Xi ends Europe trip; Lighthizer on trade talks; Committee on the Present Danger: China; Xu Zhangrun
|Bill Bishop||Mar 26, 2019|| 3||2|
Aloha..another short and sweet newsletter, thanks for your patience this week.
The Essential Eight
1. Xi’s Europe trip
France, Germany and the European Commission have pushed Xi Jinping to open China’s protected domestic markets to foreign business, with Angela Merkel insisting on “a certain amount of reciprocity” from Beijing to seal an EU-China investment agreement next year.
French president Emmanuel Macron has tried to forge a united EU front to resist intense commercial competition from China and the US. But his efforts have been weakened by the eagerness of Italy and some central and eastern European states to attract Chinese investment..
Mr Macron had invited Ms Merkel, the German chancellor, and Jean-Claude Juncker, head of the European Commission, to join him in Paris at the end of a bilateral summit with the Chinese president in a drive to underscore EU unity.
The Chinese leader’s six-day trip to Europe, which ended Tuesday, has exposed differences within and between EU countries about how much to open up to China’s ambitious global investment plans, and how to limit its growing influence in the region.
But Mr. Xi’s tour to Rome, Sicily, Paris and the Riviera has also highlighted Europe’s eagerness to secure lucrative deals. European leaders and dignitaries have received and courted the Chinese president with a fanfare offered to few other foreign guests... That has allowed China to portray the European visit as a triumph, glossing over the EU’s criticisms and internal debates.
China concluded a deal to buy 300 aircraft from Airbus during President Xi Jinping’s state visit to France. The value of the deal was twice what was touted last year, and only compounds the woes of U.S. manufacturer Boeing, whose 737 MAX planes have been grounded across the world this month, after two fatal crashes.
President Xi made the remarks when meeting with German Chancellor Angela Merkel at the closing ceremony of the Global Governance Forum in Paris on Tuesday..
Xi put forward three suggestions on China-Germany relations:
- Setting a model for global cooperation with China-Germany relations. The two sides will strengthen cooperation in artificial intelligence, new materials, new energy, smart cities, etc;
- Injecting more stable factors to global development with cooperation between China and Europe;
- Jointly maintaining multilateralism and improving global governance.
The world is undergoing major changes rarely seen in a century, and humanity stands at a crossroads, and for China, France and Europe, they also come to a critical stage of development, the Chinese president said.
"China is willing to work with France to inherit the past and create the future, enable our close and enduring comprehensive strategic partnership to continue leading the way, and make more historic contributions to building an open, inclusive, clean and beautiful world that enjoys lasting peace, universal security and common prosperity," Xi said.
Giulia Pompili ran across Yang Han, a Rome-based press officer for the Chinese embassy, during Xi's state visit to Rome this week, the Italian newspaper Il Foglio reported.
"A presidential official was accompanying the journalist in charge of Asia for our newspaper to the hall, and asked her for her name," the paper said of the March 23 encounter at Rome's Chirinale Palace, an official residence of the Italian president.
"She replied, and Yang looked at her saying, 'You have to stop saying bad things about China.'"
An executive at Huawei’s product launch in Paris said the P30 would go on sale with a starting price of 799 euros ($902), while the P30 Pro would have a starting price of 999 euros.
2. US-China Trade
CHANG: Let me ask you this. The U.S. is asking for fundamental structural changes to China's approach to its economy. For example, the U.S. doesn't want to compete against state-sponsored industries in China. How realistic is it that the Communist Party in China is going to change basically its model for doing business just because the U.S. is demanding it right now, especially by the end of next month?
LIGHTHIZER: No. Well, in the first place, you know, everything won't happen in a month, for sure that's true. But I think you have to start with the proposition that there are people in China who believe that reform is a good idea. And you have to believe that those people are at a very senior level.
I think he is referring to Liu He
So the kinds of things that we're asking for are not anti-Chinese at all. Protection of intellectual property is not anti-Chinese. Stopping people from forcing transfer of technology is not anti-Chinese. In fact, the reformers would say it's pro-Chinese. It will help their economy, not hurt their economy.
