Tariffed!; US supply chains in China threatened; Economists vent to Liu He; Media campaign against Taiwan espionage; Xu Zhiyong; "Comprehensive war on religion"; Sleepless in Sweden
|Bill Bishop||Sep 17, 2018|
If you have been in the path of Hurricane Florence or Typhoon Mangkhut I hope you are safe.
As you read this newsletter President Trump may have announced tariffs on another $200 billion worth of Chinese imports to the US. Multiple reports have him announcing them today or tomorrow, though the implementation timeline is unclear.
If he does announce new tariffs then expect the Chinese to decline to send Liu He to DC for another round of talks.
A former finance minister said something over the weekend that will only play into the hands of the more hawkish elements of the US government. According to Caixin, Lou Jiwei said China Could Ban Exports of Products Crucial to U.S. manufacturers:
China could respond to U.S. tariffs by banning exports of key components, intermediate materials and equipment that U.S. manufacturers depend on, former Finance Minister Lou Jiwei suggested at a forum...
There are plenty of products to choose from, Lou said at the China Development Forum Special Session in Beijing on Sunday. China could select products that the U.S. initially considered taxing but later took off its tariff list. These are the products that form the basis of the U.S.’ high-value-added manufacturing sector...
To fight back, the U.S. could establish an alternative supply chain network in another country, but that would take time, maybe three to five years, he said...
The Trump administration’s goal is to contain China’s economic development, and its actions are currently taking the form of a trade war, Lou said. “This won’t change in the near future, but it won’t work either,” he said. “We should not panic.”
There are senior people around Trump, not to mention the President himself, who very much would like to see US firms remove their supply chains from China. Now we have a respected former finance minister effectively threatening the supply chain vulnerabilities of US firms. No responsible CEO or board of directors of an American company with a supply chain in China can deny any longer that they urgently need contingency plans for a sudden break.
Remember the reports that maybe China would go easy on US firms in the event of an intensification of the US-China trade war? If you put much stock in those promises then I have a bridge in Beijing I would like to sell you...that is just not how the Communist Party rolls.
Thanks for reading and stay tuned for a new episode in US-China trade wars, as Trump coined a new tagline Monday morning--"Tariffed!":
Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”September 17, 2018
The Essential Eight
1. US-China trade
The White House could announce as soon today or Tuesday that it will slap a 10 percent tariff on the $200 billion list of goods, the official told POLITICO this weekend. “We’ll start at 10” percent, the official said, carrying through on an administration announcement from July 10. However, the duties could eventually be ratcheted up to 25 percent, as Trump directed U.S. Trade Representative Robert Lighthizer to consider on Aug. 1, the official added.
the Chinese government over the weekend was completing plans for a top economic policy official to visit Washington in the next few days to lay the groundwork for a trip by Vice Premier Liu He the following week. Mr. Liu is expected to see Mr. Mnuchin, and possibly Mr. Trump. But Chinese officials said that if Mr. Trump carries out his plans to announce the fresh tariffs early this week—as people familiar with his plans said over the weekend that he would—then those talks could get scuttled.
“China is not going to negotiate with a gun pointed to its head,” said a senior official who advises the leadership on foreign-policy matters...
Another big question will be the effective date that the administration sets for the new tariffs. In the past round, the tariffs took effect less than three weeks after the final list was released. If officials follow that practice, the duties would be in place by early October.
Advocates of further negotiations hope that a later effective date might leave the door open to further talks, especially if the Chinese were given a signal that the outcome of those discussions had a chance of staving off or diminishing the planned tariffs.
A move to block suppliers from delivering key components to Apple “is the embodiment of the worst-case scenario,” said Mr. Sacconaghi. Apple’s supply chain is so established in China that “there’s no short-term workaround,” he said.
China will have to be sensitive to how any such retaliation might affect Chinese workers. Apple employs about 10,000 people directly in China and indirectly accounts for three million jobs there through its supply chain.
China, however, is full of ordinary people who hear America’s insults.
After Trump started publicly slamming her country, she said she protested with her shopping cart.
“Before we used Apple, but now we’ve changed to Huawei,” she said of the Chinese phone maker. “It makes you emotional like that.”
Senior Wall Street executives met in Beijing on Sunday with current and former Chinese officials and bankers at a hastily organized session to find ways to strengthen financial ties between the United States and China. On Monday, the group — which included executives from Goldman Sachs Group, Morgan Stanley and the Blackstone Group, the private equity firm, among others — planned to meet with Vice President Wang Qishan, the right hand man of Xi Jinping, the country’s leader...
Mr. Schwarzman is working behind the scenes to get China and the United States talking again. He urged American officials to invite their Chinese counterparts to resume talks, according to the people familiar with the discussions.
Last week, Mr. Mnuchin issued an invitation, which Chinese officials publicly greeted warmly. But Larry Kudlow, President Trump’s chief economic adviser and another Wall Street veteran, suggested afterward that China had sought the invitation.
