Nur Bekri goes down

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Today, in weird breaking news: “Police arrested American 3D-printed gun advocate Cody Wilson in Taipei City’s Wanhua District Friday evening, just a day after it became known he was wanted in Texas for paying a 16-year-old girl for sex,” reports Taiwan News.

1. Top Uyghur official goes down in anti-corruption campaign

Caixin reports (paywall): “China’s top energy official is being investigated on suspicion of corruption, the country’s central anti-graft watchdog announced Friday. Nur Bekri (努尔·白克力), director of the National Energy Administration and a member of China’s Uyghur ethnic minority, is suspected of ‘severe disciplinary violations,’ a term commonly used to refer to corruption, the Central Commission for Discipline Inspection (CCDI) said.”

  • Nur Bekri became chairman of the Xinjiang Uyghur Autonomous Region People’s Government, although the position is subordinate to provincial Communist Party secretary, a role yet to be held by a Uyghur in Xinjiang.

  • In 2014, Bekri was transferred to the National Energy Administration (NEA or 国家能源局 guójiā néngyuán jú), where he became director, with rank equivalent of a minister.

  • Nur Bekri is “a tall, jocular figure who speaks almost totally unaccented Mandarin and was known for being more open to foreign media than most Chinese officials,” according to Reuters / Channel NewsAsia. The report also notes that he is one of the few Uyghurs “ever to have broken through and made it to a top national-level job in Beijing.”

  • Nur Bekri’s troubles do not seem to be related to the ongoing awfulness in Xinjiang, as far as we know. The CCDI statement on his investigation is here (in Chinese).

  • Reuters has compiled a list of the corruption cases in the Chinese energy sector during the past five years. Highlights include:

    • In 2014, Chinese authorities seized cars, liquor, cash, gold, and other assets worth at least 90 billion yuan ($13.16 billion) from family members and associates of retired domestic security tsar Zhou Yongkang 周永康. Zhou was once head of China’s largest oil producer, China National Petroleum Corp (CNPC).

    • So much hoarded cash was found in the home of Wei Pengyuan 魏鹏远 — a former deputy director of NEA’s coal department — “that it took investigators using five cash-counting machines 14 hours to record the amount, with one of the devices breaking down due to the excessive workload.”

    • China has brought down 254 high-level political leaders for corruption in the past six years with 77 working in the oil and gas sector.

2. China angry over U.S. sanctions for buying Russian weapons

Yesterday, the U.S. State Department issued new sanctions on “the Chinese entity Equipment Development Department (EDD) and its director, Li Shangfu 李尚福, for engaging in significant transactions with Rosoboronexport, Russia’s main arms export entity, which is on the LSP.”

3. Purging foreign content from textbooks and TV

Chinese TV censors plan to further restrict the broadcast of foreign shows, according to the South China Morning Post: New draft rules allow TV stations to “allocate no more than 30 percent of their daily screen time to programmes produced overseas. The rules were published yesterday (in Chinese), for comment. If passed, the rules would stipulate:

  • 30 percent is the maximum amount of screen time allowed for shows produced outside of China.

  • No prime time: Foreign content cannot be broadcast from 7 p.m. to 10 p.m. All foreign content must be pre-approved.

  • Another set of draft rules issued yesterday (in Chinese) restrict the use of foreign actors and crew on TV shows. The rules require at least one of the lead actors and either the director or screenwriter to be from mainland China. Foreigners in the production crew may not exceed a fifth of all staff.

Meanwhile, the Financial Times’ Emily Feng reports (paywall): “China is mandating inspections of all textbooks used in elementary and middle schools across the country to remove foreign content, as education increasingly becomes a target of the Communist party’s ideological controls.”

The purge will also affect international schools attended by the children of many expatriate employees in major Chinese cities. On Twitter, Feng noted: “Internal reviews are now par for course at Chinese state schools, but this new notice seems to be aimed at international schools, requiring them to turn in physical copies of textbooks to be examined for deviations in standard content.”

—Jeremy Goldkorn

4. ‘It is time to take a stand on China,’ Trump says, as Beijing braces for impact — trade war, day 78

Yesterday evening, Donald Trump told Fox News:

Well, it is time to take a stand on China. We have no choice. You know it has been a long time. They have been hurting us.

And with that note, barring a weekend tweet, we have the final statement from the President of the United States before he brings the country into what the Economist called a “proper” trade war with China. On September 24, nearly half of all goods traded between the two countries will be tariffed at the border, and all signs point at this time towards a long and bloody conflict.

