Oracle to slash 1,600 jobs in China; armyworm plague; and used Chinese cars for Africa

Dear Access member,

The latest round of trade talks between China and the U.S. starts this evening in Washington D.C., and the outcome is as unpredictable as ever.

There’s plenty of other news that won’t grab the headlines today in the general interest media, even though they should. We’ve included them at the top of today’s email.

As always, send me feedback anytime at jeremy@thechinaproject.com, or write to editors@thechinaproject.com to reach our whole editorial team.

—Jeremy Goldkorn, Editor-in-Chief

1. Oracle lays off 900 staff in China, more cuts coming

U.S. computer technology giant Oracle is shuttering its entire China Research and Development Center (CDC). More than 900 employees have already been laid off, and the second round of job cuts is expected to happen in July, according to reports circulating on the Chinese internet.

• The layoff notice was made in an all-hands meeting on May 7, according to people familiar with the matter. The employees affected by the first round of layoffs were told to sign their releases before May 22 to claim full severance packages. After the complete closure of CDC’s Beijing office, Oracle’s employees in Nanjing, Dalian, and Shenzhen are on the line to lose their jobs. By slashing its entire staff of CDC, Oracle is planning to cut over 1,600 jobs in China.

• Rumors about potential layoffs started floating around since the end of last year, when CDC stopped hiring new people, according to the 21st Century Business Herald (in Chinese).

• The reasons for the staff cuts are not clear. The company said the layoffs were because of major restructuring of its business, but some workers who protested in front of their former offices on May 7 held signs up that read: “We are against political layoffs. Keep politics away from technology!”

• Nationalistic rag Global Times also cited “industry insiders” who said “political factors” were part of Oracle’s decision.

• Oracle’s co-founder Larry Ellison last October gave an interview to Fox News in which he describes China as a big threat to the U.S.

For a more detailed article on this story, including more on Chinese responses to the news, please click through to The China Project.

—Jiayun Feng

2. Armyworms invade, as China’s farms reel from swine fever

While China is still coping with the African swine fever epizootic, the U.S. Department of Agriculture warns of a new threat to China’s farms in a report titled Voracious fall armyworm invades south China. The information in it is broadly consistent with this Chinese-language report from the Beijing News.

• Fall armyworms are the larvae of Spodoptera frugiperda, a species of moth. They gorge on a variety of important crops, including corn, soybeans, and rice.

• The outbreak was first detected in China in January 2019, and has now “spread across China’s southern border and currently impacts about 8,500 hectares (127,000 mu) of grain production in Yunnan, Guangxi, Guangdong, Guizhou, Hunan, and Hainan provinces.” The Beijing News report linked above says the pest has been found in 11 provinces and is officially a “local pest disaster” (局部虫灾 júbù chóngzāi).

• An official emergency action plan is in place; here are the outlines (in Chinese). Measures include biological and chemical pesticides, and weeding to get rid of plants that encourage Armyworms.

• But the problem is not under control: “Experts report that there is a high probability that the pest will spread across all of China’s grain production area within the next 12 months,” according to the U.S. Department of Agriculture.

• Meanwhile, “Chinese consumer inflation rose to a six-month high in April, with the cost of pork jumping as the country battles with a widespread outbreak of African swine fever, while producer prices rose at a faster pace than forecast,” reports the Financial Times (paywall):

The official consumer price index rose 2.5 percent year-on-year April, according to the National Bureau of Statistics, its highest reading since October and accelerating from the 2.3 percent increase in the previous month… Pork prices, which are heavily weighted in the gauge’s basket of goods, rose 14.4 percent from 5.1 percent in the previous month.

• If you’re searching for further information in Chinese, fall armyworms are variously called cǎo dì tān yè é 草地贪夜蛾, nián chóng 黏虫, and tìzhī chóng 剃枝虫.

3. Chinese used cars for Africa

One of the more interesting commentators on African affairs on Twitter is the Nigerian Onye Nkuzi. Today he tweeted:

Most significant news this week is the entry of the Chinese into the used car market in Africa — previously dominated by US and “Belgium.”

