Risk seminar concludes; China's Venezuela mess; Apple-Qualcomm dispute continues; Bing is back

Happy Thursday, here are some of the things on my radar today:

  • My neck hurts from all the US-China trade talks whiplash. I wish everyone could chill out but that is not how the markets work. Be wary of leaks and “scoops”, what matters next is the the Liu He visit next week. The two sides are still far apart, but there are also 35 days until the March 1 deadline and I don’t expect any deal will truly happen until Trump and Xi meet again;

  • The seminar on risks concluded on January 24. I had not realized it was four days long, certainly a sign of the intensity of concerns;

  • Venezuela may be a nightmarish mess for China. Beyond all the money the country owes China the political turmoil touches several CCP neuralgic points, from popular protests to external pressure, and especially now when Beijing is so clearly concerned about the mounting risks in 2019;

  • The PRC government has confirmed that it has detained Australian-Chinese writer Yang Hengjun on suspicion of endangering Chinese national security. Yang has a complicated background and the waters around this case may be quite deep and murky;

  • Microsoft’s Bing search engine was inaccessible for a bit but now is back. There are contrasting reports that it was an intentional move or a technical error. Regardless, it is sad that anyone has to care about Bing but such is the state of the Chinese Internet (ChiComNet as I like to call it, and which seems increasingly apt…).

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The Essential Eight

1. Seminar on risks concludes

The seminar on risks for senior cadres concluded January 24. CCTV reports that Wang Huning gave the closing speech...so 4 days talking risks and how to prevent and mitigate them, they really are preparing for a difficult 2019--省部级主要领导干部坚持底线思维 着力防范化解重大风险专题研讨班结业 王沪宁出席结业式并作总结讲话_CCTV 

The 4th in the People's Daily commentary series on the risks seminar, this one exhorting officials to have political responsibility and always maintain their "struggle spirit"--人民日报评论员:扛起政治责任,永葆斗争精神——四论学习贯彻习近平总书记在省部级专题研讨班上重要讲话 

There should be a Politburo meeting before January 30 but I don't expect a 4th Plenum until we are into the Year of the Pig.

2. US - China

How to 'win' in the U.S.-China trade war - POLITICO:

TRUMP OFFERS SOME CHINA OPTIMISM: Trump signaled on Wednesday that he is pleased with where U.S.-China talks are headed, just a week before high-level meetings led by Lighthizer and Chinese Vice Premier Liu He.

“China very much wants to make a deal. We'll see what happens. I like where we are right now,” Trump said, according to a pool report.

Wilbur Ross: The US is 'miles and miles' from a trade deal with China - CNBC:

“Frankly, that shouldn’t be too surprising,” Ross said in a “Squawk Box ” interview. The U.S. and China have “lots and lots of issues,” Ross continued, and the Trump administration will need to create “structural reforms” and “penalties” in order to resume trade relations with Beijing.

“We would like to make a deal but it has to be a deal that will work for both parties,” he said. “We’re miles and miles from getting a resolution.”

Ross listed the sticking points the negotiations, starting with what he calls America’s “intolerably big trade deficit” with China.

Trump's outside China advisor says there will not be a breakthrough in trade talks soon - CNBC:

“Over the last 45 years, a lot of American presidents have negotiated with China,” Pillsbury said in response to a question about the meeting. “And there are some patterns to what has gone on. One of them is that the Chinese prefer to make a last-minute deal, to get the best deal they can. So I am not among those who think there is going to be a breakthrough in the next few days.”

Comment: Agree, and expect the Chinese to push hard for a Trump-Xi meeting before March 1, and if they meet expect the Chinese, just when Trump thinks they are done, to ask for Meng Wanzhou back...

China, US to carry out planned trade talks - China Daily:

China and the United States will have an in-depth negotiation on economic and trade issues during Vice-Premier Liu He's visit to Washington between Jan 30 and 31, the Ministry of Commerce said on Thursday.

The two sides have been in close contact pushing forward high-level trade talks, said ministry spokesperson Gao Feng.

The recent report that claimed US officials canceled a vice-ministerial meeting with China scheduled for this week was untrue, Gao said at a press conference.

Trade War Continues Despite China Pledge to Buy More U.S. Wheat - Bloomberg:

Promises to purchase U.S. cereal crops might look encouraging. But this is mostly a negotiating tactic with little substance.

China Resists U.S., EU Talks on Global Digital Trade Deal, Sources Say:

“We are not convinced that China is prepared to move in that direction on critical issues such as cross-border data flows, or that its political system can really embrace open digital trade at this time in its development,” said Rufus Yerxa, president of the Washington, D.C.-based National Foreign Trade Council. “Until this is the case, it is probably better not to have them inside the group working against those goals.”

Speaking in Davos on Tuesday, Zhang Weiwei, dean of the China Institute at Fudan University, said Chinese leaders had long appreciated the commercial potential of the Internet but remained concerned over what they saw as a Western obsession with the Internet as a tool to spread democracy. “China sees this as a double-edged sword,” he said.

3. Yang Hengjun's detention

China confirms Australian writer Yang Hengjun under investigation for endangering national security - The Washington Post:

Chinese officials said Thursday that the Australian writer Yang Hengjun was being held on suspicion of endangering Chinese national security...

