Xi back from Beidaihe; US-China; Hidden debt, infrastructure spending and stimulus; Art theft; Poverty alleviation guideline
For those who missed yesterday’s note on my Beijing trip you can read it here.
Pictures and video of Xi reappeared in official media reports Sunday for the coverage of his chairing of a meeting of the CMC to discuss Party Building in the PLA. So it looks like I do not need to eat this newsletter just yet…
The Washington Post ran a story Saturday about After detente with North Korea, Trump increasingly takes aim at a new foe — China:
From an escalating trade war to a new defense budget that counters Chinese maritime expansion, the Trump administration has taken aim at the East Asian power in a contest of wills that has led to a growing consensus in Beijing that the United States is seeking to contain China’s rise…
Analysts said the rise in hostility suggests that Trump and his advisers have come to view the communist nation as a malign power and direct competitor and adversary whose expanding influence must be blunted through more extreme countermeasures. To a degree, it is a view that is shared more widely among Washington foreign policy analysts as Xi has consolidated power and pursued an aggressive agenda of economic growth and territorial expansion…
Trump’s preoccupation with China was on display at a Cabinet meeting at the White House on Thursday. During the hour-long discussion, open to reporters, the president accused China of easing economic pressure on North Korea and of flooding addictive opioids into the United States.
The North Korea issue is one that could quickly return to the fore of US policy towards China if Beijing is easing off the sanctions pressure. The Singapore Straits Times has reported that Xi Jinping is planning to attend the celebrations for the 70th anniversary founding of the DPRK in Pyongyang in September, and if he goes it seems unlikely he would show up without bearing some gifts. If President Trump decides North Korea is playing him, and Beijing is complicit, then do not be surprised to see US sanctions on major PRC financial institutions and/or large central SOEs like the oil giants back on the table.
The story quotes Matt Pottinger, the senior director for Asia at the National Security Council and one of the architects of the structural shift in the US government’s view of China, as telling a US Chamber of Commerce audience that:
“We know there’s anxiety about the adjustment that’s taking place in U.S. bilateral relationships, maybe one in particular..That adjustment is overdue. It’s inevitable. What’s important now is for the United States and our partners to look forward to the 21st century competition that all of us are facing and that together we will be able to win.”
China may take some solace from the fact that many of America’s natural allies in a broader adjustment towards the PRC are fighting their own battles with the Trump Administration, at least for now. But that may be changing.
One other thing I heard from several PRC scholars during my Beijing trip is that the US has started revoking visas of some PRC America scholars, and in least one case I was told an academic’s visa was revoked after pressure from the FBI for information during visits to the US, pressure this person resisted and reported. Maybe this is visa reciprocity for some of the problems foreign scholars have with Beijing, but I do wonder if limiting visits from PRC US experts at this moment is helpful?
Thanks for reading, feel free to weigh in with comments.
The Essential Eight
1. Xi is back from Beidaihe
President Xi Jinping has called for efforts to comprehensively strengthen the leadership of the Communist Party of China (CPC) and the Party building in the country's armed forces to ensure a solid political guarantee for the building of a strong military.
Xi, also general secretary of the CPC Central Committee and chairman of the Central Military Commission (CMC), made the remarks at a CMC meeting on Party building, which was held from Friday to Sunday in Beijing.
The report was the first 10 minutes of the Sunday Evening News, Xi looks rested and slimmer, no? 习近平在中央军委党的建设会议上强调 全面加强新时代我军党的领导和党的建设工作 为开创强军事业新局面提供坚强政治保证
And of course Xi was on page 1 of the 8.20 People's Daily:
Chinese political scientist Chen Daoyin said the president, who also heads the CMC, was emphasising his political authority.
“The Communist Party’s power is built on its grip on the military and propaganda. The meeting sends a message that Xi has a firm hold on power,” Chen said. “He called for discipline as strong as iron. He is presenting a strong image.”
The good news is the two sides are talking, though expectations are very low and I think this headline is overegged, especially if US Treasury is taking the lead given their lack of credibility with the Chinese since Trump upended the deal Steven Mnuchin and Liu He thought they had worked out.
Scheduled midlevel talks in Washington next week, which both sides announced on Thursday, will pave the way for November. A nine-member delegation from Beijing, led by Vice Commerce Minister Wang Shouwen, will meet with U.S. officials led by the Treasury undersecretary, David Malpass, on Aug. 22-23...
But there are differing views on how to respond. The Treasury and Mr. Kudlow’s National Economic Council have put together a pared-down list of requests to China that they think could be a basis for a deal. But the U.S. trade representative’s office, which is in charge of tariffs, wants to hold off on negotiations, arguing that additional levies would give the U.S. more bargaining power by October, said people briefed on the discussions.
