Yang Jiechi and Wei Fenghe in DC this week; Reform talk at import expo; Unirule economist banned from leaving China for reform celebration at Harvard; Video of US-China close encounter at sea; US Attorney General Jeff Session's China Initiative

Happy Monday, it sounds like it will be a busy week in US-China relations.

I am hearing that the the US and China are restarting the Diplomatic and Security Dialogue this week in DC. PRC defense minister Wei Fenghe and top foreign affairs official Yang Jiechi will be here this week. I believe Yang is arriving tomorrow 11.6 and will be here through the 10th, am not sure on Wei's timing. 

Assuming what I am hearing is true, and so far there have been no official announcements, one thing to watch will be whether or not Yang gets a meeting or at least a drop by handshake with President Trump.

I am also hearing that Liu He may come to DC soon after if it looks like there is progress towards at least a framework deal at the G20. If Liu does schedule a DC visit expect markets to get excited. 

Thanks for reading.

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The Essential Eight

1. Xi opens the China International Import Expo

Lots of promises, sorry to be so jaded but seems more of a a nothing dumpling until concrete actions are actually implemented, not just promised...

Full text: Keynote speech by President Xi Jinping at opening ceremony of 1st China International Import Expo - Xinhua Work Together for an Open Global Economy That is Innovative and Inclusive // 习近平在首届中国国际进口博览会开幕式上的主旨演讲(全文) 

Caixin View: About Those Import Tariffs... - Caixin Global:

Xi gave some new import targets: China will buy more than $30 trillion of goods from other countries over the next 15 years. That's an increase of $6 trillion over the existing target of $24 trillion that the Ministry of Commerce had re-stated just hours before. He also said China will import $10 trillion of services over the same period...

While Xi's goods target represents a 25% enlargement, we don't expect it will satisfy U.S. demands that China significantly reduce its trade surplus. China is already on track to hit these targets – it imported $1.84 trillion of goods in 2017, up 16% from 2016. About $500 billion of this came from the U.S. The old target of $24 trillion amounted to roughly $1.6 trillion per year which, in value terms, is actually a decrease from 2017's level. To hit Xi's new target, China needs to import on average $2 trillion of goods per year until 2033

Xi tells the world China will boost imports while swiping at Trump’s ‘law of the jungle’  - The Washington Post:

For 30 minutes on Monday, Chinese President Xi Jinping offered conciliatory promises to political and business leaders from 172 countries gathered in Shanghai: He would turn his country of 1.3 billion into global consumers, welcome foreign investors into previously restricted sectors and crack down on Chinese companies that abuse intellectual property rights.

Then, he seemingly turned to an audience of one — his counterpart in the Oval Office — and his tone hardened.

“Great winds and storms may upset a pond, but not an ocean,” Xi said, comparing China to a vast and immovable sea. “After 5,000 years of trials and tribulations, China is still here. Looking ahead, China will be here to stay.”

Xi's Swipes at Trump Show China Standing Its Ground in Trade War - Bloomberg:

“He repeated a lot of the planned policies we have already heard in the past few months,” said Sue Trinh, head of Asia FX Strategy at RBC Capital Markets in Hong Kong. “Markets seemed to like the headline ‘to cut import tariffs,’ but this plan was already announced in September and can only be milked so many times.”..

Although the event was meant to gather foreign companies to woo Chinese consumers, global brands from Adidas to Walmart, Procter & Gamble to Uniqlo, were sending only country heads -- or no senior executives at all. Starbucks Corp. CEO Kevin Johnson, whose company opens a store in China every 15 hours, won’t be attending even though he’ll be in the same city.

President Xi breathes new life into Shanghai FTZ as he hopes to replicate reforms across China | South China Morning Post:

He did not elaborate on the location or the size of the new areas that will be included in the FTZ.

But Xi’s remarks about the Shanghai FTZ show Beijing’s resolve in conducting drastic liberalisation, especially in service sectors such as finance, education and culture.

“The Shanghai FTZ will be given new tasks in the future after the expansion,” said Chen Bo, a professor at the Huazhong University of Science and Technology and an adviser to local governments including Shanghai. “China wants to use the zone to display its willingness to open the market now that the US and China are working to solve the trade issues.”

Comment: If Xi's advisers actually such an approach will work they are deluding themselves. The US is way past accepting another demonstration of potential future willingness...that may have worked in years past but the loss of patience is now bipartisan in DC...

China to Create Stock Venue in Shanghai for High-Tech Companies - Bloomberg:

China will set up a new trading venue in Shanghai that will make it easier for high-tech companies to access funding, as President Xi Jinping vows more opening measures to boost the world’s second-largest economy.

The Shanghai Stock Exchange will also start a pilot program on a registration-based system of initial public offerings, Xi said at the opening ceremony of the China International Import Expo on Monday, without elaborating on either initiative.


2. Reform rhetoric vs reformers rights

Unirule economist barred from leaving China for Harvard event on ‘national security’ grounds | South China Morning Post:

Sheng Hong, executive director of the prominent Unirule Institute of Economics, was due to attend a symposium at the American university reflecting on China’s 40 years of reform and opening up.

