Fourth Plenum; 5G launches; Shanghai shuts online P2P lending; Pompeo's series of speeches on China

The Fourth Plenum has concluded, there was no announcement of any personnel changes other than the automatic ascension to full membership of the two alternate Central Committee members discussed yesterday.

Sinocism readers were right to be very skeptical of the rumors going around, though the lack of any public sign of pressure on Xi by way of enlarging the Politburo Standing Committee or making clearer signals about anointing successor will probably not stop the rumors that Xi is under pressure, weakened by missteps over Hong Kong and the relationship with the US, or facing a backlash that would force him to share more power. Seek truth from facts as they say in Beijing, and right now the facts as I can observe them are not pointing towards a weakened Xi.

The Plenum Communique reiterated that China is facing many risks, as one would expect given that nine months ago Xi convened a three day meeting of just about the same audience on risks; it articulated the advantages of the PRC’s system of socialism with Chinese characteristics; it emphasized that the Party needs to lead everything, and discussed further refinements to the “Party eats the State” reforms from last year’s Third Plenum, again not a surprise given that three months ago Xi convened a three day meeting of just about the same audience to discuss the progress of those reforms from the Third Plenum.

Item 1 below has a long excerpt of the Xinhua English summary (it is important to read what they say). Over the coming days I and others will be digging into the communique and so hope we will have better insights about what it means for future policies. On the first couple of passes the document and its goal of advancing the modernization of China's system and capacity for governance reads a bit like a top-level roadmap for a highly functioning authoritarian superpower.

Thanks for reading.


The Essential Eight

1. Fourth Plenum Communique

19th CPC Central Committee concludes fourth plenary session, releases communique - Xinhua

The session reviewed and adopted the CPC Central Committee's decision on some major issues concerning how to uphold and improve the system of socialism with Chinese characteristics and advance the modernization of China's system and capacity for governance. Xi explained the draft document to the plenary session....

The session fully affirmed the work of the Political Bureau of the CPC Central Committee since the Third Plenary Session of the 19th CPC Central Committee, acknowledging its endeavors that led to major achievements in various causes of the Party and the country despite complicated situations marked by increasing risks and challenges at home and abroad....

The communique said China's state and governance systems enjoy notable strengths in the following aspects:

-- Upholding the centralized and unified leadership of the CPC, following the CPC's scientific theories, maintaining political stability and ensuring that the country keeps advancing in the direction of socialism;

-- Seeing that the people run the country, promoting the people's democracy, maintaining close ties with the people and relying on them to push forward the country's development;

-- Ensuring law-based governance in all fields, building a country of socialist rule of law, and guaranteeing social fairness and justice and the people's rights;

-- Ensuring the whole country works together and stimulating the enthusiasm of all aspects to mobilize resources for major undertakings;

-- Upholding equality between all ethnic groups, creating a strong sense of community for the Chinese nation to work jointly for common prosperity and development;

-- Upholding the dominant role of the public sector and common development of economic entities under diverse forms of ownership, the distribution system whereby distribution according to labor is dominant and a variety of other modes of distribution exist alongside it, the synergy between the socialist system and the market economy, and continuously unlocking and developing the productive forces;

-- Upholding common ideals and convictions, values, and moral standards, promoting China's fine traditional culture, revolutionary culture and advanced socialist culture, as well as inspiring the people to embrace shared ideologies and mindsets;

-- Adhering to the vision of making development people-centered, and continuously guaranteeing and improving people's livelihoods and improving people's wellbeing to achieve common prosperity for everyone;

-- Continuing reform and innovation, moving with the times, and promoting self-improvement and development to build a society full of vitality;

-- Selecting officials based on integrity and ability and on the basis of merit regardless of background to cultivate more talented individuals;

-- Keeping the armed forces under the Party's command and ensuring that the people's armed forces are completely loyal to the Party and the people so as to safeguard China's sovereignty, security and development interests;

-- Upholding the principle of "one country, two systems," maintaining lasting prosperity and stability in Hong Kong and Macao, and promoting the peaceful reunification of China;

-- Adhering to the unity of independence and self-reliance and opening up to the rest of the world, taking an active part in global governance, and continuing to make contributions to the building of a community with a shared future for humanity.

"All these notable strengths are the fundamental basis for fostering stronger confidence in the path, theory, system and culture of socialism with Chinese characteristics," the communique said.

The original Chinese version, along with the CCTV Evening News report on the Plenum and communique - (受权发布)中国共产党第十九届中央委员会第四次全体会议公报

China’s Communist Party Concludes Conclave in Strong Support of Xi - WSJ $$

Chinese President Xi Jinping emerged from a Communist Party conclave with a resolute endorsement of his leadership, despite a slowing economy, a bruising trade war with the U.S. and unrest in Hong Kong.

The party’s governing Central Committee also signaled a firmer stance on Hong Kong, calling for stronger safeguards for China’s national security in the city—a formulation that some experts say foreshadows new legal powers to squelch dissent against Beijing’s authority...