Australian Foreign Minister Marisa Payne downplayed the possibility that an Australian citizen was the latest to become ensnared in the increasingly bitter row between Beijing and Western countries.

“At this stage there is no evidence of such a connection” between Yang’s detention and Australia’s criticism of China’s detention of the Canadians, Payne told reporters Thursday. “I’d be concerned if there was an indication of that.”

Yang Hengjun: Friends believe writer has been charged with espionage - The Australian:

Foreign Ministry spokeswoman Hua Chunying on Thursday he had been arrested by Beijing Municipal Sate Security Bureau and was suspected of “endangering state security”.

Mr Yang’s friend, University of Technology Professor Feng Chongyi said Mr Yang’s family has employed Chinese lawyer Mo Shaoping to assist with the case.

Dr Feng said Mr Mo had told him today that Mr Yang was being held in “residential surveillance at a designated location”.

China Says Australian Writer Is Suspected of National Security Crimes - The New York Times:

Mr. Yang, who worked for the Chinese Foreign Ministry before setting out on his own as a novelist and commentator, became an Australian citizen in 2002. After migrating, he remained an influential voice in China with a large internet following. He has used his online presence to offer lectures, current affairs commentaries, advice on migration to Western countries and online sales of health supplements while also staying within the bounds of official acceptance.

Critics say that even as he cast himself as an independent voice, Mr. Yang went out of his way to soothe the Chinese government. He has spent the past two years with his family in New York, where he was a visiting scholar at Columbia University.

China says Australia writer held on national security charge - AP:

A friend of Yang’s, University of Technology Sydney academic Feng Chongyi, said he had warned Yang against traveling to China in light of the Canadians’ arrest. Yang had argued that he was safe because he had flown to China several times since taking the university job in New York in 2016.

“I told him the situation had changed. He didn’t believe me. It was a horrible misjudgment,” Feng said.

Comment: One thing that has changed clearly is that the security services are even more empowered....

Foreign Ministry confirms detention of Australian - China Daily:

"China has officially informed the Australian embassy in China about this case," ministry spokeswoman Hua Chunying told a regular press conference in Beijing.

According to Hua, it is an operation taken by the Beijing State Security Bureau in accordance with law.

"The case is still under investigation, and the legitimate rights and interests of Yang have been safeguarded," she said.

West should report detention professionally - Global Times:

Some people in the West have been propagating that China is capturing foreigners at its will as a response to the pressure piled on it by the outside world. Part of their aim is to put more pressure on China while badmouthing the environment of China’s opening-up, creating an impression that China is becoming increasingly insecure for foreigners.

It is impossible for China to arrest foreigners for no reason. At this point of time, it is even more ridiculous to randomly seize an Australian out of political motives. It is clear now that Yang’s case is a legal case, not a political action and has nothing to do with geopolitics.

'Silent Contest' silenced - Global Times:

The film has made a wave among many Weibo celebrities, including Ran Xiang, a vocal advocate against the call for multi-party democracy and the introduction of Western values in China, Cai Xiaoxin, a military history researcher, Dai Xu, an air force colonel and military strategist, and Sima Nan, a Maoist scholar...

Ran Xiang called on her Weibo to "tighten publicity" and "fully support those people who are attacked for upholding the truth" when "facing increasingly aggressive forces of anti-China, penetration and subversion."

Comment: Yang's wife was connected to the infamous "Ran Xiang染香" Weibo account, several overseas Chinese say, including Wen Yunchao:

And Zhou Fengsuo notes Yang's "complicated and controversial past":

None of the above in any way defends his detention, just wanted to point out that the waters around this case may be deeper and murkier than they appear.

That 2013 film "Silent Contest" is worth revisiting in 2019. Far from a fringe, nationalist production, it increasingly looks like Xi's blueprint...

Wikipedia on Silent Contest 

Apologies: The article My friend, the writer who 'disappeared' - John Garnaut included in yesterday's newsletter is from 2011. I should have noted that. 

4. China - Canada

How Meng Wanzhou’s ‘P’ passport works | The Star:

The public affairs passport issued to Huawei CFO Meng Wanzhou is normally reserved for public employees, and would have granted visa-free travel to countries around the world, according to a Chinese academic who holds one herself.

Jie Cheng, a lecturer at the University of British Columbia’s Peter A. Allard School of Law and an associate professor with Tsinghua University Law School in Beijing, uses hers for short-term trips abroad from China, although she uses her personal passport to get into Canada because she has a work permit..

Meng’s passport, which is distinctive because its serial number starts with the letter P, was not among seven listed in BC Supreme Court records as part of her December bail hearing.

Prepare for protracted game over Meng - Global Times:

Meng's case has set an execrable precedent. Beijing's reaction will shape the world's understanding of China's national strength and will. Beijing must not be furious or cowardly.

We should take corresponding actions step by step in resolute and orderly manner, and show the world that Chinese are with reason and with restraint.

Any countries and forces that persecute Chinese citizens and infringe on China's interests will pay a heavy price.

5. China's Venezuelan nightmare/pesadilla/噩梦

Wary China offers support to embattled Venezuelan President Nicolas Maduro | South China Morning Post:

Chinese foreign ministry spokeswoman Hua Chunying called on “all parties to remain rational and keep calm, and reach a political settlement through peaceful dialogue”.

