"Cast Aside Illusions And Rely On Ourselves"; More On The Huawei Probe; Xi and Modi Meet In Wuhan; China's Data Protection Regime; Red Tourism Bus Crash In North Korea

The propaganda is ramping up around Xi's inspection tour to Hubei, just ahead of his meeting in Wuhan with Indian Prime Minister Modi. 

The US-China technology war may run much hotter than the overall conflict over trade. Xi continues to make clear that China can no longer rely on foreign technology and must go all out to end its reliance on it. Technology CEOs the world over with supply chain dependencies in China, so probably all of them, should be increasingly nervous and focused on their firms' efforts to have viable contingency plans for a US-China technology cold war. 

Thanks for reading, remember that due to the May Day Holiday in China 4.29-5.2 there will likely be no newsletter Monday. 

The Essential Eight

1. "Cast Aside Illusions And Rely On Ourselves"

So said Xi during his Hubei inspection tour, talking about the need to end reliance on foreign core technology. 


总书记对企业员工说,现在核心技术、关键技术、国之重器必须立足于自己。过去我们勒紧裤腰带,咬紧牙关,还创造了两弹一星。因为我们发挥了另外一个优势,制度优势,集中力量办大事。社会主义一方有难八方支援,下一步科技的攻关要摒弃幻想,靠我们自己。(央视记者 申勇 李铮 史伟 亚阳 哈男 邢彬 鹏飞)

Chris Buckley 储百亮@ChuBailiang

Telling comments from Xi on Thursday:
"In the past we tightened our belts, gritted our teeth, and built the two [atomic and hydrogen] bombs and a satellite...In the next step of tackling technology, we must cast aside illusions and rely on ourselves." https://t.co/0VSSqvzdVO

April 26, 2018
Xi urges stronger independent innovation capacity - Xinhua:

President Xi Jinping has urged stronger independent innovation capacity for China during an inspection to the Three Gorges Dam, saying the country must master the core technology of high-end equipment.

China must rely on its own efforts, Xi said Tuesday at the dam, which lies on the Yangtze River near Yichang City, central China's Hubei Province...

China would not have its leading ability if it had relied on others to build the dam, said Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission.

The great rejuvenation of the Chinese nation can only be achieved through untiring struggle, he said.

During an inspection to a new material industrial park on the Yangtze River, Xi stressed coordination in ecological protection and economic development.

Ecological restoration should be the top priority, Xi said, noting China's mother river must be protected, and any exploitation that is destructive to the environment must be forbidden.

Rejuvenation takes 'hard work' - People's Daily Online:

National rejuvenation will not be easily achieved, and it will need continuous efforts and diligent work, Xi said while praising the contributions of technology workers at the dam.

China could scarcely create a leading role for itself if it had relied on foreign countries to build the Three Gorges Dam, Xi said.

The president said he was proud of the technology workers as well as the country's ability to build such massive projects.

China must develop key technology, and the country's innovation capacity must be improved, Xi said.

Chip wars - China closing in on second $19 billion semiconductor fund: sources | Reuters:

The National Integrated Circuitry Investment Fund, also known as the “Big Fund”, is close to announcing the establishment of a new fund that will focus on boosting local chip production and technologies, according to three people with knowledge of the plans.

Reuters reported this month that Chinese officials were planning to accelerate the development of the domestic chip market, spooked by trade tensions and U.S. sanctions on ZTE Corp (000063.SZ)(0763.HK), a local telecoms equipment firm, that has underscored China’s heavy reliance on imported chips.

Xi's Hubei inspection tour gets the top 20 minutes of the Thursday CCTV Evening News--习近平在深入推动长江经济带发展座谈会上强调 加强改革创新战略统筹规划引导 以长江经济带发展推动高质量发展_CCTV 

2. More On The Huawei Investgation

U.S. probing Huawei for possible Iran sanctions violations: sources | Reuters:

Since at least 2016, U.S. authorities have been probing Huawei’s alleged shipping of U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws, two of the sources said....

The Justice Department probe is being run out of the U.S. attorney’s office in Brooklyn, the sources said. John Marzulli, a spokesman for the prosecutor’s office, would neither confirm nor deny the existence of the investigation. The probe was first reported by the Wall Street Journal on Wednesday...

The probe of Huawei is similar to one that China’s ZTE Corp says is now threatening its survival..

U.S. authorities have subpoenaed Huawei seeking information related to possible export and sanctions violations, two sources said

Question for my smart and knowledgeable readers: Since China clearly sees itself in a technology war and will now double down on indigenous technology development regardless of the outcome of the Huawei investigation or appeals in the ZTE case, might the US move now to cripple Huawei and its 5G plans as it has crippled ZTE? 