But the liberal economist was stopped at Beijing Capital International Airport from leaving for his flight to Boston on Thursday morning.

“They told me I would endanger national security and was not allowed to leave the country,” Shen told the South China Morning Post on Monday. “I was completely shocked. How can my attendance at an academic conference affect national security? This is absolutely absurd,” he said.

Comment: This kind of undercuts the latest round of reform promises...hard to have much faith that the rights of foreign firms and private entrepreneurs will really be respected when politics are so clearly back in command in the New Era...


3. US-China trade

Their Soybeans Piling Up, Farmers Hope Trade War Ends Before Beans Rot - The New York Times:

This is harvest season in the rich farmlands of the eastern Dakotas, the time of year Kevin Karel checks his computer first thing in the morning to see how many of his soybeans Chinese companies have purchased while he was sleeping.

Farmers here in Cass County have prospered over the last two decades by growing more soybeans than any other county in the United States, and by shipping most of those beans across the Pacific Ocean to feed Chinese pigs and chickens.

But this year, the Chinese have all but stopped buying. The largest market for one of America’s largest exports has shut its doors. The Chinese government imposed a tariff on American soybeans in response to the Trump administration’s tariffs on Chinese goods. The latest federal data, through mid-October, shows American soybean sales to China have declined by 94 percent from last year’s harvest.

Comment: I think it is a fantasy to believe the Chinese will ever return to such a reliance on US soybeans.

Farmers round on Trump as demand for soyabeans dries up | Financial Times $$:

Across the Great Plains and Midwest, in interviews farmers expressed frustration at being in trade war crosshairs. But the question is whether they will punish Mr Trump on Tuesday. The issue is particularly important in Senate races since several close contests are in agricultural states.

Mr Ericson, president of the North Dakota Soybean Growers Association, said farmers were divided. “You’ve guys that voted for Trump that are mad at Trump, you’ve got guys that voted for Trump that are sticking with Trump. The ag community is starting to wonder what the heck’s going on. I voted for him and I’m kind of disappointed.”

Companies Feel the Tariff Pinch - WSJ $$:

U.S. companies said they are tempering the effects of escalating tariffs with China through price increases or changes to their supply chains, but they warn investors that the picture could worsen next year.

Tariffs have slowed U.S. timber and grain exports, raised the cost of imported clothes hangers and heavy-equipment materials, and compressed profit margins for computer chip and tool makers, among other effects, according to an analysis of results and comments from the roughly 75% of S&P 500 companies that have reported third-quarter earnings.

U.S. Orders From Canton Trade Fair Sink 30% - Caixin:

Export orders to the U.S. were down 30.3% year-over-year to $2.8 billion, said fair spokesman Xu Bing at a news conference held at the end of the biannual fair Sunday. The number of U.S. attendees dropped 4.07% to 10,739, Xu said.

There were a smaller number of buyers from advanced economies generally, but more from developing countries and emerging economies, Xu said.


4. US close encounters with the PLA

Exclusive details and footage emerge of near collision between warships in South China Sea | South China Morning Post:

The Chinese Luyang destroyer issued the stern verbal message to the USS Decatur before sailing within 45 yards of the vessel in the September 30 incident that Washington labelled “unsafe and unprofessional”, according to a timeline obtained from Britain’s Ministry of Defence.

“You are on [sic] dangerous course,” the Chinese ship warned, according to the document obtained by the South China Morning Post via a freedom of information request. “If you don’t change course your [sic] will suffer consequences.”..

In the footage, also released by Britain’s MOD, an unseen US navy man is heard describing the Chinese ship “trying to push us out of the way” and witnessing unarmed Chinese navy personnel on deck.

Bumpers along the side of Luyang are visible in the video, if you look closely.  Remember this quote from SecDef Mattis last month

“When the Chinese ships are putting bumpers over the side,” Mr. Mattis told reporters on the plane at the beginning of his Asia trip, “you don’t do that when you’re out in the middle of the ocean, unless you’re intending to run into something.”

CNN - US Navy has had 18 unsafe or unprofessional encounters with China since 2016:

We have found records of 19 unsafe and/or unprofessional interactions with China and Russia since 2016 (18 with China and one with Russia)," Cmdr. Nate Christensen, a spokesman for the US Pacific Fleet, told CNN.

A US official familiar with the statistics told CNN that 2017, the first year of the Trump administration, saw the most unsafe and or unprofessional encounters with Chinese forces during the period.

South China Sea rivalries may be played out at disputed Mischief Reef, observers say | South China Morning Post:

“It’s likely that the US will increase the frequency of its patrols [by both ships and aircraft] near Mischief Reef under the code of conduct for the South China Sea, which upholds freedom of navigation rights,” a source close to the Chinese military said.

“Beijing is aware of the controversy surrounding Mischief Reef, but as it claims sovereignty over almost the entire South China Sea, its military response to US naval activity there will be much stronger in the future.”


