Bad day for Huawei; Liu He in DC

It is a gray day here at wintry Sinocism HQ. Among the things on my radar today:

  • Liu He arrived in DC Monday, just hours after the US announced two sets of indictments against Huawei, the former CFO Meng Wanzhou and at least two other defendants whose identities were redacted. One of the the indictments says Huawei founder Ren Zhengfei lied to FBI agents, so there is speculation he could be one of the other two;

  • The deadline for the US to submit a formal extradition request to Canada for Meng Wanzhou is the end of today and the US confirmed it will make the submission;

  • The US-China trade talks formally start Wednesday. The timing of the indictments may have been set to send a hawkish message on the eve of the talks, it may have just fit the Canadian judiciary schedule, or it may be a bit of both;

  • There are accusations the charges against Huawei are politicized, and maybe they are, though from reading the indictments it sure looks like they were caught red-handed. If the US indictments of Huawei are political, was the decision for all those years not to indict, given the preponderance of evidence, also political?

  • Apple will report earnings after the US markets close today, expect lots of focus on any comments about China, and questions about how the Huawei indictments and the broader campaign to block Huawei from 5G networks in US ally countries may affect Apple’s business in China.

This has been the Year of the Downward Dog in US-China relations, but unless pigs start flying it is hard to see any arresting of the comprehensive, downward trajectory in the relationship in the Year of the Pig (sorry, couldn’t resist).

Over the last 15 months it has become the clear the best driver of growth for Sinocism has been recommendations from you, my dear readers, to your friends, colleagues and contacts.

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The Essential Eight

1. Huawei’s bad day 

Justice Dept. charges Huawei with fraud, ratcheting up U.S.-China tensions - The Washington Post:

Top U.S. law enforcement officials, including acting attorney general Matthew G. Whitaker and FBI Director Christopher A. Wray, held a news conference in Washington to announce the charges.

“The criminal activity in this indictment goes back 10 years and goes all the way to the top of the company,” Whitaker said...

According to the indictment and a Justice Department news release, at least two other defendants have been charged but not yet apprehended. Their identities remain under seal. The indictment also said that the FBI in 2007 interviewed Ren, the founder, and that he “falsely stated” that Huawei did not conduct activity in violation of U.S. export laws. It is not clear whether he has been charged.

US indictment against Huawei shows FBI interviewed founder in 2007, reviewed text from Meng Wanzhou’s electronic device | South China Morning Post:

The 25-page indictment, with parts redacted, said that Huawei’s founder, identified as “Individual-1” and “founder of Huawei”, told FBI agents in July 2007 then that the company was compliant with and “did not conduct any activity in violation of US export laws”. Ren Zhengfei is the founder of Huawei.

“Individual-1” also told agents that Huawei had not dealt directly with any Iranian company and he believed Huawei had sold equipment to a third party that was possibly in Egypt, which then sold equipment to Iran, according to the indictment...

The statements by “Individual-1” in the interview with FBI agents was listed as an overt act – known as an action that can be introduced as evidence of participation in a crime – that Huawei committed while trying to defraud the US.

Foreign Ministry Spokesperson Geng Shuang's Remarks on the US Indictments of Huawei:

A: China is highly concerned about the US Department of Justice's charges against Huawei and its Vice Chairman and CFO Ms. Meng Wanzhou. The Chinese government has all along urged Chinese companies to conduct international economic cooperation on the basis of complying with relevant laws and regulations. At the same time, China asks that all countries provide a fair, just and non-discriminatory environment for the normal operations of Chinese companies.

For some time, the US has been using national power to tarnish and crack down on specific Chinese companies in an attempt to strangle their lawful and legitimate operations. Behind such practices are deep political intentions and manipulations. We strongly urge the US to stop its unreasonable bashing on Chinese companies including Huawei, and treat them objectively and fairly. China will also continue to uphold the lawful and legitimate rights and interests of Chinese companies.

Regarding the Meng Wanzhou case, China has made clear its stern position many times. The US and Canada abused their bilateral extradition agreement and took compulsory measures against a Chinese citizen for no reason. Such actions seriously violate the legitimate rights and interests of the Chinese citizen. Once again we urge the US to immediately withdraw its arrest warrant for Ms. Meng Wanzhou, refrain from making a formal extradition request, and stop going further down the wrong path. We also urge Canada to take China's solemn position seriously, immediately release Ms. Meng Wanzhou and ensure her lawful and legitimate rights and interests, and stop risking its own interests for the benefits of the US.

Huawei lawyer says CFO Meng a 'hostage' after U.S. presses charges | Reuters:

Her lawyer Reid Weingarten, partner at Steptoe & Johnson, pointed to “complex” Sino-U.S. relations.

“Our client, Sabrina Meng, should not be a pawn or a hostage in this relationship. Ms. Meng is an ethical and honorable businesswoman who has never spent a second of her life plotting to violate any U.S. law, including the Iranian sanctions.”

Comment: Impressive that Weingarten has such a grasp of how she has spent every second of her life...

