US says Hong Kong no longer has high degree of autonomy; Meng Wanzhou case to continue; India-China border tensions

As expected, US Secretary of State Pompeo has declared that:

Hong Kong does not continue to warrant treatment under United States laws in the same manner as U.S. laws were applied to Hong Kong before July 1997. No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.

Now we wait for what decision President Trump will make on what penalties to invoke, if any. Removing the special treatment on trade and immigration for Hong Kong will hurt Hong Kong citizens and US companies as much or more than it will hurt the CCP, so I think the odds are more weighted to restrictions around technology exports to Hong Kong and targeted moves against PRC SOEs, including financial ones, and certain officials. The scope and intensity of coming US actions appear to depend on what Trump decides about the value of trying to keep the trade deal alive.

Canada and Canadians in China should expect a rough time ahead given the decision earlier today by a Canadian judge to reject Meng Wanzhou’s attempt to her extradition case tossed.

The items in today’s Essential Eight are:

  1. Hong Kong

  2. US-China

  3. The two sessions

  4. Meng Wanzhou case to continue

  5. US Congressional report on PRC banks

  6. India-China border tensions

  7. Pandemic and Chinese overseas

  8. Interview with Chan Koonchung

The CPPCC meeting ended today, the NPC finishes tomorrow.

Thanks for reading.


The Essential Eight

1. Hong Kong

PRC National People’s Congress Proposal on Hong Kong National Security Legislation - United States Department of State

Last week, the People’s Republic of China (PRC) National People’s Congress announced its intention to unilaterally and arbitrarily impose national security legislation on Hong Kong. Beijing’s disastrous decision is only the latest in a series of actions that fundamentally undermine Hong Kong’s autonomy and freedoms and China’s own promises to the Hong Kong people under the Sino-British Joint Declaration, a UN-filed international treaty.

The State Department is required by the Hong Kong Policy Act to assess the autonomy of the territory from China. After careful study of developments over the reporting period, I certified to Congress today that Hong Kong does not continue to warrant treatment under United States laws in the same manner as U.S. laws were applied to Hong Kong before July 1997. No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.

Hong Kong and its dynamic, enterprising, and free people have flourished for decades as a bastion of liberty, and this decision gives me no pleasure. But sound policy making requires a recognition of reality. While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself.

The United States stands with the people of Hong Kong as they struggle against the CCP’s increasing denial of the autonomy that they were promised.

新华时评:西方某些媒体,请学会放下“剧本”看事实-新华网

Xinhua commentary: Some western media, please learn to put down your screenplay and see the facts.

China highly appreciates Russia's position on Hong Kong-related affairs: FM spokesperson - Xinhua

Spokesperson Zhao Lijian made the remarks at a press conference when asked about comments by Russian Foreign Minister Sergei Lavrov on Tuesday. Lavrov said that Hong Kong affairs fall within China's domestic affairs, while the United States' threat to impose sanctions on China fully exposed their sense of superiority and impunity, which is not conducive to effective dialogue between the United States and China on other issues.

China’s leaders ‘arrogant and aggressive’ over Hong Kong security law, EU politician says | South China Morning Post

China had been “strongly underscoring an impression that people have been gathering during the development of the Covid-19 crisis … that the leadership in Beijing is moving beyond being assertive, into being aggressive and arrogant”, said Reinhard Butikofer, chairman of the European Parliament’s Delegation for Relations with the People’s Republic of China.

National security legislation not to bring any changes to fundamentals of HK's financial system: monetary authority head - Xinhua

Chief Executive of the Hong Kong Monetary Authority (HKMA) Eddie Yue has said the national security legislation for the Hong Kong Special Administrative Region (HKSAR) will not bring any changes to the fundamentals of Hong Kong's monetary and financial system.

The free flow of capital and free convertibility of the Hong Kong dollar will continue to be safeguarded by Article 112 of the Basic Law, Yue said in an online article.

Hong Kong Protesters Taking Greater Risks to Challenge Beijing - WSJ $$

Pop-up rallies that started in the late morning disrupted traffic, and police said they arrested 300 people by early evening, mostly for alleged unlawful assembly. Street demonstrations were more muted than some protest groups had called for, with hundreds of riot police filling streets surrounding the city’s legislature in the morning. Several layers of barricades encircled the complex; few protesters were seen there.

暴徒火烧无辜市民完整画面曝光 香港市民:香港之耻_网易新闻

CCTV short video filled with scenes of violence and chaos in Hong Kong

Taiwan will help fleeing Hongkongers move to island, Tsai Ing-wen says | South China Morning Post

Tsai said her cabinet would form an ad hoc committee to work out a humanitarian action plan for Hong Kong people.

Under the plan, the Mainland Affairs Council, the island’s top mainland policy planner, would establish concrete ways for the administration to help Hongkongers “live, relocate and work in Taiwan”, Tsai said.

Tycoon Li Ka-shing throws weight behind Hong Kong national security law, suggests it will ease Beijing ‘apprehension’ about city | South China Morning Post

“It is within each and every nation’s sovereign right to address its national security concerns. We need not over-hypothesise it,” he said.

“Hopefully, the proposed new law can allay the apprehension the central government feels about Hong Kong and from thereon, a positive outlook can begin to prevail.”

