Zhong Shan joins US-China trade call; Massive Camsing fraud unfolding; Hong Kong; Xinjiang

Happy Wednesday. Thanks for reading.

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The Essential Eight

1. EE Section 1

US China trade war talks: Mnuchin, Lighthizer speak to Liu He - CNBC

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke to Chinese Vice Premier Liu He and Commerce Minister Zhong Shan “to continue negotiations aimed at resolving the outstanding trade disputes” between the world’s two largest economies, according to a U.S. official. The official said “both sides will continue these talks as appropriate.”

Comment: This is the first time Commerce Minister Zhong Shan has been listed as being on one of these calls. What is going on with Commerce Vice Minister Wang Shouwen? See this article from May in the SCMP - Wang Shouwen, China’s former ‘foot soldier’ now promoted to ‘general’ in US-China trade talks. I have heard Xi does not like Wang, whereas Zhong worked with Xi in Zhejiang. Or is this about concerns with Liu He? 

Sinocism intern Huang Yufan checked all the Xinhua reports of the trade negotiations and found that:

• Liu He had a total of seven announced phone calls with Mnuchin, Ross and Lighthizer since March last year. This is the first time Xinhua mentioned there is a second Chinese official involved;

• Liu He also led 11 rounds of “high-level” trade talks with the Americans in Beijing and Washington, and the Chinese negotiation team usually consists of one PBoC governor, seven vice ministers and one unknown female translator; 

• Zhong Shan was not part of the negotiation team. Zhong was not in the delegation traveling to Washington, and although he was photographed in attending opening ceremonies of talks in Beijing, photos of the actual negotiators did not include him or other more senior officials

Chinese, U.S. chief trade negotiators hold telephone conversation - Xinhua

Chinese Vice Premier Liu He on Tuesday evening held a telephone conversation with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin as invited, the Ministry of Commerce said Wednesday.

Liu, also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, exchanged views with the U.S. officials on implementing the consensus reached by the two heads of state on the sidelines of the G20 summit in Osaka.

Minister of Commerce Zhong Shan joined the conversation, the ministry said.

Kudlow: U.S. may never reach trade deal with China - POLITICO

Talks between the two countries broke down in early May, after the United States accused China of backsliding on commitments it made related to changing various laws to satisfy the U.S. demands.

"Our team, time and again, asked for the change in Chinese laws and resistance mounted on that point," Kudlow said. "They seem to believe that the State Security Council, or the Politburo, can promulgate regulations and that would be sufficient. We don't agree."...

Now, "various power centers" in China are pushing for what that they describe as a "fair and equitable agreement," Kudlow said. "I understand that. But we have a very unbalanced trading relationship with them. Consequently, in our view, we would like to see remedies and correctives on a number of fronts."

Comment: I am hearing a directive has gone out to SOEs to not purchase from US information and communications technology (ICT) firms, as part of non-tariff measures to squeeze America companies.

US must stop treating China as an enemy, says son of former president George HW Bush | South China Morning Post

Neil Bush hits out at ‘America First rhetoric’ and argues Washington should stop regarding the country as an existential threat

Other speakers at forum organised by former Hong Kong chief executive Tung Chee-hwa, support calls to improve relations between America and China

Former Chinese vice-premier Zeng Peiyan accuses US of making trade frictions worse | South China Morning Post

Zeng Peiyan – who is now chairman of the China Centre for International Economic Exchanges, a think tank in Beijing that organised the event – said it was Washington that had continued to escalate trade frictions with Beijing and it had seriously undermined the growth prospects of the two countries and the world.

Trade war tariffs are new normal and may be difficult to remove, says former US ambassador to China | South China Morning Post

Max Baucus, the top US envoy in Beijing from 2014 to 2017, said on the sidelines of a US-China trade relations event in Hong Kong that it would be difficult for the world’s two largest economies to cancel their existing tariffs on each other’s products.

Trade War Threatens Chinese Factories' Existence, Supplier Says - Bloomberg

China will see more factory shutdowns as the trade war that’s roiled the global supply chain exacerbates an exodus, said Spencer Fung, chief executive officer of Li & Fung Ltd. The company, which designs, sources and transports consumer goods from Asia for some of the world’s biggest retailers including Walmart and Nike, is being pushed by American clients to shift production out of China.

What the US needs to counter ‘unprecedented’ Chinese influence in South America

Adm. Craig Faller, the head of U.S. Southern Command, told the Senate Armed Services Committee’s Emerging Threats subcommittee that China is only going to increase its efforts to live “inside our own neighborhood seeking to displace the United States as the partner of choice and weaken the commitment of our partners to the rule of law and democracy.”

“Strong partnerships — enabled by engagements and presence, intelligence and information exchanges, and education and training — are our primary bulwark against the influence of malign actors in the hemisphere and are bolstered by our work together on military professionalism,” Faller said in written testimony submitted ahead of the Tuesday hearing, which focused on how SOUTHCOM can execute the National Defense Strategy.

