People's Leader Xi; PBoC sets monetary policy expectations; Hong Kong; Trade deal

Happy New Year, happy to be back in your inboxes, though it is hard to know where to begin.

So here goes:

Liu He and his delegations are scheduled to arrive in DC January 13 to sign the phase one trade agreement.

As this newsletter has told you ad nauseam, do not expect the trade agreement to do much to arrest the broader, structural decline in the US-China relationship. I believe we are still in the phase where, as a Chinese contact likes to say, today is the best day of the US-China relationship for the next several years.

President Trump’s tweet announcing the signing date had an interesting twist:

Wang Zhimin is no longer the head of the Hong Kong liaison office. Luo Huining, formerly Party chief in Qinghai and Shanxi, has replaced him. Xi looks to have decided he needed someone with no established ties in Hong Kong or the CCP Hong Kong bureaucracy. It is also interesting that Xi looks to have ignored retirement norms by appointing Luo, who had effectively just retired to an NPC sinecure, back to a front line position. It is easy to imagine Luo's appointment is the first step in head rolling inside the CCP HK system that looks long overdue given how mucked up the information flow has been. And of course even if Xi is to blame he will not be blamed…

You all know my obsession with Xi and “People’s Leader 人民领袖” over the last several months. He got what I believe is the first Politburo endorsement of that appellation at the annual Politburo Democratic Life Meeting at the end of December. The official release from the meeting did not use “人民领袖习近平 People’s Leader Xi Jinping” but rather the more indirect “人民领袖深切的为民情怀 “people’s leader’s heartfelt feelings for the people”, in a long section fulsomely praising Xi and his genius. Now we need to watch for how the phrase is used in meetings and reports in the New Year and whether it morphs from this somewhat indirect phrasing into “People’s Leader Xi Jinping”.

I have seen some analysis claiming adding this title is a sign of Xi’s weakness. I disagree, in the “spit my coffee out laughing” kind of way.

There had been some talk since the Third Plenum in early 2018 of pushback against Xi, and perhaps that we had already reached “peak Xi”. Given the appearance, disappearance and then reappearance of “People’s Leader” since early 2018, discussed in some detail in the November 25 newsletter, it does look like there was some pushback going on, but whatever it was it now appears to have been thoroughly quashed. 2018 “peak Xi” looks more like a false peak, and 2020 may be quite a year for Xi hagiography.

The Lunar New Year is January 25 and so China will be shutting down in just over two weeks. The annual holiday migration starts this week, and according to Xinhua 300 million train tickets have already been sold. That makes the appearance of the mysterious Wuhan virus even more worrisome.

Today’s newsletter is especially long, I recommend clicking on the headline at the top of the email to read it in a web browser.

Thanks for reading.

1. PBoC tempers hopes for big monetary policy changes

PBOC says its prudent policies will continue - China Daily

China will maintain a prudent monetary policy while keeping it flexible this year to ensure reasonably adequate liquidity, and it will strengthen adjustments to support economic growth, the People's Bank of China, the central bank, said in a statement on Sunday.

This year, growth in the broad money supply, credit and aggregate financing of the real economy should be in line with nominal GDP growth, and market-oriented reform of the interest rate system will continue to improve the transmission mechanism of the loan prime rate, which is the new lending rate benchmark, the statement said.

"The market will play a decisive role in the formation of the RMB exchange rate, which will be kept basically stable at a reasonable level and at equilibrium," said the statement, which was issued after the bank's annual meeting in Beijing on Thursday and Friday.

China's central bank outlines policy priorities for 2020 - Xinhua

China's central bank mapped out key policies and tasks for 2020 during an annual work conference held in Beijing from Thursday to Friday.

Key takeaways per Xinhua:

Prudent, moderately flexible monetary policy to stay;

Winning the battle in forestalling, defusing major financial risks;

Greater financial support for supply-side structural reform to ease strain for small businesses;

Faster improvement in macro-prudential management;

Higher level of financial reform, opening up;

Stronger fintech R&D

The PBoC release - 2020年中国人民银行工作会议在京召开

China’s Central Bank Lays Out Top Tasks to Tackle in 2020 - Caixin

The government started a three-year campaign in 2018 to prevent and resolve major financial risks, one of the “three critical battles” outlined at the annual Central Economic Work Conference in December 2017. The PBOC’s statement said that 2020 would be a year to “resolutely win the battle.”

As part of the strategy, the PBOC said it would set up a mechanism that would enable local offices of the Financial Stability and Development Committee (FSDC) to coordinate with local financial regulators...

The FSDC will set up offices in every provincial branch of the central bank, an official from a local branch told Caixin, allowing officials in PBOC branches to supervise other financial regulators at the city or county level in the name of the committee. The PBOC currently only has the authority to manage its own branches and does not have the power to punish or take action against other local watchdogs...

In terms of monetary policy, the PBOC statement had a slightly different wording from last year’s work meeting summary, saying that while monetary policy would be prudent, it should also be flexible and appropriate. That compares with the 2019 wording that it should be “neither too tight nor too loose.” This year’s meeting also reiterated that the central bank will further strengthen counter-cyclical adjustments, and increase the frequency and intensity of policy fine-tuning when necessary.

保持稳健的货币政策灵活适度 坚决打赢防范化解重大金融风险攻坚战2020年中国人民银行工作会议在京召开_监管动态_中国金融新闻网

China to keep same inflation target in 2020 despite food price spike - Reuters

China has decided to keep its inflation target unchanged this year at around 3%, sources say, suggesting policymakers will continue to roll out more economic support measures while avoiding aggressive stimulus.

2. New head of the Hong Kong liaison office

China replaces top official in Hong Kong in first major reshuffle since protests erupted | South China Morning Post

Having reached the retirement age of 65 in October, he was just named on December 28 as the deputy director of the financial and economic affairs committee of the national people’s congress – a position usually reserved for retired officials...

“One key consideration is that Luo does not have connections with Hong Kong’s business and other community, therefore his work will not be complicated by any relationship,” the source said.