Huawei Probe Adds to U.S.-China Trade Tension Ahead of Talks - Bloomberg:

Agents from the Federal Bureau of Investigation, which is overseen by the U.S. Justice Department, have been looking into transactions by Huawei, China’s largest maker of telecommunications equipment, according to two people familiar with the investigation. They are joined by the Treasury Department’s Office of Foreign Assets Control, or OFAC, which enforces sanctions, and the Department of Commerce, which are also looking into the transactions of the Shenzhen, China-based mobile and telecommunications giant.

CBN quotes a Chinese source as saying they don't think the Huawei investigation is directly to the US-China trade disputes but rather is an "individual case"-独家丨中方知情人士确认华为被美司法部调查_第一财经 :


ZTE tells suppliers China trade row may be factor in U.S. ban: source | Reuters:

“It was a factual update on what happened, what they’ve done since the order was put in place, and what they’re doing to remedy the situation,” a Semiconductor Industry Association spokesman said. “There was no discussion of helping ZTE advocate before the U.S. government.”

U.S. companies are estimated to provide 25 percent to 30 percent of the components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks.

China-backed buyout fund founder guilty of insider trading: U.S. court | Reuters:

A partner of a private equity firm with Chinese state backing was found guilty in a U.S. court on Tuesday of insider trading related to the attempted acquisition of Lattice Semiconductor Corp (LSCC.O), prosecutors in New York said. Benjamin Chow, who co-founded Canyon Bridge Capital Partners, was convicted of securities fraud and conspiracy by a jury in Manhattan federal court, according to the office of U.S. Attorney Geoffrey Berman in a statement. Chow is scheduled to be sentenced on Aug. 20 by U.S. District Judge Gregory Woods.

I wonder how many other cases of insider trading off of state funds takes place that is never caught?

凯桥创始人在美获罪 曾主导收购芯片公司 :

美国时间4月24日,美国联邦检察官办公室发布消息:周斌(Benjamin Chow)在筹划上述收购时参与了内幕交易,纽约陪审团裁决他有罪,罪名包括串谋证券欺诈罪和其他七项证券欺诈罪。

His Chinese name is Zhou Bin, seems like a bit of a cursed name over the last few years. 

3. More On The US Visit To Beijing Next Week

Donald Trump sends trade hawks to China as US considers further action against Beijing | South China Morning Post:

US Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro will join Treasury Secretary Steven Mnuchin and National Economic Council head Larry Kudlow in the party that will meet Chinese officials, including President Xi Jinping and vice-president Wang Qishan, on May 3 and 4, a source who is familiar with the situation said...

The source said US companies in China have already felt the chill from the brewing trade war, experiencing problems such as delays to licence approvals and reviews of mergers and acquisitions, as well as longer waits to clear customs.

While it would be easy for China to cut the surplus by importing more US goods, the source said Beijing was less willing to discussing structural issues, such as changes to its industrial policy...

“China won’t stop state-owned enterprises from distorting the market, won’t alter Made in China 2025 and won’t change the way it lends to Belt and Road projects,” the person said.

Beijing Ready to Hit Back if U.S. Curbs Chinese Investments - WSJ $$:

The planned investment restrictions, which are being put together by the U.S. trade representative’s office, are aimed at retaliating against what the Trump administration says are unfair policies by Beijing to restrict U.S. trade in high-tech industries. If imposed, the restrictions would open a new front in an escalating trade battle that has already seen both sides threaten tariffs on each other’s goods.

Trump's divided trade team heads to China - POLITICO:

Cowen’s Chris Krueger has the perfect metaphor for this crew: “It is the Star Wars bar scene of Trump's economic team. … Lighthizer and Navarro share Trump's visceral view on trade: the most important aspect is the goods trade deficit. This is not the view of Mnuchin and Kudlow.

“This sets up a bizarre situation where the U.S. team may spend most of the talks negotiating among themselves. … This trip will be important in creating the framework for future talks, though the central challenge remains in conceptualizing what the ‘ask’ is from the Trump Administration that the Chinese could agree to”

4. Market Opening Moves Too Little Too Late For Many Foreign Firms?

American Express Is Ready to Charge Into China - WSJ:

AmEx’s decision to take on a Chinese partner—instead of forming a wholly owned entity—shows the difficulties foreign firms face in going solo in a market where the government holds sway, said analysts and industry experts. Barriers to foreigners have been high for so long that Chinese institutions now thoroughly dominate many sectors, especially in finance—be they for payment services, credit rating, brokerages or banking—sectors where China has said greater foreign participation would be allowed.

Authorities “aren’t establishing a level playing field,” said Lester Ross, a Beijing-based lawyer at WilmerHale, who advises U.S. businesses operating in China. Instead, he said, they’re “opening a door but only for firms to crawl through.”

