China's economy keeps chugging along; US-China trade; America's new Indo-Pacific Command; China tech trends still up and to the right; Stock market with Communist Party characteristics

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The Essential Eight

1. China's economy keeps chugging along

China Economic Update - May 2018 - World Bank

Key messages:

  • Economic activity in China remains resilient, with GDP growing by 6.9 percent in 2017 and 6.8 percent in the first quarter of 2018;

  • While consumption continues to drive growth, investment growth has rebounded from the lows in 2017, particularly in the private sector;

  • However, the long-term trend is slower investment growth accompanying slower economic growth, as an important part of China’s “new normal” is the process of rebalancing away from investment toward consumption;

  • Even with the slowdown, investment is still high by international standards, so China’s main challenge is not to raise the growth rate of investment, but to ensure that it goes to sectors and firms that are more productive;

  • Looking ahead, GDP growth is projected to moderate to 6.5 percent in 2018 and an average of 6.3 percent in the following two years. The main risks to the outlook are high corporate indebtedness and rising trade tensions;

China May official factory growth at 8-mth high, well above forecasts - Reuters

The official Purchasing Managers’ Index (PMI) released on Thursday rose to 51.9 in May, from 51.4 in April, and remained well above the 50-point mark that separates growth from contraction for the 22nd straight month.

Analysts surveyed by Reuters had forecast the reading would dip slightly to 51.3.

Production expanded at the fastest rate in six months while growth in new orders rose to an 8-month high. Export orders also accelerated from the previous month.

Manufacturing Hits Eight-Month High - Caixin: 

Despite the overall upbeat outlook, the PMI survey — which polls 3,000 large and midsize firms in 31 major manufacturing sectors — showed that 40.1% of firms reported financial pressure mounting in May, up for the third consecutive month, and more than 40% said labor and material costs were elevated, the NBS said.

State Council Wants China's Economy to Be "Comprehensively Open" - China Banking News:

A regular meeting of China’s State Council convened by Premier Li Keqiang on 30 May has flagged greater opening of the economy to foreign investment and consumer products.

The meeting confirmed “further active and effective use of foreign capital…advancing the expansion of opening and expediting upgrade of the economy.”

Tariffs to fall on home appliances, cosmetics - China Daily:

Average tariff rates for clothes, shoes, hats, kitchenware and sports products will be reduced to 7.1 percent from the current 15.9 percent, according to a statement released after the meeting.

Average rates for household appliances like washing machines and refrigerators will drop to 8 percent, 12.5 percentage points lower. Tariffs on aquatic products and mineral water will be 6.9 percent on average, down from the existing 15.2 percent, while cleaning products, cosmetics and some healthcare products will be levied at 2.9 percent, down from the present 8.4 percent, the statement said.

Further tariff cuts will be beneficial to opening-up and meet public demand, which will also push forward quality improvements and industrial upgrading, the statement said


2. US-China trade

China agrees to loosen foreign investment ‘negative list’ - FT $$:

Beijing said it would issue a list of planned relaxations on foreign investment by June 30, meeting a key US demand just 48 hours before US commerce secretary Wilbur Ross is due in Beijing to lead a third round of trade talks with vice premier Liu He.

China’s commerce ministry said on Thursday that the new “negative list” would ease or cancel existing restrictions on foreign investment in sectors including energy and transportation. 

Trump’s trade actions undermine Ross’ big China trip - POLITICO:

Meanwhile, the deep rift between moderates and China hawks in the White House erupted publicly again on Wednesday as various factions sought to get their messaging out. Trump trade adviser Peter Navarro — a China critic who got into a public screaming match with Mnuchin during trade talks in Beijing this month — told NPR that Mnuchin was wrong to characterize the dispute with China as a “trade war.”

“That was an unfortunate soundbite, basically for two reasons,” Navarro said. “One is that what we’re having with China is a trade dispute, plain and simple. They engage in a whole range of unfair trade practices. The second thing is, the president has said we lost the trade war long ago.”

US will push China to let its firms hold majority stakes in companies, says Trump economic adviser Larry Kudlow | South China Morning Post:

In a radio interview late on Wednesday, Kudlow, director of the National Economic Council, said that in addition to lowering trade imbalances, the issue of equity ownership has been raised during the previous two rounds of talks, but China had not seriously addressed the issue.

NXP shares fall as China's warning revives concerns over Qualcomm deal | Reuters:

The meeting was expected before U.S. Commerce Secretary Wilbur Ross arrived in China on Saturday, the sources briefed on Qualcomm’s discussions had said.

However, the team of lawyers remained at the company’s San Diego headquarters, as of late Tuesday, a source familiar with the matter said.

