China and the high price of American garlic – China’s latest top news

Garlic wars

Prices of garlic in the U.S. are amongst the highest in the world. This is partly because of an American anti-dumping (AD) regulation that has required levies on imports of fresh garlic from China since 1994, even though domestic farms are only able to supply 30 to 40 percent of the 260,000 tons of fresh garlic Americans eat every year. One Chinese company, Zhengzhou Harmoni Spice, “has been able to maintain an exemption from AD duties,” according to China Law Blog, because they “worked out a deal with the California garlic growers” whereby Harmoni would supply garlic to the Californian trade group.

However, China Law Blog says, “the cozy arrangement…is now at risk of falling apart, depending on [the Department of Commerce’s] upcoming final decision in the latest garlic administrative review.”

The land of soft openings

Andrew Batson, an astute observer of China and its economy, has a blog where he calls Ian Johnson’s The Souls of China: The Return of Religion After Mao “the China book of the year,” adding, “Not just because the subject matter is fascinating and undercovered, but also because it is packed with insights about all aspects of contemporary China.” As an example, Batson points to a passage, “which despite being more or less tossed off as an aside is a fairly profound insight into how China works”:

China is the land of soft openings: projects are first announced to big fanfare, structures erected as declarations of intent, and only then filled with content. In this sense, developing a new ideology to unify China is similar to building a shopping mall: the deal is publicized, the building goes up, a few stores open, but only years later are all the shops and restaurants open for business, and only after a number of anchor tenants have gone bankrupt. This makeshift model differs from how Westerns like to see projects — envisioned and planned thoroughly, then completed according to that design. But it has its own logic. If viable, the project goes ahead; if not, backing out is easier.

Batson notes that “keeping this pattern in mind is a good way to maintain a clear head when dealing with the latest grandiose Chinese announcement,” but that the “frenzy of commentary on China’s Belt and Road Initiative” has not applied such restraint.

South Korea suspends THAAD deployment

South Korea’s newly elected president, Moon Jae-in, has suspended the deployment of THAAD, an American missile defense system intended to protect South Korea from North Korean guided rockets. The BBC reports that “four recently arrived” THAAD launchers “will not be deployed” while “two already installed will stay in place.”

The Chinese government has seen the THAAD system as an unwelcome agent of change to the regional security balance. The New York Times calls (paywall) the suspension of the program “an apparent concession to China and a significant break with the United States on policy toward North Korea.”

A thuggish MMA fighter demystifies Chinese Kung Fu

The excellent blog Chublic Opinion has published a piece on the controversy over mixed martial arts (MMA) fighter Xu Xiaodong 徐晓冬, who challenged a tai chi master to a duel, and beat him to submission in seconds in a public demonstration of his accusations that traditional Chinese martial arts have been corrupted. Xu has since been attacked, not just for his fighting skills but also for his political attitudes as a traitor whose actions have undermined a proud Chinese tradition.

Downtime

We’re upgrading TheChinaProject.com, so the website may be down some of the time on June 7 and 8. Thank you for your patience!

 —Jeremy Goldkorn, Editor-in-Chief

The gaokao: China’s most grueling school examinations

Jiayun Feng brings you a short history of the most famous feature of China’s educational system on its 40th anniversary.

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:

Good credit = visa to Japan or Luxembourg  

Alibaba’s Ant Financial, the world’s largest third-party payments platform, which runs Alipay and Yu’e Bao, will apply its Sesame Credit scores to fast-track visa applications for individuals deemed “financially reliable,” Caixin reports (paywall). Any of the 100 million users ranked on Sesame Credit with a score of at least 750 for Japan, or 700 for Luxembourg — the scale ranges from 350 to 900 — will be “exempt from the normally required process of submitting bank records when applying through the e-commerce giant’s travel-booking arm for visas.”

The move is the latest of a series of experiments by the payments platform: Ant Financial originally applied a similar exemption for visas to Singapore in 2015, and recently used Sesame Credit’s data to “waive shared bike deposits.” The People’s Bank of China (PBOC), though it handpicked Sesame Credit as one of a few companies to “tentatively open the country’s private-sector personal credit-reporting system,” has been unimpressed by results so far, Caixin reports. “Banks and private lenders are dubious about the reliability of the assessments made by firms like Sesame,” Caixin says, and “[Wan Cunzhi of the PBOC’s Credit Information System Bureau] told Caixin that often the scores are a poor reference for an individual’s actual financial trustworthiness.”

