Huge Israeli delegation visits China

Israeli Prime Minister Netanyahu in Beijing

At the end of a three-day visit to Beijing, Israeli Prime Minister Benjamin Netanyahu met with President Xi Jinping on Tuesday. The meeting was the top story on the websites of both the People’s Daily and Xinhua News Agency (in English here). Xi spoke of the “long-term and profound impact on the situation in the Middle East,” referring to the Israel-Palestine issue, and said that “China appreciates Israel’s adoption of the two-state solution.”

In 1971, at his maiden address to the United Nations after China’s seat was handed over to the People’s Republic, delegate Qiao Guanhua 乔冠华 said that “the intrinsic nature of the Middle East question lies in the aggression against the Palestinian people and the other Arab peoples committed by Israeli Zionism.” Nonetheless, as pragmatism took over from ideology in China’s foreign policy, China and Israel opened diplomatic ties in 1992. The last 25 years have seen a remarkable balancing act, as China has maintained close ties with many Middle Eastern countries, including Iran — which many Israelis see as an existential threat to their country — and continues to support the Palestinian quest for statehood.  

However, judging from Israeli media coverage of Netanyahu’s visit to China, the attitude of the Jewish state appears to be “Balancing act, shmalancing act: Let’s do business!” Haaretz reports (paywall) that the Israeli prime minister’s retinue included “no fewer than 100 businesspeople and academics,” including “makers of agricultural and desalination technology and two of Israel’s biggest banks, venture capital funds and even corporate lawyers.”

Although details have not been announced yet, Haaretz says that the two countries would sign deals in aviation, education, science, health, and environmental sectors, and ink an accord that would allow “thousands of Chinese workers to come to Israel to work in the building industry.” In a separate article, Haaretz says (paywall) that Netanyahu met with “property developer Wanda, the ecommerce giant Alibaba, the electronics makers Huawei and Lenovo and the internet company Baidu.” Bloomberg also reports that Netanyahu asked Xi “to lift foreign currency restrictions for Chinese investors in Israeli technology companies.”

— Jeremy Goldkorn, Editor in Chief

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This issue of the The China Project newsletter was produced by Sky Canaves, Lucas Niewenhuis, Jia Guo, and Jiayun Feng. More China stories worth your time are curated below, with the most important ones at the top of each section.

BUSINESS AND TECHNOLOGY:

• Secretive billionaire reveals how he toppled Apple in China / Bloomberg
  Bloomberg profiles Duan Yongping 段永平, the founder of the leading Chinese smartphone brands Oppo and Vivo. The two companies together shipped more than 147 million smartphones in China in 2016, beating Apple’s 44.9 million. Both brands have developed marketing approaches that appeal to local consumers, and their products surpass the iPhone on measures such as charging speeds and battery life while costing much less. A newly released model Oppo R9s Plus costs 3,499 yuan ($507) while an iPhone 7 costs 5,388 yuan ($781) in China. In 2016, Apple’s iPhone shipments plummeted 23.2 percent, shrinking Apple’s market share to just 9.6 percent — the lowest in about two years.
  In related news, Reuters reports that on Tuesday, Apple CEO Tim Cook visited the Chinese bike-sharing company Ofo in Beijing. Ofo claims that it operates in 43 cities in China with 2.2 million bikes. Its rival, Mobike, which has raised more than $300 million so far this year, just rolled out its operation in Singapore, according to Tech in Asia. For more on China’s bike-sharing companies, see “Bike sharing done right: A real Chinese innovation” on The China Project.
• A year is a long time in Chinese business / Financial Times (paywall)
  Real estate tycoon Wang Shi 王石 is back in the news after a year of struggling to retain control of Vanke, the company he founded that is one of the country’s largest property groups. One year ago, real estate and insurance magnate Yao Zhenhua 姚振华, who had accumulated the largest single stake in Vanke, made a bid to buy a controlling stake in the company. Unluckily for Yao, his hostile takeover coincided with a period of market turmoil in China. Government measures to restore stability tightened control over financial markets: One result was that Yao was banned from participating in the insurance industry for 10 years. Yao has not been detained or further penalized, but Wang is firmly back in charge of his company.