The Huawei indictments-Chinese Telecommunications Device Manufacturer and its U.S. Affiliate Indicted for Theft of Trade Secrets, Wire Fraud, and Obstruction Of Justice | OPA | Department of Justice:

A 10-count indictment unsealed today in the Western District of Washington State charges Huawei Device Co., Ltd. and Huawei Device Co. USA with theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice. The indictment, returned by a grand jury on January 16, details Huawei’s efforts to steal trade secrets from Bellevue, Washington based T-Mobile USA and then obstruct justice when T-Mobile threatened to sue Huawei in U.S. District Court in Seattle. The alleged conduct described in the indictment occurred from 2012 to 2014, and includes an internal Huawei announcement that the company was offering bonuses to employees who succeeded in stealing confidential information from other companies.The full indictment (PDF) 

Chinese Telecommunications Conglomerate Huawei and Huawei CFO Wanzhou Meng Charged With Financial Fraud | OPA | Department of Justice:

A 13-count indictment was unsealed earlier today in federal court in Brooklyn, New York, charging four defendants,[1] including Huawei Technologies Co. Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, with headquarters in the People’s Republic of China (PRC) and operations around the world. The indicted defendants include Huawei and two Huawei affiliates — Huawei Device USA Inc. (Huawei USA) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng).

The defendants Huawei and Skycom are charged with bank fraud and conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, violations of the International Emergency Economic Powers Act (IEEPA) and conspiracy to violate IEEPA, and conspiracy to commit money laundering. Huawei and Huawei USA are charged with conspiracy to obstruct justice related to the grand jury investigation in the Eastern District of New York. Meng is charged with bank fraud, wire fraud, and conspiracies to commit bank and wire fraud. -The full indictment (PDF) 

Comment: The US was far into Huawei and its executives communications, for years...no doubt we are shown only a tiny sliver of what they have captured..

Huawei and China Have Limited Ways to Answer U.S. Charges - The New York Times:

Huawei’s Washington operations have undergone drastic turnover as it appears to rein in its sales ambitions in America and shift tactics in its relations with the government. In the second shake-up of its American leadership in less than a year, the company is replacing Regent Zhang, its head of government affairs in Washington, with Joy Tan, currently its head of global communications.

The broad language of the Justice Department’s indictments suggests that other Huawei leaders, including Mr. Ren, a former officer in the People’s Liberation Army, might wish to exercise caution while traveling to countries that have an extradition treaty with the United States...

Ms. Tan, Huawei’s incoming head of government affairs in Washington, has for years played a key role in the company’s media relations. She will be tasked with engaging an American administration that has grown hawkish on China

Comment: The indictments and the broader campaign to push back on Huawei are good news for some law firms, communications firms and lobbyists…

The Huawei Case Sparks Anti-American, "Support Huawei" Sentiments on Weibo | What's on Weibo:

Among hundreds of comments, many netizens express their apparent belief that the United States is using the judicial system in a battle that is actually politically motivated, and that China’s rise as a competing technological power plays a major role in this issue.

“America has no confidence in its own technological power anymore, and has come to a point of such weakness that China’s technological strength is frightening to them,” one commenter named ‘Battle Wolf Wang Jie’ (@战狼-王杰) said.

“The goal of the US clearly is to suppress Huawei and its 5G technology, it is a fight over leadership,” one commenter wrote.

One popular Weibo tech blogging account (@科技阿宽) described the US as “a cornered dog jumping over a wall” (“狗急跳墙”), a Chinese idiom for describing desperate people resorting to desperate measures. This idiom was also used by other Weibo users commenting on the Huawei issue.

Axios - What Washington is saying about Huawei:

Sen. Tom Cotton (R-Ark.) said lawmakers should "impose the death penalty on Huawei, which is precisely what it deserves for violating our sanctions."

Cotton means a corporate death penalty. He backs legislation to ban U.S. exports of technology to Chinese telecom companies including Huawei and ZTE, itself a recent subject of U.S. penalties for violating trade sanctions.

Huawei attracts most graduates from top universities - Global Times:

Last year, Chinese tech giant Huawei was the top choice for graduates of four of China's elite universities, namely, Tsinghua University, Peking University, Shanghai Jiao Tong University and Fudan University, China Securities Journal reported Monday.

The company recruited a total of 582 graduates from the four universities, the report said

Worth remembering that Huawei is not a loved company in certain Canadian circles because of the downfall of Nortel. - How Chinese hacking felled telecommunication giant Nortel - AFR in 2014

The hackers had changed their attack model from remote access to using employees’ computers to open remote encrypted connections out to systems in China. They did this using a program that gave them complete desktop control of the employee’s PC.

The documents accessed contained confidential information about Nortel’s business plans and intellectual property. Among the names of the more than 1400 documents accessed between January and June 2004 were: the chief technology officer’s proposal for 2003, road map values and challenges to Nortel, large scale integration, causation effects and optical fibre systems, and switching highly integrated optical circuits.