Leading up to and during the Beidaihe meeting, state media published a series of editorials and commentaries casting a harsher light on Sino-US relations. A signed commentary published by party mouthpiece People’s Daily on August 10 said the Trump administration had continued the “engagement plus containment” approach to China, hoping to significantly reshape China’s development in America’s image.
“A review of the trade negotiations with the US shows the American government has been inconsistent, ambivalent and capricious,” it said. “But the behind-the-scenes logic is pretty clear – it is never just about narrowing trade deficits, but to contain China in much broader areas.”
Another commentary by the overseas edition of People’s Daily on August 12 said the US was seeking hegemony, and China should be determined to fight.
European banks are hopeful that the diplomatic tension between China and the US could play to their advantage by allowing them to steal a march on their American rivals in the fast-growing Chinese market.
“Given the tensions between the US and China, I have a question of whether the US banks will ever be that strong in China,” said Frédéric Oudéa, chief executive of Société Générale. “We are in a world where everyone is trying to show their muscle.”
“Well, I can say definitively that it’s a sufficient national security concern about Chinese meddling, Iranian meddling and North Korean meddling that we’re taking steps to try and prevent it,” Bolton said on ABC News’s “This Week” when asked about a tweet by President Trump saying that “all the fools” are focused on election interference by Russia alone. “So all four of these countries, really.”
Comment: The environment in DC towards China is increasingly toxic. There are plenty of reasons to be hawkish (I prefer the term realistic) but the shrinking space for debate could be a problem—Former U.S. Officials Taking China’s Side in Trade Fights - DailyBeast
Below are a sampling of former U.S. officials and former U.S. trade lawyers who now represent Chinese companies as Beijing and Washington square off in an escalating trade war.
The Pentagon’s Annual Report on Chinese Military – Federation Of American Scientists-By Hans M. Kristensen:
The Pentagon’s annual report to Congress on China’s military and security developments has finally been published, several months later than previous volumes. Normally it takes about one month after the report is generated to be published. This year it took three times that long.
The report covers many aspects of Chinese military developments. In this article I’ll briefly review the nuclear weapons related aspects of the report.
Overall, nuclear developments are not what stand out in this report. Although there are important nuclear developments, the Pentagon’s primary concern is clearly about China’s conventional forces.
The full report is here in PDF
The report, released on Thursday, distorts the relations and situation across the Taiwan Straits, said Senior Colonel Wu Qian, a spokesman for the Ministry of National Defense, in a statement on Friday.
"The release of such reports year after year has harmed the mutual trust, and we ask the United States to abandon the Cold War mindset and adopt an objective and rational attitude toward China's defense and military developments," he said...
In a first, Taiwanese journalists were permitted to follow Ms. Tsai and report from the sites of events she attended. She visited Taiwan’s de facto consulate in Los Angeles — another first — and she addressed American media at the Ronald Reagan Presidential Library near Los Angeles.
“There were pictures of her meeting crowds of local Taiwanese, accompanied by police escort, and giving a speech at the Reagan library,” said Julian Ku, professor at Hofstra Law School. “All of that significantly raised her public profile and made her seem more like a normal leader making a normal visit to a foreign country.”..
Bonnie Glaser, senior Asia adviser at the Center for Strategic and International Studies, said the Trump administration’s approval for Ms. Tsai’s visits to the Reagan library and the Johnson Space Center in Houston showed that “they trusted she would not say or do anything that would increase cross-strait tensions.”
Ministry spokesman Lu Kang told reporters at a daily briefing that Beijing would “always oppose any country providing conveniences and venues for relevant people from Taiwan to conduct such activities.”
“We have made clear our solemn position repeatedly to relevant countries,” Lu said. “We are of course against all countries that have diplomatic ties with China, including the U.S., conducting official exchanges with Taiwan.”
The NASA visit marked the rare presence of a Taiwanese elected official at an official U.S. government facility.
Taiwan’s 85C Bakery Café has been dropped from Chinese mainland delivery platforms after the island’s leader visited one of its stores in Los Angeles, as the chain becomes the latest target of the Chinese mainland’s politically sensitive consumers.
Although the company has since vowed to “firmly support the peaceful development of the cross-strait relationship,” this failed to appease enraged internet users. Its official website was hacked and is nonoperational as of publication.
China’s prestigious Tsinghua University will require first-year students from Hong Kong and Macau to go through a mandatory three-week military training programme that was previously only compulsory for mainland students, the South China Morning Post has learned.
