Guo Shuqing on bubbles and risks; Hong Kong; January 2021 China Political Discourse report; SMIC
|Bill Bishop||Mar 2||16|
The January 2021 China Political Discourse report from the China Media Project is now available here on Sinocism. An excerpt:
In each monthly analysis in 2021, CMP will try to highlight one or two salient phrases in the emerging official discourse, utterances that are new, significant, colorful – or all of the above. This month our first candidate – “let oversight grow teeth, and let violating subjects grow long-term memories” (让监管长牙齿，让违规主体长记性)– is ominously colorful, underscoring the resolve of the Party to bring to heel unwanted, critical views on social media platforms.
On January 29, the Cyberspace Administration of China, the country’s top internet control body, held a video conference during which the agenda was to make deployments (部署) in order to more effectively regulate and control internet and social media platforms. Zhuang Rongwen (庄荣文), director of the CAC and a deputy minister at the Central Propaganda Department, told those in attendance that it was essential to implement Xi Jinping’s instructions from the 12th collective study session of the 19th CCP Central Committee in July 2019 – that “positive energy is the general requirement, control is the absolute principle, clever use is the true skill” (正能量是总要求，管得住是硬道理，用得好是真本事 ). This three-part phrase, which has been shortened also to the nine-character formula “positive energy, control and skillfulness” (正能量/管得住/用得好), points to the need to 1) avoid negative perspectives or criticism in reporting, 2) strictly maintain control over content, and 3) find new ways to make propaganda effective through innovation.
Zhuang spoke of resolutely controlling the “foundation” of the content or article source (稿源) and closing the “backdoor” (后门), referring to content generated by so-called “self-media” (自媒体) on platforms like WeChat without the license to report or publish news. Zhuang said the Party needed to “strictly manage the outstanding problems of illegal independent interviewing (违规自采) and illegal reposting” (违规转载), and at the same time “open the ‘front door’ wide to expand capacity and improve the quality of “compliant article sources” (合规稿源) and “further enrich the supply of online information content” (进一步丰富网上信息内容供给). To break this language down, Zhuang is essentially saying here that China needs to tighten the supply of unauthorized and critical content now finding space on new media platforms, and to open up space for the distribution of “mainstream,” or CCP compliant, messaging.
So, for this month’s first surprise phrase. As Zhuang discussed these priorities, he said there was a need to focus on the regulation and control of “self-media,” to increase the intensity of discipline actions against non-complying accounts and the platforms hosting them, to “let oversight grow teeth, and let violating subjects grow long-term memories.”
You can read the full report here, outside the paywall.
Today’s Essential Eight items:
Guo Shuqing’s press conference
Small number of “scum 败类” hurting the China-Australia friendship
Some US approvals for SMIC purchases?
New poll says US favorable views of China at record low
More on foreign journalists and China
Thanks for reading.
The Essential Eight
1. Guo Shuqing’s press conference
Guo is the chairman of the China Banking and Insurance Regulatory Commission. his comments about overseas bubbles got the bulk of the attention but he did have other interesting things to say
Guo forecast that China’s lending rates will likely go up this year. His prediction is confirmation that the country’s monetary policy stance is tightening, which is appropriate given that the economic recovery is on track, said Zhang Zhiwei, chief economist at Pinpoint Asset Management Ltd.
Guo also warned about a bubble forming domestically in China’s real estate market. He said many homebuyers are buying homes as speculative investments rather than as places to live in, which has the potential to disrupt the economy if prices should start to fall and homebuyers find themselves unable to repay their mortgages.
China has curbed its property market bubble after mortgage growth was less than for other loans for the first time in eight years in 2020, according to the country’s top financial regulator.
But the real estate market still has a strong financial tendency and is prone to bubbles, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said at a press conference today.
Guo Shuqing, secretary of the Party Committee of the People's Bank of China and chairman of the China Banking Regulatory Commission, said on the 2nd that China has made decisive achievements in preventing and defusing financial risks, and the risks of the banking insurance industry have changed from rapid divergence to gradual convergence, and a number of major hidden dangers have been "accurately defused", firmly holding the bottom line of no systemic risks.
Guo Shuqing said at the press conference of the State Council Office that for the banking and insurance industry, to prevent and resolve financial risks, the high leverage within the financial system should be lowered first. From 2017 to 2020, the average annual growth rate of total assets of banking and insurance industry was 8.3% and 11.4% respectively, which was roughly only half of the average annual growth rate from 2009 to 2016. The financial leverage ratio has dropped significantly, and the blind expansion of financial assets has been fundamentally reversed.
Bubbles in U.S. and European markets could burst because their rallies are heading in the opposite direction of their underlying economies and will have to face corrections “sooner or later,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission and Party secretary of the central bank said at a briefing in Beijing on Tuesday...
Guo also said bubbles in China’s property market remain relatively big, with many people buying homes for investment or speculative purposes, which is “very dangerous.”
A strong economic recovery, combined with a credit surge and a renewed fear of missing out have stoked buyer enthusiasm across China’s largest cities despite stricter curbs this year. Authorities have responded with a slew of policies to fine tune the industry, including a new mechanism on bank lending for real estate and fresh land-bidding rules designed to curb high-flying land costs.
Some excerpts of Guo Shuqing's comments:
We will take risk prevention as the eternal theme of the financial industry, monitor and resolve all kinds of financial risks unremittingly, strengthen the financial rule of law, and improve the long-term mechanism. Maintain a fair competitive market environment, strengthen anti-monopoly and prevent disorderly expansion of capital, and ensure that financial innovation is carried out under the premise of prudent supervision.
Internet platforms must have the same capital adequacy ratio to do the same financial business
The issue of Internet platform supervision has also attracted much attention. Guo Shuqing said that the Internet platform participates in finance in China, which is the largest in scale and scope in the world and has achieved positive results. In particular, it has done a good job in providing digital credit, digital insurance and other services for small and medium-sized enterprises. It should be said that it is leading in the world and has many innovations, and we encourage these innovations. At the same time, however, we also require that financial business in any format should be managed in accordance with the corresponding rules, regulations and laws, with no special exceptions.
I am very worried about which day the foreign financial asset bubble will burst
Since the outbreak of COVID-19, the global economy has experienced a relatively large oscillation, which is generally downward. Guo Shuqing also expressed some views on the extraordinary stimulus policies introduced by European and American countries in response to the epidemic.
