Trade talk rumors; Huawei; Li Keqiang and PBoC discord?; CCDI report; Party in the grassroots

Rumors about progress in the US-China trade talks are flying again. Perhaps the Chinese side is finally making more substantive offers as the original March 1 deadline approaches, or perhaps both sides recognize the best they can get before then is a set of high-level Memoranda of Understanding that the US side at least hopes can be turned into deals with more teeth when President Trump and General Secretary Xi eventually meet again? We should find out soon enough, though I remain suspicious of any of the leaks on the eve of this round.

Trump already has three Asia trips scheduled between now and the end of June—next week to Vietnam to meet Kim, May 26-28 to Japan to visit the new Emperor, and the G-20 Summit in Osaka, Japan June 28-29—so it seems unlikely he would schedule a fourth to go meet with Xi. So if they are to meet before May does that increase the likelihood a mooted next Trump-Xi meeting will be in the US?

Reading the Beijing tea leaves is tough, reading Trump tweets sometimes may be equally so. Earlier today he tweeted:

Remember the long-rumored executive order banning Chinese telecom equipment from U.S. wireless networks, one whose existence and impending signing has been reported several times since last year, and most recently last week? According to the latest round of stories it was supposed to have been signed by last Friday, but so far it appears to remain unsigned. Are the above tweets a sign of Trump’s wavering in the campaign against Huawei? That would be shocking giving what other members of his administration and the US national security bureaucracy has been doing to convince allies to de-Huawei their networks.

But, as the US-China trade talks appear close to some sort of consummation the rumor is back that the case against Huawei CFO Meng Wanzhou will be dropped. I have not confirmed anything and when a similar rumor was going around a few weeks ago it was eventually shot down, but given the above tweets I figured it was worth letting you all know the chatter is back.

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The Essential Eight

1. US-China trade

U.S., China sketch outlines of deal to end trade war - sources | Reuters:

Negotiators are drawing up six memorandums of understanding on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources familiar with the progress of the talks...

The process has become a real trade negotiation, the source said, so much so that at the end of the week the participants considered staying in Beijing to keep working. Instead they agreed to take a few days off and reconvene in Washington...

One senior Chinese government official familiar with the talks said that extending the deadline was an option, though both sides were trying to reach agreement before March 1 and any extension would not be too long.

It is possible the talks won’t resolve all the differences, and it will be up to the two heads of state to make a final decision, the official said.

Trump, Xi Face Pressure at Home Over Trade - WSJ $$:

"Are they coming to try to blackmail us again?” the official asked, referring to an unequal treaty the Qing Dynasty signed with Western allied forces in 1901 to end an uprising against imperialists and colonialism.

The Xi administration has worked hard to make sure the nationalist backlash doesn’t get out of hand, including silencing online commentary suggesting anti-U. S. boycotts. Even so, rising nationalism puts great pressure on Mr. Xi to oppose U.S. demands....

“You say what you have [in China] is a market economy with Chinese characteristics,” former Finance Minister Lou Jiwei said at an economic forum in Beijing on Saturday. “It’s the ‘Chinese characteristics’ that are being targeted.”

China Will Not Bargain Yuan Rate for Trade Disputes: Foreign Ministry - Caixin Global:

China won’t resort to currency depreciation for competitive purposes in trade and hopes the U.S. can respect market rules and not politicize currency issues, Geng Shuang, a foreign ministry spokesman, said at a routine press briefing.

Geng’s comments followed reports that the U.S. is pressing China to keep the yuan stable as part of an agreement intended to end the countries’ trade war.

China Trade Offer: $30 Billion More U.S. Agriculture Imports - Bloomberg:

The offer to buy the extra farm produce would be part of the memoranda of understanding under discussion by U.S. and Chinese negotiators in Washington, according to the people, who asked not to be identified because the plans are confidential. The purchases would be on top of pre-trade war levels and continue for the period covered by the memoranda, they said.

As part of the talks, officials are also planning to discuss removing anti-dumping and anti-subsidy tariffs on distillers dried grains, a by-product of corn ethanol production that’s used in animal feed, people said earlier. Soybeans, corn and wheat futures prices rose in Chicago in response to the news

Russia Exploits U.S.-China Trade Tensions to Sell More Soybeans - WSJ $$:

Russia’s overall trade with China, its biggest individual trading partner, rose more than 27% to over $100 billion last year, according to Chinese trade data. The trade has mostly involved oil, gas and metals. But Russian agricultural exports also are growing, especially soybeans, which have risen more than 10-fold in four years to nearly 1 million tons.

2. Li Keqiang and the PBoC not on the same page as stimulus hopes persist

China’s Li Keqiang in rare spat with central bank | Financial Times $$

In a statement released late on Wednesday, Mr Li warned of risks from January’s credit deluge.

“The increase in total social financing appears rather large on the surface, but if one analyses in detail, a large part of this rise was bill financing and short-term lending. Not only does this potentially create ‘arbitrage’ and ‘empty cycling’ of funds, but it may also bring new potential risks,” he said. ..

Just hours later, the People’s Bank of China appeared to respond directly to Mr Li’s criticism in an interview with an unnamed PBoC official published in Financial News, the central bank’s official newspaper, under the headline “Accurately regarding the January financial data”.