Li added that the city government has a “mission-critical task” to strengthen Hongkongers’ confidence and reinforce the international community’s trust in the one country, two systems principle.

Li's satement:

「任何國家對自身國家安全問題有權責, 大家不必過份解讀;通過《港區維護國家安全法》,希望可以紓緩中央對香港的擔憂,發揮長遠穩定發展的正面作用;同時,特區政府責無旁貸,要鞏固香港人對『一國兩制』的信心,和強化國際社會的信任。」

What is China’s proposed national security law for Hong Kong? | Financial Times $$

It is also unclear if the law will apply retroactively, whether Hong Kong courts or mainland Chinese courts will administer the law and how China’s secret police will operate in Hong Kong. “From Beijing’s point of view, these uncertainties may be a feature rather than a bug: fuzzy legal boundaries will compel more people to engage in self-censorship,” said Alvin Cheung, a legal scholar.

决不容许以双重标准挑衅国际正义(钟声)

阻挠破坏中国维护国家安全的努力,是典型的双重标准和强盗逻辑。任何借插手香港事务干涉中国内政的企图,都是注定失败的痴心妄想


2. US-China

Two Sessions 2020: China-US rivalry in ‘high-risk period’, Chinese defence minister says | South China Morning Post

Speaking during a panel discussion on the sidelines of the National People’s Congress (NPC) on Saturday, Defence Minister Wei Fenghe said that China needed to bolster its fighting spirit, while other military leaders said the country had to catch up with Western nations in its development of core technologies.

“The United States has intensified the suppression and containment of our side since the [coronavirus] outbreak, and the Sino-US strategic confrontation has entered a period of high risk,” Wei, who is also a general in China’s People’s Liberation Army (PLA), said.

“We must strengthen our fighting spirit, be daring to fight and be good at fighting, and use fighting to promote stability.”

国际锐评丨美国“长臂猿们”在香港问题上还在做梦! - 中国日报网

the latest "international sharp commentary" from China Radio International compares American politicians to long-armed apes, referring to the long-arm of US law, when attacking them over Hong Kong and what it says are the US government’s attempts to use Hong Kong to sow chaos and keep China down

显然,美国一些政客之所以对涉港国安立法反应激烈,从根本上说是因为他们担心在香港有效堵上国家安全漏洞后,再也没机会肆意妄为地插手和干预香港事务,他们借“香港牌”牵制中国的梦想将彻底幻灭了。

中国政府维护国家主权、安全、发展利益的决心坚定不移,贯彻“一国两制”方针的决心坚定不移,反对任何外部势力干涉香港事务的决心坚定不移。此次中国全国人大将涉港国安立法纳入议程进一步表明:中国绝不允许反中乱港分子与外部反华势力相互勾结破坏香港社会秩序、干涉中国内政;香港也绝不可能成为美国政府维护世界霸权的牺牲品。提醒美国“长臂猿们”,早一点从梦中醒来,切莫误判形势,一错再错

China facing soybean dilemma as it tries to balance phase one trade deal with self-reliance | South China Morning Post

Gu Zhenchun, a deputy with the Standing Committee of the National People's Congress representing Heilongjiang province, told the state-owned People’s Daily on Monday that the northeastern region must find and research new sources to replace soybeans and cut import reliance...

“With the escalating trade friction between China and the US and the coronavirus pandemic, the security of edible oil and livestock feed is becoming more prominent,” Gu said. “Substituting for imported soybeans to reduce import dependence has become the focus for government departments and researchers.”

Comment: One more example that in certain areas at least the fallout from the US-China trade war is likely to be permanent.

决不容许以双重标准挑衅国际正义(钟声)

“Double standards that challenge international justice should never be allowed,” People’s Daily’s Zhong Sheng lashed out at the US for opposing the Hong Kong national security law. It said the US government used new legislations and abused its power to crack down on crimes and terrorism after 9/11, so now it has no place to criticize China’s legitimate efforts to crack down on the rioters in Hong Kong, who it said “already have terrorism elements”. 

Era of US intimidating China over: Global Times editorial - Global Times

Many Chinese people have realized that some US politicians are seizing China by its throat. A long-term rivalry between China and the US is inevitable. In the face of US aggression, China should adopt a calm mentality and be prepared to engage in a long-term battle with the US...

Another core advantage of the US is its financial hegemony, which will make China's exchanges with the outside world inconvenient. If the US dares to resort to financial means, it will hurt the integrity of the financial system it leads.

If a financial war spirals out of control, it is the US that will suffer the most. With its real economy shrinking, the US economy is largely relying on the financial sector, which means launching a financial war equals self-harm.

How do experts view financial conflict of top two economies? - Global Times

Some US politicians have been relentlessly pursuing an escalation in tension with China for the sake of short-term political interests, even at the cost of the US' leading financial position in the world. With the Trump administration claiming to announce a "strong response" this week to intervene in China's domestic legislation, as well as recent US politicians' insults about Chinese companies listing on American stock markets, global investors are concerned that the US might start a "financial war" with China. In interviews with the Global Times, two Chinese economists noted that although a comprehensive financial war is not likely, conflicts is inevitable due to US politicians' political schemes, which will hurt China but will also damage US financial sectors.

