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China Newsletter: Axios by Bill Bishop

Axios.com, Bill Bishop

Here are some of the top issues today:

There has still been no announcement yet on the promised tariffs on another $200 billion of Chinese goods, but President Trump did threaten on Friday to put tariffs on all imports from China;

Li Zhanshu went to Pyongyang for a fraternal socialist lovefest on the occasion of the 70th anniversary of the founding of the DPRK;

The Xinjiang crackdown was literally front and center of the Sunday New York Times. This issue is only going to grow in importance in the US-China relationship, and the possibility of senior PRC officials making the sanctions list under the Magnitsky Act is very real;

On the eve of an economic meeting and war games in Russia the PRC Ambassador to Russia says that PRC-Russian relations are the best they have ever been;

Jack Ma has announced he will step down as executive chairman of Alibaba one year from today. Alibaba stock sold off but from a political risk perspective his departure from any official posts is probably a good thing. 

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The Essential Eight

1. US-China Trade

Trump tells Apple to make products in U.S. to avoid China tariffs | Reuters:

Trump tweeted that “Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now.”


Comment: Ripping US supply chains out of China and rebuilding them in the US is the goal of Trump and some his officials. It would be deeply disruptive and expensive, but if CEOs and boards of US companies with significant supply chain exposure to China are not seriously exploring serious contingency plans they are not paying attention to the trajectory in US-China relations...

US importers pulling demand forward to get goods before tariffs hit? - China’s Trade Surplus With U.S. Hits New Record - WSJ $$:

The trade gap between the two countries widened to $31.05 billion last month from $28.09 billion in July, while China’s total trade surplus narrowed, data from the General Administration of Customs showed Saturday.


Ex-PBOC's Zhou Sees Sentiment Risk From China-U.S. Trade War - Bloomberg:

Zhou, who retired just this year, said the U.S. tariffs on China -- when looked at in light of the size of the economy -- are “not very significant.” Nevertheless, the pass-through to confidence is a potential channel for disruption.

“People may become nervous,” he said in a Bloomberg Television interview with Francine Lacqua. “Nobody really knows. Suddenly there is a trade war. They may change their mind in terms of stock market investment.”


Trump Advisers Said to Weigh Hacking Sanctions on China in Trade - Bloomberg:

The plan being discussed would use an Obama administration executive order that allows the U.S. to impose sanctions on individuals or entities engaging in “malicious cyber-enabled activities.” But it has sparked a heated debate among administration officials, with Treasury Secretary Steven Mnuchin, who has jurisdiction over the potential sanctions, said to be blocking the effort, the people said.


Beijing seems to still hope bankers can save US-China relations-- Beijing summons top Wall Street bankers for tariff talks | Financial Times $$:

According to three people briefed on the initiative, Chinese Communist party officials have invited the heads of America’s leading financial institutions to attend a “China-US Financial Roundtable” in Beijing on September 16, followed by a meeting with Wang Qishan, vice-president of China.

Chinese officials hope the new group, which will be jointly chaired by Zhou Xiaochuan, a former Chinese central bank governor, and John Thornton, the former Goldman Sachs executive who now chairs mining group Barrick Gold, will meet every six months to discuss Sino-US relations and advise the Chinese government on financial and economic reforms...

US executives invited to attend next week’s event include Stephen Schwarzman, the Blackstone chairman, along with the heads of Citigroup, Goldman, JPMorgan, Morgan Stanley and former Treasury secretary Hank Paulson. The invitations were sent by Fang Xinghai, a vice-chairman at China’s securities regulator and a former aide to vice-premier Liu He...

Chinese representatives will include Yi Gang, Mr Zhou’s successor at the People’s Bank of China; banking and insurance regulator Guo Shuqing; and Liao Min, a finance vice-minister who is also Mr Liu’s closest aide.


This seems almost desperate? Is Wang Qishan really involved, or will he just be meeting afterwards with people he knows anyway? Will they have a substantive discussion with Wang, or another history lesson?

2. Li Zhanshu attends DPRK anniversary celebrations

China's top legislator presents Xi's letter to DPRK leader - Xinhua:

It is an unswerving policy of the CPC and the Chinese government to safeguard, consolidate and develop China-DPRK relations, Xi said in the letter.

Xi said that he and Kim had reached important consensus during their three meetings this year, opening a new chapter in the development of China-DPRK relations.

Xi said he is willing to work with Kim to strengthen the guidance of China-DPRK relations, implement the important consensus reached by the two leaders and push for greater progress in bilateral ties...

Recalling his three meetings with Xi, Kim said he felt in person the valuable and warm DPRK-China friendship, adding that the DPRK will firmly carry on and do its best to develop the friendship no matter how the international situation changes.