Asked directly if China recognised Maduro, Hua said Beijing sent representatives to his inauguration. “We respect Venezuela’s efforts to uphold its sovereignty, independence and stability,” she added.

“China opposes foreign forces from interfering into Venezuela affairs.”

Venezuela crisis watched by China immigrants who fled chaos with anxiety – and hope | South China Morning Post:

China, the country’s largest foreign creditor, continues to back the Maduro regime, but the mood among Chinese immigrants, whose dreams for happiness and prosperity in Venezuela were smashed by hyperinflation and social unrest under his rule, are mixed.

China-Venezuela Relations: A Perfect Storm - Carnegie-Tsinghua Center - Matt Ferchen September 2018:

the question of how China should understand and manage political risk in Venezuela has become one of the most important, if too often ignored, questions not just in China’s relationship with Latin America, but in its broader efforts to be seen as an agent and leader of development on the world stage. This relationship of superlatives (Venezuela has the world’s largest oil reserves, China is the world’s largest oil importer, China has lent more money to Venezuela than any other country in the world, etc.) and larger-than-life personalities (at least on the Venezuelan side) has long since become a debacle. And while Venezuela’s deepening economic and humanitarian crisis has attracted global headlines and concern, China has neither acknowledged its role and interests in Venezuela’s crisis nor sought to address the plight of the closest country it has to an ally in the Americas.

How did this dysfunctional relationship come about and what does it tell us about China’s ties with Latin America and its even more high-profile efforts at global development and South-South leadership?..

China-Latin America Finance Database -  according to this database Chinese loans to Venezuela total 62.2B USD, though Matt Ferchen says the outstanding amount is lower:

When Investment Hurts: Chinese Influence in Venezuela | Center for Strategic and International Studies April 2018:

China’s involvement in Venezuela stems from President Xi Jinping’s plan to extend Chinese influence internationally. In the wake of China’s global ambitions, it has taken advantage of a collapsed, cash-strapped Venezuela to sign one-sided financial agreements. Inspired by state-dominated economic systems, both Hugo Chavez and Nicolas Maduro welcomed China’s financial support to fuel their “socialism of the 21st Century.”

There are four main issues that should concern the United States regarding China’s role in the Maduro-ruled Venezuela: (1) China is propping up Maduro’s undemocratic and repressive narco-regime; (2) China’s investments fail to bring long-term benefits to Venezuela; (3) Chinese loans and agreements are not transparent and in some cases are illegitimate; and (4) China’s agreements create energy and security concerns.

U.S. Ban May Offer China and India Feast of Cheap Venezuelan Oil - Bloomberg:

If the U.S. decides to deploy a slate of sanctions that it’s said to have drafted against the Latin American nation, American refiners -- the No. 1 consumer of Venezuelan crude exports -- would be forced to cease purchases. That may mean more supply becomes available for the OPEC producer’s other big customers: China and India.

6. Bing.cn was blocked but now is back

China Is Said to Block Microsoft's Bing Due to Technical Error - Bloomberg:

Microsoft Corp.’s search engine Bing was blocked in China due to an accidental technical error rather than an attempt at censorship, according to people familiar with the matter.

The government had no intention to block Bing but it’s unclear when the service will be restored, according to two people with knowledge of the matter who asked not to be identified discussing confidential information.

Microsoft’s Bing search engine blocked in China | Financial Times $$:

On Wednesday, mainland Chinese users wrote on social media that their attempts to access Bing’s China site, cn.bing.com, were failing. Cn.bing.com is still accessible from outside of China. Microsoft said that it was investigating the situation.

Two sources familiar with the government order confirmed that Bing had been blocked. One of the sources explained that China Unicom, one of China’s major state-owned telecoms companies, had confirmed the government had ordered a block on Bing.

Comment: Microsoft owns Github as well as Bing...any chance someone got mad at Microsoft because of the posting to Github a few days ago detailing the "confessions" of the student Marxist activists (NYT - China Using Taped Confessions to Intimidate Young Communists, Students Say)? Blocking Github would cause much more of an uproar than blocking Bing.

From Monday’s newsletter:

The criticism of the videos on was posted Github一评“认罪视频”:演技拙劣无能,可笑自导自演 – 佳士工人声援团官网 – 同战斗,共进退! Is Github still unblocked by the GFW? If so, for now much longer? Microsoft bought Github last year, will Beijing pressure the company to censor this?

So far Github remains unblocked.

Or could the temporary block be related to the latest Baidu uproar? The GFW works in mysterious ways, so we are left to speculate…

China Appears to Block Microsoft’s Bing as Censorship Intensifies - The New York Times:

Blocking Bing would brick over one of the last holes in a wall of online filters that has isolated China’s internet from the rest of the world. Although not widely used in China, Bing has remained an option of last resort for some in China looking for an alternative to the dominant local search engine, Baidu. While it continues to dominate search traffic in China, Baidu has been at the center of complaints about poor search results and advertisements for questionable medical treatments.

Earlier this week, a former journalist, Fang Kecheng, accused Baidu of largely returning search results that were links to its own products instead of those from external sites. The accusation, which Mr. Fang posted on social media with the headline “Baidu the Search Engine is Dead,” went viral in China...

