And we are back, after a much longer than planned hiatus. Happy 2017, I hope it turns out to be a great year for you.
Do not expect it to be a great year for US-China relations. We are getting a clearer picture of President Trump’s probable approach to China, and it looks like it will feature much more friction and tension. We were headed that way under a Clinton presidency as well, but the change in approach is likely to be Yuger under Trump. The financial markets do not seem to yet appreciate the increased risks of a real US-China trade war, and the impact that would have on US companies with material exposure to supply chains in the PRC and/or PRC sales. Buckle up…
Regular readers will notice some formatting changes (and maybe some bugs) in the newsletter, and there will be more over the next few weeks. Comments and tips are always welcome.
THE ESSENTIAL EIGHT *
1. Wilbur Ross’s Chinese Love Affair – POLITICO Magazine Neither the Trump transition nor Ross’s office responded to questions about why his views had evolved over the years from a mix of muted praise and nuanced criticism to strident China-bashing. And to be sure, Ross has long advocated tools like short-term tariffs and a value added tax that would apply to imports from China and elsewhere. But his positions have been nothing like those of Navarro, one of America’s most prominent China hawks. And Ross’s reversals come after a lengthy period of warming to, then embracing, the country. // Comment: Ross is brilliant at reading the tea leaves, he has made his fortune, no reason to believe he will be a moderating force instead of wholeheartedly embracing a much tougher line towards China
Related: Trump taps Lighthizer for trade representative | TheHill “He has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans,” he added. “He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.” // Comment: His 2010 testimony before the US China Economic and Security Review Commission: Evaluating China’s Role in the World Trade Organization Over the Past Decade (PDF). Expect massive increase in trade tensions with China, if not an outright trade war
Related: Chinese Access to U.S. Semiconductor Industry May Be Curbed – WSJ The report, being prepared by President Barack Obama’s chief science adviser and due to be published before he leaves office this month, will include recommendations aimed at bolstering protection of an industry deemed critical to national security, according to people familiar with the study…The report will give guidance to CFIUS on China’s strategic efforts to dominate the semiconductor market and could lead to new export controls and restrictions on joint-ventures with Chinese firms, according to industry officials. // Comment: Given China’s announced industrial policy to build an indigenous semiconductor industry and the Communist Party’s view of the US as its enemy it is hard to see why any investment in or M&A of US semiconductor firms should be allowed. Artificial Intelligence, Robotics and Big Data investment/M&A should also be restricted.
Related: China called invulnerable to trade war – People’s Daily Online trade is no longer a main factor contributing to the nation’s GDP growth, and the country has made preparations in the past few years for taking on the challenge of a possible rise in protectionism. They also said that trade was not among the key tasks assigned by the just-completed Central Economic Work Conference, a yearly top-level decision-making meeting to map out the development strategy for the coming year.
2. [视频]国家主席习近平发表二〇一七年新年贺词_CCTV Comment: CCTV video of Xi’s New Years Speech, wonder why he is at a podium this year and not at his desk.
Related: China’s Xi Vows to Defend Maritime Interests, Sovereignty in ’17 – Bloomberg In a New Year’s speech published Saturday by Xinhua, Xi said the outcome of reforms should benefit more people and he vowed to address difficulties in areas such as employment, education, health care and housing. He also said the country adheres to peaceful development and resolutely safeguards its sovereignty and maritime interests. “Chinese people will not agree to whoever that wants to make trouble on this,” Xi said in the annual address, referring to the country’s sovereignty rights and maritime interests. China’s claims to territory in the South China Sea have been contested by other nations.
3. China issues first national RED ALERT for ‘severe fog’ of 2017: Shanghaiist Just three days into the new year, China has issued its first red alert for “severe fog” of 2017. But not only is this red alert the first of the year, it’s also the first ever national red alert for fog. Over the past few days, northern, eastern and central China have been blanketed in a thick layer of grey haze, reducing visibility to nearly nothing. It’s expected to stick around until at least Wednesday. // Comment: better than starting the year with a market crash and a circuit breaker debacle? Things are never easy in the PRC
Related: Time-Lapse Video Shows Beijing Swamped by a Tide of Smog – The New York Times The video, just 12 seconds long, shows what appears to be toxic smog descending on buildings over 20 minutes, with nearby structures becoming almost unrecognizable. The video was by taken by Chas Pope, a British worker, and posted on Monday, just as the city has been grappling with yet another extended bout of pollution. // Comment: I believe shot from the Rosewood Hotel in Beijing
Related: Three Mothers, Under Smog | Sixth Tone In China’s heavily polluted north, women find different ways to protect their children.
4. Chinese president accuses fallen top officials of ‘political conspiracies’ | South China Morning Post Chinese President Xi Jinping has accused five disgraced Communist Party heavyweights of involvement in “political conspiracies”, signalling power struggles – and not just corruption – led to their downfalls. In a keynote speech to party leaders in October, Xi said Zhou Yongkang, Bo Xilai, Guo Boxiong, Xu Caihou and Ling Jihua “all engaged in political conspiracy activities”, according a copy of the address published by Xinhua on Sunday. // Comment: Lead piece in the first issue of Qiushi of 2017, about a lot more than these cases. The discipline/ideology purification campaign, positioning for the 19th Party Congress, under the auspices of what I like to call the intraparty Cultural Revolution, will continue: 在党的十八届六中全会第二次全体会议上的讲话（节选） “ “绳墨之起，为不直也。” 这次全会抓住加强和规范党内政治生活、加强党内监督这两个问题，就是坚持问题导向。党的十八大以来，随着全面从严治党不断推进，党内存在的突出矛盾和问题暴露得越来越充分。周永康、薄熙来、郭伯雄、徐才厚、令计划等人，不仅经济上贪婪、生活上腐化，而且政治上野心膨胀，大搞阳奉阴违、结党营私、拉帮结派等政治阴谋活动。他们在政治上暴露出来的严重问题，引起我深入思考。3年多来，我多次强调要从政治上认识和抓好全面从严治党。”
Related: China’s top party cadres pledge loyalty to Xi Jinping in Mao-style self-criticism session ahead of reshuffle | South China Morning Post It was not the first time the highest-ranking officials read out Mao-style self confessions in Xi’s presence. He introduced these “democratic life sessions” at all levels of the party in 2013, to consolidate his power and to help fight corruption. // Comment: Nearly 16 minute CCTV Evening News report on the 12.26-27 Democratic Life Meeting 中共中央政治局召开民主生活会 对照贯彻落实党的十八届六中全会精神 研究加强党内政治生活和党内监督措施 中共中央总书记习近平主持会议并发表重要讲话 None of them look very happy, though no video of red, sweating faces. And no aides seen in the video, just the Politburo members. It looks to be another rough year for PRC cadres. Those Hu-era excesses must now seem like some bacchanalian dream.
