Extension of US-China talks?; More policy support for private enterprises; Wrong kind of Marxists

Apologies for the corrected newsletter yesterday, and the new typo I added when I sent it…one of those days. Generally I will note any meaningful typos in my Twitter feed but yesterday’s was important enough to clog your inboxes twice.

The big news today is a Bloomberg report that the US and China will likely agree to a 60 day extension of the trade negotiations. Maybe the talks are going well this week, and perhaps we will see either a joint statement or even a draft MOU by the weekend, but if the talks are extended I consider that a win for Beijing.

Beijing will have more time to find and exploit various avenues to pressure President Trump to agree to a lesser deal, and pushing the negotiations closer to the start of the 2020 US election cycle may also increase the political pressure on the US President to compromise. Xi and his team are likely calculating that the shutdown debacle and Trump’s loss over the border wall funding also add to the pressure on Trump to show a “win”.

The idea that Beijing is unable to move on the US requests, most made 9 months or even years ago, and that another 60 days will be enough time for them, seems to go against the idea of seeking truth from fact. Then again maybe I am just too cynical…

Beijing now seems to be in various stages of rows with all the Five Eyes countries. From the US perspective Beijing “punishing” the other members of the alliance is a victory, as Beijing’s efforts will likely backfire and force them to decide they need to move closer to the US position, no matter how distasteful they may find the US President. It is really remarkable to watch the supposed students of Sunzi so screw up their foreign relations.

Was this email forwarded to you? Sign up here.

And if you prefer to read this in your browser, just click on the headline at the top of the email.

Thanks for reading.

---

The Essential Eight

1. US-China

U.S. Is Said to Weigh 60-Day Extension for China Tariff Deadline - Bloomberg:

President Donald Trump is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days, as the world’s two biggest economies try to negotiate a solution to their trade dispute, according to people familiar with the matter...

Chinese officials had initially proposed an extension of 90 days, but that was knocked back by the U.S. side, people familiar with that request said.

Senate Democrats press Trump for China IP, tech transfer commitments | Reuters:

Led by Senator Robert Menendez of New Jersey, the senators said in a letter to Trump that any deal with Beijing must at a minimum commit China to “cease the predatory practices” identified in USTR’s Section 301 investigation, which formed the basis for U.S. tariffs on Chinese goods.

“As you approach the final weeks of negotiations with China, we urge you to insist that the deal make substantial, verifiable, and enforceable progress to address the myriad threats identified in USTR’s investigation,” the senators wrote.

Marco Rubio: The stakes couldn't be higher for the U.S.-China trade talks - The Washington Post:

Trump is doing what few thought possible: creating powerful leverage that could be used to change the behavior of China’s government and potentially bring more balance and reciprocity to the entire relationship. If American negotiators waste their leverage by prematurely agreeing to a bad deal, China will be emboldened to pursue policies that run directly counter to America’s national interest, and the United States will risk losing this century’s most important strategic, economic and geopolitical competition.

Comment: Congress will not be happy with a weak trade deal...the bipartisan views towards China are even more "hawkish" than the administration's

Opinion: China Should Ignore the Trade War - Caixin OpEd:

In the long-run, the China-U.S. trade war could drag on and result in severe consequences, as it is a U.S. containment plan under the pretext of trade protectionism. What is unfolding before us is not only a trade war, but also a comprehensive economic, political, cultural, scientific, technological and ideological contest...

Beijing must clearly realize China still has a huge gap with Washington in areas such as technological innovation, high-end manufacturing, financial services, university education and military power. Most of China’s new economic prosperity is based on technological applications, but basic research and development is obviously falling short. We must continue to be modest in learning and unswervingly promote a new round of reform and opening-up. In this sense, this Sino-U.S. trade war may not be a bad thing, as it can turn crisis into opportunity and transform pressure into motivation.

The financial deleveraging campaign and trade war have revitalized calls for resorting to stimulus. This is very short-sighted and misleading. If the trade war leads us to return to the old path of monetary stimulus, Japan’s 1990 failure will be repeated. The best response is to promote a new round of reform and opening-up.

Ren Zeping is a chief economist with Evergrande Group

Comment: The irony of course if that China were to agree to all of the US demands its economy would likely become much stronger in the medium to longer term and be a much more serious competitor to the US…Careful what you wish for?

Global Times take on the Asia Society report, not a constructive set of learnings - - US must end anti-China ‘political tsunami’ - Global Times

US anxiety about China's rise is the biggest challenge to a stable and constructive China-US relationship. It also makes many Chinese people worry how much a trade deal would stabilize the two countries' relations. They believe that a trade deal may be reached, but it is not likely to bring China-US relations back to a constructive level.

Many of Washington's demands on Beijing are US-centered, lacking a basis in international law and morality. The US seeks absolute security and opposes China's national defense building which matches its economic scale.