The PBoC response - 正确看待1月份金融数据 央行有关部门负责人就市场关注问题接受《金融时报》记者采访 

This strange exchange is not a good look for projecting confidence in management of the economy...

China central bank sees benchmark rate cut as last resort, may use other tools - sources | Reuters:

China’s central bank is not yet ready to cut benchmark interest rates to spur the slowing economy, despite cooling inflation and a stronger yuan, which have fanned market expectations of such a move, policy sources told Reuters.

But the People’s Bank of China (PBOC) is likely to cut market-based rates and further lower banks’ reserve ratios (RRR) to boost credit growth and reduce firms’ borrowing costs, according to the sources involved in internal policy discussions.


As speculation continues to rise that more stimulus is coming, and that the leveraging reduction campaign is easing off—China’s debt reduction drive becomes trade war casualty as Beijing unleashes bank lending | South China Morning Post:

While Beijing insists it will not embrace massive policy easing to avoid a repeat of the sharp build-up in debt seen after the global financial crisis a decade ago, it is clear that the debt reduction drive has come to an end, at least for now...

China’s economic policymakers are explicitly encouraging additional debt accumulation with local governments allowed to sell more bonds to finance newly approved infrastructure projects, with the bonds front-loaded to get the money to work sooner...

“There’s nothing wrong with trying to stabilise investment [through more lending]. It’s not an evil thing. On the contrary, we must spend more effort on it,” said Wang Yiming, deputy director of the Development Research Centre of the State Council.

“The downward pressure [on the economy] remains huge” despite quickened pace of infrastructure project approval and bond issuance in the second half of last year, Wang said.

China may introduce more aggressive stimulus measures - CNBC:

Three economists and one Hong Kong-based CEO told CNBC in the last week that they anticipate a significant move from the People's Bank of China in the near future as Chinese officials continue to grapple with a slowing economy and the economic stresses of the ongoing trade war with the United States.

3. Does America have a China strategy?

The US is obviously undergoing a marked shift in its views towards China. The Trump administration has diagnosed many of the problems in the relationship but at least publicly has not done a great job articulating a coherent strategy to deal with the New Era of US-China Relations. Hal Brands, Henry A. Kissinger Distinguished Professor of Global Affairs at the Johns Hopkins School of Advanced International Studies, and Zack Cooper, a research fellow at the American Enterprise Institute, take a stab at building a framework for a new strategy in the latest issue of the Texas National Security Review.

After the Responsible Stakeholder, What? Debating America’s China Strategy – Texas National Security Review:

Now that the responsible stakeholder approach to China is essentially defunct, how should America respond? There are four options — accommodation, collective balancing, comprehensive pressure, and regime change...

There are four basic options for resetting America’s China policy: accommodation, collective balancing, comprehensive pressure, and regime change. These options are ideal-types: They illustrate the range of possible approaches and capture distinct analytical logics about the nature of the China problem and the appropriate response. At one extreme, Washington could seek an accommodation with Beijing in hopes of striking a grand bargain and establishing a cooperative long-term relationship. At the other extreme, the United States could seek regime change or even precipitate a military showdown to prevent China from growing more powerful. Both of these options assume that America must take urgent action to “solve” the China challenge. Yet, neither of these approaches is realistic, and, in fact, each is downright dangerous.

The real debate involves the two middle options: collective balancing and comprehensive pressure...

...we favor a hybrid approach fusing elements of collective balancing and comprehensive pressure. This strategy, which we call collective pressure, would seek to build a coalition of allies and partners strong enough to deter or simply hold the line against Chinese revisionism until such a time as the Chinese Communist Party modifies its objectives or loses its grip on power. If China continues to challenge critical elements of that order, and if Chinese power continues to grow in dangerous ways, the United States would gradually intensify the pressure. It would lead the coalition in efforts to reduce China’s geopolitical, economic, and ideological influence; weaken its power potential; and exacerbate the strains under which Beijing operates...

We believe a collective-pressure strategy offers the best way forward. But regardless of the approach advocated, it is past time to stop circling the China problem and start a more analytically rigorous debate over what to do about it.

Marco Rubio's recent interview with Breitbart is a good marker of the mood towards China here in DC -Rubio: ‘The Chinese Effort to Supplant America Has No Precedent’ - Breitbart:

The Chinese effort to supplant America has no precedent,” Rubio said in a lengthy phone interview on Tuesday evening. “The Soviet Union wanted to ideologically supplant us, so they were a geopolitical competitor primarily trying to overthrow governments and install communism. And they were a military competitor. But they were never an industrial or economic competitor, and they approached us sort of frontally and openly. The Chinese effort to supplant America is first deeply rooted in their view of history, that it is their rightful place to be the most powerful nation on earth, and that the last hundred years are an aberration, and so they’re going to set things right. Second, it’s based on frankly suckering the West and America into believing that they are a poor and developing country who just wants to be like us. We’ve made policy decisions for two decades or longer based on that assumption that’s now come back to bite us.”

4. China's Middle East visitors this week

Chinese president meets Iran's parliament speaker - Xinhua:

Chinese President Xi Jinping on Wednesday met with visiting Iranian Parliament Speaker Ali Larijani at the Great Hall of the People in Beijing.

