Lunar New Year week roundup; Trade talks; Huawei; CGTN America; Xi and a riot shield

Happy Year of the Pig!

This issue is a roundup of some of the big stories in foreign media over the last week. China is effectively shut down until Monday, so starting then the newsletter will be back to normal.

Here are some of those stories:

  • The campaign to destroy Huawei's 5G ambitions in the US and its allied countries is intensifying, and looks to be succeeding;

  • President Trump announced that he will not meet Xi Jinping before the end of February. That however is not evidence there will not be some kind of a deal, or at least an extension by March 1. USTR head Lighthizer is leading a delegation to Beijing this coming week to continue the talks;

  • President Trump also announced that he will hold a second summit with Kim Jong-un in Hanoi, Vietnam from February 27-28. China's annual "two meetings" begin March 3 so scheduling a Trump-Xi meeting before the middle of March could be challenging, especially if Xi convenes the Fourth Plenum between the end of February Politburo meeting and the start of the "two meetings";

  • This is speculation on my part but I am working on a pet hypothesis about the 4th plenum. Last year’s 3rd was about term limits but even more so about bureaucratic restructuring to have the Party eat the State system. What if Xi has decided it makes sense to redo the plenum calendar on an ongoing basis, to have the annual plenum meet right before the 2 meetings in March, as a way to end the several month gap between the usual fall Party plenum and the spring State NPC meeting? It makes a lot of sense from a governance and bureaucratic perspective;

  • Xi is expected to visit North Korea this year so the announcement of the second summit raises the question of whether Xi will travel to North Korea before February 27;

  • CGTN America filed with the US government as a foreign agent but declared it has editorial independence.

Xi Jinping made an inspection tour in Beijing ahead of the New Year, including to the Beijing Garrison. This scene from the CCTV report on Xi's garrison visit showing him testing out a riot shield may sum up well 2019 in Xi's PRC:

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The Essential Eight

1. Huawei's bad start to the Year of the Pig

Trump likely to sign executive order banning Chinese telecom equipment next week - POLITICO:

President Donald Trump is expected to sign an executive order, banning Chinese telecom equipment from U.S. wireless networks before a major industry conference at the end of February, three sources told POLITICO.

The administration plans to release the directive, part of its broader effort to protect the U.S. from cyber threats, before MWC Barcelona, formerly known as Mobile World Congress, which takes place Feb. 25 to Feb. 28.

Mobile network operator's body GSMA considers crisis meeting over Huawei | Reuters:

Mobile communications industry body GSMA has proposed its members discuss the possibility that Chinese network vendor Huawei [HWT.UL] is excluded from key markets, amid concerns such a development could set operators back by years...

GSMA Director General Mats Granryd has written to members proposing to put the debate around Huawei onto the agenda of its next board meeting, a spokesman for the federation told Reuters on Saturday.

The meeting will be held in late February on the sidelines of the Mobile World Congress, the industry’s biggest annual gathering, in Barcelona.

Trump envoy urges Europe to ‘link arms’ against China – POLITICO:

Describing China’s influence as “malign,” Gordon Sondland, the U.S. ambassador to the European Union, told POLITICO that his country and the EU should overcome their current trade tensions and join forces against the Chinese.

“We should … combine our mutual energies — we have a $40 trillion combined GDP, there is nothing on the planet that is more powerful than that — to meet China and check China in multiple respects: economically, from an intelligence standpoint, militarily,” he said in an interview.

“That’s where the EU and U.S. really should be linking arms,” Sondland continued, advocating for “a quick resolution that would move our trade relationship in the right direction so that we can both turn toward China, which is really the future problem in multiple respects.”

Huawei Deals for Tech Will Have Consequences, U.S. Warns EU - Bloomberg:

“There are no compelling reasons that I can see to do business with the Chinese, so long as they have the structure in place to reach in and manipulate or spy on their customers,” Ambassador Gordon Sondland, Trump’s envoy in Brussels, said Thursday in an interview. “Those who are charging ahead blindly and embracing the Chinese technology without regard to these concerns may find themselves in a disadvantage in dealing with us.”

Huawei representative rebukes US ambassador's accusation, defends integrity and safety - China Daily:

"Recently, Huawei has been under constant attack by some countries and politicians. We are shocked, or sometimes feel amused, by those ungrounded and senseless allegations," said Abraham Liu, Huawei's vice-president for the European region and chief representative to the EU institutions.

"For example, yesterday, the US ambassador to the European Union, Mr (Gordon) Sondland, said (that) someone in Beijing (could) remotely run a certain car off the road on 5G network and kill the person that's in it. This is an insult to people's intelligence, let alone the technological experts across the world," Liu said.

