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The information in this week's issue is almost overwhelming but, as you know, China accomplishes more in a week than the West in a year.



Landlords in Urumqi (above), Yinchuan, Changchun and Lianyungang have shut down Hennes & Mauritz stores. Local media have reported more closures and H&M’s billboards being removed H&M's apology was widely ridiculed. Read full article →

The FTSE Russell approved Chinese sovereign bonds for one of its indexes, drawing $130 billion in foreign capital into the government bond market. The inclusion will be phased in over a 36-month period, with the expectation that CG Bonds will eventually make up 5.25% of the index. Read full article →

Investment funds profits rose 68% YoY to $350 billion in 2020, well above previous recordsRead full article →

Shanghai Pudong airport is back to pre-pandemic levels with more than 1,500 daily flights. Pudong  encouraged domestic tourism and travel, and used time slots and resources previously allotted to international airlines for domestic carriers. Read full article →

China imported 543 billion integrated circuits in 2020, up 22.1% YoY, and valued at $350 billion, up 14.6%, and exported 260 billion ICs,up 18.8%. The export value was $116.6 billion, an increase of 14.8% YoY. Read full article →

The national budget for 2021 is $1.83 trillion, level with 2020. Most government categories  will decline, except national defence, debt payment, welfare housing, and basic research (up 10.6% YoY). The budget foresees a VAT increase of 11.5% and a rise in personal income tax of 13.8%, reflecting rising urban incomes. Read full article →

Market turnover of the sharing economy reached $520 billion in 2020, up 2.9% YoY. The areas of knowledge and skill, health care, and production capacity grew 30.9%, 27.8%, and 17.8% YoY respectively. Read full article →

Tencent's revenue grew 28% to $74 billion in 2020. Net profit, rose 30% to $20 billion. In the final quarter, financial technology and business services brought in $6 billion, nearly a third of total revenue, up 29% YoY. Read full article →

Electric Vehicle maker BYD, backed by Warren Buffett, reported a 162% growth in 2020 net profit, to $644 million. Read full article →

China's digital economy grew 16.6% annually during the 13th Five-Year Plan period. The value-added of core industries of China's digital economy account for 7.8% of GDP. Read full article →

China has covered 3% of its farmland–4 million of 128 million hectares–with plastic sheeting greenhouses that produce 35% of its vegetables. The sheeting makes the land 10 times more productive. China is planning to have 2 million hectares of mechanized-automated greenhouse by 2025.  Read full article → 

Trade & Travel

The Chinese branch of Better Cotton Initiative says it found no evidence of forced labour in Xinjiang, it, “We have repeatedly conducted stringent inspections and submitted two of our investigation reports and compiled years of reports from third-party visits”. [See more in the Propaganda section, below] Read full article →

Vietnamese netizens are calling for a boycott of H&M after the company added the 9-dash line to its map of China to assuage Chinese netizens’ negative reactionsRead full article →

Boeing CEO Dave Calhoun warned, “We can’t afford to be locked out of the Chinese market. Our competitor will jump right in. Nothing good comes from restricted trade.” Read full article $ →

Some Shanghai multinationals are considering moving  when tax exemptions for foreign employees expire next year. Tax breaks for expat language training, housing, and children’s education will be phased out  to equalize benefits between local and foreign workers after tax deductible items became part of personal income tax returns. Read full article $ →

The RMB’s share of global currency reserves increased to 2.25%, gaining for four consecutive quarters, with yuan reserves rising 9% to $267 billion. Read full article →

China’s Hillhouse Capital has bought Philips’ home appliance unit for $5.2 billion, setting up a potential future resale to a large field of Chinese manufacturers in the mature, lower-margin space. Read full article →

More than 1,000 global brands from 69 countries will participate in the first China International Consumer Products Expo from May 7-10. 630 international enterprises, 800 domestic enterprises, 10,000 merchants and 200,000 visitors will take part. Read full article →

Total foreign trade in goods in the first two months of 2021 was $836.1 billion, up 32% YoY, and exports rose 50%. The country is gaining competitive edges in global markets with the help of growth drivers like technology R&D, talent cultivation, China-Europe freight trains, and cross-border e-commerce. Read full article →

Over 10,000 traditional foreign trade firms went online in China for the first time in 2020, and cross-border e-commerce rose 31% to $259 billion. Beijing has vowed to develop new forms of trade and support enterprises in diversifying their markets overseas. Read full article →
Planning to conduct field work in China? 
1) You’ll need an affiliation. 
2) Don’t necessarily affiliate at the top universities. 
3) Load up on your guanxi. 
 4) Have copies of an affiliation letter from your institution. 
5) It’s easier to say no on the phone than it is in person. 
6) Take a Chinese research assistant to meetings with you. 
7) Come bearing gifts. Read full article →

Technology & IP

Basic research spending doubled since 2016 to $25 billion–6% of all R&D expenditure. Basic research will account for 8% all R&D spending by 2025. Read full article $→

China Tianyan, the world's largest radio telescope, will open its doors to astronomers around the world from March 31. 10% of observation time will be allocated to scientists worldwide–450 hours. Read full article $→

China controls 80% of global battery raw materials. China produces 64% of the world’s graphite, and has 80% of the cobalt refining industry. 101 out of the next 136 new battery plants will be in China. Ganfeng and Tianqi Lithium own 26% of the lithium market. CATL and BYD control 32% of the battery market. Read full article →

The PBOC's Mu Changchun says “The Digital Renminbi will be launched with the market serving as its guide, and co-exist with paper currency and mobile payments platforms. The central bank will provide a back-up or alternative to retail payments systems.” Read full article $ →


Podcast: China’s COVID-19 response and the virus’s origins, with Deborah Seligsohn, the US State Department’s Environment, Science, Technology and Health Counselor at the U.S. Embassy in Beijing from 2003 to 2007. Deborah recalls her firsthand experience with China’s SARS response in 2003, shares her views on how much China improved in the intervening years, and offers a critical perspective on the “lab-leak” theory. Listen to Sinica now.

WHO scientists suggested conducting studies in countries with initial reports of positive results in sewage, serum, human or animal tissues/swab and other SARS-CoV-2 tests in 2019. The US, Sweden, Japan, Italy, France, Spain, and Brazil have all made such reports. Download the report here →

Australia, Canada, the Czech Republic, Denmark, Estonia, Israel, Japan, Latvia, Lithuania, Norway, South Korea, Slovenia, the UK and US expressed "concerns" that the WHO report was significantly delayed and lacked access to complete, original data and samples. Read full article →

A new joint venture between Sinopharm and Abu Dhabi's G42 will produce 200 million vaccine doses annually. Production on a smaller scale has already started at an existing Gulf Pharmaceutical Industries PSC plant with a capacity of 2 million doses per month. Read full article $→

Beijing provides vaccine aid to 80 countries and three international organizations, exporting vaccines to 40 countries, and cooperating with 10 nations in vaccine research, development and production. Read full article →

Sinovac can produce 2 billion doses of CoronaVac per year, thanks to a third production line that's now operational and completing commercial runs. Sinovac has already delivered 200 million doses to 20 countries and says 100 million doses have been administered around the world. Read full article →


Gaokao 2020: Slightly dramatized, but otherwise an excellent documentary.

Ruthless Chinese gangsters honor their ancestors! A CCTV documentary, “Crackdown on Crime: For the Country’s Prosperity and the People’s Safety,” dramatizes egregious graft cases.  The first episode told the story of four Liu brothers, imprisoned in 2019, for destroying 100 grave sites to build a lavish hall commemorating their ancestors. Read full article $ →

A survey of 4,000 parents found that 92% spent more than $1,500 yearly on extracurricular classes. President Xi called disorder in the tutoring industry “a stubborn malady” and vowed to solve the problem. Authorities in Shanghai and Beijing, where the problem is most severe, have already cracked down on the industry.  Read full article $ →

Zhāng Méng, a single mother, received maternity insurance for her child after a four year legal battle with the Shanghai city government. Zhang is the beneficiary of a recent change in municipal regulations regarding family rights that now grants the same maternity benefits to single mothers that married couples get. Shanghai is the second region after Guangdong grant maternity benefits without proof of marriage. Read full article →

Nine people were sentenced to 6-10 months jail for illegal fishing in the Yangtze River and East China Sea. A 10-year fishing ban in the river now protects biodiversity.  The main culprit, Mr. Zhang, used technology that could track the direction of the fishery watchdog’s boats before picking a spot to fish illegally. Read full article →

There are 4,100 family names in China. Many people have the same surname + first name: there are 290,607 Chinese with the name “张伟” (Zhāng Wěi). Only 1.97 million people's names have four + characters. The longest occur in Xinjiang, with surnames of 15 characters! Parents can freely choose both the first name and the family name of 22 million newborns every year. Download Frans Vandenbosch's genealogy guide 

After 62 years, Tibet enjoys moderate prosperity. China's Tibet Autonomous Region will keep pace with other parts of the country in completing the building of a moderately prosperous society.  Read full article $ →

