We are driving to Maine Thursday to pick our twins up at camp, no newsletter until next Monday at the earliest. Hard to believe Summer is half over.
The Essential Eight
1. US-China Comprehensive Economic Dialogue Appears To Confirm Diminished Expectations, Increasing Tensions
As of late afternoon Wednesday, the administration had yet to issue a press release about the talks. Press conferences that were scheduled to cap off the event Wednesday afternoon were canceled by both the Chinese and Americans.
International trade experts, including NYU Law professor Robert Howse, told Axios that Trump made a big mistake by identifying “dumping” as his basis for imposing retaliatory tariffs on national security grounds. There are already laws on the books to remedy dumping, and if Trump invokes the national security provision to impose new tariffs, other nations will immediately challenge him because they’re operating under a World Trade Organization agreement that has no national security exceptions.
A meeting on Tuesday between US Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and China’s vice-premier, Wang Yang, on steel yielded what people close to the situation said were productive discussions. The talks ran long, with aides shooed away when they sought to keep the ministers on schedule and told that these were the most important negotiations of the week, according to people briefed on the discussions.China’s Jack Ma has penetrated the Trump administration — and he knows what he wants – The Washington Post – Josh Rogin:
Security concerns aside, if Ma is able to convince the Trump team to help him take over the money-remittance industry worldwide, he — and China — will be one step closer to dominating global e-commerce.
Comment: Jack Ma is increasingly political in both China and the US. Not sure he has a choice given Alibaba’s influence and his wealth
2. Xi Issues Instructions (训词) To New Heads Of Top PLA Research And Educational Institutions
In order to build a world-leading first-class military research institution, the People’s Liberation Army (PLA) Academy of Military Science, as the leading force of scientific research in the military, should meet the new demands of military research and further combine military theories and technologies, he continued.
Xi further stressed that the National Defense University of the PLA is a significant base to cultivate talent for joint operations as well as PLA officers, and should push forward innovation in its education, research and management to become a top comprehensive college on unified command.
As for the National University of Defense Technology, it must follow the worldwide trends of the development of military science, and work harder to make key technological breakthroughs, in order to build a world-class institution of higher education, according to Xi.
新调整组建的军事科学院国防大学国防科技大学成立大会暨军队院校科研机构训练机构主要领导座谈会在京举行 习近平向军事科学院国防大学国防科技大学授军旗致训词 出席座谈会并发表重要讲话 Top 13:35 of Wednesday CCTV Evening News on this announcement
Comment: On the new leadership at National Defese University. No word on what is next for Liu Yazhou
3. Xi Jinping Thought, Supreme Commander Xi, “Xi Jinping-ism”?
Xi’s name, slogans and policies have come to dominate the pages of the Communist Party’s self-described mouthpiece since he took power in late 2012, according to an analysis by Qian Gang, director of the University of Hong Kong’s China Media Project. That is a pointer to the president’s clout as he approaches a leadership reshuffle later this year, and provides clues about the country’s future direction.
Chinese State Councilor and Director of the Office of the Central Foreign Affairs Leading Group Yang Jiechi has published an article titled “Study and Implement General Secretary Xi Jinping’s Thought on Diplomacy in a Deep-going Way and Keep Writing New Chapters of Major-Country Diplomacy with Distinctive Chinese Features.深入学习贯彻习近平总书记外交思想 不断谱写中国特色大国外交新篇章::
General Secretary Xi Jinping’s thought on diplomacy represents the CPC Central Committee’s new governing philosophy and strategy as they apply to diplomacy and is an integral part of the theories of socialism with distinctive Chinese features. It is a vision that has greatly enriched and taken forward the diplomatic thinking and strategy of New China and will have extremely important and far-reaching significance in steering China’s endeavor to keep pace with the times and make new progress in external work.