Rather than chart new policies, the goal of this year’s meeting appears to have been providing “affirmation of Xi’s brand of personalized authoritarianism and his approach to governance,” said Wu Qiang, a Beijing-based commentator on Chinese politics and a former political-science lecturer at Tsinghua University.

Question: did anyone have any evidence to support a belief that Xi would emerge from this plenum without an endorsement of his leadership?

聚焦十九届四中全会公报高频词:“制度”出现77次--独家稿件-人民网

People's Daily word map pf the 5000+ character communique. The word that appeared the most, 77 times, was "制度 system". "人民 the people" was second at 53, and "治理"governance was third at 41...by my count "党 Party" appeared 68 times, but perhaps since the Party is everywhere and leads everything you don't really count its mentions, just as you don't really count air molecules?

一文速览!十九届四中全会公报要点摘编--独家稿件-人民网

via People's Daily online, the "new era study xi studio" provides a distillation of the main points of the communique

Party meeting focuses on better economic governance - China Daily

China is likely to see breakthroughs in improving its business environment and the rule of law in economic fields to better unleash the country's growth potential and ensure high-quality development

CCTV interviews Plenum delegates - ]迈向“中国之治”新境界的重要里程碑——与会代表坚决拥护十九届四中全会《决定》_CCTV

与会代表们表示,中国特色社会主义制度是当代中国发展进步的根本保障,推进国家治理体系和治理能力现代化,体现了以习近平同志为核心的党中央高瞻远瞩的战略眼光和强烈的历史担当,对全面建成小康社会,巩固党的执政地位,确保党和国家长治久安具有重大而深远的意义。

China Says It Will Roll Out ‘National Security’ Steps for Hong Kong - The New York Times

China would “build and improve a legal system and enforcement mechanism to defend national security in the special administrative regions,[建立健全特别行政区维护国家安全的法律制度和执行机制]” the meeting summary said.

The vague language leaves plenty of guesswork about what the Chinese leaders may have in mind. Some pro-Beijing hard-liners in Hong Kong have suggested the time may have come for the Chinese authorities to impose new security legislation on the territory, which Britain returned to Chinese sovereignty in 1997.


2. US-China trade

This story seems to have moved markets but I have no idea why anyone would be surprised - Trade Talks Latest: China Doubts Deal Possible With Donald Trump - Bloomberg

In private conversations with visitors to Beijing and other interlocutors in recent weeks, Chinese officials have warned they won’t budge on the thorniest issues, according to people familiar with the matter. They remain concerned about President Donald Trump’s impulsive nature and the risk he may back out of even the limited deal both sides say they want to sign in the coming weeks...

The people familiar with China’s position said the tariffs don’t all have to be removed immediately, but they must be part of the next stage. China also wants Trump to cancel a new wave of import taxes due to take effect Dec. 15 on American consumer favorites such as smartphones and toys as part of the phase one deal, the people said.

Comment: Just read the Plenum communique for a reminder that Xi and the CCP are not going to budge on issues like SOEs

China, U.S. will continue to advance consultations: MOC - Xinhua

The two sides will continue to advance consultations as planned, and the Chinese and U.S. chief trade negotiators will hold a phone conversation again on Friday, said the spokesperson.

Trade war: China and US to hold phone talks on Friday after Apec setback | South China Morning Post

A commentary by Taoran Notes, a social media account affiliated with state-run Economic Daily, said that the phone call on Friday meant the negotiations were not affected by “external factors”, and that the suggestion a deal could be signed in Macau was “groundless speculation”.

The latest, and brief, Taoran Notes - 智利突然放弃APEC,中美磋商进展顺利按原计划推进-新

President Trump tweets that the search is underway for an alternative site for the phase one signing:

U.S.' Mnuchin says ag sales to China will 'take time to scale up' to $40-50 bln - Reuters

“This is built on a bottom-up basis of both what we think we can deliver and what they think they need,” Mnuchin said. “It’s a one-year target, but obviously it’s going to take some time to scale up.”

The Sino-U.S. Phase One Trade Deal Is an Imperfect Painkiller. What's Next?

The decided lack of details on the scope, timing and mechanics of the phase one announcement is an indication of just how preliminary the agreement is. Second, Beijing remains unwilling to make more substantive concessions on core structural issues, ranging from its preferential treatment of its state-owned enterprises to a credible commitment that it will protect the intellectual property of foreign companies. Finally, even if phase one comes to fruition, this won’t do much to reduce the uncertainty that likely will define the U.S.-China relationship for years to come, as both countries begin to openly acknowledge that they are entering a period of prolonged strategic rivalry.

In Depth: Why China Is Still Hooked on U.S. Soybeans - Caixin

Without a breakthrough in soybean production technology, it will be impossible to keep increasing domestic production, according to the Soybean Industry Going Out Strategy and Policy report released by the Ministry of Agriculture in February to encourage the industry to expand overseas in countries, including Russia.

