Just a quick and dirty newsletter today.
THE ESSENTIAL EIGHT *
1. Banks forced to cover tracks of China’s forex regulator | Reuters SAFE, which is part of the People’s Bank of China (PBOC), is insisting in oral instructions to dozens of banks that they don’t reveal its role in such restrictions, six bankers said, which was damaging their relationships with clients since they were unable to explain why they were turning away business. In a statement (外管局上海市分局：未对汇兑和跨境收付采取新的管制措施) late on Wednesday, SAFE’s Shanghai branch said it had not adopted new measures to control forex conversions and cross-border payments, but had urged banks to strengthen checks on compliance and deal authenticity. SAFE also said a media report about it telling banks to keep its instructions secret was “inaccurate, and is misleading public opinion and disturbing normal operations of the Forex market”.
2. China to merge state media for stronger voice in financial news | Reuters The State Council, China’s cabinet, has given Xinhua permission to acquire and consolidate China Securities Journal, Shanghai Securities News, Economic Information Daily and Xinhua Publishing House and launch a new company under the banner China Fortune Media Corporation Group. The move aims at “deepening the central authority’s reforms of the cultural system” and “increasing mainstream media’s influence in the area of financial information,” Xinhua said in a notice. The new financial news-focused company will be launched in Beijing on Thursday next week, it said. // Comment: It also gives more central control over financial information reporting 新华社组建中国财富传媒集团 整合中证报上证报和经参等
3. Bitcoin (BTC) price crashed because of notices issued by the People’s Bank of China — Quartz The comedown traces back to recent comments from the People’s Bank of China, which met with representatives of major bitcoin exchanges in China prior to issuing a pair of notices. The notices set off a swirl of fresh rumors that Beijing is planning further regulatory action regarding mainland bitcoin exchanges, which account for the majority of global bitcoin trading volume.
4. Trump’s China trademarks risk constitutional crisis: experts-AFP The businessman turned politician already holds at least 72 marks in China, part of an extensive, international portfolio that forms a central pillar of his enormous wealth. He filed for an additional 42 in April, almost a year after declaring his presidential run, Chinese government data shows, and three more around two months later, having effectively clinched the Republican nomination. All were filed in his own name and registered at his Trump Tower address in New York. The approval process typically takes 12 to 18 months, so Chinese authorities will only make their decision long after he takes office later this month.
5. Full text: China’s Policies on Asia-Pacific Security Cooperation – Xinhua China’s State Council Information Office on Wednesday issued a white paper on China’s policies on Asia-Pacific security cooperation. Following is the full text:
6. Guilty by association: China targets relatives of dissident exiled in Canada – The Globe and Mail His family believes his real crime in the eyes of Chinese authorities is being the son of Xie Weidong, 60, a former Supreme People’s Court Justice who moved to Canada in 2014 and has been an outspoken critic of China’s justice system. Chinese authorities accuse the elder Mr. Xie of corruption. But bringing him back from Toronto would also silence him. Mr. Xie has refused, saying he will be tortured if he goes. So authorities have targeted his relatives, an increasingly common tactic in China as escalating government attempts to quash dissent and corruption test the limits of old methods of asserting control, such as jailing and sometimes torturing those accused of crimes.
7. PLA restructures to meet new challenges – China Daily In November 2013, following nearly a year of preparations, a plenary session of the Central Committee of the Communist Party decided to reform the national defense system and the PLA. In March the following year, the CMC established a group under Xi’s control tasked with drawing up a roadmap for reform and guiding its implementation. In July 2015, an overall reform plan was approved by the top Party and military authorities. The decision remained unpublicized until September 3, 2015, when a parade was held to mark the 70th anniversary of the end of World War II and the War of Resistance Against Japanese Aggression (1937-45).
8. Korea, US reaffirm THAAD deployment-Korea Times Incoming U.S. National Security Advisor Mike Flynn and South Korea’s National Security Office chief, Kim Kwan-jin, have reaffirmed that the two nations’ plan to deploy an advanced U.S. anti-missile system here will go as planned despite China’s growing protest. The two reached the agreement during a meeting in Washington, Monday, according to Kim. The meeting focused on ways to move bilateral relations forward and how to deal with North Korea with Donald Trump scheduled to take office as the U.S. president, Jan. 20.
