Tech Rectification, Trade Data, Taiwan Tensions, Party's Ideology Think Tank Chief's Historical Narrative

Before we begin, I would like to recommend to everyone this fascinating 2013 essay by Wen-Hsuan Tsai and Peng-Hsiang Kao on the use of pseudonyms in Party-state media. The core argument is that these were developed in the 1960s during the Sino-Soviet split to criticise the USSR, and then became potent tools for criticising and taking out factional rivals during the Cultural Revolution. Some of this, i..e, use of pseudonyms to pursue clashes of interest, has persisted. But largely this is now about putting out departmental views around issues. “Veiling of authors prevents outsiders from perceiving any disputes within the Party,” at one level; at another, it reduces the potential negative responses that can occur among grassroots cadres. There’s also this really useful chart, although it doesn’t capture all key pseudonyms like say Zhong Sheng.

Anyway, here are the stories and pieces from the April 14, 2021, edition of the People’s Daily that I found noteworthy.

Page 1: Let’s begin with Xi Jinping’s comments on developing a modern vocational education system and cultivating more high-quality technical professionals. This was part of his “instruction” delivered to a national conference on vocational education that was being held in Beijing over the past two days.

Xinhua reports that: “He called for promoting bachelor-level vocational education and bringing about a number of quality vocational education institutions and programs. Party committees and government departments at various levels are urged to further innovate relevant institutions and enhance policy support and investment to see that fine workmanship is promoted and that the social status of technical professionals improves.”

Li Keqiang also delivered a message to the conference. He said that vocational education is important for

  • cultivating technical and skilled personnel, 

  • promoting employment and entrepreneurship innovation, and 

  • boosting the level of manufacturing and service industries in China

The big point Li made was “more efforts are needed to promote integration between industry and education and cooperation between schools and enterprises” in order to move towards overall technological upgradation.

Next, Li Keqiang’s dialogue with board chairmen and CEOs from the U.S.-China Business Council and over 20 US multinational companies. Henry Paulson, former US Secretary of the Treasury, hosted the meeting, PD reports.

PD and Xinhua’s reports tell us that Li talked about the challenges in the bilateral relationship, while promising more opportunities for American businesses. Just take a look at some of this from Xinhua English:

“‘Problems that occur in cooperation should be resolved through cooperation,’ said Li, adding that decoupling does no good to either side and will hurt the world. Li expressed the hope that China and the U.S. can meet each other half-way, promote cooperation by making a bigger pie of common interests and safeguard the safety and stability of the industrial and supply chains.”

Also this: “China will further open up, work toward a market-based and law-governed business environment that is up to international standards, and promote reforms to delegate power, streamline administration and optimize government services, ensuring a level playing field for both domestic and foreign enterprises.”

Also, it’s interesting that Li says that Biden and Xi had a “consensus” to “uphold the principles of non-conflict, non-confrontation, mutual respect and win-win cooperation, respecting each other's core interests and major concerns, enhancing dialogue and communication, expanding practical cooperation and properly handling differences.” In Xinhua’s February reporting of the call between the two, this is what Xi had proposed; nowhere did it say that Biden agreed with this formulation in its entirety.

Third, the General Administration of Customs put out trade data yesterday. Xinhua English, same as PD, reports that China’s:

  • total imports and exports of goods surged 29.2 percent year on year to 8.47 trillion yuan (about 1.29 trillion U.S. dollars) in Q1. 

  • Exports jumped 38.7 percent from a year earlier and imports climbed 19.3 percent in yuan terms. 

  • trade surplus expanded 690.6 percent to reach 759.29 billion yuan.

  • Foreign trade by private enterprises expanded by 42.7 percent to 3.95 trillion yuan. 

Other key data points, which are drawn from Xinhua and from these comments by GAC spokesperson Li Kuiwen reported on Page 2 of PD.

  • Biggest export items were mechanical and electrical products; biggest import items were iron ore, crude oil, natural gas, soybean, corn and wheat. 

  • ASEAN, with 14.7% of China’s total value of foreign trade, was the largest trading partner followed by the EU and then the US. 

  • Trade with RCEP countries accounted for 31.5 percent of China’s total imports and exports

  • Trade with BRI countries was at 2.5 trillion yuan, an increase of 21.4%.

