Yang Jiechi Comes To DC; PRC Spy In New Zealand?; Chen Min’er Profile; PLA Reshuffling-Sinocism-09.13.17

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

Happy Wednesday…a bare bones issue today, went to a fun book for Richard McGregor and his excellent new book Asia’s Reckoning: China, Japan, and the Fate of U.S. Power in the Pacific Century then stayed up too late with an old friend. It was great seeing so many Sinocism readers at the event, but a bit fuzzy this AM so commentary is very limited.

Yang Jiechi’s appearance in DC Tuesday confirmed Sinocism’s scoop that he had come to town unannounced Monday night. What is unclear is if his visit was “normal”, or if Beijing was worried about possible additional North Korea sanctions and/or delays in Trump’s planned November visit to Beijing and so dispatched him on short notice. If any readers have more insight and want to share please do (Signal +13012460858).

AnchorThe Essential Eight

1. Yang Jiechi Comes To Washington

Diplomats promise ‘results’ for Trump’s China visit – People’s Daily Online:

The top diplomats of Beijing and Washington vowed that the two countries will work together to ensure US President Donald Trump’s first visit to China yields “fruitful results”, according to a statement released by the Chinese Foreign Ministry on Tuesday night.

In his meeting with US Secretary of State Rex Tillerson in Washington on Tuesday, China’s State Councilor Yang Jiechi said Beijing is ready to work with Washington to push Trump’s state visit to China, scheduled for “within this year”, to attain positive outcomes.

Video-Rex Tillerson welcomes China’s Yang Jiechi:

Secretary of State Rex Tillerson took no questions from reporters as he welcomed Chinese State Councilor Yang Jiechi at the State Department on Sept. 12

Comment: The US side has only released a video of the two shaking hands, no readout of any meetings. 

Trump to Visit China in November Amid North Korea Tensions, Source Says – Bloomberg:

U.S. President Donald Trump will visit China in November, a person familiar with his plans said, as tensions flare on the Korean peninsula due to Pyongyang’s nuclear and missile tests.

Comment: Sinocism readers knew a November trip was on the cards in late August

Mnuchin Threatens More Sanctions on China Over North Korea – Bloomberg:

“If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system — and that’s quite meaningful,” Mnuchin said during an event at CNBC’s Delivering Alpha conference in New York on Tuesday.

2. New Zealand Legislator Suspected Of PRC Intelligence Ties

China-born New Zealand MP probed by spy agency – FT $$:

The fact he has served for six years in the governing party of a member country of the “five eyes” intelligence alliance raises questions about western preparedness to deal with China’s increasingly aggressive efforts to influence foreign governments and spy on them.

“China has been very active in recent years placing and cultivating people at the grassroots political levels of western democracies and helping them to reach positions of influence,” said Christopher Johnson, a former senior China analyst at the US Central Intelligence Agency now at the Center for Strategic and International Studies in Washington.

Mr Johnson warned that while Beijing appeared to see New Zealand as a softer target than countries such as the US and UK, “it may also be using it as a testing ground for future operations in other countries”.

Newsroom Investigation: National MP trained by Chinese spies:

A National Party MP who studied at an elite Chinese spy school before moving to New Zealand has attracted the interest of our Security Intelligence Service.

The list MP Jian Yang did not mention in his work or political CVs a decade he spent in the People’s Liberation Army-Air Force Engineering College or the Luoyang language institute run by China’s equivalent of the United States National Security Agency.

That agency, the Third Department, conducts spying activities for China.

China-born New Zealand MP responds to FT report – FT $$:

He also said the reports about his background were a “smear campaign” and suggested that anti-Chinese racism was the motive.

3. The New York Times Profiles Chen Min’er

After Toiling in Rural China, a Protégé of Xi Jinping Joins Party’s Top Tiers – The New York Times:

Guizhou is one of China’s poorest provinces, yet its villages of rice paddies, buffalos and mud-brick homes have long been a proving ground for rising stars in the Chinese Communist Party. The former president, Hu Jintao, once ran this mountainous southwestern province, as did a powerful lieutenant [Li Zhanshu] to President Xi Jinping.

Now, the party has tapped another leader in Guizhou for promotion into its top tiers, making him a potential candidate to one day succeed Mr. Xi. The official, Chen Min’er, 56, a former Chinese literature student and propaganda worker, is nearly certain to enter the Politburo at a party congress in the autumn, putting him in the running for an even more powerful role in the future.

