Afghanistan Deep Dive - Xi Thought Collection - India in SCS - Pak Attack - Tibet Agenda - Yasukuni Shrine Tensions - FDI Data - Common Prosperity - Personal Data Law - Hangzhou Party Boss Probed
On July 19, the People’s Daily began a special Q&A-based column, which has since been published on every weekday on Page 5.
There have been 25 pieces so far, each addressing two specific questions. I’ve been covering these in my People’s Daily Tracker regularly. I’ve put all of these in one post for anyone who is interested in the collection.
The post carries my coverage of each of these pieces as I did on the day. I haven’t edited or added anything. Also, in case there are more pieces, I’ll add them to this post.
You can access it here: Xi Thought Q&A Series: The Full Collection.
I. China’s Afghanistan Approach
I am doing something different with this section today, by dividing it into sub-sections to just be able to better tell the story that I want to - also, because there’s lots and there’s significant back and forth in timelines.
A. My Brief Take
China isn’t thrilled about developments in Afghanistan. Yes, there is a certain revelling in the US’ failure and the chaotic handling of the withdrawal, but I would be very surprised if this is being viewed as fundamentally a sign of declining US power. US military power remains overwhelming. But indeed, events of the last week are an acknowledgement of the limits of US power to forcefully effect socio-political change in far-away, complex societies with unique cultures and histories. This is something that Beijing has and will reinforce repeatedly.
With that said, for Beijing, what’s also important is that the US is removing itself from had increasingly strategically become a no-win situation that was draining its resources. It will still have interests and challenges related to terrorism, but the immediate challenges are for regional players now. These are not just about infiltration, which is not a serious threat for China, but also of inspiration, which can have far-reaching consequences for China beyond its borders, given the spread of BRI investments.
Despite its engagement of the Taliban, Beijing will remain uncomfortable with the group’s agenda. It will likely seek stability in return for legitimacy and cash, but it’s not like we will see the floodgates of Chinese money and projects open. Also, depending on how things develop, the developments in Afghanistan will create new dimensions in the China-Pakistan relationship, and not all of it is likely to be hunky dory. There would likely be some concerns at the least in Beijing about the tail wagging the dog, particularly given how effective the Pakistani establishment has shown itself to be on this count. Some of this, however, will also be dependent on the dynamics of the Pakistan-Taliban relationship.
Finally, I am not certain that Beijing and Moscow are entirely on the same page either when it comes to the Taliban. The latter appears far more forthcoming to proffer legitimacy than the former. I presume that in one way, the current scenario raises Russia’s stock as a security partner for China.
B. Events this Week
The situation in Afghanistan is still a developing story in many ways. While the Taliban appears to have taken control of Kabul and the country, and did declare the establishment of the Islamic Emirate of Afghanistan on August 19, it’s not all a done deal. For starters, who is the Emir?
But also, as Sandeep Unnithan reports for India Today, Afghanistan’s Vice-President Amrullah Saleh has declared himself interim president as he joined the remnants of the erstwhile Northern Alliance withdrawing to their sanctuary in the Panjshir Valley.
The Tribune reported that fighters of the Northern Alliance claimed to have retaken two districts and a town adjacent to their stronghold of Panjshir Valley and have appealed for arms and asked other nations not to recognise the Taliban as the Afghan representative.
Essentially, while the Taliban appear to be in control, there is still a lot that is unclear about how this cookie will crumble.
On the surface, the Taliban has been sending signals that members of the broader international community would like to hear. For example, at a press conference in Kabul on Tuesday this week, the Taliban said that:
“We are going to allow women to work and study. We have got frameworks, of course. Women are going to be very active in the society but within the framework of Islam.”
“We are committed to the media within our cultural frameworks. Private media can continue to be free and independent. They can continue their activities.”
The group has no plans to enter the homes of people or carry out retaliatory attacks on anyone who served in the previous governments, worked with foreigners or were part of the Afghan National Security Forces.
“We want to assure our neighbouring countries that our land will not be misused against them. International community should also recognise us.”
“We want to assure the security of international embassies and organisations in Kabul. Our plan was to stop at the gates of Kabul after capturing rest of the areas but, unfortunately, the previous government was incompetent. They could not provide security. We will provide security to all foreign organisations now. We don’s seek any enemies. inside or outside Afghanistan.”
Now, there has been talk from Beijing about some of these being signs of “positive signals” from the Taliban, but that doesn’t imply that the Chinese leadership is entirely comfortable with the way things have developed.
A few reports to note this week, with regard to Foreign Minister Wang Yi’s engagement with his counterparts from other countries on Afghanistan.
“During the phone talk, Blinken expressed appreciation for China's participation in the Doha meeting on the Afghan issue, noting that the current situation in Afghanistan is entering into a crucial stage. The Taliban should announce a clean break with extremism, opt for an orderly transfer of power and establish an inclusive government, the top U.S. diplomat said, expressing hope that China will also play an important role to this end.”
Here’s what Wang said:
“Wang expounded China’s stance on the situation in Afghanistan, saying that facts have once again proved that mechanically copying an imported foreign model cannot readily be fitted to the use in a country with completely different history, culture and national conditions, and ultimately, is unlikely to establish itself. Without the support of people, a government cannot stand, and the use of power and military means to solve problems will only cause more problems, Wang said, adding lessons in this respect deserve serious reflection. Wang said that China stands ready to communicate with the United States to push for a soft landing of the Afghan issue, so that a new civil war or humanitarian disaster will be prevented in Afghanistan and the country will not relapse into a hotbed and shelter for terrorism.”
Also, Wang went on to offer a bit of a lecture:
“The hasty withdrawal of U.S. troops has had a severe negative impact on the situation in Afghanistan, and it will not be a responsible attitude if the United States created new problems in its next move, Wang said. The previous U.S. administration announced revocation of the designation of the East Turkistan Islamic Movement as a terrorist organization, and applied double standards to the counter-terrorism issue, which is dangerous and wrong, Wang said, calling on the U.S. side to start afresh to remove obstacles to the China-U.S. cooperation on Afghanistan and the international counter-terrorism cooperation.”
