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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:

在反映该师抗美援朝战争期间激战松骨峰情况的展板前,习近平感慨地说,这一仗打得很激烈,官兵战斗作风很顽强。我军历来是打精气神的,过去钢少气多,现在钢多了,气要更多,骨头要更硬。

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:

蚂蚁金服上一次陷入声誉问题,是2016年11月的支付宝“圈子”事件。“圈子”是一款社交产品,其中“校园日记”和“白领日记”等社区中曾充斥许多低俗照片。芝麻信用参与的部分是,支付宝依据男性用户在芝麻信用上的得分,将浏览圈子内容的男性分成两个组别,得分高的用户组可以在“圈子”里的内容下留言评价,而得分低的用户组则只能给照片点赞,也可以给女性用户支付现金礼物。

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.

 黑龙江公布毛振华事件调查结果:管委会严重违纪违规

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:

知情人士透露,毛振华视频控诉背后的核心问题,是“企业办政府,政府办企业”这一制度安排下的政企不分,政府与民争利,导致矛盾激化

黑龙江首次启动机动巡视进驻省森工总局-新华网:

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 JBH.com, 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 - Gov.cn 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... 

去年12月28日,第一个全国智慧党建大数据平台试点正式上线。据介绍,该平台在中央组织部相关部门的指导下,由人民网舆情数据中心与四川省广元市苍溪县合作设计研发,涵盖党建大数据、在线通统一通信和舆情监测三大平台,以人民网打造的人民云为依托,以党员信息为基础,充分地将党建工作与大数据、云计算、移动互联网等新一代信息技术相结合,一个指尖上的全新数字化党建阵地正在苍溪焕发出蓬勃的生命力。

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.

 

Taiwan

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 JD.com, 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.

 

Education

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.

 

Beijing

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.

Saturday, December 30, 2017 

Seven China Themes For 2018

Today’s edition is a far from exhaustive look at some of the key trends I think will define China in 2018. I have unlocked it on the website so please feel free to forward to friends and colleagues. 

It has been a fun year for me, from your support for the the relaunch of the daily Sinocism China newsletter to my Axios weekly newsletter and its huge readership.

Happy 2018, and thanks for reading.


1. The Communist Party Leads Everything 

Xi Jinping is determined to reinsert the Chinese Communist Party (CCP) into all aspects of live in the People’s Republic of China. The CCP may not be as focused on “Communist” as it once was, but Marxism-Leninism is not dead in China. Xi views the restrengthening of the Party as key to preventing a USSR-style collapse and to achieving the “great rejuvenation of the Chinese nation”, as he has said repeatedly. 

The Party serves as the key lever for social, political, legal and economic control, and as the vanguard of increasing anti-foreign sentiment inside the PRC and influence operations globally. 

As Xi reiterated at the October 2017 19th Party Congress:

“Government, military, society and schools, north, south, east and west, the Party is the leader of everything 党政军民学,东西南北中,党是领导一切的”.

All of China’s domestic and foreign policies need to be viewed through the lens of the CCP and its goals. The CCP is far more than a simple political party, and its interests and goals are often inimical to those of its neighbors and of Western countries. 


2. Xi Jinping Is Large And In Charge

The recent Party Congress cemented Xi as the undisputed leader of the PRC, the “Chairman of everything”. The 19th Party Congress enshrined “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” as a new theoretical guide for the Chinese Communist Party.

Xi stacked the top leadership with his allies at the October Party Congress and at the first Politburo meeting after the Congress institutionalized the shift away from “collective leadership” of the last two decades with the new exhortation to “uphold the authority and centralized, unified leadership of the CPC Central Committee” and “safeguard Xi's position at the core of the CPC Central Committee and the whole Party”.

Xi’s power is far from unfettered but he is more of the “decider” than any single PRC leader in decades. That can be positive for moving quickly and forcefully, but the downside risks are significant if subordinates tend towards sycophancy and blind obedience instead of real policy debate. 


3. The PRC’s “Three Tough Battles”

The annual Central Economic Work Conference, held this year right before Christmas, introduced "Xi Jinping Thought on Socialist Economy with Chinese Characteristics for a New Era” and focused on “three tough battles”—controlling financial risks, targeted poverty alleviation, and reducing pollution. 

Expect much of the 2018 political and economic agenda to revolve around these three issues. 

Beijing recognizes it has a massive debt problem, and while absolute deleveraging is still not on the table there will be significant efforts to reduce and manage riskier debt. 

Poverty alleviation has long been a priority project for Xi and he sees it as key to maintaining support for the Communist Party and achieving the “great rejuvenation”. 

The PRC leadership has recognized that environmental degradation may pose the greatest risk to the Party’s continued rule. The ongoing crackdown on pollution is more real than it has ever been, though the incentives to pollute are still so great and the multi-decade degradation so massive that progress will be halting at best. The global goodwill towards the PRC’s efforts is significant as America’s abdication of climate leadership stands in stark contrast to the PRC’s real commitment to mitigating the huge damage it has done to its environment.

Remember: At the 19th Party Congress the CCP changed the “principal contradiction”, an overarching principle in a Marxist-Leninist system, from “ever-growing material and cultural needs of the people versus backward social production” set in 1981 to “between unbalanced and inadequate development and the people’s ever-growing needs for a better life”. This is not just empty rhetoric and is a clear indicator that Xi and the Party are serious about changing the PRC’s growth model. 


4. Big Data, AI and the Technology Revolution

The Chinese Communist Party has embraced technology, and specifically Big Data and Artificial Intelligence, as a key part of the Chinese government's blueprint for becoming a superpower and achieving "the great rejuvenation of the Chinese nation," while maintaining Communist Party control.

The PRC has huge data sets generated by nearly a billion Internet users, few legal restrictions on the use of that data, a rapidly growing pool of talented Chinese AI engineers and extremely government polices, including significant financial support.

This technology revolution can bring much good, including better health care, improved governance, more efficient transportation systems and enhanced pollution control.

It will also enhance surveillance and control capabilities in disturbing dystopian ways, as is already happening in the Xinjiang region, and potentially give the PRC an edge in the next great revolution in military affairs. 


5. Increasing US-China Frictions

President Trump’s approach to China has been far different than the tough “America First” program he promised on the campaign trail. Much of the difference is due to the crisis over North Korea’s weapons programs.

That looks to be about the change, for several reasons.

The Trump Administration’s National Security Strategy very clearly reframed the US government’s view of China:

For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of the sovereignty of others. China gathers and exploits data on an unrivaled scale and spreads features of its authoritarian system, including corruption and the use of surveillance. It is building the most capable and well-funded military in the world, after our own. Its nuclear arsenal is growing and diversifying. Part of China’s military modernization and economic expansion is due to its access to the U.S. innovation economy, including America’s world-class universities.

While Trump has been far more successful than his predecessors in pushing China to pressure North Korea, he believes China is not doing enough, and said so much on Twitter Thursday:

Caught RED HANDED - very disappointed that China is allowing oil to go into North Korea. There will never be a friendly solution to the North Korea problem if this continues to happen!

In an interview with the New York Times earlier this week Trump said:

I like very much President Xi. He treated me better than anybody’s ever been treated in the history of China. You know that. The presentations. … One of the great two days of anybody’s life and memory having to do with China. He’s a friend of mine, he likes me, I like him, we have a great chemistry together. He’s [inaudible] of the United States. …[Inaudible.] China’s hurting us very badly on trade, but I have been soft on China because the only thing more important to me than trade is war. O.K.?..

…I like China, and I like him a lot. But, as you know, when I campaigned, I was very tough on China in terms of trade. They made — last year, we had a trade deficit with China of $350 billion, minimum. That doesn’t include the theft of intellectual property, O.K., which is another $300 billion. So, China — and you know, somebody said, oh, currency manipulation. If they’re helping me with North Korea, I can look at trade a little bit differently, at least for a period of time. And that’s what I’ve been doing. But when oil is going in, I’m not happy about that. I think I expressed that in probably [inaudible].

Trump has been consistent for decades in his assertions that China has been ripping America off; the last year of relatively calm rhetoric has been an anomaly.

The “America First” trade contingent in his administration, led by US Trade Representative Robert Lighthizer, looks to be in the ascendance, and if Director of the National Economic Council Gary Cohn leaves the White House soon, as is much rumored, there will be few people left in the White House to push back on a much more confrontational approach to trade. Several trade actions are in the planning stages and they will likely hit soon. 

Beijing does not want a trade war but it will fight back, causing pain to some large US firms as well as quite possibly propagandizing US actions into further proof of the much believed claims of an American plot to keep China down.


6. No Prospects For A “Friendly Solution” To North Korea Crisis

If the near-term US goal really is denuclearization then it will fail. 

Expect North Korea to still have nuclear weapons by the end of 2018, and possibly the capability to strike all of the US with a nuclear-tipped missile. 

Kim Jong-un learned the lessons of Iraq and Libya and will not willingly give up nuclear weapons.

Sanctions will likely not bring about the collapse of the regime, especially since the PRC, as much as Xi Jinping dislikes Kim Jong-un, does not want to see chaos in North Korea, or a reunited Korean peninsula under South Korean leadership. 

If the US decides China is not doing enough, as yesterday’s tweet from President Trump suggests, a likely next step is US sanctions against more important Chinese individuals and firms, including systemically important financial institutions. Such sanctions would likely lead Beijing to reevaluate its cooperation with the US, especially given the increasing trade tensions. 

The remaining options are for the US are:

  1. Continue to pressure North Korea but focus on deterrence, including accelerating the arms race in Asia by introducing nuclear weapons to Japan and possibly South Korea, while toning down the rhetoric as the Presidential emphasis on the North Korea treat only seems to embolden Kim Jong-un;

  2. Negotiate directly with North Korea with the recognition that the best outcome will be some sort of freeze on the North’s weapons development;

  3. Launch a military strike, which could very easily lead to another disastrous war in Asia that could kill hundreds of thousands and tip the strategic balance in the region in favor of the PRC. 

President Trump has made North Korea the defining foreign policy challenge of his Presidency. A “status quo” or even a “freeze” would be a failure given his rhetoric, so either he ends up looking like a paper tiger or the risk of military action only increases into 2018.


7. PRC Influence Abroad


Xi Jinping has led the PRC to be much more assertive in foreign policy. That will continue as the country grows in confidence and power, and as it sees increasing opportunities to capitalize on the vacuum and discord created by Trump’s “America First” policies.

The concept that Xi and the CCP are pushing is “Chinese diplomacy in the new era is to promote the construction of a new type of international relations and a community of shared future”.