Related: 学习时报-民主生活会的信号塔和标杆尺 最初八项规定从中央政治局管起，现在中央八项规定已经深入人心，在全党乃至全国把规矩和尺度立了起来。今天，民主生活会样板从中央政治局开起，无声的命令、强大的感召力一定会让中国共产党各级组织的民主生活会焕发出新的活力，迈上新的台阶。// Comment: Study Times on the importance of those democratic life meetings. Cadres better to accuse and sweat…
Related: [视频]中共中央政治局召开会议 研究部署党风廉政建设和反腐败工作 中共中央总书记习近平主持会议_CCTV Comment: CCTV on Politburo meeting to sum up 2016 disciplinary work, announces that the CCDI 7th Plenum will meet January 6-8. Any tiger scalps to fall around the meeting?
5. A human rights activist, a secret prison and a tale from Xi Jinping’s new China | The Guardian Peter Dahlin spent 23 days in a ‘black prison’ in Beijing, where he says he was deprived of sleep and questioned with a ‘communication enhancement’ machine. Here he tells the story of his incarceration and expulsion from the People’s Republic
Related: Q & A with Peter Dahlin, the Swedish NGO Worker Who ‘Endangered the National Security’ of China « China Change This Q & A can be read as a companion piece to the Guardian report. It focuses more on Dahlin’s work, the interrogations, and the legal features of his case. Given that China’s “Law on the Management of Foreign Non-Governmental Organizations” took effect on January 1, 2017, we hope the conversation offers insight and perspective. – The Editors
Related: Uncertainty Over New Chinese Law Rattles Foreign Nonprofits – The New York Times China’s Ministry of Public Security opened the line last month to answer questions about the new law regulating foreign nonprofit organizations, which takes effect on Sunday. But this week and last, calls went unanswered, exemplifying the uncertainty that still surrounds the law, raising concern among thousands of nongovernmental organizations about their ability to continue their work in the new year.
Related: Couple Held in China Are Free, but ‘Even Now We Live Under a Cloud’ – The New York Times The Garratts suspect they were unwitting pawns in a gambit by the Chinese government to prevent Canada from extraditing a Chinese spy to the United States. The detention of the couple transfixed Canada and proved deeply damaging to the country’s relations with China. The couple’s account provides a rare glimpse into the workings of China’s opaque state security system. Their interrogations may also reveal clues about the vast reach of China’s global espionage network and the lengths to which the Chinese government will go to protect it. During the couple’s monthslong detention, for example, they said, they were frequently threatened with execution or told that they would be sent to a North Korean gulag.
Related: China’s New Foreign NGO Law: A Conversation with Sophie Richardson by CSIS In this episode, we welcome Dr. Sophie Richardson as we discuss the implications of the law for China’s development as a modern society and a country that aims to play a bigger role in global governance. // Comment: Big fan of the ChinaPower Podcast
6. China state broadcaster rebrands in international push-AP The broadcaster published a congratulatory letter from President Xi Jinping on Saturday urging the newly launched CGTN to “tell China’s story well, spread China’s voice well, let the world know a three-dimensional, colorful China, and showcase China’s role as a builder of world peace.” The government has long grumbled about the Western news media’s hold on international discourse and has spent vast sums in recent years to enhance its own influence and shape global opinion, with CCTV as one of its spearheads. The broadcaster has channels in English, Arabic, French, Spanish and Russian, and production centers in Washington and Nairobi. // Comment: No matter what it is called remember that it is still an external propaganda organ of the Chinese Communist Party
Related: President Xi urges new media outlet to ‘tell China stories well’-Xinhua Liu Yunshan, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, said CGTN should take responsibility for bridging China with the rest of the world. CGTN should put news content first, highlight new ideas and strategies of state governance with Xi as the core, tell stories about China’s development, explain China’s path, theory and contribution, and have a voice in major global affairs and international issues, Liu said. Liu called on CGTN to encourage media integration and use new technology to become a media brand with global influence.