Huawei Is Blocked in U.S. But Its Chips Power Cameras Everywhere - Bloomberg:

Most of the focus is on Huawei telecom gear that helps run communications networks all over the world. But chips from the HiSilicon unit are also sparking concern because they power about 60 percent of surveillance cameras. That means Chinese chips process video from cameras that sit in places as varied as pizzerias, offices and banks across the U.S.


2. US-China trade

Statement from the Press Secretary | The White House:

Today, President Donald J. Trump announced that the United States will welcome an official delegation from China for a series of meetings from January 30 to 31, 2019, to discuss the trade relationship between the two countries.

For the United States, the trade discussions will be led by United States Trade Representative (USTR) Robert Lighthizer and include Secretary of the Treasury Steven Mnuchin, Secretary of Commerce Wilbur Ross, Assistant to the President for Economic Policy Larry Kudlow, and Assistant to the President for Trade and Manufacturing Policy Peter Navarro. The United States principals will be accompanied by senior officials from the White House, USTR, and the Departments of Agriculture, Commerce, State, and the Treasury.

U.S.' Mnuchin expects progress in 'complicated' China trade talks | Reuters:

Mnuchin, speaking at a White House news conference, said the two sides were trying to tackle “complicated issues,” including a way to verify enforcement of China’s reform progress in any deal with Beijing.

The Treasury chief, who will be among the top U.S. officials at the negotiating table, said Chinese officials had acknowledged the need for such a verification mechanism.

“We want to make sure that when we get a deal, that deal will be enforced,” Mnuchin said. “The details of how we do that are very complicated. That needs to be negotiated. But IP (intellectual property) protection, no more forced joint ventures, and enforcement are three of the most important issues on the agenda.”

Chinese vice premier arrives in Washington for economic, trade consultations - Xinhua:

Liu, also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, leads a delegation with members from major economic sectors of the Chinese government.

The delegation members include Governor of the People's Bank of China Yi Gang, Vice Chairman of the National Development and Reform Commission Ning Jizhe, Deputy Director of the Office of the Central Commission for Financial and Economic Affairs and Vice Finance Minister Liao Min, Vice Foreign Minister Zheng Zeguang, Vice Minister of Industry and Information Technology Luo Wen, Vice Minister of Agriculture and Rural Affairs Han Jun, as well as Vice Minister of Commerce and Deputy China International Trade Representative Wang Shouwen.

Big Divides Remain as U.S.-China Trade Talks Resume - WSJ $$:

U.S. officials said a draft negotiating document laying out terms has yet to be assembled. Treasury Secretary Steven Mnuchin said on Monday he expects “significant progress” in this week’s talks, although U.S. Commerce Secretary Wilbur Ross said on CNBC last week that the two sides remain “miles and miles” apart.

“One hope [for the talks] is to get a draft document on which two sides can negotiate an agreement,” said Hudson Institute China scholar Michael Pillsbury, who consults with the Trump team. That outcome is unlikely, he said, given the big gaps between the two sides.

Building a Better Deal with China | Center for Strategic and International Studies - Scott Kennedy and Dan Rosen:

The prospects are not black and white. Even if China is committed to marketization, it will take years to realize that intention, and we are all awake to the risk that consensus toward that end-point could slip along the way. A deal based on a sliding-scale principle will require U.S. flexibility: if China is ready to reform, Washington must temper plans for permanent disengagement in favor of transitional safeguards instead. If China is not prepared to do so, then the United States should accept that choice, however disappointing, and adjust accordingly with much less malice in mind and more focused self-interest.

China brings U.S. tariff dispute to WTO, berates Washington for blocking judges | Reuters:

China triggered the legal process on Monday for the World Trade Organization to hear Beijing’s challenge to U.S. tariffs imposed on $234 billion of goods, and berated the United States for blocking the appointment of judges who could rule on it.

A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’ - The New York Times:

The screw shortage was one of several problems that postponed sales of the computer for months, the people who worked on the project said. By the time the computer was ready for mass production, Apple had ordered screws from China.

The challenges in Texas illustrate problems that Apple would face if it tried to move a significant amount of manufacturing out of China. Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost.


3. China as a top threat to the US

Senate hears that Russia and China top list of threats to U.S. interests - The Washington Post:

Russia and China are competing more intensely with the United States in “a race for technological and military superiority,” the nation’s top intelligence official told a Senate panel Tuesday during a hearing on international threats to U.S. interests.

The two U.S. adversaries “are more aligned than at any point since the mid-1950s,” Director of National Intelligence Dan Coats said in his prepared remarks, seemingly invoking the Cold War of the 20th Century to warn lawmakers about the strategic risk posed by China and Russia.

The two countries are likely to strengthen their relationship in the coming year, particularly as they feel threatened by the U.S. as a force for the “promotion of democratic values and human rights,” Coats said.

U.S. Intelligence Chiefs Contradict Trump on North Korea and Iran - The New York Times:

Most pressing, as it has been for the past five years, are cybersecurity threats to the United States. For the first time, the report concluded that China is now positioned to conduct effective cyberattacks against American infrastructure, and specifically cited Beijing’s ability to cut off natural gas pipelines, at least briefly...

