Common Prosperity & Financial Risks - Protecting Critical Information Infrastructure - Xi Thought Series: Loyal, Clean and Responsible Cadres & Formalism and Bureaucracy - NDU on Defense Modernisation

Here are the stories and pieces from the August 18, 2021, edition of the People’s Daily that I found noteworthy.

Page 1: Xi Jinping has emerged after the Beidaihe break, and with a bit of a bang. Xi chaired the 10th meeting of the Central Committee for Financial and Economic Affairs on Tuesday. The focus of the meeting was on “​​common prosperity” and financial risks. Xi said that common prosperity is an essential requirement of socialism and a key feature of Chinese-style modernization. 

The report following the meeting tells us that the NDRC, Ministry of Finance, the Ministry of Human Resources and Social Security and the Central Agricultural Office presented reports on the theme of common prosperity. The People's Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, the NDRC and the Ministry of Finance spoke about resolving major financial risks and doing a good job with regard to stable financial development.

The report says that during the reform and opening up era, the Party learned that “poverty is not socialism.” It “broke the shackles of the traditional system, allowed some people and some regions to get rich first, and promoted the liberation and development of social productive forces.” Since the 18th CPC Congress, the Central Committee “put the gradual realization of common prosperity for all people in a more important position, and has taken effective measures to safeguard and improve people’s livelihood, win the tough battle against poverty, and build a well-off society in an all-round way, thereby creating favorable conditions for promoting common prosperity.” 会议指出,改革开放后,我们党深刻总结正反两方面历史经验,认识到贫穷不是社会主义,打破传统体制束缚,允许一部分人、一部分地区先富起来,推动解放和发展社会生产力。党的十八大以来,党中央把逐步实现全体人民共同富裕摆在更加重要的位置上,采取有力措施保障和改善民生,打赢脱贫攻坚战,全面建成小康社会,为促进共同富裕创造了良好条件。我们正在向第二个百年奋斗目标迈进,适应我国社会主要矛盾的变化,更好满足人民日益增长的美好生活需要,必须把促进全体人民共同富裕作为为人民谋幸福的着力点,不断夯实党长期执政基础.

It then explains that “common prosperity is the prosperity of all the people; it refers to the material and spiritual lives of the people, and not the affluence of a few. Nor is it a uniform egalitarianism. It is necessary to promote common prosperity by stages.” 会议强调,共同富裕是全体人民的富裕,是人民的物质生活和精神生活,不是少数人的富裕,也不是千篇一律的平均主义,要分阶段推进共同富裕.

It called for effort towards:

  • encouraging hard work and innovation to get rich, 

  • development to ensure and improve people’s livelihood, 

  • creating more inclusive and fair conditions for the people to improve their education level and enhance their development ability, 

  • enhancing smooth pathways for upward mobility, 

  • creating opportunities for more people to get rich, and 

  • creating a development environment in which everyone participates

It then talks adhering to the “basic economic system, based on the primary stage of socialism.” This entails sticking to the “two unwaverings,” i.e., unwavering support for the public and non-public sector. But in saying so, it also reiterates that public ownership should remain “the mainstay” of the economy. It then says something that I struggled to understand clearly, but what I thought it meant was this: The system must allow some people to get rich first and then focus on “encouraging those who work hard, operate legally and dare to start businesses.” 允许一部分人先富起来, 先富起来, 后富起来, 重点鼓励努力工作、合法经营、敢于创业的致富带头人. - So I guess this is a warning to the wealthy that the Party will be picking winners?

The meeting’s statement also talks about the need to “correctly handle the relationship between efficiency and equity.” Establish basic institutional arrangements for the coordination of initial distribution, redistribution and tertiary redistribution. 为初次分配、再分配和三次分配协调建立基本的制度安排. On tertiary redistribution, this thread is useful:

The next bit talks about goals of expanding the size middle-income group, increasing the incomes of the low-income group and rationally regulate high income groups to create an olive-shaped income distribution structure (橄榄形分布结构.)