Chinese firm Huawei blocked from ‘sensitive state projects’ and 5G amid security concerns-The Sun:

New laws on foreign investment in the UK will block Chinese firm Huawei from sensitive state projects, The Sun can reveal...

senior Cabinet ministers and Britain’s most senior civil servant Mark Sedwill fear Huawei’s involvement in such critical infrastructure could jeopardise national security.

They are planning reforms to allow the Government to ban Chinese firms like Huawei from future involvement in “strategically significant” UK tech projects.

Huawei Says U.K. Software Issues Will Take Years to Fix - WSJ $$:

The telecom giant also said in a letter to the U.K. Parliament that its board of directors has signed off on a companywide overhaul of its software engineering, budgeting $2 billion over five years for the effort..

German ministers meeting to discuss how to deal with Huawei in 5G auction: source | Reuters:

Chancellor Angela Merkel said on Tuesday that Germany needed guarantees that Huawei would not hand over data to the Chinese state before the telecoms equipment supplier can participate in building its 5G network.

German newspaper Handelsblatt said Wednesday's meeting would focus on whether a security catalog, prepared by the Federal Network Agency and the cyber defense agency (BSI), along with certification rules and a no-spy agreement with China, would be enough to ensure future 5G mobile networks are safe.

Norway’s PST warns against Huawei - Newsinenglish.no:

Justice Minister Tor Mikkel Wara of the Progress Party, who joined Bjørnland at Monday’s PST briefing, later announced that measures would be introduced to reduce the vulnerability of the Norwegian network. The goal is to hinder Norway’s large mobile operators Telenor, Telia and Ice from choosing equipment suppliers that could threaten the nation’s and their users’ security. Huawei is the prime target.

China hacked Norway's Visma to steal client secrets: investigators | Reuters:

Hackers working on behalf of Chinese intelligence breached the network of Norwegian software firm Visma to steal secrets from its clients, cyber security researchers said, in what a company executive described as a potentially catastrophic attack.

The attack was part of what Western countries said in December is a global hacking campaign by China's Ministry of State Security to steal intellectual property and corporate secrets, according to investigators at cyber security firm Recorded Future.

China says it is not a threat to Norway, denies cyber espionage | Reuters:

“China poses no threat to Norway’s security. It’s very ridiculous for the intelligence service of a country to make security assessment and attack China with pure hypothetical language,” the Chinese Embassy in Oslo said in a statement on its website.

Huawei Threatens Lawsuit Against Czech Republic After Security Warning - The New York Times:

The warning, which carries the force of law, requires all companies in the Czech Republic that are deemed critical to the nation’s health to perform a risk analysis that takes security concerns into account.

China denies ‘ridiculous’ spying allegations by Lithuania | AFP:

Earlier in the week, two Lithuanian intelligence agencies condemned China for an “increasingly aggressive” spy campaign, which they said included “attempts to recruit Lithuanian citizens”.

Darius Jauniskis, head of Lithuania’s State Security Department, said his agency was analysing the potential “threat” posed by Huawei, whose technology is being used to build the EU and Nato state’s new 5G telecommunications infrastructure.

Huawei offers to build cyber security center in Poland | Reuters:

Italy denies it will ban Huawei, ZTE from its 5G plans | Reuters:

Thailand launches Huawei 5G test bed, even as U.S. urges allies to bar Chinese gear | Reuters:

University of California Berkeley bans new research projects with Huawei after US indicts Chinese telecoms giant | South China Morning Post

Stanford halts research ties with Huawei amid surveillance controversy – The Stanford Daily

Vermont phone carriers in dispute over concerns about Chinese firm Huawei - VTDigger


2. FBI raids Huawei's San Diego offices

This is a damning story. One argument some defenders of Huawei have used is that the firm's culture has changed since inception and while it committed an "original sin" of IP theft in its early years now that it is a global tech firm its behavior has changed. This story destroys that argument.

Huawei Sting Offers Rare Glimpse of U.S. Targeting Chinese Giant - Bloomberg:

Diamond glass could make your phone’s screen nearly unbreakable—and its inventor says the FBI enlisted him after Huawei tried to steal his secrets...

The first sign of trouble came two months later, in May, when Huawei missed the deadline to return the sample. Shurboff says his emails to Han requesting its immediate return were ignored. The following month, Han wrote that Huawei had been performing “standard” tests on the sample and included a photo showing a big scratch on its surface. Finally, a package from Huawei showed up at Gurnee on Aug. 2. ..

Shurboff says he knew there was no way the sample could have been damaged in shipping—all the pieces would still be there in the case. Instead, he believed that Huawei had tried to cut through the sample to gauge the thickness of its diamond film and to figure out how Akhan had engineered it. “My heart sank,” he says. “I thought, ‘Great, this multibillion-dollar company is coming after our technology. What are we going to do now?’”..

The FBI raided Huawei’s San Diego facility on the morning of Jan. 28. That evening, the two special agents and Assistant U.S. Attorney Kessler briefed Khan and Shurboff by phone. The agents described the scope of the search warrant in vague terms and instructed Khan and Shurboff to have no further contact with Huawei.


