A Chinese military base in Afghanistan

China to build military base in Wakhan Corridor

“Beijing is in talks with Kabul over the construction of a military base,” according to Afghan officials who talked to Agence France-Presse. The base will be built in the Wakhan Corridor, a thin strip of mountainous land that separates Tajikistan from Pakistan and connects Afghanistan to a small section of the Chinese border.

• Afghan and Chinese officials discussed the plan in Beijing in December, but an agreement has not been formalized yet. An Afghan military spokesperson told AFP: “We are going to build it but the Chinese government has committed to help the division financially, provide equipment and train the Afghan soldiers.”
• There have been reports for several months, from AFP and other organizations, of Afghani soldiers patrolling with Chinese troops, but officials from both militaries have denied it.
• Uzbekistan’s Ferghana News reported (in Russian) earlier this month that China would finance an Afghan military base in the northern province of Badakhshan, and that the major Chinese motivation was the fear that “Chinese Uighurs who have joined terrorists, can cross into China through Afghanistan and become a headache for the Chinese authorities.” (See further English analysis of the Ferghana News story on China-U.S. Focus.)
• China announced plans to build its second overseas military base in Pakistan earlier in January.
• In related news, the new Chinese ambassador in Kabul has been named. He is an official who has worked on President Xi Jinping’s signature Belt and Road Initiative, and the South China Morning Post calls his appointment “a sign that Beijing wants [Afghanistan] to play a bigger role” in the Belt and Road, and that China is about to “step up security and economic engagement with Afghanistan.”

Also related: if you haven’t heard it yet, please listen to the Sinica Podcast with journalist Gerry Shih, who discusses his recent series of stories on the lives of the Uyghurs, both in Xinjiang Uyghur Autonomous Region — where authorities have created a massive digital police state — and in the Middle East — where some have fled and joined militant groups. You can subscribe to Sinica via Overcast, iTunes, or Stitcher.

A drug giant meets the tech titans

Marketwatch reports that Anglo-Swedish pharmaceutical company AstraZeneca has announced partnerships with Alibaba and Tencent.

• Alibaba subsidiary Ali Health will work with the drug company to develop “technologies such as artificial intelligence to help with patient diagnosis and treatment,” including “traceable codes on drugs that will give consumers more information about the medicine they use.”
• With Tencent, AstraZeneca will work “to combat the online sale of counterfeit drugs.”
• Related: On CNBC — Amazon wants to disrupt health care in America. In China, tech giants already have; on Reuters — AstraZeneca flags return to drug growth in 2018, China shines.

Next China conversations and feedback

Two things:

• If you have a moment, please watch the video conversations we shot at our Next China conference. You can find the links below, or purchase a video of the entire event.
• Thank you for your support of The China Project. Your contribution means a lot to us, and we want feedback! So please tell us the good and the bad: jeremy@thechinaproject.com reaches me alone, or contact our whole editorial team at editors@thechinaproject.com.

—Jeremy Goldkorn, Editor-in-Chief

THIS WEEK’S NOTEWORTHY NEWS:

1. Wang Qishan is back
   China’s powerful anti-graft czar and Xi Jinping ally is back from retirement, and will be the National People’s Congress representative for Hunan Province. Observers see this as a sign of Xi’s strength, and intention to hold on to power beyond his conventional two-term limit as Party secretary and president.
2. Vatican and Beijing on cusp of ‘historic breakthrough in relations,’ says report
   The Vatican and Beijing have not had very cordial relations since the Communist Party took over, but the two sides this week created a framework for a breakthrough deal on how to appoint bishops in China. A formal agreement “could be signed in a few months” and would be “an historic breakthrough in relations,” Reuters reported, citing “a senior Vatican source.” Many Catholics are uneasy about the deal. Read more about the context of a potential deal in the Washington Post — Potential China deal with Vatican alarms Catholics — and in Crux — Explaining why the Vatican seems so eager for a deal with China.
3. Taiwan retaliates against new flight routes declared by P.R.C.
   China Eastern and Xiamen Airlines canceled 176 extra flights between the mainland and Taiwan scheduled for the upcoming Chinese New Year holiday, after Taiwanese aviation authorities denied landing rights for new flight routes that Taipei says were declared unilaterally by Beijing. Tens of thousands of Taiwanese people will have to find alternate routes back home. Taiwan’s Mainland Affairs Council later stated, “The people’s eyes are sharp. Whether this disputed issue can be resolved is an important indicator of how Taiwan people will view the future direction of relations between the two sides of the Taiwan Strait.”
4. Another foreign company in trouble with China for geographical sins
   Japan’s Muji retail chain was forced to pulp a catalog in China because it contained a map that left out the disputed Senkaku Islands. Muji is the latest of several foreign companies doing business in China or selling to Chinese consumers to get berated by Beijing for not “respecting China’s sovereignty.”
5. China’s central bank hits pause on Tencent Credit
   The department of the People’s Bank of China responsible for monitoring loans told the credit rating arm of internet giant Tencent to pull a credit scoring service, just one day after its launch as a trial program (read about it here on The China Project). A source told Caixin that “ongoing concerns about the misuse of credit and personal-credit information were the primary reasons” for the move.

