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Sinocism Weekly: US-China; Party construction; Taiwan; Hong Kong

Good Morning. Today’s newsletter is a test of a free, weekly version of the top issues I have seen over the last week. Please let me know in the comments if this is something you would like to see on a regular basis.

And of course you can subscribe here to get a much more comprehensive newsletter four times per week. Here are this week’s newsletters:

Thanks for reading.

1. US-China

The trade negotiating teams held a call earlier this week. While there were no breakthroughs I hear there was some softening of positions, and that the US side may now accept interim administrative directives before the Chinese side codifies promises in law. There had been some talk of the US side going to China next week but I do not expect that to happen so quickly.

Trump team fears new face on China trade team signals tougher stance - The Washington Post

The Trump administration is increasingly concerned about prospects for a trade deal with China, amid an unexpected reshuffling of the Chinese negotiating team and a lack of progress on core issues since the Group of 20 summit in Japan, according to U.S. officials and senior Republicans briefed on the discussions...

Trump told his trade team before the Tuesday call to secure the new Chinese orders for soybeans and wheat he believed he had been promised in Osaka, Japan. But Zhong and Liu offered no specific commitments, leaving negotiations at a virtual standstill, according to a White House official..

Chinese officials may be delaying any trade concessions until they see how Trump’s G-20 change on Huawei’s purchases from U.S. companies is implemented and how the administration reacts to continuing protests in Hong Kong, according to one Trump supporter who has been briefed by administration officials

China and U.S. Differ Over Agricultural Purchases Trump Boasted About - The New York Times

People familiar with the negotiations say China has denied making any explicit commitment to buy American farm products during those discussions and instead saw large-scale purchases as contingent on progress toward a final trade deal that is still nowhere in sight.

That is raising questions among trade experts about whether the United States gave up more than it got during Mr. Trump’s recent efforts to de-escalate the trade war.

Peter Navarro calls the Wall Street Journal 'garbage,' says don't believe China or US press - CNBC 

“There’s just going to be a lot of garbage coming out of the Wall Street Journal and the People’s Daily and everything in between,” Navarro said. “I’ve seen this movie before. There were all sorts of stories written and they were designed to shape the negotiations and they didn’t have any insight into them,” Navarro said. 

Navarro said the trade war is “in a quiet period,” adding that U.S. Trade Representative Robert Lighthizer will travel to Beijing with Treasury Secretary Steven Mnuchin in the near future.

China’s exports and imports both fell in June, as higher US trade war tariffs blitzed Chinese economy | South China Morning Post

Exports fell by 1.3 per cent year-on-year after tariffs on US$200 billion of Chinese goods were raised from 10 per cent to 25 per cent by Washington in May 

Over the first half of the year, China’s exports to the US fell by 8.1 per cent to US$199.4 billion, while imports dropped by 29.9 per cent to US$58.9 billion

U.S. officials push for sanctions on China over oil purchases from Iran 

Senior administration officials now agree that China defied U.S. sanctions when it imported more than a million barrels of crude oil from Iran last month. But they are grappling with whether — and how — to hit back, according to three U.S. officials.

Another response to last week’s open letter - Why the United States doesn’t need to return to a gentler China policy - The Washington Post - John Pomfret

I was reminded of this story last week when I read the open letter signed by scores of prominent experts on China. Like Tuchman, they deny agency to the Chinese Communist Party by placing the bulk of the blame for the current crisis in U.S.-China relations at the feet of the Trump administration. The letter nods to China’s misbehavior but focuses far more attention on what it calls the "many U.S. actions” that “are contributing directly to the downward spiral in relations.”..

Last week’s letter continues in this wrongheaded vein by repurposing the tired trope that we should tailor our China policy to support “Chinese leaders who want China to play a constructive role in world affairs.” But all the evidence I have seen from living in China for nearly 20 years indicates that there are no such “Chinese leaders” waiting in the wings. Xi has purged many of them, and others — reading the tea leaves — have changed their tune...

At root, the letter seems to misunderstand the nature of power in a Marxist-Leninist system such as China’s.

Few things worry China’s elite more than getting their kids into Harvard - Chaguan - Economist $$ 

when Chinese officials meet Westerners, America’s treatment of Chinese students and scholars comes up time and again. For many, the issue is personal: in China as elsewhere, few things matter more to the elite than getting their offspring into Stanford. Chaguan spent July 8th and 9th at the World Peace Forum, a conference attended by Chinese leaders and foreign grandees, hosted by Tsinghua University in Beijing. In public debates and in private corridor conversations, Americans were repeatedly scolded by Chinese government ministers, professors and retired generals, and even ambassadors from Western allies. The charge is that, in the name of national security, America is treating Chinese students and scholars as a new “Yellow Peril”, in a witch-hunt worthy of Senator Joseph McCarthy... 

America has a story worth telling. It is one about open societies, and how openness to people and ideas, though it can be seen as a vulnerability, represents their greatest strength. That America is losing a propaganda war, unbeknown to most Americans, is an extraordinary failure. Some day, China’s brightest youngsters may no longer want to come.

Trump’s Asia Gamble: Shatter Enduring Strategies on China and North Korea - The New York Times

Trump administration officials argue that economic engagement without appropriate guardrails created a tyrannical behemoth that could supplant American supremacy. Some call for long-term tariffs to “decouple” the economies of China and the United States by breaking supply chains and other business ties. 

“We seem to be at a unique confluence of Xi and Trump,” said Bill Bishop, an analyst in Washington who publishes Sinocism, a China briefing. “And Make China Great Again meets Make America Great Again is a recipe for friction.” 

The Art of Wait and See by Keyu Jin - Project Syndicate

In the emerging Chinese view, any leverage or advantage the US has over China in trade is far exceeded by the Chinese people’s willingness to withstand the pressure. They will make the sacrifices necessary to maintain national pride and avoid the appearance of subservience to the West. This patriotic impetus has been fueled further by studying the US-Japanese trade conflict of the 1980s... 

At the same time, China is taking advantage of doubts about Western liberalism by pushing a new worldview of its own. The West’s vulnerability has been exposed by its slow economic recovery since the 2008 financial crisis, declining life expectancy among some cohorts, stagnant standards of living, and the breakdown of traditional alliances. In exporting an alternative agenda, China is unapologetically advocating increased state intervention to improve livelihoods, as well as a value system that ranks collective welfare above individual desires. It is also making efforts to bypass or otherwise mitigate the effects of the exclusionary military alliances that underpin the Western-led order.

