Rare earths: Don’t say I didn’t warn you; Overall leverage ratio rising; HK judges worried
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Beijing’s threats to limit rare earths-related exports to the US intensified overnight with a commentary in the People’s Daily that used the historically loaded term “don’t say I didn’t warn you. 勿谓言之不预也 (wu4 wei4 yan2 zhi1 bu4 yu4 ye3)”.
Threatening to cut off rare earth supplies makes those in DC worried about China believe that they are even more correct. I would love to be in the room when President Trump is briefed on the latest rare earths threat. Who knows, maybe we will get a tweet on it.
There is no walking back this threat, and even if not implemented the damage is done, just as it has already been done by the US in the technology arena with ZTE and now Huawei.
Thanks for reading.
1. Rare earths threats intensify
China Gears Up to Weaponize Rare Earths Dominance in Trade War - Bloomberg
The U.S. shouldn’t underestimate China’s ability to fight the trade war, the People’s Daily said in an editorial Wednesday that used some historically significant language on the weight of China’s intent.
The newspaper’s commentary included a rare Chinese phrase that means “don’t say I didn’t warn you.” [勿谓言之不预也 wu4 wei4 yan2 zhi1 bu4 yu4 ye3] The specific wording was used by the paper in 1962 before China went to war with India, and “those familiar with Chinese diplomatic language know the weight of this phrase,” the Global Times, a newspaper affiliated with the Communist Party, said in an article last April. It was also used before conflict broke out between China and Vietnam in 1979. [And before the Zhenbao Island Incident with the USSR in 1969]
The commentary, on page 3 of the Wednesday People's Daily - 美方不要低估中方反制能力（国际论坛--人民网:
Wikipedia on the phrase 勿谓言之不预也 - 勿謂言之不預也 - 维基百科，自由的百科全书:
US will rue forcing China's hand on rare earths - Global Times
An export ban on rare earths is a powerful weapon if used in the China-US trade war. Nevertheless, China will mainly use it for defense. It is not the first choice of China's offensive weaponries. This indicates that China will resolutely defend its core interests and will never bow to pressures exerted by the US. It is sincerely hoped that the US will remain restrained on trade issues and stop upping its stakes ignorantly. Otherwise, the US will see that China has a lot more countermeasures to put to use, and China has the resolution and will to fight to the end.
Commentary: U.S. risks losing rare earth supply in trade war - Xinhua
By making unilateral moves to contain technological development of other countries, the United States seems to have overlooked one fact: the international supply chain is so intertwined that no economy could thrive on its own...
China has reiterated its stand in promoting multilateralism and tried to avoid a trade war that hurts public interests.
But if necessary, China has plenty of cards to play.
Commentary: U.S. risks losing rare earth supply in trade war - Xinhua
China has reiterated its stand in promoting multilateralism and tried to avoid a trade war that hurts public interests. But if necessary, China has plenty of cards to play.
In lecture to visiting US scholars, Chinese official picks up ‘clash of civilisations’ theme | South China Morning Post
Scholars with the Peterson Institute for International Economics think tank in Washington, just back from China, said on Tuesday that their official reception at China’s Zhongnanhai leadership compound was markedly less hospitable than in years past.
“We got a 50-minute non-stop lecture, pausing only for translation, about this being a clash of civilisations,” said Adam Posen, the group’s president, who declined to say which member of the Politburo they met with. “And some of it was a bit extreme.”
Peterson Institute scholars said this lecture by their Chinese host focused on how the US was a “Mediterranean culture” based around belligerence and internal division, which explains why it has such an oppressive foreign policy
Comment: No racism from these PRC officials, move along…
Treasury Releases Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States | U.S. Department of the Treasury
While China does not disclose its foreign exchange intervention, Treasury estimates that direct intervention by the People’s Bank of China in the last year has been limited. Treasury continues to urge China to take the necessary steps to avoid a persistently weak currency. China needs to aggressively address market-distorting forces, including subsidies and state-owned enterprises, enhance social safety nets to support greater household consumption growth, and rebalance the economy away from investment. Improved economic fundamentals and structural policy settings would underpin a stronger RMB over time and help to reduce China’s trade surplus with the United States.
Kevin Rudd Opinion | Trump Hands China an Easy Win in the Trade War - The New York Times
Together with recent moves against the Chinese telecom company Huawei presumably intended to pressure Beijing further, the possibility of negotiating a revised agreement that is more accommodating to American interests is now very slim.
