China angle to US tariffs on steel; Bumps and holes along the Belt & Road; Yuan globalization; Financial regulation; Giant salamanders
Happy Tuesday...Good luck to the kids taking the future-defining Gaokao exams this week.
The tax-evasion scandal that appears to be engulfing some film stars looks like it is not going away anytime soon. Fan Bingbing especially may have a problem given her earnings. There is a Wechat message going around purportedly from an ex-wife of a famous director claiming that the tax investigators should just check the bank accounts of Fan’s mother and they will find at least 500m RMB in unreported income. True or not I do not know but given the amounts of money involved in China’s film industry and the political complexity of the industry it is very interesting that this is suddenly in the spotlight.
Thanks for reading.
The Essential Eight
1. The China angle to US tariffs on steel from allies
How China Skirts America’s Antidumping Tariffs on Steel - WSJ:
As the Trump administration ramps up its fight against Chinese steel and Commerce Secretary Wilbur Ross ended trade talks with Beijing over the weekend without a settlement, U.S. officials are confronting a strategic shift from China’s state-backed manufacturers. For the past several years, they have been shutting production at home and expanding overseas, fueled by tens of billions of dollars from Chinese state-owned lenders and funds...
By owning production abroad, Chinese steelmakers aim to gain largely unfettered access to global markets. Their factories back in China are constrained by steep tariffs imposed by the U.S. and numerous other countries—largely before President Donald Trump took office—to stop Chinese steelmakers from dumping excess production onto world markets. But their factories outside China face few so-called antidumping tariffs...
Analysts and Western government and industry officials say Chinese manufacturers are receiving hundreds of billions of dollars of state support to build and purchase plants on foreign soil, through money provided by institutions such as China Development Bank, Bank of China and funds like China Investment Corp. The overseas plants are likely to be tapped as exclusive suppliers for the “One Belt, One Road” initiative, Beijing’s trillion-dollar infrastructure plan to project economic influence across Eurasia and Africa.
2. Bumps and holes along the Belt & Road
Malaysia to probe Najib govt's $2-bln payments to Chinese pipeline firm | Reuters:
Malaysia’s finance minister on Tuesday announced plans to report to the anti-graft agency upfront payments of billions of ringgit the previous administration made to a Chinese firm for two pipeline projects that have barely begun.
Since taking office two weeks ago, Lim Guan Eng has been driving a campaign to expose financial scandals in the administration of former Prime Minister Najib Razak...
Lim said the contracts were negotiated directly by Najib’s office, and the former prime minister had ignored red flags raised by the attorney-general’s office on both deals
Comment: This could be problematic for Beijing as it relates to its Belt and Road Initiative. Is there a possibility that China been paying off target countries' leaders and their families? If so, would Western countries have evidence of that corruption and influence buying?
Myanmar risks falling into a China debt trap | Asia Times - Bertil Lintner:
To understand China’s top priority in Myanmar, forget Beijing’s involvement in the country’s sputtering peace process, or efforts to restart its backed but now suspended US$3.9 billion Myitsone hydroelectric dam, or even securing rights to extract copper at the locally resisted Letpadaung mine outside of Mandalay.
Those are all subordinate interests to what China really wants in Myanmar: economic and strategic access to the Indian Ocean through a deep-water port at Kyaukpyu in Myanmar’s western Rakhine state, a crucial link in Beijing’s US$1 trillion Belt and Road Initiative (BRI). ..
Of China’s two corridors to the Indian Ocean, the one through Myanmar is more important for trade and at least equally important when it comes to long-term strategic influence, which China needs to secure its oil imports from the Middle East and trade routes to and from Africa and Europe.
It is through Myanmar, not Pakistan, that China has built oil and gas pipelines, an important strategic hedge that allows it to bypass the potentially vulnerable chokepoint at the Malacca Strait
Uncertainty deepens over US$1.8bn Belt and Road scheme after Nepalese energy minister appears to contradict colleague over whether deal to build it will be scrapped
Chinese firms plan huge investments in Peru - China Daily:
Reuters reported last week that COSCO Shipping Holdings Co, the container shipping and terminal operation unit of China COSCO Shipping Corp, plans to build and operate a $2 billion port on Peru's Pacific coast, part of $10 billion upcoming Chinese investments in the country.
The proposed port is located in Chancay, a town 58 km north of the Peruvian capital Lima, and is owned by Peruvian miner Volcan Minera. Volcan said in its earnings statement in May that it was seeking a strategic partner for the Chancay project, according to the Reuters report.
Jia, the Chinese ambassador, also said that China Railway Engineering Corp plans to build a port in the southern town of Ilo, the capital of a copper-rich mining region.
3. Yuan globalization rebooted?
It seems a stretch that this can get much traction when the currency is still so controlled and the capital controls still so strong.
China Revives Its Push to Make the Yuan Go Global - Bloomberg:
After more than two years on the back-burner, there are signs that China is once again focusing on its efforts to increase the yuan’s status in global finance.