“Who Knew Trump Would Offer a Truce With Xi?”: The Mystery of the Wall Street Trump Trades | Vanity Fair

Take, for example, what happened in the last 30 minutes of trading on Friday, June 28 at the Chicago Mercantile Exchange. By that time Trump was already in Osaka, Japan—which is 14 hours ahead of Chicago—where he would meet for more than an hour with China’s President Xi Jinping. According to the trader, who has decades of experience trading options, while they were meeting on Saturday morning, someone, or a group of people, bought 420,000 so-called “e-minis”—electronically traded futures contracts tied to a wide range of stock indexes—in the last 30 minutes of trading in Chicago on Friday afternoon. The big bet could appear to be that Trump might announce a deal of some sort with Xi about the tariff negotiations, and that on Monday morning, or soon thereafter, the S&P 500 stock index would trade up.

The total volume Friday of the September e-minis was a little more than one million contracts, so a purchase of 420,000 contracts, or about 40% of the day’s volume, in the last few minutes would likely be noticed by astute market watchers. 

2. Taiwan

China to impose sanctions on U.S. companies involved in arms sales to Taiwan - Xinhua 

China will impose sanctions on U.S. companies involved in arms sales to Taiwan, foreign ministry spokesperson Geng Shuang said on Friday. 

Geng's comments came after the United States earlier announced a plan of selling weapons worth 2.22 billion U.S. dollars to Taiwan.

U.S. attempts to play off Taiwan against China will be in vain - People's Daily Zhong Sheng

Given the current cross-strait relations, the irresponsible practice of the U.S. has sent a wrong signal to “Taiwan independence” forces, aggravated the tension and complexity of the situation across the Taiwan Strait, and created greater uncertainties for China-U.S. relations... 

It’s better for the U.S. to have a clear understanding of the current situation and seriously abide by the one-China principle and the three joint communiqués. It should immediately cancel the planned arms sale to Taiwan, stop selling weapons to Taiwan and terminate military contact with Taiwan, and exercise caution and prudence when handling Taiwan-related issues to avoid serious damage to China-US relations and cross-strait peace and stability.

Taiwan president leaves for U.S., warns of threat from 'overseas forces' - Reuters

She is spending four nights in the United States in total, two on the way there and two on the way back on a visit to four Caribbean allies. Tsai will go to New York on her way there, and then is expected to stop in Denver on the way back.

Tsai was last in the United States in March, but her stops this time will be unusually long, as normally she spends just a night at a time in transit...

analysts said the extended stopovers served to emphasize the Trump administration’s support for Tsai

Comment: Risky for Taiwan to believe that President Trump cares about the island. Certainly many of his advisors do, as do many on Capitol Hill. PRC officials will not likely to get any more upset than normal so long as she stays out of DC and the Trump Administration does not send any senior officials to meet with her.

There were some fights outside Tsai’s New York Hotel as she arrived:

More scenes of the brawling on New York streets:

3. Harassment of American executives in China increasing?

A Koch Executive’s Harassment in China Adds to Fears Among Visitors - The New York Times

A Koch Industries executive was told he could not leave China. An ex-diplomat who helped organize a technology forum in Beijing was hassled by authorities who wanted to question him. An industry group developed contingency plans, in case its offices were raided and computer servers were seized... 

“In a very not-so-subtle manner, the Chinese government has upped the ante by detaining Americans at the borders and at their hotels, and with the obvious intent to send a message to the Trump administration that they can engage in hostage diplomacy if push comes to shove,” said James Zimmerman, a partner in the Beijing office of the law firm Perkins Coie, which works with American companies in China…

In late June, one American industry group sent an email to its members detailing how it was trying to mitigate its own risks.

“Foreign staff in particular have reported a high level of anxiety about the current environment,” it said in the message, which was reviewed by The Times. It said it was “in the process of finalizing a detailed crisis plan to be used in the event that one of our offices is raided and/or one of our staff is detained.”

4. Hong Kong

China's top official in Hong Kong says Beijing backs city's leader - Reuters

the central government firmly supports Chief Executive Carrie Lam and the Special Administrative Region government continue to govern effectively and actively make a difference in accordance with the law, firmly supports Hong Kong Police to do their duties in accordance with the law.”

Trump softened stance on Hong Kong protests to revive trade talks | Financial Times $$

Donald Trump told Chinese president Xi Jinping last month that the US would tone down criticism of Beijing’s approach to Hong Kong following massive protests in the territory in order to revive trade talks with China.

The US president made the commitment when the two leaders met at the G20 summit in Osaka, according to several people familiar with the meeting. One person said Mr Trump made a similar pledge in a phone call with Mr Xi ahead of the G20 summit.

Comment: Another reminder that to Trump everything is just a bargaining chip for a trade deal, from Hong Kong, to Xinjiang, to Taiwan and Huawei. The signaling to China and to US allies is not constructive. 

Video of assault on Hong Kong activist spurs outrage - Inkstone

Makeshift displays of sticky notes, known as Lennon Walls, have sprung up across the city to support protests against a government plan that critics said could erode the city’s autonomy from mainland China.

In the widely circulated video, a young man guarding one such wall in the city’s Kowloon Bay neighborhood was seen being punched by an older man who complained about the notes and accused the younger man of taking part in a “revolution.”

The activist, later identified as surnamed Mak, 36, did not fight back as the older man repeatedly landed blows to his face. Mak at one point tumbled to the ground.

Hong Kong anti-extradition bill hunger strikers enter eighth day, as lawmaker Fernando Cheung joins | Hong Kong Free Press HKFP 

A group of anti-extradition law activists in Admiralty have been on hunger strike for more than 180 hours, with pro-democracy lawmaker Fernando Cheung also joining the protest. 

Last Wednesday, Roy Chan – a preacher at the Good Neighbourhood North District Church – began the hunger strike, which has since evolved into a ten-person protest. Participants are aged between 16 and 73.

