Xi supports SOEs and private firms, Self-reliance; Trump-Xi bromance broken?; Allegations of PRC meddling in US elections; quest for EV dominance; Xinjiang

Apologies for the late newsletter, like much of America I have been riveted by the Kavanaugh-Ford hearings. 

Today's important China-related developments include:

• On the third day of his Dongbei tour Xi stressed the importance of and support for both SOEs and private enterprises;

• President Trump has said he and Xi may not be friends anymore;

• Trump's charges of Chinese interference in US elections look to be part of the rollout of a broader public campaign against Chinese activities that target US interests;

• China's role as key supplier in American's opioid crisis is getting more media and Congressional attention;

• The propaganda system is pushing the “six stabilities” – employment, finance, foreign trade, foreign investment, investment, expectations (六稳 – 就业，金融，外贸，外资，投资，预期) – to stabilize society in the face of the trade war.

Yesterday's "Essential Eight" included the Global Times story New CPC rules to expel members who express support for bourgeois liberalization online. I should have noted that rules against "bourgeois liberalization" have been in the previous versions of the regulations. It is interesting that the Global Times chose to highlight it. 

The annual National Day Holiday starts next week, so China will effectively be on holiday for 10 days. I will not publish every day next week unless there is significant news. 

Thanks for reading.

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The Essential Eight

1. Xi expresses support for both SOEs and private firms

Xi vows for better legal environment for private enterprises - CGTN:

The Chinese president reinforced China's firm adherence to its basic economic system, with public ownership playing a dominant role and diverse forms of property developing side by side. Thus, he hopes to see private enterprises prosper while making sure the development of state-owned companies.

He added that CPC's leading role towards state-owned companies should be upheld and any down-playing voices and thoughts towards state-owned companies are wrong.

Video of his comments  独家V观｜习近平：党中央毫不动摇地支持民营经济发展

During his visit Xi emphasized that thoughts and speech questioning and badmouthing SOEs are wrong, while also saying the Party Center unswervingly supports the private economy...--习近平：怀疑、唱衰国企的思想和言论都是错误的 党中央毫不动摇地支持民营经济发展--人民网: 

27日上午，习近平总书记来到中国石油辽阳石化公司考察。他强调，我们的国有企业要继续做强做优做大，那种不要国有企业、搞小国有企业的说法、论调都是错误的、片面的。我们实行公有制为主体、多种所有制经济共同发展的基本经济制度，这一点毫不动摇。任何怀疑、唱衰国有企业的思想和言论都是错误的。坚持党对国有企业的领导，必须一以贯之；国有企业建立现代企业制度，也必须一以贯之。我们要沿着这条路笃定踏实地向前推进。

I wonder if this tour will lead into the national SOE conference that the South China Morning Post reported earlier this month would be held in late September?:

Two sources have confirmed to theSouth China Morning Post that the conference will be chaired by China’s top economic adviser and will showcase Beijing’s strong support for state-owned enterprises (SOEs). Washington’s strong objection to the prominent role of SOEs in the Chinese economy is at the heart of the trade conflict.

Vice-Premier Liu He – President Xi Jinping’s top economic adviser and chief trade negotiator with the US – is expected to urge China’s state enterprises to “make breakthroughs in key aspects” of cutting-edge technologies and call on them to “take a leading role at the front” of the country’s drive to make technological progress, according to one source involved in the planning for the conference.

President Xi Jinping inspects Liaoning - Xinhua:

Chinese President Xi Jinping, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, shakes hands with workers during his visit to China National Petroleum Corporation (CNPC) Liaoyang Petrochemical Company in Liaoyang, northeast China's Liaoning Province, Sept. 27, 2018. Xi started an inspection tour in Liaoning on Thursday.

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2. Xi on self-reliance

Xi stresses nation's self-reliance - China Daily:

President Xi Jinping underlined the importance of self-reliance in food security, the real economy and manufacturing on Wednesday as the country faces rising unilateralism and trade protectionism internationally.

Xi, also general secretary of the Communist Party of China Central Committee, said during a field inspection to Heilongjiang province that unilateralism and trade protectionism are forcing China to take a path of self-reliance, which, he said, “is not a bad thing”.

It is becoming increasingly difficult to gain access to leading technologies and key technologies internationally, and China will ultimately rely on itself, Xi said.

As a major country of close to 1.4 billion people and with an area of 9.6 million square kilometers, China should rely on itself in key areas, he said.

In Qiqihar, Xi inspected facilities of China First Heavy Industries and a subsidiary of China Railway Rolling Stock Corp on Wednesday morning.

Xi noted that the country is closer than ever to making its two centenary goals a reality. Yet the last leg of a journey can be the most demanding part, and it has never before met so many challenges and difficulties as now.

Equipment manufacturing is the pillar of the nation as well as an important component of the real economy, he said. It is important for the sector to leverage its strengths, seize opportunities to become stronger, do better and grow bigger...

He stressed the importance of ensuring China’s food security so that the country can always control its own food supply.

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3. Downward trajectory for US-China relations

Donald Trump admits friendship with China's Xi Jinping could be over - The Straits Times

...asked at a press conference in New York how Xi could remain his friend given the hike in tensions, Trump indicated that he preferred to be respected than liked.

