More on Xi and the propaganda and ideology conference; US-China talking as new tariffs take effect; Alibaba earnings; Australia gives Huawei the highway; PLA troops to Russia for war games

Happy Thursday, not sure though how happy a day it is for the American and Chinese trade negotiators in DC, but at least they are talking.

I want to elaborate a bit on yesterday's comment:

Since returning from Beidaihe Xi in just a few days has chaired meetings with the PLA and the propaganda/ideology bureaucracy. He does not look like someone who is weakened, if anything he may be gaining strength. And a gathering, comprehensive conflict with the US may only serve to strengthen him further, as dissenting in the face of an existential struggle with the primary hostile foreign force would be seen as treasonous? 

It is not a coincidence that in just the last week Xi has chaired very high level meetings showing his control over the gun (Xi requires strengthening CPC leadership, Party building in military - Xinhua) and the pen. If there really had been a somewhat concerted effort over the summer to push back against Xi and/or Wang Huning, those moves look to have been squashed, and they likely gave Xi an even clearer idea of where enemies are. If you come at the king and you miss your life in the CCP will not be pleasant, and the message to any other cadres who might be wavering is very clear.

Thanks for reading, and please let me know what you think in the comments.

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The Essential Eight

1. More on Xi and the propaganda and ideology work conference

Signals From Xi’s Speech on Ideology | China Media Project - Qian Gang

Xi’s latest speech is essentially an affirmation of his speech on propaganda and ideology from five years ago. In this recent speech, he says, “The policy decisions and deployments of the Central Committee of the Chinese Communist Party on propaganda and ideological work are completely correct, and the broad masses of officials on the front lines of propaganda and ideological work entirely deserve our confidence.”

The conference was chaired by Wang Huning (王沪宁), the standing committee member in charge of ideology whom many suspect has been a key mastermind of Xi’s projection of authoritarian resolve and national strength. This is the second of two high-profile appearances Wang Huning has made this month — the first being his solo reception of a visiting delegation from Vietnam. We can interpret these as a process of endorsement (背书) by which Xi is signaling that Wang has his confidence...

According to past practice within the mainstream Party discourse, when speeches come to the part about the development of ideologies, Marxism must come along with a string of others — “Leninism,” “Mao Zedong Thought,” “Deng Xiaoping Theory,” the “Three Represents” (Jiang Zemin) and the “Scientific View of Development” (Hu Jintao). In his recent speech, Xi Jinping omits five of these six. This is particularly significant because one of these, “Deng Xiaoping Theory,” is of course intimately linked with China’s reform path over the past four decades.

For Xi to neglect mention of Deng altogether gives us an inkling of the fuller picture. No mention of Deng + no mention of opposing the extreme left + an emphasis on the Party’s and his own authority + an affirmation of the ideological direction set five years ago. All of this added together equals resolute opposition to the right.

China's Xi says ideology work 'absolutely correct' amid trade row criticism | Reuters:

The meeting was attended by representative of major state media and key propaganda officials, including ideology chief Wang Huning, who some sources say has fallen out with Xi over disagreements on messaging.

Reuters had an August 9 report saying Wang and Xi had a rift - Handling of U.S. trade dispute causes rift in Chinese leadership: sources:

A backlash is being felt at the highest levels of the government, possibly hitting a close aide to Xi, his ideology chief and strategist Wang Huning, according to two sources familiar with discussions in leadership circles...

Wang, who was the architect of the “China Dream”, Xi’s vision for China to become a strong and prosperous nation, has been taken to task by the Chinese leader for crafting an excessively nationalistic image for the country, which has only provoked the United States, the sources said.

“He’s in trouble for mishandling the propaganda and hyping up China too much,” said one of the sources, who has ties to China’s leadership and propaganda system.

Using "sources familiar with discussions in leadership circles" is a sign of just how hard it is to report on what is really going on in elite CCP politics.

