Can China end the opioid war?

Dear Access member,

There’s no April Fools’ joke from us today: World news in 2019 is way too bizarre for us to make up anything that can compete with what passes for reality right now. But I would like to celebrate something else today:

Exactly nine years ago today, Kaiser Kuo and I sat in a makeshift studio in a dirty old apartment building in Beijing with noted China-watcher Bill Bishop and recorded the very first Sinica Podcast. More than 400 shows later, we’re still at it. Here’s the very first show.

—Jeremy Goldkorn, Editor-in-Chief

Women’s Conference Early-Bird Tickets extended to April 15!

The sale of 25 percent off early-bird tickets for our third annual The China Project Women’s Conference in New York on May 20, 2019, has been extended to April 15 — click here to learn more and buy your ticket! As an Access member, be sure to claim your additional 10 percent off any ticket with the promo code SCWCACCESS2019.

—Jeremy Goldkorn and team

1. Beijing vows to blocks fentanyl

“China announced on Monday that it would treat all variants of the powerful opioid fentanyl as controlled substances, making good on a pledge the country’s leader, President Xí Jìnpíng 习近平 made to President Trump late last year,” reports the New York Times (porous paywall).

• China’s export of fentanyl and similar synthetic opioids are “blamed for tens of thousands of overdoses in the United States, [and] has long been a source of tension in relations and has, more recently, become tangled up in the continuing trade war.”

• Many variants of fentanyl and precursors used to make them are already controlled substances in China, meaning their manufacturing is tightly regulated.

• However, new variants have been banned only after a slow review process. So exporters would respond to new regulation by changing the chemical compound just enough so that it was technically not a controlled drug, while losing none of the narcotic power.

• The new rules expand restrictions to all “fentanyl-related substances,” effective May 1. This will, in theory, dramatically slow down the transpacific trade.

• Other reports:

  • China lists fentanyl as controlled substance in US gesture / AFP

  • China changes all fentanyl varieties to controlled substance / AP

  • China offers broad opioid curbs promised to Trump / Washington Post

Other news from the U.S.-China trade war, day 270:

• “China’s State Council said on Sunday that the country would continue to suspend additional tariffs on U.S vehicles and auto parts after April 1, in a goodwill gesture following a U.S. decision to delay tariff hikes on Chinese imports,” reports Reuters.

• “Vice Premier Liú Hè 刘鹤, China’s trade envoy, left for the U.S. on Monday, according to the Ministry of Foreign Affairs,” according to Bloomberg, via Yahoo.

2. Jets across the Taiwan Strait

On March 31, two Chinese air force jets crossed the national maritime border in the Taiwan Strait, which separates Taiwan from the P.R.C.

• “Two PLAAF J-11 jets violated the long-held tacit agreement by crossing the median line of the Taiwan Strait. It was an intentional, reckless and provocative action. We’ve informed regional partners and condemn China for such behavior,” the Taiwan Ministry of Foreign Affairs said, according to CNN.

• “Chinese jets flew across the center line frequently in 1999,” said Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies to CNN. “Since then, there have been occasions when P.R.C. jets flew toward the center line and then veered off. They haven’t crossed it in a long time. By some accounts 20 years.”

• The Japanese Self-Defense Force announced on March 30 that “it had also scrambled fighters after the Chinese air force flew between Japan’s islands of Okinawa and Miyako,” says CNN.

• Other reports:

  • Taiwan blasts China for ‘intentional, reckless and provocative’ fighter jet incursion / AFP

  • Tsai warns China against altering status quo / Focus Taiwan

  • U.S. calls on China to stop coercion after PLA jets cross median line / Focus Taiwan

  • US-China tensions could ignite over Taiwan, former officials warn / SCMP

Related, but not directly:

• Taiwan to block Tencent and Baidu streaming sites on security risk / Nikkei Asian Review
  “Taiwan is cracking down on video streaming services of Chinese tech giants Baidu and Tencent Holdings, citing national security and propaganda concerns ahead of a presidential election next year.”

• Philippines says 200 Chinese ships have been sighted off disputed South China Sea island since January / SCMP

• US, Philippine troops kick off annual wargames as irritants emerge in Manila-Beijing ties / Straits Times

• Philippines protests ‘swarming’ of Chinese boats near island / AP

3. New Zealand PM in Beijing

Kiwi Prime Minister Jacinda Ardern has “finished her whirlwind visit to Beijing with a meeting with President Xí Jìnpíng 习近平 who spoke about taking an already very good relationship to new heights but also said the two countries had to trust each other,” says the New Zealand Herald.