No matter how the international and regional situation changes, China's resolve to develop a comprehensive strategic partnership with Iran will remain unchanged, Xi said during the meeting, hailing that China and Iran have a long history of friendship and share long-tested mutual trust and friendship.

Under the new situation, China and Iran should further deepen strategic mutual trust and continue to extend mutual understanding and support on issues involving each other's core interests and major concerns, said Xi.

Amid Trouble With the West, Saudi Arabia Looks East - The New York Times:

The relationship has grown because both countries have ambitious development plans that they believe the other can help achieve. Along with seeing Saudi Arabia as a stable source of oil, China hopes that the kingdom can play a role in its Belt and Road Initiative, an ambitious plan by Mr. Xi to build rail lines, power networks and roads to better connect China to allies in Europe and Africa.

On the Saudi side, Prince Mohammed has begun plans to open up the kingdom and diversify its economy, a project called Vision 2030, and he hopes that Chinese companies will help it succeed.

“China has the experience, funds, technology and talents for the Vision 2030,” said Li Guofu, a researcher on Middle Eastern issues at the China Institute of International Studies, a research organization overseen by the Chinese Ministry of Foreign Affairs.

China never plays politics in Middle East - Global Times:

Most Western opinion believes the trip reflects Saudi Arabia's "Look East" policy, as the country was alienated from the West through the Jamal Khashoggi case. Such a shallow opinion underestimates the profound changes taking place in the Middle East and the world...

China is the largest buyer of Saudi crude oil and Saudi Arabia is China's largest crude supplier. Asian countries account for about 70 percent of Saudi Arabia's oil exports. The "Look East" policy has significant meaning for the Arab country. Moreover, the entire Middle East will attach more importance to the Asian market. If economic security is the most important part of national security, then the security meanings of the "Look East" policy will multiply...

A main target of Saudi Vision 2030 is to make the country less reliant on oil exports. The target can be coordinated with China's BRI. Countries in the Middle East welcome the BRI as it benefits the region's long-term economic and social development. Iran also has the need to develop other economic sectors with the help of the BRI.

China won't be a geopolitical player in the Middle East. It has no enemies and can cooperate with all countries in the region. China's increasing influence in the Middle East comes from pure friendly cooperation. Such a partnership will be welcomed by more countries in the Middle East.

Saudi Aramco to sign China refinery deals as crown prince visits: sources | Reuters

5. Australia clearly needs another Chinese lesson

China's Dalian port bans Australian coal imports, sets 2019 quota - source | Reuters:

Customs at China’s northern port of Dalian has banned imports of Australian coal and will cap overall coal imports from all sources to the end of 2019 at 12 million tonnes, an official at Dalian Port Group told Reuters on Thursday.

The indefinite ban on imports from top supplier Australia, effective since the start of February, comes as major ports elsewhere in China prolong clearing times for Australian coal to at least 40 days

China customs testing coal imports for environmental reasons: foreign ministry | Reuters:

China’s customs administration is testing coal imports for reasons including environmental protection, a foreign ministry spokesman said on Thursday.

Spokesman Geng Shuang made the comment at a regular press briefing in response to a question about a ban on imports of Australian coal.

Comment: Sure, testing Australian coal for environmental protection reasons is a credible reason to block its import...

China-Australia relations ‘will not be helped’ by foreign influence register | South China Morning Post:

Xu Liping, an expert at the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, said Robb’s departure would have a negative impact on China-Australia relations.

“Former Australian officials who participate in think tanks after retirement can help speak for China, and reduce the Australian government’s misjudgment of China,” Xu said, adding that it would not be in Australia’s interest to sever ties with China, because China was Australia’s main export market.

“Australia needs to understand that many of Australia’s exports to China are commodities, and there are many alternatives.”

This kind of racism won't help - Chinese embassy ‘disgusted’ after Australian senator Barry O’Sullivan blames ‘Chinaman’ for food safety risk | South China Morning Post:

China has condemned remarks made by Australian politician Barry O’Sullivan, who said his country should “start with the Chinaman” when addressing risks posed to the country’s agriculture and food safety.

A statement on Wednesday on the website of China’s embassy in the capital Canberra said: “We are deeply astonished by the disgusting and racist comments insulting Australian Chinese by Senator Barry O’Sullivan of the Nationals.

6. Huawei

U.S. won't partner with countries that use Huawei systems: Pompeo | Reuters:

U.S. Secretary of State Mike Pompeo on Thursday warned that the United States would not be able to partner with or share information with countries that adopt Huawei Technologies Co Ltd systems, citing security concerns.

In an interview on Fox Business Network, Pompeo said nations in Europe and elsewhere need to understand the risks of implementing Huawei’s telecommunications equipment and that when they did, they would ultimately not use the company’s systems.

China vows to step up scientific, technological cooperation with all parties - Xinhua:

Foreign Ministry Spokesperson Geng Shuang made the comments at a news briefing when asked about some countries' remarks that Chinese enterprises should be excluded from the construction of their 5G networks due to the "security risks" of Chinese products and devices.

