Hong Kong; Sanctions and visa restrictions; Huawei; Mask bubble pops; TikTok
|Bill Bishop||Jul 15, 2020|| 25|
Thursday is Q2 GDP day, expect the official data to show somewhere between 1-3% growth.
On Wednesday President Trump signed the Hong Kong Autonomy Act that among other things may lead to sanctions, and an executive order that will have the US effectively treating Hong Kong as it treats the PRC.
Today the US State Department announced visa restrictions on “certain employees of Chinese technology companies that provide material support to regimes engaging in human rights abuses globally”, and only mentioned Huawei by name.
It is shaping up to be a summer of US sanctions and visa restrictions against the PRC. So far the Chinese government has been fairly restrained in their substantive responses to US actions. When and how might that change? Has the leadership decided to absorb the blows for now in the hopes that the November election may bring a different US approach to China by early 2021? Or are they not yet sure how to react, and perhaps will have a better plan for responding by mid-August after Beidaihe?
There may be a lot more to come from the US between now and November, as I wrote last week:
The new Hong Kong national security law looks to have galvanized US allies, and as President Trump's reelection prospects dim expect to see attempts by his more hawkish-on-China officials to push through much tougher steps on China in the next few months, and to try to make it even harder for a Team Biden to revert to anything even approaching US-China 2016 relations, even if they wanted to.
Chris Buckley is one of the best foreign reporters on China of his generation. He was effectively expelled from the PRC earlier this year, and now his application for a visa to report from Hong Kong has been rejected - New York Times Will Move Part of Hong Kong Office to Seoul - The New York Times
Last week, the authorities in Hong Kong refused to renew a work permit for Chris Buckley, a veteran China correspondent of The New York Times. The city’s immigration department offered Mr. Buckley, 52, no explanation.
Today’s Essential Eight:
New Xi article in Qiushi
South China Sea
Long read-Xi Jinping and Han Feizi
Mask bubble popping
Thanks for reading.
The Essential Eight
1. New Xi article in Qiushi
The greatest strength of the system of socialism with Chinese characteristics is the leadership of the CPC, and the Party is the highest force for political leadership, the article says.
The Party exercises overall leadership over all areas of endeavor in every part of the country, it adds.
The article says the CPC is the leadership core for the cause of socialism with Chinese characteristics.
Upholding the authority of the CPC Central Committee and its centralized, unified leadership is the highest principle of the Party's leadership, which brooks no ambiguity or wavering at any time or under any circumstances, the article says.
The article uses the phrase "党政军民学，东西南北中，党是领导一切的 the Party, the government, the army, the people, academics, and east, west, south, north, center -- the Party leads everything" 5 times, just in case there was still any doubt
The article "The leadership of the Communist Party of China is the most essential feature of socialism with Chinese characteristics" is extracted from a number of important documents, including a total of 18 articles, including General Secretary Xi Jinping's speeches and reports from December 2013 to October 2019. This important article intensively reflects General Secretary Xi Jinping’s important thinking on upholding and strengthening the Party’s overall leadership in the new era, and it is highly ideological, theoretical, realistic, and instructive. In-depth study and understanding of this important article of the General Secretary will further enhance the "four consciousnesses", firm "four self-confidences", and "two maintenances" for the entire party and people of all ethnic groups in the country, and consolidate a decisive victory to build a well-off society in an all-round way and combat poverty. It is of great and far-reaching significance to tackle the difficulties and take advantage of the momentum to write a new chapter of socialism with Chinese characteristics in the new era.
The decision-making power of the party's and state's major political policies rests with the Party Central Committee. The Central Committee of the Party is the brain and center, and it must have the authority that is fixed in one respect and finalized. In this important article, General Secretary Xi Jinping compared the Chinese chess game to vividly explain the significance of upholding the authority of the Party Central Committee and centralizing unified leadership, pointing out that "in the big chess game of the national governance system, the Party Central Committee is sitting in the middle. The "handsomeness" of the military account, showing their strengths and weaknesses, and a clear picture of the overall situation, emphasizing "adherence to the party's leadership, first of all, to uphold the party's central authority and centralized unified leadership, this is the highest principle of party leadership, any time, any time Under no circumstances should it be vague or unshakable." This is a profound revelation of the Marxist party building theory, a scientific summary of the fine traditions and unique advantages formed in the long-term practice of the Communist Party of China, and a major principle that a mature Marxist party must always adhere to.
Comment: The editors use the term "定于一尊、一锤定音的权威 Ultimate Arbiter/One position as the highest authority, who sets the tone for all"
"Two safeguards" is the creative application of democratic centralism in the new era and is unified with the people as the center. It is the fundamental guarantee for upholding and strengthening the party's overall leadership and practicing the party's purpose. The "two safeguards" are essentially one body. To maintain the core position of General Secretary Xi Jinping is to maintain the authority of the Party Central Committee and centralized unified leadership; to maintain the authority of the Party Central Committee and centralized unified leadership, first of all, to maintain the core position of General Secretary Xi Jinping. The "two safeguards" have clear connotations and requirements. To safeguard the core position of General Secretary Xi Jinping, the target is General Secretary Xi Jinping rather than anyone else; to maintain the authority and centralized unified leadership of the Party Central Committee, the target is the Party Central Committee and not any other organization. The authority of the Party Central Committee determines the authority of party organizations at all levels. The authority of Party organizations at all levels comes from the authority of the Party Central Committee. The "two safeguards" can neither be applied layer by layer nor extended at will.
The four-character set expression ‘Ultimate Arbiter’ 定於一尊 attracted particular attention since, although it has been part of Party parole for some time, and it has been employed by Xi Jinping a number of times in various contexts, commentators found it significant that now, to all intents and purposes, it was being used to reaffirm Xi’s prestige
In the dictionary of the Chinese Communist Party, the term “one position as the highest authority,” or dingyuyizun (定于一尊), has for decades been used in a decidedly negative sense — to suggest power and position that escapes necessary constraints. But in recent weeks this negative phrase seems to have been dusted off, and a fresh coat of paint applied. It now rings as an affirmation of the need for resolute leadership.
Comment: In the summer of 2018 there was lots of grumbling about Xi and plenty of rumors of challenges. Interesting that this reappears in the summer of 2020, weeks before Beidaihe?
