Saturday, October 21, 2017

Welcome To The Xi Era--Sinocism Weekly 10.21.17

Welcome to the first issue of the Sinocism China Weekly since the regular service went behind a paywall on October 16. Thanks for sticking around, hope you missed me at least a little bit…

If you did not subscribe to the pay service you missed these issues:

  1. One Congress Ends, Another Begins; Zhou Xiaochuan Speaks Again; Telling The China Story Well Sinocism-10.16.17

  2. Xi's Personnel Moves; Control Over Markets; Xinhua Praises Chinese Democracy; Trump's Asia Itinerary--Sinocism 10.17.17

  3. 19th Party Congress Work Report, Thought on Socialism with Chinese Characteristics for a New Era--Sinocism 10.18.17

  4. Welcome To The Xi Era; Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era--Sinocism-10.19.17

If you are on the fence about subscribing please do so soon as the price is set to rise in November from the current $11/mo or $118/year. You can subscribe here.

So far the 19th Party Congress has made clear that we are now entering the third era of the PRC. First was the Mao Era, second was the Deng Era, and now, after a couple of caretakers, we are in the Xi Era.

Three of the most important developments from the 19th Party Congress so far are Xi Thought, a China that has shed any pretense of “biding its time 韬光养晦” and instead wants to take “center stage in the world”, and a change in the principal contradiction governing society.

First, Xi’s work report to the 19th Party Congress introduced a new theory-"Thought on Socialism with Chinese Characteristics for a New Era 新时代中国特色社会主义思想. Within a day that formulation in official media had become "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era 习近平新时代中国特色社会主义思想” and the other six members of the 18th Politburo including Liu Yunshan, the official in charge of propaganda and ideology, were using the “Xi Jinping Thought…” version. That to me seems like a pretty clear signal this will end up in the Party Constitution as an eponymous guiding ideology.

The introduction of Xi Thought makes the question of succession while Xi is alive a moot issue. So long as Xi has not yet met Marx he is the man with an eponymous theory in the Party Constitution so no one will have more authority than he does, regardless of whether Xi is Party Chairman, General Secretary, Central Military Commission Chairman or head of the China Go Association.

Second, the language in the Work Report that suggests China will become more assertive on the world stage and believes its governance model is attractive to other countries will likely raise all sorts of alarms in Asian and Western capitals. Xi declared that China "has become a great power in the world" and "it is time for us to take center stage in the world and to make a greater contribution to humankind".  The West and Asia are already growing wary of Beijing and with the clear signals coming from this work report it is easy to foresee much more suspicion of and resistance to China and its overseas activities.

Third, the Party has changed the “principal contradiction” the Marxists in China believe defines society. The principal contradiction since 1981, near the start of the Deng Era, had been “the ever-growing material and cultural needs of the people versus backward social production”. For the Xi Era that contradiction is now “between unbalanced and inadequate development and the people's ever-growing needs for a better life”. The importance of this can not be understated as it will inform the underpinnings of most policies. It is not a coincidence the work report omitted the GDP target. That is not to say there will be changes overnight, or that they will be smooth or successful, but this is not just some slogan that can be ignored.

The next big news from the Congress this coming week will be the October 24 announcement of the new Central Committee and the release of the amended Party Constitution, which most people expect will include “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era 习近平新时代中国特色社会主义思想”. We will learn the composition of the 19th Party Congress Politburo and Standing Committee on October 25.

Welcome to the Xi Era. It is going to be one big Party.

Thanks for reading, don’t forget to subscribe here if you want to read the daily version of Sinocism.

The Essential Eight

1. Xi Thought, Xi Adulation

Senior CPC leaders urge implementation of Xi's thought - Xinhua;

Senior Communist Party of China (CPC) leaders Thursday called for efforts to fully comprehend and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.

"The Thought represents the latest achievement in adapting Marxism to the Chinese context, and is an important component of the system of theories of socialism with Chinese characteristics," said Li Keqiang when joining a panel discussion at the 19th CPC National Congress, which opened Wednesday.

With tears and song, China welcomes Xi as great, wise leader - Reuters:

“Xi Jinping... has obtained the heartfelt love and respect of the entire party, army and people, he deserves to be called wise leader,” Beijing party secretary Cai Qi, a Xi ally and one-time colleague, said on Wednesday at a meeting of the city delegation, according to the official Beijing Daily.

‘Thrilling’ report from ‘saviour of socialism’: cadres gather to heap praise on Xi Jinping | South China Morning Post:

Chen Miner, a rising star who became the party chief of Chongqing in July, praised Xi by name several times in his seven-minute speech at the municipality’s panel on Thursday.

Seen as an ally of Xi, Chen is one of China’s most closely watched rising political stars.

“The more I study General Secretary Xi’s report, the deeper I feel his thoughts are,” Chen said in the discussion, which was open to the media. “The more I discuss it, the more abundant I feel its content is.”

Xi Jinping, China’s new revolutionary hero - FT $$:

One person who advises senior officials attributes Mr Xi’s now seemingly unassailable dominance of Chinese politics to a Machiavellian insight. “Because of the economic prosperity of the reform era, almost everyone in officialdom was corrupted,” he says. “Xi used this fact as leverage to scare everyone. They have to follow him because everyone is vulnerable. All you have to do is investigate them.”..

Mr Xi hailed China as a model for “nations that want to speed up their development while preserving their independence”. In private, many party colleagues speak far more bluntly. “The American people elected a 70-year-old celebrity with no relevant experience,” one of them recently told the Financial Times. “Our system forces men like Xi to prove themselves for decades in a series of increasingly difficult posts.”



2. Xi's Global Ambitions

Xi’s Banner Marches Out Into the World | China Media Project:

What we should hear, and what we should consider very seriously, is the fact that Xi Jinping’s banner term, the phrase meant to be the quintessence of his governing vision, is marching out into the world.

This is something quite noteworthy if we look back on the history of banner terms emerging from other Chinese leaders in the reform era. None of these — not “Deng Xiaoping Theory,” not Jiang Zemin’s “Three Represents,” nor Hu Jintao’s “Scientific View of Development” — was ever presented so manifestly, or at all, as a vision for not just China but for the entire world.

The West’s errant conception of China - Global Times:

The Western media's conception of China represents their sentiment in the West which is far from having adapted to China's rise. Their anxiety over China's rise leads to their paranoia and unreasonable belief that "the West is all right and China is all wrong." The influence of the Western press used to be overwhelming but the internal chaos and divide in the West weakens their position. The influence of the Western press is shrinking.

China in the new era is more and more confident. The breathless pace of development and ever-changing dynamics over the past decades reinforce China's confidence. China can only succeed by following the path that is in line with its national condition. China cannot replicate others' experience, particularly with its political system. This is the consensus of Chinese society. Therefore the incorrect coverage of China by the Western press can only mislead its own society and its disturbing influence on China is increasingly diluted.

CIA Director Says More Powerful Xi Could Be a Force for Good - Bloomberg:

“We think that President Xi will come out of this in a dominant position with incredible capacity to do good around the world,” Central Intelligence Agency Director Mike Pompeo said Thursday in Washington. He said the CIA’s “old-school guys who used to do Kremlin work” in the days of the Soviet Union are now tracking the political machinations surrounding the congress that’s held in China only once every five years.

Comment: Be careful what you wish for...

3. Marxists Need A "Principal Contradiction"

Comment: Lest we forget that Xi and his colleagues are Marxists...

Xinhua Insight: China embraces new "principal contradiction" when embarking on new journey - Xinhua:

The "principal contradiction" is a term most Chinese are familiar with from grade school, but only a tiny number of foreigners, experts in sinicized Marxism will know this seemingly obscure piece of political jargon.

Marxists interpret the world through dialectical materialism. Contradictions -- or "dynamic opposing forces" -- are omnipresent in society and drive social change. The "principal contradiction" is what defines a society. By identifying and solving it, society develops peacefully. Left unsolved, it can lead to chaos and eventually, as Marx predicted, to revolution.

Since coming to power in 1949, the CPC has identified the principal contradiction, and, as the times changed and contradictions changed, crafted new policies in response.

Soon after 1949, it was "the people versus imperialism, feudalism and the remnants of Kuomintang forces" which evolved into "proletariat versus bourgeoisie," a mentality which led to prolonged social turmoil across the country.

In 1981, the CPC changed its assessment of the principal contradiction to "the ever-growing material and cultural needs of the people versus backward social production," a historic policy shift at the heart of reform and opening up. Developing the economy, mainly through growth, was thus endorsed by the CPC as the "central task." Market economic reforms, seen at the time as a magic bullet to transform production, were unleashed on an unprecedented scale...

"What we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life," Xi said.



Comment: But not Everyone Thinks The Old Principle Contradiction Is Resolved

In China’s Coal Capital, Xi Jinping’s Dream Remains Elusive - The New York Times - Chris Buckley:

There are hundreds, if not thousands, of industrial towns and cities like Datong across China, where living standards remain far from the “moderate prosperity” that Mr. Xi has promised.

Experts say the grass-roots grievances in provincial China do not pose an imminent threat to Mr. Xi and the Communist Party. But they warn that there is risk as Mr. Xi raises expectations...

In his opening speech on Wednesday to the congress, Mr. Xi warned that the party had to improve its performance at addressing social grievances.

“The principal contradiction facing society in the new era is that between unbalanced and inadequate development and the people’s ever-growing need for a better life,” Mr. Xi told delegates in the Great Hall of the People in Beijing.

4. 19th Politburo Standing Committee Rumors

Comment: Take these as rumors for now. I have heard other names and lineups, all will be revealed soon enough.

Xi Jinping’s leadership reshuffle revealed: meet the pair poised to become two of China’s most powerful men | South China Morning Post:

President Xi Jinping’s trusted ally Li Zhanshu stands a good chance of becoming chairman of China’s parliament while Communist Party organisation chief Zhao Leji is likely to head its corruption watchdog, sources have told the South China Morning Post.

Comment: Zhao Leji would be an interesting choice to head the CCDI given all the rumors of his problems and the detention of Wei Minzhou, a top aide to Zhao when Zhao was Party Secretary of Shaanxi

A ‘dream come true’ for communist ideologist behind three Chinese presidents | South China Morning Post:

The Communist Party’s principal theorist, Wang Huning, is odds-on to climb to the top rung on the ladder, the Politburo Standing Committee, when the party unveils its new leadership line-up next Wednesday, sources have told the South China Morning Post.

Comment: SCMP says he will succeed Liu Yunshan as top official for propaganda and ideology...Remarkable that Xi trust him given his close service to both Jiang Zemin and Hu Jintao, and his long-rumored messy personal life. We will know soon enough, for now take with a grain of salt

Wang Huning’s Neo-Authoritarian Dream - Jude Blanchette:

After the June 4th crackdown and the purge of Zhao Ziyang, however, neo-authoritarianism needed a brand makeover. Its call for a “transition” to a more democratic form of political system (albeit vaguely outlined) was jettisoned, leaving only the call for strong and unchallenged leviathan in the form of the CCP.  Neo-authoritarianism thus lived on, reborn as “neo-conservatism,” which remained a dominant ideological force in 1990s. One influential promoter of this new ideology was the princeling Chen Yuan (Chen Yun's son), who called for the CCP to ditch Marxism (which few seemed to believe anyhow) and instead anchor its legitimacy to more primal forces – nationalism and political order. “We are the Communist Party,” Chen once said, “and we will decide what communism means.”

The legacy of Wang’s neo-authoritarianism and its cousin, neo-conservatism, lives on today under the reign of Xi Jinping.  Look at the first five years of Xi Jinping’s administration through the neo-authoritarian lens, and we see a consistent theme: clawing power back to Beijing.

5. RMB Pressure Manageable, For Now At Least

China Bought Foreign Exchange in September (Just Not Very Much) | Council on Foreign Relations - Brad Setser:

There is no need to get carried away though: China looks to have—per the foreign exchange settlement data, and the change in the PBOC’s balance sheet—bought about a billion dollars in September.  That’s nothing for an economy of China’s size.

But the story—told in the Treasury’s latest foreign exchange report, among other place—that China is intervening to prop its currency up rather than hold it down is now a bit dated.

6. Guo Shuqing To Be New PBoC Head?

Comment: "Liberal market reformer"? What does that mean in Xi's China?

Liberal market reformer set to be named as China’s next central bank governor | South China Morning Post:

China is likely to name Guo Shuqing, a key figure in China’s market reform camp as the next central bank governor, two independent sources have told the South China Morning Post.

Guo, the current chairman of the China Banking Regulatory Commission, is currently ahead of the other candidates for the post – including Jiang Chaoliang, the Hubei party secretary; Yi Gang, a deputy governor at the People’s Bank of China and Liu Shiyu, the chairman of China Securities Regulatory Commission – said one source, who declined to be named.

7. Taiwan In The Congress Work Report

What Xi Jinping said about Taiwan at the 19th Party Congress - Richard Bush:

...analysts should look both at whether the nine Taiwan elements of past reports appear in Xi Jinping’s report and at what kind of personal stamp he puts on future policy...

Xi Jinping reaffirmed the first six principles but not the last three. Items #8 and #9 are probably not that important in the grand scheme of things. To not reiterate the commitment to “place hopes on the Taiwan people” could be more significant because past statements suggested that Beijing would take into account the views and sentiments of those people. Will popular opinion on Taiwan no longer be a basis for Taiwan policy?...

For those interested in the ins and outs of Chinese elite politics, it’s worth noting that in item #1, the three previous congress reports included Jiang Zemin’s 1995 eight-point proposal as an important basis for policy. Xi Jinping made no reference to the proposal

8. Gaokao Reform Coming

China Announces Radical Overhaul of College Entrance Exam - Sixth Tone:

China will build a comprehensive new national college entrance examination system by 2020, Minister of Education Chen Baosheng announced at China’s 19th Party Congress on Thursday.

The overhaul of the exam, or gaokao, promises to be the most wide-ranging reform since college entrance exams resumed in 1977 after the Cultural Revolution. Policymakers aim to reduce the role of the gaokao in determining students’ future life chances, address barriers to exam enrollment among children of migrant workers, and ease the difficulties faced by rural students hoping to enroll in top universities, Chen said.

我国到2020年要全面建成新高考制度,目前进展如何?|政解 - 国内 - 新京报网

Business, Economy, Finance And Trade

Chinese city confirms Xinfa aluminum capacity cut - Reuters Xinfa Group, one of China’s top aluminum producers, will have to close 381,900 tonnes per year of smelting capacity this winter, its home city of Liaocheng confirmed on Friday.

China’s Road to Electric-Car Domination Is Driven in Part by Batteries - WSJ Foreign batteries aren’t banned in China, but auto makers must use ones from a government-approved list to qualify for generous EV subsidies. The Ministry of Industry and Information Technology’s list includes 57 manufacturers, all of them Chinese. Foreign battery companies declined to discuss their absence. But analyst Mark Newman of Sanford C. Bernstein said the government has cited reasons such as paperwork errors to exclude foreign suppliers.

Trump’s America First Trade Agenda Roiled by Internal Divisions - The New York Times: Mr. Navarro does remain an influential voice with the president on China, the topic of several of his books. He recently attended briefings with top White House officials ahead of Mr. Trump’s trip to Asia next month, one official said. But the reorganization is still a sign of a diminishing role for Mr. Navarro, who the president suggested in December would be given a post on par with that of Mr. Cohn

Politics, Law And Ideology

NPCSC to Consider New Criminal Law Amendment, Apply National Anthem Law to SARs & Hear Judicial Reform Reports – NPC Observer Buried in the pre-19th Communist Party Congress propaganda frenzy was a bland official report on the Council of Chairmen’s latest meeting on October 16. The Council decided that the 30th—and third last—session of the 12th NPC Standing Committee (NPCSC) would take place from October 30 to November 4, consistent with our earlier predictions. This post is a (fairly detailed) rundown of the items on the Session’s agenda.

[视频]党的十九大主席团举行第二次会议 习近平主持会议_CCTV节目官网-CCTV-1_央视网( 会议通过了将关于十八届中央委员会报告的决议(草案)、关于十八届中央纪律检查委员会工作报告的决议(草案)、关于《中国共产党章程(修正案)》的决议(草案)提交各代表团讨论。 会议通过了十九届中央委员会委员、候补委员和中央纪律检查委员会委员候选人预备人选建议名单,提交各代表团酝酿。 会议通过了经各代表团酝酿的大会选举办法。会议还通过了监票人、总监票人名单,待正式选举时提请大会通过。

"What's Modernisation?" - China State Media Explain China's 'New Era' With a Rap Video | What's on Weibo As with previous major political gatherings, speeches and rhetoric are not the only means by which the Party and state media seek to convey their message to the wider population. A video titled “What is modernization? Let us tell you in a rap!” (“现代化”是什么化?一段嘻哈告诉你!) is the latest in a series produced by state broadcaster CCTV. The video is being spread through social media.

China: Time of Xi - Episode 1: People's Republic - YouTube It also investigates how Xi’s early experiences may have shaped his vision for a “Chinese dream” and driven him to very publicly commit to ending poverty for the tens of millions of Chinese still living below the UN poverty line. (Courtesy: Discovery Channel)

(CPC Congress) CPC delegations deliberate nominees for new central leadership - Xinhua Delegations of the 19th National Congress of the Communist Party of China (CPC) Saturday deliberated the proposed name lists of nominees for the candidates of members and alternate members of the 19th CPC Central Committee, and members of the Central Commission for Discipline Inspection (CCDI). The delegations also discussed the draft resolutions on the report of the 18th CPC Central Committee, the work report of the 18th CCDI, and the amendment to the Constitution of the CPC, which were approved at a presidium meeting Friday.

Feature: Xi "chews the fat" with delegates - Xinhua Xi, being a delegate of Guizhou himself, joined a panel discussion with other delegates from the southwest China province who are in Beijing for the 19th National Congress of the Communist Party of China (CPC). With poverty reduction never far from his mind, Xi became most animated on learning that two neighboring poor villages in Panzhou City of Guizhou had come together to build a farm and a ham processing plant to raise villagers' income.

陈小鲁谈生死观:为什么要推广缓和医疗_政经频道_财新网 Chen Yi's soon Chen Xiaolu talks with Caixin about his efforts to promote living wills, looks to have gotten through the Anbang problems

What the Chinese Communist Party Learned From Lenin | Foreign Affairs In 2009, when Xi was the headmaster of the Central Party School, a position that served as a steppingstone to the top, he commissioned a sprawling study of the Soviet collapse. Its conclusion: the Soviet Communist Party’s failure to dominate the institutions underpinning its power, such as the military, spelled its doom. “Why must we unwaveringly assert our party's control over the military?” Xi asked an audience at a private party meeting three years later. “Because,” he said, “this is the lesson the Soviet collapse teaches. The Soviet Red Army was depoliticized and departyized, becoming a national institution, and so the Soviet Communist Party surrendered its weapons. When those who wished to save the Soviet Union did step forward, the instrument

In Xi’s New Era, Four Government Bodies to Bring Country Forward - Caixin Global In a “new era” envisioned by Communist Party chief Xi Jinping, the country will set up new bodies to promote four specific areas: the rule of law, natural resource conservation, veteran benefits, and a strong supervisory system at different levels, from local to national.

Foreign and Military Affairs

Tillerson Signals Impatience With China While Vowing to Stay On - Bloomberg About two weeks before Trump heads to Asia, the top U.S. diplomat projected a tougher demeanor, particularly toward China whose help the U.S. has sought to rein in North Korea’s nuclear program. “I think it is important that China knows -- OK, we’ve been having these conversations now for about six months,” Tillerson said in the interview Thursday in the State Department chamber where he receives visiting foreign diplomats. “We’re expecting to see some change, we’re expecting to see some movement, whether it’s North Korea, or whether it’s South China Sea, or whether it’s trade.”

Beijing pulls out of human rights dialogue with Canberra - The Australian The Australian can reveal the long and unsuccessful diplomatic struggle by the Turnbull government to revive the dialogue, which Beijing has not allowed to meet for more than 3½ years. At the same time, the Australian Security Intelligence Organisation revealed in its annual report yesterday that foreign ­governments were increasingly attempting to “shape the opinions” of the public and media in covert operations. ASIO said ethnic and religious communities in Australia were the subject of activities “designed to diminish their criticism of ­foreign governments”.

Reinforcing the Front Line: U.S. Defense Strategy and the Rise of China | CSBA In Reinforcing the Front Line: U.S. Defense Strategy and the Rise of China, CSBA Senior Fellow, Evan Montgomery outlines the key elements of a U.S. defense strategy for the region—one that is based on the enduring grand strategy of global leadership and engagement, but also recognizes the new challenges posed by China’s growing military power.

Alternative Models for the Central Military Commission - Jamestown - Dr. Phillip Saunders In addition to changing which individuals occupy key positions, the Party Congress also provides an opportunity to adjust the structure of the CMC to match the PLA’s post-reform organizational structure and the changes in responsibilities of the senior officers who lead different parts of the PLA. There are four likely models for a restructured CMC (a “status quo plus” CMC; an enlarged CMC; an operational CMC; and a management CMC), each with respective pros and cons. Decisions about how to restructure the CMC will provide new evidence about Chinese priorities, the relative influence of different parts of the PLA (and the officers chosen to lead those parts), and the state of civil-military relations in China.

China Wrongly Detained 3 Human Rights Activists, U.N. Experts Say - The New York Times The panel, the Working Group on Arbitrary Detention, made up of five independent experts, said the three activists, Hu Shigen, Zhou Shifeng and Xie Yang, had been punished for promoting human rights. It said their treatment did not conform with China’s obligations under the Universal Declaration of Human Rights and urged Beijing to consider amending its laws to bring them into conformity with international norms.

China has the world’s biggest military force. Now Xi Jinping wants it to be the best | South China Morning Post Military analysts also said the powerful Central Military Commission, which Xi chairs, was destined for big changes. Nearly 90 per cent of the military delegates to the party congress are new faces while two CMC heavyweights have been ousted.

China: China’s failure to share river data may spark off new round of tensions - The Economic Times This helps India forecast floods and make necessary arrangements to tackle rise in water level during monsoon, officials here told ET, adding that the Chinese government has failed to share information this year during the stipulated five-month period. Officials said they were expecting China to start sharing data on the rivers after the Dokalam crisis was resolved, but there’s no indication of any such move. Earlier, there were fears that Beijing may be working on diverting water from the Brahmaputra to the drier regions in the country’s west.

Will Trump’s Beijing visit bring new sanctions against Chinese banks in US? | South China Morning Post Anthony Ruggiero, an expert in the use of targeted financial measures for the Foundation for Defence of Democracies, told a think tank event this week in Washington that additional US sanctions against Chinese entities with alleged links to North Korea’s nuclear weapons programme could come around Trump’s visit.

CPC maintains exchange, dialogue with DPRK's ruling party - Xinhua Exchange between the CPC and the Workers' Party of Korea plays an important role in relations between the two countries, Guo Yezhou, vice head of the International Department of the CPC Central Committee, told a press conference on the sidelines of the 19th CPC National Congress.

Space will see Communist loyalty: Chinese astronaut - China Daily Jing Haipeng, the first Chinese astronaut to go into space three times, has voiced his desire to go into space again as a further demonstration of his loyalty to the Communist Party of China (CPC).

China’s South Sea Fleet gets new unit as PLA looks to boost its presence in disputed waters | South China Morning Post The North Sea Fleet established a marine rescue squadron in 2011, which is designed to minimise losses in the event of submarine accidents. Having a similar unit in the South China Sea is a signal of the fleet’s enhanced status. The South Sea Fleet’s area of responsibilities include the northern regions of the Taiwan Strait and southern areas from James Shoal, including the Paracel Islands, Macclesfield Bank and the disputed Spratly Islands.

明星将领乙晓光空军上将转岗中部战区_政经频道_财新网 Looks like Yi Xiaoguang has replaced Han Weiguo commander of the PLA's Central Theater Command

After six tests, the mountain hosting North Korea’s nuclear blasts may be exhausted - The Washington Post Chinese scientists have warned that another test under the mountain could lead to an environmental disaster. If the whole mountain caved in on itself, radiation could escape and drift across the region, said Wang Naiyan, former chairman of the China Nuclear Society and a senior researcher on China’s nuclear weapons program.

Trump expected to pressure China's Xi to rein in North Korea: officials - Reuters In an interview with Fox Business Network’s Maria Bartiromo, Trump said he wants to “keep things very, very low key” with Xi until the Chinese leader emerges from the party congress. “I believe he’s got the power to do something very significant with respect to North Korea. We’ll see what happens. Now with that being said, we’re prepared for anything. We are so prepared, like you wouldn’t believe,” Trump said in the interview, to air on Sunday.

Tech And Media

Apple Watch Hits Cellular Snag in China - WSJ Industry analysts say the suspension likely stemmed from Chinese government security concerns to do with tracking users of the device, which uses different technology than standard mobile phones. China strictly regulates mobile phones and all three major telecom service providers are state-owned companies. To get a SIM—subscriber identity module—card to operate the phone, users must register under their real names with a network carrier.

Taiwan probes Sea for Chinese ownership ahead of $1bn US listing - Reuters Sea, a Singapore-based online games and ecommerce business that has just wrapped up a $1bn fundraising ahead of a New York listing, is at risk of being ejected from Taiwan, which accounts for almost a third of its revenues. The group is under investigation in Taiwan over allegations it did not disclose its links to China. The news comes just ahead of its debut in New York, on Friday.

看头条之改变—新算法,正能量 10月14日凌晨,今日头条悄然改版,较以往少了一些喧嚣嘈杂,多了几分清清爽爽。而此前一天新华网报道称,为迎接党的十九大召开,今日头条联合40多家主流媒体,以主流媒体的十九大特别专题作为基础,头条大数据作为素材,综合音频、视频、图文等多种表现形式,汇集鲜活生动的内容,增强吸引力感染力,使十九大的宣传报道更接地气更富成效。接下来,今日头条还将发挥大数据优势,为媒体提供报道素材、定制阶段性数据报告及网民反馈报告,多角度、多方面助力主流媒体十九大报道。// Toutiao comes to heel for the 19th, mixes alogorithmically driven news with Party directed placcement

Society, Art, Sports, Culture And History

Stephon Marbury buys arena football franchise - in China - China Sports Insider Following on from yesterday’s post about the growing trend of athletes becoming sports team owners, it can now be revealed that Stephon Marbury has purchased the Beijing Lions, a cornerstone franchise of the fledgling China Arena Football League.