Instead, what I have seen in Beijing over the last few weeks is a country moving in exactly the opposite direction...
Even if a trade deal with the United States is still possible, some in the Chinese leadership are now starting to ask, why bother? They argue that in technology, investment, foreign policy, national security and human rights, the Trump administration has made it clear that it has embarked on a more adversarial position toward China. So why should Beijing expend any more political capital on a trade deal? Perhaps it’s better, in China’s view, to cut its losses now and get ready for the next Cold War.
Comment: I would add that the events of the last year have only confirmed what Xi and some others in the leadership, and especially the PLA, believed, but were trying to delay as long as possible to build up China's "comprehensive national power"--that the US always intended to keep China down and that some form of conflict was always inevitable
China Cannot Weaponize Its U.S. Treasury Bonds - Carnegie Endowment for International Peace - Michael Pettis
A number of recent articles suggest that Chinese officials may reduce their purchases of U.S. government bonds. It is very unlikely that China can do so in any meaningful way because doing so would almost certainly be costly for Beijing. And even if China took this step, it would have either no impact or a positive impact on the U.S. economy.
3. Official propaganda
Some of these excerpts are wrong, but there is value in reading what they are saying.
China asks state media to pick battles carefully with long US trade war looming, sources say | South China Morning Post
Internal briefings held this week reflected the Chinese leadership’s line of thinking that China has to make serious preparations for the worst-case scenario of an intense, broad-based and extended confrontation with the US on the trade, technology and geopolitical fronts, while also keeping open the option that tensions with Washington could ease.
“We have been told not to use ‘the US side’ generally in our copy because there are many different voices within the US,” said one state media executive, who declined to be identified because the instructions are confidential. “The idea is that there are people in the US who are against the trade war or the confrontational approach towards China.”
A second source, who works as an executive in a state-owned enterprise, said that the response by Beijing to the recent US escalation of trade tensions remains “restrained” despite an outpouring of nationalistic commentaries in China’s state media.
Comment: So what does "restrained" look like?:
“At least there are no people shouting slogans in front of the US embassy or trying to smash American shops in China,” said the state-owned enterprise executive.
US stock market threats self-defeating - Global Times
China will explore more choices to replace the US stock market. We believe there will be lots of markets worldwide that welcome promising Chinese enterprises. The US shuts a door against China's opening-up, but meanwhile it cuts the financing relations with the world's biggest developing market as well. Will this bring more losses to China or the US? This is an interesting question.
Some American people's arrogance toward China is abnormal. They are indulging in wishful thinking. They seem to believe the US is the lifeline of China's prosperity. They believe that if they cut off this so-called lifeline, China's modernization would collapse.
China demonstrates courage with grace under pressure - People's Daily Online
The experiences and capability of the Chinese nation to overcome difficulties are as strong as their willingness to seek peace and cooperation. The trade war will serve as a coming-of-age ceremony that further builds the country’s courage to pursue development, promote social progress and realize rejuvenation.
Commentary: CPC leadership is China's source of confidence amid challenges - Xinhua
With the strong leadership of the CPC, the significant advantage of socialism with Chinese characteristics, and the great efforts of the Chinese people pulling together, there is no hardship that China cannot overcome.
China Youth Daily has a page 1 article thanking America for making China's youth more united - 感谢美国让中国青年更团结！:
This generation of young people who grew up drinking Coke, watching American TV shows, and love freedom and individuality can sometimes be cynical, but when someone tries to bully their country with trade or harm national interests, these young people are absolutely unambiguous, and that kind of solidarity will form into a powerful force.
Hu Xijin of Global Times took to Weibo to warn against radical nationalism and leftism, and "low-level red" and "high-level black" - 在反击美国全面打压的时候，保持稳健，坚持... 来自胡锡进 - 微博
Background from May 11, 2019 China Media Project: “Low-level Red” and Other Concerns
The “Central Committee Opinions on Strengthening the Party’s Political Construction” released on February 28 reads, actually includes this pair of phrases, marking their debut in central-level Party documents (as opposed to news media alone). The document said: “[We] must with correct understanding and correct actions resolutely enact the ‘Two Protections,’ firmly preventing and correcting all erroneous statements that diverge from the ‘Two Protections,’ and [we] must not allow any form of ‘low-level red’ (低级红) or ‘high-level black’ (高级黑’), permitting no form of two-faced outer devotion and internal opposition (阳奉阴违做两面人) toward the Party’s Central Committee, any double-dealing or ‘false reverence’ (伪忠诚).”
