The Sinocism China Newsletter 03.19.17-Tillerson Goes To Beijing. How Did He Do?

Was Secretary of State Tillerson’s trip to Beijing a success? It is too early to tell, but not too early for punditry.

Tillerson’s Sunday meeting with Xi Jinping was at the top of the Sunday CCTV Evening News (习近平会见美国国务卿) and portrayed as a constructive meeting.

Some US media were not as kind, focusing on Tillerson’s use of the phrase “nonconflict, nonconfrontation, mutual respect and win-win cooperation” that the Chinese have been pushing for years as part of Xi’s idea of “new model of major country relations.” It was a bit jarring to hear him use this phrase, and the question is why he thought it was a good idea.

The Washington Post’s Simon Denyer, author of In China debut, Tillerson appears to hand Beijing a diplomatic victory, saw his comments as bad for the US:

“Jin Canrong, a Sino-U.S. relations expert at Renmin University of China in Beijing, said Tillerson’s comments came as a surprise. “China has long been advocating this, but the United States has been reluctant to accept the point of ‘mutual respect,’ ” Jin said. “Tillerson’s comment will be very warmly welcomed by China”…

Ely Ratner, who worked as deputy national security adviser to Vice President Joe Biden, took to Twitter to call it a “big mistake and missed opportunity” by Tillerson for parroting Chinese government “platitudes and propaganda.”

“China’s characterization of the U.S.-China relationship, as exemplified by those phrases, portends U.S. decline and accommodation,” he wrote in an email. “Tillerson using these phrases buys into this dangerous narrative, which will only encourage Chinese assertiveness and raise doubts in the region about the future of U.S. commitment and leadership in Asia.”

The New York Times’ Jane Perlez had a more positive take in Rex Tillerson and Xi Jinping Meet in China and Emphasize Cooperation:

The relationship is guided by “nonconflict, nonconfrontation, mutual respect and win-win cooperation,” Mr. Tillerson said at a news conference with Foreign Minister Wang Yi. The Chinese state news media quoted Mr. Tillerson’s echo of the Chinese phrasing, noting it approvingly.

But behind the scenes, diplomats and analysts said there was little doubt that Mr. Tillerson had pressed China to enforce sanctions against North Korea and raised the possibility that the United States would bolster its missile defense in Asia if China did not rein in Mr. Kim.

Is there a strategy here, to say publicly what the Chinese like to hear but take a much harder line privately? Was Tillerson poorly staffed and did not understand the background to this phrase? Is Trump giving Xi something else he wants in the hopes the PRC will do more about North Korea? What was the purpose of the leak on the eve of Tillerson’s arrival about preparations for a large arms package for Taiwan? Is that part of putting Taiwan in play as a bargaining chip for a broader “deal” with Beijing? Or has the US President just gone soft on China?

I doubt Trump has gone soft on Beijing. In fact, Axios reported in its Sunday “Sneak Peak” newsletter that Trump may be planning a “potentially explosive” China play:

“Senior White House officials are quietly preparing to confront China over what they consider unfair handling of automobiles, one of the world’s largest industries. It’s a move that could profoundly disrupt relations between the superpowers…U.S. companies have swallowed these rules since the ’90s because the Chinese market is so lucrative. But Trump and his top nationalist-minded advisers — Steve Bannon, Stephen Miller and Peter Navarro — believe the status quo is unacceptable.”

There was no official confirmation during Tillerson’s visit of the reported Xi-Trump meeting at Mar a Lago in early April.

AnchorTHE ESSENTIAL EIGHT *

1. President Xi meets U.S. Secretary of State – Xinhua Tillerson said President Trump valued communication with President Xi, and looked forward to meeting Xi and the opportunity for a visit to China. The U.S. side is ready to develop relations with China based on the principle of no conflict, no confrontation, mutual respect and win-win cooperation, said Tillerson.

Related: 习近平会见美国国务卿_CCTV Comment: Top 2 minutes of March 19 CCTV Evening News on the Xi-Tump meeting

Related Secretary Tillerson’s Meeting With President Xi Jinping of the People’s Republic of China (P.R.C.) Secretary Tillerson also conveyed that President Trump is anticipating the two will soon be able to meet face-to-face for discussions that will chart the course for future U.S.-China relations.

