‘Terrorism’ in Hong Kong 

Dear Access member,

It’s been a relatively quiet news day in most of China today, but not in Hong Kong, where the world’s eighth-busiest airport was shut down while Chinese government officials and state media delivered increasingly menacing messages to the protesters.  

Thanks to everyone who emailed me feedback in the last few days: I will respond as I clear my inbox over the next day or two!

—Jeremy Goldkorn, Editor-in-Chief

1. Beijing sees ‘signs of terrorism’ as Hong Kong airport shuts down

Things are not looking good:

Hong Kong has just seen “its darkest weekend in contemporary history,” says this protester in a video clip from Radio Free Asia as she complains of the police calling citizens “cockroaches” during two days of violent clashes. Beijing has warned of incipient “terrorism” — a word that will be used to license the coming crackdown.

• Hong Kong airport shut down today, Monday, August 12, grounding “around 200 flights and affecting many others worldwide, after thousands of protesters swarmed the main terminal building in the biggest disruption yet to the city’s economy since demonstrations escalated in June,” reports the Straits Times. Flights might resume Tuesday, August 13, “depending on recovery operations.”

• Beijing said the protests are showing “signs of terrorism.” Yáng Guāng 杨光, the spokesperson for the Chinese government’s Hong Kong and Macau Affairs Office who last week warned protesters that if they “play with fire, they’ll get incinerated” (玩火者必自焚 wánhuǒzhě bì zìfén), “read out a stern statement to Hong Kong media in Beijing, saying the city had come to a ‘critical moment’ and vowing to clamp down on violent crime with an ‘iron fist,’” according to the South China Morning Post. Xinhua’s language went a little further: “Hong Kong will slide into a bottomless abyss if the terror atrocities are allowed to continue.”

• Anger at the police is growing. After a weekend of protests, activist Nathan Law (羅冠聰 Luó Guāncōng) tweeted that today, “August 12, marks the single most violent day in more than two months of the Hong Kong protests as we see the police all across town acting completely out of their control.” He lists a variety of police actions, including: 

  • Shooting a female protester in close distance, which hit her in the right eye and blinded her permanently, according to information from doctors.

  • Framing protesters as aggressive and arresting them on much harsher charges, after putting weapons inside their bags the moment they were pressed against the wall or ground.

  • Allowing thugs — many with ties to organized crime, based on experience from previous incidents — to attack protesters and even passersby indiscriminately.

  • Firing multiple canisters of tear gas inside Kwai Fong MTR station, which violated the factory instructions of no usage indoors.

  • Impersonating protesters by wearing the same gear (yellow helmets, black masks, etc.) and then ambushing them on-site just as uniformed cops arrived for mass arrests.

• “The People’s Armed Police have been assembling in Shenzhen, a city bordering Hong Kong, in advance of apparent large-scale exercises,” says the Global Times, in a tweet that shows video footage of armored vehicles driving into Shenzhen set to kitschy martial soundtrack. The PAP or wǔjǐng 武警 are part of China’s military, primarily responsible for internal security and “stability maintenance,” riot control, and antiterrorism. See also this video from Shenzhen resident Twitter user @g_helleu.

• “Cathay Pacific on Monday warned its staff that those who ‘support or participate in illegal protests’ in Hong Kong could be fired,” reports CNN. This comes after Friday’s news that Beijing has banned Cathay Pacific flight crew who protest from Chinese airspace. 

• “Chinese state-run companies have told employees to avoid taking Cathay Pacific Airways flights,” says Bloomberg (porous paywall). 

WHAT’S GOING TO HAPPEN NEXT?

Whatever comes next is not going to be nice and may be very nasty indeed. As Beijing ratchets up the rhetoric, the protesters show no signs of flagging. In a Twitter thread that gives a timeline of Chinese government actions, scholar Sebastian Veg describes “the crystallization of a 4-pronged strategy”: 

1. Hong Kong police will be used to intimidate protesters through force and to arrest the “violent extremists” aka “frontline protesters” (rumored to number in the thousands).

2. The judiciary will come under further pressure from the prosecution using politicized charges.

3. Patriotic forces must be mobilized to reunify the extremely disunited pro-establishment camp: businesses will face retaliation; universities and public institutions in Hong Kong need to be brought back under control through internal discipline.
   HK business interests, so far somewhat sympathetic to the protests, were threatened with retaliation and boycott if they do not actively oppose the protests. And calls from pro-establishment camp for an in-depth inquiry or resignation of the chief executive immediately ceased and attacks on “foreign forces” were stepped up.

4. Turn Hong Kong public opinion against the movement and isolate the “violent extremists” from the “patriotic silent majority,” especially highlighting the economic impact of protests.

