The era of strategic separatism

Jeremy Goldkorn Published May 11, 2019

Dear Access members,

The China Project Direct is our conference call series — like a live podcast, but for a select dial-in audience. Expert speakers, timely topics. Next week on Tuesday, May 14, at 2 p.m. EST, Access members can dial in free to join the discussion on “What the MSCI China Rebalancing Means for Global Markets.”

Please send an email to jesse@thechinaproject.com if you’d like to take part.

—Jeremy Goldkorn, Editor-in-Chief

1. Trade talks break up with no deal — a new era of strategic separatism?

309 days after the first Trump tariffs kicked in on July 6, 2018, the AP reports:

Trade talks between the U.S. and China broke up Friday [May 10] with no apparent agreement, and President Donald Trump asserted that there was “no need to rush” to get a deal between the world’s two biggest economies.

Hours earlier, the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent, escalating tensions between Beijing and Washington. China’s Commerce Ministry said it would impose “necessary countermeasures” but gave no details.

What’s next? Who knows? The New York Times says (porous paywall) that China is “defiant but careful,” and promises an “aggressive response” to the new tariffs. It’s going to be a busy weekend in Beijing.

Instead of reading analysis of what went wrong this week, the essential read this weekend on U.S.-China tensions is this Financial Times report (paywall) from “a forum on military-civil dual-use technology in Beijing this week” by Yuan Yang and Nian Liu.

Naturally, people at an event organized by “a group of mostly state-owned military companies” are bound to be hawkish, but their views are also very common on Chinese social media, and — one must assume — at many levels of the Party hierarchy. Here are comments from three attendees cited in the FT report:

“I very much hope that the negotiations will break down. Once the negotiations are over, the United States will be finished, for sure…we kick out all the American companies and bring all of ours back… No way will Trump be re-elected.”

“The U.S. is going downhill, and ‘screaming loudly is a sign of their decline.’”

“The world we are about to enter will not be an era of peace and development, it will be an era of strategic separatism. Trumpism is just American imperialism but one that is ‘America First’ and more savage, bloodier and more warlike.”

Further reading:

2. The murky case of the whistle-blower judge

The South China Morning Post reports:

The Chinese supreme court judge at the centre of a judiciary scandal was on Friday accused of theft and fabrication, state media reported, after police in Beijing wrapped up their investigations. Wáng Línqīng 王林清, the assistant judge of the Supreme People’s Court, is now in the custody of Beijing city’s anti-corruption agency, Xinhua reported.

The scandal involved the disappearance of court papers in a mining rights case in which the plaintiff, businessman Zhào Fāqí 赵发琦, was in police custody and under investigation.

There’s something fishy happening, but we don’t know what it is. On February 25, Radio Free Asia reported:

Former Chinese Supreme Court judge Wang Linqing, who in December helped blow the whistle on judicial misconduct at the highest level, is now under criminal investigation for “leaking state secrets,” Xinhua News Agency reported (in Chinese).

State-run news agency Xinhua said a former disciplinary investigation into Wang’s conduct had now been handed over to police.

The announcement came as state television aired a video “confession” from Wang, his first public comment after he disappeared into incommunicado detention on January 3, after making two whistle-blowing videos.

Commenting on the affair in February, the editor of overseas Chinese website Mingjing, Ho Pin (何频 Hé Pín), wrote:

Even the most secretive under-the-table deals cannot fool the discerning eyes of Chinese netizens. The investigative report on Wang Linqing’s case by the Political and Legal Affairs Committee has become the biggest laughingstock on social media. The loopholes are so numerous and the logic so twisted that people are even more skeptical that the authorities are trying to conceal the insidious cronyism among the powerful.

3. Huawei’s next competitor: Oracle

Yesterday, we reported that 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.

Now comes news that Huawei is looking to compete with Oracle’s core product: enterprise software. According to The Information (paywall):

China’s Huawei Technologies is about to make its biggest-ever attempt to expand into an area of enterprise software currently dominated by Western giants like Oracle, Microsoft and SAP. Huawei is planning to unveil its new cloud database product at an event scheduled for May 15 in Beijing, people familiar with the matter said. A Huawei manager, who spoke to The Information on condition of anonymity, said the company will initially target the domestic market where it has a better chance of attracting customers.

