Sinocism 06.13.17-Anbang Chairman Detained, Panama Dumps Taiwan For Beijing, AI Deals Under Scrutiny

"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner

AnchorThe Essential Eight

1. Anbang Chairman, Long Rumored To Have Been Detained, Has Been Detained

Chairman of Chinese Firm Who Tried to Forge Ties With Jared Kushner Is Detained – The New York Times Wu Xiaohui, the chairman of Anbang Insurance Group, was taken away by the police on Friday in Beijing, according to Caijing, a respected newsmagazine. In a statement early Wednesday morning in China, the company said that Mr. Wu was “for personal reasons no longer able to perform his duties.”

Two people briefed on the matter — a company executive and a business partner of Anbang — confirmed that Mr. Wu had been detained.

Comment: Not a surprise but huge nonetheless, and should be worrisome for some of Anbang’s overseas partners. Good thing the Kushner-Anbang deal was killed, otherwise things could get very awkward…

Related:Anbang Insurance says chairman Wu Xiaohui stepping aside amid probe reports | South China Morning Post

A source familiar with the matter told the SCMP that Wu had been “assisting relevant investigations” for a while, but had always managed to return to his office or home after a few hours of questioning. But Wu hadn’t returned since he was taken away at the end of last week, the source added.

Comment: This explains the rumors that have been going around for weeks that Wu had been detained. So they were a bit premature. What is the status of Chen Yi’s son Chen Xiaolu? Last I heard a couple of weeks ago Chen was confined to his Beijing home. 

2. Panama Dumps Taiwan For China, Beijing’s Isolation of Taipei Intensifies

Taiwan president condemns Beijing for Panama defection – The China Post

Addressing Beijing, Tsai said Taiwan had upheld its responsibility when it came to maintaining cross-strait peace and stability. She condemned Beijing’s actions, which she said have harmed the status quo.

“The people of Taiwan cannot accept this,” Tsai said. “We cannot sit by and watch as Taiwan’s interests are continually threatened and challenged.”

Top Taiwanese government agencies issued statements denouncing long-time ally Panama’s decision to form ties with Beijing.


Tuesday CCTV Evening News on the establishment of diplomatic relations with Panama

Related:Panama Severs Diplomatic Relations with Taiwan – Taiwan Sentinel

According to La Estrella de Panama, in recent years China has become one of the three largest users of the Panama Canal. In May 2016 Landbridge Group (China) purchased Margarita Island Port, Panama’s largest port. As part of the US$900 million deal to control Panama’s Margarita Island Port, Chinese interests have vowed heavy investments to upgrade port facilities and build a deepwater port capable of docking larger ships. Landbridge is also the firm that acquired the Port of Darwin in Australia’s Northern Territory.

Chinese state firms, COSCO Shipping Corp among them, have also been eying opportunities to develop land around the Panama Canal. According to Reuters, the Panama Canal Authority will open a tender to develop as much as 1,200 hectares of land around the canal by the end of 2017.

China Walks Tightrope in Hitting Taiwan Without Gutting Economy – Bloomberg

The loss of Panama — one of Taiwan’s oldest diplomatic partners — carries symbolic weight and could encourage others such as the Vatican or Paraguay to switch.

侠客岛:与台湾“断交” 巴拿马绝不是最后一个

People’s Daily “blogger” Xiake Dao says Panama will definitely not be the last country to cut ties with Taiwan

3. Xi Bestows Honors On PLA Special Forces Company, Weeks Before 20th Anniversary Of Handover

Xi Jinping commends elite PLA squad based in Hong Kong | South China Morning Post

The official Xinhua news agency reported on Tuesday that Xi, in his capacity as chairman of the Central Military Commission and commander-in-chief of China’s armed forces, recently conferred the honorary title of “the model special operation company of the Hong Kong garrison” on the elite squad.

Related:[视频]中央军委主席习近平签署命令 授予驻香港部队某旅特种作战一连荣誉称号_CCTV

Tuesday CCTV Evening Report on the award for the PLA special forces company in HK, interesting video of what they train for, including urban combat

4. US Government Getting Intelligent About China’s Artificial Intelligence Agenda

U.S. weighs restricting Chinese investment in artificial intelligence | Reuters

Of particular concern is China’s interest in fields such as artificial intelligence and machine learning, which have increasingly attracted Chinese capital in recent years. The worry is that cutting-edge technologies developed in the United States could be used by China to bolster its military capabilities and perhaps even push it ahead in strategic industries.

