Team Trump desperately seeking escape hatch?

Dear Access member,

Our word of the day is escape hatch (逃生舱门 táoshēng cāng mén). 

—Jeremy Goldkorn, Editor-in-Chief

Map source: U.S.-China Business Council report on export data

1. Team Trump desperately seeking escape hatch? 

The U.S.-China Business Council has published a report analyzing export data from 265 congressional districts. It concludes that “cities and states across the US, as well as businesses that pay taxes and employ people there, continue to suffer, especially from loss of sales as a result of punitive tariffs.” 

Which is perhaps why “President Donald Trump’s top advisers are rushing to find an escape hatch for a series of tariff increases in the coming months, worried about the potential for further economic damage,” according to Politico. 

Bilateral tensions are slightly lower today. This morning, Trump tweeted: “It is expected that China will be buying large amounts of our agricultural products!” China did indeed place some orders. Per Reuters:

On Thursday, China importers bought at least 10 cargoes, or 600,000 tonnes of U.S. soybeans for October-December shipment, the country’s most significant purchases since at least June, U.S. traders with direct knowledge of the deals said.

That came after U.S. President Donald Trump on Wednesday delayed an increase in tariffs on Chinese goods by two weeks and China exempted some U.S. drugs and other goods from tariffs.

Beijing called the American tariff delay an act of “goodwill,”reports the South China Morning Post. Even the nationalist rag Global Times welcomed the move with an editorial featured prominently on its Chinese-language home page.

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

“An insurance company run by the Chinese government is stepping in to support Chinese exporters, providing low cost coverage and chasing down U.S. importers unwilling or unable to pay mounting tariffs,” according to Reuters.

China Export & Credit Insurance Corp, known as Sinosure, has aggressively increased its insurance of Chinese exporters since last year, according to company sources and public data… In some cases, local governments are even paying the premiums.

“China is looking to narrow the scope of its negotiations with the U.S. to only trade matters, putting thornier national-security issues on a separate track in a bid to break deadlocked talks,” says the Wall Street Journal (paywall), citing “people familiar with the plan.”

“The Medical Imaging and Technology Alliance has estimated new tariffs will cost the U.S.’s medical-technology industry about $138 million,” reports Fox Business in a piece profiling a medical-device company that has been hard hit.

Billionaire financier George Soros praised Trump in a Wall Street Journal article, calling his “China policy…a great achievement,” and even going so far as to describe it as “coherent.” He also cautioned Trump against reversing the ban on U.S. companies selling components to Huawei, which he describes as “crucial” for American companies to achieve — or in his view, maintain — the advantage in 5G technology. 

The U.S. is pressuring Israel to rethink investment from China, says Bloomberg (porous paywall):

China today is Israel’s second-largest trading partner after the U.S., responsible for $11.5 billion in annual transactions…

“Israel and Israeli companies are quickly coming to the realization that it’s going to be difficult to sustain business as usual in work with China while keeping the United States as the primary partner.” For the U.S., Israel may be the ultimate test of its global influence on trade. If the country doesn’t follow America’s China strategy, who will?

2. Joshua Wong heads for D.C.

“Joshua Wong [黄之锋 Huáng Zhīfēng], one of the most recognizable pro-democracy advocates from Hong Kong, left Germany for the United States on Thursday after a visit that provoked fierce Chinese criticism of Berlin and has raised questions over how the West can confront Beijing over its repressive human rights record,” according to the Washington Post.

Wong was “initially set to come to Washington for meetings with senior Trump administration officials and even President Trump earlier this week,” but first stopped in Germany at the invitation of German human rights activists, reports the Washington Times. The article notes that a “Trump administration official said this week that senior White House officials are still deciding how to handle the Wong visit and who will meet with him.”

In Hong Kong today: “Hundreds of pro-Beijing supporters confronted anti-government protesters at a shopping mall in Hong Kong on Thursday, with both sides attempting to outsing each other,” says the South China Morning Post. 

Art and writing about Hong Kong: Chinese Storytellers look at the hidden emotional toll of Covering Hong Kong for journalists, while China Heritage has translated “a summer of blood and tears — according to six Hong Kong high-school students.” Digital Arts has compiled an album of “the most striking illustrations from the movement so far.”

“The Swiss watch industry is bracing for more disappointing news, as pro-democracy demonstrations continue to roil Hong Kong, its No. 1 market,” reports the New York Times. (porous paywall). Other business stories: 

• The protests have “spooked” the owners of co-working space operator The Executive Centre, who shelved a planned US$750 million sale, according to the South China Morning Post. 

• Also spooked: employees of Cathay Pacific airlines, who are feeling like “Big Brother” is watching this, per the New York Times (porous paywall).

• Cathay Pacific also suffered a 38 percent plunge in passengers travelling to Hong Kong in August, according to the South China Morning Post

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BUSINESS AND TECHNOLOGY:

• More on Hong Kong stock exchange’s offer to buy London
  LSE board poised to decide fate of Hong Kong exchange’s $39 billion offer / Reuters
  “The London Stock Exchange’s board will meet in coming days to decide on the Hong Kong bourse’s surprise $39 billion takeover proposal, a source close to the British company said on Thursday, as the market poured cold water on the deal.”
  A Hong Kong-London stock exchange bid ties 2 cities in turmoil / NYT (porous paywall)
  “Stock exchanges are potent national symbols of capitalistic clout, and a surprise offer on Wednesday by Hong Kong’s exchange to acquire its London competitor is likely to set off a transcontinental tug of war.”

