G20; Reports of a trade truce; AMD's back door for China; More support for SMEs

The focus of just about all the coverage so far of the G20 in Osaka is the meeting between President Trump and General Secretary Xi Jinping, scheduled for 11:30 AM Saturday. Trump has a 1:05PM meeting with Turkish President Erdogan, so unless the schedule shifts, or there is an unannounced second session, it looks like Trump and Xi will only have about 90 minutes, maybe enough time for a “truce” but unlikely enough time for any substantive breakthroughs.

There are media reports that the two sides have agreed to a new round of talks while putting a delay on Trump’s threat to add tariffs to the remaining $300B+ in imports from China. As I said Monday that is the probably the best case outcome from this weekend.

Meanwhile, there are few signs from CCP propaganda organs that any concessions will be forthcoming from Xi.

The “staying true to our founding mission” campaign is in full swing. Xi chaired a Politburo study session on the campaign, a new web site was launched for it, so expect cadres to be even busier over the next few months in political study.

We are just over three months from the big October 1 National Day holiday, which this year marks the 70th anniversary of the founding of the PRC. The censors seemed even more stressed than usual, and the summer may be especially stifling.

The approaching 70th anniversary may be one reason those stressed-out censors have indefinitely delayed the releases of the highly anticipated films “The Eight Hundred” and “Better Days”. Fortunately filmgoers will be able to satisfy their patriotic longings with the upcoming August 1 (Army Day) release of "Bugle From Gutian", an “epic film in commemoration of the 90th anniversary of the Gutian Meeting.”

The next sensitive PRC anniversary is just a week away. July 5th is the 10th anniversary of the 2009 Ürümqi riots, a horrible bloodletting that led to the blocking of Twitter and Facebook soon after and then of course so many of the crackdown efforts in Xinjiang since, including the re-education camp archipelago.

Thanks for reading.


The Essential Eight

1. US-China

Trade war: US and China agree to tentative truce before G20 summit | South China Morning Post

Details of the agreement are being laid out in press releases in advance of the meeting between Chinese President Xi Jinping and US President Donald Trump at the Group of 20 summit in Osaka, Japan, this weekend, according to three sources – one in Beijing and two in Washington...

The Trump administration has threatened to slap duties of up to 25 per cent on the remaining untaxed Chinese goods if this weekend’s talks go poorly.

One source with knowledge of the planning said Trump’s decision to delay additional tariffs was Xi’s price for holding the meeting in Osaka.

Lingling Wei and Bob Davis take a break from their book project on US-China trade to break this news - China to Insist U.S. Lift Huawei Ban as Part of Trade Truce - WSJ $$

Among the preconditions, said Chinese officials with knowledge of the plan, Beijing is insisting that the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies Co. Beijing also wants the U.S. to lift all punitive tariffs and drop efforts to get China to buy even more U.S. exports than Beijing said it would when the two leaders last met in December...

Despite his preconditions, Mr. Xi isn’t expected to take a confrontational tone with Mr. Trump, according to the Chinese officials. Rather, they say, he will sketch out what he envisions as an optimal bilateral relationship, which includes China’s help on security issues vexing to the U.S., especially Iran and North Korea...

Comment: The following paragraph is interesting given how many people are saying that Xi is under pressure because he has mismanaged the relationship with the US because he has been too hawkish. I do believe that Xi very much wants a deal with the US, but what if he also sees significant political upside in the sharp Anti-American swing over the last six weeks?

The Chinese leader isn’t expected to make big concessions at his meeting with Mr. Trump. That is because he is facing increased political pressure on the home front to stand firm against Washington, which is seen among elite Chinese political circles as unfairly accusing China of a range of misdeeds, from violating intellectual-property protection, improperly subsidizing state-owned enterprises and spying on U.S. firms.

Trump on China trade talks: I will impose ‘very substantial’ additional tariffs if no deal is reached | Fox Business

Although it’s “possible” to reach a good deal, Trump said his “plan B” may include a 10 percent tariff on the remaining "$600 billion" worth of goods.

"So we have much more than $300 billion worth of products," he said. "Now what’s going to happen ... all of those companies will move out of China – most of them—and they’ll move to other places like Vietnam and other places that take advantage of us, and we’ll start working on that too ... I don't want to do too many at one time.

U.S. Versus China: A New Era of Great Power Competition, but Without Boundaries - The New York Times

Wang Wen, executive dean of the Chongyang Institute for Financial Studies at the Renmin University of China, said in an interview that the new model for United States-China relations was “fight but not break.”..

For their part, Chinese officials have seized on the Trump administration’s actions to argue that the United States is trying to stop China’s rise. On Tuesday, People’s Daily, the official Communist Party newspaper, ran a commentary urging citizens to fight for the nation’s dignity.

“The Chinese people deeply understand that the American government’s suppression and containment of China is an external challenge that China must bear in its development and growth,” the paper said, “and it is a hurdle that we must overcome in the great rejuvenation of the Chinese nation.”