And here’s more on China-US ties:
“In the face of various global challenges and urgent regional hotspot issues, the two countries should carry out coordination and cooperation, which is what the international community is looking forward to, Wang added. And yet the U.S. side cannot, on the one hand, deliberately contain and suppress China and undermine China's legitimate rights and interests, and on the other hand, expects support and cooperation from China, because such logic never exists in international exchanges, Wang said. It is an objective fact that China and the United States differ in ideology, social system, history and culture, and neither side can change the other, Wang said. It is advisable for the two major countries to work together on the basis of mutual respect to find a way to coexist peacefully on this planet, he said, adding that history will surely prove that whatever the U.S. side intends to do, China-U.S. relations should eventually seek only such a future and follow only such a path, Wang said. The U.S. side should pursue a rational and pragmatic policy toward China, respect China's core interests and major concerns, strengthen dialogue and manage differences in accordance with the spirit of the phone talks between the two countries' heads of state, and push China-U.S. relations back on the right track at an early date, Wang added.”
He also spoke to Russia’s Sergei Lavrov on Monday, at the latter’s request. Here’s what the Chinese readout said:
“the situation in Afghanistan has undergone dramatic changes, with the former regime collapsing without a fight and the Taliban declaring victory. It is commonly believed in the international community that this result has its own internal logic and inevitability, signifying that military intervention and power politics are unpopular and doomed to fail.”
“China and Russia should encourage the Afghan Taliban to pursue a moderate and prudent religious policy, work with all parties to form an open and inclusive political structure, pursue a peaceful and friendly foreign policy, especially to co-exist in harmony with its neighbors, and achieve reconstruction and development of Afghanistan.”
“the new Afghan regime should draw a clear distinction with all kinds of international terrorist forces.”
As an aside: Later in the week, Lavrov also spoke to Pakistan’s Shah Mahmood Qureshi. Moscow appears to be much more clearer in its acknowledgement of Taliban’s rule. So the statement after the Lavrov-Qureshi talks says that these “focused on the developments in Afghanistan since the Taliban movement came to power.” Another example is comments by Russian Ambassador to Afghanistan Dmitry Zhirnov, who told Reuters this week that “We can’t wave reality aside. They [the Taliban] are the de facto authorities. There is no alternative to the Taliban in Afghanistan.”
He added: “The mood in Kabul can be described as one of cautious hope…There was a bad regime which disappeared and people are hopeful. They say it can’t be worse so it should be better. But this is another test for the Taliban to pass. After they restore order, they should start improving the socioeconomic situation.”
“Wang said that the situation in Afghanistan has changed overnight, and what will happen next depends on the policy of the Taliban. Taliban leaders have sent positive signals to the outside world, while a Taliban spokesperson has ensured the security of embassies in Afghanistan and expressed the willingness to establish sound relations with other countries, Wang noted, expressing his expectation that the commitments will be turned into concrete policies and actions. The Taliban spokesperson has said that it is hoped that an inclusive new government can be formed in Afghanistan, and the country will no longer be a center for growing opium and trading drugs. The remarks, Wang said, indicated a right direction.”
Wang also said that “the Taliban in Afghanistan needs to make a clear break with all terrorist forces and take measures to crack down on the international terrorist organizations designated by the United Nations Security Council, including the East Turkistan Islamic Movement. It will be difficult for the process of peace reconstruction in Afghanistan to go smoothly, Wang said, calling on the international community to jointly encourage and support all the parties and nationalities in Afghanistan to cooperate in solidarity during the process.”
Cavusoglu said, as per Xinhua, that “China’s views and stance on the Afghan situation are objective and fair...the situation in Kabul is gradually returning to calm and the Taliban is adjusting its domestic and foreign policies in a positive direction.”
“The so-called ‘democratic transformation’ proved to be unrealistic, which only brought about hurtful consequences and lessons from it are worth remembering and learning.” He then put out four points for China-Pakistan action:
Firstly, encourage all Afghan parties to strengthen solidarity, and to establish a new broad-based and inclusive political structure.
Secondly, on terrorism, Afghanistan must not become a gathering place.
Thirdly, the two sides should contact and communicate with the Taliban in Afghanistan to ensure the safety of Chinese and Pakistani personnel and institutions there.
Fourthly, the two sides should promote international cooperation involving Afghanistan.
On the Dasu attack:
“Discussing the Dasu terrorist attack, Wang voiced China’s appreciation of the important progress made by Pakistan in the investigation and hoped that Pakistan will make every effort to arrest the perpetrators, and punish them in accordance with the law, so as to give an explanation to the people of the two countries and as well as a powerful deterrent to the forces that attempt to undermine China-Pakistan friendship. He also hopes that Pakistan will accelerate to implement strengthened whole-process security measures and upgraded security cooperation mechanism to ensure that similar incidents will not happen again.”
Afghanistan needs a political settlement through negotiations in the future, Qureshi said, adding the Taliban’s takeover of Kabul has not caused bloodshed and Afghanistan’s domestic situation is stabilizing with life gradually returning to normal. He added that all the parties should support the Taliban to implement its commitment and protect the rights and interests of the Afghan people.
Do note that on Friday, a motorcade carrying Chinese personnel working at the East Bay Expressway project in Gwadar was attacked by a suicide bomber. This is the second attack on Chinese citizens in the past month. The Chinese embassy in Pakistan said that “one Chinese was injured, two local children were killed and several others were injured.” While calling for a probe and punishment, it added “the security situation in Pakistan has been severe. There have been several terrorist attacks in succession, resulting in the casualties of several Chinese citizens.”
PTI quotes a Pakistani official statement as saying that “the bomber targeted the convoy of Chinese nationals comprising four Chinese vehicles with integral security details of the Pakistan Army and police contingent on the East Bay Expressway near Fishermen Colony in Gwadar.’ ‘A young boy ran out of the colony once the convoy reached there to target Chinese vehicles. Fortunately, soldiers of the Pakistan Army in plain clothes employed as hanging around security rushed to intercept the boy; who immediately exploded himself about 15-20 meters away from the convoy’.”
Do note that the Chinese ambassador to Pakistan met with Nawabzada Shahzain Bugti a day prior to the attack, talking about pushing ahead with projects in Balochistan.
