Tweet-bombing the trade war; RRR cut; Urban-rural development plan

So much for a quiet return from the May Day holiday. President Trump’s Sunday tweets threatening increased tariffs on China by Friday unless the Chinese make more trade concessions crashed PRC stock markets the most in three years and added huge uncertainty back into what most people had assumed would basically be a done deal by the time Liu He left DC this week.

The Chinese have become confident - overconfident if you ask me - that their economy has stabilized enough that they have more leverage in the trade talks. They were much more worried last year q3/q4. Trump sees the US economy going from strength to strength while still believing from what I hear that the Chinese economy is too weak to withstand more US pressure.

Liu He’s trip to DC this week is now uncertain. From what I can gather the Chinese have not cancelled the trip but have also not decided it is happening. They are waiting to learn more from the US side today and tomorrow before making a decision on whether to send Liu and his delegation later this week, a lower-level delegation without Liu, or to postpone past Friday. I would not be surprised if we do not know the answer for another day.

It looks like this week will not be the season finale in the series “The US-China Trade Wars”, and if Trump does follow through on his Friday threat it could continue well into the summer, after a hiatus during which both sides reconsider their positions and likely mutually retaliate.

Thanks for reading.

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The Essential Eight

1. US-China trade

Trump ratchets up U.S.-China trade war with new tariff threat - Axios:

A source familiar with the situation told me that the Chinese had been backing off of agreements the U.S. negotiating team believed they had already made. Trump's view, the source said, is that he's negotiating from a position of clear economic strength, especially with the latest strong U.S. jobs numbers. 

"You guys want to mess around with us? Be my guest," the source said, characterizing the president's thinking.

Trump Tweets Corner China’s Xi—Get a Trade Deal Without Looking Weak - WSJ $$

Following Mr. Trump’s renewed warning of raising tariffs, China’s leadership on Monday was considering canceling the trip, said a person briefed on the matter. That hews to a line Beijing has maintained throughout the year-old trade battle that it wouldn’t negotiate under threat.

At a press briefing on Monday afternoon, Chinese Foreign Ministry spokesman Geng Shuang said China’s trade team is still “preparing to travel to the U.S. for consultations.” He didn’t say when the team would depart or if Mr. Liu would still lead it.

Negotiations were initially scheduled to resume Wednesday. Some working-level Chinese officials who were supposed to leave for Washington on Monday were staying put instead, waiting for further instructions, according to the person and another with knowledge of the plan...

Before making a final decision on whether Vice Premier Liu should travel to Washington, the Chinese side is trying to get clarity from the U.S. about Mr. Trump’s intentions regarding the tweets, said the people with knowledge of the plans.

Trump’s Trade War Threat Poses Problems for China and Investors - The New York Times

The Trump administration has reacted much more strongly than the Chinese government expected to an issue that came up in negotiations last week in Beijing between senior Chinese and American officials, the people familiar with the trade talks said. That was when Chinese negotiators said that any concessions in the trade agreement would need to be done through regulatory and administrative actions by the Chinese government, and not cemented in place through actual changes in Chinese law through the country’s legislature.

Question: Did his negotiators know he was going to send this tweet threat?

Yicai Global - Chinese Mainland Stock Markets Close at Two-Month Low, Biggest drop in three years

The Shanghai Composite finished down 5.6 percent at 2,906.46, while the Shenzhen Component Index had fallen 7.56 percent to 8,943.52. The ChiNext Price Index, which tracks growth enterprises listed in Shenzhen, ended 7.94 percent lower at 1,494.89.

Goldman Sachs on Trump's threat of trade tariff on China - CNBC

“The most important near-term indicator to watch will be whether the large delegation of Chinese officials comes to Washington on May 8, as scheduled. If they do, this would indicate that they believe a deal is still reasonably likely,” Goldman said.

Worst Yuan Drop Since 2016 Catches Options Traders Off Guard - Bloomberg

The offshore yuan tumbled as much as 1.3 percent, the most since January 2016, before paring losses to trade 0.68 percent lower at 6.7815 a dollar as of 5:04 p.m. in Hong Kong. The onshore currency -- which hadn’t traded since April 30 due to a holiday -- dropped 0.47 percent, the most in nearly three months, to 6.7667.