Opening the market to foreign card companies was a pledge Beijing made a dozen years ago. It still hadn’t done so when Beijing promised “full and prompt” market access as part of a quick “100-day” market-opening package made after a summit between President Donald Trump and President Xi Jinping a year ago. Credit-rating, brokerage and financial firms are all areas Beijing has over the past year said greater foreign participation would be allowed, but where foreign executives complain that licensing and other regulatory roadblocks leave those promises unfulfilled.

China Mulls Cutting Car Import Duty by About Half - Bloomberg:

The State Council, or China’s cabinet, is weighing proposals to reduce the levy on imported cars to 10 percent or 15 percent, said the people, who asked not to be identified as the information isn’t public. The current rate is 25 percent. An announcement on the decision could be made as soon as next month, they said. The finance ministry didn’t respond to a fax seeking comment.

China prepared for mooted U.S. restrictions on Chinese investment: MOC - Xinhua:

"We have thought about worst-case scenarios and are well prepared for any possibility," MOC spokesperson Gao Feng told a press conference.

Gao made the remarks when asked about China's response towards the possibility of the U.S. government to further restrict investment from China.

5. Xi and Modi Meet In Wuhan

Can the US, Japan and Australia rely rely on India for the "Quad"?

Ananth Krishnan, China correspondent & Associate Editor of India Today, had this to say about this summit earlier today:

Ananth Krishnan@ananthkrishnan

The one-to-one Modi-Xi Wuhan summit will be more substantial than previously thought. Tomorrow, both leaders will meet along with their delegations in the evening, following a one-to-one. Sat. will be more intimate. They will meet five or six times over two days @IndiaToday

April 26, 2018
India’s Modi and China’s Xi gear up for summit - FT $$:

The two days of informal talks — in a lakeside compound where Mao Zedong had a holiday villa in the city of Wuhan — are being described as a chance for the two leaders to clear the air, and set a course for more positive engagement, amid growing international turbulence. 

“The main purpose of the meeting is to bring China-India relations out from under last year’s dark cloud,” said Wang Dehua, an expert on Sino-India relations at the Shanghai Institute for International Studies. Abhijit Singh, a maritime policy expert at New Delhi’s Observer Research Foundation, says Mr Modi’s administration is eager to “recalibrate” relations with China to avoid any major strategic confrontations, especially with India’s national elections next year. 

“India realises there is no way that it can live with so many differences with China,” said Mr Singh. “It needs to find a modus vivendi.” 

Modi-Xi Jinping informal meet in China: What lies ahead for India at Wuhan? - The Financial Express:

Though, both the meeting of foreign ministers and the meeting of defence ministers did not engage in bilateral talks with other member nations of the SCO, it did set the agenda for PM Modi’s China visit. The meeting of Prime Minister Modi and President Xi Jinping will seek to address a number of issues varying from bilateral trading, economy, border stability, regional security and also terrorism. In the aftermath of the Doklam standoff, the top level meeting will also seek to further strengthen ties and iron out bilateral issues. The main agenda of the meet will be to actually build trust between India and China.

When Modi and Xi Meet, Indian Elections Will Set the Tone - The New York Times:

When the leaders of the world’s two most populous nations meet on Friday in the Chinese city of Wuhan, Prime Minister Narendra Modi of India will be pushing to get less from President Xi Jinping of China.

Less trouble like the embarrassing territorial showdown that put the two countries on alert last year. Less worry of the kind India is feeling right now about rising Chinese influence on its doorstep, in Sri Lanka, Nepal and the Maldives.

Analysts say Mr. Modi is fixated on winning next year’s election in India. And it is a measure of the fraught relationship between China and India right now that he is seen as needing Mr. Xi’s help to do that.

Narendra Modi, Xi Jinping to meet in Friday's other big summit - CNN:

India too will be looking to reduce its reliance on the US, suggest analysts, who point to Trump's increasingly aggressive trade policies as a source of growing concern within Indian economic circles.

"If you're not friendly with China, the US -- especially under Trump -- will finish you off and give you a very bad bargain," said Madhav Das Nalapat, director of the geopolitics department at Manipal University in India. "If you're not friendly with the US, China will roll over you."

"So if you want a healthy relationship with China or the US, you need healthy relations with both," he added. "We need the US on security and China for commerce and trade."

Dancing with the Dragon? Deciphering India’s 'China Reset' - Tanvi Madan - War On The Rocks:

China has already described the summit as “historic.” But it’s important to keep it in perspective. After two and a half years of either iciness or high heat, this is an attempt to reset the temperature of the Sino-Indian relationship. Yet serious underlying structural issues remain that defy speedy solutions and will prevent a strategic shift. From India’s perspective, these include the boundary issue, the China-Pakistan relationship, intractable—even if not irreconcilable—differences involving their overlapping peripheries, and what Delhi sees as Beijing’s desire for a unipolar Asia. The summit can set the stage for the two countries to reset their terms of engagement, but moving from a tactical to a major strategic reset will require a lot more, including a significant change in Chinese and Indian perceptions of themselves and their role in the world, and of each other...