When a Chinese Idol Falls in Love – Elephant Room: Make China Relatable China’s hottest, juiciest male idol, (or “little fresh meat 小鲜肉”, as we like to call them today) Lu Han, announced he’s dating Guan Xiaotong, a popular female actress (or “little flower 小花”) who just turned 20 this year. What is truly astonishing - so astonishing that we decided to dedicate a post about it - is how public opinions evolved around this news. Within a few hours of Weibo’s restoration, The Chinese Internet was quickly divided into two groups: on one side, we have the melon-eating outsiders (吃瓜群众) like us, who were shocked and talked about it for a minute or two with friends on dinner tables. On the opposite side there were the fans (“鹿饭”), over 40 million (estimated based on Lu's Weibo follower number) of largely young female Chinese who were utterly crushed. Unable to bear the news alone, they went on Weibo to console each other, and, to our surprise, started a massive, aggressive attack on Lu himself.

Report Details Destruction at Sichuan’s Larung Gar Buddhist Academy - RFA The report by two Tibetan rights groups — Free Tibet and Tibet Watch — shows that at least 4,725 homes have been leveled and about 4,800 residents forced to leave since July 2016 when authorities issued an order to destroy homes and to reduce Larung Gar’s population to 5,000 by Sept. 30, 2017.

Energy, Environment, Science And Health

New H7N9 bird flu strain in China has pandemic potential: study - Reuters Lab experiments on a new strain of the H7N9 bird flu circulating in China suggest the virus can transmit easily among animals and can cause lethal disease, raising alarm that the virus has the potential to trigger a global human pandemic, researchers reported on Thursday.

Food And Travel

Like Bali? Indonesia Wants to Create 10 of Them to Draw Chinese Tourists - Bloomberg China is on track to become the biggest tourist market for Indonesia for the first time this year, overtaking Singapore. That’s after a 46 percent surge in visitors from the world’s second-largest economy to 1.4 million in the first eight months of the year.


City-Wide Waterfront Greenway Coming to Beijing Next Year | the Beijinger By diverting some of the flow from the Miyun-Beijing canal, the new park area will stretch across five of the city's districts, one of which will start at Baiwang Park in Haidian and make its way north to Qikong bridge at the Miyun Reservoir.

Wednesday, October 18, 2017

A letter to readers

I wanted to personally thank all of you for sticking with me over the years. The Sinocism blog became the Sinocism China Newsletter in the Spring of 2012 after Beijing blocked An email newsletter was a workaround and it is quite gratifying to have grown from a few dozen readers to more than 30,000 subscribers today.

The daily newsletter is moving behind a paywall on Monday. I have wrestled with this move for a long time as I like offering Sinocism as a widely available service and I think it is important that as many people as possible have access to information to help us all better understand China.

The paid version will offer at least four daily updates a week and more commentary and analysis from me. In the future I plan to add membership forums and, as the business grows, contributors to expand the depth and breadth of the product.

I want as many of you as possible to stay with the daily and so am offering charter rates of $11/month or $118/year to all current Sinocism readers. These rates will rise soon.

Subscribe to Sinocism

I will continue with a free weekly version and have an exciting partnership to announce soon that will bring it to a much larger media platform, but the weekly will not be as deep or broad as the new paid daily version. You do not need to do anything if you want to continue receive the weekly version going forward.

To keep reading the daily version, and, as the Sinocism tagline suggests, “get smarter about China,” you will need to subscribe to the paid version. You can do that at

Thanks, and I look forward to working for all of you.


Thursday, October 5, 2017

Sun Zhengcai, Guo Wengui, Expanding Period Of Strategic Opportunity-Sinocism 10.4.17

Happy Mid-Autumn Festival. China is on holiday until October 9 so the newsletter is very sporadic this week. There may be one more issue by the end of the weekend, then back to normal publishing next week.

Readers in DC may be interested in a talk by Lenora Chu  about her new book Little Soldiers: An American Boy, a Chinese School, and the Global Race to Achieve. She will be speaking October 10 at 7PM at Sidwell Friends. If you want to attend please RSVP here.

A signup link for the new Sinocism subscription service will go live after midnight on Thursday October 5. The daily newsletter will switch to a paid subscription in a couple of weeks.

The Essential Eight

1. Sun Zhengcai Kicked Out Of The Party, Chongqing Officials In Boiling Hotpot Water

Communist Party expels former high-flyer Sun Zhengcai in countdown to key congress | South China Morning Post:

in an unusual move, Xinhua issued a correction to its report late on Friday night, toning down the accusations against Sun. The state news agency said Sun had “shaken his political stand” – not that he “forfeited his political stand” as it had reported. It also said Sun had “seriously violated the party’s political discipline and rules”, not that he had “seriously trampled on” them.

The revised list of Sun's alleged problems...seem worse than Bo Xilai's:

中共中央决定给予孙政才开除党籍、开除公职处分 将孙政才涉嫌犯罪问题及线索移送司法机关依法处理-新华网:


People's Daily comments the day after-人民日报评论员:从严治党 有腐必反--观点--人民网:

Five Senior Officials Left Off Party Congress Guest List - Caixin Global:

Notably, all five of the top officials were standing members of Chongqing’s Party Committee, including Zeng Qinghong, who oversaw personnel affairs at the municipal Party Committee, and Liu Qiang, who is in charge of the police and judicial departments in the city and is also a Chongqing vice mayor.

The other three are Wang Xiangang, head of the secretariat of the Chongqing Party Committee; Chen Lüping, also a vice mayor; and Tao Changhai, who heads liaisons with overseas Chinese groups.

A dozen more Chongqing officials could be caught up in Sun Zhengcai corruption probe, sources say | South China Morning Post:

Former party boss said to have told investigators about alleged wrongdoings of other cadres in the megacity

2. 19th Party Congress Guessing In High Gear

Comment: We are only 15 days away from the start of the Party Congress, probably three weeks from learning the makeup of the next Standing Committee. The folks at the Paulson Institute have built a fun service that lets you choose your preferred Standing Committee, while The South China Morning Post claims to have it on good authority that Wang Qishan will likely retire, Li Keqiang will stay on as premier and an eponymous theoretical contribution of Xi Jinping will be in the revised Party Constitution.

The Committee - MacroPolo:

The new members of The Committee will be publicly unveiled for the first time at the conclusion of the Congress. So who will make it onto The Committee? Join in the predictive fun by creating your own lineup for The Committee

Confident Xi reaches out to trusted colleagues | South China Morning Post:

Chinese Premier Li Keqiang will stay on as head of government for another term while President Xi Jinping’s name will be enshrined in the Communist Party’s charter alongside those of late leaders Mao Zedong and Deng Xiaoping, sources familiar with the situation told the South China Morning Post.

3. Xi Reshuffling PLA Leadership, Another Propaganda Documentary Airs

Xi Jinping clears decks for top-level changes to China’s military | South China Morning Post:

The ousting of General Fang Fenghui, former head of the CMC’s Joint Staff Department, and General Zhang Yang, former head of the commission’s Political Work Department, from the functional posts that gave them CMC membership is further proof that Xi, who also chairs the CMC, is cementing his control over the military...

Several scenarios are being discussed in military circles, including one version that would see the 11-member CMC trimmed to just the chairman and four vice-chairmen. Another would give the commanders of the five theatre commands CMC membership, along with two to four vice-chairman, but not include the chiefs of the land force, air force, navy, rocket force and strategic support force.

The current CMC comprises one chairman, two vice-chairmen, and eight regular members: the defence minister, the heads of the four former headquarters, and the commanders of the air force, navy and rocket force.

China airs documentary on building a strong army - Xinhua:

The eight-episode series, aired from Sept. 29, highlights how the Chinese army has stepped forward to solve problems and reshape its political ecology, organizational structure, system and work style, since the 18th National Congress of the Communist Party of China in 2012.

The documentary, Qiang Jun, which means building a strong army, was produced by the Political Work Department of the Central Military Commission and is being aired on both the state broadcaster China Central Television (CCTV) and local television stations.

Comment: This episode includes scenes of Guo Boxiong in court, pictures of Xu Caihou in detention in hospital clothes and a wheel chair, video and details of Gu Junshan case—《强军》 第五集 浴火_CCTV):

Xi Jinping tells Chinese defence firms to aim higher and catch up on weapons technology | South China Morning Post:

Documentary aired on state television reveals push to develop supercomputing, ballistic missile defence and satellite navigation systems

4. Trump Launches China Policy Review, Peter Navarro Demoted, Steve Bannon Targeting China

Comment: Hard to know how much to read into this report as I believe every President asks for a review of China policy.

White House conducting wide-ranging review of China policy - POLITICO:

A group of senior administration officials -- including trade adviser Peter Navarro, senior adviser Jared Kushner, then-chief strategist Steve Bannon and National Economic Council Director Gary Cohn -- brought the idea for the China policy review to President Donald Trump in June, and the president asked for a plan within 90 days, according to a person familiar with the issue.

Trump Playing Catch-up: White House Launches Comprehensive Review of China Policy-Breitbart:

In Bannon’s view, the question is not about whether to start an economic war with China – it’s about standing up and fighting in a war China started long ago. “It’s always about making the barbarians a tributary state. Our tribute to China is our technology – that’s what it takes to enter their market, and [they’ve taken] $3.5 trillion worth over the last 10 years. We have to give them the basic essence of American capitalism: our innovation,” he told Bloomberg Businessweek.

This raises an uncomfortable question about holistic China policy: it would necessarily involve making America much more capitalist and innovative than it currently is. Bannon wants to infect China with viral capitalism, but America has already contracted a very bad case of viral authoritarianism, one symptom of which is open admiration for the Chinese model from certain quarters.

Bannon’s Back and Targeting China - Bloomberg:

From Birmingham to Beijing, the former Trump strategist is leading a movement of
his own, now warning of “the forced technology transfer of American innovation to China”—and working with Henry Kissinger.

Comment: Working with Henry Kissinger, or Henry Kissinger is talking to him so he knows what Bannon is thinking and can tell Beijing and try to guide Bannon?

Kelly folds Navarro’s trade shop into National Economic Council - POLITICO:

The Office of Trade and Manufacturing Policy, which is run by Navarro, will now be housed within the NEC, four administration officials told POLITICO. That means Navarro will report to NEC Director Gary Cohn, with whom he has repeatedly clashed in recent months...

“I’m a chain of command guy and will follow Chief Kelly’s orders,” Navarro said in a statement to POLITICO. “The chief has assured me I will continue to have the same seat and voice at the president’s decision-making table.”

Taking Bets: Will Navarro last past January 1?

5. China's Internet Censorship Just Keeps Improving

Comment: It is not about the 19th Party Congress, it is the new normal for the Party, and frankly if you were a Chinese cyber czar watching what Russia did in the US last year would you have any doubts about your policies?

Shrinking Anonymity in Chinese Cyberspace - Lawfare - Samm Sacks & Paul Triolo:

The moves are much more than a clampdown in the run-up to the October Communist Party Congress, though the meeting adds urgency to their deployment. At their root, the measures are a fresh attempt, with the guidance of President Xi’s speeches, to yet again mobilize the bureaucracy to rein in the internet in China and to ensure that the Communist Party can monitor and control technological developments that allow individuals and groups to communicate outside established media channels.  Xi’s speech on July 26 (known by some as the “726” speech) stressed that the internet is a “double-edge sword” that can allow “hidden negative energy” to become the “biggest variable” impacting governance and social stability. This variable must be minimized, he suggested. Xi has cast the internet as the main battlefield in the domain of ideological struggles. Hence the need to ensure the “orderly” development of major platforms such as WeChat. This thinking is the backdrop for the release of the recent regulations, all within a legal framework undergirded by the far-reaching Cybersecurity Law that combines provisions on cybersecurity, digital/data economy (informatization), and media content into a single package in a way no other country has been willing or able to do. The law’s three areas of emphasis will be the focus of enforcement efforts in coming months.

Cyberspace regulator requires real-name registration for Chinese Internet users - Global Times:

Without registering their real identities in the background, previously registered users cannot post anything, including replies to posts, on Chinese platforms, said the circular released by the Cyberspace Administration of China on September 7.

Users, however, do not have to reveal their real identities on the frontstage of the platforms.

‘‘Such rules will apply to all websites, phone applications, interactive public platforms and any other communication platform that features public opinion on news or with the nature to mobilize the society,” stipulates the circular.

Tea and Tiananmen: Inside China's new censorship machine - Reuters:

Welcome to China’s new world of online censorship, where Orwell’s “Nineteen Eighty-Four” meets Silicon Valley start-up.

The young censors in the Tianjin office – or “auditors” – work for Beijing ByteDance Technology Co, better known as Toutiao, a popular and fast-growing news feed app.

Baidu Invites China's Cybercops to Label, Rebut Fake News - Bloomberg:

Baidu Inc. is building a system to allow China’s cybercops to spot and fix “online rumors” deemed a threat to stability, allowing police agencies to insert themselves directly into everything from its search results to discussion forums.

6. The Hudson Institute Postpones A "Conversation With Guo Wengui"

Comment: On September 22 The Hudson Institute sent out an invitation to attend an October 4 "conversation" with Guo Wengui and Bill Gertz. On October 3rd the Institute announced that the event had been postponed, but did not give a reason. Speculation has been rampant that the PRC pressured Hudson, the website went down under attack Wednesday evening, and Guo himself blamed PRC pressure and rescheduled his appearance to October 5 at the National Press Club.

Hudson seems an unlikely think tank to cave to PRC pressure, and it is still planning to host an event titled Liu Xiaobo’s Legacy and the Future of Chinese Democracy next week. This week the inaugural U.S.-China Law Enforcement and Cybersecurity Dialogue is happening in DC, so perhaps someone found it awkward to give Guo such a platform while Minister of Public Security Guo Shengkun was in town?

Chinese Fugitive Guo Wengui’s D.C. Event Postponed - WSJ:

Mr. Guo, who flew from his New York apartment to D.C. on Tuesday, said the Institute had told him around noon that the event was “poorly-timed” and had to be postponed. He said he suspected the Chinese government had put pressure on the Institute to cancel the event, but offered no proof...

The Institute told people who helped stage the event that its format and structure didn’t align with Hudson’s policy positions, according to a source familiar with the event.

By Bill Gertz, Guo's interviewer for the now postponed event--Think Tank Cancels Talk by Chinese Dissident Under Pressure from Beijing - Washington Free Beacon:

David Tell, chief spokesman for Hudson, said the event was put off because of improper planning. "The planning just got away from us and we feel bad," he told the Washington Free Beacon.

Tell acknowledged the institute has been under pressure from China...

Tell insisted, however, "we don't give a rat's ass what Beijing thinks." Hudson has hosted several recent events on China, including a conference on Chinese encroachment in the South China Sea, he noted.

Policy Centers - Kleptocracy Initiative - Hudson Institute:

Hudson’s Kleptocracy Initiative (KI) examines the growing threat posed to Western democracies by autocratic regimes.

7. Xi Reminding Everyone He Is A Marxist

Xi calls for profound understanding of Marxism - Xinhua:

Xi made the remarks Friday afternoon at a group study session attended by members of the Political Bureau of the CPC Central Committee.

He said that Marxism has shown great strength and vitality as a truth, and still serves an irreplaceable role in helping people understanding and transforming the world, as well as promoting social progress.

Xi stressed that though times are changing and society is developing, the basic tenets of Marxism remain true.

习近平:深刻认识马克思主义时代意义和现实意义 继续推进马克思主义中国化时代化大众化 

Xi Jinping tells Communist Party to keep innovating and contributing to Marxism | South China Morning Post:

Speaking to dozens of party leaders at a study session on Friday, Xi said the country should make original contributions to Marxist theories based on its history and experience.

8. A Successful And Powerful Marxist Should Very Good About China's Expanding Strategic Opportunities In An Unsettled World

Comment: The Communist Party likes to talk about its “period of strategic opportunity”. Contrary to the punditry that China is on the verge of some kind of economic and/or political collapse, China’s period of strategic opportunity seems to only be expanding and extending, thanks in large part to political turmoil in the West.

The Chinese World Order | by Andrew J. Nathan | The New York Review of Books:

Ten years ago the journalist James Mann published a book called The China Fantasy, in which he criticized American policymakers for using something he called “the Soothing Scenario” to justify the policy of diplomatic and economic engagement with China. According to this view, China’s exposure to the benefits of globalization would lead the country to embrace democratic institutions and support the American-led world order. Instead, Mann predicted, China would remain an authoritarian country, and its success would encourage other authoritarian regimes to resist pressures to change.

Mann’s prediction turned out to be true.

Comment: Longtime Sinocism readers will remember my first 2011 post ( James Mann And His Prescient Book “The China Fantasy” ) on Jim Mann's prescience:

Remember, Mann wrote this before the 2008 crash and the near bankruptcy of most major developed economies. China’s relative rise has occurred much faster than even Mann expected.

James Mann deserve a lot more credit than he has gotten for this work, and given the current state of affairs I hope he and his publisher are working on a new edition. The world needs to understand and prepare for the political, security, and economic ramifications of the third scenario.

Business, Economy And Trade

China steps up battle against runaway property prices - FT $$ Chinese banking regulators have told lenders to crack down on the use of consumer loans to finance home purchases, the latest effort to cool down the overheated property market and rein in financial risk.

Hainan Island Rolls Out the ‘Not Welcome’ Mat to Vacation-Home Buyers - Caixin Global This restriction applies to hotel-style condominiums, but does not include housing for low-income families or owner-occupied commercial and collectively-owned developments marketed to Hainan residents. The Hainan government also published a document Friday announcing a “permanent end” to new property developments targeting non-Hainan residents in one of the subtropical island’s cities and three of its counties. The four areas, which have now been designated Hainan’s “Central Ecological Core Areas,” are the city of Wuzhishan, and the counties of Baoting, Qiongzhong and Baisha.

One Ford, two systems - U.S. carmaker revamps China strategy amid EV push - Reuters: U.S. automaker Ford Motor Co (F.N) is overhauling its China plans as its global “One Ford” strategy is holding it back in the world’s biggest auto market, two high-ranking company insiders told Reuters. The review of its China operations, part of a broader strategy re-think under new CEO Jim Hackett, will likely see Ford focus on electric commercial vans, which China is encouraging in its polluted and congested city centers, as well as electric cars.

China, With Methodical Discipline, Conjures a Market for Electric Cars - WSJ The government is funding its own manufacturers, luring domestic buyers with subsidies and building a vast charging-station network—while strong-arming its consumers by making sure buying an electric car is the only sure way to get license plates in crowded cities..

China’s overseas acquirers export capital and leave a ‘black eye’ for others investing abroad | South China Morning Post The hotel [Waldorf Astoria] has been closed for renovation for more than half a year since March 1, but work has yet to start with the US$1 billion renovation bill left hanging after Anbang’s once high-flying chairman Wu Xiaohui was taken away by Chinese authorities for investigation in early June. While bankers said Beijing had ordered Anbang to sell the hotel in late July, no white knight has emerged so far.

China reiterates prudent, neutral monetary policy - Xinhua In a statement issued after a quarterly meeting, the People's Bank of China (PBOC) said it will continue "seeking progress while maintaining stability", a tone set for the country's economic work at the Central Economic Work Conference, and adapting to an economic "new normal" that feature slower but higher quality growth.

China Tries to Steer Loans to Small Businesses - New York Times The central bank said it would cut the ratio only for banks that meet minimums for lending to small businesses or other borrowers that it called “inclusive finance.” The new category encompasses loans typically of less than 5 million yuan, or about $750,000, that are issued to small businesses, small family companies, farmers, students and poverty alleviation programs

The IMF’s China Problem | Council on Foreign Relations In other words China saves so much—about 45 percent of its GDP—that it runs a sizeable trade surplus even with what would otherwise be considered wildly irresponsible domestic policies That’s a problem for the IMF. The policies that the IMF—and many others—generally recommend for China are broadly speaking the policies that would typically be recommended to a country with a large external deficit: tighter credit, a smaller fiscal deficit, and the like

China to Take Flexible Approach to SOE Reform - Caixin Global Policymakers will be flexible in implementing mixed-ownership reform and will assess investment on a case-by-case basis, said Peng Huagang, a senior official at the agency that oversees the 98 SOEs owned by the central government. The level of private involvement will depend on the circumstances of the enterprise and on interest from investors, said Peng, deputy secretary-general and spokesman of the State-owned Assets Supervision and Administration Commission (SASAC), at a news conference on Thursday.

Communist party asserts control over China Inc - FT $$ In the past week, the party has moved to define its role in business. A government statement laid out Beijing’s definition of “entrepreneurship”, saying it involves patriotism and professionalism, followed by observing discipline, obeying laws, innovation and serving society. Profits did not feature, although the statement did reassure entrepreneurs that their property would be protected.

China State News Calls for 'Iron Fist' Regulation of Bitcoin Exchanges - CoinDesk Heavily critical of cryptocurrency exchanges, Xinhua said they had become a favourite among criminals across the world in an article today. Exchanges, it continued, are known to have "concocted pyramid schemes" and "engaged in illegal activities" – criminal activity "disguised as scientific and technological innovation." 新华时评:对虚拟货币隐匿犯罪“零容忍

U.S. business groups say WTO unable to curb many Chinese trade practices - Reuters U.S. companies face increasing threats from Chinese investment rules, industrial policies, subsidies to state-owned enterprises, excess manufacturing capacity, cybersecurity regulations and forced technology transfers, the groups told a public hearing held by the U.S. Trade Representative’s office. The session will influence an annual report on China’s WTO compliance by the U.S. Trade Representative’s office as well as a USTR investigation into China’s intellectual property practices that could lead to imposition of trade sanctions by President Donald Trump.

China’s Oil Demand Is Far Ahead Of Last Year’s Pace | The numbers from China are interesting given the constant refrain of weakening Chinese demand. This seems to be wishful thinking based on China’s investments in clean technology.

Politics And Law

中共十九大代表全部选出 共2287名(附名单)_政经频道_财新网 Comment: full list of the 2287 delegates to the 19th Party Congress. Surprising that Xi advisors like Fang Xinghai not on the list?

七集政论专题片《不忘初心 继续前进》即将播出_中南海_澎湃新闻-The Paper Comment: A new political propaganda documentary about to air, perhaps wil be a good tell on Xi theory...

China Focus: How Chinese leaders are elected to Party congress - Xinhua Party and state leaders did not participate in elections in places such as their native homes or where they have worked, except for that they hold concurrent posts as Party secretaries of electoral units. Leaders from ethnic minority regions can participate in autonomous regions, according to the Organization Department of the CPC Central Committee. The fact that Party and state leaders, especially members of the Standing Committee of the Political Bureau of the CPC Central Committee, participate in elections in underdeveloped provinces and regions densely populated by ethnic minorities sets an example in the implementation of the Party and state's major development strategies, said Professor Zhu Lingjun with CPC Central Committee Party School.

Staff called back to work as Xinjiang scraps week-long National Day holiday | South China Morning Post Civil servants, workers at state enterprises, teachers and some students have to cancel plans due to last-minute order ‘to prepare’ for party congress.  //  Comment: Xinjiang Party chief Chen Quanguo does not want his promotion prospects damaged by a major incident before the 19th Party Congress, makes perfect sense he wants all hands on deck to keep things under control.

Form and Function of the Chinese Communist Party | Peter Mattis Whenever analysts and investigators draw attention to the CCP's efforts to influence perceptions and shape the world outside the party, the party's defenders (or those implicated) accuse them of four things: being racist; having ulterior motives; not understanding China; and misjudging and/or misunderstanding the CCP. The organizational chart above helps address the last two accusations. The CCP remains a revolutionary party with a basic structure that has persisted for almost 70 years. Security. Propaganda. United Front. Party management. These are the core departments through which a strong leader like Deng Xiaoping or Xi Jinping demonstrates power.

Hong Kong-based anti-Communist magazines Cheng Ming and The Trend cease publication after 40 years | Hong Kong Free Press HKFP Hong Kong-based anti-Communist magazine Cheng Ming has announced that it will cease publication after 40 years in print. Its sister magazine The Trend will also disappear from the shelves. Local media claim it is related to the death of their founder of old age.

Chinese Police Detain Journalist Who Wrote About Missing Wuhan Students - RFA The 39-year-old journalist, identified only by his surname Wang, has been detained on suspicion of "faking the facts and spreading rumors" after he wrote an article titled "32 Students Mysteriously Disappear in Wuhan," featuring interviews with their family members, the Beijing Youth Daily newspaper reported.

Language Log » Mao Zedong's "three jewels" On the eve of the establishment of the PRC, Chairman Mao referred to united front (tǒngyī zhànxiàn 統一戰線) work as one of the Party’s “three great fabao” (sān gè dà fǎbǎo 三个大法宝).  So what is a fabao, what did Mao mean by that expression, and where did he get it?

明鏡之聲(2017年10月3日第七次播音) - YouTube Comment: Mingjing suggests that Sun Zhengcai's downfall means trouble ahead for Wen Jiabao and his family, something I have been hearing as well

14 Chinese nationals arrested after large illegal marijuana grow found in Garfield County | FOX31 Denver The sheriff’s office said 14 Chinese nationals — 12 men and two women — were arrested and detained at the Garfield County Jail, accused of growing about 3,000 marijuana plants. The sheriff’s office said some of those arrested are believed to be in the country illegally and another half-dozen people fled the scene on foot when the raid started and have not been caught.

Probes continue into mysterious marijuana grows in Yuba County | Though the three busts have been at different locations throughout Yuba County, or just outside it in Butte and Sacramento counties, there has been a pattern with the individuals arrested — they were all born in China. Leslie Carbah, spokesperson for the sheriff's office, said some of the individuals are citizens and some are in the country with Chinese passports.

Yolo County seizes $5 million worth of marijuana | The Sacramento Bee Deputies arrested Guangyang Bao, 60, of Sacramento; Jian Fang, 54, of Sacramento; Sinh Lieu, 52, of Sacramento; Bobby Lieu, 55, of Sacramento; and Paofu Chen, 34, of Queens, New York.

Foreign And Defense Affairs

Abe tries hand at charming China, calls for Xi's visit to Japan:The Asahi Shimbun Prime Minister Shinzo Abe started a new diplomatic offensive to China by attending an annual Chinese political event in Tokyo on Sept. 28, the day of the Lower House dissolution, and inviting Chinese President Xi Jinping to visit Japan in 2018.

Research claims CCLeaner attack carried out by Chinese-linked group - Cyberscopp New research published Monday by Israeli cybersecurity startup Intezer Labs, authored by senior security researcher Jay Rosenberg, adds support to the conclusion that Chinese hackers tried to gain access to a small number of multinational telecommunications and technology companies. // Comment: As China cyber John Costello wrote on Twitter: "Targeting supply chains and services is a key step for PRC Intel to "collect the stack" and build capacity. Comms and data tech companies have are key to operationalizing the OPM data."

