Tuesday, February 27, 2018

China Revitalizing Its Food Exports

China's agricultural exports plateaued in recent years due to rising costs that eroded competitiveness, a poor reputation for quality, and a more favorable market at home. Authorities are now trying to revitalize exports by upgrading quality, using integrated industrial management models, and creating new markets through the One Belt One Road initiative.

The "Central Document No. 1" on rural policy priorities for 2018 called for China to build a new externally open pattern for agriculture. At a February 8 press conference Minister of Commerce Gao Feng asserted that the new pattern of externally open agriculture is essential for "rural revitalization" and the overarching objective of making China a strong country in international trade.

Specific strategies include promoting trade with countries and regions along "One Belt One Road" routes and promoting exports of high value-added and specialty Chinese agricultural products.

An October 2017 article by China's Industry Information Network proclaimed that the Belt and Road initiative is giving China's agricultural exports new vitality by diversifying markets. The article cited free trade agreements with South Korea and Australia and strong growth in exports to Canada, Mexico, India, Pakistan, South Africa, Saudi Arabia, and Turkey as signs of revived confidence for China's agricultural exporting enterprises. Favorable policies and the Belt and Road initiative lay a "good foundation for exports to Northeast Asia, Central Asia, and the Middle East," the article stated.

The favorable policies included a restoration of 13-percent VAT refunds for exports of corn starch, distillers grains, and other corn-based industrial products as of September 2017. Inspection and testing fees are waived for food exporters, a benefit said to be worth 11 billion yuan to exporters.

Developing business models that integrate production, processing and marketing under a single company's control are said to strengthen export competitiveness. Another strategy is delineation of regional industry belts, including a tea belt in Sichuan, vegetable processing and crabs in Zhejiang Province, and flower and medicinal herb districts in Yunnan Province. Constructing foreign trade bases will support future agricultural exports, the article explained. 

The article also claimed China had won victories in dismantling technical barriers to Chinese products in other countries, including Indonesia's abandonment of safeguards on imported glucose and successful challenges of an EU anti-dumping investigation of concentrated soy protein products and tariff rate quotas on duck meat imports. The article says USDA's favorable assessment of China's food safety system for processed chicken brightens the prospects for Chinese chicken to reach America in the future.

The Ministry of Agriculture reported that agricultural exports totaled $75.5 billion during 2017, up 3.5 percent from the previous year.

Another China Industry Information Network article from December describes efforts to upgrade remote border crossings in western China to promote exports of vegetables and fruits to dinner tables in Central Asia and Russia. "Green channel" to expedite shipments of perishable products have promoted rapid double-digit growth in exports of tea, sunflower seeds, fresh garlic and fresh apples at the Irkeshtam crossing into Kyrgyzstan. Licorice, leather, and dried fruit have come into China. In November a refrigerated truck carrying tangerines and apples from Xinjiang's Tacheng City crossed the border at Qoqek and delivered the products to Askana and Almaty in Kazakstan, to Moscow, St. Petersburg and Chelyabinsk in Russia, and to other countries in Europe.

According to Urumqi District customs statistics, during January-October 2017 Xinjiang exported 320,000 mt of ag products (up 13.8%) valued at RMB 2.72 billion (up 20%). Freight at the Qoqek crossing point totaled 50,000 metric tons in 2013, and was up to 102,000 mt in 2017. Agricultural product exports include citrus, fresh peaches, apples, grapes, tomatoes, peppers, and garlic.

China 2017 Ag Imports: Sucking Sound and Squealing Brakes

If you couldn't hear the great sucking sound of China hoovering up agricultural commodities, it may have been because it was drowned out by the chugging of industrial exports. Or maybe your ears were hurting from the squeal of brakes applied to particular farm commodities targeted for antidumping or safeguards.

China's imports of agricultural products were valued at $125.9 billion during 2017, up 12.8 percent from the previous year, according to data reported by the Ministry of Agriculture. Agricultural exports totaled $75.5 billion and rose 3.5 percent.

According to the Ministry of Commerce, agricultural imports represented 6.8 percent of the value of all Chinese imports in 2017, while agricultural exports accounted for 3.3 percent of all exports. The brief Commerce Ministry report emphasized that the $49.5-billion deficit in agricultural exports grew 30 percent from the previous year. It did not mention that the deficit in agricultural trade is relatively modest in comparison with China's overall trade surplus of $422.5 billion.

