Xi's Xinjiang Visit - Wang Yi's Chat with Szijjarto - China's 'Resilient Economy' still Key to Global Growth - Dynamic Clearing ≠ Giving up on Economy

Here are the stories and pieces that I found noteworthy in the Monday, July 18, 2022, edition of the People’s Daily

.Page 1: There’s very little on the front page today that I found interesting. On Saturday, the front page was all about Xi Jinping’s visit to Xinjiang. The visit has been covered across the media now, and Xinhua English too put out a very detailed report. I am sharing some excerpts from that:

At Xinjiang University: “Our country is a unified multiethnic country, with the Chinese people of all ethnic groups united in diversity being a salient feature, Xi noted. Creatively adapting Marxist ethnic theory to China's specific realities, we have formulated ethnic theories and policies characterized by ethnic equality and unity, regional ethnic autonomy, and shared development and prosperity, so that all ethnic groups have enjoyed equality, unity and progress in real sense under the socialist system. Our ethnic theories and policies are sound and effective. We should stay committed to the correct and Chinese way to address ethnic issues, continue to enrich and develop the Party's ethnic theories for the new era, advancing research on the fundamental issues concerning the community for the Chinese nation. China, a country with ethnic unity, is invincible and will have a bright future, and our Second Centenary Goal is bound to be achieved and so is the rejuvenation of the Chinese nation, Xi said. Xi stressed that the fundamental task of education is to foster virtue. He urged the university to uphold the socialist direction of education and nurture a new generation of capable young people with moral grounding, intellectual ability, physical vigor, aesthetic sensibility and work skills for the socialist cause. The university should highlight its unique strengths, foster high-calibre faculty, enhance its innovative capacity in scientific researches and make more progress in making itself a world-class university and developing world-class disciplines.”

At the Urumqi International Land Port Area, he said that Xinjiang “should develop the core area of the Silk Road Economic Belt, incorporate its regional opening-up strategy into the overall layout of the country's westward opening up, innovate the system for an open economy, speed up the construction of major opening-up corridors, so that it can make better use of international and domestic markets and resources and actively serve and integrate itself into the country's new pattern of development. He also urged local leading officials to continue to prevent both inbound cases and domestic resurgences of COVID-19, uphold a dynamic zero-COVID policy and try their best to adopt targeted response measures and reduce inconvenience in people's everyday life.”

He watched a dance performance and then went to the home of Ablet Tursun, a Uygur resident, in Guyuanxiang in the Tianshan District of Urumqi. The report says that 95% of the people here belong to ethnic minority groups. At the home, Xi “stressed that ethnic unity is the lifeline for people of all ethnic groups in China and all ethnic groups in Xinjiang are inseparable members of the family of the Chinese nation. We should value the current stability and unity in China with all 56 ethnic groups standing together, maintaining firm resolve, making pragmatic and concerted efforts for achieving the Second Centenary Goal under the Party's leadership.” He also called on party organisations to “take into account the needs and expectations of residents of all ethnic groups.” 

Then, Xi visited the Museum of the Xinjiang Uygur Autonomous Region, where he watched a show of the Kirgiz ethnic epic ‘Manas.’ Xi said: 

“Chinese civilization is extensive and profound, has a long history stretching back to antiquity, and is composed of outstanding cultures of all its ethnic groups, Xi said. He called for further study on the history of the community for the Chinese nation and its unified pattern of diverse ethnic cultures. He added that we should make full and effective use of the historical facts, archaeological objects, and cultural heritage on the exchanges between various ethnic groups in Xinjiang, to prove that this region inhabited by many ethnic groups has been an integral part of China since the ancient times, and that various ethnic groups in Xinjiang have been important members of the big Chinese family in weal and woe.”

At this point, let me plug my new review essay discussing Amb. Shyam Saran’s new book, How China Sees India and the World. The book argues that an instrumental approach to history has been a hallmark of Chinese political life through the centuries, and that competing with a rising Communist China today requires the world to actively contest Beijing’s historical narratives.

