Two sessions; Controlling core technologies; Socialist market economy in the New Era

The Two Sessions start in two days. They will be several days shorter than normal this year (thankfully). There is lots of speculation about the Premier’s work report, what the GDP target will be if there is one, and what Hong Kong-related moves may occur. I would also add that there are some even weirder than normal political vibes right now (I know, that is not an approved political science term), so there is always a chance this year’s meetings will be more exciting than usual.

The reform “guideline to accelerate improving socialist market economy in new era” that was released yesterday certainly is an interesting indicator of what may be discussed at the NPC, and what may go into the next five year plan. In yesterday’s newsletter I highlighted the guideline, and specifically the section on technology, but I realized after I hit send that I put in the wrong link for the document. Apologies. Here is the correct link, with my comments:

中共中央 国务院关于新时代加快完善社会主义市场经济体制的意见

(4) Comprehensively improve the scientific and technological innovation system and organizational system. Strengthen the construction of the national innovation system, compile a new round of national mid- and long-term scientific and technological development plans, strengthen the national strategic scientific and technological strength, and build a new national system for key core technologies under the socialist market economy


It seems interesting that none of the official English-language reports on this guideline mention this section about technology, a section that once emphasizes once again the drive to achieve self-reliance in core technologies.

This goals of indigenous innovation and technological self-reliance that long predate Xi Jinping’s rule have become even more imperative as the US-China relationship has deteriorated, and especially after the Trump administration laid bare the vulnerabilities of firms like ZTE and especially Huawei.

The technology section in this guideline should serve as a reminder to people who think that somehow a different US president could take US-China relations back to an earlier Era. The damage is done, I do not believe anyone serious in Beijing thinks they will ever be secure so long as they are reliant on the US for strategic technologies or services. And increasingly the same strategic insecurity applies in the financial sector.

As this newsletter discussed last year during the trade negotiations, my sources told me that Xi had described the new normal for the US-China relationship as “缠斗 embracing while fighting”. We now seem to be more in fighting mode, and will likely be there at least through the US elections. But even if somehow the embrace comes back, my money is on it being an embrace of expedience to buy the PRC time as it pursues goals like the technology ones outlined above that will allow it to selectively decouple from the US on its own terms.

Thanks for reading.

The Essential Eight

1. The two sessions

Two sessions to tackle 'unprecedented' task - Global Times

On Friday, a meeting chaired by President Xi Jinping focusing on the annual government work report stressed expanding various policies to ensure the "full completion of poverty alleviation targets as well as building a moderately prosperous society in all aspects," the Xinhua News Agency reported.

While the goal to eradicate absolute poverty should have no issues regarding being reached, the target; doubling the 2020 GDP based on 2010 levels is seemingly an "impossible" mission, according to Tian Yun, vice director of the Beijing Economic Operation Association. Specifically, meeting the goal would require a GDP growth of 5.6 percent this year - a very tough job to do given the current circumstances, Tian told the Global Times on Monday...

there are two major plans for this year's two sessions, according to NPC deputies, CPPCC National Committee members and economists. The first is discussing whether or not to raise the deficit to GDP ratio above the long-held 3 percent line that could unleash trillions of yuan in investment and other stimulus measures; the second is to discuss the issuance of a special government bond to fund more stimuli. Both of the plans would have to be approved by the NPC.

Some analysts have estimated that the deficit to GDP ratio could rise to as high as 8 percent to cope with an economic downturn, while the special government bond could raise as much as 5 trillion yuan.

How Has China Handled the Economic Fallout of Covid-19? - YouTube

How will economic issues playout at China's upcoming National People's Congress? Scott Kennedy, CSIS Trustee Chair in Chinese Business and Economics, explains China's efforts to economically recover from the outbreak of the novel coronavirus.

China likely not to set numerical GDP growth target: GT poll - Global Times

More former officials as well as top economists believe that senior Chinese officials will not release a specific numerical growth target for this year during the upcoming two sessions, although some still believe that one might still be released to better coordinate policies, the GT survey showed...

Such a move could also be of great significance this year in particular, as dropping a specific target would free up more room for top policymakers and local officials to divert more resources to address rising challenges posed by COVID-19 such as unemployment and people’s livelihoods rather than pumping up GDP figures, they added.

Comment: 8% seems way high given most people think it will be somewhere north of 3%.

习近平的扶贫故事 - 中国军网

long and effusive Xinhua piece - "Story of Xi Jinping's poverty alleviation", opens and concludes referring to him as "People's Leader 人民领袖"


Each touching story connects the indissoluble bond between the people's leader and the cause of poverty alleviation...


From the educated youth who came to Liangjiahe to the People ’s Leader who serves the country for the people, Comrade Xi Jinping walked the winding mountain roads , the rural roads covered with snow and snow, and the field trails among the rolling waves of wheat ... … In both the wind and the rain, going forward....

Comment: The 2018 NPC ended term limits for Xi, might this one further enshrine him some way, like as the People's Leader who among other things has led the People's War on the pandemic?


People's Daily short video on Xi's "golden phrases" about poverty alleviation at NPC's past.

Experts predict 3 pct growth in China’s military budget amid rising defense needs - Global Times

In a Global Times survey with nine military experts, three calculated a growth rate of around 3 percent, leading to a possible budget of about 1.22 trillion yuan ($171.5 billion), one predicted a 5 to 6 percent growth to about 1.25 trillion yuan, three said it was difficult to forecast, and two said a shrink is possible.


Liu Xiaobing, a professor at Shanghai University of Finance and Economics and also a member of the National People’s Congress, said he had submitted a bill asking the NPC to draft a law that demands the government to make more information public. Currently there is only a state council regulation for this purpose and Liu hopes to formalize it in a law. Liu submitted a similar bill last year but it was not adopted by the NPC. Liu said transparency is important than ever in China given the virus outbreak.


Huang Wei, an official involved in drafting the Civil Code, said they received many letters asking to legalize gay marriage. But Huang dismissed these letters by saying that they seem to be from some “organized” campaign, since the letters are in the exact same language and envelops. The NPC has made it clear that gay marriage will not be legalized.


CCP International liaison department wrote to foreign parties about China’s experience of resuming production and work under epidemic control and its results. The department also pointed out that the two session will be a weathervane for China’s future policy. It will be both influential to both China and the world.