US spy planes kept eye on Chinese scientists during research expedition near Guam | South China Morning Post The Kexue oceanographic ship had regular low flyovers from US Navy P3-Orion surveillance aircraft while investigating a seamount southeast of Guam

CEFC's Rosneft deal driven by national strategy: chairman - Reuters CEFC China Energy’s $9.1 billion purchase of a stake in Russia’s Rosneft Oil ROSM.NN was mainly driven by China’s Belt and Road Initiative and has strong support from the government, Ye Jianming, the company’s founder said. Ye posted his thoughts on Monday in a message to CEFC employees on the company’s Wechat account to explain how the privately-owned company secured the deal with Rosneft instead of China’s state-owned oil majors.

Conflict with China Revisited: Prospects, Consequences, and Strategies for Deterrence | RAND The United States Will Likely Find Itself Forced to Shift From Deterrence by Denial, Based on Direct Defense of Its Interests and Allies in the Western Pacific, to Deterrence by Punishment, Based on the Threat of Escalation

China puts more boots at Doklam - The Hindu According to sources in the Indian security establishment, the Chinese have 1,500 to 1,700 troops of the People’s Liberation Army (PLA) stationed a few hundred metres afrom the standoff site on their side.

U.S.-China Law Enforcement and Cybersecurity Dialogue - US Department of State Deputy Secretary of State John Sullivan will host the dialogue, co-chaired by Attorney General Jeff Sessions and Acting Secretary of Homeland Security Elaine Duke on the U.S. side, and State Councilor and Minister of Public Security Guo Shengkun on the Chinese side. The Dialogue will address important areas of the U.S.-China relationship with frank discussions on immigration, fugitives, counter-narcotics, counterterrorism, and cybersecurity.

China’s Mekong Plans Threaten Disaster for Countries Downstream | Foreign Policy: In meetings with the other Mekong states — Myanmar, Thailand, Laos, Cambodia, and Vietnam — China talks about a “community of shared future.” But as China’s economy and its ambitions have both expanded, so have its goals for the Mekong. Beijing has expanded its control of the waters by building new hydroelectric dams and by what some experts call hydrodiplomacy, creating and financing a new governing body on the river that rivals a former Western-supported group. For critics, control of the waterway is a key move in China’s attempt to establish itself as a regional hegemon; for locals by the river, it’s also a potential environmental and economic disaster. China’s latest move has been to press downstream countries for what’s euphemistically called “navigation channel improvement,” which means allowing its engineers to dynamite rocks and small islands in the Mekong so that bigger ships can make the journey all the way from Yunnan to Luang Prabang and, eventually, to the South China Sea.

Tech And Media

Silicon Valley, Ignore China at Your Peril — The Information He speculated that there is some “fatalism” among U.S. tech leaders when comes to trying to break into the China market. He added: “They think “If we go there, we will be blocked and shut down… these guys are so aggressive. Let’s stay in Palo Alto.” I feel that apathy, too, and think it’s only grown since Uber quit China and sold its business there to Didi. While Chinese tech professionals are still very interested in Uber—they still see it as a Silicon Valley superstar—people in Silicon Valley rarely ask me about Didi, which is expanding steadily around the world.

Partner Yue Ji Shares Sequoia China’s Framework for Investing in AI Companies: “With Over 30 Investments Made, We’ve Determined Two Primary Criteria”(PE daily) Sequoia China recently released an article featuring an interview with their Partner Yue Ji on his framework for thinking about AI investments and how he's applied it to Sequoia's current portfolio. It covers AI's application in a number of industries, why Sequoia focuses its AI investments on clear use cases, the current AI talent gap, and the winner-take-all nature of the technology

Hollywood Finds Chinese Cinemas Fudging Box-Office Figures - WSJ Auditors at PricewaterhouseCoopers LLP working on behalf of the MPAA concluded that ticket sales in China were underreported by about 9% last year, one of the people said. That translates into at least $40 million in lost revenue for the six Hollywood studios that make up the MPAA

How China’s Capital Clampdown Torpedoed a Billionaire’s Oscar Dream - WSJ Wanda sent representatives to Los Angeles last month for meetings with studios to assure them that Wanda is still in the game. But executives privately wonder if the conglomerate will be allowed to resume its Hollywood pursuits with the same gusto it displayed before the government crackdown. Mr. Wang will, however, retain a certain proximity to Oscars. In 2013, Wanda donated $20 million to the Academy’s new film museum—enough to give the company naming rights in the museum’s film-history section.

Time to Turn Off Your TVs, China’s Tuning In to Online MCs - WSJ Mr. Zhou, who goes by the stage name GAI, is a phenom from China’s most popular entertainment program in 2017: “The Rap of China,” a 12-episode hip-hop reality series that shows the power of online entertainment and its younger audience. The show, created and shown by online video site iQiyi, attracted 2.7 billion views during its run from late June to early September. Short videos pulled from the content were watched eight billion times on social-media platform Weibo, according to iQiyi.

Society, Art, Sports, Culture And History

What art are China's young super-rich buying? - CNN Style China's so-called fuerdai (literally "second generation rich") are regularly criticized in the media for their flashy spending. And with many young collectors at least partly funded by family money, they seem eager to prove that they're interested in art as more than just a status symbol. Auction houses are changing tack to cater to them. Sotheby's, Christie's and Hong Kong's Poly Auction all offer private sales that allow for discreet transactions. In the first half of 2017, Sotheby's reported a significant rise in revenue from private sales -- particularly in Asia.

Energy, Environment, Science And Health

Beijing and Vienna have a quantum conversation - A quantum cryptography key has been shared between Beijing and Vienna using a satellite – allowing the presidents of the Chinese Academy of Sciences and Austrian Academy of Sciences to communicate via a secure video link. The call was made earlier today using China's Micius quantum-communications satellite, which was launched in 2016 and orbits about 500 km above Earth.

China plans national parks network by 2020 to fend off environmental threats | South China Morning Post The parks will come under a unified management system designed to protect areas of outstanding natural beauty in China, according to a government plan released on Tuesday and reported by Xinhua

Full Text: Development of China's Public Health - The State Council Information Office of the People's Republic of China published a white paper titled "Development of China's Public Health as an Essential Element of Human Rights" on Sept. 29.

China’s Coal Hub Bans Coal - Caixin Global Taiyuan, the capital of China’s coal production hub, has banned sales, transport and use of coal by most plants to try to reduce serious air pollution. The city in northern Shanxi province contributed 24.3% of last year’s coal output nationwide last year. The ban went into effect on Sunday, the state-run Xinhua News Agency reported... The ban will apply to all individuals and companies excluding several state-owned steel and power plants.

Food And Travel

Travel boom: China to spend $90 billion over the coming National Day, Mid-Autumn Festival holidays - Global Times 710 million trips


Rising High Above Beijing, a Security Puzzle - WSJ Government officials have halted work on the planned observation deck on China Zun Tower’s 106th floor because of concerns that visitors would be able to see into the compound where Communist Party leaders live and work, according to the people involved.

Jobs And Events

Job listing: Foreign correspondent THE ECONOMIST is looking for a journalist with a good knowledge of China and of standard Chinese, and who is keen to be posted in Beijing or elsewhere outside the UK, to help with our coverage of foreign affairs.

Wednesday, September 27, 2017

Entrepreneurship With CCP Characteristics; New 20 Year Plan For Beijing; Speculators Love Supply-side Structural Reform-Sinocism-09.27.17

Happy Wednesday…A bit under the weather here in DC, pardon any typos. If you are in Beijing have fun with the evening rush hour over the next few days. The city is warning that they will be epic…

The Essential Eight

1. Entrepreneurship With CCP Characteristics

Comment: This new guideline on encouraging entrepreneurial spirit and creating a favorable environment for entrepreneurship seems quite significant, though I am wary of getting too excited that this somehow will mark the start of a capitalist blossoming. The last two sections of the circular emphasize the importance of Party leadership over SOEs and Party construction and Party education in private enterprises. Remember, all reforms under Xi Jinping are in the service of strengthening Communist Party control to help it lead China to its Great Rejuvenation.

China Says Entrepreneurs Must Put Patriotism Over Profit - Bloomberg

China said patriotism must be the highest priority in entrepreneurship, officially defining for the first time what the concept should mean for the world’s second-biggest economy.

Patriotism and professionalism are the first “core” components of entrepreneurship, followed by “innovation and the pursuit of greatness” and “social responsibility,” the Communist Party’s Central Committee and the State Council said in a joint statement late Monday. They called for stronger party leadership over entrepreneurs and guiding them to endorse party leaders.

Beijing tries to win over entrepreneurs with praise and promises | South China Morning Post:

The Communist Party on Monday said it will support and protect entrepreneurs in the first such directive to safeguard China’s private business owners since it took power in 1949.

China moves to encourage entrepreneurial spirit - Xinhua

The guideline, the first of its kind focused on entrepreneurial spirit, was released by the Communist Party of China Central Committee and the State Council in a move to spur market vitality.

中共中央 国务院 关于营造企业家健康成长环境弘扬优秀企业家精神更好发挥企业家作用的意见


2. Beijing's New 20 Year Plan Another Step In Xi’s Vision Of Remolding Beijing

Comment: The new 20 year plan for Beijing reflects Xi’s desire to clean up Beijing, implement the integrated development of Beijing, Tianjin and Hebei (aka JingJinJi or the Three Js), and create a “sub-Capital” in Xiongan. It is another reminder that Beijing is special, Beijing is for Beijingers, and Xi’s vision may have some overlap with imperial capitals in dynasties past.

China sets population, construction limits in Beijing city planning - Xinhua:

By 2020, the size of resident population in Beijing should be controlled to within 23 million and kept at this level thereafter, according to a city planning document for Beijing issued by China's central authorities.** **

Moreover, construction land in the city should be reduced to about 2,860 square km by 2020 and to 2,760 square km by 2035, the document said.

The Communist Party of China (CPC) Central Committee and the State Council has approved the general city plan for Beijing during the period between 2016 and 2035, submitted by the CPC Beijing Municipal Committee and Beijing municipal government.

Xinhua-中共中央 国务院关于对《北京城市总体规划(2016年-2035年)》的批复 

3. Beijing Going Into Lockdown For The Party Congress

Comment: No surprise, especially since Xi helicoptered longtime ally Cai Qi into the Beijing Party Secretary job. If you are an expat in Beijing during this period do not screw around, the official sense of humor will be even less present than it is currently…

Beijing party boss promises to eradicate online political rumours ahead of key Communist congress | South China Morning Post

Speaking at a preparation meeting on Tuesday, Beijing’s party secretary Cai Qi called on local officials to ensure security and stability in the capital, where the party congress will open on October 18.

“We need to strengthen social controls, eliminating all kinds of unstable elements,” the official Beijing Daily quoted him as saying.

“We need to strengthen cyber security defence, firmly cracking down on various political rumours and harmful information.”


4. Preparations For Trump’s Beijing Visit

Comment: Commerce Secretary Wilbur Ross has finished his trip to Beijing to negotiate trade deals ahead of the November visit. Secretary of State Tillerson is going to Beijing September 28. North Korea will be at the top of Tillerson’s agenda. Normally the US would send the National Security Advisor to Beijing ahead of a presidential visit. Will McMaster go between now and the visit?

Secretary of State Tillerson To Travel to Beijing:

September 28 – October 1 to meet with senior Chinese leaders. Secretary Tillerson will discuss a range of issues, including the President’s planned travel to the region, the denuclearization of the Korean Peninsula, and trade and investment. Secretary Tillerson’s visit to China reaffirms the Administration’s commitment to further broaden and enhance U.S. economic and security interests in the Asia-Pacific region

Wilbur Ross, Fresh From China Visit, Warns of ‘Lopsided’ Trade Relationship - The New York Times:

“We can understand that they would desire self-sufficiency and if the way they get there is through a free and open level playing field, and it’s a fair match, we’re fine with that,” Mr. Ross said on Wednesday. But, he added, the Trump administration would object to American companies’ being forced to transfer technological know-how in exchange for market access...

He also struck a cautious note in ending his meeting with reporters on Wednesday. “I don’t want to give the impression that we made any concessions on the trip,” he said. “We did not, nor did the Chinese side.”

US Commerce Secretary Ross highlights three main barriers to better trade links with China | South China Morning Post:

Ross met Chinese Premier Li Keqiang, Vice Premier Wang Yang and Liu He, a key financial and economic adviser to President Xi Jinping, during his visit.

5. US Imposes More Sanctions On North Korea As China’s “Freeze-For-Freeze” Proposal Is Going Nowhere

Comment: As The US ratchets up the pressure is there an offramp for North Korea? Does Kim even want one, before he has demonstrated he has the nuclear-tipped ICBMs that can hot major US cities?

Watch For: Another nuclear test or missile launch around China’s October 1 National Day. Kim seems to like using important PRC occasions to tell Xi he is unhappy with Beijing’s lack of support….

North Korea taps GOP analysts to better understand Trump and his messages - The Washington Post:

But others familiar with the talks said the North Koreans completely ruled out the “freeze-for-freeze” idea being promoted by China and Russia, in which Pyongyang would freeze its nuclear and missile activities if the United States stopped conducting military exercises in South Korea. The United States, Japan and South Korea also outright reject the idea.

Treasury Sanctions Banks and Representatives Linked to North Korean Financial Networks:

“We are targeting North Korean banks and financial facilitators acting as representatives for North Korean banks across the globe,” said Treasury Secretary Steven T. Mnuchin.  “This further advances our strategy to fully isolate North Korea in order to achieve our broader objectives of a peaceful and denuclearized Korean peninsula.  This action is also consistent with UN Security Council Resolutions.”

China’s Food Exports to North Korea Surge - WSJ United Nations sanctions on North Korea have expanded significantly in recent weeks and now include banning Pyongyang from exporting iron, lead and seafood. However, there are no restrictions on food imports to the country.

Before U.N. Deadline, China Again Buys North Korean Coal - WSJ:

The latest coal shipments preceded a Sept. 5 deadline for U.N. members to implement the August sanctions. Beijing said on Aug. 14 it would comply with those sanctions while continuing to process imports of banned goods until the deadline if those shipments had already reached Chinese territory.

Go Deeper:

There’s One North Korea Taboo China’s Leaders Won’t Talk About - Bloomberg:

In discussions between the U.S. and China about reining in North Korea, one topic remains taboo: What would happen if Kim Jong Un’s regime collapses?

Gen. Dunford: China to be US' 'greatest threat' by 2025 - CNN "I think China probably poses the greatest threat to our nation by about 2025," Dunford told the Senate Armed Services Committee during a hearing on his re-appointment as Chairman of the Joint Chiefs of Staff.

Trump: military option for North Korea not preferred, but would be 'devastating' - Reuters

6. Speculators Seem To Love Supply-side Structural Reform

Comment: You have to feel a bit for Beijing. Speculators always seem a step ahead, and short of banning buying and selling the government always seems to be engaging in a mostly futile game of whack-a-mole. What sector/commodity/fad is next?

Aluminum Prices Surge as China Imposes Curbs - Caixin Global:

“The current market boom is not being caused by (changes in) the relationship between supply and demand,” Wang Qiang, an industry insider close to policymakers, told Caixin. “It’s being caused by speculation funded by borrowed money.”

The trigger for the rally appears to have been media reports in early August that China Hongqiao Group, the world’s biggest aluminum producer, had shuttered five unauthorized plants with combined capacity of 2.68 million tons on the orders of the Shandong provincial government...

“This year has been different — we have had to follow the (government’s) orders to shut down (unauthorized plants),” an executive with Xinfa Group told Caixin. “There is no room for bargaining and we must carry out the instructions 100%. Both the municipal and the provincial governments have imposed tough requirements.”

China to cancel a third of iron ore mining rights in fight against smog - Reuters:

Over 1,000 mining rights will be eliminated under China’s campaign against pollution, Lei Pingxi, chief engineer at the Metallurgical Mines’ Association of China, told an industry conference.

“Some small miners who didn’t pay attention to environmental issues simply closed down temporarily to cope with inspections,” said Lei.

Chinese cities order steel output cuts earlier than expected to fend off smog | South China Morning Post:

At a meeting on Tuesday, Handan city authorities told local steel mills to cut blast furnace production by 50 per cent from October 1 until March, industry consultancy Mysteel reported without citing sources.

Companies in the downstream sector fabricating steel will also face restrictions, the report said, although no details were given.

7. Xi Likes Socialist Art And Literature, Wants More Of It To Help Espouse Core Socialist Values

Comment: The Communist Party has spent most of Xi’s first term trying to clean and purify the Party ranks, an intense effort whose longevity and efficacy have far exceeded the expectations of most observers. How seriously should we take the Party’s efforts to purify society with Core Socialist Values?

Xi calls for writers, artists to focus on the people - Xinhua:

Xi, also general secretary of the Communist Party of China (CPC) Central Committee, made the remarks in an instruction on cultural and ideological progress.

Those working in literary and art fields should record the work of the people and spread the power of positivity in their works, Xi said.

The works should also promote the Chinese spirits, strengthen the people's faith, and provide strong spiritual power for reaching China's two centenary goals and realizing the Chinese dream of national rejuvenation, according to Xi.

Wednesday CCTV Evening News on XI's instructions, made to a commendation symposium on cultural and ideological progress.-习近平就精神文明建设“五个一工程”作出重要指示强调 坚持以人民为中心创作导向 坚定人民信心振奋人民精神

8. Taiwan’s New Premier Says Taiwan Is An Independent Country

Comment: How will Beijing punish Taiwan this time? And has Trump, in pursuit of deals with Xi, truly given up playing the Taiwan card?

Taiwan’s new premier risks Beijing’s wrath after affirming support for island’s independence | South China Morning Post:

He is the first Taiwanese premier to openly acknowledge his pro-independence status.

China says Taiwan not a country, Taiwan says China needs reality check - Reuters:

Speaking in parliament on Tuesday, newly appointed Taiwan Premier William Lai said he was a “political worker who advocates Taiwan independence”, but that it already was an independent country called the Republic of China and so had no need to declare independence.

Mainland opposes 'Taiwan independence' in any form: spokesperson - Xinhua:

Ma Xiaoguang, the spokesperson for the State Council's Taiwan Affairs Office, made the remarks in response to comments by the island's executive head Lai Ching-te, who said that Taiwan is "an independent sovereign country."

"People who split China will suffer by their own hand," said Ma.

Business, Economy And Trade

U.S. asks China not to enforce cyber security law-Reuters The United States has asked China not to implement its new cyber security law over concerns it could damage global trade in services, a U.S. document published by the World Trade Organisation showed on Tuesday.

Beijing cuts red tape for foreign firms as it vies for investors | South China Morning Post The Ministry of Commerce on Tuesday said it had done away with a regulation from 1995 that required foreign companies to set up a representative office before they could operate in China, a process that involved months of complicated paperwork and formalities. At a symposium the same day, Vice-Premier Wang Yang warned of new challenges ahead to make better use of foreign direct investment as the economy entered a “new normal” period, with its traditional low-cost advantage disappearing and slower domestic growth.

As China’s Economy Slows, ‘Business Cults’ Prey on Young Job Seekers - The New York Times Some look like high-tech firms, promising young college graduates a fast track to riches. Others pose as charitable groups on a membership drive, or companies building a sales network for a new product. Tens of millions across China are signing up — and learning that all is not as advertised. Behind these groups is a looming challenge for the ruling Communist Party: A proliferation of pyramid schemes that have attracted enormous followings and huge sums of money, exploiting — and exacerbating — widespread anxiety over a slowing economy.

After spate of suicides, China targets predatory student lending - Reuters A second-year university student, he had racked up debt of nearly 590,000 yuan ($85,700) after taking personal loans from a dozen online finance companies to pay for his gambling habit. Such tales of indebted students being driven to suicide have become commonplace in Chinese media and social networks in recent years, sparking public outrage.

Chinese bitcoin exchange BTCChina stops accepting deposits - Reuters The company said in a statement on its website that the halt on deposits would take effect at 0400 GMT. It also repeated that it would shut down its exchange businesses on Sept. 30, an announcement that it first made two weeks ago, and will also halt yuan and digital asset withdrawals at 0400 GMT on Oct. 31.

Chinese toilet seats take the Western market by storm - People's Daily Online Creative made-in-China toilet seats have been a chic in the European market, with annual sales of over two million sets. Those exported to Germany and Switzerland account for 80 percent of the total export volume.

Early China Data Hint at Slowing Momentum Amid Factory Clampdown - Bloomberg A gauge of activity at small companies edged down and an index of sales-manager sentiment weakened. The outlook was brighter elsewhere as a private steel-industry gauge jumped to a 12-month high amid price gains spurred by government curbs on output, and satellite images of manufacturing facilities showed activity was the strongest in six months. International investor confidence in the Chinese outlook improved in September.

Moutai Tells Subsidiaries: Everything in Moderation - Caixin Global In an attempt to limit the “abuse” of its renowned brand by subsidiaries, China’s top liquor maker is slimming down its total number of brands, to 59 from 214. The company hopes that this reduction will prevent its franchisees and subsidiaries from passing off substandard quality liquor under its brand name, and from overusing the Moutai label in promotional activities.

Faraday Future Returns Incentive Money to Nevada for Scrapped Las Vegas Plant - Caixin Global Faraday Future has written the state of Nevada a check for $16,200, as well as forfeited about $620,000 in tax incentives, the Nevada governor’s Office of Economic Development told Caixin. Staff at the governor’s office said the Faraday plant was no longer a “qualified project” and thus no longer eligible for the tax and land incentive package it received from Nevada. Faraday still owns the land it purchased for the plant.

After Fall of Chief Regulator, What’s Next for Chinese Insurers? - Caixin Global Now that Xiang is gone and the regulator has tightened its grip on the industry, some industry watchers believe the clean-up is far from over. “Was Xiang Junbo the only one who was bought off at the CIRC?” one of them asked.

China Industrial Profits Jump 24% in Biggest Gain Since 2013 - Bloomberg Industrial profits increased 24 percent in August from a year earlier, the most in four years, compared with the 16.5 percent pace a month earlier, the statistics bureau said Wednesday. Profits in the first eight months of the year climbed 21.6 percent from a year earlier, with statistics officials attributing the jump to faster producer-price inflation and lower costs.

China Is Mastering the Economic 'Difficult Dive': Bridgewater - Bloomberg China so far has deftly navigated the challenge of maintaining economic growth while cleaning up its financial sector, according to Bob Prince, co-chief investment officer of the world’s largest hedge fund firm Bridgewater Associates.

Chinese bid for mapping company falls at US hurdle - FT $$ The Committee on Foreign Investment in the US weighed in on the deal, which received the green light from German regulators in January, due to Here’s assets in Chicago. Cfius made NavInfo and its fellow investors go through multiple hoops, but did not ultimately approve the deal.

Politics And Law

[视频]王岐山会见柬埔寨副首相_CCTV节目官网-CCTV-1_央视网( Tuesday CCTV Evening News on Wang Qishan meeting Cambodia vice prime minister. Wang taking a lot of meetings...

CPC discipline chief meets Cambodian deputy PM - Xinhua Men Sam An, also member of the Standing Committee of Cambodian People's Party, appreciated the achievements China has made in the socialist cause and in party building. She expects to cement cooperation with China in discipline inspection and supervision, and develop Cambodia-China friendship.

孙政才被点名:政治问题和经济问题交织的腐败分子 第十展区“全面从严治党 确保党始终成为伟大事业的坚强领导核心”的一则图说提及,中央严肃查处周永康、薄熙来、郭伯雄、徐才厚、孙政才、令计划严重违纪案件,惩治政治问题和经济问题交织的腐败分子,消除重大政治隐患。

Foreign And Defense Affairs

U.S.-China Social and Cultural Dialogue Secretary of State Rex Tillerson has invited Secretary of Transportation Elaine Chao and Secretary of Education Betsy DeVos to join Chinese Vice Premier Liu Yandong, along with members of the U.S. and Chinese delegations, to participate in the SCD. The SCD’s public diplomacy event, which highlights people-to-people youth exchanges between the United States and China, will be held at The George Washington University.

China powers up new radar tech to unmask stealth fighters | South China Morning Post China North Industries Group Corporation tested a device capable of generating terahertz radiation with unprecedented power at a military research facility in Chengdu, Sichuan province, last week, Science and Technology Daily reported on Monday.

海军高层再调整 “政事儿News”(微信ID:zsenews)注意到,这是刘训言首次以海军副政委身份在公开报道中亮相。 //  Comment: Liu Xunyan is the new vice-commissar of the PLAN

Tech And Media

China Says WhatsApp Should Stop Spread of ‘Illegal Information’ - Bloomberg WhatsApp should take proactive measures to intercept information to do with violence and terror, the Cyberspace Administration of China said in a statement in response to questions from Bloomberg News. China has the authority to tell institutions to take these measures, said the agency, without specifying details of content it considered illegal.

China's Weibo Looks to Reward Citizen Censors With iPhones, Tablets - The New York Times The platform posted a statement on Wednesday saying it was looking for an initial 1,000 "Weibo supervisors" as part of a programme overseen by the Beijing arm of the Cyberspace Administration of China (CAC), the country's top Internet watchdog.

Xiaomi Grabbed the Long Tail in Quest for Revival — The Information $$ “High profits and high fundraising drove a lot of aggressive competition. Once they rushed in, the economics got destroyed,” said Xiaomi CFO Shou Zi Chew at a discussion hosted by The Information in Beijing. That competition ended what had been explosive growth for Xiaomi, which in late 2014 helped it raise more than $1 billion from investors at a valuation of about $46 billion. That made Xiaomi the world’s most valuable startup at the time.

What is Shadowsocks? The underground VPN alternative that China’s developers use to jump the Great Firewall — Quartz In response to these difficulties, China’s tech-savvy programmers have been relying on another, lesser-known tool to access the open internet. It’s called Shadowsocks, and it’s an open-source proxy built for the specific purpose of jumping China’s Great Firewall. While the government has made efforts to curb its spread, it’s likely to remain difficult to suppress. // Comment: I was using it my last year in Beijing in 2015, via a Streisand server I hosted in the US, seemed to be blocked regularly

Struggling Startup Wants to Reassign Staff to Remote Xinjiang - Sixth Tone Once investor darling, battery rental company Hidian is running out of funds, employees say.

Bigger Still Better for Tech, Telecom, Media Companies - Caixin Global A total of 1,582 private equity and venture capital investment deals in TMT took place during the first six months of this year, 104 more than in the second half of 2016. The total was the highest since 2014, according to the PwC report, which was released on Tuesday. The investments totaled $30.75 billion, up 22.9% over the preceding half year.

Alipay Banks on Hong Kong Billionaire to Open Local Wallets - Caixin Global The joint venture, which will take over from Alipay’s existing Hong Kong presence, is expected to be set up by the end of 2017 and continue to use the “AlipayHK” brand, according to a joint statement. The deal still requires approval from the Ministry of Commerce.

