A sweet TV gesture, signifying nothing

1. A sweet TV gesture, signifying nothing

Today, New York Times reporter Li Yuan tweeted:

After the Trump-Xi phone call yesterday, China’s official broadcaster decided that the Korean War movie Battle of Triangle Hill would no longer fit the mood. It showed Lover’s Grief Over the Yellow River — an American pilot fell for a Chinese guerrilla in WWII — this morning

And at least 24 hours after Xinhua News Agency’s website put a short article about the Xi-Trump phone call as its top story (English, Chinese), the brief note remains second from the top on both English- and Chinese-language versions. The article confirms that Xi and Trump will meet at the G20 summit in Osaka, on June 28–29.

In China, such media decisions are deliberate, and seem to send a clear signal of softening, or at the least, that China is willing to talk to the U.S. But I don’t hold out much hope of an easy resolution to the trade and tech war — there are too many countervailing signals. Such as this People’s Daily opinion piece, which is currently the top story on the website of the Party’s house paper: Can China swallow the bitter fruit of “if”? (in Chinese). Excerpt:

“If we didn’t propose Made in China 2025, if we did not implement the Thousand Talents Program, if we did not defend our rights in the South China Sea…” Since the outbreak of China-U.S. economic and trade frictions, there have always been voices arguing that “if” China had still “kept a low profile,” fully respecting the leadership of the United States, and not challenging the leadership of the United States, we could live in peace and happiness.

This seems to mean: “If China does not sit at the table to eat, the United States will not smash the table. The question is: Is it only the United States that is qualified to sit at the table and chew steak and drink red wine, while China can only hide in the cold corners of the room, nibbling on crumbs?…

…No foreign country should expect us to bargain over our core interests. Don’t expect us to swallow any bitter fruit that harms China’s sovereignty, security, or development interests.

The reason is very simple. Retreating on any issue that concerns China’s core interests means giving up the future of China’s development! On this issue, history will not allow any conjecture, we have no “if”!

The emphasis on China’s core concerns is telling: China may agree to buy some stuff and keep talking, but no one should expect any significant compromise when it comes to most of the demands being made in Washington.

Here are two other commentators who aren’t expecting much from the Xi-Trump meeting and any upcoming negotiations:

Taoran Notes (陶然笔记 táorán bǐjì), a WeChat account that appears to have close ties to the government (see Bloomberg story behind porous paywall) posted a note titled “Negotiating needs to be real, sincere negotiation” (in Chinese):

We should not have high expectations for the next round of talks…

I am afraid that only when the other side feels the economic and political pain caused by the trade war will they understand the logic [of China’s position]. It will take some time, but we have endurance and we are patient.

Steve Schwarzman, Blackstone chief executive “believes there is little reason to be hopeful about the prospect of a trade deal coming to fruition before the end of the month,” reports CNBC.

More news from the trade and tech war — day 349 by our count:

If no deal, U.S. likely to impose more tariffs on China  

“U.S. trade representative Robert Lighthizer said before the Senate Finance Committee on Tuesday that the U.S. is ready to place more tariffs on China if it can’t agree to a new trade deal,” reports ABC.

Ethnic profiling of Chinese in the U.S.

The Guardian reports:

Technology workers of Chinese descent say that they are experiencing backlash due to the US-China trade war and fears over Huawei, according to a survey commissioned by the Guardian through Blind, an app allowing anonymous workplace communication.

“With the trade war against China and especially the Huawei case I feel like a target more and more every day,” an anonymous Amazon employee wrote in a comment on the app, which is popular among technology employees and verifies employment through work emails.

China’s levers

• “China has signaled its intention to not ‘weaponize’ the yuan’s exchange rate as a message of good faith ahead of next week’s meeting between President Xi Jinping and US counterpart Donald Trump at the G20 summit in Japan,” says the South China Morning Post.