Related: China steps up retaliation on THAAD, S. Korea stuck with few options: experts – Yonhap The Seoul government, however, seems to have few countermeasures at its disposal, spawning concerns that it could face “costly” consequences if it fails to handle the situation in an effective manner, observers claimed. On Tuesday, media reports showed that Chinese authorities have refused to approve imports of massive amounts of South Korean cosmetics as they are said to not meet their trade requirements. This was deemed the latest in a series of measures apparently aimed at punishing Seoul for its push to install a Terminal High Altitude Area Defense (THAAD) battery within this year.
Related: The Most Important Korea Story of 2017: China, South Korea and THAAD | PIIE Last week, the Ministry of National Defense revealed that the Chinese have unilaterally cancelled nine bilateral military meetings and talks since the THAAD deployment was announced, including the annual Vice-Ministerial talks, and has ignored any and all communications from the ROK MND (YTN (link is external)). Now there are even reports (link is external) of direct military action. Between 10am-3pm on January 9th, a dozen Chinese military aircraft, including a bomber, early warning radar craft, and intel collection platform violated the Korea Air Defense Identification Zone (KADIZ). The ROK dispatched fighter jets in response and sent an immediate communication via a ROK-PRC military hotline but the communication was ignored. The ROK government allegedly tried to suppress media reports of this incident but failed to maintain the media embargo because Japanese media had jumped on it.
Related: Chinese tourism to South Korea booms despite missile shield spat There were more than 3.8m Chinese tourist entries into South Korea in the four months following Seoul’s July decision to host the US’s Terminal High Altitude Area Defence system, a 27 per cent year-on-year increase. Chinese state media had said visitor numbers would plummet. // Comment: Close, cheap, clean, good shopping
BUSINESS, ECONOMY AND TRADE *
对做好2017年经济工作的几点认识（经济形势理性看）–财经–人民网 Comment: director of the National Bureau of Statistics of China and deputy director of the National Development and Reform Commission Ning Jizhe in 1.12.17 People’s Daily on key points for 2017 economic work
Vice Chairman of Chinese Insurance Company Taken Into Custody – Caixin Insiders told Caixin that rumors that Wang Yincheng was being investigated had been circulating inside the company for nearly a year. They started after a team from the Communist Party’s Central Commission for Disciplinary Inspection (CCDI) finished its examination of the PICC in 2015. But Wang, who is also president of the state-owned insurance giant, continued to work at the company until being taken away from his office in Beijing on Monday.
China Sets June Deadline to Stamp out Shoddy Steel Manufacturers – Caixin China aims to eliminate all substandard steel mills by the end of June, a senior official said, in a move expected to further push up prices that are already seeing an upward trend after the central government’s overcapacity cut squeezed supplies. The central government has sent supervisors to different provinces to ensure that all producers of so-called ditiao steel be closed by June 30, said Lin Nianxiu, a vice chairman of the National Development and Reform Commission, China’s top economic-planning agency, at a meeting on Monday.
Outlook for 2017: Paradigm Shift | KKR Importantly, though, we strongly believe that the seeds of today’s discontent actually were planted in 2001, driven by China’s outsized commitment to fixed investment after it joined the WTO as well as rapid adoption of the Internet (and the subsequent transparency/disruption it has created). One can see the exponential, simultaneous increase in both China’s fixed investment relative to its labor ratio and global Internet adoption in Exhibit 2, both of which materially accelerated the significant displacement of the traditional DM labor force. Thereafter, central banks began to overcompensate for this structural downturn in wage inflation by inflating prices of financial assets, with the explosive surge in monetary stimulus that occurred in the aftermath of the Great Financial Crisis only exacerbating this trend (Exhibit 4).
New York Developer Lobbies Against Changes to Immigrant Investor Program – WSJ Related Cos., a developer of massive mixed-use projects, has waged an aggressive campaign to head off proposed changes to the so-called EB-5 program in an apparent effort to keep low-cost money flowing to luxury urban projects such as its $20 billion Hudson Yards development in Manhattan. // Comment: Does the Related Cos still have a dedicated employee in Shanghai selling these visas?