5. US Attorney General Jeff Session's China Initiative

This initiative may have been a bit lost in the hubbub around the Trump-Xi phone call last week. Among other actions I am hearing this will likely result in FARA prosecutions of undeclared CCP influence agents in the US.

Attorney General Jeff Sessions Announces New Initiative to Combat Chinese Economic Espionage | OPA | Department of Justice:

I am announcing that I have ordered the creation of a China Initiative led by Assistant Attorney General John Demers, who heads our National Security Division, and composed of a senior FBI Executive, five United States Attorneys including Alex, and several other Department of Justice leaders and officials, including Assistant Attorney General for our Criminal Division, Brian Benczkowski...

This administration’s new initiative will also address two major responsibilities of our National Security Division: the Foreign Investment Review Staff’s review of investments and licenses in U.S. infrastructure and telecommunications, and the Foreign Agent Registration Act Unit’s work to counter covert efforts to influence our leaders and the general public.

This will help us meet the new and evolving threats to our economy. Today, we see Chinese espionage not just taking place against traditional targets like our defense and intelligence agencies, but against targets like research labs and universities, and we see Chinese propaganda disseminated on our campuses.

DoJ- Attorney General Jeff Session's China Initiative fact sheet (PDF) 

Some components of the initiative:

The Attorney General has set the following goals for the Initiative:

— Identify priority trade secret theft cases, ensure that investigations are adequately resourced; and work to bring them to fruition in a timely manner and according to the facts and applicable law;

— Develop an enforcement strategy concerning non-traditional collectors (e.g., researchers in labs, universities, and the defense industrial base) that are being coopted into transferring technology contrary to U.S. interests;

— Educate colleges and universities about potential threats to academic freedom and open discourse from influence efforts on campus;

— Apply the Foreign Agents Registration Act to unregistered agents seeking to advance China’s political agenda, bringing enforcement actions when appropriate

—Equip the nation’s U.S. Attorneys with intelligence and materials they can use to raise awareness of these threats within their Districts and support their outreach efforts;

-- Implement the Foreign Investment Risk Review Modernization Act (FIRMA) for DOJ (including by working with Treasury to develop regulations under the statute and prepare for increased workflow);

— Identify opportunities to better address supply chain threats, especially ones impacting the telecommunications sector, prior to the transition to 5G networks;


6. Does Australia have a Huawei smoking gun?

The Weekend Australian says yes, but does not disclose in which country it occurred and is anonymously sourced.

China used Huawei to hack network, says secret report - The Australian:

Secret intelligence reports given to Australian officials outlined a case in which Chinese espionage services used telecommunications giant Huawei’s staff to get access codes to infiltrate a foreign network.

The Weekend Australian has confirmed from a national security source that the intelligence highlighted the Chinese company’s role in cyber espionage.

Huawei has been banned from any involvement in building the new 5G network in Australia ­because of security fears but Chin­ese officials have urged the government to rethink the decision..

The Weekend Australian ­understands the criteria the ­government used to determine risk around network vendors ­centred on capability, form and intent — that is, did a company have the capability to breach a network and a history or intention of doing so. One key criterion was whether the company operated in a ­jurisdiction where corporations could be compelled to provide ­information to intelligence services. Late last year, China passed its National Intelligence Law, which obliged citizens and organisations to co-operate with and collaborate with China’s intelligence services if required.

We won't bid for 'core' 5G business, Huawei NZ exec says - NZ Herald:

Huawei won't bid for Spark, Vodafone and 2degrees' "core" 5G mobile network upgrade business, the company's NZ deputy chief executive Andrew Bowater tells the Herald...

In broad terms, the core is the "brain" of a mobile network. Bowater says because it is "aware of sensitivities" and "frankly, it's not worth the hassle", Huawei will restrict itself to bidding for RAN (radio access network) elements of Spark, Vodafone and 2degrees' respective mobile upgrades - that is, transmitting and receiving gear on cellphone towers.


7. UN scrutiny of the PRC human rights record this week

Activists urge deep scrutiny of China at U.N. rights gathering this week | Reuters:

China’s record will be examined by the U.N. Human Rights Council on Tuesday, the first time since 2013, in a regular review expected to focus on its treatment of ethnic minorities, especially Uighurs and Tibetans.

China says Xinjiang faces a threat from Islamist militants and separatists. It rejects all accusations of mistreatment in an area where hundreds have been killed in unrest between Uighurs and members of the ethnic Han Chinese majority.

China Law & Policy - China’s Upcoming Universal Periodic Review: A Guest Blog Post from Fordham Law School’s Leitner Center;

Today, Caitlin Hickey, Joey Lee, Reece Pelley and Elisabeth Wickeri, advocates from Fordham Law School’s Leitner Center for International Law and Justice offer their insightful assessment of China’s major human rights violation: the continued – and increased – use of non-judicial, and at times illegal, arbitrary detention of people the Chinese government just doesn’t like.  While arbitrary detention will certainly arise in the context of the Xinjiang internment camps, the authors, in their guest blog post below, remind us that it is a far more prevalent practice, impacting other vulnerable populations, and that the U.N. should not forget to question the Chinese delegation about the government’s treatment of these vulnerable populations.