The report then says that it is necessary to improve the balance, coordination and inclusiveness of development. This includes, among other things:

  • Uniform provision of public services

  • Increased investment in inclusive human capital

  • Improving the pension and medical security system

  • Improving the housing supply and security system

But what this means is not just supporting middle-income and lower-income groups. It also means this:

“It is necessary to strengthen the regulation of high income (高收入), protect legal income according to law, rationally regulate excessive income (超额收入), and encourage high-income people and enterprises to give more returns to society. It is necessary to clean up and regulate unreasonable income (不合理收入), rectify the order of income distribution and resolutely ban illegal income. It is necessary to protect property rights and intellectual property rights, protect legal wealth, and promote the standardized and healthy development of various types of capital.” 要加强对高收入的调控,依法保护合法收入,合理调节过度收入,鼓励高收入人群和企业给社会更多回报。要清理规范不合理收入,整顿收入分配秩序,坚决取缔非法收入. 要保护产权和知识产权,保护法律财富,促进各类资本规范健康发展.

Also, the report says that it is “necessary to strengthen the guidance of public opinion to promote common prosperity and create a good public opinion environment for promoting common prosperity.”

There’s then a positive assessment of the financial risk containment campaign. “Important achievements have been made in the battle to prevent and resolve major financial risks, maintaining the bottom line of avoiding systemic financial risks, and effectively safeguarding national economic and financial stability and the safety of people’s property.” 防范化解重大金融风险攻坚战取得重要阶段性成果,守住了不发生系统性金融风险的底线,有力维护了国家经济金融稳定和人民财产安全. 

Going ahead, “it is necessary to consolidate the foundation of financial stability, manage the relationship between steady growth and risk prevention, consolidate the momentum of economic recovery, resolve systemic financial risks with high-quality economic development, and prevent secondary financial risks in the process of dealing with risks in other fields.”要夯实金融稳定基础,处理好稳增长与防风险的关系,巩固经济复苏势头,以经济高质量发展化解系统性金融风险,在应对其他领域风险过程中防范次生金融风险.

To do this, it calls for coordinated action, use of technology, punishing financial corruption, preventing risks, accelerating reforms and effectively guiding public opinion in the financial market.

Next, we have a report (English version) about the NPC Standing Committee meeting starting on Tuesday. I am relying on the Xinhua English story to provide a quick summary of the bills discussed. But I’ll provide brief notes about two the data protection and land border bills. More details on all the bills is also available on Page 4.

The lawmakers reviewed draft laws on personal information protection, supervisors, legal aid, and physicians. They also reviewed a draft revision to the Military Service Law. In reports submitted to the session, the NPC Constitution and Law Committee said the five drafts are mature enough and suggested that they be passed at the session.

The NPC Constitution and Law Committee also submitted to the session draft laws on combating organized crime, on family education and on land border. The three drafts all returned to the legislature for a second reading. Also they deliberated for the first time draft revisions to the Law on Scientific and Technological Progress and the Law on the Prevention and Control of Environmental Noise Pollution, and draft amendments to the Seed Law and the Population and Family Planning Law. 

The session reviewed a draft decision of the NPC Standing Committee on the addition to the list of national laws in Annex III to the Basic Law of the Hong Kong Special Administrative Region, and a draft decision of the NPC Standing Committee on the addition to the list of national laws in Annex III to the Basic Law of the Macao Special Administrative Region.

On the new law related to the land borders, the meeting said that: “The second draft of the draft clearly stipulates that the level of border infrastructure construction should be improved, the provisions on publicity and education on land borders should be added, and the authority and procedures for concluding demarcation and demarcation treaties should be clearly defined.”

