Trump threatens 200B more in tariffs; Kim Jong Un back in Beijing; US Senate wants to kill ZTE; Xiaomi cuts IPO valuation & postpones CDR; Income tax cut coming; Huayi Brothers may be in trouble

It is an unhappy Tuesday for global markets, most of which are down sharply after the announcement late Monday that President Trump directed the US Trade Representative to "identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%". The announcement did not specify timing but the size of the threatened escalation (if not the timing; yesterday's newsletter said "we may even see a US announcement of the next $100 Billion tariffs imminently") has spooked markets. Trump may see it as another negotiating tactic but the likely outcome keeps getting uglier and uglier as Beijing is unlikely to cave quickly if at all to US pressure.

China's response via a Ministry of Commerce spokesman should send chills down the spine of every US executive with operations in the PRC:

"China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back"

Those "qualitative" measures may include more inspections, production delays, administrative penalties, encouragement to use non-America products and a nasty nationalist backlash against America and its goods. 

China does not import enough from the US to match the threatened tariffs on $250B worth of PRC exports. One way Beijing could get anywhere near matching the $250B is by going after PRC operations of US firms. Those measures would hit PRC domestic employment, but I would not bet against them doing it anyway. Between nationalism and the ever more efficient security services China may have more capacity to withstand a trade war with the US than many economists and policymakers think. 

It is important to reiterate that we are seeing the real Trump approach to China, one that started to come into focus early this year with what I called in the January 22 newsletter the "Trump strategy triad"--the National Security Strategy, the National defense Strategy and the latest USTR report on China's WTO compliance.

And as I wrote yesterday, now that Trump may believe he has disintermediated Beijing from the US-DPRK negotiations enough so that he no longer needs to subordinate the other thorny issues to get Beijing’s “help” on North Korea the possibility of a much nastier turn in US-China relations over not just trade and investment has increased significantly. He may be wrong, but it looks like the gloves are finally coming off and there are few clear pathways to de-escalation.

Meanwhile, Kim Jong Un is back in Beijing, no doubt to brief Xi on his summit with Trump and to extract what he can from China, It seems interesting that this time his trip was announced as it was starting, while in the past official media was silent until after he had left the country. Is Kim feeling more confident, and/or Beijing feeling more confident about the relationship?

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The Essential Eight

1. US-China relations heading over a cliff?

In Tit-For-Tat, Trump Threatens More Tariffs Against China - AP:

President Donald Trump directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports on Monday as the two nations moved closer to a potential trade war.

The tariffs, which Trump wants set at a 10 percent rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries..

"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," Trump said in a statement Monday announcing the new action. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."

Trump added: "These tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced."

China MOC spokesperson makes remarks on White House trade statement - Xinhua:

A spokesperson of China's Ministry of Commerce (MOC) said Tuesday that if the United States loses its rationality and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back...

"Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community," the spokesperson said.

"The trade war waged by the United States is against both the law of the market and the development trend of today' s world. It undermines the interests of the Chinese and American people, the interests of companies and the interests of the people all over the world," said the spokesperson.

商务部新闻发言人就美白宫6月18日声明发表谈话 

发言人指出,美方发起贸易战,违背市场规律,不符合当今世界发展潮流,伤害中美两国人民和企业利益,伤害全世界人民利益。中方的应对既是为了维护和捍卫国家和人民利益,也是维护和捍卫自由贸易体制,维护和捍卫人类共同利益。无论外界环境如何变化,中方都将按照既定节奏,坚持以人民为中心,坚定推进改革开放,坚定推进经济高质量发展,加快建设现代经济体系。

USTR Robert Lighthizer Statement on the President’s Additional China Trade Action | United States Trade Representative:

“I support the President’s action.  The initial tariffs that the President asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese.  It is very unfortunate that instead of eliminating these unfair trading practices China said that it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers, and businesses.  At the President’s direction, USTR is preparing the proposed tariffs to offset China’s action.”

