A Chinese port in Israel, and did the Pope make a deal with Xi Jinping?

Dear Access member,

It was a busy news week and today’s newsletter is packed. Two announcements for Access members:

• Our Access chat with Paul French is archived here.

• Do you have questions for Condoleezza Rice? The National Committee on U.S.-China Relations would like to hear them! In advance of the China Town Hall national webcast on October 9, it is soliciting questions from The China Project Access members. Write to me at jeremy@thechinaproject.com.

—Jeremy Goldkorn, Editor-in-Chief

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1. Vatican to make a deal with Beijing?

“The Vatican and China are set to sign a landmark agreement later this month intended to bring together China’s state-backed and unauthorized Catholic communities, according to two people familiar with the matter,” report Eva Dou and Francis X. Rocca of the Wall Street Journal (paywall).

• The deal would give the Party and the Church “a say in appointing the church’s bishops in China,” and recognition by Beijing that the Pope is the head of the Catholic Church in China.

• Seven excommunicated Chinese bishops who were appointed by the Party  government without Vatican approval would be recognized as part of the deal.

• The deal will be highly controversial, within the Catholic Church and beyond. “This is a strange step backward on terrain over which the church has fought, not for centuries but millennia,” said Sandro Magister, a Vatican expert who writes for Italy’s L’Espresso magazine, according to the Journal.

Background and context

• Listen to this Sinica Podcast with journalist and scholar of religion Ian Johnson: The Vatican and China.

• The China Project reports from February this year when the initial news of a “framework” being agreed between the Vatican and Beijing was reported: Vatican and Beijing on cusp of ‘historic breakthrough’;  Historic breakthrough in ties between the Vatican and Beijing leads to an ‘unholy war of words.’

2. A Chinese-run port in Israel

In Haaretz, Amos Harel writes: “China will operate Haifa port, near Israel’s alleged nuclear-armed submarines, and it seems no one in Israel thought about the strategic ramifications.”

• Shanghai International Port Group (SIPG) won a bid to expand the Haifa port, about 100 kilometers (60 miles) north of Tel Aviv. Harel says the project “is slated to be inaugurated in 2021 and calls for the Chinese company, which also operates the Port of Shanghai, to run the Haifa Port for 25 years.”

• Another Chinese firm won a bid to build a new port at Ashdod, just south of Tel Aviv, according to Harel (although what little information there is online suggests that port is controlled by Switzerland-based TIL).

• The Israeli National Security Council and navy were apparently not consulted about these bids. Harel sees several problems:

  • U.S. Navy ships will not dock at Chinese-run ports — this has “implications for Israel’s relations with the United States, which under the Trump administration is ramping up its rhetoric on China.”

  • There is an Israeli Navy base next to the port, so aside from “acquiring vast influence over essential infrastructures in Israel,” China is also getting “a closer look at some of Israel’s military capabilities.”

  • “China is not necessarily hostile to Israel, but its interests are tangled and complex.” One example cited is China’s close ties to Iran, an issue other Israeli commenters have raised.

3. Super Typhoon Mangkhut

“Mangkhut [山竹 shānzhú] has made landfall in the Philippines and is expected to land in an area between western Guangdong and eastern Hainan on Sunday night,” says Xinhua.

• The China Meteorological Administration said southern China could be put to a “severe test,” while the governor of Hainan “told the island province’s officials to ‘prepare for the worst,’” according to the South China Morning Post.

• Hong Kong officials are also preparing “for the worst,” says the SCMP. A woman was swept away by waves on Taiwan’s east coast in heavy weather, reports Taiwan News. Taiwan is not on Mangkhut’s direct path, but authorities have warned people to stay away from Taiwan’s beaches.

• YouTube feeds run by weather nerds who are tracking Florence in the U.S. and Mangkhut in Asia live: Ivo Jürgenson and Force Thirteen.

—Jeremy Goldkorn

4. Trade war, day 71: Trump pushes for tariffs now, not after negotiations

An extra brief roundup today (there is more context in the packed “Week in Review” section below):

• Donald Trump reiterated that he wants his tariffs, and he wants them now: “Trump instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite his Treasury secretary’s attempt to restart talks with Beijing to resolve the trade war,” Bloomberg reports (paywall).

• But “Trump may be running low on products he can target without significant backlash from major U.S. companies and consumers,” so the final announcement is still being delayed as the administration adjusts the next round of tariffs based on public comments.