Related: The Making of a Good Party Reporter – China Media Project Answering this question is the thankless task of an article in the most recent edition of Seeking Truth, one of the Party’s leading journals of theory and policy. And, just as thanklessly, we summarise the article’s main points here to help readers better understand press policy in the Xi Jinping era. The Seeking Truth article, attributed in the byline to the Party Committee of the All-China Journalist’s Association — an official industry organisation purporting to represent the interests of media professionals but more importantly representing the Party’s interests to and through journalists — explores the “four directions” (四向) formula outlined by Xi Jinping in November, and pledges to lead all journalists in enacting them as the “four actions” (四做). // Comment: Remember this next time you meet someone from CGTN who says they are a reporter/journalist
Related: 全国宣传部长会议在京召开 刘云山出席并讲话_CCTV Comment: Nationwide propaganda officials meeting held in Beijing, outlines the propaganda priorities for 2017 // 刘云山指出，做好今年宣传思想工作，要在整体推进中重点发力。要深化习近平总书记系列重要讲话精神学习研究宣传，加强对治国理政新理念新思想新战略宣传阐释，更好用党的理论创新成果武装头脑、指导实践。要充分展示党的十八大以来各项事业取得的成就和经验，深入宣传以新发展理念引领经济发展新常态的生动实践，宣传深化供给侧结构性改革的进展成效，积极做好热点问题舆论引导。要持续推进社会主义核心价值观建设，注重家庭、家教、家风，发挥法治保障作用，强化良好政治文化对主流价值的引领。要坚持把社会效益放在首位，深化文化体制改革，加快文化事业、文化产业发展，推出更多优秀文化产品。要切实做好对外宣传工作，加强对外传播能力建设，提升讲好中国故事的能力，增强我国国际话语权 // Comment: English summary: Senior CPC official calls for better publicity work-Xinhua. Do not be fooled, this is not “publicity” it is propaganda, the Chinese term is 宣传
Related: Propaganda With a Millennial Twist Pops Up in China – The New York Times The group has recorded a half-dozen patriotic music videos, most of them in English, featuring songs about China’s claims in the contested South China Sea and Mao’s legacy. In one about American attempts to spread democracy, it sings: Democracy, hypocrisy, false liar Trying to use invisible bullets to get money, huh The world is not yours, now you listen Outta our homeland and get back to North America…Some of the videos have been viewed millions of times, thanks in part to the support of the Communist Youth League and state news outlets. Others have had only mild success.
Related: Chinese Propaganda Video Warns of West’s ‘Devilish Claws’ – The New York Times But the new video ends on a reassuring note. The dark images and language give way to swelling melodies and images of a bright dawn over the Great Wall. There are pictures of smiling people and of muscular People’s Liberation Army troops. “Thoroughly expelling ‘color revolution’ from China will be a long war,” the video warns. But at the end it declares, “If there is war, we will answer the call.” // Comment: Disturbing how the propaganda authorities are preparing people for the possibility of war, and how casually some talk about war with the US as inevitable
Related: My Choice to Advertise My Country, Not a Company | Sixth Tone Newly conscious of China’s role in current affairs, Yang has since decided there’s more she can do for her country than make advertisements. After more than five months interning at the All-China Youth Federation in Beijing, where she manages the organization’s accounts on social media platforms Twitter and Facebook, Yang is nearing graduation and hopes to join the Ministry of Foreign Affairs or the Publicity Department of the Communist Party of China Central Committee. Yang talks to Sixth Tone about her growing interest in politics and plans for her future. The interview has been edited for brevity and clarity.
Related: President Signs Portman-Murphy Counter-Propaganda Bill into Law – Newsroom – Rob Portman U.S. Senators Rob Portman (R-OH) and Chris Murphy (D-CT) today announced that their Countering Disinformation and Propaganda Act – legislation designed to help American allies counter foreign government propaganda from Russia, China, and other nations – has been signed into law as part of the FY 2017 National Defense Authorization Act (NDAA) Conference Report.
Related: U.S. quietly creates ‘Ministry of Truth’ to counter ‘other’ information – People’s Daily Online On December 23, 2016, President Barack Obama signed the National Defense Authorization Act for Fiscal Year 2017 into law. Buried deep inside the Act is a little-known provision called the Portman-Murphy Counter-Propaganda Bill. The Bill requires the U.S. Department of State to set up and run a “Ministry of Truth” to counter online information from China and “other enemies” of the U.S. // Comment: Apparently written without irony
7. The Taiwanese see themselves as Taiwanese, not as Chinese – The Washington Post ROC residents increasingly identify as Taiwanese rather than Chinese. That identity has changed significantly since the island became a democracy in the 1990s. In 1991, ROC and PRC representatives met with one another for the first time since the 1949 civil war. At that point, about one-fourth of Taiwan’s residents identified themselves exclusively as “Chinese”; 17.6 percent as exclusively “Taiwanese”; and nearly half said both Chinese and Taiwanese. But by 2014, only 3 percent still identified exclusively as Chinese — and more than 60 percent Taiwanese, hovering around there ever since. Today, only one-third of Taiwan’s residents think of themselves as both Chinese and Taiwanese. Among those who are 29 or younger, born after martial law ended in 1987, 78 percent hold an exclusively Taiwanese identity — as do nearly 70 percent of people younger than 40. If this trend continues, a solely Taiwanese identity will prevail as residents’ consensus. // Comment: Beijing’s idea of “peaceful unification” is a fantasy given the trends within Taiwanese society. So does Xi settle for the status quo, just let it go, or go for it with the PLA?
Related: Taiwan’s President Accuses China of Renewed Intimidation – The New York Times “Step by step, Beijing is going back to the old path of dividing, coercing and even threatening and intimidating Taiwan,” she told journalists in Taipei, the capital, at a year-end news conference.
Related: 蔡英文年终讲话对大陆倒打一耙：彻底激怒国人_微博头条 Comment: PRC netizens not happy with Tsai’s comments. Next up will be her two transit stops in the US going to and returning from her Latin American trip.
Related: Chinese trolls jumped the firewall to attack Taiwan’s military and president Tsai Ing-wen on Facebook — Quartz Wei’s move was supported by many Chinese internet users after it was reported in state media. On New Year’s Eve, a group of Chinese trolls leapt over the Great Firewall, Beijing’s elaborate censorship mechanism, to reach Facebook. They flooded the pages of Tsai, the Taiwanese army, and independence-leaning news outlets such as Apple Daily and Sanlih News with lyrics of the Chinese national anthem and other pro-China images.
