Standing committee meeting; Wuhan politics; Huawei smoking gun?

The official number of new COVID-19 cases continues to decline but as I wrote yesterday watch what the officials do, not what the official media say.

Xi Jinping convened another Politburo standing committee meeting and the official readout makes it clear the leadership is very worried about the economy and the goals the Party has set for 2020.

The local officials are under huge pressure to prevent an outbreak in their areas while at the same time getting their local economy up and running again. It is almost a no-win choice for them, but so far most seem more focused on stringent measures to prevent the spread of the virus. Are the local officials also not confident in the official data on the number of cases?

Sorry today’s commentary is short but I am not feeling particularly insightful.

Thanks for reading.

The Essential Eight

1. Another standing committee meeting

Xi chairs leadership meeting on epidemic control, noting "positive changes" - Xinhua |

The Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee on Wednesday held a meeting on the prevention and control of the pneumonia epidemic caused by the novel coronavirus or COVID-19.

Xi Jinping...chaired the meeting and made an important speech...

Xi said the epidemic situation has shown positive changes due to concerted hard work and that the prevention and control work has achieved notable outcomes.

"The results are hard-won progress made by all sides," Xi said.

Noting that epidemic prevention and control have entered a critical stage that requires stringent efforts, Xi stressed focusing on priorities without any let-up and strengthening prevention and control in areas where the epidemic situation is particularly serious or at greater risk.

Xi demanded resolute efforts from Party committees and governments at all levels to win the people's war against the epidemic and urged them to strive to achieve this year's economic and social development goals and tasks...

The non-key regions for epidemic prevention and control should coordinate curbing the epidemic and restoring the economic and social order, the meeting said, requiring greater efforts to reduce the impact of prevention and control measures on people's life.

The meeting called on Party committees and governments at all levels to minimize the impact of the epidemic to maintain steady economic performance as well as social harmony and stability...

More efforts should be made to formulate policies and measures to cope with the impact of the epidemic. To better combat the epidemic, the country will increase funding and roll out targeted tax and fee reduction measures to ease strains on firms, while looking to offer discounted loan interest rates for producers of anti-virus materials.

The meeting also called for ensuring the orderly resumption of work and production in enterprises. At the same time, multiple measures will be taken to ensure a stable job market for college graduates and other job seekers.

中共中央政治局常务委员会召开会议 分析新冠肺炎疫情形势研究加强防控工作 中共中央总书记习近平主持会议_CCTV





Coronavirus: Xi Jinping sends message on economy and getting back to business | South China Morning Post

Xi also urged local authorities to refrain from taking excessive measures to curb contagion.

“We must correct these overreactions and extreme measures and avoid an oversimplified approach [such as] blanket closures or suspensions of business operations,” Xi said...

And Premier Li also stressed the need to get the economy restarted at a Tuesday State Council executive meeting - Chinese premier stresses resuming work, ensuring supply amid epidemic - Xinhua

To alleviate difficulties of enterprises, private and small businesses in particular, during the epidemic, China will establish support mechanisms and implement favorable measures including cutting loan interest rates and improving tax reduction policies.

More should be done to ensure the supply of daily necessities as well as energy, while the construction of major projects should be started as soon as possible, according to the statement.

The meeting also highlighted efforts to prevent large-scale layoffs, encouraging local authorities to take comprehensive measures to support employers and ensure a stable job market.

China to maintain economic and social progress while advancing epidemic control - Xinhua

As it advances epidemic control with all-out efforts, China will enhance macro-economic regulation, and step up production, allocation and supply of key materials, to maintain social and economic progress.

These arrangements were made at a State Council's executive meeting chaired by Premier Li Keqiang on Tuesday...

The timely launch of key projects will be promoted. [Infrastructure stimulus coming? In the standing committee readout aboce Xi said ‘加快推动建设一批重大项目 accelerate the construction of a number of major projects”]

Employment is another priority and massive lay-offs must be prevented. Local governments will be encouraged to allocate funding, including tapping the balance in unemployment insurance funds, to help businesses keep their payrolls stable. In places where conditions permit, deferral or refund on social insurance contributions and other possible means will be encouraged.

2. The outbreak

Coronavirus Latest: Singapore Cases Hit 50, Japan Extends China Travel Restrictions - Caixin Global

New confirmed coronavirus infections drop by nearly half in China: spokesperson - Xinhua |

The number of daily new confirmed cases of the novel coronavirus infection fell from a peak of 3,887 on Feb. 4 to 2,015 on Tuesday, with a decrease of 48.2 percent, according to the National Health Commission (NHC)

China's new coronavirus cases drop, world still scared - Reuters

China reported on Wednesday its lowest number of new coronavirus cases in two weeks, bolstering a forecast by Beijing’s senior medical adviser for the outbreak in the country to end by April - but fears of further international spread remained.

China accused of under-reporting coronavirus outbreak | Financial Times

Frontline healthcare workers, patients and international experts have accused China of under-reporting the number of coronavirus victims in the country, saying authorities were conducting inadequate testing and medical facilities were overwhelmed...

