Hot air makes the world go round

Access Archive

Quick announcement: Tomorrowโ€™s Sinica Podcast recording will be livestreamed! Check our social media channels (Twitter, Facebook) for the broadcast link, and tune in at 6:00 p.m. EST, December 4, to catch our conversation with Jude Blanchette reflecting on the 40th Anniversary of Reform & Opening in China.


1. Hot air makes the world go round

Xรญ Jรฌnpรญng ไน ่ฟ‘ๅนณ and Donald Trump met in Argentina. In our trade war update below, Lucas writes:

At the Xi-Trump dinner in Argentina on Saturday, December 1, both presidents called the meeting โ€œhighly successful.โ€ In published remarks before the meeting, Xi even returned Trumpโ€™s bromides about the two leadersโ€™ โ€œpersonal friendshipโ€ for the first time.

Both sides also said that they had agreed there would be no increase to tariffs on January 1, but beyond that, the details are sketchy because there was no joint statement.

Nonetheless, Wall Street and global markets rallied. Even in my far-away native land of South Africa, the news of the temporary cessation of hostilities is moving money. Business Day (South Africa) reports that the South African rand โ€œwas firmerโ€ today, โ€œcheered by global interest in risk assets, after the U.S. and China agreed to a 90-day truce in their trade war.โ€

What an excellent illustration of the fundamental idiocy that can drive the markets. I think Jamil Anderlini in the Financial Times has it right (paywall):

Since it is virtually impossible for Mr Xi to implement or even agree to such far-ranging changes to Chinaโ€™s economy, it is almost certain that the trade war will resume with a vengeance.

2. A new account of the alleged Richard Liu rape ย 

The circumstances of the alleged rape of a Chinese student in Minnesota by Richard Liu (ๅˆ˜ๅผบไธœ Liรบ Qiรกngdลng), billionaire founder of ecommerce giant JD, are the subject of a new account compiled by Bloomberg (porous paywall) which begins thusly:

It was a Thursday evening in late August and a crowd had gathered at the Origami sushi restaurant in Minneapolis. One guest, a 21-year-old female Chinese undergraduate at the University of Minnesota, was initially expecting a dinner in honor of volunteers like herself.

Instead, she found herself surrounded by more than a dozen Chinese executives, male attendees of a doctoral management program for which she had been volunteering.

Bloomberg says the story is based on documents including the alleged victimโ€™s statement to the police, her WeChat messages to a friend, โ€œwhich were reviewed by Bloomberg,โ€ and a conversation with her lawyer. There is no substantial new information, but the article does offer a detailed account of the evening from the alleged victimโ€™s point of view.

Liuโ€™s lawyer responded to the account: โ€œThis version of events is filled with unsubstantiated information, from sources who clearly have an agenda.โ€ ย 

The Minneapolis Police Department handed its investigation results to prosecutors in the Hennepin County Attorneyโ€™s office. Prosecutors have not yet announced whether they will file criminal charges.

3. State media silent on trade war truce, much ado about Panama

The home pages of central state media websites today share a conspicuous absence: there is no mention of the trade war truce.

You can find some coverage of the Trump-Xi meeting, with photos, on Xinhuaโ€™s Chinese site: the article is simply titled โ€œXรญ Jรฌnpรญng ไน ่ฟ‘ๅนณ meets with U.S. President Trump.โ€ The Global Times English website features an opinion piece titled โ€œTrade war truce sends significant signal.โ€ The editorial does not make it very clear what the significant signal is, but this paragraph just about sums the whole piece up:

The truce shows both sides have realized that it would be more beneficial for them to end the trade war than to continue it. Washington’s understanding on this point is no less than that of Beijing. It’s almost impossible to overcome the huge differences between the two sides in 90 days. But it’s highly likely that 90 days of effort could build a certain trust and lead to compromises that are acceptable to both.

Xinhua News Agency, the Peopleโ€™s Daily, and Global Timesโ€™ websites all feature a version of this story: Chinese president arrives in Panama for state visit (Chinese version here). The official articles do not mention it, but the South China Morning Post points out that the visit is something of a victory lap for Xi Jinping:

The warm ties follow Panamaโ€™s diplomatic break with Taipei in June last year. Since then, two more Central American countries โ€” Dominican Republic and El Salvador โ€” have this year also made the diplomatic shift. The new friendships are a result of efforts to lure countries with formal relations with Taiwanโ€ฆ to switch their allegiance to Beijing.

