Amidst tension over the CCP leadership’s approach to the US-China trade war, the Politburo met to discuss the economy this week, where it was noted that the economy was was experiencing new challenges due to the external environment. Official reports and commentary on the meeting set a confident tone however, describing the economy as “steady amidst changes.”
Following the meeting, the Politburo held a collective study session on suspending the military’s profit-making services in order to “focus the military on preparing for and fighting wars.” The day before the study session, the PLA Daily’s Xie Xinping column published an article declaring that “the military exists for fighting wars.”
Yang Jiechi published an article in Qiushi in support of Xi Jinping’s diplomatic thought, in which he made clear that the overall purpose of diplomacy is to safeguard the power of the CCP.
The CCDI and NSC reported that former Hebei Provincial Committee of the Chinese People’s Political Consultative Conference (CPPCC) Vice Chairman Ai Wenli (艾文礼) had surrendered himself to the law, holding up the development as proof of the effectiveness of the anti-corruption campaign.
Li Keqiang Conducts Inspection Tour of Tibet
7.28 Li Keqiang conducted an inspection tour of Tibet on 25-27 July. In Nyingchi, he stressed that “development is key to poverty alleviation in Tibet” and called for “conscientiously strengthening ecological construction and supporting sustainable development for the whole country.” In Shannan, he visited a construction site for the Sichuan-Tibet railway, where he stated that the project “is of major importance to development and ecological protection in Tibet and is also helping to cultivate new drivers of development in Tibet.”
Li also visited two major Tibetan Buddhist sites in Lhasa. At Jokhang Temple, he emphasized that “Tibet has been an inalienable part of China’s sacred territory since ancient times” and expressed his hope that “religious figures will continue to contribute to defending national unity and promoting ethnic solidarity and social harmony.” While performing an inspection on the preservation of cultural relics at Potala Palace, he indicated that “the state will increase its support of research on precious documents and promote cultural inheritance and exchange.”
Politburo Meets to Discuss the Economy
7.31 The Politburo of the CCP Central Committee held a meeting to discuss the current economic situation and economic work for the second half of 2018 as well as to review the “Regulations on Disciplinary Actions by the Communist Party of China” (released earlier this month).
The body noted that “At present, the economy… is confronting some new problems and new challenges and the external environment is experiencing clear changes.” It then listed a series of “arduous tasks” (i.e. “maintaining the stability of the general economic and social situation, thoroughly pushing forward supply-side structural reform, fighting the ‘three tough battles’ well, accelerating the construction of a modern economic system, and promoting high-quality development”) and “painstaking jobs” (i.e. “adhering to the general keynote of making progress while ensuring stability, maintaining economic operations in a reasonable range, strengthening the coordination of overall planning, forming policy synergies, and precisely carrying out policy”) for the second half of the year.
The body made six requirements on the subject of economic work, summarized as follows:
Maintain stable and healthy economic development, implement proactive monetary policy and prudent fiscal policy, and improve the farsightedness, flexibility, and effectiveness of economic policies. Included in this demand was the need to “protect the legitimate rights and interests of foreign-funded enterprises in China.”
Focus the main task of deepening supply-side structural reform on fixing its shortcomings, which can be pursued through the infrastructure sector.
Simultaneously mitigate financial risk and empower the real economy.
Promote reform and opening up and continue to launch a number of effective reform initiatives.
Resolve problems in the real estate market and curb the rise in housing prices.
Deepen social stability and secure the people’s livelihood.
Xi Jinping: Resolutely Carry Out the Termination of Military’s Profit-Making Services
7.31 The CCP Politburo held its seventh collective study session on suspending the military’s profit-making services. Xi Jinping presided over the session and emphasized that “terminating all military’s paid services is a critical decision made by the Party Central Committee and the Central Military Commission with the goal to reinforce the military.” He pointed out that advancing the work has “given a vigorous boost to strictly and comprehensively ruling the Party and the army, focusing the military on preparing for and fighting wars, and defending the unity of the military, state, and people, and the overall development of the economy and society.” Xi emphasized that the work has to be done before the end of this year. Leadership Group Office for Phasing Out Profit-making Service of Military Executive Vice Director (军队全面停止有偿服务工作领导小组办公室) Hu Xiaohua (胡晓华) attended and explained the work during the session.
Zhong Sheng: Work Hard to Let the Second “Golden Decade” Shine
7.28 The People’s Daily used its Zhong Sheng (钟声) column, which authoritatively transmits the opinions of the People’s Daily on matters of international affairs, to discuss the implications of last week’s BRICS Summit, particularly how BRICS countries can take a guiding role in “adjusting the world order.”