• Short video
  Video app Kuaishou mulls U.S. IPO, raises funds at $25 billion valuation / Bloomberg via Caixin
  “Chinese startup Kuaishou is considering to go public in the U.S. to bankroll its expansion in short videos and fend off competition from TikTok owner ByteDance.”

• MUJI apologizes for “French Concession”
  MUJI is latest foreign company to apologize to China, for ‘French Concession’ / The China Project
  Following complaints from internet users, Japanese lifestyle brand MUJI has apologized for describing the location of a recent sponsored event in Shanghai as “in the French Concession.”
  Meanwhile, “a group of Chinese scholars will publish a report in November identifying companies on the Fortune Global 500 list that they say do not properly label Hong Kong, Taiwan and Macau,” according to the South China Morning Post. 

• Stimulus
  China hastens bond sales to fuel infrastructure buildup / Nikkei Asian Review (porous paywall)
  “China has allowed local governments to raise more funding from the bond market than planned this year to keep them investing in infrastructure amid an uncertain economic outlook.”
  China stimulus feared ‘too little, too late’ / FT (paywall)

A year ago, the rallying cry among Chinese policymakers was deleveraging the economy — but now the country’s senior leadership is moving quickly to revive bank lending in a fight against flagging economic growth… But investors and economists worry that China’s overall response to counteract the slowing growth trend has been too little, too late.

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

• Cement industry emissions
  Concrete steps? For China cement giants, monster carbon footprint smothers climate goals / Reuters via CNA
  Anhui Conch is the biggest cement manufacturer in China, which is “the world’s biggest consumer of cement, with total production capacity at around 55 percent of the global total,” which results in emissions of “vast quantities of nitrogen oxides and sulphur dioxide as well as CO2.” The company has launched a carbon capture and storage project, but “the genius of the plan is overwhelmed by the scale of the problem it seeks to address.”

• Transgender health needs
  China’s transgender community risk self-surgery and illegal drugs / AFP via CNA
  “In China, where no official numbers of transgender people exist, there are few medical facilities that offer gender reassignment surgery and little professional information on hormone treatment, forcing people to turn to the black market or online.”

POLITICS AND CURRENT AFFAIRS:

• Influencer anxiety in Australia
  Gladys Liu scandal: Australian PM condemns ‘grubby smear’ against MP with links to China’s ‘propaganda arm’ / SCMP
  Australian Prime Minister Scott Morrison said accusations that Hong Kong–born MP Gladys Liu (廖嬋娥 Liào Chán’é) has inappropriate links with a Chinese Communist Party group are a “grubby smear,” but Liu’s opponents are not satisfied with her explanation of her membership of a group called the China Overseas Exchange Association. 

• Philippines and the Hague arbitration 
  Duterte says Xi Jinping offered him an oil and gas deal to ignore South China Sea ruling / CNN
  “Philippines President Rodrigo Duterte said he has been offered a controlling stake in a joint energy deal by Chinese President Xi Jinping in exchange for ignoring an international arbitration in Manila’s favor on the South China Sea.”

• Taiwan presidential race
  Terry Gou quits KMT and could run for Taiwan presidency as an independent / SCMP
  “Taiwanese billionaire-turned politician Terry Gou (郭台銘 Guō Táimíng) has quit the Kuomintang, dealing a blow to the embattled opposition party, which had urged the Foxconn founder to give up on his plan to run for the presidency.”

• Pacific nations on the fence about Taiwan
  Taiwan urges Solomon Islands not to switch allegiance to Beijing / AFP
  Taiwan’s president urged the Solomon Islands not to switch diplomatic allegiance to China Monday, as the Pacific nation deliberates whether to recognize the far more economically powerful Beijing instead.
  Tuvalu election puts Taiwan ties in play / Reuters
  “The freshly elected lawmakers of the tiny Pacific country of Tuvalu are set to choose a prime minister against a backdrop of China’s efforts to erode the region’s traditional support for Taiwan.”

SOCIETY AND CULTURE:

• Taiwan in the 2020 Oscars and LGBT representation
  Taiwan submits same-sex romantic comedy drama to Oscars / Focus Taiwan
  Taiwan chose Dear Ex (谁先爱上他的 shéi xiān ài shàng tā de) — a 2018 comedy-drama notable for featuring a same-sex relationship — for its entry in the 2020 Academy Awards category for best international feature film. The only time a film from Taiwan has won the award was in 2001, for Crouching Tiger, Hidden Dragon.

• Popular online TV shows
  Here’s what Chinese netizens were streaming this summer / RADII 
  A rundown of recent hits on video-streaming services iQiyi, Tencent Video, and Youku.

• Foreign teacher crackdown
  The foreign teachers caught up in China’s education clampdown / Sixth Tone
  Sixth Tone adds colors to the many recent reports of foreign teachers being arrested, some charged with drug-related offenses, others punished for flouting visa rules:

In June, Jay finally caught a flight back to South Africa after several harrowing months spent in a detention center in East China. Her crime: Teaching English without a permit.

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