Trump's Trade War Threat To China; 5G Behind US Moves To Block Broadcom Buy Of Qualcomm; Djibouti Port And US-China Competition In Africa; China's New Era Of Patriotic Films; NPC
The Party is swallowing the State and Xi is swallowing the NPC and the related propaganda. Li Keqiang, when you can find him, looks quite defeated...
Kudos to eagle-eyed readers of yesterday's newsletter who noticed the funniest line about Chinese politics I have read in a while, from this Reuters report- Factbox: Names to watch in China's government reshuffle - Reuters:
- Liu Qibao. The party’s former propaganda minister was one of three members of the 18th Politburo who were passed over for further promotion to the Standing Committee after he voluntarily asked to be sidelined, allowing Xi to promote another of his men. As a consolation prize, he will be made the No. 1 vice-chairman of the CPPCC.
Get ready for a trade war. Gary Cohn has quit has quit as the top White House economic advisor and some reports have Peter "Death By China" Navarro as his likely replacement. Meanwhile, President Trump tweeted earlier today:
China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!
March 7, 2018Thanks for reading.
The Essential Eight
1. Trump's Trade War Threat To China: "Concede Or I Will Shoot Our Allies First"
Trump wants to start his trade war tomorrow - Axios:
The big picture: Trump is impatient and he wants to act — or at least be seen as acting. He got fed up with staff, especially Gary Cohn and Rob Porter, not giving him his tariffs on steel and aluminum. And some of Trump’s nationalist-minded advisers are telling him these tariffs will help turn out voters in the upcoming special election in Pennsylvania's 18th congressional district.
Yes, but: Keep in mind that this is what Trump has been telling staff he wants. These days — and in this White House — nothing is set in stone. Besides, the White House lawyers have been working overtime on these tariffs and sources tell me nothing is certain when it comes to timing.
Trump Alienates Allies Needed for a Trade Fight With China - WSJ:
China exports little steel to the U.S. because of existing duties and accounts for just 11% of its aluminum imports, far behind Canada. The Commerce Department argued for a global remedy because Chinese production depresses global prices and drives foreign producers out of third markets, and they then ship to the U.S.
This means the pain of Mr. Trump’s tariffs will fall not on China but on actors that play by the rules, including Canada, Japan and the European Union. When the EU threatened to retaliate, Mr. Trump said he would escalate by raising duties on European cars.
Chinese misbehavior has thus brought the U.S. to the brink of trade war with its own economic and strategic allies, echoing how Russian meddling has served to fuel internal strife in Europe and the U.S.
Is the US Ready for a Trade War? | YaleGlobal Online:
Donald Trump won the US presidency by promising trade battles to restore manufacturing jobs that have also been decimated by automation. After announcing plans to impose tariffs on steel and aluminum imports, he maintained that “trade wars are good, and easy to win.” Scott Kennedy, with the Center for Strategic and International Studies, agrees that China distorts the global economy with discriminatory policies, seeking to dominate key industries through subsidies and over-production. Yet he also maintains that the United States is woefully unprepared for a potential trade war in five ways: by expecting China to fold quickly, not knowing what it wants, not preparing US citizens for higher prices and other sacrifices, not coordinating allies and even aggravating them, and not preparing for details that include possible court challenges. Trump’s threat to impose tariffs presents many unknowns and may yet prove to be bluster. If he proceeds, he will alienate many of his supporters while confronting a formidable opponent in a united China
China had planned to send a large delegation of about 40 people to accompany its most senior economic adviser, Liu He, on his recent visit to Washington but after the US objected the number was cut to about 10, sources told the South China Morning Post...
Liu was the second member of the Communist Party’s powerful Politburo to visit the United States last month, following Yang Jiechi, China’s top diplomat, who also sought to defuse escalating tensions between the world’s two largest economies.
Both visits failed to yield substantial results, with Beijing failing to persuade Washington to restart the comprehensive economic dialogue (CED), a key negotiating channel that was suspended by the US last year.
Comment: But I believe Trump did meet briefly with Liu He, thus avoiding a complete snub of Liu and Xi...