Related: Rex Tillerson and Xi Jinping Meet in China and Emphasize Cooperation – The New York Times

Related: In China debut, Tillerson appears to hand Beijing a diplomatic victory – The Washington Post

Related: Remarks Before His Meeting With Chinese Foreign Minister Wang Yi-US Department of State it has been a very positive relationship built on non-confrontation, no conflict, mutual respect, and always searching for win-win solutions.

Related: North Korea Tests U.S. as Tillerson Meets Chinese Leaders – WSJ The North Korean announcement Sunday that it had successfully tested a new high-thrust rocket engine one day earlier came just before Mr. Tillerson met Mr. Xi in a bid to stabilize relations and pave the way for a meeting with U.S. President Donald Trump. North Korea has a history of timing such tests to coincide with significant political or diplomatic events, and this one amplified the challenge facing the Trump administration as it signals a new, tougher approach toward Pyongyang.

Related: The Catch-22 in U.S.-Chinese Relations – Paul Haenle, Stephen Hadley Op-Ed February 22, 2015 Foreign Affairs In the nearly six years since these initial conversations, this catch-22 has continued to be an obstacle in the U.S.-Chinese relationship, which is now focused on Chinese President Xi Jinping’s proposal to build a “new type of major-country relations” with the United States. When, at the no-necktie summit in California in 2013, Xi put forward the concept, he mentioned three foundational principles: no conflict and no confrontation; mutual respect, including for both countries’ core interests and major concerns; and win-win cooperation. The United States has long reiterated that the relationship should be based not on slogans but on the quality of the cooperation. Initially, however, Obama expressed a willingness to explore the proposal both because it came directly from the Chinese leader and because it aimed to address the historical tendency of destabilizing competition and war between rising and status quo powers. But China’s call for respect for core interests has been a showstopper in Washington, seen as an indication that what China really seeks is U.S. concessions on areas of long-standing disagreement between the two countries.

2. Inside Trump’s White House, New York moderates spark infighting and suspicion – The Washington Post A competition over Trump’s trade and economic agenda is brewing between Cohn and Peter Navarro, an eccentric academic and former campaign adviser close to Bannon who directs the National Trade Council. It came to a head two weeks ago in the Oval Office, where Cohn shrugged off Navarro’s ideas as almost irrelevant, according to two officials. Trump stepped into the conversation and defended Navarro and his point of view.

Related: Axios Sneak Peek – 1 big thing: Trump’s potentially explosive China play

3. CNN on Twitter: “[email protected] predicts a “handover of power from the US to China” Comment: 3:45 minute video of Fareed explaining why so much of what Trump is doing benefits Xi and China. He nails it

4. 追寻习近平总书记的初心·梁家河篇–时政–人民网  // Comment: 6 minute video by CCTV on Xi Jinping and his time in Liangjiahe, interviews with people there who knew along with archival clips of Xi talking about his experiences. As intended it very much makes him look like a man of the people, propaganda for sure but do not dismiss it entirely. Xi has real feelings for rural China, one of his biggest policy goals is poverty eradication, and while this kind of propaganda may not work with the elite, it does resonate in large parts of China. Interesting that at about 2:50 Xi laughs about getting his face covered in sh*t as he tried to open up a methane generating pit and everything shot out…dangerous propaganda? Cynics might say it is a metaphor

5. China Defends Plan to Bolster Its High-Tech Industries – The New York Times China’s minister of industry and information technology, Miao Wei, said the new policy was not meant to wall off the country’s companies from outside competition. Yet he also conceded, without offering specifics, that the plan might need changes. “We never thought about closing ourselves and doing it only at home, but I think we need some adjustments,” he said on the second day of the China Development Forum, a three-day gathering of senior Chinese economic policy makers with corporate leaders and top economists from around the world.

Related: Technology: China reboots its superpower ambitions-FT $$ If semiconductors represent Beijing’s boldest foray into shaping the tech industry, the influence of the state can be seen in other private sectors. Baidu, Alibaba and Tencent, which are listed overseas and boast a combined market capitalisation of around $600bn, have worked on joint projects with the state. The National Development and Reform Commission, which sets economic and social strategy, last year announced the creation of 19 national data labs, most at universities, as part of the Made in China programme. Alibaba’s cloud business is participating in two labs: the first to support online data mining and cloud-based processing for the industrial sector; the other will build a platform for big data software.

