US-China talks extended; Kim Jong Un in Beijing; Stimulus; Cleaner Air, Huawei

US and Chinese trade negotiators have extended their Beijing talks into a third day and President Trump tweeted before the US market open today that “Talks with China are going very well!”

As I said yesterday I am now more optimistic that some sort of trade deal is likely, and I repeated that view in my CNBC appearance Monday.

Kim Jong Un arrived in Beijing Monday for a visit until the 10th, sparking much speculation that his visit is timed with the trade talks to show the US that China has leverage in the US-North Korea talks. I do not know, but it sounds plausible. It is interesting that Kim is visiting over his 35th birthday and that Xi has yet to reciprocate with a visit to the DPRK.

That is all I have up top today, thanks for reading.

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The Essential Eight

1. US-China

U.S.-China trade talks to continue for third day: U.S. official | Reuters:

The United States and China will continue trade talks in Beijing for an unscheduled third day, a member of the U.S. delegation said on Tuesday, as the world's two largest economies looked to resolve their bitter trade dispute.

Steven Winberg, Assistant Secretary for Fossil Energy at the U.S. Department of Energy told reporters at the U.S. delegation's hotel that talks, which began on Monday, had gone well.

This article about Kim Jong Un's Beijing visit (see #2 in the essential Eight) makes the interesting claim that the US is trying to delay more talks with China until Lunar New Year's eve, or after it. -With Kim’s Visit, China Shows U.S. It Has Leverage on Trade - The New York Times:

While Mr. Trump is now expected to attend the World Economic Forum this month in Davos, Switzerland, his administration has resisted Chinese efforts to schedule any formal trade negotiations then. The administration has also sought to delay an expected visit by Vice Premier Liu He, China’s economic czar and an important figure in the talks, to Washington for further trade negotiations until after Mr. Trump delivers his State of the Union address on Jan. 29.

China gives long-awaited GM crop approvals amid U.S. trade talks | Reuters:

China approved five genetically modified (GM) crops for import on Tuesday, the first in about 18 months in a move that could boost its overseas grains purchases and ease pressure from the United States to open its markets to more farm goods.

Trade War Fuels Majority of Export Manufacturers’ Shift Out of China, Survey Shows - Caixin:

Most export manufacturers in China have already moved or plan to shift some production outside the Chinese mainland, as the Sino-U.S. trade dispute adds to existing headwinds for businesses, a survey by Swiss investment bank UBS has showed.

Thirty-seven percent of the respondents said they have moved some production out of the mainland in the past year, the bank said in a report released on Friday about the poll. Another 33% of respondents said they plan to do so in the next six to 12 months.

Companies contemplating a move plan to shift at least 30% of their export production overseas, the report said. That is set to lead to a decline in spending

Why Haven't U.S. Exports of Manufactures Kept Pace with China's Growth? | Council on Foreign Relations - Brad Setser

Over the last five years (since the end of 2013), China’s GDP (in dollar terms) is up 40 percent. U.S. GDP is up something like 20 percent. Exports of manufactures to China and Hong Kong are up less than 10 percent... 

it turns out that the U.S. experience in China isn’t unique—exports from Europe and the rest of Asia have also lagged China’s own growth. Europe has done the best (exchange rates do matter), but its export performance also has lagged China's dollar GDP... 

Call it indirect evidence that Xi’s industrial policies, which often have an import-substituting component, have been modestly successful. 

Or evidence that China’s market still isn’t particularly open.

2. Kim Jong Un in Beijing

Kim will spend his 35th birthday in Beijing, What will Xi give him besides some really good Moutai?

Kim Jong Un visits China - Xinhua

Kim is visiting China from Jan. 7 to 10, said the spokesperson of the International Department of the CPC Central Committee in Beijing.

North Korea's Kim discusses expected summit with Trump in talks in China: Yonhap | Reuters:

Kim left for China on a private train on Monday afternoon accompanied by his wife, Ri Sol Ju, and senior North Korean officials, including Kim Yong Chol, a key negotiator in talks with the United States, and foreign minister Ri Yong Ho, North Korea’s state-run KCNA news agency said...

In an interview with CNBC on Monday, U.S. Secretary of State Mike Pompeo praised China’s support for resolving the North Korean crisis and said he did not think the U.S. trade dispute with China would affect this.

Kim in Beijing for 4-day visit; consulting China ahead of US-NK leaders’ summit becoming ‘a tradition’ - Global Times:

Discussions on "major issues of political security, economic development and strategy" have become a tradition of China-North Korea relations at the beginning of a new year, Wang Junsheng, a research fellow on East Asian Studies at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

Visiting China before a meeting with Trump seems like a new tradition in the China-North Korea relationship, Zheng Jiyong, director of the Center for Korean Studies at Fudan University in Shanghai, told the Global Times on Tuesday...