Flexible-Display Maker Pockets $560 Million in New Funds From Big Banks - Caixin Global Most displays in laptop computers and other mobile devices currently use rigid liquid crystal display (LCD) and organic light-emitting diode (OLED) technology. By comparison, next-generation flexible displays being developed Royole and others can be bent, folded and rolled up, allowing for greater portability of larger devices like notebook and tablet computers.

China's Meituan Dianping Said To Raise $3 Billion From Tencent, IDG Capital – China Money Network The new round, which came 20 months after the company last raised a US$3.3 billion round at a post-money valuation of US$18 billion led by Tencent, DST Global and TBP Capital in January 2016, will see the Shanghai-based company be worth as much as US$30 billion. It would make the Chinese technology firm among the world’s highest valued start-ups and the fourth largest unicorn in China.

'Racist' and 'offensive' videogame 'Dirty Chinese Restaurant' harmful, should be banned: US congresswoman - People's Daily Online New York City Congresswoman Grace Meng took to Twitter on Monday to urge Google, Apple, Android, and any other platform to ban an upcoming racist and offensive videogame called "Dirty Chinese Restaurant."

Baidu’s Agents Hard-Sell In-Feed Ads by Tying Them With Search Ads | Yicai Global In-feed ads are those that appear on news clients or social media interfaces. Whenever a user starts a mobile app, the system inserts a precisely targeted ad after every few messages.

Society, Art, Sports, Culture And History

Beijing-Based Photographer Luo Yang Shoots to Smash Stereotypes of Chinese Girls | the Beijinger The first work that I saw by Luo Yang (pictured above) was a portion of her near decade-long and ongoing GIRLS series exhibited in Beijing as part of the Elimination of Violence Against Women Art Exhibition. In it, she documented Zhou Yan, the victim of an acid attack perpetrated by her former boyfriend....Below we speak to Yang about what inspires her photography as well as an in-depth look at some of the women she has met during her travels.

Dalian Wanda: Inside China's Endurance Sports Empire | Chinese conglomerate Dalian Wanda has gone on a shopping spree for sports-management businesses; it’s now the world’s largest organizer of long-distance races and has a big footprint in soccer as well

Report: With New Norms, Chinese Communists Seek ‘Total Religious Control’ As Breitbart News informed earlier this month, one report on China’s new regulations claimed that the norms are consciously intended to “annihilate underground communities” and “suffocate official communities,” rather than merely organize them.

Chinese rapper grows into mature civil servant - People's Daily Online Hao became a father in 2014. Last year, he planned to buy a house in a good school district, for which he had to sell his current estate and apply for another two million yuan (over $300,000) mortgage. The huge gap between his salary and the high monthly payment once again made him surrender to the real world. Gradually, he learned to keep his sorrows inside, and he does not even mention them to his wife. However, he is still a happy and outgoing man at the workplace who brings laughter to his colleagues. He has been a civil servant for 10 years, a fact that astonishes all of his friends. They cannot imagine that a once desiring rapper has now settled down for such a long time. “I was full of hope when I was young, feeling that I could change the world by rapping,” Hao said. But he later realized the complication of the world. Every change is made over time, not overnight, he said. // Comment: “Resistance is futile” seems to be the message?

Energy, Environment, Science And Health

Virginia Tech professor arrested, charged with defrauding government | Virginia Tech | Zhang, along with Tech graduate Zhiguang Zhu and postdoctoral researcher Chun You, are alleged to have defrauded the university, the National Science Foundation and the U.S. Department of Energy by withholding grant funds between January 2014 and May 2016, according to the complaint. Zhu and You currently work for the Tianjin Institute of Industrial Biotechnology in China, according to court documentation and their LinkedIn profiles.

On China’s Coast, Rare Bird Finds Little Room to Rest - Sixth Tone It was the kind of news experts only believe if they see it with their own eyes: A man in China claimed he had spotted 100 spoon-billed sandpipers foraging on the muddy coast of the Yellow Sea. The bird is so small that it would barely cover the hand of a grown woman. It is also so rare that a group of such a size would constitute a fifth of the worldwide population.

Chinese Academy of Sciences, Shanghai Government Officially Unveil Zhangjiang National Laboratory | Yicai Global The lab is located in the heart of Zhangjiang Science City in Shanghai. In its early days, it was used to conduct based research in photonic science, life sciences and information technology, as well as interdisciplinary research within these fields. It hopes to become a comprehensive research base with international influence in the future.

China to complete national technology transfer system by 2025 - Xinhua | Improving the system is key to domestic innovation, economic and social development, and to supporting China's efforts to become a leading power in science and technology.

Agriculture And Rural Issues

China’s Reforms Allowing Villagers to Rent Out Land Have Boosted Incomes - Bloomberg In November of last year, policymakers in Beijing approved a rollout of the land reform tested in Sihong to the rest of the country. The changes are part of a drive to boost China’s agricultural output and turn its farmers into consumers, objectives that dovetail with the larger goal of curbing the economy’s dependence on debt-fueled investment to support growth. “China’s unlocking the underlying wealth in these land assets,” says Liang Hong, chief economist at China International Capital Corp. in Beijing, who previously worked for the International Monetary Fund. “We’re looking at 300 to 400 million people with more purchasing power, and that’s the size of the European Union.”

Food And Travel

How China's Private Chateau Cuisine Landed in San Francisco - Eater If it succeeds, Eight Tables will be the first restaurant in America to usher in this new genre of Chinese fine dining on such a broad scale; it will be the first private-kitchen concept to make it mainstream. Chen has his sights aimed high. “We want the Michelin stars,” he says.


Beijing Rush Hour to Last 5 Hours in Days Leading up to National Holiday | the Beijinger Beginning on Wednesday, the city's roads will become more congested and result in an evening rush hour that is expected to begin at 2pm and last until 7pm. The evening rush hour will peak on Saturday (a non-workday) without any vehicle licensing restrictions to limit the number of cars on city streets. In addition, Saturday morning will see streets closed down around Tian'anmen Square for the Martyr Memorial March.

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Wednesday, September 27, 2017

Dream Of Rejuvenation; Cyber Superpower And Censorship Go Together; Interpol Goes To Beijing-Sinocism-09.26.17

Good morning. Yesterday's newsletter seems to have triggered a few spam filters. If you missed it is online here.

AnchorThe Essential Eight


  1. The Dream Of National Rejuvenation Is Real And Powerful**

Comment: The entire Politburo Standing Committee joined him..Pekingologists may find the opening shot, of Xi with Wang Qishan right over his shoulder, interesting. Or not...

**2. Wilbur Ross In Beijing Negotiating Deals For Trump's November Visit **

  • U.S. Commerce Secretary Ross tells China to guarantee fair treatment for U.S. firms - Reuters:

    Ross told Premier Li Keqiang on Monday that the United States hoped for “very good deliverables” when U.S. President Donald Trump visits China, likely in November.

    In a statement on Tuesday, the U.S. Commerce Department said that Ross had also pressed China on the “need to rebalance bilateral trade and investment relations” and urged it to take “meaningful action” on trade issues.

  • China-U.S. shared interests far outweigh differences in trade ties: Premier Li - Xinhua:

    The premier said China's market will be more and more open and its business environment will get better and better. "We welcome more U.S. enterprises to invest in China," he said.

    "China hopes the United States gives fair treatment to Chinese investment and relaxes restrictions on exports of high-tech products to China so that bilateral economic and trade ties grow in dynamic equilibrium," the premier said.

3. Does Ivanka Trump's Business Have Something To Hide In China?

Ivanka Trump's China Business Ties Are More Secret Than Ever - AP:

What shipping records do show is that a company called Zhejiang Tongxiang Foreign Trade Group Co. Ltd., a sprawling conglomerate once majority-owned by the Chinese state, sent at least 30 tons of Ivanka Trump handbags to the U.S. between March 2016 and February.

Zhejiang province's commerce department said in June 2014 that it would help lower export costs for that same company, along with nine other local enterprises, through a special three-year trade promotion program. Among the measures outlined were export insurance subsidies and funding for online trading platforms and international marketing, as well as special funds earmarked for foreign trade companies with large-scale, fast-growing exports.

4. Is The Shadow Bank "Crackdown" Real and Likely to Last?

Shadow-Banking Leverages Appear Reined In - Caixin Global:

As of the end of June, the outstanding value of WMPs sold among financial institutions dropped 31% to 4.61 trillion yuan ($699 billion) from the end of December, according to a report released Friday by the China Banking Wealth Management Registration & Depository Center.

Outstanding value of all WMPs, including those sold to retail investors, grew 8% to 28.38 trillion yuan during the same period, the report said. The growth rate, however, slowed sharply from 43% from a year ago.

World’s Largest Money-Market Fund Will Lower Its Returns, Shed Risk - WSJ:

Tianhong Asset Management Co., a Beijing-based company that manages a money-market fund with more than $200 billion in assets, is making changes to comply with liquidity rules imposed recently by Chinese regulators, according to Wang Dengfeng, general manager of Tianhong’s fixed-income department.

“We will step up efforts to adhere to the original function of money-market funds as a cash management tool that carries low risk, low yield and high liquidity,” Mr. Wang said in an interview with The Wall Street Journal. The result will be a gradual slide in the fund’s investment yields, he added.

5. China Is Building A Cyber Superpower

China’s Strategic Thinking on Building Power in Cyberspace: A Top Party Journal’s Timely Explanation Translated - New America:

The article, which a team of analysts has translated in full below, outlines the major elements of General Secretary Xi Jinping’s strategic thinking on one of Chinese cyberspace policy’s watchwords: 网络强国 (wǎngluò qiángguó). It’s a pithy formulation in Chinese that can be translated as “cyber superpower,” or “building China into a national power in cyberspace,” and the strategic concept attached to it ties together a series of concepts and initiatives that Xi has pushed in major speeches and the Chinese government has moved to enact. The CAC “Theoretical Studies Center Group,” apparently making its debut here, draws on the legitimacy of its Xi-established parent organization and the special status of the journal Qiushi to provide an authoritative synthesis of recent strategic thinking, attributed to Xi, on how to take China from being a cyber power to being a cyber superpower—a goal that implies rough parity with the United States.

Comment: So far the policy is working very well, in spite of all the wishful thinking about the inability to nail jello to the wall...

6. Expect Internet Censorship And Controls To Only Increase

China's cyber watchdog imposes top fines on tech firms over censorship - Reuters:

China’s cyber watchdog has handed down maximum penalties to several of the country’s top tech firms, including Tencent Holdings Ltd (0700.HK), Baidu Inc (BIDU.O) and Weibo Corp (WB.O), for failing to properly censor online content.

China Disrupts WhatsApp Texts as Censor Tools Grow More Powerful - Bloomberg:

The latest disruptions are affecting users intermittently across the world’s second largest economy, intensifying a blocking effort that began around July but has gotten more sophisticated in ensuing months, said Nadim Kobeissi, a cryptographer at Paris-based online security firm Symbolic Software.

Comment: During the 18th Party Congress in 2012 VPNs in Beijing basically stopped working for about a week. Is there any reason to think this year will be different? If you are in Beijing, do what you need to do outside of the ChiComNet before the Congress starts...

China online service providers improve privacy protection - Xinhua:

The Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Standardization Administration Sunday announced the results of their latest assessment of the 10 platforms' privacy policy.

Shrinking Anonymity in Chinese Cyberspace - Lawfare:

While top-down censorship rules are certainly major components, there is a bigger story here, with implications likely to be felt long after the Party Congress closes. These moves are part of sweeping efforts by Xi’s administration to strengthen China’s system of cyber governance and to expand the legal framework for control over all data, networks and information content. China is pushing ahead with its own internet model, where the space for anonymity online is rapidly eroding, and data collected from a single digital identity is feeding into a vast government scoring system that reaches into all aspects of life.

Comment: And why wouldn't Beijing think its approach to controlling the Internet is not the correct one? Look at how "hostile foreign forces" disrupted the US political process in 2016-Russian operatives used Facebook ads to exploit America’s racial and religious divisions. If I am a Beijing cyber czar I am feeling pretty smart right now...

7. China Hosts Interpol

Xi says international community must cooperate on global security - Xinhua:

China hopes to work closely with countries and international organizations on global security, and jointly build universal security for humankind, Chinese President Xi Jinping said here Tuesday. Xi made the remarks in Beijing while addressing the opening ceremony of the 86th Interpol General Assembly


Xi Jinping says China will support Interpol, raise its profile | South China Morning Post:

China’s Public Security Minister, Guo Shengkun, told the assembly that China hoped to use international police cooperation to strengthen its defence against the threat of militants returning from abroad to join groups like the East Turkistan Islamic Movement.

8. The China Anti-Cult Network Goes Online

Religious Cults Feel the Heat from Revamped Website - Sixth Tone:

The website, China Anti-Cult Network, was set up Friday by the Office for Prevention and Handling of Cult Issues under the auspices of the State Council, China’s cabinet, together with accounts on microblogging site Weibo and messaging app WeChat. The aim of the website, according to the report, is to launch a nationwide publicity campaign to combat the spread of religious cults and provide help to victims of such groups and their families.


AnchorBusiness, Economy And Trade

China moves to encourage entrepreneurial spirit - Xinhua The guideline, the first of its kind focused on entrepreneurial spirit, was released by the Communist Party of China Central Committee and the State Council in a move to spur market vitality. // Comment: The circular: 中共中央 国务院 关于营造企业家健康成长环境弘扬优秀企业家精神更好发挥企业家作用的意见 The last two sections of the circular emphasize the importance of Party leadership over SOEs, Party Construction and education in private enterprises.

Alibaba Takes Control of Delivery Business at Center of U.S. Probe - Bloomberg Now that Alibaba’s taking control, it plans to consolidate Cainiao’s financials under its own books and is committing to spend another 100 billion yuan over the next five years to further expand the network. That will help address U.S. regulators’ questions about why Cainiao, of which Alibaba owned 47 percent, wasn’t previously included. But it also takes Alibaba deeper into the business of setting up and controlling its own infrastructure, much like Inc. The unit made a net loss of 2.2 billion yuan in calendar 2016, tripling from 2015. Revenue however also tripled, to 9.4 billion yuan.

Beijing’s Existing Home Market Loses Momentum in Third Quarter - Caixin Global As of Saturday, sales of existing homes as measured by online contracts totaled 2.06 million units in the third quarter, down 73.7% from the same period a year ago and down 43.7% from the previous quarter. It was the lowest number of sales in the capital in a single quarter since 2015, according to data from the research arm of 5I5J Group. The average price of existing homes in Beijing fell 5% in the third quarter from the second quarter of this year, after hitting a nine-quarter high in the first quarter.

Will Merged Coal, Power Giants Live Happily Ever After? - Caixin Global With assets of 1.8 trillion yuan ($273 billion), analysts say the new conglomerate, China Energy Investment Corp. Ltd., will have an installed capacity of about 225 gigawatts, eclipsing France’s Electricite de France SA and Italy’s Enel to become the world’s biggest power producer. A date for finalizing the deal has not been announced. The merger plan marks the latest example of Beijing’s effort to consolidate state-owned enterprises (SOEs) and reduce overcapacity in targeted industries through its supply-side reform initiative

McDonald’s Steps Up China Super-Sizing With New Partners - Caixin Global McDonald’s is accelerating the pace of its store expansion in China, securing three real estate partners within just two months after its new owners, Citic Group and Carlyle Capital, took over its Chinese assets.

China's 'Unprecedented' Anti-Pollution Drive to Rattle Metals - Bloomberg China’s plans to tackle pollution over the winter could be the “next big event to unsettle global commodity prices,” and plant closures may be compounded by restrictions on transport and construction, according to Morgan Stanley.

BHP says China’s Belt and Road plan could require 150m tonnes of steel - FT $$ China’s ambitious Belt and Road initiative could result in an additional 150m tonnes of steel demand, enough to keep the country’s mills going at their current rate for the next decade, according to the world’s largest mining company.

China postpones controls on food imports after global outcry | South China Morning Post Rules requiring each food shipment to have an inspection certificate from a foreign government were due to take effect on Sunday. But Beijing has decided to grant a “transitional period of two years” following comments by other governments, according to a document submitted to the World Trade Organisation on Monday.

China's HNA Group says will keep investing in the United States - Reuters HNA Group Co, one of the most acquisitive Chinese buyers of overseas assets, will keep investing in the United States, one of its key overseas markets, the conglomerate’s Chief Executive Officer Adam Tan said on Tuesday.

AnchorPolitics And Law

Workers set up large flower terrace on Tian'anmen Square in Beijing - Xinhua Comment: Does Zeng Qinghong's son still have the contract?

NGOs in China: Progress as of August in Implementing the Overseas NGO Law - NGOs In China As of August 22, the MPS Overseas NGO Office website shows a total of 185 representative offices, of which around 88 (48%) were registered just in the last three months.  The representative offices were registered in around 20 of China’s 32 provincial-level units, with the highest number concentrated in Beijing, Shanghai, Yunnan and Guangdong

【学习贯彻习近平总书记"7·26"重要讲话精神 迎接党的十九大】系列报道 全方位构筑管党治党制度体系————头条——中央纪委监察部网站 党的十八大以来,以习近平同志为核心的党中央坚持依规治党与依法治国统筹推进、一体建设,提出了一系列关于制度治党的新思想新观点新论断,出台了一系列具有标志性、关键性、引导性的法规制度,实现历史性突破、取得历史性成果。

AnchorForeign And Defense Affairs

U.S. Sees ‘Four or Five’ Ways to Resolve North Korean Crisis - Bloomberg: “There’s not a ‘precision strike’ that solves the problem,” McMaster, an Army lieutenant general, said at an event in Washington hosted by the Institute for the Study of War. “There’s not a military blockade that can solve the problem. What we hope to do is avoid war, but we cannot discount that possibility.”// Comment: Anything to the rumor that US and North Korean officials will meet in Moscow as part of backchannel talks, without the Chinese present?

Top Chinese bank vows to strictly apply UN sanctions on North Korea | South China Morning Post Four sources said China’s central bank had told banks to strictly implement United Nations sanctions against North Korea and instructed them to stop providing financial services to new North Korean customers and wind down loans with existing customers.

Liu, Tillerson to co-chair China-US social, people-to-people dialogue - Global Times China and the US will hold their first social and people-to-people dialogue on September 28 in Washington DC, Chinese Foreign Ministry Spokesman Lu Kang said at a press briefing on Monday. Chinese Vice Premier Liu Yandong will co-chair the dialogue with US Secretary of State Rex Tillerson.  //  Comment: Hear Steve Schwarzman is hosting a dinner around the event, wonder who is on the guest list

With the D3000, China enters the robotic warship arms race | Popular Science The D3000 is a 98-foot-long, stealthy robotic trimaran warship designed to operate autonomously for months. Notably, this system—which appears to be tagged for export—is being offered by the China Aerospace and Science Technology Corporation, a Chinese defense contractor whose primary strength is in missiles and other aerospace technologies. (It's the company that's building the T Flight, China's answer to the Hyperloop.)  CASC notes that the D3000 can either operate by itself, or as part of a larger task force with manned ships.

Chinese navy fleet arrives in Brunei for friendly visit - Xinhua Speaking upon the fleet's arrival, Shen Hao, commander of the Chinese naval fleet, said at the welcoming ceremony that the friendly exchanges between the two countries date back to more than 1,500 years ago, and the traditional friendship between the two peoples has been continuing to grow.

Xi encourages university students to contribute to strong army - Xinhua i, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, made the remarks in a letter, which he wrote Saturday and was made public Monday, replying to the eight students

The South China Sea and China's "Four Sha" Claim: New Legal Theory, Same Bad Argument - Lawfare While dropping or even de-emphasizing China’s Nine-Dash Line claim in favor of the Four Shas has important diplomatic and political implications, the legal significance of such a shift is harder to assess. The constituent parts of China’s Four Sha claims have long been set forth publicly in Chinese domestic law and official statements. Based on what we know so far, these new Chinese legal justifications are no more lawful than China’s Nine-Dash Line claim. The challenge for critics of Chinese claims in the South China Sea, however, will be effectively explaining and articulating why this shift does not actually strengthen China’s legal claims in the South China Sea.

Egyptian Authorities Forcibly Disappear 16 Uyghur Students From Notorious Prison - RFA Egyptian authorities have released up to 25 of more than 100 Uyghur students from northwestern China’s Xinjiang region who were detained earlier this year in the country’s notorious Tora Prison, though armed police put black hoods on 16 others and took them away, three recently released Uyghurs said.

AnchorHong Kong, Macao And Taiwan

Videos surface of pro-China suspect beating Taiwanese students | Taiwan News A day after clashes ensued between pro-independence protesters and pro-unification groups at the "Sing! China: Shanghai-Taipei Music Festival" at National Taiwan University, video footage has surfaced on Facebook of a suspect who has been detained by police and has been associated with a pro-China group beating students with a metal batton.

Triad Member Behind Scuffles Between Pro-China And Pro-Independence Protesters On Taiwan University Campus – Synglobe The group that is allegedly responsible for the eruption of violent scuffles is the Party for the Promotion of Chinese Unification (中華統一促進黨, PPCU). The party was founded in 2005 by Zhang Anle (張安樂), a notorious Taiwanese gangster and member of the Bamboo Gang, one of Taiwan’s most powerful triads. The PPCU is an openly pro-Beijing organization that promotes Taiwan’s “peaceful unification” with mainland China under the “one country, two systems” (一國兩制) formula which the Communist Party used to incorporate Hong Kong and Macau. The  PPCU argues that “Taiwan independence means war” (台獨就是代表戰爭).

No reason to tolerate Hong Kong independence, says leader Carrie Lam | Hong Kong Free Press HKFP Chief Executive Carrie Lam has said there is no reason to tolerate Hong Kong independence. She was responding to comments by Zhang Xiaoming, the newly appointed top Beijing official in charge of Hong Kong affairs. He said Hong Kong should take a zero tolerance attitude towards independence.

Lawmaker Junius Ho says he used wrong words in remark about killing independence advocates 'without mercy' | Hong Kong Free Press HKFP At an anti-independence rally on September 17, rural leader Tsang Shu-wo said onstage that pro-independence activists should be “killed.” Ho supported him, shouting “without mercy” into his microphone. On TVB programme Straight Talk, scheduled to be aired Tuesday night, Ho said that the word “kill” was spoken by Tsang, and Ho “went along with it because I knew full well that it was not Tsang’s intention to agitate people.”

AnchorTech And Media

E-Commerce IPO Fizzles as Fintechs Line Up at Gate - Caixin Global The initial public offering (IPO) by Secoo Holding Ltd., a luxury goods e-commerce specialist, raised $110 million after pricing at $13 per American Depositary Share (ADS) on Friday, according to a company announcement. But the shares plunged 23% in their debut, ending their first day at $10 in trading on the Nasdaq.

Alipay Finds Seat in Starbucks, 10 Months After WeChat Pay - Caixin Global The move has broken major rival WeChat Pay’s digital-payment monopoly at the popular coffee chain. The Tencent-backed payment tool is embedded in WeChat, China’s dominant messaging app, with nearly 1 billion users. Starbucks in the country have been accepting WeChat Pay since late 2016.

China's iQiyi considers U.S. listing as early as 2018: source - Reuters The up to $10 billion valuation would still be a fraction of U.S. rival Netflix’s near $80 billion market capitalization. iQiyi had 481 million monthly active users as of the end of last year, data cited by Baidu shows.

New eyeball in space peers toward Earth - China Daily WeChat composite images: A photo of Earth taken by the crew of NASA's Apollo 17 spacecraft in 1972(left) will be replaced for three days by a photo taken by China's Fengyun 4A satellite.

Xiaomi Apologizes After Recruiter Ridicules Students - Sixth Tone Chinese smartphone manufacturer Xiaomi has apologized and disciplined a recruiter after he made fun of students who major in Japanese, Sixth Tone’s sister publication The Paper reported Sunday.

China's Used Car Deals Speed Up As Didi Chuxing Invests $200M In – China Money Network Didi Chuxing has bought US$200 million worth of shares in Beijing-based second-hand car marketplace in a strategic investment, marking the latest investment deal in China’s fast moving online used-car market, according to Didi’s announcement.

AnchorSociety, Art, Sports, Culture And History

Guggenheim Museum pulls three artworks featuring animals after threats of violence | The Guardian Works in an exhibition of Chinese art that included reptiles eating insects and dogs on a treadmill are removed from show in New York following outcry

Campaign to protect left-behind children sees results - Xinhua Since November 2016, a total of 11,821 left-behind children who had dropped out of school have now resumed their education, according to the office under an inter-ministerial conference established by the government to protect left-behind children. Police nationwide have entered 125,377 left-behind children on the national household records, or hukou, who were previously not registered.

Class of ’78: Studying in the US Post-Cultural Revolution - Sixth Tone Liu Baicheng was 45 years old when he traveled to the U.S. to study in 1978 as part of that first group of state-sponsored students after the Cultural Revolution...This is Liu’s story, as told to Sixth Tone and edited for brevity and clarity

How the top-heavy Catholic Church is losing the ground game in China | America Magazine This failure to grow—estimates have the current Catholic population in China at not much above 10 million in a nation of 1.4 billion—has led many members of the church to see recent negotiations between the Holy See and the country’s Communist Party as especially important.

新华社调查:“洗澡蟹”式海归面临淘汰,留学生收入分化严重_教育家_澎湃新闻-The Paper Comment: Propaganda push on the disappointing job and income prospects for overseas returnees seems like it is gearing, instead of just saying "you can't study abroad" just make it clear your family may never gets its investment back...studying overseas is very expensive, and risky...

AnchorEnergy, Environment, Science And Health

Pandas Are No Longer Endangered. But Their Habitat Is in Trouble. - The New York Times In a study published in Nature Ecology & Evolution on Monday, researchers report that suitable panda habitats have significantly and steadily declined since 1990, the year the International Union for the Conservation of Nature first classified the animals as endangered. That could make any gain in China’s wild panda population a short-lived conservation victory.


Beijing criticised over executive MBA candidate clampdown - FT $$ The dean of China’s oldest business school has accused recently implemented ministry of education controls of strangling the country’s executive education sector just as it is garnering global approval. Rules were introduced by the government in Beijing less than a year ago requiring all candidates for the executive MBA — a part-time course taken by people in their 30s — to take the same entrance exam as the full-time intake, who are a decade or more younger.

AnchorFood And Travel

China to Cut Flights in Bid to Improve On-Time Rate - Caixin Global Starting in late October, Beijing Capital International Airport and Shanghai Pudong International Airport will reduce the number of departures to 75% of their current capacities, the Civil Aviation Administration of China (CAAC) said Thursday.


‘Lives could be put at risk’: Beijing hospital warns abandoned shared bikes are blocking ambulances | South China Morning Post Jishuitan Hospital has more than 1,500 beds and is one of the capital’s most prominent general hospitals. A hospital warden told the newspaper that the parked bicycles at the entrance and nearby side roads were a nuisance especially at peak morning rush hour.