2. Hong Kong
US President Donald Trump took two actions against China in response to Beijing’s moves on Hong Kong on Tuesday, signing an executive order ending the city’s preferential trade treatment, and enacting a bill that would require sanctions against foreign individuals and banks for contributing to the erosion of Hong Kong’s autonomy.
The President's Executive Order on Hong Kong Normalization | The White House. Lots of items, including:
take steps to terminate the Fulbright exchange program with regard to China and Hong Kong with respect to future exchanges for participants traveling both from and to China or Hong Kong;
A former lawmaker and driving force behind the Hong Kong opposition camp’s weekend primary has resigned from his organising duties in the wake of Beijing’s stern warning that those behind the unofficial polls could be in breach of the city’s sweeping new national security law.
Au Nok-hin, 33, on Wednesday described statements issued by Beijing in the past two days as unexpected, saying he had no choice but to withdraw from the task force to protect his safety and that of others.
Trade Minister Simon Birmingham said on Wednesday that the Australia-Hong Kong Free Trade Agreement signed last year provided certainty and transparency for Australian businesses trading and investing in Hong Kong.
Billionaire and former chairman of Chinese Estates Holdings, Joseph Lau Luen-hung, has denied media reports and rumors saying that he and his wife, Chan Hoi-wan, have supported social movements.
About 68 per cent of the 183 companies AmCham polled said they were now more concerned about the law Beijing imposed on the city on June 30 compared with a month ago when they had not seen the wording of the legislation, adding that the new law lacked clarity in its language and implementation.
Faced with a tax rate as high as 45 per cent - up from about 15 per cent previously - Chinese professionals across Hong Kong are considering moving back home to avoid getting squeezed by both the new levy and sky-high living costs in the former British colony, according to interviews with workers and recruiters.
“The U.S. measures, alongside Beijing’s own crackdown on Hong Kong, are fast turning the city from an open, stable international financial center to contested ground at the very front lines of a rapidly intensifying geopolitical conflict,” said Antony Dapiran, a lawyer based in the city and author of “City on Fire: The Fight for Hong Kong.”
It is a highly irresponsible move that undermines the rule of law for countries to drop extradition agreements with the Hong Kong Special Administration Region (HKSAR) in opposing the national security law for Hong Kong, John Lee Ka-chiu, Hong Kong Secretary for Security, told the Global Times in an exclusive interview on Wednesday...
After the rules of implementation for the national security law were unveiled, US internet giants Google, Facebook and Twitter said that they had suspended processing requests for user data from Hong Kong law enforcement agencies, giving the excuse of protecting freedom of speech, which is widely seen as a smoke screen that shows their double standards in China-related issues. The Hong Kong official believes that each company has its own considerations, including how to cooperate with its own country.
"But the law clearly outlines their major responsibilities. If they violate the law, no matter what excuse the company has, it would be liable," Lee said.
Zhang Jieping editor in chief of the HK-based Initium Media wrote a blog about how individual HKer should do to live with the new national security law, including not to fear, continue to speak up, continue to trust your friends despite risk of snitching, and expect a long haul in the fight against authoritarian rule.
Today, I signed legislation and an executive order to hold China accountable for its oppressive actions against the people of Hong Kong. The Hong Kong Autonomy Act, which I signed this afternoon, passed unanimously through Congress...
Today, I also signed an executive order ending US preferential treatment for Hong Kong. Hong Kong will now be treated the same as Mainland China, no special privileges, no special economic treatment and no export of sensitive technologies. In addition to that, as you know, we’re placing massive tariffs and have placed very large tariffs on China...
And prior to the plague pouring in from China, they were having the worst year as you know, in 67 years...
No administration has been tougher on China then this administration. We imposed historic tariffs. We stood up to China’s intellectual property theft at a level that nobody’s ever come close. We confronted untrustworthy Chinese technology and telecom providers. We convinced many countries, many countries, and I did this myself for the most part, not to use Huawei because we think it’s an unsafe security risk...
And make no mistake, we hold China fully responsible for concealing the virus and unleashing it upon the world. Could have stopped it, they should have stopped. It would have been very easy to do at the source when it happened. In contrast, Joe Biden’s entire career has been a gift to the Chinese Communist Party and to the calamity of errors that they’ve made
the latest in a string of recent purchases as the country works toward its Phase 1 trade deal buying goals, two U.S. export traders with knowledge of the deals said.
Pompeo told the news briefing he would leave for a short visit to Britain and Denmark on Monday and China’s “threat to free peoples around the world” would be high on the agenda. He said he also expected to discuss Huawei.
The Blinken—and presumably the Biden—diagnosis of the “new world disorder” that has disrupted the international system is simple. While China’s rise and Russia’s turn to the dark side complicate foreign policy, the ideas and institutions of the liberal internationalist order are failing not because the world is fundamentally changing but because the global liberal system has been starved of a critical ingredient in the Trump years: American support
The so-called Xinjiang Supply Chain Business Advisory issued by several departments of the United States is a "severe distortion of facts," a spokesperson with China's Ministry of Commerce said Tuesday.
Wednesday CCTV Evening News previews a Thursday People's Zhong Sheng commentary "Crude interference in Hong Kong affairs is doomed to failure"
Vice Foreign Minister Zheng Zeguang calls in US Ambassador Branstad for a scolding over the signing of the Hong Kong Autonomy Act - 外交部：中方坚决反对美方签署“香港自治法案” — 中华人民共和国外交部
Zheng Zeguang pointed out that the so-called "Hong Kong Autonomy Act" and executive orders fabricated by the United States are not concerned with the "democracy" and "freedom" of the people of Hong Kong, but with vain attempts to obstruct and contain China's development. This attempt will never succeed. The Chinese side urges the US side to correct its mistakes and must not implement the so-called "Hong Kong Autonomy Act" and executive orders to stop interfering in China's internal affairs in any way.
Zheng Zeguang pointed out that the U.S. side has recently taken bad actions to interfere in China’s internal affairs and harm China’s interests on issues involving Xinjiang, Tibet, and the South China Sea, which has further exposed the essence of naked hegemony. In this regard, China has and will continue to take countermeasures to resolutely safeguard its own core interests. I want to tell the United States that any bullying and injustice imposed on China by the United States will be resolutely countered by China. The United States’ attempt to block China’s development is doomed to failure. We urge the US to change its course immediately, stop defamation and provocation against China, and do not go further and further on the wrong path.
