US shuts a PRC consulate; More on Xi's meeting with executives; Xi in Jilin

The newsletter will not be published tomorrow, Thursday July 23, as I will be attending a virtual conference.

In case there were still readers who thought US-China relations could not get worse, they worsened overnight. The US has ordered the closure of the PRC’s consulate in Houston, Texas.

When word starting going around last night about the closure I had several conversations with people who believed it was a ploy by the US State Department to force the PRC to relax the COVIDF-19-related rules for US diplomats returning to China, and that the Chinese would back down as they did a few weeks ago when the US announced restrictions on PRC flights to the US in response to PRC restrictions on American carriers flying to China.

From various reports today it sounds like the US move is related to espionage and IP theft activity, and it seems unlikely there could be a deal to keep it open past the Friday deadline. I hope I am wrong.

The official Chinese reactions are of course quite angry, and they have pointed out that the US has far more diplomats authorized to work in the PRC than the PRC has for the US. There is speculation that the Chinese government may close a US consulate in response, perhaps the one in Wuhan, but I would not rule out a bigger move to align the number of diplomats. Again, I hope I am wrong and that Xi continues with the relative restraint he has shown over the last couple of months in reaction to US measures.

Tomorrow US Secretary of State Pompeo gives a speech on “Communist China and the future of the free world” at the Richard Nixon Presidential Library. The contents have not yet leaked, expect it to be very heavy on tough rhetoric at a minimum.

As I wrote a few weeks ago, I think we are seeing the “blame China” Trump re-election stream merging with the “get tough on China” national security stream that has been present throughout the Trump Presidency but sometimes held in check. And the Trump national security team knows may not have that much time left, they have lots they want to get done with regards to China, and they may want to make as many things as possible very hard to reverse under a possible Biden administration. Plan accordingly…

Today’s Essential Eight:

  1. The closure of the Houston consulate

  2. More US-China

  3. More on Xi's meeting with executives

  4. Xi on Jilin inspection tour

  5. Hong Kong

  6. Taiwan

  7. Illegal Chinese fishing and North Korea’s ghost boats

  8. Tech giants growing their loan books

The newsletter will not be published tomorrow, Thursday July 23, as I will be attending a virtual conference.

Thanks for reading.


The Essential Eight

1. The closure of the Houston consulate

U.S. Orders China to Close Houston Consulate Over Espionage and Theft - The New York Times

The People’s Liberation Army “has been sending students both overtly and otherwise to American universities to study things to advance their own warfare advantages in the economic world and the rest,” David R. Stilwell, assistant secretary for East Asia and the Pacific, said in an interview Wednesday morning. “We took a practical step to prevent them from doing that.”

“At the epicenter of all these activities facilitated by the P.R.C. mission is this consulate in Houston,” he added, referring to the People’s Republic of China. “It has a history of engaging in subversive behavior.”

Mr. Stilwell declined to give details of all the incidents related to the consulate. But he said the Houston consul general, the top Chinese official in that mission, and two other diplomats were caught recently engaging in questionable activity past the security check area in George Bush Intercontinental Airport. It occurred, he said, as Chinese citizens were awaiting the takeoff of a charter flight to China that the Chinese government had arranged because of air travel restrictions during the pandemic. The diplomats were escorting certain travelers to the gate area, and Air China had paperwork with false birth dates for the diplomats, he added.

U.S. Orders China to Close Houston Consulate - WSJ $$

U.S. officials have become increasingly concerned in recent years about Beijing’s use of its Washington embassy and the five consulates it maintains around the country to further espionage and political influence operations, according to people familiar with the matter. The consulate in Houston has drawn particular scrutiny.

Statement of the Chinese Embassy in the United States — Embassy of the People's Republic of China in the United States of America

As for reciprocity, China has been providing facilitation for US diplomatic missions and personnel pursuant to the Vienna Convention on Diplomatic Relations and the Vienna Convention on Consular Relations. In contrast, the US imposed unjustified restrictions on Chinese diplomatic personnel last October and in June, unscrupulously and repeatedly opened China's diplomatic pouches and seized China's official goods. Because of the willful and reckless stigmatization and fanning up of hatred by the US side, the Chinese Embassy in the US has received threats to the safety and security of Chinese diplomatic missions and personnel more than once.

At the same time, the US side has more diplomatic and consular missions and personnel in China than China has in the US, another area where the principle of reciprocity is not reflected. The move of the US side will only backfire on itself.

We urge the US side to immediately revoke this erroneous decision. Otherwise, China will have to respond with legitimate and necessary actions.

China strongly condemns unreasonable U.S. request to close Chinese Consulate General in Houston - Xinhua

"China urges the U.S. side to immediately revoke the wrong decision, or China will definitely make legitimate and necessary reactions," said Wang.

For a period of time, the U.S. government has repeatedly shifted blame to the Chinese side, stigmatized and attacked China, made unprovoked attacks on China's social system, and deliberately put obstacles in the way of Chinese diplomatic and consular staff in the United States. In the meantime, the U.S. side has also intimidated, interrogated Chinese students studying in the United States, confiscated their personal electronic devices, and even detained them for no reason, noted Wang.

"The unilateral closure of China's Consulate General in Houston within a short period of time is an unprecedented escalation of its recent actions against China," said Wang...

Wang said the U.S. side claims that there is no reciprocity in the U.S.-China relations, but this is just an old and meaningless excuse of the United States. He stressed that "in fact, in terms of the number of diplomatic and consular missions in each other's country and the number of diplomatic and consular personnel, the U.S. side far exceeds China."