The best time to visit Lhasa is April-October, when the air's oxygen content in the air reaches 66%. The climate is warm and humid, and it is not as windy and dry as it is in the winter or early spring. Lhasa has a long period of sunlight throughout the year, so is called “Sunlight City.” Read full article →

Every visitor to China needs a VPN. Keep this guide handy for your next visit. Download the Guide here

Nathaniel Brown has compiled video tours of six Shenzen electronics factories. Watch  →

China has 85 women billionairestwo-thirds of the world total–and minted 24 new ones last year, four times more than America. Read full article $→ 

Martin Jacques: "Hong Kong’s problems are not just political. The failure to tackle the socio-economic problems bequeathed by the British – an oligopolistic colonial-style economy, huge inequality and, above all, the control by tycoons of the supply of land, resulting in sky-high property prices – has understandably led to a  mood of resentment and pessimism, especially among the young". Read full article $→ 

To rejuvenate ecosystems in Xiong'an New Area, Beijing has diverted 2.7 billion cubic meters of water, 190 times the volume of Hangzhou's West Lake. Baiyangdian Lake in Xiong'an (above), North China's largest freshwater wetland, had expanded by 24% between 2017 and 2019 and its water quality has been improved. Read full article $→


UC San Diego surveyed 1,040 Chinese urban residents online to understand their everyday concerns, opinions, and values. See their priorities in the charts below, or Read full article $→


Zichen Wang: "Achieving peak carbon by 2030 and carbon neutrality by 2060 has been elevated to the sustainable development of the nation, opening the floodgates of favorable financing for renewable energy, which is now not a mere regulatory, technical or financial requirement, but a political one. Read full article →

Dário K. Moreira:  The Chinese constitution is not a dead letter. This notion stems from the inadequacy of using Western concepts in discussing the Chinese constitution. Unlike its Western democratic counterpart, the Chinese constitution is not designed to restrain power and it does not conceive the state and its population as a dichotomy. Read full article →

Weeding out organized crime will focus on ten sectors, including: Financial lending; Transport and logistics; Construction; Natural resources; Environmental protection; Tourism; Healthcare. He urged the public to come in with tips and promised officials will be held accountable for life if they don’t take those tips seriously. Read full article $→

The Ministry of Agriculture and Rural Affairs was criticized after a month-long investigation of the Ministry uncovered statistical fraud last year. Read full article $→

186 of China’s 1,037 active coal plants are performing poorly–from a technical, economic and environmental perspective–and are “particularly suitable” for fast-track retirement. A new plan would see coal phased out entirely by 2045 under the 1.5C scenario, or by 2055 under the 2C pathway.  Read full article $→

Asia’s $240 billion regional financial safety has increased the use of local currencies–especially the RMB–and reduced dependence on the US$. China, Japan, South Korea and ASEAN institutionalized use of members’ local currencies in financial emergencies and raised borrowing limits. Read full article $→


In response to a BBC producer's question, Chinese Foreign Ministry Spokesperson Hua Chunying replied, "The BBC World Service is immune from any form of regulation and can produce all the disinformation it likes with legal impunity in the UK. It has caused the spread of the fake news virus not only in the UK but all over the world. BBC should try to do more just and truthful reports to tackle its credibility crisis”. Read the press briefing here

Four of the Five Eyes' governments: "We voice our shared concerns that the international expert study on the source of the SARS-CoV-2 virus was significantly delayed and lacked access to complete, original data and samples. 180 other countries did not support the statement. Read full article → 


Our Pekingnologist, Zichen Wang, dissects a Washington Post Opinion Column by Josh Rogin. In the Post’s words, it launched claims that coronavirus escaped from Chinese lab, and sparked unproven speculation from senior U.S. officials beginning in April that the outbreak occurred as a result of an accident at the Wuhan Institute of Virology. Read full article $→
Max Blumenthal debunks vs. Adrian Zenz on China's Uighur 'genocide'.

Need a Quote From an Official Enemy Denouncing Democracy?
Do Like the New York Times and Make It Up!

NYT: An Alliance of Autocracies? China Wants to Lead a New World Order.
The New York Times (3/29/21) produces a new installment in its ongoing project of demonizing China (FAIR.org1/29/21): "As President Biden predicts a struggle between democracies and their opponents, Beijing is eager to champion the other side."

You know you're in for a hard sell when the New York Times (3/29/21) publishes an article under the headline "An Alliance of Autocracies? China Wants to Lead a New World Order." And Times Beijing bureau chief Steven Lee Myers doesn't disappoint. He asserts, "China hopes to position itself as the main challenger to an international order, led by the United States, that is generally guided by principles of democracy, respect for human rights and adherence to rule of law”.

"Generally" is doing a lot of work in that sentence. I don't think I have to spend too much time reminding you that the United States is a massive supporter of coups and undemocratic governments; has an ongoing history of torturedetention without trial and extrajudicial killing; and asserts the right to invade and coerce countries in defiance of international law. But it's what Myers does with this deceptive summary of US policy that I find most striking; he immediately follows with:
Such a system “does not represent the will of the international community,” China’s foreign minister, Wang Yi, told Russia’s, Sergey V. Lavrov, when they met in the southern Chinese city of Guilin.
Wang, like the New York Times, defines the US-led international order as one based in democracy, human rights and the rule of law, and says that doesn't represent "the will of the international community"? That doesn't seem likely. When you search for the part of the quote that's actually in quotation marks, you find this release (3/26/21) from the Chinese government:

Wang Yi said, "the so-called "rules-based international order" by a few countries is not clear in its meaning, as it reflects the rules of a few countries and does not represent the will of the international community".

What Wang actually said China was challenging is the "rules-based international order"—which he suggested doesn't deserve its name, since only a handful of countries get to make the rules. He didn't mention democracy or human rights in the statement; as for the rule of law, he said, "We should uphold the universally recognized international law."
It's an article of faith in US establishment media that they represent an independent watchdog press, whereas China's news outlets propagandize the official positions of the state. Articles like this one make you wonder what they're talking about. JIM NAURECKASView article on FAIR's website.

Wu Yan, head of Better Cotton Initiative's Shanghai office, inspected Xinjiang and submitted several reports to BCI head office, that "no forced labor" issues were found. But BCI invited Verité, an organization that "provides businesses with tools that help to eliminate labor abuses," to investigate Xinjiang, and Verité did not visit Xinjiang but searched online for information from the US Congress, World Uyghur Congress, and Human Rights Watch. Of the 10 BCI Council members, Huafu, the only Chinese member of BCI (eight are American) was forced to resign. H&M next announced it would "phase out our indirect business relationship" with Huafu Fashion on September 16, 2020. The US AID supports and participates in BCI activities.   Read full article →

The United Nations Human Rights Council released its Universal Periodic Review of the United States, shedding light on its appalling state of basic human rights there. Home to 4% of the world's population, it has 25% of the world's COVID-19 cases, 20% of its deaths and 26% of its criminals. Singapore suggested the US build a more inclusive society and reduce inequalities. Read full article $→


Remembering American Mass Bombings of Chinese Cities
The US is undertaking “strategic planning” with Australia on joint responses to a war over Taiwan. “We’re committed as allies to working together – not only in making our militaries interoperable and functioning well together, but also in strategic planning,” Michael Goldman, the US Embassy’s chargé d’affaires. “And when you look at strategic planning, it covers the range of contingencies that you’ve mentioned, of which Taiwan is obviously an important component,” Goldman added. Read full article $→

China is the world’s second largest arms producer and the ability of its arms industry to domestically develop certain advanced weapon systems is still growing. If it can strengthen its defense industry, it can reduce its reliance on foreign technologies and establish itself as a global leader in cutting-edge military hardware. Read full article $→


Bruno Maçaes

What is happening with China?
A new Cold War not in the cards.
The problem of order.

Bruno Maçães, Financial Times 

A lot of chatter recently on how the rivalry between America and China has entered a phase one might as well call a new Cold War. In the meantime, Goldman Sachs has taken full ownership of its China securities joint venture and Chinese exports are posting record numbers in trade with … the United States. In Europe tempers have been flaring. In the meantime, all German automakers now depend on the Chinese market for 40% of their sales. Someone speculated the other day that they may have to be cut down to size, but no word from the automakers themselves on whether they agree to becoming 40% smaller.

Simply this: Western democracies have been ruled for many decades by what one might call a neoliberal or ordoliberal consensus. Within this framework the state has neither the legitimacy nor the tools to take control over economic relations.

When we entered the first Cold War, the situation was the opposite. The brutal decades of the global depression and total war had left the state in control. The Soviet Union even stood for embracing that ideological model. The United States accepted it, but the goal was to create a new instauration. With the defeat of world communism in 1989, we entered the promised land. Ironically, the Western triumph in the first Cold War has made a second one impossible.

