Lam to go?; China's "proper place in the world"; No US visa for PRC space official

Apologies for the lack of a newsletter yesterday. A confluence of events led to the newsletter equivalent of a bad hair day.

The big news today is the Financial Times scoop that Beijing is looking at replacing Hong Kong chief executive Carrie Lam by March 2020. Such a move may calm some of the protests but is likely far from enough to keep many of the protestors off the streets, especially since according to the FT the possible replacements are establishment figures and there are no signs that Beijing is willing to consider changing the selection/election process.

While most signals continue to suggest there will be a “phase one” trade deal soon recent comments by Secretary of State Pompeo remind us that a “phase one” deal will not fundamentally change the trajectory of the US-China relationship. In a speech in Washington yesterday titled Trump Administration Diplomacy: The Untold Story, Pompeo told the audience:

We’ve reconvened “the Quad” – the security talks between Japan, Australia, India and the Untied States that had been dormant for nine years. This will prove very important in the efforts ahead, ensuring that China retains only its proper place in the world.

The US government’s view of China’s “proper place in the world” and the view of Xi Jinping’s China are I think fundamentally at odds.

Tomorrow we will hear about China from US Vice President Pence, in a followup speech to the one he gave in October 2018. From what I am hearing it will be equally tough, with perhaps the only silver lining being a recognition that the US and China must find a way to peacefully co-exist.

Thanks for reading.

The Essential Eight

1. Hong Kong

Beijing draws up plan to replace Carrie Lam as Hong Kong chief | Financial Times $$

The Chinese government is drawing up a plan to replace Carrie Lam, Hong Kong’s leader, with an “interim” chief executive following violent protests against her administration, according to people briefed on the deliberations. 

The people said that if Xi Jinping, China’s president, decided to go ahead, Ms Lam’s successor would be installed by March and cover the remainder of her term, which ends in 2022. They would not necessarily stay on for a full five-year term afterwards…

Leading candidates to succeed Ms Lam include Norman Chan, former head of the Hong Kong Monetary Authority, and Henry Tang, son of a textile magnate who has also served as the territory’s financial secretary and chief secretary for administration, the people added. 

Comment: So establishment figures, still not the democratic elections the protestors are demanding, this move unlikely to satisfy at the least the more radical protestors

China 'draws up plan to replace Carrie Lam' as Hong Kong protests drag on | The Guardian

“Originally they were going to wait to take action until unrest settles down. Now there seems like there is no end. It’s now concluded that there’s no expected timeline for the unrest to stop. We’re just going to create more and more damage,” said Michael Tien, a pro-Beijing legislator.

Tien said he had not been part of any briefings about Lam’s stepping down but has been aware of discussions of the possibility since August. “The [Chinese Communist Party] will never, never not hold anyone accountable,” he said.

Reports of HK chief’s replacement ‘political rumors': Chinese FM - Global Times

China's Foreign Ministry slammed reports on Wednesday that the central government was planning to replace Hong Kong Chief Executive Carrie Lam, calling such reports "political rumors with ulterior motives."

Ministry spokesperson Hua Chunying made the remarks at a routine press conference on Wednesday.

Hong Kong formally scraps extradition bill that sparked protests - BBC News

The bill's formal withdrawal meets only one of five key demands emphasised by some protesters, who have often chanted "five demands, not one less" in Hong Kong's streets.

The others are:

For the protests not to be characterised as a "riot";

Amnesty for arrested protesters;

An independent inquiry into alleged police brutality;

Implementation of complete universal suffrage

Hong Kong protesters warn replacing Carrie Lam may not be enough | Financial Times $$

“Beijing doesn't understand the Hong Kong people and what we want. The voices of the Hong Kong people are very clear: five demands, not one less,” said Bonnie Leung, a pro-democracy campaigner. “These five demands are really about rebuilding a system that can protect us from further mayhem.”

'Society is suffering': Hong Kong protests spark mental health crisis | The Guardian

Nine suicides have been linked to the wave of unrest as young people grow frustrated and exhausted by the intense, months-long standoff

Hong Kong's domestic workers feel caught between both sides in ‘information war’ - The Washington Post

The flier called for information about Hong Kong’s “radical protesters.” The request, however, was made in Bahasa Indonesia, the main language spoken across the vast Indonesian archipelago — and among tens of thousands of domestic workers in Hong Kong.

The reward for being an informant: $25,500 to $127,500, a staggering sum for a domestic worker whose legal minimum wage is $590 a month.

Hong Kong police have ‘unwavering support’, Beijing says after remark by city’s leader Carrie Lam | South China Morning Post

Beijing has underlined its support for Hong Kong’s embattled police after the city’s leader opened the door to further action if a watchdog’s probe of officers’ conduct did not satisfy the public.

Commentaries by Communist Party mouthpiece People’s Daily and a prominent mainland blogger offered a staunch defence of the police, with anti-government protests in the city continuing and allegations of misconduct against the force a central point of contention.

Comment: Another sign that an independent inquiry of HKPF actions is unlikely.

Chinese FM denounces violence, foreign interference in Hong Kong - Xinhua

Wang said another basic fact about Hong Kong is that some foreign forces, including some media outlets, turning a blind eye to what is really happening and even calling white black, have called the street violence a pro-democracy move and branded the police deployment in accordance with law as violence.

