Neican: 30 August 2020

China Neican is a weekly column on the China Story blog written by Yun Jiang and Adam Ni from the China Policy Centre in Canberra. Neican 内参 or “internal reference” are limited circulation reports only for the eyes of high-ranking officials in China, dealing with topics deemed too sensitive for public consumption. But rest assured, everyone is welcome to read what we write. You can find past issues of Neican here.

1. Internal circulation

China is increasingly focusing on “internal circulation” for economic growth. This means expanding domestic demand and pushing for self-sufficiency in supply as well as technology.

On the demand side, there is a renewed focus on expanding domestic consumption. The 2008 global financial crisis illustrated the perils for the Chinese economy when it placed heavy reliance on international demand. The recent COVID-induced recession in many countries has again underscored the importance of domestic demand.

One notable area is food security. We previously wrote about the drive to reduce food wastage. That could be part of the broader attempt by the Chinese Government to reduce demand for food to ensure greater food security. But we’re sceptical of how much difference a consumer-focused food wastage campaign can make without comprehensive innovation in food production, processing and logistics.

On the supply side, “self sufficiency” is not a new word and has indeed never left the party lexicon. But “self sufficiency” or “self reliance” has recently been elevated to a “virtue” in domestic propaganda. Despite past disasters associated with drives towards self-sufficiency (e.g., the Great Leap Forward with regards to steel production), some degree of self sufficiency remains a goal. During the first three decades of the reform period, self-sufficiency was no longer an overriding goal, but it remained an important idea.

On the all important issue of food security. China is striving for self-sufficiency in some commodities, but it recognises that complete self-sufficiency is unrealistic. For example, it imports 90 per cent of its total consumption in soybeans, an important animal feed. It is unlikely that China will suddenly increase soybean production ninefold. This also holds true for energy and mineral imports.

Yet international developments may force China’s hand in some sectors. With the current trend of decoupling, especially in the technology sector, China is no doubt considering policies to ensure it can continue to develop in circumstances where it is “forced” to “decouple” from the US and other parts of the world. It may even drive China to become more self reliant and thereby “decouple” before being forced to do so by others.

Indeed, in the assessment of CSIS’ Jude Blanchette and Andrew Polk: 

Fundamentally, efforts along these lines…should be seen as part of China’s plan to push forward decoupling on its own terms. This further demonstrates that Chinese leaders are clear-eyed that bifurcation is not a question of if, but of when and how fast. [This approach] was born out of a reaction to this diagnosis, and it is meant to posit a proactive strategy for China to shape the parameters of the divorce, not to shy away from it.

In the eyes of Chinese leaders, the world has changed: it has become more uncertain, and the external environment has become more hostile to China. Given these developments, its imperative to turn inward and reinforce China’s domestic economy against external shocks. The days of unbridled optimism over global economic integration and international cooperation is well and truly over.

2. Art and the Party

Chinese science fiction has acquired an international audience in recent years with hits such as The Three-Body Problem and Wandering Earth.

Earlier in the month, China Film Administration (aka Central Propaganda Department Film Bureau) and China Association for Science and Technology jointly issued policy guidance for science fiction films. The document is called 关于促进科幻电影发展的若干意见 Opinions on promoting the development of Science Fiction Films. Beyond strengthening China’s science fiction films industry, it aims to propel China from a “movie power to a movie superpower”.

Illustration from Wandering Earth

Note that in the PRC, party, state and military documents with the word “opinionin their titles are actually “guidances” (commands) that direct actions of subordinate organisations and individuals.

The sci-fi guidance highlights a number of areas for priorities, including improving the innovation of film scripts, government financial and policy support to the industry, and investing in human talent development, especially with respect to the young.

Art, entertainment, literature and other creative endeavours contribute significantly to humanity. Film is one way for China to shape views, either through censorship or through narratives. From movie studios in Hollywood to villages in Africa, China’s expanding cultural weight is increasingly being felt.

It is unlikely that Beijing’s push of ethnonationalist narratives through films will be well received around the world. Take the Wolf Warrior series, for example. It has been celebrated domestically on the back of patriotic sentiment, but internationally it may have increased anxiety in some about China’s global ambitions.

There are also larger questions about the role of art in society. In liberal societies, the pursuit of individual expression through art is something that’s pretty much taken for granted.

Under Xi’s China, however, the Party sees art as a tool for legitimation, propaganda and control. In November 2015, the Central Committee released its strategic guidance on art and literature (in a document entitled 中共中央关于繁荣发展社会主义文艺的意见 Opinions of the Central Committee of the Communist Party of China on the Prosperity and Development of Socialist Literature and Art). The document articulates the goal of art as the rejuvenation of the great Chinese nation. The aim of the art is solely to serve the state (and by extension, the party):



The sacred duty of literary and art workers is to promote the Chinese spirit, spread Chinese values, and build Chinese power.

