Understanding China's Economic Development Trend - Xi's New Qiushi Article - Zhong Yin Commentary on COVID Policy Shift - 45 Advanced Mfg Clusters - ICFA's Karnataka Chapter & CCP Influence
Here are the stories and pieces that I found noteworthy in the Friday, December 16, 2022, edition of the People’s Daily
Page 1: The lead story on the page is on Xi’s speech at the COP15 meeting on biological diversity. Xi made four points (English speech):
“We need to build global consensus on biodiversity protection, jointly work for the conclusion of the Post-2020 Global Biodiversity Framework, and identify targets and pathways for global biodiversity protection.
We need to push forward the global process of biodiversity protection, turn ambitions into action, support developing countries in capacity-building, and coordinate efforts to address climate change, biodiversity loss and other global challenges.
We need to promote green development through biodiversity protection, speed up the green transition of development modes and lifestyle, and leverage the Global Development Initiative (GDI) to deliver greater benefits to people of all countries.
We need to uphold a fair and equitable global order on biodiversity protection, firmly defend true multilateralism, firmly support the UN-centered international system and the international order underpinned by international law, and form strong synergy for protecting the Earth, our common homeland.”
He added that China would “respond to the Action Plan for the UN Decade on Ecosystem Restoration, and launch a large number of key projects on biodiversity protection and restoration.” Also, he said that China would do its “best to provide support and assistance to fellow developing countries through the Belt and Road Initiative International Green Development Coalition (BRIGC) and the Kunming Biodiversity Fund.”
At the top of the page is a report on Qiushi publishing Xi’s comments during the PBSC’s visit to Yan’an after the 20th Party Congress. Xi had talked about the Party’s fine revolutionary traditions and conduct and promoting the Yan’an Spirit. You can read my breakdown of that visit from October here. The PD report says that as per Xi’s article:
the 7th Party Congress was “an important milestone in the history of the Party. It marked the maturity of the Party in politics, ideology and organisation, and pointed out the correct direction and opened up the correct path for the party to move from victory to victory. The Yan’an Revolutionary Site has witnessed the glorious course of the Party leading the Chinese revolution and exploring the modernisation of Marxism in China. It is a book that can never be finished.” 文章强调，党的七大在党的历史上具有重要里程碑意义，标志着我们党在政治上思想上组织上走向了成熟，为党后来不断从胜利走向胜利指明了正确方向、开辟了正确道路。延安革命旧址见证了我们党在延安时期领导中国革命、探索马克思主义中国化时代化的光辉历程，是一本永远读不完的书.
Talking about Yan’an being a “sacred site,” Xi said that the new central leadership after the 20th Party Congress “will carry forward the fine revolutionary tradition and work style developed by the Party during the Yan’an period and carry forward the Yan’an spirit.” 这次和中央政治局常委同志一起来，就是要宣示新一届中央领导集体将继承和发扬延安时期党形成的优良革命传统和作风，弘扬延安精神.
The article then says that as per Xi, the Yan’an spirit and the work style was established through maintaining “firm and correct political direction, the ideological line of emancipating the mind and seeking truth from facts, the fundamental purpose of serving the people wholeheartedly, and the pioneering spirit of self-reliance and hard work.” He says that the glorious traditions and fine conduct of revolutionaries of the older generation and Chinese Communists is “precious spiritual wealth” that must be carried forward. 文章指出，在延安时期形成和发扬的光荣传统和优良作风，培育形成的以坚定正确的政治方向、解放思想实事求是的思想路线、全心全意为人民服务的根本宗旨、自力更生艰苦奋斗的创业精神为主要内容的延安精神，是党的宝贵精神财富，要代代传承下去.
