politics & policy
1. Third child’s the charm
On Monday, the Politburo met to talk demographics.
This grabbed headlines: Top Party leaders approved a decision to adopt a national three-child policy.
Some context: For decades, China enforced notorious family planning limits – known as the one-child policy.
- Those limits were relaxed to a two-child policy in 2016 in hopes of boosting the low birthrate to support a rapidly aging population.
- It didn’t work.
More context: The 2020 census showed a fertility rate of 1.3 births per woman – well below policymakers’ goal of 1.6 (see May 12 Tip Sheet).
The public wasn’t too impressed with the new policy.
- Social media exploded with complaints about the high cost and hard work of raising a family.
But the meeting’s readout promised a raft of support policies were on the way, including
- Public fertility and family planning services
- Universal childcare at low or no cost
- Reductions in education costs
- Additional assistance and incentive policies for larger families
What we’re wondering: Why did policymakers even bother keeping a three-child limit in place?
- One guess: They’re worried about high birth rates among low income and ethnic minority groups, but don’t want to single them out with a special policy.
2. Raising the retirement age
Monday’s Politburo meeting didn’t just talk babymakin’ (see previous entry).
Also on the agenda: Listening to a report on how to respond to the rapidly aging population.
Most of the proposals were familiar, including:
- Improving social security and elder care systems
- Advancing state pension reform and introducing privately managed pensions
- Encouraging the medical and health care sectors to expand services for seniors
- Promoting filial piety and respect for the elderly
But this caught our eye from the readout (Xinhua):
- “It is necessary to steadily implement the gradual delay of the statutory retirement age.”
Some context: The 14th Five-Year Plan called for a gradual extension of the retirement age as part of the government’s plan to deal with China’s demographic crisis (see March 12 Tip Sheet).
- That proposal proved wildly unpopular, forcing policymakers to do damage control (see March 15 Tip Sheet).
Get smart: Raising the retirement age remains firmly on the agenda.
Get smarter: That creates a larger labor force and reduces the burden on the state pension system in one blow.
3. Won’t someone please think of the children(‘s political education)?
On Monday – a day prior to Children’s Day in China – Xi Jinping responded to a letter from the Young Pioneers of Xin’an Primary School in Jiangsu province.
Some context: The Young Pioneers is a political organization for children aged six to 14 which operates under the Communist Youth League of China.
In their original letter, the students (Xinhua):
- “Told Xi their gains in learning the histories of their school and the CPC, and expressed their resolve in passing on the revolutionary traditions.”
Xi’s reply reminded the youngsters of their school’s extraordinary red pedigree:
- “In October 1935, 14 students from the school formed a patriotic art troupe.”
- “For 17 years, the troupe traveled across China to spread the Party’s messages.”
Then the big guy told them to:
- “Apply what they have learned from the Party’s history to their own lives, follow the example of heroic role models, study hard, and foster faith and integrity.”
Get smart: As China’s political environment continues to tighten, emphasis on a “correct understanding of history” is being emphasized at all levels of society.
Get smarter: Xi and co. believe the best way to ensure broad ideological orthodoxy is to start kids young.
4. When will education companies learn their lesson?
The SAMR hammer falls again.
Today’s victims: 13 online tutoring companies, including big names like New Oriental, TAL Education Group, and Wall Street English.
This is part of a trend: The State Administration of Market Regulation (SAMR) recently dinged online tutoring unicorns Yuanfudao and Zuoyebang.
This is getting pricey: SAMR has levied RMB 36.5 million in fines in total.
Some context: A coming crackdown in the education sector became apparent in March (see the March 30 Tip Sheet).
Naughty, naughty: SAMR’s complaints were mostly the same as earlier – deceptive advertising and lying about teacher experience.
SAMR also called out offering “discounts” against fictitious sticker prices.
- This is common in many industries.
The campaign is definitely not over.
- SAMR promised to “intensify supervision” of the sector.
Our question: What is SAMR’s end game?
- The state seems to have grown uncomfortable with the very existence of off-campus education.
- Smaller operations in particular may have a difficult time adjusting to new rules.
5. Heaven is high, and the MEE is far away
The Ministry of Ecology and Environment (MEE) has a problem.
It wants to limit air pollution and carbon emissions. But local governments often aren’t that concerned with either.
That’s why on Monday, the MEE issued guidelines ordering its local counterparts to tighten their management and approval of high-energy, high-emission projects.
All futurehigh-energy, high-emission projects will have to comply with stricter requirements related to:
- Regional environmental quality improvement
- Limiting pollutants
- Carbon emission peak targets
- Environmental impact assessments
Provincial authorities will not be able to delegate their approval authority for:
- Oil refining
- Coal power
- Iron and steel
That makes sense:
- Some local regulators lack the capabilities to property conduct environmental impact assessments for high energy-consuming and high-emission projects.
- Others just ignore the rules.
The MEE will be keeping tabs: Provincial regulators must report to the MEE their efforts to manage high-energy, high-emission projects every six months.
Get smart: Recentralizing approval power is a second-best option. It would be much better of the MEE could just find a way to get lower-level governments to follow the rules.
6. Don’t leave us out!
Xi Jinping has pledged that China will become carbon neutral by 2060.
There’s just one problem: Nobody has any idea how to do it.
Not to fear – Ding Zhongli is on the case.
Ding is an academician of the Chinese Academy of Sciences (CAS). On Sunday he announced that the CAS had launched a research project aimed at providing a roadmap for reaching carbon neutrality.
The project seeks to answer some of the most challenging questions, including:
- How can China increase its share of non-carbon-based energy in its energy mix?
- How much of the energy mix cannot be substituted with non-carbon-based energy?
- What are the available carbon capture, utilization, and storage technologies?
- What are the current policies, and what other policies are needed?
More context: In May, the NDRC indicated that the agency is in the initial stages of formulating an action plan to achieve peak carbon emissions by 2030.
Get smart: The policy debate on the best way for China to meet its climate goals is just heating up.
What to watch: Expect other think tanks and institutions to wade into the debate with similar studies in the coming months.
7. Herd immunity in 2021 looking doable
China’s vaccination campaign has been speeding up (NHC):
- As of Monday, China had administered a total of 661.47 million vaccine doses – up from the 527.25 million doses a week ago (see May 25 Tip Sheet).
Some context: Daily vaccine administration averaged to 12.47 million doses in May – 2.58 times more than the average in April.
The progress has given officials a new target – delivering herd immunity this year.
On Sunday, nationally-renowned respiratory disease expert, government advisor, and national hero (see August 12 Tip Sheet) Zhong Nanshan, said at a science conference that China aims to:
- Fully inoculate – with two vaccine doses administered – 40% of the population by the end of June
- Exceed an 80% full inoculation rate by the end of the year
Authorities already made adjustments to mass vaccination efforts in order to achieve the first goal.
- From June 10 to June 30, China will focus vaccination efforts and supplies on those who have already received their first dose of COVID-19 vaccines.
- First dose administration for the general public will resume in July.
Get smart: China’s leaders would love to reach herd immunity before certain European and North American countries.