Comment: And this may be the ultimate irony of the pressure on China: If it agrees to everything the US wants it may ultimately strengthen the PRC economy and make it an even richer and more formidable competitor to the US
Imports may rise as high as 300,000 metric tons of pork in 2019, the people said. That amount would be 81 percent more than the 166,000 tons in 2017, before the trade dispute started. One of the people said the Asian nation may order 200,000 tons in the first half of the year alone.
Question: African Swine Flu taking its toll?
Li [Daokui] does not mince his words when it comes to US trade negotiators. The American trade envoys, especially US Trade Representative Robert Lighthizer, was a “team of barking dogs” who were “perceived to be overly aggressive, unnecessarily aggressive by the Chinese general public,” he said.
3. More on the suspension of Professor Xu Zhangrun
One of China’s most prestigious universities has suspended a law professor and placed him under investigation after he published a series of essays that warned of deepening repression under President Xi Jinping, he said on Tuesday.
Professor Xu Zhangrun, of Tsinghua University in Beijing, shot to prominence last year when he published a passionate essay in July that was a rare rebuke of Mr. Xi’s rule. The essay denounced Mr. Xi’s authoritarian tendencies as driving China back to closed, repressive politics that could prove disastrous for the country.
In a series of mobile phone messages, Professor Xu said that several Tsinghua University officials ordered him on Monday to stop all teaching and research and told him his pay would be cut drastically. He said a university “work team” would investigate him, focusing on the essays he had written since July. He said he was questioned for one and a half hours by the officials...
Professor Xu’s suspension could ripple beyond the leafy Tsinghua campus in northwest Beijing. The university is one of China’s most internationally reputable; it hosts many foreign academics, as well as Schwarzman College, founded by Stephen A. Schwarzman, a Wall Street financier.
Question: Why did it take so long for Xu to be suspended? And will any of the foreign institutions that have partnerships with Tsinghua speak out in defense of freedom of speech and academic freedom?
4. Committee on the Present Danger: China
A group of Washington policy advisers and former US government officials including Steve Bannon have revived a cold war-era advocacy organisation to take aim at China, which it called “an aggressive totalitarian foe”.
The Committee on the Present Danger (CPD) was first established in the early 1950s as a bulwark against the influence of communism in the US. The group disbanded after some leading members were drafted into the administration of Dwight Eisenhower, but in 1976 was reformed by US foreign policy hawks to counter the Soviet Union during the cold war...
The group’s vice-chairman Frank Gaffney, once a defence adviser to former president Ronald Reagan, said the committee hoped to “set the stage for a series of national debates about China” to address the threats the country posed.
Comment: A sign of the times. Anyone know who is funding it?
Founding members of the “Committee on the Present Danger: China”—a number of whom will be present at the press conference on Monday—include: Brian Kennedy, chairman; Frank Gaffney, vice chairman; Hon. R. James Woolsey; Dr. William Bennett; Kyle Bass; Steve Bannon; Mark Helprin; Pastor Bob Fu; Kevin Freeman; Dr. Peter Pry; Dr. Sasha Gong; LTG William Boykin; Hon. Ed Timperlake; Dr. Mark Schneider; Richard Fisher; Amb. Hank Cooper; Lianchao Han; Dr. Michael Waller; Capt. James Fanell, USN (Ret.); Col./Dr. Lawrence Sellin, USA (Ret.); Dr. Dan Blumenthal; Dr. Stephen Mosher; and Dr. Bradley Thayer.
The Committee on the Present Danger: China” is a wholly-independent and non-partisan effort to educate and inform American citizens and policymakers about the existential threats presented from the Peoples Republic of China under the misrule of the Chinese Communist Party. Its purpose is to explain these threats that range from: the PRC’s accelerating military buildup; its active information and political warfare that targets the American people and our business, political and media elites; cyber warfare; and, economic warfare.
5. North Korea
President Donald Trump last week intended to reverse sanctions imposed on two Chinese shipping companies accused of violating North Korea trade prohibitions -- until officials in his administration persuaded him to back off and then devised a misleading explanation of his vague tweet announcing the move…
The sanctions on the two Chinese shipping companies were the subject of a National Security Council principals meeting last week, according to two people familiar with the matter.
Robert Blair, a national security aide to White House Acting Chief of Staff Mick Mulvaney, warned that he didn’t think Trump would support issuing the measures. But National Security Adviser John Bolton, a North Korea hawk, disagreed and argued he knew Trump better than Blair, the two people said.