“Liu didn’t achieve his goals – a promise to restart the CED, to identify who his counterpart would be, or be given a list of demands. The American side apparently mentioned some problems that have to be fixed, but they weren’t meant to be a list of demands,” said Scott Kennedy, a senior fellow with Washington-based think tank the Centre for Strategic and International Studies.
“In Washington there is no one point person in charge of China policy, and there is no ongoing official dialogue process. The office in the Treasury Department that managed the CED does not exist any more,” he said.
But Kennedy added that the US executive branch did not have a sufficiently clear policy process to discuss options, adjudicate differences and make choices on China trade policy.
2. NPC Rundown
13 more days...
President Xi says he supports proposed constitutional revision - CGTN:
Chinese President Xi Jinping on Wednesday said he backs the proposed constitutional amendment package, and stressed that the revision is a significant decision made by the Central Committee of the Communist Party of China (CPC) on the basis of adhering to and developing socialism with Chinese characteristics.
Xi's "time with the delegations"--the highlights of Xi's talk with various NPC delegations—习近平的“下团组”时间 | 人民群众什么方面感觉不幸福不快乐不满意 我们就在哪方面下功夫_央视新闻客户端_央视网(cctv.com)
Xi's visit with the Guangdong delegation was the top story of the 3.7 CCTV Evening News. Tencent founder Pony Ma and returnee cum official Yuan Yuyu among the delegates who gave statements to Xi—习近平参加广东代表团审议_CCTV:
会上，李希、马兴瑞、马化腾、袁玉宇、米雪梅、黄建平、刘若鹏、李金东等8位代表先后围绕加快建设现代化经济体系、发挥互联网经济发展优势、以党建文化引领民营企业文化建设、军民融合推动源头科技创新发展、实施美丽乡村战略等问题发表意见。
Xi Jinping tells Guangdong to lead the charge on ‘full opening up’ | South China Morning Post:
Speaking to the delegation from the southern province at the annual legislative session in Beijing, Xi said luring and nurturing talent was critical to his vision of making China strong, including the ambition to take a global lead on technological and industrial change.
He also told the province to work with Hong Kong and Macau to develop the “Greater Bay Area” – linking the two cities with nine southern mainland ones – into a world-class economic and business hub.
“Your experience is just like your name, ‘the fragrance of plum blossoms comes from bitter cold’,” Chinese President Xi Jinping told Mi Xuemei, a grassroots NPC deputy from a clothing company in Guangdong, as Xi joined a panel discussion with the deputies from the southern province at the first session of the 13th National People's Congress, China's national legislature, on Wednesday morning.
Below is a video of a heartfelt thanks from a delegate for rural development and better toilets. The toilet issue has been mocked by some but it is a very real one, and great for China to final address it:
#XiJinping: I look forward to visiting your village in the future #TwoSessions pic.twitter.com/YGHkXr9ja8
March 6, 2018This Caixin article has a fun infographic of the NPC billionaires--Billionaires Suggest Legislation on Belt and Road, ‘Digital China’ - Caixin Global:
Unlike Pony Ma, China’s No.2 billionaire, Jack Ma, the founder and executive chairman of e-commerce giant Alibaba Group Holding Ltd., has never been elected as a delegate to the annual political gathering of around 3,000 delegates.
Other important figures from the business community in attendance at the legislative meeting included Lei Jun, chairman and CEO of phone-maker Xiaomi Inc., a firm now planning an initial public offering and a launch in the U.S. as early as later this year; and Li Shufu, chairman of Chinese automaker and Volvo-parent Geely, who recently acquired a 9.69% stake in German carmaker Daimler AG...[Li Shufu goes way back with Xi from Xi's time in Zhejiang]
While not all of China’s billionaires are lawmakers, some of them are part of the Chinese People’s Political Consultative Conference (CPPCC), a body that advises the government on a range of issues.
Among the wealthy CPPCC members are William Ding Lei, CEO of gaming developer NetEase Inc., and Robin Li Yanhong, CEO of search engine operator Baidu Inc., who were ranked by Forbes as China’s eighth and 12th richest people, respectively.
