Trade talks in Beijing; CCDI Plenum; Sinicizing Islam; Grassroots officials; BRI

The US delegation arrived in Beijing Sunday and I think there is some reason for optimism about the US-China trade talks. My understanding is that in December the Chinese side did not really offer anything new or significant, but was told to expect that would change with the convening of the Central Economic Work Conference and the December Politburo meeting.

Liu He dropped in on the first day of the meetings, as you can see from these photos that were going around WeChat:

The Chinese do need to make a deal, both because the trade conflict is exacerbating underlying problems in their economy and also because I hear Xi is quite concerned about the possibility of US decoupling from China, especially in technology.

However, the Chinese side can not accede to all US demands without making structural changes that could pose an existential challenge to the Party’s view of how the economic system needs to be structured, so whether or not there is ultimately a deal will come down to how much is enough from the Chinese side to get the President Trump to say “we have a deal”.

My guess is that the Chinese offer will fall far short of what USTR head Lighthizer wants but that through a mixture of unofficial lobbying, flattery, and headline concessions it will ultimately prove enough for Trump.

But as this newsletter has written ad nauseam, at least for me, the trade dispute is just one component of a much broader shift in the US-China relationship towards friction and contention. A possible trade deal by the March 1 deadline will do nothing to change the broader geopolitical dynamic, the intensifying technology competition or the increasing focus in the US on PRC influence/interference.

For those who want to see me in person I will be on CNBC today at 1PM EST to discuss the US-China talks, think the segment is near the start and will be 5 minutes or so.

Thanks for reading, and I would love to hear your thoughts in the comments.

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The Essential Eight

1. US-China

Trade Tensions Take a Toll on China’s Economy - WSJ $$:

Behind the scenes, officials in the gated Zhongnanhai leadership compound are coming to a stark conclusion, according to people involved in the discussions: The trade dispute is short-circuiting growth.

The Trump administration’s trade offensive, say the people and business executives, is hitting China’s export-oriented manufacturing sector especially hard, reducing new orders for business and forcing factories to cut production and delay decisions on investing and hiring.

U.S.-China trade: Optimism ahead of new talks in Beijing - The Washington Post:

Chinese stock markets rose sharply Monday, partly on hopes for progress on a trade deal. In a sign that the working-level meeting appeared to be off to a good start, China’s economic czar, Vice Premier Liu He, dropped by the talks to spur on the negotiators.

“These talks will have a positive outcome because both sides are trying to deal with the issue in an active and practical manner,” said Wei Jianguo, a former vice commerce minister. “I’m not saying there could be positive results; I think there definitely will be.”

Editorial: How Should U.S.-China Relations Proceed? - Caixin - Hu Shuli editorial:

“Hawks" on both sides clearly agree on one thing: They believe there are essential differences between the basic political and social systems of China and the U.S., and that there will be a showdown in the future. If we cling to this kind of thinking, there will be no solution to the problems facing current trade negotiators and the long-term development of U.S.-China relations. These suspicions can become self-fulfilling prophecies.

Politicians and citizens of the two countries must ask how they can overcome this suspicion. The answer will determine the future direction of U.S.-China relations. For China, this shouldn’t be about figuring out what Americans want to hear and believe, but about figuring out what China wants, what China is willing to do, and what China can do in terms of U.S.-China relations and broader international cooperation. We believe that comprehensively deepening reform and opening-up is still the best way to serve bilateral interests and expectations. This process will give the Chinese people a clearer and more-thorough understanding of what should and can be changed, and what should not and cannot be changed.


Sinocism - Interview with James Mann on engagement and US-China relations 

U.S. Pushes China to Follow Through on Trade Promises - WSJ $$:

During the negotiations, scheduled to last two days, trade officials from Washington and Beijing are looking to hammer out details on a number of broad pledges recently made by the Chinese leadership: more Chinese purchases of U.S. goods and services; increased American access to China’s markets; better protection of U.S. intellectual property and reductions in Beijing’s subsidies to Chinese companies.

For each category, according to individuals with knowledge of the discussions, U.S. negotiators, led by Deputy U.S. Trade Representative Jeffrey Gerrish, are pressing their Chinese counterparts, headed by Vice Commerce Minister Wang Shouwen, to come up ways to ensure that Beijing will make good on its promises.

China Can't Meet `Draconian' U.S. Demands, Says Ex-Goldman Exec Fred Hu - Bloomberg:

While China has made taken some steps, it cannot and should not meet “aggressive and draconian” demands from some of the more hawkish Trump advisers such as dismantling the entire Chinese model of state-led capitalism, according to Hu. He added that instances of forced technology transfer were “very rare” in his multi-decade experience in advising overseas companies operating in the Asian country.

The Chinese style of state-led development has proved effective in reducing poverty and building public infrastructure, said Hu. “China has proven it can build infrastructure very quickly and there are merits to this model,” he said. Meanwhile “the U.S. government can be shut down over a wall.”

U.S. Ship Sails Near Disputed South China Sea Islands in Challenge to Beijing - WSJ $$:

The USS McCampbell conducted what the military calls a freedom of navigation operation in the Paracel Islands chain, sailing within 12 nautical miles of three islands: Tree, Lincoln and Woody, according to a Navy official...

China sent a vessel to warn off the American ship and has lodged a complaint with the U.S., Chinese Foreign Ministry spokesman Lu Kang said Monday at a regular press briefing in Beijing. 