Comment: More conformation to Xi that he can believe nothing anyone in the US government other than Trump tells him
Ri Su-yong, the former North Korean foreign minister, reportedly arrives at China’s capital even as US negotiator Stephen Beigun is in town.
The appearance of both diplomats suggests a new mediating role for China in the next round of denuclearisation talks, analysts say
6. Chinese overfishing in Africa
The BBC investigates illegal and unsustainable fishing off the west coast of Africa to find out how one of the most fertile ecosystems on earth has been pushed to the brink.
7. A Chinese science fiction writer goes to Burning Man
This year, I also came here with a group of friends from all over the world and became a “virgin burner.” I had already learned about the so-called Ten Principles of Burning Man—but experiencing firsthand this miraculous feeling of order emerging from chaos proved to be remarkably different from the Chinese social experience of myriad rules and stringent controls. I had to spend several days slowly assimilating before I could savor the joy of this so-called “techno-hippie orgy.”.
I couldn’t help but feel curious about those Chinese entrepreneurs and investors who came in private jets from thousands of miles away. There was an entrepreneur training camp organized by the internet giant T———, and seventy startup owners were brought over by their investor, a leading Chinese venture capital company, M———. They hired a company to outsource their experience; this company set up expensive air-conditioned space-capsule tents and prepared large amounts of food, drinking water, and alcohol. One camp even had karaoke. But in the first four days, these luxuries, which were too high-end for traditional burners, sat untouched. Those Chinese guests only arrived, belatedly, on the fourth day. I heard that the most expensive slot for this camp cost $20,000, whereas a regular ticket for the Burning Man Festival cost only $425.
Because of Fan’s clout in the industry, the probe of her finances had incriminated many companies that were partnering with her on projects. Scores of films have been put on hold. “Everyone you can think of is dealing with taxes right now,” said Kwei, the producer. Many had either already been “invited for tea” at the tax bureau, or were awaiting their turn. Others were rushing to meet with their accountants, or were holed up in their offices reviewing past budget sheets. Victoria Mao, who runs a production company, told me that all of her projects had been put on hold just days earlier, after she received a call from the tax bureau asking her to self-audit. “We don’t have any time to go forward,” she said, “because we have to go back.”…
Fan, for her part, appears to be quietly plotting a comeback. Throughout the crisis, her production company never shut its doors. “Of course she lost a lot of money,” said Fang, the producer. “But she’s not completely depressed.” Fang and Li, Fan’s best friend and frequent collaborator, have been discussing future projects for their favorite star. When I asked Li why she would risk casting Fan, she told me that the anguish Fan has gone through would become the well she draws from. “Nobody can be a better actress than her,” Li said.
Business, Economy, Finance and Trade
China to further improve business climate focusing on weak links - Xinhua China will work harder this year for a more enabling business environment by tackling areas of weakness to better energize the market and stimulate social creativity, the State Council's executive meeting chaired by Premier Li Keqiang decided on Tuesday....The goal is to cut the time required for starting a business to within five working days and for companies to access electricity service to within 45 working days before the end of this year....It was also decided at the meeting to implement the principle of competitive neutrality, and overhaul the policies and measures that hamper the growth of private businesses or fail to treat domestic and foreign investors as equals. The fair competition review system will be implemented in all governments including and above the county-level before the end of this year.
Li: Foreign companies to be equals - China Daily Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars, said the foreign delegates to the forum have gained many new exciting insights, ranging from the planned measures, structural reform and fiscal reform to reforms in the manufacturing policy and financial sector through the China Development Forum. "All of this further strengthened our confidence in this great market," said Zetsche, who is also co-chair of the forum.
China's crackdown on Canadian canola expands as 2nd company, Viterra, has licence revoked | CBC News Canadian company Richardson International was hit by a similar ban earlier this month when the Chinese government declared it had found dangerous pests such as fungus in the company's canola, so it halted all shipments. Last week, the Canola Council of Canada announced orders from China had mysteriously dried up across a number of canola sellers. China's ban of Viterra is effective immediately.
