A truce in the techno-trade war as Hong Kong seethes

Dear Access member,

Today is the 98th anniversary of the founding of the Chinese Communist Party, and the 22nd anniversary of Hong Kong joining the People’s Republic of China. 

The first anniversary is the subject of the top story on all Chinese language central state media today. On Xinhua News Agency’s English website, the anniversary is only third story from the top, with this headline: Decoding success of Communist Party of China.

But the state media celebration of Hong Kong’s return is much more muted, for reasons that will be apparent if you read on. 

—Jeremy Goldkorn, Editor-in-Chief

1. Trump declares a techno-trade war truce 

This weekend, U.S. President Donald Trump announced a truce in the U.S.-China techno-trade war after his meeting with Xí Jìnpíng 习近平. This came on the same weekend as Trump’s made-for-TV impromptu meeting with North Korean leader Kim Jong-un at the DMZ. 

As Bloomberg notes (porous paywall): “The White House has yet to reveal details of Trump’s arrangement with Xi, leaving uncertainty about how the two countries will proceed.” Official China is almost completely silent: For example, there are no reports on the Xi-Trump meeting on Xinhua News Agency’s home page today. 

This is what the two sides have publicly said, abridged from this Bloomberg side-by-side comparison:

• The U.S. won’t raise tariffs on China “for the time being,” said Trump, which was confirmed by Beijing. No new timeline has been announced. 

• The two sides will restart talks, but Trump threatened future tariffs if no deal is made. Beijing said that negotiators will discuss “specific issues,” and that talks must be “equal, reflect mutual respect and address respective concerns.”

• Trump said China will buy a “tremendous” amount of food and agricultural products from a list provided by the U.S. There was no confirmation from Beijing. 

• The Huawei issue “must be saved to the very end,” said Trump, but the U.S. will make a concession and allow U.S. companies to sell to Huawei. There was no mention of Huawei in China’s written statement, but a Chinese official later said he “hoped the U.S. would follow through lift restrictions.”

• Chinese students: Trump said the U.S. will make it easier for Chinese students to stay and that there are many good Chinese students and “he’s always welcomed them,” while  Beijing hoped Chinese students in the U.S. would be “treated fairly.”

For more on Trump’s view of the truce, see his interview with his sycophant-in-chief, Tucker Carlson, on Fox News. The official Chinese read on the Xi-Trump meeting is summarized in this Xinhua infographic (in Chinese). 

Other reporting and commentary on the truce

• Winners and losers in Trump’s big China trade announcement / Washington Post 

• Trump relents on Huawei in China truce, reviving stalled talks / Bloomberg (porous paywall) 

• A China-U.S. trade truce could enshrine a global economic shift / NYT (porous paywall)

• US business groups praise Trump’s trade war truce, but want an ‘enforceable agreement’ with China / CNBC 

Huawei and HSBC 

The Financial Times reports (paywall):

HSBC has launched a lobbying effort to convince the Chinese government that it was not responsible for the arrest of Huawei’s finance director, as the bank tries to distance itself from the diplomatic row over China’s top telecoms equipment maker.

The UK-listed bank stepped up engagement with Chinese officials after the arrest in Canada in December of Meng Wanzhou, the Huawei executive who is also the daughter of the company’s founder, according to several people briefed on the discussions.

Australia

According to the Sydney Morning Herald:

[Australian] Prime Minister Scott Morrison will set out a more assertive Australian stance on the growing trade war between China and the United States in a new warning about the threat of “coercive power” that damages the global economy.

2. Hong Kong protesters storm government building

Hong Kong continues to seethe as young protestors — frustrated by lack of government action — turn to more destructive tactics. CNN reports: 

On the anniversary of Hong Kong’s return to Chinese rule, a large group of protestors smashed through glass doors and stormed the government headquarters. The dramatic July 1 events have marked a break from Hong Kong’s peaceful demonstrations against a controversial extradition bill.

Several hundred mostly young activists were inside the Legislative Council building for hours before leaving late on Monday night. Inside, they spray-painted slogans in Cantonese on the walls of the legislative chamber, tore down portraits and raised a black banner, that read: “There is no way left,” mounting an open challenge to China and the city’s embattled Chief Executive, Carrie Lam.

From the South China Morning Post:

Police fired several rounds of tear gas to disperse radical protesters who stormed into Hong Kong’s Legislative Council as a day of unprecedented violence and chaos marked the 22nd anniversary of the city’s return to China.