Since May, initiatives from the central bank and government have included:
Starting full operation of a new phase of an international payment system, extending its running hours;
Making it easier for overseas lenders to borrow the yuan, to help facilitate foreign investments in onshore bonds and stocks;
Signaling the resumption of a program for mainland investors to buy offshore assets with the yuan that’s been on ice since 2015
China’s Not Feeling the Yuan Market Love - Bloomberg:
The relationship between the value of the yuan and the U.S. dollar has broken down in the first few months of 2018, raising questions over the actions and objectives of China’s central bank...
If Chinese authorities are trying to support the yuan to weaken Trump administration allegations of currency manipulation, they can just as easily decide at some point to push it down. What Beijing fails to grasp is that manipulation is manipulation, whether the desired direction is up or down.
4. No US official VIP to attend opening ceremony of new AIT building in Taiwan
The Trump-Kim summit starts at 9AM June 12 so there is no time for a senior national security official to make the opening ceremony and then fly 4-5 hours to Singapore for the summit. But maybe someone might stopover on the way home, depending on how the talks go?
At delicate moment, U.S. weighs warship passage through Taiwan Strait | Reuters:
U.S. officials told Reuters that the United States had already examined plans for an aircraft carrier passage once this year but ultimately did not pursue them, perhaps because of concerns about upsetting China.
The last time a U.S. aircraft carrier transited the Taiwan Strait was in 2007, during the administration of George W. Bush, and some U.S. military officials believe a carrier transit is overdue...
Separately, it now appears unlikely the United States will send top officials to a June 12 dedication ceremony for the new American Institute in Taiwan, America’s de facto embassy in Taiwan. Washington does not have formal ties with Taipei...
U.S. officials told Reuters that the date clashes with the planned June 12 summit between Trump and North Korean leader Kim Jong Un, but added there will be another opportunity to commemorate the institute’s unveiling in September.
答：我们多次强调，台湾问题是中美关系中最重要最敏感的核心问题。美方应切实恪守一个中国原则和中美三个联合公报规定，慎重处理涉台问题，以免损害中美关系和台海地区和平稳定。
New York Times - Don’t Call It an Embassy: U.S. Gives Its Taiwan Ties a $250 Million Upgrade
5. Another suspected spy PRC nabbed in the US
Former Defense Intelligence Officer Arrested for Attempted Espionage | OPA | Department of Justice:
Ron Rockwell Hansen, 58, a resident of Syracuse, Utah, and a former Defense Intelligence Agency (DIA) officer, was arrested Saturday afternoon on federal charges including the attempted transmission of national defense information to the People’s Republic of China. The FBI agents took Hansen into custody while he was on his way to Seattle-Tacoma International Airport in Seattle to board a connecting flight to China...
Between 2013 and 2017, Hansen regularly traveled between the United States and China, attending military and intelligence conferences in the U.S. and provided the information he learned at the conferences to contacts in China associated with the PRCIS. Hansen received payments for this information by a variety of methods, including cash, wires and credit card transactions. He also improperly sold export-controlled technology to persons in China. From May of 2013 to the date of the complaint, Hansen received not less than $800,000 in funds originating from China.
Comment: For that much money wouldn't he have had to give the Chinese some very valuable intel? The full complaint is interesting
Here is his LinkedIn profile.
U.S. Army Veteran Tried to Spy for China, Officials Say - The New York Times:
In the complaint, the Justice Department said that Mr. Hansen told an American undercover agent in April that China would pay $200,000 for the operations plan of the American military regarding “potential military intervention with China.” Earlier, he had told an undercover agent that China was interested in material about North Korea, investigators said.
On Saturday, Mr. Hansen flew from Utah to Seattle, where he had a connecting flight to China from the Seattle-Tacoma International Airport, the complaint said. During his layover, he met with a former associate who was assisting the F.B.I. in what turned out to be a sting operation. In a car near the airport, Mr. Hansen took notes on classified documents that the associate provided, and said that they would be valuable in discussions with Chinese intelligence, the complaint said.
6. Maybe not deleveraging yet but clearly trying to reduce risk and growth in leverage
China Takes Aim at Excessive Corporate Financing - Caixin Global:
China will require banks lending to the same company to share information of the borrower and jointly set a limit of the total credit the firm may get, in a bid to rein in excessive financing as the government’s deleveraging campaign rages on...
Lenders must establish a “joint credit granting mechanism” for a corporate borrower if the company has borrowed over 5 billion yuan ($780 million) combined from more than three banks, the China Banking and Insurance Regulatory Commission (CBIRC) said in rules (link in Chinese) published Friday...
Under the mechanism, banks will also share knowledge of the borrower’s overall debt buildup, its actual controller and unreported affiliated companies; cross-check with each other the firm’s business and financial records; assess its real financing needs and the maximum amount of debt it will be able to pay back; and take measures jointly to tackle possible risks, according to the rules.
