roundup from our portfolios

The PRC’s third historical resolution, generated by the recent 6th Party Plenum, has proclaimed a new era, shifting from economic development via reform and opening to ‘national rejuvenation’. We interpret it as a switch from neo-liberalism to neo-socialism with risk-averse ‘baseline thinking’ in the subtext.

As 2021 winds down and December’s Central Economic Work Conference nears, debate over next year’s economy is warming, with speculation on possible easing of monetary policy. Reference to ‘normal’ monetary policy was removed from PBoC’s Monetary Policy Report for Q3, signalling more shifts are on the way. Yet touted ‘targeting’ of support to SMEs is likely to be the way forward. The other major easing debate is on real estate policy. November saw ever more cities enact price floors as real estate policies diverge based on city size. The PBoC is marginally easing real estate lending.

Bringing listed companies under ever closer scrutiny, a November judgement in Guangzhou identifies management, auditors, independent directors etc as liable for compensation in securities fraud.

Data and cyber security laws, already on the books, will soon come into force, with the Cyber Administration calling for comment on detailed regs. The new cyber regime looms over all online data transactions. Platforms will face tough obligations and big penalties.

Beijing has applied to join the Digital Economic Partnership Agreement. As yet small scale (Chile, Singapore and NZ), Beijing’s interest underlines its ambition to set the rules for the global digital economy.

Depoliticising US-China trade and more exchanges on macroeconomy were agreed at the virtual meeting between Xi and Biden on 16 November. The 4th China International Import Expo was held in Shanghai from 5-10 Nov 2021 aiming to diversify sources of critical products. October exports outperformed market expectations, but rising global energy and commodity prices squeezed domestic production.

Industrial sector 14th 5-year plans have appeared. A designated plan for the ICT sector is, unsurprisingly, sombre about supply chain bottlenecks, domesticating big tech, and data security. Among its concerns

  • 5G (under commercialisation pressure)
  • data centres (facing planning and overcapacity concerns)
  • industrial internet (still only pilots and piecemeal solutions)

The metaverse, hyped among tech giants, has incurred a warning from state media.

A new wave of support has been offered to the myriad highly specialised manufacturing and IT SMEs. Local governments are expected to offer one-to-one tailored support, from IPO listing to management consulting.

Not fantastical targets and ‘empty words’, but realistic pledges and plans for achieving them should be the focus of climate action, according to the PRC delegation to Glasgow’s COP26. Beijing did not up its offer on Nationally-determined Contributions and was absent from new commitments on coal and methane, but joined an agreement to halt forest loss by 2030.

Climate change remains a beacon of hoped-for cooperation in the US-China bilateral relationship, following the joint declaration at the COP. Promising collaboration on

  • circular economy
  • electrification
  • carbon capture, utilisation and storage

the text commits China to produce its first-ever national methane emissions action plan before COP27 in 2022. The announcement dissolved fears that bilateral tension would prevent success at COP26. In the conference’s dying minutes, however, China partnered with India to dilute language targeting coal use in the Glasgow Climate Pact: ‘phase out’ was changed to ‘phase down’, provoking the ire of small island states and wealthy European ones alike.

A regulatory overhaul is paving the way for GM crops to finally become commercial. Leading seed companies (such as Syngenta, Dabeinong and Longping High Tech), whose GM seeds have already received biosafety approval, are expected to go commercial by 2023. Large-scale production of GM corn and soybean may restructure the market for feed grains.

The ‘zero-COVID’ policy continues with widening regional gaps. The National Health Commission promises high-quality, efficient public hospitals by 2025. A national plan pledges to better balance resource allocation and clinical research and capacity to treat communicable and non-communicable diseases.

Changing socio-economic contexts and incidents reported on social media this month highlight animal cruelty, flagging the need for policy moves.

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two centenary goals 两个一百年 liǎngge yìbǎinián

a strong country and prosperity for all by 2049
a strong country and prosperity for all by 2049

Buzz-phrase first heard at the 15th National Party Congress (1997), is a Xi era staple, summarising his entire political agenda under two goals

1. 2021: CPC centenary; due date for a ‘moderately prosperous’ society

2. 2049: PRC centenary; due date for ‘great national rejuvenation’ as a ‘wealthy, strong, democratic, civilised, harmonious, and modern socialist great power’

Efforts now focus on goal two, goal one having passed and been deemed a triumph. 2035, when the PRC should be ‘basically modernised’, was identified as the halfway point at the 2021 Two Sessions. It was rendered still more active in policy terms following the celebrated ‘important’ speech (perhaps the most important for a long time) by Xi on 1 July 2021 at the Party centenary and the Historical Resolution bought down by the 6th Plenum of the 19th Central Committee. Virtually nothing moves in the policy space without reference to these goals.

featured analysis

entertaining core values

post 6th plenum: can Xi reengineer public values?

For the best part of a decade Xi has poured resources into building his grand rejuvenation narrative, characterised by PRC-style puritanism and a system of pre-modern hierarchy in the service of building national strength. The resulting political order wins legitimacy by countering moral decay and corruption. The state demands that recently liberalised personal spaces, above all online and on stage, now reflect approved values only. The resulting nanny state is not new, but is empowering new modes of state intrusion. full post open access →

november policy movers

policy professionals in and out of the establishment

Yi Gang 易纲 | People’s Bank of China governor

Hitting the speech circuit in November, Yi has been vocal on PBoC’s digital currency and fintech development, not least the issue of personal data protection. New tech, while making financial services more inclusive, gives big tech unwarranted access to collect, use and disclose client information. The central bank will keep working with agencies to push for ethical regulation of personal data. Regarding PBoC’s own digital currency, Yi notes 123 million digital-currency personal wallets have been set up, with a total transaction volume of 56 bn. PBoC hopes to improve cooperation with existing mobile payment systems.

