Peaceful China - Li to CEOs: Economic Development is the 'Central Task' - FDI & Economic Data - Advance Quota for Local Gov't Bonds - Wang Yi speaks to Solomon Islands' FM
Here are the stories and pieces that I found noteworthy from Friday, December 17, 2021, edition of the People’s Daily.
Page 1: First, Xi Jinping met with role models in implementing the Peaceful China initiative. Guo Shengkun spoke at the meeting.
“It is necessary to draw strength from General Secretary Xi Jinping’s care, adhere to the guidance of Xi Jinping Thought on socialism with Chinese characteristics for the new era, fully implement the spirit of the 19th Party Congress and all its plenary sessions and the spirit of the Central Economic Work Conference, draw wisdom from the Party’s century-long struggle, further promote a higher level construction of Peaceful China; ensure greater political security, social stability, and peace for the people, welcome the opening of the 20th Party Congress with outstanding achievements, and build a comprehensive socialist modern country and make greater contributions to realise the dream of the great rejuvenation of the Chinese nation.” — 他指出，要把习近平总书记的亲切关怀转化为强大动力，坚持以习近平新时代中国特色社会主义思想为指导，全面贯彻落实党的十九大和十九届历次全会精神及中央经济工作会议精神，从党的百年奋斗中汲取智慧力量，深入推进更高水平的平安中国建设，确保政治更安全、社会更安定、人民更安宁，以优异成绩迎接党的二十大胜利召开，为全面建设社会主义现代化国家、实现中华民族伟大复兴的中国梦作出新的更大贡献.
Next, a short report telling us that Xi’s speech to Commemorate the 30th Anniversary of China-ASEAN Dialogue in late November has been published as a booklet.
Third, a report about Li Keqiang speaking at the Global CEO Council. He did so via video link. There’s a detailed English report, from which I am drawing below. Nothing in here about the redistribution agenda.
“Business leaders of nearly 30 Fortune Global 500 companies, including Schneider Electric, Dow, ABB, Panasonic, Cargill, Rio Tinto, Starbucks and Volkswagen, spoke on the topics of innovation-driven development, green and low-carbon transition, and multinational companies' new development opportunities in China. Li recognized the contributions of multinational companies to China's reform, opening-up and modernization drive, and engaged in in-depth discussions with the business leaders.”
Li talked about being committed to reform and opening up and then told them that:
“China will continue to deliver institutional tax and fee cuts, including extra tax deduction on research and development expenses and refund of overpaid value-added tax, to increase the share of total research and development spending in GDP, said Li, adding that China will support business innovation and technology upgrading with market-oriented incentives that are equitable and inclusive. Through technology innovation and cooperation, China will step up the new energy development and clean use of coal, strive for a green and low-carbon transition while ensuring energy and electricity supply, and better meet the climate challenge.”
This is important to note too:
“The Premier said China will continue to deepen the reform of transforming government functions, foster a market-based, world-class business environment governed by a sound legal framework, strictly protect intellectual property, and provide equal and fair treatment to both domestic and foreign-invested firms. China will improve the foreign investment promotion and service system and make China a highly attractive investment destination over the long run, Li added. Updating the participants on the state of the Chinese economy, Li said that China will continue to take economic development as the central task. In the face of new downward pressure, China will place steady growth in a more prominent place and pursue steady growth, structural adjustment and reform in a coordinated way, to keep major economic indicators within the proper range and maintain sound economic fundamentals in the long term, Li said.”
He further added that the 150 million market entities are “important underpinnings for employment and economic growth” and that the government “will make every effort to help businesses overcome difficulties, unlock their vitality and the internal dynamism of development, and solidify the basis for steady growth and employment.”
Fourth, a report on foreign capital usage and electricity consumption.
