1. An end to China’s zero-tolerance COVID policy on the horizon?
2. G.O.A.T. education
The Chinese Communist Party is looking to make its vocational education the Greatest Of All Time.
How do we know? On Tuesday, the Central Committee and the State Council issued “Opinions on Promoting the High-quality Development of Modern Vocational Education.”
But, wait…this matters! Vocational schools are central to China’s education system and can mean the difference between a skilled labor force and continued economic growth, or unemployable workers and the middle-income trap.
That’s why China has issued two clear goals:
- By 2025, the modern vocational education system will be basically completed, and building a skilled society will be fully promoted.
- By 2035, the overall level of vocational education will be among the best in the world, and a skilled society will be basically established.
The plan wants to make sure that vocational training is fit for purpose.To that end, it calls for making sure that vocational education incorporates emerging industrial and technological trends, such as new energy, modern agriculture, and AI.
The guidelines also aim to collect expertise from abroad by incorporating vocational education into sister city cooperation plans.
The bottom line: China’s fate depends upon its rural and low-income workers. If these workers are well-educated, they will propel the economy’s continued growth. But if poorly educated, they will be a major drag.
3. It’s not about the money, nor biodiversity
Xi Jinping just wanna make the world biodiverse.
- That’s why, on Tuesday, he pledged USD 232 million at the United Nations (UN) Biodiversity Conference to establish a new fund to protect global biodiversity.
Some context: The conference, known as the 15th Summit of the Conference of Parties (COP15), is held roughly every two years and is being hosted by China in the southwestern city of Kunming.
- It is the first major UN meeting China has hosted since the 1995 World Conference on Women, in Beijing.
“30 by 30” is a goal,not a jean size.
- The conference is expected to produce a joint declaration urging countries to protect 30% of their land and seas by 2030.
Xi promised that China would do his part, announcing a new 88,800 square mile national park system.
But biodiversity was not the only thing on Xi’s mind:
- He also took the opportunity to call for “true multilateralism”, and a “fairer” and “more reasonable” global environmental governance system.
Get smart: Xi’s goal is simple –to have China assert greater influence within the multilateral system.
4. Monopoly monitor mitosis
China’s antitrust crackdown is just getting started.
For the next stage of its anti-monopoly crackdown, China’s market regulator will more than double its staff while dividing its anti-monopoly bureau into three distinct new units.
The State Administration for Market Regulation (SAMR) – which currently employs just 40 antitrust officials – aims to grow to over 100 in the near term, and 150 within two years (Bloomberg).
- The three new divisions will reportedly cover antitrust investigations, market competition oversight, and M&A supervision, respectively.
- SAMR has not yet publicly confirmed the plans, which sources expect will be finalized by month’s end.
SAMR’s expansion should come as no surprise. The regulator has made more than its fair share of headlines as it sweeps China’s economy for anticompetitive practices.
- Its biggest targets have included Alibaba and Meituan.
- Those targets served to signal to smaller players that anti-competitive practices will not be tolerated.
The challenge? Acting on that signaling.
- SAMR is playing whack-a-mole, and there just aren’t enough hours in the day to whack all the moles.
The solution? More mallet-wielding officials.
Get smart: Markets have been leery of Beijing’s heavy regulatory hand, particularly when it comes to China’s golden-goose tech sector.
- SAMR’s expansion won’t change perceptions that Beijing is on an anti-capitalist tear.
Get smarter: Nonetheless, anti-competitive practices continue to hold back private sector innovation.
- There are good reasons for the recent corrective measures, and if implemented well, they could make China’s private sector more attractive over time.
- The question is whether regulators will know when to stop.
5. Between the (supply) lines
On Tuesday, Premier Li Keqiang met with Mongolia’s Prime Minister, Luvsannamsrai Oyun-Erdene, via videolink.
Li got right down to business, ticking off a wishlist for engagement, including (MoFA):
- “Exploring cooperation in key areas” like coal
- “Expanding bilateral trade” in coal
- “Facilitating port clearance and increasing throughput” of coal
OK, we’ll come clean: We added those references to coal. But it was obviously the only real reason for the call.
ICYMI: In recent weeks, China’s domestic coal supply shortage pushed prices so high that some coal-fired generators can’t afford to operate.
- This has caused power cuts in a number of provinces.
At first, Li tried to play it cool, noting that:
- “China has abundant coal resources.”
Then he got explicit that China needs more coal:
- “We are happy to see the scale of coal trade between the two countries expand.”
- “China encourages companies… to ensure a smooth and safe energy supply chain with reasonable and stable prices.”
Get smart: In the short term, Beijing needs Mongolia’s coal.
Get smarter: Beijing loathes the dependencies highlighted by this power shortage. In the medium term, the current crisis may fuel ambition to transition away from fossil energy.