P2P protests, and carcinogens in blood pressure drugs

Access Archive

Announcements for Access members:

  • Access chat: Sam Crane, scholar of Chinese philosophy, religion, and politics, will join us on Wednesday, August 8, at 12 noon EST (midnight Beijing time). Sign on to the Slack channel then to learn: “Who is Shang Yang 商鞅 and why does he give us a better understanding of Chinese politics than Confucius?”

—Jeremy Goldkorn and team


Click HereDear Access member,

We’ve got five things at the top today — a mix of good and bad news. The usual links below.

—Jeremy Goldkorn, Editor-in-Chief

1. Carcinogen in blood pressure treatment products

On July 13, the American Federal Drug Administration (FDA) issued a “voluntary recall of several drug products containing the active ingredient valsartan, used to treat high blood pressure and heart failure.” You can find details of the original recall here, with an updated list of recalled batches here. In summary:

  • An impurity called N-nitrosodimethylamine (NDMA), which is classified as a probable human carcinogen, was found in the recalled products.  

  • Zhejiang Huahai Pharmaceuticals is the source of the ingredient that contained the impurity — see the company website’s English about page.

Earlier today, Chinese business and financial media Yicai reported that another drug maker from Zhejiang Province, Tianyu Pharmaceutical, has found NDMA in blood pressure treatment products destined for export: “China’s drug safety regulator found cancerogenic N-nitrosodimethylamine (NDMA) in the Zhejiang-based pharmaceutical firm’s high blood pressure treatment product valsartan, it said in a statement.”

  • Tianyu has suspended exports of the product to Taiwan. “The company confirmed that two batches of valsartan supplied to Pharmaneer contained the ingredient, adding it would not instigate a product recall [as] the batches concerned had not yet gone on the market.” Tianyu’s website is here.

  • Rundu Pharma, a Zhuhai-based company, has also admitted to the same problem, according to Agence France-Presse. Rundu’s English company profile is here.

  • The share prices of the affected companies — Huahai is listed on the Shanghai stock exchange, Tianyu and Rundu are on Shenzhen — is the focus of much of the Chinese media reporting. Here is a typical example, on Rundu.

In related news and opinion writing:

  • The “risks to international consumers posed by weak oversight in China, the world’s largest supplier of active pharmaceutical ingredients,” have been highlighted by “drug safety scandals in recent weeks” says the Financial Times (paywall).

  • China’s National Health Commission announced on Sunday that it had dispatched an investigation team to Shaanxi Province after allegations from some parents circulated online that their children were inoculated with expired vaccines, Sixth Tone reports.

Meanwhile, the Wall Street Journal, in its article “How China is evolving from a maker of copycat medicines into a producer of complex drugs” (paywall), includes a focus on a Chinese blood cancer treatment startup funded by Johnson & Johnson. The article examines a theme I often mention: the coming leap ahead of China’s healthcare sector. But first, it seems, basic quality control is still needed.

—Jeremy Goldkorn

2. Hangzhou tests system to combat on-campus sexual harassment

Hangzhou, Zhejiang Province, has issued regulations to protect minors from on-campus sexual harassment and govern law enforcement of such cases, marking China’s first establishment of a legal mechanism to crack down on sexual assault in schools, Hangzhou Daily reports (in Chinese).

The rules require schools to report cases to the local law enforcement department within 24 hours after school officials are informed. Delayed reporting and private mediation are forbidden. The rules also stipulate that victims should receive legal assistance, mental health care, and adjustments at school if necessary. Schools are also instructed to teach students about how to protect themselves from sexual harassment.

For more on this interesting development, please click through to SupChina.

—Jiayun Feng

3. P2P protests in Peking

The South China Morning Post reports:

An unknown number of Chinese investors who have lost their life savings in the country’s peer-to-peer [P2P] lending industry mounted a failed attempt at a demonstration before the banking regulator on Monday, amid heavy intervention by the police in Beijing’s financial district. Hundreds of uniformed police, ancillary police and plain clothes officers patrolled several city blocks around Finance Street.

