Yesterday’s newsletter had an as yet undetermined formatting error that garbled all the Chinese in email format. Thanks for everyone who wrote in to tell me. If in the future this happens again try clicking on the headline in the body of the email to view the newsletter online.
The latest episode of this season’s “Trade Wars” is now filming in DC. There were some conflicting leaks overnight about whether or not Vice Premier Liu He would leave today instead of tomorrow as planned, and whether or not there is still hope of even a small, incremental deal. President Trump shot down part of that in a tweet:
The markets have taken that as a positive sign. I assume we will find out what happened when President Trump meets in the Oval Office with Liu He Friday, or when he decides to tweet again. Until then I will enjoy reading and hearing the various claims about where things stand but am taking them all with a grain of salt.
The NBA preseason game between the Los Angeles Lakers and Brooklyn Nets went on as scheduled today, with Joe Tsai’s Nets beating the Lakers 114-11. Not canceling the game is positive, but there are no signs of a resolution to the bigger issues.
The official propaganda about the NBA mess is now relatively muted and I am hearing that websites and apps have been told to tone down the coverage, so it looks like the authorities are trying to keep things in check. That could be due to the trade talks today and tomorrow, fears of the nationalist rage getting out of control, and/or a sign they want to leave space for a more constructive resolution.
A bipartisan group of US Senators and Representatives reduced the NBA’s scope for compromise, while perhaps also giving it some official cover, with a scathing letter to NBA Commissioner Adam Silver:
Unless American businesses aggressively confront this intimidation campaign, the Chinese government will increasingly punish free speech outside China’s borders. The most common method is to threaten access to the growing Chinese domestic market for any international company or organization that criticizes, or allows its employees to criticize, Chinese government policies. If not resisted, this pressure could result in American and multinational companies making employment conditional on silence regarding topics deemed sensitive by the Chinese Communist Party. This is an outcome that Americans reject, and one that you should reject – especially given that the NBA represents a unique brand for which there is no competition, inside or outside China. You have more power to take a stand than most of the Chinese government’s targets and should have the courage and integrity to use it. It’s not unreasonable to expect American companies to put our fundamental democratic rights ahead of profit — the very rights that have fostered their success and our nation’s wealth.
Do the relevant authorities in Beijing realize how damaging this episode may be to China in the US?
Thanks for reading.
Today’s top items
Chinese Vice-Premier Liu He said on Thursday that China is willing to reach agreement with the United States on matters that both sides care about so as to prevent friction from leading to any further escalation, the state news agency Xinhua reported.
Liu, China’s top trade negotiator, made his comment in Washington when he met president of the US-China Business Council Craig Allen, executive vice-president and head of international Affairs, US Chamber of Commerce Myron Brilliant and new IMF Managing Director Kristalina Georgieva.
The three officials are “trying to find a path toward the bigger deal by making progress in market access, making progress on intellectual property protection in some other critical areas,” Brilliant told reporters on a conference call. “I believe that there’s even the possibility of a currency agreement this week. I think that could lead to a decision by the U.S. administration to not put forth a tariff rate hike on Oct. 15.”
In a meeting last week, President Trump gave the green light to begin approving the licenses, which will allow a select few American companies to bypass a ban his administration placed on Huawei this year...
Approving licenses that allow American companies to supply so-called general merchandise to Huawei is likely to be seen as a gesture of good will, though its practical effects may be limited. Despite the ban, many American companies have continued supplying goods to Huawei by finding ways to avoid labeling goods as American-made and channeling more goods produced outside the United States to the company.
Officials plan to raise the issue of penalties against the Dalian units of China COSCO Shipping Corp., which the U.S. accuses of knowingly violating restrictions on carrying Iranian petroleum, said the people, who asked not to be identified discussing a private matter. Four other Chinese entities were also sanctioned last month along with Cosco. The people did not say if the Chinese delegation planned to seek relief for those companies.