This is not to say there cannot be changes in how we deal with China. Europe and the United States are developing new forms of economic competition with China, but this is better regarded as the final triumph of neoliberalism, not its collapse: Western democracies now behave like firms in the market, jostling for share and control over advanced technology.

Can the model be replaced? Can the need to compete with China bring about the end of the neoliberal consensus? Theoretically, I guess, but we saw with Trump that any flirting with the possibility causes horror and revulsion and will likely be described as a form of fascism. The consensus looks solid and fully in charge of both minds and wallets.

What most commentators miss is that there is a political order. Feelings may change, language may change — but the order decides. Subscribe to Bruno's Substack

Russia-China Deal?

A US$200 Billion China Russia Trade Deal
on the Cards?
 Chris Devonshire-Ellis 

With Sergey Lavrov, Russia’s Foreign Minister meeting his Chinese counterpart Wang Yi a couple of weeks ago, there has been much talk of ‘increased cooperation’ and joint efforts at pushing back against perceived United States global trade bullying.

While global media has highlighted the China-Russia cooperation angle, and a mutual desire to restrict the use of the US dollar in bilateral trade, nothing has yet surfaced about the future of the China-Eurasian Economic Union Free Trade Agreement. That was signed off in 2018, yet remains preferential, meaning no tariff reductions have yet been agreed to make the FTA meaningful.

The Eurasian Economic Union (EAEU) consists of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, and sits in the geographic region from the northern and north-west borders of China to the eastern borders of the European Union. The EAEU currently has free trade agreements with Serbia, Iran, Singapore, and Vietnam and has numerous other FTA in the pipeline, including with several ASEAN nations and countries such as Egypt and Turkey.

China-Russia trade hit US$110 billion in 2020, with both sides aiming to double this by 2024. While much of this trade has been in energy and other commodities, the non-energy portion of bilateral trade has been growing into other sectors and currently consists of 30% of the bilateral flows. Keeping that momentum going and bringing new business sectors into the mix would boost both Chinese and Russian economies, badly affected both by the actions of the United States (trade war, sanctions) and Covid-19.

A China-EAEU FTA would be a start in shrugging off those negative elements and lead to a significant growth in China-Russia and China-Central Asian trade, with implications too for the European Union – Chinese goods can turn up on the EU’s doorstep duty free, and if permitted into EU markets would prove financially competitive for EU consumers. The EU won’t necessarily see it that way with protectionism in for example auto markets a key factor. But with deteriorating relations all round, both China and Russia may decide enough is enough and pull the China-EAEU Free Trade trigger. It is a certainty that Lavrov and Wang discussed this.  If the FTA can be concluded and tariffs agreed, the trade impact on both China and Russia, along with pressure on the EU, will be substantial.

Iran-China Deal

The China-Iran Pact Is A Game Changer

By  M. K. Bhadrakumar 

When China and Iran, two of the United States’ main adversaries in the contemporary world situation, enter into a 25-year strategic pact, it is pointless to split hairs and speculate whether the development affects American strategies. Of course, it does. The West Asian region is all about geopolitics — starting from oil and jihad to petrodollar.

The region served as the crossroads of empires for centuries between Europe and Asia. And in modern history, foreign intruders conflated new poignant realities — failed states, humiliated peoples, crippled economies, extreme inequality and poverty, devastated environments, plundered resources, conflicted geographies, and violent radicalism.

The historic China-Iran agreement signed on March 27 in Tehran during the visit of China’s State Councilor and Foreign Minister Wang Yi has been under negotiation since the 2016 visit by Chinese President Xi Jinping to Tehran. Numerous visits by Iranian Foreign Minister Javed Zarif to China in the recent years testified to the high importance Tehran attached to the negotiations culminating in the formal signing ceremony in Tehran Saturday, which also marked the 50th anniversary of the establishment of diplomatic relations between these two “civilisation states” of the 21st century that enjoyed vast historical continuity and cultural unity across a large geographic region through millennia.

The text of the agreed document has not yet been put on public domain but broadly, we can glean from the joint statement issued on March 27 that the agreement reached during Xi’s visit to increase bilateral trade to $600 billion in the next decade has been acted upon. In fact, the joint statement begins by invoking Xi’s visit. Two supplementary documents signed by the two countries pertain to the “MOU on Jointly Promoting the Silk Road Economic Belt and the 21st Century Maritime Silk Road” and the “MOU on Reinforcement of Industrial and Mineral Capacities and Investment”, whereby both sides “shall expand cooperation and mutual investments in various areas including transportation, railway, ports, energy, industry, commerce and services.”

Iran’s Foreign Minister Mohammad Javad Zarif (R) and China’s Foreign Minister Wang Yi (L) exchange documents during the signing ceremony of a 25-year cooperation agreement, Tehran, March 27, 2021.
The joint statement says that given their relative economic advantages, both sides shall enhance their cooperation in  the field of energy. Iran will supply oil and gas to China while the Chinese side “shall consider financing and investing in the up-and-downstream projects of the energy industries” in Iran.

Again, wide-ranging economic cooperation is envisaged covering investment and trade exchanges, banking, financing, mining, transportation, communications, space, manufacturing industries, development of ports, upgrade and expansion of Iran’s railway networks, introduction of express railway systems in Iran, agriculture, water resources, protection of environment, food security, fighting desertification, water desalination, use of nuclear energy, etc. A bilateral “MOU on Strengthening of Investment Cooperation” is devoted to this aspect and the exchange of knowhow and technology.

Yet, the scope of the pact by far transcends trade and investment. A commentator in the Chinese state media noted, “As it stands, this deal will totally upend the prevailing geopolitical landscape in the West Asian region that has for so long been subject to US hegemony.” The joint statement states that the Comprehensive Strategic Partnership signifies “a major agreement in all areas of bilateral relations and regional and international issues.” It adds, “Currently the regional and international situation is experiencing deep and complex developments. Under such circumstances, the two sides emphasise the importance of cooperation between the developing countries on international affairs and are committed to joint efforts towards realisation of peace, stability and development in the region and the world at large.”

Interestingly, the joint statement highlights that “China attaches importance to Iran’s effective role as the regional power and evaluates positively Iran’s role in activities under the framework of the Shanghai Cooperation Organization and supports Iran’s application for full membership of the Organization.” Of course, it is a way of telling the world that China does not accept the isolation of Iran from the world community. Conceivably, China and Russia are on the same page here.
The US has contributed significantly in providing a raison d’être for such a pact. Neither China nor Iran is expecting any goodwill from the US. They perceive that the adversarial mindset in America is only hardening under President Joe Biden’s watch. As for Tehran, it no longer pins hope that Biden will revive the JCPOA or lift sanctions anytime soon. Thus, without doubt, pushing back against the US unilateralism and sanctions is a leitmotif of the China-Iran strategic partnership.

China’s interest lies in “broad-basing” this leitmotif to embrace its relationships with the regional states as a whole. Wang’s regional tour covered Saudi Arabia, Turkey, Iran, UAE and Oman. The fact that he travelled to Iran via Saudi Arabia is both symbolic and of substantive importance. At his meeting in Riyadh on March 24 with the Saudi Crown Prince Mohammed bin Salman, Wang said China supports Saudi Arabia in safeguarding its sovereignty, national dignity, security and stability, and opposes interference in Saudi Arabia’s internal affairs under any pretext. Prince Mohammed affirmed in response that the rise of China is conducive to global peace, stability and prosperity, as well as a more balanced global development.

The Crown Prince expressed the hope that the two countries will boost anti-terrorism and security cooperation to uplift the bilateral ties to a higher level. Importantly, the Crown Prince said Saudi Arabia ‘firmly supports China’s legitimate position on the issues related to Xinjiang and Hong Kong, opposes interfering in China’s internal affairs under any pretext, and rejects the attempt by certain parties to sow dissension between China and the Islamic world.’

Plainly put, Saudi Arabia has undercut the current US campaign against China regarding Xinjiang. It is a snub to the Biden administration. In fact, Wang’s regional tour testifies to the ground reality that there are no takers for the US’ diatribes against China. The regional states sense that the US is being driven by seething rivalry over a rising China poised to overtake it in a near future as the world’s number one superpower. They refuse to take sides in the rivalry.

The salience lies here: China has introduced, after careful assessment of the power dynamic in West Asia, certain common principles that are equally applicable across the region to provide the basis for its relationships with the regional countries. The unspoken objective is to encourage the regional states to shift to independent foreign policies, shaking off the western yoke, especially US hegemony. But China’s method of doing this is radically different from the coercive and often violent tactics that western powers traditionally adopted in the region.

China has absolutely no interest in using coercion as an instrument of “persuasion” even with Turkey which has a vocal Uighur diaspora (who held a demonstration during Wang’s visit.) At the meeting with Wang, President Recep Erdogan underscored Turkey’s deep interest in “boosting mutual trust, promoting the synergy between China’s Belt and Road Initiative and Turkey’s “Middle Corridor” plan, enhancing cooperation in the fields including interconnection and intercommunication, infrastructure construction and investment, seeking more balanced development of bilateral trade, and encouraging local currency settlementChina instead is offering equal relationships.”