As a cutting-edge technology, the fifth-generation (5G) mobile communication technology is not exclusive to one or a few countries, but concerns the development of the global economy, the interests of all countries and the progress of human civilization, Geng said ahead of the Mobile World Congress 2019 scheduled for Feb. 25-28 in Barcelona, Spain.

Why low profile Huawei founder Ren Zhengfei has grabbed the microphone to defend telecoms giant | South China Morning Post:

“Ren has changed his mind since the spate of incidents from last year, as speaking directly to the media works better than letting the media write on groundless information,” said one of the people familiar with the company. “We can tell that Huawei’s voice has been heard by more people after Ren decided to speak out.”..

Huawei did not provide an official statement to explain why Ren has taken a more active role in interviews lately. In his interview with CCTV, Ren joked that he had been “forced” by his public relations team to speak out.
Burson Cohn & Wolfe, the public relations agency that handles Huawei's international PR affairs and crisis communication, did not immediately reply to a request for comment.

CNN Question "What Do You Think Is the Main Reason Behind the US Campaign against Huawei?" Goes Trending on Weibo | What's on Weibo:

The Huawei case is an ongoing topic of discussion on Chinese social media. This time, a poll held by CNN is top trending on Weibo: the majority of those participating said the US campaign against Huawei is all about politics.

Banning Huawei from 5G development could delay entire network growth: T-Mobile Poland CEO - Xinhua:

"If you exclude a market leader, and Huawei is a market leader in new technology, and knowing that you have almost all operators having Huawei equipment, this will bring some difficulties, this is clear. This could end up in a delay," Andreas Maierhofer, the T-Mobile Poland CEO, was quoted by media as saying during a press conference about the company's annual results.

How Huawei lost its PR battle in the west | Financial Times $$:

Earlier this week, Ren Zhengfei, the company’s founder, hit back at the allegations in two television interviews. He told the BBC that the US would not be able to “crush” Huawei, adding: “If the lights go out in the west, the east will still shine. […] America doesn’t represent the world.”

For Mr Ren, a reclusive former Chinese army engineer who very rarely gives interviews, the public comments were the latest step in Huawei’s counteroffensive against an onslaught that threatens to damage its global business.

The interview came ahead of Mobile World Congress, the telecom industry’s biggest annual trade show where the Chinese company has outshone rivals for years with enormous displays of its technological prowess and armies of marketing staff.

7. CCDI work report

China's top anti-graft body lays out work priorities of 2019 - Xinhua:

Enhancing the Party's political building should be taken as the overarching principle, with resolute action to crack down on the practice of formalities for formalities' sake and bureaucratism, according to the report.

The system and mechanism for disciplinary inspection and supervision will be innovated in order to convert the advantages of the overall system into more efficiency governance, the report said.

It also highlighted further efforts to intensify political inspection and crack down on corruption to consolidate and expand the sweeping victory in the fight against corruption.

The work report - 赵乐际在十九届中央纪委三次全会上的工作报告 

China makes new progress in anti-graft fight in 2018 - Xinhua:

China's top graft-buster Zhao Leji said that new progress had been achieved in the work of disciplinary inspection and supervision in 2018.

Zhao, a member of the Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China (CPC) and secretary of the CPC Central Commission for Discipline Inspection (CCDI), made the remarks while delivering a work report at the third plenary session of the 19th CCDI of the CPC on Jan. 11. The report was made public on Wednesday.

A total of 25,000 officials, including 29 centrally-administrated officials, were punished for violating political discipline in 2018, according to the work report.

The report listed four major incidents and discussed the lessons from them- 中央纪委三次全会工作报告点名的四大问题事件,背后有哪些深刻教训?:

秦岭北麓西安境内违建别墅 The Xi'an Qinling villa scandal;
湖南洞庭湖违规违法建设矮围 Illegal construction by Dongting Lake in Hunan;
京津冀违建大棚房 Illegal construction in Jing-Jin-Ji (Beijing-Tianjin-Hebei);
长春长生公司问题疫苗 The Changchun vaccine scandal

Half a Million Party Members Penalized for Corruption in 2018 - Caixin:

The report says the punished individuals include 68 high-level officials registered in the Organization Department of the Central Committee — the country’s highest Party personnel management organization.

Interestingly, 177,000 individuals received punishment for “poverty alleviation-related corruption” cases.

Smaller numbers were cited for other violations. The report said 27,000 cases involved violations of ”political discipline.” 14,000 “gang-related” cases were confirmed, and 1,899 individuals involved in the cases were referred to judicial authorities for further investigation.

8. Party reinserting itself into the grassroots everywhere

This is a very interesting article by Zhou Wang, an assistant professor at Nankai University’s Zhou Enlai School of Government, that gives a personal look at the efforts to rebuild urban grassroots management, and the "Fengqiao Experience" in practice.

Why China Is Reactivating Its ‘Work-Unit People’ - Sixth Tone:

One morning early this year, I received an unexpected knock on my door. Opening it, I found myself face-to-face with a group of neighborhood cadres from the local residents’ committee. They wanted to ask me to take on a more active neighborhood-management role.

Their enthusiastic pitch wasn’t random. To strengthen its ability to manage and oversee the grassroots level of society, China has launched a major effort to recruit so-called danweiren, or “work-unit people” to participate in community management. As a university professor and Party member, I was a natural candidate...