As the timing of Kim's visit overlaps with the vice-ministerial trade talks between China and the US, and a US warship sailing off the Xisha Islands in the South China Sea on Monday, some observers and media concluded that China was using the Korean Peninsula issue to strengthen its hand at the negotiating table with the US.

But Chinese Foreign Ministry spokesperson Lu Kang said at Tuesday's routine press conference that the overlap was just a coincidence.

North Korean Leader’s Beijing Visit Underscores China’s Pivotal Role - WSJ:

Security analysts said Mr. Kim’s mission in Beijing was likely to seek Mr. Xi’s support for his approach in the nuclear talks with the U.S., and to press China to ease sanctions pressure.

“Kim Jong Un is asking Xi to give him the leverage to say ‘no’ to U.S. demands to permit inspection of North Korea’s nuclear facilities,” said Nam Sung-wook, a former South Korean intelligence official. “That leverage is breathing room from sanctions.”

Choi Kang, vice president of research at the Asan Institute for Policy Studies, a private think tank in Seoul, said Mr. Kim could be hoping to secure a Chinese agreement to provide the North with more energy aid.

Comment: Is China constrained by the UN sanctions it approved?

'Most extraordinary millennial' - why does China focus on Kim Jong-un's age? | The Guardian:

Chinese state media have often highlighted Kim’s age. In 2010, as it became clear Kim would be the successor to his father, Kim Jong-il, People’s Daily, the official newspaper of the Communist party, dedicated a page to Kim, describing him as world’s “the most extraordinary millennial”. In 2012, a CCTV special on Kim hailed him for bringing in younger officials into his government...

“It’s serving a dual purpose, both to suggest that based on his youth he could be the right kind of reformer, and as a bit of a put-down,” said Mintaro Oba, a former US diplomat.

“[Beijing is] happy to be positive toward Kim and North Korea, as long as they establish a hierarchical relationship. They don’t want to put Kim on equal terms with Xi,” he said.

3. Belt and Road linked with corruption

This is a bombshell report from the Wall Street Journal that gives visibility into the multiple dimensions of Beijing’s BRI, from the geopolitical to the corrupt. There is little reason to believe these efforts are limited to just Malaysia, even if the 1MDB scandal is sui generis.

Over the holiday I read the authors’ excellent book Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World about Jho Low and the 1MDB fraud. Low is now said to be living in China, and this new report makes one wonder if he is just in hiding or is now effectively a prisoner. He clearly knows a lot, probably too much, and Beijing can not possibly want him ever talking about its actions.

And for those who still think Hong Kong offers a refuge of any kind, note that the MSS was conducting “full scale residence/office/device tapping, computer/phone/web data retrieval, and full operational surveillance” of the WSJ reporters in Hong Kong…

China Offered to Bail Out Troubled Malaysian Fund in Return for Deals - WSJ $$:

Chinese officials told visiting Malaysians that China would use its influence to try to get the U.S. and other countries to drop their probes of allegations that allies of then-Prime Minister Najib Razak and others plundered the fund known as 1MDB, the minutes show. 

The Chinese also offered to bug the homes and offices of Journal reporters in Hong Kong who were investigating the fund, to learn who was leaking information to them, according to the minutes. 

In return, Malaysia offered lucrative stakes in railway and pipeline projects for China’s One Belt, One Road program of building infrastructure abroad. Within months, Mr. Najib—who has denied any wrongdoing in the 1MDB matter—signed $34 billion of rail, pipeline and other deals with Chinese state companies, to be funded by Chinese banks and built by Chinese workers. 

Mr. Najib also embarked on secret talks with China’s leadership to let Chinese navy ships dock at two Malaysian ports, say two people familiar with the discussions... 

The public must believe “all initiatives are market driven for the mutual benefit of both countries,” Chinese official Xiao Yaqing said at a meeting on June 28, 2016, according to minutes of the meeting.... 

Sun Lijun, then head of China’s domestic-security force, confirmed that China’s government was surveilling the Journal in Hong Kong at Malaysia’s request, including “full scale residence/office/device tapping, computer/phone/web data retrieval, and full operational surveillance,” according to a Malaysian summary of that meeting.