See also:

Chinese court delays ruling on Canadian’s death sentence appeal / Washington Post
“A Chinese court has delayed ruling on a Canadian man’s appeal against his death sentence for drug smuggling, just hours after a Canadian court set a September date for the next hearing in an extradition case against a top Chinese executive.”
Vietnam doesn’t trust Huawei an inch / Foreign Policy (porous paywall)
US firm accuses Huawei of using professor to access its tech / SCMP

—–

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

Here are the stories that caught our eye this week:

China backtracked on the draft text of the U.S. trade deal, sending the document back to Washington on May 3 with “systematic edits” to every section, according to Reuters. The last-minute attempt at renegotiation caused Donald Trump to tweet on May 5 that tariffs would increase on $200 billion worth of Chinese goods on May 10, and they did. The tweets did not kill the trade talks, as Chinese lead negotiator Liú Hè 刘鹤 came to Washington, D.C., on May 9 for the 11th round of negotiations since the trade war began 10 months ago.
U.S. computer technology giant Oracle is shuttering its entire China Research and Development Center (CDC), and it is expected that 900 employees will be laid off now, and over 700 more in July.
Chinese farms are under threat from armyworms, the larvae of a species of moth that gorges on a variety of important crops, including corn, soybeans, and rice. An outbreak was first detected in January 2019, and has now been found in 11 provinces and is officially a “local pest disaster” (局部虫灾 júbù chóngzāi). 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.
The used-car market in Africa is about to be flooded with imports from China, after China’s Ministry of Commerce this week started allowing exports of used cars.
Prominent Canadians are urging their government to rethink how it responds to Chinese bullying. David Mulroney — Canada’s ambassador to China from 2009 to 2012 — urged the country to push back in ways that it is able, while finding alternative markets for Canadian products. Andrew Scheer, leader of the opposition Conservative Party, then called for a “total reset” of the Canada-China relationship.
Cannabis cultivation in China is booming in the provinces of Yunnan and Heilongjiang, as the market for an extract from hemp — cannabidiol, or CBD — is soaring overseas and Chinese companies rush to meet demand.
The internment camps in Xinjiang are attracting much more mainstream attention in the U.S. now than half a year ago — when, reportedly, the Trump administration declined to issue sanctions on Chinese officials involved for fear of jeopardizing trade talks.
As Australia’s May 18 elections draw closer, the country’s former prime minister, and a member of the opposition Labor Party, Paul Keating, publicly attacked the heads of his country’s intelligence agencies as “nutters” for their hawkishness on China. Observers noted that Keating is on the advisory board of the China Development Bank. Meanwhile, Keating’s own party is under attack on WeChat: Misinformation about the Labor Party is reportedly being spread by Conservative Party operatives.
The idea of an India-China oil bloc is unlikely to become reality, according to an editorial in the Hindustan Times, despite reports elsewhere in Indian media last week that indicated bilateral discussions were ongoing.
British communications regulator Ofcom is investigating CGTN for airing a forced confession from a British private investigator.
Taiwan received unanimous support from the U.S. House of Representatives, as it voted 414-0 to pass the “Taiwan Assurance Act of 2019,” which urges the island’s government to increase defense spending and for the American government to support it.
Epoch Times, the Falun Gong–affiliated anti-CCP media outlet, is currently one of the largest spenders on pro-Trump propaganda in the U.S., it was reported.
U.S. TV network CBS censored an eight-second animation critical of China from the popular streaming legal drama series The Good Fight, apparently out of fear of business repercussions in China.

BUSINESS AND TECHNOLOGY:

JD has a good quarter
JD.com narrowly beats estimates, renews Tencent deal in Q1 2019 / TechNode
“Reported net revenues were 121.1 billion yuan ($18.0 billion) in the first quarter of 2019, a jump of 20.9 percent from the first quarter of 2018.”
China’s one-stop-shopping travel apps
China’s travel mega-portals branch into finance, retail and… wedding photography? / Trivium

China’s travel portals are prime examples of the more-is-more approach to service offerings. While western outlets like Expedia and Kayak focus almost exclusively on bookings and reservations, China’s travel champions serve as more of a one-stop-shop for all things tourism. Big players like CTrip (携程 xiéchéng), Qunar (去哪儿 qù nǎ’er)and Fliggy (飞猪fēi zhū) have extended their offerings along other verticals, moving into retail, financial, telecom and niche-market services.