Top Alibaba Exec Lashes Out at U.S. Attempts to Contain China - Bloomberg:

Alibaba Group Holding Ltd. Vice Chairman Joseph Tsai struck out at some of China’s most vocal critics, saying their understanding of the country was flawed and they just wanted to stall its technological advancement.

The billionaire name-checked U.S. Senator Mark Warner -- who’s argued some Chinese companies pose a security risk to the U.S. and had bullied American companies into transferring key technology...

“There’s nothing wrong with a country wanting to up its tech and be more innovative. From the Chinese perspective, we see a lot of people who want to stop China from doing that,” Tsai said in an interview at the Code Conference in Rancho Palos Verdes, California. “People like Senator Warner want to hold China back. I would disagree with his characterization of China.”

ZTE to Replace Top Exec as China Seeks to Lift U.S. Ban - Bloomberg:

ZTE Corp., the Chinese telecom company that’s become a focal point of the nation’s trade dispute with the U.S., has replaced one of its most powerful executives in a move that may signal efforts to placate American demands.

Tian Dongfang, a ZTE non-executive director who’s also chief of a think-tank under the China Aerospace Science and Technology Corp., has already assumed the role of party secretary, people familiar with matter said, asking not to be named talking about internal decisions. He replaces Fan Qingfeng in a position that’s considered the ultimate responsibility in an era when Chinese President Xi Jinping has called for the Communist Party to lead in all things.


3. America's new Indo-Pacific Command

INDOPACOM, it is: US Pacific Command gets renamed - Military Times:

Defense Secretary Jim Mattis announced Wednesday that U.S. Pacific Command would now be called U.S. Indo-Pacific Command, in the latest move to counter Chinese economic and military pressure in the region.

Mattis said he directed the name change in recognition that “all nations large and small are essential to the region, in order to sustain stability in ocean areas critical to global peace.”..

“In recognition of the increasing connectivity of the Indian and Pacific Oceans, today we rename the U.S. Pacific Command to U.S.-Indo Pacific Command,” Mattis said...

…outgoing commander of the former U.S. Pacific Command, Navy Adm. Harry Harris, was more direct in his assessment of China’s impact on the region.

“Great power competition is back,” Harris said. “I believe we are reaching an inflection point in history…. A geo-political competition between free and oppressive visions is taking place in the Indo-Pacific.”

North Korea threat 'imminent,' China biggest long term, admiral says - CNN:

"North Korea remains our most imminent threat and a nuclear-capable North Korea with missiles that can reach the United States is unacceptable," he said.
However he added, "China remains our biggest long-term challenge. Without focused involvement and engagement by the United States and our allies and partners China will realize its dream of hegemony in Asia."

Responding to Harris's comments Thursday, Chinese Foreign Ministry spokeswoman Hua Chunying said the admiral was "obsessed with hegemony" because he fears others are trying to steal it from the US.

China urges U.S. to stop hyping up South China Sea issue - Xinhua:

In response to the U.S. move to rename Pacific Command to U.S. Indo-Pacific Command, Hua called on the United States to act responsibly in the Asia Pacific region no matter how the name is changed, and to play a constructive role in regional peace and stability.

Navy: China out, Vietnam and Israel in for RIMPAC 2018 - Stripes:

The Navy announced on Wednesday that 26 nations, 47 surface ships, five submarines, 18 national land forces, and more than 200 aircraft and 25,000 personnel will participate in the biennial RIMPAC being held June 27 to Aug. 2.

This would mark the first time Vietnam, Sri Lanka, Brazil and Israel have joined the drills, the Navy said.

China will send team to minimise conflict at regional security talks, sources say | South China Morning Post:

Despite the likely tone of the talks, the Chinese delegation in Singapore will be headed not by a military policymaker, but by He Lei, a lieutenant general and vice-president of the Academy of Military Sciences, in a move designed to shape the summit as an “academic exchange” rather than a policy debate.

Also, a source close to the Chinese delegation said Zhou Bo, a senior colonel from the People’s Liberation Army, would make a speech at a special session on competition and cooperation between China and India, ahead of a keynote address by Indian Prime Minister Narendra Modi on potential conflicts in the region.

Taiwan sends top military officials to US Pacific Command ceremony in Hawaii | South China Morning Post:

Taiwan sent senior military officials to Hawaii for a ceremony marking Admiral Harry Harris handing over the reins of the US Pacific Command to Admiral Phil Davidson.

