Hong Kong; Lujiazui Finance Forum; Social credit system for business
No commentary today, late for a lunch. Apologies, will make it up to you.
Thanks for reading.
The Essential Eight
1. Hong Kong
Hong Kong Protest: Organizers Call for Extradition March Sunday - Bloomberg
Organizers called for people to demonstrate Sunday amid growing public concern over the current version of a controversial extradition law. One of Hong Kong’s top business groups called on Carrie Lam’s administration to “engage in meaningful dialogue with the public,” saying the mass protests show the city is wary about the bill.
Lawmakers scrapped debate for a second straight day on legislation that would allow extraditions to China, as tensions remained high between police and protesters after violent clashes on Wednesday
Hong Kong Protests Live Updates: Police Violence Puts Government on Defensive - The New York Times
Almost all the protesters dispersed overnight, and an uneasy and perhaps temporary calm returned to the streets of Hong Kong on Thursday. The government closed its main offices and security remained tight around the Legislative Council Complex. As thunderstorms rolled across the city, trash crews cleared away surgical masks, water bottles and other debris from the clashes.
Lo said the protests were organised, describing them as a “riot.” He added that around 150 tear gas canisters, “several” rounds of rubber bullets, and 20 beanbag shots were fired during the protest clearance. In comparison, 87 rounds of tear gas canisters were used during the 2014 Umbrella Movement protests.
Eleven people were arrested for crimes in relation to disorderly conduct in public, unlawful assembly, assaulting police officers, and riot-related offences. He said 22 police officers were injured.
2019年6月13日外交部发言人耿爽主持例行记者会 — 中华人民共和国外交部
No signs of backing down: PRC foreign ministry said the protests are riots, and Beijing will support the HK government in enforcing law
答：香港特区行政长官和有关官员已就最近的事态发表了谈话，指出香港金钟一带发生的情况不是和平集会，而是公然、有组织地发动暴动。任何损害香港繁荣稳定的行为，都是香港主流民意所反对的。任何文明、法治社会都不会容忍破坏和平安宁、罔顾法纪的违法行为。中国中央政府强烈谴责各类暴力行为，我们支持香港特区政府依法予以处置。
A Digital Cat-and-Mouse Battle Between Police and Protesters in Hong Kong - The New York Times
A network of computers in China bombarded Telegram, a secure messaging app used by many of the protesters, with a huge volume of traffic that disrupted service. The app’s founder, Pavel Durov, said the attack coincided with the Hong Kong protests, a phenomenon that Telegram had seen before.
“This case was not an exception,” he wrote.
The Hong Kong police made their own move to limit digital communications. On Tuesday night, as demonstrators gathered near Hong Kong’s legislative building, the authorities arrested the administrator of a Telegram chat group with 20,000 members, even though he was at his home miles from the protest site.
Why Hong Kong’s protesters are braving tear gas and rubber bullets - Chaguan
Hong Kong’s chief executive, Carrie Lam, appointed by a panel of local loyalists of the Communist Party in Beijing, talks of “plugging a loophole” with the bill...
In fact, there was no omission, says Margaret Ng, a barrister who represented the legal profession in Hong Kong’s legislature from 1995 to 2012, under first British then Chinese rule. When drafting an extradition law before the handover in 1997 officials took a deliberate decision to maintain a firewall between Hong Kong’s justice system and that of the mainland, “to protect the rule of law in Hong Kong and confidence in Hong Kong as an international hub free from China’s much mistrusted system.”
In Battle for Hong Kong, the Field Has Tilted Toward Beijing - The New York Times
Beijing’s supporters now hold a larger majority in Hong Kong’s Legislative Council — 43 of 70 seats — than they did in 2003. Their camp now consists mostly of professional politicians, rather than the patrician tycoons who once dominated the legislature. The tycoons had showed more independence, even if they generally sided with the government against the pro-democracy opposition...
But that is much less likely to happen with the class of lawmakers in office now. Some are far less affluent and more dependent on their $151,600 government salaries and generous expense accounts.
香港主流民意支持特区修订《逃犯条例》 避免香港成“逃犯天堂”--港澳--人民网
Xinhua claims that 900,000 HK residents signed petition to support the rendition law, and citing Hong Kong police, it said the protesters attacked the police, and that they will “resolutely enforce the law” to restore social order.
Trump confident Hong Kong and China will 'work things out' after protests - Reuters
U.S. Representative James McGovern, a Democrat, told Reuters he and Republican co-sponsors planned to put forward legislation on Wednesday or Thursday that would likely raise the standard for determining whether Hong Kong was sufficiently autonomous to receive special treatment from the United States on trade and economics.
McGovern said Trump should have made a stronger statement.
Hong Kong Interbank Rates Hit Highest Since 2008 - WSJ $$
The rates at which Hong Kong’s banks lend to one another surged to levels last seen during the global financial crisis, but economists said seasonal swings in cash demands likely played a bigger role in the move than political unrest in the city.
One-month interbank borrowing costs rose nearly 0.21 percentage point on Thursday to more than 2.63%, the highest in more than a decade. The three-month Hong Kong interbank offered rate also hit its highest since 2008. The more volatile overnight Hibor advanced by nearly half to 2.33%.
Hong Kong's Financial Elite Grow Uneasy as China Tensions Rise - Bloomberg
“Hong Kong feels like it’s becoming more radicalized,” said one hedge fund executive who walked through tear gas on his commute home on Wednesday. “I would expect these bouts of violence to continue to be there over the next decade, if not to get even stronger.”
