2022 Economic Data - Liu He's Davos Speech - Chongqing's Economic Agenda - Wang Huning on 'Comprehensive & Strict Governance' of Religion - Li Keqiang Calls for Energy Supply Expansion
Here are the stories and pieces that I found noteworthy from the Wednesday, January 18, 2023, edition of the People’s Daily.
Page 1: At the top of the page is a brief report on Xi Jinping sending a message of condolence to Nepali President Bidya Devi Bhandari over the recent plane crash in the country.
Also on the page is the full text of the Party’s provisions on the approval authority and procedures for punishing party members who violate discipline. This is too complex and with too many details to summarise briefly. But basically, the document talks about there being a “hierarchical responsibility system” for approvals in cases of discipline violation. This document was deliberated and approved by the Politburo Standing Committee on September 1, 2022, the text says.
China’s total GDP was 121.0207 trillion yuan (about $18 trillion) in 2022, with an annual growth rate of 3%. NBS’ Kang Yi said that this rate was “relatively fast” compared to other countries. This was the actual quote:
“Germany announced that the estimated economic growth rate for the whole year last year was 1.9%. According to the IMF’s forecast, the GDP growth of the United States and Japan will not exceed 2% in 2022. Under the repeated impact of so many unexpected factors, China’s 3% economic growth rate is a relatively fast growth rate.” 康义透露：“德国公布去年全年经济增速预估数为1.9%。据IMF预测，美国、日本2022年GDP增长都不会超过2%。在这么多超预期因素反复冲击下，我国3%的经济增速是一个比较快的增长速度.” — Basically, we’re better than others. So why should anyone complain?
Kang then said that China needs to more than double the current per capita GDP of about $12,700 to reach its goal to be on par with that of mid-level developed countries in 2035
Per capita disposable income reached 36,883 yuan, up 5 percent year on year in nominal terms.
In 2022, the total national grain output was 686.53 million tons, an increase of 3.68 million tons over the previous year
In 2022, 12.06 million new urban jobs were created, exceeding the expected target of 11 million
Industrial output went up 3.6 percent year on year in 2022
Fixed-asset investment rose 5.1 percent year on year
Retail sales contracted 0.2 percent year on year in 2022
Final consumption contributed 32.8 percent to the GDP expansion in 2022
Consumer price index rose by 2 percent
There’s a Q&A with Kang on Page 3. Below is data from that:
The national industrial added value reached 40.2 trillion yuan
Added value of the manufacturing industry reached 33.5 trillion yuan
The contribution rate of industry to economic growth reached 36%
As of 2022, the national railway mileage was 155,000 km, of which 42,000 km was high-speed railways
Total retail sales were 44 trillion yuan, of which online retail sales reached 12 trillion yuan
Fixed asset investment exceeded 57 trillion yuan, an increase of 5.1%
China’s forex reserves as of 2022 were $3.13 trillion
As of 2022, China had 169 million registered market entities nationwide.
The annual investment in high-tech industries increased by 18.9% year-on-year, which was 13.8 percentage points faster than the total investment
Total volume of trade in goods was 40 trillion yuan.
FDI into China was 1,156.1 billion yuan
The interview ends with Kang basically saying that consumption will be picking up in 2023. In the Xinhua English report, there’s a comment from Kang on the property sector:
“As for the property industry, Kang said it will have less drag on the economy in 2023 than in 2022. There is still room for China's property sector to grow, as the country's urbanization rate reached 65.22 percent in 2022 -- still much lower than the 80 percent found in developed countries, he said, while also pledging measures to support the demand of urban residents for home ownership and improved housing conditions.”
There is no report in the paper that highlights the fact that the country’s population fell by 850,000 to 1.412 billion.
Other related reports worth reading on all of this:
Moving on, there’s a report (English report) on Li Keqiang’s inspection of the State Grid Corporation of China. “He emphasised that it is necessary to adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, implement the decisions and deployments of the Party Central Committee and the State Council, further ensure stable energy supply and prices, and better serve the overall situation of economic and social development.” 他强调，要坚持以习近平新时代中国特色社会主义思想为指导，贯彻党中央、国务院决策部署，进一步抓好电力能源保供稳价，更好服务经济社会发展大局.