8. 电视专题片《打铁还需自身硬》上篇《信任不能代替监督》—中央纪委监察部网站 Comment: CCDI and CCTV launch three part documentary “To Forge Iron, One’s Own Self Must Be Strong”, first episode aired January 3, first episode embedded in this link. Wang Qishan’s attachment to House of Cards does not show through, at least in the first episode…
Related: 查办过薄熙来案的中纪委高官魏健落马，心态是如何转变的？今天播出的《信任不能代替监督》中，有一名纪检高官是中纪委第四纪检监察室原主任魏健，他是十八大之后中纪委机关首个被调查的厅局级领导干部，曾经参与查办过薄熙来案、戴春宁案等多起大案要案。他被调查的消息在同事中间也引发了不小的震动。// Comment: The first episode of this new CCDI documentary features former CCDI official Wei Jian who helped investigate Bo Xilai. Wei is now jailed for corruption
Related: 中纪委证实第九监察室原副主任明玉清被查处_中华网 和《永远在路上》相比有什么区别和新亮点？ 都是由中央纪委宣传部、中央电视台联合制作，连宣传片的画风都保持一致，那你肯定好奇：和前不久播出的《永远在路上》相比，《打铁还需自身硬》有什么不同之处？又有哪些新亮点？ 《永远在路上》八集全面讲述十八大以来党中央全面从严治党的坚定决心、行动和成效，而《打铁还需自身硬》，专门从加强纪检干部队伍建设这个角度，讲述十八大以来纪委系统是怎么防止“灯下黑”、“清理门户”的。// Comment: More on the new CCDI TV series, says different from the earlier “Forever on the road” as the new one focuses on the CDI system and keeping its cadres clean…
BUSINESS, ECONOMY AND TRADE *
Chinese investors shrug off forex scrutiny-FT Chinese investors and financial advisers on Tuesday shrugged off stricter government vetting of foreign exchange purchases, saying the measures were unlikely to have a dramatic impact on overseas spending.
China’s yuan may see more volatility vs dollar after basket change | Reuters The China Foreign Exchange Trade System (CFETS) said last week it was changing the composition of the CFETS basket that is used to set the yuan’s daily value. Starting on Jan. 1, the number of currencies in the basket was increased to 24 from 13. China has been promoting use of the index, which references a basket of currencies of its trading partners, partly to divert attention from the yuan’s slide against the dollar, which comes as U.S. President-elect Donald Trump has threatened to label Beijing a currency manipulator.
Five Things to Know about Personal Forex Purchases in China – Caixin During the New Year weekend, China’s State Administration of Foreign Exchange (SAFE) amended rules governing the purchase of foreign currency by Chinese citizens. Contrary to earlier widespread rumors, the exchange did not lower the amount that can be exchanged by individuals, but it did tighten scrutiny over the purchases. // Comment: No reports of panic on the first day
7 Things to Know about China’s Bond Rout – Caixin It all started with a rumor that proved true. A midsize brokerage firm, Sealand Securities, was said to be reneging on a deal involving bonds worth originally 10 billion yuan ($1.44 billion) on Dec. 14. It soon turned out that it had made similar under-the-table repurchase agreements with more than 20 financial institutions to buy back bonds worth more than 20 billion yuan. Because those bonds were now trading at a loss, Sealand did not want to complete the agreements and buy them back. And what made it think it could do that? Because it said the seal used for all the repurchase agreements was forged. This had a far-reaching impact on the bond market, regardless whether a firm was directly involved in the troubled agreements or not. Sealand later said it had solved the disputes with the financial institutions after the direct intervention of high-level securities regulatory officials.
Cities offer a glimpse of China’s economic future-FT Experts broadly see three possibilities: an optimistic scenario in which aggressive reforms enable consumption to develop fast enough to take up the slack from the decline in heavy industry; a “Japan scenario” in which delayed reforms lead to a decade of slow growth, or an acute financial crisis sparked by a wave of defaults. The Financial Times travelled across China to three cities — stretching from the south-west to the east and north — that are already beginning to reflect the country’s options: rebalance, stagnate, or face an acute crisis.
China and bitcoin’s 2017 price: A Beijing intervention could halt its bull run — Quartz While Beijing hasn’t displayed any hint of a crackdown to date, that was also the case back in 2013. But if mom and pop investors start recklessly betting on bitcoin as the price continues to climb, the People’s Bank might deem it prudent to put the brakes on somehow. In its 2013 notice (unofficially translated from the Mandarin by BTCC, a bitcoin exchange based in Shanghai) it said “excessive speculation” was one of bitcoin’s dangers. // Comment: Bitcoin was my best investment of 2016
China targets aggressive coal capacity cuts to 2020-FT Under the plan, revealed at the end of last week, the NDRC will cut 800m tonnes of “outdated” and inefficient coal capacity each year while adding 500m tonnes of “advanced” capacity. The reductions will be concentrated among smaller mines in the north-east. Big producers in the western regions, such as Inner Mongolia and Xinjiang, will boost supplies.
Railway Operator Plans Spending 800 Billion Yuan in 2017 – Caixin After years of breakneck growth, China’s railway investment reached a record high in 2010 of 840 billion yuan, but dropped in the next few years following the arrest of several high-level corrupt officials and a train collision in Wenzhou, Zhejiang province, that killed 40 people. As the country turned to infrastructure investments to bolster economic growth, the annual railway investment started to climb back to the 800 billion yuan benchmark in 2014 and has stayed there ever since.