Can Trump and Xi find a landing zone in Osaka? - Nikkei Asian Review - Wendy Cutler

It might seem the U.S. and China cannot do a deal unless one side caves. That's not so.

Meanwhile, in CCP propaganda:

Trade talks will fail if US keeps attacking China, state media says | South China Morning Post

A commentary by Taoran Notes, a social media account affiliated with official newspaper Economic Daily, said late on Tuesday that the US side had changed its attitude to be more conducive to solving the trade conflict. But it also warned that talks “would not make substantive progress” if the United States continued to take action to pressure China.

“There are some in the US that have still not clearly recognised China’s determination, and continue to harbour illusions that they can pressure China into submission,” the commentary said.

“If the US does not change its thinking and its actions, then China and the US can only continue to ‘exchange views and maintain communication’ on trade and economic issues, without further substantive progress.”

The Taoran Notes piece - 不认清中国的决心 美方只会产生更多误判 - 陶然笔记

人民日报署名文章:劈波斩浪驶向光明未来——如何看待经贸摩擦对中国经济的影响-新华网

Long page 1 People's Daily article Thursday on how to understand the impact of the US-China trade frictions on China's economy. Short answer: there will be challenges but China can handle it

人民日报人民论坛:自尊自信才能走好自己的路--观点--人民网

People’s Daily continued to lecture Chinese who “worship the US” and who urged China to make compromise in the trade war. The commentary, part of a series this month, criticized those who are always on the US side to justify US behaviors, and said this “worship US syndrome” is a throwback to China’s history of humiliation.

敢于斗争才能赢得尊严(人民论坛)

People's Daily commentary on Tuesday lambasted those who urged China to “hide and bide”, saying these people either have ulterior motives or are extremely naïve. The article said backing off from the bullying United States would only invite more aggression, and therefore Chinese people will not make any compromises.

人民日报集中批驳这三种奇谈怪论,中国人要有中国人的志气_自贸区连线_澎湃新闻-The Paper

Thepaper on the series of People's Daily articles criticizing those who "fear America, worship America" 澎湃新闻注意到,这是自6月初,人民日报陆续刊发《爱国情感绝非民粹主义》《摒弃“恐美崇美”心态》两篇文章后,一次集中地对“恐美崇美”心态的批驳。

Some of the other articles in this series:

6/22: 人民网评:中国人怎么爱国还需要别人来教吗?

6/21: 人民网评:斗争的结果会是“中必输”吗?

6/20: 人民网评:卢比奥先生,你在刷新无耻的境界

6/20: 人民网评:中国扛不住美国的“三板斧”吗?

6/19: 人民网评:中国能吞下“如果”带来的苦果吗?

6/18: 人民网评:中国“委曲”就能“求全”吗?

6/17: 人民网评:真是中国高调惹的祸吗

不吐不快┃面对中美经贸摩擦不能患“软骨病”-新华网

Xinhua also lashed out and said those Chinese who said China should compromise have no backbone

China slams US ‘Plan B’ ahead of bilateral summit - Global Times

In China, where anti-US sentiment and patriotism are running high, officials have mounted a fierce response to what many in China believe to be an ill-intended attempt by the US to contain China's economic and technological rise. Whole-of-society efforts are underway to prepare for a protracted trade war with the US.

Only mutual trust, mutual benefit lead to win-win results - People's Daily Zhong Sheng

Some US politicians just have a heart for disrupting and damaging the rules of international cooperation, and it seems that they don’t care about losing their international credibility or destroying the bedrock for trust and cooperation of the international society.

They worship the power to exert extreme pressure, and are even longing for profits from the constantly escalated conflict.

At present, the world is undergoing profound development of multi-polarization and economic globalization. With closer interdependence and interrelation among global countries, peace, development, cooperation and win-win results are the trend of time and true aspiration of the people.

As US-China relations tumble, Beijing unleashes fury at one target: Mike Pompeo - The Washington Post

China this week singled out Pompeo in a remarkable, extended segment during the state broadcaster’s evening newscast. The top American diplomat, whom state media recently likened to a gangster, didn’t merit a human comparison Wednesday night.

“The world needs to be vigilant against the erosion to human peace caused by Pompeo, which is like that of a worm,” an anchor told hundreds of millions of Chinese viewers. “The entire diplomatic world ought to despise and suppress his conduct.”


2. Xi at the G20

Underlining improved Japan-China ties, Abe and Xi meet ahead of G20 summit | The Japan Times

One day before the start of the G20 Osaka summit, visiting Chinese President Xi Jinping and Prime Minister Shinzo Abe held a bilateral meeting in the city Thursday to underline the recent improvement in Japan-China ties and prepare for Xi’s planned visit to Japan as a state guest next year.