Erdogan also voiced Turkey’s appreciation for China’s five-point initiative for achieving the security and stability in the Middle East and its willingness to deepen communication and coordination with China on regional affairs. Fundamentally, China’s projection of a constructive agenda to develop “win-win”  engagement with the regional states is gaining traction. The Indian Punchline

Growth Potential

Correctly Understanding China's
Development Potential

Justin Lin Yifu Interprets Policy and Economics from the Two Sessions

Whether you're raising a Pekingese dog or a Tibetan mastiff, they were both very small when they were young, about the same size, and both looked like little lions. If you raise a Pekingese dog, no matter how hard you work, it is impossible to raise a big Tibetan mastiff; but if you raise a Tibetan mastiff as a Pekingese dog, it is really possible to raise it as a small Pekingese dog. This is because the growth potential of the Pekingese Dog and the Tibetan Mastiff is quite different. So it is very important to spot the potential.


China's development potential?

From the reform and opening up in 1978 to 2020 , the average annual growth rate of China's economy was 9.2% . Never in human history has any country or region sustained such a high growth rate for so long. We have all witnessed and participated in this miracle in human economic history.

All walks of life are very concerned about the future, but the current domestic and foreign academic circles and public opinion circles are generally not optimistic about China's future development potential. In summary, there are roughly two reasons:

One reason is that China has developed too fast in the past 42 years , whichis abnormal and always has to return to normal growth. According to the view of the internationally renowned economist, former U.S. Treasury Secretary, and Harvard University President Summers, China will fall back to 3%-Normal growth of 3.5% . At the same time, according to research data released by the tenth edition of the World Table of the University of Pennsylvania, China 's per capita GDP at the end of 2019 has reached US$14,129 based on the purchasing power parity of US dollars in 2017 .

Some scholars compare this figure with Germany, Japan, Germany, found 16-yearaverage annual growth rate after reaching about $ GDP14120 per capita ofonly 2.3%; after 16 years, the average growth rate of Japan to achieve this level of only 4.4%. The economic development of Germany and Japan is world-renowned. After 16 years the average growth rate since they arrived at this level only 2.3% and 4.4%, China 2019-2035 growth potential of this 16-year period will not be very high. This reasoning sounds reasonable.


China has begun to age.

After the aging of the population in other countries, economic growth has slowed down, and China will inevitably slow down its economic growth.

The above research seems very convincing, but I personally disagree. This is because there are many factors for China to achieve an annual growth rate of9.2% in the past 40 years , but the most important decisive factor is to make full use of the advantages of latecomers contained in the industrial technology gap with developed countries in the process of economic development.

For a country or region, if the economy wants to develop and the standard of living needs to be improved, it must rely on the continuous improvement of labor productivity. This requires continuous technological innovation and continuous industrial upgrading. The technology and industry of developed countries are at the forefront of the world, and their technological innovation and industrial upgrading must be invented by themselves. The investment is very large, the risk is very high, and the rate of progress is very limited. Historical experience shows that the normal growth of developed countries in the past 100 years is the What Moss said is 3%-3.5% per year . However, developing countries can take advantage of the industrial and technological gap with developed countries and introduce mature technologies as a source of technological innovation and industrial upgrading. The cost and risk of this approach are relatively small. Developing countries that know how to use this method can develop their economies faster than developed countries. After the reform and opening up, China became one of the thirteen developing economies that knew how to use this advantage to achieve 7.0% or more per year for 25 years or more after World War II .

Therefore, from this perspective, the future development potential of China depends not on the current income level, but on the gap between China and the developed countries represented by the United States.

Take Germany and Japan, for example, Germany's per capita GDP of about $14120 in 1971, when the United States has a 72.4% level of GDP per capita,has undoubtedly among the most developed countries in the world, we have exhausted latecomer advantages, To carry out technological innovation and industrial upgrading, we must invent ourselves, and the economic growth rate will naturally slow down. Japan’s per capita GDP reached approximatelyUS$ 14,120 in 1975. At that time , its per capita GDP reached 69.7% of the American per capita level . It has also become one of the most developed countries in the world. Technology has reached the forefront of the world, and economic growth must rely on its own invention and development. Of course the speed will also slow down.

China's per capita GDP (PPP) reached US$ 14,129 in 2019 , but only 22.6% of the US level in the same period .

In contrast, when did other countries such as Germany, Japan, South Korea, etc., have developed better, when their per capita GDP reached 22.6% of that of the United States ? Germany was in 1946 , Japan was in 1956 , and South Korea was in 1985 . Germany from 1946 to 1962, for 16 years the average economic growth rate reached 9.4%; Japan from 1956-1972, the average economic growth in 16 years to reach 9.2%; South Korea from 1985to 2001 between, during the suffered the Asian financial and economic crisis Under the condition of one-year negative growth , the average growth rate in16 years is still as high as 9.0% .

Judging from these data, China should also have about 9% growth potentialin the next 16 years (from 2019) , because Germany, Japan, South Korea and other countries have already achieved it.

In this regard, many people have begun to emphasize the second reason, that is, the aging of the population affects the economic growth rate. Indeed, countries facing an aging population have slower economic growth. But don’t forget that most countries with population aging are developed countries. When aging comes, their technology has developed to the forefront of the world. Technological progress must be invented by oneself, and the rate of labor supply will be superimposed on it, and economic growth will be even slower. .

China is experiencing an aging population, but our per capita GDP is only 22.6% of that of the United States . Technological innovation and industrial upgrading can take advantage of latecomers, and we can also allocate labor from low-value-added industries to high-value-added industries to increase labor productivity. The space is still very large. Therefore, if China can take advantage of latecomers, even if its population does not grow, it can grow faster than developed countries.

In addition, China is currently gradually extending the retirement age, which is conducive to increasing labor supply. Moreover, the most important thing about the labor force is not only quantity, but quality. China can also improve per capita efficiency.

Let's compare the population growth of Germany, Japan, and South Korea in the 16 years after the per capita GDP reached around US$ 14,100 , and look at the contribution of demographic factors to economic growth.

Germany ’s average annual population growth from 1946 to 1962 was 0.8% ; Japan ’s average annual population growth from 1956 to 1972 was 1.0% ; South Korea ’s average annual population growth from 1985 to 2001 was0.9% . China 's natural population growth rate in 2019 is 0.3% , and it may drop to 0% in the future . Therefore, even if we do not consider the possibility of distributing labor from low-value-added industries to high-value-added industries, and the possibility of extending retirement and improving the quality of education, the population growth factor of China and Japan, Germany, and South Korea is at most A difference of 1 percentage point.

Potential Growth Rate of 8% by 2035

Therefore, by 2035 , China should still have an average annualgrowth potential of 8% . Compared with the actual 9% growth in Germany, Japan and South Korea , I consider the population growth factor and reduce it by one percentage point.

Of course, to have this growth potential does not necessarily have to be fully developed regardless of other factors, because what China wants to achieve is high-quality growth, and it must then solve environmental problems such as carbon peaks, carbon neutrality, urban-rural gaps, regional gaps, etc. The problems must be resolved, and there is also the "stuck neck" problem caused by friction in Sino-US relations, which must be overcome by innovation on our own. Considering these issues that must be dealt with, as well as the 8% growth potential, I judge that it is entirely possible for China toachieve an average annual real growth of 5%-6% in the next 15 years ( 2021-2035 ) .

The General Secretary mentioned in his recommendations on the "14th Five-Year Plan" and 2035 long-term goals that by 2035 , China will strive to double the size of China's GDP on the basis of 2020 , or strive to double the per capita income on the basis of 2020 . Regardless of which goal is achieved, an average annual economic growth rate of 4.7% needs to be achieved from 2021 to 2035 .

If China can achieve a growth rate of 5-6% , by 2025 , the current exchange rate per capita will cross the threshold of US$ 12,535 and become a high-income country. This will also be a historic moment. Because until now, the world's population living in high-income countries only accounts for 18% of the total population. If China becomes a high-income country, this number will double.

By 2035 , China's per capita GDP (current exchange rate) should be above US$ 23,000 ( calculated based on the purchasing power of US dollars in2019 ), and it will become a modern socialist country.

Using the same method described above (from the perspective of the gap in the industry and technology level represented by the income level gap), we can find that China still has an average annual growth potential of 6%between 2036 and 2049 , and considering that there are still many The issues that need to be addressed, it is entirely possible to achieve an average annual growth rate of about 4% . Based on this calculation, China's per capita GDP will reach half of that of the United States by 2049 , which is an important indicator of the great rejuvenation of the Chinese nation.


Development copes with international changes

Faced with a major change in the world unseen in a century, we must first think about why this change occurred. The economy is the foundation. Let's look at the development and changes of the economy.

