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Bill Bishop's Sinocism China Newsletter provides analysis, commentary and curated links to the important English and Chinese news of the day. Read Bill's Seven China Themes For 2018.

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Saturday, March 3, 2018 

Carl Minzner on Dawn of the Counter-Reform Era

I am really happy to have as part of the occasional Sinocism book series an excerpt from Carl Minzner’s new book End of an Era: How China’s Authoritarian Revival is Undermining its Rise (Oxford University Press, 2018).

Carl is a Professor of Law at Fordham University (bio) and an expert in Chinese law and governance. He started working on this incredibly timely book long before the Communist Party of China announced the New Era of Xi Jinping.

The following excerpt is adapted from Chapter 3, “Internal Decay and Social Unrest.”   Footnotes have been removed.

By Carl Minzner

… With China facing spreading decay inside the Party itself, and new forms of social activism emerging outside, Xi Jinping ascended to power in 2012.  He was convinced of the fierce need to act. Xi has since shaken the Party to its core with a tough anti-corruption campaign, while dramatically recentralizing political power in himself and a few trusted aides. He has also launched the most severe domestic crackdown on dissent, civil society, and the media since the immediate aftermath of 1989.

Naturally, this has led to a loss of hope among many who had hoped that the twenty-first century would see China gradually transition to a more liberal, more open society. As veteran legal activist Teng Biao phrased it:

Xi has done much to bring back the ideological patterns of the Mao Zedong era, including the recycling of old slogans, the shutting of NGOs, the arrest of dissidents and enhanced controls on the spread of information.

Not all are so negative. Since 2012, there has been a strand of opinion that runs along the following lines. Sure, Xi is tough. He is harsh. He is running roughshod over state and society alike. But tough times call for a strong leader. Xi is addressing the dangerous weakness and ineffectiveness that had characterized Hu Jintao’s administration. He is centralizing power. And at the end of the day, he is building new institutions to govern China. Naturally, these will be highly illiberal, authoritarian ones. But regardless of how one might normatively feel about these trends, they represent a renewal of the Party’s rule.

Such arguments aren’t just coming out of China’s state media. They resonate with those advanced by serious academics outside the mainland as well, who draw attention to judicial reforms and Party disciplinary reforms launched since Xi assumed power in 2012…

One could point to such developments and assert—correctly—that they reflect a trend toward centralizing power. One could try to go yet further and assemble this together into an argument that China is seeing an evolution of a new, more centralized, more institutionalized one-Party state—a “perfect dictatorship” (Stein Ringen), or a swing back toward “hard authoritarianism” (David Shambaugh).  Still others assert they represent the next step in the development of “rule-of-law with Chinese characteristics,” purged of deviant Western liberal notions that had crept in during the reform era, and more faithful to China’s own authoritarian Legalist traditions.  

This may indeed be Xi’s intention. He appears to be searching for a way to reinstitute some version of China’s classical top-down governance system—a hybrid fusion of imperial Chinese and early 1950s Party practices. Think of this as the “red dynasty” scenario: power highly concentrated in the top leader in Beijing and his courtiers, a tamed and reformed Party apparatus disseminating the center’s will to the provinces, and with Party disciplinary inspection commissions (DICs) playing the modern role of the imperial censorate…

Perhaps this will succeed. But intentions are one thing; actually turning them into political institutions, quite another. The mere desire to centralize power is not the same as institution-building. And there are three key reasons to doubt that political institutionalization—defined by Huntington as the creation of “stable, valued, recurring patterns of behavior”—is taking place.

First, many of the trends currently playing out in Beijing are less about building up institutions, and more about wresting control of specific bureaucracies to strengthen Xi’s personal rule. Rapid concentration of power in the hands of a single individual in the midst of a heated struggle for power should not be confused with greater institutionalization of an authoritarian system.

Recent years have seen a proliferation of nebulous leading small groups (lingdao xiaozu) chaired personally by Xi Jinping. These bypass other Party leaders and allow him to directly exert a broader influence over a wider range of state power. Economic reform is one example—the small group chaired by Xi has effectively marginalized the role of the premier (Li Keqiang), who had borne responsibility for this portfolio in prior administrations.  Domestic security is another. By 2010, the expansion of the Party political-legal apparatus as a tool to handle social unrest had led created a vast fiefdom under the thumb of the former security czar, Zhou Yongkang. The purge of Zhou in 2013 gave Xi the opportunity to seize control of this turf. The newly created National Security Commission absorbed the domestic security portfolio (along with agencies aimed at foreign threats) and rendered them directly responsible to Xi. Not to existing Party institutions, such as the Politburo standing committee, but to Xi himself.  But since then, there has been no clear definition regarding how this new commission is to actually operate. What was an ill-defined political-legal apparatus has been upgraded to an even less well-defined security apparatus under the control of China’s top leader.

Or look more closely at developments in the Party’s own internal disciplinary apparatus. Scholars who had examined its evolution up until 2012 found a steady trend toward centralizing control over disciplinary inspection commissions (DICs) in the hands of provincial Party standing committees, and (since 1992) a greater professionalization in their work. DICs appeared to be increasingly focusing on anti-graft work rather than (as in the past) rectification of political errors.  Notably, even when they were used to eliminate high-profile rivals (such as Jiang Zemin’s toppling of Chen Xitong in 1995, or Hu Jintao’s removal of Chen Liangyu in 2006), the charges brought were for corruption, rather than for politically challenging China’s top leader. One could plausibly assert that such developments represented a shift—albeit partial and incomplete—toward greater institutionalization.

Now consider what has taken place since 2012. Control of the Party disciplinary apparatus has been centralized in the hands of Xi Jinping’s close ally Wang Qishan. The massive campaign that has unfolded over the past several years has begun to mutate. It is moving beyond mere anti-corruption work. New targets include Party cadres suspected of disloyalty to the top leadership (i.e. Xi), government employees who exhibit sloth or inaction, and professors who voice improper opinions in class.  

This is a reversion to patterns drawn from the 1950s and 1960s—one where the discipline committees are being used as a top-down political tool to shake and purge the entire Party apparatus. Nor is this being accomplished by the organic evolution of China’s institutions of supervision and oversight. Instead, it is marked by the expanded use of central inspection teams that descend on designated government and Party organs in sudden raids, detaining targets according to black-box rules.  Since 2015, official Party parlance has shifted to warn cadres against violating unclear “political rules” (zhengzhi guiju), in addition to the specific (but still extralegal) mandates of the Party’s own charter and internal regulations. Many interpret this as a sweeping catch-all provision aimed at allowing Xi to pursue all behavior and opinions he finds objectionable. A pervasive sense of uncertainty and fear has descended across the Chinese bureaucracy. Suicides have multiplied, with fifty-four cadres perishing from “unnatural causes” between January 2013 and April 2014.  All of this represents devolution away from institutionalized governance, not progress toward it.

Second, centralization of power in Xi’s hands reflects a broader trend. Partially institutionalized elite political norms that had emerged under China’s reform era are breaking down. Xi’s takedown of Zhou, which flagrantly violated tacit norms exempting current or former Politburo Standing Committee members from prosecution, is but one example.  The 19th Party Congress in fall 2017 saw others topple as well.  In a decisive break with reform-era norms, Xi was elevated to a level within the Party ideological canon approaching that of Mao.  And contrary to practices dating back to the 1990s, no obvious successor to Xi was designated.  Both raise the possibility that Xi might seek to continue to rule on in some form after the end of his second term as General Party Secretary in 2022.  As veteran China watcher Willy Lam has noted, this would “constitute a body blow to the institutional reforms that Deng [Xiaoping] introduced in order to prevent the return of Maoist norms.”

Third, the mechanisms that Beijing is using to influence society at large are sliding toward deinstitutionalized channels. Consider other recent trends—all of which break with patterns established since 1978.

• Cultivation of a budding cult of personality around the central leader, complete with fawning videos bearing titles such as “If You Want to Marry, Marry Someone Like Big Daddy Xi [Xi Dada].”

• Pivoting away from the Communist Party’s revolutionary roots in favor of the revival of an ethno-nationalist ideology rooted in history, tradition, and Confucianism (see Chapter 4).

• Return to Maoist-era tactics—televised self-confessions by journalists and lawyers, unannounced disappearances of state officials and civil society activists alike—inducing what Minxin Pei has aptly termed a “rule of fear.” 

Rule by fear, tradition, and personal charisma. These are not efforts to promote institutions of governance. As the sociologist Max Weber pointed out, these are the antithesis of institutionalized, bureaucratic rule.

And that’s exactly right. China’s reform-era trajectory is being reversed. Beijing’s failure to deepen political reform when it had the chance to do so—during the last two decades of the twentieth century and in the first decade of the twenty-first—is now leading the entire system to cannibalize itself and its own prior efforts at political institutionalization. Step by step, Xi finds himself needing to break more and more of the system in order to combat internal opposition, protect his position, and advance his own interests…

You can buy End of an Era: How China’s Authoritarian Revival is Undermining its Rise here on Amazon

And if you want to get smarter about China but do not subscribe to the 4X weekly Sinocism China Newsletter please consider doing so here.

Sunday, February 25, 2018 

Term Limits Will Officially No Longer Apply To Xi Jinping

And we are back from the New Year’s holiday. Today’s issue is a short note on the Communist Party of China Central Committee’s proposed changes to the State Constitution that were approved at the 2nd Plenum in January bit only released a couple of hours ago. Normal publishing will resume Monday. If you are reading this note but do not subscribe to the 4X weekly Sinocism China Newsletter please consider doing so here.