China Replaces Its Top Representative in Hong Kong With an Enforcer - The New York Times

From 2003 to 2016, Mr. Luo rose through the ranks in Qinghai Province, in western China, where Beijing has pursued increasingly stringent policies toward a large Tibetan minority. Mr. Luo became governor there in 2010 and then Communist Party secretary in 2013, according to his official biography

In 2016, Mr. Xi put Mr. Luo in charge of cleaning up Shanxi Province, a northern coal-mining area plagued by corruption scandals. Mr. Luo oversaw a purge of the party’s senior ranks there, as a series of investigations documented broad misconduct.


Luo Huining's official CV. He overlapped with PBSC members Wang Yang in Anhui and Zhao Leji in Qinghai

Beijing's new top man in Hong Kong hopes city returns to 'right path' - Reuters

“Hong Kong is the pearl of the orient, an international metropolis. Hong Kong compatriots have made important contributions to the reform and opening up and modernization of our country. The motherland will always be Hong Kong’s strongest backer.”

“In the past half a year, the Hong Kong situation has been worrying. Everyone eagerly hopes Hong Kong can return to the right path,” Luo said.

Luo’s comments - 新任香港中联办主任骆惠宁:对确保香港长期繁荣稳定充满信心 _中国经济网——国家经济门户


Beijing replaces its top Hong Kong representative | Financial Times $$

Zhang Lifan, a Beijing-based independent political commentator, said the Chinese leadership was looking to take more direct control of Hong Kong policy with the appointment and to make a clean break from the territory’s bureaucracy, which Beijing sees as having failed to handle the protests effectively.

“It’s always been the same group of people managing Hong Kong and Macau affairs, but their abilities are now in doubt,” he said. “They did not want to take responsibility and produced self-serving reports that misled Beijing when making decisions about the situation in Hong Kong.”

3. Wuhan virus

Earliest Wuhan Pneumonia Symptoms Observed Dec. 12, Authorities Say - Sixth Tone

The number of people infected with a mysterious viral pneumonia in Wuhan has climbed to 59, with the first patient exhibiting symptoms as early as Dec. 12, the city’s health commission announced Sunday. Though the virus has not yet been identified, several causes — including SARS, as many in the country feared — have been ruled out.

Chinese authorities say viral pneumonia outbreak is not SARS, MERS or bird flu - Reuters

In a statement posted on its website Sunday night, the Wuhan Municipal Health Commission said a total of 59 cases of unknown viral pneumonia had been reported as of Sunday, including seven in a critical condition. It also said it had put 163 people who had had contacts with the patients under medical observation.

Health Officials Work to Solve China’s Mystery Virus Outbreak - WSJ

Authorities are working to establish the source of the infection, as well as identify the virus and whether it is a previously unrecorded strain. Some infections are linked to vendors from a seafood market in Wuhan, and authorities have ordered the market closed. Vendors in the seafood market also sold wild animals such as rabbits and chickens, according to domestic media reports.

The World Health Organization said Sunday that the illness could indicate an exposure link to animals, without elaborating. The agency said it was in close contact with the national authorities in China and was closely monitoring the situation, but didn’t recommend any specific measures for travelers.

4. People’s Leader Xi

The English readout of the Politburo Democratic Life meeting did not mention “People’s Leader”, or the extremely fulsome praise of Xi that is included in the Chinese version.

CPC leadership meeting stresses staying true to Party's founding mission - Xinhua

The meeting began with reviewing a report on the implementation of the eight-point decision on improving conduct by the Political Bureau in 2019 and another report on addressing the practice of formalities for formalities' sake.

Afterward, Political Bureau members spoke one by one, examining themselves in aspects such as ideals and convictions, political integrity, sense of responsibility, and serving the people.

The meeting noted that it is a major political task for the entire Party to arm itself with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and put it into practice.

The meeting stressed upholding Xi's position as the core of the CPC Central Committee and the whole Party, as well as the authority of the CPC Central Committee and its centralized, unified leadership, saying that it is the fundamental political guarantee for socialism with Chinese characteristics for a new era to achieve continous progress.

中共中央政治局召开专题民主生活会强调 带头把不忘初心牢记使命作为终身课题 始终保持共产党人的政治本色和前进动力 中共中央总书记习近平主持会议并发表重要讲话-新华网


5. 2020 propaganda agenda

January 3rd was the annual meeting for propaganda officials to set the agenda for 2020. This CCTV Evening News report summarizes Wang Huning and Huang Kunming's speeches to the group. The report notes that Ding Xuexiang, director of the General Office of the Central Committee of the Communist Party of China attended. Last year's report on the 2019 meeting noted that Ding and Sun Chunlan attended. She was not mentioned this year, FWIW. - 全国宣传部长会议在京召开 王沪宁出席并讲话_CCTV

According to the report Huang:

"stressed that we should focus on building our hearts for the party and the country, and work to ensure that xi jinping thought on socialism with Chinese characteristics for a new era enters our minds and takes root. To create a strong atmosphere for building a moderately prosperous society in all respects and winning the battle against poverty; In order to serve the society and cultivate new members of The Times who are responsible for national rejuvenation; With a view to laying a solid foundation for the cause, we should improve the scientific, standardized and institutionalized level of propaganda work. We should focus on spreading the word for the country and make the world better perceive and understand China. We must adhere to the principle of keeping standards in line with each other, put politics as our top priority, and loyalty and reliability as our top priority. In practice, we should constantly summarize experience, grasp the law, adhere to the seek improvement in stability, keep innovation, and promote the ideological work of propaganda stronger."


Page 1 People's Daily January 3 report from Xinhua goes over the propaganda work achievements under Xi

The report includes some stats the the "Study Xi, Strong Nation" app, which launched January 1, 2019. It says the app has been downloaded 705 million times, there are 140 million registered users and nearly 500 million sessions per day (I am translating 上线人数 as "sessions" and not online users as I am not sure how there can be almost 500 million daily users when there are 140 million registered users)

Comment: If CCP propaganda is your thing, this long piece is a must read


Zhu Yonglei promoted to a deputy director of the National Radio and Television Administration. Zhu has spent his entire career in the Shanghai propaganda apparatus, most recently he was the vice-secretary general of the Shanghai Municipal Party Committee and deputy director of the Shanghai municipal propaganda department

6. US-China

Trump administration pressed Dutch hard to cancel China chip-equipment sale: sources - Reuters

The U.S. campaign began in 2018, after the Dutch government gave semiconductor equipment company ASML, the global leader in a critical chip-making process known as lithography, a license to sell its most advanced machine to a Chinese customer..