In 1900 , the Eight-Power Allied Forces attacked Beijing, including Britain, the United States, France, Germany, Italy, Russia, Japan, and the Austro-Hungarian Empire. The GDP of these eight countries combined accounted for50.4% of the world's total in terms of purchasing power parity . The Austro-Hungarian Empire collapsed after the First World War and divided into two countries. Later, the Canadian economy grew rapidly. By 2000 , the Group of Eight (referred to as G8 , the United States, the United Kingdom, France, Germany, Italy, Russia, Japan, and Canada) ) GDP accounts for 47% of the world in terms of purchasing power parity . In other words, the international political economy of the entire 20th century was dominated by these eight developed countries.

By 2018 , the General Secretary put forward "a major change unseen in a century" at the Central Foreign Affairs Work Conference. The background is that the G8’s GDP share in the world has dropped to 34.7% , and it has changed from half of the world to a third of the world. It is difficult to continue to be the dominant force in the world. So it can be seen that as early as 2008when the international financial and economic crisis broke out, the “G8” that dominated world affairs became the “G20”.

Two countries have the greatest impact on this change, one is the United States and the other is China. In 2000 , the United States accounted for21.9% of the world's GDP in terms of purchasing power parity , but in 2014China surpassed the United States to become the world's largest economy. The current GDP of the United States accounts for about 16% of the world's GDP , and China is even higher than that. These facts show that the influence of the United States is declining, and the influence of China is increasing. In this regard, the American political powers, intellectuals, and policy research circles all see it in their eyes. Therefore, when Obama was in power, he proposed the strategy of "returning to the Asia-Pacific". After Trump took office, he launched a trade war and a technology war. After Biden came to power, I guess it was "changing the soup without changing the medicine." This kind of exchange of the positions of the world leader and second child, of course, caused tension between the two countries, and at the same time brought a lot of uncertainty to the world, so it is "a major change unseen in a century."

If China can tap the development potential and realize the development speed obtained from the previous analysis, by 2049 , China’s per capita GDPwill reach 1/2 of that of the United States , and China’s population is four times that of the United States, so the total economic scale will be twice that of the United States. .

Among them, Beijing, Tianjin, Shanghai and the five eastern coastal provinces (Shandong, Jiangsu, Zhejiang, Fujian, and Guangdong) have a population of a little more than 400 million. I believe that the per capita GDP and economic scale of these regions will reach the same level as the United States by 2049. . GDP per capita represents the average labor rate level and the average technology industry level. By then, the areas where the United States can hold China's neck are basically gone. China has a population of 1 billion in thecentral and western regions , and its per capita GDP is only one-third of that of the United States . Its economic scale is comparable to that of the United States. These regions are still catching up, and their economic growth can be faster. Therefore, the economic growth of China as a whole can be faster.

In this situation, I think the relationship between China and the United States may change from tension to relaxation. Because first, by that time, the United States will not have any areas that can hold China’s neck; second, China’s economic aggregate was twice that of the United States at that time, and the United States cannot change this fact no matter how unhappy it is. Third, China’s economic growth is fast. It is the largest market in the world. For the US economy to develop well, it must be necessary for its own employment and prosperity.


Historical roots. 

Japan was one of the eight-nationcoalition forces in 1900. In 2000 , Japan was the only country in Asia that entered the "Group of Eight". Japan was the leader of Asia in the entire 20thcentury. However, in 2010 , China's economic scale surpassed that of Japan, and its influence was rising. Japanese rightists felt a great sense of loss, so problems such as the Diaoyu Islands were created, and Sino-Japanese relations became tense. Recently, Sino-Japanese relations have eased. The reason is that China’s economic scale is already 2.8 times that of Japan. No matter how unhappy it is, it can’t change this fact. Japan’s economic development depends on the Chinese market, and the relationship between China and Japan tends to win-win.

In the "14th Five-Year Plan" and the 2035 long-term goal outline, it is mentioned that development is the foundation and key to solving all the problems in our country. At the same time, it is also mentioned that China's development is still in an important period of strategic opportunities, and continued development still has many aspects. Under the premise of ensuring the obvious improvement of quality and efficiency, we must give full play to our growth potential. If we can follow the recommendations of the central government, follow the policy guidance of the "14th Five-Year Plan" and the 2035 long-term goal outline, I believe that we can overcome the middle-income trap and build China into a modern socialist country by 2049and realize China. The goal of the great national rejuvenation can also control the changes unseen in a century and rebuild a new, stable and shared prosperity for the world.

Health BRI

“A global community of health for all”

How China sees the BRI in the post Covid era

Tom Baxter


It is important also to remember that BRI has never been only about infrastructure development. A final theme running through Wang Yi’s speeches during his 9-country tour in January is that of the BRI as a provider of health services, with a focus on COVID-19 prevention. In his New Year’s Eve interview Wang Yi emphasized public health and vaccines as a priority of both China-ASEAN relations and for this year’s Forum on China-Africa Cooperation (FOCAC). He called the emphasis part of the goal of creating “a global community of health for all,” a phrase which appears to be entering the official diplomatic lexicon. 

Putting actions to words, his visits to the Philippines, Indonesia and Myanmar all concluded with promises of medical supplies and vaccines. Nearly USD 500,000 worth of medical equipment will be donated to Myanmar. 25 million doses of the Sinovac Biotech vaccine will be donated to the Philippines and 50,000 to the Seychelles.

As financing for large scale infrastructure projects continues to shrink in scale from its 2017 heights, China will likely reorient the emphasis of the Belt and Road towards other public goods. In some ways a logical extension of 2020’s “mask diplomacy”, the gearing of bilateral engagement toward public goods also dovetails with China’s revamped foreign aid activities, now termed “international development cooperation” (IDC). As Stella Hong Zhang has recently argued on this blog, the new White Paper on international development cooperation is likely to encourage more “soft” aid projects, rather than an overwhelming focus on “hard” infrastructure. The White Paper also spells out that China’s IDC should increase focus on the “greater good”, and seek to “make the greater good and self-interest compatible.” What that means in practice is still unclear.

Wang Yi’s recent “vaccine diplomacy” could be seen as an example of this principle in action – greater good with, no doubt, a decent dose of politically motivated self interest. But it also begs the question, if health services and exchanges and other public goods are to become a prominent component of the BRI in the post pandemic era, how will the roles of different ministries and government bodies in the BRI adjust in response? Will the policy banks and Sinosure, for example, see their significance in the BRI (huge to date) reduce as debt for infrastructure decreases in significance? And will new bodies such as the China International Development Cooperation Agency, established in 2018 and charged with overseeing IDC, become a newly influential force in the initiative?

The Belt and Road Initiative faces a very different world in the (post-) pandemic era. China’s foreign ministry and other institutional thinkers are already hard at work re-emphasising and re-orientating the Initiative to better suit the new conditions. Of course, events and actions from outside the Chinese state will also play a role in the reshaping of the Initiative. The coup in Myanmar, which happened just a few weeks after Wang Yi visited the generals and Aung San Suu Kyi, demonstrates just how volatile some of the key countries in the BRI are. Meanwhile, the implications of the Biden presidency’s reengagement in regions such as ASEAN and sub-Saharan Africa for China’s Belt and Road Initiative are looming “known unknowns”.

Despite all the changes in the world, the BRI does not find itself redundant or out of steam, however. Wang Yi’s January travels give some indication as to the evolution in the Initiative in store. Subscribe to Panda Paw Dragon Claw →

Rural Revolution

In the remote Chinese village of Caizhai, a series of wooden pavilions step down a slope next to a babbling brook, their pitched tiled roofs echoing the rocky peaks of the mountains behind. Through big picture windows, day-trippers look inside, watching big barrels of soya make the journey from bean to tofu, passing through different rooms for soaking, grinding, pressing and frying, in a mesmerising parade of beancurd production.

Caizhai has always been known as a centre of tofu. But, before this facility was built in 2018, families would produce small batches in their home workshops. They struggled to make ends meet, as the conditions didn’t meet the food safety standards for the tofu to be sold in supermarkets, while the younger generation saw little incentive to stick around in the countryside and join ailing family businesses.

Now, however, with a newly formed village co-operative running this purpose-built factory, they are processing 100kg of soybeans a day, supplying nearby schools and workers’ canteens, and selling the improved product – for almost double the previous price – to retailers in the cities. Around 30 younger villagers, who had been lured away by metropolitan life, have returned to Caizhai to join the production team, and visitors have increased 20-fold. They are drawn by an increasingly widespread nostalgia for the countryside, to see traditional tofu-making in action and get a taste of village life, creating demand for further cafes, guesthouses and related businesses nearby.
“We think of it as a kind of architectural acupuncture strategy,” says Xu Tiantian, the Beijing-based founder of DnA, the architecture practice behind the tofu factory and several other such projects across rural Songyang county in China’s eastern Zhejiang province. “In each case, we have tried to make something that restores the villagers’ pride in their local identity, as well as bringing in visitors and creating a local economic network.”