6. Signals in Zhou Qiang’s 2017 report (Part 2) | Supreme People’s Court Monitor It is clear from the above summary that the content of President Zhou Qiang’s report to the NPC is oriented to the upcoming 19th Party Congress and the latest Party policies. It appears that no new major judicial reform initiative will be announced this year. It is likely too, that the selective release of 2016 judicial statistics in the NPC report also relates to messaging in line with the upcoming 19th Party Congress, although we know that the SPC intends to make better use of big data.  We can see that overall, the caseload of the courts is increasing rapidly, including institutionally difficult cases (such as bankruptcy and land condemnation), which put judges and courts under pressure from local officials and affected litigants. In the busiest courts, such as in Shanghai’s Pudong District, judges will be working extremely long hours to keep up with their caseload, and the impact of new legal developments. It appears (from both the report and the results of the CIG inspection) that judges will need to allocate more time to political study.  How this will play out remains to be seen. We may see a continuing brain drain from the courts, as we have seen in recent years.

7. China Minister Vows to Boost Manufacturing Appeal to Investors – Caixin Global The return on investment in China’s manufacturing industry is rather low. Much of the country’s banking capital has found its way into the financial market, instead of supporting the real economy, said Minister Miao Wei. “Such an operating model is very dangerous. This is the onset of a bubble,” he said at the China Development Forum, sponsored by the Development Research Center of the State Council, China’s cabinet. “Though there will be satisfying returns for banks in the short term, in the longer term, this will accumulate and become a systemic risk.”

8. The Legacy Of The Mississippi Delta Chinese : NPR for more than a century, the Delta has also been a magnet for immigrants. I was intrigued to learn about one immigrant group in particular: the Delta Chinese. To find out more, I travelled to Greenville, Miss., a small city along the Mississippi River. I meet Raymond Wong in Greenville’s Chinese cemetery, right across a quiet road from an African-American cemetery. Wong’s family has long been part of a thriving — but separate — Chinese community.


AnchorBUSINESS, ECONOMY AND TRADE *

Bank-to-Bank Lending, ‘Growing Unchecked,’ Stifles Attempts to Boost Economy, Experts Say – Caixin Global An increasing amount of money in China has been trapped inside the financial industry, flowing from one bank to another, increasing the risk of bubbles and thwarting the government’s efforts to stimulate the economy, analysts said.

China bad loan risks under control: banking regulator vice chairman | Reuters The performance of China’s banking sector this year has been “so far, so good”, Wang Zhaoxing, vice chairman of China’s bank regulator, said on Saturday as banks take aggressive action to control the rise in bad loans. The volume of NPLs at Chinese banks rose to an 11-year high at the end of June, but the ratio to total loans has stabilized as banks move to write off and transfer bad loans to third-party asset managers.

楼继伟:不要浪费货币财政政策买来的时间_经济频道_财新网 楼继伟称,从全球角度,在此艰难时刻更需要关键政治家的担当和睿智,既能凝聚民心又能采取正确的政策顺序推进改革,改善供给

In Beijing, Two Wheels Are Only a Smartphone Away – The New York Times Angela Cai, a spokeswoman for Ofo, a market leader in bike-sharing in cities across China, said the company was working to address the dumping of bikes in public places. Workers wearing heavy blue coats can now be spotted on side roads in Beijing’s Chaoyang district, picking up discarded Ofos. This month, the municipal government said it would issue parking, management and maintenance regulations for the bikes by June, and that it expected the companies to cooperate.

《人民日报》:阿里巴巴代表新实体经济正在迅速崛起|阿里巴巴|新实体经济|人民日报_新浪科技_新浪网 新浪科技讯 北京时间3月19日消息,《人民日报》今日在题为《浙江 实体经济正质变》的头版头条报道中点赞阿里巴巴:以阿里巴巴为代表的新实体经济正在迅速崛起。 “浙江不遗余力扶持新实体经济。以阿里巴巴为代表的新实体经济正在迅速崛起,集团去年合计纳税238亿元,带动平台纳税至少2000亿元,相当于4000家大型商场的销售体量,创造了超过3000万个就业机会。”报道称。// Comment: Alibaba gets some page 1 People’s Daily love on March 18, as a represtative of the “new type of real economy” that is rapidly rising

China Kicks Property Tax to the Curb—For Now – WSJ Resistance to a tax has come from the wealthy and local government officials. Part of the fear is it could force disclosures of officials’ property holdings and raise questions about how they were acquired.// Comment: Still politically impossible. I wrote Will Declaring Chinese Officials’ Assets Cause ‘Chaos’? And Will That Delay The Introduction Of A Property Tax? in 2010. (I have been doing this too long…)

