Property Market Support - Pushback on US Tariffs - Zhai Kun on Country & Region Studies in China
It’s quite a slow news day today in the paper. So I am going to look at some key pieces rather than doing a page-wise breakdown.
First, let’s begin with Friday’s announcement of new support measures for the property market. Some of the key measures announced are:
The PBOC announced a relending program for affordable housing, allocating 300 billion. This has an interest rate of 1.75%, for a term of 1 year, and can be extended 4 times. The recipients include 21 national banks. The PBOC will provide relending equivalent to 60% of the loan principal, potentially driving banks to issue loans totaling 500 billion yuan. Loans will be provided to local state-owned enterprises selected by the city government to support the acquisition of completed and unsold commercial properties to be used as allotment-type or rental-type affordable housing. 此次中国人民银行拟设立保障性住房再贷款，引起市场高度关注。据介绍，保障性住房再贷款规模3000亿元，利率1.75%，期限1年，可展期4次。发放对象包括国家开发银行、政策性银行、国有商业银行、邮政储蓄银行、股份制商业银行等21家全国性银行。银行按照自主决策、风险自担原则发放贷款。人民银行按照贷款本金的60%发放再贷款，可带动银行贷款5000亿元。“作为新创设的结构性货币政策工具，保障性住房再贷款按照‘政府主导、市场化运作’的思路，由人民银行提供低成本再贷款资金，激励21家全国性银行机构按照市场化原则，向城市政府选定的地方国有企业发放贷款，支持以合理价格收购已建成未出售的商品房用作配售型或配租型保障性住房。”中国人民银行副行长陶玲介绍说.
The minimum down payment ratio for first and second home loans has been reduced to no less than 15% and no less than 25%, respectively.
PBOC has announced the removal of the lower limit on interest rates for first and second commercial personal housing loans nationwide
PBOC has reduced the interest rate on individual housing provident fund loans by 0.25 percentage points
Some key data points:
Since the establishment of the urban real estate financing coordination mechanism, as of May 16, 935 billion yuan worth of loans have been approved by commercial banks for whitelisted projects. 城市房地产融资协调机制建立以来，截至5月16日，商业银行已按内部审批流程审批通过“白名单”项目贷款金额9350亿元.
In the first quarter of this year, commercial banks issued new real estate development loans worth 963.6 billion yuan and new personal housing loans worth 1.3 trillion yuan. 今年一季度，商业银行新发放房地产开发贷款9636亿元，新发放个人住房贷款1.3万亿元，比去年第四季度均有较大增长.
Goldman Sachs estimates saleable housing inventory at 13.5 trillion yuan at the end of 2023; analysts at Tianfeng Securities estimate it will cost around $1 trillion to buy the entire stock. WSJ reports that “Nomura estimates there are as many as 20 million to 30 million unfinished homes, and that it would cost the government at least $440 billion to complete them and clear the logjam crippling China’s real-estate market and the wider economy.”
The report adds: “New figures Friday showed how distant that prospect still appears. Average new-home prices fell 0.58% in April from March, the largest monthly drop in 10 years, China’s National Bureau of Statistics said. Property investment declined 9.8% from a year earlier in the first four months of the year, widening a 9.5% drop recorded in the first quarter, according to data released by the statistics bureau.”
Some comments by analysts:
“The government’s purchase of housing inventory can inject more liquidity to developers, who could then have more resources for housing delivery,” Larry Hu, chief China economist at Macquarie, told CNBC. “Finally the government stepped in as the buyer of the last resort.” “At this stage, it’s mainly SOEs and local governments to implement the policies, but their resources may be too limited to move the needle at the macro level,” he said. “Later on, we might see more efforts from the central government.”
“It's a bold step,” said Raymond Yeung, chief Greater China economist at ANZ of the measures. “The biggest problem is whether the government purchase programme will induce private sector demand. Clearing inventory will increase cashflow to developers and help their financial stability, but it does not address private sector confidence.”
Second, there is a Zhong Sheng commentary on Page 3, calling the latest tariffs by the Biden administration a “short-sighted” move.
“The United States is determined to politicise and instrumentalize economic and trade issues, and is using tariffs to suppress China’s industrial development and normal economic, trade and scientific and technological activities. It not only seriously tramples on market economic principles and international economic and trade rules, but also seriously jeopardises the healthy development of the world economy. The US side’s imposition of additional tariffs is a typical act of unilateralism and protectionism. The US’s claims that Chinese products threaten American ‘national security’ and that China engages in so-called ‘unfair trade practices’ are nothing but false excuses. The main purpose of the US’ forcible imposition of additional tariffs on Chinese products is to gain political self-interest under the guise of protecting related industries in the US.” 美方一意孤行将经贸问题政治化、工具化，以关税大棒打压中国产业发展和正常经贸科技活动，不仅严重践踏市场经济原则和国际经贸规则，而且严重危害世界经济健康发展。美方加征关税，是典型的单边主义和保护主义行径。美方声称中国相关产品威胁美国“国家安全”、中国进行所谓“不公平贸易行为”，不过是虚妄的借口。美方强行对中国产品再次加征关税，主要目的是打着保护美国相关产业的幌子捞取政治私利.
