Trade talks; Huawei's UK lifeline; Terror attack stresses Sino-Indian relationship; Xi on Party and law

Happy Monday! It is the President’s Day holiday here in the US so things are a bit quiet.

Liu He arrives in Washington Tuesday for the next round of trade talks scheduled for the 21-22. From what I hear the US side, perhaps with the exception of President Trump, is not happy with what the negotiators view as very limited concessions from China. While some sort of a framework deal and extension of the talks is likely by March 1 to avoid new and increased tariffs is still likely, I do think the Chinese and the markets may have gotten too confident that it is a done deal.

Trump agreeing to a deal that is mostly cosmetic will open him to significant bipartisan political and media attacks, and as we saw with his reaction to the December budget deal he could quickly change his mind in response to the criticism. Perhaps this week Liu will bring more substantive concessions, but do not be surprised if the Chinese are miscalculating their ability to win over Trump without actually giving much.

Tuesday is the Lantern Festival Holiday 元宵节 in China, marking the 15th day of the Lunar New Year and the end of the holiday for the vast majority of China’s migrant workers. They will start going back to the cities and factory towns, so within a couple of weeks we should have a better view on employment prospects and challenges in 2019.

One of my favorite parts of the Lantern Festival, aside from the crazy fireworks that used to go off in Beijing that night, are the sweet sticky rice dumplings 汤圆. You can never have too many…

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The Essential Eight

1. US-China trade

President Trump receives update on China trade talks | Reuters:

Trump, at his Mar-a-Lago club, was briefed in person by U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross, White House Chief of Staff Mick Mulvaney and trade expert Peter Navarro, said White House spokeswoman Sarah Sanders. Treasury Secretary Steven Mnuchin, economic adviser Larry Kudlow and other aides joined by phone...

Shortly after the meeting with his trade team, Trump said on Twitter the talks in Beijing were “very productive.”

U.S., China Trade Talks: Side-By-Side Comparison of Statements - Bloomberg

China applauds ‘positive’ Donald Trump tweet, hopes for US trade war deal ahead of Washington talks | South China Morning Post:

The opinion piece, which was published by the official Xinhua news agency, the People’s Daily and the Global Times under the pseudonym Niu Tanqin, is seen to be part of Beijing’s efforts to reassure its citizens that the trade war with the United States will soon be over.

It did contrast previous columns on Trump by the same author, who in March last year argued that China dislikes the American president for his "insatiable demands, greediness and lack of trust worthiness".

The original piece - 中方代表团马上就出发,特朗普一大早又发了一条推特 

The pseudonym Niu Tanqin 牛弹琴 clearly drawn from the chengyu 对牛弹琴 "play the lute to a cow" i.e talk over someone's ahead or be speaking to the wrong audience.

People's Daily has launched a new commentary series titled "Grasping the new implications of the important strategic opportunities for the nation's development 把握我国发展重要战略机遇新内涵". The first in the series is this one - Accelerate the optimization and upgrading of the economic structure"..reads like the justification for Made in China 2025, a strategy that makes sense for China and which they will not drop as part of US-China trade negotiations - 加快经济结构优化升级--财经--人民网 

China Must Fix Its Economy to Weather the Trade War, Official Says - Caixin:

China must address its domestic imbalances to strengthen its ability to weather the impact of external risks such as the trade war with the U.S., a senior foreign exchange official has said, pointing to rapidly rising household debt as one of the biggest threats to the country’s economic health.

The trade dispute with the U.S. and rate hikes by the U.S. Federal Reserve are the main foreign risks faced by the Chinese economy, Lu Lei, a deputy head of the State Administration of Foreign Exchange, said at a forum in Beijing. But whether these issues would trigger serious problems in China depends on the soundness of the country’s internal financial system, he said over the weekend. “Without concrete structural reform within the country, any management of external risks can only delay the outbreak of a systemic crisis (rather than defuse it),” Lu said.

2. Xi on Party and the law

Xi's article on Party's leadership over law-based governance to be published - Xinhua:

An article by President Xi Jinping on strengthening the leadership of the Communist Party of China (CPC) over law-based governance will be carried by the fourth issue of Qiushi Journal this year, to be published Saturday.

In the article, Xi, also general secretary of the CPC Central Committee and chairman of the Central Military Commission, stresses that adhering to and developing socialism with Chinese characteristics further needs to rely on the rule of law and to strengthen the Party's leadership over law-based governance as China is currently at the period in which the timeframes of realizing the two centenary goals converge.

The CPC Central Committee has decided to set up the Commission for Law-based Governance to meet the requirements of studying and settling major issues concerning law-based governance, establishing a system of socialist rule of law with Chinese characteristics, and building a country of socialist rule of law, Xi writes.

The Qiushi piece is an excerpt from a speech Xi gave at the 1st meeting of the Commission for Comprehensive Law-based Governance of the CPC Central Committee in August 2018. What else did he say that is not public, and why release this now? - 加强党对全面依法治国的领导 - 求是网



党领导全面依法治国 习近平强调这十六个字--法制网:


When there is a full translation I will share it, this is an important speech, and from my reading it quite disturbing if unsurprising.

