Threats over Hong Kong primary; Huawei loses the UK; South China Sea; Xu Zhangrun

One of those days where I am feeling like I have lost the plot so do not have anything interesting to write for commentary.

The official PRC reactions to the US government statements in the last day about the South China Sea have so far been relatively muted and rhetorically predictable. I will bet that is not because there will not be a reaction but rather that the relevant authorities are still working through what the shift means and how best to respond.

Today’s Essential Eight:

  1. Official fears the Hong Kong Legco election not rigged enough

  2. UK trying to rectify its “golden error” with China

  3. South China Sea

  4. More US-China

  5. TikTok

  6. Video of PRC police trying to control speech globally

  7. Xu Zhangrun released from custody, fired from Tsinghua

  8. Dushan debt crisis in ghostly video

Thanks for reading.


The Essential Eight

1. Official fears the Hong Kong Legco election not rigged enough

CE announces investigation into weekend primaries - RTHK

"If this so-called primary election's purpose is to achieve the ultimate goal of delivering what they call a 35-plus, with the objective of objecting to (and) resisting every policy initiative of the Hong Kong SAR Government, then it may fall into the category of subverting the state power, which is now one of the four types of offences under the new national security law," Lam said.

Manipulating Hong Kong LegCo election won't be allowed: spokesperson - Xinhua

A spokesperson for the Hong Kong and Macao Affairs Office of the State Council said Tuesday that it will never allow any illegal manipulation in the Legislative Council (LegCo) election in the Hong Kong Special Administrative Region (HKSAR)...

The so-called "primaries" sought to hijack public opinion under the pretext of a "referendum," said the spokesperson, noting that they posed a grave threat to the constitutional order of the HKSAR and harmed the democratic electoral system in Hong Kong.

The so-called "primaries" and "referendum" are not stipulated in the Basic Law or any existing law on an election in Hong Kong, rendering such acts organized by any group or individual illegal, the spokesperson said.

Also, the so-called "primaries" have severely disturbed the election order and may have violated the national security law for the HKSAR, the spokesperson added.

Hong Kong primaries: China declares pro-democracy polls 'illegal' | The Guardian

China has declared primaries held by Hong Kong’s pro-democratic parties on the weekend “illegal” and the city’s leader has announced an investigation, saying that the candidates’ intention to vote against government legislation could break national security laws.

The primary polls, while not a formal part of Hong Kong’s election process, drew an estimated 600,000 people out to vote for democracy candidates ahead of the legislative council elections scheduled for September...

“The goal of organiser Benny Tai and the opposition camp is to seize the ruling power of Hong Kong and ... carry out a Hong Kong version of ‘colour revolution’,” said a spokesman for the Liaison Office, whose chief is also in charge of implementing the national security laws.

The statement came in support of Hong Kong’s chief executive, Carrie Lam, who said that democrats coordinating to win a majority and veto the government’s budget could be against the anti-sedition laws, and would be be investigated.

On the Pan-Democratic Primary Election in Hong Kong - United States Department of State

We note with grave concern Hong Kong Chief Executive Carrie Lam’s threat that this primary may have violated Beijing’s new “national security” law for the territory, once again demonstrating the Chinese Communist Party’s fear of democracy and its own people’s free thinking.  We will be watching developments closely, especially as the September 6 Legislative Council elections draw closer.

HK to prepare for spike in youths in correctional facilities: dept chief - Global Times

The head of Hong Kong's Correctional Services Department (CSD) said a large number of young people are expected to be put into correctional institutions in the future, and the CSD will expand manpower and strengthen civic education for them

For U.S. tech firms, Hong Kong security law makes business a lot riskier - The Washington Post

Uber has publicly lauded Hong Kong's approach to the coronavirus pandemic and says it is bullish about the city's future. Privately, Uber executives have pitched themselves as a potential poster child in discussions with the Hong Kong government, promising investment and jobs when other companies are shelving expansions or planning exits.

"The thinking is that Uber wouldn't be a target if it demonstrates itself as one of the good guys," said a person familiar with the company's thinking

Hong Kong’s protest movement stymied by Apple's China ties — Quartz

he primary organizers had developed their own voting platform, called PopVote, with both an iOS and Android app for it. While the Android app was quickly approved by the Google Play store, the iOS app was initially rejected because of several issues with the code. PopVote developers resubmitted the app with the required changes within hours, but never heard back from Apple despite multiple attempts to contact the company, according to Edwin Chu, an IT advisor for the voting platform. “We think it is being censored by Apple,” Chu said.

Hong Kong reports 48 new coronavirus cases - Reuters

Hong Kong reported 48 new coronavirus cases on Tuesday, including 40 that officials said were transmitted locally, ahead of new social distancing measures due to come into force at midnight.