钧声:撼山易,撼解放军难 - 中国军网

Day 8 of Jun Sheng in the PLA Daily—very unhappy about a Foreign Policy article entitled “The Chinese Military Cannot Honor Its Humanitarian Promise.” Claims the article stated the PLA was clearly absent from the pandemic response and that Asian Pacific nations could not count on the PRC’s help. The article goes on to discuss the many dangerous situations the PLA helped with and the amount of aid it sent to various militaries. And of course the US is to blame for militirazing the South China Sea

值得注意的是,美国近期不顾多艘军舰出现确诊病例、深受疫情困扰的窘境,反而在中国周边海空域频繁开展军事活动,美军舰机频频在南海海域寻衅滋事。我们对此坚决反对。事实一再证明,美方是南海军事化的最大推手,是地区安全稳定的“麻烦制造者”。中国人民解放军始终保持高度戒备,坚决捍卫国家主权、安全、发展利益,坚决维护地区和平与稳定。奉劝美国收起霸权行径那一套,多花心思把自身疫情解决好,少到别国的家门口炫耀武力。

The official translation - IT'S MUCH EASIER TO MOVE MOUNTAINS THAN SHAKE THE PLA - PLA Daily - Jun Sheng

While the PLA was actively supporting civil epidemic response and making all-out efforts to help fight the coronavirus in Wuhan and Hubei province, the American journal Foreign Policy published on its website an article concocted by a former US official titled “China’s Military Can’t Deliver on Humanitarian Promises”, which claimed that the PLA had been absent from the anti-virus efforts and reminded Asia-Pacific countries not to count on China’s help. The true intention behind the article was to sow discord between the PLA and the Chinese people, and deliberately disparage the PLA’s image during the anti-epidemic battle....

Notably, while several of its aircraft carriers and military vessels were deeply troubled by the epidemic with a rising number of confirmed cases, the US has recently ramped up military activities in waters and airspace around China by sending military planes and ships to make constant provocations in the South China Sea. We are strongly opposed to these moves. Facts have proved once again that the US is the primary force pushing for militarizing the South China Sea and a trouble maker undermining regional security and stability. The PLA will stay on high alert, determined to defend national sovereignty, security and development interests and maintain peace and stability in the region. We advise the US to stop its hegemonic actions, focus more on controlling the pandemic at home, and stop flexing muscles at other countries’ doorstep.

Coronavirus Shows China's Military Can't Deliver on Promises - By Elizabeth Phu, Anish Goel - Foreign Policy

The offending article, from February 20, 2020

U.S. Struggles to End Reliance on Rare-Earth Minerals From China - Foreign Policy

The problem is that, despite years of steadily increasing efforts under the Trump administration, the United States—both the public and private sectors—has yet to figure out how to redress the fundamental vulnerabilities in its critical materials supply chain, and America still seems years away from developing the full gamut of rare-earth mining, processing, and refining capabilities it needs if it seeks to wean itself off foreign suppliers.

观察者网:沈逸:正式承认40年对华和平演变失败,美国想干什么?

Shen Yi of Fudan University said the US Strategic Approach to China document pushed out by the White House is “shameless” since it claims to protect the American people, while nearly 100,000 have died of the coronavirus “due to the unimaginable level of incompetence” of the Trump administration. It went on saying the report is “disgusting” as it shows the Americans’ arrogance, failed governance and as a result its inevitable decline. Shen said Washington will continue to use China to deflect blame, and it will only accelerate its decline.

China-US rivalry and threats to globalisation recall ominous past | Financial Times - Martin Wolf $$

Above all, we must not forget how unbridled great-power competition has normally (though not always) ended. Yet today’s world economy is far more integrated than ever before and so the costs of deglobalisation must be correspondingly greater. We need to remember, too, that the weapons now available are far more destructive than those of a century ago. This time, too, there are no outside powers able to save China and the US from themselves. Perhaps most important, we need a far higher level of global co-operation than ever before if we are to manage our global commons. 

These are difficult and dangerous times. We need to rise to the occasion but are not. This is a fact. Recognise it.

Suing China over COVID-19 against international law: expert - Xinhua

Some U.S. officials' attempts to sue China for causing the COVID-19 pandemic are outright violations of international law, according to an article carried by Wednesday's People's Daily...

It was a gross violation of China's national sovereignty and the principle of sovereign equality which is widely acknowledged by the international community and the UN Charter, according to the article under the byline of Huang Jin, president of the Chinese Society of International Law.

彻头彻尾的违反国际法行为--国际--人民网

(作者为中国国际法学会会长)


3. The two sessions

CPPCC holds closing meeting of annual session, receives 5,488 proposals from advisors - Global Times

Wang Yang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and chairman of the National Committee of the CPPCC, delivered a speech at the closing meeting.

Wang noted that China's anti-epidemic battle has bolstered the country's confidence, national strength and the path of socialism with Chinese characteristics. Furthermore, the country will firmly reject formalism and bureaucracy.

Wang stressed that the CPPCC will continue to contribute to the development of Chinese-style democracy, which is deeply rooted in the soil of Chinese society and plays a significant role in national governance.

Tap big data to better fulfill duties, Wang Yang advises - CGTN

At the closing meeting of one of the country's most important political events on Wednesday, China's top political advisor Wang Yang urged the use of modern technology, including big data and the internet, to better fulfill officials' duties, while reiterating the importance of the "Chinese-style democracy" in the advising systems.