• A key question is at the heart of China’s new cybersecurity law: Where should data live? / Quartz
  There is “more than enough reason to doubt that…China’s true motivations lie in protecting its citizens’ privacy.”
• Online banks tied to Tencent, Alibaba bulk up 1 yuan at a time on microloans / Caixin
• China’s forex reserves hit a seven-month high / SCMP

POLITICS AND CURRENT AFFAIRS:

U.S.: China wants to build military bases, warplanes, and quantum communications technologies

The U.S. Department of Defense released its annual report on Chinese military power on June 5, which you can read in full here. The U.S. estimates that China spent more than $180 billion on its military in 2016, although China reported only $140 billion. Media outlets highlighted three other points in the report:

• China will build more military bases following its first overseas naval base currently under construction in Djibouti, on the Horn of Africa. CNBC noted that “the report repeatedly cited China’s construction of its first overseas naval base in Djibouti,” and that Pakistan is a likely location for a future Chinese military base due to “a long-standing friendly relationship and similar strategic interests.”
• China may aim to base warplanes on islands in the South China Sea, the report says. The Financial Times noted (paywall) the part of the report on how “China’s efforts are focused on building infrastructure, including aircraft hangars, on its three largest outposts in the Spratlys — the Fiery Cross, Subi and Mischief Reefs — which will give it the capacity to house ‘up to three regiments of fighters’ when complete.”
• China made a high-tech military advance with the launch of the world’s “first experimental quantum communications satellite” in 2016, Reuters notes from the report. The satellite was a “notable advance in cryptography research,” the report says, with “enormous prospects” for moving China toward more secure communications.

China dismissed the prospect of a military base in Pakistan as pure “speculation,” and accused the report of representing a “Cold War mentality,” the Wall Street Journal reports (paywall). The Journal also notes the importance of information in the report on China’s so-called “maritime militia,” a “growing civilian fleet staffed by military-trained fishermen that Beijing uses for ‘low-intensity coercion’ in defending its vast maritime claims.”

• They were detained while investigating brand Ivanka. Now China claims they stole commercial secrets. / Washington Post
  “Reports published Wednesday morning by the Communist Party-controlled press claimed the three men, Su Heng, Li Zhao and Hua Haifeng, are being investigated for selling commercial secrets to unnamed foreign organizations.”
• U.S. presses China to free activists scrutinizing Ivanka Trump shoe factory / NYT (paywall)
  “Experts warned that the detentions could make it more difficult for other Western companies.”
• Opinion: China’s influence in Australia is not ordinary soft power / Australian Financial Review
  Rory Medcalf, head of the National Security College at the Australian National University, on the recent reports of China’s covert campaign of influence in the country.
• Opinion: China is the world’s worst polluter. Don’t expect it to be a climate crusader / WSJ (paywall)
• China is in the middle of diplomatic spat with one of its oldest allies in Africa / Quartz
  “Zambian authorities have detained 31 Chinese citizens on suspicion of illegal copper mining, according to Chinese officials who have formally complained about the arrest.”

SOCIETY AND CULTURE:

Gaokao celebrates its 40th anniversary with 9.4 million test takers this year

Starting June 7, millions of Chinese high-school students will take the gaokao (高考 gāokǎo), the nationwide college entrance examination. This year, according to Xinhua (in Chinese), close to 9.4 million candidates have signed up to participate in the high-stakes examination. This year marks the 40th anniversary of the resumption of the gaokao after the end of the Cultural Revolution. For more on China’s examination from hell, see The China Project’s primer on the gaokao.

• China making plans to put people on the moon / SCMP
  Official approval and funding for China’s manned lunar mission are on the horizon, said Yang Liwei 杨利伟, deputy director general of China Manned Space Agency.
• Why China’s gays and lesbians are still stuck in the closet / SCMP
  “While Taiwan’s LGBT community has cheered a ruling in favor of same-sex marriage, their mainland counterparts are struggling just to be accepted by their loved ones and the authorities.”
• Drug mule caught in China ‘built suitcases out of 10kg of cocaine’ / SCMP
• Chinese designer Guo Pei invited to host haute couture show in Paris / Jing Daily
• Woman gets hit by car, dozens pass by without a care before she gets run over again / Shanghaiist
• Chinese mums cash in on latest and lucrative craze: selling surplus breast milk / SCMP