PBoC Needs Better Party Governance; Culling Grey Rhinos; China Daily Says Trump Administration Is Building A "Digital Iron Curtain"; Foreign Journalists Suffer For Lack Of Positive Energy

Good morning, apologies for the sparse commentary today but I have been having some technical issues this am and decided it is better to get something rather than nothing out. 

Thanks for reading. 

The Essential Eight

1. CCDI Official Stresses Need For Better Party Work In The Financial System As Part Of The Regulatory Crackdown To Prevent A Crisis

Strict Party governance should be deepened: CCDI official - Xinhua:

Strict Party governance should be deepened in China's central bank system, an official with the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI) said on the CCDI website on Tuesday.

"The work of the central bank is closely related to national security and interests, the people's interests, as well as the CPC's ruling foundation," said Xu Jia'ai, a senior CCDI inspector.

"Any selfish action for personal reasons in the work of the central bank is not just picking or stealing, but tearing at the fabric of our nation," Xu said.

Xu noted major risks in the financial sector, including weakness in supervision, unlicensed operation and illegal fundraising, which have posed great losses to the people.

"A lack of strict Party governance led to these problems," Xu said, stressing that unremitting efforts must be paid to strengthen Party construction and tighten supervision within the Party.

坚定扛起党内监督的神圣使命 推进人民银行系统全面从严治党向纵深发展

Editorial: Penetrating the Fog Hiding Financial Corruption - Caixin Global:

During its latest plenary meeting, addressed by President Xi Jinping two weeks ago, the Central Commission for Discipline Inspection said it will focus on corruption in key areas or segments in the selection of officials, approvals and supervision, and resources development, as well as financing and loan issuances.

In its key meeting last week, the Communist Party’s Commission for Political and Legal Affairs, which oversees the country’s judicial and public security work, said it is going to initiate special campaigns to crack down on crime in financial areas and capital markets, targeting illegal fundraising, internet-based pyramid schemes and insider trading. Financial crimes are closely related to financial corruption. It is like two sides of the same coin — power abuse and business irregularities are often entangled.

Financial corruption threatens financial security and order. Big-business predators often collude with officials within regulatory bodies, who trade their power for business interests. Corruption in the financial sector is like corruption in other areas — it is a result of a lack of effective supervision of power

China takes tougher line on financial risks - Xinhua:

China's banking regulator has fined Postal Savings Bank of China (PSBC), along with 11 other related banks, a total of 295 million yuan (about 46 million U.S. dollars) over a bill fraud case in the northwestern province of Gansu.

Probes into a PSBC sub-branch in Wuwei City in December found 7.9 billion yuan worth of bills were involved and another 3 billion yuan of wealth management funds were illegally drawn or embezzled, according to the China Banking Regulatory Commission (CBRC).

It was the third major penalty on domestic lenders since December, following a 462-million-yuan fine imposed on a branch of Shanghai Pudong Development Bank for illegally covering up bad loans and a 722-million-yuan fine for China Guangfa Bank for offering illegal guarantees for defaulted corporate bonds.

Financial risk facing China worse than in US before global crash, former finance minister says | South China Morning Post:

Speaking at a forum in Beijing over the weekend, Lou Jiwei, now chairman of the National Social Security Fund Council, also described the state of China’s financial sector as “messy”.

“Compared to the US financial market 10 years ago, [when] the risk and return on derivatives … were defined and the products were registered [with regulators] … China’s [financial market] is more messy,” he said.

楼继伟8000字长文谈中国经济:金融体制存严重扭曲 


2. Culling Grey Rhinos

Expect Beijing to find "volunteers" to make sure the breaking of HNA, Anbang and Wanda is done in a relatively orderly fashion.

China Seeks to Broker Sale of Stake in Insurer Anbang - Bloomberg:

Central Huijin Investment Ltd., a unit of China’s sovereign wealth fund, has held preliminary discussions about buying a stake in Anbang, although failed to reach any agreement, said the people. It wasn’t clear what the potential size of any stake sale would be, or who the selling shareholders are. The people asked not to be named because the deliberations are private.

