China to buy 300 Airbus planes despite Macron’s grumbling

Dear Access member,

Below are three announcements about upcoming events. Scroll down for today’s news, and simply reply to this email to give me feedback.

—Jeremy Goldkorn, Editor-in-Chief

Women’s Conference: Only 6 days left for early-bird tickets!

We are hosting our third annual The China Project Women’s Conference in New York on May 20, 2019. It’s a conference about business, technology, and finance in the U.S.-China sphere with an all-female lineup of star panelists.

If you’d like to attend the conference, buy your tickets soon, as early-bird prices (a 25 percent discount!) only run until March 31. As an Access member, be sure to claim your additional 10 percent off any ticket with the promo code SCWCACCESS2019.

Also, this year, we are once again going to honor The China Project Female Rising Stars for recognizable professional success in the early years of their career, one in business and one from the nonprofit sector. Please submit your nominations before the deadline of April 5 to events@thechinaproject.com. Click here for more information and for nomination criteria.

Howard French, live in New York with Sinica

If you’re in New York on April 3, please join me and Kaiser Kuo for a special live taping of the Sinica Podcast with Howard W. French of Columbia University. French is a career foreign correspondent and the author of five books, including three works of nonfiction, a work of documentary photography, and a forthcoming memoir of his life in journalism.  

The Taiwan Relations Act and Future of U.S.-Taiwan Relations

Our friends at the American Mandarin Society are hosting a Chinese-language policy lecture on Friday, March 29, from 2 p.m. to 3 p.m. at the Stimson Center, featuring Su Chih-Hsuan (蘇志軒 Sū Zhìxuān), a specialist from Taiwan’s Ministry of National Defense and a visiting fellow at CSIS.

—Jeremy Goldkorn and team

1. Airbus scores big even if Macron does not like Belt and Road

After persuading Italy to join the Belt and Road Initiative (BRI), Chinese President Xí Jìnpíng 习近平 and his entourage are in France. Reuters reports that “France signed 15 business contracts with China worth billions of euros on Monday, including a 300-plane order with Airbus and a 1 billion euro contract for EDF to build an offshore wind farm in China.”

• The Airbus order “was the most lucrative of the deals unveiled in Paris, with a French presidency official saying it was worth about 30 billion euros ($33.94 billion).”  

• “France’s Fives and China National Building Materials Group signed a 1 billion euro ($1.13 billion) deal to cooperate on energy savings in developing countries, [and] shipping line CMA CGM and China State Shipbuilding Corporation signed a 1.2 billion euro ($1.36 billion) deal to build 10 container ships.”

• French poultry exports are welcome in China again: An embargo imposed that followed bird flu outbreaks in France was lifted.  

But it’s not all champagne and smiles for Xi in Europe:

• Despite the deal with Italy, the Washington Post points out that “elsewhere in Europe, brows are getting all the more furrowed,” noting French President Emmanuel Macron’s recent comments about “European naivete” over Chinese intentions and the risk of European nations becoming “vassal states.”

• “The EU’s budget commissioner, Günther Oettinger, proposed on Sunday giving the bloc the right to deny Chinese-funded infrastructure deals in Europe if they don’t serve the EU’s common interests,” reports Deutsche Welle. He said this the day after Italy signed up to BRI.

• “Politically, geopolitically, I deem (it) really unwise from the Italian government to take such a decision without coordination with the European Union and our allies,” Italy’s former prime minister Paolo Gentiloni told CNBC.

• “Italy’s agreement with Chinese President Xi Jinping to join the Belt and Road development project is triggering new tension between the anti-establishment Five Star Movement and its rightist coalition partner the League,” reports Bloomberg (porous paywall).

—Jeremy Goldkorn

2. Trade war and Huawei updates

Here are the most important updates from the weekend on U.S.-China relations, Huawei, and related topics:

• Senior Chinese politicians lined up to present “an international image of China as a country moving in the direction of greater economic openness” at the China Development Forum, the New York Times reports (porous paywall). NYT reporter Keith Bradsher notes that the promises had been made “many, many times before,” but were nonetheless notable, “as they come right before a push for a trade deal with the United States.”