The pressure appears to have worked. Shortly after the White House visit, the Dutch government decided not to renew ASML’s export license, and the $150 million machine has not been shipped.

U.S. government limits exports of artificial intelligence software - Reuters

“They want to keep American companies from helping the Chinese make better AI products that can help their military,” said James Lewis, a technology expert with the Washington-based Center for Strategic and International Studies think tank.

The Future of America’s Contest with China | The New Yorker - Evan Osnos

Half a century after Henry Kissinger led the secret negotiations that brought Nixon to China, he still meets with leaders in Beijing and Washington. At the age of ninety-six, he has come to believe that the two sides are falling into a spiral of hostile perceptions. “I’m very concerned,” he told me, his baritone now almost a growl. “The way the relationship has deteriorated in recent months will feed, on both sides, the image that the other one is a permanent adversary.” By the end of 2019, the Washington establishment had all but abandoned engagement with China. But there was not yet a strategy to replace it.

400-pound rivals - China views Donald Trump’s America with growing distrust and scorn | The Economist

China is playing for time, as it builds its strength and tries to construct alternatives to such potent tools of American power as the dollar-denominated financial system. China’s interest in developing its own blockchain technology and international payment systems is in part a sign of its fear of American sanctions that would expel Chinese banks from American markets.

Stability of China-U.S. ties benefits world - People's Daily Online

People’s Daily published an article under the penname of Guo Jiping on Dec. 31, saying that the phase-one trade deal reached between China and the U.S. is beneficial for China, U.S. and the peace and prosperity of the globe, especially when the world is in an extremely complicated environment...

The article stressed that the phase-one trade deal between China and the U.S. explains that as long as the two countries stay committed to the general trend of cooperation and win-win results, and respect each other’s national dignity, sovereignty and core interests, they can overcome difficulties, promote the development of China-U.S. trade relations in new historical conditions, and benefit the two countries and their people.

Comment: The US-China theme was just one part of the long "Guo Jiping piece 人民日报国纪平:时不我待 只争朝夕——把握中国与世界共同发展的历史机遇 , translated in abridged form here - Losing no time in progressing—grasping the historic opportunity for common development:

China is a 5000-year-old oriental civilization, as well as a socialist country that has achieved glorious achievements through the past 70 years of hard work. Is it a partner or an opponent, an opportunity or a threat of the world? That is a question that has been frequently contemplated on by the world.

In answering this question, facts have proved that China’s development is beneficial to the world and its increasingly closer cooperation with global countries will make the world better.

At present, the world is undergoing profound changes unseen in a century, as economic globalization becomes an unstoppable trend while unilateralism and protectionism pose as the counter-currents. Against such a backdrop, only those who are firm about their development course and can grasp the opportunities are able to ride the tides of the global economy, the article stressed.

Chinese attendees of CES consumer tech show offered free legal help in case US authorities seize their stuff | South China Morning Post

“We will cooperate with you. We have lawyers who represent us. So before you seize our products, we would like to speak with our lawyer.”

This is not a line from a Hollywood script but a sentence that Chinese attendees of the CES consumer electronics event in Las Vegas have been advised by Beijing to learn and use should they face any unexpected attempts by US police to seize their exhibits

Chinese national arrested trying to photograph US military site — Quartz

Authorities arrested a Chinese national Thursday for taking pictures of a restricted area at a US Navy installation in Key West, Florida. The case mirrors a near-identical incident that occurred last December, in which a Chinese student was caught capturing images of buildings and antenna arrays at the same base.

Chinese tourists are being recruited to spy on the US — Quartz

On June 28, 2019, Qingshan Li landed in Southern California on a flight from China. Li, a Chinese national visiting the US on a tourist visa, was scheduled to return home 10 days later. The day after he arrived, Li drove his rental car to a storage facility in the San Diego area. There, he met up with an unidentified person named in court filings only as “AB,” from whom Li had arranged to purchase several pieces of sensitive military gear.

7. South China Sea pushback?

Indonesia mobilizes fishermen in stand-off with China - Reuters

In an unusually strong statement, President Joko Widodo told reporters: “There is no negotiation when it comes to our sovereignty.”

The stand-off since last month in the northern Natuna islands, where a Chinese coastguard vessel has accompanied Chinese fishing vessels, has soured the generally friendly relationship between Jakarta and Beijing.

Indonesia’s chief security minister, Mahfud MD, told reporters that around 120 fishermen from the island of Java would be sent to the Natuna islands, some 1,000 km (600 miles) to the north.

Chinese fishing vessels remain in Natuna amid diplomatic tension: TNI - National - The Jakarta Post

Following a series of naval maneuvers by Chinese coastguard and fishing vessels in Natuna waters last week, Indonesia summoned Chinese Ambassador to Indonesia Xiao Qian on Monday to lodge a formal protest, with the Foreign Ministry saying that Indonesia would never recognize China's Nine-Dash Line — the geographic expression of Beijing's sweeping claims over the South China Sea — because it was contrary to international law.

Malaysia Stands by Claim to Increase South China Sea Territory - RFA

Malaysia stands by its request to extend its boundary farther into the South China Sea, Foreign Minister Saifuddin Abdullah told reporters Friday, acknowledging Chinese opposition to the move and the potential for the case to lead to arbitration before the United Nations.

The government submitted a claim to the U.N. on Dec. 12 to increase Malaysia’s continental shelf beyond the standard 200 nautical miles off the northernmost point of Malaysian Borneo, according to submission documents viewed by BenarNews, an RFA-affiliated online news service.

8. Xinjiang

In China’s Crackdown on Muslims, Children Have Not Been Spared - The New York Times

In Xinjiang the authorities have separated nearly half a million children from their families, aiming to instill loyalty to China and the Communist Party...

State media and official documents describe education as a key component of President Xi Jinping’s campaign to wipe out extremist violence in Xinjiang, a ruthless and far-reaching effort that also includes the mass internment camps and sweeping surveillance measures. The idea is to use the boarding schools as incubators of a new generation of Uighurs who are secular and more loyal to both the party and the nation.