3. US-China

Statement from the Press Secretary | The White House:

United States Trade Representative Robert Lighthizer and Secretary of the Treasury Steven Mnuchin travel to Beijing for principal-level meetings that will take place from February 14 through February 15, 2019. These meetings will be preceded by deputy-level negotiations that will begin on February 11, 2019, led by Deputy United States Trade Representative Jeffrey Gerrish.

Trump Sees No Xi Summit by Tariff Date, Stoking Trade Worry - Bloomberg:

President Donald Trump said he won’t meet Chinese President Xi Jinping before a March 1 deadline to avert higher U.S. tariffs on Chinese goods, intensifying fears the two won’t strike a deal before the end of a 90-day truce.

Trump responded “No” and shook his head Thursday when reporters at the White House asked him if he would meet with Xi this month. Then he added, “Unlikely.” But the U.S. president said the two would “maybe” meet later.

Trump told reporters last month that he planned to meet Xi in late February, adding there was a “good chance” of striking a deal

Trade Hawks Quietly Bristle as Trump Guns for Deal With China - Bloomberg - Feb 4:

With less than a month before a March 1 deadline for either a deal or an increase in U.S. tariffs, hardliners inside and outside the administration fret Trump is being outplayed by Chinese President Xi Jinping and seduced by what they see as empty promises.

After Trump hosted Chinese Vice Premier Liu He at the White House last week, one administration official privately likened the direction of negotiations to the president’s caving to Democrats in the shutdown battle over funding for a border wall. Another person close to the talks said Trump appeared determined to turn a pile of crumbs offered by China into what at best might turn out to be a slice of bread.

Pressure Grows on U.S., China to Forge Trade Deal - WSJ $$

Among those pushing for a deal is Blackstone Group Chief Executive Stephen Schwarzman, who has been phoning Mr. Trump and his senior advisers to warn that the failure to strike a deal will undermine the economy and roil markets, which are anticipating an end to U.S.-China economic hostilities. 

Uncertainty about China is weighing on business investment and consumer confidence, Mr. Schwarzman and others are arguing, people familiar with the conversations say. 

At the same time, Mr. Schwarzman and other business leaders, including former Treasury Secretary Hank Paulson, are urging senior Chinese officials to make enough concessions to U.S. negotiators to allow Mr. Trump to claim a victory. That includes agreeing to a way the U.S. can enforce the deal should China fall short of its commitments.

US trade agency: WTO rule change efforts to rein in China will fail - Reuters:

Negotiating new World Trade Organization rules to try to rein in China’s “mercantilist” trade practices would be largely a futile exercise, the Trump administration’s trade office said on Monday, vowing to pursue its unilateral approach to protect U.S. workers, farmers and businesses.

In an annual report to Congress on China’s WTO compliance, the U.S. Trade Representative’s office said it would be “unrealistic to expect success in any negotiation of new WTO rules that would restrict China’s current approach to the economy and trade in a meaningful way.”

The USTR report in PDF 

Four mentions of China in Trump's speech - Remarks by President Trump in State of the Union Address | The White House:

We are now making it clear to China that, after years of targeting our industries and stealing our intellectual property, the theft of American jobs and wealth has come to an end. (Applause.) Therefore, we recently imposed tariffs on $250 billion of Chinese goods, and now our Treasury is receiving billions and billions of dollars.

But I don’t blame China for taking advantage of us; I blame our leaders and representatives for allowing this travesty to happen. I have great respect for President Xi, and we are now working on a new trade deal with China. But it must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs. (Applause.) Thank you...

While we followed the agreement and the rules to the letter, Russia repeatedly violated its terms. It’s been going on for many years. That is why I announced that the United States is officially withdrawing from the Intermediate-Range Nuclear Forces Treaty, or INF Treaty.

Perhaps — (applause) — we really have no choice. Perhaps we can negotiate a different agreement, adding China and others, or perhaps we can’t — in which case, we will outspend and out-innovate all others by far.


4. Australia blocks PRC billionaire from re-entering the country

How Huang Xiangmo lost his citizenship bid for Australia - Sydney Morning Herald:

The activities of Huang Xiangmo, and how Australia’s attitude to him has flipped, give rare insight into how our relationship with China under Xi Jinping is changing before our eyes.

Huang’s gradual fall from grace has been the product of an awakening in Australia, stoked by a few China experts in government, a small group of journalists and an increasing number of politicians. It involves a realisation that the Communist Party’s influence activities are not as benign, and far more entrenched in Australia, as many in government had once believed...

Huang’s philanthropy blitz spanned medical research and universities, including $1.8 million to help found the Australia China Relations Institute at the University of Technology Sydney. Huang later boasted about hand-picking its director, former foreign minister and NSW premier Bob Carr...