Look for a Friday commentary on People's Daily on the work conference, previewed here on the Thursday CCTV Evening News--人民日报评论员文章:努力开创宣传思想工作新局面——论学习贯彻习近平总书记在全国宣传思想工作会议重要讲话精神_CCTV:

明天出版的人民日报,将发表评论员文章,题目是《努力开创宣传思想工作新局面——论学习贯彻习近平总书记在全国宣传思想工作会议重要讲话精神》。

文章说,一个时代的画卷,底色是人心;一个民族的复兴,关键在精神。在全党全国各族人民奋进新时代的重要时刻,党中央召开全国宣传思想工作会议。这是继5年前习近平总书记“8·19”重要讲话之后,党中央对宣传思想工作的又一次战略部署。

文章强调,学习贯彻讲话精神,就要充分理解党的十八大以来宣传思想工作的重大成果;充分领会新形势下宣传思想工作的使命任务;深刻认识新形势下宣传思想工作的重点工作,让党的旗帜在宣传思想战线高高飘扬,以担当作为推动宣传思想工作开创新局面


2. US-China

U.S., China Impose New Tariffs on Each Other as Talks Resume - Bloomberg:

Both nations started levying the previously announced taxes on $16 billion of imports from the other country shortly after noon Beijing time. China also said it would lodge a complaint about the new American tariffs to the World Trade Organization, according to a Chinese Ministry of Commerce statement on its website.

The U.S. will collect an additional 25 percent in duties on Chinese imports ranging from motorcycles to steam turbines and railway cars, and the Chinese retaliation will see a similarly sized tax on items including coal, medical instruments, waste products, cars and buses.

U.S. Seizes on China’s Woes as Talks Start - WSJ $$:

The U.S. has focused on China’s weakness in the run-up to the talks that started in Washington on Wednesday. Last week, National Economic Council Director Lawrence Kudlow said Beijing’s economy looked terrible. At the end of July, Reagan-era economist Arthur Laffer, an adviser to President Trump, sent to the White House an economic analysis titled “The Great Fall of China,” which said U.S. tariffs on Beijing were producing “substantial risk of derailing much of the past 50 years of growth in China.”

For some in the administration, including White House trade adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer, the darkening cloud over China’s economy is a reason to delay negotiations until additional U.S. tariffs kick in, U.S. officials said.

On Thursday, the U.S. will put tariffs on $16 billion of Chinese goods in addition to the $34 billion in Chinese imports already targeted. By the end of September, the U.S. could add levies on another $200 billion—about half of overall Chinese imports.

Comments: If anyone has a copy of Laffer's "The Great Fall of China" to share you can find at bill@sinocism.com or Signal +13012460858

As I wrote over the weekend in my "Notes from Beijing":

Economy—I did not find anyone who thought it was doing well, and ways to get family and money out remain a popular conversation topic. But since I first went to China in 1989 I do not remember any year where the economy was doing particularly well, though certainly there were years where it was easier to make (and steal) money. I understand that President Trump and some of his top advisors on China believe the PRC economy is in worse shape than it is, and that with enough pressure from the US, the economy and the political system may crack. That certainly is possible, but I do not see it and I hope the policymakers have a Plan B if in fact this is assumption is a significant part of their calculations. Maybe it is just far worse than ever now and I am too jaded, but I am still looking for a credible explanation of how the mechanics of collapse might actually work in this unique political and economic system, especially since the security services are much more hardened, technologically capable and empowered than they were in 2007-8.

Commentary: China-U.S. trade talks take two to tango - Xinhua:

Although the U.S. delivery of invitation to China has shown its readiness for negotiating deals, the soul of "the art of the deal" lies more on ungrudging concession than on forced bargain. The maximum pressure approach featuring my-way-or-no-way logic and zero-sum mentality has proved infructuous to China, and risks a renewed no-win prospect...

As U.S. President Donald Trump said in his book on making deals, "the point is that you can't be too greedy." The two sides would hence be advisable to define their top concerns in this round of talks and outline a roadmap, in a bid to find a way out of the current impasse and towards the final settlement of the issues.