2. US-China
Trump says he expects to meet China’s Xi this month | Financial Times $$
“We’re going to be meeting, President Xi and myself. And you know we have a very good relationship,” Mr Trump said at a briefing with Polish president Andrzej Duda. “We will end up making a deal with China. We have a very good relationship, although it’s a little bit testy right now . . . I think they really have to make a deal.”
Mr Trump repeated his threat to put tariffs on the $325bn in imports from China not yet subject to US levies if the Chinese government did not agree to a deal that would end the trade war between the two countries. But Mr Trump refused to say when he would decide on imposing tariffs if China did not strike a deal.
Axios Markets - CEOs dig in for prolonged trade friction
The executives said at a Business Roundtable event Wednesday that conflict with China is prompting decisions with long-term consequences — like how to shift supply chains — and the effects may show up in the economy, as companies rein in plans for spending and hiring...
The CEOs are not looking to the G20 Summit in Japan in late June as a watershed moment.
"I don't think anyone expects [a deal with China] by June 29," when Trump and Chinese President Xi Jinping are set to meet at the gathering of the world's leaders, Dimon says.
"We don't see the G20 as any kind of milestone other than, of course, I hope the two meet and talk and keep their relationship open," Linebarger says.
Xi Has Few Good Options After Trump’s Ultimatum on G-20 Meeting - Bloomberg
“Whether they meet or not, none of the possible scenarios are good for President Xi or the economy in the long run,” said Zhang Jian, an associate professor at Peking University. “You don’t have a good choice which can meet the needs of the Chinese economy or Mr. Xi’s political calculations.”...
“You can hardly blame anyone else for the conflict between China and the United States -- he is the ultimate decision-maker,” said Zhang from Peking University. “Remember that we believe he wants a third or fourth term. If in 2020 you see the Chinese economy suffer, then his road to a third term looks less rosy.”
Comment: I would not bet on the US-China tensions preventing Xi from staying around for a third term. I will bet the odds are better that Xi can leverage the increasingly adversarial relationship into even more political strength. It is not like if Xi is gone but the CCP remains then suddenly the US and China will get along…
China will fight to end if U.S. keeps escalating trade frictions: MOC - Xinhua
"China's stance on trade war has been consistent and clear. We do not want, but is not afraid of a trade war.
The United States has taken a practice of maximum pressure and continuously escalated trade frictions, causing serious setbacks in the China-U.S. trade talks, according to Gao. "The United States is entirely to blame."
"China's attitude is very clear. The United States must change its attitude, show sincerity and correct its wrong practices if it wants the talks to continue," Gao said.
“解铃还须系铃人。中方态度十分明确，如果美方想继续谈判，就必须端正态度、拿出诚意，纠正错误做法。”高峰说
Gao Feng: "Let him who tied the bell on the tiger take it off. The Chinese attitude is very clear. If the US wants to continue negotiations, it must correct its attitude, show sincerity, and correct wrong practices."
Trump Has Gotten China to Lower Its Tariffs. Just Toward Everyone Else. | PIIE
While Trump shows other countries nothing but his tariff stick, China has been offering carrots. Beijing has repeatedly cut its duties on imports from America’s commercial rivals, including Canada, Japan, and Germany.
Trump’s provocations and China’s two-pronged response mean American companies and workers now are at a considerable cost disadvantage relative to both Chinese firms and firms in third countries. The result is one more eerie parallel to the conditions US exporters faced in the 1930s.
Another important implication of China’s action is that Americans are likely suffering more than President Trump thinks due to his trade war.
Another attack on the US in People’s Daily by the mysterious author 史往生, who wrote that the US is creating the world’s largest arsenal of cyber weapons, which is a major threat to the world.
People's Daily Overseas Edition wechat account says China has not yes used its rare earths "trump card" and the US is already panicking...
But nothing in the June 13 People’s Daily from Zhong Sheng about the US, and no CCTV Evening News Commentary. Even propaganda organs need a rest?
China’s infiltration of U.S. capital markets is a national security concern - The Washington Post
“We can no longer allow China’s authoritarian government to reap the rewards of American and international capital markets while Chinese companies avoid financial disclosure and basic transparency, and place U.S. investors and pensioners at risk,” Sen. Marco Rubio (R-Fla.) told me. “Firms like MSCI have an obligation to make sure investors know whether their investment dollars are unwittingly aiding Chinese state-owned and state-directed companies.”
Rubio sent a letter Wednesday to MSCI demanding that the index provider give Congress information on its decision to invest in several Chinese firms and increase the weighting of Chinese company shares in its indexes.
Ramping up rhetoric and punishing American firms is no way to end the year-long conflict, according to Peking University scholar Wang Jisi
Beijing should promote the positives of bilateral relations to prevent them ‘plunging into the dark hole of long-term confrontation’..
“China should step up cooperation with nations, including the US, on economic, trade and technology issues,” he said in a commentary published by the Communist Party’s Global Times newspaper.