SCIENCE, HEALTH, AND THE ENVIRONMENT:

Coal — it’s not going away
State investment giant dropping coal hides reality / China Dialogue

In March, the State Development and Investment Corporation (SDIC), which holds more than 1 trillion yuan (US$200 billion) in assets under management, announced it had completed its withdrawal from the coal sector and would focus instead on investing in low carbon energy.

This led to industry chatter about whether or not state-owned enterprises (SOEs) are abandoning the coal sector. But experts say SDIC’s “withdrawal” will in fact strengthen the sector, and reflects the government’s determination to have strong firms specialising in coal.

POLITICS AND CURRENT AFFAIRS:

Swine fever in Hong Kong
Hong Kong confirms first case of African swine fever – and orders cull of 6,000 pigs at Sheung Shui Slaughterhouse / SCMP
“Hong Kong confirmed its first case of African swine fever on Friday and ordered the cull of at least 6,000 pigs at a government-owned slaughterhouse.”
U.S. indicts Chinese national for hacking
Justice Department charges Chinese hacker for 2015 Anthem breach / Techcrunch

U.S. prosecutors have brought charges against a Chinese national for his alleged involvement in the data breach at health insurance giant Anthem announced in 2015 that resulted in the theft of 78.8 million records.

Fujie Wang, 32, and other unnamed members of a China-based hacking group, are charged with four counts of conspiracy to commit fraud, identity theft and computer hacking.

Cashed-up AIIB
China-backed Asian Infrastructure Investment Bank raises US$2.5 billion from bond sale in London / SCMP
“Following the success of its inaugural U.S. dollar bond issue in London on Thursday, the president of the China-backed Asian Infrastructure Investment Bank (AIIB) said the lender was open to the idea of local currency bond issues in the future.The AIIB raised $2.5 billion from the sale of the five-year bonds, after attracting orders of more than $4.4 billion from over 90 bidders in 27 countries.”
Censorship and repression
How an American TV show captured the extent of Chinese repression / Washington Post
Scholar of Uyghur history Rian Thum writes on the difficulties of raising public awareness about Xinjiang in the U.S., and the long reach of the Party’s repressive hands.
Complaints with retribution: China’s muffling of gaoyangzhuang / Duihua
A report on the history and current state of the Party’s campaign to stop dissenters from petitioning westerners — usually journalists and diplomats — known as gàoyángzhuàng (告洋状).
Rights lawyer who criticized president Xi’s indefinite rule detained for subversion / Radio Free Asia
Chén Jiāhóng 陈家鸿, “a prominent human rights lawyer who spoke out about curbs to China’s legal profession and the abolition of term limits by President Xí Jìnpíng 习近平…is currently under criminal detention at Guangxi’s Yulin Detention Center, on suspicion of ‘incitement to subvert state power.’”
The Hong Kong extradition agreement that no one wants
More than 1,200 protesters join rally outside Hong Kong’s legislature ahead of showdown meeting over controversial extradition bill / SCMP
“More than 1,200 people joined a protest outside Hong Kong’s legislature on Friday night to support opposition politicians fighting a controversial extradition bill on the eve of a showdown meeting with their pro-establishment rivals.”
Taiwanese politics colours fraught extradition row, but Hong Kong officials push on / SCMP
“The Hong Kong government dug its heels in on Friday over a controversial extradition proposal even as Taiwan, one immediate beneficiary of the legislation, made clear it had no desire to use the new law to seek justice in a high-profile murder case.”

SOCIETY AND CULTURE:

Legal rights TV
The lawyers are here: Chinese state media popularize ‘rule of law’ / What’s on Weibo

You just bought a new house when you discover its locks have been changed and you’re denied access. Together with five colleagues, you’ve been working in a factory when your boss suddenly lays you off without explanation. You won a lawsuit but still have not received the settled compensation. What to do? What kind of rights do you have as a Chinese citizen?

These kinds of legal cases are at the center of a weekly Chinese TV show called The Lawyers Are Here (律师来了 lǜshī lái le), which was first aired on CCTV’s Legal Channel in 2017.