A squad armed in riot gear and wielding shields appeared at Harcourt Road where protesters were milling about at around 11.40pm [Hong Kong time]. They began positioning themselves and removing barriers on the road.

More:

• Why do many in China oppose Hong Kong’s protests? “It goes beyond propaganda,” says Li Yuan in the New York Times (porous paywall).

• “Hong Kong police supporters turn out in force to counter extradition bill protests, but clash with rivals and assault journalists,” reports the South China Morning Post. 

• To stay on top of what’s happening in Hong Kong, see this list of 100 Twitter users capturing the Hong Kong protests from the Taiwan Gazette.

3. ‘Brainwashing and coercive internment’ in Xinjiang

Scholar Adrian Zenz has published a new paper on the internment camps in Xinjiang, which he says is “packed with strongly incriminating evidence on the nature and extent of the internment campaign,” and based on detailed government sources. It’s titled “Brainwashing, police guards and coercive internment: Evidence from Chinese government documents about the nature and extent of Xinjiang’s ‘Vocational Training Internment Camps,’” and you can read it here.

Vice Media has released a half-hour documentary on YouTube titled They Come for Us at Night: China’s Vanishing Muslims. The footage was shot surreptitiously, with correspondent Isobel Yeung posing as a tourist, which caused a rather intense debate amongst journalists on Twitter. 

Between Urumchi and Kazan: The Tatars in Chinese Concentration Camps is a paper by Mehmet Volkan Kaşıkçı, a Ph.D. candidate in Soviet history at Arizona State University, on the Tatars, one of the other minority Turkic ethnic groups caught up in the same camp system that is tearing Uyghur society apart.  

4. U.S. Air Force to buy DJI drones

Last week, we pointed to comments from U.S. lawmakers about DJI, the world’s biggest consumer drone manufacturer, and DJI’s announcement shortly afterward of plans to begin producing some drones in the U.S. 

Now comes this news, via Janes:

The U.S. Air Force (USAF) is planning to award China’s DJI a firm-fixed-price contract to acquire a variety of the company’s consumer unmanned aerial vehicles (UAVs), according to a notice posted on the Federal Business Opportunities (FBO) website.

The service plans to acquire six Phantom 4 aircraft, five Phantom 4 Pro models, and six DJI Mavic Pros – all quadcopter aircraft. The UAVs are for the 11th Security Forces Squadron at Joint Base Andrews in Maryland.

5. Movie censorship by think tank?

Last week, The China Project reported on a number of Chinese films that have had problems with last-minute censorship in recent weeks, despite the producers having previously received the necessary official approvals from the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT).

Movie Theater Manager (@院线经理人 yuànxiàn jīnglǐrén), a WeChat blogger with a focus on the movie business in China, provides a theory (in Chinese): There is growing pressure on filmmakers from forces outside of SAPPRFT. 

In the case of the cancellation of the historical drama The Eight Hundred (八佰 bābǎi), it was an organization called the Red Culture Research Association of China (中国红色文化研究会 zhōngguó hóngsè wénhuà yánjiū huì). Founded in 2010, the association is dedicated to spreading the Communist Party’s cultural ideologies by organizing speech contests, lectures about the Party’s history, and conferences focused on the promotion of Xi’s “Chinese Dream.”

For more on this phenomenon, see Release delay of war epic ‘The Eight Hundred’ — a new era of Chinese movie censorship? on The China Project. 

—–

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:

• ChemChina and Syngenta
  Chinese envoy says Syngenta takeover was a bad deal: report / Reuters 

Beijing’s ambassador to Switzerland said ChemChina’s $43 billion takeover of seed and agrochemicals firm Syngenta was a mistake, adding he would have tried to stop the 2017 deal had he been in Bern at the time.

“It wasn’t a good deal for the Chinese side. It was for Switzerland: It got $40 billion. If Switzerland wants Syngenta back, I would convince ChemChina to sell it. But is there anybody at all in Switzerland who wants Syngenta back?” 

• Haier: From washing machines to oil
  China’s Haier Group dips toes in Israel’s petrochemical sector / Calcalist

China-based consumer electronics company Haier Group Corporation is dipping its toes in the Israeli petrochemical sector by partnering with Israeli oil refining and petrochemicals company Bazan Group. The two have signed several collaboration agreements over the past few days.