To become self-sufficient in soybeans, China would require 115.3 million acres of land, more than five times the current acreage and more than one-third of the country’s entire available arable land, said Jiang Lianzhou, dean of the College of Food Science and Nutritional Engineering at the Northeast Agricultural University.


3. US Secretary of State Pompeo launches series of speeches on the “China Challenge”

No wonder Xi keeps warning about struggle, and why Mao's "protracted war" is still relevant. Are the US and other Western countries prepared for a protracted struggle with China? Is Pompeo's goal with these speeches to increase awareness of and intensify preparations for that struggle?

US has woken up to how ‘truly hostile’ China is towards Western values, says Secretary of State Mike Pompeo | South China Morning Post

US Secretary of State Mike Pompeo started a series of speeches on “the challenge of China” on Wednesday by saying that Beijing’s policies were hostile to Western interests...

Pompeo said he planned to give a series of addresses and remarks in the months ahead, outlining the challenge of China on topics such as the “competing ideologies and values” that drew distinctions between it and the US.

“The Chinese Communist Party is a Marxist-Leninist party focused on a struggle, and world domination. We need only to listen to the words of their leaders,” Pompeo said...

Points in his speech included Beijing’s intelligence gathering and its campaigns to shape public world opinion; China’s effect on the international order; its economy and how that distorted others, and its military strength.

Pompeo's speech - The China Challenge - United States Department of State

In the coming months, I’m going to give a series of sets of remarks. I’m going to talk about each of these in some more detail.

I’ll talk about the competing ideologies and values and the impact that has on America and the world. The Chinese Communist Party is a Marxist-Leninist Party focused on struggle and international domination. We need only listen to the words of their leaders.

I’ll discuss too how they interfere with the things we take most for granted here in the United States. The party’s intelligence agencies, the United Front Work, and its propaganda outlets have embarked on a global campaign to change public opinion in favor of Beijing. We want to preserve our freedoms – our freedom of speech and we want to make sure that information flows freely everywhere.

And I’ll discuss too the impact on the international order. Beijing is actively creating its own international space and it participates in international organizations to validate its authoritarian system and spread its reach. We in the United States, and I think the good people who are part of the Hudson Institute, want to preserve the existing free and open international order that the United States has helped create and continues to lead.

And I’ll too – talk too about the economy. China has engaged in unfair predatory economic practices and it’s utilizing state assets to build its economic footprint all around the world. We want China to be successful. We want it to have a successful economy. We want a transparent, competitive, market-driven system that is mutually beneficial for all involved...

And I’ll get a chance too to talk about how our militaries compete and the capabilities that China has built up that far exceed what they would need for self-defense.

Comment: This next part only happens with fundamentally change in the Communist Party, or its replacement by some other ruling party. US officials say they do not want to overthrow the CCP but viewed from Beijing that what US officials like Pompeo are really saying.

We don’t want a confrontation with the People’s Republic of China. In fact, we want just the opposite.

We want to see a prosperous China that is at peace with its own people and with its neighbors.

We want to see a thriving China where the Chinese business community transact business with the rest of the world on a fair set of reciprocal terms that we all know and understand.

And we want to see a liberalized China that allows the genius of its people to flourish.

And we want to see a China that respects basic human rights of its own people, as guaranteed by its own constitution.

MFA spokesman Geng Shuang did not enjoy Pompeo's speech - 外交部回应美国务卿蓬佩奥消极言论:暴露的是傲慢与恐惧--国际--人民网

蓬佩奥上述讲话恶毒攻击中国共产党和中国政府,挑拨中国共产党同中国人民的关系,蓄意歪曲诬蔑中国内外政策,充分暴露了美国一小撮政客根深蒂固的政治偏见及其阴暗的反共心理。这种言论体现的不是自信和力量,暴露的是傲慢与恐惧。

In his remarks, Pompeo viciously attacked the Communist Party of China and the Chinese government, played the Communist Party of China against the Chinese people, deliberately distorted and stigmatized China's domestic and foreign policies, and fully exposed the deep-rooted political prejudice and dark anti-communist mentality of a small group of US politicians. This kind of speech shows not confidence and strength, but arrogance and fear.

US Assistant Secretary of Sate for East Asia David Stilwell Remarks at Institute of Strategic and International Studies (ISIS) Malaysia - United States Department of State

I’d like to make special note here of the central role of governance in our vision of a free and open Indo-Pacific. At the national level, “free” certainly means good governance and the assurance that citizens can enjoy their fundamental rights and liberties...

Nations that respect religious freedom, and respect their peoples’ right to the free expression of religion, tend also to respect their neighbors and the international rules we all cherish. Nations that suppress religious freedom, and repress their peoples’ right to the free expression of religion, tend also to disrespect their neighbors’ interests and challenge the free and open international norms we all cherish...

US grounding of Chinese drones shows decoupling intention: analyst - Global Times

China urged the US to stop cracking down on Chinese firms and ditch its cold-war mindset after the US Department of Interior (DOI) reportedly grounded Chinese-made drones by citing national security reasons.

