2nd Plenum: Party & State Institutions Reforms on the Anvil - China's Big Data Industry @1.57 tln RMB - Qin Gang on GSI - Yu Jianhua on Customs Agenda - Aim for 10k 'Little Giants' by 2023
Here are the key reports and articles that I found noteworthy from the People’s Daily’s edition on Wednesday, February, 22, 2023.
Page 1: The main story on the page is about the Politburo meeting, which ended with an announcement that the second plenary session of the 20th Central Committee will be held from February 26 to 28 in Beijing.
The meeting discussed a work report of the Politburo to the Central Committee and a draft plan for the reform of Party and state institutions, which will be submitted for confirmation at the second plenum. The last time we saw the reform of Party and state institutions was in 2018 after the 19th Party Congress. There were significant structural changes made back then, which emphasised Party control over state institutions. If you are interested, here is CSET’s full translation of the 2018 plan.
The report says that reforms to Party and state institutions since the 18th Party Congress had “provided a strong guarantee for achieving historic achievements and changes in the cause of the Party and the country and accumulated precious experience for further reform of Party and state institutions.”
It adds that the 20th Party Congress “made important arrangements for deepening institutional reform.” This reform must be “guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, guided by strengthening the centralised and unified leadership of the CPC Central Committee, guided by promoting the modernisation of the national governance system and governance capacity, adhere to the general tone of striving for progress while maintaining stability, adapt to the requirements of promoting the five-pronged overall approach and the four comprehensives strategic layout in a coordinated manner, adapt to the needs of building a new development pattern and promoting high-quality development, and adhere to the problem orientation; coordinate the Party Central Committee, the NPC, the State Council, and the CPPCC NC, coordinate the central and local governments, deepen institutional reforms in key areas, and ensure that the Party's leadership over socialist moderniSation becomes more refined in institutional setup, more optimised in the division of functions, more improved in institutions and mechanisms, and more efficient in operation and management.” 会议强调，党的二十大对深化机构改革作出重要部署，对于全面建设社会主义现代化国家、全面推进中华民族伟大复兴意义重大而深远。必须以习近平新时代中国特色社会主义思想为指导，以加强党中央集中统一领导为统领，以推进国家治理体系和治理能力现代化为导向，坚持稳中求进工作总基调，适应统筹推进“五位一体”总体布局、协调推进“四个全面”战略布局的要求，适应构建新发展格局、推动高质量发展的需要，坚持问题导向，统筹党中央机构、全国人大机构、国务院机构、全国政协机构，统筹中央和地方，深化重点领域机构改革，推动党对社会主义现代化建设的领导在机构设置上更加科学、在职能配置上更加优化、在体制机制上更加完善、在运行管理上更加高效。
The meeting also discussed a list of proposed candidates for the leading positions of state institutions to be recommended to the first session of the 14th NPC, and a list of proposed candidates for the leadership of the CPPCC NC to be recommended to the first session of the 14th CPPCC National Committee.
The meeting also discussed a draft report on the work of the government, which the State Council will submit to the forthcoming first session of the 14th NPC for deliberation. This is the work report that Li Qiang will deliver at the NPC session in early March.
There’s a glimpse of some of the narrative that we are likely to hear.
The meeting held that the past year was an extremely important year in the history of the Party and the country. We successfully convened the 20th Party Congress and put together a grand blueprint for building a modern socialist country in an all-round way. The CPC Central Committee with comrade Xi Jinping at the core united and led the people of all ethnic groups across the country to overcome difficulties, fully implemented the requirements of preventing the epidemic, stabilising the economy, and coordinating development and security; it strengthened macro-control and maintain stability in the overall economic and social situations. The past five years have been extremely unusual and extraordinary. We have effectively responded to various difficulties, risks and challenges, effectively coordinated epidemic prevention and control and economic and social development, won the battle against poverty, and completed the building of a moderately prosperous society in all respects as scheduled. China's economic and social development has made remarkable achievements. 会议认为，过去一年是党和国家历史上极为重要的一年。我们胜利召开党的二十大，描绘了全面建设社会主义现代化国家的宏伟蓝图。以习近平同志为核心的党中央团结带领全国各族人民迎难而上，全面落实疫情要防住、经济要稳住、发展要安全的要求，加大宏观调控力度，经济社会大局保持稳定。过去5年极不寻常、极不平凡，我们有力应对各种困难和风险挑战，高效统筹疫情防控和经济社会发展，如期打赢脱贫攻坚战，如期全面建成小康社会，我国经济社会发展取得举世瞩目的重大成就.
