How close will Taiwan and Trump get?

Dear Access members,

Jeremy is on vacation until Wednesday, June 5, and I’ll be editing our daily newsletter for the next five issues. Stories about U.S.-China relations and overseas June 4 anniversaries (and corresponding coerced silence wherever Beijing holds control) will undoubtedly dominate the news, and I will include regular roundups on those topics. But today and probably on other days, I will also make an effort to highlight in our top stories other topics worth paying attention to.

Feel free to write to me at lucas@thechinaproject.com if you have feedback or suggestions!

—Lucas Niewenhuis, Associate Editor

1. ‘Laziness is the root of all evil’ — plastic waste builds up in China’s cities and rivers

Among the largest lifestyle changes for people living in urban China in recent years has been the propagation of extraordinarily cheap delivery food and drinks — particularly coffee, as championed by Luckin. Raymond Zhong and Carolyn Zhang write about the implications of this consumeristic trend in the New York Times (porous paywall).

• In 2017, 1.6 million tons of plastic waste were generated by takeout delivery across China. In 2018, that number “grew to an estimated two million tons.”

• Meituan, the leading delivery platform, saw a 60 percent increase in orders between those two years.

• “Delivery is so cheap, and the apps offer such generous discounts, that it is now possible to believe that ordering a single cup of coffee for delivery is a sane, reasonable thing to do.”

• “Laziness is the root of all evil” (懒是万恶之源 lǎn shì wàn’èzhīyuán), one finance industry professional and daily delivery customer told the Times.

• The Yangtze River now contains more plastic waste than any other river in the world, according to a study cited in the article. “The world’s third and fourth most polluting rivers are also in China.”

• Recycling is probably declining because garbage scavengers see takeout containers and utensils as too lightweight and soiled to be worth the hassle to clean up and deal with. Also, a ban on many types of imported scrap to China does not seem to have had Beijing’s desired effect of improving the domestic recycling industry.

2. Taiwan and U.S. national security chiefs meet in Washington

A little over a year before he was appointed by Trump to be his national security adviser, John Bolton penned an op-ed in the Wall Street Journal (paywall) that urged America to “Revisit the ‘One-China Policy.’” That op-ed went so far as to call for an increased U.S. military relationship with Taiwan, including stationing troops on the island, and to “see how an increasingly belligerent China responds.”

• Bolton hasn’t gone that far — yet. But he could be on his way there: Earlier this month, Taiwan News reports, National Security Council Secretary-General David Lee (李大維 Lǐ Dàwéi) visited Washington and met officials including his American counterpart Bolton.

• It was the first contact since 1979 between U.S. and Taiwanese officials at such a high level.

• Taiwan also changed the name of an organization that facilitates relations with Washington, from the Coordination Council for North American Affairs (CCNAA) to the Taiwan Council for U.S. Affairs (TCUSA), according to Focus Taiwan.

• This follows Trump’s signing of a bill in March 2018 that encouraged lawmakers and high-level officials in Washington to establish ties with their Taiwanese equivalents.

• Also, on May 7, 2019, the U.S. House of Representatives unanimously passed a bill to support security in Taiwan.

China “slammed Washington for engaging with Taipei and ordered the Trump administration to cease diplomatic engagements with the island,” CNN reports. At the same time, CNN notes, Taiwan was holding “its annual Han Kuang Exercise,” which comprises “military drills…aimed at ensuring the island’s readiness for an invasion.”

See also this tweet and short video by Taipei-based Telegraph correspondent Nicola Smith:

<div class=”tweet” data-attrs=”{“url”:”https://twitter.com/niccijsmith/status/1132885185823854592″,”full_text”:”Normal life comes to a standstill in #Taiwan during an annual air raid drill. Phones buzz with a “missile warning” and sirens fill the air. A sad reminder that while life goes on, the fear of a future Chinese invasion is never far from people’s minds https://t.co/5VZQ7h0guM”,”username”:”niccijsmith”,”name”:”Nicola Smith”,”date”:”Mon May 27 05:44:10 +0000 2019″,”photos”:[],”quoted_tweet”:{},”retweet_count”:110,”like_count”:286,”expanded_url”:{}}”>

3. What’s next in the U.S.-China economic breakup?

There was surprisingly little in the way of significant breaking news about the U.S.-China trade and tech war over the long weekend. Two items of note:

• The threat to cut off rare earth mineral access was repeated by Beijing by way of a “questions-and-answers bulletin” of the National Development and Reform Commission, the Financial Times reports (paywall). This threat was first made implicitly by General Secretary Xí Jìnpíng’s 习近平 visit to a rare earths processing facility in Jiangxi Province a week ago.

