Happy International Workers' Day! China is back to work Wednesday May 2.

Today's Sinocism is a bit thin, the big issues today are the upcoming US-China trade talks in Beijing, Beijing peeling off another of Taiwan's dwindling diplomatic allies and the political problems of Peppa the Pig.

Thanks for reading.

The Essential Eight

1. US Negotiators To Beijing Told Beijing Won't Negotiate Key Issues

Members of the delegation, per the White House:

The Honorable Terry Branstad, Ambassador Extraordinary and Plenipotentiary of the United States to China;
The Honorable Steven Mnuchin, Secretary of the Treasury;
The Honorable Wilbur Ross, Secretary of Commerce;
The Honorable Robert Lighthizer, United States Trade Representative;
The Honorable Larry Kudlow, Assistant to the President for Economic Policy;
The Honorable Peter Navarro, Assistant to the President for Trade and Manufacturing Policy;
The Honorable Everett Eissenstat, Deputy Assistant to the President for International Economic Affairs

China Is Set to Take a Hard Line on Trump’s Trade Demands - The New York Times:

The Chinese government is publicly calling for flexibility on both sides. But senior Beijing officials do not plan to discuss the two biggest requests that the Trump administration has made over the past several months, according to people involved in Chinese policymaking. Those include a mandatory $100 billion cut in America’s $375 billion annual trade deficit with China and curbs on Beijing’s $300 billion plan to bankroll the country’s industrial upgrade into advanced technologies like artificial intelligence, semiconductors, electric cars and commercial aircraft.
The reason: Beijing feels its economy has become big enough and resilient enough to stand up to the United States.
A half-dozen senior Chinese officials and two dozen influential advisers laid out the Chinese government’s position in detail during a three-day seminar that ended here late Monday morning. The officials and most of the advisers at the seminar gave an overview of China’s economic policies, including an in-depth review of the country’s trade policy, to make sure China’s stance would be known overseas. All of the officials and most of the advisers at the seminar insisted on anonymity because of diplomatic sensitivities...
Tsinghua University’s new Academic Center for Chinese Economic Practice and Thinking organized the seminar, which was held at Tsinghua and two other venues in western Beijing

For China, the American Team of Trade Rivals Won’t Be Easy to Please - WSJ:

The trade mission gives both sides a chance at easing those tensions, but chances of a quick resolution are slim.
The U.S. team plans to take tough positions, say U.S. officials, who are skeptical that China’s pledges will amount to much. The U.S. hasn’t sent an advance team to Beijing for preliminary negotiations, as is typical. Rather, when the two sides meet, the U.S. may simply note President Donald Trump’s threats of tariffs and U.S. complaints, and wait to see what the Chinese offer, figuring that will force China to offer even deeper structural changes and faster action.

The differences go way beyond tariffs and trade misbehavior--White House Considers Restricting Chinese Researchers Over Espionage Fears - The New York Times:

The White House is discussing whether to limit the access of Chinese citizens to the United States, including restricting certain types of visas available to them and greatly expanding rules pertaining to Chinese researchers who work on projects with military or intelligence value at American companies and universities. The exact types of projects that would be subject to restrictions are unclear, but the measures could clamp down on collaboration in advanced materials, software and other technologies at the heart of Beijing’s plan to dominate cutting-edge technologies like advanced microchips, artificial intelligence and electric cars, known as Made in China 2025.

The next China crackdown - POLITICO:

Committees in both chambers are planning to vote on bills in the coming weeks that would expand the powers of the Committee on Foreign Investment in the United States, a Treasury-led panel that reviews foreign takeovers of U.S. companies for national security risks. The proposed CFIUS revamp has sparked intense opposition from the business community and has divided Republicans who are weighing national security concerns against free-market principles.

Will Huawei be sanctioned like ZTE next?

Huawei has been building its substitute to Android for a rainy day. Is that day looming? | South China Morning Post:

Huawei Technologies, the top-selling smartphone brand in China and world’s biggest telecommunications equipment manufacturer, could be the next to try, if push comes to shove. The company has been developing and perfecting its own smartphone OS, according to four people familiar with the company’s plans.
The company started building its own operating system after a US investigation into Huawei and ZTE in 2012, one of the people said, asking not to be named discussing confidential matters. Huawei also has its own OS for tablets and personal computers, the person said.
The plan was initiated by Huawei’s founder, Ren Zhengfei, and the company has never given up on it as it is seen as a strategic investment to prepare for “worst-case scenarios”, according to the sources. The company has not released the OS because it is not as good as Android, and the system does not have many third-party apps developed for it, one of them said.

