Renminbi drops and trade war escalates; General strike in Hong Kong as Carrie Lam makes thing worse

The Chinese side has started its retaliations against the latest threat of new American tariffs on US imports.

The Chinese government allowed the Yuan to trade below 7 to the US dollar for the first time since 2008. Global markets hate the drop, as does President Trump:

In fact the US should be careful what it wishes for about Chinese manipulation of the currency. It sure looks like the RMB is artificially strong and if the authorities were to stop manipulating the yuan and relax capital controls it could trade a lot closer to 10/USD than 6…

Xinhua reports the government has also halted purchases of US agricultural goods by some enterprises (Bloomberg says SOEs) and says that any orders placed after August 3 may have tariffs applied.

The Chinese have been preparing for an escalation and there appears to be no off ramp in view. When the talks collapsed in May President Trump was so angry he took action against Huawei. What non-economic measures might his advisors have prepared for him to sign this time?

Hong Kong continues towards almost daily unrest, and the press conference by Carrie Lam Monday only made things worse. Just as with the US-China trade war there is no de-escalation in sight.

Thanks for reading.


The Essential Eight

1. Hong Kong

Hong Kong being dragged down ‘path of no return’ says Carrie Lam, as she calls protests an attack on Beijing’s sovereignty | South China Morning Post

Flanked by eight of her ministers at a 40-minute press conference, the chief executive toughened her stance towards protesters and said she would not accept any of their demands, such as for her to resign...

“Hong Kong has been the safest city in the world,” she said. “But this series of extremely violent acts is pushing Hong Kong to a very dangerous situation, some extreme activists have altered the nature of these [protests], resorting to violent means to express their aspirations.”

Hong Kong Strike Sinks City Into Chaos, and Government Has Little Reply - The New York Times

Antigovernment protesters in Hong Kong mounted their fiercest challenge to the authorities on Monday, fanning out across the semiautonomous Chinese territory to occupy roads and malls after calling a general strike that disrupted businesses, flights and rail services.

Hong Kong’s values of efficiency, hard work and, increasingly, a dedication to public protest collided dramatically as protesters from across society tested the limits of the city’s police force. Officers fired tear gas near shopping malls and residential areas and arrested at least 82 people, while the city’s leader warned that efforts to “topple Hong Kong”

Beijing to announce ‘something new’ on Hong Kong in second press briefing | South China Morning Post

Hong Kong and Macau Affairs Office announces it will speak to the media on Tuesday, after Chief Executive Carrie Lam issues stern warning over unrest

Source says a ‘new announcement’ will be made, but according to an official, Beijing’s position on the city remains largely unchanged

Beijing Won’t Let Hong Kong Unrest Go On, State Media Warns - Bloomberg

“We must warn all the ugly forces that try to challenge the central authority and undermine the bottom line of the ‘one country, two systems’ principle,” the news agency said on Sunday. It added: “The central government will not sit idly by and let this situation continue,” while reiterating that it’s sticking to the one country, two systems regime.

坚决支持香港警方严正执法制止暴力

Page 1 People's Daily commentary Monday - Firmly Supporting HK Police in Sternly Enforcing the Law to Stop Violence

面对香港极端暴徒,《新闻联播》火力全开!

Sunday CCTV Evening News had 6 items on Hong Kong. The propaganda officials are working overtime

Commentary: Bottom line on Hong Kong brooks no challenge - Xinhua

Escalating violence by radicals instigated by behind-the-scenes masterminds since mid-June has severely undermined the law-based governance and social order of Hong Kong, negatively impacted the local economy and people's livelihoods, and damaged the region's image...

Hong Kong compatriots should have a sober understanding of the harm and nature of the violence by this tiny number of radicals, resolutely uphold the "one country, two systems" principle, and safeguard the rule of law and social order.

Desecration of national flag condemned - China Daily

Their act constitutes a violation of the National Flag and National Emblem Ordinance in Hong Kong, and a blatant affront to the national dignity and the principle of "one country, two systems", the spokesperson said.

It also hurt the feelings of the Chinese people, including the people of Hong Kong, the spokesperson added.