Did a script come in a cable from Beijing? - Ambassador to Sweden Gui Congyou Holds a Press Briefing on the Trade War Started by the US Against China
Ambassador Gui said, first, I wish to state that whether it is a hot war, a cold war, a trade war, a technology war or whatever kind of war, the Chinese side firmly opposes them all. An observation of the over 5000 years of history of the Chinese nation tells us that it is not in our tradition or DNA to wage war against other countries. “Peace and harmony” is the essence of Confucianism of the Chinese nation. A culture that advocates harmony is in the core values of the Chinese nation, and it is also the philosophy for development followed by the Chinese nation. When it comes to trade, the idea that harmony and peace brings wealth is the way we approach business. It means one can make a fortune through treating others kindly and peacefully...
Ambassador Gui said, facing foreign invasions and wars imposed by foreign powers, the Chinese nation never feared, retreated or caved. Instead, we rose up and fought back. There is no shortage of such examples in China’s history. Our resistance against the barbaric aggressions, occupation, division and enslavement of Western powers since modern times, especially the 14 years of the War of Resistance against Japan, is ample proof of that. The US side bears full responsibility on the China-US trade war, as it is unilaterally started by the US. Since the US started the trade war with China at the beginning of last year, the Chinese side has been sincerely negotiating with the US out of our commitment to peace and harmony...
We will continue to be committed to reform and opening up. We will continue to deepen reform and open up wider. We are ready to open up further to all other countries including Sweden. We welcome more trade with Sweden and greater investment from Sweden. Let us expand our cooperation for mutual benefits, and shared development and prosperity.
US moves like a witch hunt for China - Global Times
Although Beijing has clashed with Washington to safeguard its interests in the arena of trade, China has been maintaining social exchanges and encouraging communication at all levels between the two societies, including promoting youth, think tanks and other exchanges. China is aware that to avoid strategic confrontation, benign interactions at the national level in the future need solid support of society. However, some politicians in Washington shake the public foundation in the interest of their own political ends.
Trump described Russiagate as "a total political witch hunt" of which he is a victim. Currently, his administration's bigoted moves toward China in economy and trade, technology and people-to-people exchanges are exactly a "witch hunt" against China. The US government is the perpetrator, while China is the victim.
The author, Song Guoyou, is deputy director of the Center for American Studies, Fudan University
Wednesday Zhong Sheng-"The bankruptcy of credibility is the greatest bankruptcy: “those who go back on one's word will inevitably fail" - 信用破产是最大的破产-——言而无信必将失败（钟声--人民网
Economist Magazine correspondent Simon Rabinovitch has created a nice list of the 16 straight days of People's Daily "Zhong Sheng" commentaries about the trade war:
You can read them all here in Chinese.
4. Fox-CGTN debate hits a snag
Chinese viewers count down to US trade war debate they can’t watch | South China Morning Post
“Since Liu Xin is only a guest on the show, the copyright for the show belongs to Fox,” CGTN said on its Chinese social media account.
“While CGTN originally wanted to broadcast [the debate] live, despite going through Fox Business Network’s official channels, we were unable to secure the rights. CGTN cannot broadcast the show live without authorisation from the other party.”
Question: Did CCTV insist on a delay in the “live” broadcast to allow the censors to do their work, as they do will all the “live” foreign broadcasts currently? The official responsible for ensuring nothing objectionable goes on air, especially days before the June 4 anniversary, must be relieved...
Huawei challenges legality of U.S. defense bill as sanctions fight ramps up - Reuters
The motion, filed late on Tuesday in the U.S. District Court for the Eastern District of Texas, asks to declare the 2019 National Defense Authorization Act (NDAA) unconstitutional in an update to a lawsuit brought by Huawei in March.
Huawei's US chief security officer makes the case for its lawsuit - CNBC
Andy Purdy, chief security officer of Huawei Technologies U.S., and Glen Nager, partner at Jones Day and lead outside counsel for Huawei, join "Squawk Box" to discuss.
Comment: Tough interview, unconvincing answers from Purdy and Nager..Purdy, who does most of the talking, says with IBM's help Huawei started continuity planning a year ago. Can IBM, a US company, keep working with Huawei?
U.S.'s Pompeo says Huawei is an 'instrument of Chinese government' - Reuters
“Huawei is an instrument of the Chinese government,” Pompeo said in an interview with Fox Business Network. “They’re deeply connected. It’s something that’s hard for Americans to understand.”