中国银行保险监督管理委员会关于印发银行业金融机构联合授信管理办法（试行）的通知
Banks Use Principal-guaranteed Structured Deposits As Replacements for WMP's - China Banking News:
Chinese banks continue to make increasing use of structured deposits as a means of shoring up funding sources, following the launch of new asset management regulations that have undermined the viability of wealth management products (WMP’s).
China launched a new set of landmark asset regulations in April that specifically target the “implicit guarantees” undergirding financial vehicles such as WMP’s, which have long been a staple of the Chinese shadow banking sector.
The new regulations forbid Chinese banks from selling principal-guaranteed WMP’s to clients, depriving smaller lenders in particular of a key channel for accessing funds.
Bankers have proven tireless in their search for opportunities to engage in “regulatory arbitrage,” however, with recent reports indicating that many Chinese lenders are already turning to other products such as structured deposits and large-denomination certificate of deposit as replacements for WMP’s
Ant Financial shifts focus from finance to tech services: sources | Reuters:
Ant Financial Services Group,the dominant Chinese fintech company, is shifting its main focus to technology services and away from payments and consumer finance as Beijing’s crackdown on financial risk deepens, four sources with knowledge of the matter said..
The company, which is controlled by the Chinese billionaire Jack Ma, plans to accelerate the shift within the next few years, the sources said. They said the move was propelled, in part, by growing regulatory pressure on Ant’s core financial businesses, including payments, micro lending, credit rating and wealth management.
7. More On Proposed Visa Restrictions For PRC Students
Don’t Close the Door on Chinese Scientists Like Me – Foreign Policy - Yangyang Cheng:
Today, in my ninth year working in the United States as a Chinese scientist, those ideals seem much further away. The State Department is expected to adopt new limitations on Chinese researchers in the United States, including the shortening of student visas in high-tech fields and additional security clearances for work visas. This new measure comes on the heels of the National Defense Authorization Act in May, which included a murky provision prohibiting Defense Department grants from going to researchers who participate in China’s talent recruitment programs.
The United States may feel it’s only playing defense in a global cold war over tech. In reality, these policies play into Beijing’s preferred vision of the world. China sees science as a tool of national greatness and scientists as servants to the state. This parochial vision discounts the individual agency and ethical obligations of scientists and runs contrary to the cosmopolitan ideal of science. The United States must uphold those ideals, not create new boundaries.
Who Loses from Restricting Chinese Student Visas? - MacroPolo - Matt Sheehan:
In 2017, a record-setting 480,000 Chinese students who had studied abroad returned home. China’s Ministry of Education estimated that by 2016, around 70% to 80% of Chinese students abroad eventually returned to live in China. That’s roughly in-line with the results of a Purdue University survey of students’ post-graduation plans: 57% planned to return to China after a few years in the United States, 9% wanted to return to China immediately, and only 13% hoped to stay in the United States indefinitely (21% said they didn’t know).
That reversal has been particularly pronounced in Silicon Valley. When I began reporting on China-Silicon Valley connections in 2013, it was rare to find a Chinese engineer who had given up a plush job at Google or Facebook to found a startup in China. But in the past five years the tide has turned, and Chinese technologists are returning homein droves. Top Beijing startups are now frequently staffed by students who graduated from elite US computer science programs and worked several years at places like LinkedIn or Uber.
8. Giant Salamanders farmed into extinction in the wild
China’s Giant Salamanders Pose a Conservation Conundrum - The New York Times
The Chinese giant salamander [中国大鲵], the world’s largest amphibian and a critically endangered species, has quietly slipped toward extinction in nature. Following an exhaustive, yearslong search, researchers recently reported that they were unable to find any wild-born individuals...
Millions of giant salamanders live on farms scattered throughout China, where the animals are bred for their meat. But another study by Dr. Turvey and his colleagues shows that reintroducing farmed animals is not a simple solution for saving the species in the wild.
In the wild, Chinese giant salamanders were not just one species but at least five, and perhaps as many as eight. On farms, they are being muddled into a single hybridized population adapted to no particular environment...
As with so many other protected species in China, poaching is the main threat to giant salamanders, which can weigh up to 140 pounds. Unlike pangolins, tigers and rhinos, however, salamanders were never historically valued as meat, trophies or medicine.
“Traditional knowledge associated them with bad luck and dead babies,” Dr. Turvey said. “They were animals you didn’t want to go near.”
That changed in the mid-20th century when famine forced people to turn to alternative food sources. By the 1990s, giant salamander meat had been rebranded as a luxury food item in China, and government-subsidized salamander farms began popping up around the country.
Business, Economy, Finance And Trade
Trump Said to Plan Meeting With GOP Concerned on China Stance - Bloomberg The meeting, called by the administration, includes Senate Majority Whip John Cornyn of Texas and Mike Crapo of Idaho, the chairman of the Banking, Housing and Urban Affairs Committee, according to the people. The lawmakers want to discuss Trump’s 301 investigation into Chinese violations of intellectual-property rights that has prompted U.S. threats of tariffs on imports of a range of products from the world’s second-largest economy, they said. The lawmakers, the people said, want Trump to understand that unilateral investment curbs aren’t popular in Congress and that there’s legislation under consideration that would overlap with the crackdown the administration is considering.
