BRICS Summit Special Focus - Building a Digital Government - Review of Financial System's Development - Yuan Jiajun Elected Zhejiang Secretary - Wang Yi: US Must Respond to 'Iran's Reasonable Demands
Here are the stories and pieces that I found noteworthy in the Friday, June 24, 2022, edition of the People’s Daily.
Page 1: The lead story on the page is about the 14th BRICS leaders meeting being held, with Xi Jinping chairing the meeting. Ding Xuexiang, Wang Yi and He Lifeng were also in attendance. The report on the page basically draws from Xi’s speech, which is published on Page 2. Also, here’s the English text. Xi said:
“Our world today is living through accelerating changes unseen in a century and continued spread of the COVID-19 pandemic. They confront humanity with unprecedented challenges and usher in a new phase of instability and transformation for global development.” He talks about BRICS’ development over the years and says that it must “keep in mind why we established BRICS in the first place, and look forward to a shared future of a more comprehensive, close, practical and inclusive high-quality partnership.”
Xi then made four points:
uphold solidarity and safeguard world peace and tranquillity. “Our world today is overshadowed by the dark clouds of Cold War mentality and power politics, and beset by constantly emerging traditional and non-traditional security threats. Some countries attempt to expand military alliances to seek absolute security, stoke bloc-based confrontation by coercing other countries into picking sides, and pursue unilateral dominance at the expense of others' rights and interests. If such dangerous trends are allowed to continue, the world will witness even more turbulence and insecurity.” Therefore, the BRICS must “support each other on issues concerning core interests, practice true multilateralism, safeguard justice, fairness and solidarity and reject hegemony, bullying and division.” In this context, he spoke about the Global Security Initiative, adding that “China would like to work with BRICS partners to operationalize the GSI and bring more stability and positive energy to the world.”
He talked about the pandemic and the “Ukraine crisis” resulting “in disruptions to global industrial and supply chains, sustained hikes of commodity prices, and weaker international monetary and financial systems.” He said that the BRICS had this year launched the “BRICS Initiative on Enhancing Cooperation on Supply Chains and the Initiative on Trade and Investment for Sustainable Development, adopted the Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters and the Strategy on Food Security Cooperation, and held a High-level Meeting on Climate Change for the first time,” calling for using these mechanisms effectively. He also called for admitting new members to the New Development Bank and expanding BRICS cooperation on cross-border payment and credit rating. Also, Xi said: “China stands ready to work with BRICS partners to add more substance to the GDI and contribute to stronger, greener and healthier global development.”
The next point is about the economy of the future. Xi said: “Those who seize the opportunities of the new economy, such as big data and artificial intelligence, are in sync with the pulse of the times. Those who seek to create monopoly, blockade and barriers in science and technology in order to disrupt other countries’ innovation and development and hold on to their dominant position are doomed to fail.”
Finally, he talked about the BRICS+ system and formal expansion of BRICS. He said: “BRICS countries gather not in a closed club or an exclusive circle, but a big family of mutual support and a partnership for win-win cooperation. “In recent years, many countries have asked to join the BRICS cooperation mechanism. Bringing in fresh blood will inject new vitality into BRICS cooperation and increase the representativeness and influence of BRICS. This year we have, on separate occasions, had in-depth discussions on the question of membership expansion. It is important to advance this process to allow like-minded partners to become part of the BRICS family at an early date.”
The PD report has one paragraph at the end listing what the leaders agreed upon. This includes commitments towards multilateralism, democratisation of global governance, safeguarding fairness and justice, promoting the fair and rational distribution of vaccines, safeguarding the multilateral trading system, promoting the development of an open world economy, opposing unilateral sanctions and ‘long-arm jurisdiction’, and strengthening cooperation in the fields of digital economy, scientific and technological innovation, industrial and supply chains, food and energy security and focusing on the “most urgent needs of developing countries,” etc.
Later in the paper, the full Beijing Declaration, which was issued after this summit, has been published. India’s MEA has put out an English version of the document. I went through this last night. The key to reading these documents is to compare them to previous joint declarations, and doing that, one realises that there’s nothing that’s truly remarkable or surprising in this one. That said, there are some things to note, which I’ve compiled in the thread below.