2. UK trying to rectify its “golden error” with China

Huawei to be removed from UK 5G networks by 2027 - GOV.UK

Buying new Huawei 5G equipment banned after 31 December 2020

All Huawei equipment to be removed from 5G networks by end of 2027

Existing ban on Huawei from most sensitive ‘core’ parts of 5G network remains

Digital Secretary Oliver Dowden said in a statement to the House of Commons: “By the time of the next election we will have implemented in law an irreversible path for the complete removal of Huawei equipment from our 5G networks”.

U.K. Bars Huawei From 5G Network, Raising Tensions With China - The New York Times

“American sanctions left the U.K. with little choice,” said Priya Guha, a former British diplomat who represented the country’s interests in Silicon Valley. “There was a bit of checkmate by the U.S.”

Comment: The pandemic and Beijing's public contempt towards the UK over Hong Kong, as well as the wolf warriors like Liu Xiaoming, ambassador to the UK, also played a role in the overall souring of views towards the PRC

UK-China relations: from ‘golden era’ to the deep freeze | Financial Times "The Big Read" $$

The widening row with Beijing alarms those once-influential voices that continue to champion engagement. According to Jim O’Neill, a former Treasury minister under Mr Cameron and one of the architects of the Northern Powerhouse strategy, the “impetus to cut ourselves off from China seems to me a bit like the weird self-imposed dilemmas that drove Brexit”...

Critics argue that not only were many of these gains illusory, but they came at a cost in terms of dismaying Britain’s allies and weakening its security. Indeed, the entire Cameron-era policy betrayed a wholesale misunderstanding of China’s assertive direction under the leadership of Mr Xi. “It’s been called the golden era, but I prefer to call it the ‘golden error’,” says Charles Parton...

“If we are going to cut ourselves off from our privileged access to the European market and if we recognise that the US economy operates in quite a protectionist way, are we going also to isolate ourselves from China, the biggest source of growth in the world?” asks Peter Mandelson, a former cabinet minister who now heads the Great Britain-China Centre. “Where are we going to make a living?”

Boris Johnson tries to find path through US-China cold war | Financial Times $$

While the ban was welcomed by pro-Washington Tory MPs, there was criticism of Mr Johnson’s decision to let Huawei 5G kit stay in the British system until 2027, while its lower-tech 3G and 4G equipment will never have to be removed.

That decision, along with an agreement that Huawei can continue to provide full-fibre broadband equipment for another two years, was partly an attempt by the prime minister to limit the potential damage to Britain’s digital development.

But it was also an effort to avoid another escalation of tensions with Beijing, already inflamed by China’s security crackdown on the former British colony of Hong Kong.

Huawei says UK ban threatens to move UK into digital slow lane - Xinhua

"This disappointing decision is bad news for anyone in the UK with a mobile phone," said Ed Brewster, a spokesperson for Huawei UK in a statement.

"Instead of 'levelling up', the government is levelling down and we urge them to reconsider. We remain confident that the new U.S. restrictions would not have affected the resilience or security of the products we supply to the UK," Brewster said.

Huawei ban 'would depress GDP and spark inflation', think tank warns | Business News | Sky News

Sky News has obtained copies of separate reports to be published in the coming days by the National Institute for Economic and Social Research (NIESR) and Cambridge Econometrics - which was commissioned by the China-Britain Business Council (CBBC) - which underline the trade implications of a deterioration in relations between London and Beijing.

Now our China illusion is ending, can the West revive its love of freedom? The Telegraph

Universities have as much trouble as businesses. Since April, this column has been trying to find out from Jesus College, Cambridge, about the character and finances of its China Centre and its China/UK Global Issues Dialogue Centre...

The Dialogue Centre published in February a supposedly independent report about telecommunications reforms. It praised Huawei, advancing ideas on the subject beneficial to Chinese interests. Most unusually, the report carried a laudatory foreword from the vice-chancellor of Cambridge University, Stephen Toope.

On Thursday, however, menaced by Freedom of Information requests, Jesus College admitted it had accepted £200,000 for the Dialogue Centre from a branch of the Chinese State Council, £55,000 from another branch for the China Centre and £150,000 from Huawei for the digital report which Prof Toope liked so much. Until then, not even the Fellows of Jesus College – the governing body – had been informed

Lord Browne quits as Huawei UK chairman as government ban looms | Business News | Sky News

Lord Browne of Madingley, the former BP boss, is to step down early as the UK chairman of Huawei Technologies as it faces a government ban on involvement in the UK's 5G infrastructure.

Sky News has learnt that Lord Browne gave two months' notice of his resignation in the last few days, meaning he will step down from Huawei's UK board in September.

Welcoming the United Kingdom Decision To Prohibit Huawei From 5G Networks - United States Department of State

The momentum in favor of secure 5G is building. The UK joins democracies such as the Czech Republic, Denmark, Estonia, Latvia, Poland, Romania, and Sweden in banning Huawei from future 5G networks. Clean carriers like Jio in India, Telstra in Australia, SK and KT in South Korea, NTT in Japan, and others have also prohibited the use of Huawei equipment in their networks.