Full text of the speech by Wang Yang that concluded the CPPCC conference on Wednesday. - (两会受权发布)汪洋:在全国政协十三届三次会议闭幕会上的讲话

The Government’s Three Key Priorities for 2020 - Yicai

Premier Li’s report focused on three priorities for 2020: stabilizing employment, ensuring living standards and winning the battle against poverty.

The importance of these three priorities can be seen in the graph below which compares how often the phrases “employment”, “living standards” and “eliminate poverty” appear in the 2020 and 2019 Work Reports. Their frequency this year is all the more striking given that this year’s report is only half as long as 2019’s. The term “employment” appears almost 40 times, even more often than the term “pandemic”. There is a difference in emphasis as well. In this year’s report, 12 of the 21 references to “living standards” are about preserving or ensuring those standards. This compares with only 5 of 14 last year. Similarly, this year’s report stresses protecting or stabilizing “employment”.

【专家漫评】黄守宏解读为什么把保就业列为“六保”之首-新华网

Huang Shouhong, head drafter of the government work report and director of the Research Office of the State Council said the major obstacles of China’s economic development currently are employment and people’s livelihood. It is sure that this year’s unemployment rate will rise despite government’s policy to promote employment.

China keeps tech priority in 'new development pattern' - Nikkei Asian Review

Among the announcements made, at a time when nationalist sentiment is running high, is that the construction of the $5 billion Circular Electron Positron Collider, not unlike the CERN project in Switzerland, is moving a pace. Some of the equipment for the project to find the elusive Higgs boson particle that could yield clues to the origins of life has reached "design standard," Wang Yifang, director of the Institute of High Energy Physics, told state media Global Times on Monday.

On Friday, Premier Li Keqiang told the NPC: "We will accelerate the development of national laboratories, restructure the system of key national laboratories and develop private R&D institutions."

Chinese legislator proposes banning foreign translation at government press conferences | South China Morning Post

The motion raised by Yang Weiguo – the mayor and deputy Communist Party secretary of Zhuzhou, a city in central China’s Hunan province – at the national legislature would showcase China’s cultural confidence and improve efficiency at major diplomatic events and press briefings, he told the party mouthpiece People’s Daily.

“Language is a medium for civilisation, and to a large extent carries our national culture and spirit,” he was quoted as saying. “By cancelling foreign language translation at official press briefings and conferences, this would help effectively promote the spread of Chinese culture across the world, elevating the appeal and influence of the Chinese language, as well as increasing China’s initiative and right to speak in international discourse, further showing our confidence in Chinese culture.”

Tech CEOs Voice Privacy Concerns, Propose Compulsory Coding Courses in China's Two Sessions- PingWest

Among members of the CPPCC are a number of China's tech CEOs, who have gathered enormous wealth building successful companies in the largely walled-off internet sectors, and are now trying to converting their industrial significance gained along the way into political influence, through announcing a slew of proposals that are mostly inline with the country's direction spearheaded by the Communist Party.


4. Meng Wanzhou case to continue

Huawei executive Meng Wanzhou loses key decision in extradition hearing - The Globe and Mail

A B.C. Supreme Court judge has denied an early attempt by Huawei Technologies Co. Ltd. executive Meng Wanzhou to gain her freedom, ruling that her alleged bank fraud is a crime in both Canada and the United States.

The decision in the extradition case, released Wednesday, means that Ms. Meng will continue living under partial house arrest in her Vancouver mansion, where she has been since shortly after she was arrested in December 2018 while connecting through Vancouver’s airport. Had the decision gone the other way, Ms. Meng could have been free to return to China.

In her 23-page ruling, Associate Chief Justice Heather Holmes stated that Ms. Meng allegedly lying to HSBC’s U.S. subsidiary in 2013 to obtain almost a billion dollars of credit would still constitute fraud if it occurred in Canada

Ruling on Meng shows Canada lost judicial, diplomatic independence to US bullying: experts - Global Times

A Canadian court on Thursday defied widespread expectations and ruled to keep Huawei Chief Financial Officer Meng Wanzhou in custody, a move Chinese experts said shows that Canada has completely surrendered its self-proclaimed judicial and diplomatic independence to US bullying and foreshadows the "worst-ever" China-Canada ties...

The ruling will make the bilateral relationship "worse than ever," He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times.

Deteriorating bilateral ties will initially be seen in souring trade exchanges, He said. "You can always give some projects or orders to other countries, instead of just one county alone."

Mei Xinyu, an expert close to China's Commerce Ministry, said that Meng will likely stay in Canada for years. "Being kept by the US as a key hostage to contain China's industrial upgrading and maintain its parasitic hegemony, the US will hardly let Meng free."

"Canada has been under US pressure since the beginning, or it could have benefited from the trade war between the world's two largest economies," Mei said.

2020 BCSC 785 United States v. Meng

Today's decision

Poor Michael Spavor and Michael Kovrig, the decision to deny Meng’s request to have the US extradition attempt tossed likely means they will remain in custody.