HK Protests Show Expanding Focus, Sustained Momentum – China Digital Times (CDT)

Long and excellent recap

Hong Kong youth need guidance - Global Times

Foreign forces are deeply involved and even dominate the media and education in Hong Kong, and they select negative information and news about the mainland to mislead the Hong Kong public and students. Objective and positive reports and education about the mainland were excluded by these pro-West forces, said Victor Chan Chi-ho, 33, vice chairman of the Hong Kong Association of Young Commentators.

Plan to let Hong Kong people join Chinese army shelved in wake of extradition bill crisis | South China Morning Post

“Given the current political situation, discussions like enrolling Hong Kong people into the army and the civil service system are going to be very difficult to carry on at the moment,” an official who is close to Beijing policymakers responsible for Hong Kong’s affairs told the South China Morning Post.

5. Party construction

China's Xi tells officials not to be lazy and 'spend whole day eating' - Reuters

Chinese officials must not use the fight against corruption as an excuse to sit around and do nothing, idling their time away and “spending the whole day eating”, President Xi Jinping told a meeting of senior Communist Party leaders on Tuesday.

Xi highlights Party building in central Party, state institutions - Xinhua

Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, on Tuesday urged central Party and state institutions to make themselves exemplary institutions that the CPC Central Committee trusts and people are satisfied with.

Xi, also Chinese president and chairman of the Central Military Commission, told a meeting that central Party and state institutions should comprehensively improve the quality of Party building

CCTV Evening News - 习近平在中央和国家机关党的建设工作会议上强调 全面提高中央和国家机关党的建设质量 建设让党中央放心让人民群众满意的模范机关

Just days after the meeting reviewing the reform of Party and state institutions Xi also convened a meeting from July 7-9 on Central Party and state institutions. 


It did not have the full grouping of officials that the earlier meeting this week had. Standing Committee members in attendance were Xi, Wang Huning, Zhao Leji and Han Zheng. 

习近平:决不能把反腐败当成不作为的借口 - 学习小组

Some highlights from the meeting, as noted by the "Study Xi Small Group"


local officials must not use anti-corruption as an excuse for not doing any actual work. This seems to confirm some reports about how local governments have been all paralyzed in recent year because the anti-corruption campaign was so harsh..


Officials staying loyal to the Party is not enough, their families also need to be loyal to the Party

This meeting came just after Xi convened a meeting last Friday of top Party, State and PLA officials to discuss progress in the bureaucratic reforms from last year’s Third Plenum, reforms whose main goal is to increase Party control (Xi stresses consolidating achievements in reform of Party, state institutions - Xinhua).

For the the meeting last Friday Xi looks to have convened same audience as he did for the risk prevention study seminar Xi chaired in January, with the exception of the representatives of the other democratic parties and All-China Federation of Industry and Commerce, who were listed as attending the opening ceremony of the January seminar.

Who needs a Fourth Plenum when Xi can convene everyone who matters when he wants to?

6. South China Sea

Failing or Incomplete? Grading the South China Sea Arbitration | Asia Maritime Transparency Initiative

On July 12, 2016, an arbitral tribunal at the Permanent Court of Arbitration in The Hague issued its ruling in Manila’s case against Beijing’s claims in the South China Sea. Convened under the compulsory dispute settlement provisions of the United Nations Convention on the Law of the Sea (UNCLOS), the tribunal’s five arbitrators ruled overwhelmingly in the Philippines’ favor.  Beijing refused to participate in the arbitration and rejected the outcome.....

AMTI has compiled a list of actionable findings from the tribunal and assessed whether China’s recent actions are in-line with them. Overall, China is in compliance with just 2 of 11 parts of the ruling, while on another its position is too unclear to assess.

The Philippines sided with China after a boat was rammed. Critics say it’s all about money.  - The Washington Post

“Cowardly,” the Philippines’ defense secretary said.

Military commanders followed suit, telling reporters it was time for President Rodrigo Duterte to get tough with China after years of increasingly cozy ties.

Instead, the Philippine leader sided with Beijing...

A senior Philippine Navy official, who spoke on the condition of anonymity because he was not authorized to speak to the media, said he had logged the activities of China’s maritime militia every day for more than a year, but felt the reports he filed went nowhere.

A former senior official at the Armed Forces West Command, the unit monitoring the South China Sea, said his Facebook feed is filled with laments from his contemporaries.


On June 9, 2019 Philippine fishing boat Gem-Ver was anchored near Recto Bank, ready for deep-sea fishing in the West Philippine Sea. They planned to remain there for 12 days. On the 9th day, a Chinese vessel rammed, sank, and abandoned Gem-Ver and its fishermen in the open seas in the dead of night. The Philippine government has since downplayed the incident, even casting doubt on the account of the Filipino fishermen. 

Rappler spoke to all 22 fishermen of Gem-Ver who agreed to put their testimonies on the record. This is their story.

China Is Winning the Silent War to Dominate the South China Sea - Bloomberg

“You can call it a silent war,” said Le Hong Hiep, a fellow at Singapore’s ISEAS–Yusof Ishak Institute. The Chinese “are contesting waters. There is violence. It happens all the time.”

While China appears to be the biggest offender due to its size and resources, it’s not alone in seeking to protect fishing grounds as stocks get depleted and rules remain lax. Other claimants such as Malaysia, Indonesia and Vietnam have taken action against fishing crews from China and other nations, sometimes even making a show of destroying vessels that were impounded.

Heads of U.S. And Chinese Navies Discuss Decreasing South China Sea Risks - USNI News

As officials in Washington and Beijing charged each other with ratcheting-up the militarization of the South China Sea recently, Chief of Naval Operations Adm. John Richardson discussed ways to decrease risk in the region during a video teleconference with his counterpart from China’s People’s Liberation Army Navy, Vice Adm. Shen Jinlong. The call focused on the importance of maintaining regular dialogue between the two sides as a means of reducing the chance either side will make a miscalculation that could quickly escalate a potential conflict, according to the Navy...

Tuesday’s video teleconference was the fourth such call between Richardson and Shen. The two have also met twice in person, most recently during Richardson’s January visit to China

7. US tech coupling with PRC surveillance

How U.S. Tech Giants Are Helping to Build China’s Surveillance State - The Intercept

The OpenPower Foundation — a nonprofit led by Google and IBM executives with the aim of trying to “drive innovation” — has set up a collaboration between IBM, Chinese company Semptian, and U.S. chip manufacturer Xilinx. Together, they have worked to advance a breed of microprocessors that enable computers to analyze vast amounts of data more efficiently.