After building its economy on a mountain of inexpensive exports, from socks to toys to steel, China has been on a mission to upgrade its output. Over the past few years, Beijing has embarked on a campaign to ship low-skill factory work out of the country and build an economy that uses advanced manufacturing techniques to produce high-value products.
U.S. tariffs promise to make selling low-cost goods to American consumers less profitable. Companies as a result are rethinking their operations and products, while the government is offering more incentives to help the transition along.
Accelerating that process wasn’t exactly the goal of President Trump’s tariffs.
2. Reform-minded economists unload at Chinese Economists 50 Forum
Vice Premier Liu He presided over the event. Among the participants, many offered their advice on reform in a series of exchanges that included heated discussions. Below is a selection of some of the highlights...
Ma Jiantang, party secretary and vice minister of the Development Research Center of the State Council
“An article written by Wu Xiaoping triggered a lot of discussion in the past several days. (The controversy) is on one hand due to the rather confusing logic of his opinions carried by the piece. On the other hand, it is sparked by concerns over the state of private enterprises, and, … to put it in a more serious way, by the discontent about some economic policies. There is a lack of confidence (in the policies). People may be concerned about whether competition is fair, law enforcement is impartial, and property rights can be faithfully protected. Some complain that their tax burden is yet to be clearly reduced, and their access to loans is still very restricted. But the deeper cause (of the controversy) is how the private economy should be regarded.”
Editor’s note: Ma was referring to an article that went viral online on Wednesday suggesting that the private sector should “gradually withdraw” from the Chinese economy now that it has “completed its mission of assisting in the development of the public sector,” an apparent mockery of government policies favoring state companies.
Private companies have been the worst hit this year by the slowdown in China’s economic growth, Li Yang, president of the National Institution for Finance & Development, a government think tank, said at a forum in Beijing on Sunday. They are struggling with rising input costs due to the government’s campaign to reduce excess industrial capacity, which has squeezed supplies of raw materials such as steel and coal. They are also suffering from a severe credit crunch led by a regulatory crackdown on banks' off-balance-sheet lending activities — the main funding source for a sector that has long suffered from limited access to bank loans, he said.
Here is a purported transcript of the talks at the forum that I have uploaded to Google Drive.
It is not clear their comments will have much influence though...
3. North Korea sanctions enforcement questions
A confidential new United Nations report, reviewed by The Wall Street Journal, says Pyongyang, often with help from people in Russia and China, has been able to circumvent restrictions, rendering “the latest U.N. sanctions ineffective.”
Citing U.S. intelligence, U.N. investigators found a “massive increase” in fuel shipments to North Korea involving Russian and Chinese ships, as well as numerous examples of coal shipments to China from North Korea.
The U.N. report also called out Chinese companies for buying tens of millions of dollars of North Korean iron, steel and other products. Chinese firms have maintained joint ventures with North Korean partners, despite a U.N. ban last year, the report says. Chinese tourism to North Korea is rebounding.
As part of its contribution to the China’s global “Belt and Road Initiative”, the province of Liaoning is proposing a rail link from the city of Dandong to the North Korean capital Pyongyang and then on to Seoul and Busan in the South.
It is also pushing for a new road between Dandong and Pyongyang through Sinuiju, North Korea’s gateway city, according to a document released on Monday.
4. CCP media runs expose of Taiwan espionage efforts
Interesting timing, these efforts are not new, is it a sign of the hardening attitudes in Beijing towards Taiwan?
China has accused intelligence agencies in Taiwan of targeting mainland students on the island, drawing accusations of hypocrisy from Taipei as it investigates possible espionage by Beijing.
The accusations against Taiwan were first made on Saturday by the state broadcaster China Central Television, and at least six other news outlets followed with reports on Sunday and Monday. They included The Global Times, a nationalist tabloid owned by the Communist Party’s official newspaper...
The People’s Daily said the government would give 500,000 renminbi, or $73,000, to informants providing information on spies.
This article summarizes the case highlighted by CCTV. The program showed the alleged Taiwan operatives faces and real names...--National security organ warns of Taiwan spies' attempts to recruit mainland students - Global Times:
Mainland national security authorities told the Global Times that Taiwan "intelligence agencies" are offering money, faking close relations and making sexual temptations to people, including mainland students who study in Taiwan, as a means to incite defection.
The fact that the Taiwan "intelligence agencies" are building a spy network among mainland students seriously damages national security and the national interest, and harms the overall peaceful development of cross-Straits relations, mainland authorities said.
5. "Comprehensive war on religion"
The services at the Zion Church were different from usual on Sunday. A lot different.
Instead of having 1,300 or so congregants pack into their usual space in northern Beijing, the members of the church walked the streets in small groups, listening to a downloaded sermon on their cellphones.
Pastor Jin Mingri was forced to disseminate his sermon this way after the Chinese authorities shut down his church a week ago, declaring it illegal.