"Developed countries in Europe and America, countries with serious epidemics and some developing countries have adopted active fiscal policies and extremely loose monetary policies, which we can all understand, because after all, to stabilize the economy, these measures must be taken in macro policies. However, there may be more considerations in terms of strength and consequences, because after all, there will be some side effects, and now these side effects have gradually emerged. " Guo Shuqing said.
Regarding the side effects mentioned above, Guo Shuqing said: First, the financial markets in developed countries in Europe and America are running at a high level, which is seriously contrary to the real economy. The financial market should reflect the situation of the real economy. If it is too different from the real economy, problems will arise and it will be forced to adjust sooner or later. Therefore, we are worried about which day the financial market, especially foreign financial asset bubbles, will burst.
Second, after the increase of liquidity, because the economy has been highly globalized, China's economy is closely linked with the economies of other countries, and the amount of foreign capital flowing into China will obviously increase, and we can see that the growth is indeed relatively fast. China's economy is still recovering, and our asset prices are very attractive. Compared with other countries, the spread is relatively large, and the inflow of foreign capital is inevitable.
"But up to now, the scale and speed are still within our controllable range, and we are continuing to study how to take more effective measures, on the one hand, encourage the cross-border flow of capital elements, and become more and more open. On the other hand, we can't cause too much fluctuation in the domestic financial market, and we are confident to do this work well. " Guo Shuqing said.
2. Hong Kong
The proposed reform will put further pressure on pro-democracy activists, who are already the subject of a crackdown on dissent, and has ruffled the feathers of some pro-Beijing loyalists, some of whom may find themselves swept aside by a new and ambitious crop of loyalists, the people said.
“It will be an earthquake shaking up local political interests,” said one person briefed on the impending changes...
Two senior pro-Beijing politicians told Reuters the electoral reform plan, coming on top of the broader crackdown that has already provoked international criticism, would ultimately damage Hong Kong, potentially destroying its unique character, pluralism and attractiveness for investors...
“Nothing is normal anymore,” said the second pro-Beijing politician. “It’s a new abnormal.”..
One faction that appears ready to benefit from electoral reform is the new Bauhinia Party, formed in May by Charles Wong and two other mainland-born, pro-Beijing businessmen, pushing policies that Wong says will help revive Hong Kong and its leadership.
Question: How many of the establishment pro-beijing Hong Kong elite hold foreign passports? Does Xi really consider them “patriotic” if they do?
Xia's speech about only patriots governing Hong Kong outlined detailed conditions for being a patriot who governs the city, including not only the city's chief executive but also major officials of the Executive Council, LegCo lawmakers, returning officers and all-levels of judges. He urged Hong Kong officials to understand "one country, two systems" correctly and comprehensively by not challenging the bottom-line of the country, Regina Ip Lau Suk-yee, a member of the Executive Council, told the Global Times on Tuesday.
"It's about correctly understanding the relationship between the central government and Hong Kong, and there's no single word mentioning that a patriot has to love the CPC," she said...
"We can interpret his remarks from a perspective of 'a Negative List', which means you don't have to genuinely love the Party or believe in communism or socialism, but you can't take actions that try to change a China led by the CPC," Lau said.
In a courtroom this week, 47 of Hong Kong's leading pro-democracy figures — including lawyers, a urologist, elected officials and a father-to-be — are fighting authorities' efforts to jail them, after they were charged on Sunday with violating a national security law that China imposed on the city last year.
The hearings have dragged on for two days in which the defendants have been deprived of sleep, meals and, at times, access to a lawyer. Four were taken to hospitals after falling sick, including 64-year-old former legislator Leung Kwok-hung, who has heart disease.
UK's claim that China's national security law "stifles any political dissent" and "violates the Joint Declaration" is absurd and confuses right and wrong, the Chinese embassy said on Tuesday, after UK Foreign Secretary Dominic Raab made remarks on the decision by Hong Kong Police Force to charge 47 Hong Kong politicians and activists.
3. Small number of “scum 败类” hurting the China-Australia friendship
So said the deputy head of mission Wang Xining at recent Lunar New Year’s dinner. The official English transcript of his speech tones down the Chinese version. As always, the Chinese version is more interesting
Is it normal diplomatic practice for diplomats stationed overseas to tell their host audience that those who are not friends are "scum" who will be "cast aside in history" and their children "will be ashamed of mentioning their names"?
Now our Australian friends are in a difficult situation, but your Chinese friends stand with you. History will prove that it is wise and far-sighted for you to choose China as your friend. Your children and grandchildren will be proud and benefit from your choice, and your Chinese friends and their children are also encouraged and proud to have friends like you. For a better tomorrow, most people choose to make more friends, but there are always a small number people who choose to make more enemies. However, those scum who deliberately slander China, destroy China-Australia friendship and damage the well-being of the two peoples will be spurned by the world, and their descendants will be ashamed to mention their negative role in history
Recently I watched a video on YouTube, there is an Australian uncle Jerry Grey, he and his wife went on a bicycle ride in Xinjiang. After he came back, he told his friends about what he saw and experienced in Xinjiang, and few people would believe in him. Recently, I felt so pitiful about Mr. Dominic Dwyer, who was an expert in WHO team to China. He was misquoted, so he gave an extensive interview on The Conversation, but only the Guardian carried the report. The Murdoch's News Corporation, who claimed that the virus must leak from a biological institute from Wuhan, said nothing about Mr. Dwyer’s interview and his impression about this trip
Currently, the friends of China are given a nickname “panda-hugger”. It used to be a word of appreciation but now it carries derogatory meanings. It seems that being friendly to China, to be a friend of China becomes a sin and mistake in Australia. While, to take a stern face against Chinese would be the legislate stance by a patriotic Australian. Only in that way could the Australian politician win the heart of Australian population. Today, it is really difficult to be China’s friend in Australia.
