Xi in Macau; Debt; Surveillance; Tech and financial "wars"; Political football
There is still a lot more speculation than details about the phase one US-China trade deal. As I wrote Monday, I think the Chinese did concede more than the US because Xi wants to try to put a floor, however temporary and narrow it may be, under the rapidly descending trajectory of US-China relations.
However, I do not believe the deal will do much if anything to stop the US-China “technology war”, nor will it slow China’s efforts to decouple from its dependence on the US for certain core technologies, as discussed in item 5 below.
It will also not reduce the growing concerns in China that the US’ ultimate trump card may be the US-dominated global financial system, and that the US will not hesitate to play it to hurt China, as discussed in item 6 below.
Other things on my radar:
Xi Jinping has arrived in Macau for the 20th anniversary celebrations;
The debt mess is not getting better, with a warning from Ma Jun, an external adviser to the People’s Bank of China monetary policy committee, and a 100 Billion RMB bailout of Shandong’s Hengfeng Bank;
Politburo Standing Committee member Han Zheng went to the Ministry of Housing and Urban-Rural Development and reiterated that "housing is for living in, not speculation" and that real estate would not be used as a short-term stimulus for the economy;
The US State Department announced Tuesday afternoon that Special Representative for North Korea Stephen Biegun has added Beijing to his Asia trip and will visit tomorrow and Friday “to meet with PRC officials to discuss the need to maintain international unity on North Korea.”
Holiday schedule: There will be a newsletter tomorrow and next Monday, December 23, then I will be on vacation for the rest of that week. The week of December 30 there will likely 1 or 2 issues, depending on the news. China is also on holiday January and so it should be a relatively slow week, and I know many of you will be on vacation as well. I will return to the regular schedule January 6.
As you think about gifts this holiday season please consider Sinocism for someone in your life who should get smarter about China. It is a gift that will keep giving throughout the year. Thanks
The Essential Eight
1. Xi Jinping arrives in Macau
习近平抵达澳门 出席庆祝澳门回归祖国20周年大会暨澳门特别行政区第五届政府就职典礼并对澳门进行视察_CCTV
Xi's arrival in Macau gets the top 6 minutes of the Wednesday CCTV Evening News
中共中央政治局委员、中央书记处书记、中央办公厅主任丁薛祥，中共中央政治局委员、全国人大常委会副委员长王晨，中共中央政治局委员、中央军委副主席张又侠，全国政协副主席马飚等陪同人员同机抵达。国务委员兼外交部长王毅先期抵达。
President Xi meets Macao SAR chief executive - Xinhua
Chinese President Xi Jinping met with outgoing Chief Executive of the Macao Special Administrative Region (SAR) Chui Sai On here Wednesday, saying the central government fully acknowledged Chui's diligent work during his 10 years as the chief executive.
Eight years before Macau returned to Chinese rule in 1999, Beijing sent at least a dozen mainland legal experts to Portugal to learn the language and legal system so they could take top government posts in the gambling hub.
It is a story that has long circulated in Macau political circles and among those familiar with the former Portuguese colony, but never confirmed.
Now a source with direct knowledge has told the Post that the episode helped ensure a successful transition after the return of the city, which has had a smoother post-handover era than Hong Kong, which was given back by the British two years earlier...
The source said the group included Macau’s current security minister Wong Sio-chak, prosecutor general Ip Son-sang, five prosecutors and three judges; as well as disgraced former prosecutor general Ho Chio-meng who was jailed for 21 years in 2017 for crimes including money laundering. The identity of one more person remained unclear.
One goodie for Macau - China's central bank lifts yuan transfer limits for Macau - Reuters
The People's Bank of China said on Wednesday it would raise the daily limit on individuals' remittance from Macau to yuan accounts CNH=D3 CNY=CFXS in Mainland China to 80,000 yuan from 50,000 yuan.
In Macau, China Sees a Model for a Rebellious Hong Kong - The New York Times
In Macau, more than half of the population was born on the mainland; millions more come to gamble in the city’s casinos, making them a driver of the economy. Government buildings all fly the Chinese flag. Schools use the mainland’s textbooks. No one boos the Chinese national anthem, as protesters regularly do in Hong Kong.