Wang said some foreign forces have encouraged and indulged the street crimes so as to upset Hong Kong, and ruin its prosperity built by generations of hard work and its great historic progress achieved since the implementation of the "one country, two systems" policy.

Hong Kong Frees Murder Suspect Whose Case Led to Protests - The New York Times

Though Mr. Chan has said he would surrender to Taiwan, that self-governing island and Hong Kong are arguing over the terms. The disagreement is rooted in Taiwan’s disputed sovereignty...

Early Wednesday, Taiwan’s Mainland Affairs Council said it had asked to send officers to Hong Kong to escort Mr. Chan. But the Hong Kong government said it saw that request as “cross-jurisdiction law enforcement, which is a disrespect for Hong Kong’s jurisdictional power and is totally unacceptable.”

Why a dispute over a Hong Kong murder suspect is giving Taiwan’s President Tsai Ing-wen an election edge | South China Morning Post

Observers say that Taiwanese President Tsai Ing-wen is using the dispute to show her independence-leaning Democratic Progressive Party (DPP) as “torch-bearers of sovereignty” for the island, while the mainland-friendly opposition Kuomintang (KMT) party has argued that the ruling government is putting politics over justice.

2. US-China

China Is Back for U.S. Soy After New Round of Tariff Waivers - Bloomberg

Soybean processors in China were granted permission to buy another 10 million metric tons of U.S. supplies without retaliatory duties, said the people, who asked not to be identified because the information is private. This would be a third round of waivers, with about 5 million tons granted previously.

Remarks by President Trump in Cabinet Meeting | The White House

THE PRESIDENT: China is doing very poorly — worst year they’ve had in 57 years. I wonder why. I wonder why. I’m sure you can’t figure it out.

And we’re doing great. We’re taking in billions and billions of dollars in tariffs from China, and they’re eating the tariffs because they devalued their currency. And they’re pouring money into their economy because they don’t want to lose the jobs, but they are losing the jobs. They’ve having a terrible year. Worst in 57 years, they say.

And if they say that, it means it’s worse. And they announced that they have the worst numbers they’ve had in 20 years. They announced six. I don’t think it’s six; I think it’s probably minus-something. It could very well be minus. It could very well be in negative territory.

These remarks touched a nerve in Beijing. Hua Chunying addressed it at her press briefing today: "The fact that some people question China's economic data is obviously groundless and untenable." Hua did not mention Trump by name but obviously he is the "some people" to whom she refers. This comment from Trump may be an interesting reflection of the belief in at least parts of the White House that economist Xiang Songzuo is correct in his negative assessments of the PRC economy. Is the PRC economy as bad as Trump thinks it is, or is he overstating US leverage?

Trump is optimistic about the phase one deal:

THE PRESIDENT:  Well, one little example is the farmers.  So they were told and I was told, if we could get $20 billion a year in purchase — the biggest they’ve ever done is $16 [billion], is what I’ve heard and what they’ve said.  If we could get $20 billion a year from China — that China purchases $20 billion a year of agricultural product — that would be a great thing.  So my people had $20 billion done.  And I said, “I want more.”  They said, “The farmers can’t handle it.”  I said, “Tell them to buy larger tractors.  It’s very simple.”  (Laughter.)  “They’ll buy more land and they’ll buy larger tractors.  But I want more.”

And I said, “We want $60 billion to $70 billion.”  And we agreed to $40 [billion] to $50 billion.  So they wanted $20 billion, and I got $40 [billion] to $50 billion.  And they’ve already started buying.  And that’s just the way it goes.  So I want to thank China for that.

And they have started the buying.  So while we’re papering the deal — and that’s going well — we hope to sign it probably in Chile, when we have a summit in Chile, or wherever that may be.

Opinion: With All Eyes on Chile, What Could a First-Phase Trade Deal Look Like? - Caixin Global

Just three days before the Osaka summit, there was an interesting episode. Mnuchin said in an interview with CNBC that “we were about 90% of the way there [to a trade deal] and I think there’s a path to complete this.” He did not specify what made up the remaining 10%.

In other words, Mnuchin claimed that Washington and Beijing had agreed on 90% of the 150-page draft agreement despite the collapse of the talks in early May. If the U.S. Treasury Secretary was speaking truthfully then we might expect drafting the current deal to be relatively easy, picking up some already-agreed early harvest outcomes.

“Mnuchin was talking nonsense,” a well-placed source familiar with Chinese government thinking told me. In fact, they said, Mnuchin had neglected to mention the reasons China returned the draft agreement to Washington in early May with changes marked in red throughout the text.

Senators urge U.S. retirement fund to reverse China investment decision - Reuters

A bipartisan group of U.S. senators on Tuesday again asked a federal retirement fund to reverse a decision to track a popular index provided by MSCI Inc, saying a failure to act would lead to U.S. pension savings being funneled to companies controlled by the Chinese government.

The request is the latest effort by Republican Senator Marco Rubio, and Jeanne Shaheen, a Democrat, to stem U.S. investment in specific Chinese companies and it included signatures from other lawmakers, including Senator Mitt Romney, indicating the issue is gaining traction.

Comment: A "financial war", as some in China call it, that curtails the PRC's access to US dollars and global financial system is what the PRC government fears much more than a simple "trade war"

China's premier says cooperation with the U.S. can create mutual benefit - Reuters

“I believe cooperation between China and the US can create mutual benefit. On the basis of equality and mutual respect, we can grasp opportunities, focus on our mutual interests,” said Li.