Nor did the MofCom report on ag trade mention numbers in another MofCom report which showed the overall trade surplus (in Chinese yuan) grew 14.2 percent. While Chinese officials will sound alarms about the 12.8-percent increase in agricultural imports, this was a slower rate of growth than the 15.9-percent growth in all imports (in dollars).

Oilseeds ($43 billion) accounted for about a third of the value of China's agricultural imports during 2017. Oilseed import value was up 16.2 percent. Imports of edible oils totaled an additional $5.7 billion, and rose 12.5 percent. Imports of cereal grains totaled $6.5 billion, and rose 13.7 percent. China spends more on importing fruit than it does on importing cereal grains (see below).

Cotton imports totaled $2.36 billion and rose by 32.7 percent, the fastest rate of growth of the major categories (mostly due to higher prices).

Livestock products are the second-largest agricultural import category, with $25.6 billion, up 9.5 percent during 2017. China's leading agricultural export ($21.2 billion) was fish and shellfish, but it also is an importer ($11.35 billion) of aquatic products. Exports of vegetables totaled $15.5 billion. Exports of fruit totaled $7.1 billion. However, China also imported $7.6 billion of tropical and southern hemisphere fruits.

China 2017 value of agricultural imports and exports
Item
Imports ($bil)
Growth (%)
Exports ($bil)
Growth (%)
Agricultural products
125.86
12.8
75.53
3.5
Grains
6.49
13.7
0.8
57.8
Cotton
2.36
32.7
na
Sugar
1.08
-7.9
na
Oilseeds
43.02
16.2
1.64
15.2
Edible oils
5.68
12.5
0.24
49.5
Vegetables
0.55
4.3
15.52
5.4
Fruit
6.26
7.6
7.08
-0.9
Livestock products
25.62
9.5
6.36
12.7
Aquatic products
11.35
21
21.15
2

China's agricultural import volume rose at a robust pace overall, but imports of a few items declined sharply due to Chinese policies.

Cereal grain imports totaled 25.6 million metric tons (mmt), up 16.4 percent. Barley imports were up 77.1 percent, wheat imports were up 29.6 percent, and rice imports were up 13 percent during 2017.

However, imports of corn, DDGS, and sorghum were all down sharply. Each of these is a substitute for corn -- disposal of huge government corn stocks was a priority for Chinese rural policy during 2017. DDGS imports -- hit by anti-dumping and anti-subsidy duties in 2017 -- were down 87 percent. Similar duties are expected to hit U.S. sorghum in 2018.

Despite the efforts to choke off these imports, combined imports of corn and substitutes (barley, sorghum, DDGS, cassava) totaled 25.3 mmt during 2017, almost the same as the 25.6 mmt total reported for 2016.

China has prioritized a similar stock disposal program for rice in 2018. The disposal of rice stocks began during 2017 with rice exports surging from under 400,000 mt in 2016 to 1.2 mmt during 2017.

A surplus stock disposal effort for cotton has been underway for three years. Cotton import volume during 2017 was 1.36 mmt, up 9.9 percent from 2016 when cotton imports were in lockdown mode. During 2016 cotton imports were held to the quota set in China's WTO accession commitments in 2001 when the textile industry was a fraction of its current size. Cotton imports bounced back a little during 2017 but are still lower than any year from 2004 to 2015. Yarn imports -- a substitute for cotton -- were stable in 2017.

The volume of imported sugar (2.29 mmt) was down 25 percent after the out-of-quota tariff was boosted from 50 percent to 95 percent and a special safeguards investigation was launched during 2017...and the government is trying to dispose of excessive stockpiles.

While Chinese officials obsess over grains, the country's voracious appetite for grease is reflected by 95-mmt of soybean imports for the calendar year (up 13.8 percent), plus rapeseed imports of 4.75 mmt (up 33 percent), palm oil imports of 5.1 mmt (up 13.4 percent), rapeseed oil imports of 757,000 mt (up 8.2 percent), and soybean oil imports (up 16.6 percent). Sunflower oil imports of 745,000 mt were the only item in this category whose import volume fell (down 22.1 percent).

