Culture of Integrity - Financial Units Inspection Finds 'Many Outstanding Problems' - Gov't Expects 'Robust Rigid Housing Demand' - MoFA on Ukraine Crisis - Wang-Lavrov Call - MCC & Nepal
Hi folks,
Before we get to the People’s Daily today, I am sharing herewith a new note that my colleague Megha Pardhi and I have rustled together, offering a brief Analysis of Chinese Perceptions and Interests amid the Ukraine Conflict. You can download the PDF below.
Here are the stories and pieces that I found noteworthy from the Friday, February 25, 2022, edition of the People’s Daily.
Page 1: There’s no mention of any turmoil anywhere in the world on the front page of the People’s Daily. The lead story on the page is about Xi Jinping’s reply to a letter from Chinese snowboarder Su Yiming, who won a gold and silver at the Beijing Winter Games. Both the letters are reproduced in PD. Xinhua reports:
“In the letter, Xi extended congratulations to Su and other athletes in ice and snow sports for their outstanding performance at the Beijing Winter Olympics and put forward expectations for them. Su said in his letter that he was born in a great country and raised in the best times, and he felt very lucky to have realized his dream through hard work. Xi said that the new era is the era of dream chasers, and also the era for young people to realize their dreams. Xi expressed in the letter his hope for young Chinese to keep the motherland at heart, aim high, and have their feet firmly on the ground. In his letter to Xi, Su expressed his resolve to continue working hard and serving the motherland.”
Next, there’s a report about the new guidelines on the construction of a culture of integrity in the new era. This talks about opposing corruption and building a clean political culture being “a major political task that the Party’s self-revolution must grasp for a long time.” It says that in order to ensure the comprehensive and strict governance of the Party it is important not only to address symptoms but also root causes. The latter partly refers to “righteous self-cultivation.” So how does one get there?
Well first, be guided by Xi Jinping Thought of socialism with Chinese characteristics for a new era. Adhere to the 4-4-2 formulation. Do not forget the original mission. Ensure alignment with ideological direction of party building and institutional party management, adhere to the combination of governing the country by law and morality, and strengthen the foundation with ideals and beliefs.
The guidelines “pointed out that it is necessary to consolidate the ideological foundation of honesty and integrity, strengthen theoretical armed forces, and strengthen political determination to fight corruption; Strengthen faith and confidence, and build an ideological defensive line against corruption and change; actively develop healthy inner-party political culture and lead the construction of clean and honest culture. It is necessary to cultivate the cultural foundation of honesty and public service, temper with revolutionary culture the noble character of being selfless and desire to contribute to public service, cultivate with advanced socialist culture a cultural soil of integrity and impartial exercise of power, and cultivate with fine traditional Chinese culture a spiritual realm of self-denial and devotion to public affairs.” 《意见》指出，要夯实清正廉洁思想根基，强化理论武装，增强政治定力抵腐定力；坚定信仰信念信心，筑牢拒腐防变思想防线；发展积极健康党内政治文化，引领廉洁文化建设。要厚植廉洁奉公文化基础，用革命文化淬炼公而忘私、甘于奉献的高尚品格，用社会主义先进文化培育为政清廉、秉公用权的文化土壤，用中华优秀传统文化涵养克己奉公、清廉自守的精神境界.
Third, there’s a report about the Central Leading Group for Inspection Work providing feedback to financial institutions after the latest round of inspections. This round had targeted the Party committees of 25 financial institutions, including banks, stock exchanges, regulatory commissions, insurance companies, asset-management companies and other financial enterprises.