The pushback - Mekong Review - Antony Dapiran

The “unthinkable” — the People’s Liberation Army being deployed on the streets of Hong Kong — is, at least for the moment, not only unthinkable but also so unlikely as to be impossible. Beijing knows that any such deployment would mean the death of Hong Kong’s status as an international financial centre, and has always taken the position that the PLA will never intervene so long as the Hong Kong authorities are able to maintain order on their own...The real question from Beijing’s point of view is not of ability but of willingness; however, there are no signs of any divergence of views between Beijing, the Hong Kong government and the police.

PwC’s vague statement on HK situation draws criticism from Chinese public - Global Times

Chinese netizens are angry at the vague statement from one of the "big four" global accounting firms, PwC, calling it the next Pocari Sweat and condemning its fence-sitting approach to dealing with the Hong Kong riot. This outrage comes after the company issued a statement in response to a PwC-titled post that urged people to join the strike organized by Hong Kong protesters on Monday.

Refinitiv removes Reuters story on Hong Kong protests from screens in China - Reuters

City on the brink: Hong Kong rocked by clashes, transport bedlam, tear gas in 8 districts and mob attack in North Point | Hong Kong Free Press HKFP


2. Renminbi breaks 7/USD

China Says Yuan Breaks 7 on Tariff Threats, Vows Stability - Bloomberg

The yuan has “fundamental support” from a healthy economy, which features controllable financial risks, abundant reserves and a stable balance of payments, the central bank said. Yuan-denominated assets are undervalued as China is the only major economy that has maintained normal monetary policy, the bank said, adding that “China will likely become the pool of global capital.”

Yi Gang's comments - 易纲行长谈人民币汇率

近期,国际经济形势和贸易摩擦出现了一些新的情况,市场预期也随之发生了一些变化。受此影响,8月以来许多货币对美元出现了贬值,人民币汇率也受到了一定程度的影响,这个波动是市场驱动和决定的。

中国作为一个负责任的大国,会恪守历次二十国集团领导人峰会关于汇率问题的承诺精神,坚持市场决定的汇率制度,不搞竞争性贬值,不将汇率用于竞争性目的,也不会将汇率作为工具来应对贸易争端等外部扰动。一直以来,人民银行致力于维护人民币汇率在合理均衡水平上基本稳定,这个努力相信大家有目共睹。

Press explainer - 人民币汇率完全能够在合理均衡水平上保持基本稳定

答:受单边主义和贸易保护主义措施及对中国加征关税预期等影响,今日人民币对美元汇率有所贬值,突破了7元,但人民币对一篮子货币继续保持稳定和强势,这是市场供求和国际汇市波动的反映。

The Number Seven Doesn’t Mean Much for Yuan, Ex-Central Bank Chief Says - Caixin May 2019

“If you see it (7-yuan-per-dollar) as a (psychological) ‘bottom line,’ that may be a bit of an overreaction,” Zhou said Monday at a closed-door roundtable, which was held by the research institute of the Boao Forum for Asia, Japanese think tank the Asia Pacific Initiative and Caixin.

China yuan's slide past 7/dollar had policymakers' blessing - sources - Reuters

A second policy source said the yuan’s drop would allow the market to let off steam after speculating for a year about when it would hit the 7 mark.

“The depreciation is good to prevent mounting financial and political risks, including trade tensions with the U.S,” he said.

A government adviser said that while the PBOC had been preparing for the depreciation, the trigger was Trump’s unexpected announcement of further tariffs.

Economic Watch: China confident of keeping yuan stable - Xinhua

The central bank has accumulated considerable experience and policy tools in coping with exchange rate fluctuations, and will continue to innovate and improve its toolkit, crack down on short-term speculation and stabilize market expectations in the future, according to the statement.


3. US-China trade

Trump Ordered New Chinese Tariffs Over Objections of Advisers - WSJ $$

“Tariffs,” Mr. Trump said to his team, one of the people said. Those present included his national-security adviser John Bolton, top economic adviser Lawrence Kudlow, China adviser Peter Navarro and acting chief of staff Mick Mulvaney. 

All of them, save Mr. Navarro, a China hawk, adamantly objected to the tariffs, the people said. That spurred a debate lasting nearly two hours, one of the people said...

His advisers eventually conceded, one of these people said, and then helped the president draft the tweet announcing an extension of tariffs to essentially all Chinese imports.