Over the last seven years, she has been working with county leaders to build an impressive constellation of new facilities around the region, from a brown sugar factory and a camellia oil workshop, to a rice wine distillery and pottery production plant, along with community centres and museums. The projects have now been brought together in a handsome new book, which reads like the work of several practices over several decades, such is the dizzying speed of change in China.

From a ring of bamboo trees tied together and pulled inwards to create an outdoor domed theatre, to a cave-like museum of Hakka culture made from rugged stone walls, the elegant collection of structures are all finely tuned to their setting. The projects mostly use simple local materials and traditional building techniques, updated to create a contemporary vernacular – oozing a seductive rustic chic that helps to attract a growing crowd of cultured urbanites in search of a rural restorative. But it was an uphill struggle at first.  Read full article $→

Mao, Economist

Chairman Mao is the Greatest Economist in the History of Mankind


[Ed: Mao Zedong was an excellent accountant and founded the PBOC, the world's richest bank].

Many people nowadays assume that the Chinese Communist Party relied on armed struggle to seize power. Armed struggle was obviously a core element of their strategy,  but if you want to seize power can you rely on armed struggle alone? If you seize power through only violent means, what kind of political power do you really have? Wasn’t this Li Zicheng’s mistake? There are many differences between the Communist Party’s revolution and the peasant uprisings of previous centuries, they were not, as the reactionaries slander them, ‘roving bandits’.

This morning I visited the Bank of Jinan, established in 1939 by the Chinese Communist Party. When people think ‘roving bandits’, are they really imagining people who start banks? We hear of bandits robbing banks, but never building them. This aspect of the party’s history has long been neglected. This year I’ve lectured throughout the country, and everywhere I go, I emphasize that Chairman Mao is the greatest economist in the history of mankind. Everyone already knows that Mao Zedong was a great politician, a great military strategist, not to mention a great poet and calligrapher, even his enemies have to admit it, but no-one has taken notice of the fact that Mao was also a remarkable economist.

By the start of the 1930s, when the Red Army was only a few years old, not only did they have their own munitions factories, they’d already formed their own banks, the Bank of Jiangxi and the Bank of Minxi, then, later on, they also established the Chinese Soviet Republic National Bank. Rather than ‘bandits’, they had already established themselves as nation-builders.

What kind of ‘chairman’ was Chairman Mao? Where did this name come from? He wasn’t the chairman of the party, there was no party chairman at that time. Mao founded the Red Army’s base in Jinggangshan, and the Central Soviet Republic, before ultra-leftists seized power there, pushing Mao aside. After sidelining Mao, they gave him the title of ‘Chairman of the Republic’, this was a bogus title with no real power, but Mao didn’t complain, instead, he thought to himself, “At the moment, the party doesn’t appreciate me, they give me this ‘chairman’ position, I might as well do the best I can with it.” While acting as ‘chairman’, he spent a lot of energy trying to grasp the economic and social situation, in the process, he accumulated an abundance of experience in economic work. Mao’s essays from this period have a lot of historical value.

The President of the Chinese Soviet Republic National Bank was Mao’s younger brother, Mao Zemin, who later became one of the six martyrs of the Mao family. Mao Zemin threw all his energy into setting up this bank. Where did they get the money to set up this bank? A lot of people say they seized it from local tyrants, but you can only do that once, after you’ve seized all their money, you can’t go back a second time for more. No, you have to rely on your own productivity.

A bank needs to issue banknotes, to issue banknotes you need to have legitimacy in the eyes of the public, if they don’t recognize the currency as legitimate, what are you going to do, force them to use it? When you issue banknotes, your enemy will know about it, and they’ll find ways of causing trouble, they’ll produce counterfeits. The enemy also had a lot of banks, these were considered the legitimate banks of the nation, the official banks of the ‘Republic of China’.

Everyone has read Hong Songbing’s famous book, Currency Wars. These days, it might seem that America is the master of currency warfare, but our party are veterans in this field. The party knew how to make something out of nothing. During the struggle against the Kuomintang, the party would print more money when they needed to buy more things, then the enemy began making counterfeits of our bills, so we did the same to them, it was a war, after all. We not only counterfeited their currency, but we also manufactured silver dollars: Big Head Yuans, Big Head Suns, so, of course, later on, we could do Chiang Kai Shek’s face too. All of this required a high degree of technical skill. Nowadays, because there’s a lot of fake RMB bills floating around, banks spend a lot of energy teaching the public how to identify counterfeits. Back then this was a life-or-death struggle.

By the time the party had established themselves at Yan’an, our industrial and financial sectors had learned the lessons of the Jiangxi Soviet era. Many of our liberated zones were able to print ‘border-region currency’, but neither Chiang Kai Shek nor the Japanese thought much of this currency, little did they know that it’d become more and more valuable. A currency needs economic stability to gain legitimacy in the eyes of the public. Because the enemy were creating chaos, the public began to lose confidence in our currency and exchanged all they had for silver dollars. Printed banknotes should be backed by gold or silver in the vault, if these vanish, your bank will collapse. So, how did the leaders of our banks win back the confidence of the public? They got some soldiers to carry basket after basket of silver dollars down the street, letting the public know that, “The Communist Party sure have a lot of money”. After that, signs appeared in stores saying, ‘We only accept paper bills’, the public began thinking, “These paper bills must have value”, so they went back and exchanged their silver dollars for our currency.

In the currency war today, if we could only learn from our own glorious traditions, we would see through America’s chicanery at a glance.

By the War of Liberation, the Chinese Communist Party’s numerous banks had become increasingly powerful. We can see from novels and movies about the period that, by this point, the Kuomintang occupied areas were wracked with inflation and skyrocketing prices, and then, by 1948, it became so absurd that you’d need stacks and stacks of banknotes to buy a single roll of toilet paper, so you might as well just use the banknotes as toilet paper. The cost of daily goods were doubling by the hour, the Chinese Communist Party had crushed them in financial warfare. At the end of 1948, just at the moment when we had pushed them to the very brink of collapse, we unleashed our trump card, the circulation of the ‘renminbi’ (The People’s Currency). The ‘renminbi’ was the devastating haymaker that finished off the Kuomintang. Old Chiang’s toilet paper was no longer of any use, so they ran off to Taiwan with as much gold and silver as they could carry. The end result of the currency war was total victory for the Communist Party. When it comes to economic strategy, our party are veterans. We, to a large extent, used the economy to take down the Kuomintang, and it was also a powerful weapon during the struggle against the Japanese Puppet Army.

We’re not opposed to people learning from other nations and cultures, but that mustn’t mean that we neglect our own nation’s long tradition of learning. Look at Mao Zedong, Chen Yun, Chen Yi, these three men were all world-class economists, only we never said so in the past, because when people hear talk of ‘doing business’ and ‘trade’, we don’t consider such activities honorable. This is a point of view we must change. We can say, “Even when doing business, you can’t outsmart us!” More...

China in Africa

Chinese Engagement in Africa:
Beyond the Caricature

W. Gyude Moore 

China’s emergence as a competitor to the United States and its Western allies has evoked hyperbolic descriptions about its motives and methods in Africa. Chinese debt to African countries has been caught in Western accusations of China’s alleged ‘debt trap’ diplomacy.

These conversations have both elided the context in which China’s relationship emerged and failed to address the staying power of the colonial nature of Africa’s trade and commercial ties with all external actors, including China. This discussion attempts to explore the actual origins and nature of Chinese engagement in Africa and draw attention to the change required in Africa’s relationship with the world.

The beginning of Africa-China engagement

In 2000, African Presidents, dozens of ministers from China and Africa, and representatives from various international and regional organizations met in Beijing for the first Forum on China-Africa Cooperation. Over the next twenty years, the Forum would become the key mechanism for Chinese engagement on the continent. Held every three years, the Forum on China-Africa Cooperation culminates in an announcement of ever increasing amounts available for loans and aid to African countries. Beginning with $1 billion in 2000 and rising to $60 billion in 2015 and 2018.

During this time China’s engagement has superseded that of other external actors on the continent. Construction companies spread across the continent building railways (over 6,000 kilometres), roads (over 6,000 kilometres) ports (about 20), and power plants (over 80). China’s seemingly insatiable appetite for African commodities fuelled a boom and delivered growth across the continent’s many resource-dependent economies.

But questions arose about China’s true intent in Africa. Was the goal to replace the Washington Consensus with the Beijing Consensus?[1] Was this a new form of colonialism?[2] These questions, usually raised in Western press, were never based on evidence since China’s undertaking was never coherent and cohesive enough to be called a consensus and the voluntary nature of its bilateral relationships was a far cry from colonialism.