Xinhua has published some of the State Constitution changes that should be ratified at the National People’s Congress (NPC) that opens March 5. There are several interesting changes, including the standing up of the new National Supervisory Commission system and the addition of the adjectives of "great", "modern" and "beautiful" to describe "a socialist country", but the biggest change looks to be the scrapping of the two-term limit for President and Vice President.

This revision is another move in the growing list of norm-busting changes Xi has pushed to allow him to stay in power for life. The most important substantive move towards this end was the inclusion of Xi Thought in the Party Constitution last Fall. As I wrote in the October 24, 2017 newsletter:

The enshrinement signals that it is Xi’s Party and 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, which means no other official 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.

Now the NPC will provide the institutional framework of the State to allow Xi, so long as he is alive and the Communist Party is running China, to be the most important and powerful person in China for life.

In this new Xi Era the world must learn to deal the most powerful Chinese leader in decades, while China itself is now the strongest it has been in centuries, with plans to become even more economically, militarily and culturally powerful, on the road to its Great Rejuvenation.

The Chinese text of some of the proposed changes is in 中国共产党中央委员会关于修改宪法部分内容的建议, and here is the language about ending the two term limit for President and Vice President:


Xinhua helpfully published an English translation of this as a single item in CPC proposes change on Chinese president's term in Constitution:

The Communist Party of China Central Committee proposed to remove the expression that the President and Vice-President of the People's Republic of China "shall serve no more than two consecutive terms" from the country's Constitution.

How much more of the Deng Era will be undone in the Xi Era?

If you are reading this note but do not subscribe to the 4X weekly Sinocism China Newsletter please consider doing so here.

Monday, February 12, 2018 

“人民领袖” -- The People's "Leader" Xi Jinping Gets A New Propaganda Title

Hi everyone, as I mentioned Thursday the movers are coming Monday and so I will not publish a normal issue. But I wanted to flag an important upgrading of the adulatory propaganda for Xi.

He looks to be now officially known as “领袖 lingxiu”. Mao Zedong was titled “伟大领袖 Great Leader” and Hua Guofeng was called “英明领袖 Wise Leader”, but I do not believe any leader since Hua has gotten the “lingxiu” title. Until Xi.

Friday was our first chance to see a People’s Daily and CCTV co-produced 5-minute video “人民领袖 renmin lingxiu” about Xi Jinping as the People’s “leader”. As Chongqing Party School Professor Su Wei told the Global Times in January:

"The word lingxiu means more than just a leader. It is often bestowed to a leader who enjoys the highest prestige, who is the most capable and who is widely recognized by the entire Party”

The January 14 People’s Daily page 1 article 紧紧抓住大有可为的历史机遇期 or "Tightly grasping the very promising period of historical opportunity", signed by the pseudonym “Xuanyan 宣言," or “manifesto”, referred to Xi Jinping as “lingxiu”, which, according to the same Global Times article cited above, was the “first time for People's Daily to refer to Xi as lingxiu.”

A Guizhou newspaper, the Qianxi Nan Daily, briefly went with "Great Leader" Xi in November. The newspaper called him 伟大领袖 in the November 10 issue, and this article on local masses and cadres seeing him as "Great Leader" is in the November 14 issue-“伟大领袖习近平总书记” —— 黔西南各族干部群众的共同心声-黔西南日报, as Sinocism noted as the number one item in the essential eight of the November 14, 2017 newsletter.

Those were quickly deleted, but you can see the screenshots of the newspaper pages and get some more background at the China Media Project:

Qianxinan Daily (黔西南日报), the official Party newspaper of a small prefecture in Guizhou province, even took the extraordinary step last November of running Xi Jinping’s airbrushed official portrait — which played on front pages across the country — with a red caption that identified him as, “Great Leader Xi Jinping, General Secretary” (伟大领袖习近平总书记).

“Great leader” is just about the roundest praise possible for a Communist Party official in China, the only precedent being Chairman Mao himself. But the praise was also, it seems, too excessive. Some time afterward, the Qianxinan Daily front page was removed from digital archives, replaced instead with not just fake news but a fake newspaper.

As I wrote in the November 14 newsletter:

Remember, the "core" appellation for Xi started in the provinces. Xi was a Guizhou delegate to the 19th Party Congress and Li Zhanshu and Chen Min'er both have deep ties there. I hope this is local officials overstepping, but it is worrisome. 

So it looks like there may have been some kind of testing of the waters, and I can not imagine it is a coincidence that it happened in Guizhou. And now we have People’s Daily and CCTV jointly producing a video calling him lingxiu. Welcome to the New Era indeed.

You can watch the video on the People’s Daily site or on Youtube.

Here are some screen shots:

And of course inspecting a rural toilet.

Thanks for reading.

Wednesday, January 24, 2018 

Davos Theme Derived From Xi's Vision?; Liu He Promises A Lot In Davos Speech; SOE Reform Includes An Edict To Make Profits; Reform Leading Group Meets

Xi Jinping did not go to Davos this year but the CCP clearly sees the meeting as a key front in its global influence battle. Official media is in overdrive praising Xi's 2017 Davos speech and contrasting the PRC's vision for the world with President Trump's.  Much more on this below.  

The Essential Eight

1. Beijing Likes The 2018 Davos Theme "Creating a Shared Future in a Fractured World" 

Xinhua says "the theme is developed from Chinese President Xi Jinping's landmark speeches at Davos and at the UN Office at Geneva a year ago". Is Davos now friendlier territory for Beijing than for DC?

Commentary: Shared future or America First - Xinhua:

As business leaders and policy makers from across the globe assemble in the Swiss ski resort of Davos to assess the state of the world, they are faced with two fundamentally different outlooks.

One is present in the theme of this year's World Economic Forum (WEF) annual meeting. Organizers say they aim to rededicate leaders from all walks of life to developing a shared narrative and focus on "Creating a Shared Future in a Fractured World."

The theme is developed from Chinese President Xi Jinping's landmark speeches at Davos and at the UN Office at Geneva a year ago, where he made an insightful analysis of the challenges troubling the world and offered China's prescription: building of a community with a shared future for mankind and achieving shared and win-win development.

The other is upheld by U.S. President Donald Trump, who is expected to attend the Davos annual meeting this year. His signature self-centered "America First" policy has led his country away from multiple multilateral pacts and infused anxiety into both allies and the broader world.

China Keywords: Community with Shared Future for Mankind - Xinhua:

Since Chinese President Xi Jinping made a keynote speech at the United Nations (UN) Office in Geneva titled "Work Together to Build a Community with Shared Future for Mankind" in January 2017, the idea has gained wider international recognition for offering China's solutions to cope with global challenges.

A community with a shared future pursues an open, inclusive, clean, and beautiful world that enjoys lasting peace, universal security, and common prosperity.

According to the idea, countries should respect one another, discuss issues as equals, and resolutely reject a Cold War mentality and power politics. Countries should take a new approach to developing state-to-state relations with communication, rather than confrontation, and partnerships, rather than alliances.

According to the idea, countries should respect one another, discuss issues as equals, and resolutely reject a Cold War mentality and power politics. Countries should take a new approach to developing state-to-state relations with communication, rather than confrontation, and partnerships, rather than alliances.

It calls for settling disputes through dialogue and resolving differences through discussion, coordinating responses to traditional and non-traditional threats, and opposing terrorism in all its forms.

The idea stresses promoting trade and investment liberalization and facilitation, and making economic globalization more open, inclusive, and balanced so that its benefits are shared by all.


The 1.25 People’s Daily will run a long piece about the global importance of Xi’s thoughts on reshaping global governance. —人民日报长篇述评:让思想之光引领世界前行之路——习近平主席2017年达沃斯、日内瓦主旨演讲的世界意义_CCTV

Last week’s People’s Daily “manifesto” just looks more and more important…

Examining China’s “Community of Destiny” – Power 3.0: Understanding Modern Authoritarian Influence - Nadège Rolland:

What kind of community the Chinese regime wishes to shape has not been explained in great detail. However, its contours emerge in the dozens of speeches given by Chinese officials over time since Xi Jinping came to power in 2012. Before then, the term “community of common destiny” ( minyun gongtongti) was seldom used. Hu Jintao aired it in 2007 to describe the special relationship between the mainland and Taiwan, with the clear implication that two politically different entities could have reasonably good relations despite their dissimilarities. The phrase appeared again in a September 2011 White Paper on “China’s peaceful development,” where it underlined “the need for global governance and a just world order.”..

The subtext underneath the rather banal and benign-sounding concept of community of common destiny is, at a minimum, an indirect criticism of the universal values and core principles that hold up the existing world order. Implicit in China’s offer to let each member of the community “choose their own development path” is a rejection of supporting democracy, and as a corollary, of the related norms of rule of law, respect for human rights, and fundamental freedoms. The path that the Chinese regime has chosen for itself—a disinhibited authoritarian one-party system fully integrated into the global economy, showing no intention of evolving into a liberal democracy—is now being offered as “a new option for other countries and nations who want to speed up their development while preserving their independence.”

2. More From The PRC's Davos Delegation

Senior economic policymaker and likely Vice-Premier Liu He is the lead PRC attendee at Davos. His speech hit all the right notes about openness, reform and environmental protection. 