Professor Neil Ferguson, an epidemiologist at Imperial College London, said only the most severe infections were being diagnosed and as few as 10 per cent of cases were being properly detected, in a video released by the university.

In Wuhan, the official figures for confirmed cases could capture as few as 1 in 19 infections, according to a paper published by Prof Ferguson.

Here is the conversation with Professor Ferguson:

China’s Cities Lock Up Residents to Prevent Spread of Virus - Bloomberg

With no unified national policy on how to stop the spread of the coronavirus outside the epicenter of Wuhan, officials are freelancing with their own, sometimes draconian, restrictions in a bid to avoid becoming the next locus of the disease...

Across China, one of the most common restrictions has been to impose lockdowns on residential areas, with the provinces of Liaoning and Jiangxi, as well as major cities such as Shenzhen, Guangzhou, Nanjing, Ningbo, Chengdu and Suzhou restricting visitors and asking inhabitants to limit trips outside.

At Outbreak’s Center, Wuhan Residents Question Accuracy of Virus Tests - WSJ $$

Medical experts around the globe have expressed fears that the scale of the outbreak could be much larger than Chinese data suggests—in large part because of concerns about potential flaws in testing. Independent experts say many tens of thousands of Wuhan residents are likely infected by the coronavirus, while the city’s government puts the tally at less than 20,000.

China seizes hotels, hospitals and cars to fight coronavirus | Financial Times $$

But the measures, particularly the requisitioning of hospitals, have left some people with other life-threatening diseases without critical care, creating what one relative of a cancer patient affected by the seizures described as a “humanitarian” disaster.

China’s southern industrial hub of Guangzhou this week joined a host of other big city governments such as Zhengzhou, Fuzhou and Xi’an in passing emergency legislation for requisitioning.

What is the situation in other Hubei cities?

Shiyan 十堰 has a population of about 3.4 million people, according to Baidu Zhangwan District 张湾区 has a population of about 394,000 people. What is going on in Hubei outside of Wuhan?

The Shiyan measures - 湖北十堰张湾区实施战时管制,所有楼栋封闭管理 - 国内 - 新京报网

74-member medical team from Guangxi departs for Shiyan to help combat novel coronavirus - Xinhua

A medical team comprised of 74 medical staff departed for Shiyan of central China's Hubei Province on Wednesday to help combat novel coronavirus there.

China vows to house all coronavirus patients. Treatment isn’t guaranteed - Inkstone

On February 5, he was taken to the Sunny Sky Inn in Qiaokou district. The building had been converted into a temporary quarantine center. At that time, Peng said, community officers promised that his father would be tested for the coronavirus and looked after by doctors.

But no doctor was working at the site, Peng said. On February 8, Peng’s father stopped answering his phone calls. Two days later, Peng found his father in his hotel room unresponsive.

“I touched his hand, and it felt hard and cold,” Peng, 30, told Inkstone. “He had vomited blood. I called out to him. No response. I knew he had passed away.” A doctor later confirmed his death, Peng said.

Peng’s story echoes that of a number of Wuhan residents who have complained about the lack of medical resources inside makeshift shelters that the authorities hope will help save the growing number of people sickened by the coronavirus in the city.

U.S. CDC says not yet invited to assist with coronavirus investigation in China - Reuters

An advance team of World Health Organization medical experts arrived in China on Monday to help investigate the outbreak, and the United States has been waiting for approval to send its experts as part of the WHO team


The annual Gaokao university entrance exam may be delayed

In Virus-Stricken Hubei, Locals Keep Hospitals Supplied - SixthTone

The grassroots relief groups have played a vital role in helping hospitals deal with the shutdown of almost all air, rail, and road transportation in over 15 cities across Hubei, which has made it difficult for medical workers and supplies to reach local health centers. But local authorities are now starting to take back control from some of the small-scale teams as officials try to restore order.

Remember the Women Fighting Coronavirus – The Diplomat

Data released by the Shanghai Women’s Federation, a local chapter of the All-China Women’s Federation, show a whopping 90 percent of total nurses and at least half of the total doctors at the frontline are female, according to People’s Daily. Despite these remarkable figures, when it comes to donations to aid frontline personnel, donors barely take into account female necessities  –especially sanitary essentials — which has irked female rights workers

China and fake news in the time of coronavirus | Financial Times $$

China’s coronavirus has also sparked an epidemic of online panic. When Sars hit in 2003, 6 per cent of China’s population was online; now almost 60 per cent are. The average user of WeChat, the country’s dominant social media platform, spends 90 minutes a day on the app. As a result, while more than 40,000 patients in China are fighting the virus, the entire country is facing an onslaught of online media — much of it disinformation

Comment: And there is plenty of disinformation on global social media too

Taiwan News Publishes COVID-19 Misinformation as Epidemic Spreads | New Bloom Magazine

Children’s Book Under Fire for Promoting Wildlife Consumption - SixthTone

The book’s publisher, Wuhan University Press, said Tuesday that it had notified all sales outlets nationwide to remove the book and launched an investigation into the matter. Earlier this week, a photo of a page from the book Animal Encyclopedia went viral on Chinese social media for referring to the masked palm civet as a “rare delicacy,” with many objecting to the potentially unsafe characterization.

