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THIS WEEK:

Economic measures underwhelm markets, former justice minister expelled and indicted, hard times for China's film industry, China criticizes Lai’s National Day address, and National Day Golden Week travel boom.

1. NDRC Press Conference Underwhelms Markets

What Happened: The National Development and Reform Commission (NDRC) held a press conference on October 8 to expand on the central bank’s surprise stimulus announcement and the Politburo’s economy-focused meeting at the end of September.

Stable Strategy: NDRC chairman Zheng Shanjie expressed confidence in “achieving the year’s economic and social development goals” and pledged to accelerate spending, increase investments, and provide direct support for low-income groups. The NDRC announced plans to issue ultra-long sovereign bonds next year to fund major projects while also reallocating 100 billion yuan ($14 billion) of investment originally earmarked for 2025 into the current year, alongside an additional 100 billion yuan for strategic areas in 2024.

Market Reaction: Initial market enthusiasm was tempered. No new large-scale fiscal stimulus measures were unveiled, causing onshore stock indices to lose momentum: the CSI 300 Index surged nearly 11% at open but closed with only a 5.9% gain, while Hong Kong’s Hang Seng Index (HSI) plunged 9.4% in its worst decline since 2008. On Wednesday, the CSI 300 and the HSI tumbled an additional 7.1% and 1.4%, respectively.

Why It Matters: The NDRC’s focus on gradual and systematic policy implementation rather than aggressive stimulus suggests a cautious approach to economic recovery, and some investors remain uncertain about the pace of future fiscal support. Still, the measures announced in September retain momentum — the Ministry of Finance has scheduled a press conference for Saturday to detail Beijing’s fiscal policies. Large-scale fiscal measures, such as government bond issuances, require authorization from the National People’s Congress, whose Standing Committee does not meet until late October.

By Jennifer Choo, Director of Research and Strategy, Center for China Analysis

Learn More: Check out Decoding China’s Economic Slowdown, a joint report by CCA and the Stanford Center on China’s Economy and Institutions.

2. Former Justice Minister Expelled and Indicted

What Happened: On October 7, former justice minister Tang Yijun was expelled from the Chinese Communist Party (CCP) and is currently facing criminal charges for alleged corruption.

Bad Influence: Among other charges, Tang has been indicted for influencing both market and judicial activities, which are listed as crimes under Articles 141 and 142, respectively, of the recently revised “CCP Disciplinary Action Regulations.” Tang has also been accused of violating the CCP’s “political discipline,” which includes actions such as opposing the Central Committee’s major policies, accessing illegal political publications, and forming factions within the Party.

Violating Political Discipline: Tang served as justice minister from 2020 to 2023, replacing Fu Zhenghua, who had been sentenced to life imprisonment for “serious violations of discipline and laws.” Notably, Tang worked under Xi as the secretary general of the Zhejiang Provincial Discipline Inspection Commission from 2002 to 2005, when Xi was the Zhejiang Party secretary.

Why It Matters: Despite the CCP’s absolute authority over both the market economy and judicial system, it is becoming increasingly risky for even senior Party members to exercise power in either area without Xi’s approval, reinforcing the paramount leader’s far-reaching control.

By Lobsang Tsering, Senior Research Associate, Center for China Analysis

Learn More: CCA’s interactive website, Decoding Chinese Politics, was recently updated with three new sections, one of which investigates the “Party Center.”

3. Hard Times for China's Film Industry

What Happened: Box office receipts at China’s cinemas disappointed over the long National Day weekend, falling slightly compared to the previous year.

Box Office: With moviegoers unwilling to spend due to economic uncertainty, theaters increasingly rely on a surge in attendance during holidays. After falling precipitously during the COVID-19 pandemic, ticket sales almost doubled during 2023, though they remained below their 2018–19 totals. So far in 2024, receipts are down more than 20% year-on-year. Limits on the number of foreign films that can be screened have kept most recent Hollywood blockbusters out of Chinese theaters.

Propaganda and War: Weak attendance is compounding the difficulties facing China’s film business, which has faced stricter oversight and censorship under Xi Jinping. The weekend’s top draw was Chen Kaige’s The Volunteers: The Battle of Life and Death. Set during the “War to Resist U.S. Aggression and Aid Korea” (the Korean War), the film features intense Saving Private Ryan–style battle scenes.

Why It Matters: The vibrant and diverse cinema scene that emerged during the first decades of the reform era produced winners of overseas awards and a thriving independent film culture. Under the weight of economic and political pressures, however, more filmmakers have turned to patriotic spectacles in hopes of satisfying both the censors and domestic audiences.

By G.A. Donovan, Fellow on Chinese Society and Political Economy, Center for China Analysis

Learn More: ChinaFile will screen Nikah and host a discussion with the film’s director, Uyghur artist and ethnomusicologist Mukaddas Mijit, on October 28 in New York. 

4. China Criticizes Lai’s National Day Address

What Happened: On Thursday, China issued a harsh response to Taiwanese president Lai Ching-te’s National Day address.

The Background: Every year, the Taiwanese president gives a major address on October 10 to commemorate Taiwan’s National Day. Beijing had already shown displeasure with President Lai’s May 20 inaugural address, when he included language that China interpreted as pushing for Taiwanese independence. Lai’s National Day address gives Beijing further cause for concern over his “independence agenda.”

Call and Response: In his address, Lai said he would “uphold the commitment to resist annexation or encroachment upon our sovereignty” and added that “the People’s Republic of China has no right to represent Taiwan.” A spokeswoman for China’s Ministry of Foreign Affairs said the speech “exposed his intransigent position” on Taiwan independence. Chen Binhua, the spokesman for the Taiwan Affairs Office of the State Council, criticized Lai for “fabricating the fallacy of ‘Taiwan independence,’” which will only “incite hostile confrontation between the two sides of the strait.”

Why It Matters: Cross-strait relations are entering a new and destabilizing period. With a new Democratic Progressive Party leader in power who Beijing believes is rejecting Chinese unification, China’s military will likely conduct military drills as a warning to not cross Beijing’s red line of formally declaring independence.

By Lyle Morris, Senior Fellow on Foreign Policy and National Security, Center for China Analysis

Learn More: Explore the Taiwan Policy Database to understand the complexity of cross-strait history from the perspectives of China, Taiwan, and the United States. 

5. National Day Golden Week Travel Boom

What Happened: From September 29 to October 8, China celebrated its National Day Golden Week. 

Travel Surge: During the ten-day period, mainland China recorded 765 million domestic trips, a year-on-year increase of 5.9% and up 10.2% from 2019; China’s railway network saw more than 18.52 million trips, up 8.6% from 2023 and 26.6% from 2019; and domestic tourists spent 700 billion yuan ($99 billion), a year-on-year increase of 6.3% and up 7.9% from 2019. 

Shanxi Shines: The success of China’s first AAA video game, Black Myth: Wukong, created a surge in visits to Shanxi Province, where 27 of 36 of the game’s historical sites are located, throughout the holiday. Yingxian Wooden Pagoda Scenic Area, for instance, received 191,813 tourists during the first five days of the week, an annual increase of 128.7%.

Why It Matters: National Day Golden Week holds significant meaning and carries with it a rich celebration of Chinese heritage, which is reflected in the noticeable uptick in tourism to places of historical and cultural significance. Furthermore, growth in spending may indicate increasing consumer confidence that could positively impact the Chinese economy. 

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis
 
Learn More: Related to the increase in tourism following the pandemic, Senior Fellow Lynette Ong and an expert panel discussed the economic and societal issues affecting post-COVID China.