Pompeo Calls China’s Appeals for More Trade Openness a ‘Joke’ - Bloomberg:

Secretary of State Mike Pompeo amplified President Donald Trump’s tough line in a brewing trade war with China in a speech on Monday, saying U.S. action was long overdue and calling Chinese appeals for greater economic openness “a joke.”

“Chinese leaders over these past few weeks have been claiming openness and globalization, but it’s a joke,” Pompeo told the Detroit Economic Club. “Let’s be clear. It’s the most predatory economic government that operates against the rest of the world today. This is a problem that’s long overdue in being tackled.”

Comment: Pompeo met Xi last Friday in Beijing

Xi Can Make Life Difficult for U.S. Companies After Trump Threat - Bloomberg:

American businesses from Apple Inc and Walmart Inc to General Motors Co. all operate in China and are keen to expand. That hands Xi room to impose penalties such as customs delays, tax audits and increased regulatory scrutiny if Trump delivers on his threat of bigger duties on Chinese trade.

The total amount of U.S. goods exports to China only amounted to $130 billion last year, meaning Trump’s potential tariffs on $250 billion or more of Chinese imports can’t be matched, at least directly. But if you measure both exports and sales of U.S. companies inside China, the U.S. has a surplus of $20 billion with China, according to Deutsche Bank AG.

China Calls New U.S. Tariff Threat ‘Extortion’ - Caixin Global:

Because China imports far less from U.S. than the U.S. imports from China, some have questioned whether Beijing has the ammunition for tit-for-tat retaliation in a trade war.

However, Beijing could simply jack up the tariff rate on American products, which could make inbound shipments of some of the goods to become economically unviable because prices would be too high for Chinese consumers, said Tu Xinquan, dean of the China Institute for WTO Studies at University of International Business and Economics.

Chinese Shares Swoon on Brewing Trade War - Caixin Global:

The Shanghai Composite Index plunged 3.78% to 2,907.82 — the gauge’s worst drop since Feb. 9. More than 1,000 stocks, or one-third of those listed, dropped by the 10% daily limit on both the Shanghai and Shenzhen exchanges, sending the benchmark below the 3,000 point mark for the first time since September 2016...

Among large caps, electronics-makers and financial companies led the losses, but small caps were hit harder. The Shenzhen Component Index, which tracks many small and midsize technology companies, plummeted 5.31% on the day.

Trump Aide Says U.S. Economy Can Absorb Hit From China Tensions - Bloomberg:

Now is the right time to pressure China on its trade policies because the U.S. economy is strong enough to absorb uncertainty arising from bilateral tensions, White House Council of Economic Advisers Chairman Kevin Hassett said Monday...

“When uncertainty is high, that’s difficult for Americans, and it does depress activity a little bit,” Hassett said in an interview on CNBC. “If right in the middle of a financial crisis we added some uncertainty over exactly how are these negotiations going to work out, then it would be pretty harmful then. But right now the economy has got a lot of forward momentum.”

This new paper is interesting- China's Use of Coercive Economic Measures | Center for a New American Security:

In the past decade, China has expanded its set of such economic instruments to include sticks, not just carrots. China has punished countries that undermine its territorial claims and foreign policy goals with measures such as restricting trade, encouraging popular boycotts, and cutting off tourism. These actions have caused significant economic damage to U.S. partners such as Japan and South Korea. The measures may also have long-term effects in deterring and shaping countries’ foreign policy interests that go well beyond the short-term economic costs...

As China’s economy and its economic statecraft become more sophisticated, Beijing is sharpening and expanding its coercive economic toolkit. Its growing set of tools looks quite different from the wide array of U.S. tools. Washington relies on formal, published sanctions, trade controls, or investment restrictions. Instead, Beijing prefers approaches that do not legally link a foreign policy dispute to the coercive measures, creating public deniability and greater optionality for escalation and de-escalation. China typically imposes economic costs through informal measures such as selective implementation of domestic regulations, including stepped-up customs inspections or sanitary checks, and uses extralegal measures such as employing state media to encourage popular boycotts and having government officials directly put informal pressure on specific companies.


