China courts tiny countries

China successfully woos São Tomé and Príncipe, gives guns to Laos

As geopolitical tensions ratchet up in the Pacific Ocean (see Politics section below), President Xi Jinping continues China’s policy of assiduously courting small countries by making time to host his counterpart from one of the tiniest nations on the planet.

São Tomé and Príncipe is a tiny country of fewer than 200,000 people living on two islands in the Atlantic Ocean about 150 miles west of central Africa. It was one of a handful of countries that maintained diplomatic relations with Taiwan rather than with the government of the People’s Republic until December last year, when it announced it was switching recognition to Beijing. The China Daily reports that on April 14, Xi met São Tomé and Príncipe’s president, Patrice Trovoada, who is in China on a six-day official visit, his first since his government recognized Beijing.

The two presidents made the usual statements at such occasions: Trovoada promised his country “would firmly uphold the one-China policy,” while Xi said China “is willing to help São Tomé and Príncipe improve its development plans, boost cooperation in tourism, fishery, and agriculture, and support the country’s infrastructure construction.” Xi also said that “China is willing to cooperate with São Tomé and Príncipe on security, including fighting pirates and cross-border organized crime.”

Meanwhile, the Diplomat reports that on April 11, “China presented defense equipment to Laos in another sign of the enduring importance of the security relationship between Beijing and the tiny, landlocked Southeast Asian state.” Things don’t always go smoothly, however. The Diplomat also notes that the Laos government has ordered the shutdown of “environmentally destructive Chinese-owned banana farms.”

Women and China:

A Forum on How Women Are Shaping the Rising Global Power

The China Project’s conference in New York on May 18 will feature 20 women leaders in Chinese technology, business, and culture. Read all about it and buy your early-bird tickets up until April 18.

Official at banking watchdog under investigation?

Caixin reports that Yang Jiacai 杨家才, assistant chairman of the China Banking Regulatory Commission (CBRC), who has not appeared at work this week, “has been relieved of his duties.” Although authorities have not yet given an explanation, Caixin places his absence in the context of the anti-corruption investigation into Xiang Junbo 项俊波, the colorful chairman of the China Insurance Regulatory Commission.  

Chinese Breaking Bad professor gets life sentence

The Chinese chemistry professor who was running a drug-manufacturing operation — and has often been compared to the antihero of the TV series Breaking Bad — has been sentenced to life in prison, according to the China Daily.

The Caixin-Sinica Business Brief: Tell us what you think!

Today we’re testing out the new Caixin-Sinica Business Brief, a joint creation from Caixin, China’s authority for business and financial news, and The China Project’s Sinica Podcast. Every Friday we’ll bring you a roundup of the top business news of the week, plus a selection of interesting stories from Caixin Global and conversations with Caixin editors and reporters. Please give the first trial episode a listen, and send us your feedback to sinica@thechinaproject.com or directly to me by replying to this email.

—Jeremy Goldkorn, Editor-in-Chief

Private kindergartens are a booming business in China

Chinese parents investing fortunes into early-age education is nothing new. But the thriving market of private highly-Westernized kindergartens stands in stark contrast to every other educational sector in China. Lucas Niewenhuis reports from Beijing.

Viral video Friday

This week’s compilation: A brawl on a busy subway train in Beijing, a disoriented robber who ran into the police station to hide himself, and more.

This week on The China Project:

• Sinica Podcast: A life of business in China with Virginia Kamsky
• Video: A rare look inside Zhongnanhai, leadership compound for the Communist Party 
• Video: Cash for spies!
• Geely: The astonishing rise of a small Chinese car company
• The dire state of female representation in the Chinese government

This week’s news roundups are:

• April 10: Anti-corruption reality TV
• April 11: Big bucks for catching spies in Beijing
• April 12: Did this phone call get results?
• April 13: China: Palestinians must be allowed to build an independent state

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:

One billion yuan investment in private healthcare for Shenzhen

The South China Morning Post reports that a Hong Kong consortium led by the territory’s former finance minister Antony Leung Kam-chung 梁锦松 plans to invest at least 1 billion yuan ($145 million) into the Shenzhen-based Best Unimed Medical Group, a hospital operator. Best Unimed was established last year, with more than 300 doctors who charge a minimum consultation fee of 500 yuan. The new investment in the company will allow it “to attract Hong Kong doctors to serve at two new hospitals and about 20 clinics in Guangdong by offering them insurance coverage aimed at protecting them from threatening tactics commonly used by mainland patients seeking compensation.”

In March, Best Unimed Medical Group announced (in Chinese) a cooperative project with Microsoft and the state finance group CITIC to roll out a system for managing medical records and providing health guidance and facilitating communication to patients.

The South China Morning Post report connects the new investment plans with the Greater Bay Area plan announced in March by Premier Li Keqiang, which is designed to integrate the economies and infrastructure projects of the cities of the Pearl River Delta area, including Hong Kong.