Dim Sums: Rural China Economics and Policy: China Says Ag Imports from U.S. Are Now Good A May 17 Economic Observer article by a Ministry of Agriculture and Rural Affairs official proclaimed that "moderate imports" are a necessary feature of China's new stage of openness. With growing population, changing consumer demand, limited natural resources, and pollution constraints, agricultural imports are a necessity, the author said. He further asserted that agricultural imports do not conflict with domestic agricultural development as long as imports are steady, controlled, spread out over time, and spread over different sectors. New in this article is its blessing of agricultural imports from the United States.
Koch brothers launch aggressive campaign against Trump trade moves - CNN Americans for Prosperity, Freedom Partners Chamber of Commerce and the LIBRE Initiative announced the campaign Monday to "champion the far-reaching benefits of trade and oppose tariffs and other barriers" through "paid media, activist education and grassroots mobilization, lobbying and policy analysis." In a document that lists the network's "trade principles," the groups urge President Donald Trump to "permanently lift the recent steel and aluminum tariffs," "permanently lift the proposed additional tariffs on imports from China" and "permanently lift the recent solar panel and washing machine tariffs."
China's Shenzhen to cap new private homes at 40 percent of supply | Reuters Shenzhen plans to build 1.7 million new apartments by 2035, of which only around 40 percent can be private homes, the city’s housing authority said in a statement on its website on Tuesday. Heeding President Xi Jinping’s call for houses that “are for living in, not speculation”, local governments are starting to roll out policies to ensure multiple sources of home supply and multiple channels of financial support.
In The Flesh: The Chinese Lamborghini Urus Ripoff Is Ready - CarNewsChina.com The ripoff is made by a company called Beiqi Yinxiang Automobile, a joint venture between the BAIC and the Yinxiang Motorcycle Group. Most of the Huansu cars are based on exiting BAIC platforms. Their Chinese brand name is Huansu (Magic Speed), and their ‘English’ brand name is Hyosow. The Urus clone will be the first car of their new ‘X-Series’, a line of sporty SUVs. It is code named C60.
Robotics pioneer clinches record $100m funding as Chinese invest | Business Weekly | Technology News | Business news | Cambridge and the East of England Cambridge medical devices pioneer CMR Surgical, which is commercialising a new robotics arm to revolutionise keyhole surgery, has made history with a stunning $100 million (£74m) Series B fundraising. It is the largest ever private financing of a medical devices company in Europe. The $100m comes from new investor the Zhejiang Silk Road Fund and existing investors Escala Capital Investments, LGT, Cambridge Innovation Capital and Watrium.
CFIUS Reform Is Likely, but 'Joint Venture' Provision in Play, Lawyers Say | National Law Journal Mandatory, rather than voluntary, review of certain transactions seems certain to pass, but questions remain about a proposed new requirement for a national security review of joint ventures and minority stakes investments, and whether such a review would remain within the Treasury Department’s Committee on Foreign Investment in the United States, or move to the U.S. Department of Commerce, under its Export Administration Regulations (EAR) regime. The provision calling for review of early investments drew opposition from some big corporations concerned it would give CFIUS authority to block outbound investments by U.S. companies.
Services Expansion Holds Steady: Caixin Survey - Caixin Global Growth in China’s services activity remained stable in May, with prices charged rising at the slowest pace since September due to fierce competition, a Caixin survey showed Tuesday. The Caixin China General Services Business Activity Index, which tracks the services sector, stood at 52.9 in May, unchanged from April. A number above 50 indicates an expansion, while anything below signals a contraction.
Central Bank, Public Security Ministry Join to Fight Financial Crimes - Caixin Global China’s financial regulator will work closely with law enforcement departments to crack down on irregularities in internet finance, underground banks and illegal foreign exchange trading, the central bank said Monday in a statement. The People’s Bank of China will join forces with the Ministry of Public Security by sharing information, enhancing collaboration, toughening punishments and strengthening public education, according to the statement. The statement followed a meeting between a team from the monetary authority led by Vice Governor Pan Gongsheng and Meng Qingfeng, vice public security minister.
Regulator Says Cadres Moving to Institutions Reflects ‘Recruitment Needs’ - Caixin Global “Recent moves by cadres from the banking and insurance regulator to positions at financial institutions reflects the need to integrate the principle of cadres being administered by the party and marketization of recruitment needs,” a representative from the China Banking and Insurance Regulatory Commission (CBIRC) told the China Securities Journal, one of three flagship financial newspapers under the official Xinhua News Agency.
Alibaba and Tencent tell bankers to pick sides - FT $$ Tencent and Alibaba’s fierce rivalry has extended into the world of investment banking, with China’s dominant tech duo demanding that bankers working for them avoid doing so for their rival. The requirements have in effect split investment banks into two camps, said several people with knowledge of the matter, highlighting the companies’ clout in virtually every sphere of China’s economy as well as their prolific dealmaking.