Donald Trump set to hold talks with China’s Vice-President Wang Qishan in Davos | South China Morning Post

The talks, on the sidelines of the Davos forum in Switzerland, which runs from January 22 to 25, would be the second high-level meeting between China and the United States in two months as they continue to seek to reduce trade tensions.

Comment: Could be interesting if this possible meeting turns out to be substantive and not just a meet and greet, as if Wang Qishan has re-engaged on US-China issues than it is likely the Chinese see real likelihood of a deal. It is too early to get excited though as much depends on this week's meetings in Beijing between the two sides. 

2. Tech race

Bipartisan bill seeks to toughen Trump approach on China - POLITICO:

The bill from Sen. Mark Warner (D-Va.), the top Democrat on the Senate Intelligence Committee, and Sen. Marco Rubio (R-Fla.), who also serves on the panel, is the latest sign of growing, bipartisan unease with President Donald Trump's attitude toward China and worries that national security concerns will be given short shrift as the White House pursues a trade deal with Beijing...

The proposed measure would establish an Office of Critical Technologies & Security at the White House to coordinate efforts across federal agencies and develop a national strategy to combat state-sponsored technology theft and eliminate risks to supply chains.

Chinese tech investors flee Silicon Valley as Trump tightens scrutiny | Reuters:

Lawyers who spoke to Reuters say they are feverishly rewriting deal terms to help ensure investments get the stamp of approval from Washington. Chinese investors, including big family offices, have walked away from transactions and stopped taking meetings with U.S. startups. Some entrepreneurs, meanwhile, are eschewing Chinese money, fearful of lengthy government reviews that could sap their resources and momentum in an arena where speed to market is critical.

U.S. Officials Warn Health Researchers: China May Be Trying to Steal Your Data - The New York Times:

Scientists and universities receiving funds from the National Institutes of Health for cutting-edge research need to tighten their security procedures and take other precautions, said a panel of experts commissioned by the agency to investigate “foreign influences on research integrity.”..

“Unfortunately, some foreign governments have initiated systematic programs to unduly influence and capitalize on U.S.-conducted research, including that funded by N.I.H.,” the panel said in a report last month to the director of the N.I.H., Dr. Francis S. Collins.

As China and US spar over tech, scientists would rather not talk about their talent awards | South China Morning Post:

For recipients like Liu, what was once a prestigious award is now highly sensitive.

“Around mid-September, I was asked to delete anything related to the Thousand Talents Plan from my homepage,” he said.

As well as scrubbing any mention of the award from their online profiles, recipients’ names have been removed from the official TTP site. Online Chinese news reports on the plan have also disappeared.

Tsinghua 2018 White Paper on AI Chip Technologies--清华大学举办第三届未来芯片论坛,并发布《人工智能芯片技术白皮书(2018)》 | 雷锋网  and in English. H/T to the excellent weekly ChinAI newsletter

Huawei Unveils Industry's Highest-Performance ARM-based CPU Bringing Global Computing Power to Next Level - Huawei:

Today, Huawei announced the industry's highest-performance Advanced RISC Machine (ARM)-based CPU. Called Kunpeng 920, the new CPU is designed to boost the development of computing in big data, distributed storage, and ARM-native application scenarios...

Kunpeng 920 is the industry's highest-performance ARM-based server CPU. Using the cutting-edge 7nm process, the CPU was independently designed by Huawei based on ARMv8 architecture license.

Taiwan chipmaker UMC's pullback hurts China self-sufficiency plans - Nikkei Asian Review:

The Fuzhou Intermediate People's Court ruled in favor of UMC in July and temporarily barred Micron from selling and producing certain products in China. The U.S. Justice Department then said in November that a federal grand jury indicted UMC and JHICC, as the legal battles take an increasingly political tinge.

UMC, fearing that the case will harm its main business of contract manufacturing, has decided to scale down its collaboration with JHICC.

JHICC was expected to begin mass chip fabrication based on UMC technology as early as 2019, but that scenario is extremely unlikely now. The company has not said whether new difficulties receiving UMC technology will impact its progress.

Head of China's tech ministry calls for enterprises to support core technology · TechNode:

Wang Zhigang, head of China’s Ministry of Science and Technology, has called for private enterprises to make full use of local policies to gain access to sponsorship and subsidies while aiding in the country’s development of core technologies.

“The private economy is a crucial part of China’s economic development,” Xinhua News Agency cites Wang as saying at a government-led conference in Beijing on Sunday (in Chinese). He said the government aims to support the growth of private businesses by creating a fair market environment for innovation and competition.

Taiwan Arrests Six Accused of Leaking BASF Tech to China - Bloomberg:

Taiwan arrested six current and former BASF SE engineers accused of accepting bribes and sharing the German company’s technology with Jiangyin Jianghua Microelectronics Materials Co., in one of the more elaborate cases involving alleged Chinese intellectual property theft.

Jianghua offered them 40 million yuan ($5.8 million) in return for help building a new factory in the eastern Chinese province of Jiangsu, Criminal Investigation Bureau official Lu Sung-hao told reporters at a briefing Monday. The mainland company had already wired NT$40 million ($1.3 million) to two accounts in Samoa controlled by the group, he added.