“This is part of a comprehensive war against religion,” Jin said in an interview. “The Communist Party has begun to see religion as a competitor. It’s not just [Protestant] Christianity, but also Catholicism, Buddhism and Islam. They want all of us to pledge our loyalty to the party.”..
The state is not trying to “Sinicize” the church, Jin says. The church is already Sinicized because it’s full of Chinese people.
“They’re trying to ‘party-fy’ the church,” he said. “We just want to depoliticize the church.”
Meanwhile the Wall Street Journal reports that China and Vatican to Sign Landmark Deal Over Bishops:
China and the Vatican are set to sign a landmark agreement later this month ending a long struggle between Beijing’s Communist rulers and the pope over who chooses the leaders of Catholicism in the world’s most populous country, according to two people familiar with the matter.
Reactions to the deal, which gives both sides a say in appointing the church’s bishops in China, are likely to be sharply divided, with some hailing a diplomatic coup by the Vatican that draws China closer to the West and others warning of an important defeat for the principle of religious freedom.
6. Xu Zhiyong on his arrest and time in prison
Xu Zhiyong was released from prison on July 16 after serving four years for his role in the New Citizens Movement...
The following article was first posted on July 20 in Xu’s new blog, and China Change is pleased to offer a complete translation of it...
They asked how much money Wang Gongquan (王功权) gave to Gongmeng (公盟, Open Constitution Initiative). I said, “I can’t tell you.” “Why are you holding it back when he himself has already told us?”
I didn’t say a word. My words must not become testimonies that are used to incriminate others.
This is also legal common sense. He gave me cash, only the two of us knew about it. This fact is not the same as a legal fact.
On abuse from an interrogator:
He suddenly fell apart. He said, in a succession of quick utterances, “Alas, I am really sorry; I was indeed performing; oh dear, I really can’t do this job! Why are they asking me to do this?”
He had completely forgotten about his colleagues around him, as well as the watching eyes supervising them in another room. Later, we chatted for a while. He was a graduate of Renmin University. He repeatedly apologized, saying that he shouldn’t have cursed and insulted me, and that he had failed.
If I had any fear, or felt humiliated, they would have won. Whatever worked on you, they would use it against you. For me, beating would only inspire me. In Linyi, Shandong province, at the entrance of the black jail in the Youth Hostel, brutal violence did not make me submit. Nor did insults have any use.
In a post-totalitarian society, ideology is dead. There is no more class hatred. Beating people is just a job, a role to play.
7. The spirit of Xi's recent speech on propaganda and ideology
In the latest edition of Seeking Truth (求是), the Chinese Communist Party’s chief official journal of theory, the president of Xinhua News Agency, Cai Mingzhao (蔡名照), conveys to his ranks the “spirit” of President Xi Jinping’s speech last month to a national conference on propaganda and ideology...
Even when it comes to foreign propaganda and the battle for minds — which Cai, echoing Xi, calls a “public opinion struggle” — Xi Jinping’s banner term takes precedence, despite how counter-productive this may seem when the Party is dealing with audiences for whom CCP ideology and terminology is necessarily alien. Beginning a section on “applying energy to properly telling the China Story,” Cai writes: “[We] must innovate our discourse system for external propaganda, taking Xi Jinping Thought of Socialism With Chinese Characteristics for the New Era as the highest priority in discourse innovation.” This is meant to be the heart — the spirit — of the strategy by which “the governing concepts and strategies of the Chinese Communist Party are thoroughly explained to international society.”
Comment: This CMP article includes a partial translation of Cai's essay
8. PRC diplomats attack Sweden over cheap tourists
The family surnamed Zeng arrived to Generator Hostel some time before midnight, despite only having a booking from the coming day of September 2. Upon arrival, the family demanded to spend the night in the lobby, a request that the staff did not want to accommodate.
Despite being told to numerous times, the family refused to leave the lobby and installed themselves in the sofas. After a couple of hours the situation became ”threatening” according to the staff, who decided to call on police to remove the family from the lobby...
it is interesting to note that the family was let off not at a graveyard but at a metro station. The name of the station is ”Skogskyrkogården”, or ”Woodland Cemetery”, which is referring to a UNESCO heritage site in the shape of an old graveyard in connection to the subway station...
Top prosecutor Mats Ericsson today told Aftonbladet that the investigation towards the involved police patrol was cancelled already September 7, since there was no indication that the police had been acting wrongfully.
”This is normal procedures when people are disturbing the social order”, Ericsson says to Aftonbladet, adding that the family had no right to be at the hotel and that the police were acting according to Swedish law.
Comment: Several videos in the above piece, sure look like 刁民 to me... Interesting that the PRC government seems more upset and vociferous in demanding the rights of its citizens be protected than the Swedish government has been about Gui Minhai...
China has called on Sweden to guarantee the safety and legitimate rights of Chinese tourists, Foreign Ministry spokesperson Geng Shuang said Monday.