"He may not be a friend of mine anymore but I think he probably respects me," said the president, who said the US economy was easily weathering the impact of the trade dispute

Comment: They never were friends, but Trump believing they were seems to have provided some restraint on US policies. IS that restraint now gone?

US-China ties sour as Xi, Trump friendship fades - AFP:

"If (Trump) thinks that he and Xi are no longer friends, then there could be a whole different level of deterioration in the US-China relationship far beyond trade," Bill Bishop, publisher of the Sinocism China Newsletter, told AFP...

Bishop said the trade war has prompted China to look for quick ways to reduce its dependency on a range of US goods and services.

Xi appears to have seized on his government's limited options, with China Daily running a story on Thursday about his visit to a farm where he stressed the importance of "self-reliance" in food security and manufacturing in the face of trade protectionism.

The Chinese would still prefer some sort of deal that is basically a delaying action so that it mitigates some of the current intensifying tensions," Bishop said.

But, he added, "whatever compromises or whatever short-term deals are reached, they're going to be a band-aid on a much bigger problem that is only going to get worse over time".

A relevant excerpt from Fear: Trump in the White House: 

"In foreign affairs, it was about personal relationships, Trump explained to those who spent the most time in the Oval Office. “I have really good relations with Xi,” he said about the Chinese president. “We have really good chemistry. Xi likes me. Xi rolled out the red carpet when I visited Beijing.” In November 2017, he had said publicly, “I consider him a friend. He considers me a friend.” H. R. McMaster tried to explain that Xi was using the president. China was an economic aggressor, planning to become Number One in the world. Trump said he understood all of that. But all of those problems were superseded by his rapport with Xi." 

Trump’s ‘Meddling’ Claim Plays Into China’s Trade Narrative, Analysts Say - WSJ $$:

In the past, the U.S. and China have tried to keep military, trade and other issues separate to avoid having conflict in one area undermine the larger relationship. The U.S. now appears to have abandoned that idea and is applying pressure across the board, said Zhu Feng, an international relations expert at Nanjing University.

“This is a very clear signal. The attacks from Trump are in a large sense a wake up call,” Mr. Zhu said. “The Americans are not treating you the way they used to. That means China can’t continue to think about problems with the U.S. in the traditional way.”

China, US military ties may be in a downward spiral ‘for a long time’ | South China Morning Post:

In the past, military exchanges between the two sides have continued through diplomatic ups and downs, but the latest tensions – which come on top of the trade war – could make it difficult to get relations back on track, according to Shi Yinhong, an international relations expert at Renmin University in Beijing.

“China and the US are facing their most serious diplomatic confrontations and crisis in decades, and their military relations will be affected for a long time,” he said.

China demands U.S. 'dispel obstacles' to military ties and stop slander | Reuters:

Defence ministry spokesman Ren Guoqiang told a monthly briefing that the United States should take steps to improve military relations and expressed China’s firm opposition to “provocative” U.S. air force flights over the South China Sea, after U.S. B-52s flew in the vicinity of the waterway this week.

He even hinted a planned visit to the United States later this year for Defence Minister Wei Fenghe could be in doubt.

U.S. flies bombers over South China Sea amid heightened tensions with Beijing | Reuters:

Lieutenant Colonel Dave Eastburn, a Pentagon spokesman, said that B-52 bombers transited over the South China Sea as part of “regularly scheduled operations designed to enhance our interoperability with our partners and allies in the region.”

Such flights are common, but usually upset Beijing. In June, China’s foreign ministry said no military ship or aircraft could scare China away from its resolve to protect its territory after U.S. B-52 bombers flew near disputed islands in the South China Sea.

A recent propaganda directive I have seen had a section that directed media to focus on covering the “six stabilities” – employment, finance, foreign trade, foreign investment, investment, expectations – to stabilize society in the face of the trade war (六稳 – 就业，金融，外贸，外资，投资，预期). All state media have now started doing pushing that the today.--精准施策看“六稳” 前八个月工业经济增长快于年初预期_CCTV 

Trump Says Michael Pillsbury Is 'Leading Authority' on China - Bloomberg:

U.S. President Donald Trump gave a shout-out Wednesday to “the leading authority on China,” sparking a flurry of Google searches as viewers raced to identify him.

“If you look at Mr. Pillsbury, the leading authority on China,” Trump told a press conference in New York Wednesday, “he was saying China has total respect for Donald Trump and Donald Trump’s very, very large brain.”..

Turns out Trump didn’t get Pillsbury’s flattery exactly right, but he was close: The leadership in Beijing considers Trump superior to the last “five or six” presidents, Pillsbury told Tucker Carlson on Fox News in August. Trump, he said, is “so smart,” he’s “playing three-dimensional chess.”

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4. Trump's election meddling charge

China pushes back on Trump's claim of Chinese interference in upcoming U.S. election - CGTN:

China's State Councilor and Foreign Minister Wang Yi responded at the same meeting, pushing back against allegations of election meddling saying, "We do not and will not interfere in any countries' domestic affairs. We refuse to accept any unwarranted accusations against China, and we call on other countries to also observe the purposes of the U.N. charter and not interfere in other countries' internal affairs."

Comment: Wang Yi seems to have forgotten Charlie Trie, Johnny Chung et al and the meddling in the 1996 elections…and in 1996 China had far less money and far fewer of agents of influence who could be used to meddle than they do now...