Also prominent in state media today: the full text of Xi’s signed article in a Portuguese newspaper on the occasion of his visit to Lisbon, the last stop on his current world tour (Chinese version here).

Reflecting on Xiโ€™s visit to Latin America and Chinaโ€™s growing presence there, the Global Times Chinese website features a story titled โ€œThe United States should destroy the tomb of the Monroe Doctrine.โ€ Translated excerpt:

However, the era of the Monroe Doctrine has indeed ended. Latin American countries have legitimate rights to develop mutually beneficial cooperation with China and other major countries in the world. The United States lacks the basic moral and legal tools to prevent such cooperation. Therefore, restraining its strategic suspicion of China-Latin America cooperation is Washingtonโ€™s best choice to reduce unnecessary troubles.

โ€”Jeremy Goldkorn

4. Trade war, day 151: A cease-fire after G20, but details are sketchy

At the Xi-Trump dinner in Argentina on Saturday, December 1, both presidents called the meeting โ€œhighly successful.โ€ In published remarks before the meeting, Xi even returned Trumpโ€™s bromides about the two leadersโ€™ โ€œpersonal friendshipโ€ for the first time.

Both sides also said that they had agreed there would be no increase to tariffs on January 1, but beyond that, the details are sketchy because there was no joint statement. The American statement on the meeting, via the White House, and the Chinese statements, via Xinhua readout and Foreign Minister Wรกng Yรฌ ็Ž‹ๆฏ… (in Chinese), have marked differences. Caixin has a helpful comparison of what the two sides are saying:

China scholar Elizabeth Economy commented on the differences in statements, โ€œHard to know what’s true and what’s not since neither leadership has a close relationship with the truth.โ€ The Economist magazine sums up (porous paywall) the result as โ€œsome murky mercantilism, and a deal to talk about a deal.โ€ The number of issues that the two sides now have to negotiate before Trumpโ€™s patience again wears thin is โ€œambitious, particularly when levels of trust between the two sides are so low,โ€ the Economist says.

More interesting, and new, are the discussions of fentanyl, noted at the top of the White House statement and the middle of the Xinhua readout. Xinhua notes that โ€œChina has decided to list all the fentanyl-like substances as controlled substances and start working to adjust related regulations.โ€ This appears to be an important goodwill gesture, as the man at the forefront of trade negotiations, U.S. Trade Representative Robert Lighthizer, had reportedly (paywall) been saying in White House meetings that โ€œBeijing was getting even for the Opium Wars between Britain and China in the 1800s by shipping fentanyl to America.โ€

More coverage of the Trump-Xi meeting and the trade war:

  • Long-term politics
    Trade truce by China and U.S. gives both sides political breathing room / NYT (porous paywall)
    Tariff truce with China eases โ€˜Cold Warโ€™ fears / WSJ (paywall)

  • More on fentanyl
    A win in the China-US war against fentanyl but opioid chemists cook up clones the law has never seen / SCMP
    โ€œIn the southern Chinese province of Hebei on Thursday, 21 people pleaded guilty at Xingtai Intermediate Peopleโ€™s Court to trading in illegal narcotics.โ€
    โ€œWhile six fentanyl-related drugs were developed in China for the black market between 2012 to 2015, 66 were created in 2016 alone.โ€
    China’s fentanyl firms back crackdown on opioid / SCMP
    โ€œThe biggest legal producer of fentanyl in China has welcomed the countryโ€™s commitment to clamp down on the synthetic opioid to help stop the flow of the drug to the United States.โ€
    โ€œHumanwell Healthcare chairman Wang Xuehai said on Monday that any fentanyl reaching American shores from China was โ€˜illegally manufactured by underground factories and smuggled to the USโ€™.โ€
    China won’t stop flood of fentanyl into Canada, sources say / Global News (Canada)
    โ€œIn public, Canadaโ€™s federal government claims there is co-operation with China in the fight against fentanyl. It isnโ€™t politically feasible for Ottawa to openly criticize Beijing on the opioid crisis, especially as the two governments pursue deeper trade ties. But behind the scenes, sources say frustration is growing over Chinaโ€™s inaction.โ€

  • Markets like tariff cease-fires
    Wall Street rallies on temporary trade truce / Reuters
    โ€œApple Inc, recently hit by worries over possible tariffs on iPhones, rose 1.9 percent. Trade bellwethers Caterpillar Inc and Boeing Co were up 2.9 percent and 3.5 percent, respectively.โ€
    Wall Street struggles to hold initial Trump-Xi truce boost / FT (paywall)
    โ€œThe S&P 500 was up 1 per cent about half an hour after the opening bell, pulling back from a gain of as much as 1.5 per cent.โ€

  • Qualcomm tells Trump โ€œthanks, too lateโ€
    Trump says China is now open to Qualcomm-NXP deal. But it’s too late / CNN
    Qualcomm spokesperson: โ€œ”While we were grateful to learn of President Trump and President Xi’s comments about Qualcomm’s previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal. Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G roadmap.”