蔡奇:屋顶拆违整治清单 胡同实现不停车 Summary: Beijing Party Secretary Cai Qi makes it clear that the cleanup plan for Beijing will continue, though no car parking in hutongs seems impossible...

AnchorJobs And Events

A Celebration of Liu Xiaobo and Liu Xia Tickets, Thu, Oct 19, 2017 at 10:30 AM | Eventbrite Washington National Cathedral

The China Dashboard: Tracking China's Economic Reform Program | Washington, DC | Asia Society Wed 11 Oct 2017 2:00pm - 3:30pm

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Monday, September 25, 2017

Xi Remakes Communist Youth League; Politically Correct Universities; Wang Qishan Has Bannon To Tea-Sinocism-09.25.17

Happy Monday from swampy, summer-like DC. This week may a be fairly slow news period in China as the country gears up for the National Day and Mid-Autumn Festival (October 4 this year) holidays that will have most people on vacation from October 1 through October 8. The Sinocism paywall will launch soon after the holiday ends.

North Korea’s Kim Jong-un may try to ruin Xi’s vacation. Do not be surprised if there is another provocative test on or around the October 1 PRC National Day.

If you are in DC on October 4 consider going to the Hudson Institute to see Guo Wengui. Bill Gertz will interview him.

US Commerce Secretary Wilbur Ross is in Beijing today, working on preparations for Trump’s November visit. Expect Beijing to be more than happy to give some “twitterable” big deals, less likely to move on anything structurally significant.

The Essential Eight

1. Xi's Deconstruction of The Communist Youth League

Background: Since 2012 Xi has systematically picked apart the Communist Youth League (CYL), the power center for Hu Jintao, Li Keqiang, and Hu Chunhua among others. Qin Yizhi, recent head of the CYL, was just demoted, a new book from Xi details his frustrations with the group, and the CYL's University is no more.

China up close: Xi silences once-powerful youth league and former president's protege- Nikkei Asian Review:

The building demolition involves the China Youth University of Political Studies 中国青年政治学院, a way station for Youth League cadres. The institution is commonly known as the Central School of China Communist Youth League. Both names are inscribed in Chinese on the gatepost of the university's campus in western Beijing.

At least they used to be. On Sept. 12, the long-established and influential school was reborn under a new name.The Central School of China Communist Youth League was absorbed into the Chinese Academy of Social Sciences, China's biggest think tank, and reborn as the University of Chinese Academy of Social Sciences.

Comment: Hu Jintao, Li Keqiang and Hu Chunhua have all been head of the school. I am kicking myself, heard about this move over a month ago and somehow neglected to put it in the newsletter...

Baidu Baike entry on the school-中国青年政治学院 编辑 China Youth University of Political Studies

Latest Xi Jinping book gives clues on decline of Communist Party’s youth wing | South China Morning Post:

Collection of president’s remarks on the once influential faction comes amid confirmation Communist Youth League’s outgoing chief has been demoted..

Wu Qiang, a former political science lecturer at Tsinghua University in Beijing, said Xi’s trenchant criticism of the youth league reflected his intention to transform it from a bureaucracy to an organisation that can mobilise the masses – much in line with the party’s rekindled “mass line” campaign, developed by Mao Zedong, to reconnect with the public.

Why This Matters: Heading into the 19th Party Congress Xi is making it crystal clear that the League is now his to mold, which probably does not bold well for the political future of Hu Chunhua.

2. Wang Qishan Invites Steve Bannon To Tea In Beijing

Comment: Great scoop by the Financial Times, interesting move by Wang, no way he did it without Xi's approval, and it makes perfect sense. Why wouldn't Beijing want to have direct talks with the man who was so instrumental in Trump's win, and in the "America First" movement? The New York Times reports that the intermediary who arranged the meeting between Goldman Sachs alum Bannon and Wang was Goldman Sachs alum John Thornton. Wang seems to really have a soft spot for Goldman...

Wang's meeting of course has triggered speculation about what this means for his political future. Wang has been active in the last week meeting the Singapore Prime Minister and then Bannon. I do not think this looks like a man who is about to lose power at the 19th Party Congress but do not take my word for it. No one seems to know right now.

Steve Bannon held secret meeting in China - FT $$:

The meeting occurred at Zhongnanhai, the Chinese leadership compound, after Mr Bannon had visited Hong Kong to give a closed-door speech at a big investor conference hosted by CLSA, a Chinese state-owned brokerage and investment group...

Mr Wang, who is seen as the second most powerful person in China after President Xi Jinping, arranged through an intermediary for a 90-minute meeting after learning that Mr Bannon was speaking on the topic, according to the second person, who stressed there was no connection to President Donald Trump’s upcoming visit to China.

In Beijing and Abu Dhabi, Signs of Bannon’s Continued Influence - New York Times

John L. Thornton, a former president of Goldman Sachs who has taught at Tsinghua University in Beijing and has longstanding ties to the Chinese leadership, helped arrange Mr. Bannon’s meeting with Mr. Wang, which was first reported by the Financial Times on Thursday.

He met with two other Chinese officials while in Beijing, one of whom selects articles from the People’s Daily for the Chinese leadership, according to two people briefed on the meetings. The purpose, these people said, was to discuss the rise of economic nationalism and populism.

China anti-graft tsar Wang Qishan’s Bannon ties fuel talk of second term - FT $$

Three people briefed on this month’s meeting said it was initiated by Mr Wang in early September, at least one week before Mr Bannon left Washington for a well-publicised appearance at an investor conference in Hong Kong.

3. Xi's Unprecedented Reshuffling of The PLA Leadership

Tai Ming Cheung » Xi Jinping Remakes the Military: Domestically Acquiescent, Externally Emboldened:

Over the past five years, Xi has carried out sweeping changes that have eluded his predecessors. They range from a far-reaching reorganization of the PLA high command to the largest ever anti-corruption crackdown within the military that has claimed more than 100 generals, including some of the most senior officers. Many of these initiatives, especially the organizational changes, are still being implemented and will take several more years to complete, but Xi declared at the parade that a new military institution is beginning to take shape: “The people’s army now has a new system, a new structure, a new pattern and a new look”.

Why It Matters: Xi continues to remind everyone inside the system that he controls the gun. And it is a much bigger and more capable gun than the PRC has ever had.

China names new military commander for strategically important region near North Korea | South China Morning Post:

Lieutenant General Li Qiaoming visited troops stationed in Heilongjiang, Jilin and Liaoning provinces – near the North Korean border – recently in his new role as commander of the theatre command, state news agency Xinhua reported on Thursday.

He was accompanied by General Xu Qiliang, vice-chairman of the Central Military Commission (CMC), which runs the People’s Liberation Army.

4. Gold Rush on The Way To Becoming A Military Superpower

China Focus: Xi stresses integrated military, civilian development - Xinhua:

Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, made the remarks while presiding over the second plenary session of the Central Commission for Integrated Military and Civilian Development, which he also heads.

The session adopted a plan for the development of defense science, technology and industry during the 13th five-year-plan period (2016-2020), and guidelines on advancing integrated military and civilian development in defense science, technology and industry.

CCTV Evening News on the meeting- 习近平主持召开中央军民融合发展委员会第二次全体会议强调 向军民融合发展重点领域聚焦用力 以点带面推动整体水平提升

新华社、解放军报推出长篇综述:《富国强军的战略之举》 - 中国军网:


5. North Korea Sanctions Ramping Up

Comment: The PRC seems on board, the US clearly told Beijing to clean up its banking relationships ahead of the Friday announcement (the language "these sanctions will be forward looking" is a tell on that), though fines for at least one large PRC bank are still possible. And as much as Trump's approach has succeeded in getting Xi's support, do not expect sanctions to solve the fundamental challenge of a nuclear North Korea with missiles that can hit the US.

Remarks by Secretary Mnuchin on President Trump’s Executive Order on North Korea:

This new Executive Order will authorize Treasury to impose a range of sanctions, such as suspending U.S. correspondent account access to any foreign bank that knowingly conducts or facilitates significant transactions tied to trade with North Korea or certain designated persons.  These sanctions will be forward looking, and applied to behavior that occurs following the date of the Executive Order.  Foreign financial institutions are now on notice that, going forward, they can choose to do business with the United States or with North Korea, but not both.

China Imposes Limit on Oil Supply to North Korea - AP:

China announced Saturday that it will limit energy supplies to North Korea and stop buying its textiles under U.N. sanctions imposed over its nuclear and missile development, further reducing support from Pyongyang's last ally.

Exports of refined petroleum to the North will be limited to 2 million barrels per year, effective Jan. 1, the Commerce Ministry said. Sales of liquefied natural gas are banned outright.

China watches in frustration as North Korea crisis enters dangerous spiral - The Washington Post:

“The North Koreans have figured out that the Chinese are genuinely in a bind,” said Euan Graham, director of International Security Program at the Lowy Institute in Sydney. “Having cried wolf for so long about having limited influence, the Chinese genuinely do have limited influence in North Korea right now. It’s not just weasel words.”..

“Sanctions, in my view, will not reverse North Korea’s resolute determination,” said Shen Dingli, deputy dean of Fudan University’s Institute of International Studies in Shanghai.

6. Can China Have Politically Correct, World-Class Universities?

China’s Quest for ‘World Class’ Universities Triggers Spending Spree - Caixin Global:

The ministries of education and finance and the country’s top economic planner, the National Development and Reform Commission, released a long-anticipated list of 42 universities that have been handpicked to be transformed into world-class learning facilities. The list includes top schools such as Peking University and Tsinghua University in Beijing and Sun Yat-sen University in Guangzhou...

Students "guided to firmly support the CPC leadership" in education reforms - Xinhua:

China will incorporate more ethical education contents for students in its national curriculum, and seek to develop more innovative minds, according to a new education reform document (中办国办印发《关于深化教育体制机制改革的意见》 ).

The document, jointly released by the General Office of the Communist Party of China (CPC) Central Committee and the General Office of the State Council, said an ethical education system guided by socialist core values must be put in place in all primary and middle schools, as well as higher education institutions.

China Steps Up Ideology Drive on College Campuses - WSJ:

Top universities seen as insufficiently rigorous in their ideological work are being shamed. Professors who speak out are punished. The government is sending observers to nearly 2,600 universities to monitor mandatory ideology classes, which include staples like “ Mao Zedong thought.”

“What they most want to see is whether what you’re saying is in line with the official demands on ideology and values,” said Xiao Wei, who will be sitting in on classes in Shanghai this fall as part of a group of some 100 professors examining the quality of ideological education in the city. “They also want to understand how effective [the classes] are,” said Mr. Xiao, a professor of Marxism at Shanghai’s elite Fudan University.

China charts own path in building world-class universities - Global Times:

Already, the Central Leading Group for Comprehensively Increasing Reforms approved a proposal for building a "world-class university" and "world-class discipline" - as a "double first-class" - in 2015. A list of 42 universities and colleges to be developed into world-class educational institutions was announced this year, marking a milestone in "double first-class" construction.

One Big Question: How will Western academic institutions deal with this ideological resurgence? My money will be on an ostrich pose...

7. Will Beijing Tolerate The Short-term Pain A Real Environmental Crackdown Will Cause?

Will It Work? Maybe, if Beijing will allow the GDP growth rate to drop and if officials' performance evaluations have a much higher weighting towards environmental measures and a lower weighting for GDP growth. But those are very big Ifs...

China’s Sweeping Pollution Crackdown Puts Chill on Economy - Caixin Global:

Authorities’ attempts to bring on board business owners like Liu to support their fight against air pollution is being undermined by the heavy-handed approach that inspectors are adopting in some areas. Inspectors are “going overboard,” ordering business closures for reasons not linked to pollution such as an expired business license, several small-business owners told Caixin. They are “gunning for favorable performance reviews at the expense of workers’ livelihoods” and don’t take into account the effect the sudden closures had on local economies, they said.

Tangshan Tells Steel Firms to Cut Production to Reduce Pollution - Caixin :

The city government of Tangshan, a steel hub about 180 km east of Beijing in Hebei province, said it is requiring steel producers to cut their production by half in a bid to reduce pollution levels, according to the official-run Tangshan Evening News.    The measures became effectiveMonday.

How Big Is This? Gabriel Wildau, The Financial Times' Shanghai Bureau Chief, **commented on Twitter **that this move means Tangshan will "furlough capacity worth 7.5% of nationwide total this winter to meet pollution targets".

8. Australia Looking At New Laws To Combat Chinese Communist Influence

Comment: A US law is the model, but the US government rarely enforces it, especially against PRC-connected interests.

George Brandis considers new laws cracking down on Chinese spying in Australia - Sydney Morning Herald:

Attorney General George Brandis is planning a once-in-a-generation shake-up of the legal framework governing who can lawfully influence Australian politicians, amid fears of clandestine Chinese Communist Party influence over politics in this country.

Mr Brandis flew to Washington in July, shortly after a series of Fairfax Media reports on the issue of foreign interference, and was briefed by US national security officials about introducing US style "foreign agent" laws into Australia.

The Battle Behind the Front – China Heritage - Geremie R. Barmé:

I would argue that the following essay by Jichang Lulu is an example of writing in the mode of New Sinology. It is an analysis of an issue involving contemporary China grounded in linguistic fluency, alert in particular to the beguiling mix of language, culture and politics in the People’s Republic. This form of analysis reflects a sensitivity to China’s allusion-rich literary language, an understanding of Leninist-Maoist political traditions, the nature of partyspeak (New China Newspeak), and a keen ear/eye for contemporary colloquial usage. It is the interweaving of these linguistic registers and the modes of thinking they reflect, as well as the politics that they serve, that allow writers like Jichang Lulu to share important insights into how contemporary China, in particular the party-state of the People’s Republic, may be better understood.

Business, Economy And Trade

China Plans Closer Oversight of $304 Billion in State Company Funds - Bloomberg China will create a centralized financing company to oversee some $304 billion of funds held by the country’s state-owned enterprises’ finance units, people familiar with the matter said, allowing the government closer supervision of SOEs’ borrowing and investments. The plan, approved by the State Council or Cabinet, will increase the government’s ability to supervise the non-financial central SOE finance companies’ investments, giving the entity a fuller picture of how these companies are using funds, according to the people, who asked not to be named because the plans have not been made public.

Economic Watch: Nationwide negative list to spur foreign investment - Xinhua China will roll out a negative list for foreign investment, which has been tested in pilot free-trade zones. The negative list model, which states the sectors and businesses that are off limits to foreign investment, will be adopted nationwide as early as 2018.

Eight China cities step up housing tightening - Xinhua Since Friday, the second-tier cities of Xi'an, Chongqing, Nanchang, Nanning, Changsha, Guiyang, Shijiazhuang and Wuhan have tightened housing controls, with most banning home sales within two to three years after purchases. In Shijiazhuang, houses newly bought as of Sunday will be banned from being sold within five years.

Chinese Developers Plunge as Officials Tighten Housing Curbs - Bloomberg A Bloomberg Intelligence index of 22 developers tumbled 7.5 percent as of 1:50 p.m. on Monday, heading for its steepest drop in more than two years and taking some of the air out of valuations for stock market stars such as China Evergrande Group and Sunac China Holdings Ltd., which have climbed fivefold and fourfold, respectively, this year.

Chinese province inspects banks for illegal lending for real estate - sources - Reuters The Shaanxi office of China Banking Regulatory Commission including (CBRC) is targeting six areas of irregularities, including illegal financing for land purchases and real estate development projects, and loans borrowed to fund mortgage downpayments, the sources said.

Does China Play Fair- Economist Cover Story: Even as China’s achievements inspire awe, there is growing concern that the world will be dominated by an economy that does not play fair. Businesses feel threatened. Governments that have seen Brexit and the election of Mr Trump, worry about the effects of job losses and shrinking technological leadership. Yet if the outcome is to be good, they must all think clearly about the real nature of China’s challenge.

China Scrutiny Spurs Developer to Hit ‘Pause’ on Expansion - Bloomberg Country Garden Holdings Co. says it’s hitting the pause button on an international expansion amid Chinese government scrutiny of property acquisitions abroad, and is delaying investing in countries such as India.

As China Piles on Debt, Consumers Seek a Piece of the Action - The New York Times To be clear, most economists consider China’s consumer credit splurge to be a good thing. Chinese families are nowhere near the borrowing levels of spendthrift Americans, whose household debt is equal to more than three-quarters of the annual economic output of the United States. In China, that measure is still less than half.

A Missing Piece in China’s Economy: Consumer Credit Ratings - WSJ Chinese household debt is growing rapidly, outpacing broad credit growth every year since 2013 and reaching 38 trillion yuan ($5.7 trillion) by the end of the second quarter of this year. But household debt remains relatively low by global standards, at about 44% of gross domestic product, and the absence of a widely used standard of creditworthiness is keeping consumer borrowing from growing even faster, hampering access to credit for some 500 million potential borrowers.

China says growth of key debt ratio clearly slowing, stabilizing - Reuters The growth of China’s overall leverage ratio has been clearly slowing and is now stabilizing, the state planner said on Monday, days after S&P downgraded the country’s sovereign debt rating. China will focus on lowering leverage ratios among state-owned firms and winding down of “zombie firms” to reduce leverage ratios and control debt risks, the National Development and Reform Commission said in a statement on its website.

China stock regulator vows crackdown on capital market misbehavior - Reuters In a statement on Friday on its website, the China Securities Regulatory Commission (CSRC) said its chairman, Liu Shiyu made the comments at a recent internal meeting.

ICO Refund Issue Emerges as New Cryptocurrency Flashpoint - Caixin Global With refunds for initial coin offerings (ICOs) now underway, how much investors can recover has become the next flashpoint between them and cryptocurrency crowdfunders. Two weeks after outlawing ICOs, Shanghai authorities on Friday reported that 90% of refunds are complete. But the dust is far from settled. Some investors complained the refund process has been slow, while some took to the street and asked for more money to cover their losses.

Chinese group blocked by Trump announces UK chip-maker buyout | The Guardian Canyon Bridge Capital Partners’ all-cash offer for Imagination showed the buyout fund remained focused on investing in western chip-makers after its $1.3bn (£960m) deal to buy Lattice Semiconductor was blocked over US national security concerns.

China’s biggest steelmaker plans to boost capacity while Beijing seeks cut | South China Morning Post Baowu Steel aims to consolidate position by increasing output as government plans to reduce output take toll on smaller private firms

China puts US on notice over solar panel trade curbs ahead of Trump trip | South China Morning Post Beijing sent a tempered warning to Washington against trade curbs on the weekend after a US agency concluded that imports of Chinese solar panels had hurt two American manufacturers.

China’s Rail Firms Shake Up Personnel - Caixin Global Train-maker CRRC Corp. Ltd. has appointed Sun Yongcai as its new president, promoting him from his role as executive director. Meanwhile, the country’s national railway operator, China Railway Corp., has set up small reform committees in its 18 regional bureaus, a China Railway staffer told Caixin. The national railway operator has also recently completed a reshuffling of high-level personnel.

Politics And Law

天津原市长黄兴国一审被判有期徒刑十二年--今日头条--时政--首页 Comment: Former Acting Tianjin Party Secretary Huang Xingguo gets 12 years for corruption, relatively light sentence in part because he ratted out others, does not say who though

Fugitive Tycoon Guo Wengui Reportedly Dooms Bank Deal With Drunken Antics - Caixin Global Chinese fugitive billionaire Guo Wengui’s attempt to acquire a Japanese bank was dealt a final fatal blow after a limo company sued him and two other businessmen, claiming they had vomited in the vehicle during a drunken spree, an investigative magazine reported. Caixin has learned Guo made a trip to Tokyo in August 2016 and met with two business partners. In January, one of these partners — Capital Partners Securities Co. Ltd. — proposed acquiring the controlling stake in Tokyo-based Shinsei Bank, and Guo showed interest in the possibility, Caixin learned.

Former senior provincial political advisor investigated for graft - Xinhua Liu Shanqiao, former vice chairman of the People's Political Consultative Conference of central China's Hubei Province, is under investigation on suspicion of taking bribes, the Supreme People's Procuratorate (SPP) announced Monday.

All the Presidents Are Men: China Is Getting Worse on Women in Power - WSJ Ahead of China’s 19th Party congress next month, when most positions on the Politburo standing committee will turn over—President Xi and Prime Minister Li Keqiang will stay on—the prospects for change are dim. Women have never made up more than 10% of the party’s Central Committee, from whose ranks the Politburo is drawn, writes Cheng Li, an expert on elite Chinese politics at the Brookings Institution. Only two women serve on the current 25-member Politburo. At least one is set to retire. And, notes Mr. Li, the most important pipeline for female replacements is empty; no woman serves as a party secretary of a province or province-level city.

Xinhua Insight: Anatomy of grassroots CPC cells - Xinhua "Some of my colleagues are surprised to know there is a Party committee within the company," said Murray King, vice president of public affairs for the Shanghai Disney Resort. "The Party committee is a normal part of our business, a normal part of our operations, in fact it is a very helpful part," he said. "It's a source of knowledge and resources, which I think is very valuable for a successful business." "I'm often pleasantly surprised to find some of our most talented people are Party members. I have to give credit to the Party committee because some really good ideas come from the Party committee, and some of our most dedicated employees are Party members," King said.

“习近平在上海”①“上海是党的诞生地,要牢记历史使命”_浦江头条_澎湃新闻-The Paper 在习近平心中,坚定的理想信念是战胜一切艰难险阻的强大精神支柱和力量源泉。他在上海工作的7个月零4天,时时念兹在兹的一件大事,是如何把党的光荣传统发扬好、继承好,将党的建设新的伟大工程建设好、推进好。他多次与上海的干部说,这是一项光荣而神圣的使命。// Comment: Thepaper hagiographies (is that a word?) Xi's time in Shanghai

聚焦少年审判 学者呼吁推进少年司法制度改革_政经频道_财新网 法官称,未成年人刑事审判存在关注被告人而忽视被害人的现象;学者认为,少年司法制度应进行总结反思

Supreme People’s Court gears up for 19th Party Congress | Supreme People's Court Monitor As the days count down to the 19th Party Congress, all Party/government institutions are preparing for it, including the Supreme People’s Court (SPC). On 19 September, the SPC issued an emergency notice (pictured above), calling on the lower courts to strengthening law enforcement work to provide a good judicial environment for the holding of the 19th Party Congress.

Foreign And Defense Affairs

**Nepal dreams of railway linking China to India | China Dialogue**Kathmandu is at the centre of China and India’s dispute over the New Silk Road

China to push for greater cooperation on graft, terrorism at Interpol meeting - Reuters Beijing has tried for many years to enlist the help of foreign countries to arrest and deport back to China citizens it accuses of crimes including corruption and terrorism. The three Beijing-based sources, who are familiar with the planning for the Interpol meeting, said China is likely to make these two areas its focus for the general assembly.

Researcher on board Chinese Vessel medevaced by U.S. Coast Guard The Coast Guard says the man was on the Xue Long, about 15 nautical miles outside of Nome

Russia and China quietly build business bonds - FT $$ “The fact that the first large deal done by a Chinese company . . . is with Rosneft — arguably the closest Russian company to Mr Putin — shows the seriousness of the partnership push.” CEFC will buy the stake from a consortium controlled by mining company Glencore and the Qatar Investment Authority, restructuring a complex and opaque transaction last year that highlighted the difficulties for western groups investing in Russian companies targeted by sanctions.

China, Vietnam pledge to maintain border stability - Ministry of National Defense Military delegations from China and Vietnam attended the fourth high-level border meeting, with the two sides agreeing to maintain border stability and push bilateral ties. The two-day meeting was held in northwest Vietnam's Lai Chau Province and southwest China's Yunnan Province, starting Saturday.

Hit by Chinese Hackers Seeking Industrial Secrets, German Manufacturers Play Defense - WSJ In June 2016, a delegation led by German Chancellor Angela Merkel flew to Beijing for talks on the matter. While Chinese officials led by Premier Li Keqiang told Ms. Merkel that Beijing would protect German firms’ intellectual property in China, they didn’t agree to stop hacking. As Chinese attacks on U.S. companies have eased, Germany has become a bigger target, according to Nigel Inkster, senior adviser to the International Institute for Strategic Studies in London.

China, Singapore reaffirm military ties, but is the deal anything more than symbolic? | South China Morning Post Military sources told the South China Morning Post last week that Singapore might suspend its decades-long Starlight military training agreement with Taiwan, which has long been a thorn in Beijing’s side. Their comments came after Xinhua quoted Lee as telling Xi that the city state opposed Taiwanese independence and supported the one-China policy.

Doklam faceoff: China deployed more, standoff began earlier | The Indian Express Contrary to public perception that the border standoff between India and China at Doklam involved a small number of troops, the Chinese had posted more than 12,000 soldiers, 150 tanks and artillery guns opposite Sikkim at Phari Dzong in Chumbi Valley during the 73-day standoff, a new book has revealed. The book, Securing India The Modi Way: Pathankot, Surgical Strikes and More (Bloomsbury), written by Nitin A Gokhale, also contains Unmanned Aerial Vehicle (UAV) images of the site, which show that the standoff had actually started in the third week of May — it was made public by the Chinese on June 26.

Tech And Media

TV Association Rewrites Script on Big Celebrity Paychecks - Caixin Global In addition to capping actors’ salaries at 40% of a program’s total budget, the association said pay for leading roles shouldn’t exceed 70% of the total pay for all actors. If actors’ salaries exceed the 40% limit of a show’s budget, the program’s producers should provide an explanation to the association and other related industry associations, the group said.

教授:个性化资讯分发平台算法单一 低质量信息点击高|人工智能|新闻|兴趣_新浪科技_新浪网 Comment: People's Daily launches its third recent attack on toutiao and algorithmic, personalized news...can't get a much clearer signal that the propaganda department sees this as a threat to its ability to set the agenda, crackdown increasingly likely

This Startup Is Luring Top Talent With $3 Million Pay Packages - Bloomberg Beijing ByteDance Technology Co. is the brainchild of an entrepreneur named Zhang Yiming. The company is best known for a mobile app called Jinri Toutiao, or Today's Headlines, which aggregates news and videos from hundreds of media outlets. In five years, the app has become one of the most popular news services anywhere, with 120 million daily users.

China pulls Vietnam border war movie from cinema holiday line-up at last minute | South China Morning Post Director Feng Xiaogang’s movie Youth, or Fanghua, was scheduled to be released across China on September 29 in time for the weeklong National Day holiday. But in a brief online statement on Sunday, Feng’s production house said the release date would be postponed as a result of “discussions with the film administration bureau and other relevant parties”.