“the Afghan people yearn for stability and do not want another war or chaos” - I guess this is a message that forces opposing the Taliban should not get Western support, although it’s not a message against some sort of a political, power-sharing deal internally.
the governance model imposed from the outside has not been supported by the Afghan people, and lacks social foundation
“The situation in Afghanistan is yet another negative example, and if the United States does not learn from the painful lessons, it will suffer new ones.”
Then he pointed to what I am going to call the three whethers:
first, whether the Taliban can unite the Afghan people, establish an open and inclusive political structure in line with the country's conditions, pursue moderate policies, and avoid triggering new conflicts or even a civil war.”
whether Afghanistan can draw a clear line from terrorism, resolutely crack down on all kinds of terrorist organizations and avoid becoming a gathering place for terrorists again.
whether the international community can “refrain from a predetermined mindset and exceeding one’s duties to meddle in others’ affairs, and not turn Afghanistan into an arena of geopolitical games.”
Linked to the last whether is this comment by Wang that the international community should “encourage and guide” the international community “in a positive direction, instead of exerting excessive pressure.” This, said Wang, is conducive to the early political transition by the Taliban and other political forces in the country, the stabilization of the domestic situation in Afghanistan, and the reduction of the impact of refugees and immigrants. — China’s taking no refugees or migrants, of course.
Amid this, also note the Foreign Ministry Hua Chunying’s comments on Thursday Afghanistan after the Taliban’s press briefing. She said that as per the Taliban spokesperson:
“the Afghan Taliban would act responsibly to protect the safety of Afghans and foreign missions in Afghanistan, build good relations with all countries and never allow anyone to use the Afghan territory to threaten other countries. China has taken note of these positive statements and signals...We encourage the Afghan Taliban to follow through its positive statements, unite with all parties and ethnic groups in Afghanistan, establish a broadly-based, inclusive political framework that fits the national conditions and wins public support through dialogue and consultation as soon as possible, and adopt moderate and prudent domestic and foreign policies. That's what we hope to see...I noticed that some people have been saying they don't trust the Afghan Taliban. I want to say that nothing stays unchanged. When understanding and handling problems, we should adopt a holistic, interconnected and developmental dialectical approach. We should look at both the past and the present. We need to not only listen to what they say, but also look at what they do. If we do not keep pace with the times, but stick to fixed mindset and ignore the development of the situation, we will never reach a conclusion that is in line with reality.”
On Friday then, when asked about recognising the emirate, Hua said:
“We have taken note of the Afghan Taliban’s statement. We have also noticed that parties in Afghanistan are still holding consultations on the future political framework. China's position on the Afghan issue is clear and consistent. We hope Afghanistan can form an open, inclusive and broadly-based government, uphold moderate and prudent domestic and foreign policies and respond to the shared aspiration of the Afghan people and the international community.”
To me, the three whethers and Hua’s comments are indicative of the caution with which Beijing will proceed.
C. Analysis of Chinese Views
I am mostly going to rely on Twitter threads here, because there has been some tremendous stuff that’s out there.
First, keep these comments from Xi in 2014 in mind:
Second, do note these comments by Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation of China's Ministry of Commerce.
Third, do check out these comments from Liu Zongyi from the Shanghai Institutes for International Studies. Liu’s fairly well-known for rather tough views on India. He tempers expectations with regard to Taliban’s handling of ETIM and it shifting away from its “basic ideology.”
Fourth, some have pointed to this NYT piece by former PLA senior colonel Zhou Bo, saying that “Beijing has few qualms about fostering a closer relationship with the Taliban and is ready to assert itself as the most influential outside player in an Afghanistan now all but abandoned by the United States.” He added that:
“With the U.S. withdrawal, Beijing can offer what Kabul needs most: political impartiality and economic investment. Afghanistan in turn has what China most prizes: opportunities in infrastructure and industry building — areas in which China’s capabilities are arguably unmatched — and access to $1 trillion in untapped mineral deposits, including critical industrial metals such as lithium, iron, copper and cobalt. Though critics have raised the point that Chinese investment is not a strategic priority in a less secure Afghanistan, I believe otherwise.”
I do recommend this thread by Andrew Small for anyone taken in by Zhou’s rhetoric. I found myself vigorously nodding in agreement reading the thread:
In addition, this by Raffaello Pantucci in Nikkei Asian Review is on point:
There is no doubt that Afghanistan’s mineral riches would be attractive to Chinese companies on the lookout for untapped resources to feed insatiable domestic demand. Yes, Chinese companies may have a higher risk tolerance than some of their Western counterparts, but in the wake of two big project failures, why would a potentially more unstable Afghanistan suddenly be more attractive? Beijing might be in discussions with the Taliban, but China has little reason to force its companies into the country. When it comes to infrastructure, Chinese investment in Afghanistan is also limited. There has been some hospital construction, housing in Kabul, several small-scale factories and some new buildings for Kabul University -- and possibly a military base in Badakhshan -- but connectivity infrastructure such as roads, bridges, rail and ports has been in short supply. Chinese construction companies have built roads and more in Afghanistan, but most of this has been done through international institutional financing, rather than being driven by Beijing. Chinese contractors have won competitive bids and delivered them under dangerous circumstances. As for extending President Xi Jinping's signature Belt and Road Initiative, the little that has been advanced has been mostly rhetorical or just concepts floated by Beijing to connect the China-Pakistan Economic Corridor with Afghanistan. But as far as it is possible to tell, little economic energy or effort has been put into turning this into reality.
Fifth, do checkout this from Bloomberg about domestic backlash in China over Beijing leaning to support the Taliban.
“The People’s Daily, the mouthpiece of the Communist Party, posted a brief video history of the Taliban on Monday without mentioning its links to terrorism. The 60-second clip said the group was formed during Afghanistan’s civil war by ‘students in refugee camps’ and expanded with the ‘support from the poor,’ adding that it ‘has been in a war with the U.S. for 20 years since the Sept. 11 event’…The post, which was later deleted, became the fifth-ranked trending top on Weibo, after prompting a huge backlash from users questioning why party newspaper tried to whitewash the group. Some cited its violent past, including beheading people in the streets, destroying the famed Bamiyan Buddhas and banning women from work and study.”
