Emphasising Control Over Flood Situation - H1 Infrastructure Investment - Wang-Borrell Chat - Commentary on BWC Working Group Meeting
Here are the key reports and articles that I found noteworthy from the People’s Daily's edition on Monday, August 7, 2023.
Page 1: The flooding in northern China has finally gotten front page attention starting from Saturday. As is the case today, over the weekend, a picture featuring flood rescue work has been published on the page. The messaging is again very clear, i.e., that the leadership with Xi Jinping as the core has provided “strong and effective directions” in responding to flood control and disaster relief requirements. 以习近平同志为核心的党中央坚强有力指挥北京防汛抗洪救灾.
Sharing below a collage of the front pages and Page 4 today, which had pictures of flood-related news. All of it, as you can see, is around the state’s response. In that sense, the images touch on the challenges but emphasise that the Party-state is in control and leading on the frontlines.
The lead article on Sunday discussed this in the context of Beijing. The one today also makes this point, specifically discussing the situation in Zhuozhou City in Hebei. I am sharing below an excerpt to offer a glimpse into the narrative-setting effort:
“On July 28, Typhoon Doksuri made landfall along the coast of Fujian Province. Unlike other typhoons that gradually weaken after making landfall, Doksuri continued its ‘long and difficult journey,’ with its precipitation cloud clusters gradually moving northward, directly approaching the Beijing-Tianjin-Hebei region. ‘This typhoon should not be underestimated.’ General Secretary Xi Jinping, who closely monitored the dynamics of the storm, immediately issued important instructions, emphasizing the need to pay special attention to the defence in the Beijing-Tianjin-Hebei region. The latest forecast from the China Meteorological Administration indicated the ‘formidable power’ of Doksuri. The predictions said that from July 29 to August 1, heavy rain would lash parts of Beijing, Tianjin, Hebei, the western parts of Shandong, the northern parts of Henan, and the eastern parts of Shanxi. There will also be heavy to extremely heavy rainfall in the western and southern parts of Beijing, the central and southern parts of Hebei, and other areas. Meteorological experts particularly emphasize that this round of heavy rainfall is highly extreme and poses a high risk of disaster. People are supreme, and life is supreme. The safety of the lives and property of the people is of utmost importance in the mind of General Secretary Xi Jinping.
Prior to this, as the country was about to enter the critical period of flood control, General Secretary Xi Jinping issued important instructions on flood control and disaster relief work, requiring the State Flood Control and Drought Relief Headquarters, the Ministry of Emergency Management, the Ministry of Water Resources and other relevant departments to strengthen overall coordination and strengthen consultation, enhance consultations and assessments, ensure effective monitoring and early warnings, provide precise guidance for disaster prevention work in key areas, such as flood control in small and medium-sized rivers, incidents involving small and medium-sized reservoirs, and urban waterlogging, and make every effort in emergency response and disaster relief. Under the strong leadership of the Party Central Committee and the State Council, a series of emergency responses were launched
At 12 o'clock on the 28th, the Ministry of Water Resources launched a three-level emergency response to flood prevention for Beijing, Tianjin, Hebei, Henan, Shandong, and Shanxi provinces and cities.
On the 29th, the China Meteorological Administration launched a first-level emergency response to major meteorological disasters.
On the 30th, the State Flood Control and Drought Relief Headquarters launched a second-level emergency response for flood control in Beijing, Tianjin, Hebei, Shanxi, Henan and other provinces.”
Then, torrential rains swept through…
28日，今年第5号台风“杜苏芮”在福建沿海登陆。与其他登陆后逐步减弱的台风不同，“杜苏芮”继续“长途跋涉”，降水云团逐渐向北移动，直逼京津冀。“这个台风，不可小视。”高度关注台风动态的习近平总书记立即作出重要指示强调，京津冀地区要特别注意防御。来自中央气象台的最新预报，预示着“杜苏芮”的强大“威力”——7月29日至8月1日，北京、天津、河北、山东西部、河南北部、山西东部部分地区将有大暴雨，北京西部山前和南部、河北中南部等地局地有特大暴雨。气象专家特别提醒，本轮强降雨极端性强，致灾风险高。人民至上，生命至上。人民群众生命财产安全在习近平总书记心中重若千钧。此前，在全国即将进入“七下八上”防汛关键期，习近平总书记即对防汛救灾工作作出重要指示，要求国家防总、应急管理部、水利部等有关部门要加强统筹协调，强化会商研判，做好监测预警，精准指导重点地区做好中小河流洪水、中小水库出险和城市内涝等灾害防范工作，全力抢险救灾。在党中央、国务院坚强领导下，一系列应急响应随即启动：——28日12时，水利部针对北京、天津、河北、河南、山东、山西六省市启动洪水防御三级应急响应。——29日，中国气象局启动重大气象灾害（暴雨）一级应急响应。——30日，国家防总针对北京、天津、河北、山西、河南等省份启动防汛二级应急响应. 暴雨席卷而来...