Their attendance has prompted speculation over whether Taiwan could for the first time be invited to join the biennial US-led Rim of the Pacific exercise to be held off Hawaii in summer. The Pentagon last week withdrew Beijing’s invitation to take part in the international maritime war games “as an initial response to China’s continued militarisation of the South China Sea”.


4. Beijing really doesn't want US officials at the AIT building opening ceremony in Taiwan 

Taiwan event creates headaches for Trump amid North Korea talks - POLITICO:

The Taiwan question has taken on unexpected urgency amid the efforts to secure China’s help in reaching a landmark denuclearization agreement with North Korea, as well as ongoing and highly sensitive trade negotiations. The June 12 opening of the American Institute in Taiwan compound falls on the same day as the planned summit in Singapore between President Donald Trump and North Korean dictator Kim Jong Un...

“Though it’s just a building opening, the Chinese are really painting it as a symbol of the administration’s commitment to China-U.S. relations,” said Abigail Grace, a recently departed National Security Council official who now focuses on Asia-Pacific policy at the Center for New American Security. “If I were sitting in the Trump administration’s shoes, there would be a very difficult decision to make.”..

Further complicating the decision to form the delegation is the fact that U.S. officials who visit Taiwan are often no longer welcome in China, which means the administration likely won’t send officials who are crucial to ongoing negotiations with Beijing on trade and other issues.

Why not send Ivanka and Jared? That would dispel concerns that they are skewing China policy to help their business interests in the PRC. 

Ms. Grace has recently joined Twitter @abigailcgrace and is a must follow if you use that service.


5. Profile of Matt Pottinger

The White House Official Trump Says Doesn’t Exist - POLITICO Magazine:

Matthew Pottinger must have been surprised to learn that he doesn’t exist. As the top official for Asia on President Donald Trump’s National Security Council, Pottinger had briefed dozens of reporters about North Korea two days before Trump angrily tweeted that a New York Times article citing his remarks had relied on an official who “doesn’t exist.”..

...he is among Trump’s longest-serving aides. As the NSC’s director for Asia, the sandy-haired, boyish-looking 45-year-old is the president’s top adviser on North Korea and China. He organized Trump’s 12-day trip to Asia last fall, during which he was rarely far from the president’s side. He has played a central role in coordinating Trump’s North Korea policy since early last year — one reason he was among a handful of U.S. officials to fly into Pyongyang earlier this month with Secretary of State Mike Pompeo. And he has been in the thick of White House preparations for a possible summit with Kim.

Pottinger, says former White House chief strategist Steve Bannon, is “one of the most significant people in the entire U.S. government.”..

Good-natured and colorfully profane, Pottinger has also endeared himself to Trump and other White House officials with his hard-nosed attitude toward America’s rivals, particularly China and North Korea. He calls it a mistake for the U.S. to have welcomed China into the global economy with the hope of creating a friendly economic and strategic partner. That has made him an advocate for Trump policies that have treated trade with China as a national security issue.

“Matt was a key architect of the papers that ended up capturing China’s economic aggression strategy, which went through the [NSC] process and was endorsed by the president,” said Nadia Schadlow, a former McMaster deputy who left the White House last month.


6. China tech trends still up and to the right

No wonder US firms like Google are still desperate for even crumbs out of China...

The trends driving Chinese tech: Highlights from Mary Meeker's 2018 Internet Trends Report · TechNode:

Chinese technology companies have witnessed amazing growth in the past half decade. Of the world’s top 20 internet firms, nine originate from China, even though just two went public prior to mid-2013. Tencent’s market value has increased by a factor of seven in the past five years Alibaba, which only IPOed in 2014, is now the country’s most valuable company.

The meteoric growth of China’s internet firms can be partly attributed to the number of people accessing the internet. China has an online community that is more than twice the size of the total population of the US and exceeds the entire populace of Europe.

The China section starts at slide 212 of the presentation, online as a PDF here. It also includes w24 slides from PRC powerhouse investor Hillhouse Capital starting from slide 237

Google is quietly formulating a new strategy for China - Techcrunch: 

There have been opportunistic product launches using established platforms, and generally Google seems intent at building relationships and growing a local presence that allows its global business to tap into the talent and technology that China offers.

Files Go is the latest example, but already we’ve seen Google relaunch its Translate app in 2017 and more recently it brought its ARCore technology for augmented and virtual reality to China using partners, which include Xiaomi and Huawei.

China’s SenseTime, the world’s highest-valued AI startup, closes $620M follow-on round | TechCrunch:

Alibaba led the previous deal, and this time around the investors include more traditional names such as Fidelity International, Hopu Capital, Silver Lake and Tiger Global. Qualcomm, which previously backed the firm, was also in this round, SenseTime confirmed...

