Trade; BRI; US announces Indo-Pacific commercial vision; Li Zhanshu visits Jinjiang; Tax trouble for Fan Bingbing; Near-sighted, overweight, sleep-deprived kids

Happy Monday from DC. The things on my radar include:

  • The Trump Administration is rolling out its economic vision for the Indo-Pacific at the U.S. Chamber of Commerce's Indo-Pacific Business Forum;

  • There are still no signs of substantive US-China discussions over trade, and US official Larry Kudlow is touting the importance of the US_EU "deal" last week as a way to pressure China; 

  • Li Zhanshu visiting Jinjiang in Fujian Province, a town getting increasing propaganda focus to highlight Xi Jinping's role in Reform & Opening

  • CCDI head Zhao Leji has reappeared in official media after an absence of several weeks. Wang Qishan used to “disappear”, prompting a flurry of rumors about trouble for him. Wang would eventually reappear, neither dying nor in trouble, then not long after there would be an announcement of investigations into very senior officials. Will history repeat with Zhao?

Housekeeping note: I am off to China Thursday so there will be no newsletter August 2. I am not sure yet how the publishing schedule will shake out while I am in China. I am planning to do a few issues before I return to DC August 17 and normal publishing should return August 20. I will be in Beijing, maybe Shanghai, not sure where else. If people want to get together please ping me, and if there are enough maybe we can pull together a Sinocism dinner

Thanks for reading. 

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The Essential Eight

1. US-China trade

China's Top Diplomat Mocks U.S.'s ‘Perplexing' Trade Complaints - Bloomberg:

The Chinese foreign minister took advantage of a visit by his U.K. counterpart to give the U.S. a mocking economics lesson, saying American policies were to blame for the country’s trade deficit and the collapse of talks. Wang began in response to a reporter’s trade question, saying “let me share with you some basic facts and I believe you will make an objective and sensible assessment.”

“The U.S. often says that it is taken advantage of, but this is perplexing. It’s like someone who buys a $100 product in a supermarket, has the product in hand, and then complains that he is $100 short,” Wang said. “Does that logic stand up?”

Chinese Foreign Minister Wang Yi says door still open to US for trade dialogue | South China Morning Post:

“China’s door of dialogue and negotiation remains open, but any dialogue must be based on equality and mutual respect,” Wang, who is also a State Councillor, said on Monday during a joint news conference with Britain’s Foreign Secretary Jeremy Hunt in Beijing. “Any threats or pressure by one side will only be counterproductive.”

China’s two big mistakes in trade war may lead the country into middle-income trap | South China Morning Post:

The first is that the Chinese leadership misjudged US President Donald Trump. Beijing wrongly thought that Trump was just a businessman, regarding his trade war threats as bluffing ahead of the midterm elections. But in fact, Washington had already made clear in its National Defence Strategy report – released months before the dispute escalated – that the US would no longer tolerate Beijing’s trade and economic practices. The message was that Beijing could not earn money from the United States while at the same time posing a challenge to it.

Beijing’s second mistake was that it misjudged the alliance between the US and the European Union, and had hoped, unrealistically, to form a united trade front with Brussels against Washington. - Zhang Lin is a researcher with the Unirule Institute of Economics in Beijing

China’s Shrinking Trade Surplus Unlikely to Impress Trump - WSJ $$:

Official data set to be released Aug. 6, economists say, likely will show China’s current account, which measures its transactions with the rest of the world, was in deficit for the six months ending in June, essentially meaning it imported more than it exported. Macquarie Capital Ltd.’s economist Larry Hu estimates the deficit was $24 billion, largely occurring in the first quarter. It would be the first half-yearly deficit since the country joined the global trading system in 2001.

Increased imports of foreign oil, iron ore and other commodities, along with greater spending by Chinese companies on foreign financial and software services, drove the turn.

U.S. Almond Farmers Are Reeling From Chinese Tariffs - WSJ $$:

following the introduction of tariffs, demand has softened with June 2018 exports below those seen in the prior year. Slackening demand is already starting to weigh on prices. A pound of American almonds recently sold for about $2.46, versus up to $2.76 a pound two months earlier, according to data firm Mintec Ltd.

Some lobster exporters are feeling pinch of Chinese tariff - Portland Press Herald:

Live lobster dealers like Nadeau who have invested in building the Chinese lobster market are feeling the sting of tariffs now, but other live lobster dealers who sell domestically or who have more diversified export markets say they remain unscathed – at least for now. They worry, though, that increased competition for buyers outside of China may eventually drive down their prices, too.

When the World Opened the Gates of China - WSJ $$ - Bob Davis:

With a congressional vote looming in the spring of 2000, President Bill Clinton mustered his best arguments for why lawmakers should approve his proposed deal for China to join the World Trade Organization...

