Beijing To Stop Buying US Treasuries?; Big Study Campaign Kicking Off; Guo Wengui Gets A New York Times Magazine Story; IBM's China Cloud Plans Derailed By Pressure On Wanda
|Bill Bishop||Jan 10, 2018|
Good morning from unfrozen Washington DC. To follow on yesterday’s comment, I think the forced termination of the Huawei-AT&T deal significantly raises the likelihood that a major US consumer electronics firm with meaningful operations in China will be smacked down at the first sign of a real US-China trade war.
Beijing assumes the US government is so paranoid about Huawei because it uses US firms to do what it says Beijing does with Huawei, and the Snowden revelations confirmed many of those suspicions. If anything Beijing has been remarkably tolerant of some US consumer electronics firms given the treatment of Huawei and what we learned from the documents Snowden stole.
One theme I have heard fairly consistently is that US firms and financial markets have not fully grasped the increasing risk of a material US-China trade dispute. The companies’ denial may be understandable as there is little they can do but markets may be in for quite a shock if President Trump follows on through on what he has said he would do about trade with China.
The Essential Eight
1. Beijing To Stop Buying US Treasuries?
Comment: Bloomberg reports that PRC officials are considering halting purchases of US Treasuries. Why leak this now? Is this effectively a threat of action in the event of significant deterioration in US China relations?
Officials reviewing China’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, according to people familiar with the matter.
China holds the world’s largest foreign-exchange reserves, at $3.1 trillion, and regularly assesses its strategy for investing them. It isn’t clear whether the recommendations of the officials have been adopted.
The market for U.S. government bonds is becoming less attractive relative to other assets, and trade tensions with the U.S. may provide a reason to slow or stop buying American debt, the thinking of these officials goes, according to the people, who asked not to be named as they’re not allowed to discuss the matter publicly. China’s State Administration of Foreign Exchange didn’t immediately reply to a fax seeking comment on the matter.
Would this move still matter as much as it once did to the Treasury market?
Former US Treasury Official Brad Setser published an analysis last week arguing that the PRC's impact on the US bond market was overstated- China’s Impact on the U.S. Bond Market Gets Too Much Attention. And Europe's Too Little | Council on Foreign Relations:
…it is clear that by far the biggest source of demand for U.S. fixed income assets these days is coming from the eurozone, not China. Europe has a bigger current account surplus than China, and the ECB’s QE and low rates have reduced eurozone bond yields below U.S. yields and created an incentive for fixed income investors to move their funds out of the eurozone.
2. Big Study Campaign Kicking Off
Study and implementation of the "spirit of the 19th CPC National Congress" is now the "primary political task" for the Party and country. Xi Jinping, general secretary of the CPC Central Committee, gave this directive while presiding over the first group study of the Political Bureau of the 19th CPC Central Committee in October, just three days after the conclusion of the congress.
Such group study sessions are a regular feature of the lives of senior CPC officials. Indeed, 45 such study sessions have been held since the 18th CPC National Congress in 2012. Topics covered included various issues from Marxist ideology and state governance to green development and information technology...
The entrepreneurs also recognize the need of study. "I have read the congress report many times," said Jack Ma, chairman of Alibaba Group. "It charts out clear goals and direction for the country's future."
"Understanding policy, not waiting for favorable policy, helps an enterprise develop," he said.
Long article on page 2 of the 1.10 People's Daily on the whole Party studying the 19th and the New Era - 全党来一个大学习——新时代中国共产党人的理论自觉
3. Xi Issues Instructions To People's Armed Police At CMC Flag Ceremony
Xi, also general secretary of the CPC Central Committee and chairman of the Central Military Commission (CMC), made the remarks at a ceremony by the CMC to confer a flag on the armed police force.
At the ceremony, Xi conferred the flag on Commander Wang Ning and Political Commissar Zhu Shengling of the armed police.
The official Chinese report makes it absolutely clear the move to centralize command of the PAP under the CMC and Party Central is to ensure unified, centralized leadership over all armed forces in the country, and reiterates that the PAP has as part of its mission the duty to uphold and protect the safety of the regime and the political system--中央军委向武警部队授旗仪式在北京举行 习近平向武警部队授旗并致训词--时政--人民网
Thursday CCTV Evening News top 8:30 on the ceremony-中央军委向武警部队授旗仪式在北京举行 习近平向武警部队授旗并致训词
4. DC Getting Serious About CCP Influence Operations
Comment: Not much new information in here but it is another sign that DC is waking up to CCP influence operations and is likely to start pushing back much harder.
