Supervise everything！

• Hui Ka Yan (许家印 Xǔ Jiāyìn) was taken away by Chinese police earlier in September and is being monitored at a designated location, according to Bloomberg, while Reuters reported that he has become “totally inaccessible” to those trying to reach him.
• It’s not clear why Hui is under “residential surveillance,” a type of police action that falls short of official detention or arrest and does not mean Hui will be charged with a crime.

It’s the latest setback to hit the world’s most indebted property developer, and its problems are only getting worse.

• Evergrande’s once-glowing reputation began to change in 2021, as news of its financial problems spread. Its total liabilities now stand at more than $300 billion — roughly the size of Finland’s GDP — and the company has lost 99.9% of its value since peaking in October 2017.
• Today, Evergrande’s stocks closed down 19% after plummeting as much as 25% earlier this week, shortly following the company’s announcement that it would no longer be able to issue new notes. The news has roiled markets and cast further doubt over the future of its debt restructuring plan — the ticket to its survival.
• It adds to the deepening turmoil in China’s debt-laden property sector, which has threatened Beijing’s efforts to revive its slowing economy and fanned concerns that its woes may spillover into the country’s banking system.

Hui’s placement under surveillance is another signal that the Chinese government appears ready to ax its stumbling property zombie.

• Yesterday, Chinese authorities detained Evergrande’s ex-CEO and CFO, Xià Hǎijūn 夏海钧 and Pān Dàróng 潘大荣, both of whom had resigned last year over their alleged involvement in a plan to funnel $2 billion into Evergrande’s coffers from one of its subsidiaries.
• On September 16, local police in Shenzhen, home of the company’s headquarters, announced that they detained some staff at Evergrande’s wealth management unit and had launched their first criminal investigation into the company since it defaulted on its debt nearly two years ago.

Click here for all the details.

Nadya Yeh

The U.S. added three Chinese companies to its forced labor entity list for “the ongoing genocide and crimes against humanity against Uyghurs and other religious and ethnic minority groups,” the Department of Homeland Security announced yesterday. The action places Xinjiang Tianmian Foundation Textile, Xinjiang Tianshan Wool Textile, and Xinjiang Zhongtai Group on the Uyghur Forced Labor Prevention Act Entity List (UFLPA), bringing to total number of entities to 27 in the latest effort to purge any remnants of forced labor from U.S. supply chains.

China, Japan, and South Korea plan to hold a trilateral summit “in the coming months,” after a meeting between their senior officials yesterday in Seoul, according to the Chinese Foreign Ministry. It’s a signal that the three East Asian countries are renewing contact, which has been frozen since 2019 due to the COVID pandemic and other geopolitical issues, and comes after the August trilateral meeting at the U.S. presidential retreat, Camp David.

Chinese Catholics are one of the many religious groups under pressure from the Chinese Communist Party. A number of practitioners who tried to make a pilgrimage to Mongolia for Pope Francis’s first papal visit to the country earlier in September were reportedly detained by Chinese authorities.

The Chinese government has long had a contentious relationship with the Vatican: Despite an agreement in 2018 that allowed Beijing to approve all bishop appointments in China, the Communist Party has remained wary of any mass organizations over which it has no direct control. In April, Beijing unilaterally appointed a new bishop for Shanghai, the country’s biggest diocese, in an apparent violation of the pact between the two states.

A Chinese dissident stranded in a Taiwanese airport is pleading with the U.S. and Canada for asylum. Chén Sīmíng 陳思明 has been commemorating the 1989 Tiananmen Square massacre each year through street demonstrations and on social media since 2017. He told CNN that he had fled China in July, after police asked him to undergo a psychiatric evaluation following daily calls and frequent visits to his home. He crossed through China’s southern border with Laos, before traversing to Thailand and taking a flight to Taipei, where he has remained in Taoyuan International Airport since September 22.

