politics & policy
1. Comrade connections
On Monday, Xi Jinping called up Vietnamese President Nguyen Xuan Phuc.
Some context: Nguyen assumed the (largely ceremonial) top job last month.
In addition to standard calls for win-win economic cooperation, Xi also talked political synergy (Gov.cn):
- “The two sides should continue to leverage the special advantages of the inter-party exchanges to deepen experience-sharing on state governance.”
Phuc seemed down:
- “Vietnam is ready to earnestly… intensify political exchanges and strengthen solidarity and mutual trust.”
Sidenote: Xi and Phuc neglected to mention China-Vietnam tension in the South China Sea.
On Tuesday, National People’s Congress (NPC) Chairman Li Zhanshu dialed up his legislative counterpart in Havana, Esteban Lazo Hernandez – the Cuban National Assembly of People’s Power (ANPP) President.
Li is also interested in more political exchange (Xinhua):
- “The NPC of China is willing to continue to strengthen exchanges and cooperation with the ANPP of Cuba and expand exchanges between leaders of the legislature…”
And Lazo Hernandez was also into it:
- “The ANPP of Cuba is willing to strengthen exchanges with the NPC of China and make every effort to promote the development of Cuba-China relations.”
Get smart: Diplomatic relations with the West are in the dumps, and China is shoring up support from more sympathetic allies.
2. Delivering the message again, again
Yesterday, we wrote about Premier Li Keqiang’s visit to Zhoushan Port in Ningbo (see Tuesday’s Tip Sheet.)
- His mission: Re-emphasizing his repeated calls to address “unreasonable” commodities prices (see Thursday’s Tip Sheet).
Li used day two of his trip to re-re-emphasize this message.
- He instructed local officials to better manage commodities flows in order to shore up responses to fluctuating prices.
Then, he moved on to other familiar themes.
He called to cut red tape and improve government services in order to make life easier for businesses.
- This has been Li’s favorite talking point since taking over the premiership in 2013 (See June 14 2017 Tip Sheet)
Then Li pushed to protect gig economy workers’ basic rights and interests.
- Yeah, he’s talked about this before, too (see April 1 Tip Sheet).
He even managed to work in a few more classic talking points, like:
- Better integrating with the global economy
- Supporting entrepreneurship and innovation
If these don’t ring a bell, you really ought to read the Tip Sheet more often.
Get smart: Li sounds like a broken record.
- But when you’re trying to coordinate the efforts of 1.4 billion people, it helps to repeat yourself.
3. Campaigning for your heart
Listen up kids: It’s (Party) history time.
It all began in 1921, and China was in a shambles.
Luckily, 13 dudes met up in Shanghai’s French Concession and decided to do something about it.
Fast forward about 100 years, and those dudes and their successors have managed to:
- Kick out a slew of foreign invaders
- Win a civil war
- Build the second-biggest national economy in the world
- Eradicate extreme poverty
Let’s be honest: It’s a pretty dang good story.
Now, the Party wants everybody to hear it.
- On Tuesday, state media reported on a Central Committee General Office notice calling to ensure everyone gets a good solid education in Party history.
There’s just one little issue:
- The Party wants to make sure people learn the right version of the story.
- Not that other one, where there was a famine and a bunch of kids turned on their parents in a patriotic rage.
To that end, youth education is still front and center (People’s Daily):
- “[We should] plant their feelings of loving the Party, patriotism, and socialism – and pass on the red gene and revolutionary torch from generation to generation.”
Will this campaign be successful?
- We assume the history books will say so.
Get smart: Tales of China’s development and achievements are well-received.
- But when the Party leans too heavily into communist ideology, people usually just tune out.
4. Wang Yi appeals to/chastises EU
Foreign Minister Wang Yi got some things off his chest on Tuesday.
The venue: A video address to the Munich Security Conference.
Some context: Last week, the EU Parliament halted ratification of the EU-China Comprehensive Agreement on Investment (CAI) pending Beijing lifting sanctions on EU parliament members.
Wait a minute said Wang. China’s sanctions on the EU were a response to EU sanctions on China!
- They were designed as a reciprocal response to EU sanctions linked to human rights abuses in Xinjiang, and the declaration, by some EU states, that said abuses constituted “genocide.”
Of the CAI holdup, Wang lamented:
- “Some on the EU side want to link unrelated issues together and politicize economic and trade issues.”
Then, Wang got specific (Politico):
- “[The Xinjiang sanctions] were based on so-called evidence. The EU never communicated with China on whether or not the evidence was true…Our European friends know what is genocide.”
Get smart: China’s messaging on multilateral cooperation and take-a-look-in-the-mirror diplomacy works better with some audiences than others.
- It’s not working in Brussels.
5. NDRC issues action plan on pricing
On Tuesday, the National Development and Reform Commission (NDRC) issued an action plan aimed at better shaping and influencing the way various things get priced in China’s economy.
Quick take: It’s not much of an action plan – more of a laundry list of upcoming price reform agendas, touching on everything from water and power prices to funeral services.
What really caught our eye was NDRC’s explanation for why it’s pursuing this price reform agenda:
- “The African swine fever and the coronavirus has impacted the production, circulation, and price of some commodities.”
- “That sounded the alarm for us.”
The explainer highlights three approaches NDRC hopes will help stabilize prices and ensure adequate supply of consumer staples, namely:
- Improving market monitoring to help ensure sufficient supply
- Strengthening price controls over key perishables by better regulating reserves as well as imports and exports
- Pursuing a flexible approach to minimum prices for rice and wheat in order to ensure food security and price stability
Get smart: These reforms are a medium-term approach, designed to be implemented over the course of the 14th Five-Year Plan.
- It’s not a blueprint for getting through the current inflation scare.
Get smarter: That said, the NDRC is clearly concerned that volatile prices will impact the national economy – and households’ wellbeing.
6. It’s the final countdown
There’s just one more month to go…
Carbon emissions trading trials are officially underway.
- More than 30 companies participated in opening trials over the course of last week.
Lai Xiaoming, the chairman of the Shanghai Environment and Energy Exchange (SEEE), shared the news on Saturday, indicating that trials will continue into June.
Some context: National emissions trading is scheduled to launch by the end of June – with 2,225 power generation companies participating.
- So far, it looks like things are on track.
This market is gonna be huuuuge (Gov.cn):
- It will cover an estimated four billion tons of carbon emissions annually.
- That means it will overtake the EU’s carbon market and become the largest in the world.
What’s next? The Ministry of Ecology and Environment plans to expand emissions trading to include all eight of China’s biggest greenhouse gas emitting industries by 2025.
- That includes petrochemicals, steel, buildings materials, and the aviation industry.
Get smart: The national emissions market looks poised to reshape the cost structure of highly-polluting industries over the next decade.