Shenzhen-based Semptian is using the devices to enhance the capabilities of internet surveillance and censorship technology it provides to human rights-abusing security agencies in China, according to sources and documents. A company employee said that its technology is being used to covertly monitor the internet activity of 200 million people...

Semptian employee sent documents showing that the company — under the guise of iNext — has developed a mass surveillance system named Aegis, which it says can “store and analyze unlimited data.”…

Aegis can provide “a full view to the virtual world,” the company claims in the documents, allowing government spies to see “the connections of everyone,” including “location information for everyone in the country.”...

By 2013, Semptian had begun promoting its products across the world. The company’s representatives traveled to Europe, where they appeared at a security trade fair that was held in a conference hall in the northeast of Paris. At that event, documents show, Semptian offered international government officials in attendance the chance to copy the Chinese internet model by purchasing a “National Firewall,” which the company said could “block undesirable information from [the] internet.”

Just two years later, Semptian’s membership in the OpenPower Foundation was approved, and the company began using American technology to make its surveillance and censorship systems more powerful.

Read the whole infuriating piece here.

U.S. tech on guard against China as scrutiny increases on security, human rights-NBC News

Concern about how U.S. tech firms, unwittingly or not, may enable Chinese military capabilities or domestic surveillance is now top of mind in Washington. Scrutiny of U.S. tech companies and their customers, partnerships and personnel may well intensify, with the Huawei case being only one example. 

“For tech companies, the operating environment is now highly politicized,” said Adam Segal, chair of emerging technologies and national security at the Council on Foreign Relations, a think tank. “They have to be a lot more sensitive to the potential uses there are in China and the types of technologies they’re involved in.”

What Trade War? U.S. Tech Firms Cozy Up to China Despite Turmoil - Bloomberg 

Tech companies "must now live in a world where their Chinese business partners and global value chains at any given day could blow up," said James Lewis, director of the tech and public policy program at the Center for Strategic and International Studies, a Washington think-tank. “Trump might have backed off Huawei for now but next week it could be something different and any of these companies are fair game.” 

Lewis, who previously served as the U.S. Commerce Department’s lead for national security and espionage concerns related to high-technology trade with China, said Chinese firms are also racing to become less reliant on the very American firms bending over backwards to keep their business.

8. PRC-Ireland “Emerald Age” coming?

China's NPC delegation visits Ireland - Xinhua

A delegation headed by Zhang Chunxian, vice chairman of the Standing Committee of the National People's Congress (NPC), China's top legislature, on Wednesday wrapped up a visit to Ireland, which aims to further promote the bilateral relations between the two countries....

The Irish side told the Chinese delegation that the current relationship between Ireland and China is growing strongly. They also said that Ireland firmly supports multilateralism, views China's development as a significant opportunity for Ireland, and is willing to actively participate in the international cooperation under the Belt and Road initiative and serve as a gateway for Chinese businesses to enter the European Union.

Comment: Head of the United Front Work Department You Quan visited in June. From the PRC embassy readout of You's visit:  

Mr. Coveney and Mr. Ó Fearghaíl both expressed their esteem for China’s great development in various fields under the leadership of President Xi Jinping and emphasized that Ireland cherishes its traditional friendship with China. Ireland supports the Belt and Road construction and is ready to join hands with China to deepen the cooperation in fields of economic and trade, investments, education, tourism and so on. Ireland is committed to work together with China to uphold multilateralism and free trade. As a partner of China and member of EU, Ireland could be a gateway for the cooperation and exchanges between EU and China. The Irish political parties are also ready to strengthen exchanges and mutual understanding with the Communist Party of China.

Question: Does Brexit mean more PRC love and attention for Ireland? Are we on the cusp of a PRC-Ireland "Emerald Age"?

Ireland-China business booms as 40th anniversary of diplomatic relations marked

While relations can be complex, business between the two nations was booming and bilateral trade hit €17 billion in goods and services last year, according to Eoin O’Leary, Ireland’s ambassador to China.

“That figure has more than doubled over the past five years,” he told The Irish Times, “and we are one of the few countries to enjoy a trade surplus with China.”

If you like what you see please sign up for the Sinocism China Newsletter here. Group and education discounts are available.

Hong Kong; Open letter from US China watchers; Billionaire child molester; Boss Yao Ming

We are in summer mode this week, no commentary up top again today, some in the body, and we are off Thursday for the US Independence Day holiday.

Thanks for reading

The Essential Eight

1. Hong Kong

Commentary: Violence must be punished to safeguard Hong Kong stability - People's Daily Online

Laws are to be abided by, and law-breakers must be punished. Only by safeguarding the authority of law and defending the dignity of law can we ensure the prosperity and stability of Hong Kong, as well as the stability of the country.

Hong Kong is a pluralistic society. It is not strange that there are disagreements or major differences on some issues. However, if people become too politicized over various issues, and create confrontations, they will seriously hinder the economic and social development of Hong Kong.


Page 1 People's Daily commentary Wednesday on resolutely supporting the Hong Kong government in investigating and prosecuting those responsible for the attack on LegCo on July 1

Hong Kong’s PLA garrison held a drill last week on ‘emergency dispatches’ | South China Morning Post

But the Chinese army’s official newspaper waited until the day after violent protests rocked the city to report on the patrol exercises



UK warns China against ignoring Hong Kong governance deal | Financial Times $$

Jeremy Hunt, Britain’s foreign secretary, said the Chinese needed to understand “the root causes of what happened, which is a deep-seated concern by people in Hong Kong that their basic freedoms are under attack and that the way to deal with this issue is to address those concerns”.

Although Britain’s Conservative government is focused on Brexit and the Conservative party leadership contest, UK ministers have lined up this week to defend the 1984 Joint Declaration which established the “one country, two systems” arrangement that guarantees Hong Kong a level of autonomy.

China protests to Britain over British Foreign Secretary Jeremy Hunt’s warning on Hong Kong agreement | South China Morning Post

Chinese foreign ministry spokesman Geng Shuang said Beijing had made “stern representations” to Britain over the comments, and accused Hunt of still harbouring a “colonial illusion”.