Geng Shuang, a spokesperson for the Chinese Foreign Ministry, said at a regular briefing on Thursday that it hoped that the US could stop citing the general concept of national security and rendering the "China threat theory", while providing a just, fair and non-discriminatory environment for Chinese firms that have business operations in the US.

China should retaliate against US politicians behind Xinjiang ‘human rights abuse’ bill: analysts - Global Times

Anti-China forces in the US have been active in recent years, especially politicians and members of the US Congress who have close interactions with separatists from Taiwan and Xinjiang, Zha Xiaogang, a research fellow at the Shanghai Institute for International Studies, told the Global Times.

US decoupling benefits none, expert says - China Daily

The US is seen as having "attacked China in areas such as trade, science and technology and people-to-people exchanges", but both countries need to understand that their development complements and reinforces the other, said Zeng Peiyan, chairman of the China Center for International Economic Exchanges.

The center is hosting the two-day symposium jointly with the National University of Singapore's Lee Kuan Yew School of Public Policy and the Brookings Institution of the US.

Inside the Newsroom Podcast #54 — Bill Bishop (Sinocism)

we discuss why tensions between the U.S. and China are so bad right now, how bad they are in a historical context, and we also discussed what might or might not happen in the latest debacle between the two countries involving the NBA.


4. Hong Kong

Hong Kong court order bans posting and spreading of online messages inciting violence as anti-government protests continue | South China Morning Post

Mr Justice Russell Coleman of the High Court issued the order to restrain members of the public from “wilfully disseminating, circulating, publishing or republishing” any material on platforms online such as popular Reddit-like forum LIHKG and messaging app Telegram that “promotes, encourages or incites the use or threat of violence”.

The court order, in response to an application filed by the secretary for justice, bans such acts that would cause “bodily injury to any person unlawfully” as well as “damage to any property unlawfully”.

Hong Kong Protests Force City Into Recession With ‘No Recovery in Sight’ - WSJ $$

Hong Kong’s economy shrank 3.2% in the July-to-September quarter from the period just before, according to data released Thursday. That is the worst quarter-to-quarter drop since 2009. On a year-over-year basis, the economy shrank 2.9%.

If anything, the figures undersell the speed and severity of the downturn for shopkeepers, restaurant owners and others with consumer-facing businesses.

Comment: A slowdown in Hong Kong does not hurt the Party center in Beijing, and I am guessing they believe increasing pain as one of the contradictions in Hong Kong that as it worsens will cause support for the protestors to wane

Hong Kong police arrest over 70 in Tuen Mun protest against tear gas smell | Hong Kong Free Press HKFP

At the lobby of Yat Sang House in Siu Hin Court, police ordered residents to kneel down with their hands in the air or behind their backs...

Some residents shouted, “Corrupt cops, may your whole family die!”...

At around midnight, protesters hurled petrol bombs at the police base, prompting the police to fire three bean bag rounds from inside the facility, which narrowly missed nearby reporters.

Hong Kong protesters turn to traditional Chinese medicine - Los Angeles Times

The two doctors treat patients as part of a new underground network of traditional Chinese medicine practitioners in Hong Kong willing to render aid to injured protesters too afraid to go to hospitals because they may be arrested. Organized via Telegram, an encrypted messaging app popular with the protesters, the network has more than 50 doctors across all 18 districts of Hong Kong who have treated hundreds of protesters.

Halloween is the latest victim of Hong Kong’s crackdown on masked protesters - The Washington Post

When more marchers arrived to join the crowds in Lan Kwai Fong, police held them back, cordoning off most of the major streets in the party district. Onlookers and tourists drank beer in the streets as they took in the scene, while traffic was gridlocked behind them. Some stopped to snap selfies in front of police. At one point, police arrested a woman in black angel wings and a red dress who screamed for an ambulance...

In anticipation of demonstrations, police closed a number of roads surrounding the area and shuttered three subway stops early. Hong Kong’s subway network, run by the MTR Corp., has for weeks enforced the early closure of all stops, citing extensive repair works after protester vandalism. The effect has been a de facto curfew in Hong Kong, most intensely felt right after a wave of spontaneous and violent protests in early October, kicked off by the government’s decision to implement the mask ban.

Hong Kong unmasked: how the protests hit home in one neighborhood - Reuters

The struggles of the people who live in the concrete towers of a Kowloon working-class district are woven into the soul of the city. As protests pit neighbor against neighbor, residents face a test of what locals call “the Lion Rock spirit” – a sense of unity and grit in the face of hardship...

Wong Tai Sin had long tended to vote for pro-Beijing candidates in local elections given its older populace and deep-rooted ties to patriotic Chinese political groups in the area. In Hong Kong, such China and government supporters are described as being in the “blue” camp. Yet the recent unrest has seen lots of residents turn against the police given the perceived excessive violence. They’ve shifted to the “yellow” camp of the protesters and democracy advocates, including those who supported the Occupy movement, which spearheaded pro-democracy protests in 2014.


