Trade War Ceasefire Didn't Last Long; Xi's Speech On Building A Tech Superpower; Not Enough Partying In Universities; 5,000 Years Of Civilization; John Garnaut Has Hurt Beijing's Feelings

Just when I thought we could take a break from talking US-China trade the Trump Administration undoes the ceasefire from last week and announces tariffs are coming--White House Statement on Steps to Protect Domestic Technology and Intellectual Property from China’s Discriminatory and Burdensome Trade Practices:

  1. To protect our national security, the United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The proposed investment restrictions and enhanced export controls will be announced by June 30, 2018, and they will be implemented shortly thereafter. 

  1. The United States will continue to pursue litigation at the World Trade Organization for violations of the Agreement on Trade-Related Aspects of Intellectual Property Rights based on China’s discriminatory practices for licensing intellectual property. The United States filed the case regarding these violations on March 23, 2018. 

  1. Under Section 301 of the Trade Act of 1974, the United States will impose a 25 percent tariff on $50 billion of goods imported from China containing industrially significant technology, including those related to the “Made in China 2025” program. The final list of covered imports will be announced by June 15, 2018, and tariffs will be imposed on those imports shortly thereafter.

In addition, the United States will continue efforts to protect domestic technology and intellectual property, stop noneconomic transfers of industrially significant technology and intellectual property to China, and enhance access to the Chinese market.  Likewise, the United States will request that China remove all of its many trade barriers, including non-monetary trade barriers, which make it both difficult and unfair to do business there.  The United States will request that tariffs and taxes between the two countries be reciprocal in nature and value.  Discussions with China will continue on these topics, and the United States looks forward to resolving long-standing structural issues and expanding our exports by eliminating China’s severe import restrictions.

The timing of thisI announcement looks designed to extract more concessions as Commerce Secretary Ross heads to Beijing this weekend and the US-DPRK summit may be back on for June 12. Will it work? We will learn in a future episode.

I am surprised the Trump press operation is not spinning his China strategy as drunken boxing meets hooligan negotiating style...

In other news Xi gave a speech to the Chinese Academy of Sciences (CAS) and Chinese Academy of Engineering (CAE) in which he again stressed the need for China to innovate, take control of core technologies and become a global technology superpower. 

Trump's ZTE “victory” looks hollow to me. It buys China time while spurring the nation to redouble efforts to create indigenous replacements four US technology. It is also a popular nationalist rallying point even though it is embarrassing to the Party as it affirms Xi’s focus on rejuvenation and the dangers of reliance on foreign things.

Technological independence and superiority has been the Party's goal for decades, but with the contemporary confluence of capital, capabilities, talent and foreign pressure the Communist Party may be closer to fulfilling these goals than it has ever been. 

Tonight PBS starts airing the documentary “The Chinese Exclusion Act” about America’s shameful history of racism towards Chinese. It has been in the works for years but it seems especially fitting that it is airing at this moment in US-China relations and American history. Here is a trailer:

Thanks for reading.

The Essential Eight

1. US-China

The Ministry of Commerce says White House decision on tariffs unexpected but not surprising, goes against consensus reached recently but no matter the US doe China has the confidence, capabilities and experience to protect Chinese peoples' interests and the nation's core interests-商务部新闻发言人就美国白宫声明发表谈话_自贸区连线_澎湃新闻-

5月29日消息,针对美国白宫29日发布的声明,商务部新闻发言人迅速回应表示,我们对白宫发布的策略性声明既感到出乎意料,但也在意料之中,这显然有悖于不久前中美双方在华盛顿达成的共识。无论美方出台什么举措,中方都有信心、有能力、有经验捍卫中国人民利益和国家核心利益。中方敦促美方按照联合声明精神相向而行

Qualcomm to meet China regulators in push to clear $44 billion NXP deal - Reuters:

Qualcomm is expecting to meet this week in Beijing with China's antitrust regulators in a final push to secure clearance for its proposed $44 billion acquisition of NXP Semiconductors, three sources told Reuters.

The acquisition has been caught in the crosshairs of rising U.S.-China trade tensions, with sources saying an approval would depend on the progress of broader bilateral talks. The deal has got a nod from eight of the nine required global regulators, with Chinese clearance the only one pending.

Now delayed by today's White House announcement?

Screwing allies seems a bad strategy for dealing with China - US presses China to sign long-term import contracts - FT $$:

Washington is pressing Beijing to enter into multiyear contracts to buy US agricultural and energy imports as part of a broader trade deal aimed at reducing the $337bn bilateral trade deficit with China.

But the move could mean taking Chinese business away from key US allies such the EU, Australia, Brazil and Argentina, whose exports could be hit by President Donald Trump’s gambit.

Commerce secretary Wilbur Ross is expected to discuss a list of products that China sources from other countries but could buy from the US on a visit to Beijing later this week. The list was presented to Beijing this month.

U.S. and China clash over 'technology transfer' at WTO | Reuters:

“There is no forced technology transfer in China,” China’s Ambassador Zhang Xiangchen told the meeting, adding that the U.S. argument involved a “presumption of guilt”. “But the fact is, nothing in these regulatory measures requires technology transfer from foreign companies.”  

Comment: There is what is written in the regulations and there is the reality of what companies are told they must do...

Poultry push: U.S. seeks end to China import ban - sources | Reuters:

The United States is pushing China to drop a ban on U.S. poultry imports as part of trade talks, according to three sources briefed on the matter, eyeing a potential $600 million market for chicken feet and other parts.