China’s $3.8 Trillion Wealth Products Reel Amid Bond Rout – Bloomberg “The government’s recent comments on preventing financial risks sent a signal that liquidity is set to be tightened and there’s no chance of a bull market,” said Oliver Rui, professor of finance at the China Europe International Business School in Shanghai. “So a natural reaction is to dump bond holdings as soon as you can, especially for those with high leverage.”
Swiss Watchmaker Hires Papi Jiang to Court Chinese Millennials | Sixth Tone China’s most outspoken, most beloved internet celebrity becomes unlikely brand ambassador for Jaeger LeCoultre.
Regulatory Breaches at China’s Trading Platforms Trigger Fresh Round of Reviews – Caixin A task force led by the China Securities Regulatory Commission (CSRC) has found that a number of exchanges have engaged in a series of malpractices recently, the securities regulator said Tuesday night. The CSRC did not name the exchanges. “Malpractices at some exchanges have risen again from the ashes, and they have used a smorgasbord of tricks to break laws and violate regulations,” according to the statement.
China Increases Liquidity Support to Banks as Major Holiday Nears – Caixin The moves were taken to help banks meet greater demand for cash, which typically surges 10 to 12 weekdays before the Spring Festival holiday, according to Guotai Junan Securities. The holiday, when people need money for travel and food, gifts and cash-filled “red packets” for family gatherings, begins on Jan. 27. Despite the injections, liquidity pressures remain large because banks need to return this month a total of 435.5 billion yuan they borrowed earlier from the PBOC through medium-term lending facilities, said Citic Securities bond analyst Ming Ming
China’s 2% Inflation Feels More Like 20% to Big-City Renters – Bloomberg Her pain hasn’t shown up in the data — nationwide rentals rose a mere 2.9 percent in December. Residential costs account for about 20 percent of CPI, covering rent and management fees but not buying an apartment, according to Oversea-Chinese Banking Corp. in Singapore. Food accounts for 30 percent of the basket, with the rest including communications, travel and services. “China inflation is never really that accurate, and people have been criticizing it as underestimating price pressure,” said Wang Qian, chief Asia-Pacific economist at Vanguard Investment Hong Kong Ltd.
降温：北上深楼市新格局_第一财经 Comment: China Business News on the cooling residential property markets in Beijing, Shanghai and Shenzhen in the wake of latest round of administrative measures
中共中央办公厅 国务院办公厅印发《关于创新政府配置资源方式的指导意见》中央有关文件中国政府网 新华社北京1月11日电 近日，中共中央办公厅、国务院办公厅印发了《关于创新政府配置资源方式的指导意见》，并发出通知，要求各地区各部门结合实际认真贯彻落实。 《关于创新政府配置资源方式的指导意见》全文如下。
Better regulated regional market to nourish business – Xinhua China will enhance regulations for regional equity market to boost its role in diversified financing channels for the country’s medium-, small- and micro-sized businesses and encourage private investment. The State Council’s executive meeting on Wednesday chaired by Premier Li Keqiang approved a set of regulations updates. The new regulation makes clear regional equity market’s mandate as financing channels for local small businesses, and puts better specified requirements on market operators and investors.
POLITICS AND LAW *
Over 6,200 CPC members held accountable for undesirable work styles – Xinhua Over 6,200 members of the Communist Party of China (CPC) were held accountable for undesirable work styles from January to November last year, the top anti-graft body said Wednesday.
农民工河北讨薪腿被打断 工人称人大代表现场指挥打人_腾讯网 Comment: Did a local Hebei NPC official order the beating of migrant construction workers who were demanding back wages?
甘肃省委常委、副省长虞海燕涉嫌严重违纪接受组织调查—中央纪委监察部网站 Comment: Gansu Deputy Governor Yu Haiyan under investigation
FOREIGN AND DEFENSE AFFAIRS *
China’s Xi to promote globalization at Davos, not ‘war and poverty’ | Reuters Jiang Jianguo, head of the State Council Information Office, told a symposium hosted by the World Trade Organization in Geneva that President Xi would go to Davos to push for development, cooperation and economic globalization in order to build “a human community with shared destiny.” “With the rise of populism, protectionism, and nativism, the world has come to a historic crossroad where one road leads to war, poverty, confrontation and domination while the other road leads to peace, development, cooperation and win-win solutions,” Jiang said.
