I have some comments in the Essential Eight sections below, cat has my tongue for an into commentary today. That and everything just seems so grim, between the pandemic, Hong Kong and US-China relations.
Thanks for reading.
The Essential Eight
1. Reform guideline
China on Monday issued a guideline to accelerate the improvement of its socialist market economy in the new era to build a high-level socialist market economy that is more systematic, mature and well-shaped.
China will uphold and improve the basic socialist economic system of keeping public ownership as the mainstay and allowing multiple forms of ownership to develop together, the guideline said.
The guideline stressed minimizing the government's direct allocation of market resources and direct intervention in microeconomic activities...
China will further stimulate creativity and market vitality of society as a whole, with measures including deepening the reform of the household registration system and loosening restrictions on settling in cities except for certain megacities, it said....
In terms of opening-up, China will build a new pattern of opening-up, with the focus on the construction of the Belt and Road, and accelerate the development of pilot free trade zones and free trade ports, it said.
The guideline stressed expanding imports of goods and services on a large scale, reducing the overall tariff level and eliminating non-tariff trade barriers.
Restrictions on foreign investment outside the negative list will be lifted completely, it said...
The guideline stressed efforts to uphold and strengthen the Party's overall leadership to ensure the effective implementation of the reform measures
(4) Comprehensively improve the scientific and technological innovation system and organizational system. Strengthen the construction of the national innovation system, compile a new round of national mid- and long-term scientific and technological development plans, strengthen the national strategic scientific and technological strength, and build a new national system for key core technologies under the socialist market economy
Comment: This new reform guideline comes on the eve of the Two Sessions, and about a month after the issuance of a “guideline on improving the market-based allocation mechanism of production factors”. There is a lot in it, I pulled out this section on technology because of all that is going in around tech in the US-China relationship.
When the April document came out I wrote:
We are all so jaded with unfulfilled reform promises but perhaps we should take this seriously given the mounting economic pressures?
As nice as this may sound, how can they push reforms fast enough to bridge the yawning gap created by the pandemic, even if it turns out they now really mean it? The answer I think is they can not.
It has barely been three months since the outbreak started hitting China hard, and I think it is way too early to conclude that Xi and the Party have “won”. The stresses inside the system are immense, and the economic downturn that is in many ways now out of their control is likely to exacerbate those stresses considerably, with very unpredictable results.
Skepticism aside, we should not discount that the pressures inside the system may lead to more progress on some of the reforms than we have seen in recent years. However, whatever reforms may occur, remember that “The guideline stressed efforts to uphold and strengthen the Party's overall leadership to ensure the effective implementation of the reform measures”.
In the April 15 newsletter I included comments on that guideline from a very good China research firm, comments that should apply to this new document as well:
On 9 April Beijing released a comprehensive roadmap on how to make institutional changes on production factors including land, labor, capital, technology and data. It is by far the most important reform guideline unveiled by Xi Jinping’s administration following the “deepening reform initiative” released in November 2013 at the Third Plenum of the 18th Party Congress.
By releasing a reform guideline amidst the pandemic, the Chinese government is signaling that it is still dedicated to market reforms, and that it is hoping to drive growth with reform measures instead of relying solely on monetary and fiscal stimulus. It will be the centerpiece of this year’s “two sessions”—the annual meetings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), which will likely take place in May after postponement since March.
Never let a crisis go to waste?
2. The Two Sessions
This coming Friday, Premier Li Keqiang is expected to deliver a tone-setting government work report to the NPC for deliberation and approval which normally includes the country's economic targets for the year.
The wording of the targets, either numerically or descriptively, will be more closely watched than previous years as it will offer a glimpse into how the world's second-largest economy is handling the fallout of the dicey COVID-19 epidemic...
The government work report will normally set goals for key economic indicators, including jobs, inflation and fiscal deficit, and employment is expected to consistently top the agenda. Given the challenges ahead in 2020, a stable job market will be a linchpin of enhancing macro-control to keep sound economic fundamentals.
After a months-long postponement due to the coronavirus outbreak, later this week China will finally convene key national political meetings known as the “Two Sessions.” As the conferences approach, scholars have once again begun to debate whether China should promote the monetization of its fiscal deficit.
While some conditionally approve of this suggestion, more scholars have clearly expressed their opposition to it. We fall into the latter camp. Instead of monetizing the deficit, we should strengthen the independence of Chinese monetary policy. Even at a time when the Covid-19 pandemic remains serious, the country mustn’t ease up on financial discipline.
Ma Jun of China’s Central Bank wrote on the bank’s newspaper on Monday firmly refuting the idea that the central government instead of “borrowing” (issuing bonds in the market), it should just print money to finance its deficit (having the central bank to permanently hold government bonds). Ma used the examples of the KMT in the 1930s, and Latin America in the 1990s to say that once Beijing gives up this financial restraint, it will lead to many other financial problems. Ma wrote this because Liu Shangxi, a senior researcher with China’s ministry of finance put forward the idea of “Monetization of Financial Deficit” in a speech last month.
Monday China Media Group commentary "Everything is for the people, everything relies on the people" discusses the Friday Politburo meeting, calls Xi "People's Leader". We will be hearing more about that term at the upcoming NPC?
Xinhua wrote a long article again praising Xi Jinping, the CCP and the Chinese people for their success in containing the virus spread within just three months. The article was on the front page of People’s Daily, the entire page 2, and a big part of the page 3 of the Monday edition.
No open-day activities or other group interviews will be held by various delegations, Zhang said. But spokespersons will be appointed by delegations, press liaison officers will assist press interviews, and studios will be set up at the hotels the delegations stay to encourage deputies to be interviewed, he added.
3. Hong Kong
There have been subtle changes of tone here and there, but by and large the premier routinely reaffirms the “one country, two systems” principle that grants the two cities the unique status of a high degree of autonomy.
This year, however, things could be different, sources have told the South China Morning Post. Not only did the long-running social unrest that struck the city over the previous year thrust it into the national spotlight, the intense rivalry between China and the US has also given the Hong Kong issue a new urgency…
During a meeting in Shenzhen at the end of April, Xia Baolong, director of the Hong Kong and Macau Affairs Office, urged Chief Executive Carrie Lam Cheng Yuet-ngor to examine ways to introduce a national security law in the city, a source said…
“Xia expressed concern that Hong Kong was becoming a loophole in China’s national security and stressed that Hong Kong should not become the weak link,” the source said.