Moreover, since the significance of trustworthiness is second to none in negotiations, the U.S. side should be ready to re-engage in its commitments than renege on them, if it really means it. Any fruits of the bilateral dialogue will once against come to naught if Washington goes back on its word as it did before. Credibility for a state plays the role of character for a human being, and it's in a country's interests to keep faith with others.


3. Maybe no stimulus "flood" but lots of drips

State Council Reiterates Opposition to "Flood-style Irrigation" of Chinese Economy - China Banking News:

Premier Li Keqiang convened an executive meeting of the State Council on 22 August which highlighted the launch of “policies to further ease the problem of finance being difficult and expensive for small and micro-enterprises, in order to drive the financial sector to better service the real economy and expedite stable employment and enterprise success.”

The meeting stressed several key policy themes in the near term including:

i) Maintenance of stable monetary policy and avoidance of “flood-style irrigation.”..

ii) Establish incentive mechanisms linking financial institution performance assessments with small and micro-loans

iii) Firmly place equal emphasis on driving growth and risk prevention

As Trade War Intensifies, China Moves to Bolster Its Economy - The New York Times:

“The focus is no longer on deleveraging, but on transferring leverage from one sector to another,” said Zhu Ning, a Tsinghua University economist.

The injections of money by the government into the economy now may offset the withdrawal of money last spring during the deleveraging campaign, but may not be enough to spur an actual boom in the debt-laden Chinese economy, said Rodney Jones, a principal at Wigram Capital Advisors, a Beijing economic research firm.

“I’m really skeptical that stimulus creates a surge of growth like we have seen in the past,” he said. “I think stimulus takes out some of the downside.”

Chinese banking sector warned it faces day of reckoning as decade of easy money ends | South China Morning Post:

With the US Federal Reserve on track for further monetary tightening and the US-China trade war continuing, the yuan will face continued downward pressure, said Yu Xuejun, the chairman of the supervisory board for key state-owned financial institutions at the China Banking and Insurance Regulatory Commission.

Yu predicted that the industry, which has US$38 trillion in assets, will see a surge in non-performing loans, but told a financial forum in Beijing that the government cannot allow another round of large-scale credit expansion as it is still trying to address the problems generated by previous stimulus efforts.

China’s Consumption Downgrade: Skip Avocados, Cocktails and Kids - The New York Times:

A post headlined “This Generation of Young Chinese, Brace for the Bitter Days Ahead,” by Ming Na, a blogger, received more than 300,000 views on the social media platform WeChat last weekend. She advised young people to stop going to shopping malls and nightclubs. “The age of the consumption downgrade,” Ms. Na wrote, “has arrived with a big crashing sound.”


4. Alibaba earnings

Alibaba's Revenue Leaps 61% as New Businesses Bear Fruit - Bloomberg:

Revenue at China’s biggest e-commerce company climbed 61 percent to 80.9 billion yuan ($11.8 billion) in the three months ended June, matching the average of analysts’ estimates. Net income slid 41 percent to 8.7 billion yuan, topping the 7.6 billion yuan projected after taking into account an increase in the valuation of affiliate Ant Financial, which boosted the expense of shares awarded to employees.

Alibaba Had a Bright Quarter, Despite Clouds Over China’s Economy - The New York Times:

Pessimism, along with the rising cost of living, has turned some young Chinese into penny pinchers. Alibaba said on Thursday that the value of sales on its Tmall platform, which caters to wealthier customers, grew by more than a third in the June quarter compared with a year ago. That is somewhat slower than the 40 percent growth clocked in the previous quarter.

Alibaba Group Announces June Quarter 2018 Results | Business Wire

Alibaba tweaks a controversial legal structure - Economist

Alibaba’s proposed change is aimed at tackling the first problem, key-man risk. At the moment four of its five VIEs are nominally owned by Jack Ma, the firm’s leader, and Simon Xie, a co-founder and former employee. After the restructuring, the two men will no longer be the dominant counterparties. Instead the VIEs will be owned by two layers of holding companies, which will sign contracts with Alibaba.