FEBRUARY 2 — TODAY’S NEWS

• The golden era of Sino-British relations
  China commends Theresa May for ‘sidestepping’ human rights / The Guardian
  Chinese investments in UK fail to materialize / FT (paywall)

One person involved in the Wirral talks with Sam Wa said the British side had been naive. “Nobody in China ever says no to you,” the person said. “If you bring over a businessman or politician they will treat them well and it’s easy to believe you have a deal.

“With Sam Wa it was always: ‘The money’s coming. It takes time to get money out of China.’ But the money was never there.”

• Smartphones
  China’s Xiaomi back to top five vendor as global smartphone market shrinks / Reuters
• Gambling
  China considers legal gambling on Hainan Island / Bloomberg
• Economic statistics
  Authorities in Xi Jinping’s former power base to measure industrial productivity by the acre / SCMP
• State media
  Sudden change at the top of CCTV / China Media Project
• Stock markets
  China’s stocks head for biggest weekly decline since 2016 as liquidity crunch spooks investors / SCMP
• Artificial intelligence
  China needs to quicken AI adoption in the real economy, Xi says / Bloomberg
• Internet companies
  Alibaba revenue jumps 56%; the China retail giant also buys stake in Ant Financial / CNBC
• Moutai
  Brewing trouble: A look at the long history, troubled present, and murky future of China’s national liquor / Sixth Tone

ON SUPCHINA

China Sports Column: Li Haotong, China’s best male golfer, is putting the world on notice

A quick glance at the Top 50 male golfers in the world this week will show a Chinese name: Li Haotong 李昊桐, who, at No. 32, has achieved easily the highest-ever ranking for a Chinese golfer. This follows his impressive win last week at the Omega Dubai Desert Classic over Rory McIlroy. Also in this week’s China Sports Column: Stephon Marbury announces he’ll retire from basketball at the end of this CBA season.

• Also in sports: Klay Thompson ‘smiles’ through funny new Anta commercial

Kuora: Love and marriage, China-style

The modern Chinese married couple sits atop many major fractures: generational ones, East-West fractures, fast-changing material conditions and material expectations and the values generated (or upended, or discarded) by those conditions and expectations, changing gender roles, a huge sea change in attitudes about sex. It’s a wonder that any relationships survive it at all, let alone survive in a state of “happiness.”

Video: Jianbing, a Beijing street food that bridges China-U.S. culture

It wasn’t long ago that jianbing 煎饼 — northern China’s ubiquitous street food — was a little-known novelty in New York, confined to stalls in Flushing and food carts. But in the past year or two, jianbing has gone mainstream, capturing the attention of big media and regular diners alike. Watch this The China Project video about the Chinese crepe, and then read about Mr Bing owner Brian Goldberg’s quest to bring the jianbing Stateside.

996 Podcast: Tao Zhang of Dianping on merging with Meituan and the ‘groupon war’

GGV Capital’s Hans Tung and Zara Zhang interview Tao Zhang, the founder of Dianping, a lifestyle services company that is often known as “the Yelp of China” but is much more than that. In 2015, Dianping merged with the group buying giant Meituan. The new company, Meituan-Dianping, is now worth $30 billion and is the fourth most valuable startup in the world.

• Subscribe to the 996 Podcast via Overcast, iTunes, or Stitcher.

Goodbye to Jifeng: patrons gather one last time at iconic Shanghai bookstore

The last branch of Jifeng Bookstore (季风书园 jìfēng shū yuán), an iconic independent bookstore chain in Shanghai that’s been around for more than two decades, closed this week on a “dark” note. At its peak, the chain had eight locations across the city, but seven of them closed due to rising rents and dwindling sales. There is reason to believe that the final location, at Shanghai Library, was closed for reasons that were not entirely business-related.