He made the comments at a meeting with the former U.S. Secretary of the Treasury Henry Paulson Wednesday in Beijing

China scholars urge Beijing to sign trade war truce with Donald Trump, but get ready for a prolonged conflict | South China Morning Post

The idea of long-term competition between the US and China is becoming the consensus view in Beijing, even after the two countries reached an interim agreement on what US President Donald Trump called a “substantial phase one deal” earlier this month.

China misses out from global space summit in US due to visa woes - Global Times

"I miss an important space agency in this panel. Where is China?" Attendees at a plenary of the ongoing weeklong International Astronautical Congress (IAC) in Washington brought the question atop the panel voting system and demanded an answer.

The crowd-sourced question popped up after the audience found that Wu Yanhua, vice administrator of China National Space Administration (CNSA) scheduled to speak at the IAC kickoff event on Monday with officials from five other national space agencies, was conspicuously absent.

China says US has 'weaponized' visas to target exchanges - ABC News

Foreign Ministry spokeswoman Hua Chunying told reporters that the head of the Chinese delegation to the International Astronautical Congress wasn't able to obtain a visa following an Oct. 12 interview, making it difficult for Chinese representatives to attend important events at the meeting.

Reports said the vice chairman of the China National Space Administration, Wu Yanhua, had planned to attend the congress.

Hua said the U.S. has "weaponized" visa issuances and "repeatedly defied international responsibilities and obligations and impeded normal international exchanges and cooperation."

‘No Quotas,’ U.S. Embassy Officials Tell Chinese Students — but You Could Wait Indefinitely - Caixin

Chinese students seeking to study science and technology in the U.S. have been told to submit their visa applications at least 120 days before their course starts, as American embassy officials sought to reassure Chinese students they were not subject to visa quotas.

Speaking at an education event in Beijing on Sunday, U.S. Embassy in China staff denied such quotas were in place, and said there had been no change to their policy, but reiterated those applying for study in science and related fields were subject to an “administrative review of indefinite length.”..

The U.S. issued 89,179 student visas to Chinese applicants between April and August, up 5,869 from the same period last year, according to data released by the U.S. Embassy during the presentation.

Chinese envoy refutes U.S. groundless accusations on China's human rights - Xinhua

"The United States and a few other countries, in their old habits, have made attempt to use human rights to interfere in China's internal affairs, which China totally rejects," Zhang Jun, China's permanent representative to the United Nations, told the UN General Assembly's Third Committee, also known as the Social, Humanitarian, and Cultural Committee. In response to the accusations against China on issues related to Xinjiang and Hong Kong recently made by the United States and a few other countries, Zhang refuted their statements and "wrongful acts of interfering in China's internal affairs with the excuse of human rights and provoking confrontation at the United Nations."

The Pentagon has created a new office solely focused on China. Is that a good idea?

Since the release of the National Defense Strategy in early 2018, top Pentagon officials have stressed that the department needs to keep its focus on the long-term challenge from China. Now, with the creation of a new office focused solely on China, officials in the department hope to take a major step forward in that effort.

In June, the Department of Defense discreetly created a new job: the deputy assistant secretary of defense for China

Hasbro (HAS) Earnings Miss Estimates; Tariffs Cut Into Toy Sales - Bloomberg

“The threat and implementation of tariffs negatively impacted our quarterly results,” Hasbro Chief Executive Officer Brian Goldner said on a call with analysts. “Importantly during the third quarter alone we saw multiple different dates for the enactment.”

The trade war is stinging Caterpillar, and its outlook is dimming - CNN

the Asia-Pacific region, the epicenter of the US-China trade war, fell by the largest margin. Sales there declined 13%, driven by lower demand in China for construction equipment. China recently reported its weakest economic growth since 1992.

3. Real estate won’t rescue the economy this time?


China Business News reports on the relaxation of housing purchase restrictions in some cities and areas, and a rumor that restrictions will be relaxed in Yanjiao, a commuter "suburb" of Beijing just over the border in Hebei.

But the article says any loosening in some areas not a sign of change in central government policy that "houses are for living in, not speculating on", and in fact small adjustments in some areas are in line with the central government policy that each city may adjust its policies to fit their local conditions. So while there may be some loosening this does not yet sound like backsliding to unshackling real estate as part of a broader stimulus effort to prop up the economy

核心城市房价今年首降!未来房价走向,社科院报告这样预测...... _ 经济参考网 _ 新华社《经济参考报》官方网站

CASS' monthly report on the real estate market predicts that between now and the end of the year real estate prices will be mostly stable with a slight rend towards in line what the government wants...

China developers cut prices by up to 10 per cent to spur sales amid slowdown as policymakers maintain market curbs | South China Morning Post

Some builders are cutting as much as 10 per cent off their selling prices to boost cash flows, after latest official data showed the economy grew last quarter at the slowest pace since records began in March 1992.

The economic report was followed by data showing September new home prices (excluding state-subsidised housing) in 70 Chinese cities rose by the smallest since February.

“They are still under pressure to sell more homes in the coming two months,” said Gao Shen, a Shanghai-based independent analyst specialising in socio-economic issues. “They may not be able to sustain the expected sales increase next year given the government’s resolve in cooling the property sector.”