• First Germany, then Israel: The Trump administration continues to warn allies that it will pare back intelligence sharing if countries use Huawei equipment. Axios reports in an interview with Secretary of State Mike Pompeo.

• A third U.S. navy transit through the Taiwan Strait in three months happened over the weekend, according to the Wall Street Journal (paywall).

• New Zealand PM announces first trip to China: Jacinda Ardern will travel to China on March 31 and have one full day of meetings on April 1, the SCMP reports. The trip was reported in February to be delayed due to frictions over Huawei, but on March 11 was confirmed to still be in the works. It is now shorter than originally anticipated due to the terror attack in Christchurch.

• Huawei spends at least $300 million annually on academic partnerships, company board member William Xu revealed to the Financial Times in an interview (paywall). In recent months, universities including Oxford and UC Berkeley have announced that they have stopped accepting new funding from Huawei.

—Lucas Niewenhuis

3. The Sensenet data hack

From the latest ChinaAI newsletter, which features translations of Chinese writing on artificial intelligence:

Last month, a data leak revealed that a Chinese facial-recognition company called Sensenets had collected 6.7m GPS locations of 2.6 million people (almost all in Xinjiang) in one database in a 24-hour period, according to security researcher Victor Gevers, who found the database.

Obviously this discovery struck a chord, and it was covered in high-level forums such as the Financial Times and Washington Post editorial board. This week’s 6000-word+ translation of an investigative report by Chinese S&T media platform Jiqizhixin represents the best Chinese-language reporting on the case. It’s not without flaws — any mention of Xinjiang is glaringly absent — but…it [gives] insights that I haven’t seen in any English-language coverage of the case.

Questions addressed in the translated text and brief summaries of their answers include:

What was the nature of the leaked data?

Not only “stills from security camera footage with frames around faces of interest,” the leak included personal identity information.

Where did the data come from?

A researcher “believes that because there was ID card data involved, ‘there is a large probability that this flowed out of the public security system.’” Another engineer said, “There’s also a possibility the data came from other sources (hotels, banks, etc.) that collect user identity information, which then gets sold in underground markets.”

—Jeremy Goldkorn

4. Nana Ou-Yang doubles down on pro-mainland China comments: ‘I love my country’

Nana Ou-Yang 欧阳娜娜, the teen Taiwanese artist who was nearly cancelled by Chinese internet users last week due to her perceived ambiguous position on Taiwan’s relationship with mainland China, has gone further to align herself with Beijing’s views on Taiwan.

On March 23, Chinese Movie Report 中国电影报道, a TV program that airs on the state broadcaster CCTV, released an interview clip with Ou-Yang, in which the 18-year-old stresses her love for mainland China and reiterates her political stance as an opponent of Taiwan’s independence.

Click through to The China Project for more details.

—Jiayun Feng

—–

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:

• Agricultural drones
  China’s DJI targets agriculture as consumer drone sales slow / FT (paywall)
  China’s leading dronemaker “sold 20,000 agricultural drones for spraying pesticides in China last year, and about 2,000 in Japan and South Korea. That was double the amount it sold in 2017, said Yasha Chen, sales director of the company’s agriculture department.”
  Drone pilots in demand as China’s farmers age / SCMP
  “Demand for agricultural drone pilots has risen as the technology matures, enabling a skilled operator to cover more acreage than human effort ever could. It is also driven ironically by the shortage of manpower in the countryside.”