‘Is it fake news?’: China censors Trump’s US$200 billion tariff tweets | South China Morning Post

Despite sharp market reactions, the three major official state media outlets – newspaper People’s Daily, broadcaster CCTV and Xinhua news agency – had by noon made no mention of the developments in Washington or market reaction to them.

Meanwhile, Caixin and Sina news – the biggest finance news outlets in the country – said the markets were “affected by information”, but did not elaborate.

Comment: It takes a while for the propaganda department to get its orders, especially after a holiday and a weekend

After latest threats, Chinese see Trump as a Marvel villain out to destroy them - The Washington Post

“Move my fingers, wipe out half of Chinese investors,” said one popular meme circulating on Chinese social media Monday, showing Trump with one real hand and one jewel-encrusted metal hand like the movie villain. “Trump led to global panic with his Thanos-like presence,” said a post on Weibo, showing Trump in full bad-guy suit.

Chinese people turn to ‘Art of the Deal’ to interpret Trump’s latest threats - Inkstone

Chinese speculators called Trump’s move a scare tactic. By making a bold threat, they said, the president was trying to pressure Beijing into making a bigger compromise than it otherwise would.

“A complete collapse of the US-China talks is unlikely. This is just final posturing before reaching a deal,” said Wang Wen, a stock commentator with a million followers on the site who cited Trump’s book.

Trump's Trade War | S38 E1 | FRONTLINE | PBS - May 7, with comments from your truly from Sinocism HQ, as well as several Sinocism subscribers

2. Other US-China issues

In Push for Trade Deal, Trump Administration Shelves Sanctions Over China’s Crackdown on Uighurs - The New York Times

In the fall, the United States was on the verge of imposing sanctions on top Chinese individuals and companies but pulled back after some administration officials said doing so would jeopardize trade talks with Beijing, according to three American officials.

Outrage over China’s repressive practices has grown among officials not working on trade. On Friday, Randall G. Schriver, the assistant secretary of defense for Indo-Pacific security affairs, said at a news conference that the Pentagon had significant concerns about the “mass imprisonment of Chinese Muslims in concentration camps,” which he said could have up to three million people.

The discussion on sanctions had gone through the interagency process, and officials at the State Department and at the National Security Council had voiced their support for the action. The sanctions languished at the Treasury Department, however, as some senior administration officials believed that they should shelve them during the trade talks. The sanctions would have been imposed under the Global Magnitsky Act

Transcript: Secretary of State Mike Pompeo on "Face the Nation," May 5, 2019 - CBS News

MARGARET BRENNAN: I want to ask you about China. Chinese officials are headed here to Washington for trade talks. We heard from a Pentagon official on Friday, a pretty stark description of what is underway right now in China. He- he said that there are 3 million Muslims being rounded up into concentration camps in China. Why hasn't the administration taken any kind of action or sanction against Beijing for this?

SEC. POMPEO: Oh goodness. The- President Trump has pushed back against China in a way that no previous president had--

MARGARET BRENNAN: Concentration camps--

SEC. POMPEO: --they'd- they'd given- they- they had given the Chinese a free pass in every dimension. President Trump is now pushing back on the enormous trade abuses. You've seen me personally speak out about the same situation that you're describing, this- this number certainly up to a million people held in reeducation camps. The Trump administration is going to hold every nation accountable--

MARGARET BRENNAN: You're okay with that term, reeducation camps, not concentration camps, which the Pentagon used?

SEC. POMPEO: We can- we can use lots of different terms to describe what's taking place. This is an enormous human rights violations. I've spoken about it repeatedly-

China denounces U.S. 'concentration camps' remarks - Reuters

Speaking in Beijing, Chinese Foreign Ministry spokesman Geng Shuang said Schriver’s remarks “absolutely did not accord with the facts”, and that Xinjiang was stable and its people were living in harmony in peace.

Pompeo aims to counter China’s ambitions in the Arctic - POLITICO

The Trump administration will throw a spotlight this week on America’s presence in the Arctic, a region the president’s team sees as “an arena of global power and competition,” as Secretary of State Mike Pompeo will put it in a speech Monday in Finland. “Just because the Arctic is a place of wilderness does not mean it should become a place of lawlessness,” he’ll say, according to advance excerpts obtained by POLITICO...

