‘Swords drawn’ over North Korea

Business & Technology

Top China news for April 17, 2017. Get this daily digest delivered to your inbox by signing up at supchina.com/subscribe.

North Korea: Military parade and failed missile test

Tensions remain high in northeastern Asia. Xinhua News Agency says (in Chinese) that “swords are drawn and bows bent” in the Korean Peninsula, using a metaphor for a state of hostility. ABC reports that “North Korea rolled out ballistic missiles and other weaponry at a huge parade Saturday and later in the day, at 5:21 p.m. ET, made a failed attempt to shoot off a missile, which exploded immediately after launch.” CNN has an explainer with photographs of the military hardware on display at the parade.

The New York Times calls (paywall) the failure of the missile test “a deep embarrassment for the North’s leader, Kim Jong-un, because the missile appeared to have been launched to show off his daring as a fleet of American warships approached his country.” Lt. Gen. H. R. McMaster, Donald Trump’s national security adviser, told ABC that “it’s clear that the president is determined not to allow this kind of capability to threaten the United States.”

LA Times reporter Jon Kaiman was held up at Pyongyang’s airport for unknown reasons after he covered the parade of missiles in the North Korean capital; you can hear an NPR interview with him as he waited for a flight here. Here are some other relevant links:

Investigating an anti-corruption investigator

The top anti-graft watchdog Central Commission for Discipline Inspection (CCDI) has announced (in Chinese) an investigation for disciplinary violation into one of its own former senior inspectors: Zhang Huawei 张化为. Reuters comments that “the move could also be used as a way for Xi to justify retaining top graftbuster Wang Qishan in a central leadership position beyond the usual retirement age at an upcoming leadership reshuffle late this year.” In related news, the People’s Daily has issued a brief statement (in Chinese) confirming that Xiang Junbo 项俊波, the former PLA soldier and television writer, has been removed from his official role as head of the China Insurance Regulatory Commission as he faces an anti-corruption investigation that was announced last week.

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Official GDP numbers released: Fastest growth in six quarters

A spokesperson for China’s National Bureau of Statistics (NBS) announced (in Chinese) the report on the country’s economic performance in the first quarter of 2017 at a press conference on April 17. Xinhua says the report shows “better-than-expected growth,” as gross domestic product (GDP) rose 6.9 percent year on year to hit 18.07 trillion yuan ($2.63 trillion) from January to the end of March, which Reuters reports was “the fastest in six quarters, with forecast-beating March investment, retail sales and exports all suggesting the economy may carry solid momentum into spring.”

But the news has not diminished some worries about the future of China’s economy. Reuters cites concerns that “Beijing is still relying too heavily on stimulus and ‘old economy’ growth drivers, primarily the steel industry and a property market that is overheating,” while Xinhua quotes an analyst at the bank J.P. Morgan, who says, “It is fair to say the housing market …is a major uncertainty for the economic outlook this year.”

Video of China-built port and school at Gwadar in Pakistan

The People’s Daily has published a propaganda video (in Chinese) showing the construction of the Gwadar port and free trade area, one of the most prominent projects in China’s One Belt, One Road plan and a key part of the China-Pakistan Economic Corridor. The video includes footage of a school funded by China. Another piece of One Belt, One Road video propaganda is this footage shot by a drone, which Xinhua News Agency tweeted with the comment “From poverty to prosperity. China-Laos border port witnesses changes thanks to #BeltandRoad.”

 —Jeremy Goldkorn, Editor-in-Chief

This issue of the SupChina 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.



Anbang abandons deal in the U.S., but Ant Financial pushes ahead

Anbang Insurance Group, one of the highest-profile Chinese companies proposing acquisition deals in the U.S., will abandon its $1.6 billion offer for U.S. annuities and life insurer Fidelity & Guaranty Life, sources told Reuters on April 16. Though Anbang had received clearance for the deal from the Committee on Foreign Investment in the United States (CFIUS), it “could not get past some U.S. state regulators,” the sources said. This marks the second large deal that Anbang has forgone in the United States in a little over a year, after its deal to buy Starwood Hotels & Resorts Worldwide, Inc. for $14 billion fell through 13 months ago. Just last month, discussions were also called off between Anbang and the family of Jared Kushner, Donald Trump’s son-in-law, over a potential $4 billion real estate deal in New York.

Meanwhile, Ant Financial, an affiliate of ecommerce giant Alibaba, pushed ahead with a deal in the U.S. as it raised the stakes to acquire wire transfer service MoneyGram by more than a third to $1.2 billion. MoneyGram won’t officially vote on the deal for another month, and approval by CFIUS is always a challenge for Chinese firms, though analysts indicate that the new deal is promising and that Ant Financial has likely beat out its Kansas-based rival bidder, Euronet Worldwide, Inc.



Fugitive billionaire’s corruption claim of questionable significance

The New York Times has investigated (paywall) claims made by Miles Kwok — aka Guo Wengui 郭文贵, the billionaire fugitive from China currently living in the U.S. — that high-level corruption in China extends to the very top of the last Politburo Standing Committee, but was unable to confirm Guo’s claims, which were provided without evidence. See Times reporter Mike Forsythe’s description of how he looked into Guo’s accusations here on Twitter. Guo disappeared from public view in 2015 after a series of business disputes, only to emerge earlier this year in a three-hour-long interview with U.S.-based Chinese media site Mingjing. In the interview, he alleged that He Jintao 贺锦涛, the son of He Guoqiang 贺国强, who led China’s anti-corruption operations from 2007 to 2012, had abused his position of power in a business dealing with Guo, but gave no specifics.

The Chinese political observation blog Politics from the Provinces had a well-laid-out and cynical response to the accusations. It says, in part, “If He ends up under investigation, would his takedown mean anything in present Chinese politics? … Chinese officials already know that the anti-corruption campaign is real and that it’s been targeting every level of officialdom. Local officials in particular spend almost as much time looking over their shoulders for inspection teams as they do trying to make policy.” It is no secret, the blog argues, that elite politicians have used their power for personal benefit in China, and furthermore, it has already been shown that the anti-corruption drive is more than just politically motivated: “Every official is vulnerable,” including those in the He family.



Anti-gay banner at Wuhan university

On April 16, a photo of two women holding up a blatant anti-gay banner appeared on social media accounts (in Chinese) of students at Huazhong University of Science and Technology in Wuhan, in the central Chinese province of Hubei. The banner reads, “Maintain the traditional values of the Chinese nation, defend the core values of socialism, resist the corruption of decadent Western ideas, keep homosexuality far away from the university campus.” The photos have sparked an escalating backlash from China’s LGBTQ community and the general public. On the social media platform Weibo, one internet user wrote (in Chinese), “Why would someone who has received a college education say ignorant things like this?”

Toilet paper thieves strike Chengdu park

In March, reports emerged of facial recognition being tested in the public toilets of a Beijing park to deter the elderly thieves who were taking away large quantities of toilet paper. On April 16, Chengdu Evening News reported (in Chinese) that a “toilet revolution” announced by the city on April 1, which was intended to ensure that public toilets at a city park are equipped with hand sanitizer and ample toilet paper, has fallen victim to thieves, who removed 1,500 rolls of toilet paper in just seven days. Many of the comments (in Chinese) about the news on the social media platform Weibo repeat a common Chinese complaint about the low “quality” (素质 sùzhì) of the citizenry.