In targeting Chinese operations, the administration is walking a delicate line between helping American academics, think-tank experts and journalists resist pressure and fomenting mass public anxiety about Beijing’s activities. Officials say they want to avoid the hysteria of the 1950s — but also help American institutions push back against intimidation from a Chinese Communist Party that is rich, self-confident and seductive in a way that Russia has never been.
The administration official said in an interview Tuesday that the target “is not Chinese soft power — the legitimate exchange of people and ideas, which is something we welcome. What we’re talking about are coercive and covert activities designed to influence elections, officials, policies, company decisions and public opinion.”..
America has never faced a rival quite like China, which presents such a compelling, well-financed challenge to democratic values. America certainly doesn’t want a new “Red Scare,” but maybe a wake-up call.
5. Guo Wengui Gets A New York Times Magazine Story
Comment: Interesting story but it seems a little out of date. Guo has quickly descended into irrelevance, perhaps coincidental with the close of the 19th Party Congress or, for those with a taste for CCP conspiracy theories, a fit with the idea that Guo was part of a CCP elite factional fight in the run-up the Congress, and now his efforts are finished…I am not sure what to believe, but I certainly don’t believe anything that comes from Guo without other, credible sources verifying it.
From a penthouse on Central Park, Guo Wengui has exposed a phenomenal web of corruption in China’s ruling elite — if, that is, he’s telling the truth...
When pressed, Guo claims a record of unblemished integrity in his business dealings, both in real estate and in finance (when it comes to his personal life, he strikes a more careful balance between virility and dedication to his family). “I never took a square of land from the government,” he said. “I didn’t take a penny of investment from the banks.” If you accept favors, he said, people will try to exploit your weaknesses. So, Guo claims, he opted to take no money and have no weaknesses...
Despite Guo’s high-powered supporters and his army of online followers, one important mark of believability has continued to elude him. Western news organizations have struggled to find evidence that would corroborate Guo’s claims. When his claims appear in print, they are carefully hedged — delivered with none of his signature charm and bombast. “Why do you need more evidence?” Guo complained in his apartment. “I can give them evidence, no problem. But while they’re out spending time investigating, I’m waiting around to get killed!”..
Guo’s claims have divided China’s exiled dissidents to such an extent that on a single day near the end of September, two dueling meetings of pro-democracy activists were held in New York, one supporting Guo, the other casting doubt on his motivations. (“They are jealous of me,” Guo said of his detractors. “They think: Why is he so handsome? Why are so many people listening to him?”)
6. More Financial Regulatory Moves
Comment: It is important to note that many recently appointed financial regulators have experience serving in the Central Discipline Inspection Commission system. Xi and his team may have blinked slightly about deleveraging at the December Central Economic Work Conference but the signs are still strong that the 2018 pressure across the financial system will be immense and anyone who does not toe the central line risks being taken away for investigation.
Caixin learned from the China Banking Regulatory Commission (CBRC) that one of the eight key missions that regulators have set for 2018 is to reverse economic activity that conflicts with central government macroeconomic directives. This includes the extent to which banks funnel money into the real estate sector, especially via irregular financing.
At China’s annual Central Economic Work Conference, which concluded on Dec. 20, the central government vowed to improve long-term mechanisms to ensure the stable and healthy development of the real estate market, and reiterated that both home purchases and rentals will be encouraged. This was interpreted by the market as meaning that the regulator will not relax its grip on funding that flows into the real estate sector.
Sales of debt backed by consumer loans, one of the main fundraising channels used by China’s online lenders to expand their business, have slumped in the wake of a government clampdown on the country’s unruly microlending industry.
Sales of such products, known as asset-backed securities (ABS), slid to 11.7 billion yuan ($1.8 billion) in December 2017 after hitting a record high of 51.2 billion yuan in November, according to data provider China Securitization Analytics (CSA). No ABS backed by consumer loans have been issued so far this year, the data show.
Ant Financial Services Group, an affiliate of e-commerce giant Alibaba Group Holding Ltd., has dominated the market for consumer loan-backed ABS through its two online lending services, Huabei and Jiebei, who accounted for 91% of total issuance in 2017 with the sale of 236.3 billion yuan of securities, according to CSA data. But after issuing 44.2 billion yuan of ABS in November and 32.8 billion in October, their sales in December plunged to 11.1 billion yuan.
Xinhua's Economic Information says it has learned new measures in the works to increase supervision of local government loans to control increase in amount and reduce risks...we'll see...--地方债将迎更大力度监管新政 _ 经济参考网 _ 新华社:
7. Environmental Cleanup Working, At Least In Beijing
Comment: The costs to the economy are not low, so lots of people wonder how long the regulators can keep this up. As with the skepticism about financial sector cleanup, the Party can't afford not to improve the environment or reduce financial risks, but expect it to be fitful with more than a little backtracking at times.
