October US-Trade talks; Hu Chunhua talks pigs; Beijing buying away another Taiwan ally; Fake meat

The next round of US-China trade talks is set for “early” October, not September as some had been speculating. While I am not optimistic for any big breakthroughs there are signs in the announcement and some of the propaganda coverage that there may be some positive news in the run up to the talks, perhaps some sort of agreement for the US to drop some of the tariffs scheduled to go into effect October 1 and for China to finally make an agricultural purchase to satisfy President Trump.

Thanks for reading.

The Essential Eight

1. US-China

China, U.S. agree to jointly create favorable conditions for trade talks in October - Xinhua

Chinese and U.S. chief trade negotiators agreed on Thursday to jointly take concrete actions to create favorable conditions for further consultations in October.

The agreement was reached in a phone conversation Chinese Vice Premier Liu He, also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, held upon invitation with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The two sides agreed to hold the 13th round of China-U.S. high-level economic and trade consultations in early October in Washington and maintain close communication before that.

Working groups of the two sides will conduct consultations in earnest in mid-September to make full preparations for the high-level talks to achieve substantial progress.

Chinese Commerce Minister Zhong Shan, Governor of the People's Bank of China Yi Gang, and Vice Chairman of the National Development and Reform Commission Ning Jizhe also took part in the phone conversation.

The official Chinese statement - 中美经贸高级别磋商双方牵头人通话-新华网


Taoran Notes on the October trade talks news - 速读 | 重启磋商 有何看点?

Taoran Notes again is cautious in saying that the public should have a “normal heart” toward the trade talks, and that 打打谈谈 “fight and talk and fight” is already the new normal of the trade war. But it added that it has been quite a while since any statement about US-China trade talks mentioned “substantial progress”, so it is expected that the two sides would make some “new moves” to address each other’s “core concerns” before the talks.

One set of moves, I think maybe hinted at by the following section about what it may take to create "favorable conditions", may be the US delaying tariffs scheduled for October 1 in exchange for agricultural buys from China?





I hear that the author of Taoran Notes travels with Liu He on his trade tripss to the US, so another data point that this account is worth listening to.

On Taoran Notes -- China insiders hint this round of trade talks could lead to a 'breakthrough' - CNBC

On Thursday, in a 1,200-word commentary, Taoran said it’s “very likely” there will be “new developments” in the upcoming trade talks.

The blog highlighted the statement from China’s Ministry of Commerce saying both sides will make consultations in mid-September in preparation for “meaningful progress” in the ministerial-level talks in October. “Meaningful progress” is an expression that hasn’t been used at all since the talks in May fell apart, Taoran noted.

Remarks by President Trump in Briefing on Hurricane Dorian | The White House

We can predict the path, but so far, the predicting has been very tough with this particular hurricane. But we have a lot of — we’ve taken in tens of billions of dollars in tariffs from China. Prices have not gone up, or they’ve gone up very little. China has paid for most of that, and I say paid for all of it. China has now had the worst year that they’ve had in 57 years. This is the worst year they’ve had in 57 years. And they want to make a deal; we’ll see what happens....

Huawei is a big concern of our military, of our intelligence agencies.  And we are not doing business with Huawei.  It’ll stop almost completely in a very short period of time.  And we’ll see what happens with respect to China.  But Huawei has been not a player that we want to discuss, we want to talk about, right now.  We’re not going to be doing business with Huawei.  We’re going to do our own business, you know, the old-fashioned way.  We’ll do right from within the United States, which is what I’ve been saying for a long time.

Thursday CCTV Evening News previews a Friday People's Daily "Zhong Sheng" commentary on the US-China trade talks - "Create conditions with concrete actions and solve problems through consultation" - 人民日报钟声文章:用实际行动创造条件,通过磋商解决问题_CCTV

'For some time, the cloud of escalating economic and trade frictions between China and the United States has not only affected the two economies, but also brought negative effects to the world economy with various uncertainties,' the article said. The issue between China and the United States cannot and should not be allowed to escalate. Therefore, the two sides must take actions, make every effort to prepare enough preconditions for talks, create conditions for talks to continue, and strive for substantive progress.


The article pointed out that China has always been rational, calm and restrained to create conditions for the resumption of consultations. The world expects China and the United States to work together in the same direction. US media described the October trade talks as "the latest attempt to defuse a trade war that has engulfed the global economy and damaged business investment and confidence". It is expected that the consultation will demonstrate the power of calmness and vision, bring about opportunities for win-win cooperation and contribute to world stability and prosperity.


The full Zhong Sheng commentary - 钟声:用实际行动创造条件,通过磋商解决问题

CCTV International sharp commentary on the trade talks - "Only rational consultation can solve problems responsibly" - 【国际锐评】理性磋商才能负责任地解决问题_CCTV节目官网-CCTV-1_央视网(cctv.com)

The commentary said that China and the United States should always follow the consensus reached by the two heads of state at the meeting in Argentina and the consensus reached at the meeting in Osaka to deepen mutual understanding, seek common ground while reserving differences, meet each other half way, and properly resolve issues on the basis of equality and mutual respect. China will continue to do its best to push forward the consultation with the utmost sincerity. At the same time, China will continue to handle its own affairs well and calmly handle all possibilities.