• Tencent and Naspers
  Naspers to spin off Tencent stake in $100bn+ Europe listing / FT (paywall)
  “African media group plans to list international assets on Euronext in Amsterdam.”
  Tencent shareholder Naspers plots Euronext e-commerce IPO / Reuters
  “Founded more than 100 years ago in the Stellenbosch winelands of South Africa, Naspers has transformed itself from a newspaper publisher into a US$100 billion empire, thanks to its one-third stake in Tencent. The stake is a money spinner for the group but has also become a headache for Chief Executive Bob van Dijk, because it dwarfs Naspers’ own market capitalization by almost 30 percent.”

• The Sci-Tech Innovation Board — STIB?
  China’s Nasdaq-style high-tech board unveils first group of companies for IPOs / TechNode
  “The Shanghai Stock Exchange unveiled last Friday the first group of nine companies that were eligible to file for initial public offerings on China’s new Nasdaq-style high-tech board, the Sci-Tech Innovation Board (STIB). The list consists of four electronic equipment makers, three high-end equipment manufacturers, and two companies from emerging industries such as new material and biology.”

• Private tutoring boom
  China’s private tutoring industry is booming despite economic slowdown / SCMP
  “Amid China’s economic downturn, its booming education industry has become a bright spark in the gloom thanks to surging demand for after-school learning, resulting in an influx of investment capital.”

• Electric cars and ride hailing
  Gaming firm The9 partners with Faraday Future to run EV business in China / TechNode
  “After a series of furloughs, pay cuts, and a plant closure, embattled electric vehicle (EV) maker Faraday Future appears to have seized on a second life. A Chinese gaming company plans to invest millions of dollars to be the sales agent for its upcoming vehicle model V9.”
  China’s already driving affordable electric SUVs to rival Tesla’s highly anticipated Model Y / Quartz
  Alibaba, Tencent, car makers set up $1.5 billion China ride-hailing venture / Reuters

• Luckin Coffee
  From jail to java: How Luckin’s CMO is hacking China’s coffee market / TechNode
  “Luckin CMO Yáng Fēi 杨飞 is an unlikely star: in five years, he’s gone from prison to C-suite. In 2015, Yang was sentenced to 18 months’ imprisonment (in Chinese) for violations of China’s advertising law… Yang supervised a systematic whitewash of negative reviews about his firm’s clients when he was head of a local marketing outfit.”
  See also on The China Project: A billion-dollar coffee company and the woman behind it.

• Fracking and drilling
  China’s Sinopec to develop new shale gas field at Weirong in Sichuan / Reuters
  “The state-run company said the field will tap a proven reserve equivalent to 124.7 bcm of gas at Weirong in the southwestern province of Sichuan… This marks its second major shale gas discovery after a flagship development at Fuling in the Chongqing region, situated in the same geological basin of Sichuan.”
  China’s big oil aims spending boom at old wells to heed call / Bloomberg (porous paywall)
  “China’s oil giants aim to spend the most in five years in pursuit of higher energy output.”

• Brazen IP theft
  Fake Range Rovers barred from sale in China / Bloomberg (porous paywall)
  “A Chinese court ordered a local carmaker to stop selling a copycat version of the Range Rover Evoque in China, a rare legal victory for foreign companies locked in intellectual property disputes with local firms.”

• Airlines: Cathay feeling confident after profitable 2018?
  Cathay Pacific agrees deal to take over budget airline HK Express, sources say / SCMP

• Pilot training schools in Australia
  ‘It’s happening everywhere’: China buying Australian flying schools / 2GB
  “Virgin Australia is currently in talks with a Chinese conglomerate to open a flight school in Tamworth for both Chinese and Australian pilots. Businessman and aviation expert, Dick Smith tells Alan Jones he’s seeing continued Chinese ownership across the entire Australian aviation industry.”