ACRI and Carr would become the main public foil to academics, politicians and security agencies warning that the Communist Party was using proxies in Australia to influence political debate and limit dissent among Australia’s local Chinese population.

Chinese billionaire Huang Xiangmo slams ‘lies’ and ‘prejudice’ behind stripping of his Australian residency over political links | South China Morning Post:

In his first statement since his residency was revoked, Huang proposed that Australian politicians return his donations to instead be given to charity, and argued the organisations he headed were in line with Canberra’s political stances on China.

“It is profoundly disappointing to be treated in such a grotesquely unfair manner,” he said, calling the accusations against him “baseless allegations and sheer lies”.

“The decision of visa cancellation was made based on unfounded speculations that are prejudiced and groundless. This is not the Australia that I believe in – the Australia of freedom, democracy, rule of law and fairness – but I keep my faith in law and justice.”


5. Xinjiang getting worse

The future of Uyghur cultural — and halal — life in the Year of the Pig - Darren Byler:

The Chinese version of the lunar new year came early for Uyghurs in 2019. In mid-January, Uyghurs were asked to begin to write couplets describing their hopes and dreams for the year of the pig. They began practicing their lion and dragon dances. A Uyghur government official made a public display of dividing up pork and distributing it among villagers near the Muslim-majority town of Ghulja in celebration of the coming year. Many Uyghurs in the diaspora who I spoke with fear that the “pig” in the year of the pig will be all too literal: that this will be the year when Uyghurs in their homeland will be forced to eat pork as yet another way to perform Han-ness, along with being forced to shave off their mustaches...

This fear is fed by the way Uyghurs are being forced to celebrate the arrival of the new year. Up until 2018, celebrating the lunar new year was a conspicuous absence in Uyghur society. Now, for the first time in Uyghur history, it has become the largest cultural event of the year, replacing the monumental sacred holidays of Uyghur traditional life, Eid al-Adha and Eid al-Fitr, and the traditional Uyghur spring festival Nawruz, which are all now forbidden as signs of “religious extremism.”

Chinese Officials Force Muslims to Drink, Eat Pork At Festival - RFA:

Residents of the Ili Kazakh Autonomous Prefecture in the Xinjiang Uyghur Autonomous Region (XUAR) told RFA that officials had invited them to celebratory dinners marking the Lunar New Year at which pork was served, then threatening to send them to a "re-education" camp if they refused to take part.

Photos sent to RFA also showed an official from Ili's Yining city visiting Muslim households and distributing raw pork, in the name of helping the less well-off on Monday, on the eve of the Year of the Pig.

Sen. Tom Cotton Addresses Hudson Institute on Xinjiang Province, China | Tom Cotton | U.S. Senator for Arkansas:

Thanks to the Hudson Institute for inviting me to speak about China's brutality in Xinjiang Province...

That's because there's perhaps no greater threat to freedom today than the communist regime in Beijing. One observer described Chinese communism as a system where the average Chinese subject "lives from birth to death under the eye of [the state]. Even when he is alone he can never be sure that he is alone. Wherever he may be, asleep or awake, working or resting, in his bath or in bed, he can be inspected without warning and without knowing that he is being inspected. Nothing that he does is indifferent . . . He has no freedom of choice in any direction whatever." Actually, that's how George Orwell described life in Oceania in his dystopian novel 1984. But it could just as easily describe life in China today.

No one suffers the oppressive weight of Chinese communism more than the predominantly Muslim minorities of far western China-especially the Uighurs. At least 800,000 and possibly several million Uighurs are currently detained in a modern-day gulag archipelago-run by a different communist power but no less wicked, atheist, and materialist...

We ought to use the Magnitsky Act to impose sanctions on Communist Party officials who are orchestrating these crimes, especially Chen Quanguo, the Politburo slave master of Tibet and Xinjiang.

Comment: I hear from that there is near unanimity in the Trump Administration about US actions including sanctions, but that the President is not yet ready, so the hope is that Congress will force actions. 

China Secretly Transferring Uyghur Detainees From Xinjiang to Shaanxi, Gansu Province Prisons - RFA:

Ethnic Uyghurs held in political “re-education camps” in northwest China’s Xinjiang Autonomous Region (XUAR) are being sent to prisons in Shaanxi and Gansu provinces, officials have confirmed, pointing to an expansion of a secretive system transferring detainees out of the region.

In October last year, RFA’s Uyghur Service reported that authorities in the XUAR had begun covertly sending detainees to prisons in Heilongjiang province and other parts of China to address an “overflow” in overcrowded camps, where up to 1.1 million Uyghurs and other Muslim ethnic minorities accused of harboring “strong religious views” and “politically incorrect” ideas have been held since April 2017

Uighurs fled persecution in China. Now Beijing’s harassment has followed them to Australia. - The Washington Post:

With Abdughufur living in Adelaide, a city in southern Australia, and her mother in the Xinjiang region of China, it was a rare chance for the two to connect. At first, Abdughufur said, she was excited because she hadn’t talked to her mother in a long time.

