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Day 1


Hi there, Access members,

It’s day one of the first great Sino-American trade war of the 21st century. There’s a lot of speculation and punditry out there, but little hard news. That will no doubt change by Monday, when we’ll bring you a comprehensive update.

Access member chat: Rui Ma and Ying-Ying Lu will join us on Slack next Wednesday, July 11, at 10:30 a.m. EST. Come join us and talk about all of the China tech topics covered in their TechBuzz China podcast, or anything else! Here is the direct link to the Slack channel.

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, and team


1. Trade war, day one

“Trump’s trade war with China is officially underway” screams today’s New York Times. The Chinese Ministry of Commerce said it will be “the biggest trade war in economic history.”

  • Global markets are stable, so far: “Wall Street shrugged off the escalation of a trade dispute between the world’s two largest economies Friday after the U.S. imposed tariffs on billions in Chinese goods and China responded in kind,” reports the Associated Press, while CNBC says “Asian stocks bounced back to recover on the last trading day of the week, with most markets finishing the session higher.” Chinese stocks, however, slid to a more than two-year low.

  • Victims: The Associated Press highlights these sectors in the U.S. as likely to suffer early: pork producers, the farm equipment industry, retailers, and soybean farmers.

  • China has lodged a WTO case against the United States over the import duties, reports the Nikkei Asian Review.

  • Effects on auto industry: “German luxury automaker BMW said on Friday that it will be unable to ‘completely absorb’ a new Chinese 25 percent tariff on imported U.S.-made models and will have to raise prices,” reports Reuters.

  • Shipping delays: “Some major Chinese ports delayed clearing goods from the United States on Friday…potentially disrupting imports worth billions of dollars as the world’s top two economies head toward an outright trade war,” also according to Reuters.

  • China has already canceled some soybean purchases, says Bloomberg (paywall). Soybeans account for “about 60 percent of the U.S.’s $20 billion of agricultural exports to China,” according to a different Bloomberg article (paywall).

—Jeremy Goldkorn

2. In a growing trend, Guangdong boosts minimum wage

Guangdong, which has the highest GDP of any Chinese province, recently increased its minimum wage for the first time in three years.  

  • Minimum wage will increase by about $30.30 per month, according to China Briefing. The change comes after Guangdong froze wages in 2015 to maintain economic competitiveness, with the exception of a Shenzhen wage increase last year.

  • Exact wages will vary by city tier, meaning that more wages will be highest in urbanized areas. Residents of uber-urban Shenzhen and Guangzhou are guaranteed $318-$333 per month, whereas those living in the region’s smallest cities can only expect about $213 per month.

  • “Figures for minimum salary do not include overtime pay, welfare, benefits or allowance for special circumstances such as working outdoors in high temperatures,” That’s Magazine reports.

  • Guangdong’s recent minimum-wage update represents a trend within China. Over the last year, minimum wages have increased by 5 percent nationwide, often through provincial regulations. Although Shanghai retains the highest minimum wage in China, Beijing, Shandong, Sichuan, and Yunnan are among the regions that recently increased hourly pay.

—Lucy Best


Here are the stories that caught our eye this week:

  • The trade war officially began, and leaked censorship orders showed that Beijing was intent on downplaying uncertainty, both in the Chinese stock market and in the Trump administration’s declarations. The Chinese yuan fluctuated, Chinese markets faltered, and Chinese authorities signaled an easing up on debt reduction for the time being, among countless other developments.

  • Annual protests in Hong Kong on July 1 marking the 21st anniversary of the city’s “handover” to mainland China this year drew a crowd of 50,000, one of the lowest turnouts since the march’s 2003 inception. This year, protestors called for an end to the new Chinese police presence in a Hong Kong train station and to Liu Xia’s house arrest, and — for the first time — an end to one-party rule in China.

  • China’s Belt and Road Initiative hit more bumps as Malaysia’s new prime minister, Mahathir Mohamad, delivered an order to suspend three China-backed projects in the country. Elsewhere, a series of developments has led to increasing suspicion abroad that the initiative hides ambitions for China’s military.

  • The chairman of HNA, Wang Jian, died on July 3 after falling off a 15-meter-tall wall in France during a business trip. The company he leaves behind is in a tough spot: more than $90 billion in debt, with a third of that debt due this year, and in the process of selling off some of its most prized assets to make ends meet.

  • The Chinese version of American comedy show Saturday Night Live made a successful debut, following up on its June 23 premiere, which amassed 100 million views on Youku with what SupChina’s Jiayun Feng called a “surprising, strong second episode” with rare women-centered skits.

