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Dead pigs floating to Taiwan

1. Dead pigs are washing up on Taiwan’s shores

“A pig carcass infected with African Swine Fever has washed up on the shores of Taiwan’s Kinmen Island, just 5km off of China’s coast,” tweeted Taiwan-based journalist Chris Horton, based on an Apple Daily front-page story (click on the link for an image). Horton notes that “Taiwan has repeatedly asked China to share information about its nationwide outbreak of the disease and has been met with silence.”

  • “The dead pig was clearly brought by the tide as there are no pig farms on the Kinmen-administered islet,” says Focus Taiwan. The article cites an official who says that “200 to 300 tons of garbage float from the mainland to Kinmen each year.”

  • “Taiwan has been on high alert” since the first confirmed case of African swine fever (ASF) infection was reported in China’s Liaoning Province in August, “worried that an outbreak of the extremely deadly virus could devastate the country’s NT$80 billion ($2.58 billion) pig farming industry.”

  • “The discovery of the dead pig in Kinmen proves that China’s disease control and infection reporting are problematic, and more infected pigs might float to Matsu or other nations,” said Taiwanese Premier William Lai (賴清德 Lài Qīngdé), according to the Taipei Times. Lai called on China to “honestly publicize its infection situation and work with other nations to curb the disease’s spread, a responsibility that it should shoulder, instead of worrying about ‘losing face.’”

  • President Tsai Ing-wen (蔡英文 Cài Yīngwén) previously complained about China’s lack of transparency in her New Year’s Day speech:

During our recent efforts to prevent an African swine fever epidemic, China’s government has never followed the relevant agreements and provided Taiwan with accurate, real-time reports about the epidemic situation… If we can’t even have sincere cooperation on epidemic prevention and treatment, how can we talk about both sides of the Taiwan Strait being one family?  

On the other side of the Taiwan Strait, the Chinese government is also asking for transparency — from its pig farmers. Reuters reports:

China’s animal husbandry and veterinary affairs bureau is stepping up investigation and punishment of illegal activity in the pig industry, said a statement published on the Ministry of Agriculture and Rural Affairs website on Friday, January 4.

Failing to report deaths and privately slaughtering and selling sick or dead pigs would be pursued under criminal law, it said, and compensation of 1,200 yuan ($175) for each pig culled was sufficient incentive for farmers to report the disease.

Other hog news:

  • Shares in DaBomb Protein Corp — the best company name I have seen in a while — “which makes advanced soybean meal animal feed, surged this week as the threat of  African swine fever boosted sales,” reports the Taipei Times. Wholly plant-based protein feed is “a vital method to maintain biological security” in the face of an epizootic.

  • “China reported an outbreak of deadly African swine fever on a huge pig farm part-owned by a Danish investment fund, showing the spread of the virus to modern industrial farms expected to have the best levels of disease prevention,” according to Reuters.

—Jeremy Goldkorn

2. Trade war, day 183: Talks scheduled in Beijing for January 7-8

A little over a month since Donald Trump and Xi Jinping met face-to-face at the G20 in Argentina on December 1, resulting in a vague 90-day tariff ceasefire, American and Chinese officials will meet in Beijing for talks next week. The January 7-8 negotiations will end with about 50 days to go in that 90-day period, which officially ends on March 2.

  • The Chinese Commerce Ministry confirmed the talks, the SCMP reports, and framed them as “proactive and constructive.”

  • Deputy U.S. Trade Representative Jeffrey Gerrish will lead the U.S. side, the ministry said, though this has not been confirmed by the USTR, and the Chinese lead negotiator has also not been identified.

  • Recent talks have been “a little more optimistic than usual,” Larry Kudlow, economic advisor to Trump, told Bloomberg (porous paywall).

  • The talks “will address issues including intellectual property, agriculture and industrial purchases,” sources also told Bloomberg.

The talks will occur in the midst of a season of disappointing news for the Chinese economy, as described in the previous Access newsletter. The U.S. stock market also took a beating with Apple’s announcement yesterday that it was downgrading its revenue outlook for the first quarter of 2019, largely due to slowing sales in China.