“We called on the British side, especially Hunt, to stop being overconfident and grossly interfering in Hong Kong affairs. This is doomed to fail,” Geng said.

The Lawfare Podcast : WTF, Hong Kong?

Benjamin Wittes spoke with Alvin Cheung, an expert on Hong Kong's legal system based at New York University, and Sophia Yan, the China correspondent for The Telegraph in London who has been covering the Hong Kong protests (Lawfare Podcast listeners also know her for her musical prowess). They talked about where Hong Kong is now, what's really behind the demonstrations, where the anger is coming from, and where it's all going.

2. US-China

China Considers Buying U.S. Farm Products to Show Goodwill - Bloomberg

China is considering buying some U.S. agricultural products as a gesture of goodwill amid the resumption of trade talks between Beijing and Washington, though the volume is likely to be smaller than before, according to people familiar with the situation.

Trump team weighs giving China a get-out-of-jail free card on Iran - POLITICO

according to three U.S. officials, the department’s Iran czar, Brian Hook, and his team of negotiators have discussed granting China a waiver to a 2012 law intended to kneecap the Iranian oil industry. The alternative is allowing China, which recently welcomed a shipment of approximately a million barrels of Iranian oil, openly to defy U.S. sanctions...

The Trump team has kept the details of its deliberations closely held as news reports of the Chinese oil imports have proliferated in recent days — and hawks on Capitol Hill have begun to ask questions.

To Evade Sanctions on Iran, Ships Vanish in Plain Sight - The New York Times

Chinese Tankers Keep Disappearing in the Persian Gulf

Reality check on pre-August USMCA vote - POLITICO 

Preliminary figures released Tuesday by the Commerce Department shows new Chinese investment in the U.S. dropped to $1.8 billion in 2018, from nearly $15 billion the previous year. That coincided with Congress crafting tougher rules to screen foreign investment and Beijing cracking down on outbound flows

US federal court finds Chinese-American engineer Shih Yi-chi guilty of exporting military-grade semiconductors | South China Morning Post

Shih, who had also been an adjunct professor of engineering at the University of California, Los Angeles, was convicted of conspiring to gain unauthorised access to a protected computer and violating the International Emergency Economic Powers Act, a federal law barring unauthorised exports, the Justice Department said on Tuesday.

Shih, a naturalised US citizen, was convicted of 18 counts on June 26 after being indicted by a federal grand jury.

Fear mounts that Chinese-American scientists are being targeted amid US national security crackdown | South China Morning Post

“What’s happening with MD Anderson and Emory University is very concerning,” said Xiaoxing Xi, former chairman of the physics department at Temple University in Philadelphia. “It all started from the FBI gaining access to email accounts of Chinese scientists.”

Xi, who addressed a China Institute forum in New York on Thursday, was speaking from personal experience: four years ago, he was accused of stealing superconductor secrets for China.

3. Open letter from US China watchers

Making China a U.S. enemy is counterproductive - Open Letter - The Washington Post

By M. Taylor Fravel , J. Stapleton Roy , Michael D. Swaine , Susan A. Thornton and Ezra Vogel, and just under 100 other signatories

We are members of the scholarly, foreign policy, military and business community, overwhelmingly from the United States, including many who have focused on Asia throughout our professional careers. We are deeply concerned about the growing deterioration in U.S. relations with China, which we believe does not serve American or global interests. Although we are very troubled by Beijing’s recent behavior, which requires a strong response, we also believe that many U.S. actions are contributing directly to the downward spiral in relations...

The letter list seven propositions. The first notes "China’s troubling behavior in recent years— including its turn toward greater domestic repression" but does not explicitly mention the Xinjiang camps that hold over 1 million people.

As I noted on Monday I am deeply skeptical of this claim:

Although its rapid economic and military growth has led Beijing toward a more assertive international role, many Chinese officials and other elites know that a moderate, pragmatic and genuinely cooperative approach with the West serves China’s interests. Washington’s adversarial stance toward Beijing weakens the influence of those voices in favor of assertive nationalists. With the right balance of competition and cooperation, U.S. actions can strengthen those Chinese leaders who want China to play a constructive role in world affairs.

Here is what I wrote one of the signatories yesterday about this issue:

I unfortunately and very reluctantly have come to the conclusion that:

1. Under Xi the Chinese side sees restraint as more evidence of US weakness and decline;
2. There is no one in a position of serious of influence in Beijing who could be considered "dovish" or in a position of enough influence to push changes based on a different US approach;
3. The non-adversarial approach does not have a great record over the last decade +, and if anything has emboldened the Chinese side;
4. This claim is something that is repeated so often out of Beijing that it strikes me as having elements of directed propaganda;
5. 吃硬不吃软 (open to coercion but not to persuasion" is a core operating principle of PRC society and political system, much to my frustration in my decade+ living there;
6. Xi and the Party are the ones fueling Chinese nationalism. The tension with the US has its utility in this area, but if were not the US it would be something else, like Japan (see 2012);
7. The US-China relationship going off the rails may be the one thing that could really weaken Xi and open up space for people who may "want China to play a constructive role in world affairs", so a tougher US line now may have at least as good a chance of a positive outcome;
8. There does need to be a correct balance of cooperation and competition, but the US does need to take a much tougher approach now to reset expectations and the relationship, as we have conditioned the PRC to getting away with few to no costs for what we see as bad behavior for far too long. See point 5, 吃硬不吃软.

I wish this were not where I have ended up but here we are.

Overall I am glad people are speaking up, we are at a critical moment in the US-China relationship. And of course who did not sign the letter is at least as interesting as who did…

You can read the whole letter here.

US needs to balance voices on China to bridge society - Global Times

In a draft open letter to US President Donald Trump and Congress seen by Reuters Saturday, some 80 Asia specialists, including former veteran US diplomats and military officers, called Washington to rethink policies that "treat China as an enemy," warning the approach could put US interests and the global economy in jeopardy…

The US policy toward China has been heavily influenced by right-wing politicians and hawks who are pushing to decouple the US and China economically and technologically. However, with the pain brought by strained bilateral relations increasingly felt in the US, opposition is also rising to prevent politicians from leading bilateral relations into a dead end…

As Trump prepares for the 2020 presidential elections, it is suggested he take these different opinions over the US' China policy into account.