Pompeo’s address, which comes ahead of meetings with officials from the seven other countries with Arctic territory, will take aim at America’s two main strategic rivals, Russia and China. Pompeo will put special emphasis on Chinese behavior, suggesting that Beijing is using the region as the latest venue for its territorial aggression.

“Do we want the Arctic Ocean to transform into a new South China Sea, fraught with militarization and competing territorial claims?” Pompeo will ask.

Two U.S. warships sail in disputed South China Sea - Reuters

The U.S. guided-missile destroyers Preble and Chung Hoon traveled within 12 nautical miles of Gaven and Johnson Reefs in the Spratly Islands, a U.S. military spokesman told Reuters.

Commander Clay Doss, a spokesman for the Seventh Fleet, said the “innocent passage” aimed “to challenge excessive maritime claims and preserve access to the waterways as governed by international law”.

PLA on high alert to safeguard national sovereignty: spokesperson - Ministry of National Defense

Senior Colonel Li Huamin, spokesman for the PLA Southern Theater Command, said that the US guided-missile destroyers USS Preble(DDG-88) and USS Chung Hoon(DDG-93) entered the waters adjacent to the islands and reefs in the South China Sea, without permission of the Chinese government on May 6. In response, the PLA Southern Theater Command soon sent naval ships and aircraft to conduct whole-process monitoring and warned it to leave.

Li pointed out that China has indisputable sovereignty over the South China Sea islands and their adjacent waters. No matter how the foreign warships and planes are provocative, they cannot change this fact.

3. Targeted RRR cut

Central Bank to Cut Reserve Requirement Ratio for Smaller Locally Focused Lenders - Caixin

China’s central bank said Monday it will cut the amount of cash banks must keep in reserve for some small and midsize locally focused lenders from May 15, in a new easing measure to support the economy as external uncertainties increase.

The move is expected to unleash 280 billion yuan ($41.4 billion) in long-term funds into the market, the People's Bank of China said in a statement (link in Chinese ).

“All the funds will be loaned to private and small companies,” the statement said...

The market has become increasingly concerned with potential policy tightening since mid-April, after a central bank monetary policy committee meeting and a gathering of the Politburo, the group of the ruling Communist Party’s 25 top leaders, both indicated a “neutralization” of the monetary policy stance, economists with investment bank China International Capital Corp. said in a note.

However, “the RRR cut this morning has eased these concerns. It is clear that the overall monetary policy stance is unlikely to revert to a ‘de facto’ tightening mode we experience in 1H2018,” they wrote.

Comment: In a note this morning Capital Economics wrote that "The PBOC is requiring that all lending funded by the cut go to small and private firms. Our calculations suggest that the net RMB280bn liquidity injection can be used to expand bank lending by RMB3500bn, enough to boost the stock of outstanding loans to small firms by 10% and overall bank loans by 2.5%."

央行对部分中小银行定向降准 降低小微企业融资成本_中国经济网——国家经济门户

4. Urban-rural development plan

China announces guidelines to promote integrated urban-rural development - Xinhua

The Central Committee of the Communist Party of China (CPC) and the State Council, or China's Cabinet, on Sunday announced guidelines on the promotion of integrated urban-rural development...

The systems and mechanisms for promoting integrated urban-rural development should begin to take shape by 2022. The country will also gradually eliminate restrictions on urban settlement, according to the guidelines.

China aims to put in place more sound systems and mechanisms for promoting integrated urban-rural development by 2035. The urban-rural gap in development and living standards will be remarkably reduced.

By the middle of the century, China will meet the goal of realizing the comprehensive integration of urban-rural areas and rural revitalization and basically realize the target of achieving shared prosperity for everyone.

To achieve these ambitious goals, China will break barriers that restrict the free flow of resources — such as capital, talents, information — between urban and rural areas, and inject new impetus to the countryside.

China will deepen household registration reforms, relax restrictions on urban settlement except for several mega-cities, promote coordinated development between cities and towns, as well as increase the population carrying capacity and attractiveness of mid- and small-sized cities.

中共中央 国务院关于建立健全城乡融合发展体制机制和政策体系的意见

5. New regulation on government investment

Drafting started in 2001…

China releases regulation on government investment - Xinhua

The regulation, made public through a State Council decree signed by Premier Li Keqiang, will go into effect on July 1.