5. US Congressional report on PRC banks

China’s Banking Sector Risks and Implications for the United States | U.S.- China | Economic and Security Review Commission

Despite four decades of promised liberalization, the Communist Party-state retains the ability to intervene decisively in China’s banking system to achieve desired outcomes. This comprehensive report lays out how China’s banking system has reached an important juncture, as two ongoing and competing constraints have been exacerbated by the current COVID-19 pandemic: (1) Banks of all sizes are under pressure to clean up their balance sheets, raise new capital, and dispose of bad loans; and (2) Beijing is forcing them to boost lending to struggling companies at nonmarket rates to forestall a further slowdown in the pace of economic growth. Further, Beijing’s focus on maintaining stability and control warps market incentives by encouraging investors, creditors, and depositors to evaluate a bank based on its likelihood of receiving government support if there is a risk of insolvency rather than on its individual fundamentals​.

As the COVID-19 fallout grows, exchange rates are the most likely channel through which economic pain could be transmitted to U.S. investors. But a number of other channels, such as the inclusion of Chinese equities into major international indexes, are also raising the exposure of U.S. investors and savers to China’s risky banking system. The report concludes by providing policy considerations for Congress and describes the opportunities and tradeoffs involved in the deepening integration of the U.S. and Chinese financial sectors.

U.S. Congressional Report Warns Investors, Banks of China Risks - Bloomberg

“Ultimately, Congress must decide if the extent of market access on offer is worth the potential risks to U.S. investors,” the U.S.-China Economic and Security Review Commission said in a report on Wednesday to Congress. “It must also evaluate the desirability of greater U.S. participation in a financial market that remains warped by the political priorities of a strategic competitor.”

Question: What might sanctions on PRC financial institutions over Hong Kong look like?


6. India-China border tensions

India won’t allow change of status quo on Line of Actual Control: Officials - india news - Hindustan Times

India won’t allow any alteration of the status quo on the Line of Actual Control (LAC) and the build-up of Chinese troops will be faced with “strength and restraint”, people familiar with developments said on Tuesday against the backdrop of a high-level security meeting chaired by Prime Minister Narendra Modi.

Modi met National Security Adviser Ajit Doval and Chief of Defence Staff Gen Bipin Rawat to assess the situation along the LAC amid a tense standoff between thousands of Indian and Chinese troops, especially Galwan Valley and Pangong Lake in eastern Ladakh.

Indian border infrastructure or Chinese assertiveness? Experts dissect what triggered China border moves | The Indian Express

Ashok Kantha, who was India’s ambassador to China from 2014 to 2016, argues that the Chinese “seem to be in fact physically changing the ground position and preventing our troops from undertaking regular patrolling.”

“There are some major changes from the earlier pattern of what we have witnessed with regard to the Chinese behaviour on the border: one, they have reportedly come in large numbers into a new area (Galwan river valley) which had not been contentious in terms of the alignment of the LAC; two, they are staying put, dug down and in tents and not just as a short-term patrol; three, these incursions are happening in multiple locations; and four, they have become more assertive and aggressive in their behaviour,” he said.

Situation in China-India border area is stable and under control: Chinese FM - Global Times

The overall situation in the China-India border area is stable and under control, and the two countries are capable of resolving border issues through dialogue and negotiations, the Chinese Foreign Ministry said, following reports claiming China had moved 5,000 troops to the China-India border area.

Chinese Foreign Ministry spokesperson Zhao Lijian said at Wednesday's media briefing that China and India have a sound border related mechanism and communication channels.

China-India border: Clashes raise fears of broader confrontation as Beijing pursues sovereignty claims on all fronts - The Washington Post

Analysts said the intrusion in the Galwan valley, if confirmed, represents a break from the past.

“This is seriously uncharted territory,” said Ajai Shukla, an Indian defense analyst and former army officer who has written about the tensions, adding that he could not recall an incident like this in the three decades since India and China established protocols to build confidence at the border. “This is a high-level, coordinated, planned action from the Chinese side.”

India wants LAC status quo maintained, China demands India should stop construction activity - ThePrint

As reported by ThePrint earlier, the Chinese are peeved at a road construction work that India is carrying out from Finger 2 area of Pangong Lake, and a feeder road of the strategic Shyok-DBO road made last year...

While the road is well within Indian territory, India is constructing feeder roads from it to the LAC which would enable faster movement of troops and equipment.

Even though the Chinese have built roads near the LAC, it keeps objecting to India’s construction. “The roads are of strategic importance. For example, there are areas where the Chinese can reach within 15 minutes because of roads on their side while we would take about two and half hours to reach by foot patrol,” a source explained.

Changing balance across LAC trigger for stand-off, says China expert Taylor Fravel - The Hindu

The spark for the current stand-off with China, with the ongoing face-off situations in the Galwan River valley, Pangong Lake and other areas, is the increasing infrastructure competition along the Line of Actual Control (LAC), says M. Taylor Fravel, a leading expert on Chinese military and China’s defence strategy and Arthur and Ruth Sloan Professor of Political Science and Director of the MIT Security Studies Program...

While construction activity near the Galwan River and Pangong Lake lies on the Indian side of the LAC, China is likely responding to what it sees as a challenge to its position. And with a lack of a formal agreement regarding the location of the LAC, future incidents and crises are bound to recur.