“I hope to receive political asylum from the U.S. or Canada. I ask friends to call on the Taiwanese government to not send me back to China,” he said in a video posted to X, adding in a caption: “I am forced to be illegally stranded here.”

Beijing is probing the relationship between former Foreign Minister Qín Gāng 秦刚 and TV presenter Fù Xiǎotián 傅晓田 and a surrogate child she reportedly had in the U.S. which may be his, the Financial Times reports, citing a variety of unnamed sources. Qin disappeared from public view on June 25 and was removed from his post a month later, causing all kinds of speculation about the cause of his downfall.

Chinese telecom giant Huawei unveiled a line of new products at a high-profile event this past week. But it remained tight-lipped over the flurry of speculation that its latest smartphone contained an advanced chip breakthrough that would put its in-house design and production capabilities on par with tech giants like the U.S.’s Apple and Taiwan’s TSMC.

Japan’s Mitsubishi Motors is ending production in China amid sluggish sales, and rising competition from local brands and its struggles to produce electric cars.

Notable reads: Manoj Kewalramani, a close observer of Chinese official media and propaganda, has a new report: China’s Vision for a New World Order on the Global Development Initiative, Global Security Initiative, and Global Civilisation Initiative, pet projects of Xí Jìnpíng 习近平.

Scholar Joel Wuthnow has an essay on why Xi doesn’t trust his own military, and how corruption and other problems in the PLA might greatly reduce China’s appetite for armed conflict.

Chinese state media: The People’s Daily’s top story today is about free trade zones, bit the most significant piece is about Xi Jinping calling for a “Fengqiao Experience for the New Era.”This, per the China Media Project, “refers to a Mao-era approach to social governance that directed people to root out ‘reactionaries’ at the grassroots.”

Xinhua News Agency has a related story on a Politburo meeting about inspections of Party officials, Party governance and rooting out corruption.

Last week, state media reported on a government campaign to scrutinize Party members’ private lives, with a new slogan ordering officials to “supervise everything, even outside of eight hours [of work a day] (八小时外也要管起来 bā xiǎoshí wài yě yào guǎn qǐlái).

• China has consistently sided with Azerbaijan in this conflict and recognizes Nagorno-Karabakh as part of Azerbaijan. Baku offers reciprocal support for Beijing’s position on Taiwan.
• China sees the country as a potential gateway to the traditionally Russian-influenced South Caucasus region, and Azerbaijan’s strategic location on China’s “Middle Corridor” has attracted Chinese interest in developing transport links that bypass Russia.

But China is not a major investor in Azerbaijan, and the country has funded its major infrastructure projects largely on its own.

• The relationship between China and Azerbaijan is growing, but Baku does not fully align with Chinese interests, even on issues like human rights violations, writes Alex Coville in this week’s China Ties.

Alex Colville

• Interest in niche brands grew anywhere from 16% to 34% year-on-year in Asia, and they are perceived to be the “new luxury.”

Gen Z is leading the charge. In 2021, young luxury shoppers said they preferred niche brands over well-known ones at more than twice the rate of luxury shoppers ages 26 to 35, and at five times the rate of those over 35.

• “Unlike my parents’ generation, who cared more about appearance and the social standing which a brand provides, the product and its design come first for me,” one Gen Z consumer told The China Project.

Capucine Cogné has the whole story.

Capucine Cogné

• “One of the most troubling social policies of modern times” is how one anthropologist described China’s one-child policy, which was officially enacted on September 26, 1980. The policy was met with wildly divergent opinions, and resulted in suffering and trauma on a scale that family planners never anticipated. James Carter has This Week in China’s History.
• Understanding Beijing’s data lockdown: Mu Chen (陳沐 Chén Mù) is the chairman, founder, and co-editor of BigOne Lab, a data provider that aims ”to power investment research on Chinese companies” at a time when Beijing has made it tough for outsiders to access official data of all kinds. Jonathan Landreth asked him all about it.

Below are links from our NewsBase to other noteworthy reports published in the last 24 hours from and about China.

