Xi in Heilongjiang; Apple's new China worries; Raimondo and Huawei; G-20; Keith Zhai leaves the Wall Street Journal

Summary of today’s Essential Eight:

1. Xi goes to Heilongjiang - Xi is on an inspection tour of Heilongjiang, so far the short propaganda reports have shown him visiting villagers affected by the recent flooding, looking at damaged crops and the reconstruction of homes. There have been no reports that Xi visited the people around Beijing who suffered from the terrible flooding at the end of July into early August, flooding and destruction made worse in some places by the need to protect Xiong’an. There is also an unconfirmed claim on Twitter that Xi visited Harbin Engineering University and inspected a naval research institute.

2. 5 year legislative plan and ferment over the draft Public Security Administration Punishments Law - The National People’s Congress Standing Committee has issued its 2023-2028 five year legislative plan. The Public Security Administration Punishment Law draft is still very much in the news and under discussion on the PRC Internet, with experts weighing with concerns about areas of possible overreach.

3. More on the Huawei phone and Raimondo’s trip - As the Biden Administration and Congress start looking into the new Huawei phone, and US media like the Washington Post report on how much PRC media and netizens mocked Commerce Secretary Raimondo, is it possible that the trolling could be good for scoring cheap nationalist points but ultimately cause a lot more pain for Huawei and SMIC? Will the next meeting of the new export controls working group Raimondo touted as one of her achievements from her trip discuss whether/how SMIC violated US law to help Huawei make this new phone, and Huawei’s hyping doing so while Raimondo and her team were in China? To quote Rahm Emanuel: “I'm for a dialogue, but I'm also not for being, as my father would say, a schmuck”.

4. Broader iPhone restrictions? - Bloomberg reports that the ban on iPhones reported Wednesday by the Wall Street Journal and South China Morning Post is even wider than described in those two stories, that it will apply “far more broadly to a plethora of state-owned enterprises and other government-controlled organizations”. As I wrote in the Wednesday Sinocism “Rumors of such an order have been going around for a bit. I had heard it would apply to all government and SOE employees”. While it is not yet clear how broad and firm these reported bans are, Apple and its investors should be concerned as this ban may impact PRC sales of the forthcoming iPhone 15 models, and more importantly may be an indication that the confidence many had that Apple is able to navigate US-China tensions to avoid any material blowback could be increasingly misplaced. It certainly is nice timing for Huawei that they have a new 5G phone on the market as this news hits Apple, and right after Raimondo’s visit.