Wang's commentary 王缉思：如何判断美国对华政策的转变
必须清醒地看到，在可预见的将来，美国对华政策的质变已成定局，难以出现逆转。这一转变让我们在纷繁复杂的现象中更清晰地透视中美关系的实质。一方面，对于美国政府加剧对抗的行为，以及偶发事件可能引起的局部冲突，中方都必须未雨绸缪，在精神上和物质上做好充分准备，严阵以待。另一方面，通过首脑外交、高级别官方磋商、不同层次和不同领域的沟通，可以利用美国政策尚存的某种弹性，延缓部分压力，使“斗而不破”的局面持续下去。
从战略上看，稳定中美关系、缓解经贸争端的根本保证是什么？笔者认为，这应该是全力推进国内改革开放，实现中国经济的高质量发展，满足人民对美好生活的向往。(作者是北京大学国际关系学院教授)
[Google translate] It must be soberly seen that in the foreseeable future, the qualitative change of the US policy toward China is a foregone conclusion and it is difficult to reverse. This transformation allows us to more clearly see the essence of Sino-US relations in the complicated phenomenon. On the one hand, for the behavior of the US government to intensify confrontation and the local conflicts that may arise from incidents, China must prepare for it in a mentally and materially and be prepared. On the other hand, through summit diplomacy, high-level official consultations, and communication at different levels and in different fields, it is possible to take advantage of some of the resilience of US policy, delay some of the pressure, and continue the situation of “do not break”.
From a strategic point of view, what is the fundamental guarantee for stabilizing Sino-US relations and alleviating economic and trade disputes? The author believes that this should be to fully promote domestic reform and opening up, realize the high-quality development of the Chinese economy, and satisfy the people's yearning for a better life. (The author is a professor at the School of International Studies, Peking University)
Outlook for quick solution to US-China trade war is grim: Chinese experts - Global Times
At a panel discussion at the prestigious Tsinghua University Thursday, a dozen prominent experts painted a grim outlook for the two superpowers to resolve their tensions because the trade issues have expanded to cover technology rivalry and issues of broader strategic implications.
"We cannot be too optimistic about [the trade negotiations] because being overly optimistic in dealing with those people who have no (moral) bottom line will be a disaster," Wu Xiaoqiu, vice president of Renmin University of China, told the panel hosted by Tsinghua's Academic Center for Chinese Economic Practice and Thinking (ACEPT).
Wu said that he and many others in China were looking forward to the two sides eventually resolving their trade spat through negotiations, but recent developments have increasingly shown that the trade war is a part of the US broader strategy of containing China.
International rules are not a puppet in the hands of US politicians - People's Daily - Zhong Sheng
When rules are lucrative, the US exploits them; when rules are unfavorable, the US breaks them. The practices of the US politicians using whatever that suits their interests and abandoning whatever that does not indeed originated from supremacy and hegemony.
However, today’s world is not a place for pure muscle competition any longer. Those who challenge rules with power and try to crush order like play dough are bound to be rejected by the world and end up in an isolated situation with destroyed image and no good result.
US has to pay for tariff hikes - People's Daily - Wu Yue He
However, the US politicians neither cared about the predicament of the American people, nor listened to any words of dissent. In response to media criticism, they said relevant media outlets are "retrogressive" or "untrustworthy".
They thought hegemony would "make America great again," but the reality is not fantasy or wishful thinking. These American politicians, who act against the laws of economics and turn a blind eye to the global development trend, will eventually pay a heavy price for their practices.
China seeks to roll July U.S. soybean cargoes to August: sources - Reuters
Chinese soybean buyers are asking sellers in the United States to delay cargoes due to be shipped in July until August, two sources familiar with the matter said, raising fears of cancellations like ones that roiled the market last year.
Is China Running Out of Retaliatory Ammunition in the Trade War? - MacroPolo
The following analysis fully breaks down the $110 billion worth of US goods that Beijing has taxed so far and looks into the $44 billion of additional US exports that could be the potential target of future retaliation.
Decoupling China-U.S. extremely dangerous, irresponsible: spokesperson - Xinhua
"We urge some Americans to reflect on their actions, abandon ideological stereotypes, and stop spreading prejudiced and old remarks," he said.
3. Lujiazui Finance Forum
He did not directly mention the US-China trade war in remarks at the Lujiazui financial forum on Thursday, but said there was ample room in China’s macroeconomic system to support growth and that recent moves by the government to cut taxes and government administrative fees were starting to have a positive impact on the economy.
“We do face some external pressure at the moment, but this is the inevitable test that China’s economic upgrade must experience,” Liu told the forum, which is an annual event organised by the Shanghai government and the People’s Bank of China. “The external pressure will help us improve innovation and self-development, speed up reform and opening up, and push forward with high quality growth.”
Tech Board Launches, With Trading Likely to Start Within Two Months
The high-tech board, now called the SSE STAR Market, was proposed by President Xi Jinping in November to improve the Chinese mainland’s appeal to technology companies and encourage them to list on the mainland instead of overseas...
A key change is the shift to a market-based registration system for new listings that aims to resolve shortcomings in the current lengthy, bureaucratic initial public offering (IPO) process that candidates face on other mainland boards, where listings can take months or even years...
Vice Premier Liu He also said at the forum that the new board’s most important function is to ensure “marketization” and “rule of law.” It is necessary to implement the registration-based system with sufficient information disclosure, and truly let the market decide, he said adding that cracking down on false accounting information would be crucial.
China Reduces High-Risk Financial Assets by Net $2 Trillion: Regulator - Caixin Global
Currently, there’s a deregulation trend around the world that allows shadow banking to regain momentum, which China should be highly vigilant about, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said at the Lujiazui Forum, an annual gathering of senior financial regulators, experts and market participants.
Besides, Guo said it’s necessary to face up the issue of the financialization of the real estate industry in some regions. In recent years, the leverage ratios of some cities’ household sectors have soared and a large proportion of households have seen their debt ratios grow to “unsustainable levels,” he said.