The next paragraph says that this is the first year to fully implement the spirit of the 20th Party Congress. “To do a good job under the strong leadership of the Party Central Committee with Comrade Xi Jinping at the core and the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, it is important to implement the spirit of the 20th Party Congress, solidly promote Chinese-style modernisation in accordance with the arrangements of the CEWC, adhere to the general tone of striving for progress while maintaining stability, fully implement the new development concept, accelerate the construction of a new development pattern, focus on promoting high-quality development; better coordinate the two overall situations at home and abroad, better coordinate epidemic prevention and control with economic and social development, better coordinate development and security, comprehensively deepen reform and opening up, vigorously boost market confidence, organically combine the implementation of the strategy of expanding domestic demand with deepening supply-side structural reform, focus on stabilising growth, employment and prices, effectively prevent and resolve major risks, promote the overall improvement of economic operation, achieve effective improvement in quality and reasonable growth in quantity, continuously improve people’s livelihood, maintain overall social stability, and make a good start for building a modern socialist modern in an all-round way. 做好政府工作，要在以习近平同志为核心的党中央坚强领导下，以习近平新时代中国特色社会主义思想为指导，全面贯彻落实党的二十大精神，按照中央经济工作会议部署，扎实推进中国式现代化，坚持稳中求进工作总基调，完整、准确、全面贯彻新发展理念，加快构建新发展格局，着力推动高质量发展，更好统筹国内国际两个大局，更好统筹疫情防控和经济社会发展，更好统筹发展和安全，全面深化改革开放，大力提振市场信心，把实施扩大内需战略同深化供给侧结构性改革有机结合起来，突出做好稳增长、稳就业、稳物价工作，有效防范化解重大风险，推动经济运行整体好转，实现质的有效提升和量的合理增长，持续改善民生，保持社会大局稳定，为全面建设社会主义现代化国家开好局起好步。
The final paragraph states that it is necessary to “implement a proactive fiscal policy and a prudent monetary policy, strengthen coordination of various policies, and form a joint force to promote high-quality development.” It adds that “efforts should be made to expand domestic demand, accelerate the construction of a modern industrial system, earnestly implement the Two Unwaverings’, make greater efforts to attract and utilise foreign capital, effectively prevent and resolve major economic and financial risks, stabilise grain production and promote rural revitalisation, promote the green transformation of development, safeguard basic people's livelihood and develop social undertakings, and strive to accomplish the objectives and tasks of economic and social development this year. The government's efforts to strengthen itself must be stepped up, and the practice of conducting research should be encouraged.” 会议指出，要全面贯彻落实党中央决策部署，坚持稳字当头、稳中求进，实施积极的财政政策和稳健的货币政策，加强各类政策协调配合，形成共促高质量发展合力。要着力扩大国内需求，加快建设现代化产业体系，切实落实“两个毫不动摇”，更大力度吸引和利用外资，有效防范化解重大经济金融风险，稳定粮食生产和推进乡村振兴，推动发展方式绿色转型，保障基本民生和发展社会事业，努力完成今年经济社会发展目标任务。要加强政府自身建设，大兴调查研究之风.