Given this, the reset should be seen not as India moving from competition with China to engagement, but rather as an attempt to develop its own version of competitive engagement with China. ..It can also have substantive consequences if China—and India’s partners in the region and beyond—believe India is going into this from a place of weakness and wants the dance more than China does.--Tanvi Madan is director of The India Project and a fellow in the Project on International Order and Strategy in the Foreign Policy program at the Brookings Institution.

6. When Will The Muslim World Care About The Massive Repression In Xinjiang?

At some point will the growing Xinjiang crackdown lead to real anger in the Muslim world? And does the West care a little less about what is going on in Xinjiang because the affected are Muslim?

'Eradicate the tumours': Chinese civilians drive Xinjiang crackdown | AFP:

The civilian group descended on the village under government instructions to "win the people's hearts", but it also had a darker mission: identifying and punishing threats to the Chinese state.

Four months after the Communist Party sent the "work team" to Akeqie Kanle, a fifth of its adult population -- over 100 people -- had disappeared into detention and re-education centres...

The team -- comprising staff from a regional university -- was among more than 10,000 such groups that poured into rural Xinjiang last year as part of the government's battle against separatism and "religious extremism" in the region, home to several Muslim ethnic minority groups.

Prominent Uyghur Scholar Detained in Xinjiang Capital Urumqi: Official - RFA:

Authorities in northwest China’s Xinjiang Uyghur Autonomous Region (XUAR) have detained prominent Uyghur professor and poet Abdulqadir Jalaleddin and are believed to be holding him in one of the region’s many “political re-education camps,” according to a local official.

On Monday, Munich-based World Uyghur Congress issued a statement condemning the detention of Jalaleddin, citing reports that police had raided his home on Jan. 29, placed a black hood over his head and arrested him.

10,000 Xinjiang students recite classics to promote traditional culture - Global Times:

Zhu Weiqun, head of the Ethnic and Religious Affairs Committee of the National Committee of the Chinese People's Political Consultative Conference, told the Global Times that because Chinese traditional classics are mutual culture and an asset of all ethnic minorities in China, ethnic minorities should and have the right to learn them.

"Promoting traditional culture among Xinjiang students contributes to ethnic unity, and could help broaden their vision and future career," Zhu said.

7. China's Data Protection Regime

An informative piece from one of the top foreign experts on the topic.

What the Facebook Scandal Means in a Land without Facebook: A Look at China’s Burgeoning Data Protection Regime | Samm Sacks - Center for Strategic and International Studies:

Our previous CSIS commentary analyzed the first milestone in China’s data protection system—a standard called the Personal Information Security Specification (the “Specification”) in late 2017. Drawing on exchanges with the lead drafter, we looked at how the drafters modeled the Specification on the European Union’s General Data Protection Regulation (GDPR) but sought to make a standard that was more business friendly, in part, so as not to inhibit the development of AI...

China’s lead cybersecurity standards body is preparing to issue implementation guidelines for when the Specification takes effect May 1. In this post, we identify some of the key issues to watch for as data governance takes shape in China...

Despite more visible demands by the public for personal data protection, it is not clear whether the new rules apply only to companies or also to the government. It appears that there are two distinct ways to interpret the emerging concept of data privacy in China. The Specification appears to focus on service providers’ protection of personal information. ..

At the same time, the government appears to operate under a separate framework in which provisions under the Counterterrorism Law and the Cybersecurity Law expand access to personal data. This means that even as companies face greater restrictions for collection and sharing of personal data, the Chinese government has new authorities and tools to do so.

8. Bloody End To Red Tourism Trip To North Korea

Chinese tourists killed in North Korea bus crash were on ‘red tour’ marking Communist Party’s Korean war role | South China Morning Post:

The 32 Chinese and four North Korean officials who were killed in a bus crash in North Korea were part of a “red tour” commemorating the Chinese Communist Party’s Korean war role while observing the 65th anniversary of the war’s armistice...

The tour was organised by Xinghuo, a Beijing-based tour operator, the company confirmed to the South China Morning Post. ..

The tour company was formed by people sympathetic to the cause of the Maoist rebel group Utopia, known in Chinese as Wuyouzhixiang.

China’s government shut down Utopia’s website in 2012.

A relative of one of the tourists on the bus told the Post that Utopia’s editor-in-chief Diao Weiming had been the tour guide.

The trip’s purpose was to “commemorate the great achievements of the Chinese voluntary combatants [in the war]”, according to a March advert in March on Xinghuo’s official WeChat account.