OHCHR | Universal Periodic Review - China


8. More on the intelligence failures that destroyed CIA China network

The loss of visibility into China right as Xi was in ascendance probably could not have come at a worse time...

The CIA's communications suffered a catastrophic compromise - Yahoo News:

Some U.S. intelligence officials also believe that former Beijing-based CIA officer Jerry Lee, who was charged with spying on behalf of the Chinese government in May 2018, was partially responsible for the destruction of the CIA’s China-based source network. But Lee’s betrayal does not explain the extent of the damage, or the rapidity with which Chinese intelligence was able to identify and destroy the network, said former officials.

U.S. officials believe that Chinese intelligence obtained physical access to the transitional, or temporary, secret communications system used by the CIA to correspond with new, unvetted sources — and broke through the firewall separating it from the main covert communications system, compromising the CIA’s entire asset network in that country, Foreign Policy reported earlier this year.

It’s not clear whether China and Iran cooperated, but the former officials said the communications systems used in both countries were similar. The two governments may have broken the system independently. But Iranian, Chinese and Russian officials were engaged in senior-level communications on cyber issues around this time, recalled one former senior intelligence official —interactions that were “very suspicious in hindsight.”


Business, Economy, Finance And Trade

The guest list giving a glimpse of Xi Jinping’s thinking about China’s economic future | South China Morning Post According to a government official involved in finalising the invitation list, Xi said he did not want to hear the views of “star entrepreneurs” but rather the thinking of those business owners who controlled a lion’s share of China’s economic landscape and whose success, or failure, could matter for the economy.Another noticeable aspect of the guest list is that there were no estate developers or financial speculators at the meeting. The speakers included executives of traditional, but successful industrial firms, such as Liu Jiren, chairman of Neusoft, a software engineering service provider; and Lu Weiding, chief executive of car parts maker Wanxiang.

The seating chart going around Wechat, was it more of a 鸿门宴 “feast at Hong Gate”?:

MIIT to introduce more measures to support private businesses - Xinhua The Ministry of Industry and Information Technology (MIIT) on Sunday said it would take various measures to facilitate the development of private businesses. Miao Wei, minister of the MIIT, said his ministry would accelerate the informatization of small and medium-sized businesses, keep organizing more contests on innovation and entrepreneurship, and reinforce the protection of intellectual property to support private businesses' innovation and improve their competitiveness.

人民日报评论员:吃下定心丸,安心谋发展--理论-人民网 People's Daily commentary on the importance of private enterprises, part of the propaganda efforts to give confidence to private entrepreneurs

China’s central bank says ‘grey rhino’ financial risks could charge in 2019 | South China Morning Post In its annual China Financial Stability Report published online on Friday, the People’s Bank of China said that there “are still relatively large uncertainties in the global economy and financial markets in 2019”. “Some grey rhino financial risks could emerge as the Chinese economy is gearing towards high-quality growth from high-spend expansion and structural adjustment,” it said, using the animal-inspired metaphor for the type of risk facing the country that is obvious but typically ignored.

China to Tighten Rules on Five Financial Giants - WSJ Ant Financial, the world’s most valuable financial technology startup, retail and property giant Suning Commerce Group 002024 0.92% and three government-backed firms—China Merchants Group, Shanghai International Group and Beijing Financial Holdings Group—will face stricter capital-reserve requirements and risk-management rules under a pilot program, according to the official Xinhua News Agency. The new rules are expected to be rolled out for all financial holding firms during the first half of 2019, Xinhua said, citing an official with the People’s Bank of China.

How China’s ambitious plan to tax global income faces opposition in US, Hong Kong and even Beijing | South China Morning Post: The unexpected opposition from home and abroad has left the tax authorities facing an embarrassing climbdown... The provision that foreigners who are out of China for over 30 days on one trip are not regarded as tax residents in China is expected to remain intact, making it easy to escape Chinese tax resident status...

‘Tech-tonic’ Shift May Be Taking Shape in China: Taking Stock - Bloomberg On Friday, overseas investors bought $2.5 billion of Chinese stocks via trading links with Hong Kong, or more than double the daily record set the day before. This collectively erased all of the net selling that took place in October. Meanwhile, local investors poured $7.3 billion into 255 ETFs tracking Chinese stocks in October, which is almost 20% more than the previous record of $6.1 billion that took place during the 2015 collapse.

Tencent-Backed WeBank Hits $21 Billion Valuation - Caixin Tencent-backed online lender WeBank Co. Ltd. has reached a sky-high valuation of 147 billion yuan ($21 billion) after less than four years in operation, becoming one of the world’s largest “unicorn” companies. The new valuation is based on a legal document (link in Chinese ) attached to an auction notice on Taobao.com, which described the upcoming auction of a minor stake in WeBank.

Default Risks Rise in $355 Billion China Builder Bond Market - Bloomberg Borrowing costs in dollars for China’s high-yield issuers, most of whom are property developers, almost doubled this year to 11.2 percent, the highest in about four years, ICE BofAML indexes show. To make things worse, the sector faces a record $18 billion bond maturities in both onshore and offshore markets in the first quarter of 2019. That number is expected to double if investors demand early repayment on some of these notes, according to Bloomberg-compiled data.