Sixth, do note this bit about Taliban knocking at the doors of Chinese media in Afghanistan.
This came as the group’s spokesperson Suhail Shaheen spoke to CGTN, calling for China to play a major role in “rebuilding, rehabilitation, reconstruction” in Afghanistan.
II. Party Agenda in Tibet
One of the big domestic stories in China this week was the visit of a central delegation to Tibet. According to reports, some “20,000 cadres and masses from all walks of life in Tibet gathered in Potala Palace Square to warmly celebrate the 70th anniversary of Tibet’s peaceful liberation.” Xi Jinping wrote inscriptions “building a beautiful and happy Tibet and together fulfilling the great dream of national rejuvenation” on congratulatory plaques presented at the event. Wang Yang’s full speech was published by Xinhua English, with key snippets in this this story.
Here are the key points that Wang made:
“The peaceful liberation of Tibet in 1951 was a major victory for the cause of the Chinese people’s liberation and the cause of the reunification of the motherland...Since then, Tibet has embarked on a path from darkness to brightness, from backwardness to progress, from poverty to prosperity, from autocracy to democracy, and from closeness to openness.”
He then talked about how “old Tibet practiced a reactionary and barbaric feudal serfdom system...We completely expelled the imperialist forces, set off magnificent democratic reforms, ended the history of the unity of religion and politics, i.e., theocratic control of power, and established a people’s democratic government.”
Wang then listed developmental achievements of Tibet under the Party. None of this was new, but some of it I found interesting. For instance,
At present, Tibet has over 35,000 deputies of people's congresses and over 8,000 CPPCC members at various levels, 90 percent of whom are ethnic minorities, Wang said.
Wang said separatist and sabotage activities committed by the Dalai group and hostile external forces have been crushed.
More than 1,700 temples in Tibet have full access to water, electricity, the Internet, fire fighting and other facilities. All of the 46,000 monks and nuns are covered by the government’s social security scheme.
He also spoke about support for “a national demonstration zone for ecological civilization construction.”
Wang said officials and the general public of all ethnic groups should be mobilized to forge an ironclad defense against separatist activities. He also called for efforts to ensure that religions in China are Chinese in orientation and guide Tibetan Buddhism in adapting itself to socialist society. “No one outside China has the right to point fingers at us when it comes to Tibetan affairs,’ Wang said. ‘Any attempt or maneuver designed to separate Tibet from China is doomed to fail’.”
Also, this is useful to note, since it tells us that he assimilationist project is still work in progress.
“It is necessary to promote the cause of national unity and progress based on forging the consciousness of the Chinese nation as a community as the main line.”
What this entails is:
“Efforts to raise public awareness of ethnic unity and progress should go hand in hand with efforts to raise awareness of core socialist values, of patriotism, of struggle against separatist activities, of contrast between old and new Tibet, and of the Marxist views of country, history, ethnicity, culture and religion. Such efforts will enable people of all ethnic groups to strengthen their faith in our great motherland, the Chinese nation, the Chinese culture, the CPC and socialism with Chinese characteristics, thus solidifying the cultural foundation for ethnic unity. A shared cultural identity underpins ethnic unity.”
“All-round efforts should continue to be made to teach standard spoken and written Chinese language. We should foster and share Chinese cultural symbols and images of the Chinese nation among all ethnic groups, and thus create a source of inspiration for the entire Chinese nation.”
Coverage of Tibet over the past few weeks, along with the events of this week and Xi’s visit earlier, tells me two things. First, there’s a greater emphasis on Xi’s personal direction of policy. Here’s a visual example of this below:
Second, as I had written after the Symposium on Tibet Work last year, the CCP’s policy in the region entails a mix of persuasion, development, connectivity, indoctrination and coercion.
Also issued was a message from the Central Committee, Standing Committee of the National People’s Congress, State Council, National Committee of the Chinese People's Political Consultative Conference, and Central Military Commission.
Finally, in Friday’s People’s Daily, in the Theory page, the lead piece was by Wu Yingjie, Secretary of the Party Committee of Tibet Autonomous Region. He repeated some of the broad talking points about CCP rule in Tibet, and then talked about development of the socialist system.
“The construction of socialist democracy and rule of law has achieved fruitful results, and 152 local laws and regulations and resolutions have been formulated successively, covering economic, political, cultural, educational and other aspects.” 社会主义民主法治建设硕果累累，先后制定152件地方性法规和具有法规性质的决议，内容涉及经济、政治、文化、教育等各个方面.
He writes that “the overall social situation is becoming increasingly harmonious and stable.” But then adds that it is important to “firmly establish the overall national security concept, focus on safeguarding the motherland’s reunification and strengthening national unity, and seek long-term policies and actions to consolidate the foundation. It is important to extensively mobilize the masses to participate in the struggle against separatism, steadily promote innovation in social governance, and comprehensively strengthen the development of a peaceful Tibet and a Tibet ruled by law. We will make every effort to ensure border defense to consolidate border security and ensure that the overall social situation continues to be stable, and the people’s sense of satisfaction and security is constantly improving.” 社会大局日益和谐稳定。牢固树立总体国家安全观，坚持以维护祖国统一、加强民族团结为着眼点和着力点，谋长久之策、行固本之举。广泛发动群众参与反分裂斗争，扎实推进社会治理创新，全面加强平安西藏、法治西藏建设。全力确保边防巩固边境安全，社会大局持续稳定向好，人民群众安全感满意度不断提升。
He then talked about infrastructure development in Tibet:
Railway mileage of 1,400 kilometers
All counties and villages are accessible by roads, with a mileage of 118,800 kilometers
5 civil airports have been built and 140 international and domestic air routes have been opened
99% of villages have 4G connectivity
All border defense villages have been completed
He then talks about livelihood and incomes and then about Sinicization of religion. All this seems like a report card to the bosses. So the tone is that the promised work is being done well.