Tech brings political advisers closer to public - People's Daily

The CPPCC National Committee organized in the past year 26 major policy talks nationwide, which were attended by more than 90,000 people and watched online by more than 9 million people. These were aimed at improving people's understanding of major decisions made by the Party and the government.

It also made a video series, featuring lectures by political advisers, that not only focus on policies but also major social issues.

The CPPCC also strengthened exchanges with other countries through activities including inviting diplomatic envoys from Asian countries in China and young parliamentarians from African countries to visit the headquarters of the CPPCC National Committee.

Thirty eight government targets met in 2019 - Xinhua

The State Council, China's cabinet, released a table on the implementation of quantitative targets listed in last year's government work report.

2. Improving the socialist market economy in the New Era

China sets out stall ahead of NPC with pledges for market-oriented, local government finance reforms | South China Morning Post

The document largely reiterates Beijing’s earlier reform pledges announced in a blueprint in late 2013, although little progress has been made in aspects of opening up the yuan capital account and liberalising the land market.

The new policy document insists that China will promote the strategic role of a state economy...

In a break from the previous macroeconomic policy framework, China will now put employment policy at centre of the system, along with traditional monetary and fiscal policies.

In particular, it said China will maximise the use of big data and artificial intelligence to spot major economic and social risks.

Guideline set to inject new momentum into growth - China Daily

Specifically, the guideline calls for modernizing the system of property rights, such as those for State-owned assets, natural resources and intellectual properties, as well as better safeguarding the economic property rights of privately owned enterprises based on laws and fairness.

It also outlines the agenda of deepening reforms in land, labor, capital and data markets to achieve market-oriented flow and pricing of those production factors.

The guideline will direct the country's economic reform efforts toward redressing institutional obstacles to the country's pursuit of high-quality development, the National Development and Reform Commission, the country's top economic planner, said in a statement.

Peng Sen, president of the China Society of Economic Reform, said the guideline is a declaration of the top leadership's determination to push a new round of market-oriented reforms to empower sustainable, high-quality economic growth in the face of rising challenges...

The country will build a new opening-up landscape with a focus on the Belt and Road Initiative, expedite the development of free trade pilot zones and ports and actively participate in the revolution of global economic governance, it said.

China's opening-up has evolved into a new phase whereby more focus will be given to aligning domestic rules with world-class international markets, said Wang Yiming, a national political adviser and a senior economist.

"Next, the country will grant more discretion to pilot free trade zones and ports in initiating reforms and innovations, to build places to pioneer institutional opening-up," Wang said.

China unveils guideline to accelerate improving socialist market economy in new era -

Noteworthy that there is no mention of the technology section in the official translations...

People’s Daily commentary on the document - 加快构建高水平的社会主义市场经济体制 - 本报评论员 《 人民日报 》( 2020年05月19日 04 版)


3. TSMC, Taiwan. tech war

U.S. Is Using Taiwan as a Pressure Point in Tech Fight With China - The New York Times

In a series of private discussions through last year, officials from the departments of Commerce, State and Defense urged T.S.M.C. to open an American facility as a way to strengthen political ties and guard against threats from China that could lead it to cut off shipments to the United States.

For many months, T.S.M.C. rebuffed those offers, citing costs. East Asia is the center of the global electronics supply chain, and Mark Liu, the company’s chairman, had said that the major stumbling block was the greater expense of operating in the United States...

Analysts said spiraling tensions between the United States and China might also have forced T.S.M.C.’s hand. According to its latest annual report, a fifth of its revenue is from companies headquartered in China, but 60 percent is from customers based in North America.

Chips and Geopolitics – Stratechery by Ben Thompson

In short, TSMC is the best chipmaker in the world, no matter what vector of performance you care about. And with that came an entirely new class of problems, not just for TSMC, but also Taiwan...

First, while we learned in 2016 that technology was inseparable from domestic politics, the lesson in 2020 should be that technology is inseparable from geopolitics. It is chips that gave Silicon Valley its name, and everything about this chip decision is about geopolitics, not economics.

Second, at some point every tech company is going to have to make a choice between the U.S. and China. It is tempting to blame the tension between the two countries on Trump, but the truth is that China, particularly under Xi Jinping, has been significantly hardening its rhetoric and actions since before Trump was elected, and has been committed to not just catching but surpassing the U.S. in technology for years. There is a fundamental clash of values between the West and China, and it is clear that China is interested in exporting theirs. At some point everyone will be stuck in the middle, like TSMC, and Switzerland won’t be an option.


In the preface of his new book, Lu Feng of Peking University criticized the idea that introducing more foreign technology to China will necessarily help China’s innovation. Lu argued that China needs to rely on itself to develop many of the technologies. Lu has been among the most fervent advocates for technology self-reliance in the past decade and he has been advising the government for quite a long time.

虽然本书收录的研究报告或文章涉及创新研究的许多方面,但它们共同的主题可以概括为一个:技术只能自己干。这个观点以稍微理论一点的语言表达就是:中国工业要想创新就必须自己掌握技术,而要掌握或获得技术就必须进行和坚持自主的技术研发 … 引进派喜欢说,创新要站在巨人的肩膀上。从逻辑上讲,站在“巨人”肩膀上创新是在“巨人”的成就及其背后的知识、技能和经验基础上创新;如果无力吸收和利用“巨人”的这些“成果”,非但不可能创新,反而只能被“巨人”踩在脚下——这是由中国一些工业部门和企业的经验所证明的。

Comment: The idea that the PRC may invade Taiwan to gain control of TSMC has been going around for a while. Seems crazy, but times are crazy

4. Hong Kong

港區人大陳曼琪兩會提案 人大訂香港國家安全法 不經立法會直接實施 | 立場報道 | 立場新聞

Maggie Chan (陳曼琪); Hong Long delegate to the NPC, will propose to the NPC this week that it implement Article 23 (the National Security Law) without going through LegCo.