The DPRK is carrying out the new strategic line and focusing on the development of economy, said Kim, adding that his country expects to learn from China and further expand exchanges and cooperation in different fields so as to jointly promote the socialist course in both countries.

Kim said the DPRK adheres to the consensus reached during the DPRK-U.S. summit and has taken measures in this regard while the U.S. side should take corresponding actions to jointly promote the political settlement of the Korean Peninsula issue.


Xi's congratulatory telegram to Kim-习近平就朝鲜国庆70周年向朝鲜最高领导人金正恩致贺电 - 中国军网 

习近平强调,中朝两国是山水相连的友好邻邦。中朝传统友谊是两国老一辈领导人亲自缔造和精心培育的,是双方共同的宝贵财富。中国党和政府高度重视中朝友好合作关系,维护好、巩固好、发展好中朝关系是中国党和政府坚定不移的方针。今年我同委员长同志三次会晤,进一步明确了两国关系发展的方向。我愿同委员长同志携手推动中朝关系长期健康稳定发展,更好造福两国和两国人民,促进地区和平稳定。衷心祝愿朝鲜人民在以委员长同志为首的朝鲜劳动党领导下,在国家发展建设事业中取得更大成就。衷心祝愿朝鲜民主主义人民共和国繁荣昌盛、人民幸福安康。


One thing I heard on my recent trip to Beijing is how impressed Xi is with Kim given how skillfully he has played Trump and the South Koreans…

Li Zhanshu's meeting with Kim makes page 1 of the Monday People's Daily - 栗战书会见金正恩转交习近平总书记亲署函--时政--人民网

 CCTV Evening News report of Li Zhanshu's visit to North Korea - 栗战书访问朝鲜并出席朝鲜建国70周年庆祝活动_CCTV

North Korea plays off Washington and Beijing - The Washington Post:

North Korea’s national spectacle over the weekend featured a performance of the popular Chinese folk song “Love My China” and pleased President Trump by not parading nuclear missiles, showing that North Korean leader Kim Jong Un is no diplomatic dunce.

By including the song and literally holding hands with a top Chinese official during a weekend of celebrations marking the 70th anniversary of North Korea’s foundation, a smiling Kim sent a clear message of comradely friendship to Beijing.

And by excluding nuclear-related hardware from a huge parade held Sunday, the young North Korean leader also sent a message that Trump immediately interpreted as “a big and very positive statement” on denuclearization.


3. China-Russia relations are at their best in history?

Interview: Chinese ambassador says China-Russia ties set to expand - Xinhua:

Growing cooperation between China and Russia will bolster the development of bilateral relations, Chinese Ambassador to Russia Li Hui said in a recent interview with Xinhua.

"At present, China-Russia relations are at their best in history. Mutual support for major initiatives and development strategies, as well as the two heads of state attending significant events held by each other are important manifestations of the high-level bilateral relations," Li said.

The Chinese ambassador made the remarks ahead of the fourth Eastern Economic Forum to be held in the Russian city of Vladivostok on Sept. 11-12. Chinese President Xi Jinping will attend at the invitation of his Russian counterpart Vladimir Putin.


Comment: "relations are at their best in history" is quite a claim given the history

Russia and China hold the biggest military exercises for decades - Game on - The Economist $$:

Christopher Johnson, a former CIA analyst now at the Centre for Strategic and International Studies, a think-tank, says America appears to be complacent, clinging to the conventional wisdom that the two giant neighbours will never grow too close, because they distrust each other so much. “In the recent past the notional opponent in the Vostok exercises was China. Now it is China sending some of its best kit to exercise with the Russians against another large notional opponent,” he notes.

From Russia’s point of view, says Alexander Gabuev of the Carnegie Moscow Centre, Mr Putin’s show sends two messages. One is addressed to China. By selling it Russia’s latest military technology, including S-400 surface-to-air missiles and SU-35 fighter jets, and inviting it to take part in its largest military drill even though it is not a formal ally, Mr Putin is showing that Russia no longer sees China as a threat. (Previously, Russia’s leaders were terrified that China might covet the vast and sparsely populated Russian regions of Siberia and the far east.) Now, the logic goes, China should repay Russia for its trust by giving it more money to offset the effect of American sanctions.

The second message is to the West: “If you don’t want to push Russia deeper into China’s embrace, stop pushing it into a corner with sanctions.”


Chinese soldiers join Russia’s largest military exercise since cold war | Financial Times $$:

Russia’s biggest military exercise since the cold war, and its first to be conducted with a country not from the former Soviet bloc, is the strongest sign yet of the deepening strategic bond between Moscow and Beijing that has been prompted by Russia’s souring western relations and may herald a redrawing of the region’s geopolitics. 

