One Thing from Beijing

August 16, 2022

Beyond a reasonable drought

Heatwaves continue to wreak havoc across provincial power grids.

On Sunday, hydropower powerhouse Sichuan became the latest province to restrict power consumption by industrial end users.

Some context: Last week, we wrote about Jiangsu and Anhui’s power rationing plans.

This week’s update: A double screw you from Mother Nature, as Sichuan suffers drought-induced power shortages and heatwave-induced spikes in demand (Sichuan Online).

• Average July temperatures reached 78.8 degrees Fahrenheit (26 degrees Celsius), the highest in 61 years.
• As residents crank up air con, peak power demand in August is set to soar by 25% y/y.
• But hydropower production, responsible for over 80% of Sichuan’s power, has collapsed after a month-long drought.

Sichuan officials vowed to avoid blackouts for residential users, including by:

• Limiting power usage by energy-intensive industries
• Maximizing power imports from other provinces
• Minimizing hydropower exports

Industries will feel the pain:

• From August 15 to 20, a large number of energy-intensive firms across 19 prefectures will face complete shutdowns.
• Tongwei, the world’s largest polysilicon and solar cell manufacturer, announced on Sunday the partial closure of its Sichuan operations (Caijing).

Get smart: Sichuan’s problems have serious ramifications for the rest of China.

• Sichuan’s hydropower projects regularly supply over 10% of the combined annual power consumed by Shanghai, Jiangsu, and Zhejiang.

Get smarter: In the run up to the 20th Party Congress, the last thing Beijing wants is hot, angry protestors.

• That means officials will do everything they can to avoid repeating last year’s residential power curbs.

The upshot: Businesses will bear the brunt of any power rationing.

August 12, 2022

Fujian Gang patrols Taiwan Affairs Office

Still hungry for Taiwan news? We’ve got you covered.

Personnel reshuffle! On Thursday, the Central Committee’s Taiwan Affairs Office (TAO) updated its website to reveal Pan Xianzhang has been appointed a deputy director (one of three).

• Pan, who turns 50 next month, replaced Pei Jinjia, appointed minister of veteran affairs in June.
• The Party’s TAO, which also comprises the State Council TAO, is a key body on Taiwan policy.

What’s Pan’s story?

• Pan hails from Quanzhou, a coastal city in Fujian province opposite Taiwan.
• After earning a PhD in finance, Pan focused on economic and fiscal affairs in a series of local government roles in Fujian (1999-2005) and Shanxi (2005-2021).
• In March 2021, Pan was transferred to Jiangsu to serve as vice governor; he gained national notoriety eight months later when he was promoted secretary-general of the provincial Party committee – the youngest in China.

Why care about Pan now? Like his predecessor Pei, Pan is well acquainted with He Lifeng, head of China’s macro planner (NDRC) and one of Xi Jinping’s closest aides.

• Pan and He both studied for their PhDs at Xiamen University (1996-98).
• Xi and He have been close since 1985, when the two began working together in Xiamen, Fujian.

Get smart: Pan’s Fujian background makes him an ideal TAO choice at a time when the always sensitive “Taiwan issue” is front and center.

Get smarter: He Lifeng’s ability to get his allies important positions in Beijing ahead of the 20th Party Congress indicates that He has a good shot at joining the next Politburo.

August 18, 2022

Qin Gang’s impossible task

On Tuesday, Chinese Ambassador to the United States Qin Gang sat down with 11 American media outlets for an interview in DC.

Qin’s goal: To improve views of China within the Beltway.

Qin explained (MoFA):

• “My country is being greatly mis-perceived and miscalculated as a challenge or even a threat to the United States.”
• “Here in the United States, myself and my colleagues would like to be a bridge linking Chinese and American people.“

I think it’s safe to say Qin failed.

Here’s what Washington Post columnist Josh Rogin wrote after the meeting in a piece entitled “China’s ambassador is pushing Beijing’s alternative facts”:

• “The Chinese government is trying to stage a charm offensive in Washington.”
• “But the effort is falling flat because Beijing’s diplomats are pushing talking points based on claims that simply don’t match reality.”

Get smart: Qin’s got an impossible job. He can talk to foreign media all he wants. But opinions of Beijing aren’t going to improve in DC unless Beijing reverses course on contentious issues like Taiwan, Xinjiang, and Hong Kong.

• And that ain’t gonna happen.

August 23, 2022

Curb your formalism

On Tuesday, the Party Central Committee and the State Council published a notice to improve village-level governance by standardizing work affairs, signage, and certification.

• The drive continues Xi Jinping’s campaign to rectify formalism – which Chairman Mao railed against in the 1940s.

Recap: The lowest level of government in China is the township. Village-level organizations (VLOs, including Party groups and committees) are only there to assist township-level governments.

Reality check: Village cadres get loaded with all types of tasks – from family planning to certificate issuing – with limited funding and manpower.

The notice vows to ease the burdens on rural officials by banning Party and state agencies from (People’s Daily):

• Assigning their responsibilities to VLOs
• Making VLOs liable for issues including law enforcement, demolition, and production safety
• Evaluating rural cadre performance based on self-reporting materials (such as videos of work sites)
• Requiring VLOs to set up specialized task teams

Get smart: Though often overlooked, grassroots measures like these – if allowed to take root – are crucial for the Party to deliver its top line goals of rural revitalization and Common Prosperity.

August 5, 2022

(Targeted) common prosperity

In the year since Xi Jinping set out his goal of Common Prosperity, there’s been plenty of debate about what this initiative means in practice.

On Friday, Tang Dengjie, the Minister of Civil Affairs (MCA), splashed his tuppence worth all over the front page of Study Times, the Central Party School’s flagship newspaper. 

ICYDK: The MCA is responsible for social assistance and welfare, poverty alleviation, elderly and child care, charity, and managing social organizations.

Quoting Xi, Tang reminded everyone that economic growth (and the attendant tax revenues) are the precondition for addressing inequality (Qiushi): 

• “Improving social benefits [can only be achieved] on a foundation of solid growth of the economy and [the state’s] financial capablities.”

Tang then stated that social assistance programs will remain targeted on the most vulnerable populations, particulary: explained that Xi called for implementing targeted social welfare measures

• The extremely poor 
• The disabled 
• The homeless
• The elderly 
• The orphans 
• The rural children with parents working in cities

What that means: The Chinese government is not looking to create a welfare state in the short-term.

Bigger picture: Common Prosperity is in its infancy, and will undoubtedly evolve in the coming years and decades.

• But for now, it is not ushering in massive changes to China’s social assistance programs.