中小房企上演“求生之战” _ 经济参考网 _ 新华社《经济参考报》官方网站

Xinhua's Economic Information Daily reports that 24 of China's top 100 housing developers are at risk of not being able to make short-term debt repayments

Yicai Global - [Exclusive] China's Greenland Offers Staff Bonuses to Hit Developer's Annual Sales Target

Greenland Holdings has set aside CNY50 million (USD7 million) for bonuses to spur staff to achieve the property developer's CNY400 billion (USD56.5 billion) annual sales target. To that end, some employees have even been told to buy a home from the company...

The division in central Hunan province requires all employees, even those still in their three-month probationary period, to buy a Greenland-developed home in the province by the end of this month, though they can enjoy preferential purchase conditions, Yicai Global has also learned.

辟谣!长沙市住建局:限购放松消息不实|界面新闻 · 快讯

Changsha government denies rumors it is relaxing housing purchase restrictions

4. Pompeo says goal of the “Quad” to ensure China “retains only its proper place in the world”

Question: How does he think such a statement will go over in China, and in the other three countries of the Quad?

U.S. Security Bloc to Keep China in ‘Proper Place,’ Pompeo Says - Bloomberg

“We’ve reconvened ‘the Quad’ -- the security talks between Japan, Australia, India and the United States that had been dormant for nine years,” Pompeo said in a speech to the conservative Heritage Foundation research group on Tuesday. “This will prove very important in the efforts ahead, ensuring that China retains only its proper place in the world.”

His remarks came in a speech where he also said U.S. President Donald Trump “has changed the global conversation on China” and that Beijing “is a strategic competitor at best that uses coercion and corruption as its tools of statecraft.”

The full speech - Trump Administration Diplomacy: The Untold Story

U.S. Military Says Japan Must Inform Public of China Threat - Bloomberg

Japan should rethink its rejection of offensive weapons, a senior U.S. military officer said in Tokyo, while the U.S. Coast Guard chief warned of China’s “antagonistic” behavior in disputed waters.

There needs to be a discussion between the government of Japan and the public about the threats that are out there, said the U.S. military officer, who spoke Monday to reporters on condition of anonymity. The officer cited China as a particular risk.

Coast Guard planning to base three fast-response cutters on Guam, commandant says - Pacific - Stripes

Speaking from the Philippines during a tour of the Indo-Pacific region, Schultz said the move will “allow more frequent and longer patrols” in an area where the Coast Guard has increased its presence this year. The first of the vessels could arrive as soon as mid-2021...

“We’re on a trajectory where the geostrategic importance of the Oceania region has not been higher here in decades,” Schultz said, “and it’s a place that the Coast Guard’s looking to be part of the whole-of-government solution set.”

Though the service falls under the Department of Homeland Security, the U.S. has been deploying Coast Guard vessels under the aegis of the Navy’s 7th Fleet, based in Japan.

Imbalance of Power: India’s Military Choices in an Era of Strategic Competition with China | Center for a New American Security - By Daniel Kliman, Iskander Rehman, Kristine Lee and Joshua Fitt

Delhi’s ongoing efforts, though promising, will not fundamentally change the current trend lines in the India-China military equation. This report advances a set of recommendations that collectively aim to ensure select areas of Indian military advantage and stress PLA vulnerabilities. These recommendations are rooted in an assessment of policy and budgetary choices that might become viable for India in the decade ending in 2030.

Whether India can compete militarily with China will hinge on its operational concepts. The first advanced by this report is a sharper version of India’s existing operational concept for the Himalayan theater, while the second is more novel and tailored to an increasingly challenging maritime environment.

5. The Party mandates more ethnic unity

China issues guideline for enhancing ethnic unity - Xinhua

The General Offices of the Communist Party of China (CPC) Central Committee and the State Council have published a guideline for enhancing ethnic unity....

The document stressed efforts to improve governance of ethnic affairs, guarantee the legal rights and interests of citizens of different ethnic groups and resolutely crack down on criminal acts sabotaging ethnic unity and causing ethnic separation.

Work on ethnic unity should expand its focus to grassroots-level units, including communities, rural areas, schools, enterprises and military companies, said the document...

It asked to deepen publicity and education work on ethnic unity, push for the inheritance and development of fine traditional Chinese culture and expand the online space for ethnic unity publicity and education

中共中央办公厅 国务院办公厅印发《关于全面深入持久开展民族团结进步创建工作铸牢中华民族共同体意识的意见》 “Opinion on comprehensively, deeply and persistently carrying out ethnic unity and progress, creating work and consolidating the community consciousness of the Chinese nation” is the official title.

6. Surveillance

China Sharpens Hacking to Hound Its Minorities, Far and Wide - The New York Times

China’s state-sponsored hackers have drastically changed how they operate over the last three years, substituting selectivity for what had been a scattershot approach to their targets and showing a new determination by Beijing to push its surveillance state beyond its borders...

China’s hackers have since built up a new arsenal of techniques, such as elaborate hacks of iPhone and Android software, pushing them beyond email attacks and the other, more basic tactics that they had previously employed.

The primary targets for these more sophisticated attacks: China’s ethnic minorities and their diaspora in other countries, the researchers said.