2. The Dominican Republic Dumps Taiwan As Beijing Squeezes Harder

Chinese vice president meets Dominican FM - Xinhua:

Chinese Vice President Wang Qishan on Tuesday met with Dominican Foreign Minister Miguel Vargas, who came to Beijing to sign a joint communique on the establishment of diplomatic relations between China and the Dominican Republic.
Wang conveyed Chinese President Xi Jinping's greetings to Dominican President Danilo Medina, and extended congratulations on the establishment of diplomatic ties.

Taiwan says China dangled $3 billion to grab ally Dominican Republic | Reuters:

China offered the Dominican Republic a $3.1 billion package of investments and loans to get them to sever ties with Taiwan, a Taiwan official said on Tuesday, after the Caribbean nation switched allegiance to China in a diplomatic blow to the self-ruled island...
Taiwan, claimed by China as its own, has formal relations now with only 19 countries, many of them poor nations in Central America and the Pacific like Belize and Nauru.

The ROC government has terminated diplomatic relations with the Dominican Republic with immediate effect to uphold national dignity - Ministry of Foreign Affairs, Republic of China (Taiwan):

MOFA wants to use this opportunity to remind the international community on the lack of follow through for China's promises to former diplomatic allies of Taiwan. This is exemplified by China's failure to deliver on a pledge of US$1 billion in assistance to Costa Rica to build a refinery and $400 million to construct highways, when it established relations with the country in 2007. More recently, since establishing ties with Sao Tome and Principe in December 2016, it has failed to uphold its pledge to provide US$140 million in aid. Agreed-upon plans to build an airport and deepen a harbor have also been shelved. As former US Secretary of State Rex Tillerson once said: Beijing “encourages dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt and undercut their sovereignty, denying them their long-term, self-sustaining growth.” Developing nations should be aware of the danger of falling into a debt trap when engaging with China.

While Taiwan faces serious diplomatic challenges, the government will not bow down to pressure from Beijing. Taiwan will work with friendly nations to uphold regional peace and stability and ensure our rightful place in the international community. Our diplomats around the world will continue to fight for Taiwan's dignity and rights.

CCP Propaganda against Taiwan Enters the Social Age - Jamestown:

The disinformation campaign concerning the pension reform is one example in a long history of the use of propaganda and disinformation as political tools across the Taiwan Strait. While Taiwan may have enjoyed an advantage at the beginning of the information war due to access to more resources and technology (e.g., help from the United States), that advantage is eroding as Beijing, while remaining a close authoritarian government, exploits the openness and transparency of Taiwan’s democratic and economic system to unduly influence Taiwan. Unchecked, Chinese Communist Party (CCP) propaganda and disinformation campaigns could have a corrosive effect on Taiwan’s democracy.

Taiwan seems to be benefiting from Trump’s presidency. So why is no one celebrating? - The Washington Post:

On a visit to the country this month with a delegation organized by the American Enterprise Institute, I heard instead a deep sense of caution and wariness about relations with the United States. Even America’s closest and most dependent allies, it seems, feel the need to back off from the chaos and unpredictable policy zigzags they see in the White House.

China Threatens U.S. Airlines Over Taiwan References – Foreign Policy:

The Civil Aviation Administration of China has sent a letter to United Airlines and American Airlines demanding that their global operations follow China’s restrictions against “separatism,” meaning that any references to Taiwan, Hong Kong, and Macau as countries independent from China must be removed.
The strongly worded letter demands that all public-facing content, across the world, must follow “Chinese law.” It gives the airlines a set timeline to comply with the demands, threatening that if not obeyed, the matter will be referred to “the relevant cyber-security authorities” for punishment, a source with access to the letter told Foreign Policy.