The State Council has approved the measures for Hong Kong, Macao and Taiwan residents to apply for mainland residence permits, to bring convenience to their work, study and life in the mainland. Hong Kong, Macao and Taiwan residents who live in the Chinese mainland for longer than half a year and have a legitimate and stable job, residence or continuous studying experience can voluntarily apply for the permits.
Making it easier for Taiwanese to work and live in China seems to be a classic United Front move, but then requiring military training for students and penalizing a coffee chain remind everyone of the punitive side of things...
As China extends its influence across the Pacific, Palau is one of Taipei’s 18 remaining allies worldwide and is under pressure to switch allegiances, officials and business people there say.
“There is an ongoing discussion about China weaponizing tourism,” said Jeffrey Barabe, owner of Palau Central Hotel and Palau Carolines Resort in Koror. “Some believe that the dollars were allowed to flow in and now they are pulling it back to try and get Palau to establish ties diplomatically.”
4. Hidden debt, infrastructure spending and stimulus
The order was sent to municipal governments throughout the country, according to official reports of cadres meeting to study the threat.
The full text of the order has not been released but the official Hunan Daily reported on Thursday that provincial governor Xu Dazhe ordered cadres “to follow requests from the central leadership to get a clear picture of hidden local government debt as soon as possible and then make plans to address it”.
Officials in Jingzhou and Yunxi county in Hubei province and the county of Kangle in Gansu also met to examine the instructions, reports on government websites said.
Zhao Quanhou, a senior researcher with the Ministry of Finance’s Chinese Academy of Fiscal Sciences, said the debt curbs were an effort to cut leverage in the economy, listed by President Xi Jinping as the country’s overriding economic priority.
Comment: The July 10 newsletter discussed the Caijing cover story that week that looked at hidden (aka implicit) local government debts that it said the government is once again undertaking an effort to calculate the entirety of the debts (guess the 2014-15 efforts didn’t really get to the bottom of things…) and that the central government is working on another document on preventing risks from local government debts.
Song Houze of MacroPolo has a somewhat contrarian view of the likelihood of a big stimulus. I lean towards believing there will be and in fact already is some stimulus in various forms but do not buy into the idea that Beijing is preparing anything on the order of what we saw in 2008--Macro Outlook: Steady As She Goes on Deleveraging:
Key Takeaways for 2H2018
• The recent Politburo meeting on July 31 reaffirmed Beijing’s priority of containing China’s debt, focusing on state sector and local government deleveraging.
• Beijing will primarily use administrative measures, and to a lesser extent financial regulation, to contain financial risk for the rest of 2018.
• While monetary policy will continue to be modestly accommodative, the deleveraging agenda—that is, curtailing shadow banking and local off-budget borrowing—will remain intact and continue to put a drag on growth in the medium term.
• As long as state firms’ and local governments’ finances are solid, Beijing will hold back on stimulus, stay the course on deleveraging, and accept lower growth.
But this last point may be a bit problematic as local government finances are not solid, and may be in much worse shape than is assumed as the authorities work to get a better handle on all the implicit debt.
In a statement released on its website on Saturday, the China Banking and Insurance Regulatory Commission (CBIRC) called on banks, financial asset management companies and insurance companies to “stabilize employment, foreign trade, foreign investment and market expectations” in order to “improve economic efficiency.”
The statement emphasized the need to support infrastructure funding, with insurance companies in particular told to take a more prominent role. “Insurance firms have long-term advantages in supporting investment and should actively serve the country’s major strategies and key projects through debt, equity, stocks and funds,” it said.
The general credit supply to infrastructure projects should be increased on the condition that it does not lead to a rise in local-government debt, the statement said.
The statement - 中国银保监会办公厅关于进一步做好信贷工作 提升服务实体经济质效的通知
5. Google CEO wants back into China. Employees not so sure
Employees are circulating a list of demands for the company in a letter obtained by BuzzFeed News (posted in full, below), calling for an ethics review structure with rank-and-file employee representatives, the appointment of ombudspeople, and an ethical assessment of Google projects including Dragonfly and Maven, Google’s contract with the Pentagon to build AI-assisted drone technology.
“Many of us believe that Dragonfly poses a threat to freedom of expression and political dissent globally, and violates our AI principles," two employees wrote in an email distributing the demand list.
As a vocal supporter of internet freedom agenda, by entering China, Google also automatically empowers the internet sovereignty policy or the idea that governments should be in charge of internet regulation. Does this matter if, as a recent article in Foreign Affairs argues, the future of the internet is already Chinese?
It does, because many other countries that are somewhere in between committing to open and borderless internet and treating the internet as primarily a government domain, would take the first option less serious given that one of the major American giants is ignoring it.