The decision followed weeks of advice from some of Mr. Trump’s advisers, including his son-in-law Jared Kushner, to put China talks on the back burner, according to the people and a former administration official.

Trump instructed top aide to call China to warn more tariffs were coming: Sources - Reuters

The sources, who asked to remain unidentified, said Trump asked Lighthizer to call Chinese trade envoy Liu He and give him a heads-up that the tariff announcement would be made.

Since it was around 1am in Beijing at the time, Lighthizer said it might be hard to get him on the phone, the sources said.

"If you can't reach him, just leave a message," Trump told him, according to one source.

China Halts U.S. Agricultural Purchases as Trade War Heats Up - Bloomberg

The Chinese government has asked its state-owned enterprises to suspend purchases of U.S. agricultural products, people familiar with the situation said. Also, privately run Chinese crushers that had received retaliatory-tariff waivers on American soybeans from Beijing have stopped buying the commodity due to uncertainty over trade relations, other people said.

中国相关企业暂停新的美国农产品采购-新华网

Xinhua says NDRC and Ministry of Commerce have confirmed that some agricultural purchases after 8.3 may have tariffs applied, while "relevant enterprises" have ceased purchases...in this case I assume "relevant enterprises" means SOEs, as Bloomberg reported earlier

记者从国家发展改革委、商务部相关方面获悉,由于日前美方宣称拟对3000亿美元中国输美商品加征10%关税,严重违背中美两国元首大阪会晤共识,国务院关税税则委员会对8月3日后新成交的美国农产品采购暂不排除进口加征关税,中国相关企业已暂停采购美国农产品

U.S. accusations against China regarding purchase of agricultural products "groundless": official - Xinhua

Cong Liang, secretary general of the National Development and Reform Commission (NDRC) made the remarks in an interview with reporters here on Monday.

China has actively displayed sincerity in cooperation and made good progress in purchasing U.S. agricultural products after the Osaka meeting between the two heads of state, Cong said Monday.

From the conclusion of the Osaka meeting to the end of July, a total of 2.27 million tonnes of U.S. soybeans were newly shipped to China, and another 2 million tonnes of soybeans are expected to be loaded in August, said Cong...

By the evening of Aug. 2, a number of deals had been concluded, including 130,000 tonnes of soybeans, 120,000 tonnes of sorghum, 60,000 tonnes of wheat and 40,000 tonnes of pork and pork products, according to Cong.

China's Xi faces crisis of confidence as threat mount - The Washington Post

As the trade negotiations rumble on, more people in China are subscribing to the view that the dispute is about geopolitics rather than economics, scholars say. That it’s all about keeping China down.

“I believe that. Xi Jinping believes that,” said one well-connected Chinese academic, who spoke on the condition of anonymity to discuss sensitive political issues. “Of course, we have to respond to that,” he said. 

The perception gap between China and the United States is huge, the academic said, searching around for the appropriate English analogy before arriving at “women are from Venus, men are from Mars.” 

Comment: He took my idea...

Trump’s China tariffs not affecting US consumer: White House trade adviser | Fox Business

In order for the U.S. to eliminate the tariffs on China, Navarro said Beijing must end the “seven deadly sins.”

“It’s: Stop stealing our intellectual property, stop forcing technology transfers, stop hacking our computers and steal our trade secrets, stop dumping into our markets and putting our companies out of business, stop their state-owned enterprises from heavy subsidies, stop the fentanyl, stop the currency manipulation. These are all structural changes.”

【国际锐评】强词夺理 推卸责任_CCTV

Monday CCTV Evening News commentary attacks Navarro's Sunday remarks, accuses him of sophistry and shifting the blame

Tariff Fight Knocks Off China as Top U.S. Trading Partner - WSJ $$

Data released Friday showed that Mexico was the top trading partner for the first half of the year, followed by Canada. Imports from China dropped by 12%, and U.S. exports to China fell 19%, as tit-for-tat tariffs and other barriers imposed by Washington and Beijing took their toll.

Commentary: Blaming China for US fentanyl issue totally unacceptable - Xinhua

The United States is the world's largest consumer market for narcotic drugs. The proliferation of fentanyl-like substances in the United States in recent years, which killed many people, is mainly linked to the country's tradition of abusing prescription painkillers.