Liu He's speech at the forum - 刘鹤出席陆家嘴论坛开幕式暨上交所科创板开板仪式-新华网
Guo Shuqing's speech at the forum - 郭树清在第十一届陆家嘴论坛上的开幕致辞_热点聚焦_中国贸易金融网
4. "Staying true to our founding mission" campaign
China Focus: CPC thematic education campaign well underway - Xinhua
An education campaign themed "staying true to our founding mission" among all members of the Communist Party of China (CPC) has been carried out nationwide since it was launched on May 31...
So far, the thematic education has been launched in 31 provinces, autonomous regions and municipalities, 116 central and state organs and people's organizations as well as 68 centrally-administered enterprises.
On June 5, a training meeting of the central guiding groups was held in Beijing. And 34 of such groups have been dispatched to units carrying out thematic education.
The top-down campaign was launched as China marks the 70th anniversary of the founding of the People's Republic of China.
The thematic education will be conducted in two separate batches, especially targeting officials at and above the county level.
Senior Party publicity official highlights revolutionary tradition - Xinhua
A senior Party publicity official instructed east China's Jiangxi Province to promote awareness of revolutionary tradition during an inspection tour there from Monday to Thursday.
Efforts should be made to conserve revolutionary heritage sites in the province that used to be a cradle of the Chinese revolution, said Huang Kunming, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and head of the Publicity Department of the CPC Central Committee.
More programs should be introduced to raise the awareness of revolutionary tradition among the public, particularly young people, and consolidate their faith, he said.
黄坤明：高扬爱国主义旗帜 传承伟大革命精神 激发奋斗新时代的强大力量
鼓劲扬帆再出发（守初心 担使命 找差距 抓落实·深入开展“不忘初心、牢记使命”主题教育）--时政--人民网
First in new series of People's Daily columns on the campaign
5. Taiwan presidential race
Taiwan leader Tsai gets party nod to run for reelection - AP
She outperformed her opponent in three days of opinion polling, setting herself up to be named as the Democratic Progressive Party’s candidate in the January 2020 election.
Tsai’s tough stance against Chinese pressure to reunite with the mainland has driven up once-sagging approval ratings. Her nomination is all but sure to be ratified by the party next week...
“What Taiwanese feel most deeply about this is that ‘one-country, two systems’ is not viable and not acceptable for a democratic Taiwan,” Tsai told reporters Thursday afternoon after her secretary general met with Hong Kong students at the presidential office.
Taiwan President Tsai emphasizes solidarity after winning DPP primary | Taiwan News
In the opinion polls conducted June 10-12, Tsai received 35.68 percent and ex-Premier William Lai (賴清德) 27.48 percent, according to a DPP announcement Thursday noon. The president praised her challenger for his graciousness in defeat, having called on his supporters to back Tsai for a second term.
Earlier, on her Facebook page, the president said her aims had not changed throughout the primary campaign. She said that protecting democratic Taiwan, maintaining the results of reforms and strengthening national sovereignty were still the targets she would be putting all her effort into.
Taiwan President Tsai beats Han by 11%, Ko by 13% in public opinion poll | Taiwan News
The results of the Democratic Progressive Party's (DPP) primary poll released today (June 13), show that Taiwan President Tsai Ing-wen not only defeated her DPP opponent former premier William Lai (賴清德) by 8.2 percentage points, but also easily beat itinerant Kaohsiung Mayor and Kuomingtang (KMT) presidential candidate Han Kuo-yu (韓國瑜) and independent Taipei Mayor Ko Wen-je (柯文哲) by wide margins.
Why Taiwan is so outspoken on Hong Kong's extradition law — Quartz
T.C. Chang, a cultural commentator in Taipei who previously lived in Hong Kong, said that the extradition law debate in Hong Kong comes at a time when Taiwanese society is especially attuned to what’s happening across the strait that separates it from China. In addition, with presidential elections coming up in January, Taiwan’s relations are in the spotlight. Furthermore, the youth of both Taiwan and Hong Kong are connected by the fact that major student-led protests took place in both places in 2014.
“Since then, people have been repeating the slogan that ‘today Hong Kong, tomorrow Taiwan,” said Chang.
6. Decoupling in cancer research too?
The U.S. Is Purging Chinese Americans From Top Cancer Research - Bloomberg
The NIH and the FBI are targeting ethnic Chinese scientists, including U.S. citizens, searching for a cancer cure. Here’s the first account of what happened to Xifeng Wu...
In January, Wu, an award-winning epidemiologist and naturalized American citizen, quietly stepped down as director of the Center for Public Health and Translational Genomics at the University of Texas MD Anderson Cancer Center after a three-month investigation into her professional ties in China. Her resignation, and the departures in recent months of three other top Chinese American scientists from Houston-based MD Anderson, stem from a Trump administration drive to counter Chinese influence at U.S. research institutions...
Wu hasn’t been charged with stealing anyone’s ideas, but in effect she stood accused of secretly aiding and abetting cancer research in China, an un-American activity in today’s political climate. She’d spent 27 of her 56 years at MD Anderson. A month after resigning, she left her husband and two kids in the U.S. and took a job as dean of a school of public health in Shanghai...
To friends and many colleagues, Wu’s case represents overkill. There was no evidence, and no accusation, that she’d given China any proprietary information, whatever that term might mean in cancer epidemiology. She should have been given the chance to correct her disclosures without punishment, her supporters say.
People’s Daily just started a series of articles to praise Chinese scientists for their patriotism and their dedication to science. This coincides with the CCP document issued yesterday to support Chinese scientists and their work.