Kim saw off the bodies onto the train back to China. Video--在朝遇难中国游客遗体和伤员送返国内 金正恩亲自送行 

Business, Economy, Finance And Trade

PBOC Warns Payments Giants They're Not Too Big for Regulation - China Banking News The Chinese central bank has issued a stern warning to the country’s payments giants against using their exorbitant scale to flout government regulations in relation to barcode-based technology and user security. Fan Shuangwen (樊爽文), vice-head of the People’s Bank of China Payments Department, said that Chinese payment groups must refrain from “thinking  of ways to overlook regulations,” and warned that the sector’s leading enterprises “cannot think that they’re too big to be regulated.” // Comment: But don't expect any firms to be able to get meaningful enough market share to challenge them.

China's Bolstering Lenders for New Assault on Shadow Banking - Bloomberg: Investors who pushed up Chinese bank shares last week on news of lower reserve requirements may have been celebrating too soon. The subtext to Tuesday’s move is an effort to prepare the banks for a painful new phase in China’s campaign to reduce financial-sector risks, as regulators free up deposit rates and accelerate their crackdown on the nation’s $16 trillion shadow banking sector. “China is gearing up to crack a hard nut with deleveraging and financial reforms, and the central bank is offering some coordinated policies to ensure it will be a smooth transition,” said Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong.

Regulators Vow to Support Capital-Raising by Home Rental Companies - Caixin Global Regulators will encourage companies to sell securities backed by rental housing assets, promote various debt-like securities products for home rental companies and launch a real estate investment trust (REIT) pilot program, the country’s securities regulator and housing ministry said Wednesday in a joint statement (Link in Chinese).

Growth Picks Up at World’s Largest Money Market Fund - Caixin Global Yu’e Bao, controlled by Alibaba affiliate Ant Financial Services Group, increased its assets to 1.69 trillion yuan ($267 billion) at the end of the first quarter, up 6.92% from the end of last year, according to a quarterly report from fund manager Tianhong Asset Management Co. Ltd. On average, China’s money market funds grew 23.69% and 6.79% quarter-on-quarter in the third and fourth quarters of 2017, according to data from the Asset Management Association of China (AMAC). In comparison, Yu’e Bao grew at 8.9% and 1.29% quarter-on-quarter during the same periods. AMAC has not released first quarter data, but estimates the money market fund industry grew by 15.89% during the first two months of this year.

China Huarong Starts Shedding Assets - Caixin Global Huarong International Financial Holdings Ltd., which has dubbed itself China Huarong’s first multilicensed, overseas-listed financial holdings platform, is shedding its stake in a residential real estate development project at a metro station in Hong Kong through a wholly owned subsidiary, it said in a filing with the stock exchange in the special administrative region.

湖南高规格金融会议对隐性债务出狠招:停缓调撤严把四道关_第一财经 Hunan holds a meeting on preventing and reducing risks from local government debt, Party Secretary looks like he is taking his responsibility seriously, or at least the risk that his career will be in trouble if he has problems under his watch  //  为了防范化解隐性债务,近期湖南省召开了罕见高规格金融工作会议,湖南省委书记、省人大常委会主任杜家毫强调,要坚持守土负责、主动作为,采取强有力举措严密防范和化解政府债务风险。 湖南采取“停建一批、缓建一批、调减一批、撤销一批”来化解存量债务,严控债务增量。并通过严把土地供应、项目管理、企业债券发行和平台公司整改四大关口来防范地方政府债务风险。

China warns Chile against blocking $5bn SQM lithium deal - FT $$ The Chinese government has criticised a move by regulators in Chile to try to block the sale of a $5bn stake in the country’s largest lithium producer to a Chinese company, saying it could harm bilateral relations. The comments could ease the way for China’s Tianqi Lithium to buy 32 per cent of Chile’s SQM, the world’s second-largest producer of the metal, a key material in batteries, which has been put up for a sale by a Canadian company called Nutrien.


Politics, Law And Ideology

Video: 'I will not accept gov't-appointed lawyer unless tortured,' arrested Chinese lawyer Yu Wensheng says | Hong Kong Free Press HKFP An undated video has emerged of human rights lawyer Yu Wensheng stating – before he was detained – that he would never give up the right to choose his own attorney. Yu Wensheng, who persistently called for reform in China, was seized by around a dozen people, including a SWAT team, as he left his Beijing apartment to walk his son to school in January. He circulated an open letter calling for constitutional reforms in China hours before his arrest.

China's top legislature in session, Criminal Procedure Law to be amended - Xinhua Shen Chunyao, chairman of the Commission for Legislative Affairs of the NPC Standing Committee, said the revision would codify default judgment, and leniency for guilty pleas, as well as expedite trial practices. The default judgment, for example, will be used against suspects and defendants in corruption or bribery cases who have fled abroad as authorities step up the fight against corrupt fugitives. The legislation plans to strengthen efforts to catch overseas fugitives.