The United States has only itself to blame for the fentanyl abuse crisis.

The accusation against China for being the main source of fentanyl-like substances is blatant slander.


4. CCP propaganda reactions to tariff threat

Over the last few days there have been too many editorials, commentaries and reports bashing the US over the tariffs decision to include all of them. Suffice it to say the propaganda assault on the US also appears to have ratcheted up. Here are some examples:

陶然笔记:栽什么树苗结什么果,撒什么种子开什么花

Taoran Notes was surprised by Trump’s decision to impose 10% tariffs and said again that China will not be bullied into a trade deal. The article cited US media saying Mnuchin and Lighthizer were against the decision as well. This means the two didn’t brief China in advanced of the tariff decision during their talks in Shanghai. The article suggests China may suspend agri purchase and even suspend future trade talks with the US. “It all depends on the US’ attitude,” it said.

国际锐评】零和思维损人害己

CCTV evening news commentary on Sunday trashing the US for its “zero-sum mindset that hurts itself and others”.

一诺千金不可违(钟声)——评美国一些人的背信弃义①

CCTV evening news Sunday broadcast People’s Daily commentary by Zhongsheng lambasting “someone in the US” for violating his promises and agreement with Xi in Osaka, adding that the Chinese has always honored what they said. Noted that this is just the start of a new series by Zhongsheng bombarding the US for trade.

国际规则不容破坏(钟声)——评美国一些人的背信弃义②

People’s Daily’s Zhong Sheng continued his series in lambasting “some in the US” for their hegemony foreign policy that ignores global rules and repeatedly reneged its promises.

专家:以战略定力应对美方一些人的言而无信

CCTV Monday night continued to bash “some in the US” for violating his promises in meeting with Xi. The report cited experts in saying that China needs the “strategic focus”战略定力 in dealing with the mercurial Trump. It didn’t say what it means specifically, but the wording suggests China does not want to overreact, and it instead will focus more on domestic reforms and developments.

But the propaganda organs are trying to find one bright spot, the first open letter:

[视频]美前副总统签“中国不是敌人”公开信

CCTV evening news on Sunday continued to play up the open letter that claims, “China is not the enemy”. The report said former Vice President Walter Mondale just jointed the nearly 200 scholars and former officials in supporting the letter.

人民日报:美国前政要、学者、商界人士联署公开信, “美国对华政策走向极端损害自身利益”

People’s Daily page 3 article again played up the “China is not an enemy” open letter, saying now there are 187 signatures. It cited scholars and US media in saying that the letter is “an objective and reasonable voice” that fits in the expectations of US public.


5. US missiles to Asia

Esper: US to soon put intermediate range missile in Asia - Military Times

U.S. Defense Secretary Mark Esper said he wants to deploy an intermediate range conventional missile in the Pacific region within months, now that the Trump administration has formally pulled out of a Cold War-era arms control treaty with Russia...

Esper, who was confirmed as Pentagon chief on July 23, wouldn't detail possible deployment locations in Asia, saying it would depend on discussions with allies and other factors. He downplayed any reaction from China, saying that "80 percent plus of their inventory is intermediate range systems, so that shouldn't surprise them that we would want to have a like capability."

China destabilizing Indo-Pacific: U.S. Defense Secretary - Reuters

“We firmly believe no one nation can or should dominate the Indo-Pacific and we are working alongside our allies and partners to address the region’s pressing security needs, Esper told reporters in Sydney.

“We also stand firmly against a disturbing pattern of aggressive behavior, destabilizing behavior from China. This includes weaponizing the global commons, using predatory economics and debt for sovereignty deals, and promoting state-sponsored theft of other nations’ intellectual property.”China has unnerved the region and angered the United States by installing military equipment and other facilities on artificial islands it has made in the disputed South China Sea.


6. FBI talks to US students returned from China

FBI Questions American Grads Of China's Prestigious Yenching Academy : NPR

American graduates of the prestigious Yenching Academy, a one- to two-year master's degree program housed at Beijing's elite Peking University, are being approached and questioned by the FBI about the time they spent in China. In the last two years, at least five Yenching graduates have been approached by agents to gather intelligence on the program and to ascertain whether they have been co-opted by Chinese espionage efforts...