The article says that “firm and correct political direction is the essence of the Yan’an spirit. All comrades should adhere to the correct political direction, resolutely implement the Party’s basic theory, basic line and basic strategy, resolutely implement the decision-making arrangements of the CPC Central Committee, and continue to push forward the great cause pioneered by the older generation of revolutionaries. We must stand firm on the people’s stand, practise the Party’s purpose, implement the Party’s mass line, maintain the flesh-and-blood ties between the Party and the people, consciously integrate the people-centred development philosophy into all work, solidly promote common prosperity, and make the achievements of modernisation more fair and beneficial to all people. We should vigorously carry forward the spirit of self-reliance and hard work. Irrespective of how rich our material life is in the future, the spirit of self-reliance and hard work must not be lost. We should stay grounded, work hard, concentrate on managing our own affairs well, and ensure the development of the country and the nation on the basis of our own strength. We must inherit and carry forward the glorious tradition and fine style of work left by the older generation of revolutionaries and communists, bravely promote the self-revolution of the party, unswervingly promote comprehensive and strict party governance, always maintain the Party’s advanced nature and purity, and ensure that the Party always remains the strong core of leadership for the cause of socialism with Chinese characteristics. It is necessary to carry forward the spirit of struggle, improve the ability to fight, resolutely overcome various difficulties and challenges on the way forward, and rely on tenacious struggle to open up new horizons.” 文章指出，坚定正确的政治方向是延安精神的精髓。全党同志要坚持正确政治方向，坚决贯彻党的基本理论、基本路线、基本方略，坚决落实党中央决策部署，把老一辈革命家开创的伟大事业继续推向前进。要站稳人民立场，践行党的宗旨，贯彻党的群众路线，保持党同人民群众的血肉联系，自觉把以人民为中心的发展思想贯穿到各项工作之中，扎实推进共同富裕，让现代化建设成果更多更公平惠及全体人民。要大力弘扬自力更生、艰苦奋斗精神，无论我们将来物质生活多么丰富，自力更生、艰苦奋斗的精神一定不能丢，脚踏实地、苦干实干，集中精力办好自己的事情，把国家和民族发展放在自己力量的基点上。要把老一辈革命家和共产党人留下的光荣传统和优良作风传承好发扬好，勇于推进党的自我革命，坚定不移推进全面从严治党，始终保持党的先进性和纯洁性，确保党始终成为中国特色社会主义事业的坚强领导核心。要发扬斗争精神、提高斗争本领，坚决战胜前进道路上的各种困难和挑战，依靠顽强斗争打开事业发展新天地.
He ends by saying that the 20th Party Congress has put together the blueprint for the future, “for comprehensively promoting the great rejuvenation of the Chinese nation through Chinese-style modernisation.”
Third, there’s a long, long article on understanding the trends in China’s economic development. This is basically a continuation of the positive messaging on the economy. But there are some points mentioned that are worth noting. Therefore, I am doing a deep dive into the piece.
The argument is that despite the challenges of the year, work has been done to “consolidate the recovery trend.” The focus going forward, the article argues, will be “high-quality development.” The article argues that it is important to “use Xi Jinping Economic Thought as a guide to embrace a brighter future while promoting high-quality development.” 读懂中国经济，把握中国经济发展大势，就必须以习近平经济思想为指导，在推动高质量发展中，迎接更加壮阔的光明前程.
It says that “the CPC Central Committee with comrade Xi Jinping at the core has a profound insight into the general situation at home and abroad, and put forward the clear requirements of ‘preventing the epidemic, stabilising the economy, and ensuring secure development’, adhered to the principle of making progress while maintaining stability, and led the great ship of the Chinese economy to forge ahead along the path of high-quality development. The economy declined significantly in the early part of the second quarter; this downward trend was reversed in the later part of the quarter. In the third quarter, the overall recovery was good, and in the fourth quarter, we have seized the window of opportunity to further promote the economic recovery and upward … In the face of internal and external shocks, the Chinese economy has recovered in a relatively short period of time, showing strong resilience and great potential.” 以同志为核心的党中央深刻洞察国际国内大局大势，提出“疫情要防住、经济要稳住、发展要安全”的明确要求，始终坚持稳字当头、稳中求进，引领中国经济这艘大船沿着高质量发展航道破浪向前、行稳致远。二季度前期经济明显下滑、后期扭转下滑态势，三季度总体恢复向好，四季度抓住窗口期推动经济进一步回稳向上……面对内外部阶段性、突发性因素冲击，中国经济在较短时间内实现恢复回升，展现出强大韧性和巨大潜力.
The piece talks about the December 6 Politburo meeting, which discussed the economy. It says that Xi had then called for “promoting the overall improvement of economic operation, achieving effective improvement in quality and reasonable growth in quantity, and making a good start for building a modern socialist country in all respects.” 12月6日，习近平总书记主持召开中共中央政治局会议，分析研究2023年经济工作，强调“推动经济运行整体好转，实现质的有效提升和量的合理增长，为全面建设社会主义现代化国家开好局起好步”.
The piece adds that people are now optimistic that “with the gradual and orderly implementation of a series of effective measures in the near future, China's economic vitality will be effectively restored and the growth rate will continue to pick up.” 市场各方普遍预计，随着近期一系列有效措施的逐步有序推进落实，中国经济活力将会有效恢复、增速将会持续回升.