7. Social credit system for business
China to boost social credit system with new market regulatory measures - Xinhua
The Chinese government puts strong emphasis on the building of a social credit system. President Xi Jinping stressed the need to set it in an institutional framework, establish a cross-sector, inter-agency mechanism of reward and penalty for acts of good or bad faith, and promote the accessibility and sharing of credit information. Premier Li Keqiang urged improving the credit-based regulatory framework and applying an inter-agency approach in penalizing those acting in bad faith.
“Credit-based regulation is crucial for the sound workings of market institutions. In developing a socialist market economy, the government must reform its functions and foster an enabling business environment. While streamlining administration and delegating powers, we will enhance oversight where necessary. And credit-based regulation is the foundation of this endeavor,” Premier Li said.
It was agreed at the meeting that the country will establish, in accordance with the law, authoritative, unified and accessible credit records of all market players based on their unified social credit codes. Government departments are required to share the information as permitted by law to break information monopoly and information silo. No government agencies should repeatedly ask market players to provide the same information that can be shared.
李克强主持召开国务院常务会议 部署加快建设社会信用体系构建相适应的市场监管新机制等
Question: Will the recently announced unreliable entity list be connected to the corporate social credit system?
More names added to travel bans for bad behavior in China - Global Times
China banned 307 "discredited" people from taking trains in May, with 960 being restricted from taking planes, as part of an effort to build the country's social credit systems which officials vowed on Wednesday to accelerate.
At a meeting of the State Council, China's cabinet, chaired by Chinese Premier Li Keqiang on Wednesday, officials said the country will accelerate the construction of a social credit system and build new market supervision framework that matches the system. China's social credit system aims to improve citizens' behavior and restore social order.
China’s Social Credit System | Mercator Institute for China Studies 2017
Under the catchphrase “Social Credit System” China is in the process of implementing a new and highly ambitious scheme to monitor, rate, and regulate the behavior of both, Chinese citizens and companies. Although international discussion has focused mainly on the impact of the system on individuals, the core motivation behind the Social Credit System is to more effectively steer the behavior of market participants...
The Chinese scheme expands the use of credit ratings to social, environmental, and political areas. Once the system is implemented, probably by 2020, a company will get a lower credit rating if it does not pay back loans on time or does not comply with emissions targets or other government requirements. Possible punishments include unfavorable conditions for new loans, higher taxes, or restrictions to bid for publicly-funded projects.
8. PLA asset management firm
China Creates New Enterprise to Manage Military Business - Caixin
China Rongtong Group, overseen by the State Council’s State-owned Assets Supervision and Administration Commission (SASAC), will manage military assets in agriculture, real estate, hotel and other profit-making sectors, sources said. Senior managers of the new company have been appointed.
The establishment of China Rongtong is another step in China’s three-year plan to spin off commercial assets from the army. In January 2016, the Central Military Commission (CMC), China’s top military body, issued a document requiring all military departments to stop running for-profit businesses. In March that year, the CMC ordered that the People’s Liberation Army and the People’s Armed Police, a paramilitary police force, terminate business activities and spin off related assets in three years...
Caixin learned that China Rongtong named Wen Gang, former chairman of China North Industries Group Corp (Norinco), as chairman and party chief. Norinco is a defense corporation that manufactures civilian and military products.
Ma Zhengwu, former chairman of China Chengtong Holdings Group — a state-owned investment and asset operating company — was named China Rongtong’s general manager, Caixin learned.
Business, Economy and Trade
Did Huawei’s Chip Stockpiling Bring China’s 2018 Trade Surplus Down? | Council on Foreign Relations - Brad Setser While Huawei has not officially confirmed the stockpiling, a spokesperson did note that “all companies have business continuity plans… [it is the] only responsible way to do business.” And I don’t find the stockpiling claims to be totally implausible. A big build-up in Huawei’s chip inventory would actually fit with the trade data...Apart from the tactical impact on China's resilience in the face of the escalating trade war, if this story is true it also suggests that the fall in China’s surplus in 2018 was, well, a bit artificial. Or rather that China was pulling forward at least some imports, not just pulling forward exports to beat the tariff.
用法治促进民营企业健康成长（金台锐评） China’s Supreme Court held a meeting with private entrepreneurs and promised it will do more to abolish laws that discriminate against private companies
City Takes Price Cuts Off the Menu for Struggling Developers - Caixin Under orders to stop property prices rising too rapidly, local governments must also prevent them falling so far they anger locals and threaten stability *One city in central China thinks it has a solution to the dilemma — warn property developers not to cut their prices
China issues draft rules to regulate cross-border data flow - Global Times China's cybersecurity regulator on Thursday released a draft guideline on cross-border data transfers, which will prevent the flow of personal information overseas if it risks undermining national security and public interests, in the latest move to safeguard personal data security and the country's national cyberspace sovereignty. Personal information, including ID, address and phone number collected in China by network operators should be assessed before being sent overseas, according to the draft rule released by the Cyberspace Administration of China (CAC) on Thursday. Information which risks undermining national security, public interests or the security of personal information cannot be effectively guaranteed should be prevented from being sent overseas, the draft rule said.
Danone CFO says China's baby formula plan 'not a surprise' - Reuters “What is happening is not a surprise. At the end of the day there will be a few local players and international players. We see the category growing 3-5% in China with middle-class affluence,” Finance Chief Cecile Cabanis told the Deutsche Bank Access Global Consumer Conference in Paris.