Perhaps its most visible partner is the Chinese government, which uses its systems for its national surveillance system. SenseTime process data captured by China’s 170 million CCTV cameras and newer systems which include smart glasses worn by police offers on the street.

A Veteran Investigator Makes a Return | China Media Project:

Content Review Team at Jinri Toutiao reaches 10,000 Members; Kuaishou Cleans Up Daily Average of 700,000 Content Items

Tencent hires banks to list music unit in New York - FT $$:

Tencent Music and Entertainment has appointed Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch to lead a highly anticipated initial public offering that bankers expect will value the Chinese streaming group in excess of $30bn, according to two people close to the matter.


7. Chinese stocks join the MSCI as the government perfects a stock market with Communist Party characteristics

That Calm Chinese Stock Market? It’s Engineered by the Government - WSJ $$:

Long derided as a casino, China’s once-volatile stock market is going through a long stretch of calm. One reason is an orchestrated government effort to keep traders and investors in line.

Three years after a national uproar when Chinese stocks plunged by nearly half in just over two months, traders and brokers say regulators are increasingly stepping in to influence trades and make China’s markets appear less volatile, especially during political events when Beijing wants to project stability.

The steps, aided by advanced surveillance techniques to monitor traders, include warning brokerage firms to police trades that are out of step with government wishes and phoning investors directly when they act out of line.

The 200-Plus China Stocks That Are About to Join MSCI's Indexes - Bloomberg: 

More than 200 Chinese companies will officially be inducted into MSCI Inc.’s equity indexes after the market close on Thursday, opening up the world’s second-largest equity market -- with its big swings and unique idiosyncrasies -- to global investors.

This means traders looking to track the gauges run by MSCI, the world’s biggest stock index compiler, need to buy yuan-denominated stocks for the first time. Still, don’t expect much impact at first. Only a tiny slice of the selected stocks’ market capitalization will be added, and it will join in two steps, with the next being in September. That means A shares will initially represent about 0.39 percent of the weighting on the MSCI Emerging Markets Index.


8. Politburo meeting discusses poverty relief and rural revitalization

A key part of the battle against poverty, one the three tough battles and something very personal to Xi. 

CPC reviews plans on rural vitalization, poverty relief - Xinhua:

The Political Bureau of the Communist Party of China (CPC) Central Committee reviewed a plan on rural vitalization and a guideline on the battle against poverty at a meeting Thursday.

中共中央政治局召开会议审议《乡村振兴战略规划(2018—2022年)》和《关于打赢脱贫攻坚战三年行动的指导意见》中共中央总书记习近平主持会议

会议强调,各级党委和政府要把打赢脱贫攻坚战作为重大政治任务,进一步落实脱贫攻坚责任制。要完善脱贫攻坚考核监督评估机制,提高考核评估质量和水平,切实解决基层疲于迎评迎检问题。要保持贫困县党政正职稳定,加强对脱贫一线干部的关爱激励。要开展扶贫领域腐败和作风问题专项治理,集中力量解决扶贫领域形式主义、官僚主义的突出问题,坚决依纪依法惩治贪污挪用、截留私分、虚报冒领、强占掠夺等行为。要深入宣传脱贫攻坚典型经验,宣传脱贫攻坚取得的成就。


Business, Economy, Finance And Trade

Chinese retail tycoon's fraud conviction thrown out - AP China’s supreme court threw out a retail tycoon’s fraud conviction on Thursday in an unusual show of leniency toward entrepreneurs amid a string of high-profile detentions that has rattled the Chinese business world. Zhang Wenzhong, former chairman of one of China’s biggest retail chains, Wumart Stores Inc., was released in February after serving 12 years in prison on charges that included improperly obtaining technology development subsidies.

China's free trade talks with Sri Lanka hit major hurdles | Reuters Talks between China and Sri Lanka for a free trade agreement have hit major hurdles, mainly because Beijing will not agree to Colombo’s demand for a review of the deal after 10 years, Sri Lanka’s top negotiator said.

New Personal Credit System May Cut Loan Risks - Caixin Global: Many problems can be traced to poor management and internal controls, but the lack of a national independent credit bureau focused on a new generation of online lenders and borrowers has left the sector without one of the most valuable tools it needs. That’s about to change, with the official opening last week of the country’s first independently run credit bureau, Baihang Credit Scoring (BCS). The bureau aims to fill a gaping hole in the country’s credit system by collecting data from online lenders and other nontraditional sources to rate people’s creditworthiness, much the way credit agencies do in the West...