But the “financial war” may be heating up - Trump Administration Weighs Economic Escalation Against China - The New York Times
Administration officials, including members of the National Security Council, have begun pressing the Securities and Exchange Commission to tighten its checks on Chinese firms. They are also looking for ways to reduce the exposure of American retirement funds to certain Chinese companies.
Many of those efforts have been proceeding independently from the trade talks — which resume again this week — and are fueled by longer-term considerations of China’s economic and security threats. Some White House advisers now view those options as an additional lever to force China to make the kinds of deep economic concessions that have so far proved elusive in the talks, which have dragged on for more than a year...
According to a memo circulated within the White House and reviewed by The New York Times, the administration is studying a menu of actions that, if carried out, would most likely rattle the Chinese government.
The memo was drafted by Michael Pillsbury..
Other options go beyond financial scrutiny of Chinese companies. The memo describes the possibility of fostering deeper ties between the United States and Taiwan and disrupting the flow of capital between Hong Kong and mainland China if it is determined that Hong Kong’s autonomy is not being respected.
It also lays out legislation in Congress, which Mr. Trump has yet to endorse, that would impose sanctions on China for activity in contested areas of the South China Sea and crack down on Chinese-funded Confucius Institutes at American universities.
Michael Pillsbury, an informal White House adviser on China, said he received information about the business activities of Hunter Biden during a visit to Beijing in the same week Donald Trump urged China to probe the son of Joe Biden.
“I got a quite a bit of background on Hunter Biden from the Chinese,” Mr Pillsbury told the Financial Times.
Pillsbury now denies this, the FT reporter has posted their exchange on Twitter:
Apparently Mike ( ) denied on C-Span that he told me this (cs.pn/324FFP0). But here is the email exchange with him last night (and our story: on.ft.com/2nACn79).
Olivia Gazis @Olivia_Gazis“I got a quite a bit of background on Hunter Biden from the Chinese,” Mr Pillsbury told @FT. (Pillsbury is now apparently denying he said so.) https://t.co/heBEOuECOb
China buying US pork they desperately need is not a concession - African Swine Flu Drives China Imports of US Pork to Record High - Bloomberg
In the week ended Oct. 3, imports soared to 142,200 metric tons, U.S. Department of Agriculture data showed Thursday. For all of September, shipments were 19,900 tons.
People's Daily Zhong Sheng also weighs in on the latest US actions over Xinjiang, says meddling in China's internal affairs is destined to fail
For years, some politicians in Washington have been bent on weaving stories about Xinjiang, while turning a blind eye to the fact that China's policies in the area have achieved remarkable results in maintaining stability and prosperity in that region.
Quite different from what these politicians have been peddling around, the most urgent issue in Xinjiang is not about religion or human rights, but rather about combatting extremism and terrorism.
Editors at state news outlets have told reporters to avoid emphasizing the N.B.A. issue for fear that it might become overheated, according to interviews with three journalists on Thursday...
even the highly nationalistic Global Times tabloid stopped pushing populist indignation over the tweet.
“I think this issue will gradually de-escalate — Global Times will not push to keep it hot,” Hu Xijin, the newspaper’s top editor, wrote in an electronic response to a request for comment. “I also hope the American side won’t make any moves to escalate it.”
Approximately 3½ hours before tipoff, an NBA spokesman informed reporters there would be no media availability of any kind for either team and that commissioner Adam Silver's previously scheduled pregame news conference was canceled.
The stipulation, sources said, was at the behest of the Chinese government..
Many of the capacity crowd of 15,992 entered the arena toting hand-held Chinese flags that were being distributed outside. Before the starting lineups were announced, there was no singing of the national anthem -- not the American "Star-Spangled Banner" nor the Chinese "March of the Volunteers."
Therefore, we urge you to take the following steps:
1. Build upon your statement of October 8 in which you said “the NBA will not put itself in a position of regulating what players, employees, and team owners say or will not say on these issues” by clarifying that (a) NBA players, staff, partners, and fans in the United States are American persons—as such, you support their right to express their opinions no matter the economic consequences, and (b) while the NBA will follow Chinese law in China, the Chinese Communist Party must respect that the association will abide by American laws and principles in its global operations, including by not conditioning employment on any guidelines of expression on international political issues.