“100% of the members of the ‘two committees’ in the village (neighborhood) are party members. The majority of grass-roots party organizations listen to the party’s words and follow the party...the ruling foundation of the Party in Tibet is being continuously consolidated.” 村（居）“两委”班子成员100%是党员，广大基层党组织听党话、跟党走，善团结、会发展，能致富、保稳定，遇事不糊涂，关键时刻起作用，党在西藏的执政基础不断巩固.
Going ahead, he talked about prioritising:
Consolidating Party’s rule in Tibet
Adhering to the overall national security concept - this in Tibet emphasises “carrying out the anti-separatism struggle deeply.”
Addressing livelihood issues
Forging the sense of community of the Chinese nation
“We should carry out in-depth publicity and education on the history of the Party, New China, reform and opening up, and socialist development, and carry out in-depth education on the history of relations between Tibet and the motherland, so as to guide the people of all ethnic groups to establish correct views on country, history, nationality, culture and religion.” 我们要深入开展党史、新中国史、改革开放史、社会主义发展史宣传教育，深入开展西藏地方和祖国关系史教育，引导各族群众树立正确的国家观、历史观、民族观、文化观、宗教观。
“Carry out the anti-secession struggle in depth, expose and criticize the Dalai clique's political plot with a clear-cut stand, and firmly grasp the initiative in the anti-secession struggle.” 深入开展反分裂斗争，旗帜鲜明揭批达赖集团的政治图谋，牢牢掌握反分裂斗争主动权。
Developing a “beautiful Tibet,” i.e., environmental/ecological objectives
One important point to note is from this piece by HT’s Sutirtho Patranobis. Wu was quoted by state media has saying that “The population living at the border regions in Tibet has increased 10.5%.” Wu did not elaborate on the numbers but added that 21 border counties in TAR are now under direct supervision and aid of central government departments.
III. ‘Common Prosperity’ Vision
Xi chaired the 10th meeting of the Central Committee for Financial and Economic Affairs on Tuesday. The focus of the meeting was on “common prosperity” and financial risks. Xi said that common prosperity is an essential requirement of socialism and a key feature of Chinese-style modernization.
The report following the meeting tells us that the NDRC, Ministry of Finance, the Ministry of Human Resources and Social Security and the Central Agricultural Office presented reports on the theme of common prosperity. The People's Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, the NDRC and the Ministry of Finance spoke about resolving major financial risks and doing a good job with regard to stable financial development.
The report says that during the reform and opening up era, the Party learned that “poverty is not socialism.” It “broke the shackles of the traditional system, allowed some people and some regions to get rich first, and promoted the liberation and development of social productive forces.” Since the 18th CPC Congress, the Central Committee “put the gradual realization of common prosperity for all people in a more important position, and has taken effective measures to safeguard and improve people’s livelihood, win the tough battle against poverty, and build a well-off society in an all-round way, thereby creating favorable conditions for promoting common prosperity.” 会议指出，改革开放后，我们党深刻总结正反两方面历史经验，认识到贫穷不是社会主义，打破传统体制束缚，允许一部分人、一部分地区先富起来，推动解放和发展社会生产力。党的十八大以来，党中央把逐步实现全体人民共同富裕摆在更加重要的位置上，采取有力措施保障和改善民生，打赢脱贫攻坚战，全面建成小康社会，为促进共同富裕创造了良好条件。我们正在向第二个百年奋斗目标迈进，适应我国社会主要矛盾的变化，更好满足人民日益增长的美好生活需要，必须把促进全体人民共同富裕作为为人民谋幸福的着力点，不断夯实党长期执政基础.
It then explains that “common prosperity is the prosperity of all the people; it refers to the material and spiritual lives of the people, and not the affluence of a few. Nor is it a uniform egalitarianism. It is necessary to promote common prosperity by stages.” 会议强调，共同富裕是全体人民的富裕，是人民的物质生活和精神生活，不是少数人的富裕，也不是千篇一律的平均主义，要分阶段推进共同富裕.
It called for effort towards:
encouraging hard work and innovation to get rich
development to ensure and improve people’s livelihood
creating more inclusive and fair conditions for the people to improve their education level and enhance their development ability
enhancing smooth pathways for upward mobility
creating opportunities for more people to get rich, and
creating a development environment in which everyone participates
It then talks adhering to the “basic economic system, based on the primary stage of socialism.” This entails sticking to the “two unwaverings,” i.e., unwavering support for the public and non-public sector. But in saying so, it also reiterates that public ownership should remain “the mainstay” of the economy. It then says something that I struggled to understand clearly, but what I thought it meant was this: The system must allow some people to get rich first and then focus on “encouraging those who work hard, operate legally and dare to start businesses.” 允许一部分人先富起来, 先富起来, 后富起来, 重点鼓励努力工作、合法经营、敢于创业的致富带头人. - So I guess this is a warning to the wealthy that the Party will be picking winners?
The meeting’s statement also talks about the need to “correctly handle the relationship between efficiency and equity.” Establish basic institutional arrangements for the coordination of initial distribution, redistribution and tertiary redistribution. 为初次分配、再分配和三次分配协调建立基本的制度安排. Here’s what these three different distributions mean. The initial distribution refers to the market’s role in allocation of resources; the next one refers to government efforts at redistribution; and tertiary redistribution implies voluntarily actions of non-governmental actors - so charity, CSR, etc., would fall in this category. Here’s a piece that talks about how the Study Times had described the three distributions in January 2020.
As an aside, a day soon as this document was public, tech giant Tencent said that it has created a 50 billion yuan (US$7.7 billion) fund dedicated to “common prosperity.” The fund, it said, will be used to boost the income of low-income groups, improve health care coverage, help rural economic development, and support grass roots education.
Anyway, back to the report from the meeting. The next bit talks about goals of expanding the size middle-income group, increasing the incomes of the low-income group and rationally regulate high income groups to create an olive-shaped income distribution structure (橄榄形分布结构.)