Mr. Clinton’s idealistic rhetoric played well among most of Washington’s elites, but a trade lawyer often dismissed as a protectionist, Robert Lighthizer, was skeptical. As he had warned in a New York Times op-ed a few years earlier, if admitted to the WTO, mercantilist China would become a “dominant” trading nation. “Virtually no manufacturing job in [the U.S.] will be safe,” he wrote...

Mr. Clinton also linked China’s WTO accession to the democratic vision of President Woodrow Wilson, who dreamed, he said, of “a world full of free markets, free elections and free peoples working together.” The growth of the internet, in particular, would undermine Beijing’s control and make China more like the U.S., Mr. Clinton argued...

On the issue of U.S. manufacturing jobs, critics made the right call. A study by the MIT economist David Autor and colleagues calculated that Chinese competition cost the U.S. some 2.4 million jobs between 1999 and 2011, battering factory towns that made labor-intensive goods.

That result haunts one of Mr. Clinton’s senior China negotiators, Robert B. Cassidy, who believes that his work only helped big businesses, not ordinary workers. “When you retire you like to think that you accomplished a lot,” he says now, at age 73. “What kind of benefit did I produce from working around the clock? I was incredibly disappointed.”

Transcript: Larry Kudlow on "Face the Nation," July 29, 2018 - CBS News

You know, as I said before, a key point here is that all of a sudden the Chinese are being isolated. China by the way asked the EU to do a trade deal. The EU said no. The EU said to us we would much rather have the deal with you the United States. And that's why President Trump and President Juncker's meeting was so important and the process is beginning immediately. So this is very good news in my judgment.


2. Hunt for UK-China "golden era"

UK will seek talks on trade deal with China, says Jeremy Hunt | The Guardian:

Jeremy Hunt has discussed the possibility of a free trade agreement between the UK and China, in his first major overseas trip as foreign secretary.

Hunt, seeking to revitalise the golden era in Anglo-Chinese relations started by David Cameron, met the country’s foreign minister, Wang Yi, in Beijing on Monday. At a joint press briefing afterwards the two sides promised to uphold free trade and fight climate change.

Hunt, who has been under pressure to press Chinese leaders on human rights in Hong Kong, said the two sides disagreed on the issue.

Jeremy Hunt makes 'terrible' gaffe about his wife in China | AFP:

“My wife is Japanese – my wife is Chinese. That’s a terrible mistake to make,” he told his counterpart, the Chinese foreign minister Wang Yi.

“My wife is Chinese and my children are half-Chinese and so we have Chinese grandparents who live in Xian and strong family connections in China,” he added, referring to the ancient city of Xian in northern China.


3. Belt & Road Initiative

China has a vastly ambitious plan to connect the world - Gateway to the globe - The Economist cover story:

Nadège Rolland, author of “China’s Eurasian Century?”, a book on the BRI, urges those who doubt China’s ambitions to read the statements of Mr Xi and other leaders. If even some are sincere, she writes, they reveal a plan for “a risen China sitting at the heart of a Sinocentric regional order”. Xiang Lanxin, director of the Centre of One Belt One Road and Eurasian Security, a Shanghai-based think-tank, agrees that the BRI embodies Chinese strategic goals, but says those goals are both clear and respectable. He sees a plan to rebalance China’s exposure to the Pacific, by which he mostly means relations with America, by deepening ties with Eurasia. He concedes, though, that clumsy BRI propaganda has alarmed neighbours unnecessarily. When Chinese officials “say there is no geopolitics involved…that’s not quite convincing, because it does involve geopolitics, everybody realises that,” he says...

The West must do more than nag poorer nations not to take Chinese money. At a minimum they should help BRI countries assess schemes and show them how to gain from transparency, high standards and formal contracts. If the West fears a Chinese-led order, its governments have choices. There is no reason why China’s entangling belts and roads should be the world’s only option.

The cover:

China’s Belt and Road Initiative is falling short | Financial Times $$

In the Chinese context, it is the linchpin of President Xi Jinping’s grand design to create a “community with a shared future for mankind”. As such, the Belt and Road (BRI) is officially intended to showcase an open, inclusive form of development which benefits all countries that participate.

To criticise BRI, therefore, is to censure a rising China’s proposition to the world. Yet there is growing evidence that the infrastructure projects are falling short of Beijing’s ideals and stirring controversy in the countries they were intended to assist.


4. Trump administration plan to compete with Belt & Road Initiative in the Indo-Pacific

Axios Sneak Peek - Pompeo's Asia speech:

Secretary of State Mike Pompeo will lay down an important marker for China in a speech on Monday at the U.S. Chamber of Commerce's Indo-Pacific Business Forum. Pompeo won't say this explicitly, but he'll subtly tell China's neighbors they don't have to choose Chinese investment over American investment.