Beijing should approve Google just for the propaganda win. It will be easy for the authorities to bend Google to its will.
Beijing’s vision of the Internet is ascendant. According to the think tank Freedom House, Internet freedom—how easily people can access the Internet and use it to speak their minds—has declined for the last seven years. More countries are pushing companies to store data on their citizens within their borders (which companies resist because doing so raises costs and reduces their ability to protect the privacy of their users) and to allow the government to carry out security reviews of their network equipment. Each country pursues these policies in support of its own ends, but they all can turn to China for material, technical, and political support.
6. Xinjiang camps becoming a global issue for Beijing
Satellite images reviewed by The Wall Street Journal and a specialist in photo analysis show that camps have been growing. Construction work has been carried out on some within the past two weeks, including at one near the western city of Kashgar that has doubled in size since Journal reporters visited in November.
The full extent of the internment program was long obscured because many Uighurs feared speaking out. Now more are recounting experiences, including six former inmates interviewed by the Journal who described how they or other detainees had been bound to chairs and deprived of adequate food...
He and other former inmates interviewed by the Journal said they were instructed that they shouldn’t pray, keep a copy of the Quran or fast during Ramadan. Some said they were forced to eat pork, which Islam forbids.
“They said we should give thanks not to Allah, but to Xi Jinping,” said one Uighur former inmate, who declined to be identified.
Comment: Josh Chin, one of the authors of the article, gives more details of their reporting in this long Twitter thread:
We confirmed a lot of what others have reported and we found out some new things. It’s incredibly difficult to dig up information about these camps, so I thought it would be helpful to describe how we did our reporting. 2/xAugust 18, 2018
Members of a UN panel reviewing China’s rights record have said they received credible reports that one million ethnic Uighurs are held in what resembles a “massive internment camp that is shrouded in secrecy”.
The “ulterior motives” of anti-China forces were behind the “unfounded” slandering of the country’s anti-terrorism measures, foreign ministry spokesman Lu Kang said in a statement.
“Any defamatory rumours are futile,” Lu said, adding that the situation in Xinjiang was stable with communities of all ethnicities getting along harmoniously, and economic development enjoying good momentum.
7. Coordinated theft (some would say repossessing...) of Chinese antiques and art from museums worldwide?
Fascinating story, though the article gives no evidence to support the question in the sub-headline "Is the Chinese government behind one of the boldest art-crime waves in history?" Certainly lots of other plausible explanations, including rich collectors who want these in their collection to rich collectors who may see utility in obtaining these and then returning them to the Chinese government.
In the years since the Fontainebleau heist, the robberies have continued throughout Europe—sometimes in daring, cinematic fashion. The full scale of the criminality is impossible to pinpoint, because many heists never make the headlines. Security officials and museum boards are sometimes reluctant to publicize their own failures, both to avoid embarrassment and to save on the cost of security upgrades.
But the thefts that were made public bear striking similarities. The criminals are careful and professional. They often seem to be working from a shopping list—and appear content to leave behind high-value objects that aren't on it.
In each case, the robbers focused their efforts on art and antiquities from China, especially items that had been looted by foreign armies. Many of these objects are well documented and publicly known, making them very hard to sell and difficult to display. In most cases the pieces have not been recovered; they seem to simply vanish.
8. War on poverty gets a new guideline
China released a guideline on Aug 19 on winning the battle against poverty in the next three years to prepare the nation for eradicating poverty by 2020.
It is an arduous task to lift a further 30 million people out of poverty in the next three years, said the guideline released by the Communist Party of China Central Committee and the State Council.
The guideline reiterates the country’s target of lifting all rural poor and impoverished counties out of poverty and eliminating absolute poverty by 2020 to build a moderately prosperous society.
Poor population should be guaranteed food and clothing and children from poor families should be guaranteed nine-year compulsory education. Basic medical needs and living conditions of poor population should also be guaranteed, according to the guideline.
The guideline said poverty relief work should be focused on areas in deep poverty, such as Tibet, mountainous Liangshan Yi Autonomous Prefecture in Sichuan Province and Nujiang Lisu Autonomous Prefecture in Yunnan Province.
The official release 中共中央 国务院关于打赢脱贫攻坚战三年行动的指导意见
It is dated June 15, interesting that released publicly only now. Expect lots more money and political work for the areas cited for focus; they are highlited not just for infrastructure problems but political issues among their local officials:
Business, Economy, Finance And Trade
Trade War Won’t Dent China’s GDP - Bloomberg - Michael Pettis The fact is that Chinese GDP will be unaffected by a trade war with the U.S., no matter how severe, because the government will do whatever it takes to meet its growth targets... That doesn’t mean higher tariffs won’t damage the Chinese economy. The pain will instead show up instead mainly in the form of a more rapid rise in debt. The harsher the war’s impact, in other words, the more debt China will need to achieve its growth target... There’s one silver lining. Chinese leaders seem determined to get debt under control, which will ultimately require either giving up the growth target or lowering it considerably. A trade war, then, could be used politically, to overcome internal resistance to allowing GDP to slow.