Pony Ma looks to be the most politically savvy of all the tech moguls. Remember Xi's visit to Tencent's Shenzhen HQ in December 2012, as noted by Sinocism at the time:
习近平考察腾讯公司 笑问马化腾微博粉丝多少-中新网 – Very interesting description of Xi Jinping’s visit to Tencent…and some of the uses of all the data Tencent collects…// 总书记不断询问一些相关问题，此时他问微信产品在国际竞争中会遇到哪些问题？听到解答后，他鼓励腾讯要不断进取，为民族互联网产业走向世界贡献力量。.. “互联网在社会管理方面有较大作用，我们怎么去适应它？”当时总书记说，“我看到你们做的工作都是很重要的，比如在这样的海量信息中，你们占有了最充分的数据，然后可以做出最客观、精准的分析。这方面对政府提供的建议是很有价值的。”
After US and Hong Kong, Beijing plans to cut tax burden for middle class | South China Morning Post:
While the details have not been finalised, Shi Yaobin, deputy finance minister, told reporters in Beijing on Wednesday that the authorities planned to raise the threshold for personal income tax based on changes in basic living expenses. The tax threshold was increased to 3,500 yuan (US$550) from 2,000 yuan (US$315) in 2011.
In addition, Beijing is considering increasing the base income for taxation by including other sources such as remuneration and adding more deductions, including for children’s education and medical treatment for critical illnesses.
3. Officials Quash Fears Of Fiscal Spending Slowdown
China will retain a proactive fiscal policy in 2018 despite a lower targeted ratio of deficit to gross domestic product (GDP), Finance Minister Xiao Jie said Wednesday.
China on Monday cut its deficit-to-GDP ratio for 2018 to 2.6% from 3% in 2017, surprising some observers with the first such reduction since 2013. However, China has kept the value of the projected shortfall in 2018 unchanged at 2.38 trillion yuan ($376.0 billion)...
According to the government work report released on Monday, China has set its 2018 spending target at 20.98 trillion yuan, up 7.6% year-on-year and 1.5 percentage points higher than the growth of its revenue target.
Meanwhile, China aims to reduce taxes on enterprises and individuals by over 800 billion yuan, and ease the nontax burden by over 300 billion yuan in 2018, with the goal of facilitating greater corporate profit and more vigor in the market, said the report.
The report mentioned that China is considering a nationwide rollout of a pilot program of tax incentives for venture capital activities.
Railway Operator Denies Spending Cuts Will Hinder Economic Growth - Caixin Global:
The operator said in January it plans to spend 732 billion yuan ($115.6 billion) this year on its fixed rail assets, the lowest amount since 2013. CRC had promised earlier to not invest less than 800 million yuan every year to develop China’s railway. But the figure has steadily dropped from 808.8 billion yuan in 2014 to 801 billion yuan last year...
During a discussion panel of the annual legislative session on Tuesday, Lu said that despite a lower budget in the next few years, the total investment between 2016 and 2020 still fits well into the 3.5-trillion-yuan target earmarked in the central government’s 13th Five-Year Plan.
And the Finance Minister says there is no debt crisis.
Ministry of Finance Defends China's Debt Levels, Says Systemic Risk Under Wraps - China Banking News:
Speaking at a press conference for the 13th National People’s Congress Xiao Jie (肖捷) said that recent changes in the government’s accounting methods had led to a misapprehension of China’s actual debt levels.
“Chinese government debt is demarcated in accordance with the provisions of the Chinese budget law, and includes central government national debt, local government debt, as well as outstanding government debt that was identified and confirmed as of the end of 2014…because from 1 January 2015 China implemented a new budget law.
“As of the end of 2017 the Chinese government’s debt balance was 29.95 trillion yuan, of which the central government national debt balance was 13.48 billion yuan, and the local government debt balance was 16.47 trillion yuan.
“The Chinese government’s debt ratio, as calculated by dividing the debt balance by national GDP, is 36.2%, and this figure marks a decline compared to the reading of 36.7% in 2016.
4. Chinese Communist Party Overseas Influence/Interference Operations
Apologies if I have gotten to be a bit of a broken record on this issue, but an Australian-style backlash has been building for months here in the US and in Europe, and we need to be very careful that it is properly handled without spiraling out of control into a Yellow Peril 2.0.
