Tibet Commentary - Wang Yi's Nepal Visit - Doubling Down on Zero-COVID Strategy - Projecting Confidence in China's Economic Trajectory
Here are the stories and pieces that I found noteworthy from the Monday, March 28, 2022, edition of the People’s Daily.
Page 1: There’s been a fair amount of bad news when it comes to the Chinese economy of late. For instance, here’s Nomuradings Inc. revising downward the growth forecast for the April-December period.
“foreign investors have unloaded $9.5 billion of mainland Chinese stocks this month, reflecting a reassessment of geopolitical risk following the financial isolation of Russia. The outflow as of March 24, via a trading link with Hong Kong known as Stock Connect, is on pace to be the second-largest monthly drawdown since the program began in 2014.”
Then there’s this Bloomberg report discussing the impact of the current lockdowns on consumption.
“For consumers, the hit to confidence may last longer as people remain wary of traveling and shopping, and with unemployment already on the rise. “Consumption may still be subdued and only recover mildly after the outbreak is brought under control,” said Liu Peiqian, China economist at NatWest Group Plc. The services sector and tourism will find it difficult to fully revive as sustained and synchronized easing of travel policies is unlikely, she added. Goldman Sachs Group Inc. estimates that districts designated middle- and high-risk virus areas — meaning they’re facing some form of restriction — now exceed 30% of China’s gross domestic product. If a four-week lockdown was imposed in these areas, annual GDP would be reduced by 1 percentage point, the bank’s economists including Hui Shan wrote in a note Wednesday.”
Of course, there’s been little good news when it comes to the property sector. Last week WSJ reported that:
“In the past week, six developers, including the major international borrowers China Evergrande Group and Kaisa Group Holdings Ltd., said they couldn’t publish audited annual results by Hong Kong’s March 31 deadline, with some blaming pandemic-related problems as one reason for the delay. Others have recently parted company with the accountancy firms that previously audited their books.”
I am sharing this long preamble because one of the lead stories on PD’s front page today is about injecting a sense of confidence with regard to China’s economy. The piece basically talks about the policy direction outlined in the Government Work Report, the work that is being done keeping that in mind, and it draws data from the Jan-Feb period. It’s remarkable in that it does not talk about any of the disruptions that the economy has faced since the end of February owing to COVID and the Russian invasion of Ukraine.
Anyway, the article starts by saying:
“since the beginning of this year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, all localities and government departments have stepped up the implementation of macro policies, adopted a proactive fiscal policy to improve efficiency, and adopted a prudent monetary policy that is flexible and appropriate, and made efforts to stabilise the overall macroeconomic market. China’s total import and export value increased by 13.3% year-on-year, investment in fixed assets increased by 12.2% year-on-year, and total retail sales of consumer goods increased by 6.7% year-on-year. The national economy has continued to recover steadily and new progress has been made in high-quality development.” 今年以来，在以习近平同志为核心的党中央坚强领导下，各地区各部门加大宏观政策实施力度，积极的财政政策提升效能，稳健的货币政策灵活适度，着力稳定宏观经济大盘。前2月，我国进出口总值同比增长13.3%，固定资产投资同比增长12.2%，社会消费品零售总额同比增长6.7%，国民经济持续稳定恢复，高质量发展取得新进展.
The piece says that enterprises have felt a sense of gain owing to these policies. Some more policy expectations for the year are listed in the piece. These are not new. For instance, the piece talks about tax cuts and rebates, VAT refunds, increases in central government transfer funds to local governments, potentially greater lending for MSMEs, etc.
It then says that the GWR this year called for fiscal, taxation, financial and other policies to give priority to employment, and give more support to enterprises in stabilising and expanding employment. In this context, “Henan has implemented the vocational skill subsidy and skill appraisal subsidy policy; Guangdong has continued to implement the policy of reducing unemployment insurance and industrial injury insurance rates in stages; and Zhejiang has upgraded the normalised working mechanism with regard to financing in the employment insurance market…” 河南落实职业技能补贴和技能鉴定补贴政策，广东延续实施阶段性降低失业保险、工伤保险费率政策，浙江升级保就业保市场主体融资常态化工作机制……各地落实落细稳就业举措，全力稳住经济基本盘.