Involving 300,000 troops and close to 40,000 vehicles, the seven-day ‘Vostok’ war games will coincide with talks between Vladimir Putin and Xi Jinping in Vladivostok on Tuesday, amid a concerted effort by Russia to pivot east and embrace its powerful neighbour.

Alexander Gabuev, chair of the Russia in the Asia-Pacific Program at the Carnegie Moscow Center, said: “This is pretty huge. These major exercises are designed to simulate responses to aggression from external enemies. 


4. Jack Ma stepping down as Alibaba Chairman in a year

This news got a lot of play over the weekend and as I am writing this Alibaba shares are down over 3%. There are a lot of conspiracy theories out there about this move, some of which may have merit. A South China Morning Post column, which was quickly deleted by the paper,  about the business dealings of Li Zhanshu's daughter just months before the 19th Party Congress caused some real problems for Ma in Beijing.

This leadership change has obviously been in the works for a while; the company's most recent 20-F filing with the US SEC detailed a change in the parts of Alibaba's PRC corporate structure that officially removed Jack Ma from key PRC entities (See The Economist-Alibaba tweaks a controversial legal structure and Deep Throat: The BABA 20-F....Financial Comedy Gold!!

The stock is down today but longer term this may be a good move for Alibaba as it may remove some of the bigger political risks for the company. 

Alibaba Announces Executive Chairman Succession Plan | Alizila.com:

Letter from Jack Ma, founder and executive chairman of Alibaba Group

Dear Alibaba customers, Aliren, and shareholders,

Today, as we mark the 19th anniversary of Alibaba, I am excited to share some news with you: with the approval of our board of directors, one year from today on September 10, 2019 which also falls on Alibaba’s 20th anniversary, Group CEO Daniel Zhang will succeed me as chairman of the board of Alibaba Group. While remaining as executive chairman in the next 12 months, I will work closely with Daniel to ensure a smooth and successful transition. Thereafter, I will stay on the Alibaba board of directors until our annual shareholders meeting in 2020.


Meet Daniel Zhang, the ‘free and unfettered spirit’ who will succeed Jack Ma as Alibaba’s chairman | South China Morning Post:

...employees refer to him as xiaoyaozi, or the “free and unfettered one.” The nom de guerre, after a character from a Louis Cha wuxia novel, has appeared on his business card, Chinese company press statements and in Alibaba’s literature...

Zhang studied finance at the Shanghai University of Finance and Economics. Before joining Alibaba, Zhang served as chief financial officer at Chinese gaming company Shanda Interactive Entertainment and was a senior manager at PwC’s audit and business advisory division in Shanghai.

Zhang first joined Alibaba in 2007 and played a key role in helping to drive Taobao to profit. He is best known for starting the “Double 11” shopping festival, now commonly referred to as Singles’ Day, which has evolved from bringing in 50 million yuan in sales during the first festival in 2009 to 168 billion yuan (US$25 billion) last year.


5. More on the Xinjiang mass detentions

Chris Buckley's article was front and center on page one of the Sunday New York Times. 

China Is Detaining Muslims in Vast Numbers. The Goal: ‘Transformation.’ - The New York Times:

This camp outside Hotan, an ancient oasis town in the Taklamakan Desert, is one of hundreds that China has built in the past few years. It is part of a campaign of breathtaking scale and ferocity that has swept up hundreds of thousands of Chinese Muslims for weeks or months of what critics describe as brainwashing, usually without criminal charges.

Though limited to China’s western region of Xinjiang, it is the country’s most sweeping internment program since the Mao era — and the focus of a growing chorus of international criticism...

After a succession of violent antigovernment attacks reached a peak in 2014, the Communist Party chief, Xi Jinping, sharply escalated the crackdown, orchestrating an unforgiving drive to turn ethnic Uighurs and other Muslim minorities into loyal citizens and supporters of the party...


Comment: Blatant and shameless lying by PRC officials is not going to be a successful propaganda strategy in the face of increasingly overwhelming evidence

“There is no arbitrary detention,” Hu Lianhe, an official with a role in Xinjiang policy, told the U.N. Committee on the Elimination of Racial Discrimination. “There is no such thing as re-education centers.”...

The government’s business-as-usual defense, however, is contradicted by overwhelming evidence, including official directives, studies, news reports and construction plans that have surfaced online, as well as the eyewitness accounts of a growing number of former detainees who have fled to countries such as Turkey and Kazakhstan...

The Times also discovered reports online written by teams of Chinese officials who were assigned to monitor families with detained relatives, and a study published last year that said officials in some places were indiscriminately sending ethnic Uighurs to the camps to meet numerical quotas.

The study, by Qiu Yuanyuan, a scholar at the Xinjiang Party School, where officials are trained, warned that the detentions could backfire and fan radicalism. “Recklessly setting quantitative goals for transformation through education has been erroneously used” in some areas, she wrote. “The targeting is imprecise, and the scope has been expanding.”