Comment: Part of enhancing ethnic unity is crushing any ethnic disunity

Chinese Surveillance Grows Beyond Xinjiang - Foreign Policy - Emile Dirks and Sarah Cook

One evening in the summer of 2017, local police in China made a surprise inspection of a small private language school, checking the visas of all non-Chinese attendees. Among those present was a foreign doctoral student, who had left his passport at his hotel. “Not to worry,” said the officer. “What’s your name?” The officer took out a handheld device and entered the student’s name. “Is this you?” Displayed on the screen was the researcher’s name, his passport number, and the address of his hotel.

This kind of incident is common in Xinjiang, where China has extensively deployed technology against Muslim minorities. But this episode took place in Yunnan province, near China’s southern border with Myanmar. In fact, public security bureaus—the network of agencies in China that deal with domestic security and intelligence—across the country are using electronic databases coupled with handheld tools to keep track of certain categories of people. These “key individuals,” as they are officially known, range from paroled criminals and users of drugs to foreigners, petitioners, and religious believers.

November 6 Event - China's New Era in Techno-Governance | Center for Strategic and International Studies

Perhaps more than any other authoritarian country, China is experimenting with new methods of integrating technology into its system of governance, with its near-total surveillance state in the western region of Xinjiang being the most extreme example.  Please join the CSIS Freeman Chair in China Studies and the CSIS Human Rights Initiative for a discussion of how technology is changing the way the CCP governs China. The event will feature panelists Josh Chin and Kate O’Keeffe of The Wall Street Journal, and Christina Larson of the Associated Press.

7. NBA

China Sticks to Game Blackout as NBA Season Kicks Off - Bloomberg

The state broadcaster’s sports channel CCTV-5 -- which averaged 25 million viewers per game during previous NBA finals -- has no plans to air the opening games, the first time it has not covered regular season games in at least a decade...

But in a sign of the enduring interest from Chinese fans -- 500 million of whom watched one or more games last year -- Internet giant Tencent Holdings Ltd. live-streamed games from Wednesday.

Shaquille O'Neal says 'Daryl Morey was right' in Hong Kong comment - Sports Illustrated

"One of our best values here in America is free speech, we're allowed to say what we want to say and we are allowed to speak out on injustices and that's just how it goes," O'Neal said on TNT's pregame show before NBA Opening Night on Tuesday. "Daryl Morey was right. Whenever you see something wrong going on anywhere in the world, you should have the right to say 'that's not right' and that's what [Morey] did."

China gives NBA openers cold shoulder - Global Times

"Most followers of the NBA in China are young and the main voices on social media. Their reactions, including calling for a total boycott of the US sports league, are legitimate and reasonable, as they are also the most enthusiastic patriots with pride and confidence," Su Qun, one of the best-known basketball commentators in China, and the editor-in-chief of the Basketball Pioneer newspaper, told the Global Times...

Su suggested that to win back the Chinese market, Silver should remove Morey and "purify" the NBA to eliminate "the totally unnecessary political color."

The N.B.A. and China and the Myths of Sports Diplomacy | The New Yorker

There is a reason that China, during the Cold War, took up Ping-Pong in particular. The game had been codified, in the nineteen-twenties, by a British banker named Ivor Montagu, who was a communist, and who believed in the game as a suitably proletarian alternative to such aristocratic pursuits as lawn tennis and polo. (As Nicholas Griffin writes in “Ping Pong Diplomacy,” it “was one of the few sports you could play without ever leaving the factory.”) Montagu helped to found the International Table Tennis Federation, in 1926, and served as its president for more than four decades. During the early fifties, after the Communist Party had assumed power in China, Montagu encouraged the country to participate in the federation. In 1959, a Chinese player named Rong Guotuan won the federation’s world championship, and Mao declared that Ping-Pong was China’s “spiritual nuclear weapon.” Two years later, at the height of the Great Leap Forward, when millions of Chinese people were dying from starvation, Montagu, who also served as a Soviet spy, decided that the world championship would be held in Peking.

2022 Winter Olympics should not be held in China, GOP Sen. Rick Scott says - CNBC

The 2022 Winter Olympics shouldn’t be held in China, Sen. Rick Scott said Tuesday, referring to the recent standoff between Beijing and the NBA as well as the Chinese regime’s human rights violations.

Comment: Expect to hear increasing calls to either move or boycott those games

8. The struggles of the wives of the rights lawyers

One Big Read: ‘If We Give up on Our Husbands Today, Tomorrow Our Children Will Be Ashamed of Us’ | ChinaFile

In June, Li Wenzu, the wife of jailed Chinese rights lawyer Wang Quanzhang, was able to make her first visit to her husband since his imprisonment in 2015 as part of what was called the “709 crackdown.” Afterward, Li wrote a public statement about the visit, describing her husband’s precarious mental and physical health and the heartbreak of seeing him so diminished. “It has been four years, he looks like a programmed dull stick, he didn’t even turn around and look at us again.”

The following story, written by longtime legal affairs journalist Jiang Xue, describes the quest of Li and other family members of imprisoned Chinese lawyers to advocate on behalf of their husbands. Jiang reported it over half a year, extensively interviewing Li and other family members of detained lawyers, including Li’s close friend Wang Qiaoling. The story first appeared in Chinese in the Hong Kong-based publication Initium in December 2018. It has been adapted for ChinaFile and was translated by Eleanor Goodman.

Business, Economy and Trade

China releases regulation on optimizing business environment - Xinhua The regulation, released under a decree signed by Premier Li Keqiang, will become effective from Jan. 1, 2020...Aligning with advanced international levels, the regulation specifies the principles and directions for fostering a stable, fair, transparent and predictable business environment.