On data protection law, the PD report talks about regulations related to excessive collection of personal information, big data, illegal trading, and disclosure of personal information; it says that the current draft does a good job of linking the draft with the relevant provisions of the Civil Code to improve personal information, and outlines rule for cross-border flow of personal information. 草案三审稿进一步完善个人信息处理规则,对应用程序过度收集个人信息、大数据杀熟以及非法买卖、泄露个人信息等作出有针对性规范,做好与民法典有关规定的衔接,完善个人信息跨境提供的规则及保护投诉、举报机制等.

A good summary here on data protection provisions:

Next, Wang Huning spoke at the 27th National Conference on Party Building in Colleges and Universities. He talked about the goal of promoting “party building and ideological and political work in colleges and universities” with the aim of cultivating “socialist builders and successors.” There’s such an emphasis on morality here. Sun Chunlan, Chen Xi and Huang Kunming attended the meeting.

Next, we have a report (English report) that tells us that new regulations regarding protection of critical information infrastructure have been cleared and will come into effect from September 1. These regulations were cleared on April 27. Here’s how critical information infrastructure is defined:

“critical information infrastructure refers to important network infrastructure and information systems in public telecommunications, information services, energy sources, transportation and other critical industries and domains, in which any destruction or data leakage will have severe impact on national security, the nation’s welfare, the people’s living and public interests.”

Among these also, “safe operation of critical information infrastructure in energy sources and telecommunications should be safeguarded as a priority,” the report says.

Finally, a short report about Xi sending a message of condolence to his Algerian counterpart Abdelmadjid Tebboune over the deadly wildfires that erupted in the country last week.

Page 3: A couple of pieces today from the foreign ministry’s regular press conference. First, a comment (English version) on the ​​39th anniversary of the August 17 Communiqué between China and the US. Hua used the opportunity to say that the US is “breaching its own commitment.” 

“It has engaged in official exchanges with the Taiwan region, sold arms to Taiwan and helped it to expand the so-called international space. Let's take US arms sales to Taiwan as an example. Over the past 39 years, the total amount of arms sales to Taiwan by successive US administrations has hit as high as nearly $70 billion. The Trump administration alone has sold arms to Taiwan 11 times in four years, totaling $18.3 billion. Not long ago, the Biden administration announced its first arms sale deal to Taiwan, approving a $750 million weapons sale to Taiwan. In response to all the wrong moves on the US side, the Chinese side has made strong and resolute reactions to firmly safeguard its sovereignty and security interests. To solve the Taiwan question and realize the complete reunification of the motherland is the common aspiration of all the Chinese people. We are ready to make every effort with the utmost sincerity to strive for the prospect of peaceful reunification. At the same time, we reserve the option of taking all necessary measures in response to the interference of external forces and the very small number of ‘Taiwan independence’ separatists and their activities.”

Second, a moment for the foreign ministry to repeat Wang Yi’s talking points in his exchange with Blinken, in that it must end its “willful military intervention and belligerent policy, stop using democracy and human rights as an excuse to arbitrarily interfere in other countries’ internal affairs,” and that “a model copied from another country can hardly fit or stand in a country with distinctively different history, culture and national conditions.”

Here’s what Hua added:

“But to be honest, people have been shocked by the chaotic scenes at the Kabul airport on television and the internet since yesterday, especially the video clips capturing some unfortunately falling to their deaths after clinging to the landing gear of a US aircraft to evacuate. The US launched the Afghan War in the name of counterterrorism. But has the US won? After 20 years, the number of terrorist organizations in Afghanistan has grown to more than 20 from a single digit. Has the US brought peace to the Afghan people? For 20 years, more than 100,000 Afghan civilians have been killed or wounded in the gunfire of US troops and its ally forces, and more than 10 million people have been displaced. The Afghan War caused an average loss of $60 million on a daily basis, putting a drag on the socioeconomic development of Afghanistan. The US troops have also paid the price of more than 2,400 deaths and over two trillion dollars. I also noticed that President Biden said, the US mission in Afghanistan was never supposed to have been nation building. This is the truth. Wherever the US sets foot, be it Iraq, Syria or Afghanistan, we see turbulence, division, broken families, deaths and other scars in the mess it has left. The US power and role is destructive rather than constructive.”