In China, we have a saying that friendship would not be severed by mountains or seas. George Washington said that the true friendship is slow growing plant. I believe our friendship would not be diluted, would not be separated by distance or time. If you are in a difficult situation to be a China’s friend, don’t worry, your Chinese friends will stand together with you, your friends in China will always be with you. History will prove that it is wise and visionary to be China’s friends, and your children and grandchildren would be proud of you to be China’s friends and they will benefit from the relationship with China. Your Chinese friends and their children will also be proud and benefit from your friendship. For a better future and for the next generation, most people choose to make friends, but some people in Australia choose to make enemies to sustain a living. Those who deliberately vilify China and sabotage the friendship between our two countries and do damage to our long-term friendship and benefits out of their sectoral or selfish interest will be casted aside in history. Their children will be ashamed of mentioning their names in the history.
The message, with mixed emotions, came from Wang Xining, minister of the Embassy at a Chinese New Year dinner hosted by the Australia China Business Council (ACBC), with more than 100 Chinese and Australian members from the government, education institutions, and business sectors...
Chen Hong, director of the Australian Studies Center at East China Normal University, told the Global Times on Tuesday that Australian media outlets with ulterior motives have played a pivotal role in forming the anti-China atmosphere.
The Australian media and government cooperate closely with the anti-China strategy of the US, distorting the facts about China and inciting the public, said Chen, noting that some domestic intelligence agencies also feed reporters "exclusive news."
The proposed motion – placed on the Senate’s notice paper for 15 March – looms as a test for the major parties at a time when Australia should join the international community in taking a stand, according to the South Australian independent senator Rex Patrick.
While the Morrison government has thus far declined to describe the situation in China’s Xinjiang region as genocide, the foreign affairs minister, Marise Payne, has raised concerns about “some very horrific reports, particularly around forced labour, around re-education camps, allegations in in relation to the systematic torture and abuse of women”.
Almost one in five Chinese Australians say they have been physically threatened or attacked in the past year, with most blaming tensions stemming from the COVID-19 pandemic or hostility between Canberra and Beijing.
4. Ant Group
Financial regulators have set various grace periods for different internet platforms, according to Guo. Some have until the end of 2020 and others until the middle of 2021 to meet capital adequacy requirements, he said.
“But by a maximum of two years, (the capital adequacy of) all platforms should be back on track,” Guo added.
With regards to Ant Group’s restructuring, Guo said there were no restrictions on the financial business it develops but that all of its financial activities should to be regulated by laws.
Facing discontent among employees, Ant Group Co.’s leader said the Chinese financial-technology giant would eventually go public and that the company would look for ways to help workers monetize some of their shares.
In a lengthy post on Ant’s internal website, Executive Chairman Eric Jing said the company’s management is reviewing its remuneration and incentive policy and working on a “short-term liquidity solution” for employees that would take effect in April, according to people who saw his message. Mr. Jing was responding to an employee who had asked about Ant’s future and how the company plans to retain talent.
employees of Jack Ma’s Ant Group Co. are stuck holding shares so difficult to value that even the company itself is struggling to determine a fair price. It has shelved a share buyback program for current and departing staff, in part because of uncertainty over how to value the company, according to Ant executives familiar with the matter.
The move underscores two intertwined challenges facing Ant, four months after Chinese authorities torpedoed its $35 billion initial public offering: The fintech giant’s future is still shrouded in doubt due to an ongoing lack of regulatory clarity, and employee morale is increasingly under threat. Ant is bracing for departures after it pays bonuses in April, the executives said, asking not to be named discussing private information.
Last month, Chinese internet finance giant Ant Financial — the Alibaba subsidiary best known for its ubiquitous Alipay digital wallet — announced plans for two simultaneous IPOs in the near future: one in Hong Kong, the other in Shanghai. After screenshots of celebratory employee chats leaked on the internet, including some that suggested Ant workers had broken into cheers at the news, netizens coined them the “sounds of financial freedom.” It seemed Ant’s workers had won the startup lottery and were set for life.
As a former Ant employee myself, I took the opportunity to send an old colleague a message congratulating him on his newfound liberty, or at least on finally being able to cash out his stock options on the open market. His reply was almost apathetic: “Just how, specifically, am I financially free now?”
In theory, the answer is something called “Share Economic Rights,” or SERs. An equity sharing program open to Ant’s mid-level employees and above, SERs is a kind of promise. Stick it out until the IPO, it says, and all the overtime and lost weekends will be worth it. While the exact amount depends on an employee’s rank and when they joined, a typical payout could be worth millions of yuan.
Comment: As someone who saw 8 figures of paper stock option gains evaporate to 0 (see MKTW 2000-2001), I sort of feel for the Ant employees
Ant has blamed privacy laws, as users must give their approval before the company can send their information to the central bank and only a fraction have agreed to do so. China’s data protection standards require companies to obtain consumers’ consent on how they use their data, including passing it on to third parties.
But the PBoC is pushing companies to find ways to share data, such as requiring consumers to agree to data-sharing as a condition of using their services — a measure Ant is loath to implement for fear of scaring off customers, according to former and current employees...
Chinese officials have also complained of a lack of detail in the data Ant has shared and the frequency with which it does so. The group submits condensed transaction records, which only include an aggregate figure, once a month to the central bank’s Credit Reference Center, the official collector of individual and corporate credit information
Comment: Ant can push back against PBoC requests, but could they push back on state security requests?
5. Some US approvals for SMIC purchases?
According to electric information website ijiwei.com on Monday, SMIC received US government licenses to import equipment for use in mature processes, including making 14-namometer chips.
The electric research team under Industrial Securities Research Center confirmed the news, saying that one US supplier had obtained permission, and two other companies were still waiting for approval, with a strong chance that they will also get licenses…
Independent tech analyst Xiang Ligang noted it is broadly expected that the US will gradually ease supply restrictions of chip equipment to Chinese chipmakers, though exports of advanced technologies, like 7nm or smaller, will still be restricted by the Biden administration in the foreseeable future.
"The US government ban on the Chinese semiconductor sector has not only disrupted global semiconductor supplies but also hurt the interests of its own companies. I believe the Biden administration is moving to correct the situation," Xiang told the Global Times.
21CBH reports that some suppliers to SMIC recently were granted some license to sell to the company.
China’s vaccine diplomacy campaign has been a surprising success: It has pledged roughly half a billion doses of its vaccines to more than 45 countries, according to a country-by-country tally by The Associated Press. With just four of China’s many vaccine makers claiming they are able to produce at least 2.6 billion doses this year, a large part of the world’s population will end up inoculated not with the fancy Western vaccines boasting headline-grabbing efficacy rates, but with China’s humble, traditionally made shots.