Beijing’s efforts are not welcomed by all but in the absence of constructive American leadership, especially around China’s periphery, targeted countries will increasingly gravitate towards China, even as some Asia nations try to strengthen inter-Asian alliances. 

But there is increasing Western pushback against PRC influence and its attempts to reshape the global environment to accommodate CCP values. Australia and New Zealand have had significant political brouhahas around PRC political influence operations and there are efforts underway in the US, Australia and the EU to further regulate PRC investments, media activities and lobbying efforts. People need to be careful this does not tip over into another spasm of anti-Chinese racism, something which unfortunately has a long history in the West, and that is the main reason I prefer to call it “PRC influence” or “CCP Influence”. But it is a very real problem, and a significant priority for the CCP, so in the absence of concerted action CCP influence will only increase.

What to expect in 2018: Growing influence for the PRC across the developing world and especially in Asia and Central Asia, while Western countries take a much harder line against CCP efforts to influence media, politics and the Chinese diaspora in their countries. 


Apologies if I sound a bit pessimistic. I would like to be much more optimistic but after all those years living in Beijing I learned the importance of seeking truth from facts 实事求是。

I hope I am wrong and we all have a happy and peaceful 2018. Thanks for reading.

Wednesday, December 13, 2017 

President Moon Arrives In Beijing; Tillerson Discloses Contingency Discussions With Beijing Over North Korea "Instability"; Nanjing Massacre Commemoration, Xi Inspection Tour In Jiangsu; Google Opens China AI Lab

Today is the 80th anniversary of the terrible Nanjing Massacre by the Japanese. There were commemorations across China that dominated the news. Xi did use the trip to the commemoration in Jiangsu to make an inspection tour as well. More below in the Essential Eight.

The Essential Eight

1. Today In The North Korea Crisis

Comment: South Korea President Moon has arrived in Beijing, and US Secretary of State Tillerson says the US is willing to negotiate without preconditions, though it is far from clear if President Trump supports that position.

On "Meeting the Foreign Policy Challenges of 2017 and Beyond" - he 2017 Atlantic Council-Korea Foundation Forum - Tillerson Transcript:

Q&A:

When do the talks begin? We’ve said from the diplomatic side we’re ready to talk anytime North Korea would like to talk, and we’re ready to have the first meeting without precondition. Let’s just meet and let’s – we can talk about the weather if you want. We can talk about whether it’s going to be a square table or a round table if that’s what you’re excited about. But can we at least sit down and see each other face to face? And then we can begin to lay out a map, a roadmap of what we might be willing to work towards. I don’t think – it’s not realistic to say we’re only going to talk if you come to the table ready to give up your program. They have too much invested in it. And the President is very realistic about that as well…

And one of the real values of these new high-level dialogues and the diplomatic and strategic dialogue that Secretary Mattis and I chair with our counterparts, and we actually have included Joint Chief of Staff Chairman Dunford, General Dunford, and his counterparts from China as well. These are the subjects of these dialogues, and to try – for us to gain an understanding of, first, how credible do we think the Chinese concern is about a mass flow of refugees across the border in the event of a regime collapse. China is taking steps to prepare for such an eventuality. I think it is something that they can manage. I don’t think the threat is as significant as perhaps others view it. I don’t want to be dismissive of it, but it’s not an unmanageable situation. And they already are taking preparatory actions for such an event.

We also have to – have had conversations about in the event that something happened – it could happen internal to North Korea; it might be nothing that we from the outside initiate – that if that unleashed some kind of instability, the most important thing to us would be securing those nuclear weapons they’ve already developed and ensuring that they – that nothing falls into the hands of people we would not want to have it. We’ve had conversations with the Chinese about how might that be done.

Comment: Disclosure of contingency discussions with Beijing is very interesting, and will not please North Korea.

South Korea, U.S. and China Unite to Give Talks With North Korea Another Chance - WSJ:

For Beijing, friendlier ties with Seoul strengthen its hand in nudging Washington toward accepting Chinese proposals for direct talks with Pyongyang, said Cheng Xiaohe, an associate professor at Renmin University in Beijing.

With U.S. Secretary of State Rex Tillerson opening the door to direct talks with North Korea, “there’s a loosening of positions” that sets up the Xi-Moon summit as an opportunity to “discuss how to sustain this momentum toward negotiations,” Mr. Cheng said.

Mr. Tillerson’s Tuesday comments included assurances that U.S. troops would stay away from the Chinese border in the event of regime collapse in North Korea—remarks that Chinese analysts call an important concession to Beijing.

“It might encourage China to actively help, for example by putting direct pressure on North Korea to accept the offer,” said Su Hao, an international relations expert at Beijing Foreign Studies University.

Comment: I think some of the analysts may be getting ahead of themselves.

White House responds to Tillerson: Trump’s position on North Korea hasn’t changed | TheHill:

The White House pushed back after Tillerson's statement earlier in the day that the U.S. diplomatic community was ready to meet face-to-face with North Korean leaders for diplomatic discussions "without precondition."

The remarks appeared to be a break from the administration's position that serious discussions would require that North Korea make an effort to denuclearize.

Moon Jae-in arrives in China seeking reconciliation - CGTN:

Since October, relations have begun to improve. Seoul has pledged to not expand THAAD, and Chinese tour operators and companies are relaxing measures – including a ban on group tours to South Korea. But most analysts said a permanent solution to economic issues would rely on a permanent solution to denuclearizing the DPRK.

A roadmap for more sanctions-The ForEx Effect US Dollars, Overseas Networks, and Illicit North Korean Finance — C4ADS:

In this report, we build on the findings of our previous research to conduct an in-depth examination of the structure of North Korean illicit networks through their ties to the foreign exchange system. We focus in particular on the networks surrounding North Korea’s major foreign exchange banks, which, tasked with the management of hard currency, have found themselves serving as a financial lifeline for the regime. Our report finds that this financial structure is reliant on a system that North Korea cannot control and is therefore vulnerable to systemic disruption.

South Korea Maneuvers Between China and The U.S. | Tokyo Business Today - Daniel Sneider:

“President Moon might be supporting this double freeze agreement, at least to a certain extent” says Lankov. “However, it remains an open question whether such support can be expressed openly since it might annoy President Trump and his close advisors.

On top of that, the double freeze in the strict sense, that is a complete halt to the joint military exercise, is not really acceptable for the South Korea side. South Korea, however, will probably be happy to see the joint military exercises downsized or even temporarily put on hold as long as the North Koreans reciprocate.”


2. Nanjing Massacre Remembrances

Chinese, Japanese people should cherish hard-won peace: Yu Zhengsheng - Xinhua:

Yu said China was holding the memorial ceremony to commemorate the Nanjing Massacre victims, compatriots killed by the Japanese invaders, national heroes who sacrificed their lives for victory, as well as international soldiers and friends who joined the Chinese in fighting.

"The commemoration is meant to proclaim the Chinese people's firm stance in maintaining peace and their sublime aspiration for peaceful development," he said.

Yu said the Chinese people would always remember the humanitarian help from foreign friends

CCTV News video from the Nanjing ceremony—习近平等出席南京大屠杀死难者国家公祭仪式_央视新闻客户端

China marks Nanjing Massacre anniversary but Xi low key - Reuters:

A sombre Xi, wearing a white flower in his lapel to symbolise mourning, stood in the audience but did not speak.

Xi on 80th anniversary of Nanjing Massacre: Let history guide future path - CGTN:

Chinese President Xi Jinping called on people to learn from history to lead a better future on Wednesday, as the country marked the 80th anniversary of the 1937 Nanjing Massacre.

Xi made the remarks when meeting with survivors of the Nanjing Massacre and relatives of foreigners who helped China in the war against Japanese aggression.

"Jun Sheng voice of the PLA" commentary in PLA Daily on the Nanjing Massacre Anniversary-钧声:历史不会远去 真相不会磨灭 - 中国军网 :

今天的世界,应坚持共同、综合、合作、可持续的新安全观,营造公平正义、共建共享的安全格局,共同消除引发战争的根源,携手建设远离恐惧、普遍安全的世界。中日两国人民应该世代友好下去,以史为鉴、面向未来,共同为人类和平作出贡献

Wartime sex slaves still emerging in China, but some will take secret to the grave | South China Morning Post:

Liu Guangjian, from the Memorial Hall for Victims in Nanjing Massacre by Japanese Invaders, has been researching the “comfort women” issue for the two-year-old, government-run Comfort Women Museum in Nanjing.

He said there were only 15 Chinese survivors left, the last of the comfort women who had testified publicly in China. He visited seven in Hainan last year, but two had since died.

Comment: Many websites went black and white for the day.

Baidu:

People’s Daily:


3. Xi Jinping Goes On An Inspection Tour In Jiangsu

President Xi inspects east China's Xuzhou - Gov.cn - Pictures

President Xi urges innovation in manufacturing sector - Xinhua:

"Innovation is the source of business core competitiveness," Xi said, during a two-day inspection tour in Xuzhou, eastern China's Jiangsu Province.

CCTV Evening News 17 minute report on the tour-习近平在江苏徐州市考察时强调 深入学习贯彻党的十九大精神 紧扣新时代要求推动改革发展

Comment: Xi's Xuzhou Construction Machinery visit looks to be about SOE reform, the real economy, innovation and smart manufacturing; other stops look to be intended to highlight environmental protection and restoration, technology's role in improving local government governance, the war on poverty and the PLA's glorious history.

Xi also watched a performance by a local troupe about the spirit of the 19th Party Congress. I hope the song and dance starting at about 11:00 of the CCTV broadcast does not become a "thing". So far does not look like a Mao-era "loyalty dance" but the inclusion of that bit on the CCTV broadcast is not a great sign as it makes it look like Xi endorses it and so do not be surprised to see lots of sycophantic and opportunistic copying.

Ding Xuexiang, Liu He and Xu Qiliang were named as accompanying Xi. Expect lots more on this trip as the exhortations to study it begin.


4. Another Beijing Fire, Beijing Party Secretary Meets Migrants And Says He Cares About Them Will This Beijing Corruption Crackdown? 

Beijing Party Chief Meets With Delieverymen After Demolition Campaign Backfires - Caixin Global:

Cai, along with Beijing Mayor Chen Jining, later visited a garbage collection depot to meet a couple, from the southwestern province of Sichuan, who have worked as street cleaners in the Chinese capital for nearly a decade.

Cai acknowledged that they deserve “due respect and gratitude” for their contribution to the community.

The public relations exercise came amid growing criticism of a government crackdown on “illicit and unsafe buildings” that has emptied several neighborhoods home to mostly migrant families. But it isn’t clear whether it signals a stop to evictions and demolitions or whether the government will change its heavy-handed approach.