Most important, Macau’s political leaders have adopted laws that curb dissent, including one in 2009 that made subversion against the Chinese state a crime. In Hong Kong, similar legislation was derailed by protests in 2003 but remains an overriding priority for the party...
When reunification approached, Portugal granted citizenship to anyone born in Macau before 1982 and their relatives. Those who balked at Chinese rule could leave for Portugal, or another European Union country. But in Hong Kong, residents received a special British passport that stopped short of citizenship
Xi Jinping Thought charts course for SARs' growth - China Daily
Fully and faithfully implementing the principle of "one country, two systems" — a pioneering vision that has been developed further by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era — holds the key to the long-term prosperity and stability of the Hong Kong and Macao special administrative regions, officials and experts said.
2. Debt mess
China Central Bank Adviser Warns on Debt Chain Reaction - Bloomberg
Ma Jun, an external adviser to the People’s Bank of China monetary policy committee, said in an interview with Securities Times published Wednesday that the government could allow so-called local-government financing vehicles with strong fundamentals to take over weaker counterparts including those in other provinces...
The authorities should take steps as soon as possible, due to the risk of “compound” effects among LGFVs, Ma said. A local government investment arm in Inner Mongolia narrowly escaped a bond default this month, ending yet another scare that could have shaken belief in Beijing’s support for such borrowers.
Ma’s comments come as market participants are debating whether China’s leadership is easing up on its multi-year deleveraging drive amid a slowing economy.
The interview with Ma - 马骏：建立系统性金融风险干预机制_证券时报网
Chinese State Investors Help Another Troubled Regional Lender - WSJ $$
China’s sovereign-wealth fund is coming to the aid of a troubled lender in a 100 billion yuan ($14.28 billion) bailout, the latest show of government support for the banking sector, which has come under intensifying financial stress as the economy slows.
Hengfeng Bank, based in eastern China’s Shandong Province, will sell 100 billion shares at a valuation of 1 yuan per share, almost all of them to government-backed investors, according the bank and one of its backers.
China Liquidity Jitters Are About to Test Bond Market Again - Bloomberg
The country will see a “liquidity hole” of 2.8 trillion yuan ($400 billion) in January, in large part because people across the nation will withdraw cash for the Lunar New Year holiday, according to Guotai Junan Securities Co. That means bond traders expect the central bank to unlock funds to avoid the liquidity-driven panic seen in October, when the benchmark 10-year yield spiked the most in six months.
Explainer: Behind the climb in Chinese companies' defaults on bond payments - Reuters
If defaults by state firms in China are rare, defaults on their borrowings from international investors are rarer still. But China’s offshore debt market, with close to $76 billion in bonds outstanding according to Refinitiv data, is showing pockets of stress.
S&P has warned risks are set to grow as more than $200 billion of debt in the offshore market will mature over the next two years, up from $89 billion in 2019.
Troubled companies include Tianjin-based commodities trader Tewoo Group, which according to Moody’s Investors Service became the first major SOE to miss a payment on and restructure an offshore bond in two decades in late November.
Many of its investors appeared to have fled, taking haircuts of 40% to 60% rather than opting for Tewoo’s offer to exchange that debt for new bonds, according to a company filing and an analysis by S&P.
Peking University Founder Group, a holding company tied to one of China’s top universities, is scrambling for funds after failing to repay an onshore bond on time on Dec. 2.
No repayment within the grace period - which sources say ends on Friday - will trigger $2.95 billion of cross-defaults in the offshore market, Nomura has warned.
Question: Offshore defaults are much more problematic for Beijing. Who will be the first holder of a defaulted offshore bond to decide to challenge the issuer's restructuring plan in a court outside of the PRC? It probably will not be any big institutions, as they have other China business that could suffer, but there will inevitably be a small fund(s) who decides to push back. That will be interesting to watch.
China vulture funds feast as corporate defaults rise | Financial Times $$
Most vulture funds buy in after issuers show clear signs of distress but before they miss any payments. A small number of investors are bolder, buying bonds that are already in default and thus at a very low price — as low as 10 cents on the dollar — in the hope of an imminent government bailout.
