The Politburo meeting to set economic work for the rest of the year was Tuesday, not over the weekend as I wrote yesterday I had heard. Regardless, the message was about as expected, no talk of big stimulus but we certainly should expect more measures to keep things from going off the rails.

The US delegation arrived in Shanghai and had dinner with Liu He. Based on President Trump’s tweets Tuesday morning DC time things do not seem to have gotten off to a great restart, or the President thinks re-upping threats as the US team is in China will somehow move the Chinese side:

Donald J. Trump @realDonaldTrump

China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years....

Donald J. Trump @realDonaldTrump

..My team is negotiating with them now, but they always change the deal in the end to their benefit. They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue

Donald J. Trump @realDonaldTrump

...to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it!

Donald J. Trump @realDonaldTrump

China has lost 5 million jobs and two million manufacturing jobs due to the Trump Tariffs. Trumps got China back on its heels, and the United States is doing great. @AndyPuzder @MariaBartiromo

I doubt those tweet threats will lead to any breakthroughs, and I do think the Chinese have hardened things enough to manage the impact of the current tariffs and are prepared to struggle through the impact of the next round of threatened tariffs as well.

Thanks for reading.

The Essential Eight

1. Politburo meeting

CPC meeting analyzes economic situation, reviews accountability regulation, inspection report - Xinhua

The Political Bureau of the Communist Party of China (CPC) Central Committee held a meeting on Tuesday, analyzing the economic situation, arranging economic work in the second half of the year, and reviewing a Party accountability regulation and a report on discipline inspection...

As the Chinese economy faces new risks and increasing downward pressure, the country should focus on long-term trends and key issues so as to turn crises into opportunities, the statement said.

China will maintain the basic tune of "seeking progress while maintaining stability" for its economic work and continue to promote supply-side structural reform.

China must uphold the new development philosophy, and make efforts to boost high-quality development, and push forward reform and opening-up, the statement said...

China will continue to implement the proactive fiscal policy and the prudent monetary policy. Fiscal policy should be strengthened and policies of cutting taxes and fees should be further implemented. China will keep its monetary policy neither too tight nor too loose while maintaining market liquidity at a reasonable level...

China will adhere to the principle of "housing is for living in, not for speculation," implement the long-term mechanism to maintain the sound development of the real estate market, and not use real estate as a short-term means of stimulating the economy, according to the meeting.

The official release - 中共中央政治局召开会议中共中央总书记习近平主持会议-新华网

China can turn US trade war ‘crisis into an opportunity’, says top leadership, as Donald Trump tweets complaint | South China Morning Post

China has the chance to turn “a crisis into an opportunity” with its response to the trade war with the United States, the country’s top leadership said on Tuesday, even as US President Donald Trump complained bitterly that Beijing has not started buying American farm products.

The Politburo, the ruling Communist Party’s top decision-making body headed by President Xi Jinping, concluded that China must rely on the country’s domestic demand potential, including the vast countryside, to manage “new risks and challenges” and offset “growing downward pressure on economy”, according to the official Xinhua News Agency.

The report on the Politburo’s quarterly review of the economic situation did not mention any specific recommendations for additional fiscal or monetary stimulus to offset the affect of the trade war with the US which contributed to China’s economic growth slowing to a record low of 6.2 per cent in the second quarter of 2019.

China’s Politburo Vows Action on Trade, Tweaks Stimulus Policy - Bloomberg

This “isn’t major escalation in the current policy setting, and more effective implementation of existing policies is being stressed,” said Ding Shuang, Greater China & North Asia chief economist at Standard Chartered Bank Ltd in Hong Kong...

Tuesday’s statement said the Chinese economy “faces new risks and challenges with rising downward pressure.” The statement also dropped previous language on cutting the leverage ratio, and asked authorities to manage the pace of addressing financial sector risks.

中共中央召开党外人士座谈会习近平主持并发表重要讲话-新华网

Xi met with non-CCP members on Monday to discuss the economy. Xi insisted that the future is bright despite the difficulties it faces at the moment. Xi said China should work meticulously to deal with the risks and turn the crisis into an opportunity.

2. US-China trade

Trump backpedals on China threats as trade deal shows signs of slipping away - The Washington Post

“The two sides are still trying to figure out how to get back to the table,” said Myron Brilliant, executive vice president of the U.S. Chamber of Commerce. “We were close in May. Now the ground has gotten shakier.”

Several chamber executives were in Beijing this month for talks with Chinese officials, warning them against waiting for a better deal after the 2020 election. A prolonged delay risks the appearance of new issues that could complicate hopes for a comprehensive deal, Brilliant said.

现场：磋商重启美方代表抵沪

Video of Lighthizer and Mnuchin arriving in Shanghai. They had dinner with Liu He at the Peace Hotel at the bund, and the talks will be held in the Xijiao State Guest Hotel, where Nixon and Zhou Enlai signed the Shanghai Communique in 1972. But hasn't the original building where those talks were held been torn down?

