"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner
Happy Tuesday. Yesterday’s newsletter ran into some spam filter issues so if you did not get it you can read the August 28 issue here, outside the GFW.
The Essential Eight
1. Trump Really Wants Big, Beautiful Tariffs on China
Comment: Following on the Monday Axios report about Trump demanding a plan for tariffs on China, The Financial Times reports that Trump rejected a Chinese deal for steel capacity cuts and humiliated Commerce Secretary Ross in the process.
I had heard that Commerce Secretary Ross and the Chinese side went into the July Comprehensive Economic Dialogue meeting thinking they had a deal to announce, and the Chinese were shocked to learn that day that Trump had killed it, for being too small.
One week after the July G20 summit in Hamburg — where Mr Trump criticised China for flooding the world market with cheap steel — Beijing proposed cutting steel overcapacity by 150m tonnes by 2022. But Mr Trump twice rejected the deal, according to several people familiar with the internal debate…
According to the people familiar with the debate, Mr Trump rejected the offer in a contentious meeting that left Mr Ross licking his wounds. One former official said Mr Ross looked shocked when he returned to the talks with Mr Wang after being told by Mr Trump that the deal was a non-starter…
On the second day of the US-China economic talks — dubbed the “comprehensive economic dialogue” — both sides abruptly cancelled press briefings, and did not release a joint statement, as it became clear that they had nothing concrete to show for their efforts…
“In particular, as I wrote last week, Steve is the one person among the people who talk directly to the president who understood that Making America Great Again means winning an economic war with China,” he continued. “The rest of the administration are defeatists in that respect. They think we can’t win it. I think that’s one of the decisive wedge issues in the White House right now.”
Comment: Expect Breitbart to lead the media efforts for a coming economic war with China.
US online website Axios revealed Monday night that US President Donald Trump vented his ire at senior staff in a small Oval Office meeting in early August, saying he was not satisfied with the administration’s plans to investigate China’s alleged theft of intellectual property and wanted his staff to show him plans to raise tariffs on Chinese goods. “Tariffs. I want tariffs.”
Many US mainstream media cited the report, whose authenticity is unknown. But US media seems to believe the revelation is true. If Axios’ report is true, what happened in the meeting went contrary to the trade dealings between China and the US thereafter, which is worth pondering.
2. North Korea Tests Another Missile
Comment: So now what? Clearly nothing is working. Does the US have to admit defeat and agree to talks with Kim? Few if any serious people believe pre-emptive strikes are feasible given the risks to Seoul, Tokyo and possibly Beijing.
Japan’s upgraded missile response system swung into action, sending emergency alerts through cellphones and over loudspeakers shortly after 6 a.m., warning people on the potential flight path of the threat and advising them to take cover.
The missile appears to have been a Hwasong-12, an intermediate-range ballistic missile technically capable of flying 3,000 miles, easily putting the U.S. territory of Guam within reach. However, the missile flew east, over Hokkaido and into the Pacific Ocean, rather than on a southward path toward Guam.
The test was a direct challenge to Mr. Trump. Just last week, at a political rally in Arizona, Mr. Trump suggested that his threat to rain down “fire and fury” on North Korea if it endangered the United States was beginning to bear fruit. Kim Jong-un, the North Korean leader, was “starting to respect us,” Mr. Trump said.China says North Korea tensions have reached ‘tipping point’ | AFP:
Foreign ministry spokeswoman Hua Chunying urged all sides to avoid provocations and repeated Beijing’s call for the North to suspend missile tests in return for a halt to US-South Korean military exercises.
The situation is “now at a tipping point approaching a crisis. At the same time there is an opportunity to reopen peace talks”, Hua told a regular news briefing.
“We hope relevant parties can consider how we can de-escalate the situation on the peninsula and realise peace and stability on the peninsula,” she added.
So why is the prospect of a Second Korean War being normalized to the American public? Is this all Trump’s fault? Trump’s language of “fire and fury,” along with less colorful but equally ominous statements by administration officials, is feeding off of shifting perceptions of the threat that North Korea poses to the United States, both in terms of capabilities and intentions. The administration’s frequent references to military options, magnified by relentless media coverage, stir up public anxiety and openness to war as a solution. Trump will never change his language game. But the public can and should reflect on the true nature of the threat, whether it presents a clear and present danger to Americans, and most important, whether it merits all the talk of war as a viable solution.