OUTRAGE! - Najib's Secret Deal With China To Pay Off 1MDB (And Jho Low's) Debts! - Sarawak Report July 2016:

Marked “For Internal Use Only” an Appendix to a Term Sheet due to be approved by the Malaysian Cabinet tomorrow (27th July) lays out in detailed figures how Najib plans for over US$7 billion in accumulated 1MDB/Jho Low company debts to be wiped out by taxpayers in a secret deal between his Ministry of Finance and the Chinese state company CCCC (China Communications Construction Company).

The PM’s ‘cunning plan’ is to get the Malaysian Government to agree to inflate the actual cost of the East Coast Rail Project from only RM30 billion to RM60 billion, all to be borrowed from the Chinese Government, in order to disguise the payment of 1MDB’s (and Jho Low’s) company debts!

The Evolution of China’s Belt and Road: A Conversation with Nadège Rolland – Power 3.0: Understanding Modern Authoritarian Influence:

In this episode of the Power 3.0 podcast, featured guest Nadège Rolland traces the trajectory of China’s Belt and Road Initiative since its launch in 2013, with a particular emphasis on understanding Beijing’s priorities and the underlying strategic objectives accompanying its marketed emphasis on overseas infrastructure development. Nadège Rolland is a senior fellow for political and security affairs at the National Bureau of Asian Research, and author of the book, China’s Eurasian Century? Political and Strategic Implications of the Belt and Road Initiative (2017)

Africa: Why Djibouti’s China debt is raising the alarm | Euromoney:

Warning sirens are sounding about the level of debt Djibouti owes to China for Belt and Road projects. The local view is that they need the money and China is the country that is offering it. But the fate of the Djibouti-Addis Ababa railway represents the financial challenges of BRI in a 756-kilometre microcosm.

4. A little stimulus here, a little stimulus there...

China to introduce policies to strengthen domestic consumption: state media | Reuters:

China plans to introduce policies to boost domestic spending on items such as autos and home appliances this year, state television CCTV quoted a senior state planning official as saying on Tuesday.

Ning Jizhe, vice chairman of National Development and Reform Commission (NDRC), said in an interview with CCTV that the policies will be part of wider efforts to strengthen domestic consumption in China, the world’s second largest economy.

Xinhua on Ning's comments - 国家发展改革委副主任宁吉喆:发挥好宏观政策逆周期调节作用 确保经济运行在合理区间 

On Jan 4, People’s Daily began to publish a series of reports on how economic works should be conducted in 2019. 朝着问题去 找准着力点(经济新方位·今年工作怎么干①)- 人民网 is the first piece -

今年工作怎么干:促进形成强大国内市场 让百姓能消费愿消费敢消费 is the second piece. The focus is on consumption and services...easier said than done, but expect increasing of policy stimuli to support this

Former Central Bank Chief Sees Room for 'Quantitative Adjustment' - Caixin:

China’s monetary policy still has room for “quantitative adjustment” to support economic growth, according to Zhou Xiaochuan, former governor of the central bank, bolstering expectations that policymakers will implement more easing measures in the face of increasing downward pressure on investment, consumption and exports.

Shaanxi launches $730m fund to improve financing for private firms - Global Times:

Northwest China's Shaanxi Province will launch a bailout fund worth 5 billion yuan ($730 million) for private enterprises, a move intended to ease their financing difficulties and fulfill one of the government's recently announced policies to support private economy.

The local government also aims to increase the proportion of loans to private enterprises to at least 50 percent of all new corporate loans provided by banks within three years, according to a statement released by the provincial government of Shaanxi on Tuesday.

Information consumption new booster for Chinese economy -Xinhua"

The value of China's information consumption reached about 5 trillion yuan (about 730.9 billion U.S. dollars) in 2018, an increase of 11 percent, according to a report released Tuesday by the Internet Society of China.

Consumption for information services surpassed that for information products for the first time in 2018, signifying a transformation in the structure of the information consumption market, the report said.

Clearly the data are bad:

China smartphone shipments seen down 12-15.5 percent last year: market data | Reuters:

China Academy of Information and Communications Technology (CAICT), a research institute under the country’s Ministry of Industry and Information Technology, said shipments dropped 15.5 percent to roughly 390 million units for the year, with a 17 percent slump in December.

Market research firm Canalys estimates shipments fell 12 percent in China last year and expects smartphone shipments in 2019 to dip below 400 million for the first time since 2014.

GM Sales Drop 10% in Slumping China Market - Caixin:

General Motors sold around 3.64 million vehicles in China in 2018, a drop of nearly 10%.

This was due to a broader “softening vehicle market” in the country, the automaker said in a statement on Monday.