2. Will Apple bear the brunt of "qualitative measures"?

How Apple’s Tim Cook Became Tech’s Top Diplomat - The New York Times-by Jack Nicas and Paul Mozur:

The Trump administration has told Mr. Cook that it would not place tariffs on iPhones, which are assembled in China, according to a person familiar with the talks who declined to speak on the record for fear of upsetting negotiations. But Apple is worried China will retaliate in ways that hamstring its business, according to three people close to Apple who declined to be named because they were not authorized to speak publicly.

Apple fears “the Chinese-bureaucracy machine is going to kick in,” meaning the Chinese government could cause delays in its supply chain and increase scrutiny of its products under the guise of national-security concerns, according to one person close to the company. Apple has faced such retaliation before, another person said, and Reuters reported Ford vehicles are already facing delays at Chinese ports.

Mozur added some more details in a Twitter thread:

Paul Mozur@paulmozur

Important to understand Apple’s China business has grown far larger than anyone could have anticipated. Even the optimists in Cupertino. This is a core part of Tim Cook’s legacy. People close say his deep China supply chain experience was a massive help in managing China’s gov’t.

June 19, 2018
Paul Mozur@paulmozur

But Apple still has big risks. Security check that held up the iPhone 6 likely tit-for-tat. Privacy protection also often viewed suspiciously by Beijing which wants user data. It’s unclear the world’s largest company can manage a standoff between its two biggest economies.

June 19, 2018


3. ZTE may still be killed

Senate rejects Trump’s rescue of Chinese firm ZTE - POLITICO:

The Senate voted Monday to reimpose the U.S. ban on Chinese telecom giant ZTE, in a rebuke to President Donald Trump and his efforts to keep the company in business.

The provision targeting ZTE was part of the National Defense Authorization Act, a must-pass defense spending bill that cleared the Senate by a vote of 85-10. It must now be reconciled with the House version of the measure, which takes a narrower approach to ZTE...

In a sign of the broad backing for the effort, Republican Sens. Tom Cotton of Arkansas and Marco Rubio of Florida as well as Democrats like Minority Leader Chuck Schumer of New York and Elizabeth Warren of Massachusetts pushed for the ZTE ban to be included in the defense bill.

The White House has been scrambling to avert a showdown on the issue, dispatching Commerce Secretary Wilbur Ross to Capitol Hill last week and warning that any congressional action on ZTE should respect “the separation of powers.”

ZTE Stock Nosedives After U.S. Senate Votes to Reinstate Ban - Caixin Global:

Shares of ZTE had plunged by 25.3% in Hong Kong by midday break, while its Shenzhen-listed shares slid by the 10% daily limit soon after the trading kicked off. ZTE has lost 61.5% of its value in Hong Kong and 34.4% in Shenzhen after it resumed trading on Wednesday.

Comment: And the Qualcomm-NXP deal is not officially approved by Beijing...


4. Kim Jong Un is in Beijing

Kim Jong Un visits China - Xinhua:

Kim Jong Un, chairman of the Workers' Party of Korea and chairman of the State Affairs Commission of the Democratic People's Republic of Korea, visits China from June 19 to 20.

North Korea’s Kim Jong-un in China for two-day trip ‘to brief Xi Jinping on Donald Trump summit’ | South China Morning Post:

Kim will be in the Chinese capital for two days on his third visit to China, after a secret first trip to Beijing in late March and a second one to China’s northeastern coastal city of Dalian in early May.

A North Korean freight plane, which transported Kim’s limousine to Singapore, landed in Beijing earlier on Tuesday.

Nikkei Asian Review, citing unidentified sources, reported on Tuesday that Kim was expected to brief Chinese President Xi Jinping on his summit with Trump and discuss a future negotiating strategy.

