Q2 economic data; China-EU Summit; Beidaihe rumor season starting; Overseas security agency coming?: The "Jinjiang experience" and the 40th anniversary of Reform & Opening; Rural E-commerce
Happy Monday, here are some of the top things I am watching about China today:
China's Q2 GDP met expectations, unsurprisingly. The debate, leaving out those who think the data are all fake and the economy is on the verge of collapse, now seems to be around the health of those numbers and what policy response may be expected. It sounds like more reserve ratio cuts and increasing fiscal stimulus are likely but I still think it is mistaken to assume the "tough battle" against debt and financial risks will be materially throttled back;
China filed an additional complaint to the WTO against the threatened tariffs on an additional $200B of PRC goods. Will President Trump find this "insulting" and raise the ante again?;
There are still no public indications of any renewed, serious discussions between the US and China about resolving the trade differences.
We are less than a month away from the expected Beidaihe meetings and as always in advance of that mysterious conclave the rumors begin to fly in July. There are lots starting up around challenges to Xi, so far I have neither seen nor heard anything convincing but given that PRC elite politics are more opaque than they have been in years it is always possible something strange is going on. I will do my best to filter through what it out there and let you know what if any of them seem credible.
Housekeeping note: I am driving up to Maine Thursday to pick up our kids from camp and so there will be no Sinocism newsletter Thursday or Axios China Weekly on Friday. Normal publishing will resume Monday. I am always happy to get tips, either over email or Signal +13012460858.
Thanks for reading.
The Essential Eight
1. Q2 economic data
Economic Growth Slows to 6.7% in Second Quarter - Caixin Global:
China’s economic growth decelerated to 6.7% year-on-year in the second quarter as government-led infrastructure spending slowed sharply, official data showed on Monday. The reading has not been this low since the third quarter of 2017...
Fixed-asset investment excluding rural households, a key driver of domestic demand, rose 6% year-on-year in the first half, slowing further from 6.1% in the January-May period, NBS data showed. The reading marked the weakest growth since the data series was first released in February 1998.
Year-on-year growth of government-driven infrastructure investment, which consists of spending on the construction of roads, railways and other public facilities other than electricity and utilities, slowed to 7.3% in the first six months from 9.4% in the first five months, marking the sixth straight monthly slowdown...
Retail sales, which include spending by households, government departments and businesses, rose 9% year-on-year last month, picking up from 8.5% in May that marked the weakest increase since June 2003
统计局：上半年GDP同比增长6.8% 国民经济总体平稳、稳中向好-新闻-上海证券报·中国证券网
China fiscal policy has 'ample room' to support economy: central bank research head | Reuters:
China’s budget deficit goal this year of 2.6 percent indicates a contractionary fiscal policy and this year’s actual deficit ratio should be higher than last year’s 3 percent, Xu Zhong, the research head at the People’s Bank of China (PBOC), wrote for the financial media website Wallstreetcn.com.
China's Fiscal Policy Set to Become More Active in Second Half - China Banking News:
China’s state-media says that fiscal policy will become more active in the second half of 2018 as part of efforts to maintain the country’s economic growth momentum.
According to the state-owned China Economic Net the second half of 2018 will see “more active fiscal policy, with room for increased fiscal expenditures,” while “tax and fee reduction policies will continue to be unveiled.”
The latest data from the Ministry of Finance indicates that in the first half of 2018 China’s standard public budgetary expenditures saw accelerated year-on-year growth of 7.84% to hit 11.1592 trillion yuan in total.
China’s Broad Credit Grows by $176.4 Billion in June - Caixin Global:
China’s total social financing, a broad measure of credit in the economy, rose by 1.18 trillion yuan ($176.4 billion) in June, a significant increase on May’s 760.8 billion yuan but still below analyst expectations, data from the central bank showed on Friday...
Banks extended 1.84 trillion yuan in net new yuan loans in June, 690 billion yuan more than May’s level of 1.15 trillion yuan and 305 billion more than a year ago, the People’s Bank of China (PBOC) said...
China’s M2, the broad measure of money in circulation, grew 8% from the end of June 2017 to the end of June 2018, according to data released by the central bank, down from May’s 8.3% and the slowest growth since the official data sequence began in December 1999.
The state-owned Economic Information Daily cites analysts as saying that while June lending was in line with expectations, total social financing and M2 growth fell short of forecasts.
“The situation of on-balance sheet lending finding it difficult to continue off-balance sheet financing still continues, and there is further room for monetary loosening,” said the report.
“Over the next two months there is a significant possibility that the central bank will further reduce the reserve ratio.’
Central bank media spokeswoman Ruan Jianhong (阮健弘) said that the main reason for the decline in total social financing was heightened regulation and the ongoing impacts of China’s deleveraging campaign, which have been particularly pronounced for entrusted lending and trust loans.
China sets record daily steel output for third month in a row | Reuters:
China, which accounts for half the world’s capacity, produced 80.2 million tonnes of crude steel last month, National Bureau of Statistics data showed on Friday. That’s just shy of the 81.6 million tonnes the United States produced in the whole of 2017, according to World Steel Association data.