China to streamline travel document applications with just one visit - ECNS China will adopt a one-visit-only policy to streamline travel document applications nationally starting May 1, said Qu Yunhai, deputy director of the State Immigration Administration under the Ministry of Public Security. Applicants for passports, and permits for travelling to and from Hong Kong, Macao and Taiwan, can complete their applications with one visit to the exit-entry administration office.

董经纬出任国家安全部副部长 此前长期在河北工作_网易新闻 Dong Jingwei is now a vice minister ofstate security, previously he was head of Hebei provincial department of state security


Foreign and Military Affairs

Macron: Meeting Dalai Lama would spark 'crisis' with China - AFP  French President Emmanuel Macron on Wednesday rejected the prospect of meeting with the Dalai Lama, saying doing so without consulting Beijing first would trigger a "crisis" with China's government. Macron, speaking at a town hall with George Washington University students in the US capital at the tail end of his state visit, said he met in Paris with the "very inspiring" exiled Tibetan spiritual leader when Macron was a candidate. // Comment: Macron is the winner of this month's Profiles in China Cowardice Award

China’s New Aircraft Carrier Is Already Obsolete – Foreign Policy - Sam Roggeveen China may be betting that the United States won’t need to be pushed out of Asia, at least not by a frontal challenge to its naval power. Rather, the United States will slowly withdraw of its own accord because the cost of maintaining that leadership is rising so dramatically. Consider America’s defense commitment to Taiwan. Before China’s massive investment in anti-ship capabilities, the United States could safely sail its carrier through the Taiwan Strait, and its ability to defend Taiwan remained unquestioned. Now, the United States would be at serious risk of losing one or two carrier battle groups in any confrontation over Taiwan. The cost of defending South Korea has risen steeply, too, with North Korea close to deploying a nuclear-tipped missile that can reach cities on the continental United States, if it hasn’t already.

The China – India – Nepal Triangle | The Diplomat China wants to invest in big connectivity projects in Nepal but prefers to bring its Asian competitor, India, on board. Some Nepali and Chinese scholars see this as an opportunity for trilateral cooperation between Nepal, India, and China, but Indian policymakers and academics have not shown much interest. Chinese engagement in Nepal is sharply increasing with new areas of cooperation, making India uncomfortable. India views Nepal as its traditional sphere of influence, and wants to contain Chinese influence. Thus New Delhi is rejecting the proposal for trilateral cooperation, originally floated by China and later backed by some academics and political leaders in Nepal.

Dongfeng-26 ballistic missile commissioned: Defense Ministry - Xinhua The Dongfeng-26 ballistic missile has been commissioned into the People's Liberation Army (PLA) Rocket Force, said Wu Qian, spokesperson with China's Defense Ministry, on Thursday. The new medium- and long-range ballistic missile was completely developed by the Chinese and will serve for nuclear strikes in short notice and conventional precision strikes, against targets on land and large- and medium-sized warships, Wu said at a press conference. 国防部:东风-26型导弹列装火箭军部队 

China flexes muscles with 'Guam killer' missile; new drills near Taiwan | Reuters China confirmed on Thursday that it had put into a service a new missile that Chinese media has dubbed the “Guam killer” for its ability to hit the U.S. Pacific Ocean base with a conventional or nuclear weapon.

Malaysia's election a de facto vote on China | Asia Times Though Mahathir’s swipes are nationalistic in tone and tenor, many regard the former premier’s remarks as race-based politicking that appeals to fears of Chinese economic domination to galvanize ethnic Malay support. Ethnic Malay politicians who play the race card have long complicated relations with Malaysia’s large ethnic Chinese minority, representing around 22% of the population. Najib defends his ties to China as enabling robust economic growth. The premier alleges in turn that Mahathir, his former mentor, has allowed himself to become a puppet of ethnic Chinese opposition leader Lim Kit Siang, head of the Democratic Action Party. Najib has also played up fears of Islam’s erosion and the loss of Malay political power should Umno lose at the polls.

Did Air Force B-52 Bombers Just Practice an Attack on China? | The National Interest Blog A pair of US B-52 Stratofortress strategic bombers reportedly flew within 250 kilometers of Guangdong’s coastline in southern China on Tuesday afternoon, according to Taiwan media and Aircraft Spots, a Twitter group that tracks aircraft movement and the deployment of the US Air Force. The two long-range bombers, bearing registration numbers 57-1454 and 60-0360 with call signs HERO01 and HERO02, were spotted above the Bashi Channel between Taiwan and the Philippines and were believed to have come from the US outpost of Guam. 美军B-52轰炸机“飞近”广东沿海?国防部这样回应 

Makeover: An Event in DC Tries to Rehabilitate the Image of Confucius Institutes | National Association of Scholars Yesterday the Confucius Institute US Center sponsored an event at the National Press Club on the “future of educational exchanges between China and the U.S.” The panelists offered a reassuring picture of the role played by Confucius Institutes on American college and university campuses, and predicted an even more uplifting future, with Confucius Institutes playing a key role in introducing American students to Chinese language and culture.