Politics, Law And Ideology

Chinese officials face disciplinary action after ignoring six direct orders from Xi Jinping | South China Morning Post The case centres on 40 illegal villas built in a nature reserve in the Qinling mountains, a well-known area of natural beauty that is regarded as a cradle of the Han Chinese people. Shaanxi Daily reported that Xi had told the local government on six separate occasions to tear down the villas because the development was damaging the environment, but the authorities in the provincial capital Xian continued to drag their feet. Even though work on the development began in March 2012, nothing was done until Beijing sent in an inspection squad last year. The villas were finally torn down in August this year...

Weekly Report 2|4 10.27.2018-11.2.2018 | Center for Advanced China Research Correctly Understand the Xinjiang History Question People’s Daily   10.28  The Xinjiang Uyghur Autonomous Region Socialism with Chinese Characteristics Theory System Research Center (新疆维吾尔自治区中国特色社会主义理论体系研究中心) published an article in the People’s Daily to correct misunderstandings about Xinjiang history, stating that “history questions are critical questions of political principles.” According to the Center, “for a long time, ethnic separatist forces have wantonly distorted, fabricated, and falsified Xinjiang’s history.”   The article stated that “Xinjiang is not ‘East Turkestan,’ moreover, the country ‘East Turkestan’ doesn’t exist. From the beginning to end, the fact that Xinjiang is a component part of our country is undeniable.” Furthermore, “all of the ethnic cultures of Xinjiang take root in the fertile lands of Chinese civilization and are an inseparable part of Chinese culture” and that “the strengthening of Chinese cultural identity is the soul of the prosperous development of the culture of all of the ethnic groups of Xinjiang.”

Anti-graft authorities to inspect financial firms - Global Times Zhao Leji, Secretary of the Communist Party of China (CPC) Central Commission for Discipline Inspection, said on Friday that the teams will be dispatched to form a discipline inspection and supervision system, Beijing Youth Daily reported on its WeChat account on Saturday. The team will enter enterprises administered by the State-owned Assets Supervision and Administration Commission (SASAC), major State-owned banks such as the Industrial and Commercial Bank of China and the Bank of China, Chinese insurance giants like People's Insurance Company (Group) of China (PICC) and policy banks such as the China Development Bank (CDB) and the Export-Import Bank of China.

Beijing starts collecting veterans’ info for first time - China Military Beijing started to collect information of veterans for the first time by setting up more than 1,100 collection points across the city, authorities said on Friday, which, analysts said will better safeguard the legal rights of veterans and social stability. Collecting veterans' information is meant to get a clear picture of the number of veterans and other entitled members and offer them better services, according to a statement released on the website of Beijing Municipal government on Friday.  //  And of course facilitates tracking and management...


Foreign and Military Affairs

How Does Xi Jinping Construct his Worldview? | Asia Society Kaiser Kuo speaks with the Honorable Kevin Rudd, the 26th prime minister of Australia and the inaugural President of the Asia Society Policy Institute. He is also a doctoral student at Jesus College, University of Oxford, who, through his studies, hopes to provide an explanation as to how Xi Jinping constructs his worldview. Mr. Rudd elaborates on the extent to which the Chinese government’s worldview has changed, the current direction of that worldview, and how much of that can be owed to Xi Jinping and domestic political maneuvering.

Imran Khan, XI Jinping sign 16 agreements to curb poverty in Pakistan; Beijing declines to reveal amount loaned to Islamabad - Firstpost China said it will provide the "necessary support" to Pakistan to tide over the present financial crisis, expand CPEC projects as the two countries signed 16 agreements on Saturday after talks between Prime Minister Imran Khan and his Chinese counterpart Li Keqiang to boost their "all-weather" strategic ties. Khan is in Beijing on his maiden visit to China as the two countries grapple to iron out differences over the multi-billion-dollar China-Pakistan Economic Corridor (CPEC) and Islamabad approaching 'friendly nations' to avoid a tough IMF bailout package.

As Imran Khan Meets Xi Jinping, China Says it Supports Pakistan's ‘Quest For Peace Through Dialogue' With India - News18 China on Sunday said it supported Pakistan's "quest for peace through dialogue" to settle the outstanding disputes with India and backed Islamabad's engagement with the Nuclear Suppliers group (NSG). A joint statement, issued here after Prime Minister Imran Khan's talks with Chinese President  and Premier Li Keqiang, said that China backed Pakistan's efforts to improve ties with India to settle "outstanding disputes", without directly mentioning the Kashmir issue.

Pakistan's state-run TV apologises for writing 'Begging' instead of 'Beijing' during telecast of Imran Khan's speech in China - Firstpost Pakistan's state-run news channel has apologised after it ran "Begging" dateline instead of "Beijing" on screen during the live broadcast of Prime Minister Imran Khan's speech at the Central Party School of the ruling Communist Party of China. Khan, who is on an official trip to China to secure an economic package for his cash-strapped country, was addressing a ceremony on Sunday at the Central Party School in Beijing which was shown live by the Pakistan Television Corporation (PTV).