The article said that developing countries have received the brunt of recent changes in the international situation: the intensification of geopolitical conflicts, protectionism, and unilateralism. As representatives of developing countries and emerging market economies, the article said that BRICS countries “firmly oppose protectionism, maintain international multilateral rules, advocate win-win cooperation, and not only in order to safeguard their own development interests, but also to let the voice of fairness and justice play a more constructive role in the international arena.”
Zhong Sheng: A New Journey of Unity and Cooperation, A New Phase of South-South Cooperation
7.30 The People’s Daily published a commentary under the pen name Zhong Sheng (钟声) saying that Xi Jinping’s state visits to the UAE, Senegal, Rwanda, South Africa, participation to the BRICS summit, and friendly visit to Mauritius have shown a new and more vigorous phase of “South-South Cooperation” and “added positive energy to improving global governance.” The commentary stressed that “China, as a developing country, fully understands the desire for Middle Eastern and African countries to develop” and that “[China] is willing to make effort to reinforce the unity and cooperation with these countries.”
Zhong Sheng: Return Clear Skies to the International Trade Environment
7.30 The People’s Daily published a Zhong Sheng article criticizing the United States for its role in its ongoing trade dispute with China. The article accused the US of “recklessly smearing China’s economic model and attempting to use the demonization of China as a pretext for its unilateralist actions” at the 26 July meeting of the World Trade Organization’s General Council. It continued by stating that “For some time, the US has been unilaterally provoking a trade war, severely damaging the rules-based multilateral trade system, and receiving the universal condemnation of the international community.”
In contrast, the article praised Chinese trade practices, citing the recently issued White Paper on China and the World Trade Organization, which it claimed “used full and accurate data to prove that China has conscientiously fulfilled every commitment related to entering the World Trade Organization and, in addition, will open up further,” to bolster this argument. It also stressed that the US’ attempts to make China compromise or surrender by creating difficulties in international organizations will be as ineffective as American “trade blackmail” since China “will resolutely defend national core interests and the Chinese people’s interests.”
Central Organization and Propaganda Departments Release a Notice on Deeply Conducting the “Promote the Spirit of Patriotic Struggle, and Achieve Accomplishment in the New Era” Campaign Among the Intellectuals
7.31 The Central Organization Department and Propaganda Department jointly recently released a notice regarding deeply conducting the “promote the spirit of patriotic struggle, and achieve accomplishment in the new era” campaign among intellectuals (关于在广大知识分子中深入开展“弘扬爱国奋斗精神、建功立业新时代”活动的通知). The notice emphasized that each department and unit in each region must reinforce “ideological identification, emotional identification, and value identification” (思想认同、情感认同、价值认同) with the spirit of patriotic struggle and the goals of the Party and the country. The notice demands each region, department, and unit make a concrete implementation plan according to the notice and strengthen their organizational leadership.
Politburo Sets the Tone for China’s Economy: How to Respond to “Steady Change”
7.31 A commentary from China News Agency reflected on the Politburo meeting and stated that the Chinese economy overall maintained stability for the first half of 2018, but new challenges have emerged due to external factors. The article noted that the Politburo meeting described China’s economy for the first half of 2018 as being “overall steady, and steadily improving” (总体平稳、稳中向好), further noting that GDP grew by 6.8%, making it the 12th quarter to see a year-on-year increase between 6.7% - 6.9%.
However, the meeting described the current economy as “steady amidst changes” (稳中有变), based on both new challenges and external factors, with the goal put forward to keep the economy steady. The article states that the official meeting disclosure uses the character for “steady” (稳) more than ten times when outlining plans for China’s economy in the second half of the year.
Yang Jiechi: Take Xi Jinping’s Diplomatic Thought as a Guide, Deeply Push Forward Foreign Affairs Work in the New Era
8.1 Politburo member and former Foreign Minister Yang Jiechi (杨洁篪) penned an article in Qiushi (Seeking Truth), the Central Committee’s theoretical journal, on the significance of Xi Jinping’s diplomatic thought in the new era.