The Tuesday CCTV Evening News had two reports on Kim's visit:

The first report was on his arrival—习近平举行仪式欢迎金正恩访华_CCTV: 

中共中央总书记、国家主席习近平19日下午在人民大会堂北大厅举行仪式,欢迎当日抵京访华的朝鲜劳动党委员长、朝鲜民主主义人民共和国国务委员会委员长金正恩。 

习近平总书记夫人彭丽媛,中共中央政治局常委、中央书记处书记王沪宁,中共中央政治局委员、中央书记处书记、中央办公厅主任丁薛祥,中共中央政治局委员、中央外事工作委员会办公室主任杨洁篪,国务委员兼外交部长王毅等出席欢迎仪式。 

陪同金正恩访华的有委员长夫人李雪主,朝鲜劳动党中央副委员长崔龙海,内阁总理朴凤柱及朝党中央国际部部长、统一战线部部长、科教部部长、人民武力相、外务相等。 

Kim brought his wife, the listed members of the Chinese side included Xi Jinping, Peng Liyuan, Wang Huning, Ding Xuexiang, Yang Jiechi and Wang Yi. 

The second was on his meeting with Xi-习近平同朝鲜劳动党委员长金正恩举行会谈. Everyone looks happy and friendly, after the meeting Xi threw a banquet for Kim and they watched a performance.  

Kim Jong-un Returns to China, This Time With Leverage - The New York Times:

Mr. Kim’s visit comes as a trade conflict between the United States and China is intensifying, giving him an opening to play one power against the other — a tactic he appears ready to use as the United States presses him to dismantle his nuclear arsenal.

“The visit is taking place against the backdrop of the upcoming full-blown trade war,” said Cheng Xiaohe, a Korea expert at Renmin University in Beijing.


5. Income tax cuts to stimulate consumption?

China's top legislature reads draft amendment to individual income tax law - Xinhua:

The draft amendment increases the minimum threshold for individual income tax from 3,500 yuan (about 544 U.S. dollars) per month to 5,000 yuan.

The draft amendment adds special additional deduction for expenditures on child education, continuing education, serious illness, housing loan interest and housing rent.

38年来迎第七次修正 个税法修正案草案提请最高立法机关审议 

China set to cut tax rates for middle classes in bid to stimulate consumer spending | South China Morning Post:

The changes come at a time when consumer spending is under serious pressure – retail sales in May slowed to their lowest level in 15 years – as Chinese households feel the pinch of rising mortgage bills and falling wages.

At the same time, the government’s revenue from personal income tax in the first five months of the year rose 20.6 per cent from the equivalent period of 2017...

If approved, the amendments will be the first significant changes to China’s personal tax system for seven years. Lawmakers and political advisers have long called for consumers’ tax liabilities to be lightened as a way to stimulate consumption.


6. Xiaomi cuts valuation and postpones CDR listing

It looks more embarrassing for Xiaomi than for the CSRC. The Hong Kong listing is still on but the expected valuation is now much closer to the last publicly announced financing round valuation of $45 billion. 

China's Xiaomi cuts valuation after pulling mainland offering: sources | Reuters:

Chinese smartphone maker Xiaomi has lowered its likely valuation to between $55 billion and $70 billion following its decision to delay its mainland share offering until after its Hong Kong IPO, three sources with direct knowledge of the matter said.

The delay was triggered by a dispute between the company and regulators over the valuation of its China depositary receipts (CDRs), sources said, casting doubt on Beijing’s efforts to lure foreign-listed Chinese tech giants back home...

In Xiaomi’s case, officials from the China Securities Regulatory Commission (CSRC) wanted the CDRs to be priced below the level the company was targeting, according to two sources.

Commission officials were concerned that a too-high valuation would lead to poor performance in the secondary market, damping investor enthusiasm for future CDR sales, the sources said.

Xiaomi abandons plans for $5bn China depositary receipt | Financial Times:

According to people familiar with the CDR deliberations, some of the obligations demanded by the China Securities Regulatory Commission were seen as onerous, including holding directors responsible for losses due to omissions and misleading statements.

Xiaomi’s CDR issuance documents state the company and directors confirm there are no false records, misleading statements or big omissions in the prospectus. It said that Xiaomi must accept any legal responsibility for the accuracy, completeness and timeliness of the statements contained in it. Finally, the board and top management are required to compensate for investor losses incurred due to any misrepresentations in the CDR prospectus, according to the documents.