At the outset of the meeting, Abe asked Xi to visit Japan, to which Xi immediately responded, saying “it’s a good idea.”..

In addition, each of the two leaders separately said their countries should champion “free trade,” remarks that could be interpreted as veiled criticism of the United States.

Chinese President Xi Jinping calls for US and North Korean leaders to hold third nuclear summit | South China Morning Post

In talks with South Korean President Moon Jae-in in Osaka, Japan, ahead of the Group of 20 summit, Xi said North Korean leader Kim Jong-un’s determination to denuclearise remained solid, and Beijing was still committed to political engagement over the future of the peninsula.

Chinese president arrives in Japan for G20 summit - Xinhua

On the sidelines, the president is scheduled to attend a leaders' meeting of the emerging-market group of BRICS, which also includes Brazil, Russia, India and South Africa.

He will also take part in a China-Russia-India leaders' meeting and a China-Africa leaders' meeting, and hold a series of bilateral meetings.


3. More efforts to spur growth

China to deepen market-oriented interest rate reform, lower interest rate for smaller firms' financing - Xinhua

China will further cut the real interest rate on loans to micro and small enterprises, pilot reform measures regarding financial services for private, micro and small firms, support more intellectual property pledge financing and credit supply for the manufacturing sector, and promote innovation and the development of the real economy, the State Council's meeting chaired by Premier Li Keqiang decided Wednesday...

To support innovation-driven development, intensify the protection and use of intellectual property rights, and promote employment, the meeting also called for expanding the use of intellectual property pledge financing to widen financing channels for private, micro, small, start-up and innovation businesses and ease their financing difficulties.

Banks will be guided to formulate separate lending plans and evaluation mechanisms for intellectual property pledge loans. The non-performing loan (NPL) ratio of such lending that is no more than 3 percentage points above the overall NPL ratio will not be considered a minus factor in government oversight or performance evaluation.

China to further cut financing interest rates for small, micro firms - Xinhua

Financial institutions should issue more bonds this year than 2018, striving to top 180 billion yuan (26.18 billion U.S. dollars) in 2019.

Some cities will be encouraged to conduct a three-year-long reform pilot in improving financial services for private, small and micro firms, according to the statement...

In a bid to nurture more professionals, the State Council decided to expand the coverage of national scholarships and grants for vocational college students, raise the financial assistance level, and set up a national scholarship for secondary vocational education.

Policy Steering Credit to Small Businesses Is Costing Small Banks Their Clients - Caixin 

In an attempt to meet government targets for lending to small enterprises, some big banks in some regions have poached high-quality clients from small and midsize local lenders by offering them lower interest rates, the law-enforcement inspection team of the Standing Committee of the National People’s Congress (NPC), China’s top legislature, said Wednesday in a report... 

In addition, some lenders have resorted to adjusting how they determine what constitutes a “small business,” a change that is likely to inflate related statistics, the report said.

China's funding for small firms still not improved: auditor - Reuters 

The country’s cabinet, the State Council, unveiled new measures on Wednesday to cut financing costs for smaller firms.

However, Hu Zejun, head of China’s National Audit Office, said in an annual budget review submitted to the National People’s Congress and published late on Wednesday that the push has yet to have a substantial impact.

“Due to risk prevention, there are still some problems for bank financing, such as a relative high threshold (to obtain loans), lengthy procedures, and a long waiting period,” he said.

Chinese vice premier stresses full implementation of tax, fee cuts - Xinhua

Chinese Vice Premier Han Zheng called for the solid implementation of measures to cut taxes and fees and making every effort to ensure market entities enjoy policy dividends.

Han...made the remarks Tuesday at a symposium in Beijing...

In 2018, China reduced the tax and fee burden on enterprises and individuals by around 1.3 trillion yuan (about 189 billion U.S. dollars). The country will reduce the tax burden on and social insurance contributions of enterprises by nearly 2 trillion yuan this year.


4. AMD’s back door for China

U.S. Tried to Stop China Acquiring World-Class Chips. China Got Them Anyway. - WSJ $$

Advanced Micro Devices Inc. transformed itself from a financially struggling company to an investor’s dream in just three years, a turnaround that began with a decision to help Chinese partners develop advanced computer-chip technology.

That deal may have helped save the company, but it alarmed U.S. national-security officials, who saw it as a threat to their goal to rein in China’s supercomputing industry. Last week, after years of friction, the Commerce Department issued an order that effectively bars several Chinese entities—including AMD’s partners—from obtaining American technology.

It looked as though the U.S. had succeeded in stanching the flow of cutting-edge computer technology to China. In reality, it was too late. Chinese versions of AMD chips already have been rolling off production lines...

Commerce Department officials said last week’s action was made in consultation with other agencies. It followed weeks of inquiries by The Wall Street Journal about AMD’s Chinese partnership and the belief of some government officials that AMD had plotted a sophisticated end-run around regulators.

