Raids on foreign businesses; PLAN Sudan evacuation; China-Central Asia Summit; US-China; Football corruption

Note: The May 1 Labor Day Holiday starts Saturday April 29th and runs through May 3rd. Barring something unexpected I will not be publishing the regular newsletter as there will not be much going on. I will be in your inboxes tomorrow for the weekly discussion thread, as well as what I assume will be the readout from and discussion of the April monthly Politburo meeting, which if precedent holds should focus on the economy.

This is the first “normal” Labor Day Holiday since before the pandemic, so expectations are high for lots of travel and consumption.

Summary of the Essential Eight:

1. More on the raids on foreign firms - Lingling Wei of the Wall Street Journal is out with an interesting piece about the raids, she reports that a “central tenet of the effort is the desire to more tightly control the narrative about China’s governance and development, and limit the information collected by foreign companies such as auditors, management consultants and law firms that could influence how the outside world views China”. So send us your money, but only we can tell you what to ask for, say or think? That is not a recipe for encouraging foreign investment. I am now hearing of more raids since the Bain ones, expect that news will hit the media in the next few hours. These are not isolated raids but part of a bigger, chilling campaign. As I wrote yesterday we should all be paying more attention to the concept ""better coordinate development and security 更好统筹发展和安全"

2. PLA Navy Sudan evacuation operation - The PLA sent two vessels to pick up PRC citizens and some people from other countries at a port in Sudan. One of the PLAN warships in the Sudan evacuation operation had a banner hanging it off that says “习主席派军舰接大家回家 Chairman Xi sent naval vessels to take everyone home”:

3. China-Central Asia Summit in May - The first China-Central Asia Summit will meet in May in Xi’an. How does Russia feel about this?

4. US NSA Sullivan speech - National Security Advisor Jake Sullivan gave a speech today on "renewing American economic leadership". It was not solely about the PRC but China loomed large and he did make some interesting comments, and there did not seem to be much divergence from the speech Treasury Secretary Yellen gave last week. He gave no details but again some signaled some type outbound investment screening is coming. He said the US is "for de-risking and diversifying, not decoupling", echoing European Commission President von der Leyen.

5. More US-China - After his recent travels to the PRC, Ray Dalio is increasingly worried war is possible, and the US will be to blame.

6. Ya Ya the panda returns home - Even panda diplomacy is failing.

7. Chips - Is Germany really considering limiting the export of chemicals needed to make semiconductors? How could BASF agree to this given their massive business and investments in the PRC?

8. Football corruption mess going to get worse - Caixin has a long story on the latest scandal in the PRC football world. Caixin reports that “the investigation this time involves a “particularly wide” range of teams and players and that the amount of money involved may exceed the last crackdown”. That sounds like just the kind of environment FIFA likes, so will they award the World Cup to the PRC in the next selection round?

Thanks for reading.