Comment: How many PRC diplomats are authorized to be in the US vs US diplomats authorized to be in the PRC? I believe the US has many more, one possible Beijing response would be to harmonize the numbers, and Wang Wenbin's mention of this issue is noteworthy...reciprocity...

"America's Gone Insane" - Chinese Consulate in Houston Ordered to Close | What's on Weibo

The US-ordered closure of the Chinese consulate in Houston has become a top trending news topic on Chinese social media platform Sina Weibo today, with the “Houston Consulate” (#休斯敦领事馆#) hashtag receiving over 230 million views on Wednesday night, Beijing time.

One hashtag page, hosted by People’s Daily, repeats the words of China’s new Ministry of Foreign Affairs spokesperson Wang Wenbin (汪文斌), who stated that “America’s abrupt request to close the Chinese consulate in Houston on July 21st” is a “political provocation unilaterally initiated by the American side that seriously violates the international law and goes against the basic norms of international relations.”


2. More US-China

Trump accelerates China punishments in time for reelection - POLITICO

“Politics sets the stage for people who want to really take a harder line on policy, particularly because the president isn’t looking for any deals with Xi Jinping right now and he is extremely angry about Covid-19,” said Dan Blumenthal, the director of Asian studies at the conservative American Enterprise Institute think tank.

“A lot of policies China hawks have been advocating for a while are now finally being enacted,” Blumenthal added, “from the administration going after Huawei to frustration with certain U.S. companies in terms of perceived coziness, and the position on the South China Seas is a long time coming.”

US investors try to buy TikTok from Chinese owner | Financial Times $$

The investors, led by the venture capital firms General Atlantic and Sequoia Capital, are in discussions with the US Treasury and other regulators to see if spinning out TikTok and firewalling it from its Chinese parent would satisfy US concerns about the app, according to two people involved in the process...

One of the people involved in the potential bid acknowledged that Cfius was a growing risk for the company. “Originally when we sat down with them, there was talk of just a lot of restrictions,” said the investor. “But after India shut down TikTok, the discussion completely metastasised.” Discussions with Cfius started a few weeks ago in what is expected to be a 90-day process. 

Rail lobbyists seek tough U.S. sanctions for China's CRRC - Reuters

A railway lobbying group is calling on the Trump administration to use its most powerful sanctioning tool against China’s CRRC after the Pentagon announced the world’s largest maker of passenger trains was backed by the Chinese military.

In a letter sent on Tuesday, the Rail Security Alliance urged U.S. Treasury Secretary Steve Mnuchin to invoke the International Emergency Economic Powers Act (IEEPA) against the company, which has clinched key passenger rail contracts in Boston, Philadelphia, Chicago and Los Angeles by underbidding rivals.

China Announces New Round of Charter Flights to Bring Students Home From U.S. - Caixin

The chartered flights will only be available to students and visiting scholars on F-1, J-1 and M visas whose student status has expired or is about to expire. Teachers and volunteers who have finished their terms at Confucius Institute in the U.S. also qualify to apply for a place on the flights.

Vice Foreign Minister Luo Zhaohui Attends the Association of Southeast Asian Nations (ASEAN) Plus Three (China, Japan and the Republic of Korea) Senior Officials' Meeting (APT SOM)

On July 20, 2020, the Association of Southeast Asian Nations (ASEAN) Plus Three (China, Japan and the Republic of Korea) Senior Officials' Meeting (APT SOM) was held via video link. Vice Foreign Minister Luo Zhaohui attended the meeting.

Luo Zhaohui said, there are two major features of the situation in East Asia in the first half of the year. One is that APT countries have scored achievements in fighting the COVID-19 and recovering economy. The other is that the United States (US) continues to adjust its foreign policies, breach its international commitments and obligations and withdraw from organizations and treaties, in an attempt to comprehensively curb China's development.

“政委”金灿荣:这是中美建交后从未发生过的事件!

Jin Canrong of Renmin University said closing the consulate is an unprecedented escalation and that may have to do with the US elections and the hostility toward China held by some individuals in the Trump administration. Jin said China does not want a cold war with the United States but Beijing will have to respond in kind. He said whether things will further escalate depends on what else US will do, and that Beijing should be prepared for the worst – military conflicts with the US.

中美未来还会出现怎样的情况?金灿荣说:“现在就看美国的反应了。因为这个事儿不是我们挑起的,是美国挑起的,如果我们进行了反制,美国没有后续工作,那么这个事儿就告一段落了。如果美国继续有后续工作,两国关系会继续恶化,(有可能)走向‘新冷战’。” 但他同时表示,至于最后会发展到何种地步,现在还不清楚,只能说各方都没有这个想法,我们不想搞“新冷战”,也会尽最大努力避免;而美国国内,也不是所有人都同意特朗普政府的做法,只是特朗普政府中的确存在一些决策者,想把中美关系推到“新冷战”的程度,甚至不排除他们在某些地区进行军事冒险、出现局部军事冲突的可能性。“对此我们不能抱有幻想,要做好全面、充分的准备。”

观网总编辑金仲伟:国家间的竞争应该是理性的,但今日美国令人担心

Jin Zhongwei, the editor-in-chief of Guancha, gave a speech earlier this month criticizing the Trump administration and the US media for demonizing China, and that Guancha’s reporting is doing a great job countering that. He said there is a great variety of opinions and news sources on internet, and it makes the US monopoly on narrative impossible.