The US also wants China to be as humble and restrained as a small country. It doesn't accept China's influence as the world's second most powerful country.

China is strongly self-disciplined, but the US is not. The US wants to affect China's development and will blame Beijing for not following Washington's path. Whether politics, economics or ideology, the US seeks to interfere in China's domestic affairs. Meanwhile Beijing's effort to promote friendship is regarded as infiltration.

The Chinese original 社评：美国需要平息对华“政治海啸” 

---

2. More policy support for private enterprises

Central Committee General Office and State Council General Office issue opinion on strengthening financial services support for private enterprises, make it clear policies and implementation to date have been lacking-中共中央办公厅 国务院办公厅印发《关于加强金融服务民营企业的若干意见》-新华网:

民营经济是社会主义市场经济的重要组成部分，在稳定增长、促进创新、增加就业、改善民生等方面发挥着不可替代的作用。党中央、国务院始终高度重视金融服务民营企业工作。各地区各部门及各金融机构认真落实，出台措施，积极支持民营企业融资，取得一定成效，但部分民营企业融资难融资贵问题仍然比较突出。为深入贯彻落实党中央、国务院决策部署，切实加强对民营企业的金融服务，现提出如下意见。

It was the second item on the 2.14.19 CCTV Evening News 中办 国办印发《关于加强金融服务民营企业的若干意见》

China to cut private firms' financing costs, improve access to funds - Xinhua | Reuters:

Efforts will be made to improve monetary policy transmission mechanisms to make banks more willing to lend to private firms, the cabinet said. Private firms, with limited collateral, are considered riskier than state-backed firms.

The government will also encourage financial institutions to boost investment in debt issued by private firms and improve the effectiveness of the central bank’s targeted reserve requirement ratio (RRR) cuts for banks to help private companies.

China Defaults Show SOEs Gain at Expense of Private Enterprise - Bloomberg:

The most obvious revelation from the latest hubbub is that private companies continue to bear the brunt of tighter credit conditions. Despite the government’s recent pledges to help tide them over, small enterprises still lack refinancing options as the shadow-banking crackdown presses on. With around 3 trillion yuan of onshore corporate bonds set to come due this year, the odds aren’t looking good.

地方各出实招缓解小微企业融资难 _ 经济参考网 _ 新华社《经济参考报》官方网站:

2019年各地两会陆续闭幕，各省、自治区、直辖市的政府工作报告也相继出炉。记者梳理发现，地方政府工作报告将金融支持小微企业和民营企业以及缓解小微企业融资难问题列为工作规划的重点。其中，新设政策性融资担保基金和纾困基金以及发展民营银行、社区银行等地方金融机构等成为诸多地方政府政策清单的重要选项。与此同时，为了从根本上提升地方金融支持实体的力度，多地政府也提出因地制宜推动当地金融改

Some local governments have been setting up government funds and “community banks” to finance small private firms since last year-地方各出实招缓解小微企业融资难 设立地方政府基金_财经网

---

3. Huawei

Huawei heaps pressure on Telstra, Google over think tank funding -Sydney Morning Herald:

Electronics giant Huawei has attempted to pressure some of Australia's biggest companies, including Telstra, over their support for a defence policy think tank that has been critical of Chinese telecommunications providers.

A Huawei Australia executive emailed letters to the Australian Strategic Policy Institute's high-profile sponsors Google, Telstra and Thales on Wednesday afternoon criticising the think tank's approach as "anti-China" and warning their support of the organisation might reflect poorly on them.

U.S. Push Against Huawei Gear Hits an Obstacle: Carriers That Love It - WSJ $$:

The chief executive of a major Italian wireless carrier was summoned last fall to the U.S. embassy in Rome, where diplomats and intelligence officers asked his company to stop using Huawei, without sharing evidence, a person familiar with the meeting said. The carrier continued to use Huawei gear, the person said, adding that “there is no replacement to Huawei in the market.” A spokeswoman for the U.S. embassy in Rome declined to comment on private meetings...

A State Department official said the U.S. is focused on lobbying governments in European countries, rather than governments in developing areas, because Europe closer to launching 5G, the speedy wireless technology that could enable self-driving cars, factory parts and everyday objects to be internet-connected, and therefore potentially hacked. Washington is targeting Huawei, the world’s top telecom-equipment maker, because it is much bigger than ZTE.

Chinese netizens divided after questions on Huawei appear on fifth grade exams · TechNode:

After questions casting smartphone brand Huawei in a positive light appeared on an exam for fifth graders, Chinese netizens reacted with alarm and suspicion. However, further reporting revealed that the problems weren’t planted ads, leaving online reaction divided.

The incident took place in Luoyang in the central Chinese province of Henan, The Paper reported (in Chinese). Fifth graders in 27 primary schools were quizzed on a short video about Huawei. On the test, students were instructed to watch the video once, read the questions, and re-watch the clip before answering.