BUSINESS AND TECHNOLOGY:

U.S.-China tech war
U.S. investors want clarity on Biden’s vague curbs on China tech / Reuters
“U.S. financial firms are pushing for greater clarity on proposed new rules curbing U.S. investments in some China technology sectors which they say are too vague and put the onus of compliance on investors.”

Electric vehicles and the EU
China could resolve EV row with EU by ‘price undertaking’ talks, Ex-WTO chief say / Caixin (paywall)
“China could resolve its trade dispute over electric vehicles (EVs) with the European Union by raising prices through ‘price undertaking’ negotiations to avoid punitive tariffs leveled against it, former head of the World Trade Organization (WTO) Pascal Lamy told Caixin.”

Mitsubishi is shutting down its car factories in China
Mitsubishi Motors to exit from China production / Reuters
“Mitsubishi Motors has decided to end automobile production in China, and is discussing its exit with local joint venture partner Guangzhou Automobile Group, the Nikkei newspaper reported on Wednesday, without citing sources.”
Japan’s Mitsubishi Motors to end production in China / Nikkei Asia (paywall)

Ford under fire for association with Chinese battery company
U.S. lawmakers demand documents on Ford battery partnership with CATL / Reuters
“The chairs of three U.S. House of Representatives committees demanded Ford Motor turn over documents tied to its partnership with Chinese battery company CATL and threatened to call CEO Jim Farley to testify before Congress.”
Ford halts construction of U.S. EV battery plant using CATL technology / Caixin (paywall)

China’s worries about cyber attacks
From AI to to data leaks, cyber dangers threaten China’s infrastructure, state security chief warns / SCMP (paywall)
“China faces a growing risk of cyberattack, data leaks, disinformation and AI-driven cognitive warfare, the country’s state security chief has warned.”

Semiconductors
China’s economic malaise hits efforts to raise $41bn chip fund / FT (paywall)
“The most ambitious funding round launched to date by China to support its semiconductor industry is struggling in the initial phases to raise its target of 300 billion yuan ($41 billion), with the difficult economic climate being blamed, according to three people familiar with the situation.”

Oil
What ‘peak oil’ will mean for China / FT (paywall)
“Last month one of China’s most powerful oil executives caused a stir in markets with a stark prediction: that the country’s oil demand may peak this year.”

Evergrande
China Evergrande’s Chairman Hui is under police surveillance / Reuters
“Hui Ka Yan (许家印 Xǔ Jiāyìn), the chairman of China Evergrande Group, has been placed under police surveillance, Bloomberg News reported on Wednesday, citing people with knowledge of the matter.”
Evergrande chairman under police watch; liquidation risk mounts / Reuters

Hong Kong property market
Hong Kong to ease property cooling measures amid falling prices? Finance chief Paul Chan offers strongest hint yet / SCMP (paywall)
“The government gave its strongest hint yet that it could soon ease Hong Kong’s property cooling measures as Financial Secretary Paul Chan Mo-po (陳茂波 Chén Màobō) said on Wednesday the conditions that prompted authorities to impose such moves more than a decade ago no longer prevailed today.”

Huawei
Huawei unveils new products boasting self-developed chips / Caixin (paywall)
“Huawei Technologies Co. Ltd. launched a line of new products this week, including a tablet and smart TV, powered by self-developed chips, in its latest show of semiconductor self-sufficiency in the face of U.S. sanctions.”

TikTok
TikTok employees say executive moves to U.S. show China parent’s influence / WSJ (paywall)
“TikTok has spent the past three years trying to convince U.S. lawmakers it can operate independently in this country from its China-based parent company, ByteDance. After recent personnel moves, some employees aren’t so sure.”

SCIENCE, HEALTH, AND ENVIRONMENT:

Disease control
WHO’s new China rep says tighten disease surveillance, expand primary care to tackle outbreaks / Caixin (paywall)
“​​China should strengthen its health information surveillance systems and build up public health systems at the primary care level to better prepare for future disease outbreaks, the World Health Organization’s (WHO) representative to China said.”