Anbang Chairman Wu Xiaohui was detained by authorities in June, throwing the acquisitive insurer into disarray. A working team that included China’s insurance regulator was subsequently dispatched to Anbang to oversee the company’s operations and ensure its stability, according to the people. Representatives from the police and the Central Commission for Discipline Inspection have also been involved in investigating Anbang, the people said.

HNA to Face $2.4 Billion Liquidity Crunch This Quarter - Bloomberg:

The funding gap was among financial details HNA briefed major creditors and provincial government officials about during a meeting last week in Hainan, the people said, asking not to be named because the discussions are private. Some major lenders are considering banding together to form a committee that could exert more pressure on HNA, they said. HNA has about 65 billion yuan in debt coming due during the first quarter, one of the people said.

The projected shortfall takes into account HNA’s financing plans, including asset sales, one of the people said. HNA, which is based in Hainan, told creditors at the meeting it expects the pressure to ease in the second quarter as the group steps up disposals, according to two of the people.

Tencent Leads $5.4 Billion Investment in Wanda Commercial - Bloomberg:

Online mall JD.com Inc., Sunac China Holdings Ltd. and Suning Commerce Group Co. -- a retailer backed by e-commerce giant Alibaba Group Holding Ltd. -- will also take part in the acquisition of shares owned by private investors who backed Wanda’s delisting plan in 2016, the Chinese company said on its website. The investment in China’s largest mall operator marks Tencent’s latest foray into old-school retail.


3. Politics Are Always In Command Under Xi Jinping

Safeguarding CPC Central Committee authority "the supreme political principle": politburo - Xinhua:

Safeguarding the authority of the Communist Party of China (CPC) Central Committee and its unified and centralized leadership is "the supreme political principle and the fundamental political rule for the whole Party," according to an official statement released Tuesday.

The statement was issued after a meeting of the Political Bureau of the CPC Central Committee, which was presided over by Xi Jinping, general secretary of the CPC Central Committee.

习近平主持中共中央政治局会议:

会议认为,党的领导是中国特色社会主义最本质的特征,是全党全国各族人民共同意志和根本利益的体现,是决胜全面建成小康社会、夺取新时代中国特色社会主义伟大胜利的根本保证。坚持党的领导,首先要坚持维护党中央权威和集中统一领导。全党同志要牢固树立政治意识、大局意识、核心意识、看齐意识,把维护党中央权威和集中统一领导作为最高政治原则和根本政治规矩来执行,始终在思想上政治上行动上同以习近平同志为核心的党中央保持高度一致。

The meeting also approved the work reports and 2018 plans of the NPC, State Council, CPPCC, Supreme People's Court and Supreme People's Procuratorate


4. Wang Qishan Speculation Parlor Game Is Back On

China’s retired anti-graft tsar Wang Qishan holds on to top legislature spot to stay in the political game | South China Morning Post:

In the past two decades, all top state officials, from presidents to ministers, as well as the party’s inner 25-member Politburo, have had seats in the NPC. At the same time, all outgoing and retiring top leaders have not stayed on for the NPC’s next session.

We have been hearing for a while that Wang would play a leading role in US-China relations. Yang Jiechi will likely not be pleased if that is true, and one wonders how his upcoming DC visit will go, and if he will not somehow get stuck with the blame for the growing tensions as Wang steps in to "firefight"?

China’s Xi Looks to Ally to Fix U.S. Relations - WSJ $$:

President Xi Jinping is turning to a trusted political ally who ran his potent anticorruption campaign to help manage the critical but fraught relationship with the U.S. as trade tensions escalate, according to officials familiar with the leadership’s thinking.

Wang Qishan, who stepped down from the leadership in October after hitting an unofficial retirement age, is being considered by Mr. Xi for several roles, including as state vice president, the officials said...

Other senior officials involved in dealing with Americans would include Hu Chunhua, who is expected to be named vice premier overseeing trade, and Liu He, Mr. Xi’s top economic aide, who is slated to become the vice premier in charge of finance and state-owned enterprises. Yang Jiechi, State Councilor in charge of foreign policy, and Foreign Minister Wang Yi are also expected to continue to be involved in foreign affairs.