Cynical PCAOB release | China Accounting Blog | Paul Gillis The most important part of the MOF Rule is a requirement that audit working papers be retained on the mainland and not transmitted overseas, a requirement rooted in China’s concerns about inadvertent disclosure of state secrets. The PCAOB Q&A says that despite that rule, auditors must make working papers accessible to the PCAOB. While there are procedures in place to allow auditors to obtain permission to share working papers in the event of a disciplinary investigation, there is no agreement between China and the US to share working papers for inspection. Consequentially, the Q&A cynically sets up a requirement that no firm can comply with. The PCAOB needs to find a way to reach agreement with Chinese regulators to conduct inspections, discontinue the need for inspections, or deregister the firms it cannot inspect. Telling the firms that they will be punished if they do not break Chinese law in order to supply documents is not useful guidance. And I wonder if the PCAOB ever intends to enforce the rule anyway
Growth in China’s factories, services slows in December – official PMI | Reuters The official Purchasing Managers’ Index (PMI) stood at 51.4 in December compared with 51.7 in November. A reading above 50 indicates an expansion on a monthly basis while one below 50 suggests a contraction. December’s reading was slightly below the forecast in a Reuters poll for 51.5.
POLITICS AND LAW *
Ally of President Xi Jinping parachuted in to senior post in Hubei | South China Morning Post A close ally of President Xi Jinping has been promoted to deputy Communist Party chief of Hubei province ahead of a major power reshuffle late this year, mainland media reported on Tuesday. Chen Yixin, 57, will also become party chief of the provincial capital Wuhan, according to Shanghai-based Thepaper.cn. Chen was previously the deputy director of the general office of the Central Leading Group for Comprehensively Deepening Reform, a group founded and led by Xi to oversee overhauls of the country’s political, economic and defence systems, among others.
National Cyberspace Security Strategy « China Copyright and Media Safeguarding our country’s cybersecurity is an important measure to move forward the strategic arrangement of comprehensively constructing a moderately prosperous society, comprehensively deepening reform, comprehensively governing the country according to the law, and comprehensively and strictly governing the Party forward in a coordinated manner, and is an important guarantee to realize the “Two Centenaries” struggle objective and realize the Chinese Dream of the great rejuvenation of the Chinese nation. In order to implement Xi Jinping’s “Four Principles” concerning moving forward reform of the global Internet governance system and the “Five Standpoints” on building a community of common destiny in cyberspace, elaborate China’s important standpoints concerning cyberspace development and security, guide China’s cybersecurity work and safeguard the country’s interests in the sovereignty, security and development of cyberspace, this Strategy is formulated.
China’s 6th Plenum in Review: A Conversation with Bill Bishop by CSIS Comment: Fun podcast I did in November
历史的选择，人民的期待——党的十八大以来以习近平同志为核心的党中央治国理政评述-新华网 夙夜在公，励精图治。4年多来，1500多个日子，以习近平同志为核心的党中央肩负起团结带领全党全国各族人民共同奋斗的历史责任，在全党树起使命担当的典范和真抓实干的标杆，让亿万人民对国家和未来有了更强的信心、更深的期待。 伟大的人民、伟大的国家、伟大的民族，正在新时期历史使命的引领下，谱写一首共同创造、共同分享的壮丽史诗。 立下愚公移山志，一张蓝图干到底。 20年前，时任福建省委副书记、福建对口帮扶宁夏领导小组组长的习近平来到宁夏，将一个尚是戈壁荒滩上的规划村命名为闽宁村，开启两地携手向贫困宣战的篇章。 20年后，习近平总书记正带领中国进行脱贫攻坚、奔向全面小康的大决战。而昔日荒凉的闽宁村如今也已发展成为拥有6万多人、现代化的闽宁镇，成为中国书写扶贫开发新篇章的一个缩影。 执着奋斗，久久为功。// Comment: Xinhua yearender praising the Party Central with Xi as the core for its efforts since the 18th Party Congress. Xi as the core is everywhere now, in case anyone had forgotten…
China plans wide-reaching, anti-corruption commission：The Asahi Shimbun China’s leadership plans to establish a state institution in March 2018 to crack down on corrupt public servants at all levels, a move that could further consolidate President Xi Jinping’s power, inside sources said. The “state inspection commission” is expected to be on the same level as the State Council (government) and other influential organizations, according to the sources from the Communist Party of China.
Defense Ministry’s regular press conference on Dec. 29 Question: Media reported that 14 provinces had completed the re-election of members of the Party Committees at the provincial level this year. If Shanghai, Tianjin and Gansu, where the reelection work is yet to be carried out, were included, there would be 17 provinces and provincial-level municipalities that have no military officers in their Party Committees. Does this mean that in the future the Party Standing Committees of the provinces and provincial-level municipalities will no longer include military officers from provincial military commands? Answer: Your question shows that you have a keen observation. To include the main leaders of the provincial military commands into the Party Standing Committees at the same level is to uphold the Party’s leadership over the armed forces. This institutional arrangement has not been changed. Media noticed that the main leaders of the provincial military commands were not included as members of the provincial Party Standing Committees after the reelections. This is due largely to the ongoing military reform this year and the next year. Taking a variety of factors into consideration, it is decided that the main leaders of the provincial military commands do not participate in the re-elections of the provincial Party Standing Committees for the time being. When relevant reform is completed, there will be proper procedures in accordance with relevant regulation to include them into the provincial Party Standing Committees.
China inaugurates another two circuit courts-Xinhua The fifth circuit court will handle cases in Chongqing, Tibet Autonomous Region and provinces of Sichuan, Guizhou and Yunnan. The sixth circuit court will cover provinces of Shaanxi, Gansu and Qinghai, Ningxia Hui Autonomous Region and Xinjiang Uygur Autonomous Region. The southwest and northwest China are far away from the capital Beijing, where the SPC is headquartered. The the two circuit courts will provide convenience to local people and help resolve lawsuits in a timely fashion, ensuring local economic and social development, said Xu Jiaxin, head of the SPC political department.
视频:带病提拔的云南新任省长阮成发将“滇”读“镇”，假博士 Comment: Acting Yunnan governor caused an online furor when in a speech he mispronounced multiple times the classical word for Yunnan, saying zhen4 instead of dian1.