Another article on the page talks about how different regions and departments are “earnestly implementing the spirit of General Secretary Xi Jinping's important instructions” on flood control and disaster relief. “They are maintaining a vigilant working state, implementing various flood control and disaster relief measures, doing a good job in patrol duty and emergency response, carrying out timely rainfall monitoring and forecasting, scientifically implementing flood control operation with regard to water projects, mobilising all forces, and going all out to carry out flood control and flood relief work. Party members and officials at all levels are fearlessly facing difficulties and leading the way, racing against time for emergency rescue efforts, and ensuring the safety of people's lives and property as well as social stability, ensuring that the Party flag flies high on the frontline of flood control and disaster relief work.” 各地区和有关部门认真贯彻落实习近平总书记重要指示精神，高度重视、压实责任，保持时时放心不下的工作状态，落实各项防汛救灾措施，做好巡查值守和应急响应，及时开展雨水情监测预报，科学实施水工程防洪调度，充分发动各方力量，全力以赴开展防汛抗洪救灾工作。广大党员干部不怕困难、冲锋在前，争分夺秒抢险救援，全力保障人民群众生命财产安全和社会大局稳定，让党旗在防汛抗洪救灾一线高高飘扬.
The piece then talks about specific actions taken by different departments. There are data points and anecdotes if you are interested. For instance:
On August 6, the Ministry of Finance and the Ministry of Emergency Management earmarked an additional 350 million yuan ($50 million) to assist flood-hit regions of Beijing, Tianjin, Hebei, and also provinces in northeast China. So far, the central government has allocated 520 million yuan in central natural disaster relief funds to the above-mentioned regions, according to the Ministry of Finance and the Ministry of Emergency Management.
SASAC has mobilized central enterprises to support emergency rescue and relief efforts in flood-affected areas, including Beijing, Tianjin, and Hebei; Central enterprises in key areas such as electricity, telecommunications and construction have invested a total of 85,000 man-hours and 26,000 sets of equipment and vehicles to participate in and complete various tasks such as river bank reinforcement, clearing roads, facilitating the relocation and settlement of the affected population, repairing and restoring power and communication facilities, and providing emergency support. 国务院国资委动员中央企业支援京津冀等受灾地区抢险救灾工作。电力、通信、建筑施工等重点领域中央企业已累计投入8.5万人次、2.6万台次设备车辆，参与和完成河堤加固、道路抢通、群众转移安置及电力通信设施抢修恢复和应急保障等各项任务.
After a major flood hit the Jilin section of the Lalin River, the 78th Group Army of the PLA’s Northern Theater Command mobilized 1,000 personnel; the Jilin Provincial Armed Police Force urgently dispatched 400 soldiers to rush to locations like Yushu in Changchun and Shulan in Jilin to search for and evacuate the affected population.
SAMR has said that it will strengthen law enforcement inspections and investigate and deal with various price violations.
As of 10:00 AM on August 6th, insurance institutions in disaster-stricken regions such as Beijing, Hebei, and Heilongjiang have received 189,100 insurance claims. Currently, 50,600 claims have been settled, with a payout amount of 264 million yuan. Among these, there are 116,200 motor insurance claims, accounting for 61% of the total reported claims; 7,081 corporate property insurance claims, and 24,100 agricultural insurance claims. 截至8月6日10时，北京、河北、黑龙江等受灾地区的保险机构收到保险报案18.91万件，目前已赔付案件5.06万件，赔付金额2.64亿元。其中车险报案11.62万件，占全部报案件数的61%；企财险报案7081件，农业保险报案2.41万件.