China’s Long Arm Reaches Into American Campuses – Foreign Policy:
Chinese Communist Party influence within the United States is a real concern, and the vessels of that influence “should be transparent and it should be disclosed,” says Bill Bishop, author of the influential Sinocism newsletter, which offers insights into Chinese politics and government. But it’s important not to conflate party influence with all Chinese people, which is exactly what Wray’s comments did, says Bishop.
“That over-broad and unspecific language is very dangerous and feeds into the risk that this becomes a backlash against people of Chinese descent,” Bishop tells FP. “I am very worried, especially in this environment, especially with what has been unleashed since the 2016 election, that it could very easily tip into something very nasty.”..
Pressure on CSSAs to promote “patriotic” ideas was particularly acute in October 2017 during the 19th party plenum, the key national planning session held every five years at which top officials are selected and new policies are announced. Consular officials sent out requests to CSSAs around the country to hold events related to the plenum. One such message, viewed by FP, encouraged groups to organize viewing sessions for their members to watch the opening ceremonies together, and requested that they send photos or reports of the event back to the consulate...
Chinese consular officials often communicate with CSSA leaders through group chats in the Chinese messaging app WeChat. Consular officials divide the regions into different umbrellas, with specific officials responsible for certain regions, and then create WeChat groups for the presidents of all the CSSAs in the region, with a consular official also a member of each group
CIA Warns of Extensive Chinese Operation to Infiltrate American Institutions - Bill Gertz:
"The CCP provides ‘strings-attached' funding to academic institutions and think tanks to deter research that casts it in a negative light," the report says. "It has used this tactic to reward pro-China viewpoints and coerce Western academic publications and conferences to self-censor. The CCP often denies visas to academics who criticize the regime, encouraging many China scholars to preemptively self-censor so they can maintain access to the country on which their research depends."
The CIA warning joins a growing call by U.S. lawmakers and intelligence officials to investigate China's involvement on American college campuses. The agency declined to comment on the report…"By excluding U.S. social media firms from the Chinese market, the CCP helped build firms over which it exercises control," the report says. "These firms dominate Chinese-language news-sharing and social media markets globally and probably give the CCP some control of content and collected personal data."
The report cites the Chinese-owned WeChat messaging app…
Beijing is very happy if the overseas diaspora uses Wechat…
The overzealous, if not destructive, response to Soviet infiltration in the years after World War II should guide us toward a better, more measured response. The pendulum swung from the blind eye of the 1930s and the World War II alliance to McCarthyite witch hunts. Today, after years of blindness, sight is returning to capitals across the West and gazes are fixed on the Chinese Communist Party’s efforts to shape perceptions at home and abroad. As this happens, it behooves us to think of a few guidelines for how to speak about this issue.
First, the entity about which Western governments should be concerned is the Chinese Communist Party, not China, and not the Chinese people. The party claims to represent all Chinese people everywhere all the time, but this is not true. Many can speak for themselves as citizens and long-time residents of other countries. Chinese people should not be caught between our governments and the CCP. They should have choice. Western governments also should ensure the party respects the choices Chinese people have made to become Americans, Canadians, or whatever else...
Second, the concern is about “interference” rather than “influence.” Influence is one of those loose words that describes everything from the lure of China’s market to the intimidation generated by arresting the family members of U.S. journalists. “Interference” better addresses the scope of CCP activity, because it describes crossing boundaries established by law and disrupting the normal flow of political or social activity. It also has the benefit of being an activity in which Beijing claims it does not engage and does not condone.
5. US Move To Block Broadcom Buy Of Qualcomm About Huawei And 5G
Top Prize in U.S.-China Rivalry Is Technology Dominance - The New York Times:
“Having a well-known and trusted company hold the dominant role that Qualcomm does in the telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security,” the Treasury official wrote in the letter.
The government specifically cited Huawei, the Chinese telecom-equipment giant, as a potential competitor that could move into a breach created by a merger. The Chinese company has spent heavily on 5G, and the government said it owns 10 percent of the essential patents...
Broadcom said it was cooperating with Cfius, saying it was “making the combined company a global leader in critical 5G and other technologies.” Qualcomm, in an earlier statement, said the review was a “very serious matter.”
