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A skeptical smile from China’s “economic brain”



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1. A skeptical smile from China’s “economic brain”  

Trump tweeted the photo above (the unedited version, of course) with the description: “Talking trade with the Vice Premier of the People’s Republic of China, Liu He.” Liu He 刘鹤 is a close adviser to Xi Jinping and sometimes described as the “brain” behind China’s economic policy.

As the skeptical smile on Liu’s face might indicate, there has apparently been no substantial progress made. Here is a roundup of relevant news and smoke signals:

  • Sorghum probe canceled: Reuters reports that “China dropped its anti-dumping probe into imports of U.S. sorghum on Friday, beating a hasty retreat from a dispute that wreaked chaos across the global grain market and raised concerns about rising costs and financial damage at home.” The article calls the move “a goodwill concession.” More than 90 percent of the imported sorghum in China comes from the U.S. Last year the trade was around a billion dollars.

  • $200 billion “rumor” denied: “China earlier denied assertions from U.S. officials on Thursday night that Beijing had offered a package of concessions and goods purchases aimed at reducing the U.S. trade deficit with China by as much as $200 billion,” according to Reuters.

  • Even if the $200 billion offer was real, and China “stopped buying other foreign products, like Airbus airplanes from the European Union or soybeans from Brazil, and purchased solely American products, it would add up to only a small fraction of the $200 billion total they are promising to purchase,” according to the New York Times (paywall).  Chad Bown, a senior fellow at the Peterson Institute for International Economics, told the Times that it “would even be a stretch to get it to $50 billion.”

  • China can’t cut its trade gap by $200 billion, says Bloomberg opinion columnist David Fickling: “There’s no way to make the math add up here.”

  • Trump set expectations low for trade talks: The Associated Press reports remarks the U.S. president made yesterday: “Will that be successful? I tend to doubt it. The reason I doubt it is because China has become very spoiled. The European Union has become very spoiled.”

  • American stock markets did not like Trump’s comments: “The Dow lost 54 points, while the S&P 500 and Nasdaq declined 0.1 percent and 0.2 percent, respectively,” according to CNBC.

  • On the other hand, the “Qualcomm/NXP deal is looking more optimistic now,” according to a Beijing official quoted by the Wall Street Journal (paywall). The deal for the American mobile tech titan Qualcomm to buy Dutch chipmaker NXP Semiconductors has been approved by eight of the nine required global regulators, with only the Chinese Ministry of Commerce stalling the takeover. Shares of both companies ticked up after the Wall Street Journal report was published, according to Reuters.

  • Trump trade adviser Peter “Death by China” Navarro had a shouting match with one of his more moderate colleagues during trade negotiations in Beijing, we noted yesterday.

—Jeremy Goldkorn and Lucas Niewenhuis

2. ‘Relationship expert’ says Chinese comfort women prove gender superiority

Yang Bingyang 杨冰阳, or Ayawawa, is a Chinese “relationship expert” with a lucrative business built by preaching her questionable yet popular dating theories to about three million fans. Guyu Lab, an online media outlet operated by Tencent, published an article (in Chinese) that was widely circulated today, profiling the self-acclaimed “goddess of dating” and her loyal followers.

One quote from Yang in the article has drawn fire on the Chinese internet: In one of her classes, she attempted to explain why women are born with more “gender advantages” than men. She said that that Chinese “comfort women” who were forced to provide sex services to the Imperial Japanese Army during World War II were probably not unhappy, and that while many men died in the war, these women survived.

For more on Ayawawa and the viral article, please click through to SupChina.

—Jiayun Feng

3. Cleaning up dirty trucks carrying coal

“The Ministry of Ecology and Environment has been considering a rule that coal must be transported on the country’s mostly electrified rail network by the end of September, banning the use of diesel-fueled trucks to make shipments,” according to Caixin (paywall).

This make a lot of sense to me: I spent many weekends driving around northern China in the last decade, and I’ve probably shortened my life by a few years by breathing exhaust from the filthy, badly maintained trucks hauling coal.

—Jeremy Goldkorn

4. Good news for spicy hotpot lovers

Haidilao 海底捞 is one of China’s most popular Sichuan hotpot restaurant chains, famous for excellent service as well as good food. The South China Morning Post says that “brokers expect the company, founded by former welder and tractor factory worker Zhang Yong 张勇 to seek to raise between US$600 million and US$700 million” in an initial public offering (IPO) in Hong Kong.

Haidilao currently has 296 restaurants in Mainland China, and 24 outlets in Taiwan, Hong Kong, Singapore, Tokyo, Seoul and Los Angeles. The SCMP says the the IPO’s proceeds “are likely to be used to fund another 180 to 220 new restaurants this year, including more in the US.”  

A message to Zhang Yong: 纳什维尔 nà shí wéi ěr needs you!

—Jeremy Goldkorn

—–

Our whole team really appreciates your support as Access members. Please chat with us on our Slack channel or contact me anytime at jeremy@supchina.com.

—Jeremy Goldkorn, Editor-in-Chief



Here are the stories that caught our eye this week:

  • A system of “re-education” camps for Muslims in Xinjiang Province was revealed in greater detail than ever before. There may be hundreds of thousands of people being detained and brainwashed, based on eyewitness reports and analyses of the size of the detention centers.

  • The Chinese stock market could soon welcome $40 billion in new inflows, following the inclusion of 234 Chinese shares in the MSCI Emerging Markets Index that was announced to begin on June 1, 2018. However, the stocks will only be folded in at a partial inclusion factor of 2.5 percent, with plans for 5 percent inclusion by September 3.

  • The LGBT community was shown some love at high schools and colleges across China, as students celebrated International Day Against Homophobia, Transphobia, and Biphobia (IDAHOT). A high school in Beijing promoted LGBT awareness with a T-shirt campaign, and LGBT events sprung up at multiple campuses across the country. However, also this week, two women at an LGBT event in Beijing’s 798 Art District were beaten up by security guards.

  • Donald Trump’s company was set to profit from $500 million in Chinese government loans that had reportedly been secured by Indonesian billionaire Hary Tanoesoedibjo for a real estate development and theme park that had licensed Trump’s name. Tanoesoedibjo soon denied that the loans had been signed, despite earlier telling local media that they were guaranteed.


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‘Avengers: Infinity War’ scored a record-breaking opening weekend in China. The superhero film raked in $200 million (1.26 billion yuan) in the world’s second-largest market, far surpassing the opening performances of other Marvel movies. It is also currently the highest-rated Marvel film on Douban, with a score of 8.5.

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How much has China’s foreign policy changed since the Deng Xiaoping days of “concealing strengths, biding time” (韬光养晦 tāoguāng yǎnghuì), and how much of that change is due to Xi Jinping? The ever-popular topic is discussed in this Sinica Podcast episode with Jiang Changjian, Ira Kasoff, and Anthony Saich.

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PHOTO FROM MICHAEL YAMASHITA

Heating up the kitchen

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Jeremy Goldkorn

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of SupChina, and co-founder of the Sinica Podcast.