68 Things You Cannot Say on China’s Internet - The New York Times They were issued by the China Netcasting Services Association, which includes as members more than 600 companies, including the official Xinhua News Agency, the social media giants Sina and Tencent, the dominant search engine Baidu and the news aggregator Jinri Toutiao. David Bandurski, an analyst and editor for the University of Hong Kong’s China Media Project, said the association’s rules created the illusion of industry consensus as the company’s acquiesced to what party officials call “self-discipline.”

As Baidu Retreats, Alibaba and Tencent Battle for O2O Dominance - Caixin Global It wasn’t long ago when Chinese tech entrepreneurs and investors scrambled into the online-to-offline market, pouring in billions of yuan to lure users into mushrooming mobile applications that allow them to hail a taxi, book a trip or order dinner via a few clicks. But fierce competition backed by heavy subsidy spending squeezed out many smaller players, leaving marketplaces to a few deep-pocketed leaders.

Tencent Puts Up Billboard for U.S. Advertisers - Caixin Global The company’s new U.S.-based sales team will target companies that want to reach the large numbers of Chinese tourists traveling to America. Tencent cited a report from the U.S. Travel Association saying Chinese tourists spent an estimated $35 billion in the country last year alone.

北京网信办罚款微博贴吧:对用户发布违规信息未尽到管理义务_10%公司_澎湃新闻-The Paper Comment: Weibo and Baidu Tieba fined for not preventing the dissemination of information in violation of the cybersecurity law

Society, Art, Sports, Culture And History

Video: Six Years Old, 16-Hour Workdays – the Making of a Child Star in China - Caixin Global Yunxi, who goes by her screen name Lara, is one of the hundreds of children searching for stardom who flock to Beijing during summer breaks. A whole industry has sprung up — with talent scouts, acting gurus, promotion teams and directors who charge parents money to cast their children — to search for China’s Shirley Temple. Yunxi’s father says he spent nearly 400,000 yuan ($60,940) in the first half of this year alone on costumes, entry fees to pageants and talent competitions and for producers to sign her up for their TV dramas and music videos.

OlymPicks: A Q&A With the Chinese Billionaire That Brought Hockey to the Mainland | the Beijinger Long before Zhou Yunjie became a billionaire businessman in China’s packaging industry, long before he spearheaded the deals that brought about the National Hockey League’s first big push into mainland China, and long before he met his hero, star player Bobby Orr, he was a scrappy young goalie with enough heart and stamina to stay in the game despite a throbbing injury.

LGBTQ people still being forced to undergo ‘therapy’ - Global Times Clinics advocating conversion therapy are also reportedly prolonging the treatment process to make more money, and are also avoiding notorious forms of treatment such as electro-shock therapy that can be used as evidence in court.

No More Online Anti-Islam Terms Allowed on Weibo - but Discussions Continue Anyway | What's on Weibo Chinese authorities have recently blocked various Islam-related words invented by Chinese netizens. The ban comes after consecutive online controversies on the topic of Chinese Muslims and Islam in China; the tone of the discussions reportedly “undermines ethnic unity.”

Energy, Environment, Science And Health

Nuclear Experts Head to China to Test Experimental Reactors - Bloomberg China National Nuclear Power Co. this month announced a joint venture to build and operate a “traveling wave reactor” in Hebei province, designed by Bellevue, Washington-based TerraPower LLC, whose chairman is Microsoft Corp. founder Bill Gates. The development follows Canada’s SNC-Lavalin, which has agreed to build a new recycled-fuel plant with China National Nuclear Corp. and Shanghai Electric Group, and Oak Ridge National Laboratory, which is working with the Shanghai Institute of Applied Physics on a salt-cooled system.

Agriculture And Rural Issues

China rolls out the red carpet to begin building its first Iowa farm - Des Moines Register China is eager to modernize the operations of its 260 million mostly small-scale farmers, with Iowa held up not only as a model but an ideal: In the words of one Chinese official, Iowa is “the place where the dream for modern farming began.” Iowa, meanwhile, craves ever more access to the Chinese market and its growing middle class.** // Comment: In Hebei**


**One in three Chinese children faces an education apocalypse. An ambitious experiment hopes to save them | Science | AAAS**Surveys by Rozelle's team have found that more than half of eighth graders in poor rural areas in China have IQs below 90, leaving them struggling to keep up with the fast-paced official curriculum. A third or more of rural kids, he says, don't complete junior high. Factoring in the 15% or so of urban kids who fall at the low end of IQ scores, Rozelle makes a stunning forecast: About 400 million future working-age Chinese, he says, "are in danger of becoming cognitively handicapped."

China’s roving students are lured home - FT $$ The Shanghai-based China Europe International Business School (Ceibs) MBA course was ranked 11th best in the world by the Financial Times this year, up from 17th in 2016 and the highest of five Chinese schools in the top 100. It became the first Chinese institution to receive European Foundation for Management Development accreditation in 2004. Now 20 Chinese schools have achieved the standard, according to David Asch, EFMD’s director of quality services. “The west has had a good run with Chinese students for the last 15 to 20 years, but it’s going to come to an end,” Mr Asch says. “The jobs network is key.”

Books And Literature

Welcome to the LARB China Channel – China Channel It is in the spirit of Lu Xun that, on the anniversary of his birthday, we are launching a new digest for anyone interested in China, the Los Angeles Review of Books China Channel, a “magazine with a magazine” thanks to a seed grant from the Henry Luce Foundation and further support from the UCI Long US-China Institute, under the same umbrella as LARB‘s other independent channels.


北京8月份PM2.5值创新低 - 国内 - 新京报网 Beijing sees lowest average August PMI since 2013


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Thursday, September 21, 2017

More North Korea Sanctions; Overseas Influence Work; Hidden Debt And A Downgrade-Sinocism-09.21.17

The Essential Eight

1. Trump Announces More North Korea Sanctions; Beijing Orders Banks To Halt DPRK Business

Trump announces new economic sanctions targeting North Korea over nuclear program - The Washington Post:

President Trump announced an executive order Thursday to grant additional authority to the Treasury Department to enforce economic sanctions on North Korea and foreign companies and individuals that do business with the rogue nation in Northeast Asia.

The president also said that Chinese President Xi Jinping had ordered Chinese banks to cease conducting business with North Korean entities. Trump called the move "very bold" and "somewhat unexpected," and he praised Xi.

China's central bank tells banks to stop doing business with North Korea: sources - Reuters:

The document asked banks to fully implement United Nations sanctions against North Korea and warned of economic losses and reputational risks to banks that did not do so. Chinese banks received the document on Monday, the sources said.

“At present, management of North Korea-related business has become an issue of national-level politics and national security,” according to the document viewed by Reuters.

Comment: So US pressure is having an effect. If the US decides to ratchet up secondary sanctions another notch expect sanctions and/or penalties against a large PRC bank like China Merchants, but not one of the big four.

South Korea approves aid to North Korea, North calls Trump 'barking dog' - Reuters:

The decision to send aid to North Korea was not popular in South Korea, hitting President Moon Jae-in’s approval rating. It also raised concerns in Japan and the United States, and followed new U.N. sanctions against North Korea over its sixth nuclear test earlier this month.

Opinion: Divisive, Fragmented Policy Toward North Korea Fuels Spiraling Tensions - Caixin Global:

Beijing needs to reconsider its quasi-alliance commitment toward Pyongyang, unless North Korea stops its nuclear weapons program and other provocative actions at the cost of China’s vital security interests. Beijing’s message toward Washington should also be clear and stern: China will intervene, including by military means, if the United States and its allies attempt any pre-emptive military action against North Korea for regime change. Innovative ideas should be encouraged, including the proposal of a joint security assurance from Beijing, Moscow and Washington to Pyongyang in return for freezing its nuclear weapons program.-Chen Dongxiao is president of the Shanghai Institutes for International Studies.

2. Overseas Influence Work

Top political advisor stresses uniting overseas Chinese - Xinhua:

Yu Zhengsheng, chairman of the National Committee of the Chinese People's Political Consultative Conference, made the remarks while meeting with members of the Fourth Executive Council of China Overseas Friendship Association (COFA), which was celebrating its 20th anniversary in Beijing.

Yu spoke highly of the association's role in propelling China's reform, establishing close ties with overseas Chinese, and safeguarding state sovereignty, security and development interest over the past two decades.

China Focus: China works hard to communicate its message - Xinhua Xi has told media groups to turn up their voices on the global stage, telling stories about the new, modern China, while developing flagship media groups with a strong global influence.

On Dec. 31, 2016, the China Global Television Network was launched, with six TV channels, three overseas channels, a video content provider and a cluster of services on new media platforms. State media outlets were established in almost all key regions and major cities across the globe.

The Scholar's Stage: Chinese Influence and Intelligence Activities: A Few Notes:

If your take-away from all of this is that we can’t trust the Chinese among us, you are thinking about it wrong. Chinese Americans, Chinese Australians, Chinese Kiwis, et. al, are not the enemy. They are the victims. The Party has made clear that it believes any man or woman of Chinese blood, no matter their citizenship or locale, is their ward. The Party devotes an incredible amount of resources trying to shape the beliefs and behaviors of this diaspora. This includes extending its system of surveillance, censorship, and coercion into the heart of foreign countries. We ignore this because most of the threats and propaganda the Party spreads about are all spread about in the Chinese language

Emboldened China Wields Its Laws to Silence Critics From Abroad - The New York Times:

Mr. Caster noted that Interpol’s president, Meng Hongwei, is a veteran of China’s state security apparatus. Human Rights Watch recently reported that China was blocking the work of United Nations agencies investigating rights issues and preventing critics from testifying at hearings

Revealed: China's network of influence in New Zealand - NZ Herald:

The business ties of ex-Prime Minister Sir John Key also come in for scrutiny, with Brady noting both his recent appointment to help media company Comcast develop business projects in China, as well as the recent sale of his Parnell mansion.

"The property was sold for $20m, well above market rates for the area, to an undisclosed Chinese buyer. John Key refused to answer any questions about the transaction”.

3. Chinese Minority Report Starting In Minority Regions, How Do You Say Panopticon in Tibetan And Uighur?

Chen Quanguo: The Strongman Behind Beijing’s Securitization Strategy in Tibet and Xinjiang | Jamestown:

Over the last year, Chen Quanguo (陈全国) has dramatically increased the police presence in Xinjiang by advertising over 90,000 new police and security-related positions. [1] This soldier-turned-politician is little known outside of China, but within China he has gained a reputation as an ethnic policy innovator, pioneering a range of new methods for securing Chinese Communist Party (CCP) rule over Uyghurs, Tibetans and other ethnic minorities in western China...

This dense network of surveillance is at the heart of what Party officials call “grid-style social management” (社会网格化管理), a practice that segments urban communities into geometric zones so that security staff can systematically observe all activities with the aid of new technologies (ChinaChange, August 8, 2013; China Brief, August 17). The system relies on big data analytics, connecting a network of CCTV cameras with police databases to achieve enhanced, even automated surveillance. Grid management was first trialed in Beijing in 2004 (Chinese Academy of Social Sciences, October 28, 2013).

China security chief calls for greater use of AI to predict terrorism, social unrest | South China Morning Post:

Meng said security forces should study patterns that might be spotted in cases of terrorist attacks and public security incidents and build a data analysis model to improve the authorities’ ability to predict and stop such events taking place.

The idea has echoes of the Steven Spielberg’s science fiction thriller Minority Report, in which the authorities use technology and genetic mutation to predict when and where crimes will take place.

Meng said the security services should break down any barriers in data sharing to enable smooth integration of various systems.

He also called for renewed efforts to integrate all the footage from surveillance cameras around the country.

Ministry of Public Security Party Committee in latest Qiushi on advancing "Safe China" construction-推进平安中国建设 确保人民群众安全 - 求是- 公安部党委

Follow The Money: The surveillance industrial complex is growing exponentially. Should US investors in venture capital and PE funds investing in China be worried about a backlash if some of their money may be going into Chinese firms building this technology?

4. Local Governments Hiding Debt, S&P Downgrades China

Why Chinese Local Governments Are Issuing So Few Bonds - MacroPolo:

Shifting political incentives led to some unintended consequences. Instead of driving officials to exercise greater fiscal prudence, they have instead responded by, in many apparent cases, fostering the appearance of tightening their belts without meaningfully doing so. That is because economic growth—which has to be supported by more borrowing—has been retained as the single most important factor governing officials’ promotion prospects.

The results are, not surprisingly, rather different from what Beijing intended: local leaders have tried to prove that they are embracing an agenda of fiscal prudence, even going beyond what Beijing has asked of them, while continuing to stimulate growth by raising debt surreptitiously.

S&P Cuts China’s Credit Rating, Citing Risk From Debt Growth - Bloomberg:

The downgrade, the second by a major ratings company this year, represents ebbing international confidence that China can strike a balance between maintaining economic growth and cleaning up its financial sector. The move may also be uncomfortable for Communist Party officials, who are just weeks away from their twice-a-decade leadership reshuffle.

5. Pollution Census, Environmental Capacity Alert System

Comment: Expect environmental work to get big play in Xi's upcoming Party Congress Work Report, even though progress is very uneven.

China plans 2nd national census of pollution sources - Xinhua:

Seven years after the results of the first national pollution census, the government launched a second survey to investigate the scale, structure and distribution of pollution sources.

The survey will cover industrial, agricultural and residential pollution.

China aims to finish the survey in 2018, releasing the results in 2019.


China establishes environmental-capacity alert system - Xinhua:

Regions with serious environmental and resource capacity overloading will not be allowed to start new projects, according to a document issued by the general offices of the Communist Party of China Central Committee and the State Council on Sept 20.

中共中央办公厅 国务院办公厅印发《关于深化环境监测改革提高环境监测数据质量的意见》

China’s polluting factories run around the clock while villagers are told to cut household emissions | South China Morning Post:

“Look at how much smoke we are making here, and look at Handan Steel,” Liu said, as the factory’s chimneys behind her belched columns of white smoke. “What they produce every day equals what we produce in a year.”

As part of its battle against smog, China has embarked on an ambitious plan to cut pollution generated by households, banning the use of coal-fired stoves and heating units.

But replacing coal with natural gas or electricity has imposed an unbearable burden on many families, especially in rural areas where people rely on cheap coal to endure the freezing winter.

Beijing government pulls winter construction ban from website - Reuters:

It is unclear if the move means the prohibition is no longer in place, with an official at the Beijing Municipal Commission of Housing and Urban-Rural Development who gave his name as Yu saying the document had been pulled from the website due to misunderstandings over the rules in media reports. He declined to give further details.

6. Environmental Lawsuit Against Meal Delivery Services

A Lesson for Tech Giants: With Great Power Comes Great Responsibility - WSJ:

China’s three main online meal-delivery services are in the crosshairs of public opinion over perceptions they’re not socially responsible. A nonprofit group is suing the companies—, Baidu Waimai and Meituan Dianping—for generating huge amounts of waste that it alleges constitutes environmental harm. A Beijing court agreed early this month to hear the case.

7. More Details on Xiongan Plans

Xiongan Cheap Housing Plan Aims to Curtail Speculation - Caixin Global:

The Xiongan local authority plans to boost the construction of affordable rental properties for newcomers, according to an article published on the area’s official WeChat account Tuesday. The authority will also establish a point-based system supported by big-data technology to determine which migrants will be qualified to purchase these homes...

The article also said that Xiongan will ditch a common local government practice known as “land revenue,” which many provincial and county-level authorities have long used to accelerate urban development. In this practice, governments buy tracts of land owned by farmers at a low price and then sell them to real estate developers for higher prices. This method has been a ubiquitous feature of China’s rapid urbanization for several years.

8. Astroturfing Academics Rewarded

Chinese universities encourage professors, students to post online content that promotes ‘socialist values’ | South China Morning Post:

China’s top universities are encouraging academics and students to write online articles promoting socialist values, with some offering authors the same academic credits they would get for papers published in journals...

Content that is posted on the websites and social media platforms of party mouthpieces such as People’s Daily and Xinhua would receive the most credits, the notice said.

“Many professors object to it, saying they do not want to be used for politics,” a PhD student at the university told the South China Morning Post.

Business, Economy And Trade

Trump’s Threats Loom as China Weighs Opening to Wall Street, Tesla - Bloomberg “If China continues to maintain the limits on foreign institutions, it could push Trump to an extreme and make the relationship worse,” said Xia Chun, a visiting associate professor at the University of Hong Kong. “The reform could serve multiple purposes. It gives a little pressure to domestic markets and shows a positive change to the outside.”

EU Chamber warns China: Open economy faster or risk backlash - AP The European Union Chamber of Commerce said in a report that Beijing is backtracking in some areas, including by imposing new restrictions on food imports, express delivery and legal services. It proposed hundreds of possible changes to open the state-dominated economy wider or simplify rules in fields from cosmetics to medical devices.

China hits back at U.S. over trade, says unilateralism is "unprecedented challenge" - Reuters Ministry of Commerce spokesman Gao Feng also said that foreign and domestic firms are treated equally in China and that foreign firms should not have concerns about investing in China.

Banking regulators tighten control on consumption loans --China Economic Net The banking regulatory unit of the People's Bank of China, China's central bank, released a series of circulars in the past week that banks need to examine the use of personal consumption loans above 200,000 yuan ($30,400) with residential properties as mortgages.

China's Most Indebted Developer Sunac Faces Lender Scrutiny - Bloomberg Quint China Huarong Asset Management Co., a state-owned entity whose businesses include lending, asked units to temporarily suspend new project financing to Sunac China Holdings Ltd., according to an internal email seen by Bloomberg.

Chinese Developers' Fat of the Land - Bloomberg Gadfly Evergrande, Country Garden and Sunac were smart. By hoarding sites, they can not only support future growth but also benefit from price appreciation. The three now own roughly half of the total territory controlled by the 18 developers. By comparison, the reserves held by China Overseas Land and China Resources Land haven't moved much, and their share-price gains have lagged.

China's Dangerous House Price Boom Is Spreading - Bloomberg Beijing and Shanghai are now well known for their ballooning house prices -- double-digit gains last year prompted more regulatory tightening. But the the risk factors that could decide the fate of China’s property boom can be found well beyond the capital and biggest city.

US judge dismisses claim that sparked race to claim fugitive Guo Wengui’s luxury flat | South China Morning Post “New York has no interest in deciding a dispute between a Hong Kong investment fund and a citizen of the People’s Republic of China with respect to a transaction covered by Hong Kong law relating to real estate in the PRC, notwithstanding that the defendant citizen of the PRC presently lives in New York,” ruled Justice Barry Ostrager of the Supreme Court of the State of New York.

Manafort Working on Kurdish Referendum Opposed by U.S. - The New York Times Mr. Manafort participated in a May meeting in New York about a plan under which an investment fund linked to the Chinese government-owned China Development Bank would invest $30 billion in Puerto Rico through the bond debt owed by the island’s government, and possibly through investments in its critical infrastructure. And a spokesman for the Ecuadorean government, which has accepted billions of dollars in loans from the China Development Bank, said that Mr. Manafort met earlier this year with Lenín Moreno, who subsequently was elected president, to discuss possible investment opportunities.

China to extend transition phase for cross-border retail - Reuters Planned new rules will broadly increase taxes and regulations on products sold via cross-border channels, but Chinese authorities will extend a transition phase for implementation by a year, China’s ruling State Council said late on Wednesday, giving retailers more time to prepare and adapt.

Cream of China’s Dairy Firms Eyes Australian Milk Giant - Caixin Global The dairy firm manager said that one of the difficult elements of the buyout stems from a co-op structural reform that Murray Goulburn carried out in 2013, when it began requiring all suppliers to own at least 500 shares of the company. As a result, any bidder needs the support of more than 90% of suppliers. Another obstacle to a takeover by an offshore group, such as a Chinese one, would be scrutiny from the Australian and Chinese authorities, especially at a time when Beijing is restricting cash outflows.

China’s bitcoin miners in limbo after Beijing shuts down exchanges | South China Morning Post If Beijing does decide to cut off the bitcoin network in China, it could make it difficult for mining pools to sync their data on blockchain with the rest of the world, according to Jiang Jiazhi, a product manager at Bitmain, which operates a full supply chain of mining – from machines to mining contracts – in China. “It will eventually hit the bitcoin mining business,” Jiang said.

The graphite fix: Inside China's newest commodity addiction - Reuters Steelmakers typically buy graphite electrodes on yearly contracts, but now suppliers are only quoting prices for six months, the Asian producer said. “With prices rising, nobody wants to commit to today’s prices for a year,” he said. In China, nearly 300,000 tonnes of graphite electrode manufacturing capacity has been shuttered since the second half of 2016 due to environmental concerns, CRU’s Brooks said in a report.

Tencent to Buy 5% Stake in Investment Bank CICC - Caixin Global Chinese tech giant Tencent Holdings agreed to buy an almost 5% stake in China’s leading investment bank, China International Capital Corp. (CICC), creating a partnership between two of the country’s tech and finance majors, according to a regulatory filing Wednesday by Hong Kong-listed CICC.

市场准入负面清单制将全面实施 _ 经济参考网 _ 新华社《经济参考报》官方网站 我国将于2018年1月1日起全面实施市场准入负面清单制度,各方准备工作正在全面提速。《经济参考报》记者获悉,目前国家确定的第一批试点已进入总结阶段,国务院发展研究中心日前分别前往广东和福建等地区开展评估调研,第二批试点也在陆续上报试点总体方案,将抓紧推进完善法规及规章体系、健全市场准入机制等改革任务。

Politics And Law

坚持党的基本路线  推动社会全面进步--理论-人民网 (深入学习贯彻习近平同志“7·26”重要讲话精神)Comment: Jia Gaojian, head of the central translation and compilation bureau, page 7 9.21.17 People’s Daily

Party committees study Mao’s books ahead of 19th congress - Global Times CPC committees in several provinces and municipalities, including East China's Fujian, South China's Hainan and Guangdong, Southwest China's Sichuan and North China's Tianjing are studying On Contradiction and On Practice, which were written by Mao, new China's founding father, in 1937 after the War of Resistance against Japanese Aggression began in 1931, Shanghai-based Jiefang Daily reported Wednesday. This year marks the 80th anniversary of the publication of these two books.

China top graft buster says corruption fight 'world class hard' - Reuters Meeting Singapore Prime Minister Lee Hsien Loong at the central leadership’s Zhongnanhai compound in Beijing, Wang said the party’s anti-corruption campaign and efforts to supervise itself had been highly effective. “Carrying out an operation on yourself to cure an illness is world class hard,” the commission cited Wang as saying, in a statement late on Wednesday

Former aide to ousted Communist Party leader to be removed from home as party congress approaches | Hong Kong Free Press HKFP Bao Tong, the former top adviser to ousted party chief Zhao Ziyang, has said that he will be taken from his home and sent on “vacation” by police as the 19th party congress approaches.

China lifts 10-year travel ban on feminist activist - AFP Wu Rongrong plans to fly to Hong Kong on Sunday to pursue a master's degree in law in the semi-autonomous city, which has a separate legal system and border controls.

China has one of the lowest murder rates in the world - People's Daily Online "The homicide rate in China in 2016 was 0.62 per 100,000 residents, better than most countries in the world," said Meng Jianzhu, head of the Commission for Political and Legal Affairs of the Communist Party of China Central Committee, during a national conference in Beijing.

Police in China's Guangdong Target Two Current Affairs Commentators- RFA Authorities in the southern Chinese province of Guangdong have stepped up political pressure on two prominent current affairs commentators amid a nationwide crackdown on dissent ahead of a five-yearly congress of the ruling Chinese Communist Party.

Foreign And Defense Affairs

Defence bans on Chinese drones - The Australian US officials last month ordered army personnel to cease the use of Da-Jiang Innovations Technology (DJI) drones, citing “cyber vulnerabilities”. US Army staff were directed to un-install all DJI applications and remove batteries and media technology from their devices. The Australian can reveal the ADF suspended the use of “all commercial off-the-shelf unmanned aerial systems” following a US Army report in May, which examined the threats and “user vulnerabilities” associated with the drones.

Zheng Zeguang - Vice Minister of Foreign Affairs Comment: Is he about to replace Cui Tiankai as Ambassador to the US

Forecasting China’s Largest Ever Turnover of Military Elite at the 19th Party Congress - CHINA US Focus it appears that only 17 percent (seven out of 41) of military leaders with full membership on the 18th Central Committee will retain their seats. In other words, about 83 percent of the military representatives who are full members of the 19th Central Committee will be new, assuming the military maintains the same quota of full members as it did for the 18th Central Committee. This would constitute the largest-ever turnover of military elite in the history of the People’s Republic of China (PRC).

Beijing Adopts New Tactic for S. China Sea Claims Ma, the Foreign Ministry official, announced during the meetings in Boston on Aug. 28 and 29 that China is asserting sovereignty over the Four Sha through several legal claims. He stated the area is China's historical territorial waters and also part of China's 200-mile Exclusive Economic Zone that defines adjacent zones as sovereign territory. Beijing also claims ownership by asserting the Four Sha are part of China's extended continental shelf. U.S. officials attending the session expressed surprise at the new Chinese ploy to seek control over the sea as something not discussed before.

China's showing off its new helicopters | Popular Science At the 4th China Helicopter Exposition, an airshow in Tianjin, the nation flaunted its latest in aviation tech. Here are the highlights

China Opens Highway To Nepal Via Tibet, Ready For Military Use If Needed China has been stepping efforts to improve road connectivity between Tibet and Nepal while speeding up plans to build a railway line connecting to Nepal's border after KP Sharma Oli, pro-China former Nepalese Prime Minister, signed a Transit Trade Treaty with Beijing last year during his tenure.

PLA Navy gets new nuclear submarine - People's Daily Online A new nuclear submarine has been turned over to the People's Liberation Army Navy, one of the largest State-owned naval shipbuilding enterprises revealed on Tuesday, but experts believe that this submarine is not the most advanced Type 096, which is China's next generation strategic nuclear submarine.

Risky Business, Chinese Style - MacroPolo Do China’s government and firm-level choices reflect a political agenda, national security goals, a desire to mitigate economic risks, or perhaps a combination of all three? My answer is that we are seeing the sprouts of a more sophisticated Chinese approach to managing—and then balancing—multiple forms of investment risk: geopolitical risks, political and physical security risks, and, of course, pure economic risks.

Hong Kong, Macao And Taiwan

Former Hong Kong student leader escapes jail sentence for campus protest - Reuters Billy Fung, 23, who helped lead a protest last year by about 200 students seeking talks over the governance structure of the University of Hong Kong (HKU), was given 240 hours of community service for disorderly conduct in a public place, criminal damage and attempted forcible entry.

Taiwan suspends oil exports to North Korea, imports of clothing - Reuters Taiwan has suspended refined oil and LNG exports to North Korea, as well as clothing and textile imports, to comply with United Nations resolutions, a largely symbolic move by the island to show it is a responsible member of the international community.