The density of PM2.5 in Beijing dropped by 53.8 percent in the October-December period year on year while that for December plummeted by nearly 70 percent, according to a statement on the ministry's website.
An air pollution plan issued by the State Council in September 2013 ordered Beijing to reduce its PM2.5 density from 90 micrograms per cubic meter in 2013 to around 60 micrograms per cubic meter by the end of 2017.
The average density of PM2.5 in Beijing was 58 micrograms per cubic meter last year thanks to effective pollution controls.
Tackling pollution has been listed as one of "the three tough battles" that China aims to win in the coming three years, according to the Central Economic Work Conference, an annual tone-setting economic meeting.
Zhou has taken a photo of the Beijing skyline every day from a Dawang Road rooftop, accumulating a long-term snapshot of local smog conditions.
According to his records, Zhou described the total number of days with excellent air quality as consistently rising over the past five years, increasing from 164 days in 2013 to 173 days the following year, then 192, 198, and finally 238 days last year.
Over the same time, Zhou said average daily PM2.5 levels have dropped from 89 micrograms per square meter to 59, signifying a 30 percent decrease.
Caixin cover story on the tough measures taken to improve Beijing air quality-“大气十条”保卫战：北京的天空是如何变蓝的|周刊封面推荐_政经频道_财新网
The exodus from Beijing in search of cleaner air is real, and a few months of good air will not reverse that--Building boom in China's tropics as Beijing's 'smog refugees' flee toxic air | The Guardian:
Smog is not the only factor driving migration to Xishuangbanna. Ji, who used to work for the state-run China Development Bank, said he was also tired of human beings. “Beijing has too many people, it’s too big, and has too many tall buildings. I don’t like it.”..
But Jin, 37, said he regularly hosted northern guests who had received medical orders to quit the capital. “Last year a lot of my friends came here because their children were always coughing – very serious coughs – and the doctor advised them to change place … because if your children stay in Beijing they will not [get better].” During 2016’s airpocalypse, “a lot of people came here to buy houses”, he said.
8. IBM's China Cloud Plans Derailed By Pressure On Wanda
Comment: Maybe Wanda is under so much pressure simply because it is a "grey rhino" of risk, or perhaps there really are political issues for the founder. Regardless, Wanda is rapidly becoming a shell of its former self, to the chagrin of increasing numbers of foreign partners.
Wanda will cut the workforce at the cloud-computing department under Wanda Internet Technology Group, the sources close to the matter said. Wanda cut some jobs in Wanda Internet last year, leading to speculation that the conglomerate was retreating from the segment amid years of slow growth and mounting capital pressure. At an internal meeting on Monday, executives blamed the downsizing on problems in its partnership with IBM forged last March, sources said. Wanda will halt its efforts with IBM to sell cloud-computing services and temporarily suspend part of related development and research works, a Wanda employee who attended the meeting told Caixin...
A stalled partnership with Wanda is not helpful to IBM’s push to be a player in China. Under Chinese rules, foreign cloud-service providers must partner with licensed domestic companies to operate in China.
IBM spent over one-year in negotiations to settle the partnership with Wanda, counting on the Chinese conglomerate’s financial strength and ambition in cloud business.
Business, Economy, Finance And Trade
Central Bank Sidesteps Questions on Yuan Reference Rate After Plunge - Caixin Global The People’s Bank of China (PBOC), in a response to an emailed request from Caixin, neither confirmed nor denied that it had told banks to suspend the use of the “countercyclical factor” when they calculate the daily reference rate, as reported by Bloomberg News on Tuesday.
China Swats Jack Ma’s Ant Over Customer Privacy - WSJ $$ The Cyberspace Administration of China said Wednesday that it had summoned representatives of Alibaba Group Holding Ltd. affiliate Ant Financial Services Group to dress them down for automatically enrolling users in its credit-scoring system...The regulator said Ant’s action violated new national standards on the protection of personal data, and broke a pledge the company signed late last year to protect such information. // 国家互联网信息办公室网络安全协调局约谈“支付宝年度账单事件”当事企业负责人-中共中央网络安全和信息化领导小组办公室
China’s Industrial Inflation Falls to 13-Month Low in December - Caixin Global The producer price index (PPI), which measures changes in the prices of goods bought and sold by manufacturers and mining companies, rose 4.9% year-on-year last month, its lowest reading since November 2016, according to the National Bureau of Statistics (NBS). The reading was marginally above the median projection of an increase of 4.8% from a survey of economists by Bloomberg News. The consumer price index (CPI), a gauge of prices of a basket of consumer goods and services, increased 1.8% from a year ago, up from a gain of 1.7% in the previous month, the NBS said. It was slightly lower than the median forecast of a 1.9% gain from the poll.