But the one thing that I’d like to highlight here is that BRICS expansion appears to be some way away, if we go by what’s in the joint statement:
“We support promoting discussions among BRICS members on BRICS expansion process. We stress the need to clarify the guiding principles, standards, criteria and procedures for this expansion process through Sherpas’ channel on the basis of full consultation and consensus.”
Anyway, on the front page, there’s also a commentary drawing on Xi’s speech at the BRICS Business Forum, which I covered yesterday. There too, Xi had put forward four propositions. The commentary says that through those four propositions, “Xi lent Chinese wisdom by grasping the trend of the times and in order to build a bright future. They have injected Chinese strength into realising common global development and promoting the development of a Community of Shared Future for Mankind. We must be soberly aware that hegemonism, bloc politics and camp confrontation will not bring peace and security, but will only lead to war and conflict. Only by uniting and cooperating to jointly safeguard world peace and stability can the sunshine of peace illuminate the world; development is the key to solving all kinds of problems and realising people’s happiness. Only by helping each other and jointly promoting global sustainable development can we push global development into a new era and benefit people of all countries; politicising, instrumentalising, and weaponizing the world economy will eventually harm others and oneself, and make the people of the world suffer. Only by working together to achieve win-win cooperation can we overcome the economic crisis; economic globalisation is an objective requirement and an irresistible historical trend of the development of productive forces. Only by being inclusive and jointly expanding openness and integration can we bring a broader development space to all countries and a more prosperous future to mankind.” 主席在主旨演讲中提出的4点主张，为各国把握时代潮流、缔造光明未来贡献了中国智慧，为实现全球共同发展、推动构建人类命运共同体注入了中国力量。必须清醒认识到，霸权主义、集团政治、阵营对抗不会带来和平安全，只会导致战争冲突，只有团结协作，共同维护世界和平稳定，才能让和平的阳光照亮世界；发展是破解各种难题、实现人民幸福的关键，只有守望相助，共同促进全球可持续发展，才能推动全球发展迈向新时代，造福各国人民；把世界经济政治化、工具化、武器化，终将损人害己，使世界人民遭殃，只有同舟共济，共同实现合作共赢，才能战胜经济危机；经济全球化是生产力发展的客观要求和不可阻挡的历史潮流，只有包容并蓄，共同扩大开放融合，才能给各国带来更广阔的发展空间，给人类带来更繁荣的未来.
I also recommend going through:
Indian Prime Minister Narendra Modi’s brief opening remarks. His focus was only on issues of governance of the global economy and its recovery, mutually-beneficial economic cooperation, Covid-19-related challenges, the BRICS NDB and people-to-people exchanges.
South African President Cyril Ramaphosa’s remarks. His focus was also largely on development issues, equitable access to vaccines, BRICS’ economic partnership, and the global economic recovery. He also said this: “In line with our foreign policy principles, South Africa continues to call for dialogue and negotiation towards a peaceful resolution of conflicts around the world. We are concerned that the focus and resources of the international community have been diverted from other concerning conflicts and humanitarian crises. Urgent global issues like climate change and sustainable development are not being effectively attended to.”
“We have repeatedly said that challenges like conflict settlement, the fight against terrorism and organised crime, including the criminal use of new technologies, climate change, and the spread of dangerous infections, can only be addressed through joint efforts. And, of course, it is only on the basis of honest and mutually beneficial cooperation that we can look for ways out of the critical situation that has emerged in the world economy because of the ill-conceived and selfish actions of certain states, which, by using financial mechanisms, are actually shifting their own macroeconomic policy mistakes onto the rest of the world. We are confident that today, as never before, the world needs the BRICS countries’ leadership in defining a unifying and positive course for forming a truly multipolar system of interstate relations based on the universal norms of international law and the key principles of the UN Charter. In this context, we can count on support from many states in Asia, Africa and Latin America, which are seeking to pursue an independent policy.”