3. Police in local Party cells, Fengqiao Experience 2.0?

Police embedded in grass-roots Communist Party cells as security grip tightens on Beijing | South China Morning Post:

Police officers in Beijing are being appointed to top positions in grass-roots Communist Party cells overseeing communities throughout the city as part of sweeping efforts to further tighten control and scrutiny of residents in the capital.

In Tongzhou district alone, 239 police officers had been appointed deputy party chiefs of outlying villages and urban communities, Beijing Daily reported on Sunday.

The authorities began a pilot programme of the policy in 2012 and plan to have it in place citywide this year. By July, every village and residential community in Beijing will have a community police officer doubling as its deputy party chief to “strengthen grass-roots management”, the report said.

A similar programme is under way in Shanghai...

Ji Zongren, a police officer appointed a party chief in Tongzhou, said that in the past, he had often encountered misunderstanding and resistance from residents during his work because some of their concerns did not fall within the scope of his law enforcement capacity, Beijing Daily reported.

“As deputy party secretary, [I] can help the public better understand and support public security work. It also makes it easier for police officers to go deeper into communities to solve their problems,” Ji was quoted as saying...

From Sinocism intern Adam Wu over the weekend:

It looks like Tongzhou district government in Beijing has been experimenting a grassroots management scheme since 2012 that basically appoints cops to be deputy secretary of party committee in the local communities and villages within their jurisdiction. Beijing public security bureau just released a regulation yesterday that says party community of all the city's villages and communities 社区(村)will have cops as deputy party secretary by July this year. And recent reports have dubbed this experiment as a great innovation of the Fengqiao Experience

All these reports are putting a positive spin on these cops' role. Basically, according to the propaganda, these cops' jobs as deputy secretary in the community is to help solve resident's dispute, help solve burglary more efficiently (cops can do that without being the deputy party secretary of the local party community), spot fraud schemers (again you don't need to be deputy party secretary to do this) and strengthen bonds between residents (for example helping a Uyghur vendor mingle with local community), etc. But essentially what this system is doing is to greatly expand cops and the public security system's power to exert control in the civil society. One of these cops even said that (in a positive way) in the report in the first link

通州首批民警兼任村党组织副书记 为基层治理提供组织保障



4. Huawei's British lifeline

UK says Huawei is manageable risk to 5G | Financial Times $$:

The UK National Cyber Security Centre has determined that there are ways to limit the risks from using Huawei in future 5G ultra-fast networks, two people familiar with the conclusion, which has not been made public, told the Financial Times.

The finding comes despite stepped-up US efforts to persuade countries to bar Huawei from their networks on the basis that it could help China conduct espionage or cyber sabotage.

The US National Security Agency has been sharing more information with allies and partners to underscore the risks, but several European countries, including the UK and Germany, have not been convinced that a ban is warranted. ..

The NCSC is also contributing to a government review of UK telecoms infrastructure that is being led by the Department of Digital, Culture, Media & Sport. The DCMS report will probably contain recommendations on how to handle any threats of Chinese espionage posed by Huawei to 5G networks, according to one person briefed on an early draft.

China rejects U.S. position on Huawei - Xinhua:

According to reports, U.S. Vice President Mike Pence warned its allies to take seriously "the threat" posed by Chinese enterprise Huawei as they look for partners to build 5G wireless infrastructure. He made the remarks Saturday during the Munich Security Conference.

Reports also said that some U.S. officials recently argued that under China's National Intelligence Law companies such as Huawei or ZTE could be compelled to hand over data or access to Chinese intelligence.

"These are mistaken and one-sided interpretations of relevant Chinese laws," Foreign Ministry spokesperson Geng Shuang said at a news briefing.

China, US trade barbs over Huawei and South China Sea at Munich conference | South China Morning Post:

The US has been “very clear with our security partners on the threats posed by Huawei and other Chinese telecom companies”, Pence said.

“Chinese law requires them to provide Beijing’s vast security apparatus with access to any data that touches their networks or equipment,” he said, adding America’s allies must protect critical telecoms infrastructure...

Speaking immediately after Pence, Chinese State Councillor Yang Jiechi said China rejected “technological hegemony”.
“We need to follow the new approach of win-win and all-win cooperation and abandon ideological prejudices and the outdated mentality of a zero-sum game, and a winner takes all,” Yang said...

“Chinese law does not require companies to install a back door or collect intelligence,” he said.

Huawei tests Europe’s independence - Global Times:

Although the idea of Huawei engaging in espionage is technically possible, it does not make any sense from a commercial or political point of view.

Such a practice would be tantamount to suicide for a high-tech giant. If the Chinese government forced Huawei to do this, it would be stifling the country's emerging industries. But intelligence cannot be mentioned in the same breath as Huawei's contribution to China's industrial prosperity and national interests.

Hyping the alleged Huawei threat has violated the basic spirit of seeking truth from facts. The West is prioritizing ideology and considering excluding China as political correctness. Many people in Europe are aware of the lies, but still beating the drum for a certain value orientation rather than conducting an objective analysis.

Western fears of party influence on Chinese companies are overblown | Financial Times OpEd by Gu Bin $$:

My experience as a party member for about 10 years might help to throw some light on the subject. I studied in the US and then worked for an intergovernmental organisation in Geneva. During those years it never occurred to me that the party might ask me to do something on its behalf. I received precisely one request that mentioned my party membership, and that came from a Harvard law professor who invited me to talk to his class about China.-The writer is an associate professor at Beijing Foreign Studies University and author of ‘The Law and Governance of the Asian Infrastructure Investment Bank’

5. Kashmir terror attack stressing India-China relations

Kashmir terror attack revives old India-China tensions | Financial Times $$

As they absorb the shock of the blow, Indians are expressing anger towards another culprit: China, which has repeatedly thwarted Indian efforts to have the UN Security Council officially designate Mr Azhar a terrorist.