China relaxes regulations for investors in free trade zones - Xinhua The State Council has decided to ease regulations for enterprises investing in free trade zones (FTZs) to promote reform and opening up, a notice said Tuesday. According to the decisions endorsed by Premier Li Keqiang, China will allow wholly foreign-owned entertainment venues to provide services in FTZs and permit foreign investors to invest in Internet access businesses.
Chinese netizens urge boycott of Marriott for calling Tibet a 'country' - Global Times The Global Times reporter found on Tuesday that when Chinese citizens downloaded Marriott’s app and registered as members, it would ask them to choose “Which country you are from” – listing the Chinese mainland, Hong Kong, Macao, and Taiwan. Marriott Reward released a notice on its Sina Weibo on Tuesday, saying that “We are deeply sorry for the questionnaires. We realized that this mistake would deeply disappoint our Chinese customers. For now, we have suspended the questionnaires and fix the options at once. We apologize for the inconvenience caused by the incident.”
Chinese men jailed for life after their US$2.4 billion pyramid scheme conned 200,000 people | South China Morning Post Some 19 others who were involved were given sentences of up to 12 years, the court in the eastern Chinese city said. Huang set up Longyan e-commerce Co Ltd in January 2015 and worked with another firm owned by Cai to swindle over 200,000 investors out of more than 15.6 billion yuan, the court said. They promised annual returns of more than 250 per cent to investors who paid in 4,000 yuan each.
Gadfly entrepreneur fires salvo against China’s red tape, after earlier complaint got him a trip to premier’s office | South China Morning Post Wu Hai, founder of the Orange Hotels Group of travellers’ inns, said arbitrary fees linger in China, even though the premier had vowed to cut red tape at a meeting two years earlier.
Politics, Law And Ideology
杨晓渡任国家监察体制改革试点工作领导小组副组长_凤凰资讯 Yang Xiaodu now deputy head of the national supervision commission pilot work leading small group // 2018年1月4日出版的新年第一期《中国纪检监察杂志》刊发文章《蹄疾步稳推进国家监察体制改革试点工作——迈好第一步站稳第一台阶》提到，中央政治局委员、中央纪委副书记、中央深化国家监察体制改革试点工作领导小组副组长兼办公室主任杨晓渡直接抓改革试点工作，主持召开领导小组办公室会议，听取改革试点推开工作进展情况汇报，研究部署下一阶段工作任务。 澎湃新闻记者查询发现，这是杨晓渡首次以“中央深化国家监察体制改革试点工作领导小组副组长”的身份公开亮相。此前，杨晓渡担任中央深化国家监察体制改革试点工作领导小组成员兼办公室主任。
The Political Mobility of China's Central State-Owned Enterprise Leaders | The China Quarterly | Wendy Leutert Extensive research on the political mobility of Chinese officials at central, provincial, municipal and county levels has yet to fully consider an important group of elites – the leaders of China's core central state-owned enterprises (SOEs). This paper presents the first systematic analysis of their political mobility between 2003 and 2012 using an original biographical dataset with 864 leader-year observations. Under the Hu Jintao administration, these leaders emerged as a distinctive group within China's top political elite: increasingly well-educated but lacking experience beyond state-owned industry, with both lengthening leadership tenures and years of previous work in their companies. Instead of a “revolving door” through which these individuals rotate routinely between state-owned business and the Party-state to positions of successively higher rank, a top executive posting was most often a “one-way exit” to retirement. Of those who advanced politically, virtually all were transferred laterally along three career pathways with little overlap: to other core central SOEs; provinces; and the centre. This paper underscores the theoretical importance of disaggregating types of lateral transfer to research on Chinese officials’ political mobility and the cadre management system.
China to step up supervision over prosecutors - Xinhua China will step up supervision and management over prosecutors by assessing the cases they deal with, the latest in a string of measures to promote justice, according to a regulation issued by the Supreme People's Procuratorate.