  • Earlier this week: we noted that last-minute negotiations, already up in the air, were shot dead by Trump’s announcement on September 17 of this next round of $200 billion in tariffs; that the Chinese Commerce Ministry quickly announced it would retaliate with tariffs on $60 billion in goods, as promised; and that the Trump administration appears dead-set on pushing supply chains out of China, with Vietnam, Thailand, India, and Mexico as potential winners from that shift.

  • Steve Bannon, who was the White House chief strategist at the start of the Trump administration, “said the aim was not just to force China to give up on its ‘unfair trade practices’ – the ultimate goal was to ‘re-industrialise America’ because manufacturing was the core of a nation’s power,” in an interview with the SCMP.

China is bracing for impact is multiple ways:

  • “A detailed document issued by the State Council, or cabinet, late on Thursday, the government is marshalling resources to support consumer spending on leisure cruises, yachts, self-driving cars, recreation vehicles and air travel,” according to Reuters.

  • The document also indicates that the government “will encourage innovation in consumer finance and broaden the development of consumer loans,” and “help individuals boost their property income, and push for more individual income tax reform measures such as increasing the number of tax-deductible items,” Reuters says.

  • The Export-Import Bank of China, the SCMP reports, will “team up with other government agencies to help companies who have been hit hard by the US trade tariffs,” according to the bank’s chairwoman Hu Xiaolian — though the size or type of any new lending program was not disclosed.

  • China also continues its efforts to convince at least some in the West that it is serious about opening its markets, regardless of the trade war. Bloomberg notes (paywall) that at the World Economic Forum in Tianjin this week, no fewer than five senior officials made a point to drive home that “they are fully committed to opening the nation’s financial sector.”

More trade war and related reporting:

  • Wang Qishan out of touch?
    Wang Qishan, China’s philosopher king / FT (paywall)
    Back in May, “a group of US business figures opposed to Mr Trump’s tariffs were taken aback by how cocky and incurious Mr Wang appeared.”
    “He was Philosopher King Wang and they were all his students in an extended lecture,” said one person briefed on the meeting. “There was a lot of ‘we know you better than you know us’ and not a single question for this group of senior US executives who are about as plugged in as it gets in Washington. He felt like he had it all figured out.”
    But meetings in the past week — where Wang “met two delegations whose members included former US cabinet officials such as Robert Rubin and prominent Wall Street financiers” — suggest “he is still struggling to get to grips with the US president.”

  • China goes easy on natural gas in tariffs
    Energy gets a reprieve in China’s latest tariffs / WSJ (paywall)
    “In its latest retaliatory measure on Tuesday, China levied tariffs on $60 billion of U.S. goods, including a 10% tariff on liquefied natural gas, or LNG. However, the move fell short of previous proposals for a 25% tariff, alleviating some of the worries over the impact to U.S. natural gas exports.”

  • China doesn’t go easy at WTO
    WTO eyes China bid to slap stiff trade sanctions on US / AFP via Channel NewsAsia
    “A World Trade Organization arbitrator will review Friday a Chinese request to impose more than US$7 billion (nearly 6 billion euros) in annual sanctions on the United States over anti-dumping practices, a Geneva trade official said.”

  • Stocks
    Trade war pessimism makes China stocks a bargain / FT (paywall)
    “‘China stocks are stuck between two opposing forces. Beijing’s deleveraging campaign and the escalating trade dispute are weighing on earnings, but share prices have fallen so far that a major earnings downgrade is already priced in,’ said Frank Benzimra, head of Asia equity strategy at Société Générale in Hong Kong. ‘Chinese equities are now a value trade.’”

  • To cold war or not to cold war
    China and America may be forging a new economic order / The Atlantic
    Abigail Grace, who was on the U.S. National Security Council until early this year, writes that “The United States and China are forging a new, uncharted gray area—not quite the economic bifurcation that characterized the U.S.-Soviet relationship at the height of the Cold War, but far from the high degree of interdependence seen in the early-21st century.”

—Lucas Niewenhuis

5. Thousands of Uyghur children effectively orphaned and indoctrinated

The Associated Press reports on a disturbing aspect of the internment camps and “re-education” campaign in Xinjiang: the government is putting children of detainees and exiles into “dozens of orphanages across Xinjiang.”

6. Eric Schmidt predicts the present

CNBC reports: “Eric Schmidt, former CEO of Google and executive chairman of Alphabet, predicts that within the next decade there will be two distinct internets: one led by the U.S. and the other by China.”  

This is a strange type of prediction: There are already two distinct internets: one led by the U.S. and the other by China.

The vast majority of globally popular websites and online services are not easily accessible in China, while a huge proportion of China’s online population hardly ever ventures beyond the walled garden of WeChat.

