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“At a time of China information overload, Trivium’s Tip Sheet routinely picks up on important policy debates and developments that other services miss. For me it is an essential daily brief.”

Tom Mitchell
Beijing Bureau Chief
Financial Times

July 21, 2020

The Tip Sheet

politics. policy. econ. tech.

Finance & Economics

1. Pimp my house: China edition

Yesterday, the State Council issued a plan to renovate 39,000 old urban residential areas this year, benefitting around seven million households.

We love a good home makeover.

But we’re slightly less excited about the timeline:

  • The plan for the institutional framework and policy system for these renovations won’t be done until 2022.
  • The actual rebuilding aims to be finished by the end of 2025.

Who’s paying for all this?

The details have not been worked out, but in principle the central government, local governments, and residents will all contribute to the cost.

Get smart: Residents in old urban residential areas have long asked for renovations and upgrades – especially for accessibility for the elderly or disabled, such as elevators. Government involvement should help to move things along.

Get smarter: This is a big piece of Beijing's economic support package and should total several trillion RMB in investment.

Politics & Policy

2. Party updates election rules

On Monday, the Central Committee released new regulations governing elections for grassroots Party organizations.

Elections? In the CCP?

Yeah, they’re a thing.

  • In fact, these “new” rules aren’t that new at all.
  • They’re really just a small tweak of rules passed in 1990.

These elections have some very Chinese (Communist Party) characteristics.

  • The Party has considerable scope to pick candidates and signal its preferred winners.

The upshot: You don’t get a lot of upstart candidates being elected.

Get smart: This update is part of a comprehensive review of all Party rules and regulations instituted by Xi Jinping. Dude is OBSESSED with trying to make the Party function more effectively.

3. CPPCC brainstorms and sets FYP meeting date

Yesterday, the leaders of China’s top political advisory body (CPPCC) met for a brainstorming session in Beijing.

Top of the agenda: Rules of consultation.

It was pretty wild (Xinhua):

  • “Applauding the achievements in the institutional construction of the CPPCC, the political advisors called for strengthening the awareness of consultation, and improving consultation capability and effectiveness.”
  • “The principles, contents, forms, and procedures of the CPPCC's consultative work were also discussed, among other topics.”

Calm down you crazy cats!

Joking aside, don’t dismiss the group, as lots of people do. Its proposals can become actual policies – especially ones that affect businesses.

Prior to the brainstorming fun, CPPCC Chairman and Politburo Standing Committee member Wang Yang also presided over a meeting CPPCC chairpersons.

The meeting decided that:

  • The CPPCC National Committee will hold a session on August 25-27 to discuss the formulation of the 14th Five-Year Plan (FYP).

Get smart: We get asked a lot about what will be in the 14th FYP. The simple answer is it’s too early to tell – but we might know more after this upcoming meeting.

4. Tech cold war comes to Europe

The hits just keep on coming for Huawei…

  • Last Tuesday, the UK announced that it would ban the Chinese tech giant from participating in the rollout of Britain’s 5G network.

Now, China has reportedly formulated a “nuclear option” should more European countries follow suit.

According to the Wall Street Journal:

  • “Beijing is considering retaliating against the Chinese operations of two major European telecommunication-equipment manufacturers, [Nokia and Ericsson]...according to people familiar with the matter.”
  • “China’s Ministry of Commerce is mulling export controls that would prevent Nokia and Ericsson from sending products it makes in China to other countries.”

But the hypothetical export controls look to be a last resort:

  • “One person added that this was a worst-case scenario that Beijing would use only if European countries came down hard on Chinese suppliers and banned them from their 5G networks.”

On Tuesday, foreign ministry spokesperson Wang Wenbin dismissed the claims as false (Yicai):

  • “This...is groundless and malicious fake news.”
  • “China remains open to participation...by telecom enterprises from various countries, including Nokia and Ericsson.”

Get smart: Beijing is unlikely to escalate a technology fight with Europe at a time when US-China decoupling already poses a major challenge for Chinese tech firms.

5. Xi calls Zambia and Palestine

How do you get rid of a bad case of the Mondays?

  • If you’re Xi Jinping, you get on the phone to foreign leaders and promote win-win cooperation!

On Monday, Xi called up:

  • Zambian President Edgar Lungu
  • President of the Palestinian National Authority Mahmoud Abbas

Xi reeled off some of his greatest rhetorical hits to Lungu (Xinhua):

  • “Xi stressed that in recent years, the friendly and cooperative relations between China and Zambia have maintained a good momentum, and they have supported each other on issues concerning each other's core interests.”
  • “The two countries should step up coordination and cooperation to firmly defend international fairness and justice, uphold multilateralism, and safeguard the legitimate rights and interests of developing countries, said Xi.”

And Xi told Abbas that he had his back (Xinhua):

  • “Xi said…that the Palestine question has always been the core issue in the Middle East region, and China supports the ‘two-state solution.’”
  • “China firmly supports Palestine's just demands, as well as all efforts conducive to resolving the Palestine question, Xi said.”

Get smart: As China’s reputation sinks to new lows in the West, it makes sense for Beijing to shore up relations with countries in other parts of the world.

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