3. Xi's Hubei Inspection Tour

Xi calls for maintaining new development philosophy, winning "three tough battles" - Xinhua:

Xi made the remarks during an inspection tour in central China's Hubei Province from Tuesday to Saturday
Xi urged efforts to "maintain the new development philosophy, pursue progress while ensuring stability, focus on winning the three tough battles, and solve the problem of unbalanced and inadequate development."
Forestalling and defusing major risks, carrying out targeted poverty alleviation, and preventing and controlling pollution have been identified as the three tough battles that China must win.
On Thursday morning, Xi inspected two leading chipmakers in a high-tech development zone in Wuhan, capital of Hubei Province...
Environmental protection should also be enhanced, and actions should be based on the understanding that "lucid waters and lush mountains are invaluable assets," Xi said.
A holistic approach should be used to conserve the mountains, rivers, forests, farmlands, lakes, and grasslands, while controlling the pollution of the air, water, and soil should be strengthened, Xi said.

19 minute CCTV Evening News Report Saturday on the HUbei inspection tour - 习近平在湖北考察时强调坚持新发展理念打好“三大攻坚战” 奋力谱写新时代湖北发展新篇章

Xi put on a lab coat to inspect a chip factory:

4. Xi-Modi Meeting

It does not sound like any of the key differences were resolved, but is the "reset" enough to cast doubt on India's commitment to and stability within the "Quad" framework?

Modi, Xi issue 'strategic guidance' to militaries to build trust on border affairs |Times of India:

In a strong commitment to avoid future Doklams and reduce border tensions, Chinese President Xi Jinping and Prime Minister Narendra Modi issued "strategic guidance" to their militaries to build trust and enhance "predictability and effectiveness" in managing border affairs. "The two leaders underscored the importance of maintaining peace and tranquillity in all areas of the India-China border region in the larger interest of the overall development of bilateral relations," the Indian statement on the Modi-Xi informal summit said.

Xi expects meeting with Modi to open new chapter in China-India ties | Xinhua:

Xi suggested that both sides should look at the complete picture of Sino-Indian ties from a strategic perspective, so as to ensure that relations between the two countries always proceed in the right direction.
He called for continuous strengthening of friendly relations between the two countries so that their friendship will continue to flow forward like the Yangtze and Ganges rivers.

Comment: What about the dams on those rivers?

India-China summit highlights Modi's hope vs Xi's strategy - Nikkei Asian Review:

The Wuhan summit, with no set agenda other than to improve the relationship, was billed as a chance to "reset" ties. No breakthroughs on major disputes were expected. But no sooner had the summit ended than significant differences emerged on how India and China interpret even the understandings reached at Wuhan.
For example, India said the two leaders "issued strategic guidance" to their respective militaries to avoid further border friction. But China's statement made no mention of that. India, which has chafed against increasingly lopsided trade with China, said agreement was reached to strengthen trade and investment in a "balanced and sustainable manner." But that key phrase was missing from Beijing's version.
Such differences are no surprise: The summit was long on political theater, such as shows of amity, but short on concrete results to fundamentally change the Sino-Indian dynamics

CCTV Evening News report on the Xi-Modi meeting--习近平同印度总理莫迪在武汉举行非正式会晤_CCTV

5. "Marx Was Right"

CCTV is running a quiz show "Marx Was Right":《马克思是对的》第一集你好马克思（完整版） | CCTV - YouTube :

Here is the program page on the CCTV web site, four episodes so far.

A new class struggle: Chinese party members get back to Communist Manifesto basics | South China Morning Post:

The study session, which was played up by state media, is Xi’s latest attempt to restore the shaky – if not long-lost – faith in Marxism and communism in the 90 million members of the world’s largest political party.
It also echoes with his call for greater self-confidence in the country’s chosen path, theory, system, and culture – known as the “four confidences” – especially amid wariness at home and abroad that China is going backwards, with concerns about stalled liberal reforms for a more open society, Xi’s concentration of power, the scrapping of presidential term limits and the fusion of the party with the state...
Chen Xi, head of the party’s Organisation Department which oversees personnel decisions, lamented in November that some officials had lost faith in communism and considered it an “entirely unreal mirage”.
“Some don’t believe in Marx and Lenin but believe in ghosts and gods,” he wrote in party mouthpiece People’s Daily. Some officials, he went on to complain, had lost faith in socialism and instead looked to Western concepts of the separation of power and multi-party systems as their ideal...
Xi, who has shown greater enthusiasm for communist orthodoxy than his immediate predecessors, has repeatedly called on academics and party ideologues to focus equally on absorbing Marxist classics and adapting the theory to contemporary conditions to form a “contemporary Chinese Marxism”.