• Chinese tourism decreased to the U.S. by 5.7 percent in 2018, according to the National Travel and Tourism Office, the AP says. This statistic is a bit unexpected, because New York and Los Angeles had both reported increases in Chinese tourism. A number of economic factors other than the trade war could have been responsible, according to AP. However, “Most industry-watchers agree that any downturn is temporary” because of China’s quickly growing middle class.

Next up in economic connections between the U.S. and China to be disrupted? Maybe it’s financial markets.

• Alibaba may be hedging its bets between the markets of the U.S. and China, as it is reportedly considering a second listing in Hong Kong, the Wall Street Journal reports (paywall).

• The ecommerce giant has been considering the double listing since at least 14 months ago, when regulators made a big deal about plans for chinese depository receipts (CDRs) and changes to listing rules. Here’s what we wrote about that in the 2018-2019 Red Paper (free for Access members at this link):

It was reported in March that Beijing was pushing for companies of all sizes to dual-list in mainland China using Chinese depository receipts (CDRs), and at first many of China’s largest tech companies sounded optimistic about that possibility. But after a few months, Alibaba decided to delay its dual-listing plans, as regulators continued to work out the kinks in the CDR system. The trade war and stock market volatility haven’t helped.

• As with SMIC delisting announced last week, though, given the current climate in U.S.-China relations, it is hard to be sure that any stock market decisions now don’t factor in geopolitics.

• The New York Times suggests this could be “the trade war’s next front,” because, “Some trade experts and others urging the Trump administration to keep a hawkish stance are discussing whether the White House should curb China’s access to Wall Street.”

• Beijing also has an extreme, and unlikely, option to sell some of the estimated $200 billion in American shares that “Chinese entities, mainly the country’s central bank and sovereign wealth fund, own.”

—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:

• Drone delivery
  DHL starts regular drone deliveries in China in world first / Radii China
  “For the moment, the regular deliveries are limited to an 8 kilometer route between a DHL service center and a specific company headquarters. EHang’s Hu Huazhi stated however that, ‘we expect smart drone delivery as an innovative logistics solution to be expanded and realized in more areas.’”

• Government takeover of Baoshang bank
  China’s first bank seizure since 1998 shows hidden loan risk / Bloomberg via Yahoo Finance
  Lisa Abramowicz on Twitter: “China’s first government takeover of a bank in more than two decades jolted the country’s financial sector today, highlighting the fraught balancing act of curbing leverage without undermining confidence in the region’s banks.”

• Bytedance’s new venture in smartphones
  TikTok parent Bytedance is reportedly working on its own smartphone / TechCrunch
  “There’s also urgency from Bytedance to carve out more user acquisition channels. After a few years of frantic growth, Bytedance failed to hit its revenue target for the first time last year amid slowing ad spending in China, according to a report by Bloomberg.”

• Tesla
  Tesla’s China-made Model 3 may be priced in $43,400-$50,700 range: Bloomberg / CNBC

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• Tampon market in China
  Why tampons have yet to catch on in China / Sixth Tone

Why don’t more Chinese women use tampons? So-called period poverty is one reason — with the price of a single tampon usually being two to five times higher than that of a sanitary pad — but it’s not the only one. To better understand this phenomenon, in October 2018 I conducted an online survey of men and women’s perceptions of, and experiences with feminine hygiene products. I received more than 900 valid responses, though the average respondent tended to be younger, better educated, and more urban than the national average. I found that tampons remain hampered by a combination of low public awareness, poor access to sex education, and traditional taboos regarding women’s bodies.

• Rare panda
  Albino panda caught on camera in China in world first / Guardian

POLITICS AND CURRENT AFFAIRS:

• Labor rights activism at Chinese universities
  ‘If I disappear’: Chinese students make farewell messages amid crackdowns over labor activism / Washington Post

Today, at least 21 members of Peking University’s Marxist society — including its slight but steely leader Qiu — have been placed under house arrest or have vanished altogether. Scores more are regularly hauled in for interrogation and live under constant surveillance. Months of clashes, five waves of arrests and an influx of plainclothes police have, at moments, turned a world-leading university into a surreal battleground.

The story of Peking University’s Marxist club — as told by four members who remain secretly active and spoke on the condition of anonymity for their safety, their supporters, and a trove of writings and videos left by activists anticipating arrest — illustrates the anxious political atmosphere in China, where idealistic students who embrace the party’s own ideology can be suppressed just like any other political threat.