The lost art of ideological warfare - The Washington Post - OpEd by Rep. Mike Gallagher

In our strategic competition with China, Americans have focused up until now on economic and military contests — at the expense of one of the most important tools in our arsenal. The 2017 National Security Strategy argues that the United States is locked in “fundamentally political contests between those who favor repressive systems and those who favor free societies.” But we are ignoring this important insight. If the United States fails to emphasize the ideological dimension of its competition with China, it will ignore one of the primary lessons of President Ronald Reagan’s twilight struggle with the Soviet Union...

The United States may be in an earlier stage of its great power competition than Reagan was during the Moscow spring of 1988, but his road map to victory is no less relevant today. By rediscovering the lost art of ideological warfare, the United States can live up to Reagan’s legacy and ensure that the Chinese Communist Party joins the Soviet Union on the ash heap of history.

Assistant Secretary David R. Stilwell Travels to Japan, the Philippines, the Republic of Korea, and Thailand - United States Department of State

July 11 to 19, no stop in China on his first trip in the new job.

Another response to last week’s open letter - Why the United States doesn’t need to return to a gentler China policy - The Washington Post - John Pomfret

I was reminded of this story last week when I read the open letter signed by scores of prominent experts on China. Like Tuchman, they deny agency to the Chinese Communist Party by placing the bulk of the blame for the current crisis in U.S.-China relations at the feet of the Trump administration. The letter nods to China’s misbehavior but focuses far more attention on what it calls the "many U.S. actions” that “are contributing directly to the downward spiral in relations.”..

Last week’s letter continues in this wrongheaded vein by repurposing the tired trope that we should tailor our China policy to support “Chinese leaders who want China to play a constructive role in world affairs.” But all the evidence I have seen from living in China for nearly 20 years indicates that there are no such “Chinese leaders” waiting in the wings. Xi has purged many of them, and others — reading the tea leaves — have changed their tune...

At root, the letter seems to misunderstand the nature of power in a Marxist-Leninist system such as China’s.

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2. Hong Kong

Trump softened stance on Hong Kong protests to revive trade talks | Financial Times $$

Donald Trump told Chinese president Xi Jinping last month that the US would tone down criticism of Beijing’s approach to Hong Kong following massive protests in the territory in order to revive trade talks with China.

The US president made the commitment when the two leaders met at the G20 summit in Osaka, according to several people familiar with the meeting. One person said Mr Trump made a similar pledge in a phone call with Mr Xi ahead of the G20 summit.

Comment: Another reminder that to Trump everything is just a bargaining chip for a trade deal, from Hong Kong, to Xinjiang, to Taiwan and Huawei. The signaling to China and to US allies is not constructive. 

After protests, sticky notes take over Hong Kong streets - Inkstone

Neighborhoods across Hong Kong are covered in colorful Post-it notes in support of a series of protests against a contentious – and now declared “dead” – government plan that would have allowed extraditions to mainland China.

Pocari Sweat urged not to take wrong stance on Hong Kong - Global Times

"TVB has objectively reported on protesters violently stormed LegCo, allowed the audience to witness the scene through multi-angle pictures, and to understand the actions taken by the police in the face of the environment at that time, including the dispersion of the demonstrators, those reporting has far-reaching influence. Meanwhile, our ads customers have been threatened by radical protesters and were asked to withdraw ads placed on TVB," a TVB spokesperson told the Global Times. 

"Pocari Sweat's comments are designed to please protesters, which equals to bowing to violence," the spokesperson said.

On Wednesday, netizens from the Chinese mainland were outraged by reports that the Otsuka Pharmaceutical Company had pulled its advertising for the Pocari Sweat from TVB, over its support for police during the extradition bill protests.

Harvard China expert examines what’s behind the Hong Kong protests – Harvard Gazette

Tony Saich says tensions and unrest over China’s tightening grip and eventual takeover have been present from the start. And the director of the Ash Center for Democratic Governance and Innovation and Daewoo Professor of International Affairs at Harvard Kennedy School argues the protests underscore the stark differences between the identities and cultures of insular, developing China and cosmopolitan, capitalistic Hong Kong that go far beyond economic self-interest. The Gazette spoke with Saich about what the future may bring.

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3. Massive fraud case unfolding

Exclusive: Camsing Global Becomes Focus of Fraud Probe - Caixin Global

A fraud investigation into the founder of a private conglomerate has sparked quarrels between financial institutions and e-commerce giants JD.com and Suning.com over their roles in a fundraising scandal.

Leading Chinese wealth manager Noah Holdings Ltd. said 3.4 billion yuan ($490 million) of asset management products backed by entertainment-to-healthcare conglomerate Camsing Global’s accounts receivables from JD.com were in danger of default. But JD.com said it is “unaware” of the matter.

Similar debates arose between Yunnan International Trust Co. and Suning involving products that raised more than 1 billion yuan for Camsing Global backed by pending payments from Suning...

The drama started last week when Camsing Global’s Shanghai-listed arm Boxin Smartcom (Suzhou) Sci&Tech Co. Ltd. said in a statement that its chairwoman and controlling shareholder Lo Ching had been detained by Shanghai police. Chief Financial Officer Jiang Shaoyang was also detained, Boxin said without elaboration.