June output was below May’s record 81.13 million tonnes, but June has one less day, setting a new daily average production record for a third month in a row at 2.67 million tonnes, according to Reuters’ calculations.
2. China-EU Summit
EU pushes China on trade, saying it could open up if it wanted | Reuters:
Playing host to Juncker and European Council President Donald Tusk, Chinese Premier Li Keqiang stressed the need to uphold free trade and multilateralism as the United States and China become increasingly mired in a trade dispute, with no sign of negotiations on the horizon...
At a joint news briefing with Li and Tusk in Beijing’s Great Hall of the People, Juncker said that move showed “if China wishes to open up it can do so. It knows how to open up”.
Later, at a business forum, he said, “We need just and fair multilateral rules. The EU is open but it is not naive.”
China Cozies Up to EU as Trade Spat With U.S. Escalates - WSJ $$:
China has been actively trying to woo the EU as trade tensions between Beijing and Washington have escalated. With tariffs from the U.S. looming last month, Chinese President Xi Jinping suggested to a group of mostly European business executives that better treatment awaits companies whose countries aren’t caught in a trade fight.
In a sign of Beijing’s willingness to satisfy European priorities, China and the EU also issued a joint statement in support of the Paris climate-change accord. The two had agreed on the declaration ahead of a summit in Brussels last year following Mr. Trump’s withdrawal of the U.S. from the global agreement. But China pulled the plug on the announcement after EU officials refused Chinese entreaties on trade, particularly regarding Beijing’s bid to be recognized by Europe as a market economy.
Remarks by President Donald Tusk after the EU-China summit:
Now, let me repeat what I told Premier Li at our meeting a bit earlier. Today, on the same day as Europe meets China in Beijing, American President Trump and Russian President Putin will talk in Helsinki. We are all aware of the fact that the architecture of the world is changing before our very eyes. And it is our common responsibility to make it a change for the better. Let us remember, here in Beijing, and over there, in Helsinki, that the world we were building for decades, sometimes through disputes, has brought about peace for Europe, the development of China, and the end of the Cold War between the East and the West. It is a common duty of Europe and China, America and Russia, not to destroy this order, but to improve it. Not to start trade wars, which turned into hot conflicts so often in our history, but to bravely and responsibly reform the rules-based international order.
This is why I am calling on our Chinese hosts, but also on Presidents Trump and Putin to jointly start this process from a reform of the WTO. There is still time to prevent conflict and chaos. Today we are facing a dilemma: whether to play a tough game such as tariff wars and conflicts in places like Ukraine and Syria, or to look for common solutions based on fair rules. This is why responsibility, predictability, spirit of cooperation and respect for our common rules and commitments are so important these days.
Joint statement of the 20th EU-China Summit
China extends olive branch to US at summit with EU | Financial Times $$:
“Leaving behind any other county — let’s not even talk about leaving behind the US or a country located between Europe and China — is unfeasible. Because this is a multilateral trade agreement,” Mr Li said.
Mr Li added that China’s trade deficit with the US was a matter to be resolved bilaterally. “Even though we are the victims, we are willing for both to benefit, that means both sides. To resolve the US-China trade deficit requires both the US and China,” he said.
Comment: Li saying "Even though we are the victims" does not sound conciliatory to me…
3. US-China Trade War
China files additional complaint with WTO against U.S. planned tariffs - Xinhua:
China on Monday filed an additional complaint with the World Trade Organization against the U.S. plan to impose tariffs on 200 billion U.S. dollars worth of Chinese goods under the Section 301 investigation, according to the Ministry of Commerce website.
China’s advantages in a protracted trade war - People's Daily Online:
How to fight the trade war with the US has been a realistic subject for China. We hold that China should conduct more social mobilization to better inform the public of the trade war and obtain their support so that we can stay strong in action and mentality throughout the trade war.
Above all, we have to realize that the trade war is unavoidable and won't be ended in a brief period. Its pace may change, but the US won't alter its intention to contain China's rise in a short span of time or its urge to economically attack China. This cannot be resolved simply by China's efforts to keep a low profile and adjust its diplomatic and public opinion posturing.
Many Western and Chinese analysts have argued that China has fewer hands to fight the trade war at a time when the US economy is on an upwards trajectory and the Chinese economy is slowing down. A more pressing argument is that China will soon run out of imports from the US to tax given the massive disparity between each country’s exports – which may force China to resort to other extreme measures to counter-attack.
But analysts seem to have underestimated political will and significance the Chinese leaders have attached to the trade dispute.
Capitulating to Trump’s demands without a fight would have been a huge blow to Xi’s authority.
Moreover, in a dictatorship such as China’s, politics trumps commercial and business interests. Unlike Trump who has a hostile media, a divided Congress, and voters to answer for, Beijing has none of the constraints and can mobilise its massive political machine to mitigate and prepare for a protracted war.
