THE ESSENTIAL EIGHT *
China’s rise and Asian tensions send U.S. relations into downward spiral – The Washington Post There have been more intense crises in U.S.-China relations, including the fallout from the 1989 Tiananmen Square massacre of pro-democracy protesters, but none, perhaps, as fundamental and structural as this. // yes this stress is not event-based like after 89, the 99 embassy bombing or 2001 Hainan Incident…and it also increasingly appears that Beijing does not respect Obama and his second term foreign policy team
U.S.-China Strategic & Economic Dialogue: What You Need to Know | Brookings Institution The sixth meeting of the U.S.-China Strategic and Economic Dialogue—or S&ED—takes place July 9-10 in Beijing, with Secretary of State John Kerry and Treasury Secretary Jacob Lew representing the United States and State Councilor Yang Jiechi and Vice Premier Wang Yang representing China. Since 2009, the S&ED has offered a platform for both countries to address bilateral, regional and global challenges and opportunities, and this year’s meeting comes at a critical time to stabilize the U.S.-China relationship. Brookings John L. Thornton China Center scholars Richard Bush, David Dollar, Cheng Li and Jonathan Pollack offer insight into this significant meeting.
Related: Commentary: China’s currency policy no political tool for U.S. – Xinhua The world’s largest two economies are about to inject new vigor into their cooperation as the sixth round of China-U.S. Strategic and Economic Dialogue (S&ED) is set to open on Wednesday. But before the curtain is raised, some on the U.S. side already poured cold water on the talks, with Treasury Secretary Jack Lew’s fact-twisting and politically misleading remarks that an undervalued renminbi would top the dialogue and is a threshold issue fundamental to mutual trust. Lew’s complaint seems to be pointing to the fact that the renminbi has depreciated over 2 percent against the U.S. dollar in the first six months of this year.
Related: Offshore Yuan Gains as PBOC Raises Fixing Before U.S. Meeting – Bloomberg The People’s Bank of China raised the reference rate by 0.05 percent to 6.1626 per dollar, the most in more than two weeks. In comments leading up to the July 9-10 Strategic and Economic Dialogue, U.S. Treasury Secretary Jacob J. Liew urged China to let its currency appreciate. The yuan has declined 2.4 percent against the dollar this year.
Related: China Says To Raise Fed Rate Hike Impact At Sino-US Talks | MNI The Chinese government plans to talk with U.S. leaders this week about the impact on global markets of an eventual interest rate hike by the Federal Reserve, Vice-Finance Minister Zhu Guangyao said Monday. Zhu, who was briefing reporters ahead of this week’s Sino-U.S. Strategic & Economic Dialogue, also said the two sides will discuss the yuan exchange rate. He said the Chinese government expects the Federal Reserve to finish tapering its quantitative easing program this year on the back of an improving U.S. economy and labor market.
Related: U.S. pushes China to give ground on technology trade deal | Reuters Breaking the deadlock over updating the World Trade Organization’s 16-year-old Information Technology Agreement (ITA), which eliminated duties on products including personal computers and telephones, could in turn give a boost to talks on a U.S.-China bilateral investment treaty, he said. “This is an area where concrete progress would have potential positive spillover effects into other negotiations between us,” Froman said on a conference call with reporters before leaving for the Strategic and Economic Dialogue meeting.
Nobody can change history: Xi – Xinhua “History is history and facts are facts. Nobody can change history and facts. Anyone who intends to deny, distort or beautify history will not find agreement among Chinese people and people of all other countries,” Xi said, referring to concern that Japan is trying to distort the history of the war.
Related: China’s State Media Goes Into Overdrive Over the Marco Polo Incident – China Real Time Report – WSJ “This is public opinion warfare,” said Willy Lam, professor at the Chinese University of Hong Kong, of Chinese state media’s campaign this year, noting that Mr. Xi made a point of visiting various World War II memorials during his visit to Germany earlier this year. In recent months, China has praised Germany for having accepted and atoned for its past history of aggression, by way of criticizing what it perceives as Japan’s failure to do the same. Chinese state media’s wall-to-wall coverage of the Marco Polo Bridge anniversary also comes as Mr. Xi makes a play for warmer ties with South Korea, which also suffered under Japanese aggression and is wary of Mr. Abe’s new policies
BBC News – China overtakes US as the biggest importer of oil Oil consumption in China had outstripped production by 6.3 million barrels a day, said the Energy Information Administration (EIA). In the US, the figure was 6.1 million.// even more reason for China to worry about sea lanes and Islamic terror
反腐600天_政经频道_财新网 this week’s Caixin cover story is on the 600 days of the corruption crackdown
Related: “岐山反腐学”与中纪委品推之道 inter
Graft, Zhou Yongkang on agenda for 4th CPC plenum｜Politics｜News｜
China’s Spy Agency Has Broad Reach – WSJ Using Chinese government websites, academic databases and foreign security expertise, The Wall Street Journal assembled an overview of some secret operations of China’s global monitoring organization, the Third Department of the People’s Liberation Army’s General Staff Department. Spy-watchers call it 3PLA and say it is central to China’s military strategy, tasked with monitoring and analyzing much of the world’s communications—including embassy cables, corporate emails and criminal networks—for foreign threats and competitive advantages.