Domestic Analysts Skeptical about CBIRC's Push for Chinese Banks to Support Real Economy - China Banking News One source from Beijing’s finance sector points out that “at present more funds are flowing towards other financial institutions and central state-owned enterprises.” “In actuality central SOE’s are not the enterprises with the greatest lack of funds…some central financial companies are capable of obtaining overnight funds from the market of under 2%, before transferring those funds to banks to make interbank deposits, where rates are over 2% or even around 3%, in order to profit from the spread.”
China's Yuan Jumps to Strongest in a Week - Bloomberg The Chinese currency rose 0.51 percent to 6.8514 per dollar, its strongest since Aug. 10, as of 4:38 p.m. in Shanghai. The PBOC strengthened its fixing, which restricts the yuan’s moves by 2 percent on either side, by the most since Aug. 2. It was stronger than the average forecast of traders and analysts for an eighth day
China Steps Up Fight Against Yuan Speculators - Caixin Global The Shanghai headquarters of the PBOC issued a notice on Thursday banning banks from depositing or lending yuan offshore through interbank accounts by suspending some arrangements that are only available in the FTZ, a source close to the central bank and an executive with a domestic bank told Caixin.
Chinese credit rating agency Dagong suspended after cash-for-ratings probe | South China Morning Post The uncovering of irregularities at the Beijing-based Dagong Global Credit Rating Co exposed the lack of independent and trustworthy credit ratings in the Chinese bond market – a problem that amplifies the risks for fixed-income product investors...
Beijing authority to clamp down on rental market irregularities as prices soar | Reuters Beijing’s housing authority said on Friday it will clamp down on market irregularities that have fueled a spike in rental prices, telling major apartment rental service providers, including Ziroom, to correct their behavior. In a statement on its website, the Beijing Municipal Commission of Housing and Urban-rural Development said it had held talks with major rental companies on Friday after media reports of surging rents.
China's new method of tariff retaliation is destroying US lobster exports — Quartz US lobsters used to clear Chinese customs quickly, as an express product, which helped make sure they were still alive when they got to their final destination, Nadeau said. Now Beijing is requiring each shipment to be manually inspected, Nadeau said, with customs agents opening individual boxes, taking up precious hours and threatening profits. “If they are dead, we don’t get paid,” Nadeau said.
China’s Anbang Puts a $5.5 Billion Luxury Hotel Portfolio on the Block - WSJ Anbang had been listening to offers to buy individual properties within its hotel portfolio, which includes high-end properties like the Essex House Hotel overlooking Manhattan’s Central Park; the Four Seasons Hotel in Jackson Hole, Wyo.; and the InterContinental Hotels in Chicago and Miami, The Wall Street Journal reported in February. But now as Anbang looks to raise cash more rapidly, the insurer has decided to sell the entire portfolio of about 15 hotels, the people said.
Politics, Law And Ideology
China Purges 40 Officials in Widening Vaccine Fallout - Bloomberg The 25-member body led by President Xi Jinping ordered an investigation into the country’s former top food-and-drug regulator, Wu Zhen, the official Xinhua News Agency said Thursday. The body also demanded the resignations of the mayor of the northeastern city of Changchun, Liu Changlong, and the vice minister of the State Administration for Market Regulation, Bi Jingquan, Xinhua said.
Student Activists and China’s Evolving Labor Movement – China Digital Times (CDT) Among the student activists is Yue Xin, a recent graduate of Peking University and a current factory worker in southern China, who drew widespread support on social media in April after circulating an open letter accusing her alma mater of blocking her efforts to expose a decades-old rape-suicide case involving a PKU professor. In her most recent open letter, Yue detailed the pressure she has faced from her university, parents, and government officials since she began her advocacy work and talked about the importance of solidarity with her “worker friends.” The latest incidents involving labor activists and protesters are part of broader changes in the nature of labor unrest in China, which has seen shifts not only in the distribution of worker protests across industries and geographic regions, but also in the types of worker demands and organization tactics.
