An uncomfortable meal in Shanghai

Dear Access member,

SheLovesTech hosts the world’s largest pitch competition for early-stage female-led and female-impact tech startups. The New York local round will be held this year on August 5 in partnership with The China Project. Join us to listen to pitches from semifinalists, attend workshops, and network with investors and businesspeople who believe in the power of female entrepreneurs.

More info and tickets here. The China Project Access members can use the discount code ACCESS.

—Jeremy Goldkorn, Editor-in-Chief

<

1. Trump tweets insults as his negotiators dine in Shanghai 

The Wall Street Journal reports (paywall) that Chinese and U.S. negotiators have resumed trade talks but “expectations are low”:

The U.S. team, led by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, gathered for dinner Tuesday with the Chinese side, led by Chinese Vice Premier Liú Hè 刘鹤, at the Fairmont Peace Hotel, a Shanghai landmark on the city’s riverfront, according to a person familiar with the situation. A more formal round of talks is to take place at a government guesthouse in the west of the city Wednesday.

About the time Lighthizer, Mnuchin, and Liu were sitting down for dinner, Donald Trump tweeted and gave television interviews disparaging China, indicating that he did not have much confidence, or interest, in a deal. “China is doing very badly,” he typed: “Our Economy has become MUCH larger than the Chinese Economy is last 3 years.… We have all the cards, our past leaders never got it!”

It’s day 390 of the U.S.-China techno-trade war by our count, and there is no end in sight. 

2. Challenges from China at New Zealand universities 

Like Australia, which sold about $85 billion of goods and services to China in 2018, or a third of all exports, New Zealand is dependent on the Chinese market for about a fifth of every dollar the country makes abroad, totaling $11 billion in the year that ended in September 2018 (figures all in USD). 

A key “export” for both countries is education: Universities and, increasingly, high schools rely on Chinese students to keep their bottom lines healthy. The large numbers of mainland Chinese students, combined with pressure from Chinese diplomats and business associations, will inevitably lead to cultural clashes, misunderstandings, and university officials finding themselves explaining their way out of uncomfortable situations. 

Below are two such incidents at universities in New Zealand reported today, and one last week from Australia: 

• “The University of Auckland is launching a formal investigation after three Chinese men were filmed clashing with protesters on campus who were against a controversial proposed extradition bill in Hong Kong,” reports the New Zealand Herald. A video of the confrontation is on YouTube. 

• “Auckland University of Technology has denied bowing to Chinese government pressure to stop one of its rooms being used for an event marking the 30th anniversary of the bloody crackdown on protests in Tiananmen Square in Beijing,” per Radio New Zealand.

• At the University of Queensland in Brisbane last week, scuffles broke out “after pro-democracy students staged a sit-in supporting the extradition bill protests in Hong Kong and also condemning China’s treatment of Uygurs in Xinjiang,” according to the South China Morning Post.

We can expect many more such events in the coming years, and not just Down Under: This is coming to a campus near you in Canada, the U.K., and the U.S., too.  

3. A new story about the Xinjiang camps: They’re nearly empty

At a press conference in Beijing today, two senior Uyghur officials from the provincial Xinjiang government made rather surprising statements to the effect that 90 percent of internees have been released. According to the New York Times (porous paywall) and CNN, Alken Tuniaz, the vice chairman of the Xinjiang government, said:

The majority of people who have undergone education and training have returned to society and returned to their families… Most have already successfully achieved employment. Over 90 percent of the students have returned to society and returned to their families and are living happily.

Neither Tuniaz nor Shohrat Zakir, the Xinjiang government chairman who also spoke, refused to say how many people had been or are still held in the camps. The New York Times also points out:

Official Chinese media accounts of the two officials’ comments varied, raising the possibility that they misspoke and their comments had to be drawn back. Some cited Mr. Zakir as saying that 90 percent or more of people from camps had returned to society. Others said, citing him, that 90 percent of those released had found suitable work.

There has not been a single confirmation of the officials’ statements by any Uyghur in exile with family members in the camps. Since the government initially denied their existence and is making it almost impossible for neutral observers to visit the camps, the world may take some convincing about this latest spin.  

In other Xinjiang news:

• A Uyghur detainee in a June BBC video report on the Xinjiang camps has been identified as a cultural official, who received multiple awards and speaks fluent Chinese and English, reports Radio Free Asia. 

• “China’s anti-corruption watchdog said on Tuesday that it was investigating a high-level official in the northwest Xinjiang Uygur Autonomous Region,” according to the South China Morning Post. 