Taoran Notes on the eve of the restarted talks says there will be only be progress if the US shows sincerity - 陶然笔记：有诚意，才会有进展_手机网易网

Don’t get hopes up on China talks - POLITICO

Senate Minority Leader Chuck Schumer on Monday urged the Trump administration not to back down in negotiations, specifically pressing the president not to use Huawei as a bargaining chip.

“The best way to get China to do something fair is to stand tough on Huawei. Don’t sell out or give Huawei half or three-quarters of what it wants, hold tough. And the Chinese in a few months will come to us with real concessions,” Schumer said in floor remarks.

Warren moves to outflank Trump on trade - POLITICO

Warren’s plans list nine separate criteria a country would have to meet before negotiating a trade deal with the U.S. Those standards include upholding and enforcing the labor rights laid out by the International Labour Organization, eliminating all domestic fossil fuel subsidies, fulfilling commitments from the Paris Climate Agreement, not running afoul of the State Department’s Country Reports on Human Rights, and not being on the Treasury Department’s monitoring list for manipulative currency practices.

3. Taiwan arms sales as trade bargaining chip

Lawmakers Accuse Trump and Aides of Delaying F-16 Sales to Taiwan - The New York Times

Chinese officials have said they object strongly to the sale of 66 jets requested by Taiwan, which would be by far the largest such purchase by its government in many years. Lawmakers are now questioning whether the Trump administration is delaying approval of the sale, either to avoid upsetting Beijing while delicate trade negotiations are underway or to use it as a bargaining chip.

Any such move by the administration would ignite intense bipartisan opposition in Congress...

Three congressional officials said the F-16 sales were delayed after trade advisers appealed to Mr. Trump. One of the officials, who works for a senior Republican lawmaker, said he expected Mr. Bolton and perhaps Mr. Pompeo to press Mr. Trump this week to approve the sales, though Mr. Pompeo leaves for Thailand on Tuesday.

4. Will finance be the next US-China battleground?

US appeals court upholds contempt orders against three Chinese banks | Financial Times $$

The banks were held in contempt earlier this year after they refused to turn over information relating to North Korean efforts to avoid US sanctions.

The trio of lenders have not been named in the largely sealed proceedings, but the anonymised details correspond to Bank of Communications, China Merchants Bank and Shanghai Pudong Development Bank...

The finding means Shanghai Pudong Development Bank, which had received an administrative subpoena under the US Patriot Act, rather than a grand jury subpoena, could be at risk of losing access to the US financial system.

Comment: Cutting off a bank like SPDB, which is big but not systemically important, would be seen in Beijing as an escalation towards what many expect would be the third front in the US-China relationship-trade "war", tech "war", and financial “war".

Wall Street will be the next US-China battleground - Nikkei Asian Review OpEd by Fraser Howie and Roger Garside

If the most extreme sanctions were to gain traction, those who gained most from China's economic rise would suddenly find their assets effectively frozen offshore or remitted back onshore. It surely would play badly for President Xi Jinping if the Chinese elites were thus left substantially poorer and very much shackled within the nation's financial system.

The links between billions of dollars in offshore assets, self-made tycoons, bosses of state-owned enterprises and the nation's political leaders are deliberately opaque. But it would be naive to think that a hard blow to the pocketbooks of China's elites would not echo around the courtyards of the Zhongnanhai leadership compound in Beijing. Xi might then find himself forced to compromise far quicker than he would like and by those he needs to keep closest at hand.

美国长臂管辖的缘起、扩张及应对

Xu Feibiao, a fellow with CICIR, the think tank affiliated to the ministry of state security, wrote about how should China respond to US unilateral sanctions against Chinese individuals and companies. He suggests China continues its opening up to the world, to increase the cost of US sanctions, as well as setting up special purpose entities to evade sanctions.

5. Hong Kong

Hong Kong Charges Dozens of Protesters With Rioting - The New York Times

The government said Tuesday evening that 44 people who were arrested Sunday night had been accused of rioting. In addition, a 33-year-old man would also be charged with assaulting a police officer, and a 24-year-old man was charged with possession of offensive weapons.

Protesters and Hong Kong officers clash outside police station after 44 arrested in earlier confrontation charged with rioting | South China Morning Post

At about 10.30pm outside Kwai Chung Police Station, crowds that had gathered to receive all the suspects – who were released on bail – turned rowdy, with some throwing eggs and umbrellas at the building.

Tensions escalated as police came out to disperse the crowd, with the use of pepper spray reported.

Hong Kong Train Disruptions Show Protests Becoming Daily Affair - Bloomberg

Train services were slowed on the centrally located Island Line and the Kwun Tong Line across Victoria Harbor after black-clad protesters blocked doors and requested emergency assistance during the morning rush. There was yelling and confusion as commuters found themselves stuck in large crowds on subway platforms for the second time in less than a week.