These holding companies will ultimately be nominally owned by a broader group of Alibaba’s senior Chinese staff. The idea is that if anyone gets run over by a bus, then the scheme will not be disrupted, because nominal control is spread among a wider group of people. The new approach is far from perfect but it is an improvement. If all goes to plan it will be completed by 2019. Other tech firms may feel pressure to follow.

A very different, bearish take from the "Deep Throat" blog - The BABA 20-F....Financial Comedy Gold!!:

On pg. 116 of the filing, management describes the "VIE Structure Enhancement". This is the summary (in actual English "words") of what they were doing....followed by a "simple" diagram.

Upon the completion of the VIE Structure Enhancement for each VIE, the equity interest of each such variable interest entity will, instead of being held by a few individuals, be directly held by a PRC limited liability company, which in turn will be indirectly held (through a layer of PRC limited partnerships) by selected members of the Alibaba Partnership or our management who are PRC citizens. This new structure institutionalizes the governance framework of our VIEs...


5. Australia gives Huawei the highway

Australia bans China's Huawei from mobile network project, angers Beijing | Reuters:

Firms “who are likely to be subject to extrajudicial directions from a foreign government” would leave the nation’s network vulnerable to unauthorized access or interference, and presented a security risk, the statement said.

It did not identify the Chinese firm, but an Australian government official said the order was aimed at Huawei and precluded its involvement in the network.

Huawei’s Australian arm, which strenuously denies it is controlled by Beijing, said on Twitter on Thursday that the action was an “extremely disappointing result for consumers”.

Huawei banned from 5G mobile infrastructure rollout in Australia - ABC News (Australian Broadcasting Corporation):

In Beijing, Chinese foreign ministry spokesman Lu Kang said China expressed "serious concern", adding that Australia should not "use various excuses to artificially erect barriers".

"We urge the Australian Government to abandon ideological prejudices and provide a fair competitive environment for Chinese companies' operations in Australia," Mr Lu said.


6. China cracks down harder on crypto

China's Cryptocurrency Crackdown Set to Further Intensify - China Banking News:

Tencent recently shut the WeChat accounts for a slew of cryptocurrency platforms , on the grounds that they had provided information on ICO’s or cryptocurrency speculation in breach of new regulations launched by the Cyberspace Administration of China.

Just prior to the closure Pan Gongsheng (潘功胜), vice-governor of the Chinese central bank and head of the State Internet Financial Risk Specialist Rectification team (国家互联网金融风险专项整治小组) said that ICO’s and cryptocurrency transaction sites are categorised as illegal financial activities, and that they will be “struck should they rear their heads.”

China Seeks to Block Access to 124 Foreign Crypto Exchanges - CoinDesk:

Chinese regulators are moving to block more than 100 overseas crypto exchanges offering trading services to domestic investors.

Shanghai Securities Times, a mouthpiece of the Chinese financial authorities, reported on Thursday that the China National Fintech Risk Rectification Office has so far identified 124 trading platforms with overseas IP addresses but that are still available in the country.

The office now plans to step up its efforts in monitoring the space and to block internet access to these trading platforms, the report said.


7. PLA troops to Russia for war games

China’s elite troops head to Russia for massive Vostok 2018 war games as trade tariff conflict grows with US | South China Morning Post:

The Chinese military will send about 3,200 troops to take part in Russia’s biggest war games in more than 35 years, putting their combat-readiness to the test after a massive overhaul of the People’s Liberation Army...

The troops, equipped with an array of weaponry including 30 fixed-wing aircraft and helicopters, will participate in the Vostok 2018 exercises in the Tsugol training range in Russia’s Far East Trans-Baikal region later this month, China’s defence ministry said.