  • Partial censorship on WeChat
    China censors US embassyโ€™s WeChat post on trade war truce / SCMP
    โ€œA social media post by the US embassy in Beijing about the trade agreement between the two nations was being partially censored on Monday, with the WeChat article visible but blocked from forwarding or sharing.โ€

  • Trump makes unconfirmed claim about auto tariffs that was good for German companies
    Donald J. Trump on Twitter: “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”
    China will slash car tariffs, Trump says, in a (vague) tweet / NYT (porous paywall)
    โ€œIf cuts in tariffs on American-made cars are in the works, the biggest beneficiaries are likely to be German. BMW and Mercedes-Benz both produce sport utility vehicles in the United States and export them all over the world, including a combined total of roughly 180,000 a year to China. That is still a tiny share of Chinaโ€™s auto market, which reached 24.7 million cars sold last year.โ€
    Trump tweets China to cut tax on U.S.-made cars, revs up auto stocks / Reuters
    โ€œIn early European trade on Monday, shares in Germany’s BMW, Volkswagen ASG (VOWG_p.DE) and Mercedes-Benz parent Daimler rose between 4-7 percent.โ€

  • A greatly unfortunate choice of words
    Donald J. Trump on Twitter: “My meeting in Argentina with President Xi of China was an extraordinary one. Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!”

  • Trump says his โ€œstrongโ€ military budget is also โ€œcrazy!โ€
    Donald J. Trump on Twitter: “I am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable Arms Race. The U.S. spent 716 Billion Dollars this year. Crazy!”

  • Chinese industry is cautious
    Chinese exporters breathe sigh of relief on tariff truce but do not expect a quick end to US trade war / SCMP
    โ€œStruggling exporters in Chinaโ€™s Pearl River Delta and Yangtze River Delta manufacturing regions believe the trade war between the US and China will not end easily or soon, but they welcomed the tariff truce โ€“ however brief โ€“ announced on Saturday.โ€

  • American industry is skeptical
    Trade war ceasefire โ€˜does not change anythingโ€™, US retail boss Rick Helfenbein says as he predicts ugly time ahead for workers and consumers / SCMP
    โ€œRick Helfenbein, president and CEO of the American Apparel and Footwear Association, which represents more than 1,000 major brands, said on Monday that his members still faced a โ€˜difficult and awkwardโ€™ situation when it came to their supply chains.โ€

  • German industry is optimistic
    German firms ‘will invest more in China’ despite trade war and scepticism over its opening up / SCMP
    โ€œTwo-thirds of German firms doing business in China said they planned to up their spending within the next two years, even though many were worried about Chinaโ€™s economic outlook and dissatisfied with the pace of reform.โ€

  • Commentary
    Opinion: The US cannot hold Chinaโ€™s economy back / FT (paywall)
    Former U.S. Treasury Secretary Lawrence Summers writes, โ€œSuppose China had been fully compliant with every trade and investment rule and had been as open to the world as the most open countries at its income level. China might have grown faster because it reformed more rapidly or it might have grown more slowly because of reduced subsidies or more foreign competition. But it is highly unlikely that its growth rate would have been altered by as much as 1 percentage point.โ€
    Opinion: US-China trade truce shows who holds the upper hand / FT (paywall)
    Jamil Anderlini writes, โ€œSince it is virtually impossible for Mr Xi to implement or even agree to such far-ranging changes to Chinaโ€™s economy, it is almost certain that the trade war will resume with a vengeance by the end of February 2019.โ€
    It’s not over: The US-China trade war is still on despite 90-day tariff ceasefire, experts say / CNBC

โ€”Lucas Niewenhuis

—–

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.

โ€”Jeremy Goldkorn, Editor-in-Chief


BUSINESS AND TECHNOLOGY:

POLITICS AND CURRENT AFFAIRS:

  • African swine fever
    China reports new African swine fever outbreak on farm in Beijing with nearly 10,000 pigs / Reuters
    โ€œChina’s agriculture ministry said on Monday it has confirmed a new African swine fever outbreak on a farm in capital city Beijing, as well as two other outbreaks in Shaanxi and Heilongjiang provinces.โ€

  • No cash for Pakistan
    China rules out giving hard cash to Pakistan / Times of India
    โ€œInstead of hard cash, China plans to eventually provide multiple forms of bailout packages to Pakistan in the shape of phenomenal investments in fresh projects, broadening the area of inclusive cooperation and tapping new avenues of tapping new avenues of collaboration under the China-Pakistan Economic Corridor (CPEC),โ€ said the Chinese consul general in Lahore.