China: Massive Crackdown in Muslim Region | Human Rights Watch"

The 117-page report, “‘Eradicating Ideological Viruses’: China’s Campaign of Repression Against Xinjiang’s Muslims,” presents new evidence of the Chinese government’s mass arbitrary detention, torture, and mistreatment, and the increasingly pervasive controls on daily life. Throughout the region, the Turkic Muslim population of 13 million is subjected to forced political indoctrination, collective punishment, restrictions on movement and communications, heightened religious restrictions, and mass surveillance in violation of international human rights law...

The report is primarily based on interviews with 58 former residents of Xinjiang, including 5 former detainees and 38 relatives of detainees. Nineteen of those interviewed have left Xinjiang within the past year and a half.


The report- Eradicating Ideological Viruses’: China’s Campaign of Repression Against Xinjiang’s Muslims 

U.N. rights chief Bachelet takes on China, other powers in first speech | Reuters:

U.N. human rights chief Michelle Bachelet called on China on Monday to allow in monitors after “deeply disturbing” allegations of large re-education camps in which Uighurs are detained in Xinjiang province..


Authorities Detain Uyghur Editor-in-Chief, Directors of Xinjiang Daily Newspaper - RFA:

Ilham Weli, the Xinjiang Daily’s deputy editor-in-chief and director of the Uyghur Editorial Office, was arrested in late July, while directors Memtimin Obul and Juret Haji, and Mirkamil Ablimit, the head of the subsidiary Xinjiang Farmer’s Daily, were denounced during a public meeting at the newspaper’s offices and taken away by police in early August, the sources told RFA’s Uyghur Service.

While the exact reason for their arrest was not made clear, authorities accused them of publishing “two-faced” articles in the Uyghur language section of the newspaper—a term applied by the government to Uyghur cadres who pay lip service to Communist Party rule in the XUAR, but secretly chafe against state policies repressing members of their ethnic group.


6. Crackdown on religion expands

This is going to make it even more likely the US to take a much more confrontational approach to the PRC…If Beijing wants bipartisan unity in DC they could not have chosen a better action than taking the hammer and sickle to Jesus…

Group: Officials destroying crosses, burning bibles in China - AP:

China’s government is ratcheting up a crackdown on Christian congregations in Beijing and several provinces, destroying crosses, burning bibles, shutting churches and ordering followers to sign papers renouncing their faith, according to pastors and a group that monitors religion in China.

The campaign corresponds with a drive to “Sinicize” religion by demanding loyalty to the officially atheist Communist Party and eliminating any challenge to its power over people’s lives.


Protestant Churches in China's Henan Hit by Dawn Police Raids - RFA: 

Authorities in the central Chinese province of Henan carried out raids on four Protestant churches in the early hours of Wednesday, sources told RFA.Dozens of uniformed police officers and local officials raided the Glory Church in Henan's Nanyang city, church members said via social media.

They pulled up in a fleet of vehicles that included an ambulance outside the church at around 6 a.m., throwing a police cordon around the area, they said.

Then, they began tearing down crosses on two of the walls of the church.

Church members who approached the police to ask what was happening were grabbed and pinned to the ground, church members said.


China outlaws large underground Protestant church in Beijing - Reuters

Beijing city authorities have banned one of the largest unofficial Protestant churches in the city and confiscated “illegal promotional materials”, amid a deepening crackdown on China’s “underground” churches.

The Zion church had for years operated with relative freedoms, hosting hundreds of worshippers every weekend in an expansive specially renovated hall in north Beijing...

On Sunday, the Beijing Chaoyang district civil affairs bureau said that by organizing events without registering, the church was breaking rules forbidding mass gatherings and were now “legally banned” and its “illegal promotional material” had been confiscated, according to images of the notice sent to Reuters late on Sunday and confirmed by churchgoers.


7. More bumps in the Belt & Road

Pakistan rethinks its role in Xi’s Belt and Road plan | Financial Times $$:

“The previous government did a bad job negotiating with China on CPEC — they didn’t do their homework correctly and didn’t negotiate correctly so they gave away a lot,” Abdul Razak Dawood, the Pakistani member of cabinet responsible for commerce, textiles, industry and investment, told the Financial Times.

“Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistan companies should be disadvantaged,” he said...

Imran Khan, the former cricket star who was elected Pakistan’s prime minister last month, has established a nine-member committee to evaluate CPEC projects. It is scheduled to meet for the first time this week and will “think through CPEC — all of the benefits and the liabilities”, said Mr Dawood, who sits on the new committee.

“I think we should put everything on hold for a year so we can get our act together,” he added. “Perhaps we can stretch CPEC out over another five years or so.”