Why Washington Is So Obsessed With China’s Huawei - WSJ:
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would “leave an opening for China to expand its influence on the 5G standard setting process.” It cited specifically Huawei’s 5G “engagement.”
6. Domestic Security Spending Increasing
I know, no surprise, but interesting that figures are back in the report. Think of all the companies, employees and investors who benefit from the expansion of the security and surveillance state. The focus is often on the potential resistance, but there are plenty of people who are more than happy to push forward with this, and get paid well while doing it...
China Spends More on Domestic Security as Xi’s Powers Grow - WSJ $$:
Across China, domestic security accounted for 6.1% of government spending in 2017, the Ministry of Finance said. That translates into 1.24 trillion yuan ($196 billion) and compares with 1.02 trillion yuan in central-government funding for the military.
The numbers, revealed in an annual budget report released this week, help illustrate the scale of a recent intensification of security and surveillance across China, particularly in Xinjiang and Tibet, minority-heavy areas on the country’s periphery.
The spending numbers are “very consistent with the heavy securitization that’s going on,” said Adrian Zenz, a lecturer at the European School of Culture and Theology in Germany who discovered the numbers in Monday’s report..
The Finance Ministry stopped including the domestic-security budget in its annual report in 2013, after media reports highlighted its growth. This year, the number appeared only as a percentage of the total budget in a graph and wasn’t mentioned in the text.
The report is here in PDF, thank you the WSJ. And I believe these are two of the relevant charts. The item is “公共安全支出", though I am not sure about the difference between “全国” and “中央” numbers in this context.
7. Djibouti Port And US-China Competition In Africa
Can the Trump administration stop China from taking over a key African port? - The Washington Post:
Ever since the Djiboutian government seized control of the Doraleh Container Terminal from Dubai-based DP World last month, reports are it intends to strike a deal with a Chinese-state-controlled firm to run the facility. On Tuesday, Djibouti signed an agreement to expand the port with a Singaporean company that works with China Merchants Port Holdings Co., which already owns a large stake in the facility.
The port is significant not only because it sits next to China’s only overseas military base but also because it is the main access point for American, French, Italian and Japanese bases in Djibouti and is used — because of its strategic location — by parts of the U.S. military that operate in Africa, the Middle East and beyond.
'Significant' consequences if China takes key port in Djibouti: U.S. general - Reuters:
Last month, Djibouti ended its contract with Dubai’s DP World, one of the world’s biggest port operators, to run the Doraleh Container Terminal, citing failure to resolve a dispute that began in 2012.
DP World called the move an illegal seizure of the terminal and said it had begun new arbitration proceedings before the London Court of International Arbitration.
During a U.S. congressional hearing on Tuesday, which was dominated by concerns about China’s role in Africa, lawmakers said they had seen reports that Djibouti seized control of the port to give it to China as a gift.
U.S.-Africa Relations: A New Framework-Tillerson Speech earlier this week:
The United States pursues, develops sustainable growth that bolsters institutions, strengthens rule of law, and builds the capacity of African countries to stand on their own two feet. We partner with African countries by incentivizing good governance to meet long term security and development goals.
This stands in stark contrast to China’s approach, which encourages dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt and undercut their sovereignty, denying them their long-term, self-sustaining growth. Chinese investment does have the potential to address Africa’s infrastructure gap, but its approach has led to mounting debt and few, if any, jobs in most countries. When coupled with the political and fiscal pressure, this endangers Africa’s natural resources and its long-term economic political stability.
8. China's New Era Of Patriotic Films
Certainly good for stirring up jingoism, will be interesting to see how Hollywood contorts itself to maintain access to the massive PRC market.
China’s movie industry undergoes a patriotic makeover in the New Era - Global Times:
China is churning out patriotic movies that reflect the country's achievements, ranging from increasing military power to rapid economic development.
Some 5,000 "people's cinemas" across China are designated to screen Party-approved movies.
Popular Chinese actors are converting in droves to serve as red avatars that instill positive energy in the audience...
To ensure screening for patriotic films, the State Administration of Press, Publication, Radio, Film and Television (SARFT), issued a document last month stating that 5,000 out of a total of 50,000 cinema halls nationwide will be selected as "people's cinemas" to screen designated mainstream films at normal times as well as some important films during special events.