• Xi, however, also “called upon New Zealand on Monday not to discriminate against Chinese companies during a meeting with Prime Minister Jacinda Ardern, whose country has rejected a bid by Chinese telecom giant Huawei to build a 5G mobile network,” reports Reuters.

• “Ardern later said she had explained to Xi the process by which New Zealand makes decisions on 5G technology,” according to the Sydney Morning Herald, which also says that she “raised her concerns with Xi about the situation of Muslim Uyghurs in China’s western Xinjiang region, where it is believed hundreds of thousands of Muslims have been sent to reeducation camps.”

4. Another terrorist attack in Balochistan, Pakistan

It was only a matter of time before this happened again: The Baloch Liberation Army has attacked Chinese facilities in Pakistan, for the third time since August 2018. The Economic Times of India reports:

The attack on the convoy occurred near Hamdard University in Karachi city, ET has learnt. While the figures are not known [a] number of casualties of workers and engineers have been reported by Pakistani news channels.

Jeeyand Baloch, a spokesperson for BLA in a statement noted, “BLA fighters attacked the convoy of Chinese engineers-consists of 22 vehicles, with a remote control bomb in front of Hamdard university in Karachi city. The attack resulted in killing of several Chines engineers and workers.”

“This attack is the continuity of the BLA’s policy of not allowing any force including China, to plunder the Baloch wealth in Balochistan. Our fighters had carried out deadly attacks on Chinese interests and engineers in the past and series of such attacks will continue with intensification until China terminates the nexus with Pakistan, regarding Baloch land,” he added.

Last November, on The China Project Access: Balochistan Liberation Army attacks Chinese consulate.

—Jeremy Goldkorn

5. Xinjiang updates: Ethnic Kyrgyz confirmed to be targeted

The latest grim reporting on Xinjiang shows how many minority cultures, not just Uyghurs, in the region are being crushed:

• At least 35 ethnic Kyrgyz students are confirmed to have disappeared in Xinjiang upon returning from their studies at universities in Bishkek, the capital of Kyrgyzstan, according to the scholar Gene A. Bunin writing in Foreign Policy (porous paywall). This is the first confirmation that not just Uyghurs and Kazakhs, but also Kyrgyz and potentially other ethnic minorities, are being targeted by state security and possibly interned.

• Seven former Xinjiang camp detainees now in Kazakhstan, most of them ethnic Kazakh Chinese, gave their accounts of abuse, forced labor, and varied but consistently “dehumanizing conditions” to Nathan Vanderklippe at the Globe and Mail. One excerpt:

But Ms. Auelhan could not stop thinking about the gap between what she was being told and what she saw unfolding around her. “They say all of the ethnic groups in China are together in peace and love,” she said. Why, then, she wondered, were Muslims virtually the only ones in detention?

In nearly a year spent in various indoctrination centres, she received a single week of instruction on a sewing machine, before being released Oct. 7, 2018.

But she was not yet free. Instead, after a week spent with family, the next chapter of her detention was about to begin, in a factory. The indoctrination wasn’t over, either.

• The Globe and Mail report also contains an update on the case of Sayragul Sauytbay, who previously testified in court in Kazakhstan that she had been forced to teach at a “prison in the mountains” of Xinjiang with 2,500 detainees:

Ms. Sauytbay has often spotted unknown cars parked outside her home. On several occasions, strangers walked up to her house to tell her she was a criminal and “the Chinese government is able to take me back whenever they want. So be careful.” Once, when she and her husband both stepped out at the same time, a stranger came to the house “and threatened my two children, saying your mother is bad.”

Her husband has not maintained consistent work since her return, she said, in part because she felt “it was dangerous for me to stay home alone.”

Authorities in Kazakhstan have twice denied her application for refugee status, leaving her anxious that she could be returned to China, or worse. She is now attempting to take legal action against the country’s refugee commission.

In the midst of the uncertainty, she is plagued by insomnia and often paces her home at night. “I’m afraid of everything,” she said. “Maybe they will just kill me.”

Meanwhile, the Financial Times reports (paywall) — though the headline oddly, and almost certainly inaccurately attributes this effort to “Donald Trump” — that the U.S. Department of State “has intensified conversations with EU member states and several Asian nations in recent weeks” about the Uyghur cause.

