The propaganda is working

Dear Access member,

A correction: In a recent newsletter, we linked to this deeply reported story on the South China Morning Post: Beijing woos Taiwan hearts and minds with ‘paid’ news. We neglected to credit Reuters, the source of the story. My apologies. 

Second, we’ve decided to move our word of the day from the top image to this section of the newsletter so we can choose the best image rather than the one that suits the word of the day. Without further ado, our word of the day is terrorist: 恐怖分子 kǒngbù fènzi, part of a trending hashtag on Weibo, which you can read about below. 

—Jeremy Goldkorn, Editor-in-Chief 

1. Hong Kong: The propaganda is working

The BBC reports that “squads of riot police” arrived at the Hong Kong International Airport shortly before midnight local time after a second day of protests that brought flight departures to a standstill. 

• “At least three men were mobbed inside the airport by protesters,” according to the BBC, after protesters said they were “holding identity cards showing they were police officers from mainland China.”

• Protesters bound the wrists of one of the men with cable ties. They went through his bags and found a blue “I ♥︎ police” T-shirt of the kind “worn by thugs last week” and proceeded to interrogate him aggressively. The man appeared to faint before eventually being taken away by paramedics. See this Twitter thread from CNN reporter James Griffiths for details of the incident.

• Video footage was widely circulated, including in China, from where Hú Xījìn 胡锡进, editor of nationalistic rag Global Times, tweeted that the man was a Global Times “journalist.” 

• “Hong Kong terrorists besiege mainland tourists” (香港恐怖分子围攻内地游客 xiānggǎng kǒngbù fènzi wéigōng nèidì yóukè) became a trending hashtag on Weibo for several hours today. 

• We can expect Beijing to milk this unfortunate incident for everything it’s worth: as the New York Times points out (porous paywall),

In recent days, China has more aggressively stirred up nationalist and anti-Western sentiment using state and social media, and it has manipulated the context of images and videos to undermine the protesters.  

• The propaganda is working. Beijing resident and ChinaEconTalk podcaster Jordan Schneider tweeted: 

Seeing Peking University grads like and reshare articles on WeChat that blame the Hong Kong protests on the CIA has me as depressed as I’ve ever been about China’s future.

There is no doubt that Beijing intends to make life very difficult for Hongkongers who protest and companies that display even a flicker of sympathy for them. The question is: Will this second day of airport troubles and incidents such as the one described above begin to turn ordinary Hongkongers off the movement?

Other reports from Hong Kong:

“A 14-year-old boy arrested outside Tsim Sha Tsui Police Station on Sunday became the youngest person charged in connection with the anti-government protests that have rocked Hong Kong,” says the South China Morning Post. 

Swire Pacific, the company whose origins are in the opium trade and is a major shareholder in Cathay Pacific airlines, “was pressed into issuing its most strongly worded statement to date supporting the city’s place in China,” per the South China Morning Post. 

The Hong Kong Real Estate Developers Association (Reda) today issued a second statement condemning “anti-government protesters, accusing them of worsening the city’s economic slump and eroding its core values.” It must be pointed out that the business activities of Hong Kong developers have created one of the most expensive residential real estate markets in the world: $1.2 million is the average price of a Hong Kong home. Unhappiness about the unaffordability of housing is a major factor behind the mood of Hong Kong’s youth. 

The United Nations Human Rights Office “has accused Hong Kong police of defying international norms and standards in their use of weapons, creating ‘a considerable risk of death or serious injury,’” reports the South China Morning Post. 

“More than 1,000 health care staff from 13 public hospitals on Tuesday staged sit-in demonstrations at their workplace to condemn what they said was an excessive use of force by police in anti-government protests,” according to the South China Morning Post. 

2. Trump delays tariffs on Christmas shopping

Although Donald Trump tweeted (inaccurately) today “Prices not up, no inflation” despite the tariffs imposed on imports from China, he is worried about Christmas shoppers in the year before an election. Reuters reports on Trump’s first public admission that Americans are going to pay the tariffs: 

President Donald Trump on Tuesday backed off his plan to impose 10per cent tariffs on remaining Chinese imports on Sept. 1, delaying duties on cellphones, laptops and many other consumer goods in the hopes of blunting their impact on U.S. holiday sales…

“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” Trump told reporters in New Jersey. 