2. Suspend NBA activities in China until government-controlled broadcasters and government-controlled commercial sponsors end their boycott of NBA activities and the selective treatment of the Houston Rockets, and emphasize that the association will stand unified in the face of future efforts by Chinese government-controlled entities to single out individual teams, players, or associates for boycotts or selective treatment.
3. Reevaluate the NBA’s training camp in Xinjiang, where up to a million Chinese citizens are held in concentration camps as part of a massive, government-run campaign of ethno-religious repression.
4. Clarify in internal association documents that public commentary on international human rights repression—including in Tibet, Hong Kong, and Xinjiang—falls within expected standards of public behavior and expression.
“A complete ban would never work,” said Liu Zhe, a 29-year-old Kobe Bryant superfan who himself goes by the name Kobe. A resident of the northeastern city of Harbin, he made headlines last year when he unknowingly bought the former Lakers star’s stolen high school jersey. (He later returned it.) “If they can’t hold the games in China, fans can still travel abroad and jump over the Great Firewall to watch them.”
The sports network ESPN faced fresh criticism of its coverage of a row between the National Basketball Association (NBA) and China after using a map that appeared to endorse the country’s claims to both Taiwan and disputed territories in the South China Sea.
The even went with a ten-dash line:
At least five NBA teams are having their salary cap personnel plan for a scenario in which the cap for the 2020-21 season could drop between 10 and 15 percent due to the current situation between the NBA and China, league sources told Yahoo Sports.
This is part of the teams’ regular seasonal planning, but "it's like the cap spike, but opposite,” a league source told Yahoo Sports. “After all the money everyone spent last summer, this would have a major impact on all of us."
3. Apple responds to PRC pressure
Apple removed from its App store Wednesday a popular crowdsourced mapping app called HKmap.live, which let people in Hong Kong track police during the country’s ongoing pro-democracy protests...
Apple removed the app days after the company was criticized in Chinese state media for aiding “rioters” in Hong Kong. An editorial in People’s Daily, a government-run newspaper, said: “Letting poisonous software have its ways is a betrayal of Chinese people’s feelings.”
News organization Quartz tells The Verge that Apple has removed its mobile app from the Chinese version of its App Store after complaints from the Chinese government. According to Quartz, this is due to the publication’s ongoing coverage of the Hong Kong protests, and the company says its entire website has also been blocked from being accessed in mainland China.
The publication says it received a notice from Apple that the app “includes content that is illegal in China.”
Apple may be next in the US Congressional barrel over its China censorship.
4. Taiwan’s National Day
The world is still changing fast, and the changes are even more dramatic. The US-China trade dispute continues. And not far from Taiwan, Hong Kong is on the verge of chaos due to the failure of "one country, two systems."
Nevertheless, China is still threatening to impose its "one country, two systems model for Taiwan." Their diplomatic offensives and military coercion pose a serious challenge to regional stability and peace.
My fellow citizens, when freedom and democracy are challenged, and when the Republic of China's existence and development are threatened, we must stand up and defend ourselves. The overwhelming consensus among Taiwan's 23 million people is our rejection of "one country, two systems," regardless of party affiliation or political position...
We are witnessing China's rise and expansion, as they challenge free, democratic values and the global order through a combination of authoritarianism, nationalism, and economic might. As the strategic forefront of the Indo-Pacific region, Taiwan has become the first line of defense for democratic values.
Saber-rattling from Taiwan’s president is typical on Oct. 10, a day commemorated on both sides of the Taiwan Strait for the 1911 overthrow of China’s last imperial dynasty. But Ms. Tsai’s tone was more urgent this year, as she gears up for a presidential election in January. The Taiwanese people have watched Beijing tightening its grip over Hong Kong and the violent clashes with trepidation, fearing the island may face a similar future.
