Real estate speculators rush to site of planned new city

New city created by fiat, creating immediate property boom

On Saturday, the Chinese government announced the creation of a new city: The Xiongan New Area (雄安新区 xióng ān xīnqū) will be a special economic zone about 100 kilometers (62 miles) southwest of Beijing in Hebei Province. According to Xinhua News Agency, Xiongan “will become home to facilities not related to the capital that were relocated from Beijing, where breakneck urban growth has given rise to…traffic congestion and air pollution,” but will also make the protection of local ecology a priority. The China Daily has an article and map showing Xiongan’s location, and “seven major tasks” for the planned development, which include “building a world-class, green, modern and smart new city, with scenic ecological environment, blue skies, fresh air and clean water, and developing high-end innovative industries as new growth engines.” The area is right next to a group of Baiyang lake, the largest freshwater body in Hebei.

State media articles are also comparing the new area with the Shenzhen and Pudong development zones, which played a vital role in the early years of China’s economic boom after the “reform and opening up” policy began in the early 1980s. The new area is also connected to the “Beijing-Tianjin-Hebei integration” (京津冀一体化 jīng jīn jì yītǐhuà) project, which seeks to collectively develop China’s two largest northeastern cities together with the province that surrounds them.

This being China, the news on Saturday was followed by an immediate rush on real estate: Reuters reports that local real estate agents in the area “shut up shop on Monday, hours after Beijing ordered a ban on property sales in a frantic effort to curb a sudden housing boom” triggered by the announcement of plans for the new area. Many commenters on the social media platform Weibo were not impressed (in Chinese), with some warning that if China’s economy only depends on real estate, all will end in disaster, and others asking what right the government has to stop real estate transaction.

In a separate development, ECNS.cn reports that seven new free trade zones “began operation across China on April 1, with the aim of further opening up the country and coordinating development between various regions.”

Xi, Trump, Kushner

Excitement and uncertainty are building about the upcoming meetings between Presidents Xi Jinping and Donald Trump set to take place in Florida on April 6 and 7, and media organizations and pundits are trying to understand what is going on behind the scenes and predict possible outcomes.

In a story headlined “Xi Jinping’s summit plan to tame Donald Trump,” the Financial Times says (paywall) that China has tried to influence the American president by befriending his family and looking “favorably on Mr Trump’s business,” but it is unclear whether this strategy will pay off. However, as the New York Times points out (paywall), despite all of Trump’s tough talk on trade with China, there has been no “real action” so far.

On the weekend, the Financial Times also printed the transcript of an interview (paywall) with Trump in which he said that he would tell China “that we cannot continue to trade if we are going to have an unfair deal like we have right now,” and that “if China is not going to solve North Korea, we will.” Reacting to this statement, China-watcher Bill Bishop commented this morning in the Axios AM newsletter that “the U.S. does need a different approach, and Trump is right to threaten unilateral actions if Beijing does not do what it can.”

Finally, the Washington Post has a thoroughly reported piece on the “key channel for high-level interactions between the White House and Chinese leadership run by Trump’s son-in-law, Jared Kushner.”

Australia-based professor leaves China after detention

Feng Chongyi 冯崇义, associate professor of China Studies at the University of Technology, Sydney, was allowed to return to Australia on Saturday after being held for a week and questioned by Chinese security forces. He told Reuters that he still plans to return to China in the future, and that “if they wanted to scare me they failed miserably.”

Meanwhile, there is still no official word on the whereabouts of Lee Ming-cheh 李明哲, a Taiwanese activist who disappeared in the southern city of Zhuhai on March 19. The Straits Times reports that about 20 civic groups in Taiwan held a press conference to urge the Chinese authorities to release him.

The prejudice against journalists who are Party members

Xinhua News Agency’s Twitter account published a schmaltzy eight-minute-long video set to poignant music featuring Chinese journalists who are Communist Party members. They speak about the prejudice they face because of their Party affiliations, and the reasons they chose to join.

—Jeremy Goldkorn, Editor-in-Chief

This issue of the The China Project newsletter was produced by Sky Canaves, Lucas Niewenhuis, Jia Guo, and Jiayun Feng. More China stories worth your time are curated below, with the most important ones at the top of each section.