“The value of junk bonds doesn’t depend on credit analysis,” said Larry Hu, an economist at Macquarie Group in Hong Kong. “It depends on the likelihood of a government bailout.”
3. An academic reminder that the Party leads everything
Demand for Absolute Loyalty to Beijing at Chinese Universities Triggers Dissent - WSJ
References to academic independence and freedom of thought were stripped out of the charter of Shanghai’s prestigious Fudan University, long-considered one of the country’s most liberal academic institutions.
Substituted were references to “serving the governance of the Communist Party” and “dedication to patriotism,” according to a notice posted on the website of China’s Ministry of Education...
“If we do not speak out today about such a blatant challenge to the bottom line of education and academic ethics, I am afraid we will never have the chance,” said Lu Xiaoping, vice-president of the literature school at Nanjing University—another university whose charter was rewritten—in a Weibo post on Wednesday that was also later deleted. Shaanxi Normal University, in northwestern China, was the third university to have its charter altered.
By Wednesday afternoon, a hashtag discussing Fudan University’s charter changes had been viewed more than 1.7 million times on Weibo, before being censored by the evening.
The MoE notice - 教育部关于同意复旦大学章程部分条款修改的批复 - 中华人民共和国教育部
China’s Fudan University students in flash mob for freedom of thought | South China Morning Post
A video clip of the flash mob at Fudan – a relatively liberal college and one of China’s most prestigious – went viral on Chinese social media. The clip has since been censored as debate over the change to the institution’s charter has continued to intensify. The Fudan song’s lyrics have also been widely shared on the internet...
References to the university’s core values, such as academic integrity, encouraging students to pursue the virtues of unity, servitude and sacrifice, have been replaced with “patriotic contribution”, while “free thinking” and “academic independence” have been removed from the second clause. The university’s commitment to “respect and protect academic freedom” has been retained, but downgraded to clause 18.
“For people who are willing to praise the current leadership, it’s the best time to be working. But if you really want to do real research and have independent thoughts, it’s tough,” said Peidong Sun, a sociologist who teaches at Fudan. “But this might not be the toughest time. In five years, we might look back on 2019 and say that this was just the start.”
Professor Sun also tweeted:
As I asked in yesterday's newsletter, will every university make similar revisions, and what will this mean for Western institutions' cooperation with them?
4. US-China trade
“We’ve now gotten to the point where we have a very good phase one agreement and we’re going to find out whether or not it works,” U.S. Trade Representative Robert Lighthizer told FOX Business’ Maria Bartiromo exclusively.
“Is this agreement going to solve all the problems between the United States and China? No, for sure not, but it has real, real structural change,” he said.
US-China Trade War Tariffs: An Up-to-Date Chart | PIIE
The terms of the phase one deal announced on December 13 between the Trump administration and China have established new US tariffs toward imports from China for the foreseeable future. Average US tariffs on imports from China will remain elevated at 19.3 percent, even after the deal is implemented, which is currently expected for February 2020. These tariffs are more than six times higher than before the trade war began in 2018.
At the moment, what is known about China's tariffs is that they will not increase above their current rates that average 21.1 percent. However, it seems likely that the details of the phase one deal may include China cutting its tariffs on US exports
A two-day policy-setting conference was concluded in Beijing this week, on the heels of an agreement with Washington announced on Friday. And while the Ministry of Commerce (Mofcom) statement outlined “six priorities, plus one”, including “properly dealing with China-US trade disputes”, there was not a single mention of the deal, nor did the ministry expand on that aim...
the ministry said it would focus on the Belt and Road Initiative, developing pedestrianised shopping areas in Chinese cities, rolling out home appliances to rural homes, an import expo in Shanghai in November 2020, the development of free ports, and poverty reduction.
But maybe not a big deal, the article quotes Huo Jianguo, former president of the Ministry of Commerce's Chinese Academy of International Trade and Economic Cooperation as saying:
Huo added that phase one would not be implemented until after the official signing and the text has been made public. “This was just a normal remark, nothing new,” Huo said, of Mofcom’s statement.