Huawei Night in Canada: Inside tech giant’s push to burnish its brand | AP:

As a nasty diplomatic feud deepens between Canada and China over the tech company, involving arrests and execution orders, it hasn’t gone unnoticed that Huawei’s bright red fan-shaped logo is plastered prominently on the set of “Hockey Night in Canada.” TV hosts regularly remind the 1.8 million weekly viewers that program segments are “presented by Huawei smartphones.”..

Rogers Communications, which broadcasts “Hockey in Night in Canada” and has exclusive Canadian distribution rights for Huawei smartphones, said it has no plans to change its sponsorship deal, which started in 2017 and runs to the end of 2020.

---

4. The wrong kind of Marxists

Comment: This is an excellent, long story on the student activists. If you are not an FT subscriber you should consider becoming one, and you can also read this story using the Google backdoor by putting the headline in Google and searching for it.

This is far from the first time the Party has cracked down on Marxists who were pursuing an incorrect line; in fact the Party's history is filled with brutal purges of people who thought they were more Marxist and politically correct than those in power...

Inside China’s crackdown on young Marxists | Financial Times $$:

Luke, an undergraduate student at one of China’s elite universities, recalls the day he became a committed Marxist. It was not in the countless hours of compulsory Marxism lectures he endured as part of the undergraduate curriculum, but during his first-year winter break in Beijing. Along with 20 other young workers, he squeezed into a minivan with nine seats and was driven to a small workshop on the outskirts of the city. There, he put together cardboard packages for 12 hours in a below-freezing room with no heating.

What startled him most were the hands of the dozen young women living in the workshop, which were “swollen like radishes” from the cold. Unlike him, they had not had the opportunity to finish school. The boss of the workshop had brought them there from their hometown, and they did not know when they could go back.

“They were like slaves. I thought, this capitalist mode of production can turn people into feudal serfs,” says Luke (not his real name)...

“The students’ commitment to a purer form of Marxism only serves to highlight the CCP’s own drift from its roots,” says Jude Blanchette, author of a forthcoming book on China’s neo-Maoists. “This, crucially, has been why the left in China has always presented more of a challenge to the party leadership than the right.”

---

5. Swedish Ambassador freelancing over Gui Minhai?

“Damned if you do, damned if you dont”? I won’t. – Angela Gui – Medium:

In mid-January I was contacted by Anna Lindstedt, Sweden’s ambassador to China. Her and I had been in quite frequent touch over the phone since her assignment two and a half years ago. She asked me to travel to Stockholm for around the 24th of January, saying there was ‘a new approach’ to my father’s case. She didn’t explain very much, but said that there were some businessmen she thought could help, and that they wanted to meet me in Stockholm. She’d join too, and these were people she trusted, she reassured me. She put me in touch with one of these men, and he offered to cover my flights and hotel, asking me to send him my passport details...

As I left Stockholm, I wondered how much of this the Swedish Ministry of Foreign Affairs was really aware of. Nothing at all, it turns out. When I rang up officials at the Ministry the following week, they told me they hadn’t had the slightest idea this whole affair was taking place. They hadn’t even been informed the ambassador was in the country.

Swedish ambassador to China recalled after bizarre meeting over detained bookseller:

Ambassador Anna Lindstedt left her post in Beijing on Wednesday, the embassy’s acting chief of mission, Karl-Olof Andersson, confirmed to The Washington Post on Thursday without providing further details.

Sweden’s national public television broadcaster, SVT, reported that Lindstedt is under investigation by the Foreign Ministry over a meeting that she apparently arranged with Angela Gui, the daughter of the imprisoned publisher Gui Minhai, without the ministry’s knowledge.

Lindstedt’s recall is the second high-profile incident to hit Beijing’s diplomatic community after the Canadian ambassador John McCallum was forced out in January following comments in apparent support of a Chinese technology executive currently detained in Canada.

---

6. UK has upset Beijing

That golden era went fast...and now even less likely David Cameron will get his UK-China investment fund funded.

Defence Secretary Gavin Williamson accused of blowing access to Chinese markets worth billions - The Sun:

China's deputy PM Hu Chunhua cancelled scheduled trade talks with Philip Hammond after Mr Williamson publicly lashed China’s military ambitions..

A source told The Sun: “There is huge anger across Cabinet. Gavin was partially inciting a war – the team knew China wouldn’t be happy.”

China had been expected to lift their bans on British poultry and cosmetics which have not been tested on animals.

The agreements would have opened up access to markets worth an estimated £10.2billion over five years.

UK’s reliance on China’s nuclear tech poses test for policymakers | Financial Times $$:

The UK has no easy way to block China’s ambitions to export nuclear reactor technology to Britain on security grounds, despite growing public anxiety about Chinese involvement in sensitive infrastructure, according to people familiar with the situation.