《习近平扶贫论述摘编》出版发行--中国统一战线新闻网--人民网 "Edited Volume of Xi Jinping's Discourse on Poverty Alleviation" has been published 中共中央党史和文献研究院会同国务院扶贫办编辑的《习近平扶贫论述摘编》一书，近日由中央文献出版社出版，在全国发行。
Trial By Invective | China Media Project hen Jieren (陈杰人), the blogger and popular “Big V” taken into custody by authorities in Hunan province back in June, appeared in court yesterday. But this was not a court of prosecutors and defenders, of cross-examinations, legal arguments or objections. It was the court of the People’s Daily. The court of Xinhua News Agency. The court of the Global Times. In a raft of reports, central state media attacked Chen as an “internet pest” who had “polluted the online space,” who had deceived millions of online fans into believing he is a man who cares deeply about truth and justice. In fact, the reports said, he is a deranged profiteer, raking in millions through intimidation and extortion, all in the name of watchdog journalism.
Forced TV Confessions database - RSDL Monitor Following China’s continued use of Forced TV Confessions, most recently with journalist Chen Jieren and his brothers, and the increasingly political nature of those cases where these confessions are forced out of victims, and following Safeguard Defenders groundbreaking report on the reality behind these TV appearances, RSDLmonitor is now making available its full database on Forced TV Confessions, going back to 2013 – the year these TV appearances started becoming institutionalized as part of the government’s attack on lawyers, journalists, and rights defenders.
Xi Jinping Thought Is Facing a Harsh Reality Check – Foreign Policy - Julian Gewirtz This ideology is both backward-looking and forward-looking. It draws most directly on traditional Chinese culture and Marxist dialectical materialism, presenting Xi as the heroic avatar who can unite and carry forward those lineages. It seeks to adapt them to the 21st century—becoming what the Chinese scholar Jiang Shigong calls a “guide to action” and the basis of a newfound “cultural self-confidence and political maturity.” Xi has been explicit that policy work (whether economic policy, foreign policy, or beyond) is meaningful only if it is built on this ideological foundation.
NPCSC Session Watch: Separate Parts of Civil Code, Tax Bills, Criminal Procedure, and More – NPC Observer The Council of Chairmen met on August 17 and decided that the 13th NPC Standing Committee (NPCSC) will meet for its fifth session from August 27 to 31. The session will consider at least seven legislative bills, including the much-anticipated draft Separate Parts of China’s first Civil Code, draft E-Commerce Law, and three tax bills. As usual, below we take a look at the legislative bills on the session’s agenda.
Foreign and Military Affairs
Malaysian Leader Aims for 'Win-Win' in Reducing Chinese Projects - Caixin Global Malaysia is seeking to reach a mutually beneficial outcome with Beijing as Southeast Asia’s third-largest economy plans to postpone or scrap some mega projects funded with money borrowed from China, Prime Minister Mahathir Mohamad said Monday. “Malaysia has been borrowing a lot of money from China. And now it’s faced with the problem of repayment of the loans, and that is why we have to maybe reduce or postpone some of the projects in Malaysia,” Mahathir told Caixin in an interview. “So it’s nothing to do with Chinese business. It is just our need to reduce the amount of money we borrow from other countries.”
Mahathir calls for 'fair trade' in China, warns of 'new colonialism' - Sydney Morning Herald Veteran Malaysian prime minister Mahathir Mohamad lived up to his reputation for straight talk, calling for "fair trade" and warning against a new colonialism in a joint press conference with Chinese premier Li Keqiang. Dr Mahathir, 93, is visiting Beijing to strengthen economic ties with China. But he is also seeking to renegotiate massive Chinese infrastructure contracts worth around $US23 billion ($31 billion) that were signed by his predecessor, Najib Razak, who is now facing corruption charges.
China, Malaysia vow to advocate free trade, globalization - CGTN The Malaysian prime minister noted that his country can learn a lot from China, as China is a big country and a prosperous market built by very dynamic people. He believed that China's investment in Malaysia could solve some of their internal fiscal problems. // The CGTN spin...
[视频]习近平会见马来西亚总理_CCTV节目官网-CCTV-1_央视网(cctv.com) 8.20 CCTV Evening News report on Xi's meeting with Mahathir
China must not write off Pacific island debts, says Samoan leader | AFP Tuilaepa Sailele Malielegaoi argues it would be embarrassing and jeopardise future borrowing, after Tonga’s prime minister calls for loans to be forgiven
Chinese Cyberespionage Originating From Tsinghua University Infrastructure - Recorded Future We assess with medium confidence that the network reconnaissance activities we uncovered were conducted by Chinese state-sponsored actors in support of China’s economic development goals.