Comment: I agree that China likely has more fortitude to withstand losses from the US-China trade war, but I do struggle with making sure that belief is not due primarily to a susceptibility to PRC propaganda, which is trying very hard to make the point that China can take anything the US throws at it in a protracted trade war. But people may be mistaken in thinking that the trade war will hurt Trump during the upcoming mid-terms. It appears he and least some his team believe it will actually help the GOP...
Freedom, equality, openness, and inclusiveness are the traditional concepts about modern market economy, and also significant guidelines of economic globalization. By trampling the core values of politics and economy, the Trump administration is giving a rise to unilateral trade protectionism, isolationism, and populism...
The US administration turns a blind eye to the huge profits their companies reaped in China, while worrying that its dominance in the technology sector may be threatened by a “forced technology transfer”, a groundless accusation the US imposes on China.
The Ministry of Commerce has launched a micro-site on the "China-US Trade Conflict" - China-U.S. Trade Conflict - Ministry of Commerce
4. ZTE is back
It does not look the US Congress has the fortitude to defy President Trump and legislate to reinstate the ban.
U.S. Lifts Ban on China's ZTE After $1.4 Billion Penalty - Bloomberg:
The ban was removed after ZTE paid the final tranche of a $1.4 billion penalty by placing $400 million in escrow at a U.S. bank, the department said in an emailed statement on Friday. That sum comes in addition to $892 million in penalties the telecommunications-equipment maker has paid to the U.S. government after pleading guilty to violating sanctions, it said.
ZTE Will Go All Out to Regain Lost Ground, Letter to Partners Pledges | Yicai Global:
ZTE has asked staff to work overtime weekends starting from July 14 -- when it resumed its operations -- to safeguard the interests of its suppliers and partners.
It will fully restart all activities it suspended or failed to carry out when the denial order was in effect, and will determine the priority of projects, develop and implement detailed plans, and concentrate all available supplies to complete cooperative activities delayed by the denial order.
ZTE will start over with full confidence on July 14, it said on its official microblog. A notice board in its Shenzhen, Guangdong province headquarters displayed the slogan: “Recall our painful experience and continue our journey.”
Axios China - ZTE is saved, but the lesson is not lost on Xi:
Xinhua reports he chaired another meeting Friday to discuss "improving innovation capabilities for key, core technologies":
Key and core technologies are crucial to a country and bear major significance for promoting China's high-quality economic development and maintaining national security, Xi, also head of the Central Committee for Financial and Economic Affairs, said at a meeting of the committee on Friday.
China must improve innovation capabilities for key and core technologies and keep a firm hold on the initiative in the development of science and technology to offer a strong technological guarantee for China's development, Xi pointed out.
The ZTE case may end up being a pyrrhic victory for the U.S
5. Tech firms that bailed on CDRs can't use the Hong Kong stock link to get mainland money
Why China’s plan to launch the highly touted CDR scheme is still on hold | South China Morning Post:
Sources at the securities regulator and tech firms involved in the negotiations said they were still working out issues related to the size and pricing of the Chinese depositary receipts (CDRs) – securities underlying the US-listed shares of Chinese companies. Other serious issues that remain to be sorted out include rules governing post-listing information disclosure, dividend payment, employee stock ownership plan and, most importantly, accounting standards.
“Initially it was agreed that they [the US-listed Chinese tech giants] would adjust their financial data from US GAAP to Chinese accounting standards for A-share disclosures,” said a senior official with the China Securities Regulatory Commission (CSRC), who did not want to be named as he was not authorised to reveal the details of the negotiations to the media. “But later there was an argument on how many items the readjustment should apply to, making it very hard to reach a consensus,” adding that there was “no longer a timetable” to kick off the scheme.
China Bars Foreign Companies, Other Securities From Stock Link - Bloomberg:
Chinese investors will be barred from trading in shares of dozens of foreign companies and those with weighted-voting rights such as Xiaomi Corp. as regulators seek to shield retail investors using the nation’s stock link with Hong Kong from less widely understood securities.
The Shanghai Stock Exchange’s exclusion also covers stapled securities -- when two or more securities are linked together, according to a July 14 statement. The decision creates an exception to current rules allowing all Hang Seng Composite Index’s mid- and large-cap shares to trade in in Hong Kong through the stock link. Hang Seng Indexes had planned to make the three asset classes available for inclusion in its indexes in the third quarter.
Comment: I wonder how much of this stock link ban is about capital outflow, how much about making sure the firms that bailed on CDR know there are costs for embarrassing the CSRC?
6. PRC planning security agency for overseas security?
The need to close that yawning gap in expertise is becoming ever-more urgent as Chinese companies fan out along revived trade routes as part of Beijing’s “Belt and Road Initiative”, a massive infrastructure-driven plan to link economies into a China-centred trading network.
So much so that Beijing is exploring the possibility of establishing a security agency to coordinate security for Chinese enterprises abroad.
According to several independent sources, if the plan goes ahead, the Ministry of State Security would be responsible for collecting intelligence and providing non-traditional security support to the new agency.