Comment: The SCMP reported this possibility yesterday, though without mentioning Chan -Caught between China and the United States: why Hong Kong is the latest battleground in the rivalry and Article 23 could be the tinder to the explosive relationship | South China Morning Post

And as I noted yesterday when discussing the SCMP story "And this is why the US State Department has delayed the release of the Congressionally mandated annual report on Hong Kong. A person close to the decision told me almost three weeks ago that they did not want to issue the report only to have Beijing completely change the landscape just a few weeks later at the NPC"

Coronavirus: Hong Kong extends social distancing rules to June 4, threatening annual Tiananmen Massacre vigil | Hong Kong Free Press HKFP

Hong Kong is to extend its coronavirus social distancing measures – including a ban on public gatherings of more than eight people – to June 4, following the emergence of three local infections. However, religious gatherings will be allowed to resume at up to 50 per cent capacity.

Hong Kong leader defends 'proper' process behind controversial national anthem bill | Hong Kong Free Press HKFP

If the national anthem bill is passed, anyone found guilty could face a fine of up to HK$50,000 and three years in prison. Critics have said the proposed law threatens to erode freedom of expression in the city.

Central govt should set up special agencies in HK to enhance Chinese history education: NPC deputy - Global Times

The central government should establish special agencies in the Hong Kong Special Administrative Region (HKSAR) to improve Chinese history education and enhance a sense of national identity among local students. These could be either government agencies or non-profit organizations through which the mainland could dispatch teachers or experts to the SAR, a Hong Kong deputy to the National People's Congress (NPC) told the Global Times.

Young Hong Kong people lack an understanding of the country's history, culture and current affairs, while local education institutions have been struggling with a lack of teachers, and we hope the central government can help us tackle this problem, Tam Yiu-chung, former chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong and an NPC deputy, told the Global Times in a recent interview.

Hong Kong Government Broadcaster Axes Satirical Show After Police Criticism - RFA

RTHK issued an announcement apologizing "to anyone offended by the station's output in recent months," and announcing the suspension of the popular Chinese-language satirical show "Headliner."

The move came shortly after the government's Communications Authority issued a warning to RTHK for "denigrating and insulting" the police in a February episode of the show.

5. The outbreak

Chinese mainland reports six new COVID-19 cases, including three imported - CGTN

The Chinese mainland reported three new domestic COVID-19 cases and three new imported cases on Monday, according to China's National Health Commission (NHC). No new deaths were reported.

The commission also reported 17 new asymptomatic patients.

Chinese city threatens to prosecute people who break quarantine as coronavirus continues to spread | South China Morning Post

In a statement published on Tuesday, the police in Shulan, a city of 700,000 people in Jilin province, said those who failed to follow the stay-at-home orders or tried to hide respiratory illness-related symptoms would be subject to administrative or criminal sanctions.

Those who spread rumours or misinformation would be held responsible too, the statement said.

Scientists in China believe new drug can stop coronavirus pandemic 'without vaccine', - AFP

Sunney Xie, director of the university's Beijing Advanced Innovation Centre for Genomics, told AFP that the drug has been successful at the animal testing stage.


ThePaper reported that at least seven people in one residential compound in Wuhan have been confirmed positive of the virus in the past nine days.


Zhang Dingyu, president of the Jinyintan hospital and deputy head of the Wuhan CDC, told The Paper that the 10-day massive test is necessary as it will be able to track down most of the asymptomatic cases and reduce the risks of transmission. But he admitted that this is not to say there will be no more new cases after the massive test. “Nobody can promise that,” he said.


CCTV reported that a state council liaison team is in Wuhan instructing local authorities on the massive COV-19 test. It said all the workers returning to work, especially those returning to work in other provinces, must pass the test first. 


According to Hubei Daily, on Monday, Wuhan party boss Wang Zhonglin held a video conference with the cadres asking them to properly implement the instructions on the massive test.

Wuhan carries out 1 million tests in a week, sees asymptomatic rate dropping - Global Times

Hubei province conducted 1.5 million nucleic acid tests between May 11 and 17, with 72 percent, or roughly 1.05 million, done in Wuhan, as the city carries out its plan for universal tests on all residents.

The asymptomatic positive rate was 46 out of 1 million tested, a significant drop from 660 out of 1 million in April. The dropping silent carrier rate suggests an improved epidemic control situation, and the group has low infectivity, a city official said at a press conference on COVID-19 control on Monday.

Foreigners well protected in China's Guangzhou during COVID-19 pandemic - People's Daily

In an open letter to its Chinese and foreign residents, Guangzhou required that service agencies and individuals treat Chinese and foreigners equally, and do not discriminate based on nationality, skin color or gender. The letter also provided 20 how-tos on entering 16 kinds of facilities in the city, as well as extensive tips on living in Guangzhou, to make sure foreign residents enjoy the same services in the city as their Chinese peers do.

China's Guizhou reopens all cinemas, exhibition centers as epidemic wanes - Xinhua

Visitors to cinemas are required to book tickets online, have their temperatures taken, sit separately and wear masks during their stay. In addition, theaters are only allowed to book 50 percent of capacity, according to an announcement released by the provincial COVID-19 prevention and control headquarters.

6. US-China

Top medical journal blasts Trump for factual error in letter threatening WHO cutoff - POLITICO

The journal has not been shy about criticizing Trump. Its editor, Richard Horton, previously called Trump's WHO "a crime against humanity" and urged others to "resist Rand rebel against this appalling betrayal of global solidarity." Last week, the Lancet published an unsigned editorial op-ed blasting Trump's early handling of the virus and calling for him to be ousted by voters this fall.

Horton fired back at Trump on Twitter on Monday night, referring to his letter to the WHO. "Pr Trump claims we published reports in Dec 2019 claiming a virus was spreading in Wuhan," Horton wrote. "Untrue. The first paper describing 41 patients with COVID-19 was published on Jan 24. That paper identified symptom onset of the first Wuhan patient as Dec 1. No cover up. Full transparency."

The full text of the Trump letter

China Ramping Up Purchases of U.S. Farm Goods - WSJ $$

China has significantly stepped up purchases of U.S. agriculture products in the past two months, according to U.S. officials, even as purchases in other sectors fall short of expectations under the first phase U.S.-China trade deal.

Joint Letter Calls on SEC and PCAOB to Ensure China Complies with U.S. Securities Laws and Regulations - Committee on the Present Danger: China

On the heels of President Donald Trump’s critical intervention to prevent the federal Thrift Savings Plan (TSP) from investing an estimated $4.5 billion in Chinese Communist Party (CCP) companies, fifty-one former senior U.S. government officials, influential financial sector figures, China experts, religious leaders and other patriots issued today an open letter urging that his logic be applied to the nation’s capital markets more broadly.