China hits out at US over Huawei blacklisting at WTO meeting | Financial Times $$
According to a trade official based in Geneva, China introduced a discussion of the Huawei ban at a meeting of the WTO’s market access committee under “other business” — then proceeded to attack the Trump administration’s move.
The representative from Beijing then accused the US of violating WTO rules by proceeding with the action against Huawei, and said Washington should “immediately lift all unilateral sanction measures against Chinese companies”.
China widened its argument to say that the US was unfairly claiming national security exceptions across the board, saying it had caused “great concern in the membership” of the WTO.
Undersea cables -- Huawei's ace in the hole - Nikkei Asian Review
The reality is, even if the U.S. succeeds in shutting out Huawei from 5G networks in major countries, the Chinese company could still thwart American efforts to maintain leadership in handling global data traffic.
Security policymakers in the U.S., Japan and Australia have started working together to address this potential threat.
Comment: Part of the digital silk road, undersea
Memory Card Industry Group Denies Suspending Huawei’s Membership - Caixin
The SD Association, the Japan-based organization that sets global memory card standards, denied suspending Huawei’s membership in a statement to Caixin on Wednesday.
The group did, however, admit to limiting the embattled Chinese telecom company’s power within the association, in response to the U.S. ban earlier this month.
Huawei warns ban will hit 1,200 US suppliers | Financial Times $$
Washington’s move to blacklist Huawei is set to hit about 1,200 US suppliers to the Chinese telecoms group, including companies that provide most of the backbone of the company’s cyber security system.
Senior executives told the Financial Times that the Trump administration’s decision to add the Chinese group and 68 affiliates to its prohibitive “entity list”, which effectively bars US companies from selling to them, would have ramifications beyond Huawei.
Comment: Lobbyists, rev your engines and go get some of the cash Huawei and its suppliers are and will be throwing around DC to get the Trump Administration to back off
U.S. pushes hard for a ban on Huawei in Europe, but the firm’s 5G prices are nearly irresistible - The Washington Post
Last month, the Netherlands’ leading wireless carrier chose Huawei to provide equipment for its next-generation 5G wireless network. The carrier, KPN, insisted the choice was based on quality. But Huawei had another advantage: price.
Huawei underbid the existing vendor, Swedish firm Ericsson, by 60 percent, according to two industry officials who spoke on the condition of anonymity to discuss a sensitive matter — offering a price that wouldn’t even cover the cost of parts.
Building China’s own chip industry will be a costly 10-year marathon, former Intel China MD says | South China Morning Post
“This is an extremely challenging and brutal industry, heavily reliant on long term industrial accumulation,” said Jay Huang Jie, founding partner of Jadestone Capital and former Intel Managing Director in China, speaking at a public event on Monday hosted by local think tank Our Hong Kong Foundation.
“China should be prepared for a marathon of at least a decade, which will also be loss-making [along the way],” said Huang, who left Intel in 2015 to establish his own investment firm focused on the semiconductor industry.
6. Reform committee meeting
China's Xi says reform faces new problems, external uncertainty rising - Reuters
China on Wednesday adopted a series of guidance measures, from improving macro-economic policies and ensuring food security to lowering medical costs, as President Xi Jinping warned that reform faces new problems with external uncertainties rising...
The meeting concluded that macro-economic policies would better address the relationship between the government and the market, without giving specifics.
Readout of the reform committee meeting - 习近平：因势利导统筹谋划精准施策 推动改革更好服务经济社会发展大局-新华网
Xi presides over meeting of central committee for deepening overall reform - Xinhua:
Xi...called for further reform to better serve the overall economic and social development.
7. China’s overall leverage ratio rising
China Sees Setback in Efforts to Keep Debt in Check - Caixin
China’s overall leverage ratio, which measures outstanding debt in the real economy against nominal GDP, increased to 248.83% at the end of March, the highest in a data series going back to 1993. That’s according to a joint study released on Tuesday by two Beijing-based state-backed think tanks — the National Institution for Finance & Development (NIFD) and the Institute of Economics under the Chinese Academy of Social Sciences.