The United States side will never succeed in its attempts to obstruct the implementation of Hong Kong's national security laws. In order to safeguard its legitimate interests, China will make the necessary response and impose sanctions on the relevant United States personnel and entities. We urge the United States side to rectify its mistake, refrain from implementing the so-called "Hong Kong Autonomy Act" and cease interfering in any way, including in the affairs of Hong Kong. China's internal affairs. If the United States is bent on having its way, China will certainly respond resolutely.
China firmly opposes and strongly condemns the move of the U.S. side of signing the so-called "Hong Kong Autonomy Act" into law, said a statement released on the foreign ministry's website Wednesday...
The Act maliciously denigrates the national security legislation for Hong Kong, and threatens to impose sanctions on China. It seriously violates international law and the basic norms underpinning international relations. It constitutes gross interference in Hong Kong affairs and China's internal affairs...
"We urge the U.S. side to correct its mistakes, not to enforce the so-called 'Hong Kong Autonomy Act,' and stop interfering in Hong Kong and other internal affairs of China in any way," it said, adding that if the U.S. side insists on going in the wrong direction, China will respond resolutely
Utilizing a variety of pretexts, like freedom in Hong Kong and human rights in Xinjiang, the purposes are the same: to divert public attention from the widespread protests against racial discrimination and Washington's failure to control the COVID-19 crisis; to flex some political muscle with presidential elections merely four months away; and to stymie China's development.
Imagine if China were to sanction the United States for the brutal treatment of its African American population or its catastrophic attempt at home to contain COVID-19, a threat to the common health of the entire world.
In the case of Hong Kong, China hardliners in Washington want to encourage extremist violence there, thereby severely compromising Hong Kong's social stability and economic viability. As long as their own political interests are met, who cares about the people of Hong Kong.
Xinhua commentary "Utterly worthless hegemonic thinking in a pile of waste paper: On the Political Manipulation of U.S. "Sanctions" Against Hong Kong" about the Hong Kong Autonomy Act
As for the United States side's threat to "terminate special economic treatment for Hong Kong", in fact "it will do more harm to itself than to others". The mainstream view of the industry and experts is that if the United States side adopts drastic financial sanctions, it will undermine the stability of the United States dollar system and the stability of the United States dollar. The world's reserve currency status will also seriously harm Wall Street and the interests of US multinationals in the Chinese market. According to another statistic, over the past 10 years, the United States has had the highest trade surplus among its global trading partners in Hong Kong, with 1,344 U.S. companies in the city. Of these companies, 278 are regional headquarters, and more than 85,000 U.S. citizens live and work in Hong Kong. The U.S. "sanctions" may affect the normal operations of financial institutions and the interests of many of their customers, including, of course, the U.S., who are related to Hong Kong. interests of businesses and the public.
As Chinese Foreign Ministry spokesman Zhao Lijian said at a regular press conference, the attempts of foreign anti-China forces are bound to fail, and the bill is also A piece of scrap paper. The reason why the United States is so happy to pile up scraps of paper and insists on meddling in Hong Kong affairs is simply that it is unwilling to give up its long-standing policy of regulating China through chaos in Hong Kong. The "painstaking efforts" of the Chinese Government in the past and its attempts to divert the scourge of the "colour revolution" to Mainland China have been unwilling to be "slapped" by the "sharp sword" of Hong Kong's National Security Law. You can't use your "fists" anymore.
6 items on the Wednesday CCTV Evening News attacking the US signing of the "so-called" "Hong Kong Autonomy Act"
4. South China Sea
Yesterday, July 13, Secretary of State Mike Pompeo announced an important shift in U.S. declaratory policy on the South China Sea. This morning, Assistant Secretary of State David Stilwell elaborated further during remarks at CSIS’s annual South China Sea Conference. The press statement from Pompeo listed specific Chinese maritime claims the United States considers illegal. The statement marks a significant clarification of prior U.S. positions but not a radical break from past policy. It makes explicit things that had been implied by previous administrations. And in that, it sets the stage for more effective diplomatic messaging and stronger responses to China’s harassment of its neighbors. U.S. partners and allies in the region were seemingly briefed in advance—the Philippine defense secretary, for instance, was ready with a positive statement within hours. And the new policy sparked excited, and often hyperbolic, coverage in the press and social media...
This new rhetorical position won’t have much effect by itself. But as the opening gambit in a long-term effort to impose cost on China and rally support for U.S. partners, it could be significant. The most immediate effect of this policy change will be on the diplomatic front. It is much easier to rally international support against “illegal” activity than against actions that are merely distasteful or destabilizing. It is also much more damaging to a country that aspires to global leadership to be accused of gross violations of international law. U.S. officials will likely begin working this stronger language into statements at international forums and putting pressure on partners and allies to do the same. This can be expected not just at regional meetings like the East Asia Summit, but in bodies like the Quad, the Group of Seven, and various bilateral and trilateral meetings.
“We will go provide them the assistance we can, whether that’s in multilateral bodies, whether that’s in ASEAN, whether that’s through legal responses, we will use all the tools we can,” he said at a news conference, referring to the 10-member Association of Southeast Asian Nations.
State Councilor and Foreign Minister Wang Yi made the remark in a videoconference on Tuesday with Philippine Foreign Secretary Teodoro Locsin...
China will continue to work with the Philippines and other countries in the region to deal with maritime issues through dialogue and consultation and conclude a code of conduct in the South China Sea at an early date, Wang said.
"Dealing with the South China Sea issue requires us to look forward together instead of going back to the past," Wang told his Philippine counterpart.
Translation: We have established new facts in the Sea and there is no point trying to undo them, now you need to just accept them and deal with the new reality?
Beijing requested the video call, according to the Philippine Department of Foreign Affairs. “Both sides reaffirmed that contentious maritime issues are not the sum total of the Philippines-China bilateral relationship,” it said on Wednesday.
Wang also dwelled on the statement by US Secretary of State Mike Pompeo, who on Monday rejected most of China’s claims in the disputed waterway..
A senior Philippine government official who asked not to be named said the call came about because Wang “wanted to hear directly from Locsin” after China “appeared to be somewhat surprised by the recent statements about the South China Sea”.