Most observers and government sources expect the national security legislation to be discussed at this year’s parliamentary sessions. The real question is in what format and to what extent.
In the most extreme scenario, Beijing may lose patience or faith in Hong Kong to enact the law by itself – particularly as the opposition is expected to score a landslide victory in the upcoming Legislative Council elections – and decide to take the matter into its own hands.
A hard way to do this is to pass the national security law and add it to Annex III of the Basic Law, which exempts certain national laws that are not applicable in Hong Kong from being applied here.
Another less damaging option is for the NPC Standing Committee, the country’s top legislative body, to reinterpret some colonial ordinances and turn them into a de facto national security law, a source familiar with the discussion said.
Comment: And this is why the US State Department has delayed the release of the Congressionally mandated annual report on Hong Kong. A person close to the decision told me almost three weeks ago that they did not want to issue the report only to have Beijing completely change the landscape just a few weeks later at the NPC
People's Daily asks "how did Hong Kong's education become a 'poison factory'"?
CCTV Online on the Hong Kong "Gang of Four"'s - Anson Chan, Jimmy Lai, Martin Lee and Albert Ho -- collusion with hostile Western anti-China forces
CRI on "anti-China" education "kidnapping" Hong Kong
Pro-Beijing camp favourite Starry Lee of the DAB party has been elected House Committee chairperson, winning an overwhelming majority of the votes despite a short-lived protest from democrats...
The move followed more than six months of deadlock over the election of the committee’s chair and deputy chair, with opposition lawmakers accused of filibustering and creating a backlog of legislative business.
Pro-democracy legislators charged at security guards surrounding pro-establishment lawmaker Chan Kin-Por, who had taken the chairman’s seat in the meeting against procedural objections by the opposition.
Guards hauled several legislators out of the chamber, some kicking and shouting...
The house committee’s role is to scrutinise bills before a second reading in the legislative council and has built up a backlog after failing to elect a chairperson since late last year. The backlog includes the China national anthem bill, which is expected to be given a second reading on May 27 despite the procedural
The Civic Party’s Dennis Kwok, who had chaired committee proceedings until he was stripped of this responsibility by Legco President Andrew Leung last week, said the government and Beijing supporters are getting away with whatever they want and disregarding all the rules.
“The reality in Hong Kong today is that whenever Beijing, whenever Carrie Lam and the pro-establishment don’t like something, they will do whatever it takes, including breaking the system that we have, the rules that we have,” he said.
The report concluded that the reputation of the force had been damaged during the unrest: “The image of the Police has lost its lustre and the city of Hong Kong has lost its hard-earned reputation as a peaceful city. Most disheartening, too, is the psychological trauma the violence has wrought, particularly on the minds of young people.”
However, it also raised concerns about increasing protest violence: “From recent seizures of assault rifles, handguns and ammunition, and materials for bomb-making, it seems that our community is being dragged into an era of terrorism. It is the duty of the Police Force to keep the peace and maintain law and order, in protection of all. Under the violence they had to face in performance of their duty, the Police had found it necessary to resort on occasions to the use of force.”
Hong Kong ‘s Independent Police Complaints Council (IPCC) has released its 999-page report on the behaviour of the police force during last year’s city-wide protests and unrest, concluding that officers generally acted within guidelines but there was “room for improvement.”
Lifeguard Sin Ka-ho, 22, pushed police barricades and hurled objects at officers outside the Legislative Council on June 12
Several global PR firms have again chosen to rebuff the Hong Kong government's global PR brief, PRovoke has learned, although Edelman and Publicis firm Qorvis are among the seven bidding firms.
Friday was, for observers concerned about the state of human rights in Hong Kong, one of the most depressing days in some time, and also sadly symbolic of the New Hong Kong.
In the course of just one day, we saw: the education system under attack, the legislature under attack, the rule of law under attack and, finally, the truth itself under attack.
Comment: And then there was Monday...
It has recently come to my attention that the Chinese government has threatened to interfere with the work of American journalists in Hong Kong. These journalists are members of a free press, not propaganda cadres, and their valuable reporting informs Chinese citizens and the world. Any decision impinging on Hong Kong’s autonomy and freedoms as guaranteed under the Sino-British Joint Declaration and the Basic Law would inevitably impact our assessment of One Country, Two Systems and the status of the territory.
The number of job vacancies for university graduates in Hong Kong has been more than halved, and the average salary could be slashed by up to 20 per cent, amid a double whammy of protests and the coronavirus pandemic, according to analysts and the latest figures from major employment platforms.
4. The Outbreak
Chinese health authority said Monday that it received reports of seven new confirmed COVID-19 cases on the Chinese mainland Sunday, of which four were imported.
Three cases were domestically transmitted, with two reported in Jilin Province and one in Shanghai, the National Health Commission said in its daily report.
Li Pengfei, Party chief of Shulan, Jilin city in Northeast China's Jilin Province, where sporadic COVID-19 cases rebounded, was ousted from his post on Friday. So far, more than 8,000 people have been quarantined in Jilin and Liaoning provinces after cluster infections occurred in Shulan...
Besides, the Dongxihu district government in Wuhan, Hubei Province announced on Monday that Zhang Yuxin, a subdistrict-level Party chief, who is allegedly responsible for the rebound of six infections in a community, was ousted from his post after a liaison group under China's State Council rushed to the community to oversee the prevention and control work.
To instruct the handling of a new outbreak, vice premier Sun Chunlan and her team visited Jilin province after a 3-day inspection in Heilongjiang. At least six officials in Shulan, Jilin, including the city’s party boss, heads of the health bureau and CDC have all been sacked over the weekend for the mishandling of the virus.
China News reported that by then end of Sunday, at least 40 people have contracted COV-19 in the cluster outbreak in Shulan, Jilin. The outbreak has spread to Shenyang, Liaoning.
In an abrupt reversal of the re-opening taking place across the nation, cities in Jilin province have cut off trains and buses, shut schools and quarantined tens of thousands of people. The strict measures have dismayed many residents who had thought the worst of the nation’s epidemic was over...
