Transcript and Takes of Politburo Meeting on the Chinese Economy Chaired by Xi
The meeting called for more fiscal policy to boost the economy and emphasizing domestic consumption
Today, the Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation, deploy economic work for the second half of the year. Here are some of my takes from official release:
Calling more fiscal policy to boost economy
In contrast to the previous meeting, this times’ meeting's release sends clear message for more fiscal policy to boost economy. It use the words like
“macro policies should continue to exert force and be more effective. need to strengthen counter-cyclical adjustments”
宏观政策要持续用力、更加给力。要加强逆周期调节
“prepare and introduce a number of incremental policy measures in a timely manner”
及早储备并适时推出一批增量政策举措。
In terms of central and local debt, the release suggests more government bonds to be issued later this year.
“need to speed up the issuance and use of special bonds, make good use of ultra-long-term special government bonds“
要加快专项债发行使用进度，用好超长期特别国债
Emphasizing domestic consumption
The release mentioned "income" three times and "consumption" seven times, which is significantly more than the meeting at the end of April.
we should focus on boosting consumption to expand domestic demand, and the focus of economic policies should be more on benefiting people's livelihood and promoting consumption. We need to increase residents' income through multiple channels, enhance the consumption ability and willingness of middle and low-income groups, take service consumption as an important starting point for expanding and upgrading consumption, and support consumption such as culture and tourism, elderly care, childcare, and housekeeping.
要以提振消费为重点扩大国内需求，经济政策的着力点要更多转向惠民生、促消费，要多渠道增加居民收入，增强中低收入群体的消费能力和意愿，把服务消费作为消费扩容升级的重要抓手，支持文旅、养老、育幼、家政等消费。
First time talking about “anti-involution“ within emerging industries
Among all Chinese emerging industries, the EV industry has been the most vocal about "involution" (内卷). Currently, Chinese EV makers are engaged in a price war against each other. This intense competition and race to the bottom might be the context behind the following sentence in the Politburo meeting release;
We need to strength industry self-discipline and prevent vicious competition in the form of "involution". We need to strengthen the market's survival of the fittest mechanism and unblock the exit channels for backward and inefficient production capacity.
要强化行业自律，防止“内卷式”恶性竞争。强化市场优胜劣汰机制，畅通落后低效产能退出渠道。
Some observers also interpreted it as a measure to mitigate potential trade barriers from the EU and US, since the price war might also have spill over effect internationally.
Anti-formalism to reduce the burden on grassroots
Another key point of this time’s meeting is anti-formalism and bureaucracy.
Continue to streamline documents and meetings, coordinate and standardize supervision, inspection and assessment, effectively solve the problems of excessive frequency and complexity, strictly regulate the secondment of cadres from the grassroots level, strengthen the standardized management of government mobile Internet applications, rectify "formalism at the fingertips"
In terms of “formalism at the fingertips“指尖上的形式主义，it refers to the superficial and excessive emphasis on forms and digital paperwork, like taking pictures to prove you’ve done something.
The meeting passed “Several Provisions on Rectifying Formalism to Reduce the Burden on Grassroots Units“ 《整治形式主义为基层减负若干规定》
Full Transcript:
Here I also attach the full translation of the release: https://mp.weixin.qq.com/s/sj7VSORh8uepNPzaTzB2QQ
The Political Bureau of the CPC Central Committee held a meeting on July 30 to analyze and study the current economic situation, deploy economic work for the second half of the year, and review the "Several Provisions on Rectifying Formalism to Reduce the Burden on Grassroots". The meeting was chaired by Xi Jinping, General Secretary of the CPC Central Committee.
The meeting pointed out that since the beginning of this year, under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, all regions and departments have faced difficulties, taken proactive actions, deepened reform and opening up, strengthened macro-control, effectively responded to risks and challenges, and maintained overall steady economic operation with steady progress, continuing the upward trend. New growth drivers and new advantages are being cultivated at a faster pace, high-quality development is being solidly promoted, and social stability is being maintained.
The meeting pointed out that the current external environment changes have brought more adverse effects, domestic effective demand is insufficient, economic operation has shown differentiation, and there are still many risks and hidden dangers in key areas, and the new and old kinetic energy conversion has pain points. These are problems in development and transformation. We need to enhance risk awareness and bottom-line thinking, actively respond, maintain strategic determination, strengthen development confidence, and sing the praises of China's economic prospects.
The meeting emphasized that the tasks of reform, development and stability are very heavy in the second half of the year. We must fully implement the spirit of the 20th CPC National Congress and the 2nd and 3rd Plenary Sessions of the 20th Central Committee, adhere to the general tone of seeking progress while maintaining stability, fully and accurately implement the new development concept, accelerate the construction of a new development pattern, develop new quality productive forces according to local conditions, focus on promoting high-quality development, further comprehensively deepen reform around advancing Chinese-style modernization, increase the intensity of macro-control, deepen innovation-driven development, tap the potential of domestic demand, continuously enhance new growth drivers and new advantages, enhance the vitality of business entities, stabilize market expectations, boost social confidence, strengthen the sustained recovery and improvement of the economy, effectively ensure and improve people's livelihood, maintain social stability, and unswervingly accomplish the goals and tasks of economic and social development for the whole year.
The meeting stressed that reform should be used as a driving force to promote stable growth, structural adjustment, and risk prevention, give full play to the guiding role of economic system reform, and promptly introduce a number of reform measures that are ripe and accessible. We must adhere to and implement the "two unwavering", promote the complementary advantages and common development of various forms of ownership economy, improve the basic system of market economy such as property rights protection, market access, and bankruptcy exit, and prevent and correct the intervention of economic disputes by some localities using administrative and criminal means. We should carry forward the entrepreneurial spirit and accelerate the building of more world-class enterprises in reform, innovation and fair competition.