The FBI said in a statement emailed to NPR: "In an attempt to fulfill our national security mission, and in the hopes of better protecting U.S. citizens, the FBI will sometimes conduct voluntary interviews with individuals who have studied or conducted research abroad, often at their request. The goal of these interviews is to identify potential security risks and to protect U.S. citizens from illegally — and perhaps unwittingly — supporting foreign government interests."..

When two West Point graduates were admitted to the fourth incoming Yenching class last year, the Department of Defense intervened and banned them from attending, according to two people with knowledge of the matter.

Comment: I hear some Schwarzman scholars have had similar experiences. There should be a better way for the US government to help educate folks going to China and to not reject for government jobs anyone with significant experience living in China. The article mentions Glenn Shriver, who is in jail for being turned by the MSS and then encouraged to join the CAI. The FBI may be more vigilant now because that is not the only case?


7. Fake Internet activity

In Depth: The Fake Engagement Powering China’s Internet - Caixin

Just about every part of the Chinese internet that relies on mass engagement has developed a shadow ecosystem of fake engagement vendors and buyers. The motivation is simple: money. Numbers of clicks, followers, buyers and sellers drive vast amounts of advertising revenue as well as investment.

Nearly a third of China’s internet traffic in 2018 was rated “abnormal,” according to a report by third-party advertising data monitor Miaozhen Systems. The resulting loss to advertisers reached more than 26 billion yuan ($3.75 billion), Miaozhen Systems found.

According to figures released by Alibaba at the end of 2018, there were at least 2,800 organizations in China specializing in faking e-commerce activity..

E-commerce platforms depend on gross merchandise volume (GMV), a figure that sums up the total value of goods sold on a platform without taking into account returns, as a metric for measuring growth and attracting investment. Faking GMV figures has long been a common practice among e-commerce platforms, industry sources previously told Caixin. Tactics include shipping empty parcels to fake online transactions.

The original Chinese cover story 封面报道|谁在刷量?破解中国互联网不为人知的秘密_财新周刊频道_财新网

Fake Orders Boost Major Chinese Travel Site in Run-Up to U.S. IPO: Sources - Caixin

Chinese travel site Mafengwo — dubbed China’s answer to TripAdvisor — is the latest company to find itself accused of facilitating fake forms of engagement. The firm tacitly allows registered merchants to place spurious orders in order to beef up their onsite rankings and attract more views, multiple sources told Caixin.


8. Mo Yan

It feels like a good time to disappear into Mo Yan's world. I am happy that Sinocism could contribute to making this translation possible, could not have happened without your support. 

Mo Yan Country – China Channel

The rise of China’s Nobel-Prize winning novelist – Wei Yi, trans. Chenxin Jiang

On the afternoon of 12 October 2012, Mo Yan appeared at a press conference in a hotel meeting room that has since become famous worldwide. The hotel was in Gaomi, Mo Yan’s hometown, a small city in Shandong province in northeast China. Mo Yan was still wearing the same lilac dress shirt he’d been wearing the night before...

At the conference, Mo Yan looked calm and unruffled as he answered every question put to him. He had a red string ornament in his left hand, and towards the end of the press conference he lifted his hand and gently pushed aside his sleeve to check the time on his watch. Yet if it were possible to travel in time back to another occasion on which Mo Yan spoke in public, in February of 1976, these two scenes would present a significant contrast.


Business, Economy and Trade

China’s Services Sector Grows at Slowest Clip in Five Months: Caixin PMI - Caixin Global The Caixin China General Services Business Activity Index, which provides a snapshot of operating conditions in the country’s services sector, edged down to 51.6 in July from 52 in the previous month...The Caixin China Composite Output Index, which covers both manufacturers and services providers, inched up to 50.9 in July from 50.6 in the month before, thanks to a broad stabilization in the manufacturing sector.

All but one of China’s provincial level governments ran deficit at start of 2019, raising further funding fears | South China Morning Post Shanghai was the only authority that ran a surplus financial position in the first six months of the year.

China plans to drop all duties at Shanghai Free-Trade Zone, sources say | Reuters China is planning a pilot project to drop all duties and ease procedures at Shanghai Free-Trade Zone, three sources said, as Beijing looks to position itself as a leader in free trade amid its trade war with the United States.