An earlier Zhongsheng commentary (published before the phone call) said China’s economy is in good shape despite the trade war while the US shows signs of recession. That gives China the confidence to deal with the trade war, it said.

China abides by consensuses with concrete action - People's Daily Zhong Sheng

The economic and trade consultations must be based on equality and mutual respect, and both sides are called on to honor credibility and keep the commitment. The US politicians have to meet China halfway to implement the consensuses and get back to the right track with sincerity, if they truly want to reach a mutually beneficial agreement with the Chinese side.

China’s expanding opening up indicates responsibility of major country - People's Daily Zhong Sheng

China, responding to external uncertainties by continuous efforts to expand opening-up amid the US-provoked trade frictions, is contributing Chinese wisdom and schemes to safeguarding free trade and building an open world economy.

America's trade war is spreading harm around the world - Chinese Ambassador to Australia Cheng Jingye OpEd in Australian Financial Review

China will unswervingly deepen reform and opening up. Our huge market will bring more opportunities to the world. 

We stand ready to step up communication and coordination with other stakeholders, fight against trade bullying, safeguard the rules-based multilateral trading system with the WTO at its core, and work for an international economic and trade regime which is more open, balanced and inclusive.

Maldives: US Ambassador's scathing attack rattles China at IOC

US Ambassador to South Korea Harry Harris on Wednesday launched a scathing attack on China in his address at the Indian Ocean Conference (IOC) here, leading to a tense environment which saw a Chinese diplomat in the crowd rebutting his claims.

Harris severely criticised China on a number of issues including its treatment of Uighurs, the One Belt One Road (OBOR) initiative and its behaviour in the South China Sea during his speech. This resulted in the Chinese official, Wei Hongtian, interrupting the consequent question and answer session to voice his disagreement to strong statements of Harris, also a former commander of US Pacific Command.

Chinese citizens find Trump 'perplexing' on trade war: China TV host - CNBC

“After a couple of years of President Trump’s term, I think the Chinese people have found a way to understand him,” China Global Television Network anchor Liu Xin told CNBC’s Seema Mody in a “Squawk on the Street” interview. “We’re not going to follow what he says every day because that is going to be very perplexing and exhausting actually, to a certain degree.”

Xi Jinping rallies China for decades-long ‘struggle’ to rise in global order, amid escalating US trade war | South China Morning Post

Wu Qiang, a political commentator in Beijing, said that the speech was a “political declaration of antagonism” towards those trying to change China’s model or thwart its rise.

“It is a fundamental political statement,” said Wu. “China will adopt an antagonist stance, position and approach to handle the deterioration in China-US relations.”..

An opinion piece on Xiakedao, a social media account run by the overseas edition of People’s Daily, said that China would be forced to engage in a number of different struggles.

“Struggle is always an uninvited guest and it will not go away because of our good intentions,” it read. “The trade war between China and US, for instance, broke out all of a sudden. Nobody officially notified us, even one day in advance, about the upcoming trade war,” the editorial reads. “It just came. That is a struggle.”

The Xiake Dao article - 侠客岛:关键时间节点,习近平专题长篇谈“斗争”

2. Hong Kong

HK leader says bill withdrawal own decision, not Beijing's - AP

Lam told a news conference that China’s central government “understands, respects and supports” her government in the entire process...

Lam reiterated that the government cannot accede to the protesters’ other demands. She said the police watchdog agency will be impartial and best suited to investigate alleged police misconduct, and that releasing detainees without charges would be “unacceptable.”

Hong Kong's Carrie Lam says 'no voting' on extradition bill withdrawal, but police probe faces criticism | Hong Kong Free Press HKFP

Chief Executive Carrie Lam has said the extradition bill can be withdrawn from the legislature with “no debate and no voting,” in a bid to reassure the public a day after she announced the decision.

Netizens on Wednesday noted that Lam said her security chief will “move a motion” in the legislature to formally withdraw the controversial bill. Sceptics — including the protester-organised Citizens Press Conference — said that the motion could be blocked by the pro-Beijing majority in the Legislative Council, meaning the bill would not be axed.

As Hong Kong Protesters Push On, No Sign of More Concessions by Government - The New York Times

The city’s chief executive, Carrie Lam, said she was optimistic that pulling the bill, along with other measures she offered on Wednesday, would help Hong Kong break its “impasse.” At a news conference, she called on peaceful demonstrators not to legitimize “the really violent protesters,” in what some saw as an attempt to divide the movement.

But there was little evidence that withdrawing the bill, which would have allowed extradition to mainland China, would satisfy even the more moderate demonstrators.

Home of Hong Kong pro-democracy publisher firebombed | Financial Times $$

Mr Lai, the publisher of Apple Daily, who was unharmed in the attack, is a vocal supporter of the democracy movement that has brought protesters on to the streets for 13 consecutive weeks.