The press briefing is also useful to get a quick gist of Chinese diplomacy around the Afghanistan issue. Hua talked about that, also mentioning “In recent days, Yue Xiaoyong, the Special Envoy of the Chinese government on the Afghan issue, who has “shuttled intensively between Afghanistan, Russia, Turkey, Uzbekistan, Tajikistan and Iran.”

She added:

“China encourages the Afghan Taliban to pursue a moderate and prudent religious policy, work with other parties to form an open and inclusive political structure, pursue a foreign policy of peace and friendship, and in particular, live in harmony with its neighboring countries and achieve reconstruction and development in Afghanistan. We also hope that the new Afghan regime will make a clean break with all kinds of international terrorist forces, restrain and combat terrorist forces including the ETIM, and prevent Afghanistan from becoming a gathering place of terrorist and extremist forces again.”

Third, a China-Arab States expo will be held in Yinchuan, Ningxia, from Thursday to Sunday. There’s a preview report on this. Fourth, we have a piece on China-Uzbekistan ties. An excerpt below on ties during the Xi era:

“China-Uzbekistan relations have developed rapidly, and the cooperation between the two countries in trade, investment, energy, transportation and other fields has yielded fruitful results. In 1992, China and Uzbekistan formally established diplomatic relations, and in 2012, the two countries established a strategic partnership. During President Xi Jinping's visit to Uzbekistan in 2016, the relationship between the two countries was upgraded to a comprehensive strategic partnership. In 2017, President Shavkat Mirziyoyev visited China for the first time, and together with President Xi Jinping identified priority areas for cooperation between the two sides. In 2018 and 2019, President Mirziyoyev came to China and confirmed with President Xi Jinping the starting point for further consolidating all-round bilateral cooperation. After the outbreak of the COVID-19 epidemic, the heads of state of the two countries had a phone conversation about pandemic cooperation. In recent years, China has maintained its position as Uzbekistan’s largest trading partner and the largest export market for Uzbekistan. China-Uzbekistan investment cooperation has maintained strong momentum, with more than 1,900 Chinese enterprises operating in Uzbekistan, distributed across chemicals, building materials and pharmaceutical production, agriculture, light industry and other fields. Local cooperation has become a new driving force for the development of China-Uzbekistan comprehensive strategic partnership. Since 2017, the leaders of 14 administrative entities in Uzbekistan have visited China and agreed on more than 150 cooperation projects, most of which have already started or are in preliminary preparatory stages.”

Page 5: We have the 23rd report on Xi Jinping Thought. I struggled with lots of terms and concepts in this one; but I think I’ve captured the key points here. The first question is about the need to train high-quality cadres who are loyal, clean and responsible. The answer begins with a bit about Jiao Yulu. The piece talks about the Party historically emphasising both skill and morality. It talks about the Party’s talent policy focusing on people both “being red and professional” - or “having both ability and political integrity, putting morality first while appointing people on their merits.”

Then since the 18th Party Congress, Xi has elaborated on the requirements from cadres of serving the people, diligence, pragmatism, the desire to take on challenges, honesty, self-discipline, particularly when it comes to use of power…“having a party in your heart, having people in your heart, having responsibilities in your heart,” having “iron beliefs” and virtue, etc. This bit ends with: 

“Emphasizing loyalty, cleanness and responsibility reflects the clear orientation of selecting and appointing people not only focusing on ability, but also paying more attention to political literacy and moral character (政治素养和道德品质), and embodies the inherent requirements of the party's organizational line in the new era.” 

What does loyalty imply?