Also note Putin’s comments earlier at the BRICS Business Forum. He lashed out at the West for imposing “politically motivated sanctions”; “neglect(ing) the basic principles of market economy, free trade, and inviolability of private property”; and pursuing “an irresponsible macroeconomic course, including the launch of the ‘printing press’ – uncontrolled emission and accumulation of unsecured debts.”
He added: “Contacts between Russian business circles and the business community of the BRICS countries have intensified. For example, negotiations are underway to open Indian chain stores in Russia, increase the share of Chinese cars, equipment, and hardware on our market. In its turn, Russia’s presence in the BRICS countries is growing. There has been a noticeable increase in the exports of Russian oil to China and India.” And he said that: “Together with BRICS partners, we are developing reliable alternative mechanisms for international settlements. The Russian Financial Messaging System is open for connection with the banks of the BRICS countries. The Russian MIR payment system is expanding its presence. We are exploring the possibility of creating an international reserve currency based on the basket of BRICS currencies.”
It’s worth noting that the joint statement issued after the summit said that “We underscore the importance of continued work under the existing work streams, including information security in the financial sector, and the BRICS Payments Task Force (BPTF) as a platform for exchanging experience and knowledge, and welcome the central banks’ further cooperation on the payments track.” Compare this to the 2021 post-summit joint statement: “We acknowledge the fruitful cooperation under the BRICS Payments Task Force (BPTF) through dialogues and discussion. We take note of the progress achieved in the ‘BRICS Local Currency Bond Fund’ initiative and look forward to its operation.” — Essentially, nothing new has been agreed upon, it seems.
Brazilian President Jair Bolsonaro’s remarks. He talked about the need for the greater representation of emerging and developing economies in international organizations, such as the World Bank, the IMF and the United Nations system, especially its Security Council, along with the need to focus on job and income generation for the populations of BRICS countries.
Summing this up: Reading all this and the joint statement, there is clearly a deepening contradiction at the heart of the BRICS grouping. The way I see it, even though there are differences in their perspectives, India Brazil and South Africa largely view the BRICS from the prism of development as opposed to security. Of course, there are meetings of BRICS Foreign Ministers and NSAs. But those have generally been more about reaffirming shared perspectives on reforming global governance and coordinating positions on shared concerns as opposed to operationalising new initiatives on security. In contrast, increasingly it appears that Beijing and Moscow would like to infuse a new security dynamic into the grouping. This, in many ways, is not in line with the original aspiration - to use Xi’s phrasing - of the grouping. Doing so is neither going to be easy or straight-forward.
Third, there’s the Gansu chapter in the series on following Xi’s footprints. Fourth, a report (English report) informing that the Council of Chairpersons of the NPCSC held a meeting on Thursday in Beijing. The meeting, presided over by Li Zhanshu, heard reports on proposed changes to a draft revision to the Law on Physical Culture and Sports, a draft black soil conservation law, a draft amendment to the Anti-monopoly Law, and a draft amendment to the procedural rules of the NPC Standing Committee. Participants of the meeting also deliberated on the relevant drafts. The meeting decided to submit the draft documents to the ongoing session of the NPCSC for review.
While on this subject, Xinhua English also reports that Chinese lawmakers have on Friday passed an amendment to the Anti-monopoly Law and they passed the law on black soil conservation. Both of these take effect on Aug. 1, 2022.
Finally, there’s a report about the new guidelines by the State Council on strengthening the construction of a digital government. The document proposes a two-phased goal. Xinhua English summarises this:
By 2025, the country will strive to improve the top-level design and coordination mechanism of a digital government that matches the modernisation of the national governance system. Key advancements would emerge in making scientific government policies, carrying out targeted measures in social governance, and providing efficient public services. In addition, PD reports that the goal is that the construction of a digital government would play an important role in serving the major strategies of the Party and the country, promoting high-quality economic and social development, and building a service-oriented government that the people are satisfied with. By 2035, China will seek to establish a digital government that is coordinated, efficient, intelligent, open, transparent, and inclusive.