Next, there’s a report on infrastructure investment expansion in H1, and government’s financial support. It says that:
“In the first half of this year, the total national fixed asset investment (excluding rural households) reached 24.3113 trillion yuan, marking a year-on-year growth of 3.8%. Among these figures, investment in infrastructure and manufacturing increased by 7.2% and 6%, respectively. The investment structure is continuously being optimised, with continued strengthening of investment in key sectors. 今年上半年，全国固定资产投资（不含农户）243113亿元，同比增长3.8%。其中，基础设施投资、制造业投资分别增长7.2%和6%。投资结构不断优化，重点领域投资继续加强.
In the first half of the year, 17,600 new water conservancy infrastructure projects were started in the country, the highest number ever during a period of six months. 上半年，我国新开工水利基础设施建设项目1.76万个，新开工重大水利工程为历史同期最多.
Investment in railway transportation and water conservancy management increased by 20.5% and 9.6%, respectively, which provided strong support for expanding domestic demand, stabilizing growth and ensuring people's livelihood. 铁路运输业、水利管理业投资分别增长20.5%和9.6%，为扩内需、稳增长、保民生提供了有力支撑.
In H1, investment in new infrastructure construction increased by 16.2% year-on-year, of which investment in new information infrastructure construction, such as 5G stations and data centers, increased by 13.1%, while investments in integrated new-type infrastructure construction, such as industrial internet and smart transportation, surged by 34.1%. 上半年，新型基础设施建设投资同比增长16.2%，其中5G、数据中心等信息类新型基础设施建设投资增长13.1%，工业互联网、智慧交通等融合类新型基础设施建设投资增长34.1%.
In the first half of the year, 42,600 urban old residential communities across the country were renovated…During the first half of the year, various regions issued special bonds for project construction totaling 2.1721 trillion yuan, supporting a multitude of projects aimed at improving people's livelihoods, addressing shortcomings, and strengthening weak areas at the local level.
In H1, investment in high-tech industries increased by 12.5% year-on-year, significantly faster than the growth of total investment. Investment in electronic and communication equipment manufacturing and e-commerce services increased by 14.2% and 22.2%, respectively, and investment in clean power increased by 40.5%.
In H1, investment in professional technical services and scientific and technological achievements transformation services increased by 51.6% and 46.3%, respectively. 上半年，专业技术服务、科技成果转化服务投资同比分别增长51.6%和46.3%.
Government funds are playing a leverage role in strengthening cooperation with social capital, policy-oriented development financial instruments are leveraging private capital to participate in major projects, and real estate investment trusts (REITs) in the field of infrastructure are revitalising private investment projects….Government investment and policy incentives will further play a guiding role in effectively stimulating private investment. As of the first half of this year, more than 50,000 projects have been introduced since 2022, of which more than 9,000 have attracted private capital, involving 2.9 trillion yuan of private investment. 政府基金发挥杠杆作用与社会资本加强合作对接，政策性开发性金融工具撬动民间资本参与重大工程，基础设施领域不动产投资信托基金（REITs）盘活民间投资项目……政府投资和政策激励进一步发挥引导作用，有效带动激发民间投资。截至今年上半年，各地自2022年以来共推介项目5万余个，其中9000余个已吸引到民间资本参与，涉及民间投资金额2.9万亿元.
Since the beginning of this year, the PBOC has continued to make full use of the supporting tools of inclusive micro-credit loans. It has provided a cumulative total of 39.8 billion yuan in funds to local financial institutions, supporting the increase of inclusive small and micro loans by 2.2 trillion yuan. 今年以来，中国人民银行继续用足用好普惠小微贷款支持工具，已经累计向地方法人金融机构提供资金398亿元，支持增加普惠小微贷款2.2万亿元.
Finally, there’s a report informing that in H1, China’s was 3.135.84 trillion yuan, a year-on-year increase of 8.5%, of which exports were 1.323.22 trillion yuan and imports were 1.812.62 trillion yuan. Within this, the import and export of knowledge-intensive services was 1.363.92 trillion yuan, a year-on-year increase of 12.3%, accounting for 43.5% of the total service import and export, an increase of 1.5 percentage points year-on-year.