李不白 on Twitter: “习进平主义横空出世了…” —A purported slide from a Chinese academy of governance internal presentation. Slide lists the “main content of Xi Jinping-ism 习近平主意的主要内容. And another from Twitter,from a different presentation, showing the “Three Alls”, reminiscent of the “Two Whatevers”…I have not verified these…
领航人民军队，向着世界一流军队迈进——以习近平同志为核心的党中央领导和推进强军兴军纪实-新华网 —Comment: Last week Xinhua called Xi “supreme commander 最高统帅” three times in a piece extolling his efforts to build a strong army. Is “Supreme leader 最高领袖” far off? There are rumors that may be on the agenda at the 19th Party Congress
Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks at the 37th meeting of the Central Leading Group for Deepening Overall Reform, which he heads.
All localities should be devoted to delivering reforms, shouldering their due responsibilities and making concrete and pioneering efforts, Xi said.
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4. The South China Morning Post Pulls Column Suggesting Li Zhanshu’s Daughter And Son-In-Law Have Large Overseas Business Interests
The SCMP’s senior editors have concluded that the commentary piece published on July 18th (online) and 19th (in print) “How’s the Singaporean investor in the Peninsula’s holding company linked to Xi Jinping’s right-hand man?”, on further examination, does not meet our standards for publication because it includes multiple unverifiable insinuations. We apologise to our readers for this regrettable misstep, and will examine and improve our editorial process as a result.
How’s the ‘Singaporean’ investor in The Peninsula’s holding company linked to Xi Jinping’s right-hand man? | South China Morning Post Google cached version of the now unavailable South China Morning Post article
Comment: Was the SCMP pressured? I have no idea. It was a strange column, seemed heavy on unverified information from a Chinese-language publication in Hong Kong. It certainly set off lots of talk of factional fighting and using these claims as a way to show Xi that if he keeps taking out officials like Sun Zhengcai “his people” are vulnerable too…It is silly season in Chinese politics, the more intricate the conspiracy theory the more people will believe it. Then again…
It was the beginning of a lucrative partnership for the businessman, Wang Wei, one that would put him on the path to becoming a billionaire. Over the next two decades, Mr. Wang set up companies that managed properties, as well as supplied computers, software services, seafood and Cuban cigars to Hainan Airlines and its parent company, the HNA Group.
What HNA rarely publicly revealed, if ever, is that Mr. Wang is the younger brother of its co-founder and co-chairman, Wang Jian. In the past 25 years, HNA has regularly funneled business to a small group of relatives and associates of the company’s senior executives, dealings with limited disclosure to investors in its listed companies or its overseas bonds, according to a review of thousands of corporate records by The New York Times.
Bank of America has decided not to do business with HNA, citing concern over the company’s opaque structure, among other issues, according to an internal email reviewed by The New York Times.
While the bank does not have major commitments with HNA, its pullback is a sign that Wall Street’s enthusiasm for deal-hungry Chinese giants is beginning to cool because of these companies’ often murky ownership and large appetite for risk.
Comment: What about other banks like JP Morgan and Goldman Sachs?
6. Regulators Cracking Down On Overseas Deals, Making Foreign Bankers, Lawyers And Accountants Sad
“Regulators will continue to pay close attention to overseas investments in key industries, including real estate, hotels, entertainment, cinemas and sports clubs,” Yan Pengcheng, a spokesman for the National Development and Reform Commission, told reporters Wednesday.
Suning’s stocks and bonds fall as state-owned CCTV programme questioned if Chinese tycoons are taking over loss-making soccer clubs to launder money
《新闻1+1》 20170718 企业对外投资，谁在“非理性”？_CCTV The CCTV program criticizing irrational overseas investments
“Regulatory authorities will continue to pay close attention to overseas investment in key industries such as property, hotels, entertainment, cinemas and sports clubs,” said Yan Pengcheng, spokesman for the National Development and Reform Commission.
Yan said companies planning to invest in those industries in foreign countries should “make cautious decisions”.
“Realtors said tighter regulations on capital outflows in China cooled non-resident foreign buyer interest in early 2017,” said Lawrence Yun, chief economist at NAR, referring to the 6,000 realtors surveyed. Sue Jong, chief of operations at Juwai.com, a property portal, said that this year international real estate investment will be down at least 10 per cent from 2016, according to present trends.
7. Beijing For Beijingers
In a notice released late on Monday, the Chaoyang District Police Bureau said it was “hiring 2,464 administrators” to assist officers to check whether residents from outside Beijing had the proper registration documents.