Axios has been briefed on the speech from a source with direct knowledge of its latest contents, as of early Sunday evening. Pompeo is expected to frame the speech as a discussion of the Trump administration’s "economic strategy for advancing a free and open Indo-Pacific."

The key line: "I am here to say emphatically that the Trump administration is expanding our economic engagement in the Indo-Pacific." (The Trump officials are expected to announce new initiatives to promote U.S. private sector investments in Asia, especially in energy, infrastructure and the digital economy, the source told me.)..

About a half-dozen Cabinet secretaries and agency heads, including Wilbur Ross and Rick Perry, will lay out the administration’s economic and commercial strategy for the Indo-Pacific at the event on Monday, the source said.

Comment: By sending so many senior officials to this conference the Trump administration is messaging how serious it wants to be about this initiative. But can the US compete with China’s terms in this countries, especially given the Foreign Corrupt Practices Act?


5. Li Zhanshu visits Jinjiang

If anyone is going to drive the elevation of Xi in the annals of reform and opening in this 40th anniversary year it will be Li Zhanshu, so his visit to Jinjiang looks significant. This newsletter has discussed the increasing propaganda love for Jinjiang several times, including most recently in the July 16 issue:

The "Jinjiang experience" and Xi's involvement in it as Fujian Governor are getting more propaganda love in the latest issue of Qiushi.

The politics around the 40th anniversary celebration of Reform & Opening are obviously very interesting. Is the push about Jinjiang Experience part of a strategy to elevate Xi and his "bona fides" while if not erasing at least downplaying the role of Deng Xiaoping and others in Reform & Opening?

China's top legislator stresses people's congresses' role in law-based governance - Xinhua:

Li, who is also a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, made the comments during a tour in east China's Fujian Province from Wednesday to Saturday.

Visiting cities of Quanzhou, Fuzhou and Nanping, Li looked into the development of reform and opening-up and the work of people's congresses in these cities.

The first stop of Li's tour is Jinjiang, a city administered by Quanzhou. He visited the Jinjiang City Exhibition Hall and a number of private enterprises, holding talks with officials, the people and entrepreneurs to gain an in-depth understanding of the "experience of Jinjiang" summarized by comrade Xi Jinping.

When Xi worked in Fujian between 1985 and 2002, he inspected Jinjiang seven times. Summarizing Jinjiang's success story in 2002, he said the city's achievements were due to a localized market-oriented economy, hard-working locals, honest market players and effective local government.

"The 'experience of Jinjiang' summarized by Xi serves as a guide to the reform and development of Jinjiang and Fujian as a whole, and is still playing a guiding role at present," Li said, calling for more efforts in learning Xi's theories and practices during his work in Fujian.

Official Chinese report of Li's inspection 栗战书在福建调研 

My interview with Julian Gewirtz on the 40th anniversary of reform and opening: 

4. What are the politics around planning celebrations in this anniversary year?

Xi will dominate this anniversary, and the backward-looking appearance of celebrating an anniversary will be used to glorify Xi’s “New Era” and the path forward. Domestically, it presents an opportunity to crystallize which elements of reform and opening Xi wants to keep — and which he is discarding, such as more open intellectual debate or greater limits on the Party’s authority. Internationally, amid serious trade conflict, the anniversary gives the Party an opportunity to remind countries that they’ve benefitted from China’s growth over the past 40 years and to advocate for a form of globalization with “Chinese characteristics.” So the anniversary will be deployed to serve the interests of Xi and the Party today. History will be used for present purposes.

On Saturday Julian tweeted a comparison of 30th and 40th reform & opening anniversary sites. Deng Xiaoping was much more prominent in 2008…

Julian Gewirtz@JulianGewirtz

In case we were still wondering if there’s any effort underway to downplay Deng Xiaoping...

Here are the English-language “reform & opening” anniversary sites from this year & ten years ago. Look at the graphic at the top:

Same cityscape. One giant difference. pic.twitter.com/uFqoKwq9tL

July 28, 2018


6. PRC space station in Argentina

From a Space Station in Argentina, China Expands Its Reach in Latin America - The New York Times:

Here in Argentina, a nation that had been shut out of international credit markets for defaulting on about $100 billion in bonds, China became a godsend for then-President Cristina Fernández de Kirchner.

And while it was extending a helping hand, China began the secret negotiations that led to the satellite and space control station here in Patagonia...

The Chinese wanted a satellite-tracking hub on the other side of the globe before the launch of an expedition to the far side of the moon, which never faces the Earth...

“People see it as a military base,” said Jara María Albertina, the manager at the local radio station. “People are afraid.”

The mayor, Ricardo Fabián Esparza, said the Chinese had been friendly and even invited him to look at the images the antenna produces. But he is more apprehensive than hopeful.