Question: Did AMD license its best tech?

China chip designers say Beijing goals impossible without US tech - Nikkei Asian Review

"There are alternatives in China, but the gap in technology is too big," said an executive from one of China's leading artificial intelligence chipmakers, which relies on U.S. technology for chip design. "If we lose access to U.S. software or can no longer receive updates, our chip development will run into a dead end."

A senior executive from Shanghai-based NextVPU, an AI chipmaker founded by former Advanced Micro Devices engineers, echoed his concerns. "Without updates from American software providers, China's push to develop its own chips will hit a wall," he told the Nikkei Asian Review.


5. Huawei

U.S. Tech Companies Sidestep a Trump Ban, to Keep Selling to Huawei - The New York Times

Industry leaders including Intel and Micron have found ways to avoid labeling goods as American-made, said the people, who spoke on the condition they not be named because they were not authorized to disclose the sales.

Goods produced by American companies overseas are not always considered American-made. The components began to flow to Huawei about three weeks ago, the people said.

Huawei Telecom Gear Much More Vulnerable to Hackers Than Rivals' Equipment, Report Says - WSJ $$

Telecommunications gear made by China’s Huawei Technologies Co. is far more likely to contain flaws that could be leveraged by hackers for malicious use than equipment from rival companies, according to new research by cybersecurity experts that top U.S. officials said appeared credible.

Over half of the nearly 10,000 firmware images encoded into more than 500 variations of enterprise network-equipment devices tested by the researchers contained at least one such exploitable vulnerability, the researchers found.

Huawei Personnel Worked With China Military on Research Projects - Bloomberg

Over the past decade, Huawei workers have teamed with members of various organs of the People’s Liberation Army on at least 10 research endeavors spanning artificial intelligence to radio communications. They include a joint effort with the investigative branch of the Central Military Commission -- the armed forces’ supreme body -- to extract and classify emotions in online video comments, and an initiative with the elite National University of Defense Technology to explore ways of collecting and analyzing satellite images and geographical coordinates...

“Huawei is not aware of its employees publishing research papers in their individual capacity,” spokesman Glenn Schloss said in a messaged statement. “Huawei does not have any R&D collaboration or partnerships with the PLA-affiliated institutions,” he said. “Huawei only develops and produces communications products that conform to civil standards worldwide, and does not customize R&D products for the military.”

Comment: Expect more on this front in the near future.

Huawei's U.S. research arm builds separate identity | Reuters

The U.S.-based research arm of China's Huawei Technologies Co Ltd - Futurewei Technologies Inc - has moved to separate its operations from its corporate parent since the U.S government in May put Huawei on a trade blacklist, according to two people familiar with the matter.

Futurewei has banned Huawei employees from its offices, moved Futurewei employees to a new IT system and forbidden them from using the Huawei name or logo in communications, a Futurewei employee told Reuters on condition of anonymity. Huawei will continue to own Futurewei, the employee said.

Huawei warns US patent curbs would hurt global tech - AP

Disrupting Huawei’s access to U.S. patent courts would threaten the intellectual property system that supports technology development, said Song Liping, the company’s chief legal officer.


6. Hacking

Stealing Clouds - Reuters

Eight of the world's biggest technology service providers were hacked by Chinese cyber spies in an elaborate and years-long invasion, Reuters found. The invasion exploited weaknesses in those companies, their customers, and the Western system of technological defense...

Also compromised by Cloud Hopper, Reuters has found: Fujitsu, Tata Consultancy Services, NTT Data, Dimension Data, Computer Sciences Corporation and DXC Technology. HPE spun-off its services arm in a merger with Computer Sciences Corporation in 2017 to create DXC.

Waves of hacking victims emanate from those six plus HPE and IBM: their clients. Ericsson, which competes with Chinese firms in the strategically critical mobile telecoms business, is one. Others include travel reservation system Sabre, the American leader in managing plane bookings, and the largest shipbuilder for the U.S. Navy, Huntington Ingalls Industries, which builds America’s nuclear submarines at a Virginia shipyard.

Operation Soft Cell: A Worldwide Campaign Against Telecommunications Providers-Cyberreason

In 2018, the Cybereason Nocturnus team identified an advanced, persistent attack targeting global telecommunications providers carried out by a threat actor using tools and techniques commonly associated with Chinese-affiliated threat actors, such as APT10.  This multi-wave attacks focused on obtaining data of specific, high-value targets and resulted in a complete takeover of the network.

Question: Were Guo Wengui and Ling Wancheng among the targets?


7. Taiwan

Taiwan set for pro-mainland fake news deluge before its presidential election | AFP

Last week Tsai’s office also asked police to investigate false claims on social media that her government had given US$32 million to finance huge anti-government rallies in Hong Kong.

Hu Yuan-hui, head of the Fact Checking Centre in Taipei, said the viral nature of disinformation was being aided by many Taiwanese people using mainland Chinese social media and messaging services.