Big Banks Meet Goal to Boost Lending to Credit-Starved Small Businesses - Caixin China’s five largest state-owned banks have fulfilled their political tasks to boost small business lending ahead of schedule as policymakers seek to give the struggling private sector a helping hand...By the end of September, the value of outstanding loans to small businesses at the “Big Five” lenders rose to 2.52 trillion yuan ($356.42 billion), up 48% from the end of last year, Zhu Shumin, a vice chairman of the China Banking and Insurance Regulatory Commission, said at a press briefing on Monday. That met the whole-year target proposed by Premier Li Keqiang in March as an order to large state banks.

China to open its door wider for win-win cooperation - People's Daily Zhong Sheng In recent years, economic globalization has encountered headwinds and multinationals were requested to withdraw from China and decouple themselves from Chinese economy by certain forces. Such headwinds may be strong, but they will never shake the cooperation foundation between China and multinationals.

Chinese Contractor Ends Oil-Project Deals With Venezuelan Firms - Bloomberg China’s leading oil contractor in Venezuela terminated deals with local providers at oil projects due to lack of payment from the state oil company. But exiting is proving a challenge to both sides.

China to Let More Foreign Firms Invest In Domestic Companies - Bloomberg China will allow foreign firms not engaged in the investment business to conduct equity investment in domestic companies, the latest in a series of efforts to open up the nation’s financial markets and draw in foreign capital.

Yicai Global - Jinzi Ham Plunges as Bourse Questions Timing of Fake Meat, Share Sale Statements The SSE wrote to Jinzi Ham today asking it to re-explain why it disclosed pre-sales of its meat substitute on social media and whether there was any intention to boost the stock before executives sold about 5 percent of shares outstanding in the firm. Jinzi Ham gained by the 10 percent daily limit five times in the nine trading days following the announcement.

Yicai Global - Leshi Disputes Claim Jia Yueting Has Settled Debt Debt-laden Leshi Internet Information and Technology said it has not received any money from founder and major shareholder Jia Yueting, contradicting a claim made by his debt handling team that Jia has returned USD3 billion.

Yicai Global - China Fines Financial Sector Offenders USD18 Million This Month Regulators in China have charged financial firms with 138 violations of rules and fined them CNY127 million (USD18 million) since the beginning of this month as the authorities crack down on illegal fund-raising and other illicit activities, online news portal reported.

China’s crypto speculators are pushing sneakers into bubble territory | Abacus “WeChat ‘investor groups’ have proliferated, with group names like ‘XX Sneaker to da moon!’” said Matthew Graham, CEO of Sino Global Capital, adding that the primary interest of these investors is gambling. “These are similar to the cryptocurrency speculation groups that appeared during 2017’s crypto boom,” he said. // More from 21CNH on the sneaker trading craze ​疯狂的球鞋经济

China reveals state-owned assets of administrative and public institutions - Xinhua By the end of 2018, total SOAs of administrative and public institutions amounted to 33.5 trillion yuan (about 4.7 trillion U.S. dollars), with net assets hitting 23.6 trillion yuan. Entrusted by the State Council, Finance Minister Liu Kun delivered the special report, which also encompassed statistics of various SOAs of those institutions. According to the report, SOAs of the centrally administered institutions came in at 4.7 trillion yuan by the end of 2018, while those at the local level totaled 28.8 trillion yuan.

Charts of the Day: China’s Incredible Shrinking P2P Lending Industry - Caixin New lending was just 69.7 billion yuan ($9.9 billion) in September, 37% lower than a year earlier and the least since early 2015, the data show. At the height of the boom in late 2016 and early 2017, platforms were facilitating loans of as much as 250 billion yuan a month.

Key Personnel Moves Among China’s Biggest Bad-Debt Managers - Caixin The personnel change at Cinda is likely to set off moves in other state-run financial firms, including at other big bad-debt managers. This showcases a tactic that the Chinese government commonly uses — rotating experienced financiers between a number of state-owned institutions to help them better understand different sectors.

Cadillac Rides Growth Bandwagon for Luxury Cars in China - Caixin After years of breakneck growth, China’s auto market went into reverse last year as the nation’s economy slowed. It has been contracting ever since, including a 5.2% decline in September. But luxury cars have defied the trend and are actually up 11% in the first nine months of this year, even as overall car sales fell nearly 12%, according to the China Association of Automobile Manufacturers (CAAM). Cadillac, a relatively late arrival to the market, expects its sales to grow about 10% in this year’s fourth quarter, similar to the rest of the year, the brand’s China sales chief Feng Dan told a media briefing on Monday.

Decline in China’s NEV sales sharper than expected: report · TechNode The latest slide is “deeper than previously thought,” wrote analysts Wang Lei and Feng Wei at China International Capital Corp (CICC) in the report.