An unreleased Pentagon report, viewed by Reuters, warns that China is skirting U.S. oversight and gaining access to sensitive technology through transactions that currently don’t trigger CFIUS review. Such deals would include joint ventures, minority stakes and early-stage investments in start-ups.

Comment: This is long overdue, and Baidu’s work in Silicon Valley should come under particular scrutiny

Related:The Optimistic Promise of Artificial Intelligence – WSJ

Two top experts in the field— Andrew Ng, a Stanford University adjunct professor and former AI scientist at Alphabet Inc.’s Google and Chinese internet giant Baidu Inc., and Tong Zhang, executive director of the AI Lab at Tencent Holdings Ltd. —sat down with The Wall Street Journal’s global technology editor, Jason Dean, to explain why they believe the opportunities associated with this technology far outweigh the bad.

5. The Hype Is Ahead Of The Reality About China And Climate Leadership

Why China Is No Climate Leader – POLITICO Magazine – Elizabeth Economy

Beyond the clear limitations of China’s climate policies at home and abroad, there remains the larger question of diplomatic leadership. Will China rally other countries to adopt another round of more ambitious greenhouse gas reduction targets? Will it stop the overseas financing and sale of coal-fired power plants and coal-to-chemical plants? Will it push forward to limit other harmful greenhouse gas emissions, such as methane? Will it accede to international monitoring and verification of its emissions, an important measure it continues to reject? Thus far, there is no indication that China has plans to adopt any of these leadership-worthy measures.

Related:How Trump’s Paris decision drove the top U.S. diplomat in China to quit | PBS NewsHour

Four days after President Trump announced his intention to withdraw from the Paris climate agreement, the top American official in China, David Rank, tendered his resignation, citing the president’s decision. Rank, who served 27 years in the foreign service, sits down with Judy Woodruff in his first interview since stepping down.

6. Shanghai Government Sort of Concedes To Housing Protestors, Real Estate Weakening

Shanghai Backs Down on Converted-Housing Crackdown – Caixin

Shanghai is the latest city to reverse course on converted housing. Beijing, also struggling to contain a housing bubble, announced restrictions back in March that were later watered down.

Related:China home prices cool on tough controls: report – Xinhua

Home prices in sampled major cities recorded average month-on-month growth of 1.11 percent last month, down 1.2 percentage points from April, according to a monthly report released by the Chinese Academy of Social Sciences on Monday. Prices in Beijing fell 4.09 percent, while those in surrounding cities also dipped: home prices dropped 1.97 percent in Tianjin and 8 percent in Langfang, a city in Hebei Province that borders Beijing.

北京房贷收紧楼市降温 有学区房直降200万_新闻_腾讯网

Comment: Beijing mortgage tightening appears to be hitting prices, those moves couple with recent changes to primary school enrollment policy has dropped the prices of some homes in desirable school areas by 2 million RMB


Comment: Caixin reports on the increasing difficulties real estate firms are having getting financing. But how far will regulators squeeze before fear of crashing the real estate markets and enraging property owners supersedes fear of the debt mess 

7. Trump’s Misplaced Trade Threats?

Don’t Blame China for the Fall of American Steel – Bloomberg Gadfly

The steel the U.S. does still produce is being made more efficiently: Labor productivity in the U.S. primary metal sector has risen from 54 in 1987 to 115 in 2016, according to the Bureau of Labor Statistics.

You have to squint quite hard to even see Chinese steel imports to the U.S., when compared to the size of the domestic trade. The country’s mills produced about 79 million tons over the past 12 months, versus about 742,000 tons of imports from China, which only just makes it into the top 10 exporters.

Related:Trump is a new kind of protectionist — he operates in stealth mode – The Washington Post

Trump’s new trade barriers could cover an additional 3 percent or more of U.S. imports in these sectors. However, much of potential U.S. steel and aluminum imports — especially from China — are already covered by special, highly restrictive trade barriers imposed under other U.S. trade laws. Some of these restrictions date to the Clinton administration. This means that the countries likely to be hit by Trump’s new protectionism would be — Canada, Germany, Japan, Mexico and South Korea. In the period since World War II, these countries have not posed a notable threat to U.S. national security.

8. Love In The Golden Years

Matchmakers Give Chinese Seniors a Second Spring in Romance – Sixth Tone According to China’s most recent census, more than 43 million people over the age of 65 are widowed, divorced, or unmarried. These figures are also set to grow significantly in the future. By 2050, the combination of an aging population, longer life expectancy, and the lingering effects of the one-child policy mean that around 1 in 4 Chinese will be 65 or older. That’s about 330 million people, or the entire population of the United States today.