Agence France-Presse reporter Becky Davis tweeted (with photos):

Have truly never seen anything like this in Beijing. We counted 120+ buses at site of the (failed) protest against P2P lending fraud, stretching far as the eye can see – all the way to Diaoyutai. Cops nap, wait in each. Petitioners rounded up, shipped off inside. The SCALE..!

What’s On Weibo has more on the P2P protests. In other P2P news, the SCMP says that a P2P entrepreneur “accused of ‘illegally absorbing public funds’ has been released from detention in time to find his name on the latest Forbes list of 30 Under 30 stand-out entrepreneurs in China.”

—Jeremy Goldkorn

4. Trade war, day 32: A ‘street-fighter-style drama of extortion’

Since last Friday (day 29), when China announced its $60 billion response to the reported American escalation of $200 billion in tariffs from 10 to 25 percent, there has not been much hard news on the trade front.

What has happened is another battle in the war of words between the two sides. A very quick rundown:

  • Larry Kudlow, a top economic adviser for President Trump, called China’s $60 billion tariff plan “weak” and mocked China’s “lousy” economy, saying that “investors are walking out, the currency is falling…I noticed today that Japan’s stock market is now worth more than China’s — I love that,” according to AFP.

  • Foreign Minister Wang Yi responded that the $60 billion was a “necessary and a justified response,” and asked incredulously, “Do they want China to take stronger countermeasures against them?” Meanwhile, the nationalist tabloid Global Times wrote that the $200 billion and $60 billion numbers showed that “Washington has lost its mind on trade while China retains its rationality…Considering the unreasonable US demands, a trade war is an act that aims to crush China’s economic sovereignty, trying to force China to be a US economic vassal just like Japan accepted the Plaza Accord.”

  • Trump tweeted four times (1, 2, 3, 4), leading with a statement that further brands the U.S.-China trade war as zero sum: “Tariffs are working far better than anyone ever anticipated. China market has dropped 27% in last 4 months, and they are talking to us. Our market is stronger than ever, and will go up dramatically when these horrible Trade Deals are successfully renegotiated…”

  • Chinese state media noticed this, and in an overseas editorial in the People’s Daily, wrote (in Chinese), “After attacking multiple countries with steel and aluminum tariffs, the U.S. has repeatedly escalated trade frictions with China, turning the trade war into a ‘zero-sum game’” (零和游戏 línghé yóuxì).

  • That editorial also personally attacked Trump, something that state media has generally been instructed not to do, saying he is starring in a “street-fighter-style drama of extortion” (‘街头霸王’式的翻云覆雨威逼讹诈大戏 jiētóu bàwáng shì de fānyúnfùyǔ wēibī ézhà dà xì).

  • The Chinese Foreign Ministry warned Trump back in March against turning the trade war into a zero-sum game. It’s pretty clear by now that Beijing has concluded that there’s no getting around Trump’s intent to “win” only at the expense of China.

Other trade war reporting:

  • Australia stands to lose from China’s falling currency: “The weaker the yuan, the less Chinese have to spend — and that spells trouble everywhere from Australia’s property and tourism markets to its exports of iron ore and coal,” SCMP reports.

  • But China won’t “weaponize” the yuan, argues Stephen J Len, the chief executive of hedge fund Eurizon SLJ Capital, who SCMP calls a “noted currency strategist”: “The value to China from branding the yuan as a nominal anchor rather than a source of instability seems much higher than potential short-term gains, if any, from a maxi-devaluation,” he argues.

  • The trade war continues to weigh on Chinese stocks: “Mainland Chinese stocks led losses in the region, with indexes steepening losses in the afternoon. The Shanghai Composite declined 1.26 percent to close at 2,705.84 and the smaller Shenzhen Composite lost 2.08 percent,” says CNBC.

  • Hawkishness in Washington on China’s overseas economic influence continues: “16 senators, including David Perdue of Georgia and China hawks like fellow Republicans John Cornyn of Texas and Marco Rubio of Florida,” are “pressing the Trump administration to detail what it is doing to deal with Beijing’s financing of international infrastructure projects that have left many countries indebted to China and potentially in need of bailouts,” the Wall Street Journal reports (paywall).