Joshua Wong Calls For Renewed Campaign For Fully Democratic Elections in Hong Kong - RFA

"The Hong Kong government decided [to announce] it would withdraw the amendments to the Fugitive Offenders Ordinance on Sept. 4," Wong said.

"That is hugely different from doing so in June, because 1,200 people have now been arrested, and charges brought against more than 100 of them. Seven young Hong Kong people even took their own lives because of the protests."

"So, our protests will continue for as long as we are facing police violence, and an unelected chief executive," he said.


College Daily, the nationalist and influential WeChat account, targets Xu Xiuzhong, a Chinese journalist in Australia, for her reporting on China and Hong Kong. College Daily labeled her as a traitor because it said her reporting/comments/tweets supports HK separatists and humiliates China. It suspects she is doing it to get the Australian citizenship and green card.

China opts for low-key coverage of Hong Kong extradition bill withdrawal | South China Morning Post

Observers also noted that none of the central government agencies with responsibility for Hong Kong – the Hong Kong and Macau Affairs Office, the foreign ministry commissioner’s office and the central government’s liaison office in Hong Kong – have made statements since Lam’s remarks. This is in contrast to their immediate responses after she announced the bill’s suspension on June 15.

Controversial Hong Kong mooncakes ‘to be destroyed’ in mainland China - Inkstone

A mainland Chinese company that sells a popular brand of mooncakes caught up in the maelstrom of Hong Kong politics said it would have to destroy its stock of the cakes.

This week, state media denounced a director of Hong Kong-based Taipan Bread and Cake for supporting the ongoing protests in Hong Kong.

Taiwan’s refugee bill does not apply to Hong Kong protesters for now, Taipei says | South China Morning Post

Taiwan’s existing laws provide adequate opportunities for Hongkongers to relocate to the self-ruled island, but a refugee bill before the island’s legislature does not apply to protesters seeking to flee the city, Taipei said on Thursday.

The statement by the interior ministry came after visiting pro-democracy activist Joshua Wong Chi-fung appealed to Taiwanese lawmakers for more concrete support for his fellow protesters in Hong Kong.

3. Don’t call it stimulus 

More policy support for the economy coming, certainly not like the flood-like stimulus of previous downturns, but drips of stimulus continue to dribble out.

China to take targeted measures for steady economic growth - Xinhua

Further steps will be taken to ensure the stability of employment, the financial sector, foreign trade, foreign investment, domestic investment and expectations, according to a statement released after a State Council executive meeting chaired by Premier Li Keqiang...

Policy tools such as overall and targeted cuts of required reserve ratios will be taken in a prompt manner to encourage financial institutions to channel more capital into inclusive financing, enhancing support for the real economy, small and micro firms in particular.

The meeting urged acceleration in issuance and use of special local government bonds. New additional bonds quota for the next year can be delivered ahead of the original schedule.

The bonds should be mainly used to finance transport infrastructure projects like railways and urban parking lots, energy projects such as natural gas networks and storage facilities, as well as environmental protection and social security projects.

The fund must not be used for land stocking, real estate development, debt swaps and projects that can be commercially operated, the statement said

China to accelerate the issuance and use of special local government bonds to catalyze effective investment

Accelerating the issuance and use of special local government bonds can help deepen supply-side structural reform, counter the downward economic pressure, and boost effective investment. General Secretary Xi Jinping emphasized at the Central Economic Work Conference last year the need to increase the size of special local government bonds by a fair amount to support major projects under construction and strengthen areas of weakness. Premier Li Keqiang underscored in the Government Work Report the imperative to make effective use of local government bonds and expand their scope of use as necessary...

“Our measures must be well-targeted. There needs to be solid activities in the real economy before the end of the year,” Premier Li said. “The scenario where the ‘funds chase after projects’ must be avoided.”

The meeting urged greater efforts in project management and preventing “half-finished projects”. ..

According to statistics from the Finance Ministry, between January and August, a total of 2.0057 trillion yuan in special bonds were issued in China, accounting for 93.3 percent of this year’s planned quota.

China’s Local Governments Asked to Submit 2020 Borrowing Needs - Caixin

Usually, local governments submit their borrowing needs for the following year in October and November. The National People’s Congress (NPC), China’s top legislature, generally approves a quota at its annual session in March of the next year. Then after the Ministry of Finance assigns approved quotas, local governments normally start bond issuance as early as April.

In an unusual move, the NPC passed a bill last December allowing the cabinet to assign bond quotas so that local governments could start issuing debt as early as January as part of efforts to stimulate the economy.


Liu He attended a nationwide teleconference discussing the “financial situation” and policies to address financial risks. The meeting again said the economy now faces more downward pressure given the “new situation” inside and outside China, and that officials must stay alert to the risks and preempt the crisis.

4. Beijing buying away another Taiwan ally

Solomon Islands to sever ties with Taiwan, shift alliance to Beijing - Reuters

The switch, which still needs to be formalized, would be a prize for China in its bid to peel away allies from what it considers a wayward province with no right to state-to-state ties. Only 17 countries now recognize Taiwan.