Under the country’s strict household registration rules, any Chinese citizen living outside his or her hometown for more than six months must obtain a residence permit from police.
The new recruits — all Beijing natives aged 18 to 45 — will also help police carry out door-to-door inspections of homes rented by migrant families. The teams will be looking for “potential safety and fire hazards,” the notice said.
The demolitions come as Beijing authorities look to push out migrant workers and rein in the city’s population — a citywide “urban rectification” campaign that involves tearing down small businesses and homes.
The campaign, which began earlier this year, has spread to Beijing’s urban fringes, where schools for migrant children face an uncertain future.
8. SOE Reform With Chinese Characteristics
China is preparing to accelerate its consolidation of companies owned by the central government, aiming to create from existing enterprises about 80 corporate giants that can be globally competitive, a knowledgeable source told Caixin.
A key component of the plan involves dividing all major state-owned enterprises (SOEs) into three groups, according to the source at the State-Owned Assets Supervision and Administration Commission (SASAC), which oversees all companies owned by the central government.
A document now being drafted by SASAC will be released by the end of the year, with a target of classifying all companies as either investment, financial services or industry firms, the source said. Industry companies will also include manufacturers.
Fun Rumor Of The Day:
Has Jiangsu Party Secretary Li Qiang, former Zhejiang Governor and “member” of the “New Zhijiang Army 之江新军 (Wikipedia)”, transferred to Shanghai to replace Han Zheng as Shanghai Party Secretary? Obviously a huge deal if true.
Business, Economy And Trade
Dalian Wanda Finds Second Buyer After Sunac Deal Draws Scrutiny – WSJ In a revised deal announced Wednesday, Wanda said that it would sell 77 hotels to Guangzhou R&F Properties Co. for 19.91 billion yuan and a 91% stake in 13 tourism projects to property company Sunac China Holdings Ltd. for 43.84 billion yuan.Both Wanda and Sunac came under scrutiny by credit-ratings firms after Wanda said last week that it would sell the majority of its hotels and theme parks to Sunac for 63.17 billion yuan. The entire value of the revised deal, excluding debt, is now 63.75 billion yuan ($9.45 billion), slightly higher than the terms of the previous deal.
上演狗血剧情！富力空降万达融创发布会 A bit of chaos at the press conference announcing the deal, first R-F’s name was on the banner, then it was removed as the conference was delayed, then it was put back on
China Increases U.S. Treasury Holdings for Fourth Straight Month – Bloomberg China raised its holdings of U.S. Treasuries for a fourth straight month, a sign the nation is rebuilding its foreign-currency reserves as the yuan stabilizes
What’s the Rationale Behind Wanda’s $9.4 Billion Asset Sale? – Caixin Global Wanda will withdraw from residential real estate development projects and fully transition to an asset-light business model by 2020, Wang said. In a July 10 interview with Caixin, Wang said he expected Wanda Commercial’s revenue from rents to exceed property sales in the two years following the sale to Sunac, making it a true commercial services company.
China Mulls Bond Underwriter Cleanup – Caixin Global “The entire bond-underwriting business will be under huge impact if the plan becomes effective,” said an investment banker from a major securities firm in China. “The possibility of vicious competition may be ruled out in the future.”
Big Coal Burning Less Money, but Remains Buried in Debt – Caixin Global The seven largest state-owned coal companies in Shanxi province, the center of coal production in China, narrowed their losses in 2016 as they slashed overcapacity, but they remained burdened by a growing debt load
推进国企混改亟待澄清一些错误认识 _ 经济参考网 _ 新华社《经济参考报》官方网站 中国社会科学院工业经济研究所所长黄群慧在接受《经济参考报》记者采访时表示，混合所有制改革已经有了日趋完善的政策体系，实践推进也有了积极进展。但是，无论是在理论认知层面，还是在实践操作层面，还存在这样或那样的误区，也正是如此，围绕混合所有制改革的争论一直就没有停止过。黄群慧强调，为了保证国有企业混合所有制改革能够顺利推进，一些理论和实践问题亟待澄清，避免在今后的实践过程中再出现类似的误区。
中国经济正开启转型升级的下半程 —— 访国务院发展研究中心主任李伟 2017年07月15日 09:00:00 来源：《求是》2017/14 作者：本刊记者
Freight Business Chugs Ahead for China Rail Operator – Caixin Global China Railway Corp.’s (CRC) freight volume totaled 1.82 billion tons in the six months through June, according to a newly released report from the railway ministry. Shipment growth accelerated to 16.3% for the month of June, well ahead of the 14.7% growth rate in the first five months of the year.