China to Surprise World With Reform in 2018, Xi Adviser Says - Bloomberg:

"Some measures will exceed the expectations of the international community," Liu said Wednesday at the World Economic Forum’s annual meeting in Davos, Switzerland, without specifying what the new policies would be. "Opening up is not only important for China, but also for the whole world," he said, adding that a fresh reform push was also a celebration of the 40th anniversary of the nation’s shift away from a closed Communist system.

Davos 2018: China's new Davos pledge—blue skies, literally, in three years — Quartz:

Liu He, Chinese president Xi Jinping’s right-hand man and the mastermind behind the country’s economic policy, made a concrete pledge to the country’s 1.4 billion citizens today: In three years, your skies will be blue again.

The video of Liu's speech—World Economic Forum Annual Meeting 2018 | China's Economic Policy With Liu He

The full Chinese text of Liu He's Davos speech-直击达沃斯︱刘鹤演讲全文:阐述未来中国经济政策顶层设计_第一财经

The Harvard-Educated ‘Brain’ Behind China’s Economic Transformation - Bloomberg:

But while Liu [He] can be a smart and thoughtful expert, he ultimately remains a servant of Xi, according to George Magnus, an associate at Oxford University’s China Centre and former adviser at UBS Group AG.

“Everything of substance must now go to and through Xi, regardless of the leanings and preferences of people like Liu,” Magnus said. “He’ll certainly continue to give his boss the benefit of his opinions and advice, but implementation of anything has to pass muster with the president.”

Beijing Has Tools to Prevent Systemic Collapse, Regulator Says - Caixin Global:

“I can tell you, in the Chinese system if something happens to certain small financial institutions, what we will do – and this is a lesson we learned from the U.S. financial crisis – is that we will move very swiftly to contain that risk to make sure that whatever panic is caused by this small institution does not spread into the entire system quickly,” said Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), the nation’s stock market regulator.

Fang is also bureau director of the Office of the Central Leading Group for Financial and Economic Affairs, a committee headed by President Xi Jinping that is in charge of leading and supervising economic work of both the Communist Party Central Committee and the State Council, China’s cabinet.

Comment: Fang made the remarks at the panel “The Next Financial Crisis?”. Fang did not join the 19th Party Congress Central Committee. Anyone know why?

3. Rule By Law As Long As The Party Rules The Law

Comment: It is sad that the detention of another rights lawyer seems to be an almost a weekly event. Can we believe Beijing's promises about anything when the claimed respect for human rights is flouted with increasing frequency and brazenness? Perhaps I need to strengthen my cognitive dissonance capacity...

Activists and wife say Chinese state media video is an attempt to discredit detained lawyer Yu Wensheng | Hong Kong Free Press:

On Tuesday, Shanghai-based outlet The Paper posted an edited video clip provided by Beijing police on its website. It accompanied an article about an alleged attack on police by a man surnamed Yu who was suspected of “picking quarrels.”

In it, a man is seen arguing with about half a dozen people, including some wearing protective gear and one filming the scene on his phone. The man can be heard saying: “I won’t cooperate, I won’t cooperate… You can use violence. I won’t cooperate.” Later, he swings a punch at a man ordering him to get into a car. After a jump cut, the other men appear to roughly push him into a van as he swears at them.

The video is in this tweet:



January 23, 2018

China disbars another human rights lawyer in crackdown’s aftermath | Reuters:

Authorities in China’s southern province of Guangdong have cancelled the legal licence of human rights lawyer Sui Muqing, he said on Tuesday, a week after another prominent rights lawyer was detained following similar punishment.

National supervision commission and China’s silenced legal elites — Jerome A. Cohen | 孔傑榮(柯恩):

The second plenum of China’s 19th Party Congress was concluded last week. It paved the way for amending the Constitution to establish a National Supervision Commission. But this proposed “reform” has encountered fierce misgivings, especially among three expert groups: members of the Procuracy, i.e., the national and local prosecutors; influential scholarly specialists in constitutional law and criminal justice; and human rights and criminal defense lawyers.

The anticipated Constitutional and legislative changes represent a huge setback for almost four decades of official, scholarly and professional efforts to establish a rule of law that will protect the rights of individuals in their dealings with the government and the Communist Party. 

Qiushi has published a Q&A on on the recent Qiushi article 西方 “司法独立” 为什么在中国走不通 explaining why an independent judiciary along Western lines is a bad thing. Both reiterates that 依法治国 Rule by Law means based on the law as formulated by 'Party leaders and the masses'. The Q& A respondent Shi Rong apparently studied at Duke and LSE - 清醒!西方“司法独立”在我国走不通 - 求是导读 :



China Focus: China strengthens property rights protection to enhance entrepreneurial confidence - Xinhua:

"We will safeguard entrepreneurs' personal rights, property rights, and right to dignity to make them feel safer and more secure," Guo Shengkun, member of the Political Bureau of the CPC Central Committee and head of the Commission for Political and Legal Affairs of the committee, stressed during the conference.

4. Sweden Is Really Angry About the Gui Minhai Case, But What Can The Country Do?

Statement in connection with the detention of Swedish citizen Gui Minhai -

As has been clear from media reports, Mr Gui Minhai was at the time of his detention in the company of diplomatic staff, who were providing consular assistance to a Swedish citizen in need of medical care. This was perfectly in line with basic international rules giving us the right to provide our citizens with consular support.

The Chinese authorities have assured us on numerous occasions that Mr Gui Minhai has been free since his release having served a sentence for a traffic-related offence, and that we can have any contact we wish with our fellow citizen.

Sweden Wants Answers About Its Seized Citizen. China Isn’t Giving Any. - The New York Times

The Chinese Foreign Ministry’s public reticence about Mr. Gui “probably indicates that the national security apparatus is calling the shots, and the foreign ministry may be out of the decision-making loop,” William Nee, a China researcher for Amnesty International, said by email.

Ever since the five publishers were taken, “the notion of ‘how this might make China look abroad’ never seemed to be a primary consideration,” Mr. Nee said.

Comment: Or Beijing doesn't care because they know that counties are too reliant on PRC economic ties to risk their relationship with the PRC over human rights.

Meanwhile, Sweden is open for business--Lysekina: SOE, PLA-linked United Frontling want a deep-sea port in Sweden | jichang lulu:

Backed by state-owned China Communications and Construction (CCCC, 中交建), a well-known Hong Kong-based United Front figure is lobbying a small Swedish municipality to build a large deep-sea port.

In a tactic seen elsewhere, state-linked investors leveraged Sweden’s decentralisation to avoid the scrutiny that comes with interactions at a national level. Last November, Lysekil municipality officials, overseeing the local affairs of a population of 14,000, were Powerpoint-presented with an investment plan that included the new port, expanding the existing one, a logistic centre, a bridge, roads, a health resort “with Michelin Star restaurants”, all manner of shiny stuff, and given ten days to respond.

5. Is The Vatican Getting Closer To Dumping Taiwan For The Mainland?

Vatican ‘asks underground Chinese bishops to stand aside for government-backed ones’ |

The Holy See has reportedly asked two Chinese bishops to stand aside to make way for illicitly ordained, Chinese government-backed counterparts.

A Vatican delegation asked Bishop Peter Zhuang of Shantou and Bishop Jospeh Guo Xijin of Mindong to retire or accept demotion in order to smooth relations with the Chinese government.

Asia News, the outlet of the Pontifical Institute for Foreign Missions, reports that 88-year-old Bishop Zhuang received a letter dated 26 October asking him to resign to make way for the government-backed Bishop Huang Bingzhang.

外媒:梵蒂冈在主教任命上让步大陆 台又担忧这事|梵蒂冈|主教|台湾_新浪新闻:


The Vatican appears to have a good grasp of cognitive dissonance.

Party members sign pledge to shun religion - Global Times:

"Party members should not have religious beliefs, which is a red line for all members," Wang Zuoan, director of the State Administration for Religious Affairs, wrote in a July 2017 article released in the Qiushi Journal, the flagship magazine of the CPC Central Committee. "Party members should be firm Marxist atheists, obey Party rules and stick to the Party's faith… They are not allowed to seek value and belief in religion."

Officials of faith should be persuaded to quit and those who resist will be punished by the Party organization, Wang wrote.

The Chinese government is officially atheist. Members of the ruling Communist Party of China are not allowed to practice religion but China protects ordinary residents who want to practice their faith.

6. SOE Reform Includes An Edict To Make Profits 

China's state-owned firms to face more mergers, bankruptcies - Reuters:

In a rare interview with a foreign news outlet, Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission (SASAC), stressed Beijing’s commitment to streamline its bloated and debt-ridden state-owned sector and create conglomerates capable of competing globally...

“Our wish is for them to be bigger, stronger and more efficient. And this is what they’re about to be in the future,” Xiao told Reuters on the sidelines of the World Economic Forum in Davos on Tuesday.

He said the focus would be to strictly separate government functions from the SOEs’ business operations, though it was vital for the ruling Communist Party to retain control of the state sector during the process.

China Orders State-Run Companies to Make Profits - Bloomberg:

The State-owned Assets Supervision and Administration Commission told senior executives on Jan. 15 about the edict, which will apply to all of the nation’s 98 central SOEs, according to the people, who asked not to be named because they weren’t authorized to discuss the matter with the media. It was the first time in recent memory that the government made it mandatory for SOEs to make profits, they said.