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Business, Economy And Trade

China’s Social Security Reserve Posts Lowest Return in Five Years – Caixin The 1.73% rate of return on investment last year was the worst since 2011’s 0.84%, according to data from the National Council for Social Security Fund (NCSSF). The best year was 2007, when the rate of return was 43.19%, while the worst year was the following year during the global financial crisis, when a 6.79% loss was suffered.

Trump Adds More Trademarks in China – The New York Times President Trump is poised to add six new trademarks to his expanding portfolio in China, in sectors including veterinary services and construction, potentially renewing concerns about his possible conflicts of interest.

Australian Casino Company’s Employees Face Charges in China – The New York Times Crown Resorts Limited, a casino company partly owned by the Australian billionaire James Packer, said in a filing with Australia’s stock exchange on Tuesday that the employees had been charged and would be tried by a court in Baoshan, a district in Shanghai.

Chinese regulator warns against unregistered offshore corporate debt – Xinhua The companies on the National Development and Reform Commission (NDRC) warning list included China Water Affairs Group and Mengniu Dairy, one of the country’s dairy giants

Chinese premier stresses reform of government functions – Xinhua Li listed five major tasks for the reform this year, namely easing market access for enterprises to promote employment, reducing burdens on market entities by cutting taxes and fees, encouraging investment, creating a fair environment and making public services more efficient. 李克强:紧扣重点不断深化“放管服”改革 坚持不懈推动政府职能转变

China’s Bond Yields Throw Another Curve as Inversion Deteriorates – WSJ In the latest sign of stress in a market pressured by Beijing’s effort to clean up a debt-laden financial system and weak economic prospects, the yield on 10-year bonds fell to 3.55% on Tuesday, compared with the one-year paper’s 3.61%, a situation unseen since June 2013, when an unprecedented cash crunch jolted Chinese markets and nearly brought the nation’s financial system to its knees.

央行发改委达成共识 将编制统一绿色债目录_金融频道_财新网Comment: PBoC and NDRC have agree on a catalog for “Green Bonds”

China Plugs Holes in Share-Dumping Rules – Caixin a couple of weeks ago, on the eve of the Dragon Boat Festival in late May, the CSRC surprised the market by expanding the rules to include new limits on share sale through block trades and private placements — popular ways to sell shares in bulk. The new rules also cover investors who own shares before the stock starts trading, commonly called pre-IPO shares. It’s been a year and a half now, and the Chinese securities regulator is still plugging the holes in its policy that curbs share-dumping.

AnchorPolitics And Law

Chinese Builders Take Guo Wengui to U.S. Court Over Alleged Unpaid Bills – Caixin In the 38-page filing, the nine companies said Guo and his companies allegedly failed to pay in full on two construction projects in Beijing — Morgan Plaza, also known as Pangu Seven Hotel Beijing, and Jin Quan Squares. These projects were built between 2007 and 2015, it added. Guo also allegedly “conveyed, transferred, converted, relocated, and removed all of the assets” associated with those two projects to the U.S. to finance his “luxury life” there, the filing said. 郭文贵美国再遭诉 被追讨2.72亿元工程欠款

郭文贵Guo Wengui ✊️✊️✊️ on Twitter: “这是我文贵的私人律师 Comment: Guo Wengui says he has hired David Boies as his lawyer, posts pictures with him. Big deal if true

董克文律師披露:黃艷紐約告郭文貴誹謗Beijing urban planning official Huang Yan has sued Guo Wengui in New York court for libel over his repeated allegations of her corruption

Police Probe Village Officials in China’s Hunan After Beating Death of ‘Good Official’ – RFA Authorities in the central province of Hunan have sacked three ruling Chinese Communist Party officials after accusing them of beating a former official to death. Police in Hunan’s Xinshao county, near Shaoyang city, are making further arrests after the death of Zhang Youping, 47, party secretary of Xinshao’s Yanzhu New Village, they said in a statement posted on the Sina news portal on Tuesday.

