HEARD IN BEIJING
"Both the importance and difficulty of reform lie in implementation."
- Xi Jinping, CCP General Secretary
Some context: Xi said that at the most recent meeting of the Party’s Deepening Reform group – which is the most important policymaking body in China. Get to know that entity and what it talked about this week by reading the Tip Sheet below.
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Happy Friday, everybody! What a week. Take a well-deserved rest this weekend, but if you get a minute, make sure to send us your Tip Sheet comments.
Quick reminder: The Tip Sheet will be off on Monday, as it is a holiday in China.
THE TIP SHEET
DRIVING THE DAY
1. Another one bites the dust
Nur Bekri, head of the National Energy Administration since 2014, is done.
When Bekri arrived in Beijing on Thursday after a trip to Moscow, he was greeted at the airport by discipline officials.
Some context: He is the first sitting ministerial-level official investigated since the 19th Party Congress, which took place last October.
Bekri’s detention comes as no surprise. His downfall was foretold when he was not re-appointed to the Central Committee at that very 19th Party Congress.
Get this: When Bekri was appointed to the Central Committee in 2012, he was one of only nine officials born after 1960. That marked him as a potential future leader. He is now the third of those nine to be purged (the other two were former Chongqing Party chief Sun Zhengcai and former Fujian governor Su Shulin).
Get smart: Many once-rising political stars have fallen during Xi Jinping’s reign.
Get smarter: There used to be a convention that officials who rose early would basically get a guaranteed fast track for promotion going forward. Xi Jinping is changing that.
DRIVING THE DAY, CONT'D
2. Top leaders to focus on immediate challenges
On Thursday, Xi Jinping chaired a meeting of the Central Committee for Deepening Reform (CCDR)
Some context: The CCDR is the Party’s most important policymaking body.
As usual, the meeting approved a slew of documents (Xinhua):
Opinions on promoting high-quality developmentOpinions on establishing more effective mechanisms for coordinated regional developmentMeasures to support reform and innovation in pilot free trade zonesOpinions on improving regulation of systemically important financial institutionsOpinions on improving the national vaccine regulation systemOpinions on better coordinating development plansOpinions on developing modern agricultureOur thought: Those documents read like a laundry list of the Party’s anxieties.
Xi told everybody that implementation is pressing: “[We must] resolutely and immediately address the major problems affecting the masses.”“[We should] put more energy and efforts into implementation…solving real problems.”
Get smart: What the CCDR discusses today becomes official policy tomorrow. The documents enumerated above will likely show up as government policies in the coming months.
Get smarter: All indications are that Xi is still frustrated by a lack of implementation. It doesn’t matter what the policy is if nobody implements it.
Xinhua: Xi calls for focusing reforms on solving practical problems
FINANCE AND ECONOMICS
3. PBoC threads the offshore needle
China’s central bank (PBoC) signed an agreement with the Hong Kong Monetary Authority on Thursday that paves the way for the PBoC to issue central bank bills in Hong Kong.
Some context: Central bank bills are a monetary policy instrument that central banks can use to managing outstanding liquidity.
There’s a three-part benefit of the PBoC starting to issue these instruments in Hong Kong now:
They will provide a new type of offshore RMB asset, hopefully adding some oomph to the sputtering RMB internationalization programThey will help to build a more reliable offshore RMB-denominated yield curveAny initial issuance will soak up RMB liquidity in Hong Kong, making it harder to speculate against the currency
Our take: This one is a no-brainer. The PBoC gets to build the offshore RMB market, while also shoring up the currency in the short term. What’s not to like?
Get smart: The move is part and parcel of the PBoC’s efforts to step up currency intervention.
Caijing: 调控海外人民币 央行票据“出海”香港离岸市场
POLITICS & POLICY
4. China wants to boost domestic consumption
On Wednesday, Premier Li Keqiang mentioned that China’s huge market gives the country a serious advantage (see yesterday’s Tip Sheet).
It’s a true statement. But it underscores that the potential size of the market will remain just that – potential – unless policymakers can find a way to tap into it.
That’s why yesterday, the Party and the State Council jointly released a document looking to unleash consumer potential.
Some context: The Central Committee for Deepening Reform approved the document last time they met, in July. They want to see consumption growth in many areas, including property rental, cars, information, and tech products.
Here are the key goals (gov.cn):
"The guideline aims to increase supplies of high-quality products and services, better protect the legal rights of consumers and give them independence in choices."
What it means: Protecting consumer rights means that we are going to see stricter standards for consumer goods, and more oversight of producers. That’s a big positive for consumers in China, but a continued compliance headache for businesses.
POLITICS & POLICY
5. China is cutting foreign influence
China’s government is clamping down on foreign content – on many fronts.
As a measure of how serious things are: Just this week, one of China’s censors, the National Radio and Television Administration (NRTA), published draft regulations meant to further squeeze the space for foreign content on broadcast channels and internet feeds.
Tighten approval for foreign movies, TV series, cartoons, documentaries, and other contentPut an overall cap on foreign content and a ban on foreign content during prime-time television.
Get this: At almost the exact same time NRTA published its draft, the Ministry of Education started a campaign to rectify the fact that government-approved textbooks had recently been replaced with foreign textbooks (The Paper).
Get smart: China continues to forge ahead on a closing ideological path – that is for sure.
What to watch: About seven million students enrolled in domestic colleges in 2017. At the same time, more than 600 thousand students went abroad to study. That’s not a small foreign influence. Will the government start to curb overseas study?
FT: China broadcast regulator calls for new foreign content controls
The Paper: 教育部：坚决清理以境外课程教材替代国家课程教材行为
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