Lingling Wei’s report in WSJ on this round in October last year had informed that:
“graft-busters from the Central Commission for Discipline Inspection are fanning out through the offices of the 25 state institutions, reviewing files of their lending, investment and regulatory records and demanding answers to how certain deals or decisions related to the private firms were made, according to the people familiar with the plan. These people said individuals who are suspected of having engaged in inappropriate dealings are likely to be formally investigated by the Communist Party and potentially charged later, while any entities found to have gone astray would be disciplined. The leadership will also use findings from the inspections to decide whether to slash the compensation of the executives at these state financial juggernauts. Some officials at the Ministry of Finance, which funds big state financial institutions, have been pushing for the cut as compensation in the financial sector is seen as too high compared with that of other industries. At a Sept. 26 meeting aimed at mobilizing the troops ahead of the new inspections, Zhao Leji, current head of Mr. Xi’s anticorruption body, said the inspectors in charge of examining the 25 institutions will “thoroughly search for any political deviations,” according to the official Xinhua News Agency.”
Today’s PD report says that Yang Xiaodu and Chen Xi were at the meeting that discussed the feedback report.
It says that
“From February 22 to 24, 15 central inspection teams gave ‘one-on-one’ feedback to the 25 financial institutions. The central inspection teams informed the main leaders of the inspected party organizations of the important problems found during the inspection, and provided feedback on the inspection to the leading group. The feedback pointed out that the CPC Central Committee with Comrade Xi Jinping as the core attaches great importance to financial work, resolutely deepens financial reform, insists that finance should serve the real economy, severely punishes financial corruption, effectively prevents and defuses major financial risks, and has achieved new results in the development of China’s financial industry.
The feedback pointed out that there are still many outstanding problems in the party committees (leading groups) of financial institutions in implementing the overall leadership of the Party, strengthening Party building and promoting the comprehensive and strict administration. Some are weak in political development, and do not fully study and implement the spirit of the CPC Central Committee. Some are not precise in their functions, and there is a gap in the implementation of the CPC Central Committee's major policies based on actual conditions and responsibilities. Some are not sufficiently aware of preventing and defusing financial risks, and their mechanisms for identifying, warning and handling financial risks are not sound enough. Some financial reform plans lack political responsibility, and some reform tasks are not fully implemented. There are gaps in the implementation of the strategic deployment of comprehensive and strict governance of the party, and the implementation of the "two responsibilities" is not in place. Some units ‘rely on finance to eat finance’ (靠金融吃金融). The risks of integrity in important positions, key areas and key links are relatively prominent, and they violate the eight-point central regulations. There are many reports of spiritual problems; formalism, bureaucracy and extravagance are still prominent; there are gaps in the implementation of the Party’s organisational line in the new era, and there are weak links in the development of leading groups, cadres and grassroots party organisations.” – I am assuming 靠金融吃金融 refers to financialisation and focussing on making money without serving the real economy, but I am not certain what sort of activities that would cover. Any thoughts?
Anyway, the next paragraph calls for:
The need to continue to learn, understand and practice Xi Jinping Thought on socialism with Chinese characteristics in the new era, especially General Secretary Xi Jinping’s important exposition on financial work.
Enhancing the feeling of financial service to the country, fully, accurately and comprehensively implementing the new development concept.
Enhancing the awareness of risk prevention, firmly establishing the bottom line thinking, comprehensively sorting out and investigating potential risks in combination with the problems found in inspections…”
Strengthening the political responsibility of financial reform, further promoting the reform of system and mechanism, and continuously improving the modernization level of financial governance system and governance capacity.”
Strengthening the supervision of ‘top leaders’ and leading groups, seriously investigating and dealing with corruption and violations of the eight-point central regulations.
The article then warns that “it is necessary to make comprehensive use of inspection results, focus on special rectification of typical common problems found during the inspections, strengthen top-level research on deep-seated problems, promote the improvement of system and mechanism, and deepen the treatment of both symptoms and root causes.” 要综合用好巡视成果，对巡视发现的典型共性问题集中开展专项整治，对深层次问题加强顶层研究，推动完善体制机制，深化标本兼治.
