Mixed economic messages + eased data export rules + Wang Yi in Down Under

This issue of MERICS China Essentials looks at the latest mixed signals from Beijing. New measures to attract foreign investment, the annual #China Development Forum and an exchange between Xi Jinping and US CEOs offer some sense of stability.

However, due to China’s slowdown and political developments, Jacob Gunter , Lead Analyst at MERICS, sees a need for deeper reforms to make a real difference: “China’s red carpet isn’t achieving the results it used to, largely because foreign investors can see where it will take them – to an economy in downturn and a political elite unwilling or unable to correct the course.”

There is some movement that could indicate a limited course correction – albeit in a political context that remains highly focused on security. The easing of China’s strict data-export rules is welcome news for the foreign business community, but “smooth implementation of the new rules is not a given," says MERICS Lead Analyst Rebecca Arcesati .

Foreign minister Wang Yi’s visit to Australia and New Zealand – the first in eight years – showed mixed results. Economic ties are being rebuilt since China started removing bans on Australian products, but security tensions in the region remain high. “The measure of success in the current phase of reengagement with China is maintaining constructive relations and damage control rather than resolving fundamental differences,” says Grzegorz Stec, Head of MERICS’ Brussels Office.

In Hong Kong, the direction seems clearer: the Legislative Council unanimously enacted tough national security legislation, further expanding government powers. Meanwhile, an alleged murder involving rural children whose parents were away working in cities sparked public debates in China about the social conditions of urban migrant workers. “The government’s current policies are not sufficient to tackle rural-urban inequalities and the social problems that come with them,” says Christina Sadeler, Senior Analyst at MERICS.

You can read the whole issue here.