The return of work-unit people to community management is part of a broader push to strengthen the reach of Party organizations and improve awareness of conditions on the local level. Reporting to local Party organs, work-unit people are expected to directly participate in all kinds of community management-related activities, everything from neighborhood patrols and trash pickup to teaching midday classes and offering medical, legal, or financial advice. They’ve been called the “red blood cells” of the state apparatus — carrying the will and interests of the Party like oxygen to the country’s various governing organs.

Together, they form a sizeable network and resource pool that the Party can draw on. According to Qian Xian, an official outlet run by the Beijing Communist Party, by the end of 2018, 717,300 Party members from government agencies, enterprises, and institutions around the city were reporting to the subdistricts and communities where they live...

This push comes at a time when the tentacles of the Party and government are still pervasive and reach deep into the private sphere. In fact, with the assistance of technology such as mobile internet and big data analysis, the government can now arguably organize and mobilize the population to a degree once thought impossible.

Business, Economy, Finance And Trade

China's Rich Are Finding It Harder Than Ever to Hide From Taxman - Bloomberg: A global financial-disclosure system -- the Common Reporting Standard -- is beginning to bite for those stashing money overseas. Last year, China started automatically exchanging information alongside roughly 100 jurisdictions about accounts belonging to people subject to taxes in each member country... “After the introduction of the CRS rules, high-net-worth individuals are pretty nervous and overwhelmed,” said Liu Shuang, a former anti-avoidance specialist for the Chinese tax bureau who now leads a wealth tax management team in Beijing and has seen demand for her advice soar since last year. “In addition to concerns about back taxes, they are also worried about the exposure of overseas assets.”..

Beijing to provide delivery men with rental housing - Xinhua Relevant departments will ensure implementation of Beijing's subject plan of the logistics industry. Rent-only staff quarters and supporting facilities under integrated management will be constructed in existing logistics parks and those in planning. State-owned firms are encouraged to build rental housing on their idle land as staff dormitories for large logistics companies.  //  Comment: In a previous era delivery men would have been targets for underground Communists plotting a revolution...during his Beijing inspection tour before the Lunar New Year Xi chatted with some delivery men per the CCTV footage, they looked very nervous.

China's online P2P lending industry is undergoing a massive shake out · TechNode Yingcan Group, a Shanghai-based research firm, estimates that half of China’s online P2P platforms disappeared in 2018. They expect 70% of those remaining to be out of business by the end of 2019. If this prediction is true, within the span of two years China’s P2P industry will have shrunk by 85%.

HNA Said in Talks to Sell Reuters London Office at Big Discount - Bloomberg HNA Group Co. is in advanced negotiations to sell the former U.K. headquarters of Thomson Reuters Corp. at a sharp discount to the price it paid for the building less than four years ago, according to people with knowledge of the matter.

China's Hottest Stocks Are on the Brink of a Bull Market - Bloomberg The ChiNext Index jumped as much as 3.1 percent Thursday, briefly taking its rally since an Oct. 18 low to more than 20 percent. Stocks extended gains following a report that China and the U.S. are working on six pacts for a potential trade deal. A close above 1,446.04 points would take the Shenzhen gauge past the threshold that typically denotes a bull market after a decline of the same magnitude.

China’s First Financial Court Wants a Bigger Voice Abroad - Caixin In the 12-page plan, the court said it would strengthen judiciary judgments on high-profile cross-boarder financial cases to echo the national strategy of opening its financial system to foreigners, as well as those in involving international finance trading rules and foreign defendants. It would also look to foreign courts for models on how to operate over the next five years, by bringing financial experts from home and abroad, and will file financial cases simultaneously with foreign courts in areas such as derivatives trading and internet finance to increase its reputation as a global financial court, the statement said.

Tesla Reports Drop in China Sales as Trade War Bites - Caixin Revenue in China, Tesla’s largest foreign market, accounted for 8.18% of global revenue in 2018, down 9 percentage points from the previous year, according to the filing. Tesla attributed the shrinking share of China sales to punitive tariffs imposed by China on U.S. cars. The company said heavier American tariffs on auto parts from China also led to rising production costs in the U.S.

China moves fast toward winning battle against poverty by 2020 - Xinhua n the past six years, China lifted 82.39 million rural poor out of poverty, with the rural poor population down from 98.99 million at the end of 2012 to 16.6 million at the end of last year, said Ou Qingping, deputy director of the State Council Leading Group Office of Poverty Alleviation and Development, at a press conference. The poverty headcount ratio has dropped from 10.2 percent to less than 1.7 percent in the same period, Ou said. As this year is an important year for winning the tough battle against poverty by 2020, and the government has set the target to reduce the rural poor population by more than 10 million this year, he added.

Yicai Global - China's Stellar E-Realtor Crashes to Earth After Burning Through USD350 Million Chinese online realtor Aiwu Jiwu Real Estate Economy has shut its website and app and Deng Wei its founder has backed out as an investor, closing the door on the meteoric rise of the firm that once bagged USD350 million from investors and dominated Shanghai's rental skyline. A mere four years witnessed its rise from visionary startup, to unicorn, to legend, to liquidation, Chengdu-based National Business Daily reported online on Feb. 18.