Xiaomi postpones planned CDR offering - XInhua:

Chinese tech giant Xiaomi will postpone its planned share offerings via China Depositary Receipts (CDRs) issuance in the mainland market, the country's securities regulator said Tuesday.

The Beijing-based smartphone maker has applied to suspend the review of its CDR issuance application, as the company has decided to complete its listing in Hong Kong first and then "pick an opportunity" to issue CDR in the mainland market, said the China Securities Regulatory Commission (CSRC).

The CSRC said it respects Xiaomi's decision and has cancelled the review on its CDR application scheduled for Tuesday.


7. Global Internet with Chinese characteristics?

Beijing Wants to Rewrite the Rules of the Internet - The Atlantic - Samm Sacks:

ZTE and Huawei have become flashpoints in the Trump administration’s confrontation with Beijing over cybersecurity, investment, trade, and technological leadership. All this comes as the administration slapped tariffs on $50 billion in Chinese goods last Friday. But amid the hysteria surrounding these two companies, we may be missing a less obvious but potentially more impactful challenge: China’s ambitions to radically overhaul the internet.

In late April, just days after the Commerce Department announced the denial order against ZTE, Xi Jinping, the president of China, gave a major speech laying out his vision to turn his country into a “cyber superpower.” His speech, along with other statements and policies he has made since assuming power, outlines his government’s ambition not just for independence from foreign technology, but its mission to write the rules for global cyber governance—rules that look very different from those of market economies of the West. This alternative would include technical standards requiring foreign companies to build versions of their products compliant with Chinese standards, and pressure to comply with government surveillance policies. It would require data to be stored on servers in-country and restrict transfer of data outside China without government permission. It would also permit government agencies and critical infrastructure systems to source only from local suppliers.

China, in other words, appears to be floating the first competitive alternative to the open internet—a model that it is steadily proliferating around the world.


8. Film industry tax and other troubles to worsen?

Huayi Bros.’ Dennis Wang to Buy Stock, Makes Reassurances – Variety:

Dennis Wang, founder and chairman of Chinese film conglomerate Huayi Brothers Media, said Monday that he would invest $16 million (RMB100 million) in the company over the next year. The move is intended to bolster confidence after the company was recently rocked by a celebrity scandal. Wang, the elder and more reclusive of the two brothers who still head the company, made the announcement in a regulatory filing. He owns 22% of the company, and is famous for having spent $61 million on a painting by Vincent van Gogh in December 2014.

Huayi needs to reassure shareholders nervous that Cui Yongyuan is turning over allegations against the company and executives to regulators and the CCDI--3天期限已到,崔永元果然出手,首个目标中纪委,马云出:

今晚8点半,崔永元发布了一条置顶微博,声称要将材料交给证监会,国税局,公安部,中纪委。

在这条微博里,崔永元还放上了2张图片,一份是手机打的短文。

一份是一叠材料,其中一份上写着北京华谊兄弟,看来这就是崔永元之前所说的一抽屉材料。

Grab some popcorn, if this progresses things will get very interesting as it may sweep up some very powerful people...


Business, Economy, Finance And Trade

China central bank says banks' reserve ratios should be cut, fuels talk of easing | Reuters China should appropriately cut banks’ reserve requirement ratios (RRR) to help ease their burdens, the central bank said in a working paper on Tuesday, fanning expectations of an imminent policy move to support the economy as U.S. trade threats grow. Fears of a full-blown trade war have added to concerns about the outlook for the world’s second-largest economy, following weaker-than-expected growth data for May as a three-year regulatory crackdown starts to weigh on business activity. The People’s Bank of China surprised markets earlier in the day by lending 200 billion yuan ($31 billion) to financial institutions via its medium-term lending facility (MLF), highlighting concerns over liquidity and the potential economic drag on trade.