• A Kazakhstan court yesterday held the first hearing of a case against Serikjan Bilash, a naturalized Kazakh citizen born in China and “accused of inciting ethnic discord while opposing Beijing’s crackdown in its troubled Xinjiang region,” reports the South China Morning Post. Bilash was first detained in March. “Critics say his arrest appeared to be the result of pressure from Kazakhstan’s economically powerful neighbor.”

4. A crackdown on a Japan-worshipping subculture

Sixth Tone reports: 

On Sunday, police in eastern Anhui Province “said [in Chinese] they had arrested a cartoonist surnamed Zhang in May for disseminating content that ‘humiliates China.’” The 22-year-old is accused of producing comic strips that “depict Chinese as pigs” [see screenshots] and sharing them on domestic and international social media platforms. Police added she had done so to gain fame in the jīngrì 精日 community.

In China, members of the jingri subculture consider themselves to be “spiritually Japanese,” worshipping that country’s society and history. Though it is unclear how and when the trend started, China’s jingri have repeatedly landed in hot water for provocative behavior — like dressing up as World War II-era Japanese soldiers — that is purportedly aimed at gaining online fame.

In a separate statement [in Chinese] Sunday, police in the northeastern Liaoning province said they had arrested another Chinese national, surnamed Lu, for collaborating with Zhang.

The arrests seem to be part of a bigger campaign: Chinese-language reports from Radio Free Asia and Sina say that nine jingri adherents in six locations around the country have been arrested. 

5. Chinese ambassador dumps on South Africa

The Chinese ambassador to South Africa has something to say about the internal affairs of the country of my birth, reported by Reuters: 

South African President Cyril Ramaphosa is the “last hope” for “President Cyril Ramaphosa is the last hope of this country,” Lín Sōngtiān 林松添, China’s ambassador to South Africa, told Reuters.

But while African nations have seen a boom in infrastructure development over the past decade, he said projects proposed by the South African authorities had lacked feasibility studies capable of reassuring the Chinese government and banks of their profitability and sustainability.

Policies of extending incentives, including tax breaks, to attract foreign capital also did not do enough for Chinese investors, who Lin said wanted to see favorable conditions enshrined in an investment law approved by parliament.

“To date there are no major infrastructure projects from China here. Why? Because we don’t only need the concept of a project,” Lin said.

6. WeChat in North Korea

Daily NK reports:

“In the border region, North Korean residents are increasingly turning to WeChat instead of phone calls to contact China and South Korea. People are using Chinese SIM cards in their cell phones and installing WeChat because the crackdown on phone communication is becoming too repressive,” a source in North Pyongan Province told Daily NK.

This presents interesting surveillance opportunities for China. 

7. Tsai Ing-wen’s nonstop global diplomacy 

Fresh from her visit to the Caribbean and the U.S., where she had multiple public engagements, Taiwanese President Tsai Ing-wen (蔡英文 Cài Yīngwén) is now in the U.K., tweeting from the House of Lords: 

As like-minded partners, Taiwan & the U.K. cooperate on a diverse range of issues spanning from tech to trade. Today’s discussions with members of the @UKHouseofLords allowed us to explore new possibilities for closer collaboration, based on our shared values.

Tsai is branding her world tour “Journey of Freedom, Democracy, and Sustainability.”

8. Trading your citizenship for a football dream

CNN reports that in January 2019, a lower-league soccer player in the British leagues named Nico Yennaris “gave back his British passport, moved to Beijing and became a naturalized Chinese citizen.”

Yennaris does have a connection to China: his mother is Chinese. Which is also the case for John Hou Saeter, who in January renounced his Norwegian passport. CNN says that “they could soon be joined by other foreign-born players who can’t even claim partial Chinese ancestry.” Two Brazilian players and one from Portugal “are tipped to join the Chinese national squad in time for the Qatar 2022 World Cup.”

I wonder what they’ll do when they’re too old for the playing field. 

—–

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:

• New phones for gaming and TikTok videos?
  China’s ByteDance is developing a smartphone / CNBC
  ByteDance, maker of apps TikTok and Toutiao, announced that “it is developing a smartphone, following a deal it made with device maker Smartisan Technology.”
  Tencent working with Qualcomm on new gaming phone / TechNode
  Qualcomm and Tencent are cooperating on projects to optimize user experience for the Chinese company’s video games on devices powered by the U.S. firm’s chips, as well as on creating a 5G version of a Tencent-backed gaming phone, they said on Monday.