Chinese government's top diplomat says Beijing not saddling Pakistan with debt | Reuters:

State Councillor and Foreign Minister Wang Yi was in Pakistan for a three-day visit in the first high-level meetings between the neighbors since new Prime Minister Imran Khan took office...

“CPEC has not inflicted a debt burden on Pakistan, rather when these projects get completed and enter into operation, they will unleash huge economic benefits…and these will create considerable returns to the Pakistani economy,” Wang said during a news conference in the capital Islamabad.

Standing next to Pakistani Foreign Minister Shah Mehmood Qureshi, Wang said 47 percent of Pakistan’s debt comes from the IMF and the Asian Development Bank.


Pakistan official's criticism of China's 'Silk Road' projects raises worries | Reuters:

Dawood’s comments were “mind-boggling” and rare public criticism of China, said Mohammad Zubair, privatization minister in the previous government.

“This is probably the harshest statement about the Chinese in the last 50 years or so,” Zubair told Reuters. “Even if there are issues with the Chinese, those issues could be dealt with in private rather than being made public.”


Malaysia cancels China-backed pipeline projects | Financial Times $$:

Malaysia has cancelled three China-backed pipeline projects, having previously suspended $23bn in schemes linked to Beijing and criticised “lopsided” contracts as well as potential links to the scandal-ridden fund 1Malaysia Development Berhad.

Lim Guan Eng, Malaysian finance minister, said the cancelled projects were two oil and gas pipelines in mainland Malaysia and the island of Borneo that cost more than $1bn apiece, and a $795m pipeline linking the state of Malacca to a Petronas refinery and petrochemical plant in the state of Johor. All were suspended in July.


Cynical Question: Were bribes paid to the politicians who approved these deals? Do their successors want their own taste, or is this a deeper shift?

8. Caixin cover story as if China may see a PE "implosion"

In Depth: Is China on Verge of Private Equity Implosion? - Caixin Global:

The Fuxing Group case is emblematic of an industry that could soon implode the way China’s peer-to-peer lending industry has done, thanks to a combination of shady practices and external economic pressures. The country’s private equity industry operates under a set of rules unique to China that inherently increase risk for investors and the financial system, legal and industry experts told Caixin.

Increasing numbers of private equity funds have exploited legal loopholes and have begun to act like investment banks and other types of traditional financial institutions, exposing their clients to magnified risk — a situation regulators are hoping to change. But while authorities are focusing on raising the bar for entering the private equity business, some industry insiders argue for more stringent supervision and for greater sophistication among investors...

Chinese private equity funds also tend to have shorter partnership terms — usually one to two years — compared with the 10 or more years that are the norm abroad.

“Short-term private equity funds are often examples of debt disguised as equity,” Guo told Caixin. In the way they operate, these funds are essentially taking out short-term loans, he said.

The original Chinese story - 私募基金漩涡


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Business, Economy, Finance And Trade

China Calls for Controlled `Tweaks' to Current Monetary Policy - Bloomberg: The economic and financial situation and external environment should be fully considered when adjusting monetary policy, and tweaks to that should be well controlled, according to a statement posted on the State Council’s website Monday. The statement summarized a meeting of the Financial Stability Development Committee led by Vice-Premier Liu He, held Friday. Officials discussed key future works at the meeting, and called for efforts to defuse financial risks and prevent black swan events, while maintaining the stable and healthy development of the stock, bond and foreign exchange markets.国务院金融稳定发展委员会召开第三次会议_国务院副总理刘鹤_中国政府网

Net Outflows of P2P Lending Platforms Drop as Heightened Regulation Contains Panic - China Banking News The situation shifted towards the end of August, however, with the week of 19 – 25 August seeing a decline in net outflows of 3.5 billion yuan compared to the preceding period, and the week of 26 August to 1 September a further decline of 1 billion yuan. According to the “P2P Online Lending Sector August 2018 Report” (P2P网贷行业2018年8月月报) from Wangdai Zhijia (网贷之家), as of the end of August there were a total of 58 P2P platforms with “problems,” for a decline of 185% compared to July.

Food Prices Drive Consumer Inflation to Six-Month High - Caixin GlobalFood prices rose 2.4% month-on-month in August, contributing 0.46 percentage points to monthly CPI growth. Vegetable and pork prices both rose faster on a monthly basis in August than July, as hot and rainy weather, plus an outbreak of swine fever, led to tight supplies, according to the NBS.

China Sees Hints of a Past Threat: Inflation - The New York Times For now, Chinese economists generally say there is little cause for alarm. “Disasters like the swine flu and disasters like the flood are not a very big impact on China as a whole, and are not a turning point,” said Li Xuesong, the deputy director of the National Academy of Economic Strategy in Beijing. Inflation has nevertheless become a popular topic among economists and investors after a decade of being virtually a nonissue.

