New round of tariffs; Apple catches a car IP thief; Huawei sued over fake front companies; No room for a reformist think tank; "The People's Leader from the Yellow Earth"

Most of us were expecting another round of US tariffs against Chinese goods but I am not sure many thought President Trump would add an additional $200B so quickly. The new tariffs announced Tuesday evening by the US Trade Representative will not come into effect for at least a couple of months so there is time for negotiations, though so far there are no indications either side is willing to take the first step to break the cycle of escalation.

Have we seen a clear explanation from the Trump Administration of exactly what the US wants China to do to have the tariffs dropped?

I am worried that top Trump advisers believe that the Chinese economy is so fragile that all it will take is a bit of a push from the US and the economy and likely the Communist Party will collapse. I do not believe that is the assessment of the intelligence community nor do I think it comports with reality. But it is a very popular ideological view and one that in certain DC quarters seems to have become almost a litmus test.

President Trump for decades has wanted to punish China for its many trade predations. If he is now going after the PRC but basing his actions in part on faulty assumptions then it is even harder to see a positive outcome. I hope I am wrong, but hope is not a strategy.

Thanks for reading.

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The Essential Eight

1. US-China trade war

Statement By U.S. Trade Representative Robert Lighthizer on Section 301 Action | United States Trade Representative

“On Friday, in response to unfair Chinese practices, the United States began imposing tariffs of 25 percent on approximately $34 billion worth of Chinese imports. These tariffs will eventually cover up to $50 billion in Chinese imports as legal processes conclude. The products targeted by the tariffs are those that benefit from China’s industrial policy and forced technology transfer practices.

“China has since retaliated against the United States by imposing tariffs on $34 billion in U.S. exports to China, and threatening tariffs on another $16 billion. It did this without any international legal basis or justification.

“As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports. This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies. USTR will proceed with a transparent and comprehensive public notice and comment process prior to the imposition of final tariffs, as we have for previous tariffs.

The new list, in PDF 

The Chinese imports that will be hit hardest by the new round of proposed US tariffs | Business Insider:

The table below from UBS provides a rough guide on what imports will be affected most, detailing the dollar value of imports being targeted based on trade data from last year.

It shows the new proposals affect almost $US49 billion worth of electrical goods, along with around $US38 billion in machinery parts. Some $US29 billion worth of furniture and over $US11 billion in vehicle imports will also be hit.

China's MOC spokesperson makes remarks about U.S. announcement of list of tariffs on 200-bln-USD Chinese goods - Xinhua:

"The United States has unveiled the list of tariffs in an escalating manner. This is totally unacceptable, and we express our solemn protest against this," the spokesperson said.

"By doing this, the United States is hurting China, hurting the whole world, and hurting itself. The irrational act goes against the will of the people.

"China is shocked by what the United States did. To defend the core interests of the nation and the fundamental interests of the people, the Chinese government will, as always, be forced to take necessary countermeasures. In the meantime, we appeal to the international community to jointly defend free trade rules and the multilateral trade regime and fight trade bullying.

"We will immediately lodge an additional complaint with the WTO over the unilateral acts of the United States."

China Vows Retaliation Against Trump's $200 Billion Trade Threat - Bloomberg:

In its response, the Commerce Ministry’s dropped a line from a previous statement that it would fight Trump’s tariffs with the "same scale and intensity."

Tao Wang, head of China economic research at UBS AG in Hong Kong said China may decide against an aggressive response in order to limit the fall out to its own economy.

"While we think China may retaliate in certain areas against U.S. imports and business interests in China, it will unlikely do so aggressively or explicitly so as to inflict the same amount of damage on U.S. companies or invite additional retaliation from the U.S."

China to its state media: keep calm, don't inflame trade row with U.S. | Reuters:

Beijing has issued unusually strict rules limiting coverage of the trade war because of worries that unrestrained reporting could spark instability or roil its already jittery financial markets, according to sources within Chinese state media.

“When exposing and criticizing American words and actions, be careful not to link it to Trump and instead to aim it at the U.S. government,” said a memo based on a set of directives issued verbally by government officials that was circulated to reporters at a state-run news outlet and seen by Reuters...

A person who works at a leading Chinese news website said the rules issued last week were “the most strict yet”.