Amid a dearth of public data on China’s vaccines, hesitations over their efficacy and safety are still pervasive in the countries depending on them, along with concerns about what China might want in return for deliveries. Nonetheless, inoculations with Chinese vaccines already have begun in more than 25 countries, and the Chinese shots have been delivered to another 11, according to the AP tally, based on independent reporting in those countries along with government and company announcements...
“Vaccines, particularly those made in the West, are reserved for rich countries,” said one Egyptian official, who spoke on condition of anonymity to discuss the matter. “We had to guarantee a vaccine. Any vaccine.”
Zhong Nanshan, a coronavirus expert who helped shape China’s COVID-19 response, said on Monday the current ratio of vaccine doses administered per 100 people in China is 3.56, much lower than those in Israel, United Arab Emirates and the United States.
In an online forum held by China’s Tsinghua University and the Washington-based Brookings Institution on Monday, Zhong said the target was 40% by the end of June, citing his contacts at the Chinese Center for Disease Control and Prevention...
However, in a phone call with Reuters on Tuesday, Zhong clarified that 40% target would be hit in July, after taking into account the proportion of people who do not want to be vaccinated.
Zhang Wenhong, director of the infectious disease department at Shanghai’s Huashan Hospital, told an online event hosted by the Washington-based Brookings Institution on Monday that China has sufficient Covid-19 vaccine production capacity, but the pace of vaccination is of “great concern.”
Zhang said the production output of Covid-19 vaccines in China is expected to be increased to 2.1 billion by year-end, more than one dose per person for the whole Chinese population.
Beijing will soon begin mass vaccinations against the coronavirus for people over 60 years old, following advice from national authorities, the Beijing Center for Disease Prevention and Control said on Tuesday.
Some seniors aged 60 and above in the capital have already been inoculated, it said.
People's Daily: The United Nations Security Council unanimously adopted a resolution, urging equitable access to COVID vaccines. Does China have any comment?
Wang Wenbin: The UNSC recently adopted through consensus a resolution calling for strengthened international cooperation to facilitate equitable and affordable access to COVID-19 vaccines in all countries and regions, including those in conflict and unstable situations. China welcomes this step, which demonstrates the role of the Council.
China has been acting on President Xi Jinping's solemn commitment of turning Chinese vaccines a global public good with concrete actions. We were among the first to join the WHO-sponsored Access to COVID-19 Tools (ACT) Accelerator initiative. Beside joining and supporting COVAX, we also actively cooperate with 10-plus countries on vaccine R&D. These are all concrete steps China has taken to promote equitable distribution of vaccines. At the request of the WHO, China has decided to provide 10 million doses of Chinese-made vaccines as a first step to meet the urgent need of developing countries. China also decides to participate in the UN's Group of Friends initiative and donate COVID-19 vaccines to UN peacekeepers. We will continue working with all sides to strengthen cooperation in such areas as vaccines, prevention and control, foster a global community of health for all, and to secure the final victory of the global fight against COVID-19.
7. New poll says US favorable views of China at record low
Americans' favorable ratings of China have plummeted to a record low 20%, following a 13-percentage point drop in favorability from 33% a year ago. This comes on the heels of last year's eight-point decline, measured after the coronavirus first spread in China but before it became a worldwide pandemic...
Last year's 33% favorability tied readings in 1997 and 2000 as the lowest in Gallup's trend dating back to 1979. It was also in line with a 34% favorable rating in August 1989 following the Chinese government's crackdown on protestors in Tiananmen Square.
8. More on foreign journalists and China
ZDF: There is the FCCC report talking about the decline of media freedom of international journalists. How do you respond to that? For example, when we talk about the Beijing Winter Olympic Games where there will be a lot of international journalists coming to China, in which way can they get the possibility to report objectively and with the freedom of media?
Wang Wenbin: First of all, I would like to respond to the so-called report produced by this above-mentioned organization.
We've never recognized this organization you mentioned. This part of content you cited gives us a glimpse of how this so-called report, fraught with ideological biases and slanders against China, is set for fault-finding purposes. A self-styled "club of foreign correspondents in China", the FCCC can by no means speak on behalf of the nearly 500 foreign journalists in China, but only conveys the paranoid ideas of a handful of Western journalists..
This so-called organization has been biased, distorting facts and slandering China's media environment for a long time. We have also heard of its bad behavior elsewhere in the world. What I want to stress is that China is a country under the rule of law, where anyone must abide by Chinese laws. It is entirely China's internal affairs for relevant departments to handle relevant issues in accordance with law. No other country or organization has the right to interfere.
British Ambassador to China Caroline Wilson wrote an article posted on the WeChat account of the British Embassy to China on Tuesday saying that China has "bias" against foreign media. Chinese Foreign Ministry spokesperson Wang Wenbin said at a routine press conference on Tuesday that "the key to evaluating a media outlet is to see whether it can make fair and objective reports based on the professional ethics of journalism."...
Li Haidong, a professor at the Institute of International Relations of China Foreign Affairs University, told the Global Times that Wilson has only been ambassador since September 2020, so she might not have learnt how unwelcome some Western media outlets are in China, and she also mistakenly believes that some Western journalists are supervising the Chinese government, but in fact they are launching an ideological propaganda warfare against the Chinese political system and the country's mainstream values.
Caroline Wilson, UK ambassador to China, on Tuesday post an article in Putonghua (Chinese) on why international media criticism on Chinese authorities is not China hating. The article quoted my narratives on advocating China of accepting more diverse views. Yes, that's exactly what I said. Working for a media outlet, I can understand foreign correspondents' desire to have as much space as possible to engage in their coverage in China. But Wilson's rhetoric on freedom of the press is too simple, which conceals or even distorts the real relationship between media and reality...