The Art of Being a Startup Founder - by Fu Sheng, Chairman and CEO, Cheetah Mobile What is a good goal? First and foremost, it should be simple. If you can’t describe your startup idea in one sentence, that is a red flag. Whenever my team members propose complicated goals, I would tell them that they have violated the principle of simplicity. “But this is a complicated issue at heart,” they will retort. I will then reply: “No matter how complicated it is, can it be more complicated than the problem of running China? Deng Xiaoping was able to distill the goal of running China with three words: Raising the GDP.”

Beijing, Shanghai Become Relatively Cheaper Places to Live: UBS - Caixin Global The cost of living in Beijing and Shanghai has become relatively cheaper in the last three years compared with other major cities around the globe, with both cities sliding down the rankings in a UBS survey of living costs in 77 metropolises. In the latest survey, Beijing was the 46th-most expensive city to live in of the places surveyed — down six places from the last report — while Shanghai was in 47th place, dropping 13 places, according to “Prices and Earnings 2018,” released by Switzerland’s UBS Group AG

China’s top dairy maker Yili Group sees shares rocket 10pc on reappearance of chairman Pan Gang | South China Morning Post Yili saw its shares plunge at the end of March, eviscerating nearly 6.1 billion yuan (US$959.6 million) in market value, when rumours that Pan had been taken into custody for investigation circulated on Chinese social media platforms, including WeChat.

 

Politics, Law And Ideology

What’s So Controversial About China’s New Anti-Corruption Body? | The Diplomat In short, the new CCP-led supervision system, with augmented powers over millions of non-CCP individuals, appears to be little different from the extra-legal CCDI system it was supposed to improve. Indeed, at least one death under the new system has been reported. The National Supervision Commission has been accorded a constitutional basis and its own organic law, and it is mandated to obey and help enforce compliance with the Constitution and Chinese law in tackling corruption, but it is answerable only to the CCP. As such, the operation of this new branch of government seems at odds with Xi’s law-based governance ambition.--Jamie P. Horsley is Senior Fellow at the Paul Tsai China Center and a Visiting Lecturer in Law at Yale Law School

Xinjiang Jails Uyghur Civil Servants Over Lack of Enthusiasm For Anti-Extremist Campaigns - RFA Two Uyghur civil servants in northwest China’s Xinjiang Uyghur Autonomous Region (XUAR) have been jailed for failing to send members of their ethnic group to “political re-education camps,” according to sources, as part of a crackdown by authorities on so-called “two-faced” officials. Omerjan Hesen, 34, director of archives for the Hotan (in Chinese, Hetian) prefectural government, and Elijan Ahmet, 35, China’s ruling Communist Party secretary of Hotan’s Keriye (Yutian) county government, were handed 11-year jail terms in May last year, a source with connections in the region recently told RFA’s Uyghur Service, speaking on condition of anonymity.

《共产党宣言》的历史地位和现实意义--理论-人民网 总之,《宣言》中的基本思想在长期的实践检验中显示了真理的光芒,并将随着社会主义运动的发展而继续显示出强大的生命力。《宣言》的思想正是马克思主义、共产主义思想的源头活水,必将随着实践的继续发展而发展,始终成为共产党人和社会主义运动的伟大旗帜和精神动力。 (作者:郝立新,系教育部习近平新时代中国特色社会主义思想研究中心特约研究员、中国人民大学教授)// Renmin U professor and guest researcher at the Ministry of Education’s Xi Thought Research Center Hao Lixin in Thursday’s People’s Daily on the historical position and the practical significance of the Communist Manifesto

《资本论》的真理光芒和时代价值--理论-人民网 经过40年的改革开放,我国已经成为世界第二大经济体,如何在理论上不断拓展新视野、做出新概括,成为广大经济理论工作者的历史使命。科学的理论需要有科学的方法。马克思在《资本论》中所运用的方法,应该也必须成为我们构建中国特色社会主义政治经济学理论体系的方法。当前,经济理论界加快构建、不断完善中国特色社会主义政治经济学理论体系,取得了一批理论成果。我们应该继续以科学的方法深化中国特色社会主义政治经济学理论体系的概括和研究,为新时代中国特色社会主义经济建设提供科学的理论支撑。同时,也要在这一方法指导下,根据中国处于新时代的历史方位,积极进行理论创新,长期坚持并不断丰富发展习近平新时代中国特色社会主义经济思想,为实现中华民族伟大复兴的中国梦作出贡献。 (作者系教育部习近平新时代中国特色社会主义思想研究中心特约研究员、中国人民大学马克思主义学院教授)Renmin U professor and guest researcher at the Ministry of Education’s Xi Thought Research Center Zhang Xu 张 旭 in Thursday’s People’s Daily on the radiant truth and the value in this era of Das Kapital

 

Foreign and Military Affairs

South China Sea: Paracels in the Spotlight | RealClearDefense the choice of the Paracels for the latest American FONOP is also significant. Unlike the ambiguous nature of American FONOPs around the Spratly Islands or Scarborough Shoal, operations in the Paracels send what Washington believes to be a clear legal message. They challenge two claims by China: its straight baselines around the Paracel (Xisha) Islands; and its requirement for prior notification of a warship exercising the right of innocent passage through its territorial sea.