LAC standoff | Now, Trump offers to mediate between India and China - The Hindu

U.S. President Donald Trump said on Wednesday that he had offered to help New Delhi and Beijing resolve their ongoing tensions at the Line of Actual Control (LAC). The offer came as a surprise on a day when the Chinese Ministry of Foreign Affairs (MoFA) appeared to soften its line on the stand-off, suggesting the situation was “stable and controllable” now.

“We have informed both India and China that the United States is ready, willing and able to mediate or arbitrate their now raging border dispute. Thank you!,” Mr. Trump tweeted...

His comments also appear to be at variance from the stand taken by senior U.S. State Department official Alice Wells, who had squarely blamed China for the border tensions and called China a “threat” to all its neighbours.


7. Pandemic and Chinese overseas

Stranded overseas, Chinese vent anger on aviation regulator - Reuters

The Civil Aviation Administration of China (CAAC) has been flooded with tens of thousands of social media comments criticising it and the Chinese government for the small number of flight options to bring home the people stranded overseas.

Since March, the CAAC has drastically reduced the number of international flights due to concerns about infections brought in by arriving passengers. Many foreign airlines are currently barred from flying China routes and mainland carriers can fly just one weekly passenger flight on one route to any country.

Besides leaving those abroad with fewer options if they want to return, the scarcity has created a frenzied market for scalpers who are charging exorbitant rates for tickets.

Chinese Nationals Abroad On The Horns Of The Dilemma As COVID-19 Spreads - Pandaily

Chinese nationals in the US indeed took too much blame for the problem, not just by Americans, but by their fellow Chinese as well, when the outbreak began on a large scale overseas. As domestic infection numbers dwindle in China, many Chinese citizens living abroad are looking to return, while travelers from abroad became the major concern of “bringing the virus back” by the public.

Life back home is no easier, though, not just because of the frequent flight transfers and lengthy mandatory isolation. A new storm is raging on social media as China’s angry cyber-nationalists took aim on Chinese study-abroad students as never before...

2020年5月27日外交部发言人赵立坚主持例行记者会

When asked about the Chinese students trapped overseas because China decided to cancel most international flights, foreign ministry spokesperson Zhao Lijian said the Chinese embassies are working tirelessly with the airlines to arrange more charter flights for Chinese citizens.

Coronavirus: wealthy Chinese families say pandemic has eroded appetite for overseas schooling and investing | South China Morning Post

A mix of pandemic-based problems for China’s urban rich, including the sudden uncertainty over future incomes, the health risks of living abroad, and China’s deteriorating image in Western countries, have forced many to reconsider, if not totally give up, plans to send their kids to American or British schools, or to buy property in Canada or Australia.

Global Times: Overseas study affected as English proficiency exams are cancelled amid outbreak

As the COVID-19 epidemic continues, a total of six English proficiency exams scheduled for June have been canceled, which has hit Chinese students' applications for overseas study. The continuous cancellation of such exams and recruitment events along with safety concerns have prevented students from submitting applications to schools in the pandemic-stricken regions, especially the most popular destinations such as the US and the UK.


8. Interview with Chan Koonchung

China Forgets the Coronavirus. A Writer Explores Its Amnesia. - The New York Times

In Chan Koonchung’s 2009 dystopian novel “The Fat Years,” China endures a huge, fictional crisis. Two years later, nobody seems to remember it.

In reality, Mr. Chan realized, it took less than two months for many people in China to leave behind their anger and despair over the coronavirus crisis and the government’s bungled response. Today, they believe China triumphed over the outbreak.

“It’s like nothing had happened,” Mr. Chan said in an interview. “I’m dumbfounded. How could they make a U-turn so fast?”

Comment: Brought me back ten years. Here is an interview Jeremy Goldkorn did with Chan on our Beijing CBD balcony in 2010


Business, Economy and Trade

China releases 11 guidelines to deepen financial reform, further open up credit rating market - Global Times China released guidelines to deepen financial reform and further open up its financial sector on Wednesday, including measures to open up the credit rating sector, and moves to steadily promote the development of the panda bonds market. The guidelines were among 11 measures released on the official website of China's central bank, which will be rolled out soon in an effort to deepen financial reforms and further open up the country's finance market. 金融委办公室发布11条金融改革措施

China’s Sliding Yuan Leaves Offshore Rate on Brink of Record Low - Bloomberg The PBOC set its daily yuan reference rate at the softest level since 2008 this week, which to some analysts signaled tolerance for depreciation. The offshore yuan slid as much as 0.45% against the greenback on Wednesday. It has lost 1.1% in the past month, the biggest drop after Argentina’s peso among 32 major currencies tracked by Bloomberg.

Central Bank Defies Expectations of Policy Rate Cut - Caixin Rebuffing market expectations, China’s central bank has left an interest rate on reverse repurchase agreements unchanged when using the monetary policy tool after a nearly two-month hiatus. The People’s Bank of China (PBOC) injected 130 billion yuan ($18.2 billion) into the money market via seven-day reverse repos on Tuesday (link in Chinese) and Wednesday with a 2.2% interest rate, the same rate as the previous repos on March 31

央视新闻:中央文明办:不将占道经营、流动商贩等列为今年考核内容 The CCP’s Central Commission for Guiding Cultural and Ethical Progress said this year will no longer ask local governments to crackdown on vendors and restaurants who sell on the sidewalk. CCTV said the move is to help small business and to help boost consumption.