Foreign Direct Investment (English report) in the first 11 months, in actual use, rose 15.9% year on year to 1.04 trillion yuan, or $157.2 billion, as per the Ministry of Commerce. FDI into the service sector increased 17% year on year, while high-tech industries saw FDI inflow jump 19.3%. FDI from BRI and ASEAN countries jumped 24.7% and 23.7%. FDI into China’s eastern, central and western regions increased by 15.4%, 25.8% and 13.4% year-on-year.
China’s electricity consumption (English report) climbed 3.1% from a year ago to 671.8 billion kWh in November 2021, putting the average growth for the same period over the past two years at 6.6 percent, the National Energy Administration said. From January to November, the total electricity consumption of the whole society was 7497.2 billion kwh, an increase of 11.4% year-on-year.
Some other key data points that were reported this week; I am drawing from this WSJ report:
Industrial production expanded by 3.8% in November from a year ago, accelerating from 3.5% growth in October.
Fixed-asset investment increased 5.2% in the January-to-November period, down from the 6.1% pace recorded in the first 10 months
New-home prices dropped 0.33% in November from October across 70 cities, the biggest month-over-month decline in about six years, according to calculations by The Wall Street Journal based on official data released Wednesday.
New-construction starts by property developers dropped 9.1% in the January-to-November period from a year earlier, widening from a 7.7% on-year decline in the first 10 months of the year.
Retail sales rose just 3.9% last month from a year ago, down from October’s 4.9% year-over-year growth and lower than the 4.5% expected increase among economists polled by the Journal.
Another report, although not in PD, that is worth noting is this from the NDRC:
“China will focus on the security and stability of energy, food, industrial and supply chain in 2022, while effectively expanding consumption and investment as well as accelerating structural adjustment and optimization of the country’s industrial sectors, China’s top economic planner said on its Wechat account. The National Development and Reform Commission (NDRC) made the remarks during a meeting held on Monday aimed at addressing the deployment of key tasks for development and reform in 2022, following the tone-setting Central Economic Work Conference that outlines the country's top economic policy priorities for the coming year. In 2022, the NDRC will ensure stable economic operation and further support the development of the real economy including manufacturing enterprises, small and medium-sized enterprises and individual entrepreneurs.”
Moving on, there’s a commentary based on Xi’s speech on literature and art. This reiterates Xi’s five hopes from writers and artists:
First, bear in mind the great cause of national rejuvenation, and enthusiastically depict the grand vision of our new journey in the new era
Second, uphold the people’s position and script an epic poem of the people
Third, adhere to the righteousness and innovation, and open up a new realm of literature and art with fine works that keep up with the times
Fourth, tell the China story well with passion and force, and present a credible, loveable and respectable image of China to the world
Fifth, adhere to the path of righteousness, and achieve value through the pursuit of moral and artistic excellence
一是心系民族复兴伟业，热忱描绘新时代新征程的恢宏气象；二是坚守人民立场，书写生生不息的人民史诗；三是坚持守正创新，用跟上时代的精品力作开拓文艺新境界；四是用情用力讲好中国故事，向世界展现可信、可爱、可敬的中国形象；五是坚持弘扬正道，在追求德艺双馨中成就人生价值.
The next paragraph praises Xi’s speech as providing guidance to artists and writers. The piece later talks about how cultural development is deeply linked to the nation’s fortunes and future. 文运同国运相牵, 文脉同国脉相连. It adds that “national rejuvenation has entered an irreversible historical process. Only by profoundly grasping the theme of the times of national rejuvenation and writing literary and artistic creation into the history of national rejuvenation and the journey of people's struggle can we better shoulder the heavy responsibility entrusted by the times.” 实现中华民族伟大复兴进入了不可逆转的历史进程，只有深刻把握民族复兴的时代主题，把文艺创造写到民族复兴的历史上、写在人民奋斗的征程中，才能更好担负起时代赋予的重任.
Finally, a report (English report) about Han Zheng calling for implementing the policy of bringing the basic old-age pension schemes of enterprise employees under national unified management. Han said that a unified elderly-care insurance system should be implemented nationwide to better protect the rights and interests of workers and enterprise retirees. He urged efforts to strengthen the management of funds re-allocated by the central government, and enhance the sustainability and fairness of the elderly-care insurance system.