5.. One Party over God

How the State Is Co-Opting Religion in China - Ian Johnson - Foreign Affairs:

Seen against a backdrop of measures to limit nongovernmental organizations, tighten ideology, and lift term limits on President Xi Jinping, it’s easy to think that religion in China is being crushed by a strong state, diminishing in importance as a new powerful leader takes firm control of the country.

This view is tempting but wrong. China is not retreating to the era of high communism under Mao Zedong but lurching toward a messy future shared by many authoritarian states. Today’s China seeks not to marginalize competing groups and belief systems, the way Beijing did during the Mao era, but to co-opt them. Indeed, the events of the past two years show that for the first time in a century and a half, religion is firmly ensconced in the center of China’s social and political life...

The state’s fear of outside influences underpins new religious regulations announced in 2016, implemented in 2017, but only truly enforced in 2018. Although all religions, including Buddhism and Taoism, are admonished to avoid foreign ties, the measures are aimed mainly at Christianity and Islam.

China: A path for the good of the Church - Vatican News:

In his speech on the "State of the World" seen through the eyes of the Holy See, Pope Francis dedicated several significant lines to the signing of the Provisional Agreement with the People’s Republic of China...

The final remarks of the paragraph dedicated to China in the Pope’s address to diplomats should also be underlined: “It is to be hoped that further contacts regarding the application of the signed Provisional Agreement will help resolve questions that remain open and make needed room for an effective enjoyment of religious freedom.”

Communities inspect Arabic slogans to curb pan-Islam drive - Global Times:

Communities in North China's Hebei Province and South China's Hainan Province have begun inspecting Arabic slogans in public areas such as restaurants, which they believe would curb pan-Arab tendencies.

The campaign had recently been carried out in the Huangliangmeng township of Handan city, Hebei Province as well as two communities in Hainan Province's Sanya.

The inspection targeted Arabic slogans and other religious elements in menus, advertising boards and other public places, including supermarkets and kindergartens.

According to a news release on the Wechat account of the Huangliangmeng township government on Tuesday, which was later deleted, the inspection had been carried out since December 30, 2018 across villages in the township.

They only found out a Lanzhou beef noodle restaurant, a well-known Islamic food brand, used Arabic in its menu and religious elements on its advertising board.

The restaurant has removed the religious elements, it said.

China has launched a massive campaign of cultural extermination against the Uighurs - The Washington Post Editorial:

The vacuum in Washington should be filled by Congress. Bipartisan legislation that would create a special coordinator to respond to the Xinjiang crisis and prepare the ground for sanctions on Chinese officials involved in the repression failed to pass the last Congress. It should be promptly taken up this year.

6. The Party makes its intentions clear

A worthwhile reminder that it is really important to read what the Communist Party tells itself, its members, and the citizens of the PRC.

The Party Congress Test: A Minimum Standard for Analyzing Beijing’s Intentions - Peter Mattis:

Despite widespread belief that the Chinese Communist Party has institutionalized its internal politics and policymaking, many analysts seem reluctant to address the implications for major party documents. These documents not only are the product of formal coordination across the party-state, but also are the product of a sequential process of analysis, theory-building, and policy design. These processes result in a relatively predictable hierarchy of sources and authoritativeness that flows downward from the constitution. At the highest level of authority are the speeches of the party’s general secretary and the party congress work reports. This point is not new — and arguably most China-watchers would agree with this aspect of institutionalization — but reading and using these documents seems to go out the window when evaluating Beijing’s intentions.

For many analysts inside and outside governments, Beijing’s ambitions are largely regional and therefore defensive and limited. In the most recent issue of Foreign Affairs, Oriana Mastro argues “China does not want to usurp the United States’ position as the leader of a global order” and that Beijing’s “ultimate goal is to push the United States out of the Indo-Pacific and rival it on the global stage.” This view that China seeks regional dominance and global influence, but not global hegemony or leadership in a fundamentally different international order, is common among government analysts, and Mastro’s article is a useful proxy for those views.

Elsewhere, Western analysts and policymakers complain that Chinese statements about and concepts of global governance and the conduct of international relations are vague or that party leaders do not have a clear idea of what they want. For example, one analyst opined in a War on the Rocks podcast “I’m not sure that China knows” what it wants on the comparatively narrow issue of the maritime domain. From misunderstanding Xi Jinping’s “New Type of Great Power Relations” as just another bumper sticker to treating the party’s aspirations of turning the People’s Liberation Army into “world-class military” as a self-evident objective, many Western analysts appear to think Beijing’s policymaking is reactive rather than strategic, regional rather than global, constrained rather than creative.