They will utterly annihilate all competition.

Nkuzi was reacting to the news earlier this week that China’s Ministry of Commerce has started allowing exports of used cars. Reuters says that the move is the “latest bid to prop up the auto sector.” Sales of new cars in China have been declining for nearly a year.

The used-car market in Africa is already enormous. With a few exceptions — such as South Africa, which has a thriving auto manufacturing sector — most African buy imported cars, and many of them are used. The secondhand-car market is so big that Volkswagen, BMW, Toyota, Nissan, and other car companies recently “joined forces to lobby governments for steps that would reduce the imports,” according to Reuters.

—Jeremy Goldkorn

4. ‘I have no idea what’s going to happen’ — Trump on trade talks

Chinese Vice Premier Liú Hè 刘鹤 arrived in Washington today, for what SCMP says is the 11th round of trade talks since the trade war began.

By the time you read this, everything may have changed, but this is a roundup of what’s happening in the hours leading up to tariffs again ratcheting up on both sides:

• “I have no idea what’s going to happen,” Trump said, though he was pleased with the “very beautiful letter from President Xi” that he received, the SCMP reported.

• Negotiations began at 5 p.m., including a dinner between Liu He and U.S. Trade Representative Robert Lighthizer, and tariffs hit a minute after midnight tonight.

• Foreigners are “dumping Chinese stocks” at the fastest rate since late 2016 in anticipation of the tariffs, Bloomberg reports (porous paywall).

• China Mobile was blocked from the U.S. phone service market by a unanimous 5-0 vote by the Federal Communications Commission, the SCMP reports.

Three other links to take a look at today:

• Trump could raise tariffs on China. Here’s how China could respond. / NYT (porous paywall)
  “China’s obvious choice would be higher, and possibly wider, tariffs. It could raise the retaliatory tariffs that it imposed on American-made goods last autumn… China could also revive import barriers specifically aimed at some of the states that supported Mr. Trump in the 2016 election.”
  “Another option is for the Chinese government to encourage the country’s consumers to boycott American products.”
  And then there are even harsher options: Delays on imports and other non-tariff hindrances on business (the infamous “qualitative measures” implemented earlier in the trade war), adjustments to supply chains that make life painful for American businesses, or depreciation of the Chinese currency.

• China hardens trade stance as talks enter new phase / WSJ (paywall)

The new hard line taken by China in trade talks [see The China Project summary] — surprising the White House and threatening to derail negotiations — came after Beijing interpreted recent statements and actions by President Trump as a sign the U.S. was ready to make concessions, said people familiar with the thinking of the Chinese side…

In particular, these people said, Mr. Trump’s hectoring of Federal Reserve Chairman Jerome Powell [on Twitter] to cut interest rates was seen in Beijing as evidence that the president thought the U.S. economy was more fragile than he claimed.

• A mysterious account in China seems to have an inside track on trade talks / Bloomberg (porous paywall)

As most of China’s media fell into collective silence Monday following Trump’s threat to escalate the trade war, Taoran Notes [陶然笔记 táorán bǐjì], a once obscure account on Tencent Holdings’ WeChat platform, somehow escaped the intensified censorship. It became one of the few voices offering an opinion on China’s negotiation strategy.

In a 1,500-character commentary published Monday, Taoran warned the U.S. not to fantasize about China making concessions that will damage its own interests. The comment was later re-published by the WeChat account of People’s Daily, a rare move for the official newspaper of the Communist Party.

—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:

• Fintech: Hong Kong’s banks should be quaking in their boots
  Tencent and Alibaba to challenge Hong Kong banks / FT (paywall)
  “Tencent and Alibaba were granted banking licences by the Hong Kong Monetary Authority, along with Xiaomi, the world’s fourth-largest smartphone maker, and Ping An, the world’s largest insurer, in what the city’s banking regulator called a ‘milestone.’”

• JP Morgan gets the first fruit of financial opening
  JPMorgan poised to be first foreign company to own majority stake in China mutual fund venture / SCMP
  “JPMorgan could become the first foreign company to own a majority stake in its Chinese mutual fund business, after its joint venture partner put a crucial 2 percent of the business up for sale that analysts expect the Wall Street bank to lap up.”