The government’s willingness to permit the state-owned utility, CGN, to participate in the UK’s nuclear power generation programme has raised eyebrows in recent months as Chinese investment has come under hostile scrutiny, both in Europe and the US.

Charles Parton Pens A letter to Xi Jinping: time to reset relations | Financial Times: 

Now forgive me if I make one or two slightly critical suggestions, out of the best of motives, because attitudes in Europe really have changed and you might want to be aware of that. Firstly, building our trade and investment has to be on the basis of a level playing field and there the onus is on you to provide one as soon as possible. Even the Germans are saying so. 

Respect for intellectual property is another essential element in building wider co-operation and trust. I am afraid that also includes stealing our commercial secrets... 

A couple of other things, if I may. One is interfering in our internal affairs, complaints about which are only going to increase if you persist in doing so. We are peculiarly attached to our values and systems (and rather more strongly attached than you might expect, so eventually interference will lead to a backlash even in Europe and the UK, which is not to either of our advantages).

---

7. New Zealand has also upset Beijing

New Zealand Fears Fraying Ties With China, Its Biggest Customer - The New York Times:

The Huawei ban came as a “shock” to Beijing, said Mr. Mahon, the businessman, who added that New Zealand’s reputation as an independent voice on the world stage was being eroded by its alignment with the United States over the ban, as well as its tougher language on China’s actions in the Pacific and South China Sea.

“Either we have changed our view and we want to be much closer to Washington, or this is a series of misadventures, mistakes and misunderstandings,” Mr. Mahon said. “But we need to qualify it soon.”

New Zealand officials have rejected assertions that the government’s relationship with Beijing has cooled.

Comment: New Zealand is either in the "Five Eyes Alliance" and it supports the alliance's shift on China or it needs to become "Four Eyes"...Xi's China has forced this decision

NZ/China relationship: 'We have a big problem' - NZ Herald:

New Zealand has lost its favoured status with the Chinese political leadership following the Government decision to rule Huawei out of the 5G mobile build here, says Beijing based kiwi businessman David Mahon.

Mahon, who has been in China for 34 years, said he believes Beijing already has a strategy in place for retaliation.

"In the last almost 40 years New Zealand has had a brilliant relationship with China, more for its independence and the respect Beijing had for the way that New Zealand stood on its own principles," Mahon told the Herald in Auckland today.

---

8. Alibaba payments increase global reach

Jack Ma's Ant Buys U.K.'s WorldFirst in a Giant Step Abroad - Bloomberg:

Ant Financial, the Chinese financial services giant controlled by billionaire Jack Ma, bought London-based payments company WorldFirst in its biggest overseas deal since a U.S. expansion was thwarted.

The acquisition marks the Chinese company’s first big move into the U.K., although its Alipay service is accepted by some merchants there already. That should allow Ant to better serve smaller businesses worldwide, including in the U.S., it said in a statement.

China’s Alipay digital wallet is entering 7,000 Walgreens stores | TechCrunch:

China’s payments heavyweights have been following tourists abroad as their home market gets crowded. Ant Financial, Alibaba’s financial affiliate with a said valuation of $150 billion, now sees its virtual wallet Alipay handling transactions at 3,000 Walgreens stores in the U.S. and is eyeing to reach a roster of 7,000 locations by April.

Little Red App: Xi’s Thoughts Are (Surprise!) a Hit in China - The New York Times:

Is there a social element? Of course there is. Study the Great Nation is integrated with DingTalk, a messaging app made by the e-commerce giant Alibaba. As a result, you can call or text your friends in the app, host video hangouts and even send messages that disappear, Snapchat-style, after they are read.

Comment: Alibaba built at least the chat piece in this app. It is unclear who built and runs the entire app...If Alibaba is powering the whole thing then expect its involvement to be used as another reason for foreign governments to be suspicious of the company...and how long until there "cheats" that are so common in the online game industry that party members can buy to earn their Xi app points for them...

---

Business, Economy, Finance And Trade

China January trade, imports, exports: Beijing reports China economic data Dollar-denominated exports for the month rose 9.1 percent from a year ago, according to Chinese customs data. China's exports in January were expected to have contracted 3.2 percent from a year earlier, according to economists in a Reuters poll, compared with the previous month's 4.4 percent decline. January dollar-denominated imports, meanwhile, fell 1.5 percent on-year, which was far better than expectations of a 10 percent decline from a year earlier, according to the Reuters poll. Imports in December fell 7.6 percent from a year ago. China's overall trade surplus was $39.16 billion in January. That easily topped the $33.5 billion expected, according to the Reuters poll. That was still lower, though, than December's trade surplus of $57.06 billion.// Comment: Hard to get excited about the data giving the distorting effects of the Lunar New Year holiday, which came earlier than last year,...most migrant workers do not return to factories until after the 15th day of the Lunar New Year--February 20 this year--so production won't really ramp up until around the March 1 "deadline".