None of these statements, however, are justifiable by available information. This is not a logical critique of the way in which these arguments are framed and developed, but rather an empirical one. It might be unrealistic to expect all analysts to evaluate Chinese intentions on the basis of party documents going back to 1921, but it is realistic to expect analysts to test their assessment against the party’s most authoritative statement of its objectives: the latest party congress work report. That is what I do here: Use the party congress work report to evaluate the claims of those who view Chinese ambitions as regionally constrained and only vaguely related to global governance. Any quotation, unless otherwise noted, is to the official translation of the 19th Party Congress Work Report.

7. Progress in the war on smog

Still a long way to go, and an economic downturn may improve the air quality, just as a return to heavy industry and real estate stimuli would worsen it, but you have to take your victories where you can, and there is no question Beijing is much more serious now about reducing pollution.

China’s Smog Keeps Clearing - Caixin

China’s air quality improved again in 2018, with the average levels of a key pollutant dropping by 9.3% in the 338 cities included in data released Monday by the Ministry of Environment and Ecology.

One of the ways in which air pollution is measured is by the concentration of PM2.5 — hazardous particulate matter under 2.5 micrometers in width — given as micrograms per cubic meter. Major sources of PM2.5 include burning coal, emissions from heavy industry, and emissions from cars and trucks.

While the average PM2.5 concentration dropped to 39 micrograms per cubic meter, the statement noted that 262 of the cities did not meet the air quality standard set by the 13th Five-Year Plan (2016-20). That standard aims for the average annual PM2.5 level to be under 43 in all cities...

Ma Jun, an environmentalist and director of the Institute of Public & Environmental Affairs, was also encouraged by the results. “However, large-scale and long-term heavy pollution often occurs in autumn and winter,” he told Caixin. “Solving this problem is key.”

The MEE report - 生态环境部通报2018年12月和1-12月全国空气质量状况 

8. Huawei's Iran and Syria front companies

Kudos to Reuters, who first broke the news years ago of the Huawei-Skycom connection...The bank fraud charges underpinning the Meng extradition request may be the tip of the iceberg...if there is evidence Huawei was intentionally violating US export controls to sell equipment to Iran that contained US components then ZTE-like sanctions can not be ruled out. And may be deserved…

New documents link Huawei to suspected front companies in Iran, Syria | Reuters:

U.S. authorities allege CFO Meng Wanzhou deceived international banks into clearing transactions with Iran by claiming the two companies were independent of Huawei, when in fact Huawei controlled them. Huawei has maintained the two are independent: equipment seller Skycom Tech Co Ltd and shell company Canicula Holdings Ltd.

But corporate filings and other documents found by Reuters in Iran and Syria show that Huawei, the world’s largest supplier of telecommunications network equipment, is more closely linked to both firms than previously known.

The documents reveal that a high-level Huawei executive appears to have been appointed Skycom’s Iran manager. They also show that at least three Chinese-named individuals had signing rights for both Huawei and Skycom bank accounts in Iran. Reuters also discovered that a Middle Eastern lawyer said Huawei conducted operations in Syria through Canicula...

U.S. investigators are aware of Canicula’s connection to Syria, according to a person familiar with the probe. Canicula had an office in Damascus and operated in Syria on behalf of Huawei, another person said.

Business, Economy, Finance And Trade

Could a Chinese-made Metro car spy on us? Many experts say yes. - The Washington Post Congress, the Pentagon and industry experts have taken the warnings seriously, and now Metro will do the same. The transit agency recently decided to add cybersecurity safeguards to specifications for a contract it will award later this year for its next-generation rail cars following warnings that China’s state-owned rail car manufacturer could win the deal by undercutting other bidders. Metro’s move to modify its bid specifications after they had been issued comes amid China’s push to dominate the multibillion-dollar U.S. transit rail car market. The state-owned China Railway Rolling Stock Corp., or CRRC, has used bargain prices to win four of five large U.S. transit rail car contracts awarded since 2014.

Apple Faces `Informal Boycott' From China Consumers, BAML Says - Bloomberg “According to a survey conducted by our colleagues in equity research, consumers in China and India are showing less interest in upgrading to an iPhone and more interest in upgrading to Xiaomi and Samsung,” Bank of America Merrill Lynch economists Ethan Harris and Aditya Bhave wrote in a recent note. “Apple sales may also suffer from a general redirection of Chinese demand away from U.S. products.

China VC Deals Drop to Lowest Since 2015 as Funding Shrinks - Bloomberg There were 713 VC deals in the three months ended December, down 25 percent from a year earlier, according to data from market research firm Preqin. The amount invested in the quarter shrank 12 percent to $18.3 billion.