That is interesting speculation about Hu Chunhua's portfolio. 

AP Interview: Chinese editor Hu Shuli steps aside, not down

Hu declined to discuss her relationship with Wang and denied that political factors were behind her move. In any case, Wang appears to retain significant influence: he joined a parliamentary delegation this week amid speculation that Xi might soon name him vice president.

Still, at a time when Xi demands strict ideological discipline across Chinese society, particularly in sensitive industries like media, it remains to be seen if Caixin can continue to push the envelope. A liberal historical journal, Yanhuang Chunqiu, has been shuttered and influential online commentators silenced. Caixin made international headlines in 2016 when it published an interview with a Shanghai professor who criticized China's tightening censorship, and, when censors moved to block the interview, Caixin disclosed the takedown order in an unusual show of defiance.

Pressed nearly two years later, Hu shook her head, saying she doesn't remember the incident.


5. China Daily Says Trump Administration Is Building A "Digital Iron Curtain"

Digital Iron Curtain shows US' Cold War mindset - China Daily Editorial  

US President Donald Trump will deliver his State of the Union address on Tuesday, which according to a media briefing by a senior official will harp on the now familiar refrain of what his administration is doing to build “a safe, strong, and proud America”.

One of the things the Trump administration seems to be considering doing, according to a memo and PowerPoint presentation produced by a senior National Security Council official and obtained by US news website Axios, is taking responsibility for building a super-fast 5G wireless network, to counter what it presupposes is a threat posed by China to US “cyber security and economic security”.

The ideologically charged proposal harks back to the rhetoric — and strategies — of the Cold War. It even contains the suggestion that the work on a secure 5G network could be exported to emerging markets to “protect democratic allies against China” and to “help inoculate developing countries against Chinese neo-colonial behavior”.

"Digital Iron Curtain" is catchy...seems to fit better with the ChiComNet and the Great Firewall, no?

Verizon Drops Plan to Sell Phones From China's Huawei, Sources Say - Bloomberg:

The move follows AT&T Inc.’s decision earlier this month not to introduce the Mate 10 Pro to the U.S. market. Huawei devices still work on both companies’ networks, but direct sales would’ve allowed them to reach more consumers than they can through third parties.

The government’s renewed concern about Chinese spying is creating a potential roadblock in the race between Verizon and AT&T to offer 5G, the next generation of super-fast mobile service. Huawei is pushing to be among the first to offer 5G-capable phone, but the device may be considered off-limits to U.S. carriers who are beginning to offer the next-generation service this year in a few cities.

Wireless industry throws cold water on plan to nationalize 5G - Axios:

The wireless industry has signaled that they are not interested in the Trump administration's plan to nationalize its own 5G network. Meredith Attwell Baker, the chief executive of the industry’s primary trade association, CTIA, issued a statement Monday saying the government should focus on pursuing "free market policies."


6. Will The US Take Australia's PRC Influence Crackdown As A Model?

It sure sounds like it. A senior Trump administration official, speaking at a recent closed-door event, praised Australia’s efforts and stated that PRC influence operations are "right on the front-burner".

CIA chief says China 'as big a threat to US' as Russia - BBC News:

Chinese efforts to exert covert influence over the West are just as concerning as Russian subversion, the director of the CIA has said.

Mike Pompeo told the BBC that the Chinese "have a much bigger footprint" to do this than the Russians do.

AFP and ASIO to co-operate on China investigations - Sydney Morning Herald

…new submissions (the full list) to the joint parliamentary committee on intelligence and security provide ballast for those arguing for more transparency of Australian organisations that are closely aligned to the Chinese government, and its main vehicle for foreign interference, the United Front Work Department. Increasing transparency is a key objective of the proposed laws.

A lengthy submission by prominent left-leaning academic Professor Clive Hamilton names dozens of United Front organisations in Australia, describing their cultivation of Labor and Liberal politicians. The submission is the most detailed expose´ of Chinese government influence operations in Australia to ever be published.