China Reserves Steady as Yuan Declines Fail to Trigger Outflows - Bloomberg Reserves declined by $8.2 billion to $3.110 trillion in August, the People’s Bank of China said Friday. That compares with $3.118 trillion the previous month and the median forecast of $3.115 trillion in a Bloomberg survey of economists.

Global Trade Woes Force Volvo IPO Delay, Re-Jig Plant Plans - BloombergVolvo Cars has become the latest victim of intensifying global trade tensions, prompting the automaker to delay plans for a share sale and make sweeping changes to its production network to lighten the burden of higher export barriers.

China Gives High Priority to Property Tax That May Rock Market - Bloomberg The Standing Committee of the National People’s Congress listed the tax as one of 69 levies to have top priority in a five-year agenda, the Communist Party’s mouthpiece People’s Daily reported Saturday. Enacting the real estate tax is “crucial,” a committee official reportedly said.

 

Politics, Law And Ideology

Weekly Report 1|45 8.31.2018-9.7.2018 | Center for Advanced China Research PD Commentator Series on Learning and Implementing the Spirit of Xi Jinping’s Important Speech at the Propaganda and Ideology Work Conference People’s Daily   9.1-9.5  Continuing last week’s series, the People’s Daily published its fifth commentator article on Xi’s speech at the propaganda and ideology work conference. The article pointed out that “influential works widely recognized by the people are still not enough, and the supply of literature and art products to grassroots level and rural areas remain insufficient even with a considerable increase in our country’s literature and art production.” Additionally, it emphasized that “literary and art workers should establish correct views on history, nation, country, and culture.”...The sixth article stressed the importance of external dissemination work, saying that “the power of dissemination determines [one’s] influence and the power of discourse decides [who has the] initiative.”

Tencent, Ant Financial Bury the Hatchet to Help Build Xiongan New Area | Yicai Global Together with other partners, Ant Financial Services Group and a subsidiary of Tencent will jointly establish a non-profit institute for research and cooperation on local city development, regional internet operator Beijing Forever Technology, one of the participating companies, said in a statement.

Round-the-clock cyber court opens in Beijing - Global Times An internet-based court that runs 24/7 was set up in Beijing on Sunday where internet-related cases in the city will be tried online in the future. Now, like convenience stores, courts will stay open perpetually and plaintiffs can file cases anytime.

 

Foreign and Military Affairs

Military issues document on strengthening Party building - Xinhua The document noted that the leadership of the Communist Party of China (CPC) and Party building are crucial to the building and development of the military, saying that work in these regards must be comprehensively intensified. The decision stressed that the absolute Party leadership over the armed forces must be reinforced and the system of the chairman of the CMC assuming full responsibility for military affairs should be fully enforced. The document called for efforts to eliminate the pernicious influence of former CMC vice chairmen Guo Boxiong and Xu Caihou. 中央军委印发《关于加强新时代军队党的建设的决定》 

Botswana says China agreed to extend loan and cancel debt - ReutersRipping us supply chains out of china and rebuilding them in the us is the goal of trump and some his officials

Americans Return to Guadalcanal, This Time to Face Beijing - WSJ Ripping us supply chains out of china and rebuilding them in the us is the goal of trump and some his officials

Chinese Embassies are Becoming Increasingly Assertive: the Case of Sweden – Taiwan Sentinel The new Chinese ambassador to Sweden is much more active than his predecessor. Through disinformation campaigns and attacks on Swedish media, the Chinese envoy has attempted to change the narrative on issues ranging from Gui Minhai to Taiwan. This pattern has also been observed in other countries.

The West once again gets it wrong on China: article - Xinhua Saturday's China Daily published an article titled "The West once again gets it wrong on China," which is an excerpt from a signed article published on Qiushi magazine.

How a potential Chinese-built airport in Greenland could be risky for a vital US Air Force base - DefenseOne when the local government issued a solicitation to build three new airports, the move made sense from a business perspective. The project would be expensive, but would improve commerce and make life on the island easier for its residents. Then a Chinese company — owned by the government in Beijing, and once blacklisted by the World Bank — put forth a bid, and a simple request for proposals transformed into a project with international diplomatic ramifications. Denmark, which has final say on national security issues involving Greenland, objected. The government in Greenland then insisted China Communications Construction Company (CCCC), which has succesfully worked on large infrastructure projects around the world, would remain one of its finalists for the projects, setting up intense negotiations between two governments.