Solomons lawmaker Peter Shanel Agovaka told a parliamentary committee that after four decades of independence and a long-term alliance with Taiwan, it was time to make a change.

“We cannot sit for the next 40 years with our friends Taiwan. It is time that we make new friends - it’s time that we should move on with our life,” Agovaka said on Wednesday, according to a recording of the meeting in the capital Honiara...

Anti-graft agency Transparency Solomon Islands has urged caution in changing ties over concerns that the Solomons will not be able to hold firm against Beijing’s interests.

China is offering to bankroll a development fund for the Solomons to help with a transition away from Taiwan, which currently provides an annual $8.5 million contribution to the island nation.

5. Canada and China appoint new envoys

Dominic Barton to Beijing, Cong Peiwu to Ottawa.

Dominic Barton named Canada's next ambassador to China | CBC News

During a news conference in Toronto, Foreign Affairs Minister Chrystia Freeland was asked about past controversies involving the company for which Barton worked...

"Our government has had, obviously, very detailed and extensive conversations with Mr Barton about what the role of ambassador to China for Canada entails, and that absolutely has included long discussions about the centrality of human rights, of women's rights, to Canada's foreign policy," Freeland said...

Guy Saint-Jacques, who served as Canada's ambassador to China from 2012-2016, called Barton an "interesting choice."

"Trudeau wanted him to replace me in 2016 but he declined," he said.

Beijing: Canada solely responsible for difficulties in relations - CGTN

China-Canada relations have met serious difficulties, and the Canadian side is solely responsible for this, Chinese Foreign Ministry spokesperson Geng Shuang said Thursday, urging Canada to reflect upon its mistakes and take concrete measures to put bilateral relations back on the track.

Geng made the remarks after China accepted the appointment of Dominic Barton as Canada's next ambassador to China. Barton, an economic adviser who used to work in Shanghai, vowed to work hard and to "resolve the challenges that currently exist" according to his statement...

According to Geng, China will name Cong Peiwu as the next ambassador to Canada. He will also perform his duty to promote China's relations with Canada.

Canada appoints ex-McKinsey chief as new China ambassador | Financial Times $$

Mr Barton has strong links to China. He was previously based in Shanghai as the firm’s Asia chairman and sits on the advisory board of China Development Bank Capital Group. He has also served as an adjunct professor at Tsinghua University in Beijing. 

He has long advocated strong commercial ties between Canada and China, telling Bloomberg shortly after the arrest of Ms Meng: “I think there remains lots of business to be done together. That’s what I think we should keep focused on.”

New China envoy Dominic Barton shows Trudeau’s intent to re-engage Beijing - The Globe and Mail

Two Canadians are in Chinese jails, and Beijing’s official mouthpieces regularly fire derisive and bullying shots at Canada. Mr. Trudeau’s tone in dealings with China has gotten tougher. So the fact that Mr. Barton, a silver-tongued charmer with extensive contacts in Asia, is being sent to Beijing as Canada’s ambassador says something.

Mr. Barton is a believer in the importance of engagement with China, so it’s pretty clear he is being sent there to try to re-engage. Conservative Leader Andrew Scheer is calling for a strategic pullback from China, arguing Canada needs to accept that China doesn’t share our interests, and look to develop trade elsewhere. The appointment of Mr. Barton, only days before the start of an election campaign, is a sign that Mr. Trudeau believes Canada can’t afford to do that.

China urges new Canadian ambassador to ‘reflect on mistakes’ Ottawa has made - The Globe and Mail

Canada’s corporate community has enthusiastically welcomed the nomination of Mr. Barton, a globe-trotting consultancy chieftain who has occupied some of the world’s most exclusive business circles — a trusted confidant of the Justin Trudeau government who also possesses a keen understanding of the intricacies of doing work in China.

Observers have long bemoaned Canada’s comparatively anemic economic relationship with China, relative to other allies and democratic powers.

Mr. Barton has lived in Shanghai, and his experience in China has given him rarefied access. McKinsey has worked for large numbers of China’s top state-owned entities.

6. Porcine threat to stability

Dim Sums: Rural China Economics and Policy: Vice Premier: Pork Shortages Must Not Spoil the Party

On August 22, Vice Premier Hu Chunhua told communist party officials to prioritize the rebuilding of pork production capacity and preservation of pork supplies as an important "political task." The full transcript posted on a pork industry site warned officials that widespread pork shortages could occur during the upcoming moon festival, National day, New Year, and spring festival holidays if they fail to take measures. Shortages would affect the "happy and peaceful atmosphere" during the upcoming 70th anniversary of the Peoples Republic, the vice premier said. Furthermore, Hu warned that a gaping hole in the pork supply and unaffordable pork for low-income people would impair the image of the communist party in 2020 when the "well-off society" is scheduled to be achieved...

According to Hu, unannounced investigations found large numbers of dead pigs where no disease had been reported, indicating that the actual number of ASF cases exceeds the number reported.