"In the early morning of Sept. 2, three Chinese tourists, including two elderly, were brutally treated by local police on the outskirts of Stockholm," Geng told a routine press briefing.
"The Chinese Embassy in Sweden and Chinese Foreign Ministry have successively lodged representations with the Swedish side, calling on the Swedish side to conduct a thorough investigation, respond to the Chinese tourists' reasonable appeal in a timely manner and inform the Chinese side as soon as possible.
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Business, Economy, Finance And Trade
China’s Home Prices Rose at Fastest Pace in Almost Two Years - Bloomberg New-home prices gained 1.49 percent from the previous month, according to Bloomberg calculations based on data for 70 cities released by the National Bureau of Statistics on Saturday. That compared with a 1.2 percent increase in July. It was the sixth straight monthly acceleration.
中共中央办公厅 国务院办公厅印发《防范和惩治统计造假、弄虚作假督察工作规定》_中央有关文件_中国政府网--a new notice on preventing and punishing faking official data
Tencent, Hillhouse Team Up for China's Offshore Trillions - Bloomberg GaoTeng Global Asset Management Ltd., the duo’s one-year-old venture in Hong Kong, plans to start accepting money shortly from retail Chinese investors who have existing assets internationally, according to an emailed statement that didn’t provide an exact time frame. GaoTeng has gotten asset management and securities advisory licenses from Hong Kong’s Securities and Futures Commission. Its first product will be a fixed-income fund that will be open to individual investors in the city.
State-Owned Firms to Build $6.5 Billion Petrochemical Refinery in Alberta - Caixin Global State-owned petrochemicals giant China Petroleum and Chemical Corp. (Sinopec) will team up with a consortium to revive plans for a major petrochemicals plant in the tar-rich central Canadian province of Alberta. Sinopec and fellow state-owned company China State Construction Engineering Corp. (CSCEC) will partner with groups representing Alberta’s indigenous people, such as the Alberta First Nations Energy Centre, to build a Can$8.5 billion ($6.5 billion) petrochemicals refining facility, according to a statement from Stantec Consulting Services.
Trump Trade Winds Blow Egypt Oranges to Shanghai Fruit Shops - Bloomberg Fruit distributor Sunmoon Food Co. is shipping navel oranges from Egypt, kiwis from Italy and apples from Poland into China for the first time ever. The produce will fill the gap created when the Asian nation slapped tariffs on U.S. fruit as part of the escalating trade war between the Xi Jinping and Donald Trump administrations.
Beijing tightens rules for mortgages through housing provident funds - China Daily According to the new rules announced Thursday by the Beijing Municipal Housing Provident Fund Management Center, those who have no home in Beijing but have a housing loan record will be classified as second home buyers. For second home purchasers, the maximum amount they can borrow from the housing provident fund has been lowered to 600,000 yuan from 800,000 yuan. The new rules, which go into effect next Monday, also said that the loans issued through the housing provident fund are connected to the individual's deposits period. Home buyers can get a 100,000 yuan loan every year, with a maximum of 1.2 million yuan.
One of China's Wild Home Markets Is Broken After Harsh Curbs - Bloomberg “We can ignore so-called price data from Hainan,” Nicole Wong, the regional head of property research at CLSA Ltd. in Hong Kong, said ahead of the release. “There is no real market price.” Wong described it as a market “on hold.”
China Inc.'s $17 Billion Global Asset Selloff Is Far From Done - Bloomberg The unwinding of China Inc.’s overseas binge -- and the associated debt that spooked Chinese authorities -- looks set to continue. HNA is planning to exit its investment in Deutsche Bank AG, is seeking a buyer for its container-leasing Seaco business, plans to surrender eight floors of office space in Hong Kong and is selling stakes in various Chinese units, people familiar with the matters have said. What’s more, HNA is said to be dangling billions of dollars in real estate in the U.S., London and China in front of prospective buyers.
Collapsing Investment Doesn’t Mean Collapsing China - WSJ $$ Things could get tougher early next year, particularly since policy makers are now dialing back the critical slum redevelopment program. But for now, the message emanating from China is still a relatively mild slowdown. Investors hoping for wholesale capitulation on trade or a 2015-style massive stimulus will likely be disappointed.
China Spyware Maker Hikvision Hostage to Surveillance Backlash - Bloomberg For the foreign investors that helped drive that rally, Hikvision’s numbers offer plenty to like. Return on equity has hovered around 34 percent for the past couple of years, while margins are north of 20 percent. The company commands almost 40 percent of the surveillance market in China and 11 percent globally, ranking it among the world’s biggest.