3. South China Sea

Speech today by assistant secretary of East Asian and Pacific Affairs David Stilwell - The South China Sea, Southeast Asia’s Patrimony, and Everybody’s Own Backyard - United States Department of State

Only the gullible or the co-opted can still credit Beijing’s pretense of good global citizenship. Today we are hearing more and more voices raised against Beijing’s aggressiveness and unilateralism.

We welcome the clear insistence last month by Leaders from the Association of Southeast Asian Nations that South China Sea disputes should be resolved on the basis of international law, including UNCLOS...

Let me briefly raise four other important aspects of the South China Sea issue: (1) the role of Beijing’s state-owned enterprises (SOEs); (2) the negotiations between China and ASEAN over a Code of Conduct; (3) Beijing’s push for “joint development” of Southeast Asian resources; and (4) Beijing’s campaign for a seat on the International Tribunal on the Law of the Sea (ITLOS).

Comment: So sanctions on the SOEs involved in the South China Sea are possible, including against China Construction & Communications Corporation (CCCC) and China National Offshore Oil Corporation, (CNOOC), both named here?

A few years ago, many believed that Beijing’s South China Sea abuses were mostly a local phenomenon, a kind of limited indulgence for a rising power finding its way in the world. Today we know that the Chinese Communist Party’s neo-imperial ways aren’t incidental to its character but are an essential feature of a nationalist and Marxist-Leninist mindset. Beijing wants to dominate its immediate neighborhood – and eventually impose its will and its rules on your neighborhood too, wherever you may be.

U.S. says room for sanctions in response to China in South China Sea - Reuters

“Nothing is off the table ... there is room for that. This is a language the Chinese understand - demonstrative and tangible action,” David Stilwell, the assistant secretary of state for East Asia, told a Washington think tank when asked if sanctions were a possible U.S. response to Chinese actions...

Stilwell said the tougher U.S. position meant “we are no longer going to say we are neutral on these maritime issues.”

“When a (Chinese) drilling rig plants itself in Vietnamese or Malaysian waters, we’re going to be able to make a positive statement,” he said.

But ten years ago we heard tough rhetoric from DC and yet here we are - U.S. takes a tougher tone with China - Washington Post 2010

Faced with a Chinese government increasingly intent on testing U.S. strength and capabilities, the United States unveiled a new policy that rejected China's claims to sovereignty over the whole South China Sea. It rebuffed Chinese demands that the U.S. military end its longtime policy of conducting military exercises in the Yellow Sea. And it is putting new pressure on Beijing not to increase its energy investments in Iran as Western firms leave...

The decision to confront China on the South China Sea dates back several months, after administration officials noticed that the sea -- an international waterway through which more than 50 percent of the world's merchant fleet tonnage passes each year -- had crept into the standard diplomatic pitter-patter about China's "core interests." In March, Assistant Minister of Foreign Affairs Cui Tiankai told two senior U.S. officials that China now views its claims to the 1.3 million-square-mile sea on par with its claims to Tibet and Taiwan, an island that China says belongs to Beijing.

Question: Was there anything realistic and short of outright conflict that the US could have done in the last ten years to prevent Beijing from making so much progress in turning the South China Sea into almost a PRC lake?

Foreign Ministry Spokesperson Zhao Lijian's Regular Press Conference on July 14, 2020

The US, as a country outside the region, wishes nothing but chaos in the South China Sea so that it can gain from the muddied waters. To this end, it goes to great length to stoke trouble and sow discord between China and other regional countries, thwarting and undermining efforts by China and ASEAN countries to maintain peace and stability. The US statement also deliberately warped the Chinese delegate's remarks at the 2010 ASEAN Regional Forum (ARF) Meeting. To get facts straight, what the Chinese delegate said at the meeting was that China always holds that countries, big or small, are all equals; relevant disputes should be resolved peacefully through negotiation and consultation by parties directly concerned based on the merits of the issue. The US will never succeed in driving a wedge among regional countries.

We strongly deplore and firmly oppose the wrong move by the US and urge it to stop stirring up trouble on the South China Sea issue and stop continuing down the wrong path. China will always firmly defend its sovereignty and security, safeguard friendly cooperative relations with regional countries, and uphold peace and stability in the South China Sea.

Inciting confrontations in S.China Sea part of US ‘isolate China’ strategy - Global Times

Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai, said it is clear that the US is instigating the world, especially countries neighboring China, to increase their confrontations with China, and further decouple from China.

The US and Malaysia are not allies, and there is no treaty obligation for the US to protect the country. "It is evident that the US is telling Malaysia that you do not have to be afraid of confronting China. I am supporting you. " Wu told the Global Times on Tuesday, noting that it is an old trick played by the US to fool other nations and turn them into pawns...

Vietnam, which holds the ASEAN rotating presidency and a non-permanent seat in the UN Security Council in 2020, may take new steps to internationalize and expand the South China Sea issue, analysts predicted.