“They [fake reports] tend to highlight the contrast between Taiwan and China to try to portray a chaotic Taiwan versus a strong China,” he said.

台当局阻挠两岸新闻交流 国台办:倒行逆施终会变成历史陈迹--台湾频道--人民网

The state council Taiwan office denounced the demonstration in Taiwan against CCP co-opted media, saying it is obstructing “journalism exchanges” between Taiwan and mainland China

Pro-China groups step up offensive to win over Taiwan - Reuters

Chinese state agencies deployed to build support for unification include the Taiwan Affairs Office and the United Front Work Department, whose aim is to unify Taiwan by co-opting local groups and conducting influence operations against overseas campaigns contrary to China’s political agenda.

Internal documents from the two Chinese groups, reviewed by Reuters, including annual work reports and meeting minutes, show a campaign centered around pro-China organizations in Taiwan, which were described as a “priority focus.”

Taiwan presidential hopeful Han Kuo-yu left at sea by fiasco over ‘shipping route to mainland’ | South China Morning Post

Han Kuo-yu’s Kaohsiung city government has come under fire as he vies to be Taiwan’s next president, after it appeared to endorse a new shipping route to mainland China that has no licence to operate.


8. MIT President on risks of a “red scare”

MIT President Letter to the MIT community: Immigration is a kind of oxygen | MIT News

As head of an institute that includes MIT Lincoln Laboratory, I could not take national security more seriously. I am well aware of the risks of academic espionage, and MIT has established prudent policies to protect against such breaches.

But in managing these risks, we must take great care not to create a toxic atmosphere of unfounded suspicion and fear. Looking at cases across the nation, small numbers of researchers of Chinese background may indeed have acted in bad faith, but they are the exception and very far from the rule. Yet faculty members, post-docs, research staff and students tell me that, in their dealings with government agencies, they now feel unfairly scrutinized, stigmatized and on edge – because of their Chinese ethnicity alone. 

Nothing could be further from – or more corrosive to ­– our community’s collaborative strength and open-hearted ideals. To hear such reports from Chinese and Chinese-American colleagues is heartbreaking.

Comment: The US government is struggling with how to deal with the very real espionage and IP theft threats from the CCP without triggering a terrible racist backlash against everyone in America of Chinese descent. If the government is too soft then the CCP efforts will remain unchecked, if it is too harsh and indiscriminate then many talented Americans will leave. Either of those outcomes would be a win for the CCP. There are US politicians thinking hard about how to manage this in a way that will protect everyone’s rights, I spoke to several last week, but it is hard to be confident that the bureaucracy can act with the nuance and restraint needed.


Business, Economy and Trade

President Xi, Still the Deglobalizer in Chief… | Council on Foreign Relations The real issue, I think, is whether or not China is prepared to open up—for real—to non-American manufactured goods in order to squeeze the United States out of a big and growing potential market for U.S. made goods. And there, I just don’t see the evidence. When it comes to manufactures, China is actually importing less from everyone right now—even with the (quite modest) tariff cuts.

Exclusive: Alibaba Eyes $10 Billion Hong Kong Listing - Caixin E-commerce juggernaut Alibaba Group Holding Ltd. plans to raise $10 billion through a second listing in Hong Kong, a source close to the deal told Caixin, in what could become the market’s largest new offering in almost a decade...Alibaba did not respond to Caixin’s request for confirmation of the listing and its scope. Rumors of the deal have circulated for months, although earlier reports put the fundraising target higher at $20 billion.

Top legislature hears reports on 2018 final accounts, audit work - Xinhua Entrusted by the State Council, Finance Minister Liu Kun delivered the report on 2018 final accounts. The central government's general public budget revenue was about 8.55 trillion yuan (1.24 trillion U.S. dollars), while the general public budget expenditure was about 10.2 trillion yuan

Canada urged to ensure safety of food exported to China - People's Daily Online Chinese customs authorities recently detected ractopamine residues in a batch of pork products from Canada, and immediately suspended the import from the Canadian company and asked the Canadian authorities to investigate. The investigation found a total of 188 veterinary health certificates for the pork were counterfeit, Foreign Ministry spokesperson Geng Shuang told a press briefing on Wednesday.

State Firms Dragging Their Feet on Measure to Head Off Pension Shortfall - Caixin As of the end of March, 23 state firms administered by the central government had made the transfers with equity worth a total of 113.2 billion yuan ($16.5 billion) to the National Social Security Fund, a fraction of the target, the National Audit Office, the country’s top auditor, said Wednesday in a report

A Ship and Its Crew Get Entangled in Trump-Xi Huawei Battle - Bloomberg The Amazon, laden with Canadian canola, has been travelling back and forth in the waters around Xiamen port for four weeks after leaving Vancouver on May 7, according to Bloomberg shipping data and a person familiar with the situation. Chinese authorities have been repeatedly carrying out quality inspections on the cargo, the person said.