Reading the Communist Manifesto with Xi Jinping – Andrew Batson's Blog:

Last week, Xi Jinping led the Politburo of the Chinese Communist Party in a “group study session” of the Communist Manifesto of Marx and Engels–170 years after its first publication. This event seems destined to have a special place in histories of socialism and its reinterpretation: in what other study of this document would class struggle and the public ownership of the means of production not even rate a mention? At least, those terms did not appear in the Xinhua dispatch issued after the session (Chinese original here); Xi’s no doubt lengthy speech to the meeting has not yet been published in full.
Such evasions are one reason why there is a tendency for outsiders to see these kind of events as a kind of playacting that has no meaningful content and is disconnected from the realities of the country. But I think they can be quite informative about how those running China think..

Michael Kovrig, Senior Adviser for North East Asia at the CrisisGroup and a former Canadian diplomat had this to say about wether Xi is a Communist and Marxist:

Michael Kovrig@MichaelKovrig

I’ve been saying this for years: Xi Jinping is a Communist. He means it, in terms of a Marxian dialectical analysis of the world and a Leninist approach to governance, which includes rule by fear and harnessing all aspects of the economy in the service of state power

April 30, 2018

Reluctant Stakeholder: Why China’s Highly Strategic Brand of Revisionism is More Challenging Than Washington Thinks - MacroPolo:

But if many critics overstate what China is not, they also understate what China actually is—a stakeholder in existing institutions and rules but a habitually reluctant, seldom satisfied, and frequently ambivalent one, at best.
This means the challenge to Washington is far more complex than if China actually did seek to overturn the international order wholesale.
To put this pithily, China accepts most forms but not necessarily our preferred norms. And that disconnect between forms and norms means that Beijing’s revisionism and demands for change often play out within the existing international framework…
It is often argued that China rejects these liberal norms internationally because it has an illiberal, Leninist government at home. But that is just one part of the story.
In fact, the Communist government’s skepticism of the application of liberal ideas internationally reflects not just its Leninism but also its deep-seated foreign policy traditionalism. The roots of this lie squarely in the 1990s—fully two decades before Xi Jinping, a committed Leninist, took power.

Comment: Interesting piece from an architect of the “responsible stakeholder” idea, but no mention of Marx.

"Ren Zhongping" in People's Daily on Marx, on the 200th anniversary of his birth-他的英名和事业永世长存--观点--人民网

Opinion | Happy Birthday, Karl Marx. You Were Right! - The New York Times:

While most are in agreement about Marx’s diagnosis of capitalism, opinion on how to treat its “disorder” is thoroughly divided. And this is where Marx’s originality and profound importance as a philosopher lies...
The transition to a new society where relations among people, rather than capital relations, finally determine an individual’s worth is arguably proving to be quite a task. Marx, as I have said, does not offer a one-size-fits-all formula for enacting social change. But he does offer a powerful intellectual acid test for that change. On that basis, we are destined to keep citing him and testing his ideas until the kind of society that he struggled to bring about, and that increasing numbers of us now desire, is finally realized.--Jason Barker is an associate professor of philosophy at Kyung Hee University in South Korea

Dr. Barker will be welcome in Beijing.

6. Daoist Priests Bless Nuclear Project

Seven Gansu officials are under investigation for holding a Daoist ceremony to bless the start of construction of a thorium molten salt reactor (TMSR) system project.

中科院项目奠基，请道士做法？！_搜狐社会_搜狐网:

新华社兰州4月28日电在甘肃省一重大项目的奠基现场，出现了贡品祭天、道士做法的荒唐一幕。28日，7名当时在场的公职人员被立案审查。
26日，一篇名为“甘肃核项目奠基，道士做法保平安”的帖子在微信等网络空间热传，引来广泛关注。记者了解到，事发地点为甘肃省武威市“钍基熔盐堆核能系统（TMSR）项目”的奠基现场，此项目选址为民勤县红砂岗。从帖子的图片中可以看到，现场设有供桌，上面放着祭品，一个一身道士打扮的人手持“法器”，做出各种动作。最后，现场还烧了一堆“符纸”。

A video of the ceremony, on Youtube:

I don't know, when building nuclear projects maybe you should cover all the bases? But dabbling in any religions or superstitions is taboo for Party cadres.