3. Crackdown on Uighurs, Sinicizing Islam

China Targets Prominent Uighur Intellectuals to Erase an Ethnic Identity - The New York Times:

The mass detention of some of China’s most accomplished Uighurs has become an alarming symbol of the Communist Party’s most intense social-engineering drive in decades, according to scholars, human rights advocates and exiled Uighurs.

As the guardians of Uighur traditions, chroniclers of their history and creators of their art, the intellectuals were building the Central Asian, Turkic-speaking society’s reservoir of collective memory within the narrow limits of authoritarian rule. Their detention underscores the party’s attempts to decimate Uighur identity in order to remold the group into a people who are largely secular, integrated into mainstream Chinese culture and compliant with the Communist Party, observers say...

“Break their lineage, break their roots, break their connections and break their origins,” wrote Maisumujiang Maimuer, a religious affairs official, in a commentary in the state news media. “Completely shovel up the roots of ‘two-faced people,’ dig them out, and vow to fight these two-faced people until the end.”

Islamic communities urged to uphold sinicization, improve political stance - Global Times:

China will soon release the content of an outline on the sinicization of Islam, with Islamic communities urged to uphold sinicization of their religion by improving their political stance and following the Party's lead.

Representatives from local Islamic associations from eight provinces and regions, including Beijing, Shanghai, Hunan, Yunnan and Qinghai provinces, discussed a five-year (2018-2022) outline on the sinicization of Islam at a seminar held in Beijing on Saturday.

They agreed that the outline is the basic policy for Islamic sinicization covering the next five years, according to a statement published on the official website of the Chinese Islamic Association.

The outline also clarifies the main work and specific measures for the sinicization of Islam...

The year 2019 is a critical year for implementing the outline, Ma Jin, the deputy head of 12th bureau of the United Front Work Department of Communist Party of China (CPC) Central Committee, told the seminar. Ma stressed the importance of improving political stance and following the Party's lead.

Gao Zhanfu, vice dean of the Beijing-based China Islamic Institute, told the Global Times on Sunday that sinicization of Islam has "matured" since the concept was brought forward in 2015 by President Xi Jinping.

Sinicization of Islam is not about changing the beliefs of Islam, habits or ideology but to make it compatible with socialist society, Gao said.

China’s Muslims Brace for Attacks – Foreign Policy:

The news for the Hui, and other Chinese Muslims, isn’t good. In mid-December, several provinces removed their halal food standards, a move heralded by government officials as fighting a fictional pan-halal trend under which Muslim influence was supposedly spreading into secular life. That’s a severe contrast with previous government policies, which actively encouraged the development of the halal trade for export. This week, meanwhile, three prominent mosques were shut, sparking protests...

Islam isn’t the only religion being targeted. Beijing demands state control and oversight of all faiths. This supervision used to be run through the State Administration of Religious Affairs (SARA), but that department was dissolved last March, with responsibility for religion taken over directly by the United Front Work Department (UFWD), which handles the Communist Party’s control of civil society domestically.

Selected foreign reports and diplomats get tours of some Xinjiang camps, are treated to happy Uighurs and serenaded with “If You’re Happy and You Know It, Clap Your Hands,”-- China says pace of Xinjiang 'education' will slow, but defends camps | Reuters:

Last week, the government organized a visit to three such facilities, which it calls vocational education training centers, for a small group of foreign reporters, including Reuters.

In recent days, a similar visit was arranged for diplomats from 12 non-Western countries, including Russia, Indonesia, India, Thailand, Kazakhstan, according to Xinjiang officials and foreign diplomats.

Senior officials, including Shohrat Zakir, Xinjiang’s governor and the region’s most senior Uighur, dismissed what they called “slanderous lies” about the facilities...

“As time goes by, the people in the education training mechanism will be fewer and fewer,” he said...

“One million people, this number is rather frightening. One million people in the education mechanism - that’s not realistic. That’s purely a rumor,” he said, stressing they were temporary educational facilities.

China explores effective governance of religion in secular world - Global Times:

The news captured widespread attention in Western media. Some people connected it with the country's efforts to address extremism in Northwest China's Xinjiang Uyghur Autonomous Region, accusing China of violating freedom of religious belief. But before they comment on China, we suggest these people pay attention to their own countries' social instability and terrorist attacks caused by religious extremists.

In today's world, modern countries are generally all facing a revival of religion, including Western countries. As the revival accelerates, immigrants of different religious beliefs have more or less caused social conflicts on different religious borderlands. In Italy, politicians even warned people of a religious invasion: "We are under attack. Our culture, society, traditions and way of life are at risk," said Deputy Prime Minister Matteo Salvini at the beginning of 2018. One Italian media straightforwardly declared "Religious wars to make a comeback in 2019." In the internet era, the spread of religion is even speeding up.

4. Xi's New Year instructions to the PLA

You would expect a commander to exhort the troops to prepare for combat, and this message is consistent with what Xi and his predecessors have said. But given the surge in PLA capabilities, reforms, improving and intensifying training regimen and the increasingly "complex" and friction-filled international environment it is worrisome.

Xi tells military to always be combat ready - China Daily:

Addressing a Central Military Commission meeting in Beijing, Xi, also general secretary of the Communist Party of China Central Committee, said the world is in an era of drastic changes and China is still in a strategically significant period vital to the country's development. He noted that various predicable and unpredictable risks and challenges have been arising.

The president urged the military to be fully aware of the nation's security and development trends, to strengthen troops' awareness of crisis, challenges and combat, and to make solid and comprehensive preparations for military operations.