The article then again emphasises the need to move away from GDP growth as a measure of success. GDP and its growth rate are often used to measure the overall economic strength and level of an economy. From an economic point of view, GDP as a quantitative indicator does not fully reflect the quality, efficiency, and well-being of people's livelihood brought about by economic activities. ‘No longer should we simply judge heroes based on GDP growth rate,’ ‘Never sacrifice the environment for temporary economic growth’...” It adds that the economy has entered a new era and Xi has “put forward a series of new ideas, new ideas and new strategies, which formed Xi Jinping Economic Thought.” This thought addresses “major theoretical and practical issues are the fundamental principles and guidelines for doing economic work well in the new era.” GDP及其增速，常常用来衡量一个经济体的综合经济实力和水平。从经济学角度来看，作为数量指标的GDP，并未能全面反映经济活动的质量、效率以及所带来的民生福祉。“不再简单以国内生产总值增长率论英雄”“决不以牺牲环境为代价去换取一时的经济增长”“速度再快一点，非不能也，而不为也”……中国经济步入新时代，敏锐把握发展之变，习近平总书记提出一系列新理念新思想新战略，在实践中形成了习近平经济思想，系统回答了新时代中国经济“怎么看”“怎么干”等重大理论和实践问题，是新时代做好经济工作的根本遵循和行动指南.
After this, there’s a big pitch for high-quality development, although we still get GDP data used as the measure to make the case that China has grown much faster than developed countries over the past decade. We then get a quote from Chen Wenling, China Center for International Economic Exchanges, saying that the key aspect to note is “whether economic growth can bring more absolute quantity and higher quality development.” “衡量经济发展的关键在于GDP的含金量是多少，或者说经济增长是否能带来更多绝对量和更高质量的发展。”中国国际经济交流中心总经济师陈文玲说.
The piece then talks about innovation-driven development and China’s focus on science and technology, and the “three new’s” economy, i.e., new industries, new formats, and new business models. This accounts for 17.3% of GDP.
The article adds that “employment, income, education, medical care, environment... Although they cannot be completely included within the statistical scope of GDP, they are all closely related to people's livelihood and well-being.” 就业、收入、教育、医疗、环境……虽无法完整纳入GDP的统计范畴，但无一不与民生福祉密切相关.
“From 2012 to 2021, the per capita disposable income of the national residents actually increased by 6.6% per year, and the income growth of residents basically kept pace with the economic growth; basic medical insurance covers 1.36 billion people, and the basic old-age insurance covers over 1 billion people, establishing the largest social security net in the world. Since the outbreak of the pandemic, China has continuously taken stabilising employment, stabilising prices and protecting people's livelihood as the bottom line that must be maintained. Despite the downward pressure on the economy, the policy of stabilising employment continued to exert its strength. In the first 11 months of this year, 11.45 million new urban jobs were created, and the annual target of 11 million jobs has been achieved. While inflationary pressure around the world is high, China's price situation has remained generally stable. In the first 11 months, the consumer price index rose by 2% year on year. The human development index put forward by the United Nations Development Program is measured by such indicators as ‘life expectancy’, ‘years of education’ and ‘gross national income per capita’, which pays more attention to people's sense of gain in economic and social development. In 2020 and 2021, the global human development index showed a recorded decline for two consecutive years, while in 2021, China rose six places in the ranking of this index compared with 2019. 2012年至2021年，全国居民人均可支配收入年均实际增长6.6%，居民收入增长与经济增长基本同步；基本医疗保险覆盖13.6亿人，基本养老保险覆盖超10亿人，形成全球最大的社会保障网。疫情暴发以来，中国持续把稳就业、稳物价、保民生作为必须守好的底线。尽管经济下行压力较大，稳就业政策持续发力，今年前11个月，城镇新增就业1145万人，完成1100万人的全年目标任务。全球通胀压力高企，中国物价形势保持总体稳定，前11个月全国居民消费价格指数同比上涨2%。联合国开发计划署提出的人类发展指数，以“预期寿命”“受教育年限”“人均国民总收入”等指标来衡量，更加侧重人们在经济社会发展中的获得感。2020年和2021年，全球人类发展指数连续两年出现有记录以来的下降，而2021年中国在这一指数的排行榜上较2019年提升了6位.
The second section of the article deals with the pandemic situation. This basically praises China’s containment and now opening policies. It says that China has had the least number of deaths among major countries in the world; life expectancy has risen in China; its economy has recovered and has made steady progress; grain output, energy supply and prices has been kept stable; delivery volumes and container throughput have all risen sharply, etc.
The third section says that China’s economic outlook is bright going forward. Some useful excerpts:
Airbus predicts that from 2022 to 2041, the Chinese market will require 8,420 passenger and cargo aircraft, accounting for more than 20% of the global total demand.
“Since the beginning of this year, on the basis of last year's high base, China has continued to maintain a double-digit growth rate in attracting foreign investment. In the first 10 months of this year, the actual use of foreign capital nationwide increased by 14.4% year-on-year; the actual use of foreign capital in the eastern, central and western regions of China increased by 12.4%, 33.6% and 26.9% year-on-year respectively.