Latest fire in Chinese capital kills five despite safety blitz - Reuters:

The Beijing fire service said in a short statement the fire in a house in Baiqiangzi village was caused by an electric bike. It said eight people were injured and taken to hospital.

北京朝阳一村民自建房发生火灾 5人死亡8人受伤 

Comment: Great videos in this article, will be test of the surveillance state to see how long Hua Long can avoid arrest - Artist Flees Beijing After Filming Devastation of Mass Evictions - The New York Times:

When Hua Yong, a painter in Beijing, first witnessed the eviction of hundreds of thousands of migrant workers from the Chinese capital last month, he worried no one would believe the scope of it...

Last week, Mr. Hua, like many of the people he has filmed, was forced to leave Beijing. He fled the city after the police came to arrest him for publicizing the evictions. He has relied on friends to move him “from city A to city B,” he said in a video posted Sunday..

Political Impact: Cai Qi recently inherited a Beijing with lots of unresolved issues around urban planning, migrants and dangerous and illegal housing. The housing component especially was allowed to fester because of a focus on higher end real estate development as that is where the money is, for developers and corrupt officials.

The brutal evictions and the subsequent damage to Party credibility may have paused some things, but do not expect a real change in the longer term policy to control Beijing’s population.

It is also worth pointing out that the corruption crackdown under Xi has yet to hit Beijing officialdom in a massive way as it has other big cities. That is not because there has not been corruption in Beijing; Beijing is an especially sensitive and complicated political environment. I would not be surprised to see these recent events used as a catalyst not only to clean house among municipal officials but also to go after one or more tigers who spent time in senior Beijing positions. Remember, Sun Zhengcai was once the Shunyi District chief; his case predates the recent migrant cleansing but if he talks, and they seem to all end up talking after time in the rubber room, there may be some nervous officials with a history in Beijing.

Consider this speculation on my part encouraged by a few bits of random but credibly sourced rumors, as well as the fact that Beijing really is overdue for a corruption crackdown and Cai, as a Xi ally and enforcer, could find political benefit in a corruption crackdown/purge.


5. Crackdown On Coal Has Improved The Air

Beijing region sees record breaking drop in winter air pollution - Greenpeace:

Air quality in the Beijing region was better in November than any previous winter month on record, data shows...

The government permitted areas without alternative heating installed to continue using coal, ordered the restart of mothballed coal-fired units at a Beijing power plant, and urged local governments to curtail gas supply to industrial users if needed to secure supplies for residential users.

These emergency measures will provide relief to residents lacking heating, but are unlikely to increase coal-burning on a scale that would undermine the air quality gains.

Chinese province admits homes left freezing after overzealous coal ban | South China Morning Post:

The northern Chinese province of Hebei has admitted that it massively exceeded its target in an overzealous ban on the use of coal to heat rural homes and switch to natural gas and electricity...

Jiao Shiqing, an official with Hebei’s housing and urban development department, said during a meeting with the local press on Monday that the province had switched 2.3 million rural households to gas and another 0.2 million to electricity this year – 27 per cent more than the target of 1.8 million...

Lei Yu, an official at the environment ministry, told the financial news organisation Caixin that local governments’ aggressive beating of their targets might be motivated by financial subsidies and an urge to prove their performance.

“The country currently has [financial] support for the switch to gas and electricity from coal, but future subsidy policy is still unclear so some local governments want to push ahead the programme while there are still subsidies,” Lei was quoted as saying.

Comment: More mindless pursuit of quotas and positive evaluations from superiors. Not a proud moment for the "meritocracy" of Daniel Bell's descriptions...


6. Google Can't Resist China AI Craze, Opens Lab In Beijing

Comment: Google had scaled back its operations but never really left, as it has harvested billions in ad revenue from Chinese firms targeting overseas customers in the years since announcing it was taking a new approach to China. The AI lab will not give Google a renewed consumer presence in China.

Opening the Google AI China Center - Google Blog-Post by Fei-Fei Li Chief Scientist AI/ML, Google Cloud:

I believe AI and its benefits have no borders. Whether a breakthrough occurs in Silicon Valley, Beijing or anywhere else, it has the potential to make everyone’s life better for the entire world. As an AI first company, this is an important part of our collective mission. And we want to work with the best AI talent, wherever that talent is, to achieve it.

That’s why I am excited to launch the Google AI China Center, our first such center in Asia, at our Google Developer Days event in Shanghai today. This Center joins other AI research groups we have all over the world, including in New York, Toronto, London and Zurich, all contributing towards the same goal of finding ways to make AI work better for everyone.

TensorFlow opens an official WeChat account, latest in a string of Google comeback attempts · TechNode:

TensorFlow is getting its own official WeChat account, Google announced at a developers’ conference today in Shanghai, our sister paper reported. TensorFlow is an open source library for dataflow programming and machine learning, such as neural networks. This move is the latest sign of Google feeling for ways back into China.


7. Holistic Concept Of State Security

Comment: A fascinating report by an excellent young scholar. One question I have is how will Google ensure that none of its AI research finds application in China's security apparatus?

MERICS China Monitor No. 44 - Programming China: The Communist Party’s autonomic approach to managing state security

In this China Monitor, Samantha Hoffman, independent consultant and MERICS Visiting Academic Fellow starting in January, investigates the use of new technologies to secure the Communist Party’s monopoly on power. Hoffman analyzes China’s “holistic concept of state security.”

The goal is a self-regulating system capable of pre-empting external as well as internal threats to the party-state. This happens through the process of "social management,“ which creates a feedback loop between the party and society, similar to Mao Zedong’s "mass line.“ Hoffman argues that in the modern application of this process, China’s leadership relies on approaches from complex systems engineering theory.


8. Is The "China Fantasy" Over In All But The Most Diehard "Panda Hugger" Circles?

Comment: Andrew Browne addresses it in his latest column, though strangely does not mention that James Mann wrote an excellent book about this 10 years ago--"The China Fantasy". Mann was an outlier back then but now his view seems to be near consensus.

The West Faces Up to Reality: China Won’t Become ‘More Like Us’ - WSJ:

That mythical prospect—that China will become “more like us”—has held up debate in the liberal West about the larger questions posed by China’s economic and military ascendancy.

Some history: I wrote about this theme and Mann's book in 2011 in this Sinocism post-  James Mann And His Prescient Book “The China Fantasy”. The writing has been on the wall for years if you have been paying attention, and this is another reminder that these trends long predate Xi Jinping. Now that consensus seems to be forming across the Western business and political classes, what is to be done?


Business, Economy, Finance And Trade

中央经济工作会议将于18-20日召开 重点是降负债|中央政治局|中国中央|负债_新浪财经_新浪网 official confirmation that the Central Economic Work Conference will start December 18, says focus will be on deleveraging

Provincial Snapshot—Liaoning: A Microcosm of Broader Policy Failures in Tackling China’s State Sector Debt - MacroPolo Liaoning’s economy is beset by a concentration of inefficient state firms—a fact highlighted in the first post in this provincial snapshot series, which focuses on this northeastern rustbelt province. Indeed, some of Liaoning’s state-owned enterprises (SOEs) are in such dire straits that a single state-led bailout has been insufficient. Not surprisingly, then, dealing with inefficient or failing SOEs has been a central preoccupation of provincial economic policy for decades. This second piece in my Liaoning series digs deeper into the SOE problem, looking at what’s happened to these Liaoning firms and then exploring some of the ways that they reflect national-level failures in dealing with endemic problems that plague China’s state sector.

深化国有企业改革--专题报道-人民网 Xiao Yaqing on page 7 of the 12.13 Pelple's Daily on deepening SOE reform

No Concessions in Asset-Management Rules, Sources Say - Caixin Global Chinese regulators are determined to tame the wild west of the country’s $15 trillion asset-management industry through overarching rules, brushing aside resistance in the market, sources close to the regulatory bodies told Caixin. “Some institutions are putting pressure on the regulator by all means to lobby for more relaxed regulations,” one source said. But the regulators are resolute in forging tighter scrutiny over the industry, the source said.

Noncompliant P2P Lenders to Be Out by Mid-2018 - Caixin Global Local banking regulators have until the end of June to weed out noncompliant peer-to-peer (P2P) lenders, according to a circular issued by a special working group led by the China Banking Regulatory Commission (CBRC). The working group’s years-long campaign to inject discipline into the 1 trillion yuan ($151 billion) P2P lending market is approaching an advanced stage. The watchdog aims to install unified regulations and evaluation metrics, which will be adopted by local regulators, to oversee the thousands of P2P lenders scattered across the country

Central Bank targets 40 illegal online currency trading platforms | Asia Times The Jinan Branch of the People’s Bank of China has released a list of 40 online platforms suspected of conducting illegal currency trading. Non-bank payment institutions have been ordered to immediately stop providing digital payment solutions to these platforms, Jiemian.com reported.

US, EU, Japan Slam Market Distortion in Swipe at China - VOA The United States, European Union and Japan vowed Tuesday to work together to fight market-distorting trade practices and policies that have fueled excess production capacity, naming several key features of China's economic system. In a joint statement that did not single out China or any other country, the three economic powers said they would work within the World Trade Organization and other multilateral groups to eliminate unfair competitive conditions caused by subsidies, state-owned enterprises, "forced" technology transfer and local content requirements.

Bonds Backed by Rent Payments to Hit Interbank Market - Caixin Global China Merchants Shekou Industrial Zone Holdings Co. Ltd. has recently obtained approval to raise up to 20 billion yuan ($3 billion) from selling asset-backed notes (ABN) exclusively to financial institutions, the self-regulatory body National Association of Financial Market Institutional Investors (NAFMII) said in a statement on Monday. The notes will be secured by the rental income from two high-end serviced apartment developments in the southern city of Shenzhen over the next 15 years, NAFMII said.

 

Politics, Law And Ideology

Chinese city of Dalian still ‘poisoned’ by Bo Xilai’s legacy of corruption, watchdog says | South China Morning Post Despite the passage of time, inspectors from the provincial anti-corruption watchdog are in no doubt that the dark stain Bo left on Dalian has yet to be wiped clean, according to the Capitalnews WeChat account operated by Beijing Daily. “There are many major problems within the Dalian party committee,” the inspectors were quoted as saying. “They [the city’s leaders] have not thoroughly removed the poison left by Bo Xilai, or the practices that flout [party] discipline, such as officials getting promotions through bribery and personal connections.”

Peter Lorentzen on the Politics of Protest in China | ChinaEconTalk Podcast Peter Lorentzen, professor of economics at the University of San Francisco, talks protests and provincial politics. We start by discussing 'Designing Contentious Politics in Post-1989 China,' which uses game theory to analyze and explain how the CCP responds to on-the-ground protests. Next, we take on his 'Racing to the Bottom or to the Top? Decentralization, Revenue Pressures, and Governance Reform in China' and explore what actually drives municipal responses to orders from on high.