In China, the Business of Renting Kitchen Space Heats Up - Bloomberg One shared kitchen startup, Panda Selected, plans to announce on Friday a $50 million investment from a group of international backers. The Beijing-based company is snapping up real estate to get ahead of local rivals and a deep-pocketed competitor from Los Angeles run by Travis Kalanick, the billionaire co-founder of Uber Technologies Inc. The new investment in Panda is led by Tiger Global Management, a backer of Uber before Kalanick was forced out in 2017. Other investors include DCM and Glenridge Capital, with the latest round bringing its total capital to $80 million, the company said. The deal values Panda Selected at as much as $300 million

Politics, Law And Ideology

dpa International - Energy executives abroad ensnared in China's Xinjiang crackdown the crackdown is also targeting businesspeople, especially those with foreign ties, which contradicts the Chinese government’s aim of developing and expanding trade in the region. ..dpa has interviewed the family members of four people working in the energy sector in Kyrgyzstan and Kazakhstan who have reportedly disappeared in Xinjiang internment camps. Many others who were doing cross-border trade in China and Kazakhstan have been snatched by police and sent to the camps. "International businesses have been basically foreclosed for Uighurs and Kazakhs," said Rian Thum, a history professor who focuses on Uighur history and religion at Loyola University New Orleans. "Going to a foreign country is enough to get people sent to the camp, and that precludes doing business."

American Firm, Citing Ethics Code, Won’t Sell Genetic Sequencers in Xinjiang - WSJ $$ Thermo Fisher Scientific Inc. said it will no longer be selling or servicing genetic sequencers in China’s Xinjiang region, following mounting criticism that its products were used for state surveillance of citizens there that enabled human rights abuses. The Waltham, Mass.-based company said Wednesday the decision to stop supporting customers of its human identification technology in the area—where police have rolled out one of the most extensive state surveillance programs ever built—was “consistent with Thermo Fisher’s values, ethics code and policies” and followed “fact-specific assessments.”

Rising Uygur soccer player Erfan Hezim back with Chinese team after release from Xinjiang internment camp | South China Morning Post After months of silence, Hezim finally resurfaced on Chinese social media and returned to training – with a message of “thank you” to the party and the government for giving him “a stage to realise my dreams”. On Monday, Hezim’s employer, the Chinese Super League team Jiangsu Suning Football Club, released a batch of photos on Weibo, China’s Twitter-like microblogging service, of its reserve team practising during its winter training in southern Guangdong province. Hezim is featured in two of the pictures.

Wary of Xinjiang backlash, China invites waves of diplomats to visit | Reuters The country’s foreign ministry said on Saturday that Geneva-based diplomats from Pakistan, Venezuela, Cuba, Egypt, Cambodia, Russia, Senegal and Belarus were visiting Xinjiang on a trip that ended on Tuesday. Six diplomatic sources told Reuters that the government had invited for the next visit China-based diplomats from Saudi Arabia, Algeria, Morocco, Lebanon, Egypt, Singapore, Vietnam, Laos, Myanmar, Cambodia, Bangladesh, Russia, Turkmenistan, Georgia, Hungary and Greece.

This Australian Baby Boy Has Spent His Whole Life Trapped In China’s Police State. Now His Dad Wants Him Out. The boy’s mother, a Uighur who holds Chinese citizenship, was detained by Chinese authorities shortly after she gave birth in August 2017. She was only released a few days later because she was breastfeeding...According to S.’s statement to Australia’s Administrative Appeals Tribunal, which oversaw S.’s citizenship appeal for his son, S.’s wife was informed on her release from detention “that once the child was one year old, she would be returned to detention and most likely the son will be put in a holding camp for children, given a Han Chinese name, and adopted out to a Han Chinese family.”

High tech used to detect rogue police - Global Times Using facial recognition and drones to detect criminal suspects and unlawful acts seems nothing new, but recently, a local disciplinary watchdog in North China's Hebei Province caught delinquent police officers by using high technology.  Using drones, the Commission for Discipline Inspection in Tangshan, Hebei Province recently detected several delinquent police and traffic law officers while checking on illegal vehicles on the road.  Three of them were warned and eight others were reprimanded by the commission, according to an article released by the Hebei discipline inspection commission.

Is this device on the People’s Daily front page to point to stories about other leaders when Xi is the rest of the front page new?

Foreign and Military Affairs

China ‘puts wartime command system to test’ in South China Sea drills | South China Morning Post China has conducted a month of drills in the South China Sea and the western and central Pacific involving its navy, air force and missile unit. Military observers said the exercises indicated the People’s Liberation Army wanted to put its wartime command system to the test and also strengthen its missile defences in the South China Sea.

UK's Hammond: talk of warship deployment complicates China ties | Reuters When asked directly on BBC radio if the relationship had been damaged by Williamson’s threat, Hammond said: “It is a complex relationship and it hasn’t been made simpler by Chinese concerns about royal navy deployments in the South China Sea.” A Ministry of Defence official said the speech had been cleared in advance by both Hammond’s department and the prime minister’s office.