The debt-to-GDP ratio was up 3.73 percentage points from the same period a year earlier and 5.1 percentage points higher than at the end of 2018, largely due to a shift in the focus of government policy toward stabilizing economic growth, the report said. The 6.4% pace of GDP expansion in the first quarter was unchanged from the final three months of 2018 and ended a run of three consecutive quarters of slowing growth
“The increase (in the leverage ratio) was very rapid,” Zhang Xiaojing, deputy director of the Institute of Economics and the NIFD, said at a briefing to discuss the report, “If it continues at this pace, China risks returning to the days of double-digit annual growth in its leverage ratio.” NIFD data show that the annual growth in the country’s debt-to-GDP ratio ranged from 10.1 percentage points to 14.6 percentage points in the five years to 2016...
The debt taken on by Chinese households is also increasing, with household leverage expressed as a percentage of nominal GDP rising to a record 54.3% in the first quarter from 53.2% at the end of 2018 and double the level at the end of 2010, NFID data show.
The report: 重心偏向稳增长，宏观杠杆率再度攀升 ---2019年一季度中国杠杆率报告; 张晓晶 常欣 刘磊 - 国家金融与发展实验室国家资产负债表研究中心, 中国社会科学院经济研究所
China's financial systematic risks trending downwards: J.P. Morgan - CGTN
“Since last months of 2018, China's financial systematic risks have been overall trending downwards,” Zhu Haibin, Chief China Economist at J.P. Morgan told CGTN Saturday. The report published by Tsinghua University Saturday also pointed out that China's macro-level systemic risk indicator has dropped significantly recently relative to 2018 due to major policy shifts since late 2018.
8. Hong Kong judges worried
Hong Kong judges see risks in proposed extradition changes - Reuters
Three senior judges and 12 leading commercial and criminal lawyers say the changes, called the Fugitive Offenders Ordinance amendment bill, mark one of the starkest challenges to Hong Kong’s legal system and are increasingly troubling its business, political and diplomatic communities.
It is the first time judges - who by convention don’t comment on political or legislative matters - have discussed the issue publicly...
The judges and lawyers say that under Hong Kong’s British-based common law system, extraditions are based on the presumption of a fair trial and humane punishment in the receiving country – a core trust they say China’s Communist Party-controlled legal system has not earned.
“These amendments ignore the importance of that trust - and in the case of the mainland, it simply doesn’t exist,” one highly experienced judge told Reuters on condition of anonymity because of the sensitivity of the matter.
“Many of us see this as unworkable,” the judge said. “And we are deeply disturbed.”
Hong Kong's Carrie Lam pledges more adjustments to extradition bill, amid storm of criticism | Hong Kong Free Press HKFP
Hong Kong’s leader Carrie Lam has said she will personally reach out to more foreign envoys in Hong Kong amid concern over the government’s controversial extradition bill, adding that further adjustments to the plan will be announced in the coming days. She also called on ex-colonial officials to provide proof that China was deliberately excluded from the city’s fugitive laws.
Lam told reporters on Tuesday that she will meet with at least three or four envoys to explain further, adding that she “regretted” that some diplomats had misunderstood the bill. This came after Lam met with representatives from European Union member states last Friday, which was sparked by a protest note sent by the city’s EU office.
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Business, Economy and Trade
PBOC Mulls Scrapping Benchmark Lending Rate, Governor Says - Caixin The central banker’s comment was the latest signal that China is gearing up to make interest rates more market-oriented. The country has been moving in that direction since 1996, but a two-track system remains. One track involves interest rates set largely by the market, such as the seven-day interbank pledged repo rate. The other track refers to benchmark deposit and lending interest rates, which are set by the central bank...Economists interviewed by Caixin said they think the central bank’s first move to unify the interest-rate tracks will focus on lending rates rather than deposit rates in consideration of possible market reactions. Unifying benchmark and market-based deposit rates could lead to fiercer competition among banks seeking deposits, in turn forcing them to raise rates on loans to companies, which would move counter to government efforts to lower borrowing costs amid slowing economic growth, they said
China’s capital outflow controls have gone to the ‘extreme’, former central bank adviser says | South China Morning Post Yu Yongding, a senior research fellow at the Chinese Academy of Social Sciences, a state-owned think tank, told a financial forum in Beijing on Wednesday that he recently tried to exchange yuan to the value of US$20,000 at a bank and transfer the money out of China to pay for a trip to visit relatives living abroad. But the bank refused to provide the service even though Yu, like all citizens under Chinese law, is allowed to make foreign transfers of up to US$50,000 each year. According to Yu, the bank refused to provide the service because he is over 65... “There were heavy outflow pressures in 2015 and 2016, but I don’t see clear signs of outflows at the moment,” Yu said.