Wang Feng, editor in chief of FT Chinese, called Hamilton's submission a "hate crime" in a long twitter thread starting with this tweet:

Wang Feng@ulywang

OK here's why targeting ALL CSSAs (Chinese Students and Scholars Association) and their members is a hate crime.

January 30, 2018

China’s 'Three Warfares' in Perspective - War on the Rocks - Peter Mattis:

To understand how the CCP shapes the world around China, analysts must look to the party center rather than the PLA. The party congress work reports, plenary reports, five-year plans, circulars, laws, and leadership speeches all explain more than military writings intended for a PLA audience. The converse is also true. The “Three Warfares” are not just a feature of the PLA doing what the militaries do to prepare the battlefield; they are expressions of the CCP’s intentions and day-to-day operations. As noted in a previous piece, the party “approach[es] influence operations and active measures as a normal 


7. Cardinal Zen Says The Vatican Is Selling Out To Beijing

Dear Friends in the Media | 平安抵岸全靠祂 - Cardinal Joseph Zen:

I acknowledge myself as a pessimist regarding the present situation of the Church in China, but my pessimism has a foundation in my long direct experience of the Church in China. From 1989 to 1996 I used to spend six months a year teaching in the various Seminaries of the official Catholic community. I had direct experience of the slavery and humiliation to which those our brother Bishops are subjected.

And from the recent information, there is no reason to change that pessimistic view. The Communist Government is making new harsher regulations limiting religious freedom. They are now strictly enforcing regulations which up to now were practically only on paper (from the 1st of February 2018 attendance to Mass in the underground will no longer be tolerated)...

So, do I think that the Vatican is selling out the Catholic Church in China? Yes, definitely, if they go in the direction which is obvious from all what they are doing in recent years and months.

Vatican accused of ‘selling out’ Catholic Church to China FT $$:

In many parts of China, the “underground” congregations and those led by bishops appointed by Beijing have been reconciled since a 2007 letter from Pope Benedict to Beijing, with bishop appointment agreed upon by the Vatican and Beijing’s “patriotic association”. In some areas the rift still persists.

There are 19 active “underground” bishops and 58 official bishops, not counting those who have retired, according to the Holy Spirit Study Center, which is part of the Catholic diocese of Hong Kong.

“There is the baggage, the legacy, of many years of the underground Church, of priests who recognised the party and those who did not,” said Francesco Sisci, an expert on China-Vatican relations based in Beijing. “It has not been solved but it is being solved. It is extremely important for the Church to move on.”


8. Foreign Journalists Suffer For Lack Of Positive Energy

Foreign journalists in China complain of growing abuse from officials, report says | South China Morning Post:

Almost half of more than 100 correspondents were subjected to some form of interference in 2017 while attempting to gather information, according to the report by the Foreign Correspondents’ Club of China...

Five international news organisations experienced visa difficulties that appeared related to their work. The problems included lengthy delays in visa approval, credentials issued with unusually short validity and outright rejection of accreditations...

Chinese diplomats overseas have also appeared to become more assertive in applying pressure on media headquarters, with 22 per cent of respondents reporting pressure on their head offices in 2017, up from 19 per cent in the previous survey.

Here is a PDF of the report on Dropbox. PRC authorities will not allow the FCC to post the report on its website. 

So Xi did not mean what he said about foreign reporting in his comments at the press conference at the end of the 19th Party Congress? From the 10.25.18 Sinocism newsletter:

At the end of his comments Xi thanked foreign reporters for their coverage of the Congress and welcomed them to travel around China and report on China’s development and changes after the 19th Party Congress. Implied in his comments was that they are welcome so long as their reporting contributes to the “positive energy” required by the Party and its propaganda organs:

习近平最后说,百闻不如一见。我们欢迎各位记者朋友在中国多走走、多看看,继续关注中共十九大之后中国的发展变化,更加全面地了解和报道中国。我们不需要更多的溢美之词,我们一贯欢迎客观的介绍和有益的建议,正所谓“不要人夸颜色好,只留清气满乾坤”


Business, Economy, Finance And Trade

Postal Savings Bank Hit by Fresh Scandal - Caixin Global China’s state-owned Postal Savings Bank (PSB), one of the country’s biggest banks, has been caught up in yet another scandal, this time over a massive fraud involving the sale of 3 billion yuan ($474 million) of wealth management products by one of its sub-branches to raise money to repay forged discounted bills of exchange. The banking regulator announced over the weekend that the Hong Kong-listed bank was fined 90.5 million yuan and 11 other lenders were hit with a combined penalty of almost 200 million yuan for their involvement in the scam which originated at the Wenchang Street sub-branch of the PSB in Wuwei city in the northwestern province of Gansu in 2016.

