Page 1: With the Beidaihe meetings still underway, the front page continues to focus on feature stories about poverty alleviation and the economy drawing from the Politburo meeting last week. There’s basically one news report on the page, which is about Xi sending a message of condolence to his Lebanese counterpart Michel Aoun, following what apparently was a fireworks factory explosion in Beirut.
Page 2: A couple of pieces to note. First, this report based on a presser by different ministries about China’s Covid testing capacity. It says that as of the end of July, China’s “daily nucleic acid testing capacity has reached 4.84 million, and a total of 160 million nucleic acid tests have been conducted nationwide.” Over 6 million of these have been conducted in Dalian, where this PD report says there were 89 new cases on August 4.
Second, an interview with Ning Jizhe, Deputy Director of the NDRC. This is a good read if you are keen to understand the direction of economic policy and the challenges that lie ahead. Here are some excerpts:
On major measures: “A series of policy measures such as increasing the fiscal deficit of 1 trillion yuan, issuing 1 trillion yuan of anti-epidemic special treasury bonds, reducing taxes and fees of 2.5 trillion yuan throughout the year…have been timely and effective.”
On improvements: “Since April, the production side has recovered vigorously, the value added of the industrial enterprises above designated size has been increasing for three consecutive months, and the service industry production index has been increasing for two consecutive months since May. The demand side situation began to improve in the second quarter, market consumption improved month by month, and fixed asset investment increased by 4.8% year-on-year.”
On challenges ahead: “At present, there are still many difficulties and major challenges in the operation of my country’s economy. There are not only the impact of the epidemic, but also the contradictions caused by the intertwining of structural, systemic, and cyclical issues; there are both short-term issues and medium- and long-term issues.”
On employment, enterprises & supply chain: “To stabilize employment, it is necessary to focus on key groups such as college graduates and migrant workers, and strengthen assistance to stabilize jobs and employment assistance. Make good use of various employment subsidies and unemployment insurance funds, and increase vocational skills training. To stabilize enterprises, we must implement various tax and fee reduction policies to ensure that the focus of new financing flows to the manufacturing industry and small, medium and micro enterprises. Take precise prevention and control measures to minimize the impact of the epidemic on the production and operation of enterprises. It should be noted that we will never help outdated production capacity and “zombie companies.” To stabilize the supply chain of the industrial chain, it is necessary to strengthen the upper, middle and lower reaches of the industry, and strive to make up for the shortcomings of core technologies and key components, and strive to maintain the order of international industrial division of labor and coordination.”
On private investment: Private investment accounts for nearly 60% of the total investment in society and is an important force for stabilizing investment…The rate of decline in private investment in the second quarter narrowed by 18.6 percentage points from the first quarter…compared with the overall investment, the growth of private investment is still relatively lagging, and more targeted measures must be taken to promote the development of private investment.
The point about private investment is critical; it signals the lack of confidence among market entities.
Page 3: The big story on this page is Wang Yi’s interview with Xinhua on China-US ties. There’s such a stark difference in the Chinese language and English report. For instance, the Chinese report begins with Wang talking about Pompeo’s address at the Nixon Presidential Library. He says that it reflects “not only ignorance of the historical process, but also disrespect for the Chinese and American peoples. This method of spreading ‘political viruses’ will of course be questioned and criticized by the United States and the international community.” The political virus bit does not exist in the English report.
Wang’s key argument is this: “China and the United States are still completely different in many aspects such as social systems, but this difference will not and should not affect the continued peaceful coexistence and win-win cooperation between the two countries in the past, today and in the future. It is not necessary and impossible for both sides to change the other side, but should respect the independent choices made by the other side’s people.”
Talking about the Chinese system, Wang said: “Freedom, democracy, and the rule of law have long been written into China’s constitution, and they have become an important part of the core values of socialism with Chinese characteristics. At the same time, we are well aware that freedom is not laissez-faire. Scientific rationality, legal order, and international rules are the basis of freedom.” This is an example of how the CCP has leveraged language and terminology, creating new meanings for concepts like democracy and freedom. Do check out this episode of The Little Red Podcast where Delia Lin explains this phenomenon.