An unclassified state department document distributed in March by US officials to foreign diplomats included accounts of abuse collected by advocacy groups and media organizations, satellite imagery showing the expansion of detention facilities in the region, and cited five main goals of Chinese policy in Xinjiang. These included Beijing’s desire to “block and divide global criticism” to “weaken Muslim/Turkic voices internationally” and the “sinicisation of Islam,” according to the document seen by the Financial Times.

—Lucas Niewenhuis

6. The first ‘pure’ traditional Chinese medicine hospital opens in Shenzhen

A specialized traditional Chinese medicine (TCM) hospital, which is calling itself China’s first “pure” TCM medical facility, has opened its doors in the hustling and bustling city of Shenzhen, Guangdong Province.

The Ministry of Health currently requires hospitals to offer more than 85 percent of their treatment based on TCM if they want to call themselves by the name. But in order to live up to the title of China’s first “pure” TCM facility, Bao’an Pure TCM Hospital wanted to raise the percentage. This attracted wide criticism in medical circles, even in the TCM community.

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:

• Nervous Australian investors
  The China headache awaiting Australia’s next PM / Australian Financial Review (paywall)
  “While the most Australian companies with operations in China told a survey by the Australian Chamber of Commerce of Shanghai published last week they were optimistic about the future, privately many investors and executives are nervous.”

• Economic signals: Factory output increases again
  Global shares surge on China factory rebound, trade hopes / Reuters
  “The markets took heart after China’s official purchasing managers’ index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March.”
  China Caixin manufacturing gauge shows return to growth in March / FT (paywall)
  “Survey echoes official figures released over the weekend.”
  Avoid catching China’s spring fever / WSJ (paywall)
  “The shifting dates of the weeklong Lunar New Year holiday contribute to making China’s first-quarter economic data difficult to read. China’s economy may have improved modestly last month, but the jump in the purchasing managers index back into growth territory above 50 — against 49.2 in February — probably exaggerates the uptick.”

• Huawei in Ireland
  Western governments have been made to fear China’s Huawei, but Ireland’s can’t afford to / SCMP
  “Huawei Ireland chief executive officer Jijay Shen, speaking at February’s Mobile World Congress in Barcelona, noted that the Irish government was ‘extremely supportive’ of the company’s activities there.”

• Bloomberg adds Chinese bonds to its global index
  China government bonds make global benchmark debut / FT (paywall)

Bloomberg has begun including Chinese government bonds and policy bank securities in its Bloomberg Barclays Global Aggregate index, a move expected to attract trillions in foreign inflows and reshape global capital markets.

The phased inclusion of 363 Chinese securities over the next 20 months could ultimately spur some $2tn of fund inflows into China’s onshore debt market, according to Moody’s.

• China’s $13 trillion bond market marks a milestone today. Here’s what it means / CNBC

• China’s bond markets still have a way to go / FT (paywall)

• iPhone price cuts
  Apple slashes iPhone prices in China / CNBC
  Major ecommerce sites, including Tmall and JD.com, have already lowered prices of Apple’s iPhone twice this year. Now Apple has officially lowered its prices on its own website: On April 1, “the smartphone maker lowered prices by between 300 yuan ($44.7) and 500 yuan for all models of the iPhone X, iPhone 8 and iPhone 7. The slash comes in response to China’s reduction of the tax burden for manufacturing and other sectors that began on April 1.”

• Alibaba’s advertising business model
  Alibaba’s ad shift shows path for Amazon / The Information (paywall)
  Juro Osawa writes:

Amazon’s annual revenue last year — about $233 billion — was much bigger than Alibaba’s revenue of roughly $40 billion for its last fiscal year. But Alibaba’s operating margin, around 28 percent, is much higher than Amazon’s 5.3 percent, because advertising is a high-margin business. Alibaba now generates more ad revenue than search engine Baidu and social network Tencent combined…

…Alibaba has become a powerful ad platform in part because it is a walled garden. Chinese search engines like Baidu are blocked from indexing Alibaba’s shopping sites. If Taobao’s merchants want to attract more shoppers to their section of the marketplace, the best option is to advertise inside Taobao…When Taobao merchants want to advertise on websites owned by other Chinese internet firms such as Sina and Netease, they can go through Alimama’s ad exchange.

