🌍 Why Xi just banned boozy lunches

5.30pm

That’s when South Africa’s Cyril Ramaphosa is due to meet President Trump at the White House later today (Wednesday), after months of trading barbs around racial discrimination, refugee policy, and beyond.

No Xi-nanigans!

Ain’t no party like a Communist Party. Or at least, that was the case until Monday?

According to 20 new austerity guidelines just dropped (🇨🇳) by China’s State Council (cabinet), “waste is shameful and economy is glorious”. So China’s officials will again now have to cut down on several budget items, including all those:

• Fancy meals

• Lavish flower arrangements

• Fabulous send-off ceremonies, and

• Training programs that look a teeeeensy bit like group tours. 

This isn’t exactly news for party members. Beijing issued the first such guidelines in 2013 shortly after Xi Jinping rose to power. But this is the first solid update in years. 

So, why is Xi cracking down again now? 

His stated reasons mention declining land sale revenues and mounting local government debt, though it’s hard to see how cutting down on a few Zhonghua cigarettes and peony arrangements might dent the estimated $7-10 trillion in local government obligations.

So here are three other reasons:

1. A stormy economic outlook

China’s president has taken a defiant yet sober tone, warning of “difficulties and obstacles” ahead, and flagging China will have to “adjust and optimise its economic structure” to face a changing world. 

That’s partly because, even with US tariffs slashed back to (a still hefty) 30%, he’s grappling with headwinds across deflation, demographics, and a property collapse.

And while trimming a bit of official excess won’t make a meaningful economic difference to the real estate bubble exhaling an estimated $18 trillion, it does send a political signal that Xi’s sober message is for everyone. Otherwise, there’s the risk of discontent bubbling up through the gaps and eroding the party’s legitimacy, which leads us to… 

2. Xi’s anti-corruption drive 

Xi first launched his austerity guidelines back in 2013, and that timing is significant for reasons beyond the fact he’d just taken power:

• Eg, it was shortly after Bloomberg and The New York Times published spicy exposés about the extended family wealth surrounding Xi and other top cadres.

So he had political incentives to push back not only on that personal image problem, but also on the party’s broader image problem given the scale of some of the graft emerging (like the railway minister who amassed 19 mistresses and 374 houses).

But now that authorities have jailed more than a million officials on corruption grounds, there’s growing suspicion many are getting swept up in a broader political purge, which leads us to…

3. Party discipline 

Related to the first two reasons, but this renewed austerity drive is probably also another attempt to impose discipline across the party’s 100 million members — a la New York’s broken window theory, focus on the little things (whether a broken window or a four-hour power-lunch), and folks might think twice about pulling any bigger stunts.

It becomes an exercise in authority for the party’s top honchos, without having to do much heavy lifting.

Intrigue’s Take

Years ago, Mexico had a colourful cabinet minister called Salvador Vega Casillas who popularised a ‘toll booth’ theory of corruption, arguing graft thrives wherever the state imposes needless bureaucratic ‘toll booths’ — each ‘booth’ just creates an opportunity for a corrupt official to demand bribes from folks trying to navigate the system.

So he launched a public competition called El Trámite Más Inútil (The Most Useless Procedure), inviting citizens to nominate the worst red-tape for their chance to win a cash prize. The result was stunning — they got 30,000 entries, helping guide their subsequent deregulation and anti-corruption drive (the winner was a single mother who had to jump through monthly bureaucratic hurdles to get medication for her young child).

We mention this example because a) China’s state-heavy economy has its own toll booth problem, but b) it’s also a reminder of the risks ahead as more governments across the West go a little more state-heavy on national security and/or industrial policy grounds, introducing big new toll booths that are making massive, multi-billion dollar decisions.

Sound even smarter:

• Back in 2016, China’s Anhui province banned booze during work events after several officials actually died of alcohol poisoning from state banquets. 

Intrigue presents…

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Join International Intrigue and Pulitzer Prize winner Anne Applebaum for a candid chat on her latest book, ‘Autocracy Inc.’. We will dive into the strategies and tactics of modern autocrats, their interconnected networks for spreading disinformation, and the global fight for democracies to push back against this tide.

Register now! (oh, and don’t miss our chat with Fareed Zakaria on May 28!)

Meanwhile, elsewhere…

Extra Intrigue

The Intrigue jobs board 💼

• Social secretary to the ambassador @ German embassy in DC

• NATO internship programme @ NATO in Brussels

• Industry affairs @ International Air Transport Association in Sydney

• Producer @ Reuters in Mexico City

Meme of the day

She started out as an FSO in the MFA and eventually made DCM, but got put on DCL after a TDY at UNGA where her COM forgot to clear a TPN through EAD before NPT.

Translation: She started out as a diplomat in the foreign ministry and eventually made deputy ambassador, but then got put on stress leave after a short-term assignment at UN leaders week because her ambassador forgot to clear a diplomatic note through the foreign ministry’s East Asia Division ahead of the non-proliferation treaty summit.

Translation of the translation: She was having a dream run until her boss messed up and threw her under the bus.

Today’s poll

Yesterday’s poll: Do you think the US should ease chip rules on China?

💽 Yes, restrictions will just end up harming the US (53%)
🙅 No, they're rivals (45%)
✍️ Other (write in!) (2%)

Your two cents:

• 💽 K.K: “Necessity is the mother of invention. No necessity, no invention!”

• 🙅 M.A: “The idea that restrictions will just make China become self-sufficient forgets that it seeks to become self-sufficient regardless of restrictions, and giving Beijing access will just make it easier to reverse engineer and become autonomous quicker.”

• ✍️ R.C.O: “Tough question, but probably ease the sale of chips while keeping the limits on chip manufacturing equipment and software. China will get chips one way or another, but getting ASML gear for 2nm nodes is much tougher.”