7. Subversive Pig Meets Censorship Butcher

Chinese video app removes undesirable subculture icon Peppa Pig - Global Times:

Chinese video platform Douyin removed BBC's cartoon Peppa Pig, as it has become an unexpected cultural icon of "shehuiren" subculture. ○
Shehuiren refers to people who run counter to mainstream values and are usually poorly educated with no stable job.
A replacement Chinese cartoon emoji, Dudu Pig, is being promoted on domestic social media..
It takes a stretch of the imagination to link the seemingly innocent Peppa Pig with China's shehuiren subculture, but after going viral, the piglet has caused considerable domestic controversies.
The popularity of Peppa Pig in China shows a spirit of innovation, Chinese experts said, but it could also bring negative influence to the young generation if they overindulge in such a subculture...
Apart from Peppa Pig, a new Chinese-created emoji called Dudu Pig was the latest hot topic on Weibo, garnering over 44 million views and 167,000 posts as of press time. Most netizens posted food and scenery photos with Dudu Pig's emoji.
It is not clear yet whether this domestic pig can quell subversive enthusiasm for Peppa Pig. But an article circulated widely last year revealed that, among the Chinese middle class, there is a "disdain chain" in terms of cartoon choices.
Children born to a middle class family will watch BBC's Peppa Pig and they disdain those watching domestic cartoons such as Pleasant Goat and Big Big Wolf, read the article.

8. Wu Jinglian On China's Quest For Indigenous Semiconductors

Opinion: Government-Led Chip Technology Drive Could Lead to Low Efficiency, Corruption - Caixin Global:

In 2013, well-known Chinese economist Wu Jinglian wrote the following letter to Miao Wei, the minister of Industry and Information Technology, in which he described the challenges that lay ahead for the country’s chip manufacturers. The letter has been translated and edited for length...
China’s recent experience in developing emerging industries shows that investment and financing methods must be conducive to helping to strengthen the hard constraints on corporate budgets. Many local governments used government-affiliated organizations to arrange matters, with government leaders deciding for themselves which companies should receive investment. Even though this method of investment had an immediate effect, it was unable to encourage businesses to keep costs down and increase efficiency. It frequently caused corruption and waste, breeding dependency in companies and diminishing other companies’ enthusiasm.
In order to increase investment efficiency, even if the government persists in controlling funds and resources, there should still be an independent organization conducting the work of commercialization. For example, when companies are supported by venture capital and private equity, investors and fund managers are usually required to form limited partnerships run by managers with unlimited liability. But the local-government-created venture capital and private equity funds in China are largely too close to the government, so they invest based on the preferences or even direct instructions of government officials. The probability of successful incubating and expanding companies is low. This must change.

Business, Economy, Finance And Trade

Founder of China Buyout Fund Convicted of Insider Trading - Caixin Global U.S. investigators targeted Chow during a probe of Yin in another alleged insider trading case. Yin is a former partner of the Hong Kong-based private equity fund Summitview Capital. According to Bloomberg, Yin was sued last year by the U.S. Securities and Exchange Commission but wasn’t charged criminally. His brokerage accounts holding more than $29 million were frozen for allegedly making illegal profits from insider trading ahead of Comcast Corp.’s planned takeover of DreamWorks Animation LLC in 2016.

HNA Group’s Debt Overhang Expanded in 2017_Caixin Global_财新网 A stock exchange filing (Link in Chinese) on HNA’s 2017 financials released late Friday shed light on the conglomerate’s persistent debt pressure. By the end of 2017, HNA had total assets of 1.23 trillion yuan ($194 billion), up 21.3% from the previous year. But debt grew even faster, by 22% to 737 billion yuan at the end of last year, the financial report showed. The debt-to-assets ratio climbed to almost 60% at year-end.

China-based HNA drops deal to buy Skybridge Capital A group of Chinese investors is dropping its bid for Anthony Scaramucci’s SkyBridge Capital — leaving the one-time White House communications chief out of about $100 million, according to a report. The Chinese conglomerate HNA Group is walking away after the federal government held up the transaction for more than a year on national security concerns

China Steps Up Scrutiny of Public-Private Partnerships in Fight Against Hidden Debt_Caixin Global_财新网 State-owned enterprises (SOEs) and local government financing vehicles (LGFVs) — special-purpose entities set up to raise money for local infrastructure projects — are barred from signing PPP contracts on behalf of local governments, nor can they participate in such projects as private players, the ministry said Friday in a statement on its website. A source close to the ministry said the statement reiterated previous policies regarding state companies and LGFVs’ participation in PPP projects. But an official at a local government fiscal department said that despite existing rules, it has been common for SOEs and LGFVs to represent local governments in PPP projects, blurring the boundary between government and business.