China: Minority Region Collects DNA from Millions | Human Rights Watch Chinese authorities in Xinjiang are collecting DNA samples, fingerprints, iris scans, and blood types of all residents in the region between the age of 12 and 65, Human Rights Watch said today. This campaign significantly expands authorities’ collection of biodata beyond previous government efforts in the region, which only required all passport applicants in Xinjiang to supply biometrics.

MERICS China Monitor No. 43 - Central Planning, local experiments The complex implementation of China’s Social Credit System The authors analyze the current stage of the system’s implementation and they describe how it will likely function in practice. Their analysis is based on government publiations, discussions in media and social networks, as well as pilot projects.

Number of Jailed Journalists Hits Record High, Advocacy Group Says - The New York Times After Turkey, with 73 jailed journalists, China, with 41, and Egypt, with 20, the countries with the most journalists in prison were Eritrea (15), Vietnam and Azerbaijan (10 each), Uganda (8), Saudi Arabia and Syria (7 each), Bahrain (6) and the Democratic Republic of Congo, Ethiopia, Iran and Russia (4 each).

 

Foreign and Military Affairs

On "Meeting the Foreign Policy Challenges of 2017 and Beyond" - he 2017 Atlantic Council-Korea Foundation Forum - Tillerson Transcript Comment: from Tillerson’s prepared comments// In Southeast Asia, we had a – we put forth a policy here not too long ago of a free and open Indo-Pacific, and this was built on the back of some of our views about China’s One Belt, One Road policy. China’s One Belt, One Road, we understand, is a policy they have to continue their economic development, and our policies do not seek to contain China’s economic development. But China’s economic development, in our view, should take place in the system of international rules and norms, and One Belt, One Road seems to want to define its own rules and norms. I like to quote Secretary Mattis’ comment on One Belt, One Road. For China, he said: Well, the U.S. and the rest of the world has many belts and many roads, and no one country gets to decide what they are. So a free and open Indo-Pacific means all countries have access to continue their economic development and free access for trade through the region. // Comment: China not pleased with the Indo-Pacific idea

West's anxieties grow as they recognize China's achievements: experts - Global Times: "China constantly makes remarkable progress in its economic development and other social areas. It poses a serious challenge to the West which considers their democratic theories and practices as the only true path," said Su Wei, a professor at the Party School of the CPC Chongqing Municipal Committee. "Some dark-minded Westerners, instead of making efforts to study or understand China or the Communist Party of China (CPC), choose to demonize and smear China with clichés and groundless accusations," Su told the Global Times on Tuesday. // Shrill Response To Australian Exposure Of PRC Influence likely to backfire, don't think Australians like being threatened and bullied

Bennelong byelection: Tone of Sydney's Chinese media shifts amid foreign interference furore: As attacks by the Coalition on Sam Dastyari over his association with Chinese government-linked donors ramped up over the past few days, the People's Daily, a major Chinese state-controlled outlet, took a hard line against the Australian government, publishing an opinion piece on Monday decrying the debate as racist and urging the government and media to "discard their political biases and prejudices." After that piece was published, the tone of coverage of the byelection rapidly began to change in Australian-based Chinese media. That coverage may prove crucial in the election on Saturday, as Bennelong has the highest percentage of Chinese-Australians of any seat in the country.

Trump Adviser Calls Russia and China ‘Threats’ to U.S. Liberty - Bloomberg China, meanwhile, is engaged in “economic aggression” to challenge a global economic order that “helped lift hundreds of millions of people out of poverty,” McMaster said. Trump has tried to forge a relationship and something of an alliance with Chinese President Xi Jinping to help curb North Korea’s nuclear weapons program, an effort that has so far proved unsuccessful. // Comment: New US National Security Strategy to drop Monday, will be very interesting to read what it says about China

These 36 Chinese Naval Officers Have Tied the Knot in a Group Wedding | What's on Weibo The collective warship wedding of 36 naval officers of the East China Sea Fleet has drawn the attention of Chinese netizens. Besides a romantic event, the wedding spectacle is also a propaganda opportunity to stress the importance of the Chinese Dream and building a powerful military.

The North Korean Nuclear Threat: The View From Beijing - Carnegie-Tsinghua Center - Carnegie Endowment for International Peace In this episode of the China in the World podcast, Paul Haenle joined Carnegie Vice President for Communications and Strategy Jen Psaki on the Carnegie Endowment’s DiploPod podcast to discuss Chinese perspectives on North Korea and the outcomes of Trump’s visit to Beijing.

China calls for Confucius institutes to make improved contribution - Xinhua Chinese Vice Premier Liu Yandong has called for Confucius institutes to tailor their teaching to local conditions and contribute to "building a community with a shared future for mankind." Liu made the remarks at a conference on Confucius institutes Tuesday in Xi'an, capital of northwest China's Shaanxi Province. Nearly 2,500 delegates, including university presidents and representatives of Confucius institutes from more than 140 countries and regions, attended the annual event.

社评:西方想让中国放手抓它们“间谍”吗_评论_环球网 有哪个西方国家能够承受与中国的交流规模真的下降?大概不会有谁愿意承受这一损失。它们损害中国名誉时不加克制,是因为觉得不会因此而有代价。所以中国要研究不大动干戈,但却能让污蔑中国的西方机构和个人感觉到“痛”的策略。

Isis use of hobby drones as weapons tests Chinese makers - FT $$ Bombmaking workshops run by Isis have weaponised X-8s and other drones such as the Phantom, made by Shenzhen-based DJI, the world’s largest commercial dronemaker. Some hobby drones now boast formidable capabilities, with 7km ranges and payloads up to 40kg.

Air Force planes fly patrols across strategic waterways - ChIna Daily The formation consisted of H-6K bombers, Su-30 and J-11 fighter jets and reconnaissance, early warning and tanker aircraft, Senior Colonel Shen Jinke, spokesman for the People's Liberation Army Air Force, said at a meeting of senior Air Force officers. The meeting's key points were released on Tuesday. "The Chinese Air Force is modernizing to become a strategic combat force capable of fighting in all of China's domain," he said. "We must expand our strategic outlook in systematic far-sea exercises, keep a sober mind, improve emergency awareness and safeguard strategic interests."

 

Tech And Media

Yearender-China Focus: From follower to leader: China emerges at high-tech frontier - Xinhua After years focusing on innovation, China caught up fast. From artificial intelligence and genetic engineering, to mobile payments and bike-sharing, Chinese firms are pulling ahead of their rivals. Jeremy Rifkin, an economic observer and author of the New York Times bestseller "The Third Industrial Revolution," said China was becoming a global leader in the new revolutionary tide.

Beijing eyes high-tech cybersecurity industrial park | Asia Times The Ministry of Industry and Information Technology has signed an agreement with the Beijing government to co-found a national cybersecurity industrial park in the city, Yicai.com reported. The industrial park is expected to stimulate GDP growth of more than 330 billion yuan (US$49.8 billion) by 2020, to develop a 100-billion-yuan market for cybersecurity in Beijing, and to nurture at least three backbone enterprises with annual revenues of over 10 billion yuan.

LeEco co-founder Jia Yueting—who took on Apple (AAPL) and Tesla (TSLA)—is now on China’s blacklist of defaulters — Quartz Yesterday (Dec. 11), China added Jia’s name to its official database for debt defaulters, after a court in Beijing ruled that he owes around 480 million yuan ($73 million)—including interest and late fines—to Ping An Securities, an investment arm of China’s second-largest insurer. The information is published on shixin.court.gov.cn, and searchable by anyone. Jia is now arguably the best-known individual on the list. In September, two LeEco subsidiaries were also added to the list.

Harvey Weinstein’s Hong Kong associate Bey Logan accused of sexual misconduct | South China Morning Post British-born martial arts enthusiast Bey Logan, a former Asia vice-president of the Weinstein Company, has been accused of “inappropriate behaviour” by seven women, including former Indonesian-Chinese actress Sable Yu, who starred in the unfinished Logan-helmed film Snowblade.

Chinese tech firm told ‘stop watching us’ after footage from security cameras is broadcast via live-stream | South China Morning Post Qihoo 360 criticised for sharing footage from its surveillance cameras without knowledge of those being filmed

China’s rich kids splash out on tech - FT $$ As the fuerdai look to California to learn tech-investing techniques, their quest is also part of a much bigger process — the maturation of China’s private capital investment scene. China’s wealth was all created relatively recently, during the 30 or so years since the leaders of the communist country liberalised the economy.

China to spearhead US$1 trillion autonomous driving revolution | South China Morning Post 290 cities have initiated ‘smart-city’ pilot projects, including 93 that are focused on mobility that could potentially use infrastructure interlinked by software to allow driverless cars, or autonomous vehicle and shared-driving models

The Gold Rush for In-Feed Ads - Caixin Global China’s digital advertising market has long been dominated by web giants Alibaba Group Holding Ltd. and Baidu Inc. — and it still is. But news aggregation platform Toutiao has risen to become the most successful new player to tap into this new native-ad trend. Last year, the 5-year-old startup reported revenues of 6 billion yuan ($909 million) on in-feed ads. This comes after two consecutive years of double-digit revenue increases, as the company increasingly recognized this ad type as its key business model.

Racy Virtual-Reality Assistant Pulled After Questions Raised - WSJ Baidu’s iQiyi apologizes for flirtatious secretary ‘Vivi’ and says the avatar was in beta testing

 

Energy, Environment, Science And Health

China responds to U.S. "back to the moon" plan - Xinhua "China is glad to see countries making progress in the exploration and use of outer space for peaceful purposes," Foreign Ministry spokesperson Lu Kang said at a routine press briefing.

Apple and Wal-Mart Are Helping China Crack Down on Polluters - Bloomberg Ma’s strategy -- backed by Alibaba Group Holding Ltd. -- is to scrape real-time data off government websites that compile readings from effluent monitoring equipment at some 13,000 of the worst water polluters. The data is then aggregated on an app called Blue Map. Factories caught cheating face repercussions. Ma’s non-profit organization has caused some to be banished from Apple’s supplier list, be denied a desired credit rating to issue bonds or even be deprived of bank loans. For Ma, that’s more effective than starting protests or lobbying local governments, which tend to raise the ire of authorities in China.

Company Accused of Running Empty Buses for Green Subsidies - Sixth Tone Over a hundred passengerless coaches have taken to the streets of Linfen, Shanxi province, allegedly to rack up enough miles to secure the extra funds. Residents told Beijing Time that the buses, operated by Linfen Xinyu Tourism Co. Ltd., have been running from roughly 8 a.m. to 5:30 p.m. every day since October, with only a driver aboard.