Marise Payne talks up ties with China as she heads to Beijing | The Guardian Australia’s foreign affairs minister, Marise Payne, will travel to Beijing for a forum with her Chinese counterpart, Wang Yi, amid concerns about the superpower’s influence on domestic politics and cyber attacks. Payne will arrive in China on Wednesday for the Australia-China Foreign and Strategic Dialogue, which she hails as an opportunity to enhance the relationship between the two countries.

New data shows China has “taken the gloves off” in hacking attacks on US | Ars Technica Based on data from incident response companies gathered by the security software vendor Carbon Black, China is now the leading source of cyber-attacks. Of 113 investigations conducted by Carbon Black's incident response partners in the third quarter of 2018, nearly half—47 in total—came from China or Russia.

Two countries, one island Russia and China divided up an island in the Far East in 2004, and here's how life there has changed — Meduza Located near the city of Khabarovsk, at the confluence of the Ussuri and Amur rivers, Bolshoy Ussuriysky Island has long held strategic importance for Russia. In 2004, Moscow reached an agreement with Beijing to share the island (known as Heixiazi Island to the Chinese), dividing it roughly in half. Four years later, the new arrangement was fully in effect, and each country was free to do with its piece of the island what it liked. China transformed its side of the island into a nature reserve, attracting more than 600,000 tourists every year. On the Russian side, there are about 100 people trying to survive in ramshackle homes, and all development plans have failed to secure the necessary funding. Journalist Ekaterina Vasyukova traveled to Bolshoy Ussuriysky Island to learn more about life in a land shared with China.

Chinese Scientists Want to Conduct Research in U.S. Waters—Should Washington Let Them? | The National Interest The rapid expansion of China’s out-of-area—or “distant-ocean” (远洋)—oceanographic research operations raises important questions for Indo-Pacific nations. Many places of interest to Chinese oceanographers fall within the two hundred nautical mile exclusive economic zone of other countries. The United Nations Convention on the Law of the Sea (UNCLOS) empowers coastal states to decide whether to allow marine scientific research (MSR) in their exclusive economic zones...In recent years, Chinese scientists—and the government agencies that back them—have fixed their gaze on American waters, especially those near the U.S. territory of Guam. This has raised questions about the ability of current policy to adequately protect U.S. interests.

Kim Jong-un watches joint performance as China sends 2nd exchange delegation to N.Korea within a month - Global Times A Chinese delegation of artists delivered a joint performance with their North Korean counterparts on Saturday in Pyongyang in front of an audience including North Korean leader Kim Jong-un. They were the second Chinese cultural exchange delegation to visit the North Korean capital within a month. A sports delegation featuring basketball star Yao Ming visited in October. Chinese experts hailed North Korea's efforts to boost exchanges with other countries and said perhaps a third delegation of education and science may follow...Actress Tong Liya from Xinjiang Uyghur Autonomous Region and actor and director Zhang Guoli were included in the delegation.

US reimposes sanctions on Iran, exempts 8 importers from oil ban - The Mainichi While stepping up its "maximum pressure campaign" against the Iranian government, President Donald Trump's administration temporarily exempted "eight jurisdictions," apparently including Japan, from the U.S.-led ban on Iranian oil imports. Diplomatic sources and media reports have said the eight importers include Japan, India, South Korea and China.

China Will Lend to Debt-Choked Pakistan, But Won’t Bail It Out - Caixin “This was partly a trendsetting and sounding-out visit” and one in which Beijing hoped to determine “the priorities of the new government, as they were getting some mixed messages during PTI’s election campaign,” said Andrew Small, a fellow at the German Marshall Fund of the United States and an author of a book on Sino-Pakistani ties. “The Chinese government appears to have been accommodating in a lot of ways, so long as existing contracts weren’t canceled and there was some openness from China about reorienting its policy in other areas, although the details need to be fleshed out.”

Australia’s trade minister Simon Birmingham to visit China in sign of thaw | South China Morning Post Visit to Shanghai for International Import Expo is first high-level ministerial trip in over a year Two countries have been at loggerheads amid fears of China’s influence over Australian media, universities and politics

Nation offers first stealth combat drone in market - China Daily China is well-known as a rising supplier of advanced military drones in the international market. Now, the nation is offering a new attraction that could be irresistible to many buyers — the only stealth drone available in the market. And it can lift heavier loads than some manned fighter jets. The China Academy of Aerospace Aerodynamics, the country’s largest military drone exporter by the number of products sold overseas, will display its latest combat model — the CH-7 high-altitude, long-endurance stealth drone at the 12th China International Aviation and Aerospace Exhibition, sources from the academy told China Daily in an exclusive interview.

A video of its capabilities:

Xi sends congratulatory letter to ICG meeting - Global Times Chinese President Xi Jinping sent a congratulatory letter to the 13th Meeting of the International Committee on Global Navigation Satellite Systems (ICG), which started Monday in Xi'an, northwest China's Shaanxi Province. Xi said satellite navigation systems are significant space infrastructure and important information guarantee for economic and social development to provide humanity with all-day accurate time and space information service on life and work.


