Bill Bishop: MSS goes with "People's Leader 人民领袖"; Dual circulation; US South China Sanctions; Missile tests; TikTok
The 5th Plenum is just about two months away, and the period before a Plenum tends to be fertile rumor season. The Financial Times published an interesting article speculating on whether or not Xi would add another title, perhaps the “Party Chairman 党主席” that Mao once held - Xi Jinping sets stage to resurrect ‘chairman’ title created by Mao:
I wonder if he needs Party Chairman given that there are already no term limits for General Secretary of the Party or Chairman of the Central Military Commission. I also wonder if enshrining Xi as "People's Leader" might have a similar effect.
The big news across the propaganda apparatus is a ceremony Wednesday in which Xi conferred the police flag to Minister of Public Security Zhao Kezhi and Minister of State Security Chen Wenqing. In the Xinhua readout of the Ministry of State Security Party Committee meeting after the ceremony the MSS Party Committee refers to Xi as “People's Leader 人民领袖”, with no qualifiers.
PLA statements often refer to Xi as the People's Leader, now the MSS is doing it. If the sources of hard power are going with this title can the rest of the system be far behind?
Long-time readers know I have a bit of an obsession with Xi and the title “People's Leader 人民领袖”, as over the last couple of years he has several times seemed to be on the cusp of getting it and then it kind of faded away. This is what I wrote in the January 6, 2020 Newsletter:
Perhaps Xi will add a new title like “Party Chairman” or “People’s Leader”, and from all indications he wants “People’s Leader”, but does he really need one or both to cement power?
It is worth remembering the brilliance of Xi's move to get "Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era 习近平新时代中国特色社会主义思想" enshrined in the Constitution at the 2017 19th Party Congress.. So long as he is alive he will be above all other politicians, and it will be very hard to repudiate "Xi Jinping Thought" without a broader repudiation of the CCP.
Note I used the term "Xi Jinping Thought". Any official shortening of the longer term to "习近平新思想 Xi Jinping Thought" would also be a very powerful move by Xi. As I wrote above we are now entering into prime rumor season, so I expect there to be increasing speculation about the Fifth Plenum scheduled for October. My guess is that whatever moves we see around personnel moves and/or titles, they will not be related to Xi being weakened or under pressure.
Let the speculation begin!
Today’s Essential Eight:
Thanks for reading.
The Essential Eight
1. Xi confers police flag
10 minute CCTV Evening News top story on the flag conferring ceremony - [视频]习近平向中国人民警察队伍授旗并致训词强调 对党忠诚服务人民执法公正纪律严明 坚决完成党和人民赋予的使命任务_CCTV
2. A useful explainer of dual circulation
This is an interesting Twitter thread on Xi's Monday symposium:
优述/You Shu @You_Shu_ChinaOthers have commented smartly on the Monday “economic and social issues” symposium (经济社会领域专家座谈会上的讲话)which Xi Jinping chaired on the 24th.
August 26th 20209 Retweets19 Likes
3. Nice aircraft carriers you have, shame if they hit one of our missiles
Comment: They did it knowing the US would be watching and hoovering up all available data and intel from the tests, and so I think we may know what the U-2 spy plane was collecting data on.
4. US sanctions over South China Sea activities
Briefing With Senior State Department and Commerce Officials On State Department Visa Restrictions Placed on Individuals from the People’s Republic of China and Commerce Department Restrictions Placed on Chinese Corporate Entities - United States Department of State
The Chinese version of the CCCC site - 中国交建首页
5. More US-China
As I wrote yesterday the trade deal may be the last substantive thread of the US-China relationship, and that at least part of their recent restraint and willingness to ignore all the other problems in the relationship as they understand that without the trade deal things might really go off the rails between now and the November US election.
The US Republican National Convention is going about as expected when it comes to rhetoric about China:
Donald J. Trump @realDonaldTrumpJust In: Chinese State Media and Leaders of CHINA want Biden to win “the U.S. Election”. If this happened (which it won’t), China would own our Country, and our Record Setting Stock Markets would literally CRASH!
