Huawei v. The United States of America

Dear Access member,

If you’re in New York next week, take a look at these two events:

• March 12: Our first springtime Women’s Network Series event, featuring Catherine Li of blockchain company ChainDD.

• March 14: The second NüVoices event in the city, “NüVoices of the Diaspora: An evening of storytelling in NYC.” The event will be “headlined by both young and veteran luminaries of Asian American writing and performance art. Muna Tseng, Alvin Eng, Karoline Kan, and Angel Yau will each present from their oeuvre varying from a reading, spoken word, video and music.”

And exclusively for Access members: We would like to offer you a free trial of our new The China Project Direct conference-call dialogue series. If you would like to join me for our timely analysis of the Two Sessions with Cheng Li on March 12, please email me at jeremy@thechinaproject.com.

—Jeremy Goldkorn, Editor-in-Chief

1. Huawei says its treatment in the U.S. is unconstitutional

Gerry Shih of the Washington Post reports that Huawei today announced “it has sued the U.S. government to challenge a law that bans federal agencies from buying its telecommunications equipment, opening a new front in the metastasizing global contest between the Chinese technology giant and Washington.”

• “The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products. We are compelled to take this legal action as a proper and last resort,” said a Huawei executive at a press conference to announce the suit.

• “The Framers of the United States Constitution were deeply concerned about the potential abuse of legislative power,” begins Huawei’s complaint. It argues, “One of the Framers’ particular concerns was that the legislature would use its power to target specific individuals for adverse treatment,” and adds that the U.S. government’s treatment of Huawei is an instance of this, and therefore unconstitutional. You can read the whole complaint here, courtesy of the Wall Street Journal (PDF). Huawei’s lawyer’s statement is here.

• Huawei is represented by a Trump-connected law firm — Jones Day. Per Wikipedia:

Jones Day partner Don McGahn, who was previously a member of the Federal Election Commission, served as counsel for the 2016 Donald Trump presidential campaign and was later nominated to serve as Trump’s White House Counsel. At least 14 Jones Day attorneys have been appointed to work for the Trump administration as of March 2017.

• Could the lawsuit damage Huawei even further? Beijing-based lawyer and former chair of the American Chamber of Commerce in China James M. Zimmerman noted on Twitter:

Unlike China, U.S. court discovery rules are a bottomless pit of depositions and dox requests. Whether Huawei, per the complaint, is “a private, non-government-owned company” is going to be fodder for discovery and a possible exposé of state secrets. Getting interesting!

In a separate development, we noted last week that after the Canadian government approved extradition proceedings for Huawei CFO Mèng Wǎnzhōu 孟晚舟, she sued the “Canada Border Services Agency, the RCMP and the federal government alleging ‘false imprisonment’ and ‘breach of constitutional rights,’” according to documents from the British Columbia Supreme Court.

Other Huawei news

• Long before Trump’s trade war with China, Huawei’s activities were secretly tracked / Reuters

Long before Trump initiated a bitter trade war with China, Huawei activities were under scrutiny by U.S. authorities, according to interviews with ten people familiar with the Huawei probes and documents related to the investigations seen by Reuters.

The U.S. focus on Huawei intensified after years of investigation into smaller Chinese rival ZTE Corp, and relied in part on information collected from devices of company employees traveling through airports.

• Huawei boosts Japan parts orders, hedging US risks / Nikkei Asian Review

2. Endangered animal traffickers in court

Some good news: The BBC reports:

Authorities in China are prosecuting 11 people for smuggling $119m worth of fish swim bladders from Mexico. They are accused of bringing in 20,000 swim bladders from totoaba fish from the Gulf of California in Mexico and selling them in China…They are used in traditional medicines in China and can fetch up to [$20,000] on the black market.

Prosecutors in Guangdong Province said the smugglers had been operating for over three years before they were caught. The totoaba is on the International Union for Conservation of Nature’s critically endangered list.

3. New Zealand influence debate — a conflict of interest?

“China expert Anne-Marie Brady has been blocked from submitting to a select committee inquiry examining possible foreign interference in New Zealand elections,” reports Kiwi site Newsroom.

The chair of the committee that rejected Brady is a Labor MP named Raymond Huo (霍建强 Huò Jiànqiáng). In Anne-Marie Brady’s influential work Magic Weapons: China’s political influence activities under Xi Jinping (PDF), Huo is named as someone who “works very closely with the PRC representatives in New Zealand,” and “works very publicly with China’s united front organizations in New Zealand and promotes their policies in English and Chinese.”