It clearly defines the scope of government investment to ensure the investment focuses on key areas and goes where it is targeted...

According to the regulation, government investment should be channeled to the public sectors where resources cannot be effectively allocated by the market, and mainly target non-operational projects.

As government investment concerns the relations between government and market, the government must "know what to do and what not to do with its investment" and "eliminate inefficiency, waste while avoiding scrambling for profit with the people," the statement explained…

These public sectors, it said, include social services, public infrastructure facilities, agriculture and rural sectors, ecological and environmental protection, significant technical advancement, social management and national security.

Local Governments Face Fresh Curbs on Investment_Caixin

To prevent uneconomic investment and vanity projects, the rules stipulate that authorities must take into account their own fiscal revenue and spending as well as local economic and social development needs. And in an effort to curb illicit borrowing that is still taking place despite earlier bans by the central government, the regulations specify that funding can only come from the fiscal budget and prohibit local authorities from signing deals that effectively lead to projects being funded through capital advances from the companies contracted to build them...

The regulations have taken almost two decades to finalize partly as a result of changing economic, financial and fiscal conditions, including the surge in local government investment and debt. The government started to draft the regulations in 2001, but didn’t solicit public feedback until January 2010 and the final rules were not approved by the State Council until December 2018.

6. Former Sri Lanka spy chief a Chinese spy?

Gota’s Intelligence Czar Caught Red Handed As Chinese Mole – Colombo Telegraph

Colombo Telegraph can exclusively reveal that Hendawitharana, Gotabaya Rajapaksa’s right-hand man in the Defence Ministry, is an agent of the Chinese Intelligence. We can today reveal audio recordings of Hendawitharana, who is also the security head of Shangri-La, telling a Chinese Intelligence Officer to use diplomatic means as a “deterrent action” to sabotage the relationship between the US and Sri Lanka.

Hendawitharana is privy to American involvement in Sri Lanka’s new war against terror because of his role in security at Shangri-La, but his concern is not for his employer, in whose hotel so many innocents died, but instead for his handlers in Chinese Intelligence and his political contacts in the Joint Opposition.

In the audio recording, available exclusively below, Hendawitharana tells his Chinese handler to “appraise your diplomatic channels to work on the US-Sri Lanka relationship.”

“There is some development taking place for which the opposition parties, joint opposition, are making hell of a fit,” he warns. “They want to give Americans free passage for any requirement if the requirement arises for them to occupy Sri Lanka, even making use of the harbours and airports.”

7. Airbnb in China

Airbnb listings in China are littered with racist discrimination | WIRED UK

As the listing reads: “We do not have the permission of the police station” to host Uyghurs, so “please do not book”. Another ad for a flashy Chengdu condo complete with a flat screen TV and a painting of a bulldog explains in English that Tibetan and Uyghur guests are not allowed “Due to local regulation [sic]”.

We found 35 separate Airbnb listings in China with similar clauses explicitly barring certain ethnic minorities, mostly Uyghurs but in many cases Tibetans, another troublesome minority with separatist leanings in Beijing’s eyes. After WIRED contacted Airbnb’s press team for this story, 15 of the 35 were suddenly taken down.

Comment: Airbnb also in the news in China because of the discovery of a hidden camera in a Qingdao listing. Airbnb has apologized - Airbnb致歉青岛民宿装摄像头:永久撤出涉事房源

8. Hermits and regulators

The Hermit Culture Living On in China’s Misty Mountains - Sixth Tone

In the past decade, thousands of young people like Zhang have come to the Zhongnan Mountains hoping to connect with around 600 modern-day hermits, or yinshi, according to estimates by Zhongnan Cottage, a local civic organization...

The Zhongnan Mountains emerged as a popular retreat during the Tang dynasty due to their location near the then imperial capital, Chang’an. Indeed, so many hermits came here that the phrase “take a Zhongnan shortcut” is still used in Chinese to refer to people who get rapidly promoted to high positions...

Since last summer, a high-profile environmental protection campaign in Shaanxi province has demolished illegally built homes across the Qinling Mountains, where the Zhongnan Mountains are located. Although the hermits were not the original targets, some of their homes and temples were razed as part of the campaign.