Related: Project 2049 Institute 2011 – The Chinese People’s Liberation Army Signals Intelligence and Cyber Reconnaissance Infrastructure PDF This study offers a tentative baseline for assessing the GSD Third Department, affiliated Technical Reconnaissance Bureaus (TRBs), and supporting research and development organizations. An examination of this organization, its role and function would provide a mosaic with which to better evaluate China‘s signal intelligence and cyber-infrastructure. The data points assembled by this monograph points to an expansive yet stovepiped organization responsible for various facets of technical reconnaissance, including collection of wireless line of sight communications, satellite communications, cyber surveillance, network traffic analysis, network security, encryption and decryption, translation, and political, military, and economic analysis. Mark A. Stokes, Jenny Lin and L.C. Russell Hsiao (11/11/11)
How Chinese fishermen became pawns in Asia’s maritime great game – CSMonitor.com The Philippines accuses the detained fishermen of poaching endangered turtles in its waters. China says Manila has no jurisdiction to try them and has tried to undermine their trial.
BUSINESS, ECONOMY AND TRADE *
China Local Funding Unit Got Funds Illegally, Beijing News Says – Bloomberg Jiamusi New Era Infrastructure Construction Investment Group Co., a local government financing vehicle in northeastern China, used fabricated documents to illegally obtain funds, Beijing News reported on July 4. The LGFV, based in the city of Jiamusi near the Russian border in Heilongjiang province, used fabricated urban planning documents to boost the area of land for which it owns the usage rights, Beijing News reported,
China Developers Slow to Pay Realtors Amid Rout, Centaline Says – Bloomberg Centaline Group, which owns Centaline Property Agency Ltd., has about 1 billion yuan ($161 million) of uncollected receivables due, group founder Shih Wing Ching said in an interview. Developers pay the fees only after they they get the sales proceeds, he said…“Aside from disruption to the developers’ liquidity, our customer base is also affected by the anti-corruption drive,” he said. “In the past, officials and their relatives made up between one-fourth and one-third of buyers.” // he said this in an interview w mainland press in June
Nicholas Lardy: China Is on the Right Track, but Reforms Must Continue – Caixin In a recent interview with Caixin, Lardy shared his thoughts on several economic topics that have engendered much recent discussion, including the health of the property market, the fluctuation of the yuan exchange rate and whether China can sustain its present rate of GDP growth.
County-level E-commerce: Next Driver of China’s Online Shopping | Huxiu Ye Peng, vice president of Alibaba, said, with more and more local officials in counties realising the importance of e-commerce and promoting the e-commerce in villages and towns, plus the explosive growth in the magnitude of e-shoppers in county-level regions, counties can be the most powerful driver of growth for China’s e-commerce in the next few years.
China should let more ailing firms fail – deputy c.bank governor “In the course of our surveys, we found that many companies are in the zombie state but they have taken up a large amount of credit,” Liu Shiyu told a forum in Beijing. He urged companies in the coal, steel, machinery and shipbuilding sectors to find ways out of business difficulties, including using a bankruptcy law introduced in 2007. Local government officials generally mediate between creditors behind closed doors and Beijing has used the law cautiously, fearing the failure of large firms and widespread layoffs could lead to social unrest.
铁路项目密集开工年内投资额或超万亿_证券时报网 1 Trillion RMB in rail construction projects to start in 2014? // 由于新项目激增，目前铁路投资总招标金额已达1.35万亿元。
Cabinet unveils guideline to ensure fair competition – Xinhua sounds nice, but when is implementation? // The guideline is meant to let the market play a decisive role and let the government play a better role in allocating resources, and to correct the problem of “incomplete market system, excessive government intervention and insufficient regulation,” said the State Council. To achieve the goal, the State Council first urged a relaxation of market access, saying the government should not restrict any market access unless the investment activities are forbidden by law or harm the interests of a third party, public interest or national security.