How China became a dominant actor in two decades

An Economist piece from five months before the first Forum on China-Africa Cooperation offers an insight into the West’s own consensus on Africa’s prospects in 2000. In a piece called Hopeless Africa, the authors use Sierra Leone as a stand-in for the entire continent, writing that the country “is an extreme, but not untypical, example of a state with all the epiphenomena and none of the institutions of government” and that “it has poverty and disease in abundance, and riches too: its diamonds sustain the rebels who terrorise the place.”[3] Nothing in this passage is technically inaccurate. An HIV-AIDS pandemic had ravaged parts of central and southern Africa. The continent’s plethora of civil wars had precipitated humanitarian catastrophes that sent refugees streaming across borders. Africa’s external debt profile had worsened considerably such that by the end of 1990s the region’s debt had skyrocketed to $271.9 billion.[4] To address the low income countries’ debt crisis, the High Indebted Poor Countries Initiative (HIPC) was launched in 1996. In 2000, the UN launched its Millennium Development Goals, with Africa central to the campaign against extreme poverty. For many in the West, Africa was perceived as a problem to be solved and not a partner for business.

For China however, which was solidifying its place as the world’s factory, Africa provided an opportunity free of rivals. For a continent lagging behind every other region in infrastructure and labour productivity, locked out of international financial markets, and facing borrowing constraints, the Chinese engagement was a gift from the gods. Beyond financing and construction projects, China’s lack of concerns about rights violations, corruption. or poor public financial management suited African autocrats. Chinese loan agreements with undisclosed terms and no-bid contracts blossomed in countries with weak accountability systems. Without guardrails to protect against cost inflation or public debate about debt terms, these deals sowed the seeds of the modern criticism of Chinese lending in Africa.

But efforts to describe Chinese-financed projects as debt traps are not backed by evidence. As my colleagues at the Center for Global Development note, “It is a myth that massive Chinese lending has only supported white elephant projects and bridges to nowhere. In reality, evidence suggests that Chinese financed infrastructure projects have had positive economic effects for many developing countries.”[5]

Africa’s Relationship with the Rest Today  

What has gotten lost in accusations of debt traps and neo-colonialism is the underlying, unchanging pattern of African trade with the rest of the world. The arrival of China has not altered the colonial origins and character of this pattern.  Africa remains trapped in trade dynamics – where the continent exports raw materials and imports finished goods – that were first developed during the colonial era when Africa served as a feedstock to advanced economies.

These dynamics have important effects today. In a study of world merchandise exports between 1948 and 2015, no African country was among the top 30 exporters of goods and services. With Africa’s exports skewed towards primary commodities, the continent is vulnerable to price shocks. The maintenance of this extractivist model is responsible for the widening income gap between Africa and the rest of the world and it has sustained the exodus of Africans looking for opportunities elsewhere. 

Africa’s engagement with the rest of the world has always been from a position of weakness. In some ways, Africa-China engagement today continues this trend, with China setting and announcing the Forum on China-Africa Cooperation agendas.[6]

It is important not to minimise the impact of the suboptimal decisions and political distortions wrought by Africa’s leaders. There is no substitute for local leadership and unless the quality of governance improves, it is difficult to imagine how Africa will ever improve the terms of its loan or trade agreements. No external actor, bilateral or multilateral, will assume more responsibility for the continent’s future than its citizens.

What can be done

COVID-19 has plunged the continent into its first recession in 25 years and recovery will difficult, but Africa’s partners can help. By the end of the pandemic, government spending (a significant portion across the developed world) and private borrowing to mitigate the pandemic’s effects had risen by $24 trillion dollars.[7] It is an indication that the developed world has the economic wherewithal to assist Africa in breaking out of colonial patterns. With 54 votes in international forums, African states must begin to collectively advocate in both multilateral and bilateral relationships, an agenda that seeks to break free from this pattern. At summits like the Forum on China-Africa Cooperation, they need to influence the agenda to reflect this objective. Below are three recommendations for what this new agenda would entail:

A truce on the developing Great Power competition in Africa:  The scale of Africa’s infrastructure and social services funding gap means that the continent will need both the United States and China and must not be pushed into selecting one over the other. The Chinese will remain dominant in infrastructure financing and continue to find willing partners in Africa, and the West needs to accept it. But agreements that lack transparency and need better governance undermine long-term growth. Africa needs its Western partners for continued investment in education, training, health, and soft infrastructure, like border systems and customs control, that make integration possible. Africa needs the unique competences of these external actors and cannot afford to have a single partner of choice.
Provide support for industrial policy in Africa. The pandemic has made clear the impact of the lack of industrial capacity. Without industrial policy, the much-needed process of both sophistication and diversification of exports will stall.[8] Whether at the WTO, World Bank or IMF, Africans need to push for an international system that supports industrial policy. Multilateral institutions set the global agenda for development policy and their ambivalence or hostility to industrial policy undermines African growth and development.
Support the continent’s effort at regional integration. On January 1st, 2021 the continent began trading under the Africa Continental Free Trade Area. Its progress will be long and difficult but as a single market, Africa’s leverage in negotiations and ability to attract investment will improve. Yet China,[9]the UK,[10]and the US are pursuing bilateral trade agreements diverting attention and resources from the continental model.  
Provide support for climate resilience and adaptation. As the development community discusses building back better and greener post-COVID-19 it is imperative that support be provided for Africa. The region is disproportionately affected by climate change and yet accounts for just 3 percent of cumulative CO2 emissions.[11] Without real, material support for climate resilience and adaptation, the current climate trajectory could force 100 million people into extreme poverty by 2030.[12] Tax Justice Network

* W. Gyude Moore is a senior policy fellow at the Center for Global Development where he focuses on infrastructure financing in Africa and the changing landscape of development finance on the continent, including the rise of China. Previously Moore served as Liberia’s Minister of Public Works with oversight over the construction and maintenance of public infrastructure from December 2014 to January 2018.


Future Perfect

12 of 2100 CPPCC members given prominent floor time, why? Part II

By Yang Liu.


#6. Chen Wei 

Chen gained national fame during the Covid pandemic as a leading scientist that led China’s vaccine development efforts. In her speech, she called for more resources for China’s tech innovation, particularly in the biotech field. Chen summarized China’s disadvantages in biotechnology innovation as  Lacking top-level design and scientific coordination, unconsolidated research forces, unsound long-term support mechanism, shaky basic research, insufficient hardware, and underdeveloped rapid response system. She then laid out 4 recommendations:

  1. Establishing “white list” system for major science research projects related to national security. Fully take advantage of new model whole-of-country approach, promote the optimal allocation of scientific research forces and resource sharing, systematically plan the layout of major projects in major frontier areas such as life and health technology and biosecurity, amont others. Establish a "white list" for core technology teams, and committ long-term stable national investment to achieve the organic integration of "project - base - talent". This white list method could lay a sound scientific foundation for the protection of national development interests, eliminating major security risks, and breaking through foreign technological blockade.
  2. Constructing a National Technology Innovation Center for Special Needs Vaccines. The Ministry of Science and Technology has issued the "General Plan for Promoting the Construction of National Technological Innovation Center (Provisional)", which contains language for the construction of several national technological innovation centers during the 14th Five-Year Plan period. I’d recommend building a National Technology Innovation Center for Special Needs Vaccines, focusing on the major needs of national biosecurity defense, taking stock of "chokepoint" technologies and strong point technologies, strengthening top-level design and scientific coordination, carrying out cooperation between military and civil departments, different fields and disciplines, in order to achieve "have to know-how for known technologies, and have the ability to discover unknown technologies" and promote national biosecurity and social stability.
  3. Continuously carry out scientific research on the prevention and control of Covid-19. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping as the core, China's Covid epidemic has been fully controlled. But from a global perspective, the picture is much more complicated, therefore there should not be any slackening of the prevention and control measures. China should continue to increase scientific research efforts, the integrated use of biotechnology and big data, cloud computing, artificial intelligence and other innovative means to further clarify the origin of the virus, animal hosts and pathogenic mechanisms, carry out in-depth analysis of the impact of virus mutations on existing prevention and control measures, proactively to carry out pre-research for important mutant strains of vaccines, nucleic acids and antibody detection reagents, and make timely updates when necessary.
  4. Create a good research ecology dedicated to basic research. Vigorously promote the spirit of scientists, and strive to create a good innovation ecology conducive to basic research. Offer more support to those who work in basic research away from the spotlight in project research, platform construction, and talent programs. Inspire everyone to explore, without distractions to focus on the frontier, accomplish more breakthroughs from 0 to 1. Encourage more young talents to be indifferent to fame and fortune, to be innovative, to devote themselves to scientific research, and to play a supporting role in scientific innovation for a better future for our country!

As context, your host would just point to the remarks Chinese premier Li Keqiang made during the closing of the NPC, in which he echoed Chen’s opinion and touched on potential policy changes that can better incentivize scientists. 

Over the years, China has made some major breakthroughs in the field of science and technology innovation. The field of applied innovation has also developed rapidly, but there is indeed a shortage in the field of basic research. To build a strong country in science and technology and enhance the ability of scientific and technological innovation, we must lay a solid foundation of basic research and applied basic research. The height of a building depends on the depth of the foundation, We must not rush, but go one step at a time.