Racial Thinking in Modern China: A Bridge to Ethnonationalism? – Taiwan Sentinel The Chinese Dream is based on the so-called “great rejuvenation of the Chinese nation,” which in turn is based on an important mistranslation. As noted by Jamil Anderlini in the Financial Times, a better translation of the phrase 中華民族偉大復興 would be the great rejuvenation of the Chinese race. According to Anderlini, official translators are consciously misleading us with this translation, as “nation” is free of references to colonialism or facist movements in Europe and beyond. Whatever may be the case regarding the translation, race is perhaps more relevant than ever in an increasingly nationalistic and xenophobic China. But this phenomenon is little discussed and therefore poorly understood. As Kevin Carrico notes in the opening of his book The Great Han: Race, Nationalism and Tradition in China Today, the debate on wether the concept of race is at all “relevant to the Chinese experience of identity” is still being waged in academic circles today.
How China Used a Times Documentary as Evidence Against Its Subject - The New York Times Comment: Jonah Kessel writes about his decision to do a video interview with Tashi Wangchuk, now on trial for "inciting separatism", with the NYT interview shown in court as they key evidence against Mr. Tashi.// In 2015, after I met Mr. Tashi, I made a nine-minute film for The Times about his efforts to raise the issue of Tibetan education to the central government and Chinese state media. Last week, that documentary was shown in court as the main evidence that Mr. Tashi was inciting separatism. The use of my film as evidence against Mr. Tashi gets at the heart of one of the thorniest issues that can plague foreign journalists: How do we justify instances when our work — aimed at giving voice to the voiceless and holding the powerful to account — ends up putting its subjects at risk or in danger?
Foreign and Military Affairs
EU needs united approach on foreign investment to gain China's respect - Macron - Reuters Europe needs a united approach in protecting its strategic assets from foreign takeovers if it wants to be respected by China, French President Emmanuel Macron said on Wednesday... “Europe has often shown itself divided about China,” Macron told the French community in Beijing. “And China won’t respect a continent, a power, when some member states let their doors freely open.”// Comment: Unity is Strength--团结就是力量
Cambodia Finds New Target for Real Estate: Chinese Investors - The New York Times Chinese investors are flocking to Phnom Penh, which had primarily been an investment destination for SoutheAnother major selling point for Chinese buyers — one that features prominently in marketing materials for many real estate developments — is that Cambodia is a key participant in One Belt, One Road, an infrastructure initiative from President Xi Jinping of China that is harnessing hundreds of billions of dollars in state and private investment to bring Southeast Asia, Central Asia, Europe and other regions closer to China.
China and North Korea: Following the paper trail - Lowy Interpreter I could go into a number of other issues that cast doubt on the document’s veracity. For starters, the language used in the document doesn’t match the usual style. And the Party rarely documents its foreign policy shifts on paper. There has not been a foreign policy document in the most authoritative ‘Important Documents’ series since 1984. But you get my point. Hence, we are left with other, perhaps more troubling questions: namely, who would fake a document? Why was it not able to be verified prior to publication? More broadly, do we risk rushing to believe what we want to with regards to China, rather than examining what is in front of us? // Comment: Given Beijing’s decades of duplicity over the DPRK the substance of the document is plausible, but a bigger question in the current environment is who would be circulating such an incendiary forgery and why? Is there a Korean-peninsula “curveball” source out there?
Doklam stand-off with China: will India learn the right lessons or pay as Nehru did? | South China Morning Post Zhou Bo says if today’s India insists it is not the India of 1962, it should remember that China, too, is not the same. Triumphalism, mixed with adventurism, on border disputes could cost India dearly, as it did the Nehru government-Zhou Bo is an honorary fellow with PLA Academy of Military Science
China's foreign policy more proactive under Xi: Expert - The Straits Times President Xi Jinping has changed the style of Chinese foreign policy from a stance that is reactive to a more proactive approach where China is not afraid to wield a stick. Chinese expert Professor Jin Canrong shared this view at the ISEAS - Yusof Ishak Institute's Regional Outlook Forum 2018 yesterday. Prof Jin noted that China used to "show a smiling face to everybody" and offer only carrots instead of sticks.
By denying river water data to us, Beijing is using the resource as a tool of coercive diplomacy | Hindustan Times - Brahma Chellaney To deflect attention from its continuing dam-building frenzy and its refusal to enter into a water-sharing treaty with any neighbour, China has bragged about its hydrological-data sharing accords. Yet it showed in 2017 that it can breach these accords at will. The denial of hydrological data to India actually underscores how China is using transboundary water as a tool of coercive diplomacy.
Australia lashes out at China’s ‘useless’ Pacific projects - FT $$ Australia has launched a scathing attack on China’s efforts to build influence in the Pacific, accusing Beijing of currying favour with the region’s smaller nations by funnelling cash into little-used infrastructure projects. “You’ve got the Pacific full of these useless buildings which nobody maintains, which are basically white elephants,” Concetta Fierravanti-Wells, Australia’s minister for international development and the Pacific, said on Wednesday.