Organized group viewing activities, discounted prices and preferable policies - as well as financial support and bonuses - will be given to these cinemas, read the document. A chosen cinema hall's seating capacity should be no less than 100. In every county with a cinema, there must be one designated as people's cinema; at the city-level, there must be at least one per district.
Shi Wenxue, a Beijing-based film critic, told the Global Times that building people's cinemas is an important move by SARFT to consolidate cultural confidence and push forward the prosperity and development of socialist culture.
Business, Economy, Finance And Trade
Mystery of China Energy Giant That Came From Nowhere Deepens - Bloomberg While a CEFC spokesman said last week that the company is operating normally and reiterated that reports about Ye being investigated are unfounded, Chinese President Xi Jinping’s crackdown on debt-fueled expansion and scrutiny of the nation’s rising tycoons is fueling speculation that the firm is being reined in. CEFC had holdings that spanned the Middle East to Africa and Europe, including everything from oil ventures to a soccer team and even a brewery.
Official Warns Financial Holding Companies Are 'Blind Spot' in Regulation - Caixin Global Many different types of institutions with the characteristics of financial holding companies have emerged in China, but they have been something of a blind spot for regulators, Jin Penghui, the head of the People’s Bank of China’s Shanghai branch, said during a meeting of the economics group of the China People’s Political Consultative Conference, the legislature's advisory body, on Tuesday.
The U.S. Businesses at Risk From Trade War With China - Bloomberg Investors do not seem worried so far
China Finally Introducing a Globally Comparable Jobless Rate - Bloomberg Monthly updates of China’s survey-based urban unemployment rate will be released from April, the country’s National Bureau of Statistics said Wednesday in response to a Bloomberg News query. Until now, the only regular official unemployment rate has been a quarterly gauge of urban joblessness that hasn’t deviated much from around 4 percent over the past 15 years, despite economic shifts.
China regulator piles more pressure on insurers, seeks to clarify murky ownership - Reuters The rules, which now have 94 provisions from 37 before, come after the China Insurance Regulatory Commission (CIRC) seized Anbang Insurance Group, a firm dogged with allegations of opaque shareholding structures. Chinese authorities are in the second year of a widening campaign to reduce risks in the financial system, which includes a crackdown on riskier investment products sold by some insurers and probes into whether they are providing covert funding to local governments.
Trump Threat Unlikely to Derail China Financial-Industry Opening - Bloomberg “China does these things not because of trying to please international audiences. It does it because it thinks it’d be in the better interest of China,” said James Stent, who’s spent more than a decade on the boards of two Chinese lenders. “I shouldn’t think that they would change their views a great deal because of a trade spat with America.”
China's FX Reserves End Yearlong Rising Streak on Valuations - Bloomberg Reserves fell $27 billion to $3.13 trillion in February, the People’s Bank of China said Wednesday That missed the $3.16 trillion median estimate in Bloomberg’s survey
The Art of Trade War (Hint: China Wrote the Book) - Bloomberg One lesson from real warfare is that battles tend to be won and lost on the home front -- and in that respect, the U.S. is laboring under a significant handicap. Its major imports from China are overwhelmingly consumer goods, where the predictable effect of tariffs will be to increase costs to American citizens
China's Tianjin vows to haul up 'lazy' officials in push for growth - Reuters Battling weak economic growth, which was the smallest among all municipalities and provinces last year, Tianjin will step up a campaign to name and punish officials who fail to fulfill their responsibilities and deliver in the next three years, the city’s Commission for Discipline Inspection Chief Deng Xiuming said. Thousands were punished last year, he told reporters late on Tuesday on the sidelines of the annual meeting of parliament, without providing details on punishments.
Chinese firms will pay $14 million back wages in Saipan case - AP Four Chinese construction firms will pay nearly $14 million in back wages and damages to thousands of Chinese workers for construction of a casino in the U.S. Commonwealth of the Northern Mariana Islands. Investigators found the contractors paid employees less than what was required by law, according to a U.S. Department of Labor statement released Monday.