7. Taxmen (and Lawmen?) cometh for Fan Bingbing

Mystery over disappearing Chinese newspaper report on X-men actress Fan Bingbing’s alleged travel ban | South China Morning Post:

On Saturday The Economic Observer, a respected Chinese-language newspaper, reported that Fan and her younger brother Fan Chengcheng, had been barred from leaving the country over alleged tax evasion. The reporter, Li Weiao, is an experienced investigative journalist in China and a finalist for last year’s Global Shining Light Award from the Global Investigative Journalism Network.

The story was widely shared before being pulled from the newspaper’s website an hour later.

A source in Beijing told the South China Morning Post that the actress and her brother had not been arrested. Fan is thought to have last been seen in public on July 1, when she visited a children’s hospital.

Credits Roll on Tax Loopholes for Movie Stars - Caixin Global:

In theory, stars with individual studios should be paying personal income tax on their film and TV earnings at a rate of 35% on earnings above 100,000 yuan ($14,600). In practice, however, some regions take a lax approach to auditing individual studios’ books and will accept a fixed levy often set under 3% of the studio’s income. This means that some studios are paying less tax on their earnings than a worker whose salary falls in China’s lowest tax bracket.

Question: Have any US film firms cheated on their PRC taxes, or helped PRC starts and partners do so?


8. Near-sighted, overweight, sleep-deprived kids

Study Finds Weight, Vision, Sleep Problems Among China’s Schoolchildren - Caixin Global:

China’s young schoolchildren are overweight, have poor eyesight, and don’t get enough sleep. Oh, and they need to focus more on their creativity and analytical skills.

At least that’s the take-away from the country’s first comprehensive study on the quality of its mandatory education...

Researchers from the Ministry of Education tested 572,314 fourth- and eighth-graders across 31 provincial-level regions from 2015 to 2017, and found that the vast majority of students performed satisfactorily or better in language, mathematics, and science...

Just over 17% of boys and 13% of girls in the fourth grade are overweight or obese, researchers said, citing statistics from the Ministry of Education. By eighth grade, roughly the same percentage of boys are overweight or obese, while the rate jumps to 17.3% for girls.

Over 53% of boys and 63% of girls have moderately to severely impaired vision by eighth grade, and a whopping 83.4% of children get fewer than the nine hours of sleep a day recommended for middle schoolers by China’s Education Ministry.

The full report in Chinese as a PDF on the Ministry of Education site 


Business, Economy, Finance And Trade

Liu He Signals Acceleration of State-owned Enterprise Mixed-ownership Reforms - China Banking News Liu He, Chinese vice-premier and head of the reform leadership team, presided over the meeting which declared that “SOE reform development has made historic accomplishments, with the basic completion of the SOE reform top-level plan, the formulation of a series of reform documents, and the implementation of a raft of major reform measures.” Domestic analysts said to Shanghai Securities News  that the meeting and leadership reshuffle signals a relaunch of SOE reforms, with an emphasis upon market-based SOE mixed-ownership reforms and restructuring.

Pilot reform of State-owned capital investing, operating companies The State Council has released a circular to promote pilot reform of State-owned capital investing and operating companies. The aim of the trial is to separate ownership of State-owned capital and management rights of enterprises, to promote market-based operations of State-owned capital, according to the circular.国务院印发《关于推进国有资本投资、运营公司改革试点的实施意见》 

Pakistan plans to seek up to $12bn IMF bailout - Nikkei Asian Review: So far, Islamabad has kept going with the help of loans from Beijing — it borrowed at least $5bn from Chinese commercial banks in the past financial year — and by allowing the Pakistani rupee to depreciate 20 per cent against the dollar.// Question: Will any of the IMF bailout be used to bailout Chinese loans?

China sanctions $2b loan for Pakistan to stem decline in forex reserves - Profit by Pakistan Today: According to sources in the Ministry of Finance and State Bank of Pakistan (SBP), the $2 billion loan from China will be considered as an “official bilateral inflow”, reported Express Tribune. The sources shared $1 billion had already been received in the SBP’s accounts and would be shown in the reserves data to be released next Thursday (August 2nd).

China plans expansion of foreign investment deal reviews | Financial Times $$ China’s commerce ministry has drafted rules that would require a national security review for “strategic” investments by foreigners in listed companies, echoing moves in other large economies to strengthen controls in sensitive industries. The proposed amendments to existing rules on foreign investment in listed companies, published late on Monday afternoon, expand the universe of foreign investments that are covered by China’s existing formal national security review process.商务部关于《关于修改<外国投资者对上市公司战略投资管理办法>的决定(征求意见稿)》公开征求意见的通知 

Jack Ma’s Giant Financial Startup Is Shaking the Chinese Banking System - WSJ $$  Ant Financial Services Group, founded by Chinese billionaire Jack Ma, has become the world’s biggest financial-technology firm.. China’s banks complain Ant siphons away their deposits, causing them to pay higher interest rates, and is a factor leading them to close branches and ATMs. One commentator at a state-owned television channel described Ant’s huge money-market fund as “a vampire sucking blood from banks.”..The authorities are also weighing whether to designate Ant a financial holding company and require it to meet bank-style capital requirements, people familiar with the matter say.