曾有村霸自称“万岁” 中央最高规格整治“村霸” – 今日头条Comment: The Beijing News on the center’s efforts to deal with grassroots officials who are “village tyrants

意识形态工作要凝民心聚共识 来源:《红旗文稿》2017/11 作者:朱继东   做好意识形态工作,要求我们深入学习贯彻习近平总书记关于意识形态工作的重要论述,始终坚持以人民为中心的工作导向,把凝聚人心作为工作的出发点和落脚点,更好为党和国家中心工作服务,真正让意识形态工作起到统一思想、凝聚人心、汇集力量的强有力作用。

决不允许用西方“普世价值”消解社会主义核心价值观 – 《红旗文稿》2017/11 二战之后特别是冷战结束以来,以美国为首的西方国家在世界各地大力推销所谓“普世价值”。近几年,针对中国的推销尤其卖力,掀起了一波又一波的“普世价值”热。特别是党的十八大以来,“普世价值”论者以“社会主义核心价值观全面肯定普世价值”为幌子,再掀波澜。那么,西方“普世价值”推销这个葫芦里到底卖的是什么药?社会主义核心价值观和西方所谓“普世价值”是不是一回事?(作者单位:南京陆军指挥学院)

The one big unanswered question hanging over China’s plans for new state anti-graft agency | South China Morning Post Beijing has signalled how plans for a new anti-graft body will be rolled out across the country but has still not answered one of the biggest questions: whether detained officials will be allowed to consult a lawyer. In a series of reports posted on the website of the Communist Party’s anti-corruption watchdog, three pilot areas for a planned new supervision commission detailed how they were rolling out the programme.

Based on these Tweets from Pan Shiyi it sounds like Ren Zhiqiang is out of the Party doghouse but will be keeping a low profile, and wouldn’t it be interesting to resead the 300,000 character “thought report” he had to write?: 某朋友受处分一年里,将他写给组织的思想汇报给我刻了𠆤U盘,隔三差五催我看。我求他说:我真没时间看,我有时间还要看《白鹿原》电视剧呢。他的思想汇报有30万字,相当于一部长篇小说..以某朋友成为正式党员的名义把朋友们聚在一起,这位朋友情绪高昂讲着,什么级别会议,什么章程,什么条例,写了什么思想汇报。大家都不感兴趣,他是正式党员,是不正式党员谁也不关心。大家最关心纽约郭某的事。只有他老婆一遍又一遍重复着说,以后再不要胡乱说了,除了公益活动其它什么事也别掺和了。

AnchorForeign And Defense Affairs

U.S. rebukes Canada over Chinese takeover of Norsat – The Globe and Mail The U.S.-China Economic and Security Review Commission told The Globe and Mail that the Liberals appear to be willing to sacrifice national-security interests of its most important ally in exchange for obtaining a bilateral free-trade deal with China.

Tillerson threatens sanctions on those with ties to North Korea – FT $$ Mr Tillerson said the issue of whether China was applying enough pressure on Pyongyang would be the top item on the agenda when senior US and Chinese officials meet next week.

Moon, Trump to hold summit on June 29-30 – Yonhap North Korea and its evolving nuclear and missile capabilities are widely expected to be a top item on the agenda for the Moon-Trump meeting.

ALP reels after resignation and calls for China donations inquiry – Sydney Morning Herald The resignation from NSW Labor of rising star, 2016 Senate candidate and gold trader Simon Zhou, comes as respected ALP MP Anthony Byrne called for a full parliamentary inquiry into foreign interference and donations, with public hearings by the joint parliamentary intelligence committee, of which he is deputy chair.

Tokyo, Beijing agree to resume high-level maritime talks:The Asahi Shimbun Joint resource development in the East China Sea and setting up a hotline to avoid unintended clashes will be on the table at senior-level maritime talks between Japan and China to be held as early as late June, according to government sources.

全军加紧推进新军事训练大纲编修 2018年将按新大纲施训–军事–人民网 人民网石家庄6月12日电 (邱越、吴旭)全军深化训练大纲编修现场推进会近日在空军某飞行试验训练基地结束。记者从会上获悉,全军正以2018年按新大纲施训为既定目标,加紧推进新军事训练大纲编修工作。这是我军第8次对军事训练内容体系的整体重塑。

Secretary Tillerson Responds Senator Rubio On Voice of America China | User Clip | Senator Rubio expressed a concern that geopolitical pressures from China may influence VOA’s ability to broadcast the truth and asked whether Secretary Tillerson would support an Office of Inspector General (OIG) investigation. Secretary Tillerson said that he would support an OIG investigation if it seems that something improper has occurred.

There is no Thucydides Trap – SupChina – Arthur Waldron How to conclude a look at so ill conceived and sloppily executed a book? Do not blame Allison. The problem is the pervasive lack of knowledge of China — a country which is, after all, run by the Communist Party, the police, and the army, and thus difficult to get to know. This black hole of information has perversely created an overabundance of fantasies, some very pessimistic, some as absurdly bright as a foreigner on the payroll can make them.