China's First Bitcoin Exchange Acquired by Hong Kong Investors - Bloomberg BTCC, which was known as BTC China when it was founded in 2011 and run by American Bobby Lee, was purchased for undisclosed terms. The company will now focus exclusively on the international market and its three major products, BTCC Pool, Mobi and USD Exchange, which will be led by Denver Zhao, Mark Ma and Aaron Choi, respectively.

Meeting the China Challenge | Center for Strategic and International Studies The essays in this volume, written by a diverse group of CSIS scholars, address some of the key issues that currently vex the U.S.-China economic relationship.

U.S. Firms Say China’s Business Climate Is Warming, Survey Finds - WSJ $$ U.S. companies are more optimistic than a year ago about business prospects in China despite a backdrop of escalating trade tensions and worries over regulation, according to the latest annual survey by the American Chamber of Commerce in China. The survey of 411 member companies found that 46% believed the government was committed to further opening China to foreign investment over the next three years, up from 34% last year.

US tech firms lead protests over unfair treatment in China: AmCham survey | South China Morning Post In its annual “China Business Climate Survey Report” on Tuesday, the American Chamber of Commerce in China called for a fair and reciprocal relationship between the two countries to cut frictions....According to the report, more than one-third of the companies surveyed said the investment environment in China was improving, but an “astounding” 75 per cent of companies felt they were less welcome in China than before.

China Could Target U.S. Firms if Trump Levies Tariffs, Group Warns - The New York Times Chinese officials have told American business representatives that they are prepared to push back, said William Zarit, the chairman of the American Chamber of Commerce in China.“I have been told by certain officials that yes, definitely, there will be retaliation,” he said at a briefing in Beijing, to announce the findings of the group’s 2018 business climate survey.

China's Risk Crackdown Is Giving Giant Bank Stocks a Boost - Bloomberg A recent surge in the Hong Kong-traded shares of China’s Big Four state banks lifted their average price-to-book value ratio to 1 as of Monday. That’s the highest since an equity boom ended in 2015. China Construction Bank Corp. and Industrial & Commercial Bank of China Ltd. are now back above the value of their net assets.

U.S. Companies Brace for Wider Scrutiny of Chinese Deals - WSJ $$ Supporters of the bill, who think it could be signed into law later this year, aren’t convinced. “I am concerned that some of the recent witnesses before the House and Senate have major financial conflicts of interest that prohibit an objective evaluation of the security threats we face,” Rep. Robert Pittenger (R., N.C.)—one of the drafters of the bill—said in an email.“The business models for IBM, Microsoft, and GE, for example, have led to the transfer of military applicable technologies to China that have likely aided the modernization of the Chinese military and intelligence agencies,” said Mr. Pittenger. The bill’s supporters say it complements and strengthens export regulations rather than duplicating them.

Chinese insurers' 2017 net operating cash flow drops 65 percent - Reuters China’s insurance companies saw their net cash flow from operating activities fall 65 percent to 633 billion yuan ($99.9 billion) last year, a source with knowledge of the matter told Reuters on Tuesday, citing data in a government memo.

Fitch ‘Downgrades’ Stake in Its China Joint Venture - Caixin Global Fitch Ratings Inc. said that it has sold its stake in a Chinese joint venture, a move that likely augurs its solo debut in the mainland market after Beijing vowed to open up the country’s credit rating sector to foreign players.

