Saying no-no to win-win

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Dear reader,

“At 69, P.R.C. marches steadily toward brighter future” is one Xinhua News Agency story that gives you the tone of the Party talking points for today’s celebration of National Day, the annual celebration of the founding of the People’s Republic. You may prefer to join the People’s Daily and revisit “10 classic quotations on patriotism” (in Chinese) from Xí Jìnpíng 习近平.

But there’s also real news happening. We summarized the big stuff below.

1. Saying no-no to win-win

“In the United States, competition is not a four letter word.” So said Matt Pottinger, senior director for Asian affairs on the American National Security Council (NSC) at a weekend event at the Chinese Embassy in Washington, D.C.

• Pottinger speaks Mandarin, and was a China correspondent for the Wall Street Journal. He left journalism to join the U.S. Marines, where he did tours in both Iraq and Afghanistan. He joined the NSC last year, at the Trump administration’s invitation.

• Chinese ambassador Cuī Tiānkǎi 崔天凯 gave a speech at the event that the South China Morning Post characterized as “highlight[ing] the importance of cooperation.”

• Pottinger made less friendly noises: “We at the Trump administration have updated our China policy to bring the concept of competition to the forefront. It’s right there at the top of the president’s national security strategy.”

• To justify the change in language, Pottinger quoted Confucius in crisp, clear Mandarin, earning a few approving giggles from the audience: “If names cannot be correct, then language is not in accordance with the truth of things. And if language is not in accordance with the truth of things, affairs cannot be carried on to success” (名不正，则言不顺；言不顺，则事不成 míng bùzhèng, zé yán bù shùn; yán bù shùn, zé shì bùchéng).

• You can watch excerpts from both officials’ speeches on YouTube here.

That short video is an interesting contrast. Cui Tiankai’s speech sounds like any official Chinese boilerplate from the last few years, all talk of win-win, cooperation, and mutual understanding. Pottinger quoting Confucius in response is really just a highfalutin way of calling BS on the old clichés.

For more on U.S.-China tensions and the trade war, see our regular update below.

2. Healthcare fury: ‘Attacks on doctors are so common that they have a name’

“I’ve always been struck by how difficult it is for people to see a doctor in China,” tweeted New York Times journalist Sui-Lee Wee 黄瑞黎. “So I spent several months standing in line outside hospitals, talking to doctors who have been stabbed and interviewing officials who are trying to change the system.”

• The result is this report: China’s health care crisis: lines before dawn, violence and ‘no trust’ (porous paywall). The package includes a nine-minute video captioned “Homemade cancer drugs, violence in hospitals, doctor shortages: We take you inside China’s broken health care system to reveal how dire the situation is for over a billion people.”

• Violence against doctors is a particularly disturbing sight resulting from the desperation of patients in China: The Times notes that “attacks on doctors are so common that they have a name: ‘yi nao,’ or ‘medical disturbance’” [医闹 yīnào].

• “Healthy China 2030,” a government blueprint, was unveiled in 2016 and outlines the first long-term official effort in the PRC to address problems such as unequal healthcare access.

• The country has a long way to go: To take one baseline statistic, “China has one general practitioner for every 6,666 people, compared with the international standard of one for every 1,500 to 2,000 people, according to the World Health Organization.”

• But GPs don’t feel respected in China: “Among nearly 18,000 doctors, only one-third thought that they were respected by the public, according to a 2017 survey.”

• See also on The China Project: What ails China’s healthcare system? Roberta Lipson has a detailed diagnosis.

• Also in the news: HIV/AIDS: China reports 14% surge in new cases / BBC
  “More than 820,000 people are affected in the country, health officials say. About 40,000 new cases were reported in the second quarter of 2018 alone. The vast majority of new cases were transmitted through sex, marking a change from the past.”

3. A hooligan, or a journalist denied free speech?

This morning, I woke to a tweet from Enoch Lieu, a volunteer at Britain’s annual Conservative Party Conference (CPC):  

First day of #CPC18, managed to get slapped in the face twice, literally. I was helping in Conservative Party Human Rights Commission and Hong Kong Watch fringe event on Hong Kong, a reporter from Chinese state-owned CCTV shouted from her seat. When I asked her to leave, she refused and assaulted me.