This is very important to note:
“It is worth noting that the essential conditions that determine China's economic development have been undergoing profound changes in past 10 years: the total population is close to the peak, and the degree of ageing is deepening; the growth rate of infrastructure and real estate investment is slowing down, and the contribution of capital formation to economic growth is falling; the late-mover advantage in with regard to technological innovation is weakening and the country is entering a stage of relying more on independent innovation; resources constraints are gradually strengthening, with the old combination of production functions becoming difficult to sustain.” 值得注意的是，决定中国经济发展的要素条件近十余年来正发生深刻变化：人口总量接近峰值，老龄化程度加深；基础设施和房地产投资增速趋缓，资本形成对经济增长的贡献减少；技术创新后发优势减弱，进入更多依靠自主创新的阶段；土地、资源等约束条件逐步强化，旧的生产函数组合方式难以持续等.
“However, based on the factor conditions that determine the potential economic growth rate, after years of development and accumulation, China's talent, technology, capital and other factor resources are more abundant, providing lasting impetus for China's economy to maintain medium and high-speed growth.” 但从决定潜在经济增长率的要素条件看，经过多年发展积累，我国人才、技术、资金等要素资源更为丰富，为中国经济保持中高速增长提供持久动力
In terms of labour force, China still has a working-age population of 880 million, with an average age of 38.8. The population with university education exceeds 218 million people. In 2021, the average number of years of education received by China's working-age population increased to 10.9 years. The country also ranks first in the world in terms of the total number of R&D personnel. The accumulation of human capital in China will continue to accelerate. The demographic dividend still exists, and new advantages of the talent dividend are emerging. 从劳动力要素看，中国仍有8.8亿劳动年龄人口，人口平均年龄达38.8岁。具有大学文化程度的人口超过2.18亿人。2021年，中国劳动年龄人口平均受教育年限提高到10.9年，研发人员总量居世界首位，我国人力资本积累将继续加速，人口红利仍然存在，人才红利新的优势正在显现.
From the perspective of capital stock, China's per capita capital stock is still lower than that of developed economies, and there is still huge room for investment in areas such as building a modern infrastructure system, promoting people-centred new urbanisation, comprehensively promoting rural revitalisation, and economic and social green and low-carbon transformation. 从资本存量看，中国人均资本存量仍低于发达经济体，在构建现代化基础设施体系、推进以人为核心的新型城镇化、全面推进乡村振兴、经济社会绿色低碳转型等领域仍有巨大投资空间.
From the perspective of technological progress, China insists on maintaining innovation as the primary driving force for development. In the first half of 2022, China granted 393,000 invention patents and accepted 33,000 PCT international patent applications. By the end of June, 2022, the effective number of invention patents was 3.906 million, a year-on-year increase of 17.5%.从技术进步来看，中国坚持将创新作为引领发展的第一动力。2022年上半年，中国发明专利授权39.3万件，受理PCT国际专利申请3.3万件。截至2022年6月底，发明专利有效量为390.6万件，同比增长17.5%.
The solid material foundation accumulated over the years has supported China's economy to move forward on the road of high-quality development.” 多年积累的雄厚物质基础，支撑中国经济在高质量发展之路上不断前行.
Wang Xin, director of the Research Bureau of the People's Bank of China, says that “China has the conditions to maintain medium-to-high-speed economic growth for a relatively long period of time.”
The final section of the article talks about improving total factor productivity. In this the article talks about:
talents
technology
the new development pattern
cultivating new driving forces through deepening reform and opening up
In this, the article mentions the 强基计划 - strong foundation programme of the Ministry of Education, which was launched in 2020. This program offers top high school graduates specific education programs across top universities to study foundational subjects like mathematics, physics, chemistry, biology, etc. The aim is to cultivate high-skilled talents early. The PD piece says that these are students “who are interested in serving the country's major strategic needs and have excellent comprehensive quality.” 2022年高考，备受考生和家长关注的“强基计划”再度扩大高校试点。自2020年开始实施的“强基计划”，主要选拔有志于服务国家重大战略需求且综合素质优秀或基础学科拔尖的学生，被视为中国重视基础人才培养的重要举措.
It adds that the 20th Party Congress report discussed and together deployed the “three strategies of rejuvenating the country through science and education, strengthening the country through human resources, and innovation-driven development… (it called to) promote technological innovation to accelerate the transformation of industrialisation, focus on redressing the situation wherein core technologies, core equipment and key components are controlled by others, and seize the commanding heights of future development such as the next-generation information technology revolution. China is making every effort to transform the quality, efficiency and driving force of economic development on one new track after another in scientific and technological innovation.” 党的二十大报告中把科教兴国、人才强国、创新驱动发展三大战略放在一起集中论述、系统部署，这为持续提升全要素生产率奠定坚实基础. 推动技术革新加快向产业化转化，着力解决核心技术、核心设备和关键元器件受制于人的情况，抢占新一代信息技术革命等未来发展的制高点，在科技创新的一个又一个新赛道上，中国正全力推动经济发展质量变革、效率变革、动力变革.