They suggested China prepare for the worst as the US may take Vietnam as its new "agent" in destabilizing the South China Sea, and use the Asian country as an important base for forward deployment of its military and coast guard, stepping up intelligence gathering, reconnaissance, and containment of Chinese activities in the South China Sea.

US is largest manipulator, biggest threat to stability in South China Sea: analysts - Global Times

Zhuang Guotu, head of Xiamen University's Southeast Asian Studies Center, told the Global Times on Tuesday that Pompeo's latest statement on the South China Sea was not surprising, and that he was playing his old tricks, as the US State Department issued a similar statement a year ago which called China's South China Sea claims "unlawful," and accused China of using maritime militia to "intimidate, coerce, and threaten other nations."..

The Arbitral Tribunal's decision in 2016 mentioned by Pompeo is illegal, is not recognized by China, and does not affect China's historical rights over the South China Sea, Zhuang said.

By mentioning the Arbitral Tribunal's decision, Pompeo aimed to form a common position for ASEAN members on this issue, and wheedle them into being part of its so-called global alliance in the Asia-Pacific region to target China, Song Zhongping, a Chinese military expert and commentator, told the Global Times on Tuesday.

US South China Sea stand new but no surprise, analysts say | South China Morning Post

Hu Bo, director of the South China Sea Strategic Situation Probing Initiative (SCSPI), a Peking University think tank, said the US comments were meant to be divisive.

“The purpose of this statement is obvious, which is to drive wedges between China and other claimants,” Hu said.

The under-the-radar South China Sea projects Beijing uses to cement its claims | South China Morning Post

“A diversified approach can show China’s sovereignty, and managing related affairs and providing services to others in the region can put China in a stronger position in relation to the claims,” said Zhang Mingliang, a specialist in South China Sea studies at Jinan University in the southern Chinese city of Guangzhou.

The Ministry of Foreign Affairs of Republic of China (Taiwan) states the following position related to ROC sovereignty over the South China Sea Islands - News and Events - Ministry of Foreign Affairs, Republic of China (Taiwan) 中華民國外交部 - 全 

1. The South China Sea Islands are part of the territory of the Republic of China. That the ROC is entitled to all rights over the South China Sea Islands and their relevant waters in accordance with international law and the law of the sea is beyond dispute. On July 19, 2016, President Tsai Ing-wen outlined four principles and five actions to deal with South China Sea issues together with the international community.


4. More US-China

China books record U.S. corn purchase, also buys soybeans - Reuters

The U.S. Agriculture Department said that private exporters reported that China bought 1.762 million tonnes of corn for shipment in the 2020/21 marketing year that begins on Sept 1.

The sale eclipsed the previous single-day record sale to China of 1.45 million tonnes of corn, set in December 1994, according to USDA data.

Question: Will the widespread flooding reducing China's ag output, causing it to need to import even more this year?

China fulfilling phase-one trade deal with US despite pandemic | english.scio.gov.cn

Trade between China and the U.S. dipped 6.6% in the first half of 2020 amid the COVID-19 pandemic. Nevertheless, China is continuing to fulfill the China-U.S. phase-one economic and trade agreement, said Li Kuiwen, spokesperson of the General Administration of Customs.

Trump administration to soon end audit deal underpinning Chinese listings in U.S. - official - Reuters

The Trump administration plans to soon scrap a 2013 agreement between U.S. and Chinese auditing authorities, a senior State Department official said, a move that could foreshadow a broader crackdown on U.S.-listed Chinese firms under fire for sidestepping American disclosure rules...

The lack of transparency has prompted administration officials to lay the groundwork to exit the deal soon, according to Keith Krach, undersecretary for economic growth, energy and the environment, in a sign the PCAOB will give up on efforts to secure information from the Chinese.

U.S. and China, Caught in ‘Ideological Spiral,’ Drift Toward Cold War - The New York Times

“It is not difficult to see that under the impact of the coronavirus in this U.S. election year various powers in the U.S. are focused on China,” Zhao Kejin, a professor of international relations at Tsinghua University, wrote in a recent paper. “The China-U.S. relationship faces the most serious moment since the establishment of diplomatic relations.”

While he eschewed the idea of a new Cold War, his alternative phrasing was no more reassuring: “The new reality is China-U.S. relations are not entering ‘a new Cold War’ but sliding into a ‘soft war.’”

‘People will die’: Violent US-China clash possible soon, senior GOP lawmaker says

“I would predict there will be a clash within the next three to six months,” Florida Rep. Ted Yoho, the top Republican on the House Foreign Affairs subcommittee for Asia, told the Washington Examiner.