Comment: Eric X, Li-funded Guancha is a media outlet that should have more attention paid to it. It has a decent following on Youtube as well

Secretary Pompeo’s Meeting with Danish Prime Minister Frederiksen - United States Department of State

Secretary Pompeo and Prime Minister Frederiksen discussed‎ our joint efforts to combat COVID-19 and coordinate on pandemic recovery, the People’s Republic of China, Arctic cooperation, European energy security, and other matters of mutual concern

Secretary Michael R. Pompeo at a Press Availability with Danish Foreign Minister Jeppe Kofod - United States Department of State

Foreign Minister Kofod: We also discussed China and Hong Kong.  The EU has characterized China as a necessary negotiating partner on issues such as climate, but also an economic competitor and a systemic rival.  Following last week’s Foreign Affairs Council, an EU (inaudible) paper regarding Hong Kong is now being drafted, a decision Denmark fully supports.  Both EU-27 and I have publicly and repeatedly stated our deep concern.  It is clear that Europe needs a common, coordinated, and a strong position on China.

Mike Pompeo claims China 'bought' WHO chief - The Telegraph

The head of the World Health Organisation was “bought” by China, the US Secretary of State has alleged, as he claimed that the body’s failings had contributed to “dead Britons”.

Mike Pompeo made the allegations at a private meeting of MPs in London on Tuesday that Dr Tedros Adhanom Ghebreyesus, the organisation’s director-general, had struck a deal with China that helped him secure election.

Mr Pompeo said that “when push came to shove, when it really mattered most”, people had died “because of the deal that was made”.

FM urges US to tell truth over Fort Detrick, refuting Wuhan biolab conspiracy theory - Global Times

The Chinese Ministry of Foreign Affairs urged the US to tell the international community the truth about an infectious disease research lab under the US Army, while refuting the conspiracy theory over the Wuhan biology laboratory, after a US cable triggered rumors that the COVID-19 pandemic may have started from the Wuhan lab.

提醒在美中国留学人员加强安全防范

The foreign ministry consulate department issued a statement urging Chinese students studying in America to be aware of the increasing number of cases of US law enforcements arbitrarily harassing, interrogating the Chinese students and confiscating their belongs.

纳瓦罗关于新冠肺炎疫情的涉华谎言与事实真相

half of page 3 with a jump to all of page 16 of the Wednesday People's Daily- Navarro's China-Related Lies and Facts About the New Coronavirus Pneumonia Epidemic. Seems remarkable that People’s Daily devoted 1.5 pages to Navarro. I wonder if he will ask for a copy of the paper to frame it?

独家:中国驻美使馆7月20日遭炸弹威胁电话骚扰_澎湃国际_澎湃新闻-The Paper

7月22日,澎湃新闻(www.thepaper.cn)从权威人士处独家获悉,美国东部时间7月20日,中国驻美国大使馆签证处连续接到来自一个未知号码的骚扰电话。来电人为男性,说英文,他反复拨打并在工作人员接听后挂断电话。最后一次电话接通后,对方开口询问:“是不是中国大使馆签证办公室?”(Chinese Embassy Visa Office?)在得到肯定答复后,他说道,“你知道你们大厅里有什么吗?”(Do You Know What’s in Your Lobby?)随后,该男子模仿了一声爆炸的声音,挂断了电话。

Thepaper reports that the Visa office of the PRC embassy in DC got a bomb threat on July 20, and since March has been receiving threatening correspondence


3. More on Xi's meeting with executives

Xi Focus: Xi urges efforts to spur vitality of market entities, promote entrepreneurship - Xinhua

Chinese President Xi Jinping on Tuesday urged efforts to spur the vitality of market entities and promote entrepreneurship, as he chaired a symposium with entrepreneurs...

At the meeting, seven entrepreneurs shared their opinions and made suggestions on the current economic situation, the protection of market entities, sci-tech innovation, deepening reform and the 14th five-year plan. Xi interacted with them and made an important speech afterward...

In the face of an external environment characterized by rising protectionism, global economic downturn, and a shrinking international market, Xi stressed the need to pool resources and concentrate on managing the country's affairs well, and give full play to the advantage of a huge domestic market, so that a new development pattern will gradually be created whereby domestic and foreign markets can boost each other, with the domestic market as the mainstay.

Efforts should be made to elevate the modernization level of the industrial and supply chains, promote sci-tech innovation, speed up breakthroughs in core technologies, and foster new advantages for future development...

"We shall stand on the correct side of history, stick to deepening reforms and opening up, step up opening up and cooperation in the sci-tech field, advance the development of an open world economy, and promote the building of a community with a shared future for mankind," he noted.

Xi instructed relevant departments to take into account the opinions and suggestions of entrepreneurs in making the 14th five-year plan.

Comment: So Xinhua translates 我们要逐步形成以国内大循环为主体、国内国际双循环相互促进的新发展格局 as "a new development pattern will gradually be created whereby domestic and foreign markets can boost each other, with the domestic market as the mainstay"

According to this article from Guangming Daily the phrase about the “the domestic market as the mainstay” was first used by Xi on May 14 at a Standing Committee meeting “双循环”相互促进,高质量发展可期--法制网

2020年5月14日,中共中央政治局常委会会议首次提出“构建国内国际双循环相互促进的新发展格局”。今年两会期间,习近平总书记再次强调要“逐步形成以国内大循环为主体、国内国际双循环相互促进的新发展格局”。构建基于“双循环”的新发展格局是党中央在国内外环境发生显著变化的大背景下,推动我国开放型经济向更高层次发展的重大战略部署。

Xi Jinping rallies China’s tech champions as rivalry with US intensifies | South China Morning Post

Among the 25 business leaders at the conference, more than half were emerging industry leaders in the fields of chip making, artificial intelligence and smart manufacturing...