The reporter is Kǒng Línlín 孔琳琳 (she’s on Twitter and Weibo). Kong has apparently been arrested. For more on this story:

• Video footage of Kong’s outburst: UK Conservative Party member ‘assaulted by Chinese state TV reporter’ during Hong Kong event at conference, via Hong Kong Free Press.

• The Chinese Embassy’s response, via CGTN (aka CCTV): “The Human Rights Committee of UK Conservative Party should stop interfering in China’s internal affairs and stop meddling in Hong Kong affairs. The organizer of fringe event should apologize to the Chinese journalist.”

• CGTN also complained: China’s state broadcaster protests violation of journalist’s rights in UK.

• Chinese social media responses — such as “I love my country, and this CCTV journalist is great” — and other reactions are covered in this What’s on Weibo post.

• Other sources: BuzzFeed, SCMP.

—Jeremy Goldkorn

4. Trade war and U.S.-China relations: Day 88 is not a lucky one

It has been 88 days since the start of what we somewhat cynically dubbed the “first great Sino-American trade war of the 21st century” began.

Nearly three months into the conflict, it is clear that it is indeed great in scale, and may not be the last large-scale trade-related dispute between the countries. For example, the South China Morning Post reports that on intellectual property, one of the most concrete and long-standing points of economic tension, the U.S. and China are still “speaking different languages” and not really responding to what the other side is saying.

But the bigger narrative emerging out of the trade war is how tariffs are really just one piece of a much broader competition between the U.S. and China, which is playing out in more and more domains. As we note at the top of this newsletter, Trump administration officials such as Matt Pottinger are publicly talking about a reorientation of U.S. policy toward competition with China. And we wrote about the technological competition part of this in our Made in China 2025 explainer, which has a new video companion piece.

Here’s a rundown of the news in the trade war and U.S.-China relations.

South China Sea and souring military relations

The U.S.-China Diplomatic and Security Dialogue, scheduled originally for mid-October, has been canceled, the New York Times reports (porous paywall).

• The cancellation “showed how quickly the tensions over an escalating trade war have infected other parts of the relationship, particularly vital strategic concerns including Taiwan, arms sales and the South China Sea,” the Times writes.

• We are not sure exactly what prompted the cancellation, and it was likely a combination of factors, though the hundreds of billions of U.S. tariffs in the trade war is actually less a hot button for Beijing than the $330 million in spare fighter jet parts planned to be sold to Taiwan by the U.S.

• South China Sea tensions remain high, and two days after the Times says American officials learned of the canceled talks (Friday), the U.S. went forward with two Navy warship patrols near Chinese-claimed islands in the sea (on Sunday — Wall Street Journal — paywall).

• American security experts chattered on Twitter over the weekend that evidence is emerging that, as Rosh Doshi puts it, “a tepid US response that fell below PRC expectations may have emboldened Beijing rather than stabilized the region” during the Obama administration.

• For more on the South China Sea, the Asia Maritime Transparency Initiative has made an interactive map outlining every oil and gas source, stakeholder, and sovereignty claim in the region. Also see in the SCMP: Beijing faces growing challenges to its South China Sea claims.

Don’t talk about economic troubles in China

China is grappling with more economic headwinds, partly as a result of the trade war. Two measures of manufacturing showed declines in September, indicating pressure on exports.

• “The official manufacturing purchasing managers index (PMI) stood at 50.8 in September versus 51.3 in August, lower than the median estimate of 51.2 in a Bloomberg survey of economists,” according to a Bloomberg report via Caixin.

• “The Caixin manufacturing PMI, which better reflects sentiment among smaller, private firms, declined to 50 from 50.6, the lowest since May 2017,” the same report notes.