5. TikTok

The TikTok War – Stratechery by Ben Thompson

The point, though, is not just censorship, but its inverse: propaganda. TikTok’s algorithm, unmoored from the constraints of your social network or professional content creators, is free to promote whatever videos it likes, without anyone knowing the difference. TikTok could promote a particular candidate or a particular issue in a particular geography, without anyone — except perhaps the candidate, now indebted to a Chinese company — knowing. You may be skeptical this might happen, but again, China has already demonstrated a willingness to censor speech on a platform banned in China; how much of a leap is it to think that a Party committed to ideological dominance will forever leave a route directly into the hearts and minds of millions of Americans untouched?

Again, this is where it is worth taking China seriously: the Party has shown through its actions, particularly building and maintaining the Great Firewall at tremendous expense, that it believes in the power of information and ideas. Countless speeches, from Chairman Xi and others, have stated that the Party believes it is in an ideological war with liberalism generally and the U.S. specifically. If we are to give China’s leaders the respect of believing what they say, instead of projecting our own beliefs for no reason other than our own solipsism, how can we take that chance?

India quizzing owners of banned Chinese apps over content and practices - Reuters

Chinese companies such as TikTok-owner ByteDance have been asked by India to answer 77 questions about their apps that have been banned by New Delhi, including whether they censored content, worked on behalf of foreign governments or lobbied influencers

TikTok ban: Competitors ready to pounce amid growing privacy concerns - Axios

Growing security and privacy concerns over Chinese-owned short-video app TikTok have given a lift to alternatives like Byte and Dubsmash, which have seen spikes in downloads from smartphone users recently, according to data from SensorTower.

TikTok tells Australian MPs to stop using it as ‘political football’ amid rising China tensions | The Guardian

The letter, sent to members of parliament on Monday, said it was correcting the record on “false claims” made about TikTok and the company’s ties to the Chinese government.


6. Video of PRC police trying to control speech globally

This activist says she is being tracked and harassed in Australia by Chinese police

In one video exchange seen by SBS News, the police officer, in the presence of her father, says to Zoo: “Let me tell you, you need to remember you are a citizen of the People's Republic of China"...

The officer later says: “I’m telling you the truth, although you are [in Australia], you are still governed by the law of China, do you understand?”

"You can record this call but let me make it clear to you, what you are putting out on Twitter is absolutely not permitted," he says.


7. Xu Zhangrun released from custody, fired from Tsinghua

China leadership critic Xu Zhangrun sacked one day after release, friends say | South China Morning Post

Xu Zhangrun, the outspoken critic of China’s leadership, has been sacked by Tsinghua University, where he taught for 20 years, after being released from police custody on Sunday morning, sources told the South China Morning Post.

“His dismissal from all positions is pretty much a certainty, and I learned it Monday night. It’s possible that this decision was made earlier than Monday. We just don’t know what the reasoning is yet, and if the decision complies with the regulations. Too soon. I don’t even know how to comment,” one of Xu’s university colleagues said.

Question: Will foreign educational institutions with partnerships with Tsinghua say anything about his treatment, or reassess their choice of partner?

What’s Next for Xu Zhangrun? — Jerome A. Cohen | 孔傑榮(柯恩)

His next move? One option is to go on occasionally publishing in China or, more likely, abroad and get locked up much more seriously like Xu Zhiyong and so many other able, outspoken reformers. Another is to try to keep silent, do serious research and contemplation to the extent extensive “non-release release” restrictions permit, and wait for a better day. The third is to leave the country at least for the immediate IF he and his family are allowed to do so. Will the Party let him go?

Xu Zhangrun & China’s Former People – China Heritage

In the vaunted ‘New Epoch’ of Xi Jinping, the five main problematic social groups, or ‘black categories’, are rights lawyers, underground religious activists, dissidents, Internet leaders (influencers), as well as various vulnerable groups. Perhaps ‘Upright Professors and Outspoken Educators’ will become another category in the country’s ever-expanding list of Former People.


8. Dushan debt crisis in ghostly video

Unfinished Vanity Projects a Debt Trap for Guizhou County - SixthTone

Dushan, a backwater county in Guizhou province, is an unlikely home for dozens of fancy-looking buildings that were part of an official push to develop the local economy. Today, the projects — which include manmade scenic sites and industrial parks, among others — stand idle, awaiting visitors and tenants...

The local government’s fast and loose spending of public funds was the subject of a documentary that was widely shared Monday on Chinese social media platforms. The 22-minute film is a kaleidoscope of unfinished buildings and empty streets evoking a ghost town, with the shocked host questioning the logic of squandering billions in a county consisting of just eight townships and a still-small population.

Dushan’s debt crisis had already made national headlines last year, after the official newspaper of China’s top discipline watchdog, the Central Commission for Discipline Inspection, cited Dushan’s fiscal recklessness as an example of public officials misusing their authority. Pan Zhili — Dushan’s former party secretary and the official deemed responsible for the crisis — has since been charged with taking bribes and abuse of power.