People's Daily online account "Xiake Dao" discusses the impact of the US tariffs on China, says China can handle them, in fact says they might even be an opportunity to start indigenously producing some high-end products--侠客岛:认真聊聊贸易反制对中国和民众的影响-腾讯网 :

综上研判,可以说,中方这部分贸易反制的代价是可以承受的。如果利用得好,也可能成为某些相关高端产品国产化的契机。

U.S. says the reckoning over China trade is too big for WTO | Reuters:

“Given China’s very large and growing role in international trade, and the serious harm that China’s state-led, mercantilist approach to trade and investment causes to China’s trading partners, this reckoning can no longer be put off,” Shea said at a two-yearly review of China’s trade policies, according to a copy of his remarks prepared for delivery at the meeting

EU to Join Trump in Criticizing China's Role in Global Trade - Bloomberg:

U.S. President Donald Trump’s assault on China’s trade policies will garner several high-profile advocates on Wednesday, as some of the world’s largest commercial regions will meet in Geneva to thresh out the ramifications of Beijing’s entrance into the World Trade Organization 17 years ago.

Chinese representatives will say things are going well and that the nation is taking steps to open up its vast economy, according to people familiar with their stance. The U.S., the European Union, Japan and others will disagree and are expected to criticize China’s failure to embrace market-based principles and reform its intellectual property and subsidy regimes, said the people, who asked not to be named because the meeting hasn’t happened yet.


2. FBI arrests Chinese employee of Apple for IP theft

Ex-Apple engineer arrested on his way to China, charged with stealing company’s autonomous car secrets - The Washington Post:

For about two years, Xiaolang Zhang was privy to information to which many in the tech world can only dream of having access: the inner workings of Apple’s secretive autonomous car research.

Over the weekend, the former Apple engineer was arrested by U.S. authorities at San Jose International Airport while preparing to board a flight to China and charged with stealing proprietary information related to Apple’s self-driving car project. At the time of his arrest, he said he was working for a Chinese start-up that is also developing autonomous vehicles, according to a criminal complaint filed in federal court in San Jose on Monday by the FBI and the U.S. attorney’s office.

Zhang, who started working at Apple in December 2015, was accused of downloading files that included engineering schematics and technical reports before leaving to work for Xiaopeng Motors, a Guangzhou-based company also known as XMotors, documents said. XMotors could not be reached for comment.

The complaint

Chinese Employer Cooperating in FBI Investigation of Ex-Apple Worker - Caixin Global:

Xiaopeng Motors said Wednesday that it sealed the computer and office equipment of Zhang Xiaolang after it was informed on June 27 that U.S. authorities were investigating him. The company said it will continue to actively cooperate with authorities.

In a statement, Xiaopeng said Zhang joined the company in early May and signed an intellectual property agreement on his first day, and that there was no record that he had reported any sensitive issues or violations to his current employer.

Comment; The complaint says he was arrested at the airport as he was trying to fly on a one way ticket to Hangzhou via Beijing, and that he had been said he had been working in the Mountain View office of Xiaopeng Motors. If the FBI finds any evidence of management collusion or knowledge of the alleged theft then authorities should pursue Xiaopeng Motors, and Apple should sue the company and its investors...If this stops at a low-level employee taking the fall then there is 0 incentive for other people and companies to not keep attempting this kinds of IP theft

China’s Hot Electric Car Market Gets Jolt of Alibaba Money — The Information July 6:

Xiaopeng Motors, backed by e-commerce giant Alibaba, is in talks to raise $600 million to $700 million from Alibaba and other investors at a valuation close to $4 billion, people familiar with the discussions said. The previously unreported fundraising will be a combination of U.S. dollars and Chinese yuan. It comes months after the four-year-old startup, which uses Xpeng as its brand name, raised about $350 million in January in a round led by Alibaba and Foxconn, the world’s largest electronics contract manufacturer. Xpeng’s spokeswoman declined to comment on fundraising plans...

To move ahead of other Chinese rivals, Xpeng is beefing up its own research and development capabilities. After creating a U.S.-based R&D team in December, the company two months ago opened the Mountain View research center. The R&D team, headed by former Tesla autopilot tech lead Gu Junli, focuses on autonomous driving and other software-related technologies.


3. Apple's Taiwan Emoji Mess

iPhone crashing bug likely caused by code added to appease Chinese gov’t | Ars Technica:

The iOS 11.4.1 update Apple released Monday was most notable for making it harder for law enforcement to access locked iPhones. On Tuesday, security researcher Patrick Wardle illuminated another fix. He said his fix addressed code Apple added likely to appease the Chinese government; this is the code that caused crashes on certain iDevices when users typed the word Taiwan or received messages containing a Taiwanese flag emoji.

“Though its impact was limited to a denial of service (NULL-pointer dereference), it made for an interesting case study of analyzing iOS code,” Wardle, a former hacker for the National Security Agency, wrote in a blog post. “And if Apple hadn’t tried to appease the Chinese government in the first place, there would be no bug!”