Anyway, after this, Xinhua says that Xi visited Shihezi City, where he praised the XPCC.

“In the 143rd Regiment Huayuan Town Square, Xi had a cordial conversation with officials and workers from the XPCC. Xi stressed that the strategic role of the corps is irreplaceable. It is imperative to speed up the corps' reform, deepen the integration of the corps with local areas, build a pastoral homeland featuring harmony between urban and rural areas. The functions and roles of the corps should be given full play as a stabilizer for securing national borders, a melting pot for uniting people of all ethnic groups and a demonstration area for developing advanced productive forces and culture, so that the corps will be further consolidated in its strengths in maintaining stability and safeguarding borders in the new era, Xi said.”

In Turpan City on Thursday, he spoke about the need to properly handle the relationship between socioeconomic development and environmental protection and expanding on what has been achieved in poverty alleviation and making solid progress in rural revitalization. 

Finally, on Friday, Xi heard work reports from the regional Party committee, the regional government and the XPCC. He said:

• With the overarching goal of Xinjiang work as the focus, efforts must be made to advance the fundamental, basic and long-term imperatives to ensure enduring social stability and long-term security in the autonomous region.

• People's support is vital for ensuring Xinjiang’s lasting stability. We must stay united and look into the future, giving full play to the role of all officials and the people in ensuring stability, boosting development and promoting reform. We must mind closely the opinions and views of people from all walks of life. We must ensure that work on safeguarding stability is law-based and done on routine basis. We must communicate Xinjiang to the world in a multi-level, comprehensive and multi-dimensional manner, do a better job in letting the world see Xinjiang with their own eyes, and tell Xinjiang's stories well. (For instance, there’s a report on Page 4 with positive comments from international actors with regard to China’s Xinjiang policies.)

• We must develop a strong sense of community for the Chinese nation and encourage more exchanges and interactions among different ethnic groups. All the ethnic cultures in Xinjiang have their roots in the Chinese civilization. We must educate and guide all officials and people to have a correct understanding of Xinjiang's history, especially that of its ethnic groups, so as to uphold the right perspective of the Chinese nation's history and strengthen the national psyche of the Chinese nation. We must take further steps to advance the project that aims to create a strong sense of community for the Chinese nation among young people. We must promote integration among people from all ethnic groups in all areas such as culture, economy, society and psychology so that they will be closely united like the seeds of a pomegranate that stick together.

• The capability of governing religious affairs must be improved to ensure the healthy development of religions. We must better uphold the principle of developing Islam in the Chinese context and provide active guidance for the adaptation of religions to the socialist society. We must train a team of Party and government officials who are adept at the Marxist view on religion, familiar with religious affairs and competent to engage in related work, foster a group of religious figures who are politically reliable, have noble characters and religious accomplishments and can play their role at critical times, and foster a group of religious researchers who have firm political stand and good academic achievements, stick to the Marxist view on religion and be good at innovation. We must ensure that reasonable demands of religious believers be met and rally them around the Party and the government, Xi said.

• It is necessary to further cultural development in Xinjiang with promoting the sense of national identity as the focus…We should demonstrate the common features of Chinese culture, and display the historical facts of exchanges and interactions between Xinjiang and various ethnic groups in the rest part of China by developing a particular discourse and other effective vehicles.

• Work needs to be done to accelerate high-quality economic development, cultivate and expand competitive specialty industries and enhance their capabilities to create jobs.

Okay, so back to today’s PD. At the top of the page is a report about the performances of central SoEs. It says that from January to June, China’s 97 central SOEs made 19.2 trillion yuan in combined revenue, up 12 percent year on year. Their combined net profit totaled around 1.086 trillion yuan (about $160.9 billion), an increase of 6.1 percent over the same period of last year. 

