Summary of today’s top items:
**1.Onshore markets unimpressed as we await the CEWC -**PRC stock markets opened up strong Tuesday but then gave back most of their gains. As positive as the Politburo meeting readout may sound, and as hard as the propaganda organs and sell-side talk it up, there is still a lot of caution about how much the rhetoric will be supported by substantive policies. The CEWC readout is not likely to have much more detail, so those waiting for actual numbers may remain disappointed, but it seems clear there has been a real shift at the top in thinking about the challenges in the economy, as well as the realization that the external environment may materially deteriorate soon and so they need to be ready to respond. In a clear signal that the CEWC is imminent, Xinhua has a long piece Wednesday titled "Key Decisions at a Critical Time: The Central Committee with Xi Jinping at its Core Steers China's Economic Ship Forward". For those still in doubt about the state of the economy, Xinhua concludes the piece with this reminder of the wisdom and strength of Xi’s leadership:
At a crucial stage in China's economic development, General Secretary Xi Jinping, with his far-reaching vision and keen assessment of the times, has repeatedly made key decisions from the high vantage point of the Party and nation's overall development. With great political courage and wisdom, fearless determination and resolve, he has calmly responded to challenges, pointed out the direction forward, and inspired powerful confidence and strength.
在中国经济发展的关键一程，习近平总书记高瞻远瞩、审时度势，从党和国家发展全局高度，以巨大的政治勇气和智慧、无畏的胆识和魄力，一次次作出关键抉择，沉着应对挑战，指明前进方向，激发起强大信心和力量。
China's economy has always developed through overcoming challenges, grown through weathering storms, and strengthened through enduring tests. Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, and guided by Xi Jinping Economic Thought, all ethnic groups across the Party and nation are united in heart and firm in confidence. By facing difficulties head-on and overcoming obstacles, China's economic ship will forge ahead unstoppably on its new journey.
中国经济从来都是在战胜挑战中发展，在风雨洗礼中成长，在历经考验中壮大。在以习近平同志为核心的党中央坚强领导下，在习近平经济思想科学指引下，全党全国各族人民团结一心、坚定信心，迎难而上、攻坚克难，中国经济航船必将在新的征途上一往无前。
**2.Xi meets with the heads of 10 international economic organizations -**Premier Li met with them Monday. Xi met with them Tuesday and used the meeting to reiterate that China is ready “to work with the major international economic organizations to practice multilateralism, promote international cooperation, and support the development of Global South countries, so as to advance an equal and orderly multipolar world and a universally beneficial and inclusive economic globalization, and build a just world of common development.” He also used the event to criticize “building ‘small yard with high fences’” as well as “decoupling and disrupting supply chains”. In what may be less a message to the incoming Trump Administration and more one to the rest of the world to say that China is the “reasonable” and “responsible” country, Xi “underscored that China is willing to maintain dialogue, expand cooperation and manage differences with the U.S. government and work for steady, sound and sustainable development of China-U.S. relations, and hopes that the U.S. will work with China in the same direction. Tariff war, trade war and tech war are against the trend of history and laws of economics, and they produce no winners.” And it was very useful for the PRC to have the AIIB and the New Development Bank elevated to equal status as the World Bank and other international economic organizations.
3.PLA exercise around Taiwan - A massive PLA military exercise has been underway around Taiwan, but this time the PRC has not announced the exercise. Taiwan officials say the size of the naval component is the largest since 1996. Several theater commands and the Coast Guard are participating. This is a significantly escalatory exercise.
4.Politburo Study session on governance and development in border areas - In the December Politburo study session Xi Jinping outlined a comprehensive strategy for China's border governance. The session, with CASS historian Li Guoqiang as the discussant, focused on several key aspects:
Economic Development: Xi emphasized that border regions must not be left behind in China's modernization efforts, calling for high-quality development tailored to local conditions and integration into the national market;
Ethnic Unity: He stressed the importance of building a Chinese national community in border ethnic regions, promoting socialist core values, and strengthening ethnic groups' identification with the nation, culture, and Communist Party;
Security and Stability: Xi identified national security and social stability as bottom-line requirements for border governance, emphasizing the need for improved infrastructure and technological capabilities;
Theoretical Foundation: He called for strengthening research in border studies and governance, developing an independent Chinese knowledge system in border studies, and building a qualified research team with strong political conviction.
The overall message emphasized integrating border regions into China's modernization while maintaining security and promoting ethnic unity.
**5.Another horrible case of a missing woman found in a village -**A woman with a master’s degree who suffered from mental illness disappeared in 2011. She was recently discovered in a Shanxi village having given birth to several children with one of the villagers. That man is now in custody, and this case has brought comparisons to the terrible chained woman case of Xuzhou, Jiangsu that came into public view in 2022.