There are 7 key tasks that the document details. Xinhua English summarises these:
“The country will promote the digital transformation of government performance, strengthen the monitoring and analysis of big data in economic operation, boost innovation in digital governance models, and continuously improve digital services that benefit enterprises and people. To build an open and shared data resource system, China will innovate data management mechanisms, enhance efficient data sharing, promote the orderly development and utilization of data, and give data factors full play, the guideline noted. By improving the effectiveness of the digital government, the country will better stimulate the vitality of the digital economy, optimize the digital social environment and create a stable digital ecology.”
Page 2: There’s another commentary on Xi’s speech at the BRICS business forum. There’s also a report about Wang Yi’s chat with Iranian Foreign Minister Hossein Amir Abdollahian. Xinhua reports:
Amir Abdollahian “reiterated Iran's support for the Global Development Initiative and the Global Security Initiative proposed by China.”
Wang said that “China highly values its relations with Iran and stands ready to work with the Iranian side to continue to firmly support each other on issues concerning their respective core interests and major concerns in the spirit of the comprehensive strategic partnership…Amir Abdollahian briefed Wang on latest progress in the negotiations on resuming the implementation of the Joint Comprehensive Plan of Action (JCPOA), saying that the bullying actions of the United States is the major obstacle to current negotiations. He added that the Iranian side will unswervingly safeguard its national interests, and is firmly committed to resolving differences through negotiations, so as to achieve an agreement at an early date. Amir Abdollahian also expressed gratitude to China for its constructive role on the Iranian nuclear issue. Wang said that China disapproves of any non-constructive measures that lead to the continuous escalation of the situation, and that all parties should continue to uphold the correct logic of right and wrong and work tirelessly to reach an agreement through diplomatic efforts. Wang said China opposes the politicization of affairs of the International Atomic Energy Agency (IAEA), and supports the IAEA and Iran to resolve outstanding issues through dialogue and cooperation. He said the U.S. side should earnestly realize its own responsibility and actively respond to Iran's reasonable demands, adding that the Chinese side will continue to uphold justice, support the negotiation process, and is willing to maintain close communication with the Iranian side.”
Page 4: First, on Thursday, Yuan Jiajun was elected the secretary of the Zhejiang Provincial Committee. In his remarks soon after this, while talking about his priorities, Yuan pledged loyalty to Xi. (Thanks to Bill Bishop for pointing this out on Twitter).
Be absolutely loyal, always maintain a sense of gratitude and feelings of affection and respect and have the determination to defend General Secretary Xi Jinping, and constantly improve your political judgement, understanding, and execution, in order to implement through action the orders of the General Secretary and the arrangements/deployments of the Central Committee, unswervingly be a loyal supporter of ‘Two Establishments’ and a leader in achieving the ‘two safeguards’. 要绝对忠诚，始终怀着对习近平总书记的感恩之心、爱戴之情、捍卫之志，不断提高政治判断力、政治领悟力、政治执行力，做到“总书记有号令、党中央有部署，浙江见行动”，坚定不移做“两个确立”忠诚拥护者、“两个维护”示范引领者；
Quick thought: Such comments and statements in the official work reports at provincial levels inform about the political mood across the Party. There’s a lot of praise and pledging loyalty to Xi. One can argue whether the support is a matter of genuine belief or simply political expediency. In other words, one can debate whether such comments are a product of fear, faith, or a desire for fruits. But what’s clear is that they tell us about the perceptions among provincial leaders of Xi’s authority along with his control over the coercive instruments of the Party-state apparatus and willingness to put them to use. Anyway, I am currently working on a project to document these reports/comments at the provincial level along with Dr. Sarah Gillette. We expect to publish a report in the next month. I’ll share the document in the tracker once it’s done. In the meantime, if there is something that you think we should take note of, please do drop me a line.
Second, a report based on a recent press conference discussing the evolution of China’s financial system over the past decade. Xinhua English also has the story. Some key points:
As of the end of 2021, the M2 -- a broad measure of money supply that covers cash in circulation and all deposits -- came in at 238.29 trillion yuan (about 35.5 trillion U.S. dollars), with the annual growth rate from 2012 to 2021 reaching 10.8 percent.