On the economy, let me highlight some international media reports:
FT reports: “Chinese authorities are putting pressure on prominent local economists to avoid discussing negative trends such as deflation, as concerns mount about Beijing’s ability to boost a flagging recovery in the world’s second-biggest economy. Multiple local brokerage analysts and researchers at leading universities as well as state-run think-tanks said they had been instructed by regulators, their employers and even domestic media outlets to avoid speaking negatively about topics ranging from fears of capital flight to softening prices. Seven well-regarded economists told the Financial Times that their employers had told them some topics were off-limits for public discussion. The China Securities and Regulatory Commission, the stock regulator, has accused brokerage analysts of playing up risks facing the economy, which is suffering from weak consumer demand, declining exports and an ailing property sector. Two think-tank scholars and two brokerage economists, all of whom serve as government advisers, said there was pressure to present economic news positively in order to increase public confidence. “The regulator doesn’t want to hear negative comments about the economy in public,” said an adviser to the central bank. “They wanted us to interpret bad news from a positive light.” Analysts said growing self-censorship among economic research professionals, on whom investors often rely in a market where reliable data is difficult to come by, underscored Beijing’s efforts to control the flow of information.”
Reuters has a really good piece on China’s local government debt challenges. Here’s how it outlines the scale of the problem: “Local government debt reached 92 trillion yuan ($12.8 trillion), or 76% of economic output in 2022, up from 62.2% in 2019. Part of it is debt issued by local government finance vehicles (LGFVs), which cities use to raise money for infrastructure projects. The International Monetary Fund expects LGFV debt to reach $9 trillion this year.”
Here are the key policy options that it discusses:
One adviser suggested “all stakeholders bear some of the burden: financial institutions, local governments, Beijing and society at large.”
Local governments could use “left-over bond issuance quotas from last year to swap ‘hidden debt’ with official bonds on their balance sheet, according to analysts, with up to 2.6 trillion yuan to be issued. Such a move has a precedent. From 2015 to 2018, local governments issued some 12 trillion yuan of bonds to swap for off-balance sheet debt.”
“Most economists expect Beijing to instruct state-owned banks to keep rolling over maturing debt with longer-term loans at lower interest rates, a strategy often referred to as ‘extend and pretend.’ The banks, however, need to be selective based on the magnitude and urgency of any refinancing task. Debt restructurings hurt their own balance sheet, hampering their ability to finance other parts of the economy.”
“Beijing may ask certain localities to sell or leverage assets to raise funds.”
“The central government can issue low-cost bonds to replace local debt”
“More generous direct fiscal transfers for funding vital public services could also be thrown into the basket, analysts say. That path is well-trodden: the finance ministry expects a record 10 trillion yuan in such transfers this year, up 3.6% from 2022.”
Page 2: There’s a report on the State Taxation Administration of China announcing 28 measures to facilitate tax payments and promote the development of the private sector, with a focus on supporting small and medium-sized enterprises (SMEs) and individual businesses. According to the SAT, as of July, 308,000 enterprises nationwide had enjoyed tax reductions of about 230 billion yuan ($32 billion). Private enterprises accounted for 94.3 percent, exceeding 290,000, and the amount of extra deductions on R&D costs enjoyed by private enterprises accounted for 76.6 percent of the total.
This English report explains the key point:
“The measures mainly extend the duration of certain tax exemptions and further strengthen the implementation of preferential tax policies, ensuring that the benefits of tax reductions reach enterprises directly. For example, taxpayers who, for various reasons, did not benefit from the extra tax deduction on enterprises' research and development (R&D) costs during the July tax period can still enjoy this policy in August and September. Additionally, the tax authority said that it will collaborate with relevant departments to collect and compile case studies on R&D project identification, helping eligible SMEs to fully enjoy policy benefits.”
“The SAT also introduced six measures to facilitate tax handling, minimizing the steps, documentation, time and costs for taxpayers. The measures include advancing international tax cooperation, expanding channels for resolving doubts and providing clarification for private enterprises engaged in overseas business.”