  • Cross-border e-commerce imports and exports amounted to 419.5 billion yuan, a year-on-year increase of 46.5%

Finally, a story about PSC member Li Zhanshu, who chairs the NPCSC, leading a central investigation team to Shaanxi to assess the implementation of the law on the prevention and control of environmental pollution.

Page 2: Just one story to highlight. Officials from the State Administration for Market Regulation, together with the Central Cyberspace Administration of China, and the State Administration of Taxation met with representatives of 34 tech companies, reading them the riot act.

PD says that “the meeting clearly stated that Internet platform companies should respect and abide by the rules, complete rectification within a time limit, and establish a new order for the platform economy.” The time limit given is one month, after which they must all disclose to the public their compliance with the laws and accept supervision. 

Here’s more: “Platform enterprises should grasp the right direction, enhance the sense of responsibility, adhere to the priority of national interests, adhere to the operation of the law and regulations, adhere to fulfill social responsibility, to achieve five strict preventions and five ensures.” These are:

  • strictly prevent the disorderly expansion of capital to ensure economic and social security; 

  • strictly prevent monopoly to ensure fair market competition; 

  • strictly prevent technology strangulation to ensure innovation

  • strictly prevent the abuse of algorithms that can infringe people’s legal rights

  • strictly prevent the use of closed systems to ensure development of open and shared ecosystems 

The PD report talks about the goal of eliminating the practice of “choose one of two,” i.e., a model whereby choices for vendors and sellers are limited as companies create walled gardens. They also argued that regulatory redlines cannot be violated and these policy changes constituted a bottom line that must be met. But it also adds that “Strengthening the governance of illegal behaviour of platform companies does not mean that the state’s attitude to support and encourage the platform economy has changed.” The objective, it says, is to adhere to the ‘two unwavering,’ i.e., create a fair and competitive market environment, continue to support private capital to carry out financial technology activities in accordance with the law.

As you can imagine, this coming immediately after the massive fine on Alibaba has led to a lot of global coverage. Let’s take a look at what some of the reports are saying:

  • FT points out that in the official statement, the regulators made it clear that they wanted to use the “cautionary case of Alibaba” to warn other companies. 

  • SCMP reports that SAMR said it would carry out follow-up checks after the rectification period and those that failed to address misconduct would be “severely” punished. 

  • It adds that “redlined behaviour included forcing merchants to pick one platform, abusing dominant market position, making hostile bids to acquire top players in specific market segments, misusing big data to charge unfair pricing to certain clients, turning a blind eye to inferior quality products, leaking customer data, as well as evading tax payments.”

  • I also recommend going through Zichen Wang’s Pekingnology newsletter. He does a really good breakdown of the official statements around this issue.

Page 3: First, let’s look at this report compiling comments from the leaders and countries in the developing world to make the case that: “wealthy countries, which account for 16% of the world’s population, have 60% of the world’s vaccines, and several developed countries have ordered two to three times their population. Some countries pursue ‘vaccine nationalism’, hoarding large amounts of novel coronavirus vaccines far exceeding their population needs and are refusing to provide them to other countries...The international community has spoken in one voice against ‘vaccine nationalism’, and at the same time it has a positive appraisal of China’s contribution to promoting the equitable distribution of global vaccines.”

Next, tensions over US-Taiwan engagement. A few days ago, the US State Department issued new guidelines to liberalise official engagements with Taiwan. On Tuesday then, the Biden administration dispatched an unofficial delegation comprising former Senator Chris Dodd and former senior State Department officials Richard Armitage and James Steinberg to Taiwan. 

PD reports that Ma Xiaoguang, a spokesperson for the Taiwan Affairs Office of the State Council, responded to the new guidelines by saying that China “firmly oppose(s) the development of official relations between the United States and Taiwan...The DPP authorities ‘relying on the United States for independence’ will surely fail.” 

China’s Foreign Ministry said: “The so-called guidelines for U.S. government interaction with Taiwan counterparts blatantly encourages U.S. government engagement with Taiwan, which severely violates the one-China principle and the three China-US joint communiqués and runs counter to the serious political commitment the US has made to China on the Taiwan question. The Taiwan question concerns China's sovereignty, territorial integrity and core interests. There is zero room for compromise and not an inch to give. We urge the U.S. side to grasp the situation, earnestly abide by the one-China principle and the three China-US joint communiqués, refrain from playing with fire, immediately stop official contact with Taiwan in any form.”