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Business, Economy and Trade

China State Funds Are Said to Cushion Blow as Stocks Tumble - Bloomberg Signs of government support also emerged outside the stock market on Monday. At least one big Chinese bank offered to sell the U.S. currency as the onshore yuan fell toward 6.80 per dollar, according to traders, limiting depreciation in the Chinese currency after it dropped the most in nearly three months.

China targets steel industry as latest front in its war on pollution | South China Morning Post On Sunday, the Ministry of Ecology and Environment and four other ministries released a joint directive intended to ensure steel mills in the country’s most polluted regions meet “ultra-low” emission standards by 2025. The announcement cited a leading environmental scientist’s estimate that the measure could reduce particulate emissions in areas around Beijing and the Yangtze River Delta by around 20 per cent, and lower the concentration of PM2.5, the deadliest small particles, by as much as 9 per cent.

23% of Major Chinese Cities Post "Overheating" Housing Prices in First Quarter - China Banking News According to the report 23 out of the 100 cities monitored fell into the category of “overheating” in the first quarter, with the Guangdong province city of Zhongshan seeing the largest average price increase at 61%. The report sees a high likelihood of tighter real estate market controls in these cities during the second quarter, with Chinese regulators continuing to stress the policy setting that “houses are for occupation not speculation.”

Chinese banks quietly lower daily limit on foreign-currency cash withdrawals From late last year, the “scrutiny benchmark” for US dollar withdrawals was cut to US$3,000 from US$5,000, according to an official at the Bank of Communications, who requested anonymity. Meanwhile, banks were required to keep a “watch list” monitoring clients who made frequent foreign exchange withdrawals, said the official. Previously, any withdrawals of US$5,000 or more in a single transaction required proof of need, such as an airline ticket for overseas travel or a health certificate for overseas medical care.

Local Governments Cut Pension Contribution Rate to Lower Corporate Burden - Caixin Of the 31 provincial-level regions on the Chinese mainland, at least 27 released plans as of April 30 to cut the pension contribution rate, according to Caixin’s calculation based on government files.

Trump Indonesia Real Estate Project Gets Chinese Government Ally - The New York Times The Trump Organization’s partner in a lavish Indonesian development project boasting a six-star hotel and golf course with President Trump’s name has brought on a new ally: a Chinese state-owned company. The Indonesian partner, the MNC Group, said Tuesday that it had struck a deal with an arm of Metallurgical Corporation of China

China Cashes In on the Cannabis Boom - The New York Times Two of China’s 34 regions are quietly leading a boom in cultivating cannabis to produce cannabidiol, or CBD, the nonintoxicating compound that has become a consumer health and beauty craze in the United States and beyond.

In Depth: Tropical Paradise Turns Demolition Zone - Caixin The Meiya and Guomao communities are part of industrial investment projects invited in by local authorities when Hainan’s property market was booming. Egged on by local government officials, developers pushed forward construction despite lacking necessary documentation, Caixin learned. As a nationwide campaign to cool the property market unfolded and Hainan province shifted policies to reduce reliance on the property industry, Meiya, Guomao and other similar projects lost government support and became the targets of crackdowns // Abridged translation of latest Caixin cover story 海南去地产化风暴 新建海景房被推倒

Liquor Giant Moutai’s Ex-Chairman Booted From Government Advisory Body - Caixin Yuan Renguo, the ex-chairman of Kweichow Moutai Co. Ltd., has been dismissed from his position as a standing committee member of the Guizhou Committee of the Chinese People’s Political Consultative Conference (CPPCC). Yuan has also been relived from two other positions on the committee, according to an official statement (link in Chinese) released Sunday. The statement didn’t offer a reason for Yuan’s dismissal, but Caixin has learned from a source that it may have been related to Yuan abusing his power to designate dealers, leading to an artificial inflation in the price of Moutai liquor during his tenure as chairman from 2011 to 2018.

After Fatal Explosion, Jiangsu Chemical Firms Ordered to Relocate Away From People - Caixin According to the plan, the government will speed up the relocation of smaller chemical companies away from densely populated urban areas, and those that stay open will have to beef up security standards or close their doors by 2020. Chemical plants located within a kilometer (0.6 miles) of the Yangtze River will also have to relocate or close by the same date.

