driving the day
1. Xi’s tips for winning friends
How can China improve its reputation abroad?
That was the question that Xi Jinping and his Politburo colleagues debated at their monthly study session on Monday.
It’s a poignant question.
- Over the past 15 years, China has poured significant resources into boosting its soft power and expanding its global propaganda capabilities.
- But in many Western countries, views of China have turned increasingly negative (Pew).
One big reason that China’s image has suffered in recent years: The aggressive Wolf Warrior diplomacy that Xi himself has championed.
At the meeting, Xi suggested that a gentler tone might work better:
- “We should pay attention to grasping the tone, be both open and confident as well as humble and amiable, and strive to create a credible, lovable, and respectable image of China.
He also said that China should get better at differentiating its messaging to different audiences:
- “We should adopt precise communication methods… for different regions, different countries and different audiences.”
But this does not signal the end of Chinese assertiveness:
- Xi said that China is engaged in a global “public opinion struggle.”
- To win, China needs to be more forceful in promoting its values and system.
Get smart: Wolf Warriors are not the real problem here. China’s global propaganda efforts were failing long before they arrived on the scene.
- As long as spokespeople and state media are constrained by highly ideological formulations, China’s message will continue to fall on deaf ears.
politics & policy
2. Who bosses the bossmen?
On Tuesday, the Party published a document on stepping up supervision of the top boss at various Party organizations and state agencies.
The document was finalized back in March and circulated inside the system since April.
It acknowledges that lack of supervision of the most senior officials is still an issue (Gov.cn):
- “[We] must soberly recognize that supervision of the ‘number one boss’ is still a weak link.”
But the Party has a solution:
- “Top-down supervision is most effective for ‘number one bosses.’”
- “The Central Commission of Discipline and Inspection and Central Organization Department will step up supervision of provincial party committees and ‘number one bosses’ of central departments.”
Specifically, the Party wants to use collective leadership to rein in malfeasance, calling to:
- “Never allow members of the leadership team to turn their portfolios into ‘private territory’, which is free from collective leadership and supervision.”
- Delay decisions where a leadership team is in serious disagreement
- Compile meeting minutes that document disagreements
Don’t screw up: Party disciplinary bodies will be keeping an eye out for groups violating these decision-making procedures.
Get smart: The Party has diagnosed a big problem – but it’s going to take a lot more than this policy document to cure it.
Our question: Will any of this apply to THE number one boss?
(Actually, we’re pretty sure we know the answer to that one…)
3. To Damascus with love
On Tuesday – in a triumph for democracy – Xi Jinping extended his congratulations to Syrian President Bashar al-Assad on his successful reelection.
Some context: Assad won 95.19% of the vote in what was widely seen as a fraudulent election.
Xi didn’t see any reason to let a little authoritarian fudgery spoil a good friendship (CGTN):
- “Xi stressed that he values the development of bilateral ties and is willing to work with the Syrian president to push forward [China-Syria relations].”
He also told Assad to do what he needed to do to govern his country:
- “Xi reiterated China’s firm support for Syria to defend its national sovereignty, independence and territorial integrity.”
More context: Since 2011, Syria has been locked in a civil war, with the Assad government looking to reassert its control.
Xi also made an offer that surprised us:
- “China will assist Syria at the best of its capacity in…economic recovery and livelihood improvement.”
Get smart: It sounds boilerplate, but helping a war-torn country with economic reconstruction would be uncharted territory for Beijing.
- We’re interested to see where this offer leads.
Get smarter: Closer ties with China are an attractive prospect to countries shunned by the West on humanitarian grounds.
4. Reppin’ the YRD
On Tuesday, Vice Premier Han Zheng presided over a meeting of the Yangtze River Delta Integration and Development Leading Small Group (LSG).
- The Yangtze River Delta region (or “Da YRD” as the cool kids call it) is an urban agglomeration centered on Shanghai and including neighboring provinces Jiangsu, Zhejiang, and Anhui.