New Delhi’s attempt to do this began in early 2016, after an Indian army base was attacked by militants allegedly linked to JeM, which was designated a terror group back in 2002. Most Security Council members supported India’s petition to similarly sanction the group’s leader. But Beijing, which has strong strategic ties with Islamabad, vetoed the proposal and has blocked the measure since, repeatedly overriding India’s efforts.

Now, in the wake of the Kashmir attack, this once-obscure diplomatic skirmish has returned to the public eye. Indian analysts, policymakers and journalists are calling out Beijing for protecting a man they blame for a string of lethal attacks. On social media, sentiment is venomous.

Beijing's calculus on Masood Azhar goes through the China-Pakistan corridor - The Print:

The crux of the matter is this: Beijing believes that its best bet in protecting its assets in Pakistan is the help from the Pakistani military and intelligence agencies. It believes that as far as China’s terror priorities are concerned, such as East Turkestan Islamic Movement terrorists in Pakistan, the Pakistan military has taken action. So, they are more than prepared to turn a blind eye to the Pakistani state’s tolerance and support of anti-India groups, as long as their interests are taken care of.

Opinion | China’s master plan: A weak Indian regime to emerge from elections | columns | Hindustan Times:

China’s culpability in the Pulwama massacre of Indian jawans is unmistakable. In keeping with its master plan, Beijing brazenly shields Pakistan’s export of terrorism, including blocking UN action against Pakistan-based terrorists like Masood Azhar. Indeed, China has long used militants to attack India’s weak points, including by originally training Naga and Mizo guerrillas and currently consorting with several northeast Indian insurgent leaders, some of them ensconced in Yunnan or Myanmar.

If India is to safeguard its interests and expand its global footprint, its next government would need a more clear-headed and self-assured foreign policy, particularly for addressing the insidious China challenge. - Brahma Chellaney

Pulwama attack: In Indian-controlled Kashmir, attack puts focus on ‘homegrown’ militants - The Washington Post:

The attack, which killed 40 paramilitary officers, has escalated the potential for conflict between nuclear-armed India and Pakistan. The Pakistan-based militant group Jaish-e-Muhammad claimed responsibility for the attack. But Dar, the suicide bomber recruited by the group, was a teenager who came from a village just six miles away from where it was carried out. Jaish-e-Muhammad was designated a terrorist organization by the United States nearly two decades ago.

In India, with national elections only months away, there is intense pressure on Prime Minister Narendra Modi to respond to the attack. The public mood is a mix of sorrow and anger that has curdled into something uglier in some places. Kashmiris living in other parts of India reportedly were threatened in the wake of the attack.

6. Australia - China

China key suspect in pre-election hack against major parties - Sydney Morning Herald:

Sources say the sophistication of malicious software - or malware - that was used is restricted to a handful of countries worldwide, most of whom are friendly towards Australia, leaving China and Russia as possible culprits.

"This tradecraft is good. This actor is good," a senior intelligence source said. "It’s been a long time since we’ve been focused on an actor who has this level of sophistication."

China Denies Hacking Australian Political Parties - Caixin:

China denied hacking the computer networks of Australia’s Parliament House, Ministry of Foreign Affairs spokesperson Geng Shuang said during a briefing on Monday.

Geng called media reports that China may be behind a recent hack of the nation's parliament and major political parties “irresponsible,” adding that, without sufficient evidence, they could exacerbate tensions in online spaces and create a "toxic" atmosphere.

Chinese newspapers dedicate front pages to exiled billionaire Huang Xiangmo - Sydney Morning Herald:

Two Australian Chinese-language papers have dedicated their front pages to an open letter backing billionaire Huang Xiangmo, whose permanent residency was cancelled for reasons including character grounds in early February.

The letter, which appeared on the front pages of the Sing Tao Daily and Australian Chinese Daily and inside a third, the Daily Chinese Herald on Saturday, includes more than 120 community groups protesting the decision to effectively bar Mr Huang from Australia.

Project Dragon and China's attempts to reclaim money from inside Australia - ABC News (Australian Broadcasting Corporation):

Four Corners has spoken to several former law enforcement operatives who have been engaged through a third-party company in Hong Kong as part of an operation code-named "Project Dragon".

Their mission is to recover proceeds of crime from China that have been transferred out of the country, or legitimate funds that have allegedly been illegally siphoned out to places such as Canada, the United States and Australia.

Four Corners has also seen correspondence showing that under the arrangements, any illicit funds or assets recovered overseas are to be returned to China and the foreign investigators or operatives paid a commission...

On the Gold Coast, two former police officers have been engaged by a company based in Hong Kong to recover properties, sell them and return the proceeds to China as part of Project Dragon...

They say they've identified $80 million worth of property on the Gold Coast that they suspect has been bought with laundered cash by Chinese nationals.

Comment: Safe to assume this is happening in other countries as well?