• Kingsoft
  China’s Microsoft challenger Kingsoft files for Shanghai tech board listing / TechNode
  Kingsoft “plans to raise RMB 2.05 billion (around $300 million), with no fewer than 101 million shares, 21.91% of the total being issued, according to the prospectus.”

• Secondhand luxury
  How the rise of the pre-owned watch in China is disrupting the watch industry / Jing Daily
  “Millennials will soon represent 40 percent of the global personal luxury goods market, and Chinese millennials, in particular, are a promising demographic for the luxury watch industry in the future.”

• Stimulus of another kind?
  China’s state-backed private equity starts a fund to buy out distressed debt, take advantage of nation’s deleveraging campaign / SCMP
  “Citic Capital, one of the largest private equity firms backed by the Chinese state, is raising US$500 million for its first buyout fund for distressed assets in China.”

• Intellectual property
  Tsinghua University sues Chinese kindergartens for using its name / SCMP

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• Emissions
  World’s biggest polluter, China may yet blaze trail on environment / Nikkei Asian Review

Beijing and its environs are touted as a particular success story in terms of improved air quality. China is also in the vanguard developing electric vehicles and battery technology… But China also remains the world’s biggest polluter in terms of carbon dioxide emissions, and increased both coal power generation and coal mining capacity last year; its plastic-waste ban has played havoc in some less-developed nations; and its Belt and Road Initiative is a double-edged sword.

• Batman dinosaurs?
  Could caped dinosaur found in China glide like Batman? / SCMP
  “Chinese scientists have discovered a new dinosaur species which appears to have been equipped like Batman with a cape that may have given it the ability to glide.”

POLITICS AND CURRENT AFFAIRS:

• Exit ban on Americans — Liu siblings still trapped in China
  American siblings trapped in China make public plea for help: “We wake up every morning terrified” / CBS
  “Two American siblings trapped in China are making a public plea for help.” Their father, Liú Chāngmíng 刘昌明, is a former executive at the state-owned Bank of Communications, and a key suspect in a $1.4 billion fraud and corruption case. He is one of China’s most wanted fugitives, but has been at large since 2007. Here is the context, largely drawn from this 2018 New York Times story (porous paywall) by crack reporters Edward Wong and Michael Forsythe.

  • Liu’s wife and two twentysomething children, American citizens, had been living in the U.S., apparently in a great deal of comfort. That ended in June when they flew back to China to visit an ailing grandfather on Hainan Island.

  • The government detained the Liu children and their mother, Sandra Han, and then slapped an exit ban on them. “By holding the family hostage…the police are trying to force the siblings’ father to return to China to face criminal charges,” according to the Times, even though the Liu children say their father cut off contact with his family in 2012.

  • The police have assured Liu’s family that they are not being investigated for any crime — they’re just bait for Liu Changming.

  • “The Chinese Foreign Ministry defended the holding of the three family members,” reported the Times: “The people you mentioned all own legal and valid identity documents as Chinese citizens,” said a spokesperson. “Because they are suspected of economic crimes, they are restricted from exiting the country by the Chinese police in accordance with the law.”

  • The Global Times assured us that it is completely normal to hold the families of criminal suspects as hostages — see Interrogation and investigation over families of fugitive suspects involved in serious crimes a normal practice in China: experts.

• New Belt and Road tracker tool
  Trace China’s growing economic influence / Council on Foreign Relations
  “The CFR Belt and Road Tracker aids analysis of BRI by showing how it has changed countries’ bilateral economic relationships with China over time. The tracker focuses on three Belt and Road indicators — imports from China, foreign direct investment (FDI) from China, and external debt to China — for sixty-seven participant countries.”