Yicai Global - CSRC Goes High-Tech to Rein In Margin Trading CSRC will infer whether an account is used for asset allocation based on artificial intelligence, algorithms, computing power and data with this program

Admissions scandal puts pharmaceutical empire under spotlight - Global Times The company's history and financial situation have been subjected to intense scrutiny, including its so-called "miracle-making" founder, former instances of bribery and massive sales expenses. Zhao Tao, chairman of Shandong Buchang Pharmaceuticals (Buchang Pharma), was reported to have paid $6.5 million to an admissions consultant to get his daughter into Stanford University, California.

Luckin Coffee IPO: More a Tech Startup Than a Drinks Company - Bloomberg Luckin posted 841 million yuan ($125 million) in revenue last year, exploding from 250,000 yuan the year prior. But its operating expenses were three times higher than sales at 2.4 billion yuan. And it wasn’t even materials, store rentals or admin expenses that blew out the bottom line.  Marketing costs were 746 million yuan last year. To make every 100 yuan from selling coffee, Luckin spent 152 yuan to produce and market that cup – not including rent and general expenses.

China sees 195 mln domestic tourist trips during May Day holiday - Xinhua China saw a total of 195 million domestic tourist trips made during the four-day May Day holiday, up 13.7 percent from last year, according to the Ministry of Culture and Tourism. Tourism revenue reached 117.67 billion yuan (about 17.48 billion U.S. dollars) during the holiday which lasts from Wednesday to Saturday, up 16.1 percent, according to the ministry.

China bank card transactions surge in holiday - Xinhua Total transactions through the China UnionPay network soared to 1.29 trillion yuan (around 192 billion U.S. dollars) between May 1 and 4, up 42 percent on a daily basis from last year's May Day holiday, the Shanghai-based agency said. Thanks to the extended holiday and sunny weather in many parts of the country, tourism-related consumption was greatly boosted.

Politics and Law

Ex-Big Oil Bosses Aid Provincial Chief Investigation - Caixin He Jiuchang, 58, who was chairman of the state-owned Shaanxi Yanchang Petroleum (Group) Co. Ltd. from 2015 to 2017, began aiding the investigation in late January, the sources said. His predecessor Shen Hao, 66, who was chairman from 2007 to 2015, began assisting the investigation in early February, they said. The sources said they believe both men were helping with the investigation of Zhao Zhengyong

Provincial Party Chief’s Childhood Pal Made Millions From Deals With State Oil Giant-Caixin Yu Wei, chairman of chemical-maker Shaanxi Haian Industry Co. Ltd., was detained as part of the investigation into Zhao Zhengyong just days after the former chief of Northwest China’s Shaanxi province fell from grace in January, Caixin has learned from multiple sources with knowledge of the matter.

Missing Chinese student activist accuses police of abusing him in detention | South China Morning Post In a video and written testimony published after he disappeared last week, Peking University student Qiu Zhanxuan said local police “tormented” him over a five-day period in late February. Intimidation tactics included a forced strip-search and listening to Xi’s marathon speech from the Communist Party’s five-yearly congress in 2017 on high volume.

空降地方的省部级要员回京 曾在“老虎”落马后补位_凤凰网资讯 Cai Zhenhong returns to Beijing after 4 years as propaganda head in Hunan Province. Cai is joining the All China Federation of Supply and Marketing Cooperatives as a member of its Party Committee. Liu Shiyu also went to the ACFSMC when he was replaced as head of the CSRC. Is the ACFSMC a dumping ground for cadres without a political future, or is Xi looking to revitalize it?

中共中央办公厅 国务院办公厅印发《法治政府建设与责任落实督察工作规定》-新华网 Central Committee General Office and State Council Office issue "Rule of law government construction and responsibility to implement supervision work regulations"

Senior CPC official stresses curbing "formalities for formalities' sake" practices - Xinhua A senior Communist Party of China (CPC) official on Monday urged central and state institutions to curb the practice of "formalities for formalities' sake" so as to alleviate burdens on primary-level authorities. Ding Xuexiang, a member of the Political Bureau of the CPC Central Committee, member of the Secretariat of the CPC Central Committee and secretary of the working committee for central and state organs, made the remarks when presiding over a meeting on the issue.