Comment: Wouldn’t be surprised if Trump pushes harder on this issue within the next few days.

新证券法上市公司监管制度解读之七:完善监管执法手段 查处证券违法违规-证券日报网

Securities Law amendments passed in March forbid Chinese companies from providing information to foreign regulators without approval of the CSRC or the State Council.


Trump’s push for listing Chinese firms to follow US accounting rules another assault from Washington: analysts - Global Times

"It's an obvious threat that points a gun at Chinese companies. Trump wants to shut China's access to the US capital market. But chances the rule will be revised are very slim. If the SEC revises how it treats Chinese firms, rules for other foreign companies also need to be modified accordingly," Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Friday.

Nasdaq to tighten listing rules, restricting Chinese IPOs - sources - Reuters

While Nasdaq will not cite Chinese companies specifically in the changes, the move is being driven largely by concerns about some of the Chinese IPO hopefuls’ lack of accounting transparency and close ties to powerful insiders, the sources said...

The new rules will require companies from some countries, including China, to raise $25 million in their IPO or, alternatively, at least a quarter of their post-listing market capitalization, the sources said...

The proposed rules will also require auditing firms to ensure that their international franchises comply with global standards, the sources said. Nasdaq will also inspect the auditing of small U.S. firms that audit the accounts of Chinese IPO hopefuls, the sources added.

China to revive IPOs in London to hedge against Wall St’s growing hostility, amid options aplenty for capital-hungry firms | South China Morning Post

China will push ahead with listings of domestic companies in London, as its seeks to move away from the United States as a major source of overseas fundraising amid an escalation in tensions between the world’s two largest economies.


Xiakedao, the WeChat account of People’s Daily overseas edition, wrote about how the “hawks” in the White House pushed the Federal Retirement Thrift Investment Board to drop its investment in Chinese stocks, and said the hawks are starting a dangerous new cold war with China.


Zhongsheng of People’s Daily seized on a quote from Trump saying the Americans had started working on the COV-19 vaccine on January 11, suggesting that the US started the research way too early, and therefore they must know something about the virus earlier. Zhongsheng said instead of blaming China, it is the US that needs to be more transparent in its handling of the virus.


People's Daily comment - The most powerful nation does not live up to its reputation when dealing with the global pandemic.

The PD editorial lashes out at the US government for its dereliction and irresponsible behavior in the light of the coronavirus outbreak. It slammed the US government for blaming everything on China.



What did the US do before and after January 11? - People's Daily Online

as the “first” US cases of coronavirus were reported on Jan. 21, is it reasonable to think that the US started working on a vaccine when not a single case had been reported in the country?

One reasonable explanation is that the Trump administration not only knew about the virus, but also knew about the threat it posed much earlier than they claimed, and they never told the truth to the American people...

What else is Uncle Sam hiding? How many more lives will be lost due to the government’s failure to respond to the coronavirus? Donald Trump has some explaining to do to the world.

A modern tragedy? COVID-19 and US-China relations - Tom Christensen - Brookings

The brief calls for a ceasefire between Beijing and Washington on criticism of the two countries’ initial responses to the SARS-CoV-2 virus, accompanied by a commitment to an eventual international investigation of what went wrong in all countries during the early phases of the pandemic. The brief concludes with six areas in which the United States and China should seek cooperation: to share best practices to stem the further spread of the coronavirus; to develop effective vaccines at the earliest possible date; to prepare in advance for mass manufacturing and global distribution of vaccines that are developed; to assist the neediest countries in fighting the disease; to manage debt crises and combat famines in the developing world that might result from the pandemic; and to preserve global trade by privileging diversification of supply chains and national strategic reserves over economic nationalism and less efficient forms of production.

Chinese premier congratulates Honeywell's new project in Wuhan - Xinhua

Chinese Premier Li Keqiang sent a congratulatory letter on Tuesday to the opening ceremony of U.S. industrial conglomerate Honeywell's emerging market headquarters and innovation center in central China's Wuhan City...

In the face of the economic downward pressure at home and abroad, China's commitment to deepening reform and opening-up and welcoming overseas enterprises to expand investment and cooperation with China will remain unchanged, the premier said in the letter.

The United States Designates Company Providing Services for Iranian Airline Mahan Air’s Operations in China - United States Department of State

Today, the United States designated Shanghai Saint Logistics Limited, a PRC-based company that provides general sales agent services for the Specially Designated Global Terrorist Iranian airline. The United States designated Mahan Air in 2011 under a counterterrorism authority for providing material support to Iran’s Islamic Revolutionary Guard Corps – Qods Force (IRGC-QF) and again in 2019, under a weapons of mass destruction authority for shipping United Nations-restricted missile and nuclear items to Iran.

U.S.-China Feud Over Coronavirus Erupts at World Health Assembly - The New York Times

Ryan Hass, a China scholar at the Brookings Institution, said a familiar pattern had emerged. “Whenever Trump withdraws the U.S. from international leadership, Xi announces that China will step forward,” said Mr. Hass, who was a senior Asia director on President Barack Obama’s National Security Council. “Xi has been ruthlessly opportunistic about seeking to exploit America’s withdrawal from global leadership for China’s advantage.”

[视频]国际锐评:美国政客玩弄“台湾”议题只能是痴人说梦自取其辱 "US politicians who play the "Taiwan" issue can only make a fool of themselves"_CCTV节目官网-CCTV-1_央视网(

Today's CCTv attack on the US in an "international sharp commentary" is on the US' role in pushing for the WHO to restore observer status to Taiwan

The 5 Ways the Pandemic Is Hardening U.S.-China Competition -Mira Rapp-Hooper and Charles Edel

1. Military competition; 2. Economic decoupling; 3. Technology; 4. The future of order; 5. Information competition

7. Australia-China

Chinese embassy ridicules Australia for claiming vindication for global coronavirus inquiry - ABC News

But Beijing's embassy in Canberra issued a statement saying the inquiry being considered by the WHA was "totally different" to the one Australia proposed and to claim vindication was "nothing but a joke".