The government of Shulan, a city in Jilin, said on WeChat Monday it would put in place its strictest measures yet to contain the virus. Residential compounds with confirmed or suspected cases will be closed off, with only one person from each family allowed to leave to purchase essentials for two hours every two days.
Both countries should take the establishment of a "fast lane" for essential personnel exchanges as an opportunity to create conditions for resuming work and production and resuming economic and trade cooperation between the two countries, and jointly maintain the stability of the industrial and supply chains.
"China may relax border controls gradually after the two sessions or in early June," Wang Hongwei, a professor at Renmin University of China's School of Public Administration and Policy in Beijing, told the Global Times on Sunday.
"Chinese students studying abroad who have graduated, important business leaders and much-needed production technicians, could get priority to return to China," Wang noted.
Zhou Zijun, a public health expert at Peking University, told the Global Times that as the epidemic has ebbed in China and medical testing ability has improved, it's time to lift restrictions on some business travel.
Police in Nepal last week detained 47 Chinese citizens who had tried to force their way into Kathmandu’s Lion Palace, which houses the offices of the Nepali prime minister, to demand help with returning home. Four were arrested and charged with uncivilized behavior, a spokesman for Nepal Police said.
Southwest China's Yunnan Province will reopen kindergartens and special education schools from May 25 as the COVID-19 epidemic in the country has been subdued
The institutions, with some 48,000 senior citizens who remained in residence during the Spring Festival holiday, have reported zero infections of COVID-19 since Jan. 27 when Beijing closed off nursing homes amid the severe challenge from the novel coronavirus.
Zhao Fei, who studied and worked at the Wuhan Institute of Virology (WIV) for several years until the end of 2018, published a long defence of the institute on ScienceNet on the weekend. His article rejected theories that the Covid-19 virus was manufactured in – or had accidentally leaked from – the institute.
Police from Shanghai have detained a lawyer-turned-citizen journalist who reported on the emerging coronavirus epidemic in the central Chinese city of Wuhan.
Zhang Zhan, who lives in Shanghai but who traveled to Wuhan in early February, was taken away from Wuhan's Caiguang Hotel near Hankou railway station on the night of May 14.
The city of Zö, on the northeast Tibetan Plateau, illustrates how lockdowns have affected Tibetans and how they have reacted to new government restrictions. Online information and control, as a relatively new means of governance, has played an important role in shaping and enforcing the norms of behaviour of residents of Tibetan cities in China.
Dr. Zhong Nanshan, the Chinese government's senior medical adviser and the public face of the country's fight against Covid-19, also confirmed in an exclusive interview with CNN on Saturday that local authorities in Wuhan, the city where the novel coronavirus was first reported in December, had suppressed key details about the magnitude of the initial outbreak...
He said he had repeatedly asked Shi Zhengli, the lead virologist from the Wuhan Institute of Virology at the center of the Trump administration's accusations, about claims that the virus was created in her lab and accidentally leaked.
"She said that's totally ridiculous, she had never been doing anything like that," said Zhong, who called Shi a "good friend."
"She said based on their equipment and facilities and manpower... they were unable to do anything, any kind of artificial virus at this time."
Zhong said that in early February, China's disease control authorities spent two weeks investigating Shi's lab for wrongdoing. They didn't find anything, he added.
Multiple congressional committees have obtained and are scrutinizing the 30-page report, produced by the Multi-Agency Collaboration Environment (MACE), a part of Sierra Nevada, a major Department of Defense contractor. The report claims to rely on social media postings, commercial satellite imagery, and cellphone location data to draw the conclusion that some sort of “hazardous event” occurred at the Wuhan virology lab in October 2019—an event that allowed COVID-19 to escape. It’s a theory that has gained currency on the political right and in the upper tiers of the Trump administration...
“This is an illustrated guide on how not to do open source analysis,” said Jeffrey Lewis, director of the East Asia Nonproliferation Program at the Center for Nonproliferation Studies, who analyzed the MACE report for The Daily Beast. “It is filled with apples-to-oranges comparisons, motivated reasoning, and a complete refusal to consider mundane explanations or place the data in any sort of context.”
Comment: I'd say what a joke if the stakes were not so deadly serious.
And this is quite the walk back by Pompeo - Secretary Michael R. Pompeo With Matthew Boyle of Breitbart News Network and SiriusXM Patriot - United States Department of State
We know it began in Wuhan, but we don’t know from where or from whom, and those are important things...
CNN: US Secretary of State Pompeo said in an interview yesterday that while the US government believes the virus came from Wuhan, now he is not exactly sure where it came from. That said, he still believes China is not open and transparent enough, and the US will still take countermeasures against the Chinese government's response. Could you comment on that?
Zhao Lijian: This US politician has been a lying blabbermouth. It's a waste of time to comment on his fabrications.
Interviews with a dozen current and former government officials, industry executives and members of Congress show widespread discussions underway - including the idea of a “reshoring fund” originally stocked with $25 billion - to encourage U.S. companies to drastically revamp their relationship with China.
“We have to dig out those traitors who have been bought out by the United States and do its bidding,” Wang Haiyun, a retired major general attached to a pro-party foundation in Beijing, wrote in a policy proposal circulated this month on Chinese nationalist websites.
No letup in the CCTV Evening News attacks on the US. This one from Friday, calling on the US to explain what is really going on with US biolabs -[视频]国际锐评：疑云重重的美国生物实验室该说说清楚了！_CCTV
Saturday's CCTV commentary attacks the US over claim s from some US politicians that the US would monopolize a vaccine
This one from Sunday - "Are the American politicians who are "cannons in the sky" really doing epidemic prevention or playing blockbusters?" This one goes into the comment by Trump that the US started on working on a vaccine on January 11
Monday's CCTV commentary attacking US politicians for playing the race and nationalism cards - "American politicians who manipulate racist "boomerang" will surely eat their own fruits"
Comment: A lot more people in China watch CCTV Evening News than read People's Daily, so these continuous attacks are likely to leave a much bigger mark on views to the US...it does not help that the US response to the pandemic has made the attacks easy and not just manufactured propaganda…
CCTV again pushing the idea that maybe the virus came from the US
CCTV- America's lies and reality -- conspiracy theories about the virus
10 minute video refuting US officials and claims about the pandemic, begins with scenes of the virus' carnage in the US
In a series of articles and social media posts over the weekend, state media outlets used the statement to rebut charges that the virus had originated in the country and the authorities had failed to share early information with the rest of the world.