The report adds that by the end of May, around 94.7% of the tasks detailed in the three-year action plan for the reform of SoEs had been completed, with the key tasks basically completed. Also, the construction of the modern enterprise system with Chinese characteristics has been further strengthened; around 12,700 subsidiaries of central SoEs have completed the establishment of a board of directors. This accounts for 99.9% of the total. Among these, 99.3% have a majority of external directors. In addition, in H1, more than 190 billion yuan in capital was added by furthering mixed ownership reform.

Next, there’s a report on the loans issued as of June. The report says that the balance of inclusive small and micro loans increased 23.8% year on year, 12.6 percentage points higher than the growth rate of all loans; the number of small and micro credit users was up 52.39 million, up 36.8% year on year; the balance of medium - and long-term loans to the manufacturing sector rose 29.7 percent year on year, 18.5 percentage points higher than the growth rate of all loans. 中国人民银行发布的最新数据显示：今年上半年，我国信贷结构持续优化，截至6月末，普惠小微贷款余额同比增长23.8%，比各项贷款增速高12.6个百分点；普惠小微授信户数为5239万户，同比增长36.8%；投向制造业的中长期贷款余额同比增长29.7%，比各项贷款的增速高18.5个百分点.

Page 2: A report on Guo Shengkun’s comments at the 14th National Commendation Conference for Heroes and Models. At the meeting, 46 individuals and 6 groups were commended, and 5 representatives made speeches. Guo said that:

“He emphasised that it is necessary to adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly study and implement Xi Jinping’s thought on the rule of law, and thoroughly study and implement the spirit of General Secretary Xi Jinping’s important instructions on acting heroically for a just cause, strengthen the ‘four consciousnesses’ and strengthen the ‘four self-confidences’, achieve the ‘two safeguards’, carry forward the spirit of righteousness and courage, create a good social atmosphere, gather strong positive energy for the construction of a higher level of safe China and the rule of law in China, and take practical actions to greet the 20th party Congress. 他强调，要坚持以习近平新时代中国特色社会主义思想为指导，深入学习贯彻习近平法治思想，深入学习贯彻习近平总书记关于见义勇为事业的重要指示精神，增强“四个意识”、坚定“四个自信”、做到“两个维护”，弘扬见义勇为精神，营造良好社会风尚，为建设更高水平的平安中国、法治中国汇聚强大正能量，以实际行动迎接党的二十大胜利召开.”

Next, a report on Hu Chunhua’s visit to Zhejiang, where he supervised the employment stabilisation work. 

Hu said that “China’s employment situation has generally stabilised and improved, but it still faces many difficulties and challenges. In accordance with the deployment of the CPC Central Committee and the State Council, we should intensify the implementation of employment priority policies to promote the continuous improvement of the employment situation. At present, it is necessary to put the promotion of college graduates’ employment at an important position in the work of stabilising employment, ensure services for unemployed graduates, actively carry out various special recruitment activities, and do everything possible to create more jobs. Efforts should be made to provide more support and help to ensure that all poor graduates who are willing to work can find jobs. It is necessary to help migrant workers returning to their hometowns to find jobs nearby, and support migrant workers who are willing to start businesses in their hometowns, especially to ensure steady employment of workers in poverty-stricken areas. It is necessary to strengthen employment assistance for people in need, and earnestly secure the bottom line of employment.” 胡春华指出，目前我国就业形势总体企稳向好，但仍然面临不少困难挑战。要按照党中央、国务院部署，加大就业优先政策实施力度，推动就业形势持续好转。当前，要把促进高校毕业生就业摆在稳就业工作重要位置，扎实开展未就业毕业生服务攻坚行动，积极开展各类专场招聘活动，千方百计创造更多就业岗位。要进一步加大帮扶力度，努力让有工作意愿的困难毕业生都能找到工作。要帮助返乡农民工就近就地就业，支持有创业意愿的农民工返乡创业，尤其要确保脱贫地区劳动力稳岗就业。要加强困难人员就业援助，切实兜牢就业底线.