Then came “disaster.”

Abdughufur’s mother appeared on the screen in handcuffs, sitting next to a police officer. “They started interrogating me,” Abdughufur said. Fearing for her safety, she complied, sharing sensitive details and documents the police demanded from her, including her Australian driver’s license.

No halal please: meet China’s pig vigilantes | South China Morning Post:

Vocal vigilante groups angered by what they see as creeping Islamisation in Chinese society

The fight to ‘take back’ the Year of the Pig is the newest battle in an escalating confrontation between the vigilantes and ‘religious extremists’

And then there is this:


6. Facebook's 5 billion reasons to keep Beijing happy

How Facebook’s Tiny China Sales Floor Helps Generate Big Ad Money - The New York Times:

In Shenzhen’s Futian district, on the ninth floor of a concrete tower, there is an open-air sales floor that works as a sort of corporate embassy for the social network. The 5,000-square-foot space is run by the local partner, called Meet Social, but has been designed with Facebook’s guidance. It functions as an experience center for the Silicon Valley giant — the only one of its type in the world.

The desire by Chinese companies and other entities to get in front of people internationally has unexpectedly turned China into one of Facebook’s largest sources of advertising revenue, even though the social network itself is not available in the country. Charles Shen, chief executive of Meet Social, said his company anticipated doing $1 billion to $2 billion in ad sales on Facebook and Instagram this year. Each day, he added, Meet Social’s software puts up about 20,000 Chinese ads on Facebook.

In total, Facebook’s revenue from Chinese-based advertisers reached an estimated $5 billion in 2018, or about 10 percent of its total sales, according to Pivotal Research Group.

Opinion | China’s Online Censorship Stifles Trade, Too - The New York Times - Tim Wu;

Even though Facebook has been banned in China for years, Mark Zuckerberg, its chief executive, has made embarrassing efforts to ingratiate himself with China’s president, Xi Jinping. (At one point gossip pages even reported that Mr. Zuckerberg asked, in vain, for Mr. Xi to give an honorary Chinese name to his unborn child; Mr. Zuckerberg denied that this happened.)

Appeasement does not make effective foreign policy or trade policy. The United States, with the world’s largest economy and its most important internet sector, should be negotiating from a position of strength. If the Trump administration wants to be tough with China on trade, it should demand meaningful access to the Chinese internet market, on pain of denial of access to American markets for Chinese firms.

The Internet, Divided Between the U.S. and China, Has Become a Battleground - WSJ $$

The two zones are beginning to clash with the advent of the superfast new generation of mobile technology called 5G. China aims to be the biggest provider of gear underlying the networks, and along with that it is pushing client countries to adopt its approach to the web—essentially urging some to use versions of the “Great Firewall” that Beijing uses to control its internet and contain the West’s influence

Comment: I bought the domain http://www.oneworldtwointernets.com a few years ago when I was thinking about writing a book on the topic...never did, but maybe the domain will be useful in the future


7. CGTN America files with the US under the Foreign Agent Registration Act (FARA)

CGTN America filed with the US Department of Justice on February 1. The filings, signed by Ma Jing, director general of CGTN America, state that:

CGTN America is not engaged in "political activities," as that term is defined for purposes of FARA, and has elected to file this registration statement out of an abundance of caution and in the spirit ofcooperation with U.S. authorities...

CGTN America enjoys editorial independence from any State direction or control.

That is interesting statement in light of how Xi Jinping view's CGTN - Chinese President Xi Jinping visits with CCTV America via video call - CGTN Feb 19 2016:

Chinese President Xi Jinping spoke with the team at CCTV America as part of a research and fact-finding mission on China’s main state media organizations.

Xi spoke to the team in Washington, D.C. via video call from China Central Television’s main headquarters in Beijing..

During the video conference with Ma Jing, the Director General of CCTV America, Xi said he hopes the CCTV America team can “objectively, truly and comprehensively introduce China’s social and economic development to the world audience.”

A Leaked Memo Says Chinese State TV Registered As A Foreign Agent "In The Spirit Of Cooperation":

One journalist told BuzzFeed News that the memo angered the Washington-based staff of CGTN America: "There was some very upset people that employees weren't given a heads-up before the paperwork was filed and the registration went active."

"Lots are also mad about the line in the memo about how the registration was voluntary 'in the spirit of cooperation.'"

"The feeling is, 'Oh, so you didn't actually fight for us or even tell us?'"

A CGTN source said, "It's already hard describing who we work for. ... This makes it even more complicated and uncomfortable when talking to anyone on the outside."