Politics, Law And Ideology
总书记发出深化改革动员令（新思想从实践中产生系列报道之一·深圳篇）--时政--人民网 People's Daily has started a new series "from practice arises new thinking" on Xi and reform...this first one covers Xi's 2012 trip to Shenzhen, and does give good play to Deng Xiaoping...so far there are three in the series: 习近平叮嘱我们护好绿水青山（新思想从实践中产生系列报道之二 · 浙江安吉篇）; 习近平帮我们挖“穷根”（新思想从实践中产生系列报道之三·福建宁德篇）
Homo Xinensis Ascendant – China Heritage - Geremie Barme With the announcement of China’s ‘Third Historical Leap’ to Becoming Mighty, and given the fact that the year 2018 marks the fortieth anniversary of the formal launch of the economic reforms that have transformed the country, it seemed likely that Xi Jinping’s ideologues — or what is known as the ‘Xi Thought Group’ under the direction of Wang Huning 王滬甯, an éminence grise who achieved membership of the Standing Committee of the Party’s Politburo — would have been drafting a third historical resolution. As had been the case with the 1981 resolution, this would require an analysis not only of the successes, but more importantly a critique of the failures of Xi’s predecessors, the most prominent of whom was the ‘Architect of Reform’, Deng Xiaoping himself. // Comment: Will there be a 4th Plenum in the last 100 or so days of 2018?
Analysis of 13th NPCSC Legislative Plan Pt. 1: Relisted, Dropped & New Projects – NPC Observer Last week, the 13th NPC Standing Committee (NPCSC) released its five-year legislative plan (“13th NPCSC Plan”), setting the contours of its legislative agenda through 2023. As a refresher, the Plan consists of three classes of projects, with 69 top-priority ones in Class I, 47 lower-priority ones in Class II, and a few potential subjects to legislate on in Class III. In this and the next post, we will take a deep dive into the new legislative plan, from both qualitative and quantitative angles. Below, we will compare the 13th NPCSC Plan with its predecessor, distill a few themes from the new plan, and highlight some new projects. The Plan is clear evidence that, unsurprisingly, the NPCSC, though the permanent body of China’s constitutionally “highest organ of State power,” does not have any independent policymaking authority but only serves to implement through legislation the Communist Party’s policy directives.
Famous Liquor-Maker’s Onetime Chairman Tried for Corruption - Caixin Global A former chairman of famous liquor-maker Jiannanchun has stood trial on charges of bribing a government official and embezzling a fortune from the company during its reorganization more than a decade ago.
Foreign and Military Affairs
China-Russia Relations: Strategic Implications and U.S. Policy Options - NBR - Robert Sutter The China-Russia relationship continues to deepen and broaden with ever more negative implications for the U.S. The drivers of Sino-Russian cooperation overshadow the brakes on forward movement at the U.S. expense. The momentum is based on (1) common objectives and values, (2) perceived Russian and Chinese vulnerabilities in the face of U.S. and Western pressures, and (3) perceived opportunities for the two powers to expand their influence at the expense of U.S. and allied countries that are seen as in decline. The current outlook is bleak, offering no easy fixes for the U.S. Nonetheless, there remain limits on Sino-Russian cooperation. The two governments continue to avoid entering a formal alliance or taking substantial risks in support of one another in areas where their interests do not overlap. Longer-term vulnerabilities include Russia’s dissatisfaction with its increasing junior status relative to China, China’s much stronger interest than Russia in preserving the existing world order, and opposition to Russian and Chinese regional expansion on the part of important lesser powers in Europe and Asia seeking U.S. support.
Quantum Hegemony? | Center for a New American Security: China is positioning itself as a powerhouse in quantum science. Within the past several years, Chinese researchers have achieved a track record of consistent advances in basic research and in the development of quantum technologies, including quantum cryptography, communications, and computing, as well as reports of progress in quantum radar, sensing, imaging, metrology, and navigation. Their breakthroughs demonstrate the successes of a long-term research agenda that has dedicated extensive funding to this domain while actively cultivating top talent...
China Is Buying African Media’s Silence – Foreign Policy It is official. After more than a decade of planning, setting up, and bankrolling African media, the Chinese are finally ready to cash in on their investment. Last week, I decided to dedicate my weekly column in a South African newspaper to discussing the persecution of more than 1 million Uighur Muslims in China’s Xinjiang province...No more than a few hours after the piece was published by newspapers belonging to Independent Media, South Africa’s second-largest media company, I was told that the column would not be uploaded online. A day later, my weekly column on neglected people and places around the globe, which I have been writing since September 2016, was immediately canceled.
U.S. Drops Charges Against Ex-Senegal Official in Chinese Energy Bribery Case - The New York Times In a one-page filing, federal prosecutors in Manhattan said on Friday that they were withdrawing charges against the former official, Cheikh Gadio, but offered no explanation for the decision. Dismissals of this sort often come with agreements not to prosecute in return for testimony. The dismissal of the criminal complaint against Mr. Gadio, who had served as Senegal’s foreign minister, came roughly 10 months after he was arrested along with Chi Ping Patrick Ho in a high-profile foreign bribery case that could shed light on the operations of CEFC China Energy, an energy conglomerate with close ties to the Chinese government.