Rex Tillerson on China in Opening Statement for Senate Confirmation | ChinaFile We should also acknowledge the realities about China. China’s island-building in the South China Sea is an illegal taking of disputed areas without regard for international norms. China’s economic and trade practices have not always followed its commitments to global agreements. It steals our intellectual property, and is aggressive and expansionist in the digital realm. It has not been a reliable partner in using its full influence to curb North Korea. China has proven a willingness to act with abandon in pursuit of its own goals, which at times has put it in conflict with America’s interests. We have to deal with what we see, not with what we hope. But we need to see the positive dimensions in our relationship with China as well. The economic well-being of our two nations is deeply intertwined. China has been a valuable ally in curtailing elements of radical Islam. We should not let disagreements over other issues exclude areas for productive partnership.
开启美中关系的新篇章（国际论坛） Comment: US Ambassador Max Baucus on p4 of 1.12.17 People’s Daily pens a goodbye, “starting a new chapter in US-China relations”. Too bad Beijing has not given the market opening for US beef he so wanted
China receives imagery from high-resolution remote sensing satellites – Xinhua Tourists were seen visiting the Potala Palace in Tibet Autonomous Region in the captured images. The satellites, SuperView-1 01/02, on the back of a Long March 2D rocket lifted off from the Taiyuan Satellite Launch Center in Shanxi Province . The two are operating at an altitude of 500 kilometers, with a panchromatic resolution of 0.5 meters and multispectral resolution of two meters
Mysterious outlets polish N.Korea image using Chinese-registered domains – Global Times Youku.com, China’s biggest online video sharing website, has allegedly become the latest addition to the North Korean authorities’ range of overseas online platforms used to spread propaganda materials in an effort to improve the image of North Korea around the world. On youku.com, UriminzokkiriTV, an account run by North Korean propaganda website uriminzokkiri.com, has uploaded over 14,000 videos in the three years since the account was first registered.
RFA: China Turns Back Thousands of Myanmar Refugees Trying to Cross Border to Safety About 4,000 Myanmar refugees who attempted to flee across the border to safety in China after mortar shells fell in two internally displaced persons camps in Kachin state’s Waingmaw township on Wednesday were turned away by Chinese authorities, leaving them with nowhere to go in the conflict zone, a Kachin religious official said.
说媒｜《解放军报》改版，改出了什么？ – 中国军网 新报头、新版头、新版面、新栏目、新文风……军报改版十天来亮点频现，引发军内外读者热议。图片更有冲击力了、文章更简短了，语言更接地气了；军营观察版有深度有看点、科技周刊有灵魂有态度……
HONG KONG, MACAO AND TAIWAN *
Taiwan Responds After China Sends Carrier to Taiwan Strait – The New York Times Liu Zhenmin, a Chinese vice foreign minister, said on Wednesday that the Taiwan Strait was an international waterway and that it was normal for the Liaoning to pass though it. The passage would not have any effect on cross-strait relations, he said in remarks carried in the Chinese news media. Mark C. Toner, a State Department spokesman, told reporters in Washington in response to a question about the Liaoning’s passage through the strait that the United States “wouldn’t have a problem” with countries sailing their vessels in international waters as long as it was done in accordance with international law. It also was not the first time the Liaoning had sailed through the strait: It passed through in November 2013 on its way to the South China Sea after having been commissioned only the year before.
Taiwan scrambles jets, navy as China aircraft carrier enters Taiwan Strait – Channel NewsAsia Taiwan scrambled jets and navy ships to “surveil and control” the passage of the Chinese ships north through the body of water separating Taiwan and China, Taiwan defence ministry spokesman Chen Chung-chi said. Taiwan military aircraft and ships have been deployed to follow the carrier group, which is sailing up the west side of the median line of the strait, he said.
TECH AND MEDIA *
China Watch Presented by China Daily Comment: China Watch by China Daily advertorial, in the Wall Street Journal. How long has the WSJ been taking money from Chinese Communist Party propaganda organ? Washington Post has been doing it for years, so far I believe the New York Times has not, not sure which other major US papers take the CCP propaganda ad dollars
Security vulnerability beleaguered Alipay’s social networking foray-Technode Alipay got busy patching the flaw after receiving complaints from China’s internet users. Many found they could login into an account with just some personal information and didn’t require a password to make payments.
