Stimulus coming, along with patriotic education

Editor-in-Chief

Zhào Lèjì 赵乐际, chairman of the National People’s Congress (NPC) Standing Committee, presides over the closing meeting of the sixth session of the 14th NPC Standing Committee at the Great Hall of the People in Beijing, October 24, 2023. (Xinhua/Liu Weibing)

• Two new, notable pieces of legislation were passed: a revised Marine Environment Protection Law and the Patriotic Education Law.
• The latter is the latest assault in China on “historical nihilism,” a phrase denoting any public doubt or skepticism about the Party’s description of historical events.
• Former defense minister Lǐ Shàngfú 李尚福 was removed from the posts of state councilor and defense minister, and former foreign minister Qín Gāng 秦刚 from the post of state councilor. Both had disappeared from public view earlier this year. No explanation for the dismissals was given.

The NPC standing committee also approved the issuance of more sovereign debt as part of adjustments to the annual budget.

• The central government will issue a trillion yuan ($136.80 billion) in additional government bonds, which will increase China’s 2023 fiscal deficit ratio from 3% to about 3.8%.
• This is likely a precursor to Beijing’s imminent injection of fresh fiscal stimulus to shore up the economic recovery, but analysts worry that reverting to debt-funded stimulus could undermine consumer-led growth.

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Barry van Wyk

Xí Jìnpíng 习近平 met with California Governor Gavin Newsom in Beijing today, Chinese state media reported without providing details, the first time the leader of the world’s second largest economy has met the governor of a U.S. state in more than six years. It’s the latest meeting between top American and Chinese officials ahead of a planned meeting between Xi and U.S. counterpart Joe Biden in San Francisco next month.

Chinese real estate giant Country Garden was deemed to be in default by trustee Citicorp International Ltd. after it failed to pay interest on a dollar-denominated note within a grace period that ended last week.

The China-Africa Business Council released a new report today titled “Chinese Investment in Africa 2023,” highlighting potential cooperation in improving industrial chains on the African continent, Chinese state media reported.

China has been Africa’s largest trading partner for 14 consecutive years, with direct investment in the continent hitting $1.8 billion in the first half of 2023, an increase of 4.4% year-on-year, a Ministry of Commerce official said during the report’s release. Last year, bilateral trade reached $282 billion, up 11% year-on-year.

The report came as senior officials from 53 African countries and the African Union Commission gathered in Beijing to discuss the next steps agreed to at the 2021 Forum on China-Africa Cooperation (FOCAC) Summit in Dakar.

Finland said that a Chinese ship’s anchor damaged an undersea gas pipeline in the Baltic Sea between Finland and Estonia earlier this month. Finland’s National Bureau of Investigation (NBI) announced yesterday that it has evidence pointing to the Hong Kong-flagged cargo vessel Newnew Polar Bear as the culprit of the rupture, which was caused by the ship dragging a large anchor along the seabed. It is unclear if this was an accident or a deliberate act. Two other telecom cables were damaged at the same time as the pipeline.

The Chinese Foreign Ministry said today that China was willing to provide necessary information in accordance with international law to the pipeline investigation. Two days earlier, it called for the investigation to be conducted in “an objective, just, and professional manner.”

Hong Kong leader John Lee (李家超 Lǐ Jiāchāo) gave his second annual policy address today, where he laid out his government’s next steps to revive the financial hub. Here are some of the key takeaways:

• The city will offer HK$20,000 ($2,556) handouts to parents of newborns if at least one of them has been a permanent resident in the city for three years, in a bid to boost the lowest fertility rate in the world.
• It will slash stamp duties on some home sales in half from 30% to 15% for non-permanent residents effective today, easing property curbs for the first time in over 10 years. It will also cut a 15% levy for city residents purchasing a second property in half to 7.5%
• Stamp duties on stock transactions will also be reduced from the current 0.13% to 0.1%, reversing an increase introduced at the height of the pandemic in 2021.
• Some visa and immigration policies for foreign workers from Laos, Nepal, and Vietnam have been relaxed, the city’s latest effort to lure in talent. Foreign staff of overseas companies registered in Hong Kong who are seeking to cross the border into the mainland will also be allowed to apply for a single visa allowing for multiple entries.

Chinese state media: Xinhua News Agency’s top story is on Xi Jinping meeting Colombian President Gustavo Francisco Petro Urrego. The two agreed to elevate bilateral relations to a “strategic partnership.”

The People’s Daily print edition follows up on yesterday’s Xinhua stories on Xi sending a message to the All-China Federation of Industry and Commerce, which exists to ensure private business follows the Communist Party’s guidance. Xi stressed that the “broad masses of private economic professionals must unite more closely around the Party.”