新政首日北京严查房地产市场 重点整治炒房哄抬房价等行为_证券时报网 Comment: On Beijing enforcing new real state restrictions

China’s Ant confident of closing MoneyGram deal: executive | Reuters “MoneyGram we view as very attractive because it gives a global network of remittance capability and kind of an omnichannel approach that connects us,” Douglas Feagin, head of Ant’s international strategy, said in a phone interview.  //  Comment: But CFIUS…


AnchorPOLITICS AND LAW *

Has Xi Jinping Gotten His Crown? – China Media Project – China Media Project And there we have a very sound candidate for Xi Jinping’s banner term: “Xi Jinping’s Governing Concepts” (习近平治国理念).

深化政治巡视 实现全面覆盖之三——系列二十四——中央纪委监察部网站 聚焦政治生活  //  Comment: “Focus on Political Life”, third in series of articles on the CCDI website about political inspection tours…the intra-Party cadre Cultural Revolution is not a dinner party, or a KTV session

Chinese police officer jailed over bribes spent on property in Australia | The Guardian The 59-year-old police boss of Guta district of Jinzhou City in the northeastern Chinese province of Liaoning accepted a total of 6.8 million yuan ($A1.28m) in bribes for contracts, according to the court documents published in early March. He used part of the money to buy two Australian properties for his family.

The hunt is on for ‘crocodiles’ in China’s corridors of power | South China Morning Post China’s minister for clean government has warned businesspeople against colluding with officials for political power, calling the practice “very dangerous”. The warning from Yang Xiaodu, the minister of supervision and a right-hand man of top graft-buster Wang Qishan, comes as observers are watching closely to see if more tycoons will be targeted ahead of a reshuffle of the top ranks later this year.

新疆阿勒泰地委书记邓章武涉嫌违纪被查|邓章武|阿勒泰|违纪_新浪新闻 Altay prefectural party committee secretary Deng Zhangwu under investigation


AnchorFOREIGN AND DEFENSE AFFAIRS *

China’s armed forces send disciplinary inspectors – China Military Army inspectors have been dispatched to review discipline at the local-troop level, according to the Central Military Commission (CMC). The third inspection group features five teams, said the CMC. In 2016, the CMC dispatched two groups, made of 12 teams. // 中央军委围绕军队改革开展“机动式”巡视取得明显成效 

80 pct of Lotte outlets on China suspended over THAAD spat-Yonhap South Korea’s Lotte Group said Sunday 80 percent of its hypermarket chains operating in China have been forced to shut down temporarily, adding to woes that Beijing’s reprisal against Seoul over the deployment of an advanced U.S. missile defense system is intensifying.

Chinese children protest against Seoul’s Thaad defence system-FT $$ The Chinese government’s campaign against a US and South Korean anti-missile system has attracted some unusual recruits: school children as young as seven who have joined impromptu rallies and boycotts across the country.

Vietnam steps up islands battle with Beijing in South China Sea-FT $$ “We must fight to bring the territory back to the motherland,” a still-fiery Mr Dang declared in his old office, a poster proclaiming “The Paracels belong to Vietnam” in the background. “All Vietnamese, regardless of ethnicity, living inside or outside the country, know that’s the right thing to do.”

海军首次举行授剑仪式 军方3大佩剑到底长啥样?_网易新闻 法制晚报讯 3月15日,中国海军首次举行授剑仪式,南海舰队某驱逐舰支队的13名舰长政委被授予“深蓝之剑”。

North Korea’s Lithium 6 Production for Nuclear Weapons | Institute for Science and International Security The length of time North Korea researched the mercury exchange process, combined with procurement data and the ease of making necessary sensitive procurements in China, provide strong evidence that North Korea has built a lithium 6 production plant. There is little reason to doubt that such a plant is operational. The recent attempt by North Korea to sell lithium 6 metal in China supports that conclusion and suggests that North Korea is making more lithium 6 than it needs in its nuclear weapons program. These findings add credibility to North Korea’s claims that it has been developing thermonuclear or boosted fission weapons, albeit likely crude ones that may still not work. But with more nuclear testing and time, North Korea is likely to succeed.

A Closer Look at China’s Critical South China Sea Submarine Base | The Diplomat A deeper look at Yulin-East, China’s burgeoning submarine bastion in the South China Sea.