Objective-See - A Remote iOS Bug:

In this blog post, we tracked down the cause of a remote iOS flaw.

Though its impact was limited to a denial of service (NULL-pointer dereference) it made for an interesting case study of analyzing iOS code.

...and if Apple hadn't tried to appease the Chinese government in the first place, there would be no bug!

Comment: This looks bad, the kind of thing that in the current environment will get members of Congress to call execs to testify about...


4. Huawei sued over fake companies for corporate espionage

Huawei in Santa Clara infiltrated summit at Facebook, sent trade secrets to China: lawsuit – East Bay Times:

Jesse Hong says in the lawsuit that he was a software architect for Chinese smartphone giant Huawei’s subsidiary Futurewei Technologies in Santa Clara from 2014 until he was fired in March of this year. He alleges that in 2016, Huawei directed two Futurewei employees to deceive their way into an annual “TIP Summit” for telecommunications companies — most of them startups competing against Huawei — that was held at Facebook’s headquarters in Menlo Park.

The alleged infiltration occurred after Facebook had denied Huawei’s request to attend the social networking firm’s closed-door meeting with U.S. companies, according to the suit. Huawei told Hong and two other Futurewei employees to register for the meeting using fake U.S.-company names, Hong claims in the suit, which was filed late last month in Santa Clara County Superior Court.

Comment: Interesting insight into the Huawei culture if these allegations are true, wonder how many other front companies Huawei uses in the US and other places...Can't imagine this will help Huawei in the US, or other Western countries

Australia prepares to ban Huawei from 5G project over security fears | Reuters:

Australia is preparing to ban Huawei Technologies Co Ltd from supplying equipment for its planned 5G broadband network after its intelligence agencies raised concerns that Beijing could force the Chinese telco to hand over sensitive data, two sources said...

Other Western countries, including the New Zealand, Canada and Germany, also say they have sufficient safeguards for assuring that Huawei equipment does not contain “back doors” or other mechanisms for secretly monitoring or collecting information.

But Australian intelligence agencies have told lawmakers that oversight will not allay their concerns, two political sources who have been briefed on the matter told Reuters.

Washington’s move on China’s ZTE may be just a warm-up act - Financial Times $$:

The company’s new president has spent two decades with the company, and last served as assistant to his predecessor. Of the three incoming executive vice-presidents, two are internal promotions (including another 20-year staffer) and the third worked as assistant to the dean of the China Aerospace Electronics Technology Research Institute, an indirect Zhongxingxin shareholder.

Such a tight-knit structure makes it hard to imagine that US monitors, even Mandarin-speaking ones, will be able to get a handle on ZTE. The company has also shown its willingness to throw competitors under the bus. Part of its 2011 submission to the BIS over export violations included a detailed section on another company that had been selling into Iran. The authors helpfully detailed the structure that the company, which it called “F7”, used to carry out projects in embargoed countries, peppering it with information that has been widely seen to match Huawei


5. Qin Yongmin gets 13 years as Liu Xia is released 

In case you thought Liu Xia's release meant anything about the overall human rights situation...

Leading Chinese dissident Qin Yongmin jailed for 13 years for ‘subversion’ | AFP

Qin Yongmin was found “guilty of subversion of state power”, the Wuhan City Intermediate People’s Court said on its official website.

According to court records, it appears to be the heftiest sentence handed down in China for “subversion” in the past 15 years.

On the eve of freedom, a glimpse inside Liu Xia's flat - AFP:

Judging by her apartment on the eve of her departure from Beijing to Germany, Liu Xia seemed completely unaware of her impending freedom -- or perhaps unwilling to believe it.

AFP on Monday evaded tight security to gain rare access to the fifth-floor duplex apartment where the poet has been held under de facto house arrest since her dissident husband Liu Xiaobo won the Nobel Peace Prize in 2010.

No bags or boxes had been packed in her wood-panelled, booklined home.

Instead, in the centre of her living room stood a large, unfinished white canvas, a square half-filled with cramped black numbers, painted obsessively into orderly rows: "20170713, 20170713..."

"It's the date of Liu Xiaobo's death," she explained.

Properly managing dissidents a challenge for China - Global Times:

Liu Xia indeed has been within sight of Chinese authorities over the past year, but definitely not under house arrest. She lives normally in a community in Beijing and is free to meet family and friends, go shopping and play badminton in the training court.

Recently dissidents have been somewhat limited in making their voices heard on public platforms, but they enjoy ample personal freedom under most circumstances. This differs completely from what life was like before the reform and opening up. Today, China doesn't want dissidents to hamper national development, but it never means to persecute them. Yet when Western media report on dissidents in China, some dissidents also like to make a show of it.