“The key to improving total factor productivity is to open up the economic cycle, accelerate the construction of a new development pattern, and effectively improve the efficiency of resource factor allocation. At present, the global industrial division of the labour system and regional layout are undergoing extensive and profound adjustments. Some countries are trying to exert extreme pressure by decoupling and breaking chains, suppressing enterprises, thereby hindering China’s economic development and structural upgrading. Breaking through the choke-points of the economic cycle is not only the key to coping with challenges, but also a difficult problem that must be solved to improve total factor productivity and promote high-quality economic development. 着力提高全要素生产率，关键在于打通经济循环脉络，加快构建新发展格局，切实提升资源要素配置效率—— 当下，全球产业分工体系和区域布局正在发生广泛深刻调整，个别国家试图通过脱钩断链、打压企业等方式极限施压，阻碍我国经济发展和结构升级。打通经济循环卡点堵点，既是应对挑战的关键，也是提高全要素生产率、推动经济高质量发展必须破解的难题.
Wang Yiming, Vice Chairman of China Center for International Economic Exchanges, is quoted as saying that the goal behind supply-side structural reform is to enhance TFP. The article then references the guideline on boosting domestic consumption/demand, which I had detailed yesterday as part of the effort to combine the work of boosting demand while carrying out supply side structural reform. I think this is important to note because I had noticed a discussion on Twitter yesterday about whether this was an old document and whether it reflected current thinking. Clearly, this bit from PD today suggests that it is reflective of current policy thinking.
Here’s the relevant text: “深化供给侧结构性改革，核心目标是提升全要素生产率。我国全要素生产率与发达国家相比还存在差距，这是我国经济发展的‘质量缺口’，推动经济高质量发展需要填补这个缺口。”中国国际经济交流中心副理事长王一鸣说。根据清华大学经管学院的估算，2016年至2019年期间，由于推进供给侧结构性改革，我国全要素生产率呈现了较明显回升的态势。12月14日，中共中央、国务院印发的《扩大内需战略规划纲要（2022—2035年）》发布，对实施扩大内需战略进行长远谋划。把实施扩大内需战略同深化供给侧结构性改革有机结合，着力提升产业链供应链韧性和安全水平，着力推进城乡融合和区域协调发展，持续增强国内大循环内生动力和可靠性，提升国际循环质量和水平。
Finally on reform and opening up, the article reiterates that the 20th Party Congress report had pointed out that “we should adhere to the direction of socialist market economy reform, adhere to a high level of opening to the outside world, and speed up the construction of a new development pattern with domestic big circulation as the main body and domestic and international dual circulation promoting each other. Liu Yuanchun, president of Shanghai University of Finance and Economics, believes that the scientific and strategic measures put forward by the 20th Party Congress to further reform, further open up, further emancipate the mind and comprehensively promote the great rejuvenation of the Chinese nation through Chinese-style modernisation should be implemented step by step, so as to fully release the dividends of reform and development. ‘Make more achievements in the design of key system reforms, and enhance confidence by comprehensively deepening reforms’.” 党的二十大报告指出，坚持社会主义市场经济改革方向，坚持高水平对外开放，加快构建以国内大循环为主体、国内国际双循环相互促进的新发展格局。上海财经大学校长刘元春认为，要把党的二十大提出的进一步改革、进一步开放、进一步解放思想，以中国式现代化全面推进中华民族伟大复兴所采取的科学战略举措逐一落实，充分释放改革发展的红利。“在关键性制度改革设计上更加有所作为，通过全面深化改革提升信心.”
Three reform items are then mentioned:
Creating a fair and reasonable tax environment through reform of the fiscal and taxation systems will help improve the overall efficiency of the service and manufacturing sectors.
Through continuous optimisation of the education system, strengthening of basic research and improving human capital incentive mechanisms, the trend of total factor productivity can be changed.
Improving the business environment and strengthening incentives for property rights will help improve the efficiency of micro entities
Continuing to deepen reform and opening up and accelerate the establishment of a new development pattern will unleash lasting driving forces for high-quality economic development. 通过财税体制改革创造公平合理的税负环境，有助于服务业和制造业总体效率的提升；通过教育体系的持续优化、加强基础研究以及完善人力资本激励机制等，可以改变全要素生产率的走向；通过优化营商环境，加强产权激励，有利于提升微观主体效率……大国经济空间广阔，持续深化改革开放，加快构建新发展格局，将为经济高质量发展释放持久动能。
Finally, there’s a report telling us that the number of national-level advanced manufacturing clusters in China has expanded to 45. Yicai has an English story from a few weeks ago with these details. It says that:
There are 13 new generation IT clusters
There are 13 high-end equipment clusters
There are 7 new materials clusters
There are 5 biomedicine and high-end medical devices clusters
There are 4 clusters of consumer goods
There are 3 clusters of new energy and intelligent connected vehicles
The Yicai report added: “Of the 45 clusters, 30 are in eastern China, eight in central China, five in the west, and two in the northeast of the country. The clusters have more than 1,700 manufacturers with advanced innovative technologies, as well as over 2,200 small businesses focused on niche fields and with strong innovation ability and big market shares, the ministry’s data showed. The 45 clusters built 18 national centers for manufacturing industry innovation, equal to 70 percent of China's total.”