LGBT representation in Hong Kong
‘Bold and timely’: New LGBT-friendly Cathay Pacific ad wins praise / HKFP
“Hong Kong airline Cathay Pacific rolled out a new promotional campaign this week — though one ad, in particular, stole the spotlight…a Cathay billboard showing two men holding hands and walking along a sandy beach, with the slogan ‘Move Beyond Labels.’”
Transgender rights
“I need my parents’ consent to be myself” — barriers to gender-affirming treatments for transgender people in China / Amnesty International (PDF)
Many transgender people in China cannot get the parental consent they need to get legal gender affirming surgery and treatment.
See also Amnesty’s summaries: China: Transgender people risk their lives with dangerous self-surgery and Transgender in China explained in 8 cat memes.
Creative nonfiction in translation
Rice cake, with a side of lies / Chinarrative
“Qiu Liang, who was born in 1987, and describes herself as a bisexual woman who majored woman who majored in Chinese…Qiu recounts how she helped her butch girlfriend find a fake husband, all the while waiting for her own divorce to come through.”

FEATURED ON SUPCHINA

Op-ed: How to make China’s Belt and Road green

President Xi Jinping has declared China’s trillion-dollar infrastructure program should be “clean and green.” Why isn’t it yet? Elizabeth Losos and Erik Myxter-lino suggest two concrete ways to ensure that Belt and Road investment prioritizes environmental protection.

Friday Film: ‘Iron Moon’: A beautiful portrait of China’s working-class poets

Is there room for poetry in contemporary society? Iron Moon, an award-winning documentary that splices together the working-class life of its subjects with their work, suggests poetry is more important now than ever. The title Iron Moon is from the poem “I Swallowed an Iron Moon,” written by Xu Lizhi — a Foxconn worker whose suicide in September 2014 captured national attention.

Brouhaha over Italy-China BRI deal may be overrated

It was a big deal when China got a G7 economy to sign onto its Belt and Road Initiative. But with Italy’s economy mired in crisis and bilateral investment falling, this March 23 agreement may not have merited the hype — or the anxiety — that followed.

Q&A: Rebecca Fannin on China’s tech scene

After spending many years in Silicon Valley as a technology writer covering venture capital and the dot-com boom, Rebecca Fannin followed the VC money to China, where she became one of the first American journalists to report on the astronomical growth of Chinese entrepreneurship. Inspired by her interviews with many high-profile entrepreneurs in China, such as Jack Ma from Alibaba and Robin Li from Baidu, in 2010 Fannin decided to create the media and events company Silicon Dragon Ventures.

An American’s China Dream: Brian Linden is trying to save Chinese tourism

The Linden Centre, a Chinese-government-protected cultural heritage site turned hotel and education center in Xizhou, Yunnan, is one of the most conservative models of tourism in the province — despite being run by a foreigner, Brian Linden. Linden seeks to look deeper into what’s really happening in rural China and maneuver in ways that prompt real change.

What’s in a name? Taiwan and China are fighting a war of words over identity and sovereignty

The armed conflict between China and Taiwan has been dormant for decades, but a wider war over global influence has ensnared multinational corporations, regional celebrities, and cross-strait meme creators. Conventional wisdom suggests that Taiwan, the island of 23.5 million lying just off the coast of China’s Fujian Province, is bearing the brunt of the influence offensive waged by the government and internet users of its 1.4 billion-strong cross-strait neighbor.

Famous crosstalk artist under fire for crowdfunding abuse

Wú Shuài 吴帅, a Chinese comedian affiliated with the country’s most prestigious crosstalk performance group Déyúnshè 德云社, has caught heat from social media after his family launched a crowdfunding campaign to cover the medical expenses of his cerebral hemorrhage.

‘Trump on Show,’ reviewed: Cantonese opera meets Donald Trump (and Mao, Kim Jong-un, Ivanka, etc.)

Li Kui-ming’s Trump on Show is, like its title character, over the top, sensationalist, and unpredictable. But is it enough to make Cantonese opera great again?

Kuora: Zhuge Liang and the myth of the hermit genius

Zhuge Liang, in the mythologized and fictionalized Romance of the Three Kingdoms of Luo Guanzhong, wasn’t just smart: He was also the embodiment of Confucian virtues. His decision to back Liu Bei was based not on personal ambition and an assessment of which warlord offered the best career prospects. Of course, novelized versions of history like Three Kingdoms tend to exaggerate the extent of the isolation of men like Zhuge Liang.