Inside China’s Push to Turn Muslim Minorities Into an Army of Workers - The New York Times

The government describes the laborers as volunteers, though critics say they are clearly coerced. Official documents, interviews with experts, and visits by The New York Times to Xinjiang indicate that local plans uproot villagers, restrict their movements and pressure them to stay at jobs...

The government’s goals are sweeping. One plan issued in 2018 called for putting to work 100,000 people from the poorest parts of southern Xinjiang, a heavily Uighur area, by the end of 2020. The government recently said that target was met a year ahead of schedule. By late 2023, another plan says, Xinjiang wants one million working in its textile and garment industries, up from about 100,000 in 2017.

CGTN's Wang Guan: What's China's 're-education camp' in Xinjiang really about? - YouTube

Many in the West believe that China's Xinjiang Uygur Autonomous Region is plagued by "ethnic repression" instead of facing a terrorism challenge. The "re-education camps" are the most recent case in point. These views are based on reports and studies from largely western sources, which can be seriously flawed and painfully uninformative. CGTN's Wang Guan investigates these biases as he travels deep inside Xinjiang.

Comment: Wang is a SAIS grad, Asia Society Young Leader 17' and NCUSCR YLF fellow

More than 100 Uyghur graveyards demolished by Chinese authorities, satellite images show - CNN

In a months' long investigation, working with sources in the Uyghur community and analyzing hundreds of satellite images, CNN has found more than 100 cemeteries that have been destroyed, most in just the last two years. This reporting was backed up by dozens of official Chinese government notices announcing the "relocation" of cemeteries.

Xinjiang refutes CNN report on ‘destruction of Uygur tombs' - Global Times

An anonymous source, familiar with the relocation of graveyards situation in Aksu, told the Global Times that previously there was a lack of public cemeteries in rural areas in the prefecture and some graves are scattered over farmland. To meet local residents’ demands, Aksu has built public cemeteries in line with residents’ willingness to help relocate graves, the source said, noting that for graves that could not be traced to families, the local government notified the public that it was relocating them to public cemeteries.

Business, Economy and Trade

China Denies Halting Shanghai-London Stock Connect Program - Caixin Several news outlets including Bloomberg and Reuters reported Thursday that new listings through the Shanghai-London Stock Connect were blocked by Beijing, possibly on political grounds. Reuters, citing public officials and people working on potential Shanghai-London deals, said Britain’s stance over the Hong Kong protests was one of the issues that prompted the move. In October the British government called the concerns of the city’s residents “legitimate.” Chang Depeng, spokesman of the China Securities Regulatory Commission (CSRC) said the media reports were not based on truth.

China's services sector expands at slower pace in Dec as confidence dips: Caixin PMI - Reuters The Caixin/Markit services purchasing managers’ index (PMI) slowed to 52.5 last month from 53.5 in November, but was still higher than an 8-month low hit in October.

Major City Land Sales Break Record as Local Governments Fill Budget Gaps - Caixin Land sales in major Chinese cities hit a record high in 2019 as officials struggled to fill budget gaps left by tax and fee cuts that have bitten into their fiscal revenue. Land sales revenue in 50 cities last year grew to a record 4.2 trillion yuan ($601.6 billion) as of Dec. 26, marking a jump of 17.6% from the same period in 2018, according to data provided by a research center of Hong Kong-based Centaline Property Agency Ltd. “It is the first time that the land sales revenue of the 50 cities surpassed 4 trillion yuan,” said Zhang Dawei, chief analyst at the Centaline research center.

Chinese City Bans Resale of New Homes Until At Least 2023 - Caixin A city in China’s east has moved to combat property speculation by banning new home owners from reselling their houses for at least three-and-a-half years. Tangshan, a prefecture-level city east of Beijing, implemented a 42-month resale restriction on Jan. 4 that applies to all newly built homes purchased after that date.

China tech start-ups go bust in 2019 ‘capital winter’ | Financial Times $$ According to new data from business information provider ITjuzi, 336 start-ups in the country were forced to cease operations over the course of last year, having collectively raised Rmb17.4bn ($2.5bn) from investors. Among them were companies valued individually at more than $1bn.

China to further encourage, protect foreign investment - SCIO Premier Li Keqiang signed a State Council decree to release the regulation. As a matching regulation, it will be implemented along with the Foreign Investment Law starting Jan 1, 2020. It specifies measures to promote foreign investment, protect the legitimate rights of foreign investors and regulate foreign investment management.

China encourages foreign-invested banks to underwrite local gov't bonds - Xinhua Local governments will be guided to revise rules to allow foreign-invested banks underwriting bonds issued by them as part of the country's financial market opening-up, the Ministry of Finance said.

China’s new urban dwellers really still live in the countryside, study says | South China Morning Post The study, carried out by economists from Southwestern University of Finance and Economics in Chengdu and Nankai University in Tianjin, is based on demographic changes to 700,000 communities across the country between 2009 and 2017. What it found was that over the period, 33 per cent of people were redefined by the authorities as being part of the urban population, though their actual lives did not change in any discernible way.

Innovation Drag: China’s Economic Impact on Developed Nations | ITIF The scholarly literature shows China’s rise, backed largely by unfair, mercantilist policies, has harmed innovation in the global economy—particularly in North America and Europe.

China readies wider antitrust law to cover internet companies - Nikkei Asian Review The draft legislation, announced Thursday by the State Administration for Market Regulation, would expand the definition of what constitutes a dominant position with potential to harm competition. Companies' ability to collect and process data has been added to the criteria, as well as the scale of their internet operations and first-mover advantage.

Charts of the Day: Power Consumption Slowdown Hints at Economic Woes - Caixin Global New figures show China’s electricity consumption in the first 11 months of last year grew at around half the pace that it did during the same period in 2018. Electricity consumption is seen as a useful alternative measure of a country’s economic development, and the news has fueled renewed concern over the real state of China’s economy, even amid more positive signs that cleaner sources are making up a larger proportion of the country’s energy mix.