In an interview, Mr. Fang said the Chinese internet was developing into a series of walled gardens, rather than the sprawling forum for ideas that makes online life appealing to many...

Mr. Fang, the former journalist, said he had mixed feelings about a Google re-entry, noting that it would be good for Chinese who want a better search engine, but also that it would normalize censorship.

“I feel people in the West can say from their point of view that they are totally against Google coming back, as they have nothing to do with China,” he said. “But as someone who truly wishes that Chinese are able to get better-quality information, I can’t 100 percent stand against it.”

Fang's post - 搜索引擎百度已死--方可成 

Public vents anger over Baidu search results - Global Times:

Chinese internet users complained about the country's search engine giant Baidu on Wednesday, claiming that a large proportion of Baidu's own products and services appear in search results on its website and calling for Google's return to the Chinese mainland market.

Public anger arose after an article titled Baidu is Dead, written by former Chinese journalist Fang Kecheng, went viral on Chinese social media on Tuesday night. The article said that unreliable information and Baidu's own products and services accounted for a large amount of content in the search results.

The company announced on Wednesday that only 10 percent of the search results represented content from its product called Baijiahao, which picks articles from the 1.9 million official and independent content creators in China. The company will improve the media aggregation service to provide content of better quality for its users, it said.

7. Huawei's troubles

U.S. Believes It Doesn’t Need to Show ‘Proof’ Huawei Is a Spy Threat - WSJ:

“If they believe there’s a backdoor, they should offer evidence to prove it,” Liang Hua told reporters on the sidelines of the World Economic Forum in Davos, Switzerland, this week.

But the U.S. says that Huawei’s very structure, with its close ties to the Chinese government and role as a supplier of key hardware in telecommunications, makes the company a potential tool for espionage and thus a security threat, according to current and former U.S. security officials...

U.S. intelligence officials have suggested at times that their views on Huawei are informed by definitive examples of malfeasance, though they have so far refused to share such evidence publicly.

U.S. universities unplug from China's Huawei under pressure from Trump | Reuters:

Top U.S. universities are ditching telecom equipment made by Huawei Technologies and other Chinese companies to avoid losing federal funding under a new national security law backed by the Trump administration..

The University of California at Berkeley has removed a Huawei video-conferencing system, a university official said, while the UC campus in Irvine is working to replace five pieces of Chinese-made audio-video equipment. Other schools, such as the University of Wisconsin, are in the process of reviewing their suppliers.

UC San Diego, meanwhile, has gone a step further. The university in August said that, for at least six months, it would not accept funding from or enter into agreements with Huawei, ZTE Corporation and other Chinese audio-video equipment providers, according to an internal memo. The document, reviewed by Reuters, said the moratorium would last through February 12, when the university would revisit its options.

Huawei Stokes U.S. Fear With Low-Cost Networking Gear That Works - Bloomberg:

China’s largest tech company makes high-quality networking gear that it sells to rural telecommunications operators for 20 percent to 30 percent less than its competitors do, says Joseph Franell, chief executive officer and general manager of Eastern Oregon Telecom in Hermiston, a watermelon-growing hub of 18,000 people. Huawei’s equipment has helped some two dozen U.S. telecom companies provide landlines, mobile services and high-speed data to many of the poorest and most remote areas in the country. Some of these companies have received federal subsidies, but not Franell’s, which was spun out to senior management last year by the electric cooperative that founded it in 1999. Huawei makes the magic happen.

“Their equipment is very, very good,” says Franell, who chairs the Oregon legislature’s Broadband Advisory Council. “We haven’t found equivalent equipment on the market.”

Huawei reveals 5G modem and base station chips | TechRadar

Huawei’s plans to support the rollout of 5G networks have accelerated with the launch of new modem and base station chips that it says will ease deployment and enable a wider range of applications.

8. The Apple-Qualcomm dispute is far from over

Qualcomm has mounted a campaign to convince the Chinese courts, regulators and the media that Apple is disrespecting a court judgement. Caixin has dueling interviews from senior legal officers of the two firms.

Apple Chief Counsel Accuses Qualcomm of Holding Phone-Makers for ‘Ransom’:

I think in an effort to influence the court, they’re making misleading statements about our compliance with the injunction in Fuzhou. Right after Apple was served with the rulings in Fuzhou, we immediately identified impacted units, phones that had the operating system that was accused of infringement. We didn’t know about this preliminary injunction, we didn’t have the full chance to defend against it. But we removed them from sale in all our retail stores, except for the phones that were manufactured by Pegatron because Pegatron has a license. (Editor’s note: Taiwan-based Pegatron Corp. is one of the contractors that assemble iPhones. Since Pegatron has a license, it isn’t subjected to the injunction.)

Qualcomm Hits Back at ‘Disrespectful’ Apple, Saying it Flaunts Chinese Law:

Qualcomm Inc. has hit back at Apple Inc., accusing the latter of failing to comply with an injunction issued by a Chinese court that banned the sales of certain iPhones in the market.

In an exclusive interview with Caixin, Mark Snyder, the chip giant’s patent counsel and senior vice president, rejected Apple’s claim it has complied with the court’s ruling and denied accusations that Qualcomm has threatened to cut off chip supplies during negotiations over the payment of licensing fees.