3. More Details Of The China-India Border Backdown
Comment: Deal done in time to save the BRICS meeting in Xiamen this weekend, and the Chinese can blame the weather for halting construction.
Dealing with Xi in Hamburg on Doklam fit this definition. So, when the PM shook Xi’s hand, insiders told ThePrint, he raised the issue almost soon after they were done with pleasantries. Modi told Xi that a solution ought to be found soon, reminding him of their conversation at the SCO, where both leaders had agreed to not let differences turn into disputes.
Those familiar with the details of the exchange said that the Chinese President was at first quiet, and then said that officials on both sides should talk.
And so, the talks started. All the talks took place through established diplomatic channels, which a source said, never went cold despite all the rhetoric from the Chinese side…
So, through a mutually agreed plan, India took the first step and withdrew its troops on Monday, thus bringing to end a 70-day stalemate.
Further evidence of a halt to Chinese building work in the area came from The Times of India.
The paper reported on Tuesday that as Indian troops withdrew from their post at Doklam, Chinese soldiers and road building equipment were also pulled back from the area.
The report said the negotiations to end the stand-off were first conducted during a visit to China by Indian National Security Adviser Ajit Doval in July. Doval held talks with Chinese State Councillor Yang Jiechi.
“We will make an overall assessment of the weather conditions and all related factors, and according to the actual circumstances complete construction plans for the Dong Lang (Doklam) area,” spokesperson Hua Chunying told a daily news briefing.
Comment: But dodges answering the question of whether or not China has stopped construction.
4. Meng Jianzhu Visits Xinjiang, The Perfect Testbed For Panopticon 2.0
A Communist Party of China (CPC) senior official has called for the use of new technologies such as big data and artificial intelligence to fight terrorism in northwest China’s Xinjiang Uyghur Autonomous Region.
Meng Jianzhu, a member of the Political Bureau of the CPC Central Committee and head of the Commission for Political and Legal Affairs of the CPC Central Committee, made the remarks during a five-day inspection in Xinjiang, which concluded Sunday.
He highlighted the role of political and legal organs in safeguarding stability of Xinjiang and national security, calling on police officers to improve their political quality and abilities to better fight crime and protect the people.
5. Hong Kong Coffin Homes
The residents of Lucky House in Hong Kong are anything but fortunate. They are some of the poorest people in the most expensive city in the world.
In one of its 46 sq metre (500 sq ft) apartments, 30 residents live in purpose-built plywood bunk beds each with its own sliding door, colloquially known as coffins. Two rows of bunks, 16 bunks in each row – still space for two more people.
The residents are retirees, working poor, drug addicts and people with mental illnesses, mostly those unable to keep pace with the spiralling cost of housing in Hong Kong.
6. Red Hot Patriotic Students in Australia
Comment: John Garnaut has spent a lot of time looking at the ways that the Chinese Communist Party projects its influence through Australian politics, media, education and society. Other Western governments should talk to Garnaut because this is not just happening in Australia. Xi is an old school Party guy, and one of the underappreciated pillars of the Chinese Communist Party is the United Front Work Department, a body that Xi has re-energized.
Universities should be aware of the “red hot patriotism” Beijing is stirring up on Australian campuses and the national security risks posed by such fervour, a former adviser to Prime Minister Malcolm Turnbull says.
John Garnaut, now an independent consultant, told The Australian Financial Review’s Higher Education Summit that the Communist Party wanted Chinese nationals to remain highly loyal even while studying overseas.
That meant following them wherever they go in the world, including to Australia, where 30 per cent of foreign students are Chinese.
7. China Bears And China Bulls Continue Their Dance
The supporters, led by Ren Zeping, chief economist at Founder Securities, contend the government’s supply-side reform campaign and a prolonged slump in the producer price index (PPI) — a measure of the change of selling prices that producers of goods and services receive — have paved the way for a new wave of industrial expansion…
Countering the expansion cycle argument, however, are economists who caution that the rebound for upstream industrial profits and product prices — mainly driven by the government’s supply-side squeeze — has put more pressure on downstream sectors. The result, they say, is that downstream companies have found their investments and expansion abilities constrained.
Given that China’s economic growth relies heavily on investment in infrastructure projects and property development, the new cycle naysayers maintain, it’s simply too early to call the current environment a manifestation of a new, expansionary leg of the nation’s economic cycle.