China expected to impose coal import restrictions | Financial Times $$ “I think they will more actively promote use of domestic coal, at least through elevated customs checks if not outright action,” said Colin Hamilton, analyst at BMO Capital Markets. “And given current relations, Australian coal is definitely the initial target.”

China's domestically developed C919 jet receives 815 orders: chief designer - ECNS The development of the C919 narrow-body twinjet airliner is progressing as planned and in an orderly manner, said Wu Guanghui, National People's Congress (NPC) deputy and chief designer of the aircraft, on Tuesday. Chinese aerospace manufacturer Commercial Aircraft Corporation of China (COMAC) has to date received 815 orders for the C919 from 28 domestic and foreign airlines.

Volkswagen in final talks to seal biggest M&A deals in China EV sector - sources - Reuters The firm is poised to buy 50% of Anhui Jianghuai Automobile Group Holding, the parent of EV partner JAC Motors (600418.SS), for at least 3.5 billion yuan ($491 million), the people said on condition of anonymity as the matter was private. It is also set to become the biggest shareholder of EV battery maker Guoxuan High-tech Co Ltd (002074.SZ), the people said, adding both deals could be announced as early as Friday.

TikTok Owner’s Profit Said to Hit $3 Billion as Sales Double - Bloomberg TikTok’s parent ByteDance Ltd. generated more than $3 billion of net profit on over $17 billion in revenue last year, figures that show the world’s most valuable startup is still growing at a brisk rate, according to people familiar with the matter.

China Battery Maker Suspended as Short Seller Questions Profits - Bloomberg Tianneng Power International Ltd. fell as much as 8.7% on Wednesday before trading was suspended. CloudyThunder Research, which calls itself a group of unidentified “activist investors,” said the company’s shares were “worth close to zero” in a report published on its website.

German companies flying 200 workers to China in mass return - AP The employees obtained visas under a “fast track” program aimed at helping revive the economy, said Jens Hildebrandt, executive director of the German Chamber of Commerce in China. The chamber organized this week’s flight and a second planned for June 3. “There is huge demand,” Hildebrandt said Tuesday.

Regulators Hone In On Banks’ Latest Innovation — Group Savings - Caixin Some lenders, such as China Construction Bank Corp. (CCB), China Merchants Bank Co. Ltd., Bank of Shanghai Co. Ltd. and Bank of Dongguan Co. Ltd., have rolled out group savings products, where customers can invite friends to join together to get better interest rates. The more participants and the bigger the total pot of money, the higher the interest rate. But this latest innovation in the never-ending battle for customer funds has come under scrutiny from some local regulators who have started asking banks to submit data and information about their group-buying products including savings, wealth management and loans, sources with knowledge of the matter told Caixin.

Times Get Tough for China’s Trust Firms as Looser Monetary Policy Creates More Competition - Caixin Trust companies in China have been having trouble finding new projects to invest in as a deluge of cheaper money in the wake of the coronavirus pandemic has given their clients more options for borrowing money elsewhere.

Politics and Law

China Focus: Chinese lawmakers propose foreign states immunities law - Xinhua The move will protect the legitimate rights and interests of Chinese citizens as well as foreign investors, said Ma Yide, a deputy to the National People's Congress (NPC) and a law researcher at the Beijing Academy of Social Sciences. It will also counteract malicious litigations raised in countries like the United States towards China over the COVID-19 response, Ma told reporters Tuesday on the sidelines of the annual NPC session.

Foreign and Defense Affairs

解放军报评论员:全面加强练兵备战工作 While continuing to battle the pandemic, the PLA is exhorted to prepare for war. At the end of the day, the PLA’s core capability is combat. The PLA must be prepared at all times for any situation. The pandemic has had a tremendous affect on domestic security and development, as well as deep influence on the world’s global structure (circumstances unseen in a hundred years.) The PLA must train in the pandemic circumstances; improve their capability; and be entrusted with the Party and the people’s new era missions and responsibilities.

UK watchdog finds China’s state TV CGTN violated impartiality rules | Safeguard Defenders Ofcom has launched a formal investigation based on a complaint filed by former British journalist and corporate investigator Peter Humphrey for unjust or unfair treatment. The complaint, filed 17 January 2020. is about a segment called Unwrapping the Truth of China’s Christmas Card Mystery which aired on CGTN on 27 December 2019 on a programme called The Point. It concerned a story about a British toddler who had discovered a handwritten note in a Xmas card from a foreign inmate at a prison in Shanghai who wrote he was forced to work against his will. The program peddled lies about Mr. Humphrey and “constituted a serious, one-sided and personal attack which intended to damage his personal and professional reputation.”

Beijing to Crack Down on ‘Problematic’ Maps of China, Again | Sixth Tone Thirteen municipal-level departments in Beijing, including the city’s cyberspace administration, jointly launched the campaign last week, demanding “examination and rectification” of all “problematic maps” by the end of July. According to an official notice, judicial organs may pursue criminal prosecution if maps are deemed to “endanger national unity, sovereignty, and territorial integrity, or jeopardize national security and interests.”