A Limit to China’s Economic Rise: Not Enough Babies - WSJ In the nation with one of the lowest fertility rates in the world, couples are still discouraged from having multiple offspring—children who could help rejuvenate the fast-aging population.

Politics, Law And Ideology

Local Sichuan officials punished for plagiarism in annual ideological reports - Global Times The Communist Party of China (CPC) disciplinary department in Dongxing district, Neijiang, Sichuan Province, inspected the district officials' 2017 self-assessment reports and discovered foul play, reported an official publication of the CPC Central Commission for Discipline Inspection. Some officials used their 2016 reports and conveniently changed the date to 2017, while some others changed the "18th National Congress of the CPC" of their old reports into 19th. Meanwhile, two reports struck a 95 percent resemblance.

The Rise and Rise of the United Front Work Department under Xi - Jamestown By unequivocally placing the UFWD at the center, many of the problems and inefficiencies of the old system can be overcome, at least in theory. The Department itself is now even more under the direct control of the CCP’s Central Committee via the Committee’s new Leading Small Group on United Front Work, substantially increasing its ability to impose its policies downwards as intended. Most importantly, since assuming Party leadership in 2012, Xi himself has been forcefully promoting united front work and the UFWD, most notably by appearing at the national United Front Work Conference of 2015. Xi has also raised the status of the Department’s work and its place within the bureaucracy in ways which make a career in it much more attractive and should help attract better quality cadres.

Law to protect heroes' honor to take effect May 1 - Xinhua The law, which promotes patriotism and socialist core values, bans activities that defame heroes and martyrs or distort and diminish their deeds. It stresses that those who violate their rights of name, portrait, reputation, and honor will be punished. It also outlaws acts that glorify invasions, with offenders facing administrative or criminal punishments according to the severity of their actions.

Grid Management and Social Control in China – China Policy Institute: Analysis With the grid or netted management, a local government divides the territory under its jurisdiction into a number of segments, with each segment being monitored by a designated person. These monitoring agents are expected to submit information they have collected to the designated authority on a regular basis. This mode of monitoring has been employed in both rural areas and urban communities. In some cities, one grid-management person is responsible for collecting information on a specified number of households (e.g., 15 to 20). These management people are expected to collect information on the population size in the area, housing and facilities, social organizations, and other details. In one city, for example, a grid management centre in a district coordinates more than 10 sub-grid-management centres. These sub-centres oversee over 300 workstations located in residential communities in the district. These workstations and their sub-centres regularly report local information to the district centre. The district centre and the city centre also conduct inspections among the neighbourhoods to identify issues and problems. This monitoring system acts as a major channel through which the local authority obtains information on the residential communities in this district.

Foreign and Military Affairs

China could be excluded from peace talks after Donald Trump-Kim Jong-un summit, analysts say | South China Morning Post Zhang Liangui, a Korea specialist at the Central Party School, which trains Communist Party officials, said Beijing’s policy on North Korea in recent years could see it excluded from the peace process. “The stance of China’s foreign ministry has been that [the North Korean nuclear crisis] is none of its business and that North Korea and the US should be communicating directly,” Zhang said. “So now things are out of China’s control and it is no surprise that it is being excluded from the discussions.”

Chinese foreign minister Wang Yi’s North Korea visit ‘could make case for four-party talks on peninsula’ | South China Morning Post China’s foreign minister will travel to North Korea on Wednesday in the first such visit since 2007, which analysts say may show Beijing’s desire to join the next stage of talks involving the two Koreas and the United States.

Avoiding U.S.-China Competition Is Futile: Why the Best Option Is to Manage Strategic Rivalry Rising tensions between China and the U.S. have spurred fears that the two countries could end up in conflict or recreate the Cold War. To avoid these outcomes, analysts have proposed ways to defuse competition and promote cooperation. However, because these arguments do not address the structural drivers underpinning U.S.-China competition, such proposals are unlikely to end the rivalry. Conflict is not inevitable, however, and aggressive strategies that unnecessarily aggravate the sources of rivalry are likely to prove dangerously counterproductive. The best option at this point is, paradoxically, for the U.S. to accept the reality of the growing strategic rivalry and manage it at a lower level of intensity.