Amazon, Microsoft Face Tough New Limits on China Cloud Market — The Information Amazon Web Services and Microsoft’s cloud business face tough new restrictions on their business in China, drastically limiting their roles in their Chinese operations, as a result of proposed new Chinese government rules, lawyers and service providers say. Draft rules issued by the government in late November, but which have received little attention in the media, would allow only Chinese cloud providers to sign contracts with clients. The rules ban foreigners from using their own trademarks and branding to market services, according to a report by law firm Covington & Burlington.
China sets up first national online film and video critics committee – Global Times To handle the increasing challenges and criticisms from the Internet, China’s first national online film and video critics committee was established in Beijing Wednesday, just weeks after a controversy over the negative ratings some films were given on movie review websites. Administered by the China Film Critics Association (CFCA), an organization under the State Administration of Press, Publication, Radio, Film and Television, the newly established committee gathered 19 cultural experts and movie critics as its members with the aim to change the chaotic film reviewing situation in China.
Alibaba apologizes for posting incomplete maps of China, US on Twitter – People’s Daily Online The illustration was posted on Alibaba’s official Twitter account to explain the trade opportunities between small businesses in the U.S. and customers in China. However, the maps soon drew criticism for excluding Alaska and Hawaii on the U.S. side, and Taiwan and the South China Sea islands on the Chinese side.
SOCIETY, ART, SPORTS, CULTURE AND HISTORY *
Corruption Runs Through Flood-Ravaged Yangtze Village | Sixth Tone This is the second in a series of articles about a town struggling to survive in a flood zone along the Yangtze River.
Eat, pray, love the Communist Party: a road trip through Tibetan lands, guided by China – LA Times We drove uphill and deeper into the Aba Tibetan and Qiang Autonomous Prefecture, an area of southwestern China’s Sichuan province, adjacent to Tibet, where more than half the residents are Tibetan. There were five of us foreign journalists, packed into two minibuses along with camera crews, interpreters and scores of Chinese journalists, all seated shoulder to shoulder with the people in control: party officials from Sichuan and Shanghai. We passed scattered villages, high-altitude grasslands and towering peaks.
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *
Government Orders Chinese Air Quality App to Limit Readings | Sixth Tone During spell of heavy smog, Air Matters told by provincial environmental authorities not to display pollution levels above 500.
New species of gibbon discovered in China | Environment | The Guardian The research team, led by Fan Peng-Fei from Sun Yat-sen University in China, first suspected that the gibbons they were studying in Gaoligongshan nature reserve in Yunnan province might be different because of subtle differences in the typical facial markings of white eyebrows and beards.
网红教师辞职专教网课 曾被指有偿补课遭举报|教育公平|争议|冲击_新浪新闻 2013年，曾在多地担任语文教师的史金霞，首次接触到了网络教学。三年多来，她通过在线教育平台讲授文学课程，积累了相当的人气，被称为“网红教师”。名利双收的同时，史金霞充满“市场化”的行为，与其公立学校教师身份，一度引发社会争议，并有人因此以其涉嫌“有偿补课”为名，将之举报。 去年11月，史金霞从工作6年的苏州星海实验中学辞职，离开站了23年的讲台，从此专职网络授课。在接受重案组37号（微信ID：zhonganzu37）采访时，史金霞称，放弃公办教师身份，并非因为遭到举报，而是希望“换一种模式”，并影响更多人。
Construction of CBD area subway line may begin this year – China Daily Line 28, the highest numbered subway line in Beijing, will be 6.5 kilometers long, including 8 stations, and will cross the CBD area from north to south, connecting many other subway lines, according to the EIA report published by China Academy of Railway Sciences.
Beijing has 350 km subway lines under construction in 2017 – Xinhua The municipal government of Beijing said on Wednesday that 20 subway lines or sections, spanning over 350 kilometers, will be under construction in 2017. Construction of two new subway lines, the 6.5-kilometer CBD line and the 6.1-kilometer branch line of the Yanfang Line, China’s first driverless line, will kick off this year. Three subway lines, the Yanfang line, Xijiao line and S1 line, with a total length of 34.6 kilometers will open this year.
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