China is not a threat to Canada - The Globe and Mail - Lu Shaye , Chinese Ambassador to Canada We have noticed that since CCCC reached an acquisition agreement with Aecon in October last year, the Canadian media have repeatedly hyped CCCC as one of the state-owned enterprises of China, which they described as monsters. These reports are neither objective nor fair. I have always stressed that China has no objection to Canada’s security review of acquisitions by foreign enterprises. But we oppose demonizing Chinese state-owned enterprises and abrasively smearing them. I have said that slandering Chinese state-owned enterprises in this way is immoral. Still, some people are so full of imagination that they claim China’s development depends on stealing technologies from western countries. I’d like to advise them to keep calm and think: How could a country such as China – with a population of more than one billion – develop by solely stealing technologies from other countries? It would be too arrogant for someone to think that innovation capacity is exclusive to western countries.

China's amphibious ambitions emerge in South China Sea | Asia Times As part of its military reform, the PLA has dramatically increased the size of its Marine Corps and developed advanced amphibious assault ships and vehicles. Further, in activities patterned after those of the US Marines, PLA Marines are now actively engaged in overseas operations.

China’s blue helmets help maintain peace - Global Times The Diplomat, a Washington DC-based magazine on international politics, suggested that China's emergence as a leading power in peacekeeping serves multiple agendas including fostering relations in Africa and elsewhere. The magazine described China's UN Peacekeepers as a national image-building mechanism, designed to improve Beijing's reputation abroad and modernize its military. Li Daguang, a professor at the National Defense University of the People's Liberation Army, called such reports "groundless slander."...The Gwadar port of Pakistan will serve as a resupply base for China's peacekeeping convoys, Li told the Global Times on Tuesday.

China chopper harasses PH rubber boat in Ayungin Shoal – Rappler Hovering "in a close and dangerous distance," a Chinese navy chopper harassed a Philippine Navy rubber boat in Ayungin Shoal (Second Thomas Shoal) in the West Philippine Sea (South China Sea), a lawmaker said. In a statement on Wednesday, May 30, Magdalo Representative Gary Alejano said the alleged harassment in Ayungin Shoal happened on May 11. Philippine Foreign Secretary Alan Peter Cayetano on Wednesday, however, did not categorically call it a form of "harassment," as he preferred to label it an "incident." He said the Philippines, in any case, has filed a diplomatic protest.

Codebook - May 31, 2018 - Axios - 1 big thing: The real threat posed by ZTE's telecom equipment Matt Kinard, director of critical infrastructure partnerships for Raytheon's Forcepoint cybersecurity brand, summed it up: "The risk associated with supply chain issues may be low in terms of likelihood, but the potential for an attack to be catastrophic in scope is high." CrowdStrike's Meyers worries about foreign tech in the face of an upcoming rapid expansion of the U.S. telecom network: "If you allow a foreign nation's equipment to be used in the 5G rollout, shame on you."

JD deepens relationship with China's military with first unmanned supermarket for PLA's Academy of Armored Forces · TechNode On May 30, JD launched the first unmanned convenience supermarket for PLA’s Academy of Armored Forces (陆军装甲并学院). JD and land forces’ logistics unit (陆军后勤部) jointly contribute to the technical support of the supermarket. The business itself will be run by the Academy. This is not JD’s first move in China’s “military and civil integration (军民融合)” blueprint. With commerce and logistic advantages, the company has actively participated in projects including a contract signed with PLA’s air forces’ logistic unit on October 23, 2017 (in Chinese).

Military expert rebukes HK media over untrue nuclear test remarks - People's Daily Online An article published by Hong Kong English-language newspaper South China Morning Post on Monday, said that China had carried out around 200 laboratory experiments to simulate the extreme conditions of a nuclear blast between September 2014 and last December...Chinese military expert Yang Chengjun responded to the report on Tuesday. He told Global Times that he had no idea where the figures in the report came from. The expert introduced that many world powers such as the U.S., Russia, the U.K. and France, are conducting similar nuclear experiments, but the reported “five tests a month” is over exaggerated. Such a high frequency is not necessary for any simulated test, he explained.