Unicom Invites Private Company Executives to Its Board - Caixin Global:

Baidu CEO Robin Li, Tencent Senior Executive Vice President Lu Shan and Alibaba Cloud Computing Group President Hu Xiaoming are among the executives nominated to join Unicom’s board, which will expand from seven directors to 13, the telecommunications giant said in an exchange filing on Tuesday.

7. Beijing Orders Softer Media Coverage Of HNA And Wanda

Comment: Their bankers and creditors may want to start panicking?

Chinese media told to tone down coverage of giant firms’ debt, finance woes | South China Morning Post:

Chinese media outlets were told not to play up the financial and debt problems of big Chinese conglomerates such as HNA Group and Dalian Wanda Group, according to two sources briefed on the instructions issued by the authorities. ...

The instructions issued a few weeks ago were not a ban on coverage of specific companies, but a reminder that media reports should not help stir or spread market panic, the sources said.

Another two sources with Chinese state media told the South China Morning Post general guidelines on cautious reporting to ensure market stability were always in place, but were often updated with more specific instructions if there were signs of turbulence in the markets.

Bloomberg has not gotten the memo about softening coverage of HNA's debt mess

China's Beleaguered HNA Group Faces a Debt Wall in Second Half - Bloomberg

HNA is under mounting pressure as several banks are said to have frozen some unused credit lines to its units after missed payments. That follows a $40-billion-plus buying spree that saw the conglomerate emerge from obscurity to take large stakes in companies including Deutsche Bank AG and Hilton Worldwide Holdings Inc. in recent years.

The bill on maturing offshore and onshore notes for the group and its units will swell to more than 12 billion yuan ($1.88 billion) in both the third and fourth quarters, from 1 billion yuan this quarter, Bloomberg-compiled data show. This debt wall is all the more problematic because the yields on some of its bonds have surged to about 20 percent, the highest since they were sold.

8. Leading Group for Deepening Overall Reform of the 19th CPC Central Committee Meets

Comment: The group has quite an ambitious agenda.

China determined to remove institutional barriers through reform - Xinhua:

China will target institutional barriers and deeply embedded interests in reform this year, said a statement from a Communist Party of China (CPC) reform leading group on Tuesday.

Priority should be given to reforms in key areas including state-owned enterprises and state-owned assets, monopoly sectors, finance and taxation, property rights protection, rural revitalization, social security, opening up, and ecological conservation, according to the statement issued after the second meeting of the Leading Group for Deepening Overall Reform of the 19th CPC Central Committee.


Chinese leaders also approved a guideline on establishing a mechanism to appropriately solve trade and investment disputes among the Belt and Road countries according to law.

China will tighten the examination of transferring intellectual property rights (IPR) to foreigners, particularly those concerning state security, according to a regulation adopted at the meeting.

Other measures outlined at Tuesday's meeting include reform of Confucius institutes, basic pension schemes, management of important scientific data, and supply of generic drugs.

Senior officials Li Keqiang, Zhang Gaoli, Wang Yang and Wang Huning attended the meeting.

习近平主持召开中央全面深化改革领导小组第二次会议强调 思想再解放改革再深入工作再抓实 推动全面深化改革在新起点上实现新突破: 


The Confucius Institute reforms discussed at the meeting emphasize the CI's role in serving the PRC's "major country diplomacy":


Business, Economy, Finance And Trade

China’s ExIm Bank commits $4bn in push beyond infrastructure - FT $$ Export-Import Bank of China is releasing a $4bn wave of private equity capital that will broaden the state-controlled overseas investor’s scope beyond infrastructure as it seeks to compete with global funds for diversified assets. In Southeast Asia, one ExIm Bank-backed investment group is preparing to launch a fund of up to $3bn that will target infrastructure as well as telecoms and travel businesses, according to an adviser for the fund.

Ant Financial Gains Approval to Issue Securities Backed by Consumer Loans - Caixin Global Ant Financial Service Group has won regulatory approval to issue securities products backed by consumer loans, just one month after regulators slapped restrictions on online microlenders’ fundraising activities. Ant Financial, the online financial service provider affiliated with Alibaba Group, confirmed to Caixin that it has resumed plans to issue asset-backed securities (ABS) supported by debts and receivables of its online microloan services Huabei and Jiebei.

Troubled LeEco Unit to Resume Trading - Caixin Global The market and shareholders are projecting its share price will plunge after trading resumes, and several mutual funds have internally downgraded its valuation to 10% of its previous size, Caixin has learned.

How China's cryptocurrency exchange ban affected BTCC - Business Insider BTCC founder and CEO Bobby Lee told Business Insider: "We always knew it was a risk that the Chinese government would look unfavourably on bitcoin and put some strong rules around it. "We were always running it with a sense of uncertainty, we were operating in a grey area. Finally last year, 2017, they made a final decision, which was to essentially shut down all exchanges. It was unfortunate but it was in the realm of our worst possibility."

Tighter Regulation Dents Insurers’ Premium Income Growth - Caixin Global The industry reported revenue from premiums paid by customers on new and existing insurance policies rose 18.2% in 2017 to 3.66 trillion yuan ($571.5 billion), down from a growth rate of 27.5% in 2016, according to figures released by the China Insurance Regulatory Commission (CIRC) on Monday. Sales of controversial universal life insurance policies fell by 50.3% to 636.3 billion yuan, the data show, after the commission banned some companies from selling the short-term high-yield products because of concerns they were being used to finance long-term risky investments.

Bangladesh blacklists China Harbour Engineering for ‘bid to bribe secretary’ - “The firm offered Tk 5 million in bribes to the communication secretary. The secretary informed us about the matter. That’s why we’ve blacklisted it. It won’t be able to work anymore,” the minister told reporters at the Secretariat on Tuesday.

Communication breakdown risks escalating Sino-US trade row, say former officials | South China Morning Post “I suspect there are going to be actions under [the] 301 investigation, which will be much more significant to China,” said Wendy Cutler, vice-president of the Asia Society Policy Institute and a former acting deputy US trade representative. “From what I heard so far, it is a pretty comprehensive review and investigation, and the administration may take significant actions such as investment restriction and tariffs.”

US forgets tariff policies run both ways - Global Times There are many countermeasures China could enact against the US. For example, US beef exports have experienced rapid growth in China, but that could change if Beijing decided to raise the bar on its health and safety standards. China is one of America's most vital trading partners regarding agriculture exports like soybeans and cotton. If a trade war erupted, many nations would have the opportunity to replace the US.

China urges integrated development of e-commerce, delivery and logistics industries - The State Council has issued a circular putting forward suggestions on integrated development of the e-commerce and the delivery and logistics industries, as part of the Internet Plus Circulation action plan.

Regulator Rejects Six of Seven IPO Applications at Latest Review - Caixin Global China’s top securities regulator rejected six of the seven initial public offering (IPO) applications considered at its latest review session (link in Chinese), making it the biggest single day of rejections since a powerful new panel took charge of the process. Monday’s unprecedented outcome dragged the panel’s approval rate to a new low of 53%, down from around 80% during the previous panel’s tenure.


Politics, Law And Ideology

China to uproot "protective umbrellas" of organized crime - Xinhua A document issued on Wednesday stressed that a campaign on organized crime should involve fighting corruption, including lower-level corrupt officials, and deal with "protective umbrellas" of gang crime. Disciplinary agencies should punish Communist Party of China (CPC) members involved in gang crime in disciplinary supervision and inspection, according to the document released by the CPC Central Committee and the State Council. 中共中央 国务院发出《关于开展扫黑除恶专项斗争的通知》-新华网 // Comment: This could get interesting, wonder if Xi will take nationwide what Bo Xilai did in Chongqing?

CPC paper reminisces about Xi's early political career - Xinhua A Communist Party of China (CPC) newspaper is publishing a series of interviews on the political career of President Xi Jinping in Zhengding County in the 1980s. The first installment on Wednesday features Cheng Baohuai, former head of the county, who talked about his memories of Xi in an interview with the Study Times, a weekly newspaper affiliated to the Party School of the CPC Central Committee. From March 1982 to May 1985, Xi was deputy secretary and then secretary of the CPC Zhengding County Committee in north China's Hebei Province. He has referred to the location as the starting point of his political career. “正定确实是近平同志从政起步的地方” 

China Leadership Monitor Winter 2018 Issue 55 | Hoover Institution 


Foreign and Military Affairs

US may upset Beijing after it backs Indonesian claim on South China Sea near Natuna islands | AP “We can help maintain maritime domain awareness in the South China Sea, the North Natuna Sea,” Mattis added. “This is something that we look forward to doing.” In July, the Indonesian government unveiled an updated national map in which the country’s exclusive economic zone north of the Natuna Islands had been renamed the North Natuna Sea. It was previously part of the South China Sea.

Out of Order Podcast – German Marshall Fund we discuss the “China shock” ˗ the analysis that China, as a massive rising economic power, has been one of the causal factors for the crisis in Western democracies, in particular by taking manufacturing jobs in some regions. We also contemplate the “contest for the future” and what it means if an illiberal power like China takes the lead in various technological areas, such as AI, space, genomics, and nano-tech.