China’s propaganda machine uses foreign voices to support its stance on Hong Kong protests | South China Morning Post

The language used in the interviews largely echoed comments made by Yang Guang, spokesman for Beijing’s highest office on Hong Kong affairs, at a news conference on Monday, when he called on all sectors of the city to “firmly oppose violence” and criticised some in Western countries for “irresponsible remarks”.

Without giving evidence, the Xinhua report cited Kenyan international relations expert Adhere Cavince, Mexico-based China expert Ricardo Chang, and Afghan journalist Hamidullah Arefi as criticising foreign forces for influencing the events in Hong Kong.

铁证！美国资助乱港分子：“每年都问该如何帮你”

Another article from People’s Daily WeChat account accusing US organizations like the National Endowment for Democracy for funding the Hong Kong protests. It did not give any evidence but cited Wikileaks in saying the US funded the earlier Occupy Central movement.

“洋指挥”向示威者通报警方动向，被港媒拍到

People’s Daily WeChat account reposted an article about a New York Times employee sending messages to his colleagues about police movement during the protest, suggesting Americans are helping the protesters.

Foreign Ministry slams Mike Pompeo on HK - Global Times

Responding to Pompeo's comments, Hua said "I don't know if he [Pompeo] wants to move the protests in Hong Kong where radically violent activists attacked the police with steel bars and deadly weapons to the US. The US then can show its 'democracy' to the world."

"I'm afraid he [Pompeo] still regards himself as the head of the CIA. He might believe that the recent violence in Hong Kong is reasonable because as you may all know, it is, after all, a 'work' of the US," she said.

2019年7月30日外交部发言人华春莹主持例行记者会 — 中华人民共和国外交部

我想蓬佩奥先生显然没有摆正自己的位置，恐怕他还是把自己当作了CIA负责人。他说香港近期的暴力事件是合理的，因为大家可能也都知道，这毕竟也算是美方的一个“作品”。

Foreign Ministry Spokesperson Hua Chunying's Regular Press Conference on July 29, 2019

As you may remember, at the beginning of this year, the European Council passed a bill, stressing that freedom of protest and speech does not mean there is no limit, and that it should be exercised to the extent permitted by law and subject to restrictive measures of policing. You may have also noted some recent incidents in New York where citizens harassed and doused police officers in duty with water. We noted that the US President, officials at various levels and the police all condemned such behaviors, which in their words are unacceptable and intolerable. During the "Occupy Wall Street" movement in 2011, the New York Police Department gathered police forces from eight cities. They had riot control vehicles, riot control police, snipers and rangers. Their weapons included police batons, electric batons and stun guns. The US police also said on many occasions that if the life of any policeman was ever threatened, they would respond with force on the spot. The US lawmaker you mentioned may need to check with US police how they would have responded to such violent attacks on police in Hong Kong had they happened in the Washington D.C. or New York city. I believe you can imagine the scene.

6. “Beautiful Xinjiang” report

China Says Most Muslims Have Been Released From Camps. Others Say: Prove It. - The New York Times

At a news conference in Beijing, two of Xinjiang’s top leaders indicated that the majority of inmates — and maybe 90 percent or more — had “returned to society.” Their abrupt and largely unexpected announcement appeared to be China’s latest effort to defuse international criticism of the re-education camps, which experts estimate have come to hold a million or more Uighurs and other ethnic minority Muslims since the camps began to expand rapidly in 2017...

Official Chinese media accounts of the two officials’ comments varied, raising the possibility that they misspoke and their comments had to be drawn back. Some cited the Mr. Zakir as saying that 90 percent or more of people from camps had returned to society. Others said, citing him, that 90 percent of those released had found suitable work.

Beijing's top Uyghur official claims most inmates have left Xinjiang camps - CNN

Zakir said the camps had taught Uyghurs to practice their religion "normally" but added no single religion or minority group had been targeted.

"If there still skeptics, whether they are journalists, officials or religious figures, we welcome them to visit anywhere in Xinjiang or go to any vocational training center of their choice -- anytime" he said.

Previous attempts by CNN to visit the internment camps have been repeatedly blocked by local authorities.

Beijing: No Muslim country criticizes China's position on Xinjiang - CGTN

China said all the countries criticizing its position on issues related to its northwest Xinjiang Uygur Autonomous Region are developed countries in the West, whereas no Muslim country or developing country has criticized its position.

In response to a question on the Xinjiang issue at a regular press briefing on Monday, Chinese Foreign Ministry spokeswoman Hua Chunying said the issue is about fighting terrorism and extremism, not about religion and human rights.