新华社为证监会点赞:斩妖除魔 任何人不能兴风作浪 | 每经App 新华社刊文称,回首2017,中国证监会面临的争议依然不少,但也收获了更多掌声。这一年,严监管 “大动作”频频,与各路“妖魔”斗智斗勇。史无前例的罚单就是严监管最好的证明。过去一年,无论是整个市场的罚没总金额,还是对单个自然人的罚没金额,两个“史上最大罚单”震慑了资本市场。

 

Politics, Law And Ideology

Media and Ideology in Xi’s China | Center for Strategic and International Studies attended Monday, excellent talk. video now online here.  //  Georgia State University's Maria Repnikova on the ways in which the Chinese party-state has adapted to the latest media technology environment and has changed not only the content of its message but the means by which it reaches its audiences. Kaiser Kuo, a veteran of China’s media and pop culture, offered his insights and offer some ideas for further discussion. Freeman Chair Christopher K. Johnson moderated

China's legislature discusses Constitution revision - Xinhua Entrusted by the Communist Party of China (CPC) Central Committee, Li Zhanshu, member of the Standing Committee of the Political Bureau of the CPC Central Committee, briefed lawmakers about a proposed revision. At its second plenary session earlier this month, the 19th CPC Central Committee adopted the proposal. "Major theoretical achievements, principles and policies adopted at the 19th CPC National Congress, particularly Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, should be incorporated into the upcoming revision to the Constitution," said Li, also deputy head of a group working on the revision. "We should keep pace with the times and improve the Constitution while maintaining its consistency, stability and authority."

奏响新思想网络最强音-新华网 XInhua News Network Chairman Tian Shubin on page 7 of the 1.20.18 People's Daily on improving propaganda and ideology work using the Internet

China's national legislature to convene on March 5 - Xinhua The 13th National People's Congress (NPC) will open its first annual session in Beijing on March 5, said a decision made by the 12th NPC Standing Committee on Tuesday.

A Billboard Death, No Arrests — Why, Chengguan? Netizens Ask On Tuesday, two workers were putting up a billboard on a roof in Zhengzhou, capital of central China’s Henan province, when city management officials told them to take it down, on the grounds that they did not have the proper license. When this did not happen quickly enough, the chengguan — as they are known in Chinese — removed the men’s ladder. Stuck on top of the three-story building in cold weather, one of the men, surnamed Ou, fell to his death while trying to lower himself to the ground using a rope, The Beijing News reported Friday. A video widely shared on social media showed the scene of the accident cordoned off with police tape.

 

Foreign and Military Affairs

Theresa May declines to endorse China’s Belt and Road initiative - FT $$ Mrs May’s spokesman said it was vital that the Belt and Road initiative met “international standards”. Asked if that was not the case, the spokesman said: “That is one of the things the prime minister will be talking about when she’s there.” Downing Street is under pressure from the Trump administration not to endorse the Belt and Road initiative; the US recently said it saw China as “a strategic competitor”. Germany and France have been similarly wary of endorsing the BRI, especially after a growing backlash in the EU over bilateral trade and investment imbalances with China.

UK PM's visit set to focus on economic ties, B&R cooperation - Global Times: Experts also dismissed recent media reports that May's trip has been overshadowed by unease in the UK about Chinese overseas investment and the prime minister's reluctance to endorse the China-backed Belt and Road (B&R) initiative. May is due to arrive in Beijing on Wednesday for her first official visit to China, which will include stops in Shanghai and Wuhan, capital of Central China's Hubei Province. She will also have meetings with top Chinese officials as well as business leaders from both countries, according to media reports.

South Korea accuses Chinese military plane of entering air defence zone without permission, report says | South China Morning Post Beijing-based military commentator Li Jie said that the incident on Monday was another example of China flexing its muscle in the region at a time of growing uncertainty. “This is China stamping its sovereignty in the area,” Li said, although both Seoul and Beijing have denied being involved in a territorial dispute over Ieo Island.

Chinese military paper urges increase in nuclear deterrence capabilities - Reuters U.S. President Donald Trump’s administration may be pursuing the development of new nuclear weaponry and could explicitly leave open the possibility of nuclear retaliation for major non-nuclear attacks, according to a draft of a pending Nuclear Posture Review leaked by the Huffington Post. This “unprecedented” move by the United States, combined with continuous quality improvements of nuclear arsenals in both the U.S. and Russia, means that both countries place greater importance on deterrence and real combat usability, the commentary in the PLA Daily said.