But media in China have to be careful when reporting numbers like these: The New York Times reports (porous paywall), “A government directive sent to journalists in China on Friday named six economic topics to be ‘managed.’” The topics named:

—Worse-than-expected data that could show the economy is slowing.
—Local government debt risks.
—The impact of the trade war with the United States.
—Signs of declining consumer confidence.
—The risks of stagflation, or rising prices coupled with slowing economic growth.
—“Hot-button issues to show the difficulties of people’s lives.”

Here are a few ways the government is trying to boost the economy, according to three reports from Reuters:

• “China’s central bank pledged to maintain its ‘prudent and neutral’ monetary policy and to use multiple tools to keep liquidity ample,” Reuters says, noting that the central bank has already “cut banks’ reserve requirements three times this year to inject more liquidity, with further reductions widely expected.”

• “China has widened income tax exemption on reinvested profits for foreign firms, the Finance Ministry said on Sunday, to try to boost foreign investment amid trade tensions.”

• “China will cut import tariffs on textile products and metals, including steel products, to 8.4 percent from 11.5 percent, effective Nov. 1, the finance ministry said on Sunday.”

Other trade war and U.S.-China news:

• Kudlow: No trade deal with China is ‘imminent’ / CNBC

• Trump, China’s Xi may meet at G20 summit – White House adviser / Channel NewsAsia

• US ambassador accuses China of ‘bullying’ with ‘propaganda ads’ / Reuters via Economic Times of India

• With Donald Trump bringing xenophobia back, it’s an awful time to be a Chinese abroad / SCMP

• On the impact of China tariffs: Is this a dead cat bounce? / China Law Blog
  “For now at least our China practice and our international trade law practice are both booming and this state of affairs holds true for every China lawyer, every manufacturing lawyer and every international trade lawyer with whom I have spoken in the last three months. An old adage about lawyers is that we do well when times are good and when times are bad, just not when things are staying the same.”

• China welcomes fair competition, does not favor state companies over private sector, foreign firms, government adviser says / SCMP

• U.S.-China ties more conflicting than cooperative: MAC / Focus Taiwan
  “Relations between the United States and China will face more issues of conflict than of cooperation, participants at the latest consultative meeting held recently by Taiwan’s Mainland Affairs Council (MAC) agreed, according to the minutes of the meeting.”

• Amid trade war, businesses in China urged to return: Premier Lai / Focus Taiwan

—Lucas Niewenhuis

5. Whither Tencent?

WeChat user growth must be slowing — it’s difficult to add new customers when nearly the whole population already uses the service.

• Government restrictions and crackdowns on video gaming are choking revenue and hampering future growth of Tencent’s most profitable service.

• But brave is the person who would bet against Tencent. If you’re following the Shenzhen-based company, here is today’s news: Tencent announces a restructuring plan as challenges rise / DealStreetAsia; Tencent says no plans for layoffs as company undergoes strategic upgrade / TechNode.

• Also see: Chinese tech has taken hefty blows but giants like Tencent and Baidu are not out for the count / CNBC

—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

BUSINESS AND TECHNOLOGY:

• Traditional medicine
  Traditional Chinese medicine closes in on US$50 billion market with long-awaited nod from WHO / SCMP
  “TCM, which originated in ancient China and has evolved over the years, is set to receive its first-ever official endorsement from the WHO next May at the World Health Assembly when the international public health agency dedicates a chapter to it in its 11th version of the ‘International Statistical Classification of Diseases and Related Health Problems.’”

• Pollution
  China’s heavy polluters warned not to flout winter smog plan / SCMP
  China’s provinces are secretly building coal plants in defiance of the national government / Quartz
  Beijing axes coal and steel production curbs / FT (paywall)

• Alibaba
  Alibaba’s Jack Ma cedes control of key China business licenses / WSJ (paywall)

• Xiaohongshu and cross-border ecommerce
  The Little Red Book is a social e-commerce platform that’s not an e-commerce platform at all / TechNode

• Live streaming
  Briefing: Weibo reported to acquire live streaming platform Yizhibo / TechNode

• Lucky phone numbers, and the prices paid for them
  Telecom operators criticized over exorbitant ‘lucky number’ fees / Sixth Tone

• Bird flu
  China reports H5N6 bird flu case on poultry farm in Guizhou Province / Reuters via Channel NewsAsia

• African swine fever
  China removes restrictions where first African swine fever outbreak found / Reuters via Channel NewsAsia
  “China has removed restrictions on an area in Shenyang, Liaoning Province, where the nation’s first African swine fever outbreak was found last month.”