How Xinjiang's economy and society developed in the last 70 years - CGTN

The State Council Information Office (SCIO) released a report named "Build a beautiful Xinjiang, realize the Chinese dream" on Tuesday, introduced the economic and social development over the past 70 years in northwest China's Xinjiang Uygur Autonomous Region.

国务院新闻办公室新闻发布会_新华网

official transcript

Turkey to send observation team to China's Xinjiang for Uighur Turks - Reuters

Turkey will send an observation team to China’s Xinjiang region, the Turkish foreign minister said on Tuesday after discussing the situation of Uighur Turks with his Chinese counterpart.

China Feasts on Record Saudi Crude Imports as Sanctions Hit Iran - Bloomberg

Asia’s biggest buyer shipped 7.72 million metric tons of crude, or 1.89 million barrels a day, from Saudi Arabia last month, according to data from China’s General Administration of Customs. Shipments from the OPEC producer made up almost a fifth of its total oil purchases in June and was 64% higher than the previous month

Senior Xinjiang official under investigation for alleged corruption in China | South China Morning Post

Enwaer Tursun, an ethnic Uygur, worked his way up in local political circles, rising to become deputy secretary general of the region’s legislature, or people’s congress, in 2017.

7. AI for social governance

AI for Stability in the New Era | China Media Project

A shortened version of the phrase “intelligent governance,” or zhineng guanzhi (智能管治), the buzzword is zhizhi (智治), which we might call in English simply “AI governance” – and it encompasses many of the new approaches we have seen in China to social and political control using surveillance technology and big data. The innovator and originator of this neologism is none other than Chen Yixin (陈一新), director of the Central Political and Legal Affairs Commission of the Chinese Communist Party, which oversees law enforcement authorities nationwide.

At a recent training session for local-level politics and law officials, Chen Yixin said:

We must place the process of AI governance development in an even more important position, elevating it as an important means of control – [we must] promote “AI governance” in city-level social control systems, operational mechanisms, and in the restructuring of intelligent work processes, accelerating the modernization of social governance [control] at the city level.

陈一新：推进市域社会治理现代化要发挥政治、法治、德治、自治、智治“五治”作用

8. PRC students interfering with overseas protests

Chinese Nationalists Bring Threat of Violence to Australia Universities - The New York Times

The Chinese nationalists disrupting pro-Hong Kong democracy rallies at the University of Queensland arrived 300 strong, with a speaker to blast China’s national anthem. They deferred to a leader in a pink shirt. And their tactics included violence.

One video from the scene shows a student from Hong Kong being grabbed by the throat. Another shows a philosophy student, Drew Pavlou, 20, shouting, “Hey hey, ho ho, Xi Jinping has got to go,” until a counterprotester throws his megaphone aside...

Mr. Pavlou posted a notice of the event on Facebook. That’s when the trouble started...

“Cancel the event,” the message continued. “If u keep doing this, uv gonna face millions of people on your opposite side.”

Other messages were more aggressive. Mixing Chinese and English, some people called Mr. Pavlou a white pig, using a pig emoji. One comment in Chinese said: “When will you die.”

Hong Kong dispute over China's extradition bill gets physical on University of Auckland campus - NZ Herald

The University of Auckland is launching a formal investigation after three Chinese men were filmed clashing with protesters on campus who were against a controversial proposed extradition bill in Hong Kong.

University student Serena Lee, 27 said she was left "shocked and shaken" after the men pushed her to the ground in front of a Lennon Wall at the city campus in Auckland on Monday evening.

From William Yang, east Asia correspondent for DW News:

William Yang @WilliamYang120

Latest for @dw_chinese - I was able to get in touch with Serena, the female student at @AucklandUni who was surrounded by three male students from #China and later assaulted by one of them when she tried to stop situation from escalating.

William Yang @WilliamYang120

And hours after #HK students at University of New South Wales rebuilt the Lennon Wall that was destroyed, it was completely taken down again. The #antiELAB battle has really become global, and college campuses in Australia and NZ are the frontline battlegrounds.

巴丢草 Badiucao @badiucao

the battle is continuing it was destroyed again according to the left mess，not like HK students took it down themselves. this is a disgrace for whoever did it！ but we will keep fighting！ same day night VS day https://t.co/uJ7tUBpqdh

Comment: Universities need to have a zero tolerance policy towards students assaulting others on campus who are exercising their rights to peaceful free speech. Anyone who violates that policy should be expelled, and if the expellee is a foreign student they will lose their visa and have to go home.

In the case of PRC students such a policy could be quite beneficial, as there are pressures from within the PRC student community, and its CCP minders, to be aggressive in the face of any perceived slights, and if you are not then you run the risk of being seen as insufficiently loyal and patriotic. Not every overseas PRC student is a jingoist crusader, in fact I think most are not, and so raising the costs for these political performances to possible expulsion and deportation would help those in the PRC student community who also find these outbursts distasteful and counterproductive. It would in effect give them cover to resist the pressures to make these extreme performances. And for those who are the true believers who have no respect for the laws and rules of the countries in which they are visitors, good riddance.