Alexander Gabuev, Senior Fellow and Chair of Russia in Asia-Pacific Program at Carnegie Moscow Center wrote a Twitter thread explaining why the PLA's participation is significant:

Alexander Gabuev@AlexGabuev

For the first time in history Chinese troops will participate in Vostok-2018, the largest miltary drills Moscow held since Zapad-81 that brought together troops from USSR and Warsaw Pact countries. This is a milestone for Sino-Russian military ties, and it's very important 1/ pic.twitter.com/zQI01aNFuu

August 21, 2018
Alexander Gabuev@AlexGabuev

More important that the record number of Chinese troops is the fact that for the first time in history Russia invites China to be part of major strategic exercise - a role that was previously reserved for CSTO allies like Belarus during infamous Zapad-2017 5/

August 21, 2018
Alexander Gabuev@AlexGabuev

Vostok drills are aimed at countering foreign invasions and addressing military threats for Siberia and the Far East. China was among potential adversaries for many years. Now Moscow's message is that it doesn't view Beijing as an adversary any more. 6/

August 21, 2018
Alexander Gabuev@AlexGabuev

Sino-Russia military ties have consequences for the West, the most immediate are RU exports of sophisticated hardware like S-400, Su-35 etc. to be used by PLA in hotspots like SCS, Senkaku, Taiwan Strait. Downplaying it like Sec Mattis did in Singapore is dangerous complacency.

August 21, 2018


8. United Front and Taiwan's Unionist Party

United Front Target Taiwan's Grass Roots: Gangs, Temples, Business|Across the Strait:

In the past few years, steady streams of Chinese officials have flocked to this important hub for the Unionist Party in southern Taiwan, and every time the party’s leader and former underworld figure Chang An-lo, known as the “White Wolf,” heads south, it greets him with a convoy of 10-20 sound trucks...

With official cross-Taiwan Strait exchanges stuck in neutral the past two years, virtually sidelining Taiwan’s government from the fray, and China extending its united front strategy to Taiwan’s grassroots level, Beijing has developed an evaluation system for judging the progress of its united front strategy. It focuses on such indicators as how many villages and temples have been contacted, how much fruit has been bought from Taiwanese farmers and how many MOUs have been signed.

That has enabled the grassroots-oriented Unionist Party to leverage its influence in local communities and gain considerable benefit from this “intermediary dividend.”

Taiwan police target pro-Beijing ‘White Wolf’ in donations probe | AFP August 8:

“White Wolf”, whose real name is Chang An-lo, previously headed one of Taiwan’s biggest gangs before rebranding himself as a pro-China political activist.

Chang is known for his pro-unification stance and his Chinese Unity Promotion Party (CUPP) regularly organises rallies in support of Beijing.


Business, Economy, Finance And Trade

Lethal Pig Virus in Fourth China Province Raises Disease Threat - Bloomberg China’s pork supply is predicted to exceed demand this year. The slaughtering of breeding sows may buoy domestic pork prices over the following two years and prompt the country to import more pork in 2019, said Pan Chenjun, an analyst with Rabobank in Hong Kong. Weak domestic pork prices this year prompted farmers to use more food scraps from restaurants, which were previously banned from being fed to pigs, Pan said. The practice raises the risk of pigs ingesting contaminated meat, causing the disease to spread, she said.

China Poultry, Vaccine Maker Stocks Gain After Fourth Case of African Swine Fever | Yicai Global Stocks in Chinese firms engaged in the poultry and vaccine sectors received a boost in trading today following the discovery of a fourth case of African Swine fever in the country.

Want a Better Credit Rating? Buy Our $1.4 Million Software - Caixin Global: All companies looking for cheaper credit had to do was buy some expensive, useless software. That’s the deal one of China’s largest credit ratings agencies had been offering to companies whose securities it rated, Caixin has learned from multiple sources with knowledge of the matter... It also didn’t come cheap. “The (Dagong) software cost around 9.7 million yuan ($1.4 million), with an annual service fee of about 800,000 yuan,” a source at a securities firm told Caixin. “Many companies had quite a problem with this.”

China's Peak Online Finance Body Demands Reports on P2P Activities of Members - China Banking News On 22 August the National Internet Finance Association of China (NIFA) announced the launch of “self-disciplinary inspection work” for member organisations that engage in P2P lending activities, mandating the submission of a self-inspection and rectification report prior to 31 October via NIFA’s monitoring platform. NIFA said the inspections have the goal of “raising the risk-prevention capability of member organisations and steadily resolving accumulated risk.”