POLITICS AND FOREIGN AFFAIRS:

Chinese military
China’s fighter jets aren’t just flying around Taiwan. They’re practicing. / WSJ (paywall)
“China has sent some of its largest swarms of jet fighters and warships into the air and waters around Taiwan this month.”

Qin Gang’s scandal continues
Chinese TV presenter linked to missing foreign minister had surrogate child in U.S. / FT (paywall)
“Beijing is examining the relationship between Fù Xiǎotián 傅晓田 and Qín Gāng 秦刚, who was abruptly dismissed in July.”

South China Sea
Why the South China Sea dispute remains one of the region’s most pressing issues / SCMP (paywall)
“A long-running dispute over the South China Sea has in recent years led to rising tensions among China and several of its neighboring countries. Competing claims of sovereignty over hundreds of islands and waters in the area have led to several confrontations and involvement of the U.S. military.”

U.S. deploys ships near China
U.S. sends drone ships to Western Pacific in first deployment near China / WSJ (paywall)
“Two prototype U.S. drone ships have arrived in Japan for their first deployment in the western Pacific, testing surveillance and attack capabilities that the Navy might find useful against China’s larger fleet.”

Myanmar
China to set up ‘restricted zone’ near Myanmar border to stop human trafficking by cybercrime gangs / SCMP (paywall)
“Authorities in southwestern China’s Yunnan province have announced they will set up a restricted zone near the Myanmar border in an attempt to prevent human trafficking by telecoms fraud gangs that target Chinese nationals.”

How is China reacting to the Canada-India divide?
China’s media mouthpieces troll West over India-Canada spat / Nikkei Asia (paywall)
“The heated diplomatic clash between India and Canada is drawing scrutiny and fueling spin elsewhere in Asia, with Chinese government mouthpieces seizing upon the issue.”

Solomon Islands
Solomon Islands joins China-backed AIIB days after PM snubs Biden invite for Pacific summit at White House / SCMP (paywall)
“Solomon Islands has joined the China-backed Asian Infrastructure Investment Bank (AIIB) days after its leader snubbed an invitation to meet U.S. President Joe Biden at a Pacific summit.”

Morocco
Chinese battery groups invest in Morocco to serve western markets / FT (paywall)
“Chinese companies are avoiding or delaying direct investments in the U.S. and Europe because of geopolitics and lengthy waits for permits, one of the world’s largest battery material producers has warned after announcing a $2 billion investment in Morocco.”

India
Opinion: An India seeking gains from U.S.-China rivalry is no guru to the world / SCMP (paywall)
Zhou Bo writes: “India is growing in importance. But how much more important will it become? In the lead-up to the Group of 20 summit in New Delhi, major newspapers, billboards and bus stops in every Indian city proclaimed India as a ‘Vishwaguru,’ or teacher to the world.”

SOCIETY AND CULTURE:

Esports
China wins first ever esports gold medal at Asian Games / Sixth Tone
“China won the first gold medal in esports ever awarded at the Asian Games, in a history-making milestone that could further stimulate passion for online gaming even as Beijing steps up efforts to combat addiction among teenagers in the world’s biggest market.”

Panda’s are returning to China
Giant panda Fan Xing leaves a Dutch zoo for her home country China / AP
“Giant panda Fan Xing began a long journey home on Wednesday — to a country she has never visited.”

Livestreaming
Chinese livestreamer uses stock footage, sparks debate on trust / Sixth Tone
“During a recent broadcast, viewers noticed livestreamer Chen Yi-ru tasting food non-stop during a 15-hour broadcast as well as an apparent glitch where a table leg seemed to “pierce” his forearm.”

Animals are shopping in China
The superstore betting on China’s animal attraction / Sixth Tone (paywall)
“As pet stores in China go, Marsmart is somewhat of an anomaly — not least because it’s often the pets that are browsing the aisles.”