He explained that Xi Jinping’s diplomatic thought takes the “ten insists” (十个坚持) as the overall framework: 1) insist on defending the CCP Central Committee’s authority in order to reinforce the Party’s centralized and unified leadership over foreign affairs work, 2) insist on realizing the goal of the great rejuvenation of the Chinese nation and promote major country diplomacy with Chinese characteristics, 3) insist on building a community of shared future for mankind with the aim of safeguarding world peace and promoting common development, 4) insist on the socialism with Chinese characteristics as the foundation to enhance strategic self-confidence, 5) insist on achieving shared growth through discussion and collaboration (共商共建共享原则) as the principle for promoting the construction of the Belt and Road, 6) insist on the path of peaceful development based on mutual respect, cooperation, and mutual benefit, 7) build a global partnership based on deepening the diplomatic layout (外交布局) (form a “circle of friends” all over the world), 8) insist on using the concept of fairness and justice to lead the global governance system reform, 9) insist upon national core interests as the bottom line for safeguarding national sovereignty, security, and development interests, 10) insist on combining the fine tradition of Chinese diplomatic work and the characteristics of the times as the direction for molding the unique style of Chinese diplomacy.
Yang’s article particularly emphasized upholding the authority of the Central Committee in Chinese diplomacy, and made clear that foreign affairs work must safeguard the leadership of the CCP.
U.S. Threats to Increase Tariffs will have a Limited Impact on China’s Economy: An Interview with Liang Ming, Director of the Ministry of Commerce CAITEC International Trade Institute
China Economic Daily
8.3 Despite returning to bilateral negotiations, the US recently announced plans to raise previously announced tariffs on $200 billion USD worth of Chinese goods from 10% to 25%. Director of the Institute of International Trade at the Chinese Academy of International Trade and Economic Cooperation (CAITEC) under the Ministry of Commerce (商务部研究院对外贸易研究所) Liang Ming (梁明) told China Economic Daily that since the beginning of US-China trade frictions the US has behaved inconsistently and often reversed course, which reflects inconsistencies among US stakeholders. Even were the tariffs to be put in place, Liang Ming reassured the impact on China’s economy would be limited. He estimated that, with 10% tariff, China would only see a $25 billion USD worth reduction of exports to the US and GDP growth would be affected by only 0.2 percentage points. The effective difference between a 10% or 25% tariff would be negligible.
Liang Ming noted that the US led trade war is harming US companies and consumers, specifically naming Coca-Cola and Harley-Davidson among companies affected by steel and aluminum tariffs. He advised the most important things China could do in the face of a trade war would be to focus on cultivating and strengthening the domestic economy, expanding domestic demand, investing in infrastructure, and diversifying export markets through initiatives such as the Belt and Road Initiative.
UNITED FRONT WORK
Sixth Meeting of the National Religious Organization Joint Conference Convened In Beijing
United Front Work Department
7.31 The sixth meeting of the national religious organization joint conference was convened in Beijing. All national religious organizations, alongside the National Council of YMCAs/YWCAs of China, jointly released a list of suggestions relating to the display of the national flag at religious centers.
Among other points, the joint-declaration stated that “religious figures and the religious masses must respect and cherish the national flag, increase consciousness of the national flag, and uphold the sanctity of the national flag” and “earnestly organize to study the constitution and the National Flag Law.”
United Front Work Department: Use Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as a Guide to Give Impetus to United Front Work for a New Era
8.1 Qiushi (Seeking Truth) published an article authored by the United Front Work Department (UFWD) on the importance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in the department’s work. In it, the UFWD praised Xi Jinping Thought for being “systematically faultless, logically tight, and internally unified” and declared that “In the new era, the united front must be based on the requirements of General Secretary Xi Jinping.”
The article called for deeply studying and implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to meet three goals, namely “continuously consolidating the common ideological and political foundation of united front solidarity and struggle,” “working hard to unite hearts and efforts around the central work of the Party and country,” and “steadily progressing in the innovative development of every area of united front work.”
54th Suspect on China’s Interpol Red Notice List, Zhang Yongguang, Returns to China
7.28 Former local police officer of Nanshan district police station in Shenzhen Zhang Yongguang (张勇光) returned to China from the United States to face charges for bribery.
Lu Wei, Mo Jiancheng, and Zheng Jiehui Prosecuted for Bribery
7.30 The CCDI announced that former deputy head of the Central Propaganda Department Lu Wei (鲁炜), former Ministry of Finance Discipline Inspection Team Group Leader Mo Jiancheng (莫建成) and former Hebei People’s Congress Standing Committee vice chairman Zhang Jiehui (张杰辉) were all prosecuted for bribery.