August 26th 202032,773 Retweets124,171 Likes
6. Wang Yi in Europe
Minister Wang Xining's address - China and Australia: Where to from here? - PRC Embassy in Australia
Comment: It is a good thing that TikTok can sue the US government and get its day in court. Imagine where we might be if TikTok's parent Bytedance operated under a system where it too could sue the government when it shut down one of its services, as the PRC government did to Bytedance's popular app Neihan Duanzhi 内涵段子 in 2018.
Business, Economy and Trade
China Will Maintain ‘Normal’ Monetary Policy, PBOC Official Says - Caixin China’s central bank said it will maintain a “normal,” “steady” and “flexible” monetary policy in response to increasing economic uncertainties amid the Covid-19 pandemic. “To cope with all sorts of uncertainties, monetary policy requires greater certainty,” Sun Guofeng, head of the monetary policy department at the People’s Bank of China, said Tuesday at a press conference. At the same time, the central banker projected lower interest rates for businesses. China has not adopted zero or negative interest rates or other unusual policies such as quantitative easing, so there will be no so-called exiting problem, Sun said.
China issues directive on improving social assistance system - XinhuaThe general offices of the Communist Party of China Central Committee and the State Council have recently released a directive on reforming and improving the country's social assistance system. The document aims to build a tiered and classified social assistance system with Chinese characteristics for both urban and rural areas in about two years. It stresses promoting basic living assistance, calling for improving the subsistence allowances system as well as the mechanisms for adjusting basic living assistance standards. Social assistance for special purposes, such as healthcare, education, housing, and employment, are underscored in the document. // 中共中央办公厅 国务院办公厅印发《关于改革完善社会救助制度的意见》_
Banks Let Loose With Loans to Manufacturers Amid China’s Self-Sufficiency - Caixin Drive Over the first seven months of this year, the financial institutions issued 1.6 trillion yuan ($232 billion) in new manufacturing loans, Xiao Yuanqi, chief risk officer of the China Banking and Insurance Regulatory Commission (CBIRC), said at a Tuesday briefing. The figure dwarves the 780 billion yuan they lent out in all of 2019. The surge in lending shows how far policymakers have been willing to go to make credit cheaper and easier to obtain for manufacturers whose businesses were ravaged by the coronavirus pandemic. The goal is two-fold: to prevent widespread bankruptcies and worker layoffs while bolstering the manufacturing industry to make China less dependent on foreign suppliers of high-tech gear, multiple analysts said.
China will release funds to local governments more quickly to boost economy - Reuters China will speed up the release of special funds to local governments to support the economy, vice finance minister Xu Hongcai told reporters on Wednesday. The government has said it would set up special transfer payments of 2 trillion yuan ($289.72 billion) from special treasury bonds and an increased budget deficit to local governments.
Chinese premier stresses flood control, post-disaster recovery - Xinhua Li made the remarks while presiding over an executive meeting of the State Council. A total of 100 billion yuan (about 14.48 billion U.S. dollars) will be allocated from central and local budgets for post-disaster recovery and reconstruction, while a mechanism will be established to ensure the funds go straight to the disaster-stricken areas, according to the meeting
China says no need for panic buying of food and oil - Reuters China’s food supplies remain stable and consumers should not be “overly anxious” or even resort to “panic buying”, a senior agriculture ministry official said on Wednesday, following recent uncertainty caused by the coronavirus pandemic. Still, farmers and traders should prevent food waste caused by improper storage, while farmers who stockpile in the hope of later gains should be wary that prices could turn against them, ministry official Tang Ke told a briefing.
Fueled by Big Non-Alipay Growth, Ant Files for Landmark Dual IPO- PingWest In the 12 months that ended in June, Ant Group handled 118 trillion yuan ($17 trillion) worth of transactions in mainland China, and international transactions totaling 622 billion yuan ($89.97 billion).
Ant Group IPO filings: five key takeaways · TechNode The prospectus warns of tightening regulations in key business segments for Ant Group, both globally and in China: payments, investment, insurance, and credit, among others. It makes special reference to China’s tightening anti-monopoly laws: Authorities have in recent years “strengthened enforcement,” it said.