'Great founder': Venezuela's Maduro praises Mao during China trip | Venezuela News | Al Jazeera Calling the founder of communist China a "giant of the homeland of humanity", Maduro bowed three times in front of a wreath at the massive mausoleum in the capital, Beijing, where Mao's body lies.
The curious case of the burgled professor - NZ Herald An investigation into the burglary of a professor whose work exposed China's influence in New Zealand has led detectives offshore with inquiries raising questions over a possible intelligence operation. Five police staff have worked over the past seven months investigating the February burglary of the home of University of Canterbury Professor Anne-Marie Brady, as well as other break-ins at her office on campus.
PM says that Hambantota lease can be terminated if need arises – Interview In an interview conducted by Nitin A. Gokhale, Prime Minister Ranil Wickremesinghe addresses the security aspects of the lease of Hambantota Port, Sri Lanka debt and his relationship with President Maithripala Sirisena. At the interview conducted in Hanoi, where he attended the 3rd Indian Ocean Conference recently, Prime Minister reaffirmed the security of the region following the lease of Hambantota Port to China and stated that Sri Lankan territory will not be used for anything harmful to Indian security. He says that, although the joint venture has a 70-year lease, the government can at any time terminate it, if the government thinks it has to be done.
AsiaGlobal Online – China, Venezuela, and the Illusion of Debt-Trap Diplomacy the emerging conventional wisdom that China gains when the countries it lends to are unable to service their debts risks misunderstanding how China has and will become a victim of its own lending missteps and hubris. No Chinese debt-based relationship is more instructive in this regard than its dysfunctional ties to Venezuela.
Chinese Deal to Take Over Key Israeli Port May Threaten U.S. Naval Operations, Critics Say Chinese company is planning to take over management of Israel’s Haifa port as Beijing continues to advance its global influence in the form of economic projects and big commercial deals. The Haifa port sits close to the hub of the Israeli navy base that is reportedly home to the country’s nuclear-capable submarine force, according to The Times of Israel. Israeli critics are calling for an investigation into potential security issues posed by the Chinese presence along the country’s Mediterranean coast.
Japanese submarine conducts first drills in South China Sea | Reuters A Japanese submarine has for the first time joined a naval drill in the South China Sea, the Ministry of Defence said on Monday, in an expansion of Japanese activity in the disputed waterway claimed by China and others. The submarine Kuroshio took part in the exercise on Thursday with other Japanese warships, including the Kaga helicopter carrier, which is on a two-month tour of Southeast Asia and the Indian Ocean, a ministry spokesman said.
Chinese Navy Participates in Major Australian Exercise for First Time | The Diplomat Kakadu 2018, Australia’s largest air and naval exercise, concludes this week and marks the first time that China’s PLA Navy has participated. The Kakadu series of exercises is held every other year in the seas north of Darwin in Australia’s Northern Territory. The exercise began on August 30th and concludes on September 15th.
China is reshaping the international order | Financial Times $$ - Zhou Bo Perhaps the most significant global change is the dramatic decline in violence. As the cognitive psychologist Steven Pinker has pointed out, we are living in the most peaceable era in our species’ history. At the same time, the global economic pie is being divided up in new ways and the east’s share — led by China and India — is increasing rapidly. There is a great deal at stake...This change could herald the beginning of a grand reconciliation and a new equilibrium of power in the international order. But, if the US should find the changes intolerable, and responds accordingly, these could also be very dangerous times.--The writer is an honorary fellow at the PLA Academy of Military Science in China
This Iowa city forged an unusual friendship with China and its president. Then came the soybean tariffs. - The Washington Post Despite the friction, Muscatine residents remain largely positive about China and committed to the citizen exchanges that have helped build strong trade and cultural ties. In a speech at the dinner honoring the Zhengding delegation, Muscatine’s Sarah Lande stressed the need to strengthen relations “not just between our national governments but between our cities, towns, farmers, educators and bankers.” The tariff dispute, she said in an interview afterward, makes such nongovernmental bonds all the more important.
Pakistan's army chief visits Beijing after Silk Road tension | Reuters Bajwa may be hoping in Beijing to smooth out any Chinese alarm at comments last week by Pakistan’s commerce minister, Abdul Razak Dawood, who suggested suspending for a year projects in the China-Pakistan Economic Corridor (CPEC), the Pakistan leg of China’s Belt and Road Initiative that includes recreating the old Silk Road trading route.