Page 3: First, a report on Wang Yi’s chat with Hungarian Foreign Minister Peter Szijjarto on bilateral ties and Ukraine. Xinhua reports:

“The Hungarian side is pleased about the achievements of Hungary-China cooperation in various fields, in particular the smooth progress of cooperation in trade and investment, Szijjarto said, adding that his country is willing to maintain high-level exchanges with China to constantly promote Hungary-China comprehensive strategic partnership to new levels. Hungary welcomes investment by Chinese enterprises and will provide them convenience and a favorable environment, he said. Wang said that the Ukraine crisis has not only seriously impacted Europe, and its negative spillover effect has also affected the whole world. Referring to the Group of 20 foreign ministers' meeting held recently, Wang noted that all sides expressed deep concern over the issue, and that China has proposed initiatives to tackle global food and energy security. China is not a party directly related to the issue but it hasn't sat on its hands, neither will it add fuel to the flames, Wang said, adding that China will consistently and firmly promote dialogue and peace talks. The lessons from the Ukraine crisis are profound and worth well learning for all sides, Wang noted, saying that in the long run, the parties should discuss building a balanced, effective, and sustainable European security framework, so as to realize lasting peace and security. China, Wang said, cherishes the trust and friendship with Hungary, and appreciates the Hungarian side for always upholding justice in China-related issues, understanding China's just propositions and supporting China in safeguarding its legitimate rights and interests. China is ready to work with Hungary to make the two countries' relationship a model of state to state relations featuring a higher degree of maturity and mutual trust, Wang said.”

Also this: “Wang said he believes that Hungary will continue to uphold an objective and just position, and push the European Union to adopt positive and practical policies towards China. Szijjarto said that China has never been an opponent of Europe but a partner who brings cooperation opportunities.”

Second, a report informing us that Serbian President Aleksandar Vucic was at the airport to greet the first direct flight from Beijing to Belgrade. Third, a report about the beginning of the China-Croatia joint police patrol. This marks the first time for the Chinese police to carry out patrol missions overseas since the start of the pandemic.

Fourth, a commentary arguing that the Chinese economy has shown “strong resilience” in Q2, withstanding the pressure of a “complex and severe international environment” and “frequent outbreaks” at home. The piece argues that China has responded “effectively” to the challenges. Its policy puts people and lives first. It says that China’s COVID containment policy has not only saved lives but also stabilised the fundamentals of economic and social development to the greatest extent possible. 中国坚持人民至上、生命至上，筑牢疫情防控屏障，巩固疫情防控成果，最大程度保护人民生命健康，也最大程度稳住了经济社会发展基本盘.

It argues that in analysing the economic impact of China’s epidemic containment policy, one needs to keep in mind dialectical thinking.

“The impact of the epidemic (on the economy) is short-term and extrinsic, while strong resilience and great potential are long-term and intrinsic features of the economy. Over a long period of time, China has accumulated the advantages of having a solid material foundation and a super-large market. With the recovery of consumption, the recovery of production, the strengthening of innovation and the implementation of macroeconomic policies, China's economy is expected to continue to rebound. China is fully implementing the new development concept, speeding up the construction of a new development pattern, and making efforts to promote high-quality development. It is forming new competitive advantages and continuously gathering new kinetic energy for development, which will inject a steady stream of impetus for the sustainable and healthy development of the economy.” 中国有长期积累的雄厚物质基础和超大规模市场优势，随着消费恢复、生产回升、创新引领增强、宏观政策落地，中国经济有望持续回升。中国全面贯彻新发展理念、加快构建新发展格局、着力推动高质量发展，正在形成竞争新优势，不断集聚发展新动能，将为经济持续健康发展注入源源不断的动力.