Next, there’s a report informing that the scale of China’s big data industry in 2022 was 1.57 trillion yuan, an increase of 18% year-on-year. This is data from the press conference of the China International Big Data Industry Expo 2023. The report informs that China’s digital infrastructure has achieved “leapfrog” development. By the end of 2022, China has built the world's largest optical fibre network, with a total optical fibre mileage of nearly 60 million km, a total data centre rack of nearly 6 million standard racks, more than 2.3 million 5G base stations nationwide. 2022年底，我国已建成全球最大的光纤网络，光纤总里程近6000万公里，数据中心总机架近600万标准机架，全国5G基站超过230万个，均位居世界前列.
The number of invention patents granted in artificial intelligence, Internet of Things and other fields ranks among the top in the world, and the scale of core industries in the digital economy has accelerated. The national software business revenue has increased from 2.5 trillion yuan in 2012 to 10.8 trillion yuan in 2022. 人工智能、物联网等领域的发明专利授权量居全球前列，数字经济核心产业规模加快增长，全国软件业务收入从2012年的2.5万亿元增长到2022年的10.8万亿元.
The report adds that the “the next steps will be to accelerate the construction of 5G and Gigabit optical networks, comprehensively promote the research and development of 6G technology, deepen the deployment and application of IPv6, promote the construction of national integrated big data centre hub nodes, and consolidate the development foundation of big data industry. At the same time, China will encourage all kinds of ownership enterprises to participate in the construction of the data factor market, promote the deep integration of big data with various industries, and give full play to the multiplier effect of big data.” 工信部信息技术发展司有关负责人表示，下一步将加快5G和千兆光网建设，全面推进6G技术研发，深化IPv6规模部署和应用，推动国家一体化大数据中心枢纽节点建设，夯实大数据产业发展根基。同时，鼓励各类所有制企业参与数据要素市场建设，推动大数据与各行业深度融合，充分发挥大数据的乘数效应和倍增作用.
Third, there’s a report on China’s home appliance industry. Its revenue was 1.75 trillion yuan, a year-on-year increase of 1.1% in 2022; total profits were 141.8 billion yuan, a year-on-year increase of 19.9%. Some of these numbers must be taken with a pinch of salt I guess, given the subsidies that were extended last year.
Page 2: Foreign affairs related reports are on this page today. Let’s begin with Foreign Minister Qin Gang’s speech on GSI, after the release of the concept paper. Qin’s comments were part of his keynote speech at the opening ceremony of the Lanting Forum. Xinhua reports:
“The Global Security Initiative (GSI) upholds the vision of common, comprehensive, cooperative and sustainable security, pursues the long-term objective of building a security community and advocates a new path to security featuring dialogue over confrontation, partnership over alliance and win-win over zero-sum, Qin said. The GSI embodies the core tenets in the vision of a community with a shared future for mankind, and has been warmly received by the international community upon its introduction. Over 80 countries and regional organizations have expressed their appreciation and support, Qin said.”
In the speech, he outlined five core tenets under GSI:
Firmly support the core role of UN security governance
Efforts should be made to promote coordination and positive interaction among major powers
Actively promote dialogue to resolve hotspot issues peacefully
Effectively respond to traditional and non-traditional security challenges
Continuously strengthen the global security governance system and capacity building
He added that “the 20 priorities of cooperation laid out in the concept paper could be summarized as upholding the UN's central role in security governance, promoting coordination and sound interactions among major countries, facilitating peaceful settlement of hotspot issues through dialogue, tackling traditional and non-traditional security challenges, and strengthening the system and capacity for global security governance.”
Qin added that “China will never seek hegemony, expansion or sphere of influence, or engage in arms race, but remain a defender of world peace. China will always be committed to advancing the process of international arms control, disarmament and non-proliferation, actively responding to global challenges, and persisting in promoting resolution of hotspot issues with China characteristics.” 中国将始终致力于走和平发展道路，未来无论发展到什么程度，中国永远不称霸、不扩张、不谋求势力范围，不搞军备竞赛，始终坚持作世界和平的守护者。中国将始终致力于推进国际军控、裁军和防扩散进程，积极应对全球挑战，坚持中国特色的热点问题解决之道.