5. Did America try to recruit Song Xinning?

Chinese professor accused of spying by Belgium, barred from entering Schengen Area | South China Morning Post

Song Xinning, former director of the [Confucius] institute at the Vrije Universiteit Brussel (VUB), said he had been accused by authorities in Belgium of supporting Chinese intelligence activities in the city – an accusation he denied...

The Belgian newspaper De Morgen reported on Tuesday that VUB had ignored a warning from the State Security Service about the institute’s activities. The article said also that Song had acted as a recruiter for Chinese intelligence services and hired informants from the Chinese student and business communities in Belgium...

He said he suspected the decision to impose the ban had been influenced by the United States, claiming it was made after he had rejected an offer by an American diplomat to “cooperate with American intelligence units”...

“I was warned at the meeting [with the American diplomat] that if I did not cooperate, there would be serious consequences,” he said. “So obviously this is the result. I was prepared.”

China denies reports of professor spying in Belgium - AP

Chinese foreign ministry spokesman Geng Shuang said some Western media have published “false reports of distortions about the Confucius Institute.”

“This is completely untrue and has ulterior motives. We resolutely oppose this behavior that hinders normal exchanges and educational cooperation projects,” Geng told reporters at a daily briefing.

Chinese academic suspected of espionage banned from Belgium - Reuters

Belgian media reported last year that VUB, a Dutch-speaking research university based in Brussels, had been warned by Belgium’s intelligence agency about the risk of espionage being conducted from Confucius Institute. The agency declined to comment on any issue related to Song...

Its press officer, Sicco Wittermans, also said the university is now working closely with Belgium’s intelligence agency on matters related to the Confucius Institute.

“For instance, for the appointment of the new director, we consulted the state security department,” Wittermans said, adding that the contract with the institute expires next year and “the eventual continuation of the collaboration will be critically looked at.”


6. 5G launches in China

China launches 5G service, showing that the U.S. won't hold it back - The Washington Post

“The commercialization of 5G technology is a great measure of [President] Xi Jinping's strategic aim of turning China into a cyber power, as well as an important milestone in China’s information communication industry development,” said Wang Xiaochu, president of China Unicom...

China is forecast to spend between $130 billion and $217 billion on 5G between 2020 and 2025, according to a study by the state-run China Academy of Information and Communications Technology.

China Launches 5G with Monthly Plans as Low as $18 - Caixin

China Mobile, the country’s largest carrier, said it will provide 5G services in more than 50 major cities across the country, and will expand to prefecture-level cities next year.

China had initially planned to launch 5G services in 2020, but decided to accelerate that time line as other countries scramble to launch service earlier. South Korea started 5G commercial operations in April, and some areas of the U.S. have also introduced the service.

China debuting 5G service 2 months ahead of schedule · TechNode

During a launch ceremony at the PT Expo China in Beijing on Thursday morning, Chen Zhaoxiong, the country’s vice-minister of industry and information technology, announced the official rollout of China’s 5G service.

The ceremony was also attended by executives from China’s three major carriers: China Mobile, China Unicom, and China Telecom.;

China will establish 130,000 5G base stations by the end of the year to provide full coverage in major cities such as Beijing and Shanghai, Chen said at the event;

The three carriers revealed their 5G data packages after the launch event with China Mobile providing the cheapest monthly plan, offering 30 gigabytes of 5G data priced at RMB 128 (around $18.2) per month.

US lags behind 5G race because of mind-set - Global Times

Such narrow-minded zero sum thinking conflicts with the inherent open nature of 5G technology. As a result, China is leading in 5G development. If the US always opts for dirty tricks against China instead of how to conduct healthy competition with China and develop its own 5G based on the technological achievements China has made, this will lead to nothing but a larger gap between China and the US.


7. Shanghai shuts online P2P lending

China’s P2P Hub Said to Order Online Lenders to Exit Business - Bloomberg

Some of the nation’s biggest platforms including Ping An-backed Lufax and Dianrong.com have been told in recent meetings with Shanghai’s financial services bureau to stop issuing new products and to wind down existing peer-to-peer lending services, the people said, asking not to be identified as the matter is private.

The development indicates China’s determination to overhaul an industry that had more than $150 billion of loans outstanding and upwards of 50 million investors at its peak, but was plagued by fraud and defaults

This was in yesterday's newsletter, either they were in the dark or were lying:

虚惊一场!湖南、山东之后,上海也要全面清退P2P?协会紧急澄清_证券时报网

The Shanghai Internet Finance Industry Association officially denies rumors that Shanghai is going to follow Hunan, Shandong and other provinces and officially ban P2P platforms

In Depth: China’s Big Data Clampdown Leaves Online Lenders in a Bind - Caixin

Authorities have come down much harder on the industry this time around. Since early September, multiple big data and data-scraping companies, as well as online lenders, in Beijing, Shanghai, Shenzhen and Hangzhou have come under investigation, with even company executives and founders getting caught up in probes, the sources said. That’s different from in the past, in which investigators mostly just questioned lower-level employees.