Pentagon is scrambling as China 'sells the hell out of' armed drones to US allies - CNBC As one U.S. official at Abu Dhabi's international defense expo, IDEX, put it this week, "China has been selling the hell out of its drones" to Gulf militaries like those of the United Arab Emirates (UAE) and Saudi Arabia. The U.S., while a top security partner to these states, currently does not supply them with its armed drone technology due to strict export regulations. But in the face of record Middle East defense spending and encroaching foreign competition, it's under renewed pressure to do just that.

K-Pop Shows May Return to China in Sign of Easing Korea Tensions - Caixin Ties between Beijing and Seoul have been strained since South Korea agreed in 2016 to host a U.S. missile defense system strongly opposed by China. No major South Korean musician has performed in China since, and promoters haven’t bothered to invite Korean acts for a couple of years because of the perception that the government would reject such visa applications. But they’ve recently started making such requests, according to the people, who asked not to be named because the topic is politically sensitive. It’s unclear whether the country’s Ministry of Culture and Tourism is inclined to approve any of the applications, they said.

China strengthens map printing rules, forbidding publications printed for overseas clients from being circulated in the country - Global Times The Chinese government published a notice to strengthen the import and export of Chinese maps on Thursday, highlighting regulations on domestically produced overseas publications containing maps, which analysts believe will make the government's position on territory clear to the international community. Publishing houses that print overseas publications containing maps should obtain approval from provincial-level press and publication administrations. Printing of other products entrusted by overseas clients that contain maps should be registered with local press and publication administrations, according to the notice.  Overseas map-related products are banned from distribution in China, the notice read.

China Tightens Grip on East African Port - WSJ $$ China Merchants Port Holdings has fully taken over operations at Djibouti’s Doraleh Container Terminal, maritime officials say, while state-owned China Civil Engineering Construction Corp. and China State Construction Engineering Corp. have built a new, multipurpose cargo facility next door to handle cars, livestock, steel and other goods. Crew members of ships that recently docked at Djibouti said the new port resembles other Chinese-managed ports around the world.

Chinese birth tourism biz thrives despite US charges - Global Times A total of 19 suspects were accused of links to three "birth houses" operating in Southern California that catered to women from China and were dismantled by federal agents in March 2015, Reuters reported. Benjamin, a manager of a US medical platform recommending US obstetricians and gynaecologists to pregnant women from China, told the Global Times that the case has not affected and will not affect the birth tourism business in the US, but will help legitimize it.  Benjamin is a Chinese person who has been in the business for seven years in Irvine, California, which is among the most popular destinations for pregnant Chinese women to give birth in. "Several years ago, only the super wealthy Chinese could afford to come to the US to give birth. But the business is now more affordable," he said.

Chinese fishing ships should leave Iran waters: Admiral An Iranian naval commander on Tuesday said Chinese fishing vessels should leave Iranian waters, according to reports in Iran’s state media. “Chinese fishing ships should leave Iranian territorial waters and all agreements regarding the issue should be canceled,” Admiral Alireza Tangsiri, commander of the Iranian Navy, was quoted as saying by the IRNA news agency.

奏响军民融合的时代乐章-新华网 More propaganda love for the importance of civil-military fusion 

Hong Kong, Macao

Timeline: Xi Jinping and Guangdong-Hong Kong-Macao Greater Bay Area - Xinhua Promoting the development of the Greater Bay Area is a major decision made by the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at the core. With his broad vision and profound wisdom, President Xi, also general secretary of the CPC Central Committee and chairman of the Central Military Commission, has planned the bay area's development. // Comment: The original Chinese is leading all the news sites this am 着眼发展大局,共享时代荣光——以习近平同志为核心的党中央关心粤港澳大湾区建设纪实 


Cross-Straits Relations in 2019 – Fairbank Center for Chinese Studies, Harvard University – Medium Steven M. Goldstein 戈迪溫, Director of the Taiwan Studies Workshop at the Fairbank Center for Chinese Studies, Harvard University, reports on the Fairbank Center’s latest visit to Taiwan and the mainland in January 2019...What emerges from the New Year’s statements, as well as our discussions, is the sense that both sides have now placed the sovereignty issue at the center of their cross-strait policy. Tsai Ing-wen not only unequivocally rejected the constructed “’92 Consensus” as a solution to the conflict of sovereignties, but she also placed the DPP’s most potent domestic political appeals — commitment to island identity and sovereignty — at the center of her administration’s mainland policy, and as a requirement for cross-strait talks. Similarly, Xi Jinping’s focus on unification as the essence of the mainland’s Taiwan policy not only was a rejection of Hu Jintao’s 胡锦涛 gradualist policy of “peaceful development.” It was the affirmation of a policy that unambiguously established a future goal of mainland assumption of sovereignty over the island even as it rejected the existence of the present government by suggesting negotiations with representative delegations from the island as the way to create a future government for Taiwan...It seems that after three years of uncertainty and probing, both sides have now become locked into starkly conflicting positions on what appears to be a fundamental, but irreconcilable question. This will be the environment in cross-strait relations during a time of uncertain Sino-American relations and the looming Taiwan elections of 2020.