He also argued that “external suppression and containment of China has been escalating and intensified, posing a serious threat to China's sovereignty and security.” In this regard, China will “resolutely oppose all forms of hegemonism and power politics, the Cold War mentality and camp confrontation, any external interference in China's internal affairs, and resolutely safeguard national sovereignty, security, development interests and international fairness and justice. China looks forward to working with other countries in the direction indicated by GSI…” 但来自外部的对中国的打压遏制却不断升级，愈演愈烈，对中国的主权和安全构成严重威胁。我们坚决反对一切形式的霸权主义和强权政治，坚决反对冷战思维和阵营对抗，坚决反对任何外部势力干涉中国内政，坚决维护国家主权、安全、发展利益和国际公平正义。中国期待与各国一道，沿着全球安全倡议指明的方向，携手并肩，团结合作，共同迈向持久和平、普遍安全的美好明天.
Finally, he added: “In the meantime, we urge certain countries to immediately stop fuelling the fire, stop shifting blame to China, and stop touting 'Ukraine today, Taiwan tomorrow’.”
There’s a report with positive assessments from foreign officials to GSI, and a commentary that reiterates the key points from the paper.
Next, there’s a report on the 126th Mekong River joint patrol, with law-enforcement authorities from China, Laos, Myanmar and Thailand working together. Xinhua says:
“The commanders from China, Laos and Thailand will jointly conduct the patrol from the command office set up on a Chinese vessel, while Myanmar is participating in the mission via video link. The patrol will focus on tackling cross-border crimes to ensure safety and stability along the river.”
Finally, a report informing that a delegation led by Guo Yezhou, Vice Minister of the International Department, is visiting Denmark, meeting with key officials. The report says: “The two sides indicated that they will make joint efforts to promote the continuous deepening of pragmatic cooperation between China and Denmark in various fields and promote the further development of China-EU relations.”
Page 3: A report informing that the PBOC issued 25 billion yuan ($3.64 billion) worth of central bank bills in Hong Kong on Tuesday. Global Times has the English report:
“The issuance was 2.8 times oversubscribed, showing overseas investors' continued interest in yuan-denominated assets and confidence in Chinese mainland's economic recovery. Among the issuance, 10 billion yuan worth of central bank bills will mature in three months with an interest rate of 2.40 percent, and the other 15 billion yuan will mature in one year with an interest rate of 2.75 percent, according to a statement released by PBC. The issuance was well-received by overseas investors. Institutional investors, including banks, central banks, funds, insurance companies and international financial organizations from the US, Europe, Asia and other countries and regions actively participated in the subscription. The total bidding amount exceeded 70 billion yuan, about 2.8 times the bills issued. It showed that yuan assets are highly attractive to foreign investors, and also reflects global investors' confidence in the Chinese economy, the central bank said.”
Another report on the 2023 National Property Insurance Supervision Work Conference held by CBIRC. Some data from the report:
The property insurance market continued to grow steadily last year.
In 2022, the premium income was 1.5 trillion yuan, an increase of 8.7% year-on-year
Around 907.82 billion yuan worth of compensation was paid, a year-on-year increase of 2.6%.
Among this, agricultural insurance realised premium income of 121.94 billion yuan, a year-on-year increase of 25%, providing risk protection for 170 million households worth 4.6 trillion yuan.
By the end of last year, the total assets of the property insurance industry were 2.7 trillion yuan, an increase of 9.0% over the end of 2021.