The report then says that it is necessary to improve the balance, coordination and inclusiveness of development. This includes, among other things:
Uniform provision of public services
Increased investment in inclusive human capital
Improving the pension and medical security system
Improving the housing supply and security system
But what this means is not just supporting middle-income and lower-income groups. It also means this:
“It is necessary to strengthen the regulation of high income (高收入), protect legal income according to law, rationally regulate excessive income (超额收入), and encourage high-income people and enterprises to give more returns to society. It is necessary to clean up and regulate unreasonable income (不合理收入), rectify the order of income distribution and resolutely ban illegal income. It is necessary to protect property rights and intellectual property rights, protect legal wealth, and promote the standardized and healthy development of various types of capital.” 要加强对高收入的调控，依法保护合法收入，合理调节过度收入，鼓励高收入人群和企业给社会更多回报。要清理规范不合理收入，整顿收入分配秩序，坚决取缔非法收入. 要保护产权和知识产权，保护法律财富，促进各类资本规范健康发展.
So what should one expect in terms of policy measures in this context? Bloomberg reports that in a front-page article published on Thursday by the official Economic Daily newspaper, two researchers at Zhejiang University argued that imposing wealth taxes, including on property and inheritance, would help adjust the earnings of high-income groups and narrow the income gap. Li Shi, a professor, and Yang Yixin, a researcher, said the taxes should be imposed at an appropriate time to promote “common prosperity.” They also added that any wealth taxes should be introduced on condition other taxes are reduced or the overall tax rate is lowered.
Returning to the meeting report, it also says that it is “necessary to strengthen the guidance of public opinion to promote common prosperity and create a good public opinion environment for promoting common prosperity.”
There’s then a positive assessment of the financial risk containment campaign. “Important achievements have been made in the battle to prevent and resolve major financial risks, maintaining the bottom line of avoiding systemic financial risks, and effectively safeguarding national economic and financial stability and the safety of people’s property.” 防范化解重大金融风险攻坚战取得重要阶段性成果，守住了不发生系统性金融风险的底线，有力维护了国家经济金融稳定和人民财产安全.
Going ahead, “it is necessary to consolidate the foundation of financial stability, manage the relationship between steady growth and risk prevention, consolidate the momentum of economic recovery, resolve systemic financial risks with high-quality economic development, and prevent secondary financial risks in the process of dealing with risks in other fields.”要夯实金融稳定基础，处理好稳增长与防风险的关系，巩固经济复苏势头，以经济高质量发展化解系统性金融风险，在应对其他领域风险过程中防范次生金融风险.
To do this, it calls for coordinated action, use of technology, punishing financial corruption, preventing risks, accelerating reforms and effectively guiding public opinion in the financial market.
IV. LAC, South China Sea, ZTE Probe - BRICS Constellation
Let’s begin with Antara Ghosal Singh’s detailed examination of the statements, media reportage and chatter related to the 12th round of Corps Commander-level meeting. She argues that “analyzing publicly available information and internal debates and discussions in China and India shows how the 12th round of military level talks have posed more questions than answers, and created more confusion than clarity in both countries – a signal that tensions at the LAC might be far from over.” She argues that:
“there is a stark difference in how the outcome of the 12th round of talks between China and India is being interpreted in the two countries. Since the announcement of the meeting, the Indian discourse has been comparatively optimistic…Meanwhile, in China the mood remained rather somber. There has been no official confirmation as yet from the Chinese government on the realization of the much anticipated China-India disengagement from yet another contentious point at the LAC after the 12th round of military talks. No Chinese mainstream media has so far carried the news of China-India disengagement at the Gogra Heights (PP 17 A). In fact, in the days following the disengagement announcement in India, all that China’s leading India watchers had to debate and discuss were ‘India’s disinformation campaigns against China (including the developments at the LAC),’ ‘increased pressure on India due to developments in Afghanistan’ and ‘China’s options beyond cooperation to deal with India’.”
Moving on, there are a few other interesting stories to note. First, SCMP reports that the Colombo Security Conclave – including India, Sri Lanka and the Maldives – last week hosted its second meeting in eight months, during which the neighbours emphasised ‘four pillars’ of cooperation, including marine security, terrorism, human trafficking and cybersecurity.
The report adds: “The group was formed in 2011 and revived in November last year after a six-year hiatus. It is now poised to expand its full-time membership to Bangladesh, Seychelles and Mauritius, which currently hold observer status. Experts said the decision to welcome the three new members reflected India’s growing ambitions in the region and its wariness of China’s attempts to cultivate similar partnerships.”
Second, India and Vietnam conducted joint drills in the South China Sea this week, reports TOI. “The ‘sea phase’ of the exercise saw guided-missile destroyer INS Ranvijay and corvette INS Kora undertaking surface warfare exercises, weapon firing drills and helicopter operations with Vietnamese frigate VPNS Ly Thai To.” What’s more, the report says that “stealth frigate INS Shivalik and anti-submarine corvette INS Kadmatt, which are also part of the Indian naval task force, on the two-month-long operational deployment to South East Asia and the Western Pacific, in turn, will take part in the ‘sea phase’ of the top-notch Malabar exercise from August 26 to 29.” The task force will also drill with the forces of the Philippines, Singapore and Indonesia.
Third, TOI reports that Indian Income Tax officials have raided the offices of ZTE and are questioning the group’s CEO. The report says that the raids come amid alleged infringements ranging from tax evasion, bogus expenses worth hundreds of crores, illegal share purchases and currency exchange and accounting discrepancies. In fact, there’s even something in there about illegal trade in medicines.
Some of the specific allegations are available in ET’s report. It says that:
the Central Board of Direct Taxes (CBDT) said in a statement Tuesday that searches were conducted on Monday at five locations including the corporate office, residence of foreign director, residence of company secretary, accounts person and the cash handler of a foreign subsidiary company in India.
Fourth, BRICS nations have agreed on a deal to set up a constellation of remote sensing satellites launched and operated by the space agencies of the five nations to share data among themselves for management of disasters and natural resources. The agreement will enable setting up a network of remote sensing satellites and the ground stations launched and operated by the space agencies of the five nations. The participating satellites include China-Brazil Earth Resources Satellite-4 (CBERS-4) system, Kanopus-V Earth observation satellites of Russia, ResourceSat-2 Remote Sensing satellite of India. China’s GaoFen-1 (GF-1) series of earth observation satellites will also participate in the network. The participating ground stations will include Cuiaba in Brazil, Shadnagar–Hyderabad in India, Sany in China, Hartebeesthoek in South Africa and Moscow in Russia.