Towards the end, the piece talks about a thriving demand and supply situation.
“In the first two months of this year, the added value of industrial enterprises above designated size increased by 7.5% year-on-year; electricity consumption of the whole society increased by 5.8% year-on-year; and the business volume of express service enterprises increased by 19.6% year-on-year…In February, China's manufacturing purchasing Managers' index, non-manufacturing business activity index and composite PMI output index were 50.2%, 51.6% and 51.2%, respectively, remaining in the expansion range. ‘After the Spring Festival, manufacturing activities have gradually returned to normal. Recently, relevant departments have issued a series of policies and measures to promote the steady growth of the industrial economy, and the enterprise market is expected to further improve,’ said Zhao Qinghe, from the National Bureau of Statistics.” 2月份，我国制造业采购经理指数、非制造业商务活动指数和综合PMI产出指数分别为50.2%、51.6%和51.2%，持续位于扩张区间。“春节过后，制造业生产活动逐步恢复常态，近期相关部门出台一系列促进工业经济平稳增长的政策措施，企业市场预期进一步提升。”国家统计局服务业调查中心高级统计师赵庆河说，一系列数据传递出中国经济稳健开局的势头.
Next, there’s a commentary marking the 63rd anniversary of “democratic reform” of Tibet or rather the anniversary of the failed Tibetan Uprising of 1959, which eventually saw the Dalai Lama taking refuge in India. The commentary says that:
“The democratic reform completely abolished the feudal serfdom under theocracy and brought about fundamental changes in Tibet’s social system, with millions of serfs becoming masters of the state and society. This epoch-making change in the history of social progress and human rights development in Tibet has achieved a great leap from feudal serfdom to socialism in Tibet, effectively promoted the development of social productive forces in Tibet and opened up the correct path for Tibet's modernization drive.” 民主改革彻底废除了政教合一的封建农奴制，使西藏社会制度发生了根本性变化，百万农奴成为国家和社会的主人。这一西藏社会进步和人权发展史上划时代的重大变革，实现了西藏由封建农奴制度向社会主义制度的伟大跨越，有效促进了西藏社会生产力的发展，为西藏的现代化建设开辟了正确道路.
The next paragraph says that “under the strong leadership of the CPC Central Committee and the strong support of the people all over the country, cadres and masses of all ethnic groups in Tibet have worked hard and tenaciously, achieved all-round economic and social development, greatly improved people’s lives, and both urban and rural areas have changed dramatically…” It talks about Tibet becoming moderately prosperous along with the rest of China.
Then it says that “Tibet's 63-year great leap fully shows that democratic reform conforms to the requirements of the times, the fundamental aspirations of the people of all ethnic groups in Tibet and the actual needs of social development in Tibet, which is a historical necessity. It is only because of democratic reform that Tibet has achieved historical changes in its social system, it has developed with the times, and ensured a happy and beautiful new life for people of all ethnic groups in Tibet while guaranteeing the rights of all ethnic groups in Tibet. Practice has fully proved that only by persisting in safeguarding the unity and territorial integrity of the motherland can the fundamental interests of the people of all ethnic groups in Tibet be guaranteed. Only by adhering to the leadership of the Communist Party of China, the socialist system with Chinese characteristics and the system of regional ethnic autonomy can we provide a fundamental guarantee for Tibet’s long-term stability and prosperity. Only by persisting in reform and opening up can Tibet’s overall economic and social progress be promoted; only by adhering to the people-centered development thought can we satisfy the yearning of people of all ethnic groups in Tibet for a better life; only by adhering to the Party's strategy of governing Tibet in the new era can we build a new socialist modern Tibet that is united, affluent, civilised, harmonious and beautiful.” 西藏63年的伟大跨越，充分说明民主改革顺应时代发展要求，符合西藏各族人民的根本愿望，契合西藏社会发展的实际需要，是历史的必然。正是有了民主改革，才有了西藏社会制度的历史性变迁，才有了西藏与时俱进的发展，才有了西藏各族人民幸福美好新生活，才有了西藏各族人民权利的充分保障。实践充分证明，只有坚持维护祖国统一、领土完整，才能保障西藏各族人民的根本利益；只有坚持中国共产党领导、中国特色社会主义制度、民族区域自治制度，才能为西藏长治久安和繁荣发展提供根本保证；只有坚持改革开放，才能推动西藏经济社会全面进步；只有坚持以人民为中心的发展思想，才能满足西藏各族群众对美好生活的向往；只有坚持新时代党的治藏方略，才能建设团结富裕文明和谐美丽的社会主义现代化新西藏.