But today at least, Chinese stocks “bounced,” the Financial Times reported (paywall), as “The CSI 300, a benchmark index for Chinese equities, closed 2.4 per cent higher.” That’s because the People’s Bank of China announced it would cut the reserve ratio requirement for banks by one percentage point, in a move that “will essentially free up 1.5 trillion Chinese renminbi, or about $218 billion, for [the] economy,” according to the New York Times (porous paywall).

Other links related to the Chinese economy, U.S.-China relations, and the Canadian detainees:

  • Chinese investors still confident in leading companies
    China’s tech titans dodge falling Apple / FT (paywall)
    “While stocks caught up in Apple’s orbit suffered damage, there were only small moves in companies most exposed to the Chinese consumer, such as Tencent, the gaming company, and Alibaba, the ecommerce platform…in recent weeks some investors have grown more bullish, convinced that demand is more durable than prices would suggest.”

  • Data on the economic downturn
    Josh Chin on Twitter: “Here’s why this downturn in China is not like the others. Retail sales growth lowest in 15 years, consumption tax (applied to luxury goods) in free fall. In other words, Chinese consumers are hurting. More on this from @GraceWSJ and @QiLiyan here: [Apple Warning: Seven Charts That Show the Pressure on China’s Consumers – WSJ]”

  • Services still doing fine?
    China’s service activities expanded in December despite broader economic slowdown / SCMP
    “Growth in the Chinese service sector accelerated to a six-month high in December, according to a private gauge released on Friday, demonstrating some resilience in the world’s second largest economy. The service sector purchasing managers’ index (PMI), compiled by Markit and published by Chinese financial news outlet Caixin, rose to 53.9 in December.”

  • Tech cold war
    Bipartisan bill unveiled in US Senate to stop China tech threats / Reuters
    “Senators Mark Warner, a Democrat and a vice chairman on the Senate Select Committee on Intelligence, and Marco Rubio, a Republican on the panel, introduced…[a bill that] aims to create the Office of Critical Technologies and Security to coordinate an inter-agency strategy to fight high-tech threats to national security posed by China and other foreign actors.”

  • Apple
    Apple iPhone Loses Ground to China’s Homegrown Rivals / WSJ (paywall)
    “Once a top-seller in China, Apple has slipped to the fifth-biggest phone seller in that country, trailing four domestic producers that have all been growing in popularity. Despite developing more features targeted at Chinese consumers, Apple’s market share has stagnated.”

  • Detained Canadians
    13 Canadians detained in China since arrest of Huawei executive in Vancouver, officials reveal / The Star (porous paywall)
    “Three of those thirteen Canadians — ex-diplomat Michael Kovrig, entrepreneur Michael Spavor and teacher Sarah McIver — were previously known to the public.
    Eight of those people, including McIver, have been returned to Canada since their arrests, said Global Affairs spokesperson Guillaume Bérubé in a statement. Of the eight Canadians that have been returned, only McIver was named.”
    Emily Rauhala on Twitter: “Not sure why people are running with ‘13 Canadians detained’ headlines. Numbers appear consistent with normal arrest rates. Hope I’m not wrong, but when China holds foreign nationals on spy charges amid massive political disputes, we hear about it, right?”
    Opinion: China thinks it can arbitrarily detain anyone. It is time for change / The Guardian
    By Michael Caster, co-founder of the human rights organisation Safeguard Defenders.
    Ankit Panda on Twitter: “I’ve decided not to go ahead with a planned trip to China later this month. Michael Kovrig (a @CrisisGroup scholar and friend) and Michael Spavor remain unjustly detained. Neither have been charged with any crime and the circumstances of their detention remain unexplained.”

  • Tesla
    Tesla to start delivering Model 3 to China buyers in March / Reuters

  • Huawei
    Huawei staff demoted over tweet sent from iPhone / Taipei Times

—Lucas Niewenhuis

3. The reverse population bomb

Quartz reports that China’s looming population crisis is very likely more urgent than people thought, according to a report (in Chinese) released by the Chinese Academy of Social Sciences (CASS) on January 3.