China Chugs Iranian Oil Ahead of U.S. Sanctions Return - Caixin China’s inflow of Iranian crude oil surged to a five-year high in April as the world’s biggest oil importer engorged itself ahead of the return of U.S. sanctions against the Middle Eastern country earlier this month. Oil imports from Iran hit 3.24 million tons for the month of April, up 41% year-on-year, according to data from China’s General Administration of Customs.
Executive at Bankrupt State-Owned Steel Giant Under Investigation - Caixin Global Yan Zesheng, deputy party secretary and general manager of the bankrupt state-owned Bohai Steel Group, is under investigation for “serious violations of rules and the law”
Four more Chinese cities warned over pace of home price growth - Reuters The cities of Suzhou, Foshan, Dalian and Nanning have been told by the Ministry of Housing and Urban-Rural Development to stabilize land and housing prices as well as market expectations, the official Xinhua news agency reported late on Saturday.
German firms find US less reliable than China as trading partner after getting caught between Trump and a hard place to do business | South China Morning Post German companies think China is a far more reliable trading partner than the US or Great Britain, according to a survey by Commerzbank. China was ranked third in an assessment based on political and economic conditions affecting trade, with a score of 30, led by Germany itself way out ahead on 65, and France on 39. The US, in fourth place, was a long way behind on 17 points
Vietnam Looks To Be Winning Trump's Trade War | Council on Foreign Relations The Vietnamese can argue that their growing trade surplus was, in some sense, made in America. The recent jump in its surplus (and the surplus of many other East Asian economies) is almost certainly the consequence of Trump's tariffs on China.
Politics and Law
NPCSC Releases Five-Year Plan on State Assets Oversight – NPC Observer Under Chinese law, the State Council exercises ownership rights over and manages state assets [国有资产] on behalf of the State, while the NPCSC’s role is purely supervisory. Yet according to the Opinion, it has not been entirely clear how many state assets there are and the State Council’s management has been less than transparent. The NPCSC thus has had insufficient information to conduct rigorous oversight. The Opinion and the Plan seek to tackle this problem.
5G police glasses spark concerns - Global Times Chen Youxi, a lawyer and law professor at the Law School of the Renmin University of China, shared the reported commercial of China Mobile's new 5G glasses for police on his personal Sina Weibo account on Tuesday. In the video, a plain-clothed police officer quickly identifies and locks in on a wanted suspect in a crowded square through the 5G glasses' facial recognition function. The policeman also uses the glasses' data services to see through the suspect's disguise, track him and map out capture routes by connecting the glasses to the city surveillance camera system. He even activates a 5G-enabling roadblock on the suspect's escape route.
朱镕基“大秘”李伟卸任中国国务院智库官职_中国-多维新闻网 Li Wei, former secretary of Zhu Rongji, is relieved from his post as head of State Council Development Research Center. He is 66, so it should be his retirement. Li was heavily involved in China’s SOE reform.
Beijing’s relentless march to eliminate poverty | Financial Times $$ Even as Beijing faces the implications of a slowdown in growth, eliminating absolute poverty is President Xi Jinping’s signature domestic policy, a project that ranks among the grandiose plans of China’s past in its scale and ambition for the complete transformation of society. Plans hatched in Beijing include rewards for local officials who exceed their targets, resulting in a single-minded mobilisation of resources with little regard for the cost.
What is Mao's legacy? - The Washington Post - Iza Ding and Jeffrey Javed Our current study looks at the looming memory of Mao and the Maoist era. China seems to be experiencing a resurgence of Maoism in recent years, manifest in popular nostalgia for Mao and in Xi’s style of governance...We find, however, that this nostalgia goes beyond the hero mythology; many Chinese share a vision of the Maoist period as a bygone halcyon era. In our study, we conducted over 70 intensive semi-structured interviews with Chinese citizens in four cities in coastal and inland provinces, from 2015 to 2018. //The study: Understanding "Red Memory" in Contemporary China
Another Red Notice fugitive returns to China - CGTN Mo Peifen, former project manager in Hangzhou Xixi Building Industrial Corporation Limited, is suspected of graft crime. The procuratorate in Hangzhou ordered to arrest her in November 2014, after she fled in August 2013. Mo was listed on an Interpol Red Notice in December 2014.