His comments came after Apple’s chief litigation counsel, Noreen Krall, told Caixin last week that the chipmaker was holding smartphone-makers to “ransom” through the bundling of patent fees with chip sales, and that Qualcomm’s claim Apple hadn’t complied with the sales ban is “misleading.”

Business, Economy, Finance And Trade

Procter & Gamble isn't seeing a slowdown in China - CNBC Apple and McDonald’s are seeing sales in China soften because of the country’s slowing economy, but that’s not the case for Procter & Gamble. “We do not see a slowdown in China as witnessed by those results,” CFO Jon Moeller said Wednesday on a conference call with analysts.

China's Gen Z Teenagers Spend More and Worry Less Than You Do - Caixin Global They are confident, carefree and spend over $7,000 a year on luxury goods - even before they turn 21. Meet China’s Generation Z. Spoiled by parents and grandparents for being the only child in their families, these youngsters are living it up compared to their cautious, conservative peers in the West, according to a new survey. They are pumped up about the future and not worried about their career prospects or international politics, notwithstanding a trade war at their doorsteps.

Anbang Suspends Plan to Sell Bank Stake for $2.44 Billion - Caixin Anbang, the embattled Chinese financial conglomerate, withdrew the listing of its 35% stake in Chengdu Rural Commercial Bank on the Beijing Financial Assets Exchange, according to a statement Wednesday by the exchange. The government took over Anbang last year after its founder was imprisoned on fraud and embezzlement charges. The statement was subsequently deleted from the exchange’s website, but any listing information on the bank’s shares was also taken down. Anbang listed its stake for sale on Dec. 12, 2018. The listing period was supposed to end Jan. 9, though the offering could be extended on the same terms.

Inside Quanjian: The Alleged Pyramid Scheme Blamed for a Toddler's Death - Caixin Touting questionable products like magnetic insoles and “negative-ion” sanitary pads, Shu Yuhui built a business empire that brought in an annual revenue of 19.2 billion yuan ($2.82 billion) at its peak and included hospitals, a traditional Chinese medicine theme park and a professional soccer club. All that came to an end in December, when a viral article published by Chinese medical news site Dingxiangyuan alleged a 4-year-old with cancer had died in 2015 after taking herbal products advertised by Shu’s Quanjian Group as cancer cures. Police began investigating the company on Jan. 1, and eighteen suspects from Quanjian, including Shu, have since been detained, accused of crimes ranging from false advertising to organizing a pyramid scheme.

China Flashes Green Light for New High-Tech Board - Caixin The launch of the high-tech board will diversify China’s capital market, push forward market supervision reform, improve financing availability for smaller businesses and promote the country’s technology development and economic transformation, said investment bank China International Capital Corp. (CICC) in a report. CICC said it expects the new board for the first time to allow pre-profit tech startups and companies with weighted voting rights to list. The new board may also relax current daily trading limits applied on China’s main boards, CICC said.

Headlines about China’s weak growth are somewhat misleading - Economist the sheer size of its economy means that China’s growth last year generated a record amount of new production. Nominal GDP increased by 8trn yuan ($1.2trn), well above the 5.1trn yuan added in 2007, when it notched up 14.2%, its fastest growth rate in recent decades. The point is simple—China is now growing from a much larger base—but it was overlooked in the flurry of headlines about its slowdown

Tencent Poised to Disrupt Australian Banking Sector - Caixin WeBank, which is valued at $21 billion and has written more than 100 million loans in its first five years in business, quietly began laying the foundations for its Australian digital-only banking venture with a flurry of trademark applications on Dec. 5 last year. With the aid of Adelaide-based legal firm KHQ Lawyers, WeBank is seeking to trademark the phrase "WeBank" and a series of Chinese characters that can be translated into English as "microloan". The application lists the Chinese company's Shenzhen headquarters as the owner of the trademark.

Bank of China Readies First Perpetual Amid Capital Pressure - Bloomberg The bank is looking to issue as much as 40 billion yuan ($5.9 billion) of perpetual bonds to replenish additional tier 1 capital, it said in a filing. China’s financial regulators last year called for more innovative capital instruments to expand funding channels for banks in order for them to boost support to the real economy.

Alibaba CEO: China can build a self-sufficient market of 1 billion consumers helped by low debt burden - Business Insider Speaking at the World Economic Forum, Alibaba CEO Daniel Zhang said the trade war wouldn't detract from the fact foreign companies would always want to access China's market of one billion consumers. Beginning diplomatically, Zhang said: "From China's side, most Chinese people want... a better resolution between the two countries. People realise that these two largest economies create value and benefit for people all round." But he continued by saying China had "other opportunities."

Caixin Explains: Why It’s So Hard To Kill Zombies in China To understand why these firms still survive, just look at where most of them are lurking: state-dominated heavy industries like coal, steel, cement, and glass. These are big employers, especially in China’s northeastern rustbelt, and also the traditional drivers of the country’s economic growth. Putting them to rest means the local economy’s GDP figures could take a hit — and, after mass layoffs, potentially social stability too. It’s no surprise then that career-minded local officials are loath to let these firms die.