Apple’s Errors – Stratechery by Ben Thompson There are two adjustments Apple needs to make to avoid this error in the future: first, and most obviously, the company needs to be far more pessimistic with regard to its China forecasts in ‘S’ model years. Second, management needs to appreciate that the plane of competition in China is different than the rest of the world: the company is a luxury brand, but only in terms of hardware. If anything, iOS in China needs to cater more to the local market; as far as hardware, perhaps it is time for the ‘S’ strategy to be retired.

Alibaba’s Jack Ma Steps Back from Taobao Shareholding - Caixin Alibaba founder Jack Ma is no longer a shareholder of Zhejiang Taobao Network Co. Ltd., Taobao’s corporate entity, company records show...The move brought renewed interest on Monday into the billionaire’s retirement plans. Alibaba acknowledged the change in an official statement Monday, saying it was implied in its annual financial report to the U.S. Securities and Exchange Commission in July. But the company's later announcement on Monday said Ma had “never transferred or exited as a Taobao shareholder, nor is he planning to do so,” citing the latest change in public records as a “very common and normal practice in company’s management, technically and legally speaking.”

Alipay Changes Name to Hanbao (But for Users, Nothing Will Change) | What's on Weibo The name change was reportedly registered for the ‘Zhifubao (China) Information Technology Company’ (支付宝[中国]信息技术有限公司), that changed into ‘Hanbao (Shanghai) Information Technology Company’ (瀚宝[上海]信息技术有限公司), just as ‘Alipay China Holding Limited’ has been changed to ‘Hanbao China Holding Limited.’ The name change was registered on December 18th of 2018. The legal ownership of the company has also been changed from Ma Yun (Jack Ma) to Xie Youqing (叶郁青).

China's HNA touts assets for sale as funding crunch intensifies | Reuters The range of assets, spanning a hotel project in frozen Harbin and stakes in struggling online lender Dianrong, insurer Bohai Life and brokerage HNA Futures, underscores how the group is shedding almost all non-core businesses as it pares back an empire that once spread from Deutsche Bank to Hilton Worldwide.

Troubled Ofo Dismisses Its International Business Department - Caixin The bike-sharing company has dismissed its entire international business department, according to the division’s general manager, Jeremy Chen. Over 50 employees will be affected. Those dismissed could take new jobs in other divisions of the company, but will only receive half of their salaries until April or May, Chinese media reported Chen as saying.

Guess Who’s Behind Latin America’s Tech Boom? China, of Course - Bloomberg As America recedes into the background, Chinese foreign direct investment in Latin America and the Caribbean has skyrocketed over the last ten years, according to a 2018 report by the Economic Commission for Latin America and the Caribbean. China dropped close to $90 billion in the region between 2005 and 2016. With a growing emphasis on telecommunications, Chinese investment in emerging technology is increasingly the primary fuel behind Latin America’s tech boom.

Xiaomi to Spin Off Low-Cost Brand - Caixin Xiaomi Corp. will spin off its low-cost Redmi brand on Thursday, continuing its strategy of developing multiple specialized brands to offset slowing sales growth.

More innovative govt measures rolled out nationwide - The State Council recently released a circular to roll out nationwide the second group of innovative government measures, a total of 23 which target five areas: protection of intellectual property rights (IPR), commercialization of research findings, innovations in scientific and technological finance, university management systems, and military and civilian integration. The five measures about IPR protection include one that stipulates that the adjudication of IPR-related civil, criminal and administrative cases will be handed over to one specialized court

Politics, Law And Ideology

网连中国:西藏政协会1月9日召开 2019省级两会将拉开序幕 - :人民网 January dates for provincial-level people's conference and people's consultative conferences are being rescheduled to seemingly open up a block of time around the third week of January, leading to speculation in various quarters, including here , that there may be a big central meeting, possibly even the 4th Plenum. Something does seem to be up but hearing nothing specific. If the 4th Plenum is help this month it is worth noting the change in the Plenum calendar in this 19th Party Congress term. Usually they are held later in the year, though the 19th 3rd Plenum was held at the end of February 2018. Two Plenums in one calendar year would be a bit anomalous, and rumors and whispers aside, including some I fell for, it is always possible the 4th Plenum was never actually scheduled for late 2018. We just don't know and so far I can not find anyone who actually knows and is talking...