• It’s like “you sacrifice 800 soldiers of your own to kill just 1,000 enemies” (伤敌一千，自损八百 shāng dí yī qiān, zì sǔn bā bǎi), Chinese foreign ministry spokesman Geng Shuang said of the trade war, Washington Post reporter Anna Fifield noted.

• The EU wants to work with China to “alleviate the disruptions” of the trade war, Nicolas Chapuis, the new EU ambassador to China, said, SCMP reports.

More trade war reporting:

• Unintended consequences — lower gas exports?
  US gas exports to China threatened by a trade war / FT (paywall)
  “Homegrown hydrocarbons are a priority of the Trump administration…But they are undermining their own agenda as they conduct a trade war with the most promising foreign gas market of them all: China.”

• Intended consequences — shifting supply chains
  China’s loss in Trump’s trade war is Asean’s gain. Look at Vietnam / SCMP

• The small American city where Xi Jinping once stayed
  This Iowa city forged an unusual friendship with China and its president. Then came the soybean tariffs. / Washington Post

• Casinos
  American casinos in Macau are safe from Chinese trade war wrath, analyst says / CNBC

• Trends in China’s economy
  China’s export-dependent provinces scramble for shelter from U.S. trade storm / Reuters
  “Guangdong, China’s biggest province by gross domestic product, this week offered to cut corporate taxes, slash electricity prices and reduce transport and land costs as additional U.S. tariffs since July exposed Chinese manufacturers to the prospect of empty order books.”
  “Fujian, another big-exporting province on the coast, unveiled a similar package of measures in August to soften the blows of the trade war.”
  Still no sign of lending bump from China’s steps to offset trade war / SCMP
  “Central bank expected ease monetary further after no signs of new life from efforts to boost bank financing and stabilise growth.”
  Chinese investment grows at slowest pace on record / FT (paywall)
  “Chinese investment in houses, factories, railways and other fixed assets grew at the slowest pace on record last month, the latest sign of a weakening economy as China braces for the impact of US tariffs.”

—Lucas Niewenhuis

5. Official: Xinjiang camps justified because West ‘has failed’ to stop terrorism

Some new stories from and connected to Xinjiang and the worsening repression there (also see recent stories in “Week in Review” section below):

• “China is buying African media’s silence” is the title of a piece in Foreign Policy by Azad Essa, the columnist fired by South Africa’ Independent Media after he wrote an article on oppression of Muslims in Xinjiang. As we explored in our Access newsletter a week ago, 20 percent of Independent Media is owned by China International Television Corporation, a subsidiary of central state broadcaster CCTV, and the China-Africa Development Fund.

• Uyghur family risking deportation from Sweden: journalist Jojje Olsson has an update on Abdakir, his pregnant wife and their two children.

• “It is not mistreatment… What China is doing is to establish professional training centers, educational centers,” said a Chinese official speaking to media on the sidelines of the UN Human Rights Council session in Geneva, reports Reuters. The official explained:

If you do not say it’s the best way, maybe it’s the necessary way to deal with Islamic or religious extremism, because the West has failed in doing so, in dealing with religious Islamic extremism. Look at Belgium, look at Paris, look at some other European countries. You have failed.

6. Fallout from Google’s China plan

The Intercept reports: “A senior Google research scientist named Jack Poulson has quit the company in protest over its plan to launch a censored version of its search engine in China.”

• Poulson says “he believes he is one of about five of the company’s employees to resign over Dragonfly,” and that he felt it was his “ethical responsibility to resign in protest of the forfeiture of our public human rights commitments.”

• Scrutiny of Google’s China plans is growing: “A bipartisan group of 16 U.S. lawmakers asked Alphabet Inc’s Google on Thursday if it would comply with China’s internet censorship and surveillance policies should it re-enter the Chinese search engine market,” reports Reuters.

7. California-China climate change summit

Could this be a rare piece of good news in a season of depressing stories? The South China Morning Post reports:

China and California are seeking to push past the trade war to shore up their joint front in the fight against climate change, with a three-day summit in San Francisco this week.

The “asymmetric” joint effort between the world’s second-biggest economy and America’s most populous state has the backing of California governor Jerry Brown and Chinese President Xi Jinping, who sent a personal message of support to Brown ahead of the summit.

—Jeremy Goldkorn

—–

Our whole team really appreciates your support as Access members. Please chat with us on our Slack channel or contact me anytime at jeremy@thechinaproject.com.