Among the representatives from China’s hi-tech world were Zhou Zixue, the chairman of Semiconductor Manufacturing International Corporation (SMIC), which Beijing hopes will help cut the country’s reliance on imported semiconductors.

He was joined by Chen Tianshi, the chairman of Cambricon Technologies, China’s leading developer of artificial intelligence chips; Yin Zhiyao, the chairman of Advanced Micro-Fabrication Equipment, which produces equipment to make microchips; and leaders from hi-tech firms including Guide Infrared and Goertek.

内含深意!大变局中,总书记为何要找他们谈心鼓劲?-中国长安网

Cao Lei, a financial news blogger, posted the list of execs who attended the meeting:

Question: What does it say about Xi's vision of opening the economy if the multinationals that attended the symposium Xi chaired for business leaders Monday were told when invited that they could only send ethnic Chinese executives?

Xi Focus-Quotable Quotes: Xi Jinping on spurring business vitality - Xinhua

-- A cordial and upright relationship between government and business should be fostered.

-- Great attention should be paid to the development of individually owned businesses, with more direct and effective policy support to actively help them overcome difficulties concerning rents, fees, taxes, social insurance and financing.

-- Entrepreneurs should improve their ability to stay on top of the trends and demand in the international market, to grasp international rules, to tap business opportunities and guard against risks in the international market so that their businesses will achieve better development with a higher level of opening up.


4. Xi on Jilin inspection tour

So far just snippets in official media

President Xi Jinping inspects NE China's Jilin Province - CGTN

In Lishu County in Siping City, Xi visited a demonstration zone of green food raw material production base and a farmers' cooperative. He learned about the situation of food production, the protection and utilization of black soil, and large-scale operation of agricultural mechanization.

Xi later visited the Siping Battle Memorial Hall, where he relived the history of the revolution and cherished the memory of revolutionary martyrs.


5. Hong Kong

HK opposition camp accused of putting politics above public health - China Daily

Former head of Hong Kong's legislature Rita Fan Hsu Lai-tai has slammed opposition parties for placing politics before public health by holding crowded events despite the COVID-19 pandemic.

Fan, speaking on Tuesday, said the opposition held public activities including regular anti-government assemblies in early July and so-called primary polls on July 11 and 12, days before the third wave of the outbreak struck the city...

Earlier, Hong Kong Senior Counsel Ronny Tong Ka-wah, and members of the Executive Council of the Chief Executive Carrie Lam Cheng Yuet-ngor, suggested the government invoke the Emergency Regulations Ordinance or the Prevention and Control of Disease (Requirement and Directions) Regulation to delay the election for a maximum of three months. Some other experts suggested that if the election were to be delayed, the government should consider forming a provisional legislature to avoid a vacuum.

Officials fail to quell Hong Kong financiers' security law worries - Nikkei Asian Review

Financial Secretary Paul Chan and Securities and Futures Commission Chief Executive Ashley Alder each issued statements to the financial community over the weekend to address concerns institutions had raised with them about inadvertently violating the national security law, or NSL, in the course of their operations.

"What the SFC fails to address is that the new security law is all-encompassing and if authorities want to use it say against a financial institution or executive, the SFC can't stop it," said a senior markets executive at a global bank in Hong Kong.

"We are not letting our guard down after this note from the SFC," the executive said. "The markets team has been instructed to exercise caution when communicating with clients and has been asked not to comment directly on the law. Any opinions, including research recommendations, go through an increased round of checks from compliance teams, including keyword searches, before they are issued."

HSBC calls Joshua Wong to enquire about source of bank transfer; Wong replies 'royalty income' | Stand News | 立場新聞

Pro-democracy activist Joshua Wong Chi-fung on Wednesday (July 22) revealed on a Facebook post that he received a phone call last week from HSBC which enquired him about the source of a five-digit bank transfer to his account, citing a concern over its client’s asset management, before Wong speculated the bank’s enquiry could be out of “white terror” under Hong Kong’s national security law and raised suspicion that the move carries political intent.

Hong Kong Police Force names National Security director - CGTN

Hong Kong Police Force has officially named Choi Chin-pang as the Director of National Security.

Prior to his new title, Choi worked as the Assistant Commissioner of Police, Operations for the Hong Kong Police Force.

Britain unveils details of citizenship offer for Hongkongers with BN(O) passports | South China Morning Post

Hongkongers with British National (Overseas) passports will be exempted from income tests during their five-year stay in Britain before they can apply for full citizenship, the Home Office said as it unveiled details of a historic policy change on Wednesday.

From January, an estimated 2.9 million eligible Hongkongers will be able to apply to resettle in Britain, together with their dependents, including their children, and even other adult dependents in “compelling” and “exceptional” circumstances.

Proposal to grant Hongkongers political asylum in US left out of defence bill | South China Morning Post

A bipartisan proposal to grant Hongkongers political asylum in the US was left out of a national defence bill that cleared the US House of Representatives on Tuesday, a setback but not necessarily a final defeat for the plan’s supporters amid rapidly worsening tensions with China.

Taiwan rejects Hong Kong officials visas as tensions over Beijing's security law escalate

Taiwan’s China policy Mainland Affairs Council declined to confirm the visa rejections, but said Taiwan needed to react accordingly to "defend the nation’s dignity" based on equal and bilateral considerations, following "unreasonable limitations" set by the Hong Kong authorities.