Amid all this, John Kerry, Biden’s special envoy on climate change issues, will be landing in Shanghai today. Speaking to WSJ before departing, Kerry talked about ensuring accountability, but he also said this: “We are talking to China about talking. We need, obviously, to have China at the table in order to be able to resolve this challenge...The climate issue is a free-standing issue. It’s not for trade against the other critical differences that we have with China right now...Those have got to be channeled separately. Climate is about the survival of the planet.” Kerry has been shuttling around the world for the past few weeks; this all comes ahead of Biden’s planned climate summit later this month.

Finally, Foreign Minister Wang Yi met with envoys of Cambodia, Laos, Myanmar, Vietnam and Thailand, i.e., members of the Lancang-Mekong Cooperation.

Page 9: A long essay on the Theory page by Jiang Jinquan, Director of the Central Policy Research Office, celebrating the Party’s centenary. The CPRO is the Party’s top ideology think tank. It is responsible for drafting the flagship theories of China’s top leadership. Jiang writes that:

“It is a century in which the Chinese people fundamentally changed their historical destiny, a century in which the Chinese nation ushered in a great rejuvenation, and a century in which China has made outstanding contributions to the development of all mankind. And all of this is due to the strong leadership core of our party.

The first few paragraphs thereafter focus on the historical narrative of the Party leading the country in fulfilling the desire for national survival and salvation. There’s criticism of the US for “launching” the Korean war at a time when China was poor and beginning its healing from the “wounds of war.” The Party is praised for taking the decision to enter the war. The author says that the CCP then “defeated the American aggressors and won a stable international environment for the new People's Republic.” 

He then writes that “At the same time, our party formulated a general line for the transition period. While advancing the country’s industrialization, it completed the socialist transformation of agriculture, handicrafts, and capitalist industry and commerce, led the people across the country to quickly restore production and social order, established a public ownership of the means of production, and gave full play to society.” It’s fascinating that none of these commentaries that I’ve encountered throughout the year even mention that something like the USSR existed, and that it either aided the PRC at one time or threatened it at another.

The next paragraph talks about the Party having “decisively corrected the mistakes of the ‘Cultural Revolution’, (and) insisted on focusing on economic construction” in the 1980s. This is followed by the post-18th Party Congress era, i.e., Xi’s tenure. The author talks about China’s COVID-19 containment last year and the achievement of economic goals to say that this “fully demonstrating the power of Xi Jinping’s thoughts on socialism with Chinese characteristics in the new era, the tremendous advantages of the socialist system with Chinese characteristics, and the powerful ruling ability of the Communist Party of China”

Here’s more: “Only socialism can save China, and only socialism with Chinese characteristics can develop China. Only under the leadership of our party and taking the path of socialism with Chinese characteristics can we realize the great rejuvenation of the Chinese nation. This is the conclusion of practice and the enlightenment to the world...In old China, there were frequent wars, the people's livelihood was shattered, and the people were scattered; the people of the new China are prosperous, happy, confident, and united to fight for a better life. This fundamental change occurred after our party was founded.”

In the next bit he talks about how the era of Chinese people “being bullied” is gone forever. In saying this, Jiang invokes the days when Shanghai was a Western concession with a sign placed in Huangpu Park that allegedly read “Chinese and Dogs Not Admitted.” He talks about labels of China as the “sick man of Asia,” and depictions of China as an aggressor State. The argument is that the Party’s leadership and consequent development has led to all this becoming history and a new international reputation for China and the people.

There’s also a specific paragraph focussed on Chinese democracy and human rights. It ends with this: “My country guarantees a wide range of human rights centered on the right to survival and development. The Chinese people have become the masters of their own country, and our people's democracy is more real and effective than the ‘capital democracy’ of Western countries.”

The next section talks about China’s global contributions; he argues that “China's development itself is a major contribution to the world” in the sense that it reduced global poverty, contributed to sustainable development and boosted global economic development. He then talks about China’s “selfless” engagement with developing countries, and then about the provision of “Chinese solutions for global development and governance.”

The final section is dedicated to praising the Party, such as focus on ideological and theoretical development, the willingness to struggle, ensuring self-revolution and the nature of the Party’s organisational system. “History and the people chose our party, and our party led the Chinese people to create ‘two miracles’ that are rare in the world. Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, the Chinese people will surely create new and greater miracles that will admire the world on the road to the great rejuvenation of the Chinese nation” Jiang concludes.