• Huawei CFO and Canadians in trouble in China
  Canadian sentenced to death in China protests innocence at lower-profile appeal hearing / Globe and Mail
  “A Canadian man sentenced to death in China for drug trafficking protested his innocence Thursday during a four-hour appeal hearing that ended without a verdict, in the midst of a diplomatic crisis between Beijing and Ottawa that has exacted a heavy human and economic toll.”
  No more hoodies and yoga pants for Huawei’s Meng Wanzhou. Now she looks like she means business / SCMP
  “It’s a perilous thing, to dwell on the way someone appears in court.But there is no getting away from it. Meng Wanzhou looked different when she arrived for her latest hearing in Vancouver on Wednesday. She dressed differently. She talked differently. Heck, she even walked differently.”
  Huawei CFO Meng arrives in Canada court for pre-extradition hearing / Reuters

• Repression of civil society
  Chinese rights lawyer demoted from teaching post at Shandong university / Radio Free Asia
  “Rights lawyer Liu Shuqing, who also works at a public interest law firm, was told to stop teaching classes at the Shandong Qilu University of Technology last year.”
  Tibetan man, aunt sentenced for Panchen Lama protest in Sichuan / Radio Free Asia
  “Wangchen, 20, who was arrested on April 29, was sentenced by the Sershul County People’s Court in Sichuan’s Kardze (in Chinese, Ganzi) prefecture to a term of four years and six months for leading ‘a conspicuous protest in public against the law of the land,’ a Tibetan living in India told RFA.”
  Tiananmen Square: China steps up curbs on activists for 30th anniversary / Guardian
  China detains social workers in deepening crackdown / FT (paywall)

Police on Wednesday arrived unannounced at the offices of Hope college, a community centre in the southern city of Guangzhou that helps migrants attending vocational schools and detained social worker Liang Zicun, the group’s founder. They also took away documents, computers, hard disks.

Similar raids were carried out at the offices and homes of two more social workers, Li Changjiang in Shenzhen and Li Dajun in Beijing, both of whom were detained, according to the friends and colleagues of the three.

• All about United Front Work
  The Jamestown Foundation’s China Brief has a new issue with a focus on the Party’s United Front Work (统一战线工作 tǒngyī zhànxiàn gōngzuò):
  On the Correct Use of Terms for Understanding “United Front Work” by Anne-Marie Brady
  Reorganizing the United Front Work Department: New structures for a new era of diaspora and religious affairs work by Alex Joske
  The United Front Work Department goes global: The worldwide expansion of the Council for the Promotion of the Peaceful Reunification of China by John Dotson
  United Front Work by other means: China’s “economic diplomacy” in central and eastern Europe by Martin Hála

• Taiwan military
  Taiwan offers glimpse of home-built submarine designed to deter Beijing / SCMP
  “The vessel will have an X-shaped stern resembling Japan’s diesel-electric Soryu-class attack submarine, and the shipbuilder announced on Thursday that the first one is expected to be launched in 2024.”

• Cultural and academic exchanges between China and Taiwan
  China-linked exchanges are illegal / Taipei Times
  “Schools with ties to Communist Youth League academies or that have sent interns to Chinese state-run media must correct the situation or face a fine.”
  China worries about how study in Taiwan might affect its students / Economist (porous paywall)

Despite the Communists’ efforts to portray Taiwanese democracy as a raucous farce, the island’s orderly political evolution has inspired some people in China. Even so, in recent years, as cross-strait economic links have boomed, China has allowed many thousands of students to experience the island’s freedoms for themselves, just as it had permitted students to head to universities in the West. In 2018 nearly 30,000 Chinese students were enrolled at Taiwanese universities, more than ten times as many as a decade earlier.

• The strange case of detained bookseller Gui Minhai and the Swedish ambassador
  Ex-Swedish envoy to China Anna Lindstedt suspected of crime after setting up ‘unofficial’ meetings over detained bookseller / AFP
  “Sweden’s former ambassador to Beijing could have committed a crime when she organized negotiations, unbeknownst to the foreign ministry, aimed at securing the release of detained Chinese-Swedish publisher Guì Mǐnhǎi 桂敏海, a prosecutor said Thursday.”
  Former Swedish ambassador to China faces criminal investigation over secret Gui Minhai meetings / SCMP

• Biometric surveillance of Uyghurs
  Inside China’s surveillance crackdown on Uyghurs / Wired

“The police station was full of Uyghurs,” Abduwayit says. “All of them were there to give blood samples.”