If countries and institutions that value free speech and the right to peaceful protest do not quickly take very clear and resolute measures to fight this growing malignancy it may metastasize out of control rapidly.

Business, Economy and Trade

China's central bank branches tell lenders to increase loans appropriately: sources - Reuters “It’s a temporary notice given at the month-end to grant us more lending quotas,” one of the sources said. “Small banks like us can grant a quota of several hundred million yuan, with an aim to moderately extend loans to the real economy.”

UBS Analyst Jason Bedford Who Predicted China Bank Woes Sees $349 Billion Hole - Bloomberg The low point for the system was probably 2016. Back then I actually thought the system could implode. Everything was at its greatest excess -- shadow loans, aggressive accounting treatments. Trust beneficiary rights peaked in both relative and absolute terms. They’ve declined since then. Now we are cleaning up the bad debt, although we may need more asset management companies, and we’ve changed bad-loan recognition rules.

Smaller Producers Put China Steel-Reduction Campaign at Risk: Industry Group - Caixin “Now more places have removed capacity, but the amount of actual output is rising sharply,” said Wang Wei, an official in the materials division of the Ministry of Industry and Information Technology (MIIT), at a meeting of the China Iron and Steel Association on Monday. Wang added that companies are illegally adding capacity and boosting output, creating a sudden problem for the industry.

Huawei warns on U.S. ban after China smartphone sales drive first-half revenue - Reuters “Revenue grew fast up through May,” Huawei Chairman Liang Hua told reporters at an earnings briefing. “Given the foundation we laid in the first half of the year, we continue to see growth even after we were added to the entity list. That’s not to say we don’t have difficulties ahead. We do, and they may affect the pace of our growth in the short term,” he said.

What Huawei didn’t say in its ‘robust’ half-year results | TechCrunch What about quarterly growth? Huawei didn’t say but some quick math can uncover what it’s hiding. The company clocked a strong 39% in revenue growth in the first quarter, implying that its overall H1 momentum was dragged down by Q2 performance...The firm shipped 59 million smartphones in the first quarter, which means the figure was also 59 million units in the second quarter. As tech journalist Alex Barredo pointed out in a tweet, Huawei’s Q2 smartphone shipments were historically stronger than Q1.

Huawei's China smartphone shipments surge 31% in Q2: Canalys - CNBC Huawei’s smartphone shipments in China surged in the second quarter as the Chinese tech giant captured the highest market share of any vendor in the country in eight years, according to new data from research firm Canalys. Canalys said Huawei’s smartphone shipments in China soared 31% year-on-year, even as the overall market slowed. Apple’s shipments declined 14% in the second quarter, while shipments from Chinese competitors Oppo, Vivo and Xiaomi also tumbled.

Clouds over big Chinese auditor derail IPO, fundraising plans of others - Reuters The firm is Ruihua Certified Public Accounts, which the Chinese Institute of Certified Public Accounts said was the second largest domestic auditor by revenue in 2018. Regulators have suspended the approvals for initial public offerings (IPOs) by 28 companies that have Ruihua as their accountant.

China's Star Market Lifts Chinese Banks’ League Table Ranking - Bloomberg China’s new Star Market may be coming down from its feverish first day surge, but Chinese banks that worked on the deals are still enjoying the high. Chinese investment banks account for seven of the top 10 banks in Asia for initial public offerings this year, the best showing since Bloomberg started compiling data in 1999.

Singapore Gives Fresh Push to China’s Belt and Road Vision - Bloomberg Singapore is ramping up its efforts to be a broker for infrastructure projects in the region, plugging China’s Belt and Road Initiative while pushing for a more “inclusive” approach in Southeast Asia.

China's European outreach hits a wall in Germany - Nikkei Asian Review Research by Baker McKenzie and Rhodium Group shows China invested $380 million in Germany in the first half of 2019, down 75% from $1.51 billion a year earlier, as the U.S. warned allies to keep cutting-edge technology out of Chinese hands. Europe as a whole saw a 26% decline, to $9 billion -- the lowest first-half total since 2015 and 83% below the peak of $53.9 billion in 2017. Baker McKenzie said the deal pipeline offers few reasons for optimism about the second half

Top Indian official to miss talks in China on sweeping Asian free trade deal | South China Morning Post Because of an extension to the Indian parliamentary session, Piyush Goyal will not be among the ministers meeting in the Chinese capital on Friday and Saturday to discuss the Regional Comprehensive Economic Partnership (RCEP). Instead, India will be represented by Commerce Secretary Anup Wadhawan.