Hong Kong, Macao

Badiucao: Chinese dissident artist's Hong Kong show canceled over 'safety concerns' - CNN Style Badiucao is the pseudonym of a Chinese-Australian artist based in Europe. He has previously been profiled by CNN, and drew widespread attention for a campaign last year on the death of Chinese dissident Liu Xiaobo, and a piece last month at Google's headquarters over the search giant's decision to reenter China. The artist had been planning to travel to Hong Kong for the show, but pulled out earlier this week over concerns for his own safety and anonymity were he to be arrested.

Journalist’s Expulsion Casts Shadow on Hong Kong’s Future - The New York Times “I would say it is the biggest mistake the Hong Kong government has ever made,” said Fu Hualing, a law professor at the University of Hong Kong, of the decision to expel Victor Mallet, the Asia news editor of The Financial Times. “It has a huge impact. I don’t know whether it was intended or not, but it has been felt everywhere.”


Taiwan

Taiwan ‘will consider’ hosting US warships on Taiping Island for regional security | South China Morning Post Taiwan “will consider” a US Navy request should Washington ask to use the largest of the Spratly Islands in the South China Sea for regional security purposes, the island’s defence minister said on Monday in response to a series of hypothetical questions from a member of the Legislative Yuan in Taipei.

China targets polls with fake accounts - Taipei Times China has been creating fake social media accounts to interfere with the Nov. 24 elections as practice for manipulating the 2020 elections to elect candidates favorable toward Beijing, a National Security Bureau source said on Saturday. China’s fake news is largely centered on issues related to Taiwan’s defense, cross-strait relations and the policies of President Tsai Ing-wen’s (蔡英文) administration, and generally gets published first by Chinese outlets such as the Global Times, Straits Today (今日海峽) and Taihai Net (台海網), the source said.


Tech And Media

U student told police she pleaded with billionaire, 'I don't want to do that' - StarTribune.com The Star Tribune has reviewed text messages, portions of the 21-year-old alleged victim’s interviews with police, and other documents that piece together her account of the night leading up to Liu’s arrest, which occurred when he was studying in an elite doctoral program for Chinese executives at the University of Minnesota’s Carlson School of Management. Liu, 45, also known as Liu Qiangdong, is the founder of Beijing-based JD.com, an e-commerce site similar to Amazon with more than 300 million customers. Liu has an estimated net worth of $5.4 billion.

China Media Bulletin: U.S.-China Tensions, upgraded police surveillance, Africa influence (No. 130) | Freedom House Fifth World Internet Conference: The city of Wuzhen in China’s Zhejiang Province will host the next in a series of “World Internet Conferences” from November 7 to 9. Organized by the Cyberspace Administration of China and the provincial government, the annual event is part of the Chinese Communist Party’s campaign to shape global conversations about internet governance and legitimize its own form of digital authoritarianism. Past conferences have included speeches by prominent executives from global tech companies like Apple, who have subsequently come under criticism for their comments. Watch for any participation this year by international tech executives, including Apple’s Tim Cook, who recently concluded an independent trip to China, during which he met with high school students, tech entrepreneurs, and Communist Party officials.

Alphabet’s Chairman on Government, China and Fake News - WSJ $$ Mr. Hennessy: There isn’t yet any announced plan for how we would go back into China while preserving the goals of the first exit. That’s something that is going to have to be figured out as we go through this. WSJ: Why would Google go back into China? Mr. Hennessy: It’s hard to ignore one of the largest countries in the world. The question to ask yourself is, are the Chinese people better off with a limited version of Google, or are they better off with no access at all? And that’s not so clear to me. There’s a shifting set of grounds of how you think about that problem, and how you think about the issue of censorship. The truth is, there are forms of censorship virtually everywhere around the world.

Weibo Gives Media, Government Power to Quash ‘Rumors’ - Sixth Tone According to the statement posted by the Sina Administrative Microblog Academy — operated by Weibo’s parent company — verified accounts of government departments and “credible media” will be able to mark posts disseminating fake news with a customizable notice identifying them as untrue or misleading. The notice will then appear immediately below the post, with Weibo playing no role in screening or approving it.

Weibo’s rumor-busting feature was initially introduced with a smaller scope earlier this year, when the company gave media accounts associated with the Central Committee of the Communist Party the power to flag fake news for Weibo to then verify. But the expanded authority to directly flag content will now be granted to a total of 1,638 media accounts and 1,322 government-affiliated accounts. The latest announcement doesn’t specify which media accounts will be included but names public security bureaus and cyberspace offices as examples of government accounts that will play a greater role in shaping China’s online discourse.

Tencent to require all gamers to verify their identities with police database from next year | South China Morning Post Tencent Holdings will require all players of its mobile and personal computer games to verify their identities against police databases from next year as part of its attempts to assuage government concern that excessive gaming is hurting the health of the country’s young. The company last month made it mandatory for players in nine Chinese cities including Beijing to verify their age to log into its popular Honour of Kings mobile game. Under the new plan, Tencent will roll out the mandatory verification to another nine of its most popular games before introducing them for all of its games from next year.

