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Monday, February 12, 2018 

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

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

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

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

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

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

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

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

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

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

As I wrote in the November 14 newsletter:

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

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

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

Here are some screen shots:

And of course inspecting a rural toilet.

Thanks for reading.

Wednesday, January 24, 2018 

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

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


The Essential Eight

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

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

Commentary: Shared future or America First - Xinhua:

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

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

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

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

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

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

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

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

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

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

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

习近平提出“人类命运共同体”:中国智慧启示全世界-人民网

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

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

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

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

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


2. More From The PRC's Davos Delegation

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

The video is in this tweet:

欧彪峰@oubiaofeng

強烈譴責澎湃新聞弄虛作假,為虎作倀惡意陷害余文生律師!
這段視頻很明顯是經過剪切拼湊合成,視頻右下角上排中間的那串數字應該是警方執法記錄儀的編號,由9072235和9072354兩台設備視頻拼湊合成,在第31秒時間由06:59:53跳至06:52:58,第39秒時又由06:53:06跳至07:01:51。https://t.co/6T33ZMvWZa pic.twitter.com/SuJEYDdynt

January 23, 2018
 

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

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

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

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

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

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

习近平总书记指出:“全面推进依法治国,必须走对路。如果路走错了,南辕北辙了,那再提什么要求和举措也都没有意义了。”一些人认为应当将“司法独立”作为我国司法体制改革的方向。西方“司法独立”真的能在中国走得通吗?2018年第2期《求是》杂志刊发的文章《西方“司法独立”为什么在中国走不通》,列举了西方“司法独立”的历史局限性,及为什么在我国行不通的原因。从而得出:只有“依法独立公正行使审判权检察权”司法体制才是符合我国国情的,才是有利于满足人民对公平正义的需求。求是导读为您详解!

田飞龙:在新时代重思法治与人治关系_爱思想

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

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


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

Statement in connection with the detention of Swedish citizen Gui Minhai - Government.se:

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

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

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

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

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

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

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

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

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


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

Vatican ‘asks underground Chinese bishops to stand aside for government-backed ones’ | CatholicHerald.co.uk:

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

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

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

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

此消息传出后,引发台湾方面担忧。民进党“立委”罗致政表示,照目前情况看来梵蒂冈与大陆正朝向正常化的政治态度,如果关系有重大突破,对台湾“外交”则是一个警告。这不仅可能影响梵蒂冈和台湾的“外交关系”,对于台湾其他属于天主教信“友邦”也会造成一定程度影响。

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

Party members sign pledge to shun religion - Global Times:

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

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

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


6. SOE Reform Includes An Edict To Make Profits 

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

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

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

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

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

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

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

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


7. Beijing Orders Softer Media Coverage Of HNA And Wanda

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

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

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

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

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

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

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

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

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


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

Comment: The group has quite an ambitious agenda.

China determined to remove institutional barriers through reform - Xinhua:

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

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

Highlights:

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

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

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

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

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

会议审议通过了《关于推进社会公益事业建设领域政府信息公开的意见》、《关于提高技术工人待遇的意见》、《关于建立城乡居民基本养老保险待遇确定和基础养老金正常调整机制的指导意见》、《积极牵头组织国际大科学计划和大科学工程方案》、《关于推进孔子学院改革发展的指导意见》、《关于建立“一带一路”争端解决机制和机构的意见》、《关于改革完善仿制药供应保障及使用政策的若干意见》、《科学数据管理办法》、《知识产权对外转让有关工作办法(试行)》、《地方党政领导干部安全生产责任制规定》。会议还审议了《浙江省“最多跑一次”改革调研报告》。

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

会议指出,推进孔子学院改革发展,要围绕建设中国特色社会主义文化强国,服务中国特色大国外交,深化改革创新,完善体制机制,优化分布结构,加强力量建设,提高办学质量,使之成为中外人文交流的重要力量。


Business, Economy, Finance And Trade

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

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

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

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

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

Bangladesh blacklists China Harbour Engineering for ‘bid to bribe secretary’ - bdnews24.com “The firm offered Tk 5 million in bribes to the communication secretary. The secretary informed us about the matter. That’s why we’ve blacklisted it. It won’t be able to work anymore,” the minister told reporters at the Secretariat on Tuesday.

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

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

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

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

 

Politics, Law And Ideology

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

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

China Leadership Monitor Winter 2018 Issue 55 | Hoover Institution 

 

Foreign and Military Affairs

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

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

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

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

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

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

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

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

 

Hong Kong, Macao

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

 

Tech And Media

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

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

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

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

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

 

Society, Art, Sports, Culture And History

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

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

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

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

 

Energy, Environment, Science And Health

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

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

 

Agriculture And Rural Issues

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

 

Education

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

 

Beijing

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

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

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

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

 

Jobs And Events

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

Correction:

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

Thursday, January 4, 2018 

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

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

The Essential Eight

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

Xi stresses real combat training - Xinhua:

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

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

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

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

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

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

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

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

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

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

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

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.

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