Page 2: A report on the fifth EU-China CEO and Former Senior Officials’ Dialogue. Xinhua reports that Liu He said: “The Chinese side is willing to expand its cooperation with the EU in the fields of economy and trade, green development, digital development, finance and technology, and jointly safeguard the multilateral trading regime with the World Trade Organization (WTO) at its core.”
It adds: “Liu noted that both sides are actively advancing the implementation of important consensus reached at the 9th High-Level Economic and Trade Dialogue, which was successfully held in July. ‘I believe that both sides have the wisdom to push forward the China-EU investment agreement, a result hard won through seven years of negotiations,’ Liu said. In terms of Chinese economy, Liu said China has great confidence that the economy will turn for the better as a whole in the next year. The country has introduced policies and is mulling new measures to improve the asset and liability situation of the real-estate sector and boost market expectation and confidence, according to Liu. He added that China's urbanization is still on a relatively fast track for a period of time in the future, which means enough demand to underpin the stable growth of the property sector.”
Brief take: This is interesting. Sounds like we are likely to see new support measures for the property sector. Already in November there was a 16-point plan that was issued. It had measures like easing lending for developers, easing down-payment thresholds and mortgage rate floors in a city-specific approach, extensions of borrowings for developers, etc. Let’s see what else is done going forward.
Reuters reports: “China's property sector shrank further in November, with falls in prices, sales and investment, partly as COVID-19 restrictions hit demand, although recent market-supportive policies and the easing of COVID curbs have burnished the outlook…New home prices fell 0.2% from October, the fourth straight decline, and by 1.6% from a year earlier, the seventh on-year drop, according to Reuters calculations based on National Bureau of Statistics (NBS) data. Property investment fell the fastest since the statistics bureau began compiling data in 2000, down 19.9% on year in November after a 16% slump in October, the NBS said in a statement. Some Chinese cities imposed lockdowns in November to quell coronavirus flare-ups, further denting already sluggish demand. Chinese authorities in recent weeks stepped up financing support for developers, the latest in a slew of steps to stimulate house purchases.”
Bloomberg reports: “New-home prices in 70 cities, excluding state-subsidized housing, slid 0.25% last month from October, when they fell 0.37%, National Bureau of Statistics figures showed Thursday. Sales dropped 31% from a year earlier, worsening from a 23% decrease in October, according to Bloomberg calculations based on official data. The declines came in a month when policy makers unveiled a sweeping plan to rescue the sector, focusing mainly on the supply side by easing financing to developers.”
Next, there’s a report on the State Council’s new 14th Five-Year Plan for logistics development. Xinhua reports:
“The plan stresses work to improve the resilience and safety of the industrial chain and supply chain, promote the construction of a modern logistics system, improve the quality, increase efficiency, and cut the costs of modern logistics. By 2025, a modern logistics system featuring supply-demand adaptation with internal and external connectivity will basically be in place, and it will be safe, efficient, smart, and green, according to the plan. The plan lists tasks in six aspects, including accelerating the integration of logistics hub resources, building major international and domestic logistics channels, improving modern logistics service network, extending the value chain of logistics services, strengthening the service guarantee of modern logistics to people's livelihood, and improving the emergency response capacity of modern logistics.”
Page 4: An article with netizen praise for the Ren Zhongping eulogy on China’s Covid policies, which I covered yesterday.
Also on the page are reports related to the election of deputies of Hong Kong to the 14th National People's Congress. Xinhua reports:
“The deputies were elected by a secret ballot at the second plenary session of the Conference for Electing Deputies of the HKSAR to the 14th NPC, which was attended by 1,273 members. The electoral conference also determined, according to the election method, the order of replacement for five other candidates, who will fill the vacancies should any of the elected deputies leave a vacant post. HKSAR Chief Executive John Lee, also standing chairman of the presidium of the electoral conference, presided over the plenary session.”
The entire list of the elected individuals is available in PD.
Page 6: From today, there’s a new Zhong Yin commentary series on China’s COVID policies.