Foreigners Dump Most China Stocks on Record as Rally Falters - Bloomberg Overseas investors net sold 10.8 billion yuan ($1.6 billion) of mainland shares Monday, the biggest single-day sale since the second exchange link with Hong Kong opened in December 2016, according to data compiled by Bloomberg. The Shanghai Composite Index joined a global rout on growth concerns, sliding 2 percent to close below the 3,100-point level it has been trying to overcome this month.
Top Huawei executive says not even Xi Jinping could compel it to help China spy in other countries - The Globe and Mail “Xi Jinping hasn’t come to us. And I have no idea if that will happen,” said Eric Xu, one of the rotating chairmen at Huawei. But if such a request were to arrive, “we would definitely not do it,” Mr. Xu said, citing Huawei founder Ren Zhengfei, who said he would sooner shutter the company – a Chinese corporate champion with 180,000 employees – than engage in overseas spying.
Credit Suisse: public surveillance in China may boost A.I. tech firms - CNBC The business of government surveillance in China might spawn the rise of a new growth area, a Credit Suisse analyst said on Tuesday. "I think China has one pretty big advantage — that they have a lot of data — part of it (is) because the government collects a lot of data," said Vincent Chan, head of China equity strategy at the investment bank.
Bitmain Hong Kong IPO Application Expires As Bitcoin Price Falls - Bloomberg The company will restart the listing application work at an appropriate time in the future, according to the statement. Bitmain also named Haichao Wang as its new chief executive officer, while co-founders Micree Zhan and Jihan Wu will remain directors of the company, Tuesday’s statement shows.
Yicai Global - Neuberger Berman, Fullerton Get First Foreign Permits to Give Investment Advice in China The two overseas private equity firms of Neuberger Berman Group and Fullerton Fund Management have become the first wholly-owned foreign enterprises approved to provide investment advisory services on China's mainland
Yicai Global - Chinese Local Govts Fully Open Bond Market to Retail, Smaller Institutional Investors Eight pilot banks in Zhejiang province and the city of Ningbo opened sales counters yesterday so that such investors can buy local government debt. Some quotas sold out within 10 minutes, while other banks also saw strong demand, Yicai Global learned.
State Council reforms approval system of construction projects - Gov.cn The reform will cover the whole process of approval, and will focus primarily on housing construction and urban infrastructure, the circular said. The circular said the time it takes to examine and approve should be reduced to 120 working days, and that the examination and approval system should be connected to related systems by the end of 2019, completing a national construction project approval and management system by the end of 2020.
Regulator Closes Loophole in Hot Corner of Bond Market - Caixin Most institutional investors will no longer be allowed to use multiple securities accounts to bid on newly issued convertible bonds in offline auctions, China’s securities regulator has announced.
Exclusive: HNA Casts Off Youngest Board Member as Tech Division Downsizes - Caixin HNA Group has let go of director Tong Fu, who also headed its technology unit, marking the former high-flyer’s latest adjustment amid a government crackdown on debt-heavy conglomerates. Several company sources told Caixin of the latest departure, the fifth change to the company’s 11-member board since the accidental death of co-founder Wang Jian in a fall in France last year
State Council takes measures to slash social insurance payment burden of firms - Xinhua According to the government work report delivered to the annual national legislative session earlier this month, China will cut the share of enterprise contributions to urban workers' basic old-age insurance from 20 percent to 16 percent, starting from May 1. To meet the requirement, the meeting required local governments to reexamine and lower the upper- and lower-limits of the social insurance base and extend the policy of reducing the premium rates for unemployment and work-related injury insurances for one more year, to April 2020.
Politics and Law
Former Cyber Czar Sentenced to 14 Years | China Media Project Lu Wei (鲁炜), the former head of the powerful Cyberspace Administration of China (CAC), an agency whose role he helped to shape after its formation in 2014 under the Central Cyberspace Affairs Commission (中央网络安全和信息化领导小组), was sentenced today to 14 years in jail for bribery.
Ex-Head of Chinese Firm’s Charity to Serve Three Years in Prison - WSJ Patrick Ho Chi-Ping was convicted in December on seven counts of bribery and money laundering associated with his work for a once-highflying Shanghai-based oil company, CEFC China Energy Co. He was also ordered Monday to pay a $400,000 fine. U.S. prosecutors alleged that while the head of CEFC’s charity arm, the 69-year-old surgeon-turned-politician used the organization’s affiliations with the United Nations to orchestrate payment of $2.5 million in bribes to two African leaders to win deals. The governments of those countries, Chad and Uganda, denied the U.S. government’s claims.