“This proves the novel coronavirus had been spreading in the United States before January 11, and Trump and some American politicians and media are lying,” People’s Daily, the Communist Party’s official mouthpiece, posted on its Weibo account on Saturday.
Chinese netizens are demanding an explanation from the US as its president revealed that the US started to develop a candidate for the first COVID-19 vaccine on January 11. Despite this, US politicians still attempt to blame China for its own failures while having earlier knowledge of the impending epidemic...
"Trump's personal speech revealing his administration's intention to use China as a scapegoat for the spread of the virus in the US is 'groundless' with him only trying to divert public attention from its own failures," Li Haidong, a professor at the Institute of International Relations at the China Foreign Affairs University, told the Global Times on Saturday.
Trump's speech angered Chinese netizens, with many saying that the Trump administration did not adopt a timely response and caused current failures of controlling the deadly virus domestically with the US trying to use China as a scapegoat.
"Does it mean the US admits the virus was first found on its shores?" "Please give us an answer," Chinese netizens commented.
The official Twitter handle of the Chinese Embassy in France released a series of cartoons on Friday, which went viral in both Twitter and Sina Weibo, which experts deem reader-friendly and an improvement in communication...
The cartoons intended to answer the question "Pourquoi Trump a fui?" in English, Why Trump fled?
The cartoon illustrates "WHO" and "Medical staff" assisting the "Earth" by muscle-flexing and arm-wrestling against "novel coronavirus," while a Stars- and Stripes-donning caricature, with a hairstyle similar to that of the US President Trump, is seen behind the "Earth." He just watches everyone fight against the pandemic, without offering any help.
Comment: You can see the cartoon here. They are not even pretending not to mock Trump.
There is of course a domestic imperative to defect blame and criticism away from the CCP but in this latest anti-US propaganda surge, one that I think is unprecedented in many years, it looks like Xi and Wang Huning see a massive opportunity to discredit the US in a way that comports more with reality than it ever has in their lifetimes.
Yao Yang (b. 1964) is a professor at the China Center for Economic Research and Dean of the National School of Development at Peking University...
First, he thinks it is extremely likely that a new ideological Cold War is indeed coming, and that Western powers will orchestrate a joint attack on the “Chinese system” to muddy the waters about what went wrong in the fight against the coronavirus. ...
There is a fatalistic tone to Yao’s remarks, who notes sadly that he has lost all faith in the US media (Yao did his Ph.D. in the US, at the University of Wisconsin-Madison) and that Trump has managed to turn virtually all of American public opinion against China.
Comment: Zero recognition in Yao's piece that Xi and China bear any responsibility for the current state of US-China relations
Wang Jiang, a research fellow with CASS, and an anonymous Chinese expert told Global Times that they expect Trump to sign the Xinjiang Policy Act soon and it will only further undermine the US-China relations and mutual trust at a moment when the relations are already extremely vulnerable. They expect more moves by the US on Xinjiang, and Wang suggested that instead of targeting US companies for retaliation, China should target specifically the US politicians involved, so not to hurt the people-to-people relations of the two country.
Including arrears that stretch back several years, “the United States is the largest debtor, owing 1.165 billion and 1.332 billion U.S. dollars respectively,” China added.
6. US goes after Huawei again
However, there is still time for industry and Huawei lobbyists to water down these rules as they have done with previous attempts.
The Bureau of Industry and Security (BIS) today announced plans to protect U.S. national security by restricting Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad. This announcement cuts off Huawei’s efforts to undermine U.S. export controls. BIS is amending its longstanding foreign-produced direct product rule and the Entity List to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology...
To prevent immediate adverse economic impacts on foreign foundries utilizing U.S. semiconductor manufacturing equipment that have initiated any production step for items based on Huawei design specifications as of [date of rule effective date], such foreign-produced items are not subject to these new licensing requirements so long as they are reexported, exported from abroad, or transferred (in-country) by 120 days from the effective date.
Comment: This puts Taiwan and TSMC in a very tough spot.
Taiwan Semiconductor Manufacturing Co., the world biggest contract chipmaker, has halted new orders from Huawei Technologies in response to tighter U.S. export controls aimed at further limiting the Chinese company's access to crucial chip supplies, multiple sources told the Nikkei Asian Review.
"TSMC has stopped taking new orders from Huawei after the new rule change was announced to fully comply with the latest export control regulation," a person familiar with the situation said. "But those already in production and those orders which TSMC took before the new ban are not impacted and could continue to proceed if those chips could be shipped before mid-September."..
According to the document posted online by the U.S. Commerce Department Bureau of Industry and Security, chip shipments bound for Huawei that went into production before May 15 and will ship before midnight Sept. 14 are not subject to the new rule. A license will be required for all other shipments.
China and Huawei have threatened retaliation but Rotating Chairman Guo Ping on Monday refrained from commenting on a possible Beijing response -- a departure from just two months ago when the company warned Washington risked opening a “pandora’s box” and Chinese countermeasures if it chose to go ahead with additional restrictions.
“Our business will significantly be impacted,” Guo said at a company briefing with analysts in Shenzhen. “Given the changes in the industry over the past year, it dawned on us more clearly that fragmented standards and supply chains benefit no one. If further fragmentation were to take place, the whole industry would pay a terrible price,” he added.
China is ready to take a series of countermeasures against a US plan to block shipments of semiconductors to Chinese telecom firm Huawei, including putting US companies on an "unreliable entity list," launching investigations and imposing restrictions on US companies such as Apple, and halting purchase of Boeing airplanes, a source close to the Chinese government told the Global Times.
The potential move, the second time within two days that China has released message of hitting back against the US, also the very first time government source noted to target specific US companies, is a result of Washington's recent malicious attacks on China, which ignited a tsunami of anger among Chinese officials and in the business circle. China is mulling punitive countermeasures against US individuals and entities over COVID-19 lawsuits due to the abuse of litigation by the US side, sources close to the matter told the Global Times previously.
