The Sinocism China Newsletter 03.31.17

Happy Tomb Sweeping Festival, much of China will be on holiday Sunday-Tuesday.

Just links today:

AnchorTHE ESSENTIAL EIGHT

1. China Reality Check: The Trump-Xi Mar-a-Lago Meeting: Expectations and Implications | Center for Strategic and International Studies Comment: Video of the excellent event with Scott Kennedy, Chris Johnson, Ambassador Stapleton Roy, Kevin Nealer

Related: White House and China trade excuses for stalled confirmation of Trump ambassador pick-Yahoo News The vacancy is hardly a four-alarm diplomatic fire. The United States is represented in Beijing by Deputy Chief of Mission David Rank, a decorated 27-year State Department veteran who has held other challenging posts, including one in Afghanistan. And Secretary of State Rex Tillerson recently visited China, in part to lock in the summit with Xi. The delay is not without precedent, either. In 2009, then-President Barack Obama formally nominated former Utah Gov. Jon Huntsman to be ambassador to Beijing in mid-May, and he did not get there until mid-August.

Related: Gorka: Beijing’s ‘Territorial Expansion’ in South China Sea ‘Cannot be Allowed to Stand’-Breitbart “That is a territorial expansion. That is something that really cannot be allowed to stand. As such, we’re going to work with our partners and with the various individuals who are interested in seeing freedom of movement in the area. China will have to act in ways that comport with freedom of movement on the international waterways,” Gorka declared. // Comment: Gorka is a deputy assistant to President Donald Trump

2. U.S. trade barriers report slams China on overcapacity, tech transfer | Reuters The annual trade barriers list from the U.S. Trade Representative’s (USTR) office sets up more areas of potential irritation for the first face-to-face meeting between President Donald Trump and Chinese President Xi Jinping next week in Florida. // Comment: The full report in PDF

Related: Ross Backs Trump’s China Criticism With ‘Most Protectionist’ Dig – Bloomberg Ross’s comments follow tweets Trump posted Thursday blaming China for U.S. trade deficits and job losses.

Related: Key Barriers to Digital Trade | United States Trade Representative Web Filtering and Blocking in China; Restrictions on Cloud Computing and Data Flows in China:

3. Chinese leadership calls for greater poverty relief effort – Xinhua Members of the bureau heard reports on provincial Party committees and governments’ achievements and evaluation work on poverty relief in 2016 during the meeting, presided over by Xi Jinping, general secretary of the CPC Central Committee. China has set 2020 as the target year to finish building a moderately prosperous society in all aspects, and “the hardest part is to lift poor rural population and counties out of poverty and eradicate poverty on a regional basis,” said a statement issued after the meeting. 中共中央政治局召开会议 听取2016年省级党委和政府脱贫攻坚工作成效考核情况汇报 中共中央总书记习近平主持会_CCTV

Related: Xinhua Insight: Fighting graft in poverty eradication, China catches hands on goats – Xinhua Bao’s case was one of eight publicized this week by the Central Discipline Inspection Commission of the Central Committee (CCDI), the CPC’s top anti-graft organ, when it reviewed corruption in the country’s poverty alleviation campaigns.

4. How Village Mergers Hinder China’s Grassroots Governance | Sixth Tone Shen Duanfeng is a professor of village self-government and rural reconstruction at the School of Marxism at Jiangnan University in Wuxi, Jiangsu.

5. China’s Once and Future Democracy – WSJ Whatever happens in Florida next week, there is no reason to despair of the possibility of a more democratic China, and even of better relations with the U.S., in the decades ahead. Like recessive genes that can skip a generation before expressing themselves again, China’s liberal traits are sure to well up before too long, just as they have so insistently done throughout its modern history. Mr. Schell is the Arthur Ross Director of the Center on U.S.-China Relations at the Asia Society  // Comment: Always good to have hope…

Related: China Jails Tiananmen Protest Veteran For Four Years After Grave Visit-RFA The Wuhou District People’s Court in Sichuan’s capital Chengdu jailed Chen Yunfei after convicting him of “picking quarrels and stirring up trouble,” a charge that is increasingly used to target peaceful dissent and criticism of the ruling Chinese Communist Party.