Japan to host summit with China, South Korea on May 9 | Reuters Japan will host a summit with President Moon Jae-in of South Korea and Chinese Premier Li Keqiang in Tokyo on May 9 to discuss regional issues, the government said on Tuesday, with observers expecting North Korea to be high on the agenda.

Former Hong Kong minister Patrick Ho sought help from Beijing to fight bribery charges, court documents show | South China Morning Post Former Hong Kong home affairs minister Patrick Ho Chi-ping, who is detained in New York for allegedly bribing officials in Africa, had sought help from Beijing, claiming he was being used to “get to the big tiger”, the latest court documents have revealed.

Tech And Media

Local governments power up to advance China’s national AI agenda | Mercator Institute for China Studies In the pursuit to outbid each other, their local targets even exceed ambitious national goals. 11 local governments published targets for their AI core industries for 2020. Accumulated, this would create an AI core industry of almost 400 billion CNY in 2020, exceeding the national target of 150 billion CNY more than twofold. While the unparalleled enthusiasm of local governments will accelerate China’s AI development considerably, it also carries the risk of creating overcapacities. Frontrunners in the AI race are China’s most advanced economic centers Beijing, Shanghai and Shenzhen. As tech hubs and headquarters of the pioneers of China’s AI drive such as Baidu and Tencent, and of major AI startups including leaders in facial recognition technology SenseTime and Megvii, these cities will harness a massive impetus with powerful state backing.

China’s Baidu turns to AI to police online content, but is the technology reliable? | South China Morning Post Baidu, operator of China’s largest online search engine, has stepped up efforts to ensure search results and other content, including news or video, that it sends to users are “clean” and “decent”, using the same cutting-edge technology for its ventures in autonomous driving and conversational devices. The company has used AI to identify and remove click bait and vulgar content, said chief executive Robin Li Yanhong in a conference call with analysts on Friday. // Comment: How much of this AI was developed in Baidu's san Jose, California research lab?

‘Forget the Facebook leak’: China is mining data directly from workers’ brains on an industrial scale | South China Morning Post Government-backed surveillance projects are deploying brain-reading technology to detect changes in emotional states in employees on the production line, the military and at the helm of high-speed trains

Didi vs. Meituan: China’s Biggest Tech Battle Heats Up — The Information $$ The Information spoke to managers and executives at both companies on the frontlines of the biggest battle in China’s tech scene this year. The two firms are using a mix of cash-burning promotions, data analysis and street-level snooping on the competition. Both are counting on their ability to tap their enormous base of existing customers and partners to gain the upper hand. Didi says it has 450 million users, while Meituan says it has 320 million. The two companies are also taking their fight to capital markets as they consider going public. Both Didi and Meituan are in talks with bankers about possible initial public offerings in Hong Kong or New York as early as this year, according to people familiar with the matter. Neither company has commented on any listing plans.

PUBG Hack Progam Developers Arrested and Fined Over $5 Million - IGN PUBG has been plagued by cheaters for months now, with the studio implementing anti-cheat measures to tackle the problem. In its latest update, the studio shared that 15 suspects were arrested in China last week for developing and selling "hacking/cheating programs that affect PUBG," and have been fined the equivalent of $5.1 million, with other suspects related to the case still under investigation.

Michael Zeisser has left as Alibaba’s top U.S. dealmaker - Recode Zeisser disagreed with Executive Vice Chairman Joe Tsai over investment strategy, sources familiar with the situation said.

Society, Art, Sports, Culture And History

The murals of Tibet, with an assist from the Dalai Lama American photographer Thomas Laird spent 50 hours over 10 years with the Dalai Lama, and through all those candid conversations, one point stood out: Before his holiness could read, Tibetan murals were crucial to his early education. Now Laird has compiled images of 130 centuries-old, life-size artworks into “Murals of Tibet,” newly published by Taschen. The sumo-sized tome is the first collection of representative Tibetan art blessed by the Dalai Lama, who signed all 998 copies of the 500-page limited-edition book. // $12,000 for each beautiful book

Chinese art professor sacked after award-winning poster series found to be plagiarised | South China Morning Post Fan Yu has lost his job and his Red Dot design award after it emerged he had borrowed many elements of a work by British illustrator Russell Cobb

US Negotiators Told Beijing Won't Negotiate …

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