“The key to fighting the ever-mutating novel coronavirus is science and precision. In the past three years, under the strong leadership of the Party Central Committee with comrades at the core, we have adhered to scientific prevention and control and precise policy implementation, optimised and adjusted prevention and control measures according to the time and situation, and withstood the impact of repeated rounds of outbreaks, effectively responded to the uncertainty of epidemic situation through a stable prevention and control strategy and tactical flexibility in prevention and control measures, and made significant positive achievements in overall prevention and control of the epidemic situation and economic and social development. From the decisive achievements of the situation in Wuhan and Hubei, to the successful control of the outbreaks caused by Delta variant strain, to the fight against Omicron variant, the CPC Central Committee has always placed people’s lives and health as the top priority, and adhered to border control, while conducting research, summarising and adjusting policies, taking small steps without stopping. Nine editions of prevention and control plans and diagnosis and treatment plans have been issued successively, and 20 optimization measures and new 10 optimization measures have been released in a timely manner, ensuring the scientific path and the right direction of epidemic prevention and control measures. Practice has fully proved that scientific decision-making and creative and precise response are the fundamental way to turn a crisis into an opportunity. The anti-epidemic strategy adopted over the past three years has been effective and conforms to China’s national conditions and has been tested in practice, and it was the anti-epidemic approach with the lowest comprehensive social cost.” 同持续变异的新冠病毒较量，关键就在于科学和精准。近三年来，在以同志为核心的党中央坚强领导下，我们坚持科学防治、精准施策，因时因势优化调整防控措施，顶住了一轮又一轮疫情的冲击，以防控战略的稳定性、防控措施的灵活性有效应对了疫情形势的不确定性，统筹疫情防控和经济社会发展取得重大积极成果。从取得武汉保卫战、湖北保卫战的决定性成果，到成功控制住由德尔塔变异株引发的疫情，再到迎战奥密克戎变异株……党中央始终把人民群众生命安全和身体健康放在第一位，坚持边防控、边研究、边总结、边调整，走小步、不停步，九版防控方案和诊疗方案先后印发，二十条优化措施和新十条优化措施及时出台，确保了疫情防控的科学路径、正确方向。实践充分证明，科学决策和创造性精准应对是化危为机的根本方法，近三年来的抗疫战略策略是符合我国国情、经过实践检验的有效举措，是综合社会成本最低的抗疫方案.
The next paragraph also reiterates this point, by referencing implementation measures, such as the four earlys, the four-way/four-party responsibilities, the area-based classification for lockdowns, and the call for not following a one-size-fits-all approach, etc.
The next paragraph says:
“The epidemic prevention and control work over the past three years has fully demonstrated that respecting science is an effective weapon to fight the epidemic, and seeking truth from facts is an important magic weapon to fight the epidemic. The more complicated the epidemic situation is, the more variable/fluctuating the situation is, the more we must persist in adapting to the situation and responding to changes. At present, the virus is weak and we are strong, and epidemic prevention and control is facing a new situation and new tasks. Given this, we have seized the opportunity to optimise the epidemic prevention and control policies, efficiently coordinate the epidemic prevention and control with economic and social development, and ensure greater operability and precision in prevention and control work. Irrespective of how the situation and tasks change, scientific precision is always a must. Facing the future, we should continue to uphold the scientific spirit and attitude, adhere proceeding from reality in everything, make precise policies according to actual conditions, constantly optimise and adjust prevention and control measures, and make all prevention and control work more scientific, more precise, and more effective, so as to effectively protect people’s health and safety and economic and social development.” 稳扎稳打、步步为营，因时而动、顺势而为，近三年来的疫情防控充分说明，尊重科学是抗疫的有效武器，实事求是是抗疫的重要法宝。疫情越是复杂，形势越是多变，越要坚持因时因势、以变应变。当前，病毒弱了、我们强了，疫情防控面临新形势新任务，我们抓住时机优化疫情防控政策，高效统筹疫情防控和经济社会发展，使防控更具可操作性和针对性。无论形势和任务如何变化，科学精准始终是道必答题。面向未来，我们要继续秉持科学精神、科学态度，坚持一切从实际出发，根据实际情况精准施策，不断优化调整防控措施，让各项防控工作更科学、更精准、更有温度、更富成效，切实保障好人民健康安全和经济社会发展.
The final paragraph praises China’s COVID policy for having withstood the test of time and practice.
Page 17: There’s basically a feature with articles by reporters talking about China’s foreign engagement. This is really interesting, because it covers sharing of development experiences and practices, and positive foreign perceptions of China. This has views from Desislava Doncheva, Chair of the Bulgarian Chinese Chamber for Industrial Development; an editor from Egypt talking about poverty alleviation in China and BRI projects; someone from Barbados who studied in China and was deeply influenced by Xi’s writings; and Mr. Bhaskaran from India.