“Truly what happened in the last few months in Hong Kong has alarmed a lot of people in Taiwan,” said Yen Chen-shen, a professor at the National Chengchi University’s Institute of International Relations in Taiwan. “If China wants to approach Taiwan about any sort of negotiations, it will not be trusted.”
On August 30, 2019, as one of his final actions as the National Security Advisor, John Bolton declassified President Reagan’s secret memo dated August 17, 1982, to direct United States (US) policy in how to interpret the Communiqué issued with the People’s Republic of China (PRC) on the same day. That third US-PRC Communiqué concerned US arms sales to Taiwan. What was the context for Reagan’s memo as well as a vague note that he wrote earlier in 1982 to “keep our promises to Taiwan”—what I call the prequel? What are implications of these Presidential directives for US policy, Congressional oversight, and Taiwan?...
Why did Reagan sign his memo of August 17, 1982, along with issuing the Communiqué? Lilley recounted NSC aide Gaston Sigur’s explanation for Reagan’s reasoning: “The President felt that the communiqué hit him at the last minute. He didn’t like it, and his understanding of the communiqué was that if China were to become belligerent or build up power projection capability that brought insecurity or instability to the area, then the US would increase arms sales to Taiwan, regardless of what the communiqué said about quantity and quality conditions on arms sales.”
5. Suicide of a Chinese Facebook Employee
September 26 was an unforgettable day for many Chinese migrant tech workers in Silicon Valley, as hundreds of them gathered on a blazing hot day at Facebook’s "Thumbs up" sign at the entrance to the social network company’s Menlo Park, CA, headquarters, to hold a vigil for a Facebook employee who took his own life after allegedly bullied in the company and suffering extremely excessive work pressure.
Mr. Qin Chen, who was 38 years old when he jumped off a four-story company building in an apparant suicide, had been working for Facebook’s notoriously excruciating Ads department for less than 20 months on a working visa...
"If you don't do anything today, this situation will never change! Each of you is the hope of the Chinese people in Silicon Valley!" Mr. Yi Yin, a senior software engineer who joined Facebook three months ago and was fired from the company one week after the vigil, spoke to the crowd through a loudspeaker.
Mr. Yin, who was visually furious, led people to repeat the slogan— "Give us the truth, Zuckerberg!"—in a husky voice. He also called on attendees to send emails to Mark Zuckerberg, asking the Facebook co-founder and CEO to conduct an internal investigation and release the truth.
Business, Economy and Trade
As Tax Cuts Bite, Central Government Extends Extra Help to Localities - Caixin Local government coffers have been hit hard of late by whopping tax and fee cuts worth around 2 trillion yuan ($281 billion), an annual target China set in March to boost business and consumption amid an ongoing economic slowdown. The central government also plans to change how consumption tax is levied to give local governments a greater share of the fourth most lucrative tax in the country, the State Council document says.
China Steps Up Fight Against Fake Data - Caixin Among the proposals are the establishment of accountability mechanisms at all levels of government — starting at county level — to prevent and punish anyone caught falsifying data, including the senior officials in charge of the transgressors. The government will encourage the use of technology including big data, cloud computing and artificial intelligence to improve statistical work, according to the draft. A credit-rating system is also being put forward which will apply not only to government officials but also companies and organizations who contribute information to the NBS to act as a further incentive to improve the accuracy of data.
LEXUS·Hurun China Rich List 2019 Ma Yun at the top, Wang Jianlin now 9, Pinduoduo founder is now number 7
Beijing home to most wealthy Chinese: Hurun Report - ECNS Beijing boasts the highest concentration of wealthiest Chinese with 286, or 16 percent of individuals on Hurun China Rich List 2019 that ranks the very richest across the country. The list released on Thursday by Hurun Research Institute, which requires a minimum wealth of 2 billion yuan ($290 million), shows Shenzhen ranks second with 191 reaching the threshold and Shanghai third with 167. Hangzhou, Guangzhou and Hong Kong followed.