• “China reduced its holdings of U.S. government debt again in April even as Beijing’s gold reserves continued to grow, diversifying away from the dollar as ties with Washington fray,” according to the Nikkei Asian Review.

• “China is ‘rolling out the red carpet for the rest of the world’ by lowering tariffs with other countries — even as its trade war with the U.S. continues to drag on, according to Peterson Institute for International Economics,” reports CNBC.

Supply chains moving out of China

• “Apple has asked its major suppliers to evaluate the cost implications of shifting 15 to 30 percent of their production capacity from China to Southeast Asia as it prepares for a fundamental restructuring of its supply chain,” reports the Nikkei Asian Review.

• “China’s got more competition now as info-tech exporter to the U.S,” says Bloomberg (porous paywall), with Vietnam, Taiwan, and Korea mentioned as leading tech suppliers.

Suffering American business

• “Proposed tariffs on $300 billion in Chinese goods would include printed materials, which would especially affect Bibles and children’s books predominantly produced in China because of the unique paper, printing technology and skills needed,” reports Bloomberg (porous paywall):

“We believe the administration was unaware of the potential negative impact these proposed tariffs would have on Bibles and that it never intended to impose ‘a Bible tax’ on consumers and religious organizations,” Mark Schoenwald, chief executive officer of HarperCollins Christian Publishing, told a panel of officials at the U.S. International Trade Commission.

• The South China Morning Post and Politico also have a story titled Will the trade war mean U.S. pig farmers miss out on their ‘single greatest sales opportunity’ in China?

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—Jeremy Goldkorn, Editor-in-Chief

BUSINESS AND TECHNOLOGY:

• Financial opening seems to be real
  In trade war shadow, Wall Street keeps experts in China busy / Bloomberg (porous paywall)

Lawyers, consultants and recruiters say they’re busier than ever working with global financial companies trying to make the most out of China’s unprecedented opening of its banking, insurance and securities sectors. Questions range from the mundane, like how to find office space, to the more esoteric, like how to interpret senior officials’ rhetoric…

…“Clients are trying to figure out what heightened political tensions mean, but it certainly hasn’t dampened interest,” said Andrew Polk, founding partner of Beijing-based research company Trivium China. “Firms are looking at the next decade of business opportunity, and trying to get past the noise of the trade war.”

• Chinese investment in Africa — smaller than you think?
  Eric Olander on Twitter: “France, Holland, U.S., and U.K. all invest more in Africa than China according to new U.N. research…Good to have this kind of information available the next you talk with someone who’s mistakenly convinced that China is number one in Africa FDI.”

• Ripple effects of Baoshang Bank takeover
  China’s interbank funding squeeze has echoes of Lehman / Bloomberg (porous paywall)

The country’s money markets have been shuddering since regulators took over Baoshang Bank Co. last month, despite initial assurances from the central bank and other authorities that they would maintain ample liquidity. While there has been little direct contagion, the seizure of the small commercial lender has hurt confidence. Funding costs for companies have shot up as large banks flinch from lending to some counterparties in the interbank market. For the first time in more than two decades, lenders face the prospect of defaults and haircuts on loans to other financial institutions, according to the Rhodium Group.

• More on Baoshang in the May 31 Access newsletter: Who’s next after Baoshang Bank?

• Samsung to move production out of China?
  Chinese fret as Samsung, other giants leave / Asia Times
  “Local officials and workers in China’s Guangdong and Jiangsu provinces may have to brace for lost revenue and jobs as Korean tech giant Samsung has reportedly decided to wind up its last production lines and leave the country for good…
  Statistics published by Huizhou’s municipal government give an insight into the impact of Samsung’s decision to relocate their factory: the city’s local fiscal revenue grew by a mere 2.8% in 2018, down from the 10% level a year earlier.”

• Mini Harleys
  Harley-Davidson finds partner to make small motorcycles in China / WSJ (paywall)
  “Harley-Davidson Inc. is partnering with a manufacturer in China to make its smallest bike in decades for that fast-growing market, extending a strategy to build more motorcycles outside the U.S… Harley said Wednesday that the new bike will be manufactured by Qianjiang Motorcycle Co.”