Exclusive: Alibaba puts India investment plan on hold amid China tensions, sources say - Reuters China’s Alibaba Group has put on hold plans to invest in Indian companies, two sources aware of the plans told Reuters, amid souring business relations and rising political tension between the two nations after a clash on their Himalayan border.
Administrator for China's PUFG rejects keepwell deed for $300 mln bond -Redd| Reuters Troubled Peking University Founder Group Corp's (PUFG) administrator is not recognising the keepwell deed the Chinese conglomerate provided for a $300 million dollar bond issued by Nuoxi Capital, financial intelligence provider Redd reported. Keepwell deeds are used by some Chinese companies to facilitate offshore bond sales by their subsidiaries. The deeds are similar, according to lawyers, to "letters of support" where the issuer would be backed by an onshore company, but they stopped short of guaranteeing the debt. Some $96 billion of Chinese bonds still carry keepwell provisions, estimates ratings agency Fitch.
Oil Refiner Charged With Hoodwinking Other Companies out of Billions - Caixin The alleged fraud sheds light on risks accumulating in an obscure and under-regulated corner of China’s financial sector — the finance units of state-owned and private enterprises...Baota Petrochemical Group Co. Ltd. and its finance subsidiary, however, fabricated nonexistent trade deals to obtain acceptance bills from banks, according to a statement (link in Chinese) released Monday by the Yinchuan Intermediate People’s Court in the Ningxia Hui autonomous region. Between April 2016 and October 2018, the finance subsidiary signed bills worth 28.5 billion yuan ($4.1 billion) based on nonexistent deals, the court said.
China’s Rare Earth Exports Fall to Over Five-Year Low as Pandemic Devastates Demand - Caixin In the first seven months of this year, China’s rare earth exports were down 20.2% year-on-year, compared to a much milder 7.6% decline in the same period last year, customs data showed.
Yicai - SF Holdings’ Shares Hit Record High After First-Half Profit Beat Expectations The growth in the number of business parcels has also rebounded as various sectors resume work, while demand for face masks and other pandemic gear still exists. Also, a high-end consumer online trend began to appear as the pandemic accelerated the penetration of e-commerce, and SF’s business volume from high-end e-commerce customers requiring instant delivery increased significantly.
跨境赌博旅游目的地黑名单制度建立-新华网 China’s ministry of culture and tourism said it will set up a blacklist of foreign cities that set up casinos to attract Chinese tourists, and it will impose limits on Chinese tourists traveling to these cities.
China’s Biggest Banks Face $940 Billion Capital Shortage by 2024 - Bloomberg Industrial and Commercial Bank of China Ltd., Bank of China Ltd., China Construction Bank Corp. and Agricultural Bank of China Ltd., all considered globally-systematically important banks, last year had a total shortage of 2.25 trillion yuan ($323 billion) to comply with the total-loss absorbing capacity, S&P said in a report on Wednesday. The may grow to as much as 6.51 trillion yuan by 2024 as the pandemic erodes their earnings capacity, the ratings firm said.
Elon Musk's SpaceX NASA contracts threatened over Tesla China ties Congressional negotiators are considering whether NASA contracts awarded to Elon Musk's SpaceX represent a potential national security risk due to Chinese financial support for the billionaire owner's electric car company, Tesla. “What is there to stop them from going to Musk directly and saying, 'We'll call your line of credit early, unless you give us X, Y, or Z?'” said a congressional Republican aide involved in negotiations over the comprehensive legislation governing the space agency. “And, there's no real clarity that there's any kind of mechanism that would stop that other than good behavior by an individual.”
Source Code: A peek inside Palantir it makes a bold statement on China: "Our leadership believes that working with the Chinese communist party is inconsistent with our culture and mission," the company said, knowing that could hurt its growth potential.