Hu acknowledged that China's pork supply situation will be "extremely severe" during the 4th quarter of this year and first half of 2020

The Chinese government estimates that the country will have a 10-million-metric-ton deficit in pork supply this year.

Premier Hu said the projected 10-mmt deficit exceeds the amount of pork traded in international markets...

After years of prioritizing control of manure pollution by closing or moving farms, local officials are now accused of over-zealous enforcement and are ordered to pare back zones where livestock farms are banned and pay for re-building hog farms. ..

Comment: Sounds like another poorly considered order from above that helped create this crisis.

The elevation of promoting pork production as a "political task" reveals the constantly changing crisis-driven priorities kicked down to local officials...

In his teleconference, Premier Hu also seemed to admit that little had been done to promote treatment and utilization of pig manure although it was a feature of the 2016-2020 plan for the swine sector. Environmental control seems to have been pushed aside as a priority now that there's a pork supply crisis.


China Business Journal said Chinese pig farmers are going into heavy debt because of African Swine Fever and the government earlier policies to kill all the pigs without giving them many subsidies. They are cautious in raising more pigs although these is a major shortage and the price is soaring.

7. Fake meat bubble coming?

I used to eat a lot of fake meat at Buddhist restaurants in China. Was fake meat invented in China?

Impossible Foods Eyes Chinese Dining Table for Faux Meats - Caixin

“Asia in general, and China in particular, are essential markets for us,” Brown said Wednesday at the Fortune Global Sustainability Forum in Yunnan. The company is counting on the China market, which accounts for 25% of global meat consumption, as a key driver of its vision to completely replace animal meats with plant-based meats by 2035...

Impossible Foods is in early talks with government agencies in the southwest Yunnan province for a potential partnership, in hopes to open its first China factory in the province, Caixin learned.

But Impossible Foods will need to clear regulatory hurdles to enter the Chinese market because of the country’s cautious attitude toward genetically modified (GMO) crops, Brown said. The company uses GMO soy to create a key substance that gives its faux meat products a meaty taste.

Inside the Battle for China’s Meatless Future - SixthTone

Like most of the domestic players, Whole Perfect only recently woke up to the market potential for fake meat in China. Founded in 1993, the company discovered its niche producing soy-based imitation chicken, fish, and shrimp for specialist Buddhist and vegetarian restaurants — a market the Shenzhen-based firm now dominates. But the hype over Beyond and Impossible convinced the firm to target a much larger market...

Chinese Buddhists began developing vegetarian versions of popular Chinese meat dishes as early as the Tang dynasty (618 – 907 A.D.), and vegetarian restaurants today offer a huge variety of options, from mock pickled fish to imitation braised pork belly. Though these dishes do not look as realistic or replicate the nutrient composition of meat as well as U.S.-style plant-based protein, this can sometimes be an advantage.

Impossible’s bleeding burgers can be a turn-off for Buddhists, for example, who make up a large chunk of the country’s approximately 50 million vegetarians.

Yicai Global - Shuangta Food Shares Gain After Chinese Pea Protein Firm Develops Artificial Meat

It has produced vegetarian-meat mooncakes and products with veggie meat fillings made from pea protein, filling a domestic technology gap, the Yantai, Shandong province-based company said in a statement late yesterday. It didn't say when and where the products will appear in the market.

In early June, Shuangta Food said that its protein raw materials were being supplied through distributors to Beyond Meat, a meat substitutes producer based in the US, and that its pea protein can be used as the raw ingredient for fake meat.

8. More on the “Sinicization” of religion

The Sinicization of Chinese Religions under Xi Jinping | China Leadersip Monitor - Richard Madsen

Overall, the story of religious policy under the Xi Jinping regime is one of increasing control and repression. The Marxist ideology that underlay the policy framework of the Deng Xiaoping era has largely been replaced by the nationalist ideology of Sinicization. Mao Zedong’s version of the Marxist idea of class struggle, which led to so much suffering during the Maoist era, has now been replaced by an ideology of ethno-religious struggle. The suffering continues, but with new victims. Because Sinicization basically requires adaptation to an idealized version of Han Chinese culture, outsiders to this culture, such as Christians, Tibetan Buddhists, and Muslims, and especially Uighurs, are subject to even harsher repression than they were under the former Marxist ideology. Han Chinese Daoism and Mahayana Buddhism fare somewhat better, although they too are still subject to restrictions by a watchful state.

As for religious policy among the Han, the new goal of Sinicization still relies on the earlier instruments developed during the Deng Xiaoping era: the party’s United Front Work Department, various state agencies for public security and religious affairs, and “patriotic associations” to oversee the various recognized religions. Although there has been a streamlining of this apparatus, there are enough cracks in the system that many religious believers can still find ways to evade some of its controls. A more fundamental problem with these instruments—originally developed by Stalin to control the hierarchical Orthodox Church[29]— is that they focus on controlling the leaders of clearly organized religious institutions, whereas most religious life in China is communal, diffused throughout the social institutions of ordinary life. Control over the leaders does not necessarily lead to control over the practicing masses. Thus, a complex religious ecology continues to evolve, producing an irrepressible diversity that the homogenizing project of Sinicization is failing to contain.