 

Beijing

Beijing Will Open Sub-Central Business District in Tongzhou, Relocating 400,000 Workers | Yicai Global Beijing will open a sub-central business district in Tongzhou in the city’s southeast next week. Many government agencies will relocate there, bringing 400,000 workers with them.

Routes, stops of intercity line linking Beijing-Xiongan revealed - China Daily An intercity line linking Beijing and Xiongan will stop at 5 stations, according to its environmental impact report released by China Railway Design Corporation on Tuesday. And the report also indicated that at least 4 high-speed or intercity railway lines will pass through the New Area.

Sanlitun's Faltering Yashow Taken Over by Swire, Set to Become Taikooli West | the Beijinger Half a year after its closure, there's finally word on what will become of Sanlitun's white elephant. Yashow, once the go-to for bargain hunters across Beijing, will be taken over by property behemoth Swire and Kuntai, who will renovate it (yet again) and transform it into Sanlitun Taikooli West, reports Toutiao.

Tuesday, November 7, 2017 

"Peking Duck Summit"; Wang Qishan In People's Daily, New Head of United Front, Wang Huning As Xi's Brain; Deleveraging with Chinese Characteristics-Sinocism 11.07.17

President Trump will get a tour of the Forbidden City Wednesday afternoon and then have a family dinner with Xi Jinping and Peng Liyuan. It is not clear if Jared Kushner will attend the family dinner. First Lady Melania Trump is apparently scheduled to return to the US from Beijing on Friday afternoon, after some additional sightseeing Friday.

North Korea will be at the top of the agenda. Trump just said in South Korea that “President Xi has been very helpful. You’ll find out how helpful soon.” It would make sense that Xi may try to take some initiative, to get out front of the US. There is no question that the Trump administration pressure has moved Beijing further than any previous US administration, so for that Trump deserves credit.

Expect lots of yuge, happy trade deal announcements but do not fully fall for the hype as many will just be MOUs. It will be a waste of US leverage if no structural changes are agreed upon. Xi, as powerful as he is coming out of the 19th Party Congress, does not want a bad US-China relationship and while he will not move on what China calls its "core interests" like Taiwan and the South China Sea, appropriately applied US leverage and pressure could result in some real movement on structural trade issues.

Human rights should be on the agenda, and especially the plight of Liu Xia, widow of Liu Xiaobo. This visit may be the best chance she has to leave China, and I am hopeful that the Trump team will push to make that happen.

Expect a fairly happy summit, but, as yesterday's newsletter also discussed, the hangover from the Party may be quick. Orville Schell, covering the Asia trip on assignment for Vanity Fair, is not optimistic that any happy Beijing times for Trump will last--On the Road with Trump in Asia | ChinaFile - Orville Schell:

In talking with U.S. officials, I think we can expect few important public deliverables from China at this summit. Perhaps more important, we should carefully watch what happens down the line after Trump returns to Washington, in terms of how the White House responds to the reality that, in too many ways, the playing field is out of level for Americans in China. Whether you’re a businessman, a media rep, a scholar, a civil society actor, or a religious leader, the notion of reciprocity is being sorely stretched. The U.S. has been open to China, while China has been increasingly closed to us. In the weeks going forward, it would not surprise me to see the Trump Administration, despite all the niceties of Trump’s Mar-a-Lago friendship with Xi, begin to play a much harder, even confrontational, game with China in ways that may surprise us.

Such a shift would be long overdue, and could be quite effective so long as it is done as part of a coherent and consistently implemented strategy.

Thanks for reading.


The Essential Eight

1. Trump Goes To Beijing

Senator Rubio and Representative Smith send Trump a letter ahead of his Beijing visit--Chairs Urge President to Challenge Chinese Government To Abide by Its International Commitments | Congressional-Executive Commission on China:

The letter contains recommendations that can be used to frame discussions with Chinese leaders during the trip and after, including emphasizing issues of reciprocity, digital protectionism, Internet freedom, Hong Kong’s autonomy, and the release of political and religious prisoners, such as Liu Xia, the widow of Nobel Prize Laureate Liu Xiaobo.  The Chairs also urged an end to China’s support for the Maduro regime in Venezuela.

Wakeup Call for Chinese Banks on North Korea Sanctions | Foundation for Defense of Democracies:

The most significant element of the advisory is Treasury’s finding “that bank accounts used by [Chinese and Hong Kong-based] sanctioned persons are maintained predominantly at major Chinese financial institutions.” This is a clear warning shot intended for the Chinese banking sector, which includes some of the largest banks in the world. Treasury just told those banks they are exposed to North Korea sanctions activities, which could result in sizable penalties.

Comment: The US may have more visibility into some of the account holders at PRC banks than the PRC banks themselves do given how convoluted some of their systems are. My understanding is that the banks Treasury has approached to discuss problematic accounts have been very serious about trying to address the issues as they are quite worried about massive fines or even a cut off from the US financial system. This newsletter a couple of times in recent months has suggested a likely target is China Merchants Bank. It is big enough to send a serious message, not quite as nuclear a move as targeting one of China's big four.

China downplays role in US opioid epidemic - CNN:

US President Donald Trump last week declared the opioid crisis a public health emergency and promised to make the issue a top priority when he meets with Chinese counterpart Xi Jinping in Beijing next week. Trump said he expected Xi to "do something about it."

"While we don't deny that some fentanyl substances abused in the US have come from China, we don't see sufficient evidence ... that most of them have come from China," said Wei Xiaojun, deputy secretary-general of National Narcotics Control Commission, China's top drug enforcement agency.

Forbidden City to welcome Trump, first lady on Wednesday: ambassador - Global Times:

The doors of the Forbidden City in Beijing will open to the first family of the US on Wednesday when President Donald Trump visits Beijing, according to the US ambassador to China.

"The Forbidden City in the first night will include the first families of China and the US, and I believe that will be very personal and special occasion," Branstad told reporters on Monday...

Vice Foreign Minister Zheng Zeguang said Trump and his family will be treated to a "state visit-plus" experience.

"There will be significant interactions between the two leaders. The First Lady [Melania Trump] and Madame Peng [Li Yuan] will be together and visit schools," Branstad said.

Nagging Question: What is the difference between a "state visit" and a "state visit plus"?


2. Wang Huning, Xi's Brain?

Meet the mastermind behind Xi Jinping’s power - Yi Wang:

Wang’s writing over the years is so strikingly parallel to the policies Xi has adopted that he is regarded by many as the brain behind the throne, the mandarin behind the emperor. What Wang has written offers huge clues to understanding where China is headed.

The Hidden Ruler: Wang Huning and the Making of Contemporary China: Journal of Contemporary China—By Yi Wang:

The article provides the first comprehensive examination of the life and thought of Wang Huning, member of the Politburo, advisor to three Chinese leaders and important contributor to major political conceptual formulations in contemporary China. In doing so, it seeks to derive insights into the role of intellectuals in China, and what this says about Chinese politics. It argues that, although initially reluctant to enter politics, Wang has become in effect a ‘hidden leader’, exercising far-reaching influence on the nature of Chinese politics, thereby revealing the fundamental tensions in contemporary Chinese politics, shaped by major political debates concerning stability, economic growth and legitimacy.

The meaning of the man behind China’s ideology - Banyan - The Economist $$:

But in ways that would be understood by another adviser who reached the pinnacle of power, Donald Trump’s former strategist, Stephen Bannon, Mr Wang sees a world divided by fundamentally different values and cultures. Mr Wang’s book prophesies that, following the rise of Japan, other races would challenge American primacy, and the American system based on “self-defeating” notions such as liberty and democracy would find itself in crisis. Mr Xi does not yet say this. But he has started to claim that China should “take centre stage in the world” and that its model of development presents “a new choice for other countries”. That is Wang-think. Don’t say you were never warned.


3. Wang Qishan Chapter Excerpt Runs In People's Daily

China's former top graft-buster warns of plots to seize power - Reuters:

Writing in the party’s official People’s Daily, Wang said the fight against corruption went beyond battling the pilfering of assets or hedonism and was a political battle.

“Political corruption is the biggest corruption,” Wang wrote in comments drawn from a collection of essays released after the congress, but not previously published in full by state media....

Wang explicitly linked some of the most notorious cases to political crimes, mentioning not only Zhou but also the former party bosses of the southwestern city of Chongqing, Bo Xilai and Sun Zhengcai, two former top generals and a former top aide to retired president Hu Jintao.

王岐山:开启新时代 踏上新征程- 人民日报:

果断查处周永康、薄熙来、郭伯雄、徐才厚、孙政才、令计划严重违纪违法问题,铲除政治腐败和经济腐败相互交织的利益集团。5年来波澜壮阔的实践充分证明,把全面从严治党摆上战略布局英明正确,在实现伟大复兴的关键时刻,校正了党和国家事业前进的航向,使党经历了革命性锻造...

习近平总书记坚持问题导向,以顽强的斗争精神、补天填海的气概,带头履行主体责任,直接领导指挥,具体部署落实。严肃党内政治生活、强化党内监督,不搞藏着掖着,把问题揭摆开来,牢牢抓住不放,狠抓整改落实,件件要有着落;严明党的纪律,监督执纪问责,解决“灯下黑”,打通“中梗阻”,破除体制机制障碍、冲破利益藩篱,推动中央大政方针和决策部署落地生根,有力维护了党中央权威和集中统一领导;既有当下“改”的举措,又有长久“立”的机制,制定修订90多部党内法规,不断扎紧制度笼子,实现了全面从严治党与全面深化改革、全面依法治国的有机统一。全面从严治党是一场自我革命,推动破解了许多长期想解决而没有解决的难题,办成了许多过去想办而没有办成的大事,解决了党和国家事业发展带有全局性、根本性、方向性的问题,使党焕发出新的生机活力,确保承载着13亿多中国人民实现伟大梦想的航船行稳致远。

Comment: If I am Wen Jiabao I am starting to get nervous for myself and my family…

Potential next act for trusted Xi adviser - Axios - Deborah Lehr:

Rumor has it that he will be announced as China's next vice president — a clever move by President Xi if true. Wang had hit the informal retirement age on the standing committee, but the vice presidency has no upper age limit, nor a requirement that the officeholder be a standing committee member. Its incumbent, Li Yuanchao, was once a rising star but has lately been sidelined.

Comment: Wang is an expert barbarian handler and an especially good American whisperer so this could make sense. I highly doubt he would get the top job at the forthcoming National Supervision Commission; Zhao Leji seems the logical choice for that role.