As the widow of the most widely known dissident in China, Liu Xia appears to have no interest in being a typical dissident herself. Certain Western forces must exercise restraint and stop taking advantage of her.

The West focuses ardently on dissidents and uses human rights as a geopolitical card, rather than truly caring for China's endeavor to promote human rights.


6. Bureaucratic moves in the war on air pollution

China Focus: Top legislature holds joint inquiry meeting on air pollution control - Xinhua:

The NPC Standing Committee sent four teams to eight provincial-level regions to check the implementation of the law from May to June. They also entrusted local legislatures in the other 23 provincial-level areas with inspections.

During the inquiry, legislators asked questions about measures to prevent and control air pollution, control over emissions discharged by diesel-powered vehicles, industrial structure adjustment, and efforts to raise public awareness of the law, among others.

State Councilor Wang Yong and officials from the Ministry of Transport, State Administration for Market Regulation, the Ministry of Industry and Information Technology, the Ministry of Ecology and Environment, National Development and Reform Commission and the Ministry of Justice, and those in charge of the Supreme People's Court and the Supreme People's Procuratorate answered the questions.

Li called for implementation of laws and decisions on ecological and environmental protection to prevent and control pollution.

Air pollution prevention group revamped - Gov.cn:

The State Council released a circular on July 3, stating a prior collaboration group on air pollution prevention in Beijing, Tianjin, North China’s Hebei province, and adjacent regions will be readjusted and renamed a leading group on air prevention instead.

According to the circular, the newly established leading group will be in charge of implementation of policies on air contamination, joint control of air pollution, overall planning and supervision on pressing matters and research on measures improving regional air quality.

The leading group will be helmed by Vice-Premier Han Zheng and flanked by four deputy heads — Li Ganjie, minister of ecology and environment, Chen Jining, mayor of Beijing, Zhang Guoqing, mayor of Tianjin, and Xu Qin, governor of Hebei province.

国务院办公厅关于成立京津冀及周边地区 大气污染防治领导小组的通知 国办发〔2018〕54号 

Comment: Good news for Beijing air. The group also includes senior officials from Shanxi and Inner Mongolia. There is a reason the Party calls it a "tough battle" but at least around Beijing do not be surprised to see significant progress


7. China leaving nothing to chance in upcoming Cambodian election?

Chinese hackers breach Cambodian government ahead of country's general election:

In the run up to Cambodia’s general election on July 29, a hacking group tied to China has been breaking into multiple organizations that share a connection to either the country’s main opposition party, voting process or human rights movement, according to new research and additional analysis provided by U.S. cybersecurity firm FireEye.

The findings — made possible through a glaring operational security mistake where hackers left their attack servers exposed on the open internet — help illustrate how governments are leaning on cyber-espionage capabilities to learn about foreign elections.

FireEye collected this intelligence by directly accessing the attack servers, which weren’t protected with a password...

Several leading government agencies that are largely controlled by the ruling political party, the Cambodian People’s Party (CPP), have also been breached. Those attacked organizations — which are responsible for both domestic and foreign policy — include the Ministry of the Interior, Ministry of Foreign Affairs, Cambodian Senate, and Ministry of Economics and Finance, according to FireEye.

Comment: Beijing just making sure its political investments are safe?

The report -Chinese Espionage Group TEMP.Periscope Targets Cambodia Ahead of July 2018 Elections and Reveals Broad Operations Globally « Chinese Espionage Group TEMP.Periscope Targets Cambodia Ahead of July 2018 Elections and Reveals Broad Operations Globally


8. Reformist think tank may not make it through 40th anniversary of reform and opening

In Beijing, Doors Shut on a Bastion of Independent Ideas - The New York Times:

An independent think tank that was one of China’s few remaining bastions for liberal-democratic ideas was shut out of its Beijing offices on Wednesday, throwing its survival into doubt.

Some workers at the think tank, the Unirule Institute of Economics, found themselves briefly trapped inside when the company that manages the lease on the institute’s offices locked and welded its door shut.

Unirule was founded 25 years ago to promoteliberalizing China’s economy and democratizing its government. Those ideas have become officially unwelcome under Xi Jinping, the Communist Party leader who has driven China to re-embrace staunchly socialist values, and the group has come under increased government pressure.