Foxconn denies rumor of Chinese factory closures - China Daily The world's largest electronics contractor Foxconn denied it would close factories in the Chinese mainland to move in other countries on Wednesday. Moreover, on its official WeChat account, the company also refuted other rumors including mass layoffs, abandoning cooperation with Huawei, and standing with the US during the China-US trade dispute.

No End in Sight for This Indebted Chinese Giant's Shopping Spree - Bloomberg Fosun is the last of the serial Chinese buyers still out chasing deals while others such as HNA Group Co. -- once the most acquisitive local conglomerate -- are pulling back, after a string of splashy acquisitions from Waldorf Astoria hotel to European soccer clubs invited Beijing’s scrutiny. Being a relatively smaller group, Fosun dodged the brunt of an ensuing crackdown, and shifted its focus to deals that fit better into its core businesses.

China calls halt to surge in local government dollar bond sales | Financial Times $$ The boom in debt deals, however, is expected to come to an abrupt end on Friday, after which Chinese regulators are likely to impose stricter rules on the companies.
The National Development and Reform Commission said in mid-June that it would only allow LGFVs to refinance existing debt in the second half of the year, as Beijing grows wary of building offshore repayment pressures.

Public default at Chinese trust company highlights cracks in market | Financial Times $$ Anxin Trust, which missed payments on Rmb11.8bn for 25 trust products earlier this year, has been forced to publicly document its default because, unlike most trusts, it is listed on the Shanghai stock exchange. The situation has offered a rare glimpse into the factors leading up to failed trust products, which for Anxin include giving loans to an acquisitive property group that has since been delisted from a Chinese bourse. The trust company’s shares tumbled more than 9 per cent on Tuesday after it said its parent company’s shares had been frozen by a court in Shanghai.

Politics and Law

全党必须始终不忘初心牢记使命  在新时代把党的自我革命推向深入--时政--人民网 Xi held Politburo study session on “staying true to our founding mission”, saying keeping the CCP “pure” and “full of youthful spirit” as a “Marxist ruling party” is crucial for the party to stay in power.

Senior official warns against formalities for formalities' sake in Party education campaign - Xinhua A senior Party official on Tuesday underscored preventing the practice of formalities for formalities' sake in an on-going Party education campaign themed "staying true to our founding mission". Chen Xi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and deputy chief of the leading group of the campaign, told a meeting that efforts should be made to ensure concrete results in the education campaign.

“不忘初心、牢记使命”主题教育官方网站--人民网 The "staying true to our founding mission" campaign website

中国前国家副主席李源潮近日露面_中国-多维新闻网 After another round of rumors about former Vice President Li Yuanchao, this time saying he had committed suicide, a proof-of-life picture of Li reading the June 24 People's Daily appeared on PRC social media, and was dutifully reported on by Beijing-controlled Duowei

They Come For Us At Night: China's Vanishing Muslims (Trailer) - YouTube VICE News' Isobel Yeung goes undercover in a special report that reveals how China is oppressing the Muslim minority Uihgur people in horrific conditions.

China mulls prisoner amnesty for 70th anniversary of People’s Republic | South China Morning Post Legislation under consideration but no details on inmates who would qualify Proposal comes four years after about 31,000 prisoners released for World War II commemorations

中国传媒大学原党委常委副校长蔡翔接受审查调查————执纪审查——中央纪委国家监委网站 Cai Xiang, former Vice President of Communication University of China put under investigation

China launches official website, Wechat account for Party education campaign - Xinhua The official website and Wechat account for the on-going Communist Party of China (CPC) education campaign themed "staying true to our founding mission" has been launched...With the web address http://chuxin.people.cn, the website has more than 10 columns and interaction sections, while the official Wechat account, based on the country's most popular social network, will provide a mobile platform for Party members to study anytime and anywhere.

Beijing Internet court launches AI judge - Xinhua The AI judge, based on intelligent synthesizing technologies of speech and image, will help the court's judges complete repetitive basic work, including litigation reception, and thus enables professional practitioners to focus on judicial trials. The judge has a female image with a voice, facial expressions and actions based on a real person. It can also provide users with litigation guidance in real time, helping users to use the online litigation platform.

Factbox: A brief look at China's model civil servants - Xinhua A total of 192 individuals and 98 groups of civil servants were conferred with the titles of civil servants (groups) "who the people deem satisfactory" at a national awards ceremony Tuesday. The ceremony, the ninth of its kind, was co-organized by the Organization Department and the Publicity Department of the Communist Party of China Central Committee. It was first held in 1996 and last held in 2013.