Yunnan introduces barcodes to track residents’ movements in public - The Washington Post

The southwestern Chinese province of Yunnan on Wednesday launched a WeChat in-app program called Kang Yiqing (Fighting the Epidemic) that requires residents to register their personal information by scanning a QR code whenever they enter a public venue

China to stagger the return of students to school to curb virus: official - Reuters

Wang Dengfeng, an official in charge of virus prevention at the Ministry of Education, told a media briefing that China would coordinate with schools and local authorities to try to reduce the number of students returning at any one time.

Ten provinces and regions as well as the municipalities of Shanghai and Chongqing have all announced that schools will remain closed until at least the beginning of March

Early Coronavirus Genetic Data May Have Forewarned Outbreak - Bloomberg

China didn’t release key genetic data on the coronavirus until about two weeks after it emerged that a new SARS-like illness may be sickening people, highlighting the need for outbreak detection systems to incorporate modern scientific tools.

Insufficient attention was paid to the information doctors had gathered about the genetic sequence of the novel coronavirus, scientists said in a commentary paper in the Lancet medical journal Tuesday. The authors, who include two members of the World Health Organization’s emergency committee, said this wasn’t the result of a cover-up or deliberate delay, but rather the absence of mechanisms to inform outbreak warning systems

Huge Shelters for Coronavirus Patients Pose New Risks, Experts Fear - The New York Times

The makeshift shelters in Wuhan do not have adequate heating and have suffered power failures, according to early reports. Staffing is inadequate, and medical equipment is in short supply.

“This is taking us back to the 19th century,” Dr. Markel said. “It’s an old-fashioned approach to an epidemic, because you care more about the healthy than the people who are sick.”

3. Economic impact

Coronavirus: Xi Vows to Meet Economic Goals and Defeat Disease - Bloomberg

“It will not have a long-term impact on the supply of production and productivity, nor will it even affect the whole year or weaken the potential growth capacity of China’s economy,” Cai Fang, vice president of the Chinese Academy of Social Sciences, wrote in Wednesday’s People’s Daily. China can reach its targets as long as economic growth this year is about 5.7%, he wrote.

Cai's piece - 继续为实现今年经济社会发展目标任务而努力(人民要论)蔡 昉

In Depth: How Coronavirus Outbreak Has Hurt China’s Economy - Caixin

Weak demand has led to an inventory buildup in the upstream supply chain of many parts of the energy industry. Refineries in China have generally suffered rapid growth of inventory, said Zhu Fang, an analyst at the China Petroleum and Chemical Industry Federation, an industry group.

Such buildups have also become commonplace in other heavy industries, including steel and copper smelting. On Friday, China’s steel inventory hit an all-time high of 25 million tons, up 54% from the level before the Lunar New Year holiday, according to, a Shanghai-based industry data provider.

Yicai Global - Four-Fifths of China's Car Dealers Are Still Shut Due to Epidemic, Industry Group Says

Just 573 of 2,895 4S stores owned by almost 50 auto distributors have gotten back to work, according to the survey on the impact of the epidemic on the industry carried out by the China Automobile Dealers Association and submitted yesterday to the National Development and Reform Commission, the country's top economic planner

Resolve to resume production crucial to China’s economic restart - Global Times

While businesses in most regions of the country were told to postpone reopening until the beginning of this week, various local authorities have still taken measures discouraging work resumption. It is, of course, understandable for local authorities to take some control measures, but preventing companies from resuming work is not a sustainable way of containing the NCP.

Moreover, there are rumors regarding NCP cases found at factories that resumed operation, which may scare companies that are planning for a return to work. The motive behind the resumption rumors is obviously sinister, even though it is not hard to clarify it. The malicious rumors reflect someone's dark desire to see the Chinese economy plunged into chaos amid fears of the NCP. While rumors may spread panic and increase anxiety over the resumption of work to a certain extent, they won't weaken China's determination to restart its economy from the shock of the NCP outbreak.

Foxconn aims to resume half of output in virus-hit China by month-end: source - Reuters

The world’s largest contract electronics maker also aims to resume 80% of production in China in March, added the source, who has direct knowledge of the matter, citing internal targets set by Chairman Liu Young-Way.

China unveils stronger financing support for virus prevention, control enterprises - Xinhua

The guideline from a state financing guarantee fund unveiled measures to improve financing guarantee services for key enterprises in prevention and control and regions severely affected by the novel coronavirus outbreak.

Specifically, the fund will provide re-guarantee services for loan guarantee programs of epidemic control and prevention companies, and half the re-guarantee fees for loan guarantee programs of Hubei-based enterprises seriously hit by the outbreak.

Coronavirus: does China have the financial power to repair the economic damage caused by the outbreak? | South China Morning Post

Wang Tao, head of Asia economics and chief China economist at UBS, estimated that China’s gross domestic product (GDP) growth rate would plunge 1.5 per cent in the first quarter, assuming that all companies were able to resume operations at the start of April.