陆军第39集团军原军长张旭东少将升任中部战区陆军司令员_人事风向_澎湃新闻-The Paper Comment: Gen Zhang Xudong gets a promotion  //  据《河北日报》报道,2017年3月18日上午,河北省委书记、省人大常委会主任赵克志,省委副书记、省长张庆伟,中部战区陆军司令员张旭东等领导同志,来到石家庄市鹿泉区龙泉湖公园,与省会干部群众、驻石部队官兵一同参加义务植树活动,为省会再添新绿。

Chinese defense minister to visit Sri Lanka, Nepal | Reuters China is vying to increase its influence in Nepal, which serves as a natural buffer between China and India, challenging India’s long-held position as the dominant outside power in the landlocked nation. China has also invested heavily in Sri Lanka, funding airports, roads, railways and ports, and including the island nation of 21 million people on its “One Belt, One Road” mission to create a modern-day “Silk Road” across Asia. The ministry, in a short statement, said Deputy Naval Chief Su Zhiqian would accompany Chang

Philippines’ Duterte says can’t stop China developing shoal The mayor of China’s Sansha city has reportedly said his country would set up an environmental monitoring station on Scarborough Shoal, which China seized from the Philippines in 2012. “We cannot stop China from doing (these) things,” Duterte told journalists when asked about the reports. “What do you want me to do? Declare war against China? I can’t. We will lose all our military and policemen tomorrow and we (will be) a destroyed nation,


AnchorHONG KONG, MACAO AND TAIWAN *

Taobao Quietly Cultivates a Taiwan Following – Taiwan Business Despite regulatory travails, Alibaba’s C2C e-commerce platform is steadily finding a niche with young, bargain-hunting shoppers.


AnchorTECH AND MEDIA *

Bye Bye Pinterest: China’s Creatives Cry as Site Is Blocked in the PRC | What’s on Weibo “Why are designer websites now also blocked?! Why Why Why!!! All my image material is on Pinterest, aaaaah! Go f*ck yourself!!!”, one desperate commenter wrote on Weibo.

IBM and Wanda form China cloud computing partnership | Reuters Through a newly formed venture, Wanda Cloud Company, they will offer select IBM cloud infrastructure and platform as a service (IaaS and PaaS) technologies in China, IBM said.

Secretive Billionaire Reveals How He Toppled Apple in China – Bloomberg Comment: “toppled” in market share but not in profits in China?  //  Duan has increasingly kept his distance from the Chinese smartphone makers despite remaining a significant shareholder (he won’t say how much). He says he prefers to stay out of the spotlight and enjoy California with his journalist wife and kids. In fact, he attends board meetings but claims to get most of his information on Oppo and Vivo from the internet, to avoid “disturbing them.”


AnchorSOCIETY, ART, SPORTS, CULTURE AND HISTORY *

一个自闭症少年的死亡之路_深度_新京报网 Comment: Long Beijing News story on the death of an autistic teen. He left home one day and kept walking…so little awareness in Chinese society, so little support for people with Autism and their families

S. Korea football coach says referees will play important role in World Cup qualifier vs. China-Yonhap The South Korean men’s national football team will face China in the final Asian qualification round for the 2018 World Cup on Thursday.


AnchorENERGY, ENVIRONMENT, SCIENCE AND HEALTH *

Tensions rising as Chinese no longer willing to hold their breath on pollution problems – The Globe and Mail Two-hundred kilometres east of Beijing, they erected a metallic forest of emissions towers that belch exhaust and soot. During one severe episode in February, the air grew so thick that residents could no longer see across their narrow streets and workers got lost on the way home. Now the villagers are fed up. One of the recent steel-mill protests lasted more than a week. “Every day, more than 30 people gathered there,” said Zhao Xiuying, 54, who lives in an old village home that backs out onto a vista of metalworks.

人民日报称治霾进入战略相持阶段 可能碰触局部利益_证券时报网 治霾已经进入“战略相持”阶段,要实现突破,必须坚定必胜的信心,以更大的决心,更多的投入,更扎实、更深入的工作持续推进。在此期间,需要体制机制的变革,还可能碰触局部利益

To Improve Air Quality, Harbin Bans Burning Ghost Money | Sixth Tone In a statement on its website, the government banned the burning, production, and selling of joss paper for the 9.6 million people who live in the city and its surrounding rural areas. The ban will “eradicate bad funeral practices, advocate civilized ancestor worship, and purify the urban environment,” the statement said.

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