BUSINESS AND TECHNOLOGY:

Slow going for Chinese high-speed rail abroad

“There is no case of China exporting high-speed rail that can be described as very successful,” said a spokeswoman for the Beijing-based CRRC Qingdao Sifang, one of the largest train manufacturers in the world. While the rollout of new high-speed rail in China has gone at breakneck speed — the country already has the world’s largest rail network, with 22,000 kilometers (13,700 miles), and is set to expand it by 36 percent in the next three years — major deals abroad have stalled. In 2015, Mexico canceled a plan to bring in Chinese high-speed trains, and in 2016, Indonesia suspended a joint rail project with China worth $5.1 billion. Indonesia recently approved the operational permit for that project, but only after a full year of delays. Another potential deal last year to connect Las Vegas and Los Angeles never made it past the drawing board.

Possible reasons for difficulties overseas, the South China Morning Post reports, include customer base — few countries have China’s density or volume of commuters within and between major cities — and geography, as China has enough land that mountains can usually be avoided — a luxury not available in Southeast Asia, for example.

• China has its worst ever start to a year for defaults / Bloomberg
  “While it’s still far from a crisis point, the defaults shows how policy makers’ efforts to reduce the liquidity that had propelled the bond market until late last year is exacting casualties.”
• South Korea Lotte Group says will continue to invest in China despite tensions / Reuters
  “Lotte has not outlined a strategy to cope with the difficulties besides ‘waiting’ for it to blow over.”
• Less noodles, beer and movies? Clouds on Chinese consumption horizon / Reuters

POLITICS AND CURRENT AFFAIRS:

On democracy and individual rights in China

Orville Schell, director of the Asia Society’s Center on U.S.-China Relations, wrote a surprisingly optimistic piece (paywall) in the Wall Street Journal titled “China’s once and future democracy.” In it, Schell recalls the vibrant — and government-approved — expressions of support for human rights and democracy in China in the late 1970s and ’80s, and explains how they still give context to modern debates on the development of the country. He also compares China’s many “democratic impulses” over the past century to “recessive genes that can skip a generation before expressing themselves again.” Schell further speculates that, paradoxically, Donald Trump’s stunning silence on human rights could give those impulses room to breathe, as China’s leaders feel less under attack and may again find use in harnessing the many liberal voices of the country.

Rebecca Liao, an international corporate attorney and The China Project contributor, wrote in Foreign Affairs about the significance of the government’s approval last month of the General Principles of the Civil Law, which she calls “simply the preamble” to a modern civil code. She argues that surrounding this latest formalization of civil law in China, as with previous reforms, is “an uneasy awareness that individual property rights are the basis from which other individual rights are derived.”

• Beijing charm offensive curbs Philippine protests / Financial Times (paywall)
• Duterte’s China gambit yet to pay dividends / Asia Times
• Top official who rose amid corruption scandals now named party chief of China’s hi-tech hub – Wang Weizhong 王伟中 moves from Taiyuan to Shenzhen / SCMP
• In ‘China’s Jerusalem,’ ‘anti-terror cameras’ the new cross for churches to bear / SCMP
• Language matters: How a minor mistranslation can affect U.S.-China relations / Lawfare
• Why the CIA is increasingly worried about Chinese moles / Newsweek
• The new Chinese diaspora / Lowy Institute

SOCIETY AND CULTURE:

U.S. cities woo Chinese travelers with creature comforts

Chinese tourists “already spend more in the U.S. than other international visitors” and their number continues to grow, according to the Associated Press. Hotels and city tourism organizations have taken note and are launching “campaigns aimed at getting their member hotels, restaurants and tourism companies to better incorporate Chinese language and customs into their offerings.”

At the Sheraton Boston, amenities include “slippers, robes, instant noodles, an electric kettle and green tea.” Other hotels provide Chinese-language television and newspapers and Chinese dishes on room service and restaurant menus, and allow customers to use WeChat to book and pay for hotel rooms.

• Woks away: China’s plan to make jet fuel from restaurant leftovers / SCMP
• Why Hollywood should worry about the U.S.-China summit / China Film Insider
• The kingdom of women: The Tibetan tribe where a man is never the boss / The Guardian
• Beijing to introduce visa-free status for English teachers / The Beijinger
• A Mao by Warhol sells for below estimate at Hong Kong auction, casting doubt on Asian appetites for Western contemporary art / SCMP