“We believe the impact of the novel coronavirus [on China’s economy] will be bigger than severe acute respiratory syndrome-related (Sars) coronavirus,” said Wang.

“In my view, China has to rely much more on fiscal policy. So far we’ve seen some relief in tax cuts in the short term,” added Wang, who believes China’s fiscal deficit to GDP ratio is likely to exceed 3 per cent in 2020.

Comment: A 1.5% drop in Q1 GDP seems low, especially if as this article says Wang assumes "all companies were able to resume operations at the start of April". April of course is in Q2...

Local Governments Get Extra Bond Boost as Virus Bites - Caixin

China’s provincial-level governments have been given the green light to issue a further 290 billion yuan ($41.6 billion) of special-purpose bonds (SPBs) early, adding to the 1 trillion yuan of such debt approved in November to boost infrastructure spending amid a slowing economy that’s set to take an additional hit from the coronavirus epidemic

Communities in Tech Hub City Bar Renters From Returning Home - Caixin

As work resumed across China this week after an extended Lunar New Year holiday due to the coronavirus outbreak, many people arriving back to their rented apartments in Zhejiang province tech hub Hangzhou found they were barred from entering their communities...

“The Hangzhou government has ordered that neighborhoods should not freely ban residents and tenants from entering, but because it’s now a period of high incidence of the epidemic, each community has its own management measures and tenants have to cooperate accordingly,” an operator of the city’s administrative hotline told Caixin.

China Rapid Rebound Thesis Tested as Virus Fallout Deepens - Bloomberg

Ray Dalio, the billionaire founder of Bridgewater Associates, said on Tuesday that the impact of the outbreak on markets has been exaggerated and is likely to be short lived.

Mobile World Congress Canceled Due to Coronavirus Concerns - Bloomberg

It’s the first time in MWC Barcelona’s 33-year history that organizers have called off the event, which draws more than 100,000 participants

SILICON | What industry can't stop? Semiconductors · TechNode

While there are other key Chinese memory companies—e.g. Changxin memory in Hefei—the two Wuhan memory makers have both have confirmed they are not stopping production. While the rest of us are forced to work from home due to covid-19 fears, two companies at the heart of the epidemic cannot be allowed to discontinue production.

Yicai Global - Beijing Sells Land for Quarter Over Asking Price as City Scraps Price Cap

Beijing has auctioned off three parcels of residential land to the highest bidders in its first sales since the end of the extended Chinese New Year holiday the Securities Daily reported today. Prices reached as much as a 25 percent premium.

Chinese Firm Makes Gilead Drug in Virus Fight, Raising IP Fears - Bloomberg via Yahoo Finance

A Chinese drugmaker said it has started mass-producing an experimental treatment from Gilead Sciences Inc. that has shown potential to fight the novel coronavirus, adding to concerns that the U.S. pharma company is losing patent control in China’s accelerating effort to fight the outbreak

F1 Chinese Grand Prix postponed due to coronavirus - Reuters

The race, in what is an important market for Formula One, was originally set to be held in Shanghai on April 19, but the governing body FIA and Formula One said in a statement that they had jointly decided to postpone it.

Japan expands entry restrictions to virus-hit Zhejiang - Nikkei Asian Review

The Japanese government decided Tuesday to bar entry to travelers from Zhejiang Province, tightening its entry restrictions in light of the widening reach of the new coronavirus.

Foreign nationals who have been in Zhejiang within 14 days of arrival in Japan, or who hold a passport issued in the province, will be denied entry. This follows an earlier decision to ban travelers from Hubei Province, the epicenter of the outbreak.

American Airlines extends China flight cancellations through April - The Washington Post

American Airlines announced Tuesday that it will suspend flights to China and Hong Kong through the end of April, a month longer than the carrier had previously planned

Time to resume suspended flights to China - Global Times

Some countries have completely cut off traffic communications with China and even banned non-citizens who have been to China within last 14 days to enter their country. This is serious violation of WHO recommendations. As the situation has significantly relaxed in recent days, these countries should reconsider and revoke these practices.

China is the world's largest manufacturing factory, and one of the places with the largest human flow on the Earth. Canceling flight to and from China has made many airlines suffer huge losses, which also deals a heavy blow to the first-quarter performance of the world economy. If all the countries keep their measures unchanged, it means all sides will pay bigger cost from the epidemic.

China calls on countries to lift coronavirus travel restrictions - Xinhua

Liang Nan, an official with the Civil Aviation Administration of China (CAAC), said China's civil aviation sector is willing to work with other countries and take strict epidemic control measures to safeguard the health of passengers...

she noted that certain countries have overreacted by suspending flights to and from China or implementing border entry restrictions.