• Why PR chiefs are running Communist Party branches at China tech firms / SCMP
• China sits on financial house of cards, OECD finds / WSJ (paywall)
• China steps up battle against property bubble / Financial Times (paywall)
• China Premier Li says will further open services, industries / Xinhua
• China’s taxes on imported cars feed trade tensions with U.S. / NYT (paywall)
• China’s fitness boom energizes sportswear brands / Financial Times (paywall)
• Rise in QR code scams in China puts online payment security in the spotlight / SCMP
• Dianrong, Quark Finance launch innovative credit factory / TechNode

POLITICS AND CURRENT AFFAIRS:

• China looks to disqualify Xi doubters ahead of key congress / Bloomberg
  The Two Sessions concluded only last week, and China’s state media is already looking ahead to the next big political gathering in Beijing: the Communist Party’s 19th National Congress — see, for example, this China Daily infographic. Unlike the Two Sessions — which leave observers trying to interpret dreary speeches and find other ways of reading the tea leaves, the National Congresses, which take place every five years, are where leadership changes are formally announced. Bloomberg says that this year, delegates to the National Congress will be screened using a “negative list”: Party members who have expressed doubts about Party policies, taken bribes, been involved with illegal construction projects, or hold foreign passports will be barred from attending.

• Taiwan launches homegrown submarine program to counter China / Bloomberg
• Opinion: China’s fear of U.S. missile defense is disingenuous / Foreign Policy (paywall)
• China says number of ‘terror attacks’ is down, but threat remains high / Reuters
• China to talk new Silk Road in Australia, no deal expected yet / Reuters

SOCIETY AND CULTURE:

• Autistic boy’s death one of many linked to squalid ‘care center’ in China / NYT (paywall)
  A care center for vagrants in Shaoguan, in southern China’s Guangdong Province, sparked an outburst of public anger on Monday following media reports of at least 21 deaths at the facility this year so far. One of the fatalities, a 15-year-old autistic boy, died of typhoid fever after being given filthy water and food. The Beijing News reported (in Chinese) that the boy was sent to the foster center last October after he wandered off from his father. He died two months later. Records from a nearby funeral home show that, during the 49 days from January 1 to February 18 this year, the care center delivered at least 20 other corpses. According to nearby villagers, the center is a “mysterious place” that used to be a detention center. Later on Monday, local officials announced that they had closed the facility in early March and had put four people under investigation, but the announcement didn’t confirm or dispute the estimated death toll. “This is not a place to offer assistance, but a place to kill people,” said an editorial (in Chinese) from the Beijing News. “We can’t let these poor people die without giving a sound reason.”
• Chinese subway system to carry out checks amid fears over faulty cabling / SCMP
  The vice-mayor of Xi’an publicly apologized on Monday after the city’s subway system failed to pass quality inspections, and eight people were detained on suspicion of supplying substandard cabling. The initial inspections were triggered by a whistleblower, who claimed to be a former employee from the company that provided cable materials. In a widely shared online post (in Chinese) titled “Do you dare to take the Xi’an subway anymore?,” the whistleblower accused the firm of lowering the quality of cable supplies to reduce costs. The company, Aokai, responded with an announcement calling the accusation groundless. However, in face of growing public pressure to investigate the problem, the local government inspected the faulty cables and vowed to look further into any possible collusion between the company and officials.

• British schools hope to improve performance with Chinese textbooks – hoping to emulate Chinese math education / The Atlantic
• Finding a pedicure in China, using cutting-edge translation apps / NPR
• Demand for traditional Chinese medicine fueling rising slaughter of donkeys in Africa / SCMP
• The great sprawl of China: Timelapse images reveal 30-year growth of cities / The Guardian
• Dinosaur-egg bandit arrested, police announce / China Daily