“What is interesting is the timing,” the official said. “It showed a certain anxiety on the Chinese side that there was no change in Philippine foreign policy
USS Ralph Johnson, an Arleigh Burke-class guided missile destroyer, sailed within 12 nautical miles for Cuarteron Reef and Fiery Cross Reef — the sites of two Chinese artificial islands — in the South China Sea. The operation coincided with the release of an updated position by the U.S. government on the South China Sea.
Global Times in the FONOP, says US Navy also released these "provocative" photos
Hoang Thi Ha and Ian Storey examine the (dis)connect between the Asean-China Code of Conduct negotiations and the arbitration ruling
"China hopes that sanctions will not be the label of the U.S., but as the saying goes – the trees may prefer calm but the wind will not subside, then let the storm blow harder," she said in response to reporters who asked about the remarks of top U.S. diplomat for East Asia on Tuesday.
Wednesday Zhong Sheng
The United States side's attempts to sow discord in the South China Sea run counter to the peace-loving efforts and aspirations of the countries in the region.
Today, the State Department is imposing visa restrictions on certain employees of Chinese technology companies that provide material support to regimes engaging in human rights abuses globally. Under Section 212(a)(3)(C) of the Immigration and Nationality Act, an alien is inadmissible to the United States if the Secretary of State has reason to believe the alien’s entry “would have potentially serious adverse foreign policy consequences for the United States.”
Companies impacted by today’s action include Huawei, an arm of the CCP’s surveillance state that censors political dissidents and enables mass internment camps in Xinjiang and the indentured servitude of its population shipped all over China. Certain Huawei employees provide material support to the CCP regime that commits human rights abuses.
Telecommunications companies around the world should consider themselves on notice: If they are doing business with Huawei, they are doing business with human rights abusers.
Question: Which other companies are targeted by this move? And is the US suggesting it will sanction companies that are working with Huawei?
Official explanation on why the UK changed its policy on Huawei - A different future for telecoms in the UK - NCSC.GOV.UK
NCSC Technical Director Dr Ian Levy explains the technical impact of the recent US sanctions on the security of Huawei equipment in the UK...
The NCSC now believes that there are only three things that can happen to help Huawei in response to this action. In our recent consultations with them, Huawei haven’t disagreed with this analysis. Those options are:
Someone breaks US law and continue to manufacture. This is pretty unlikely...
Huawei switch chips in equipment designs to ones that aren’t Huawei-designed, but perform the same sort of function. This is a big task. ...
Someone makes new design tools and manufacturing processes for chips that don’t use any US technology and so can provide Huawei what they need. Good luck doing that quickly.
Chinese tech companies Huawei and ZTE were dealt a severe blow in Italy as new governmental guidelines impose new security protocols that may spell the end of their role in the construction of the nation’s 5G network.
On Monday morning a secretive three-page document was sent to the managers of Italian telecoms operators. The pages set out a series of draconian measures requiring extra oversight for non-European 5G components suppliers, including continuous access to the system’s source code and weekly security reports to be handed to the government.
The security measures exclude European tech companies such as Ericsson and Nokia while essentially zeroing in on Huawei and ZTE, the only non-European competitors in Italy as well as much of the European market.
The fierce pushback from officials in Beijing on Wednesday were also accompanied by defiance at Huawei, which hinted that it was preparing for a "war" in a social media post from its prolific founder Ren Zhengfei following the UK ban. Still, the firm might have to face heavy losses in the UK and be forced to change its overseas strategy, including layoffs and closures, as more Western countries might follow in the UK's steps, insiders noted...
any adjustments in the UK and other overseas markets also mean huge losses for the Chinese company. For instance, the potential withdrawal of staff from the UK could result in a 10 percent downsizing of the company's current headcount in the domestic market, according to the insider, who spoke on the condition of anonymity.
Some analysts have also warned that following the UK's decision on Tuesday, more Western countries such as Canada could also take restrictive measures on the Chinese company under intensifying pressure from the US, though others also noted that it was unlikely for countries outside of the "Five Eye" alliances to blindly follow the US, given the potential damages. Germany and Belgium have reportedly said that they would not follow in the UK's steps.
In Germany, members of parliament have lamented a lack of progress on a draft law that would beef up security requirements for telecom companies procuring 5G equipment.
The delay is largely due to the fact that ministers in Chancellor Angela Merkel's government are split on how strict rules concerning Huawei should be. Industry is also applying significant pressure to maintain the Chinese firm's broad market access.
The decision makes Canada the last of the so-called Five Eyes intelligence consortium – also made up of the United States, Australia and New Zealand – to have blocked Huawei on security grounds from at least part of their high-speed 5G internet infrastructure.
"There's no such thing as pure private companies in China. From the perspective of the PRC, the ruling party can change your leader whenever the situation is intense," Audrey Tang, a hacker-turned-cabinet member, said in an interview in her office at the Executive Yuan in Taipei...
Tang, 39, said the people of Taiwan, a democratically governed island that China sees as part of its territory, saw the risks of using equipment made by the likes of Huawei and ZTE six years ago, when these tech giants were little known outside China.
"While the world is talking about whether or not to include China-linked companies in 5G infrastructure, we already did that in the 4G era," Tang said.
Even as ByteDance has faced growing international pressure on TikTok, its Chinese business has boomed. ByteDance’s advertising revenue is expected to rise 60% to as much as $27 billion this year, while the company will also generate revenue from ecommerce. The growth is coming mostly from its Chinese family of apps such as Douyin, a short-form video app similar to TikTok, and Toutiao, a news feed. In the first quarter, ad revenue was north of 40 billion yuan ($5.7 billion) according to a person briefed on the figures...
Despite the renewed focus on expanding in China, ByteDance founder Zhang Yiming is unlikely to consider selling TikTok at this time, said a person familiar with his thinking. Zhang remains determined to build a global company, the person said. A sale would also pose practical problems: It would entail giving outsiders access to ByteDance’s computer code, which runs its addictive content-recommendation engine, the person said. And Zhang is reluctant to give up the value in TikTok that ByteDance has worked so hard to build, said another person familiar with his thinking...
ByteDance expects the U.S. will contribute nearly half of TikTok’s revenue this year, which it projects will be between $1 billion and $1.4 billion, up from $200 million to $300 million globally last year.