7. Alibaba built the Study Xi app

Does Comrade Ma use it? Seriously, as I wrote last Thursday if Alibaba is powering the whole thing then expect its involvement to be used as another reason for foreign governments to be suspicious of the company.

Alibaba is the force behind hit Chinese Communist Party app: sources | Reuters:

A Chinese government propaganda app that recently became a huge hit was developed by Alibaba, two people at the company told Reuters, at a time when the nation’s tech firms are under global scrutiny over their ties to Beijing.

“Xuexi Qiangguo”, which literally translates as ‘Study to make China strong’ and is a play on the government propaganda theme of applying President Xi Jinping’s thoughts, overtook Tik Tok and WeChat to become the county’s most popular app on Apple’s China app store last week.

It was developed by a largely unknown special projects team at Alibaba known as the “Y Projects Business Unit”, which takes on development projects outside the company, said the people.

What's on Weibo downloaded and dissected it you so you don't have to-Gamifying Propaganda: Everything You Need to Know about China's 'Study Xi' App | What's on Weibo:

So what is the ‘Study Xi, Strengthen China’ app? It basically is a multi-functional educational platform that offers users various ways to study Xi Jinping Thought, Party history, Chinese culture, history, and much more. Once people are registered on the app, they can also access the platform via PC.

An important part of the app is its news feed: its home page features “recommended” reads that all focus on Xi Jinping and the Party. Another major feature is its ‘quiz’ page: every week, there are different quizzes that users can do, relating to all sorts of things, from Party ideology to famous Chinese poems..

It is much more than a media app alone; it also has a social function, that allows users to connect with friends, message them, call them, and even send them ‘red envelopes’ (money presents).

Senior CPC official stresses integrated development of media - Xinhua:

The integrated development of media should be a priority of the country's publicity front, said Huang Kunming, a member of the Political Bureau of the CPC Central Committee and head of the Publicity Department of the CPC Central Committee, during an inspection tour to central China's Hubei Province from Thursday to Saturday.

Efforts should be made to supply quality content, apply the latest information technologies and develop a nationwide communication matrix of integrated media, Huang said.

He also instructed local authorities to introduce high quality programs to help Party members and ordinary people learn Party theories.

8. Taiwan

Will China Seize Taiwan? - Foreign Affairs - Peter Gries and Tao Wang:

Despite this increased militancy across the Strait, Taipei has convinced itself that China will not attack. Many in the ruling Democratic Progressive Party have persuaded themselves that China is too sensible to take military action....

Taiwan’s major opposition party, the Kuomintang, takes a rosy view of Beijing that rejects the idea that China might invade...

This complacency has led Taiwan to neglect its armed forces. Taiwan’s military suffers from a desperate shortage of officers—nearly half of all lieutenant positions are unfilled. In 2018, Taiwan made matters worse. Just as talk of “forceful reunification” was rising in Mainland China, the government ended compulsory military enlistment—but allowed felons to serve. Morale has plummeted. The United States has recommended that Taiwan consider restoring conscription. “The shift to a voluntary military was a mistake,” U.S. officials concluded. In an April 2018 poll, more than 40 percent of Taiwanese said they had “no confidence at all” that their military could defend Taiwan; but 65 percent had convinced themselves that the PRC would not take military action against the island; and only six percent believed that an attack was “very likely.” ..

The withering of Taiwan’s armed forces has increased Taiwan’s military reliance on the United States—just when many in Beijing are questioning the U.S. commitment to Taiwan. Trump’s “America first” doctrine has convinced many Chinese that the United States is now too isolationist to come to Taiwan’s defense.

With each generation, the people of Taiwan feel more Taiwanese — and less Chinese - Los Angeles Times:

Public opinion polls conducted since 1992 by National Chengchi University show a steady increase, from 17.6% to 54.5%, of Taiwanese people who identify as only Taiwanese. Those who say they are “both Taiwanese and Chinese” have hovered around 40%. Those who identify as only Chinese have dropped from 25% to less than 4%.

The result is a widening gap between Taiwanese of different generations, who often hold opposite visions of what it means to be Taiwanese — even among members of one family.

China pressing Canadian companies to call Taiwan part of China, state documents show | The Star:

First it was Air Canada, then Royal Bank. Both companies started labelling the island nation of Taiwan as part of China last May.

And China is now pressuring even more Canadian multinationals to do the same, according to passages of the Blue Book on the Cyber Rule of Law (2018) obtained by The Star.

Business, Economy, Finance And Trade

Caixin View: China’s Credit Is Bottoming Out, But Surge Won’t Last China’s total social financing (TSF), a broad measure of credit and liquidity in the economy, grew by a net 4.64 trillion yuan ($684.93 billion) in January, the highest level according to available data going back to January 2002 and beating market expectations, according to data released last Friday by the central bank. TSF includes financing that exists outside the conventional banking system, such as initial public offerings, loans from trust companies and bond sales. The benchmark Shanghai Composite Index closed Monday up 2.68%, with the Shenzhen Component Index rising by 3.95%, likely in part due to a positive effect on sentiment, combined with a fairly positive end to recent U.S.-China trade talks. But we don’t think the new data give a strong signal that China’s credit growth is on its way up for the long term.