The next bit says that “the world is currently experiencing profound changes unseen in a century and China is in a critical period of realising the great rejuvenation of the Chinese nation. The new journey of building a comprehensively socialist modern country has started, and Tibet's economic and social development is also standing at a new historical starting point. To forge ahead in a new journey and make contributions in a new era, we should adhere to the guidance of Xi Jinping Thought on socialism with Chinese characteristics for a new era, profoundly understand the decisive significance of ‘Two Establishments’, strengthen the ‘four consciousnesses’, strengthen the ‘four self-confidences’ and achieve the ‘two safeguards’, fully implement the Party’s strategy of governing Tibet in the new era, adhere to the general tone of making steady progress, and fully, accurately and comprehensively implement the new development concept based on the new development stage; strengthen the construction of border areas…” 当今世界正经历百年未有之大变局，我国正处于实现中华民族伟大复兴的关键时期，全面建设社会主义现代化国家新征程已经开启，西藏经济社会发展也站在新的历史起点上。奋进新征程、建功新时代，要坚持以习近平新时代中国特色社会主义思想为指导，深刻领会“两个确立”的决定性意义，增强“四个意识”、坚定“四个自信”、做到“两个维护”，全面贯彻新时代党的治藏方略，坚持稳中求进工作总基调，立足新发展阶段，完整、准确、全面贯彻新发展理念，服务和融入新发展格局，推动高质量发展，加强边境地区建设，抓好稳定、发展、生态、强边四件大事，在推动青藏高原生态保护和可持续发展上不断取得新成就，奋力谱写雪域高原长治久安和高质量发展新篇章.
Third, there’s a piece about the importance of having the Party’s flag fluttering strong at the grassroots level. This basically talks about the importance of Party-building and the Party leading developments related to rural revitalisation. It says:
“Since the 18th Party Congress, the CPC Central Committee with Comrade Xi Jinping as the core has demonstrated great foresight. With firm determination and indomitable will, it has extended its full and strict self-governance to the grassroots level, focussed on improving organisational strength, given priority to its political functions, consolidated the basic units of the Party’s organisational system, strengthened important ties that connect and serve the people, and smoothly implemented the ‘last mile’ of the CPC Central Committee's decision-making arrangements. Grassroots party organizations are stronger in their revolutionary forging, and the Party’s flag is flying high at the grassroots level.”党的十八大以来，以习近平同志为核心的党中央高瞻远瞩、深谋远虑，以坚定决心、顽强意志推进全面从严治党向基层延伸，以提升组织力为重点，突出政治功能，夯实党的组织体系的基本单元，织密联系服务群众的重要纽带，畅通贯彻落实党中央决策部署的“最后一公里”，基层党组织在革命性锻造中更加坚强，党旗始终在基层一线高高飘扬.
The piece then briefly outlines the work done to strengthen political, organisation and system construction.
Next, there’s a piece about the 20th Party Congress recommendation and nomination work in Hainan.