Violations of the Eight-Point Guidelines in June 2018
7.30 The Central Commission for Discipline Inspection (CCDI) released figures for violations of the eight-point guidelines (中央八项规定) in June 2018. The month saw 6,692 investigations, 9,519 punished individuals, and 6,802 individuals receiving Party and governmental disciplinary actions. The most common violations in all three categories were granting subsidies and benefits, sending and receiving gifts or money, dining out with public funds, and misuse of public vehicles. The cumulative figures for the first six months of 2018 were 25,677 investigations, 36,618 punished individuals, and 26,029 individuals receiving Party and governmental disciplinary actions.
CCDI Commentary: Ai Wenli’s Surrender Shows the Intimidation of and Reverence for Discipline and Law
7.31 A few hours after the CCDI and the National Supervision Commission (NSC) reported that former Hebei Provincial Committee of the Chinese People’s Political Consultative Conference (CPPCC) Vice Chairman Ai Wenli (艾文礼), suspected of serious discipline and law violations, had surrendered himself to the law, the CCDI and and NSC published a special commentary on the subject.
The commentary highlighted that Ai is the first provincial and ministerial-level cadre who surrendered himself after the implementation of the National Supervision Law, stating that “this is the first time the CCDI and NSC website used the expression ‘has surrendered (已投案自首)’ when announcing investigation on a centrally managed cadre,” and that Ai’s case demonstrates the “outstanding accomplishments” of anti-corruption work. The commentary concluded that Communist Party members that have done wrong must “be loyal to the Party,” and take it upon themselves to explain themselves and return to the correct course.
CENTRAL MILITARY COMMISSION
Xie Xinping: The Military Exists for Fighting Wars
7.30 A commentary published under the pen name Xie Xinping (解辛平), which authoritatively speaks on behalf of PLA Daily through its collectively written articles, stressed that “only with sharp blades of swords can the security and peace at home be safeguarded,” “behind every powerful country, there is always a strong army,” and that “the military’s greatest value is winning.”
It pointed out that China’s peripheral security situation is unstable, highlighting the South China Sea, Senkaku Islands, and Taiwan. It also stressed that separatist forces in Xinjiang, Tibet, and Hong Kong are getting restless and that China’s attitude is “clear and firm on issues related to China’s sovereignty and territorial integrity.” At the end, the commentary said that Xi Jinping treats trainings and preparing for war as the strategic choice to reshape the military and has led the military to focus back on its main duty in the new era.
CMC Publishes Regulations on the Implementation of Party Supervision and Accountability Work of the Military
8.1 The Central Military Commission (CMC) released two new sets of regulations on the implementation of Party supervision within the military and the military’s implementation of the Party accountability work. Among other factors, the first set of regulations focused on the unification of the supervisory bodies, duties, and measures, establishing unified leadership by the CMC, and different levels of responsibility for supervision from the grassroots level to the Party Committees. The second set of regulations is centered on the point that authority comes with responsibility, duty requires the assumption of activities, and the failure to carry out one’s duties requires investigation.
Qiushi Commentator Article: Under the Guidance of Xi Jinping Strong Military Thought, Strive to Comprehensively Build a World-Class Military
8.1 Qiushi published a commentator article celebrating the 91st anniversary of the founding of the People’s Liberation Army (PLA). It argued that “the march of the people’s army from victory to victory… has ultimately demonstrated the great strength of the Party’s theory of military command in keeping abreast of the times and developing innovatively.”
The article then turned to Xi Jinping Strong Military Thought, praising “the great progress made in the synchronous development of the Party’s innovations in military theory and practice since the 18th Party Congress.” It declared that “to steadily advance along the road to a strong military with Chinese characteristics and realize the goal of comprehensively establishing a world-class military, we must unwaveringly hold high the banner of Xi Jinping Strong Military Thought.”
PLA Daily Editorial: Faithfully Carry Out the Missions and Tasks Bestowed by the Party and People in the New Era - Celebrating the 91st Anniversary of PLA’s Establishment
8.1 On the occasion of the People’s Liberation Army’s (PLA) 91st anniversary, the PLA Daily published a celebratory editorial, which declared that “for 91 years, the People’s Army has been through the smoke and fire of war, continued to overcome obstacles, made enormous sacrifice, obtained glorious victories one after another, and established great historic achievements for the Party and the people under the strong leadership of the CCP.”
The editorial stressed that “every era has its mission. Facing the profound changes in national security environment and the ‘strong country, strong army’ demand of the era, our army has to provide strategic support for consolidating CCP’s leadership and the socialist system, defending the country’s sovereignty, unity, and territorial integrity, expanding our country’s overseas rights and interests, and promoting world peace and development.” The article urged the PLA to “arm itself with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” comprehensively govern the military strictly, and proactively adapt to the changes in international system.