Former Chinese Diplomat and Head Of U.S. Operations For Chinese Construction Business Convicted Of Engaging In Forced Labor And Related Charges By A Federal Jury | USAO-EDNY | Department of Justice On Friday, March 22, 2019, following a three-week trial, a federal jury in Brooklyn returned a guilty verdict on all five counts against Dan Zhong, the head of U.S. operations of Chinese Liaoning Rilin Construction (Group) Co. Ltd. (also known as China Rilin) and U.S.-based subsidiaries, including U.S. Rilin, who was formerly a diplomat of the People’s Republic of China (PRC). The counts of conviction were conspiracy to provide forced labor, providing and benefitting from forced labor, concealing passports and immigration documents in connection with forced labor (also known as document servitude), conspiracy to commit alien smuggling and conspiracy to commit visa fraud. The jury also found as a sentencing enhancement that Zhong engaged in the alien smuggling for commercial gain. Today, the jury separately concluded that six properties where the forced labor victims worked, including a high rise building in midtown Manhattan and a mansion on Long Island, are forfeitable. Zhong’s co-defendant in the indictment, Landong Wang, is a fugitive, believed to be in the PRC...“Unlike Chinese Communist elites, Americans do not practice, condone or tolerate forced labor,” stated United States Attorney Donoghue.
坚持党对宗教工作的领导 持续推进我国宗教中国化--中国统一战线新闻网--人民网 During his inspection tour in Hebei, United Front head You Quan stressed Adhering to the Party's Leadership on Religious Work and Continuously Promoting the Sinicization of Religion in China
Foreign and Defense Affairs
In Philippines, support mounts for South China Sea ‘crimes against humanity’ case against Xi Jinping | South China Morning Post More than 25,000 people have signed a statement of support for former foreign secretary Albert del Rosario and former Ombudsman Conchita Carpio-Morales, who want the International Criminal Court to examine whether China has carried out ‘crimes against humanity’ They say the country’s artificial island building has caused extensive environmental damage and has blocked 320,000 Filipinos from their fishing grounds
Yicai Global - China Wraps Up Test on Its Most Powerful Space Rocket Engine China has successfully concluded a key test on the biggest thrust rocket engine ever developed in the country, state-owned China Aerospace Science and Technology said on its WeChat account today. The 500-ton kerosene-liquid oxygen engine will be used on the Long March 9 heavy-lift rocket and was designed by China Aerospace's Academy of Aerospace Propulsion Technology.
Major highlights of Boao Forum for Asia Annual Conference - People's Daily Online The annual conference, with the theme "Shared Future, Concerted Action, Common Development", will explore solutions to the current difficulties encountered by economic globalization, such as protectionism and unilateralism, as well as the common challenges faced by both Asia and the world.
Five years on, Xi's vision of civilization more revealing in an uncertain world - Xinhua Over the past two years, Xi's appeal has been incorporated into various documents, such as the UN Security Council resolutions, the UN Human Rights Council resolutions, the Qingdao Declaration of the Council of Heads of Member States of the Shanghai Cooperation Organization (SCO), and the Forum on China-Africa Cooperation Beijing Action Plan (2019-2021). David Gosset, founder of the Europe-China Forum, said China has been pursuing the concept of "Datong," or "the world of great harmony," since ancient times, and the idea of building a community with a shared future for mankind is a reinterpretation of "Datong" in the 21st century. With China's continuous development, the idea -- steeped in Chinese wisdom -- will definitely have a profound influence on the world, Gosset said.
Maps with boundary mistakes destroyed - Global Times Almost 30,000 incorrect world maps, with problems including rendering Taiwan as a country and wrong depiction of the Sino-Indian border, were destroyed by the customs authorities in Qingdao, East China's Shandong Province. A total of 803 boxes of the 28,908 wrong maps were seized and destroyed, the largest amount to be disposed of in recent years, according to a news conference jointly held by the Ministry of Natural Resources, Shandong's Department of Natural Resources, Qingdao Customs and other related government agencies in Qingdao late last week, a Qingdao newspaper reported.