The piece quotes Wu Mujun, Deputy Director of the Organization Department of Hainan Provincial Party Committee, as saying that in the process of nomination of candidates the focus has been on individuals who have performed well in dealing with “urgent and difficult tasks” those who have done well in “difficult environments such as accelerating the construction of the Hainan Free Trade Port, implementing the major national development strategies, fighting the three major battles, and preventing and controlling the COVID-19 epidemic…” 海南省委组织部副部长、省委两新组织工委书记吴慕君表示，海南注重发扬党内民主，充分考虑代表人选的先进性和广泛代表性，生产和工作第一线代表人选要充分体现海南自贸港特色，注重推选那些在加快推进海南自贸港建设、实施国家重大发展战略、打好三大攻坚战、新冠肺炎疫情防控等急难险重任务和艰苦环境中表现突出的优秀共产党员，以及近年来党内表彰和各类综合表彰活动中被表彰或授予荣誉称号的先进模范党员，做到好中选优.
As of now, Hainan has successfully completed the recommendation and nomination of candidates for the 20th Party Congress, with 150 candidates recommended and nominated by all recommendation units in the province, and 89 front-line Party members in production and work. ‘The candidates that have been chosen have a reasonable structure and wide distribution in terms of representation, which meets the requirements put forward by the Central Committee. More than 95% of the recommended candidates have won awards at or above the provincial and ministerial levels. This has laid a solid foundation for the election during the 20th Party Congress,’ Wu Jun said.
Page 2: First, there’s a brief feature story drawing from the new 14th Five-Year Plan for the Development of New Energy Storage.
The piece says that “generally speaking, new energy storage refers to new energy storage technologies except pumped storage. This includes new lithium ion batteries, liquid flow batteries, flywheel energy storage, compressed air, hydrogen (ammonia) energy storage, thermal (cold) energy storage, etc.” 通常来说，新型储能是指除抽水蓄能以外的新型储能技术，包括新型锂离子电池、液流电池、飞轮、压缩空气、氢（氨）储能、热（冷）储能等.
I struggled with this article. I don’t have a good enough understanding of the sector to do a thorough summation of the piece. Anyway, I think this Bloomberg report is helpful in understanding what the plan entails. It says:
“The country aims to cut the cost of electrochemical energy storage systems by 30% by 2025, according to a five-year plan released by the National Development and Reform Commission and the National Energy Administration. The two agencies also plan to complete the commercialization of new-type energy storage systems --meaning all technologies except pumped hydro -- by 2030. Last July, they had announced a target to install 30 gigawatts of new-type energy storage capacity by 2025. The country will seek breakthroughs in long-duration storage technologies such as compressed air, hydrogen, and thermal energy, and aim for self-reliance in key fields, the plan outlines. It will conduct pilot programs using various technologies to meet different storage duration requirements, lasting from minutes to months, the plan said. China will promote storage technologies and green hydrogen production in accordance with a massive wind and solar capacity build-out in desert areas, so as to allow exports of large-scale clean energy to other regions, the plan said. The country will also explore storage technologies for power produced by offshore wind farms, so as to reduce transmission capacity needs and improve the utilisation rate of the electricity generated.”
Next, a report on COVID control measures in Hunan. The story begins by telling us that on March 26, a middle school teacher in Changsha tested positive, and within a day some 1,266 people who formed either close contacts, secondary contacts or potential close contacts and those nearby were tested. All of them tested negative. The article then talks about pandemic control measures being adopted in Changsha. None of this sounds like any easing of the zero-COVID approach. In fact, the last paragraph says that the key leaders from the Hunan Provincial Party Committee have stated that “the prevention and control of the epidemic should be taken as the top priority at present.”
Third, a short report about the SAMR issuing the details of the National Pilot Program for Innovation in the Protection of Trade Secrets. The report says that the plan calls for selecting 15-20 specific regions to carry out the trials, which will last for three years, starting from July 2022.
The plan proposes 6 main tasks:
Strengthen the innovation of trade secret protection system
Improve the working mechanism of trade secret protection
Strengthen the supervision and regulatory enforcement regarding trade secret protection
Improve the trade secret protection service guarantee system
Seek conformity with the high-quality international economic and trade rules
Create a good atmosphere for protecting trade secrets
Finally, a report informing us that more than 5,800 cases involving violations of the Communist Party of China eight point regulations on improving Party conduct were investigated in February. A total of 9,100 people were reprimanded, educated or penalized last month, according to a monthly report from the CPC Central Commission for Discipline Inspection and the National Supervisory Commission. About half of the cases involved bureaucratism and the practice of formality for formality's sake, and the other half related to hedonism and extravagance.