China nudges top tech firms from Tencent to Alibaba to give new life to struggling state giants | South China Morning Post Internet companies such as Tencent were being encouraged to forge stronger ties with state firms, Chinese media quoted Hao Peng, Communist Party boss of the country’s assets watchdog, the State-owned Assets Supervision and Administration Commission (Sasac), as saying. Sasac directly supervises more than 50 trillion yuan (US$7.2 trillion) of state assets.

Restructuring Bank of Jinzhou Gets New President From New Investor ICBC - Caixin Guo Wenfeng, currently a vice president of ICBC’s provincial branch in Northeast China’s Liaoning province, will begin his new role as soon as the change wins regulatory approval

As Flex Pares Huawei Business, Manufacturer Suspends Second Factory - Caixin As Flex Ltd. continues to pare down its business with embattled Chinese telecom giant Huawei Technologies Co. Ltd., it has suspended more of its manufacturing capacity in China and laid off thousands, a source close to the American tech manufacturer told Caixin.

China Prepares to Allow Investors to Buy Xiaomi, Meituan Shares - Bloomberg The country’s stock exchanges on Friday published draft regulations that would bring stocks with different classes of voting rights into the trading links between the mainland and the former British colony, giving onshore traders access to some of China’s hottest startups.

Politics and Law

Senior CPC official visits outstanding experts - Xinhua Entrusted by Xi Jinping, general secretary of the CPC Central Committee, Chen Xi, a member of the Political Bureau of the CPC Central Committee and head of the Organization Department of the CPC Central Committee, extended greetings and good wishes to the experts in Beidaihe, as well as all other experts in various fields across the country.

Chinese rights lawyer Chen Jiangang flees to US to escape ‘persecution’ in China | South China Morning Post Lawyer Chen Jiangang, his wife and two children arrived in New York on Saturday, Bob Fu, founder and president of human rights group ChinaAid, said on his Twitter account. “Thanks to the help of more than 50 brothers and sisters, lawyer Jiangang and his family have finally made their arduous journey through several countries and arrived in the land of freedom, the USA,” Fu wrote.

Anthology of feature stories on Xi's attendance in key events published - Xinhua Comprised of two volumes, the book, themed the new practice in the governance of China, is a collection of 129 feature stories and 240 photos released by Xinhua News Agency on Xi's attendance in important events between the 18th CPC National Congress in 2012 and the 19th CPC National Congress in 2017.

Senior CPC official stresses promoting spirit of veteran war hero - Xinhua A senior official with the Communist Party of China (CPC) has called for the promotion of the revolutionary and dedicated spirit of 94-year-old veteran Zhang Fuqing. Huang Kunming, a member of the Political Bureau of the CPC Central Committee and head of the Publicity Department of the CPC Central Committee, made the remarks on Thursday while meeting with speakers who gave a public lecture on Zhang's meritorious deeds at the Great Hall of the People on Wednesday.

Why Chinese officials like useless meetings in over-stuffed chairs - Chaguan It says something sobering about present-day China that sales of the armchairs used in horseshoe-shaped meeting rooms have risen steadily over the past 20 years. Surprisingly often, the armchairs used for such meetings are made by a single company, Tiantan (or Temple of Heaven) Furniture, founded in 1956 and owned by Beijing’s city government. Business is good, says the firm.

河北省人大代表孙翔被曝双重国籍, 唐山市人大:正在按程序处理 The Chongqing Daily reported that a National People’s Congress delegate from Hebei turns out to have the citizenship of Saint Kitts and Nevis, a Caribbean country.

Foreign and Defense Affairs

Xinhua Headlines: Xiplomacy fosters more solid ties, promising common prosperity - Xinhua Since the start of the year, Xi has made five overseas visits and attended four multilateral gatherings in eight countries to forge broader consensuses and closer partnerships for jointly building a community with a shared future for mankind. *While protectionism and fierce global competition for resources have diverted some economies' attention from making a bigger cake to wrestling for a larger slice, Xiplomacy staunchly advocates common efforts to create more shared interests.

人民日报:乱云飞渡仍从容——书写中国外交新华章之坚持多边主义篇 People’s Daily series praising Xi’s diplomacy. This one is about how China has been a champion of multilateralism when the world needs it the most. 