TikTok has some 50 million daily users in the U.S. By comparison, Snap had 88 million U.S. daily users at the end of March and generated $315 million in revenue in the U.S. in that quarter
When asked about his recent remarks on the United States looking at banning Chinese social media app Tiktok, Pompeo said: "Whether it is Tiktok or any of the other Chinese communications platforms, apps, infrastructure, this administration is taking seriously the requirement to protect the American people from having their information end up in the hands of the Chinese Communist Party," he said at a think-tank event.
As I wrote last week:
Based on other conversations I've had recently I think a likely mechanism to ban TikTok would be the International Emergency Economic Powers Act (IEEPA), possibly in concert with the Committee on Foreign Investment in the United States (CFIUS), with the CFIUS angle being an attempt to unwind the acquisition of musical.ly, as Ben Thompson discussed last year.
To invoke IEEPA the President would have to designate an “unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States”, per the Act:
Any authority granted to the President by section 1702 of this title may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.
It may be worth noting that Wednesday Executive order on Hong Kong invoked IEEPA.
So should you be worried about TikTok? Eva Galperin, the EFF's director of cybersecurity, said it's all about your threat model. But if "you are an executive at a Fortune 500 company," she said, then the answer could be yes...
"There is absolutely no way the United States is going to ban TikTok, because of the first amendment," Galperin also told me. "Code is speech. TikTok is code." The government's only real move would be to pressure Google and Apple to yank it from their app stores, but that doesn't seem likely either.
Comment: This is wrong. The first amendment does not protect a private corporation like TikTok
Roposo, which also offers short videos, says it's peaking at 500,000 new users an hour and expects to have 100 million by month's end. That's almost double the 55 million it had before the ban, and puts Roposo among a profusion of Indian startups to benefit from TikTok's troubles in the country.
7. Long read-Xi Jinping and Han Feizi
Zha Jianying’s ‘China’s Heart of Darkness’ is a five-part study of a political duo — Han Fei and Xi Jinping — that binds an autocratic tradition to contemporary political practice. An appreciation of Han Fei and Legalist thought is not merely of academic interest, a refined topic for the philologists of traditional Sinology. Rather, as the world learns more about China under Xi Jinping, in tandem with its complex political, intellectual, historical and cultural underpinnings, figures like Han Fei and their ideas rightly have a pressing contemporary relevance...
While we pay due attention both to Official and Translated China, the main concern of China Heritage is to introduce readers to some of what we think of as the Other Chinas, that is the multiverse of ideas and possibilities that reflects lived reality while offering a guide to appreciating a past that not only resonates in the present, but that also addresses the future.
8. Mask bubble popping
The coronavirus-related mask manufacturing bubble in the first half of 2020 is rapidly bursting, according to an article attracting 35 million views on Weibo Wednesday. According to interviewed manufacturers, producer prices for the ubiquitous face mask have fallen by up to 90% from a high of 1.6 yuan ($0.22) in March, while export prices have dropped from $0.65 to $0.17-0.20...
According to a producer from Hubei interviewed by 21jingji.com, “At the peak in March, masks cost 1.6 yuan each wholesale, and we were making profit of up to 0.5 yuan apiece.” The producer will not quit on the sector, he says, as raw materials have fallen in cost even faster, which means he still makes comfortable profit margins. He believes raw materials are one twentieth their peak price
Business, Economy and Trade
机构预判二季度经济增长1%-3.4% 下半年有望逐季回升至5%左右 - 21财经 CBN says estimates for Q2 GDP range between 1-3.4%, with recovery to around 5% in the second half of the year
Rumor-Stoked Bank Runs Break Out in China Like Never Before - Bloomberg Just since the past month, worried savers have descended on three banks to withdraw funds amid rumors of cash shortages that were later dismissed as false. Over the weekend customers rushed to a bank in the northern Hebei province to take out money, prompting local regulators to publicly vouch for the soundness of its lenders as the police halted the run.
The "Five Strict Prohibitions" set a red line in the conduct of banking and insurance institutions. - “五个严禁”划定银行保险机构行为红线_中证网 Banking and Insurance Regulatory Commission informed about outstanding problems in shadow banking and cross-financing business. On the 14th website of the China Insurance Regulatory Commission, the China Insurance Regulatory Commission recently issued a “Notice on Major Problems Found in the Supervision and Inspection of Shadow Banking and Cross-Finance Businesses in Recent Years”. The head of the relevant department of the China Banking and Insurance Regulatory Commission said that it is necessary to further consolidate and deepen the achievements of the rectification of shadow banking and cross-finance business, to transmit the pressure of the regulatory department to strictly supervise the shadow banking and cross-finance business, promote the rectification of problems, and promote the further convergence of risks; To "draw a red line" for the behavior of bank insurance institutions, urge bank insurance institutions to refrain from lengthening financing chains, increase financing costs, and no longer use channels and other means to engage in idle funds, and to strictly implement national policies to improve Financial support "six stability" and "six guarantees" quality and efficiency.
Yicai - Shenzhen Tightens Home Buy Policies to Put Screws on Speculation The new rules require families and residents with a Shenzhen household registration, known as hukou in Chinese, to actually live in the city for three consecutive years and provide proof of continuous payment of 36 months or more of personal income tax or social insurance before they may buy housing.
财新：降低企业及低收入群体负担，多省份暂缓调整2020年社保缴费基数下限 Caixin reported that at least 14 provinces in China have decided not to raise the minimum social security payment the companies have to pay for their staff, so to help out the small companies that are already struggling due to the COV19. Beijing has also stopped increasing the minimum salary for this year.
财新：财政部牵头成立国家绿色发展基金，总规模885亿元China launched a 88.5 billion RMB national green fund to invest more in environmental projects. Only one of the 26 investors is private company, the rest are all state banks and state-owned companies.
GM Faces Battle in China to Regain Lost Ground - WSJ $$ GM has underperformed the broader China auto market for seven straight quarters. In the just-ended period, its sales fell 5.3% from a year earlier, compared with the broader car market’s 3.4% pullback, according to China Passenger Car Association figures released Wednesday. Over the past two years, GM has lost a quarter of its sales there, to just over 3 million last year from about 4 million cars in 2017.
Two State-Owned Coal Giants Confirm Merger Talks - Caixin Global Yankuang Group Co. Ltd. and Shandong Energy Group Co. Ltd., two state-owned coal giants in China’s energy hub of Shandong province, are in merger talks, according to a notice filed by Yankuang’s listed arm to the Shanghai Stock Exchange on Monday.