From the background briefing by a "senior administration official” on Chinese interference":

China’s Communist Party and government conduct a variety of malign interference activities in the United States and around the world. They employ a whole of government approach using political, economic, commercial, military, and informational tools to benefit the interests of the Chinese Communist Party.

These so-called "United Front" activities are conducted in ways that go well beyond how most countries interact with one another through normal diplomatic, economic, and security engagement. The activities have reached an unacceptable level.

Some examples of the ways that China is actively interfering in our political system include hurting farmers and workers in states and districts that voted for the President because he stood up to the ways that China has taken advantage of our country economically.

China punishes or rewards businessmen, think tanks, movie studios, journalists, religious leaders, and even political candidates depending on whether they criticize or support China's polices.

China spends billions of dollars on propaganda here and throughout the world, crowding out or even posing as independent news sources. Its intimidation from cyber bullying to threatening phone calls from embassy officials stifle free speech on U.S. college campuses, targeting administrators, professors, and even Chinese students who want to talk about their good experiences in the United States.

Chinese news organizations that have long pretended to be legitimate and normal news organizations are now, in an overdue step, being required to register under the Foreign Agents Registration Act. And we're in the process of declassifying more information, also, in advance of a speech that Vice President Pence will be delivering later this month...

...the types of activities include that point about targeting certain districts and states with tariffs but go beyond that. And there will be more over time that we’ll be sharing about that.

So, on that note, the Vice President will be making remarks next week at the Hoover Institute and he’ll be speaking about this directly and in more detail.

China Blasts U.S. Over Trump's Allegations of Election Meddling - Bloomberg:

“We urge the U.S. to stop smearing and accusing China,” Foreign Ministry spokesman Geng Shuang said at a briefing Thursday. “China has all along followed the principle of non-interference and refuses to accept any groundless accusations.”..

Trump’s remarks about Xi came three days after China placed an advertising supplement in Iowa’s largest newspaper attacking his trade policies.

The advertisement had been in accordance with U.S. law that allows the cooperation of foreign and American media, said Geng, the foreign ministry spokesman. He said that categorizing the action as Chinese interference in the U.S. election was “far-fetched and false.”

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5. Technology theft

The Wall Street has produced a devastating story on state-directed technology theft. Ignore what officials say, watch what they do...

How China Systematically Pries Technology From U.S. Companies - WSJ:

DuPont Co. suspected its onetime partner in China was getting hold of its prized chemical technology, and spent more than a year fighting in arbitration trying to make it stop.

Then, 20 investigators from China’s antitrust authority showed up.

For four days this past December, they fanned out through DuPont’s Shanghai offices, demanding passwords to the company’s world-wide research network, say people briefed on the raid. Investigators printed documents, seized computers and intimidated employees, accompanying some to the bathroom...

Interviews with dozens of corporate and government officials on both sides of the Pacific, and a review of regulatory and other documents, reveal how systemic and methodical Beijing’s extraction of technology has become—and how unfair Chinese officials consider the complaints.

China’s tactics, these interviews and documents show, include pressuring U.S. partners in joint ventures to relinquish technology, using local courts to invalidate American firms’ patents and licensing arrangements, dispatching antitrust and other investigators, and filling regulatory panels with experts who may pass trade secrets to Chinese competitors.

China to introduce more measures to facilitate foreign investment - Xinhua:

The Chinese government places high importance on foreign investment facilitation. Premier Li has emphasized on many occasions the pledge to widen market access, accord equal treatment to Chinese and foreign companies, more effectively protect intellectual property rights, and better facilitate foreign investments in China.

It was decided at the Wednesday meeting that an online filing process will be introduced in regulating foreign investment in China. Unified market access criteria will be applied to both Chinese and foreign investment in areas outside of the negative list.

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6. Chinese fentanyl in America

Following the drug fentanyl's deadly trail back to China - ABC News:

As for the raw fentanyl powder, Komisar said his client was able to easily find a website willing to sell fentanyl online.

“He did the research on the internet and discovered that he could literally go online and find fentanyl from China,” said Komisar. “They were in a U.S. postal service box. They were packaged and sent directly to his home.”

Like Falkowski, authorities says counterfeit pill makers all around the country are going online and receiving their supplies of fentanyl via U.S. mail from China. Chinese fentanyl is coming into the U.S. through ports of entry like John F. Kennedy’s International Mail Facility...

When "20/20" went online to inquire about purchasing fentanyl, we found numerous Chinese websites willing to sell to us, no questions asked. We were quoted prices ranging from $1,200 to $1,600 for 250 grams of raw fentanyl -- enough to make thousands of counterfeit pills.

ABC News correspondent Bob Woodruff was even able to speak directly via Skype to a representative of one of the sites, a woman who called herself “Lucy.” Lucy sent Woodruff video of what she said was raw fentanyl powder made by her company’s factory. She said the product was “guaranteed” to make it through customs, sending us photos of the vacuum sealed foil packages she said the fentanyl would be mailed in.

Fox News - China's fentanyl exports targeted in bipartisan opioid bill: 

A bipartisan bill aimed at curbing the nation’s crippling opioid epidemic would make U.S. aid for fentanyl-producing countries like China contingent on drug investigation cooperation. The Blocking Deadly Fentanyl Imports Act, put forth by U.S. Senators Pat Toomey (R-Pa.) and Doug Jones (D-Ala.), would also require the State Department to identify nations that are major producers of fentanyl in its annual report on narcotics trafficking.