China Sports Column: Cannavaro out as Chinese national team coach, and Guangdong sweeps way to ninth CBA title

Former World Player of the Year and Ballon d’Or winner Fabio Cannavaro has decided not to manage the Chinese national football team, and reports are that Cannavaro’s mentor, Marcello Lippi, might return to his old role. Meanwhile, the Guangdong Southern Tigers, led by Yi Jianlian, won the CBA finals for the team’s ninth championship. The team didn’t lose a game in this year’s playoffs.

SINICA PODCAST NETWORK

TechBuzz China Ep. 44: So young, more beautiful — the allure of China’s plastic surgery market

In episode 44 of TechBuzz China, co-hosts Ying-Ying Lu and Rui Ma talk about So-Young, an internet company that markets and facilitates plastic surgery and other medical cosmetic procedures to Chinese customers. The six-year-old company has a stated mission of bringing “health and beauty” to everyone, and its stock priced at $13.80 per American depositary share (ADS) last week but is now trading at about $20. Prior to listing, So-Young had raised over $250 million in venture capital funding, including some from Tencent. Last year, it claimed to have made $8 million in net income, plus a market share of 82 percent based on user time spent on similar apps.

Subscribe to TechBuzz China on Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed into your favorite podcast app.

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.

ChinaEconTalk: Huawei may, but how?: China’s role in global IT infrastructure

Is Huawei unfairly maligned or rightly feared? Are the tech supply chains running through China marvels of 21st-century globalization, or dangerous oversight on the part of U.S. tech firms and the federal government? Today’s guest on ChinaEconTalk — Nick Weaver, a researcher at the International Computer Science Institute and a lecturer at UC Berkeley — provides some clarity.

Subscribe to ChinaEconTalk on Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed straight into your favorite podcast app.

Ta for Ta, episode 18: Leta Hong Fincher

Juliana Batista interviews Leta Hong Fincher, a best-selling author, journalist, and scholar. Fluent in Mandarin, Leta is the first American to receive a Ph.D. from Tsinghua University’s Department of Sociology. Leta has written for the New York Times, the Washington Post, The Guardian, Ms. magazine, the BBC, CNN, and many others. She received the Sigma Delta Chi Award for excellence in journalism in 2002 for her China reporting. She is also the author of two best-selling, critically acclaimed books: Betraying Big Brother: The Feminist Awakening in China (2018) and Leftover Women: The Resurgence of Gender Inequality in China (2014). Identified by The Telegraph as an “awesome woman to follow on Twitter,” Leta was named a Mellon Visiting Assistant Professor at Columbia University and recently moved to New York.

Subscribe to Ta for Ta on Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed into your favorite podcast app.

NüVoices Podcast: Rocking while female

In episode 15 of the NüVoices Podcast, co-host Alice Xin Liu interviews the co-founder and lead singer of Xiao Wang 小王, Anlin Fan. Since she started the band with her best friend, Yuyang, just a few years ago, Xiao Wang has become a staple of the Chinese rock and punk scene. When Anlin isn’t tearing up the stage, she spends her time finishing her master’s degree at McGill University. Here, she discusses growing up in China, the Riot Grrrl movement, tips on starting a rock band, her work with Rock Camp for Girls in Montreal, and her take on feminism and intersectionality. This episode also samples Xiao Wang’s new demo, “Sonic Baby,” and provides new recommendations for self-care.

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

Middle Earth #09: China’s growing VR industry

Virtual reality (VR) is a new medium that many a technology guru has predicted will revolutionize cinema — or would, if it weren’t for the pesky problem (among others) that VR interface still requires the viewer to wear what essentially amounts to a “head box.” Nevertheless, VR markets around the world are slowly but surely expanding. Many of the major film festivals (Sundance, Venice, and Cannes, to name a few) now feature a special VR section. Overall, the industry is indeed growing — especially in China.

Subscribe to Middle Earth on Apple Podcasts, Overcast, or Stitcher, or plug the RSS feed into your favorite podcast app.

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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The era of strategic separatism

1. Trade talks break up with no deal — a new era of strategic separatism?

2. The murky case of the whistle-blower judge