Cash Subsidies for Homebuyers: New Year’s Gift From A Local Government - Caixin People who buy new homes in the first half of this year in specific areas of Fushun county can apply for government subsidies of 200 yuan ($28.70) per square meter, the county government’s housing bureau said in a document (link in Chinese) on Monday. The county, noted for its salt industry, is administered by Zigong city in the southwestern province of Sichuan...Fushun’s move comes as local governments have come under increasing pressure from the ongoing nationwide economic slowdown, which is due in part to, and in turn worsens, weak local property markets.

China to promote unified regional calculation of GDP - Xinhua China will introduce unified regional calculation of gross domestic product (GDP) to enhance the accuracy of the results, the National Bureau of Statistics (NBS) said Sunday. The new accounting system will take effect while calculating the annual regional GDP of 2019, said Ning Jizhe, head of the NBS, at a work conference in Beijing.

Foreign retailers lured by China's huge consumption power - Global Times "The year of 2019 was a remarkable year when the speed of opening up accelerated. That's why more foreign services firms rush in, in addition to traditional industries such as manufacturing," Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute, told the Global Times. "The growth streak will continue in the new year." But Bai said that the massive market in China is not up for grabs for anyone.  "Foreign investors' ability to generate continuous profits from China still hinges on their home countries' long-term bilateral relations with China. If political relations warm up, their products will be more broadly welcomed by Chinese consumers," Bai added.

China banking regulator eases market access for foreign lenders - Reuters The measures cancel the total asset requirements for foreign banks to set up businesses in China and relax limitations on shareholders of joint venture lenders, according to a notice posted on the CBIRC official website late on Friday.

Xi stresses eco-conservation of Yellow River basin, Chengdu-Chongqing economic circle development - Xinhua the sixth meeting of the Central Committee for Financial and Economic Affairs...To strengthen ecological protection and high-quality development of the Yellow River basin, the meeting underlined ecological conservation, green development and natural restoration of the environment...The meeting also noted that promoting the construction of the Chengdu-Chongqing economic circle will help foster a growth pole for high-quality development in western China and push opening-up in the landlocked area.

Over 300 mln train tickets sold for Spring Festival travel rush - Xinhua The upcoming Spring Festival holiday is a traditional time for family reunions, while the travel rush will last for 40 days from Jan. 10 to Feb. 18.

Politics and Law

CPC issues regulation for primary-level Party work in Party, State organs - Xinhua The 43-article regulation has specified issues including the setup of primary-level Party organizations in Party and State organs, their primary duties, political building of the Party, Party member education, intraparty democracy, and oversight, as well as organizational leadership and guarantee. 中共中央印发《中国共产党党和国家机关基层组织工作条例》

CPC issues regulations on primary-level Party work in SOEs - Xinhua The 41-article regulation have specified the setup of primary-level Party organizations in SOEs, their main duties, Party leadership and corporate governance, Party member education, political building, intraparty democracy and oversight as well as organizational leadership and guarantee. The regulation went into effect on Dec. 30, 2019. 中共中央印发《中国共产党国有企业基层组织工作条例(试行)》

Mass Line Internet Control | China Media Project Internet governance, in other words, is a process that should include all aspects of society, focusing the energies of more diverse parties on achieving the information control objectives of the Chinese Communist Party. All of this is very much in keeping with Xi Jinping’s interest in reviving the notion of the “mass line” in social governance, and his emphasis on Mao-era approaches such as the so-called “Fengqiao experience,” which the official Xinhua News Agency touted as a Xi interest as late as November.

Yicai Global - Chinese Regulator Cracks Insider Trading Case Using WeChat Message Trail The Supreme People's Court for the first time defined the scope of digital evidence admissible in court on Dec. 26 to include text and voice messages, emails, electronic transaction records, digital certificates as well as content published on websites, blogs, microblogs.

2019年中央出台的党内重要文件,都在这里了!--党建-人民网 People Daily Online gives a helpful list of all the important Party central documents issued in 2019

Xi's article on China's system, governance published - Xinhua An article by President Xi Jinping on upholding and improving the system of socialism with Chinese characteristics and advancing the modernization of China's system and capacity for governance was published Wednesday in this year's first issue of the Qiushi Journal. 坚持和完善中国特色社会主义制度推进国家治理体系和治理能力现代化 // The "Neican" weekly newsletter has a summary of the article in yesterday's issue

Change — A 2020 New Year’s Message from Xu Zhiyong « This is the New Year’s message from a civil society leader who is, at this very moment, on the run to elude arrest by the Chinese authorities.

China’s Political Discourse in 2019 | China Media Project - Qian Gang n 2019, the most important change we saw in the political discourse of the Chinese Communist Party was the complete abandonment of the phrase “political system reform,” or zhengzhi tizhi gaige (政治体制改革). The process of political reform in China was jump-started in the 1980s by Deng Xiaoping (邓小平), Hu Yaobang (胡耀邦) and Zhao Ziyang (赵紫阳) between 1986 and 1988, and during this period the term “political system reform” actually became what we label a “hot” (热) phrase within the discourse heat scale I have developed with the discourse analysis team at the China Media Project.

Chinese Leaders’ New Year’s Visits Point to 2020 Pork Worries - Bloomberg Two members from the Communist Party’s elite Politburo -- Li Qiang and Li Hongzhong, the party chiefs of Shanghai and Tianjin, respectively -- made New Year’s visits to local grocery markets. That’s after Beijing party secretary Cai Qi -- another Politburo member and a former subordinate of President Xi Jinping -- led a Dec. 24 meeting urging officials in the capital to help ensure sufficient pork supply among other livelihood-related tasks in 2020.