Here’s a related Bloomberg story on all of this. It adds that:
“In a separate statement on the People’s Bank of China, CCDI official Gao Fei highlighted the fact that the central bank hasn’t done enough work to implement Xi’s objectives on financial work. The PBOC’s guidance to financial institutions fell short of expectations, and it still needs to do more to address private and small businesses’ financing problems, according to the statement. The anti-graft body criticized the CBIRC, the banking regulator, for the lack of precision and coordination of its policies and frequent corruption cases among officials. It urged the CBIRC to strengthen its supervision of capital and prevent its “wild growth.” It said the regulator should learn lessons from major corruption cases, like those of Lai Xiaomin, Huarong’s former chairman, Yang Jiacai, a former assistant chairman at the banking watchdog, and Cai Esheng, a former vice chairman of the banking regulator. China’s big four national bad-loan managers, including Huarong, were criticized for their lack of focus on their main business and risk controls. The firms said they would strengthen disposal of non-performing assets, step up anti-corruption work and draw lessons from the Lai case. State-owned banks including Industrial & Commercial Bank of China Ltd. were found to have lax governance and the risk of corruption in key areas like loans, the inspection team said. The lenders also failed to provide enough support to serve the real economy and lacked financial risk prevention and control. They were ordered to beef up internal controls and educate employees on corruption cases in the financial sector to root out graft.”
Finally, there’s a report (English report) on the page with Han Zheng chairing the conference of the leading group for promoting the BRI.
Xinhua reports that the meeting mapped out the priorities for BRI this year. Han said that “the work should stick to the basics of maintaining stability while pursuing progress and comprehensively implement the new development concepts…BRI should continue to feature extensive consultation, joint contribution, and shared benefits and aim for high-standard, sustainable, and people-centered progress. More energy should go into projects concerning people's livelihood to improve people's sense of gain in participating countries…Han called for greater alignment of the BRI and China's major strategies and coordinated development, which will offer more support for the country's dual circulation development paradigm, where domestic and overseas markets reinforce each other. Also emphasising risk prevention and control, Han urged efforts to strengthen risk monitoring and prediction of major projects of the BRI.” — Quick thought: The belt it seems will continue to be tightened. Also, I think it’s worth noting the language about “greater alignment.” It reflects the fact that there exists a fair amount of misalignment.
PD informs that Yang Jiechi, Hu Chunhua, Wang Yi, Xiao Jie, and He Lifeng among others were at the meeting.
Page 2: Zhao Leji’s full report at the sixth plenary meeting of the 19th CCDI is published on the page.
Page 3: A couple of reports worth noting. First, there is a report on the Wang Yi-Sergei Lavrov call. Xinhua English has the readout:
“Lavrov briefed Wang on the evolution of the situation in Ukraine and Russia’s position, saying that the United States and the North Atlantic Treaty Organization (NATO) have broken their commitments, continuously expanded eastward, refused to implement the new Minsk agreement and violated the United Nations Security Council Resolution 2202. Russia was forced to take necessary measures to safeguard its own rights and interests, Lavrov added. Noting that China has always respected the sovereignty and territorial integrity of all countries, Wang said that China recognizes the complex and special historical context of the Ukraine issue and understands Russia's legitimate security concerns. China maintains that the Cold War mentality should be completely abandoned and a balanced, effective and sustainable European security mechanism should be finally established through dialogue and negotiation, Wang said.”
Then there’s Hua Chunying’s comments from yesterday’s press briefing, which have been published in the paper. All of the questions on the issue from yesterday are covered in the PD report. So we have the following:
Bloomberg: Can you say then China considers Russia’s action an invasion? Is it an invasion? Is it a violation of the UN Charter?
Hua Chunying: We have stated China’s principled position on the Ukraine issue. There is a complex historical background and context on this issue. The current situation is the result of the interplay of various factors. We noted that today Russia announced its launch of a special military operation in eastern Ukraine. Russia’s defense ministry said that its armed forces will not conduct missile, air or artillery strikes on cities. China is closely monitoring the latest developments and calls on all sides to exercise restraint and prevent the situation from getting out of control. I would like to stress once again China’s consistent position. We should pursue common, cooperative and sustainable security for all countries. The legitimate security concerns of all sides should be respected and resolved. We hope all sides will keep the door to peace open and continue to work for deescalation through dialogue, consultation and negotiation and prevent further escalation. — Quick thought: That framing of a limited operation is clearly out of the window. It’s going to be tough for Beijing to keep this up.