The intensifying crackdown is significant because of the role that these big data companies have played in gathering borrowers’ personal information — some of which has been obtained illegally — that has at times been used by debt collectors that employ shady practices.


8. PRC overseas surveillance efforts

Is there any reason we should expect the PRC to have lesser ambitions than the US NSA when it comes to global surveillance efforts?

A Chinese hacking group breached a telecom to monitor targets' texts, phone metadata - Cyberscoop

Chinese hackers primarily have been scanning for military or intelligence keywords, tracking how subjects are reacting to protests, such as those in Hong Kong, and analyzing victims’ opinions of world leaders, Steve Stone, advanced practices director at FireEye, told CyberScoop...

“APT41 is able to do very specific targeting at scale,” said Stone, who previously served as a senior analyst in the Department of Defense. “They’re able to say ‘let’s take potentially thousands of numbers, and look for those and see when those numbers start having these specific kind of keyword conversations and then pull that out.”

FireEye declined to identify the surveillance targets. Stone said only that the hacked telecom was located in a country that is a “strategic competitor” to China.

MESSAGETAP: Who’s Reading Your Text Messages? | FireEye Inc

FireEye Mandiant recently discovered a new malware family used by APT41 (a Chinese APT group) that is designed to monitor and save SMS traffic from specific phone numbers, IMSI numbers and keywords for subsequent theft. Named MESSAGETAP, the tool was deployed by APT41 in a telecommunications network provider in support of Chinese espionage efforts...

Similarly, the keyword list contained items of geopolitical interest for Chinese intelligence collection. Sanitized examples include the names of political leaders, military and intelligence organizations and political movements at odds with the Chinese government. If any SMS messages contained these keywords, MESSAGETAP would save the SMS message to a CSV file for later theft by the threat actor.

In addition to MESSAGETAP SMS theft, FireEye Mandiant also identified the threat actor interacting with call detail record (CDR) databases to query, save and steal records during this same intrusion. The CDR records corresponded to foreign high-ranking individuals of interest to the Chinese intelligence services.


Business, Economy and Trade

Bond Traders Wait Again And Again For China to Inject More Cash - Bloomberg The central bank said in April it would add cash to the financial system with a targeted monetary tool at the beginning of each quarter. It followed through with that in April and July, priming bond traders to expect the same this month. But it’s the last day of October, and markets are still waiting.

Swine fever pushes Chinese pig farmers to record quarterly profits - Reuters The huge profits underline how the fatal pig disease, which has killed millions of hogs across Asia and left many small farmers bankrupt, has proved a major opportunity for the leading producers in the world’s largest but highly fragmented hog sector. // Question: when will Beijing forces these producers to return some of these profits in the form of price cuts?

Price cuts, iPhone 11 timing drive Apple's uncertain China rebound: analysts - Reuters Apple said sales in greater China fell 2.4% in its fourth quarter ended Sept. 30, a far cry from the 27% drop it saw in the first quarter this year - a fact that Chief Executive Tim Cook played up on the company’s post-earnings call on Wednesday.

Faraday Future’s still haunted by the past of its billionaire founder - The Verge FaradayFaraday Future, once the most hyped electric vehicle startup following in Tesla’s wake, is now known for its money troubles, if it is known at all. Flashy hires — from SpaceX, Tesla, Apple, and Ford — have mostly moved on. The $2 billion it has spent to develop a luxury SUV hasn’t paid off; the vehicle is still not in production. This is all thanks to the company’s founder, a man who ran from China in 2017 to escape billions of dollars of debt, only to declare bankruptcy in the US this month: former Faraday Future CEO Jia Yueting.

Explaining Blockchain to Xi Jinping Brings $1.7 Billion Windfall - Bloomberg Xinhu Zhongbao Co. holds nearly half of a firm whose chairman briefed Xi and other top officials about the technology last week. The property developer has risen the 10% daily limit four straight days after ending last week near 2019’s multi-year low. This week’s jump, which has added $1.7 billion to Xinhu’s market value, has shares again up 46% for the year and near 2019’s high. Volume on Thursday was nearly triple the daily average of the past three months.

Half China’s investment in Kazakhstan is in oil and gas | China Dialogue The Kazakhstan government has finally published a list of the 55 projects its neighbour China has invested in. About half of the investment total of US$27.6 billion is in oil and gas projects. An itemised list of the projects and their cost has been made available in Kazakh and Russian. Only a summary is available in English.

Last-Minute India Demands Jeopardize 16-Nation Asian Trade Pact - Bloomberg Chief negotiators are still confident they can reach a broad agreement on the deal to reduce tariffs, known as the Regional Comprehensive Economic Partnership (RCEP), during a planned meeting on Thursday in Bangkok, the people said.

Chinese Central Bank Intervenes to Stem Bank Run in Henan Province - China Banking News The Peo­ple’s Bank of China (PBOC) and the China Bank­ing and In­sur­ance Reg­u­la­tory Com­mis­sion (CBIRC) said that they would adopt “force­ful” mea­sures to main­tain the or­der of the fi­nan­cial sys­tem, af­ter Yichuan Rural Com­mer­cial Bank was hit with spike in re­quests for the with­drawal of sav­ings de­posits on Tues­day.