The meeting pointed out that macro policies should continue to exert force and be more effective. We need to strengthen counter-cyclical adjustments, implement a proactive fiscal policy and a prudent monetary policy, accelerate the full implementation of established policy measures, and prepare and introduce a number of incremental policy measures in a timely manner. We need to speed up the issuance and use of special bonds, make good use of ultra-long-term special government bonds, support the construction of national major strategic and key areas of security capabilities, and make greater efforts to promote large-scale equipment renewal and trade-in of bulk durable consumer goods. We need to optimize the structure of fiscal expenditure and secure the bottom line of the "three guarantees". We need to comprehensively use a variety of monetary policy tools to increase financial support for the real economy and promote a stable and declining comprehensive social financing costs. We need to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. We need to effectively enhance the consistency of macro policy orientation and form a strong joint force for all parties to jointly promote high-quality development. We need to continue to give full play to the role of major economic provinces.
The meeting stressed that we should focus on boosting consumption to expand domestic demand, and the focus of economic policies should be more on benefiting people's livelihood and promoting consumption. We need to increase residents' income through multiple channels, enhance the consumption ability and willingness of middle and low-income groups, take service consumption as an important starting point for expanding and upgrading consumption, and support consumption such as culture and tourism, elderly care, childcare, and housekeeping. We need to further mobilize the enthusiasm of private investment and expand effective investment.
The meeting pointed out the need to nurture and strengthen emerging industries and future industries. We need to vigorously promote high-level scientific and technological self-reliance, strengthen research on key core technologies, and promote the transformation and upgrading of traditional industries. We need to provide strong and effective support for the development of gazelle and unicorn enterprises. We need to strengthen industry self-discipline and prevent vicious competition in the form of "involution". We need to strengthen the market's survival of the fittest mechanism and unblock the exit channels for backward and inefficient production capacity.
The meeting pointed out that we need to promote high-level opening-up to the outside world, further create a first-class business environment that is market-oriented, law-based, and internationalized, steadily expand institutional opening-up, implement the requirement of "zeroing out" foreign investment access restrictions in the manufacturing sector, introduce a new round of pilot measures to expand the opening-up of the service industry, and promote the stabilization and recovery of foreign investment utilization. We need to actively cultivate new drivers of foreign trade development and expand intermediate goods trade and green trade. We need to solidly promote the high-quality joint construction of the "Belt and Road".
The meeting stressed the need to continue to prevent and defuse risks in key areas. We need to implement the new policies to promote the stable and healthy development of the real estate market, adhere to the combination of digesting inventory and optimizing increments, actively support the acquisition of existing commercial housing for use as affordable housing, further improve the delivery of buildings, and accelerate the construction of a new model for real estate development. We need to improve and implement local debt package solutions and create conditions to accelerate the resolution of local financing platform debt risks. We need to coordinate risk prevention, strengthen supervision, and promote development to boost investor confidence and enhance the inherent stability of the capital market.
The meeting pointed out that we should solidly promote rural revitalization in an all-round way, consolidate and expand the achievements of poverty alleviation, and ensure that the rural population does not return to poverty on a large scale. We need to strengthen the protection and quality improvement of cultivated land, do a good job in agricultural production, and strive to achieve a bumper grain harvest for the whole year.
The meeting stressed the need to increase efforts to ensure and improve people's livelihood. We need to strengthen the employment-first policy and do a good job in employment for key groups such as college graduates. We need to strengthen assistance and support for low-income people and weave a tight social security net. We need to do our best in flood control, disaster relief, and disaster reduction, ensure energy and power supply during the peak summer period, ensure work safety, and earnestly solve problems such as food safety and social security. We need to carry out the battle against pollution in depth and solidly promote carbon peaking and carbon neutrality. We need to do a good job in the preliminary research and planning for the "15th Five-Year Plan".
The meeting pointed out that formalism and bureaucratism are stubborn diseases that must be resolutely rectified with great efforts. The grassroots level is the "last mile" for implementing the decisions and deployments of the Party Central Committee, and it cannot be bound by formalism and bureaucratism. The Secretariat of the CPC Central Committee must persistently grasp and not let go, the special work mechanism for rectifying formalism and reducing burdens at the grassroots level at the central level must conduct regular supervision and inspection, the central and state organs and the party committees and governments at the provincial level must be pragmatic when arranging and deploying work, the party committees at all levels below the provincial level must fulfill their main responsibilities, and the discipline inspection and supervision organs at all levels must strengthen supervision and execution.
The meeting stressed the need to strengthen the construction and implementation of the system, coordinate the reduction of burdens and empowerment at the grassroots level, further strictly implement the spirit of the Eight Provisions of the Central Committee and their implementation rules, continue to streamline documents and meetings, coordinate and standardize supervision, inspection and assessment, effectively solve the problems of excessive frequency and complexity, strictly regulate the secondment of cadres from the grassroots level, strengthen the standardized management of government mobile Internet applications, rectify "formalism at the fingertips", further rationalize the rights and responsibilities at the grassroots level, promote the sinking of resources, services and management to the grassroots level, streamline the creation of demonstrations and standards, and pay attention to the effectiveness of demonstrations. For prominent problems that are strongly reflected by Party members, cadres and the grassroots masses, they should be rectified as soon as they are discovered; for problems with certain typicality and universality, efforts should be concentrated on carrying out special rectifications and clean-ups, so as to truly free the grassroots from the shackles of formalism and bureaucratism, guide the majority of Party members and cadres to establish a correct view of political achievements, motivate them to take on responsibilities and actions, and have more energy to grasp implementation.