Briefing with Under Secretary for Growth, Energy, and the Environment Keith Krach, Science and Technology Adviser to the Secretary Mung Chiang, and Assistant Secretary for International Security and Nonproliferation Christopher A. Ford On Taiwan Semiconductor
The key issue today, and I’d like to add a bit of a gloss on what the Under Secretary had said, is why we are doing this and why the United States believes Huawei to be such a threat. And I would say that our concerns with Huawei are at least threefold. First of all, for starters, Huawei engages, clearly, in illegal activity, including intellectual property theft from U.S. companies and the evasion of U.S. sanctions, in support of the world’s biggest state sponsor of terror and a notorious proliferator. The U.S. Department of Justice has issued not one but two indictments against Huawei for a range of crimes, including intellectual property theft, violations of the Racketeer Influenced and Corrupt Organizations Act – that is to say, RICO – and for helping Iran evade sanctions. This is not the sort of entity with which reputable U.S. or other foreign companies should be doing business as usual, and our changes reflect that.
The second factor is that Huawei is an enabler for human rights abuses by the People’s Republic of China. It provides technological support for Chinese Communist Party ethnic cleansing in Xinjiang, for example, and for the party’s technologically facilitated surveillance-and-control authoritarianism throughout China. Huawei also helps make such technologies available for export to other repressive regimes. So that’s the second factor.
And the third one is that – is perhaps in some ways the most troubling over time, and that is that because of the PRC’s governance model and standing Chinese laws, Huawei is a company that is structurally subject to manipulation and to control by the Chinese Communist Party, essentially at any time. Whenever the party calls upon it, Huawei can function – and indeed has no choice but to serve – as a tool of strategic influence and political manipulation, including through providing support where it can to the PRC’s broader military-civil fusion strategy for acquiring Western technology and diverting that technology to military and security uses that further the CCP’s, the Chinese Communist Party’s, repressive agenda at home and its geopolitical revisionism abroad.
According to SMIC’s announcement, a number of vehicles under China’s so-called “Big Fund,” a government-backed money pool for funding domestic chip companies, will jointly make the investment in one of SMIC’s plants...
The plant has a manufacturing capacity of 6,000 14-nanometer wafers per month, and SMIC says it aims to increase that to 35,000 per month.
Comment: Still far behind
7. World Heath Assembly
"China will provide 2 billion U.S. dollars over two years to help with COVID-19 response and with economic and social development in affected countries, especially developing countries," Xi said.
China will work with the United Nations to set up a global humanitarian response depot and hub in China, ensure the operation of anti-epidemic supply chains and foster "green corridors" for fast-track transportation and customs clearance, he said.
Besides, China will establish a cooperation mechanism for its hospitals to pair up with 30 African hospitals and accelerate the building of the Africa CDC headquarters to help the continent ramp up its disease preparedness and control capacity, said Xi.
"COVID-19 vaccine development and deployment in China, when available, will be made a global public good," said the president...
China will work with other G20 members to implement the Debt Service Suspension Initiative for the poorest countries..
"China supports the idea of a comprehensive review of the global response to COVID-19 after it is brought under control to sum up experience and address deficiencies," said Xi.
"This work should be based on science and professionalism, led by WHO and conducted in an objective and impartial manner," he added.
The draft resolution, submitted by the European Union on Monday and supported by more than 100 nations, does not mention Wuhan or China. It asks the WHO to work with other U.N. agencies to “identify the zoonotic source of the virus and the route of introduction to the human population, including the possible role of intermediate hosts.”..
The document does not propose a review to identify missteps in how countries handled the outbreak and is instead forward-looking.
Comment: Xi did not back down, there is no reason to think that this inquiry will not be heavily influenced by Beijing, or that He is comfortable agreeing to it because he knows the deck is stacked. -Xi Jinping backs down on virus inquiry, pledges $3bn to recovery - The Australian
Speaking over videolink at the beginning of the World Health Assembly meeting on Monday night, Mr Xi said China supported a “comprehensive evaluation” of the global response to the coronavirus pandemic after it had been brought under control, insisting that China had “always had an open, transparent and responsible attitude”.
Taiwan on Monday dropped its bid for observer status at a meeting of World Health Organization's decision-making body, saying the institution yielded to pressure from China in not inviting the island to attend.
Foreign Minister Joseph Wu told reporters that countries want to use the shortened two-day online meeting to concentrate on containing the pandemic, and suggested that the proposal for Taiwan to join be taken up later this year.
"After careful deliberation, we have accepted the suggestion from our allies and like-minded nations to wait until the resumed session before further promoting our bid," Wu said.
so long as the Taiwan government does not claim China’s U.N. seat, the resolution does not prevent Taiwan’s eventual membership as an independent state in the United Nations and any of its affiliated organizations such as WHO. The United Nations is legally free to recognize that Taiwan has all the characteristics of statehood, as it does, and admit it as a new member, even one called the Republic of China on Taiwan. Surely, there is no barrier to WHO’s grant of mere observer status to Taiwan today.
In fact, every year from 2009 to 2016, China allowed WHO’s Director General to issue an invitation to Taiwan to take part in the WHA as an observer. Neither WHO nor the Chinese government then claimed Taiwan’s observer status to be a violation of any U.N. principles or international law. Beijing accepted it because of Beijing’s political rapprochement with the Taiwan government then dominated by the Nationalist Party.
The United States condemns Taiwan’s exclusion from the World Health Assembly. At a time when the world continues to struggle with the COVID-19 pandemic, we need multilateral institutions to deliver on their stated missions and to serve the interests of all member states, not to play politics while lives are at stake...
WHO’s Director-General Tedros had every legal power and precedent to include Taiwan in WHA’s proceedings. Yet, he instead chose not to invite Taiwan under pressure from the People’s Republic of China (PRC). The Director-General’s lack of independence deprives the Assembly of Taiwan’s renowned scientific expertise on pandemic disease, and further damages the WHO’s credibility and effectiveness at a time when the world needs it the most.
The PRC’s spiteful action to silence Taiwan exposes the emptiness of its claims to want transparency and international cooperation to fight the pandemic, and makes the difference between China and Taiwan ever more stark.
8. Foreign work
China has made tremendous efforts and contributions to the global pandemic prevention and control, which demonstrates the thought of building a community with a shared future for mankind as well as China's sense of responsibility as a major country, Wei said. However, politicians of some countries smeared China over pandemic-related issues, seriously violating international morality and undermining the overall international campaign against the pandemic, Wei continued.