5. Trade deal will not stop “technology war”
Tech Shudders as U.S. Weighs New Limits on Huawei Sales - Bloomberg
Industry associations representing U.S. chipmakers, software companies and manufacturers have written to Secretary of Commerce Wilbur Ross in recent weeks arguing against the changes, according to copies obtained by Bloomberg News. They urge President Donald Trump’s administration to at least hear them out before introducing tougher rules to close what U.S. officials consider loopholes letting American companies keep working with Huawei...
Some U.S. companies have continued selling to Huawei even after the blacklisting, citing rules that limit the government’s ability to restrict exports. De minimis provisions exempt certain products if companies can prove the majority of work done to create the items happens outside the U.S. The current threshold effectively kicks in when 75% of the work occurs overseas. The administration is considering raising that to 90%, and broadening the list of products, people familiar with the discussions said. The change could come as soon as January, added the people, who asked not to be identified discussing policy deliberations.
China opposes U.S. abuse of export control measures: spokesperson - Xinhua
China urges the U.S. to do more to promote mutual trust and cooperation between the two countries, not the other way around, spokesperson Geng Shuang told a press briefing.
He said the United States is too self-righteous to believe that its restrictions on emerging technology exports to China can prevent China's technological innovation.
U.S. restrictions, interference, sabotage and blockades will not affect China, said Geng, adding that temporary setbacks will only inspire the Chinese people's intelligence and boost their morale.
With or without Huawei? German coalition delays decision on 5G rollout - Reuters
Social Democrat (SPD) lawmakers on Tuesday backed an internal proposal that, if adopted by the government, could effectively translate into shutting out Huawei. Lawmakers said their goal was nevertheless to reach a common position with Merkel’s CDU/CSU group.
“I think we will have a solution in January,” said SPD lawmaker Jens Zimmermann. “We will have a common blueprint and it will be considerably more severe.”
Congress Orders Probe of Satellite Loophole China Exploited - WSJ $$
Congress ordered the Commerce Department to examine a loophole in federal law that has allowed China’s government to use U.S.-built satellites to support its police and military, following an investigation by The Wall Street Journal.
The National Defense Authorization Act—a defense-policy bill passed Tuesday by the Senate and earlier by the House—instructs the Commerce Department to investigate the national-security implications of the current system and make recommendations on potential new export rules to prevent China from using U.S. satellites.
The U.S. effectively bars China from buying U.S. satellites outright. But a Journal article April detailed how Chinese companies, backed by their government, devised a workaround in which offshore firms legally purchased U.S. satellites, then leased their bandwidth to mainland Chinese entities.
6. Nor will it stop fears of a “Financial War”
Look Out: Some Chinese Thinkers Are Girding for a “Financial War” - POLITICO - Julian Gewirtz
The largest problems facing U.S.-China relations, from emerging technology to the crisis in Hong Kong, remain unresolved. And a careful reading of the conversation inside China suggests that the next front line of the U.S.-China conflict may already be taking shape, with an ominous name: Financial war.
Many members of the Chinese elite, even longtime advocates of market reform and economic opening, see a dark future for U.S.-China relations—and they are increasingly focused on America’s global financial hegemony as a long-term risk for their country. They’re indicating, subtly but unmistakably, that they see global finance as a rising theater of conflict, and are considering new ways for China to defend itself and even to retaliate.
Comment: This talk of “financial war” is no surprise to Sinocism readers...
When considering any of these steps, U.S. policymakers need to anticipate not simply the immediate Chinese reaction but also map out the longer-term consequences. Simply put, they must decide whether it is really in the U.S. interest to drive China to search more aggressively for ways to subvert or escape the U.S.-dominated financial system—even if China would struggle mightily to do so.
Comment: As with technology, the Chinese are intensifying their efforts to reduce reliance on the "U.S.-dominated financial system". Those efforts may fail, but the lesson of the last three years is that the PRC has become far too reliant and dependent on the US, and I do not think there is anything current or future US policymakers can do to change that view. Beijing's best hope is to negotiate its way to more time to reduce its reliance on the US-dominated system.
