Is pork about to get very expensive?

Dear Access member,

Oma Lee, who was recently given the Young China Watcher of the Year Award, will join us for a Q&A on our Slack channel on the theme “China’s changing NGO landscape” on Wednesday, April 24, at 11 a.m. EST. Email us if you need help accessing Slack. Here’s a link to the Slack channel.

Another special opportunity for Access members: If you’re in New York next month, you can gain steeply discounted tickets to our third annual Women’s Conference using the promo code SUPACCESS.

—Jeremy Goldkorn and team

1. Pork prices to ‘hit record levels’ in 2019, unless govt. steps in

“A vicious, untreatable killer leaves China guessing,” says a New York Times headline (porous paywall): “African swine fever, which harms pigs but not humans, has swept across the country, the world’s largest pork producer. And those are only the cases the government knows about.” The alarmism of the headline may be appropriate:

• More than a million pigs have already been culled since the epizootic began, according to government statistics. As the New York Times points out, no one knows how many cases of swine flu have not been reported, so the real extent of the problem is not clear.

• The effects could last many years. Bloomberg reports (porous paywall) that more than 80 percent of pig farms are deciding not to restock, according to China’s Agriculture Ministry. “There has never been such panic among farms… If confidence among breeders fails to recover, it will hurt consumers,” said one Ministry official.

• Pork prices “will hit record levels in the second half of the year,” said the official cited by Bloomberg.

• Hainan Island has reported several cases of swine fever infection, according to Pork Business. This means that the disease has now “spread to all 31 mainland provinces, municipalities and autonomous regions since August 2018 when it was first confirmed at a pig farm not far from China’s border with Russia.”

• China is the world’s largest producer and consumer of pork. In 2018, the country produced 54.04 million tonnes of pork, down 0.9 percent from 2017. Estimates and official stats of annual pork consumption range from 40 to 80 million tonnes.

How much inflation of the price of China’s favorite meat will the government tolerate? 2019 might be the year when China’s famous strategic pork reserve truly shows its worth.

Background:

• Why China keeps a giant stockpile of frozen pork / Washington Post

• National Meat Reserve / Baidu Baike (in Chinese)

—Jeremy Goldkorn

2. Cancer researchers sacked in U.S. over security concerns

Trade war, tech cold war, or new great power competition — call it what you like, here is today’s news:

• An American cancer research center has dismissed three scientists in connection with national security worries. Science magazine reports:

The MD Anderson Cancer Center here has ousted three senior researchers after the U.S. National Institutes of Health (NIH) in Bethesda, Maryland, informed it that the scientists had committed potentially ‘serious’ violations of agency rules involving confidentiality of peer review and the disclosure of foreign ties. The researchers are among five MD Anderson scientists that NIH cited in letters to the cancer center, which is part of the University of Texas (UT) system. MD Anderson officials say they invoked termination proceedings against three of the researchers, are still investigating allegations against one, and determined termination was not warranted for the fifth scientist…

…Cancer center officials have not named any of the five researchers. MD Anderson President Peter Pisters says all are “Asian”; Science has confirmed that three are ethnically Chinese. Several faced NIH inquiries about their ties to China, according to internal cancer center documents and NIH emails provided by MD Anderson to the Houston Chronicle and reviewed by Science.  

• Growing worries about Chinese use of artificial intelligence research funded by foreign organizations is the subject of a new Financial Times article (paywall):

At least nine academic papers on topics such as facial recognition and video surveillance have been co-written by academics at several prestigious U.S. institutions, alongside researchers at Chinese companies that sell surveillance technology to the Chinese state or at institutions with military ties, such as China’s National University of Defense Technology

• “The CIA accused Huawei of receiving funding from China’s National Security Commission, the People’s Liberation Army and a third branch of the Chinese state intelligence network,” according to a source in the Times of London, reports Reuters.

• Beijing had “planned to announce regulations restricting cross-border data transfers by the end of last year, but regulators have dragged their feet to avoid sparking another confrontation with U.S. companies,” says the Financial Times (paywall).

• How China factories are coping with the trade war, per Reuters:

Manufacturers in China facing trade barriers are deploying an array of moves to try to keep foreign customers – giving discounts, tapping tax breaks, trimming workforces and, occasionally, shifting production overseas to skirt tariffs…

…Some have been able to pass along increased costs. California-based ACOPower has increased prices about 10-15 percent on some of its made-in-China, solar-powered refrigerators, said founder Jeffrey Tang.