China's multi-billion dollar media campaign 'a major threat for democracies' around the world - China power - ABC News (Australian Broadcasting Corporation):

In a slick 2017 video produced as part of a documentary series showcasing some of China's best journalists, CGTN host Pan Deng said many outside China are "brainwashed" by "Western values of journalism".

Meanwhile another CGTN presenter slammed Western media on air for its partiality in painting the CCP "in a one-dimensional, superficial way".

"That has been the fallacy of the Western media when it comes to reporting on China, not lying, but never telling the whole truth," she said.


8. Xi's New Year's inspection tour of Beijing

China Focus: Xi visits cadres, residents in Beijing ahead of Spring Festival - Xinhua:

President Xi Jinping on Friday visited Beijing's primary-level cadres and residents in downtown neighborhoods ahead of the Spring Festival and extended Lunar New Year greetings to Chinese people of all ethnic groups.

Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, also inspected the preparation work for the Beijing 2022 Olympic and Paralympic Winter Games.

When inspecting the Beijing Municipal Public Security Bureau, Xi stressed the city's glorious mission and weighty responsibility to safeguard the social stability of the national capital as 2019 marks the 70th anniversary of the founding of the People's Republic of China.

The Feb 2 CCTV Evening News on his Beijing inspection tour 习近平春节前夕在北京看望慰问基层干部群众 向广大干部群众致以美好的新春祝福 祝各族人民幸福安康祝伟大祖国繁荣吉祥 

Xi extends festive greetings to all servicemen - Ministry of National Defense:

Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission (CMC), visited the PLA Beijing Garrison Command ahead of the Spring Festival (Chinese New Year), which falls on Feb. 5 this year..

Xi asked the Beijing Garrison Command to efficiently perform their guard duties, well handle counter-terrorism and emergency response, ensure absolute safety of whoever they guard, and maintain the capital's security and stability.

The Feb 2 CCTV Evening News on his visit - 习近平春节前夕视察看望北京卫戍区 向全体人民解放军指战员武警部队官兵民兵预备役人员致以新春祝福 


Business, Economy, Finance And Trade

China's inter-bank payment system passes severe test on Lunar New Year's eve - Xinhua China's inter-bank payment and settlement system passed a tough test on Lunar New Year's eve as the Chinese zealously snatched lucky money in virtual red envelopes for good fortune. China UnionPay, a leading payment network, processed inter-bank payment and settlement deals worth 261.7 billion yuan (about 39 billion U.S. dollars) Monday night, the Lunar New Year's eve, up 81.3 percent from the same day of last year, Shanghai Securities News reported Tuesday on its APP. The average response time for each deal processed by China UnionPay's network was only 220 milliseconds, and no deals failed.

Macro Outlook 2019: Don’t Hold Your Breath for China’s Stimulus - MacroPolo Concerns about a near-term sharp contraction or potential recession are likely misplaced. Any stimulus measures will be front-loaded in 1H2019 ahead of the 70th Anniversary of the founding of the People’s Republic of China in the fall. The front-loading of stimulus means pro-growth efforts will taper off in 2H2019, leading to a sharper slowdown toward the end of year. As such, those expecting another bout of Chinese stimulus to bolster global growth will likely be disappointed.

Canada's Expanding Canola Pile Spurs Intrigue on China Trade - Bloomberg Canada’s inventories of canola, the cop used in everything from salad dressing to deep-frying, rose to a record 14.6 million metric tons in December, largely because of lower exports, Statistics Canada said Tuesday in a report. The data may suggest that shipments to China, the biggest buyer, slowed in the weeks following the arrest in December of Huawei Chief Financial Officer Meng Wanzhou, said Brian Voth, president of Intelli Farm Inc.

Sinica Podcast: Tim Stratford and Craig Allen talk U.S.-China trade - Sinica Podcast Kaiser and Jeremy spoke with Tim Stratford, the chairman of the American Chamber of Commerce (AmCham) in the People’s Republic of China, and with Craig Allen, the president of the US-China Business Council. Stratford has also headed the leading law firm Covington’s office in China for many years, while Allen has had a long career representing American economic interests at the Department of Commerce and in the State Department, most recently as the U.S. ambassador to Brunei. The wide-ranging conversation covers everything from technology policies to the structural changes that China is being asked to make to address U.S. complaints over unfair trade practices.

When Plastic Goes Bad - Credit Card Debt and the Business of Debt Collection - MacroPolo For decades, debt collection firms were illegal. However, today there are anywhere between 2,500 and 3,000 such firms that together employ about 300,000 people. Such companies have become essential for dealing with not just delinquent credit card payments, but also online consumers loans, P2P, and auto loans. Unlike in the United States, where debtors are protected by the Fair Debt Collection Practices Act, China’s borrowers aren’t protected by explicit laws governing the behavior of debt collectors. Instead, they’re covered by a patchwork of regulations that provide significant protection for credit card holders, but not as much to customers of non-bank lenders.