3, 2, 1 ... lift-off for a barrage of Chinese military missile tests | South China Morning Post Armed forces news outlet offers high-resolution look at what appear to be weapons capable of precision strikes on Taiwan
Chinese military to prosecute former top general for graft | South China Morning Post A Beijing-based source close to the PLA said Fang had been an ambitious and capable officer. “Both Fang and Zhang were not so bad, but they couldn’t help but fall in line with the corrupt officialdom at the time,” he said. “Actually, they were brought down by an internal political struggle ahead of the five-yearly party congress [in October].”
PLA Daily wighs in on Fang-- 军报评房峰辉落马：坚决拥护党中央的正确决定|房峰辉|廉政建设|郭伯雄_新浪军事_新浪网 身为党和军队的高级干部，房峰辉本应以身作则，带头践行党的宗旨，但他却动摇理想信念，背弃党的宗旨，政治上变质、经济上贪婪，完全背离了党性原则，辜负了党中央、中央军委的信任和人民的期待，严重玷污了党的形象，玷污了军队的形象，玷污了领导干部的形象。对房峰辉涉嫌行贿、受贿犯罪进行依法处理，是全面彻底肃清郭伯雄、徐才厚流毒影响的重要组成部分，是深入推进党风廉政建设和反腐败斗争的重要举措，是纯洁党的肌体、纯洁部队、纯洁高级干部队伍的必然要求，事实再次证明我们党具有强大的自我净化、自我完善、自我革新、自我提高能力。
PLA updates dietary guidelines for all troops, baijiu sidelined | Asia Times The dietary guidelines, updated last year by the Logistic Support Department of the Central Military Commission and the army’s commissariats, outline a four-tier regime for troops, with categories corresponding to types of service and areas stationed at. The top-grade category is for PLA airmen and crews on conventional and nuclear-powered submarines. The second is for marines and troops deployed on elevated plateaus in Tibet and Qinghai.
Chinese business chiefs pay £12,000 for dinner with David Cameron - BBC News That was what was on offer recently for wealthy business figures at an event in China - as long as they stumped up about £12,000. Mr Cameron featured on social media adverts for the Shanghai International Ball and Leaders' Forum, which took place earlier this week. A photograph of the former prime minister was accompanied by a price in Chinese renminbi. // Did Cameron even know, or was this a side deal by the organizers?
With U.S. Aid Cut, Pakistan Drifts Closer to China - WSJ Some U.S. officials described China role in Pakistan not as a threat to U.S. interests but as a potentially positive influence, saying that Beijing also wants a stable Pakistan free of militancy. “Ultimately, if [the Chinese] want to see stability in the region, and I think that they do, they also have an interest in cracking down on Haqqani and Taliban networks,” said a senior U.S. official. The U.S. has asked China to persuade Pakistan to take action against militant sanctuaries, and appreciates Beijing’s role in trying to mend ties between Kabul and Islamabad, hosting a meeting of their foreign ministers last month, the official said.
Hong Kong And Macao
Hong Kong officials find 10 illegal structures at homes of new justice minister Teresa Cheng and husband | South China Morning Post The findings added to a scandal that forced Hong Kong’s leader Carrie Lam Yuet-ngor earlier on Tuesday to defend her new Secretary of Justice Teresa Cheng Yeuk-wah, saying the matter was not an “integrity issue”. Five inspectors entered Cheng’s three-storey house in Tuen Mun at about 9.40am. They later entered the neighbouring property which belongs to Cheng’s husband Otto Poon Lok-to.
Jiang Jianguo: 'One country, two systems' the best solution for HK, Macao - SCIO The "one country, two systems" policy is the best solution to maintain the long-term prosperity and stability of Hong Kong and Macao, said Jiang Jianguo, deputy head of the Publicity Department of the Communist Party of China (CPC) Central Committee and minister of the State Council Information Office of China (SCIO), in a signed article published Wednesday on People's Daily, the official newspaper of the CPC. 人民日报：“一国两制”是保持香港、澳门长期繁荣稳定的最佳制度
U.S. opposes China's unilateral launch of new flight routes | -CNA In a telephone interview with CNA, Brian Hook, senior policy advisor to Secretary of State Rex Tillerson, expressed concerns the U.S. has regarding China's announcement made on Jan. 4. "We are concerned about reports that Beijing has modified the use of civil aviation flight routes in the Taiwan Strait without consulting with Taiwan authorities," Hook said.