[视频]习近平主持召开经济形势专家座谈会强调 更好认识和遵循经济发展规律 推动我国经济持续健康发展_新闻频道_央视网(cctv.
Car maker Tesla sued in China for trademark infringement Tesla said in January that the trademark dispute between it and Chinese businessman Zhan Baosheng – long seen by analysts as a barrier to Tesla’s entry into China – had been resolved. The car maker began delivering its Model S sedans to Chinese customers in April. But Zhan, who registered the “Tesla” trademark before the U.S. company came to China, is now taking Tesla to court, demanding that it stop all sales and marketing activities in China, shut down showrooms and supercharging facilities and pay him 23.9 million yuan ($3.85 million) in compensation, his lawyer Zhu Dongxing said on Tuesday.
POLITICS AND LAW *
Party Graft Inspectors Uncover Range of Problems in Gansu – Caixin A Communist Party discipline inspection team has uncovered evidence of corruption at state-owned enterprises, the mining sector, major projects and the use of poverty relief funds in the northwestern province of Gansu, the Central Discipline Inspection Commission (CDIC) said on its website. // 中央第一巡视组向甘肃省反馈巡视情况
罗昌平：高官大案通报机制流变 Luo Changping on the changes in the way the government announces investigations of high officials
China’s Communist Party Reminds Colleges: Keep it Clean – China Real Time Report – WSJ The party-appointed heads of 26 top Chinese colleges and universities were reminded at a meeting last week of their obligations to run honest institutions, according to the commission. The commission, which acts as the internal party watchdog, said the officials signed a clean-governance pledge before the Ministry of Education’s top official, Yuan Guiren, and that several more will do so later this month.// 教育部党组约谈北京大学等26所高校党委书记
海南常委副省长谭力被查 为今年第17只老虎_政经频道_财新网 Hainan deputy governor Tan Li under investigation
张维迎调任北大国家发展研究院_政经频道_财新网 Zhang Weiying gets a new job at PKU’s National Development Research Academy
李承鹏被封号 胡锡进：需恢复敬畏感_中国_多维新闻网 Li Chengpeng’s Weibo account is shut, apparently in response to a recent speech he gave at Peking University
环球时报：李承鹏微博被销号 早晚注定发生_网易新闻中心 Hu Xijin on Li Chengpeng // “搞民主”不是一张护身符，违反了法律和规定后都能豁免。
China journalists banned from disseminating state secrets – Xinhua Journalists are banned from illegal copying, recording, or storage of state secrets, according to the rules made public on Tuesday but released by the State Administration of Press, Publication, Radio, Film and Television on June 30. According to the administration, the rules cover various information, materials and news products that journalists may deal with during their work, including state secrets, commercial secrets and unpublicized information.
FOREIGN AND DEFENSE AFFAIRS *
Behind the Propaganda Wars—4 / China wages ¥880 billion global media campaign – The Japan News According to the Internal Affairs and Communications Ministry, 20 percent of people surveyed in Washington were aware of CCTV, while only 13 percent knew of NHK World TV. In Europe, there was a similarly large gap with 22 percent recognizing CCTV and 10 percent NHK World TV. But the situation is not merely a war of resources. The Chinese government is seeking to increase the power of its international reporting brand.
兰州军区大规模调整 苗华首次以军区政委亮相_新闻_腾讯网 big reorg in Lanzhou Military District// 2014年“八一”前夕，
Q. and A.: John Delury on Chinese-South Korean Ties – NYTimes.com Younger South Koreans — most of my students at Yonsei University, for example — will not uncritically accept Xi’s rhetoric about friendship with China, but neither will they dismiss it out of hand. Xi and his wife project a genuine fondness for things Korean, as well as for Madame Park. The “Korean wave” is still going strong among the Chinese public — when Xi’s wife said her husband as a young man resembled heartthrob Kim Soo-hyun from the hit television drama, “My Love From the Stars,” the allusion should play well both in Korea and back home. If Xi can sustain this charm offensive for the decade he is likely to be in charge, Park’s comment that Xi’s visit marked a historic turning point in China-South Korea relations may prove correct after all.