The People's Liberation Army and Armed Police Force must focus on improving their combat capability and whatever they do must be for the betterment of their combat readiness, Xi said.




Xi also signed a mobilization order for the training of the armed forces, the CMC's first order in 2019 - 中央军委2019年开训动员令


PLA releases second batch of new Military Training Outline - Ministry of National Defense:

BEIJING, Jan. 4 (ChinaMil) -- The second batch of new Outline of Military Training for the Chinese military with a total of more than 900 pieces was officially released after strict trials and argumentation.The new Outline took effect on January 1, 2019, marking the completion of the main part of the construction of the PLA's new Military Training Outline.

On January 24, 2018, the first batch of more than 700 pieces of the PLA's new Military Training Outline was officially issued, providing significant laws and regulations for military training in the new era. In the past year,all Chinese troops have pushed forward their actual combat training in accordance with the first batch of new Outlines.

5. Taiwan

Taiwan’s President, Defying Xi Jinping, Calls Unification Offer ‘Impossible’ - The New York Times:

“It is impossible for me or, in my view, any responsible politician in Taiwan to accept President Xi Jinping’s recent remarks without betraying the trust and the will of the people of Taiwan,” Ms. Tsai said in a briefing for foreign reporters in Taipei, Taiwan’s capital.

“We hope the international community will pay attention and combine efforts to speak out on our behalf,” she said...

“I myself expect all of Taiwan’s political parties to clearly state, ‘We reject “one country, two systems,’” Ms. Tsai said on Saturday. “And there’s no need to talk about the 1992 consensus anymore, because this term has already been defined by Beijing as ‘one country, two systems.’”

Trump Signs Asia Reassurance Initiative Act Into Law | The Diplomat:

The ARIA devotes considerable energy to reasserting U.S. support for Taiwan and calls on the president of the United States to “encourage the travel of high level United States officials to Taiwan, in accordance with the Taiwan Travel Act,” which was made law in 2018.

Taiwan's ruling party DPP elects Cho Jung-tai as new chairman - The Straits Times:

Taiwan’s ruling Democratic Progressive Party (DPP) elected a new chairman on Sunday (Jan 6), choosing a moderate to fill up the post vacated by President Tsai Ing-wen after the party’s disappointing performance in recent polls.

Mr Cho Jung-tai, a consensus candidate backed by major party figures, took 72.6 per cent or 24,699 of the ballots cast by party members, according to Taiwan’s Central News Agency (CNA).

The former Cabinet secretary-general comfortably defeated Mr You Ying-lung, an openly pro-independence rival who supported a recent call by four party heavyweights for Ms Tsai not to seek re-election next year.

6. Belt and Road

Beyond “Debt-Trap Diplomacy”: The Dissemination of PRC State Capitalism - Jamestown:

Close examination of the case of Sri Lanka, the most widely cited example in discussion of “debt-trap diplomacy,” suggests that the “debt-trap” narrative does not capture the nature of the sweeping change underway. By fixating on the debtor-creditor relationship, the “debt-trap diplomacy” narrative misses the bigger picture — namely, the penetration of the global economy by PRC “national champion” state-owned enterprises (SOEs), which will serve to entrench and legitimize the PRC development model.

The availability of PRC loans is merely one component in the package of state capitalism, which includes technically competent PRC SOEs that can deliver upon promises in a timely manner (ahead of an election, for example) and secure funding from the PRC when no alternative funding is available; as well as a business plan to bring in additional PRC investors, backed by a PRC party-state with enormous power to mobilize investment. This, rather than debts, will have the most profound implications for PRC relations with its supposed “debt-trap” counterparts, as the importance of loans to the PRC’s overall strategy will likely shrink moving forward. The PRC SOEs’ engagement in Sri Lanka, currently underway, provides an excellent case study through which to understand this process.

Comment: This article by the Central Literature Research Center 中共中央文献研究室 in the 12.20 People's Daily recounts the timeline of how Xi put forward the Belt and Road and explains why the initiative matters.- 打造国际合作新平台 增添共同发展新动力--观点--人民网: 

Google translate: In short, Comrade Xi Jinping’s important exposition on the construction of the “Belt and Road” has built a high-rise and unified overall situation, with profound ideas and rich connotations, and provided fundamental follow-up for promoting the construction of the “Belt and Road”. [Emphasis mine] In the past few years, the “One Belt and One Road” has been built to complete the overall layout, and a “big freehand brushwork” has been drawn. In the future, we will focus on the key points and carefully crafted the “fine brushwork”.

Southeast Asia wary of China's Belt and Road project, skeptical of U.S.: survey | Reuters:

The survey by the ISEAS-Yusof Ishak Institute, affiliated with the Singapore government, polled 1,008 respondents from all ten nations of the ASEAN grouping, drawn from government, academic and business communities, civil society and the media.

Nearly half of the respondents said President Xi Jinping's hallmark Belt and Road initiative would bring ASEAN "closer into China's orbit," while a third said the project lacked transparency and 16 percent predicted it would fail.

A large majority, or 70 percent, said their governments "should be cautious in negotiating BRI projects, to avoid getting into unsustainable financial debts with China," a view strongest in Malaysia, the Philippines, and Thailand.

7. CCDI plenum this week

The third plenary session of the 19th CCDI of the CPC is scheduled for January 11 to 13, 2019, so a surge in news about rules, tigers and repentant repatriated officials. But will any more national-level tigers fall, or are things slowing down?