贷款1亿开发戴口罩的人脸识别 这回旷视被骂惨了!_网易科技

Megvii denies reports it applied for 100m RMB as part of the Beijing loan program for companies to help with the fight against the virus. Netizens are in an uproar because the reports listed Megvii as applying for the loan to develop face recognition technology even when people are wearing masks

As Coronavirus Stifles China, Economic Logjams Build Worldwide - The New York Times

Mr. Morse, at Citigroup, said several key markets — like crude oil — had already been showing softness, suggesting that the global economy was weak even before the virus hit. That could complicate any quick rebound for commodities prices.

“The market has been thinking that there’s going to be a V-shaped recovery at some point,” he said. “And we don’t think that’s in the cards.”

OPEC report: Coronavirus expected to weaken oil demand growth in 2020 - CNBC

“The impact of the Coronavirus outbreak on China’s economy has added to the uncertainties surrounding global economic growth in 2020, and by extension global oil demand growth in 2020,”

4. Wuhan politics

Central govt officials scold Wuhan authorities for sloppiness in attending to virus patients - Global Times

"All patients getting admitted to hospitals are the key to preventing and controlling the NCP outbreak. We need to do good things well. How can we turn good things to bad? Why did these Party members and officials responsible for transferring these critically ill patients not follow the car? Wuhan is now in wartime [against the NCP outbreak]. These people behaved very badly," said Gao Yu, deputy secretary-general of the State Council and director of the supervision bureau of the General Office of the State Council, at the meeting.

Gao pointed out the seriousness of the situation, according to a Xinhua News Agency report on Tuesday.

Facing opposite to Gao's desk, Yu Song, head of Wuchang district in Wuhan, took notes while listening with his face turning red.

Chinese officials’ phone apology to patients as coronavirus deaths hit 1,115 | South China Morning Post

A district leader in Hubei’s capital of Wuhan apologised on Tuesday to critically ill patients who had not been treated in a timely manner, state media reported.

Staff in the Wuchang district who were in charge of a chaotic bus transfer of people to hospital on Sunday were ordered to apologise to patients and their families one by one by telephone.

关注疫情防控 | 疫情就是军情 失职就是逃兵

Taoran Notes weighs in on the criticism of the Wuchang district officials, uses it to emphasize that all officials have to diligently implement the policies from the center on epidemic control, and if you do not you are guilty of dereliction of duty and are a "deserter"...

Not that we are about to see an uprising but I doubt the fact that Wuchang district was the site of the 1911 "Wuchang Uprising" that eventually led to the fall of the Qing Dynasty is lost on Beijing


Quite the defense of Wuhan Mayor Zhou Xianwang on the local Wuhan news site, says Wuhan reported the initial cases to Beijing in December. Zhou may be losing his job imminently but he clearly does not want to go down in history as the bad official who allowed this epidemic to spread


The Changjiang Daily had a now-deleted commentary attacking the appropriateness of a Buddhist hymn/line from Tang poetry written on donations from Japan while defending cruder CCP language. The commentary quotes Adorno “To write poetry after Auschwitz is barbaric”. Here is a cache of the article on Evernote - 长江日报评风月同天与武汉加油:奥斯维辛之后,写诗是残忍的

Some background on the phrase on the Japan donations - 特邀撰稿|为什么别人会写“风月同天”,而你只会喊“武汉加油”? - 韩晗


Wuhan virus citizen journalists Fang Bin, Chen Qiushi go missing — Quartz

A second Chinese citizen journalist who had been covering China’s deadly coronavirus outbreak from its epicenter in Wuhan has gone missing just days after the disappearance of Chen Qiushi, a former rights lawyer who was video blogging from the city.

Fang Bin, a Wuhan businessman who had been posting videos filmed from city hospitals, was allegedly arrested on Sunday (Feb. 9, link in Chinese), according to Hong Kong broadcaster RTHK, the same day he posted a 12-second video of a piece of paper with the words “resist all citizens, hand the power of the government back to the people” written on it, which he read aloud.

5. Huawei smoking gun?

U.S. Officials Say Huawei Can Covertly Access Telecom Networks - WSJ $$

When telecom-equipment makers sell hardware such as switching gear, base stations and antennas to cellphone carriers—which assemble the networks that enable mobile communication and computing—they are required by law to build in ways for authorities to tap into the networks for lawful purposes...

U.S. officials said Huawei has built equipment that secretly preserves its ability to access networks through these interfaces, without the carriers’ knowledge. The officials didn’t provide details of where they believe Huawei is able to do so. Other telecom-equipment manufacturers don’t have the same ability, they said....

Matthew Pottinger, a U.S. deputy national security adviser, traveled to Berlin in late December to share the intelligence with senior officials in Chancellor Angela Merkel’s government, according to U.S. and German officials...

Some German officials came away from the briefing by Mr. Pottinger convinced by the U.S. intelligence, according to a senior official familiar with the meeting.

Media Statement Regarding WSJ - Huawei

As evidenced by the Snowden leaks, the United States has been covertly accessing telecom networks worldwide, spying on other countries for quite some time. The report by the Washington Post this week about how the CIA used an encryption company to spy on other countries for decades is yet additional proof.