Chinese Stocks Rise to 2015 High as Large Caps Extend Advance – Bloomberg Chinese equities traded offshore and on the mainland closed at the highest levels since 2015, with financial shares leading gains in Hong Kong and materials companies driving large caps higher onshore.
China adds blockbuster drugs to insurance list after price cuts – Reuters The Ministry of Human Resources and Social Security in a statement on Wednesday said it had agreed to add 36 drugs to the National Reimbursable Drugs List (NRDL) in return for an average 44 percent price cut against last year’s retail prices.
Bullet Trains Set to Get Speedier – Caixin Global: China plans to raise the top cruising speed of its bullet trains to 350 kph (217 mph) from 300 kph, Caixin has learned, six years after it slowed down the newly developed trains over safety concerns. The speed increase will go into effect around the National Day holiday on Oct. 1. It will start on one of the busiest lines – the 1,318-kilometer Beijing-Shanghai route. The shortest travel time on that line is currently about 4 hours and 50 minutes.
Politics And Law
Party members told to give up religion for Party unity or face punishment – Global Times Party members should not have religious beliefs, which is a red line for all members … Party members should be firm Marxist atheists, obey Party rules and stick to the Party’s faith … they are not allowed to seek value and belief in religion,” Wang Zuoan, director of the State Administration for Religious Affairs (SARA) wrote in an article released in the Qiushi Journal on Saturday, the flagship magazine of the CPC Central Committee.
Chinese President calls for “every possible effort” to solve grievances of petitioners – Xinhua He said officials must treat the handling of public petitions as important work to keeping abreast of public events, pooling people’s wisdom, protecting the public interest and improving social solidarity. Xi, also general secretary of the Communist Party of China (CPC) Central Committee, made the remarks in a written instruction conveyed to the eighth national conference on petition work, which was held in Beijing Tuesday to Wednesday. 习近平：千方百计为群众排忧解难 不断开创信访工作新局面
Top graft-buster stresses supervision in poverty alleviation – Xinhua Wang [Qishan], secretary of the CPC Central Commission for Discipline Inspection, made the remarks during a two-day inspection to Zhangjiakou in north China’s Hebei Province, which concluded Wednesday. 王岐山：发扬钉钉子精神 以扎扎实实的成效迎接十九大-新华网
The Varied Views of Dissidents in China — Maria Repnikova In my work on China’s critical journalists, editors, and academics over the past decade, I have found that their attitudes towards radical political reform have often been ambivalent in the post-Tiananmen era. This does not equate, however, to apathy or a lack of determination to affect governance change.
Foreign And Defense Affairs
Royal Navy scrambles to shadow Chinese warships in English Channel as they head to Baltics for first war games with Russia The trio of Chinese warships passed through the Strait of Dover under the watch of the HMS Richmond, a Type 23 frigate, at the weekend.
China is being ‘unusually aggressive’ in border row | South China Morning Post Beijing has given virtually daily warnings to its neighbour over the deadlock on a remote Himalayan plateau, where Indian and Chinese troops have been in a tense face-off. Foreign Secretary Subrahmanyam Jaishankar told lawmakers in a closed briefing on the dispute that India wanted a diplomatic settlement, the reports said.
The South China Sea seven years on | East Asia Forum US policy has caused an international spotlight to be pointed at the SCS, raising doubts and apprehensions around the globe regarding China’s future behaviour. Given the very poor hand Washington had to play, this is likely the best possible outcome that could have been achieved peacefully. The Trump administration would be wise to continue to keep the SCS dispute in proper perspective to other more important interests and issues that Washington has with Beijing. Michael McDevitt is Senior Fellow in Strategic Studies at the CNA Corporation.