• Huawei sales up
  Huawei’s sales rise 23% despite US blacklisting / Financial Times (paywall)

Huawei’s sales grew 23 percent in the first half of the year even after it was blocked from buying components from US suppliers. The Chinese telecommunications company said strong domestic sales had seen a 24 per cent rise in smartphone revenues for the period, and insisted that it was well placed to weather the damage of the US ban on its telecoms equipment sales. 

• The New York Times (porous paywall) agrees, calling it “a sign that the Trump administration’s clampdown has hardly brought the company crashing to the ground.” In addition, CNBC reports that data gathered by the research firm Canalys shows Huawei’s success comes as sales by both foreign and domestic competitors is flagging.

Huawei’s smartphone shipments in China soared 31% year-on-year, even as the overall market slowed. Apple’s shipments declined 14% in the second quarter, while shipments from Chinese competitors Oppo, Vivo and Xiaomi also tumbled.

• Tesla tax deal
  Tesla to pay China $323 million a year in tax for factory site / Bloomberg (porous paywall)

Tesla Inc. agreed to pay China 2.23 billion yuan ($323 million) in tax every year as part of a deal with local authorities to build an electric-vehicle factory on the outskirts of Shanghai.

Under the terms of the lease with the Shanghai government, Tesla must start generating the annual tax revenues at the end of 2023 — or hand the land back, the company’s latest quarterly filing shows.

• Chinese Southern Airlines trainee pilot dies at U.S. flight school
  Chinese cadet, instructor at U.S. Aviation Academy die in plane crash / Global Times
  The U.S. Aviation Academy, a pilot training school, “suspended flight training for all Chinese cadets after a China Southern Airlines trainee pilot died in a crash on Sunday. The cadet and an instructor were training aboard the twin-engine propeller aircraft when it crashed and both died.” The Global Times says former students at the school have complained of unsafe aircraft and discrimination against Chinese students. 

• China’s forex data
  China has ‘price to pay’ for cutting US dollar share of forex reserves, analysts say / SCMP

China’s sharp reduction in US dollar asset holdings has increased the risk of its investment portfolio, analysts have said in response to a disclosure of historical data by the agency charged with managing its foreign exchange reserves.

• See also our The China Project explainer on China’s U.S. Treasury holdings — a key component of China’s forex reserves.

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

• Swine fever aftermath
  China’s pig herd predicted to shrink by 50% due to swine fever / CNBC

China’s pig herd could halve by the end of 2019 from a year earlier as an epidemic of African swine fever sweeps through the world’s top pork producer, analysts at Dutch bank Rabobank forecast on Tuesday.

• Surging solar investment on the Belt and Road
  Chinese investment in renewables soars under Belt & Road initiative / PV magazine
  “Solar now presents a serious rebuttal to any pattern of Chinese overseas pro-coal bias,” said Liu Junyan, a Beijing-based climate and energy campaigner with Greenpeace East Asia. “Chinese investors’ ratio of coal to solar is now the same at home and abroad — both are still six-to-one coal, unfortunately, but I’m amazed to see what five years of equity investment in solar made possible.”
  China Belt and Road power investments surge from 2014-2019: study / Reuters 
  “Chinese equity investment in solar, wind and coal power projects in Belt and Road countries has surged from 2014 to 2019, with planned capacity up more than tenfold compared to the previous five-year period, environmental group Greenpeace said.”

POLITICS AND CURRENT AFFAIRS:

• 44 Hong Kong protesters arrested
  Protesters and Hong Kong officers clash outside police station after 44 arrested in earlier confrontations charged for rioting / SCMP

• The riot charge on suspects is the first of its kind over the extradition bill crisis, which has gripped the city since June.

• Protesters call those arrested ‘honorable fighters’ who were only protecting Hong Kong when they were detained in Sunday’s incident.

• Opinion: China is looking for a quick economic fix in Hong Kong. It’s missing the point | Antony Dapiran / Guardian 
  “There are signs Beijing intends to work with Hong Kong on issues such as housing. But without democratic reform, protests will intensify.”
  Interview: ‘I am a Hongkonger’ – Artist Ai Weiwei on why he supports the city’s ‘brave, clever, beautiful’ protest movement / HKFP

• Chinese American businessman acquitted of espionage charges
  Houston businessman convicted of conspiring to steal trade secrets, acquitted of economic espionage for China / Washington Post

A federal jury convicted a Chinese-American businessman of conspiring to commit trade secret theft against a Texas oil drilling equipment maker on Monday, but acquitted him of conspiring to commit economic espionage for the benefit of China and to launder money.