China tightens Tibetan border security to combat ‘separatism’ | Reuters Sunday’s change “provides a legal foundation to combat potential terrorist activities brought by the further opening-up of Tibet,” the paper quoted Wang Chunhuan, a scholar of the Tibetan Academy of Social Science, who worked on the new law, as saying. The measure brings land ports and trade zones within the scope of the previous law, and charges low-level government with the responsibility of tipping off police to help regulate the border, according to the article, published late on Monday.
Problems Remain in China’s Death-Penalty System Even After Reforms – Caixin Chinese academics estimate the number of death sentences handed down has dropped sharply since 2007, after the Supreme People’s Court took over the system of reviewing these verdicts that was earlier left in the hands of provincial-level courts. Yet legal reformists say more changes are needed to avoid possible wrongful convictions. They point out that the review happens behind closed doors, often without the presence of defense lawyers, and so are calling for open court-style hearings instead of allowing a small group of Supreme People’s Court judges to have the final say.
Beijing’s Eyes and Ears Grow Sharper in Xinjiang | Foreign Affairs high-definition security cameras blanket the region, and some 200,000 cadres are being dispatched to rural villages in an effort to watch over the restive Uyghur population. According to state-owned media, the new neighborhood-based police depots offer residents a range of “convenient services,” such as phone charging stations, WiFi, umbrellas, wheelchairs, and even hot tea and free newspapers. But their main purpose is surveillance, providing a series of forward operating bases for community policing and 24-hour patrols. Since arriving in Xinjiang in late August, Chen Quanguo, the autonomous region’s new Communist Party secretary, has doubled down on weiwen, or “stability maintenance” work.
FOREIGN AND DEFENSE AFFAIRS *
FBI: Accused spy has ‘vital’ intelligence on China-USA Today According to a docket entry, Szuhsiung “Allen” Ho is scheduled to plead guilty Friday in U.S. District Court in the nation’s first case of nuclear espionage involving China. The plea deal itself has not yet been filed. But a stack of documents already filed in the case suggest Ho’s plea is considered key to gathering intelligence on the inner workings of China’s nuclear program — both the one used to power homes and the one to make war — in a case in which the Chinese government refuses to even acknowledge the indictment of its own nuclear power company.
As Trump and North Korea’s Kim spar, China poses as the responsible actor – The Washington Post Frustration with China over the issue is something Trump shares with all of his immediate predecessors, Graham said, but the president-elect’s generally hard line towards Beijing would only make it “dig in its heels” more firmly, he said. Meanwhile, Trump’s brash style has been something of a propaganda gift for Beijing. “There’s a funny sort of inversion game going on there,” Graham said. “China is trying to posture as the global stakeholder and the reliable party for regional peace and global governance, whereas the United States is, in China’s eyes, reeling around like a punch-drunk heavyweight
在世界变局中坚定推进中国特色大国外交 Comment: Foreign Minister Wang Yi in Seeking Truth on resolutely advancing big power diplomacy with Chinese characteristics in a changing world
J-15 fighter jets from China’s Liaoning aircraft carrier make South China Sea debut | South China Morning Post China’s aircraft carrier-based J-15 fighter jets made a high-profile debut over the South China Sea on Monday amid tensions with the United States. The J-15 “Flying Shark”, stationed on board the Liaoning, China’s sole aircraft carrier, since 2013, practised operations as the vessel sailed in heavy seas, Xinhua reported. // Comment: with video
朱锋：南海问题的整体走向会决定中国未来_财经网 – CAIJING. 第三个原因更加重要，我们说美国作为全球大国的唯一差距的核心要素是他的全球海工的自由接触介入能力，中国成为海洋强国的时候我们一定限制美国的全球海军的自由介入，所以中美南海竞争是一个历史上的博弈，是两种历史力量的对抗。因此，我很坦率的告诉大家，南海之争刚刚开始。// Comment: Interesting comments from Zhu Feng on the strategic imperative of controlling the South China Sea
PLA recruitment video features air force stand-off with Japan | South China Morning Post Chinese fighters shown warning Japanese plane away from the disputed Diaoyu Islands in the East China Sea
PLA Warns About Spying After Photos of Carrier Published by Japanese News Service – Caixin A newspaper affiliated with the Chinese military has warned about a possible act of espionage after high-definition photos of the first aircraft carrier made in the country were published by a Japanese news outlet.
PLA news portal: Su-35 intended to be last type of imported fighter – People’s Daily Online Four Russian Su-35 fighter jets were delivered to China on Dec. 25, ending speculations about the procurement of the aircraft, which had been delayed about two years, according to an article on 81.cn, a news portal of the People’s Liberation Army.
China and the World | Foreign Affairs – Evan A. Feigenbaum The bottom line is that Washington spends far too much time and energy reacting to China’s moves. Instead, it should be active and exploit U.S. strengths, such as technology, innovation, and connections to global capital markets, as it works with a diverse array of Asian partners to help balance China’s growing influence. The best way to adapt to China’s new activism is to mount a stronger offense, not play perpetual defense.
China’s Race to Space: A Conversation with Joan Johnson-Freese by CSIS In this episode, we welcome Joan Johnson-Freese as we discuss China’s ongoing efforts and objectives of its space program.
China issues white paper on space development – Global Times China on Tuesday issued a white paper on its space activities in 2016 and major tasks for the next five years. The white paper, titled “China’s Space Activities in 2016,” said that China always adheres to the principle of exploration and utilization of outer space for peaceful purposes. The white paper was issued by the State Council Information Office.