Troubled Energy Group’s Brokerage Arm Gets Near-Failing Grade - Caixin Global The main brokerage arm of troubled energy and financial conglomerate CEFC China Energy Co. Ltd. has received the lowest rating ever given out by China’s securities regulator in its annual industry review, highlighting the company’s dangerously high risk exposure.

Beijing city reports slowest mortgage growth in 5 years - Reuters The city's outstanding mortgage loans increased by just 9.6 billion yuan ($1.41 billion) in the first six months of this year, compared with 103.2 billion yuan in the same period last year, according to the Beijing operations office of the central People's Bank of China, Xinhua said late on Saturday.

Best-Performing China Distiller Sells ‘Firewater’ for Pennies - Bloomberg In a note to clients on Wednesday, China International Capital Corp. analysts said Shunxin has become a high-growth baijiu enterprise as it makes efforts to market its core product -- Niulanshan Erguotou -- outside of its home turf of Beijing and other parts of northern China. CICC advises investors to "take a strategic, heavy position" in the stock. //  牛栏山二锅头!To be honest I could never taste the difference between Niulanshan and 红星二锅头 Hongxing Erguotou..

Bike-sharing backpedal puts China manufacturers in a spin | Financial Times $$ On the western outskirts of Tianjin, a port city near Beijing, idle workers at a bicycle factory reminisce about better days.  “Even last year, shared bikes were all the rage, but we get no orders any more,” said one of the managers at Luoda Bicycle in the Tianjin suburb of Wangqingtuo, a Mr Xue, adding that the hot item this year was electric scooters.

Regional lenders: China’s most dangerous banks | Financial Times $$ Problems at small banks matter because their role in China’s financial system is growing. The country last year surpassed the eurozone to become the world’s largest banking system by assets. Meanwhile, small and mid-sized banks have more than doubled their share of total Chinese banking assets to 43 per cent in the past decade.

IMF - China’s Economic Outlook in Six Charts 3. Credit growth has slowed but remains too fast. Despite the sharp rebound in nominal GDP and industrial profits, total nonfinancial sector debt still rose significantly faster than nominal GDP growth in 2017. While the corporate debt to GDP ratio has stabilized, government and especially household debt is rising, driven by continued strong off-budget investment spending and a rapid increase in mortgage and consumer loans...6.The benefits of faster reform. In the baseline, real GDP growth is projected at 6.6 in 2018, reflecting the lagged effect of regulatory tightening and softer external demand. Risks are tilted to the downside, with tightening global financial market conditions and rising trade tensions. If the authorities move more decisively to resolve the policy tensions now and focus on higher-quality growth and a greater role for the market, near-term growth would be weaker but longer-term growth would be stronger and more sustainable. An illustrative “proactive” scenario features faster reform progress, particularly state-owned enterprises (SOE) reform and resolving zombie firms, which also accelerates rebalancing from investment to consumption. If there is a risk of a too sharp slowdown, a temporary fiscal stimulus package with resources to support rebalancing could help cushion the near-term adverse impact.// IMF - People’s Republic of China : 2018 Article IV Consultation-Press Release; Staff Report; Staff Statement and Statement by the Executive Director for the People's Republic of China 

Pinduoduo Hit by Accusation of Counterfeiting - Caixin Global Pinduoduo Inc. is suffering its first setback less than a week after listing in New York, as a Chinese television-maker is demanding the e-commerce site withdraw a slew of fake products carrying its TV brand. Skyworth Digital Holdings Ltd., one of China’s top TV-makers, issued a statement (link in Chinese) on its official WeChat account on Saturday, asking Pinduoduo to immediately stop selling such knockoffs and noting that it reserves the right to sue the site for selling phony products.

China’s Plans for Tech Homecoming Stall - WSJ $$ CDRs DOA  //  people close to the companies said the securities regulator has cooled on a quick rollout, while people close to the regulator said companies are dragging their feet on applying. At least two—Alibaba and JD.com Inc. JD -1.60% —have suspended issuance plans. People close to the companies said the regulator has become less eager about asking for supporting documents. Officials worry the weak equity market—Shanghai’s benchmark stock index is down 13% this year—couldn’t absorb such large share offerings, one said.