The original Chinese Caixin story - 独家|承兴供应链融资诈骗案陷“罗生门” 到底谁在说谎？_公司频道_财新网

从案件初步情况看，以广州承兴营销管理有限公司（现广东中诚实业控股有限公司，下称广州承兴）为融资主体，借助苏宁、京东、中移动等应收账款，罗静通过多个资产管理平台公开募资，单笔募集资金在数千万至数亿元不等，年度收益率集中在7%-10%之间不等。

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4. János Kornai warns about China

Economists share blame for China’s ‘monstrous’ turn | OpEd by János Kornai - Financial Times $$

Chilling changes are taking place inside China. Former leader Deng Xiaoping sidestepped the question of capitalism versus communism, saying: “It does not matter if the cat is black or white so long as it catches mice.”

But it does matter to China’s present leader, Xi Jinping. He wants China to return to the classic communist system. His style is reminiscent of Stalinist times...

Everyone should think twice before helping China make devices which can be used in physical or digital warfare. The gates of universities should be open to Chinese students — except when they are seeking to learn how to build an arsenal for modern war.

Back in the 1940s, the US diplomat George Kennan argued that the best way to oppose communism was “containment”. This far and no further! Or more precisely: no further in this direction! What has happened already cannot be undone. But here we must stop, and we must take far more care to avoid carrying on in the role of Frankenstein.

The 1985 Cruise That Changed China | Foreign Affairs

All eyes were fixed on a man with elfin features behind thick-rimmed glasses, wearing a long-sleeved white shirt and no jacket: the Hungarian economist Janos Kornai. Behind him was an incongruous prop for a river cruise, a blackboard on which he had sketched out economic models. On his left, Ma Hong, one of China’s leading policymakers, listened attentively, and a few seats away, Xue Muqiao, China’s most famous economist, sat smoking. The American economist and Nobel laureate James Tobin and the Scottish economist Sir Alec Cairncross were also in attendance. Elsewhere in the room sat two young Chinese scholars: Lou Jiwei, now China’s finance minister, and Guo Shuqing, who currently governs Shandong, one of China’s richest provinces.

Remember this - George Soros | Remarks delivered at the World Economic Forum - January 2019

Last year I still believed that China ought to be more deeply embedded in the institutions of global governance, but since then Xi Jinping’s behavior has changed my opinion.  My present view is that instead of waging a trade war with practically the whole world, the US should focus on China. Instead of letting  ZTE and Huawei off lightly, it needs to crack down on them. If these companies came to dominate the 5G market, they would present an unacceptable security risk for the rest of the world...

China is not the only authoritarian regime in the world but it is the wealthiest, strongest and technologically most advance. This makes Xi Jinping the most dangerous opponent of open societies. That’s why it’s so important to distinguish Xi Jinping’s policies from the aspirations of the Chinese people. The social credit system, if it became operational, would give Xi total control over the people. Since Xi is the most dangerous enemy of the open society, we must pin our hopes on the Chinese people

Comment: People like Soros and Kornai have a unique view into authoritarian states.

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5. Xinjiang

Western countries rebuke China at U.N. for detention of Uighurs - Reuters

The unprecedented letter to the president of the forum, dated July 8, was signed by the ambassadors of 22 countries. Australia, Canada and Japan were among them, along with European countries including Britain, France, Germany and Switzerland, but not the United States which quit the forum a year ago.

It fell short of a formal statement being read out at the Council or a resolution submitted for a vote, as sought by activists. This was due to governments’ fears of a potential political and economic backlash from China, diplomats said.

UN: Unprecedented Joint Call for China to End Xinjiang Abuses | Human Rights Watch

“Twenty-two states have called China to task for its horrific treatment of Muslims in Xinjiang,” said John Fisher, Geneva director at Human Rights Watch. “The joint statement is important not only for Xinjiang’s population, but for people around the world who depend on the UN’s leading rights body to hold even the most powerful countries to account.”

The countries expressed concern about reports of large-scale arbitrary detention, widespread surveillance, and other violations against Uyghurs and other Muslims in Xinjiang. They urged China “to allow meaningful access to Xinjiang” for UN and independent international observers, and asked the high commissioner to keep the Human Rights Council (HRC) regularly informed on the situation.

China's fight against terrorism important part of global fights: envoy - Xinhua

Speaking at a Security Council open debate on threats to international peace and security, China's Permanent Representative to the United Nations Ma Zhaoxu said that China is also a victim of terrorism.

Facing the ongoing threat of terrorism and extremism, China has taken decisive measures to carry out counter-terrorism and deradicalization by law, has effectively contained the high incidences of terrorist activities at different locations, and has best guaranteed the basic right to development and life of people of all ethnicities, said the Chinese envoy.

The Mass Destruction and Desecration of Uyghur Mosques by China - Tue, Jul 16, 2019 at 4:00 PM | Eventbrite

Room 309, Marvin Center, George Washington University
800 21st Street, NW
Washington, DC 20052

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6. Billionaire pedophile case

A Billionaire’s Fall Spotlights Child Sexual Abuse in China - The New York Times

Wang Zhenhua, a prominent businessman and philanthropist in China, was detained by the police on July 1 for “personal reasons,” according to his company, Seazen Holdings. The company’s announcement followed articles in Shanghai media last week alleging that Mr. Wang had assaulted a 9-year-old girl...

