Anbang confirms billionaire chairman is in trouble

The rumors came true: Anbang chairman detained

At 8:30 p.m. Beijing time on June 13, Caijing magazine published an article that said Wu Xiaohui 吴小晖, the billionaire chairman of Anbang Group, was taken away on June 9 by the relevant organs (被有关部门带走 bèi yǒuguān bùmén dài zǒu) — in other words, detained by the authorities. The article also said that the China Insurance Regulatory Commission, which regulates Anbang’s main business of insurance, summoned company executives to a meeting on June 10 to give them the news, although the reasons for his detention were not explained.

As we noted in April, Anbang has been hemorrhaging cash, and rumors have been circulating for some time that Wu was in trouble with the authorities for corruption, or as the loser in a power struggle of some kind. Anbang came to public attention with a global investment spree that included the purchase of the Waldorf Astoria hotel in New York in 2014, and has been in the news more recently for negotiating a multibillion-dollar financing deal for a New York building owned by the family of Jared Kushner. The deal was abandoned after media reports suggested possible impropriety. As this this Economist article (paywall) describes, Anbang has also been at war with Caixin magazine over its negative coverage of the company.

Several hours after the article on Wu’s detention was published, it was deleted from Caijing’s website. The South China Morning Post has a summary of the Caijing article, and the original Chinese text is online here.

Anbang itself has confirmed that Wu is, at best, unavailable. A statement on the company’s website (in Chinese) dated June 14 reads:

Anbang Insurance Group Chairman and General Manager Mr. Wu Xiaohui, cannot perform his duties because of personal reasons. He has authorized the relevant executives on behalf of the company to perform their duties. The Group’s operating conditions are all normal.

Shanghai housing authority softens rules after protest

On May 17, Shanghai municipal authorities announced that commercial real estate that had been converted into residential apartments and sold could not be transferred to buyers. Some people who had bought such housing organized a rare public protest in central Shanghai over the weekend. The Shanghai government appears to have softened its stance in response: Reuters reports (via NASDAQ) that “the housing bureau said buyers of commercial properties can take delivery of the properties if they have signed purchase contracts, while developers must also accommodate buyers that want to cancel contracts.”

In May, Beijing also relaxed similar rules, in what Caixin called “an apparent bid to reassure the market after it was rattled by a ban on turning commercial buildings into residences.”

Free field guide to the birds of Beijing

Terry Townshend is a Beijing-based bird enthusiast, previous Sinica Podcast guest, and one of the originators of a project to track migratory birds that fly from Beijing across Asia as far as South Africa. He has published a free, downloadable field guide to the birds of Beijing.

—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:

WeChat click farm in Thailand busted

Thai police arrested three Chinese men who were operating a “click farm” (刷榜工厂 shuābǎng gōngchǎng) to run up “likes” and views on WeChat to generate buzz about Chinese companies. According to iFeng.com (in Chinese), the police found 474 iPhones, 10 computers, and 347,000 unused SIM cards at the men’s home in Sa Kaeo Province, about 200 kilometers east of Bangkok. The Associated Press says the men told police that “they were paid according to how many likes and views they generated, each earning 100,000-150,000 baht ($2,950-$4,400) per month.”

Tencent’s WeChat, China’s most popular social media and messaging platform, had about 938 million monthly active users in April, CNBC reports. The app was launched in 2011 and rapidly became the most widely used communication tool in China. The app received about 29 percent of all the time spent on mobile apps in China on an average day in April, according to data in Mary Meeker’s respected 2017 Internet Trends report.

• China puts brakes on new car production / Caixin
  State regulators announced (in Chinese) that they plan to limit construction of new auto factories “in a bid to rein in a runaway buildup that has seen capacity greatly outstrip demand.” The announcement says that new-energy vehicles “must account for a greater percentage of overall output” but does not specify if the limits on new construction will apply to electric-only vehicle plans.
• Wentworth golf club’s Chinese owner seeks to quell dissent / Financial Times (paywall)
  Reignwood, the company behind Red Bull in China and run by Thai-Chinese tycoon Chanchai Ruayrungruang aka Yan Bin 严彬, has been in the news (paywall) for a battle with the Bangkok-based Yoovidhya family over the rights to make and distribute the energy drink in China.
  Reignwood is also engaged in a long-simmering dispute with the members of Wentworth, a golf club near London, which it acquired in 2014. One of Reignwood’s first acts after the deal was to ask members for a one-off fee of $127,000 and raise the annual fees by 75 percent to $17,000 a year. Now the Financial Times says Wentworth has issued new rules to “kick out any member whose comments ‘on social media, the internet or in any newspaper or magazine article’ are deemed by the board to be ‘injurious to the character or interest of the club.’”
• Australian casino company employees face charges in China / NYT (paywall)
  After detaining 18 employees of Crown Resorts Limited, a casino company, in October last year, Chinese authorities have charged them with violating gambling promotion regulations according to a filing on Australia’s stock exchange from the company.
• China’s bond link faces familiar hurdles for wary foreigners / Bloomberg
  “China is about to broaden foreign access to its $10 trillion debt market — but international investors are likely to be wary.”
• Opinion: China’s skyscraper age is over / Bloomberg
  “As workplace habits change, supertall buildings are sitting empty.”