“[Officials from] the ministries of public security, state security, foreign affairs and commerce are working together to come up with details [on how to run the] new security agency, which will play a leading role in coordinating Chinese security firms’ operations in host countries,” one source said.
7. Politics and propaganda around 40th anniversary of Reform and Opening
The "Jinjiang experience" and Xi's involvement in it as Fujian Governor are getting more propaganda love in the latest issue of Qiushi.
The politics around the 40th anniversary celebration of Reform & Opening are obviously very interesting. Is the push about Jinjiang Experience part of a strategy to elevate Xi and his "bona fides" while if not erasing at least downplaying the role of Deng Xiaoping and others in Reform & Opening?
“晋江经验”的时代价值与实践意义 - 《求是》2018/14 作者： 福建省中国特色社会主义理论体系研究中心:
2002年，时任福建省省长的习近平同志深入晋江调研，从改革开放事业与我国经济融入全球格局的高度，系统完整总结并提出了“六个始终坚持”“处理好五大关系”的“晋江经验”。“晋江经验”不仅是晋江的经验，也是福建省、我国东南沿海乃至中国改革开放40周年的宝贵经验和成果，是中国民营经济、非公经济从孕育到成长、从发展到壮大的一个缩影，是中国特色社会主义道路的主动探索和积极实践。
China Focus: A small city's rise to prosperity - Xinhua:
Covering just one two-hundredth of Fujian's area, Jinjiang created over 6 percent of the province's GDP in 2017. It has 46 listed companies and 50,000 private enterprises...
The path of economic development, with a market-led and export-oriented economy and a booming private manufacturing sector, has been called the "Jinjiang Model."
When Xi Jinping worked in Fujian between 1985 and 2002, he inspected Jinjiang seven times. Summarizing Jinjiang's success story in 2002, he said the city's achievements were due to a localized market-oriented economy, hard-working locals, honest market players and effective local government...
"Xi's thoughts on Jinjiang's development are never outdated," said Gao Ming, a Fuzhou University professor. "The spirit of reform and opening-up within Jinjiang's development in the past four decades can also guide China's development in the new era."
8. Rural E-Commerce
How E-Commerce Is Transforming Rural China | The New Yorker - Jiayang Fan:
JD.com, or Jingdong, as the company is known in Chinese, is the third-largest tech company in the world in terms of revenue, behind only Amazon and Google’s parent company, Alphabet, Inc. In the Western press, JD is often referred to as the Chinese Amazon, but unlike Amazon, which has all but saturated the American e-commerce market and therefore has to expand by moving into new sectors, such as entertainment, JD still has ample room to extend its customer base—thanks to places like Cenmang and Xinhuang. Although China has the most Internet users of any country and the largest e-commerce market in the world—more than twice the size of America’s—there are still hundreds of millions of Chinese whose lives have yet to migrate online. Analysts predict that China’s online retail market will double in size in the next two years, and that the growth will come disproportionately from third- and fourth-tier cities and from the country’s vast rural hinterland. At a time when the Chinese government has instituted monumental infrastructure programs to develop these regions, companies like JD are providing a market-driven counterpart, which is likely to do for China what the Sears, Roebuck catalogue did for America in the early twentieth century...
I asked Xia if he earned most of his salary from the wallets of teen-agers. “They are the ones who teach their parents how everything works,” he said. “And the parents then teach the grandparents...
Over the years, Xia has found that baby goods—clothes, formula, diapers—make up a considerable proportion of his deliveries. “I ordered my son’s diapers on JD, too,” he told me. “Everyone wants the best for their kids. For a long time, there wasn’t any choice. Now there is.”
Business, Economy, Finance And Trade
China state firms draw up plans to deleverage, cut debt ratios: paper | Reuters Six of China’s biggest state-owned firms have drawn up plans to reduce debt and leverage in the coming two years, state media said on Friday, part of the country’s efforts to rejuvenate the debt-ridden sector. China began a new round of reforms in 2016 aimed at streamlining its lumbering state-owned enterprises (SOEs) by introducing private capital, curbing overcapacity, shutting down “zombie” subsidiaries and restructuring assets. It has already cut the total number of companies under central government control to 96, down from 117 in 2012.
Tencent and Alipay set to lose $1bn in revenue from payment rules | Financial Times $$ “Reserve funds are not the property of payment institutions — ownership belongs to the institutions’ users,” said Dong Ximiao, senior researcher at the Chongyang Institute for Financial Studies at Renmin University in Beijing, explaining the principle behind the new regulation. The reserve requirements are “an important measure to rectify some chaotic financial behaviour,” he said.
Mainland shares have best week in two years - Global Times Over the past week, the benchmark Shanghai Composite Index surged 3.06 percent, ending seven straight weeks of falls, while the smaller Shenzhen Component Index jumped 4.66 percent. Both indexes notched the biggest weekly gains since June 2016
China's central bank regulates forced cashless payment Some consumers have complained about being denied the ability to use cash in places like tourist areas, restaurants, and retail stores, which harms the legal status of the Chinese yuan as well as consumers' rights to choose means of payment, according to a statement released Friday by the People's Bank of China.
