Zaijian Long Beach

Access Archive

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—Jeremy Goldkorn, Editor-in-Chief


1. The Port of Long Beach is no longer in Chinese hands

Today we highlight a story that symbolizes of how American attitudes to Chinese investment in the U.S. have changed within less than a year. The South China Morning Post reports:

A Hong Kong-based company has been forced to sell its American container port after the US government raised security concerns about its parent being a Chinese state-owned shipping giant.

Orient Overseas (International), which is majority-owned by Cosco Shipping Holdings, will sell off its entire interest in Long Beach Container Terminal in California for US$1.78 billion (HK$13.97 billion) in cash, according to a stock exchange filing on Tuesday morning.

The sale to a US infrastructure fund is the fulfilment of a national security agreement signed last year and is expected to net OOIL a profit of US$1.29 billion (HK$10.15 billion), the company said in the announcement.

Cosco purchased Orient Overseas in 2018, giving it control over the Long Beach port.

In related news, today there were several new reports (see SCMP and VOA) on the difficulties getting visas now facing American and Chinese students and scholars. Bloomberg notes (porous paywall) that China could win from the tech cold war: “By driving Chinese researchers back home, new export controls are more likely to hurt than help the U.S.”

Finally, a steady hum of positive noises about the U.S.-China trade negotiations continues to emanate from Washington and Beijing, but there is no concrete news. Today’s reports:

2. Which way to deal with Huawei?

There’s Huawei news from all over the world today:

  • Vodafone, “Europe’s biggest phone company identified hidden backdoors in the software that could have given Huawei unauthorized access to the carrier’s fixed-line network in Italy,” reports Bloomberg (porous paywall). In short, in 2011, Vodafone told Huawei to remove telnet access to routers they had bought from the Chinese company. Huawei said they had done so but Vodafone found that they had not.

  • The blocks on Canadian canola oil — that Chinese government spokespeople have tied to Canada’s arrest of Huawei CFO — have been expanded to other Canadian agricultural products including peas and soybeans, according to CBC.

  • New Zealand, “one of Canada’s closest allies has declined to back Canada in its ongoing dispute with China, despite at least one personal call to its leader by Prime Minister Justin Trudeau,” reports CBC:

Although New Zealand’s Prime Minister Jacinda Ardern is often seen as a natural partner for Trudeau’s progressive brand of politics, and her country is a member of the Five Eyes intelligence-sharing network with Canada, the Pacific nation appears reluctant to publicly criticize China over the dispute.

  • The U.K. apparently cannot decide if it wants to be a part of the EU or not. A similar indecisiveness seems to haunt London’s views of Huawei. The latest statement: “British Foreign Secretary Jeremy Hunt has urged caution over the role of China’s Huawei in the UK, saying the government should think carefully before opening its doors to the technology giant to develop next-generation 5G mobile networks,” according to the South China Morning Post.

  • Cambodian officials have announced “plans to sign an agreement with China’s Huawei Technologies as early as Sunday to help roll out a 5G data network next year,” says the Nikkei Asian Review.

  • “Czech President Milos Zeman said the West’s allegations of espionage against Chinese telecoms company Huawei are not supported by evidence,” reports the South China Morning Post. “Zeman made the remarks during his trip to Beijing for last week’s Belt and Road Forum, when he met Chinese President Xí Jìnpíng 习近平 and Huawei executives.”

—Jeremy Goldkorn

3. WeChat’s censors are not #HereForJingyao: Public accounts supporting woman accusing Richard Liu of rape are shut down

WeChat appears to be purging public accounts that have voiced support for Liu Jingyao, the University of Minnesota student who has filed a lawsuit saying she was raped last August by Richard Liu 刘强东, the chief executive officer of China’s ecommerce giant JD.com.

The abrupt clampdown happened yesterday when a number of public accounts on the all-encompassing mega app found themselves unceremoniously banned from posting. The affected accounts are blogs featuring a diverse range of topics, including gender issues, feminism, philosophy, and social affairs. Despite their different focuses, these accounts, at some point in the past few weeks, had all circulated the online petition in support of Liu Jingyao in her case against Richard Liu.

Click through to SupChina for more details.

—Jiayun Feng

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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:

One of China’s largest listed drugmakers said it overstated cash holdings by $4.4 billion, sending its shares and bonds tumbling and heightening concerns about the quality of accounting in a country that has become a fast-growing part of global investment portfolios.

Kangmei Pharmaceutical Co., a producer of traditional Chinese medicines, disclosed what it called an accounting “error” in an exchange filing on Tuesday, about four months after telling investors that it was being investigated by regulators. The stock, a constituent of MSCI Inc.’s global indexes, plunged by the 10 percent daily limit. Kangmei’s 2.4 billion yuan ($356 million) notes due 2022 fell as much as 14 yuan to 60 yuan.

The most favored Chinese pharmaceutical producer among domestic fund managers is a northeastern-based company that makes hormone products used to help children increase height. Changchun High & New Technology Industry (Group) Inc. — which makes vaccines and products used to treat growth-hormone deficiency — has seen a 77 percent rally in its share prices this year, far outperforming a 28 percent gain in a benchmark index tracking major health-care and pharmaceutical stocks listed on Shanghai and Shenzhen exchanges.