The documentary on Youtube:


Business, Economy and Trade

China trade: Exports and imports in June - CNBC The June customs data beat expectations of a decline, with exports posting a rise of 0.5% as compared with a year ago, and imports jumping 2.7% in the same period. A Reuters poll had estimated that June exports contracted 1.5% from a year earlier, bouncing from a 3.3% decline in May. Imports were expected to fall 10.0% from last year, as compared with a drop of 16.7% in May, according to the poll. That could be attributed to higher purchases of crude oil and commodities.

China’s Hottest Stocks Sink as Beijing Cools Speculative Fervor - Bloomberg The ChiNext Index plunged as much as 3.5% Tuesday before paring the decline to 1.1% at the close. The gauge, where a 10% daily cap on individual stock moves will soon double, was up more than 60% this year and near the most overbought on record. Overseas investors sold a record $2.5 billion of China stocks Tuesday.

银行人士:有企业将低息纾困贷款资金投向股市获利__中国基金网 companies investing their pandemic relief loans into the stock market. I am shocked, just shocked…

银保监会通报:有资金违规流入股市、投向房地产领域 _中国经济网——国家经济门户 The China Bank­ing and In­sur­ance Reg­u­la­tory Com­mis­sion warns capital flowing illegally into the financial markets and real estate projects

Central Bank May Delay New Rules for $12.9 Trillion Industry - Caixin Global China’s central bank is discussing extending a grace period for financial institutions to comply with sweeping new asset management rules covering a $12.9 trillion industry that were issued in 2018 and set to take effect in December 2020, officials said Friday at a press conference. Considering the impact of the Covid-19 pandemic, some experts suggested extending the transition period for another year or longer.

Regulation approved, stressing timely payments for SMEs - Gov.cn SMEs continue to be stiffed // The Regulations on Payment Protection for Small and Medium-sized Enterprises were adopted at the State Council executive meeting on July 1. The regulations shall come into force on Sept 1. The purpose of the regulation is to ensure timely payments of merchandise, construction and services from SMEs by government departments, public institutions and large-sized enterprises. // The regulations - 李克强签署国务院令 公布《保障中小企业款项支付条例》-证券日报网

热点城市面临最难出租季:租金普降、空置期近50天 21CBN on problems in the rental market in big Chinese cities, rents dropping, vacancy rates increasing

Offshore investors dump China stocks after ‘incredible’ rally | Financial Times $$ Tuesday’s outflows follow a sustained period in which money has poured in to the mainland via Hong Kong. Chen Long, a Beijing-based analyst at Plenum, noted that net inflows via the six-year-old “stock connect” programme came to $19.2bn in the second quarter, the second-highest quarterly figure on record.

China trade:Demand for Australian coal and iron ore surges - Sydney Morning Herald The surge illustrates a two-track trade relationship developing between the economies: imports critical to China's infrastructure stimulus are climbing while trade bans are imposed on beef, barley and education, which can be sourced from elsewhere.

In Depth: How Livestreaming Became a Force in Chinese E-Commerce - Caixin During this year’s sales extravaganza known as “618,” livestreamer Viya sold about 130 million yuan worth of products each session in the first three days of the event, according to data analytics firm Udaren. Fellow livestreamer Li Jiaqi, known as the “lipstick king” for not being shy about trying on the makeup he’s hawking on camera, sold about 110 million yuan per session. The two are the biggest stars of livestreaming e-commerce, boasting a combined GMV of over 10 billion yuan in 2019, an investor in a leading agency for the livestreaming business told Caixin.

Chinese vice premier calls for stable foreign trade, investment - Xinhua Chinese Vice Premier Hu Chunhua has stressed efforts to keep foreign trade and foreign investment stable...Hu...made the remarks during an inspection tour to east China's Zhejiang Province from Monday to Tuesday.

Chinese Banks Double Issuance of Micro-Finance Bonds in First Half of 2020 – China Banking News Data from the Chi­nese cen­tral bank in­di­cates that 23 com­mer­cial banks in China raised 275.28 bil­lion yuan (ap­prox. US­D39.35 bil­lion) for mi­cro and small-fi­nanc­ing ser­vices via 26 bond is­sues in the first half of 2020.  The is­suance scope is two times that for the same pe­riod in 2019, while also mark­ing an in­crease of 34.4% com­pared to full-year is­suance last year.

China sharpens economic espionage penalties in ‘tit-for-tat provision’ against US accusations of trade secret theft | South China Morning Post The proposed new section on economic espionage by foreign firms, which has flown under the radar of many foreign intellectual property lawyers, is part of a wider amendment to the country’s criminal code. A draft of the law has been released for public review until August 16. If passed, the punishment for stealing Chinese trade secrets to benefit a foreign entity will be much more severe than the current three-year jail sentence for general trade secret theft.

The Real Power Brokers In China: Those Who Wield the Rubber Stamps - WSJ $$ Also known as corporate chops, the seals themselves cost about $20 each. But under Chinese law, physical possession of the red-ink-stained chop can determine who controls a corporation and the fate of billions of dollars.