News from other fronts of the U.S.-China techno-trade war, day 404 by our count:

America is losing the trade war

An American importer of vinyl flooring is the subject of a Wall Street Journal profile titled 10 percent tariffs were manageable. At 25 percent, businesses are squirming (paywall). 

“A booming new market for U.S. oil and natural gas is rapidly unraveling amid increasingly tense trade negotiations between the world’s two largest economies,” Meanwhile, says the Houston Chronicle.

One of the alleged aims of the trade war — bringing jobs back to the U.S. — is failing, according to the New York Times (porous paywall). The Washington Post also finds that the uncertainty created by Trump’s erratic leadership of the trade war is causing U.S. businesses to take down job listings.

Another tech company is moving its production out of China: Inventec, which makes laptops for HP, “said it will shift production of notebooks for the U.S. market out of China within months,” according to Bloomberg (porous paywall). But those computers will now be made in Taiwan, not the U.S.  
See also this video from James Kynge of the Financial Times to which we linked yesterday: Why the U.S. isn’t winning the trade war with China. 

Huawei hires U.S. lobbyist as it prepares for future without U.S. tech 

Huawei “hired the law firm Sidley Austin LLP to lobby on trade as the U.S. pressures allies to join it in blacklisting the Chinese telecom giant,” reports Bloomberg (porous paywall).

Back at home, while patriotism seems to be driving strong Huawei sales in China, when it comes to Harmony (鸿蒙 hóngméng), the company’s newly released operating system (OS), reactions are mixed. Per BGR Media: “A recent Weibo poll, for example, found that almost 51 percent of 19,000 users who voted believe that the Hongmeng OS is ‘overblown.’”

Huawei “plans to unveil its own mapping service in October, as the Chinese tech giant works hard to cope with the US government’s ban on using Google Map in its overseas smartphones,” says the China Daily. 

3. Chinese criticism of social credit systems

The ChinAI Newsletter by Jeff Ding comprises regular translations of “Chinese-language musings on AI and related topics,” as well as links and commentary. The latest translation is of two pieces on China’s social credit system. 

Both pieces, published by popular Shanghai-based website The Paper and by Qianjiang Evening News, a major Zhejiang newspaper, offer criticism of social credit blacklists.  

4. 90 percent of Canadians, 60 percent of Americans negative on China

“China’s hostage diplomacy and punishing economic sanctions against Canada have further hardened Canadians’ attitudes toward Beijing’s authoritarian government,” according to the results of a new poll published by the Globe and Mail.

Ninety percent of respondents “have negative or somewhat negative impressions of China’s government and its leader, President Xí Jìnpíng 习近平.

Meanwhile, the Financial Times reports (paywall) that a “Pew Research Center poll conducted between mid-May and mid-June, after the acrimonious breakdown of trade negotiations between senior US and Chinese officials, found that 60 percent of Americans have an ‘unfavorable’ view of China, compared with just 26 percent who held a positive view.”

5. Brands apologize for offending Chinese sensibilities, again  

In the last few days, social media outrage in China, stoked by state media, has forced a handful of companies to issue mea culpas. 

Versace, Coach, Givenchy, Calvin Klein, Asics, and skincare brand Fresh have all apologized for listing Hong Kong and Taiwan as sovereign countries on their websites or on T-shirts. Meanwhile, the Taiwanese fruit tea chain Yifang recently found itself battered by — successively — mainland Chinese internet users, Hongkongers, and Taiwanese customers after staff in a Hong Kong outlet went on strike in solidarity with the protesters.

For more on these:

• From Versace to Calvin Klein: Major brands apologize for undermining China’s territorial sovereignty by Jiayun Feng on The China Project

• The impossible politics of doing business in “China” by Tianyu M. Fang on The China Project

• China’s online army shows foreign brands who’s in charge on Bloomberg (porous paywall)

6. The ‘mainlanders can’t afford pickles’ affair

Chinese internet users have been unleashing their fury on Taiwanese financial expert Huang Shih-tsung (黄世聪 Huáng Shìcōng) after he said China’s slowing economy had made pickles unaffordable for mainlanders.