It’s been exactly two years now since turmoil in China’s currency markets threw investors around the globe into panic. After the shock in late August of 2015, another tantrum followed in early 2016. Since then concerns about China have diminished. The consensus seems to be that Beijing once again has regained control. Nonetheless, Anne Stevenson-Yang remains skeptical. The co-founder of the influential research firm J Capital warns that the speculation in the Chinese real estate market is getting evermore excessive. “There is little comfort that the economy can go on for much longer without some catastrophic adjustment”,
Comment: So far most Western predictions of impending doom over the last two decades have failed to take into account the role of the Party and the stability maintenance apparatus, or provide a convincing pathway for such a collapse to happen. That is not to say it will not happen, just that people who are trying to dig into this really need to pay attention to the politics and the Party, not just the data.
8. How Many Kids Now Being Raised To Be Live-streaming Stars?
The ‘online goddess’ who earns $450k a year – BBC News video series on a Chinese live-streaming star…fascinating
Business, Economy And Trade
Leading economists at odds over how to turn around Chinese rust belt’s fortunes | South China Morning Post Justin Lin Yifu, who was the World Bank’s chief economist and a senior vice-president from 2008 to 2012, proposed that Jilin, on the border with North Korea, encourage light and textile industries to move from the country’s coastal areas, where labour costs are higher. Jilin should also consider expanding heavy industry and manufacturing. The suggestions are part of a 300,000-word policy proposal published by a team headed by Lin, a Peking University professor who studies how less-developed areas can catch up with wealthier ones.
Demolish the factories – China’s violent economy helps iron ore prices | afr.com In one of the clips sent to The Australian Financial Review, an officer is seen taking his hammer to a factory’s production equipment in an extreme example of how President Xi Jinping’s signature economic policy, Supply Side Reform, is actually implemented.
Evergrande’s Ever More Risky Bet on Chinese Housing – WSJ Evergrande’s sales also doubled in the first half, buoyed by strong housing prices in China’s smaller cities. The developer has gobbled up land in the past few years by loading up on debt, a strategy that is paying off for now. Despite the strong results, Evergrande’s borrowing is still rising, with its net debt increasing 17% to $61 billion since December. // Comment: Evergrande so far has been mostly Everpain for shorts…
China’s 4th Biggest Builder Discloses Overdue Debt – Bloomberg Companies under Greenland’s unit in Liaoning had overdue short-term debt of 247.5 million yuan, as well as 210 million yuan in long-term obligations, according to Greenland’s interim report dated Aug. 25. The company told Bloomberg News last week its project in China’s northeast faced repayment problems due to the region’s weak real estate market.
China’s Central Bank Is Working Hard to Stand Still – Bloomberg “High leverage has put the central bank in a dilemma where easing could further expand the scale of debt and where tightening pushes up interest expenses and weighs on growth,” said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. “The PBOC is using open-market monetary tools to stay flexible and strike a balance.” Achieving those aims, without a change in the benchmark lending rate, in practice means constant fine-tuning of daily conditions in the inter-bank money market. Over the past year, the PBOC has poked and prodded traders using an array of lending and cash-absorbing instruments of different maturities
China’s fledging private banks get off to a smooth start in nation run by the Communist Party | South China Morning Post Average private banking net interest margins sat at 4.86 per cent at the end of June, more than double the industry average of 2.05 per cent, according to quarterly regulatory data, down from 4.95 per cent as the end of March
China undermining international cooperation by putting its own interests first, says US Navy chief | South China Morning Post Rear Admiral Don Gabrielson, commander of the Logistics Group Western Pacific, said nations should not seek to undermine the “existing system” through unilateral actions, without naming any specific countries. He later said China, which has turned reclaimed reefs in the disputed South China Sea into military outposts, was proceeding with a “long-term plan” for the region.
Alibaba Wants to Bring Big Data to 1 Million Mom-and-Pop Stores – Caixin Global The Alibaba Distribution Platform (ADP), a retailer management system established in May 2016, offers marketing, logistics and training services to independent shop owners. The platform also collects and provides data to help them predict customer demand and keep up with consumer tastes. One of Alibaba’s goals is to rebrand 10,000 mom-and-pop stores under the name of its online marketplace, Tmall.