The acting chief of Taiwan's de facto consulate in Hong Kong returned to Taiwan on Thursday after refusing to sign a document supporting Beijing's claim on the island under its "one China" policy as a condition for his visa renewal.


6. Taiwan

Hong Kong national security law: Taiwan’s foreign minister urges countries to speak out against Beijing | South China Morning Post

Speaking to overseas media representatives, Foreign Minister Joseph Wu expressed his concern at the increasingly hostile behaviour of the mainland Chinese military, which he said had been conducting frequent war games, and air and naval patrols close to Taiwan.

After Beijing’s actions in Hong Kong, he said he feared the democratic island might become the mainland’s next target.

“As China is eager to expand its communist ideology and authoritarian international order, Taiwan is on the front line of defending freedom and democracy,” Wu said.

Taiwan’s parliament passes proposal to rebrand China Airlines | South China Morning Post

The self-ruled island has sent medical aid overseas as a diplomatic gesture of goodwill, often aboard China Airlines aircraft, sparking some confusion over where the shipments had come from.

On Wednesday, lawmakers approved a proposal asking the transport ministry to come up with both short- and long-term rebranding plans for the carrier, which is partly government-owned.

Combatting and Defeating Chinese Propaganda and Disinformation: A Case Study of Taiwan’s 2020 Elections | Belfer Center for Science and International Affairs

Using Taiwan’s most recent elections as an example to elucidate the nature of Chinese propaganda and disinformation, this report identifies China’s motives, tactics, and actors in its foreign information warfare. Similar to Russia’s, China’s motives are to destabilize democracy and weaken governance in a target country by sowing doubts and chaos in its society, undermining its self-confidence, and increasing polarization and disunity. Its tactics include the following: 1) worsen existing social, political, economic, and generational divides; 2) exploit weaknesses in the informational system; 3) financially control and absorb traditional media; 4) employ its cyber army; 5) obfuscate the attack source through technological, commercial, and legal means; and 6) make the attacks partisan so that one side will at worst not condemn it and at best magnify the effects of its attacks. Its actors are the Chinese Cyberspace Administration, Central Propaganda Department, United Front Department, People’s Liberation Army Strategic Support Force, State Council’s Taiwan Affairs Office, 50-Cent Party (cyber army) and its content farms, and provinces, as well as agents from the target country employed by the Chinese government.

Time To Step Up Support For Taiwan | by Nikki Haley | Jul, 2020 | Medium

There are a few strong steps that America can take. One of the most obvious is selling more hi-tech military equipment to Taiwan. Rep. Mike Gallagher (R-WI) has introduced a worthwhile bill, the Taiwan Defense Act, that would help ensure America is providing the necessary support to Taiwan. It’s also time for U.S. leaders to publicly recommit to our promise to defend Taiwan. This week Rep. Ted Yoho (R-FL) will introduce a bill authorizing the United States to respond with force and protect Taiwan if China were to attack.


7. Illegal Chinese fishing and North Korea’s ghost boats

The deadly secret of China’s illegal fishing armada: It’s killing impoverished North Korean squid fishermen-NBC News

The battered wooden “ghost boats” drift through the Sea of Japan for months, their only cargo the corpses of starved North Korean fishermen whose bodies have been reduced to skeletons. Last year more than 150 of these macabre vessels washed ashore in Japan, and there have been more than 500 in the past five years.

For years the grisly phenomenon mystified Japanese police, whose best guess was that climate change pushed the squid population farther from North Korea, driving the country’s desperate fishermen dangerous distances from shore, where they become stranded and die from exposure.

But an NBC News investigation, based on new satellite data, has revealed what marine researchers now say is a more likely explanation: China is sending a previously invisible armada of industrial boats to illegally fish in North Korean waters, violently displacing smaller North Korean boats and spearheading a decline in once-abundant squid stocks of more than 70 percent.

Report Exposes Rampant Illegal Fishing in North Korean Waters - Global Fishing Watch

“The scale of the fleet involved in this illegal fishing is about one-third the size of China’s entire distant water fishing fleet. It is the largest known case of illegal fishing perpetrated by vessels originating from one country operating in another nation’s waters,” said Jaeyoon Park, senior data scientist at Global Fishing Watch and co-lead author of the study. “By synthesizing data from multiple satellite sensors, we created an unprecedented, robust picture of fishing activity in a notoriously opaque region.”

Illuminating dark fishing fleets in North Korea | Science Advances

Illegal, unreported, and unregulated fishing threatens resource sustainability and equity. A major challenge with such activity is that most fishing vessels do not broadcast their positions and are “dark” in public monitoring systems. Combining four satellite technologies, we identify widespread illegal fishing by dark fleets in the waters between the Koreas, Japan, and Russia. We find >900 vessels of Chinese origin in 2017 and >700 in 2018 fished illegally in North Korean waters, catching an estimated amount of Todarodes pacificus approximating that of Japan and South Korea combined (>164,000 metric tons worth >$440 million). We further find ~3000 small-scale North Korean vessels fished, mostly illegally, in Russian waters. These results can inform independent oversight of transboundary fisheries and foreshadow a new era in satellite monitoring of fisheries.