China's imports of pork (1.2 mmt) and pork offal (1.28 mmt) were both down in 2017 as domestic prices plunged from record highs reached in 2016 and a bevy of domestic pig-supply companies expanded aggressively to grab market share after the departure of backyard farmers. Imports of beef, mutton, and milk powder were each up in double digits. The opening of China's market to U.S. beef last year was not a factor in these numbers. Nearly all the imported beef was supplied by Brazil, Uruguay, Australia, and Argentina while the United States remained a tiny supplier.

China 2017 volume of agricultural imports
Item Imports (1000 mt) Change (%)
Cereal grains 25,601 16.4
Wheat 4,422 29.6
Corn 2,827 -10.7
Rice 4,026 13.0
Barley 8,863 77.1
Sorghum 5,057 -23.9
DDGS 391 -87.3
Cassava 8,128 5.5
Cotton 1,363 9.9
Yarn 983 0.8
Sugar 2,290 -25.2
Soybeans 95,526 13.8
Rapeseed 4,748 33.2
Palm oil 5,079 13.4
Rapeseed oil 757 8.2
Sunflower oil 745 -22.1
Soybean oil 653 16.6
Pork 1,217 -24.9
Pork offal 1,282 -14.1
Beef 695 19.9
Mutton 249 13.1
Milk powder 1,040 22.9

Monday, February 19, 2018

Russian Soybeans Pressure China Market

China imported a record 515,000 metric tons of soybeans from Russia during calendar year 2017, according to customs officials. This new source of soybeans -- while still a tiny share of China's overall soybean market  -- may be a bigger problem for domestic Chinese soybean farmers than huge imports from North and South America.

The Russian soybeans are mostly grown by Chinese farmers who lease farmland in Russia's Far East. The farmers are mainly from Heilongjiang Province, China's far northeastern province which borders Russia. Heilongjiang is China's top soybean-producing province, accounting for about a third of China's production.

The Russian Far East is one of the earliest and largest targets for Chinese investment in foreign farms. Chinese farmers are attracted by low land rents in Russia that are a fraction of what they pay on the Chinese side of the border. Heilongjiang Provincial officials and a number of local governments have been supporting Chinese farming efforts in Russia for nearly 15 years, making deals with Russian counterparts and giving various subsidies. However, Chinese farmers returned little of what they produced in Russia to the Chinese market until recently.

In the last few years, China's central government has prioritized agricultural trade with Russia as part of its "One Belt One Road" initiative. China built its first foreign agricultural industry park in Russia and upgraded inspection and quarantine services at border crossings to facilitate the return of crops grown in Russia to the Chinese market. The report on soybean imports emphasized that Heilongjiang is the leading province for cooperation with Russia and declared the "expansion of non-GMO soybean supply" to be a "remarkable result" of the inspection and quarantine bureau's efforts to lower the threshold for farmers to return their Russia-grown grains to the Chinese market. The inspection and quarantine service formulated a risk assessment system for Russian crop imports to control disease risk, ensure soybeans are non-GMO, and established a traceability system.

In addition to the soybeans, customs authorities also reported imports of 11,764 metric tons of soybean oil from Russia during 2017 arriving at Heihe City, the most active border crossing on the Amur River. The report praised the surge of Russian flour, soybean oil and other foods as "natural" and "unpolluted."

Heilongjiang farmers have been complaining that the Russia soybeans are depressing prices in the China market. A November 2015 report blamed the surge of Russian soybeans for the depressed market, noting that the Russian beans were comparable in quality to Heilongjiang soybeans but substantially cheaper. That report estimated the flow of soybeans from Russia to 1 million metric tons--nearly three times the amount reported by customs statistics that year. The price of soybeans after arriving from Russia was reported to be 3600-3700 yuan/metric ton, well below the 4100 yuan/metric ton price of local Chinese soybeans.

The 2015 report said Russia bans production of GMO soybeans and pesticides, so the beans grown there are positioned as a non-GMO or even organic product that competes directly with Chinese non-GMO soybeans. The Russian beans were said to be low in protein and have high contamination with foreign matter, but Chinese soybeans also had quality problems that year. The reporter said the bottom line was that Russia-grown and Chinese soybeans are comparable in quality but the Russian beans are cheaper. The reporter blamed pressure from Russian beans for preventing Chinese prices from rising.

Customs statistics indicate that the Russian soybeans have prices that are 1000 yuan or more less per ton than Chinese beans -- even after adding the tariff and value added tax (see chart). Also in 2015, a weibo poster found that customs data showed Russian beans cost 1930 yuan/mt compared to 3550 yuan for imported "GMO" beans, and he asked, "Are Russian soybeans really that cheap?"