Tech And Media

Beijing launches pilot zone for AI development - Xinhua Beijing has launched a pilot zone to develop new-generation artificial intelligence (AI) technology, the municipal commission of science and technology announced on Wednesday. The zone will focus on exploring an innovative system to develop the AI technology through coordinating efforts of the government, academia and the industry, aiming to develop Beijing into a major producer of AI-related theories, ideas and talent, according to the commission.

NetEase Quashes Talk of Chinese Gaming Approval Suspensions - Bloomberg NetEase Inc. dismissed reports China is holding up gaming approvals as it untangles a huge backlog, saying the company is closing in on the release of Diablo Immortal for the world’s top gaming market. Chief Financial Officer Yang Zhaoxuan told analysts on a conference call that select regulatory agencies are tweaking the process through which developers seek approval to make money off titles, but that didn’t equate to a hold-up. The company is preparing for the launch of Activision Blizzard Inc.’s hotly anticipated hack-and-slash title in China.

No end in sight to split internet say researchers | Financial Times $$ one day, entire countries such as China could decide to support only one version of the IP standard, cutting themselves off from much of the online world, said Milton Mueller, a professor of public policy at Georgia Tech and one of the authors of the report. China, according to the study, along with a number of developing economies, has made almost no move to the new protocol, known as IPv6, short for IP version 6. // The report: Report on IPv6: Get ready for a mixed Internet world

Clickbait queen’s social media accounts closed - Global Times Media accounts of Mimeng, a popular Chinese blogger dubbed as China's Queen of Self-media or clickbait, were removed on multiple social media platforms. announced the shutdown of Mimeng's accounts on the platforms as a result of "taking its responsibilities as the content regulator to crack down on fake information, pessimistic values, cheating for clicks and behavior that purposely splits society."  Jinri Toutiao issued a similar announcement, closing five of her accounts.  Her WeChat account was also revoked on Thursday, 20 days after she announced a two-month suspension of it for misconduct.  Mimeng had 2.6 million Weibo followers and boasted of over 14 million subscribers on her WeChat account in January 2018. According to media reports, she charges advertisers as much as 750,000 yuan ($113,000) for an advertorial.

The Wandering Earth lands on Netflix no date for its availability yet

Energy, Environment, Science And Health

Beijing life expectancy hits 82.2 years - Xinhua The average life expectancy of Beijing residents reached 82.2 years in 2018, higher than the 2017 figure of 82.15 years, according to Beijing municipal health commission on Thursday. The infant mortality rate was 2.01 per 1,000, said the commission, adding that both figures of average life expectancy and infant mortality rate were on par with high-income countries

Why Aren’t People in China Dying of the Flu? - Caixin One possible reason for China’s unusually low flu death numbers is that health officials in the country depend on reports of deaths for their data, rather than the statistical modeling used by authorities elsewhere in the world. The number of deaths provided by Chinese authorities this week is “likely to be reported deaths in patients with influenza, which will massively underestimate influenza deaths, because most patients in hospitals in China are not tested for influenza,” Ben Cowling, a professor at the Hong Kong University School of Public Health, told Caixin. Additionally, not all cases may be reported to the authorities.

Polluters of waterway to face harsher punishments - China Daily China will hand down more severe punishments to those who commit environmental crimes in the Yangtze River Economic Belt, according to a document issued by five central departments on Wednesday specifying offenses and punishment standards. The document was issued by the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, the Ministry of Justice and the Ministry of Ecology and Environment.

Agriculture And Rural Issues

China reports new African swine fever outbreak in Yunnan province | Reuters The outbreak in Lushui city killed two animals on a farm of 300 pigs, the Ministry of Agriculture and Rural Affairs said in a statement on its website.


Beijing tightens food safety control in schools - Xinhua According to Beijing Municipal Education Commission, kindergartens, primary and secondary schools should establish a centralized dining system that also requires the presence of school leaders at every meal amid new efforts to find and solve problems quickly. The regulation said heads of schools and kindergartens are directly responsible for food safety and need to be assisted by a commissioner for food safety management, either full time or part time

Guideline to enhance security on campuses - China Daily Shanghai will establish a 200-meter safe zone around schools, according to a guideline designed to enhance campus security that was released by the municipal government on Wednesday, as students started their first day in the city's public schools. The guideline also covered on-campus security education, food safety, online addiction prevention, on-campus bullying, school bus management and emergency response, among other topics  //  Comment: Securing schools and making the food served in them safe will certainly be welcome by Chinese parents

In a First, Tsinghua University Takes Top Spot in Asia-Pacific School Rankings - Caixi Long-time leader National University of Singapore has lost first place in the Times Higher Education’s latest Asia-Pacific rankings to a Chinese mainland institution — Beijing's prestigious Tsinghua University

Chinese Girl Finds a Way Out of Tedious Homework: Make a Robot Do It - The New York Times Some would say she cheated. Others would say she found an efficient way to finish her tedious assignment and ought to be applauded for her initiative. The debate lit up Chinese social media this week after the Qianjiang Evening News reported that a teenage girl had found a loophole for her homework: She bought a robot that mimicked her handwriting. Instead of having to manually copy phrases or selections from a textbook dozens of times, a repetitive task common in learning Chinese, she could just teach the robot to do it for her.