• The incident took place in a residential complex in Chongzhou, a city in southwest China’s Sichuan Province. The child and her mother were taking a stroll in the neighborhood when the dog suddenly attacked them. Its owner was nowhere to be seen.
• The girl was rushed to the hospital with more than 20 puncture wounds over her body. On Monday, she was transferred out of the critical care unit to a regular patient room for further treatment.
• Local authorities in Chongzhou have seized the Rottweiler and detained its owner, who was identified by police officers the day after the attack.

The Rottweiler incident, once again, has placed focus on two issues that have long divided opinion in China: How should pet dogs be restricted safely and what to do with a vast number of loose canines on the street?

• In light of the Chongzhou attack, several Chinese cities have handed out leashes to encourage responsible control of pets in public, and ordered crackdowns on strays, which involve rounding them up and sending them to shelters for “centralized management.”
• On Weibo, the indiscriminate capture — and potential culling — of stray dogs has sparked an outcry, with animal lovers calling for more humane measures, such as adoption and neutering.

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Zhao Yuanyuan

• Some 500 people in Los Angeles, many of them with guns and other weapons, set out to attack and murder Chinese people.
• In 1871, there were only 6,000 people in the city, meaning that the mob comprised almost 10% of the population. It was twice as large as the city’s entire Chinese population.

At least 18 Chinese men were lynched that night — 10% of the Chinese population in Los Angeles. What caused this spasm of violence?

• The immediate cause was a shooting that began in a fight between rival Chinese huìguǎn 会馆 — native-place associations, like guilds — in which a white man, who randomly fired shots into a crowded building, was killed by return fire.
• But of course, anti-Chinese attitudes in California went back much further than October of 1871. People had campaigned against the Chinese for decades, leading to the Chinese Exclusion Act of 1882 that outlawed Chinese immigration to the United States.

This tragic episode is a part of China’s history, just as it is part of American history and Asian-American history, because it shaped China’s impressions of and attitude toward the West, James Carter writes. There were profound implications for both sides of the relationship.

James Carter

• How to get out of China is a question occupying the minds of the wealthy, the rebellious, and everyone in China who doesn’t like living in the New Era of Xí Jìnpíng 习近平. But the desire to escape is not new, as we see in this oral history from the late 1980s by Sang Ye, translated and introduced by eminent Sinologist Geremie Barmé.
• Rooftop solar is a rational and important step in China’s path to peak coal use, argues David Fishman in a rebuttal to a previous article published by The China Project.

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

BUSINESS AND TECHNOLOGY:

Stimulus and economic recovery
China’s 1 trillion yuan sovereign debt plan offers ‘positive growth implications’, Beijing eager to strengthen down the road / SCMP (paywall)
“China’s fiscal revision, including a 1 trillion yuan (US$137 billion) sovereign debt plan, was aimed at ensuring economic stability in the coming months amid a faltering property market and rising local government debt pressure, analysts said.”
China approves $139bn in new bonds to bolster economic recovery / Nikkei Asia (paywall)
“China has approved issuing 1 trillion yuan ($139 billion) in new bonds, marking its first budget revision in years as it looks to boost confidence amid tepid signs of an economic recovery.”
China increases bond issuance to help its economy / WSJ (paywall)
Opinion: Martin Wolf: The economic future of China / FT (paywall)
“Many believe the country’s rapid rise in relative gross domestic product and GDP per head is coming to an end — but is it? Martin Wolf argues that the challenges are serious, yet manageable,” but also that “politics poses the biggest threat to economic growth in China.”

Hong Kong
Hong Kong slashes property stamp tax to revive economy / FT (paywall)
“Hong Kong will offer HK$20,000 ($2,556) handouts to parents of newborns and ease stamp duties on some home sales as the city struggles to revive an economy hit by a population exodus and slowing Chinese growth.”

Electric vehicles
Porsche hits out at Brussels probe into Chinese EVs / FT (paywall)
“German carmakers will ‘fight’ any potential tariff war between Brussels and Beijing, according to the chief financial officer of Porsche, one of the handful of European brands that does not manufacture cars in China.”

Intellectual property rights
Chinese artist fined 5 million yuan in ‘landmark case’ for plagiarizing foreign work / Caixin (paywall)
“The plaintiff, Belgian painter Christian Silvain, applauded the verdict, despite the awarded compensation falling far short of the over 60 million yuan [$8.2 million] that he had initially sought, saying that the judgment had made the European market more optimistic about China’s protection of intellectual property rights.”