Finally, Abduwayit was made to give a voice sample to the police. “They gave me a newspaper to read aloud for one minute. It was a story about a traffic accident, and I had to read it three times. They thought I was faking a low voice.”

The voice-recognition program was powered by Chinese artificial intelligence giant iFlytek, which claims a 70 percent share of China’s speech recognition industry.

• Leaking secrets of state financial policies
  Chinese bank employee convicted of ‘leaking state secrets’ after sharing policy draft on WeChat / SCMP
  “The defendant, identified only by her family name Li, was a 32-year-old employee of Langfang Bank who was on a secondment to the China Banking Regulatory Commission (CBRC), which gave her the access to the draft proposal. In February 2017, Li took 36 photos of the draft and sent them to her colleague surnamed Cui at Langfang Bank via Chinese messaging service WeChat.”

• A Chinese emir in Nigeria
  Chinese engineer made Nigerian tribal chief for role in development / SCMP
  “Kong Tao, 34, was granted the title by the Emir of Jiwa district in Nigeria’s capital, Abuja, last month, nine years after he was sent by his employer to the city as an assistant engineer responsible for a railway project, Dahe Daily reported on Sunday.”

SOCIETY AND CULTURE:

• The significance of May Fourth
  This year, I couldn’t avoid May Fourth / ChinaFile
  “Symbolically speaking, May Fourth was the moment that China became an intellectual colony of the West, an abyss it has yet to climb out of even today.”
  The writer Maura Cunningham has a roundup of May Fourth-related reading on her blog. It includes two pieces on The China Project: 1919 to 2019: A century of youth protest and ideological conflict around May 4, by Eric Fish, and Protesting in the name of science: The legacy of China’s May Fourth Movement, by Yangyang Cheng.

• Art in Chengdu and photography
  Expanded Art Chengdu bucks slowing Chinese economy / Art Newspaper
  “For its second iteration, Art Chengdu (April 30-May 2) moved from two temporary tents on a bustling pedestrian mall to the Chengdu Century City New International Exhibition and Convention Center, located in the Sichuan capital’s southern business district Tianfu.”
  EC Tong’s best photograph: a huge-scale recreation of Chinese harvests past / Guardian

• China is drinking a lot more than it used to
  China’s alcohol consumption up nearly 70 percent since 1990 / That’s Guangzhou
  “Close to 70 percent more alcohol was consumed in China in 2017 than in 1990, according to new research published by the Guardian.”

• Internet-powered crimes
  Chinese woman’s detective work foils Airbnb ‘Superhost’ who installed hidden camera in bedroom / SCMP
  “A man in eastern China who placed a hidden camera in a bedroom he rented out on home-sharing platform Airbnb was exposed when he hosted a woman who recognized the equipment.”
  Chinese pickup artist locked up for sinister lessons in manipulation / SCMP

• Parental pressure for academic success
  Discussions on Weibo over 10-year-old girl attending school event with fever and IV drip / What’s on Weibo
  “Is this father doing the best or the worst for his daughter? Views are divided on Weibo.”

• Travel TV
  One of China’s most influential travel show hosts right now is a fox hand puppet / China Film Insider
  “A hand puppet resembling a fox has become an unlikely star on the Chinese internet via a new comedy travel program. Filming vlogs, especially travel vlogs, has become one of the most trendy ways for China’s influencers to share their life and experiences on sites such as microblog platform Weibo, video site Bilibili and even short video sensation TikTok.”

SINICA PODCAST NETWORK

Sinica Podcast: Howard French on how China’s past shapes its present ambitions

On this week’s show, recorded live in New York on April 3, Kaiser and Jeremy have a wide-ranging chat with former New York Times China correspondent Howard French, now a professor at Columbia University’s School of Journalism. We talk about his book Everything Under the Heavens and China’s ambitions and anxieties in the world today.

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