Taken together, the report paints a picture of threats vastly different from those asserted by Mr. Trump. Russia emerges as a disruptive threat, China as a long-term one, and the failure of the United States to invest heavily enough in research and development for key technologies as perhaps the biggest concern, allowing new competitors to close the technological gap.


4. More on the Politburo visit to People's Daily 

PSC Converges for Media Convergence | China Media Project:

the focus at this session was on leveraging the digital transformation of the media space, both in China and globally, to consolidate the Party dominance Xi underscored three years ago. The crux was the need — as the traditional print vehicles of Party fade into obsolescence — to remake the entire state-dominated media system, creating a whole new generation of digital products by which the leadership can dominate the ideological sphere. “[Promoting] the development of media convergence and building convergence media has become a pressing task facing us,” Xi said.

Xi defined the task as “building up mainstream public opinion” (主流舆论) — mainstream referring, in the context of Chinese political discourse, to the defined priorities of the Party itself, and not simply to prevailing currents of thought.

Comment: And the key theme of everything now seems to be "political security 政治安全"


5. More signs of BRI rebalancing

China ‘rebalances’ overseas lending on debt burden concerns | Financial Times $$:

Jin Liqun, the AIIB’s president, told the FT that China is conscious of the criticism. “Chinese leaders definitely have picked up the message. You cannot go on and on putting money in, without taking a review of what’s going on, to rebalance.”

But he refuted criticism that China had lent “recklessly” to trap other countries in debt, as some critics have charged...

Chinese investment has slowed both domestically and internationally, as state-owned infrastructure companies digest their own debt burdens. But Mr Jin said the bigger issue for regional infrastructure was the need for the broader economy to catch up: “For any country when you invest in infrastructure, you need to probably pause for a moment for rebalancing. You need other productive sectors’ support.”

Comment: Mr. Jin is no dummy, he must be also talking about China's experience without saying it directly?

Malaysia leader: Still negotiating China-backed rail project - AP:

Malaysian Prime Minister Mahathir Mohamad said Tuesday that proceeding with a multibillion-dollar China-backed rail link project would impoverish the country, saddling the government with excess debt for the next 30 years.

Since winning a historic vote last May, Mahathir’s government has axed or reviewed large-scale infrastructure projects to rein in a surging national debt that it blames mostly on corruption in the previous government.

But there is confusion over the status of the $20 billion East Coast Rail Link following recent conflicting statements by two Cabinet ministers. Mahathir’s comments Tuesday suggested it might be called off but he later said a final decision hasn’t been reached.

China Woos Malaysia With a Song After $20 Billion Rail Scrapped - Bloomberg:

The Chinese embassy in Kuala Lumpur released the song on its Facebook page to commemorate 45 years of diplomatic relations between the two countries. Titled “Bahu Kiri” or left shoulder in Malay and sung in Mandarin, the lyrics speak of a friendship against all odds while harking to the South China Sea as “heartrending” and reminding the two nations that they share one shoreline.


6. Economy

Chinese Provinces Slash Growth Goals as Slowdown Hits Home - Bloomberg:

Of the 30 provinces which have released their 2019 growth targets, 23 lowered their goals from those set for 2018, according to local government work reports. Guangdong -- the nation’s manufacturing heartland -- is seeking growth between 6 percent and 6.5 percent, while coastal Jiangsu is aiming for expansion above 6.5 percent, compared with about 7 percent targeted by both for last year. The regions have the two highest gross domestic product totals in the country.

China Introduces Measures to Combat Slowing Consumption – Especially of Cars - Caixin:

As China battles economic slowdown, 10 government authorities unveiled 24 policy measures on Monday to help drive “stable growth of consumption” in 2019. The measures focus on boosting car consumption, increasing rural consumption and strengthening consumer protections.

The authorities placed boosting car consumption high on the list and introduced measures such as promoting car replacement, boosting the second-hand car market and improving subsidies on new energy vehicles.

The official release - 关于印发《进一步优化供给推动消费平稳增长促进形成强大国内市场的实施方案(2019年)》的通知 

China’s Auto Sector Can’t Run on a ‘Nothing Burger’ Stimulus - WSJ $$:

China’s government on Tuesday unveiled a flurry of measures designed to spur consumption, including new ways to stoke the country’s car market after it suffered its first annual sales decline in decades last year. The language, though, was conspicuously vague: “Local governments with adequate resources” will be able to offer subsidies to rural car buyers trading in their old vehicles. Central government support seems likely to be limited, with no mention of a cut in the tax on vehicle purchases, a tool Beijing has often used in the past to boost auto sales.

Chinese auto stocks slumped by as much as 4%, after what Bernstein autos analyst Robin Zhu termed this “nothing burger” of an announcement.