4. LeEco Appears To Be LeToast

LeEco units owing money to suppliers blacklisted as defaulters by China’s supreme court | South China Morning Post:

In another body blow for its embattled founder, Jia Yueting, China’s highest court has placed two of the company’s subsidiaries on a blacklist of debt defaulters owing money to suppliers.

Inclusion on the list places restrictions on some of the firms’ executives, including a ban on travelling by aeroplane in the mainland.

LeEco Takes Down U.S. Website for ‘Maintenance’ As American Headcount Shrivels – Caixin Global:

News of the site’s temporary closure came as Chinese media posted images of what they said were empty offices at LeEco’s U.S. headquarters in Silicon Valley. A LeEco source told Caixin those photos weren’t representative, and were taken at nonworking times when few or no people are in the company’s offices.

5. Dou Wentao’s Excellent Phoenix TV Show Cancelled

One of China’s Longest-Running and Most Popular Talkshows Suddenly Cancelled | What’s on Weibo:

“Behind the Headlines” (锵锵三人行) is a talk show by Phoenix TV (FengHuang) that is hosted by presenter Dou Wentao. The program has broadcasted every week day since 1998, inviting two guests on every episode.

The program is characterized by its unpretentious language and discussions, featuring easygoing discussions over the headlines and hot topics of the day/week. According to Phoenix TV, the show is meant to be “thought-provoking, interesting and relevant to our daily lives.”

6. PLA Leadership Reshuffling Continues

Comment: Certainly much change is to be expected this year. And for all the talk of unhappy soldiers because of the PLA reforms and corruption crackdown, remember that one officer’s downfall is another’s opportunity…

Young guns including Xi Jinping’s top military aide expected to move up the ranks | South China Morning Post:

Of the 40 or so military members of the 200-strong elite Central Committee, seven are expected to keep their seats during next month’s reshuffle at the Communist Party congress – half the number that stayed on in 2012, according to a list of delegates announced last week…

The campaign to weed out corruption had created opportunities for younger officers, according to Zeng Zhiping, a military expert at the Nanchang Institute of Technology in Jiangxi. “Older generals are bowing out earlier because of the anti-graft drive and that’s creating openings for the young guns,” Zeng said.

Comment: A Wechat account of Beijing Youth Daily looks at the all the recent personnel changes in the CMC, includes a useful table




北部战区司令员宋普选已调任军委后勤保障部部长_人事风向_澎湃新闻-The Paper 据微信公众号“解放军报记者部”消息,军委机关服务保障改革推进会今天在京举行。报道显示,中国人民解放军北部战区司令员宋普选已担任军委后勤保障部部长。 2015年9月,宋普选担任纪念中国人民抗日战争暨世界反法西斯战争胜利70周年阅兵总指挥。

7. The Party Ordering Up Financial Markets Stability Through The 19th Party Congress

China Bans Brokerage CEOs From Time Off, Trips Amid Congress – Bloomberg:

The China Securities Regulatory Commission has ordered local brokerages to mitigate risks and ensure stable markets before and during the Communist Party’s twice-a-decade leadership congress, which starts on Oct. 18, according to people familiar with the matter. The CSRC has also banned brokerage bosses from taking holidays or leaving the country from Oct. 11 until the congress ends, the people said. The regulator didn’t immediately reply to a faxed request for comment.

8. Saving Face Takes On A Whole New Meaning As China Entes Facial Recognition Era

Across China: Facial scanners on guard at Beijing’s university dorms – Xinhua:

Beijing Normal University has installed 44 facial scanners on its 19 dormitory buildings, for the 18,000 students on campus…”We can now find out who does not return to the dorm or returns late,” he said. “The machines will help us better monitor the students’ whereabouts.”

Chinese drink-driver’s cheeky fraud attempt backfires as police use hi-tech software to wipe the smile off his face | South China Morning Post:

When police checked a database of registered drivers they found a record for Fu Qiang, but were puzzled by the fact the file photograph did not match the appearance of the suspect.

When questioned about the lack of a resemblance, Zhou said that he had undergone extensive cosmetic surgery since the photograph had been taken. He also claimed to be a plastic surgeon, the report said.

Police were unconvinced and decided to use facial recognition software to investigate further.

取款方式巨变!刚刚,农业银行重大宣布!-Agricultural Bank rolling out facial recognition for ATMs.