The response to the question by CCTV asking about Ned Price’s comment that China should respect the principle of state sovereignty and territorial integrity and that China has an obligation to urge Russia to “back down” is really interesting.
“First, when it comes to respect for state sovereignty and territorial integrity, I’m afraid the US is in no position to tell China off. The Chinese people have deep understanding and strong feelings about state sovereignty and territorial integrity through first-hand experience. Recent history saw China invaded by the Eight-Power Allied Forces and other colonialist powers, which left behind indelible poignant memories of national humiliation. Just a little more than 20 years ago, the Chinese embassy in the Federal Republic of Yugoslavia was hit by NATO bombing, which killed three Chinese journalists and injured many more. NATO still owes the Chinese people a debt of blood. Even today, China still faces a realistic threat from the US flanked by its several allies as they wantonly and grossly meddle in China’s domestic affairs and undermine China’s sovereignty and security on issues including Xinjiang, Hong Kong and Taiwan. China remains the only permanent member of the Security Council that has yet to realize complete national reunification. It is because of all these that China consistently and firmly uphold the purposes and principles of the UN Charter and basic norms governing international relations, firmly safeguard its sovereignty, security and territorial integrity, and firmly defend international equity and justice.”
“The US side suggests that Russia acted with complicit support from China. I don’t believe Russia would be too pleased to hear that. Russia is a permanent member of the UN Security Council and an independent major power. It is fully capable of formulating and implementing its diplomatic strategy independently based on its judgement and national interests. I must also stress that China-Russia relations are based on the foundation of non-alliance, non-confrontation and non-targeting of any third party. This differs fundamentally and essentially from the practice of the US, which is, ganging up to form small cliques and pursuing bloc politics to create confrontation and division based on ideology. China has no interest in the friend-or-foe dichotomous Cold War thinking and the patchwork of so-called allies and small cliques and has no intention to follow such a path…”
Finally, this question:
TV News: Despite the scenes that we have seen from Ukraine this morning, you seem to suggest that peace is still possible. Does President Xi plan to phone his close friend President Putin and appeal for some calm and potential diplomatic solution?
Hua Chunying: The door to peace should never be shut casually. Even with the latest developments in Ukraine, we still call on all sides concerned to exercise restraint and take constructive steps to ease the situation as soon as possible and prevent the situation from getting out of control. China consistently holds that all sides should respect and take seriously each other’s legitimate security concerns and strive to resolve regional hotspot issues peacefully through negotiation and consultation. Yesterday I shared the efforts made by China to promote a peaceful settlement of the Ukraine issue. President Xi Jinping, during a phone call with French President Macron, called on all sides to adhere to the direction of political resolution, assume their responsibility and work for peace. State Councilor and Foreign Minister Wang Yi also stressed the importance of this.
Moving away from Ukraine, there’s a brief report on the page about ILD chief Song Tao speaking to CPN-UML chair and former Nepal prime minister KP Sharma Oli on Wednesday. PD says that they discussed “the implementation of the consensus reached by the leaders of the two countries, deepening political mutual trust between the two parties, and exchanged views on promoting cooperation between China and Nepal in various fields.” But this comes amid tensions in Nepal over the Millennium Challenge Corporation (MCC) agreement with the US, which is currently in Parliament with a deadline for it to be cleared by February 28.
On Wednesday, the Chinese foreign ministry had commented on the situation.