Investment Group Sees Bond Plunge on Liquidity Fears - Caixin A plunge in the bonds of China Minsheng Investment Group Corp. Ltd. (CMIG) on Wednesday sparked by default fears is the latest scare to hit the world’s second-largest debt market, as the government’s campaign to curb leverage exposes companies that overextended themselves in the good times.

Politics, Law And Ideology

“三圈书记”赵正永:为了挤进他的圈子,众多官员和商人苦练球技_陕西省委 A very detailed profile on Zhao Zhengyong. Some interesting points: always followed by entourage wherever he went; believes in Buddhism; implies that Zhao is also connected to the missing dossier case at the Supreme Court; Loves tennis, lower level cadres and entrepreneurs have to play tennis with him to get promoted; Appears to confirm that he was the principal leader who didn’t appear in the CCTV documentary

中国纪检监察报 - 把坚决做到“两个维护”作为根本政治任务 By Jiangxi party secretary Liu Qi. Liu upholds Xi’s decision on the Shaanxi villa scandal and vows to clean up previous Jiangxi party secretary Su Rong’s “toxic residual”. Is Liu the first provincial party secretary to come out and support Xi’s decision on the Shaanxi villa scandal in a way like this? I would expect more Liu clearly seems to be pledging allegiance to Xi

Xi presides over 6th meeting of central committee for deepening overall reform - People's Daily Online The meeting reviewed and approved a series of official documents:

-- a plan and a guideline both on launching a science and technology innovation board at the Shanghai Stock Exchange and experimenting with the registration-based IPO system;

-- a guideline on establishing a system of protected natural areas with national parks as its mainstay;

-- a guideline on deepening educational and teaching reform and comprehensively improving the quality of mandatory education;

-- a guideline on encouraging and guiding the flow of personnel to remote areas with harsh conditions, local communities and the frontline;

-- a guideline on deepening overall reform in the domains of politics and law;

-- a guideline on advancing the reform of the property right system for natural resource assets;

-- a guideline on building a national territorial space planning system and supervising the implementation;

-- a guideline on setting up a market-oriented green technologies innovation mechanism;

-- a plan on the protection and restoration of natural forests;

-- a plan for building Hainan into a national ecological civilization pilot zone;

-- a plan for experimenting with the national park mechanism in the tropical forests in Hainan;

-- the key points of the reform committee's work in 2019;

-- a report summarizing the reform committee's work in 2018;

-- a report summarizing and assessing the implementation of deepening reform in all areas since the 18th CPC National Congress.

Top political advisor calls for well-organized consultative work in 2019 - Xinhua The meeting reviewed and approved the draft agenda and schedule for the session as well as draft reports on work of the Standing Committee of the CPPCC National Committee and its handling of proposals, all of which are to be submitted for deliberation at the fifth meeting of the Standing Committee of the CPPCC National Committee. The meeting also approved a decision to disqualify Shu Yuhui [head of Quanjian] as a member of the 13th CPPCC National Committee. The decision will be put before the fifth meeting of the Standing Committee of the CPPCC National Committee.

Animated Karl Marx brought to you by China’s propaganda machine | SupChina The seven-episode anime portrays the father of Communism as a tall, lean, and conventionally good-looking man with an undeniably high degree of charisma, rather than providing the better-known image of an older man with a bushy beard. According to Bilibili’s official description, the series chronicles the life of Marx by highlighting some key elements of his life, such as his “rebellious romance with Jenny von Westphalen,” his “difficult friendship with Friedrich Engels,” and his “significant contributions to the working-class revolution

中央企业专职外部董事丁荣祥接受纪律审查和监察调查———中央纪委国家监委网站 据中央纪委国家监委驻国资委纪检监察组、河北省纪委监委消息:中央企业专职外部董事丁荣祥涉嫌严重违纪违法,目前正接受纪律审查和监察调查。

China holds reception for ethnic groups in Beijing ahead of Spring Festival - Xinhua The event was jointly held by the United Front Work Department of the Communist Party of China, the ethnic affairs committee of the NPC, the National Ethnic Affairs Commission, the ethnic and religious affairs committee of the CPPCC National Committee and the Beijing municipal government. The Chinese Lunar New Year falls on Feb. 5 this year. And the public holiday in association with it lasts from Feb. 4 to 10.

Foreign and Military Affairs

Full text of Chinese vice president's speech at 2019 WEF annual meeting - Xinhua We will stay true to the founding mission of the Communist Party of China, uphold its leadership and China's fundamental socialist political and economic systems and be guided by a people-centered development philosophy. From the founding and building of the People's Republic to the launching of the reform and opening-up program and the shifting of focus to economic development, we have moved away from revolution to reform, from a planned economy to a market economy and from isolation to all-round opening-up. In this process, we have broken free from the fetters of dogma and Utopian thinking, freed our minds and taken a realistic and pragmatic approach, and applied Marxism's basic tenets in the context of China's realities. Four to five generations of us Chinese have, going through twists and turns, probed a way forward. Through trials and errors, with many lessons learned and heavy prices paid along the way, we have made great accomplishments and embarked upon a path of building socialism with distinctive Chinese features. Thanks to 70 years of hard work and dedication, we have turned a weak and impoverished agrarian country with backward productivity into the world's second largest economy, the largest industrial manufacturer, and the largest trader of goods, creating bright prospects for the great renewal of the Chinese nation.