US exports to China plunged in January as trade war chill took effect | South China Morning Post: Chinese imports of US products plunged 41.1 per cent from a year earlier to US$9.2 billion last month, the lowest since February 2016, according to data released by the Chinese General Administration of Customs on Thursday. The fall in US exports to China contrasted sharply with the China’s overall imports last month, which remained largely steady with only a 1.5 per cent fall year-on-year.

State Council releases vocational education reform implementation plan - Xinhua Vocational education and training systems will be reformed to match with science and technology development trends and market demands and to promote economic modernization and higher quality employment, the official documents note. All sectors of society, especially enterprises, are encouraged to support the country's vocational education, it says, adding that major companies are welcome to run vocational schools and offer high-quality programs. The plan details measures to improve national systems and policies relating to vocational education and lift the quality of both secondary and higher vocational education in the country.

Tourism rises 70% during Spring Festival in Xinjiang - Global Times During the weeklong Spring Festival holidays that ended on Sunday, over 3 million trips were made to Northwest China's Xinjiang Uyghur Autonomous Region, an unprecedented 71 percent year-on-year growth, data from Xinjiang's tourism department shows.  Over 2.18 million trips, or 72 percent, were made by locals in the region, and traveling has become a popular lifestyle for Xinjiang people to spend the most important festival for family reunion as a result of social development and stability, the department said.

New High-Tech Board Stirs Hype Concern Among Regulators - Caixin China’s top securities regulator Wednesday sought comments from the industry on the forthcoming Nasdaq-style high-tech board, expressing concerns over possible market hype, sources told Caixin. The China Securities Regulatory Commission (CSRC) convened a meeting with experts and executives from brokerages, mutual funds, venture capital and tech startups to discuss rules for the planned high-tech board in Shanghai and the pilot program to test registration-based initial public offerings (IPOs).

China healthcare compliance is still a ‘donations’ minefield - The FCPA Blog - The FCPA Blog In this article, we outline three symptoms of a suffering compliance function in China and offer our advice on how to stay healthy and ahead of the curve...Many companies still do not view sponsorships and donations as carrying much, if any, compliance risk. That is simply not the case...

以供给侧结构性改革为主线（经济形势理性看）--房产--人民网 Lin Zhaomu in the Theory section of the 2.14.19 People's Daily on recapping and reaffirming Xi’s supply side reform over the past three years

Nation's property sector remains robust - China Daily Experts said the Spring Festival holiday was the major factor behind the significant drop in property sales performance nationwide in the first month of 2019 and did not necessarily represent a negative market trend for the industry. According to Centaline Property Agency's research, in January property sales declined by 38 percent year-on-year in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen. Among the four cities, Guangzhou saw the most dramatic decrease of 65 percent year-on-year, followed by Beijing, where home sales dropped by over 40 percent.

China's bad debt managers risk becoming bad credits themselves | Reuters as China’s economy posts its slowest annual growth in 28 years amid the Sino-U.S. trade war, Chinese vulture funds are finding themselves mired in their own liquidity squeeze. The industry’s woes not only hamper Chinese banks’ ability to quickly offload bad debts to make room for fresh lending, but also increase financial risks in the system and threaten social stability as tens of thousands of retail investors lose their savings in vulture fund investments.

China's 5G Stock Trade Gets Crowded as Speculators Pile In - Bloomberg The latest trigger was China Mobile Ltd.’s huge order for fiber-optic cable, lifting shares of likely bidders in Hong Kong and onshore. The optimism spread wide across the telecom sector, boosting ZTE Corp. and Xiaomi Corp. which don’t even make cables. That followed news earlier in the week that China plans to expand the usage of e-payments in rural areas -- a policy that will require greater Internet coverage and more smartphones.

---

Politics, Law And Ideology

Wife of Missing Former Interpol Chief Removed From Political Body - Caixin Gao Ge (also known as Grace Meng), the wife of former Interpol president Meng Hongwei, was removed from the 12th Shandong Committee of the Chinese People’s Political Consultative Conference, the region's leading political advisory body to the government and for Communist Party affairs, according to an official statement issued in January but only recently discovered.

陕西出台秦岭生态保护行动方案 突出抓好乱搭乱建等整治_工作 Shaanxi government issues instructions to implement Xi’s order on protecting the natural landscape of Qinling mountain after the villa scandal

交出一份高质量发展的答卷——江苏落实习近平总书记全国两会重要讲话精神纪实--新闻报道-人民网 lots of propaganda love for Jiangsu this Valentine's Day in a long page 11 People's Daily piece how successful the province has been at implementing the spirit of Xi speeches at the "Two meetings"...Jiangsu Party Secretary Lou Qinjian 娄勤俭 must be feeling pretty good

发挥利剑作用 推动解决基层突出问题——关于市县巡察向村级党组织延伸的调研————要闻——中央纪委国家监委网站 interesting CCDI newspaper report on inspection tours of grassroots/village cadres...the lowest officials--the "flies"--are often the most problematic, and have been throughout Chinese history..