Five years on: Innovation in China – SCIO The Communist Party of China will hold its 19th Party Congress later this year, which occurs once every five years. China SCIO has compiled a series of infographics to summarize the country’s achievements made in the past five years. The following is a look at innovation in China. // Comment: And definitely innovative in infographics
独家∣辉山乳业初步重组方案遭个人投资者抗议 呼吁追究资金流失责任_金融频道_财新网 Caixin-individual investors protest the Huishan Dairy reorg plan
政策性银行规制征求意见 补短板强化政策性金融定位_金融频道_财新网 Caixin-new rules coming for policy banks
Politics And Law
The Arithmetic of Party-Speak – David Bandurski – Medium I think everyone would agree that none of the formulas above get us down to the specifics of the upcoming 19th National Congress. But they do offer us a snapshot of what the leadership 1) believes the Party must stand for (the 5 whats); 2) sees itself as having accomplished in the past 5 years (the 9 we’s); 3) ascertains as its contribution historically to China and to the world by virtue of its guiding ideology, “socialism with Chinese characteristics” (the 3 means that’s); and 4) what it understands its chief obligations toward the people to be (the 8 mores).
十八届中央第十二轮巡视整改情况将陆续公布–时政–人民网 Comment: CCDI releases rectification status reports for the targets of the 12 round of inspections
“砥砺奋进的五年”系列报告会第二场报告会举行 中央纪委副书记、监察部部长杨晓渡解读全面从严治党成就————头条——中央纪委监察部网站 28日下午，中央宣传部、中央直属机关工委、中央国家机关工委、教育部、中央军委政治工作部、北京市委在京举办“砥砺奋进的五年”系列报告会第二场报告会，邀请中央纪委副书记、监察部部长杨晓渡作了“学习贯彻习近平总书记‘7·26’重要讲话精神 推动全面从严治党向纵深发展”的专题报告。
坚持党的领导 坚定不移走中国特色社会主义政治发展道路–理论-人民网 ——学习《习近平关于社会主义政治建设论述摘编》 闻 言 2017年08月29日07:09 来源：人民网－人民日报
Bloomberg’s Keith Zhai on Twitter: “Shanxi Province has set up a new office：The office to promote educational campaign to safeguard the Core with actions 省委维护核心见诸行动主题教育办公室 Comment: Unlikely just Shanxi
Chinese City Records, Analyzes Citizens’ Emotions – Sixth Tone When residents of Yinchuan, capital of the Ningxia Hui Autonomous Region, call the 24-hour government hotline 12345, staff record whether they seem mild-mannered or more emotional while lodging their complaint. The call center has been collecting this data for over three months, the report said, logging over 90,000 data points.
Foreign And Defense Affairs
[独家V观]没时间吃饭 吃饼干 出访时的习近平忙到日程以分钟计！_央视新闻客户端_央视网(cctv.com) One detail from the first episode of “Major Power Diplomacy” is that on some trips Xi is so busy he has not time to eat other than crackers and he his schedule is broken up into minute increments
Pakistani, Chinese officials discuss Afghanistan amid tension with U.S. – Reuters The decision by Pakistan to postpone the visit of Alice Wells, acting assistant Secretary of State for South and Central Asian Affairs, came a week after President Donald Trump said Islamabad was prolonging the war in Afghanistan.
SCIO briefing on BRICS opportunities, challenges and prospects Ladies and gentlemen, good morning. Welcome to this press conference. As far as I know, you all share great interest in the prospects of BRICS cooperation. To help you gather more information on it, we invited Mr. Zhang Yansheng, the chief research fellow of the China Center for International Economic Exchanges, and Mr. Zhang Jianping, the deputy director of the Academic Steering Committee of the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce, to make an introduction and answer some of your questions
Tech And Media
Why Amazon Isn’t Ready for Prime Time in China – WSJ the company’s main pitch to Chinese consumers—authentic Western goods shipped free from abroad—is being weakened as Chinese rivals strengthen their offerings and dangle discounts.
Baidu’s VP Wang Haifeng now leads Baidu Research Institute to further develop its AI application for commercial use – TechNode Baidu’s vice president, as well as head of Baidu’s AI department Wang Haifeng, will serve as director of Baidu Research Institute (in Chinese). With Wang’s increased dominance in Baidu’s AI arm, Baidu’s Artificial Intelligence Group (AIG) will strengthen R&D on the AI application technology for commercial use, including autonomous driving and airport services.