US allegations of Huawei using lawful interception are nothing but a smokescreen – they don't adhere to any form of accepted logic in the cyber security domain. Huawei has never and will never covertly access telecom networks, nor do we have the capability to do so. The Wall Street Journal is clearly aware that the US government can't provide any evidence to support their allegations, and yet it still chose to repeat the lies being spread by these US officials. This reflects The Wall Street Journal's bias against Huawei and undermines its credibility.

6. US-China

Mike Pompeo excludes Taiwan from Trump administration’s Religious Freedom Alliance - The Washington Post

For the past two years, the Taiwanese government has worked hard to be a part of the State Department’s efforts to promote religious freedom around the world. But when Secretary of State Mike Pompeo announced the inauguration of the International Religious Freedom Alliance last week in Washington, Taiwan was intentionally excluded from being part of the 27-country group...

The State Department would not say why Taiwan was excluded from the International Religious Freedom Alliance or why Lai was not invited to the dinner. Two sources told me that Beijing brought pressure on multiple countries involved in the campaign to make sure Taiwan was not included. At one point in its preparations for launching the alliance, multiple sources said the State Department offered Taiwan “observer status,” whatever that means. But that “observer status” has not been acknowledged by the State Department publicly anywhere.

US sends surveillance planes over Taiwan Strait after Chinese war games | South China Morning Post

The United States Air Force sent two surveillance planes over the Taiwan Strait on Wednesday, following two days of mainland Chinese war games near Taiwan.

The two MC-130J special mission aircraft flew from the Kadena Air Base in Okinawa over the strait on their way to the South China Sea, according to a tweet by aviation tracking site Aircraft Spots.

As China expands navy, US begins stockpiling ship-killing missiles - Defense News

The stunning growth of the Chinese fleet over the past decade has prompted the U.S. Navy to plan a full-on buying spree of ship-killing missiles over the next five years, according to projections in the sea service’s Fiscal Year 2021 budget documents.

US trade adviser seeks to replace Chinese drug supplies | Financial Times $$

Peter Navarro, a senior trade adviser to Donald Trump, has urged the US to reduce its reliance on pharmaceutical and medical supply imports from China and the rest of the world in response to the coronavirus outbreak, calling it a ‘wake-up call” for greater American independence in the sector....

The FT reported earlier on Wednesday that some pharmaceutical industry executives are increasingly concerned about the implications of prolonged closures of Chinese making crucial drug ingredients. Umang Vohra, chief executive of one of India’s largest drugmakers, Cipla, said there could be “huge unavailability across the chain” if the shutdown extended beyond February.

Coronavirus effect on US-China 'decoupling' versus trade war: Milken - CNBC “

We talked about China and the U.S. decoupling. The coronavirus more than the trade war has sped some of that decoupling as countries, as businesses think about their supply chain for the long run,” said Curtis Chin, an Asia fellow at the Milken Institute.

How the FBI combats China's political meddling - Axios

The focus is on party-connected actors, the official said.

“We're certainly not looking at, you know, all Chinese students or all Chinese Americans," said the official. “This isn't something that we only see happening with ethnic Chinese.”

How the task force works: The initiative, which is part of the FBI's Foreign Influence Task Force, is housed within the agency's counterintelligence division, with embeds from the criminal investigative, cyber and counterterrorism divisions.

This entry from the July 29, 2019 newsletter is worth reposting in light of Pompeo’s recent speech to US governors and the Axios report above - 中美进入战略相持阶段,持久战该怎么“打”?-黄仁伟-观察者网


中国的综合国力在不断上升,如今5G技术又势头迅猛,使得美国不得不担忧自己的国际地位。在美国Deep State对中国摊牌的情况下,中国要以坚定回击确保本国核心利益,以局部妥协换取全局主动,比如同美国五十个州建立更深的经贸关系,以更深入的挂钩来构建中美利益共同体...

Comment: Influential Chinese scholar of America Huang Renwei in a March talk looked to Mao's "On Protracted War" to analyze the state of the US-China relationship, says we are in a protracted period of stalemate before China can catch up and the US-China relationship rebalances, says China should deepen relationships at the US state level as a way to counterbalance the more hawkish policies coming from DC, says that China can fill the gap in providing global public goods as the US withdraws from the world, and that will help with the eventual rebalancing of the US-China relationship in China's favor. 

7. Digital currency patents

Patents reveal extent of China’s digital currency plans | Financial Times $$

The trove of patents, seen and verified by the Financial Times, include proposals related to the issuance and supply of a central bank digital currency, a system for interbank settlements that uses the currency, and the integration of digital currency wallets into existing retail bank accounts.

Uncovered by the US Chamber of Digital Commerce, their contents shed light on Beijing’s mounting efforts to digitise the renminbi, which has sparked alarm in the west and spurred central bankers around the world to begin exploring similar projects. ..

“Virtually all of these patent applications relate to integrating a system of digital currency into the existing banking infrastructure,” said Marc Kaufman, a partner and patent attorney at Rimon Law, who worked with the Chamber on the project.