"A close look at the draft itself can easily come to such a conclusion," the embassy said in a statement.

"All those who know the consultation process that led to the resolution understand this.

China Considers More Economic Pain for Australia on Virus Spat - Bloomberg

China is considering targeting more Australian exports including wine and dairy, according to people familiar with the matter, in what would be a dramatic deterioration in ties as the key trading partners spar over the coronavirus outbreak.

Chinese officials have drawn up a list of potential goods also including seafood, oatmeal and fruit that could be subject to stricter quality checks, anti-dumping probes, tariffs or customs delays, the people said, asking not to be identified as the discussions are private. State media could also encourage consumer boycotts, they said, adding a final decision on the measures had not been made.

Australia threatens China with WTO challenge over barley tariffs | Financial Times $$

Hugh White, a professor of strategic studies at Australian National University, said the timing of the barley tariffs was intended to send a message of Beijing’s displeasure at Canberra’s actions and attitudes — and a warning that bigger measures could be taken in future.

“But I don't think it’s just about Morrison’s inquiry call. It’s bigger than that,” he said. “China is seeking Australia’s acceptance of its ambitions to replace America as our region’s leading power, and it will keep applying pressure for as long as it takes to achieve that.”

Foreign Ministry Spokesperson Zhao Lijian's Regular Press Conference on May 19, 2020

China Daily: Australian Foreign Minister Marise Payne said on May 18 that the input of so many parties in the EU-sponsored COVID-19 draft resolution at the WHA is a real signal of the importance of the call for an independent, international review proposed by Australia. It's a win for the international community, and Australia, as a strong and active part of that international community, would certainly see it that way. Do you have any comment?

Zhao Lijian: First and foremost, China supports a comprehensive evaluation of global COVID-19 response to ensure experience gained and lessons learnt after the pandemic is brought under control, which should be led by WHO and conducted in a science-based, professional, objective and impartial manner. China has been consistent and clear about this all along. The draft resolution on COVID-19 being discussed at this year's WHA is consistent with China's position and reflects the widespread consensus of other countries. China, along with other parties, has actively participated in the consultations on the draft resolution and the co-sponsoring of the draft resolution.

Second, the above-mentioned draft resolution is entirely different from what the Australia called "independent international review". For example, the draft resolution proposes to initiate at the appropriate moment an evaluation rather than to launch an "independent international review" instantly, which confirms WHO's leading role instead of adopting another mechanism. The draft resolution calls for an evaluation of experience gained and lessons learnt from the WHO-coordinated international health response, rather than an inquiry based on the presumption of guilt targeting certain country. We hope Australia will read the text carefully instead of making conclusions based on assumptions.

Lastly, I want to stress that we welcome it if Australia changes its course, completely gives up its political maneuver and returns to the broad consensus of the international community following the relevant WHA resolution.

Australian wool producers 'particularly exposed' if trade tensions with China rise | The Guardian

Australia’s four largest exports to China – $63bn in iron ore, $16bn in natural gas, $14bn in coal and $12bn spent by international students studying in Australia – are not expected to be affected in the short term due to their size and the Chinese market’s reliance.

According to the Department of Agriculture, Australian producers exported about $3.16bn in unprocessed or “greasy” wool to China in 2018-19, which represents an even larger value and industry reliance on China than barley.

Australia gets ‘slap to the face’ as global community welcomes China-sponsored resolution on COVID-19 - Global Times

the WHO previously conducted a post-epidemic evaluation of the H1N1 response and Ebola. "Such an evaluation requires a gradual, impartial, justified, independent and comprehensive process, which should not be interpreted out of context," Li Haidong, a professor at the Institute of International Relations of the China Foreign Affairs University, told the Global Times on Tuesday.

Australia is playing the loyal deputy to the US in slandering China, Yu Lei, a chief research fellow at the Research Center for Pacific Island Countries with Liaocheng University, told the Global Times on Tuesday.

Victorian Treasurer's China comments spark outrage among federal colleagues - The Age

Federal Labor MPs have sharply criticised Tim Pallas for suggesting Australia had vilified China by pursuing an independent coronavirus inquiry, after the Victorian Treasurer blamed the Morrison government for triggering tariffs on up to $1 billion of Australian exports.

8. Foreign work

China’s ‘Wolf Warrior’ Diplomats Are Ready to Fight - WSJ $$

Last year, Qi Yu, a specialist in ideological training with no prior diplomatic experience, became the Foreign Ministry’s Communist Party secretary—an unusual appointment for a post traditionally held by a vice foreign minister. A former deputy chief of the party’s powerful personnel department, Mr. Qi has often stressed loyalty to Mr. Xi’s agenda and reiterated his demands for a more combative posture in foreign affairs.

Chinese diplomats must “firmly counterattack against words and deeds in the international arena that assault the leadership of China’s Communist Party and our country’s socialist system,” Mr. Qi wrote in an essay published in December.


Xinhua commentary praises China and Xi Jinping’s sense of responsibility in the light of the global pandemic. “People all over the world will not forget China’s help, China’s experienced shared with the world and PPE made in China… it shows China is taking responsibilities in the international society.”

Chartered plane delivers 5.83 million face masks to Angola - ECNS

Chen Zhihao, chairman of the Zhejiang Chamber of Commerce in Angola, purchased 7 million disposable face masks from a manufacturer in Wenzhou and signed a charter agreement with a Portuguese airline.

Russia, China to continue to develop close ties: Russian deputy FM - Xinhua

Russia and China will continue to develop their close ties and cooperate in the international arena, Russian Deputy Foreign Minister Sergei Ryabkov said Monday...

"If the United States expects to take advantage of the coronavirus pandemic in order to undermine the positions of Russia and China in the international arena, I think such expectations are wrong," Ryabkov added.

China donates protective equipment to Myanmar's western state for COVID-19 fight - Xinhua

Aiming to support anti-pandemic measures in Kyaukpyu town, the CITIC Group provided 25,600 medical masks, 350 personal protective equipment (PPE) and 650 face shields.

Business, Economy and Trade

China's trade faces 'unprecedented' challenges amid pandemic: commerce minister - Reuters “As the global epidemic spreads, international market demand has fallen significantly, and China faces unprecedented challenges in foreign trade this year,” said Zhong.