官宣首发!永暑岛高清全景图 大型机场港湾一应俱全_网易新闻 PLA has released a photo of all the construction on Fiery Cross Reef

China settles 480,000 veterans in 2018 - Global Times China is conducting a census on the number and living conditions of its military veterans as the country strives to arrange for their settlement and improve their life. In 2018, China's Ministry of Veterans Affairs (MVA) has arranged the settlement of more than 80,000 demobilized officers and more than 400,000 demobilized soldiers, said Wang Zhiming, spokesperson of the MVA, at a press conference on Wednesday.

As Russia, China Encroach, Airmen Work to Expand Comms Network in Antarctica | Military.com As part of Operation Deep Freeze, an ongoing joint U.S. military mission for more than 60 years in Antarctica, members of the Air National Guard's 263rd Combat Communications Squadron conducted a two-week experiment by installing and testing various combat communications capabilities and tapping into satellite networks, according to a recent Air Force release.

Chinese Naval Shipbuilding: Full Steam Ahead - Andrew Erickson - Maritime Executive Shipbuilding’s commercial dual-use nature has long facilitated transfer and absorption of much foreign technology, standards, and design and production techniques. China’s shipbuilding industry has leapfrogged key steps, focusing less on research and more on development, thereby saving time and resources and enjoying the most rapid growth in modern history. China’s current naval buildout dates to the mid-1990s, catalyzed and accelerated in part by a series of events that impressed its leaders with their inability to counter American military dominance. These include Operation Desert Storm in 1991, the Third Taiwan Strait Crisis in 1995-96, and the Belgrade Embassy Bombing in 1999.

China not aware of President Xi Jinping's reported travel plans to India - The Economic Times "It's quite interesting. I am not aware of that, but China and India are friendly neighbours and we attach importance to maintaining high-level exchanges," Chinese Foreign Ministry spokesperson Hua Chunying said when asked at the regular briefing about the reports.

Chinese missile drill tests ‘ultimate symbol of PLA destructive potential’ and sends message to the US | South China Morning Post Song Zhongping, a missile expert and former officer with the PLA’s Second Artillery Force, suggested the report showed the Dongfeng-41 – China’s most advanced ICBM, whose development has been at the centre of speculation by Western analysts for the past decade – may already be in service.

Information warfare - Tortoise Media Western news organisations operating in China do so under serious constraints. They are liable to be followed (online and off), bugged, harassed and left in little doubt that their visas could be revoked if they fail to temper criticism of the regime....CGTN journalists in London, by contrast, will be free to take advantage of an open society in all its dishevelled complexity. Expect them to show more finesse than RT and Sputnik, the crassly dishonest Russian state broadcasters with bases in the UK. If CGTN’s operations elsewhere are any guide, this will mean plenty of respectable if worthy reporting. But it will also mean a systematic emphasis on democracy’s vulnerabilities (Brexit, anyone?) and a relentless push to “tell the Chinese story well”, as Xi insists.  //  The Party calls them "news workers"

The Big Read - South China Sea: Fishing on the front line of Beijing’s ambitions | Financial Times $$ Vietnamese industry officials and fishermen interviewed by the Financial Times say confrontations between Chinese coast guard or civilian boats — referred to by state media in Hanoi as “alien vessels” — and Vietnamese craft are frequent, and have in several cases seen boats sunk, fishermen injured and equipment or catches stolen. The fights over fishing represent a little-reported economic and environmental facet of the clash between China and its south-east Asian neighbours in one of the world’s hottest geopolitical trouble spots, as well as a potential source of a broader US-China conflict. Fishermen, as academic Gregory B Poling of the Center for Strategic and International Studies wrote in a research paper this month, “serve on the front lines of this contest” as they fight for their livelihoods against bigger, better equipped Chinese coast guard and fishing boats.

Spite Won’t Beat China in Africa – Foreign Policy - Lina Benabdallah If U.S. President Donald Trump, as his administration has stated, intends to have an Africa strategy centered on combating China’s reach in the region, the United States needs to recognize how China’s influence actually works. The kinds of ties exemplified by Wang’s visit—rather than more traditional points of attention, such as China’s growing financial involvement, its military base in Djibouti, or the Chinese-built roads and bridges in Kenya—give China its real advantage over the United States in Africa. Although it is nowhere near flawless, a fair amount of consultation between Chinese and African counterparts goes into the making of China’s Africa policy.

Tech And Media

Super-Patriotic Anime Youth Wars! – Foreign Policy Japanese anime has conquered China. In Chinese, the term “2D culture” (erciyuan wenhua) describes both the television shows, video games, anime (cartoons), manga (comic books), music, and movies inspired by Japanese pop culture and the millions of Chinese who consume these products every week. This “second dimension” is one of the fastest-growing industries in China—with more than 200 million consumers, the market is projected to reach more than $30 billion by 2020. But the runaway success of Japanese pop culture among China’s youth has caused confusion, shock, and anger in a country still bitter over historical grievances. Many Chinese see this as a war for the hearts of their children—one they’re losing.