Page 3: Two reports to note. First, there’s a report on Wang Yi’s phone conversation with High Representative of the EU for Foreign Affairs and Security Policy Josep Borrell. Xinhua reports Wang as saying that China and the EU should conduct more institutional dialogues to inject new and strong impetus into the China-EU comprehensive strategic partnership.
“Borrell expressed his deep condolences for the recent torrential rains and floods in China, and emphasized that the EU is firmly committed to developing good relations with China. The EU's Global Gateway strategy and the Belt and Road Initiative are no rivalries but complementary to each other, as both are aimed at promoting global development, he added. Borrell stressed that he looks forward to visiting China as soon as possible and launching a strategic dialogue with the Chinese side to jointly prepare for this year's EU-China leaders' meeting and to promote the further development of EU-China relations. Wang said that at present, China-EU high-level exchanges have maintained a good momentum, and both sides believe that partnership is the most important feature of China-EU relations. China has always taken a positive attitude in promoting China-EU relations, he noted, adding China attaches great importance to the China-EU leaders' meeting scheduled for this year and expects it to play a strategic leading role in China-EU relations and bilateral cooperation. China and the EU should conduct more institutional dialogues, so as to make up for the missing exchanges between China and the EU in the three years of the COVID-19 pandemic, and inject new and strong impetus into the China-EU comprehensive strategic partnership, Wang said. He also noted that China welcomes Borrell to lead a delegation to visit China this fall and hold a strategic dialogue to make political preparations for the China-EU leaders' meeting through extensive and in-depth exchanges. The two sides also exchanged views on Ukraine, Niger and other international and regional issues of common concern.”
Second, there’s a commentary on biosecurity and governance. This comes as the Working Group on the strengthening of the Biological Weapons Convention meets in Geneva. The article says that the establishment of the working group was one of the outcomes of the 9th Review Conference of the BWC last year. It says:
“Currently, global bio-security governance faces both new challenges and important opportunities. On one hand, the progress of biotechnology promotes the development of productive forces and enhances human well-being; on the other, with the richer connotation and extension of biosecurity, traditional biosecurity issues and new biosecurity risks are superimposed on each other, and the global biosafety situation is becoming more complex. How to strengthen global biosecurity governance and better coordinate safety and development has become a common issue facing the international community. Faced with a new situation, new challenges and new issues in the field of biosecurity, China adheres to systematic governance, while constantly building its own biosecurity defense line, deeply participates in global biosecurity governance, actively contributes Chinese wisdom and Chinese solutions. China has solemnly put forward the Global Security Initiative and officially issued the Concept Document of the Global Security Initiative, clearly pointing out that it is necessary to adhere to the overall maintenance of security in traditional and non-traditional fields, and advocate countries to practice the global governance concept of extensive consultation, joint contribution and shared benefits to jointly address global issues, including biosecurity. 生物安全事关全人类的共同利益。当前，全球生物安全治理既面临新挑战，也蕴藏着重要机遇。一方面，生物科技的进步推动生产力发展，增进人类福祉；另一方面，随着生物安全的内涵和外延更加丰富，传统生物安全问题和新型生物安全风险相互叠加，全球生物安全形势更趋复杂。如何加强全球生物安全治理，更好地统筹安全与发展，成为国际社会面临的共同课题。面对生物安全领域新形势新挑战新课题，中国坚持系统治理，在不断筑牢自身生物安全防线的同时，深入参与全球生物安全治理，积极贡献中国智慧、提供中国方案。中方郑重提出全球安全倡议并正式发布《全球安全倡议概念文件》，明确指出要坚持统筹维护传统领域和非传统领域安全，倡导各国践行共商共建共享的全球治理观，共同应对包括生物安全在内的全球性问题.
