Beijing’s new plan to juice the economy

Editor-in-Chief

• The Party’s Central Committee and the State Council yesterday released a 31-point action plan (in Chinese) aimed at improving the business environment and treating private companies the same as their state counterparts.
• “In China’s political system, a document jointly issued by the two top organs of the [Party] and the government is the highest-level official document possible,” notes the Pekingnology newsletter in an introduction to an unofficial translation of the document.
• Additionally, state broadcaster CCTV “put its reporting of the document right behind General Secretary Xí Jìnpíng’s 习近平 activities and before Premier Lǐ Qiáng’s 李强 activities.”

Chinese billionaires are backing the plan:

• Tencent co-founder Pony Ma (马化腾 Mǎ Huàténg) published a lengthy op-ed yesterday stating that he was “extremely excited and encouraged” by Xi’s support for the private economy.
• It followed similar statements made by Léi Jūn 雷军, the CEO and co-founder of phonemaker Xiaomi, as well as a post by the Zhejiang province industry group which included over a dozen other entrepreneurial heavyweights.

Why now? It’s the economy, stupid: The release of the plan came just one day after China reported that its economy grew by just 0.8% in the second quarter, down from 2.2% in the first three months of 2023.

• The outlook is so grim that The Economist, a weekly newspaper, this week published a story titled “How much trouble is China’s economy in?”

Will the Communist Party’s plan for private capital work? Watch this space.

Jeremy Goldkorn

The world’s two biggest polluters agreed to resume stalled talks on climate change, but did not finalize any agreements, after U.S. climate envoy John Kerry concluded a series of top level meetings with Chinese officials during his trip to Beijing.

“We came here to unstick what had been stuck,” Kerry told reporters yesterday. “And indeed, we did succeed.” Both the U.S. and China had agreed to work to “guarantee a positive outcome” at the United Nations (UN) COP28 summit in Dubai later this year.

Kerry’s trip is the latest in a string of recent visits from top U.S. officials, including Secretary of State Antony Blinken and Treasury Secretary Janet Yellen, in a bid to “reset” ties between their two nations. Kerry had met with China’s top brass, including his climate counterpart Xiè Zhènhuá 解振华, top diplomat Wáng Yì 王毅, and Vice President Hán Zhèng 韩正 — though did not garner a meeting with Chinese leader and chairman-of-everything Xí Jìnpíng 习近平.

Xi, however, did speak with his “old friend” Henry Kissinger, the former U.S. Secretary of State, today for their first known meeting in Beijing in more than three years. He is currently on a surprise visit to China to speak with top Chinese officials, in an apparent bid to further ease fraying ties between the two superpowers. It is not clear if who invited or sent Kissinger to Beijing.

The 100-year-old diplomat had paved the way for official bilateral ties under former U.S. President Richard Nixon, and has pushed the U.S. to take a more conciliatory approach to China. Kissinger “has made historic contributions to breaking the ice in China-U.S. relations, and played an irreplaceable role in enhancing understanding between the two countries,” Wang Yi said (in Chinese) during their meeting yesterday.

China imported record amounts of Russian crude oil for the first half of 2023 with about 11.4 million barrels per day, up 11.7% year-on-year and up 15.3% compared with pre-COVID levels, according to government data compiled by the Financial Times.

China has built more than 600,000 new 5G stations in the last three months to June, bringing the total number to 3 million and exceeding its target for such base stations six months ahead of time.

The figures suggest that China is outpacing the United States in building out its mobile phone 5G network: By comparison, the U.S. built about 100,000 5G base stations between 2019 and 2021, according to the latest available industrial estimate.

Chinese state media: The top story on Party rag the People’s Daily is “Fight to strengthen the army under the banner of the Party.” The other noteworthy front page story is about the Party and government’s new plan to promote the development and growth of the private economy.

Xinhua’s top Chinese-language story today is lengthily titled “Xi Jinping presided over the second meeting of the Central Finance and Economics Committee, emphasizing that we should effectively strengthen the protection of cultivated land, make every effort to improve the quality of cultivated land, and steadily expand the space for agricultural production.”

Xinhua’s English website leads with a report on Kissinger meeting Xi.

• Africa’s public debt is the highest in decades, sitting at 56% to 65% of GDP. But contrary to popular belief, it is mostly private creditors that funded this debt — not China.
• Loans from China make up just 12% of Africa’s total debt, and lending from China to Africa has been on the decline since 2016.

China’s awareness of Africa’s debt problem is just one of the many factors that has led to China decreasing its lending to the continent, while also improving debt relief.