4. Why are China’s diplomats so undiplomatic?

Bloomberg reporter Peter Martin on Twitter: “Chinese diplomats have been involved in angry outbursts around the world in recent months. My latest [article is] on how Xi is radicalizing Chinese diplomacy, including details of self-criticism sessions in the Ministry of Foreign Affairs and how officials fear voicing dovish opinions”: Diplomatic outbursts mar Xi’s plan to raise China on world stage (porous paywall). Two notable quotes:

• “I don’t think we are witnessing a pattern of misstatements and slips of the tongue,” said Ryan Hass, a fellow at the Brookings Institution who previously oversaw China affairs at the U.S. National Security Council. “We seem to be watching China’s diplomats matching the mood of the moment in Beijing. Beijing rewards diplomats that are aggressive advocates of China’s views and scorns those that it perceives as overly timid… Some in Beijing also seem to be growing frustrated that China’s rising national power is not yet translating into the types of deference from others that it seeks.”

• “Chinese ambassadors always feel they have to speak to the leaders in Beijing more than to the local public. Their promotions depend on it,” said Susan Shirk, a former U.S. deputy assistant secretary of state for East Asia. “If today what they say is more overtly anti-American or anti-Western then that reflects the changing foreign policy line.”

In response, Magnus Fiskesjö, a professor at Cornell University, tweeted: “Good article — could’ve mentioned the extremely aggressive ambassador to Sweden, who’s really made himself infamous. Yet the prize for the most brazen-aggressive interference in another country may go to this diplomat in Myanmar.”

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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 is actually going on with the Chinese economy?
  China ‘exaggerated’ GDP data by 2 percentage points for at least nine years, new study says / SCMP

China has overestimated its nominal and real growth rates by about two full percentage points on average between 2008 to 2016, with the miscalculation increasing each year, according to a new study published on Thursday… The paper, “A Forensic Examination of China’s National Account,” was submitted to the “Brookings Papers on Economic Activity,” a journal published by the US-based think tank Brookings Institute twice a year on macroeconomic issues that are influencing the public policy debate. It will be formally presented in Washington on Thursday.

• Electric cars: BMW and Tesla
  BMW’s China electric car export plans on hold amid tariff uncertainty / Reuters via Channel NewsAsia
  “BMW’s ambitions to establish China as a hub for exporting electric cars are in limbo because of uncertainty over potential trade tariffs between China and the United States, company executives told Reuters.”
  Tesla blames misprinted label for China customs hiccup / Reuters via Yahoo
  “Tesla Inc said on Tuesday that China’s customs authorities have accepted the electric carmaker’s plan to resolve problems with the clearance of its Model 3 sedans that centered around misprinting of labels.”

• Oil refineries
  China’s thirst for oil is no tempest in a teapot / Washington Post
  “China’s imports of crude have been surging since 2015, when Beijing started allowing its ‘teapot’ refineries — small-scale independent operations that are mostly based in Shandong Province — to buy from abroad.” Demand from these small refiners “is triggering a surge of exports that threatens to undermine profits for rivals across Asia.”

• Is Wanda scion’s video-streaming company bankrupt?
  Live streaming platform Panda TV rumored to file for bankruptcy / China Film Insider
  “Recently, rumors about Panda TV’s bankruptcy has been circulated on the internet. One staff member from the company’s IT department told press that he had received notice that he would not be paid this month and should start looking for another job.”
  In June 2017, the South China Morning Post reported that Wáng Sīcōng 王思聪 — whose father is the billionaire founder of Dalian Wanda Group Wáng Jiànlín 王健林 — was “setting up an e-sports streaming service that will go head-to-head with Amazon’s Twitch.tv.”  

POLITICS AND CURRENT AFFAIRS:

• Two Sessions — Xi returns to favorite topic of poverty alleviation
  Xi stresses perseverance in fight against poverty / Xinhua

• Health insurance
  China’s health insurance to cover more lifesaving drugs / Sixth Tone
  “People with pulmonary hypertension and other rare diseases hope an update to the national catalog of insured drugs will ease the financial burden on their families.”