Rubio, in challenge to Trump, suggests Congress will act against ZTE - The Washington Post:

In an appearance on CBS News’s “Face the Nation,” Rubio (R-Fla.) said there is “a growing commitment in Congress to do something about what China is trying to do to the United States” and that “one of the things that Congress will do is . . . not even allow Chinese telecom companies to operate in the United States.”

“None of these companies should be operating in this country,” he said, also naming the Chinese telecom firm Huawei. “None of them.”

Comment: We'll see, Senator Rubio does not have a strong history of actually standing up to Trump when it comes to legislative action. Talk is cheap, and especially these days when there is zero political downside to sounding as hawkish as possible on China. Maybe this time is different but I would be surprised if Senator McConnell does not rein this in before it gets to a vote. 

Bill Moves to Block U.S. From Buying Chinese Surveillance Equipment - WSJ:

The U.S. government will be banned from buying Chinese-made surveillance cameras under a $717 billion defense-policy bill passed by the House, the latest move against Chinese technology on the basis of national security concerns.

The bill, passed Thursday, names several Chinese companies—including Hangzhou Hikvision Digital Technology Co. 002415 0.08% , which is 42%-owned by the Chinese government and is the world’s biggest maker of surveillance equipment.

Beijing’s New Superpowers Over Movie Industry Frustrate Hollywood Studios - WSJ $$:

Chinese President Xi Jinping’s recent consolidation of power has placed China’s film division under the Communist Party’s Ministry of Propaganda—and stalled talks about a new China-U.S. film-trade agreement that would include seeking better terms for studios’ take of box-office sales in China.

The shift to party oversight has left U.S. studios with few answers about how to proceed in the world’s second-largest movie market, Hollywood executives in the U.S. and Asia say.

Chinese military expansion raises stakes of challenge to the U.S. - Axios"

Why it matters: China is not only restoring its place as the dominant power in Asia, but also extending its presence and influence far beyond. Along the way, it has become the most significant global competitor the U.S. has ever faced. - Michael Morell, a former deputy director of the CIA

Ivanka Trump Wins China Trademarks, Then Her Father Vows to Save ZTE - The New York Times:

At around the same time, President Trump vowed to find a way to prevent a major Chinese telecommunications company from going bust, even though the company has a history of violating American limits on doing business with countries like Iran and North Korea.

Coincidence? Well, probably.

Ross goes from Trump ‘killer’ to ‘past his prime’ - POLITICO:

Trump himself has lashed out at Ross in Oval Office meetings, telling the man who once helped bail him out in Atlantic City that he’s “past his prime” and “no longer a killer” and trying to bench him from making trade deals, according to three people familiar with the comments. Despite being one of the administration’s leading protectionist voices early on, Ross was initially left off a May trade delegation to China led by Treasury Secretary Steven Mnuchin.


2. Building A Technology Superpower

Xi calls for developing China into world science and technology leader - Xinhua

Xi made the statement at the opening of the 19th Meeting of the Academicians of the Chinese Academy of Sciences (CAS) and the 14th Meeting of the Academicians of the Chinese Academy of Engineering (CAE).

Xi said the circumstances, challenges and missions are pressing. He called on the country's science and technology personnel to grasp the main trends, seize opportunities, face problems squarely, and rise to challenges.

Xi said they should aim for the frontiers of science and technology, lead the direction of its development, shoulder the heavy responsibilities bestowed by history, and be vanguards in innovation in the new era.

Members of the Standing Committee of the Political Bureau of the CPC Central Committee attending the meeting were Premier Li Keqiang, Wang Huning, who is a member of the Secretariat of the CPC Central Committee, and Vice Premier Han Zheng...

Noting that independent innovation is the only path for China to climb high in global science and technology, Xi urged courageous moves to reach for the "commanding heights" in scientific and technological competition and future development.

Xi called for courage to explore the uncharted courses and realize the goal that key and core technologies are self-developed and controllable.

"The initiatives of innovation and development must be securely kept in our own hands," Xi said...

He stressed the role of youth in the future of the country and innovation. "Numerous children in China dream of becoming a scientist. We should make science an appealing career for the young," Xi said.

Two authoritative commentaries so far on Xi's speech so far:

新华社评论员:抢抓历史机遇 建设科技强国——一论学习贯彻习近平总书记在两院院士大会重要讲话 

新华社评论员:激发第一动力 矢志自主创新——二论学习贯彻习近平总书记在两院院士大会重要讲话 

Xi's speech was at the top 16 minutes of the Monday CCTV Evening News--[视频]习近平在中国科学院第十九次院士大会 中国工程院第十四次院士大会开幕会上发表重要讲话强调 瞄准世界科技前沿引领科技发展方向 抢占先机迎难而上建设世界科技强国_CCTV

One of Asia’s most valuable tech firms wants to help China make chips after ZTE’s wake-up call | South China Morning Post:

Pony Ma Huateng, chairman and chief executive of Tencent, said China’s internet giant would consider investing into the research and development of computer chips, as the country must focus on research of core technologies...

This is not the first time that a Chinese technology leader has spoken out about the need for greater expertise and self-reliance in the chip industry. Jack Ma, founder and executive chairman of Alibaba Group Holdings, said last month he was motivated by a desire to make chips “inclusive” – cheap, efficient and available to all. He said his company had invested in five semiconductor firms in the past four years.