—Jeremy Goldkorn

3. ‘Japan’s silent belt and road is beating China’s’

Beijing’s ambitious rhetoric about global investment has yet to become reality, at least when compared with Japan’s global financial reach. That’s the message of the numbers reported by the Wall Street Journal in the piece “Japan’s silent belt and road is beating China’s”:

• According to IMF data, “Japan owned $1.667 trillion in foreign assets in the third quarter of 2018, while China owned $1.542 trillion in the second quarter, the most recent available data for each country.”

• This gap has widened since 2016, the only year when the two countries held equal amounts of foreign assets.

• The AIIB is starting slow: “The Asian Infrastructure Investment Bank — China’s competitor to the Asian Development Bank, which Japan and the U.S. dominate — has been thrifty since its launch in 2016, with just $6.4 billion in outstanding loans by September 2018. The same can’t be said of the ADB, which lent $35.8 billion in 2018 alone, up 40% over two years.”

• Renminbi internationalization isn’t happening: “The yen is the third most popular currency for international transactions, with a 4.35% share in February 2019. That is well behind the dollar or euro, but well above the Chinese yuan, which holds a 1.15% share and has made little progress in recent years.”

• Japan also has more forex reserves: “From the end of 2016, when the yuan’s share of reserves was first reported at 1.07% of the global total, it has risen to 1.89%. Over the same period, the yen’s share has risen from 3.96% to 5.2%, its highest proportion in over 15 years.”

—Lucas Niewenhuis

4. Construction worker loses job after exposing low-quality helmets

A migrant worker surnamed Dòu 窦 in Qingdao, Shandong Province, claims he was fired by his former employer and is having trouble finding another job after a video in which he demonstrated the substandard quality of his helmet while working at a construction site went viral. The video, published on April 11, racked up over 2 million views in a week and incited an onslaught of critical reactions from internet users.

Aside from apparently being blacklisted by construction contractors, Mr. Dou seems also to be the victim of a media campaign to discredit him. For details on this — sadly predictable — story, please click through to The China Project.

—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:

• What do young Chinese people want (to buy)?
  The Focused Generation comes of age: a definitive guide to China’s Gen Z market / Trivium UB
  “China’s Gen Z, or ‘Post-00s,’ are still an enigma to foreign firms. In this piece, we take a look at key studies out of China’s user experience and big data research centers, to see how China’s next online user group is set to disrupt the status quo.”
  The article is mostly about the generation’s psychology, from which there are big implications for brands:

Gen-80 was popularly described as mènsāo 闷骚, which translates to something like “outwardly skeptical but inwardly passionate.” Gen-90 was termed sǎtuō 洒脱, “free and unconstrained.” And Gen-00 was dubbed àijuébùlèi 爱觉不累, “you never feel tired when you’re doing something you love,” which might be better translated as the Focused Generation…

This is critical: they want brands to show the same level of focus and dedication that they do.

• Ecommerce — practical business advice
  China’s new e-commerce law and its foreign company impacts, part 2 / China Law Blog
  Sara Xia of the always useful China Law Blog continues a series of posts that explain some basic aspects of the ecommerce law and how they will probably affect different types of foreign companies involved in ecommerce in China.  

• Mobile apps and the silver yuan
  Tencent’s latest investment is an app that teaches grannies in China to dance / TechCrunch
  “Besides churning out video games for China’s young generations, Tencent has also been attuned to the need of silver-haired users.”

• Beijing malls and office buildings
  Foreign investment in Beijing property may hit record high / China Daily
  “According to Cushman & Wakefiled, foreign investors have reached 10 block deals valued more than 25 billion yuan ($3.7 billion) in Beijing’s property market from the beginning of 2018 till the first quarter of 2019.” One of the deals: A joint venture between Partners Group, The Family Office, SDP Investments, and The Carlyle Group bought Dinghao Electronics Plaza in Zhongguancun, Beijing, for around 9 billion yuan.

• An exploding Tesla in Shanghai
  Tesla investigates video of Model S car exploding / Guardian
  “Tesla said it has sent a team to investigate a video on Chinese social media which showed a parked Tesla Model S car exploding, the latest in a string of fire incidents involving the company’s cars.”

