Trump blinks over investment and export restrictions; Xi meets Mattis; Moral hazard meets corruption investigation hazard; TV/Film star tax fun, Social credit system going global?

Good afternoon from Sinocism. Here are the top things I am watching about China today:

• President Trump backed off from the harshest of threatened investment restrictions, but no one should assume this fight is done;

• Xi Jinping appears to have given US Secretary of Defense Mattis another clear warning about PRC “red lines” when it comes to territorial claims. The South China Sea fait accompli appears complete and there is little the US or other claimants can do about it;

• Caixin reports that a local government in Hunan threatened banks with corruption investigations if they did not keep the loan tap flowing to the local government financing vehicles. The bankers still said no, for now…

I still think the recent Central Foreign Affairs Work Conference (CFAWC), as I discussed in Tuesday’s newsletter, deserves more attention.

Former Australian Prime Minister (and current Asia Society Policy Institute President and Sinocism subscriber) Kevin Rudd analyzed the CFAWC in a speech on June 26 to the …