Minjoo trip to China over Thaad stirs debate-INSIDE Korea JoongAng Daily Six first-term lawmakers of the Minjoo Party of Korea will leave for China on Monday to listen to the neighboring superpower’s protests regarding Korea’s recent decision to allow the U.S. deployment of the Terminal High Altitude Area Defense (Thaad) system. Beijing claimed that it will severely infringe upon its strategic security in the region and vowed retaliations. After the travel plan was made public, the ruling Saenuri Party demanded that the lawmakers cancel the plan. “The Minjoo Party must immediately abort this humiliating trip to China,” Rep. Chung Jin-suk, floor leader of the Saenuri Party, said Friday. “Flunkeyism [toward China] will hurt the Korea-U.S. military alliance and Korea’s national pride.”
Why A Tiny Iowa Town Is Trying To Be A Hot Destination For Chinese Tourists – BuzzFeed News Three decades before becoming the Chinese strongman president, the then-unknown Xi Jinping stayed in a two-story house and immersed himself in American culture by spending a few nights in the bedroom of an American Star Trek fan away at college. In 2012, the year before he took office, Xi returned to Muscatine briefly to reunite with his hosts, whom he has reportedly maintained correspondence with. Xi told them via an interpreter, according to the Muscatine Journal, a local paper where Twain once worked, “to me, you are America.”
A Monkey King’s Journey to the East – China Heritage – Geremie R. Barmé For popular Chinese commentators and the nation’s political cynics — furious men and women cowed and domesticated by a paternalistic system that at every turn reinforces their political impotence — Trump’s victory is a boon, a new source for anti-US Schadenfreude. It offers further evidence of the bankruptcy of Western-style politics and proof that we are in an era of illiberal democracy, one in which China’s sham multi-party system and farrago about basic human rights are trumpeted by the official media and the bullish propagandists at The Global Times.
HONG KONG, MACAU AND TAIWAN *
China says won’t allow Hong Kong to be used as subversion base | Reuters In an interview with state television broadcast late on Sunday, Zhang Xiaoming, the head of China’s Liaison Office in Hong Kong, said Beijing will not interfere in matters that purely affect Hong Kong’s autonomy. “As far as Hong Kong is concerned, nobody is permitted do anything in any form that damage the country’s sovereignty and security, they are not allowed to challenge the central government’s authority or that of Hong Kong’s Basic Law, they are not allowed to use Hong Kong for infiltration subversion activities against the mainland to damage its social and political stability,” Zhang said.
In Hong Kong’s book industry, ‘everybody is scared’ | Books | The Guardian Hong Kong used to be a place of relatively free speech in China, but that was before Xi Jinping’s crackdown. Now everybody from writers to booksellers, publishers and printers fear they will be next to ‘disappear
TECH AND MEDIA *
The 2016 WeChat Data Report | WeChat Blog: Chatterbox Comment: As usual with WeChat, just mind-boggling usage stats
A轮融资1.6亿估值20亿元，吴晓波的巴九灵为什么那么值钱丨新榜独家 今天，上海巴九灵文化传播有限公司（“吴晓波频道”运营公司，下文简称巴九灵）正式对外宣布完成A轮融资，本轮由挚信领投、浙商创投、头头是道和普华资本跟投，融资1.6亿元，投后估值20亿元。// Comment: Claimed 2 Billion RMB for Wu Xiaobo’s online video enterprise in a 160M RMB Series A round
China’s Sogou Targets $5 Billion IPO to Chase Rival Baidu – Bloomberg “Over the past year, we’ve seen a trend where people are finding themselves not trusting Baidu as much and some are even seeking a replacement,” he said at the company’s Beijing headquarters. “So over the next year or two, as more people feel more comfortable with Sogou they’ll realize it is able to replace Baidu.”
Twitter’s China head says bye — adding another top exec departure to the heap as 2016 ends – Recode Twitter does not actually operate in China, due to a government ban. But it has an office in Hong Kong to focus on Chinese advertising customers and to work with developers there, too. Chen is among many top execs who have left Twitter recently, in the wake of a failed sales process and continued difficult efforts to reinvigorate its growth
SOCIETY, ART, SPORTS, CULTURE AND HISTORY *
习近平对食品安全工作作出重要指示强调 严防严管严控食品安全风险国内新闻环球网 Comment: Xi Jinping stresses importance of food safety. The inability to fix the food safety issues is a massive failure of the CCP, up there with the air pollution crisis
A young man died in police custody, and middle-class Chinese are outraged – The Washington Post “The Lei Yang case has completely destroyed the middle class’s trust in the government’s commitment to rule of law — and its sincerity,” said Li Shu, a partner at the Anli Partners law firm in Beijing. The death of Lei, who worked for a state-backed environmental organization in Beijing and was a graduate of the prestigious Renmin University of China, sparked a social-media outcry at the time and a call from President Xi Jinping to improve police conduct. But the decision not to charge the police officers involved, announced Dec. 23, has reopened the controversy. // Comment: The reaction from my friends and wechat is that the case is a reminder of how far from he rule of law china still is, and how no one is safe from the state. I think it is one thing for a lot of the middle class and elite of this stuff happens to migrant workers or rural residents, but very different when it is a white collar graduate of one of China’s most prestigious colleges
China speeds up creation of social credit system – Xinhua Two guidelines, issued by the State Council on Friday, specified priorities in building the system. Real-name registration will be promoted in the fields of the internet, postal services, telecommunication and financial accounts to expedite the formation of personal credit records. Individuals will first form track records in areas including traffic safety and paying of taxes, while civil servants and doctors are among the first group of professionals to register their credit profile.
What’s Your ‘Public Credit Score’? The Shanghai Government Can Tell You : Parallels : NPR The city released the app, Honest Shanghai, in November during “honesty week,” a celebration of virtuous behavior throughout the city. Here’s how the app works: You sign up using your national ID number. The app uses facial recognition software to locate troves of your personal data collected by the government, and 24 hours later, you’re given one of three “public credit” scores — very good, good, or bad.