The first paragraph of the article basically talks about Li’s comments related to energy supply stability during the holidays. The next bit says:
“Li Keqiang said that energy supply is related to the overall situation of economic and social development. In the past year, China’s economic development process was extraordinary, and energy supply was also faced with complex and severe domestic and international environments. International energy problems were prominent and prices fluctuated greatly. High temperatures and lack of rain in China for a period of time led to increased power supply pressure. All parties concerned have made joint efforts to give full play to the advantages of China's energy resource endowment, accelerate the release of advanced coal production capacity, implement a series of policies to support coal-fired power enterprises to alleviate difficulties, ensure that domestic energy demand is met, support reasonable economic growth, meet the people's livelihood needs, and play an important role in stabilising prices. In December last year, the price increase was only 1.8%, which was extremely difficult under the background of high global inflation, and the stable supply of domestic energy contributed to this. It is necessary to further coordinate and ensure the supply and price stability of energy and other important commodities, and continue to work hard to promote reasonable economic growth and stabilise price levels.” 李克强说，能源供应关系经济社会发展大局。过去一年，我国经济发展进程很不平凡，能源保供也面临复杂严峻的国内外环境，国际能源问题突出、价格大幅波动，国内一段时间高温少雨导致供电压力加大。各有关方面共同努力，发挥我国能源资源禀赋优势，加快释放先进煤炭产能，实施一系列政策支持煤电企业缓解困难，保障了国内用能需求，支撑了经济合理增长，满足了民生需要，特别是为稳物价发挥了重要作用。去年12月份物价涨幅只有1.8%，这在全球通胀高企的背景下极为不易，国内能源稳定供应功不可没。要进一步统筹抓好能源和其他重要商品保供稳价，继续努力推动经济合理增长、稳定物价水平.
In the next bit, Li predicts that “Li said electricity consumption will remain at the winter peak level after the holiday, and with the optimised COVID-19 response, economic growth will continue to pick up and electricity demand will also increase. The supply of energy should increase accordingly to meet the demand of economic and social development.” He also called for support for northern regions of the country during the winters to ensure heating.
The final bit says: “Stressing that China is still in the middle of industrialization and urbanization, Li said the country should deepen market-oriented reforms in the energy sector, intensify technological innovation, enhance energy supply capacity, and strengthen international cooperation.”
Next, there’s a report on Wang Huning meeting with leaders of national religious groups ahead of the new year. The report says:
Wang “said that all national religious groups should conscientiously implement the spirit of the 20th Party Congress, and unify their thoughts and actions with the spirit of the 20th Party Congress and the decision-making and deployments of the CPC Central Committee on religious work. We should give full play to the main role of religious circles, and promote the Sinicization of religions in China. It is necessary to prevent and resolve potential risks in the religious field, adhere to the principle of independence and self-management, and maintain normal order in the religious field along with social harmony and stability. It is necessary to adhere to the comprehensive and strict governance of religion, improve the internal rules and regulations of religious groups, improve the religious organisations system and management mode, and continue to carry out educational activities advocating thrift and abstinence from luxury. Wang Huning said that religious groups are the bridge between the Party and the government with religious figures and believers. The Party and the government have always attached great importance to unity and cooperation with religious figures, and all relevant departments in various regions should, as always, support the work of religious groups and help solve practical difficulties.” 王沪宁充分肯定各宗教团体2022年的工作，对2023年工作提出殷切希望。他表示，各全国性宗教团体要认真贯彻落实党的二十大精神，把思想和行动统一到党的二十大精神上来，统一到党中央关于宗教工作的决策部署上来。要充分发挥宗教界主体作用，把推进我国宗教中国化做深做细做实。要防范化解宗教领域风险隐患，坚持独立自主自办原则不动摇，维护宗教领域正常秩序和社会和谐稳定。要坚持全面从严治教，完善宗教团体的内部规章制度，改进宗教组织体制和管理模式，持续开展崇俭戒奢教育活动。王沪宁表示，宗教团体是党和政府团结联系宗教界人士和信教群众的桥梁纽带，党和政府一直高度重视同宗教界人士的团结合作，各地区各有关部门要一如既往支持宗教团体工作，帮助解决实际困难.
Shi Taifeng, who heads the UFWD, was part of the meeting.
There’s a report on Wang Yang’s comments at the closing of the Standing Committee of the 13th CPPCC National Committee meeting. He praises Xi’s leadership. But the key outcomes from the meeting are around personnel changes, agenda adoption for the annual session and fixing the schedule for the annual session. On the next page, there’s a report on the candidates who will be part of the 14th CPPCC National Committee.