据介绍，去年财险市场持续稳定增长，2022年实现保费收入1.5万亿元，同比增长8.7%；提供风险保障12457.4万亿元，同比增长14.7%；支付赔款9078.2亿元，同比增长2.6%。其中农业保险实现保费收入1219.4亿元，同比增长25%，为1.7亿户次农户提供风险保障4.6万亿元。截至去年底，财险业总资产2.7万亿元，较2021年底增长9.0%。
Page 4: Two reports to note. First, the fifth batch of little giant enterprises is likely to be announced soon. As per a notice by the Ministry of Industry and Information Technology, this list will be published after experts review the recommendations submitted by regional authorities. Xinhua says that efforts will be made to create a better development environment and enhance services for these specialised and innovative firms. The country will strive to ensure the number of the little giant firms exceeds 10,000 by the end of 2023, and that of specialised and special SMEs exceeds 80,000. So far, there are 8,997 little giant enterprises and 848 individual champion enterprises in the manufacturing industry that have been cultivated.
Second, a report on appointments by the State Council.
Hu Jinjun and Xing Bo were appointed vice presidents of the China Media Group. They replace Yan Xiaoming and Jiang Xiwei. Also, Xu Qifang was named head of the National Civil Service Administration, replacing Zhu Jianping.
Page 6: A report on the mineral resources plan issued by the Shanxi government. The plan says that, by 2025, the coal production capacity will be stabilised within 1.56 billion tons/year, the coal output will remain at 1.4 billion tons/year, and the number of coal mines will be around 900. The plan also calls for promoting the “optimal combination of coal and new energy.” It adds that “at the end of the 14th Five-Year Plan period, the proportion of large and medium-sized mines in the province would have increased significantly; this would comprise 100% of coal mines.”
Page 10: There’s an interesting article by Yu Jianhua, who is the Party Secretary of the General Administration of Customs, talking about unleashing customs strength/force to achieve Chinese-style modernisation. I am not doing a detailed breakdown. But some important points to note are:
In December 2022, the overall customs clearance time for imports and exports across the country was lower by 67.1% and 91.6%, respectively, compared with 2017.
In the first 11 months of 2022, China’s total import and export of goods accounted for 12.6% of the global share. The trade structure has been continuously optimised, and solar energy, lithium batteries, and electric vehicles have become new drivers of export growth.
Economic and trade relations will become more diversified and stable. In 2022, the proportion of China’s trade with ASEAN increased to 15.5%, and the proportion of trade with BRI countries increased to 32.9%.
“The GAC has resolutely implemented the overall national security concept, dynamically adjusted and optimised epidemic prevention and control measures at ports, resolutely maintained the first line of defence with regard to imports, making due contributions to the overall national fight against the epidemic. We will continue to vigorously guard against major animal and plant epidemics and the introduction of alien invasive species, and tighten inspection and oversight of import and export commodities and food products, thus strengthening our national security line. We have severely cracked down on illegal activities of smuggling foreign garbage, ivory and other endangered species and their products, and effectively safeguarded the safety of the ecological environment. It was awarded the ‘Asia Environmental Enforcement Awards’ by the United Nations on four occasions. We will maintain the high-pressure situation of cracking down on smuggling and vigorously safeguard economic security and social stability.” 统筹发展和安全取得新进展。我国坚持以新安全格局保障新发展格局，在扩大对外开放的同时，着力维护开放安全。海关坚决落实总体国家安全观，动态调整优化口岸疫情防控措施，坚决守牢外防输入第一道防线，为全国抗疫大局作出应有贡献。有力防范重大动植物疫情疫病和外来入侵物种传入，严格进出口商品、食品检验监管，国门安全防线更加牢固。严厉打击走私洋垃圾、象牙等濒危物种及其制品违法行为，有力维护生态环境安全，4次被联合国授予“亚洲环境执法奖”。保持打击走私高压态势，有力维护经济安全和社会稳定.