U.S. House Backs Greater Ties With Taiwan, Risking China's Ire - Bloomberg Businessweek Middle East One bill would encourage visits between the U.S. and Taiwan “at all levels,” specifically citing “cabinet-level national security officials.” Such exchanges would effectively raise the diplomatic status of the democratically run island, which U.S. officials have avoided since recognizing the government in Beijing under the “one-China” policy in 1979. The other piece of legislation urges the U.S. State Department to develop a strategy to help Taiwan regain its observer status in the World Health Organization, countering one recent Chinese effort to increase the island’s diplomatic isolation.
Taiwan Travel Act to jeopardize Taiwan's future - Global Times Alternatively, the Chinese mainland's endeavors to settle the Taiwan question would be presumptuously resisted by the Taiwan administration. Taiwan and US political and military forces would join hands. This would prompt the Chinese mainland to take the military approach to reunify Taiwan. The mainland might pay a temporary price for that, but the price would be far less than the accumulated costs of Taiwan and the US challenging the one-China policy. There are signs that Washington has become increasingly rampant on the Taiwan question. The mainland will respond even more strongly.// 社评：美众院“台湾旅行法”是“摧毁台湾法” : "美国出现了越来越不嫌台湾事大的苗头，大陆一边同美扳手腕，一边要把台当局打蔫，这是唯一可能的趋势"。 Threatening always go over well with the US Congress...
A Coming Storm After The Passage Of Labor Law Changes? - New Bloom WITH THE passage of the Tsai administration’s planned changes to the Labor Standards Act this morning, it seems that organized labor, Taiwanese youth activists, and Third Force parties have suffered a defeat. As a result, this morning saw protests outside the Legislative and Executive Yuans, with smoke bombs and ghost money thrown at government buildings.
Tech And Media
China’s Didi Misses December Ride Target, Declares ‘War of the Century’ — The Information $$ Didi Chuxing missed its target for the number of daily rides taken in December, according to internal data seen by The Information, sparking concerns about growth for the world’s biggest ride-hailing company. The shortfall—which could reflect new local government rules on ride-hailing and competition from bike-rental services—prompted an executive to dress down staff at a recent management meeting.
Local authority says Meituan not yet authorized to offer ride-hailing services · TechNode A week after China’s leading O2O and e-commerce platform Meituan announced that “Meituan Dache (美团打车)” will be launching in Beijing on January 12, Municipal Commission of Transportation said “Meituan Dache” is not yet in accordance with the municipal law to apply for ride-hailing business, and has not obtained related business qualification yet, Chinese media Tencent News is reporting.
Mega Chip Deal Alarms Some Chinese Smartphone Makers - WSJ Executives from China’s Oppo Electronics Corp. and Vivo Electronics Corp., which together generate more than 10% of Qualcomm’s $22 billion in annual revenue, said they are worried about possible price hikes and other changes that could come down the pipe if Broadcom succeeds in its $105 billion hostile takeover bid for San Diego, Calif.-based Qualcomm. A third Chinese customer, Xiaomi Corp., said it also has reservations about a merger, which would create the world’s third-largest chip company.
Huawei’s CEO going off-script to rage at US carriers was the best speech of CES - The Verge The Huawei boss did something unexpected at the end of his keynote, however. Framed by a simple slide reading “Something I Want to Share,” Yu proceeded to address the failure of Huawei’s carrier deal directly. Shedding the earlier hesitation in his speech, he made the point that American phone buyers can’t have the best and widest choice of device if Huawei products — those of the world’s third-biggest phone vendor — weren’t on offer. “Everybody knows that in the US market that over 90 percent of smartphones are sold by carrier channels,” he said. “It’s a big loss for us, and also for carriers, but the more big loss is for consumers, because consumers don’t have the best choice.”
Operations of Apple's iCloud services in China are about to be transferred to a company in Guizhou · TechNode Guizhou-Cloud Big Data Industry Development Co., Ltd. (GCBD, 云上贵州公司) will be responsible for iCloud operations in mainland China and will have legal and financial relations with iCloud users in mainland China. The company was approved by People’s Government of Guizhou Province in November 2014, with registered capital of 235 million RMB. // Comment: I believe this was announced months ago, not just being implemented
Statement: Caixin Media Names New Editor-in-Chief - Caixin Global The transition has been in the works for a while. Hu has been both publisher and editor-in-chief of Caixin from the company's founding. In recent years she has spent increasing time on the company’s strategic development, including setting up Caixin Insight and Caixin Global. She has also been guiding Caixin’s efforts to become China’s first subscription-based media outlet. The transition will allow her to focus on Caixin’s business development from a higher level.