Finally, some positive news. PTI reports that Indian startups got $16.9 billion of venture capital funding in 2021, next only to Chinese counterparts in the Asia-Pacific (APAC) countries, GlobalData said Friday. The report adds that an analysis of GlobalData’s financial deals database reveals that a total of 828 VC funding deals were announced in India during January-July 2021 while the total disclosed funding value of these deals stood at $16.9 billion. Some of the notable VC funding deals announced in India during January-July 2021 include $3.6 billion raised by Flipkart, $502 million raised by Mohalla Tech (ShareChat), Zomato's capital raising of around $500 million, and $460 million raised by Think and Learn (Byju's).
Amid this, do checkout this Bloomberg report, linked in the Twitter thread here. It talks about how investors are looking at India over China, particularly given the regulatory changes in that country.
To me the moral of the story for Indian policymakers is: Even if you don’t do great things, just don’t do stupid stuff and you’re still in a position to gain. I know this is complicated, but keep nationalism at some distance and just let business grow.
V. Region Watch
Widespread shock at the Taliban takeover and tragic images of Afghans desperately attempting to board evacuation flights out of Kabul have concentrated the world’s attention on the abandonment of Afghanistan, and the handling of the US military withdrawal. Pakistan is lobbying with the international community, including close ally China, to garner support for diplomatic engagement with the Taliban. China too recognises its role. Foreign Minister Wang Yi said in a phone call with Pakistani Foreign Minister Shah Mahmood Qureshi that the two Afghan neighbours must coordinate to play constructive roles in maintaining regional peace and stability. While Pakistan has the most to gain from a peaceful and stable neighbourhood, Islamabad appears unable to contain the security threats it faces.
On Friday, a motorcade carrying Chinese personnel working at the East Bay Expressway project in Gwadar was attacked by a suicide bomber. The second such bombing in just over one month casts a shadow on China’s ambitious infrastructure projects in Pakistan and Afghanistan as Gwadar is the culmination point of the China-Pakistan Economic Corridor (CPEC). While the incident took place in their province, the Balochistan government spokesman Liaquat Shahwani strongly condemned the attack. The Chinese Embassy in Islamabad has urged,
‘...relevant departments at all levels in Pakistan must take practical and effective measures to accelerate to implement strengthened whole-process security measures and upgraded security cooperation mechanism to ensure that similar incidents will not happen again,’
The bombing adds to the renewed concerns over the safety of Chinese personnel in the region.
Meanwhile, Sri Lanka has signed a loan agreement with China worth $308 million to support its Covid-19 response and economic revival. This is another part of the loans sought by Sri Lanka last year. The first instalment was released in March 2020, just as the pandemic hit and was followed by a $500 million agreement in April 2021. Around the same time, the Beijing-based Asian Infrastructure Investment Bank (AIIB) also sanctioned Sri Lanka’s request for a $180 million loan. Sri Lanka already owes more than $5 billion to China from past loans. The announcement brings memories of 2017 when the Sri Lankan government, struggling to repay a billion-dollar Chinese loan, gave the majority share of the Chinese-built port of Hambantota to a Chinese state-owned company on a 99-year lease.
On the subject of Covid-19 response on the island, China’s Sinovac Biotech will set up a vaccine manufacturing plant in Hambantota. The agreement between Sinovac Biotech and Sri Lanka’s State Pharmaceutical Corporation (SPC) will allow Colombo to source nine million vaccine doses. While the specifics are under discussion, we know that the Sri Lankan government has set aside nearly 400 acres of land in the Hambantota-Arabokka area and announced tax exemptions for foreign companies willing to set up vaccine manufacturing units.
Last week, China marked the 70th anniversary of Tibet liberation with Wang Yang, chairman of the Chinese People's Political Consultative Conference (CPPCC), attending a commemorative ceremony in Lhasa. Addressing a curated audience, Wang Yang, who oversees policy toward ethnic minorities, said ‘all-round efforts’ were needed to ensure Tibetans use the standard Chinese language and share cultural symbols of the Chinese nation. Beijing propagates that Chinese culture promotes togetherness while critics argue that the move toward cultural assimilation spells the demise of Tibet’s traditional Buddhist culture.
On the subject of Tibet’s slow economic growth and prosperity, Wang said,
‘Only by following the CPC (Communist Party of China) leadership and pursuing the path of socialism, can Tibet achieve development and prosperity,’
The heavily choreographed ceremony was covered extensively by state media, including a nationwide broadcast. The Global Times carried an opinion piece that lauded the economic and infrastructure development under the CPC’s governance in Tibet and argued that separatist groups (referring to the government-in-exile) and foreign forces (the United States) have no real capability of destabilizing the region.
VI. Economic Priorities, FDI & Latest Data
Let’s look at the State Council’s weekly meeting, which took place on Monday; usually, this happens on a Wednesday. But this is important since it’s coming after the Beidaihe meetings. Xinhua English has a detailed story too. It says that the meeting “required effective policy implementation and strengthening of cross-cyclical adjustments in light of the new situations in economic operation, to keep major economic indicators within an appropriate range.”
The meeting noted that:
“Since mid-to-late July, extreme weather and the consequent severe flooding have hit multiple areas of the country, and new COVID-19 cases have been identified in several provinces. Commodity prices have been hovering at a high level, and the international economic situation is intricate and complex.”
Given this, the meeting set certain priorities.
First, focus on COVID-19 containment, flood control, disaster relief, and post-disaster recovery and reconstruction.
Second employment remains a high priority. The government will facilitate market-oriented job creation by the non-public sector, and enhance employment assistance and services for key populations such as college students, migrant workers and people in difficulty, to help ensure people's income and livelihood through stable employment.
Third, assist market entities by delivering the tax and fee cuts already introduced and curbing arbitrary charges. Financial institutions should use capital feed via RRR cuts to strengthen financial services for smaller businesses.
Fourth, the prices and supply of raw materials must be kept stable. Also, the mechanism to secure the provision of daily necessities will continue to be implemented to ensure sufficient market supply.