Video: Next China conversations

• A conversation with Michael Szonyi on Chinese politics
• A conversation with Stephen Roach about macroeconomics in China
• A conversation with Michael Chu on China’s economic future
• A conversation with Roberta Lipson on Chinese healthcare
• A conversation with Fritz Demopoulos on the Chinese media industry
• A conversation with Anna Fang about investment in Chinese startups
• Did you miss the conference, or wish to watch it after the fact? Purchase a recording for $28.88!

More:

• Video: Chinese air force plane crashes during training
• Video: Watch a train station being built in 9 hours in China

BUSINESS AND TECH

EARLIER THIS WEEK:

• The global electric car business is about to get very interesting

Ecommerce behemoth Alibaba and Foxconn — the company that manufactured most of the smartphones you’ve ever owned — have led a 2.2 billion yuan ($347.74 million) funding round in Chinese electric car maker Xiaopeng to develop electric cars and autonomous-driving technology.

• The return of Swatch — thanks to China

Watch exports to China rose almost 19 percent in 2017, reviving the fortunes of companies such as Swatch, whose demand had taken a beating from weak economic growth, competition from smart watches, and China’s anti-corruption campaign in recent years.

• It’s Uber…but for bicycles: The American on-demand leader takes a page from China

Uber is launching 250 dockless bicycles in San Francisco, following a worldwide trend started in China. But “it’s not clear if dockless bike-sharing is a winning business model, given the slim margins and logistical headaches,” Quartz writes.

POLITICS AND CURRENT AFFAIRS

EARLIER THIS WEEK:

• China denies report of bugging African Union building, AU diplomat says ‘at least they have never colonized us’

Bugs installed in desks and walls transmitted data from Addis Ababa, Ethiopia, to Shanghai in the middle of the night for over five years, Le Monde reported on January 26. If the Le Monde report is accurate, it shows a strain of growing anxiety about security among African elites — who are targeted by China’s soft power campaigns, extensively courted, and often successfully co-opted into partnership by China.

• UK’s May comes to China severely hobbled by Brexit

U.K. Prime Minister Theresa May visited China for a three days this week, bringing with her 50 business leaders and the hope to negotiate for a “global Britain.” But Brexit — and the political instability that it is causing in Britain — has greatly reduced the value of the U.K. to China.

• Hong Kong votes to ban ivory trade by 2021

A major loophole in the global ivory trade will be closed, as Hong Kong’s Legislative Council voted on January 31 to shut down trade in ivory by 2021. Hong Kong has been the world’s largest ivory market, and 90 percent of buyers there have been from mainland China.

SOCIETY AND CULTURE

EARLIER THIS WEEK:

• Altercation between stranded Chinese tourists and Japanese police at Tokyo airport

On January 25, video of a physical confrontation between Japanese police officers and frustrated Chinese travelers at a Narita International Airport caught lots of attention on social media.

• Shanghai Disneyland’s VIP service enrages regular visitors

A social media storm hit Shanghai Disneyland on January 29 following a Legal Daily article about the park’s VIP service, which allows high-paying customers the ability to skip lines. Online, many accused Shanghai Disneyland of providing its regular customers with second-class service.

• ‘No respect for history’: People’s Daily lambastes parodies of patriotic song ‘Yellow River Cantata’

Party newspaper the People’s Daily published an op-ed on Monday condemning parodies of Yellow River Cantata (黄河大合唱 Huánghé dàhéchàng), a well-known patriotic musical work composed by Xian Xinghai 洗星海 in 1939.

• China is promoting marriage by giving newlyweds cash

A pilot program in the city of Taiyuan, Shanxi Province, that offers subsidies to newlyweds will be expanded province-wide in 2018.

• Why did a Chinese live trivia game get suspended? A: Jiang Zemin

Avid players of Brain King 头脑王者, a live trivia game similar to HQ Trivia that runs on the Wechat platform, were shocked to find their beloved mini-program unavailable yesterday, with a notice saying the game had been suspended for violating WeChat’s rules. Although no official explanations have been given as to which exact questions irritated internet regulators, the game’s players were quick to help it spot its problems — with former president Jiang Zemin playing a prominent part.

• Stranded at Tehran airport, Chinese passengers break out into chants of ‘China!’

Chants of “China!” erupted at an Iranian airport on January 29 as hundreds of Chinese passengers were stranded for more than a day because of delayed flights caused by bad weather, causing online debate about how Chinese people should demonstrate patriotism in foreign countries.

PHOTO FROM MICHAEL YAMASHITA

Phone call on the train

A little girl talks on the phone on a train leaving the Shenzhen railway station during Chunyun (春运 Chūnyùn), the Spring Festival travel season. This year, about 2.98 billion trips will be made during this period, which starts about 15 days before the Lunar New Year and lasts about 40 days.

—Jia Guo