AnchorBusiness, Economy And Trade

Trading Halts Fuel Talk of Next Megamerger for State-Owned Metals Giants – Caixin Global Leading aluminum producer Aluminum Corp. of China Ltd. (Chalco) said it is planning an event that may constitute a “material asset restructuring,” according to a filing to the Hong Kong Stock Exchange late on Monday. It said it will try to determine within 10 trading days whether the event constitutes a material asset restructuring. On the same day, Shenzhen-listed metals trader Sinosteel Engineering and Technology Co. Ltd. issued a similarly worded announcement, also giving the same time frame of 10 trading days.

WATCH: Jack Ma does his best Michael Jackson impression at Alibaba birthday bash: Shanghaiist After showing his love for the gathered masses, Ma stars in a Michael Jackson medley dance number with other Alibaba employees

Foreign Investors Snap Up Chinese Bank Debt – WSJ Foreign investors’ holdings surged to 88.3 billion yuan ($13.5 billion) in August, from 24.5 billion in July and just 2.2 billion yuan in January, according to data provider WIND Info. Their net 63.8 billion yuan in purchases last month put them second only to a group of nonbank institutions that include Chinese brokerages, insurers and trust companies. Still, foreign investors’ holdings account for only 1% of the NCD market.

In China’s Hinterlands, Workers Mine Bitcoin for a Digital Fortune – The New York Times Here, in what is locally called the Dalad Economic Development Zone, lies one of the biggest Bitcoin farms in the world. These eight factory buildings with blue-tin roofs account for nearly one-twentieth of the world’s daily production of the cryptocurrency. Based on today’s prices, it issues $318,000 in digital currency a day.

KraneShares MSCI One Belt One Road ETF (Ticker: OBOR) Lists on the New York Stock Exchange | KraneShares Krane Funds Advisors, LLC, (“KraneShares”) a U.S. asset management firm known for its China focused KraneShares exchange traded funds (ETFs) and innovative China investment strategies, announced the launch of the KraneShares MSCI One Belt One Road ETF (ticker: OBOR). The OBOR ETF, listed on the New York Stock Exchange, holds strategic companies from countries participating in China’s One Belt One Road initiative (OBOR).

Fosun Hitches Up Deal for China’s First Privately Owned Railway – Caixin Global Parties signed an investment agreement for the public-private partnership (PPP) rail project in Zhejiang province on Monday. The deal was the first of its kind in the railway sector to have private investors hold a controlling state. The 269-kilometer (167-mile) railway line, which will have a target speed of 350 kph, will link the provincial capital of Hangzhou with the city of Shaoxing. The line will end in the city of Taizhou in the south of the province.

China Prepares Sale of $2 Billion in U.S.-Dollar Bonds – WSJ The coming offering would be a first step toward building a liquid benchmark yield curve that could eventually help lower the cost of funding for Chinese companies, including state-owned enterprises, banks and private corporations. “In an environment where assessments of China’s debt issues have been pretty adverse, the result might be quite positive for them and, by extension, for the valuation of Chinese assets,” said Edmund Harriss, a London-based portfolio manager of the Guinness Atkinson Renminbi Yuan and Bond Fund.

How an Alibaba Spinoff Created the World’s Largest Money-Market Fund – WSJ Yu’e Bao has accrued 370 million account holders and $211 billion in assets in just four years. As its model is replicated, the government is enforcing new regulations

Govt to step up efforts against money laundering, terrorism financing, tax evasion – Gov.cn China will strengthen measures against money laundering, terrorism financing and tax evasion, as the country’s major part of building a modern financing regulation system and safeguarding stability, according to a circular released by the State Council General Office. The circular stated that an improved law and regulation system and a coordinated regulation mechanism should be set up by 2020, to effectively prevent and control unlawful actions. 国务院:完善跨境异常资金监控 打击跨境金融犯罪 

Guangzhou Tests Developers’ Appetite for Rental Housing – Caixin Global The land resources and planning authorities in a development zone in Guangzhou in southern China are asking developers to bid for a plot of land for the construction of housing with some unusual conditions attached — they must retain ownership of the development for the entire 70-year term of the land-use rights and can rent the apartments only to the employees of industrial enterprises.

AnchorPolitics And Law

Guo Wengui’s Former Assistant Files Rape Lawsuit in New York – Caixin Global The lawsuit document, seen by Caixin, said the 28-year-old plaintiff — who was employed by one of Guo’s China-based entities — was “lured” to New York for what she believed would be a one-week trip, but was forced to stay and then became Guo’s captive for three years.