China, Laos to advance building community of shared future - People's Daily Online China and Laos on Wednesday agreed to advance the building of a community of shared future to achieve new outcomes. The agreement was reached during the talks between Chinese President Xi Jinping, who is also general secretary of the Communist Party of China (CPC) Central Committee, and Laotian President Bounnhang Vorachit, also general secretary of the Lao People's Revolutionary Party (LPRP) Central Committee, in Beijing.

 

Tech And Media

Shenzhen’s tech innovation hothouse overheats - FT $$ Some companies are already moving out. Huawei, one of Shenzhen’s biggest taxpayers has begun a retreat further inland to Dongguan and plans to move even more staff there once a new campus is finished. Meanwhile, the tech boom had led to an oversupply of incubator space. “Incubators are everywhere,” says Mr Huang. “They would have rooms with a 3D printer and not much else and call it maker space.” Many are little more than real estate rentals, or in many cases sub-rentals. Empty incubators also hint at an incipient bubble.

China's tech advance cannot be slowed, says Nvidia CEO - Nikkei Asian Review "There is nothing that is slowing down China's development of technology. Nothing. They don't need any more inspirations," Huang told reporters in Taipei on May 30. "China is full-steam ahead and we all have to be full-steam ahead."

U.S. Chipmakers See Opening as Trade Friction Grows — The Information GlobalFoundries already has received funding and incentives of hundreds of millions of dollars from New York state for the company’s most advanced chip manufacturing facility in the upstate town of Malta. But Mr. Caulfield believes that the U.S. could lose ground to China and other countries willing to put public money behind the chip industry, which he says is vital to both national security and economic competitiveness. His pitch, which arrives amid growing concern that China one day could usurp the U.S. semiconductor industry, could find a receptive audience in Washington. Other chipmakers, say analysts, are likely to take notice.  //  Comment: wonder which lobbying firm they are using. tech wars are good for billing...

Xiaomi, bound for IPO, woos fans (and investors) at glitzy launch | Reuters In an event in Shenzhen in front of a packed-out stadium with thousands of Xiaomi super-fans, the firm’s chief executive Lei Jun presented the flagship Mi 8, an anniversary smartphone strikingly similar to Apple Inc’s iPhone X.

New WeChat feature lets you scan and translate text on the fly · TechNode WeChat recently released a slew of updates, including a few major changes. China’s most popular social platform started its global expansion a long time ago and a new feature is giving us another hint of its ambition: AR-based real-time translation. After updating to version 6.6.7, the new feature can be accessed from the scan feature in the upright corner, which previously was one of the important entrance for WeChat users to launch the QR code scanner. Now this entrance connects one more feature – translation, by capturing an image of almost anything with either Chinese or English texts in it.

Xiaomi Will Be First Company to Issue Chinese Depository Receipts: Domestic Media - China Banking News A new report claims that smartphone giant Xiaomi could become the first enterprise listed outside of mainland China to issue Chinese Depository Receipts (CDR) in order to stage a return to the domestic A-share market. Sources from the China Securities Regulatory Commission told IPO Zao Zhidao that Xiaomi plans to issue CDR’s on the Shanghai Stock Exchange on 16 July 2018, becoming China’s first CDR enterprise.

Feeling the Cheat: The Game Hack Sellers Working Under the Radar - Sixth Tone Business is thriving for Li, who rakes in between 10,000 and 30,000 yuan ($1,600 and $4,700) a month from cheat sales on top of his 8,000-yuan salary. His cheats are mostly for the immensely popular Korean-owned game “PlayerUnknown’s Battlegrounds” (PUBG), which sees players fight to the last man standing in desolate, weapon-strewn wastelands.

Fan Bingbing’s Leaked Contract Breaks the Chinese Internet: “Don’t bother acting, you really suck!” Cui posted on microblog platform Weibo, along with screenshots of what appeared to be Fan’s employment contract. The document, which is blurred-out in places, states that Fan would earn 10 million yuan ($1.6 million) and details several unconventional terms and conditions. Fan would have the right to amend the script and refuse hairstylists, for example, and her personal makeup artist would command a monthly fee of 80,000 yuan. In addition, the document states, Fan would have access to two luxury cars, her own voice artist, and a daily food allowance of 1,500 yuan.

 

Society, Art, Sports, Culture And History

Yahoo! Co-Founder and Art Collector Jerry Yang on How Chinese Calligraphy Can Help Tie Together a World in Crisis | artnet News The Yahoo! co-founder on how to appreciate Chinese calligraphy and why Silicon Valley isn't known as a collecting capital—yet.