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• Fracking, and another earthquake in Sichuan
  China rejects claims fracking caused Sichuan quake: state media / Reuters
  There was “speculation in online forums that fracking had contributed to the 6.0 magnitude quake that killed 13 people and injured nearly 200 on Monday,” but this was denied by the director of the China Earthquake Networks Center.
  Earlier this year, hydraulic fracturing was suspended in a separate county in Sichuan, after earthquakes connected with the drilling for natural gas, also known as “fracking,” damaged 20,000 homes, wounded 13 people, and killed two, leading to hundreds of people protesting.

POLITICS AND CURRENT AFFAIRS:

• Iran, gas, and China
  China turns to Iran to fuel its LPG habit, ignoring sanctions / SCMP
  “Ship-tracking data appears to show that some Chinese buyers are continuing to use Iran as a source of liquefied petroleum gas, despite being hit by the trade war and US sanctions on the Persian Gulf nation.”
  Don’t open ‘Pandora’s Box’ in Middle East, China warns / Reuters
  “The Chinese government’s top diplomat warned on Tuesday that the world should not open a ‘Pandora’s Box’ in the Middle East, as he denounced U.S. pressure on Iran and called on it not to drop out of a landmark nuclear deal. Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked in the Gulf of Oman.”

• Uyghur family gone missing from Belgian embassy
  Muslim family dragged out of Belgian embassy in Beijing by Chinese police / The Telegraph
  “A Muslim family was dragged out of the Belgian embassy in Beijing by Chinese police after Belgian officials allowed them to enter the building, it has emerged.”
  A Muslim family sought help at the Belgian embassy in Beijing. The police dragged them out. / The New York Times  (porous paywall)
  “The last time Abdulhamid Tursun spoke to his wife, she was huddled in a Beijing hotel room with their four children, frightened after being evicted from the Belgian Embassy in the dead of night. Suddenly, plainclothes police officers burst into the room, cutting off the couple’s video call. Mr. Tursun says he has not heard from her since.”
  Belgian diplomat seeks ‘missing’ Xinjiang Uygurs who were led away from embassy by Chinese police / SCMP
  “A Belgian diplomat is expected to travel to Xinjiang in China’s far west to confirm the whereabouts of a Uygur family that was escorted from the country’s embassy in Beijing by police last month.”

• Taiwan and the Hong Kong protests
  Inkstone answers: what do Hong Kong’s massive protests mean for Taiwan? / Inkstone
  Inkstone reporter Viola Zhou also has a Twitter thread on why “Hong Kong’s anti-extradition bill protests have got strong support in Taiwan, and could even be a game-changer in the ongoing presidential race.”

• Xi smiles at North Korea
  Xi calls for new development of China-DPRK relations in new era / Xinhua
  Chinese President Xi Jinping gives North Korean leader Kim Jong-un his full support / SCMP

• Huawei surveillance system in Serbia
  Big Brother comes to Belgrade / Foreign Policy (porous paywall)
  “The Chinese company claims that its Safe City project will shorten police investigation times, improve arrest and apprehension rates, deter organized crime, and reduce overall crime rates. The study has since been taken down from the company’s website amid a public outcry in Serbia about how the surveillance system will affect the lives of Serbian citizens.”

• Journalist visa denials
  An American reporter was denied a visa to China. She said it’s because she criticized the Communist Party. / BuzzFeed News
  “Bethany Allen-Ebrahimian, a freelance journalist based in Washington, DC, had begun the process of applying for a journalist visa with French news agency Agence France-Presse (AFP) last year. After several months of waiting, AFP was told that if it wanted to fill the position, it would have to put forth another candidate, Allen-Ebrahimian said in an interview.”