Why America’s stealth jet forces should fear China’s new unarmed eye in the sky  | South China Morning Post State media confirmed for the first time on Monday that China was building its first carrier-borne early-warning plane called the KJ-600

奋力开创新时代侨务工作新局面--时政--人民网 Yang Jiechi gives a speech at the national conference of directors of the Overseas Chinese Affairs Office // 杨洁篪强调,要深刻领会习近平新时代中国特色社会主义思想,全面贯彻落实党的十九大精神,准确把握侨务工作面临的新形势新任务,推动侨务工作实现新发展。要围绕中心、服务大局,引导广大海外侨胞和归侨侨眷投身创新驱动发展、区域协调发展、“一带一路”建设等。要突出为侨服务、团结凝聚侨心,创新体制机制,进一步发展壮大海外侨界爱国友好力量,发挥好他们在弘扬中华文化、促进中外交流、推动构建人类命运共同体等方面的独特作用,共同为中华民族伟大复兴贡献力量。

US Treasury official presses Hong Kong, Beijing on NKorea - AP A U.S. Treasury official said Wednesday she has urged officials in Hong Kong and Beijing to step up measures to counter North Korean smuggling and financing, as part of Washington’s fine tuning of efforts to shut down Pyongyang’s nuclear program. Treasury Undersecretary for terrorism and financial intelligence Sigal Mandelker said she told Hong Kong officials it should be harder for North Korea to use shell companies registered in the Asian business hub.

China Woos Guinea with Satellite-TV Deal - Caixin Global China has signed an agreement with the oil-rich West African nation of Guinea to bring satellite-TV services to more than 300 villages, reflecting Beijing’s ongoing soft-power push in the continent. The agreement is part of China’s ambitious plan to provide such services to 10,000 villages in 25 African countries by the end of 2018. The plan builds on a concept introduced by President Xi Jinping in 2015 at the sixth Forum on China-Africa Cooperation, held in Johannesburg.

Beijing Goes Boldly into Anti-Satellite Weapons Frontier - The Cipher China has spent more than a decade exploring technology for interfering with foreign satellites. Non-kinetic means have included directed energy or cyber capabilities, while kinetic approaches include direct-ascent missiles and co-orbital platforms travelling alongside satellites in orbit. Much of this counter-space research has taken place with dual-use capabilities that provide a level of deniability. That could be hiding Chinese intent to develop ASAT capabilities for deployment during a time of crisis.

PLA assists private courier firm to launch operations in Tibet - Times of India The flight will reserve space for the PLA providing it with new means to airlift military cargo in and out of Tibet, an official of the logistic support department of the Central Military Commission was quoted as saying. The move marked the PLA's latest effort in pursuing the military-civilian integration strategy, state-run Xinhua news agency reported today.


Hong Kong, Macao

Veteran Hong Kong officials among new faces to be named to China’s top political advisory body | South China Morning Post Veteran Hong Kong officials including ex-World Health Organisation head Dr Margaret Chan Fung Fu-chun are expected to be among the new national committee members of China’s top political advisory body in its next five-year term, sources said. The city’s first chief executive, Tung Chee-hwa, 80, will also stay on at the Chinese People’s Political Consultative Conference (CPPCC) as a vice-chairman.


Tech And Media

Beijing-based Ofo wants to launch its stationless bike-sharing service in SF, but it’s not allowed to | TechCrunch Beijing-based stationless bike-sharing startup Ofo is crying foul at the San Francisco Municipal Transportation Agency over its decision to have an exclusive pilot program with startup JUMP. Earlier this month, JUMP obtained an exclusive permit with the SFMTA  to launch 250 dockless, electric bikes in San Francisco.

WeChat Pay Now Allows Users to Bind Overseas Credit Cards | TechNode Tencent’s WeChat Pay, one of China’s major mobile payment services, announced today that international credit cards are now allowed on the mobile payment platform. Expats living in China and residents of Hong Kong, Macao, and Taiwan – places where WeChat is ambitiously expanding its user base – can now bind and activate WeChat Pay accounts with credit card services provided by MasterCard, Visa, and JCB. It’s worth noting that this is the first time users are able to use WeChat Pay without having a Chinese bank account or credit card, according to a company statement from Tencent.

Another Key Figure Ejects From Baidu’s Self-Driving Car Unit - Caixin Global Wu Xuebin — who joined Baidu in September 2016 after 20 years in the auto sector — confirmed to Caixin on Tuesday that he has stepped down as vice president of the company’s self-driving division.

Prodigal Frogs Are China’s Latest Gaming Fad | China Film Insider “Traveling Frog,” developed by Japanese game maker Hit-Point, is currently the No. 1 most downloaded free app on Apple’s iOS China App Store. On microblog platform Weibo, posts containing the hashtag “Traveling Frog” have been read over 440 million times. Many of the game’s Chinese fans take to social media to share updates about the lives of their precious pets, which have a tendency to go on long vacations without offering so much as a goodbye. Players can tell their social networks how long their frog has been away, what kinds of souvenirs it brought back from its last trip, and where its last postcard came from.

ApplePay Growing Fast But Still Bit Player in China: UnionPay - Caixin Global About 20% of UnionPay’s 94 trillion yuan ($14.2 trillion) in annual transaction volume now comes from near field communication (NFC) technology payments, a newer technology that allows people to pay for items using smartphones over short distances without swiping a card. But of those NFC transactions, only a very small number come from Apple’s ApplePay, as well as similar third-party payment systems operated by South Korea’s Samsung and China’s own Huawei, UnionPay corporate strategy chief Liu Yuan told Caixin on Wednesday.


Society, Art, Sports, Culture And History

‘Me Too,’ Chinese Women Say. Not So Fast, Say the Censors. - The New York Times Chinese women are finding it difficult to organize a far-reaching #MeToo movement, going up against not just a male-dominated culture but also the ruling Communist Party itself. Government censors, apparently fearing social unrest, are trying to hobble the campaign, blocking the use of phrases like “anti-sexual harassment” on social media and deleting online petitions calling for greater protections for women. And officials have warned some activists against speaking out, suggesting that they may be seen as traitors colluding with foreigners if they persist.

Women and Gender in China (WAGIC) Podcast In WAGIC’s very first podcast, hosts Tessa Qiu and Yuan Ren are joined by researchers Dr Monica Merlin (Birmingham School of Art), Luise Guest (White Rabbit Collection), Christina Yuen Zi Chung (University of Washington) and artist Yi Dai to respond to the questions: What is a 'Chinese woman artist'? And is there such a thing as 'Chinese women’s art'?

China’s LGBT activists break away from Western agenda, bring their own experience to the world - Global Times Like Ripley, today, a growing number of Chinese LGBT groups and related NGOs are making a more noteworthy presence on the world stage. In addition to their signatures, many also provide training courses for foreign LGBT groups to "impart Chinese experiences in the LGBT movement," as well as actively participate in the world LGBT agenda. "It is a new era for China's LGBT groups. In the beginning we only cared about HIV/AIDS prevention so our motivation to go out to the world stage wasn't strong. But now our concerns are more diversified, which require more international communications," said Ah Qiang, a well-known gay rights activist and founder of PFLAG China, an NGO focusing on helping parents of gay men.

The Maybe-Magic Well Water of Twins Town - Sixth Tone the government of Guxian Town, which oversees Xiaomenlu, hopes to turn this into a steady stream of tourism money. In their vision, villagers will open guesthouses for out-of-towners coming to see the well. The name for the main attraction hasn’t been decided yet, but Zheng says he likes “Water of the Many Children.”


Energy, Environment, Science And Health

New wave of bird flu likely to hit soon: expert warns - China Daily A new wave of bird flu is likely to hit China over the next few months, which could have serious consequences this year due to the high number of cases of human flu in many parts of the country, a prominent scientist warned. H7N9, which was first reported in China in 2013, is most active between January and March, based on experiences over the past few years, Zhong Nanshan, director of the National Clinical Research Center for Respiratory Disease in Guangzhou, Guangdong province, told Xinhua News Agency.

China's first successful lunar laser ranging accomplished - Xinhua Based on the signals of laser pulses reflected by the lunar retro-reflector planted by the U.S. manned mission Apollo 15, the applied astronomy group from the Yunnan Observatories measured the distance between the Apollo 15 retro-reflector and the Yunnan Observatories ground station to be 385823.433 kilometers to 387119.600 kilometers, from 9:25 p.m. to 10:31 p.m. Beijing Time, on Jan. 22, 2018.


Agriculture And Rural Issues

U.S. gives safety approval to Chinese genetically modified rice strain - Reuters The rice, known as Huahui 1, was developed by a team at Huazhong University in central Hubei province to resist pests like the rice stem borer. While Chinese authorities granted the strain a safety certificate in 2009, it has never been approved for commercial production. Beijing has spent billions of dollars researching GMO crops but has held back from commercial production of any food grains because of consumer concerns about their safety. Validation of the country’s GMO safety testing and products by U.S. authorities could help persuade the government and consumers in China to accept the products at home.



Chinese citizen pleads guilty to U.S. graduate school exam fraud - Reuters Xinyan Wang, who was a student at Lehigh Carbon Community College in Pennsylvania, pleaded guilty in federal court in Boston to charges that she misused a passport and committed visa fraud by using counterfeit travel documents to take the exam. Her plea centered on a single Graduate Record Exam (GRE) that prosecutors said Wang, 27, took on Oct. 20 in Boston using a counterfeit Chinese passport and a bogus visa in another person’s name that contained photos that resembled her.  



Beijing to demolish 15 square miles of illegal structures - Reuters Beijing plans to tear down at least 40 million square meters, or a staggering 15.44 square miles, of illegal structures... The city will “ensure zero increase of such structures” this year and will continue to relocate people out of the city center, acting mayor Chen Jining said in an annual work report to the city’s government on Wednesday.