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7. Xinjiang and the crackdown on Islam

China’s Muslim Detention Camps Spark Protests in Islamic World - WSJ $$:

Muslim groups in India and Bangladesh held protests over the Chinese camps for the first time this month after former inmates began to talk publicly about their treatment, including being bound to chairs for hours on end and forced to renounce Islamic beliefs.

In Kazakhstan, many people were also outraged, and local lawyers and activists say hundreds of people have lobbied their government for help, following the detention of several Kazakh citizens and many more ethnic Kazakh Chinese nationals in the camps.

Hizb ut-Tahrir, an Islamist group that claims a million members in 40 countries, called on Muslims this month to be wary of Chinese investment and to oppose Chinese rule in Xinjiang.

On Saturday, the group accused Pakistan’s government of betraying the Uighurs for the sake of China’s infrastructure program in the country, known as the China-Pakistan Economic Corridor, or CPEC.

Video of yesterday's Congressional hearing, witnesses were Adrian Zenz, Nury Turkel and Justin Jacobs - Subcommittee Hearing: China’s Repression and Internment of Uyghurs: U.S. Policy Responses - Committee on Foreign Affairs:

Chairman Yoho on the hearing: “The Chinese Communist Party (CCP) is executing a horrific campaign against religious and ethnic minorities in China’s Northwest, involving systemic religious and cultural oppression, mass internment in ‘re-education’ centers, and the creation of a dystopian high-tech police state. The dire situation in the Xinjiang region has been described as ‘cultural genocide’ and ‘ethnic cleansing.’ To pursue a disturbing and distasteful vision of ‘ethnic harmony,’ the Party has criminalized the Muslim faith of the Uyghurs, formerly the region’s majority population. A state-driven internal colonization effort has reduced the concentration of Uyghurs in the area, and government incentives promote intermarriage with majority Han Chinese. Everyday people are subjected to an invasive and oppressive security program, involving forced genetic sampling, AI surveillance, a heavy militarized police presence, and drastically reduced information, communications, and travel. Astoundingly, at least hundreds of thousands, and as many as millions of people are being detained in rapidly-growing concentration camps. This hearing will provide Members an opportunity to discuss these atrocities with experts on the situation in Xinjiang, receive an update on the latest developments, and discuss policy options.

Ningxia renames river to back Chinese culture - Global Times:

Aiyi, the old Chinese name for the river in Northwest China's Ningxia Hui Autonomous Region, sounds to some people like the Arabic word "Ayishah," said Wang Genming, a researcher at the Ningxia University institute of Hui studies. In 2017, Hui Muslims made up 36 percent of the region's population.

Ayishah was also one of Prophet Muhammad's wives, Wang told the Global Times.

The Ningxia government has changed the river name to "Diannong" after an on-the-spot exploration and discussions among experts, according to the Ningxia Daily news website, citing the Ningxia civil affairs bureau.

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8. China's quest for EV dominance

Wan Gang will loom larger than Elon Musk when the history of electric cars is written - Bloomberg:

Elon Musk made a name for himself promoting new-energy vehicles, but when the history of the electric car is finally written, Wan may loom larger. Chinese drivers buy one of every two EVs sold, and the global auto industry is pivoting to adjust. It’s a revolution fomented by Wan, a former minister of science and technology whose achievements are even more extraordinary when you consider that he never joined the Chinese Communist Party.

“He’s the father of China’s electric-vehicle industry,” said Levi Tillemann, a former U.S. Department of Energy adviser and author of “The Great Race: The Global Quest for the Car of the Future.” “Without Wan Gang, it’s unlikely China would have pushed to surpass the West. That was his big idea.”

Wan, 66, who stepped down in March and now holds an academic post at a Beijing-based think tank, currently isn’t giving interviews, his office said.

China's Plan to Dominate the Global Electric Vehicle Supply Chain | Center for Advanced China Research:

In 2013, China overtook Korea to become the world’s largest manufacturer of lithium-ion batteries for electronic devices. More recently, Chinese battery manufactures have also capitalized on the rapid growth in demand for electric vehicles (EV). Within the past five years Chinese EV battery producers have become major battery suppliers in the global EV industry supply chain (see Figure 1).

The growth of the EV battery industry has followed in the wake of overseas acquisitions of natural resources by Chinese firms. China is not only motivated by securing access to resources, but also by improving its position global supply chains. Dominating the global supply of rare earth minerals such as cobalt is key to Beijing’s ambitious plan to reshape the global battery market, ensuring that China is well situated to benefit from rising global demand for electric vehicles. Under the leadership of President Xi Jinping, China plans to become an indispensable component of the world's electric vehicle supply chain.