Politics and Law
Senior CPC official calls for promoting voluntary service - Xinhua Huang Kunming, a member of the Political Bureau of the CPC Central Committee and head of the Publicity Department of the CPC Central Committee, made the remarks while attending a teleconference on voluntary service. Huang said a vast number of volunteers and voluntary organizations have responded promptly to the Party's call and made important contributions to epidemic prevention and control. Huang encouraged voluntary service in publicizing the Party's new theories and policies to the public. He also underscored improvements to voluntary service in emergencies with enhanced expertise and capabilities to advance social governance modernization
政协十三届常委会第十三次会议开幕--时政--人民网 The 13th meeting of the Standing Committee of the 13th National Committee of the Chinese People's Political Consultative Conference opened in Beijing on the morning of the 25th, and discussed the "Fourteenth Five-Year Plan for National Economic and Social Development". Wang Yang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and chairman of the CPPCC National Committee, attended the opening meeting.
哈佛物理学博士后担任深圳某街道办副主任 A report that Chinese young people are eager to join the government. A deputy head of a neighborhood office in Shenzhen turns out to have a doctoral degree in Physics from Harvard. This comes after report that neighborhood grid offices in Hangzhou are hiring many MA and Phds from Tsinghua and Peking University.
蔡霞：中国的政治未来，美国因素不可小觑 - 纽约时报中文网 Full-text of Chris Buckley’s interview with Cai Xia, the former central party school professor who was sacked for criticizing Xi Jinping.
Yicai - Chinese Police Catch Hackers Selling Huge Amounts of Personal Data Police in China’s northern Shanxi province have tracked down a group of criminals that were harvesting personal information from e-commerce sites and selling it in China and abroad through the ‘dark web,’ Xinhua News Agency reported today. The Lvliang cyber police department was performing an online patrol in May when they discovered that some of the city's residents were selling a huge amount of personal information gathered from e-commerce purchase orders
Thomas Heberer - Disciplining of a Society: Social Disciplining and Civilizing Processes in Contemporary China | Ash Center We argue that the function of the current Chinese state as a disciplining and civilizing entity is the connecting link tying policies such as the state’s morality policies, its anti-corruption drive or the so-called “social credit system” together under a specific governance logic: to discipline and civilize society in order to prepare the people to become modernized. In fact, modernization and modernity encompass not only a process of economic and political-administrative modernizing but concurrently one related to the organization of society in general and the disciplining of this society and its individuals to create people with “modernized” minds in particular.
Foreign and Defense Affairs
Xi Focus: Xi, Putin exchange congratulations at start of China-Russia sci-tech innovation year - Xinhua Chinese President Xi Jinping and Russian President Vladimir Putin exchanged congratulatory letters on Wednesday marking the start of the Year of Scientific and Technological Innovation between the two countries. "As each country is the other's largest neighbor, China and Russia have been working together and helping one another as the COVID-19 pandemic rages across the globe," Xi said in his letter, stressing that launching the Year of Scientific and Technological Innovation between the two countries as scheduled has "fully reflected the high level and exceptionality of their comprehensive strategic partnership of coordination for a new era."
Locsin rejects proposal to post Coast Guard attaché in Beijing - Manila Bulletin Foreign Affairs Secretary Teodoro Locsin Jr. has strongly rejected the proposal to post a Philippine Coast Guard (PCG) attaché in Beijing, citing its implication to the country’s exclusive sovereignty over its coastal waters off the West Philippines Sea.
South China Sea: ‘If China attacks our navy, we’ll call the US’, Philippines says | South China Morning Post In a first under the Duterte administration, Manila says it is prepared to invoke its Mutual Defence Treaty with the US in face of Chinese aggression Foreign Secretary Teodoro Locsin Jnr also vows to continue air patrols over the South China Sea that Beijing has denounced as ‘illegal provocations’
Vietnam Asks China to Cancel Paracel Islands’ Military Drills - Bloomberg Vietnam asked China to cancel its Paracel Islands’ military drills because they violate Vietnam’s sovereignty, according to a statement on the government’s website, citing Vietnamese foreign ministry spokesperson Le Thi Thu Hang.