AnchorHong Kong, Macao And Taiwan

20th Anniversary of Hong Kong’s Handover: Reflections and Expectations | Center for Strategic and International Studies video now online

‘I trafficked women at a famous Hong Kong nightclub’ | This Week In Asia | South China Morning Post A former mamasan at Tsim Sha Tsui’s notorious Club Bboss recalls its hedonistic heyday – and how a ‘miracle’ put her on the path to salvation

AnchorTech And Media

Alibaba Looks to Boost Sales Beyond Mainland With Tmall World – Caixin Hong Kong, Taiwan, Singapore and Malaysia are the core regions where the Chinese e-commerce giant will launch its Tmall World brand, to broaden its scope in these markets with better “logistics, payment and localization support,” the company said in a press release.

Baidu’s Turnaround Strategy – WSJ President Qi Lu offers his view on how the company’s investment in artificial intelligence and the driverless-car race is shaping up

AnchorSociety, Art, Sports, Culture And History

University of Illinois student still missingHuge story in China, she is a Peking University grad student  //  Zhang is visiting from China and has only been in the United States for about a month. Zhang was last seen wearing a charcoal gray hat with a white logo on the front.

Chinese bishop dies but Vatican-appointed successor not yet ordained- ucanews Vatican-approved Bishop John Liu Shigong of Jining (Wumeng) in the northern Inner Mongolia autonomous region died aged 89 on June 9 after being diagnosed with liver cancer in May. He is the fourth Chinese bishop to die this year.

Wentworth golf club’s Chinese owner seeks to quell dissent – FT $$ Reignwood, a leisure and soft drinks conglomerate headed by Chanchai Ruayrungruang, a Chinese-Thai businessman, has introduced sweeping changes to the club’s rules to prevent members criticising it in the media and to sideline them from having a say in club affairs.

AnchorEnergy, Environment, Science And Health

国家重点研发计划经费清单浮现 _ 经济参考网 _ 新华社《经济参考报》官方网站 国家重点研发计划经费使用清单逐步浮出水面。《经济参考报》记者从科技部获悉,截至目前,今年国家重点研发计划已公示40个专项1078个小项。 其中民生领域仍然是投入的重点,农林科技领域投资组成有较大变化,而拿到单项经费金额最高的是中国中车,继去年重金投入高速磁浮研发之后,今年再次在轨道交通货运快速化关键技术以1.176亿的投入拔得“头筹”。对此,业内专家表示,我国重点研发计划资金的使用效率和状况有了很大进步,但管理制度仍需完善。

AnchorAgriculture And Rural Issues

How the World’s Farmers Went to Work for China China has single-handedly reshaped the global agricultural commodity-supply chain in the 21st century. The combination of more mouths to feed with even faster-growing wealth in the world’s most populous nation has made China a magnet for farm goods, especially from the U.S., which now sells more of its harvest to China than any other country.


Two Vermont colleges switch to ‘university’ to attract Chinese students – China Daily When it comes to Johnson State College and Lyndon State College in Vermont, it’s one word – dropping “college”. And the reason: to improve marketing and attract higher-tuition paying foreign students, especially from China, a move that colleges and universities across America have been doing since the number of foreign students has surged.

AnchorFood And Travel

China Caught in Claws of New Food Fad: Piping Hot Crawfish – Caixin the industry has been dogged by fears of potential health risks linked to consuming contaminated crawfish products. More than a dozen Nanjing residents came down with Haff disease in 2010 allegedly after eating crawfish, local media reported, but government investigators later said they couldn’t link the infection to possible contamination in crawfish. One cause of Haff disease, an infection which causes muscle decay and could lead to kidney failure, is consuming fish contaminated by toxic chemicals

Chinese man caught with 500 imprisoned cats destined for restaurants – The Washington Post Meanwhile, activists said they had evidence that French-owned supermarket chain Carrefour continued to sell dog meat in China.


Beijing to slash power supply, embrace clean energy to fight air pollution – Xinhua The city’s top environment official said Tuesday at a press briefing that the government is following a ten-point plan to improve air quality.

Per capita GDP of Beijing rises to $17,000 – China Daily The per capita GDP of Beijing soared 40.2 percent from 82,000 yuan ($12,065) in 2011 to 115,000 yuan ($16,920) in 2016, according to official data released by the local statistics bureau on Mon


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