• Growth in Guangdong
  China’s economic powerhouse Guangdong posts steady first-quarter growth: media / Reuters
  “Guangdong, China’s top province by economic output, maintained a growth rate of 6.6 percent in the first quarter thanks to improving industrial production and infrastructure spending.”
  On The China Project: China’s economy: It might not be boom, but it ain’t gloom and doom.

• Huawei: PR in Africa, etc.
  China’s Huawei to launch 5G at Africa Cup of Nations / AFP

Huawei will roll out 5G phone network for the first time during this summer’s Africa Cup of Nations, Egypt’s minister of communications and information technology said on Sunday.

The Chinese firm will introduce the technology at the 74,000-capacity Cairo International Stadium which is set to host 10 games including the final during the competition.

• Huawei revenue rises 39 percent despite US pressure on 5G / FT (paywall)
  “Chinese group says it shipped 70,000 5G base stations and 59 million smartphones in first quarter.”
  Huawei says launches ‘world’s first’ 5G communications hardware for autos / Reuters via CNA
  “Huawei Technologies launched on Monday what it said was the world’s first 5G communications hardware for the automotive industry, in a sign of its growing ambitions to become a key supplier to the sector for self-driving technology.”

• Branding  
  Private-label products shed low-quality image in China / Nikkei Asian Review

Last December, Alibaba tapped Naoto Fukasawa, a Japanese designer who previously worked with the Muji brand…Alibaba sells own-brand products at some 10 Taobao Choice bricks-and-mortar shops…as well as on its Taobao online shopping site.

Electronics retailer Suning.com has also started selling private-label products, including towels, clothing and sundries, created by young designers under the Suning Jiwu brand. Another company cashing in on the trend is Yo-ren, a startup that is partnering with Japanese convenience store chain Lawson and others to create private-label products.

• Marvel at the Chinese box office
  Marvel’s superhero series looks set to continue its 11-year reign in China’s box office market with Avengers: Endgame / SCMP

—Avengers: Endgame has sold a fresh record 540 million yuan ($80 million) in advance tickets.

—The Marvel Cinematic Universe has generated $2.5 billion with 21 films in China, regarded as the most successful superhero series.

• China’s growing importance for global new-energy vehicles
  Toyota establishes research institute in China to study hydrogen, green technologies / Reuters
  “Japan’s Toyota Motor Corp said on Sunday it was setting up a research institute in Beijing in partnership with Tsinghua University to study car technology using hydrogen power and other green technologies.”
  Global automakers seek to make China electric vehicle export hub / FT (paywall)

• China stock market woes
  China stocks slide on IPO announcements and real estate warning / FT (paywall)
  “Chinese stocks took a beating on Monday amid downward pressure from newly announced initial public offerings worth $1.4bn and a warning on real estate speculation from Beijing.”
  Sudden rush to raise cash in China is burning stock investors / Bloomberg (porous paywall)
  “China’s cash-strapped companies are going to new lengths to raise money from the booming stock market, even if it comes at a cost to existing shareholders.”  
  Bloomberg says nine firms have announced plans “to raise a combined 40.5 billion yuan ($6 billion) through rights issues since January, almost twice the amount announced all of last year.” Share prices of two of the companies, Tianqi Lithium and Xinjiang Tianrun Dairy, “slumped 5.4 percent and 10 percent immediately after their respective announcements.”
  Beijing just undermined China’s $2.5 trillion stock rally / Bloomberg (porous paywall)
  After an official statement on Friday indicating that the government may slow down stimulus spending, “the CSI 300 Index of equities traded in Shanghai and Shenzhen sank 2.3 percent on Monday, its biggest loss in a month, with five stocks falling for each that rose.”

• JD and Richard Liu rape lawsuit
  Hundreds sign online petition supporting woman suing JD.com CEO in rape case / Reuters
  Report on domestic news site censored: Shame, support for student suing JD.com CEO over alleged rape / Sixth Tone
  Context on The China Project: JD’s Richard Liu faces rape lawsuit.