东海将进行实际使用武器训练 这些区域禁止驶入_凤凰网 The Zhejiang Maritime Administration said the PLA will conduct a four-day live-fire drill in East China Sea beginning tomorrow.
Canadians in Hong Kong at risk of arrest by ‘secret police', MPs told - The Globe and Mail Members of Parliament were warned on Thursday that sweeping national security legislation in Hong Kong jeopardizes 300,000 Canadians who live in the former British colony, and to prepare for the possibility that China might prevent some from leaving. A new cadre of “secret police” empowered by the June 30 law can arrest Canadians living in Hong Kong, witnesses told MPs on the House of Commons Special Committee on Canada-China Relations.
Canada’s China critic takes helm of opposition party as Trudeau seeks new mandate | South China Morning Post Erin O’Toole’s successful campaign promised a tough approach to Beijing, with return of detained Canadians a priority Attitudes to China are shaping political debate but there are fears of a rising anti-Asian tone
China has been and will continue to be an important development partner, says Maldives Foreign Minister Abdulla Shahid’s comments come amid a reset in New Delhi-Male ties under President Solih, after years of frost during tenure of China-leaning Abdulla Yameen.
Czech Senate speaker's Taiwan visit trades ties with mainland for short-term gains: experts - Global Times However, due to the country's internal divisions, some Chinese analysts said China could retaliate against politicians who provoke China's sovereignty, and avoid harming Czech companies in China if they do nothing wrong. Also, the visit could potentially further sour the country's relations with China. Yang Lixian, a research fellow at the Beijing-based Research Center of Cross-Straits Relations, told the Global Times on Wednesday that the Czech Republic would "lose much more than they gain" if they choose the DPP authorities of Taiwan over the Chinese mainland. "Considering the mainland's economic strength and contributions to the international community, it is clear that the Czech Republic should not turn its back on the Chinese mainland."
Homegrown Y-20 jet completes heavy aerial delivery on plateau - Chinadaily.com.cn China's domestically developed Y-20 transport aircraft reached another milestone after successfully completing its first heavy weight aerial delivery on the plateau recently, CCTV reported. A heavy aerial delivery is a major criterion for assessing the capability to conduct airborne operations. Y-20's success means China's airborne troops have possessed strong mobility and are capable of launching a large-scale assault with heavy weapons on the plateau. // Comment: video embedded the article, believe by "plateau" they mean Tibetan Plateau
Chinese Journal Review: Does Racism in the U.S. Help Xi? - Chinese Journal Review The researchers found that when Chinese students read racist, anti-China commentary on online U.S. platforms, this increased the likelihood that those students would support autocracy back home. The results were especially pronounced among students who were initially predisposed not to support autocracy: this group had the biggest swing in favor of autocracy of all groups surveyed...Based on this research, you have to wonder how many of these students will return to China with a more negative view of the United States than before, as well as how much this benefits Xi as he attempts to consolidate power.
Hong Kong and Macao
Hong Kong protests: anger mounts as police are accused of trying to rewrite white-shirt mob attacks in Yuen Long with arrest of opposition lawmaker | South China Morning Post Anger over the infamous Yuen Long attacks of July 21 last year by a white-shirted mob reignited anew on Wednesday after Hong Kong police arrested 16 people – including opposition lawmaker Lam Cheuk-ting, whom the force accused of rioting and stoking the violence. After an early morning swoop across Hong Kong to pick up Lam and fellow Democratic Party lawmaker Ted Hui Chi-fung, police held a press conference to offer another version of the night’s drama that proved to be a tipping point for the protest movement as the force became the target of widespread wrath for being slow to act.
《苹果日报》之毒，更甚于新冠病毒 Article on People's Daily App attacks "Apple Daily" - There are two viruses in Hong Kong today. One is the Coronavirus, and the other is a "political virus" spread through carriers such as Apple Daily. The former harms the body, the latter poisons the mind. Hong Kong must get out of the quagmire and set off again, and must defeat both of these viruses at the same time.