As China develops its own standards in different fields, it will continue to create an alternative digital world. Today, for example, the BBC asks: “China has ambitions for its rapidly expanding Beidou satellite navigation system to serve the whole world, not just Asia, but will it really be able to rival the well-established — and US-owned — GPS system?” The answer seems to be “maybe,” with caveats such as this: “It’s one thing to get it working, it’s another to keep it working consistently and create trust among users.” But there’s no question that China will get Beidou working consistently, and then Chinese mobile phones may cease using GPS technology altogether.

7. Noted in passing

  • “Islamabad has invited Saudi Arabia to become the third partner in the Beijing-funded Belt and Road corridor of major infrastructure projects inside Pakistan,” reports Reuters.

  • “The weirdest case in Chinese internet this year. Linkmotion and NetQin founder claims co-founder kidnapped and tortured him for 13 months, wore 40-lb handcuffs! Co-founder denies all…” so tweeted Rui Ma of TechBuzz China, referring to this article (in Chinese).

  • Financial analysts gone wild: “Chinese regulators finally lost their patience with the shenanigans surrounding the country’s biggest competition for research analysts,” reports Bloomberg (porous paywall). “Days after video of staff from one brokerage raucously partying with a client went viral, 30 securities firms responded to pressure from authorities to pull out of the country’s New Fortune rankings.”

  • “Deng Xiaoping watches as Young Pioneers use computers on a visit to Shanghai, February 1984,” a tweet of a photo from Julian Gerwitz (reprinted below).

  • The Hai’er Brothers: “First broadcast in the mid-’90s, the original ‘Haier Brothers’ [海尔兄弟 hǎi’ěr xiōngdì] cartoon stars two adorably animated boys who traverse the globe in search of adventure, seemingly oblivious to the fact that they’re wearing what might conservatively be described as swim trunks,” says Sixth Tone. “In the revamp, however, the two tykes don space suits as they seek extraterrestrial encounters — and this departure from convention hasn’t gone over well with netizens who remember the first show.”

  • Avoiding the asteroid apocalypse: Chinese scientists call for cooperation against asteroid threat, reports Xinhua.

—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:

  • Hong Kong flights to get pricier
    Hong Kong airfares tipped to rise as airlines regain right to add fuel surcharges to ticket prices / SCMP
    ”Hong Kong passengers can expect to pay more for airfares from November 1 following the government’s decision to allow airlines to add in fuel surcharges — but in exchange, carriers will need to be more transparent and state the final ticket cost upfront.”

  • Female coders
    Wǒ Men podcast: Gu Xi, female coding pioneer / Radii China
    Gu Xi is “a Chinese female coder and founder of Techie Cat, an online community that teaches Chinese women to code. Earlier this summer, she joined Apple’s ‘Behind Mac’ campaign as a Chinese female innovator in this global initiative.”

  • Cleaning up “black and stinking” rivers
    China to grant US$88 million each to cities to tackle water pollution / Reuters via Channel NewsAsia
    “China will provide a few cities with an additional funding of 600 million yuan (US$87.73 million) each until 2020 to help them tackle chronic ‘black and stinking’ pollution in rivers, the finance ministry said on Friday. China uses the phrase ‘black and stinking’ to describe water rendered unusable as a result of heavy pollution.”

  • Quantum physics and unhackable emails
    Chinese scientists’ ‘really’ random numbers could create unhackable emails, super secure credit cards / SCMP
    “A team of Chinese quantum physicists working in the field of random number generation have made a breakthrough that could have significant implications for digital security. According to an article published in the academic journal Nature on Thursday, the team led by Chinese scientist Pan Jianwei succeeded in using quantum mechanics to generate strings of numbers that are guaranteed to be random.”
    In 2017, CNBC reported: “China has demonstrated a world first by sending data over long distances using satellites which is potentially unhackable, laying the basis for next generation encryption based on so-called ‘quantum cryptography.’”

  • Buoyant Chinese stock markets
    Chinese stock index has best day since 2016 / FT (paywall)
    With “sentiment buoyed by a record close on Wall Street and following reports of sweeteners pledged by Beijing to soften the hit from the US-China trade dispute…the CSI 300 index of major Shanghai and Shenzhen stocks closed 3 percent higher, marking the biggest one-day gain since May 2016.”

  • Financial crime
    Investment firm founder imprisoned for life for ripping off investors / Caixin Global
    “The founder of a Shanghai-based wealth management company known for keeping a peacock in his luxury apartment has been sentenced to life in prison for his role in bilking investors out of 4.8 billion yuan ($702 million). Shanghai No. 2 Intermediate People’s Court found Xu Qin 徐勤 guilty of illegal fundraising, according to a verdict handed down late Wednesday.”