As of the end of the first quarter of this year, the outstanding inclusive loans topped 20 trillion yuan, supporting over 50 million small and micro firms and individual businesses.
High-risk shadow banking has been reduced by about 25 trillion yuan compared with the historical peak, while a total of 16 trillion yuan of non-performing assets have been disposed of in the past decade.
Foreign entities' holdings of domestic RMB financial assets have increased by 2.4 times compared with 10 years ago, while the share of Chinese yuan in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket has risen from 10.92 percent to 12.28 percent.
Foreign exchange reserves have remained above 3 trillion US dollars throughout the decade. This is an important ‘stabiliser’ and ‘ballast stone’ for maintaining national economic and financial security.
In the past ten years, the average annual growth rate of bank loans and bond investment was 13.1% and 14.7%, respectively, basically matching the nominal GDP growth rate.
The total assets of the Chinese banking industry stood at 344.7 trillion yuan ($51.37 trillion) at the end of 2021, up 158% from that at the end of 2012.
The total assets of the insurance industry reached 24.9 trillion yuan at the end of 2021, up 238% compared to that at the end of 2012.
The insurance penetration rate, or premiums as a share of GDP, rose from 2.98% to 3.93%, and the insurance density, or the per capita premium, increased from 1,144 yuan per capita to 3,179 yuan per capita. Since its establishment in 2012, the critical illness insurance system has covered 1.22 billion urban and rural residents, and the risk protection provided by agricultural insurance for farmers has increased from 0.9 trillion yuan in 2012 to 4.4 trillion yuan in 2021.
The average annual growth rate of inclusive small and micro enterprise loans and inclusive agriculture-related loans reached 25.5% and 14.9% respectively, much higher than the average growth rate of loans.
Next, there’s the second in the series of 仲音 commentaries on human rights. This one talks about the concept of putting people at the centre. It says that this has ensured that the Party focuses on “constantly solving the most immediate and practical problems that concern the people the most.”
Since the 18th Party Congress, the CPC Central Committee with Comrade Xi Jinping at its core has followed a people-centred development philosophy, taken the people’s aspiration for a better life as its goal, and incorporated the importance of the people into the practice of respecting and protecting human rights, thereby making historic achievements in the cause of human rights in China. The Party has put forward a new vision for development, emphasising that shared development is an essential requirement of socialism with Chinese characteristics; this calls to uphold the principle that development is for the people, by the people, and the fruits of development must be shared by the people. For comprehensively deepening reform, ‘the starting point and end goal must be to promote social equity and justice and improve people’s well-being.’ Take solid steps to promote common prosperity and make ‘tangible and substantive progress in promoting all-round human development and common prosperity for all’... 党的十八大以来，以习近平同志为核心的党中央坚持以人民为中心的发展思想，把人民对美好生活的向往作为奋斗目标，把“人民性”贯穿于尊重和保障人权的实践中，推动我国人权事业取得历史性成就。提出新发展理念，强调共享是中国特色社会主义的本质要求，“坚持发展为了人民、发展依靠人民、发展成果由人民共享”；全面深化改革，“必须以促进社会公平正义、增进人民福祉为出发点和落脚点”；扎实推动共同富裕，“切实推动人的全面发展、全体人民共同富裕取得更为明显的实质性进展”……
The piece also talks about participation through the system of whole-process democracy and that the Party “represents the fundamental interests of the overwhelming majority of the people, shares weal and woe with the people, has no special interests of its own, and never represents the interests of any interest group, any power bloc or any privileged class.” It links high-quality development with further development of human rights, calling for progress in building material, political, spiritual, social and ecological civilisation.
Page 10: Not summarising, but just to note that the page carries three articles on the development of the socialist rule of law since the 18th Party Congress. This is part of a series of such dedicated pages on breakthrough developments since the 18th Party Congress that were highlighted in the third history resolution passed at the 6th plenum.