Tech and Media
China to import $300 billion of chips for third straight year: industry group - Reuters China is likely to import at least $300 billion worth of semiconductors for the third year running, an industry association official said, in a sign of continuing reliance on foreign know-how despite efforts to gain local capability.
Huawei says Japan 'extremely important' after 50% rise in procurement - Nikkei Asian Review Huawei Technologies revealed Wednesday that procurement from Japanese suppliers grew by more than 50% last year while the U.S. tightened trade restrictions on the Chinese telecom equipment maker. During an online information session, Jeff Wang, chairman of the Tokyo-based subsidiary Huawei Japan, credited the gain to Japan's "extremely important role in global supply chains."
Yicai - Alibaba Takes 70% Stake in AI Software Developer Xiaoman Xiaoman's main product is the OKKI customer relationship management software for foreign trade which manages the whole trading process from front-end buying to sales. It uses AI technology to accurately match companies with potential customers.
Yicai - ByteDance Plans USD1.4 Billion Center for Emerging Businesses in Chengdu The new center will focus on emerging businesses such as smart learning and multimedia, Beijing-based ByteDance said in a press release today. It is expected to employ 10,000 people and notch up CNY10 billion (USD1.5 billion) in annual sales in five years.
BlackBerry makes China push as the OS for Xpeng smart cars | TechCrunch The once-pioneering BlackBerry is pretty much out of the smartphone manufacturing game, but the Canadian company has been busy transitioning to providing software for connected devices, including smart cars. Now it’s brought that section of its business to China. This week, BlackBerry announced that it will be powering the Level 3 driving domain controller of Xpeng, one of the most-funded electric vehicle startups in China and Tesla’s local challenger
Energy, Environment, Science and Health
Urumqi starts new round of nucleic acid tests in key areas before adjusting prevention measures - Global Times Starting from Sunday, Urumqi has allowed residents in some communities where there are no COVID-19 patients to venture downstairs for fresh air. But the easing restrictions have been carried out in a very cautious way – a pass is required before a resident can go outside, volunteers were also stationed within the community in the case of crowds gathering or people not wearing masks, with daily outing durations limited to one or two hours. This round of new tests may not lead to a total lift of lockdowns, Zhang said, explaining that scientifically speaking, Urumqi could consider to lift its lockdown after no new infections were found in two incubation periods – that is 28 days. As of Wednesday, the city reported zero cases for 10 consecutive days.
Beijing All Clear of Covid-19 After Last Cases Leave Hospital - Caixin Beijing municipal health commission said in a statement Wednesday that the city is officially clear of all confirmed Covid-19 cases after the last two patients, connected with the latest outbreak, were discharged from the hospital Tuesday...Beijing also reported zero suspected, asymptomatic or imported cases on Wednesday
CanSino blames Chinese officials for abandonment of joint vaccine program with Canada - The Globe and Mail Some divisions of the Chinese government were not clear on whether the vaccine should “go to global trials or how to handle it,” said Dr. Xuefeng Yu, the chairman and CEO of CanSino Biologics, which in May agreed to bring its Ad5-nCoV vaccine candidate to Canada for testing through a partnership with the National Research Council (NRC).
China seeks to increase supply of traditional Chinese medicine services - People's Daily Online China has been dedicated to increasing the supply of traditional Chinese medicine (TCM) services. By Aug. 2, 2020, the number of registered traditional TCM clinics has reached 18,785, a huge rise from 195 in 2017 and 8,376 in 2018.
CNA: Peking University Tightens Permission to Attend Overseas Online Conferences – Chinascope Primary Taiwanese news agency CNA (The Central News Agency) recently reported that China’s top university, Peking University, just announced new rules for attending online conferences held overseas. The new rules apply to all branches of the University. The leaders of all branches are required to review the applications from the faculty or from students strictly in order to tighten up attendance at conferences that organizations outside of China may host. The rules emphasized that “confidentiality requirements” must be “strictly” followed. No individual can personally decide on attending such events. Instead, each person must follow the exact same review and approval process the University had in place before for attending overseas events in person