• Details on new computer game restrictions
  China’s new gaming rules to ban poker, blood and imperial schemes / TechCrunch

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• Laws on vaccine safety
  China proposes larger penalties on counterfeit vaccine-makers / Bloomberg via Caixin
  “Companies guilty of making or selling counterfeit vaccines can be fined between 15 to 30 times the value of the products involved, China News Service reported, citing the second draft of a new vaccine management law. That compares with a proposed five to 10 times the value of the goods in the first draft in November.”

• Brussels institute worries about Chinese military use of new tech
  Science body VKI reassesses its ties to Chinese developer of ‘Guam Killer’ hypersonic missile / SCMP
  “An aerospace institute in Brussels is investigating exchanges and collaborations between its scientists and a major Chinese defence contractor, but management at the Belgian-based non-profit did not reveal details.”

• Laws on human genetic research
  China draws up tighter rules on human gene and embryo trials / Reuters
  “China’s top legislature will consider tougher rules on research involving human genes and embryos, the first such move since a Chinese scientist sparked controversy last year by announcing he had made the world’s first ‘gene-edited’ babies.”

POLITICS AND CURRENT AFFAIRS:

• Xi and poverty alleviation
  CPC holds meeting to discuss economy, poverty alleviation, Party publicity work / Xinhua
  Xí Jìnpíng 习近平 returns to one of his major themes: the importance and urgency of bringing the entire population above the poverty line.
  Xi Jinping tells Chinese officials they must ‘finish the journey’ and shifts focus back to fight against poverty as economy stabilizes / SCMP

• India, Japan, Vietnam, Australia attend naval parade
  Indian, Australian warships arrive in China for naval parade / Reuters

Warships from India, Australia and several other nations arrived in the eastern Chinese port city of Qingdao on Sunday to attend a naval parade, part of a goodwill visit as China extends the hand of friendship despite regional tensions and suspicions…

…China on Tuesday will mark 70 years since the founding of the People’s Liberation Army Navy, where it will show off new warships including nuclear submarines and destroyers at a major review in the waters off Qingdao…

…Japan has also sent a destroyer to Qingdao, in the first visit of a Japanese navy ship to China since 2011, according to Japanese media…The other countries taking part include China’s close friend Russia, and three countries which have sparred with China over competing claims in the disputed South China Sea: Vietnam, Malaysia and the Philippines.

• India-China meeting: Nice noises but no details
  China, India exchange views on ‘issues of common interest, including Indo-Pacific’ / SCMP
  “Indian Foreign Secretary Vijay Keshav Gokhale on Monday wrapped up a two-day visit to Beijing, where he met top Chinese diplomats amid ongoing tensions over regional geopolitics and China’s New Silk Road plan.”

• Tsinghua University and Professor Xu Zhangrun
  The professor, a university & the rule of law / China Heritage
  Translations of new essays defending constitutional law professor Xǔ Zhāngrùn 许章润, recently purged from Tsinghua University.

• Repression of Uyghurs in Xinjiang
  ‘I have revised my idea of what a Uyghur heroine should be’ / ChinaFile
  Activist Zubayra Shamseden writes: “Uyghur women are diverse in looks, lifestyles, and roles in the community, but to the Chinese government there appears to only be one correct way to think and act, namely that the Chinese Communist Party is the benevolent parent teaching us how to wear our own culture.”

• Beijing support for Tehran
  China criticizes US effort to reduce Iran oil sales / AP
  “China has criticized Washington’s decision to tell Beijing and other governments to stop buying Iranian oil or face sanctions.”
  China says consistently opposes unilateral U.S. sanctions on Iran / Reuters

• Philanthropy
  To spread prosperity further, philanthropy should take lessons from China / Stanford Social Innovation Review
  “Philanthropic and social change organizations have much to learn from China’s success with alleviating poverty through reforms targeting entrepreneurialism, governance, businesses, and women.”

SOCIETY AND CULTURE:

• Love in the era of worker rights repression
  ‘Separated again by a high wall’: The love story of Chinese feminist Zheng Churan and detained labour rights activist Wei Zhili / Made in China Journal via HKFP

On 20 March 2019, Wēi Zhìlì 危志立 a labour activist and editor of the pro-labour social media group “New Generation” (新生代 xīn shēng dài), was arrested at his home in Guangzhou. Two of his coworkers…have also gone missing. In the preceding months, Wei — or, as friends call him, “Xiaowei” — had been assisting workers with pneumoconiosis with legal claims.