At present, Chinese society’s investment in research and development as a proportion of GDP is not high, especially basic research investment only accounts for 6% of the investment in research and development, while developed countries are usually 15% to 25%. Our next step to increase investment in basic research, but also continue to reform the science and technology system. Let researchers have the autonomy, particularly the autonomy of disposing research funds. Researchers should not be mired with filling out forms, evaluation and other matters, but rather devote their full energy to research. The development comes from a sound foundation. Speaking of this, I would like to say a few words to the young students, no matter what career you will be engaged in, what kind of ambition you have, you must pay attention to strengthen the basic knowledge learning. Building solid basic skills and cultivate the ability to innovate is not contrary but a parallel.


#7. Huang Jiansheng: 

Huang’s main point was to preserve China’s food security. Namely, to make sure that China can feed its population under any scenario. Huang makes four recommendations, make sure China has enough farmland, innovate China’s seed technology, incentivize farming and reduce grain spoilage:

Curb unlawful occupancy of arable land and the de-agriculturalization of arable land, and firmly guard the red line of maintaining at least 1.8 billion mu (appr. 300 mln acres) of farmland……It is recommended to strengthen scientific innovation to improve arable land quality, construction of scientific and technological platforms to promote arable land protection and utilization, and set up major R&D projects to provide effective scientific and technological support for the rational use of arable land and ground strength improvement.

Set up major special projects at the national level, pool resources, integrate forces, strengthen the basic research of breeding, as soon as possible to achieve breakthroughs in "chokepoint" technologies.

Improve the compensation mechanism for main grain-producing areas, increase the transfer of payments, reward large grain-producing provinces, cities, and counties according to grain production and output, encourage greater land transfer, the development of moderate scale operations, support the development of food processing industry, so that they have financial income, economic development, and the will to grow more grain.

Further improve modern grain reserve infrastructure system, optimize utilization, maintenance and renovation and upgrading efforts, and continue to promote the construction of smart storage to reduce losses caused by temperature and humidity, rodent and insect damage. Promote low-temperature refrigeration technology in key grain output provinces so that the storage period of wheat and rice be extended from 5 and 3 years, respectively, to 10 and 5 years.

Chinese society places great emphasis on making sure that it produces enough grain to feed the entire population.  Your host would also point to the second recommendation by Huang, which stresses the importance of innovating China’s seed technology, as the concept of seed security is gaining more traction.  "No. 1 central document" for 2021, released by the CPC Central Committee and the State Council, stated that China shall “win the battle of the seed industry and overtake others” (打好种业翻身仗). Also on this front, China is to finish building crop seed bank this year (Xinhua English story here).


#8. Ma Yongsheng: 

Though Ma is the head of Sinopec, one of China’s main fossil fuel suppliers, his speech very much focuses on non-fossil fuel energy, which he argues China will need to rely on in order to achieve better energy independence. Ma described China’s disadvantages in the energy sector as follows:

Fossil fuel makes up too much of China’s energy consumption. In 2020, coal makes up 56.7% of China’s energy source, while petroleum and natural gas make up 19.1% and 8.5% respectively. Nonfossile fuel energy makes up 15.7%. Over-dependence on foreign fossil fuel. In 2020, foreign petroleum and natural gas make up 73% and 43% of all Chinese consumption.

A mismatch between the energy-producing regions and the major energy-consuming regions. China’s energy is mostly generated in the north, northwest, and southwest, while the biggest energy-consuming region lies in the southeast.

Technological shortfalls. China still relies on foreign know-how in regards to core tech and equipment, which puts China in face of “choking point” risks.To tackle the problems, Ma called for 4 initiatives, your host will paraphrase his words here to avoid confusing you with tedious official language.

First, prioritize conservation and improve energy efficiency. Ma called for more energy-efficient equipment to be used, create economic incentives for energy conservation, and promote “a culture of energy conservation.”

Second, optimize China’s energy consumption structure. Ma called for faster development of non-fossil energy, and establish a diverse energy supply of coal, petroleum, natural gas, nuclear, new energy, and renewable energy. By the year 2025, non-fossil energy should make up the majority of recremental consumption. Ma particularly raised the lessons learned from the wind and solar energy industries, saying that an overarching strategy should be developed and a regulatory regime implemented, to avoid disorderly investment and underachieving results. Ma also emphasized the development of hydrogen energy, especially accelerate the production of hydrogen by electrolysis, and better utilize China’s geothermal energy. Ma also mentioned the development of shale oil and gas, coal-bed methane.

Third, Ma called for technology innovation, recommending policy support for innovations in the sectors of hydrogen production, oil and gas exploration, and development, clean and efficient utilization of coal, smart grid operation, distributed energy construction.

Fourth, enhancing international cooperation, expanding sources of energy to satisfy Chinese demand. Ma recommended a series of overseas energy bases be built, especially in Belt and Road countries, to ensure energy can be reliably purchased and shipped. Ma also said China should try to improve its bargaining power in the global energy market as a major energy consumer.


#9 Wei Zhenling: 

Wei hailed the accomplishment of China’s anti-poverty campaign, which saw the successful eradication of extreme poverty in China.

Wei said she belonged to Mao’nan ethnic group, and suffered from poverty when she was little. She recounted her first-person point of view in witnessing the living standard of those around her gradually raise in recent years.

She noted that to elevate communities out of poverty, the Chinese government sponsored road projects, clean water pipelines, schools, and medical facilities, and helped communities find industries that could sustain their livelihood. Read full article $→  Subscribe to Beijing Channel

Important Books

Why China Leads the World

Talent at the Top, Data in the Middle, Democracy at the Bottom

The first book to explain the three elements of China's success: 
1. Talent at the Top means that China's brightest, most idealistic people are are admitted to politics–a policy unchanged in 2200 years.
2. Data in the Middle means that every policy is implemented, tracked, and optimized based on terabytes of data. The PRC is the world's largest consumer of public surveys.
3. Democracy at the Bottom means that ordinary, honest amateurs assemble twice a year to check the stats and sign off on new legislation. Policies need a minimum of 66% popular support to become law. That's why 95% of Chinese say the country is on the right track.

By the end of this year there will be more hungry children, more poor, homeless, drug addicted, and imprisoned people in America than in China.  Why China Leads the World investigates why the epidemic accelerated the change of global leadership from America to China and examines China’s bigger, steadier economy, its science leadership, stronger military, more powerful allies, and wider international support.
Crammed with charts, footnotes, and lengthy quotes, Why China Leads the World is a profoundly disturbing book that helps readers understand the tectonic shift and adapt to this new era–and even thrive in it.
The size of China's displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world. Lee Kuan Yew: The Future of US-China Relations. The Atlantic.  
The Coronavirus accelerated the pace of change of global leadership from America to China. There are now more hungry children, more poor, homeless, drug addicted, and imprisoned people in America than in China. 
Suddenly, China's larger, steadier economy, its leadership in science, its stronger military, more powerful allies, and wider international support have handed it a lead that widens every day.  Crammed with direct quotes from its movers and shakers, charts, and footnotes, Why China Leads the World tells a remarkable tale, explains a tectonic shift, and helps you adapt to this new era, and even thrive in it. 
If we could just be China for one day we could actually authorize the right decisions. Thomas L. Friedman. The New York Times  

300 pages, 27 charts and graphs. $9.99 on Amazon, eBook outlets, and bookstores worldwide.

The Needham Report

The Report of the International Scientific Commission for the Investigation of Facts Concerning Bacteriological Warfare in Korea and China (the ISC report), published at the height of the Korean War, validated claims by North Korea and China that the US had launched bacteriological warfare (biological warfare, BW) attacks against both troops and civilian targets in those two countries over a period of several months in 1952.

The most vilified document of the 20th Century.

The report’s release in September, 1952, brought a withering international attack. It was roundly denounced by American and British politicians of the highest rank, ridiculed by four star generals, accused of fraud by celebrated pundits, misquoted by notable scientists, and scorned by a compliant Western press. Charges were made against the quality and truthfulness of its science. Its “unstated” political agenda was denounced. The ethics of interviewing captured US pilots was excoriated and its authors were publicly flayed as communist dupes. The report was red baited in the US halls of Congress and deemed unpatriotic to read, and therefore went unread and deliberately forgotten over the years, which has been the fate of Korean War history in general. In subsequent decades, volumes placed in American university library collections were quietly and permanently removed from circulation.
When the rare copy came up for auction, it was discretely purchased and disappeared from public view. This critical 67 year old truth commission document from the Korean War was slipping towards oblivion. For these very reasons, historians and truth seekers should exalt the wondrous rebirth of the ISC Report from near extinction with the publication of this new electronic edition. We welcome the sunshine that re-publication brings to a shadowy and suppressed chapter of American Cold War history. (from the introduction by Thomas Powell) 800 pages.  $9.99.


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