Beijing to open 3 new metro lines this year - Xinhua Three more urban rail sections are expected to open in Beijing this year, the city's acting mayor said Wednesday in a government report. The total length of metro rails in the Chinese capital will exceed 630 kilometers by the end of the year, Chen Jining said at the opening of the first annual session of the 15th Beijing Municipal People's Congress.

Beijing to close 500 manufacturing companies this year - Xinhua Beijing will shut down 500 manufacturing companies this year, to further move its non-capital functions out of the city, Beijing's acting mayor said Wednesday in a government report. More than 40 state-owned companies will be moved out of the city proper, Chen Jining said at the opening of the first session of the 15th Beijing Municipal People's Congress.

Beijing to add forests, greenbelts and wetlands - Xinhua Beijing plans to add 1 million mu (66,700 hectares) of forests, greenbelts and wetlands by 2022. The five-year plan, aimed at raising the city's forest coverage to more than 45 percent, was announced on Wednesday at the first session of the 15th Beijing Municipal People's Congress.


Jobs And Events

ChinaFile and NCUSCR Present: Chinese Civil Society in 2018 – What's Ahead? | Asia Society Mon 29 Jan 2018 6:30 PM - 8:00 PM Asia Society 725 Park Ave. New York, NY 10021


I garbled a couple of characters yesterday, one I just can’t not mess up and one was just a typo. 单仁平 is Shan (not Dan $!*%!) Renping and 甄占民 is Zhen Zhanmin. Thanks to an alert reader, and apologies.

Thursday, January 4, 2018 

Xi Holds Mobilization Meeting For Whole Army, Visits Exhibit Celebrating 1950 Battle With Americans In The Korean War ; Beijing Can't Quit GDP Targets ; Heilongjiang Provincial Government Moves Quickly To Address Allegations By Mao Zhenhua

Good morning from snowy DC. I am running a bit late today because of school delays so will get right to it.

The Essential Eight

1. Xi Holds Mobilization Meeting For Whole Army, Visits Exhibit Celebrating 1950 Battle With Americans In The Korean War

Xi stresses real combat training - Xinhua:

President Xi Jinping Wednesday instructed the armed forces to strengthen real combat training and improve its war-winning capability.

Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission (CMC), made the remarks while issuing an order at a mobilization meeting held by the commission.

It was the first time for the commission to hold a mobilization meeting for the whole armed forces

PLA Daily Commentary-军报评论:坚定不移把军事训练摆在战略位置

CCTV Evening News on Xi's instructions to the PLA--[视频]中央军委举行2018年开训动员大会 习近平向全军发布训令_CCTV:

隆冬的华北大地寒意正浓,训练场上生机勃发、热情涌动。开训动员大会主会场——中部战区陆军某团靶场,7000余名官兵全副武装、威严列队,近300台装备整齐列阵、气势磅礴。校阅台上悬挂着 “中央军委2018年开训动员大会”横幅。“按实战要求去训练,按训练去实战,训练与实战达到一体化”、“召之即来、来之能战、战之必胜”的字样格外醒目。同时全军设4000余个分会场,陆军、海军、空军、火箭军、战略支援部队、武警部队设野战化分会场。从林海雪原到天涯海角,从西北大漠到东南沿海,从中原腹地到万里边关,三军将士威严伫立、集结待命。这是中央军委首次统一组织全军开训动员,是人民军队加强新时代练兵备战的一次崭新亮相。

The South China Morning Post has posted English-subtitled excerpts from CCTV video, with stirring theme music-"Xi Jinping's new year orders to the Chinese army coincided with a first-of-its-kind military display. Xi sounds like he has a cold.

The Thursday front page of People's Daily is quite a martial sight, seems far from the idea of "Peaceful Rise":

After the mobilization meeting Xi inspected a division at Central Theater Command. --CCTV Evening News--[视频]习近平在视察中部战区陆军某师时强调 大抓实战化军事训练 聚力打造精锐作战力量_CCTV

The report shows Xi climbing on a tank and looking down a gun sight:

CCTV also shows Xi stopping to admire an exhibit about the division fighting Americans in the Korean War at 松骨峰. Xi said back then the PLA had energy but not much steel, but now they have lots of steel and even more energy:


Is that a warning to President Trump?

Xi Jinping tells army not to fear death in show of China's military might | World news | The Guardian:

“As Xi Jinping announced his instructions, there was prolonged and thunderous applause,” the party’s official newspaper, the People’s Daily, reported in a front-page story, alongside a photograph showing Xi clad in combat fatigues and black leather gloves.

The newspaper claimed troops had gathered in 4,000 separate locations across China to hear their commander-in-chief’s decree. Turning to the scarlet flag of the People’s Liberation Army (PLA), they vowed to “resolutely obey Chairman Xi’s order”.

China Defense Blog: PLA Unit in the news of the day: 334th Regiment, 112th Mech Infantry Division:

Its 334th Mech Infantry Regiment was there to answer Xi's call to kicking-off  the 2018 military training with 7000 members and 300 armed vehicles yesterday.

2. Beijing Can't Quit GDP Targets

Comment: This is another bad sign for economic reform prospects.

China to stick with 'around 6.5 percent' growth goal in 2018 - sources - Reuters:

The proposed target, to be unveiled at the annual parliament meeting in March, was endorsed by top leaders at the closed-door Central Economic Work Conference in Dec. 18-20, according to four sources with knowledge of the meeting outcome.

3. Socialist Ideology Propaganda Work To Deepen

Senior CPC official says China needs to further develop socialist ideology - Xinhua:

Wang Huning, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and the CPC Central Committee Secretariat, made the remarks at a national conference on communication and publicity, which began Wednesday.

Wang stressed the importance of strengthening the overall CPC leadership in publicity, theory and culture, saying that any ideological developments must follow CPC rules on Party building.

CCTV Evening News on the meeting - 全国宣传部长会议在京召开 王沪宁出席并讲话 

4. Tibetan Businessman On Trial For Talking To The New York Times

Tibetan activist put on trial in China for inciting separatism | World news | The Guardian:

A Tibetan language activist who appeared in a New York Times video has been put on trial for separatism in proceedings dismissed as a “sham” by rights groups, a sign of increasingly hardline attitudes towards government critics.

Tashi Wangchuk pleaded not guilty to the charges of “inciting separatism” during the four-hour trial in the western Chinese city of Yushu, where the state’s main piece of evidence against him was the nine-minute video, according to his lawyer, Liang Xiaojun.

The activist was detained two years ago after appearing in the video where he criticised policies towards Tibetan language education, attempted to sue the local government and tried to entice China’s state broadcaster, CCTV, to report on his concerns.

Tibetan Businessman Battles Separatism Charges in Chinese Court - The New York Times:

A Tibetan businessman who tried to protect his native language, and spoke to The New York Times about his efforts, defended himself in a Chinese court on Thursday against criminal charge that his one-man campaign had fanned resistance to Chinese rule.

The one-day trial of the businessman, Tashi Wangchuk, 32, was held in his hometown Yushu, a heavily Tibetan area in the northwestern Chinese province of Qinghai, two years after he was detained by the police.

5. Alibaba's Ant Financial Caught Enrolling Users In Sesame Credit By Default

Alipay’s Owner Apologizes for Automatic Credit System Enrollment - Caixin Global:

Ant Financial Services Group, which operates Alipay, China’s top third-party payment service provider, apologized Wednesday for automatically enrolling users into its credit-rating system in the wave of a backlash from the public as well as the central bank.

Earlier this week, Alipay added a new feature to its year-end electronic billing service that allows Sesame Credit to access the user to access shopping and payment history on the app unless they opt out.

The move elicited a strong outcry from the public, saying the company was improperly gathering personal consumption data. The People’s Bank of China on Wednesday also told Alipay to apologize and correct the situation, Caixin learned.

Internet Users in China Expect to Be Tracked. Now, They Want Privacy. - The New York Times:

Ant Financial might have been trying to get around newer, stricter laws that would prevent them from sharing user data unless they had explicit permission, said Zhai Zhenyi, a lawyer at Yingke, a China-based law firm.

“Problems like telecom fraud and malicious marketing have severely vexed the general public, so people’s consciousness about their rights is awakening,” he said. “This is a very good thing to see.”

But it’s not clear to what degree that consciousness extends to government collection of data, even though China’s biggest internet companies often provide user information to Beijing.

Caijing on the Sesame Credit mess - 支付宝年度账单怎么惹了用户_原创频道_财经网:


Comment: It is only a problem if you are caught is the mantra that has made Alibaba and the other Internet behemoths so successful to date.

6. PRC To Curtail Bitcoin Mining Operations

China Clamps Down on Preferential Treatment for Bitcoin Mines - Caixin Global:

Local regulators will take action to ensure bitcoin mining companies no longer receive preferential policies for electricity prices, taxes or land use, a source close to regulators told Caixin.

Another source from the central bank-led committee in charge of internet financial risk told Caixin that localities have been told to use electricity prices, land-use policy, taxation and environmental measures to “guide” companies out of the bitcoin mining business.

The committee also ordered localities to submit regular reports on bitcoin mining operations in their jurisdictions, according to the source.

Bitcoin's Cheap Energy Feast Is Ending - Bloomberg Gadfly:

The People's Bank of China outlined plans to limit power use by some bitcoin miners at a closed-door meeting Wednesday, people familiar with the matter told Bloomberg News. But the business model may already be under threat regardless of bank regulation, thanks to the way China's energy system is changing.