China sees trickle of deals for distressed businesses rather than flood | Financial Times $$ Crises almost always leave governments with a bigger role in the economy than in more normal times. In Mr Xi’s China, state-owned companies were favoured even before the pandemic and are very likely to end up in an even more powerful position. As a result, private entrepreneurs are increasingly nervous about their future. “For the really rich Chinese, it is all about how to get out of Dodge,” said the president of one big international private equity firm.

银保监会已对中国银行“原油宝”事件启动立案调查程序 - 国内 - 新京报网 CBIRC has started an investigation in Bank of China's oil futures WMP that blew up

北京学区房价格暴涨,教育部回应 - 国内 - 新京报网 prices of housing in good Beijing school districts is soaring, in spite if various measures to try to slow it down

Yicai - China Nominates Jin Liqun for Second Term of AIIB President Liu Kun, the Finance Minister as well as the Chinese Governor of AIIB, submitted the nomination today.

Yicai - Ant’s MYbank to Extend USD1.4 Billion in Interest-Free Loans to Small Businesses From May 21, eligible micro and small merchants in 81 cities can apply to MYbank and Alipay, Ant Financial’s mobile payment app, for up to two interest-free loans of CNY10,000 (USD1,407) each for one month, online news outlet The Paper reported today. The cities were not identified.

Hong Kong Upstart Targets U.S. Fake Meat Giants in Asia - Caixin Green Monday’s new OmniPork Luncheon is modeled on Spam-style luncheon meats, while its OmniPork Strip imitates a shredded form of pork often seen in Chinese dishes, the company explained at an event to unveil the new products on Monday. It said both new offerings would be available in its home market starting in July.

Pig Raising Deemed More Profitable Than Developing Real Estate: Developers- PingWest Vanke is not the first real estate company to foray into pig raising. Other top developers, including Country Garden, Evergrande, and Wanda, all enrolled the business before it. Yu stated in 2019 that no industry can be as profitable as property. That idea may have changed now. The move, recognized as a desperate measure for developers trying to maintain operations amid a bleak outlook on the real estate market, was met with all kinds of opinions on China's social networks. Some even joked that human beings are no more valuable than pigs anymore, since it looks like that it's more profitable for developers to use lands to house pigs than human.

China railway expected to span 146,000 km by end of 2020 - ECNS China's railway system is expected to reach 146,000 km by the end of this year, covering about 99 percent of cities with a population of over 200,000, said Li Xiaopeng, minister of transport, at a press conference Tuesday. This includes about 39,000 km of high-speed rail, the longest in the world.

Apple to Make New Headphones in Vietnam in Shift From China — The Information $$ Apple has tapped factories in Vietnam to make its own forthcoming over-ear headphones, a new phase in its effort to diversify manufacturing away from China amid political and trade tensions between Washington and Beijing, The Information has learned. The move would be the first time Apple has used factories in Vietnam to produce an entirely new product, instead of relying on them to supplement manufacturing of an older model already produced in China. The company is working with contract manufacturers, who will also build some of the headphones in factories in China, said a person briefed on Apple’s plans.

Politics and Law

全国政协副主席李斌兼任秘书长,夏宝龙不再兼任Li Bin replaces Xia Baolong as secretary general of the 13th CPPCC, Fu Zhenghua now officially a member of the CCPCC and a vide chair of its Committee for Social and Legal Affairs // 会议经过表决,通过关于同意夏宝龙不再兼任政协第十三届全国委员会秘书长职务的决定;任命金学锋为第十三届全国政协副秘书长,邓宗良、舒启明不再担任第十三届全国政协副秘书长;增补邱学强、傅政华为第十三届全国政协委员;增补邱学强、傅政华为社会和法制委员会副主任,邓宗良为民族和宗教委员会副主任;通过了关于接受相开进、臧红请辞第十三届全国政协委员的决定和关于免去沈中阳政协第十三届全国委员会常务委员职务、撤销其委员资格的决定。

胡锡进:反对将翻墙了解信息定性为“违法”并处罚_网易新闻 A man in Shaanxi was warned and fined 500RMB by the Hanbin public security bureau for using VPNs to access overseas websites. Global Times editor Hu Xijin wrote that he is opposed to designating "going over the wall" to look at the global Internet as illegal. These cases keep popping up here and there, will there be a move at a national level to criminalize going over the wall, and is that what Hu is worried about? He is a fairly reliable weathervane

Holly Snape - China’s Mid-January 2020 ‘Patriotic Health Campaign' On 14 January 2020, six days before the Chinese government announced it had set up an inter-ministerial coordinating body to tackle a new coronavirus, it had already begun a nationwide campaign to clean up markets, combat vectors of disease, and mobilize citizens to adopt behaviours to prevent the spread of infectious diseases. This campaign, which was quickly adopted by provincial governments across China, went unnoticed internationally because it did not mention the coronavirus and was led by the “National Patriotic Health Campaign Commission,” a long-standing body little known outside of China that brings together leaders from government ministries, Communist Party departments and the Central Military Commission.

China Says Boy Picked by Dalai Lama Now a College Graduate  – The Diplomat Foreign ministry spokesperson Zhao Lijian said Gedhun Choekyi Nyima “received free compulsory education when he was a child, passed the college entrance examination and now has a job.” Zhao said neither the now-31-year-old man or his family wishes to be disturbed in their “current normal lives.” No other details were given.

China's draft civil code to improve tort system: experts - Xinhua In particular, it improves the system of compensation for the infliction of mental distress and expands the application of such compensation, which shows that China's laws are paying more attention to the protection of mental and personal rights, said Meng Qiang, a law professor at the Beijing Institute of Technology. The experts also cited enhanced protection for consumers who buy defective products. The introduction of punitive damages for the infringement of intellectual property rights is also seen as one of the highlights of the tort liability part of the draft

Campaign Politics: A Different View of the East Asian Model - Cornell University Press In Mobilizing for Development, I argue that campaigns—defined as policies demanding high levels of mobilization to effect dramatic change—have played a central role in East Asia’s rural transformation. Through a structured comparison of cases, I further show that divergent development outcomes can be attributed to the interplay between campaigns and institutions.