China academics given free hand to debate North Korea aggression - FT $$ “North Korea is a very unique area; the government does not allow such open debate in many other areas,” says Shen Dingli, a professor of American studies at Fudan University in Shanghai.  The debate, he says, exposes that China’s policy of seeking to “de-nuclearise” North Korea — while also shielding the regime from harsher sanctions at the UN — has been shown to be wrong since Pyongyang began testing nuclear weapons in 2003. “Since 2003, everyone knows China’s policy towards North Korea has not succeeded,” says Mr Shen. “The reason these views are allowed is a virtual admission that our current policy is dead, so now they seek fresh ideas.”

Can China Back Down? Crisis De-escalation in the Shadow of Popular Opposition | International Security | MIT Press Journals - Kai Quek and Alastair Iain Johnston Many analysts argue that public opinion creates pressure on Chinese leaders to act coercively in territorial disputes, and that it also limits their options to de-escalate once crises have broken out. Evidence suggests, however, that Chinese leaders may prefer having more flexibility rather than less in a crisis. Using original data generated by a survey experiment conducted in China in 2015, this article examines several strategies that Chinese leaders could use to reduce public pressure so as to make concessions in a crisis easier. These strategies include pledging to use economic sanctions instead of force; invoking China's “peaceful identity”; citing the costs of conflict to China's development; accepting United Nations mediation; and backing down in the face of U.S. military threats. In all cases except one, approval for the leader increases over a baseline level of support for making concessions. The exception is if the leader backs down in the face of U.S. military threats. Here, approval drops below the baseline level of support, especially for nationalists and hawks. The findings suggest that if one assumes that Chinese leaders are constrained by public opinion, a U.S. cost-imposition strategy to compel China to back down in crises may have the opposite effect—tying Chinese leaders' hands even tighter.

Shifts in Warfare and Party Unity: Explaining China's Changes in Military Strategy | International Security | MIT Press Journals - M. Taylor Fravel Since 1949, China has adopted nine national military strategies, known as “strategic guidelines.” The strategies adopted in 1956, 1980, and 1993 represent major changes in China's military strategy, or efforts by the People's Liberation Army (PLA) to wage war in a new way. Shifts in the conduct of warfare in the international system offer one explanation for why China, a developing country for most of this period, pursued major change in its military strategy. Such shifts in the conduct of warfare should be especially powerful if a gap exists between a state's current strategy and the requirements of future warfare. The PLA has only been able to change strategy, however, when the Chinese Communist Party leadership is united and agrees on basic policies and the structure of authority. When the party is united, it delegates substantial responsibility for military affairs to the PLA leadership, which changes or adjusts military strategy in response to changes in China's security environment.

Kissinger Fellowship Taps Kurt Campbell to Tackle China | Business Wire Singularly focused on China in this fellowship, Campbell plans to lead a bi-partisan project aimed at establishing a new, comprehensive framework to strike the best balance of competition and cooperation. "The U.S.-China relationship is perhaps the most critical relationship for the world as we look to the future. Kurt Campbell has the knowledge and experience to lead a serious strategic review and I look forward to the results," said Ambassador Kurt Volker, executive director of the McCain Institute.

 

Taiwan

Taiwan Retaliates Against Chinese Airlines, Hampering Lunar New Year Travel - The New York Times On Tuesday, the Chinese carriers China Eastern Airlines and Xiamen Air announced that they had canceled 176 flights intended to meet added demand during the holiday since they had yet to receive approval from Taiwan’s Civil Aeronautics Administration. The agency said on Jan. 19 that it was denying the airlines permission for the flights because they were flying sensitive new routes in the Taiwan Strait that China began using without consulting Taiwan’s government

Two prosecuted for spying for Taiwan - Xinhua The two suspects, identified as Ma Liangliang and Liang Xin, were charged by the Suzhou City Procuratorate in May 2017, according to Liu Hua, head of the Jiangsu provincial procuratorate. They were recruited by Taiwan spy Wu Rong in July 2016 and knowingly provided Wu military information through emails, Liu told the ongoing provincial legislative session.

