Links for Monday, July 13, 2020

BUSINESS AND TECHNOLOGY:

• Banking rules adjusted as part of trade deal
  Rule change to fund custody licenses helps China meet U.S. trade deal commitment / Caixin (paywall)

Previously, foreign banks could only apply for a fund custody license through their local subsidiaries in China. Their local branches, which have no independent legal status from their overseas headquarters, were barred from entering the sector. The license allows a company to provide custody services for fund products issued by fund firms or other asset managers in China, namely holding the fund’s assets for safekeeping.

• The “new infrastructure” push
  SenseTime builds AI computing platform in Shanghai amid ‘new infrastructure’ push / Caixin
  “Chinese artificial intelligence (AI) specialist SenseTime has started construction of a new-generation AI computing platform in Shanghai in a bid to contribute to the city becoming a global AI powerhouse.”
  5G-based pilot ‘smart’ power project launches in East China / Caixin (paywall)
  “China’s top electric grid operator has launched the first phase of a 5G-based “smart” power grid system in the coastal city of Qingdao, in partnership with telecom giants Huawei Technologies and China Telecom, under a pilot program aimed at better managing its core operations.”
  Context on The China Project: ‘New infrastructure’ — China’s race for 5G and networked everything has a new catchphrase.
• Washington reevaluates a pharma firm purchase
  U.S. national security panel examining Chinese investors’ purchase of Pharma firm / WSJ (porous paywall)
  “U.S. national-security officials are reviewing the 2017 acquisition of a South Carolina pharmaceutical company by Chinese investors after learning the firm was in talks to participate in a Pentagon project to develop injection devices for a coronavirus vaccine, according to people familiar with the matter.”
• New wealth management regulations
  Central bank may delay new rules for $12.9 trillion industry / Caixin (paywall)
  “The new asset management rules are intended to tame and reduce risks in a massive industry. As of the end of May, China had total outstanding wealth management products (WMPs) of 90.1 trillion yuan ($12.9 trillion), an increase of 4 trillion yuan since the start of 2020 and 3.5% more than at the same point last year, data from the central bank shows.”
• China’s export economy awaits the world’s reopening
  China’s export slump to ease in June as economies reopen, imports fall less / Reuters
  Why China isn’t expected to power a global recovery / WSJ (paywall)
• Foxconn shifts to India
  Apple supplier Foxconn to invest $1 billion in India, sources say / Reuters
  “The move, the scale of which has not previously been reported, is part of a quiet and gradual production shift by Apple away from China as it navigates disruptions from a trade war between Beijing and Washington and the coronavirus crisis.”
• Microsoft sheds its sassy chatbot
  Microsoft spins off ‘sassy’ Chinese chatbot with Harry Shum at Helm / Caixin (paywall)
  “Microsoft is shedding its empathetic chatbot Xiaoice into an independent entity, the U.S. software behemoth said (in Chinese) Monday, confirming an earlier report by the Chinese news site Chuhaipost in June.”
  Microsoft spins out 5-year-old Chinese chatbot Xiaoice / TechCrunch
• Wells Fargo targets TikTok
  Wells Fargo directs employees to remove TikTok from company mobile devices / The Verge
• Flight route politics
  France reduces Chinese flights to Paris in tit-for-tat row / Reuters
  Vietnam says agrees to resume commercial flights to China / Reuters
• Biotech firm to raise $2B
  Chinese biotech firm Beigene to raise $2.1 billion in stock sale / Caixin (paywall)
• A potential post-virus bad loan spike
  Banking regulator warns of post-virus rebound in bad loans / Caixin (paywall)

“Although nonperforming loans on banking institutions’ balance sheets have not increased significantly since the start of this year, they are expected to rise in the near future,” the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement (link in Chinese) on Saturday.

• JD Group bets on tourism’s revival
  JD Group renews tourism bid with BTG deal / TechNode
  “JD’s renewed push into the tourism sector underscores its confidence in the industry’s revival, which was brought to near-standstill by the COVID-19 pandemic.”
• Smartphone shipments drop
  Smartphone shipments in China fall 16% in June: government data / Reuters
• Chinese EV maker moves to the U.S.
  Money-losing electric carmaker Li auto files for U.S. IPO / Caixin (paywall)
  “Chinese electric vehicle startup Li Auto has filed for a U.S. initial public offering, seeking to raise up to $100 million, as the loss-making company hunts for fresh capital to bankroll its growth.”
• Takeout delivery platform jumps in value
  Platform serving China’s takeout delivery workers jumps 28% in Nasdaq debut / Caixin (paywall)
  “Shares of Quhuo Ltd., which provides flexible workforce services to takeout delivery companies, jumped a healthy 27.7% in their Friday trading debut on the Nasdaq, giving the company a market value of about $600 million, according to Bloomberg.”
• Replenishing a tight pork supply
  Tight Chinese pork supply to ease by fourth quarter: agriculture official / Reuters
  “Construction of pig farms and rapid restocking will ease tight pork supply from the fourth quarter, an official at China’s Ministry of Agriculture and Rural Affairs said on Monday.”
• Macau reopening leads to casino share jump
  Casino shares jump after China lifts quarantine rules for Macau / Bloomberg (porous paywall)
• Hong Kong Disneyland closes for a second time
  Disney to shut Hong Kong Disneyland again as coronavirus cases rise / Reuters via Straits Times
  “Walt Disney Co is temporarily closing its Hong Kong Disneyland theme park from July 15 amid rising coronavirus cases in the Chinese-ruled city, the company said Monday (July 13).”