Shang Xiaoyuan, the director of the family and child research center of Beijing Normal University and a director of the Child Welfare Protection Council of China, said studies had estimated that 1 percent of all Chinese children were raped and that many times more were put in sexual contact with adults. Girls’ Protection, a Chinese public welfare group, said in its most recent report that the cases made public were “only the tip of the iceberg.”

视频│上海警方对王某某、周某某执行逮捕现场曝光 - 国内 - 新京报网

video released of the official arrests of Wang and Zhou

Procuratorate approves arrest of two on suspicion of child abuse - CGTN

A procuratorate in east China's Shanghai City approved on Wednesday the arrest of two people, surnamed Wang and Zhou, on suspicion of child molestation, according to a statement by the Supreme People's Procuratorate.

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7. African Swine Fever

China swine fever hits small farmers and rural communities hard | Financial Times $$

A government campaign launched in 2014 to close hundreds of thousands of small pigsties to reduce rural pollution also forced villagers to pool their pigs into a single new facility.

Those trends cut the number of Chinese farms with fewer than 50 pigs from 80m a decade ago to less than 40m. By contrast, the number of commercial farms which own more than 50,000 pigs have increased from 50 to more than 300 over the same period, according to government data...

pork production will drop from 54m tonnes in 2018 to 38m tonnes this year, said Li Moyu, an analyst at Chinese brokerage Dongzheng. 

Higher prices will cause some pain to Chinese consumers but few expect social unrest from soaring prices. Chinese consumers have become w

Dim Sums: Rural China Economics and Policy: Livestock Disease Shadows, Imported Genetics are Bottlenecks

The comments by agricultural economics Professor Wang Mingli of the Chinese Academy of Agricultural Sciences were reported by No. 1 Business News on the release of his institute's report on challenges and countermeasures for supply-side structural reform in the agricultural sector...

Professor Wang claims that the epidemics are "fairly stable" with the improvement of disease prevention and control, but the potential for zoonotics that spread to both animals and humans in some region must not be underestimated. Prof. Wang estimated this year's reduction in pork output at 10 percent, cited farmers' hesitance to restock farms, big financial losses despite expectations of good prices, and stressed the importance of building the veterinary system and ramping up production of alternative meats to fill the shortfall in pork supplies. Prof. Wang warned that disease impacts on livestock markets do not dissipate easily and can last 3-to-5 years or even a decade or more.

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8. Special Party shares in Internet firms

China’s government mulls special stake in wallstreetcn.com as it looks to control the flow of information on trade, economics | South China Morning Post

The Cyberspace Administration of China (CAC), which regulates the country’s internet, smartphone applications and websites, is working on a plan to take a minority stake with super voting power in Shanghai Aniu Information Technology, the operator of the wallstreetcn.com service, according to several sources familiar with the matter.

The wallstreet.cn aggregation site, which provides free news and information about finance, trade and business, has been suspended since June 10 by the CAC for violating cybersecurity laws.

The stake, known as “special management shares” may be held via a local state asset supervision authority (SASAC) or government-backed investment fund, said the sources who declined to be identified for speaking about a matter under deliberation.

Beijing Pushes for a Direct Hand in China’s Big Tech Firms - WSJ $$ - Li Yuan 2017

An initial rollout of what the government calls “special management shares” started with two internet media startups. Regulators and the People’s Daily website are taking stakes of less than 2% in mobile news platform Yidian Zixun and Beijing Tiexue Tech Co., operator of a patriotic news site.

In exchange, the investors get to appoint a government official to the companies’ boards and have a say over their operations, people familiar with the deals said.

Internet regulator Cyberspace Administration, a chief force in the government’s management share plans and a stakeholder in Yidian Zixun, referred queries to the Propaganda Department

Question: So are we going to see a new wave of the forced sale of "special management shares" now, or is this program very targeted at smaller but influential firms? There are not Golden shares, they are Red shares...

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Business, Economy and Trade

Pricey Pork, Fruit Keep Consumer Inflation High - Caixin The consumer price index (CPI), which measures the prices of a select basket of consumer goods and services, rose 2.7% year-on-year in June, the same growth as the month before, which had marked the highest level since February 2018, according to data (link in Chinese) from the National Bureau of Statistics (NBS). The reading met the median forecast from a Bloomberg News survey of economists. The producer price index (PPI), which tracks the prices of goods circulated among manufacturers and mining companies, posted zero year-on-year growth in June, down from a 0.6% increase in the previous month, NBS data showed (link in Chinese). The reading missed the economists’ median forecast of a 0.2% increase and marked the lowest since August 2016.

Economic Watch: China's consumer inflation sees stable expansion, factory prices weaken - Xinhua Food prices grew 8.3 percent year on year last month, up from 7.7 percent in May. However, the prices dropped 0.3 percent on a monthly basis. In June, prices of fruits hit a record high by climbing 42.7 percent from a lower base last year. On a monthly basis, the prices were up 5.1 percent, contributing 0.11 percentage points to monthly CPI growth. NBS official Dong Yaxiu said price hikes of certain fruits resulted from the heavy precipitation in southern areas which affected the picking and transportation. The price of pork expanded 3.6 percent month on month due to tight supply.