CPC issues work rules for disciplinary inspection organs - Xinhua:

The General Office of the Communist Party of China (CPC) Central Committee has issued work rules for disciplinary inspection organs.

The CPC Central Commission for Discipline Inspection in January 2017 published pilot work rules to strengthen self-supervision, which has played an important role in regulating the power of disciplinary inspection and building an inspection and supervision team with loyalty, moral integrity and responsibility, says a circular issued along with the work rules.

The work rules - 中共中央办公厅印发《中国共产党纪律检查机关监督执纪工作规则》 

Ex-Beijing Vice Mayor Under Investigation for Corruption - Caixin:

A former vice mayor of Beijing with ties to billionaire fugitive property tycoon Guo Wengui is under investigation for corruption, state media announced on Sunday night.

Once a rising star, Chen Gang was named Beijing’s vice mayor at the comparatively young age of 40 in 2006. He had headed the municipal urban planning committee, which approves and supervises construction projects, since 2002. Holding these positions concurrently, he directed and oversaw the giant, citywide construction projects that reshaped Beijing in preparation for the 2008 Summer Olympics. He last served as head of the Chinese Association of Science and Technology secretariat...

Details about the investigation are yet to be announced, but rumors of Chen’s misdeeds have circulated for years.

北京市原副市长陈刚成2019年落马首虎 曾助郭文贵协调贷款处理违建 

Chen Wenku’s Chamber of Secrets: 40 Million Yuan Hidden in Official's Bathroom - Caixin Global:

Chen Wenku, a former official from Inner Mongolia, had a bathroom that put the most high-tech heated toilet seat to shame. Chen’s had a fingerprint lock — and inside, the equivalent of nearly $6 million in cash.

The bathroom itself was hidden behind a wardrobe. It took five machines an “entire night” to count the money, which was held in various currencies including Chinese yuan, U.S. dollars and euros, China’s graft watchdog said on Saturday.

以案促改 警钟长鸣——内蒙古在开展警示教育中用好用活反面教材

CCDI has released a documentary on corrupt officials repatriated after Interpol Red Notice. This interview is with Yang Xiuzhu, whose last stop before returning was the US. Of course the message is that life is really hard overseas and it is much better to be Chinese in a Chinese prison than on the run overseas:

【多维新闻】外逃13年 中国红通头号嫌犯杨秀珠首次接受采访 - YouTube 

8. On the lengthening of terms for grassroots officials

Wuhan University Professor/researcher at the school's research center for China rural governance Lu Dewen (吕德文-武汉大学中国乡村治理研究中心研究员、博士生导师) writes in People's Daily about the importance of the change in term limits for village officials from 3 to 5 years. There is a reason Xi and the Party are so focused on the grassroots, if they can't control the lowest levels then things can all come apart.

Lu's comments include an interesting criticism of the village democracy experiments that have withered under Xi, says they threatened the Party leadership and intensified contradictions...

基层组织任期3年改为5年 背后有何考量?_人民网:




Business, Economy, Finance And Trade

China’s new tax-deduction policy raises concerns about rise of rents - Global Times "I'm qualified to apply for a tax break on my rent under the new law," said a 20-something white-collar worker surnamed He in Beijing. "But my landlord slammed the door on my attempt to qualify for the tax break, as he said he would raise the rent if the authorities levied tax on the house because of my application," He told the Global Times on Sunday. 房租可抵扣个税 房东:你要申报,我就涨租金! 

Chinese Consumers Indifferent to Diplomatic Spat Between China and Canada as “Canada Goose Boycott” Backlashes | What's on Weibo The company’s struggles have also received extensive coverage on Chinese social media. On Weibo, the hashtags “Canada Goose Value Crashing” (加拿大鹅暴跌) and “Canada Goose Mainland store opening canceled”(加拿大鹅内地开业取消) registered over 230 million and 170 million views, respectively, with some netizens calling for a boycott of the Canadian brand. The nationalist tabloid Global Times quoted ‘experts’ and ‘consumers’ in suggesting that “if Canada keeps detaining a senior Huawei executive in a complicit move to woo the US, the repudiation of Canadian goods will expand.” However, no boycott materialized as the brand’s first Mainland store was packed with Chinese consumers on its opening day, to the point where store employees had to restrict entry, forcing many to wait over thirty minutes in -12oC temperatures.

China approves $125bn of rail projects in fiscal stimulus | Financial Times $$ The National Development and Reform Commission, China’s top planning agency, has approved urban rail projects in eight cities and regions worth a total of Rmb860bn ($125.3bn) since December 5, according to official statements.

'Every batch' of rare earth exports faces oversight: ministry - Global Times China will step up its supervision on the rare-earth sector, as it vows to impose severe penalties on those illegally mine, produce or export rare-earth materials and fully realize the "strategic support" from rare-earth materials, according to a new guideline released on Sunday. The guideline, which was jointly released by the Ministry of Industry and Information Technology and 11 other government agencies, aims to bring order to the country's rare-earth sector, the world's largest in terms of production, as well as a frequent target of foreign criticism.