“The BWC is an important cornerstone of global biosecurity governance. It has been open for signature for more than 50 years and has played an important role in preventing biosecurity threats and promoting the peaceful use of biotechnology. China has a clear-cut stand on strengthening the BWC and vigorously promotes the establishment of a verification mechanism through multilateral negotiations to fundamentally ensure compliance. China has consistently advocated the complete prohibition and thorough destruction of all weapons of mass destruction, including biological weapons, and resolutely opposes the proliferation of biological weapons and their technologies. China firmly supports the purposes and objectives of the BWC, fully and strictly fulfils its obligations under the BWC, and actively participates in and supports multilateral processes to enhance the effectiveness of the BWC. In April 2021, the ‘Biosecurity Law of the People's Republic of China’ came into effect, providing stronger legal and institutional guarantees for China to implement the BWC. China also actively advocates the negotiation and formulation of the ‘International Convention on Combating Acts of Biochemical Terrorism’ to further fill in the shortcomings of international law.” 《公约》是全球生物安全治理的重要基石，开放签署50多年来，在防范生物安全威胁、促进生物科技和平利用等方面发挥了重要作用。中方旗帜鲜明主张加强《公约》，大力推动通过多边谈判建立核查机制，从根本上确保遵约。中国一贯主张全面禁止和彻底销毁包括生物武器在内的所有大规模杀伤性武器，坚决反对生物武器及其技术的扩散。中国坚定支持《公约》的宗旨和目标，全面、严格履行公约义务，积极参与并支持加强公约有效性的多边进程。2021年4月，《中华人民共和国生物安全法》正式施行，为中国履行《公约》提供了更加强有力的法律和机制保障。中方还积极倡导谈判制定“打击生化恐怖主义行为国际公约”，进一步补齐国际法短板.
“In recent years, the risk of abuse and misuse of biotechnology has aroused great concern. China supports the parties to the BWC to keep pace with the times, keep in mind the vision of universal security and common development for mankind, strengthen the review of biotechnology development under the framework of the BWC, promote responsible biological research, and formulate necessary voluntary codes of conduct. Based on the above position, China conducted in-depth discussions with other countries, and in July 2021 reached the ‘Tianjin Biosecurity Guidelines for Codes of Conduct for Scientists’. This put forward ten guidelines, including the need to adhere to ethical standards, abide by legal norms, advocate scientific research integrity, strengthen risk management, strengthen scientific research supervision, and promote international cooperation. These cover the whole process and chain of biological research, fully embody the consensus of the international community and make important contributions to promoting the healthy and orderly development of global biotechnology.” The paragraph adds that these guidelines received praise and demonstrate that “an international process based on science and with broad representation can be an effective way to strengthen global biosecurity governance and related international cooperation.” 近年来，生物科技滥用、误用的风险引发高度关注。中国支持《公约》缔约国紧跟时代步伐，胸怀人类普遍安全和共同发展愿景，加强公约框架下对生物科技发展的审议，推广负责任的生物科研，制定必要的自愿性行为准则。基于上述立场，中国同各国开展深入研讨，于2021年7月达成《科学家生物安全行为准则天津指南》，提出坚守道德基准、遵守法律规范、倡导科研诚信、加强风险管理、强化科研监管、促进国际合作等十大准则，涵盖了生物科研的全流程、全链条，充分体现了国际社会的共识，为推动全球生物科技健康、有序发展作出了重要贡献。在《公约》第九次审议大会、缔约国大会期间，《科学家生物安全行为准则天津指南》广受关注与好评。《科学家生物安全行为准则天津指南》始于中国倡议，属于全世界，充分体现了国际科学界进一步规范生物科研活动的决心，也充分表明基于科学、具有广泛代表性的国际进程可成为加强全球生物安全治理和相关国际合作的有效途径.
The next paragraph is worth noting: “In response to the call from many developing countries to share the dividends of technological development in fields like biotechnology, China proposed the ‘Resolution on Promoting international cooperation on peaceful uses in the context of international security.’ This resolution has launched an open and inclusive dialogue process under the framework of the United Nations General Assembly. It is of great significance to build a more just and reasonable export control order, safeguard the legitimate rights and interests of countries in the peaceful use of science and technology, and respond to the security challenges brought about by the development of science and technology. This resolution has been adopted by the UN General Assembly for two consecutive years and has been widely welcomed by the international community.” 针对广大发展中国家要求在生物等领域共享科技发展红利的呼声，中国提出“在国际安全领域促进和平利用国际合作”决议，在联大框架下开启了开放、包容的对话进程，对构建更加公正、合理的出口管制秩序，维护各国和平利用科技的合法权益，应对科技发展带来的安全挑战具有重要意义。这份决议已连续两年在联大通过，受到国际社会广泛欢迎.