Investigation team established for missing files in contract dispute case - Xinhua Led by the Commission for Political and Legal Affairs of the Communist Party of China (CPC) Central Committee, the investigation team was joined by the CPC Central Commission for Discipline Inspection and the National Supervisory Commission, the Supreme People's Procuratorate and the Ministry of Public Security. The case, which went through its second trial at the top court, involves contract disputes between two mining companies in northwest China's Shaanxi Province. //  Comment: This happened during Zhao Leji's tenure in Shaanxi, as did the recent villas scandal...perhaps just a coincidence, worth watching

Chinese customs official in sex and smuggling scandal | South China Morning Post Guan Zhaojin, the former head of customs at Dalian port in northeastern China, is accused of having affairs with several overseas shoppers – known as daigou in Mandarin – and of abusing his power by helping them and several customs staff to evade inspections and customs duty. Guan was reported to the authorities for smuggling and corruption last August by his wife, who also filmed him confessing to affairs with several women in a video that was later leaked online,news site Red Star News reported on Monday. The woman, who was not named in the report, confirmed that the man in the video – wearing only a pair of underpants – was her husband and Dalian’s top customs official. 

China deepens reform on judicial, social systems - Xinhua Zhang Jun, procurator-general of the Supreme People's Procuratorate (SPP), announced on Thursday that the SPP will form 10 new procuratorial departments and implement a new mechanism to allow the same department to handle both the arrest and prosecution processes of criminal cases. "The old mechanism lowers efficiency because one department handles the arrest process and the other department has to learn about the case all over again when it handles the prosecution process," Zhang said at a press conference organized by the Information Office of the State Council. Over 90,000 procurators and 120,000 judges have been re-elected under the judicial reform aimed at improving their professional competence. They will take on lifelong responsibilities for specific cases in an effort to boost their enthusiasm and sense of responsibility.

Foreign and Military Affairs

Trump, Trudeau Tap Dance Around Huawei CFO Meng Wanzhou Case | HuffPost Canada Donald Trump has affirmed his respect for judicial independence, the Prime Minister's Office says, less than a month after the U.S. president baldly said he would intervene in Meng Wanzhou's pending extradition from Canada if it would help forge a trade deal with China. In a summary of a phone call Monday between Trump and Prime Minister Justin Trudeau, the PMO indicated the leaders discussed the high-profile U.S. extradition request — though Meng was not named — and agreed on the importance of respecting the independence of judges and the rule of law.

Carnegie Endowment for International Peace Names Evan A. Feigenbaum Vice President for Studies - Carnegie Endowment for International Peace In this new role, Feigenbaum will oversee work on a dynamic region encompassing both East Asia and South Asia, including the Carnegie–Tsinghua Center in Beijing and Carnegie India in New Delhi.

China honours defence engineer and radar expert in annual science and tech awards | South China Morning Post Top prizewinners Qian, 82, and Liu, 83, received 8 million yuan (US$1.2 million) each for the awards. Qian was recognised for his work on the country’s underground nuclear shelter facilities, while Liu won the prize for his contribution to China’s first high-frequency radar system. 刘永坦钱七虎获2018年度国家最高科学技术奖 

Swedish activist made to 'confess' on Chinese state TV urges UK broadcast regulator to ban channel | Hong Kong Free Press HKFP Swedish activist Peter Dahlin has filed a complaint with the British telecommunications regulator against Chinese state media China Central Television (CCTV) for allegedly contravening the broadcasting code and violating the Human Rights Act. In his complaint to the Office of Communications (Ofcom) on Monday, Dahlin – who is director of human rights NGO Safeguard Defenders – cited his own appearance on Chinese state television in 2016. In it, he gave an apparent “confession” for inciting “opposition to the government,” though was not arrested or put on trial. If the complaint is upheld, CCTV will have its UK licence and credentials revoked and will no longer be able to operate within the country.

Ready, aim … China’s military tipped to keep ramping up combat drills after 18,000 exercises in 2018 | South China Morning Post Observers said growing tensions with the United States, and landmark commemorations including October’s 70th anniversary of the founding of the People’s Republic had pushed the PLA to expand drills. The assessment came after state news agency Xinhua reported last week that some 2 million personnel were involved in more than 18,000 mostly small-scale exercises in 2018.

Beijing treads carefully when scions of Thai political dynasty arrive in China in search of their roots | South China Morning Post Former Thai prime ministers Thaksin and Yingluck Shinawatra may have been made very welcome in southern China at the weekend when they visited the homeland of their ancestors, but Beijing was a little more circumspect, censoring media coverage of their visit and underscoring how China treads carefully where Thai politics are concerned, analysts said. Brother and sister Thaksin and Yingluck arrived at Taxia village in Fengshun township, Meizhou, Guangdong province, in search of their roots on Saturday. They are fourth-generation Chinese immigrants in Thailand and descended from a family of Hakkas

Xi's special envoy to attend Venezuelan presidential inauguration - Xinhua Chinese President Xi Jinping's special envoy Han Changfu will attend the inauguration of Venezuelan President-elect Nicolas Maduro on Jan. 10, a Foreign Ministry spokesperson announced Tuesday. Han, also minister of agriculture and rural affairs, was invited by the Venezuelan government, spokesperson Lu Kang said.