China slashes banks' reserve requirements again as growth slows | Reuters China’s central bank said on Friday it was cutting the amount of cash that banks have to hold as reserves for the fifth time in a year, freeing up $116 billion for new lending as it tries to reduce the risk of a sharp economic slowdown

VW Predicts Rising China Sales, Bucking a Shrinking Market - Bloomberg Volkswagen AG said it’ll boost sales in China this year by adding new models that’ll help avoid downward pull of a market that’s expected to see its first annual decline in at least two decades. The world’s largest automotive group is “confident” of more growth in 2019, incoming China Chief Executive Officer Stephan Wollenstein said Monday at a briefing in Beijing. Sales at the group, which includes the luxury Audi brand, climbed about 20,000 units last year compared with the 4.2 million units it delivered in 2017.

China’s FX Reserves Rose Again in December Amid Yuan Rally - Bloomberg Reserves increased to $3.073 trillion in December from $3.062 trillion the previous month, the People’s Bank of China said Monday. That slightly exceeded the median estimate of $3.072 trillion.

China to Give Banks More Leeway to Set Deposit and Loan Rates, PBOC Says - Caixin China is expected to further liberalize the way that domestic interest rates are set this year, allowing financial institutions to choose interest rates for their loans and deposits that are more in line with market trends and their own financial goals instead of tying them to the official benchmark rates set by the central bank. This is the message conveyed after a work conference of the People's Bank of China (PBOC) on Friday, after which it also announced that it would cut the reserve requirement ratio, or the amount of money that banks have to hold in reserves, by one percentage point to ensure that banks had an ample supply of money to lend ahead of the Lunar New Year holidays.

Former Thai Leader Serving as Chairwoman of Chinese Port Operator - Caixin Global Sightings of former Thai Prime Minister Yingluck Shinawatra have been rare since she fled Bangkok after a corruption trial in 2017, with her occasionally sighted shopping in London or holding meetings in fancy Singapore hotels. This week, Caixin discovered her in a less-expected place — working as the chairwoman of a Guangdong-based port operator. Sources at Shantou International Container Terminals Ltd. confirmed that Yingluck, 51, began serving as the company’s chairwoman and its legal representative on Dec. 12. “This fact is well-known,” an employee told Caixin.

How China’s worsening economic woes are shattering the dreams of its top graduate students | South China Morning Post A number of students, who had similarly been hired by Mindray and then had their offers pulled, created a chat group to figure out their next steps. Li said the participants commonly felt it was their misfortune to have graduated in a year when China was under mounting economic pressure.

Bank Sees Lower Mortgage Rates in Sign China Easing Up on Real Estate - Caixin The “overly tight administrative controls” in first- and second-tier cities may be “moderately relaxed” to meet demand of first-time homebuyers and homeowners upgrading to better properties, Bank of Communications, one of China’s five largest lenders, said in its “2019 Outlook on China’s Economy and Financial Markets.” // And more signs cities are loosening restrictions, this article about shifts in Qingdao and Hangzhou 青岛、杭州“接力”松绑 各地楼市政策微调将成常态

China Box Office Growth Slows to 9% in 2018 but Hits Government Target – Variety China’s total box office revenue grew 9% in 2018 to $8.87 billion (RMB60.98 billion). The rate of expansion was slower than the year before, when it hit 13.5%, state media and government reports said. But the country still met its government-set 2018 box office target of RMB60 billion yuan in ticket sales on Dec. 29.

Shanghai Tesla factory kicks off construction - SHINE During a groundbreaking ceremony held in Shanghai today, Elon Musk, chief executive officer of Tesla Inc, said they will produce cars including Model 3 in the Shanghai plant — its first factory outside the United States — to better serve Chinese buyers. Elon Musk said on Twitter hours before the ceremony that Tesla aims to finish initial construction of the Shanghai Gigafactory this summer and begin Model 3 production at the end of the year, reaching "high volume production" next year.

Politics, Law And Ideology

中共中央政治局常务委员会召开会议 中共中央总书记习近平主持会议_中国经济网——国家经济门户 Xi chaired a Politburo Standing Committee Monday, announced agenda focused on listening to the work reports from the leading Party members' groups of the NPC, State Council, CCPCC, Supreme Court, Supreme Procuratorate and the Central Secretariat...yeah about that separation of Party and state... // 听取全国人大常委会、国务院、全国政协、最高人民法院、最高人民检察院党组工作汇报 听取中央书记处工作报告 ; 中共中央总书记习近平主持会议... 会议强调,新的一年里,中央书记处要在加强和维护党中央权威和集中统一领导上作表率,勇于担当作为,提高议事能力,围绕中央政治局、中央政治局常委会工作安排抓好落实,完成好党中央交办的各项任务。//Xinhua - CPC leadership hears work reports 

Keeping to the Script | China Media Project: Appropriating the handwriting of top leaders for one’s own purposes is not really something serious, but it does have quite significant echoes in the history of the Chinese Communist Party. I’m referring, of course, to the formalisation and widespread application — a process that in Chinese we call jizi (集字) — of the calligraphy style of Mao Zedong... President Xi Jinping has fashioned his signature in the Mao Zedong calligraphy style.