• During the Debt Service Suspension Initiative (DSSI), Chinese creditors contributed 63% of debt service suspensions and in 2021, China signed debt relief agreements with 19 African countries.

Beijing is also taking steps to mitigate climate change:

• More than two-thirds of the energy projects China is financing in Africa are in hydropower, wind, and solar.
• This contrasts sharply with the U.S. government’s energy portfolio in Africa, which is dominated by fossil fuels.

Kenyan economist Anzetse Were has the details, with plenty of charts and data to back up her arguments.

Anzetse Were

• The suburb of Sefakoy in Istanbul is home to an estimated 50,000 Uyghurs who have fled persecution by Beijing.
• Turkistanli’s store, the Kutadgu Bilig Bookshop, is filled with Uyghur books he printed himself from online PDFs in an attempt to preserve the words of many who are incarcerated in China.

Now he’s being accused of copyright infringement: Chinese publishers are barred by Beijing from granting permission to reprint Uyghur books.

• Pressure from the Chinese government caused, Turkistanli suspects, more than fifty Turkish police to burst into his shop in August 2022, and again in March 2023, to take 11,000 Uyghur books.

Ruth Ingram has the whole story.

Ruth Ingram

• What the U.S. looked like to an early-20th century Chinese diplomat. In Wǔ Tíng-fāng’s 伍廷芳 1914 travelogue America, Through the Spectacles of an Oriental Diplomat — the latest book on Paul French’s Ultimate China Bookshelf — the former diplomat observes American society while asking big questions, many of which are still relevant today.
• Discussion about Wave Makers — a TV show that follows the fictitious lives of Taiwanese political staffers working on an election — has largely been censored on Chinese social media, but that hasn’t stopped some people from openly talking about it. In the latest Queer China column, Nathan Wei talks to Chinese queer feminists about how they think of the series.
• Chinese tennis player Zhāng Shuài 张帅 has received an outpouring of support from athletes and sports fans at home following her tearful exit from a recent match in Budapest, Hungary, where she suffered a panic attack after a disputed call by the umpire.

Below are links from our NewsBase to other noteworthy reports published in the last 24 hours from and about China.

BUSINESS AND TECHNOLOGY:

Government’s new plan to promoter private enterprises
China’s 31-point plan vows private firms, like state brethren, will be ‘bigger, better and stronger’ / SCMP (paywall)
“In perhaps its strongest message ever to China’s private sector, Beijing has offered up solid political backing while vowing to create a favorable environment to unleash entrepreneurship that leadership sees as critical in curbing downward risks in economic recovery.”
China seeks to boost private sector amid slowdown fears / Nikkei Asia (paywall)
Xi’s big private-sector push runs into wall of skepticism / Bloomberg (paywall)
“China’s latest pledges to rebuild a shattered private sector fell flat with investors, underscoring the damage two years of crackdowns and pandemic controls have had on confidence in the world’s second-largest economy.”
China vows to create a ‘bigger, better, and stronger’ private sector / Caixin (paywall)

Billionaires back new economic plan
Tencent billionaire founder Pony Ma hails China’s new plan to boost private economy after tech crackdown / SCMP (paywall)
“Just hours after China unveiled an action plan to invigorate its economy, the state broadcaster published an article written by Ma.”
China’s billionaires back Xi Jinping’s plan to restore economy / FT (paywall)
“China’s billionaires have stepped out of the shadows to praise the Communist party’s efforts to restore private sector confidence as Beijing attempts to recharge the economy’s faltering post-pandemic recovery.”

China’s shaky economic recovery
China needs more than monetary stimulus to bolster flagging economy, analysts say / Caixin (paywall)
“​​China’s central bank turned to rate cuts in June to bolster a fading economic recovery, reducing businesses and households’ borrowing costs. But with a slew of poor data in the past two months, monetary stimulus alone won’t be able to shore up the faltering economy, analysts said.”
China takes more steps to support the yuan / WSJ (paywall)
“China’s yuan is weakening again, and its central bank is doing more to slow the pace of depreciation.”

Chinese auto companies in Russia
Made in Russia? Chinese cars drive a revival of Russia’s auto factories / Reuters
“The relaunch of a classic Soviet-era car, the Moskvich, by a state-owned company in November was celebrated by Moscow’s mayor as showing the resilience of Russia’s auto industry to Western sanctions…The sleek four-door SUVs featured engine parts and upholstery from China’s JAC Motors, clearly visible.”