Society, Art, Sports, Culture And History
Young people in China have started a fashion movement built around racial purity — Quartz The Han Clothing Movement, a youth-based grassroots nationalist movement built around China’s majority Han ethnic group, has emerged over the past 15 years in urban China. It imagines the numerically and culturally dominant Han—nearly 92% of China’s population—as the target of oppression by both China’s minorities and “the West,” in need of revitalization to save China – This piece was adapted from Kevin Carrico’s book The Great Han: Race, Nationalism, and Tradition in China Today
Orthodox Churches, Unorthodox Histories in China’s Far Northeast – Sixth Tone This is the second article in a series about the Chinese Eastern Railway, a historic train line in China’s far northeast.
Tencent’s charity arm is innovating with micro-donations – TechNode you scan that red QR code in the bottom right and are taken to a web app that will work in your browser, but is built for mobile. Once inside you’re treated to a little tune and shown paintings by young artists (age range 11-37 in the ones I scanned) with mental disabilities and spectrum disorders such as autism. Each item in the virtual picture gallery is supplemented with a short artist bio and a buy button. Tap that, input a donation amount (minimum 1元, about 15 cents), authorize a withdrawal from your WeChat Pay, and you become the proud owner of a jpg commemorating your patronage, tailor-made to be shared immediately to your (WeChat) network.
Across China: Playwright Tang Xianzu’s tomb found in east China – Xinhua Tang, born in 1550, was a famous Chinese playwright best known for four plays dubbed the “Four Dreams.” His masterpiece “Peony Pavilion” tells of a romance between an official’s daughter and a poor scholar, as they pursued love and freedom. A play adapted from this story has been performed for international audiences.
Energy, Environment, Science And Health
China conducts first around-the-world integrated maritime research – Xinhua Xiangyanghong 01, China’s elite science ship, began its journey around the world Monday on the country’s first maritime research that integrates oceanic and polar research. Under the State Oceanic Administration (SOA), the research will focus on resources, the environment and climate in its six segments, and will mainly be conducted in the southern hemisphere, according to Li Tiegang, major researcher at the SOA.
China says nuclear safety law ready to be passed – Reuters The new law is needed to better ensure nuclear safety, prevent and deal with nuclear accidents, protect people’s health and the environment and promote the industry’s development, the official Xinhua news agency said, citing parliament’s standing committee.
Dozens Missing After Landslide in Guizhou – SixthTone The landslide happened at around 11 a.m. in Pusa Villa, nestled in the mountains of Nayong County near Bijie, a city in Guizhou province. According to witnesses’ cellphone videos, the face of the mountain collapsed over a span of about 30 seconds, sending an enormous cloud of dust and debris into the air.
$3 Million Gift Establishes Tang Chair in China Policy Studies at RAND | RAND Cyrus Tang is the CEO and chairman of Tang Industries, an international manufacturing and distribution company based in Las Vegas. Michael Tang is vice chairman of Tang Industries and CEO of National Material L.P. They are both longtime RAND supporters.
中小学三科将启用统编教材 革命英雄主义篇目回归语文书_政经频道_财新网 9月1日开学，中国中小学“道德与法治”“语文”和“历史”三科将启用教育部统编教材。据三个科目的编写组专家介绍，新教材均以中华优秀传统文化教育和革命传统教育为重点 // Comment: Revised textbooks for primary and middle school students starting this year, more focus on Chinese traditional culture and Party revolution education…an interesting mix…Two weeks ago I bought the grade 6 language books for my kids to study with their tutor but have yet to read them.
国华热电厂原址将建艺术园 – 国内 – 新京报网 “长安街最后一根烟囱”国华热电厂机组两年前全部关停，原址利用方向明确：厂区将改造成为与首都功能相匹配的中国当代顶级美术馆及国际高端文化艺术园区。 // Comment: The heating plant just east of huamao in Beijing is giong to become an art park
北京市将实行“路长制”实名治堵-千龙网·中国首都网 Comment: Beijing issues its annual warning about awful traffic days in September due to holidays, now ruins the month for traffic officials by assigning sections of roads to individual officials to take responsibility for traffic problems…mid-autumn festival is always a rough traffic period, the last one before Xi became general secretary was a traffic nightmare, and actually blamed in large part on people running around town dropping off gifts, mostly mooncakes, or mooncake boxes filled with cash. I remember a friend told me he always opened the mooncake box before he re-gifted it (who besides my kids actually likes eating a lot of them?) because there might be cash inside instead of the cakes…the good old days…
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