Chinese Appliance Brand’s World Cup Bet Pays Off - Sixth Tone On July 4, Vatti said that its strategy had “significantly boosted retail performance” and improved its brand image. The company raked in over 350 million yuan ($52 million) from online and offline sales during the marketing campaign, with the championship set accounting for less than 10 percent of total sales. On Monday, Vatti’s shares peaked at 16.07 yuan — a 9.86 percent increase from Friday, nearly the 10 percent maximum — on the Shenzhen Stock Exchange, where the company is listed, before closing at 15.18 yuan. The refund policy, which could have cost the company an estimated 79 million yuan, also came with a catch designed to minimize losses: Consumers who bought the goods online would get their money back only in the form of gift cards or vouchers
Online Stock-Trading Community Raises $120 Million from Ant Financial - Caixin Global The company, which operates a site similar to the U.S.-based Seeking Alpha, will use money from its D-round funding to upgrade its community platform and trading system, CEO Fang Sanwen said in a statement on the company’s account on the popular WeChat instant messaging service. “We will also use the funds to give our users cross-market, multiple types of stock fund trading services,” he said. // When Xueqiu first started I was an adviser, had to exercise my options several years ago when the company restructured away its foreign VIE structure to become a PRC firm, assume they would have been worth a lot more if I could have held them…Congrats to these guys, they have worked really hard for many years.
Investment Firm Boss Flees China After Allegedly Raising $5.7 Billion Illegally - Caixin Global A Shanghai-based investment company, whose actual controller has fled the country, illegally raised over 38 billion yuan ($5.7 billion) in public funds through peer-to-peer (P2P) lending platforms and other outlets, local police have said. The alleged misconduct of Zillion Holdings is one of the biggest scandals to hit China’s troubled internet finance industry. Zillion Holdings sold wealth management products without official approval in more than 10 provincial-level regions since December 2012 via subsidiaries that included P2P lender Tangxiaoseng, promising annualized returns of 5%-15%, police in Shanghai’s Pudong New Area announced on social media (link in Chinese). The rates are much higher than China’ benchmark one-year deposit rate, which has remained at 1.5% since October 2015.// The cover story od this week's Caixin is on the "tough battle" to clean up Internet finance 互联网金融整治攻坚
Beijing Cracks Down on Cities Abusing Slum Initiative - Caixin Global Cash reimbursements can drive more property purchases than giving out new homes because buyers can use the money for down payments on multiple homes. However, this option and the lax control over the use of the policy loans have allowed some local governments to fund ineligible projects under the guise of shantytown redevelopment to take advantage of the cheap funding, exacerbating their own debt problems.
National Audit Office to Set Up Specialist Finance Units - Caixin Global China’s National Audit Office (NAO) will set up three new units to strengthen its supervision of financial regulators and major state-owned financial institutions, Caixin has learned, in a move that follows the ongoing national anti-graft campaign’s foray into the financial sector. The three new units will report directly to the NAO, and they will look into the balance sheets of the central bank, the foreign exchange regulator, the banking and insurance regulator, the securities regulator, the three largest policy banks, the four biggest asset management companies and several state-owned financial holding companies, people familiar with the matter said.
Country Garden Stops Buying Land in China's 3rd, 4th-Tier Cities - Mingtiandi China’s largest property developer by sales is reportedly retreating from an expansion program that aimed to give it a presence across the nation’s third, fourth and fifth-tier cities in the face of tightening credit conditions and an ongoing government crackdown on real estate speculation.
China Stocks at Record Lows Make Case for $941 Billion Fund - Bloomberg China’s sovereign wealth fund has expressed a desire to invest in the domestic market as stock valuations have hit multiyear lows, underscoring how coming home may bring it new opportunities to boost returns.
Politics, Law And Ideology
Is China’s atheist Communist Party trying to eradicate Islam? | South China Morning Post In what locals said they fear is a deliberate move to eradicate Islam, the atheist ruling Communist Party has banned children under 16 from religious activity or study in Linxia, a deeply Islamic region in western China’s Gansu province that had offered a haven of comparative religious freedom for the ethnic Hui Muslims there. China governs Xinjiang, another majority Muslim region in its far west, with an iron fist to weed out what it calls “religious extremism” and “separatism” in the wake of deadly unrest, throwing ethnic Uygurs into shadowy re-education camps without due process for minor infractions such as owning a Koran or even growing a beard.
China’s ‘red education’ history tours and the rise of communist cosplay | South China Morning Post Most of the visitors to Jinggangshan now are civil servants, employees of state and private enterprises, and students. They are sent by their employers or schools as part of their work or study requirements. The number of people going to the city for study tours jumped by more than 50 per cent every year from 2015 to 2017, according to the Jinggangshan government. About 450,000 took the tours in the first 11 months last year, up 51.22 per cent from a year earlier. That number is almost three times the city’s population of 160,000.