• Toning down the nationalism in movies?
  Censorship casts shadow over China’s top film festival / FT (paywall)

Another casualty of the crackdown is a proposed sequel to China’s all-time top-grossing domestic film, Wolf Warrior 2, about a Chinese mercenary whose advertising tagline was “whoever offends China will be hunted down wherever they are”.

In addition to military topics, government officials are worried by content that could be perceived as excessively patriotic, which could unnerve foreign audiences and damage China’s reputation abroad, according to three industry executives.

• Aboriginal Australians protest Chinese-owned cattle farm
  Yakka Munga station blockaded by protesters in fight to protect Kimberley land / Australian ABC

Aboriginal native title holders have staged a protest at a remote Kimberley cattle station, claiming the Chinese owners of the lease have destroyed their cultural sites in a major land-clearing operation.
The small group of Nyikina people, who have shared rights to the area, are blockading the entrance to Yakka Munga station, south of Derby, preventing contractors from entering. The protest follows concern over land clearing at the site by the owners of the pastoral lease, Shanghai Zenith (the Australian arm of Shanghai CRED) Investment Holding Pty Ltd.

• Canadian vessel in Taiwan Strait
  Canadian warship makes rare passage through Taiwan Strait / Focus Taiwan
  “Taiwan’s Ministry of National Defense (MND) confirmed Wednesday that a Canadian warship recently sailed through the Taiwan Strait, a rare move by a non-U.S. military vessel through the waterway that separates Taiwan and China.”

• Taiwan: Harsher sentences for Chinese spies
  Taiwan strengthens security law under renewed Chinese threats / Deutsche Presse-Agentur via Straits Times
  “Taiwan on Wednesday (June 19) strengthened its national security law to give heavier punishments to those who undermine the self-governing island’s democracy under renewed threats from China. Under the amendment to the National Security Act, anyone assisting in the development of espionage rings for Beijing will be sentenced to prison for at least seven years and a fine of up to NT$100 million (S$4.3 million).”

• The language of power
  The power to instruct / China Media Project

The new norm now is for the general secretary to issue “important instructions,” and for the premier to “make written comments.” The issuing of “important instructions” has now fully become a special right and privilege of Xi Jinping himself.

Frivolous though it may seem to some, this is much more than a word game. It reflects the political norms of Xi Jinping, and it goes to the very heart of Chinese politics today.

SOCIETY AND CULTURE:

• Extreme parenting
  The father teaching his kids to pull no punches / Sixth Tone
  “Most Chinese parents might pass Children’s Day by taking their kids to the park or out for ice cream. But Zheng Weixin isn’t like most parents. This year, he took his children out to beat up other kids. Admittedly, it’s just a friendly boxing match at a riverside boxing-themed bar in downtown Shanghai.”

• An attempted murder in Thailand
  Chinese businessman accused of pushing pregnant wife off cliff in Thailand to get her money / SCMP

Yu Xiaodong was arrested after his wife told police that her husband had pushed her over the edge at a beauty spot in northeast Thailand Woman suffered multiple broken bones after falling 34 metres, but her unborn child survived the fall…

Charnchai said one line of inquiry was heavy debts Yu had incurred. His wife comes from a well-to-do family and holds all the couple’s assets in her name, but officers believe that she had upset her husband by only agreeing to pay off half his debts.

• A blogger named Big Sister Ah in Thailand (阿姐在泰国 Ā Jiě zài tàiguó) notes (in Chinese):

This is not the first murder case [of this kind] in Thailand.

Last year’s sensational killing involved a man from Tianjin, Zhang Yifan, who bought life insurance for his wife for more than 30 million yuan. He took his wife and daughter to Phuket, Thailand, and killed his wife in a hotel. He lied to his in-laws that she drowned.

Why did they choose Thailand to commit their crimes? [Yu Xiaodong’s wife] said it herself: There are few people in Thailand, and there are fewer cameras. There are no witnesses. There is no death penalty. This has led to bringing your wife to Thailand to kill her becoming a thing.  

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