Business, Economy and Trade

China economy woes owe more to domestic issues than trade war, experts tell Washington hearing | South China Morning Post Experts on US-China relations have advised that the 14 month-long trade war has had “little direct impact on China's economy” and warned that “it would take a truly massive economic shock to threaten” Chinese President Xi Jinping’s power. Instead, experts told a congressional hearing, China’s underlying structural challenges – such as high debt levels – pose greater problems to Beijing’s long-term economic goals. However, it was also suggested that the trade war could cause damage to the Chinese economy as it continues and escalates.

China's Small-Cap ChiNext Index Poised for Bull Market - Bloomberg The ChiNext Index rose 1.2% Thursday, taking its rally since a June 6 low to 19.3%. Investors have piled into technology shares, which dominate the gauge, on hopes for further monetary easing and renewed trade talks between Beijing and Washington.

In U-turn, Ford ditches plan to unify China sales system after partners push back - Reuters Ford Motor Co has scrapped a plan to create a unified national sales company for China that stoked mistrust of the automaker at its joint venture partners and contributed to a spectacular collapse in sales in the world’s biggest car market. // Or not, per next article?

Yicai Global - Ford Denies Ditching Plan for National Distribution Services Division In China Ford Motor dismissed a report by Reuters today that it has nixed its plan to set up a National Distribution Services Division responsible for the marketing, sales and service of all the company's passenger vehicles sold in China. It is carrying out the plan in an orderly manner, the firm said.

Senators Scrutinize U.S.-China Ethane Supply Deals - WSJ $$ West Virginia’s Joe Manchin, the ranking Democrat on the Senate Energy and Natural Resources Committee, and Debbie Stabenow, a Michigan Democrat who also sits on the committee, have asked American Ethane Co. to submit for review by federal regulators its contracts with Chinese buyers, which the firm says are worth $72 billion. The probe is part of a broader push by the lawmakers to apply a similar level of regulatory scrutiny to the export of natural-gas liquids, such as ethane and propane, as there are on overseas sales of crude oil and liquefied natural gas

The Unlikely Chinese Cities Where House Prices Rival London - Bloomberg A 1,000-square-foot apartment in downtown Xiamen, a port city on China’s southeast coast, is almost as expensive as the average home in London, even though local wages are a quarter of what’s on offer in the U.K. capital. In Hangzhou, home to the headquarters of tech giant Alibaba Group Holding Ltd., prices per square foot now rival Seattle, where Amazon.com Inc. is based.

Shanghai Threatens Didi With App Removal as Ride-Hailing Violations Mount - Caixin Since July, the commission has cited Didi’s Shanghai operation for at least 100 violations, amounting to 10 million yuan ($1.44 million) in fines, according to the statement. The commission announced the latest citation on Wednesday night after local officials caught a Didi driver in an “unqualified” vehicle on Tuesday.

Vuitton to hire more French handbag makers as Chinese sales boom - Reuters “Demand in China is exceptionally high,” Vuitton’s CEO Michael Burke told reporters at the Beaulieu workshop, where it assembles bags like the $2,970 “Lock Me” model.

Walmart allegedly created “fictitious” Chinese JV to avoid US tax — Quartz “The goal of Project Flex was to create something from nothing, that China would say is nothing, but which the US tax rules would be required to embrace,” the former executive wrote in the presentation. Tax law experts confirmed the executive’s thesis that the structure does not exist in Chinese law and said the IRS would have grounds to challenge Walmart.

J CAPITAL RESEARCH - J Capital Research We believe that BeiGene has no future, and management knows it. We have clear evidence that the company is faking sales in order to persuade investors that it can develop a successful sales platform in China for pharmaceuticals; we suspect management may also be skimming R&D and capital budgets. At best, this is a poorly managed company pursuing commoditized drugs, with internal controls, even in the context of Chinese companies, that we find to be lax. At worst, BeiGene executives may be robbing shareholders.

Jiangxi to build national independent innovation demonstration area - Gov.cn The State Council approved Jiangxi province’s plan to build the hi-tech industrial development zones of Nanchang, Xinyu, Jingdezhen, Yingtan, Fuzhou, Jian and Ganzhou into a national independent innovation demonstration area, on Sept 5.

Online P2P lending to be recorded at central bank credit reference system - China Daily Information of online peer-to-peer or P2P lending platforms, whether operating or not, will be collected by the credit reference system of the People's Bank of China, the central bank said on Wednesday, Xinhuanet.com reported. Borrowers with poor credit in P2P lending sector will face disciplinary measures such as higher lending rates and restrictions on accessing loans, the report said.

China’s Private Bond Defaults Climb to Record $4.4 Billion - Bloomberg The nation’s issuers have missed repayments on a record 31.8 billion yuan ($4.4 billion) of private bonds this year through August, compared with 26.7 billion yuan for all of 2017 and 2018 combined, according to data by China Chengxin International Credit Rating Co., one of China’s biggest rating firms.