• The travails of Nio, would-be Tesla
  Nio recalling nearly 5,000 SUVs over battery problems / China Daily
  “Chinese startup Nio is recalling 4,803 vehicles with possible risks amid widespread concerns over electric car safety because of multiple reports of vehicles catching fire in the past months.”

• HPV vaccine
  Merck Sharp & Dohme Corp to augment HPV vaccine supplies to China / China Daily

The supply of much-sought-after human papillomavirus or HPV vaccine to China will be ‘remarkably’ increased within this year to meet unfulfilled demand in the Chinese market, executives of Merck Sharp& Dohme Corp, a US-based pharmaceutical company, said.

• The humans behind artificial intelligence
  Faces for cookware: data collection industry flourishes as China pursues AI ambitions U.S. / Reuters

As Chinese tech firms try to increase their data sets in order to better develop AI algorithms, Reuters reports that in a rural village in Henan, villagers are spending time in front of face-imaging cameras in return for teacups, pots and other cookware.

• Podcast crackdown
  China silences podcast and music apps as online crackdown widens / TechCrunch 

On Friday, a total of 26 audio-focused apps were ordered to terminate, suspend services, or have talks with regulators as they were investigated and deemed to have spread “historical nihilism” and “pornography,” according to a notice [in Chinese] posted by the Cyberspace Administration of China (CAC).

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

• Recycling
  China’s war on trash is the world’s, too / Bloomberg (porous paywall)
  “Shanghai’s ambitious recycling program will be a critical test of whether the globe can handle a growing mountain of garbage.”

• Swine fever
  Swine fever toll in China may be twice as high as reported, industry insiders say / Reuters

“Something like 50% of sows are dead,” said Edgar Wayne Johnson, a veterinarian who has spent 14 years in China and founded Enable Agricultural Technology Consulting, a Beijing-based farm services firm with clients across the country.

Three other executives at producers of vaccines, feed additives and genetics also estimate losses of 40% to 50%, based on falling sales for their companies’ products and direct knowledge of the extent of the deadly disease on farms across the country.

POLITICS AND CURRENT AFFAIRS:

• The engagement with China debate
  The failures of the ‘Failure of Engagement’ with China / Washington Quarterly (PDF)
  Harvard scholar Alastair Iain Johnston pushes back with an essay on the dominant narrative emerged of late that “U.S. engagement strategy” has failed with China. 

• Pacific internet scams
  Six Chinese nationals wanted by Beijing for internet scam arrested in Vanuatu / SCMP
  “Authorities in Vanuatu have arrested six Chinese nationals following complaints from authorities in China that they were operating an internet scam from the Pacific island.”

• Irish eyes are smiling at China
  Ireland-China business booms as 40th anniversary of diplomatic relations marked / The Irish Times

As Ireland and China celebrate the 40th anniversary of relations, business and trade remain, strong, as “bilateral trade hit €17 billion in goods and services last year, according to Eoin O’Leary, Ireland’s ambassador to China.”

“‘That figure has more than doubled over the past five years,’ he told The Irish Times, ‘and we are one of the few countries to enjoy a trade surplus with China.’”

• The treatment of rights lawyers in detention
  Imprisoned rights lawyer Wang Quanzhang gets first family visit in four years / David Cowhig’s Translation Blog
  Translation of an article by Lǐ Wénzú 李文足, wife of imprisoned Chinese human rights lawyer Wáng Quánzhāng 王全璋, who was tried and convicted of subversion of state power in December 2018, on her first visit with her husband since he was taken. 

SOCIETY AND CULTURE:

• Liu Xia — a life in exile
  ‘What I’m always doing is escaping, escaping, escaping’ / ChinaFile
  The transcript of an interview by Perry Link with Liú Xiá 刘霞, wife of the deceased Nobel Peace Prize-winning dissident Liú Xiǎobō 刘晓波, who spoke publicly for the first time since being allowed to leave China for Germany during a May 4th exhibition at the Galerie Peter Sillem in Frankfurt. 

• The crisis of the humanities and social sciences in China
  How the humanities and social sciences are holding China back / China Heritage
  A translation of an essay by Gōng Rènrèn 龚刃韧, a now-retired law professor of Peking University Law School, in which he decries the current “crisis” of the cowed intelligentsia in today’s China by looking at the case of Xǔ Zhāngrùn 许章润, the former professor at Tsinghua University.

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