General Wei also declared that China firmly supports Malaysia for its efforts in combating COVID-19 epidemic and is willing to provide assistance within its power. In addition to controlling the epidemic, the two militaries should maintain communication and promote pragmatic cooperation in various fields, jointly protecting regional peace and stability, Wei added.
Remarks by H.E. Ambassador Liu Xiaoming at the Webinar on Fighting Covid-19 in Africa jointly hosted by the Chinese Embassy in the UK and the Legatum Institute: Join Hands with African Countries to Fight against Covid-19
China will continue to provide support to African countries, promote the development of Africa CDC, and enhance cooperation between China and Africa on public health and disease control. Together China and Africa can build a community with a shared future.
Both China and the UK are important partners of Africa. Helping Africa in this fight against Covid-19 serves the common interests of all three parties.
Beijing is fighting the virus at home and fending off suspicions and criticisms overseas. Despite its success in containing the virus — following a short period of hesitation and confusion — and its unprecedented assistance to others when the epidemic became a global pandemic, China is not receiving recognition or appreciation for these efforts it thinks dues. Instead, China is receiving much ridicule and accusations of bad faith, especially from the United States — probably the largest recipient of medical supplies from China...
Despite this counteroffensive, China continued to live up to its own international responsibilities by delivering aid to other countries and endorsing multilateral cooperation to manage COVID-19 fallout. It fought against US attempts to smear and sabotage the WHO’s efforts to fight the virus. In response to US suspension of support to the WHO, China donated an additional US$30 million to the organisation.
Looking ahead, China’s diplomacy is likely to continue unchanged for the foreseeable future — fending off Western attacks and endorsing international efforts to fight the pandemic. Despite the challenges in its quest to be a responsible power, China does not believe it should give up. To many, it will appear, the search has only just begun.
Jia Qingguo is Professor of Diplomacy and International Relations at the School of International Studies, Peking University.
"Justice assumes that no one should accuse anyone of anything without proof," Lavrov said in an online interview with Russia's RBK media holding.
Business, Economy and Trade
China Home-Price Growth Accelerates in Property Market Boost - Bloomberg New-home prices in 70 major cities, excluding state-subsidized housing, gained 0.42% in April, National Bureau of Statistics data released Monday showed. That’s up from a 0.13% increase in March.
A Trade Deal ‘Born to Die’: China Outflows Highest in Four Years - Bloomberg All in, money managers divested $2.7 billion from Chinese stocks in the five days to May 13, the most since at least 2016, according to Goldman Sachs Group Inc. That brings the four-week total to $6.2 billion, outpacing emerging-market counterparts.
China's fiscal revenue down 14.5 percent in Jan.-Apr. - CGTN The country's fiscal revenue shrank 14.5 percent year-on-year to 6.21 trillion yuan (about 875.11 billion U.S. dollars) during the January-April period, data released by the Ministry of Finance showed. The pace of decline quickened from a fall of 14.3 percent in the first quarter of the year and a 9.9 percent decrease in the first two months.
Beijing-backed AIIB plans to sell panda bonds in China for first time in June - sources - Reuters The Asian Infrastructure Investment Bank (AIIB) is planning to sell 5 billion yuan ($702.94 million) worth of three-year panda bonds in China for the first time in early June, two sources with direct knowledge of the matter said on Monday.
Chinese Oil Demand Is Almost Back to Pre-Virus Crisis Levels - Bloomberg In a remarkable turnaround after Chinese demand crashed by about 20% as the country went into lockdown in February, consumption of gasoline and diesel has fully recovered as factories reopen and commuters drive rather than use public transport, according to the people, who asked not to be named because they aren’t authorized to discuss the matter publicly.
Tesla is facing 10 civil lawsuits in China · TechNode Only five months after delivering its China-made Model 3 vehicles, Tesla has drawn growing criticism that has turned into lawsuits due to lack of transparency, too-often price changes, and alleged deceptive sales pitches.
Politics and Law
Xi Focus: Xi's speech at first session of 13th NPC to be published - Xinhua Only those who are accustomed to threatening others see everyone as a threat, the article adds. Continuing to hold high the banner of peace, development, cooperation and mutual benefit, China will stay on the path of peaceful development and continue to pursue a mutually beneficial strategy of opening up, says the article. China will contribute more Chinese wisdom, Chinese solutions and Chinese strength to the world, to push for building an open, inclusive, clean and beautiful world that enjoys lasting peace, universal security and common prosperity, according to the article. // The speech, which was given at the 2018 NPC session that ended term limits for the President 在第十三届全国人民代表大会第一次会议上的讲话
求是：民族精神：中华民族奋勇前行的不竭动力The latest Qiushi also published this article by Ju Li (巨 力 , “Great strength”, echoing Xi’s speech in 2018. It emphasized the need for patriotism among Chinese people, because this “national spirit” can unite the people in the “great struggle” (伟大斗争需要伟大民族精神) and the pursuit for national rejuvenation, at a time when some unnamed foreign country is trying to contain China’s rise.
Xi chairs leadership meeting to discuss draft government work report_英语频道_央视网(cctv.com) Despite multiple challenges China faced in its development last year, the CPC Central Committee with Comrade Xi Jinping at its core has rallied and led Chinese people of all ethnic groups to achieve the major annual targets and lay a decisive foundation for completing the building of a moderately prosperous society in all respects, the meeting said...Going forward, attendees at the meeting called for unremitting efforts in implementing regular epidemic prevention and control measures this year, while striving to deliver a good performance in all areas of economic and social development...The proactive fiscal policy should be more positive, the prudent monetary policy should be more flexible and appropriate, and the employment priority policy should be further strengthened, according to the meeting.