Why We Remember June Fourth | ChinaFile - Perry Link We remember June Fourth because it taught us the essential nature of the Communist Party of China when all of the clothes, every shred, falls away. No book, film, or museum could be clearer.
Foreign and Defense Affairs
Singapore, China deepen defence ties, plan larger military exercises including joint navy drill | South China Morning Post Singapore and China have agreed to a “substantial programme” to deepen military ties after a Wednesday meeting between the two countries’ defence chiefs. Among the proposed enhancements to an existing defence cooperation agreement is a second bilateral naval drill to be held next year, after the countries held a similar drill in 2015.
Chinese President Xi Jinping, Indian PM Narendra Modi may meet in Varanasi later this year - Business Today Prime Minister Narendra Modi is likely to host Chinese President Xi Jinping in Varanasi on October 11. The Indian government has sent a proposal to China that the second informal summit between the two countries be held in PM Modi's constituency this year.
国务院任命罗照辉为外交部副部长 - 国内 - 新京报网 Former ambassador to Pakistan and India Luo Zhaohui is named vice minister of foreign affairs. The ministry now has two vice ministers that served as ambassador to India: Le Yucheng (who rumor has it may soon be coming to DC to replace Cui Tiankai) and Luo Zhaohui. Luo handled the Doklam standoff in 2017. According to the Foreign Ministry website, Luo is in charge of international treaties, Asian, maritime and border affairs. Luo replaces Kong Xuanyou, who just become ambo to Japan. It is still unclear who will replace Kong as China’s special envoy on Korean affairs.
In Counter To China, India Scores Big Sri Lanka Port Deal With Japan - NDTV Sri Lanka Tuesday announced it is entering into partnership with India and Japan to develop a deep-sea container terminal next to a controversial $500-million Chinese-run container jetty in Colombo harbour. The state-run Sri Lanka Ports Authority (SLPA) said a memorandum of cooperation (MOC) had been signed between the three countries to develop what is known as the East Terminal of the Colombo port.
UBC defends decision to host Chinese academic accused of promoting ideas that led to internment of Muslims | The Star While one senior academic fellow says Hu Angang’s appearance at the university’s Institute of Asian Research last month should be investigated, UBC said not allowing him to speak would have undermined the school’s ability to challenge the status quo.
Third military land survey is in full swing - China Military Under the unified requirements of the third national land survey, the third military land survey will comprehensively investigate and grasp the fundamental condition and the utilization situation of military land resources, and realize the following three breakthroughs. For the first time, the land under the management of the Armed Police Force will be incorporated into the survey to achieve a full coverage ; the military use of the sea areas and islands will be included in the survey to achieve a full coverage of special military resources; and the results will be compared with the national survey results, to realize the exchange and sharing of military and civilian data.
U.S. ambassador to China makes positive remarks about Tibet: FM spokesman "The ambassador has also been briefed about the central government's policies concerning contact and dialogue with the 14th Dalai Lama, as well as foreigners' access to Tibet," said Lu. 中方向美方介绍了中国政府的民族宗教政策和西藏经济社会发展情况，表明了中国中央政府在同第十四世达赖喇嘛方面接谈、外国人员访问西藏自治区等问题上的政策 // Is this softer language than usual?
中国安能正式挂牌，设置六年过渡期 - 财经 - 新京报网 Armed Police Hydropower Engineering Troops is now an SOE, part of Xi’s military reform to make PLA nimbler and more focused on fighting battles.
Scott Morrison's biggest foreign policy test: keeping peace with both China and the US The Pacific is where the strategic interests of China and Australia clash most directly. Morrison’s most important security policy decision thus far, announced at last year’s APEC summit, was to establish a joint naval base with the US and Papua New Guinea at Lombrum on Manus Island. This was partly aimed at denying the location to China, as well as establishing a forward ADF presence in the Pacific. It is also notable that Morrison will visit the Solomon Islands on his first post-election overseas trip.
China's top legislator meets Kazakh official - Global Times Kazakhstan is the first country to respond and participate in the construction of the Belt and Road, Li said, adding that the pragmatic cooperation between the two countries had yielded fruitful results and the two countries had established a model of complementary advantages and mutual benefit.
China not seeking 'sphere of influence' in Pacific, Xi says - CNA China is not seeking a sphere of influence in Pacific Ocean island states, President Xi Jinping told the visiting prime minister of Vanuatu amid fears in Western capitals of China's growing role in the region.