Introducing the AI Powered State | Nesta This essay collection finds that examining China’s experience of public sector innovation offers valuable insights for policymakers. Not everything is applicable to a western context – there are social, political and ethical concerns that arise from China’s use of new technologies in public services and governance – but there is still much that can be learnt from its experience while also acknowledging what should be criticised and avoided.

Foreign and Defense Affairs

财新:人事观察|2019年新晋中将王厚斌任海军副司令员 Vice admiral Wang Houmin is now the new deputy commander of PLA Navy, according to Caixin. Wang was chief of staff at the South Sea Fleet, and later deputy chief of staff of the PLAN. He was promoted to the rank of vice admiral last December.

央广军事:南昌舰首次开展海上训练科目考核,为全面形成战斗力打下基础 Nanchang, the PLA Navy’s first type 055 destroyer, which was enlisted in January, has passed its first regular test. The test was resupplying at sea.

U.S. Scrutiny of Israel’s China Ties Expands to Universities - Bloomberg Israeli academics’ ties with China are on the U.S.’s radar, according to two people familiar with the matter, adding new pressure on its Middle Eastern ally to cool relations with Beijing. Academic projects involving technology research and development are a focus, one of the people said. While there has been no discussion of possible penalties or incentives to get Israel to dial down relations with Chinese universities, the person said, the U.S. is Israel’s top benefactor and cannot be ignored. Both spoke on condition of anonymity because the discussions are private.

Chinese hackers seen behind cyberattack on easyJet: sources - Reuters EasyJet said earlier on Tuesday that hackers had accessed the email and travel details of around nine million customers, as well as the credit card details of more than 2,000 of them, in a “highly sophisticated” attack. The two people with knowledge of the investigation, who spoke on condition of anonymity, said the attack appeared to be part of a series by suspected Chinese hackers aimed at the bulk theft of travel records and other data.

Germans turn to Beijing after Covid chaos and missteps by Trump | World | The Times In all, 36 per cent said it was more important for Germany to have “warm relations” with China than with the US, while 37 per cent said the opposite. A year ago 24 per cent preferred China and 50 per cent the US.

Chinese troops resort to aggressive posturing in Ladakh, North Sikkim: Sources | Times of India Tension is gradually building up between Indian and Chinese armies in several areas in Ladakh and northern Sikkim along the un-demarcated Sino-India border with both sides bringing in additional troops, days after they were involved in two violent face-offs, authoritative sources said on Tuesday.

Don’t count on suing China for coronavirus compensation - Brookings Robert Williams, the executive director of the Paul Tsai China Center at Yale Law School and a nonresident senior fellow at Brookings, joins David Dollar to explain the legal obstacles any case would face and why these plans could backfire.

Major Chinese shipyard launches first large floating work dock - Global Times Shanghai-based Jiangnan Shipyard, responsible for the construction of warships that reportedly include China's third aircraft carrier, launched its first large floating work dock on Monday. This new platform can help with the launch and transport of large or ultra large ship modules.

Where is Britain's China strategy? | The Spectator So central to any UK strategy will be the need to reduce strategic dependency on China. As a report by the Henry Jackson Society notes, the UK is strategically dependent on China for 229 categories of goods, including 57 that relate to critical infrastructure. The pandemic has made clear that the supply of these goods is vulnerable to interruption, whether by mistake or design.

Huawei unveils $6m tech collaboration with UK's Imperial College - CGTN Huawei, the Chinese tech giant, has formally announced a $6.1 million sponsorship deal with Imperial College London. Through the five-year "strategic partnership," the company will "provide Imperial with world-leading technology, such as 5G and AI Cloud for a new innovation center," said Victor Zhang, vice-president of Huawei. The money will also help fund technology support to the Imperial Data Science Institute and the Leonardo Centre at the Imperial Business School, according to Zhang.

UK Academic Salon - Sponsored by Huawei At our UK Academic Salon, we will ask how the UK can preserve its robust research reputation and output, and what more can be done to bolster strong, longstanding, knowledge-based partnerships. We will also ask how academia and industry can best collaborate to foster 5G / AI ecosystems which support fundamental research and create future economic prosperity. Also, as universities, government and industry work towards solutions to the recent COVID-19 outbreak, we will look to better understand how innovation networks can ensure better health outcomes now and in the future.

Interesting Twitter thread on this event:

Navy sends subs to sea as message to China | Honolulu Star-Advertiser The Pacific Fleet Submarine Force took the unusual step this month of announcing that all of its forward-deployed subs were simultaneously conducting “contingency response operations” at sea in the Western Pacific — downplaying the notion that Navy forces have been hampered by COVID-19.

China’s DF-26: A Hot-Swappable Missile? Here’s a little parable about the risks associated with attacking the deployed missile forces of another nuclear-armed country. Slightly over a decade ago at a U.S.-Chinese “Track II” meeting in Beijing, American participants were reported to have pressed their Chinese counterparts about the limits of China’s nuclear no-first-use (NFU) commitment. One of them raised the possibility of U.S. conventional strikes against Chinese nuclear forces: what would happen then? Would China adhere to NFU in the strictest sense, or would it use its remaining nuclear weapons to retaliate against a conventional counterforce attack? One of the Chinese participants, a retired senior military official, is said to have responded, “Try it and see.”

China Watcher - POLITICO David Wertime launches a weekly China newsletter for Politico

The Fable of the Chinese Whistleblower by Stephen S. Roach & Weijian Shan - Project Syndicate The more the United States struggles with the ravages of COVID-19, the more President Donald Trump and his Republican Party will blame China. The facts hardly matter, as their exploitation of the tragic case of Wuhan doctor Li Wenliang shows: If Trump and the GOP think a conspiracy theory will win votes, they will run with it.

Beaconism and the Trumpian Metamorphosis of Chinese Liberal Intellectuals: Journal of Contemporary China: Yao Lin This article examines the puzzling phenomenon that many Chinese liberal intellectuals fervently idolize Donald Trump and embrace the alt-right ideologies he epitomizes. Rejecting ‘pure tactic’ and ‘neoliberal affinity’ explanations, it argues that the Trumpian metamorphosis of Chinese liberal intellectuals is precipitated by their ‘beacon complex’, which has ‘political’ and ‘civilizational’ components. Political beaconism grows from the traumatizing lived experience of Maoist totalitarianism, sanitizes the West and particularly the United States as politically near-perfect, and gives rise to both a neoliberal affinity and a latent hostility toward baizuo. Civilizational beaconism, sharing with its nationalistic counterpart—civilizational vindicativism—the heritages of scientific racism and social Darwinism imported in late-Qing, renders the Chinese liberal intelligentsia receptive to anti-immigrant and Islamophobic paranoia, exacerbates its anti-baizuo sentiments, and catalyzes its Trumpian convergence with Chinese non-liberals.