  • Hong Kong’s stock market is feeling a chill from the trade war, despite the territory not being directly subject to any tariffs: “We do have this dark cloud from trade and that is casting a very long shadow over everybody…And it’s not that the Hong Kong market can completely escape that,” Stefan Hofer, chief investment strategist at LGT Bank, told CNBC.

—Lucas Niewenhuis

5. A miscellany of links

A few things that caught my eye today:

  • The newly formed Ministry of Emergency Management (应急管理部 yìngjí guǎnlǐ bù) “could help to save more lives and lower costs from disasters,” according to environmental reporting website China Dialogue, which does not reprint feel-good stories from official sources.

  • Africa: The honeymoon’s not over: China-US Focus has published a piece by a writer at Chinese state-backed think tank Charhar Institute, which confirms that official policy remains extremely positive on China’s ties with Africa: Xi’s visit heralds the “Year of Africa.” Meanwhile, Eric Olander of the China Africa Project and Podcast has published An insider’s view of the China-Africa “debt trap” debate.

  • “Chinese authorities are requiring intellectuals to participate in patriotism-themed activities and training to achieve the Chinese dream of national rejuvenation,” reports the  Global Times. The campaign targets “young and middle-aged intellectuals at schools, research institutes, enterprises and public institutes.”

  • Artist Ai Weiwei 艾未未, who is living in Germany, “posted videos on Instagram showing Chinese authorities razing his former studio in Beijing,” according to China Digital Times, which has compiled reporting on the destruction of a building Ai has occupied since 2006. “The demolition began Friday without advance warning, leaving little time for the removal of artworks stored in the space.”

  • Xinjiang camps bibliography: Here is a list of articles and resources about the “reeducation camps” and massive social engineering project under way in Xinjiang, from the MCLC Resource Center.  

—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


BUSINESS AND TECHNOLOGY:

  • On-demand transport
    China’s Didi to invest $1 billion in its auto services platform / Reuters
    “Didi Chuxing, China’s largest ride-hailing service, said on Monday it will invest $1 billion in its auto services business…which includes auto leasing, car maintenance and gas station services.” Reuters also says, “Didi is preparing for a blockbuster IPO, which could happen as early as next year.”

  • Private equity slump
    China private equity funds suffer wave of closures / FT (paywall)
    “In the first six months of this year, the Asset Management Association of China (Amac) — a government-controlled industry body — ‘lost contact’ with 163 private fund institutions, more than 70 percent of the total for which contact was lost for 2017.”

  • Google’s return to China ?
    Google’s rumored return to China triggers pointed questions from Senate / CNET  
    “Is Google’s Dragonfly real, and does it mean the Silicon Valley company is cooperating with China to censor citizens’ searches?”
    Google looks to offer cloud services in China / TechNode  
    “Google is said to be in talks with companies including Tencent to offer its cloud-based products in China. Negotiations reportedly began in January 2018. However, there is some uncertainty as to whether the plans will go ahead amid trade tensions.”

  • Iron ore, steel, and coal
    China’s cleanup efforts create boom for South African miner / WSJ (paywall)
    “Profit soars for Anglo American’s Kumba unit amid rising demand for higher-grade iron ore.”
    China’s Shandong Province cuts steel and coal capacity in environment plan / Reuters
    “China’s eastern Shandong Province has unveiled new targets to cut steel and coal production capacity, eliminate outdated aluminum smelters and change to cleaner energy as part of a broader nationwide anti-pollution push.”

  • PR stunts
    Airbnb’s Great Wall of China competition upsets Chinese social media users / SCMP
    “Eight travelers will get the chance to stay overnight at the Great Wall of China next month if they win a competition, but internet users are concerned over possible damage to the 2,600-year-old landmark. Room-booking app Airbnb has temporarily converted an old watchtower at the Badaling section of the wall into a double bedroom.”