Jurors in Washington deliberated three days after a three-week trial before returning a split verdict against Shan Shi. Shi is a 54-year-old naturalized U.S. citizen and entrepreneur in Houston who founded a company to research how to make casings for drilling pipes that help keep them afloat and not sink attached oil rigs.

• Making the Western world uncomfortable on Twitter 
  Chinese diplomats on social media an inevitable trend, showcases confidence and openness: experts / Global Times
  The mouth-frothing nationalist rag Global Times says that Chinese diplomats on Twitter have “made the Western world, which holds China to double standards, uncomfortable.” The four tweeting diplomats are the ambassadors to the U.S., India, Panama, and the Maldives. 

• New TV channel: All army, all the time  
  CCTV’s national defense, military channel to debut in August / 81.cn
  The website of the People’s Liberation Army reports:

The China Media Group, one of China’s major broadcasters, announced Friday that its National Defense and Military Channel, or the new CCTV-7, will make its debut on Aug. 1. The new channel will replace the current CCTV-7, which carries programs related to both the military and agriculture. With a brand-new logo and image, the new CCTV-7 will exclusively broadcast military programs including news, television features, documentaries and entertainment shows.

• China at the South Pole
  Australia declares China’s plan for Antarctic conduct has ‘no formal standing’ / ABC (Australia)
  A Chinese proposal “to administer an area deep inside Australia’s Antarctic claim” was discussed this month in Prague at a meeting of countries involved in Antarctic affairs. Australia rejected the bid as having “no formal standing in the Antarctic Treaty System.”

• Growing American power behind Sino-Russian lovefest?
  Opinion: Why Russia and China are joining forces / WSJ (paywall)
  Walter Russell Mead argues that aside from the usual factors mentioned by observers:

There is another factor driving Moscow and Beijing together. The circus atmosphere of the Trump presidency sometimes obscures this, but the past few years have witnessed a marked increase in American power. Washington’s reach is expanding, its ability to enforce its will on others has grown, and it has become more willing and able to use its power disruptively. Moreover, as recent protests in Moscow and Hong Kong demonstrate, liberal ideas still have the power to challenge the world’s autocrats. Russia and China have decided to work together more closely in large part because both countries are more worried about the U.S.

• Nepal-China free port and railway slowdowns
  Nepal and China still haven’t notified each other on readiness to implement the Transit and Transportation Agreement / Kathmandu Post  

Three months since the signing of the Protocol to the Agreement on Transit and Transportation, Nepal and China have yet to notify each other that they are ready to implement the pact, which will allow Nepal access to four Chinese seaports — Tianjin, Shenzhen, Lianyungang and Zhanjiang — and three land ports — in Lanzhou, Lhasa and Shigatse — for third-country imports. 

• The elusive China-Nepal rail link: High costs and risks, uncertain benefits / Hindustan Times
  “Beijing’s commitment to build a railway link to Kathmandu has become the symbol” of the warm relations between Nepal and China. But a long-discussed China-Nepal railway appears to remain a pipe dream. 

• Debt diplomacy in the Pacific
  Tonga: Between an irresistible force and an immovable object / Future Directions International
  A paper from an Australian think tank. Its key points: 

• It is suspected that China seeks to increase its influence in the South-West Pacific region. 

• China has used the tried-and-tested policy of providing loans to a number of countries in the region, including Tonga. 

• Financial mismanagement of that loan has seen Tonga ask Beijing to waive it. Beijing has refused, however, leaving Tonga deeply indebted and under its influence.  

SOCIETY AND CULTURE:

• Chopsticks
  Chopped! A history of China’s indispensable eating utensil / World of Chinese

In November, Dolce & Gabbana saw sales plummet over an offensive Shanghai runway show ad. Among charges of sexism, racism, and general sleaze, the Italian fashion house was accused of cheap orientalism by depicting a model eating Italian food with chopsticks—and using them wrong… How did chopsticks become the quintessential Chinese utensil, though?

FEATURED ON SUPCHINA

Click Here

Op-ed: Chinese Americans are increasingly siding with Trump. Here’s how liberals can win them back

Rong Xiaoxing writes: Many Chinese Americans are beginning to think their middle-class lives and the future of their children are threatened by a slew of progressive programs, in particular, affirmative action. But what has really accelerated the growth of conservatism among new Chinese immigrants — people who have little experience with racism and don’t care to fight against white privilege — is a feeling that liberal decision-makers aren’t interested in listening to them. They are turning to Donald Trump as a result.