  • No currency deal for India, but Beijing wants soy
    China says no to India’s proposal for bilateral trade in domestic currencies / Economic Times of India
    โ€œChina has not accepted India’s proposal to carry out bilateral trade in local currencies, which was aimed at bridging the ballooning trade deficit with the neighboring country, an official said.โ€
    China looking to boost agricultural exports to India, President Xi tells PM Modi / Livemint
    โ€œChina was looking to boost agricultural exports to India while increasing imports of rapeseed and soymeal from the country.โ€

  • Helping Argentina
    China agrees $9 billion currency swap with Argentina / MoneyControl
    โ€œChina and Argentina signed a $9 billion currency swap deal to boost the crisis-stricken South American country’s foreign currency reserves, its central bank announcedโ€ฆthis latest agreement will โ€˜contribute to greater financial stability and also facilitate tradeโ€™ between China and Argentina, according to the bank’s statement.โ€

  • Balancing with India and Russia
    China and Russia hold 1st three-way summit with India in 12 years / Nikkei Asian Review
    Xรญ Jรฌnpรญng ไน ่ฟ‘ๅนณ โ€œsaid the international community faces instability, adding, โ€˜The close cooperation of the three countries, with broad common interests, will be an important force in stabilizing the world’s affairs.โ€™โ€

  • Japan-U.S.-India meeting
    After First Japan-America-India Meet, China’s Measured Response / NDTV
    โ€œChina on Monday reacted cautiously to the first trilateral summit between the leaders of Japan, America and India, saying it โ€˜remained openโ€™ to normal cooperation between them, and hoped they will play a constructive role in promoting peace in the region.โ€

  • U.S. smiles at Taiwan, Beijing scowls

  • US commerce official visits Taiwan to bolster relations / Taipei Times
    โ€œUS Deputy Assistant Secretary of Commerce for Manufacturing Ian Steff yesterday arrived in Taiwan on a two-day visit to promote bilateral trade and investment, the American Institute in Taiwan (AIT) announced.โ€
    Beijing โ€˜steps up naval patrolsโ€™ in Taiwan Strait in pushback at US warships / SCMP

  • Balancing with Germany
    German president heads to China as Beijing courts European economic ties / SCMP
    โ€œChina will host a state visit by German President Frank-Walter Steinmeier this week as Beijing seeks to lock up economic ties with major European powers amid a trade war with the United States.โ€

  • Falun Gong in Thailand
    Taiwanese arrested in Thailand for alleged illegal broadcasting / Focus Taiwan
    โ€œA Taiwanese businessman was arrested in Thailand late last month on charges of operating an underground radio station, the [Taiwanese] Ministry of Foreign Affairs confirmed Mondayโ€ฆ In a November 30 report, Radio Free Asia in Washington said Chiang was arrested due to pressure from China because his underground radio station was affiliated with โ€˜The Sound of Hope,โ€™ a radio station in San Francisco founded by the Falun Gong organization.โ€

  • Wei Jingsheng โ€” China is โ€œgoing even further backwardโ€
    Exiled democracy activist Wei Jingsheng says China is going โ€˜further backwardโ€™ 40 years after his landmark protest / AFP via SCMP
    Translated comments by exiled Chinese dissident Wรจi Jฤซngshฤ“ng ้ญไบฌ็”Ÿ in an interview with Agence France-Presse:

    • โ€œXi Jinping doesnโ€™t just want to become emperor after 2023โ€ฆ He wants to be the emperor now.โ€

    • โ€œI should correct a popular saying, both inside China and internationally, which claims that Deng Xiaoping is responsible for the opening up and the reformโ€ฆ This reform only went halfway, economically but not politically. Now, in the Xi Jinping era, politically it is going even further backward.โ€