  • Consumer debt
    China millennials’ love of credit cards raises debt fears / FT (paywall)
    “Outstanding consumer loans — used for vehicle purchases, holidays, household renovations and buying expensive household goods — in China grew nearly 40 percent last year to reach Rmb6.8tn [$992 billion], according to Chinese investment bank CICC.”

  • Alibaba and Tencent
    Alibaba renews foray into Tencent turf with Taobao mini game platform / TechNode
    “Chinese e-commerce giant Alibaba has been quietly bolstering its gaming business over the past two months, renewing its efforts into a field that’s historically the domain of arch-rival Tencent. The company has added a total of 16 mini games to its online marketplace Taobao to date.”
    Chinese businesses duped by fake Alibaba staff into buying mini app services / TechNode
    “A number of Shenzhen-based businesses were tricked into paying large sums to buy mini program services by sellers representing themselves as Alibaba and Tencent staff.”
    Tencent Cloud user claims $1.6 million compensation for data loss / TechNode  
    “The reputation of Tecent’s cloud computing service Tencent Cloud has taken a serious knock on Monday. A Tencent Cloud user under the name of ‘前沿数据 (qianyan shuju, literally “cutting-edge data”)’ claims an indemnity of RMB 11,016,000 ($1.6 million) for metadata damage to files hosted by Tencent Cloud due to bugs in the firmware.”

  • Huawei
    Huawei in British spotlight over use of U.S. firm’s software / Reuters
    “Huawei Technologies is facing increased scrutiny in Britain because it is using an aging software component sold by a firm based in the United States, one of the countries where lawmakers allege its equipment could facilitate Chinese spying.”

  • Bitcoin and cryptocurrencies
    Taiwan’s crypto scene is booming, but still needs a clearer regulatory framework to thrive / TechNode  

  • Death of a social network
    The failed “Facebook of China” leaves its future in the hand of users / TechNode
    “After years of struggle, the founding team of Renren, China’s forgotten social network, has finally decided to let go of their efforts to restore the platform to its former glory, leaving the fate of the site in the hands of users and partners instead.”

  • Video games
    Will China’s latest gaming console rival Xbox and PlayStation? / Sixth Tone
    “Just as console makers like Atari and Sega hold a special place in the hearts of Western gamers, the nostalgic equivalent in China might be Xiao Bawang, meaning ‘Little Tyrant.’ The Guangdong-based company — which goes by the English name Subor — produced some of the country’s first video game consoles and gave many Chinese their first taste of gaming. On Friday, Subor announced the release of China’s first-ever high-spec video game console.”

  • Chinese pork supplies at risk?
    Pig stocks slump on China’s first African swine fever outbreak / Bloomberg (porous paywall)
    “China last week reported its first ever outbreak of African swine fever at a farm in Shenyang, spurring a cull, a ban on transportation and a quarantine for neighboring areas. The hemorrhagic disease is highly contagious and mortality rates can be as high as 100 percent, according to the World Organization for Animal Health. It’s not a threat to humans.”

POLITICS AND CURRENT AFFAIRS:

  • Military leadership: No changes
    No new generals named on Chinese military anniversary as Xi Jinping breaks with tradition / SCMP
    “Chinese President Xi Jinping broke with tradition by choosing not to name any new generals during the People’s Liberation Army anniversary this year, a move analysts say shows a preference for promoting people based only on merit and need. It was also the first time Xi did not announce any promotions during the event since he took over as head of the world’s biggest army in late 2012.”

  • Corruption — officials under investigation
    Shanghai Airport Authority boss under investigation for violating Party discipline and laws / SCMP
    “In the biggest scandal involving a Shanghai-based state-owned company boss in three years, Wu Jianrong 吴建融, chairman of Shanghai Airport Authority, has been placed under investigation for violating Party discipline and laws.” See the Chinese report by Caixin here.