China lays out its ambitions to colonize the moon and build a “lunar palace” — Quartz Inspired by the thousand-year-old fairy tale, China has ambitions to build a real-life lunar palace on the moon, according to its space agency. The China National Space Administration released a video (link in Chinese) on April 24, the country’s third space day, laying out its plans to build a scientific outpost on the moon. “China’s dream of residing in a lunar palace will soon become a reality,” said the video, which recapped the country’s achievements and plans in space.

Chinese American scientist 'victim of a gross injustice': U.S. judge - XInhua Chinese American scientist Sherry Chen, who was wrongfully arrested and fired due to baseless spying claims several years ago, is the "victim of a gross injustice", a U.S. judge ruled on Tuesday. The U.S. Department of Commerce did not have cause to fire Chen, said Chief Administrative Judge Michele Schroeder of the Merit Systems Protection Board (MSPB), ordering to reinstate her employment at the department's National Weather Service (NWS) and pay her back pay plus benefits.

China uses students as spies - Washington Times Bill Evanina, director of the National Counterintelligence and Security Center, a DNI agency, said recently that China poses a broad-ranging foreign intelligence threat that includes the use of academics, students, cyberespionage and human agents to steal secrets from the government and private sectors. “I look at the China threat from a counterintelligence perspective as a whole-of-government threat by China against us,” Mr. Evanina told a conference last week at The Aspen Institute. “We allow 350,000 or so Chinese students here every year,” he said. “That’s a lot. We have a very liberal visa policy for them. Ninety-nine point nine percent of those students are here legitimately and doing great research and helping the global economy. But it is a tool that is used by the Chinese government to facilitate nefarious activity here in the U.S.”

Don Blankenship, West Virginia Candidate, Lives Near Las Vegas and Mulled Chinese Citizenship - The New York Times Mr. Blankenship, a Republican loyalist of President Trump, is running an America First-style campaign and calls himself an “American competitionist,” but he admires China’s state-controlled economy and has expressed interest in gaining Chinese citizenship.

This satire Twitter account nailed it:

The Relevant Organs@relevantorgans

Kind words, comrade Blankenship, but we already have sufficient corrupt, provincial, ass-kissing coal barons. We're not accepting applications. https://t.co/yuUxhGwCfk

April 25, 2018

Hong Kong, Macao

China anti-corruption drive stretches to Hong Kong - FT $$ Staff at several subsidiaries of China Huarong Asset Management in Hong Kong were required last Friday to surrender personal travel documents to the company by Monday this week or face unspecified punishments, according to emails and documents obtained by the Financial Times. The demand followed news last week that Lai Xiaomin, Huarong’s chairman, was under investigation by Chinese authorities for “severe disciplinary violations”, a phrase that usually refers to corruption.


Tech And Media

Video | McKinsey & Company - Kai-Fu Lee: Who's winning AI race, China or the US? Kai-Fu Lee, Chairman and CEO of Sinovation Ventures and President of Sinovation Venture's Artificial Intelligence Institute, in conversation with McKinsey Global Institute partner Michael Chui on who’s winning the AI race. // Comment: How did Lee get back in Beijing's good graces after all the problems he had with his Weibo activity a few years ago?

Alibaba is bypassing Amazon in China - Axios Brion Tingler, an Alibaba spokesman in the U.S., said the company was selling 7,000 U.S. brands in China as of last year, led by Apple, but wants more. "We have no designs on the U.S. consumer but we want to help U.S. companies sell to the Chinese consumer," Tingler tells Axios. Alibaba's system, called Gateway, introduces U.S.-based merchants, big and small, to the Chinese market. Independent agents linked to Alibaba do the actual merchandising, payments and logistics — shipping sold goods to China.

Qualcomm Forecast Shows Chinese Phone Market on the Mend - Bloomberg Qualcomm said smartphone chip orders are showing signs of life in China after slumping at the end of last year. Concern about the market deepened in recent weeks after lackluster results from other suppliers to handset makers, especially Apple Inc.

China's smartphone market plunges; Apple falls out of the country's top-4 sellers - CNBC China's smartphone sales saw a record decline in the first quarter of 2018, according to a new report by independent analyst company Canalys. According to the report published Thursday, smartphone shipments in China saw a 21 percent decline annually to 91 million units, with eight of the top 10 vendors experiencing a fall in sales.