7. Surveillance
A Surveillance Net Blankets China’s Cities, Giving Police Vast Powers - The New York Times
Chinese authorities are knitting together old and state-of-the-art technologies — phone scanners, facial-recognition cameras, face and fingerprint databases and many others — into sweeping tools for authoritarian control, according to police and private databases examined by The New York Times.
Once combined and fully operational, the tools can help police grab the identities of people as they walk down the street, find out who they are meeting with and identify who does and doesn’t belong to the Communist Party...
This build-out has only just begun, but it is sweeping through Chinese cities. The surveillance networks are controlled by local police, as if county sheriffs in the United States ran their own personal versions of the National Security Agency.
By themselves, none of China’s new techniques are beyond the capabilities of the United States or other countries. But together, they could propel China’s spying to a new level, helping its cameras and software become smarter and more sophisticated.
Comment: Interesting story, will definitely get a lot of attention, surprised it did not mention the broader context for this, specifically the "modernizing of social governance" that is getting an even stronger push under Xi, or social governance innovations like "grid management 网格化管理”
Background: China under the grid - China Media Project
Earlier this month, in a piece called “A Rock Star’s Fengqiao Experience,” we looked at the recent arrest of celebrity Chen Yufan (陈羽凡) and how this affair, apparently unlinked to the politics of Xi Jinping’s so-called “New Era,” is in fact disturbingly reflective of it. We can link the Mao-era “mass line” notion of the “Fengqiao experience,” which Xi Jinping has revived over the past five years, to new and intrusive forms of social management. But these trends in social management also pre-date the Xi era.
One of the key terms relevant to this “social management system,” or shehui guanli zhidu (社会管理制度), is the notion of a “gridded community management system,” or wanggehua guanli tixi (网格化管理体系). But where does this idea of “grid management,” wanggehua guanli (网格化管理), come from?
In fact, “grid management” first appeared in Shanghai in 2004.
The December 9 newsletter “Politburo meeting; The "Fengqiao Experience" and modernizing governance; Technology decoupling” discussed "modernizing social governance" in the wake of the 4th Plenum:
Reading Chen's piece with the ones last week on the "Modernization of municipal social governance 市域社会治理现代化" work conference and I think we are starting to get a picture of how more control is coming, as part of the ever intensifying efforts to harden the system against "risks" and social dissatisfaction. Those efforts include many positive steps to improve people's lives, but they also include even more invasive and empowered security services.
Mao without the crazy, but with much better technology and capabilities?
My last period living in Beijing was 2005-15, and it used to drive me nuts when people would describe the PRC as "totalitarian". There was a lot of repression but it was far from totalitarian, as the system had neither the technological capabilities or the political will. That has changed in Xi's New Era, between the reassertion of the Party's leadership over everything, the focus on controlling and preventing risks, the further unleashing of the security services and the political need of those within them to prove loyalty and usefulness to Xi, technological advances and the huge amounts of money being thrown into the surveillance industrial complex.
8. Political football
FC Cologne pull out of deal to run football academy in China | The Guardian
The deal, which was going to be worth €1.8m (£1.5m) to the club, was originally put on hold in the summer and on Wednesday Cologne said they would not go ahead with it...
Stefan Müller-Römer, who was a member of the board until the summer and is back in his previous role on the club council, was more forthright, telling KSA: “I understand that Germany can’t completely get by without China and that there is an exchange between the two countries but we don’t need China in sport and I stand by that.
“In China human rights are being massively disregarded. A complete surveillance state is being built, one worse than even George Orwell could have imagined. I have followed developments in China for more than 20 years and I have been there several times. I know what I am talking about.”
Özil’s comments sparked a huge backlash in China, with some fans burning his jersey. NetEase, which publishes PES games in China, posted on Weibo that Özil will be removed from three existing mobile games under the PES (Pro Evolution Soccer) franchise, including the highly popular PES 2020 Mobile. The company said Özil’s comments had hurt the feelings of Chinese people and that it doesn’t “understand, accept, or forgive” the player’s behavior.