While some of the patents mentioned the guarantee of peer-to-peer privacy, there were no mechanisms to prevent the Chinese central bank from having full oversight of users’ transactions, Ms Boring said. 

US Congressman Challenges Fed Chair on Threat of China’s Digital Currency - CoinTelegraph

Foster also worried that if the Federal government doesn't react and issue a plan for a digital currency quickly, potential competitors like China could roll out CBDCs and gain an upper hand. He specifically cited China’s plan to implement the digital Yuan among countries involved in its Belt and Road initiative, it could jeopardize the dollar’s world reserve currency status.

8. Sweden has upset Beijing

Sweden’s lonely boxing match with Beijing – POLITICO

Västerås is a microcosm of what is happening across Sweden, where officials and business leaders are waking up to the reality of dealing with the Chinese one-party state, after years spent looking for ways to tighten trade and diplomatic ties with Beijing.

The deteriorating human rights situation in China — which has come under fire for its incarceration of its Muslim population in Xinjiang province — and Beijing’s increasingly muscular military and diplomatic stance abroad has caused some European governments, like Sweden, to rethink their willingness to engage.

But as Stockholm found out when a Swedish NGO awarded a prize to a Chinese dissident, pushing back against Beijing means putting yourself in the line of fire of a nation with a growing arsenal of diplomatic weapons — very often, alone.

Business, Economy and Trade

Royal Caribbean Cruises reverses ban on Chinese passport holders imposed amid coronavirus fears - Australian Broadcasting Corporation The company has now reversed its policy, which it said was made because of "governments around the world restricting travel for Chinese passport holders".

U.S. Travel Industry Set for Multibillion-Dollar Hit From Coronavirus - WSJ $$ Residents of mainland China made 2.7 million entries into the U.S. in the first 11 months of 2019, according to the National Travel and Tourism Office, the third-highest tally among overseas countries after the U.K. and Japan. Chinese tourists contributed $35 billion to the U.S. economy in 2018, according to the U.S. Travel Association’s latest estimate.

Yicai Global - Jia Yueting's Wife Claims USD571 Million in Divorce The wife of Chinese entrepreneur Jia Yueting has initiated divorce proceedings and is seeking USD571 million in property from the founder of electric automaker Faraday Future, The Paper reported today, citing a revised statement posted on the website of bankruptcy agency Epiq.

All Your Favorite Brands, From BSTOEM to ZGGCD - The New York Times Almost half of top Amazon sellers — those selling more than $1 million in the U.S. — are in China; about a third of Amazon’s Chinese sellers overall are estimated to be in Shenzhen. (This according to Marketplace Pulse, which tracks e-commerce marketplaces.)

Politics and Law

Coronavirus: Li Wenliang’s death prompts academics to challenge Beijing on freedom of speech | South China Morning Post

Hundreds of Chinese, led by academics, have signed an online petition calling on the national legislature to protect citizens’ right to freedom of speech, amid growing public discontent over the handling of the coronavirus outbreak...

The petition, addressed to the National People’s Congress, lists five demands for Beijing: to protect people’s right to freedom of expression; to discuss the issue at NPC meetings; to make February 6, the day Li died, a national day for free speech; to ensure no one is punished, threatened, interrogated, censored or locked up for their speech, civil assembly, letters or communication; and to give equitable treatment, such as medical care, to people from Wuhan and Hubei province. Many people from the outbreak epicentre have reported experiencing discrimination elsewhere in the country as the virus has spread.

Chinese authorities say coronavirus control at heart of clampdown on 10 broad categories of crime | South China Morning Post

The Chinese authorities said they would clamp down on rumour-mongering and other crimes relating to the coronavirus outbreak to tighten control amid the worst public health crisis to hit the country in decades.

A set of guidelines jointly issued on Monday by the country’s top judicial and law enforcement agencies identified 10 wide-ranging categories of crimes that were judged to jeopardise disease control and undermine social stability and the Communist Party.

关于依法惩治妨害新型冠状病毒感染肺炎疫情防控违法犯罪的意见 - China Law Translate

Translation of Opinions on Strictly Punishing Violations and Crimes that Obstruct the Prevention and Control of the Novel Coronavirus Pneumonia Epidemic in Accordance with Law

Renowned China Expert Elizabeth Economy Appointed Senior Fellow At The Hoover Institution At Stanford University | Hoover Institution The Hoover Institution at Stanford University is pleased to announce the appointment of Elizabeth Economy as Senior Fellow effective September 1, 2020.

Foreign and Defense Affairs

Coronavirus top of agenda as China’s Foreign Minister heads to Germany for security forum | South China Morning Post Wang is slated to deliver the keynote address at the annual Munich Security Conference from Thursday to Saturday. He is expected to speak about Beijing’s efforts to combat the virus, which causes the disease now officially known as Covid-19, and international cooperation on the issue.