President Xi to pay state visit to Russia from June 5 to 7 - Global Times Chinese President Xi Jinping will make a state visit to Russia from June 5 to 7 at the invitation of Russian President Vladimir Putin, and will attend the 23rd St. Petersburg International Economic Forum
US scientist pleads not guilty to lying about China contact - AP Turab Lookman, who lives in Santa Fe and until recently worked at the Los Alamos National Laboratory — tasked with securing the nation’s nuclear stockpile, conducting research and reducing weapons threats — entered the plea to charges of making false statements during a federal detention hearing in Albuquerque....In one instance, a counterintelligence officer for the lab asked Lookman if he had applied for the China Thousand Talents Program, according to an indictment.
Xi holds talks with Nigerien President, vowing to boost ties - Xinhua Calling China and Niger good friends, partners and brothers, Xi hailed the constantly strengthening political mutual trust and fruitful pragmatic cooperation between the two countries. China and Niger should deepen synergy within the framework of the Belt and Road Initiative and FOCAC, Xi said, stressing the importance of carrying out key projects in infrastructure, people's livelihood, energy and agriculture. He said China will continue to support Niger in fighting terrorism for regional peace and stability, and promote the UN support for the Group of Five Sahel joint force. // 4 US soldiers died in NIger in 2017 fighting terrorism. France, Germany, Canada and Italy also have troops. Is the PLA doing anything in Niger yet?
Tech and Media
Chinese AI Talent in Six Charts - MacroPolo at MacroPolo we have created an original dataset based on published papers at what many experts deem the top annual AI conference, NeurIPS 2018, bringing more data to bear on assessing the quantity and quality of AI research talent in China and the United States...Takeaways:
1. Chinese-born researchers conduct a relatively small portion of the most elite AI research (~9%), but a substantial portion (~25%) of upper-tier AI research.;
2. A majority of Chinese-born researchers conducting upper-tier AI research do so at US institutions.;
3. The majority of Chinese-born researchers conducting upper-tier research attended graduate school in the United States, and the majority of them work in the United States after graduation
Beijing AI Principles - Beijing Academy of Artificial Intelligence The development of Artificial Intelligence (AI) concerns the future of the whole society, all humankind, and the environment. The principles below are proposed as an initiative for the research, development, use, governance and long-term planning of AI, calling for its healthy development to support the construction of a community of common destiny, and the realization of beneficial AI for humankind and nature.
Regulators Issue More Draft Rules to Tighten Up Lax Data Protection - Caixin The proposed guidelines, released Tuesday (link in Chinese) by the Cyberspace Administration of China (CAC), lay out specific rules regarding the do’s and don’ts for how internet companies collect and use customer data. The policy will be open for public comment until June 28. It followed another similar policy early this month, by the National Information Security Standardization Technical Committee, a separate government body tasked with advising central government agencies including CAC.
Energy, Environment, Science and Health
Food Delivery Apps Are Drowning China in Plastic - The New York Times Scientists estimate that the online takeout business in China was responsible for 1.6 million tons of packaging waste in 2017, a ninefold jump from two years before. That includes 1.2 million tons of plastic containers, 175,000 tons of disposable chopsticks, 164,000 tons of plastic bags and 44,000 tons of plastic spoons.
Jobs and Events
Frank Langfitt - The Shanghai Free Taxi: Journeys with the Hustlers and Rebels of the New China — in conversation with Steve Inskeep | Politics and Prose Bookstore Saturday, June 15, 2019 - 3:30 p.m. to 4:30 p.m, 5015 Connecticut Ave NW Washington DC 20008.
The American Mandarin Society Next-Generation Scholars Program - American Mandarin Society Through tailored mentorships with renowned journalists, this AMS initiative supports four young professionals committed to a career in writing about China. Each scholar commits to writing four pieces (each ~1000-3000 words). They receive feedback from AMS mentors with the goal of publishing these pieces in respected publications or websites.
Rural and Agricultural Issues
Pork prices set to soar on China swine fever outbreak | Financial Times $$ Fine Breed is not the only farm with an unacknowledged outbreak; analysts say farmers in China have taken to sending entire herds to the slaughterhouse at the first sign of ASF, rather than report to the government and receive too little compensation. The resulting oversupply helps explain why, after nine months of government-ordered culling, domestic pork prices have not jumped due to shortages, whereas global markets have reacted sharply. Spot wholesale prices for Chinese pork have risen only about 8 per cent since August, while Chicago hog futures are up more than 35 per cent.