Related: China Jails Two Guangdong Rights Activists For ‘Subversive’ Online Posts-RFA Su Changlan, who has campaigned for the land rights of local farming communities, including the right of rural women, was jailed for three years after being found guilty of “incitement to subvert state power” by the Foshan Intermediate People’s Court after a more than two years in pretrial detention. Fellow Foshan rights activist Chen Qitang was jailed for four years and six months on the same charge. The court judgement found that Su and Chen had “used the internet and social media to spread rumors and defamation, and repeatedly published or forwarded articles and posts containing attacks on the socialist system.

6. Language Log » Sinological suffering After a wasted morning trying to find the pronunciation and meaning of 㫬, under the heading “Grrrrhhh!”, I wrote to some friends to vent my exasperation.  As usually happens in such cases, they wrote back saying that they had just been through a similar experience (it happens to Sinologists all the time, so the chances of a colleague experiencing the same sort of frustration looking for a character or term on any given day are high).  //  Comment: Think there is a high % of masochists among sinologists

7. China’s New Foreigner Work Permit System Goes National On April 1: Have you Checked Your Employment Contract? | China Law Blog Foreigners will be divided into three categories: A for high level talent, B for professional personnel, and C for foreigners who are nontechnical or service workers hired on a temporary/seasonal basis. Various criteria will be rated and used to generate a score for each foreign applicant, such as salary, educational background, Chinese language fluency, experience, and length of service. The goal is to encourage A level foreigners to come to and work in China, exert control over B level foreigners and restrict/limit the C levels.

8. Why the CIA Is Increasingly Worried About Chinese Moles-Newsweek “A year or two ago, [the CIA] went through a very big mole scare because very high-level [Chinese] sources were getting wrapped up,” a former senior U.S. intelligence analyst tells Newsweek, asking not to be quoted by name on such a sensitive subject…The CIA continues to hire applicants who’ve spent time in China—at least those who’ve withstood a security check that can take two years. But the critics stand by their assertions that the agency’s heightened security sensitivity to applicants with multiple visits to China has also cost it high-quality talent. “If you have that on your background, your résumé is just tossed in the trash, because they are so paranoid about MSS penetration and co-opting students,” a former senior CIA intelligence analyst tells Newsweek on condition of anonymity.

AnchorBUSINESS, ECONOMY AND TRADE

Housing Ministry Says China’s Local Authorities Can Learn From Capital’s Property Controls – Caixin Global Beijing’s housing department, which has imposed what analysts say are the stiffest restrictions in the country, was invited by the Ministry of Housing and Urban-Rural Development to present its policies and achievements at a Wednesday teleconference on regulating real estate development, sales and broking activities.

China Manufacturing Gauge Climbs to Highest in Almost Five Years – Bloomberg “This strength probably won’t last, ” Julian Evans-Pritchard, China economist at Capital Economics, wrote in a note. “The correction in the property market still has much further to run which, in combination with policy tightening, will drive a slowdown in investment and industrial activity during the coming quarters.”

Investors walk back from the edge on China, but big risks remain-FT China’s economic model is very different from that of the US, and it is buoyed by far stronger growth. The temptation to extrapolate directly from the western crisis of a decade ago should be avoided. But the similarities in the underlying dynamics are undeniable and no issue is more important for world markets than China’s effort to avoid a similar denouement. For now, Chinese growth is a fact that has lifted many other boats around the world.