Politics, Law And Ideology
China gifts bronze statue of Marx to German birthplace Trier - AP The 4.4-meter (14-feet) tall statue by Chinese artist Weishan Wu shows Marx in mid-step — left foot first.
In 2015, Francis Fukuyama asked Wang Qishan if China's constitution could observe rule of law. Wang said: "Impossible. The law must be come under the leadership of the Party. That's China's special characteristic." Transcript in Chinese: https://t.co/PRegA082Ob @SuzanneGaber
March 7, 2018Quarterly Report 1 | October 2017- January 2018 | Party Watch Initiative The Party Watch Initiative Quarterly Report 1 provides a comprehensive overview of the most important Chinese Communist Party (CCP)-related developments and trends for the period covering October 2017 to January 2018 and offers near-term estimates of their future direction. It includes analysis of the 19th Party Congress, Xi Jinping’s consolidation of power over the CCP, military, and security forces, the new National Supervision Law and anti-corruption campaign, economic developments in China’s “new era,” and the growing importance of CCP international liaison and united front work. The report is heavily based on Chinese language publications analyzed during the Initiative’s daily monitoring of authoritative CCP-regime sources.
Foreign and Military Affairs
Talks With North Korea? China Approves (No Matter the Outcome) - The New York Times “China’s priority is for the tension to be defused and for the talks to start,” said Yun Sun, co-director of the East Asia Program at the Stimson Center, a research institute in Washington. “The Chinese have acknowledged their inability to make that happen, so they are O.K. with not leading the campaign.”..“The Chinese enjoy the wedge North Korea is driving between South Korea and the U.S.,” Ms. Yun said, “and it will create a further rift between the allies.”
India, with eye on China ties, bans Tibetans from holding New Delhi rally - Reuters India has banned Tibetans from holding a rally with the Dalai Lama in New Delhi this month to mark the 60th anniversary of a failed uprising against Chinese rule, officials said on Wednesday, as it tries to improve fraught ties with China... Senior officials in the foreign and interior ministries said exiled Tibetans would not be allowed to hold a rally in the capital, but could do so in the northern town of Dharamsala, where a Tibetan government in exile is based.
Asian giants China and India flex muscles over tiny Maldives - Reuters After the state of emergency was declared India - which sent troops to foil a coup in the Maldives three decades ago - moved aircraft and ships to its southern bases and put special forces on standby, two military sources in New Delhi said. But in the end, Prime Minister Narendra Modi held off from hard action, unwilling to entangle the military in a foreign country of 400,000 people, the sources said. Beijing’s signals it would not look kindly on any foreign involvement in the Maldives - where it is investing millions of dollars as part of its Belt and Road Initiative - backed up by its naval presence in the eastern Indian Ocean, may also have weighed against an intervention, security analysts said.//Comment: Beijing would not look kindly on any foreign involvement other than its own. How will India react when Beijing puts a naval base in the Maldives?
Chinese submersible goes deep in Indian Ocean | Asia Times The fact that Chinese ships plying Indian Ocean routes so far from their home ports and bases in displays of blue-water capabilities is a source of consternation for India, as its own naval and research ships can barely limp into far-flung international waters by comparison. New Delhi has lodged a number of complaints with Beijing about the latter’s perceived breaches of its marine territory and interests.
China's debt-trap diplomacy reaches Philippines with exorbitant loans - Business Insider The Philippines is close to accepting loans from China that are 1,100% more expensive than ones from Japan
Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective | Center For Global Development China’s Belt and Road Initiative (BRI) hopes to deliver trillions of dollars in infrastructure financing to Asia, Europe, and Africa. If the initiative follows Chinese practices to date for infrastructure financing, which often entail lending to sovereign borrowers, then BRI raises the risk of debt distress in some borrower countries. This paper assesses the likelihood of debt problems in the 68 countries identified as potential BRI borrowers. We conclude that eight countries are at particular risk of debt distress based on an identified pipeline of project lending associated with BRI. Because this indebtedness also suggests a higher concentration in debt owed to official and quasi-official Chinese creditors, we examine Chinese policies and practices related to sustainable financing and the management of debt problems in borrower countries. Based on this evidence, we offer recommendations to improve Chinese policy in these areas.