Goldman Sachs sees the Chinese yuan at 6.70 per dollar in the next 12 months - CNBC according to Zach Pandl, co-head of global foreign exchange, rates and emerging market strategy at Goldman Sachs. Pandl forecasts the Chinese currency could hit 6.70 per dollar in the next 12 months, “primarily through the health of the Chinese economy.” That compares against current levels of 6.9973 per dollar for the onshore yuan, as of Wednesday morning Singapore time. Meanwhile, its offshore counterpart changed hands at 6.9971 against the greenback.
李克强主持召开国务院常务会议--新闻报道-人民网 李克强主持召开国务院常务会议 部署深入推进大众创业万众创新 重点支持高校毕业生等群体就业创业 要求用好地方政府专项债券 加强资金和项目对接提高资金使用效益 通过《中华人民共和国预算法实施条例（修订草案）》 // Deployment of in-depth promotion of mass entrepreneurship and innovation, with emphasis on supporting employment and entrepreneurship of college graduates and other groups; Local governments are required to make good use of special bonds to strengthen the docking of funds and projects and improve the effectiveness of the use of funds; Adoption of the Regulations of the People's Republic of China on the Implementation of the Budget Law (Revised Draft)
China stresses advancing entrepreneurship, innovation, enhancing employment - Xinhua China will step up mass entrepreneurship and innovation, and focus on securing employment and market entities while fostering new growth drivers, according to an executive meeting of the State Council Wednesday. The meeting, presided over by Premier Li Keqiang, stressed supporting key groups including college graduates and migrant workers in finding jobs and starting their own businesses
China releases 17,000 tonnes of central pork reserves - Xinhua From July 6 to 10, the average pork price index in 16 provincial-level regions tracked by the Ministry of Agriculture and Rural Affairs was 50.6 yuan (about 7.23 U.S. dollars) per kg, up 6.8 percent week on week
Yicai - China Resumes Inter-Provincial Group Tours; E-Travel Platforms’ Searches Soar 500% China has resumed domestic inter-provincial group tours, the Ministry of Culture and Tourism said in a notice yesterday. E-booking giant Trip.Com’s instantaneous search volume for domestic group and self-guided tours soared 500 percent after the notice was issued, The Paper reported.
In Wake of Fake Gold Scandal, Kingold Defaults on Loans, Sheds Staff - Caixin Kingold is at the center of a fake gold scandal. Over the past five years, more than a dozen Chinese financial institutions, mainly trust companies, loaned 20 billion yuan to the company and Wuhan Kingold, which used gold as collateral, Caixin previously reported. But it turned out that at least some of the 83 tons of gold bars were nothing but gilded copper.
Pinduoduo Expands Mindshare for Value-Conscious Consumers with Push into Real Estate - Pandaily Pinduoduo (PDD), a pioneer of interactive e-commerce in China, brought its signature team purchase and value-for-money approach to real estate by offering 1,000 new apartments in the Greater Bay Area in Guangdong province on its platform. PDD tied up with Haiya Holdings to offer the apartments at 20% off the market price on July 13, and has also prepared further giveaways of cars and other benefits for buyers.
Yicai - Chinese Industrial Robot Maker Efort Gains Nearly Five-Fold on Its Shanghai Star Market Debut As one of China’s biggest makers of industrial robots, Efort’s products and system integration solutions stretch the entire industrial chain from core parts to finished products. It serves a wide range of sectors from autos, car parts, computers, telecoms to consumer electronics. Its systems are exported across the globe. However, the Wuhu, Anhui province-based firm has been unprofitable thus far. It suffered net losses of CNY36.5 million (USD5.2 million), CNY25.6 million and CNY53.2 million from 2017 to 2019.
Politics and Law
政事儿：付文化已任北京卫戍区司令员 Beijing News reported that the Beijing military region has a new commander, Maj. General Fu Wenhua. Fu used to serve in the Shenyang military region and studied in Germany.
多维新闻：北京卫戍区异动，少壮派掌“御林军”意味着什么 Duowei News speculated Fu Wenhua’s predecessor Lt. Gen. Wang Chunning may have been put under investigation for corruption since Wang served only four months in the Beijing CCP standing committee and, which is unusual, and he has not yet reached the retirement age.
新京报：王艳玲任湖北省政法委书记 Wang Yanling, former propaganda chief in Hubei, is the new chief of political and legal affairs in the province. Her predecessor Luo Yonggang had been transferred to central liaison office in Macau last year.
China Is Crushing Coronavirus Whistleblowers Again - Foreign Policy After a brief period of praising whistleblowers, Beijing is targeting medical staff and COVID-19 victims again.
The Lawfare Podcast: A Deep Dive on China and the Uighurs - Lawfare Benjamin Wittes spoke with Jessica Batke, a senior editor at ChinaFile; Darren Byler, a postdoctoral fellow at the University of Colorado at Boulder whose research focuses on Uighur dispossession; and Maya Wang, a senior China researcher for Human Rights Watch, who has written extensively on the use of biometrics, artificial intelligence and big data in mass surveillance in China.
Former Tibet official investigated for suspected discipline violations - Xinhua Zhao Shijun, former deputy head of Tibet's now-defunct administration for industry and commerce, has been under investigation for suspected severe violations of discipline and law, local authorities said Wednesday.
Foreign Ministry Spokesperson Hua Chunying's Regular Press Conference on July 15, 2020 Global Times: US National Security Adviser O'Brien said the following in an article published by the Washington Post on July 13: "Under Marxism-Leninism, the self-proclaimed ideology of the Chinese Communist Party, individuals do not possess inherent value. People are merely a tool to achieve the ends of the collective nation-state"; "The details of the CCP's anti-Uighur campaign are heartbreaking, but they reflect the Marxist-Leninist disdain for individual human beings"; "As long as these human rights violations continue, the Trump administration will respond." What's your comment? Hua Chunying: O'Brien should really read up on Marxist-Leninist works. Position on people's role is the fundamental political position of Marxist parties. People are the creators of history and the true driving force behind historical progress. This is the most basic concept in historical materialism. The CPC represents the fundamental interests of the vast majority of the Chinese people, seeks to advance their interests and serve them heart and soul. It is a party by the people and for the people. It puts people front and center in all its work. People's interests are its guiding compass. That is why the CPC has maintained a satisfaction rate and support rate higher than 90 percent for many years.