“It is the compelling obligation for big companies to compete in core technology,” Ma said during the first Digital China Summit in Fuzhou last month. “A real company is not determined by its market value or market share, but how much responsibility it takes and whether it has mastered core and key technologies.”

Xi Jinping urges China to go all in on scientific self-reliance after ZTE case exposes hi-tech gaps | South China Morning Post:

Tsinghua University economics professor Yuan Gangming said the ZTE case highlighted the serious problems in China’s tech sector, difficulties that required changes not only in science and engineering but also to the country’s economic policy.

“This is a very serious problem because it shows clearly ... that China’s tech industry is behind. It also shows how a cooperative economic relationship can flip and become a big blow,” Yuan said.


3. South China Sea 

U.S. warships sail near South China Sea islands claimed by Beijing | Reuters:

The U.S. officials, speaking on condition of anonymity, said the Higgins guided-missile destroyer and the Antietam, a guided-missile cruiser, came within 12 nautical miles of the Paracel Islands, among a string of islets, reefs and shoals over which China has territorial disputes with its neighbors.

The U.S. military vessels carried out maneuvering operations near Tree, Lincoln, Triton and Woody islands in the Paracels, one of the officials said.

China vows to boost 'combat readiness' after U.S. sails two warships near South China Sea islands | The Japan Times:

China’s Defense Ministry has vowed to bolster its “combat readiness” to defend against what it said was a “serious infringement” of the country’s sovereignty after the U.S. Navy dispatched two warships for an apparent “freedom of navigation” operation (FONOP) in disputed South China Sea waters.

The ministry said late Sunday that the Chinese military had warned the two U.S. warships to leave after they entered waters near the contested Paracel Islands in the strategic waterway.

国防部新闻发言人吴谦就美舰擅自进入中国西沙群岛领海答问 - 中华人民共和国国防部:

西沙群岛是中国固有领土。根据《中华人民共和国领海及毗连区法》,中国政府于1996年公布了西沙群岛的领海基线。美方再次派军舰擅自进入中国西沙群岛领海挑衅,违反中国法律及相关国际法,严重侵犯中国主权,损害中美两军战略互信,破坏有关海域的和平、安全和良好秩序。中方对此坚决反对。

中国军队加强海空战备建设,提高防卫水平,捍卫国家主权和安全,维护地区和平稳定的决心意志是坚定不移的。

People's Daily's Xiake Dao is not pleased with the latest FONOP--侠客岛:美军南海挑衅空前升级,斗一斗或许更健康_凤凰资讯:

归根究底,美军焦虑的根源,是中美在南海力量差距的快速缩小。考虑到这将是一个几乎不可逆的趋势,未来两国的长期摩擦和相持也将是大概率事件。这个时间可能会很长,有可能5年,甚至10年。对此,中方也应该做好“持久战”的准备。不经过较为激烈的斗争,中美双方可能很难找到新的平衡,遑论局势步入相对稳定?斗一斗,也许会更健康。

当然,斗争也是有技巧的。中国仍要避免与美军进行战略对抗,但战术上却有必要对等升级,暂时的升级是为了避免将来的可能失控。从目前的情况来看,美国仍没有改弦更张的迹象,今后还将变换花样在南海进行武力示威和政策试探。这类试探‍在‍未遭遇实质性风险之前,不会偃旗息鼓。阻止这类行为的有效方式是适当升高对抗的等级,加大博弈的砝码,促使美国在风险过高时保持必要审慎

Duterte will 'go to war' over South China Sea resources, foreign minister says - CNN:

In a speech during a flag-raising celebration at the Department of Foreign Affairs Monday, Cayetano defended the Philippine government from allegations they were taking a soft policy on Chinese militarization of the South China Sea.

"(Beijing) said some red lines, we said some red lines ... The President has already said that. If anyone gets the natural resources in the Western Philippines Sea, South China Sea, he will go to war. He said, "Whatever happens, happens." He will go to war," Cayetano said.


4. Environmental Inspections And Targeted Enforcement

CCTV Evening News on Li Zhanshu's inspection of air pollution control work in Henan, part of the NPC inspection tours on enforcement and implementation of the Air Pollution Control Law--[视频]栗战书在河南检查大气污染防治法实施情况_CCTV 

栗战书来到省环保厅检查环境监测工作,到村民家中了解“电代煤”“气代煤”情况,实地查看扬尘污染防控、机动车污染排放治理、新能源公交车使用推广。执法检查组还对部分企业和工地进行了突击暗访。他指出,环境质量怎么样,老百姓的感受最直接、最强烈。污染治理成效怎么样,要由老百姓说了算,老百姓说好才是真好。要广泛宣传大气污染防治法律法规和政策措施,及时公开污染情况和治理成效,发动群众参与和监督,形成全社会共同治理的合力。

Top legislature inspects air pollution control in Hebei - Xinhua:

The Standing Committee of the National People's Congress (NPC), China's top legislature, has sent a team to north China's Hebei Province to inspect the implementation of the Air Pollution Control Law. Shen Yueyue, vice chairwoman of the NPC Standing Committee and head of the inspection team, stressed that the Beijing-Tianjin-Hebei region and surroundings are a key area in air pollution control.

Regulators Push for Case-by-Case Anti-Pollution Approach - Caixin Global:

China is revising its anti-pollution policies to avoid a “one size fits all” approach that regulators fear has put a chill on economic growth and unfairly targeted some businesses.