Comment: The intensified attack on foreign media increasingly looks like a well-planned effort. Remember that the first MoFa press conference of 2021 included this:
The year 2021 will be of historic significance to China as we will celebrate the CPC's centenary. In the 1930s and 1940s, when the then Kuomintang government sealed off Yan'an and spared no efforts to "demonize" the CPC, foreign journalists like Americans Edgar Snow, Anna Louise Strong and Agnes Smedley, curious about who and what the CPC is, chose to blend in with the CPC members in Yan'an after going through various difficulties to get there, where they wrote many objective reports as well as works like the famous Red Star over China, giving the world its first glimpse of the CPC and its endeavor in uniting and leading the Chinese people in pursuing national independence and people's liberation. They were indeed a window for the world to understand the CPC and China. They will always be remembered by the Chinese people as our good and true friends.
We will celebrate the CPC's centenary and realize the first "centenary goal" in the year 2021, the first chapter of the Party's great cause and embark on the second "centenary goal" to build a new journey of fully building a modern socialist country. We sincerely hope that all of the foreign journalists will employ their pens and cameras to faithfully and objectively report on the CPC's state governance, the Chinese people's pursuit of their dreams and China's commitment to peaceful development. In promoting mutual understanding and cooperation, you will serve as the indispensable bridge and bond between China and the rest of the world.
As I noted in the January 4 Sinocism:
The PRC may want only pliant foreign journalists to better "tell China's story", but the information environment today is obviously a lot different than it was in the 1930s and 1940s. China is even more important now, across every dimension, so it is quite distressing to see the reversion to a much more constricted information and access. I think that is what Xi Jinping prefers, with the expectation that greater restrictions on foreign access buttress the CCP's "political security" and allow the Party-State to better pursue its goal of increasing China's international discourse power, aka "telling China's story well". So in some ways we are going back to the future, but now trying to understand a much more complicated country and society with increasingly narrow lenses.
Business, Economy and Trade
Biden's trade rep pick says she will fight Chinese trade barriers, including censorship | Reuters President Joe Biden’s U.S. trade representative nominee, Katherine Tai, said on Monday she would work to fight a range of “unfair” Chinese trade and economic practices and would seek to treat Chinese censorship as a trade barrier. In written answers to senators’ questions following her confirmation hearing last week, Tai said she would seek to use the enforcement consultation process in former President Donald Trump’s “Phase 1” trade deal with China to ensure the protection of American intellectual property.
China’s top court awards record US$24 million payout to chemical maker in trade secrets case | South China Morning Post On Friday, the Intellectual Property Court of the Supreme People’s Court ordered Zhejiang-based chemical producer Wanglong Technology to pay damages to Zhonghua Chemical, another producer in the province, for stealing its trade secrets related to vanillin, a flavouring agent used in food and beverages.
China beats US in patent filings for second straight year - Nikkei Asia Chinese applicants submitted 68,720 patent requests last year, up 16% from 2019 despite the coronavirus pandemic, according to data from the World Intellectual Property Organization (WIPO). China's Huawei Technologies, the world's leading telecommunications equipment manufacturer, remained the top applicant for the fourth straight year. The U.S. remained in second place, with filings inching up 3% to 59,230
Yicai - China’s Local Government Bond Sales Drop 87% in February China issued local government bonds worth CNY55.7 billion (USD8.6 billion) last month, a decrease of about 87 percent from the previous year and down about 85 percent from January, Wind data shows. The main reason for the decline is that this year’s local government bond quota has not been released in advance and the bonds sold last month were all refinancing notes to repay old debts, according to industry insiders.
Yicai - China Mulls Delaying Retirement as People Live Longer, Working-Age Population Shrinks Such a move will allow better use of human resources and make the social security system more sustainable, said Deputy Minister of Human Resources and Social Security You Jun. Current retirement ages in China are 60 years for men, 55 years for woman civil servants and white-collar workers and 50 years for woman blue-collar workers, whereas in most major economies, it is over 65 years. // Comment" They have been "mulling" it for years, lots of resistance, not clear they have done the public opinion work to allow it to be changed at this year's NPC
Chinese Developer’s $4.6 Billion in Offshore Debt Is in Doubt After Default - WSJ $$ China Fortune Land didn’t repay holders of a $530 million note due Sunday, prompting Fitch Ratings to downgrade it to a “restricted default” rating Tuesday morning Hong Kong time. The company has $9.8 billion of bonds outstanding, including $4.6 billion of offshore bonds, according to a February note from credit analysts at Goldman Sachs.
Politics and Law
重庆市公安局四任局长被查！市委书记：吸取教训，重塑形象_腾讯新闻 Chongqing Party secretary Chen Min-er chair meeting to address shortfalls identified by the CCDI inspection team around removing any remaining influences of Sun Zhengcai, Bo Xilai and Wang Lijun and to learn from the case of Deng Huilin
已有20个省级“一把手”挂帅教育整顿！驻点指导组整装待发-中国长安网 The full rectification campaign in the politics and legal affairs system kicked off February 27 // 2月27日，全国政法队伍教育整顿动员部署会议正式召开，一场政法队伍刀刃向内的自我革命在全国范围内展开，剑指政法工作顽瘴痼疾、政法队伍害群之马。
17 countries' publishing houses to translate, publish Xi's book on governance - Xinhua Publishing houses from 17 countries have partnered with Beijing-based Foreign Languages Press, the publisher of the third volume of "Xi Jinping: The Governance of China," for translating the book into different languages for publication. The countries are Albania, Poland, Romania, Belarus, Ukraine, Afghanistan, Cambodia, Nepal, Laos, Bangladesh, Thailand, India, Pakistan, Sri Lanka, Tajikistan, Kyrgyzstan and Mongolia
China’s devolved lawmaking put on notice as Xi Jinping signals tighter control | South China Morning Post “Upholding the integrity of national laws is a serious political problem. Our country is a unitary state,” Xi said in an internal speech last November that was published on Monday by the Communist Party’s flagship magazine Qiushi. Xi’s comments indicated that after several years of decentralising legislative power, he intends to centralise it again having been dissatisfied with a lack of unity in lawmaking, as Beijing seeks to tighten control over local policy in almost all areas.
Not-So-Hidden Dragon: China Reveals Its Claws in Central Asian Security - Carnegie Moscow Center - Carnegie Endowment for International Peace Beijing’s rise as a security actor in Central Asia is not aimed at displacing Russia from its perceived sphere of influence in some contemporary replay of the Great Game, but rather at guaranteeing Chinese interests. In many ways, it’s not a surprising move: what country is not interested in securing its own interests? It is, however, a change in China’s external behavior, which has traditionally been to pay lip service to local autonomy and Chinese non-interference. China is getting involved, and stepping ever further into the breach.
