Dear Human Readers,

It’s been an eventful few months in China’s policy landscape, perhaps culminated by the dramatic removal of former leader Hu Jintao from the 20th Party Congress, where current leader Xi Jinping completely dominated the show. But our machine learning algorithm is here to make a contrarian claim: Despite those developments, there has been no signs of policy shifts in Beijing over the past year or in the immediate aftermath of the Party Congress.

PCI-China

Meet the “new era,” same as the old era. The third quarter of 2022 marks a year since we have been reporting no signs of major changes in China’s policy landscape. The chart below shows the PCI-China series up to the end of September, now nearing its all-time low. While Xi dressed up the Party Congress agenda with his signature slogan of “new era socialism,” the trend remains essentially the same as the first decade of his rule.

Figure 1. PCI-China, 1951 Q1 to 2022 Q3

Note: The PCI-China predicts if and when the Chinese government will change its policy priorities. A spike in the indicator signals a policy change, while a vertical bar marks the occurrence of a policy change labeled by the event.

“Liconomics” is behind us. The “no change” result is consistent with recent passing speculations that turned out too optimistic about China’s changes for the better. Some speculated that Premier Li Keqiang—by law the country’s second most powerful politician but in reality overshadowed by Xi—was making a comeback. We had picked up no signs for that, and Li did not stand a chance either.

What about “Zero Covid”? The latest theories have it that Beijing is eyeing an exit ramp from “Zero Covid” because of its high costs, and financial markets seem to to agree. The National Health Commission announced a limited easing of Covid measures today, particularly including making travels to China easier. But in the meantime, large-scale lockdowns in megacities like Guangzhou and Chongqing are still being implemented. The fact that China’s propaganda apparatus has shown no change in "Zero Covid" talks should give optimists a pause.

Taiwan

China’s ambitions on Taiwan. China’s desire to overtake Taiwan is no secret. Policymakers in Beijing, Taipei and Washington have surely also gamed out various scenarios behind closed doors. But public information on how a Chinese invasion would unfold and how the island state might be vulnerable has been scant. In a recent policy brief, Weifeng Zhong and his Mercatus colleague Christine McDaniel use open-source intelligence, the same philosophy that guides the PCI projects, to address exactly that.

Using data gleaned from a malicious but unsecured Chinese website and provided to them by the New Kite Data Labs, the authors were able to examine nearly 300,000 “points of interest” (POIs) in Taiwan, all with latitudes, longitudes, that were curated by the Chinese entity. These POIs include military facilities, government offices, transportation facilities, and locations related to information and communication technology, including submarine cable landing stations where undersea data cables facilitating the global internet come to shore. Their findings, shown in the figures below, shed light on the kind of military planning Beijing might have for a Taiwan invasion. Check out their report for more details.

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PCI Resources

The open-source PCI projects are meant to crack a window to otherwise opaque political systems like China’s, so everyone can look inside—for free. You can find out more about our projects on the PCI website. Don’t hesitate to reach out!

Edited by Weifeng Zhong and Julian TszKin Chan.

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