4. You Quan Takes Over The United Front Work Department

Comment: You Quan is the new head of the United Front Work Department. He recently transferred to Beijing after serving as Fujian Party Secretary. You is another member of Team Xi, and this move is likely another good indication of just how seriously Xi views United Front work.

Head of China's united front work stresses consistency with CPC - Xinhua:

You Quan, head of the United Front Work Department of the Communist Party of China (CPC) Central Committee, said Tuesday the united front should always remain consistent with the CPC Central Committee. You, who is also member of the CPC Central Committee Secretariat, made the remarks at a meeting for people with no party affiliations, non-Communist intellectuals, and those from new social classes to study and implement the spirit of the 19th CPC National Congress.

尤权任中央统战部部长


5. Deleveraging With Chinese Characteristics?

Are Urban Investment Firms Really Going Solo? - Caixin Global:

As Beijing continues to rein in excessive government borrowing, several companies set up by local officials to act as financing platforms for infrastructure projects have announced they are cutting official ties. ..

In May, six central government bodies, including the Ministry of Finance, the central bank and the National Development and Reform Commission issued a circular on local government debt management that required urban investment companies to promise not to engage in financing for governments before they can issue new bonds. Companies have rushed to make such promises with an eye on skirting financing restrictions, said Xu Hanfei, an analyst at Merchant Securities.

Another fixed-income analyst told Caixin that some financial institutions already require urban investment companies to provide such a statement as a prerequisite of getting a new loan.

“These announcements are merely symbolic,” said the analyst, as most of the companies have retained their close government ties.

城投退平台虚实

China Firms Have Found a Way to Cut Debt, at Least on Paper - Bloomberg:

Sales of perpetual notes -- long-dated securities that can be listed as equity rather than debt on balance sheets given that in theory they could never mature -- have soared to a record this year as Beijing zeros in on leverage and the threat it poses to the financial system. The bonds are so popular that issuance by non-bank firms has jumped to the equivalent of 433 billion yuan ($65 billion), more than seven times sales by companies in the U.S.


6. Patriotism, Protests, Grim Times in Hong Kong

Their Sons Sought a More Democratic Hong Kong, and Got Prison - The New York Times:

On Tuesday, the city’s highest court said it would hear their appeals. All three — Joshua Wong, 21; Alex Chow, 27; and Nathan Law, 24 — are free on bail pending the outcome of the appeal.

For the young men, the sentences are time lost from studies or budding careers, and a black mark on their futures.

But they are also a burden for their parents, who have endured the anguish of seeing their sons taken away in handcuffs. In rare interviews, they shared the heartbreak and pride of watching their children come of age as leaders of a protest movement for free elections.

Ex-chief exec. CY Leung says young Hongkongers have incorrect understanding of 'country' | Hong Kong Free Press HKFP:

Another speaker, Hang Lung Properties chair Ronnie Chan, said Hong Kong people were of the group with the least idea of their country in the world. He blamed the colonial government for creating generations of people without any concept of the country, because the British did not want Hongkongers to move to the UK, or know China.

Comment: Is that why he became a US citizen?


7. Air Pollution Crackdown Making Progress?

Air pollution battle is crucial to China's public health, study says - Phys.org:

Lead author Yixuan Zheng said: "Exposure to PM2.5 can cause adverse health effects including cardiovascular and respiratory morbidity and mortality, and outdoor PM2.5 exposure contributed to approximately 1.22 million deaths in China in 2013.

"The Chinese government has made well-publicised moves to improve air quality and reduce pollution across the whole country, through its Air Pollution Prevention and Control Action Plan (the action plan). Our study marks the first estimates of the impact of this stringent action plan on pollution levels and mortality rates from 2013 to 2015."

The research confirms the effectiveness of China's clean air action. The results show that the action plan led to a 21 per cent reduction of population-weighted mean PM2.5 concentration in just two years.


8. An Interview With Jia Yueting, Founder of The LeEco Conglomerate

Tencent's "Prism" interviews LeEco founder Jia Yueting on November 2 in California. Jia says he will not return to China until he has raised more funds for Faraday Future because if he returns to the PRC he may be prevented from leaving and that would hurt Faraday...Did he mention he has a Beijing for sale too?

The LeEco conglomerate may turn out to be one of the great tech frauds of this era. Several Chinext officials have been detained, rumored to be in part due to arppoving the Leshi IPO-Former Leshi IPO committee members detained over troubled video content firm’s 2010 fundraising | South China Morning Post

Jia at one point left the country around the time of the Ling Wancheng flight and Ling Jihua arrest. His connections with the Ling brothers has never fully come to light but there is no way he raised so much money so fast without some sort of higher level support.

《棱镜》独家对话贾跃亭:赴美这四月我想了些什么|界面新闻 · 科技


Business, Economy, Finance And Trade

Foreign credit card firms hit JV obstacle in China push - Reuters China is pressing foreign payment card companies to form local joint ventures for onshore operations, said three people familiar with the matter, a move that would counter a pledge on market access Beijing made to U.S. President Donald Trump.

China Dealmaker Pays Koch Industries $2 Billion for Lycra Empire - Bloomberg China’s Shandong Ruyi Group is paying more than $2 billion to buy the owner of Lycra, the form-fitting elastic material used in everything from skinny jeans to yoga pants, people with knowledge of the matter said.

The root cause of China’s financial fragility – according to its central bank chief | South China Morning Post Qingdao University economics professor Yi Xianrong said such a blunt accusation was rare from a Chinese official. Yi said China’s monetary policy had been held hostage by “the investment impulse of local governments”. “It has been that way for a long time and I don’t see signs of change as long as GDP remains key to assessing local officials’ performance,” he sai

China Hongqiao tries to block negative reports by short-sellers The attempt to remove reports circulating for months was uncommon, people in the hedge fund industry said. However, short-sellers have faced setbacks this year when taking on Hong Kong-listed Chinese groups, highlighted by the ruling against US-based Citron Research over a report on Chinese property developer Evergrade.

Chinese police to step up crackdown on financial crime - Reuters The ministry has launched a number of targeted actions to clamp down on illegal fundraising, financial frauds, pyramid schemes, fake currencies, underground banks and bank card crimes, it said. 公安部:依法严厉打击金融犯罪 坚决维护国家金融安全

Hottest Asia Stock Evergrande Fuels 500% Rally With Stake Sale - Bloomberg Once China’s most-indebted developer, Evergrande has surged more than 500 percent this year, the top performer in the MSCI Asia Pacific Index, partly through its efforts to reduce leverage. Also in the mix: the prospect of a higher valuation through a backdoor listing of Hengda’s assets in China, share buybacks to fight off short-sellers, and signs of industry consolidation.

Central Bank Wants to Regulate Fintech Like Banking - Caixin Global Financial technology (fintech) companies, especially the sizable ones, should fall under the same risk assessment framework as banks, an official from China’s central bank said. Back in August, the People’s Bank of China (PBOC) for the first time said it wanted to include internet finance companies in its Macro Prudential Assessment framework, a risk monitoring and mitigation system designated for banks.

Former Minsheng Executive Expelled From Party for Allegedly Taking Bribes - Caixin Global  Lin Xiaoxuan, who last worked at China Minsheng Bank as chief information officer, has been expelled from the Communist Party of China due to allegations of bribery, the country’s top graft-buster said in a statement Monday.

Politics, Law And Ideology

Second volume of Xi's book on governance published - Xinhua The second volume of "Xi Jinping: The Governance of China" collects 99 of Xi's speeches, conversations, instructions and letters, as well as 29 photos of the Chinese leader, between Aug. 18, 2014 and Sept. 29, 2017, the Foreign Languages Press said in a statement. The articles are divided into 17 topics and the book also adds some necessary annotations to improve readers' understanding, according to the statement. 《习近平谈治国理政》第二卷中英文版出版发行  // Comment: Did Mark Zuckerberg get an advance copy on his recent trip to Beijing?

NPCSC Criminalized National Anthem Disrespect, Applied National Anthem Law to SARs & Authorized Nationwide Supervision System and Armed Police Reforms – NPC Observer Decision to authorize reform of the People’s Armed Police (PAP). This decision authorizes the suspension of provisions in the National Defense Law and the People’s Armed Police Law that relate to the PAP’s “leadership and command structure, functions and missions, rank system, safeguard system, and troop deployment and mobilization” (领导指挥体制、职能任务、警衔制度、保障体制、部队部署和兵力调动). According to previous media reports (now censored), the reform seeks to eliminate the existing dual-leadership structure—that is, the PAP now answers to both the Central Military Commission and the State Council—by removing the latter from the chain of command. Explanation (not yet available). This should potentially include a lot more details of the reform.

People's Republic of China Supervision Law (draft translation) - Chain Law Translate Article 2: Uphold the leadership of the Communist Party of China over supervision work, building a supervision system with Chinese characteristics; establish a centralized and unified, authoritative, authoritative and effective anti-corruption system; strengthening the Party and national self-supervision, advancing modernization of the national governance system and governance capacity.

Foreign and Military Affairs

Xi sends condolences to Trump on deadly Texas shooting - Xinhua In his message of condolences, Xi expressed his deep sorrow to the innocent victims, extended sincere sympathy to the injured and the families of the victims, and wished the injured a quick recovery. // Comment: Report on the condolences was top right of Tuesday People's Daily. You know the editors were gleeful that they could post it...the propaganda writes itself sometimes

Chinese fear rising US gun violence - Global Times Many Chinese parents have started to put more importance on security in deciding whether to send their children overseas for studies, Vivi, a Shenzhen-based consultant advising  Chinese students who wish to study in the US, told the Global Times. "Some parents prefer to send their children for studies in Canada, Australia and the UK instead of the US," Vivi said. But Vivi added that the US remains attractive to parents for its quality of education.

Military pledges total loyalty to Xi - China Daily "We must carve the word 'war' into our hearts, and be prepared to fight at any moment," Cui Jiabin, a brigade commander of an aviation unit, told Xinhua News Agency. "We have to fuse the duties of preparing and training for war into our minds, and be a part of our consciousness," he said.

Ex-Spy On What His CIA Experience Taught Him About China : NPR Randy Phillips spent 28 years with the CIA, most recently serving as the chief CIA representative in China. He talks about what the U.S.'s leverage is when it comes to managing China's ambitions.