Huang is a financial analyst and a frequent guest on Taiwanese political talk show Crucial Moment (关键时刻 guānjiàn shíkè). On August 9, while discussing the ongoing U.S.-China trade war’s effect on China’s economic growth, he said that the plunge in share prices of a major pickle company was because “mainlanders couldn’t afford to eat pickles recently, which is an alarming sign of the country’s economic prospects.”

Huang’s argument quickly caught the attention of Chinese internet users, who spent the weekend waging a full-on Weibo war against Huang. 

It’s worth pointing out that some economists and financial analysts have for several years used “the pickle index” as an alternative indicator of the economy. See for example ‘Pickle index’ measures changing tide of Chinese migrant workers in the South China Morning Post (2013), and Underwear or pickles? These are some of the alternative ways for measuring China’s economy in the Washington Post (2019).

For details of the pickle affair, click through to The China Project.  

7. Risky business: Teaching English in China 

We’ve been noting the rise in detentions and deportations of foreign teachers in China for several months. We’re not the only ones. Reuters reports, “Arrests and deportations of foreign teachers in China have soared this year, lawyers, schools and teachers say.”

• The “broad crackdown [is] defined by new police tactics and Beijing’s push for a ‘cleaner,’ more patriotic education system,” according to Reuters. 

• Alleged offenses of teachers at the Education First (EF) English-teaching chain include “drugs, fighting and cybersecurity violations, according to a June 27 internal notice sent to employees and seen by Reuters.”

• Hair follicle drug tests are a new technique used by the police that has landed many of the teachers in trouble. That’s magazine confirms that teachers in several cities have been tested this way. Hair follicle tests can detect cannabis and cocaine use as long as 90 days after use. 

• “Do NOT teach English in China and why EVERYONE should read this” is the advice from China Law Blog. 

—Jeremy Goldkorn, Editor-in-Chief

BUSINESS AND TECHNOLOGY:

• Esports to hit cinema
  Is live-streaming of esports in movie theaters a good business? / China Film Insider

In China, the live-broadcasting of esports shows great potential, as people in second-fifth tier cities have the needs to see esports games live, yet esports matches mostly take place at physical venues in first tier cities.

• Context: Esports encouraged by Chinese government.

• Zhuhai government to get out of air-conditioning
  Bidding begins for 15 percent stake in Chinese air conditioner giant / Caixin (paywall)
  Zhuhai Gree Group is owned by the Zhuhai government. Its most successful investment was Gree Electric Appliances, the world’s largest manufacturer of home air-conditioning units, but it is now accepting bids for its 15 percent stake in the air-conditioner giant.

• Tech winter and the trade war
  China’s tech firms to post slower June-quarter growth on sagging demand / Reuters
  “China’s top technology, e-commerce, and consumer electronic firms are set to report a sharp slowdown in revenue growth for the June quarter, as a bruising trade war with the United States weighed on the Chinese economy and hurt consumer spending.”

• PBoC optimistic amid defaults
  Q&A: Central Bank deputy says defaults are good for China’s bond market / Caixin (paywall)
  An interview with Pān Gōngshèng 潘功勝, deputy governor of the People’s Bank of China, centering on a recent series of high-level bank defaults.

• New Sichuan airport
  China approves $156 million airport project in Sichuan Province / Reuters via KFGO News
  “China’s state planner said on Tuesday it has approved an airport project costing around 1.1 billion yuan ($155.68 million)” in Langzhong in the southeastern part of Sichuan Province.

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

• Brazillion ethanol
  Chinese demand heats up Brazil’s ethanol industry / Chinadialogue

There are 332 million cars on the road in China, more than anywhere in the world. Most run on pure petrol, but from next year Chinese fuel companies will add 10% ethanol, a move that could have far reaching implications for the consumption of fossil fuels.