China's information consumption surges in 2018 - Xinhua Total business volume of the telecommunication sector rose by 137.9 percent from the previous year, the MIIT has said. Services of 4G continued to develop last year, with the number of users reaching 1.17 billion. The average household usage of mobile traffic reached 6.25GB per month in December 2018, more than double the amount in the same period in the previous year, the ministry said.


Politics, Law And Ideology

New village loudspeaker campaign aims to spread ideological message - Global Times Those born in the 1950s and 1960s in Chinese villages are familiar with the presence of loudspeakers, as they played a key role in community life when there were no other entertainment activities.  "In the old days, production teams used loudspeakers to make important announcements," said a 78-year-old villager surnamed Gao, referring to them as a symbol of China's rural life.  Although TVs and smartphones have become the main tools for rural residents to obtain information today, local authorities see these programs played automatically through loudspeakers as being necessary for delivering information, news, and, more importantly, government policies.

China Censors Law Textbook Over 'Western' Influences - RFA China's ruling Communist Party's censors have removed a textbook on constitutional law from bookshops in recent weeks, amid a nationwide crackdown on teaching materials relating to the country's constitution. The book, titled "Constitutional Law," by Peking University (Beida) scholar Zhang Qianfan has been removed from bookshops following a nationwide order to universities to report back to their provincial governments on any teaching materials dealing with the topic.

Beijing’s Intensified Control over China’s Higher Education – Chinascope A Duowei News article put together information about the Chinese Communist Party’s (CCP’s) practices of tightened control over the nation’s higher education. At the beginning of 2019, for the first time, the Chinese media reported a case of the CCP Central Disciplinary Committee intervening in the personnel appointment at a Chinese university. Observers believe that this is a new signal that the CCP is strengthening its discipline and supervision of its universities.

From the Outside Looking In: A Response to John Garnaut’s Primer on Ideology – Made in China Journal - Christian Sorace Garnaut insists, however, that Xi and Mao are the same because for him ideology is simply another word for power/dictatorship/control: ‘For Xi, as with Stalin and Mao, there is no endpoint in the perpetual quest for unity and regime preservation.’ By Mao, is Garnaut referring to the same person who launched the Cultural Revolution, which nearly toppled China’s political system? The one who called on the masses to ‘bombard the headquarters’ (轰炸总部) and sanctified the ‘right to rebel’ (造反有理)? The only possible way to describe Maoist politics as a part of a ‘perpetual quest for unity and regime preservation’ is by disavowing the complex political significance of the Cultural Revolution...In a time when policy analysts are debating a low-intensity revival of the Cold War, Garnaut’s speech is an attempt to rekindle the fire. People like Garnaut and his target-audience of hawkish policymakers need the spectre of a ‘brainwashed’ China to defend their own ideological platform. The issue here is not to deny that there are serious problems but to reflect on the framework in which these problems are discussed. What kind of world do we want to live in? For me, the problem with China is not that it poses an ideological threat to global capitalism but that it is has abandoned its revolutionary potential and failed to open up an alternative future to capitalism.


Foreign and Military Affairs

Second Trump-Kim summit to take place in Hanoi - The Washington Post “My representatives have just left North Korea after a very productive meeting and an agreed upon time and date for the second Summit with Kim Jong Un,” Trump said in the tweet. “It will take place in Hanoi, Vietnam, on February 27 & 28. I look forward to seeing Chairman Kim & advancing the cause of peace!”  //  will Xi and Kim meet again before this meeting, perhaps Xi making the trip to North Korea this time?

China will build 4 nuclear aircraft carriers in drive to catch US Navy, experts say | South China Morning Post China’s plan to have at least six aircraft carrier battle groups by 2035 will include four that are nuclear-powered as it builds up its naval capability closer to that of the US Navy, Chinese military experts believe...“China’s nuclear-powered aircraft carriers with [EMALS-like systems] are expected to join the navy by 2035, bringing the total number of carriers to at least six – although only four will work at the front line,” Wang Yunfei, a naval expert and retired PLA destroyer naval officer, said in a recent interview with the South China Morning Post.

Understanding China's AI Strategy | Center for a New American Security - By Gregory C. Allen In the second half of 2018, I traveled to China on four separate trips to attend major diplomatic, military, and private-sector conferences focusing on Artificial Intelligence (AI). During these trips, I participated in a series of meetings with high-ranking Chinese officials in China’s Ministry of Foreign Affairs, leaders of China’s military AI research organizations, government think tank experts, and corporate executives at Chinese AI companies.