• Hacking
  Chinese hackers target universities in pursuit of maritime military secrets / WSJ (paywall)
  “Chinese hackers have targeted more than two dozen universities in the U.S. and around the globe as part of an elaborate scheme to steal research about maritime technology being developed for military use, cybersecurity experts and current and former U.S. officials said. The University of Hawaii, University of Washington and MIT are among schools hit by cyberattacks.”

• Pakistan, India, and Jaish-e-Mohammed
  China walks fine line as India calls on United Nations to impose anti-terrorist sanctions on Pakistani militant leader / SCMP
  “A senior Chinese diplomat said China and Pakistan will defend their core interests as India called on Beijing and the other four permanent members of the UN Security Council to place a Pakistani militant leader on a counterterrorist sanctions list.”
  Pakistan intelligence used JeM for attacks in India: Pervez Musharraf / The Statesman of India
  “Former Pakistan President Pervez Musharraf on Wednesday claimed the Jaish-e-Mohammed (JeM) was a terror outfit but indicated that his country’s intelligence had used it to carry out attacks in India during his tenure.”
  See also a clip of Musharraf remarks on Twitter (in Urdu).
  China praises Pakistan for ‘restraint’ with India, Islamabad says thank you / Hindustan Times

• Censorship: The Twitter crackdown
  A most Chinese public disappearance on Twitter: @airmovingdevice / David Cowhig’s Translation Blog
  American scholar and former diplomat David Cowhig writes: “In the shutdown of this enlightening Twitter account, we see how the Internet, the proliferation of online resources, and China’s determination to be a modern country comes into conflict with the Chinese Communist Party’s need to control every aspect of Chinese society.”

• Lhasa: Number of religious activities and participants both “reduced to below 10 percent”
  Tibetan religious activity slashed, Lhasa mayor confirms / SCMP
  “Just days before the 60th anniversary of Tibet’s deadly uprising against Beijing’s rule, the mayor of its capital Lhasa has made a rare public statement about the extent of the government’s restrictions on religious activities in the spiritual center of Tibetan Buddhism.”

• The controversial Greater China extradition agreement
  Security minister won’t back down on extradition agreement with mainland China, Macau and Taiwan despite requests to exempt some white-collar crimes / SCMP
  “Hong Kong’s security chief has opposed watering down a proposed extradition agreement with mainland China despite escalating pressure from the city’s business heavyweights and even a government adviser.”

• Rights lawyer: Out of jail, but not free
  Freed Chinese human rights lawyer Jiang Tianyong ‘threatens to protest if reunion with wife and daughter is blocked’ / SCMP

A prominent Chinese human rights lawyer who was released from prison last week has threatened to protest if the authorities continue to keep him apart from his wife and daughter, neither of whom he has seen for six years, a source has said. Jiāng Tiānyǒng 江天勇 is now back in his parents’ home in Henan province, but his wife said he was being kept under close watch by police, with officers following him…and preventing him from speaking to strangers.

• The surveillance state
  China chat log leak shows scope of surveillance / AFP via France24

A leak of around 364 million online records in a Chinese database, including private messages and ID numbers, has again highlighted the size and scope of Beijing’s mass surveillance system.

The files show a wealth of information linked to online accounts, including GPS locations, file transfers, and chat logs, according to the database discovered by Victor Gevers, a security researcher at Dutch non-profit GDI Foundation.

• Taiwan: Two ways of dealing with China  
  Taiwan asks US for new fighter jets to defend against China / AFP via Channel NewsAsia
  “We made the request to purchase (fighter jets) because China has been increasing its military strength and we are starting to have an imbalance of power in our air defense capabilities.”
  Wang Jin-pyng announces bid to be president / Taipei Times

Chinese Nationalist Party (KMT) Legislator Wang Jin-pyng (王金平 Wáng Jīnpíng) yesterday announced his bid for next year’s presidential election, asking people to give him four years to “let Taiwan shine on the global stage.”…

…Hailing Taiwan as “a nation exporting love,” he said love is how the nation has cemented its reputation and would navigate the world, for “mercy has no enemy.”

This philosophy can also be applied to the nation’s relationship with China, as the sons and daughters of the zhōnghuá mínzú (ethnic Chinese, 中華民族) have the same roots, he said. Taiwan is the future hope of the zhonghua minzu, he said…

…“If you want to make peace with your enemy, you have to work with your enemy. Then he becomes your partner. The aphorism shows the way for the future of the two sides of the Taiwan Strait” he said, quoting former South African president Nelson Mandela.