  • Ant Financial does it the Amazon way
    Meet the new Ant Financial, a technology services company / TechNode
    Amazon.com packaged its in-house web hosting technologies as AWS and began offering the service to other companies. In 2017, AWS brought in more than $17 billion dollars. Ant Financial, the payments company controlled by Alibaba, is using the same strategy, thereby, “turning traditional financial service providers from competitive rivals to cooperative clients.”

  • Solar power numbers
    Zhejiang tops in rooftop solar energy / Shanghai Daily
    “Figures from the provincial development and reform commission suggested that 7.22 million kilowatts out of the province’s combined solar power capacity of 10.6 million kw were generated by solar power systems installed on residential rooftops at the end of August.”

POLITICS AND CURRENT AFFAIRS:

  • China is large and in charge of the South China Sea
    China’s sea control is a done deal, ‘short of war with the U.S.’ / NYT (paywall)
    “A rare visit on board a United States Navy surveillance flight over the South China Sea pointed out how profoundly China has reshaped the security landscape across the region.”
    “In congressional testimony before assuming his new post as head of the United States Indo-Pacific Command in May, Adm. Philip S. Davidson sounded a stark warning about Beijing’s power play in a sea through which roughly one-third of global maritime trade flows.
    “‘In short, China is now capable of controlling the South China Sea in all scenarios short of war with the United States,’ Admiral Davidson said, an assessment that caused some consternation in the Pentagon.”
    Showing the dragon’s teeth: China’s warnings over the South China Sea / Foreign Policy Research Institute

  • In praise of Chinese investment in Africa
    The future is in Africa, and China knows it / Bloomberg (paywall)
    Noah Smith writes, “during the past decade, China has been investing a lot of money in sub-Saharan Africa… But although China can sometimes be predatory — for example, when uneconomical projects saddle African companies or governments with unpayable debt — the new African investment bears little resemblance to the colonialism of old.”

  • The undiplomatic diplomat in Stockholm   
    What Chinese tourist row in Sweden says about the future of Europe-China relations / SCMP
    Björn Jerdén and Viking Bohman of the Swedish Institute of International Affairs consider how the public hostilities between Swedish authorities and the petulant Chinese ambassador Gui Congyou 桂从友 reflect the changing relationship between Europe and China:   

China’s growing influence coincides with a China-critical turn in European perceptions and policies.

Combined, these two trends speak in favor of some turbulence. Friction is imminent when a more proactive and authoritarian China confronts exasperated European countries. China’s handling of its “Sweden problem” might tell us a great deal about what is to come in the Europe-China relations.

SOCIETY AND CULTURE:


VIDEO OF THE DAY

Viral on Weibo: A Mandarin-speaking spring

No water comes out of Hanlai Spring until someone speaks to it in Mandarin — or so the locals say. If you say lai shui a, or “bring water,” in front of the spring, water starts to come out. The more fiercely you yell, the faster the water runs.

We also published the following videos this week:


Here are the stories that caught our eye this week:

  • The Chinese ambassador to Sweden, Gui Congyou  桂从友, and Chinese state media attacked Swedish authorities over an incident that, they says, shows police brutality against Chinese tourists. Judging from video and eyewitness records, that is not true, and Swedish authorities deny any wrongdoing. Beijing seems to be taking the incident as an opportunity to play tit-for-tat about the detention of Gui Minhai 桂敏海, Swedish citizen and seller of books that Xi Jinping doesn’t like.

  • Pakistan became the first Muslim-majority country to officially raise concerns about the extreme repression of Muslims in Xinjiang. Federal Minister Pir Noorul Haq Qadri met Chinese Ambassador Yao Jing and urged China to loosen restrictions on Muslims in the region.

  • Typhoon Mangkhut tore through southern China, leaving four dead even after 3 million were evacuated.

  • The U.S. Justice Department has, in recent weeks, told Xinhua News Agency and China Global Television Network to register as foreign agents. This seems sensible: Xinhua and CGTN do sometimes commit accidental acts of journalism, but their main purpose and stated raison d’être is propaganda — acting as information agents for the Communist Party of China.

  • Xu Zhiyong, a legal rights activist, was released from prison and published an essay and video declaring, “I’m back, China.”

  • Meituan-Dianping had a successful IPO, as the food-delivery-and-everything-else company leaped ahead of Xiaomi and JD.com in market value and the wealth of its founder, Wang Xing 王兴, rose to $5.3 billion. Meituan is joined by electric-car startup NIO and news aggregator Qutoutiao in initially shaky, but then successful IPOs, as the big three Chinese tech companies have taken a beating since the start of the year.