8. Tech giants growing their loan books

In Depth: Want a Loan? Forget the Bank, China’s Tech Giants Are at Your Service - Caixin

Regulators have been happy to encourage the development of online financial services by these well-known tech companies to help drive the government’s policy of inclusive finance. This initiative, which began in 2005, involves providing universal access to financial services such as savings, payments, credit and insurance at low cost to those largely cut off from formal financing channels such as small businesses, the agriculture sector, rural residents, and low-income households. In 2015, the government designated expanding such services to those known as the “underbanked” as a national strategy.

“Internet loans not only help banks to enhance the level of financial science and technology, promote their transformation and development, but are also better and more convenient to meet the reasonable consumption needs of residents and support the development of real economy,” the China Banking and Insurance Regulatory Commission said in a statement on Friday. “As an important supplement to traditional offline loans, Internet loans can serve customer groups that are difficult to reach through traditional financial channels, and its inclusive financial characteristics are more prominent.”..

Tech companies who want to use their own internal funds for consumer lending need a license from the Financial Regulatory Bureau in the city or province where they are headquartered. Bytedance Ltd., the owner of Chinese short-video app Douyin, which has more than 400 million daily active users, has been unable to secure any financial service licenses. Instead, it has resorted to selling advertising space to financial companies on its popular news aggregator app Toutiao. Pinduoduo Inc., a Groupon-like e-commerce platform focused on selling low-cost goods, is still looking to obtain a license to carry out microlending, a source familiar with the matter told Caixin.

The CBIRC statement - 中国银行保险监督管理委员会


Business, Economy and Trade

China central bank to pause easing as economy recovers, wary of over-stimulus: sources - Reuters China’s central bank does not see an immediate need to ease monetary policy further, but will keep conditions accommodative to support a recovery in the world’s second-largest economy, four policy sources told Reuters.

Premier Li urges efforts to strengthen development of new urbanization - Xinhua Li made the remarks while presiding over an executive meeting of the State Council. The meeting worked out supportive measures for flexible employment through multiple channels in a bid to boost employment and increase the income of residents. Promoting a new kind of urbanization that puts people first is where the greatest potential of domestic demand lies, and it will help keep the fundamentals of the economy stable, the meeting said. // Comment: So Li is bringing back "urbanization"? Didi't he push the hard at the start and then stopped talking about it for a while?

China boosts employment with major cut in social insurance contributions - Xinhua Nie Mingjun, a ministry official in charge of pension fund, said the total premium reduction is expected to reach 1.9 trillion yuan in 2020. "The cut will be unprecedented in scale," Nie said. "It will be instrumental in helping enterprises rise above difficulties and ensuring further stability and expansion of employment."

最新财新周刊:A股资金来自哪里?_财新周刊频道_财新网 Caixin has a long story about how it is still unclear who the behind-the-scene investors are who are pushing up stock prices in the past month. It appears there is lots of money with shady origins flooding into the stock market.

Cisco awaits regulatory approval from China on Acacia takeover deal - Reuters Network gear maker Cisco Systems Inc (CSCO.O) and Acacia Communications Inc (ACIA.O) said on Wednesday China was yet to approve their proposed acquisition deal, already cleared by the United States, Germany and Austria.

China's Lufax seeks U.S. IPO as early as this year: sources - Reuters The Shanghai-based company has enlisted Bank of America, Goldman Sachs, HSBC, JP Morgan and UBS to work on the offering, according to three of the people, who declined to be named due to confidentiality constraints. The banks declined to comment.

国家发改委党组谈如何加强党的领导 On an article in the latest qiushi by the party committee of the NDRC on "Maintaining and strengthening the Party's centralized and unified leadership of development and reform work"

独家|央行下发区块链金融应用评估规则 含性能、安全等方面_金融频道_财新网 Caixin reported that China’s central bank has issued a guideline for banks and other financial institutes to assess the security risk of blockchain applications

Chinese Anti-Monopoly Regulator Unconditionally Approves First Merger Control Filing Involving Variable Interest Entity (“VIE”) Structures | Morrison & Foerster having now not only accepted but unconditionally approved an AML Filing involving a party that has adopted the VIE structure, it is even more likely that SAMR will step up its enforcement actions and expect transactions involving parties with VIE structures to more proactively assess their situations and make AML Filings if required.  Market participants should refresh the advice they previously obtained on AML Filings with respect to transactions involving parties with VIE structures to confirm whether the “no filing strategy” that up until now has been widely adopted is still the best strategy.

Politics and Law

[视频]赵乐际在江苏调研时强调 跟进监督 创新监督 持续推动“六稳”“六保”落实落地_CCTV CCDI head Zhao Leji visited Jiangsu. He visited some state-owned companies and some local disciplinary supervision offices, urging officials to continue do well in fighting and deterring corruption. He laso paid his respects at the Zhou Enlai memorial Hall,// Why Jiangsu? Meng Jianzhu?

Western media 'malicious' to hype prisoner transfers in Xinjiang - Global Times It is normal juridical activities for local authorities to transfer prisoners, Northwest China's Xinjiang Uygur Autonomous Region said in an exclusive response to the Global Times, commenting on a video clip that has been spreading on overseas social media, which was hyped by Western media as "evidence" of "repression" of Uygurs in the region.

青海省人民检察院副检察长贾小刚接受审查调查—中央纪委国家监委网站 deputy party secretary of the Qinghai people's procuratorate is under investigation

最高检:2018至2019年受理各级监委移送职务犯罪40326人-中新网 China’s Supreme People's Procuratorate said in a press conference on Tuesday that more than 28 thousand officials were prosecuted for criminal charges in 2018 and 2019. More than 80% of the cases were about corruption, the rest about abusing power and dereliction of duty. It added that 48 minister-level and above officials have been prosecuted in the past two years.