The Ministry of Ecology and Environment on Monday released new guidelines for environmental protection inspectors and regional regulators that will curtail heavy-handed measures in enforcement...

The move comes as the central government has sent experts to 10 provincial-level areas for a new round of pollution inspections.

It also comes amid growing dissent among some of the public over controversial practices initiated by local regulators to meet anti-pollution targets, particularly those that were part of the clean-air campaign of 2013 to 2017.

Police Detain, Beat Rare Earth Pollution Protesters in China's Guangxi - RFA:

Authorities in the southwestern Chinese region of Guangxi have detained 16 people who took part in a protest over pollution from nearby rare-earth mining operations, beating some of them, local sources told RFA.

Hundreds of residents of Mapeng village near Guangxi's Yulin city gathered in protest at the mining operation on Wednesday, holding banners and chanting, "Give us back our environment, give us back our land!"

Video footage seen by RFA showed uniformed police officers dragging and kicking elderly protesters, and an unconscious man in a hospital, his clothing soaked in blood.


5. Wang Qishan Meets Putin

Spotlight: Chinese vice president pushes for closer partnership with Russia - Xinhua:

Chinese Vice President Wang Qishan wrapped up a productive trip here on Sunday after meeting with Russian President Vladimir Putin and addressing a plenary session of the 22nd St. Petersburg International Economic Forum (SPIEF).

During his stay in Russia's "northern capital," he reaffirmed China's readiness to strengthen cooperation with Russia, called for a global effort against trade protectionism, and suggested that all countries build mutual trust and join hands for common development...

The two neighbors, he said, respect each other, trust each other, cooperate on the basis of equality, and enjoy mutual understanding and support on major international affairs.

In so doing, they have set a model of major-country relations in the current world and made great contribution to safeguarding global strategic stability and building a new type of international relations and a community with a shared future for mankind, added Wang.

The Chinese vice president stressed that it is a choice both of history and of the people that China and Russia steadfastly pursue development paths that suit their respective national realities...

The Chinese vice president stressed that politicizing economic and trade issues and picking up the stick of economic sanctions at the slightest provocations will gravely impair market certainty.

No country should blame its own problems on others, and all countries should pursue development paths that suit their own realities and strive for common development through opening up and cooperation, Wang said.


6. Not Enough Partying In Universities, Says Ministry Of Education

Alas, not the kind of partying I did at Middlebury...

University CPC chiefs urged to lead academic, ideological work - Global Times:

Secretaries from Chinese university branches of the Communist Party of China (CPC) are encouraged to play a bigger role in pushing forward Party construction work, a move to cultivate more committed successors of socialism with Chinese characteristics, experts said.

China's Ministry of Education (MOE) recently issued a notice urging secretaries of university CPC branches to play a leading role in both academic and Party construction work, the ministry said on its website Monday.

The decision enhances the Party's guidance of universities and improves university teachers' ideological work, it said.

Many universities focus less on Party construction work, because their work evaluation is closely related to academic performance rather than ideological education, Su Wei, a professor at the Party School of the Chongqing Party Committee, told the Global Times.

中共教育部党组关于高校教师党支部书记 “双带头人”培育工程的实施意见 

培养德智体美全面发展的社会主义建设者和接班人——全国各地高校深入学习贯彻习近平总书记在北京大学考察时的重要讲话精神-新华网:

5月2日,习近平总书记考察北京大学,出席师生座谈会并发表重要讲话时提出,培养社会主义建设者和接班人,是我们党的教育方针,是我国各级各类学校的共同使命。

连日来,全国各地高校深入学习宣传贯彻习近平总书记重要讲话精神,以此为重要契机和前进动力,明确问题、明确责任、明确措施,推进“双一流”建设更上层楼,致力于培养更多德智体美全面发展的社会主义建设者和接班人。


7. 5,000 Years Of Civilization And Cultural Confidence

Physical evidence found for 5,000 years of civilization - China Daily:

It is often said that Chinese civilization extends back 5,000 years. Now, after 15 years of intense research as part of a nationwide project to explore the origins of that civilization, archaeologists are able to back up that statement with solid physical evidence.

The results were disclosed at a news conference on Monday at the State Council Information Office.

The project has proved with physical evidence that Chinese civilization exhibited a multifaceted unity, said Guan Qiang, deputy director of the State Administration of Cultural Heritage. "It was inclusive, and its succession has never stopped."

Previously, some overseas scholars expressed doubts about the length of Chinese civilization due "to a lack of physical evidence".

Xinhua is out with a piece saying this is more reason to have "cultural confidence", one of the "four confidences" ("confident in our chosen path, confident in our political system, and confident in our guiding theories, confidence in our culture) Xi is pushing 新华时评:五千年!每一块基石都镌刻着文化自信 

And the Party is not only going back 5000 years for political gain. The heroes/martyrs propaganda seems to be really gearing up. It looks designed to stir the youth and I believe it will have a fair amount of propaganda success. Here are two recent examples:

谁是习近平心中的英雄 Who are the heroes in Xi's heart? 

-这里有一幅《英雄长卷》,把你的手机横过来看!- A scroll of heroes and martyrs is here


8. John Garnaut Has Hurt Beijing's Feelings

Chinese Communist Party interfering in Australian politics, top-secret report reveals:

9NEWS has confirmed the report says the CCP's operations are aimed at all levels of government and designed to gain access and influence over policy making.