Youth unemployment
Chinese professor says youth jobless rate might have hit 46.5% / Nikkei Asia (paywall)
“An unusually public claim by a Chinese professor that the country’s youth jobless rate might have hit close to 50% in March has stoked a debate about official data and a soft labor market, despite curbs on negative portrayals of the economy.”

U.S.-China tech war
Envoy warns China will ‘definitely’ respond to U.S. tech curbs, but experts say Beijing’s options are limited / SCMP (paywall)
“China’s envoy to Washington warned that the country would ‘definitely’ respond if the U.S. escalates technology curbs, but experts said Beijing’s leeway in countermeasures might be limited amid fierce competition between the two powers.”

Foreign investors avoid China, Chinese investors pile into Hong Kong
Foreign investors sidestep China in rush into Asian stocks / FT (paywall)
“Foreign investors are injecting less money into Chinese equities than into other Asian emerging markets for the first time in six years, as investor optimism about Chinese growth wanes.”
Onshore investors bought most Hong Kong shares in over two years / Caixin (paywall)
“Mainland investors bought the most Hong Kong shares in almost two and a half years after the city’s key equity indexes slumped on mounting growth concerns and disappointment at Beijing’s pace of stimulus.”

SCIENCE, HEALTH, AND ENVIRONMENT:

Power cuts
Sichuan’s rolling blackouts pose litmus test for China economy / Nikkei Asia (paywall)
“Sichuan province began rotating outages as sweltering temperatures boost demand for electricity while drought threatens supplies in the region dependent on hydropower.”

Renewable energy
China powers up world’s first 16-megawatt offshore wind turbine / Caixin (paywall)
“China created the world’s largest wind farm in operation by single-unit capacity after switching on a massive turbine on Wednesday, underscoring the country’s position as the global leader in wind power generation.”

Coal
Why heat waves are deepening China’s addiction to coal / NYT (paywall)
“China has an answer to the heat waves now affecting much of the Northern Hemisphere: burn more coal to maintain a stable electricity supply for air-conditioning.”

Extreme weather
Video: Thousands evacuated as powerful typhoon slams into southern China / WSJ (paywall)
“Typhoon Talim made landfall in southern China bringing heavy rain and prompting the evacuation of 230,000 people. Dozens of flights were canceled and train services were suspended in the region.”

POLITICS AND FOREIGN AFFAIRS:

Ukraine talks to China
Ukraine official makes first senior visit to China since before Russian invasion / Reuters
“Ukraine’s deputy economy minister held talks with China’s vice commerce minister in Beijing on Thursday in the first high-level visit by a Ukraine government official to the country, which has a ‘no limits’ partnership with Moscow, since 2019.”

The Communist Party, elite politics, and government
Mystery over missing Chinese Foreign Minister Qin Gang takes toll on country’s international image / SCMP (paywall)
“It is the high season for Chinese diplomacy — with past and present world leaders visiting Beijing over the past month — but the country’s foreign minister has been conspicuously absent.”
Opinion: To save the Party, Xi is weakening China / Bloomberg (paywall)
Minxin Pei writes: “Putting apparatchiks back in charge of day-to-day governing is a recipe for inefficiency, graft, and economic mismanagement.”

Repression in Hong Kong
Hong Kong police widen questioning of relatives of wanted activists / Reuters
“Hong Kong national security police on Thursday questioned the brother of exiled former lawmaker Dennis Kwok (郭榮鏗 Guō Róngkēng), media reported, weeks after police issued an arrest warrant and a HK$1 million bounty for the pro-democracy politician.”
Hong Kong national security police ‘investigating family members’ of unionist Mung Siu-tat and ex-lawmaker Dennis Kwok in latest raids over wanted 8 / SCMP (paywall)
Hong Kong court sentences man to 3 months jail for insulting national anthem / Reuters
“A Hong Kong court sentenced a man to three months imprisonment on Thursday for allegedly insulting China’s national anthem by splicing a protest song onto a video clip of a Hong Kong athlete being presented a gold medal at the Tokyo Olympics.”
Hong Kong’s first person tried under national anthem law sentenced to 3 months in jail for using protest song in video / SCMP (paywall)
Hong Kong man gets 3 months for demeaning national anthem / Nikkei Asia (paywall)

Taiwan
China says its ‘priority’ is to stop Taiwan VP visiting U.S. next month / Reuters
“It is China’s ‘priority’ to stop Taiwan’s vice president and presidential frontrunner William Lai from visiting the United States next month, the country’s ambassador in Washington said on Wednesday, as Beijing steps up its warnings against the trip.”
Taiwan detects 22 Chinese military aircraft around the island / Reuters