China Pumps-in $2.2 Billion in Pakistan's Dwindling Forex Reserves - News18 China on Monday pumped-in USD 2.2 billion to cash-strapped Pakistan to shore up its close ally's foreign currency reserves and help avert a possible default on external debt payments. With the generous Chinese assistance, Pakistan has so far received a total of USD 9.1 billion in financial assistance packages from friendly countries during the current fiscal year, The Express Tribune reported.
慎用强制措施、限制出境 最高法谈如何保障台商合法权益-中国长安网 Jiang Qibo, director of the research section of the Supreme People's Court, said today that the Supreme Law has formulated some judicial measures aimed at protecting the legitimate rights and interests of Taiwanese businesses, such as strengthening the judicial protection of property rights of Taiwanese businesses, requiring people's courts at all levels to use compulsory measures cautiously according to law, seizing and freezing measures, and restricting exit measures.
Tech and Media
Catharsis on Taobao? Chinese 'All is Well' TV Drama Fans Are Paying Up to Scold the 'Su Family Villains' | What's on Weibo Various Chinese media report that the seller has had at least 300 customers over the past week who could “vent their anger” about the drama’s characters. The seller would open a chat window, displaying the photo and name of one of the three despised characters, and pretending to be them. He also displays a counter that shows how many times the characters have been scolded by customers.
JD sends staff on prison tour in anti-corruption initiative · TechNode Prison tours are a common anti-corruption tactic in China, though it is used more often by state or financial institutions, not tech companies. However, this is not JD’s first use of unconventional anti-corruption measures. JD employees were asked to report to the company the details of their spouses, direct relatives, extended relatives by blood within three generations and their spouses, and schoolmates, according to a leaked email that has gone viral on Chinese microblogging platform, Weibo. Though it was billed as a move for transparency in workplace promotions, it was aimed at curbing internal corruption, according to Chinese media.
‘Bohemian Rhapsody’ With No Gay Scenes? Censored Film Angers Chinese Viewers - The New York Times Asked why the gay content had been removed from the China release of “Bohemian Rhapsody,” a spokesman for 20th Century Fox, which produced the film, said in an email that the studio had no comment.
Society, Art, Sports, Culture, and History
Between 1969 and 1971, the U.S. National Reconnaissance Office deployed super-fast spy drones over China in an abortive attempt to spy on Beijing's nuclear program. The NRO on March 21, 2019 declassified scores of five-decade-old records documenting the development, deployment and termination of the "Tagboard" drone system.
Energy, Environment, Science, and Health
Scientists discover dinosaur-era bird fossil with unlaid egg - Xinhua The fossil represents a new species, Avimaia schweitzerae, belonging to a group called the Enantiornithes which was abundant around the world and co-existed with dinosaurs in the Cretaceous period. The incredibly well preserved fossil was discovered in Yumen City, northwest China's Gansu Province.
Top legislature to inspect enforcement of water pollution control law - Xinhua China's top legislature will send four teams of lawmakers to inspect enforcement of the water pollution control law in eight provincial-level regions across the country. The inspectors convened their first plenary meeting here Monday.
Jobs and Events
The Taiwan Relations Act and the Future of U.S.-Taiwan Relations - Su Chih-Hsuan (中文) - American Mandarin Society Join us Friday, March 29, from 2-3pm at the Stimson Center, for a presentation (in Chinese) from Su Chih-Hsuan (蘇志軒), a specialist from Taiwan’s Ministry of National Defense and visiting fellow at CSIS, on the Taiwan Relations Act and the future of U.S.-Taiwan relation
Camera Above the Classroom - Sixth Tone Jason is a 16-year-old student at Niulanshan First Secondary School in Beijing. He wears a pair of black-framed glasses and likes to read DC comics so much that he chose to use the name of one of his favorite characters for the sake of anonymity. If he hadn’t seen that image online, he wouldn’t have questioned the presence of the tiny white surveillance camera installed above his classroom’s blackboard. After all, Niulanshan never informed him — or any of its 3,300 other students — that facial recognition cameras were capturing their every move in class. In fact, it’s unlikely that the combined 28,000 students in the six other schools testing the same system know they are part of China’s grand artificial intelligence (AI) experiment.