—Jeremy Goldkorn, Editor-in-Chief

Here are the stories that caught our eye this week:

• The government’s attempt to rewire Uyghur and Muslim identities in Xinjiang gained substantially more international attention, with a front-page New York Times article and a 117-page, detailed and damning report from Human Rights Watch. The U.S. State Department is reportedly considering sanctions on Chinese officials and surveillance equipment companies over the abuses in Xinjiang. Activism abroad by Uyghurs and other Muslims about the abuses in Xinjiang is also increasing.

• Beijing rebuked the UN human rights chief’s request to send monitors to Xinjiang to investigate the reported re-education camps, and attacked the credibility of Human Rights Watch without addressing any specific allegations in the report. A top publicity official in Beijing then denied that the re-education camps were abusive, insisting, “What China is doing is to establish professional training centers, educational centers.”

• China is also repressing Christians more, by burning bibles and destroying crosses at multiple churches across the country, and shutting down Zion, the largest Protestant church in Beijing. Then, draft rules were introduced that may ban all foreigners from spreading religious materials online in China, and impose additional restrictions on religious preaching among Chinese as well.

• Xi Jinping visited Russia, and made blinis and downed shots of vodka with Putin in celebration of a closer Russia-China relationship. China also sent over 3,000 troops to participate in Russia’s largest military drills since the Soviet era. Xi is also making efforts to improve ties with Japan, which, along with Russia, China is using as a counterweight to an increasingly unfriendly U.S.

• China’s most famous actress, Fan Bingbing, disappeared and is reportedly in trouble with authorities, possibly for tax evasion. She has been incommunicado for over three months.

• The U.S. reached out to China for last-minute trade negotiations before the next $200 billion in tariffs go into effect, though it is unclear that the negotiations will actually happen or achieve anything. Trump insisted that he is under “no pressure to make a deal with China.” Earlier in the week, Trump had cheered supply chain disruption at Ford and pushed for the same at Apple as a result of tariffs.

• Meanwhile in the trade war, China launched a last-minute financial roundtable with Wall Street executives, as suspicions rose in Beijing that the Trump administration is driving the U.S.-China relationship towards cold war and containment.

• Venezuela will get a $5 billion loan from China, as President Nicolas Maduro and his finance minister, Simon Zerpa, visited Beijing trying to salvage their country’s economy.

• The Belt and Road hit more bumps in Pakistan and Malaysia. Abdul Razak Dawood, an advisor to the newly elected Prime Minister of Pakistan, Imran Khan, said that his country did a “bad job” negotiating deals with China, while Malaysia has confirmed the cancellation of three billion-dollar pipeline projects with China.

• Jack Ma made another splash in the media, this time saying at first to the New York Times that he was retiring — soon, it was implied, though the Times noted he “will remain on Alibaba’s board of directors and continue to mentor the company’s management” — from his executive chairmanship at Alibaba, and then walking it back to say that the process will actually take a year.

• Controversial loans in Africa continued to receive attention, and China forgave or restructured debts in a few countries.

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BUSINESS AND TECHNOLOGY:

• Apple and Chinese innovation
  Sorry Apple, your “most advanced” features are already commonplace in China / TechNode
  Gang Lu, the founder of TechNode, writes, “Those who praise iPhones’ borderless screens, they should take a look at Find X; those who claim iOS is the only smooth operating system, they should at least try MIUI; those who commend the big screen of iPhone Xs Max may have not heard of Samsung, Huawei, Xiaomi, all which have bigger screens. Those who compliment iPhone’s dual-camera system may not know that Huawei’s P20 Pro already supports tri-camera. Those who are stunned at a dual-sim card may not understand a dual-sim card has been extremely normal in China for years and it’s totally a Shenzhen-developed tech.”

• Counterfeit products
  Two million fall prey to scam involving fake Huawei products / TechNode
  “Over two million people around China have fallen prey to a scam in which they were offered free Huawei products, only to have to pay excessive fees for delivery and handling. Once the [counterfeit] products were delivered, they were required to pay RMB 29 for logistics, storage, and labor, filling the fraudsters coffers.”

• Video and the enormous market of Chinese pensioners
  iQiyi launches short video app targeting the elderly / China Film Insider
  “The company launched Jinshi (锦视) this week (September 11), which hosts videos more appropriate to its target audience, according to New Business Intelligence.”

• Wanda shrinks, again
  China’s troubled Wanda sells down AMC stake / Bloomberg via FT
  “Dalian Wanda has struck a deal to cut its stake in US cinema chain AMC Entertainment, as the troubled Chinese group continues a push to sell off assets in a bid to pay down overseas debt.” AMC will borrow money to buy back shares from Wanda.

