A bull’s-eye on Huawei’s kitschy Shenzhen headquarters

Access Archive
Jeremy Goldkorn

Dear Access members,

One must-read piece today: Professor James Millward in the New York Review of Books: ‘Reeducating’ Xinjiang’s Muslims.

You may be familiar with Jim from previous Sinica Podcasts: Alarm bells in the ivory tower: The Cambridge University Press censorship fiasco and It’s all connected: Silk Roads old and new. We also have another new podcast with Jim on Xinjiang, to be published in the next few weeks.

Another recommended read: Engineers of the Soul: Ideology in Xi Jinping’s China, by veteran Australian journalist and government adviser John Garnaut on Sinocism.

If you’re in a rush today, here are the China stories you need to know:

  • Huawei received bad news on multiple fronts: The U.S. federal government is investigating it for stealing trade secrets, while the American congress is proposing bans on selling to the company. The German government and Oxford University are also souring on Huawei.

  • Beijing received good news: The Trump administration is considering easing tariffs as part of a trade deal at the beginning of March, or even sooner as a goodwill gesture.

  • Another Canadian was briefly detained in Beijing, en route back to Canada, but released after two hours.  

  • Dozens of Fortune 500 companies were identified as having the “wrong listing of Taiwan” on their websites, in a second wave of what the Trump administration last year dubbed “Orwellian nonsense” from Beijing.

—Jeremy Goldkorn and team

1. Taking aim at Huawei

On top of all the setbacks Huawei has received in recent months — such as employees being arrested in Canada and Poland, and countries from Australia to New Zealand to Japan banning the company from participating in sensitive sectors — Huawei received at least four pieces of bad news in the past day:

  • The U.S. government is “pursuing a criminal investigation of China’s Huawei Technologies Co. for allegedly stealing trade secrets from U.S. business partners, including technology used by T-Mobile US Inc. to test smartphones,” the Wall Street Journal reports (paywall).

  • A “bipartisan group of US lawmakers introduced bills on Wednesday that would ban the sale of US chips or other components to Huawei Technologies Co Ltd, ZTE Corp or other Chinese telecommunications companies that violate US sanctions or export control laws,” the SCMP says.

  • Oxford University “will suspend all new research grants and donations from Huawei… In an email sent to its computer science doctoral students, the university said the Committee to Review Donations — part of the university’s Council Secretariat — made the decision last week,” also according to the SCMP.

  • Germany is “actively considering stricter security requirements and other ways to exclude China’s Huawei Technologies [HWT.UL] from a buildout of fifth-generation (5G) mobile networks, the Handelsblatt newspaper reported,” Reuters says.

The Chinese foreign ministry took aim at the U.S. legislation proposal in particular, saying the “real intent of the United States is to employ its state apparatus in every conceivable way to suppress and block out China’s high-tech companies,” the Guardian reports. The Global Times dubbed (in Chinese) the American actions “technological McCarthyism” (高科技领域的麦卡锡主义 gāokējì lǐngyù de màikǎxī zhǔyì).

But it is important to keep in mind, as the BBC points out, that “bans aside, the company is doing well. In 2018 it shipped more than 200 million handsets — second only to Samsung.”

—Lucas Niewenhuis

2. Trade war, day 196: U.S. officials debate easing tariffs

Vice premier Liu He was officially confirmed by the Chinese Commerce Ministry to be travelling to D.C. on January 30-31 for high-level trade talks. When he arrives, he may be greeted with an unusual goodwill gesture from his interlocutors. The Wall Street Journal reports (paywall):

U.S. officials are debating ratcheting back tariffs on Chinese imports as a way to calm markets and give Beijing an incentive to make deeper concessions in a trade battle that has rattled global economies.

The idea of lifting some or all tariffs was proposed by Treasury Secretary Steven Mnuchin in a series of strategy meetings… [The debate] hasn’t yet reached President Trump… [but] the president has made clear he wants a deal—and is pressing [trade representative] Lighthizer to deliver one…

In talks with members of the trade team, Mr. Mnuchin raised the possibility of offering to eliminate tariffs during discussions scheduled for Jan. 30 in Washington with top Chinese trade envoy Liu He—a month ahead of the target date to conclude the negotiations.