Chinese don’t have wills — and now it’s a big problem-USA Today Even the rich and educated often don’t write them. Consider the publicized case of Yan Jiying, a coal baron from the northern province of Shanxi. He died in 2015 at the age of 71, leaving his estranged wife, long-term mistress and six children to fight over his assets. At one point the conflict was so bad that his company, Sanjia, stopped paying wages. Local officials tried to broker a peace but to no avail. // Comment: lack of will especially a problem when there are mistresses and illegitimate children involved
China Focuses on Sports to Boost Economy – Caixin In a document issued last week, the country rolled out specific targets for sports tourism, which Beijing defines as events and facilities where people watch or participate in sporting events or activities. By 2020, the country wants to generate a total 1 billion domestic and foreign “tourist visits” annually by forming 100 large companies focused on the sector. The companies in turn would create 100 new sporting events; 100 “health-promoting” facilities, such as hiking, jogging and biking trails; and 100 undefined “demonstration tourist bases.”
Plan to Postpone Retirement Age Meets with Slim Support, Survey Shows Only 30% of respondents supported a government plan to postpone the age of retirement, which will delay access by workers to pension payouts, according to a survey released Thursday by a government-backed think tank, the Chinese Academy of Social Sciences.
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *
Chinese unmanned submersibles descend 10,890 meters in Mariana Trench-CRI Online Three unmanned deep sea landing facilities descended over 10,000 meters underwater and completed sea tests in the world deepest Mariana Trench in the Pacific.
Inside China’s ‘mosquito factory’ fighting Zika and dengue – CNNThis “mosquito factory” is on Sun Yat-Sen University’s science campus, about an hour’s drive from the bustle of Guangzhou city center. The center’s full name is the Sun Yat-Sen-Michigan State University Joint Center of Vector Control for Tropical Disease, and here, lab technicians are breeding up to 5 million Aedes albopictus mosquitoes a week — a species more common in Asia, responsible for spreading both dengue and Zika.
Children paying price for shortage of doctors – People’s Daily Online China is short of nearly 90,000 pediatricians, according to a white paper released in November by the Chinese Medical Doctor Association, which has warned that the universal two-child policy could pile on even more pressure. With just one pediatrician per 1,800 children, the nation currently lags behind many developed countries, according to the report, which is based on a survey of 13,000 medical institutions nationwide. Earlier last year, the central government set a target of making it one pediatrician per 1,450 children by 2020.
China’s $9 billion effort to beat the U.S. in genetic testing -Washington Post There is no cure for Quinlan. But this past spring, Chinese officials launched a $9 billion investment in precision medicine, a wide-ranging initiative to not only sequence genes, but also develop customized new drugs using that data. The funding dwarfs a similar effort announced by President Obama a year ago that has an uncertain future in Trump’s new administration. “The U.S. system has more dexterity and agility than the Chinese system,” said Simon, of Duke Kunshan University. “But the learning curve in China is very powerful, and the Chinese are moving fast. The question is not if. The question is when.”
Closing China’s Ivory Market: Will It Save Elephants? – NYTimes It all depends on the price. If China simply shuts down its legal ivory trade but does little to combat the much bigger illegal trade, then the price of ivory (now about $500 a pound) will stay high, giving poachers an incentive to keep killing. • Making all ivory illegal in China could actually push the price up, like illegal drugs. • Neighboring markets will be crucial. If Vietnam, Myanmar, the Philippines and others do not take similar steps, then many Chinese will simply buy their ivory from other places, which will keep demand high.
AGRICULTURE AND RURAL ISSUES *
China unveils guideline for rural asset shareholding reform-Xinhua China has unveiled a guideline on reforming collectively-owned rural assets based on a shareholding cooperative system. Farmers can voluntarily turn their rights in collective operating assets into shares and acquire corresponding revenue, according to a guideline jointly released by the Communist Party of China Central Committee and the State Council on Dec 29
Top Prosecutor Says 2,300 Students Charged in Bullying, Attacks Across Country Over 11 Months – Caixin The statistics offered a rare insight into a growing problem on Chinese campuses that has been largely ignored by educators and regulators due to a lack of awareness. Chinese social media has been buzzing about a war of words that erupted between a mother of a 10-year-old student at the prestigious Zhongguancun No. 2 Primary School in Beijing and school authorities over an alleged bullying incident in late November. // Comment: This case caused quite the furor, has forced a broader discussion of the real problem of bullying in schools
Chinese education giant helps its students game the SAT | Reuters New Oriental Education & Technology Group Inc, has regularly provided items from the tests to clients shortly after the exams are administered. Because material from past SATs is typically reused on later exams, the items New Oriental is distributing could provide test-takers with an unfair advantage. New Oriental has put some of the exam items on its Chinese website. On Dec. 6, for instance, the Beijing-based company posted a reading passage that had been used on a version of the SAT administered in the United States three days earlier. New Oriental also has been posting information about recent questions on the TOEFL, the English-language exam widely used by colleges to assess foreign applicants. TOEFL questions are also sometimes recycled. New Oriental also gave students access to a March version of the SAT that was administered in the United States, two students from Beijing told Reuters. One of the students showed Reuters 36 pages from that test. In addition, the news agency viewed a copy of a full version of the SAT given in Asia last month. Most pages of the document were emblazoned with the words “Beijing New Oriental School,” a major tutoring operation run by New Oriental. A person who identified himself as a test-prep teacher at the school posted 15 pages of that exam on Chinese social media. // Comment: Every student who uses this New Oriental service should be suspect, and no American schools should work with New Oriental. I know, good luck with that, there is far too much money involved…
JOBS AND EVENTS *
Forecast of China’s Economy for 2017 | National Committee on United States – China Relations The National Committee and Peking University’s China Center for Economic Research (CCER) are again bringing together leading Chinese and American economists for panels on China’s economy in 2017 and beyond. The forecast discussions will focus on the progress of reform, the real estate, credit & stock markets and the potential effect of the new administration’s policies on U.S.-China economic relations.
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