General Secretary of the CPV Central Committee and Prime Minister of Vietnam Meet with Wang Yi Wang Yi thanked Vietnam for its high attention and sincere congratulation to the 19th CPC National Congress. He introduced the main spirit of the 19th CPC National Congress, and said that the destination of General Secretary and President Xi Jinping' first visit is Vietnam after the 19th CPC National Congress, which fully reflects the high importance China has attached to China-Vietnam relations

Bolton: China Has Been ‘Cheating, Stealing Intellectual Property, Discriminating Against Foreign Investors’ - Breitbart “I think what Trump needs to do here is say, ‘Look, we can solve this the hard way or we can solve this the easy way. The easy way is, we cooperate either to reunite the peninsula, bring down the North Korean regime, and substitute it with somebody who’s really prepared to give up nuclear weapons, or the United States is not going to leave North Korea in possession of nuclear weapons.’ That’s what Trump said in his U.N. speech in September. Denuclearization is the only way forward,” he advised.  //  Comment: Bolton seems to frequently be mentioned as a possible next National Security Advisor

What do Chinese people really think about Donald Trump? | South China Morning Post “For us it’s not much different from the [TV show] House of Cards. It’s like we [in China] are just like watching a fire from across a river,” he said. “The chaos is theirs. The more dramatic it gets, the more fun it is to watch.”

China Aerospace Studies Institute CASI's mission is to advance understanding of the capabilities, development, operating concepts, strategy, doctrine, personnel, organization, and limitations of China's aerospace forces, which include: the PLA Air Force (PLAAF); PLA Naval Aviation (PLAN Aviation); PLA Army Aviation; PLA Rocket Force (PLARF); the Strategic Support Force (PLASSF), primarily space and cyber; the civilian and commercial infrastructure that supports the above.

China Wants Its Eye in the Sky to See More of the World - Caixin Global  There are 23 Beidou satellites in orbit, but their coverage is limited to China and its neighbors. The expanded system will allow China to reduce its reliance on foreign services such as GPS, which was developed by the U.S., or Russia’s Glonass, which is consists of 24 satellites. The Chinese system will also compete with the Galileo navigation system that is currently being developed by the European Space Agency.

Tech And Media

Stan Lee's Chinese Panda Hero to Meet Global Audience in 2018 | CFI The animation is still in the making and will be released globally in 2018, according to sources familiar with the matter. Fully funded by Chinese investors, ‘Panda vs. Aliens’ is executive produced by Stan Lee and produced by a Hollywood crew.

Tencent's Honour Loses Top Spot in China After Year-Long Run - Bloomberg The new game from NetEase Inc., which translates roughly as “survival in the wilderness,” took the top spot on Nov. 4, according to researcher App Annie. It features similar game play to PlayerUnknown’s Battlegrounds, including parachuting 100 players onto an island, having them scavenge for armor and weapons before a battle to the death.

Bilibili and regulation: How one video company is thriving on youth-generated content - TechNode In the past eight years, Bilibili has evolved from an obscure and sometimes marginalized community for anime, comic, and gaming (ACG) fans into a “spiritual home” for over 7,000 culture groups that has turned the heads of Chinese tech titans. A whopping 90% of its users are under 25, who post, view, and comment on videos in the form of danmu, real-time audience commentaries that roll across and atop the streamed videos.

Bargaining chip? China seen closely scrutinizing Qualcomm, Broadcom deal - Reuters “This is a critical industry for China and Qualcomm has been fined by the Ministry of Commerce (Mofcom) before so it’s on its radar,” said Wendy Yan, Shanghai-based partner at law firm Faegre Baker Daniels.

Reality TV Show Sends Chinese Stars Back to Acting School - Sixth Tone “The Birth of Actors” — or “Yanyuande Dansheng” in Chinese — debuted on Zhejiang Satellite TV in October and has already received 330 million online views for just its first two episodes. The show has reignited debate on social media about the dubious acting skills of some millennial stars.

Huawei Holds On to China Smartphone Crown - Caixin Global Oppo gained ground on Huawei in the Chinese smartphone market during the third quarter, as the former tried to regain the title of top dog in the world’s largest market, according to new data released on Monday. At the same time, U.S. giant Apple Inc. recaptured some ground, ending nearly two years of decline in a market that accounts for about a fifth of its global sales

Society, Art, Sports, Culture And History

China's Official 2018 Holiday Calendar Announced Earlier Than Ever! | the Beijinger 2018's calendar has been announced a full three weeks ahead of last year's release

Energy, Environment, Science And Health

Doctor Ordered to Pay $2,300 for Telling Man to Stop Smoking - Sixth Tone A doctor in central China has found himself 15,000 yuan ($2,300) out-of-pocket after an elderly man he chastised for smoking in an elevator had a fatal heart attack. A district court in Zhengzhou, the capital of Henan province, ordered him to pay compensation to the deceased smoker’s family, Beijing Youth Daily reported Saturday, despite concluding that he did not cause the older man’s death.

Education

Experiment-Chinese Proficiency and Vocabulary Tests (Introduction) The goal of the project is to understand the language abilities of experienced second language learners of Mandarin Chinese. There are two phases to this study. First, you will be asked to take some short tests (about 10 minutes total time) to check your eligibility for the study. If you are eligible after taking the online tests, we will contact you and arrange for you to come to the language lab at Beijing Normal University to participate in further research involving longer tests using EEG (a cap that reads neural activity) and computer administered tests. Participation in that research would take between 2 and 3 hours, and you would be compensated with $15.00 (100RMB) per hour

Books And Literature

China Reinvents Literature (Profitably) - Bloomberg On Wednesday, China Literature Ltd., the country's biggest online publisher, will go public in Hong Kong, with a market value expected to exceed $6 billion. Its success should put the rest of the publishing industry on notice that the future of the book is being written in China -- and it looks nothing like the past.

Beijing

Beijing first failed land sale in two years shows developers’ woes | South China Morning Post It is the first failed residential land sale since September 2015 after the central and local governments rolled out a slew of measures across Chinese cities to dampen land and property prices, which have hurt developers’ expansion and sales income.

Saturday, November 4, 2017 

Trump And A "Free and Open Indo-Pacific", Xi Keeps Promoting Allies And Breaking Norms; Pandas As Geopolitical Fur Balls--Sinocism Weekly 11.04.17

Happy Saturday...President Trump has started his weekend in Asia, where he will be for the next 11 days visiting Japan, South Korea, China, Vietnam and the Philippines. The expectations seem so low that perhaps anything short of triggering a trade or hot war will be considered a success?

I have a couple of big announcements to make.

First, this free weekly newsletter is moving to a much bigger platform. Starting November 10 the weekly version will go out in partnership with Axios, as the "Axios China" Newsletter by Bill Bishop of Sinocism. Look for a welcome e-mail next week from Axios. Going forward the format of the weekly newsletter will follow the pithy, concise Axios style.

Second, the rates for the daily version of The Sinocism China Newsletter are increasing on November 18 from $11/month or $118/year to $15/month or $168/year. Anyone who has signed up under the loyal subscriber charter rate before November 18 will have the lower monthly or annual rates locked in at least through 2018, including annual renewals. You can subscribe here.

This week's daily updates included:

Reform Scorecard, North Korea, Propaganda Teams, Party Everywhere But Not A Fun One, Zuckerberg And Xi--Sinocism 11.02.17

More on Xi's Shanghai Field Trip, "State Visit+" For Trump, Fake News Tracker-Sinocism 11.01,2017

PRC-South Korea Rapprochement; Xi Leads PBSC Field Trip To Shanghai; Insider Trading Scandal At Canyon Bridge-Sinocism-10.31.17

Li Qiang Gets Shanghai, Revised Party Constitution Released, "The Centralized, Unified Leadership Of The Central Committee With Comrade Xi Jinping As The Core" - Sinocism 10.30.17

To read the daily version, and, as the Sinocism tagline suggests, “get smarter about China” you can subscribe here.

Thanks for reading.

1. President Trump Goes to Asia, "Free and Open Indo-Pacific" Is The New "Pivot" To Counter China's RiseThe Pivot Rebranded:  The New York Times has a good overview of the strategic backdrop to Trump's Asian tour. We will hear a lot about the concept of a "free and open Indo-Pacific"--Trump Heads to Asia With an Ambitious Agenda but Little to Offer:

  • In Vietnam, his aides said, Mr. Trump will articulate a new policy for Asia built on the concept of a “free and open Indo-Pacific” region. The idea, they acknowledge, originated with the Japanese, who have been urging the United States to bond with three other maritime democracies — Japan, Australia, and India — to contain a rising China...

  • Japanese officials planted the Indo-Pacific idea with two American counterparts: Brian H. Hook, the State Department’s policy planning director, and Matthew Pottinger, the Asia director in the National Security Council. But it dates further back, to a 19th-century American naval officer and historian, Alfred Thayer Mahan, whose writings about maritime power have long been studied in Japan but who has only recently drawn attention in the White House.

Other Things to Watch:

So far I am not hearing to expect any substantive breakthroughs with China on either trade or North Korea. China and the US will sign a lot of deals during the visit, but deals are easy for the Chinese and, once you wade through the PR spin, many of the signed "agreements" may actually be non-binding MOUs. I hope I am wrong but it sounds like the US President will shy away from any specific, hard asks around the metastasizing structural issues in the US-China economic relationship.

But Xi Jinping will ensure Trump is well feted. The Forbidden City will close November 8 for Trump's private tour and Cui Tiankai, the soon-to-retire Chinese Ambassador to the US, told the media that the US President "will receive a "State visit-plus" featuring a military honor guard, official talks, formal banquet and "special arrangements".

There has been some hope that on this trip the US might win freedom for Liu Xia, Liu Xiaobo's widow. In the meantime Prominent international writers have asked China to release her.

Party rag The Global Times has praised Chief of Staff Kelly's recent comment to Fox News that China has ""a system of government that has apparently worked for the Chinese people."

The PRC-South Korea "rapprochement" just before the Trump visit is noteworthy. This newsletter has suggested a few times over the last several weeks that Xi might find some sort of face-saving solution over THAAD to allow Beijing to back away from its hysterical reaction and rebuild ties with South Korea, with a goal towards driving a wedge between Seoul and Washington over North Korea. The story I heard was that the initial briefing to Xi about THAAD dramatically overstated its capabilities, leading Xi to overreact and then the entire system to overreact with him. Just days after the 19th Party Congress Xi seems to have gotten past the THAAD issue and made a smart correction of a mistaken policy that may reduce Trump’s multilateral DPRK options and leverage ahead of his Asia visit.


**\

  1. Yours Truly Talks The 19th Party Congress**

I did a fun Sinica podcast on the 19th Party Congress:

Takeaways from China’s 19th Party Congress, with Bill Bishop and Jude Blanchette - SupChina

Useful Graphic: UPDATED INFOGRAPHIC: A Post-19th Party Congress Guide to China’s New Leadership


3. Xi Jinping Keeps Promoting Allies And Breaking Norms

Xi Jinping’s college roommate is latest close ally given senior role as he takes over party school | South China Morning Post:

  • For the past two decades, the post has been held by the first ranking member of the party’s secretariat, a role filled by a member of the Politburo Standing Committee. Chen Xi is a member of China’s second highest decision making body, the Politburo.