Also, the steady recovery of consumption will be promoted. Local government special bonds will be well harnessed to spur greater effective investment. More effective opening-up steps will be taken to keep foreign trade and investment stable.
In the PD story, there’s an extra paragraph, which says that the “employment pressure is still relatively high.”
strengthen the financial and monetary policies to support employment, promote the development of labor-intensive industries with strong employment absorption capacity, promote the development of online and offline integration of service industries, and promote flexible employment through multiple channels
strengthen entrepreneurship to drive employment
promote the healthy development of new industries, new business models and new jobs
do a good job in providing employment services for college graduates, migrant workers, retired military personnel and people out of poverty.
Efforts will be made to eliminate employment discrimination and strengthen the protection of the rights and interests of flexible employees and older and women workers.
strengthen vocational skills training, improve the skills of workers and the quality of production safety
Next a report (English report) that tells us that FDI into China has remained remarkably strong over the past two years. FDI was 672.19 billion yuan, an increase of 25.5% year-on-year (excluding banking, securities and insurance), and an increase of 26.1% over the same period in 2019.
Service industry accounted for 535.57 billion yuan, 79.7% of the overall inflow.
Wholesale and retail trade, scientific research and technology service industry, information transmission software and information technology service industry increased by 69.3%, 49.2% and 29.1% respectively.
FDI in high-tech industries increased by 34.1%, among which high-tech manufacturing and high-tech service industries saw a hike of 27.8% and 36%, respectively.
Investment from the countries along the Belt and Road and the Association of Southeast Asian Nations expanded 46.3 percent from a year ago.
Value-added industrial output rose 6.4% year-on-year in July. The figure was up 11.5% from July 2019. Average growth for the past two years to 5.6%.
China’s manufacturing PMI was 50.4%, and the service industry business activity index was 52.5%
During the January-July period, China's fixed-asset investment increased 10.3% year-on-year, with the average growth rate over the last two years at 4.3%.
The country's retail sales of consumer goods climbed 8.5% year-on-year in July; average growth was 3.6% over the past two years.
Surveyed unemployment was 5.1%. Total new urban jobs created 8.22 million, achieving 74.7 percent of its annual target.
High-tech manufacturing sector’s output expanded 15.6% from the same period last year, resulting in an average growth of 12.7% over the last two years. This was also 9.4 percentage points higher than the growth rate of the overall manufacturing industry.
Output of new energy vehicles, industrial robots, and integrated circuits increased by 162.7%, 42.3%, and 41.3% year-on-year respectively
Reuters report: China economy stalls as factory output, retail sales growth slow
WSJ report: China’s Economic Recovery Is Losing Steam
VII. Other Stories
China has passed the Personal Information Protection Law, which lays out for the first time a comprehensive set of rules around data collection. The thread below offers a really good assessment:
The CCDI has put Hangzhou party secretary Zhou Jiangyong under investigation for suspected serious violations of Party disciplinary rules and laws. SCMP tells us that before becoming the party secretary of Hangzhou in May 2018, Zhou held similar positions in the cities of Zhoushan and Wenzhou. The report of the investigation came two days after another official in the province came under a cloud. On Thursday, Ma Xiaohui, former party secretary of Huzhou “voluntarily surrendered” for suspected “serious violations of discipline and law”, according to state media. Between 2015 to 2018, Ma was the vice mayor and the deputy party secretary of Hangzhou. Before that, he was the deputy party secretary of Wenzhou.
Li Keqiang was in Henan this week (English report). This was Li providing a sense of central control over the situation, offering a healing touch and assurances about accountability to folks who have been badly hit by the floods. PD told us that Li visited flood-hit people in Yuanzhuang Village, Hebi City. He promised government support. He also visited the tunnel of Zhengzhou Metro Line 5. Do recall that the tunnel had become the site of a disaster; and the line saw displays of public grief. There, he spoke about the need to “rectify the hidden dangers of urban facilities, improve construction and safety standards, and enhance the management level,” along with improving early warning mechanisms. While there he also said that it was important to “seek truths from facts” and “hold accountability for any dereliction of duty and misconduct.” This he said was important in order to “respond to the concerns of the masses and warn future generations.” Li also visited locals and called for a probe to assess the flood damage in people’s homes and provided assurances on supplies of daily necessities. He also spoke about pandemic control and ensuring support for post-disaster reconstruction.
In a presser this week, Chinese officials spoke about supporting the rights of flexibly employed workers or gig-economy workers. I have a breakdown of what to expect here. Also in the post, you can read about Xi’s chat with presidents of Iran and Iraq.
Biden nominates Nicholas Burns as next US ambassador to China - Burns’ first comments: “If confirmed by the Senate, I look forward to return to public service to work on the difficult and complex challenges we face with China.”
“Japan’s ruling Liberal Democratic Party (LDP) is pushing for talks on security issues with the ruling party in Taiwan. The Japan Times reported the talks are being regarded as a 'ruling party version' of the 'two plus two' format involving defence and foreign ministers of two nations…‘The talks will be held at the request of the Japanese side and joined by LDP Foreign Affairs Division Director Masahisa Sato and National Defense Division Director Taku Otsuka... Participants from the Taiwan side have not been decided,’ The Japan Times reported. The publication added the talks could be held in a month.”
“Q: According to media reports, on August 15, Japanese Prime Minister Yoshihide Suga gave a cash offering to the Yasukuni Shrine. Former Prime Minister Shinzo Abe, several cabinet members and some lawmakers visited the Yasukuni Shrine on the same day or in recent days. What is China's comment on that?”
“What some Japanese political figures have done on the issue of the Yasukuni Shrine affronts historical justice and seriously hurts the feelings of people in the victimized Asian countries, including China. It again reflects Japan’s wrong attitude towards its own history of aggression. The Chinese side has lodged solemn representations with the Japanese side through diplomatic channels in both Beijing and Tokyo to register strong dissatisfaction and firm opposition. We urge the Japanese side to earnestly honor its statement and commitment of facing up to and reflecting on its history of aggression, tread carefully on historical issues such as the Yasukuni Shrine, make a clean break with militarism, and win the trust of its Asian neighbors and the international community through concrete actions.”