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• Hong Kong slips back into lockdown
  Masks compulsory on public transport and new restaurant restrictions as Hong Kong enacts strict new COVID-19 measures / HKFP
  Hong Kong records 52 new infections, sparking fears of resurgence / HKFP
  Hong Kong to suspend all schools after virus cases spike / HKFP
• Updates on the vaccine race
  Lonza licenses technology to China’s Junshi for experimental COVID-19 drug / Reuters
  “Lonza Group said on Monday that China’s Junshi Biosciences has licensed the Swiss contract drug manufacturer’s technology to help produce a neutralizing antibody against COVID-19.”
  China’s CanSino in talks for COVID-19 vaccine Phase III trial overseas / Reuters
  “Chinese vaccine developer CanSino Biologics is in talks with Russia, Brazil, Chile and Saudi Arabia to launch a Phase III trial of its experimental COVID-19 vaccine, its co-founder said on Saturday.”

POLITICS AND CURRENT AFFAIRS:

• Over 600,000 vote in democrats’ primaries in Hong Kong  
  ‘Hong Kong people made history again’: Over 600,000 vote in democrats’ primaries as co-organizer hails ‘miracle’ turnout / HKFP
  Hong Kong’s opposition, battered by security law, looks to elections / NYT (porous paywall)
  Hong Kong migration to U.K. could hit 200,000 / FT (paywall)
  Allowing the privileged few to flee Hong Kong isn’t liberation / Guardian
  Yangyang Cheng writes, “The reality is that the interests of Hong Kong’s people have always come second when the west confronts Beijing.”
  To ‘protect young minds,’ Hong Kong moves to overhaul schools / NYT (porous paywall)

“You can’t just allow teachers to talk, and impose their views, free for all,” said Regina Ip, a cabinet member who leads a pro-Beijing party in the legislature. “Critical thinking does not mean training people to criticize or attack.”

• University of Hong Kong pro-democracy message board destroyed – report / HKFP
  Hong Kong dissident Nathan Law says Britain new home / HKFP
  Hong Kong’s Carrie Lam says education is ‘politicized,’ blames media for ‘negative, smearing’ coverage / HKFP
  Global Times on Twitter: “The head of #HKSAR’s correctional services sector said a large number of youths are expected to be put into correctional institutions in the future, and authority will expand manpower and strengthen civic education.”
  ‘This is political persecution’: Leading Hong Kong activists charged for Tiananmen vigil gathering / HKFP
  Life in Hong Kong has always been impossible / NYT (porous paywall)
  “There are so many reasons Hong Kong is not a particularly habitable city, so many reasons you might want to leave, even without the Chinese Communist Party threatening to throw dissidents in jail.”
  “It’ll only get better” – the week of Hong Kong national security law on Weibo / Whats on Weibo
  Democrats’ plan to win legislative majority to oppose gov’t policy may be illegal under security law says Hong Kong’s Lam / HKFP

“If this so-called primary election’s purpose is to achieve the ultimately goal of… rejecting to, resisting every policy initiative of the Hong Kong SAR government, then it may fall into the category of subverting the state power,” [Executive Lín Zhèng Yuè-é林鄭月娥] said, “which is now one of the four types offences under the new national security law.”

• Western nations struggle to punish China without shooting their own foot
  U.S. weighs limited options to punish China over Hong Kong / WSJ (paywall)
  “Major actions against Hong Kong’s financial system risk hitting U.S., Western and Hong Kong companies and consumers.”
  Sweden joins France, Germany in weighing measures against China over Hong Kong / Reuters
  “The European Union is preparing countermeasures on China in response to Beijing’s new security law on Hong Kong, the EU’s top diplomat said on Monday, but envoys stressed the likely steps will not amount to economic sanctions.”
• Beijing sanctions Marco Rubio, Ted Cruz and others…
  China trades sanctions with U.S. in row over Uighur Muslims / Reuters
  China announces retaliatory sanctions against Marco Rubio and Ted Cruz / Guardian
  China to sanction U.S. senators Rubio, Cruz over Xinjiang moves / Bloomberg (porous paywall)
• …as U.S.-China relations deteriorate
  U.S. warns citizens of heightened detention risks in China / Reuters
  Josh Marshall on Twitter: “Trump Econ Advisor Navarro claims China sent ‘weaponized virus’ to attack US because Chinese economy was having a down year, declares Biden ‘candidate of the Chinese Communist Party.’”
  China, U.S. diplomats in Brazil tussle on Twitter over Xinjiang / AP via SCMP