Yi Gang holds a PhD in economics from the University of Illinois, and taught at Indiana University 1986–94. After returning to work at Peking University, he transferred to PBoC in 1997, where he replaced Zhou Xiaochuan as governor of the PRC’s central bank. Traditionally viewed as a close ally of Vice Premier Liu He 刘鹤, in times of economic troubles Yi has been a scapegoat, despite not having the independence afforded to central banks in other countries.

Lyu Jian 吕建 | Nanjing University president

Strategic tech development was addressed by Lyu at the October 2021 Politburo collective study session. Sure of his material, he has often spoken on the value of tech breakthroughs for modernising and digitally transforming the PRC.

Beyond his national vision, as president of Nanjing University, Lyu also speaks frequently on the regional implications of tech research and innovation, not least with regard to Jiangsu province and the Yangtze River Delta.

As an educator, he highlights the need for scitech students to be adequately trained to work in industry, urging more intern places. Lyu also accepts the importance of basic research in scitech education and innovation and highlights the need for synergy between research and industry.

A software engineer by training, Lyu is a Chinese Academy of Sciences member and a National People’s Congress delegate. He has spent his whole career at Nanjing University, eventually becoming part of its management team in 2010 and president in 2018.

Xie Zhenhua 解振华 | China's special climate change envoy

In Xi Jinping’s absence, Xie was Beijing’s top authority at COP26. Despite formulaic digs at Western hypocrisy, he is a true believer in cooperation. He met online with John Kerry US special climate envoy almost daily in the lead up to COP26; the new joint declaration was the result. Stridently defending China’s absence from global agreements on coal and methane, Xie argues that ‘China does not just talk, we act practically. We don’t just set targets, we set associated policy measures, actions, investments, timelines and roadmaps. We must do what we say, because only this will reflect the intensity of our campaign’.

Former NDRC (National Development and Reform Commission) deputy director and head of the defunct State Environmental Protection Agency, Xie rose to become China’s pre-eminent climate diplomat. A veteran negotiator, he helped broker the Paris Agreement and was appointed special climate envoy in February 2021, right after Joe Biden promoted John Kerry to the equivalent position in the US.

policy ticker highlights

gems from our feed of policy releases and domestic debate


resolution on major achievements and historical experience of the Party over past century

State Council | 16 November

context: The resolution follows the principles of the 6th Plenum’s communique. It confirms the conclusion of the two previous resolutions, especially the critical conclusion on Mao’s mistakes like the Cultural Revolution, signaling the Party will never go back to radical leftism. But the resolution mentioned problems remaining from the reform and opening-up era, to legitimise the birth of the New Era. The resolution stressed that in the New Era cadre and talent selection should abandon the ‘focus on age’.


rhetorical shifts in Q3 monetary policy report

People’s Bank of China, Jiemian, Caixin, Sina Finance | 21 November

context: Rising concerns over the economy are barely concealed in the latest report from the central bank, which has refrained from substantial easing so far into the pandenmic. Massive easing is still unlikely as it could jeopardise the structural transition to a green, quality-growth model. Rhetorical shifts may nonetheless signal further stablising efforts and possibilities for loosening in particular sectors.

trade policy

Beijing suggests open WTO negotiations on digital trade rules

State Council Information Office, Sohu | 28 October

context: As China celebrates the 20th anniversary of its accession to the WTO, it continues to receive criticism on its unfair trade practices in SOEs subsidies, unilateral trade sanctions, IPR infringements and other trade-distorting measures as harming the global trade system. Despite a recent MoF (Ministry of Finance) announcement opposing discrimination against foreign firms in government procurement activities, China still does not meet the membership requirements of WTO’s Government Procurement Agreement after submitting applications on seven occasions.

science and innovation

metaverse and NFT hype questioned by state media

Xinhua Net (1), Xinhua Net (2), Sina Finance, China National Radio | 25 November

context: Metaverse—an immerse virtual world connected but parallel to reality—and NFTs (non-fungible tokens)—essentially a certification technology for digital assets—are among some of the more prominent areas of interest in the global tech community, not least due to Facebook’s high-profile rebranding as Meta. Enthusiasts suggest that it could be the next-generation internet, a trillion-dollar market where people are better connected in a virtual space, while other pundits see it as another opportunity for tech giants to monopolise private data.

energy and environment

US and China issue joint declaration on climate change at COP26

Yicai | 11 November

context: Although new concrete details are scarce in this declaration, its main purpose will be to dissolve fears that bilateral tensions will stand in the way of success at COP26, as well as building momentum behind the two countries’ cooperation, paving the way for future meetings and stronger engagement. It also reaffirms that climate change may be considered a standalone issue in the bilateral relationship.


regulatory updates pave the way for GMO commercialisation

Finance World, Ministry of Agriculture (1), Ministry of Agriculture (2) | 12 November

context: Downplaying the special status of GMO (genetically modified organisms), the new regulations incorporate GMO variety and production review with that of common varieties and streamline the admin process. Once a GM variety passes its biosafety assessment, it will be easier to obtain approval for commercialisation. Forerunners in this field, who have already received their biosafety certificates, will benefit from the regulatory leap forward.


leading epidemiologist says COVID-19 measures to be normalised

Sohu | 8 November

context: There is rising public discontent with the recent scaling-up of COVID-19 prevention measures across localities. Experts are now calling to end anti-COVID-19 campaigns and let public health governance return to normal.

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