Corruption and Illegal Construction Led to Deadly Coronavirus Hotel Collapse, State Council Says - Caixin Police have launched criminal proceedings against 23 individuals for their suspected roles in the collapse of the Xinjia Express Hotel in March, which the report blamed on illegal construction facilitated by fraud. Twenty-nine people died and another 42 were injured. The collapse, which occurred in the eastern city of Quanzhou, was one of China’s deadliest public safety incidents in recent years. At the time, the hotel was being used as a coronavirus quarantine facility.
The Tiananmen crisis and training CIA analysts - Martin Petersen transcript - CBS News On China's political dynamics during Tiananmen vs today: "I think the challenges that we identified in those papers, what, 40 years ago, actually are still valid today. The Party's dilemma is this: 'We have a monopoly on power. How do we hold off pressures for political reform, such as we're seeing out of Hong Kong? Marxist Leninist ideology doesn't cut it anymore. So our legitimacy, our monopoly comes down to two things: Building the economy, economic prosperity, and protecting China's global interests.' And I think the aggressiveness you see in Beijing are both economic issues and its role internationally, economically. And what it's doing militarily in foreign policy are both a reflection that that's what their power rests on.
ChinaTalk: How Corruption Works in China - Lawfare How can China be so corrupt and yet grow so fast? What's the relationship between corruption and competent governance? How does 'access money' at the higher levels differ from the "profit-sharing" you see lower down in the bureaucracy? How does China in the 21st century compare with America's gilded age? And why won't anyone give me dinosaur eggs? To discuss, Prof. Yuen Yuen Ang joins the show to talk about her fantastic new book, China's Gilded Age.
中华民族伟大复兴征程上的重要里程碑（决胜全面小康 决战脱贫攻坚 专论）- 谢伏瞻 Important Milestones on the Journey to the Great Renaissance of the Chinese Nation (The Comprehensive Xiaokang and Poverty Alleviation Monograph) - Xie Fuzhan, head of CASS
观察者网：自然资源部通报南充市政府违法批地案，43名干部被问责 The Ministry of Natural Resources and the Sichuan Provincial Department of Natural Resources jointly investigated the illegal land grant by the Nanchong municipal government. The Sichuan Provincial Commission for Discipline Inspection investigated and held accountable 8 provincial and 35 non-provincial cadres involved in the case in accordance with laws and regulations.
Foreign and Defense Affairs
Xi congratulates newly-elected Surinamese president - CGTN Chinese President Xi Jinping sent a congratulatory message to newly-elected Surinamese President Chandrikapersad Santokhi on Tuesday. Xi said the bilateral relationship between China and Suriname has been developing in a healthy and stable way since the establishment of the two countries' diplomatic ties.
China-India border dispute: military leaders meet again in bid to ease tensions | South China Morning Post former diplomat says talks may continue for months as Beijing and New Delhi continue to disagree on key issues.
外交部：王毅同法国总统外事顾问博纳共同主持第二十次中法战略对话 State councilor Wang Yi and French President's Foreign Policy Advisor Emmanuel Bonne led the bilateral strategic dialogue on Wednesday, they agreed that China and Europe should cooperate more in trade, investment and combatting COV19. They also agreed to resume the flights between the two countries at an early date.
The End of China’s Foreign Policy Restraint? | Foreign Affairs - Kurt M. Campbell and Mira Rapp-Hooper In the past, the CCP generally sought to maintain a relatively stable security environment, occasionally seizing opportunities to advance the country’s aims without provoking undue international backlash and carefully recalibrating whenever it overreached. Beijing’s recent actions, however, reveal no such conservatism or caution. China may simply be taking advantage of the chaos of the pandemic and the global power vacuum left by a no-show U.S. administration. But there is reason to believe that a deeper and more lasting shift is underway. The world may be getting a first sense of what a truly assertive Chinese foreign policy looks like...If there is a silver lining to the current crisis maelstrom, it may be that Beijing has pulled back its own curtain, giving the world an unsolicited preview of unconstrained Chinese might. By leaving a power vacuum in the world’s darkest hour, the United States has bequeathed China ample room to overreach—and to demonstrate that it is unqualified for a position of sole global leadership. If Washington does not return soon, however, it may not much matter how the world views China’s bumptious diplomacy—left with no alternative, strident excess will fill the void.
China Provocations Hasten Japan’s Military Revival - WSJ $$ The changes come amid a generational shift in sentiment about the pacifism Japan embraced in the wake of World War II. Concern about security is most acute among Japanese who didn’t experience the war years or their aftermath, with nearly 95% of those age 18 to 29 saying there is at least some risk of Japan getting drawn into a war. Many young people support Mr. Abe’s push for a strong military to face the challenge from China and North Korea.
Russia space chief Dmitry Rogozin dismisses NASA's moon program, considering China lunar base - CNBC The head of Russia’s space organization criticized the current United States plan to return astronauts to the moon as “a big political project,” saying his country is instead speaking with China about establishing a lunar base of operations.
Maiden voyage of China’s first amphibious assault ship coming soon: report - Global Times The Chinese People's Liberation Army (PLA) Navy 's first Type 075 amphibious assault ship, which is believed to be built to play a vital role in island seizing operations, is expected to soon make its maiden voyage, as outfitting work is progressing smoothly, media reported on Tuesday, at a time when Taiwan island is holding its annual Han Kuang exercises. Having caught a minor fire in April, the under-construction Chinese warship did not suffer any major damage, which showed the ship's superior damage control mechanism over the USS Bonhomme Richard. The latter caught a major fire on Sunday, which analysts said may render the US warship beyond repair. // Lots of Schadenfreude in Chinese media and on the Chinese Internet about the fire on the USS Bonhomme Richard
中国共产党参加维护国际安全政党多边视频会议-中新网 A videoconference of the political parties of several countries was held on 14 April on the topic "The role of responsible political forces in maintaining international security in the context of the epidemic". The conference was held at the initiative of the United Russia Party, with the participation of the Chairman of the United Russia Party and Deputy Chairman of the Security Council of the Russian Federation, Dmitry Medvedev. The speech was attended by political parties and dignitaries from Germany, Japan, Kazakhstan, Serbia, South Africa, Vietnam and other ten countries. Mr. Song Tao, Minister of the International Department of the Central Committee of the Communist Party of China, was invited as a representative of the Communist Party of China and delivered a speech.