• Taxes
  Good news coming for Hong Kong workers on mainland as Chinese vice-premier Han Zheng hints at tax exemption / SCMP
  Small Chinese firms seek ‘lessons in survival’ as they brace for impact of social welfare taxes / SCMP
  Push made for overseas income tax exemption for all Hongkongers in mainland China / SCMP

• Hong Kong tourism and transportation
  60,000 visitors from mainland China enter Hong Kong on high-speed rail as MTR Corp chairman Fred Ma predicts people will soon complain station is too small / SCMP
  Why young mainland Chinese tourists in Hong Kong are slogging up 10-story residential building and visiting public housing estate / SCMP
  Pomp, protests and packed high-speed trains as Hong Kong marks China’s National Day / SCMP

• Energy from Russia
  China and Russia eye Mongolian gas route / Radio Free Asia

• Investment
  China’s ‘great wall of capital’ to boost mutual funds / FT (paywall)

• Special treatment for foreign tourists
  Chinese complain as foreigners get free entry to Jiangxi’s top tourist sites / SCMP

• Chinese money in the Philippines
  The winners and losers in Duterte’s China play / by Alvin Camba in SCMP

• Chinese money in Australia
  Meet the Chinese businessmen making waves in Australia / SCMP
  Why China’s richest flock to Australia – even if they’re not always welcome / SCMP

• Accessibility for disabled tourists
  China’s tourism industry must accommodate disabled tourists / Sixth Tone

• Using communist symbols for capitalist purposes
  Managers at Chinese property giant Wanda fired for using Young Pioneers’ red scarf in adverts / SCMP

• Censorship on gaming platform
  Steam restricts users in China from accessing “adult-only content” / TechNode

• Electric vehicles
  Why China’s electric car market is falling short / The Information (paywall)

POLITICS AND CURRENT AFFAIRS:

• Xinjiang and Uyghurs
  Uyghur children strictly supervised / Bitter Winter
  Uyghur editor of state-run magazine commits suicide ‘out of fear’ of detention / Radio Free Asia
  Galym Bokash on Twitter: “‘The first interview’ of the new Chinese ambassador to a Kazakhstani media. Zhang Xiao says the visa problem is one of the major issues he’ll work on. The semi-official predictably doesn’t mention Xinjiang political camps.”
  Prominent Uyghur intellectual given two-year suspended death sentence for ‘separatism’ / Radio Free Asia
  Xinjiang — tackling extremism effectively / Pakistan Today
  Lijian Zhao 赵立坚 on Twitter: “4. Expert: With the elimination of the threat of violence, peace and stability has reemerged throughout the region. Tourism is picking up and the Uyghurs and other minorities can now rise to their true potential.”
  Lijian Zhao 赵立坚 on Twitter (separate link): “5. Expert: Pakistan and other countries plagued by the scourge of terrorism and extremism can emulate some of the effective measures in Xinjiang adopted by China to make the world a more peaceful place.”
  China eyes anti-terror force to protect overseas interests / Reuters
  “China is working to develop a first-class, crack anti-terror force that can operate at home and abroad and protect the country’s overseas interests, a senior Chinese officer said in comments carried by state media on Saturday.”
  China seeks global role for counter-terror forces / FT (paywall)
  Straight outta Xinjiang / China Daily
  China Uighurs: All you need to know on Muslim ‘crackdown’ / BBC