China: China 'firmly opposes' Modi's Arunachal visit - The Economic Times China on Saturday "firmly opposed" Prime Minister Narendra Modi's visit to Arunachal Pradesh, asserting that it has never recognised the sensitive border state and the Indian leadership should refrain from any action that may "complicate the boundary question". Prime Minister Modi Saturday inaugurated and laid foundation stone of projects in Arunachal Pradesh worth over Rs 4,000 crore and said his government was giving a lot of importance to improve connectivity in the border state.

Chinese student sentenced to a year in prison for taking photos of naval base - CNN According to court documents, Zhao entered the Joint Interagency Task Force South military property, located on Naval Air Station Key West, on September 26 without permission "by circumnavigating the installation's primary fence line, and entering the military property from the beach." Upon clearing the base's main fence line, Zhao went directly to an area that contains a range of satellite dishes and antennas called "the Farm," court documents say. Zhao took videos and multiple photographs of the equipment in the Farm, the court said.

Under Pressure: Philippine Construction Provokes a Paramilitary Response | Asia Maritime Transparency Initiative China has responded to this new construction by deploying a large fleet of ships from Subi Reef, just over 12 nautical miles southwest of Thitu. These include several People’s Liberation Army-Navy (PLAN) and China Coast Guard (CCG) ships, along with dozens of fishing vessels ranging in size from 30 to 70 meters.

Lorenzana defends Pag-asa Island construction as China deploys ‘militia’ - CNN Philippines The country's Defense chief on Friday stood by government efforts to improve facilities on Pag-asa Island in light of China's alleged force deployment in the disputed area. Defense Secretary Delfin Lorenzana said the Philippines did not violate international law with its construction and repair works on Pag-asa, one of the biggest islands in the contested Spratlys in the South China Sea, and seat of the Kalayaan municipal government under the province of Palawan.


Taiwan

Press Release | U.S. Senator Cory Gardner of Colorado “This invitation would be consistent with U.S. law, enhance U.S. leadership in the Indo-Pacific region, and justly reward a true friend and ally of the United States and the American people,” the Senators wrote. “. . . President Tsai is a genuine democratic leader engaged in a struggle against an authoritarian and oppressive system that seeks to deny the Taiwanese people democratic rights and fundamental freedoms.  Extending an invitation for President Tsai to address a joint session of Congress in this historic year for U.S.-Taiwan relations would send a powerful message that the United States and the American people will always stand with the oppressed, and never the oppressor.”

The problem with inviting Taiwan’s Tsai Ing-wen to speak to a joint meeting of Congress - Richard Bush - Brookings The first flaw in the proposal is that it is contrary to a fundamental principle of U.S. relations with China. That is, when we established diplomatic relations with the People’s Republic of China in 1979, we pledged that we would carry out substantive relations with Taiwan and its government on an unofficial basis...The second flaw in this proposal is Taiwan would suffer. This initiative began in the United States, and Beijing would take the opportunity to pressure and squeeze Taiwan even more than it is already doing.

Salvadoran president-elect to assess relationship with China -aide | Reuters During the campaign, Bukele, who emerged victorious at the polls as an outsider candidate on Sunday, was critical of the benefits that El Salvador received after establishing diplomatic relations with China. Federico Anliker, a close member of the Bukele team and secretary general of his New Ideas party, said the incoming administration would investigate why the outgoing government forged ties with China.


Tech And Media

The Incredible Rise and Fall of China’s Bike Firm Ofo — The Information $$ At the height of its growth in late 2017, the bicycle-rental startup had trucks driving around cities across China, dropping off brand-new yellow bikes continuously throughout the day for customers to use. Each bike cost Ofo nearly $100. They were meant to last two years. Instead, many lasted only a month or two, either breaking or going missing. As a result, only about half of the bikes supposedly in circulation were usable, former Ofo managers estimated. Ofo’s revenue? It charged as little as 15 cents a month for unlimited use of each bike. No wonder, then, that Ofo burned through the $1.5 billion-plus it raised between 2016 and 2017 from such high-profile investors as Yuri Milner’s DST Global, Didi Chuxing, Alibaba and Coatue Management. Ofo now owes hundreds of millions of dollars to bike manufacturers. Its workforce has been slashed from about 3,600 to a few hundred. A company once valued at $3 billion is now on its knees.

Reddit is raising a huge round near a $3 billion valuation | TechCrunch Reddit is raising $150 million to $300 million to keep the front page of the internet running, multiple sources tell TechCrunch. The forthcoming Series D round is said to be led by Chinese tech giant Tencent at a $2.7 billion pre-money valuation.  //  Comment: In response to the news of Tencent's participation images of "tank man" were pushed to the near the top of the site Friday


Energy, Environment, Science And Health

Stanford Reviews Faculty Links to Chinese CRISPR Scandal | AP Stanford University has started a review of interactions that some faculty members had with He Jiankui, the Chinese scientist who claims to have helped make gene-edited babies. Several Stanford professors have said they knew or strongly suspected He wanted to try gene editing on embryos intended for pregnancy.