Jichang Lulu, Martin Hála: New Comintern for New Era – China Digital Times (CDT) As part of their continued investigations into Chinese government influence over foreign governments and global institutions, Project Sinopsis’ Martin Hála, and Jichang Lulu have written about a recent visit to Iceland by the CCP’s International Liaison Department, and how the meetings were reported differently by the CCP and the Icelandic government. The piece also examines how the ILD, which has its origins in Soviet management of the global Communist movement, is “another tool of foreign influence,” in addition to the United Front and China’s global propaganda efforts.
Guardians of the Belt and Road | Mercator Institute for China Studies The impact of this newly developing Chinese activity abroad is analyzed in this MERICS China Monitor. Chinese private security companies’ international activities pose a challenge to European interests as they are often largely unregulated and their security staff are often inexperienced in dealing with serious conflict situations and combat. EU policymakers, thus, are called upon to encourage and assist Beijing to pass laws regulating Chinese private security companies’ activities overseas.
PLA conducts live-fire drill on Qinghai-Tibet plateau - China Military The drills mainly tested the complete digital combat system in the extreme environment, Song Zhongping, a Beijing-based military expert and TV commentator told the Global Times on Thursday. Song noted such a practice is not targeted against any particular nation near the area, but forms part of China's bigger plan to build a strong army capable of winning a war in all weathers and territories. Almost all units will regularly practice in the area, he said.
How the U.S. Should Respond to Cambodia's Tilt Toward China - Foreign Affairs - Charles Edel For myriad reasons, Washington has long considered Cambodia a strategic lost cause. Yet the country’s Chinese turn should serve as a warning of what China’s growing economic presence, especially in authoritarian countries, will mean for Southeast Asia and Eurasia more broadly.
President Xi to chair FOCAC Beijing summit in early September - Xinhua Chinese President Xi Jinping is to chair the 2018 Beijing summit of the Forum on China-Africa Cooperation (FOCAC), which is scheduled for Sept. 3-4 in Beijing.
[视频]习近平会见越共中央政治局委员 中央书记处常务书记_CCTV节目官网-CCTV-1_央视网(cctv.com) 8.20 CCTV Evening News report on Xi's meeting with visiting Vietnamese official
Hong Kong, Macao
‘Not enough evidence to prosecute Hong Kong separatist Andy Chan’: Beijing loyalist Maria Tam adopts different stance from top official Zhang Xiaoming | South China Morning Post She suggests banning Chan’s party under another ordinance while insisting ‘road map’ to national security legislation in city has been developing
Tech And Media
Y Combinator is launching a startup program in China | TechCrunch U.S. accelerator Y Combinator is expanding to China after it announced the hiring of former Microsoft and Baidu executive Qi Lu who will develop a standalone startup program that runs on Chinese soil. // Jeff Ding, author of the ChinAI newsletter, has translated an interview with Qi Lu here.. expect lots of focus on AI
(Can’t) Picture This: An Analysis of Image Filtering on WeChat Moments - The Citizen Lab WeChat (the most popular chat app in China) uses two different algorithms to filter images in Moments: an OCR-based one that filters images containing sensitive text and a visual-based one that filters images that are visually similar to those on an image blacklist
Is China’s First ‘Homegrown’ Web Browser a Google Chrome Ripoff? - SixthTone AllMobilize said that it had raised 250 million yuan ($36 million) in its series C fundraising round from Morningside Venture Capital, IDG Capital, Fortune Venture Capital, and other investors, including several government agencies. Redcore brands itself as an “enterprise service browser,” and its clients include several official organs and state-owned enterprises, such as the State Council and the State Grid Corporation. The startup’s claim was immediately put to the test by netizens, who gave low marks for innovation. On Wednesday, several internet users posted on microblogging site Weibo that after decompressing the installation package using unzip software, they discovered that many of the installation files for AllMobilize’s browser could be traced to Chrome.
IPP REVIEW -- The “Sputnik Moment” for the Chinese Semiconductor Industry The fabrication segment in the semiconductor production chain remains the weakest link of China. The Chinese manufacturers are still working on the 14nm design, while their overseas peers had passed that technological stage four years ago and have successfully migrated to 10 nm and now mass producing 7nm products. International fab leader Taiwan Semiconductor Manufacturing Corporation (TSMC) is working on a 5 nm design at the moment.
Apple Wipes Thousands of Gambling Apps After China Media Attacks - Bloomberg Government-controlled media including China Central Television attacked Apple this month for hosting illegal and fake lottery-ticket apps, which they said resulted in massive losses for hoodwinked users. On Sunday, CCTV reported that Apple pulled at least 4,000 apps tagged with the keyword “gambling” on Aug. 9 alone.