Shen Hong, executive director of Unirule, posted a video of the bars going up to his Twitter feed:

Sheng Hong@flourishflood

今天下午四点半左右,爱家营公司派了几个工人,公然用铁栅栏将天则所办公室的门焊死,并锁上。
The letting agent ordered workers to block the doors of the Unirule's office at 4:30 this afternoon. pic.twitter.com/JkA8YeFI06

July 10, 2018


Business, Economy, Finance And Trade

China Plans to Strengthen Control Over State Financial Institutions - Caixin Global China’s top policymakers signaled that the country’s state-owned financial institutions, including banks, securities firms and insurance companies, will remain at the heart of financing the country’s development, and they called for improvements in the management of the companies and the funds they control to better serve the economy...The guidelines [中共中央 国务院关于完善国有金融资本管理的指导意见 ] gave specific requirements for improving the management of state-owned financial capital, including the clarification of the role and responsibilities of various state actors. The Communist Party’s leadership over state-owned financial institutions will be strengthened and its supervision over capital will be enhanced, according to the document.// Comment: So all those foreign financial firms excited about new promises of market opening should set very low expectations? Hard to imagine that foreign firms will ever be allowed to get more than crumbs from the margins, along with opportunities to purchase really bad debt Chinese firms have already passed on...

China Vows Continued Tight Grip on Internet Finance - Caixin Global Regulators will take an additional one to two years to correct the online financial market, dissolve financial risks and set up a long-term regulatory system, said Pan Gongsheng, deputy governor of the People’s Bank of China, who oversees the campaign against online financial risks. A nationwide task force initiated by the central bank in April 2016 to clean up online financial fraud and violations will continue its efforts after shutting down more than 5,000 operations, according to the PBOC. The campaign was originally scheduled to be complete by March 2017 but was extended for the first time to the end of June this year

P2P“大崩盘”:上百家平台爆雷 众多投资人卷入其中|P2P|爆雷|投资_新浪科技_新浪网 Since June more than 100 Internet P2P financing platforms have gone under...

After Tesla deal, Shanghai to speed up cancellation of foreign ownership limits | Reuters Shanghai will accelerate efforts to cancel restrictions on foreign investment in the auto manufacturing sector, a government official said on Wednesday, a day after Tesla (TSLA.O) said it would build a wholly owned auto plant in the city.

Local Governments Cut Back on Bonds - Caixin Global Local governments issued 1.41 trillion yuan ($211.7 billion) in bonds in the first half of 2018, about 24% less than in the same period in 2017, according to a report by China Chengxin International Credit Rating Co. Ltd. Bond issuances are likely to ramp up in the second half of the year, however, with an average of 307.9 billion yuan worth of bonds likely to be issued every month. Controlling financial risks, such as excessive or murky government debt, is one of the Chinese leadership’s top three economic priorities this year. China’s outstanding local government debt, not including off-the-books debt, was 16.51 trillion yuan at the end of 2017, according to government data, equivalent to about 20% of China’s gross domestic product.

ZTE executives meet with US Commerce Department officials to work out final details of compliance deal | South China Morning Post A group of newly appointed senior ZTE managers – led by chief executive Xu Ziyang, who was named last week – held talks with officials of the department’s Bureau of Industry and Security in Washington on Monday, said two of the sources, who asked not to be named because the discussions were private. The parties discussed technical details of a required escrow account, among other conditions US Commerce Secretary Wilbur Ross put forward in a deal that will pull the company from the brink of collapse, the sources said.

Chinese Tariffs on U.S. Energy Would Signal a New Attitude - Bloomberg If the Chinese do move ahead with these tariffs on energy trade, that will do more than create hardship for U.S. businesses. It will strike one item off the rapidly dwindling list of areas in which the U.S. and China can identify common interests and see value in cooperation. Just six weeks ago, the Brookings Institution predicted that a burgeoning trade in natural gas between China and the U.S. could be a lubricant to bilateral relations. It certainly seems like a long shot today.

So Long, Xiamen Fishers, and Thanks for All the Fish - SixthTone Yu believes that the government made up an excuse so that it could lay its hands on the area’s prime real estate. Shapowei is near popular Buddhist site Nanputuo Temple, and historic island Gulangyu is just a short boat ride away. Even the scenic campus of Xiamen University — also within walking distance — is a tourist attraction, to say nothing of the nearby beaches. On May 8, 2015, the city’s Siming district government announced that it would indefinitely close Shapowei harbor to all ships. The city said it wanted to “establish a beautiful ecosystem” — in other words, it spelled the end of Shapowei’s fishing history.

China’s Sovereign Fund Moving Ahead With U.S. Fund, Despite Tariff Fight - WSJ China Investment Corp. and Goldman Sachs Group Inc. formed the fund to invest in U.S. industrial firms and other sectors in November, part of a number of deals Chinese and U.S. businesses announced during President Donald Trump’s visit to Beijing. While some of those deals, such as Chinese purchases of U.S. natural gas, have been put on hold due to the trade tensions, CIC President Tu Guangshao said the fund’s launch is moving forward.