COMPREHENSIVELY DEEPENING REFORM
State Council Issues Opinions on Promoting State-Owned Capital Investment and Operation Companies Pilot Program
7.30 A Xinhua article reprinted on the front pages of both the People’s Daily and China Economic Daily described opinions issued by State Council this week regarding promoting reform pilot program for companies for state-owned capital investment and operation (关于推进国有资本投资、运营公司改革试点的实施意见). The Opinions stated the need to reorganize existing and form new state-owned capital investment and operation companies, reorganize state-owned capital management, and implement market-oriented operations.
The Opinions announced the intention to implement pilot programs for reform on capital investment company management, so as to study and solve possible problems and form a model that is replicable as quickly as possible. State-owned capital investment and operation companies are solely owned by the state, and are meant to serve the national strategy while improving the efficiency and returns on state-run capital. Reforms will include both reorganizing existing entities and creating new capital investment and operation companies. The State Council State-owned Enterprise Reform Leading Group (国务院国有企业改革领导小组) will be responsible for organization, coordination, and supervision of pilot programs. Provincial governments will be responsible for the pilot programs within their regions and report to the State-owned Enterprise Reform Leading Group.
INTERNATIONAL LIAISON WORK
7.25-29 At the invitation of the Communist Party of Vietnam (CPV), Yunnan Provincial Party Committee Standing Committee member and Propaganda Department Head Zhao Jin (赵金) led a CCP delegation to Vietnam. While there, he met with Standing Deputy Head of the Central Commission for Propaganda and Training Commission Võ Văn Phuông and Lâm Đồng Provincial Party Committee Secretary Nguyễn Xuân Tiến as well as held informal talks with Central Commission for External Relations Deputy Head Trần Đắc Lợi.
7.28 International Department Assistant Minister Shen Beili (沈蓓莉) met with a Malaysian delegation led by Minister of Primary Industries and Democratic Action Party Deputy Secretary-General Teresa Kok Suh Sim.
7.29 International Department Vice Minister Guo Yezhou (郭业洲) went to Putrajaya, Malaysia to meet with Malaysian Prime Minister and Chairman of the Pakatan Harapan (Alliance of Hope) Mahathir Mohamad.
7.29 International Department Vice Minister Wang Yajun (王亚军) led a CCP delegation to Kathmandu, Nepal. While there, he met with Prime Minister and Nepal Communist Party Co-chairman Khadga Prasad Oli and leaders from Nepal’s main political parties separately.
7.31 International Department Vice Minister Li Jun (李军) met with the Moroccan Ambassador to China Aziz Mekouar.
7.31 International Department Vice Minister Xu Lüping (徐绿平) met with the General Secretary of Djibouti’s People's Rally for Progress party Ilyas Moussa Dawaleh.
7.31-8.2 At the invitation of the Icelandic Ministry of Foreign Affairs, Wang Yajun led a CCP delegation to Iceland. While there, he met with Minister of Finance and Economic Affairs and Independence Party Chairman Bjarni Benediktsson, former President Ólafur Ragnar Grímsson, and Althing Foreign Affairs Committee Chairwoman Áslaug Arna Sigurbjörnsdóttir as well as held exchanges with Iceland’s main political parties.
8.2 Li Jun met with a Mexican delegation led by Senate Committee on Foreign Affairs Chairwoman Laura Rojas Hernández.
7.31 Luo Dongchuan (罗东川) was appointed a member of the Supreme People’s Court’s Party leadership group.
8.1 Zhuang Rongwen (庄荣文) was appointed head of the Central Cyberspace Affairs Commission Office.
8.1 Liu Liehong (刘烈宏) was appointed deputy head of the Central Cyberspace Affairs Commission Office.
8.1 Huang Xiaowei (黄晓薇) was appointed secretary of the All-China Women's Federation’s Party leadership group.
8.2 Zhu Hexin (朱鹤新) was appointed a member of the People’s Bank of China’s Party committee.
8.2 Xuan Changneng (宣昌能) was appointed deputy head of the State Administration of Foreign Exchange.
8.2 Wen Gang (温刚) was appointed chairman of the China North Industries Group Corporation Limited.
8.3 Du Hangwei (杜航伟) was appointed deputy head of the Ministry of Public Security.
8.3 Liu Guoqiang (刘国强) was appointed vice governor of the People’s Bank of China.
8.3 Yao Lin (姚林) was appointed chairman of Ansteel Group and secretary of its Party committee.
Image Source: SCMP