Page 2: First, a report about positive reactions to Xi’s speech to writers and artists. The people quoted want to fulfil the five hopes that Xi expressed. For instance, Li Yi, Vice Chairman of the Federation of Chinese Literary and Art Circles, calls for “unifying thoughts and actions in the spirit of General Secretary Xi Jinping's important speech.”
Second, comments by vice minister of finance Xu Hongcai on local government debt and bond issuance.
Xu said that in 2021, the NPC approved an additional 3.65 trillion yuan in special bonds for local governments. As of December 15, 3.42 trillion yuan of special bonds had been issued, accounting for 97 percent of the quota already issued. On the usage of the money, Xu explains that:
around 50% has invested in transportation infrastructure, municipal and industrial park infrastructure
around 30% has been invested in affordable housing projects and social undertakings, such as healthcare, education, old-age care and cultural tourism
around 20% has been invested in agriculture, forestry, water conservancy, energy, urban and rural cold chain logistics
Xu also says that local governments have arranged more than 170 billion yuan of special bond funds to be used as capital for major projects.
Xu further stated that the central government has issued a 1.46 trillion yuan advance quota for local government special bonds to help spur investment in 2022. Provincial governments should allocate all the quotas issued in advance to cities and counties before the end of the year. He added that this money would be used to prioritise investment projects and regions with lower debt burdens. He also said that quota funds should be tilted towards provinces and cities that have key national or provincial projects.
The story later says that the Ministry of Finance and the NDRC have strengthened the negative list management in the field of investment of special bonds. It is strictly prohibited to use the quota funds for image projects, political achievements projects and expenditure projects that do not promote public welfare.
I thought this caveat below dilutes the bit about being wary of areas with high debt risk. There is evidently more indication of easing to achieve growth as against tightening to ensure discipline. “In high-risk areas and areas with relatively high debt risk, it is clear that special bonds shall not be used for non-essential construction projects.” 在高风险地区、债务风险指标相对高的地区，明确不得将专项债券用于非必需的建设项目.
The last paragraph essentially is the same as this English report:
“By the end of 2020, local governments in China had 25.66 trillion yuan (about 4.03 trillion U.S. dollars) in outstanding debt. If compared to the financial strength of local governments, their debt ratio stood at 93.6 percent, below the international standard of 100 percent to 120 percent, said vice minister of finance Xu Hongcai. By the end of last year, the outstanding debt of the Chinese government stood at 46.55 trillion yuan, putting its debt-to-GDP ratio at 45.8 percent, which is below the 60-percent prudential limit recognized by the international community.”
Page 3: A bunch of stories to note. First, experts and scholars offer a positive appraisal of the Xi-Putin meeting, and a commentary that reiterates the key points from the meeting that I covered yesterday.
Second, Wang Chen attended a commemorative activity marking the 10th anniversary of the passing of Kim Jong Il, former supreme leader of the Democratic People's Republic of Korea at the DPRK embassy in Beijing. Xinhua reports that “China is willing to work with the DPRK to implement the important consensus reached by the top leaders of the two parties and countries, safeguard the traditional friendship between China and the DPRK, maintain regional peace, stability, development and prosperity, and better benefit the two countries and their people, he said.”