Politics and Law

陕西公安厅发布战时禁酒令,违反将追究领导和当事人责任 - 综合 - 新京报网 Shanxi Public Security Bureau head issues "wartime" order banning alcohol consumption by all provincial PSB employees from September 15 to October 4, to ensure nothing goes wrong during the October 1 70th anniversary celebration period

Xinjiang party chief Chen Quanguo orders officials to keep up the pressure in the run-up to China’s National Day | South China Morning Post The Communist Party chief in Xinjiang has told security forces and officials to “maintain high pressure” in the region ahead of the 70th anniversary celebrations for the People’s Republic of China.
In a speech on Monday, Chen Quanguo said they had to “resolutely implement measures to maintain stability” in the region

Xinjiang Authorities Arrest Sibling Uyghur Real Estate Moguls, Jail One For Decades - RFA Two ethnic Uyghurs who run what is widely considered the most successful real estate firm of the past decade in northwest China’s Xinjiang Uyghur Autonomous Region (XUAR) have been arrested, with at least one sentenced to a lengthy prison term, according to their brother.

Meanwhile, CCTV's Yang Rui finds happy Uyghurs in his trip to Xinjiang:

把准斗争方向 明确斗争任务 —论学习贯彻习近平总书记在中青班开班式上重要讲话精神 本报评论员 The people’s Daily wrote another front page editorial rephrasing Xi’s big speech on combat and struggle, urging officials to stay alert and combat against the risks and challenges in their work.

Xi stresses efforts to raise cultural-ethical standards - Xinhua Xi...made the instruction concerning the selection and honoring of national-level ethical role models. Extending congratulations to the role models, Xi said the honoring is of great significance in improving social norms, promoting positive energy and encouraging people to strive for excellence and virtue.

Foreign and Defense Affairs

China hacked Asian telcos to spy on Uighur travelers: sources - Reuters As part of the campaign, different groups of Chinese hackers have compromised telecoms operators in countries including Turkey, Kazakhstan, India, Thailand and Malaysia, the four sources said.

Giant China crane ship turns up near Vietnamese coast | South China Morning Post A Chinese giant crane vessel has been tracked to 90km (56 miles) from the Vietnamese coastline – in an area claimed by Hanoi as its exclusive economic zone – fuelling the risk of further maritime confrontation between the two countries...Vessels from both countries have been facing off since a Chinese survey ship, the Haiyang Dizhi 8, arrived near the Vietnamese-controlled Vanguard Reef in the Spratly Islands in July. At the climax of the stand-off, up to 20 armed vessels from both sides were at the scene.

'Any suggestion?' Philippine leader Duterte asks after China's Xi refuses to budge on South China Sea claims, SE Asia News & Top Stories - AP Mr Duterte said he raised the arbitration ruling in a meeting with Mr Xi and other Chinese officials and he quoted the Chinese leader as replying almost in a whisper: “You know, our statement was ‘We will not budge.’ We don’t want to discuss that because it’s ours. We own the property. Why should we talk to you?”

Property Firms Rally as Duterte Bucks China Ban on Online Gaming - Bloomberg Philippine property shares got a boost after President Rodrigo Duterte said his country benefits from online casinos, standing pat on the industry despite China’s call for a total ban.

俄外长:不应该称中国是俄罗斯的“老大哥” China used to refer to USSR as “big old brother” for its aid and support and its bossy attitude, now reporter asked Russian foreign minister Lavrov if the Russia should call China its “big old brother” given how the country is increasingly depending on Beijing. Lavrov said no, and that it is an equal relation.

普京总统会见胡春华 Putin met with China’s vice premier Hu Chunhua who attends the economic forum in Vladivostok. Hu said the Chinese government is working hard to implement the Xi-Putin consensus in boosting bilateral trade.

As Beijing and Moscow Grow Closer, the Neighbors Grow Wary - WSJ $$ Alarmed by Russia’s growing partnership with China, Beijing’s Asian neighbors are increasingly looking for ways to court Moscow away. That is exactly what Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe aim to do at the annual Eastern Economic Forum in Vladivostok this week. Chinese leader Xi Jinping will be notably absent from the event, Russian President Vladimir Putin ’s showcase for investment opportunities in his country’s Far East.

郑永年:中国如何回应美国“国际秩序”定义权?Zheng Yongnian of National University of Singapore gives recommendation for China to challenge the US-led world order. He suggests China reach out to more of US’ allies so to reduce the opposition, and when China sets up some new mechanism, such as the Asia Investment Infrastructure Bank, it should do it in an open manner so western countries can also join.