China’s “international influence, appeal, and shaping power have been significantly improved.” Focusing on the building of a high-quality BRI, customs authorities have vigorously promoted and publicised the cooperation concept of ‘smart customs, smart borders, and smart connectivity”, deepened multilateral and bilateral international cooperation, signing more than 1,000 international customs cooperation documents. AEO (Authorised Economic Operator) mutual recognition has been realised with 48 countries (regions)...Nearly 5,000 advanced customs-certified enterprises enjoy the same customs clearance convenience abroad as in China. GAC has led the formulation of the ‘Cross-Border E-Commerce Standard Framework’, deeply participating in and leading the reshaping of international customs rules.” 海关围绕高质量共建“一带一路”，大力推介宣传“智慧海关、智能边境、智享联通”合作理念，深化多双边国际合作，签署1000余份海关国际合作文件。与48个国家（地区）实现AEO（经认证的经营者）互认，数量保持世界第一，近5000家海关高级认证企业在境外享受和国内同样的通关便利。牵头制定《跨境电商标准框架》，深度参与和引领国际海关规则重塑.
Going forward, the article calls for:
Implementing the overall national security concept: Under this, it talks about strengthening anti-terrorism drills at ports, strictly checking the entry of contraband, effectively maintaining political security, deepening comprehensive tax control, cracking down on smuggling in key areas and of key commodities, maintaining the security of the industrial and supply chains, cracking down on smuggling of endangered species, maintaining ecological security, ensuring entry-exit health quarantine, animal and plant quarantine, and commodity food inspection and supervision, etc.
Better facilitating foreign trade to build the new development pattern
Accelerate the construction of socialist modern customs with Chinese characteristics. Under this, the call is to grasp the “essential requirements and major principles of Chinese-style modernisation” and basically use technology and improve efficiency and regulation.
Among other things, the final section says this:
“Deeply participate in leading the formulation of international rules, fully implement the GDI, promote the strategic alignment of the cooperation concept of Smart Customs, Smart Borders and Smart Connectivity with the World Customs Organization (WCO), and actively participate in the research and negotiation for the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership (DEPA), and promote the negotiation of free trade agreements between China and GCC.” 深度参与引领国际规则制定，全面落实全球发展倡议，推进“智慧海关、智能边境、智享联通”合作理念与世界海关组织（WCO）的战略对接，积极参与全面与进步跨太平洋伙伴关系协定（CPTPP）、数字经济伙伴关系协定（DEPA）等研究谈判，推进中国与海合会等自贸协定相关议题谈判.
Page 15: The full GSI Concept Paper is published on the page. Along with this, there’s this engagement from yesterday’s MoFA press briefing that’s published in the paper today.
The Paper: US Secretary of State Antony Blinken recently said that China knows that there would be consequences were China to provide lethal assistance to Russia. But he refused to lay out what the consequences would be if China ignored the warning. What’s your comment?
Wang Wenbin: The US is the biggest source of weaponry for the battlefield in Ukraine. Just yesterday, the US side announced a further $500 million worth of military aid to Ukraine. It makes people wonder what the US is up to by falsely claiming that China is offering weapons, and whether the US finds it conscionable to tell the world it wants peace and yet sit and watch its defense industry lining up their pocket. We all saw what the US did in Afghanistan with its strategy of “fighting to the last Afghan”. Does it now want Ukraine to “fight till the last Ukrainian”? There are more than enough facts to show the true nature of the US as a source of trouble rather than “defender of peace” for the world. The China-Russia comprehensive strategic partnership of coordination is built on the basis of non-alliance, non-confrontation and non-targeting of any third party, which is within the sovereign right of any two independent states. We do not accept the US’s finger-pointing or even coercion targeting China-Russia relations. The US should seriously reflect on what it has done, stop fanning the flames or profiting from it, and stay truly committed to promoting peace talks as China has been doing.
I encourage reading through the press briefing, particularly Wang’s response to Reuters’ question on whether China’s view on Ukraine had changed given the release of the GSI paper. Did it now see the war as a violation of Ukraine’s sovereignty and territorial integrity. It’s amusing to see Wang tie himself up in knots. This is a reflection of China basically not being able to call a spade a spade while putting forward these high moral propositions under GSI.