In the view of the Party, art serves to guide social values (价值引导力), build cultural cohesion (文化凝聚力) and ensure spiritual (non-material) impetus for progress (精神推动力).

Art is then politicised, and becomes instrumental in servicing the party-state’s agenda. This is, of course, nothing new. The fierce debates on the role of art, both within the party and between Chinese intellectuals, in the 1940s and 1950s, is worth revisiting for insights on current policy.

But perhaps what is new is the growing international audiences that are consuming Chinese cultural products, and the unprecedented exposure of Chinese artists to the global economy.

Just like their processors in the 1990s and 2000s, artists, writers and filmmakers in China today must navigate the shifting political landscape and market trends, while living up to their own personal artistic and political aspirations. For the rest of us, it’s high time that we scrutinise the party’s role in influencing art in China and beyond.

3. Subnational relations with China

The Australian Government is seeking power to review all agreements between its subnational governments (states and territories, local councils) or public universities and foreign governments. Under the proposal, all such agreements will need to be disclosed in a public register, and the Foreign Minister will have the power to terminate any agreement.

Australia is a federal country. This means under the Constitution, the Commonwealth has power to make laws with respect to only a specific set of areas. This includes trade and commerce and foreign affairs (section 51). However, this does not preclude states from entering into contracts with foreign governments. And some Australian states even have trade and investment offices overseas. For example, Victoria has 13 offices overseas while New South Wales has 11. As we are not constitutional lawyers, an explainer can be found here. Short summary: the proposal is likely constitutional.

The proposal came about due to Canberra’s concerns over Victoria’s MoU with China on the Belt and Road Initiative, which even earned a rebuke from Washington, despite still not having any projects under it. Whether the state government consulted with Canberra before the signing is also unclear.

However, this will go beyond the BRI MoU, potentially extending to Confucius Institutes agreements at universities, university research agreements with foreign governments (such as US State Department or Department of Defence grants), or local government ‘sister city’ agreements.

There has also been concern that China could exploit the federal system in other countries. It’s certainly not a good look internationally when the Australian Government publicly opposes BRI and then the subnational government signs the MoU. Having the Foreign Minister reviewing all agreements – and ensuring they comply with the federal government’s foreign policy objectives, would certainly ensure more consistency.

On the other hand, such a review mechanism may pose problems for Canberra as well. For example, if an agreement is not terminated, does it mean that Canberra implicitly endorses the agreement? We expect that activists will carefully scrutinise the public register and lobby the federal government to terminate certain agreements.

For universities, this is likely to lead to more intervention from the Commonwealth Government on the direction of research undertaken. This intervention follows on from the introduction of the national interest test for Australian Research Council grants.

We are dubious that a centralised solution imposed from the top will be adequate to address this issue. As Australia National University’s Andrew Carr points out:

Top-down solutions are unlikely to be the answer because of the size, scope and speed of this [subnational] cooperation…Instead, what’s required is far more national discussion about how Australia as a single nation should view the world. Rather than trying for ever tighter control of foreign policy in Canberra, it needs to be accepted that every state and territory, and possibly every major business and non-government organisation in the country, can and will influence how we engage with the world. For better and for worse.

The way to ensure that the right kinds of behaviour occur without direct control is to have a clearer sense of who we are as a nation, what we want from the world, and what values we will and will not accept. Foreign affairs and defence policy can no longer be an elite conversation—because it’s no longer an elite practice. The state of Australia’s foreign policy has changed. Our conversation needs to change with it.

This unfolding debate in Australia may offer some insights for other countries facing similar challenges.


  • Some concrete recommendations for academics who will be teaching China-related content. This includes strategies that academics and universities can adopt to better protect their students from harassment by authorities in China.

This week on China Story:

  • Holly Snape and Weinan Wang, Cracking Open the ‘Party-State’: For a long time in China studies we’ve talked about the ‘Party-state.’ There’s a good reason for that: China has one ruling party, which is so influential that to speak of a ‘state’ but not of the Chinese Communist Party (CCP) seems like an omission of the glaringly obvious. The problem is that conflating the Party and state actually obscures more than it reveals. It causes us to overlook dynamics of, or misinterpret phenomena and trends in, Chinese politics. This is what we argue in a paper published this month in the Journal of Chinese Governance.
  • Jack Neubauer, Hong Kong’s Free Press and the CCP’s Rise to Power: Ever since Beijing’s imposition of a new national security law in Hong Kong earlier this summer, the city’s freedom of press has come under threat. On August 10, Jimmy Lai, founder of the popular newspaper Apple Daily and a prominent critic of the Chinese Communist Party (CCP), was arrested on suspicion of “colluding with foreign forces.” But there is a dark, historical irony to the CCP’s efforts to curtail Hong Kong’s free press, especially through the charge of collusion with foreigners. In an earlier era, the CCP itself used Hong Kong as a haven of press freedom from which to solicit foreign support for its efforts to overthrow China’s Nationalist government. Even if history doesn’t repeat itself, the parallels are striking nevertheless.