PEOPLE-CENTERED CONCEPT TO CHART NEW ROAD MAP

The idea of a people-centered development concept, a prominent feature of President Xi Jinping's economic thought, demonstrates China's pragmatic and people-oriented policy approach to restore social and economic activities amid the COVID-19 pandemic, and such an approach will continue to guide the nation's future economic policy as policymakers draft the next five-year plan, experts said.

Ever since the outbreak of the pandemic, China has acted swiftly by issuing a set of supportive policies to support the economy and shore up growth. While a country's GDP growth is highly correlated with its economic prosperity and corporate profits, Beijing did not set a specific growth target this year given the immense uncertainties and acute challenges China is facing.

Instead, the authorities opted for a people-oriented policy approach which aims at ensuring employment, people's basic livelihoods, and the survival of businesses, especially private and smaller ones. The shift to a more pragmatic policy approach underscored the bottom-line thinking of the policymakers to safeguard the wellbeing of the people and society while winning the strenuous battle against poverty this year.

Xi, who is also general secretary of the Communist Party of China Central Committee, has pointed out that continuously improving the quality of people's lives is the mission and purpose of all of the leadership's work and it is also the fundamental goal of building a moderately prosperous society in all respects.

The people-centered development concept, one of the guiding principles of China's policymaking and practice, has helped the country to quickly overcome the shocks of the pandemic and enabled China to put its economy back on the growth track, economists said.

Dominik Peschel, head of the economics unit of the Asian Development Bank's resident mission in China, said that social protection is a stabilizing factor during an economic downturn and it is essential to support the recovery in the current challenging environment.

"Social protection creates a healthy labor force and improves productivity levels. By securing incomes and protecting workers from social risks, a comprehensive social security system reduces income inequalities, and fosters consumption and the role of domestic demand as a driver of growth," he said.

Social protection in China has largely improved in recent years and it requires further action including enhancing coordination among the existing plans, increasing budget allocations for social policies including affordable housing, strengthening the legal framework, and improving institutional capacity, Peschel said.

In the short term, creating better lives for the people means safeguarding employment and raising families' incomes to boost demand and consumption as the economy is recovering from the damage caused by the COVID-19 pandemic.

CHINA'S ECONOMY RECOVERS WITH STRONG MOMENTUM DURING HOLIDAYS

China's economy has recovered with strong growth momentum across diverse industries during the past National Day and Mid-Autumn Festival holiday.

Statistics from the Ministry of Commerce indicate China's sales volume for key retail and catering enterprises reached 1.6 trillion yuan ($238.38 billion) from Oct 1 to 8, with the average daily sales volume increasing by 4.9 percent compared with last year's National Day golden week.

To stimulate consumers' enthusiasm to spend, a variety of sales activities were promoted and a large amount of subsidies and vouchers for automotives, home appliances, and food and beverages were released.

The recovery of consumption drives the growth of the express delivery business. Data from the State Post Bureau of China shows from Oct 1 to 8, the national postal express industry collected 1.82 billion parcels, up 53.42 percent year-on-year.

With accelerated integration of online and offline consumption, the country's postal express business has been maintained at a high growth range of above 30 percent since February, when China's express parcel volume grew from negative to positive, the State Post Bureau said.

As people started to leave their homes under the managed pandemic situation, cinemas welcomed a boom during the past holidays. As of 11:59 pm Oct 8, the 2020 National Day box office reached 3.92 billion yuan, which was the second-largest National Day box office in China's film industry, according to China's Box Office app of the Office of the National Film Industry Development Special Fund Management Committee.

As COVID-19 has come under control in the country, more people have started to resume travel. During the eight-day holiday, the country received a total of 637 million trips by domestic tourists, with domestic tourism revenue reaching 466.56 billion yuan, according to the Ministry of Culture and Tourism.

On the last day of the eight-day holiday, the national railways ushered in the peak of return passenger flow. On Oct 8, the national railways expected to see 13 million passenger trips, with 1,234 additional passenger trains, China Railway said.

From Sept 30 to Oct 7, the national railways have transported more than 10 million passengers for eight consecutive days, according to China Railway.

During the eight-day holiday, South China's Hainan recorded 1.04 billion yuan in offshore duty-free shopping, 146,800 tourist trips and 998,900 products, up 148.7 percent, 43.9 percent and 97.2 percent year-on-year, respectively, according to the General Administration of Customs.

Starting from July 1, Hainan increased its annual tax-free shopping quota from 30,000 yuan to 100,000 yuan per person, and the range of duty-free goods has also expanded from 38 categories to 45, with the previous tax-free limit of 8,000 yuan for a single product lifted.

Data from the Civil Aviation Administration of China showed the country witnessed a total of 13.26 million passenger trips in the period of Oct 1-8, with average daily passenger traffic rebounding to 91.07 percent of the National Day holiday in 2019.

The number of actual flights across the country reached 117,327 between Oct 1 and 8, and the average daily flight volume recovered to 89.7 percent of the 2019 National Day holiday, according to the Civil Aviation Administration of China.

NEW RULES TO HELP LENDERS REDUCE RISKS

China has issued new rules that seek to improve the ability of the country's global systemically important banks (G-SIBs) to absorb losses and adhere to the global regulatory standards on capital adequacy and liquidity by Jan 1, 2025, as part of the ongoing efforts to prevent systemic financial risks.