At the top of the agenda: “High-quality integration”
Some context: Policymakers have pushed regional integration hard in recent years, setting up a bunch of other regional clusters including:
- The Beijing-Tianjin-Hebei Area, known as Jingjinji
- The Greater Bay Area
- The Chengdu-Chongqing Economic Circle
- The Yangtze River Economic Belt
Also on Han’s agenda for the YRD:
- Better connected infrastructure, including rail-water links
- More coordinated environmental protection and management, especially of Lake Tai, which sits between Shanghai, Jiangsu and Zhejiang
Get smart: The push for regional integration is about improving economic efficiency and environmental protection by tackling fragmentation.
- Inter-regional competition has produced wasteful industrial duplication on a massive scale.
- It also incentivized environmental buck-passing.
Our question: Will further on-paper integration actually on-the-ground cooperation?
- So far the focus has been on infrastructure links – which are already pretty good in these regions.
- What really needs to be done is to change incentives so that local governments stop competing with each other.
5. Gellin’ with Yellen?
There’s something happening here.
On Wednesday, Vice Premier Liu He had a video call with US Treasury Secretary Janet Yellen.
ICYMI: This is the second call between Liu and a senior American official in the past week.
- Liu just spoke with US Trade Representative Katherine Tai and agreed to “maintain communication” (see May 27 Tip Sheet).
As with last week’s meeting, nothing particularly substantive emerged from Liu’s call with Yellen.
Here’s Xinhua’s rundown:
- “The two sides believe that the China-U.S. economic relations are very important.”
- “In the spirit of equality and mutual trust, they conducted extensive exchanges on the macroeconomic situation and bilateral and multilateral cooperation, candidly exchanged views on issues of mutual concern, and expressed willingness to maintain communication.”
The US Treasury was more terse:
- “Secretary Yellen discussed…the importance of cooperating on areas that are in U.S. interests, while at the same time frankly tackling issues of concern.”
Get smart: For now, US-China relations remain at an abysmal low, but the two calls suggest that some degree of cooperation on economic issues is possible.
Get smarter: Improved trade ties would be nice, but they won’t fix the structural tensions at the heart of Sino-American relations.
6. Looking out for the little guy
The Chinese government is always looking out for the little guy.
At least, that was the message from a officials from the State Administration of Market Regulation (SAMR) and the Ministry of Industry and Information Technology (MIIT) at a press briefing on Tuesday.
- The presser was a follow-on from the State Council meeting last week led by Premier Li Keqiang (see May 27 China Markets Dispatch).
And just how do SAMR and MIIT look out of the little guy? Mainly by tackling the anti-competitive practices of big companies.
Some context: If for some reason you have not yet heard, regulators embarked on an anti-monopoly crusade late last year, concentrating on large platform companies.
SAMR and MIIT officials gave little in the way of new information about the crackdown.
- Anti-competitive behavior, such as “pick one from two,” remains under the microscope.
- Improper pricing behavior, such as arbitrary and disguised fees, will continue to be investigated.
One notable thing: Officials highlighted the importance of inter-ministerial cooperation in getting the job done.
- This was already a team effort, but we may see even greater coordination.
The need for enforcement of the Fair Competition Review System (FCRS) also came up again, and indeed was first on the list of tasks.
- The FCRS is directed at local governments, which also engage in anti-competitive behavior in the form of local protectionism.
Get smart: Cracking down on anti-competitive behavior is not a passing fad. It is here to stay.
7. Out with the old, in with the new
Shanxi got a new Party secretary y’all!
It’s none other than… drumroll please… former Shanxi governor Lin Wu.
- Lin is taking over the provincial top job from Lou Yangsheng, who is moving south to take the reins of neighbouring Henan (more about that in tomorrow’s Tip Sheet).
A little about Lin:
- He has broad experience – having held positions in business, government, and the Party.
- He earned a PhD in engineering.
- The first 21 years of Lin’s career were spent at Hunan’s Xiangtan Iron and Steel Company, where he ultimately served as company president (1998-2003). The company is one of the province’s largest.
- Lin then spent an additional 13 years working in various Party and state roles in Hunan.
- In 2016, Lin was moved to Jilin, where he served successively as head of the Organization Department and then as vice governor.
- Lin has been in Shanxi since May 2018, serving as governor of the province since December 2019.
Lin’s job as governor was no cake walk:
- One of his main tasks would have been to diversify Shanxi’s heavily coal-dependent economy.
Get smart: This will earn Lin a spot on the 20th Central Committee (2022-2027).
- He is now in the running for a seat on the Politburo in 2027.