Local Governments Downsize Slum Renovations Amid Debt, Property Price Worries - Caixin:

Many provincial-level regions in China have cut their respective targets for the number of homes to be rebuilt under a government program to redevelop run-down neighborhoods, after policymakers tightened funding for the project on concerns over rising debt risks and surging housing prices.

As of Monday,17 provincial-level regions had announced their 2019 goals for so-called “shantytown renovation.” Of those, 14 either lowered the target from last year or did not provide a specific number of apartments to be rebuilt, according to Caixin calculations based on official data and state media reports. Jiangxi province in East China was the only region to raise its target.

Beijing and the northwestern province of Shaanxi halved their targets, while Henan province, in Central China, lowered its number by 70%, becoming the most aggressive areas to downsize the program.


7. PRC scholars want the young American

Young Americans seen as ‘future of China-US relations’ as scholars reflect on soft power | South China Morning Post:

With the US dominating in the soft power stakes, China should focus on young Americans who take a more positive view of the country to improve cultural ties, according to scholars and officials.

That was the consensus at a seminar in Beijing last week to mark the 40th anniversary of the establishment of relations between China and the United States, where a key discussion was why American culture shown in such products as Hollywood films have been so well received elsewhere.

They said the success of these cultural exports had helped the US to spread its values around the world, while China’s efforts to use its soft power abroad were often met with scepticism and even resistance.

One official said the difference was a failure to “tell the China story well” – something President Xi Jinping has instructed the ruling Communist Party’s cadres to do...

“Now, in terms of China-US relations, the elites in America have reached a not-so-optimistic consensus on the future. But the younger people are still relatively optimistic – and they are the future of China-US relations”

Comment: Interesting that someone thinks the issue is the failure to tell the China story well. Do any readers have more information about this seminar? I wonder how they may target young Americans, and through what media outlets. 

Meanwhile, China Teaches Its Youth About Marxism With New Karl Marx Anime - Caixin:

Beijing’s latest attempt to teach young audiences about Marxism is now available to stream online. A new anime-style show depicting Karl Marx in cartoon form debuted Monday on Bilibili, a Tencent-backed video platform that is especially popular among young people - 

The series on Bilibili - 领风者 _ 国创 _ bilibili _ 哔哩哔哩弹幕视频网


8. Foreign correspondents in China

The Foreign Correspondents Club of China has released its annual survey of members. The full report “Under Watch: Reporting in China’s Surveillance State” is posted here on Dropbox. The FCCC Twitter account summarized some of the grim details:

Granting a short-term visa seems to be becoming a trend…

I have heard of some Chinese state media journalists were denied US visas in 2018, increasingly long waits for PRC state and Party journalists to get US visas and secondary searches upon entry. No I am not equating things, and am very aware of the difference in the definition of and job requirements between PRC and other journalists, just want to point out that it certainly seems plausible that media “reciprocity” is only going to intensify this year.


Business, Economy, Finance And Trade

SPA CEO on earnings, China economy and trade war - CNBC AP’s CEO Bill McDermott told CNBC Tuesday that China is still “the jewel in the crown” for the company. “We are not having challenges in China, we are doubling down in China,” he said, mentioning that Beijing is the fastest growing market for the German firm.

China eyes further opening-up in updated draft foreign investment law - Xinhua The Standing Committee of the National People's Congress (NPC) on Tuesday started reviewing a new draft of the foreign investment law, the latest move to promote the country's opening-up initiative. During the two-day session, members of the top legislature are scheduled to deliberate a new version of the draft law, which has been updated from the first draft submitted to the previous session last month. Once adopted, the unified law will replace three existing laws on Chinese-foreign equity joint ventures, non-equity joint ventures (or contractual joint ventures) and wholly foreign-owned enterprises

Layoff Rumors Swirl as Convenience Store Startup Announces Compulsory Math Tests for Junior Employees - Caixin Non-senior employees at Bianlifeng, a scan-and-go convenience store chain, need to answer questions roughly equivalent in difficulty to that of the aptitude tests for national civil servant qualification exams, which include high school-level algebra and geometry, according to an internal letter acquired by Caixin.

Breakingviews - The Exchange: Joseph Tsai | Reuters Podcast Alibaba’s co-founder and executive vice chairman joins Breakingviews to reveal what the future holds for the $400 billion tech giant. As investors fret over economic uncertainties, Tsai also tackles the recent fallout from Huawei, a bruising trade war and the case for tax cuts.


Politics, Law And Ideology

Xi extends Spring Festival greetings to non-Communist parties, personages - Xinhua Chinese President Xi Jinping on Monday attended a gathering in Beijing and extended Spring Festival greetings to leaders from non-Communist parties and the All-China Federation of Industry and Commerce (ACFIC), and personages without party affiliation...Senior officials Wang Yang and Han Zheng attended the gathering...Xi also called on the ACFIC to fulfil the CPC Central Committee's requirements on supporting the growth of private businesses and help to implement policies of promoting the development of medium-sized, small and micro enterprises and private investment.