2020上半年，中国元首“云外交”为世界注入信心_央视新闻客户端_央视网(cctv.com) CCTV on PRC foreign affairs in the first half of 2020. The world under the impact of COVID-19 is undergoing profound changes and facing greater uncertainties, while China's role as a "stabilizer" has become more prominent. In the first half of 2020, President Xi Jinping addressed 3 important international conferences by video, wrote over 20 letters and made 60 phone calls with foreign political leaders and heads of international organizations to discuss epidemic prevention and control.
New ‘world-leading’ helicopter missile tested - Global Times The missile is likely to excel at range, accuracy and power, making it a nightmare for hostile tanks and fortifications, aviation experts said on Wednesday. An undisclosed type of helicopter conducted the test firing of the missile at a test site in Alxa, North China's Inner Mongolia Autonomous Region on June 22, reported China Aviation News, a newspaper affiliated with the state-owned Aviation Industry Corp of China (AVIC), on Tuesday.
Chinese experts invaluable in helping Ireland - China Daily Oisin O'Connell, a doctor at the Bon Secours Hospital in Cork, was among the organizers of teleconferences in March involving more than 50 medical staff from the Second Affiliated Hospital and First Affiliated Hospital in Zhejiang University in Hangzhou and colleagues in Ireland.
Secret Trump order gives CIA more powers to launch cyberattacks - Yahoo News The “very aggressive” finding “gave the agency very specific authorities to really take the fight offensively to a handful of adversarial countries,” said a former U.S. government official. These countries include Russia, China, Iran and North Korea — which are mentioned directly in the document — but the finding potentially applies to others as well, according to another former official. “The White House wanted a vehicle to strike back,” said the second former official. “And this was the way to do it.”
The China Scholarship Council: An Overview - Center for Security and Emerging Technology The Chinese government seeks exert influence through its scholarship and exchange programs. This issue brief assembles a picture of the China Scholarship Council—the primary vehicle by which the state provides scholarships—through Chinese-language sources.
人民日报：贫富分化导致美国人权问题日益严重 People’s Daily spent almost the whole page eight to discuss the widening income gap in the US and how poor people in America is suffering the most from COV19. It said this shows the human rights problem is getting worse and worse in the US.
贫富分化导致美国人权问题日益严重 中国人权研究会 2020年7月 - China Human Rights Research Society report on US income disparity leading to increasing human rights problems
Chinese Boat Supervisor Charged Following Indonesian Crewman’s Death - RFA The supervisor of a Chinese fishing boat has been arrested on charges of assault and human trafficking after the death of an Indonesian crew member whose corpse was discovered last week, police in Indonesia’s Riau Islands said
Tech and Media
Tencent Considering Buying 20% Stake in French French Video Game Firm Voodoo- PingWest Bloomberg reported in May that Voodoo’s backers have kicked off the sale of a stake in the company, and marketing materials with an overview of the business have been sent to potential buyers. Ubisoft Entertainment, the French video game studio, and Zynga, the American game developer, are both vying for Voodoo.
In Depth: China’s Chip Dreams Power SMIC’s Mega IPO - Caixin TSMC is now the world’s biggest foundry with more than 60% of the market. By comparison, SMIC is less than one-tenth the size of its rival. Last year, SMIC reported a profit of 1.8 billion yuan on revenues of 22 billion yuan, compared with an 80 billion yuan profit on revenues of 256 billion yuan for TSMC. SMIC is also well behind TSMC technologically. Its most advanced technology is now capable of making 14-nanometer chips, compared with TSMC’s 5-nanometer chip capability.
Energy, Environment, Science and Health
China Bans Fishing in Asia’s Longest River on Depleted Resources - Bloomberg China will impose a 10-year ban on fishing in some key parts of the Yangtze from next year to protect biodiversity along the Asia’s longest river. The move means more than 100,000 fishing vessels will be made redundant and some 300,000 fish farmers will have to be relocated, vice agriculture minister Yu Kangzhen said
Chinese Customs on Alert for Virus-Contaminated Seafood Imports - Caixin Global Officials in Pingxiang, a city of 1.9 million people in Jiangxi province, said in a statement (link in Chinese) Tuesday that the pathogen was found on exterior packaging and the inside of a container transporting Ecuadorian shrimp.
Tianwen 1 probe to soon blast off for Mars - China Daily Tianwen 1, a Chinese Mars probe, has been transported to Hainan province, where it is set to be launched atop a Long March 5 carrier rocket in the coming days, according to the China Academy of Space Technology. The academy said in a statement on Tuesday that the spacecraft is now undergoing prelaunch preparations at the Wenchang Space Launch Center in Wenchang before setting out on China's first independent Mars exploration without elaborating.
Chinese mainland reports no new domestically transmitted COVID-19 cases - Xinhua Chinese health authority said Wednesday that it received reports of six new confirmed COVID-19 cases on the Chinese mainland Tuesday, and all of them were imported.
新京报：云南昆明小学生“研究癌症”获奖，其父亲致歉 A primary school student in Kunming won national prize for his cancer research. It turns out he was merely plagiarizing his father’s research work. The father apologized and the award is rescinded. It is believed this is an effort to help the student to get extra credits and increase his chance of being admitted to good high school and college.
Food and Travel
Trip.com inks deal to promote Tibet tourism - Xinhua According to the contract, Trip.com Group will participate in formulating a three-year action plan for the high-quality development of the culture and tourism industry in Xigaze. Both sides will jointly build a smart tourism system in the city, including a smart tourism service platform, smart tourist attractions, and smart travel agencies.
Rural and Agricultural Issues
China reports skin disease outbreaks in cattle due to virus - Reuters China is facing outbreaks of a debilitating virus in cattle that causes a condition called ‘lumpy skin disease’, following an incident on a farm in the eastern province of Zhejiang this week, the agriculture ministry said on Wednesday.
Yicai - China Has Record Summer Harvest on Higher Wheat Yields This year 142.8 million tons of summer crops were harvested, up 0.9 percent from last year, of which 131.7 million tons were wheat, according to the National Bureau of Statistics.