China revises regulations on foreign investment in banking sector - Xinhua China will abolish management rules on overseas financial institutions' investment in domestic organs, applying the same market entry and administrative approval policies for both Chinese and foreign investment, according to a statement from the China Banking and Insurance Regulatory Commission. The commission will also cancel restrictions on foreign holdings in Chinese banking and asset management companies in three other documents.

 

Politics, Law And Ideology

Chinese ministry announces new measures for poverty alleviation - Xinhua These include strengthening social welfare support, mobilizing non-governmental organizations, volunteers, philanthropists to join the anti-poverty campaign, improving subsidies for people with disabilities, providing better care for the elderly and left-behind children in rural areas, and improving community-level governance and its oversight. The measures were announced by Civil Affairs Minister Huang Shuxian at a national teleconference, who called on civil affairs officials at all levels to further cut red tape and prevent corruption while increasing efficiency and transparency at work.

China’s Mass Internment Camps Have No Clear End in Sight – Foreign Policy The permanent construction style of the re-education camps, visible in satellite images that clearly document their building process, suggests that the Chinese state, left to its own devices, intends to maintain the camp system for the foreseeable future. Barring a complete abandonment of the camp system, the most moderate plausible outcome is that at some point authorities dramatically reduce the number of internees, maintaining recalcitrant inmates in the camps, and preserving the capacity to return huge numbers to extrajudicial internment. In this outcome, the camps would continue to uphold Xinjiang’s racist police state and support the CCP’s assimilationist program of cultural and ideological cleansing.

Ex-Journalist Questions Legality of Security Checks - Sixth Tone A former journalist says he was stopped by police while walking through Guangzhou’s bustling business district last Friday, then manhandled, searched, and held for over three hours. The reason: He refused to present identification at a random security check. He Guangwei’s social media post about his three-and-a-half hour ordeal in the southern Chinese city has drawn widespread public attention for highlighting issues of privacy and civil rights. Since it was published on Monday, the former journalist’s post has been viewed 100,000 times on WeChat — the maximum number the social app displays — and reposted across other social media platforms.

China urges fugitives of duty-related crimes to surrender - Xinhua Fugitives who opt to surrender before Dec. 31 and confess to their crimes will be eligible for lesser punishments, said the announcement jointly issued by the National Supervisory Commission, Supreme People's Court, Supreme People's Procuratorate, Ministry of Public Security and Ministry of Foreign Affairs.

“Thugs-for-Hire”: Subcontracting of State Coercion and State Capacity in China | Perspectives on Politics | Cambridge Core Using violence or threat of violence, “thugs-for-hire” (TFH) is a form of privatized coercion that helps states subjugate a recalcitrant population. I lay out three scope conditions under which TFH is the preferred strategy: when state actions are illegal or policies are unpopular; when evasion of state responsibility is highly desirable; and when states are weak in their capacity or are less strong than their societies. Weak states relative to strong ones are more likely to deploy TFH, mostly for the purpose of bolstering their coercive capacity; strong states use TFH for evasion of responsibility. Yet the state-TFH relationship is functional only if the state is able to maintain the upper hand over the violent agents. Focusing on China, a seemingly paradoxical case due to its traditional perception of being a strong state, I examine how local states frequently deploy TFH to evict homeowners, enforce the one-child policy, collect exorbitant exactions, and deal with petitioners and protestors. However, the increasing prevalence of “local mafia states” suggests that some of the thuggish groups have grown to usurp local governments’ autonomy. This points to the cost of relying upon TFH as a repressive strategy.

China's State Council begins inspecting policy implementation - Xinhua China's State Council on Wednesday sent 31 inspection teams across the country to make sure major policies issued by central authorities are being effectively implemented. The priorities include the work on the "three tough battles" of controlling risk, reducing poverty and tackling pollution, rural revitalization strategy, expanding domestic demand and promoting opening-up, cutting red tape, lowering fees and taxes, improving the business climate, innovation, job creation, health and elderly care. Each team will stay at one provincial area for 10 to 12 days, conducting open talks and private interviews with people in communities, hospitals, schools, businesses, research institutes, and government service halls. The inspection teams will also open social media accounts to receive complaints from the public.