Working for the government is popular
China jobs: Civil service in high demand amid economic slowdown as record 2.83 million apply for exam / SCMP (paywall)
“A record 2.83 million applicants have applied for China’s national public servants exam, hoping to land positions still widely considered as the so-called iron rice bowl as uncertainty over jobs in the corporate sector has increased amid a slow post-pandemic economic recovery.”

Oil
Xi’s energy policies trickle down to oil major amid cost concerns / Nikkei Asia (paywall)
“CNOOC, one of China’s biggest national oil companies, is set to make a record capital expenditure this year as President Xí Jìnpíng 习近平 calls for improvements to the nation’s energy security.”

Semiconductors
U.S. tells Nvidia to halt shipping some AI chips to China immediately / Caixin (paywall)
“The U.S. government has told Nvidia it must stop shipping some of its high-end artificial intelligence chips to China without licenses immediately, a company filing Tuesday shows.”

Country Garden
China developer Country Garden deemed in default on dollar bond for first time / Bloomberg (paywall)
“Chinese developer Country Garden Holdings Co. was deemed to be in default on a dollar bond for the first time, underscoring its fall into distress amid a broader property debt crisis that’s shaken the world’s second-biggest economy.”

Tsingtao beer
Tsingtao beer loses its fizz in South Korea after video of worker appearing to urinate into tank / Guardian
“China’s Tsingtao beer reportedly experiences a consumer backlash in South Korea after video of a worker appearing to urinate into a beer tank goes viral.”

Huawei
Controversial chip in Huawei phone produced on ASML machine / Bloomberg (paywall)
“China’s Semiconductor Manufacturing International Corp. used equipment from ASML Holding NV to manufacture an advanced processor for a Chinese smartphone that alarmed the US, according to people familiar with the matter.”

SCIENCE, HEALTH, AND ENVIRONMENT:

Healthcare industry
‘Capital winter’ chills investment in China’s health care industry / Caixin (paywall)
“China’s cutting-edge drug developers are feeling the pinch from a continued contraction in investment, with some having to make massive layoffs or abandon non-core businesses to survive what has been dubbed a ‘capital winter.’”

Emission control
China’s reduction in emission intensity seen accelerating after ‘big leap in moving to renewables’: world travel guild / SCMP (paywall)
“China has reported the second-largest decline in emission intensity within the global travel and tourism sector between 2010 and 2019, according to a report published by the World Tourism and Travel Council (WTTC) in collaboration with the Saudi Arabia Ministry of Tourism.”
China readies relaunch of shelved carbon credits program / Caixin (paywall)
“China is one step away from relaunching its voluntary carbon credits program after updating key rules for the scheme, which it shelved more than six years ago due to a lack of uptake and regulatory issues.”
China set to release long-awaited methane plan before COP28 / Bloomberg (paywall)
“The world’s largest source of methane has promised to lay out how it will reduce emissions of the potent greenhouse gas.”

POLITICS AND FOREIGN AFFAIRS:

Removal of senior Chinese officials
Removal of top Chinese officials seen as enforcing Xi’s demand for obedience / AP
“The removal of China’s foreign and defense ministers appears to enforce leader Xí Jìnpíng’s 习近平 demand for total obedience and the elimination of any potential rivals within the ruling Communist Party, analysts say.”

Military
China chases U.S. and Russia guided-missile submarine capabilities with new vessels / Reuters
“China has launched its first nuclear-powered guided missile submarines, according to the Pentagon’s latest report on China’s military – giving it land and sea attack options once the sole province of U.S. and Russian vessels.”

Forced labor
Forced labor concerns prompt U.S. lawmakers to demand ban on seafood from two Chinese provinces / AP
“A group of U.S. lawmakers wants the Biden administration to ban seafood processed in two Chinese provinces from entering the U.S. market because of concerns about rights abuses. They also say that Chinese facilities using forced labor should be banned from doing business with American companies.”

Uyghur filmmaker arrested
Trial of Uyghur film-maker to begin in China this week / Guardian
Ikram Nurmehmet, a director known for featuring Uyghur protagonists, “who was arrested in Beijing earlier this year will appear on trial in Xinjiang today.”

Taiwan
Beijing urges Taiwan companies to help smooth cross-Strait relations / Nikkei Asia (paywall)
“Taiwanese companies should assume their social responsibilities and play a ‘positive role’ in promoting the peaceful development of relations across the Taiwan Strait, China’s government said on Wednesday, amid a probe into major Apple supplier Foxconn.”