Chinese, Djibouti presidents exchange congratulations on 40th anniversary of ties - Xinhua Xi said he highly values the development of China-Djibouti relations, and is willing to work with Guelleh and take the opportunity of the 40th anniversary of bilateral diplomatic ties to consolidate the mutual political trust, deepen the cooperation in co-building the Belt and Road, and implement the results from the Forum on China-Africa Cooperation (FOCAC) Beijing Summit, so as to lift the bilateral strategic partnership to new heights.

Tech And Media

Bytedance's Jinri Toutiao removes medical insurance product from app · TechNode Bytedance-owned content aggregator Jinri Toutiao has removed a medical insurance product from its platform, highlighting the government’s tightened control over financial services provided by content platform operators. Launched within the Jinri Toutiao app in December, healthcare insurance product Hejiabao was mainly positioned to provide financial protection to Chinese families without government insurance in the event of life-threatening conditions

China’s ‘Smart Locks’ Are Vulnerable to Hackers, CCTV Reports - SixthTone The State Administration for Market Regulation (SAMR) told CCTV that such password-protected and facial recognition-enabled security systems could easily be unlocked using high- and low-tech tricks, putting people’s homes and businesses at risk. The investigators found that around 15 percent of 40 leading smart lock models they tested could be compromised.

LinkedIn Censored The Profile Of Another Critic Of The Chinese Government LinkedIn censored the profile and activities of a vocal critic of the Chinese government for users in China, in another apparent response to a censorship request from the government. Corporate fraud investigator Peter Humphrey, who is British and lives in the UK, was informed by LinkedIn in December that his profile had been censored in China, but after being asked about it by BuzzFeed News this week, LinkedIn restored the page and said it had only been blocked in error. // not the first time, they censored me as well a few years ago - 9.2014 LinkedIn Abides By Chinese Censorship Laws -- But Is It Consistent? 

Society, Art, Sports, Culture And History

Man With Hammer Attacks Schoolchildren in Beijing, Injuring 20 - The New York Times Three children at the Beijing No. 1 Affiliated Elementary School of Xuanwu Normal School in the district of Xicheng were seriously injured in the late-morning attack, the district government said on the social media site Sina Weibo. But none of the injuries appeared to be life-threatening, it said. A 49-year-old maintenance worker at the school was taken into custody by the police, the government said. The statement identified the man by his surname, Jia, and said he was from the northeastern province of Heilongjiang. It said he was believed to have attacked the children because the school would not renew his contract.// Beijing government says will launch safety inspections in wake of attack - 北京市教委:对伤害孩子事件深表痛心,将开展隐患大检查 


Tongji University Suspends Professor After Student Suicide - Caixin Shanghai’s elite Tongji University has suspended a professor accused of overworking master’s-degree student Lu Jingwei before Lu’s suicide in December. Lu Yanjun (no relation to Lu Jingwei), a faculty member from Tongji’s medical school, has temporarily been barred from teaching while Tongji conducts an investigation, university spokesperson Zhu Dazhang told Caixin on Monday. Lu Jingwei, 24, died on campus on Dec. 13. His family has blamed Lu Yanjun, who supervised Lu Jingwei’s studies in oncology, for the death.

Chinese Arts Students into Panic Mode after Failing to Register for Exams Amid Announced Reforms | What's on Weibo On January 6th, allegedly around 700,000 students who tried to register for their college-level exam through the Yishisheng (艺术升) registration app found the system unresponsive, making the issue a trending topic on Chinese social media. The hashtag “700,000 Arts Exam Candidates Lose Registration Qualification” (#70万艺考生丧失报名资格#) received more than 150 million views on Weibo at time of writing, with many students being angered and stressed, saying that “the collapse of one app is affecting our entire future.” At time of writing, it is not sure how the reports have come up with the 700,000 number, although it is probable that this is based on numbers of previous years, or based on the number of people taking the provincial-level exams

Food And Travel

Aviation Sector Soars in 2018 as Punctuality Improves - Caixin The just-concluded year also saw a marked improvement in on-time performance for China’s airlines, with the industry posting an overall punctuality rate of about 80%. That was up sharply from just 71.7% in 2017, when the industry came under wide criticism for late flights.