Détente with Duterte – China news from May 3, 2017

Xi and Duterte on the phone

Chinese state media on May 3 prominently reported a phone call between Chinese President Xi Jinping and his Philippine counterpart, Rodrigo Duterte. Xinhua News Agency notes that “Xi said he met Duterte twice last year and reached important agreements with him, which led to the comprehensive rapprochement in bilateral ties,” and that “a channel of dialogue and consultation on the South China Sea issue has also been set up.” The New York Times said (paywall) that “Mr. Xi’s outreach to Mr. Duterte appeared to be part of efforts by the Chinese to woo a longtime American ally and strengthen their sovereignty claims in the South China Sea,” and that it came a few days after Donald Trump, “surprising his own staff,” had “telephoned Mr. Duterte and invited him to visit the White House.”

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. Please click here to learn more and buy tickets.

Maiden flight set for China’s first passenger jet

Commercial Aircraft Corporation of China, or Comac, has confirmed Friday, May 5, as the date of the initial trial flight for the C919, China’s first domestically built large passenger jet. The plane has already completed pre-flight ground trials. CNN says, “The 168-seat plane is roughly the same size as Airbus’s A320 and Boeing’s 737-800, which are the most popular airliners on the planet.” Xinhua News Agency has a small photo gallery of the plane.

Foreign Policy Colloquium seeks Chinese grad students in U.S.

The National Committee on U.S.-China Relations’ U.S. Foreign Policy Colloquium provides 75 Chinese graduate students who are studying in the United States with “the opportunity to gain a deeper understanding of the complex forces that shape American foreign policy and the U.S.-China relationship…through site visits and lectures” and “insider access to D.C. institutions and policy makers.” The activity runs from Tuesday, May 30, to Friday, June 2, in Washington, D.C. Interested students can apply here until the May 10 deadline.

—Jeremy Goldkorn, Editor-in-Chief

Waiting for H-1B work visas in the time of Trump

This year, the Trump administration suspended expedited processing for H-1B work visa applicants, meaning that many foreign professionals will face longer wait times and uncertainty. Jia Guo reports.

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:

Deutsche Bank is now nearly 10 percent Chinese owned

The Chinese conglomerate HNA Group has more than doubled its stake in Deutsche Bank from 4.8 percent in March to 9.92 percent according to the most recent regulatory filings, Bloomberg reports. HNA is now the largest shareholder in Europe’s largest investment bank. The group has also recently acquired stakes in the Swiss travel retailer Dufry, the Singaporean logistics firm CWT, and the hotel giant Hilton Inc. On May 2, Jing Daily noted that HNA may be preparing to acquire an unnamed “major” cruise line.

The South China Morning Post analyzed the pace of HNA’s expansion last month, and pointed out that “while other players, including China’s richest man, Wang Jianlin, and insurance group Anbang, have had to rein in their global ambitions, HNA has sealed one deal after another in recent months.” The company, according to (paywall) the New York Times, has deep connections to the government, as its chairman, Chen Feng 陈峰, is part of the National Congress of the Chinese Communist Party. Moreover, in 2008, HNA formed a business partnership with the son of He Guoqiang 贺国强, the country’s anti-corruption chief at the time.

• Apple loses ground again in China / WSJ (paywall)
  Though Apple posted its fifth consecutive quarter of shrinking revenue in greater China for the quarter that ended April 1, banks up and down Wall Street remain generally bullish on the company’s performance, including in China. Apple is expected to release an updated iPhone in September.
• China craves foreign goods. Students in Australia supply them / NYT (paywall)
  “Australian goods have become hot commodities in China, and tens of thousands of young Chinese who are students at Australian universities or recent graduates have built a cottage industry to meet that demand.”
• China to start security checks on technology companies in June / WSJ (paywall)
  Read more on the new cybersecurity law in yesterday’s The China Project newsletter.
• China is selling more electric vehicles than the U.S. — and it’s not even close / Quartz
  For more on China’s electric vehicle market, see The China Project’s summary on May 1.
• China’s rust-belt rebound is under threat from slowing inflation / Bloomberg

POLITICS AND CURRENT AFFAIRS:

No South China Sea operations as U.S. focuses on North Korea

In our 100-day review of President Trump’s posture toward China, we noted that though his advisers — and the president himself before his inauguration — had previously pressed for challenging China in the South and East China Seas, Trump “suddenly became muted once assuming office.” Now the New York Times reports (paywall) that the Trump administration has rejected three Navy requests to conduct freedom of navigation operations in the area. The Times notes that Trump has apparently “adopted a more conciliatory air with Beijing as [he] seeks help to rein in Pyongyang,” while “the Pentagon leadership [also] wanted to look carefully at the strategic implications of such excursions on overall national security policy,” especially with regards to North Korea.

On May 2, U.S. and Chinese diplomats gathered in New York to discuss the North Korean problem, Reuters reports. Options on the table include the usual statement of condemnation, a stronger resolution that may also blacklist some individuals and entities, or a more ambitious program of sanctions. Sources told Reuters that it is unclear what level of action China’s government may be willing to take, and a Foreign Ministry spokesman dismissed talk of sanctions as a purely “hypothetical” question on May 3.

Chinese state media, however, went ahead and made some unusual criticism of North Korea earlier this week, as the nationalist tabloid Global Times asked, “Is [the] China-North Korea friendship treaty outdated?,” and the Party-run People’s Daily called for “responsible actions” on the part of all parties, but especially North Korea, to “ensure peace” on the Korean Peninsula. Reuters notes that these two editorials brought unusual criticism from North Korean state media, which accused them of “chopping down the pillar” of the two countries’ relations.

• Trump’s pick for ambassador to China says he will work with Beijing on North Korea / Washington Post
• China announces role as mediator between India and Pakistan on Kashmir / International Business Times
  “Announces” is incorrect. The article cites the Global Times, a centrally placed nationalist publication that hints at but does not dictate government policy preferences, as one of its reporters argued on May 1 that “China [is] ready to play a greater role in resolving conflicts in South & Southeast Asia.” Nevertheless, the International Business Times presents a useful view into how India is seeing China, as the reporter writes, “India’s fears that China will meddle in the Kashmir dispute seem to be coming true.”
• China’s Silk Road push in Thailand may founder on Mekong River row / Reuters
  “This will be the death of the Mekong…you’ll never be able to revive it,” said one campaigner of China’s environmentally disruptive plan to artificially widen the river.
• U.S. fake news feeds information-hungry audience in China / Financial Times (paywall)
• Prisoner escapes from jail in China in stolen truck / SCMP

SOCIETY AND CULTURE:

Massive forest fire in Inner Mongolia

The South China Morning Post reports that “more than 8,300 people are helping to fight a huge forest fire” in Daxing’anling Prefecture in Inner Mongolia, which “has spread to over 5,000 hectares.” It is the second large forest fire to hit the area this spring. Daxing’anling is the mostly wooded, mountainous area in the far northeast corner of Inner Mongolia, bordering Russia.

• Girls have had it tough in China for nearly 3,000 years / Quartz
• Writing China: Faith and love in a Shenzhen brothel / WSJ (paywall)
• The evolution of kung fu: From hired killers to soldiers, the mafia, and finally an esteemed sport / SCMP
• Marbury departure sparks angry fan backlash against Beijing Ducks / The Beijinger