Zero COVID cannot be questioned, insists the Politburo—regardless of economic consequences. Facing an ever louder public, the Party threatens repercussions for any voice that ‘distorts, questions, or denies’ the policy. Zero COVID-19 thus remains Beijing’s last word on the subject. On 25 May Li Keqiang addressed some 100,000 state cadres in a teleconference on the economy in a clear effort to take the pressure off them.
Eight localities are failing to bring down undisclosed debt, reported the Ministry of Finance on 18 May 2022. State media broadcast the report, as the ministry pledged to move on to other over-leveraged regions. As the stakes rose, some officials were demoted rather than merely warned or served written demerits. Intensive media coverage signals Beijing’s renewed push to stop the bleeding. Follow-up cases and harsher measures continue to be mooted.
Trade growth was strong in 2021, but the outlook has soured as overseas demand fades under easing quarantine and fierce Southeast Asian rivalry threatens manufacturing. Doubling down on the internal ring of the dual circulation model, the State Council issued Opinions on integrating production for domestic and export markets in January 2022. But for all the policy support the centre may offer firms, their immediate concerns mount as to where local orders will come from.
Upwards of C¥500 tn in green and low carbon investment will be needed over the next 30 years, warns green finance advocate Ma Jun 马骏 Institute of Finance and Sustainability. In line with state efforts, green financial services have prospered in recent years. Despite mounting economic troubles, domestic green bond offerings exceeded C¥600 bn in 2021, up 180 percent, with a balance totalling C¥1.1 tn.
County towns are to be the backbone of a new wave of urbanisation. The shift signals bolder tweaking of the hukou system. Reforms have in recent years sought to manage massive demographic change. The State Council is confident that counties will provide a bridge between China’s great metropolises and its villages. But local vested interests notoriously block the way.
Prompted by international probes into PRC firms, sweeping corporate compliance reforms are bringing struggling SMEs to heel at home. While not officially aligning with US-led sanctions, Beijing is bound to dig deeper to stay on par with international business norms—legal experts advise companies to make compliance preparations in high-risk fields involving Russia.
The potential economic crisis Beijing faces was underscored in Politburo meetings before and after the 1 May holiday. Slowing dramatically in March, early April data shows an even worse economic performance. To ensure strong growth for the remainder of 2022, Beijing looks set for still more macro-policy easing than signalled earlier. Yet overall COVID policy will not ease.
Guidelines for building a digital government were adopted by the top Party reform group, chaired by Xi Jinping, on 19 April 2022. It marks the latest push for radical digitalisation of state services and management. Digital government, a.k.a. e-government, aligns with the ideal of a national market as opposed to the existing fragmented regional picture.
Omicron is resurging across the country. Harsh containment in Shanghai and the Yangtze River Delta has been headlined worldwide, along with disrupted inland truck transport and log-jammed container ships along the east coast. Beijing is bracing for similar travails. Supermarket shelves are empty(ing) and traffic is seizing up as cars queue to leave the city.
Clean energy will likely remain a globally interdependent field over the next few decades. Trends in energy trade with China, shaped by carbon neutrality, energy security and import diversification goals, are the focus of our sixth China Executive Briefing paper. keeping the lights on for 1.4 billion
Odds are poor for revitalising the rural sector in 2022. Investing in fixed assets in rural communities was up barely 7 percent y-o-y in Q1, dipping from a mean of 13 percent in 2020 and 2021. COVID woes and pork price slides were the main culprits, suggests MARA (Ministry of Agriculture and Rural Affairs) in summing up the Q1 rural economy. The outlook for 2022, it confirmed, is bleak.
Cases of tampering with emissions data and sloppy checking multiplied in early 2022. Faking the data hurts the decarbonisation cause; the product being traded—CEAs (carbon emissions allowances)—must be trusted for the market to work.