Chinese Central Bank Issues Directive for Reduction of Enterprise Leverage Ratios - China Banking News On 29 July PBOC, the National Development and Reform Commission (NDRC), the Ministry of Finance and the China Banking and Insurance Regulatory Commission (CBIRC) jointly issued the “2019 Key Points for Work on Reducing Enterprise Leverage Ratios” (2019年降低企业杠杆率工作要点). The directive emphasises the increased use of market-based debt-equity swaps by financial asset investment companies, as well as the increased participation of private capital in market-based debt-equity swaps.

Housing prices in major cities stop rising in June - ECNS The 24 cities with no increase in home prices for the month include the four first-tier mega cities of Shanghai, Beijing, Shenzhen and Guangzhou; four that closely follow in development – Tianjin, Chongqing, Suzhou and Hangzhou; and 16 others that are economically competitive across the country including Wuhan, Chengdu and Zhengzhou.

Your Next iPhone Might Be Made in Vietnam. Thank the Trade War. - The New York Times Apple has homed in on Vietnam and India as it intensifies its search for ways to diversify its supply chain. Nintendo has accelerated a shift in the production of its Switch console to Vietnam from China, according to Panjiva, a supply chain research firm. The Taiwanese electronics behemoth Foxconn, a major assembler of iPhones, said in January that it had acquired land-use rights in Vietnam and had pumped $200 million into an Indian subsidiary. Other Taiwanese and Chinese partners to Apple have indicated that they are considering ramping up operations in Vietnam as well. Even so, this nation of nearly 100 million people is not about to replace China as a manufacturing hub overnight.

Chinese E-Cig Startups Activate Survival Mode As Industry Bids Farewell to Its Golden Age- PingWest However, the golden age of Chinese e-cig startups may soon be coming to an end. Just like many heavily-funded tech trends before it, including group buying, rideshare and bike sharing, enormous amount of money has been poured into China’s e-cigs scene.

Baofeng Group Founder Detained for ‘Suspected Crimes’ - Caixin The investigation may be related to an ill-fated overseas acquisition [of British sports media company MP & Silva Holding SA] in 2016, several market sources told Caixin. The 5.2 billion yuan ($750 million) deal led to a series of lawsuits involving Everbright Securities Co. Ltd. and China Merchants Bank Co.

Politics and Law

CPC meeting analyzes economic situation, reviews accountability regulation, inspection report - Xinhua The statement also noted a revision by the CPC Central Committee to the Party accountability regulation pursuant to the spirit of the 19th CPC National Congress. It stressed the need to uphold Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and to safeguard Xi's status as the core of the CPC Central Committee and the whole Party, as well as the authority and centralized, unified leadership of the CPC Central Committee. Party organizations at all levels and Party officials should keep the CPC's original aspiration and mission firmly in mind, closely align themselves with the CPC Central Committee, and ensure that the Party's line, principles, policies and the CPC Central Committee's major decisions and plans are implemented, according to the statement...The statement noted that the central leading group on disciplinary inspection has carried out three rounds of discipline inspections, covering all centrally administered state-owned enterprises (SOEs) and making notable progress.

Chinese President’s Cousin Draws Scrutiny of Australian Authorities - WSJ $$ Among other things, police are looking into the alleged 2017 use by the cousin, Ming Chai, now a 61-year-old Australian citizen, of what they describe as a money-laundering front company that has helped gamblers and suspected mobsters move funds in and out of Australia, some of the officials said. ..Over 18 months in 2012 and 2013, Mr. Chai bet about $39 million at the casino, according to Crown documents reviewed by The Wall Street Journal...As a young man, Mr. Chai—whose father is the younger brother of Mr. Xi’s mother—served in the Chinese People’s Armed Police and was a Communist Party member, according to an authorized biography of his father, Qi Ruixin, by a Chinese military historian.

Television Chief is Second Charged Over Savage Gang Attack on Employee - Caixin The charges were levied against Zhao Chuntao, the former head of Nei Mongol Television, by a court in the prefecture-level city of Bayannur over the past two weeks, Caixin has learned. Zhao was also accused of workplace bribery, a crime separate from common bribery, holding “vast assets” of unclear origin, and intentional assault. The news of Zhao’s trial comes just weeks after Miao Yingchun, another broadcast journalist from Nei Mongol Television, was sentenced to life imprisonment on July 12 for organizing, leading and participating in organized crime, falsely accusing or framing others of crimes, and eight counts of intentional assault among other crimes.

党员干部参与民间借贷获利，到底行不行？-新华网 CCP’s anti-corruption watchdog CCDI now said specifically that the cadres are not allowed to do loan sharking. It said many corrupt officials were involved in loan sharking and it is a form of corruption.

以党内法规建设新成效推动宣传思想工作开创新局面--时政--人民网 CCP’s propaganda chief Huang Kunming held a television meeting with central and provincial officials and urged them to properly implement a new rule on propaganda works that was adopted in April. The new rule highlights the need to do better propaganda in promoting the Xi thoughts, and the need to maintain the party’s leadership over propaganda works.