深化国有企业和国有资本审计监督 (1)_解读_中国政府网 深化国有企业和国有资本审计监督 为国有企业健康发展保驾护航 ——审计署企业审计司主要负责人解读《关于深化国有企业和国有资本审计监督的若干意见》

After Slaying Uber, Didi Faces Domestic Rivals — The Information The Information reported last year that Didi itself had considered investing in eHi to ensure a supply of cars. There are past connections: eHi was once an investor in Kuaidi, a ride-hailing firm that merged with Didi in 2015. eHi later sold its stake. But Didi is still wrestling with the issue of whether to buy cars itself. eHi may not move forward with Shouqi. The car rental firm is also considering an investment offer made by a consortium of investors that could include a car maker such as Dongfeng Motor, Shanghai’s SAIC Motor or southern China’s Guangzhou Automobile Industry, the people said. This could be with or without Shouqi, one person said.  // Comment: Full disclosure, I own shares in $ehic

Mengniu Won’t Rule Out Investing in Troubled Dairy Rival – Caixin Global Questioned Thursday by reporters about Huishan, China Mengniu Dairy Co. Ltd. CEO Lu Minfang said his company to date has had no business contacts with Huishan Dairy. But “as long as the investment is in line with the company’s development strategy, Mengniu would consider investing in suppliers, including Huishan,” he said.

Chinese Company Delays Purchase of Nasdaq Stock That Jumped 4,500% – Bloomberg Wins Finance Holdings Inc., the Chinese loan guarantor that rode a mysterious 4,500 percent stock surge, plunged for a second day after a potential buyer said it needed more time to brief shareholders on the deal.

AnchorPOLITICS AND LAW

Petitioning Henan Farmer Prosecuted for ‘Blackmailing’ Officials | Sixth Tone Local governments suing people who lodge official complaints is increasingly common in China, says academic.

AnchorFOREIGN AND DEFENSE AFFAIRS

Duterte’s Drug War Chief Can’t Stop Meth Flowing in From China – Bloomberg Recent data provided by the Philippines Drug Enforcement Agency showed that the largest quantities of methamphetamine seized had been trafficked directly from China, according to Jeremy Douglas, regional representative of the United Nations Office on Drugs and Crime. Methamphetamine imports into the Philippines rose to 2,495 kilograms in 2016, more than four times the amount in 2015, he said.

Drug Czar’s Letter to Congress Highlights Fentanyl Crisis – WSJ The “overwhelming majority” of fentanyl pouring into the U.S. is made by foreign sources, mainly in China, according to the letter. Much of it is coming through Mexico, where traffickers are repackaging already-made fentanyl or producing it with precursor chemicals, also from China.

China May Have Been Surveying Strategic Waters East of Philippines | The Diplomat Benham Rise could be site of submarine operations in a U.S.-China clash.

A Chinese-Backed Dam Project Leaves Myanmar in a Bind – The New York Times “I pray to God to let me work on my own land again,” she said on a recent afternoon, sitting outside the wood-shingled home in Aung Myin Tha, where she was resettled in early 2011. She may get her answer soon, when a government-appointed commission makes a recommendation on the fate of the $3.6 billion, Chinese-financed Myitsone Dam.

AnchorHONG KONG, MACAO AND TAIWAN

Is Hong Kong on Its Way to Becoming Just Another City in the P.R.C.? | ChinaFile Conversation Unpopular with Hong Kong’s pro-democracy lawmakers and citizens, Lam’s election has exacerbated concerns about the mainlandization of Hong Kong. What does Lam’s election mean for Hong Kong’s future?

Akama’s Taiwan visit serves multiple goals – Global Times Since Democratic Progressive Party, led by Taiwan’s current leader Tsai Ing-wen, won the election in 2016, Abe’s administration has shown extreme interest in Tokyo’s ties with the island and has taken every chance to showcase how close the relationship is between Japan and Taiwan. Tokyo’s tendency of proactively using Taiwan as a pawn to contain China has become more and more apparent.