China Weighs New High-Tech Stock Venue in Battle With Hong Kong - Bloomberg China is expanding efforts to keep its most promising companies from going public in Hong Kong or the U.S., with officials studying a new trading venue in Shanghai that would have lower thresholds for biotechnology and high-tech firms, people with knowledge of the matter said. Government entities including the China Securities Regulatory Commission and Ministry of Science and Technology are studying the proposal, said the people, who asked not to be named discussing private information
独家|六大银行火线誓师 “独角兽基金”冲击千亿目标_金融频道_财新网 big financial institutions and funds are setting up funds to invest in the comoing wave of Chinese tech unicorns CDRs listing as A-shares...there will likely be massive multiple expansion for the CDRs compared to the underlying overseas-listed shares. How will overseas investors deal with that possible valuation gap? // 据财新记者从多渠道了解，目前银保监会及证监会采取一系列措施，协调多家市场主体参与到“独角兽”回A的过程中来。在资金方面，由六大基金公司各自负责发行一款三年封闭期基金，同时由工农中建交五大行以及股份行中的招商银行六家银行代销及托管，这些资金将用于投资“独角兽”企业的战略配售环节。
Politics, Law And Ideology
Senior CPC official urges united front to gather wisdom using Xi thought - Xinhua Senior Communist Party of China (CPC) official Wang Yang on Monday urged the united front to gather wisdom and strength by using Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era...Wang stressed that officials should be adept at enabling non-CPC personages to understand and recognize CPC policies and guidelines through the united front mechanism, to gather the broadest possible consensus.
专访《实践是检验真理的唯一标准》主要作者胡福明：我只是跟上了时代和国家的需要_宏观_财经_经济网_国家一类新闻网站 China Economic Weekly interviews Hu Fuming, lead author of the famous 1978 essay "Practice Is the Sole Criterion for Testing Truth", whose 40th anniversary is getting a fair amount of propaganda play
周永康正师职警卫秘书下落获官方证实 拟获减刑|冀文林|周永康|中纪委_新浪新闻 Tan Hong, Zhou Yongkang's secretary for security, has been released from jail
网络强国战略思想的理论价值和时代贡献（深入学习贯彻习近平新时代中国特色社会主义思想）--观点--人民网 June 5 page 7 People’s Daily article on the theoretical value and contribution to the new era of cyber superpower strategic thought...some good theoretical acrobats around Marxism and the Internet age...by 谢新洲 // 马克思主义经典作家所处的时代还没有互联网，不可能对认识和驾驭互联网给出现成答案。如何运用马克思主义基本原理分析和把握互联网规律，成为当代马克思主义发展的重大理论课题，也是信息时代坚持和发展中国特色社会主义必须解决的迫切问题。
净化网络语言（思想纵横）--观点--人民网 June 5 page 7 People's Daily on purifying internet language by 成丕德
Public to benefit more from Internet Plus: Premier Li - Xinhua Premier Li Keqiang on Monday said the public should benefit more from the Internet Plus model, which emphasizes applying internet technologies in traditional economic and social sectors. Li made the call in an inspection tour to the city of Yinchuan, northwest China's Ningxia Hui Autonomous Region. Li said there was huge potential to leverage the Internet Plus model to improve major areas of livelihood for the public, allowing people in poor or resources-scarce regions to gain access to better public services.
State Council to regulate function adjustment in institutional reform As the 13th National People’s Congress has passed a massive institutional reform plan, the functions of a list of ministries and commissions will be reshuffled. The State Council recently released a decision to regulate the function adjustment among old and new institutions. According to the decision, new institutions should take up their functions and duties stated in the State institutional reform plan after finishing setting up. If the institutions have not been established, original institutions should continue their duties under the current administrative laws.
Foreign and Military Affairs
US B-52s fly by Spratlys amid rising tensions with China - CNN The US defense official, who has knowledge of the mission's original flight plan, said it called for the nuclear capable B-52 bombers to fly about 20 miles from the islands.
China warns West of S.China Sea provocations - Global Times With the increasing provocations from Western countries, including the US, the UK and France, in the South China Sea, "Another 'Eight-Power Allied Forces' scenario is re-emerging in the South China Sea. The US and its European allies are determined to contain China," said Xu Guangyu, a retired major general and senior adviser to the China Arms Control and Disarmament Association. "Eight-Power Allied Forces" or "Eight-Nation Alliance" refers to invading troops sent by Britain, the US, Germany, France, Russia, Japan, Italy and Austria-Hungary in 1900, to suppress the popular Chinese anti-imperialist Yihetuan Movement.