China to enhance coordination with France to back WHO, moblize global resources in COVID-19 fight: FM - Xinhua China is willing to enhance coordination with France to increase political support and funding for the World Health Organization (WHO), jointly mobilize global resources and win the battle against the COVID-19 pandemic, Chinese State Councilor and Foreign Minister Wang Yi said Tuesday. In a telephone conversation with Emmanuel Bonne, diplomatic counselor to French President Emmanuel Macron, Wang said that Hong Kong affairs fall within China's domestic affairs and China appreciates France's cautious attitude toward Hong Kong-related affairs, hoping that France will adhere to an objective and impartial position.

Facing Western public opinion calmly makes China ideologically stronger - Global Times Media reported that the Chinese Embassy in Brazil sent a letter to Brazilian parliamentarians, asking them to avoid gestures that could harm the one-China principle after Taiwan regional leader Tsai Ing-wen's inauguration for a second term on May 20. Is there anything wrong? Of course not. It is China that Brazil has established diplomatic relations with. The two countries are important trade partners and BRICS members (BRICS refers to five major emerging countries, namely, Brazil, Russia, India, China and South Africa). It is the Brazilian parliamentarians' basic obligation not to do anything that would harm China-Brazil ties.

China's giant wind tunnel to accelerate development of warplanes - Global Times Under development for more than eight years, China's latest, world-leading wind tunnel is now ready to help develop new warplanes after reaching a milestone on Tuesday by successfully testing and receiving data for an in-development aircraft. With its help, China will be able to develop new warplanes faster and perform better, experts said on Wednesday.

COVID-19 will not change Italy's Euro-Atlantic position, defense minister says - Atlantic Council Italian magazine Formiche conducted an exclusive interview with Italian Defense Minister Lorenzo Guerini. Below is a transcript of Formiche reporter Francesco Bechis’ conversation with Guerini about the COVID-19 pandemic, Italy’s relationship with the United States, and the transatlantic alliance.

All eyes on China as Africa spurns G20 debt relief plan | South China Morning Post Gyude Moore, a senior policy fellow at the Centre for Global Development think tank in Washington, said the Kenyan example showed that “most African countries will eschew demanding blanket debt waivers and engage private creditors around the suspension of interests payments and restructuring existing debt”. Moore, who previously served as Liberia’s minister of public works, said China preferred to engage on a bilateral basis. “I can’t imagine China changing that outlook now. I expect China to restructure debt with its partners on a case-by-case basis,” he said.

The end of Europe’s Chinese dream | The Strategist - Mark Leonard Since the crisis erupted, the EU has shown more of a willingness to push back against Chinese disinformation campaigns, and has adopted measures to protect distressed European companies from being bought out by Chinese investors. But the most serious moves are yet to come. Europeans will soon start turning the talk of diversification into action. One way or another, the structural changes working through the global order may have eventually produced a new debate about China anyway. But now that Covid-19 has laid bare both Europe’s dependencies and China’s true intentions, a strategic shift is well underway.

Taiwan

Taiwan’s Last Stand in South America - Americas Quarterly In a virtual session on April 17, the Paraguayan Senate took a vote on whether to urge the president to change diplomatic recognition from Taipei to Beijing. The bill’s proponents argued that China could better aid Paraguay’s fight against COVID-19 by providing medical equipment and expertise. Taiwan responded by increasing aid to the country, including some 280,000 masks, and trumpeting its own response to the pandemic. In the end, the Paraguayan Senate voted against the proposal, 25 to 16. But the debate is not definitively over, and pressures on Taiwan’s support within Paraguay are increasing.

Tech and Media

Sequoia, CICC Capital Pour $265M Into BYD Semiconductor – China Money Network Chinese new energy vehicle giant BYD announced yesterday that its wholly-owned subsidiary BYD Semiconductor has introduced strategic investors through capital increase and share expansion. Investors include Sequoia Capital China, CICC Capital, SDIC Venture Capital, Himalaya Capital and other Chinese and foreign investment firms.

Will China's entry into U.S. publishing lead to censorship? - LA Times Earlier this month came rare news in the slow and conglomerate-controlled industry: the announcement of a new New York house, Astra Publishing, which had already poached three A-list editors. Less of a focus in the press was the fact that Astra is the subsidiary of an ambitious, publicly listed book publishing giant based in Beijing.

Kuaishou users don't need to leave the app to buy on JD · TechNode China’s e-commerce platforms and short video apps are working closer while livestream e-commerce is gaining traction. In the tie-up, e-commerce apps have their strengths in brands, supply chain, and after-sales support, whereas video apps have their advantages in rich content and access to potential buyers.

Energy, Environment, Science and Health

Everest Measuring Team Is Using China’s Beidou Satnav - Yicai A Chinese survey team that has reached the summit of Mount Everest is relying on China’s Beidou satellite navigation system to gather data, developer China Aerospace Science and Technology Corporation said today.

China's “most modern” processing ship makes maiden voyage - Seafood Source A subsidiary of Chinese marine engineering firm Shanghai Chong He Industry Group (also known as Chong He Marine Heavy Industries Co) – which specializes in “niche” marine equipment such as underwater mining and wind power installation facilities – has launched what it claims is the world’s largest purpose-built vessel for fishing Antarctic krill. The ship was designed by Wärtsilä Ship Design Company, which in March was commissioned to design a second –even bigger – krill processing vessel for Chong He Marine.