• Belt and Road bumps
  China’s Belt and Road plan adds to Italian divisions / FT (paywall)
  “Divisions over plans to endorse China’s Belt and Road Initiative have driven a further wedge into Italy’s coalition government as its two populist parties prepare for showdown talks over a crucial rail project. This week, Italy became the first G7 country to formally endorse China’s Belt and Road global investment drive, prompting a sharp White House rebuke.”
  Beware of China ‘debt trap,’ Malaysia’s Mahathir tells the Philippines / Straits Times
  “Malaysian Prime Minister Mahathir Mohamad cautioned the Philippines on Thursday (March 7) over falling into a ‘debt trap,’ as the country banks on China to bolster growth.”
  Malaysia’s Mahathir: Green light for China-backed East Coast Rail Link if price is right / SCMP
  “Malaysian Prime Minister Mahathir Mohamad said on Thursday he would give the green light to the China-backed East Coast Rail Link project he had previously wanted to dump but only if the Chinese contractor agreed to a significant price reduction.”

• Anti-Chinese sentiment in Vietnam
  Vietnam jails 15 over anti-China protests / AFP via Channel NewsAsia
  “Vietnam on Thursday (March 7) jailed 15 people for ‘causing public disorder’ after violent demonstrations last year over a proposed investment project that protesters said catered to Chinese firms.”

SOCIETY AND CULTURE:

• Malaysia Airlines flight MH370
  ‘I will never give up’: Relatives of missing Chinese on MH370 vow to keep searching / Reuters via Channel NewsAsia
  “Every Saturday, Chinese farmer Li Eryou still calls the long-disconnected mobile telephone number of his son, who was among the 239 aboard Malaysia Airlines flight MH370 when it vanished five years ago in the world’s greatest aviation mystery. ‘I don’t care what’s on the other end,’ said the 60-year-old farmer from rural Handan, in the northern province of Hebei, as he described his weekly ritual. ‘I would always say a few words to my son.’”

• Skateboarding
  China female longboarder rides into online fame / AFP
  “Mu Qing has over half a million followers on social media and is one of longboarding’s biggest stars in China.”
  China female longboarder rides into online fame / AFP on YouTube

• Dinosaurs and paleontologists
  This badass T-rex relative once terrorized China / That’s Guangzhou
  “This is the first part of our ‘Welcome to Jurassic China’ series, which takes That’s readers on a journey to explore prehistoric China and to meet the people who earn their keep studying, stealing and recreating the nation’s long-extinct dinos.”

VIDEO ON SUPCHINA

Huawei on its lawsuit against the U.S. government: ‘We are left with no choice’

Huawei, China’s biggest telecommunications equipment manufacturer, filed a lawsuit against the U.S. on Wednesday over the government’s ban on its products. The announcement was a “last resort” — according to Huawei’s rotating chairman, Guo Ping — to end a years-long battle with the U.S. government that has boiled over in recent months.

FEATURED ON SUPCHINA

Chinese state media editorials, written by no one ever

In China, what happens when you find your name attached to an editorial you didn’t write, expressing opinions that aren’t yours? Last month, an editorial carrying the byline of former prime minister of New Zealand Jenny Shipley appeared in the People’s Daily, a Chinese Communist Party mouthpiece. The problem was, she never wrote it — the paper simply rearranged a past interview with her and published it under her name. Shipley is not the first victim of this practice of journalistic malfeasance from Chinese media.

SINICA PODCAST NETWORK

Sinica Podcast: Everything you ever wanted to know about Taiwan but were afraid to ask, Part 2

This week, we feature the second half of an extensive interview with Shelley Rigger, a political scientist at Davidson College and the leading U.S. expert on the politics of Taiwan. This second half of the interview, which covers the history of Taiwan from the 1990s to the present, was conducted by Neysun Mahboubi of the UPenn Center for the Study of Contemporary China Podcast (one of our favorite China podcasts), and is republished here with the Center’s permission.

• Subscribe to the Sinica Podcast on Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed into your favorite podcast app.

PHOTO OF THE DAY

Watching a musical in Suzhou

Tourists in Suzhou during the Lunar New Year enjoy a live performance of the story of Flirting Scholar (唐伯虎点秋香 tángbó hǔ diǎn qiūxiāng), a popular 1993 Hong Kong film.

—Jia Guo