Of course, the author tells us that the decision by the US is a typical act of hegemony and bullying. The article argues that the WTO has already termed earlier Section 301 tariffs on China as violative of WTO rules.
“Instead of correcting those actions, the US has imposed additional tariffs again. This fundamentally stems from some Americans' ‘China anxiety’. In their effort to maintain their unipolar hegemony, they view China’s development as a threat and are suppressing China by any means necessary, to the point of near irrationality. The development of China's new energy and other industries is the result of corporate technological innovation and active participation in market competition. Thanks to China's complete industrial manufacturing system and huge domestic market, it meets the needs of the global economy, and is beneficial to China, the United States, and the world. The United States’ blind suppression of the development of China's related industries does not prove the strength of the United States. On the contrary, it reveals that the United States has lost confidence and lost its composure; this will not solve the domestic problems of the United States, but will cause further damage to the normal operation of the international supply chain; and it will not prevent China’s development and revitalization, but will inspire more than 1.4 billion Chinese people to work harder.” 美方加征关税，是典型的霸权主义和霸道霸凌行径。美国上届政府对华加征301关税，严重干扰了中美正常的经贸往来，已被世贸组织裁定违反世贸规则。美方非但不予以纠正，反而再次加征关税，从根源上讲是美方一些人的“中国焦虑症”使然。他们为了维护自己的单极霸权，将中国的发展视为威胁，不择手段地打压中国，已经到了近乎失去理智的程度。中国新能源等产业的发展是企业技术创新和积极参与市场竞争的结果，得益于中国完整的工业制造体系和巨大的国内市场，符合世界经济发展需要，有利于中国，有利于美国，也有利于世界。美国一味打压中国相关产业发展，并不能证明美国的强大，反而暴露出美方已丧失自信，乱了方寸；并不能解决美国自身存在的问题，反而会对国际产供链的正常运转造成进一步破坏；并不能阻止中国的发展振兴，反而会激发14亿多中国人民更加奋发图强.
The final bit makes the case that tariffs place additional burdens on American consumers.
Also on the page are Ambassador Xie Feng’s comments, stating that “the notion of ‘China’s overcapacity’ is a false proposition.
Finally, today Xinhua reports that General Atomics Aeronautical Systems, General Dynamics Land Systems, and Boeing Defense, Space & Security have been added to China’s unreliable entities list. Xinhua says: “They will be barred from engaging in China-related import or export activities, and are forbidden to make new investments in China, the ministry said. Senior executives of the companies are prohibited from entering China, while their work permits will be revoked, along with their visitor and residential status, and the related applications they submit will not be approved”. This is all because of arms sales to Taiwan.
Finally, there’s an article by Zhai Kun, Professor at the School of International Studies, Peking University, calling for the development of deeper regional and country studies across Chinese academia. Zhai believes that it is essential to “build China's independent knowledge system of regional and country studies in order to provide academic support to correctly understand the external world, promote positive interaction between China and the external world, and promote the construction of a community with a shared future for mankind.” 当前，世界之变、时代之变、历史之变正以前所未有的方式展开，新形势新任务要求我们更加全面认识外部世界、认识自身与外部世界的关系，更加深入研究世界各国各地区，推动区域国别学研究向纵深发展。作为交叉学科门类下的一级学科，区域国别学要从国家的现实与长远需求出发，科学把握对象国家和区域的发展现状与趋势，在明确自身的学科使命、学科特色基础上，努力建构中国自主的区域国别学知识体系，为我们正确认识外部世界、促进自身与外部世界良性互动、推动构建人类命运共同体提供学术支撑.
Zhai is clear that “the construction of region and country studies should closely serve the strategic needs of the country, cultivating more individual countries experts, region experts, and domain experts.” 区域国别学建设，要紧密服务国家战略需求，培养更多“国别通”“区域通”“领域通”.