China Car Market Gloom Persists as Wholesale Market Drags - Bloomberg The biggest car slump in a generation is hitting both manufacturers and dealers, and risks affecting the investment plans of auto companies that have for decades relied on the world’s largest market for growth. CAAM is forecasting “negative growth” in China’s passenger-car sales for the full year, and researcher LMC Automotive last month predicted a 5% decline.

China sees economic growth continuing in range of 6-6.5% - Reuters The Chinese government is confident that economic growth can remain within a range of 6-6.5%, Finance Minister Liu Kun said during a conference in Milan on Wednesday.

China Gives Conventional Vehicle Incentives a Little Gas - Caixin Under a proposed revision to the rules, carmakers that manage to produce a certain number of low-fuel consumption vehicles will have a slightly reduced requirement for the amount of EVs they must churn out, according to draft rules published Tuesday by the Ministry of Industry and Information Technology.

Yicai Global - Beijing's Income Lagged Spending by USD10.9 Billion in First Half as Tax Cuts Kicked In Spending rose 7 percent to CNY392.37 billion (USD57 billion) in the six months ended June, while revenue fell 2.5 percent to CNY317.09 billion, the city's finance bureau said in a report published yesterday that warned about the imbalance.

Court Upholds Ruling That Sent Two Peer-to-Peer Lending Executives to Prison for Life Shi Jianxiang, the actual controller of Kuailu who fled China in 2016 and is still on the run, will be dealt with in a separate case. // The WSJ reports Shi is living in LA Chinese Fugitive Living Large in Los Angeles

In Depth: Foreign Supermarket Brands Beat Chinese Retreat - Caixin Despite such efforts, Walmart’s China operations pulled in only $10.7 billion in sales last year, less than one-tenth of its international revenue, according to CNN. China Merchants Securities said in a research note that Walmart had in fact shuttered more than 40 outlets across 2017 and 2018, and it had closed 15 in the first half of this year.

State Council issues guideline on transportation finance duties - Gov.cn Six fields are included in the reform: highways, waterways, railways, civil aviation, postal service, and comprehensive transportation. Central finance will cover the macro management, special planning, policymaking, supervision and evaluation of national highways, bridges over boundary rivers, and cross-border crossing vehicle transportation.

IOUs sold on e-commerce platform - Global Times An online platform is facilitating creditors wanting to sell IOUs they hold to debt collectors at big discounts, but it appears few are taking up the offer. "Selling an IOU worth 3.2 million yuan ($470,793), give me 30 percent, the rest is all yours," reads an advertisement that was posted on a Chinese second-hand debt transfer platform that was attempting to sell a debt.

China Wants Its Own Goldman Sachs. It Has a Big Headache Instead - Bloomberg With hundreds of staff gathered to hear him speak at the Beijing Four Seasons hotel in January, Citic Securities Co. Chairman Zhang Youjun called out leaders of his firm’s international unit by name and questioned their ability to earn a decent return on capital. In a room full of investment bankers, it amounted to a stunning rebuke. For the executives at Citic’s CLSA unit who sat listening to Zhang in silence, it also marked the end of a tumultuous three-year relationship. Nearly all of them would quit over the next few weeks, kicking off a wave of more than 50 resignations that now threatens to upend China’s push to create a global investment-banking powerhouse.

Meicai Vegetable Tech Startup Seeks $500 Million - Bloomberg Meicai, which means “beautiful vegetable,” raised about $800 million in 2018 for a post-money valuation of $7 billion. It’s one of a crop of Chinese food and grocery delivery startups attracting capital from investors targeting a market that e-commerce hasn’t yet fully penetrated.

Land Transaction Area for 40 Chinese Cities Falls 16.6% in First Half - China Banking News A new report released by the Shanghai E-House Research Institute indicates that the 40 Chinese cities it monitors posted a collective land transaction area of 254.115 million square metres in the first half of 2019, for a decline of 16.6% compared to the preceding period and a YoY decline of 3.6%.

Shadow Banking as Share of Chinese GDP Seen Falling to 50% by End of 2019: Fitch Ratings - China Banking News “Shadow banking continued to contract in the first quarter of this year, but the pace eased compared to last year,” said Chen Guanru (陈冠如), director at Fitch Ratings, to 21st Century Business Herald. “Shadow banking as a share of China’s nominal GDP fell from 68% in 2017 to 55% last year. We expect that it will fall to around 50% by the end of this year.”

Police enter Tron’s Beijing office following Ponzi scheme suicide - Decrypt On Chinese crypto forums, many of the victims have been sharing their stories after the  fraudulent platform abruptly shut up shop last week. Chinese media reported that one woman committed suicide after losing money on the scheme.

Huawei's Unusual $1.5 Billion Loan Involves Only Chinese Banks - Bloomberg Huawei Technologies Co. plans to raise the equivalent of $1.5 billion from a group of Chinese lenders, people familiar with the matter said, the company’s first major debt financing since U.S. authorities restricted its access to key suppliers in May.