Tech And Media

Director of Gangster Movie on Trial for Threatening Promoter - Sixth Tone Before “The Choice,” a movie about Shanghai’s World War II-era underworld, ever made it onto the silver screen, its director was accused of dabbling in the gangster life himself. On Monday, director Jiang and three other employees from the film’s production company stood trial in Beijing’s Chaoyang District court, reported The Beijing News. Prosecutors have charged the four with “picking quarrels” on the suspicion that they assaulted and threatened employees of a promotion company to get them to buy the rights to their film.

人民网三评算法推荐:警惕算法走向创新的反面--舆情频道--人民网 不少网友有如下体会:今日头条可能是新闻客户端中信息最全、涵盖范围最广,但也恰恰是内容最杂最乱的手机APP,你可以从中读到新闻,也能看视频、直播,还能参与问答,还有众多的自媒体账号。同时,今日头条还能通过技术,从其他信息平台抓取用户感兴趣的内容,直接“为我所用”,从而达到“以一当十”的效果。

Baidu Revs Up Autonomous Driving Project With $1.5 Billion Fund - Caixin Global The company discussed the new fund as it launched the official 1.5 version of its Apollo platform, which includes a wide range of functions aimed at helping automakers and related companies develop autonomous driving technologies. Baidu rolled out the first version of the platform earlier this year, which includes hardware and software tools for developers, as well as supporting cloud services.

College sparks debate with Internet celebrity course - ECNS The Chongqing Institute of Engineering is now cooperating with a local communications firm to train students on how to make live video streaming a hit. It has attracted 19 students, mainly from those majoring in e-commerce and marketing.

Society, Art, Sports, Culture And History

Peak Capitalism: Why Mountaineering Is a Fad for China’s Rich Hu’s anecdotes about fellow amateur climbers on Muztagh Ata reveal how casual enthusiasts obsess over summiting mountains at the expense of taking pleasure in the country’s pristine slopes. Many see safety protocol as optional: One wealthy businessman hired four Sherpas to accompany him to the top of the mountain and breathed with the aid of an oxygen tank throughout the trek. At the summit, he discovered that his oxygen supply had run out, so he had the Sherpas to carry him all the way back down to base camp, tipping them 10,000 yuan each. //  Comment: And Arc'teryx clothes are a fashion item in China now

Energy, Environment, Science And Health

Europe is Designing a New Particle Collider to Take On China - Bloomberg Chinese scientists would like to build a electron-positron circular collider twice the size of the LHC, which smashes protons together. After building this initial accelerator, China would eventually expand it into an even bigger proton collider. But initial plans to start construction in 2021 suffered a setback when the Chinese government opted not to fund the collider in its 2016 five-year plan. The research team will now to need to wait until 2020 to apply again.

China builds world-class astronomical base in Tibet - People's Daily Online Chinese scientists are building a world-class observatory base at an altitude above 5,000 meters at Ngari, in the west of China's Tibet Autonomous Region. They have launched a project to detect primary gravitational waves there. They also plan to conduct high-precision detection of cosmic rays and build China's largest optical telescope. // Comment: I was in Ngari Prefecture in 2014. The night skies are unbelievable

Food And Travel

Bullet Trains Take Aim at Short-Haul Flights, As Longer Routes Stay Out of Range - Caixin Global Thursday, China’s rail operator increased the maximum speed to 350 kph (217 mph) for some trains running between Beijing and Shanghai. The speed bump cut the time it takes to travel between the two cities to as little as four and a half hours.

China's Millennials Are Driving World Travel Growth - Bloomberg "China, led by younger adults, has become vital to the global travel market's growth," according to Bloomberg Intelligence analysts Brian Egger and Margaret Huang, citing industry tracker Phocuswright Inc. “As China's travel market takes off, all eyes should be on the country's roughly 400 million millennials, who will drive spending on airfare, hotels, theme parks, casinos and cruises.”

Books And Literature

Meet LARB China Channel Team: Academic Editor Eileen Cheng-yin Chow This is the fifth in our BLARB series made up of interviews with some of the people who will be playing key roles in the soon-to-launch LARB China Channel. This week’s Q&A is with Eileen Cheng-yin Chow, who has, like some other interviewees, worked as both a writer and a translator—in her case, in one very high profile case, also as a co-translator, of the bestselling Yu Hua novel Brothers. She also has two institutional homes, which I’ll ask her about, one at Duke and another in Taipei.


Beijing unveils joint ownership housing scheme - Xinhua According to a document issued by the city's housing authorities, individual buyers will be able to buy a share in such homes and still have the full right of use. The policy has several restrictions. Buyers and their families cannot already own homes in their name. They should have no records of home transfers. Single people making purchases must be at least 30 years old. And a family can only apply for one home. The buyers enjoy equal rights in household registration and children's schooling as other home owners.

Beijing mulls banning fireworks in city proper - Xinhua The Beijing municipal legislature is discussing amending its fireworks management regulations to ban fireworks all year long in light of the city's heavy air pollution and casualties caused by fireworks during festivals.

Beijing may hit negative population curve this year - ECNS With a population of 21.7 million, Beijing is likely to see a turning point in its population numbers in 2017, with a possible drop in residents amid transformation, said a report. The Blue Book of Social Work in Beijing jointly complied by Beijing University of Technology, Municipal Committee of Social Work and Social Sciences Academic Press found the city had a population of 21.7 million in 2016, a yearly growth of 2.4 percent.

Jobs And Events

CRS Job Announcement-DC The Congressional Research Service (CRS) seeks an Analyst in Asian Security Affairs to join its Foreign Affairs, Defense and Trade Division (FDT).

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Wednesday, September 20, 2017

The Sinocism China Newsletter 09.20.17

North Korea, Javanka, Social Management

I had a meeting early today I could not get out of so today's issue is very quick and dirty. Hoping you all agree something is better than nothing, should be back to better quality Thursday. Thanks for reading.

The Essential Eight

1. Trump Doubles Down On North Korea Threats, Some Chinese Intellectuals Now Mocking Him As Clueless

With Combative Style and Epithets, Trump Takes America First to the U.N. - The New York Times:

The president’s tone carried real-world implications for the future of the United Nations and the escalating confrontations with international outliers. In the space of 42 minutes, he upended decades of rhetorical support by the United States for the collective philosophy of the United Nations as he defended his America First policy. He repeatedly extolled “sovereignty” in a setting where the term traditionally has been brandished by nations like Russia, China, Iran and North Korea to deflect criticism.

Full text: Trump's 2017 U.N. speech transcript - POLITICO Two mentions of China:

We must reject threats to sovereignty, from the Ukraine to the South China Sea..

The United Nations Security Council recently held two unanimous 15-0 votes adopting hard-hitting resolutions against North Korea, and I want to thank China and Russia for joining the vote to impose sanctions, along with all of the other members of the Security Council.

Trump pulls punches with China by avoiding criticism over North Korea nuclear crisis in UN speech | South China Morning Post:

Trump avoided naming Beijing as an enabler for what his administration considers to be the most pressing global security threat. The same went for other problems including bilateral trade and investment. Trump mentioned China specifically only to thank the country’s leaders for their cooperation on North Korea

Why China Won’t Pressure North Korea as Much as Trump Wants | The New Yorker - Evan Osnos:

Trump is fervently seeking China’s coöperation, but, ironically, his rhetoric and aggression may be putting that further out of reach. On Sunday, Trump mocked Kim as the “Rocket Man.” Members of his Administration have repeated their openness to “military options,” despite projections that air strikes, or other attempts at targeted attacks, could spark a wider war. Chinese intellectuals have taken to joking that “Telangpu”—which is one of the Chinese pronunciations of Trump’s name—sounds like “te meipu,” which means clueless or lacking a plan. In recent months, Trump has alternately praised China and threatened it with a trade war. “I don’t understand Trump,” Shen, the historian, told me. “One day he is saying something good about Xi Jinping and the next he is criticizing him. Trump is becoming more and more of a problem. China is becoming more and more stable.”

Chinese universities ‘limiting admission of North Korean students’ as nuclear crisis escalates | South China Morning Post

South Korea’s Leader Will Be Odd Man Out in Meeting With Trump and Shinzo Abe - The New York Times.

China to Trump: That speech on North Korea was really unhelpful - The Washington Post

2. The Chinese Still Think Javanka Are Useful

Has China overplayed the Kushner card in dealing with the White House? | South China Morning Post:

Ely Ratner, a China expert at the Council on Foreign Relations, went further, saying it could do long-term damage to bilateral ties. 

“Xi Jinping’s decision to base US-China ties on ... family relations has done permanent damage to the relationship. It’s an incredible insult to the many people who have spent decades building the relationship,” he said. 

Comment: But that insult comes more from Trump and his theory of governance than from the Chinese side. The Chinese would be negligent not to try to work the people who have the President's ear.

3. Xi Praises Public Security Workers For Social Governance Work

Commentary: Better social governance ensures building of prosperous society - Xinhua:

When meeting representatives from the comprehensive management of public security sector on Tuesday, President Xi Jinping asked for increased efforts to improve social governance featuring socialism with Chinese characteristics to ensure that people lead prosperous lives, society remains orderly and the country enjoys long-term peace and stability.

Xi stressed that development and stability are the absolute principles, and should both be dealt with by strong hands. Xi also noted the importance of preventing and controlling major risks through the leadership of the Communist Party of China (CPC).

Tuesday CCTV Evening News top 9 minutes on the meeting- 习近平在会见全国社会治安综合治理表彰大会代表时强调 坚持走中国特色社会主义社会治理之路 确保人民安居乐业社会安定有序

China Focus: Xi stresses prevention, control of major risks - Xinhua:

Surveys show that the public's sense of security has improved in the past few years with their satisfaction index rising to 91.99 percent in 2016 from 87.55 percent in 2012.

Police nationwide held campaigns against terrorism, telecom fraud, underground banks, personal information infringement and crimes related to guns and drugs, among others.

China has also made use of Internet technology in its social governance.

Here is one small example of that use of Internet tech in Shanghai:

Shanghai police turn to facial recognition software to catch misbehaving cyclists | South China Morning Post:

One “electronic police” surveillance unit set up on a major Shanghai road at the end of August has already helped identify more than 30 rogue cyclists, according to an unnamed traffic police source quoted in on Wednesday.

The facial recognition technology can similarly be used to identify pedestrian jaywalkers.

Meng Jianzhu's comments at the meeting- 弘扬优良传统 坚持改革创新努力建设更高水平的平安中国--法制网

4. More Lawyers Under Investigation

China: Justice Ministry Pressures Law Firms | Human Rights Watch Since early September 2017, officials from the Beijing, Guangdong, Guangxi, Henan, Hunan, and Yunnan Bureaus of Justice, along with government-controlled local All-China Lawyers Associations and police, began what they call “comprehensive evaluations” or “research” into at least seven law firms. The precise scope of these investigations varies. Lawyers told Human Rights Watch that in some cases the officials came for “chats” asking about the management of the firm, the number of criminal cases they have undertaken, their management, and how much they charge. In one case, a lawyer said officials asked to examine all his contracts and receipts. Officials told the director of a Beijing-based firm that they plan to investigate their “lawyers’ online speech,” among other issues. At a Guangdong firm, officials investigated only three out of over a hundred lawyers; at a Beijing firm, officials said they plan to speak individually to all 20 lawyers at the company.

5. Genetic Mapping Is Easier When The Politicians Believe In Science And There Are Few Privacy Restrictions

China Rushes to Surpass U.S. in Decoding Citizens’ Genes - WSJ:

China’s President Xi Jinping has made such scientific innovation a centerpiece of his national goals. In this case, scientists at state-run Sichuan University in Chengdu are part of a nationwide plan to decode the genetic makeup of at least one million citizens. The multibillion-dollar program is designed to catapult China to the forefront of a field now dominated by the West.

6. The "Most Beautiful Library" Turns Out To Be Rotten At Its Core

China’s ‘most beautiful’ library ordered to shut over claims it provided pirated material and obscene content | South China Morning Post:

Readers have complained recently online that the collection in Liyuan Bookhouse in suburban Beijing largely consisted of pirated books, which included printing errors, incomplete translations, forged publisher details and “uncensored and elaborated erotic descriptions”.

Images of some of the allegedly explicit material were shared online.

The National Office Against Pornography and Illegal Publications ordered the library to suspend business temporarily on Tuesday after sending a team of law enforcement officials to conduct an on-the-spot inspection, The Beijing News reported.

“最美图书馆”陷盗版书风波停业 负责人表示道歉

7. Fake News Ends Dutch Reporter's China Reporting Career

Dutch Reporter Out After Investigation Confirms Irregularities - Sixth Tone:

NRC’s editor-in-chief, Peter Vandermeersch, initially defended Garschagen and said Zhang was trying to drag the paper’s name through the mud. But in an article Wednesday, Vandermeersch said that an internal investigation into the accusations had led the paper’s editorial board to conclude that it could not guarantee that some of the correspondent’s articles were based on Garschagen’s own observations.

Garschagen, the article said, had mixed together anecdotes, combined interviewees into one nonexistent person, attributed quotes to the wrong people, and used reporting from U.S. news outlet National Public Radio without proper attribution.

8. Retaliation Against UCSD For Dalai Lama Speech

China is retaliating against the University of California, San Diego for inviting the Dalai Lama to speak at commencement — Quartz:

A branch of the Chinese government has barred Chinese scholars from receiving state funding to study at the University of California, San Diego, according to people at the school. The freeze highlights how Beijing is steadily placing pressure on overseas universities to suppress viewpoints that run counter to Communist Party orthodoxy.

AnchorBusiness, Economy And Trade

China's August Reserves | Council on Foreign Relations  The PBOC could have used the reemergence of appreciation pressure to rebuild reserves, rather than to loosen controls. The fact that it didn’t suggests something about the PBOC’s policy goals. Among other things, it suggest the PBOC doesn’t think it needs more than $3 trillion in reserves. I agree. The three trillion number came from the heavy weight the IMF’s new reserve metric placed on local currency deposits if a country has a fixed exchange rate and an open capital account. The IMF’s China team, incidentally, also now recognizes—see paragraph 44 of its latest staff report—that the reserve metric doesn’t really fit China.

CEO Catches Stranger After Hours, Prompting Espionage Charges - WSJ “At one point he mentioned that he was here to do business with the CEO, not seeming to realize he was looking at the CEO,” Dr. Straface said. Dr. Straface stepped outside the conference room and called the police, who arrested Mr. Liu on trespassing charges and also summoned the Federal Bureau of Investigation, which sent agents that night, according to a police report. A bureau special agent assigned to a squad specializing in counterintelligence matters has investigated the Aug. 28 incident, according to an affidavit filed with the U.S. District Court in Boston.

Dockless bike-share companies race to Washington - The Washington Post “Everything is done through the app on your mobile phone so it is a convenient experience — and seamless,” said Hu Weiwei, founder of Mobike, one of China’s top dockless bike-sharing start-ups.

China Announces Trade Secrets Crackdown to Assure Investors - The New York Times The four-month campaign will attack theft of foreign trade secrets and violations of patents, copyrights and trademarks, according to a Ministry of Commerce announcement this month. It says the goal is to "increase foreign investment."

Toshiba says seals $18 billion deal to sell chip unit to Bain Capital group Mortgage lending rates that are 5 percent to 10 percent higher than the benchmark lending rate have become “a mainstream phenomenon” in Beijing, the business management department of the People’s Bank of China (PBOC) said.

Zhou Tianyong says 100 million people have missed out on urbanization | Andrew Batson's Blog The existence of a large group of people who have missed out on urbanization creates economic losses in three ways. First, an overly large labor force in agriculture results in relatively low productivity. These people could have higher productivity in the city, but in rural areas they can only do some basic agricultural work, which is a huge loss for the national economy. Second, the delay in urbanization results in a loss of consumer demand. Because rural migrant workers cannot easily urbanize, there is a big gap between their spending power and that of true urban residents. Third, people do not realize their potential to create and distribute wealth, which leads to a huge loss of national income. Much rural land is abandoned because it cannot be used for large-scale operations, houses are rundown and the woods empty because the land cannot be allocated by the market and re-purposed by investors. In fact rural land is becoming a zombie asset that cannot be re-allocated to other uses because of restrictions on private capital, resulting in a huge loss of potential output and value.

China Liquidity Squeeze Spurs Debate Over Reserve Ratio Cut - Caixin Global Although still in the minority, calls are growing for the People’s Bank of China (PBOC) to cut the amount of customers’ deposits lenders have to keep in reserve at the central bank, known as the reserve requirement ratio (RRR), which would release a flood of cash into the system, easing the strain on liquidity and supporting bank lending. The PBOC hasn’t cut the reserve ratio, which stands at 17% for the biggest banks, since March 2016, preferring to use other monetary tools such as open-market operations and its medium-term lending facility (MLF) to adjust liquidity in the market.

China Rolls Closer to Relaxed Ownership Rules for Foreign Electric-Car Makers - Caixin Global China now prohibits foreigners from owning more than 50% of any car-making venture, but growing signals are emerging that Beijing may remove that restriction for EV manufacturing. That could even extend to allowing complete foreign ownership of China-based EV manufacturers for foreign companies like Tesla Inc.

China's IT Ministry Backs New Blockchain Research Lab - CoinDesk Ministry of Industry and Information Technology has launched a research facility called the Trusted Blockchain Open Lab in order to support the ongoing development of the technology in China. To be operated by the China Academy of Information and Communications Technology (CAICT), the blockchain lab will conduct research in the area of blockchain, as well as creating a platform for specialists to share their knowledge around the technology.

Swiss takeover panel demands China’s HNA clarify its ownership - FT $$ Switzerland’s takeover body has demanded that HNA clarify its ownership structure because of apparent changes to the acquisitive Chinese conglomerate’s shareholder base after its SFr1.4bn buyout of air services company Gategroup.

AnchorPolitics And Law

State Council unveils 7 new appointments - China Daily Qin Yizhi, first secretary of the Secretariat of the Communist Youth League of China Central Committee, has been named vice-minister of the General Administration of Quality Supervision, Inspection and Quarantine.  //  Comment: does not look like a career enhancing move

South Korea says Trump's warning to North Korea 'firm and specific' In July, the head of the work safety Yang Huanning was removed for serious “discipline” problems.  //  Comment: Someone with knowledge of the matter told me Yang was removed to open up another central committee spot for Team Xi

American man on the run in Georgia after being suspected of killing his Chinese ex-girlfriend: Shanghaiist News of Li's murder has already gone viral on Chinese social media, raising more fears for those who want to study abroad in the US. Earlier this year, Zhang Yingying, a Chinese student at the University of Illinois at Urbana-Champaign, went missing from campus. She was last seen on June 9th, climbing into a black Saturn Astra that had stopped on the road beside her. Later that month, police arrested the car's owner, charging him in connection with Zhang's disappearance. While Zhang is believed dead, her body has still not been found.

一图剧透纪录片《辉煌中国》第二集:中国科技实力简直逆天了_中国政库_澎湃新闻-The Paper Comment: 6 episode documentary "Glorious China", another pre-19th Party Congress propaganda extravaganza, hits the airwaves

AnchorForeign And Defense Affairs

President Xi: China and Singapore to yield more cooperative results - CGTN President Xi: China and Singapore to yield more cooperative results POLITICS CGTN 1km to Beijing 2017-09-20 20:30 GMT+8 Updated 2017-09-20 21:18 GMT+8 Share   Chinese President Xi Jinping said on Wednesday that he believed China and Singapore will embrace more opportunities in the new era to yield more substantial cooperative results. Xi made the remarks at a meeting with visiting Singaporean Prime Minister Lee Hsien Loong at the Great Hall of the People in Beijing, and the two leaders agreed to improve regional interconnectivity and cooperation in several key areas.

Premier Li hopes for Singapore support in high-speed railway - Xinhua "China has cutting-edge, safe and reliable, cost-effective high-speed railway technology," Li said in his talks with visiting Singaporean Prime Minister Lee Hsien Loong. Malaysia and Singapore have agreed to build a 360-km high-speed rail link between Singapore and Kuala Lumpur, which is expected to start operation by December 2026 and cut travel time to about 90 minutes.

Singapore PM Lee Hsien Loong in surprise meeting with China’s anti-graft tsar Wang Qishan | South China Morning Post Li Mingjiang, an associate professor with the S. Rajaratnam School of International Studies (RSIS) at Nanyang Technological University, said the meeting was in line with the usual practice of Singapore’s leaders. “For one thing, they have been keeping a close eye on the reshuffle of Chinese leaders,” he said. “And for another, the government attaches great importance to communicating with high-level Chinese leaders.”

China, Cambodia agree to strengthen bilateral relations - Xinhua Senior Communist Party of China (CPC) official Liu Yunshan met with Cambodia's acting head of state and Senate President Samdech Say Chhum on Tuesday, agreeing to strengthen bilateral relations. "China and Cambodia are good neighbors, friends, brothers and partners," said Liu, a member of the Standing Committee of the Political Bureau of the CPC Central Committee.

Chinese, Vietnamese Communist parties have 'shared destiny': Beijing - Reuters Liu Yunshan, a member of the Chinese Communist Party’s elite Standing Committee that runs the country, told Vietnamese Prime Minister Nguyen Xuan Phuc in Hanoi, in the first such high level visit since relations deteriorated in July, that the two parties “constitute a community of shared destiny with strategic significance”, China’s official Xinhua news agency reported.

AnchorTech And Media

Tiger Global Co-Leads $230M Series C+ In Chinese Fresh Produce E-commerce Platform MissFresh – China Money Network Founded in 2014, MissFresh provides consumers with fresh produce such as fruit, vegetables, meat, eggs and seafood, and guarantees delivery within two hours. Users can also receive their products from a network of freezers installed by the company in residential compounds, reducing cold chain logistics costs, the company said. As of February, MissFresh recorded monthly active users of over one million, the highest number among fresh produce e-commerce mobile apps, followed by Womai and Bright Diary.

JD vs Alibaba: The war for China's fresh food - TechNode A 2016 study by the China E-commerce Research Center shows that out of the 4,000 existing fresh produce e-commerce companies in China, only 1% are profitable (in Chinese). A glimpse at the deals that JD and Alibaba make with their fresh food allies sheds light on how this bitter battle of freshness can be fought.

Uber Faces Widespread Asia Bribery Allegations Amid U.S. Criminal Probe - Bloomberg Dealings in China and South Korea are also under review, though the details are unclear.  //  Comment: Uber China lacked a CEO for a long time and Travis Kalanick was effectively running it. If there are China problems quite plausible he has personal jeopardy

Facial recognition debuts at China's banks - Xinhua ABC is not the first bank in China to introduce the facial recognition technology. In 2015, China Merchants Bank started using the technology in the southern metropolis of Shenzhen. Last year, it expanded the service to about 1,000 ATMs in 106 cities.

AnchorSociety, Art, Sports, Culture And History

State Council urges more protection of cultural relics - China will continue to strengthen protection of cultural relics and crack down on criminal acts, according to a circular released by the State Council. The circular made clear responsibilities to be taken by local governments, government departments and relics protection units and museums.

Where the Wild Things Are: China’s Art Dreamers at the Guggenheim - The New York Times Many of the more than 70 creators were born in China, yet like Mr. Huang — who fled the country in dismay after the 1989 crackdown on pro-democracy protesters on Tiananmen Square — they reject the label “Chinese.” One paradox: The artists appreciate the big splash on Fifth Avenue but express mixed feelings about a nation-themedshow. Most consider themselves international artists who have contributed mightily to the global avant-garde art movement.

Authorities Reverse Decision to Punish Teachers for Not Cooperating in Contest - Caixin Global A school authority in China’s Hunan province has reversed a decision to dock the pay of two teachers for refusing to be quizzed over their knowledge of their city’s quest to be a “National Civilized City.” Acknowledging that the punishment was too harsh, the Suxian District Education Bureau, in the city of Chenzhou, said Tuesday it will not withhold some of the two teachers’ respective three-month performance-based salaries.

AnchorEnergy, Environment, Science And Health

Opioid boom in China as patients lose addiction fears - FT “The development of treatment for late-stage cancer is the cause,” said Fan Bifa, director of China’s national centre for pain treatment. “The pain of advanced stage cancer patients is intense . . . generally we will use opioids in accordance with guidelines.”

How China’s ‘river chiefs’ are cleaning up the country’s polluted waterways | South China Morning Post At the end of last month, there were about 200,000 “river chiefs” like Weng and Jiang across China, according to the Ministry of Water Resources. Millions more are expected to be installed nationwide, after the top leadership decided late last year to give every waterway in the country a specific steward.


Chinese students question Australian education sending chills through industry The plight of a Chinese student whose parents sold their home to pay for an Australian university education but only found a job handing out product samples has sparked debate in China questioning the value of overseas education. The worsening job prospects for graduates returning to China could send a chill through Australia's third largest export market – international education – which is worth $21.8 billion annually, Australian trade officials have told Fairfax Media.

AnchorFood And Travel

Tibet to Evict Foreign Visitors For 10 Days Next Month Between October 18 and 28, foreign travellers will be barred from entering the country. //  Comment: Overlaps with 19th Party Congress


蔡奇调研老旧小区综合整治工作时强调:老旧小区整治效果如何关键看群众满意不满意-千龙网·中国首都网 蔡奇指出,近年来,市里高度重视老旧小区综合整治工作,今年把这项工作纳入疏解整治促提升专项行动,并在城六区和城市副中心选择试点。从前段情况看,试点工作在有序推进,也遇到群众需求和利益协调难、老旧小区设施改善条件有限、资金缺口较大、管理体系缺失等难点问题。下一步,要抓紧出台《老旧小区综合整治工作方案(2017-2020)》,坚持“六治七补三规范”,集中力量破解难点问题,力求不断取得新的突破,为在全市范围铺开积累经验

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Tuesday, September 19, 2017

19th Party Prep; North Korea's "Rocket Man"; Beijing Fighting Winter Smog; Tibetan Mastiff Oversupply


Good Monday morning from swampy's issue light on commentary, not feeling I have much to add today and figure sometimes less is more. I am testing another logo idea, honest comments always appreciated. Thanks for reading.

The Essential Eight

1. Politburo Meets, Preps For 19th Party Congress

Comment: The language is similar to what we saw before the 18th and 17th Party Congresses (I only looked up those two, would not be surprised if similar languages before several other Congresses). At first glance it is hard to draw any conclusions about what this means for the early enshrinement of a Xi theoretical contribution.

CPC to amend party constitution - Xinhua:

The Communist Party of China (CPC) is expected to amend its constitution at the upcoming national congress.

The Political Bureau of the CPC Central Committee deliberated a draft amendment to the constitution at a meeting which was presided over by Xi Jinping, general secretary of the CPC Central Committee, on Monday.