Politics and Law

Veteran Power Industry Official Latest to Fall in Anti-Graft Campaign - Caixin Li Qingkui, who spent his career in the electrical industry and retired just 14 months ago from one of China’s largest regional grid operators, has become the latest to be punished under the nation’s anti-graft campaign, the Communist Party’s disciplinary body announced on Tuesday...Because he had assisted in the investigation and had shown remorse for his actions, Li was allowed to stay in the Communist Party with two years’ probation

中央政法委倡导机关干部多下基层 陈一新:微服私访接地气 随机调研察实情-中国长安网 Central Politics and Law Commission Secretary General Chen Yixin holds a meeting to discuss results of recent research and investigations work, praises the approach to inspecting Beijing's preparations for the October 1 holiday in which officials inspected and did research incognito in Beijing, sounds like this is going to get pushed out to more areas

Mahjong houses fall silent as China purifies its social environment | South China Morning Post The closure was related to the campaign launched in January last year by Chinese President Xi Jinping to “eliminate the dark and evil forces” of organised crime, the announcements said.

人民舆情:江西多地“麻将馆禁令”被质疑一刀切--舆情频道--人民网 Local officials in Jiangxi issued an order shutting down all Majiang parlors and card rooms, an uproar ensued, now they have revised to order to apply to crackdown on illegal gambling activities...This article from the People's Daily Online Public Opinion Monitoring center looks at the case, an interesting view into how the propaganda apparatus is both shaping opinion and also reacting to it...officials do care what the people think about many things, especially if they make enough noise to bring scrutiny down on those local officials

北京海关破获走私老爷车团伙--法制网 Beijing police bust a ring smuggling classic cars into China, seizing 70 cars worth 30m RMB

Senior CPC official stresses self-awareness, firmness in Party building - Xinhua You Quan, a member of the Secretariat of the CPC Central Committee and head of the United Front Work Department of the CPC Central Committee, made the remarks Wednesday at a meeting on Party building work held by the department. Efforts should be made to fully develop the role of Party building in guiding other work, he said, adding that the quality of Party building in the united front work system should be continuously improved. 中央统战部召开党的建设工作会议 尤权出席并讲话

China Makes Tibetan College Graduates Denounce Dalai Lama to Get State Jobs - RFA To be considered for employment, applicants must “expose and criticize the Dalai [Lama]” and display loyalty to the ruling Chinese Communist Party, the Washington-based International Campaign for Tibet (ICT) said in an Oct. 16 statement, quoting from recruitment notices recently issued in China’s Tibet Autonomous Region (TAR).

Foreign and Defense Affairs

How does the CPC cultivate friendship around the world? - People's Daily Online In recent years, the International Department of the Central Committee of the Communist Party of China (CPC) has sent more than 30 delegations to publicize the spirit of the 19th CPC National Congress around the world, Song Tao, head of the International Department of the CPC Central Committee, said during an exclusive interview with People’s Daily Online....As a functional department in charge of the liaisons and external relations of the CPC, the International Department of the CPC Central Committee serves as the “ministry of foreign affairs” of the CPC Central Committee. 中联部部长宋涛接受人民网专访

Sovereignty in Cyberspace:  Theory and Practice China Institute of Contemporary International Relations; Shanghai Academy of Social Sciences; Wuhan University Advocating and practicing sovereignty in cyberspace does not mean isolation or breaking cyberspace into segments, but means facilitating a just and equitable international cyberspace order on the basis of national sovereignty and building a community with a shared future in cyberspace. States should work within the UN framework and uphold the principles of engaging in discussions as equals, seeking common ground while shelving differences, and pursuing mutual benefits. States should strengthen communication, harmonize positions, and on the basis of upholding sovereignty in cyberspace, formulate universally acceptable international rules and codes of conduct for cyberspace. States should join efforts in consolidating broad consensus and contributing wisdom and strength, so as to build a peaceful, secure, open, cooperative, and orderly cyberspace.

From follower to forerunner, China offers wisdom to internet development, governance | Xinhua "At the WIC, unveiling cutting-edge technologies to the world and promoting coordination in global cyberspace governance can help reach consensus and narrow differences," said Zhang Li, assistant president of the China Institute of Contemporary International Relations. Zhang expressed hope that the international community could make joint efforts to overcome barriers and build a community with a shared future in cyberspace.

As Australia frets about Chinese influence, local officials tout Belt and Road Initiative | South China Morning Post The country’s isolated Northern Territory, long dependent on Asian neighbours for prosperity, is now laying out the welcome mat for Beijing’s global trade strategy

Monash University partners with Chinese state firm linked to industrial espionage - Sydney Morning Herald The deal with Commercial Aircraft Corporation of China (COMAC) – to be formally signed in Beijing on Wednesday with Victorian Premier Daniel Andrews as a witness – has prompted fresh warnings about the risks of research collaboration with Chinese entities.

Queensland student sues Chinese consul general, alleging he incited death threats | The Guardian Drew Pavlou’s claim before the court argues the consul general of the People’s Republic of China in Brisbane, Dr Xu Jie, who is also an adjunct professor at the university, accused Pavlou in a formal statement of “separatist activities” – a capital crime in China – and incited death threats against him.

Huang Xiangmo: Chinese billionaire claims persecution by 'dark forces of Australia's deep state' | The Guardian The Chinese billionaire Huang Xiangmo has called the tax office a “despicable tool for political persecution” over its pursuit of an alleged unpaid $140m tax bill, saying “unknown dark forces” and an Australian “deep state” were conspiring against him.

Afghan rivals to meet in China after U.S. talks stall - Reuters “China has invited a delegation ... to participate in the intra-Afghan dialogue,” a Taliban spokesman, Suhail Shaheen, said in a post on Twitter late on Tuesday.