Malcolm Turnbull commissioned the joint investigation in August 2016, combining the resources of domestic spy agency, the Australian Security Intelligence Organisation (ASIO), and the department of Prime Minister and Cabinet.

The departmental effort was led by one of the Prime Minister's former advisers, John Garnaut...

Mr Garnaut has left the public service and is now running a consultancy firm, JG Global, and in March he appeared before the powerful US House Armed Services Committee. His evidence focused on China and this testimony suggested his work on the report was global in its scope.

"Under the uncompromising leadership of President Xi Jinping, China's activities have become too brazen and aggressive to ignore," Mr Garnaut said.

Chinese security officials asked about Turnbull's adviser - Sydney Morning Herald:

Chongyi Feng, an Associate Professor in Chinese Studies at the University of Technology Sydney, was detained and questioned by Chinese officials during a visit to China in March last year about his links to liberal intellectuals in mainland China and contacts in Australia.

Fairfax Media can reveal that during the interrogation, Chinese state security officials demanded information about adviser John Garnaut, who at the time was working on an ASIO inquiry commissioned by Mr Turnbull.

Labor enlisted by Bob Carr in new China influence row - Sydney Morning Herald:

Former Labor Foreign Minister Bob Carr is using ALP senator Kristina Keneally to quiz the prime minister and senior officials about Malcolm Turnbull’s key former adviser on Beijing’s espionage and interference operations in Australia.

Fairfax Media has confirmed that Mr Carr, who heads a think tank created by a Chinese businessman closely connected to Beijing, has asked Senator Keneally to use parliament to find out details of the employment, job title, and contract of government adviser John Garnaut.

Comment: Do some in Australia really refer to Carr as "Beijing Bob"?


Business, Economy, Finance And Trade

PBOC's Yi Says China's Capital Account Opening Must Be Gradual - Bloomberg Quint Reaching full capital-account convertibility will be a long and slow process, Yi said Tuesday in a speech to the 2018 Annual Conference of Financial Street Forum in Beijing. He also cautioned against too abrupt an opening, citing Thailand’s 1997 financial crisis. China will ensure that such reforms will be pushed ahead “gradually, steadily”, he said. “In this new era, our financial sector still has a lot room to open up relative to the requirements of economic and financial development,” Yi said. “The three reforms -- opening up the financial sector to internal and external firms, exchange rate mechanism, and capital account convertibility -- have to be coordinated and pushed ahead together.”

Disappearing Chinese billionaire Xiao Jianhua awaits day in court as flagship’s assets sale stalls | South China Morning Post The trial of Xiao Jianhua, the Chinese billionaire who vanished from a luxury Hong Kong hotel over the Lunar New Year break in 2017, won’t take place in China until the second half of this year as his former flagship company struggles to dispose of assets, two sources told the South China Morning Post...“It’s not smooth sailing. The assets have to be wound up but the prices have to be good enough for Tomorrow Group to repay bank loans,” the second source said. “On top of that, there is new regulatory scrutiny of potential buyers.”

Chinese bank chief found dead inside his office | South China Morning Post Yin Jinbao, who has only chaired Tianjin Rural Commercial Bank for less than a year, died at around 2pm on Saturday, according to Jinyun New Media. The report cited local police sources as saying the death was a suspected suicide but gave no further details. The bank did not immediately reply to the South China Morning Post’s request for comment via email on Sunday.

China's Ant Financial raises $10 billion at $150 billion valuation - Reuters Ant Financial Services Group, operator of China's biggest online payment platform by market share, Alipay, has closed its latest funding round having raised $10 billion from a clutch of global and local investors, five people with direct knowledge of the matter told Reuters. Ant's first fundraising targeting global money values the firm at $150 billion, the people said, compared with about $60 billion after its previous fundraising in April 2016.

Citic Unit Takes Board Chairmanship in CEFC Europe - Caixin Global A unit of China's state-owned CITIC Group has taken over the chairmanship position at CEFC Europe, a Czech-based part of the troubled Chinese conglomerate CEFC China Energy, CEFC Europe said Monday. Ren Xia, executive director of Rainbow Wisdom, a unit of CITIC, was named to the board and elected chairwoman, according to a statement on CEFC Europe’s website.

China Is Said to Pick CICC, UBS to Ready Anbang Divestments - Bloomberg China has picked China International Capital Corp. and UBS Group AG to advise on potential disposals of assets owned by Anbang Insurance Group Co., people with knowledge of the matter said. Government regulators have asked CICC and UBS to help with preparations for divestments by Anbang, according to the people, who asked not to be identified because the information is private. The work is still at the planning stages, and no formal auction process has begun, the people said. // Anbang denies--Anbang Denies It Is Unloading Overseas Assets - Caixin 

Quick Take: Chinalco Closes $15 Billion Aluminum Deal With Yunnan Government - Caixin Global The move is the latest sign that Chinese aluminum producers want greater exposure to Yunnan, where hydropower is abundant, as the government cracks down on coal-fired power to cut pollution. The deal will give Chinalco access to Yunnan Aluminum’s 1.6 million tons of smelting capacity, with another 1.45 million tons in the pipeline or under construction, said Jackie Wang, an aluminum analyst at CRU in Beijing.

Malaysia’s New Leader Spikes Big Bullet Train Project - Caixin Global China’s railway builder ran into another setback to its overseas expansion aspirations after the new Malaysian government announced it will scrap a bullet-train project linking its capital to southern neighbor Singapore. Prime Minister Mahathir Mohamad said at a news conference Monday that he had decided to drop the Kuala Lumpur-Singapore High Speed Rail project in a move to reduce the country’s debt of over 1 trillion ringgit ($251 billion).