Foreign and Defense Affairs

Report: China fighters buzz Canada warship in East China Sea - AP Canadian Global Affairs Institute fellow Matthew Fisher wrote that the Su-30 fighters flew within 300 meters (980 feet) of the bow of the frigate HMCS Regina. Fisher, who was aboard the ship, said the display was more aggressive than previous encounters between the Canadian navy and Chinese warplanes, but was not considered dangerous. Fisher didn’t say when the incident occurred, although his report on the institute’s website was dated Tuesday.

Powering the Belt and Road | Mercator Institute for China Studies Firstly, investment in power plants and grids dominates China’s spending on BRI-related infrastructure. Secondly, China is encouraging its energy companies to seek contracts abroad without necessarily prioritizing any sector - Beijing is neither leading a “green” revolution nor a fossil-fuel revival, but rather playing both sides. Thirdly, China’s energy projects are geographically diversified - Latin America is in the lead in terms of volume of completed investments (mostly into renewables and energy distribution), while Southeast Asia boasts the highest number of projects (mostly involving coal). Fourthly, China’s initial focus on energy projects creates the preconditions for the next phase of the BRI: industrial buildup and new China-centered supply chains.

United Nations Development Programme Jobs - 82742- Expert on BRI Standard Report a team in UNDP China is writing a research report jointly with China Development Bank (CDB) on “Harmonizing international standards in financing and investments towards sustainable development along the Belt and Road”. The report is planned to be formally acknowledged as a result of work on the Belt and Road Initiative during the April 2019 BRI Forum in President Xi’s speech…UNDP China is seeking a leading expert with excellent analytical and writing skills, strong interpersonal skills, as well as deep knowledge of China and the Belt and Road Initiative to assist in bringing the report to the necessary level for submission by late February, 2019.

China in Uganda: The Highs and Lows of the Belt and Road | CACR | Center for Advanced China Research In sectors such as public health, oil, and manufacturing, Chinese firms have worked relatively transparently in conjunction with local and international stakeholders and have had appreciable success. Some infrastructure projects, on the other hand, have been marked by cronyism and opacity and have run into a variety of problems. The rest of this article looks at the strategies of Chinese actors in 1) public health and public services, where they have had more success; 2) a series of more problematic projects building connective infrastructure; and 3) budding potential success stories in productive industry. As we will see, the transparent, open approach has proven superior in maintaining quality control and minimizing corruption and waste.

Kenyan court blocks China-backed power plant on environment grounds | Financial Times $$ A Kenyan court has halted construction of the country’s first coal-fired power station on environmental grounds in a blow for the $2bn project’s Chinese backers and the green credentials of China’s Belt and Road Initiative.

Angola, China pledge to enhance cooperation - China Military UANDA, June 25 (Xinhua) -- China and Angola appreciate each other and are committed to deepening bilateral cooperation, said visiting Vice Chairman of China's Central Military Commission Xu Qiliang and Angolan President Joao Lourenco on Tuesday.

Xi sends congratulatory letter to first China-Africa Economic and Trade Expo - Xinhua The first China-Africa Economic and Trade Expo brings together the Chinese and African governments, think tanks, enterprises and financial institutions to discuss major cooperation projects. It is hoped that the two sides will strengthen coordination to better implement the eight major initiatives put forward at the Beijing summit of the FOCAC, actively explore new paths for cooperation, open up new points of growth for collaboration, and promote China-Africa economic and trade cooperation to a new level, Xi said.

New Xinjiang report slammed - Global Times Li said that due to their long-term bias and political stance, some Western media would rather spread rumors than make fair points of view on Xinjiang.  Erkin Öncan, a Turkish journalist who focuses on China's Xinjiang reports, told the Global Times on Wednesday that "Western media is ideologically motivated and 'forgets' journalism ethics when it comes to China.

MSDF, Japan Coast Guard hold 1st joint drill in South China Sea:The Asahi Shimbun he Japan Coast Guard and the Maritime Self-Defense Force conducted their first joint drill in the South China Sea on June 26, in a move apparently aimed at reining in China’s aggressive behavior in the region.

China Explores Economic Outreach to U.S. States Via United Front Entities - Jamestown amidst the harsh rhetoric directed at U.S. policymakers at the national level, a far more conciliatory message is being delivered to American public officials at the state level, in the hope that such connections might serve to sustain U.S.-China trade relations amidst the “trade war” raging between the two national governments. Many of these outreach efforts are being conducted either by “people-to-people” diplomacy organizations, or by Chinese trade associations—both of which occupy prominent places in the PRC’s broader united front architecture for cultivating influence abroad.

Film "Bugle From Gutian" to hit screens for Army Day - Xinhua An epic film in commemoration of the 90th anniversary of the Gutian Meeting and the army led by the Communist Party of China (CPC) will be released on this year's Army Day, which falls on Aug. 1. Based on events in 1929, the "Bugle From Gutian" reflects the development of the newly born revolutionary troops in southeastern Fujian Province where the meeting was convened, according to director Chen Li.