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Business, Economy, Finance And Trade

China eases up on winter smog fight as it battles American trade war headwinds | South China Morning Post: China will be less severe with its smog curbs this winter as it grapples with slower economic growth and a trade war with the United States, according to a government plan released on Thursday. Instead of imposing blanket bans on industrial production in the Beijing-Tianjin-Hebei area as it did last winter, the Ministry of Ecology and Environment said it would let steel plants continue production as long as their emissions met standards. Targets for overall emissions cuts have also been revised down. In the next six months, 28 cities in northern China are required to cut levels of PM2.5 – the tiny airborne particles that are most harmful to human health – by about 3 per cent from a year ago. That is less than the 5 per cent cut proposed in an initial plan seen by the South China Morning Post last month.//京津冀及周边地区 2018-2019 年秋冬季大气污染综合治理攻坚行动方案 

China's Nexen plans Gulf of Mexico oil exit amid trade war - sources | Reuters: Nexen Petroleum, a unit of China’s CNOOC Ltd, plans to exit the United States, divesting its stake in giant oil and gas developments in the Gulf of Mexico as trade tensions between two countries mount, three people familiar with the plan told Reuters on Wednesday

HNA Unit Sells Beijing Office Building for Debt Relief - Caixin Global China Vanke, a leading property developer, will acquire all of Hainan Airlines’ stake in Beijing Guosheng Property Management Co. Ltd., according to a filing by Shanghai-listed Hainan Airlines. The HNA unit said the deal will generate net income of 557 million yuan. Beijing Guosheng was set up in June as a vehicle to facilitate HNA’s asset disposals. Its main asset is the HNA Plaza in northeast Beijing’s Chaoyang District. The building, which was acquired by Hainan Airlines in 2008, hosts the headquarters of several HNA subsidiaries.

Profit Growth Indicates China’s Industry Under Strain From Trade War - Caixin Global In a note, ING economist Iris Pang pinned the slowdown in industrial profit growth on the trade war. “We would like to explore alternative factors affecting industrial profits in China, but it is difficult to find an excuse not to blame the trade war,” Pang wrote. There is some evidence that state-owned enterprises (SOEs) are picking up the slack for industrial companies hit by the trade war. SOE profits rose 26.7% between January and August compared with the same period last year, with mining and metal companies in particular experiencing strong growth.

China plans to launch iron ore options in 2019 - source | Reuters China aims to launch iron ore options next year, a source with direct knowledge of the matter said, as the world’s top buyer of the steelmaking raw material looks to offer more hedging tools to iron ore producers and steelmakers.

Economic Watch: China's industrial structural adjustment proceeds, profit growth slows - Xinhua Profit growth of major industrial firms slowed to 16.2 percent in the first eight months of 2018 from a rise of 17.1 percent for the January-July period, data from the National Bureau of Statistics (NBS) showed Thursday. Profit at 34 of the 41 sectors surveyed rose compared with one year earlier, up from 32 for January-July.

New Chinese SUV Has A Hot Japanese Schoolgirl For Holographic Assistance - CarNewsChina.com This hot Japanse schoolgirl is a holographic assistant in the new Bestune T77, a mid-size SUV from China. It is not a Photoshop, this thing is for real. The “holographic intelligent control system” comes with three characters, and five sets of clothes for each.

Chinese Banking Giant Issues $1.3 Billion in Securities on a Blockchain - CoinDesk Bank of Communications, one of the four state-owned commercial banks in China, has completed a major issuance of residential mortgage-backed securities (RMBSs) using a blockchain network. China Securities Times, the mouthpiece of Chinese financial regulators, reported on Thursday that the banking giant issued a total of 9.3 billion yuan (or around $1.3 billion) worth of RMBSs via its proprietary blockchain network, Jucai Chain.

China Renaissance, Dealmaker to Tech Stars, Plunges in Debut - Bloomberg The firm’s shares fell as much as 19 percent in early trading on Thursday, another first-day flop for the city alongside Xiaomi Corp.’s debut. Only one company had a poorer showing in Hong Kong this year, reflecting the fact that China Renaissance’s close ties with the tech industry -- clients include Meituan Dianping and Didi Chuxing Inc. -- wasn’t enough to lure buyers.

Bitmain IPO Filed In Hong Kong: Jihan Wu, Micree Zhan Open Books - Bloomberg Here are some highlights from Bitmain’s filing: Profit rose almost ninefold to $742.7 million in the first half from a year earlier Revenue rose about 10-fold to $2.8 billion in same period

In KFC’s China Ads, Nuggets Are Served With Patriotism - The New York Times Last week, KFC introduced an advertising campaign in mainland China celebrating 40 years of “reform and opening up,” the catchphrase that defined the era. A two-minute TV spot that aired on state television showed two Chinese celebrities traveling back in time by railway, seeing streets filled with bicycles and bamboo scaffolding.

London-Shanghai Stock Link May Start December, China Media Says - Bloomberg A system that will allow Chinese and U.K. companies to list in each other’s stock market could begin as early as Dec. 3, according to Chinese state-run media, a long-awaited step in the Asian nation’s move to open up its financial system.

FTSE Russell to Add Chinese Stocks to Its Indexes From 2019 - Bloomberg The shares will be included in three stages from June, FTSE Russell, a unit of London Stock Exchange Group Plc, said in a statement. The plan means that China A shares will comprise about 5.5 percent of the FTSE Emerging Index, representing initial net passive inflows of $10 billion of assets under management, the company said. FTSE will also add Chinese government bonds to its watch list for possible inclusion into indexes.