GoldenSpy Chapter 4: GoldenHelper Malware Embedded in Official Golden Tax Software | Trustwave Directly preceding GoldenSpy, another malware family was used to covertly access the networks of companies doing business in China. This is the story of GoldenHelper.

Politics and Law

Suffering from chronic repression | Charles Parton | Standpoint Technological totalitarianism may be strong enough to keep the lid on protest. The real fear is a split in the leadership if mounting problems are ascribed to Xi’s helmsmanship. There is no sign of that. But there rarely is. Coups happen not according to Hemingway’s first form of bankruptcy, gradually, but in line with the second, suddenly. // Comment: the risk forced “personal decoupling” of the overseas and esp US assets and of retired senior leaders and relatives could lead to more grumbling at Beidaihe next month than in years past. But it is still unclear how grumbling gets converted to change, and Xi has been doing everything he can to control the sources of hard power—the PLA and the security systems.

New political-legal rectification campaign 2020-2021 | The China Collection - Ling Li Second, as far as I know, last time a rectification campaign organized from the highest level & targeting specifically legal institutions (courts, procuratorates in particular) was the “judicial reform” campaign in 1952-1953 (lasted 7 months), launched to eradicate the poison of judicial practices under KMT. This is to say that a pan-zhengfa-apparatus rectification campaign is not a decision that the Party makes lightly.

周强:坚持动真碰硬刀刃向内 扎实深入开展教育整顿 Zhou Qiang, President of the Supreme's People's Court, oversees meeting to launch the rectification campaign

Geolocating Growth of Suspect "Boarding" Facilities in Xinjiang China | RAND RAND has identified 55 facilities suspected of housing young children the construction of which coincided with a publicly stated policy to build "boarding schools" in Xinjiang. Western researchers and press allege that Xinjiang authorities are using repurposed and newly built schools to board Uyghur youth as part of a policy of intergenerational separation.

选择吃苦磨练 回应祖国召唤 _光明网 ——走近扎根西部、建设边疆的青年学子 - 7月7日,中共中央总书记、国家主席、中央军委主席习近平给中国石油大学(北京)克拉玛依校区毕业生回信,肯定他们到边疆基层工作的选择,对广大高校毕业生提出殷切期望。这是对一代代学子接续奋斗的肯定。今年,丁贵阳加入这个接续奋斗的行列,他签约了中国石油塔里木油田分公司,成为地质勘探岗的一名石油工人。从此,《我为祖国献石油》成为他和同事们的主题曲。毕业前夕,他和同学一起学习了《习近平的七年知青岁月》和1957年首届钻井专业毕业生奔赴克拉玛依的励志故事,他们觉得“有很多话想要和总书记汇报”,于是,胸中满溢的文字倾泻纸端,一封写给人民领袖也是心目中学长、前辈的信就此成文。

Foreign and Defense Affairs

Xi stresses deepening cooperation with Singapore, Thailand - CGTN Chinese President Xi Jinping on Tuesday stressed deepening economic and trade cooperation with Singapore and Thailand while continuing to jointly fight the pandemic with the two countries. Xi made the remarks as he held separate talks on the phone with Singapore's Prime Minister Lee Hsien Loong and Thailand's Prime Minister Prayut Chan-o-cha

Japan accuses Beijing of pushing East China Sea, South China Sea claims amid pandemic | Reuters Prime Minister Shinzo Abe’s government on Tuesday approved a white paper that said, among other things, China was “continuing to attempt to alter the status quo in the East China Sea and the South China Sea” and was spreading disinformation while providing medical aid to countries hit hard by Covid-19.
The white paper described “relentless” intrusions by Chinese ships – despite protests by Japan – in waters around a group of islets claimed by both nations in the East China Sea, known as the Senkakus in Japan and the Diaoyus in China.// English digest of the new white paper here

Japan urged to work with China to build constructive security relationship - Xinhua Spokesperson Zhao Lijian made the remarks when asked to comment on Japan's defense white paper released earlier on Tuesday. The white paper is fraught with bias against China and false information, and China has already stated its solemn position, Zhao told a regular briefing.

海军发布2020年学院招生宣传片 - YouTube Propaganda video for students accepted to PLA Navy academies

How the Coronavirus Pandemic Shattered Europe’s Illusions of China - Carnegie Endowment for International Peace Before the coronavirus pandemic, Europe and China hoped to put their differences aside. But now the relationship is in free fall, with deep uncertainty about what comes next.