China set to release new negative list for foreign investment - XInhua China has completed the revision of new negative list for market access of foreign investment and will make it public soon, China Securities Journal reported on Tuesday. Restrictions on energy, resources, infrastructure, transportation, commerce circulation, and professional services will be removed or loosened in the upcoming list, according to the report. The country has already announced measures to further liberalize the finance and automobile sectors. The new negative list will have two sections, one for nationwide implementation and one for pilot free trade zones, it reported. Besides opening-up measures in 2018, the new negative list will unveil further measures for the next few years and there will be a transitional period for some industries.

 

Politics, Law And Ideology

Xi's example in his youth inspires students - China Daily Thousands of students at Shaanxi Normal University have drawn inspiration from President Xi Jinping's seven years as an "educated youth" in the small village of Liangjiahe in Shaanxi province. The university opened a compulsory course in September on Xi's seven years of service in Liangjiahe to help students learn how the young Xi Jinping grew up in adversity.

人民日报:尊重和保障宗教信仰自由的中国实践--观点--人民网 People's Daily page 7 June 19 piece by "Zong Yan 宗 言" (a pseudonymous commentator on religious affairs?) China's practice of respecting and protecting religious freedoms.  //  习近平同志指出,积极引导宗教与社会主义社会相适应,一个重要任务就是支持我国宗教坚持中国化方向。只有坚持中国化方向的宗教,只有实现了中国化的宗教,才能更好与我国社会主义社会相适应,在社会发展进步中发挥积极作用。...我们始终坚持推进宗教中国化是宗教界自己的事情,注重发挥宗教界的主体作用,调动他们的积极性和主动性,引导和帮助他们把这件事做好,推动宗教界在中国化道路上不断迈出新步伐。

人民日报大家手笔:把握和传承好“变则通”思想--观点--人民网 谈到中华民族精神的构建,人们经常提到《易传》上的两句话:“天行健,君子以自强不息”“地势坤,君子以厚德载物”。这两句话就包含着“变则通”思想。要“载物”,要“自强不息”,就必须适应不断变化的自然与社会,不断改变自己,不断改变社会。中国历史发展进程表明,历代仁人志士无不是在变革创新中为社会发展开辟道路的。中华民族精神中这种变革创新精神的源头,可以说就是先秦时代的“变则通”思想。   “变则通”来源于《易·系辞》下篇:“易,穷则变,变则通,通则久。是以自天祐之,吉无不利。”这段话起初只是对《易》的解说,所谓“变则通”是讲《易》的卦象和理念是随着时代变化而变化的,只有“变”才能解释各种现象、说明各种道理。《易》所包含的“变则通”理念是对长期社会实践的总结,是上古时代中国人民智慧的结晶,成为中华民族精神的重要内涵。

革命先驱 千秋忠烈--时政--人民网 long piece in June 19 People's Daily commemorating the 120 anniversary of the birth of Zhang Tailei, leader of the 1927 Guangzhou Uprising, udring which he was killed...part of the ramped up propaganda around martyrs and heroes, which seems to be intended in part to inspire a whole new generation to sacrifice themselves for the motherland, which may not be so bad except that so many of the heroes and martyrs shed blood in struggles and combat...

管监狱反变阶下囚:盘点监狱管理系统落马官员_政经频道_财新网 Caixin story on prison system officials who became prisoners themselves after getting busted for corruption and abuse of power

 

Foreign and Military Affairs

Cambodian PM Hun Sen meets senior Chinese official on bilateral ties - Xinhua Cambodian Prime Minister Samdech Techo Hun Sen met with Chinese State Councilor and Defense Minister Wei Fenghe here on Monday. Viewing China as a good and true friend, Hun Sen said the friendship between Cambodia and China has withstood the test of time and grown even stronger. The prime minister expressed gratitude for China's support to Cambodia's social economic development and building of national defense and military forces

Xi, Morales hold talks, agree to establish China-Bolivia strategic partnership - Xinhua Chinese President Xi Jinping and visiting Bolivian President Juan Evo Morales Ayma on Tuesday agreed that the two countries would establish a strategic partnership to promote greater development of bilateral relations at a new historical starting point 习近平同玻利维亚总统莫拉莱斯举行会谈; 两国元首一致决定 建立中玻战略伙伴关系 