 

Politics, Law And Ideology

Senior CPC official urges efforts to rectify problems exposed by inspections - Xinhua Zhao Leji reappears in inspection tour of Heilongjiang. Busy prepping a big case these last few weeks?  CCTV Evening News report on his inspection 赵乐际在黑龙江调研时强调 深化政治巡视 抓实巡视整改 充分彰显巡视监督严肃性和公信力 

China’s prosecutors charge former top internet censor Lu Wei with corruption | South China Morning Post Prosecutors in the eastern port city of Ningbo in Zhejiang province have submitted an indictment to the city’s intermediate people’s court, the Supreme People’s Procuratorate said in a statement. Lu is accused of taking advantage of his position – as well as those of other state functionaries – to seek profits for others and illegally accepting “a huge amount of assets”.

Chinese Parents Panic Over Infant Vaccine Safety - Bloomberg China’s vaccine scandal is sparking protests and panic among parents, with the revelation two drugmakers sold poor-quality vaccines for infants reviving anxiety over the country’s ability to ensure safety in the world’s second-biggest health-care market. Demonstrators gathered outside the National Health Commission in Beijing Monday, according to videos posted on Twitter, demanding tougher regulation of vaccine sales in China  //  Comment: If Xi is serious about accountability and the new "principal contradiction" then some very senior heads will need to roll

China graft suspect gives self up, returns from United States | Reuters Zhang Yongguang, a former policeman in the southern Chinese city of Shenzhen, fled to the United States in 2010 and had been wanted on suspicion of taking bribes, according to the Central Commission for Discipline Inspection.

China: Crackdown on Tibetan Social Groups | Human Rights Watch The 101-page report, “‘Illegal Organizations’: China’s Crackdown on Tibetan Social Groups https: // www.hrw.org/report/2018/07/30/illegal-organizations/chinas-crackdown-tibetan-social-groups ,” details efforts by the Chinese Communist Party at the local level to eliminate the remaining influence of lamas and traditional leaders within Tibetan communities. The report features rare in-depth interviews, state media cartoons depicting the new restrictions, and cases of Tibetans arbitrarily detained for their involvement in community activities.

Fugitive Tycoon Charged With Coercion in Brokerage Takeover - Caixin Global Fugitive tycoon Guo Wengui’s company, Beijing Zenith Holdings, and his business partners have been charged with collaborating with government officials to engineer a forced takeover of a securities company...In the latest case, prosecutors in the northeastern city of Dalian have filed charges in a local court accusing Beijing-based property development company Beijing Zenith and the company’s former investment consultant, Guo Hanqiao, with being involved in a “coercive transaction” in regard to the company’s takeover of Minzu Securities Co. Ltd., according to a statement on the website of the Dalian prosecutor’s office.

The Child Rape Case Confounding China - Sixth Tone on the Tang Lanlan case

China to further boost "red tourism" - Xinhua Chinese cultural officials on Monday pledged to further promote "red tourism" which has become a key part of China's tourism industry. While tours to former Communist revolutionary bases have been available for years, a guideline recently issued by central authorities upped the game by demanding better protection and use of cultural relics. "We will take this opportunity to advance the study of relics in order to let them play a unique role in promoting core socialist values," Rao Quan, an official with the Ministry of Culture and Tourism, said at a press conference.新闻办就《关于实施革命文物保护利用工程(2018-2022)的意见》有关情况举行发布会

 

Foreign and Military Affairs

Xi's visit deepens South-South cooperation, upholds multilateralism - People's Daily Online During his 11-day trip, Xi paid state visits to the United Arab Emirates (UAE), Senegal, Rwanda, South Africa and a friendly visit to Mauritius during a stopover. He also attended the 10th BRICS summit in Johannesburg. The visit opens new prospect for the South-South cooperation and promotes the building of a community with a shared future for mankind, said Chinese State Councilor and Foreign Minister Wang Yi.

Hun Sen—and China—Wins Cambodia Elections - Newsweek Hun Sen and his backers tried to convince the public of their legitimacy. But observers said the outcome was predetermined, thanks in part to the interests of his biggest supporter: China. Under Hun Sen’s rule, billions of dollars in Chinese investments have helped Cambodia become one of the fastest-growing economies in the world. The financial influx is part of an aggressive Chinese strategy to win influence in Cambodia after years on a rocky, U.S.-backed path. By 2017, China had become Cambodia’s largest trading partner, with total trade volume reaching $5.8 billion, up 22 percent from 2016.

U.S. Technology Sent to Chinese Police Was Within Rules, Commerce Department Says - WSJ $$ The U.S. Commerce Department deflected a Congressional committee’s concerns that it is doing an insufficient job stopping U.S.-made technology from playing a role in oppressive policing in China. The department, in a letter from Commerce Secretary Wilbur Ross, also said DNA sequencers used by Chinese police and made by Waltham, Mass.-based Thermo Fisher Scientific Inc. were not subject to U.S. licensing rules that control the sale of crime-busting equipment to foreign countries.