Trump administration drops plan to deport international students in online-only classes - POLITICO Two of the country’s top universities won a major victory over the Trump administration on Tuesday after the government halted its plan to deport international college students who only use online courses to study this fall

Foreign Ministry Spokesperson Hua Chunying's Remarks on the Iranian Nuclear Issue On the Iranian nuclear issue, China's unwavering aim is to maintain the international nuclear non-proliferation regime and peace and stability in the Middle East, and to uphold multilateralism, the authority of the UN, and the international order based on international law. In the process of negotiating the JCPOA, China actively promoted peace talks, put forward China's proposals at a critical moments and made due contributions to reaching the agreement. In the implementation of the agreement, China has conscientiously fulfilled its obligations and led the Arak Modernization Project with positive progress, which has become a major highlight. No matter how the international situation evolves, China will always stand on the right side of history and work with other parties to the JCPOA to continue advancing the political and diplomatic resolution of the Iranian nuclear issue. At the same time, we will firmly safeguard our legitimate rights and interests.

China’s Engagement With Nepal’s Ruling Party Troubles India – The Diplomat Recently, Nepal’s ruling party, the Nepal Communist Party (NCP), was on the verge of splitting due to an internal rift. But the active participation of the Chinese ambassador to Nepal, Hou Yangqi, likely averted the party’s split, preventing the dissolution of parliament and announcement of a general election.

PRC Scholar Yin Jiwu: Comparing US and PRC Concepts of National Security | 高大伟 David Cowhig's Translation Blog The national security views of China and the United States are based on how the state of their relationship and their judgments of how that relationship might develop. For the United States, national security is based on a “security threat” paradigm while for China it is based on the “national security state” paradigm.

Team Play: The U.S. Alliance System and the Chessboard (Pt. 2) | Center for Strategic and International Studies In part two of Mike's discussion with Abe Denmark and Mira Rapp-Hooper, the three take a look at the importance of alliance coordination in the Indo-Pacific, the challenges U.S. alliances currently face, and how the U.S. alliance network factors into competition with China. What are the major issue areas that U.S. and allied officials are looking at today? What are the prospects for networking America's Pacific and Atlantic alliances?

Barley industry fears it is bearing brunt of Australia's 'fractured' relationship with China | The Guardian Australia’s barley industry has raised fears it is bearing the brunt of “a fracture” in the relationship with China, as Canberra rejected the latest travel advice issued by Beijing as “disinformation”.

Taiwan

China to Impose Sanctions on Lockheed Martin Over Taiwan Sale - Bloomberg It’s unclear how much exposure Lockheed has to China sanctions. U.S. arms manufacturers already face strict limitations on what kind of business they can do with countries deemed by Washington to be strategic rivals, such as China. However, Sikorsky, which is owned by Lockheed Martin, has a joint venture called Shanghai Sikorsky Aircraft Co. Ltd. that does business with aviation companies and government-backed enterprises

The Taiwan Strait Crisis 1954-58 | Outrider - Gregory Kulacki In March 1955, President Eisenhower publicly threatened to launch nuclear strikes against China. He was hoping to deter an attack on Taiwan and to stop the shelling of Chiang Kai-Shek’s forces on outlying islands. It didn’t work.

Society, Arts, Sports, Culture and History

Six living Buddhas graduate from Buddhist middle school in Tibet Autonomous Region - Global Times After performing an English melodrama, reciting poetry, making speeches and holding a sutra debate, six living Buddhas graduated from a middle school under the Tibetan Buddhist College in Lhasa, Southwest China's Tibet Autonomous Region on Monday...Zhang Liangtian, deputy dean of the Tibetan Buddhist College, said that the college has formulated a program that combines Buddhist education and China's national compulsory education with the aim that the living Buddha could become wise and be able to actively promote the adaptation of Tibetan Buddhism to socialist society, according to a report from China News.

Energy, Environment, Science and Health

Cover Story: How Bill Gates Sees China Expanding Its Role in Global Health - Caixin In a recent email interview with Caixin, Gates explained how the foundation sets priorities and deals with unexpected results. He assessed the foundation’s response to the Covid-19 outbreak and his engagement in the foundation’s operations. Although five years ago he predicted that the next big global crisis would most likely be a pandemic and started investing in preparedness, he acknowledged that the world wasn’t ready.

Scientific Journal Pulls Over a Dozen Papers by Chinese Researchers - WSJ “If the authors had done the research themselves, they should have had no problem showing original data and photos to the journal to prove the paper was real,” said Dr. Bik, a Dutch microbiologist who is now based in California. “If authors are quick to withdraw, that suggests they do not have any real data to convince the journal and the readers.” Dr. Bik said the author of one paper she identified offered her an unspecified sum of money to avoid being named in her report. Dr. Bik declined.

Chinese mainland reports no new domestically transmitted COVID-19 cases - Xinhua Chinese health authority said Tuesday that it received reports of three new confirmed COVID-19 cases on the Chinese mainland Monday, and all of them were imported.

Rural and Agricultural Issues

Foot-and-Mouth Disease Found in South China Pig Herd - SixthTone China on Monday warned of an outbreak of highly contagious foot-and-mouth disease (FMD) among pigs in the southern Guangdong province. The outbreak was detected in Leizhou, a county administered by the coastal city of Zhanjiang. Out of a herd of 131 pigs, 39 had become infected with the viral disease