'Palau against China!': the tiny island standing up to a giant | The GuardianArchipelago is refusing to switch diplomatic allegiance from Taiwan to China, despite a huge downturn in its tourism industry

U.S. Chiefs of Mission to the Dominican Republic, El Salvador, and Panama Called Back for Consultations The Department of State has called back the U.S. Ambassador to the Dominican Republic Robin Bernstein, the U.S. Ambassador to El Salvador Jean Manes, and the U.S. Charge d’Affaires in Panama Roxanne Cabral for consultations related to recent decisions to no longer recognize Taiwan. Our three Chiefs of Mission will meet with U.S. Government leaders to discuss ways in which the United States can support strong, independent, democratic institutions and economies throughout Central America and the Caribbean.

Forum on China-Africa Cooperation Beijing Action Plan (2019-2021)

Nepal says China to allow access to ports, ending Indian monopoly on transit | Reuters hina will allow Nepal the use of four of its ports, the Nepalese government said on Friday, as the landlocked Himalayan nation seeks to end India’s monopoly over its trading routes by increasing connections with Beijing.

China Poised to Win Major Victory in Sea Dispute With Help of Philippine Resources Deal - WSJ $$ It would open the door for China to push for similar arrangements with other Southeast Asian nations that have challenged its expansive claims and potentially lock Western oil companies out of the resource-rich region. Mr. Duterte’s opponents and legal experts say joint development—which Beijing has long advocated—legitimizes China’s assertion that it has historic rights over almost the entire South China Sea, undermining a 2016 international tribunal ruling that invalidated those claims. It would also fortify Beijing’s control over the strategic waters, where tensions between the U.S. and China have surged.

China gets closer to its dream of a blue-water navy with rapid expansion of African base A key element of China’s geostrategic investment in Africa is its military base in Djibouti, the country in the Horn of Africa. This is China’s only overseas base in Africa and its details were first reported by ThePrint last year. New satellite imagery analysed by ThePrint shows that this base is expanding at a rapid pace, taking China closer to its dream of a blue-water navy.

Japan PM Abe in Vladivostok for bilateral talks with Putin, Xi - The MainichiDuring his four-day stay in the Russian Far East port city, Abe is also scheduled to meet with other leaders, including Chinese President Xi Jinping, the government said.

AG600 home-grown aircraft: Beijing ups the stakes in South China Sea with successful trials | South China Morning Post While its main role is to support maritime search-and-rescue missions, military observers said the new AG600 could also be used to transport troops or even conduct surveillance in the disputed waters. All of those options remain open after China Aviation News reported this week that the aircraft had carried out its first water taxiing trials on a reservoir in central China’s Hubei province.

Senior Chinese military leaders meet with Iranian defense minister - China Military General Zhang Youxia, vice chairman of China’s Central Military Commission (CMC), met with Amir Hatami, defense minister of Iran, in Beijing on the afternoon of Sept. 7. General Wei Fenghe, China’s state councilor and defense minister, held talks with Amir Hatami in Beijing on the same day. Zhang Youxia said that the friendship between China and Iran has stood the test of the complex international situation and the two countries have formed a deep feeling of sharing weal and woe

 

Hong Kong, Macao

Calls for independence leave Hong Kong’s leader fighting fires behind the scenes as Beijing’s patience wears thin | South China Morning Post Chief Executive Carrie Lam Cheng Yuet-ngor’s emotional condemnation of student leaders who called for Hong Kong independence last week was more than the exasperated remarks of a leader growing weary of the debate Rather, in dismissing separatist ideas as “absurd”, she could be seen as taking pre-emptive steps to ease any pressure from Beijing for the early introduction of national security legislation in Hong Kong.

 

Taiwan

Taiwanese protest outside de facto embassy after Japanese kicks ‘comfort woman’ statue | South China Morning Post Around 100 human rights activists protested outside Japan’s de facto embassy in Taipei on Monday demanding that a member of a Japanese right-wing group be barred from leaving Taiwan after he was caught on security camera kicking a “comfort woman” memorial.

 

Tech And Media

China’s gaming boom hit by freeze in licensing as propaganda body takes charge | South China Morning Post Approvals of licences for new games have been suspended since the end of March, and a government source has told the South China Morning Post it may take a further four to six months to finalise the new licensing system... “The publication bureau of the [party] Central Propaganda Department is the body licensing games in China,” said the source, who declined to be named. “Its government face, the State Administration of Press and Publication, will deal with external parties.”.. Were the suspension to last for a further four to six months – as the Post’s source predicts – the outlook for such businesses “would be more pessimistic than we thought before”, said Xiao, who had previously expected Beijing to resume approving games within two to three months. //Comment: I too thought the freeze would end by late Q3/Q4...we'll see...

Tencent Folds’Em, Shutting Another Videogame as Beijing Cracks Down - WSJ $$ The Shenzhen-based tech giant said Monday it had started to phase out “Everyday Texas Hold’Em,” a gambling game based on the poker card game, and would shut down the game server Sept. 25. Players will be compensated according to Ministry of Culture and Tourism guidelines, the company said on its official WeChat account.