Note: imported Russian price calculated from customs statistics plus 3% tariff and 13% VAT (11% July-Dec 2017). Imported (coastal) is price in Qingdao, also including taxes. 

The post revealed that Heilongjiang customs officials were also alarmed about this issue and "held many meetings" to learn what "the real price of Russian soybeans" was. The Russian soybeans were imported largely by farmers that grew them, so they were in effect selling the beans to themselves and could name their own price. Of course, their incentive was to report a low price to minimize the tariff and value-added tax they had to pay. The weibo author found that Russian soybeans offered on e-commerce web sites quoted prices much higher than those reported in customs data, so he concluded the customs prices were artificially low. Nevertheless, the prices quoted for Russian beans were still much lower than the price for similar Chinese beans.

A crop inspection tour in northern Heilongjiang last summer concluded that Russian soybeans continue to influence the Chinese market. A seed company sold 100 metric tons of soybean seeds to Russia last year. The manager of a processing plant cited the non-GMO, pesticide-free, and -- in his assessment -- high protein as advantages of the Russia-grown beans. He also estimated the volume of imports from Russia to exceed what is reported by customs data. The processing plant manager estimated the production cost of Russia-sourced soybeans at 2300-2400 yuan and the price in China at 3900 yuan/metric ton -- big profits. He was pessimistic about the market for Chinese soybeans, but saw bright prospects for Russian soybeans in China.

Over the years, China's soybean market has become segmented into largely separate markets for imported and domestic soybeans, but imported soybeans from Russia  break that pattern by competing directly with Chinese soybeans. The main Chinese soybean producing areas are insulated from imports by distance and a non-GMO wall the industry has worked hard to raise over the last 15 years to differentiate domestic from imported soybeans. Soybeans imported from North and South America arrive at crushing plants at coastal ports. The closest one is  more than 500 miles from Heilongjiang, and the most active ports for imported soybeans in Shandong and Jiangsu Provinces are over 1000 miles away.

Russian soybeans, meanwhile, arrive on the doorstep of domestic soybean producers in Heilongjiang Province. The non-GMO wall does not protect Chinese soybeans from Russian beans since the Russian soy is purportedly also non-GMO and even organic. Thus, China's "going out" strategy has created a new source of soybeans that competes head to head with domestic soybeans without any of the insulation factors built up against soybeans from the Americas.

Is Dr. Frankenstein advising China? Or, as the weibo poster cited above asked sarcastically, "Has the Chinese Government become an agent of Monsanto?"

Sunday, February 18, 2018

China Mulls Soybean Trade Retaliation

Chinese officials have been mulling retaliatory trade action against imports of U.S. soybeans. While soybeans loom as a big target in a trade war, such an action would cripple dozens of Chinese importers and undermine the country's new "open economy" strategy in agriculture.

One commentary on the Chinese Internet this week called soybeans "potentially China's strongest weapon" as trade friction with the United States heats up. The commentator suggested that a measure limiting soybean imports could cause President Trump to lose the 2020 election by hitting farmers in the U.S. Midwest. Yet the commentator also noted that limiting the soybean supply could lead to higher pork prices in China since soybean meal is an important component of pig feed.

China's Commerce Minister Gao Feng struck a conciliatory tone in comments at a February 8 news conference which was largely about trade friction with the United States. Minister Gao said the Ministry had met with industry associations to explore possible impacts of trade measures against imports of U.S. agricultural commodities (soybeans and cotton were mentioned specifically by the journalist who asked the question). Gao's main comment was that some "production-type" enterprises had raised concerns about the effects of limiting imports. [erratum: another article discovered later suggests that the companies were worried about the effects of imports.] The Minister then emphasized the importance of resolving trade difficulties to achieve mutually beneficial outcomes and to turn friction into energy. Minister Gao made similar conciliatory comments about beneficial trade and cooperation in the Ministry's earlier announcement of the antidumping investigation of U.S. sorghum imports.

A trade action against soybeans -- the biggest component of international trade in farm products -- would undermine China's efforts to craft its image as a proponent of global trade. In his response to a separate question, Minister Gao emphasized that a "new pattern of externally open agriculture" is central to China's rural revitalization strategy featured in the "Number one document" issued by communist party leaders this month. According to Gao, the strategy for China's rural makeover features greater engagement with global markets in which Chinese companies have greater control over a swelling flow of agricultural imports, Chinese farmers link up with commercial entities to export high quality farm goods demanded by the market, and China gains a stronger voice in multilateral organizations that set the rules for international trade.