Pony.ai Q&A: Having a China background will be key to autonomous driving success · TechNode Pony.ai (小马智行) is developing cars capable of Level 4 autonomous driving. That means fully self-driving, with no human input. Fully autonomous testing started on the Nansha island in Guangzhou this February, the first time on public roads in China. The company also signed a deal with Guangzhou Automotive Group, the country’s number two car maker. Pony.ai is headquartered in California, but when we caught up with co-founder (and champion coder) Lou Tiancheng in Beijing, he explained how and why they’re actually a China-first company

Goldman Sachs Leads $300M Round In Chinese Online Used-Car Auction Platform Renrenche – China Money Network Goldman Sachs has led a US$300 million new financing round in Chinese online used-car trading marketplace Renrenche, with existing investors Tencent Holdings Ltd. and Didi Chuxing participating, the company announced today.

Tencent Wipeout Topping $118 Billion Shows Depth of Tech Gloom - Bloomberg The shares fell as much as 2.5 percent on Thursday to drop below their 200-day moving average for the first time since 2016. The Shenzhen-based giant, Asia’s biggest company by market value, has now tumbled more than 20 percent since its Jan. 23 high, losing some $118 billion. To put that into context, fewer than 3 percent of Europe’s biggest companies are worth that much.

Xbox China general manager Xie Enwei resigns after 24-year tenure - Technode Microsoft’s response to media’s inquiries on this matter confirmed Xie’s resignation without giving reasons for his leave. “During the past 24 years, Xie worked with total devotion. We are thankful for all his work and hope he can achieve something even greater in the future,” said the company. After joining Microsoft in 1994, Xie led the company’s tool and server team and marketing and operations unit. But he is more widely known as the head of Microsoft’s Xbox business in China.


Society, Art, Sports, Culture And History

China’s Realtors Are Making Money From Our Social Ills - Sixth Tone The ad featured two girls, dressed all in white, lying next to each other on a verdant lawn. On the left-hand side of the image, a slogan declared: “Your daughter’s best friend is a city director’s kid.” From April 14, the ad was widely publicized on social media. Online outlets and web users alike roundly condemned the commercial, claiming that Zhongliang was making money off the suggestion that the neighborhood was popular among certain municipal government officials. In a Chinese context, such suggestions often hint at deep-seated social ills: On the surface, they imply that the development is beautiful, secure, and popular among the country’s well-heeled social elite. But underneath, the commercial subtly plants the idea that homeowners might cultivate powerful connections and receive preferential treatment from city governors.

Shanghai Professor Suspended Over Sexual Harassment Allegations - Caixin Global: The global #MeToo movement has claimed a victory in China after a prominent academic at the prestigious Shanghai Jiaotong University was removed from his post over alleged sexual harassment. Xie Yungeng, a deputy dean of the university’s School of Media and Design was found to have used “inappropriate language and behavior” in his contact with students, according to Li Benqian, dean of the school. As a result, Xie will no longer serve as a deputy dean and has been suspended from his teaching position, Li told a meeting of teaching staff of the school’s Department of Journalism and Communication on Wednesday, where Xie taught.



Energy, Environment, Science And Health

Fishy business: Mexico arrests Chinese traveler transporting endangered totoaba | The Guardian Mexico City police found 416 totoaba swim bladders, prized for their purported rejuvenating qualities, in passenger’s suitcases

China to focus air pollution battle on key areas - Xinhua China plans even more measures to help defeat air pollution in regions including the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Fenhe-Weihe plain. Delivering an environmental report to the ongoing bimonthly session of the National People's Congress Standing Committee, Li Ganjie, Minister of Ecology and the Environment, said air quality had improved in many regions in 2017 and there would be no let up in work in 2018.



China's VIPKid Is Raising Funds at Over $3 Billion Value - Bloomberg China’s VIPKid is finalizing a deal to raise about $500 million at a valuation of more than $3 billion, according to people familiar with the matter, a price tag that could make it the world’s largest online education startup.

China-based online education companies just launched an aggressive hiring spree in search of U.S. teachers | TechCrunch According to one of its job listings today, teachers are paid on average between $14 and $18 an hour and the openings are available to candidates who are eligible to work in the U.S. or Canada, have a bachelor’s degree in any field, and have at least one school year of traditional teaching, mentoring, or tutoring experience.



Beijing relaxes rules on school entry for renters' children - China Daily According to the proposed plan released by Beijing Education Commission on Wednesday, a school-age child who is a permanent resident of the city and lives in a rented home can enroll at a primary school nearby. The plan is designed to give young people who don't have their own house more options for their children's education, said Feng Hongrong, an official from the city education commission. The rule targets children from a family who lives in one district and has the family members' hukou, or permanent residence, registered in another one.