Sick of wasting electricity, Beijing has in recent years introduced measures to prevent the building of surplus generation and to transfer the electricity that's available to where it's most needed.

7. Heilongjiang Provincial Government Moves Quickly To Address Allegations By Mao Zhenhua

Background: As highlighted in the 1.2 newsletter, a video of entrepreneur and Dean of Institute of Economics of Renmin University of China (English bio) Mao Zhenhua criticizing local corruption that has hurt his ski resort in Yabuli, Heilongjiang has gone viral...the general reaction seems to be of course, Dongbei is perhaps the most corrupt place in China, no wonder the economy is such a disaster up there...

Comment: Mao Zhenhua's video tirade has an effect, Heilongjiang inspection team finds problems with the local Yabuli management committee, disciplines local officials, announces measures to rectify the problems. And the local committee has apologized to Mao. Any chance Mao's tirade was pre-approved in Beijing? Cracking down on corrupt local officials who are stifling economic growth in Dongbei very much fits with Beijing's agenda.


The video is here on Youtube 

毛振华喊冤案水落石出 详解官民之争全过程_政经频道_财新网:



The Heilongjiang Provincial Party Committee has launched an inspection of the provincial Forestry Bureau in the wake of the Mao Zhenhua allegations


8. Is HNA Group Running Out Of Money?

Comment: Creditors and debtors should be very worried, and service providers should be asking for much of their payments upfront. 

HNA Group Delays Loan Repayments to Employees, Investors on Internet-Lending Platform - WSJ $$:

A unit of HNA told employees in an email Tuesday that payments on investment products they previously purchased would be delayed, according to a person familiar with the matter.

HNA employees as well as outside investors are among the customers of, an internet-based investment and financing platform owned by HNA that makes loans and sells high-yielding investment products that mostly mature in under a year.

It was the second such notification that employees of the sprawling airlines-to-hotels conglomerate had received in about a month, according to a person familiar with the matter.

Business, Economy, Finance And Trade 

China building new world of trade rules to serve changing needs - Global Times In 2018, China is likely to make great strides in promoting free trade agreements (FTAs) that will frame new rules and norms governing global trade and investment. China will pursue negotiations of 10 FTAs in 2018, while carrying out feasibility studies for 10 other agreements, the Economic Information Daily, a publication of the Xinhua News Agency, said in a recent report, citing a Ministry of Commerce official.

China Now Taxes Offshore Profits Less - Caixin Global The new policy is seen as similar to the U.S. recent tax cut plan, as both aim to encourage companies and individuals to bring more profits back to the home country, industry insiders say. Retroactive to Jan. 1, 2017, Chinese companies and individuals have more flexibility in determining the part of their repatriated profits eligible for income tax exemption at home, the Ministry of Finance and the State Administration of Taxation (SAT) said in a joint statement Friday.

China tightens bond trading rules in deleveraging campaign -PBOC - Reuters The regulations, jointly issued by the People’s Bank of China and China’s banking, securities and insurance regulators, come as Beijing launches a series of co-ordinated initiatives across government agencies designed to reduce leverage in the financial system. Under the new rules, published on the central bank’s website, institutions must sign written deals when conducting bond repurchase or bond forward transactions. Any deals designed to dodge regulatory requirements are to be banned.

How Swarovski is winning over Chinese customers on WeChat - Digiday The luxury brand launched a campaign on the China-based social and messaging app to drive engagement, brand awareness and purchases (both online and in stores) during the Christmas season, which is seeing more consumer traction in the region. Over the month of December, Swarovski teased an “Advent Calendar” box of products that included three full-priced items and 21 free gifts, selling for $458 dollars. It sold out in fewer than 10 days on the platform.

China revises regulations on table salt monopoly - The salt administrative department under the State Council is in charge of salt administration nationwide. Local governments above the county level can designate a department to undertake the work. As China implements a system where only designated companies can produce or wholesale edible salt, other companies are forbidden to do so, noted the decree. 

The Cashless Society Has Arrived— Only It’s in China - WSJ Though the U.S. saw $112 billion of mobile payments in 2016, by a Forrester Research estimate, such payments in China totaled $9 trillion, according to iResearch Consulting Group, a Chinese firm. For Alibaba and Tencent, the payoff isn’t just the transaction fees they make from merchants, typically 0.6%. It’s also the consumer data collected, which can transform their apps into marketing platforms for an expanding array of services, from bike sharing to travel.

Berlin to probe Chinese deal for German aerospace group Cotesa - FT $$ Berlin has intervened in the takeover of a small but innovative German aerospace company, using a new law that gives it enhanced powers to block Chinese deals in strategic sectors of the economy. Cotesa, which makes parts for aircraft makers such as Airbus and Boeing, was due to be bought by a subsidiary of the state-run China Iron & Steel Research Institute Group for a price German media reported at between €100m and €200m.


Politics, Law And Ideology

Vice governor of E China province under investigation for disciplinary violations - Xinhua Ji Xiangqi, vice governor of east China's Shandong Province, is under investigation for suspected "severe disciplinary violations," the Central Commission for Discipline Inspection of the Communist Party of China announced Thursday.

我国社会主要矛盾变化的重大意义(进入新时代 踏上新征程) 颜晓峰 《 人民日报 》( 2018年01月04日   07 版)//Three items on the principal contradiction on the 1/4 People's Daily Theory section

准确把握社会主要矛盾的变化(大家手笔) 严书翰 《 人民日报 》( 2018年01月04日   07 版

社会主要矛盾新变化与民族复兴新境界(思想纵横) 叶 帆 《 人民日报 》( 2018年01月04日   07 版)

既要面对面 又要键对键--舆情频道--人民网 Under guidance from the organization department, Cangxi, Sichuan has launched the first "Intelligent Party Construction Big Data Platform"...and there is an orb... 


孙政才通过温家宝夫人升官 前途不妙(图) - 中国政坛 - 倍可亲 Comment: A 2015 article about Sun Zhengcai and his ties to Wen Jiabao and his family, and cheap Beijing land he approved for Wen's wife. Interesting that this author in 2015 said Sun's chances of advancing at the 19th were lower than many thought because he had so many "problems".. Expect to hear more about the ties to the Wen family... //  十六大后,孙政才又如法炮制,将顺义价值几十亿的地皮以极低价格输送给温家宝夫人,终于得到温夫人张蓓莉的认可,也得到温家宝的大力提拔,并获得十七大中央委员资格。后来再任吉林省委书记,也是得到温家宝的鼎力支持。从他作为中共第六代总理接班人的态势来看,温也的确对他信任有加。


Foreign and Military Affairs

Why Xi Jinping is once again letting China’s military have a direct link to local authorities | South China Morning Post: Party standing committees are the main decision-making bodies of any administration in China and the military has long had a presence on them at all levels. The practice dates back to the 1950s when then-defence minister Peng Dehuai suggested that officers from the People’s Libration Army (PLA) join government meetings to improve coordination between military and civilian affairs...The announcements that PLA officers would once again be taking up seats on the party standing committees is a strong signal that the military reforms have been completed and the PLA is regrouping, analysts say.

U.S. and South Korea Agree Not to Hold Military Exercises During Olympics - WSJ President Donald Trump and South Korean President Moon Jae-in agreed not to hold springtime military exercises during the Olympics, the South Korean president’s office said Thursday, a move that could cool tensions with North Korea. The agreement came during a 30-minute phone call between the two presidents, Seoul’s presidential Blue House said in a statement.

China welcomes reopening of Korean border hotline, but US is sceptical | South China Morning Post Chinese foreign ministry spokesman Geng Shuang said Beijing supported efforts by Pyongyang and Seoul to use the Pyeongchang games to improve relations following North Korea’s repeated missile launches and its sixth and most powerful nuclear test last year. In a veiled criticism of US President Donald Trump’s latest war of words with Kim, he also urged Washington to show restraint and make concrete efforts to seek a peaceful solution to the North Korea nuclear crisis, including starting direct dialogue with Pyongyang.

Oman’s Coastline Is the Next Stop on China’s Belt and Road Eager to wean its economy off hydrocarbons, Oman opened its doors to Chinese investment last year in a major step towards transitioning to a knowledge-based economy. Oman Wanfang, a consortium of six private Chinese firms, plans to build a $10.7bn industrial city in Duqm, situated 550 km south of of the capital, Muscat. For perspective, Oman Wanfang’s $10.7bn investment is the equivalent of more than half of Oman’s stock of foreign direct investment. The Chinese consortium has promised to develop at least 30% of the project area within five years, with financing and construction firms to be sourced from China.

Michael Wolff’s ‘Fire and Fury’: Inside Trump’s White House Again, as though setting the issue of Trump aside — merely a large and peculiar presence to both be thankful for and to have to abide — Bannon, in the role he had conceived for himself, the auteur of the Trump presidency, charged forward. The real enemy, he said, was China. China was the first front in a new Cold War. “China’s everything. Nothing else matters. We don’t get China right, we don’t get anything right. This whole thing is very simple. China is where Nazi Germany was in 1929 to 1930. The Chinese, like the Germans, are the most rational people in the world, until they’re not. And they’re gonna flip like Germany in the ’30s. You’re going to have a hypernationalist state, and once that happens, you can’t put the genie back in the bottle. // Comment: Looks like Beijing may have miscalculated in believing Bannon could be a useful channel to Trump

China believes Cambodia's election will be fair, confirms support - Reuters “China respects and supports the development path chosen by the Cambodian people, and believes Cambodia’s future election can, under all sides’ supervision, reflect its fairness and select a party and leader that satisfies the Cambodian people,” Chinese Vice Foreign Minister Kong Xuanyou said.