Bolstering China's image as a proponent of global trade is a long-term strategy critical to the "One Belt One Road" initiative as well as to broader geopolitical objectives. Officials may hesitate to undermine their long-term image-building project in order to score points against Americans in a tit-for-tat trade skirmish.

A February 5 commentary noted that China has major domestic commercial interests that rely on soybean imports. The commentator observed that China's soybean industry has demanded action to limit soybean imports on several occasions over the past 15 years, but authorities have never imposed any major measures. This commentary pointed the inconsistency of launching antidumping investigations against imports of U.S. DDGS and sorghum, yet never conducting an investigation against imports of soybeans even though China's soybean industry is purportedly under the greatest pressure from imports.

According to the commentator, China's soybean industry called for an action in 2004 after a sudden drop in U.S. soybean prices devastated Chinese importers holding contracts to import at high prices (the so-called "soybean crisis"). In the commentator's opinion, China "lost the perfect opportunity" because there was little knowledge of how to launch trade remedy measures and many in the Chinese industry were willing to be rescued by being acquired by foreign companies.

The commentator recalled that a trade action against soybeans had been proposed in 2009 to retaliate against punitive U.S. tariffs on Chinese tires. However, powerful companies "inextricably tied" to soybean imports opposed the move, the commentator said. Instead, he pointed out that China chose to launch an antidumping action against imported U.S. chicken meat -- a much smaller trade item than soybeans.

According to the commentator, some individuals opposed to last year's antidumping tariffs on U.S. DDGS argued that antidumping duties could not be justified for DDGS if they were never imposed on soybeans.

In fact, the DDGS and sorghum antidumping trade actions were taken largely to facilitate China's own commodity dump: selling off China's massive corn reserves into its domestic market at prices below the government's acquisition cost. Imported DDGS and sorghum are substitutes for corn, and an article in the China Times reported that targeting DDGS and sorghum for punitive duties makes it easier to sell off the government's corn stocks by reducing the supply of cheap substitutes. China Times linked the sorghum antidumping investigation to the directive in this year's "Number one document" to accelerate the disposal of government grain inventories by improving auction and sale mechanisms.

None of the commentaries delve into the facts that make a punitive tariff against U.S. soybeans improbable. Here are a few additional considerations.

China's capacity to shift soybean purchases to other suppliers is limited. China imports two-thirds of the soybeans traded in the world, and about 35-40% come from the United States. Brazil already has been increasing its exports to China at a frantic pace for several years. Soybeans from southern hemisphere countries -- the main alternate suppliers -- are available mainly during April-September, and cannot substitute for U.S. soybeans imported by China during the northern hemisphere shipping season of October-April.

Punitive tariffs on soybean imports would hurt Chinese importers as much or more as it would hurt American farmers. Most soybeans are imported by hundreds of Chinese companies -- both state-owned and private. Multinationals--who were banned from further expansion ten years ago--no longer dominate the industry. Aggressive investment by Chinese players over the last decade has made domestic companies the primary operators of China's soybean crushing plants which are already plagued by excess capacity and razor-thin margins.

China's own soybean producers would benefit minimally from limits on U.S. imports. China's entire soybean harvest equals roughly two months of imports. Most of China's soybeans are now used for food processing industries at premium prices and do not compete directly with imported soybeans used for crushing to make vegetable oil and soybean meal for animal feed. Chinese farmers in the northeast expanded soybean production this year, but had difficulty selling the additional beans and the government had step in to buy them.

Chinese companies could import soybean oil and meal to some degree instead of importing soybeans. (precedent: when China tightened cotton import quotas several years ago, the textile industry started importing yarn which is not subject to a quota.) Imports of substitute oils like palm, rapeseed, sesame, olive oil would rise.

Smuggling and paperwork subterfuge would skyrocket. Customs officials would have to do extensive checking of paperwork and testing of shipments to verify the stated origin. Customs officials would have to be watched closely by anti-corruption investigators.

Chinese officials may recall stampedes at a supermarket by shoppers eager to get discounted cooking oil when soybean prices were in the stratosphere ten years ago.