Marco Rubio: US must develop plan to ‘destroy’ Chinese assets in South China Sea - Washington Examiner: “If they've created a missile base that we can destroy, because we can position enough assets in the region that can penetrate defenses and destroy it, then we have neutralized that advantage,” the Florida Republican told the Washington Examiner during a phone interview last week. That proposal is one aspect of a broader effort to offset China’s rise as a military power, particularly in the Asia-Pacific, where U.S. officials have a heightened wariness about China’s aggression. It’s a more confrontational approach than some of his colleagues think prudent, one likely to exacerbate Chinese sensitivity about American military power in the region. Rubio believes China is pursuing a “strategy of incrementalism” that, if unchecked, will eventually force American leaders into a choice between devastating war and bloodless defeat.
Air China resumes flights between Beijing and Pyongyang | Reuters China’s flag carrier indefinitely suspended flights between the two cities in November citing poor demand. The suspension came at a time when ties had been frayed by Pyongyang’s nuclear weapons program and Beijing’s backing of tough U.N. sanctions in response. An Air China company official told Reuters on Tuesday that flights would resume, saying that this was due to “market reasons”. He declined to provide further comment.
China’s Trade With North Korea Is Set to Soar With a Trump-Kim Deal - The New York Times By all indications, China has at least officially enforced the international sanctions that have been imposed on the North to curtail its nuclear weapons program. But on the border, the signs of North Korea’s economic dependence on China are evident in a shadow economy of cash couriers, short-term workers and gray-market trading that has persisted despite the sanctions... Since Mr. Kim’s surprise meeting with Mr. Xi in the Chinese city of Dalian last month, where economic development was reported to be at the top of the agenda, there have been suggestions that China might help rebuild the North’s primitive roads and ports. Such aid may become part of the Belt and Road Initiative, Beijing’s signature effort to extend its influence by helping other countries finance large-scale infrastructure projects. // Comment: The "maximum pressure" sanctions campaign is over, no matter the outcome of the Trump-Kim summit. Well-played Mr. Kim...
Competing with China | IISS - Aaron L. Friedberg: The United States and China are separated not only by divergent interests, some of which might be reconciled, but by incompatible visions for the future of Asia and the world...If there is a single theme that unifies much of what follows, it is the often underestimated importance of political beliefs and ideology. America’s post-Cold War strategy for dealing with China was rooted in prevailing liberal ideas about the linkages between trade, economic growth and democracy, and a faith in the presumed universality and irresistible power of the human desire for freedom. The strategy pursued by China’s leaders, on the other hand, was, and still is, motivated first and foremost by their commitment to preserving the Chinese Communist Party’s monopoly on domestic political power. The CCP’s use of militant nationalism, its cultivation of historic claims and grievances against foreign powers, and its rejection of the idea that there are, in fact, universal human values are essential pieces of its programme for mobilising popular support and bolstering regime legitimacy. It is impossible to make sense of the ambitions, fears, strategy and tactics of China’s present regime without reference to its authoritarian, illiberal character and distinctive, Leninist roots.]
Bob Carr's Australia-China Relations Institute has visas denied by Chinese government - Sydney Morning Herald The deterioration in relations between Beijing and Canberra now appears to be affecting even the most China-friendly voices in Australia, with trips to the country organised by Bob Carr's Australia-China Relations Institute allegedly being hindered by punitive visa rejections. Mr Carr, director of the institute, revealed the Chinese government has denied visas to about five Australian journalists for a trip funded by his think tank, a hindrance the former Labor foreign minister said he has not faced before.
China Eyes Its Next Prize – the Mekong | Lowy Interpreter Controlling the Mekong River’s flow with dams along the waterway ultimately means controlling access to food, and therefore the livelihoods of tens of millions of people in downstream riparian communities. Of the hydroelectricity dams on the Mekong, the vast majority of currently installed capacity (megawatts) is in China, accounting for more than 15,000 MW. This includes a half-dozen mega-dams over 1000 MW, including Nuozhadu dam which churns out 5850 MW. Together these dams can hold back 23 billion cubic metres of water, or 27% of the river’s annual flow between China and Thailand. Other dams in the lower Mekong are piddling by comparison, with generating capacity in the tens or low hundreds of MW. The bottom line: Chinese dams can now regulate the Mekong’s flow.
Indian leader Modi wants no part of China-US rivalry, but still manages to keep Beijing happy | South China Morning Post Speaking to defence ministers and other officials from 50 countries, Modi – India’s strongest leader for decades – also outlined his view of the Indo-Pacific region. “India does not see the Indo-Pacific region as a strategy or as a club of limited members,” Modi said in his keynote speech, delivered in English, on Saturday. “Nor as a grouping that seeks to dominate. And by no means do we consider it as directed against any country. A geographical definition, as such, cannot be,” he said.
FOCAC Beijing summit to elevate China-Africa ties to a new level: Chinese FM - Xinhua Wang Yi on Monday expressed belief that the upcoming Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) will elevate China-Africa Comprehensive Strategic and Cooperative Partnership to a new level. // Comment: Chinese diplomats are working hard around the world
SCO military drill seeks trust, stability - China Daily Member states of the Shanghai Cooperation Organization will participate in the upcoming joint military drill dubbed Peace Mission 2018 to promote mutual trust, cooperation and coordination against terrorist threats and to maintain regional peace and stability, Chinese experts said. The drill's command post exercise will take place at the Chebarkulsky training ground in the Ural Mountains region in August, the Russian Federation’s ministry of defense said in an online statement on May 29. Chiefs of general staff of the SCO nations will also hold a meeting during the joint military drills, it said.