China Tightens Rules for Foreign-Flavored Shows | CFI China’s top state media regulator has ruled that television and radio programs cannot broadcast in any format once given an official warning — whereas in the past, shows could return to the air or be shown online after “rectifying” certain elements. The notice, issued by the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) in December, also laid out new rules stipulating that reality entertainment inspired by international shows must apply for preapproval two months before broadcasting.
China’s Kunlun completes full buyout of Grindr | TechCrunch The deal will also see a change in the structure of Grindr’s business with CEO and founder Joel Simkhai exiting the company. The startup’s current board chairman, Yahui Zhou, is stepping in as interim CEO until a full-time replacement is hired. In other exec shuffles, current vice-chairman Wei Zhou becomes CFO with Scott Chen, formerly with Facebook and Instagram, moving in as CTO.
Xinhua to integrate AI into news production - Xinhua Cai Mingzhao, president of Xinhua News Agency, said Xinhua will build a new kind of newsroom based on information technology and featuring human-machine collaboration. The project is expected to greatly improve efficiency. Cai made the remarks at a work conference that maps out Xinhua's key tasks for 2018.
Blow for LeEco as brokerage sues brother of tech company’s founder - FT $$ Brokerage China Orient Securities is suing the brother of tycoon Jia Yueting for breaking a share pledging agreement, a blow for Jia’s crumbling tech conglomerate LeEco, which had just repaid part of its debts to another creditor, China Merchants Bank.
Society, Art, Sports, Culture And History
China remembers renowned historian - Xinhua A symposium to mark the 100th anniversary of the birth of Hu Sheng, a renowned historian and Marxist theorist, was held in Beijing Wednesday. Yu Zhengsheng, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), met Hu's family members before attending the ceremony.
China to draft online religious information regulation - Global Times China will draft a regulation on the management of online religious information in 2018, a move that experts believe necessary to combat illegal online activities held under the guise of religion. The regulation, together with others on the management of religious groups, venues and activities, will be drafted or amended in 2018 by the State Administration for Religious Affairs and relevant departments, administration director Wang Zuoan said at a conference on Monday, the Xinhua News Agency reported.
Energy, Environment, Science And Health
No large-scale oil spill found after east China coast vessel collision - Xinhua Zhao Ruxiang, an expert with China's Yantai Oil Spill Response Technical Center, said a simulation test showed condensate oil in the water can evaporate so quickly that it will leave little residue - less than 1 percent after five hours.
Unusual virus strains cause flu outbreak in China: official - Xinhua The predominant virus strains this winter have been little seen in recent years, which has caused the current influenza outbreak in China, according to an official at the National Health and Family Planning Commission. People have been more likely to lack the immune barrier for the strains, adding to the susceptible population, said Jiao Yahui, deputy head of the medical administration and management bureau of the commission, at a press briefing Tuesday.
Opulent yacht club in China’s Hawaii forced to close over eco clash | South China Morning Post The oceans and fisheries bureau in the tourist hotspot of Sanya issued the closure order to the Yalong Bay Yacht Club just days after Beijing criticised the provincial government for being lax on the environment. Under the order, the club must halt its operations and ensure all yachts leave waters within the Sanya National Coral Reef Nature Reserve, news website Hainan.net reported. The yacht club, which opened in 2011, includes a 150-berth marina on the luxury St Regis Sanya Yalong Bay Resort. Its builder, Sanya Yalong Development, is affiliated with state-run China National Cereals, Oils and Foodstuffs Corporation, the country’s largest agribusiness firm.
Agriculture And Rural Issues
After water, China’s pigs join south-to-north transfer projects to address environmental concerns - Global Times In 2017, the State Council released a document underscoring a major task in rural reform: to control pollution caused by livestock and poultry breeding. China produces nearly 4 billion tons of livestock and poultry waste every year, and pig waste in particular comprises a large part of that. To fight pig pollution, the Chinese government has ordered the closure of thousands of pig farms in banned areas or their relocation into northeastern areas. These nationwide "livestock farming ban zones" cover 636,000 square kilometers. Traditionally, pigs are raised in the south due to preferential local government policies and more pig-related talents, but provinces in the north including Liaoning, Jilin and Heilongjiang are now designated as new primary destinations, which are expected to be more environmentally capable of handling large piggeries.
Food And Travel
Returnees increase flow of whisky to China - FT $$ Chinese demand for whisky is surging, fuelled not only by rising incomes but also by the tastes of the hundreds of thousands of people returning to the mainland following studies or work abroad. We estimate that imports rose 19.5 per cent last year to 17.4m litres, making 2017 the biggest year since the arrival of President Xi Jinping and his anti-corruption campaign (see chart).