Japan-South Korea Trade Spat May Play Into China's Hands - Bloomberg Last week, Japan moved to restrict exports of materials used to make semiconductors and smartphone screens to its North Asian neighbor, citing grievances between the two countries dating back seven decades. The curbs threaten the flow of components that feeds the world's hunger for technology hardware. It may also hand Beijing a victory.

上半年企业专利授权量谁最多？华为再登榜首，三甲中唯一的国企竟是它…… | 每经网 China said now it has 1.74 million patents, reaching one of the targets in the 13th Five Year Plan. Huawei again ranks 1st in applying most patents in first half of the year.

Politics and Law

河北省委书记、省长、政法委书记、秘书长等到北戴河调研 - 综合 - 新京报网 Hebei Party boss, together with his deputies, visited checkpoints and police bureaus in Beidaihe, telling the policemen to make sure the city is “absolutely safe”, adding that the safety of tourists is a political task. Prepping for whatever happens at Beidaihe in August...

Xi highlights Party building in central Party, state institutions - Xinhua To take the lead in ensuring "two upholds" is the first and foremost task of enhancing Party building in central Party and state institutions, he said. "The institutions should actively respond to what the CPC Central Committee advocates, implement what it decides, and stop what it forbids," he said. Xi noted that central Party and state institutions should be in the forefront in theoretical study, and should apply their gains from the study in fulfilling their own duties and advancing the development of causes. Special training should be carried out among young cadres on consolidating their political theory, strengthening their political orientation, improving their political ability and guarding against political risks, he said.

Senior lawmakers study CPC's historic mission in new era - Xinhua he leading Party members group of the National People's Congress (NPC) Standing Committee on Wednesday wrapped up a three-day meeting dedicated to studying the historic mission of the Communist Party of China (CPC) in the new era. Li Zhanshu, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, chairman of the NPC Standing Committee and head of its leading Party members group, presided over the meeting. 全国人大常委会党组围绕“新时代党的历史使命”进行专题学习 栗战书主持并讲话--时政--人民网

全面开展创建“枫桥式公安派出所”活动努力推进更高水平的平安中国建设--法制网 Minister of Public Security Zhao Kezhi writes back to the officers in a Hangzhou police station who had written to him about their efforts to develop the "Fengqiao Experience", encourages them and all police stations nationwide to construct "Fengqiao-style police stations". Good background here from China Media Project on Xi's push to revive and update the Mao-era "Fengqiao Experience"

为有牺牲多壮志，敢教日月换新天——重返红军血战现场-新华网

Case triggers calls for crackdown on ‘unqualified’ foreign teachers - Global Times The case has aroused widespread concerns among parents and students, with many calling for a nationwide inspection of the qualifications of foreign teachers at English learning organizations.  The hashtag "foreign teachers from EF detained for taking drugs" attracted nearly 70 million views on Sina Weibo as of press time.

Two ex-employees from Chinese online recruitment platform Zhaopin on trial for massive personal data theft - KrASIA The pair allegedly helped a third party sell 160,000 CVs from the recruitment platform on Taobao

China activist arrested for 'promoting terrorism' - CNA Zhang Baocheng, 60, was a member of the now-defunct New Citizens Movement, which campaigned for democracy and government transparency.

Education First teachers, foreign students held in China on drugs charges | South China Morning Post 16 foreigners, including students, among 19 people detained in Jiangsu province narcotics crackdown One foreign national is in criminal detention, indicating imminent formal charge

Foreign and Defense Affairs

全面从严治军必须打赢的攻坚之战——军地合力推进全面停止军队有偿服务工作纪实-新华网 Xinhua said after a three-year overhaul, the PLA has pulled out from all of its commercial activities.

Chinese troops in first joint medical drill with major Nato power in Europe | South China Morning Post Retired PLA colonel Yue Gang said that while the exercise may not have much significance in terms of combat ability, it was important for the international efforts of China’s military...“The PLA in the future will need to go abroad to protect China’s overseas interests in countries along the Belt and Road Initiative, and if there could be some basic mutual trust and understanding with Nato forces, the risk of potential conflict could be greatly mitigated,” he said, referring to Beijing’s vast scheme to build ports, roads and railways across Asian, African and European countries.

China’s maritime expansion reflects a curious mix of ambition and paranoia -The Economist Hu Bo, a prominent naval strategist at Peking University, suggests that China may need perhaps two more overseas military bases between Djibouti and the South China Sea, because Djibouti would be too far from home “once we are in an emergency, say on the brink of war”. Whereas America gained many bases by fighting world wars, China must seek bases through discreet negotiations. Some might be primarily commercial in peacetime, he suggests.

Slovak leader tells Chinese minister of human rights worries - AP President Zuzana Caputova met with Chinese Foreign Minister Wang Yi in the Slovak capital of Bratislava on Wednesday. The president’s office released a statement afterward saying Caputova “expressed concerns and worries about the worsening state of human rights in China.”

Banned Chinese Security Cameras Are Almost Impossible to Remove - Bloomberg A complex web of supply chain logistics and licensing agreements make it almost impossible to know whether a security camera is actually made in China or contains components that would violate U.S. rules.

Huawei builds first ever 5G network in Europe - Xinhua Chinese tech giant Huawei has built next-generation 5G mobile phone network in Monaco, making the sovereign city-state in the French Rivera the first European country to be fully covered by 5G.