Alibaba and Cainiao to invest $1.38 billion in Chinese express delivery company ZTO - MarketWatch Alibaba Group Holding Ltd. BABA, +0.80% and its logistics arm Cainiao Network have agreed to invest $1.38 billion in Chinese express delivery company ZTO Express (Cayman) Inc. ZTO, +9.02% the companies said Tuesday in a joint statement

Reform for SOE wage system - Gov.cn The Chinese government will reform the wage system in State-owned enterprises (SOEs) with a goal of improving market competitiveness and arousing employee enthusiasm, according to a document released May 25 by the State Council. The yearly gross wages for SOEs will be connected with operational performance in a closer and more reasonable way. If the economic benefit grows, the gross wages that year can rise within range of how much the benefit grows. If the economic benefit falls, or the enterprise cannot maintain or increase its value of State property, its gross wages should be leveled or cut. The indicators that measure the SOE’s performance will be diversified based on the industry it belongs to 

Chinese Banks Line up to Launch Asset Management Subsidiaries - China Banking News An increasing number of Chinese banks are planning to launch specialised asset management subsidiaries after the unveiling of new regulations that have shaken up the sector. On 27 April Beijing officially launched the “Guidance Opinions Concerning Standardisation of Asset Management Operations by Financial Institutions” (关于规范金融机构资产管理业务的指导意见), in move that shook up the Chinese banking and financial sector by removing the “implicit guarantees” undergirding key investment vehicles such as wealth management products (WMP’s).

Housing Market Can Only Be Stable under Tightening: People's Daily - China Banking News According to the People’s Daily article entitled “The Housing Market Will Only Be Stable with Tightening” (楼市有“紧”才有“稳”), there will be any “loosening” or “easing” of local property controls despite the stabilisation of the market in some areas. “At present and even for some time in the future, housing market controls will continue to involve ‘unwavering targets and unrelaxed vigour,'” writes Liu Zhiqiang (刘志强) in the opinion piece.

Beijing’s Foxconn Embrace Has Tinge of Desperation - Bloomberg Forget BAT. It was obvious that Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd. would take minor stakes in the Foxconn Technology Group affiliate’s blockbuster Shanghai listing. Those three are in the bottom tier of cornerstone buyers anyway. Leading the lineup is the Shanghai State Development & Investment Corp., which is subscribing for 73 million shares, or 3.7 percent of those expected to be sold. Central Huijin Investment Co., China Railway Investment Co., China Structural Reform Fund and China Life Insurance Co. round out the top five.

 

Politics, Law And Ideology

蒋超良:学习贯彻习近平网络强国战略思想 推动网信事业发展迈上新台阶--新闻报道-人民网 5月24日,全省网络安全和信息化工作会议在武汉召开,省委书记、省网络安全和信息化领导小组组长蒋超良出席并讲话,强调要深入学习贯彻习近平网络强国战略思想,深入贯彻全国网络安全和信息化工作会议精神,牢牢掌握网络意识形态工作领导权,筑牢网络安全屏障,以信息化引领高质量发展,推动我省网信事业发展迈上新台阶 //  Comment: Based on media reports it looks like the provinces are all holding cyber security and informatization work conferences. this report is about Hubei's, chaied by Jiang Chaoliang

Mapping the intellectual public sphere in China today - Timothy Cheek, David Ownby, Joshua Fogel, 2018 The papers in this research dialogue section are the product of a project that examines intellectual life in China since the 1990s – chiefly the efforts by academic public intellectuals to rethink China’s past, present, and future in light of the excesses of Mao’s revolution, the challenges emerging from reform, and the rise of China to the status of world economic power. Chinese scholars, having benefited from China’s openness to the world and the relative relaxation of political pressure in China (until recently), have much to say about China and the world that merits our attention. Through creative collaboration between Chinese and international scholars, the articles collected here explore that intellectual public sphere since the late 1990s. The articles were written in Chinese by young PRC scholars and rendered into English through ‘collaborative translation’ teams that pair these Chinese with non-Chinese scholars based in Canadian universities. The net result, grounded on repeated conversations and revisions, is not a simple translation but a co-production of knowledge about China that aims to capture the discourse of Chinese scholarship in a way to make it meaningful to anglophone readers // Liberalism in contemporary China: Questions, strategies, directions--Tang Xiaobing, Mark McConaghyThe recasting of Chinese socialism: The Chinese New Left since 2000 - Shi Anshu, François Lachapelle, Matthew Galway 

New volume of major CPC documents published - Xinhua The third volume of a trilogy of major Communist Party of China (CPC) and central government documents made after the 18th CPC national congress in late 2012 has been published by the Central Party Literature Press. The latest volume contains 72 documents between October 2015 and October 2017, including 34 articles by Xi Jinping, general secretary of the CPC Central Committee, 16 by other Central Committee leaders, and 22 documents of the CPC Central Committee and the State Council. Nineteen of them are being published for the first time, according to the publisher.  //  Want

中共中央对涉党和国家机构改革的党内法规和相关文件作出清理决定-新华网 新华社北京5月29日电 《中共中央关于涉党和国家机构改革党内法规和相关文件专项清理的决定》日前发布。党中央决定,废止3件、修改35件中央党内法规和相关文件。  针对涉及党和国家机构改革的党内法规和相关文件进行专项清理,这是以习近平同志为核心的党中央为深化党和国家机构改革作出的决策部署,对于深入贯彻落实党的十九届三中全会精神,有效解决部分党内法规和文件与机构改革不适应、不协调、不衔接、不一致问题,确保机构改革依法依规进行具有重要意义。

Leading group on 4th national economic census set up - Gov.cn The group, headed by Vice-Premier Han Zheng, will be in charge of the organization and implementation of the census and addressing any major problems. Members of the group also include senior officials of the National Development and Reform Commission, National Bureau of Statistics, State Commission Office of Public Sectors Reform, Ministry of Civil Affairs, Ministry of Finance, and State Administration of Taxation.