  • Taiwan
    Taiwan’s President Tsai Ing-wen wants US$11 billion defense budget as Beijing threat grows / AFP via SCMP
    “Taiwanese President Tsai Ing-wen said on Monday she is seeking to increase military spending, as relations with Beijing deteriorate. Her proposal to increase the 2019 defense budget by 5.6 percent to NT$346 billion (US$11.3 billion) will go before parliament after the summer recess.”
    Taiwan to hit back at airlines that say island belongs to China / Bloomberg (porous paywall)
    “Taiwan is looking at ways to hit back at foreign airlines that recently caved in to pressure from Beijing to refer to the island as part of China.”
    Taiwan’s Quemoy Island begins importing water from mainland China amid rising cross-strait tensions / SCMP
    “Taiwan-controlled Quemoy Island has started importing water from nearby Fujian Province to ease its shortage, despite rising tensions across the strait. Also known as Kinmen, officials from the island — which is just 2 km from the mainland Chinese city of Xiamen and was a flashpoint during the cold war — signed an agreement with Fujian in 2015 to provide water for 30 years to resolve the problem.”

  • Chinese ‘influence operations’ debate — Australia
    Australia’s China reset / The Monthly
    John Garnaut is the former Beijing correspondent for Fairfax Media, and a key voice in the Australian debate over Chinese influence over Australian politics and society. In this essay, he describes how “the Australian media has become globally renowned for exposing the darker dimensions of [China]’s international reach,” despite the fact that Australia’s economy has benefited enormously from the relationship.

  • Chinese ‘influence operations’ debate — Singapore
    Worries grow in Singapore over China’s calls to help ‘Motherland’ / NYT (porous paywall)
    “[W]ith ethnic Chinese constituting nearly 75 percent of Singapore’s population of 5.6 million, some scholars and former diplomats worry that this island nation could be an especially tantalizing target for the Chinese government’s influence efforts.”

  • Poverty in Hong Kong
    Number of people sleeping in Hong Kong McDonald’s branches skyrockets, as residents battle high rents and substandard housing / SCMP
    “The number of people sleeping in McDonald’s branches in Hong Kong has increased six-fold over the past five years, partly driven by skyrocketing rents and substandard housing that makes life especially unbearable in the city’s baking weather, a study has found.”

  • GE engineer denies espionage charges
    GE engineer’s attorney: “This is not espionage” / Times Union
    Zheng Xiaoqing (rendered as 郑晓青 in this Chinese-language report) is a GE engineer who was arrested by the FBI last week and “charged with using sophisticated techniques to steal digital files on the company’s turbine technology — possibly to benefit his interest in Chinese firms.” Last week, Zheng’s attorney “said his client’s reputation had been unnecessarily ‘destroyed’ and offered a forceful defense against many of the government’s arguments.”

  • South Pacific islands
    Trouble in paradise: A Chinese occupation in Tahiti / Diplomat
    “Questions surround the Chinese consulate’s illegal occupation in French Polynesia,” against the background of China filling “the vacuum left by receding U.S. and French power projection in the region, as well as Australia and New Zealand’s long-standing neglect of key relationships.”

  • Pakistan’s new prime minister
    Imran Khan’s first test: Pakistan’s troubled economy / NYT (porous paywall)
    “Imran Khan, the former cricket player whose political party won Pakistan’s disputed election late last month, vowed to tackle the distressed economy the moment he ascends to the premiership… But the task will be made more difficult because Pakistan has sandwiched itself between two financial powers: China, from which it has borrowed heavily, and the Western-dominated International Monetary Fund, which might be its short-term savior.”

  • Belt and Road reportage
    China’s empire of money is reshaping global trade / Bloomberg
    “China is building a very 21st century empire — one where trade and debt lead the way, not armadas and boots on the ground,” argues this essay with reportage from Belt and Road hotspots Yiwu; Hambantota, Sri Lanka; Gwadar, Pakistan; Mombasa, Kenya; and Piraeus, Greece.