4. Huawei

U.S. government staff told to treat Huawei as blacklisted - Reuters

In an email to enforcement staff on Monday that was seen by Reuters, John Sonderman, Deputy Director of the Office of Export Enforcement, in the Commerce Department’s Bureau of Industry and Security (BIS), sought to clarify how agents should approach license requests by firms seeking approval to sell to Huawei.

All such applications should be considered on merit and flagged with language noting that “This party is on the Entity List. Evaluate the associated license review policy under part 744,” he wrote, citing regulations that include the Entity List and the “presumption of denial” licensing policy that is applied to blacklisted companies.

Huawei: still fighting for survival despite Trump truce | Financial Times $$

In an 80-minute discussion in a cavernous hall adorned by doric pillars and statues of Aphrodite, the Greek goddess of love, Mr Ren touched on a wide range of topics..

“We are looking for alternatives [to US-made technology],” he said. “We are developing our own components and we have strong expertise in doing so, which will enable us to survive.”

He ticked off a list of areas most vulnerable to disruption from a rupture in the US supply chain and then detailed where he thought Huawei stood in terms of being able to replace or develop its own components, service and intellectual property to plug any gap.

5. Xinjiang

U.S., Germany slam China at U.N. Security Council over Xinjiang: diplomats - Reuters

Acting U.S. Ambassador to the United Nations Jonathan Cohen accused China of suppressing and mistreating the Uighurs, according to several diplomats who attended the meeting and spoke on condition of anonymity.

In response, China’s U.N. Ambassador Ma Zhaoxu told diplomats the United States and Germany had no right to raise the issue in the Security Council as it was an internal matter for his country.

China Snares Tourists’ Phones in Surveillance Dragnet by Adding Secret App - The New York Times

Three people who crossed the Xinjiang land border from Kyrgyzstan in the past year said that as part of a lengthy inspection, Chinese border officials had demanded that visitors unlock and hand over their handsets and computers. On Android devices, officers installed an app called Fengcai (pronounced “FUNG-tsai”), a name that evokes bees collecting pollen.

A copy of Fengcai was examined by journalists from The New York Times; the German newspaper Süddeutsche Zeitung; the German broadcaster NDR; The Guardian; and Motherboard, the Vice Media technology site.

One of the journalists undertook the border crossing in recent months. Holders of Chinese passports, including members of the majority Han ethnic group, had their phones checked as well, the journalist said.

Ethics and Empathy - Chinese Storytellers Newsletter

I applaud each incredible piece of reporting out of Xinjiang that raises awareness on the issue. Yet I am also especially concerned about the safety of individuals who were approached by some journalists who misrepresented themselves and whose identities can easily be tracked by authorities. (We’ll dive deep into the controversy surrounding a recent documentary filmed in Xinjiang in the Rock the Boat section.)

Some Uyghur activists, desperate to seek an end to the cruel plight of their entire population, dismissed concerns like mine as out-of-touch. Many of us Chinese journalists, mostly from the privileged Han majority, ask ourselves how we can better understand the atrocities inflicted on the Uyghurs and other ethnic minorities in order to be both empathetic toward the suffering and be critical of Xinjiang stories involving questionable journalistic practice. 

Comment: I highly recommend this free weekly newsletter, "a community celebrating the work of Chinese non-fiction creators and amplifying their voices." You can sign up here.

1.6m Party members of all ethnic groups in Xinjiang jointly promote local development - Global Times

Among these Party members in Xinjiang, 523,300 are women, 622,500 are from ethnic minority groups and 887,300 hold college degrees or above, according to data released by the Xinjiang Daily on Monday.

6. Billionaire investigated for child molesting

Hong Kong-Listed Developer’s Stock Plunges After Report Accusing Chairman of Child Molestation - Caixin Global

According to Xinmin Evening News, Shanghai’s local publication supervised by the Communist Party, last Saturday, two girls — one 9 years old and one 12 years old— were brought to a hotel in Shanghai from East China’s Jiangsu province by a woman surnamed Zhou, who was friends with the girls’ parents. Zhou told the parents she was taking the girls to the Shanghai Disney Resort. 

Wang allegedly molested the 9-year-old girl and paid Zhou 10,000 yuan cash ($1,452), Xinmin reported. The girl then called her mother on the phone, crying. The mother rushed to Shanghai to report the incident to the police. A medical examination showed the girl had suffered injuries to her genitals, Xinmin reported.

Future Land’s shares make their biggest one-day plunge since 2012 Hong Kong IPO, wiping out US$1.9 billion after founder’s arrest | South China Morning Post

Shares of Future Land Development Holdings Limited, a Shanghai-based property developer, plunged by the most since their 2012 listing in Hong Kong after the company’s founder and chairman Wang Zhenhua was detained by Chinese police over a child molestation charge.

Multiple initial reports were censored, prompting a backlash:

光明时评:涉嫌猥亵女童属实,没啥好说的,从重从严吧 _光明网

Guangming Daily said Wang should be punish severely if the accusation is true.

Future Land Plunges on Report Billionaire Chairman Detained - Bloomberg

Wang’s net worth, the bulk of which comes from his stakes in Future Land and Xinchengyue, dropped by $1.4 billion on Wednesday to $5.2 billion, according to the Bloomberg Billionaires Index.


The alleged child rapist chairman's firm has over 200B RMB in debts?

More coverage is needed of child molesters in China-Why Was an Alleged Child Molester Put in Charge of a Rural School? - Caixin

On May 24, at a county-level court in East China’s Jiangxi province, a teacher in his late 60s named Jiang Conglai was accused of molesting 15 female students under the age of 14. He faced two trials that day — one moral, one legal...

This wasn’t the first time Jiang has been accused of sexual assault. In July 1997, he was relieved from his post as general director of the Meilin middle school in Wuyuan county for molesting female students. After that, he was hired as a teacher at a primary school in the same county until his retirement in October 2011...

Caixin visits to multiple teaching points in Wuyuan county found that many of the teachers are only qualified as substitute teachers, a cost-saving measure, despite the fact that this practice was banned by the central government in 2005.

Elementary school principal in NE China detained for alleged sexual abuse of students - Global Times

The publicity department of Suizhong county, Liaoning, announced on Tuesday that the principal of Shuikou village elementary school surnamed Wang was arrested for allegedly raping and sexually abusing female students at the school and another principal surnamed Huang from Gaotai town central elementary school was dismissed for failing to report Wang's case to the authorities, The Beijing News reported.