China’s frenzy over League of Legends championship sheds light on esports growth | TechCrunch When China’s Invictus Gaming defeated European squad Fnatic in the League of Legends 2018 finals this past Saturday, China’s social media platforms became awash in ecstasy and pride. “It’s like winning an Olympic gold, a teenage dream come true,” writes one thirty-something audience of the competition on his WeChat feed. Many others share that sentiment. So far, the hashtag #IG冠军, which means “IG the champion,” has generated over one million threads on Weibo, China’s equivalent of Twitter with over four million monthly active users. This is a critical moment for China’s first-generation of players who grew up under parents and teachers who too easily dismissed all kinds of video games.

Ofo moves its Beijing headquarters in midst of cash crunch · TechNode According to Caijing, the current site of Ofo’s headquarters previously housed the company’s overseas operations and the Beijing branch.

Tencent is launching its own version of Snap Spectacles | TechCrunch Tencent this week unveiled its answer to the video-recording sunglasses, which, you’ll notice, bear a striking resemblance to Snap’s Spectacles. Called the Weishi smartglasses, Tencent’s wearable camera sports a lens in the front corner that allows users to film from a first-person perspective. Thankfully, the Chinese gaming and social giant has not made the mistake of Snap’s first-generation Spectacles, which highlighted the camera with a conspicuous yellow ring

人民日报文章:引领网信事业发展的思想指南 ——习近平总书记关于网络安全和信息化工作重要论述综述-新华网 People's Daily publishes long recap of Xi's thoughts and guidance on leading cyber development...part of the runup to the Wuzhen conference later this week


Society, Art, Sports, Culture And History

Inside China’s training camps, where boys are learning how to be men | South China Morning Post Wearing headbands reading “Tough Guy” and chanting slogans such as “Who is the best? I am the best”, “Who are we? We are the man”, they were there to learn all about focus, cooperation and competition through lectures, games and American football. It was the fifth day of an 18-day course held on weekends for boys aged seven to 11 that aims to rescue them from their day-to-day, all-female environment and prevent them from being “oversensitive, vulnerable, whiny, petty or irresponsible”. Members of the Boys’ Club recite declarations of manhood at the beginning of lectures, which include subjects such as safeguarding their country, honour and dreams.

Lodi Gyari, Dalai Lama’s emissary and a tireless advocate for Tibet, dies at 69 - The Washington Post Lodi Gyari, who escaped Chinese oppression in Tibet as a child, then spent his life as a tireless advocate for his native land and people, becoming an emissary of the Dalai Lama in negotiations with the government of China, died Oct. 29 at a hospital in San Francisco. He was 69. The cause was liver cancer, said Lesley Friedell Rich, an official with the International Campaign for Tibet, which Mr. Gyari once led.


Energy, Environment, Science And Health

More Evidence Points to China as Source of Ozone-Depleting Gas - The New York Times The gas, trichlorofluoromethane, or CFC-11, is supposed to be phased out worldwide under the Montreal Protocol, the global agreement to protect the ozone layer. In May, however, scientists published research showing that CFC-11 levels in the atmosphere had begun falling more slowly. Their findings suggested significant new emissions of the gas, most likely from East Asia. Evidence then uncovered by The New York Times and the Environmental Investigation Agency pointed to rogue factories in China as a likely major source. Now, the E.I.A. has prepared a report that it says bolsters the finding that Chinese factories are behind the return of CFC-11.

Government Declaration Vows to Rehabilitate Yangtze Ecosystems - Caixin With multiple ministries and city governments from 15 provinces signing a joint declaration, China has again signaled its dedication to rehabilitate the ecosystems of the Yangtze River, which are in dire condition. The “Wuhan Declaration on the Protection of Life of the Yangtze River” pledges to coordinate efforts to promote the protection of the ecology and environment of China’s “mother river.” The declaration was signed in Wuhan, Central China’s Hubei province, during a forum on the conservation of the river’s biological resources.

Antarctic's future in doubt after plan for world's biggest marine reserve is blocked | The Guardian A plan to turn a huge tract of pristine Antarctic ocean into the world’s biggest sanctuary has been rejected, throwing the future of one of the Earth’s most important ecosystems into doubt. Environmental groups said Russia, China and Norway had played a part in blocking the proposal, with the other 22 members of the Commission for the Conservation of Antarctic Marine Living Resources, the organisation set up to protect Antarctic waters, backing the proposal.


Beijing

北京人说“您”,可真不是抬举你-虎嗅网 a fun piece on Beijingers use of "Nin"..the joys of Chinese, impossible to ever fully grasp it

Beijing to add more forests, greenbelt - Xinhua Cai Baojun, deputy head of the bureau, said 5.55 million trees and 1.99 million flowering shrubs have been planted in a total area of 10,533 hectares so far this year. The capital's overall forest coverage has reached 43 percent, with the rate nearing 50 percent in the city proper, thanks to earlier greening campaigns