 

Foreign and Military Affairs

"Inviting Gui Minhai" Is a Show of Ignorance of Law - PRC Embassy Sweden On 22 August, a small number of people from the Gothenburg Book Fair, Svenska PEN and the Swedish Publishers’ Association (SvF) published an article, “Bokmässan bjuder in fängslade Gui Minhai”, in the Cultural Section of Dagens Nyheter (DN). The article, without regard to the truth, is full of fabricated facts that constitute a malicious smear and attack against China. It is a sheer violation of the spirit of rule of law and justice, and a show of ignorance of law.

Chinese underwater drone maker’s plan to rule the waves could be scuppered by US trade war | South China Morning Post Tianjin Sublue Ocean Science and Technology, founded by decommissioned officer Wei Jiancang in 2013, forecast the company’s revenue would rise tenfold this year and is expanding production to meet growing demands. The company produces the underwater robots for the military but has expanded into the civilian market for industrial and commercial uses. Its clients include recreational consumers as well as government agents like the customs agency in Macau.

Two Chinese Nationals Charged with Operating Global Opioid and Drug Manufacturing Conspiracy Resulting in Deaths | OPA | Department of Justice While in Cleveland, Ohio, Attorney General Jeff Sessions today announced the unsealing of a 43-count indictment in federal court in Cleveland, which charges two Chinese citizens with operating a conspiracy that manufactured and shipped deadly fentanyl analogues and 250 other drugs to at least 25 countries and 37 states.  The indictment also alleges the drugs sold by the group directly led to the fatal overdoses of two people in Akron, Ohio. Fujing Zheng, aka Gordon Jin, 35, and his father Guanghua Zheng, 62, both of whom reside in Shanghai, China, are charged with conspiracy to manufacture and distribute controlled substances, conspiracy to import controlled substances into the United States, operating a continued criminal enterprise, money laundering and other crimes. The charges carry a potential sentence of life imprisonment because the drugs involved resulted in death, and the defendants’ conduct qualifies for an enhancement under the kingpin statute.

2018 FOCAC Reporting Guide This handbook is designed to educate journalists and media practitioners about the upcoming Forum on China Africa Cooperation summit in Beijing in September 2018. This guide was produced by The China Africa Project with support from the Africa-China Reporting Project at Wits University in Johannesburg, South Africa.

Open Silos - Arms Control Wonk This appears to be the first official confirmation of a potential silo basing option for this missile system that I can recall. Naturally, I proceeded to spend a bit of time poking around in imagery of DF-41 bases provided by Planet Labs, and lo and behold, there is a new silo at Wuzhai. And back in March a Planet Labs Skysat just happened to capture it while it was open. The site does not yet appear operational for testing.

Duterte points new war threat at China | Asia Times hilippine President Rodrigo Duterte is threatening war again with China, his latest in a series of rhetorical broadsides against Beijing’s perceived as expansionist activities in the contested South China Sea. On August 21, Durterte warned China against unilaterally drilling for oil in Philippine-claimed areas of the sea, saying if Beijing proceeded with the exploitation it could lead to war, local media reported.

 

Hong Kong, Macao

How the Hong Kong Jockey Club exaggerates its charity | Financial Times $$ In the year to June 2017 that monopoly generated revenues of nearly HK$34bn ($4.3bn) on record betting turnover of more than HK$216bn — that is almost HK$30,000 gambled for every man, woman and child in the city. The monopoly is justified on the grounds that the club’s charity arm redistributes some of its profits to good causes — part of a deal dating back to 1952. But a Financial Times analysis shows the club exaggerates its donations, paying out only a sliver of the charity funds that serve to justify its lucrative monopoly. For instance last year a press release from the club detailing its annual results recorded “total charity donations” of HK$7.6bn but that counted money “allocated” to charitable organisations and community projects and thus earmarked for potential payment. The annual donations — defined by Hong Kong law as payments made, not just pledged — were just HK$2bn, according to the annual report of the Jockey Club Charities Trust.