Vice premier urges bolder, more effective measures implementing proactive fiscal policy - Xinhua At the meeting, Han studied major issues, including the launch of another round of tax cuts and fighting the "three critical battles" against risks, poverty and pollution. The MOF should stick to the basic tone of seeking progress while maintaining stability, promote high-quality development and take coordinated steps to ensure steady growth, advance reform, make structural adjustments, improve living standards and guard against risks, Han stressed. He said that larger tax cuts will be helpful in improving the country's income distribution system and the tax structure and better serve China's current macro policy. The MOF should relieve the social insurance payment burden of firms, strengthen the management of the fiscal revenue and expenditure and create a sound policy environment for fair competition, Han said.// Comment: If they really crack down then a lot of the tax cuts will be offset by forcing people and firms into compliance

Chinese vice premier stresses importance of taxation - Xinhua During an inspection of the State Taxation Administration, Han called the taxation authority "an important junction of implementing macroeconomic policies and serving microeconomic operations." This year, the administration should effectively implement the government's policies to cut taxes and fees to strengthen the people's sense of fulfillment, he said...The vice premier also underlined efforts to improve law enforcement, the supervision system and tax inspection to crack down on tax evasion and fraud and to optimize the taxation and business environment.  

Didi is axing jobs and could retreat from food delivery and bike sharing - CNN China's biggest ride-hailing firm is axing 15% of its staff and scaling back non-core businesses as it tries to get back on track following the murders of two passengers last year. Executives at Didi Chuxing told staff members in Beijing on Friday that it plans to lay off about 2,000 employees and focus on its "core mobility business," according to a person familiar with the company's plans.

China's sees brisk growth in infrastructure investment in Q4 2018 - Xinhua Such growth came after the issuance of a guideline by the State Council last October on boosting the investment in nine kinds of infrastructure facilities including railways, highways and waterways, airports, water conservancy, energy and environmental protection as well as infrastructure conducive to agriculture and rural development. Many provinces have unveiled infrastructure construction plans for this year, with Henan and Sichuan's planned investment exceeding 3 trillion yuan (443 billion U.S. dollars), according to the paper.

HNA to Weigh $1 Billion Sale of Swiss Firm SR Technics, Sources Say - Caixin HNA Group Co. Ltd., the embattled Chinese conglomerate, is exploring options for Swiss aircraft-maintenance firm SR Technics including a potential sale, people familiar with the matter said.

Securities Regulator Defends Plan to Scrap First-Day Trading Cap Speaking at an economics forum in Beijing, China Securities Regulatory Commission (CSRC) Vice Chairman Fang Xinghai responded to controversy over his proposal last month to remove controls on how high the price of a stock can rise on the day of its initial public offering (IPO). Fang said then that the restriction, which prevents a stock rising more than 44% on its debut, can create “illusionary and unreasonable” prices on thin trading volumes.

State Firm Overseer Says Mixed-Ownership Can Help Fix the Economy - Caixin Both China’s state-owned enterprises (SOEs) and the private sector are facing the same economic challenges and should work together to push supply-side reforms that increase consumer demand, Xiao Yaqing, director of the State-owned Asset Supervision and Administration Commission (SASAC), said in a keynote address at the private-sector dominated Yabuli China Entrepreneurs Forum on Friday

China’s Car Sales Fall Further - Caixin The number of vehicles manufactured and sold in China in January saw a two-digit year-on-year decline, according to an official summary Caixin acquired from industry observer the China Association of Automobile Manufacturers (CAAM)...A slowing Chinese economy was the major reason for the decline, some analysts said. Also, potential consumers could be postponing their purchase plans due to the national Chinese Lunar New Year holiday.

Sports Deal Gone Sour Touches a $3.3 Trillion Market in China - Bloomberg China Merchants Bank Co. in 2016 used proceeds from a 2.8 billion yuan ($414 million) wealth-management product to invest in London-based MP & Silva, the company that was dissolved by the U.K. High Court in October, as part of a Chinese consortium...The China Merchants Bank WMP was raised in 2016 with proceeds from other WMPs for the sole purpose of funding the consortium investing in MP & Silva. It was labeled a “specialized” WMP, a designation used for instruments bought by a small number of institutions. The group, led by Everbright Securities Co., paid $1 billion in May of that year for a 65 percent in stake in the company

China Property ‘Stealth Easing’ Spreads in Boost to Home Prices - Bloomberg At least 11 Chinese cities have eased restrictions on residency-permits this year, potentially giving their ailing property markets a boost. The moves are seen as part of a “stealth easing” of property curbs that have helped keep a lid on housing prices. New-home prices rose at the slowest pace in eight months in December, the most recent data show.

Legal bump in the belt and road? A Mideast port giant, a Chinese rival and a Hong Kong lawsuit over a Djibouti deal | South China Morning Post DP World, a global port operator owned by the United Arab Emirates, is suing Hong Kong-based China Merchants Port Holdings (CM Port), a unit of state-owned China Merchants Group, for allegedly infringing DP World’s exclusive port agreement with Djibouti, which sits on the Horn of Africa near some of the world’s busiest shipping lanes.

Politics, Law And Ideology

China tries to stop academics from taking its constitution literally - Rights and wrongs - The Economist Now the party is focusing more closely on campuses, where many legal scholars still support constitutionalism. The party is right: the word for this, xianzheng, is often just a veiled way of referring to Western-style democracy, or at any rate just the nice bits of the constitution. In January the Ministry of Education ordered every university to report to the authorities which textbooks they were using for constitutional studies. It said reasons for this “thorough investigation” included a need to “implement Xi Jinping Thought on socialism with Chinese characteristics for a new era” and “revise and improve textbooks in a timely manner”.