AC Milan soccer team taken over by hedge fund Elliott Management - MarketWatch Singer’s hedge fund, Elliott Management, took over the team after the previous owner defaulted on its debt payments. The New York hedge fund helped finance the team’s sale last year, ending three decades of ownership under former Italian Prime Minister Silvio Berlusconi and turning control of the team to Chinese businessman Yonghong Li.

 

Politics, Law And Ideology

CCTV is out with another hagiographical short video about Xi and his time at Liangjiahe- 从黄土地走来的人民领袖 The People's Leader from the Yellow Earth...interesting special affects and soundtrack... and interesting that is claims he is the only major world leader to have gone from beijing a peasant to being a leader...guess the whole Princeling part wasn't convenient to mention. Here it is on Youtube:

晋江经验:世纪之初的探索和总结|围头村|晋江_新浪新闻 CCTV on the "Jinjiang experience", highlighting a beacon of reform and opening in Fujian, and of course giving Xi credit from his time in the province...// “晋江经验”的提出,来自于1996年到2002年期间,习近平七下晋江,下企业、进社区、访农村、走基层,在实地调研中总结提出。

China's biggest bank corruption criminal repatriated from U.S. | Reuters He was convicted of the crime and sentenced to a 25-year prison term in the United States in 2009 and had been serving his time there, China’s Central Commission for Discipline Inspection (CCDI) said in a statement, until he accepted repatriation following pressure by U.S. and Chinese authorities. More than 2 billion yuan ($300 million) of the amount Xu stole has been recovered, the agency added.// The CCDI report, with pictures of his return 中国银行开平支行案主犯许超凡 被从美国强制遣返

Former Chinese securities regulator deputy chief stands trial for bribery, insider trading - Xinhua Yao Gang, former vice chairman of the China Securities Regulatory Commission (CSRC), stood trial on Wednesday for taking bribes and insider trading at the Intermediate People's Court of Handan in north China's Hebei Province. Yao is accused of using his positions to seek benefits for certain organizations and in return accepting money and property worth of over 69.61 million yuan (10.46 million U.S. dollars) through his family members between 2006 and 2015.

Yizhuang Campus of Beijing’s Largest House Church Forcibly Barricaded - Christian News Headlines International Christian Concern (ICC) has learned that on July 5, Yizhuang campus of Zion Church, the largest house church in Beijing, has been blockaded by a group of “thugs” employed by the local authorities. The group prevented church members from entering the third floor where the campus is located and hurled insults and threats at the Christians, calling their faith a cult.

China Forces Young Tibetan Monks From Their Monasteries - RFA Chinese authorities in a Tibetan-populated region of Sichuan are forcing Buddhist monks aged 15 and under to leave their monasteries, placing them instead in government-run schools, Tibetan sources say. The move has been backed by threats to punish monastery administrators and the monks’ parents and religious instructors in cases of noncompliance, a Tibetan living in New York told RFA’s Tibetan Service on Tuesday, citing reports in Tibetan social media.

 

Foreign and Military Affairs

China Focus: China, Arab states to forge strategic partnership - Xinhua Chinese President Xi Jinping delivered a speech at the opening ceremony of the eighth ministerial meeting of the China-Arab States Cooperation Forum Tuesday morning at the Great Hall of the People in Beijing. Xi announced that China and the Arab countries had agreed to establish a "Sino-Arab future-oriented strategic partnership of comprehensive cooperation and common development." Calling the Arab states China's natural partners in Belt and Road cooperation, Xi said the cooperation had energized every dimension of Sino-Arab relations and propelled Sino-Arab all-round cooperation into a new phase. China stands ready to work with the Arab side to coordinate the development strategies and actions, Xi said.

China pledges US$23 billion in loans and aid to Arab states as it boosts ties in Middle East | South China Morning Post: Beijing will also further explore the possibility of free-trade deals with each of the 22 states in the Arab League, as Xi reiterated commitments to globalisation at a time when China is locked in a trade battle with the US.

China is Kenya's largest creditor with 72% of total bilateral debt — Quartz Kenya’s public debt load recently surpassed the 5 trillion shillings mark ($50 billion), renewing questions over the government’s borrowing binge, how it would show the proceeds in terms of economic growth, and whether it could repay these loans in the long run. Much of that lending has come from China in recent years, but new data shows that Kenya’s obligations to Beijing go much deeper than many ordinary Kenyans realize. China is now by far Kenya’s largest lender accounting for 72% of bilateral debt by the end of March, according to documents from the Treasury obtained by Kenya’s Business Daily newspaper.