Sic transit gloria mundi — Ten Years of A Prosperous Age - China Heritage: On 7 February 2019, the WeiBo publication NGOCN featured an interview with Chan Koonchung (陳冠中, b.1952, also know by his English name, John Chan) the author of In an Age of Prosperity. The translation of that interview below is part of our China Heritage Annual 2019...// Here is a 2010 interview Jeremy Goldkorn did with Chan on my Beijing CBD deck:

---

Foreign and Military Affairs

Beijing intensifies lobbying of Pacific nations to recognise Taiwan as part of One China - China power - ABC News (Australian Broadcasting Corporation) Sources from two Pacific Island nations say Chinese officials have tried to convince them the Pacific Islands Forum (PIF) should accept that the Chinese Communist Party is the rightful government of both the mainland and Taiwan. The move is inflammatory because the Pacific remains one of Taiwan's last bastions of diplomatic support, with six nations in the region — Solomon Islands, Kiribati, Marshall Islands, Nauru, Tuvalu and Palau — recognising Taipei rather than Beijing.

Solomon political parties back continued ties with Taiwan - Pacific Beat - ABC Radio Australia The main political parties contesting the election, including caretaker Prime Minister Rick Hou's Democratic Alliance Party, say they will maintain the current arrangement. "In order to satisfy everyone, we said that we'd have a  review of that particular relationship with Taiwan [but] that doesn't mean we'll break our relationship with Taiwan," party president John Usuramo told Pacific Beat.

Canada could learn from Australia's anti-foreign interference laws, experts say | The Star  Australia’s experience should be an example for us, not just because it is admirably clear-eyed, but because it shows a degree of self-confidence that we should emulate,” David Mulroney, who was Canada’s ambassador to China from 2009 to 2012, wrote in an email. “China commonly seeks to compel its adversaries to capitulate without a struggle,” said Mulroney, who is now a fellow at the University of Toronto’s Munk School of Global Affairs and Public Policy. “We shouldn’t be afraid to stick to our principles because we’ll find that, despite its bluster, China is pragmatic and will seek to protect its own considerable interests in the relationship with Canada.”

China to Fund Installation of Modern Facilities at Pakistan-Afghan Border Crossings - VOA Beijing, which is on good terms with both countries, continues to undertake diplomatic and economic initiatives to help improve Islamabad’s troubled ties with Kabul and encourage them to jointly work for a political settlement with the Taliban to end the Afghan war. The deputy chief of mission at the Chinese embassy in Islamabad, Zhao Lijian, told VOA in a wide-ranging interview the border development program is an outcome of recent high-level talks held in Kabul between foreign ministers of the three countries.

Future South China Sea FONOPS Will Include Allies, Partners - USNI News Adm. Phil Davidson, appearing before the Senate Armed Services Committee on Tuesday, said North Korea represents the most immediate challenge in the region but China’s behavior regarding extending its territorial and economic influence is the bigger long-term threat to maintaining the free movement of trade and people in the region. “Through fear and coercion, Beijing is working to expand its form of ideology in order to bend, break and replace the existing rules-based international order,” Davidson said. “In its place, Beijing seeks to create a new order, one with Chinese characteristics, led by China, an outcome that displaces the stability and peace in the Indo-Pacific that has endured for over 70 years.”

PLA Daily: Does the US know "absolute security" doesn't exist? - China Military For the US, its enemies are, to a certain extent, conceived and erected by itself. As the US spares no efforts in strengthening the security of its homeland as well as allies and partners, it will weaken the security of other countries to some extent, thus triggering arms races that consequently increase the security threats to the US.   Unfortunately, the US doesn’t realize that achieving “absolute security” requires not only cooperation with its allies and partners but also strategic balance. From the philosophic perspective, the so-called “absolute security” doesn’t exist.   (The article was published on the PLA Daily on Feb. 14, 2019.)

PLA Daily: Fight against Islamic State is moving to Africa - China Military he international community must be prepared in advance to prevent the "return" of IS to Africa. It is necessary to step up its assistance to African countries by providing adequate funds, equipment and technology to improve their counter-terrorism capabilities, as well as to help African countries to develop their economies and improve people’s living standards. Cutting off transfer channels of funds and personnel for IS and strengthening border control and cooperation are also effective measures to trap IS and eliminate the remnants of terrorists groups. （The author is Zhang Aimin. The article was published on the PLA Daily on Feb. 13, 2019.）

With eyes on China, EU lawmakers back investment screening | Reuters EU lawmakers overwhelmingly backed a far-reaching system on Thursday to coordinate scrutiny of foreign investments, notably from China, to protect strategic technologies and infrastructure in Europe.