How corrupt officials scarred political ecology in China's Shaanxi - CGTN Zhao Zhengyong was a senior member of the Communist Party of China (CPC), representing the Party in northwest China's Shaanxi Province as the chief of the provincial CPC committee – until he fell from grace. He was the latest in a string of high-ranking officials who were caught in an entangled web of corruption despite their seemingly squeaky clean public image. On January 15, the country's top anti-graft body announced that the former provincial Party chief is under investigation for suspicions of having severely violated the CPC's disciplinary rules. Experts say that Zhao and his likes are typical examples of duplicitous officials – saying one thing but doing the complete opposite.

New media facilitates crackdown on corruption in China - Xinhua Commentary in a newspaper administrated by the Communist Party of China Central Commission for Discipline Inspection and the National Supervisory Commission said Monday netizens can find the latest information released by the top anti-graft watchdog on its website and post suggestions there. People can report corrupt practices and other violations of disciplines and laws online, such as posting on the micro-blogging site Weibo, sending a message to anti-graft authorities' accounts on the instant messaging tool WeChat or reporting through an app run by the top anti-graft authority. // The original - 全媒体助力正风反腐

20-Year Tobacco Monopoly Veteran Faces Graft Investigation - Caixin Over the weekend, China’s corruption watchdog announced that Zhao Hongshun, deputy chief of China’s State Tobacco Monopoly Administration, is under investigation for “serious violations of the law” — a euphemism for corruption. Zhao is the most senior tobacco industry official to be investigated since the onset of President Xi Jinping’s anti-corruption campaign in 2012.

Li Rui, a Mao Confidant Who Turned Party Critic, Dies at 101 - The New York Times Blunt, brash and quick-witted, Mr. Li’s experience epitomized the hopes and disappointments of a generation. His perseverance and longevity made him one of the most influential government critics in the seven-decade history of the People’s Republic of China. His work also helped reshape historians’ understanding of key moments in modern Chinese history — especially Mao’s responsibility for the catastrophic Great Leap Forward, in which famine killed more than 35 million people — while his political connections allowed him to protect moderate critics and make open appeals for free speech and constitutional government.

Daughter of Mao Zedong’s personal secretary boycotts funeral | The Guardian The daughter of Mao Zedong’s personal secretary is boycotting her father’s funeral, which she says is taking place against his wishes in a cemetery reserved for high-ranking revolutionary figures. According to Nanyang Li, her father Li Rui will be interred in the Babaoshan cemetery on Wednesday in an official ceremony at which the Chinese flag will be draped over his casket.

Li Rui’s controversial life reflects diversity of opinion in Chinese society - Global Times Li's life was a bumpy ride. He experienced almost all historic events such as the Yan'an Rectification campaign, and himself became the subject of several political movements. Li was imprisoned once in Yan'an before the founding of the People's Republic of China. In the 20 years after 1959, he was either held in confinement or in labor camps. The experiences were even quite unfortunate in that historical context. Li's career peaked when he was appointed as the deputy head of the Organization Department of the CPC Central Committee after the reform and opening-up. His title as the secretary of Chairman Mao Zedong remains controversial. In general, his positions had not offered him opportunities to exercise an enormous impact on China. His influence was limited until he retired. It was after his retirement that Li's influence reached the pinnacle. Since the end of the 1980s, he had made his voice heard constantly and had been labeled the "CPC veteran cadre + CPC critic."

Foreign and Military Affairs

Russia to China: Together we can rule the world – POLITICO As Sergey Karaganov, a former adviser to Putin, explained to me at breakfast, now everything must be about China.I met Karaganov again at a meeting with Chinese officials and think tankers in Beijing a few weeks ago. There, a number of Chinese participants said they doubted Russia’s assertions that the world is in the midst of a new Cold War. Karaganov dedicated himself to convincing them otherwise, arguing with increasing passion that China is deluding itself if it thinks issues between Beijing and Washington can be conveniently resolved to the benefit of both sides. If Beijing places its bets on peace and cooperation, the great Chinese adventure will come to an end, and China will have to live in the shadow of the U.S. for another generation — perhaps forever, Karaganov said. Chinese authorities, he argued, have no more than five years to make a decision.

Why does UK repeatedly make troubles in South China Sea? - China Military Regardless of how the UK will leave the EU, it is indisputable that the economic strength and international status of the UK is doomed to decline further after Brexit. The UK now acts as a tool of the United States to contain China and just win a bubble reputation of “global military presence”. It may just as well face the reality and apply its precious funds to the development of domestic economy and improvement of people’s lives. Disclaimer: The author is Wu Zhenglong, former Chinese ambassador to Croatia. The article was published on Beijing Daily on February 17, 2019

浴火古田,人民军队重整行装再出发(强军思想引领新征程)--军事--人民网 “维护核心、看齐追随,是最大的忠诚。”采访中,曾参加古田全军政治工作会议的许多领导干部都有这样的感悟。4年多来,全军官兵强化“四个意识”、坚定“三个维护”,用实际行动交出了一份份忠诚答卷。纪念抗战胜利70周年阅兵,受阅官兵阵容严整、步调一致;抗洪救灾、抢险救援,子弟兵一次次上演“最美逆行”;海上维权、国际维和,任务部队枕戈待旦、闻令而动;全面停止有偿服务,各单位令行禁止、扎实推进……