Third, a report about Wang Yi’s call with Solomon Islands’ Minister of Foreign Affairs Jeremiah Manele. A useful excerpt from the Xinhua story:
“The Chinese diplomat said not long ago, serious riots broke out in the capital of Solomon Islands, which have hit the safety and lives of local people and overseas Chinese, adding that China extends its deep sympathies and sincere condolences to the government and people of Solomon Islands and strongly condemns all acts of violence. China, Wang said, stands firmly with the government and people of Solomon Islands, firmly supports the Solomon Islands government’s efforts to maintain domestic stability, and firmly safeguards bilateral relations as well as the legitimate rights and interests of Chinese citizens in country. He said he hopes and believes that the Solomon Islands government will continue to take all necessary measures to protect the safety of local people and Chinese citizens in the country in accordance with law. The riots had a complex background and some forces with ulterior motives took the opportunity to smear the two countries’ relations while trying to subvert the achievements of their diplomatic ties, Wang noted, saying that it is completely against the interests of the Solomon Islands people and doomed to failure. Solomon Islands has reiterated its firm adherence to the one-China policy and forcefully responded to groundless accusations, and China highly appreciates it, Wang said, adding that the two countries' relations have withstood this test and are stronger than ever before.”
Also this:
“At present, Wang said, both sides should be wary of the attempts by a handful of countries, holding onto a Cold War mentality, to interfere in other countries’ internal affairs in the name of human rights, and jointly safeguard the basic norms of international relations as well as international fairness and justice. Manele warmly congratulated the Communist Party of China (CPC) on its successful convening of the sixth plenary session of the 19th CPC Central Committee, expressed gratitude to China for its strong support and assistance to the economic and social development of Solomon Islands, and extended sincere sympathies to Chinese nationals in Solomon Islands for their property losses during the riots.”
Fourth, a report about overseas Chinese being part of an online session discussing the positive developments in Xinjiang. Here’s an English report. It informs that:
“Twenty-five overseas Chinese representatives from 19 countries who are influential in their respective industries participated in an online meeting on Thursday to discuss how to better tell the story of the Xinjiang Uyghur autonomous region to the world.” After the session, “the representatives expressed their indignation at Western media's irresponsible smearing of Xinjiang with ‘double standards’ and said they would actively promote the truth to other countries through media interviews and through social media platforms.”
Fifth, a report about political parties talking about the recent joint statement on democracy and common development. I had covered the statement here. In the report today, there are comments by people from Pakistan, Laos, Cambodia and Hungary. The report also offers biting critique in the form of reminding the world that democracy is not coca-cola. I was thinking about why they don’t offer a McDonald’s example too, given that it was once a symbol of unipolarity and globalisation. But then, McDonald’s has done really well to localise its menu in different places. Maybe Beijing should say that democracy is like a burger, it must be localised to succeed. Okay, I guess, I need to grab breakfast.
Finally, a report (English report) about the International Forum on Democracy: The Shared Human Values, which was held in Beijing on 4-5, 9-10, and 14-15 December. More than 500 guests from over 120 countries and regions as well as 20 international organizations online and on-site; the forum explored the essence of democracy from three perspectives: the common value of humanity, democracy and national governance, and the diversity of democracy. The forum’s closing ceremony announced the launch of a global think tank network for democracy studies with participation from more than 40 research institutes, proposing four initiatives including respecting diversity in models of civilization and democracy, and opposing the creation of confrontation and division in the name of democracy.
Other Stories:
One the theory page, the lead piece is by Lou Qinjian, the former Party Secretary of Jiangsu, who was replaced in October. Lou argues that it is important to remember that the nation is composed of people, and people are all that matter to the nation. 江山就是人民 人民就是江山. His argument is that since the people are the foundation of the country, maintaining close ties between the Party and the people is critical to ensure a stable foundation. He later talks about how the history resolution identifies putting the people first as one of the 10 learnings from the Party’s historical experience. Later in the piece, Lou talks about how Xi has put people first. In this regard, he does talk about common prosperity. In fact, the last paragraph says:
“It is necessary to promote common prosperity through high-quality development, make development more balanced, coordinated and inclusive, increase the size of the middle-income group, promote equal access to basic public services, better promote all-round human development, and make solid progress toward the goal of common prosperity for all. It is necessary to further development of whole process people’s democracy and adhere to the leadership of the Party, constantly expanding orderly political participation, strengthen the protection of human rights and the rule of law, ensure that people enjoy extensive rights and freedoms according to law…We should better practice the party's mass line, always want to be together with the people, share weal and woe…”