• Academic censorship
  Censored in China / Jamie Metzl
  Metzl, a senior fellow of the Atlantic Council, writes that his talk at an academic conference in China, titled “Why supporting and strengthening the rules-based liberal international order is in the strategic national interest of China and the United States,” was canceled because it had not been cleared by authorities. Then the conference, which he still attended, disturbed him: “Chinese universities are not hotbeds of open dialogue, but this uniformity [of opinion] was greater than in the academic conferences I had previously joined on equally sensitive issues.”
  We need dialogue, not inward-facing conformities: How China censored my speech on the South China Sea / Hong Kong Free Press

• Assault and murder of Chinese tourists in Thailand
  Video captures Thai airport security guard hitting Chinese tourist, prompting government to apologize / SCMP
  “A video clip of a Chinese tourist being hit by an airport guard in Thailand has prompted a flurry of apologies and vows to take action, as the government went into damage control over the incident.”
  Video clip of Chinese tourist being hit by airport guard in Thailand causes stir / AFP via Channel NewsAsia
  New suspect sought in tourist killing / Bangkok Post
  “Police are expecting to wrap up their investigation into the murder of a female Chinese tourist found at a waterfall in Hat Yai district on Sept 20 in the next two weeks.”

• New military tech
  China takes step toward precision warheads for unstoppable nuclear weapon, state media says / SCMP
  “China has tested three types of hypersonic aircraft models at the same time, marking another solid step into the development of hypersonic weapons, state media reported.”
  Will China’s new laser satellite become the ‘Death Star’ for submarines? / SCMP
  “China is developing a satellite with a powerful laser for anti-submarine warfare that researchers hope will be able to pinpoint a target as far as 500 metres below the surface.”

• Taiwan: Elections, the navy, and the UN  
  Taiwan’s bid to tackle ‘fake news’ raises fears over freedom of speech / SCMP
  “Taiwan is considering revising its National Security Act, saying it wants to stop ‘fake news’ it claims comes mostly from mainland China and is aimed at disrupting social order on the self-ruled island and smearing its independence-leaning authorities. But critics and analysts urged the Democratic Progressive Party (DPP) government to think twice before bringing back the ‘thought police’ who were notoriously active trying to silence dissenting voices in Taiwan from 1949 to 1987 under Kuomintang rule.”
  Taiwan Navy to commission two Perry-class frigates next month / Focus Taiwan
  “The Republic of China (Taiwan) Navy next month will commission two Perry-class guided missile frigates it bought from the United States, a Navy official said Monday.”
  Belize speaks for Taiwan’s participation in U.N. / Focus Taiwan
  “Belize, one of Taiwan’s 17 formal diplomatic allies, voiced support on Saturday, the fifth day of the general assembly of the United Nations, for Taiwan to participate in the U.N. system.”

• Student informants
  Informants in the Chinese classroom / China Media Project
  “Teachers hold your tongues. What you say in a Chinese classroom may or may not be held against you. Xǔ Zhuànqīng 许传青, an assistant professor at the Beijing University of Civil Engineering and Architecture, learned this lesson the hard way back in April. She was alleged to have made, during a class on probability theory, unspecified remarks suggesting Chinese people were inferior to Japanese. A notice from the university dated April 4 said Xu had been disciplined as a result of her ‘inappropriate comparisons,’ which were ‘reported by a student after class.’”

• Maldives election aftermath
  China suggests to work with India in Maldives after poll shocker / Economic Times of India
  “China has reached out to India after pro-Beijing Abdulla Yameen lost in Maldives by suggesting that India and China may work jointly in the Indian Ocean archipelago nation and even went on to suggest that the incumbent president lost due to his high-handed policies.”
  China’s Xi tells new Maldives president he wants to deepen cooperation / Reuters

• Xi: The P.L.A. must be ready to fight
  Xi inspects troops ahead of China’s National Day; stresses training, war preparedness / Economic Times of India
  Xi Jinping has frequently said that the P.L.A. needs to be ready to fight and win wars.

• Funeral regulations in Wenzhou
  Officials ban private funeral parties in China’s Zhejiang / Radio Free Asia
  “From October 1, private wakes, which can involve days of chanting monks, the wailing of professional mourners, singers and even strippers, will be banned in certain areas of Zhejiang’s Wenzhou city.”