In the discussions with China, [Lighthizer] has said the U.S. should remove tariffs only when China has shown it has carried out promises made during the talks.

But Mr. Lighthizer has shown some signs of easing his position, say people involved in the talks, including raising the possibility that some tariffs could be eliminated if the U.S. strikes a favorable deal on March 1.

Since last week, it has become clear that the trajectory has shifted towards tariffs being lowered, rather than kept or raised at the end of the 90-day period, largely because Trump is reportedly eager to rally stock markets. This is more evidence of that trend.

Other trade-war-related news today:

—Lucas Niewenhuis

3. Another Canadian briefly detained by Beijing

Ti-Anna Wang (王天安 Wáng Tiānān), the daughter of jailed Chinese democracy advocate Wáng Bǐngzhāng 王炳章, was reportedly separated from her husband (they are both Canadian citizens) and detained with her baby daughter for two hours while in transit through Beijing.

  • Wang had received a valid visa and attempted to enter China on January 9 to visit her ailing father, but was denied entry and sent to South Korean island, CTV News reports.

  • On January 16, she tried to fly back to Canada via China, but was detained in Beijing and sent back to South Korea, the Star Vancouver reports.

  • Irwin Cotler, a lawyer who has argued for Wang Bingzhang’s release for years, connected the harassment of Ti-Anna Wang with that of other Canadians in recent weeks. Ti-Anna Wang stated in an email to Cotler, “It was a shocking, terrifying and senseless ordeal with no purpose but to bully, punish and intimidate me and my family.”

Other links related to Canada-China relations:

—Lucas Niewenhuis

4. More Orwellian nonsense, now directed at dozens of Fortune 500 companies

We made a small note in section 6 of our Red Paper:

American companies, particularly airlines, came under pressure from China for listing Taiwan as a “country” in drop-down menus and similar offenses in Beijing’s eyes. The White House called this “Orwellian nonsense,” and pushed back on Beijing’s censorship, but by late July, Delta Air Lines, United Airlines, and more companies joined dozens of others who accommodated Beijing’s demands.

Today brings news of more Orwellian nonsense, originating from a report by the Chinese Academy of Social Sciences (CASS) and the Internet Development Research Institution at Peking University and reliably transmitted by the Global Times:

83 Fortune 500 firms have wrong listing of Taiwan, Hong Kong and Macao: research

A total of 83 foreign companies among the Fortune 500 companies listed in 2017 still show Taiwan, Hong Kong or Macao as not being integral to China on their websites, a report showed on Wednesday, drawing strong criticism from industry insiders who called on the firms to “respect China’s sovereignty and territorial integrity.”

Those companies include Nike, Apple, and Amazon, the SCMP notes, though this wave of Beijing-pushed political correctness, like the last one, also brings pressure on non-American companies.

This comes two weeks after Taiwanese President Tsai Ing-wen’s speech outlining a vision for a “healthy and normal” relationship between Beijing and Taipei, and Xi Jinping’s total rejection of that vision. Xi’s counteroffer of a Hong Kong–style “one country, two systems” is equally unsavory to Taiwanese — 75 percent oppose integration by that approach, according to a new survey.

A presidential spokesman in Taipei decried the “out-of-control actions” of Beijing, including the new pressure on Fortune 500 companies, and called on the “international community to face this squarely and to unite efforts to reduce and contain such actions.”

Minxin Pei, a professor at Claremont McKenna College, writes in the ASPI Strategist: “While inflicting economic pain and diplomatic humiliation on Taiwan may produce some short-term psychological satisfaction for China, the island will adjust over time and Chinese actions will yield decreasing returns… Unless China’s leaders break the cycle, an escalating battle of wills with the U.S. could erupt into direct conflict.”