Environmentalists are optimistic that adding ethanol to Chinese petrol will cut greenhouse gas emissions but they are wary of unintended consequences because the biofuel industry requires large maize and sugarcane plantations that can encroach on forests.

POLITICS AND CURRENT AFFAIRS:

• Xinjiang’s internment camps
  China’s prison for Uyghurs: Women sterilized in ‘re-education’ camps / news.com.au

China is forcibly sterilizing women held in its vast network of “re-education” camps which house political and religious prisoners, survivors have claimed.

One woman, who was held for more than a year, has told French television that she was repeatedly injected with a substance by doctors in a prison in the far-west region of Xinjiang.

• Party official overseeing financial market found dead, circumstances concealed
  Senior Party official at Shanghai Futures Exchange dies / Caixin (paywall)

A senior Communist Party official at the Shanghai Futures Exchange died over the weekend from unknown causes, sources told Caixin. 

Hú Kūn 胡坤, 46, a member of the exchange’s Communist Party committee and its disciplinary inspection chief, died at home over the weekend, according to several people, who refused to be named because of the sensitivity of the issue. 

• Philippine president to discuss South China Sea with Xi?
  When Xi meets Duterte: Is the China-Philippines honeymoon over? / SCMP

When Philippine President Rodrigo Duterte visits China later this month, he intends to raise with Chinese President Xí Jìnpíng 习近平 the contentious topic of Beijing’s activities in the South China Sea – and the 2016 UN arbitration ruling negating its territorial claims there.

This has raised speculation that Manila is ready to take a harder line on its relations with Beijing, and on the South China Sea in particular, as since becoming president, Duterte has gone out of his way to embrace Beijing and Xi personally.

• Philippines President Rodrigo Duterte seen by public as ‘selling out’ to China, deputy says / Gulf News
  “Philippine Vice President Leni Robredo said citizens were worried Rodrigo Duterte was ‘selling out’ to Beijing and called on the president to take a stronger stand to protect the country’s sovereignty in the disputed South China Sea.”

• Canadian spy chief sees China threat
  ‘Significant and clear’ threat: What Canada’s spy chief says about China behind closed doors / National Post
  According to unpublished speeches by David Vigneault, the director of the Canadian Security Intelligence Service (CSIS):

“CSIS assesses that China represents the most significant and clear challenge for (human-enabled espionage) targeted against Canada’s universities.”

When it comes to foreign influence, Chinese threat actors are “particularly interested in universities and students, especially when they intersect with the so-called ‘five poisons,’ i.e. the Falun Gong, Taiwan, Tibet, the Uyghur community of Xinjiang and pro-democracy movements or individuals,” the speech said.

• Australia personal data and China
  Chinese firm’s takeover plan raises concern in Canberra over access to ADF medical records / Sydney Morning Herald
  “A Chinese company’s plans to take over healthcare giant Healius is raising concerns in Canberra because the deal could compromise Australian Defence Force medical records, including those of elite special forces.”
  University of Technology Sydney staff refuse China’s demand for passport numbers / Guardian
  “Academics at the University of Technology Sydney have refused a demand from the Chinese Ministry of Education for their passport numbers and dates of birth, in order to be able to continue to teach a joint Chinese-Australian course in Sydney.”

• Sweden: Almost out of the doghouse?
  Chinese tourist numbers dip, but trade with Sweden continues to grow despite tensions / SCMP
  “The number of Chinese traveling to Sweden dipped in 2018 amid a year of turbulent bilateral ties, but economic relations continue to grow on the whole, according to official data.” Beijing issued a travel advisory for Sweden last year after “a family of Chinese travelers was removed from a hotel in Stockholm by police after they arrived a day early and were denied lodging.”

SOCIETY AND CULTURE:

• China — where the police ensure performance art remains relevant
  Protest art to highlight Chinese urban village dwellers’ plight earns Shenzhen artist a visit from police / SCMP
  “Performance artist known as Nut Brother staged protest using giant excavator and dolls given by residents of Baishizhou, Shenzhen, who face losing their homes.”

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