblematic of China’s broader challenges in stimulating consumption.
- The immediate danger of COVID has passed, but people are still wary of making major outlays on non-essentials.
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21st Century Biz: 清明小长假国内旅游出游1.02亿人次，恢复至疫情前同期的94.5%
Yicai: 清明假期再现“人从众” 1.02亿人次释放出游热情
2. A lean, green finance machine
On Thursday, People’s Bank of China (PBoC) Deputy Governor Liu Guiping laid out the central bank’s gameplan to support national carbon neutrality goals.
Some context: PBoC Governor Yi Gang recently listed some planned policy moves in this area – and the bank has repeatedly flagged green finance as a priority for 2021 (see March 23 China Markets Dispatch).
More context: After the Two Sessions, the State Council tasked the PBoC with leading the deployment of financial support policies to support green development and carbon emissions reduction.
Liu highlighted some of the central bank’s plans for supporting low-carbon development, including:
- Setting up a national carbon accounting system
- Improving environmental information disclosure requirements
- Launching the national carbon emissions trading system
- Incorporating climate change-related risks into the macro-prudential policy framework
- Deepening international cooperation on climate finance
- Constructing green finance reform and innovation pilot zones
But as per usual, the exact details were still a bit hazy.
Get smart: Liu was primarily signaling that the PBoC is on top of things, rather than making any specific policy announcements.
Get smarter: Though details are scarce for now, it’s likely that enterprises can expect tax breaks for investments in emissions reductions at minimum – and favorable terms on loans for green upgrades.
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Gov.cn: 国新办举行构建新发展格局 金融支持区域协调发展发布会图文实录
Caixin: 央行：将创设直达实体经济的碳减排政策支持工具
politics policy
3. I fought Xi Jinping Thought on the Rule of Law and Xi Jinping Thought on Rule of Law won
On Monday, the Party Central Committee and the State Council jointly released opinions on “strengthening the construction of socialist legal culture.”
- If that doesn’t sound riveting, we don’t know what’s wrong with you.
Some context: In November, Xi Jinping convened the first central work conference on law-based governance, unveiling the concept of Xi Jinping Thought on the Rule of Law (see November 18 Tip Sheet).
The new opinions pledge to (CPC People):
- “Build an environment where all of society acts in accordance with the law, and looks to legal mechanisms to solve problems and resolve conflicts by 2035.”
To get there, the opinions call for:
- More propaganda on Xi Jinping Thought on the Rule of Law
- Greater study into socialist legal theory
The doc also called for young people and cadres to study the constitution more deeply:
- Leading cadres will be evaluated on their understanding of the constitution
- Constitutional study will be emphasized in schools
Get smart: Enhancing the strength and uniformity of the legal system is one way to streamline administrative efficiency and reduce governance costs.
Get smarter: It’s lived experience, not understanding of legal theory, that engenders faith in a country’s legal system.
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CPC People: 中办国办印发意见加强社会主义法治文化建设
Legal Daily: 司法部负责同志就《关于加强社会主义法治文化建设的意见》答记者问
4. Let’s get ready to grumble
On Monday, Foreign Minister Wang Yi had a phone call with his Japanese counterpart, Toshimitsu Motegi.
Some context: Usually-tense Sino-Japanese relations have thawed somewhat in the past few years, but recent disagreements threaten to send ties back into a deep freeze.
Motegi brought up some – ahem – awkward topics, raising Tokyo’s concerns over:
- China’s treatment of Uyghurs in Xinjiang
- Beijing’s electoral crackdown in Hong Kong
- Recent incursions of Chinese vessels near the disputed, Japanese-administered Senkaku/Diaoyu islands
In turn, Wang asked Motegi to be cool (MoFA):
- “China and Japan, as…close neighbors and the world’s second and third largest economies, should…respect each other, trust each other, [and] cooperate for mutual benefit.”
He also asked Tokyo to form its own opinions:
- “China hopes that Japan…will look at China’s development objectively and rationally, rather than being carried away by some countries with prejudice against China.”
Get smart: Japan – like several other Asia-Pacific countries – is strategically aligned with the US, but economically intertwined with China.
- Is it possible for Tokyo to have its mochi and eat it, too?
What to watch: Japanese Prime Minister Yoshihide Suga will travel to Washington to meet US President Joe Biden later this month.
- We’ll be watching to see how closely Suga hitches Japan to Biden’s tough-on-China wagon.
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MoFA: 王毅同日本外相茂木敏充通电话
SCMP: China warns Japan to not follow suit after US sanctions over Xinjiang, Hong Kong
5. SAMR releases 2021 legislative plan
Get excited!
On Thursday, China’s market regulator (SAMR) released its 2021 legislative plan.
Some context: SAMR has announced annual legislative plans each year since 2019, to give businesses a heads-up as to what’s coming down the pike.
This year, SAMR plans to draft:
- Six administrative regulations
- 61 departmental rules and administrative measures
More context: That’s up slightly from 2020, when SAMR drafted seven administrative regulations and 55 departmental rules.
Several of the planned rules are aimed at improving the overall business environment, including measures related to:
- Implement the patent law
- Boost administrative punishments for illegal pricing
- Protect business secrets
- Prohibit unfair competition among internet companies
- Outline measures for dealing with enterprises that end up on corporate social credit system blacklists
- Offer measures detailing which SAMR branches are allowed to register foreign companies
Get smart: Given SAMR’s wide remit over market entities, the agency’s activities impact pretty much all companies. So businesses should pay close attention to which topics are on the agenda.
Get smarter: Being up to date on SAMR’s legislative agenda also helps businesses tailor their talking points when meeting with government officials.
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SAMR: 市场监管总局关于印发2021年立法工作计划的通知
SAMR: 市场监管总局公布2021年立法工作计划
Gov.cn: 市场监管总局关于印发2020年立法工作计划的通知