  • Xi himself is a former head of the academy, as was his predecessor Hu Jintao and the recently retired ideology chief Liu Yunshan.

Zhao Kezhi is the new head of the Ministry of Public Security and, as Sinocism predicted in the 10.25 newsletter, Xi loyalists Huang Kunming and Ding Xuexiang have been named Minister of Propaganda and head of the Central Committee General Office, respectively. The new head of the important Central Policy Research Office remains a mystery, as does the role that Hu Chunhua will take on.


4. PRC System Focused on Propaganda Work About the 19th Party Congress

As expected as they always do these campaigns after Party Congresses. The intensity, the focus on one individual--Xi--and the inclusion of Chen Min'er on the "central publicity team" look a bit different than years past. Party members will spend a lot of time in the coming weeks on this.

CPC launches major post-congress campaign - Xinhua:

  • The campaign will be the prime political task for the Party and for the country, according to a decision of the CPC Central Committee released Thursday.

  • The document summarized the essence of congress and made detailed requirements for Party members and organizations during the campaign.

  • The Central Committee requires full training for Party members, as well as courses specifically for Party officials.

  • Textbooks will also be compiled, said the document, dated Wednesday.

Xi protégé on high-powered propaganda team to spread president’s message | South China Morning Post

  • Observers said the decision to include Chen Miner, Xi’s close associate and one of the youngest Politburo members, in the group pointed to his expanding role in the leadership.

  • The Politburo trio will be part of a 36-member “central publicity team” that from Sunday will go to companies, villages, schools, communities and government departments to talk about the key points made in Xi’s 3½-hour speech at the Communist Party’s national congress last month, according to Xinhua.


5. Time Magazine Asian Edition Cover Declares That "China Won"

Ian Bremmer of The Eurasia Group goes full pundit in his cover story China’s Economy Is Poised to Win the Future:

  • The China striding into that spotlight is not guaranteed to win the future. In this fragmenting world, no one government will have the international influence required to continue to set the political and economic rules that govern the global system. But if you had to bet on one country that is best positioned today to extend its influence with partners and rivals alike, you wouldn’t be wise to back the U.S. The smart money would probably be on China.


6. Commander In Chief Xi Reiterates The Need To Be Ready To Fight And Win Wars

Xi instructs army to improve its combat readiness - Xinhua:

  • Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission (CMC), made the remarks while inspecting the CMC joint battle command center as its commander in chief.

  • "The CMC should lead the armed forces to be ready to fight and win wars, and to undertake the missions and tasks of the new era entrusted to them by the Party and the people," said Xi, in military uniform.

More: Xi also held a video chat with troops at China's base in Djibouti, on the northwestern edge of the Indian Ocean--Promote peace, China's Xi tells soldiers at first overseas base - Reuters

Go Deeper: The Friday CCTV Evening News led with Xi's visit. Let's hope a certain other commander in chief does not decide to start wearing combat fatigues--习近平在视察军委联合作战指挥中心时强调 强化备战打仗的鲜明导向 全面提高新时代打赢能力_CCTV


7. The AI Race with China Is A New "Sputnik Moment"?

Don't Be Complacent: Industry and policy leaders sound the alarm--Our Artificial Intelligence ‘Sputnik Moment’ Is Now: Eric Schmidt & Bob Work « Breaking Defense:

  • “If you believe this is important, as I believe, then we need to get our act together as a country,” Schmidt said this morning. In a Q and A session at the event organized by the Center for a New American Security, Schmidt said he thought the US will maintain its lead over the People’s Republic of China for the next five years, but he expects China to catch up about then and pass us “extremely quickly.”

Finding Talent: A former Facebook engineer, now venture capitalist in China explains that China can take a shortcut to catch up in AI by poaching people from the US-A Cross Border Perspective on Frontier Tech Investing - With Linear Venture Founding Partner Harry Wang:

  • The talent is there (e.g. software and deep learning). But just like in hardware design and hardware making processes where there are expensive mistakes, those people are extremely limited and they are mostly concentrated in the US. So it’s a question of whether you can hire these people to China or whether you can buy certain smaller companies with experience.

And that approach appears to be part of a more coordinated strategy:

China scours the globe for talent to transform into world leader in artificial intelligence and big data | South China Morning Post:

  • “I have been visiting scholars and engineers in universities, Google, Microsoft and high-flying start-ups like iRobot, trying to bring AI and big data experts back to Nanjing,” Du said.

  • Du, 38, was working for Nanjing’s city government as a recruiter for more than six years, helping to set up labs and companies in the city.

  • Now, he has struck out on his own, using the network he established to help Chinese technology companies like Baidu and Alibaba Group Holding – as well as local governments from Nanjing to Guangzhou – find talent and technology to bring back to China.


8. Does The Communist Party Hamper Basic Scientific Research?

Or: Is it better to have the money and political will to spend on the research and then figure out how to work with and around the Party? Physicist Yangyang Cheng examines a proposed Chinese supercollider that, at 34 miles in circumference, would be double the size of the Large Hadron Collider (LHC).

The Future of Particle Physics Will Live and Die in China – Foreign Policy:

  • Western scientists are given to dismissing the party presence as a “formality” — but Chinese scientists know that when ideological loyalty and behavioral compliance directly factor into professional advancement and social mobility through “digital Leninism” aided by new technology, the party branch is never a figurehead, always the real boss.

  • That doesn’t mean they’re willing to admit this to outsiders. It was my asking about the party branch at the proposed supercollider that prompted the CAS official’s fury. “Never heard of it,” was his initial response. A member of the academy’s party committee himself, the official quickly reversed course to state that the party branch has “its own functionality” to perform “work on the thought process” for collaboration members and act as a “unifying force.”


9. Zhou Xiaochuan Stresses The Roles of The Market And The Party In Financial Reforms

The context: The soon-to-retire central bank chief made the comments in a chapter in the recent released 19th Party Congress Study Guide 周小川:积极有序发展股权融资,稳步提高直接融资比重. They do not seem to differ from things said previously. The long mooted financial reforms now await political will and the perhaps the December Central Economic Work Conference. A decisive role for the market and supply side structural economic reforms were just written into the Party Constitution.

People's Bank of China chief Zhou Xiaochuan on financial crisis risk - Reuters:

  • Zhou Xiaochuan, Governor of People's Bank of China, said that the market should play a "decisive role" in allocating financial resources, but also stressed the importance of stronger regulation and Communist Party leadership in guiding financial reform, according to the Shanghai Securities News.

  • In warding off systemic financial risks, China should deal with "both cause and symptoms," and be active in "both preemptive measures and reactive solutions," Zhou wrote in an article aimed at helping the public deepen understanding of last month's 19th Communist Party Congress report

Go Deeper: A China Reform Scorecard Gives Failing Grades--Quarterly Net Assessment — The China Dashboard — Rhodium Group and Asia Society Policy Institute and Rhodium Group


10. Guo Wengui And The Twitter War Between Overseas Chinese

Comment: It has been remarkable to watch the acrimony between critics and defenders of Guo Wengui. Some on each side are clearly not acting with pure motives though not every supporter or critic is simply a paid shill or spy for the other side. But accusing exiled lawyer Teng Biao of being a CCP spy calls into question all of Guo's other allegations. Guo should actually talk less, though that is tough for someone who so loves the spotlight.

China’s Twitter Community Is Polarized Over Corruption Allegations by Fugitive Billionaire Guo Wengui · Global Voices:

  • Teng Biao, a prominent citizen rights lawyer who is now living in the US, has been working since August to demonstrate fallacies in what Guo presents as evidence of corruption. In response, Guo and his followers accused Teng of being a spy for Beijing.

  • Recently Teng wrote a long piece looking into Guo’s fans by quoting some of the analyses from Twitter..

  • “How could Guo Wengui attract so many brain-damaged fans on Twitter? The reason is ‘China has suffered from the regime of Zhao [CCP] for too long.'”...Resentment and hatred have accumulated for decades and now they find a warrior challenging the CCP, they project their wishful thinking onto Guo and become his followers. Guo is like an expert hypnotist, he creates strong suggestions leading people into a story plot.

Serious Question: Did any PRC official bring up Guo Wengui with Mark Zuckerburg during his recent homage to Xi Jinping?

Facebook blocked dissident Guo Wengui after the Chinese government complained — Quartz:

  • Florida senator Marco Rubio, who takes a particular interest in Beijing’s attempts to curtail Chinese citizens’ free speech, focused for a moment on dissident Guo Wengui. Facebook said Oct. 1 it had taken down a page associated with Guo and stopped him from posting to his own account after he had posted someone else’s “personal identifier information.”

  • “We did receive a report from a representative of the Chinese government about that account,” Stretch said. “We analyzed that report as we would any other, and took action based on our policies,” he said.


11. China May Have Banned Bitcoin Exchanges But The Government Loves The Blockchain

Go Deeper: Caixin has a special report on Bitcoin, the Blockchain and China-Caixin Global - No Bit Player:

  • But even as the Chinese government shook the cryptocurrency world, it signaled it will remain a key player in the unfolding story of digital money. China is exploring uses for the underlying technology known as blockchain, such as in logistics and contracts, as well as in its own digital currency.

12. Pandas As Geopolitical Fur Balls

Financial Times Asia editor Jamil Anderlini has an excellent story about How the panda became China’s diplomatic weapon of choice:

  • Xi Jinping personally signs off on every panda loan to a foreign country and, in a fine display of barbarian management, requires each head of state to personally request the pandas.

  • The wild Panda population has recovered enough for them to no longer be classified as "endangered", but instead of celebrating cadres fumed because of concerns the declassification could weaken the panda's political and financial value

Not Actually Cuddly: As part of my 1994 summer scramble to pay for my second year of graduate school I ended working as a translator on the US-China feature film coproduction "The Amazing Panda Adventure". Most of it was shot in Jiazhaigou, Sichuan, an amazing place, especially 23 years ago when there were almost no tourists. I got to pet one of the pandas and it felt like rubbing a steel wool pad as their fur is so coarse. Since then I have always chuckled about the accusation someone is a "Panda Hugger". The reality is if you hug a panda you are going to get scratched...

Remember, the rates for the daily version of The Sinocism China Newsletter are increasing on November 18 from $11/month or $118/year to $15/month or $168/year. Anyone who has signed up under the loyal subscriber charter rate before November 18 will have the lower monthly or annual rates locked in at least through 2018, including annual renewals. You can subscribe here.\

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