China to boost defense, security cooperation with Africa: defense minister - Xinhua State Councilor and Minister of National Defense Wei Fenghe on Tuesday stressed China-Africa cooperation in defense and security during his meeting with representatives from 49 African countries at a forum in Beijing..The first China-Africa Defense and Security Forum, attended by representatives from China, African countries and the African Union, opened on June 26 and closed Tuesday....At the forum, representatives held discussions and reached consensus on topics including the community of shared future between China and Africa and military relations in the new era.

U.S., Australia undermining China's trading relationship with Canada, ambassador suggests | CBC News China is keen to launch formal free trade talks with Canada, but its envoy to Ottawa suggests that Canada's own allies could be souring the relationship. During an hour-long interview with CBC News conducted Monday through an independent Mandarin translator, China's ambassador to Canada accused the United States and Australia of smearing China's reputation.

Chinese Media and Latin America: “Borrowing a Boat” to Set Sail - Jamestown “Though we’re geographically distant, we’re all developing countries and the progress and well-being of our populations are common objectives,” Liu Biwei, vice-president of the China Public Diplomacy Association, a soft-power-focused organisation, said on opening the China-Latin America & Caribbean Press Center in Beijing last month (Andina, May 22 2018). The center, which brings journalists from Latin American media outlets to China for cultural immersion programs lasting five to six months, was heralded in 2016 by President Xi Jinping, who said on a visit to Peru that parties must “share the fruits of cooperation so that the vessel of common destiny benefits its people” 

Jeremy Hunt, China’s go-to British minister, ‘may be off-limits’ after promotion to foreign secretary | South China Morning Post Britain’s new foreign secretary may have burnished his credentials as someone knowledgeable on China but his attention for the coming year will be helping secure a Brexit deal rather than Asia, according to diplomatic and business representatives...He married Chinese-born Lucia Guo a decade ago. Also a Japanese speaker, Hunt was a “remainer” during the 2016 referendum that resulted in Britain voting to leave the European Union.

The One Belt One Road Initiative | Taylor & Francis Online This collection features some of the latest published research on the One Belt One Road Initiative, including a bonus special issue feature from Maritime Policy & Management on the challenges, opportunities and impacts of the Belt and Road Initiative. We hope you will find papers in this collection insightful. Feel free to share this with your peers who might be interested. All articles are only free to access via this page until 30th June 2019.

Belt and Road reality check: How to assess China’s investment in Eastern Europe | Mercator Institute for China Studies The reality of Beijing’s investment in Central and Eastern European countries falls short of the rhetoric at the 16+1 summits. Numbers on Chinese investment connected to the Belt and Road Initiative tend to be inflated and misleading. Only a fraction of the reported sums is connected to actual infrastructure projects on the ground. And most of the projects that are underway are financed by Chinese loans, exposing debt-ridden governments to additional risks.Great fanfare and grandiose promises have been the hallmark of previous 16+1 summits. The sixth annual summit of the sub-regional platform initiated by China with sixteen Central and Eastern European (CEE) countries on July 7 was different. The initial Eastern European euphoria about China’s investment promises has given way to a more sober mood – with some heads-of-government who had been eager to attend in the past keeping a distance from the event.The new skepticism is justified. As the database behind the MERICS Belt and Road Tracker shows, most of the promised infrastructure funding has not yet materialized.

Alleged Malaysian 1MDB mastermind Jho Low flees Macau for mainland China | South China Morning Post The exact whereabouts of Low Taek Jho – who had earlier skipped Hong Kong for the world’s richest casino hub while facing an Interpol arrest warrant – are unclear. But sources have told the Post that Low, 37, is now on the mainland, having travelled from the former Portuguese enclave either by car or private jet.

PLA initiates recruitment of civilian staff through public exam - Ministry of National Defense This is the first time that the Chinese military has decided to enroll civilian staff via the public examination since its deployment of deepening national defence and military reform, and a move designed to attract talented people nationwide to meet the military's urgent needs of professionals for some important and key positions.

Welcome to the modern military: China’s new combat units prepare for electronic warfare | South China Morning Post The war games, which started on Monday and test reconnaissance, electronic communication, cybersecurity, air strikes and other battle skills, are aimed at increasing ground troops’ understanding of modern warfare, and fostering new strategic ground force commanders after a sweeping PLA overhaul. More than 50 combat units involving about 2,100 officers are taking part at five training bases. They include airborne troops, special forces and electronic warfare experts from ground forces from the Eastern, Western, Northern, Southern and Central command theatres, according to official social media accounts.