Further reporting:

• Cathay Pacific, icon of Hong Kong’s rise, now reflects China’s grip / NYT (porous paywall)

• Hong Kong police top brass face barrage of questions over use of weapons, injuries, undercover tactics / HKFP

• Elite police ‘raptor’ squad went undercover to target radical Hong Kong protesters, insiders say / SCMP

• Hong Kong protests: brutal undercover police tactics spark outcry / Guardian 

• Beijing’s new weapon to muffle Hong Kong protests: fake news / Guardian 

2. Former central bankers warn of U.S.-China financial war 

At a financial sector conference in China on the weekend, two former central bankers predicted expanded conflict between China and the U.S. Bloomberg reports (porous paywall):  

The U.S.’s labeling of China as a currency manipulator “signifies the trade war is evolving into a financial war and a currency war,” and policy makers must prepare for long-term conflicts, Chén Yuán 陈元, former deputy governor of the People’s Bank of China [and princeling], said at a China Finance 40 meeting in Yichun, Heilongjiang.

Former PBOC Governor Zhōu Xiǎochuān 周小川 said at the gathering that conflicts with the U.S. could expand from the trade front into other areas, including politics, military and technology. He called for efforts to improve the yuan’s global role to deal with the challenges of a dollar-denominated financial system.

The bankers’ comments were widely reproduced in Chinese news media. 

News from other fronts of the U.S.-China techno-trade financial war: 

Chinese companies are following their foreign counterparts abroad: “Since last June, 33 listed companies have informed China’s two stock exchanges of their plans to set up or expand production abroad,” according to Nikkei Asian Review (porous paywall). 

James Kynge, veteran observer of business and finance in China, has a short video on the Financial Times website (no paywall!) in which Kynge argues, convincingly, that the U.S. “isn’t winning the trade war with China.”

3. Plea for U.S. government to treat Chinese scholars fairly

The South China Morning Post reports: 

Intelligence agencies in the United States, including the Federal Bureau of Investigation (FBI) have in recent months asked some US research universities to develop protocols for monitoring students and scholars from Chinese state-affiliated research institutions.

A letter urging the government to “tread carefully” has been signed by 19 universities and associations including the American Association of University Professors (AAUP), the Association of American Colleges & Universities (AAC&U), and Scholars at Risk, an international network of academic institutions that supports academic freedom. It was also signed by PEN America, a non-government organisation that promotes free expression through the advancement of literature and human rights.

See also: In defense of the Yenching Academy by Ethan Paul on The China Project:

Late last week, NPR reported that the FBI had questioned at least five American graduates of the Yenching Academy, an English-language master’s program Beijing founded five years ago to replicate the soft-power successes of the West’s Rhodes and Marshall scholarships. 

I spent the last year at Yenching, and will be returning in September to complete my second year. Although I have become accustomed to the Trump administration’s “whole of government” effort to combat Chinese espionage and influence, for the first time it felt personal.

—–

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:

• Foreign brands hurt the feelings of the Chinese people again
  Fashion firms apologize for implying Taiwan and Hong Kong separate from China / The Guardian
  The Coach and Givenchy luxury labels, the sports brand Asics, the Calvin Klein clothing line and the Fresh beauty brand issued apologies on Monday after Chinese internet users launched online campaigns against them for implying that Taiwan and Hong Kong are not part of China on company websites and on T-shirts.

• Is a stimulus package coming?
  China is saving stimulus for trade war winter as yuan weakens / Bloomberg (porous paywall)
  Last week, CPI/PPI figures showed the first signs of deflation since 2016, prompting some to wonder how Chinese authorities might move to stimulate the economy, but according to Bloomberg, stimulus does not seem imminent: “Chinese policy makers are holding back from rolling out the big guns of monetary stimulus, keeping options in reserve as the trade standoff with the U.S. risks morphing into a global currency war.”

• More bad China news from Fonterra
  World’s biggest milk exporter hurt by turmoil in Venezuela and China’s slowdown / CNN
  New Zealand milk giant Fonterra “says it expects to lose nearly half a billion dollars this year, and won’t pay its shareholders a dividend,” attributing its losses in part to China’s economic slowdown. Last week, Fonterra announced that it will sell down its stake in Beingmate, its longtime China partner, because of “management issues.”

• Fracking in Sichuan
  CNPC targets Sichuan in gas production drive / Interfax Global Energy (paywall)
  China National Petroleum Corp. (CNPC) has pledged to more than double gas output at its Southwest Oil and Gas Field unit in Sichuan Province by 2025, which Interfax says reflects “a broader move to strengthen energy security in the wake of China’s trade spat with the US.”

• Auto sector woes
  China new-energy vehicle sales drop for first time in over two years / Reuters

NEV sales fell to 80,000 units last month in China. That compared with a growth of 80 percent in NEV sales in June. Overall auto sales in the world’s biggest vehicle market fell 4.3 percent in July, down for a 13th consecutive month, the China Association of Automobile Manufacturers said on Monday. 

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

• Zhejiang hit by hurricane
  Typhoon Lekima: Buildings collapse in China flooding devastation / BBC

Typhoon Lekima in China has killed dozens of people, with over a million evacuated from Zhejiang province.