为什么许家印国庆观礼能上天安门，雷军花车游行，李彦宏坐观礼台！_中国 Evergrande Chairman Xu Jiayin, number 3 on the Hurun list, was on the Tiananmen Rostrum during the National Day celebration
China launches inspection to improve business environment - Xinhua Inspection teams will visit private enterprises, conduct investigations and hear opinions from the people, law enforcement and judicial organs at the primary level to uncover problems in building a law-based business environment, and suggest remedies after further research. The inspection will focus on establishing institutional guarantees for private business development, improving government service and offering high-quality legal services for the private sector.
In Depth: Tycoon’s Death Adds to Mounting Controversy Facing UCF Holdings Chinese financial giant UCF Holdings Group Ltd. has a lot on its plate — billions in debt, embezzlement at affiliates and exceptional government oversight. And now the death of its founder has brought the struggling conglomerate further controversy. Zhang Zhenxin, the shadowy tycoon behind the debt-ridden firm died last month in London of multiple-organ failure resulting from acute pancreatitis linked to alcohol dependence, according to a death certificate issued by the local authorities and seen by Caixin.
Politics and Law
没有任何力量能够阻挡中国人民和中华民族的前进步伐 Very long piece on page 4 of the Thursday People's Daily by "Zhong Xuanli 钟轩理", a pseudonym for the theory division of the Central Propaganda Department, on why there are no forces that can obstruct the advancement of the Chinese people
新时代在党史、新中国史上的重要地位和意义 _光明网 - 曲青山 Qu Qingshan, head of the Party History Research Office of the CPC Central Committee on the important and meaning of the the New Era in Party history and New China's history
China’s “Mainstream” | China Media Project In the realm of media and public opinion, one of the most misunderstood words in contemporary mainland Chinese, completely co-opted by CCP discourse, is “mainstream,” or zhuliu (主流)...Next time you hear mainland Chinese media or leaders referencing the “mainstream,” take a careful look at who is talking. The hand, you will generally find, is reporting on the puppet.
The 60th Anniversary of the discovery of oil at Daqing, and its hero worers are getting more propaganda love, this time on page 1 of the Thursday People’s Daily 新时代大庆这样回答“铁人三问”--时政--人民网 今年是大庆油田发现60周年。习近平总书记发来贺信指出，“大庆油田的卓越贡献已经镌刻在伟大祖国的历史丰碑上，大庆精神、铁人精神已经成为中华民族伟大精神的重要组成部分。”“站在新的历史起点上，希望大庆油田全体干部职工不忘初心、牢记使命，大力弘扬大庆精神、铁人精神，不断改革创新，推动高质量发展，肩负起当好标杆旗帜、建设百年油田的重大责任，为实现‘两个一百年’奋斗目标、实现中华民族伟大复兴的中国梦作出新的更大的贡献！”
In China, courts deny women divorces in the name of “social harmony” - The Economist The law on domestic violence, which took effect in March 2016, aims to protect women. But it is also intended to “promote family harmony and social stability”. Judges often consider this more important than women’s well-being. A study of 150,000 divorce cases filed between 2009 and September 2016, more than two-thirds of them by women, found the new law had done little to help female victims. When people file their first petition for divorce (many have several tries), judges are more likely to agree if the plaintiff is a man. They are usually unswayed by claims of violence. “For abused women, courts are the problem, not the solution,” says the study’s author, Ethan Michelson of Indiana University.
Foreign and Defense Affairs
What should Australia do about… research collaboration with the PRC?- China Matters - Dirk van der Kley Australia needs to use a two-tiered approach to balance these risk and benefits. It should continue to use defence export controls (DEC) to block collaboration on core defence technologies. To deal with the more vexing problem of ‘dual-use’ technology that has both significant civilian and potential military applications, Australia should establish a Critical Centre for Research Collaboration that works with all sectors of government, universities and other stakeholders to identify and manage the risks arising from research collaboration. This would be part of a risk mitigation approach that encourages transparent due diligence from universities and individual researchers, instead of a broad expansion of DECs.