Mike Pompeo backs Mesut Özil in criticism of China's Uighur persecution | Football | The Guardian
“China’s Communist Party propaganda outlets can censor Mesut Özil and Arsenal’s game all season long, but the truth will prevail,” Pompeo tweeted. “The CCP can’t hide its gross human rights violations perpetrated against Uighurs and other religious faiths from the world.”
Global Times' Hu Xijin responded to Pompeo's tweet:
Business, Economy and Trade
Chinese vice premier Han Zheng stresses stable property market, sustainable urban development - Xinhua China's property market is generally stable at present, which has not come easily. Maintaining stability in the market is important to the steady and healthy development of the economy, he said. The country should stick to the principle that "housing is for living in, not speculation" and must not take real estate as a short-term stimulus to the economy, he said.
韩正强调 贯彻落实中央经济工作会议精神 坚持稳字当头 做好住房和城乡建设工作 CCTV Evening News on Han’s comments
Hundreds of Property Developers Filed Bankruptcy in 2019, Raising Concerns of Homebuyers Losing Out - Caixin As of Nov. 27, 459 real estate companies had filed for bankruptcy this year, which is slightly more than the 458 bankruptcy filings seen in the whole of 2018, according to data calculated by property market research institute China Real Estate Information based on public court records.
今年全国房地产调控次数已达575次 房企生存压力不减 CBN reports that Centaline Research says there have been 575 instances of real estate control measures in 2019, up from 450 in 2018, and that the pressure on real estate firms is not going to lessen any time soon
把党领导经济工作的制度优势转化为治理效能--时政--人民网 Page 1 People's Daily commentary on Wednesday - "translate the party's institutional advantage in leading economic work into governance effectiveness".
An excerpt: "To turn the party's institutional advantage in leading economic work into governance effectiveness, we must make vigorous efforts to do so. We must recognize that strengthening the party's leadership over economic work does not mean doing everything. Instead, we need to manage and discuss major issues, and give full play to its role in directing, managing and implementing the overall situation. We need to improve the party's ability and level of leading economic work, improve the ways and methods of leading economic work, follow the laws of economic and social development, and strengthen research on major issues of economic and social development. We need to optimize economic governance from the perspective of system theory, coordinate the positioning and functions of different departments and policies in the country's economic governance system, strengthen the overall view, prevent one from losing the other, seek dynamic balance among multiple objectives, and achieve systematic optimization in high-quality development. We need to make macro-control more forward-looking, targeted and effective, keep a scientific and steady hand on counter-cyclical macro-policy adjustments, be good at turning external pressure into a powerful driving force for deepening reform and opening wider to the outside world, and concentrate on running our own affairs well."
中央经济工作会议“四个坚持”定调2020年经济工作--理论-人民网 Central Party School economics professor Zhou Yuehui writes in the People's Daily Online theory channel that the "four persist ins" from the Central Economic Work Conference set the tone for 2020. the four are:
坚持稳中求进工作总基调 persist in the overall tone of seeking progress while maintaining stability;
坚持新发展理念 persist in the new vision for development;
坚持以供给侧结构性改革为主线 persist in supply-side structural reform as the "central theme";
坚持以改革开放为动力，推动高质量发展，坚决打赢三大攻坚战，全面做好‘六稳’工作 persist in taking reform and opening up as the driving force, promote high-quality development, and resolutely win the three major battles to ensure the "six stabilities" in all respects
Exclusive: Banks Set to Win Second Delay to Deadline for Asset Management Overhaul - Caixin Analysts at Zhongtai Securities, a Shandong province-based brokerage that offers asset and wealth management services, sent a message to clients on Tuesday that the deadline for compliance will be extended for three years to the end of 2023, Caixin has learned. Several sources close to the central bank and the China Banking and Insurance Regulatory Commission (CBIRC) told Caixin that the note was inaccurate and incorrect, but did not elaborate. Neither agency has commented publicly on the brokerage’s claim.