Start-ups and incumbents battle for China’s meatless future · TechNode Plant-based meat substitutes have been part of Buddhist cuisine for centuries, and Chinese companies have been producing “mock meat” on a commercial scale for decades, if not longer. Although data is scarce, a recent report by the Good Food Institute (GFI) estimates that sales of plant-based meat in China reached $910 million in 2018, on the back of annual growth of around 15% since 2014.
Justin Sun, the Man Who Will Have Lunch With Buffett, Is a Self-Marketing Expert- PingWest From many Chinese people’s perspective, Sun is a speculator, rather than an investor. This is mainly because people consider the Tron token that Sun launched are fictitious cryptocurrency. First, his Tron token project white paper is copied and pasted from a variety of other cryptocurrency project white papers. No original work caused people’s distrust on Sun’s project and doubt of his intention.
UBS Apologizes for Chinese Pig Comment Amid Social-Media Backlash - Bloomberg The Zurich-based bank said the remarks in Paul Donovan’s UBS Morning Audio Comment, were “innocently intended.” Donovan was speaking in reference to the rise in Chinese consumer prices that were mainly due to sick pigs. “Does this matter?” he said. “It matters if you are a Chinese pig. It matters if you like eating pork in China.”
Alibaba Is Said to Have Filed for a Hong Kong Mega-Listing - Bloomberg The online emporium filed a stock listing application with the exchange this week without the need for financial disclosures, the people said, requesting not to be named because the matter is private. It is said to have picked China International Capital Corp. and Credit Suisse Group AG as lead banks. The offering from China’s largest corporation could raise as much as $20 billion, though Alibaba hasn’t finalized its fundraising target, the people said.
China's FDI up 6.8% in first 5 months of 2019 - China Daily Investment in China from South Korea, the United States and Germany respectively increased 88.1 percent, 7.5 percent and 100.8 percent year-on-year.
Top executive of Ofo stopped from leaving country - China Daily On June 12, a Shanghai court put Chen Zhengjiang, legal representative of Ofo's operating company Dongxia Datong (Beijing) Management Consultancy, on a blacklist after the firm refused to pay 120,000 yuan ($17,351) to an applicant named Wu Jinke. Chen, former head of Ofo's hardware supply department, took over Dai We to become the firm's legal representative last year.
China, Russia Carriers to Ship Gas on Arctic Route - WSJ $$ China is breaking into Arctic transport through a joint venture between the country’s biggest ocean carrier, Cosco Shipping Holdings Co., and its Russian counterpart PAO Sovcomflot to move natural gas from Siberia to Western and Asian markets.
China's cheap rice threatens Thai exports | Bangkok Post Thai rice exporters are fretting over their prospects this year as China looks set to ramp up its rice shipments, notably to Africa...China’s 5% white rice is quoted at US$300 (9,370 baht) a tonne, while similar grains from Thailand are quoted at $390, those from Vietnam at $360 and those from India at $370.
Wanda Sports Group Files for $500M NASDAQ IPO - Mingtiandi Wanda Sports Group (WSG), the owner of the Iron Man Triathlon franchise and soccer marketing group Infront Sports, has filed for an initial public offering in the US with a goal of raising up to $500 million, according to an SEC filing by the company earlier this month.
Politics and Law
Beijing issues teacher's ethics guideline to raise standard - ECNS The guideline was issued by the Beijing Municipal Education Commission (BMEC) on Tuesday for the capital's university teachers. Misconduct involves pursuing irrelevant things at work, such as playing the stock market and engaging in online business, taking bribes from students, spreading wrong and false information, having an inappropriate relationship with students, revealing national secrets and endangering national security and authority of the Communist Party of China. 北京列出高校教师11大失范行为 严重者或被撤教师资格 - 教育 - 新京报网
Facial recognition to cover Beijing Daxing International Airport - ECNS Beijing Daxing International Airport will apply intelligent technologies such as facial recognition in all security channels, said Zhang Rui, deputy director of the Airports Division of the Civil Aviation Administration of China, on Thursday. After passing through facial recognition, passengers can immediately gain access to data such as flight numbers, boarding gate positions and boarding times.
Chinese courts urged to promote mediation - Xinhua The Supreme People's Court (SPC) has urged courts at various levels to further advance alternative dispute resolution mechanisms such as mediations. Local courts should work with relevant organizations and government agencies to develop one-stop dispute settlement mechanisms for typical areas, so as to promote an interconnected social dispute settlement mechanism besides court litigation, said a statement issued Thursday after a symposium attended by presidents of higher courts across the country.
Jailed former head of Anbang not seen lawyers for a year | Financial Times $$ Lawyers for Wu Xiaohui, the jailed former head of Anbang Insurance, have been unable to meet their client for almost a year, raising concerns over his safety, while fears of the Chinese judicial system give rise to protests in Hong Kong.
China Frees Church Leader After 6 Months in Detention - The New York Times The release on Tuesday of Jiang Rong, 46, still leaves her husband, Wang Yi, pastor of Early Rain Covenant Church, and four other church members in detention. According to a church news release posted on the church’s Facebook page, Ms. Jiang was reunited with the couple’s son, Shuya, who had been living without his parents since they were detained on Dec. 9.
Senior political advisors study Xi's remarks on united front work - Xinhua The leading Party members' group of the Chinese People's Political Consultative Conference (CPPCC) National Committee held a group study session Wednesday to study remarks on the Party's united front work in Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. 全国政协党组举行第二次集体学习--时政--人民网
Senior CPC official calls for more intelligent methods in political, legal work - Xinhua Guo Shengkun, a member of the Political Bureau of the CPC Central Committee and head of the Commission for Political and Legal Affairs of the CPC Central Committee, made the remarks at a meeting on the innovation of political and legal work
Foreign and Defense Affairs
国家主席习近平任免驻外大使--时政--人民网 Kong Xuanyou, former vice foreign minister and China’s special envoy on Korean affairs is officially named as new ambassador to Japan
Chinese President Xi Jinping to visit India this year - India News Chinese President Xi Jinping is likely to visit India this year to discuss ways to further strengthen bilateral relations. The development comes shortly after Prime Minister Narendra Modi met Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) on Thursday.