 

Tech And Media

New China Data Privacy Standard Looks More Far-Reaching than GDPR | Center for Strategic and International Studies The Chinese government recently released the final version of a new national standard on personal information protection. It lays out detailed new regulations for user consent, as well as how personal data is collected, stored, and shared. Set to take effect May 1, 2018, it is not clear how the standard will be implemented. Despite uncertainty about its effect, the language in the standard is comprehensive and contains more onerous requirements than even the European Union’s General Data Protection Regulation (GDPR). Yet, even with these differences, there is a growing convergence between Europe and China’s approaches in emerging data protection regimes, leading the United States to be more isolated with U.S. companies in reactive mode.

Why Tencent and Sequoia Are Pouring Millions Into China's Rental Space - Bloomberg The initiative to encourage renting homes is spurring some of the most important policy changes in private property ownership since 1988. It’s also creating opportunity for half a dozen companies, including Ziroom, You+ and Mofang Apartment. With already about 1.2 million tenants using Ziroom alone across nine cities in China, the startups are becoming the new gate keepers of social credit: tapping data and technology to determine rent prices, screen tenants and generate uncannily detailed profiles of their hobbies and habits.

Toutiao Sues Baidu For Unfair Competition Over Negative Search Results – China Money Network Toutiao said its users complained that when they searched “Toutiao” on Baidu, the first result was a news article from Baidu’s content platform Baijiahao about Toutiao being asked by regulator to suspend its news channel for spreading pornographic information last December. The second result showed a security alert in red under Toutiao’s official website address.

 

Society, Art, Sports, Culture And History

‘I am a woman worker at Foxconn, and I demand a system that opposes sexual harassment’: A translated essay | Society News | SupChina Essay author says she was inspired by recent news of Chinese women standing up against harassment and assault.

ENTER LAOWAI PARK [Part 2] - YouTube A Chinese tour group explore the many varieties of foreigners at Laowai Park.

 

Energy, Environment, Science And Health

Court Papers Reveal How Officials Faked Xi’an Air Pollution Readings - Caixin Global Li Sen, who headed the air quality monitoring unit in Chang’an district in Xi’an, stuffed air sampling devices with cotton padding 12 times between Feb. 5 and March 6, 2016, according to trial documents made public via China Judgments Online, an archive affiliated with the Supreme People’s Court. Under Li’s instructions, three of his subordinates had carried out similar violations on 12 other occasions in the one-month period, the documents show. They were following order from He Limin, director of the Chang’an District Environmental Protection Bureau, “to do whatever it takes to push down pollution readings,” Li admitted during the trial.

 

Education

Dutch university cancels planned degree programmes at Chinese campus The University of Groningen has said it is reconsidering plans for its campus in China following “insufficient support” from the university council to offer full degree programmes at the Chinese institution following concerns about academic freedom. President of the Dutch university’s board, Sibrand Poppema, said on Monday it “will cancel its plans to offer entire degree programmes under the responsibility of the UG in Yantai

 

Food And Travel

Chinese tech giants are cooking up their own China-centric Michelin-like guides · TechNode The time-honored Michelin Guide entered China with its first-ever Shanghai Guide. However, some prominent figures in the Shanghai’s food and beverage community disagreed with many of the choices. Many claimed that Chinese cuisine should not be judged with Western criteria. In response, Chinese online travel giant Ctrip and local lifestyle service Meituan have each rolled out their own guides. It might sound odd until you remember that the original Michelin Guide was created by the tire company to boost its sales.  //  Comment: Great. The foreign guides to restaurants in China have never led me to the good restaurants

 

Beijing

Beijing-Xiongan intercity rail to start construction in March - China Daily An intercity railway linking Beijing and the Xiongan New Area will start construction in March, the Beijing News reported Monday, citing a report by China Railway Design Corp. The construction of the 92.783-kilometer intercity line, with a total investment of 33.38 billion yuan ($5.22 billion), is scheduled to last for two years and be completed in Feb 2020, the report said.