Jiang Shigong on Xi Jinping and socialism with Chinese characteristics: an empty vessel | The China Collection Take a look, for example, at Zhang Chunqiao’s “On Exercising All-Around Dictatorship Over the Bourgeoisie”: it is full of quite specific ideas about what constitutes socialism and what does not. Jiang, however, resolutely refuses to commit himself on anything—except, as noted, Party leadership. Surely this is significant. Jiang is one of the leading, and perhaps the leading, intellectual warrior for Xi’ism. And he has essentially announced that socialism, the concept that justifies the dictatorial rule of the Party, has no content whatsoever, other than the very dictatorship it is supposed to justify.

Chinese Students Protest in America, Face Danger at Home – Foreign Policy So we decided to start a Twitter campaign called #NotMyPresident and encourage like-minded Chinese students at universities around the world to print out our posters and put them up on their campuses. Within a month, Chinese students at more than 30 schools around the world had joined us, including at Cornell University, London School of Economics, University of Sydney, and the University of Hong Kong, expressing their disapproval for a Chinese president for life. After Foreign Policy’s initial coverage, Western media outlets such as the New York Times and the BBC featured our campaign. But we had to be extremely cautious in making our voices heard. Putting up posters is a common political activity on college campuses in democratic countries. But for Chinese studying at these same campuses, it is dangerous to publicly express opinions that go against the party line.

 

Foreign and Military Affairs

Chinese aircraft carrier forming all-weather combat capability with successful night takeoff and landing - People's Daily Online Several media outlets, including South China Morning Post and the Diplomat, reported that a third aircraft carrier, Type 002, is under construction at the Shanghai Jiangnan Shipyard Group, although it has yet to be officially confirmed. Song told the Global Times that, according to the development stage of China's weapons and equipment, equipping the present carrier and developing future carriers usually take place concurrently. Following such a schedule, he is convinced that the completion of a sea trial of the second carrier signifies that the third aircraft carrier may have completed its research phase and has stepped into the construction stage.

President to lead summit, with focus on security - China Daily President Xi Jinping will chair the 18th Shanghai Cooperation Organization Summit in Qingdao, Shandong Province, on June 9, State Councilor and Foreign Minister Wang Yi said on Monday.  Leaders of all SCO member and observer states, as well as heads of some major international organizations, will attend the summit, Wang said at a news briefing in Beijing. It will be the first summit since the SCO accepted India and Pakistan as member states in Astana last year.

Rethinking Security: China and the Age of Strategic Rivalry - Canada.ca This report is based on the views expressed during, and short papers contributed by speakers at, a workshop organised by the Canadian Security Intelligence Service as part of its academic outreach program "China’s growing influence is a delicate puzzle for the international community, which must welcome a transformed power without acquiescing in the destruction of the global diplomatic infrastructure. China’s aggressive diplomacy and insistence on asymmetrical trade are particularly challenging for countries like Canada which seek mutually positive trade relationships. Beijing still faces considerable hurdles. With the abolition of the two-term limit on the presidency, Xi Jinping will guide China for the foreseeable future. Authoritarian rule facilitates determined action, but this can translate into decreased sensitivity to criticism, vulnerability to corruption, and a restricted flow of information vital to sound decision-making. The inter-mingling of private and public economic enterprises has led to inefficiency and corruption that persist. One of many fluctuating variables defining the new global system, China’s continued rise is not inevitable and may yet elicit international action both to contain and accommodate its ambitions. For now, its dominance strategy appears relentless and irresistible.

薛惠锋:太空领域与网信领域是军民融合的重要阵地--一带一路全媒体平台--人民网 Xue Huifeng, president of the China Academy of Aerospace Systems Science and Engineering in Beijing tells People's Daily that space and cyber domains are key fronts for civil-military integration

Xinhua, UNOSSC sign MOU to advance cooperation - Xinhua Xinhua News Agency and the United Nations Office for South-South Cooperation (UNOSSC) on Tuesday signed a memorandum of understanding in Beijing to advance cooperation. Editor-in-chief of Xinhua News Agency He Ping and Jorge Chediek, the UN secretary-general's envoy on South-South cooperation and director of UNOSSC signed the memorandum. During their meeting, He said South-South cooperation was a great initiative of partnership and self-improvement for developing countries.

Spotlight: China welcomes all UN member states to jointly utilize its space station - Xinhua China announced Monday that all member states of the United Nations are welcome to cooperate with China to jointly utilize its future China Space Station (CSS). "CSS belongs not only to China, but also to the world," said Shi Zhongjun, China's ambassador to UN and other international organizations in Vienna.