The structure is as follows; the full list of members is published on Page 6:
There are 2,172 members in all.
Among these, 852 members of the Communist Party of China, accounting for 39.2% of the total.
1320 members are non-CPC individuals accounting for 60.8% of the total.
There are members from 56 ethnic groups
The average age is 56.6 years.
There are 2,037 academicians with a university degree or above, and 125 academicians from the Chinese Academy of Sciences and Chinese Academy of Engineering.
Talking about this Shi Taifeng said that the structure of the new committee was broad and representative; there was a focus on individuals’ professional knowledge, ability, work style and spirit; and the quality of the candidates was high.
“In 2022, China completed its major political agenda. We held the 20th National Congress of the Communist Party of China (CPC), and elected the new central leadership with President Xi Jinping at its core. We drew up an ambitious blueprint for advancing Chinese modernization in the coming five years and beyond. Last month, we held the annual Central Economic Work Conference to make plans for 2023 in line with the deployment of the 20th CPC National Congress. In 2022, China's growth was 3 percent. And we managed to keep jobs and prices stable. Urban surveyed unemployment rate was 5.6 percent, CPI was 2 percent, and current account surplus was slightly above two percent of GDP. In 2023, we will continue to try to make progress while maintaining stability, and follow a proactive fiscal policy and a prudent monetary policy. We will strive to maintain reasonable economic growth, and keep prices and jobs stable. More focus will be placed on expanding domestic demand, keeping supply chains stable, supporting the private sector, reforming the State-owned enterprises (SOEs), attracting foreign investment, and preventing economic and financial risks. If we work hard enough, we are confident that growth will most likely return to its normal trend, and the Chinese economy will see a significant improvement in 2023. A noticeable increase of import, more investment by companies, and consumption returning back to normal can be expected.”
He then put forward five points that China has learned since reform and opening up:
First, we must always take economic development as the primary and central task. In this, he talked about high-quality development
Second, we must always make establishing a socialist market economy the direction of our reform. We must let the market play a decisive role in resources allocation, let the government play a better role. (Some people say China will go for the planned economy. That's by no means possible.) We will deepen SOE reform, support the private sector, and promote fair competition, anti-monopoly and entrepreneurship.
Third, we must always promote all-round opening-up.
Fourth, we must always uphold the rule of law.
Fifth, we must pursue innovation-driven development. We must promote innovation and education, grow human capital, foster a sound interaction of finance, technology and industry, and boost productivity.
Next, he spoke about three specific issues
On the real estate sector, he said:
“Real estate sector is still a pillar for China's economy. It accounts for nearly 40 percent of bank lending, 50 percent of overall local government fiscal resources, and 60 percent of urban household assets. From the second half of 2021, China experienced a rapid decline in property prices and home sales. Many property developers suffered from liquidity shortage and deteriorating balance sheet. The risks of a handful of leading property developers are particularly noticeable. If not handled properly, risks in the housing sector are likely to trigger systemic risks. That is why prompt steps must be taken to address them. That said, however, we should also prevent possible moral hazards while doing so. Here is what we have done. First, we have stabilized expectations by honoring contracts and protecting property rights. For the 2,600-plus pre-sold but unfinished housing projects that concern 1.88 million people across the country, we have made ensuring their delivery a priority, and this helped prevent panic in the market. Second, we have conducted massive ‘blood transfusion’ to the real estate sector. The liquidity situation of real estate companies has been greatly enhanced by way of fresh bank lending, bond issuance guarantee, and equity financing. Third, we have helped the real estate sector with ‘blood formation’. We have relaxed restrictions that were once introduced to address the overheating in the property market. Such adjustment has expanded effective demand and enabled property developers to generate revenue.”
On dual circulation, he said: “China's national reality dictates that opening up to the world is a must, not an expediency. We must open up wider and make it work better. We oppose unilateralism and protectionism, and look forward to strengthening international cooperation with all countries for world economic stability and development, and the promotion of economic re-globalization.”
On common prosperity, he said: “It is a long-term task that requires an incremental and gradual approach. It is not something to be achieved overnight. Common prosperity, as we see it, is aimed at preventing polarization. It can only be attained through common development and the hard work of every Chinese. Common prosperity is by no means a synonym of egalitarianism or welfarism. As China grows, all Chinese people will be better off, but that doesn't mean their incomes and level of prosperity have to be the same. (That is to say, there will be equal opportunities, but no guarantee of equal outcomes).”