US intelligence shows North Korean preparations for a possible ICBM test – CNNPolitics.com Two administration officials familiar with the latest intelligence confirm there are indicators of test preparations that could lead to a potential launch in about two weeks. US satellites have detected new imagery and satellite-based radar emissions indicating North Korea may be testing components and missile control facilities for another ICBM or intermediate launch, officials say.
North Korea may have more nuclear bomb material than thought: U.S. think tank The analysis by 38 North, a Washington-based North Korean monitoring project, was based on satellite images of the radiochemical laboratory at the Yongbyon nuclear plant from September until the end of June, amid rising international concerns over North Korea’s nuclear and missile programs.
University of Montana student detained in China | Local | missoulian.com A family friend, Tom Mitchell, Beijing bureau chief for the Financial Times, said the arrest took place a few weeks after an altercation between the McLeans and a cab driver. A U.S. State Department spokesperson said Tuesday the agency was aware of Guthrie McLean’s detention but declined further comment.
As U.S. Attention Wanes in Southeast Asia, China Woos Myanmar – The New York Times As the Trump administration pays little attention, China is exercising strategic and economic interests that come from geographic proximity, using deep pockets for building billion-dollar infrastructure and activating ethnic ties with some of the rebel groups, all areas where the United States cannot compete.
Hong Kong, Macao And Taiwan
Taiwanese founder of Eslite book chain dies at 66 | South China Morning Post Robert Wu Ching-yu, whose well-known chain Eslite brought the novelty of a 24-hour bookshop to the Taiwanese capital, has died from a heart condition at 66.
Tech And Media
Isabel Ge Mahe Named Apple’s Managing Director of Greater China – Apple Born in Shenyang, Liaoning, and fluent in Mandarin, Isabel earned Bachelor and Master of Electrical Engineering degrees from Simon Fraser University in British Columbia. She holds an MBA from the University of California, Berkeley.
Apple may stop taxing in-app tipping in China – TechNode Apple is planning to remove its controversial App Store policy of taking a 30 percent cut on tipping from users to content creators in China, local media The Paper is reporting (in Chinese), citing several sources they identified as execs at Chinese internet firms. Several game developers also got wind of Apple’s plan to change its tipping policies, the report noted.
China’s cyber watchdog orders top tech platforms to increase self-censorship China’s top cyber authority ordered the country’s top tech firms to carry out “immediate cleaning and rectification” of their platforms to remove content deemed offensive to the Communist Party and the country’s national image, it said on Wednesday.The watchdog held a meeting with representatives from firms including Tencent Holdings Ltd, Baidu Inc and Sohu.com Inc, on Tuesday where it gave them a list of specific errors, the Cyberspace Administration of China (CAC) said in a statement on social media.
北京市网信办治理自媒体八大乱象|自媒体|网信办_新浪科技_新浪网 7月18日，北京市网信办依法约谈搜狐、网易、凤凰、腾讯、百度、今日头条、一点资讯等网站的相关负责人，责令网站立即对自媒体平台存在的“曲解政策 违背正确导向”、“无中生有 散布虚假信息”、“颠倒是非 歪曲党史国史”、“格调低俗 突破道德底线”、“惊悚诱导 标题党现象泛滥”、“抄袭盗图 版权意识淡薄”、“炫富享乐 宣扬扭曲价值观”、“题无禁区 挑战公序良俗”等八大乱象进行专项清理整治，同时市网信办向上述网站下达了行政执法检查记录。
Tencent co-founder brands LeEco a ‘Ponzi scheme’ | South China Morning Post The debt-ridden group of technology companies founded by billionaire Jia Yueting declined to comment on the scathing critique posted by Tencent co-founder Zeng Liqing, and “liked” by the company’s chairman Pony Ma Huating, and Xu Xiaoping, one of China’s foremost angel investors.
Thousands of Live-Streamers Taken Offline for Sexual Content – SixthTone The State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) shut down 73 live-streaming platforms and 91,443 live streams between January and June, according to a report released by its anti-pornography and anti-piracy unit on Monday. The campaign, part of the government’s wider effort to purge the virtual realm of content it sees as vulgar, has also permanently suspended more than 120,000 user accounts and blacklisted some 1,879 live-streamers.