Tech And Media
Biography | Steven Liu - Gunderson Dettmer It is with great sadness that we share the passing in May 2018 of our friend and colleague Steve Liu. We and all who knew him will miss his warmth, generosity, humility and thoughtful insight...Steve had more than 20 years of experience advising clients in the US and China. He focused on the representation of startups, emerging growth and public companies, venture and institutional investors, with specialization in corporate and securities law, private and public financings, mergers and acquisitions, and corporate partnering transactions. His clients included some of the most active venture and private equity investors in China such as Tiger Global, Coatue, H Capital, Hillhouse and others, as well as numerous listed companies based in China // RIP Steven, you were a great Dad, husband, friend and lawyer who went way too early
ARM Holdings Sells Majority Stake in China Chip Unit - Caixin Global British telecom chip giant ARM Holdings PLC said Tuesday it will sell a majority stake of its Chinese unit for over $775 million to local partners, a move it said will help expand business opportunities in China. ARM will sell a 51% in ARM Technology (China) Co. to Chinese investors to form a joint venture, in a deal expected to close this month, parent company SoftBank Group Corp. said in a statement. It didn’t name the buyers, which it referred to as “partners” and “financial investors.” // UK regulators have no jurisdiction, or don’t care?
Inside Baidu’s Failed Bid to Build Its Own Alexa — The Information $$ When Chinese tech giant Baidu bought hardware startup Raven Tech early last year for about $90 million, executives hoped the maker of smart speakers would be a lynchpin of Baidu’s artificial intelligence strategy. Raven’s central role seemed to be cemented when its speaker received prominent billing at Baidu’s annual tech conference in November. But a few months later, after poor sales and internal disagreements over whether to sell a high-end device or a mass market one, Raven Tech engineers were told to stop working on the speaker, known as the Raven H. Baidu ended up making fewer than 10,000 units of the speaker. Raven Tech founder Lyu Cheng is now considering leaving Baidu
Did Facebook allow Chinese firms ZTE and Huawei to access user data? A lawmaker wants to know. - The Washington Post The red flags raised by Sen. Mark R. Warner (D-Va.) on Monday stem from revelations that Facebook struck special data arrangements with roughly 60 device makers including Apple, HTC and Samsung over the past decade, possibly without Facebook users’ knowledge. Using legal agreements and Facebook-supplied code, these and other device makers could access information such as names, phone numbers and photos, all in a bid to make it easier for Facebook users to access its services -- from friends’ photos to their message histories -- while using a smartphone.
Alibaba Invests in Online Parenting Portal Babytree - Caixin Global E-commerce giant Alibaba Group Holding Ltd. made a strategic investment in Babytree Inc. that values the latter at 14 billion yuan ($2.19 billion), the parenting website operator said Monday in a press release. The amount of Alibaba’s investment and its shareholding in Babytree weren’t disclosed. Last week, online cosmetics seller Jumei International Holding Ltd. said it agreed to sell shares equivalent to about 4% of Babytree to an unnamed buyer for a total consideration of $86.5 million. That transaction valued Babytree at about $2.16 billion, according to a calculation by Caixin. The transaction left Jumei with about 3.33% of Babytree.
Co-Producer of ‘Jurassic World’ Sequel to Raise $156 million - Caixin Global The Chinese company that co-produced the soon-to-be-released “Jurassic World: Fallen Kingdom” plans to raise up to 1 billion yuan ($156 million) through a private placement to shore up its film offerings. Perfect World Co. Ltd. will issue up to 25 million shares, less than 20% of its total, the company said in a filing to the Shenzhen Stock Exchange on Monday.
Chinese Government Strengthens Ride-hailing Regulations In Wake Of Murder – China Money Network China’s Ministry of Transport, Cyberspace Administration of China, Ministry of Industry and Information Technology, People’s Bank of China, State Administration of Taxation, State Administration for Market Regulation and Ministry of Public Security have jointly released rules to combat some problematic ride-hailing players. The seven regulators will work together to share information about ride-hailing companies, including their business permits, drivers’ identity information, tax payment information and others, to avoid unfair competition, illegal operation, tax evasion and illegal payment.
Tencent-Backed Video Streamer Kuaishou Buys Struggling ACFun – Variety Chinese streaming video startup Kuaishou has acquired longer-established, but smaller rival ACFun. The move is part of the intensifying competition process among specialty streaming operators in China. ACFun, which stands for animation, comics and fun, has been around since 2007. According to reports, it will retain its operational independence in branding and development. But it will need to lean on Kuaishou for capital and tech support.