中央广播电视总台2021年党的建设工作会议召开--党建-中国共产党新闻网 The 2021 Party Construction Work Conference of the China Media Group is held
人事观察|“70后”中远海运副总经理张为升任上海副市长_政经频道_财新网 47 year old Zhang Wei moves from deputy manager of COSCO shipping Lines to become a vice mayor of Shanghai
任北京祥龙董事长不足三个月 北控集团原总经理侯子波主动投案_政经频道_财新网 Former CEO of Beijing Enterprises Group Company Limited Hou Zibo is under investigation
毛泽东女婿王景清逝世_腾讯新闻 Wang Jingqing, married to Mao Zedong's daughter Li Na since 1983, has died at 94. 3月2日，“政事儿”从王景清友人处获悉，毛泽东女婿、李讷丈夫王景清，于3月1日早上6点58分因病医治无效逝世，享年94岁。遗体告别仪式将于3月3日上午在北京八宝山举行。
Two Sessions 2021: Dozen Disgraced Lawmakers Will Miss Legislative Meeting - Caixin A dozen Chinese lawmakers will not be present at the national legislature’s annual meeting in Beijing this week, having become ensnared in corruption scandals since the last session in May 2020. A further four lawmakers have died in office since last year’s gatherings
David Ownby, "What Has Xi Jinping Wrought?" - Reading the China Dream At the same time, the point of Ren [Jiantao]'s work in 2020 is not primarily to sing the praises of China or of Xi Jinping (whose name does not appear). Ren’s chief preoccupation in 2020 is artificial intelligence and the effects AI-driven technology will have on social control, the centrality of human beings to politics, and good governance. The three lengthy essays Ren devoted to these subjects are highly abstract, both because Ren uses political theory to discuss the topic, and because many of his concerns are about future AI effects which are by definition abstract, because they have not yet occurred. The texts are also quite neutral, which befits a discussion of abstractions (all of these texts are summarized below; click here for a full translation for Ren’s article on good governance).
Foreign and Defense Affairs
Xi Jinping Speaks with Tajik President Emomali Rahmon on the Phone Xi Jinping pointed out that since last year, the Chinese and Tajik people, in the face of the COVID-19 pandemic and major changes unseen in a century, have stuck together through thick and thin, joined hands in unity and coordination, and achieved fruitful cooperation in various fields, especially in battling the pandemic. The two sides have supported each other on issues involving each other's core interests, which fully reflects the high level of the China-Tajikistan comprehensive strategic partnership. China firmly supports Tajikistan in safeguarding its national sovereignty, security and stability, and is willing to strengthen the alignment of the Belt and Road Initiative (BRI) with Tajikistan's National Development Strategy for the Period up to 2030, so as to promote the continuous development of China-Tajikistan relations
Coronavirus: Xi Jinping offers Poland access to China’s vaccines and a bigger market for farm goods | South China Morning Post On Monday, Xi told Duda that China would import more “good quality agricultural products” from Poland by establishing mechanisms under the 17+1 grouping, adding that the landmark Comprehensive Agreement on Investment (CAI) agreed between China and the 27-member European Union in late December could also “open up a wider space for China-Poland cooperation”.
Exclusive: Scientists at top British universities worked with Chinese nuclear weapons researchers Scientists at Britain’s leading universities – including Cambridge, Edinburgh and Manchester – have worked on a string of projects with researchers at China’s nuclear weapons research institution, The Telegraph can reveal. The Telegraph found that British academics have published dozens of papers alongside scientists employed by a Chinese institution that is on a US sanctions list due to its research into developing Beijing’s nuclear arsenal...The UK scientists involved in these projects argue that they are purely focused on basic science or its civilian applications, but others argue the line is not always so clear cut.
GT investigates: Is Human Rights Watch an impartial NGO or a US post-Cold War zombie? - Global Times Anti-China media outlets and certain NGOs are colluding with secessionist forces to foment a "rumor mill" against China. Within this enormous "mill," some NGOs claiming to be independent organizations often serve as "research institutes" to manufacture and spread rumors, with their so-called research findings being amplified in some Western media outlets. The Human Rights Watch (HRW), an organization that originated in the period during the Cold War, is one typical example. Recently, HRW released the World Report 2021 in which it fabricated hackneyed rumors related to China's Hong Kong Special Administrative Region (HKSAR) and Xinjiang Uygur Autonomous Region. While HRW claimed to be "independent," Global Times reporters found its fund to be far from "independent" as it claims. In the past decades, though it brandishes buzzwords like "human rights," everything from its undisclosed funding sources, to its code of conduct, all have highlighted a strong ideological stance, which has turned slogans such as "just" and "independence" it perpetually uses in its advocacy work a laughing stock.
China Task Force Begins Work; DOD Makes Progress on COVID-19 > U.S. DEPARTMENT OF DEFENSE > Defense Department News The task force will finish in about four months. At the end, DOD officials want to provide Austin with specific and actionable recommendations and milestones to meet the China challenge. Over the years, there have been many initiatives that addressed growing Chinese provocations in many areas. The secretary wants an assessment of the best ways to defend the international, rules-based order that has kept great power peace since the end of World War II.
PLA commissions upgraded destroyer, naval drills show - Global Times The PLA Northern Theater Command Navy recently organized eight new-type warships to conduct exercises in the Yellow Sea, with the goal of enhancing the naval officers' emergency commanding capability and the crew members' technical competence, China National Radio (CNR) reported on Monday. The drills featured comprehensive attack and defense training and lasted five days, the report said.
权威发布丨全军党史学习教育动员大会在京召开 - 中国军网 "The mobilization meeting of the whole army's party history study and education was held in Beijing"
CDC expert proposes China, US mutual vaccine recognition, lifting of travel restrictions - Global Times The chief epidemiologist of the Chinese Center for Disease Control and Prevention (CDC) Wu Zunyou proposed that China and the US should work jointly to lift mutual travel restrictions in August or September when the US is expected to reach herd immunity, suggesting the two countries seek mutual recognition of vaccinations and give priority to official, business travel and overseas study.