A Mao script generator - 毛体字体转换器在线转换-毛体字体在线生成器-第一字体网 

China turns up heat on individual users of foreign websites | Financial Times Mr Zhu had used the popular VPN app, Lantern, to access foreign websites, and was punished under a public security law introduced in 1997 that forbids access to the “foreign internet” without permission, the police statement said.  //  As one Chinese Twitter user suggested, this is similar to the Cultural Revolution era crime of secretly listening to enemy broadcasts 偷听敌台

Twitter in China: Authorities crack down one user at a time - The Washington Post In Beijing and other cities across China, prominent Twitter users confirmed in interviews to The Washington Post that authorities are sharply escalating Twitter crackdown. It suggests a wave of new and more aggressive tactics by state censors and cyber-watchers trying to control the Internet. // From China Change in early December - China Steps up Nationwide Crackdown to Silence Twitter Users – the Unmediated Story 

探索社会治理新解法 网络新“枫桥经验”高峰研讨会在京举行  the 3rd "Fengqiao Experience" for Internet Management was held in Beijing, Alibaba was a sponsor

Senior CPC official calls for stronger publicity work under Xi thought - Xinhua Senior Communist Party of China (CPC) official Wang Huning on Sunday called for better work in publicity under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. Wang, a member of Standing Committee of the Political Bureau of the CPC Central Committee and a member of the Secretariat of the CPC Central Committee, made the remarks at a meeting for China's publicity officials. He underscored the importance of successfully fulfilling publicity and ideological work to boost the development of the CPC and the country. The publicity work of this year should be promoted around the theme of celebrating the 70th anniversary of the founding of the People's Republic of China, to inspire the people to work hard jointly, he said. He underlined "strengthening the overall Party leadership over the publicity and ideological work," and "holding firmly the CPC's leading position in ideological work." 全国宣传部长会议在京召开 王沪宁出席并讲话

社科院副院长高翔兼任中国历史研究院院长|中国历史|高翔|研究院_新浪新闻 Gao Xiang will head the new CASS history institute. He was trained as a historian, then become a propaganda official in Fujian before becoming deputy director of the office of the central cyberspace affairs commission, before taking this new job...says a lot about the future direction of this institute...his academic study including the history of literary inquisitions 文字獄...

守正创新 奋进新时代 开创宣传思想文化工作新局面_中国经济网——国家经济门户 央视网消息(新闻联播):党的十八大以来,以习近平同志为核心的党中央举旗定向,正本清源,使意识形态领域形势发生了全局性、根本性的转变。2018年8月,习近平总书记在全国宣传思想工作会议上发表重要讲话,指出宣传思想战线进入了守正创新的重要阶段,强调“推动宣传思想工作不断强起来”。总书记的重要讲话,为新时代宣传思想工作指明前进方向,宣传思想文化战线以习近平新时代中国特色社会主义思想为指南,自觉肩负起新形势下宣传思想工作的使命任务,奋力开创宣传思想工作新局面。

《中国梦》歌曲首发仪式在河北正定中学举行-中新网 On the release of the new song "China Dream," composed by Hou Dejian, that was just released at an event in in Zhengding, Hebei, where Xi started his career. Hou was a Taiwanese rock star, originally famous for his song "Descendants of the Dragon" (《龍的傳人》, who went to the mainland in 1983 and became famous for his activities during the 1989 Tiananmen protests . He now lives outside of Beijing, in addition to music he styles himself and expert on the I-ching and told a friend last year to expect a regional war between the US and China in the next few years, and that China would win

Xiamen vows to crack down on superstitions - Global Times The disciplinary watchdog of Xiamen, Southeast China's Fujian Province vowed to crack down on Party members who believe in ghosts and supernatural beings instead of Marxism-Leninism. The city's 70,000 Party members have been checked whether they have participated in superstitious activities.

Weekly Report 2|12 12.29.2018-1.4.2019 | Center for Advanced China Research 1.1  In Qiushi, Central Propaganda Department Head Huang Kunming (黄坤明) discussed strengthening propaganda and ideological work in the new year, specifically by strengthening the “four forces” (四力) of propaganda work: the foot, the eye, the brain, and the pen. These forces roughly symbolize penetrating the grassroots (the foot), correctly understanding domestic and international trends (the eye), arming the mind with Xi Jinping’s socialism with Chinese characteristic for a new era (the brain), a employing “lively, fresh, and powerful” writing style (the pen).

Chinese man gets US$670,000 payout after he was wrongfully jailed for 25 years | South China Morning Post Compensation package includes record US$277,000 for ‘mental harm’ caused Liu Zhonglin, now 50, was exonerated in April over the murder of an 18-year-old woman. He had maintained his innocence throughout his imprisonment

Foreign and Military Affairs

China is trying to woo U.S. allies. The White House’s response contains glaring failures. - The Washington Post Is it just me or is talk of the period of strategic opportunity increasing in frequency again?//  The campaign was outlined in barely veiled terms in a recent speech delivered by China’s defense minister to a closed-door meeting in Beijing with U.N. Security Council representatives. The Chinese effort is having growing influence, say experienced diplomats who attended the meeting. “The Chinese have correctly assessed that American allies now doubt they can ever rely on the U.S. again in many areas,” said one senior Western diplomat. “President Trump seems to represent enough of American public doubts and distrust of foreign nations that we all have to reexamine our place in the international order.”

US’ long-arm jurisdiction must be combated - Global Times - Song Guoyu China also suffers from the US' "long-arm jurisdiction," as in this year's Huawei and ZTE cases. Looking at the EU response, China may likewise consider adopting "blocking statutes" that make Chinese companies immune to unilateral US sanctions targeting other countries. If Chinese companies or individuals suffer losses by "violating" these sanctions, they may sue and claim compensation from the loss-causing parties in Chinese courts, and the Chinese government will lend a hand whenever necessary. Specific clauses and legislations may be formulated by drawing upon EU practice or adjustments accommodated in accordance with China's specific situation.