What Kind of Regime Does China Have? - The American Interest - Francis Fukuyama How then should the United States and other Western democracies deal with Xi’s China? The starting point is to recognize that we are dealing with an aspiring totalitarian country like the mid-20th century Soviet Union, and not with some kind of generic “authoritarian capitalist” regime…More broadly, the United States and other liberal democracies need to begin a gradual economic disengagement from China. The pandemic has demonstrated how both Europe and North America have become dangerously dependent on the manufacturing capabilities of a hostile power. There are today plenty of other places around the world where supply chains can be located. Squeezing every drop of efficiency out of them needs to give way to consideration of resilience, diversity of inputs, and regard for capabilities that are better kept under the control of countries that share democratic values. The atrophy of Western providers of end-to-end 5G infrastructure is something that should never have been allowed to happen. //Comment: Seems like quite a shift for Fukuyama


Taiwan’s Inauguration of President Tsai Ing-wen - United States Department of State Her courage and vision in leading Taiwan’s vibrant democracy is an inspiration to the region and the world. The United States has long considered Taiwan a force for good in the world and a reliable partner. Support for Taiwan in the United States is bipartisan and unanimous, as demonstrated by the recent enactment of the TAIPEI Act which strengthens our overall relationship and supports a closer economic partnership. We have a shared vision for the region—one that includes rule of law, transparency, prosperity, and security for all. The recent COVID-19 pandemic provided an opportunity for the international community to see why Taiwan’s pandemic-response model is worthy of emulation.

What Are the Right and the Wrong Ways for the U.S. to Support Taiwan? | ChinaFile Coversation

Tech and Media

Zoom suspends free service to individuals in China - Nikkei Asian Review Going forward, the company will allow only enterprises with proof of business registration and corporate banking accounts to purchase its service, according to details posted on a Chinese Zoom website managed by China reseller Donghan Telecom. "Individual purchases will not be accepted," it says...Donghan Telecom said the restriction on Chinese individual accounts is due to "regulatory requirements" in China, according to media reports. This is not be the first time Zoom caught Chinese regulators' attention: the videoconferencing service was temporarily blocked in China last fall at the height of the trade war.

Yicai - Chinese Fitness App Keep Closes USD80 Million Funding Led by Jeneration Capital Beijing Calorie Technology, the startup behind China’s largest fitness app Keep, said it has raised USD80 million in an E-round of fundraising, led by Hong Kong’s Jeneration Capital Management.

Yicai - China’s Top Court Backs Financial Redress for Guardians Burned by Kids’ Online Gaming The Supreme People’s Court made it clear today that Chinese courts should support the guardians of underage children seeking refunds from online gaming and livestreaming platforms amid a spike in the number of disputes arising from minors paying large sums to them, broadcaster CCTV said on its app.

Q&A: Huayi Brothers’ Chairman Has a Plan to Save the Cash-Strapped Movie Studio - Caixin Under the current circumstances, Huayi could be forced to delist from the stock market. At the end of April, the Shenzhen-listed company announced its latest recovery plan. It aims to raise up to 229 million yuan through a private placement of new shares from investors including the business units of Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Proceeds from the deal will be used to repay bank loans and keep paying the bills.

TikTok Taps Disney Executive Kevin Mayer as New CEO - WSJ $$ The longtime media executive, recently in charge of the Disney+ streaming service, is joining Chinese tech giant Bytedance Ltd. in newly created roles as chief operating officer and head of its blockbuster short video app TikTok. He will be in charge of Bytedance’s global expansion, including in its music and gaming businesses. He will start June 1.

US Senator Hawley seems excited about the appointment:

Disney's Head of Streaming, Kevin Mayer, Becomes TikTok C.E.O. - The New York Times A TikTok spokesman on Monday stressed that TikTok was not owned by a Beijing-based company. Instead, its parent company, ByteDance Ltd., is incorporated in the Cayman Islands, though he could not say how many people are based there. That entity owns TikTok and all of the businesses in China, he said. // Comment: Can't imagine Mayer is happy with this idiotic statement

Society, Arts, Sports, Culture and History

The Work of Arts - Made in China Journal This issue of the Made in China Journal offers a collection of essays that examine the ‘work of arts’, intended as the extension of art beyond the confines of the museum and into the spaces of ordinary life and production.

Chinese family reunited with kidnapped son after 32 years | South China Morning Post Mao Yin was two when he disappeared in Xian, the capital of Shaanxi province, in 1988 and was sold to another family who raised him as their own son...Mao, who was renamed Gu Ningning by his adoptive parents, was reunited with his mother and father – Li Jingzhi and Mao Zhenjing – on Monday at a press conference organised by the police and shown live on the state broadcaster CCTV.
Mao, who now runs a home decoration business, was tracked down in early May by Xian police who used facial recognition technology to analyse old photos of the boy. His identity was later confirmed using DNA testing.

Video records wingsuit flyer's fatal fall - SHINE News Her body was found nearly a week after she plunged from a helicopter during a film shoot in Zhangjiajie, the Tianmen Mountain National Forest Park in southern Hunan Province confirmed on Monday evening, adding that her parachute had failed to open.

PEN to Paper: The Translator and the Poet - PEN America In our second lesson, translator Joshua L. Freeman demonstrates the craft of literary translation by welcoming us into his process. Just after finishing translating a poem by acclaimed Uyghur poet and 2020 World Voices Festival writer Tahir Hamut, Joshua calls Tahir to discuss a few lines of his verse. Their ensuing dialogue touches on questions of language, interpretation, and poetic inspiration.

Energy, Environment, Science and Health

Yicai - Shanghai Unveils City’s Top Sci-Tech Awards as Winners Get More International Thirty-seven of the 308 projects recognized by the Shanghai Science and Technology Awards announced today had foreign participants in a sign of the growing internationalization of the city’s top accolades for scientific and technological achievements.