• Mainland New Confucians
  Ge Zhaoguang, “If horses had wings” / Reading the China Dream
  This is a link for China nerds who follow intellectual history and debates about how traditional Chinese thinking should be adapted for the 21st century. Author Ian Johnson commented on Twitter: “Ge Zhaoguang’s ‘30,000 word take-down of the Mainland New Confucians. The argument is fairly simple, but the footnotes are a tour de force and Ge’s sarcasm is delicious.’ Now in English thanks to David Ownby’s epic translation project.”

• New book on “China’s Grand Strategy from Mao Zedong to Xi Jinping”
  Haunted by Chaos / ChinaFile
  “Drawing on an array of sources, Sulmaan Wasif Khan chronicles the grand strategies that have sought not only to protect China from aggression but also to ensure it would never again experience the powerlessness of the late Qing and Republican eras.”
  For generations of P.R.C. leaders, a world ‘alive with danger’ / ChinaFile

• Wildlife trafficking
  In China, ivory seems to be losing appeal / National Geographic
  “A new survey of more than 2,000 people in China conducted by GlobeScan, a public opinion research firm, and funded by the World Wildlife Fund (WWF), found that 72 percent of respondents would not buy ivory, compared to 50 percent when the poll was conducted last year, before the domestic trade ban went into effect.”
  Vietnamese authorities seize one ton of pangolin scales and ivory smuggled in airline cargo / SCMP

• Dissent in Hong Kong
  Hundreds in Hong Kong protest against tightening control as China marks National Day / Channel NewsAsia
  “More than 1,200 pro-democracy supporters standing shoulder-to-shoulder protested against Beijing’s tightening control.”
  Singapore activist Jolovan Wham on trial for organizing forum featuring Joshua Wong / SCMP

• Australia and the U.K.
  Opinion: In China puzzle, at least Australia knows itself. The UK hasn’t a clue / by Kerry Brown in SCMP

• Fifth World Internet Conference
  SCIO briefing on World Internet Conference / China.org.cn
  “The Fifth World Internet Conference will be held from Nov. 7 to 9 in Wuzhen, Zhejiang Province.”
  China reveals 5th World Internet Conference dates / China Media Project

SOCIETY AND CULTURE:

• Philanthropy: AIDS orphans
  ‘I was lucky, they weren’t’: Why a Wall Street banker quit his high-flying job to help China’s AIDS orphans / SCMP
  “Since 2002, his Hong Kong-registered Chi Heng Foundation has sponsored more than 23,000 Chinese AIDS orphans to go to school, of whom 5,000 have entered university or college, at a cost of more than 200 million yuan (US$29 million).”

• Beautified selfies and cultural differences
  Foreign criticism of iPhone XS’ “beauty filter” stumps Chinese media / TechNode
  “Chinese media outlets are reporting on some user backlash against a perceived skin-smoothing feature on the new iPhones. Coming mainly from English-speaking Apple customers, the complaints say that new models XS and XS Max automatically brush up selfies without users’ consent… For Chinese users, a new, automatic beauty filter in the new iPhones might seem commonplace — it’s others’ backlash that’s surprising.”

• Communist folk heroes
  Chinese idol / World of Chinese
  “Even in China, ‘Iron Man’ is famous. There are now whole websites dedicated to the armored American industrialist-turned-warrior. But in another era, the title belonged to a homegrown hero—a brash, plain-spoken ‘model worker’ and amateur poet named Wáng Jìnxǐ 王进喜.”

• Chinese love letter washes up on Australian shores
  Chinese message in a bottle makes waves in Queensland / BBC
  After being translated, it was revealed to be “a love letter written by a sailor to his fiancée.” (See the original letter on Facebook.)

FEATURED VIDEO EXPLAINER

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Friday Song: ‘I love, therefore I exist’

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Fall color

Fall foliage in Gyarong Valley, in the far west of Sichuan Province.

—Jia Guo