Taiwanese man bailed over oil transfer to North Korean ship | South China Morning Post Prosecutors in Taiwan suspect that Chen Shih-hsien was the oil dealer behind the transfer of the fuel. He has been released on NT$1.5 million (US$50,000) bail and will face further questioning, according to a statement released on Thursday by the prosecutors office in the southern Taiwanese city of Kaohsiung. Chen denies any wrongdoing.

Institute denies military-oriented work in S China Sea - Global Times The Chinese Academy of Sciences' (CAS) oceanology institute on Tuesday denied reports of leading military-oriented underwater surveillance in the South China Sea. The Hong Kong-based South China Morning Post (SCMP) on Monday reported that China's new hi-tech underwater surveillance network system project, which gathers underwater data, particularly water temperature and salinity, could help the navy more accurately lock in on targets and improve navigation and positioning.

Indian road project threatens border stability: experts - Global Times An Indian road construction project connecting all border posts along the China-India frontier could lead to new military standoffs between China and India, Chinese experts warned on Wednesday.  During his New Year visit to the "Indo-Tibet Border Police" at Nelong valley in Uttarkashi district bordering China on Monday, Indian Union Home Minister Rajnath Singh said that a number of border posts had already been connected with roads and many would soon be linked, The Times of India reported on Monday.

Old China hand to guide India's global path | Asia Times Vijay Keshav Gokhale, a fluent Mandarin speaker and a former Ambassador to China, is India's new Foreign Secretary

China's underwater glider completes first dive in Indian Ocean - Xinhua Spearheaded by the Third Institute of Oceanography of the State Oceanic Administration, the mission, between Dec. 11, 2017 and Jan. 2, 2018, was aimed at observing interaction between global climate change and marine conditions, said Yu Jiancheng, a research fellow with the Chinese Academy of Sciences (CAS) Shenyang Institute of Automation, the developer of the glider.

China has started building its third aircraft carrier, military sources say | South China Morning Post One of the sources said Shanghai Jiangnan Shipyard Group was given the go-ahead to begin work on the vessel after military leaders met in Beijing following the annual sessions of China’s legislature and top political advisory body in March. “But the shipyard is still working on the carrier’s hull, which is expected to take about two years,” the source said. “Building the new carrier will be more complicated and challenging than the other two ships.”

China land grab on Lake Baikal raises Russian ire - FT $$ Comment: I can't remember how many times I have heard people say Russia stole the most territory from China...all that unpopulated land, fresh water, all those resources...Russians are right to be worried  // While Ms Ivanets’ petition claimed that 10 per cent of the town’s prime real estate had been bought by Chinese developers, Mr Sin’kov said: “Ten per cent is an exaggeration. It’s a lot less than that.” But he said that Chinese tour groups made a point of telling visitors that Lake Baikal — the world’s deepest freshwater lake — was part of China during the Tang and Han dynasties. “People here say this means they want it back,” said Mr Sin’kov.

Trump Steps Up Efforts to Check China Influence in Latin America - Bloomberg The U.S. Treasury Department took steps to check the Asian nation’s growing influence in the region last month, when it raised questions about Beijing’s overtures to Latin America’s multilateral lender. The U.S. is the largest shareholder of the Inter-American Development Bank at 30 percent, whereas China’s stake in the lender is a minuscule 0.004 percent. In a Dec. 19 letter obtained by Bloomberg, U.S. Under Secretary for International Affairs David Malpass asked IDB President Luis Alberto Moreno why he had selected China to host the bank’s 60th anniversary meeting next year. “I have serious reservations about the bank’s process that led to that initial decision, and I do not think the 2019 meeting could be nearly as successful in Beijing as it would be if held in the region,” Malpass wrote.

Designations Under the International Religious Freedom Act of 1998 - US State Department Today, the Department of State announces that the Secretary of State re-designated Burma, China, Eritrea, Iran, North Korea, Sudan, Saudi Arabia, Tajikistan, Turkmenistan, and Uzbekistan as Countries of Particular Concern on December 22, 2017.



Taipei protests after Beijing opens new aviation corridors over Taiwan Strait | South China Morning Post The mainland’s Civil Aviation Administration announced on its website that commercial aircraft could begin from Thursday flying south to north through the M503 air corridor, and using three connecting regional corridors. To ensure aviation safety, it said aircraft flying through those corridors will avoid existing aviation routes to and from Taiwan’s outlying islands of Matsu and Quemoy which lie just off the southeast coast of China.


Tech And Media

Google and Intel Beware: China Is Gunning for Dominance in AI Chips - WSJ $$ Past Chinese efforts to dominate the chip industry foundered because of poor technology and political interference. And the new crop of Chinese AI chip companies could still fail. They face formidable competition, from old hands like Intel and Qualcomm and deep-pocketed new entrants such as Apple Inc. and Alphabet Inc.’s Google. This time around, Chinese chip makers and some analysts say, the stars are aligning. China has the capital, the talent, a huge consumer market and—crucially—rafts of data that fuel AI programs. Another huge plus: the government has set its sights on making China an AI powerhouse.

Shares of Renren—China's forgotten social network—just jumped after ICO announcement · TechNode The spike came after Renren announced its plan to start an ICO project called RR Coin, “an open-source blockchain platform for social networks,” says the social networking company. Renren marks another top Chinese dot-com company after Xunlei that wants to reinvigorate their business through a blockchain dream. // Comment: more like scamscam

Didi’s Drive Overseas Moves Forward With Brazilian Acquisition - Caixin Global Chinese ride-hailing kingpin Didi Chuxing has acquired Brazilian peer 99 as Didi continues its overseas push, posing a challenge to U.S.-based Uber.

Beijing Suburb to Host Capital’s First Autonomous-Car Testing Zone - Caixin Global With the establishment of the testing zone in the town of Yizhuang, “the government will promote the development of autonomous driving technology by updating road facilities — such as signaling and marking — to enable ‘car and road synergy,’” an official from the Beijing Municipal Commission of Transport Commission told Beijing Communication Radio on Wednesday.


Society, Art, Sports, Culture And History

Chinese billionaire Richard Liu makes public appeal to help trace family history | South China Morning Post Richard Liu Qiangdong, founder and CEO of online retail giant, announced he was on a mission to find his family’s origins – at the request of his father – on his Weitoutiao social media account on Tuesday. Liu, who has been dubbed the “Jeff Bezos of China”, said in the post that he wanted to hear from other Lius who lived around Xiangtan county in the central province of Hunan if they had any information that could help him piece together his family tree.

Chinese blacklist an early glimpse of sweeping new social-credit control - The Globe and Mail "We are in dire need of rebuilding. We must rebuild social morality, business integrity, food safety, officials' power," said Lin Junyue, an academic sometimes called the founder of China's social-credit theory, which he has studied since the mid-1990s. Such a system, he said, can serve as a "fantastic" counterterrorism tool, promoting social stability and peaceful co-existence. "People who like it see me as a great contributor to a better society. People who disdain it accuse me of providing a digital tool for government to wield its power against people. I've heard voices of both sides."

Beijing Court Accepts Case Requiring China's Censors to Justify Ban of Gay Content | Hollywood Reporter Fan Chunlin, a 30-year-old man from Shanghai, filed a lawsuit Wednesday with Beijing No. 1 Intermediate People's Court demanding that China's State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) clarify the policy basis for a regulation introduced last summer banning depictions of homosexuality from online video platforms. The court accepted Fan's case and is now required to hold hearings and issue a decision within six months, the plaintiff's lawyer, Tang Xiangqian, told local state media.


Energy, Environment, Science And Health

China admits space lab will fall, but in 'controlled way' | Asia Times Tiangong-1's expected re-entry of the Earth's atmosphere will be closely controlled, says the China National Space Administration

China Becomes World’s Second-Largest Liquefied Natural Gas Importer in 2017 - Caixin Global China bought a total of 37.89 million metric tons (41.77 tons) of LNG from overseas last year, an increase of more than 48% from 2016, according to data compiled by the international energy and commodity information provider. Purchases in December alone reached 5.05 million metric tons, the highest-ever monthly volume since the country started importing LNG in 2006.



Beijing provides subsidies to kindergartens after child abuse case - Xinhua The municipal government said Wednesday that it would provide 1,000 yuan (154 U.S. dollars) per child a month to the city's first-class public kindergartens, and 700 yuan per child a month to other kindergartens. The government will for the first time also allow private kindergartens to join the kindergarten rating held by district education commissions. In the past, only public kindergartens could join the rating, which is often related to different levels of government subsidies.



Train Derails Two Days After Service Begins on Beijing Light Rail - Caixin Global “The new light train XJ003 was running out of track as it was leaving the Fragrant Hills station in the city’s west on Monday afternoon,” Beijing Public Transportation Group said in a statement on Monday night. The accident did not cause any injuries as the train had no passengers and only one driver at the time, the statement added.

Beijing to see record high residential land sale: report - Xinhua The city will sell 23 land lots for residential use to property developers from Jan. 4 to Feb. 6, the Securities Times reported, citing data from Centaline Property Research Center. The total construction area of the land will exceed 3 million square meters, larger than the same period in any previous year.

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