In a desperate attempt to claim compensation, these workers organized a protest in Shenzhen in November 2018 and were suppressed by police. Wei is among the latest activists who have been swept up in the ever-widening net of repression in the aftermath of the Jasic labour struggle. The author of this piece, Zhèng Chǔrán 郑楚然, more widely known as “Dàtù” 大兔, is Wei’s wife and a long-term feminist activist.

• New music from Kris Wu
  China’s hottest new song is a rap about noodles / Sixth Tone
  “The latest hit song from Chinese Canadian pop idol Kris Wu [吳亦凡 Wú Yìfán] is a self-deprecating — and incredibly catchy — riff on a previous impromptu rap he performed for noodle shop patrons that ended up being widely mocked by netizens. Since its release Friday, the music video for ‘Big Bowl, Thick Noodle’ [大碗宽面 dà wǎn kuān miàn] has been viewed over 90 million times on streaming site Miaopai.”

• The Beijing Bookworm
  Finding room for debate / NeoCha
  A profile of Beijing’s much-loved international bookstore, café, and event space.

• Boxing and corporate law — Shanghai characters
  Meet the Portuguese lawyer boxing professionally in China / That’s Guangzhou
  “Portuguese law firm specializing in the corporate side of things. Fast forward almost five years, and while he remains a corporate lawyer he has diversified somewhat into the world of professional boxing.”

FEATURED ON SUPCHINA

Rampant Chinese cheating exposed at the Boston Marathon

State radio network The Voice of China broadcast a story this week about claims that nearly 100 Chinese runners in this year’s Boston Marathon — from a total of 951 entered Chinese nationals — falsified their previous times in an attempt to bypass the notoriously stringent entry requirements. Also in this week’s China Sports Column: Li Xiaopeng 李小鹏 will become just the fourth Chinese gymnast inducted into the International Gymnastics Hall of Fame, while China’s athletes and snooker players alike are both looking to impress in international competition this weekend, at the World Snooker Championship and Asian Athletics Championships.

Zheng Xiaoqiong, the migrant poet

Zheng Xiaoqiong is a seminal figure in the emerging genre of migrant worker poetry and one of the most significant living Chinese poets. Though she seems to come out of a world completely foreign to the traditional poetry reader, her work has a universal resonance. As such, her writing is more than a wellspring of meaning for each reader; it is an ocean that connects readers from worlds that might otherwise never meet.

Kuora: The usefulness of learning Chinese

Is learning Chinese (Mandarin) really worthwhile for business? Unfortunately and rather unhelpfully, the only truthful answer is “It depends.” Make no mistake: It’s a huge investment of time. One never truly masters it as a second language. For an adult non-native learner, investing enough time to learn to speak enough of the language to demonstrate respect and interest is one thing. Learning to speak well enough to actually conduct business in China is quite another.

Friday Song: “Wishing We Would Last Forever” and Su Shi

“Wishing We Would Last Forever” (但愿人长久 dànyuànrénchángjiǔ) is a Mandarin pop ballad sung by Chinese singer-songwriter/actress Faye Wong. Released on July 1, 1995, in her album The Decadent Sounds of Faye (菲靡靡之音 fēimímízhīyīn), the song was composed by Taiwanese musician/author Vincent Liang 梁弘志 and arranged by Malaysian music arranger Alex San 辛伟力, with lyrics derived from a well-known poem, “Water Melody” (水调歌头 Shuǐdiào Gētóu), by Su Shi 苏轼.

SINICA PODCAST NETWORK

Sinica Early Access: An American Futurist in China: Alvin Toffler and Reform & Opening

This week on Sinica, China-watching wunderkind Julian Gewirtz joins Kaiser and Jeremy to chat about his recent paper on the American futurist Alvin Toffler (author of Future Shock and The Third Wave), who found a surprisingly receptive audience in the China of the early 1980s. His ideas on the role of technology in modernization were widely embraced by leaders of China’s reform movement — including both Deng Xiaoping and his right-hand man, Zhao Ziyang. Julian describes how Toffler came to the attention of the reformers, and discusses the lasting impact of his influence.

• 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 84

This week on the Caixin-Sinica Business Brief: New data on China’s economic growth, the civil lawsuit against JD’s Richard Liu, China’s pension system, the child-modeling industry, Doug Young on what’s going on with Amazon China, and more.

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