U.S.'s Bolton speaks to El Salvador president-elect about 'predatory' China | Reuters El Salvador’s President-elect Nayib Bukele spoke by phone on Wednesday with U.S. National Security advisor John Bolton, who said he requested cooperation to counteract what he called the “predatory” expansion of China.

India Proposes Chinese-Style Internet Censorship - The New York Times India’s government has proposed giving itself vast new powers to suppress internet content, igniting a heated battle with global technology giants and prompting comparisons to censorship in China.

---

Taiwan

Ep. 10: Taiwan and the Global Order – Shelley Rigger | Center for the Study of Contemporary China What explains Taiwan’s outsized presence in our news headlines, especially over the first two years of the Trump administration?  What can be learned from its raucous process of democratization over the past thirty years?  How will it continue to forge its unexpected identity, against the backdrop of China’s ever-deepening shadow?  In this episode, Davidson College political scientist Shelley Rigger, one of the foremost authorities on Taiwan’s domestic politics and international standing, discusses these questions with Neysun Mahboubi, in relaying the dramatic modern story of Taiwan, and what it reflects about shifts in global ordering over time

---

Tech And Media

Film and TV Stars Top Contributors to Zhejiang City’s Tax Revenue - Caixin Home to Hengdian World Studios, which claims to be the world's largest outdoor movie and television lot, Dongyang is one of China’s major film production hubs. The city’s tax collections drew attention after authorities launched a crackdown on tax payment loopholes that allow some of the country’s highest-paid movie stars to minimize tax payments. Three individual studios owned by A-list celebrities topped tax payments in Dongyang last year. The studio of singer Lay Zhang paid 19 million yuan ($2.8 million) in taxes, followed by the studios owned by actresses Yang Mi and Jing Tian. Huayi Brothers Media Corp., one of China’s biggest film companies, was also among the largest taxpayers in Dongyang.

China's Chip Fab Capacity Rising Fast | EE Times At the end of 2018, China accounted for 12.5% of the world's global fab capacity, up from 10.8% in 2017, IC Insights said. The 12.5% share put China nearly in a dead heat with North America, the firm said.

Rebecca Davis Joins Variety as China Bureau Chief – Variety Davis will cover a land that boasts the world’s second-largest movie market and a burgeoning television industry and that has developed extensive ties with Hollywood in recent years. Formerly a reporter with Agence France-Presse, Davis is based in Beijing, and has long had a professional interest in and personal fascination with the Chinese entertainment scene.

And the Financial Times has hired Christian Shepherd from Reuters to join its Beijing bureau:

Christian 马思潭 @cdcshepherd

公报: I’ll be on a brief work hiatus for the next few weeks before rejoining the @FT in March as a (visa pending) Beijing correspondent. Sad to be leaving Reuters after two great years, but excited for a new era. 不忘初心，砥砺前行！

China Indies Undergo Change – Variety Yet rather ironically, more than rising censorship, it may be the Chinese market’s robust growth that has actually siphoned people away from the indie sector, as filmmakers chase after what Zhang Xianmin, one of China’s foremost indie producers, calls “the illusion of fast fortune.” With too much money chasing too few projects, young directors today are spoiled for choice, often snapped up for big projects soon after graduation or completing their first few shorts.

Chinese sci-fi movie 'The Wandering Earth' pulls in $440 million in 10 days | Reuters Figures posted on Thursday on the film’s official account on China’s Twitter-like Weibo show the sales were reached in 9 days and 16 hours, which analysts and media said broke a record of 10 days and 15 hours set by “Wolf Warrior 2”. The patriotic Rambo-style “Wolf Warrior 2” is China’s highest-grossing movie, hitting 5.7 billion yuan in box office sales last year

China Web Series, Online Films Required to Register, Report Actor Fees – Variety All live-action and animated series intended for online distribution with budgets of more than RMB5 million ($740,000) and all online movies with budgets exceeding RMB1 million ($148,000) must now register and pass approval twice before they are disseminated to viewers, China’s National Radio and Television Administration (NRTA) declared in a December directive posted Wednesday to its official website. Companies must report their project’s title, genre, content and budget before production begins, and provide an update on information including actual expenses and actor pay after completion. The new regulation goes into effect Friday.

Reddit promises never to censor itself for its Chinese investors - Inkstone CEO Steve Huffman sought to assuage worries of some users that the largely freewheeling site would be shackled by the investment, which gave Tencent a 5% stake in Reddit. “Will you ever modify or remove content to appease your new Chinese investors?” a user asked Huffman in a public post on Thursday. Huffman, also known as spez on the site, said, “No.” He also answered “yes” to the question, “Can you commit to never doing so?”