• On-demand bikes: Another blow for Ofo as Mobike raises prices
  Chinese man critically ill after being hit by shared bike falling from building / SCMP
  “A 78-year-old man in Nanchang, Jiangxi Province, is in critical condition after he was hit by a bicycle that fell from a window of the apartment building where he lives. The bicycle is owned by bike-sharing company Ofo. Police are searching for the person responsible.”
  Mobike and Bluegogo double rates in Beijing in bid to stay afloat / TechNode
  “Chinese bike-rental companies are taking action to bolster profitability amid huge losses and major cash flow constraints. Mobike announced on Monday that it will raise prices for bike rides in the capital city of Beijing.”

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• Liver cancer diagnosis
  How a Chinese firm is using AI to zero in on liver cancer / SCMP
  Genetron Health, a Chinese genomics firm in collaboration with the Chinese Academy of Medical Sciences Cancer Hospital, “says it has found a way to detect liver cancer linked to hepatitis B months before it can be picked up by other methods…using a method called HCCscreen, which applies artificial intelligence to look for tumor-related mutations in DNA in blood.”

• Air pollution failures
  Northern Chinese cities fail to meet winter smog targets / SCMP
  “A majority of 39 northern Chinese cities have failed to meet anti-pollution targets over the six-months to the end of March, according to a Reuters study of official data, adding to fears the war on smog has lost momentum.”

POLITICS AND CURRENT AFFAIRS:

• 2013 Xi speech on socialism and competition with the West  
  Xi’s article on upholding, developing socialism with Chinese characteristics to be published / Xinhua

  • The original text is here: 关于坚持和发展中国特色社会主义的几个问题.  

  • Bill Bishop writes in today’s Sinocism (paywall) that the text shows Xí Jìnpíng 习近平 “is proud to call himself a Communist, and he and the Party see themselves in an existential ideological struggle with the West.”

  • Reuters notes that the speech says “developed Western nations have long-term economic, technological and military advantages over China and the Communist Party has to realize that some people will use the West’s strong points to criticize socialism’s failings.”

• The silencing of Xu Zhangrun
  Tsinghua University gets a lecture on leadership from the Central Party School / China Heritage
  A translation by Geremie R. Barmé of a recently circulated “meditation on the actions taken by the Party authorities of Tsinghua University in dealing with the controversial work and person of Professor Xǔ Zhāngrùn 許章潤” by Wáng Chángjiāng 王长江 of the Chinese Communist Party’s Central Party School in Beijing.
  What does the punishment of a prominent scholar mean for intellectual freedom in China? / ChinaFile
  A “conversation,” with contributions by a variety of scholars, which makes for gloomy reading.

• Another factory explosion in Jiangsu
  Seven killed in China plant explosion; second deadly blast this month / Reuters
  “A plant explosion in China’s Jiangsu Province has killed seven people, authorities said on Sunday, the second deadly blast in the province this month as Beijing begins a nationwide industrial safety inspection campaign.”
  After China’s deadly chemical disaster, a shattered region weighs cost of the rush to ‘get rich’ / Washington Post
  The aftermath of the explosion at the Jiangsu Tianjiayi Chemical Company, which killed at least 78 people on March 21.

• Natural disasters
  China forest blaze: 30 firefighters killed in Sichuan / BBC
  “The blaze broke out on Saturday. About 700 firefighters have been trying to control the flames in a remote area of Muli County.”
  China bouncy castle: Dust devil kills two children and injures 20 people / BBC
  “Two children have been killed and 20 other people injured after a bouncy castle was blown high into the sky in central China’s Henan Province. A small whirlwind known as a dust devil tore the inflatable from the ground at a fairground in Yucheng County.”

• Hong Kong extradition bill
  Extradition bill a step too far for Carrie Lam / SCMP
  Alex Lo writes:

The chief executive and her government have done so well when it comes to enforcing public order and security — until now. Unlike her three predecessors, Carrie Lam Cheng Yuet-ngor [林鄭月娥 Lín Zhèng Yuè’é]has shown that you can ban a political party, kick out a foreign journalist, bar radicals from entering local elections, and jail rioters by the dozens even if they claim to be dissidents or protesters. All these were done without the need to enact laws against treason, secession, sedition and subversion under Article 23 of the Basic Law, the city’s mini-constitution.

Beijing has been impressed. Now, though, the proposed extradition law for the transfer of fugitives to the mainland, Taiwan and Macau has hit a brick wall. Whatever its merits or demerits, it has managed to unify the fractured opposition bloc, human rights groups, foreign business interests and even the local business community and its representatives in the legislature.