Chinese Embassy Lashes Out Over Australian TV Segment – China Digital Times (CDT) According to a separate blog post, producers received an "aggressive, threatening and loud" phone call on June 12 from the head of media affairs at the Chinese Embassy in Canberra, who complained that footage of the Chinese Embassy in Vanuatu had been obtained illegally and without permission, including with an unauthorized drone overflight. 60 Minutes denies these accusations, claiming that it filmed the site legally from public space, and that its drone never passed over the embassy grounds. From Charles Wooley:

In Vietnam, distrust of government's China policy fuels protests | Reuters The demonstrations, which are technically illegal, sprung up for a second consecutive week on Sunday, stoked by fears that proposed coastal economic zones for foreigners would be beachheads for an invasion of Chinese businesses. The proposal makes no mention of China. But political analysts say Vietnamese minds were already made up, with popular Facebook posts reinforcing deep-rooted suspicion that Chinese interests are influencing state policy.

Chinese President Xi Jinping biggest promoter of Bollywood films, says envoy Chinese President Xi Jinping is the biggest promoter of Bollywood films and has watched Aamir Khan-starrer 'Dangal' on multiple occasions, Chinese envoy to India Luo Zhaohui said on Tuesday. The envoy said nowadays, practising yoga, watching Bollywood films and tasting Darjeeling tea have become fashionable among the Chinese youth.

China offers military credit to Cambodia | Jane's 360 China has agreed to provide Cambodia with more than USD100 million in aid to support the modernisation of the Royal Cambodian Armed Forces (RCAF), the government in Phnom Penh has announced. The funding will be provided through a defence co-operation agreement (DCA) signed by the two countries during Chinese defence minister Wei Fenghe’s two-day visit to Cambodia, which ended on 18 June.

China Says ‘Cold War Mentality’ Hurting Australia Ties Must End - Bloomberg China’s ambassador to Australia called for an end to a “Cold War mentality” that’s straining ties between the two nations, weeks after Beijing blamed its key trading partner for creating a diplomatic spat. “The two countries need to have more interaction and inclusiveness, with less bias or bigotry,” Cheng Jingye said in a speech in Canberra on Tuesday. “We need to see each other’s development and policy intentions from a more positive perspective, with less Cold War mentality.”

Malcolm Turnbull says media makes China-Australia relations look bad | Australia news | The Guardian Malcolm Turnbull has blamed the media and his political opponents for portraying the China-Australia relationship as troubled, claiming issues between the countries are being settled with mutual respect. Turnbull made the comments at the Australia China Business Council on Tuesday, amid tension about Australian competition with China for influence in the South Pacific and concern from China that it is being targeted by the Coalition’s foreign interference package.

 

Hong Kong, Macao

A lengthy jail term sends a message to Hong Kong’s rebellious youth - The riot act On June 11th a well-known activist, Edward Leung, was jailed under the Public Order Ordinance for six years for his role in the mayhem two years ago—the worst disorder on the streets of Hong Kong since the Cultural Revolution. A lesser-known co-defendant received a seven-year term. The two sentences were the longest meted out to any of the more than 100 people who have been prosecuted in connection with the episodes of 2014 and 2016.

 

Tech And Media

China Mobile, Intel and Huawei Complete 5G NR IODT to Bring the New eMBB Experience - Huawei Press Center China Mobile (CMCC), Intel and Huawei announced that the three parties completed 5G interoperability and development testing (IODT) in compliance with the latest 3GPP Release15 Standard frozen in March. This was the first multi-vendor 5G NR IODT with full protocol, full channel, and full procedure finished, which means that 5G network and 5G terminals from different vendors can not only perform functional tests, but also can further implement 5G service tests, support various enhanced Mobile Broadband services such as ultra-high-definition video and VR. This is a key step to end-to-end 5G commercialize system

 