Senior CPC official stresses role of IT in promoting high-quality development - Xinhua Senior official of the Communist Party of China (CPC) Huang Kunming on Monday called for advancing the building of a digital China and smart society, stressing the role of information technology in promoting high-quality development in the country. Huang, a member of the Political Bureau of the CPC Central Committee and head of the Publicity Department of the CPC Central Committee, made the remarks in a keynote speech at the opening ceremony of the second Digital China Summit.

Security lapse exposed a Chinese smart city surveillance system | TechCrunch The system monitors the residents around at least two small housing communities in eastern Beijing, the largest of which is Liangmaqiao, known as the city’s embassy district. The system is made up of several data collection points, including cameras designed to collect facial recognition data. The exposed data contains enough information to pinpoint where people went, when and for how long, allowing anyone with access to the data — including police — to build up a picture of a person’s day-to-day life. // By the US embassy in the new embassy district. This deployed all over Beijing or just around embassies? It must be much harder for foreign intel services in operate in China now, and I doubt Chen Guangcheng could have been brought into the US embassy now

Language Log » More misreadings by Xi Jinping Two of Xi's recent báizì 白字 ("miswritten / mispronounced character") that the CCP propaganda machine tries awkwardly to cover up: Reading “jīngzhàn xìnì 精湛细腻” ("consummately exquisite") as “jīng shén xìnì 精甚细腻" ("very refined and exquisite”). Reading“shànyǎng 赡养” ("support; provide for") as “zhānyǎng 瞻仰” ("pay respect").

First five volumes of major academic project on Marxism unveiled - Xinhua 

Foreign and Defense Affairs

Fed up Canada tells U.S. to help with China crisis or forget about favours - Reuters With no cards to play against China without risking significant economic damage, Canada has launched a full-court press in Washington, which is negotiating its own trade deal with Beijing...“It’s a very challenging situation. When we raise it with the Americans they just say, ‘Dealing with the Chinese is tough’,” said a Canadian government source.“It’s also not clear who we should be targeting since you never know who is up and who is down in the administration at any given point,” said the source, who requested anonymity given the sensitivity of the matter.

With lives at stake, Canada’s misguided vision of China demands a careful reboot - The Globe and Mail It’s also time to re-examine the received wisdom that shapes our China strategy, purging it of a sort of malware encouraged by China to delude the naive. This includes such fictions as the idea that China is inherently peaceful and has no territorial ambitions, that it abides by a policy of non-interference in other countries, that trade is a favour it bestows on friendly nations, and that access to its leaders is an end and reward in itself. - David Mulroney was Canada’s ambassador to China from 2009 to 2012

Sack 'nutter' spy chiefs to fix relations with Beijing, Paul Keating urges - The Age Former prime minister Paul Keating has launched an extraordinary attack on Australia’s spy chiefs, calling them “nutters” and urging Bill Shorten to sack them to improve relations with China if he wins the election...He praised China as "a great state" and the world's soon-to-be-largest economy, saying: "If we have a foreign policy that does not take that into account, we are fools. He attacked the role of John Garnaut, a former Sydney Morning Herald and Age China correspondent who became an adviser to former prime minister Malcolm Turnbull and co-wrote an influential, classified report on Chinese influence in Australia.

Foreign interference laws: Paul Keating may have to declare as foreign agent Former Prime Minister Paul Keating might have to register on the Turnbull government's agents of foreign influence list because he sits on an advisory council for a Chinese government development bank, Fairfax Media understands.

China says it won't take part in trilateral nuclear arms talks - Reuters “China opposes any country talking out of turn about China on the issue of arms control, and will not take part in any trilateral negotiations on a nuclear disarmament agreement,” Geng told a daily news briefing, when asked about Trump’s remarks.

Andrew Batson's Blog | Musings on China, books, economics, jazz, history, et cetera It’s become increasingly clear that the “debt-trap diplomacy” meme started by Indian commentator Brahma Chellaney is not an accurate description of how the Belt and Road actually operates

US steps up belt and road offensive saying it offers fairer deals than China’s ‘debt trap’ | South China Morning Post The video – which has been subtitled in six other languages, including Chinese – repeated warnings from the Centre for a New American Security, a US think tank, that taking part countries would face the risk of excess debt, environmental problems and losing control of their strategic assets if they signed up for the transcontinental infrastructure project.