China-Russia ties: ‘no plans for military alliance’ to take on US | South China Morning Post China has no plans to forge a military alliance with Russia, the defence ministry said on Monday, responding to speculation that Beijing and Moscow could develop a united front against Nato. “China-Russia military relations are ... an important supporting force in strategic cooperation between the two countries,” the ministry said. “The two sides adhere to the principle of non-alignment, non-confrontation and non-targeting of third countries, which differs completely from the military alliance between some countries.”
In Indo-Pacific, US eyes 'agile' posture to dodge Chinese missiles - Nikkei Asia A Pentagon task force on China policy held its first meeting Monday and aims to submit recommendations to Secretary Austin by mid-June. The dispersal strategy, cooperation with allies and partners, and accelerated missile development will likely make the list.
China says door to Xinjiang 'always open', but U.N. rights boss should not prejudge | Reuters “The door to Xinjiang is always open, and we welcome the High Commissioner to visit Xinjiang. Communication is kept up between the two sides, but the aim of the visit is to provide exchanges and cooperation rather than ... so-called investigation based on ‘guilty before proven’,” China’s delegate Jiang Duan told the U.N. Human Rights Council.
The new characteristics of centennial changes lie in three profound changes:..
One is deep changes in the global power equilibrium, reflected mainly in the steady increase in the strength of developing countries like China, as well as worsening domestic contradictions and a relative decrease in the strength of Western countries like the United States.
The U.S. is largely responsible for an increase in geopolitical conflict and estrangement between civilizations.
Another relates to traditional security threats in such forms as military conflict, war and use of force. These are interwoven with such nontraditional security threats such as climate change and the spread of the coronavirus across borders. These are unprecedented global challenges.
A third is the scientific and technological revolution, which is entering a new period of leapfrog development. The shocks to the world’s politics, economy and culture have never been seen before. Technology is radically changing the way humans live and produce. A brand new world is on the horizon...
The global geopolitical environment will continue to change profoundly. It will become more complicated and sensitive. The global balance of power and world order will continue to tilt in favor of China, and China’s development will become unstoppable.
The U.S., meanwhile — plagued by such long-standing domestic problems as a widening wealth gap, inequality, conflict between capital and labor, and identity politics that have hijacked its political discourse — will find that its strength increasingly falls short of its ambitions, both domestically and internationally. The same goes for other major Western countries. This is the grand trend of history, which will last for some time.
Ecuador’s exporters caught between US and China after debt deal | Financial Times $$ The agreement, signed by the US International Development Finance Corporation (DFC) and the Ecuadorean government just days before Donald Trump left office in January, envisages the US buying oil and infrastructure assets in Ecuador on the understanding Quito uses the proceeds to pay off its debt to China. It also obliges Ecuador to sign up to what the Trump administration called the “Clean Network” — a state department initiative designed to ensure that nations exclude Chinese telecoms services and equipment providers as they build out their high-speed 5G mobile networks.
Borrell: EU doesn’t have resources to fight disinformation from China – POLITICO The European Union's foreign service doesn't have the resources nor the authority to effectively counter hybrid attacks coming from China, its foreign affairs chief Josep Borrell said today. "Today, we don't have a mandate to study disinformation about China," Borrell, who heads the European External Action Service (EEAS), told members of the European Parliament's Special Committee on Foreign Interference. He said the bloc had been under permanent pressure in the past year from countries distorting information and spreading disinformation to advance political interests. But while the EU has ramped up its work to debunk disinformation campaigns from Moscow, "We have very little resources to study disinformation from China." He added that EEAS lacked the "required" resources to counter Chinese campaigns to influence European politics.
人工智能如何影响舆论战-中新网 PLA Daily - How does artificial intelligence affect public opinion war At present, the public opinion war is transitioning from the pure artificial stage to the artificial intelligence stage. The public opinion war in the era of artificial intelligence has a prominent feature: the audience's information can be intelligently collected and analyzed through machines, and various information data of public opinion opponents can also be obtained through network detection and deep data analysis; The real-time data of the public opinion war can be monitored and analyzed at the same time, and the dynamic data of each stage and even the data of the whole network domain and the whole process can be accurately analyzed, judged and even predicted. Therefore, the public opinion war will change from the original misty fuzzy situation to a new state in which the previous judgment is relatively accurate, the process tracking is relatively accurate, the response measures are relatively reasonable and the effectiveness evaluation is relatively scientific. With the enhancement of computer modeling ability, simulation ability and deduction ability, the progress of artificial intelligence technology will also involve political, economic, social, cultural, military, diplomatic and other fields. In the future, intelligent public opinion warfare based on global warfare and multi-domain warfare will become the norm. // 当前，舆论战正在从纯人工阶段向着人工智能阶段过渡。人工智能时代的舆论战有一个突出的特点：受众的信息可以通过机器进行智能收集和分析，舆论战对手的各种信息数据也可以通过网络侦测获取并开展深层的数据分析；舆论战的实时数据可以同时被监测和分析获得，各阶段的动态数据乃至全网域、全过程的数据也能做到精确分析和精确研判，甚至做到精确预测。因此，舆论战会从原来迷雾般的模糊态势，变成前期研判相对准确、过程跟踪相对精确、应对措施相对合理、效能评估相对科学的新状态。随着计算机建模能力、仿真能力和推演能力的增强，人工智能技术进步也将涉及政治、经济、社会、文化、军事、外交等多领域，未来基于全域战多域战的智能舆论战将会成为常态。
Hong Kong and Macao
Hong Kong authorities looking into death of chronically ill man two days after receiving Sinovac Covid-19 vaccine | South China Morning Post Hong Kong health authorities on Tuesday night revealed that they were investigating the death of a chronically ill man two days after he received China’s Sinovac Covid-19 vaccine, but cautioned that no connection had been ascertained yet
Exclusive: Two rights groups quit Hong Kong as security law sends shudders through NGOs | Reuters The New School for Democracy moved to Taiwan in September, two months after Beijing imposed the contentious security law on its freest city. Founded by Wang Dan, an exiled student leader of the crushed 1989 Tiananmen Square protests, the group focuses on bringing together activists from mainland China, Taiwan and Hong Kong in order to promote democracy in Chinese society...Global Innovation Hub, a unit of the Friedrich Naumann Foundation, a German think-tank that was expelled from China in 1997, also moved to Taiwan in September
Taiwan opposition chief in no rush for China meeting | Reuters Johnny Chiang, elected as leader following the party’s defeat, told Reuters that he was in no hurry to follow his predecessors footsteps and visit Beijing to meet old adversary the Communist Party, and its leader Xi. “We can wait, for a better timing. There’s no insistence for it. It’s not just a meeting for a meetings sake, but it needs to be meaningful, respectful,” he said at party headquarters in central Taipei, adding the pandemic also made travel hard now.