And then this: “China-US cooperation has never been a case of one party giving favor to the other, or one party taking advantage of the other…China’s rapid development has benefited from its open cooperation with other countries in the world, including the United States. Similarly, China’s continuous growth has in turn provided the United States and others with continuous growth momentum and huge market space.” He basically then said that decoupling helps no one.
So what’s really the problem? For Wang, “at present, Sino-US relations are facing the most severe situation since the establishment of diplomatic relations. Exchanges and cooperation in various fields have been severely disrupted. The fundamental reason is that some domestic political forces in the United States use their power to fabricate out of prejudice and hatred towards China. All kinds of lies maliciously smeared China and created all kinds of excuses to obstruct normal exchanges between China and the United States. They did so in order to revive the specter of McCarthyism, to destroy the ties between China and the United States, to instigate the opposition between the two nations, and to damage the foundation of mutual trust between the two countries, thereby dragging China and the United States into conflict and confrontation again, and pushing the world into turmoil.”
He added: “We firmly oppose the artificial creation of the so-called ‘new cold war,’ because it completely violates the fundamental interests of the people of China and the United States and completely deviates from the trend of world development and progress.” And this: “China today is not the Soviet Union of the year, and we have no intention of becoming the second United States. China never exports ideology and never interferes in other countries’ internal affairs.”
Finally, he went on to talk about reviving dialogue with the US and his three-checklist formulae. Among the other issues that the interview covered were Hong Kong, the closure of the consulate in Houston, Huawei, the South China Sea. On the first two, there wasn’t anything that we haven’t heard before. On Huawei too, he basically framed the argument in the context of the geopolitical contest over technology and the US desiring to maintain its “hegemony” by targeting “innocent” Chinese companies.
But, on the SCS, interestingly, he didn’t double down on Chinese claims. Rather he said: “Under the current situation, China proposes to eliminate all interference and restart consultations on the ‘Code of Conduct in the South China Sea’ as soon as possible, and strive to reach an early conclusion of this regional rule that is conducive to maintaining long-term stability in the South China Sea. At the same time, China is also willing to continue to strengthen maritime cooperation with coastal countries.”
Also on the page is this report about letters being received by the International Liaison Department from foreign political parties, rejecting the “new cold war.” None of these are mainstream parties. For instance, from Russia, it’s not the United Russia party that’s sent the letter. Rather it’s the Russian Communist Party.
Page 7 & 9: Two pieces to note on these pages. First, this one which distinguishes the Chinese system of governance as firstly Chinese, but also Marxist. Here’s an excerpt. “The governments of Western countries, as a major organizational form of party politics, represent and safeguard the interests of the bourgeoisie, no matter how their control is reversed between different parties. The presidents, prime ministers, and heads of government of Western countries, although their respective political systems are different, they are all spokespersons of bourgeois political parties…The government of a socialist country was established under the guidance of the Marxist theory of the state. It is different from all the old governments in the past. It exists not for the interests of a few people, but to safeguard the interests of the overwhelming majority. From the day of its birth, the People’s Government of New China has, under the leadership of the party, regarded serving the people and promoting national development as its unremitting pursuit and goal.”
The piece also briefly touches upon the Cultural Revolution, calling it “a decade of civil unrest…which severely damaged the national administrative system and even paralyzed it for a time.” It also talks about the philosophical and practical role of the government. “The government should be the pilot of the national economy, the judge/referee of the market order, the guardian of harmony and stability, the supplier of public services, and the defender of a beautiful China.”
The other piece is on page 9; it talks about the importance of the “two safeguards.” Essentially, this is a piece that outlines why it is extremely important for the Party to preserve Xi’s position as the core. Interesting timing, since it comes as the Beidaihe meetings are underway.
Page 11: A statement by the Taiwan Affairs Office criticising the planned visit by US Health Secretary Alex M. Azar II to Taiwan. He will be the highest ranking official to visit Taiwan since 1979. Next, a strange feature piece about Cheqiao Town in Jiangsu Province. The piece essentially talks about how life today is good and people are happy; but in doing so, it goes back to the 1940s and the war against Japan.