China Startups Struggle to Escape the Shadows of Alibaba and Tencent - Bloomberg A review of initial public offering filings by Chinese companies shows that while the startups benefit from the cash and customers Alibaba and Tencent provide, the deals can also feel like a trap. They can give Alibaba and Tencent inordinate voting power through board seats and veto rights; come laden with conflicts of interest over hiring, mergers and acquisitions, and other strategic decisions; and deepen the startups’ dependence on traffic from the larger companies to life-and-death proportions.
Tencent-backed Qutoutiao files for U.S. IPO | Reuters Chinese content aggregator Qutoutiao Inc, which is backed by technology giant Tencent Holdings Ltd, filed for an initial public offering of up to $300 million with the U.S. Securities and Exchange Commission on Friday. Qutoutiao, which means “fun headline”, collects articles and short videos from professional media and freelancers and presents customized feeds to users on its namesake mobile application.
Society, Art, Sports, Culture And History
Elderly account for 17% of population in China - Global Times People older than 60 made up nearly one-fifth of China's population at the end of 2017, a statistic accelerated by the country's decades-old family planning policy that prevented nearly 400 million births, said Chinese demographers. The number of people aged 60 or older in China hit 241 million at the end of 2017, or 17.3 percent of the country's population, according to data published on the Ministry of Civil Affairs website.
How China’s Urban Demolition Policy Traps Migrant Youths - Sixth Tone In recent decades, urban villages across the country have been torn down and redeveloped, with the rural migrants who call these areas home evicted en masse. Curious about how these mass dislocations have been affecting second-generation migrant youths — meaning either the children of rural migrant workers who relocated with their parents at a young age or those who were born in the city after their parents’ migration — I spent 14 months conducting fieldwork in “Yellow Field,” an urban village located at the edge of a large city in northern China. (To protect the subjects of my research, I have changed the village’s name.) What I found suggests that — in contrast to the stated goal of these projects — village demolitions have the potential to cause social problems down the road. -- Li Miao is an assistant professor of sociology at Shandong University.
China's Proposed 'No Child Tax' Stirs Controversy: "First Forced Abortions, Now Pressured Into Pregnancy" | What's on Weibo A recent article, in which two Chinese academics propose the implementation of some sort of ‘tax’ for people under 40 who have no second child, has sparked outrage on social media. “The same woman who had to undergo a forced abortion before, is now pressured to get pregnant,” some say.
Binging and Purging as Online Trend: From China's "Big Stomach Stars" to "Vomit Bars" | What's on Weibo Skinny girls that eat a week’s worth of food in one sitting: Chinese binge-eating vloggers are all the rage recently. But behind their cute image and happy fans, there are darker online discussions tying them to self-induced vomiting – something that is promoted in China’s so-called ‘vomit bars.’ How innocuous is this social media extreme-eating trend?
Energy, Environment, Science And Health
China shifts to Iranian tankers to keep oil flowing amid U.S. sanctions - sources | Reuters Chinese buyers of Iranian oil are starting to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all of their imports to keep supply flowing amid the re-imposition of economic sanctions by the United States.
China’s Minister of Science Wang Zhigang on a Two-Day Visit to Israel - CTech Last week, Calcalist reported that Chinese vice president Wang Qishan has been appointed as the Chinese head of the China-Israel Joint Committee on Innovation Cooperation, and will visit Israel for the annual committee meeting at the end of the year. The Israeli co-chair is Israeli Prime Minister and Minister of Foreign Affairs Benjamin Netanyahu.
Beijing Enjoys the Bluest Skies in a Decade - Bloomberg Of the seven lowest monthly pollution readings in the capital city since 2008, five have been recorded since the beginning of last summer, according to data gathered by the U.S. Embassy in Beijing. That’s when Chinese officials ramped up enforcement of policies restricting coal burning in Beijing and surrounding areas. July pollution levels averaged 44 micrograms of airborne particles per cubic meter, the seventh lowest since recordings began in 2008.
Beijing's 7th ring road opens to traffic this month - China Daily The Capital Region Ring Expressway, a 1,000-kilometer-long highway linking Beijing and its neighboring cities, will open to traffic this month, Hebnews.com reported on Friday. Dubbed as the "seventh ring road" of Beijing, the ring-shaped highway is to further the integration of Beijing-Tianjin-Hebei, and will help improve the capital's air quality. The road passing through Beijng's Daxing, Tongzhou, Pinggu districts links 13 major cities around the capital, including Zhangjiakou, Zhuozhou, Langfang, Chengde.
This newsletter is intended for a single recipient, but occasional forwarding is fine. If you would like to order multiple subscriptions for your team with a group discount (minimum 5), please contact me directly.