Big in Beijing - BBC News How one American woman's viral hit made her a star in China...Christine Welch, breakthrough from TikTok

Alibaba Film Unit Looks for Mojo in Major New Production Tie-Up - Caixin The deal will see Alibaba Pictures Group Ltd. team up with Huayi Bros. Media Corp. to make movies, TV shows and other filmed entertainment products in which Huayi plays the “decisive and leading role,” according to a stock exchange announcement by Alibaba Pictures on Wednesday. Alibaba will help to distribute such co-productions, and will also get priority for the receipt of online rights. The partnership will see the pair aim to make 10 cinema films over the next five years. As part of the deal, Alibaba Pictures will also make a 700 million yuan ($103 million) loan available to Huayi over the five-year duration of the agreement

WeChat ‘Blocks’ TikTok — Again - Caixin On Wednesday, TikTok (known as Douyin in China), said that many new users were unable to log in to its platform via WeChat. TikTok said an inspection found no tech failures on its end, and assumes the problem is stemming from WeChat.

Meituan to invest $1.7 billion in push to digitize merchant partners · TechNode Chinese lifestyle services giant Meituan announced this week that it would invest RMB 11 billion (around $1.7 billion) this year to help merchants upgrade their operations and drive the growth of China’s “Delivery Economy,” a term that refers to the country’s on-demand services boom.

Tencent gets China nod for two mobile games, but not for blockbusters | Reuters Chinese regulators have approved two of Tencent’s mobile games for commercial launch, the first green lights for the firm in almost a year, though they are yet to make a keenly-awaited ruling on blockbuster PlayerUnknown’s Battlegrounds.

In Davos, U.S. executives warn that China is winning the AI race - The Washington Post For the first time this year, consulting firm PwC used its annual CEO survey to ask global business leaders whether they thought AI would have a larger impact than the Internet. Eighty-four percent of Chinese executives said yes, while 38 percent of American executives said the same. The startling difference in views about AI surprised consultants at PwC who said attitudes are rarely this divergent among the nearly 1,400 global executives they survey each year.

The Visually Impaired Coders Making E-Commerce More Accessible - Sixth Tone “A lot of people think that the visually impaired don’t use computers because they can’t see anything — but they actually do,” Cai Yongbin, a visually impaired computer engineer, tells Sixth Tone. “They don’t need a screen, they only need sound. We’re good at saving electricity,” the 31-year-old adds with a chuckle. In June 2018, Cai founded Yitong Information Technology Co. Ltd., a tech startup dedicated to making the internet more accessible to people like him. There are eight staff members on the team: Six are visually impaired, two are sighted.

Energy, Environment, Science And Health

China's first baby born from transplanted womb - Xinhua A woman who successfully received a womb donated from her mother after a uterus transplant in November 2015 gave birth to a healthy baby boy in northwest China's Shaanxi Province on Sunday. Weighing 2 kg and measuring 48 cm long, the baby is China's first and the world's 14th baby born from a transplanted womb, doctors with the Xijing Hospital in Xi'an, capital of the province, said Wednesday.

China clones gene-edited monkeys - Xinhua China has cloned five monkeys from a gene-edited macaque with circadian rhythm disorders, the first time multiple monkeys have been cloned from a gene-edited monkey for biomedical research. Scientists made the announcement Thursday, with two articles published in National Science Review, a top Chinese journal in English. The cloned monkeys were born in Shanghai at Institute of Neuroscience of Chinese Academy of Sciences.

China’s Solar-Panel Makers Dominate Global Exports - Caixin But the disruption of what became known as the “531 policy” has not caused the country’s solar industry’s star to wane, new data from consultancy PV Info Link Shows. It found that Chinese companies still comprised nine of the top 10 solar panel exporters in 2018. Together, the top 10 account for 66 gigawatts (GW) of the 91.5 GW of the solar panels shipped last year, a market share of 70%.

China urges "lake chiefs" to fulfill responsibilities - Xinhua China started the river chief scheme in December 2016, when the top leadership decided to assign each waterway in the country a specific steward, or "river chief." Following the river chief scheme, the country rolled out a lake chief scheme in 2018 to strengthen lake resource protection. The country has now established the lake chief scheme nationwide and appointed 24,000 lake chiefs at various levels for 14,000 lakes, with 85 provincial level leaders serving as the highest level of lake chiefs, according to a press release of the Ministry of Water Resources.

Food And Travel

Smoking Can Be Hazardous to Your Flying Career - Caixin A new rule set to take effect at the end of this year will close the loophole by making it clear that smoking is prohibited anywhere on the plane. But in light of last year’s incidents, the aviation authority issued a notice this week asking airlines to implement the new no-smoking part of the rule in advance.


Beijing: Residents who voluntarily move their hukou will be rewarded - China Daily Beijing residents who live in State-owned and managed bungalows who voluntarily move their hukou, or registered resident's permit, from the city's downtown area will be rewarded, according to municipal housing authorities. The rewards will be agreed upon by Xicheng and Dongcheng district governments and set separately, the Beijing Municipal Commission of Housing and Urban-Rural Development said on Tuesday. The authority further outlined its policy interpretation of guidelines concerning the evacuation, renovation and management of State-owned and managed bungalows on historical and cultural blocks in Beijing's central area.