AnchorTECH AND MEDIA

The New York Times vs. the ‘Great Firewall’ of China – The New York Times Our traffic has long since surpassed what it was when our troubles began, and it grew nearly 70 percent last year alone. The New York Times brand now has a firm foothold in the country and among the global Chinese diaspora. When news media restrictions relax, and I believe they eventually will, The Times’s Chinese audience will most certainly take off.

LeEco Secures Most of 15 Billion Yuan Investment from Sunac – Caixin Global As the much-needed funds arrive to fill LeEco’s cash gap, the company is also making progress in sorting out a deal to purchase web-series production house Leyang Films, owned by Chairman Jia Yueting’s wife, former actress Gan Wei. Jia’s wife has agreed to sell her majority stake in Leyang to LeEco for half its market value, which is still under review. Previous reports claimed that a recent round of funding valued the company at 1.2 billion yuan.

Oppo Faces India Backlash over Flag Incident – Caixin Global The Monday incident that sparked the case involved an Oppo employee who was conducting product inspections at the plant, said the source, speaking on condition of anonymity due to the sensitive situation. An Oppo spokesman in China had no immediate comment on the situation.

Huawei Posts Worst Profit Growth in Five Years – Caixin Global Huawei posted a profit of 37 billion yuan ($5.36 billion) last year, up just 0.4% from 2015, according to a self-released company report. Revenue rose by a much stronger 32% to 522 billion yuan, thanks in part to 44% growth in the company’s younger and fast-growing smartphone unit. But the company’s operating margin dipped to 9.1% amid stiff competition, down sharply from 11.6% in 2015 and the lowest level in the last four years.

AnchorSOCIETY, ART, SPORTS, CULTURE AND HISTORY

Yao Ming’s ambitious quest to bring China an elite basketball league-ESPN Yao, 36, is a Shanghai native, former NBA All-Star and newly inducted Basketball Hall of Famer — and in February, he was elected president of the CBA. He’s now the Adam Silver of the world’s second-best-paying league. The first nongovernment official to hold the post, he aims to introduce a host of NBA-style reforms to Chinese hoops, which despite all its fans is an underperforming institution.

The new Chinese diaspora-Lowy Interpreter In the 1980s-90s, the ‘old diaspora’ helped fuel China’s emergence as the Asia Pacific’s manufacturing hub, setting in train a shift in the region’s political balance of power. The new Chinese diaspora is at the heart of a transformation that may have still more profound consequences. At a time when the premises of globalisation are increasingly under siege, this group of people – quintessential products of a globalised world – will likely loom ever larger in relations between the developed countries and a rising China.

Out-of-Towners Not Welcome at Suzhou Cemeteries | Sixth Tone Rising grave prices have forced the eastern Chinese city of Suzhou to ban the sale of commercial tombs to nonlocal citizens, pushing out people from nearby Shanghai who see Suzhou as a relatively cheap place to rest in peace.

AnchorENERGY, ENVIRONMENT, SCIENCE AND HEALTH

Panda Released Into Wild Found Dead After Attack by Animals – Caixin Global The 3-year-old panda, He Sheng, was found dead in Ya’an, Sichuan province, on Sept. 27, with wounds to his right shoulder, ear and leg, the Chengdu Research Base of Giant Panda Breeding said this week on its official Weibo account. An autopsy found the panda had died from infection.

Good news for Africa’s elephants: China is losing its taste for ivory – The Washington Post China will close 67 ivory carving factories and retail shops on Friday, roughly one-third of the total, as it moves to implement a pledge to end all domestic ivory sales by the end of the year.

AnchorAGRICULTURE AND RURAL ISSUES

Village Banks Thrive, but Risk Concerns Mount – Caixin Community banks are usually founded by larger banks that tend to hold no less than a 15% stake and agree to provide technology, employee and management support. If a community bank encounters a liquidity crisis, the founding bank is obliged to rescue it, according to banking industry rules. But unlike subsidiary banks, community banks are registered as independent legal entities and operated independently. Their business is usually limited to within the township in which they are located.