大力弘扬爱国主义精神 凝聚新时代爱国奋斗强大力量(推进新时代公民道德建设) Zhang Fuhai, propaganda chief of Guangdong province, wrote on page 11 of People’s Daily that, as instructed by Xi Jinping, the Guandong government is doing more to promote “patriotism education” among the cadres, university students, Hong Kongers, and the general Chinese public. 发挥地缘优势,增进爱国认同。文化认同、国家认同是新时代爱国主义教育的底线。我们以爱国为核心,以文化为纽带,以维护祖国统一和民族团结为着力点,发挥地缘相近、方言相同、文化相通的优势,积极探索文化认同、国家认同教育策略,实施人文湾区纽带工程,大力推进粤港澳大湾区文化圈建设。创设文化认同、国家认同的空间和平台,加强“一国两制”实践教育,实施粤港澳青少年连根计划,高质量开展粤港澳青少年文化交流活动,推动大湾区青年志愿服务合作,建立粤港澳青年创意产业园,支持港澳青年来粤创业,融入国家发展大局,在共享大湾区发展成果中增强爱国情怀和国家认同。

Demand Chinese authorities release Yang Hengjun - Amnesty International Australia For over a year the authorities have denied him access to lawyers, and to his family. Since December 2019, no one has seen or heard from Yang. There are grave concerns that he is at risk of torture and other ill-treatment.

Zhejiang University Slammed for Sparing Student Convicted of Rape - SixthTone The student from Zhejiang University, surnamed Nu, had received an 18-month suspended sentence in April for raping an intoxicated woman, according to the media report. A Hangzhou court is said to have given the “lenient sentence” because Nu stopped during the act for fear of punishment, and later turned himself in to the police. Following the court’s verdict, Zhejiang University in June put the student on probation for 12 months, according to The Paper.

RFA commentary by Liang Jing 【梁京評論】美國鷹派逼習近平下台的政治邏輯 為了避免這種遺憾,特朗普的鷹派重臣們正在下一盤大棋。他們知道,由於在疫情問題和香港問題的重大錯誤,習近平正處在他上台以來最危險的困境之中,美國有原來不敢想的機會,那就是逼習近平下台,徹底改變美國與中國對抗的形勢。我認為特朗普政府最近出手的打擊北京的各種招數,都是為這樣一個重要的戰略目標服務的。這一套打擊中共,尤其是打擊習近平的舉措,尤其是相關的立法和行政令,能不能幫特朗普連任,其實很難預料,甚至對這些鷹派們來說也並不那麼重要。因為他們知道,這一系列舉措將把他們對中共的認知,結晶為難以廢除的政策和法令。即使在大選前還不能達到逼習近平下台的目標,即使特朗普沒有能勝選,這些鷹派們也造成了一個新一屆美國政府難以逆轉的態勢。//Translated here by David Kelly: Trump's hawkish ministers are playing a big game. They know that due to his major mistakes in the epidemic and the Hong Kong issues, Xi is in his most dangerous predicament since taking office. The US has a chance that it dared not imagine: to force Xi to step down, completely changing the confrontation between the US and China. The Trump administration's various tactics against Beijing recently serve, I think, this important strategic goal. It’s hard to say whether these measures against the CCP, especially Xi, and the related legislative and executive orders above all, will get Trump re-elected. It’s not all that important to these hawks: they know these measures will crystallise their grasp of the CCP into policies and laws that will be hard to rescind. Even if Xi Jinping cannot be forced to step down before the election, even should Trump fail to win it, the hawks will have created a situation that the new government will have trouble reversing. //Comment: This is interesting speculation that jibes in part with what I have heard. However, how vulnerable may Xi really be?

Foreign and Defense Affairs

Xi calls for new achievements in China-Saudi Arabia ties - Xinhua In a recent exchange of congratulatory messages on the occasion of the 30th anniversary of China-Saudi Arabia diplomatic ties, Xi noted that over the past 30 years bilateral relations have seen steady development, with cooperation bearing rich fruits in various fields. Particularly, the relationship has been advancing on the fast track in recent years since the two countries forged a comprehensive strategic partnership, he added.

France’s limits on Huawei 5G equipment amount to de facto ban by 2028 | Reuters French authorities have told telecoms operators planning to buy Huawei 5G equipment that they will not be able to renew licences for the gear once they expire, effectively phasing the Chinese firm out of mobile networks, three sources close to the matter said.

People’s Daily seems to have misunderstood - China and France commit to let Huawei invest in French 5G networks - People's Daily Online China and France have committed to allow Huawei to invest in French 5G networks. The French finance minister confirmed the news on Tuesday, saying the Chinese tech company will not be subject to a "blanket ban." Bruno Le Maire said sites of particular sensitivity would be protected and French national security would not be comprised by the decision.

How Xi Jinping almost spoiled the Tokyo Olympics - Nikkei Asian Review There is no doubt a considerable number of Japanese believe that if China had taken the right steps after the coronavirus was found in Wuhan and contained the spread, Japan would have been able to hold the Olympic Games this week. As if to reflect this tension, Abe and Xi have gone months without holding a single telephone conversation.  At present, tensions around the Senkaku Islands are also becoming serious.