 

Politics, Law And Ideology

Informants in the Chinese Classroom | China Media Project  Discussants on social media then started digging, and exposed the various “informant systems” (信息员制度) in place at universities. In fact, they realized, universities in China had organized teams of student informants as early as 2008. Ferreted out by one user, a document from the Hunan University of Commerce showed that this was characterized as “intelligence work” (情报信息工作) that was “secretive in nature” (具有隐秘性). It was also paid work. Generally, student informants would receive between 20 and 50 yuan for providing a single piece of information, and for information regarded as more critical they could be paid 200 yuan.

全方位推进党内法规制度体系建设（人民要论）---人民网 - 宋功德 Song Gongde, director of the laws and regulations bureau of the Central Committee General Office, on page 7 of the 9.27 People's Daily on "Promote the construction of the system of laws and regulations within the party" 

Four CPC members awarded posthumous honorary title for bravery and sacrifice - Xinhua  Three of the honored CPC members worked for the 760 Research Institute of the China Shipbuilding Industry Corporation, and the other was a militia member who spent 32 years guarding an island post. Huang Qun, born in May 1967, Sun Yuecai, born in January 1957, and Jiang Kaibin, born in December 1956, gave up their lives to protect a national experimental platform against a typhoon on Aug. 20. Wang Jicai, who used to be head of the militia post on Kaishan Island in east China's Jiangsu Province and secretary of the Party branch of Kaishan Island village, started working on the island in the Yellow Sea with his wife in 1986. He died of sudden illness while on duty in July at the age of 58. // 中共中央关于追授黄群 宋月才 姜开斌 王继才同志“全国优秀共产党员”称号的决定_CCTV

Top legislator stresses Xi's thought in advancing people's congresses system - Xinhua Li, chairman of the National People's Congress (NPC) Standing Committee, made the remarks at a symposium on the study and implementation of the important thoughts of Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, on upholding and improving the system of people's congresses. Such work should also be conducted under the centralized, unified leadership of the CPC Central Committee with Comrade Xi at the core, Li said at the event, which was held Wednesday and Thursday in Shijiazhuang, capital of north China's Hebei Province.

Socialist core values & Chinese judicial interpretations | Supreme People's Court Monitor I write on socialist core values and Chinese judicial interpretations with some trepidation.  Not because I have trouble deciphering socialist core values, but because the two documents core to the analysis are available in summary form only, as at least one source has mentioned that the SPC document is classified. This blogpost is based on those summaries, primarily on the summary provided by Supreme People’s Court (SPC) Research Office (研究室) head Jiang Qibo of its five-year work plan (2018-2023) to incorporate fully socialist core values into judicial interpretations (关于在司法解释中全面贯彻社会主义核心价值观的工作规划（2018-2023).)  in 2015 the SPC had issued a general document on socialist core values.

Prosecutor Panned for Congratulating Itself on Rape Mediation - SixthTone In an article published on social app WeChat last Wednesday, the public prosecutor of Lushan County, Henan province, said it had received a pennant of gratitude from the mother of a 16-year-old boy who was accused of raping a 17-year-old girl. The boy was arrested in July but released on bail pending trial in September after the two families reached a reconciliation agreement mediated by the prosecutor. “Under the advice of the prosecutor, the parents buried the hatchet,” read the article, which enumerated the prosecutor’s efforts to negotiate with the parents. It added that the suspect’s family had paid the victim’s family 80,000 yuan ($11,600) in compensation.

 

Foreign and Military Affairs

Japan, China planning Abe-Xi summit on Oct. 24 in Beijing - The Mainichi Japan and China are preparing for an official meeting between Prime Minister Shinzo Abe and President Xi Jinping on Oct. 24 in Beijing, sources familiar with bilateral ties said Thursday. Abe is scheduled to make a three-day visit to China from Oct. 23, which falls on the 40th anniversary of the coming into effect of a bilateral peace and friendship treaty.

China-Japan-SK FTA key to ‘Asia for Asians’ - Global Times-Ding Gang As the major engine of the global economy, China, Japan and South Korea will create a vast strategic market through the FTA, with 21 percent of the world's population, 23 percent of the GDP and 20 percent of the global trade. Integrating economic benefits will lead to greater political and economic stability and prosperity in East Asia. China, Japan and South Korea are Asia's most important economies. Economic and trade relations between the three countries have never been so close and they have formed a production chain and a trade chain that can affect the whole world.

US, Japan agree to negotiate a free trade agreement - Washington Post It’s a significant shift by Tokyo which has been a strong advocate of a multi-nation trans-Pacific trade pact that President Donald Trump withdrew from soon after taking office. Trump made the announcement after meeting with Japanese Prime Minister Shinzo Abe in New York on the sidelines of the U.N. General Assembly. He said that Japan had been unwilling in the past to enter into such talks, but now is and such a deal “will be something very exciting.

Yonhap - China may send top official to N. Korea for Oct. 10 party anniversary The sources in Beijing speculate that another member of the Standing Committee of the Political Bureau of the Communist Party of China will likely visit North Korea in time for the Oct. 10 anniversary. They also don't rule out the possibility of a surprise visit by Xi to the North next month.