China appoints diplomat who worked with Jaishankar as its envoy in New Delhi - Times of India In a significant move, China has appointed senior diplomat Sun Weidong, who worked closely with external affairs minister S Jaishankar during his tenure as the ambassador in Beijing, as its new envoy in New Delhi. Though China has not formally confirmed Sun’s appointment, an announcement to this effect is expected soon.
Chinese president awarded Kyrgyzstan's highest medal - Xinhua Kyrgyz President Sooronbay Jeenbekov awarded here on Thursday his Chinese counterpart, Xi Jinping, the Manas Order of the First Degree, the highest national prize of the central Asian nation
Sinking of Philippine Boat Puts South China Sea Back at Issue - The New York Times President Rodrigo Duterte’s spokesman, Salvador Panelo, demanded that China investigate the Sunday collision and punish the crew of the Chinese boat, which the Philippine government said had intentionally struck the vessel, leaving the Filipino fishermen at the “mercy of the elements.” “Such an act of desertion is as inhuman as it is barbaric,” Mr. Panelo said in a statement.
China's next generation off-road tactical vehicle soon to enter military service: report - Global Times The Chinese military is currently putting its next generation off-road tactical armored vehicle through a series of tests, as the vehicle is expected to be commissioned into the People's Liberation Army (PLA) soon, China's state broadcaster revealed. The lightweight, highly mobile off-road vehicle is designed to operate on very difficult terrain and in complicated battlefield situations, and analysts said on Thursday that such a feature could allow it to rival the US' Humvee.
US Customs supervisor had 'highly suspicious' contact with Chinese officials, prosecutors say - CNN When federal agents raided the Southern California home of US Customs and Border Protection supervisor Wei "George" Xu in February, they seized an arsenal of more than 250 weapons, including nearly three dozen illegal machine guns, according to court records...But guns are not the reason the veteran officer has been held without bond since his arrest four months ago. Instead, the Chinese-born naturalized US citizen has remained behind bars amid concerns about his secret-level security clearance and what prosecutors described as "highly suspicious" contacts with Chinese consular officials in Los Angeles. Prosecutors are also examining the apparent gulf between Xu's estimated $120,000-to-$130,000 salary as a federal law enforcement officer and his "luxurious lifestyle," in which he drove a Maserati, went on big game hunting trips to Africa and had approximately $1.4 million in the bank, according to court records.
Why America Needs a New Way of War | Center for a New American Security China and Russia have been devising strategies and developing new concepts and weapons to defeat the United States in a war should the need arise. They have offset their relative weakness versus the United States by using time and geography to their advantage and by focusing their weapons- and concept-development efforts on finding ways to attack vulnerable nodes in U.S. military operations. The goal of these strategies and concepts is to create a plausible theory of victory whereby China or Russia avoid a “fair fight” with the Joint Force and could therefore defeat the United States and its allies and partners in a regional war. These Chinese and Russian strategies, which once seemed implausible or far in the future, are beginning to pay off. They are shifting military balances in key regions and pushing allies and partners to reconsider U.S. security guarantees.
Filing suggests probe of Mar-a-Lago intruder is widening | Miami Herald Federal prosecutors disclosed this week they are developing a potential national security case against Yujing Zhang, the 33-year-old Chinese woman charged with unlawfully entering Mar-a-Lago with a stash of electronic equipment.
17 nations to join China's space station - China Daily They include space life sciences and biotechnology, microgravity physics and astronomy, the China Manned Space Agency and the United Nations Office for Outer Space Affairs announced on Wednesday in Vienna, Austria. It is the first time a Chinese space mission has invited all members of the UN to conduct experiments, and is a milestone in the advancement of China's manned space program from independent development to global cooperation, said Lin Xiqiang, the agency's deputy director.
China urges media not to quote Putin's words on China-U.S. trade dispute out of context - Xinhua According to media report, Putin was asked during the St. Petersburg International Economic Forum last week about his view of the China-U.S. trade dispute. He answered by citing a Chinese proverb which said "when tigers fight, the smart monkey sits aside and waits to see who wins." "I have seen the reports, yet I suggest those media carefully read the full text of President Putin's remarks or carefully watch the whole video clip, rather than quote his words out of context," Geng said.
Beijing snubbed Trudeau's request to talk with Chinese premier about detainees | CBC News Beijing ignored a personal attempt by Prime Minister Justin Trudeau earlier this year to arrange a conversation with China's premier in order to intervene on behalf of Canadians detained in China, CBC News has learned. "You are reaching out to Prime Minister Li Keqiang," begins a Jan. 11 briefing note to Trudeau, drafted in preparation for that phone call... Trudeau's office confirms that the prime minister requested the meeting, but China ignored and ultimately rejected his request.
Tech and Media
China chip industry insiders voice caution on catch-up efforts - Reuters Chinese chip engineers tell tales of local manufacturing that just is not up to snuff, while analysts point out the many areas where China remains reliant on technology from the United States, Taiwan, South Korea, Japan and Europe, with some questioning whether government policies are in the right place. “Compared to the constraints of equipment, materials, or talent, I think what China lacks more is understanding of the industry,” says Gu Wenjun, chief analyst at Shanghai-based consultancy ICWise. He called some of the government subsidies for the industry “counter-productive”, because too many well-funded ventures end up chasing the same talent.