Financial burden on firms eases - China Daily About 26 percent of more than 6,100 surveyed companies said they feel less of a financial burden this year, compared with a figure of just 14 percent feeling that way last year, the report released by the China Centre for Promotion of SME Development said. At the same time, 45 percent of the surveyed companies said they have a relatively heavy financial burden this year, but this is down from 57 percent last year, the report showed.
China's automobile market may recover by 2022 - ECNS Decline in China's auto market will likely reverse by 2022, with 4-percent growth starting 2023, China Association of Automobile Manufacturers (CAAM) predicts. The drop in the auto market will continue in the short term, with negative or flat growth until 2021, according to data.
China’s Box Office Total Breaks All-Time Record – Variety The Chinese box office has broken its all-time yearly record, with local films accounting for eight of the top 10 movies so far in 2019 and a few more anticipated releases yet to come. The previous record total, set last year, of RMB60.7 billion – $8.67 billion at current conversion rates – was overtaken last Friday, according to data from online ticketing agency Maoyan.
China Oil Refiners Risk Iraq’s Wrath With Rare Kurdish Buys - Bloomberg China’s independent refiners are buying oil from Iraq’s semi-autonomous Kurdistan region as they scour the globe for cheaper crude to cope with margins near record lows
JPMorgan wins approval for majority-owned Chinese securities business | Financial Times $$ The regulator’s decision makes JPMorgan the first US bank to gain approval for a majority-owned securities joint venture in China, concluding a lengthy process with the group having originally applied for permission to do so in May 2018. The bank did not disclose details of who the minority Chinese partner will be.
Politics and Law
上海重要人事调整 上述报道显示，原任江苏省委常委、省纪委书记、省监委主任的蒋卓庆，已接替殷一璀担任上海市人大常委会党组书记。//Zhejiang Provincial Discipline Commission Party Secretary Jiang Zhuoqing is now the Party Secretary of the Standing Committee of the Shanghai Municipal People's Congress
操场埋尸案宣判 党报:绝不容英雄埋地下魔鬼在人间_网易新闻 death sentence for the convicted murderer in the case of the body buried under a Hunan school track for many years...People's Daily weighs in on the verdict, says "we will not tolerate heroes buried in the ground and demons walking among us". This case has become a propaganda poster child for the ongoing crackdown on organized crime and local officials who protect/participate
China to promote nationwide standardization of transparency in primary-level government affairs - Xinhua A host of steps in this respect were adopted on Wednesday during the State Council's executive meeting chaired by Premier Li Keqiang. "Government affairs at the primary level are closest to the daily lives of the people. We must do a better job in making primary-level government affairs open by promoting the standardization of the practice, making sure that disclosure of decision-making information will be the norm," Li said.
From Tibet to Xinjiang, Beijing’s man for restive regions Chen Quanguo is the prime target of US sanctions | South China Morning Post Chen was also quick to hitch his wagon to the president. In February 2016 when he was the party chief of Tibet, he was among the first to speak of Xi as the “core” of the party leadership, a term that elevated Xi’s status among party leaders. A month later, Tibetan delegates attending the National People’s Congress in Beijing showed up sporting lapel badges with Xi’s picture, a clear echo of the Mao Zedong era. One now retired official said the badges raised eyebrows among senior leaders including Yu Zhengsheng, then chairman of the Chinese People’s Political Consultative Conference. Yu took Chen aside and told him the gesture was inappropriate. “Chen only replied it was a spontaneous act by the delegates … but the fact is he was rewarded [for it],” said the official, who didn’t wish to be named.
Foreign and Defense Affairs
Special Representative Biegun’s Travel to Beijing - United States Department of State Following his December 15–19 trip to Seoul and Tokyo, Special Representative Biegun will travel to Beijing December 19–20 to meet with PRC officials to discuss the need to maintain international unity on North Korea.