新华网华国锋违纪搞个人崇拜文章被封 - RFA 中国官媒新华网本周三（7月11日）转载学习时报文章，指中共前领导人华国锋视察江苏，沿途戒严影响交通，引起群众不满，并指华国锋在中央党校作报告坐的椅子被送到博物馆，搞个人热崇拜。文章被大量转载并刷屏微信。不过，当晚中国网上所有相关报道皆被屏蔽。有分析认为，此文很明显是借古讽今，因此当局不能容忍。// An article about an investigation into Hua Guofeng for building a cut of personality that appeared briefly and then was censored is one of the feeders of some of the recent rumors
Experts justifies Mao mausoleum’s UN heritage application - Global Times "The Chairman Mao Memorial Hall is a historic cultural symbol," Su Wei, a professor at the Party School of the CPC Chongqing Municipal Committee, told the Global Times. Remembering Mao Zedong is of historical significance because he is a founding architect of the People's Republic of China and presented the Three Worlds Theory. Mao is widely respected on the international stage, Su noted. "Including the Chairman Mao Memorial Hall in the plan of Beijing Central Axis' UNESCO application is justified," he said.
Can’t Enter Uni Because of Daddy’s Bad Social Credit - The Blacklist Story That’s Got Weibo Talking | What's on Weibo The story of a Chinese student who got admitted to a renowned university and was then denied access because of his father’s bad social credit has got Chinese social media talking.
150项惩戒措施迫使280万“老赖”低头--法制网 7月10日，全国法院开展第十期“决胜执行难”全媒体直播。10小时不间断的直播“抓老赖”，吸引5000多万人次网友围观，获网友争相点赞，也成为一堂生动的社会诚信教育课。 今天，《法制日报》记者就法院破解执行难推动社会诚信建设采访了最高人民法院执行局局长孟祥。
Foreign and Military Affairs
China's major diplomatic move: Xi's visits to five Arab and African countries and attending BRICS summit - Global Times President Xi Jinping will pay state visits to the United Arab Emirates (UAE), Senegal, Rwanda and South Africa, respectively, from July 19 to 24, and attend the 10th BRICS summit from July 25 to 27 in Johannesburg and then visit Mauritius for a stopover. Vice Foreign Minister Kong Xuanyou on Friday said this is Xi's first time to visit foreign countries after his re-election as Chinese president in March and it is also China's major diplomatic move to target developing countries against the backdrop of profound changes in the context of international situation. Xi's visits will promote China-UAE bilateral ties, the Belt and Road construction in the Gulf region, peace and stability in the Middle East, and building a closer community of shared future for China and Africa, Kong said.
Two Years On, South China Sea Ruling Remains a Battleground for the Rules-Based Order | Chatham House - Bill Hayton On 12 July 2016, an independent arbitral tribunal established under the UN Convention on the Law of the Sea (UNCLOS) published a clear and binding ruling on China’s claims vis-à-vis the Philippines in the South China Sea. China’s response at the time was to dismiss the ruling as ‘nothing more than a piece of waste paper’. Interestingly, in the two years since then it has, in some small ways, complied with it. However, it is also clear that China’s behaviour in the South China Sea has not fundamentally changed. It is, in effect, using military force to try to extort concessions from its neighbours. That poses a threat to international peace and security.
Revisiting the South China Sea Tribunal Arbitration of 2016: International Law Being Eclipsed by Might? | cogitASIA CSIS Asia Policy Blog ...two years later the political landscape in the region has changed in an uber-realist way. China started to extend its power to assuage the impact of the tribunal award. The first target is the Philippines. Considered to be a big beneficiary of the arbitral award, the Philippines under the Duterte administration has ignored the legal leverage of the award brought by his predecessor Aquino in return for an investment surge and huge loans from China. It might take time to evaluate whether President Duterte’s tactic is wise or not in terms of economic benefits. One thing that is obvious is that a huge sum of current Chinese money goes to the mining industry and casinos, not investments necessarily benefiting the Philippines in the long-term.
China Sends Spy Ship to RIMPAC: Current Situation & Previous Examples | Andrew S. Erickson As the article below observes, this is not just a case of China’s navy taking a nice trip to Hawaii or crashing a party for (geo)political purposes, it’s a case of China’s navy enjoying an intelligence collection feast that is rarely equaled given the sheer scope and diversity of the foreign naval participants on the menu and all their electronic/electromagnetic emissions. To be sure, it is perfectly legal for China to send an AGI vessel to operate in international waters in this manner. In respecting the freedom that international law affords, the U.S. rightly tolerates this behavior from China and Russia, which both engage repeatedly in such activities. But here’s the bottom line: the U.S. shouldn’t let China have it both ways. No matter what Beijing says or does, U.S. forces must continue to operate wherever international law permits, including in, under, and over the South China Sea
Forum on world security overshadowed by concerns over US’ willful isolationism - Global Times The seventh World Peace Forum, themed "Constructing a Security Community: Equality, Equity and Justice" closed in Beijing on Sunday. It was organized by Tsinghua University in partnership with the Chinese People's Institute of Foreign Affairs and is a high-level non-governmental seminar focusing on international security topics, the Economic Daily reported on Sunday.