人民日报:惟其勇毅笃行,方显英雄本色 People’s Daily front page on Saturday reprinted Xinhua’s earlier article praising Xi’s diplomacy in 2019, by framing Xi as a “hero” that champions globalization and multilateralism, which it said benefits people in China and the whole world. 

Mike Pompeo urges Australia to stand up for itself over trade with China | The Guardian The US secretary of state Mike Pompeo has declared “you can sell your soul for a pile of soy beans, or you can protect your people”, dismissing a warning from prominent Australian security analyst Hugh White that Australia should avoid following Donald Trump into a confrontation with Beijing that America probably can’t win.

Commentary: Anyone can fall victim to Washington's bullying - Xinhua When U.S. Secretary of State Mike Pompeo visited Australia for the annual Australia-United States Ministerial summit, he, unsurprisingly, attacked China once again on the issues of the South China Sea and the Belt and Road Initiative. "We also stand firmly against a disturbing pattern of aggressive behavior, destabilizing behavior, from China," he said.
t is laughable to hear a thief crying "catch the thief."

Secretary of State Michael R. Pompeo and Secretary of Defense Mark Esper, Australian Minister of Foreign Affairs Marise Payne, and Australian Minister of Defense Linda Reynolds at a Press Availability - United States Department of State Moving beyond economics, we Pacific powers agree it’s important to shine sunlight on bad behavior, however and whenever it occurs.  Australia courageously and independently raised the alarm about the risk of China’s 5G ambitions even before we caught on.  We’re both concerned about China’s militarization of their man-made islands in the South China Sea, and we’re both keeping an eye on investment that mires our friends in debt and corruption.

Australia and the United States: An Alliance for the Future - United States Department of State Provide principles-based, sustainable and inclusive infrastructure in the Indo-Pacific, including through the Australia-Japan-US Trilateral Infrastructure Partnership. Following the successful trilateral mission to Papua New Guinea, both sides intend to support a Trilateral Infrastructure Partnership mission to Southeast Asia in the second half of 2019...Enhance critical mineral supply chain resilience by holding a Australia-US Critical Minerals Dialogue, in Washington DC, to be preceded by stakeholder engagement in Perth...

U.S. seeks to renew Pacific islands security pact to foil China - Reuters U.S. Secretary of State Mike Pompeo said on Monday negotiations have begun with three Pacific island nations to renew a national security agreement that would help Washington counter growing Chinese influence in the region.

PLA teams prepare for "Aviadarts" competition in Russia - China Military All aircraft of the PLA naval aviation troops participating in the "Aviadarts-2019" international competition of the International Army Games 2019 have arrived at the Dyagilevo military airport in Ryazan Oblast, Russia for pre-competition warm ups.

Stop interfering in NZ's internal affairs: Act Party Leader to Chinese Consulate General - NZ Herald Act Party leader David Seymour has sent a strongly worded letter to the China Consulate General in Auckland, accusing it of interfering with New Zealand's internal affairs. The Consul General released a public statement last week condemning Hong Kong democracy protests at the University of Auckland and praised students who confronted protesters for their "spontaneous patriotism".

In the “New Era,“ the PLA is Xi's Army - Elsa Kania The continued emphasis on Xi Jinping as the “core of the Party Central Committee” (党中央的核心) is noteworthy insofar as no prior defense white paper has included such an individual endorsement of a Party leader. This document reinforces the commitment of the PLA to strengthen “core consciousness” (核心意识) and “alignment consciousness” (看齐意识). The reaffirmation of the “CMC Chairman responsibility system” (军委主席负责制) in the course of the reforms not only reiterates a frequent feature in CCP propaganda dating back to late 2014 but also reinforces a significant recalibration of power that has evidently elevated Xi’s personal authority.