China rebuffs Germany's call for U.S. missile deal with Russia | Reuters China rejected on Saturday German Chancellor Angela Merkel’s appeal to join a Cold War-era arms control treaty that the United States accuses Russia of breaching, saying it would place unfair limits on the Chinese military... China’s top diplomat Yang Jiechi, who spoke on a panel in Munich, said that Chinese missiles were defensive. “China develops its capabilities strictly according to its defensive needs and doesn’t pose a threat to anybody else. So we are opposed to the multilateralization of the INF,” he said.

China considers criminal charges, including jail time, for military rumour-mongers | South China Morning Post The forces newspaper PLA Daily said on Friday that the proposed changes to the criminal law would be considered in March at the annual session of the National People’s Congress, China’s legislature. Jiang Yong, political commissar of the Beijing Garrison and a People’s Liberation Army representative on the NPC, led the proposal at last year’s congress to beef up the legislation targeting rumour-mongers, especially those who spread malicious lies about the PLA on the internet.

Haley Tried to Block Appointment of Chinese Diplomat to Key U.N. Post. He Got the Job Anyway. – Foreign Policy In one of her final acts as U.S. ambassador to the United Nations, Nikki Haley tried but failed to prevent a veteran Chinese diplomat from landing an influential post as the U.N. special envoy to Africa’s Great Lakes region... Her failure underscored the limits of U.S. power to dictate critical staffing jobs at the United Nations. To some critics, it also showcased a hypocrisy in the Trump administration’s approach to multilateral institutions: withdrawing funding and engagement from them while trying to stymie China’s influence. The back-channel discussions between Haley’s office and the U.N. secretary-general’s office were described to Foreign Policy by three U.S. and U.N. officials familiar with the internal deliberations.

New Zealand Frets Over China Amid Fears of Huawei Backlash - Bloomberg While Prime Minister Jacinda Ardern denies any friction, the opposition is calling on her government to shore up the relationship to avoid potentially dire economic consequences. “Our relationship with China is worth over NZ$27 billion in two-way trade,” opposition National Party foreign affairs spokesman Todd McClay wrote in a New Zealand Herald column on Sunday. “The prospect of a deteriorating relationship with China is a major risk. It hampers certainty in the economy and creates uncertainty for our exporters and tourism operators.”

Border war with Vietnam a lingering wound for China’s forgotten soldiers | South China Morning Post While both sides later claimed victory, historians generally agree that China’s mission was unsuccessful because of the huge death toll and the fact it failed to stop Hanoi’s activities in Cambodia. As a result, Beijing has been mostly silent about the war over the past four decades and according to Zhong, who lives in the southern city of Guangzhou, does not want those who fought in it to commemorate its 40th anniversary, which falls on Sunday. “The government is tapping my phone and watching my every move,” he said in an interview. “So I won’t take part in any public events for the anniversary because I don’t want to cause trouble.”

Canada's educational exposure to China | FT Alphaville There were 140,530 Chinese students in Canada in 2017, which is more than a quarter of the total international student body in the country. The growth rate is like a statistical indicator of China’s rising geopolitical clout. At the University of Toronto, the total has gone from just 523 in 2003 to 10,463 last year – an increase of 1,900 per cent.

PLA welcomes launches of private rockets - China Daily The People's Liberation Army has opened one of its space launch facilities to private rocket companies in China, a major step in its efforts to implement President Xi Jinping's civil-military integration strategy. The Jiuquan Satellite Launch Center, China's primary launch facility in the northwestern Gobi Desert, has hosted the launches of three privately built rockets since early September, when it first opened its doors to private enterprises. Officials at the center say it plans to support more private rocket missions.

Saudi Crown Prince Pivots to Asia from Critical West - WSJ $$ Saudi Arabia’s crown prince is embarking on what is expected to be a three-country sweep through Asia to nurture alliances there as the murder of a Saudi dissident and the Saudi-led war in Yemen continue to disrupt the kingdom’s relations with the U.S. and European powers. Angered by Western criticism, Prince Mohammed bin Salman has told aides that he would seek diplomatic support from Asian powers including China and India, according to senior Saudi government advisers.

Independent Students Slam China-Backed Intimidation on Overseas Campuses - RFA The Independent Federation of Chinese Students and Scholars in USA (IFCSS) said it was "deeply concerned" about reports that have emerged from universities in the United States, Canada, France, Ireland, and the Netherlands of the coordinated targeting of activists campaigning against China's treatment of ethnic minorities. It said that "apparently organized pro-CCP (Chinese Communist Party) students harassed, abused and threatened Uyghur and Tibetan students, concerned scholars and activists," in incidents at McMaster University and the University of Toronto in Canada, and Duke University in the U.S

Chinese military institute puts focus on ‘urgent needs’ of frontline troops | South China Morning Post A top Chinese military research institute is stepping up efforts “on the ground” in answer to the leadership’s call to boost combat readiness, according to state media. The Systems Engineering Institute (SEI) under the Academy of Military Science (AMS) is directing more researchers into studies to determine the “urgent needs” of frontline troops, PLA Daily  reported on Monday. The military newspaper said researchers would strengthen cooperation with “civilian bodies”, especially in areas such as telecommunications and logistics support.