---

Society, Art, Sports, Culture And History

In Cliffside Village, Hipster Bookshop Spurs Rural Revival - Sixth Tone With the twisted mountain road blocked by yesterday’s snow, Zhao Weiren and his friends have no choice but to park their car and climb the last leg of their trip. They’ve come to visit Chenjiapu, a somewhat picturesque but otherwise ordinary village of 100 or so houses with beige plaster and black shingles. Hugging a steep hillside amid forests of bamboo and ancient trees, the village spends much of the year enveloped in fog. Like elsewhere in the Chinese countryside, young people have long moved away, leaving behind a few dozen elderly farmers. But then a bookshop opened. On any given day, hundreds, sometimes thousands of people now make the journey up to the village to visit Chenjiapu Bookstore.

Beijing Guoan's Hou Yongyong gets his ID card as Chinese citizen - CGTN Norwegian-born John Hou Saeter received his ID card as a Chinese citizen on Tuesday making him the first naturalized soccer player in China's history. The mixed-race midfielder, whose Chinese name is Hou Yongyong, joined Chinese Super League (CSL) side Beijing Guoan from Norway's top division Eliteserien at the end of January.  The move means that Hou, who turned 21 last month and has a Chinese mother and Norwegian father, could register with the Chinese Football Association (CFA) as a native player and even be called up by the national team.

China’s two-child policy under fire as parents’ bank account frozen for having third child | South China Morning Post The couple, from China’s eastern province of Shandong, failed to meet the deadline to pay the “social maintenance fee” of 64,626 yuan (US$9,500) to the local authority, the local court said on Sunday, and were denied access to the 22,987 yuan in their account as a result.

Roderick MacFarquhar Article Collection - China Quarterly outside the paywall

麦克法夸尔：文革起源的探索者 - - FT中文网 interesting obituary of MacFarquhar by Prof. Xu Chenggang in FT Chinese

---

Energy, Environment, Science And Health

Authorities deny "permanent closure" of Mount Qomolangma reserve - Xinhua Authorities in China's Tibet Autonomous Region have denied the "permanent closure" of Mount Qomolangma National Nature Reserve. The announcement came after a report went viral online claiming the base camp of the world's highest mountain was "permanently closed due to heavy pollution.

China environmental crime arrests up more than 50 percent in 2018: ministry | Reuters In 2018, authorities also prosecuted 42,195 people for a range of environmental offences such as illegal deforestation and land occupation, as well as unlawful mining and fishing activities, said Zhang Zhijie, a senior prosecutor with China’s Supreme People’s Procuratorate. The number of prosecutions was up 21 percent on the year, although they were still relatively small compared to the total number of environmental violations, which reached 130,000 in the first nine months of 2018 alone

---

Education

Twelve University Officials Punished for Deadly Lab Explosion - Caixin Global A Beijing University held 12 senior officials accountable for an explosion at a lab that killed three students in December. The Beijing Jiaotong University imposed administrative penalties for the accident on officials including the university’s Communist Party chief, president and a vice president. Two people in charge of the lab face criminal charges, according the government-backed newspaper Beijing Daily.

Zhejiang education department limits students' online time in draft regulations · TechNode Education officials in the eastern Chinese province of Zhejiang have released a set of draft regulations that would limit the use of electronic devices for schoolwork, citing a need to prevent myopia. The new rules prohibit assigning homework via apps, stating that take-home assignments should be on paper. In addition, instruction that uses electronic devices must not make up more than 30% of teaching time.

Beijing education authorities monitor Zhai Tianlin probe - China Daily The Education Work Committee of the CPC Beijing Municipal Committee and Beijing Education Commission have sent an investigative team to the Beijing Film Academy, where Zhai obtained a Ph.D., to look into the case, the university said in a statement on Thursday. Zhai, 32, is also a postdoctoral candidate at Peking University. He found himself in hot water on social media after a Sina Weibo blogger accused him of plagiarism last week.

---

Food And Travel

China sees over 30.5 mln visits by foreign travelers in 2018 - CGTN Foreign travelers made 30.54 million trips to China in 2018, a 4.7 percent increase than that of 2017, according to China's Ministry of Culture and Tourism. Travelers stayed at least one night in China on 23.64 million of the trips, a growth of 5.2 percent than the figure of 2017, said a post on the ministry's website Tuesday.

Slow trains still serving remote communities - China Daily According to China Railway Corp, 81 of the slow trains that make frequent stops are still in operation in 21 provinces, including 35 ethnic minority areas. Most of them are in southwestern, northwestern and northeastern regions. An average of 62,000 daily trips are made by these slower trains to provide rural residents with easier and cheaper travel alternatives.

---

Beijing

Beijing unveils plan to transform vacated "Steel City" - Xinhua The Beijing municipal government has published a plan to transform a vacated industrial site in its western suburb into a city landmark by 2035, as part of the preparation for the Beijing 2022 Winter Olympics. The new area, on the basis of the Shougang Park, a former steel plant relocated to neighboring Hebei Province in 2010, covers an area of 22.3 square km, according to the plan released Wednesday by the city's development and reform commission.