“The fundamentals of China’s long-term economic improvement have not changed, China's position as an important engine of global economic growth has not changed, and the international community’s confidence in China's economic prospects has not changed. In the first five months of this year, China absorbed $87.77 billion of foreign capital, a year-on-year increase of 22.6%; In the first four months, China added 185 large-scale projects with contracted foreign capital of over $100 million, which is equivalent to an average of 1.5 large-scale foreign-funded projects landing every day. According to the white paper released by the American Chamber of Commerce in May, most respondents believe that to be a global winner, it is essential to remain competitive in the Chinese market.” 中国经济长期向好的基本面没有变，中国作为全球经济增长重要引擎的地位没有变，国际社会对中国经济前景的信心没有变。今年前5个月，中国吸收外资877.7亿美元，同比增长22.6%；前4个月，中国新增合同外资1亿美元以上大项目185个，相当于平均每天有1.5个外资大项目落地。中国美国商会5月发布的白皮书显示，多数受访者认为，要成为全球赢家，在中国市场保持竞争力至关重要.

Finally, the author talks about economies around the world facing the risk of stagflation, and argues that the policies in major economies are tightening and external instability and uncertainty is increasing. Amid this, China will focus on managing its own affairs well. The Wall Street Journal recently pointed out that the inflation pressure in China is low. This means that China can focus more on revitalising the economy. At the same time, China will continue to open wider to the outside world at a high level. The author then cites recent foreign trade figures to say that the data show that China’s foreign trade is resilient. 

Fifth, there’s a report on the Second China-Pacific Island Countries Political Parties Dialogue. The report basically contains comments from participants from the Pacific Island countries praising China.

Page 5: There’s the third and final commentary in the series of articles defending the dynamic clearing policy. The piece argues that:

“Only by effectively coordinating the epidemic prevention and control and economic and social development work, and grasping the key tasks of epidemic prevention and control, can we overcome some of the difficulties currently faced in economic development and minimise the impact of the epidemic on economic and social development. Only when the epidemic can be prevented can the economy be stabilised. Effective epidemic prevention and control is a powerful guarantee for economic development, and stable epidemic prevention results can create a stable and safe development environment for economic growth.” 高效做好统筹疫情防控和经济社会发展工作，抓紧抓实疫情防控重点工作，才能克服目前经济发展面临的一些困难，最大限度减少疫情对经济社会发展的影响疫情防得住，经济才能稳得住。有效的疫情防控是经济发展的有力保障，稳固的防疫成果可以为经济增长营造稳定安全的发展环境.

The article talks about the steps taken to ensure that economic activity is maintained while the work on pandemic containment continues. For instance, it argues that:

• The Joint Prevention and Control Mechanism of the State Council has called for abandoning one size fits all approaches and incremental addition of restrictions at local levels.

• The NDRC has talked about balancing epidemic prevention and control with accelerating major project construction.

• The GAC has optimised cargo management, thereby boosting foreign trade.

The next paragraph says that while the epidemic has not gone away and the big test is still underway, development cannot stop. It quotes Xi’s comment during the recent visit to Wuhan to make this point. 

“The ultimate goal of dynamic clearing is to maximise people’s  lives’ safety and health, as well as maximising the protection of economic and social development and normal production and life. Epidemic prevention and control, normal production and life, and economic and social development are by no means an either-or ‘single-choice question’. They all comprise the main goals of dynamic clearing. Persisting in dynamic clearing means balancing the relationship between epidemic prevention and control and economic and social development, and achieving the maximum prevention and control effect at minimum cost.” 动态清零的最终目标是最大限度保护人民生命安全和身体健康，同时最大限度保护经济社会发展和正常的生产生活. 疫情防控和正常生产生活、经济社会发展绝不是非此即彼的“单选题”，都是动态清零的主要目标之一. 坚持动态清零，就是要统筹平衡好疫情防控和经济社会发展的关系，用最小的代价实现最大的防控效果. – 

Quick thought, when I read the above paragraph I thought it felt like a subtle shift in narrative. But then, we’ve heard similar things before. However, later in the piece, it becomes clear that the narrative does seem to be shifting towards ensuring greater support for the economy. But that might not necessarily mean giving up on mass testing and targeted shutdowns. As we speak, Macao is going through its 11th round of mass testing, and “non-essential businesses” remain shut.