Vice premier stresses deepened reform of gov't administration - Xinhua Chinese Vice Premier Han Zheng on Tuesday stressed efforts to further transform functions of government organs and streamline government administration. "The work should focus on enabling the market to play the decisive role in resource allocation and adhering to the direction of market-oriented and law-based reform," said Han, also a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, at a meeting of the State Council coordinating group on transforming government functions and improving government services.

Property Tycoon Detained in Shenzhen Graft Probe - Caixin Li Hua, founder and chairman of Shenzhen-based Excellence Real Estate Group, was detained in relation to the graft investigation of Li Huanan, the disgraced deputy party chief of Shenzhen, separate sources told Caixin. The property tycoon was detained by authorities to “assist in investigation” of Li Huanan, sources said. Li Huanan, Shenzhen’s deputy party chief since 2015, was placed under investigation by the Communist Party’s top graft buster in October

Gansu Officials Who Traded Sex for Power Arrested on Graft Charges - Caixin On Jan. 21, two officials from the city of Wuwei in Northwest China’s Gansu province were arrested on corruption charges: former Vice Mayor Jiang Baohong, and her one-time superior, former Party Secretary Huo Ronggui. .The findings said that during Jiang’s political career, she had “seriously violated political discipline,” falsified evidence, and accepted invitations to high-end banquets. The investigation alleged that she had accepted gifts that may have affected the fair execution of her official duties, and may have accepted bribes. One of the accusations leveled against Jiang — having “improper interests such as trading sex for power and seeking promotion of positions” — are rare in reports of corruption

Former vice governor of Jiangxi sentenced to 18 years for graft - Xinhua Li Yihuang, former vice governor of east China's Jiangxi Province, was sentenced to 18 years in prison Tuesday for taking bribes. He was also fined 2.2 million yuan (327,000 U.S. dollars), according to the the Intermediate People's Court of the city of Anqing in Anhui Province.

一腔赤诚 百折不挠 ——纪念瞿秋白同志诞辰120周年-人民日报2019) People's daily on the 120th anniversary of the birth of Qu Qiubai "indomitable and full o sincerity"- 今年1月29日,是瞿秋白同志诞辰120周年纪念日。瞿秋白同志是中国共产党早期的主要领导人之一,伟大的马克思主义者,卓越的无产阶级革命家、理论家和宣传家,中国革命文学事业的重要奠基者之一。瞿秋白同志对党忠诚、宁死不屈,牺牲时年仅36岁。在短暂而非凡的一生中,他为民族独立和人民解放不懈奋斗、艰辛探索,留下宝贵精神财富。他的革命业绩、精神和思想至今熠熠生辉,激励我们前行。

巩固党长期执政的组织基础(人民要论) ——创新新时代城市基层党建工作- 人民数据 Page 9 of Tuesday People's Daily on Party COnstruction at the grassroots level in cities...weak and dissolute Party infrastructure can pose all soirts of political risks, and if there is one key theme for Xi's China in 2019 it is "political security"  //  内容提要:党建工作的难点在基层,亮点也在基层。加强城市基层党建工作,对坚持和加强党的全面领导、巩固党长期执政的组织基础、推进党的建设新的伟大工程具有十分重要的意义。近年来,各地大力加强城市基层党建工作,涌现出许多特色鲜明的好做法好经验。我们要总结好这些做法和经验,形成规律性认识,进一步做好城市基层党建工作,全面提高城市基层党建质量。   基础不牢,地动山摇。习近平同志高度重视基层党建工作,强调把加强基层党的建设、巩固党的执政基础作为贯穿社会治理和基层建设的红线。中国特色社会主义进入新时代,城镇化进程在不断加快,城市在党和国家工作全局中的地位举足轻重。加强城市基层党建工作,对坚持和加强党的全面领导、巩固党长期执政的组织基础、推进党的建设新的伟大工程具有十分重要的意义。

Chinese activist Liu Feiyue given five years' jail for 'inciting subversion' | The Guardian The founder of a prominent Chinese civil and human rights website has been sentenced to five years in prison for inciting state subversion, according to human rights organisations. Liu Feiyue created and ran the Civil Rights and Livelihood Watch website, which covers a range of rights issues including protests, police abuses and government corruption – sensitive topics that are scrubbed from most Chinese media sites.

Wife of jailed Taiwanese activist condemns Beijing after she is barred from visits | South China Morning Post NGO worker Lee Ming-che is serving a five-year jail term on the mainland on charges of subverting state power His wife, Lee Ching-yu, says she has been temporarily banned from seeing him because she criticised prison conditions last month


Foreign and Military Affairs

Canada foreign minister says ex-envoy's Huawei comments made job untenable | Reuters “Ambassador McCallum’s comments were inconsistent with the position of the government of Canada ... and that is what made it untenable for (him) to remain in his role,” Freeland told reporters in what was the first official explanation of McCallum’s dismissal.

Canada foreign minister says ex-envoy's Huawei comments made job untenable | Reuters “Ambassador McCallum’s comments were inconsistent with the position of the government of Canada ... and that is what made it untenable for (him) to remain in his role,” Freeland told reporters in what was the first official explanation of McCallum’s dismissal.