7. Boss Yao Ming

CBA chairman Yao Ming wants to make Chinese relevant around the world |

"I'm old," Yao Ming explains, "so I drink hot water."...

Imagine if the responsibilities of NBA commissioner Adam Silver and USA Basketball CEO Jim Tooley fell upon one person ... in a country of 1.4 billion people ... where no one is immune to the government's heavy hand. Says Yao, the first non-Communistparty member to hold his position: "People may think I'm the Adam Silver here, but I'm really not. I have to report to my superior officer."..

Roughly half of Yao's hours are spent in another building, on the opposite side of Beijing, chairing the privatized CBA, the country's professional league. The rest of his time is spent in this office as president of the state-run basketball federation..

"If 10 years from now we still use Yao Ming to represent China, it's a failure on my job. We need a new star to rise up. Then I can sit behind desk. This is my goal."..

There's nothing wrong with cooperation," says Silver. "[Yao and I] agree there would be nothing greater than if, one day, the champion of the CBA played the NBA champion [in] a globally meaningful game. We're far away from that, but it's nice to have a long-term goal."

If only the NBA could lead the way for US-China engagement and a better relationship.

8. Beijing Bikini Ban

Not actually banned in Beijing as far as I know, that move could lead to significant social instability in the sweltering capital…But if it were, summer in the Jing would just not be the same…

Itsy-Bitsy Teeny-Weeny ‘Beijing Bikini’ Is Unseemly, City Says - Sixth Tone

On Tuesday, the eastern city of Jinan became the latest in China to target the so-called Beijing bikini with the release of a new guideline against “uncivilized behavior.” Issued by the local government’s Civility Department, the guideline takes aim specifically at bang ye, a Chinese term for the “topless old men” who can regularly be seen baring their midriffs in public.

A spokesperson for the Jinan Civility Department told domestic newspaper Beijing Youth Daily that those sporting the Beijing bikini are “uncivilized” and are tarnishing the city’s image. Anyone caught exposing their belly will be given a verbal warning — or named and shamed, in the event of repeat offenders.

Business, Economy and Trade

Services Sector Posts Weakest Expansion in Four Months: Caixin Survey - Caixin Global The Caixin China General Services Business Activity Index, which provides a snapshot of operating conditions in the country’s services sector, fell to 52 in June from 52.7 the previous month, the lowest reading since February...

More stimulus on way for economy - China Daily China will continue facilitating foreign investment and trade while stimulating consumption amid a complicated and slowing global economy, the Ministry of Commerce said on Tuesday.

More Yuan Bonds Sold Outside China Than in Any Quarter Since '14 - Bloomberg The second quarter saw selling of 80.8 billion yuan ($11.8 billion) of the bills, primarily in Hong Kong, where they’re known as dim sum bonds. The People’s Bank of China issued 50 billion yuan in the city in May and June, while Chinese and foreign companies sold much of the rest. The surge preceded a record 36 billion yuan of sovereign and corporate debt maturing offshore in July.

Yicai Global - BRICS Bank Taps Tsinghua University's David Li as DG and First Chief Economist Prof. Li, who was a member of the monetary policy committee at China's central bank for two years until March 2012, will play a major part in the NDB's research and analysis of economic, financial, infrastructure and development issues

Conglomerate Sanpower Runs Into More Trouble Repaying Its Debts - Caixin Debt-ridden conglomerate Sanpower Group Co. Ltd., which had purchased British department store chain House of Fraser, couldn’t come up with the money this week to meet investor demands to repay a bond early.

Revised demographic forecasts for China: key takeaways - Economist Intelligence Unit 1. Peak population will come earlier than we previously expected; 2. Relaxation of birth policy has had a positive but limited impact; 3. By 2030 China's old-age dependency ratio will have risen to nearly 30%; 4. By 2030 China's working-age population will have fallen by 70m; 5. Reverse migration is taking place; 6. Some city clusters will prosper, others will not

China's Ban on U.S. Pork Imports Isn't About Politics - Bloomberg The fundamental reason comes down to ractopamine, a feed additive that helps pigs bulk up with more lean meat in the final weeks before they’re sent for slaughter. It’s fed to between 60% and 80% of American pigs but is banned by China, Russia, and the European Union, citing concerns over its effect on human health.

People's Daily Asks if Facebook's Libra Will Open a Pandora's Box - China Banking News The People’s Daily opinion piece by Li Zheng (李拯) entitled “Facebook’s Libra – Will it Change the World or Open a Pandora’s Box?” (脸书的Libra:改变世界或打开魔盒) highlights the technical advantages afforded by the new cryptocurrency that Facebook has outlined in a recent white paper.

Politics and Law

越学越有紧迫感(声音) Bayinchaolu, the party boss of Jilin who rose up as a Youth League cadre but worked under Xi in Zhejiang, wrote on page 5 of People’s Daily about how he and other senior officials in Jilin enjoyed the recent campaign to study Xi Jinping thought.

Xi Focus: Self-reform: most distinctive character of world's largest ruling Party - Xinhua "The CPC is a very dynamic organization," said Martin Jacques, a China expert and senior fellow at Cambridge University. Martin Jacques noted that the CPC has been very successful at reinventing itself to move with the times, which is quite difficult for big parties like the CPC.

Foreign and Defense Affairs

It is wrong to demonise Chinese labour practices in Africa | Financial Times $$ Led by the School of Oriental and African Studies, researchers compared Chinese and non-Chinese manufacturing and construction companies in Angola and Ethiopia, two of the top African destinations for Chinese direct investment.// Chinese firms and employment dynamics in Africa: research findings | SOAS University of London

Zdeněk Hřib: the Czech mayor who defied China | The Guardian By refusing to expel a Taiwanese diplomat, the Prague mayor has joined the ranks of local politicians confronting contentious national policies

Indonesia asks China for special fund under Belt and Road: ministers - Reuters Indonesia has asked China to set up a special fund within its Belt and Road Initiative (BRI) for investment in Southeast Asia’s largest economy, after offering China projects worth $91 billion, government officials said on Wednesday.