Readout of the Politburo meeting - 中共中央政治局召开会议 讨论政府工作报告 中共中央总书记习近平主持会议-新华网 会议认为，过去一年，我国发展面临诸多困难挑战，以习近平同志为核心的党中央团结带领全国各族人民攻坚克难，完成全年主要目标任务，为全面建成小康社会打下决定性基础。新冠肺炎疫情发生后，党中央将疫情防控作为头等大事来抓，习近平总书记亲自指挥、亲自部署，坚持把人民生命安全和身体健康放在第一位，领导全党全军全国各族人民打好疫情防控的人民战争、总体战、阻击战。经过艰苦卓绝的努力，武汉保卫战、湖北保卫战取得决定性成果，疫情防控阻击战取得重大战略成果，统筹推进疫情防控和经济社会发展工作取得积极成效
西藏自治区政府副秘书长扎西江措接受审查调查—中央纪委国家监委网站 Deputy secretary general of the Tibet provincial government is now under investigation for corruption.
北京市顺义区政协副主席金泰希接受监察调查———中央纪委国家监委网站 Vice chairman of CPPCC in the Shunyi district in Beijing is now under investigation for corruption. The political waters run very deep in Beijing, and especially in Shunyi
China unveils guideline on advancing western development in new era - Gov.cn Achieving western development in new era is of great practical and profound historical significance to completing the building of a moderately prosperous society in all respects and embarking on a journey to fully build a modern socialist China, according to the document issued by the Communist Party of China Central Committee and the State Council. By 2020, the western regions as a whole will see its ecological, business, opening-up and innovation environment to be substantially improved. It will basically realize socialist modernization by 2035, with its public service level, infrastructure connectivity and people's living standard on par with the eastern regions, the document said. 中共中央 国务院关于新时代推进西部大开发形成新格局的指导意见
Bloom and Bust: The Officials Who Bet a County’s Future on Sunflowers - SixthTone The trial, conviction, and subsequent exoneration of two village officials in a poor region of rural China has raised questions about the extent to which grassroots government workers should be held accountable for poverty alleviation projects that don’t pay off. Yao Minjie and Zhang Lixin, of Duolun County in North China’s Inner Mongolia Autonomous Region, were convicted last year of abusing official power to force through agricultural projects they claimed would raise local incomes and tackle destitution, but which ended up posting more than 1.5 million yuan ($210,000) in losses.
25th Anniversary of the Panchen Lama’s Disappearance - United States Department of State on May 17, we marked the 25th anniversary of the disappearance of the 11th Panchen Lama, Gedhun Choekyi Nyima, who has not appeared in public since the PRC government abducted him in 1995, at age six. // Comment: Saw his replacement driving by when we were in Shigatse in 2014
Aluminum Veteran Named Shanxi’s Youngest Vice Governor - Caixin Aluminum industry veteran Lu Dongliang has been named a vice governor of North China’s Shanxi province, becoming the first person to hold that title from a new generation of leaders born in the 1970s and now in their 40s.
China increases state compensation for violation of personal freedom - Xinhua China's Supreme People's Court (SPC) and Supreme People's Procuratorate on Monday unveiled new state compensation standard for violating personal freedom. The new standard was 346.75 yuan (about 49 U.S. dollars) per day, slightly higher than last year's 315.94 yuan, according to circulars issued by the two state organs
Tsinghua’s Journalism School to Stop Enrolling Undergrads, Focus on ‘Global Public Opinion’ | Sixth Tone The School of Journalism and Communication at China’s elite Tsinghua University will stop enrolling undergraduates and shift its focus to graduate education beginning this year, Sixth Tone’s sister publication The Paper reported Friday.
A Survey of Legislative Responses to COVID-19 by Chinese Provinces – NPC Observer Acting in an almost concerted fashion, over twenty provincial legislatures adopted decisions dealing with COVID-19—which we will call “COVID Decisions”—in a twelve-day period in early February. These Decisions address the responsibilities of a range of parties: government entities, businesses, medical institutions, social groups, communities, individuals, etc. (All but Shaanxi’s require individuals to wear masks in public, for example). Equally important, the Decisions also grant emergency powers to local governments.
Foreign and Defense Affairs
China to impose 80 per cent tariff on Australian barley for the next five years amid global push for coronavirus investigation - ABC News In a statement announcing the decision, China's Ministry of Commerce said its "domestic industry had suffered substantial damage".
Coronavirus: China free-trade deal ‘at risk with retaliation from Beijing to worsen’ - The Australian Mr [Warwick] Smith, chairman of the Business Council of Australia China Leadership Group, warned it was a “reasonable proposition” that the trade clash would worsen. He urged the government to “be patient, be calm (and) deal with this on a case-by-case basis”...His comments came as the US ambassador to Australia, Arthur B. Culvahouse Jr, accused the Chinese Communist Party of exploiting the pandemic to further its interests. “What Foreign Minister Marise Payne rightly referred to as destabilising activities are hardly new tactics from the CCP playbook, but they are being pursued with shocking new vigour as the rest of the world is focused on combating the COVID-19 pandemic, one which the CCP — through gross negligence, obsessive secrecy, and brazen dishonesty — first covered up while exporting it to the world,” he wrote in the Defence Connect journal.
The MP demanding a new approach to China | The Spectator Six years ago, Neil O’Brien was working for George Osborne when the then chancellor was enthusing about a ‘new golden era’ in Sino-British relations. But now O’Brien, who became the Conservative MP for Harborough in 2017, is one of the founders of the new China Research Group, a group of Tory MPs who are pushing for the government to take a tougher line with Beijing. His best-case scenario is one where the UK and its allies ‘manage to restrain some of the worst behaviours of the Chinese government’. O’Brien’s change of heart sums up the shift in Tory thinking on China. The party has moved away from pushing for the UK to be China’s best friend in the West, and now regards the Chinese Communist party as a dangerous power that must be checked.
Government faces legal threat over its Huawei 5G network deal | Daily Mail Online Human rights activists say they will seek a judicial review to stop Boris Johnson going ahead with the plan because they claim the firm is linked to concentration camps, slavery and repression of minorities. This week lawyers for two British-based Uighur activists will send a letter warning of court action if the PM presses on with his plan – on the grounds it flouts European procurement and British human rights rules.
The meaning of systemic rivalry: Europe and China beyond the pandemic | European Council on Foreign Relations Europe’s immediate medical-supply needs and dire economic situation will limit the scope of shifts in its China policy – for now. But, on issues ranging from supply chains to ideological competition, European governments have rebalanced their view of what dynamics with China should look like in the aftermath. The crisis is also intensifying demands from European parliaments, media outlets, and citizens for Europe to puts its China policy on a more open, accountable, and values-based footing.