“It is to be loyal to the party’s beliefs, loyal to the party organization, loyal to the party’s theory, line, principles and policies, earnestly enhance the ‘four consciousnesses’, strengthen the ‘four self-confidences’, and achieve ‘two maintenance’, and always maintain a high degree of consistency with the CPC Central Committee in terms of political positions, political directions, political principles and political path; we must respect power, manage power well, use power cautiously, be self-respectful and self-motivated, be cautious and cautiously guard one’s political life, maintain the political nature of resisting corruption and preventing corrosion...We must adhere to principles, perform our duties, be brave enough to take on our responsibilities, shine in the face of challenges, rise to difficulties in the face of contradictions, stand up in the face of crises, take responsibility in the face of mistakes, and fight resolutely in the face of bad styles.” 就是要对党的信仰忠诚,对党组织忠诚,对党的理论和路线方针政策忠诚,切实增强“四个意识”、坚定“四个自信”、做到“两个维护”,始终在政治立场、政治方向、政治原则、政治道路上同党中央保持高度一致;就是要敬畏权力、管好权力、慎用权力,做到自重自省自警自励、慎独慎微慎始慎终,守住自己的政治生命,保持拒腐蚀、永不沾的政治本色;就是要坚持原则、认真负责,面对大是大非敢于亮剑,面对矛盾敢于迎难而上,面对危机敢于挺身而出,面对失误敢于承担责任,面对歪风邪气敢于坚决斗争. 

Then there’s this bit:

At present, most leading cadres are politically reliable and have good styles. At the same time, it is undeniable that there are still some old problems rebounding and new problems constantly appearing in the construction of the cadre team. Some of the problems it talks about are:

  • people being “two-faced” (两面派) when discussing the central government’s policies;

  • People engaging in “small circles” or factionalism; 

  • something that I simply did not understand - so would be great to get some inputs from you folks - (有的热衷于搞“小圈子”“拜码头”“拿天线”); 

  • officials lacking entrepreneurial spirit or delaying/refusing to take decisions

  • officials disregarding Central Committee directives

Here’s the original paragraph: 强调领导干部要做到忠诚干净担当,具有很强的现实针对性。现在大多数领导干部政治上是可靠的,作风上也是好的,同时不可否认,干部队伍建设中依然存在一些老问题反弹回潮、新问题不断出现的情况。比如,有的党员干部妄议中央大政方针,当两面派、做两面人;有的热衷于搞“小圈子”、“拜码头”、“搭天线”;有的不顾党中央三令五申,依然不收敛、不收手;有的干事创业精气神不够,畏首畏尾不敢拍板定事,干工作推诿拖延;等等。这些问题严重破坏党的团结和集中统一,严重败坏干部队伍形象,严重影响党和人民事业发展。必须强化问题意识和问题导向,坚持从严教育、从严管理、从严监督,着力培养忠诚干净担当的高素质干部.

The next question today is about the need to oppose formalism and bureaucracy. The response begins with reference to a CCTV documentary (English report on the issue) talking about illegal villas built at the northern foot of the Qinling Mountains in northwest China’s Shaanxi Province. Xi’s first directives on these were issued in May 2014. In all, he issued six directives to get rid of these villas. But the leading cadres of the provincial and municipal party committees did not act as required; in fact, they “only said things but they did not act.” This is cited as an example of formalism and bureaucracy, “which has seriously hindered the implementation of the major decisions and deployments of the Party Central Committee.”

The piece says that although formalism and bureaucracy manifest in various forms, in essence it is about a deviation from the Party’s spirit, a loss of purpose in action. 虽然形式主义、官僚主义表现多样,形形色色,但究其实质都是从根子上背离了党性、丢掉了宗旨.

Then the response says that “formalism and bureaucracy kill people, and are the great enemy of our party and the great enemy of the people. This issue is related to the hearts and minds of the people, the survival of the party.” 形式主义、官僚主义害死人,是我们党的大敌、人民的大敌. 作风问题关系人心向背,关系党的生死存亡.

It leads to wastage of resources and delayed action; this in turn can alienate the masses, “just like an invisible wall separating the party from the people, just like a ruthless knife cutting off the flesh-and-blood ties between the party and the people.” 就像一道无形的墙把党和人民隔开,就像一把无情的刀切断了党和人民的血肉联系.

So what should be done?