Experts Warn U.S. Should Prepare For Election Interference From China : NPR Social media giants such as Facebook revealed a Chinese government information operation in real time targeting protesters in Hong Kong. There are worries the 2020 U.S. election may also be a target. // Regulators worried about this should be paying attention to Wechat and how it is used to target Chinese-speaking voters in America

Local board candidate offers virtual cash credits to potential supporters on WeChat - NZ Herald A pro-China local board candidate has confirmed giving virtual cash credits to potential supporters to attend his team's campaign launch on Saturday. Morgan Xiao, 34, who is standing for the Howick Local Board under the Labour-aligned East Vision ticket, said the virtual money handed out on Chinese social media message app WeChat was for advertising purposes.

Argentine President meets with Chinese Defense Minister - China Military Argentine President Mauricio Macri met with visiting Chinese State Councilor and Defense Minister General Wei Fenghe in Buenos Aireson Wednesday afternoon, local time.

China-Australia-US Joint Exercise “KOWARI 2019” held - China Military Exercise KOWARI-2019 is the 6th of the annual joint exercises organized by the three countries’ Special Forces. The airborne troops of the Chinese PLA Air Force participated in the survival training exercise by mixing into a number of groups with their counterparts from the Australian Army and the United States’ Marine Corps.

Axios AM - 1 big thing: Bahamas aid could pit superpowers The Bahamas soon will seek billions in post-Dorian foreign aid, and the Trump administration is considering the national security implications if China rushes to help. Why it matters: China has projected power around the globe through infrastructure spending, and this will create an opening for massive investments just off U.S. waters.

BJP MP cries incursion, army denies - Telegraph India A BJP parliamentarian from Arunachal Pradesh has claimed that Chinese troops had entered Indian territory last month and built a log bridge over a stream, but the Indian Army denied the allegation.


Bilibili found to be renting server space in Taiwan - Taipei Times Video-on-demand (VOD) provider Bilibili (嗶哩嗶哩) has become the second Chinese service to draw the attention of security officials after it was found to be renting server space in Taiwan. The Institute of National Defense and Security Research in April confirmed its findings that China’s largest VOD provider, iQiyi (愛奇藝), which operates in Taiwan, is used by China’s Taiwan Affairs Office as part of Beijing’s “united front” efforts.

Tech and Media

People’s Daily wrote three commentaries this week bombarding Apple and other tech companies for “eavesdropping” and violating users’ privacy. The articles broadly discuss b the privacy issue, but the headlines were written in a way that targets only Apple. - 人民网三评“苹果偷听”之一:Hi Siri,我还敢信你吗; 人民网三评“苹果偷听”之二:住手,不许动我的隐私; 人民网三评“苹果偷听”之三:请让我们的隐私静享安宁

Pioneering Master of Chinese Animation Dies at 89 | Sixth Tone Dai Tielang, the famed creator of one of China’s oldest and most beloved cartoons, died Wednesday at the age of 89...Dai is best-known for directing the “Black Cat Detective” cartoon series, which aired from 1984 to 1987

Rhetoric aside, what do China’s semiconductor insiders really think about the nation’s self-reliance drive? | South China Morning Post “China’s industry watchdog has stepped up its efforts to support the development of chips over the past two years,” said Wayne Dai, founder and chief executive of chip design services company VeriSilicon. The new Shanghai tech board also “offers an excellent fundraising platform to attract more and more talented entrepreneurs”. Dai predicts that China will enter a “golden decade” for chip development, with the country producing 40 per cent of the chips that it needs by the end of the decade, up from 14 per cent now.

After Barren 2018, Game Publishers’ Revenue Shows Signs of Recovery For the six-month period, 37 Interactive Entertainment Technology Co. Ltd. and Zhejiang Century Huatong Group Co. Ltd. recorded revenue of 6 billion yuan ($839 million) and 6.9 billion yuan respectively, an increase of 83.83% and 22.97%. Both firms are listed in Shenzhen.

Society, Arts, Sports, Culture and History

Controversy over Scene in Anti-Japanese War Drama Featuring Black U.S. Soldier and Chinese Nurse | What's on Weibo A black soldier comes to China from afar during WWII and falls in love with a Chinese villager who sacrifices her life for him. This war drama is sensationalizing the Sino-Japanese War in the wrong way, many netizens say.

Energy, Environment, Science and Health

Chinese demand threatens to wipe out Kenya’s donkeys | China Dialogue Growing demand for donkey meat and skin in China is causing a sharp decline in the animals in Kenya. Animal rights campaigners warn that donkeys could soon disappear in the east African country, where they play a vital role as beasts of burden, especially in rural areas.

His Cat’s Death Left Him Heartbroken. So He Cloned It. - The New York Times China’s first duplicate cat marks the country’s emergence in gene research and its entry in a potentially lucrative and unregulated market for cloning pets.

Hundreds Fall Ill From Dengue Fever in East China - Caixin Health services are scrambling to deal with an outbreak of dengue fever in East China’s Jiangxi province, where about 200 people have been diagnosed with the virus since June.


China regulates educational apps - ECNS China's Ministry of Education joined seven other governmental departments to roll out a guideline on the use of educational apps in schools, following consideration of teacher and parent opinions, according to a news conference in Beijing on Thursday.  The guideline states students or parents should not pay to use apps required by schools and there should be no commercial advertising or games involved.