Could China Help Ignite a Second War over the Falkland Islands? | The National Interest The British Royal Navy's (RN) amphibious assault ship HMS Albion is on a four-month tour of Asia and was recently harassed by Chinese ships and aircraft in an August 31 South China Sea encounter . No doubt wanting to convey displeasure at the United Kingdom's presence in Asia, the on September 6, Sina.com provided an unsubtle reminder that China could once again try to rearm Argentina to the point it may be tempted to ignite a second war over the Falklands Islands. For starters, the Sina posting features a provocative image of a Chinese Chengdu Aircraft Corporation (CAC) FC-1/JF-17 lightweight fighter in Armada Argentina (Argentine Navy) colors, having just attacked the new RN aircraft carrier HMS Queen Elizabeth, replete with a billowing fireball. The article then recounts how Argentine-British tensions over the Falklands persist, noting the recent September 2 incident in which the patrol ship HMS Clyde chased the ARA Puerto Deseado survey ship, dissuading it from venturing too close to the Falklands
Air Force must grow to levels not seen since the Cold War to confront China and Russia, officials say - The Washington Post A new internal study found that the service needs to increase the number of operational squadrons by about 25 percent by 2030, from 312 today to 386. The proposed changes, which have not been worked into Pentagon budget plans, would require Air Force personnel levels to grow by about 40,000 service members on top of current growth projections, officials said. Air Force officials have not yet completed an estimate of what the increase would cost.
Taiwan officials in New York on United Nations charm offensive | South China Morning Post Taiwan is launching a fresh charm offensive in its bid to rejoin the United Nations, or at least its agencies, amid sour China-US relations and growing concerns over Chinese economic and military expansion in the Indo-Pacific region.
Is Beijing’s offer of residence permits to Taiwanese a trick or treat? | South China Morning Post Raymond Sung, a member of the supervisory board of Taiwan Democracy Watch, a pro-independence group, said the residence permit scheme was “China’s latest tactic to chip away at Taiwan’s sovereignty”. “The [use of a personal] 18 digit code is the same as on the Chinese ID card. Its design is like the mainland Chinese ID card,” he said. “By issuing such a card, China is trying to make the world accept the idea that the holders are Chinese people. This way, Beijing is quietly eroding the sovereignty of Taiwan.”
Taiwan quietly lets Chinese state company take over port area - Nikkei Asian Review Given deepening confrontations between Beijing and both Washington and Taipei over a range of issues, it looked doubtful that Cosco would be allowed to take over the assets of Hong Kong-based Orient Overseas at Kaohsiung, Taiwan, and Long Beach, California, near Los Angeles. On July 7, Cosco and Orient Overseas, better known under its operating brand OOCL, said that U.S. regulatory approval had been secured, with the condition that the Long Beach terminal be put into a trust and then sold. Cosco then announced the completion of its takeover on July 27, with no mention made of Kaohsiung.
Tech And Media
China willing to share opportunities in digital economy: Xi - Xinhua Chinese President Xi Jinping on Monday stressed that China is willing to share the development opportunities in the digital economy with other countries and called for joint efforts in promoting artificial intelligence (AI) for the benefit of humankind. Xi made the remarks in a congratulatory letter to the opening of the World Artificial Intelligence Conference in Shanghai. // CCTV Evening News on his letter - 习近平致信祝贺2018世界人工智能大会开幕强调 共享数字经济发展机遇 共同推动人工智能造福人类
China Calls for Borderless Research to Promote AI Development - Bloomberg The summit was used by several U.S. companies to show off their dedication to developing AI in China. Microsoft Research Asia and Amazon Web Services both announced new labs in Shanghai, while Google’s Jay Yagnik showed off slides of the company’s AI activities in the country. The search giant, a unit of Alphabet Inc., is a key sponsor of the event. Google Chief Executive Officer Sundar Pichai was invited to the conference but declined to attend. The company’s Beijing research center and its plans to release search products in China that conform to the country’s censorship laws have faced a strong backlash from U.S. lawmakers.
China’s Bytedance shows way to navigate ‘great firewall’ | Financial Times $$ The wildly popular Chinese short-video apps Douyin and Tik Tok look almost the same, with identical interfaces, video editing tools and logos. But there is a key difference: Douyin can only be downloaded from a Chinese app store by someone on the mainland, while Tik Tok is accessible only to users outside of the country. Bytedance, the Chinese internet company behind both fast-growing platforms, has created two separate apps for users at home and abroad rather than attempt to manage content flowing in and out of China’s “ great firewall”
India dials Cisco, Samsung, Nokia, Ericsson, no Chinese Huawei, ZTE - ET Telecom The Department of Telecommunications (DoT) has excluded Huawei and ZTE from its list of companies asked to partner it for trials to develop 5G use cases for India, indicating that New Delhi may well follow the US and Australia in limiting involvement of Chinese telecom equipment makers in the roll-out of the next-gen technology.
FOMO in China is a $7 billion industry - Marketplace Podcasts with subscription fees, interactive Q&A’s online with experts or celebrities and live-streaming lecture-sessions where the audience can participate and pay as they wish are what people in China refer to as the "pay-for-knowledge" economy. It was estimated to be worth $7.3 billion last year, with the bulk of the revenues from paid podcasts, according to a research institute run by China's State Administration of Press, Publication, Radio, Film and Television. The figure is focused only on consumers paying directly for content online and does not include ad-driven podcasts.