The lack of protein in animal feed was a bottleneck for China's livestock sector until China started importing soybeans in the 1990s. Soybean meal now provides most of the protein in animal feed. The two biggest consumers of soybean meal -- pigs and chickens -- are in vigorous expansions this year. Watch for fake and adulterated soybean meal and disease outbreaks among poorly nourished livestock and poultry if soybean supplies shrink.

Monday, February 5, 2018

No. 1 Document Sets Rural Revitalization Program

A deep and broad "rural revitalization" program is the focus of the Chinese communist party's "Number one document" on rural policies for 2018. Chinese leaders describe rural revitalization as a key historic development that will mark China's new century of prosperity and strength in contrast to the previous century of weakness and exploitation by foreign powers.

The ambitious and idealistic program is purportedly inspired by the thinking of "core" leader comrade Xi Jinping. The program is aimed at finally "winning" the long-sought "relatively well-off society." There will be balance between countryside and city development, people will enjoy a good life, poverty will be eliminated by hooking up poor regions with thriving industry, the countryside will be beautiful, there will be harmony between humans and their natural environment, Chinese industries will produce quality products, Chinese products will be internationally competitive, R&D will drive development, yet traditional Chinese culture will be preserved and propagated. All of this is to be orchestrated by the communist party.

A TV graphic laid out objectives for rural vitalization for 2020, 2035, and 2050.

The 16,400-character rural revitalization program laid out in the Number one document is deep and wide. The program's mantras include "institutional innovation", "transformation," "upgrade," "quality" and "green." The program is unabashedly socialist yet industrial development is at the core of the strategy. Agriculture will be overhauled by nurturing new types of agricultural business operators, including family farms, cooperatives, and "dragon head" agribusinesses. The document calls for linking up farms with processing, input, and tertiary industry. The document specifically calls for developing a native dairy industry, singles out the domestic agricultural machinery industry for strengthening, and repeats the exhortation in previous documents to invest in agriculture abroad and to create large Chinese multinational grain-trading and agricultural conglomerates. The fight to eliminate rural poverty relies on setting up thriving industries in poor regions and replacing ramshackle dwellings with new modern housing developments.

Land is to remain collectively owned, but elaborate arrangements are supposed to facilitate consolidation of fragmented plots into internationally-competitive appropriate scale farms. Rural households are to have their land contracts extended for 30 years and receive certificates verifying their land holdings. Then the peasant land-holders can pool their land and turn it over to modern farmers. However, land will be under strict control over its use to ensure national food security. The appropriate scale farms are expected to not only earn profits from low-margin grain crops but also give training, credit, and technical assistance to small-scale rural households.

Bankers will march forward to finance the vast overhaul of rural China. They will make loans secured by abstract temporary production rights to far-flung plots of land. The document acknowledges that the countryside is already riddled with debts for infrastructure, but does not seem to think more debts incurred to level fields, build irrigation ditches, and construct housing developments in impoverished villages will be a problem.

After decades of polluting water, air and soil, and sucking the organic matter and nutrients out of the ground, China is now a proponent of green, sustainable development. According to Chinese leaders, "ecological live-ability is the key to rural revitalization," and "a good ecological environment is the greatest advantage and source of wealth for the countryside."

the rural revitalization program calls for combining thriving industry and a clean environment.

China's rural revitalization also aims to influence the world. There will be a more open trading environment with stronger trade relations with countries and regions along the "one belt one road" path. China hopes to boost exports of high-value specialty agricultural products. China aspires to play a stronger role in making rules that promote global food security and a more fair and equitable international agricultural trading system.

The "Number one document" sets broad goals for progress on rural revitalization. By 2020, there should be major progress in rural revitalization, with the institutional framework and policy system basically in place. By 2035, agriculture and the countryside should be basically modernized, agricultural structure improved, rural people should have better quality employment, basic public services should be equalized between city and countryside, rural civilization should have reached a new degree, and the rural governance system should be much improved. By 2050, rural revitalization should be complete, agriculture strong, the countryside beautiful, and peasants rich.

According to the document, China's communist party will "[raise] high the great flag of socialism with Chinese characteristics with guidance from Xi Jinping’s thought on socialism with Chinese characteristics for a new era, face the difficulties, work hard, forge ahead, to win the all-round well-off society, and make a great contribution to socialism with Chinese characteristics for a new era."