Liu concluded with three final points.
First, on the international order: “we have to abandon the Cold War mentality, try to understand the nature of things from the perspective of material duality, endeavor to build a community with a shared future for mankind, and join hands to respond to global challenges. We believe that an equitable international economic order must be preserved by all. Equitable division of labor, encouragement of competition, anti-monopoly, protection of property rights and IPRs, promoting entrepreneurship and free flow of production factors, fair distribution, a strong social safety net, and ensuring macroeconomic stability are the well-proven economic principles that are still relevant today.”
Second, “we call for more attention to the negative spillover effect of major countries' rate hikes on the emerging markets and developing countries so as not to add to more debt or financial risks. We stand ready to work with all parties to find solutions to the debt issues of some developing countries.”
On climate change: “China will honor its commitments to the international community, push for global cooperation on climate change, and work with other countries to tackle the serious challenges posed by climate change, and build a community with a shared future for mankind.”
“China is ready to work with the new Malaysian government to fully leverage the role of the high-level committee on China-Malaysia cooperation and other mechanisms, continue to promote high-quality Belt and Road cooperation, and make solid progress in key projects, Qin said. China is willing to deepen cooperation with regional countries to jointly safeguard regional peace and stability, and looks forward to working with Malaysia to deepen and consolidate the comprehensive strategic partnership between China and the Association of Southeast Asian Nations, he said. The Malaysian government and various sectors of the society hold objective and just views on China's epidemic prevention policy, and welcome Chinese tourists to their country, Qin said, adding that China commends them for all this. Qin said he believes that with joint efforts, the two sides will soon restore normal personnel exchanges.” — Isn’t it interesting that he commended Malaysia with regard to the views on China’s COVID situation rather than thanked or expressed appreciation.
Xinhua’s report on the chat with Mongolia’s Batmunkh Battsetseg says that:
“To maintain, consolidate and further develop China-Mongolia relations is the strategic choice of both sides, Qin said. China is willing to strengthen exchanges with Mongolia at all levels and deepen cooperation in various fields so as to make new progress in jointly building a community with a shared future, he said. Recently, China has optimized and adjusted its prevention and control measures in light of the changing situation of the epidemic, including introducing new policies aimed at facilitating cross-border travel, Qin said. China appreciates Mongolia's scientific-based and objective stand and its support for normal people-to-people exchange between the two countries, Qin said.”
The report adds that Battsetseg said that “Mongolia will as always stick to the one-China principle and is willing to further enhance high-level exchanges and deepen pragmatic cooperation with China, so as to make contributions to regional and international peace and stability and to push the Mongolia-China comprehensive strategic partnership to new levels.”
Finally, there’s a brief report on Xia Baolong meeting with Russian Ambassador to China Igor Morgulov.
Page 3: There’s a report on Chen Xi’s comments at a national meeting of officials from organisation departments across the country. He basically reinforced key Party messaging:
Uphold the centralised and unified leadership of the CCP
Ensure that party members and cadres deeply understand the decisive significance of the Two Establishments, strengthen the four consciousnesses and four self-confidence and achieve the two safeguards
Focus on Xi Jinping thought and unify thinking, will and actions and carry out thematic education focusing on leading cadres at and above the county level
Build a team of high-quality cadres who can take on the important task of national rejuvenation, continuously optimise the selection and training of cadres, insist on matching virtue with their positions…
Next, there’s an interview with Chongqing Mayor Hu Henghua on the city’s economic policies. In the first part of his response, Hu basically says that Chongqing has adhered to Xi’s instructions. He then talks about the goals for the next five years, which are about achieving six improvements:
First, focus on economic growth: Chongqing’s GDP and per capita GDP have passed the 4 trillion yuan and 120,000 yuan mark respectively.
Second, enhance the strength of science and education. The investment in R&D in the whole society has increased by more than 10% annually. The added value of the digital economy accounts for more than 50% of the city’s GDP.
Focus on city development. The city’s urbanisation rate has reached 75%.
Work on ecological civilisation construction. The number of good air quality days have stabilised to 338;; water quality of the main stream of the Yangtze River remained stable at Class II; the phase-wise goals of carbon peak and neutrality have been achieved.
Focus on improving the level of social governance.
Focus on improving people's living standards The per capita disposable income of all residents is higher than the national average, and the income growth of residents is higher than economic growth.