U.S. must cultivate Central America or lose out to China: Panama president-elect - Reuters The U.S.-educated former agriculture minister and businessman said that if the United States neglected a region it has long considered its backyard, it was inviting China to fill the gap. “We need, and we have asked, that they look toward the region more - the region, not just Panama,” Cortizo said in an interview with Reuters before voting on Sunday.

Senior legislators study Xi Jinping Thought on Diplomacy - Xinhua Members of the National People's Congress (NPC) Standing Committee Chairpersons' Council on Sunday studied Xi Jinping Thought on Diplomacy. As the latest theoretical achievement and precious spiritual wealth of Chinese diplomacy, the Thought provides fundamental principles and a guide to action for the work of foreign affairs in the new era, according to a statement issued after the meeting, presided over by Li Zhanshu, chairman of the NPC Standing Committee.

Hunter Biden Invested in Chinese Surveillance Technology - The Intercept Hunter Biden’s investment company in China, known as Bohai Harvest RST, has pooled money, largely from state-owned venture capital, to buy or invest in a range of industries in the U.S. and China…In 2017, Bohai Harvest bought into Face++, part of a $460 million haul in the company’s Series C investment round. Bohai Harvest’s website features Face++ in its portfolio of investments.

As Chinese Flock to Siberia’s Lake Baikal, Local Russians Growl - The New York Times “If we let them, the Chinese will take over,” said Mr. Sukhanov, 57, who fled St. Petersburg decades ago for a bucolic life by the Siberian lake, the world’s largest, deepest body of fresh water. “They will just steal all the money and the local people will get nothing.”

Russia struggles to attract Chinese capital to its Far East | Financial Times $$ “The amount of Chinese investments in the Russian Far East fully corresponds with the state of the market and infrastructure in the region,” said Ivan Zuenko, a research fellow at the Center for Asia Pacific Studies of the Far Eastern Branch of Russian Academy of Sciences. “It seems small only in comparison to the inflated expectations that Moscow and Beijing have set for the cross-border investment co-operation in recent years.”

Cyber officials call for coordinated 5G security approach - AP The proposals reflected the U.S. concerns, though some wording also appeared to be aimed at raising the bar for Chinese suppliers. The document said “security and risk assessment of vendors and network technologies” should be taken into account, as well as “the overall risk of influence on a supplier by a third country,” especially its “model of governance.” “Security and risk assessments of vendors and network technologies should take into account rule of law,” it said.

‘Mysterious' nuclear institute opens to public - Global Times 

China regulates granting of subsidies on military scientific research - Xinhua 

CMC issues guideline on advancing military vocational education - Xinhua 


Foxconn chief Gou tells China to recognise Taiwan’s independence | Financial Times $$ China “must acknowledge the existence of the Republic of China”, Mr Gou told reporters on Monday, referring to the official name of Taiwan in a move that highlights his challenge of not being seen as pandering to Beijing.  He added that he would not consider meeting Chinese president Xi Jinping unless he had received clarification from Beijing on its policy towards Taipei and had become Taiwanese president himself.

Tech and Media

Huawei to build chip plant near Arm Holdings HQ in Cambridge | Financial Times $$ Huawei’s decision to make chips in Cambridge will create powerful competition for the region’s semiconductor talent. The company said it might eventually also develop artificial intelligence software there.

China PC online game market report 2019 | PC Gamer If you're surprised by the size of China's PC gaming market, you shouldn't be. It's been exploding in growth since 2001, when the total market was only worth $100 million, Niko Partners' founder Lisa Cosmas Hanson told me in an interview. What is surprising, however, is how the Chinese PC games market has remained resilient in spite of heavy government regulations.

‘Avengers: Endgame’ Crowned Top Foreign Title of All Time in China – Variety 

Sequoia China to cut up to 20 percent of investment staff as tech growth slows - sources - Reuters 

Baidu and Bytedance in Legal War Over Stolen Search Results- PingWest

Energy, Environment, Science and Health

Association nominates Baidu CEO as CAE academician, causing heated debate - ECNS The nomination of Robin Li for the country's most acclaimed academic title in engineering has triggered heated debate following some fraudulent medical advertising found on the major Chinese search engine he leads. But some supporters suggested Li was nominated for his role in promoting artificial intelligence in China, which now seems to be rejected by CAST.