To oppose formalism, the Party should focus on addressing the problem of unrealistic work, urge leading cadres to establish a correct view of political achievements, overcome impetuousness and abandon selfish and self-serving distractions. 反对形式主义要着重解决工作不实问题,督促领导干部树立正确政绩观,克服浮躁情绪,抛弃私心杂念.

To oppose bureaucracy, the Party should focus on addressing the problem of officials not doing what is in the interest of the masses; officials should focus on the fundamental and long-term interests of the broadest number of masses but also address the more immediate and direct needs of the people. 反对官僚主义要着重解决在人民利益上不维护、不作为问题,既注重维护最广大人民根本利益和长远利益,又切实解决群众最关心最直接最现实的利益问题.

The piece then goes on to caution that the problem of formalism and bureaucracy is a long-term issue. However, at present, the high pressure that has been maintained has led to the space for this “disease” being squeezed, but it’s a stubborn disease; and in some sense there has been a metamorphosis of sorts. Therefore, vigilance is required. 当前,在强有力的高压态势下,形式主义、官僚主义的生存空间被大大挤压,但顽疾尚未根除,在一些地方、一些领域、一些党员干部身上,形式主义、官僚主义走进“青纱帐”、穿上“隐形衣”, 改头换面, 有了新的表现.

Other Stories:

Page 9: The lead piece on the Theory page is by the NDU’s Xi Thought center. It talks about the need to accelerate the modernization of national defense and the military. It makes a couple of key points:

  • The need to act with urgency in defense modernisation

  • The aim of modernisation is to “provide strategic support for consolidating the Communist Party of China’s leadership and China's socialist system, defending national sovereignty, unity and territorial integrity, safeguarding China's overseas interests, providing strategic support for promoting world peace and development, and earnestly fulfil the mission and tasks of the new era entrusted by the Party and the people..”

  • The need to maintain political sobriety and strategic determination to accelerate national defense and military modernization. “The leadership of the Party is the fundamental guarantee for the people's army to maintain strong cohesion, centripetal force, creativity and combat effectiveness.”

  • We must unremittingly arm the entire army with Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era, further firmly establish the guiding position of Xi Jinping Thought on Strengthening the Army in national defense and army building, and unswervingly implement Xi Jinping Thought on Strengthening the Army in all areas of national defense and military modernization

  • Promote high-level science and technology self-reliance, accelerate key core technology research, accelerate the development of strategic, cutting-edge and disruptive technologies, and give full play to the strategic supporting role of scientific and technological innovation in our army's development. 推进高水平科技自立自强,加快关键核心技术攻关,加快战略性、前沿性、颠覆性技术发展,发挥科技创新对我军建设战略支撑作用.

  • Deepen the transformation of military training, build a new military training system, and deepen actual combat training, joint combat training, scientific and technological strengthening training, and training according to law.

The other two pieces are by the political commissar of the NUDT, who talks about maintaining Party control over the army, and by Tian Yiwei from Academy of Military Sciences.

Page 10: We have a short report on the new antitrust rules by SAMR, which are now open for public consultation till September 15. CNN’s report explains what the rules talk about:

“The rules announced Tuesday would forbid business operators from faking statistics or information about their product orders, sales and user reviews to mislead customers. They would also be banned from fabricating consumer views to hurt the reputations of their rivals. Other practices targeted include using data, algorithms or other means to redirect web traffic from their rivals or create obstacles that would prevent customers from installing or running rival services. SAMR said the rules are intended to stamp out "unfair competition." The regulator also proposed banning a practice known as "choosing one from two," in which companies make exclusive agreements with merchants that prevent them from selling on rival e-commerce platforms. SAMR investigated Alibaba (BABA) over such issues earlier this year, eventually slapping the company with a record $2.8 billion penalty.”

Page 11: More folks taken down; so yesterday’s four reports and three today tell us that action has moved ahead against these “seven tigers.” Check out my Eye on China from April 18, which had covered these cases.