I am not translating all of it, and only covering the bit about Mr. Bhaskaran, who heads the India-China Friendship Association in Karnataka, India. The article begins with the IFCA’s event in September in Bangalore, Karnataka. This was a photo exhibition which showcased the following.
“From the victory of the Chinese People’s War of Resistance Against Japanese Aggression to the founding of New China, from the promotion of reform and opening up to the glorious achievements of the founding of the Party in the past 100 years... Vivid pictures showed that under the strong leadership of the Communist Party of China, the Chinese nation has achieved a great leap in the goal of standing up, getting rich and becoming strong.”
The article talks about the India-China Friendship Association’s work in “promoting non-governmental exchanges between India and China.” The association was established in the 1950s. The piece talks about the leadership of Mr. Bhaskaran, who is the general secretary of the Karnataka chapter of the ICFA. The article says that owing to the work of Bhaskaran, the Karnataka chapter of ICFA has been in close contact with the Chinese People's Association for Friendship with Foreign Countries and has made important contributions to promoting the development of bilateral relations. He has successively received the “China-India Friendship Contribution Award” issued by the Chinese government and the title of Friendship Envoy awarded by the Shandong Provincial Government. 印中友协成立于上世纪50年代，长期致力于推动印中民间交流，汇聚了印度一大批知华友华人士，为印中友好交流发挥了积极作用。巴斯卡兰担任印中友协卡纳塔克邦分会秘书长一职已有近20年的时间。如今已年过八旬的他仍然在为印中友好事业而孜孜奋斗。在他的努力下，卡纳塔克邦分会多年来与中国人民对外友好协会和中国的地方友协联系密切，为推动两国关系发展作出了重要贡献。他先后获得过中国政府颁发的“中印友好贡献奖”以及山东省政府授予的友好使者称号.
Apparently, Mr. Bhaskaran met Xi Jinping during his 2014 visit to India. He today believes that the “blueprint drawn by the 20th National Congress of the Communist Party of China for China's future development will contribute more Chinese wisdom to promoting global development. 在巴斯卡兰看来，中共二十大为中国未来发展擘画的蓝图将为推动全球发展贡献更多中国智慧.
He talks about BRI and GDI as initiatives aimed “to share opportunities with the world and inject great vitality into the development of the world economy.” He believes there is “huge space for cooperation between India and China” going beyond economic and trade cooperation to also greater communication and exchanges. 巴斯卡兰说，“中国提出共建‘一带一路’倡议和全球发展倡议，与全球共享机遇，为世界经济发展注入巨大活力。印中两国合作空间巨大，除了经贸合作，希望印中两国人民增进沟通交流，让文明交流互鉴成为加深两国友谊的桥梁。”
To me, it is fascinating that this was one of the stories selected, given that generally we don’t see the paper talking about bilateral developments with India. Also, the last few weeks have been dominated by bad headlines, from the holding up of export of VIVO phones from India to the clashes between the two sides in Arunachal Pradesh. Also, the ICFA Karnataka chapter did recently find itself in the midst of a controversy in late August, calling off a seminar that was themed: “Interference of US Imperialist in the internal affairs of the People’s Republic of China.”
My brief view: I’ve been arguing for some time that there needs to be a much more nuanced look at CCP influence operations in India. This is a country where public favourability for China is perhaps among the lowest in the world. That’s largely thanks to Beijing’s actions. And it does not seem likely that any amount of money being spent by Beijing will improve this, unless Chinese policies change. Just look at Indian media’s coverage of China, and you’ll see what I mean.
But that does not mean that we must dismiss influence operations, because there are other drivers for CCP efforts in India.
My general view is that CCP influence efforts in India are very different from its efforts in countries where there might be large Chinese diaspora populations. There might be more, but four key dimensions/objectives come to mind:
Cultivating a sense of inferiority in terms of India’s economic and military capabilities compared to China
Emphasising commonalities of the two countries as Asian powers and developing countries, while pushing a narrative that undermines Indo-US cooperation and/or the Indo-Pacific as a strategic concept
Communications around the positive development of Tibet, while targeting criticisms against the CTA and the Dalai Lama
Messaging to the government, media and general public around India’s Taiwan policy and the one-China principle (this one was obvious, but came to mind after I hit publish :))
But in this effort of understanding CCP influence operations, one should not demonise all investments or people to people linkages. It is a good thing for Indian and Chinese students, journalists and think tanks to engage with each other. How on earth else are we supposed to live next to each other and understand each other? Likewise, if Chinese technology or entertainment companies want to invest in India, we shouldn’t simply class these as influence operations or potential capabilities for influence. Rather, we should demand reciprocity in market access for our entertainment and tech products, and if needed, have an investment review mechanism for key sectors, among with other regulatory changes.