Three other Taiwan links today:

  • Taiwan parts of recent Pentagon report highlighted
    U.S. increasingly concerned about a Chinese attack on Taiwan / Foreign Policy (porous paywall)
    “A new assessment of China’s military power published by the department’s Defense Intelligence Agency hints that Beijing is building up its military capabilities so that it will have a range of options to attack Taiwan if it decides to — and potentially the United States if it intervenes militarily.”

  • Seeking economic buffers in region
    Taiwan to closely monitor CPTPP membership discussions: MOFA / Focus Taiwan
    “Taiwan will closely watch upcoming membership expansion discussions for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) to be held this Saturday to prepare for its push to join the trade bloc, a Ministry of Foreign Affairs (MOFA) official said Thursday.”

  • African swine fever worries
    Taipei airport checks all carry-on luggage of Chinese tourists in bid to halt spread of African swine fever / Hong Kong Free Press
    “Taipei’s Taoyuan International Airport is checking all carry-on luggage belonging to tourists from Hong Kong, Macau and mainland China for pork products, in a bid to prevent the spread of African swine fever.”

—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.

—Jeremy Goldkorn, Editor-in-Chief

BUSINESS AND TECHNOLOGY:

POLITICS AND CURRENT AFFAIRS:

SOCIETY AND CULTURE:

The newest novel by celebrated Chinese novelist Yan Lianke is a poetic nightmare that’s being compared with James Joyce’s Ulysses.

The Day the Sun Died is set in the course of a single, perpetual summer day and night in which the inhabitants of a small village in China rise from their slumber and sleepwalk through town.

VIDEO ON SUPCHINA

This dad performs surgery on fruit

Wang Yexiao, age 32, from Hegang, Heilongjiang Province, has filmed himself performing “surgery” on all kinds of fruit, including grapes, mangoes, bananas, and durian. As a doctor, he said he wanted to use the video to teach people about surgery and other medical information.

Get your nails done in Lunar New Year fashion!

This manicurist in China goes all the way with nail designs, and brings Lunar New Year designs literally to people’s fingertips.  

FEATURED ON SUPCHINA

China Business Corner: WeChat founder Allen Zhang and the Tencent conference

In the wake of Tencent’s recent annual conference, it’s WeChat mastermind Allen Zhang week here at China Business Corner. First we’ll take a look at an extended profile of the man himself, whose product decisions about WeChat have more immediate impact on Chinese people’s daily lives than most political decisions (the article, incidentally, was censored after one day), then turn to his recent four-hour speech at the Tencent conference, which some critics have argued is a “reality distortion field” that doesn’t address WeChat’s fundamental problems.

Luckin Coffee continues ambitious rampage: Is it really China’s Starbucks — or the next Ofo?

Luckin Coffee, founded in November 2017, already has 2,000 offline stores, and it recently announced plans to open another 2,500 stores in 2019, which would make it the largest coffee retail provider in China. But it has also been significantly subsidizing its coffee and investing extravagantly in advertisements, leading many to wonder — will it surpass Starbucks in China, or is it destined to run out of money first, like Ofo?

SINICA PODCAST NETWORK

Sinica Podcast: Gene-edited babies, CRISPR, and China’s changing ethical landscape

This week on Sinica, Kaiser and Jeremy chat with Christina Larson, a science and technology reporter for the Associated Press, about a major story that her team broke: the Chinese scientist Hè Jiànkuí 贺建奎 announcement that he had edited the genes of embryos conceived in vitro, and that twin girls had been born, making them — if his claims are true — the world’s first gene-edited babies.

  • This is the public release of Sinica. Subscribe to it on Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed into your favorite podcast app.

  • Access members can get an exclusive early preview of Sinica each week by plugging this RSS feed directly into their podcast app.

PHOTO OF THE DAY

Wedding feast

In a village outside Lijiang, Yunnan Province, preparations are made for a wedding feast, which will feed over 600 people from surrounding villages. The celebration features eating, drinking, and dancing around a bonfire to Lisu ethnic music. Photo by Matthew Chitwood, who is @theotherchina on Instagram.

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of The China Project, and co-founder of the Sinica Podcast. Read more

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