It poses wider questions that go to the heart of modern China: What exactly does the Communist Party stand for? What gives it the right to rule?

• Orwell in the Chinese classroom / Made in China Journal
  “This is the translation of a blog post published on 1 May 2019 by an anonymous Chinese student,” whose account “resonates with other testimonies from Marxist students at Peking University (PKU) and other prominent Chinese universities.”

• June 4
  China’s robot censors go into overdrive in run-up to Tiananmen anniversary / SCMP
  “Censors at Chinese internet companies say tools to detect and block content related to the 1989 crackdown have reached unprecedented levels of accuracy, aided by machine learning and voice and image recognition.”
  HKFP guide to Hong Kong events commemorating the 30th anniversary of the Tiananmen Massacre / Hong Kong Free Press

• Wang Qishan in Pakistan
  China seeks security guarantees for Pakistan belt and road projects after terror attacks / SCMP
  “Wang met Pakistan’s Prime Minister Imran Khan during a three-day state visit to Islamabad, which concluded on Tuesday…Khan said during the meetings that Pakistan had established a special committee dedicated to ensuring the safety of Chinese personnel in the country.”

• China-India relations and Asian trade agreements
  China proposes ASEAN+3 mega free trade agreement sans India, Australia and NZ / The Hindu BusinessLine

• Hong Kong’s extradition bill
  Video: Hong Kong’s Carrie Lam pledges more adjustments to extradition bill, amid storm of criticism / Hong Kong Free Press
  Beijing officials tell foreign Hong Kong press to ‘inject positive energy’ into extradition law coverage / Hong Kong Free Press

• The Hong Kongers who got asylum in Germany
  Hong Kong chief Carrie Lam voices ‘deep regrets and strong objections’ to Germany after activists granted asylum / Hong Kong Free Press

• Saudi Arabia’s stance on the Uyghurs
  China wages relentless crackdowns on its Muslims. But Saudi Arabia stays quiet as it bolsters ties with Beijing. / Washington Post

• Poverty alleviation
  Beijing’s relentless march to eliminate poverty / FT (paywall)

SOCIETY AND CULTURE:

• R.I.P., Beijing’s oldest bathhouse
  Last days of Beijing’s oldest bathhouse, a place for rubdowns, cricket fights, and Chinese chess / SCMP
  “Xiong Gangjian says Shuang Xing Tang’s demise has been on the cards for years. ‘We are in the zone earmarked for demolition,’ he says. ‘Maybe after all the surrounding residential settlements are bulldozed, it will be our turn, because the land the bathhouse occupies belongs to the government.’”

• An unusual way to get away with a traffic ticket
  You can now avoid a traffic ticket in China if you post a social media confession / Radii China

• A special Valentine’s Day gift
  Chinese man buys girlfriend $99,000 worth of ocean / Sixth Tone

• Hong Kong identity
  A student in Boston wrote ‘I am from Hong Kong.’ An onslaught of Chinese anger followed. / Washington Post

• Berlin as a new home for Chinese exile artists
  Why are China’s expat artists moving to Berlin? / The Atlantic
  “The German capital not only offers freedom, but also invites people to provoke and challenge orthodoxy.”

• The X-Men franchise
  Check out the China poster for “X-Men: Dark Phoenix” / Radii China

FEATURED ON SUPCHINA

Friday Song: Beijing OG Nasty Ray

Last Friday’s song featured on The China Project comes to you from Beijing OG Nasty Ray, well known in hip-hop circles in China. In the above track Nasty Ray outlines elements of 老北京 — Old Beijing — including clips of mouthwatering BBQ (串儿 chuànr), hotpot, old hutongs, and kicking it with friends. Inspired largely by old-school hip-hop, Ray combines elements of jazz and lyricism akin to Tribe Called Quest, Pharcyde, and Wu-Tang Clan.

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Middle Earth, episode 11: China’s culture going global

China has found success in exporting domestic technology and consumer goods. However, its culture exportation has not achieved the same success. The language barrier may be an issue, yet South Korean and Japanese films and music have managed to overcome it and found success in exporting cultural products like video games, anime, and movies. So what gives? On this episode of the Middle Earth Podcast, the guests discuss the recent successes and failures of China’s culture going abroad.

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

The Caixin-Sinica Business Brief, episode 87

This week on the Caixin-Sinica Business Brief: the latest updates on the U.S.-China trade war, a new study about the economic cost of air pollution in China’s smoggy northeast, Doug Young on Baidu and Luckin Coffee, and more.

• Subscribe to the Business Brief on Apple Podcasts, Overcast, or Stitcher.