China Denies Entry to an American Scholar Who Spoke Up for a Uighur Colleague – NYTimes.com When Elliot Sperling, an American professor, landed here in Beijing after a 12-hour flight from the New York area last weekend, he found himself dragged by border officers into a back room in the airport for an interrogation. They then marched him back to the same United Airlines jet that he had flown in on, despite the fact he had arrived with a valid one-year tourist visa.
Huawei founder: US wants to curb China – China.org.cn many elite in China believe this, even ones I know who have US or other foreign passports // “When China becomes stronger, America hits it harder,” Ren said at his company’s internal award ceremony with media members present. “Actually, Huawai really is not what the U.S. wants to strike, what they want is to strike China. Because America doesn’t want to see China become stronger, they have to find some way to use their power to curb it. So, I think there would be difficulties for Huawei’s development. We don’t know how big the difficulties are but we have to try hard to figure out how to overcome them.”
Deep in Thought: Chinese Targeting of National Security Think Tanks | CrowdStrike Recently, Falcon Host has detected multiple simultaneous compromises at several national security think tanks from an actor we call DEEP PANDA, one of the most advanced Chinese nation-state cyber intrusion groups. For almost three years now, CrowdStrike has monitored DEEP PANDA targeting critical and strategic business verticals including: government, defense, financial, legal, and the telecommunications industries. At the think tanks, Falcon Host detected targeting of senior individuals involved in geopolitical policy issues, in particular in the China/Asia Pacific region. However, last week the unprecedented real-time visibility provided by Falcon Host into this actor’s escapades allowed analysts to observe a radical change in targeting. This actor, who was engaged in targeting and collection of Southeast Asia policy information, suddenly began targeting individuals with a tie to Iraq/Middle East issues.
彭德怀侄女上月去世 曾被称”军中女包公”_网易新闻中心 Peng Dehuai’s niece Peng Gang has died; she was known as a clean and upright military official // 核心提示：2014年6月24日，
Japan’s Abe declares peace goals in historic Australia visit – Yahoo!7 Japanese Prime Minister Shinzo Abe Tuesday declared his determination to pursue peace in Asia, as he strengthened defence ties with Australia and signed an ambitious free-trade agreement. Abe used an historic address to a joint sitting of Australia’s parliament to say that Japan “is now determined to do more to enhance peace in the region and peace in the world”.
China questions Japan-Australia defense deal – Xinhua China hopes that a new defense deal between Japan and Australia is not targeted at any third party, Foreign Ministry spokesman Hong Lei said on Tuesday. Hong said at a daily press briefing that cooperation between these two countries should make positive contributions to regional peace and stability.
Japanese Foreign Minister Speaks Out Against Chinese Newspaper Graphic – NYTimes.com A Chinese newspaper’s graphic declaring that “Japan wants a war again” and showing mushroom clouds over Hiroshima and Nagasaki, Japan, drew strong criticism from the Japanese foreign minister on Tuesday, adding to the continuing acrimony between the two countries over historical issues.
HONG KONG, MACAO AND TAIWAN *
HSBC cuts Hong Kong equities to underweight from neutral | Reuters HSBC cut its rating for Hong Kong equities to underweight from neutral on Monday, saying a campaign for greater democracy in the Asian financial centre could sour relations with China and hurt the city’s economy.
Macau Growth Under Threat as Chinese Travel Farther: Ho – Bloomberg “I’d say the slowdown in the economy and the fact that now the foreign destinations might become competitors” are the biggest risks to Macau’s growth, Pansy Ho, co-chairman of MGM China Holdings Ltd (2282), said in an interview with Betty Liu on Bloomberg Television in Hong Kong.
Taiwan’s ex-premier slammed for singing Chinese national anthem | South China Morning Post Taiwanese former premier Hau Pei-tsun came under fire yesterday for singing the Chinese national anthem in Beijing, a move that opposition legislators faulted as “highly inappropriate”. Hau, 95, in an interview aired by state-run China Central Television on Monday, was shown singing part of the anthem – March of the Volunteers – when asked whether he remembered it. // 台高级将领郝伯村央视唱国歌
Former ROC premier challenges Beijing’s version of war history｜WantChinaTimes.com
TECH AND MEDIA *
WeChat Unveils an Ad Network for Public Accounts | TechNode Any verified account can apply to be an advertiser and buy text link ads placed at the bottom of WeChat messages by other public accounts. Unlike most ads across the Web that direct users to advertisers’ webpages, this WeChat ad system requires advertisers to create ad pages on WeChat, promotional content or windows for one-click subscription to their public accounts, and all ad links will direct viewers to the WeChat pages.