Don’t Close the Door on Chinese Scientists Like Me – Foreign Policy - Yangyang Cheng A policy that evokes the Chinese Exclusion Act of 1882 will further enflame racial hostility and aid the Chinese government’s own mission to extend its influence overseas for both talent recruitment and political control. The Chinese government preys on the vulnerability and perpetual otherness felt by immigrants to assert itself as the rightful guardian of the Chinese people worldwide. Without being implemented, the suggestion alone of such discriminatory policies casts doubt on every Chinese citizen as a potential agent of the Chinese state, guilty until proved innocent, and inadvertently gives credence to the Chinese government’s own claim that it holds not only control over a territory but also ownership of a people, including its diaspora.

Army blocks Sikkim 'incursion' by China - Telegraph India Indian soldiers formed a human chain to block Chinese troops who had transgressed 2km into Sikkim early this month in the latest eyeball-to-eyeball faceoff between the two armies since their Doklam standoff last year, according to reports security agencies sent recently to the Centre. The alleged incursion by People's Liberation Army troopers took place in Naku in Sikkim's West District.

Impatient China | China Media Project Back in September of last year, weeks ahead of the 19th National Congress, where Xi Jinping’s stature was political inflated to an extent we have not seen since perhaps the Mao era, Luo Jianbo (罗建波), head of the China Foreign Policy Center at the Central Party School, wrote a clear warning about the prematurity of China’s coming of age as a global power. Luo’s article, in which he suggests that China is its own worst enemy, is still trending on WeChat. We offer a quick translation.

China’s mega fortress in Djibouti could be model for its bases in Pakistan - ThePrint It is called a ‘logistics base’ but the 200-acre facility built by China can accommodate a brigade and has unprecedented security arrangements

How China Seizes Its Neighbors' Waters - Foreign Affairs eputational cost alone is unlikely to make Beijing modify its claims and alter its behavior. To achieve that end, the United States would have to undertake a broader pushback strategy that would incur a heightened risk of military confrontation with China.

‘Chinese navy using Jackson Atoll as docking area’ | Philstar.com The Chinese navy has reportedly transformed Jackson Atoll into a “parking space” for its ships deployed for operations in the disputed South China Sea. “About Pag-asa, the Chinese are moving closer to the island while at the same time, they have already plenty of ships on standby in and around Jackson Atoll,” the source said.

Philippines welcomes China's donation of patrol boats, weapons - China Military The Philippines has welcomed China's donation of four patrol boats and 30 units of 40-mm rocket-propelled grenade launchers to the Philippines Navy. Navy spokesman Cmdr. Jonathan Zata said on Sunday that the boats and the weapons were delivered last week.

Chinese theft continues in cyberspace as new threats emerge, U.S. intelligence officials warn  - The Washington Post China continues to steal intellectual property and trade secrets from U.S. companies for its own economic advancement and the development of its military but “at lower volumes” since the two countries forged an agreement in 2015 meant to curb the practice, according to a report published Thursday by American intelligence agencies.

China-Fiji have mutual respect for decision-making processes | Papua New Guinea Today Bo said that the Chinese government will not be involved in the election process as they understand it’s an internal affair and a democratic process. However, they’re ready to assist the Fijian government in any specific training needed for the back-end of the electoral process.

China launches new twin BeiDou-3 navigation satellites - Xinhua The twin satellites are the 33rd and 34th of the BeiDou navigation system. They entered orbit more than three hours after the launch. After a series of tests, they will work together with eight BeiDou-3 satellites already in orbit, said the launch service provider. A basic system with 18 BeiDou-3 satellites orbiting will be in place by the year end, which will serve countries participating in the China-proposed Belt and Road Initiative.

解放军报发表解辛平文章:军队为打仗而存在 - 中国军网 p1 PLA Daily commentary by "Jie Xinping"--"Military exists to fight

  

Tech And Media

The Wake-Up Call for China’s Chip Industry - Caixin Global When it comes to higher-end central processing units (CPU), field-programmable gate arrays (FPGA), and electronic design automation tools, imports account for as much as 95% of the components used in China, according to Zhu Jing, research director at the Beijing Semiconductor Industry Association. The lag between chips produced by domestic companies and foreign companies is significant, Zhu said, with domestic CPUs only 30% to 50% as efficient as equivalents produced by U.S. industry leader Intel. That lag is actually small compared to other parts of the chip industry, since CPUs are considered more important and receive more government funding than other types of chips. “China is catching up when it comes to CPUs, but for areas like graphics processing units and FPGAs, it hasn’t begun to close the gap,” Huang Bowen, an engineer at the Chinese Academy of Sciences’ Institute of Computing Technology, told Caixin.