Foreign Ministry Spokesperson Wang Wenbin's Regular Press Conference on July 22, 2020 Xinhua News Agency: According to reports, on July 20, Indian External Affairs Minister S. Jaishankar said at a meeting that “non-alignment was a term of a particular era and geopolitical landscape”, but India will never be part of an alliance. Global shifts, including the United States and China, were opening spaces for middle powers like India, Japan, the European Union and others. He also said that “The consequence of repositioning of the United States, that the big umbrella is now smaller than it used to be, has allowed many other countries to play more autonomous roles. It doesn’t affect us as much because we were never part of an alliance system and we will never be. But countries who depended more on the US are finding they have to take a call themselves on many issues”. What’s your comment on this? Wang Wenbin: We note relevant reports. We hope and believe that India, as an important force as we head toward a multipolar world, will be able to maintain its independent foreign policy and safeguard regional peace and stability through concrete actions, and play a constructive role in international affairs.

North Korea loses access to foreign cash as China trade drops 70% - Nikkei Asian Review Trade between North Korea and China plunged nearly 70% on the year between January and May after Pyongyang closed the border to prevent the transmission of the novel coronavirus, depriving it of a key source of foreign currency

Vietnam, China Foreign Ministers Seek to Control Sea Tensions - Bloomberg Deputy Prime Minister Pham Binh Minh who also heads the foreign ministry discussed his concern about the complicated developments in South China Sea during a teleconference with China’s Foreign Minister Wang Yi on July 21.

Chinese firm accused of spying on Uighurs ramps up UK business A Chinese surveillance company accused of helping Beijing to spy on persecuted Uighur Muslims has struck a string of new camera deals with British councils, helping it rake in millions of pounds of revenue last year. Pyronix, the Sheffield-based division of Hangzhou-headquartered CCTV firm Hikvision, increased its British sales by £4.6m to £38m in 2019 according to filings at Companies House.

外交部副部长郑泽光出席习近平外交思想研究中心首次专题研讨会暨专家受聘仪式 — 中华人民共和国外交部 The Center for Xi Jinping Thought on Xi Jinping Studies held its first seminar on Monday, chaired by vice foreign minister Zheng Zeguang, and a ceremony for the experts hired for the center. The scholars:

If any readers can name the attendees please let me know. I think I see Ruan Zongze and Yang Jiechi’s brother Yang Jiemian.

Watch Live | CNAS 2020 National Security Conference - A Deadly Game: East China Sea Crisis 2030 Play along as the CNAS Defense team and leading experts conduct a virtual wargame in the year 2030, exploring command and information concepts in a New American Way of Wa

Overseas Professionals and Technology Transfer to China - Center for Security and Emerging Technology China's government encourages members of the Chinese diaspora to engage in technology transfer through Chinese professional associations. This issue brief analyzes 208 such associations to assess the scope of technical exchange between overseas professionals and entities within China.

Adam Tooze · Whose century? After the Shock · LRB 30 July 2020 What​ Eric Hobsbawm called the ‘short 20th century’ is supposed to have ended in 1989 with the United States winning the Cold War. Yet today America faces a powerful and assertive China, a one-party state with an official ideology it calls 21st-century Marxism, which is busy building a powerful military on the back of an economy set to become the world’s biggest in the foreseeable future. This development has shaken the assumptions that have underpinned economic and national security decision-making in Washington for the last thirty years.

Hong Kong and Macao

華澳人語 - 僧是愚氓猶可訓,妖為鬼域必成 這幾天,香港不少傳媒和網媒,都在報導著同一個消息,謂被指爲《香港晨報》「幕後搞手」的蒯轍元,因為涉及兩宗詐騙案,金額共達八百八十萬元(人民幣,下同),在珠海被判刑二十年。蒯轍元曾經自稱是香港中聯辦的副省部級高官,與中央領導關係密切,保證一名內房股老闆能夠在廣東打贏官司,騙取兩百萬。他在上訴中申辯,他「確係爲國家工作,在統戰中有特殊作用、蒯氏集團僅作爲身分掩護」。但廣東高院卻認爲,此項主張沒有任何證據證明,蒯轍元所提供的以其名義發表的大量文章不足以證明其「特殊身分」,更不能成爲證明其沒有實施詐騙犯罪的證據,不予採納,駁回上訴並終身定案。有關的判決書,現在還掛在內地的法院判決案例網上。

Tech and Media

Controversial Feature in Alibaba-backed Amap Could Enable Domestic, Workplace Stalking- PingWest AutoNavi, the Alibaba-owned team behind Amap, marketed Family Map as an important and timely tool for ensuring the safety of family members. The team also said that users can opt out whenever they want. However, the feature has raised considerable concerns about the potential to be abused. Chinese social networks users are complaining that it opens up a new frontier in family conflicts, especially between spouses, and may be exploited as a tool for domestic stalking/cyberstalking.

Society, Arts, Sports, Culture and History

NBA ends relationship with academy in China - ESPN The NBA has ended its relationship with a basketball academy in China's Xinjiang province, according to a letter sent to U.S. Senator Marsha Blackburn

Energy, Environment, Science and Health

Beijing issues new guidelines for reopening of sports venues - Xinhua The guidelines include a capacity limit of 50 percent, and require customers to limit their exercise time to two hours, show their health code and measure body temperature at the entrance, and maintain social distancing inside the facilities. The Bureau added that a safe social distance for swimming, skating and rollerskating is not less than five square meters, and that of other indoor sports is not less than four square meters.

Chinese mainland reports 14 new confirmed COVID-19 cases - Xinhua Chinese health authority said Wednesday that it received reports of 14 new confirmed COVID-19 cases on the Chinese mainland Tuesday, including five imported cases and nine locally-transmitted ones.