In the first section, Zhai writes:
“In the new era, China’s international influence has continued to expand and it has increasingly become an important actor in global affairs. At the same time, profound changes unseen in a century are accelerating, and the internal conditions and external environment for China’s development are undergoing complex and profound changes. With the implementation of BRI, the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative, China is increasingly becoming closer to a large number of countries. The new situation and new tasks require us to accurately grasp the international situation, systematically and comprehensively understand the external world, and accurately formulate international strategies. Through in-depth and comprehensive research on countries and regions around the world, region and country studies can construct a knowledge system that deepens understanding of the world and builds bridges between China and foreign countries, thereby playing its due role in serving national development and the great rejuvenation of the Chinese nation.” 新时代，我国国际影响力持续扩大，日益成为重要的全球事务参与者。与此同时，世界百年未有之大变局加速演进，我国发展的内部条件和外部环境正在发生复杂深刻变化。随着高质量共建“一带一路”，全球发展倡议、全球安全倡议、全球文明倡议落实落地，中国与越来越多国家的联系愈发紧密。新形势新任务要求我们准确把握国际形势，系统全面认识外部世界，精准制定国际战略。通过对世界各国各地区进行深入、全面的研究，区域国别学能够建构认识世界、融通中外的知识体系，为服务国家发展、服务中华民族伟大复兴发挥应有作用.
Zhai then adds that region and country studies should support China’s external policy work. He writes that such research provides three specific advantages:
First, it helps build knowledge accumulation and theoretical interpretation regarding the particularities, regional characteristics, and local circumstances within these countries and regions
Second, it allows comprehensively and systematically studying the cooperation strategies and policies between China and different regions, countries, and international organizations in the world.
Third, using interdisciplinary approach allows one to study macro global issues to identify shared human predicaments
Fourth through such research and talent cultivation, region and country studies can provide professional knowledge, intellectual support, and talent support for the country's external affairs.
为对外工作提供有力支撑。当今世界变乱交织，不稳定性不确定性加剧，各类风险层出不穷，给我国对外工作带来了诸多挑战。区域国别学聚焦对象国家和区域的历史与现实、政治与经济、社会与文化、内政与外交、安全与稳定、民族与宗教等领域开展专门而深入的研究，形成对区域国别特殊性、地域性、适地性的知识积累与理论阐释；既分门别类又综合系统地研究中国与世界上不同区域、不同国家、不同国际组织在政治、经济、安全、人文等各领域的合作战略与政策；借助跨学科研究方法，研究全球可能导致“人类困境”的重大宏观性问题，等等。通过这些方面的研究及人才培养，区域国别学能够为国家对外工作提供专业知识、智力支持和人才支撑.
The final paragraph in this section makes the point that country and region studies are important to help enterprises, universities, think tanks, media, social organisations to go global.
In the next section, he argues that China’s work to develop regional and country-specific studies has both developmental and moral dimensions.
Zhai writes that such studies in China are driven by the aim to deepen understanding of the world and countries and regions. Along with that, they are also important for China to provide public goods for world peace, development, and the improvement of the global governance system. “China's regional and country studies in the new era should demonstrate China's grandeur and major power responsibility, demonstrate an academic demeanor characterized by putting oneself at the forefront, being all-embracing/incorporating diverse ideas, achieving mastery through comprehensive study, and accomplishing excellence, thereby contributing more wisdom to the advancement of human knowledge.” 中国的区域国别学兼具发展性和道义性：一方面旨在深化对世界和区域国别的认识，另一方面致力于为世界和平与发展、为全球治理体系完善提供公共产品，因而必将为世界范围的区域国别研究提供新的研究范式、注入新的理论活力。新时代的中国区域国别学要彰显中国气派和大国担当，展现以我为主、兼收并蓄、融会贯通、立己达人的学术气象，为人类的区域国别知识进步贡献更多智慧.
He then says that Chinese scholars need to build practical knowledge through detailed research work and that they must adopt an interdisciplinary approach.
In the final section, he talks about the importance of Chinese scholars to seek to answer the big questions around geopolitical, global governance and economic changes, particularly with regard to the Global South. He also says this:
“From the perspective of serving the national strategy, efforts need to be made to strengthen basic theoretical research that serves knowledge production, research on policy measures that serve the national strategy, and research on social general knowledge to enhance national literacy. From the perspective of building a community of shared future for mankind, the construction of China's region and country studies knowledge system should not only have Chinese characteristics and autonomy but also possess a certain universality and leading quality.” 把握知识层次。从学科建设角度看，需要形成理论、实践、历史、方法等多方面相容相通的知识体系。从服务国家战略角度看，可加强服务于知识生产的基础理论研究、服务国家战略的政策应用研究以及提高国民素养的社会通用型知识研究。从构建人类命运共同体角度看，中国区域国别学知识体系的建构，不仅要具有中国特色和自主性，也要具有普遍性和引领性.