Hong Kong, Macao

HKSAR gov't vows to fully seize opportunities in developing Greater Bay Area - Xinhua | A HKSAR government spokesperson described the plan as "a major development strategy in the country's reform and opening up in the new era." The full implementation of the policies of "one country, two systems," "the people of Hong Kong governing Hong Kong," and a high degree of autonomy for the region, as well as acting in strict compliance with the country's Constitution and the HKSAR Basic Law, are the guiding ideology for the Greater Bay Area's development, the spokesperson stressed in the statement. The spokesperson said that the development of the Greater Bay Area will bring Hong Kong opportunities in two aspects, namely helping Hong Kong find new drivers for economic growth and advance the diversified development of local economy and industries, as well as expand the living and development space of Hong Kong residents.

The plan 中共中央 国务院印发《粤港澳大湾区发展规划纲要》 

From the english announcement China unveils development plan for Guangdong-Hong Kong-Macao Greater Bay AreaThe plan was released by the Central Committee of the Communist Party of China and the State Council. It has 11 chapters, namely the background of the plan, the overall requirements, the spatial layout, developing an international innovation and technology hub, expediting infrastructural connectivity, building a globally competitive modern industrial system, taking forward ecological conservation, developing a quality living circle for living, working and traveling, strengthening cooperation and jointly participating in the Belt and Road Initiative, jointly developing Guangdong-Hong Kong-Macao cooperation platforms, and the implementation of the plan.

China’s State Council reveals details of ‘Greater Bay Area’ plan to turn Hong Kong and 10 neighbouring cities into economic hub | South China Morning Post The blueprint identified five “strategic orientations” that include closer integration between the mainland, Hong Kong and Macau while upholding the governing principle of “one country, two systems”. It sets out a timetable such that by 2022, the framework for an international first-class bay area and world-class city cluster should essentially be formed, while regional development should become more coordinated by that date. The next milestone will be 2035. By then, the markets within the bay area should basically be highly connected, with effective and efficient flows of various resources and factors of production.

Tech And Media

TikTok in India: Where uncute content is ready to ring the till | FactorDaily Kakkar and Padiya may not realise that the “kinder” and “accepting” qualities they see on TikTok are but markers of a subtle change in the consumption of social media platforms in India. If a few years ago Instagram was the go-to platform for India 1 – as the top 100 million Indians by wealth are often called – TikTok has muscled into the sweepstakes with a formidable following in India 2 and India 3, the next 100 million and 1.13 billion Indians respectively. The India 1, 2, and 3 framework is often used by analysts while looking at purchasing power of Indians and how businesses sell to them.

Epic Examining One-Child Rule Sweeps Best Actor, Actress at Berlinale China has swept the best actress and actor awards at the Berlin International Film Festival in its first award-winning showing in three years. Stars of the family epic “So Long, My Son” — Wang Jingchun and Yong Mei — won the Silver Bears for best actor and actress for their roles as a husband and wife dealing with the fallout from China’s one-child rule.  //  Comment: Any chance Zhang Yimou movie was pulled to help Wang Xiaoshuai's?

How Huawei Targets Apple Trade Secrets — The Information $$ As U.S. companies grow more concerned about efforts by Chinese firms to obtain their intellectual property, all eyes are on Huawei Technologies, which the U.S. government recently accused of stealing trade secrets. New reporting by The Information sheds light on Huawei’s tactics, which often have been aimed at one of the company’s chief competitors, Apple...

Shenzhen Facial Recognition Firm Remains Silent After Major Data Leak Revealed - Caixin SenseNets was founded in 2015 by video surveillance giant NetPosa Technologies Ltd. and artificial intelligence start-up SenseTime Group Ltd. NetPosa was China’s No.1 and the world’s No.3 video surveillance system maker in 2016, according to an HIS Market report. As of the end of 2017, NetPosa claimed it had provided nearly 1.6 million surveillance systems to Chinese cities as part of the nation’s campaign to beef up public security.

Society, Art, Sports, Culture And History

Making China Modern: From the Great Qing to Xi Jinping: Klaus Mühlhahn  Moving beyond the standard framework of Cold War competition and national resurgence, Klaus Mühlhahn situates twenty-first-century China in the nation’s long history of creative adaptation. //  Just bought this book on the recommendation of a friend, have any of you read it? would love to hear your thoughts.

Energy, Environment, Science And Health

Five more lunar locations get Chinese names - People's Daily Online The landing site of the Chang'e 4 probe is named Statio Tianhe, and three annular pits around the landing site are called Zhinyu, Hegu and Tianjin. The central peak in the Von Karman Crater is referred to as Mons Tai. The five places are clearly shown on high-resolution images based on data from the Chang'e 2 and Chang'e 4 missions.

Food And Travel

Chinese frozen food firm recalls products suspected of African swine fever contamination | Reuters Sanquan, one of China’s top dumpling brands, said in a statement to the Shenzhen Stock Exchange that it has recalled all products suspected of contamination, specifically citing reports of contamination in three batches of pork dumplings. The company said it is cooperating with local authorities on an investigation into the reports.