How the West Got China's Social Credit System Wrong | WIRED With just over a year to go until the government’s self-imposed deadline for establishing social credit, Chinese legal researchers say the system is far from the cutting-edge, Big Brother apparatus portrayed in the West’s popular imagination.

Signals from the Supreme People’s Court’s national civil/commercial trial work conference | Supreme People's Court Monitor The first part of his speech addressed political issues, but that part also includes some highlighting of critical legal issues. He states that politics is the most important. Justice Liu repeats some of the “innovative” language from January’s Political-Legal Work Conference that I mentioned in a blogpost earlier this year (with which his speech is harmonized). “As a political and legal organ, the people’s court is first and foremost a political organ. It must put political construction in the first place and clearly talk politics” )人民法院作为政法机关，首先是政治机关，必须把政治建设摆在首位，旗帜鲜明讲政治 )(I was tested on the phrase “talk politics/讲政治“ recently by some persons in the system with a sense of humor).

Cyberspace watchdog closes 3,000 websites over illegal services - Global Times The Cyberspace Administration of China (CAC) published a work report on its website on Monday, saying 2,899 unlawful websites were closed in the second quarter. For example, some websites were closed for publishing news without approval, counterfeiting and internet fraud. Others were closed for spreading pornographic and gambling content.

Foreign and Defense Affairs

No one is in position to dictate to Chinese people - People's Daily Zhong Sheng There are always some arrogant and conceited people in the world who have little self-knowledge but enjoy pointing fingers at others. Recently, some so-called “China Hawks” in the U.S. sent an open letter to the White House, slandering and defaming China’s internal and foreign policies while brazenly marketing the argument that China is “reprehensible”. What they did was absurd and revealed their evil intention.

Chinese Foreign Minister Wang Yi says US pressure on China ‘is untenable’ | South China Morning Post “[Washington’s] no-holds-barred use of pressure on China is untenable,” said Wang, adding that while Beijing was sincere about continuing the trade talks, discussions between the two countries must be “fair and equal”. He also warned that “China must safeguard its own core interests on issues of China’s sovereignty and dignity”. Wang praised Chile’s openness to China’s 5G technology – a globally sensitive issue that is also at the heart of the trade war with America.

Vietnamese fishermen call for action against China - Reuters The Vietnam Fisheries Society said it requested “the authorities of Vietnam to protest more strongly against China’s activities...and demand that China immediately withdraw the Haiyang Dizhi 8 from Vietnamese waters.”

2,000 Chinese-made surveillance cameras across US government | Financial Times $$ More than 2,000 Chinese-made cameras deemed a threat to national security remain in place in US government buildings, amid eleventh-hour confusion about a looming ban on the devices.

Australia declares China's plan for Antarctic conduct has 'no formal standing' - P Australian Broadcasting Corporation Countries involved in Antarctic affairs met in the Czech Republic this month for their annual diplomatic get-together, and China's proposal was the subject of discussions. The bid from China to implement a code of conduct at "Dome A" — some 4,000 metres above sea level — was not supported by Australia. Dome A has been recognised as perhaps the best location for space observation on Earth due to its high elevation and outstanding visibility.

Australia says U.S. plans to build military infrastructure - Reuters Payne did not say what military infrastructure the United States aimed to build, but Australian media reported earlier this month that Washington had plans for a new port facility near Darwin, the capital of Australia’s Northern Territory.

Crown: Morrison government orders investigation into casino accusations - Sydney Morning Herald The Morrison government has ordered a national integrity watchdog to examine a string of allegations about the conduct of Commonwealth officials linked to Crown's casino operations. Attorney-General Christian Porter told federal Parliament on Tuesday afternoon the allegations of the apparent cosy relationship between Crown and government agencies, including favourable visa processing in China, would be probed by the Australian Commission for Law Enforcement Integrity.

China’s Defense White Paper Means Only One Thing: Trouble Ahead | Andrew S. Erickson In key areas of its latest Defense White Paper, as well as in key domains, we are witnessing an increasingly assertive China increasingly determined to forcefully pursue its own interests on its own terms. Observers should look elsewhere for the latest insights on the specifics of PLA development, but no one should miss the ambition, assertiveness, and resolve permeating this official policy document. Real and consequential actions will follow from these sometimes vague but often forceful statements. Prepare for trouble ahead: we have been warned.

Senior Chinese, Pakistani military officials meet - Ministry of National Defense Gen. Zhang Youxia, vice chairman of the Central Military Commission (CMC) of the People's Republic of China (PRC), met with Gen. Zubair Mahmood Hayat, Pakistan's Chairman of the Joint Chiefs of Staff Committee(CJCSC), in Beijing on Sunday afternoon.