Changed and unchanged photos on Xi's bookshelves - China Daily

The CCP’s Renewed Focus on Ideological Conditioning, Part 2: The New Five-Year Plan for Training Party Cadres - Jamestown - John Dotson In recent decades, there has been a trend among many Western commentators to downplay the role of ideology in Chinese statecraft. By such analyses, the modern-day incarnation of the CCP is best understood as an institution that practices authoritarian, developmental state capitalism, but long ago abandoned its foundational ideology—in effect, to say that the Chinese Communist Party long ago ceased to be truly communist. These views have been grounded in uncritical assumptions, and in credulous acceptance of the CCP’s propaganda directed to foreign audiences, rather than study of the copious documentary record regarding the CCP’s own internal discourses. While cynicism about communist dogma may well be widespread throughout Chinese society and officialdom, the senior echelon of CCP leadership—in a direct trajectory from Tiananmen up to the present day—has been carefully self-selected to ensure that only faithful advocates of the CCP’s ruling position and ideological formulae may enter the sanctums of power

China jails underground pastor Wang Yi for nine years for inciting subversion | The Guardian Leader of Early Rain Covenant, which is not sanctioned by Communist party, swept up in crackdown on religion under Xi Jinping

Former senior legislator, Party chief of Shaanxi expelled from CPC - Xinhua Zhao Zhengyong, former Party chief of northwest China's Shaanxi Province and a former senior national legislator, has been expelled from the Communist Party of China (CPC) over serious violations of disciplines and laws, the top anti-graft body announced Saturday. Zhao strayed from his ideals and convictions and was disloyal to the Party

首次披露落马的陕西副省长陈国强,曾是赵正永的大管家 Former Shaanxi vice governor Chen Guoqiang has also been transferred to judicial authorities. The announcement of this move on January 4 was the first official mention that Chen was in trouble after he was removed as deputy governor last March

China consolidates sweeping victory against corruption in 2019 - Xinhua From January to November, disciplinary inspection and supervisory organs across the country filed and investigated 555,000 cases, with 485,000 people receiving disciplinary measures within the Party or government agencies, while 19,000 were transferred to procuratorates for criminal investigation. Around 70,800 and 86,400 cases involving corruption and misconduct related to poverty relief and people's wellbeing respectively were handled in the period, with 99,000 and 110,000 people punished, the statistics showed. The campaign against gangs and organized crime has also made headway, handling 47,200 cases of gang-related corruption and "protective umbrellas" that shelter crimes since its launch in January 2018. Moreover, a total of 1,841 fugitives were repatriated to China from abroad from January to November this year, including 816 Party members and state functionaries, and over 4.09 billion yuan (around 585.58 million U.S. dollars) of illicit money was recovered.

China unveils regulations on management of religious groups - Xinhua The National Religious Affairs Administration of China has released a set of regulations on the management of religious groups. In six chapters and 41 articles, the regulations include content on the organization, functions, supervision and management of religious groups. 《宗教团体管理办法》公布,2020年2月1日起施行

Beijing Power Chairman Sacked for Faking Story of Hard-Working Employee Li Tongzhi was replaced as chairman of Beijing Electric Power Corp. on Nov. 27 and has been suspended from work, an anonymous source told Caixin. This came after the company in March released a fabricated story about a female employee — who, it was claimed, worked a 24-hour shift monitoring a transformer substation in central Beijing — in an attempt to win an annual prize for working women handed out by the All-China Federation of Trade Unions.

Foreign and Defense Affairs

Chinese President Xi Jinping to take over as host of ‘17+1’ summit with European leaders | South China Morning Post Decision to replace Premier Li Keqiang at annual meeting reflects Beijing’s increased focus on Europe amid rising tensions with US, sources say

U.S. accuses Russia, China of blocking U.N. statement on Baghdad embassy attack - Reuters The United States accused Russia and China on Monday of blocking a United Nations Security Council statement “underscoring the inviolability of diplomatic and consular premises” after a Dec. 31 attack on the U.S. embassy in Baghdad.

Chinese FM says China to play constructive role in maintaining peace, security in Middle East - Xinhua Wang made the remarks during a phone call with Iranian Foreign Minister Mohammad Javad Zarif. The dangerous U.S. military actions violated the basic norms of international relations and would aggravate regional tensions, Wang said.

Book on Xi's discourses on diplomacy published - Xinhua A compilation of discourses of Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, on major country diplomacy with Chinese characteristics has been published by the Central Party Literature Press. The book contains discourses extracted from more than 190 pieces of speeches, articles, congratulatory letters and other documents by Xi between December 2012 and November 2019, some of which are published for the first time.

深入学习习近平外交思想,努力开创中国特色大国外交新局面 Monday's People's Daily devotes all of page 6 to an article by "闻 言 Wen Yan" on studying Xi Diplomatic Thought through the newly released compilation of discourses of Xi Jinping on major country diplomacy with Chinese characteristics

《习近平关于中国特色大国外交论述摘编》出版发行_CCTV The new compilation was the top story on the Sunday CCTV Evening News. From a Youdao ML translation: Excerpts of treatises are divided into 10 topics: strengthening the centralized and unified leadership of the party over foreign affairs under the leadership of maintaining the authority of the party central committee; Promoting major-country diplomacy with Chinese characteristics with the mission of achieving the great rejuvenation of the Chinese nation; To build a community of Shared future for mankind with the purpose of maintaining world peace and promoting common development; We will enhance our strategic confidence by upholding socialism with Chinese characteristics. We will promote "One Belt And One Road" development on the principle of extensive consultation, joint contribution and Shared benefits. To follow the path of peaceful development on the basis of mutual respect and win-win cooperation; Building global partnership based on deepening diplomacy; We will lead the reform of the global governance system in the spirit of fairness and justice. To safeguard national sovereignty, security and development interests with the core national interests as the bottom line; We will continue to shape China's unique style of diplomacy by combining the fine traditions of our diplomatic work with the characteristics of The Times.

Kiribati on right side of history by resuming diplomatic ties with China: Xi - Xinhua China and Kiribati resumed diplomatic relations in September 2019 on the basis of the one-China policy, opening a new chapter for bilateral ties, said Xi. "Mr. President and the Kiribati government stand on the right side of history," Xi told Mamau, adding that the resumption "fully embodies their strategic vision and political courage."

China, Kiribati sign MOU on Belt and Road cooperation - Xinhua

Xi says China, Laos enjoy shared future - Xinhua Chinese President Xi Jinping said here Monday that as good neighbors, friends, comrades and partners, China and Laos enjoy a shared future. Xi made the remarks when meeting with visiting Lao Prime Minister Thongloun Sisoulith.