Rumor: Alibaba, CNIGC Form Beidou Support Services JV | Marbridge Consulting According to multiple industry sources, Chinese e-commerce conglomerate Alibaba Group and state-owned weapons manufacturer China North Industries Group Corporation (CNIGC) have signed an agreement to jointly establish a service company to support China’s homegrown Beidou Satellite Navigation System (BDS), with registered capital of RMB 1 bln. Alibaba plans to invest an additional RMB 10 bln in the company in the future.
Alibaba Founder Jack Ma’s Recent Deals Raise Flags – WSJ Alibaba has addressed the arrangements in its filings with U.S. securities regulators, last amended June 26, saying that Mr. Ma sometimes invests on behalf of the company, and will take steps in some cases to limit his personal gains from the transactions—either by transferring profits back to Alibaba, or giving the money to charity. But governance experts warn that such investments are a recipe for trouble, because they blur personal and business interests, involving both Mr. Ma and Alibaba in transactions that could benefit him and a group of influential allies, and over which most Alibaba shareholders have little control or oversight.
UnionPay to Introduce QR Code Payment Service | Marbridge Consulting Alipay still can’t out-lobby Unionpay // On March 13 of this year, China’s central bank issued an urgent directive calling for the temporary suspension of QR code-based payment services, but Chinese third-party payment processor Alipay and some banks have continued to offer QR code payments. The central bank has not taken any enforcement or punitive measures against QR code-based payment providers or financial institutions at present.
Senior official dreams of “movie power” – Xinhua A senior official of the Communist Party of China (CPC) has pledged to promote China’s film industry and build the country into a “movie power.” Liu Qibao, head of publicity for the CPC Central Committee, made the remarks at a national film workshop on Tuesday. “Film should take the people as its center and socialist core values as its guide,” Liu said, urging film makers to make movies with both social benefits and commercial success, giving priority to the former. // will Hollywood start making movies with socialist core values as guide?
SOCIETY, ART, SPORTS, CULTURE AND HISTORY *
Chinese rider justifying Tour place | China Sports Insider Ji [Cheng] is playing the role of the domestique – essentially cycling’s version of the ultimate team player – to perfection, by sacrificing himself for his teammates, but he has already achieved his goal of sorts, simply by lining up as the first Chinese rider in the Tour de France, and the hope is that he inspires many more to follow in his footsteps and raise the bar further.
Yes, Beijing is a Finalist for the 2022 Winter Olympics. What Are Its Chances? – China Real Time Report – WSJ Eight months later, the International Olympic Committee has named Beijing, which has proposed hosting the games in conjunction with the nearby city of Zhangjiakou, as one of the three finalists for the bid, along with Oslo in Norway and Kazakhstan’s Almaty. What are Beijing’s chances of actually winning the bid? Better than you might think.
ENERGY, ENVIRONMENT, SCIENCE AND HEALTH *
Babcock & Wilcox fined for Beijing air pollution – Xinhua The Beijing subsidiary of U.S. energy products and services provider Babcock & Wilcox Company was fined 600,000 yuan (97,311 U.S. dollars) on Monday for air pollution, according to the municipal environmental protection watchdog. It is the largest penalty over air pollution in the city since the municipal air pollution prevention and control regulation was put into effect in March, said the Beijing environmental protection bureau.
China starts new multibillion-dollar power line | Reuters The UHV lines would allow China to build power plants near coal mines or gas fields before sending electricity rather than coal across country. This would free up rail capacity and could reduce the need for coal and gas imports.
China’s arid north feeds water-rich south: Kemp | Reuters “Consumption in highly developed coastal provinces is largely relying on water resources in the water-scarce northern provinces, such as Xinjiang, Hebei and Inner Mongolia, thus significantly contributing to the water scarcity in these regions,” an international group of researchers wrote in the latest edition of the journal Environmental Science and Technology. “Rich coastal provinces gain economic profits from international exports at the expense of ecosystem quality in the less developed regions,” the researchers from the University of Maryland and the International Institute for Applied Systems Analysis concluded (“Virtual Scarce Water in China” June 2014).
Municipal officials in Beijing ease property price cap – report | Reuters China’s Poly Real Estate Group Co Ltd has received regulatory approval to price a Beijing project at a record high of almost 100,000 yuan ($16,100) per meter square, signalling an easing on pricing policy for developers in the capital, a local report said on Monday. Last month, seven projects in Beijing that received selling approval had planned to set prices above 40,000 yuan, a cap the local authority set last November, China’s National Business Daily added.
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