POLITICS AND CURRENT AFFAIRS:

• Xinjiang internment camps
  “Hanification”: Uyghur children cut off from their roots / Bitter Winter
  “As Uyghur parents are taken away for re-education, children are surrounded by barbed wire, forbidden to speak their language.”
  U.S. official denounces ‘choreographed’ visits to China’s Xinjiang / Reuters via Yahoo
  “A U.S. government official, asked by Reuters if the U.S. ambassador to China, Terry Branstad, had been invited to visit Xinjiang, said there were no meetings or visits to announce.”
  China says Xinjiang trips very successful, slams U.S. ‘slander’ / Reuters
  “Trips organized by China’s government to the western region of Xinjiang for diplomats and reporters have been very successful at showing people the true situation there, the foreign ministry said on Monday, denouncing U.S. criticism as ‘slander.’”
  Opinion: China can’t prettify the human rights catastrophe in Xinjiang / Washington Post by editorial board

• Malaysian rail project: Will they, won’t they?
  China to shave US$2.4 billion off cost of Malaysia’s East Coast Rail Link. But will it be enough? / SCMP
  “The Chinese government has offered to cut 10 billion ringgit ($2.45 billion) off the price of Malaysia’s controversial East Coast Rail Link in an effort to get the project back on track before world leaders gather in Beijing for a summit on the ‘Belt and Road Initiative.’ Whether that will be enough to gain a green light for the long-stalled project is anyone’s guess.”

• Debt diplomacy or constructive financial assistance?
  Panelo: Nothing wrong with using PH resources as China loan collateral / CNN
  “Filipino presidential spokesperson Salvador Panelo said he sees nothing wrong with offering natural resources as ‘collateral’ to loan agreements with China.”
  ‘Not a trap’: Chinese minister defends China’s financial assistance / Khmer Times
  “China’s Vice Minister of Foreign Affairs Kǒng Xuànyòu 孔铉佑 on Friday defended his government’s investment policy in Cambodia, refuting claims that China’s financial assistance comes with strings attached.”
  Pakistan receives $2.2 billion loan from China / Samaa Digital
  “This is a part of the government’s successful multi-pronged strategy to ensure stability in its Balance of Payments (BOP), including curtailing current account deficit, improving remittances and ensuring adequate foreign exchange financing.”
  Ethiopia in talks with China to ease ‘serious’ debt woes tied to railway / SCMP
  “Ethiopia is renegotiating billions of dollars in loans from Beijing for a railway that links the Ethiopian capital to neighbouring Djibouti, to avoid being buried by ‘serious’ debt woes tied to China’s controversial infrastructure push, Ethiopia’s top Beijing envoy said.”

• Measles in Hong Kong
  More measles cases likely to hit Hong Kong, disease expert warns / SCMP
  “The Centre for Health Protection has recorded 20 measles infections so far this year — against 15 in all of 2018 — five of them involving airport and airline staff. The outbreak started early this month, when a Cathay Pacific Airways flight attendant [at Hong Kong International Airport] displayed symptoms such as a fever and a rash.”

• Maps printed in China for export shredded
  Pulp friction: Chinese city shreds 29,000 maps showing Taiwan as a country / SCMP
  “More than 800 boxes containing 28,908 maps destined for export were shredded at a government-designated secret site in Qingdao, Shandong province, late last week. ”

• Former Interpol chief’s wife fears kidnapping
  Missing ex-Interpol chief’s wife: ‘I’m afraid China will kidnap me and my boys’ / France 24
  A TV interview with Grace Meng, the wife of former Interpol president Meng Hongwei, who was disappeared by the National Supervision Commission last October. She says she has not heard from her husband since he vanished six months ago, and that she has been “the subject of kidnapping attempts by Chinese agents.”

• Jiangsu pesticide explosion
  Death toll from China pesticide plant blast rises to 78 / Reuters
  “The death toll from a massive explosion last week at a pesticide plant in eastern China rose to 78 on Monday (Mar 25), with 13 people listed as being critically injured, as the government again pledged stricter safely controls.”
  On The China Project Access last week: More than 60 dead in pesticide factory explosion.

• Suppression of religion: The case of Wáng Yí 王怡
  For prominent Chinese church leader, detention is a test of faith / NYT (porous paywall)
  “The charges against Mr. Wang and his wife — inciting to subvert state power — typically result in lengthy prison sentences. The same charge was used to sentence Liu Xiaobo, a dissident, to 11 years in prison in 2009.”