Tech and Media
China’s TikTok Is Banning Users Who Brag About Their Wealth - SixthTone In a notice Friday, Douyin — as the enormously popular short-video app is branded in China — said six kinds of content including “flaunting wealth” are now banned on the platform because they promote “unhealthy values.” The content prohibitions follow the introduction of livestreaming regulations that highlighted wealth-flaunting as an issue last year, as well as the government’s recent call to spread more “positive energy” online. The six similar categories identified by Douyin also include promoting money-worship, using minors in videos related to luxury products, and “showing off one’s social status in an inappropriate way,” which includes “making fun of the poor.”
Chinese Tesla rival Nio to double R&D spending to $770m - Nikkei Asia The U.S.-listed company revealed at an earnings teleconference Tuesday that it will spend around 5 billion yuan ($772 million) this year through December, which is also its fiscal year. Nio had announced in January that it would commercialize by the last quarter of 2022 its latest battery which, when fully charged, has a range of over 1,000 kilometers. The company is likely to use its R&D budget on developing related technologies.
Four Things to Know About China’s $18.5 Billion Failed Chip Champ - Caixin Wuhan Hongxin Semiconductor Manufacturing Co. Ltd. (HSMC), an $18.5 billion project backed by Central China’s Hubei province, started dismissing employees as hopes for a resumption of business faded after more than a year of struggles for survival...HSMC sent notices to all of its workers asking them to submit resignations before Feb. 28 and complete all procedures by March 5, Caixin learned Friday. The company said “there is no plan for production resumption.”..one of the project’s biggest Achilles’ heels was its inability to make it onto the national radar due to its failure to complete land acquisition, environmental impact reports and other necessary steps for the planned second phase, meaning it would be qualified for state funding. The issues will also make it difficult to attract private investors.
Society, Arts, Sports, Culture and History
The rich vs the very very rich: the Wentworth golf club rebellion | Golf | The Guardian Like all exiles, Michael Fleming remembers when his separation from home soil began: 20 October 2015, a Tuesday. That year, Fleming was captain of Wentworth, an old, prestigious golf club in north-west Surrey. The club had recently been bought by a Chinese firm, Reignwood Consulting Ltd, and an annual general meeting was scheduled for the 20th. On that morning, having already drafted his speech, Fleming was in his dentistry clinic when he received the email. Brace for change, Wentworth wrote to Fleming and his colleagues, outlining its planned announcements at the AGM: a wild increase in membership fees and the number of members drained from about 4,000 to just a few hundred.
Energy, Environment, Science and Health
World's largest planetarium to begin trial operations in Shanghai - Xinhua The Shanghai Planetarium, a branch of the Shanghai Science and Technology Museum, is scheduled to begin trial operations in June, local authorities have said. Located in the Pudong New Area, the planetarium boasts a total floor area of over 38,000 square meters. It is expected to become the world's largest planetarium in terms of floor area.
China cuts "carbon intensity" 18.8% in past five years, in effort to rein in emissions | Reuters The decline in “carbon intensity” - the amount of carbon dioxide emissions the country produces per unit of GDP - beat the official target for an 18% reduction. During the five-year period, China’s GDP increased to 101.6 trillion yuan ($15.71 trillion), from 68.9 trillion yuan in 2015.
Anal swab causing 'psychological pain'? Experts suggest submitting fecal samples instead to reduce embarrassment - Global Times The Global Times learned that several Chinese cities, such as Beijing, Shanghai and Qingdao in East China's Shandong Province are requiring certain international arrivals to take anal swab tests before completing quarantine periods, as health experts believe the method is more accurate than nasal and throat swabs. Some experts even suggested that people under quarantine can submit stool samples instead, so as to reduce the discomfort during the sampling process. An employee of the Shanghai CDC told the Global Times on Tuesday that Shanghai asks certain overseas travelers to undergo anal swab testing. For example, travelers on a plane where more than five people test positive for the coronavirus have to undertake a full set of tests, including anal swabs, nasal/throat swab tests, and tests of blood and phlegm
5 killed in east China as rainmaking plane crashes into farmhouse | South China Morning Post Three farmhouses were damaged and a villager was injured when the Beechcraft B300 King Air 350 twin-turboprop operated by Beidahuang General Aviation crashed in Jian county, Jiangxi at 3.19pm, the provincial meteorological bureau said in a statement.
After 12 Years, China’s Oldest Ultra-High-Voltage Power Line Can Finally Meet Its Potential - Caixin The UHV line connecting southeastern Shanxi province with the city of Jingmen in Central China’s Hubei province has been in operation for 12 years, but only now will start getting the necessary supply that can take advantage of its large capacity. Up until now the line was supplied by a smaller power generator with about two-thirds the generation capacity of the new Changzhi project, resulting in a low utilization rate over that time.
WHO investigators deeply sceptical of China’s Covid origin theory | Financial Times $$ Vladimir Dedkov from the Pasteur Institute in St Petersburg, Russia, and Fabian Leendertz, an emerging diseases specialist at Germany’s Robert Koch Institute, both told the Financial Times that it was extremely unlikely the first cases of Sars-Cov-2 identified in Wuhan in 2019 entered the city on frozen or refrigerated goods. The two were part of the WHO team that travelled to Wuhan in January to investigate the origins of the pandemic. But in the press conference that concluded the visit last month, the WHO did not rule out the theory, which has been pushed hard by China’s government and state media.
Rural and Agricultural Issues
Premier Li stresses preparation for spring farming - Xinhua Concerning food security, Li said policies supporting grain production should be strengthened and farmers and local governments should be mobilized to ensure that the grain output stays above 650 billion kg this year. He also emphasized fostering the country's seed industry, constructing high-standard farmlands and securing the "red line" of 1.8 billion mu (120 million hectares) of arable land