Why Berlin is the favorite city of Chinese dissidents — Quartz “Many Chinese dissidents are artists, authors, and thinkers. Here in Berlin, they can find like-minded people and a support network. There are venues to organize events. Medical treatment and support from political institutions are also available,” said Kristin Shi-Kupfer, director of the research on public policy and society at the Mercator Institute for China Studies (MERICS) in Berlin.

 

Tech And Media

Chinese Luckin Coffee Raises $200M Series A Round From GIC At Unicorn Valuation – China Money Network Beijing-based on-demand coffee delivery service start-up Luckin Coffee has completed US$200 million series A round of financing from Singapore’s sovereign wealth fund GIC, China’s Legend Capital, Joy Capital, and Centurium Capital, according to its official announcement. This fundraising round values Luckin Coffee at US$1 billion, reaching a unicorn valuation

China Bans Ads on Booming Video App - WSJ An app called Douyin has won over millions of Chinese fans by serving up an eclectic array of 15-second videos featuring lip-syncing teenagers, cute dogs doing tricks and fabulous-looking people flaunting designer fashions. One thing viewers aren’t seeing right now are advertisements. Chinese authorities ordered Douyin’s parent company, Beijing Bytedance Technology Co., to suspend ads indefinitely after a search engine ran a promotional spot for the app that officials said made light of Qiu Shaoyun, a venerated Chinese soldier in the Korean War.

China's Risqué Live-Streaming Apps Are Now Objectifying Men Too - Bloomberg Companies including YY Inc. (which has a $6 billion-market capitalization) and Momo Inc. ($9 billion) are adjusting their product offerings as educated women in China with higher incomes demand virtual entertainment that caters to their needs. The platforms are coming up with content that caters to women -- adding sections targeted to their interests in gaming, outdoor sports, anime, and ahem, good-looking men.

Chinese mobile phone cameras are not-so-secretly recording users’ activities · Global Voices Last month, users of Vivo NEX, a Chinese Android phone, found that when they opened certain applications on the phone, including Chinese internet giant QQ browser and travel booking app Ctrip, the mobile device’s camera would self-activate.One Weibo user observed that the retractable camera self-activates whenever he opens a new chat on Telegram, a messaging application designed for secured and encrypted communication. While Telegram reacted quickly to reports of the issue and fixed the camera bug, Chinese internet giant Tencent instead defended the feature

China’s first official bike rental bankruptcy leaves RMB 800 million of deposits in limbo · TechNode Bike rental company Xiaoming has officially begun bankruptcy proceedings becoming China’s first bike rental company to do so. The decision of the Intermediate People’s Court of Guangzhou, which was in charge of the case, was announced yesterday, July 10th, the Paper reports.

Bike-Sharing Giant Ofo Puts Asia Expansion in Reverse: Source - Caixin Global Bike-sharing giant Ofo plans to slim down its Asia operations to four overseas markets — Japan, South Korea, Hong Kong and Singapore — as it focuses on its most promising areas in a bid to become profitable, a knowledgeable source told Caixin.

 

Society, Art, Sports, Culture And History

Liaoning Province plans to reward couples for having two children - Global Times Northeast China's Liaoning Province plans to reward couples who give birth to two children on taxes, education and housing - the first province to introduce such incentives. 

 

Energy, Environment, Science And Health

How ‘Citizen Science’ is Helping Save China’s Environment - SixthTone One increasingly popular method by which NGOs are helping to facilitate cooperation between locals and outside scientists is known as “citizen science” — a means of environmental monitoring and protection that works to involve local residents in scientific work, such as data collection efforts. With the popularization of big data and social media, citizen science — which can involve anything from locals monitoring and reporting wildlife sightings on smartphone apps and residents taking photos of water pollution, to herdsmen keeping an eye on grasslands and tracking desertification — has become increasingly common around the world. In China — where traditional knowledge and practices still carry significant weight — it is proving to be an indispensable tool. 

 

Agriculture And Rural Issues

Producer Admits Illicit Sale of Genetically Modified Corn Seeds - Caixin Global Shandong Denghai Seeds Co., Ltd said on Tuesday that its subsidiary in Yili prefecture in the Xinjiang autonomous region sold GM seeds to a local corn farmer who planted them over more than 420 acres of farmland in Gongliu county in Yili. The admission, made in a filing to the Shenzhen Stock Exchange, followed the company’s disclosure on July 5 that three of its employees, including a deputy general manager, were taken into custody by police in May over allegations they were involved in illegal business operations linked to the sale of GM corn seeds.