In terms of pursuing Chinese-style modernisation, he talks about the following:
First, better serve the overall situation of national regional development, accelerate the construction of the Chengdu-Chongqing economic circle, and strive to play a supporting role in promoting the development of the western region in the new era
Second focus on reform and opening up, specifically BRI
Third, better serve the overall situation of the green development of the Yangtze River Economic Belt
Fourth, better serve and promote the overall situation of common prosperity, accelerate the coordinated development of urban and rural areas…
On economic tasks going ahead, Hu talks about;
Promoting economic stabilisation and recovery. In this, he talks about implementing the central policy packages, boosting demand, expanding effective investment and promoting higher quality of foreign trade and foreign investment.
Building a modern industrial system. In this, he mentions the need to improve the quality and efficiency of the manufacturing industry, and promote the development of high-end, intelligent, and green industries.
Focus on enhancing the vitality of market players. In this, he mentions the need to adhere to the ‘two unwavering’, implement the reform of SOEs to improve efficiency and increase capacity, and solidly promote the healthy development of the private economy.
Focus on the Chengdu-Chongqing circle.
Focus on promoting the construction of the new land-sea corridor connecting the western region.
Focus on preventing and defusing major risks.
Focus on improving the quality of life of the people. In this, he talks about the need to “do everything possible to stabilise employment, stabilise prices, and protect people's livelihood.”
In the final section, he talks about the following 7 focus areas:
Focussing on development of Chengdu-Chongqing economic circle
Make greater breakthroughs in building world-class industrial clusters, and jointly build two trillion-dollar industrial clusters around intelligent networked new energy vehicles and electronic information manufacturing
Achieve greater breakthroughs in accelerating inland connectivity to the west
Achieve breakthroughs in the high-level co-construction of the Western Science City, jointly build a high-energy innovation platform, strengthen key core technology research, promote the transformation and application of scientific and technological achievements, and build a good innovation ecology.
Achieve greater breakthroughs in deepening cooperation with adjacent areas, increase support for cooperation and joint construction of functional platforms, create a number of ‘bridgehead’ cities, and promote the pilot reform of the moderate separation of economic zones and administrative regions.
Promote unified handling of matters with regard to Sichuan and Chongqing
Make greater breakthroughs in building an efficient mechanism for coordination and cooperation
Like the past two days, there are more provincial-level personnel confirmation reports on the page.
Page 13: There’s a Zhong Yin commentary basically making the point that China’s COVID policy was awesome and it also promoted development.
“In the past three years, China’s economy has grown at an average annual rate of about 4.5%, which is significantly higher than the world average. In 2021, China’s total import and export of goods exceeded $6 trillion, a record high; from January to November 2022, China’s total import and export of goods increased by 8.6% year-on-year. It can be said that China's achievements in epidemic prevention and control and development are obvious to all and can stand the test of history.” 过去三年我国经济年均增长4.5%左右，明显高于世界平均水平；2021年，我国货物进出口总额突破6万亿美元，创历史新高；2022年1至11月份，我国货物进出口总额同比增长8.6%。可以说，我国抗疫和发展的成绩有目共睹，经得起历史的检验.
It adds that China’s economy “has strong resilience, great potential, and sufficient vitality” and that now many localities have pressed the ‘fast forward’ key on development. It adds that China’s “optimisation of epidemic prevention and control measures will help improve the resilience and security of the country’s own industrial and supply chains, and will also inject stability and certainty into the world economy.” It says that the international media has also captured the positive signals from the shift in China’s policies.
“A recent survey conducted by the China Council for the Promotion of International Trade covering more than 160 foreign-funded enterprises and foreign business associations in China showed that 99.4% of the foreign-funded enterprises interviewed had more confidence in the economic development prospects of China in 2023, and 98.7% indicated that they will maintain and expand their investment in China.” 中国贸促会近期对160多家在华外资企业和外国商协会进行的调研显示，99.4%的受访外资企业对2023年中国经济发展前景更有信心，98.7%的受访外资企业表示将维持和扩大在华投资.
That’s it from the paper today. But beyond this, there have been some really interesting developments related to China’s engagement in the Indian subcontinent. I am doing a special section on that below, which is only available for paid subscribers. If you’d like to access these along with the monthly briefs on Chinese discourse on India that I plan to start from March, then please do consider upgrading your subscription.