In Depth: Why Tencent Wants A Lift In Corporate Cloud Customers - Caixin Global Newcomers find it difficult to catch up in the rapidly growing global cloud market and Tencent has moved more slowly than its rivals in China. It set up a cloud computing unit in 2014, nearly two years after Alibaba which in 2017 dominated the China market with 45% compared with Tencent’s 10%, according to market data provider IDC. The gap narrowed a bit last year but was still significant, with respective market shares of 42.7% and 11.8%.
Huawei’s Booming Smartphone Business Is Dealt a Blow by U.S. Ban - WSJ $$ Consumer devices like handsets are Huawei’s biggest revenue generator, pulling in more than $50 billion last year, according to the company. Analysts say its long-term smartphone success is in doubt if it remains cut off from American technology and loses customers. JPMorgan analysts cut their forecast for Huawei’s overseas smartphone shipments by 30% to 90 million units for the year because of the Android disruption.
Huawei seeks trademark for Hongmeng operating system in Peru - Reuters Chinese telecoms giant Huawei Technologies Co Ltd has asked Peruvian authorities to trademark its “Hongmeng” operating system, a sign it may be deploying a back-up plan in key markets in case U.S. sanctions hit its current business model.
Huawei Presses Verizon to Pay for Patents - WSJ $$ “We trust that you will see the benefit of taking a license to our patent portfolio,” the letter said, according to the people. The patents at issue span core network equipment, wireline infrastructure and internet-of-things technology, one of the people said, and the matter could impact several of Verizon’s vendors.
Why John Suffolk, Huawei’s global cyber-security chief, is trending on Chinese social media - The Washington Post Among Weibo’s trending topics Wednesday, alongside a South Korean pop idol and a difficult-to-summarize story involving two frogs, was John Suffolk, Huawei’s global cybersecurity chief, who parried parliamentarians’ questions this week about whether Huawei posed a security threat. His defense of the company, reported by China’s Global Times newspaper, quickly went viral, drawing praise from Chinese Weibo users far and wide.
TikTok Ramps Up Recruiting From Big Tech With Facebook Exec Hire - Bloomberg Bytedance Ltd. hired Facebook Inc. veteran Blake Chandlee as the first head of strategic partnerships for the Chinese startup’s viral app TikTok... Chandlee announced the move to Bytedance on his Facebook page. "When you remove political views and religion from the lens on how we view people across the world, we find we have more in common than you can ever imagine," he wrote.
Risky partner: Top U.S. universities took funds from Chinese firm tied to Xinjiang security | Reuters The Massachusetts Institute of Technology and at least one other university have research partnerships with a Chinese artificial intelligence company that has business ties with police in China's Xinjiang region, where a sweeping crackdown on Uighurs has drawn international condemnation. A 2016 government procurement announcement named a subsidiary of iFlytek as the sole supplier of 25 "voiceprint" collection systems to police in Kashgar, a city in Xinjiang. Another iFlytek subsidiary signed a "strategic cooperation framework agreement" with Xinjiang's prison administration bureau, according to a May 2017 company blog post on social media platform WeChat...
Society, Arts, Sports, Culture and History
'Throughline' Examines An American Who Became A Chinese Revolutionary : NPR NPR's history podcast Throughline, profiles Sidney Rittenberg, an American who became a Chinese revolutionary and encountered both acceptance and suspicion from Chinese leaders.
Signs of ritual pot smoking found in ancient Chinese graves - AP Archaeologists have unearthed the earliest direct evidence of people smoking marijuana from a 2,500-year-old graveyard in western China. In a complex of lofty tombs in the Pamir Mountains — a region near the borders of modern China, Pakistan and Tajikistan — excavators found 10 wooden bowls and several stones containing burnt residue of the cannabis plant
Energy, Environment, Science and Health
China's Father of Electric Cars Thinks Hydrogen Is the Future - Bloomberg A former Audi executive who went on to become China’s science-and-technology minister, Wan convinced leaders two decades ago to bet on the then-untested technology of vehicle electrification, selling it not only as a way to boost economic growth but also to tackle China’s dependence on oil imports and its mounting levels of pollution. His strategy -- using government subsidies to bring carmakers and drivers on board -- made China home to one of every two EVs sold globally today
Yicai Global - China Olympic Venue Eyes Hydrogen Fuel Future Worth USD24.6 Billion a Year The Chinese city of Zhangjiakou, which will be the main venue for the 2022 Winter Olympics, plans to turn itself into a hydrogen energy hub that has an economic output of CNY170 billion (USD24.6 billion) a year by 2035. Shanghai announced a similar ambition at the start of the week.
In Depth: China Continues to Dispute Mounting CFC Pollution Evidence - Caixin The researchers stood by their findings in interviews with Caixin, arguing that such large-scale emissions of CFC-11 are most likely to have come from production activities. While public government data accepts the existence of underground production and use, China still claims illegal CFC-11 production could not have reached the volume of emissions determined by the international researchers.
To Ease Health Care Burden, China Promotes Private Clinics - Sixth Tone China will streamline admission procedures at private medical facilities and lift requirements on the number of beds such facilities must have, an official with the National Development and Reform Commission said at a press conference Wednesday.
Just an FYI that the Caixin piece "China Creates New Enterprise to Manage Military Business" appears to have been taken down.