  • A comedy movie about illegally importing drugs is receiving rave reviews, and is poised to become one of China’s biggest hits this summer. The tale of Dying to Survive (我不是药神 wǒ bùshì yào shén), in which a health supplements peddler smuggles unapproved drugs from India to sell to leukemia patients for more-affordable prices, reflects some real-life stories in China and has drawn comparisons with the Oscar-winning Dallas Buyers Club.

  • Joint venture schools and Sino-foreign partnership programs at universities are under scrutiny from the Ministry of Education, which has now terminated a total of 234 partnerships between Chinese and overseas institutions.


BUSINESS AND TECH:

POLITICS AND CURRENT AFFAIRS:

SOCIETY AND CULTURE:


VIDEO OF THE DAY

What is China watching? This week: Calligraphy gets abstract, soybeans get spilled, and a new train debuts in China. You can also watch each of the videos here: an artist squirting ink on a paper scroll, a soybean-carrying truck, and a bullet train.

Viral on Weibo: Is this child abuse?

This video went viral in China — apparently showing a boy being held under his mother’s stool while she plays mahjong. The Chinese internet is debating: Is this child abuse?


ON SUPCHINA

Chinese Corner: Dead men tell no tales, and the true story of the cancer drug gang

Read Jiayun Feng’s roundup of what China’s reading this week.

Sinica Podcast: China’s growing hacking power, with Kevin Collier and Priscilla Moriuchi

How is China’s cyber power evolving? BuzzFeed reporter Kevin Collier and NSA vet Priscilla Moriuchi join Kaiser and Jeremy to discuss China’s first DEF CON, Sino-American cyber relations, and more.

Comedy about illegally importing cancer drugs — movie of the year?

Dying to Survive (我不是药神) — the tale of a health supplements peddler, played by comedic actor Xu Zheng 徐峥, who smuggles unapproved drugs from India to sell to leukemia patients for more-affordable prices — is poised to become one of China’s biggest hits this summer.

Chinese ‘SNL’ delivers surprising, strong second episode

In the second episode of China’s version of Saturday Night Live, actress Zhang Yuqi 张雨绮 takes over the stage with her impeccable beauty and no-holds-barred outspokenness. She also brings in a quasi-feminist attitude that she’s been crafting on social media lately, which leads to some women-centered skits that are rarely seen on Chinese television.

Facial recognition for security checks on Guangzhou subway?

On July 6, Guangzhou Daily reported that three subway stations in Guangzhou have set up special security gates powered by facial recognition. The system is designed to help passengers get through security checks faster, the developers said. Reaction has been mixed.

Kuora: Hong Kong and mainland China are twins separated at birth

July 1 marked the 21st anniversary of Hong Kong’s return to mainland Chinese control. This week’s column, originally posted to Quora on December 13, 2014, looks at how Hong Kongers and mainland Chinese think of each other, and was written near the end of one of the most momentous events in Hong Kong’s recent history, the two-and-a-half-month-long pro-democracy Umbrella Movement.

TechBuzz China: Bitmain — the most valuable crypto company in the world?

For the crypto-curious, Pandaily’s Ying-Ying Lu and Rui Ma — along with Joyce Yang of Global Coin Research — explain Bitmain. The Beijing-based company is the largest crypto company in the world, taking in as much as $4 billion in profits last year.

China Unsolved: Dead of Night

Five bodies were in the recreation room, one woman died in the kitchen, another outside; one was found in a ditch beside his motorbike on the factory road. The youngest victim was just five days shy of his 10th birthday. All of them were killed, expertly, by knife.

Shanghai International Film Festival seeks international cooperation

The 21st Shanghai International Film Festival (SIFF) concluded on June 25, having showcased 500 films in 30 categories across 55 countries. Out of Paradise, directed by Batbayar Chogsom, won Best Feature Film, while Ala Changso, from Tibetan director Sonthar Gyal 松太加, won the Jury Grand Prix.

Taiwan ministry issues statement in simplified Chinese

Taiwan’s Ministry of Foreign Affairs recently made the decision — an intentional and pointed one, observers say — to issue a statement in simplified Chinese. The note was in response to a remark made by Beijing.

The Caixin-Sinica Business Brief, Episode 54

In this installment, Kaiser discusses the latest business news in China and sits down with Caixin reporter Tanner Brown to talk about a 19-year-old woman’s recent suicide after a teacher allegedly sexually assaulted her.


PHOTO FROM MICHAEL YAMASHITA

Fish market at Pescadores

A fish market in Magong, the largest city in the Penghu or Pescadores Islands (澎湖列岛 péng hú liè dǎo) in Taiwan. Penghu is an archipelago situated off the west coast of Taiwan, in the middle of the Taiwan Strait.  

Jia Guo

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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.