Pony Ma [马化腾 Mǎ Huàténg] is well known as the co-founder and chief executive of Chinese tech giant Tencent, which operates the ubiquitous app WeChat. The bookish Mr. Ma, whose passion outside of work is astronomy, has long been the public face of Tencent.

But the key executive in Tencent’s daily operations is as much President Martin Lau [刘炽平 Liú Chìpíng] as Mr. Ma. All of the top Tencent executives report to Mr. Lau, a former Goldman Sachs banker who joined the company in 2005, except Daniel Xu [许晨晔 Xǔ Chényè], one of Tencent’s co-founders whose current title is chief information officer, The Information has learned. Even some of Tencent’s current and former managers who spoke with The Information weren’t aware of Mr. Lau’s breadth of direct reports, due to Tencent’s policy of keeping its organizational structure confidential.

SCIENCE, HEALTH, AND THE ENVIRONMENT:

When it comes to assigning blame, many point their fingers firmly in the direction of China. China’s distant water fleet (boats fishing in areas outside of the country’s domestic waters) is the largest in the world. A 2013 study estimated that 3,400 Chinese vessels trawled the waters of nearly 100 countries.

It’s estimated that half of China’s total catch from the distant water fleet is from West Africa.

POLITICS AND CURRENT AFFAIRS:

China on Tuesday said there has been “positive progress” in consultations on the listing of Jaish-e-Mohammed (JeM) chief Masood Azhar as a global terrorist and the matter will be “properly resolved”, an apparent indication Beijing is close to lifting its hold on the sanctioning of the Pakistan-based terrorist…

…China has so far blocked four attempts to list Azhar at the 1267 Sanctions Committee – a move interpreted as a sign of its “all-weather” relationship with Pakistan. However, the latest block resulted in international criticism of China for providing an escape route to Azhar, especially after Beijing signed off on a UN Security Council statement condemning the Pulwama attack that named JeM.

Their Uighur wives vanished in 2017, swept up in a Chinese dragnet tackling Islamic extremism, now they’ve been released – but the Pakistani husbands left behind say freedom has come at a price…

…AFP interviewed nine of the women’s husbands, who confirm their wives are free but cannot leave Xinjiang for three months, during which time they will be closely monitored.

“They will observe her adaptability to Chinese society and if they deem her to be unfit she will be sent back,” a gemstone trader said of the rules of release.

Their initial joy at the release of much-loved wives and mothers has faded because the women who’ve returned are like strangers.

“My wife said she was forced to dance, wear revealing clothes, eat pork and drink alcohol in the camp,” he revealed, adding that she now carries with her a book of guidelines, which features illustrations such as a mosque marked with a red cross, and a Chinese flag with a green tick.

“She used to pray regularly but now it’s gone, and she has started occasionally drinking (alcohol) which she does in the restaurants,” he explained, adding that he believed officials required such acts from the women.

  • Another death sentence for Canadian accused of drug trafficking
    China sentences another Canadian to death for drug trafficking / Channel NewsAsia
    “A Chinese court sentenced a second Canadian man to death for drug trafficking on Tuesday April 30 amid diplomatic tensions between Ottawa and Beijing.”

  • Beijing influence in Taiwan
    China aid to Taiwan business empires like Foxconn sparks outcry / Nikkei Asian Review
    “Foxconn, the Taiwanese Apple supplier whose China-friendly founder is making a bid for the presidency, and media group Want Want are among major companies from the island receiving hundreds of millions of dollars in subsidies from Beijing, raising questions about Chinese influence in the economy.”

SOCIETY AND CULTURE:

Chinese documentarian Hao Wu’s [吴皓 Wú Hào] latest film, All in My Family, focuses on Chinese family tradition, social expectations, gay relationships and children born using surrogacy through an extremely personal lens.The 40-minute film — Wu’s fourth and set for release on streaming service Netflix this Friday — was shot over a series of Lunar New Year holidays on periodic trips back to Chengdu from New York.  


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Guo Lusheng and underground poetry during the Cultural Revolution

A forgotten generation of Chinese poets had laid the groundwork during the social turmoil of the 1960s and ’70s with their underground poetry, risking their lives in their reactionary criticism of Maoist ideologies. One such poet was Guo Lusheng 郭路生, pen name Shi Zhi 食指 (meaning “index finger”). He was a forerunner of the underground literature movement in the 1960s and hailed as the founder of the New Poetry movement. Now, he resides in a mental institution in his parents’ home in Beijing as a chain-smoking, schizophrenic recluse.


SINICA PODCAST NETWORK

Sinica Early Access: Strength in Numbers: USTR veteran Wendy Cutler on managing trade with China

This week on Sinica, Kaiser and Jeremy chat with Wendy Cutler, vice president at the Asia Society Policy Institute, about a new paper she has authored calling for coordination between the U.S. and other countries in managing issues related to China trade. She makes the case for working through the WTO and other multilateral organizations, and why China is more apt to respond more positively to multilateral over bi- or unilateral approaches.

  • Sinica Early Access is an ad-free, full-length preview of this week’s Sinica Podcast, exclusively for SupChina Access members. Listen by plugging this RSS feed directly into your podcast app.