Page 3: Just two pieces to note. First, there’s a Zhong Sheng commentary lashing out at those who are critical of China’s pandemic control policies.
Quick thought: This is an interesting article. Clearly the current Omicron outbreak is testing the established policy, and there are concerns related to the economic and even health impact — in terms of treatment of other illnesses — of sticking to a zero-COVID approach. This is not just being expressed by those outside China. For instance, check out this piece from The Guardian from last week. So while the objects of anger in this Zhong Sheng article are unnamed American media outlets and politicians, I wouldn’t read this piece as essentially pushing back against the American or foreign critics. Rather, to me, this is a warning to the domestic critics of the current policy. The net effect of the article is that it paints those critical of or calling for a shift in the zero-COVID policy at home as people colluding with anti-China forces.
The Omicron variant is spreading rapidly around the world. While lamenting that ‘1,200 Americans are still dying of the virus every day’ and worrying about ‘another outbreak in the United States’, some US media have called the outbreak in the Chinese mainland and Hong Kong a ‘rout’, trying to discredit China’s anti-epidemic policy and its effectiveness, and even attempting to discredit China’s political system. Such narrow-minded and insidious rhetoric, in essence, disregards facts, confuses black and white, and instrumentalizes and weaponizes the pandemic challenge faced by mankind in order to achieve ulterior political goals.” 新冠病毒奥密克戎变异株正在全球快速蔓延。个别美国媒体近日在哀叹“每天仍有1200名美国人死于病毒”、担心“美国会再次出现暴发”的同时，却阴阳怪气地将中国内地和香港发生疫情称为“溃败”，极力抹黑中国抗疫政策和成效，甚至妄图诋毁中国政治体制。这种狭隘、阴险的论调，究其本质，是罔顾事实，颠倒黑白，将人类共同面临的疫情挑战工具化、武器化，以达到其不可告人的政治目的.
In the face of the pandemic, the Chinese government has always insisted on putting people first and life first. According to the changes of epidemic situation and the virus’ characteristics, it has formulated scientific and accurate prevention and control policies and measures to secure people’s lives and health to the maximum extent, ensure normal production and living order and ensure the safety of the industrial chain and supply chain. China’s economic development and epidemic prevention and control remain at the forefront of the world, which fully reflects China’s capabilities to prevent and control the pandemic, and fully demonstrates the remarkable advantages of the CPC’s leadership and the socialist system with Chinese characteristics. On the other hand, the United States, the world’s number one economy, has advanced medical resources, but the pandemic situation has rebounded seriously again and again. Many indicators, such as newly confirmed cases, hospitalisations and infection among children have reached record highs, and COVID-19-related deaths are close to 1 million. The unscientific, unequal and irresponsible epidemic prevention and control by the US government, the indiscriminate spread of partisan bias and false information have seriously damaged the credibility of the US government and the right to life and health of the American people, resulting in the American people losing trust in the government. In the battle against the pandemic, it is self-evident who has performed better. 面对世纪疫情，中国政府始终坚持人民至上、生命至上，根据疫情形势变化和病毒特点，制定科学精准的防控政策措施，最大限度保障人民生命健康，保障正常生产生活秩序，保障产业链供应链安全。中国经济发展和疫情防控保持全球领先地位，充分体现了中国防控疫情的强大能力，充分彰显了中国共产党领导和中国特色社会主义制度的显著优势。反观世界头号经济体美国，拥有先进医疗资源，疫情却一再严重反弹，新增确诊病例、住院病例、儿童感染病例等多项疫情指标屡创新高，新冠肺炎死亡病例接近100万例。美国政府不科学、不平等、不担当的疫情防控，政党偏见与虚假信息的肆意传播，严重损害美国政府的公信力，严重损害了美国人民的生命权和健康权，导致“美国民众对政府的信任已然破产”。在抗疫战场上，谁是优等生，谁是差等生，不言自明。
The next paragraph defends the epidemic control policies implemented in Hong Kong. And then the article says that American media outlets’ call for doing away with the dynamic zero-COVID policies and calling for a policy of coexistence with the virus can be seen as being driven by “ulterior motives” 居心叵测.