Society, Art, Sports, Culture And History
France’s Rossignol, IDG to Ride China’s Winter Sports Avalanche - Caixin Global French winter sports equipment company Rossignol Group has partnered with IDG Capital to expand in China, seizing the opportunity presented by the 2022 Beijing Olympic Winter Games. The partnership came as IDG bought a 20% stake in the Grenoble-based manufacturer of ski equipment, boots and cycling outfits, Rossignol announced on Monday.
Man City takes on China esports market with FIFA Online team | Reuters Manchester City have launched a FIFA Online team in Beijing to compete in the Tencent’s Online Star League (FSL), the English Premier League soccer champions said on Tuesday.
Australian playwright disappointed censors axed Beijing play - AP Renowned Australian playwright David Williamson said Tuesday that he is disappointed Chinese censors have canceled a production of his play “The Removalists” for the official reason that it contains bad language and violence. The 76-year-old said some involved in the production suspect the true reason the classic Australian play was banned was its depiction of police abusing their authority — a sensitive issue in China.
Xi's special envoy to attend opening ceremony of Russia World Cup - Xinhua | Chinese President Xi Jinping's special envoy and Vice Premier Sun Chunlan will travel to Russia to attend the opening ceremony of the 2018 FIFA World Cup from June 12 to 15.
Buddhist representatives in Tibet undergo training, urged to be politically reliable - Global Times Buddhist monks and nuns in the Tibet Autonomous Region tasked with spreading government policies completed a three-day training last week to strengthen their political beliefs. These Buddhist facilitators are asked to be reliable in politics and take a clear-cut and firm stance, which is one of four standards they are required to follow, according to a training workshop held in Lhasa from May 31 to June 2, Tibet.cn reported Monday. Aside from the political requirements, the "four standards" also asks them to be profound in religious knowledge, be convincing in morality and play an active role at critical moments.
Energy, Environment, Science And Health
OPEC Faces New Concern Over Global Oil Supply: China - WSJ China’s secretive crude reserves will help major producers determine whether to continue their supply cuts or open the taps wider again
Sun Sets Further on China’s Solar Subsidies - Caixin Global China has abruptly put the brakes on solar power subsidies, seeking to stem overcapacity in a sector that has benefited for years from government incentives. The move caught many in the industry off guard. The government won’t grant subsidies to any new ordinary solar projects this year. For those that are being built, the incentives will be cut by 0.05 yuan (0.8 U.S. cents) per kilowatt-hour (kWh).
Top legislator inspects air pollution control in Inner Mongolia - Xinhua China's top legislator Li Zhanshu called for strict enforcement of the Air Pollution Control Law to ensure "blue sky with white clouds" for the people during an inspection tour in north China's Inner Mongolia Autonomous Region from June 2 to 5. 栗战书：持之以恒构筑祖国北疆万里绿色长城
Massive tobacco profits spark health concerns, prompt call for cigarette price hike - Global Times An alleged annual revenue of more than 1 trillion yuan ($156 billion) by the China National Tobacco Corporation has sparked a passionate debate among internet users about health versus profit. The State-owned giant amassed more than 1.1 trillion yuan profit in 2016 - about as much as China's four major banks and two major gasoline companies combined - according to a We-media article on Sina Finance on Saturday, citing data released by Fortune China in 2017.
Long March 3A launches Fengyun-2H – NASASpaceFlight.com China launched a new geostationary meteorological satellite using a Long March 3A (Chang Zheng 3A) rocket from the Launch Complex LC2 at the Xichang Satellite Launch Center (XSLC). The launch of Fengyun-2H (Fengyun-2-9) took place at around 13:10 UTC on June 5. Developed by the Shanghai Academy of Space Flight Technology (SAST) and China Academy of Space Technology (CAST), this meteorological satellite series has already seen the launch of six operational satellites.
Education
Chinese universities to offer new cutting-edge science courses to freshmen - Global Times Hundreds of new college majors on cutting-edge science will be available to college freshmen, which is expected to help narrow China's talent gap in high-tech fields, expert said. The Ministry of Education approved in March a total of 2,311 new majors, including those on data science, robotic engineering, artificial intelligence (AI) and cyber security. Many will be available the coming fall term, chinanews.com reported
Books And Literature
How to Catch a Killer in China: Another Chinese Crime Novel Goes Global - The New York Times Zhou Haohui, the latest author to catch the wave of Chinese crime fiction crashing on international shores, had an unsatisfying job teaching engineering at a university outside of Beijing in 2007 when he began publishing — online — the novels that would earn him a cultlike following in China. These books — a trilogy about a police hunt for a vengeful killer — went into print two years later, ultimately selling more than 1.2 million copies. They inspired a serial on the streaming site owned by Tencent, the social media giant, that has, to date, been watched a staggering 2.4 billion times, according to his agent, China Educational Publications Import & Export Corporation. A feature film went into production in April. Now the first book of Mr. Zhou’s trilogy, “Death Notice,” will be released on June 5 in the United States, and in Britain next week // The book on Amazon