Big-Data Operator Has Big First Day in New York - Caixin Global Jiguang, formally known as Aurora Mobile Ltd., is among a group of Chinese technology companies that have recently tapped the U.S. market to raise funds. On the same day, Shanghai-based group-buying site Pinduoduo Inc. also floated on the Nasdaq to raise over $1.6 billion.

Y Combinator talks incubation in China – TechNode Eric Migicovsky, a partner at YC, shared his thoughts on the potential and globalization of Chinese innovation with Daniel Hsu..“Beijing is the first tech ecosystem that does not rely on the Valley,” Eric said. The Chinese system is breeding exclusive domestic markets and business models. Meanwhile, it’s integrating some of the most advanced technology and business trends. This has convinced YC to firmly believe in Beijing’s future global leading position.

China says Facebook subsidiary has not been issued business licence | Financial Times $$ An employee of the market supervision and administration bureau of Hangzhou city, where Facebook had registered its subsidiary, said on Monday that there was no record of the company's registration in their internal database, and no record of the cancellation. She could not confirm whether the bureau had received a licence application from Facebook. The employee added that if the registration had been officially cancelled by the company, there would be a record of the cancellation, but in Facebook's case there was no record of the cancellation.

 

Society, Art, Sports, Culture And History

How Chinese students who return home after studying abroad succeed – and why they don’t | South China Morning Post David Zweig and Zoe Ge say Chinese students are returning home in droves after studying overseas, but whether they earn more and are satisfied with their lives depends on choice of major, work experience abroad and their reasons for returning.. The number of Chinese students returning from abroad has grown by leaps and bounds. In 2017, 608,000 students went abroad and 480,900 returned. China is proud of a return rate of 79 per cent; in 1987, the return rate was about 5 per cent, and in 2007 only 30.6 per cent...Drawing on a recent questionnaire by the Centre for China and Globalisation (CCG) that was posted on the website of Zhaopin, a job placement firm in China, and the 1,700 responses they shared with us, we looked at seven aspects of students’ decision to return // wonder how good the methodology for this was, between Zhaopin and CCG

 

Energy, Environment, Science And Health

China tells medical institutions to stop using Huahai heart drug | Reuters Public confidence in domestic-made drugs has been shaken since Huahai’s case came to light at the beginning of July, followed by a government investigation concluding Changsheng Bio-technology Co Ltd sold a substandard rabies vaccine. The prices of healthcare shares have since dropped. In the Huahai case, the European Medicines Agency found the firm’s valsartan blood and heart drug tainted with an impurity linked to cancer, saying the issue likely dated to changes in the firm’s manufacturing processes in 2012.

 

Agriculture And Rural Issues

Dim Sums: Rural China Economics and Policy: Audit of China Grain Reserve to Uncover Hidden Dangers Some of the specific concerns can be inferred from the State Council document: Statistics on grain purchases and reserves reported to higher-level authorities have been inflated; Warehouses receive subsidy payments and loans for holding grain that they don't actually have; Grain was not deducted from reported holdings after being sold or transferred to another province; An unknown proportion of grain held in inventory is inedible or even toxic--i.e., is a food security hazard

China brings 10,000 teachers out of retirement to take up jobs in impoverished rural areas | South China Morning Post Policy to send ‘outstanding’ educators to schools in the countryside for at least a year is part of government drive to ease poverty in remote areas

 

Education

State Council reshuffles Education Inspection Committee - Gov.cn The State Council issued a notice on July 30 announcing the reshuffling of the Education Inspection Committee, appointing Vice-Premier Sun Chunlan as the committee head. Education Minister Chen Baosheng and deputy secretary-general of the State Council Ding Xiangyang will be the committee’s deputy directors.

 

Books And Literature

著名剧作家沙叶新去世 曾在《围城》中饰曹元朗|围城|沙叶新|剧作家_新浪娱乐_新浪网 Playwright Sha Yexin has died at age 79

 

Beijing

Beijing to shut 1,000 manufacturing firms by 2020 - paper | Reuters Beijing will focus on dynamic, high-tech industries and withdraw from “ordinary” manufacturing, the Communist Party paper People’s Daily reported, citing a recent policy document published by the Beijing municipal government. The city has already rejected registration applications from 19,500 firms, and shut down or relocated 2,465 “ordinary” manufacturers, the paper said.

 

Jobs And Events

The Definitive China DC Happy Hour Tickets, Wed, 8 Aug 2018 at 17:30 | Eventbrite A number of China and Asia-related organizations are co-hosting a “Definitive” DC China Happy Hour on the auspicious date of August 8. Early bird tickets are $10 and the event will serve as an opportunity to network and hear about the various China-related organizations available to folks in DC. Scott Tong, former China bureau chief for NPR Marketplace, will do a reading from his recent book, A Village with My Name.