The Lost Personal Tales of Mao-Era China - Sixth Tone Photos from family albums retain a more personal feel than the historical grand narratives in which they were set. The image at the top of this article is a staff picture taken in August 1952 at a department store in the northern city of Taiyuan. Almost everyone in the photo is wearing brightly patterned outfits. At the time, it was considered taboo for men to do this; the period’s revolutionary films are filled with snappily dressed villains and Nationalist agents. But here, the desire to consume Soviet imports, including patterned fabric, overrode other considerations. Years later, the original significance of this photo has faded away, but the eye-catching floral prints stand as proof of the short-lived Sino-Soviet honeymoon period before relations between the two countries soured during the late 1950s.

Our Team – NüVoices a very impressive team

 

Energy, Environment, Science And Health

Wang Huning urges scientists to study Xi's instructions on scientific innovation | english.scio.gov.cn It is vital to understand the important instructions made by Xi, general secretary of the Communist Party of China (CPC) Central Committee, and willingly and firmly carry them out, said Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, at a meeting to mark the 60th anniversary of the founding of the China Association for Science and Technology (CAST).

China issues guidelines to strengthen scientific integrity - Xinhua A scientific integrity mechanism will be built to encourage innovation and tolerate trials and errors while maintaining zero tolerance for severe academic dishonesty, and anyone who violates the integrity rules will be held accountable by law, according to a document released by the General Office of the Communist Party of China (CPC) Central Committee and the General Office of the State Council.

China to crack down on fraud in scandal-hit scientific research amid ZTE wrangle | South China Morning Post China has issued the first national guidelines to enforce academic integrity in scientific research and vowed to punish academics and institutes for misconduct such as plagiarism and fabrication of data.

Gene Tech Tycoon Blasted for ‘Eugenics-Like’ Corporate Culture - Sixth Tone A speech by Wang Jian, the president of leading Chinese genomics company BGI, at a big data conference on Monday attracted attention to a corporate culture that critics say verges on eugenics. During a panel discussion with other tech giants, Wang explained BGI’s company objective that all employees should live to at least the age of 100. To achieve its “100+” goal, the company has three unusual rules that many netizens find ethically troubling. The first rule is that BGI staff are not allowed to have children with birth defects. “If they were born with defects, it would be a disgrace to all 7,000 staff,” Wang said. “It would mean that we are fooling society and just eyeing others’ pockets.” Wang added that there are no known serious congenital diseases among the 1,400 infants that have been born to the company’s employees...

China overtakes U.S. for healthy lifespan: WHO data | Reuters China has overtaken the United States in healthy life expectancy at birth for the first time, according to World Health Organization data. Chinese newborns can look forward to 68.7 years of healthy life ahead of them, compared with 68.5 years for American babies, the data - which relates to 2016 - showed. American newborns can still expect to live longer overall - 78.5 years compared to China’s 76.4 - but the last 10 years of American lives are not expected to be healthy.

HPV Vaccine Seller in China Propels Owners Up Billionaires List - Bloomberg Chongqing Zhifei Biological Products Co.’s more than 60 percent rally this year, spurred by the permission to sell Gardasil 9 in partnership with Merck, has pushed Chairman Jiang Rensheng, 64, up the Bloomberg Billionaires Index. His net worth is estimated at $4.6 billion as of Wednesday and is based on his family’s 60 percent stake, which includes that of Vice General Manager Jiang Lingfeng, his son.

The challenges for China’s water management – China Policy Institute: Analysis The limited amount of water is unevenly distributed across space, with local water availability in some catchments (e.g., the Hai River basin in North China) even below the threshold level of 500 m3 per capita per year commonly considered signalling absolute water scarcity. To make it even worse, the annually available water is subject to climate and weather patterns spreading also unevenly across months while varying year by year, leading to both water shortages and floods, particularly in urban areas or basin downstream. In contrast to scarce water resources, unsustainable use prevails, as characterized by extensive irrigation with low use efficiency in the dry north, high exploitation rate with stressed local water systems, low water reuse and recycle, and limited wastewater treatment. The unsustainable water use combined with limited socio-ecological resilience threatens China water security. With continuous population growth, rapid urbanization coupled with changing life style, and climate change, the insecure water situation becomes increasingly severe, limiting China’s sustainable development.

 

Education

Beijing to add kindergartens this year - Xinhua A total of 158 kindergartens will be built, converted or expanded this year to ease the kindergarten shortage in the city, vice mayor Wang Ning said at a meeting of the standing committee of the Beijing municipal people's congress.