 

Tech And Media

Wanted in China: Detailed Maps for 30 Million Self-Driving Cars - Bloomberg GM has chosen Alibaba-owned AutoNavi for its Super Cruise driver-assistance system on Cadillacs it plans to sell in China. SAIC Motor Corp., the country’s biggest carmaker, bought shares in license holder Wuhan Kotei Informatics Co. and formed a joint venture to develop driver-less mapping. Didi Chuxing, the country’s largest ride hailing startup, obtained a license in 2017 and has a team working on maps and driver-less technology. Even online retailer JD.com has applied for a HD mapping license as it works on driver-less delivery trucks.

This Week’s Movers and Shakers - Caixin Global n this newly launched product, we’ll give Caixin’s take on what the movers, shakers and decision-makers in China’s financial circles are up to — alongside selected stories on important figures in business, the anti-corruption drive, provincial politics and more.

China To Take Nearly Half Of Global Face Recognition Device Market By 2023 – China Money Network China is expected to dominate the global face recognition devices market with a 44.59% share by 2023, up from the country’s current market share of 29.29% in 2017, according to a report by Gen Market Insights. The Chinese face recognition device market, which refers to handheld and fixed devices used by security and transportation bureaus to detect people’s faces and identities, is expected to grow at a 29.53% compound annual growth rate (CAGR) from 2017 to 2023, said the market research firm.

人民日报人民时评:网络直播当纳入法治轨道--观点--人民网 expect more crackdowns on Internet live-streaming...8.23 page 5 People's Daily piece calls for Internet live-streaming to be "brought into the law's orbit"

Alibaba Escalates Attack on Meituan Ahead of Rival's IPO - Bloomberg Ma’s Alibaba Group Holding Ltd. is merging its Ele.me and Koubei units and injecting it with more than $3 billion from a funding round led by SoftBank Group Corp. That will give it more ammunition to take on rival Meituan Dianping as it tries to seize control of China’s $1.3 trillion food delivery and online services industry.

Air Conditioner Firm’s Plan to Develop Chips is Hot Air, Observers Say - Caixin Global The new venture, Zhuhai Lingbianjie, was set up on Aug. 14 with 1 billion yuan ($145 million) of registered capital and Gree as the sole shareholder. It will be involved in the production of chips, semiconductors and electronics, according to Qichacha (link in Chinese), a company data provider.

 

Society, Art, Sports, Culture And History

Top Chinese Buddhist monk Xuecheng faces police investigation after #MeToo sexual harassment claims upheld | South China Morning Post Police investigating whether Longquan Temple abbot broke the law after report finds he harassed women and mishandled temple funds

Hundreds of thousands displaced as Shenzhen ‘upgrades’ its urban villages | Cities | The Guardian The city has turned to a handful of private companies for its urban village redevelopment, chief among them being Vanke. The Shenzhen-based Fortune 500 company is working on 33 villages, each with a population of 10,000-30,000. Vanke sees itself as “reimagining urban spaces to provide people with a more comprehensive living experience”.

 

Agriculture And Rural Issues

China corn rallies as Beijing signals support for ethanol plan | Reuters China will promote the use of ethanol in 15 regions this year, including the Beijing and Tianjin municipalities and Hebei province, according to a post on the government’s official website that summarized a Wednesday meeting of the nation’s State Council.

 

Beijing

Road to Glory: Beijing Introduces its First Scramble Intersection, and Jaywalking Shaming Screens Come to Zhongguancun | the Beijinger after previous attempts to control jaywalkers have proven to be largely unsuccessful, Beijing hopes to rein in its red light runner problem by introducing giant video screens that loom high above several Zhongguancun intersections. Following the first local implementation of the system in Tongzhou last April, the screens are part of a traffic control campaign designed to coerce pedestrians into complying with traffic rules by publicly shaming them.

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