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What Part of My Speech Didn’t You Understand, Xi Asks China

Key Speakers At The Final Day Of The APEC SummitKey Speakers At The Final Day Of The APEC Summit
Xi's words are as true today as they were four months ago. Apparently.Photograph by SeongJoon Cho — Bloomberg via Getty Images

Ah, China. Where four-month old speeches by the Party leader can become today’s hot news, if fear of accountability and fear of arbitrary justice are combined in just the right measures.

That’s the takeaway from the news today that People’s Daily, the Communist Party’s leading mouthpiece and required reading for its leaders, published a long speech Wednesday that President Xi Jinping had given back in January outlining his commitments to supply-side reform.

While it’s not exactly clear why this was chosen to fill the space between today’s ads, it’s easy enough to take a guess: China’s own leaders don’t understand the direction that Xi wants to take the economy in, and needed reminding.

Their confusion is understandable. For the first three months of the year, China was indulging in some desperate pump-priming as it tried to prop up a flagging industrial sector. Then all of a sudden, an anonymous government source is splashed all over People’s Daily decrying the folly of debt-fueled growth. What’s a poor regional bureaucrat, with a couple of honorable mentions in the Panama Papers and some ambitious underlings snapping at his heels, supposed to think?

To read the Hong Kong-based South China Morning Post‘s translation of the speech, Xi’s main message appears to support the ‘anonymous official’ quite well, stressing the urgency of “cutting capacity, reducing inventory, cutting ­leverage, lowering costs, and strengthening the weak links.” That is the flesh on the bones of the Party’s latest five-year plan commitment to let the market play more of a role in the economy, and have the state withdraw from it accordingly.

But there can, of course, be no question of aping foreign, ‘neo-liberal’ supply-side reforms, Xi added. When Xi talks about supply-side reforms, he means promoting China’s own companies and manufacturing as part of its future prosperity.

“The problem in China is not about insufficient demand or lack of demand, in fact, demands in China have changed, but supplies haven’t changed accordingly,” Xi said, according to the SCMP’s translation.

He offered the example of Chinese consumers shopping overseas for daily products such as electric rice cookers and toilet covers–items found in rival Japan, no less– and milk powder and baby bottles in Hong Kong. Xi said those examples told the story of domestic supply not matching domestic demand.

He did not reference the criticisms and concerns that average Chinese have about the safety of goods sold in their country, nor did he reference the 2008 case of a government cover-up of tainted baby milk powder.

“Our supply-side reform, to say it in a complete way, is supply-side structural reform, and that’s my original wording used at the central economic work conference,” Xi said.

That ought to do it. Everyone on the same page, now?