China's Missile Program and Potential U.S. Withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty | U.S.-China Economic and Security Commission The Trump Administration cited China as a major reason behind its decision to announce U.S. intentions to withdraw from the 1987 Intermediate-Range Nuclear Forces (INF) Treaty with Russia. China is not a party to the INF Treaty, which has allowed Beijing to rapidly expand its missile arsenal as part of a military strategy designed to counter U.S. and allied military power in Asia. China has consistently refused to accede to the accord and expressed its opposition to U.S. withdrawal, positions that implicitly recognize the advantages Beijing derives from being unconstrained by the treaty’s limits. This report explains the importance of China’s ground-launched missiles to Beijing’s overall military strategy; surveys Chinese reactions to the potential U.S. withdrawal from the INF Treaty; and assesses both the positive and negative implications of U.S. withdrawal for the military balance in Asia, global arms control regime, U.S. relations with Asian allies, and China-Russia ties.

China to launch 10 BeiDou satellites in 2019 - Xinhua China will send 10 satellites to join the BeiDou Navigation Satellite System (BDS) through seven separate launches this year, the China Aerospace Science and Technology Corporation (CASC) announced Tuesday. The launches will help complete the BDS global network by 2020, said Shang Zhi, director of the Space Department of the CASC, at a press conference, where the Blue Book of China Aerospace Science and Technology Activities was released

Chinese Air Force debuts online psychological counselling platform - China Military n order to establish a new platform for psychological education and counselling in the Air Force, the political work department of the Northern Theater Command integrated three platforms, including its Party committee website, WeChat account and psychological counselling hotline. Renowned experts from different military services such as the Army and Rocket Force, and 36 famous psychiatrists from the Air Force were invited to guarantee that professional services were offered.

Chinese naval fleets escort 3,400 foreign ships over past 10 years - Ministry of National Defense Wu Qian, a spokesperson for the ministry, told a press conference that China sent the first naval fleet to the Gulf of Aden and waters off Somalia for escort missions on Dec. 26, 2008. Since then, 31 fleets have escorted more than 6,600 ships from worldwide, and rescued over 70 ships in danger, Wu said. Protection provided by the Chinese naval fleet has been widely praised. Some foreign ships would rather wait several days to be escorted by the fleet, the statement s

Trump's Freeze on China Exposes Israeli Tech Firms to Chill Wind - Bloomberg During a visit to Israel this month, U.S. National Security Adviser John Bolton was due to raise concerns about China technology penetration, in particular through Huawei Technologies Co. and ZTE Corp., as well as Chinese investment in the port of Haifa that has hosted the U.S. Sixth Fleet. U.S. Deputy Secretary of Energy Dan Brouillette separately raised the prospect of Israel creating a body similar to the U.S. Committee on Foreign Investment to better scrutinize China investment. The flurry of U.S. interventions in Israel has drawn a rebuke from China, and adds to tensions spurred by Trump’s trade conflict and the standoff over Huawei.

Nearly $2 billion in dirty money may have flowed through B.C. casinos, far more than official estimates | Globalnews.ca Previously, official money laundering estimates in B.C.’s casino scandal have focused on loan sharks and gamblers using bundles of dirty cash and suspicious transactions in casino high-limit cash cages. But documents obtained through freedom-of-information requests show that regulators believe organized crime loan sharks and Chinese high-rollers are now using more sophisticated channels to launder cash into bank drafts and through B.C. Lottery Corp. “patron gaming fund” accounts.

Construction plan for China's military history venues issued - China Military The general office of the Central Military Commission (CMC) made public a plan for the construction of military history venues on Sunday. The plan defines the guiding theory, construction concept, layout, objectives and support measures for the construction. Led by the Beijing-based Military Museum of the Chinese People's Revolution, a series of military museums should be put into place, which could include museums specialized in different military services, the museum of the armed police force and the museum of active military equipment, according to the plan.

Myanmar puts Beijing-backed hydropower dam into limbo | Financial Times $$ Myanmar’s government said on Tuesday it had no plans to resume work on a controversial, currently frozen Chinese-backed hydropower dam, despite intensifying pressure to do so from Beijing.  U Thaung Tun, minister of investment and foreign relations, said that while Myanmar considered relations with its powerful big neighbour “important” and was working to devise an alternative power project, the Myitsone dam in the northern Kachin state would have “enormous impact on the environment and on the people and villages in the area”.


Tech And Media

Bing outage in China was technical error, not censors' block: source | Reuters From a technical perspective, a person at Microsoft Corp told Reuters, the site appeared to have been blocked in a manner similar to sites blocked by the government. But the company had received no prior notice from authorities, and the disruption was not intentional on the part of the government, added the person, who declined to be identified, citing the sensitivity of the matter.