China Sees Mixed Results in Quest for Indo-Pacific Air Access - War on the Rocks Previously obscure Indian Ocean fishing villages such as Hambantota, Gwadar, and Kyaukpyu have suddenly been transported into the glare of international media attention as China, India, and others compete for control over ports across the region. But competition over critical infrastructure isn’t just confined to the maritime realm. In fact, access to airfields is just as essential to allow military aircraft to cover the vast distances across the Indian Ocean. This is why China and its competitors are paying ever more attention to securing access to airfields and to deny access to others. As a “new” power in the Indian Ocean, China has the biggest need to secure air access to fulfill multiple strategic imperatives. It needs staging points for evacuations or other operations to protect Chinese nationals, and for maritime air surveillance in support of its naval presence.

Russia to China: You Shouldn't Have Stolen Our Jet Fighter | The National Interest Remember that Russian carrier-based jet that China copied without permission? Those airplanes are crashing, and Russia doesn't seem too broken up about it. Though Russia and China are now friends, even holding joint exercises, Russia's Sputnik News recently trotted out an article titled "Chinese Navy Short on Carrier-Based Fighters, Only Has Problem-Ridden J-15. "

Chinese embassy rejects second Swedish apology for satire on tourists | South China Morning Post The apology appeared in a blog post on Wednesday by a programme manager for Sweden’s national broadcaster Sveriges Television (SVT). The post addressed imagery aired on Friday in a satirical video listing dos and don’ts for Chinese tourists, which the Chinese embassy described as racist. But the embassy said on Thursday the statement from programme manager Thomas Hall was “insincere and hypocritical”.

Kissinger’s historic China policy: A retrospective | TheHill Previously, the Nixon initiative was described as (A) protecting China from a Soviet attack, (B) beginning the isolation of Taiwan and (C) opening China to Western trade and investment — all objectives of Beijing. In return, the United States expected (A) China’s help in arranging a graceful exit from Vietnam, (B) a reduction in Beijing’s anti-U.S. animus and (C) serendipitously, an easing of relations with Moscow. Notwithstanding Kissinger’s positive evaluation of the results, China achieved all three of its objectives and the U.S. got none of what it wanted. Not a sterling diplomatic accomplishment, then, and the policies Kissinger has espoused since have only made more inevitable “the key problem of our time.”

Chinese top legislator visits Vietnamese embassy to mourn late President Tran Dai Quang - Xinhua Chinese top legislator Li Zhanshu on Thursday went to the Vietnamese embassy in Beijing to mourn the passing away of Vietnamese President Tran Dai Quang. Li, chairman of the National People's Congress (NPC) Standing Committee, paid the visit entrusted by Xi Jinping, general secretary of the Central Committee of the Communist Party of China (CPC) and Chinese president and on behalf of the CPC Central Committee and the Chinese government.

 

Hong Kong, Macao

PLA's Hong Kong Garrison creates Weibo account - China Military "This is a Sina Weibo account that can give people a chance to know more about the PLA Hong Kong Garrison. You can see the 'hormonal' exercises conducted by the military personnel…and many good-looking sisters and brothers. In short, you can see a different Hong Kong and different PLA Garrison here," the account said.

WeChat Opens Wallet to Mainland-Bound Hong Kong Travelers - Caixin Global Gaming giant Tencent Holdings Ltd. will allow Hong Kong users of its popular WeChat-based payment service to make some purchases on Chinese-mainland-based platforms, seeking to broaden its appeal in one of its first overseas markets. Tencent made the move in partnership with China’s UnionPay, whose global electronic transaction settlement network will be used to complete the transactions, the companies announced on Wednesday.

 

Tech And Media

SoftBank in Talks to Invest in Bytedance — The Information $$ The new round of financing could value Bytedance at as much as $75 billion, according to people familiar with the discussions, making it one of the most valuable venture-backed startups in the world. It’s in talks to raise around $1.5 billion in fresh equity investments, with $1.5 billion in bonds raised earlier from previous investors converting into equity as part of the transaction. The talks are still ongoing and a deal may not be signed.

New Chinese Laws to Hit Streaming, Broadcasting of Foreign Content | China Law Blog If implemented in their present form, the provisions will seriously impact the streaming and broadcasting of foreign motion picture and TV content. These provisions are part of a process of increasing regulation of foreign content that began in 2014. One of the stated objects of this process is to support the domestic Chinese entertainment industry and to improve domestic program standards. One of the effects of the process will be to reduce foreign access to the Chinese market.

China's ride-hailing industry has nine big problems, government says · TechNode Together, the nine issues paint a picture of China’s ride-hailing industry in fairly broad strokes. They were gathered over the course of a government-led inspection that began on September 5. And although the last point seems aimed directly at industry giant Didi, the survey of ride-hailing companies was a comprehensive one, covering competitors Shouqi, UCAR, Caocao, Yidao Yongche, Meituan, Dida, and more, CCTV reported.

Briefing: Chinese regulator suspend ifeng.com's services over "illegal" information · TechNode The Cyberspace Administration of China (CAC) has ordered Phoenix New Media’s news portal ifeng.com to shut down its technology channel for a month and suspend its general news, financial news, mobile website, and app for two weeks. The internet regulator said the site had “disseminated illegal and harmful information, distorted news headlines and shared news information in violation of rules”, and ordered it to undergo “thorough and in-depth rectification”.

 

Society, Art, Sports, Culture And History

Over 300 Children Sent to Hospital after Eating Expired Food in Kindergarten, Netizens Express Disbelief | What's on Weibo After eating expired rice vinegar, rice full of insects, and spoiled chicken legs at kindergarten, more than 300 children were sent to hospitals in Anhui and Jiangsu last week. The latest food scandal has led to disbelief among netizens.