Hong Kong and Macao

Former Hong Kong Exchange Official Arrested in IPO Graft Probe - WSJ $$ Hong Kong’s anticorruption watchdog arrested a former high-ranking official at the city’s stock exchange for allegedly rigging the approval system for companies applying to go public. The official was Eugene Yeoh, who had been a co-head of the Hong Kong Exchanges & Clearing Ltd.’s vetting team for initial public offerings, people familiar with the matter said. Two associates were also arrested, according to a statement from the city’s Independent Commission Against Corruption.

Tech and Media

范冰冰和李晨宣布分手,回顧那個經典文案「我們」 | 微信上的中國 Fan Bingbing and Li Chen are splitting up

Patriotic Movie Apparently Falls Afoul of China’s Censors - The New York Times The July 5 opening of “The Eight Hundred,” the first movie in China filmed entirely in Imax, has been abruptly canceled, according to a terse statement posted Tuesday on the film’s official account on Weibo, the Twitter-like social media site.

Chinese Drama ‘Better Days’ Has Its Mainland Release Canceled – Variety Early Monday evening in China, the film’s official Weibo social media account apologized to expectant viewers for the inconvenience, saying: “After considering the level of completion of ‘Better Days’ and our market pre-assessments, and following consultations between the production and distribution parties, the film will not be released on June 27. A new release date will be announced at a later time.”

Fueled by Slack’s Success, China's Team Collaboration Software is Booming As Well- PingWest With the public listing of Zoom and Slack, the enterprise application market in the US seemed mature enough, while providing software services to businesses is still a blue ocean market in China. However, local tech giants like Alibaba, Tencent and ByteDance are already catching up to the wave their U.S. counterparts created. Massive development and marketing resources were poured into the team collaboration software field by these behemoths to bet on the growing trend of enterprise software market.

Tencent Leads China's Effort to Put Age Ratings on Games - Bloomberg More than 10 of the country’s top gaming firms -- including Tencent, NetEase Inc. and Perfect World -- have teamed up to devise a system to assign games to one of four age categories, according to a proposal carried on the People’s Daily’s website. The effort is led by the online edition of the state-backed newspaper, often regarded as the mouthpiece of the Communist Party.

Inside China’s battle to keep internet addiction in check | South China Morning Post Li Jiazhuo, 14, was bundled away one afternoon in May by two burly men who identified themselves as Education Bureau officers there to investigate his truancy from school. Except they were not from the Education Bureau but were orderlies from an internet detox centre run by an ex-Army colonel. They had gone to drag the teenager away from his computer at the behest of his mother, who had watched her son skip meals and forgo sleep to play online games for 20 hours a day for weeks.

Society, Arts, Sports, Culture and History

Bystander Video Shows Chinese Blogger Wang Xixi Punching and Kicking Food Delivery Man | What's on Weibo A well-known Chinese auto industry blogger named Wang Xixi (@王兮兮Shirley, 3.1 million fans on Weibo) is at the center of controversy since a video leaked on social media that shows her hitting and punching a food delivery man.

Tiananmen: The People Versus the Party | PBS Uncover the true story of the seven-week period that changed China forever. On June 4, 1989, a violent and bloody pro-democracy demonstration ended, leaving thousands dead, and laying the foundation for China’s future.

Energy, Environment, Science and Health

China unveils guideline to establish nature reserve area mechanism - Xinhua The guideline aims to provide systemic protection for natural ecosystems, relics, scenery and biodiversity, as well as safeguard the country’s ecological security. Under the new mechanism, one nature reserve area will receive uniform management from one administrative body, and classified management and control will be carried out with different restrictions on human activities.

China spends big on pollution control, treatment in 2018 - Xinhua The central government allocated about 255.5 billion yuan (37.15 billion U.S. dollars) in the field last year, up 13.9 percent year on year, with spending on pollution control and treatment of air, water and soil reaching record highs in recent years, Chinese finance minister Liu Kun said Wednesday while delivering the report to a session of the standing committee of the country's top legislature.

China considers tough law against faulty vaccines - Xinhua China's top legislature Tuesday began reviewing a draft law on vaccine administration, which requires the "strictest" management by setting up a whole-process supervision system and toughening penalties for producing and selling fake or substandard vaccines. The draft was submitted for a third review to the bi-monthly legislative session of the Standing Committee of the National People's Congress, which opened Tuesday.

Education

Why did one of China’s elite universities need to offer big money to get the best students? | South China Morning Post Zhejiang University has been ordered to stop dangling tens of thousands of dollars to get the highest scorers in the national college entrance exam to accept a place at the campus Competition for the top gaokao performers is fierce as schools can no longer wait for the brightest to come to them

Rural and Agricultural Issues

China to raise incentives to boost pork supplies: state media - Reuters Local authorities will award incentives to major hog producing counties and also give allowances to regions to help control the disease, the Xinhua news agency said, citing Ministry of Agriculture and Rural Affairs spokesman Guang Defu.