U.S.-China competition and tensions
China’s defense ministry blasts Pentagon’s annual report / Reuters
“China’s defense ministry on Wednesday denounced the U.S. Defense Department’s annual report on China, saying it distorts the country’s security policy and military strategy.”
China said the U.S. is a disruptor of peace in response to Pentagon report on China’s military buildup / AP
Opinion: Biden’s unsung shift on China / FT (paywall)
Edward Luce argues: “The upside to dialogue between Washington and Beijing should never be overlooked.”
Xi says China willing to cooperate with U.S. as hopes rise for talks with Biden / Guardian
“The Chinese leader, Xi Jinping, has said China is willing to cooperate with the U.S. as both sides manage their differences and work together to respond to global challenges, raising hopes of a meeting between Xi and the U.S. president, Joe Biden, this year.”

California governor in China
California governor Newsom meets China’s President Xi / Reuters
“California governor Gavin Newsom met Chinese president Xí Jìnpíng 习近平 on Wednesday to discuss climate change, raising hopes that China and the United States can find common ground ahead of an APEC summit and COP28 climate meeting next month.”
California Gov. Newsom has surprise meeting with China’s leader Xi amid warm welcome in Beijing / AP
China’s Xi Jinping to meet California Governor Gavin Newsom in sign talks with Joe Biden will follow on Apec sidelines / SCMP (paywall)
China’s Xi welcomes Gavin Newsom in Beijing with eye on U.S. visit / WSJ (paywall)
“California Democrat, seeking cooperation on climate change, is first U.S. governor to meet Chinese leader since 2017.”

Israel-Hamas war
China watches how Israel-Hamas war affects U.S. ‘posture’ in Indo-Pacific / Nikkei Asia (paywall)
“China is marking time as the Israel-Hamas war tests countries’ diplomacy in the Middle East, eyeing any opportunity to use the conflict to its diplomatic advantage, according to a former Pentagon official.”
Blinken says he will work with China’s Wang Yi to calm Middle East / Nikkei Asia (paywall)
“U.S. Secretary of State Antony Blinken told the U.N. Security Council on Tuesday that he will work with China’s top diplomat, Wang Yi, to prevent the conflict in the Middle East from spreading when they meet later this week.”

Sri Lanka
Sri Lanka is allowing a Chinese research ship to dock as neighboring India’s security concerns grow / AP
“A Chinese research ship will be allowed to dock at a Sri Lankan port this week, likely adding to neighboring India’s concerns about China’s growing influence in the Indian Ocean.”

Australia
China-Australia thaw reveals limits of Beijing’s economic coercion / Nikkei Asia (paywall)
“Australian Prime Minister Anthony Albanese will travel to Beijing on November 4, a trip that in any ordinary year would attract little notice outside of the two countries.”

Columbia
China upgrades diplomatic ties with close US ally Colombia / Reuters
“China elevated diplomatic relations with Colombia to a strategic partnership on Wednesday, deepening a push with one of the oldest U.S. allies to expand its influence and strengthen its foothold in Latin America.”

Russia
China-Russia challenge to the global order cannot be allowed / Nikkei Asia (paywall)
“Chinese President Xi Jinping and Russian President Vladimir Putin recently met in Beijing for their second summit of the year, showcasing their lockstep unity as a faction opposed to the U.S.”

SOCIETY AND CULTURE:

NBA
NBA ‘first class’ in China despite past turbulence, says Yao / Reuters
“The National Basketball Association (NBA) and China may have encountered turbulence in their relations over the years but retired great Yao Ming told Reuters the league is still ‘first class’ in his home country.”
NBA ‘very well welcome in China’, Yao Ming says – and basketball legend gives Peng Shuai update / SCMP (paywall)

Cyber safety for minors
China’s new cyber safety rules to protect minors put burden on internet and tech firms, authorities and schools / SCMP (paywall)
“China has introduced regulations to step up the protection of minors in cyberspace, in an attempt to fend off risks ranging from internet violence to addiction.”

Swimming
China’s Qin named male swimmer of the year / Caixin (paywall)
“Breaststroke champion Qín Hǎiyáng 覃海洋 and Australia’s Kaylee McKeown were honored as the best swimmers of the year in a ceremony staged at the future headquarters of global water sports governing body World Aquatics in Budapest, Hungary, on Monday.”

Culture preservation
Rediscovering tradition in Pu’er country / Sixth Tone
“Jingmai Mountain’s successful UNESCO World Heritage application offers a counterpoint to those who argue that development must come at the expense of the natural environment.”

Dog safety
China local governments launch crackdown on dogs after child was mauled / Guardian
“Local governments across China have launched a crackdown on dogs after a toddler was mauled by a rottweiler earlier this month.”