China #MeToo: Why one woman is being sued by the TV star she accused - BBC News In July, China's entertainment world was faced with the allegation that one of the country's biggest and most beloved TV stars had forcibly groped and kissed an intern after she took a basket of fruit to his room. Zhu Jun, known for hosting national television extravaganzas such as the Spring Festival Gala, immediately denied the accusation and proceeded to sue her for damaging his reputation and mental wellbeing. The woman, known by her online moniker Xianzi, was finally told on Tuesday that the case will be heard in Beijing's Haidian district court.

 

Energy, Environment, Science And Health

Scientists Look to Chinese Soup Ingredients to Treat Dementia - Bloomberg: The resulting blend of ginkgo biloba, ginseng and saffron extracts, called Sailuotong or SLT, is due to enter a late-stage study in Melbourne this month, and a larger clinical trial to validate its impact is slated to begin in China later this year...“If we’re successful in treating vascular dementia, it will be a good example of how other traditional Chinese medicines could potentially be developed,” said Zhang Huajian, the Beijing-based director of clinical research at China Shineway Pharmaceutical Group Ltd...//Comment: My stepfather had vascular dementia for several years. I wouldn't wish that disease on my worst enemy...

‘I've Lost My Youth’: The Psychiatric Patients Stuck in Hospital - SixthTone I miss the boundless sky. I miss feeling the temperature and scenery change with the seasons,” says Lili, a 39-year-old with large eyes, rosy cheeks, and a short ponytail. She was first hospitalized in 2005 after being diagnosed with schizophrenia, and was transferred in 2008 by her mother — coercively, she says — to her current home, a facility in suburban Shanghai that accommodates around 400 people deemed to have severe cases of schizophrenia, manic depression, bipolar disorder, and other mental health issues. The hospital has held her against her will for a decade at the behest of her mother, Lili says. She claims that a doctor declared her fit and well prior to her 2008 transfer, and that her condition has remained stable since then. Lili takes antipsychotic drugs to prevent relapses.

My career as an international blood smuggler | The Guardian For years, Kathleen McLaughlin smuggled American plasma every time she entered China, home to the world’s largest and deadliest blood debacle. She had no other choice

Biotech Firm’s Shares Plummet After Report Claims It Faked Data - Caixin Global Hong Kong-listed Genscript Biotech Corp. suspended trading Thursday after allegations of fake data were leveled against the upstart in one of China’s fastest growing sectors. The company’s shares plummeted by as much as 45% in the morning before being suspended at which point they were down 26.79%, leaving the stock at HK$11.86 ($1.52) per share and cutting nearly HK$8 billion from its market ca

Key researcher’s resignation sparks public uproar - Global Times Xi'an Aerospace Propulsion Institute applied for arbitration at a local labor dispute arbitration agency on May 20 in order to retain Zhang Xiaoping, a rocket engine designer, who moved to a private company earlier this year, Beijing Youth Daily reported on Thursday. The reason the institute applied for an arbitration is that Zhang, who was involved in some national key programs, knows a lot of confidential information and should go through formalities before he quit to ensure that secrets are not released, according to rules. "But he left without going through such a process," a source told The Beijing News on Thursday. The source also noted the arbitration was handed to a local court. Online information said that Zhang earned 120,000 yuan ($17,450) a year at the institute, while he could make one million yuan at the private company.

 

Agriculture And Rural Issues

China Launches Fund Backing Loans to Farms, Small Firms - Caixin Global At a ceremony Wednesday, the National Financing Guarantee Fund Co. Ltd. signed agreements with eight provincial-level guarantee and re-guarantee agencies and seven commercial banks including state-owned China Construction Bank, the Ministry of Finance said in a statement posted on its website. The fund aims to encourage more financing resources for small and micro enterprises and the rural sector, taking advantage of the leverage of fiscal support, Vice Finance Minister Liu Wei said at the launching ceremony.

China detains four for transporting pigs amid swine fever outbreaks | Reuters Inner Mongolia in northern China has detained four people for forging documents and illegally selling and transporting pigs from a province that has been hit by African swine fever, said the region’s animal husbandry bureau late on Wednesday. This comes after a slaughterhouse in the capital Hohhot discovered four pigs infected with the highly contagious disease that has been spreading rapidly across the world’s top pork producer since its discovery in August.

Interactive Chart: Swine Fever Sweeps Through China - Caixin Global A new outbreak of African swine fever has been reported at a slaughterhouse in China’s Inner Mongolia autonomous region, killing two pigs that had been due for slaughter and infecting two others, the country’s Ministry of Agriculture confirmed Monday. Monday’s announcement brings China’s total number of outbreaks to 20 since the start of August. Seven other regions and provinces, mostly in eastern China, have also been affected.

 

Beijing

Beijing focuses on functions of central districts - China Daily Beijing said it will focus more on political functions in the use of land as it banned new residential real estate projects in its core districts on Wednesday..."The new policy shows that the Beijing government has formed a clear development direction－being a central political area and limiting the business and residential functions in the central area," said Yan Yuejin, research director of the E-house China R&D Institute.// Comment: bullish for Beijing real estate prices