Xi Jinping to visit Russia for Victory Day celebrations - TASS Beijing has confirmed that Chinese leader Xi Jinping plans to make an official visit to Russia in May to attend the 75th anniversary celebration of the Soviet Union’s Victory over Nazi Germany in the Great Patriotic War, Russian Ambassador to China Andrei Denisov said at a press conference on Monday

Denmark defends Hong Kong protester 'Pillar of Shame' statue following Chinese pressure | Hong Kong Free Press HKFP Officials from the Chinese Embassy in Denmark had attempted to pressure authorities into removing the statue, warning that it would damage relations between the two countries, according to newspaper Jyllands-Posten – citing a note from the City of Copenhagen which authorised the artwork. The note said embassy representatives phoned municipal authorities a day before the sculpture was erected saying that it mispresented the political situation in Hong Kong. They said it would offend Chinese tourists and pose a security risk as a “potential site of conflict,” adding that it would be wise to withdraw the sculpture’s permit.

China’s ‘overseas delegates’ connect Beijing to the Chinese diaspora | The Strategist The united front’s emphasis on exercising influence over Chinese abroad is also manifested in a unique feature of the CPPCC—its ‘overseas delegates’ (海外代表). Most CPPCC delegates comes from China. But since 2001, the CPPCC has included around 35 delegates each year from among the Chinese diaspora. On the national level, unlike regular CPPCC delegates, they can’t vote, and each overseas delegate only serves in that role for a single annual session. (On local-level CPPCCs, it seems that overseas Chinese with foreign nationality can sit as regular CPPCC delegates and hold those positions year after year.)

Foresight 2020: The Challenges Facing China: The RUSI Journal The next few years may see the high tide of China’s power. Charles Parton highlights significant domestic challenges which the country will confront, and which may combine with an unfavourable international environment to make the Communist Party’s ambitions unaffordable and unreachable. Parton argues that breakthrough reforms are making slow progress, while President Xi Jinping is imposing a system of governance stripped of past flexibility, and relations with the West will be brittle.

Four Texans, One New Yorker Arrested for Conspiracy to Sell Sanctioned Iranian Oil to Refinery in China for Huge Profit | OPA | Department of Justice The Complaint alleges that defendants Nicholas Hovan, James Fuchs, Robert Thwaites, and Daniel Ray Lane arranged to purchase the oil and sell it to a refinery in China represented by defendant Zhenyu Wang, a/k/a “Bill Wang.”

American Businessman Who Ran Houston-Based Subsidiary of Chinese Company Sentenced to Prison for Theft of Trade Secrets | OPA | Department of Justice The head of a Houston-based company that was the subsidiary of a Chinese company that developed stolen trade secrets was sentenced to 16 months in prison and ordered to forfeit more than $330,000 by U.S. District Judge Christopher R. Cooper of the District of Columbia. Shan Shi, 55, of Houston, Texas, had previously been found guilty of conspiracy to steal trade secrets by a jury on July 29, 2019.  Evidence admitted during a three-week trial showed that Shi had signed an agreement with Taizhou CBM Future New Material Science and Technology Co. Ltd (CBMF), to develop the manufacture of syntactic foam, which is a buoyancy material that aids in offshore oil and gas drilling.

Coronavirus Forces Foreign Students in China to Choose: Stay or Go - The New York Times “The worst fear is that, as a foreigner, when the news is not as transparent as western news, there is always going to be an information lag,” she said.

Tech and Media

Bytedance eroding ad revenue share from BAT: report · TechNode Bytedance, creator of viral short video apps Douyin and TikTok as well as news aggregation app Toutiao, is continuing to take ad revenue share from China’s top tech firms Baidu, Alibaba, and Tencent, according to a report from Chinese social media agency Totem Media.

Alibaba-Owned Video-Streaming Service Youku Signs Drama Deal with BBC Studios - Caixin Under the deal, which was announced at the BBC Studios Showcase 2020 event in Liverpool on Tuesday, Youku will extend its current licensing to be able to show the entire four seasons of “Sherlock” and will also be able to show an additional 80 hours of BBC Studios drama programing

SoftBank’s Global Vision Tested by China’s Uber for Trucks — The Information $$ The expansion of Manbang, sometimes dubbed the “Uber of trucks,” will put Son’s vision to the test after the damage to his reputation from the near-collapse of WeWork, one of SoftBank’s biggest investments. Other SoftBank-backed tech unicorns, such as Katerra and Zume, are also struggling to live up to expectations. Manbang, whose business in China recently turned a profit, has the potential to become a bright spot in the Vision Fund’s increasingly gloomy portfolio of companies, especially if it succeeds outside China.

Society, Arts, Sports, Culture and History

Tiananmen Tonight by Michael Streissguth — Kickstarter Funding from this Kickstarter campaign will position Tiananmen Tonight for the home stretch when remaining interviews, acquisition of archival footage and post-production will be completed.  The film is to be completed in the fall of 2020 where it will first be exhibited at festivals and then released for broadcast/streaming and education

Energy, Environment, Science and Health

China Mulls Cutting 2020 Benchmark Solar Prices by Up to 18% - Bloomberg China is considering cutting benchmark electricity prices paid to utility-scale solar projects by as much as 18% amid efforts to let the renewable energy become a more competitive source of power, according to people familiar with the matter.