But the narrative is shifting in official media, which has the potential to have downstream effects in how dynamic clearing is interpreted and implemented. For example, just go back to Xi’s visit to Wuhan in June. There he was quoted as saying that even “if there are some temporary impacts on the economy, we will not put people's lives and health in harm's way.” He also talked about striking a “balance between COVID-19 response and economic and social development, and striv(ing) for a relatively good performance in this year's economic development.” Now keep this in mind as you read through the rest of the article. Also, while you do so, go back to these remarks by Li Keqiang.

The next paragraph argues that only when the epidemic can be prevented can the economy be stabilised. The examples cited are around improvements in terms of opening up of Shanghai and Beijing. The article argues that:

Across the country, many cities and towns affected by the epidemic are getting back on track. This also fully shows that insisting on dynamic clearing is by no means an obstacle to economic and social development, but a boost to economic and social development. If the prevention and control policies such as ‘herd immunity’ and ‘lying flat’ are adopted, the epidemic will inevitably have a serious impact on the economic and social development, and will inevitably cause greater losses.”大江南北，受疫情影响的多地经济正重回正轨。这也充分说明，坚持动态清零，绝不是经济社会发展的阻力，而是经济社会发展的助力。如果搞“集体免疫”、“躺平”之类的防控政策，疫情势必会对经济社会发展产生严重冲击，势必会造成更大的损失.

“In fact, insisting on dynamic clearing has never meant giving up on economic development. It must be deeply understood that, on the one hand, development is the foundation and key to solving all problems in our country. Doing a good job in epidemic prevention and control requires financial and material resources, and ensuring employment, people's livelihood, and risk prevention all need to be supported through development. On the other hand, the economy and society/economic society (经济社会) is a dynamic circulatory system that cannot be suspended for a long period of time. We are currently at a critical point in economic recovery. It is important to further enhance the sense of urgency, continue to implement various policies - while doing a good job in epidemic prevention and control - further ease the bottlenecks in the supply and industrial chains, and push the economic operation back to the normal track as soon as possible, in order to better protect China's economic resilience and keep the economic operation in a reasonable range.” 事实上，坚持动态清零从来就不意味着放弃经济发展。必须深刻认识到，一方面，发展是解决我国一切问题的基础和关键，做好疫情防控需要财力物力保障，保就业保民生防风险都需要发展作支撑。另一方面，经济社会是一个动态循环系统，不能长时间停摆。当前正处于经济恢复的关键时间点。进一步增强紧迫感，继续落实各项政策，在做好疫情防控的同时，进一步打通产业链供应链堵点，推动经济运行尽快回归正常轨道，才能更好保护中国经济韧性，保持经济运行在合理区间.

The last paragraph says that the Party Central Committee’s requirement is clear: “the epidemic must be prevented, the economy must be stabilised, and development must be ensured.” After this the paragraph says:

“Since the beginning of this year, China’s economy has experienced a very unusual course of events. In general, the economy is recovering at present, but the foundation for recovery is not yet solid, and arduous efforts are still needed to stabilise the economy. Adhere to the general policy of ‘dynamic clearing’ without hesitation or wavering, further sharpen the courage to take responsibility, the wisdom of scientific prevention and control, the ability to make overall plans, and the ability to organise implementation, and efficiently do a good job in coordinating epidemic prevention and control and economic and social development. We will definitely build a barrier to prevent and control the epidemic situation and strive for a relatively good level of economic development performance this year.” 今年以来，我国经济运行经历了很不寻常的过程，总的看当前经济正在恢复，但恢复的基础还不稳固，稳经济仍要付出艰苦努力。坚持“动态清零”总方针不犹豫不动摇，进一步磨砺责任担当之勇、科学防控之智、统筹兼顾之谋、组织实施之能，高效做好统筹疫情防控和经济社会发展工作，我们一定能筑牢疫情防控屏障，争取今年我国经济发展达到较好水平.

Page 11: Not doing a full breakdown, but there’s a long piece by Ma Jiantang, deputy director of the Economic Committee of the National Committee of the CPPCC, on the new outline on Xi Jinping Economic Thought. He offers profuse praise for Xi Jinping.

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