Society, Art, Sports, Culture And History

Guo Yuhua: Notes from Beijing, 3 | Stephen Jones: a blog During my recent sojourn in Beijing, as well as my lecture series at Beishida and film screenings at People’s University and Peking University, it was a great inspiration to meet up again with the fine anthropologist Guo Yuhua 郭于华 (b.1956). She’s just done an interview for Ian Johnson (latest in a fine series for the NYRB; this earlier interview in Chinese is also instructive), so here I’d just like to add my own personal reflections on her extensive oeuvre, with further material on fieldwork. [1]

Tibet relocates villagers living in high-altitude nature reserve - Xinhua Residents from two villages located in Qiangtang national nature reserve at an altitude of more than 5,000 meters completed their two-day journey and settled at an area 27 kilometers from the regional capital Lhasa, at an altitude of 3,800 meters. "In the previous location, there are little oxygen and public facilities, and life expectancy is lower than the region's average," said Dzongga, deputy head of the regional forestry bureau. 西藏实施首个高海拔生态搬迁项目 

 

Energy, Environment, Science And Health

New findings may end Jurassic Park dinosaur controversy - ECNS Paleontologists have discovered evidence suggesting that dromaeosaurids lived together in groups, a conclusion that might put an end to a long-running dispute about the accuracy of the raptors depicted in the blockbuster film Jurassic Park, Beijing Youth Daily reported. Xing Lida, an associate professor at China University of Geosciences (Beijing), along with other experts, began researching rare trackways in Tancheng County, East China's Shandong Province, in April 2017, after they were first discovered by fossil enthusiasts in 2015

Local officials held accountable over environmental problems - Xinhua Inspectors have accepted more than 10,000 reports from the public about inefficiency in local government work of rectifying environmental problems since the end of May. Of these, around one-third had been dealt with by Thursday. Authorities have issued fines of 58.07 million yuan (about 9 million U.S. dollars), detained 58 people, and held 630 local officials responsible in 10 provincial-level regions including Hebei, Inner Mongolia, and Heilongjiang.

Checking China’s pollution, by satellite | MIT News Air pollution has smothered China’s cities in recent decades. In response, the Chinese government has implemented measures to clean up its skies. But are those policies effective? Now an innovative study co-authored by an MIT scholar shows that one of China’s key antipollution laws is indeed working — but unevenly, with one particular set of polluters most readily adapting to it. The study examines a Chinese law that has required coal-fired power plants to significantly reduce emissions of sulfur dioxide, a pollutant associated with respiratory illnesses, starting in July 2014. Overall, the researchers found that with the policy in place, the concentration of these emissions at coal power plants fell by 13.9 percent.

Officials in China's Hunan Slammed Over High School Tuberculosis Outbreak - RFA Health and education officials in the central Chinese province of Hunan have been strongly criticized over their handling of an outbreak of tuberculosis in high schools. Authorities have confirmed 29 cases of TB involving students at secondary schools in Hunan's Taojiang county since last August, while 38 students were offered preventive treatment. The government's management of the epidemic has been strongly criticized by parents and commentators, and seven health and education officials in the county government have been fired for dereliction of duty in the ensuing probe.

 

Agriculture And Rural Issues

Overuse of agricultural chemicals on China's small farms harms health and environment -- ScienceDaily The size of farms in China is a key contributor to the overuse of agricultural chemicals, and as a result they may be too small to be environmentally sustainable, a new study has found. The research -- conducted by a team from the Universities of Melbourne, Zhejiang, Fudan, Wuhan and Stanford -- is published today in the Proceedings of the National Academy of Sciences. The study found agricultural chemicals are often used inefficiently on small farms, leading to financial losses and serious local, regional and global pollution ranging from eutrophication (an excess of nutrients in bodies of water, often caused by run-off from the land) to particle pollution in the air and global warming.

 

Beijing

Beijing subways to get bio-ID system - China Daily The Beijing subway system plans to introduce bio-recognition technology at stations this year to improve transport efficiency and reduce costs, a senior manager said last week. Two bio-recognition technologies-facial recognition and palm touch-are being considered, said Zhang Huabing, head of enterprise development for Beijing Subway, the operator of most lines in the city, during the International Metro Transit Exhibition in Beijing on Thursday.

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