The 5G Race: China and U.S. Battle to Control World’s Fastest Wireless Internet - WSJ $$ China’s bid to steer the 5G future depends heavily on setting technical standards the rest of the world will have to follow—and pay royalties and licensing fees to use. It has played an aggressive role in the international telecom industry collective that sets global standards. Experts inside and outside China expect Qualcomm and other Western firms to end up with a majority of the essential patents once the standards are fully determined, but China is making progress.

Baidu in Hot Water After Hospital Mix-Up - Caixin Global Baidu issued an apology on Sunday after it was revealed that searches for public hospitals affiliated with Shanghai’s prestigious Fudan University returned results for a private hospital instead. An expose by the state-owned broadcaster CCTV showed that several people went to the more expensive and less competent "Shanghai Fuda Hospital" instead of those affiliated with Fudan (link in Chinese).

Podcast: ‘I was rejected 167 times’ | Financial Times Is a Communist Party cell a new must-have for Chinese start-ups? Emily Feng, the FT’s Beijing correspondent, says she’s seen it becoming more common over the past five years for even private companies to have a party cell within the business, a sign of the Communist party’s growing influence over all aspects of life in China.

Capital bans stars with record of drug use, gambling, prostitution - Global Times Chinese stars who have been involved in drug abuse, gambling or visiting prostitutes will be banned from showing in any public performances, the Beijing Trade Association for Performances said on Sunday.  The association, consisting of China Oriental Performing Arts Group, Beijing's Jingju Theater, Beijing Performing Arts Group and Beijing Dance Drama and Opera, signed a joint letter on Saturday, which promises that they will neither hire nor organize stars who haven been involved in drugs, gambling and prostitution to participate in performances.

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Society, Art, Sports, Culture And History

‘Human impulses run riot’: China’s shocking pace of change | The GuardianThirty years ago, politics was paramount. Now, only money counts. China’s leading novelist examines a nation that has transformed in a single lifetime. By Yu Hua

Beauty Blogger Saya Accused of Attacking Pregnant Woman after Argument over Unleashed Dog | What's on Weibo A violent incident that happened in Hangzhou last week has attracted nationwide attention in China, after news came out that Weibo celebrity and fashion blogger Saya had attacked a pregnant woman due to an argument over her unleashed dog.

China's expected surge in pet spending draws disbelief, criticism | ReutersMillennials account for three-quarters of pet consumers in China, with more than half of them possessing a bachelor’s degree or above while 87.5 percent of them are women, according to the white paper. “Our company has seen sales in China’s market grow by about 30 percent every year due to a swelling number of pet owners in the country,” said Michael Dong, a sales manager at a Beijing-based pet food company.  //  Comment: The first big wave of pets are now aging, expect a bump in spending around geriatric pet services...

Admirers remember Mao’s death - Global Times The Chairman Mao Memorial Hall, located on the south end of Tiananmen Square, extended its viewing hours on Sunday to accommodate visitors coming to commemorate the death of late Chinese leader Mao Zedong. Usually open only in the morning, the memorial hall remained open in the afternoon on Sunday to visitors from all over China who came to commemorate the 42nd anniversary of Mao's death on Sunday.

 

Energy, Environment, Science And Health

State Council adjusts leadership of technology reform group - Gov.cn The leading group for the reform on scientific and technological system is to be reshuffled, according to a circular released by the State Council on Sept 7. Vice-Premier Liu He will become the group leader. Minister of Science and Technology Wang Zhigang, Deputy Secretary-General of the State Council Lu Junhua, Deputy Director of the National Development and Reform Commission Lin Nianxiu and Vice Finance Minister Yu Weiping will become deputy heads.

 

Agriculture And Rural Issues

China Clamps Down on Public Discussion of African Swine Flu Outbreaks - RFA Ren Ruihong, former head of the medical assistance department at the Chinese Red Cross, said Chinese officials regard information about disease outbreaks and epidemics as a state secret. "There is a total blackout on this right now; they are just not reporting it," Ren told RFA. "They are now detaining people for talking about this; you can't even talk about it on WeChat." "People have been detained for talking about it on WeChat," Ren said.

 

Education

Xi stresses following path of socialist education with Chinese characteristics - Xinhua Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, said young people should have an all-round moral, intellectual, physical, and aesthetical grounding with a hard-working spirit. Xi made the statement at a national education conference Monday, which marks the 34th Teachers' Day in China. He extended congratulations and greetings to teachers and other education workers nationwide on behalf of the CPC Central Committee. 习近平:坚持中国特色社会主义教育发展道路 培养德智体美劳全面发展的社会主义建设者和接班人 

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