Hua Chunying had said: “I noticed that a US State Department spokesperson said earlier that Nepal’s failure to ratify the MCC compact will affect bilateral ties. The US Embassy in Nepal described the $500 million MCC grant as “a gift from the American people to Nepalis”. I wonder, since when does a gift come with the package of an ultimatum? How can anyone accept such a “gift”? Is it a “gift” or Pandora’s box? I’m afraid it will turn out like a Nepalese saying: It looks good, but you will find the meat difficult to chew. It is China’s consistent belief that in pursuing international development cooperation, the principle of mutual respect and equality should be upheld, the sovereignty of the country concerned and the will of its people should be fully respected, and there should be no interference in any country’s domestic affairs, no political strings attached, no coercive diplomacy, and certainly no infringement on other countries’ sovereignty and interests for selfish gains. As Nepal’s friendly close neighbor and development partner, China will continue to support the Nepalese people in choosing independently their own development path and offer support and assistance to Nepal’s socioeconomic development to the best of its capability.”
Page 7: There’s a report (less detailed English report) covering the State Council Information Office’s press conference discussing the high-quality development of the housing sector and urban and rural construction. Some of the key points from the presser are:
The government plans to ramp up the supply of government-subsidized rental housing, including the provision of 2.4 million housing units this year, and will renovate over 1.2 million homes in run-down areas.
The broad work focus according to Wang Menghui, Minister of Housing and Urban-Rural Development, will be “increasing confidence, preventing risks, stabilising growth, promoting reform and strengthening teams."
Wang added that the government will also focus on strengthening the regulation and control of the real estate market, promoting the supply side structural reform of the housing sector, implementing urban renewal action, implementing the rural construction action, implementing tasks related to carbon peaking and neutrality, and promoting the transformation and upgrading of the construction industry, so as to promote the high-quality development.
Talking about activities in 2021, Wang said that 40 key cities have developed 942,000 affordable rental housing units, construction has begun on 492,000 dilapidated houses and earthquake-resistant houses for rural low-income groups, and 770,000 potential workplace safety hazards in urban and rural development were investigated and remedied.
Vice Minister Ni Hong said: “Beijing, Shanghai, Guangzhou, Shenzhen and other key cities have all increased the proportion of newly-added affordable rental housing, generally accounting for 40% to 45% of the newly-added housing supply.”
Official data shows that the number of permanent urban residents in China had risen to 64.72 percent of its population by the end of 2021. Wang said that with this number expected to continue to increase, there will remain “robust rigid demand for housing.”
Wang said that existing city-dwellers also wish to improve their living environment and conditions, while residential communities built before 2000 are failing to satisfy the desire for bigger and better houses.
Ni Hong also said that “In 2021, a long-term mechanism was implemented to stabilize land prices, housing prices and expectations, and the overall market situation was stable.” He added that:
First, last year, the sales area of commercial housing reached 1.565 billion square meters, a new high in recent years, up 1.1% year on year.
Second, the increase in housing prices has slowed down. Last year, in 70 large and medium-sized cities, the sales prices of new and second-hand homes rose by 2% and 1%, respectively, 1.7 and 1.1 percentage points lower than that of 2020.
Third, investment in real estate development has maintained positive growth.
房地产市场稳定发展和运行是社会普遍关心的话题。“2021年围绕着稳地价、稳房价、稳预期，稳妥实施了房地产长效机制，市场情况总体是平稳的。”倪虹介绍，一是住房成交量保持正增长。去年全年商品住宅销售面积达到15.65亿平方米，为近几年来的新高，同比增长1.1%；二是房价涨幅有所回落。去年70个大中城市，一手房和二手房销售价格分别上涨2%和1%，涨幅比2020年回落1.7和1.1个百分点；三是房地产开发投资保持了正增长；四是去化周期仍处在合理区间.
He also promised continuity in terms of regulation. In addition, the report says that last year, “the total output value of China’s construction industry reached 29.3 trillion yuan, up 11% year-on-year, providing more than 50 million jobs.”
Other Stories:
On the international page, it’s incredible that there is no reporting of the invasion of Ukraine but the lead story is a piece on the six decades of the US embargo on Cuba. The embargo was decreed by US president John F. Kennedy on February 3, 1962. There was an official statement by the Cuban government talking about the implications of the embargo a few weeks ago.
On the theory page, the lead piece is by Wang Xiankui, the Vice Chairman of the Agriculture and Rural Affairs Committee of the NPC. The piece talks about the importance of maintaining food security.