Google Employees Are Quitting Over The Company’s Secretive China Search Project While current employees declined to provide the list itself or to specify most of the names on it, three sources familiar with the matter confirmed the existence of the list, which is made up largely of software engineers whose experience at Google ranges between one and 11 years. Google declined to comment on the list.
Alibaba to focus on ‘positive’ content as it seeks share of China’s hot digital entertainment market | South China Morning Post The company will focus on selecting titles that advocate a “good world view and entertainment value”, according to Alibaba Literature’s chief executive Li Zhiqian in an interview with mainland Chinese media outlet Beijing News. Li also serves as chief financial officer of Alibaba’s digital entertainment business unit.
Amazon Investigates Employees Leaking Data for Bribes - WSJ The practice, which violates company policy, is particularly pronounced in China, according to some of these people, because the number of sellers there is skyrocketing....Amazon is investigating a number of incidents involving employees, including some in the U.S., suspected of accepting these bribes, according to people familiar with the matter. An internal probe began in May after Eric Broussard, Amazon’s vice president who oversees international marketplaces, was tipped off to the practice in China, people familiar with the matter said. Amazon has since shuffled the roles of key executives in China to try to root out the bribery, one of these people said.
Energy, Environment, Science And Health
Senior CPC official calls for efforts in science promotion - Xinhua | Senior Communist Party of China (CPC) official Wang Huning on Monday stressed the need to push forward science promotion work. Wang, a Standing Committee member of the Political Bureau of the CPC Central Committee and a member of the Secretariat of the CPC Central Committee, made the remarks during a visit to the China Science and Technology Museum in Beijing, one of the venues for the National Science Day.
Chinese Thesis Ghostwriting Scandal Reveals Huge Gray Market - Caixin Global In an audio recording recently exposed by Chinese media, an associate biology professor named Han Chunyu discussed brokering thesis ghostwriting services for students, charging 7,000 yuan ($1,019) for a doctoral thesis, and 4,000 – 5,000 yuan for a master’s paper. Han is affiliated with Hebei University of Science and Technology (HEBUST) in the northern city of Shijiazhuang. In the recording, Han also offered money in exchange for having his wife’s name added to a paper as a co-author... This was not the first time Han, once seen as China’s next Nobel Prize winner, appeared in news headlines.
Iran Endures Longest Gap in China Oil Buying in at Least 3 Years - Bloomberg While the pause in shipments probably doesn’t mean China will to bow to pressure from U.S. President Donald Trump -- Beijing is said to have resisted such curbs -- it might indicate that the Asian country’s refineries want better terms for Iranian cargoes.
Chinese researchers make breakthrough in deep genome annotation - Xinhua Genome annotation, or DNA annotation, is the process of identifying the location of genes and all of the coding regions in a genome and determining what those genes do. The research group, led by Ge Feng of Institute of Hydrobiology under the Chinese Academy of Sciences, made a deep genome annotation of Phaeodactylum tricornutum, a unicellular photosynthetic eukaryote, and drew a refined map of its proteome, using an integrated proteogenomic pipeline, according to a paper on the latest issue of Molecular Plant.
FAST to be available to world's astronomers by 2019 - Global Times Test runs and debugging operations are still being conducted on FAST and testing is expected to be completed in 2019, the Xinhua News Agency reported on Saturday, noting that some parameters have already met or surpassed design standards.
Global health regulators find second toxin in common heart drug | Reuters European and North American regulators have found a second toxin that may cause cancer in humans in a commonly used blood pressure drug made by Chinese firm Zhejiang Huahai Pharmaceutical Co Ltd. Health regulators in the European Union, United States and Canada had already recalled drugs made with the company’s active pharmaceutical ingredient valsartan after finding traces of the chemical N-nitrosodimethylamine (NDMA), considered a potential human carcinogen, in the medicine.
America needs more Chinese teachers, but Donald Trump’s immigration policies may make it harder to get them | South China Morning Post “It’s a double-edged sword, because on the one hand, we don’t produce Americans with high enough proficiency in Chinese to become teachers,” said Shuhan Wang, head of the Asia’s Society’s Chinese Early Language and Immersion Network, who estimates that well over 80 per cent of current primary and secondary school Chinese language teachers are foreign born. “On the other hand, then we are tightening the process of allowing teachers legal status to teach here.”
Web Users Expose Faked Police Photo | China Media Project Special funds from China’s Central Treasury have been approved for political and ideological work at China’s universities (高校思想政治工作专项资金), entering the overall budget for the Ministry of Education. In recent days, the Ministry of Education has released a document called Provisional Regulations for the Management of Special Funds for Political and Ideological Work at Universities (高校思想政治工作专项资金管理暂行办法), providing the specific applications, management and principles of the special fund at Chinese universities.