【十八大·前瞻】党的十八大将修改党章 重大理论写入党章--理论--人民网-Similar language about revising the Party Charter issued by the Politburo meeting before the 18th Party Congress

中共中央政治局研究拟提请十七大修改党章等文件-Language from Politburo meeting before the 17th Party Congress

2. No Progress On North Korea

Likely Next Steps: Unless China cuts of oil exports to North Korea do not be surprised if the US takes the next step on unilateral sanctions to go after a major PRC financial firm, though ramifications would be significant and the Trump administration is clearly hesitant about taking such a step. Was there a logic to Trump referring on Twitter to Kim as "Rocket Man", perhaps a CIA assessment that Kim loves Elton John and could be triggered to back down if associated with that famous Elton John song? (I am kidding...)

Trump's dark view of North Korea options - Axios:

Trump hasn't yet concluded that he needs to take extreme measures against China. The national security team still believes there's room to bring more pressure to bear on North Korea and the clients supporting the state before launching a full-scale economic confrontation against China.

China Rebuffs U.S. Demand to Cut Off Oil Exports to North Korea - Bloomberg:

China will implement all United Nations Security Council resolutions, “no more, no less,” Cui Tiankai, China’s ambassador to the U.S., told reporters at a briefing in Washington when asked if China would cut oil shipments. Any further steps would need to be worked out with the agreement of the entire UN Security Council, he said.

Foreign Ministry Spokesperson Hua Chunying's Regular Press Conference on September 15, 2017:

Second, the essence of the Korean Peninsula nuclear issue is the security issue and its core is the contradiction between the DPRK and the United States. China is not the focal point of the contradiction. China is not to blame for the escalation of tensions. China does not hold the key to resolving the Korean Peninsula nuclear issue, either. Those who tied the knots are responsible for untying it. We maintain that the parties directly concerned should assume their due responsibility and fulfill their due obligation. It is irresponsible and unhelpful for the settlement of the issue to unjustly blame others or shirk responsibilities in any form.

A Potent Fuel Flows to North Korea. It May Be Too Late to Halt It. - The New York Times:

“If North Korea does not have UDMH, it cannot threaten the United States, it’s as simple as that,” said Senator Edward J. Markey, Democrat of Massachusetts, who sits on the Senate Foreign Relations Committee. “These are the issues that the U.S. intelligence community has to answer: from which countries they receive the fuel — it’s probably China — and whether North Korea has a stockpile and how big it is.”

Transcript: U.S. Secretary of State Rex Tillerson on "Face the Nation," Sept. 17, 2017 - CBS News:

JOHN DICKERSON: China says if they cut off the oil it will lead to that collapse that they worry about. Is there anything the U.S. can do to allay their fears?

REX TILLERSON: Well we--what we've said to them is, "Look, you have the best information. You have your hand on the valve. You set the valve where you think it's going to create the message that you want to send to this regime that they must change the path they're on." So we're put--leaving it in China's hands at this point

JOHN DICKERSON:  And, and why not just start talks now? China, Russia, France have all said the U.S. should solve this with talks at the diplomatic table?

REX TILLERSON: Well, I'm waiting for the regime of North Korea to give us some indication that they're prepared to have constructive, productive talks. We have tried a couple of times to signal to them that we're ready when they're ready. And they have responded with more missile launches and a nuclear test. All they need to do to let us know they're ready to talk is to just stop these tests, stop these provocative actions, and let's lower the threat level and the rhetoric.

Trump’s claim there were long gas lines in North Korea has residents puzzled - The Washington Post:

Residents in the North Korean capital are scratching their heads. Although there are reports of price increases, they’ve seen no queues at the few service stations in Pyongyang, a capital of some two million that has more cars than it used to but is still far from congested.

U.S. to send aircraft carrier to Korea next month: ministry - Yonhap:

South Korea and the U.S. will also conduct a combined missile alert drill joined by Japan between late September and early October, according to the ministry.

China’s state media blasts US handling of North Korea crisis | South China Morning Post:

The commentary published in the Communist Party newspaper’s overseas edition called on the US not to link the Sino-US trade relationship with attempts to halt Pyongyang’s nuclear weapons programme and to stop demanding China take responsibility to rein in North Korea.

3. Beijing Trying To Prevent Another Winter Airpocalypse

China to send over 100 pollution inspection teams to cities around Beijing | South China Morning Post:

China will send out over 100 environmental inspection teams to more than two dozen cities around Beijing as part of a new campaign to tackle the smog problem plaguing its northern region.

Chinese capital bans winter construction to improve air quality - Reuters:

Beijing will suspend construction of major public projects in the city this winter in an effort to improve the capital’s notorious air quality, official media said on Sunday, citing the municipal commission of housing and urban-rural development.

All construction of road and water projects, as well as demolition of housing, will be banned from Nov. 15 to March 15 within the city’s six major districts and surrounding suburbs, said the Xinhua report.

Beijing Air-Monitoring Station Has Allegedly Been Tampered With in Advance of Next Month's Plenum | the Beijinger:

Later the same day that Zhang made the post, a reporter with the Beijing Youth Report went to the park and independently verified Zhang's claim. The reporter said the anti-smog truck was parked by itself in an enclosed courtyard with its equipment pointed at the air-monitoring station located just beyond the courtyard's wall, but was turned off after the reporter arrived. By the next day, it was gone.

4. My Failed Bet On Bubbly Baijiu

Comment: A fun FT story over the weekend over the improving fortunes of Xi Jiu习酒, a liquor that has nothing to do with Xi Jinping expect a Chinese character, a connection that led to a massive marketing campaign and some misguided speculation before the 18th Party Congress..

Baijiu sales recover as China’s political winds shift - FT $$:

Rice wine maker that shares name with president tracks drink’s return to favour...

Bill Bishop, an independent China analyst, bought a case of vintage Xijiu as an investment in 2012, calling it a “baijiu bet on Xi Jinping”. Now with one bottle left, he said: “I lost money but gained a few hangovers. But it was fun — the liquor’s not bad.”

Background: My 2012 post on it Xi Jiu, A Baijiu Bet on Xi Jinping:

"I bought a case of 1988 Xi Jiu for a few thousand RMB and have all but one bottle, which already went out as a gift, sitting in my study, just waiting for the hoarding to start and the Xi Jiu bubble to blow, as this article 十八大后喝习酒 习酒被囤积炒高 suggests. Worst case? I have five bottles of decent Baijiu I can share with friends and/or readers of Sinocism who are in Beijing."

5. Sad Plight Of Tibetan Mastiffs

Comment: During the height of the craziness of the Hu-Wen corruption frenzy some of these dogs sold for millions of RMB. Of course massive canine overcapacity ensued, and now they oversupply has caused a real tragedy. The video is heartbreaking.

More Tibetan mastiffs being abandoned in Tibet due to low prices - Global Times:

An anonymous Beijing-based dog seller told the Global Times on Wednesday that the price of Tibetan mastiff has dropped sharply recently.

"A dog [Tibetan mastiff] with excellent appearance could be sold at 3 million yuan ($457,700) at the peak time. But the average price now is between 3,000 yuan and 30,000 yuan," she said.

Statistics from a Qinghai-based environmental protection organization showed that the number of homeless canines has increased sharply in 2013 when the Tibetan mastiff lost its market value.

High Peaks Pure Earth – “Abandoned Tibetan Mastiffs” By the Gangri Neichog Research and Conservation Centre:

This post introduces a new documentary by Dondrup Dorje of the Gangri Neichog (“sacred snowland”) Research and Conservation Centre that looks at the issue of abandoned Tibetan mastiffs. The film was screened and also won an award at the Shanghai International Green Film Week in August 2017...

a video subtitled in English and posted by The Third Pole for their profile of the film is included at the end of the post.

6. Another Amazing Rags To Riches Story

Liu Qiangdong, the ‘Jeff Bezos of China’, on making billions with

Again, like so many of China’s new titans, Liu’s family was so poor that until he went to university aged 18 he only tasted meat once or twice a year. His family, peasant farmers in arid coal country, 700km south of Beijing, had a few rice fields but they also had to hand over the crop to the government; these were the dire days after the Cultural Revolution. “From June until September we were able to eat corn — cornmeal porridge for breakfast, corn pancakes for lunch and dry cornbread for dinner; cornbread so tough it made your throat bleed,” he tells me. “The other eight months we ate boiled sweet potato for breakfast, sweet potato pancake for lunch and dried sweet potato for dinner.”

7. Caixin Cover Story On A Sketchy Chongqing Firm

Comment: I have included the very abridged English translation, the paywalled cover story is much longer and more detailed. It is an expose of IZP, a firm that seemingly came out of nowhere and received significant local government support. There are clearly things the magazine is not saying about the two founders-Luo Feng and Huang Suzhi (Ecoh Huang)--and their connections. Waiting for the other shoe to drop...

How Did an Ambitious Firm’s Big Dream Turn Sour? - Caixin Global:

Separate sources told Caixin that Huang Suzhi, IZP’s legal representative and vice president, has been assisting investigators since April. Several sources close to IZP said Huang, also known as Ecoh Huang, who owns 38% of IZP after founder Luo Feng’s 42% is the mastermind behind IZP’S business strategy. But an IZP employee in Beijing told Caixin in late July that Huang and Luo have remained overseas for the company’s business. Caixin has been unable to reach either Huang and Luo for comment.

8. Detention For Running A VPN, Rule Of Law On Internet

Chinese software developer gets three days’ detention for helping internet users to bypass Great Firewall | South China Morning Post:

Subscribers paid US$1.50 a month for the service, which provided access to virtual private networks

China extends rule of law on Internet - Global Times:

China has accelerated the development of cyber laws since the 18th National Congress of the Communist Party of China (CPC), by actively engaging the government, Internet service providers and netizens in creating a clean cyber environment, observers said.

This year's China Cybersecurity Week begins on Saturday in Shanghai, with Liu Yunshan, a member of the Standing Committee of the Political Bureau of the CPC Central Committee, invited to speak at its opening ceremony.

深入贯彻习近平总书记网络强国战略思想 扎实推进网络安全和信息化工作 Central Cyberspace Affairs Office Theoretical Study Center in latest Qiushi on studying Xi's thoughts on building an Internet great power power

Business, Economy And Trade

知情人透露比特币平台负责人暂时不得离京 配合调查_科技_腾讯网  Bitcoin trading platforms execs banned from leaving beijing, investigated-The Beijing News

China PBOC to Draft Package for Financial Market Opening, Sources Say - Bloomberg The People’s Bank of China will convene an internal meeting on Tuesday to discuss its proposals and get feedback from Chinese institutions, said the people, who asked not to be identified as the matter is private. The meeting will also discuss the timetable for opening up the financial sector and the lessons learned from previous cooperation with foreign firms, the people added.

China's Campaign to Cool House Prices Could Ease as Curbs Bite - Bloomberg Guangzhou, one of the nation’s biggest cities, finally joined Beijing, Shanghai and Shenzhen in reporting flat or declining prices. Guangzhou’s prices fell 0.7 percent after rising for 28 months. Values slipped 0.4 percent in Shenzhen, a bigger decline than a month earlier. Prices were unchanged in Beijing and Shanghai. The largest drop was in the southern tourist city of Haikou, on the tropical island of Hainan, where home prices fell 1 percent, after the city previously stepped up home-buying curbs to ease speculation.

Beijing Unveils Shared-Bike Regulations, Says Operators Shall Buy Personal Accident Insurance for Users | Yicai Global Shared bikes distributed in the city shall have satellite positioning devices and shall not bear advertisements, the draft said. Regulators will restrict bike rollouts of groups whose activities have severe problems with unregulated and substandard operations. Operators shall own or rent parking spaces to meet the needs of vehicle in use. Children under 12 cannot use bicycle-sharing services, the document said. Operators shall purchase personal accident insurance for their users, and those collecting deposits shall open a special account in the city.

Rail Operator Launches Streamlining, Promises No Layoffs - Caixin Global Several CRC executives told Caixin the guarantee of no layoffs or benefit cuts is a crucial part of the plan, aimed at preventing labor unrest, a sensitive subject for Beijing as it tries to make its biggest state-run entities more efficient. CRC has been closely following worker sentiment as it crafts the plan in order to avoid interruptions to its business operating a huge network that includes the nation’s state-of-the-art high-speed rail service, the CRC sources said.

China to Foil Speculators With More-Flexible Fixing Mechanism - Caixin Global After the yuan jumped more than 2% against the dollar in the last two weeks alone and more than 7% this year, Lu Lei, Deputy Administrator of the State Administration of Foreign Exchange (SAFE), said Wednesday the flexibility of the Chinese currency will be increased, the state-run Shanghai Securities News reported. Doing so will likely discourage investors who made one-sided bets on or against the yuan, amplifying the exchange rate’s volatility, the report cited Lu as saying.

G.M. Chief, in China, Challenges Planned Bans of Gasoline Cars - The New York Times Speaking in Shanghai on Friday, Ms. Barra said her company was making a big push to develop electric cars but that consumers, not government dictates, should decide how cars are powered. “I think it works best when, instead of mandating, customers are choosing the technology that meets their needs,” she said.

GM and China joint venture to recall more than 2.5 million vehicles over airbags, watchdog says The vehicles are equipped with airbag inflators produced by troubled Japanese manufacturer Takata, according to the General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ).

China-Backed Rail Project Steams Ahead in Russia - Caixin Global A China-backed plan to build a high-speed railroad between the Russian cities of Moscow and Kazan is set to get Moscow’s approval by the end of this year, a source close to one of the plan’s main participants told Caixin. The Russian government is satisfied with the design created by China Railway Group Ltd., the state-controlled firm specializing in railroad survey and design, the source said. Construction could begin by the first half of 2018, he added.

As China's Bond Market Opens, Global Funds See Watershed Moment - Bloomberg Overseas investors increased their China onshore bond holdings by 62 billion yuan ($9.5 billion) in the second quarter, according to central bank data. Foreign holdings may exceed 1 trillion yuan this quarter, according to an estimate from Becky Liu, head of China macro strategy at Standard Chartered Plc in Hong Kong. Citigroup, which obtained a bond underwriting license in China in July, said there may be “significant” inflows into China’s debt market.

Former PBOC Deputy Governor Delivers Strongly-Worded Warning Against Government’s Implicit Financial Guarantee China’s government has used too many resources on maintaining financial stability, while failing to resolve the underlying causes of instability, Wu Xiaoling, vice-chairwoman of the National People’s Congress Financial and Economic Affairs Committee, said at a government conference Friday.

China will step up supervision of overseas investment risks - insurance regulator The China Insurance Regulatory Commission (CIRC) will step up supervision over the use of insurance funds, with focus on “chaos” such as irrational stock market fundraising and overseas acquisitions, said Guo Jing, vice head of the finance and accounting department of the CIRC.

China Scrambles to Catch Up With Runaway Boom in Fintech Investment - WSJ  A surge of Chinese investment—possibly more than $600 billion in the past two years—has gone into these so-called retail products, according to data from online platforms, financial information aggregators and cryptocurrency research houses.

'The China Hustle' Review | Hollywood Reporter The movie's main conflict is between the fraud-exposers (David, Carson Block's firm Muddy Waters, et al) and the American firms that made so much money on all the trading that they stayed happily blind to it. Those would be firms like the fratboyish Roth Capital Partners and the upper-crusty Rodman & Renshaw, whose CEO was retired general Wesley Clark. Clark is presented as a figurehead-for-hire here, happy to sell his prestige to the firm but unwilling to take any responsibility for its failings. Interviewed for the film, Clark puts on a dignified face before seeming to realize nobody's buying it: "I don't think I want to be in the film," he says uneasily. "Let's just cancel this session, okay?"

China’s Camel-Milk Mogul - Roads & Kingdoms: A decade ago, he estimates, there were 3,000 camels in the whole of Fuhai county, a 13,000-square mile expanse just bigger than the state of Maryland. Their milk was drunk as a medicine, given to the elderly, children, sick people, and very important guests, according to according to Hayrat Haleymolla, the chief of the Kazakh Pharmaceutical Research Institute, and an important part of traditional Kazakh medicine.. Today, there are 20,000 milking camels in Fuhai and the camel milk industry is booming. Xinjiang Wang Yuan Camel Milk Co Ltd is the reason.

Politics And Law

坚决打赢反腐败这场正义之战(砥砺奋进的五年)--时政--人民网 ——党的十八大以来反腐败斗争成就述评** // Comment: The latest propaganda declaration of victory of the 18th Party Congress is a long piece in Monday's People's Daily on the success of the corruption crackdown, says 1.409 million officials have been punished for discipline violations, 92.9% of PRC citizens satisfied with the corruption crackdown**

How could a con artist rise to the heart of China’s justice system? | This Week In Asia | South China Morning Post He was found to have provided fake information about his age, his family members, his education, employment background and application documents for joining the party, according to official media reports. He was also accused of using bribery to “buy official positions and honorary titles along the way”, and then using his power to benefit his business interests, according to the announcement from the Central Commission for Discipline Inspection (CCDI), the country’s top anti-graft watchdog.

What Fallen Officials Did To Get Ahead and Avoid Getting Caught - Caixin Global The documentary’s second episode showed how a former glass-factory owner named Lu Enguang in eastern China’s Shandong province bribed his way to a position as director of the political department of the Ministry of Justice.

China’s new campaign to instil official historical narrative in Xinjiang | South China Morning Post “[We should] eliminate the influence of incorrect ideas about Xinjiang’s history, culture, ethnicities, religions and other aspects,” the report quoted Yu as saying. He went on to stress the party’s efforts to win public trust and fight separatism. Yu also urged local governments in Xinjiang to step up propaganda activities to promote the key points of the meeting to the public, and to improve training of party cadres, intellectuals and religious leaders.

坚持和完善民族区域自治制度 奋力实现中华民族伟大复兴中国梦 2017年09月15日 09:00:00 来源: 求是 作者: 向巴平措

China Probes Defense Attorney in Case of President's Banned 'Steamed Buns' Nickname - RFA Authorities in the eastern Chinese province of Shandong have threatened the defense attorney of a social media user jailed for two years after he called President Xi Jinping by a forbidden nickname on social media. Zhu Shengwu, who represented defendant Wang Jiangfeng after he used Xi's nickname "steamed buns" online, said he has been told he is under a disciplinary investigation, meaning that his license to practice law could be revoked at a hearing on Sept. 21.

China’s Communist Youth League opens Twitter account amid crackdown on internet access | South China Morning Post Shanghai-based political commentator Chen Daoyin said the opening of the account was the latest indication that Beijing wanted to expand its “ideological battlefield” beyond national borders. “Beijing is no longer satisfied with just exporting Chinese culture. Now it wants to be able to influence public opinion overseas,” he said.

Foreign And Defense Affairs

China’s missile forces get a new tech-focused commander | South China Morning Post Lieutenant General Zhou Yaning, 59, has taken over as chief of the Rocket Force, replacing General Wei Fenghe, who retired. The Rocket Force was known as the Second Artillery Corps until 2015 when it was renamed as part of President Xi Jinping’s sweeping military overhaul. Zhou made his first public appearance as its new commander this week when he attended a ceremony paying tribute to Xiang Shouzhi, a Chinese general who died early this month, reported on Saturday. 执掌火箭军的年轻司令员啥来头?- 新京报政事儿

Space official to take charge of Chinese military equipment development programme | South China Morning Post People’s Liberation Army Daily said Lieutenant General Li Shangfu, 59, a senior military official on China’s space project, had taken over the post in an announcement that coincided with his attendance at the third China Military and Civilian Integration Export fair in Beijing...The report did not say what future role Li’s predecessor General Zhang Youxia would take. 李尚福接替张又侠任中央军委装备发展部部长_网易新闻

Five things to look out for when Singapore’s leader Lee Hsien Loong visits China | South China Morning Post  His visit follows an invitation by Chinese Premier Li Keqiang and is seen as a signal of how the relationship between China and Singapore is developing following a series of hiccups in recent months.

China's BeiDou-3 satellites get new chips - Xinhua The chip supports the new generation of BeiDou-3 satellites for high-precision navigation and positioning. The positioning accuracy of the chip reaches the sub-meter level without ground-based augmentation. The chip, developed by Shenzhen-based Allystar Technology, also has uses in unmanned driving systems, wearable devices, precision agriculture and smart logistics.

New Chinese embassy a sign of stronger ties between China and Panama - CGTN Chinese Foreign Minister Wang Yi said China’s new embassy in Panama City would promote mutually beneficial cooperation and achieve common development for China and Panama, during the building's inauguration in Panama on Sunday.

Interview: Panama can be strategic point to bring Belt-Road Initiative to Latin America - Xinhua Panama could be a strategic bridge to extend China's Belt and Road Initiative to Latin America, said Francisco Carlo Escobar, the Panamanian ambassador to China appointed after the two countries established diplomatic ties in June.

Japanese citizen arrested in northern China on suspicion of spying | South China Morning Post The suspect, Ken Higuchi, was being investigated by the Dalian City National Security Bureau on suspicion of spying against China, the report said, adding that prosecutors had approved his arrest.

China and India water 'dispute' after border stand-off - BBC News China and India may have defused a potential border conflict but the stand-off seems to have led to dispute over another contentious issue: water. Delhi says it has not received any hydrological - the scientific study of the movement, distribution and quality of water - data for the Brahmaputra river from upstream China this monsoon season, notwithstanding an agreement.

PLA Newspaper stresses remembering war history for justice - Xinhua The flagship newspaper of the People's Liberation Army's (PLA) ran a commentary stressing remembrance of the history of WWII to better safeguard world peace and justice. The commentary, published under the byline of Tan Lin, ran in the PLA Daily on Monday, the 86th anniversary of the "Sept. 18 Incident," which marked the beginning of Japan's invasion of China.

Hong Kong, Macao And Taiwan

Mainland Chinese student in Hong Kong apologises for independence poster comments | South China Morning Post A mainland student at a Hong Kong university has been forced to apologise publicly twice and pledge allegiance to his country after he criticised another mainland student who spoke out against the idea of independence for the city.

Top Chinese think tank sets up in Hong Kong in bid to boost Beijing’s understanding of city | South China Morning Post The Chinese Academy of Social Sciences, which advises the top leadership, says its purpose is to ‘enhance communications’, and analysts say it may be tasked with looking into the reasons for tensions between the city and the mainland

Liaison office chief Zhang Xiaoming to leave Hong Kong for post in Beijing, source says | South China Morning Post Zhang will oversee city’s affairs from capital while Wang Zhimin to become new director of the central government’s liaison office in Hong Kong

Tech And Media

Ranting and Rapping Online in China, and Raking In Millions - The New York Times Not long ago, Li Tianyou was a scrawny junior high school dropout struggling to make a living in China’s dreary industrial northeast. Now, he is one of China’s best-known internet personalities, commanding a fan base of 22 million people for his live video streams and earning more than $2 million a year in payments from his fans.

Short Video and Live-Streaming as a Platform – with Yixia Technology Divisional Head Spencer King I studied computer science at Stanford, both undergrad and for my masters. After graduating, I joined Operator, which was founded by Robin Chan and Uber co-founder Garrett Camp. I was the founding engineer there. After working there for more than a year, I saw a void in the video mobile space in China. I subsequently founded Tian Tian, which is a video-based social platform. It was acquired by Yixia Technology in just eight months.

Tencent tried to buy Spotify earlier this year | TechCrunch Tencent is said to have approached Spotify with a view to acquiring the company to extend its burgeoning music business outside of China and Asia, a source with knowledge of discussions told TechCrunch.

Copyright Authority Takes Aim at Exclusive Licenses for Music - Caixin Global The National Copyright Administration (NCA) met this week with representatives from 20 music companies, including heavyweights like Universal Music Group and the China Record Corp., according to a statement on the NCA’s official WeChat account. The NCA, part of China’s State Administration of Press, Publications, Radio, Film and Television, asked music companies to promote the “widespread dissemination” of music and the “healthy development of the industry.”

China's Most-Discussed Love Triangle: Wang Baoqiang, Ma Rong and Song Zhe | What's on Weibo It is a story that just keeps trending on Weibo; the separation between actor Wang Baoqiang and his estranged wife Ma Rong due to an illicit love affair with Wang’s manager Song Zhe. With Ma allegedly regretting the split and Song having been arrested for embezzlement, many netizens say that “justice has been served.”

Facebook Navigates an Internet Fractured by Governmental Controls - The New York Times Chinese state media outlets have used ad buys to spread propaganda around key diplomatic events. Its stodgy state-run television station and the party mouthpiece newspaper each have far more Facebook “likes” than popular Western news brands like CNN and Fox News, a likely indication of big ad buys. To attract more ad spending, Facebook set up one page to show China’s state broadcaster, CCTV, how to promote on the platform, according to a person familiar with the matter. Dedicated to Mr. Xi’s international trips, the page is still regularly updated by CCTV, and has 2.7 million likes

Baidu Hires Former Weibo CFO Herman Yu As CFO – China Money Network Yu replaces Jennifer Li, who stepped down as CFO of Baidu in April to become CEO of Baidu Capital, an artificial intelligence-focused investment vehicle under the company.

Society, Art, Sports, Culture And History

The dystopian vision that Westerners have about China is pretty backward — Quartz A growing community of Chinese journalists are working for non-Chinese publications. I’m part of a group on Wechat called “the China Storytellers.” It is a group made up of 168 young, passionate Chinese journalists, most of whom have studied in the US. Most of us grew up reading English articles about China, usually written by people who are not Chinese themselves.

Energy, Environment, Science And Health

Chinese fishing boats with 'thousands of sharks' caught in Timor-Leste waters - ABC News (Australian Broadcasting Corporation) Timor-Leste authorities inspected the 15 boats in February, after a video from Portuguese news agency Lusa showed shark hauls on board. The inspections revealed more than 40 tonnes of shark, which the Government said could contravene Timor-Leste law and the fishing licence conditions.

Water diversion benefits more than 11 mln Beijing residents - Xinhua China's south-to-north water diversion project has benefited more than 11 million people in Beijing, authorities said Monday. The middle route of the project has pumped 2.6 billion cubic meters of water into Beijing, according to the project office.


Why an aspiring US secretary of state chose to study in Beijing | South China Morning Post Schwarzman Scholars from 26 countries to form a foreign bridge to China in terms of politics, business and culture


Beijingers Bemoan Loss of Discount Shopping Amid Wave of Wholesale-Market Closures - Caixin Global It looks like Lunar New Year has come early to Beijing, with locals scrambling for discounts at dozens of migrant-run wholesale markets scattered around the city. But this buying frenzy has actually been triggered by the imminent closure of more than 100 markets for clothes, toys and household items by the end of the year, as the city government cracks down on migrants who have done business in the Chinese capital for decades.