China Eyes Increased Ties With Kiribati, Site of Space Tracking Station - Reuters Speaking to reporters after Chinese President Xi Jinping met Kiribati's President Taneti Maamau in Beijing, the diplomat, Lu Kang, did not respond directly to a question about whether Beijing planned to reopen the space tracking station.

Ambassador Zhang Ming's Exclusive Interview with the Financial Times - MoFA I am not trying to say that the EU must accept or reject a certain company from a certain country. But it is important for the EU to keep to the very fundamental principles of multilateralism, free trade and market economy. It's important for them to stand by the principles of openness, fairness, justice and non-discrimination. These are principles that the EU has long held dear to its hearts. So I hope that on these matters of principle, the EU would not be ambivalent but be unequivocal. Otherwise there will be serious market distortions. Today these distortive measures may be applied to 5G technology, and maybe in the future, they would be applied to furniture or even carpets. That will bring chaos to the world. Actually similar things are already happening. For example, Americans are saying that European cars are national security threats to them. It's ridiculous.

China tests new tank, cannon in military drill along Tibet border - Hindustan Times China’s People Liberation Army (PLA) has begun a major military exercise in the high-altitude border areas of Tibet, deploying latest weapons including a new lightweight tank and anti-aircraft missiles to check combat readiness of its troops and the efficiency of its weaponry, state media reported.

How Trump’s Trade War Is Making Lobbyists Rich And Slamming Small Businesses — ProPublica Washington’s influence industry, including former Trump officials and allies, has made big money helping companies get exemptions from tariffs

Iran Lacks Allies in Confronting the U.S. - WSJ $$ “The Middle East presents a falling significance in the grand strategy of China,” Niu Xinchun, director of the Institute of Middle East Studies at CICIR, a think tank affiliated with China’s Ministry of State Security, wrote in a 2017 policy paper. “As a matter of fact, since 2011, many Middle Eastern countries have descended into civil war at the same time, which failed to exert material impacts on China’s economy.” China’s participation in the December naval exercises with Iran is “more symbolic that substantial,” added Zhu Feng, director of the Institute of International Studies at Nanjing University. “I don’t think China has any interest in getting i

How to Defend Campus Free Speech Against China - The Atlantic - Rory Truex Americans are witnessing a similar encroachment on territory equally central to our national interest: our own social and political discourse. Through a combination of market coercion and intimidation, the Chinese Communist Party is trying to constrain how people in the United States and other Western democracies talk about China. This encroachment needs a measured response—what we might call freedom-of-speech operations, or FOSOPs for short. American universities can take the lead.

'Shattered': Inside the secret battle to save America's undercover spies in the digital age One former NOC who served in China as an undercover businessman in the mid-2010s approached Congress with specific concerns about the program, says a former national security official. The NOC was frustrated that his colleagues lacked experience in the field, didn’t speak local languages and were expected to recruit unrealistic targets, like top political figures or very senior businesspeople.

China quantum-technology program head Pan Jian-Wei linked to defense companies, Western universities - The Washington Post Strider found that a state-owned shipbuilder of military and civilian vessels appointed Pan [Jiawei] as deputy director of its science and technology committee in 2017. Strider also found that Pan last year signed an agreement committing his institution, the University of Science and Technology of China, to conduct quantum research with a state-owned defense contractor. MIT Technology Review first reported details of Strider’s findings.

How Zimbabwe’s new parliament symbolises China’s chequebook diplomacy approach to Africa | South China Morning Post China’s Shanghai Construction Group is erecting US$140 million parliamentary complex on top of a hill outside Zimbawbe’s capital, Harare

China's heaviest satellite positioned in geosynchronous orbit - Xinhua China's heaviest and most advanced satellite, Shijian-20, reached its fixed position in geosynchronous orbit Sunday, marking the first successful flight of DFH-5 satellite platform, according to the China Aerospace Science and Technology Corporation.

From Pioneers to Brokers: How a diverse Chinese diaspora facilitates the Belt and Road in Lao – Panda Paw Dragon Claw A lively snapshot of those who lubricate deals and exchanges that make the Belt and Road possible

The Role of the Arctic in Chinese Naval Strategy - Jamestown - Ryan Martinson this article argues that the available evidence allows for more categorical conclusions about China’s Arctic intentions. Specifically, the Chinese Navy has formally decided to incorporate Arctic ambitions into its naval strategy, and Chinese scientists and engineers are already conducting research to help it realize these ambitions.

Chinese students - The new red scare on American campuses | Briefing | The Economist Communist Party figures have been happy to see the Trump administration’s spy-hunt portrayed as a xenophobic exercise. In December Hua Chunying, a foreign ministry spokeswoman, praised the “courage” of Fareed Zakaria, an American commentator who belittled the administration’s concerns in an article headlined “The New China Scare”.

Chinese internet users angered by The Netherlands’ New Year message — Quartz The message, which emphasized the importance of human rights, contained a screenshot of the Chinese court document (link in Mandarin) that sentenced a Chinese Christian pastor to nine years in prison.

K Street lobbyist Michael Esposito's home and office raided by FBI - The Washington Post Other major clients, including Chinese tech giant Huawei — which signed Federal Advocates to one of the largest lobbying contracts in Washington this year — said before news of the raid that they planned to remain clients of the firm. Federal Advocates collected $1.65 million from Huawei in a three-month period this year, according to lobbying records.

China will not ‘sit idle’ if Huawei is excluded from Germany’s 5G rollout: official - Global Times If Germany passes laws that bar Huawei from participating in local 5G construction without showing solid evidence, China will not "sit idle," a Chinese official told the Global Times, noting that companies from the European nation have reaped massive benefits from the Chinese market...Wang Weidong, commercial counselor of the Chinese Embassy in Germany, told the Global Times in an exclusive interview that it is a "discriminative and unjust" decision against Chinese companies if Huawei is banned in Germany.

The Spice Route | The Indian Express Meet the tiny network of Chinese women, who work the Indian diplomatic circuit in China and learn to puff the perfect chapati.

China drops $11bn anchors to expand Maritime Silk Road - Nikkei Asian Review Chinese enterprises have invested in 25 port projects in 18 countries from 2010 through December, according to public documents reviewed by Nikkei. Though some projects have faced resistance or run into trouble, most ports that have accepted Chinese investments have fared well. The numbers indicate China is making strides on its vast infrastructure project.