Yicai Global - Lord Mayor of London Plans China Visit to Shore Up Financial Ties Lord Mayor of the City of London Peter Estlin and London Stock Exchange Chief Executive Nikhil Rathi will visit China this week in order to strengthen ties between the British and Chinese capital markets.

China to launch 100 additional satellites by 2025: official - Global Times Nearly 100 Chinese satellites will be launched into space before 2025, adding to the more than 200 that are already in orbit, said a Chinese official on Tuesday. The announcement was made by Yu Qi, an official at the China National Space Administration, at a conference held in Beijing, news portal chinanews.com reported on Tuesday.

China refutes rumor of ship escort plan at Malacca Strait - Xinhua According to a notice from the Ministry of Transport, the security level for Chinese vessels sailing through the Strait of Malacca has been upgraded to its highest, Level Three. Rumours have it that China will send warships to the area for escorting Chinese vessels, as claimed by some media reports.

Beijing slams Stockholm for declining extradition - China Daily "Sweden's top court has ignored Qiao's crimes and the solid evidence collected by the investigation teams of China and Sweden. The extradition refusal openly challenges the law and tolerates crimes by offering shelter to suspects," said an official at the NCS, who asked not to be named. "Sweden should not become a haven for criminals," he said.

Russia approves new Silk Road-style 1,250-mile motorway connecting China to Belarus as Putin and Xi plot to dominate global trade – The Sun The Meridian Highway will run from Russia’s border with Kazakhstan all the way to its frontier with Europe.

China sends police officers for joint patrol in Croatia - Xinhua A group of eight Chinese police officers are heading for Croatia for a joint patrol with their Croatian counterparts.

Beijing should avoid ‘punishing’ Canada over Huawei case, cautions Ottawa’s ex-ambassador to China | South China Morning Post “Anything that is more negative against Canada will help the Conservatives, [who] are much less friendly to China than the Liberals,” John McCallum, a veteran Liberal Party member, told the South China Morning Post in an interview in Hong Kong on Monday. “I hope and I don’t see any reason why things will get worse, it would be nice if things will get better between now and [Canada’s federal] election [in October].”

China to boost Pacific military presence - AFR Defence Minister Wei Fenghe told a gathering of military chiefs from South Pacific and Caribbean nations in Beijing on Monday that the BRI would provide a "framework" for greater military co-operation

Duterte pushes US to send entire 7th Fleet into South China Sea - Business Insider "I have a proposal," Duterte said. "If America wants China to leave, and I can't make them ... I want the whole 7th Fleet of the armed forces of the United States of America there." He added, "When they enter the South China Sea, I will enter. I will ride with the American who goes there first. Then I will tell the Americans, 'Okay, let's bomb everything.'"

China’s largesse in Tonga threatens future of Pacific nation - AP Dozens of Tongan bureaucrats take all-expenses-paid training trips to Beijing each year, and China has laid out millions of dollars to bring 107 Tongan athletes and coaches to a training camp in China’s Sichuan province ahead of this month’s Pacific Games in Samoa...China also offered low-interest loans after pro-democracy rioters destroyed much of downtown Nuku’alofa in 2006, and analysts say those loans could prove Tonga’s undoing. The country of 106,000 people owes some $108 million to China’s Export-Import bank, equivalent to about 25% of GDP.

U.S., Taliban talks end after rival Afghans agree on 'roadmap for peace' - Reuters The U.S. envoy, Zalmay Khalilzad, met Taliban officials briefly...Khalilzad, in a post on Twitter, said he was heading to China then back to Washington “to report and consult on the Afghan peace process”.

China should try to keep talking and stop looking for fights in US trade war, says leading professor | South China Morning Post Wang Jisi, dean of international relations at Peking University, told a forum he disagreed with China’s official narrative towards the trade war – that it is open to talks but remains determined to “fight till the end” – and argued its policies should be more consistent.

Wife of Chinese billionaire parliamentarian Zheng Jianjiang sues Vancouver over vacant-home tax bill on US$20 million property | South China Morning Post Petition lodged by He Yiju says her home was ‘uninhabitable’ and contaminated by asbestos and faeces when it was hit with a US$190,000 tax for being unoccupied He’s tycoon husband has been a deputy of China’s National People’s Congress since 2013

Google denies link to China’s military over touch-screen tools that may help PLA pilots | South China Morning Post An AI weapon researcher working for the People’s Liberation Army said it was possible for foreigners from international technology companies to work on China’s defence-related projects. “They will have no security clearance to get access to sensitive information, for sure,” said the researcher, who requested not to be named because of the sensitivity of the issue. “But it does not matter. What we need is their brain. “For instance, they can be asked to develop an algorithm but not briefed on the details of how the algorithm would be used.”

Former State Department Employee Sentenced for Conspiring with Chinese Agents | OPA | Department of Justice Candace Marie Claiborne, a former employee of the U.S. Department of State, was sentenced today to 40 months in prison, three years of supervised release and a fine of $40,000 for conspiracy to defraud the United States, by lying to law enforcement and background investigators, and hiding her extensive contacts with, and gifts from, agents of the People’s Republic of China, in exchange for providing them with internal documents from the U.S. State Department.