How China acquired mastery of vital microchip technology | Financial Times $$ There was little fanfare when the private Chinese company NavTech bought Silex Microsystems in 2015, acquiring the Swedish company’s mastery of manufacturing accelerometers, gyroscopes and other microscopic sensors. NavTech, which specialises in navigation technology for aviation, satellites and defence, announced shortly afterwards that it would build a $300m plant in Beijing “relying on Silex’s technology” in micro-electromechanical systems (MEMS), the components embedded in chips that are increasingly central to everything from mobile phones and medical devices to self-driving cars.

Female hosts banned from wearing lingerie, see-through clothes, sexy uniforms during livestreaming - Global Times Livestreamers will not be allowed to wear sexy costumes such as lingerie, see-through clothes, or skin-colored tights, according to a press release from the Wuhan Software Industry Association (WSIA) sent to the Global Times on Tuesday. Minors have to provide their guardians' identification card, household registration and a signed application before they can become livestreaming hosts, states the regulations which stakeholders hope will be adopted nationally. The self-governing regulations were released by WSIA, the Hubei Standardization Society, China's leading livestream platform Douyu, and other local technology companies after six months of consultati

China’s Online Tutor Startup VIPKid Is Seeking $500 Million at $6 Billion Valuation — The Information $$ If successful, the financing would nearly double the education startup’s value from $3.5 billion just a year ago, after it said it raised about $500 million. The company’s backers include Coatue Management, Tencent, Sequoia Capital and Sinovation Ventures. // Comment: Tough environment for a big raise


Society, Art, Sports, Culture And History

The lovers’ texts, the online trolls and the targeting of a champion Chinese gymnast | South China Morning Post The trolling began late last week after a user published a series of text messages on Weibo, China’s Twitter-like service, claiming that a gold-medal-winning gymnast had been having an affair with her friend’s husband, seducing him and setting her friend up to force her to get divorced. Chinese internet users soon associated the texts with Jiang Yuyuan, former leader of the women’s gymnastics team and gold medallist, alleging that she was having an affair with her friend’s husband.

Shanghai’s million dollar toy boys: Online storm in China after police bust ladies’ club | South China Morning Post “The club was shut down by the police force on Saturday,” an officer from a station in the neighbourhood said, without elaborating. According to a post about Perfect Space that went viral on WeChat on Friday, one of its escorts celebrated his 28th birthday with 28 gifts from a rich woman. These included an Audi, a gold cup and 280,000 yuan (US$41,589) in cash. //  鸭子

China’s Middle-class Rebellion – China Channel Park Avenue, central Beijing, is known for its luxurious serviced apartments, landscaped gardens and Western-style amenities, certainly not its dissident population. Yet, strolling past the compound one weekend, I was surprised to see a protest in progress...A small group of around two dozen had assembled with signs and were milling around outside a locked shop, arguing with a harassed-looking man in the Chinese junior-management uniform of white shirt and belted black trousers. The cause of all the chaos: a swanky gym that had opened in the gated community a few months before, promising unparalleled 24-hour access to upscale fitness machines and personal trainers, had used a recent public holiday to sell all its equipment and, apparently, make off with everyone’s membership fees.

Single Female Blogger Dreads Parental Pressure, Collects Stories to Highlight Dangers of Rushing into Marriage | What's on Weibo Rushed marriages may not end well, so do not pressure your child to get married – this is the message one so-called “leftover woman” wants to get out there, as she has been collecting the stories of women who rushed into marriage as a result of family pressure.


Energy, Environment, Science And Health

China is promoting the use of hydrogen-powered fuel-cell cars — Quartz In 2009, China launched a program known as “Ten Cities, Thousand Vehicles” to promote electric vehicles (EVs), with battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) now both widely in use in the public transport and private-car sectors. This year, China’s considering rolling out a similar plan to develop hydrogen-powered cars, or fuel-cell vehicles (FCVs).


Agriculture And Rural Issues

Sown in China, grown on high seas, ‘Product of USA’ mushrooms are killing American farms Schroeder, and several other mushroom producers in Southeastern Pennsylvania, say they have been clobbered by imports from both Canada and China. “This is one of the reasons that the local shiitake market has suffered,” said Chris Alonzo, the third-generation owner of Pietro Farms based in Kennett Square. “That’s one of the things that has hurt Oakshire.” To add insult to injury, the farmers say, mushrooms that originated in China are allowed to be labeled “Product of the USA” due to a regulatory quirk.


Education

Beijing education authorities rule out ads, hongbao in student WeChat groups · TechNode The move comes after China’s Ministry of Education banned apps it deemed to be harmful from school campuses last month, targeting pornographic and violent content, online gaming, and advertising. The ban followed calls by Chinese President Xi Jinping to create a “clean and righteous cyberspace.” The new list of rules is both exhaustive and detailed. Forbidden topics include the obvious like violence and porn, but also public mention of students’ rankings, extra homework or schoolwork, and other exam-oriented content that could put extra pressure on students

Duke University Apologizes Over Professor’s Email Asking Chinese Students to Speak English - The New York Times Duke University has apologized after a professor cautioned international students against speaking Chinese on campus and urged them to speak English instead.