In the paper, named “Green Book of Population and Labour,” demographers warn that if China’s total fertility rate (TFR) — the number of children a woman is likely to have in her lifetime — holds steady at the current level of 1.6, the country will enter an era of negative population growth as soon as 2027, three years sooner than a United Nations estimate.

The CASS paper warns that China’s fast-growing aging population and falling birth rates pose a significant threat to its economy. Since 2013, China’s working-age population, defined as those under the age of 64, has been decreasing continuously. The report raises alarm that a shrinking workforce will have disastrous impacts on China’s economic growth.

Some demographers are even more pessimistic. While official population figures for 2018 haven’t been released yet, Yì Fùxián 易富贤, a long-standing critic of China’s family planning policy, said (in Chinese) that based on his calculations, China’s birth rate in 2018 was around 1.05, which is far from what the government predicted four years ago. By his estimate, there were 10.31 million births and 11.58 million deaths in China last year. If his numbers are right, negative population growth starts in 2018.

—Jiayun Feng

—–

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:

  • China’s Chang’e 4 Moon probe successfully touched down on January 3 on the far side of the Moon, popularly but inaccurately called the “dark side of the Moon.”

  • Taiwanese President Tsai Ing-wen (蔡英文 Cài Yīngwén) gave a speech (English, Chinese) on New Year’s Day, outlining “four musts” (四個必須 sìgè bìxū) for a “healthy and normal” relationship between Beijing and Taipei. About 24 hours later, General Secretary Xí Jìnpíng 习近平 gave a speech to mark the “40th Anniversary of the Chinese Mainland’s Message to Compatriots in Taiwan” (Xinhua report, full text of speech in Chinese). The vision of Taiwan’s future he set out was irreconcilable with Tsai’s.

  • Apple CEO Tim Cook wrote a letter (full text; CNBC report and interview with Cook) to investors on January 2 that reported slowing sales particularly in China. A top White House economic adviser framed the news as a plus for Trump’s leverage against China in the trade war. Meanwhile, two articles on Robert Lighthizer indicate that the U.S. Trade Representative leading negotiations is enjoying immense influence in the Trump administration at the moment.

  • Hong Kong-based food critic Chua Lam (蔡澜 Cài Lán) has stirred up a ruckus on the Chinese internet after criticizing Chinese hotpot, saying that it’s “a cooking method totally lacking cultural significance.”


BUSINESS AND TECHNOLOGY:

  • Bionic eyes in Taiwan
    Bionic eye implants help man see son for the first time / Taipei Times
    “Doctors in July last year surgically implanted bionic eyes in a 30-year-old man, helping him fulfill his dream of being able to see his son.”

  • Chinese homegrown chips
    Chinese voice recognition startup AISpeech releases its first custom chip / TechNode
    “Chinese artificial intelligence (AI) unicorn AISpeech announced at a press conference today its first AI voice chip Taihang after more than a year of research and development.”

  • Luxury gray rhino ?
    Chinese government delays Shandong Ruyi’s acquisition spree / Jing Daily
    “The Chinese government appears to have hit the brakes on the overseas shopping spree of Shandong Ruyi. The Chinese conglomerate has recently demonstrated its ambition to become something of China’s LVMH Group, following its high-profile acquisitions of luxury fashion brands including Bally and SMCP (which owns Maje, Sandro, and Claudie Pierlot).”

  • New internet censorship campaign
    Baidu, Sohu get caught in latest Chinese internet clampdown / Bloomberg (porous paywall)
    “China’s cyberspace police have ordered Baidu Inc. and Sohu.com Ltd. to suspend a plethora of news services for a week, kicking off an online clean-up campaign with two of the country’s biggest internet corporations.”

POLITICS AND CURRENT AFFAIRS:

SOCIETY AND CULTURE:


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PHOTO OF THE DAY

Snack time

Yunnan locals snack on peanuts and dried melon seeds while drinking the popular herbal tea Jiaduobao to celebrate the Lantern Festival, the fifth day of the first month in the lunar calendar, which falls on March 2 in 2019. Photo by Matthew Chitwood. His Instagram account is @theotherchina.

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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.