Officials say about five million people in Zhejiang province have been affected and around 250,000 residents have been evacuated in Shanghai.

POLITICS AND CURRENT AFFAIRS:

• India reassures China on Kashmir
  India vows charter amendment won’t change Kashmir’s Line of Control / Global Times
  “Chinese State Councilor and Foreign Minister 王毅 Wáng Yì met Indian External Affairs Minister Subrahmanyam Jaishankar in Beijing on Monday.” The talks led to assurances that the new “Line of Control (LoC)” in Kashmir wouldn’t lead to new sovereignty claims over disputed territories. India’s Hindustan Times reporting of the talks was even more positive, leading with the announcement of “a bouquet of new initiatives… as the two neighbours opened new areas of convergence amid old and new tensions in ties.”

• Britain’s China challenge
  How Britain should respond to Chinese threats / British Interest
  “How can the U.K. deter P.R.C. actions it considers antithetical to its own interests?” asks John Hemmings, in an essay suggesting a new approach for Westminster as it becomes apparent that the “Golden Era” of Sino-British relations has failed. 

• Australian anxiety
  Australia’s impossible China dilemma / news.com.au

It’s a headache-inducing decision that’s been looming over Canberra for many years, but as an intensifying trade war between the U.S. and China sends shockwaves through the global economy, Australia may soon have to make its mind up.

• Conflicts with Chinese students on foreign campuses 
  Hong Kong protests to Uygur camps: how Chinese students became a subject of scorn / SCMP

• Campus confrontations have erupted from Canada to New Zealand as mainland Chinese students react, sometimes violently, to public scrutiny of Beijing’s policies.

• Such conflict is likely to persist as Chinese diplomatic missions support robust rebuttals to those who disagree with China’s stance.

• Uyghurs in California
  ‘They want to erase us.’ California Uyghurs fear for family members in China / Los Angeles Times (porous paywall)
  “In Southern California, home to about 1,000 members of the diaspora, Uyghurs say there is not one among them who has not had a friend or family member ‘disappeared’ by Chinese police. Like Arkin, they are left to worry whether — and where — their loved ones have been taken and whether they will surface again.”

SOCIETY AND CULTURE:

• A science-fiction flop
  Chinese director says he’s ‘truly sorry’ for sci-fi flop / Sixth Tone

A star-studded movie once projected to become China’s next big sci-fi blockbuster performed so poorly during its opening weekend that its director has issued a public apology.

Téng Huátāo 滕华涛, the director of “Shanghai Fortress,” on Saturday expressed his “extreme sadness” over myriad memes joking that the movie had “closed the door” on expectations for Chinese sci-fi. 

• Affirmative action for rural residents?
  Peking University rejects, then accepts, rural students’ admissions / Sixth Tone
  “One of China’s top universities will admit two students from rural Henan Province after its initial objections over the students’ low test scores prompted a public outcry.”

FEATURED ON SUPCHINA

Click Here

Why Chinese are good at math (and it’s not racial)

China and the U.S. were co-champions of the 60th International Mathematical Olympiad, held last month at the University of Bath in England. Five of the six competitors on the American team were of Chinese descent. Which leads us to ask: Why do the Chinese perform so well in math competitions?

Mandopop Month: Rocket Girls 101 celebrates growth with emotional single ‘Wind’

The release of the single “Wind” by Rocket Girls 101 火箭少女 101 is just as commemorative as it is bittersweet: The song is a celebration of the 11-member girl group’s first anniversary, but it also means there’s only one year left before their planned disbandment, which is set to take place next summer.

China’s World Cup qualifying campaign to be led by a Brazilian

Brazilian soccer player Elkeson is set to be named to China’s national team squad for the first time this fall as the country prepares to attempt qualification for the 2022 World Cup in Qatar. If confirmed, it would cap a remarkable few months for Chinese football. Also in this week’s China Sports Column: The Shenzhen youth hockey team, upset at getting blown out by Hong Kong, resorted to fisticuffs.

SINICA PODCAST NETWORK

Sinica Early Access: The world according to Jeremy Goldkorn

This special episode of Sinica starring our very own Jeremy Goldkorn was recorded in New York on July 17. With decades of experience in China-related business, entrepreneurship, and media, Jeremy shares his views on the latest developments in Chinese business, technology, and politics, and tells personal stories from his 20 years living in China.

• Sinica Early Access is an ad-free, full-length preview of this week’s Sinica Podcast, exclusively for The China Project Access members. Listen by plugging this RSS feed directly into your podcast app. 

The Caixin-Sinica Business Brief, episode 94

This week on the Caixin-Sinica Business Brief: China’s yuan dropping below seven per dollar, Hengfeng Bank’s official approval for a restructuring plan, the story of Hu Huaibang 胡怀邦, Tesla’s Shanghai facility, Huawei’s new operating system “Harmony,” and more. 

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