  • Free speech in Hong Kong
    Ex-leader CY Leung dares Foreign Correspondents’ Club to give up lease and make open bid for site as Andy Chan row escalates / SCMP
    “Former Hong Kong leader Leung Chun-ying on Monday challenged the city’s Foreign Correspondents’ Club (FCC) to give up its lease and bid for the premises in the open market, as he ramped up his attacks over its refusal to cancel a planned talk this month by a separatist party founder. ‘If the FCC believes that they are not being subsidized by [the] government, perhaps they should give up the lease.’”

SOCIETY AND CULTURE:


ON SUPCHINA

Click Here

Kuora: The fascinating appeal of Mexican food in China

Kaiser Kuo writes, “Over the years I’ve fed Mexican food — not absolutely 100 percent ‘authentic,’ but pretty close — to dozens of Chinese friends while living in Beijing. They’ve eaten enchiladas, adobo, arroz, frijoles, carnitas, machaca, various tacos, tortilla soup, and much more. And every single one of my Chinese friends has not only loved it, but heaped on seconds and eaten to nearly the point of discomfort.”

Demba Ba enraged by alleged racism during Chinese Super League match

Chinese football authorities are investigating claims of racial abuse directed at former Newcastle and Chelsea star Demba Ba in a Chinese Super League game on August 4 between Ba’s Shanghai Shenhua and Changchun Yatai FC. The accused, Changchun’s Zhang Li, replied: “I didn’t use any form of racist language. Demba Ba cursed me in Chinese, so I replied in English — just one word, a most simple one, perhaps one that exists in every soccer circle around the world.”

Team China debuts at Gay Games in Paris

On August 4, 87 Chinese participants, including Chinese residing abroad, joined a parade of athletes and supporters at the Stade Jean-Bouin in Paris to mark the opening of the 10th international Gay Games, a one-week sporting event modeled after the Olympics and dedicated to raising awareness of gay and transgender rights.

Profane roadside rant against Beijingers incites Beijing mob

On Friday, a driver in Beijing — who was not from the city — learned the perils of casting aspersions on Beijingers in the nation’s capital. It all started when Cao Yuan’ang 曹远骯 was caught on video cursing out a local biker and besmirching the good name of Beijingers. What followed was a human flesh engine search, online harassment, and a veritable old-fashioned mob.

Friday Song: A summer song for hot summer romance

“1234567” is not your typical summer banger of infectious melodies and vacant lyrics about beaches and barbecues. Rather, it’s more of a slow-burning jam built on intimate moments that are unique and specific to the season. It’s a perfect song to play on heavy rotation if you are in a summertime romance and determined to let the infatuation intensify along with the temperature.

Early-Access Sinica Podcast: Introducing the NüVoices Podcast

Today, we’re very proud to present a new podcast in the Sinica Network on SupChina. It’s called NüVoices, and it’s a show all about women in China, with a focus on women in media and the arts. It’s hosted by Alice Xin Liu, a translator originally from Beijing, who grew up in the U.K. before coming back to Beijing, and by Joanna Chiu, a Hong Kong Canadian journalist whom you’ve heard on Sinica a couple of times in the last year. Today’s show features Yuan Yang, a correspondent for the Financial Times in Beijing. We hope you like it, that it makes you think – and that you’ll subscribe (iTunes, Overcast, Stitcher, RSS feed). And keep an ear out in the coming weeks as we introduce more great podcasts about various facets of China.

  • Subscribe to early access Sinica by plugging this RSS feed directly into your podcast reader.

The Caixin-Sinica Business Brief, episode 59

This week on the Caixin-Sinica Business Brief: Hong Kong Stock Exchange revising rules to crack down on “backdoor listing,” Starbucks’s ambition to enter China’s booming food-delivery sector, Doug Young on Google’s rumored return to China and the many controversies surrounding it, and more.


PHOTO FROM MICHAEL YAMASHITA

Gathering coal in Qinghai

In this photo from 1998, workers collect coal at a mine in the Qilian Mountains in Qinghai Province. China is the world’s largest coal producer and consumer. However, since 2013, its coal consumption has declined as the government has pushed cleaner fuels such as natural gas. The shift is not easy: Last winter, there were natural gas shortages, and restrictions on coal had to be loosened.  

Jia Guo