中国进一步建设性介入，为阿富汗和平进程注入正能量 Lin Yiming, also a fellow with CICIR, wrote about China playing a bigger role in the Afghan peace process. It said China does not have special interests in Afghanistan as other traditional major powers, but the country is important for China to keep Xinjiang stable. The article also said United States still needs to help the region either in development or political settlement, and it must not leave Afghanistan in an irresponsible manner.

Texas Man Convicted of Conspiracy to Commit Theft of Trade Secrets | OPA | Department of Justice “Shan Shi and his coconspirators went to great lengths to cash in on the Chinese government’s desire to obtain syntactic foam technology,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.

Deciphering China’s Intentions: What Can Open Sources Tell Us? | The Asan Forum - Joel Wuthnow

Tech and Media

Tighter rules for online celebrities: observers - Global Times A shocking twist of the "cute goddess" online celebrity turning out to be a 58-year-old woman mirrors China's chaotic online celebrity industry, where no one knows what's really behind the screen, and anything - including illegal information - can be transmitted through the internet.

Yicai Global - Alibaba-Backed Online Retailer Disappears From Android App Stores After Breaching Data Privacy Xiaohongshu has suddenly vanished from Chinese Android application stores, less than a month after a ministry added the owner of the Alibaba-backed lifestyle platform onto a list of companies that collect too much personal data.

Chinese tech titan Richard Liu sues blogger for defamation | South China Morning Post Liu, who was accused of – but not charged with – rape in the United States, is suing the unnamed woman for 3 million yuan (US$436,000) through the Beijing Internet Court. On Friday, the blogger – responsible for the popular “MaKuSiShuo” account on China’s microblogging platform Weibo – shared details and screenshots of the defamation lawsuit filed on July 2 by Liu, the founder of e-commerce site JD.com, to her 150,000 followers in a widely circulated post.

Life Sucks in China's Silicon Valley - ChinaEconTalk Hong Yulin, writing at GQ Reports, presents a particularly negative take on the “996” Chinese internet company lifestyle exemplified by firms in Houchangcun. This piece, based on extensive interviews with anonymized employees, went viral, racking up at least 100k views. The most liked comment under the article said: “The work and lifestyle described in this article makes me think of Marx in ‘Das Kapital’ writing about Britain’s Industrial Revolution.”

Popular financial services apps accused of overcollecting user data · TechNode Around 40 apps have been ordered to fix the issues within 30 days. The investigative team, dubbed the Personal Information Protection Task Force on Apps, was set up by the Ministry of Public Security, the General Administration of Market Supervision, and the Ministry of Industry and Information Technology, among others

Huawei and Google Were Working On New Smart Speaker Before Trump’s Ban — The Information $$ Before the U.S. president’s action, which was in response to national security concerns, Huawei’s plan was to unveil the new speaker at the IFA tech trade show in Berlin this September, the people said. The speaker, powered by Google Assistant, was aimed at markets outside China, and Huawei was hoping to sell it online in the U.S.

Society, Arts, Sports, Culture and History

The foreign footballers giving up their passports to become Chinese - CNN Players who are not ethnically Chinese can play for the Chinese side under FIFA eligibility rules after five years of residency in that country.

Energy, Environment, Science and Health

Congress seeks briefing on potential threat to U.S. heparin supply - Reuters Leaders of the U.S. House Energy and Commerce Committee on Tuesday asked the Food and Drug Administration about the potential threat to the U.S. heparin supply due to the outbreak of African swine fever in China. Heparin is currently on the FDA’s drug shortage list.

China’s emissions ‘could peak 10 years earlier than Paris climate pledge’ - Carbon Brief in new analysis published in Nature Sustainability, a team of researchers has shown that as China’s burgeoning cities become wealthier, their per capita emissions begin to drop. According to their analysis, this trend could in turn trigger an overall dip in CO2 levels across the nation, and mean that despite the current target for emissions peaking by 2030, they may in fact level out at some point between 2021 and 2025.

Rural and Agricultural Issues

Pig Stocks Are Dwindling, Pork Prices Are Rising as China Battles Swine Fever - Caixin Li Shuilong, the president of the China Meat Association, estimates from public data that total pork production in China may decline by 15% to 20% in 2019 — a drop of 8 million to 10 million tons. Meanwhile, domestic pig prices continue to soar.

Dim Sums: Rural China Economics and Policy: Guangdong Province Issues Pork Production Recovery Directives The targets seem unrealistic in view of the decimation of the province's production capacity this year. According to another market analysis published last week the spread of the African swine fever virus has stabilized in Guangdong, but the disease is estimated to have wiped out 70 percent of the province's swine production capacity.

China's Shandong province says fall armyworm a 'major threat' to autumn crop output - Reuters

Politburo meeting; US-China trade talks; "Be…

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