Chinese vice president to address World Peace Forum - Xinhua July 8 and 9 at Tsinghua University in Beijing…Organized by Tsinghua University [and Yan Xuetong] in partnership with the Chinese People's Institute of Foreign Affairs, the forum is a high-level non-governmental seminar focusing on international security topics.

Senior Chinese military leaders meet with NZ defense minister - China Military 

Top political advisor calls on religious organization to promote world peace - Xinhua Wang [Yang]…made the remarks at a session of the China Committee on Religion and Peace (CCRP). Wang stressed the CCRP's role in introducing China's religious policies to the international community.

China, Bulgaria lift ties to strategic partnership - Xinhua Chinese President Xi Jinping held talks with Bulgarian President Rumen Radev here Wednesday, and they decided to lift state-to-state ties to a strategic partnership

中华人民共和国和保加利亚共和国关于建立战略伙伴关系的联合声明 — 中华人民共和国外交部 China “upgrades” its relationship with Bulgaria to “strategic partnership”. Interesting that in the statement China said it “supports Chinese companies in participating in the Varna port and other projects based on commercial principles.”

China's transport ministry raises security level for Chinese vessels in Malacca Strait - Reuters 

Will Hunter Biden Jeopardize His Father’s Campaign? | The New Yorker When I asked him about it, he told me that he had been given the diamond by the Chinese energy tycoon Ye Jianming, who was trying to make connections in Washington among prominent Democrats and Republicans, and whom he had met in the middle of the divorce. Hunter told me that two associates accompanied him to his first meeting with Ye, in Miami, and that they surprised him by giving Ye a magnum of rare vintage Scotch worth thousands of dollars... Hunter offered to use his contacts to help identify investment opportunities for Ye’s company, CEFC China Energy, in liquefied-natural-gas projects in the United States. After the dinner, Ye sent a 2.8-carat diamond to Hunter’s hotel room with a card thanking him for their meeting.

Pentagon: S. China Sea Missile Test Violated Xi Militarization Pledge "Of course the Pentagon was aware of the Chinese missile launch from the man-made structures in the South China Sea near the Spratly Islands," Lt. Col. Dave Eastburn, a Pentagon spokesman, told the Washington Free Beacon. "What's truly disturbing about this act is that it's in direct contradiction to President Xi's statement in the Rose Garden in 2015 when he pledged to the U.S., the Asia-Pacific region, and the world, that he would not militarize those man-made outposts,"

White House refuses to say whether Trump, as he promised Trudeau, raised issue of detained Canadians with Xi - The Globe and Mail 

Ursula von der Leyen nominated to lead European Commission – but will she be tougher on China? | South China Morning Post in Chinese diplomatic circles there was scepticism about her potential ascent, pointing to her interview with the German newspaper Die Zeit in January. In the interview, she said China “kindly ensnares” Europe, meaning that “we often overlook how consistently it pursues its goals – and how cleverly”.

Ursula von der Leyen: "Die Bundeswehr ist nie allein unterwegs" | ZEIT ONLINE The interview, for those who can read German

Video Surveillance and Cybersecurity (Part Two): Chinese cyber espionage is a real threat Chinese surveillance giant Hikvision has sold thousands of security cameras in South Africa and soon Joburg’s suburbs will see an unprecedented increase of Hikvision’s presence…Unlike the US, however, South Africa’s State Security Agency – with its own shady past – has enjoyed a close relationship with China’s security forces. Daily Maverick delved into the details of the US ban and discovered chilling implications for South Africans.


Retired Taiwanese generals can lose pension over China activities | Taiwan News Retired generals can lose their pension if they take part in political activities in China, according to rules approved by the Legislative Yuan Wednesday (July 3). The appearance of 32 retired military officers from Taiwan at a Sun Yat-sen memorial event in China in November 2016 and their singing the communist country’s national anthem caused outrage on the island, setting the wheels in motion to adopt a tougher approach. // Question: Why was this ever allowed?

Tech and Media

Chinese tech giants Baidu, Huawei join efforts to develop AI - Global Times 

Smart home product firm left personal data for 1 million users unsecured · TechNode The database, which is owned by Shenzhen-based smart home product maker Orvibo, includes an excess of 2 billion logs including user names, email addresses, and passwords to precise geolocations, according to a report by the cybersecurity research firm vpnMentor.

Briefing: Tencent forms new department for Nintendo Switch partnership · TechNode The two openings are for a business analyst, responsible for analytics and insights, and a web front-end developer.

Tencent, Paytm Plan to Invest $100 Million in MX Player - Bloomberg 

Energy, Environment, Science and Health

Kazakhstan to divert some oil flows from Europe to China - Reuters Kazakhstan plans to increase oil exports to China to 6-7 million tonnes a year from just 1 million tonnes at the expense of shipments to Europe, starting from the second half of 2020, Deputy Energy Minister Aset Magauov told Reuters.

三峡集团辟谣“大坝变形”:谷歌卫星图会有偏差|卫星图|谷歌|算法_新浪新闻 Three Gorges Corp refutes rumors that the Three Gorges Dam has changed shape, blames Google Maps Satellite imagery

Scientists discover highest energy cosmic gamma rays in Tibet - Xinhua A joint research team made up of Chinese and Japanese scientists has discovered the highest energy cosmic gamma rays ever observed from an observatory in Tibet, opening a new window to explore the extreme universe.

Tibet combats severe drought using artificial rain - Xinhua 

World’s Largest Trash Incinerator Starts Running in Shanghai - Caixin Global 

Jobs and Events

Correspondent, International Desk, Shanghai | NPR Careers 


教育部会同公安部约谈有关搜索引擎网站 规范整治“志愿填报指导”信息服务 - 中华人民共和国教育部政府门户网站 The ministry of education and ministry of public security met with Baidu executives and told the company to take down scam information about college entrance exams from its search engine.

Rural and Agricultural Issues

Prevention and control of African swine fever urged - The State Council has issued a circular urging efforts to prevent and control African swine fever on multiple fronts. Related departments must put more emphasis on epidemic prevention on pig farms, especially at breeding farms and large-scale pig farms, and encourage farm owners to monitor on their own to detect and deal with hidden infections in a timely manner, the circular said. //The circular-国务院办公厅印发《关于加强非洲猪瘟防控工作的意见》--时政--人民网

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