  • Mobike inflated its user numbers by quite a bit — a factor of three, according to a Bloomberg columnist who analyzed the numbers in Meituan’s prospectus (Meituan acquired Mobike in April this year). Mobike, the world’s leading on-demand biking company, then tried to clarify, telling TechNode that “the numbers in Meituan’s prospectus describe ‘active users’ rather than ‘registered users’, which might have caused the confusion in the first place.”

  • The president and chief technology officer of iResearch, a leading Chinese statistics and consulting firm, are incommunicado in China. It’s possible that authorities are looking into recent alleged fabricating data, particularly in TV ratings. The company later confirmed that its senior executives “are assisting authorities with an investigation and therefore cannot be contacted.”

  • Five siblings were punished for neglecting their filial responsibility take care of their sick father, with each of them being jailed for up to two years after his death. As China’s population ages, it seems certain that the Chinese government will seek to place at least some of the burden of senior care on families rather than on state organizations.

  • Deng Yuwen 邓聿文, one of the most interesting Chinese thinkers writing on contemporary politics, thinks that observers — especially Chinese dissidents, liberals, and other malcontents — underestimate the resilience of both Xi Jinping and the Communist Party.

  • China accused Taiwan of recruiting students on the mainland as spies.


ON SUPCHINA

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What China’s reading recently: The epic collapse of P2P finance this summer, the intriguing history of Miss Hong Kong, the trauma of children that witness domestic violence at home and the long-term effects it can have on their mental growth, and more.

Friday song: Vava, queen of Chinese hip-hop, demands ‘look at me’ on Crazy Rich Asians soundtrack

From its first line, you know exactly what Vava’s hit song, “My New Swag” (我的新衣 wǒ de xīn yī), is all about. That’s because it’s in English — “look at me” — followed by a rapid-fire verse rapped so passionately and proudly that you don’t need to know Chinese to understand its message. This is Vava, and she demands your attention.

Sinica Podcast: Paul Haenle on North Korea, Taiwan, U.S.-China relations, and more

This week, Kaiser chats with Paul Haenle, who is the Maurice R. Greenberg Director of the Carnegie-Tsinghua Center for Global Policy, and previously served on the National Security Council as a staffer under both George W. Bush and Barack Obama. Their conversation — which runs the gamut from North Korea to Taiwan to the Belt and Road — was recorded live at Schwarzman College in Beijing on September 6.

TechBuzz China: NIO — The Road Ahead for ‘China’s Tesla’

Chinese electric-car maker NIO listed on the New York Stock Exchange on September 12. How does this company, which makes none of its own cars or even batteries (yes, you read that right), work? Ying-Ying Lu and Rui Ma take a deep dive into how NIO got started, its business model, and how it differs from the competition. With comments from Elliott Zaagman.

James McGregor reviews Kai-Fu Lee’s forthcoming book, ‘AI Superpowers’

“Western policymakers and business leaders who focus on the limits of China’s system should pay attention to Kai-Fu Lee’s non-ideological exposition of what he describes as China’s ‘highly inefficient and extraordinarily effective’ system of ‘mass entrepreneurship and mass innovation,'” writes James McGregor, reviewing Kai-Fu Lee’s forthcoming book, AI Superpowers: China, Silicon Valley, and the New World Order.

Kuora: The political life of Chinese students overseas

Political participation by Chinese students overseas is rare, but not entirely absent. Yet where there has been any kind of participation in recent years, it’s been both on the left and on the right — from anti-racism rallies and pro-immigration events to pro-Trump rallies and Asian Lives Matter marches — and it’s hard to say which has the greater draw.

The Caixin-Sinica Business Brief, episode 63

On this week’s Business Brief: What does Fan Bingbing’s disappearance say about the film industry in China? Plus, a new American Chamber of Commerce in China survey showing tariff pain, David Kirton on petrochemicals in China, and Doug Young on NIO, Meituan’s IPOs, and more.


Announcing the grand prize winner from the SupChina photo contest

Patrick Firmansyah is the grand prize winner of the SupChina Photo Contest — please see all the winning entries here, and much thanks again to everyone who entered. We’ll be publishing several other images in our Photo of the Day section, which also appears at the bottom of our daily newsletter.

Deliveryman

This photo was taken in mid-February 2018 somewhere around Changshou Road. I arrived in February in Shanghai, and one of the first things that stuck out to me was the fact that you can have everything delivered. Not only meals, but also baked goods, pharmacy items, groceries, flowers…and a vast number of drivers are required to make it happen. Plus, they have to navigate the roads as well as complex buildings with separate elevators for delivery and multiple entrances.

Patrick Firmansyah