Indian external affairs minister to visit China - Xinhua India's Minister of External Affairs Subrahmanyam Jaishankar will visit China from Aug. 11 to 13 and co-chair the second meeting of the China-India high-level people-to-people exchanges mechanism

副部級大使大調整 Interesting report on the recent reshuffling of CHina's most senior ambassadors. Ambassador to the US Cui Tiankai certainly seems overdue for a return to Beijing

Defying U.S. Sanctions, China and Others Take Oil From 12 Iranian Tankers - The New York Times To really tighten the screws on China, the Trump administration would need to punish the People’s Bank of China or other Chinese banks that engage in transactions with the Central Bank of Iran, Mr. Nephew said. The United States could also penalize the energy giant Sinopec, which, like Zhuhai Zhenrong, also imports oil from Iran. But sanctioning the banks or Sinopec would have far-reaching consequences for global trade and deepen the divide between Washington and Beijing.

US identifies Chinese tankers carrying Iranian oil | Financial Times $$ The Trump administration is tracking the movement of tankers linked to China’s biggest state-run oil company amid signs that the vessels are helping to transport Iranian crude to China in defiance of US sanctions against Tehran.

Beijing bars German human rights critic from lawmakers’ technology trip to China | South China Morning Post 

Tech and Media

China Becomes Largest Export Market for European Films – Variety esearch results released Monday show that China accounted for 37% of all admissions to European films outside of Europe itself. At the same time, the number of tickets sold to European movies in North America dropped from 29.8 million to 27.1 million in 2017, or 28% of the total

Promotions and patriotism: 'Battle Mode' Huawei sees China smartphone sales surge - Reuters Analysts say Huawei has also been transferring unsold smartphone stock from other regions to China and even offering some rare discounting in its home and overseas markets as it seeks to offset sales declines in Europe and the United States.

'Homeland Dream': Chinese gaming giants unveil titles that play up patriotic values - Reuters Titles showcased at China Digital Entertainment Expo and Conference, known as ChinaJoy, ranged from ones that promoted domestic culture to others that recounted the country’s history, such as Shengqu Games’ “Codename: South China Sea”, which allows users to run a coastal town set in the Ming Dynasty. Tencent said it was collaborating with state newspaper People’s Daily to roll out a new game, “Homeland Dream”, and with the propaganda department of the Communist Party’s Guangdong arm on a title called “Story of my Home”.

Didi, Baidu lay off employees in anti-graft campaign · TechNode China’s largest search engine Baidu and ride-hailing platform Didi have beefed up their anti-graft campaigns, dismissing more than 40 employees and reporting wrongdoings to the police.

Fan Bingbing, China’s Top Actress, Talks of Comeback After Scandal - The New York Times “No one can have smooth sailing throughout the journey,” Ms. Fan said, her aphorism voiced with a calm — if perhaps practiced — resignation during a rare interview, the first to touch on the scandal since it erupted.

The Longest Day in Chang’an – hit Chinese web series makes it to Amazon Prime Video | South China Morning Post Pop star Jackson Yee takes one of the lead roles and shines in the suspense drama that is set during the Tang dynasty

Leaked Email Details Corruption Cases at Chinese Internet Giant - Caixin Global Fourteen people have been dismissed amid 12 separate investigations that include allegedly accepting bribes, stealing commercial secrets, and submitting fraudulent expenses, according to an email dated July 31 from Baidu’s professional ethics committee that was subsequently verified by Caixin. The email said that the incidents took place recently but did not specify further.

NetEase targets Tencent with RMB 5 billion e-sports stadium in Shanghai · TechNode 

Tencent-Backed Short Video App Kuaishou Bets on Game Streaming to Boost Revenue- PingWest 

Society, Arts, Sports, Culture and History

Dog walking banned in Beijing city parks - China Daily The Beijing Gardening and Greening Bureau published a blacklist of uncivilized behaviors in public parks, adding activities such as walking pets, making loud noises, digging wild vegetables or fishing.

Washington Capitals: Alex Ovechkin arrives in China Alex Ovechkin’s trip to China serves as a purpose as well, as the “Great 8” was selected by the National Hockey League to serve as their international ambassador for the trip. The Washington Capitals forward will take part in some youth on-ice clinics, business development meetings, a media tour and more.

The Forbidden City Opens Wide as China Projects New Pride in Its Past - The New York Times 

Energy, Environment, Science and Health

Scientists are making human-monkey hybrids in China - MIT Technology Review According to the newspaper, the Spanish-born biologist Juan Carlos Izpisúa Belmonte, who operates a lab at the Salk Institute in California, has been working working with monkey researchers in China