  • Punishing activists in Hong Kong
    Co-organizer Chan Kin-man tells court how Hong Kongโ€™s Umbrella Movement protests escalated beyond his control / Hong Kong Free Press
    โ€œA co-founder of the 2014 Hong Kong pro-democracy protests has testified in court that the โ€˜Occupy trioโ€™ lost control of the movement after it escalated into a full-blown street occupation. Retired sociology professor Chan Kin-man [้™ณๅฅๆฐ‘ Chรฉn Jiร nmรญn] was cross-examined on Monday as part of the ongoing trial of nine activists and politicians who were involved in the 79-day protests.โ€ ย 
    Hong Kong pro-democracy lawmaker barred from contesting local election / Reuters

  • Taiwan defense spending to โ€˜increase substantiallyโ€™
    Defense spending boost to help Chungshan Institute / Taipei Times
    โ€œNational defense expenditure is to increase substantially next year, with research and development accounting for more than three percent of overall defense spending, which is expected to lead to a major increase in the Chungshan Institute of Science and Technologyโ€™s business operations.โ€

  • A million people want to start working for the government this year
    Chinaโ€™s civil service more competitive than ever / Sixth Tone
    โ€œAround 920,000 people turned out to take Chinaโ€™s national civil service exam on Sunday, an average of 63 applicants for each open postโ€ฆ Another 140,000 or so candidates who had been approved to sit the exam didnโ€™t show up. This marks the 11th consecutive year in which over 1 million people applied to take the annual exams, but the current competition is especially fierce: This yearโ€™s recruitment quota is set at just 14,500 vacant posts โ€” around half as many as last year.โ€

  • The suspicious death of an environmental inspector
    Chinese police detain two after death of pollution inspector: China Daily / Reuters
    โ€œChinese police have detained two people in eastern Chinaโ€™s Zhejiang Province following the death of an inspector looking into environmental violations.โ€

  • Yellow snow
    Cold snap and dust storms blanket Chinaโ€™s far northwest in โ€˜yellow snowโ€™ / SCMP
    โ€œSome parts of northwestern China have been blanketed by yellow snow, a phenomenon the meteorological authority said was due to a combination of cold weather mixed with sandstorms.โ€

  • Another intentional crowd collision?
    Seven dead in China’s Sichuan Province after car drives onto sidewalk / Japan Times
    โ€œThe driver has been detained and the cause of the incident in Leshan, a city in Sichuan Province, is under investigation, police said in a statementโ€ฆ The crash came just five days after a [suicidal] driver hit a group of schoolchildren crossing the street in Huludao, a city in northeast Liaoning Province.โ€

SOCIETY AND CULTURE:


VIDEO ON SUPCHINA

Cute alert! Giant panda Gao Gao makes first public debut after returning to China

Giant panda Gao Gao, who is 28 years old, stayed at the San Diego Zoo in the U.S. for 15 years before returning to China.


FEATURED ON SUPCHINA

‘An American-made Asian movie’: Chinese moviegoers on ‘Crazy Rich Asians’

Crazy Rich Asians, with its majority-Asian cast, was both a critical and commercial success in the U.S. upon its release over the summer. But its reception in mainland China has been decidedly muted, as it brought home a meager $1.2 million over the weekend after its November 30 debut. But what did those who saw it think?

Kuora: Breaking the Great Firewall

Let’s talk internet censorship. Why does the Chinese government believe it necessary? How do people within China feel about it? Can “heroes” rally together to break the Great Firewall, thus “freeing” those trapped within? Kaiser Kuo discusses these questions in this week’s Kuora, and introduces his famous “aluminum foil” analogy.


SINICA PODCAST NETWORK

Sinica Early Access: The Nature Conservancy in China

This week on Sinica, Kaiser speaks with Charles Bedford, who has been managing director since 2012 of The Nature Conservancy (TNC)โ€™s Asia Pacific region, which encompasses Asia, the Pacific Islands, Indonesia and Australia. The organization focuses on solving incredibly pressing and paramount issues central to the health of our planet. TNC is a charitable environmental organization that focuses on bringing the โ€œbest available scienceโ€ to decision-makers in all levels of government and local communities both inside and outside of the United States.

  • Sinica Early Access is an ad-free, full-length preview of this weekโ€™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 71

This week on the Caixin-Sinica Business Brief: Trump-Xi meeting in Argentina, Google’s internal opposition to its China search engine project, an artificial rainfall project in western Chinaโ€™s Qinghai Province, Doug Young on Chinaโ€™s recent upgrade of its train network, and more.


PHOTO OF THE DAY

Family time

A father plays with his daughters in a public square in Linyi, Shandong Province. Photo by Daniel Hinks.


Do you have a China-related photo you want to share with the world? Send it, along with a bio and headshot of yourself, to jia@thechinaproject.com and you may see it posted as our photo of the day!