How a News Startup Caught China’s Tencent by Surprise — The Information $$ Average daily active users recently surpassed 100 million, according to its developer, Beijing Bytedance Technology, making it one of the country’s most popular media content platforms. The company was reportedly valued at more than $11 billion in its latest fundraising earlier this year, making it one of China’s most valuable private tech companies. Its investors include Sequoia Capital China and the investment arm of China Construction Bank. Whether Toutiao has the staying power to become China’s next breakout hit depends in part on whether internet goliath Tencent succeeds in attempts to squash it.
Society, Art, Sports, Culture And History
“Let’s Go, Mantis Shrimp”: The Most Trending Chinese Internet Slang of 2017 – Summer Edition | the Beijinger A diet of video games and old movies have influenced the most popular online trends, as seen by a list of the hottest Chinese internet slang from the first half of this year expected to bewilder anyone not up-to-date on some very obscure references. As compiled by Headline News, the online slang terms originate from such varied sources as online video game banter, a Yu-Gi-Oh card game and even a 25-year-old Stephen Chow movie
China settles 1.39 mln divorce cases in 2016 – Xinhua Also, a total of 1,284 protective orders have been issued to protect the rights of women, minors and the elderly since March 1, 2016, when the law against domestic violence went into effect.
China’s Silicon Valley to migrant workers: No degree? No problem | South China Morning Post The Chinese government plans to grant permanent urban residency to 100 million rural migrants by 2020, although first-tier cities such as Beijing and Shanghai have set up high thresholds for non-locals to obtain permanent residency.
Ancient Chinese bronze dish sells for US$27m at auction | South China Morning Post The basin, the “Xi Jia pan”, was named after its owner, a high-ranking official during the Western Zhou dynasty. He was the main collector of China’s earliest known collections of poems the Book of Songs. The dish has had several owners after it was passed down over the centuries
Energy, Environment, Science And Health
Data of China’s first X-ray space telescope to be open to global scientists – Xinhua HXMT carries a trio of detectors — the high energy X-ray telescope (HE), the medium energy X-ray telescope (ME) and the low energy X-ray telescope (LE) — that cover a broad energy band from 1 keV to 250 keV. It will help scientists better understand the evolution of black holes and the strong magnetic fields and interiors of pulsars.
China’s Clean Energy Powers Up – Caixin Global Nuclear, wind, solar and hydropower accounted for 27.2% of China’s total electricity-production mix in the first six months of the year, said Yan Pengcheng, spokesman of the National Development and Reform Commission (NDRC), the country’s top economic-planning body. That was up 1.8 percentage points from the same period a year ago.
Is coal making a comeback in China? | China Dialogue Steel and power generation have been the main drivers of China’s coal demand, according to Huw Slater, research and projects manager at China Carbon Forum, a non-profit organisation working in the climate and environmental sector. China’s steel production reached a record high in June 2017. This is consistent with a surge in demand for coking coal in the half of the year.
Agriculture And Rural Issues
Dim Sums: Rural China Economics and Policy: Wanted: Premium Rice Prices Chinese officialdom’s strategy is to urge farmers to produce high-quality rice that will justify the high prices needed to cover rising production costs. Strategic plans and guidance documents are filled with exhortations to build brands, grow organic, and obtain certifications to get premium prices.
The Abandoned Rural Farms Threatening China’s Food Security – Sixth Tone Households in which only men migrate are least likely to abandon their land, since the women can pick up the slack. But as more and more women have migrated for work every year, their status within the family has also improved. By breaking traditional gender roles, women can assert a new kind of freedom and change the power distribution within their families, playing more important roles in decision-making processes and more strongly influencing their families’ agricultural production and land transfer.
Beijing School Strands 150 Students in Mountains During Hiking Trip, Refuses to Call Police | the Beijinger After spending a night outdoors in a wilderness area of Miyun District, the outdoor class trip of the Beijing Experimental School set out at 9am Thursday for their journey home, but was not able to find its way back. It was not until nine hours later that teachers in charge of the trip finally admitted they were lost. But as student and Weibo user NiallGirl revealed online, teachers refused to contact the police out of fear of damaging the school’s reputation. They also forbade students from doing the same.
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