Japan says it has detected apparent Chinese ship breaking North Korea sanctions | Reuters Japan on Tuesday said it had detected what appeared to be a Chinese-flagged vessel, 350 km (218 miles) off Shanghai, conducting illegal transfers to a North Korean ship. “Following a comprehensive assessment, the government of Japan strongly suspects that they conducted ship-to-ship transfers banned by UNSCR,” Japan’s Ministry of Foreign Affairs said in a press release, referring to U.N. Security Council resolutions.

Weibo diplomacy and censorship in China | Australian Strategic Policy Institute | ASPI This ASPI ICPC report provides an in-depth look at the increasingly sophisticated censorship methods being used on foreign embassies on Weibo and provides a series of recommendations for foreign governments, including Australia, to address these policy challenges.

Invitations offer wealthy Chinese access to President Trump at fundraiser - The Washington Post The letter, circulated to dozens of wealthy entrepreneurs in China last week, looked official. Topped with the insignia of a real Republican committee raising money for the party and President Trump’s reelection campaign, it purported to offer a handshake and a one-on-one photo with the president for $100,000 — a “VVIP” trip “to be remembered for a lifetime.” The invitation, which Republican Party officials say they had nothing to do with, was not the only such offer. At least two other China-based companies circulated similar solicitations in the past week, offering access to Trump at an official fundraiser in Dallas on May 31, and charging two or three times the price of a ticket.

US flight instructors kidnapped and tried to deport trainee to China, say police | The Guardian California flight school worker allegedly claimed it was because student pilot’s English wasn’t good enough

China steps up pace in new nuclear arms race with US and Russia as experts warn of rising risk of conflict | South China Morning Post Between September 2014 and last December, China carried out around 200 laboratory experiments to simulate the extreme physics of a nuclear blast, the China Academy of Engineering Physics reported in a document released by the government earlier this year and reviewed by the South China Morning Post this month. In comparison, the US carried out only 50 such tests between 2012 and 2017 – or about 10 a year – according to the Lawrence Livermore National Laboratory.

In China, Angela Merkel Meets Wife of Detained Human Rights Lawyer - RFA Merkel met with Xu Yan, wife of rights attorney Yu Wensheng, who was initially placed under criminal detention on Jan. 19, on suspicion of “obstructing public servants in the course of their duties," Xu and rights activists said via social media.

 

Hong Kong, Macao

Liaison Office indirectly owns most bookshops - RTHK RTHK has confirmed that Beijing's Liaison Office in Hong Kong has indirect ownership of a local publishing conglomerate that runs more than half of the bookshops in the city. An investigation by the station's current affairs programme "Hong Kong Connection" found the Liaison Office has control of Sino United Publishing Holdings Limited which has 53 branches and is the owner of more than 30 publishers in Hong Kong.

 

Taiwan

Taiwan welcomes Haiti president as China chips away at allies | Reuters Haiti President Jovenel Moise, along with a 30-member delegation, is visiting amid concern that his country could be among the next to jump ship and establish ties with China. Earlier in May, the Dominican Republic, which shares the island of Hispaniola with Haiti, severed ties with Taiwan by formally recognising China.

China Gives Airlines Extension on One-Nation Rule for Taiwan - Bloomberg Air France-KLM and Deutsche Lufthansa AG are among airlines that have made changes to their websites, while those that have received or applied for an extension include United Continental Holdings Inc. and ANA Holdings Inc. The Civil Aviation Administration of China said late Friday that all 44 carriers that were asked to modify their Taiwan references will do so. Eighteen made the required changes before a May 25 deadline, and the rest asked for extensions and were given until as late as July 25 to comply, the regulator said.

 

Tech And Media

Alibaba Group sells health assets to HK-listed affiliate for $1.4bn - FT $$ Alibaba Group said it has agreed to sell medical device and healthcare product categories from Tmall Pharmacy to its Hong Kong-listed healthcare affiliate in return for HK$10.6bn ($1.4bn) in newly issued shares in the latter company. Upon completion of the deal, Alibaba Group will own a 56.2 per cent stake in Alibaba Health Information Technology, up from 48.1 per cent previously  //  Comment: Alibaba Health's shares jumped over 50% in the days before the announcement, sure looks and smells like there may have been some front-running of the deal

Tencent-Backed Electric Car Startup NIO Files for IPO - Bloomberg The Shanghai-based carmaker has submitted an initial confidential filing with the U.S. Securities and Exchange Commission, according to the people, who asked not to be identified because the information is private. The share sale could raise around $2 billion, though preparations are at an early stage and the size of the deal may change, the people said.

 

Energy, Environment, Science And Health

Major Chinese river starts to run dry after months without rain | South China Morning Post The Songhua River, which flows through the centre of Harbin, the capital of Heilongjiang, is starting to dry up in places, forcing companies that run river cruises to halt operations. The water level has been falling continuously this year, Xinhua news agency reported, with little rain in the spring time. The city has seen no rainfall for the past month.

 

Agriculture And Rural Issues

Test planting of saltwater rice begins - China Daily Renowned Chinese agricultural scientist Yuan Longping and his research team planted saltwater-tolerant rice on six plots of saline-alkali land on Monday. It was the first time this kind of rice has been planted simultaneously on different types of such land, a major step in exploring its commercial viability. The planting sites are in Kashgar, in the Xinjiang Uygur autonomous region; Daqing, Heilongjiang province; Dongying and Qingdao, Shandong province; Wenzhou, Zhejiang province; and Yan'an, Shaanxi province. The sites represent virtually every type of saline-alkali land in China.