1. Corporate China trying to figure out common prosperity
The business community is all atwitter over “common prosperity.”
Some context: Common prosperity refers to the Party’s goal of reducing inequality.
More context: Xi Jinping signaled that he’s deadly serious about this issue at a top Party economic strategy meeting on August 17.
Details about how the government will proceed remain scarce, but the business community knows they are expected to pay back more to society.
China’s big tech firms, in Beijing’s crosshairs for months now, have been quick to jump on the common prosperity bandwagon (Sina):
- Tencent announced it would invest RMB 50 billion to promote “common prosperity”.
- This will include investment in rural revitalization, healthcare service system improvement and more equal education services.
It’s not just big tech.
- On August 31, private carmaker Geely announced it would grant 350 million new shares to employees, representing a 3.56% stake in the company.
Get smart: Chinese business owners know the Party means business with its common prosperity push. They are eager to show they are on board.
Get smarter: Foreign companies will also be under increasing pressure to contribute more to the common good.
2. Southwest China and the Secretive Chamber
There’s something happening here, but what it is ain’t exactly clear.
On Monday, representatives of the Chengdu-based American Chamber of Commerce in Southwest China (AmCham Southwest) announced to their members via WeChat that they were suspending operations, effective immediately.
- By way of explanation, the chamber said that it was acting “[i]n accordance with…relevant laws and regulations”.
Some context: AmCham Southwest is a non-profit organization that represents American business interests in Southwest China. As you might expect.
- Despite a similar name and function, it’s not affiliated with the better-known American Chamber of Commerce in China.
The news has set the foreign business community buzzing with speculation.
- Are politics to blame?
- Did the chamber run afoul of NGO regulations?
- Is it an administrative misunderstanding?
Benjamin Wang, the chamber’s chairman, offered no clues, but said that the organization was “in discussions with local authorities about its registration” (Reuters).
Get smart: We don’t know what’s going on here, but it’s not a great look for China’s business environment.
Get smarter: The various US business organizations in China have been some of the most vocal advocates for productive US-China engagement.
- Shuttering this chamber means one less voice calling for a stable bilateral relationship.
3. Sixth Plenum to discuss Party history
Let’s make some history.
On Tuesday, the Politburo met and decided that the sixth plenum of the current Central Committee (the 19th) will be held in November.
Some context: The Central Committee’s annual plenums are the most important political gatherings of the year. They are where the Party discusses and approves high-level policy initiatives.
More context: Traditionally, the sixth plenum focuses on issues of Party-building and ideology.
This year’s Sixth Plenum will focus on history.
What that means: We’re likely to see the Central Committee adopt a “resolution” on history.
Why that matters: In its 100-year history, the Party has adopted resolutions on history only twice before – in 1945 and 1981. They’re a big deal.
A quick history lesson: The 1981 resolution defined the Party line on Mao and his “mistakes.” An official stance was necessary to close the chapter on the contentious Mao Era, and get on with the business of the Reform Era.
Our question: What, exactly, will this new historical resolution focus on?
One guess: The necessity of having Xi Jinping as the “core” of the Party.
Get smart: The Party’s discussions on history are not really about the past. They are about where the Party should be headed. That’s why this year’s plenum will be so important.
4. My world’s on fire, how ‘bout yours?
On Tuesday, US special climate envoy John Kerry touched down in Tianjin.
- Kerry will be in town until Friday and is slated to meet with his Chinese counterpart Xie Zhenhua ahead of the COP 26 UN Climate Change Conference in November.
Some context: Kerry and Xie first met in their capacities as climate czars back in April.
- The meeting led to a joint statement on addressing the climate crisis.
We wait, with bated breath, to see how their second meeting pans out.
- Kerry and co. want China to agree to more ambitious climate goals, including pushing Beijing to peak carbon emissions earlier than the planned “before 2030” deadline.
That’s a very delicate proposition:
- The Chinese side must avoid being seen as caving to US pressure.
- Anything more than a light touch and Kerry’s team might poison the well for realistic cooperation.
And as always, politics is waiting in the wings:
- In recent weeks, Chinese officials have repeatedly said that the US can’t expect cooperation on climate issues if it insists on undermining Beijing’s interests in other areas.
Get smart: The US and China must work together to tackle the global climate crisis.
- Making that happen will require restraint and compromise from both sides.
5. Zhengfa rectification campaign bags bad cop
On Monday, secretary-general of the Central Political and Legal Affairs Commission (PLAC) Chen Yixin shared some fun stats from the nationwide campaign to clean up China’s judiciary and law enforcement bodies.
ICYMI: This “education and rectification” campaign kicked off in July last year, in a few cities and counties, with two nationwide inspection rounds scheduled this year.
In round one, inspectors uncovered plenty of corrupt officials:
- Of the 2.7 million officials reviewed, close to 180k were penalized.
Some quick math: That’s 6.7% of all those reviewed. Quite a lot.
Another stat to note: Among those penalized, 53% had broken rules to make some money.
That’s troubling, said Chen, because (Caijing):
- “Political and legal police officers engaged in profit-making activities in violation of regulations have not only damaged their job integrity, but also…the business environment.”
Get smart: China’s law enforcement system is the one pillar of the Party-state where Xi Jinping has never fully consolidated control.
- This campaign is part of Xi’s efforts to address that.
Get smarter: Xi has his work cut out for him. The high number of officials caught in the first round reveals the rot within law enforcement.
What to watch: The second round of inspections kicked off in mid-August. Stay tuned.
6. Getting tough on copyright infringement
The State Administration for Market Regulation (SAMR) is soliciting feedback on a proposed amendment to the E-Commerce Law.
The focus of the amendment: Provisions that requires platform companies to respond quickly to credible reports of copyright infringement by merchants on their platforms and to take preemptive steps to block merchants who are breaking the rules.
What got added:
- “If the circumstances are particularly serious, the relevant departments may restrict [the platform] from carrying out relevant network business activities or revoke relevant licenses for network operation.”
Some context: The struggle to stem copyright infringement on domestic e-commerce platforms has been raging for over 15 years.
- Beijing is tired of issuing fine after fine, with little effect.
More context: At Monday’s meeting of the Central Commission for Comprehensively Deepening Reform (CCCDR) – the Party’s top policymaking body — Xi called on the government to strengthen intellectual property protections.
Get smart: This amendment does exactly what it says on the box – it puts another gun in the regulatory arsenal. They wouldn’t be putting it in there if they didn’t think they might need to use it.
We covered this yesterday in Tech Blips, our premium daily “quick takes” covering the most important developments for the day in the China tech space.
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