Former U.S. diplomat praises China's reform and opening-up achievements - Xinhua: Former U.S. Ambassador to China Stapleton Roy said Sunday he greatly admires China's accomplishments over the past 40 years of reform and opening-up. "I cannot exaggerate my admiration for what China has accomplished over the last 40 years, in terms of the speed of economic development and the degree to which the economic development has raised standard of living," Roy said at a press conference on the seventh World Peace Forum held in Beijing.... "The significant thing to me of the 40 years of reform and opening-up is that most of the development went into raising living standards and economic development," he said. "China never gave priority to developing military. The priority was in economy," he said.
In a remote corner of China, Beijing is trying to export its model by training foreign officials the Chinese way | South China Morning Post The new Baise Executive Leadership Academy – which looks like a five-star resort nestled in the green hills of the remote Guangxi region – may not be well-known abroad, but it aspires to be part of Beijing’s strategy of exporting its development model, in this case by training foreign government officials. Launched 18 months ago by the government of the southern region, the school has already trained 437 senior government delegates, most of them from neighbouring countries such as Vietnam, Laos and Myanmar – all funded by the Chinese side.
China seeks to fill void left by Western ‘neglect’ in Antigua and Barbuda in wake of Hurricane Irma | South China Morning Post he project has enabled hundreds of families to return home from sister island Antigua as Barbuda continues the daunting process of rebuilding the 160 sq km (62 sq mile) isle, where just five per cent of homes escaped damage. But it has also burnished the image of China at a time when some in the region, including the tiny archipelago’s prime minister, complain that US and European aid has fallen short.
China is building expensive roads in Uganda — Quartz The expensive road is just the icing on the cake for Chinese contractors in the country. Analyzing the data for 48 national road contracts issued in the past decade, Quartz found that 70% of the funding went to Chinese contractors and only 4% to locally incorporated firms.
China enhances influence on Pak’s communications security with new project - Times of India A China-built optic-fibre communications project was inaugurated in Islamabad by the country’s caretaker prime minister, Nasirul Mulk, on Friday. The $44 million project, meant to enhance Pakistan’s telecommunications quality, has been financed to the extent of 85% by China Exim Bank. It has been built by Chinese telecommunications giant Huawei. The 820-km-long optic-fibre cable will also enable China to closely monitor the day-to-day functioning of Pakistan’s security forces and even watch its dealings with the Taliban, informed sources said.
Pakistan’s ‘Muslim solidarity’ disappears on Uyghurs issue - Al Arabiya English OpEd And yet, there is something very peculiar about this friendship: the Chinese government is virulently anti-Muslim, at least as far as Islam within its borders is concerned. Here I speak of the familiar troubles of the Sunni Uyghur people in Xinjiang province. Even as we speak, the Chinese crackdown on Islam in the name of anti-separatism is seeing maybe as many as 1 million Muslims arbitrarily detained in “re-education camps” – out of 10-11 million Uyghurs in total in the province.//Interesting to see this OpEd, it is remarkable how little most of the Muslim world seems to care about what is going on in Xinjiang, and perhaps increasingly with the Hui as well
Chinese Billionaire Asks to Delay Prison Sentence Yet Again - The New York Times Mr. Ng was convicted in July 2017 of bribery, money laundering and other counts, for which he received the four-year sentence and was told to surrender on July 10. But last month, his lawyers asked for the delay until Sept. 10. They said Mr. Ng “helms a vast network of real estate businesses in China with many employees and a diverse portfolio of holdings worth billions of dollars.”
U.S. Calls Out China, Russia on North Korea Energy Caps, Urges U.N. Action - WSJ $$ While the U.S. effort may not suspend all petroleum imports into North Korea for the year, it still has potential practical and political effects that further U.S. interests. First, it highlights many shipping actors aiding North Korea, which complicates their continuing operations. It also notifies firms, banks and individuals who have been working with the tankers detailed in the briefing that they are on Washington’s sanctions radar. Although it ratchets up already-taut geopolitical tensions among three world powers, it also challenges China and Russia with evidence of activities that contradict their stated support for a denuclearized North Kor
China: Australia on front line of 'geopolitical contest,' says Steve Bannon - Sydney Morning Herald Australia, you didn't know it, but you've been at the very forefront of Donald Trump's project. "I think Australia is in a fight for the ages" that will decide whether the nations of the West can keep their sovereignty against Chinese intrusion, says Trump's former chief strategist, Steve Bannon, now a coach and adviser to populist movements worldwide. "Australia is at the forefront of the geopolitical contest of our time," he tells me in his first interview with an Australian media outlet. He goes so far as to say that "what's playing out in Australia is more important than what's happening in the US and other places".
Taiwan
Xi Jinping meets with Taiwan delegation led by Lien Chan - Xinhua Noting that the right path should be upheld, Xi urged people of the two sides to have stronger faith and show solidarity, particularly under the current situation. The 1992 Consensus should be upheld and "Taiwan independence" should be opposed, he said. "We will never allow any attempts of 'Taiwan independence' to succeed. Such attempts are doomed to fail," Xi said, urging people from the two sides to firmly oppose and deter activities of "Taiwan independence" with concrete action.