China ‘Feminist Five’ activist handed 10-year travel ban – FT $$ Wu Rongrong, one of the five students arrested two years ago, is set to miss her enrolment for a law degree at a Hong Kong university because of the travel ban, which activists say breaks the record for the longest single injunction handed down in such cases.

Fujian Family Exonerated in 14-Year-Old Murder Case – Sixth Tone After serving 14 years in prison for murder, Miao Xinhua was declared not guilty by a court in eastern China on Tuesday, reported The Paper, Sixth Tone’s sister publication. Miao had initially been sentenced to death for strangling his former girlfriend, Yang Yanhui, in his hometown in Zherong County, Fujian province, in April 2003. In addition to Miao, four of his family members — who told the court that police had tortured them into confessing — were sentenced to between three and eight years in prison for their alleged roles in disposing of Yang’s body.

China Focus: TV documentary exposes untold stories of anti-corruption campaign – Xinhua Aired on state media China Central Television and the website of the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI) from last Thursday to Monday, the four-episode “The Sword of Inspection” revealed details about how the country’s graft watchdog brought corrupt officials to justice.

AnchorForeign And Defense Affairs

Ghost stores, lost billions as Korea Inc’s China woes grow – Reuters Upset over Seoul’s decision to deploy the Terminal High Altitude Area Defense (THAAD) system, tour operators say China has quietly banned groups traveling to South Korea, once one of the most popular destinations for Chinese tourists. Cruises have erased Korean ports from their trips and some flights have been cut. “Things have never been worse since formal diplomatic relations were established between the two in 1992,” said Han Jae-jin, an economist at the Hyundai Research Institute.

President Xi Jinping: China says its open to talks on Mansarovar – The Economic Times “China is ready to keep communication with the Indian side in regard to opening of the pass and other issues concerning the pilgrimage by Indians,” Chinese Foreign Ministry spokesperson Geng Shuang said in Beijing exactly a week after PM Narendra Modi and President Xi Jinping met to put in place a mechanism to avoid Doklam-type standoff in future.

What the World’s Emptiest International Airport Says About China’s Influence – The New York Times Magazine It’s tempting to see OBOR as a muscled-up Marshall Plan, the American-led program that helped rebuild Western Europe after World War II. OBOR, too, is designed to build vital infrastructure, spread prosperity and drive global development. Yet little of what China offers is aid or even low-interest lending. Much OBOR financing comes in the form of market-rate loans that weaker countries are eager to receive — but may struggle to repay. Even when the projects are well suited for the local economy, the result can look a bit like a shell game: Things are built, money goes to Chinese companies and the country is saddled with more debt. What happens when, as is often the case, infrastructure projects are driven more by geopolitical ambition or the need to give China’s state-owned companies something to do? Well, Sri Lanka has an empty airport for sale.

BeiDou navigation to cover Belt and Road countries by 2018 – Global Times China now has 17 communication satellites in orbit, with nearly 300 transponders, and the country’s satellite communication services cover over 30 countries and regions, said Wu, who is also deputy head of the State Administration for Science, Technology and Industry for National Defence. Since the launch of APSTAR-9, one of China’s advanced communication satellites in October 2015, China’s satellite communication services have also covered most areas along the 21st Century Maritime Silk Road, he said.

China Focus: China welcomes more overseas returnees – Xinhua In 2016 alone, more than 432,000 foreign-educated Chinese had returned to the country, up 58.48 percent from that in 2012, according to a recent survey carried out among returnees by the Center for China and Globalization (CCG), a major Chinese think tank.

Computational propaganda poses challenge – Global Times The rise of computational propaganda calls for a new model of global Internet governance. Global Internet governance has been paralyzed due to the dichotomization between the “multi-stakeholder” and “multilateral” approach to governance. It is time to seek a middle way to rebuild global Internet governance and address the terrible beauty of computational propaganda born in the era of Pax Technica.

AnchorHong Kong, Macao And Taiwan

辱骂同胞是“支蛆”的高考状元 被母校官网除名了 “港中大事件”发酵至今,内地撕海报女生的英勇仍在口耳相传,但另一名内地学生的所作所为却让人心寒不已。 一名在港中大就读的内地学生被曝用侮辱性的“支蛆”一词辱骂网友,北大教授张颐武也感慨称“无尽的悲哀”。这个人就是唐立培,被扒出曾是四川泸州的高考状元。

AnchorTech And Media

Suicide Note of WePhone Founder Su Xiangmo (Translation) | What’s on Weibo “I am the founder of the WePhone app, and today I have to go. The app cannot continue, and I am sorry about that. I would have never expected things to turn out this way. It was my extremely vicious ex-wife Zhai Xinxin who killed me in the end.

