politics & policy
1. It’s all about communication
On Thursday, Xi Jinping sent his heartfelt congratulations to China Daily on its 40th anniversary.
Some context: Founded in 1981, China Daily is China’s first national English-language daily newspaper.
It has quite the reach:
- The print edition of the paper has a circulation of 700,000, which ain’t bad.
- The user count across media platforms is 350 million, which is totally bonkers.
Xi was all praise (Xinhua):
- “Over the past 40 years, China Daily has used its advantages to present China’s reform and development, playing an important role in telling China’s stories well and making China’s voice heard, said Xi.”
But Xi wants more. He called on the paper to do an even better job of promoting China abroad:
- “Present a true, multi-dimensional and panoramic view of China and make new contributions to the exchange and communication between China and the world.”
Get smart: Amid rising anti-China sentiment in the West, winning over global audiences is a pressing task.
Get woke: Not all foreign audiences are Western.
2. Marxism done right
On Thursday, Xi also shansong’ed off a congratulatory letter to the World Symposium for Marxist Political Parties.
ICYMI: Marxism runs deep in China – especially amongst its leaders.
The event itself was an international affair: The symposium hosted around 70 representatives from 58 political parties across 48 countries.
- The event was sponsored by the International Department of the Party’s Central Committee.
Xi’s a big fan of their work – describing Marxism as (China Daily):
- “A strong ideological weapon for us to understand and reform the world.”
Xi said China has done Marxism right:
- “The CPC has made Marxism a guiding principle and insisted on aligning the basic principles of Marxism with the actual conditions of the country.”
- “Marxism has developed with fresh vigor and vitality in China in the 21st century.”
Get smart: This is not your father’s Marxism. There will be no class struggle and no exporting revolution.
- But there will be intense focus on economic development.
The bigger picture: Ideological pragmatism is among the top reasons the Party has been able to stay in power for over 70 years.
3. There’s a new LSG in town
On Wednesday, Executive Vice Premier Han Zheng chaired the first plenary meeting of the newly-formed Leading Small Group (LSG) for Peak Carbon and Carbon Neutrality.
- Han didn’t reveal anything new, but that’s not the point.
The point is there’s a new LSG in town:
- Its mission is to push the country to meet its goal of peak carbon emission by 2030, and to achieve carbon neutrality by 2060.
Some context: LSGs are ad hoc bodies used to tackle issues or advance policies that cut across multiple bureaucratic bodies.
The LSG is stacked with heavy hitters, including:
- Vice Premier Liu He
- State Councilor Wang Yong
- Foreign Minister and State Councilor Wang Yi
- Chairman of the National Development and Reform Commission (NDRC) He Lifeng
He Lifeng’s inclusion was no surprise: The NDRC has been tasked with drafting a plan for achieving peak carbon emissions by 2030, and it’s simultaneously developing industry-specific implementation plans.
Get smart: The creation of this LSG signals that these climate goals are a top priority for Beijing.
Get smarter: While everybody agrees on the goals, there is a lot of debate on how to achieve them.
4. Global automakers build out China data storage capacity
On Thursday, Reuters reported that a number of major global automakers have established facilities in China to store locally generated data.
- Ford, BMW, and Daimler all confirmed their use of local data centers.
- Tesla announced that it had also done so earlier on Tuesday.
Some context: Data policy in the automotive industry gained attention in March when Teslas were reportedly banned from military sites over security concerns.
- This was followed by the release of draft data security regulations specific to the auto industry by the Cyberspace Administration of China (see the May 13 Tip Sheet).
More context: Data localization requirements were first introduced in the 2017 Cybersecurity Law.
- Buuuuut… the law was quite vague about exactly what data, and which kinds of organizations, would need to comply.
Get smart: It is not surprising that some automakers have gotten ahead of the game, even without clear direction.
- The aforementioned draft auto data security regs have increased the pressure.
Get smarter: Automobiles is only the first industry to see sector specific rules – we anticipate that other sectors will be soon to follow.
5. I heard it through the grapevine
Yesterday, we told you that Vice Premier Liu He held a call with US Trade Representative (USTR) Katherine Tai.
- Aaaaand that was about all we told you.
- Details were scant.
Today, a couple of juicy morsels appeared on Taoran Notes.
Some context: Taoran Notes is a WeChat account written by a source known to be close to Liu and his team.
- It’s widely understood to be a messaging channel for Liu & co.
According to Taoran Notes, US and Chinese officials are on the same page about resuming stable trade relations (Xinhua):
- “The two sides have a high degree of consensus on the issue that economic and trade is still the ballast of Sino-US relations.”
It also hinted that more dialogue is in the works:
- “There should be more communication between China and the United States in the fields of economy and trade, such as new calls, or other forms of communication.”
Get smart: That’s still not a lot to go off of, but it suggests that Washington may be more willing to play ball than we thought.
Our take: We hate to be a downer, but stable trade ties between China and the US seem unlikely in such a fraught geopolitical climate.
6. Sweet bilats, bro
On Thursday, Vice Premier Hu Chunhua held a video conference with French Economy and Finance Minister Bruno Le Maire.
The theme of their meeting: Economic and financial cooperation…duh.
Hu was clearly feeling some Sino-French fraternité (Xinhua):
- “China is willing to work with France to actively promote local economic cooperation and expand cooperation in modern agriculture, the digital economy, and finance.”
Monsieur Le Maire was also amenable:
- “France hopes to enhance communication and coordination with China and deepen bilateral cooperation in the economy, trade and investment.”
Some context: May has been a tough month for Chinese economic interests in Europe.
- On May 20, the European Parliament voted to freeze ratification of the EU-China Comprehensive Agreement on Investment (CAI) following Chinese sanctions on EU parliamentarians.
More context: With the CAI on ice indefinitely, Beijing has looked to shore up ties with individual European countries in recent weeks, including calls by Xi Jinping and Premier Li Keqiang to:
- Italian Prime Minister Mario Draghi
- Spanish Prime Minister Pedro Sánchez
- Montenegrin President Milo Đukanović
Get smart: Beijing may have struck out with the EU as a bloc, but is still hopeful it can deepen economic partnerships with individual European states.
7. Lights out in Guangdong
On Friday, Caixin reported that the southern provinces of Guangdong, Guangxi, and Yunnan have mandated electricity rationing since mid-May, due to electricity shortages.
It’s getting hot in here: At one point, Guangdong ran a power supply gap of 6.02%-8.3%.
Multiple factors are behind the shortfall:
- Scorching weather has driven up demand for air conditioning.
- The economic recovery has led to increased manufacturing and industrial activity.
- The price of thermal coal used in power generation has reached a three-year high.
- Droughts in Yunnan have reduced hydropower output.
Decarbonization is also a part of the story: Many obsolete or excessively polluting coal-fired plants in Guangdong have been shuttered.
- The province cut its installed coal-fired power generation capacity by 3.8% in 2019 alone.
- The lost capacity was replaced, in part, by Yunnan hydro.
Get smart: The power shortage has renewed criticism that renewables cannot be relied upon to shore up China’s energy security.
- Coal, the argument goes, is much more reliable.
The bigger picture: China is looking to use less coal (see entry #3). But coal is not going down without a fight.