Crossed Wires - Recalibrating Engagement with North Korea for an Era of Competition with China | Center for a New American Security - Kristine Lee, Daniel Kliman and Joshua Fitt This paper begins with an assessment of how negotiations with North Korea since June 2018 have shaped Washington’s relationships with its allies in Northeast Asia. The second section examines the ways in which China undermines the United States’ influence in Northeast Asia—through targeting its alliance system and coopting North Korea’s economic future to advance its vision for the region. It concludes with a set of recommendations focused on four major lines of effort. The United States has significant opportunities, particularly through cleverly leveraging its key allies in the region, to bring into closer alignment diplomacy with North Korea and its competitive approach toward China
China Withdraws Request For UN Security Council Discussion On Kashmir - PTI French diplomatic sources had previously said that Kashmir will not be discussed in the Security Council on Tuesday. "Our position has been very clear: the Kashmir issue has to be discussed bilaterally. We have highlighted this several times recently, including in the UN," a source said.
Senior Chinese military official meets Japanese defense minister - China Military General Xu Qiliang, Vice Chairman of China's Central Military Commission (CMC), met with the visiting Japanese Defense Minister Taro Kono in Beijing on Wednesday.
Czech cybersecurity chief's firing not related to dispute with China's Huawei - Axios "The move to recall the director was personal," said the source. "It's the relationship with the prime minister," not the agency's operations or policies, that resulted in Navratil's dismissal. "This didn't come as a surprise," the source added.
KU to close controversial Confucius Institute in January 2020, interim provost says | kansan.com The University of Kansas made the decision to close its controversial Confucius Institute after a federal law dictated no Department of Defense funding can be allocated toward universities that have Confucius Institutes, according to an email from the Office of the Provost Monday morning.
China as an Atlantic Naval Power: The RUSI Journal: Vol 164, No 7 China is in the process of becoming an Atlantic naval power, Ryan D Martinson argues. Since 2014, the activities of the Chinese navy in the South Atlantic have evolved from port visits and largely symbolic joint exercises to independent operations at sea. This helps the Chinese navy to gain familiarity with the operating environment, so that it can effectively respond when called on by civilian leaders to protect China’s growing interests in the region. China’s increased naval presence in the South Atlantic may also reflect a shift in Beijing’s strategy for countering perceived threats from the US military in the Western Pacific.
Malaysia reinstates China Railway for $30bn Kuala Lumpur project - Nikkei Asian Review In a revised deal signed on Tuesday and witnessed by Mahathir, the consortium will be sold a 60% stake in Bandar Malaysia for the unchanged price of $1.79 billion. However, it will need to pay an upfront deposit of $299 million -- an increase on the $179 million stipulated in the original agreement. The staggered payment term has also been shortened from the original seven years to three years, for "the benefit of the Malaysian government".
Paulson Is Concerned About Militarization of U.S. View of China - Bloomberg Hank Paulson, chairman and founder of the Paulson Institute and former chief executive officer of Goldman Sachs Group Inc., talks about how he grew the bank's business in China and his views on current U.S.-China relations. He appears on "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded Oct. 2 in Washington
Hong Kong and Macao
Why Hong Kong’s pro-Beijing camp may have to get used to losing | South China Morning Post In a new series, the South China Morning Post looks at the road ahead for Hong Kong and the challenges its people can expect to face.
U.S. Response to Unrest in Hong Kong | Podcast - Center for Strategic and International Studies In this episode, Jude Blanchette invites Ambassador Kurt Tong to discuss the U.S.’s response to the continued turmoil in Hong Kong, including the passage of the Hong Kong Human Rights and Democracy Act of 2019.
Tech and Media
Yicai Global - Nvidia, Tencent to Launch Joint Cloud-Gaming Service Nvidia's central processing units will support the Shenzhen-based firm's game platform, Jensen Huang, Nvidia's chief executive, stated at the GPU (graphics processing unit) Technology Conference held today in Suzhou, Jiangsu province.
Society, Arts, Sports, Culture and History
Netizens Irate After Girls-Only Education Fund Spent on Boys - SixthTone On Tuesday, a netizen who claimed to have donated to the Spring Bud Project called out the charity after she checked the status of her donation on financial services platform Alipay and noticed that nearly half of the funding recipients at one school were male. “I always thought Spring Bud only helped girls,” the netizen wrote on microblogging platform Weibo, adding that the shock had been like “a blow to the head.”