Chinese spies in Malta’s embassy? News to me, says EU’s Borrell – POLITICO If China has infiltrated the Maltese Embassy in Brussels, then the EU hasn't been told about it, the bloc's foreign policy chief said. On Friday, a report in the French daily Le Monde said that Belgian intelligence sources believed Malta’s embassy in Brussels could have been bugged by Chinese spies. The Maltese government said that wasn't true.
Mark Zuckerberg warns about China's 'dangerous' approach to internet - CNBC The Facebook CEO on Monday said he was worried about other countries that are looking to replicate the Chinese model, which he labeled “really dangerous.”..“Just to be blunt about it, I think there is a model coming out of countries like China that tend to have very different values than Western countries that are more democratic,” Zuckerberg said. //Comment: how things have changed for zuckerberg since his 2014 groveling to Xi and now jailed Lu Wei
US destroyer spotted off coast of Shanghai as PLA Navy begins 11-week exercise in Yellow Sea | South China Morning Post Beijing-based military expert Zhou Chenming said the US was playing with fire by sending warships so close to China at such a sensitive time. “This kind of act can do no good and will only make Beijing question Washington’s strategic aims,” he said. “Are they coming to spy on China’s drill in the Bohai region? Are they gathering intelligence to destroy China’s developed industrial regions along the east coast in the future? Are they showing their support for Taiwan’s separatist forces? Or are they preparing to fight a war with China?”
US elite forces ill-equipped for cold war with China | Financial Times $$ “You could have hundreds and thousands of engagements every single day in a fight against China. We are just not fast enough, dynamic enough or scaleable enough to handle that challenge,” said Chris Brose, chief strategy officer at Anduril, a start-up defence technology company, which supplies SOF. He added that satellites could be blinded or shot out of orbit.
China says US attacks on its investment in Israel, virus record are 'absurd' | The Times of Israel In a statement Friday, China’s embassy in Israel said the accusations were “absurd” and said it hoped its “Jewish friends” in Israel will not only succeed in defeating the virus but also the “political virus” — an apparent reference to accusations leveled at Beijing by US Secretary of State Mike Pompeo during a visit to Israel this week.
China to send team to investigate death of ambassador to Israel - Israel News - Haaretz China will send a special team to investigate the death of its ambassador to Israel on Monday, Du Wei, whose body was found in his Tel Aviv apartment on Sunday, sources have told Haaretz. Du, 58, was found dead in his bed and appears to have died in his sleep. He left behind a wife and a son. He was appointed as China’s envoy to Israel in February.
Xi Focus: Xi replies to letter from Pakistani students studying in Beijing - Xinhua Chinese President Xi Jinping extended welcome to excellent youth from all countries in the world to study in China in his Sunday reply to a letter from all Pakistani students studying in the University of Science and Technology Beijing (USTB). In his letter, Xi encouraged the students to communicate more with their Chinese peers and join hands with youth from all countries to contribute to promoting people-to-people connectivity and building a community with a shared future for humanity.
中国军方消息人士透露：中国边防部队加强加勒万河谷地区管控, 应对印越线侵权修建设施 Citing PLA sources, Global Times reported that the Chinese military has “taken necessary measures to strengthen the response and control of the border area” in the Galwan Valley, after what it described as a one-sided provocation by the Indian side.
Global Times: China-India border tension flares up in Galwan Valley, won’t lead to another ‘Doklam standoff’: experts But the latest border friction started by the Indian side won't lead to another "Doklam standoff" which brought serious tensions between China and India in 2017, as India is merely seeking to divert its domestic attention and pressure since the COVID-19 pandemic impacted its economy, and China has a military advantage in the Galwan Valley region. So, the Indian military won't escalate the incident, analysts said.
Tech and Media
Thanks to Tencent, Gamers in China Now Have a Worthy AI Opponent- PingWest It's been nine months since Tencent announced its gaming artificial intelligence named Wukong (绝悟) defeated a professional team of e-sports players in a five-versus-five Honor of Kings match. Launched in August, 2019 during China Joy, WuKong AI achieved won 99.8% in over 2,100 games against human players.
China’s Cyberspace Administration Investigates and Punishes 386 App With Privacy Concerns- PingWest China’s leading computer/smartphone clean tool Clean Master was placed on the list. The app was developed by Cheetah Mobile, a Chinese mobile Internet company owned by Kingsoft. The company saw its 45 apps removed from Google Play store in February 2020 after the latter found that the app allegedly engaged in fraud schemes.
Yoma Strategic's mobile payments JV ties up with Alipay operator Ant Financial, Companies & Markets - THE BUSINESS TIMES ALIPAY operator Ant Financial Services Group will invest US$73.5 million in Digital Money Myanmar (Wave Money) - a mobile payments joint venture (JV) between Telenor group and the Yoma group - as part of a strategic partnership to promote financial inclusion in Myanmar.
How a Chinese AI Giant Made Chatting—and Surveillance—Easy | WIRED Alexa can tell you the weather. Siri knows a few jokes. In China, voice-computing company iFlytek built similar smart assistants beloved by users. But its tech is also helping the government listen in.
Energy, Environment, Science and Health
BRIEFING: China’s air pollution overshoots pre-crisis levels for the first time - Centre for Research on Energy and Clean Air Levels of health-harming air pollutants in China have exceeded concentrations at the same time last year in the past 30 days, for the first time since the start of the COVID-19 crisis. This includes PM2.5, NO2, SO2 and ozone. Air pollutant levels plummeted during the national lockdown in February, bottomed out in early March and have now overshot their pre-crisis levels.
China-funded Diamer-Basha Dam in PoK an ecological disaster in the making - The Economic Times China’s state-run China Power and Pakistan army’s commercial body Frontiers Works Organisation signed an accord to construct the Dam ($5.85 billion) last Wednesday. Diamer Bhasha Dam, probably the world’s highest concertised dam, will stand at a height of 272m with the capacity to hold 8 mn acre feet of water. It plans to generate 4,500 mw of power.
Rural and Agricultural Issues
China’s Facing a Fall Armyworm Invasion. It Needs New Weapons to Win Tang Xueming is a professor at the Shanghai Academy of Agricultural Sciences and Biotechnology Research Institute.