Solomons' province to block all China loans | RNZ News Malaita's provincial premier Daniel Suidani last week signed a new road map to govern its relationship with China. Diplomatic ties opened last month after Solomon Islands ditched long-time ally Taiwan, and the prime minister this week visited Beijing. Mr Suidani said he would only accept 'no strings attached' grants from China.

解放军某部飞行员龚大川执行飞行训练任务时牺牲,年仅33岁 quite the funeral for Geng Dachuan, an air force pilot who died earlier this month in a training crash. Geng is now a martyr

Bottling enterprises dismiss hyped controversy of using overseas resources - Global Times From the Lake Baikal in Siberia to the island country of New Zealand in the Pacific, news about Chinese companies investing and building bottling factories surfaces from time to time. Most are normal business practices, however, some foreign media take it as an opportunity to invent stories like Chinese companies are "plundering" local resources and encountering "strong objections."

North Korean Workers in China Forced to Work Overtime Before Sanctions Deadline - RFA Sanctions aimed at depriving Pyongyang of resources that could be used in its nuclear and missile programs mandate that all overseas North Korean workers return home by the end of this year. Pyongyang’s overtime push is an attempt to squeeze every last penny they can out of their overseas workers before the well of foreign cash their work provides dries up. // Comment: Hear that as the deadline approaches the PRC has been issuing a lot more tourist visa to North Koreans...will the workers really all be sent home?

Chinese Americans oppose U.S. House's passing of Hong Kong-related act - Xinhua Some 100 scholars, local residents and representatives of some major overseas Chinese groups from the U.S. East Coast had a gathering in Manhattan's Chinatown on Tuesday afternoon, to express their grave concerns over the so-called Hong Kong Human Rights and Democracy Act of 2019, which was passed by the U.S. House of Representatives earlier this month.

Madagascar rocked by fishing deal that never was - Chinadialogue Ocean This was in August 2019, when I’d visited the village to learn about an ambitious new fishing deal. A year earlier, a “blue economy” deal had been signed in Beijing, which would have seen investment of US$2.7 billion (about 19 billion yuan). Madagascar is one of the world’s poorest nations, with 75% of the population living on less than US$1.90 a day. Before visiting the village, I met with someone who outlined the deal to me. He pointed out that Madagascar’s GDP in 2017 was only US$11.5 billion, making a US$2.7 billion investment hugely important, and that Mahajanga would be one of the trial investment sites. One of the promises made was that there would be fishing work for people like Amir and the twins. But that trial, and the whole investment plan, turned out to be a mirage.

Abe calls for peaceful resolution of Hong Kong crisis in meeting with China vice president | The Japan Times Amid violent demonstrations originally sparked by Hong Kong’s controversial bill to facilitate extraditions to mainland China, Abe stressed the importance of the current “one country, two systems” setup, adding restraint and dialogue are needed, the Japanese Foreign Ministry said. Abe also asked Wang, known to be close to President Xi Jinping, to handle the case of a Japanese professor in his 40s — detained in China on suspicion of violating Chinese law — in “a positive manner,” effectively calling for his release.


Pro-Beijing party may be infiltrating temples | Taiwan News A pro-Beijing political party in Taiwan is reportedly exerting a strong influence on dozens of temples across the island, sparking fears that religious communities are being utilized to promote Beijing’s political agenda and facilitate money laundering from China.

Fewer Chinese Tourists: What will be the Impact? - AmCham Taiwan The loss of the Chinese market will batter Taiwan’s hospitality sector. CBRE, a property consultancy, estimates that Chinese tourist arrivals could plummet by 530,000 through the end of this year, slashing tourism revenue by NT$20 billion (US$632 million) from the 2018 level. In a worst-case scenario, there could be 640,000 fewer Chinese arrivals, down 51% from last year.

Tech and Media

Chinese Animation Nezha Gets on the Oscars’ Radar: For Style or Content? - Pandaily Just as film critic Raymond Zhou posted on Chinese twitter-like Weibo, “I have watched all the best Oscar-winning foreign language films (the best international films as they call it now) including all the award winners and finalists. My understanding is that the judges prefer traditional narrative stories and art films with a nationalistic style. Originally I thought they would choose My People, My Country to participate in the selection of the best international film this year. Nezha is totally unexpected, apparently the judges are taking different approaches this year.”

Former China Internet Star Battles Cashflow Problems - Caixin It was once a shining star of China’s internet industry whose skyrocketing share price smashed stock-market records. Now, four years on, online entertainment company Baofeng Group is struggling to keep the lights on.

Data labeling jobs are coming to underdeveloped regions in China, but can they stay? - KrASIA Local governments want to develop a data labeling industry for stable employment and to alleviate poverty, but the reality is far more complicated.

Society, Arts, Sports, Culture and History

Swedish Sinologist Who Helped Bring Chinese Literature to the World Dies at 95 - Caixin Famed Swedish Sinologist Göran Malmqvist, who had been remembered by many Chinese people as an avid promoter of Chinese literature, died Thursday. He was 95...Tao Duanfang, a columnist with the Beijing News, wrote over the weekend in an obituary that Malmqvist was not only a Sinologist or a just Mo Yan supporter, but served as a bridge between Chinese literature and the world.

Energy, Environment, Science and Health

China could be first country to exploit deep sea minerals | South China Morning Post The head of the International Seabed Authority (ISA) said China was likely to become the first country in the world to start mining seabed minerals if the international rules for exploitation were approved next year.