POLITICS AND CURRENT AFFAIRS:

Panama cuts diplomatic ties with Taiwan in favor of China

Panama has established diplomatic relations with the People’s Republic of China and cut long-standing ties with Taiwan, handing a huge victory to Beijing in its efforts to isolate the self-governed island that China insists is its territory, the Guardian reports.

In a joint statement released on June 12, the two governments announced that they are recognizing each other and establishing ambassadorial-level relations the same day. “The government of the republic of Panama recognizes that there is but one China in the world, that the government of the People’s Republic of China is the sole legal government representing the whole of China, and that Taiwan is an inalienable part of China’s territory,” the statement read.

On the next day, June 13, China’s Foreign Minister Wang Yi 王毅 held a meeting in Beijing with Isabel de Saint Malo, the Panamanian vice president and foreign minister, in which they signed a joint communiqué establishing diplomatic ties. “From now on, China has a new member in its friend circle,” Wang said (in Chinese), describing Panama’s decision as in “complete accordance” with its nation’s and people’s interests and “in keeping with the times.” Wang also stated that the negotiation went extremely smoothly as Panama didn’t express any hesitation or propose any requirements. Following the meeting, Chinese state media Xinhua published photos of Wang and his counterpart signing the document and shaking hands with each other.

The South China Morning Post noted that Panama’s shift is not only a big gain for China diplomatically, but also will serve China’s interests in promoting its ambitious Belt and Road initiative, as it “will help Chinese companies increase investment around the Panama Canal, a key waterway linking the Atlantic and Pacific oceans and a major international trade route.”

• How Trump’s Paris decision drove the top U.S. diplomat in China to quit / PBS
  David Rank, the top U.S. diplomat in China who resigned his post in protest of Donald Trump’s decision to withdraw from the Paris Agreement, gives his first interview since June 5.
• Opinion: Xi Jinping’s Marco Polo strategy / Project Syndicate
  Professor Joseph Nye writes that “while the Belt and Road Initiative will provide China with geopolitical gains as well as costs, it is unlikely to be as much of a game changer in grand strategy, as some analysts believe.” Nye has previously been a guest on the Sinica Podcast.
• After Xi Jinping’s ‘snub’ in Astana, Pakistan scrambles to please China / Times of India
  “Islamabad is in damage control mode and pulling out all the stops to mollify its ‘all-weather friend’…Xi last week skipped a customary meeting with Pakistan Prime Minister Nawaz Sharif at the Shanghai Cooperation Organization (SCO) summit held in Astana, Kazakhstan. Just days before the summit, two Chinese nationals were kidnapped in restive Balochistan; the Islamic State later claimed it killed them.”
• Trump adds more trademarks in China / NYT (paywall)
  “Trump is poised to add six new trademarks to his expanding portfolio in China, in sectors including veterinary services and construction, potentially renewing concerns about his possible conflicts of interest.”
• A Chinese city just auctioned Rolex watches, underwear, and Walmart gift cards turned in by civil servants / Quartz
• ‘No such thing as justice’ in fight over chemical pollution in China / NYT (paywall)
• Chinese bishop dies but Vatican-appointed successor not yet ordained / UCA News

SOCIETY AND CULTURE:

Nine years later, China’s plastic-bag ban only looks good in theory

With the aim of reducing pollution and litter, in June 2008 China enacted a nationwide ban on retailers distributing free plastic bags, as well as the production, sales, and use of ultra-thin plastic bags in general. But nine years later, a group of environmentalists, officials, and even state media are questioning the ban’s effectiveness, according to Sixth Tone.

Many shopkeepers and street vendors are still using thin and flimsy plastic bags, violating the ban without any punishment. At supermarkets and shopping malls, customers can still get plastic bags by paying a fee of around 0.30 yuan ($0.04), and the ban has gradually turned into a profitable business. A commentary (in Chinese), published by People’s Daily on June 12, blames retailers’ pursuit of profits and the difficulty of changing consumer habits for the ban’s failure, and says that the burgeoning food delivery and courier industries are creating new problems.

Online, the ban has also drawn harsh criticism (in Chinese) from internet users, with many calling the ban “such a joke.” On the social media platform Weibo, one commenter wrote, “The decision makers didn’t use their brains in creating the ban, and they never asked the public’s opinions.”

• Annecy festival drops Chinese film after Chinese government pressure / China Film Insider
  Variety magazine called Liu Jian “a story of gangster-archetype lowlifes, shady opportunists and hired killers, only distinguished from a thousand sub-‘Pulp Fiction’ knockoffs by the specificity of its location in the unlovely, underclass regions of a southern Chinese city and by Liu’s efficient, muted-palette drawing style.” You can watch a clip of the film on YouTube, but you won’t be able to see it at the Annecy festival in France: The film was dropped “after repeated requests from Chinese officials ‘in an increasingly firm tone’ according to the organizers.”
• Xi Jinping ready for FIFA chief’s curveball / Nikkei Asian Review
  “Chinese President Xi Jinping will meet FIFA President Gianni Infantino in Beijing on Wednesday, as the soccer aficionado dreams of bringing the World Cup to the Middle Kingdom.”
• China joins U.S. as top influencer in science / Nikkei Asian Review
  “Heavy spending and hunt for talent rapidly raising nation’s profile.”
• China and the closing of the ivory trade / The New Yorker (paywall)
  “Does the closing of the legal trade in China mean the end of the crisis for Africa’s elephants? Unfortunately, there’s little that’s predictable about the ivory market in China.”