• Hebei seeks support for new banks, insurers to be branded ‘Xiongan’ / Caixin
  “The government of Hebei Province wants to create 10 financial institutions to serve the fledgling Xiongan New Area and give them a ‘Xiongan’ branding edge. But critics say the step isn’t necessary because plenty of established banks have announced plans to move in.”
• The people’s burger? / BuzzFeed
  “A major Chinese state-owned conglomerate is now on track to become the world’s largest McDonald’s franchise owner.”
• How one Chinese rural county spawned four courier empires / Financial Times (paywall)
• China credit growth picks up amid record shadow banking activity / Bloomberg
• China’s gamble: How a campaign to prop up the yuan imperils other pressing mandates / WSJ (paywall)
• Chinese-led groups now own AC Milan and Inter Milan / SCMP

POLITICS AND CURRENT AFFAIRS:

The drums of war in northeast Asia

Earlier this week, CNN reported that a U.S. naval flotilla is making its way to the waters around the Korean peninsula. Xinhua News Agency says that the state news agency of North Korea, which it prefers to call the Democratic People’s Republic of Korea (DPRK), has announced that “all the brigandish provocative moves of the U.S. in the political, economic and military fields…will be thoroughly foiled through the toughest counteraction of the army and people of the DPRK.” Chinese foreign minister Wang Yi has urged (on Xinhua) “all parties to refrain from inflammatory or threatening statements or deeds to prevent irreversible damage to the situation on the Korean Peninsula,” saying that “no one will win” if war breaks out. Xinhua also reports that Kim Jong-un has been supervising the “Korean People’s Army special forces airborne and target combat contest.”

Meanwhile, the South China Morning Post reports that Air China has suspended flights to Pyongyang but not as a punitive act as earlier reported in some media: Rather, the airline says that falling ticket sales have forced temporary cuts in service. The People’s Daily confirmed (in Chinese) that Chinese customs authorities have suspended coal imports from North Korea, however, the New York Times reports (paywall) that China said on April 13 “that its trade with the country had expanded, even though it had complied with United Nations sanctions and stopped buying North Korean coal.” One of the goods that may be included in trade between China and the DPRK are missile parts: The Washington Post says that parts of booster rockets seized by the South Korean navy after a North Korean missile test showed that “many key components were foreign-made, acquired from businesses based in China.”

In separate but related developments, Reuters reports that Japan is scrambling “jet fighters at record pace as Chinese military activity rises,” while Taiwan’s China Post says that shares on the island’s stock exchange “took a beating” on April 14, “as sentiment was affected by rising geopolitical tensions after the United States dropped a powerful bomb in Afghanistan earlier in the day.”

• Duterte is under pressure to end the Philippines-China honeymoon / The National Interest
  “While the charismatic Duterte has managed to convince a growing proportion of the Philippine society that America is not a reliable partner, he has fallen short of convincing his generals, the political class and the broader population that China is a trustworthy neighbor.”
• Raw sewage stinks up Guangdong waterways / Caixin
  “Pollution inspectors have rebuked local governments and the provincial government in China’s southern industrial hub, Guangdong Province, for allowing hundreds of thousands of tons of raw sewage to be dumped into waterways every day.”
• China’s Communist Party to evaluate lawyers based on ‘political performance’ / SCMP
• China punishes Weibo for porn / China Daily
• China raises pensions for 13th year in a row / China Daily

SOCIETY AND CULTURE:

Theft and sidewalk congestion plague China’s bike-sharing companies

Though China’s latest bike-sharing frenzy hasn’t shown any signs of slowing down, problems are piling up like the shared bikes are doing on city streets. In some highly populated areas in downtown Shanghai, individuals are now banned from parking or riding bikes — no matter if they are private or rented. Major bike-sharing services in the city were told by the local government that they must withdraw all shared bikes from these restricted areas by April 19 or face fines of 20 yuan per bike. Facing a similar problem of shared bikes clogging up sidewalks, police in Shenzhen are now “partnering with bike-sharing firms to launch a joint command to monitor the number of bikes in designated areas to prevent congestion or chaos on the road,” according to the China Daily.

Meanwhile, the bike-sharing boom is starting to attract shady operators: According to this post  (in Chinese) on the social media platform Weibo, stolen shared bikes are being sold at prices ranging from 40 to 100 yuan (about $5-$15) on Xianyu (闲鱼 xiányú), a secondhand ecommerce platform operated by Alibaba (although judging by a search on April 14, such listings have already been taken down). Opportunists are also making money by teaching people how to unlock shared bikes to steal them, charging 1,000 yuan for each bike-sharing brand. One Weibo commenter lamented that “the overall quality of our citizens is not high enough to afford the sharing economy.” 

See The China Project’s feature on bike sharing for more details on how Chinese bike sharing works.

• Chinese cinema absent from Cannes 2017 selections / China Film Insider
• How I made my own iPhone — in China! / Strange Parts
• China’s elite boarding schools / The Economist (paywall)
• Beijing marathon to use facial recognition in cheating crackdown / The Telegraph
• Chinese travelers set a new record for global tourism spending in 2016 / Skift