It started on Friday, with a retweet by U.S. ambassador Todd Chapman of a State Department account which accused China’s Communist Party of conducting a “mass sterilisation campaign for women as part of its crackdown on Uygurs and other ethnic minorities” in Xinjiang. “Silence is not an option,” Chapman said.

• Bolstering Taiwan’s defenses
  U.S. sends surveillance aircraft to watch Chinese coastline as Taiwan starts major military exercise / SCMP
  Taiwan’s military tests defenses against mainland China invasion in annual war games / SCMP
  Is Taiwan the next Hong Kong? / Foreign Affairs
  Michael Green and Evan Medeiros write, “Unless the United States demonstrates the resolve and ability to resist Chinese coercion and aggression, China’s leaders may eventually conclude that the risks and the costs of future military action against Taiwan are low — or at least tolerable.”
• China and Iran forge a new partnership
  Defying U.S., China and Iran bear trade and military partnership / NYT (porous paywall)
  “The partnership…would vastly expand Chinese presence in banking, telecommunications, ports, railways and dozens of other projects. In exchange, China would receive a regular — and, according to an Iranian official and an oil trader, heavily discounted — supply of Iranian oil over the next 25 years.”
• India quashes challenges to its app ban
  India asks court to stymie potential challenge to Chinese app ban / Reuters
  “India’s government has petitioned a state court to stop any of the Chinese companies whose 59 apps it recently banned from obtaining an injunction to block the order, according to two sources and the legal filing.”
• Escalating Chinese-Australian tensions
  China upgrades travel advice for Australia in escalation of tensions / Sydney Morning Herald
  Australia needs to take leadership role in face of US-China contest: Wong / Sydney Morning Herald
  Questions raised over Australia’s free trade deal with Hong Kong amid China crackdown / Australian ABC
• China and Kazakhstan’s pneumonia scuffle
  China and Kazakhstan try to smooth over ‘deadly pneumonia’ row / SCMP
• China’s new stealth fighter hits the assembly line
  China’s stealth fighter goes into mass production after thrust upgrade / SCMP
• French double agents jailed
  Two former French spies jailed for sharing secrets with China / AFP via SCMP
• India’s new Taiwan envoy sends a message to the mainland
  India posting key diplomat to Taiwan amid China tension / Indian Express
  Derek J. Grossman on Twitter: “Make no mistake: the seniority and experience of India’s new envoy to Taiwan is designed to send a distinct message to China.”
• The citizens caught in the crossfires of the Chinese-Indian dispute
  Caught between Indian and Chinese troops, at 15,000 feet / NYT (porous paywall)

Each country has accused the other of provocative actions along the murky border. But according to people who live and work in the region, Ladakh, a Chinese push into Indian territory has been building for years…

The Ladakhis caught in between are a fragile group, numbering perhaps a few hundred thousand. They are Tibetan in culture, identify themselves as Indian and have long been pulled in different directions at the edges of empire.

• Beijing prepares tool to retaliate against espionage accusations
  China beefs up economic espionage law after uptick in accusations from U.S. / SCMP
  “China is amending its criminal code to cover trade secrets theft by foreign businesses, a change that could give Beijing a tool to retaliate against the United States for alleged economic espionage.”
• New Zealand’s China-connected MP retires
  National MP Jian Yang, who admitted to training Chinese spies, retires from politics / RNZ
  “In 2017, [Yáng Jiàn 杨健] confirmed he had taught ‘spies’ in China, but denied that he was a spy himself. A story on the Newsroom website raised questions about his involvement with Chinese military and intelligence.”

SOCIETY AND CULTURE:

• New details on Guizhou bus murderer’s life
  Was the driver who deliberately crashed his bus killing 21 evil or a victim? Netizens discuss / Caixin (paywall)
  “According to the police report, the 52-year-old bus driver surnamed Zhang was angry with the government approved demolition of his former apartment, rented from the factory at which he had previously worked.”
  Driver in Guizhou bus crash ‘discontent with life,’ say police / Sixth Tone
• China’s identity theft crackdown cannot undo the past
  The lasting pain of China’s identity theft victims / Sixth Tone
  “In 1997, Gou was the victim of an elaborate hoax, which resulted in Qiu taking her exam results, her name, and her place at a vocational school in Beijing. Gou was misled into thinking she’d flunked her exams and had to repeat her senior year, plunging her family further into poverty.”