Chinese Bank Run Extends to Third Day - WSJ $$ Local cadres, business leaders and banking executives rallied Thursday at the main branch of Henan Yichuan Rural Commercial Bank, just outside the central Chinese city of Luoyang. One by one, they stood before a microphone to pledge their backing for the bank, as smiling employees brandished wads of cash before television cameras.

China must relax residency curbs, land rights to offset effect of trade war, former finance minister says | South China Morning Post In an article published on Tuesday, Lou Jiwei, who led China’s Ministry of Finance between 2013 and 2016, urged the central government to undertake rapid reform of the two systems in the face of rising populism and anti-globalisation.

AIIB headquarters to open in Beijing in early 2020 - Xinhua The headquarters is located in Beijing Olympic Park in Chaoyang District, eastern Beijing, and the AIIB and some policy banks will be the first batch of organizations moving into the newly-built building. Five buildings, including the AIIB headquarters, are set to open in the park early next year, covering a total rental area of more than 500,000 square meters, which will house international organizations and enterprises in the fields of high-end services, fintech and culture and sports.

China manufacturers divert cash into financial products | Financial Times $$ Manufacturers listed in mainland China increased their investments in financial products by nearly one-third in the first 10 months of this year compared with full-year 2018 to Rmb2.5tn ($353bn), according to East Money Information, a financial data provider.

China’s surveillance industry plays down US blacklist at annual expo designed to showcase its technology | South China Morning Post The expo, which alternates each year between Shenzhen and Beijing, this year attracted a record number of buyers from over 150 countries and regions despite the cloud over the business from the imposition of sanctions that prevent the companies from buying American technology without approval.

China Tax Cuts Bring Big Savings - Caixin The Chinese government’s pledge in March to slash taxes and fees by 2 trillion yuan this year has already led to savings of more than 1.5 trillion yuan ($213 billion) for companies and individuals, the country’s tax administration said on Wednesday.

China Envisions ‘Shared Factories’ in Achieving ‘Made in China 2025’ - Caixin Global “Shared manufacturing,” where the sharing economy model is applied to assembly lines, would aggregate and make use of idle capacity, optimize resource allocation, raise production efficiency, and is necessary in energizing and bringing flexibility to the sector, according to a Tuesday directive from China’s Ministry of Industry and Information Technology (MIIT).

Politics and Law

高素质高颜值的厦门答卷——写在习近平总书记考察福建5周年之际_新闻中心_厦门网 Xiammen Net runs a piece celebrating the 5th anniversary of Xi's inspection tour in Fujian, refers to the talk Xi gave to the Fujian delegation at the March 2019 NPC meeting as "in all aspects manifesting the acute foresight of the people's leader and the feelings toward the people of the Great Leader". -参加十三届全国人大二次会议福建代表团审议时的重要讲话、对福建对厦门工作的一系列重要指示批示,处处彰显了人民领袖的高瞻远瞩、处处体现了伟大领袖的人民情怀。- Xi served in Fujian for over 17 years, the provincial Party Secretary is Yu Weiguo, who is very tight with Xi. Earlier this week we had the Tianjin Party Secretary Li Hongzhong use "people's leader". There was nothing about people's leader in the plenum communique, but its continued, sporadic usage is interesting, as I have discussed on several occasions.

Beijing to use facial recognition technology in metro security checks - state media | AFP Beijing will use facial recognition tools to speed up security checks in the city’s overcrowded metro, using a ‘credit system’ to sort passengers into different channels, state-run media reported on Wednesday. Long queues and commuters arguing with staff over slow security procedures are common sites during rush hour in the metro system of the 20 million-strong metropolis.

Clarified rules on handling online information crime to take effect - Xinhua ISPs refusing to fulfill their duty concerning information network security may face jail if they cause leaks of over 500 pieces of users' communication content, location, credit or property information in China, according to a judicial interpretation by the Supreme People's Court and the Supreme People's Procuratorate.

Foreign and Defense Affairs

Kiwi academic Anne-Marie Brady hits back at Chinese Ambassador's claims | Newshub Prof Brady at the time said the break-ins were "intended to intimidate" her, after she published a 2017 paper laying out what she called the Chinese Communist Party's plans for attaining worldwide influence. On Thursday, Chinese Ambassador to New Zealand Wu Xi dismissed Prof Brady's claims in a rare TV interview on The AM Show.