• Facial recognition and payments
  Alipay face-scanning payment machines expected to be put into use in Chengdu, China’s Sichuan / Xinhua  

• Rental housing woes  
  How China’s plan to develop rental housing backfired / Reuters
  “When President Xi Jinping of China vowed to increase the supply of rental housing last year, millions of young Chinese expected to find homes they would finally be able to afford. But the government’s initiative has had an unintended effect: a surge of property investors into the rental market that has dramatically pushed up prices.”

• Electric car startups
  Shares in China’s Tesla rival Nio soar more than 75% in a day / CNN

• Physics and government policy
  The 2018 Physics World Special Report on China is out now / Physics World

• Bonds
  American ratings giant S&P sees major opportunity in China’s $11 trillion bond market / CNBC
  “S&P Global Chief Financial Officer Ewout Steenbergen said that it’s a good time for his company to enter China as the country has lifted foreign ownership restrictions for credit ratings agencies.”

POLITICS AND CURRENT AFFAIRS:

• Corruption and waste in Xi’an
  Illegal buildings demolished in Xi’an / China Daily
  “An impressive photo showing a cluster of 142 illegally built villas being demolished. A company that was supposed to build a tourism project instead constructed high-end housing intended for sale.”

• Belt and Road to North Korea
  Chinese rust-belt province pushes for new road and rail links to North Korea – and beyond to the South / SCMP
  “A rust-belt industrial northern Chinese province has come up with an ambitious plan to link one of its border cities with South Korea via rail and road through the North. As part of its contribution to China’s global ‘Belt and Road Initiative,’ the province of Liaoning is proposing a rail link from the city of Dandong to the North Korean capital Pyongyang and then on to Seoul and Busan in the South.”

• Russia
  ‘Serious’ rivalry still drives China-Russia relations despite improving ties / CNBC
  “‘What’s below the surface is serious geopolitical competition,’ Robert Kaplan of the Center for a New American Security said on the sidelines of the Singapore Summit.”

• Venezuela
  China says promise of more money for Venezuela part of ‘mutually beneficial cooperation’ / SCMP
  Venezuela sells larger oil stake to China, but Beijing makes no mention of new funds / Reuters via Globe and Mail

• Border tensions with India
  Panel expresses concerns over China’s inconsistencies on boundary issue / Economic Times of India
  An Indian parliamentary group recently released a report on India-China ties, which expresses “concern over Beijing’s inconsistencies in adhering to principles agreed by the Special Representative (SR) mechanism that is aimed at addressing protracted boundary dispute.”

• Corruption and air safety in Hong Kong
  New Hong Kong airport luggage rules ‘great danger’ to security, cabin crew say / SCMP
  “Luggage rules at Hong Kong airport believed to have been secretly relaxed to beat a lawsuit concerning the daughter of the city’s former leader Leung Chun-ying should be reinstated, a local flight attendants’ union said on Friday.”

• Hong Kong dissent and stamping it out
  The year the gloves came off / Inside Story
  Duncan Hewitt writes, “Despite opting for a less confrontational chief executive, Beijing has tightened its grip in Hong Kong.”
  Unsafe harbor: Shrinking space of free expression in Hong Kong / Carnegie Council
  Hong Kong pro-independence party has not submitted defense against gov’t ban, says convener Andy Chan / HKFP
  “Chan was given until 5pm on September 14 to make his case to the government.”

SOCIETY AND CULTURE:

• Stolen relics
  Buddha statue pulled from Sotheby’s auction on suspicion it may be from China Unesco site / SCMP
  “An intricately carved limestone Buddha head was removed from a Sotheby’s auction in New York this week, after evidence emerged that it may have originated from a Unesco heritage site in China. Investigations are underway to determine if the sculpture is indeed one of the 100,000 statues from the ancient Buddhist Longmen Caves.”

• Abuse at schools
  ‘Please, sir, I want some more’: Chinese school caught feeding pupils nothing more than half a bowl of noodles / SCMP
  “After apparently receiving a tip-off, the father of one of the 300 children at the Dacao Primary School in Shangshui, Henan Province, shot a video that showed pupils were being given nothing more than half a bowl of plain noodles.”

• On bullying — Chinese writing in translation
  <School dropout do-over / Chinarrative Newsletter
  This newsletter issue, a translation of “the first installment of a story by reporter Qiu Yuanting [of the Southern People Weekly]…recounts the difficulties that Chinese teenager Jiang Bo encountered — including bullying, and mental and physical abuse at the hands of teachers — as he attempted to navigate the country’s public school system.”