Xi's remarks chart course for cross-Strait relations: Taiwan affairs official - Xinhua The remarks made by Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, on Friday have charted the course for relations across the Taiwan Strait, Taiwan affairs official Liu Jieyi said Saturday. Xi revealed the main and general trend of development of cross-Strait relations, and made clear the direction, path, tasks, and goals for advancing the peaceful development of cross-Strait relations and the process toward the peaceful reunification of China, said Liu, head of the Taiwan Work Office of the CPC Central Committee.
台军政战宣传部门发文：要认清“共军”还是敌人_凤凰资讯 近日，有台湾深绿媒体报道，台“国防部政治作战局”本周撰写专文宣称“中共是敌人，国军要认清”，呼吁落实“保密防谍”工作。 报道称，该专文声称“中共在‘十九大’后，不断派军机、军舰远海长训，甚至还散布军机‘飞临鹅銮鼻’、‘瞭望玉山群峰’等浮夸不实的伪新闻、假讯息，意使我社会恐慌。”// Taiwan's Ministry of National Defense Political Warfare Bureau reminds people that "the CCP is the enemy, the national army needs to clearly understand that"...
Tech And Media
China warns actors to pay proper taxes - Global Times The State Administration of Taxation (SAT) issued a notice saying that film industry workers should faithfully report their earnings and pay the proper taxes, and that authorities should supervise these people's earnings and taxes. Those who cheat on taxes should be placed on a "blacklist," People's Daily reported on Friday.
Inside Meitu: The Chinese selfie app's chaotic global expansion - Business Insider Business Insider spoke to more than a dozen former employees, and from some heard allegations of sexism, wild stories of shamings and scathing criticisms in front of other employees, and tales of a brutal workplace culture. Meitu's struggles highlight the challenges in running a global company, and show there's far more to running a tech business than just having a successful app.
Tencent moves further to help teens develop healthy online habits - Xinhua The company unveiled the Digital Natives Action (DN.A) program Saturday, a joint initiative with government authorities, universities, industry experts, and third-party organizations to help teenagers better navigate digital platforms. The DN.A program starts with a wide range of network literacy courses and learning tools to teach teenagers how to manage their online time, find the right information, and avoid cyberspace risks.
‘The Rap of China’ Returns After Off-Beat Year - Sixth Tone Careful to avoid the now-sensitive word, the new Chinese name for the second season has changed from “China Has Hip-hop” to “China New Rap.” The show now promises a new look, more Chinese elements, a more diverse cast of contestants, and an emphasis on quality music over reality TV-style drama.
Epic Budget, Epic Fail: Chinese Blockbuster ‘Asura’ Tanks Six years in the making, the film was planned as the first of a trilogy based on ancient Tibetan mythology. The Alibaba Pictures production promised lush CGI from an award-winning, international team in its depiction of war between two heavenly realms. Marketing campaigns for the film emphasized its budget of $100 million...Following its weak opening, the film’s investors intervened. On Sunday, a statement posted to the movie’s social media pages announced without further explanation that investors had decided to pull the film out of cinemas nationwide.
Taobao leads the charge in a new ecommerce trend: livestreamed shopping - TechInAsia
Society, Art, Sports, Culture And History
Meteorite treasure hunting leaves local paddies unattended, sparking family disputes - Global Times Many meteorite hunters from out-of-town came to join the search, feeding the frenzy. Rumors spread about the high prices that could be fetched. Some villagers tried to sell the chunks of rock they found for 50,000 yuan ($7,800) per gram - dozens of times the normal price for meteorites, according to China National Radio. This price is "far beyond reasonable," meteorite experts said, expressing pessimism that the villagers could make a sale.
Years After Retiring, Li Na Wields Major Influence in Tennis - The New York Times Off-court, Li is still earning $15 million to $20 million annually through endorsement and licensing deals
Energy, Environment, Science And Health
银监局首度依据绿色信贷指引作出处罚，银行业应如何应对绿色信贷新要求？—from a tweet by Ma Jun:
China’s Banking Regulator has just imposed a fine on a bank that failed to conduct proper environmental due diligence on a loan. This is the start of regulators' initiative on lenders' environmental liability, a new aspect of a #greenfinance system. https://t.co/4TTMmXCgx2
July 14, 2018State-Owned Offshore Oil Firm Ready to Invest $3 Billion More in Nigeria - Caixin Global
Education
大学老教授们坚持12年手写录取通知书_高清图集_新浪网 Shaanxi Normal University retired professors hand write the university acceptance letters...slideshow
My thought on the reserve requirement for Tencent, etc., is that perhaps there are some significant headwinds expected, and China does not want to have to deal with damage to the reputation of some of their national champions. Even money market funds can fall below par (see 2008), so parking customer funds even in low-risk investments could lead to lock-ups, virtual bank runs, etc. So we have a potential drag on growth in exchange for stability, and wonder how many more of these types of decisions are being made...