“Not many nations get a second chance at democracy”: Mohamed Nasheed | ORF Speaking extensively on a hot button issue, Nasheed revealed that India’s GMR company submitted a $77 million quotation for the Male-Hulhumale bridge but the project went to China's CCCC company which has sunk Maldives into a $300 million debt for this project alone. Maldives owes “various Chinese companies” over $3.4 billion and will double down on renegotiating the debt, Nasheed said.

Taiwan

【国际锐评】美企图“以台制华”是在玩火_CCTV Wednesday CCTV "International Sharp Commentary" on the US arms sales to Taiwan, says the US is playing with fire by using Taiwan to contain the PRC:

Taiwan arms sale slammed - Global Times Military experts said the Chinese mainland military enjoys overwhelming superiority to the island's, even if Taiwan gets US weapons. The People's Liberation Army, which retains "liberation" in its name, has developed rapidly in the past years with certain weapons and equipment able to rival the US' ones; and it could simply outnumber Taiwan troops, a mainland military expert, who asked not to be named, told the Global Times.

“以台制华”注定徒劳 “挟洋自重”没有出路（钟声） Zhong Sheng on the arms sales

Tech and Media

China Internet Report 2019 - South China Morning Post This report, informed by on-the-ground reporting by the South China Morning Post and Abacus, offers insights into China’s tech trailblazers and the big important trends shaping the world’s biggest internet community.

How Chinese payments pioneer Lakala lost the battle against the rising tide of WeChat Pay and Alipay - KrASIA

In 'The Farewell,' a family drama straddling East and West - AP “The Farewell,” which A24 will release in select theaters Friday, stars Nora Lum (aka Awkwafina) as Billi, a stand-in for Wang. One of the co-stars, Nai Nai’s sister Hong Lu, plays herself. Several of the locations are where Wang’s family drama actually played out. Wang’s parents visited the set, as did (spoiler alert) the real Nai Nai, who at 86 has far outlived her original prognosis but remains in the dark about her family’s 2013 scheme.

Yicai Global - Apple Opens Its First China Accelerator to Boost App Development The accelerator, in Shanghai's Pudong New Area, is Apple's second worldwide, The Paper cited the firm's Managing Director for the Greater China Region Isabel Ge Mahe as saying. It opened yesterday and aims to host developers up to 5,000 times a year, serving as a communication center that offers professional guidance from Apple experts via meetings, experiments and one-on-one consultations.

Citic Subsidiary Gets Telecom Service License - Caixin Citic Networks Co. Ltd., a subsidiary of state-backed conglomerate Citic Group Corp., won a license earlier this month to offer basic telecommunication services nationwide, Caixin has learned from a source close to Citic Networks.

Beijing Rapper J-Fever on Capturing the Sound of the Capital – Thatsmags.com The latest duo to doff their hat to the city are rapper J-Fever (also known as Little Tiger, or xiao laohu) and producer Soulspeak. In explaining their album, Beijing Ma? J-Fever tells us “I wanted to try to write about the temperament of Beijing, the kind of sloppy, careless, casual and absurd calm that exists in the city.”

Netflix Expands Chinese Content With Series, Film Additions – Variety The six upcoming Chinese-language licensed series and films lean heavily on productions from Taiwan and Hong Kong. They include an expansion of “A Thousand Goodnights,” from Taiwan’s Sanlih TV; the previously announced pickup of Taiwanese art house thriller “Cities of Last Things”; and”Sexy Central,” a female-led drama from Hong Kong’s China 3D Digital.

Society, Arts, Sports, Culture and History

China issues guideline to strengthen care for de facto orphans - Xinhua According to the guideline, de facto orphans are children whose parents are under one of the following conditions: severe disabilities or illness, serving sentences in jail or under detention, in compulsory isolation for drug rehabilitation or restriction of personal freedom, or cannot be contacted...Official data show China now has around 500,000 de facto orphans.

Rihanna's Harper's Bazaar China Cultural Appropriation On Monday, the magazine released the August 2019 cover and while the images are beautiful, some people on the Internet are speculating if the gorgeous captures are considered cultural appropriation.

Christian Churches Repurposed for Entertainment Activities - Bitter Winter 

Energy, Environment, Science and Health

National parks draft law could arrive by year's end - China Daily "Due to a lack of relevant experience and the complexity of the lawmaking procedure, it has taken more time than we expected, but the draft will be unveiled by the end of this year," said Tang Xiaoping, deputy director of the National Park Management Office under the administration.

China’s Two Oil Giants to Collaborate on Oil and Gas Exploration - Caixin 

Education

Lottery-Based Private School Admission Worries Chinese Parents - Sixth Tone According to the guidelines, released Monday, both public and private schools in the compulsory education system should start their enrollment processes at the same time, and private schools should select students through a random computerized system if applications exceed quotas.

Chinese group buys UK schools network | Financial Times $$ right Scholar, the Nasdaq-listed Chinese schools group, has paid £150m to buy CATS Colleges, a network of schools in the UK, China and North America, in the latest sign of growing Chinese interest in international education.