• Sexual harassment
  When will China implement laws to combat sexual harassment? / Aljazeera
  Katrina Yun looks at the context of a sexual harassment law that “could be years before it’s implemented.”

• Scams
  Beware of fake police officers online, Hongkongers warned, after Singaporeans lose hundreds of thousands in romance ruse / SCMP

• Strange jobs
  The man who gets paid to cry / Sixth Tone  
  “You’d be hard-pressed to find Li Silin’s occupation listed at a job fair, or even on most people’s résumés. This is because the singer spends his days with the dead, a crier-for-hire at funerals.”

VIDEO OF THE DAY

NYFW feature — Liu Yong: Chinese fashion designers should showcase their work to the world

This year’s New York Fashion Week featured many Chinese fashion designers. I spoke with Liu Yong, who created the brand DaKun, and asked where he draws his inspiration from.

Videos published on The China Project this week:

• Teachers’ Day in Zhengzhou

• A girl, a bus, and a popsicle in Kunming

• Chinese man invents crab-shaped manned vehicle

ON SUPCHINA

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Chinese Corner: China’s disgruntled ‘middle class,’ public bathing, and how a meme is born

In this week’s Chinese Corner: Who, exactly, is the Chinese middle class?; the bizarre appeal of “1818 Huangjinyan,” which birthed a meme; the bittersweet history of Coca-Cola in China; and how public baths divide northern and southern China.

China Sports Column: Wayne Gretzky to drop the puck at Saturday’s Flames-Bruins NHL China Games

The Great One, Wayne Gretzky, will drop the puck at the NHL preseason game between the Calgary Flames and the Boston Bruins on Saturday afternoon at Shenzhen’s Universiade Sports Center. He’s in China as a global ambassador for the KHL — Russia’s sprawling Kontinental Hockey League. Also in this week’s China Sports Column: Wang Shuang scores in her PSG debut, French ski maker Rossignol enters China, and the ascendant Wangs of women’s tennis.

Kuora: Chinese food in America doesn’t have to be an abomination

There are all sorts of variations on Americanized Chinese food, and some of it is abominable — a real insult to the cuisine from which it is putatively derived. But it doesn’t have to be that way.

‘It is remarkable to see people so resilient’ — An Ping and the class of ’77

An interview with An Ping, who has had a remarkable career as a journalist, as an Airbus marketer of jet planes to China, and most recently as the organizer of a program, “Understanding China,” which has taken dozens of influential American journalists to China for the first time.

Sinica Podcast: China’s ‘reliable friendship’ with Pakistan, explained by Andrew Small

Andrew Small, senior transatlantic fellow at the German Marshall Fund, explains China’s “all-weather” friendship with Pakistan, focusing on how Sino-Pakistani ties have been impacted by the recent election of Imran Khan to prime minister, Pakistan’s economic difficulties, and the numerous projects that comprise the China-Pakistan Economic Corridor, or CPEC — one of the most important components of China’s Belt and Road Initiative.

• Subscribe to the Sinica Podcast via Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed into your favorite podcast app.

TechBuzz China: Is WeChat Bulletproof?

Ying-Ying Lu and Rui Ma talk about the new messaging app, Bullet Messenger, which took the Chinese internet by storm and reached 5 million registered users in just 11 days. The key question: Is this a true challenger to WeChat? Matthew Brennan offers expert analysis, while Ying-Ying and Rui point out the importance of Bullet’s angel investor, Luo Yonghao.

• Subscribe to TechBuzz China on Apple Podcasts, Overcast, or Stitcher, or click here for the RSS feed.

The Caixin-Sinica Business Brief, episode 62

This week on the Business Brief: The regulatory hold-up on new video games in China, a billion-dollar plastic surgery startup, and, the case of the pole-dancing kindergarten principal.

• Subscribe to the Business Brief on Apple Podcasts, Overcast, or Stitcher.

PHOTO OF THE DAY — FROM SUPCHINA PHOTO CONTEST

Running boy

This photograph, taken in April 2018, shows a young boy — the son of a member of an all-women’s handicraft cooperative in the Sanjiangyuan region — sprinting toward a temple on the hill. Sanjiangyuan (三江源 sānjiāngyuán) or “source of three rivers” is an area of the Tibetan Plateau in Qinghai Province, which contains the headwaters of the Yellow, Yangtze, and Mekong rivers.

—Hannah Wilson

Click here to view this photo on TheChinaProject.com. The grand prize winner of the photo contest will be announced on September 21!