It further adds:
“China's anti-epidemic experience fully shows that the ‘dynamic zero-COVID’ policy is scientific, necessary, effective and feasible, and it is the line of defense that a country with a population of more than 1.4 billion must hold at present. It is reflective of the responsibility of a highly responsible government and society, the best practice of the concept of putting people first and life first, and the greatest contribution to global anti-epidemic response.” 中国的抗疫实践充分表明，“动态清零”科学必要、有效可行，是14亿多人口大国当前务必守住的疫情防线，是一个高度负责的政府和社会的应有担当，是对人民至上、生命至上理念最好的践行，也是对全球抗疫的最大贡献.
Next, there’s a report about Wang Yi’s Nepal visit. This one talks about Wang’s meeting with Nepali President Bidya Devi Bhandari. Xinhua reports:
“For his part, Wang said China and Nepal are good friends and good partners, with friendship dating back over a thousand years. Both sides have been supporting and helping each other, becoming a model for equal treatment, mutual respect and win-win cooperation between countries of different sizes. The Chinese side cherishes the traditional friendship between China and Nepal, and will continue to support Nepal in safeguarding its independence, sovereignty and national dignity, exploring a development path suited to its own interests, and pursuing independent domestic and foreign policies, Wang said. China stands ready to work with the Nepali side to deepen bilateral friendship, and continue to firmly support each other in safeguarding their core interests, Wang said. Bhandari said her country never approves the slanders by certain international forces against both China and the Communist Party of China, and it wishes and firmly believes that China's path and the China model will achieve greater success. Wang said the Chinese side is happy to see that friendship with China has become a social consensus going beyond parties and different party factions in Nepal. The Chinese side is willing to strengthen exchanges with Nepal's political parties and different party factions on state governance experience, and join hands to push forward the cause of promoting democracy and human rights for mankind, Wang said.”
Wang also met with Nepali Prime Minister Sher Bahadur Deuba. Xinhua reports:
“Deuba stressed that Nepal will continue to firmly adhere to the one-China policy and will never allow any forces to use the Nepali territory to engage in any anti-China activities. Wang said China appreciated that and is ready to continue standing firmly with Nepal on issues involving each other's core interests and major concerns. China will work with Nepal to safeguard the principle of non-interference in internal affairs and the basic norms governing international relations, resist unilateralism and oppose power politics, and contribute to regional peace and stability, Wang said. Wang said China and Nepal have always supported, trusted and helped each other. The traditional friendship between the two countries has been enhanced through their joint fight against the earthquake and COVID-19, and their win-win cooperation has witnessed continuous and effective progress. China-Nepal relations have become an example of equal treatment and win-win cooperation between countries large and small, and a demonstration of China's practice of the good-neighborly diplomacy, Wang said. China will continue to firmly support Nepal in safeguarding national sovereignty and dignity, exploring a development path suited to its national conditions and pursuing independent domestic and foreign policies, Wang said.”
During this visit, China and Nepal signed 9 agreements. I also recommend reading this piece from The Kathmandu Post.
Page 11: A short report informing us that the China Banking and Insurance Regulatory Commission has imposed penalties worth 87.6 million yuan on 21 banking institutions in the country for data quality violations. The violations include omissions, misreporting or partial reporting of data.
Page 12: One report, which highlights the structural problem that China’s economic model continues to struggle with, i.e., wasteful investment. The report talks about a new guideline in Ganzhou City, Jiangxi Province, imposing controls over the kinds of projects and scale of project investments for SoEs. So the regulation says that the implementation of “performance projects” (to bolster an official’s reputation) and “image-building projects” such as ‘digging lakes for landscape purposes’, ‘moving stones for landscaping’ and ‘excessive landscape lighting’ are prohibited in the city, and investment exceeding the estimated budget, design exceeding the standard, construction exceeding the scale are prohibited.