China's military attracts millions of fans at video sharing site with snippets of training and sensational moments - China Military The popular Chinese short video-sharing app Douyin (known as Tik Tok overseas) has been recently embraced by Chinese military groups. The PLA, including its five main theater commands, has opened an official account on the platform to share snippets of soldiers' daily duties.

The US and China are in a quantum arms race that will transform warfare - MIT Technology Review China has also managed to cultivate close working relationships between government research institutes, universities, and companies like CSIC and CETC. The US, by comparison, has only just passed legislation to create a national plan for coordinating public and private efforts. The delay in adopting such an approach has led to a lot of siloed projects and could slow the development of useful military applications. “We’re trying to get the research community to take more of a systems approach,” says Brodsky, the US army quantum expert. Still, the US military does have some distinct advantages over the PLA. The Department of Defense has been investing in quantum research for a very long time, as have US spy agencies.

China successfully completed hypersonic engine test - Global Times China's home-grown turbine-based combined cycle (TBCC) engine system has completed its design and development stage and entered the aircraft-engine integration test phase, a major step toward the development of the country's next generation hypersonic drone. An article published by the WeChat account of Chengdu Aircraft Research and Design Institute, a design facility of the Chengdu Aircraft Industrial Co, on Thursday said the TBCC engine flight test project is led by the institute's chief architect Wang Haifeng, who also led key national defense projects, such as the development of the J-20 and J-10 fighter jets.

Mobile howitzers help Tibet border defense - Global Times According to an article released by the WeChat account of the PLA Ground Force on Saturday, the PLA in the Tibet Military Command is equipped with the new howitzer, which Chinese military analysts said is supposed to be the PLC-181 vehicle mounted howitzer. The equipment was used in an artillery brigade in Tibet during the 2017 China-India stand-off.

Society, Art, Sports, Culture And History

NYC Migrant Recalls Fleeting Romance, Brush with Chinatown Underworld - China Narrative A really good story // Founded by former journalist Lei Lei, Truman Story has an uncanny ability to source tales from the general public, from all walks of life and transform them into succinct, compelling reads with first-rate editing. Lei said in an interview with The Paper published in September that some 30 of their stories are in the process of being adapted for TV or film, with at least seven projects expected to go into production by early 2019. Zhao Zifu, the author of this week’s longread, first published in October, was a foreign student pursuing graduate studies in Queens in the late 1990s. To help with expenses, Zhao worked as an occasional translator for a local laywer on his pro bono cases, many of which involved characters from the Chinese underworld. It was in this capacity that he met and become romantically involved with Haiyan, an illegal immigrant from a small town near the coastal city of Wenzhou.

She’s on a #MeToo Mission in China, Battling Censors and Lawsuits - The New York Times On a sleepless night last summer, her siamese cat Star at her feet, Zhou Xiaoxuan, a 25-year-old screenwriter in Beijing, took out her cellphone and began writing furiously about the day that had haunted her for years. In 2014, as a fresh-faced intern at China Central Television, the state-run broadcaster, she was asked to bring fruit to the dressing room of Zhu Jun, a famous anchor. It was there, she said, that Mr. Zhu began forcibly kissing and groping her. (Mr. Zhu has denied the accusations.)

Inside China’s unofficial churches faith defies persecution | South China Morning Post Paul is by no means a lone voice among the millions of faithful in China today who would rather see their independently operated churches close than comply with official regulations to register with the Three-Self Patriotic Movement and China Christian Council – together known as “lianghui” or “two organisations” – which govern Chinese Protestant churches. For decades, house church leaders and their followers have cited “irreconcilable differences” with official churches over issues such as biblical teachings, church autonomy, appointment of clergymen, and their history in refusing to register with the authorities.

Energy, Environment, Science And Health

Beijing records less heavily polluted days - Xinhua Air quality in Beijing has seen strong improvements during the past six years. The city had 15 heavily polluted days in 2018, comparing to 58 in 2013, local authorities said Friday. According to Beijing Municipal Ecological Environment Bureau, the city saw annual average concentration of sulfur dioxide, PM2.5, PM10 and nitrogen dioxide drop by 77.8, 42.7, 27.8 and 25 percent respectively from 2013 to 2018.

Fishing village hit by chemical leak | chinadialogue ocean Despite official notices that local water and air quality are up to standard and aquatic products safe to eat, Zhang is adamant that the leak, of “C9 aromatic solvent”, was to blame for his ruined lunch. He and others from the area are still worried. Xiaocuo has a population of 8,000 and is the closest village to the site of the incident. The local fish farms sell to Quanzhou’s port district, and to Quanzhou and Fuzhou cities.

Chinese police arrest Quanjian chief on suspicion of false marketing and running pyramid sales scams | South China Morning Post Chinese authorities on Monday announced the arrest of the chief executive of health care product maker Quanjian Group and more than a dozen employees on suspicion of false marketing and operating pyramid schemes.

Food And Travel

China offers 144-hr visa-free transit in 5 more cities - People's Daily Online These cities are Qingdao, a major port city in Shandong Province; Xiamen, a coastal city in Fujian Province; Wuhan, capital of Hubei Province; Chengdu, capital of Sichuan Province; and Kunming, capital of Yunnan Province.