U.S.-China competition and tensions
U.S.-China climate talks brought goodwill, modest progress / Reuters
“Climate talks this week between China and the United States were buoyed by goodwill, but the world’s two biggest carbon polluters achieved more on righting their diplomatic relationship than battling climate change.”
U.S.-China climate dealmaking hinges on two diplomats’ deep ties / Bloomberg (paywall)
Kerry’s China trip restores talks on climate change but falls short on agreement / WSJ (paywall)
China’s Xi rebuffs Kerry’s call for faster climate action / NYT (paywall)
China’s Xi gets nostalgic with ‘old friend’ Kissinger / Reuters
“Chinese President Xí Jìnpíng 习近平 told Henry Kissinger that ‘old friends’ like him will never be forgotten, striking an easy tone in their meeting in China’s capital on Thursday, amid efforts by Beijing and Washington to mend frayed ties.”
China’s Xi tells Kissinger that China-US ties are at a crossroads and stability is still possible / AP
Henry Kissinger’s ‘heart-to-heart’ talks with Xi Jinping in China planned months in advance / SCMP (paywall)
China’s Xi gets nostalgic with ‘old friend’ Kissinger / Nikkei Asia (paywall)
China’s Xi meets ‘old friend’ Kissinger amid U.S. tensions / Bloomberg (paywall)
Xi praises Kissinger’s ‘historic contribution’ to U.S.-China ties / Caixin (paywall)
Frustrated by Biden, China courts ‘old friends’ like Kissinger / NYT (paywall)
Opinion: Xi Jinping is cheering for Trump to win / Nikkei Asia (paywall)
William Pesek writes: “Trump’s chaotic presidency generated a bull market in mini crises for Beijing…But as Chinese growth flatlines, there is growing recognition in Beijing of just how many economic punches current U.S. President Joe Biden is landing on Beijing. Hits that, over time, are causing real economic pain.”
China tries to reassure U.S. amid speculation around missing foreign minister / WSJ (paywall)
“Intrigue is intensifying around the whereabouts of Chinese leader Xi Jinping’s handpicked foreign minister, with Beijing assuring Washington the recent thaw in high-level contacts will continue despite the diplomat’s absence from public view.”

Saudi Arabia
From AI to dates, China and Saudi Arabia explore new oases beyond oil, but obstacles remain / SCMP (paywall)
“Following President Xi Jinping’s state visit to Riyadh in December, China and Saudi Arabia have repeatedly described bilateral relations as being at ‘the best stage ever’ amid their respective fraying relations with the United States.”

Germany
Germany’s China strategy has limited impact on bilateral trade and investment / Caixin (paywall)
“Germany’s first-ever China strategy reflects the country’s increased emphasis on reducing economic dependence on its largest trading partner, but the document remains vague on specific measures, making its impact on bilateral trade and investment limited, sources told Caixin.”

Turkey
China cautiously eyes defense production opportunities with NATO member Turkey / SCMP (paywall)
“China’s defense industry is exploring options to set up production in Turkey to expand its international market share, but will weigh the potential risks in its expansion drive, Chinese analysts said.”

Russia
China, Russia begin joint drills in Sea of Japan / Reuters
“China and Russia have begun their joint naval and air drills in the Sea of Japan, Chinese state media CCTV reported on Thursday.”
Chinese consular building damaged in Russian attack on Ukraine’s Odesa – governor / Reuters
“A building at the Chinese consulate in Odesa was damaged in a Russian missile and drone attack on the southern Ukrainian port city, regional governor Oleh Kiper said on Thursday.”
China imports record volumes of Russian oil in first half of 2023 / FT (paywall)
“China is importing record volumes of oil despite a weak economy as it takes advantage of cheap Russian crude to build stockpiles and export refined products.”
China swallows record flows of Russian oil and coal as war drags / Bloomberg (paywall)

SOCIETY AND CULTURE:

Pop music
Popstar Jay Chou’s fans fume as scalpers cash in on concert hype / Sixth Tone
“Tickets for the Taiwanese singer’s shows are being resold online for a staggering 150,000 yuan ($21,000), sparking outrage on social media.”

Social media
Chinese livestreamers set their sights on TikTok sales to shoppers in the U.S. and Europe / AP
“Chinese livestreamers have set their sights on TikTok shoppers in the U.S. and Europe, hawking everything from bags and apparel to crystals with their eyes on a potentially lucrative market, despite uncertainties over the platform’s future in the U.S. and elsewhere.”