• Hong Kong will not drop China extradition law plan, says Chief Exec. Carrie Lam following mass protest / Hong Kong Free Press

• Three years for baijiu dissident
  China hands suspended jail term to man who sold Tiananmen massacre liquor / Radio Free Asia

A court in the southwestern Chinese province of Sichuan has handed down a suspended three-year prison term to a man who sold liquor with references to the 1989 Tiananmen massacre on the label, following a secret trial.

Teahouse proprietor Fú Hǎilù 符海陆 was found guilty of “picking quarrels and stirring up trouble” in a trial at the Chengdu Intermediate People’s Court on Monday and handed a three-year prison term, suspended for five years.

SOCIETY AND CULTURE:

• Fashion influencers
  Meet China’s new generation of tastemakers / WWD
  “With the start Wednesday [March 27] of Shanghai Fashion Week, WWD highlights here eight fashion stylists, photographers, makeup artists and hairstylists who exemplify the Chinese fashion industry’s evolution in recent years.”

• Cinema
  China box office: ‘Dumbo’ falls short of nostalgic local fare / Variety
  “Despite a lack of blockbuster competition, Disney’s live-action ‘Dumbo’ didn’t fly all that far in its China opening, failing to soar past a nostalgic Chinese drama already in its second week as sentimental human-interest dramas filled many of the top spots.”

• History underground in Xi’an
  A Chinese city’s subways hit a roadblock: history / Inkstone

In late February, construction of a new subway line in the city was delayed after workers discovered Fei Qiu, a Qin dynasty town that dated back to more than 200 BC. Archaeologists discovered 22 water wells, 15 cooking stoves, several clay pots and a tomb… Such delays help explain why over the past two decades, Beijing has built 20 subway lines, Shanghai 17 — whereas Xian has built just four.

• Patriotism requirements for naturalized soccer players
  Naturalized footballers in China to be taught Party history, patriotism / Hindustan Times
  “Learning the Communist party’s history and Chinese language are now part of the mandatory skill sets required for naturalized Chinese footballers to play the game in the country [according to a] new edict passed by the Chinese Football Association.”

FEATURED ON SUPCHINA

Kuora: What if the Chinese, and not Europeans, had colonized the New World?

How would the Chinese have treated the native population if they had colonized the New World before the Europeans? Would the Incan and Aztec empires have survived longer? For starters, the Chinese would have viewed the natives — those who survived the many diseases carried ashore, in any case — as curiosities. They would have believed themselves to be culturally superior, and would have set about trying to instruct the natives in their language and rites. Who knows what the outcome would have been.

Wei Shihao suspended for breaking opponent’s leg in China Cup loss

China finished dead last in the four-team China Cup, having followed up a 1-0 defeat to Thailand last week with another 1-0 loss against Uzbekistan. But that match was most notable for Wei Shihao’s horror tackle against Otabek Shukurov, which has left the Uzbek midfielder sidelined for the rest of the season with a broken leg. Also in this week’s China Sports Column: Ni La, Sun Yang, Fu Yuanhui, and more.

Friday Song: Su Zixu’s ‘Bare With Me,’ written between English pubs

Sū Zǐxù 苏紫旭 started his performing career hopping between bars in Nanjing, and later Beijing, where he continued this trend. His appearance on Sing My Song (中国好歌曲 zhōngguó hǎo gēqǔ), a Chinese reality show with a similar format to The Voice, turned him into an underground Chinese folk icon. “Bare With Me” [sic] was written while he was in the U.K., in between pubs, inspired by his first trip outside of China.

SINICA PODCAST NETWORK

Sinica Early Access: An update on the Xinjiang crisis with Nury Turkel

Kaiser sat down with Nury Turkel, chairman and founder of the Uyghur Human Rights Project, at the recent Association for Asian Studies conference in Denver for an impromptu catch-up on the current crisis in Xinjiang. They discussed the policy options available to the U.S. as well as the difficulties of trying to get through to Chinese elites and ordinary Chinese people alike.

• 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.

The Caixin-Sinica Business Brief, episode 82

This week on the Caixin-Sinica Business Brief: some vague progress in the seemingly never-ending U.S.-China trade war, Huawei’s performance last year, China’s 5G wireless communications licenses, Doug Young on recent news in the Chinese auto industry, and more.

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