Defense Intelligence Agency employee charged with leaking classified information to journalists - The Washington Post On July 1 this year, Macias’s and Kube’s bylines appeared on an NBC News online story about China’s testing of anti-ship ballistic missiles in the South China Sea, with the information attributed to “two U.S. officials with knowledge of the matter.”
China's Z-20 chopper features powerful homemade engine: maker - China Military The Z-20 made its public debut at the National Day parade on October 1. At the 2019 China Helicopter Development Forum in Tianjin on Wednesday, Wang Xibao, chief engineer at Harbin Aircraft Industry Group under the Aviation Industry Corporation of China (AVIC), told the Global Times that it is "of an advanced level in the 21st century."
Spying slur looms large over Chinese in US - Global Times Law enforcement in the US has a duty to protect the interests of this country. But there are different ways to approach the goal. They seem to be taking an approach of, to quote a Chinese warlord in the early 20th Century, "rather wrongfully beheading a thousand innocent than risking missing out one guilty." But an overstretched net may drag things in the opposition direction from the caster's wish. As David Ho, a leading AIDS treatment researcher reminded me at the convention, Qian Xuesen, the physicist who helped America build its first atomic bomb, was driven back to China by the "red scare" in the 1950s. And then he helped China build its own bomb.
Solomon Islands joins China's Belt and Road Initiative, as leaders meet in Beijing - China power - ABC News (Australian Broadcasting Corporation) The two leaders signed several agreements, including one about cooperating with Mr Xi's multi-trillion-dollar Belt and Road infrastructure initiative, and others on economic and education strategies. One of the deals would see Solomon Islands become a destination country for Chinese tourists
Seafront venue for PM Modi-Xi Jinping summit harks back to Tamil Nadu’s ancient China links | Hindustan Times Behind India’s decision to choose the seaside resort of Mamallapuram as the venue for the second informal summit with China lies the story of centuries-old trade and cultural links between Tamil Nadu and Fujian province, where President Xi Jinping once served as the governor. Quanzhou, a port city in Fujian, is probably the only Chinese city with existing evidence that trade links existed between coastal China and southern India almost 1,400 years ago.
China's first polar observation satellite supports polar research - Xinhua After nearly one month of in-orbit testing, the satellite is working normally and conducting full-coverage observation of the Antarctic and the Arctic every day, Cheng Xiao, the chief scientist, said at the China Symposium on Polar Science 2019.
Returnees help voice of China to be heard - China Daily - Wang Huiyao Today the world is witnessing tremendous changes, from the international trading system to technology and geopolitics. New frameworks are needed for global economic governance. At the same time, China's domestic situation has entered a new normal, where new dividends are sought through innovation and industrial upgrading. Against this backdrop, China needs to deepen opening-up and further participate in global governance. President Xi Jinping has summed up the illustrious history of overseas returnees as a story of "seeking the ideal China", highly praising them for helping to promote China from closed to open, and from poverty to prosperity.
Hong Kong and Macao
Canadian man goes into hiding after stoking debate about Hong Kong violence with YouTube video - The Globe and Mail A Canadian man who fled Hong Kong has taken refuge elsewhere in Asia after posting a video of street unrest that prompted threats from protesters – and sympathetic coverage by Chinese state media. “I’m in hiding,” said Toby Gu, 27, a social media influencer who declined to reveal his current location. “I’m still pretty nervous.”
$130+ Billion in Undisclosed Foreign Exchange Intervention by Taiwan's Central Bank | Council on Foreign Relations Based on the profits and losses disclosed by Taiwan’s central bank, it appears that its true FX exposures exceed its disclosed foreign exchange reserves by USD 130bn, and perhaps by as much as USD 200bn.
Tech and Media
Energy, Environment, Science and Health
Chinese companies commit to Alberta oilsands despite setbacks | Globalnews.ca The Chinese energy majors employ “patient capital” and it seems unlikely they will leave the oilsands anytime soon, said Jia Wang, deputy director of the China Institute at the University of Alberta. “The assets they bought may not be the most profitable or may require more capital intensive development… [but] these are large Chinese companies, they’re not likely to become bankrupt,” she said.