Here’s what Chinese media are reacting to new iPhone lineup – TechNode The Paper reports that the iPhone X is the most expensive iPhone in history but the Face ID and the Animoji features deserve some applause. The state-owned media Huanqiu reports that it’s complicated for consumers to choose from Apple’s lineup of eight different smartphone products, which may have gone off course from Steve Job’s principle “less is more.”

Chinese city orders 3D printing firms to register with authorities to stop technology being used by criminals | South China Morning Post Local police in Chongqing began requiring these companies to register with the government on Monday, according to the Xinhua news agency.

China’s game developers take the stage at Steve Jobs Theater – TechNode The long-awaited Apple event has come to an end, offering the world some pretty cool tech. But while most of the world is still savoring Apple’s latest hardware updates, we can’t overlook the increasingly important roles that Chinese gaming companies are playing in Apple’s—or even the world’s—content ecosystem.

iPhone X costs almost double China’s average monthly salary – TechNode Apple just announced its latest lineup of smartphones. The new iPhone X is priced at RMB 8,388 (roughly $1,284) and RMB 9,688 ($1,483) in China, much pricier than those in the United States where it goes for $999 and $1,149. That’s almost double the average monthly salary of China.

AnchorEnergy, Environment, Science And Health

China’s plastic demand to rise as foreign garbage ban to curb recycled supply – Reuters To make up for the loss of recycled plastic, petrochemical producers and exporters to China from the Middle East, South Korea, Thailand and Singapore are expected to receive more orders for products including polyethylene, a thermoplastic found in almost everything from grocery bags to bubble wraps, pipes, medical devices and even bulletproof vests.

China sets up first ‘commercial’ quantum network for secure communications – Reuters Now the country’s “first commercial quantum private communication network” has been setup for exclusive use by more than 200 government and official users in Shandong’s provincial capital Jinan, the official Xinhua news agency said late on Tuesday.

China’s war on smog chokes Shandong industries, smokes out fuel kiosks – Reuters “Shandong local refineries’ utilization ratio will remain medium to low because of the government’s safety checks, (which have been) tightening supplies as demand rises,” said Li Yan of Shandong-based consultancy Longzhong Information Technology.

China sets 2020 target for nationwide ethanol use to cut corn stocks – Reuters It’s the first time the government has set a targeted timeline for pushing the biofuel, known as E10 and containing 10 percent ethanol, across the world’s largest car market, although it has yet to announce a formal policy.

China faces double danger from typhoons as Talim and Doksuri threaten to strike coastline | South China Morning Post Authorities warn 10 provinces could be hit by powerful storms as Taiwan braces for first impact

China Focus: Officials feel pinch in China’s sweeping pollution crackdown – Xinhua Liu Changgen, deputy director of national environmental inspection office, said it will dispatch 100 enforcement teams to fight air pollution around Beijing. A qualitative assessment will be introduced for the first time on officials. If cities fail to meet annual air quality improvement targets, the Communist Party chiefs, mayors and vice mayors will be held accountable, Liu said.

Ghosts of the vermillion sea | China Dialogue: Ten years after China’s own Yangtze river dolphin was declared functionally extinct, demand from the country’s consumers has brought another cetacean to the brink. This time it isn’t in the murky inland waters of China — it’s thousands of kilometres away, in the azure shallows of Mexico’s Sea of Cortez, where only 16 vaquita porpoises are thought to remain. The critically endangered creature is just collateral damage in the hunt for fish maw, dried swim bladders believed to possess a plethora of curative qualities in traditional Chinese medicine.


China pushes need for investment education in primary, middle schools – Global Times The China Securities and Regulatory Commission (CSRC) has launched a pilot project to include investment courses in primary and middle schools, universities and vocational schools in more than 20 regions, including Shanghai, Southwest China’s Sichuan Province and Northwest China’s Ningxia Hui Autonomous Region, news site thepaper.cn reported on Tuesday.


Beijing’s Air Raid Drill on Saturday Morning to Serve as Loud Reminder of WWII Grievances | the Beijinger Beijing residents living out in the suburbs should cancel any plans to sleep in late on Saturday when the city plans to hold its regular air siren drill as part of China’s National Defense Education Day.

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