The People's Bank of China, the central bank, and the China Banking and Insurance Regulatory Commission, the banking regulator, said that banks which have been designated as G-SIBs by the Financial Stability Board, an arm of the G20, would have to comply with the Basel Committee requirements on "total loss-absorbing capacity", or TLAC, to ensure that they have enough equity and bail-in debt.

Though the regulators have not announced an exact date for the new rules to kick in, some financial institutions estimate that the Big Four banks－Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China and China Construction Bank－may need additional capital of about 2 trillion yuan ($295 billion) to 3 trillion yuan to meet the 2025 standards.

The Big Four lenders may need to increase capital by nearly 392.4 billion yuan every year for the next six years, said Zhang Xu, an analyst with Everbright Securities.

The new policy will help China's G-SIBs, or banks that are deemed "too big to fail", to make the necessary plans to satisfy the Basel capital adequacy rules and help develop a multilevel capital market, said a PBOC spokesman.

The unbalanced financial structure of banks, which have been the mainstay of China's financial system, had prompted regulators to promote non-bank lending institutions and expand capital markets to curb debt growth, analysts said.

Moody's Investors Service, a global credit ratings agency, said in a report that during the first eight months of this year, new lending rose by 25 percent on a yearly basis to 15.1 trillion yuan. Formal bank lending will continue to dominate new credit supply, the ratings agency said, adding that banks would continue to maintain a strong flow of long-term credit to corporates in line with the government's policy of providing adequate support to businesses and investment.

In China, regulators have shortened the approval period for perpetual bonds issues, reduced entry barriers for issue of preferred shares and allowed eligible banks to use multiple capital replenishment instruments, Wan said.

The central bank also said that it would establish a countercyclical capital buffer regime, which became effective from Sept 30, to protect the banking sector from periods of excess aggregate credit growth that have often been associated with the buildup of systemic financial risks.

During economic downturns, the capital buffer helps reduce risks that could arise when credit supply is crimped by the regulatory capital requirements.

CHINA MAKES COMMITMENT TO WORLD VACCINE ACCESS

China has signed up to the COVID-19 Vaccines Global Access Facility, or COVAX, as an important step to build a shared community of health for all and honor its commitment to turn COVID-19 vaccines into a global public good, Foreign Ministry spokeswoman Hua Chunying said on Friday.

"Even when China is leading the world with several vaccines in advanced stages of R&D and with ample production capacity, it still decided to join COVAX," Hua said in an online statement published on the website of the ministry.

"We are taking this concrete step to ensure equitable distribution of vaccines, especially to developing countries, and hope more capable countries will also join and support COVAX," she said, adding China will also strengthen vaccine cooperation with relevant countries through the COVAX network.

The initiative, led by the Global Alliance for Vaccines and Immunization, the Coalition for Epidemic Preparedness Innovations and the World Health Organization, aims to fast track the development and manufacture of COVID-19 vaccines in response to the pandemic, and guarantee fair and equitable access for every country and region in the world. It aims to have 2 billion doses available by the end of 2021.

All participating economies, regardless of income levels, will have equal access to a portfolio of vaccines once they are available. Participating economies are required to commit to legally binding agreements and make their upfront payments to the facility by Friday.

NEW VISA RULES CALLED A THREAT TO US TECH

The Trump administration's increased restrictions and scrutiny on Chinese students and workers in STEM areas pose a critical supply issue to the US tech workforce, which relies on foreign-born talent, according to tech industry experts.

The H-1B visa, a program for highly skilled workers whom many Silicon Valley companies depend on, has become an administration target.

The government's latest move against the H-1B visa program is a major rule change unveiled on Tuesday, including requiring employers to pay higher wages, shortening the visa's validity to one year from the current three years, and strengthening worksite investigation by the Department of Homeland Security (DHS).

Ken Cuccinelli, the second-in-command at DHS, said the latest changes will affect "over one-third" of all H-1B visa petitioners.  This year, the US Citizenship and Immigration Services received nearly 275,000 registrations for the H-1B program, which is subject to an 85,000 cap.

In the past few years, the administration has stepped up visa restrictions on Chinese students over concerns about "intelligence theft" and further cracked down on the H-1B visa program for highly skilled foreign workers to "protect Americans".

The measures, such as shortening visa validity and barring entry or issuance of visas for suspected military links, have made it harder for Chinese students, especially STEM (science, technology, engineering and mathematics) graduates to study in the US.

"Chinese students are a tremendous resource for American research and innovation. They bring a diverse perspective and unique background when collaborating with domestic students and colleagues," said Peter Leroe-Muñoz, general counsel and vice-president of tech and innovation policy at the Silicon Valley Leadership Group, whose organization represents nearly 400 Silicon Valley's companies.

Many of the students become permanent US workers, and Chinese STEM workers are 17 percent of all tech workers in Silicon Valley, he said.

"This mixing of ideas inspires creative thinking and innovative approaches within the tech and business fields," he told China Daily. The government's actions "deprive American companies from these talented workers" and moreover, the restriction on Chinese students, based on their country of origin, is "antithetical to America's cherished values of inclusivity and openness", he added.

Foreign talent is "super critical", because "without it we cannot design or run our fabs", said Jimmy Goodrich, vice-president for global policy at Semiconductor Industry Association.

Among the STEM and electrical engineering graduates in the US, more than 50 percent are foreign born, according to Goodrich. "So, you have a supply issue in the United States, where American-born students simply are less interested in STEM degrees," he said.

THOUGHT FOR THE DAY

Each man should frame life so that at some future hour fact and his dreaming meet. - Victor Hugo