Bloomberg's business in China has grown. That could create unprecedented entanglements if he is elected president. - The Washington Post “When he is talking about how China works and not a dictatorship, I think he is just observing what he has seen over the years and throwing it out there without sucking up to the Chinese leadership,” said Peter Walker, author of “Powerful, Different, Equal: Overcoming the Misconceptions and Differences Between China and the U.S.” “It is pretty gutsy of him, saying something positive or even neutral about China,” Walker said. “There are a lot of people who don’t want to hear that story. It is one that is so counter to the belief that the American model is the best model there is.” // Decent article, didn’t get everything, Bloomberg folks should just leak the remaining China stuff now to get it out early. It will come out eventually

Bloomberg profits from conference business in China | Financial Times Based on a forecast by consultancy Burton-Taylor, which expects Bloomberg Media’s total revenues to reach $310m this year, that could equate to about $30m for the NEF alone.

Chinese skiers want book removed from Meråker library - Norway Today “We have had three different inquiries from individuals who have asked us to remove that book. Two to three other books are also mentioned from our  collection. They have said that if any of the Chinese skiers are caught with these books, they are afraid that they would risk being sent to labor camp or prison in China,” Marken told the newspaper.

National MP Jian Yang organised Simon Bridges' controversial China trip, emails show | Simon Bridges' controversial China visit was organised by Jian Yang, the National MP who admitted to training Chinese spies, official emails show. Bridges was criticised for praising the Chinese Communist Party (CCP) in an interview on Chinese state television during the five-day trip in September.

Xinhua begins Pakistan language service to push Belt and Road - Nikkei Asian Review China's state news agency Xinhua has launched Urdu service in Pakistan to promote cooperation with local media, ostensibly to counter criticism against the major projects under the Belt and Road Initiatives in the country, known as China-Pakistan Economic Corridor.

Xi signs order for military training - People's Daily Online Training and exercises for joint operations must be priorities, it requested, adding that the military must strengthen the participation of civilians and new types of forces in systemic training. Troops must inject more scientific and technological factors into training and carry out more mobilization drills, according to the document. 中央军委2020年开训动员令

China's Shandong Aircraft Carrier with J-15 Fighter training aboard - People's Daily Online ootage of J-15 fighter jets training to take off and land on China’s Shandong aircraft carrier

Tech and Media

Baidu eyeing secondary Hong Kong listing: report · TechNode US-listed Chinese search engine Baidu has reportedly completed an internal assessment for a secondary listing on the Hong Kong stock exchange, according to a Chinese media report published Monday.

Bytedance's Douyin reaches 400 million users · TechNode Douyin has been facing fierce competition from rival short video platform Kuaishou, which entered “battle mode” in June in an effort to boost its DAU to 300 million by the end of January

Google pursued profits over free speech in China, former head of international relations says Ross LaJeunesse, who is now a Democratic candidate for the U.S. Senate in his native Maine, said in a blog post Thursday that Google abandoned its former, famous motto “Don’t be evil” as potential business in countries such as China and Saudi Arabia became too enticing.

ByteDance & TikTok have secretly built a deepfakes maker | TechCrunch TechCrunch has learned that ByteDance has developed an unreleased feature using life-like deepfakes technology that the app’s code refers to as Face Swap. Code in both TikTok and its Chinese sister app Douyin asks users to take a multi-angle biometric scan of their face, then choose from a selection of videos they want to add their face to and share. //Meanwhile, has shot down. This is the message on the site - Sorry! TechCrunch.CN is no longer in operation.

Society, Arts, Sports, Culture and History

China reduces penalties on violating family planning policy - Global Times A total of 31 provinces, municipalities and autonomous regions have revised their family planning regulations, but the provisions of the regulations differ with regard to the legal responsibilities that people with excessive births should bear, Beijing-based newspaper China Times reported on Monday. Reducing penalties on couples who gave birth to more than two children is the latest proof of China's relaxation of the fertility policy, Yuan Xin, a professor at the Institute of Population and Development of Nankai University, told Global Times on Monday

Energy, Environment, Science and Health

China moves ahead with major science, technology sectors under 2030 goals - Global Times Chen Yao, a research fellow at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, told the Global Times on Sunday that the launch of a major science and technology project is significant as it is about reaching the commanding heights of international standards. "It is all about seizing the commanding heights of scientific and technological standards and gaining technological competitiveness," Chen said. "This is also the goal of our science and technology projects in China, so that the country and most people can benefit."

Senior Chinese military official stresses sci-tech progress for strong military - China Military Zhang Youxia, a member of the Political Bureau of the Communist Party of China Central Committee and vice chairman of the Central Military Commission, made the remarks when meeting with newly selected academicians of the Chinese Academy of Sciences and the Chinese Academy of Engineering, the country's two top science institutions, from the military.

Chinese President Xi Jinping sends letter in reply to student representatives of the Global Alliance of Universities on Climate - Xinhua My goal is for China to build an ecological civilization as part of our international responsibility to tackle climate change, and at the same time to work with the rest of the world to protect the Earth, the common home of us all. I look forward to your active efforts in this field as doctoral students from world-renowned universities. I also welcome your continued interest in China's development and more good suggestions from you.

Beijing’s air quality shows significant improvements as ‘war on pollution’ targets coal use | South China Morning Post The 2019 average concentration of 42 micrograms per cubic metre was 53 per cent lower than the 2013 figure of 89.5, according to the municipal ecology and environment bureau.

How a New Law Turned China’s Vaccine Industry Upside-Down - Sixth Tone The vaccine law aims to bring peace of mind to Chinese parents by increasing scrutiny of vaccine makers and preventing substandard products from making it to the market. But the tighter oversight is also creating supply issues, as vaccine companies shut down, unlicensed clinics stop administering shots, and products get recalled on a large scale.

In Depth: Beijing’s New Solution for Millions of Tons of Trash - Caixin The capital’s top policymaking body unveiled a set of new rules Dec. 18 to take effect May 1, requiring all households to sort trash by method of disposal, such as incineration, landfill and recycling. The move follows similar rules imposed since July 2019 by Shanghai, the eastern financial hub.