• Chinese student in Canada kidnapped
  Chinese student Wangzhen Lu kidnapped in Canadian car park / BBC
  “A 22-year-old Chinese student has been kidnapped by four men with a stun-gun, police in Canada say. Three men grabbed Wangzhen Lu and forced him into a van in an underground car park in Markham on 23 March.”

• Taiwan: 1992 Consensus watch
  Senior Chinese officials give Taiwanese politician Han Kuo-yu the red carpet treatment on ‘non-political’ tour of mainland / SCMP
  “Possible KMT presidential candidate [韓國瑜 Hán Guóyú] insists his visit is not intended to be political, but he has been welcomed by the head of Beijing’s Taiwan Affairs Office.”

• How police handle juvenile suspects
  Guangxi police investigating teenager’s false detention / Sixth Tone
  “Lawyers say police violated laws guaranteeing the underage suspect’s civil rights.”

SOCIETY AND CULTURE:

• Fashion and design
  The savvy creative tinkering with high-tech fashion / Sixth Tone
  “Kitty Yeung has the magic touch when it comes to combining technology and fashion, but how will the market respond?”

• No gay bits in Bohemian Rhapsody
  Bohemian Rhapsody opens in China, minus all the gay bits / BBC
  “Oscar-winning Freddie Mercury biopic Bohemian Rhapsody was released in China on Friday, but references to the Queen singer’s sexuality and AIDS diagnosis were censored.”

• Mandarin vs. English
  Will Mandarin be the next global language? / Asia Times
  See also on The China Project:

  • The Chinese scientist and the foreign tongue by Yangyang Chen

  • The actual worth of Chinese language proficiency by Frankie Huang

  • Why Chinese students don’t need ‘English’ names by Rebeka Fergusson-Lutz

  • Chinese people don’t need to be saved from their English names by Jing Xuan Teng

• Loving China after being expelled
  Why I still love China, even if it hates me / Chengdu Living
  Josh Summers, who spent over 10 years living in China’s northwest Xinjiang region and was unceremoniously booted out, still loves the place.

• Teaching Chinese in Africa
  The woman bringing Mandarin to Uganda / BBC
  “The first 30 teachers have now completed their“Wang Li Hong Sooma, who moved to East Africa from China more than two decades ago, is determined to teach Ugandans how to speak Mandarin. She and her Ugandan husband, Ayub Sooma, are organizing nine-month intensive courses for secondary school teachers to learn China’s dominant language.”

FEATURED ON SUPCHINA

Kuora: China has grand ambitions, but these factors are holding it back

What are the biggest problems, e.g., economic, social, cultural, et cetera, facing China as it redevelops into a world power? The below is Kaiser Kuo’s quick-and-dirty — and incomplete — list. Please note that it conveys a pessimism about the country’s future that isn’t an accurate reflection of Kaiser’s actual outlook, which falls a good bit short of blithely optimistic but is nonetheless not utterly bleak.

SINICA PODCAST NETWORK

Sinica Early Access: Samm Sacks on the U.S.-China tech relationship

This live Sinica Podcast recorded in New York on March 6 features Samm Sacks, Cybersecurity Policy and China Digital Economy Fellow at New America. She and Kaiser Kuo discuss the many facets of U.S.-China technology integration and competition, touching on topics including data security, artificial intelligence, and how to build a “small yard with a high fence.”

• Sinica Early Access is an ad-free, full-length preview of this week’s Sinica Podcast, exclusively for The China Project Access members. Listen by plugging this RSS feed directly into your podcast app.

PHOTO OF THE DAY

Colorful autumn scenery

When fall arrives at Baimaxueshan Mountains National Park in Yunnan Province, larch tree leaves turn yellow. The national park is known for its massive snow-covered mountains and deep canyons. Photo by Michael Yamashita.