Israel panel to monitor Chinese investments following U.S. pressure - Haaretz.com Although the proposal is framed as 'supervision over foreign investment,' the real goal is create a mechanism for screening investments by Chinese companies and investment funds in strategic Israeli assets

Podcast: How Is Russia's Pivot to Asia Working Out? - Carnegie Moscow Center - Carnegie Endowment for International Peace Alex Gabuev and Vita Spivak discuss Russia-China relations in this inaugural episode of the Carnegie Moscow Center English-language podcast

Vancouver school cancels assignment after backlash over Chinese propaganda - The Globe and Mail A teacher at a Vancouver-area high school has cancelled an assignment asking students to discuss trailers for a film dedicated to the founding of the People’s Republic of China after complaints that the movie was “pro-China propaganda.” In several Mandarin classes at Steveston-London Secondary School in Richmond, B.C., a teacher showed Grade 10 to 12 students trailers for My People, My Country, a film celebrating the 70th anniversary of the PRC.

Canadian veterans of People’s Liberation Army form association, sing of China’s martial glory | National Post The recital earlier this month at the Centre for the Performing Arts in Richmond Hill, Ont., was not offered by a visiting martial choir from Beijing. It was the work of a surprising new Canadian association, dedicated to retired troops of the China’s People’s Liberation Army or PLA — China’s armed forces — who are now settled in this country.

Karoline Kan Wins 2019 Young China Watcher of the Year Award | YCW She is being recognized for her contributions to telling her story—and the story of Chinese millennials—to an international audience. Karoline is the Beijing editor at China Dialogue and author of Under Red Skies: Three Generations of Life, Loss, and Hope in China—an account of Karoline’s family that covers three generations.

Mongolia arrests 800 Chinese citizens in cybercrime probe - Reuters The arrests took place after police raided four locations on Tuesday, and followed two months of investigations, Gerel Dorjpalam, the head of the General Intelligence Agency of Mongolia, said at a media briefing on Wednesday. He did not go into specific details of the offences but said they involved illegal gambling, fraud, computer hacking, identity theft and money laundering.

India, China clash over Kashmir as it loses special status and is divided - Reuters India engaged in a diplomatic war of words with China over Kashmir on Thursday as it formally revoked the disputed state’s constitutional autonomy and split it into two federal territories in a bid to integrate it fully into India. // 印度将中国领土划入所谓"直辖区" 外交部回应:无效

Premier to visit Uzbekistan, Thailand - China Daily Premier Li Keqiang will travel to Uzbekistan and Thailand to attend a number of multilateral meetings and pay officials visits next week, Foreign Ministry spokeswoman Hua Chunying said on Friday. The five-day trip will start November 1

Wang Qishan helds talks with South African Vice President Mabuza and co-chaired the seventh plenary meeting of the China-South African Bilateral National Committee Wang Qishan and Mabuza listened to the reports of the six sub-committees of the China-South African Bilateral National Committee on diplomacy, economy and trade, science and technology, energy, education, and minerals. The two sides reviewed the progress made since the last meeting, fully exchanged views and reached extensive consensus on the full implementation of the outcomes of the meeting between the heads of state of the two countries and the FOCAC Beijing Summit, as well as promoting the practical cooperation. The two sides agreed in principle to formally establish a marine economic sub-committee as soon as possible and to promote relevant cooperation.

Macron Goes to China: For Europe or for France? - Carnegie Europe - Carnegie Endowment for International Peace Off goes French President Emmanuel Macron to Beijing on November 4, just two months after Angela Merkel made her twelfth visit to the country since becoming German chancellor back in 2005. There had been hopes about a future joint visit by the French and German leaders. That would have sent a strong signal to Beijing about the common stance of the EU’s biggest economies toward China. Such hopes have come to naught.

Taiwan

Han Kuo-yu (韓國瑜) compares Taiwan-China ties to 'bastard and daddy relationship' | Taiwan News "Cross-strait relations are like a bastard and daddy relationship. Is this impressive enough? Very impressive, this sentence. What is a bastard? I curse you as a bastard. What's called a daddy. Daddy gives anything [you] want. Isn't this easy to say? But what good is it for you? What good is it for 23 million people?"

Taiwan invites US to help gauge its military strength as analysts warn of growing threat from mainland China | South China Morning Post It is the first time the self-ruled island has publicly invited America to help assess its combat potential and was announced as defence analysts warned that rapid military reforms undertaken by the People’s Liberation Army in recent years posed a growing challenge to the Taiwanese military.

Tech and Media

Chinese netizens are protesting Notepad++ over its support for Uighurs - The NextWeb Text editors are typically apolitical affairs. Developers use them to write code, and that’s about it. But yesterday, the makers of the popular open-source text editor Notepad++ released an update with the codename: “Free Uighur.” This fateful decision has incensed many Chinese netizens

Nintendo moves closer to China Switch launch after nod for first game sale - Reuters The State Administration of Press, Publication, Radio, Film and Television announced on its website on Tuesday approval for the Japanese gaming firm’s hit “New Super Mario Bros. U Deluxe” title to be sold in China.

Education

Student burden-easing scheme gets mixed feedback - Global Times A father in Nanjing with a sixth grader said that the city has implemented a new round of burden alleviation measures. "Homework is reduced," he said. "I want my child to be healthy and relaxed with less study tasks, but the reality is we must do more exercises to surpass others and enter great schools. You lessen the burden but others are still striving."