李传广任火箭军副司令员，李军接任火箭军参谋长 澎湃新闻（www.thepaper.cn）记者从权威渠道获悉，原任火箭军参谋长的李传广中将已改任火箭军副司令员，原任火箭军某基地司令员的李军少将接任火箭军参谋长一职。 李传广长期在原第二炮兵部队服役，曾任原第二炮兵某基地参谋长、96301部队部队长等职，2016年5月升任火箭军副司令员，随后转任火箭军参谋长，2017年7月晋升中将军衔。
北部战区副司令员王伟已晋升空军中将军衔(图)|王伟|空军|战区_新浪新闻 近日，中国人大网更新了十三届全国人大代表信息。更新后的代表信息披露了多名解放军和武警部队军官的最新军衔信息。 其中，北部战区副司令员王伟已晋升空军中将军衔
Hong Kong, Macao
Writer Jung Chang entry in Macau not guaranteed by authorities | Macau News The Macau Literary Festival organisation said today that the decision to cancel the participation of writers Jung Chang, Suki Kim and James Church in the event was taken after local authorities said their entry in Macau would not be guaranteed.
Taiwan
Taiwan slams Swedish tax agency after it reclassifies the island as a 'province of China' | Hong Kong Free Press HKFP Taiwan’s Foreign Ministry has said that Sweden’s move to classify Taiwan as a province of China is “unacceptable” to the government and its people. The Swedish Tax Agency announced last Wednesday that it would change the name of Taiwan from the “Republic of China (Taiwan)” to “Taiwan, Province of China.”
Tech And Media
iOS 11.3 beta suggests Apple Pay Transit coming to Beijing and Shanghai | 9to5Mac The transit feature is only available in Guangzhou at the moment, with the UnionPay cards. Code found in iOS 11.3 beta 4 suggests that the feature is going to expand to Beijing and Shanghai in the near future, although initially in beta.
Ofo Borrows $280M From Alibaba As Financial Troubles Escalate At Bike Sharing Firm – China Money Network By pledging more than four million bikes, ofo risks losing its most important asset. But local media reported that ofo was forced to strike the deal with Alibaba because its major investor Didi Chuxing would not allow it to take direct investment from Alibaba. A US$700 million previous financing round led by Alibaba in ofo announced last summer was reportedly stuck as well amid in-fighting among ofo’s key shareholders.
Energy, Environment, Science And Health
U.S. Approves China-Made Biological HIV Drug - Caixin Global A biologically-based alternative HIV treatment developed in Taiwan and manufactured in China has won approval from the U.S. Food and Drug Administration (FDA), becoming the first such made-in-China drug to receive such approval, its producers said on Wednesday. Ibalizumab-uiyk, which also goes by the name of Trogarzo, is a new option for people who have tried more conventional drugs without success
Chinese investors pump new dollars into Maryland’s pharmaceutical industry - The Washington Post Investment companies Boyu Capital, 6 Dimensions Capital and Hillhouse Capital announced last week that they have teamed up with MedImmune, the research and development arm of AstraZeneca, to spin off six of the firm’s drug candidates into a new company focused on severe autoimmune diseases. MedImmune Senior Vice President Bing Yao will become chief executive of Viela Bio, which will also base its operations in Gaithersburg. Under the terms of the investment deal, MedImmune would be the largest minority shareholder in the new firm.
China aims to produce record coal, natural gas volumes this year - Reuters The NEA said China will produce around 160 billion cubic meters of natural gas, a record and up 8.5 percent from 2017. Domestic coal production in 2018 will also reach an all-time high at 3.7 billion tonnes, up 7.3 percent from last year.
China to build first ultra high-voltage clean power line - Xinhua The 800-kilovolt direct current transmission line will extend 1,600 km across five provinces, from the Qinghai plateau in the northwest to densely populated Henan in central China, according to the State Grid, Qinghai branch. Qinghai has a large solar power capacity, reaching 9.53 million kilowatts at the end of 2017, accounting for 37.5 percent of its total power capacity.
Jobs And Events
Consolidating Xi’s Position and China’s Direction: A Readout of China’s Annual Legislative Session | Center for Strategic and International Studies Thursday, March 15, 2018 9:00 am - 10:15 am CSIS Headquarters