A ‘people’s war’ — fighting words from Beijing

Access Archive

Dear Access member,

Tomorrow, May 14, at 2 p.m. EST: Access members can join our SupChina Direct conference call with Miranda Carr of Haitong Securities on “What the MSCI China Rebalancing Means for Global Markets.”

Please email jesse@supchina.com if you would like to take part.

—Jeremy Goldkorn and team


1. Fighting words: China declares a people’s trade war  

The weekend was quiet after the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent on Friday, May 10. The response from Beijing came this morning.

  • Beijing announced retaliatory measures via Xinhua (in Chinese), upping tariffs on $60 billion worth of U.S. goods. See this BBC report for details of China’s new measures.  

  • Beijing’s timing was effective, with the announcement published at 9 a.m. New York time, half an hour before the American markets opened. “The escalation sent stock markets down, with the Dow Jones Industrial Average closing more than 600 points lower,” per the BBC.

  • A propaganda campaign also began today. The CCTV 7 p.m. evening news broadcast, the main channel used by the government to send political messages to the entire population, on May 13 featured an exhortation to the Chinese people:

For the trade war initiated by the United States, China has long indicated its attitude: it is unwilling to fight, but it is not afraid to fight… After all the 5,000 years of ups and downs of the Chinese nation, what kind of battle have we not seen? In the great process of realizing national rejuvenation, there will inevitably be difficulties, obstacles and even storms. The US-sponsored trade war with China is just a hurdle in China’s development process. It is no big deal. China will surely strengthen its confidence, overcome difficulties, turn crisis into opportunity, and fight for a new world.

…As President Xí Jìnpíng 习近平 pointed out, the Chinese economy is a sea, not a small pond. A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is still there!

  • Chinese social media is all lit up: A clip of the CCTV harangue (in Chinese) is the most popular trending topic on Weibo, with 2.7 billion views as of this writing. Anecdotally, the clip has also populated many of my WeChat friend circles, even those groups that tend not to be nationalistic.

  • Even stronger language is found in an editorial (in Chinese) that was prominently featured by Xinhua News Agency and the People’s Daily today. Titled “The U.S. is constantly shouting arrogantly to puff itself up,” it concludes thusly:

The most important thing is that in the Sino-U.S. trade war, the American side fights because of greed and arrogance. If it does not brag and make up stories, the country’s morale will break. China is fighting back to protect its legitimate rights and interests.

…The trade war in the United States is the creation of one person and his administration who have swept along the entire population of the country. Whereas, the entire country and all the people of China are being threatened. For us, this is a real “people’s war.”

Those are fighting words. We have entered a new, unpredictable stage of the game.

What’s next?

Other aspects of U.S.-China rivalry — Huawei

2. Another attack on the Belt and Road in Pakistan

In the biggest attack since their failed suicide bombing of the Chinese consulate in the Pakistani city of Karachi, gunmen from the Baloch Liberation Army (BLA) “stormed a five-star hotel in the southwestern Pakistani city of Gwadar, the centerpiece of a multibillion-dollar Chinese infrastructure project,” reports Agence France-Presse.

  • Gwadar is the terminus of the China-Pakistan Economic Corridor, a centerpiece of the Belt and Road Initiative. The BLA is a separatist insurgent group in the resource-rich southwestern province of Balochistan that sees the Chinese presence there as exploitative.

3. Remembering the Chinese who helped build America’s railroads

The American Journal of Transportation reports:

U.S. Secretary of Transportation Elaine L. Chao [趙小蘭 Zhào Xiǎolán] today gave a keynote address at the 150th Anniversary of the Golden Spike Ceremony, marking the completion of the first American Transcontinental Railroad. She attended the ceremony to commemorate the contributions that railroads and railroad workers — especially Chinese laborers — have made to the economic transformation of our country brought about by the transcontinental railroad.

See also this New York Times book review (porous paywall) of Ghosts of Gold Mountain The Epic Story of the Chinese Who Built the Transcontinental Railroad, by Gordon H. Chang. Note: Gordon H. Chang is NOT the same Gordon Chang who has been predicting China’s collapse since 2001, but a respected Stanford historian.

4. WeChat and the Australian elections — local misinformation for Liberals, Party bias for Labor?

The Australian federal elections are this Saturday, May 18, with the opposition Labor Party in with a chance against the conservative Liberal Party. Last week, the Sydney Morning Herald reported that political misinformation on WeChat was rife, and that “a high volume of misleading anti-Labor material, some of which can be traced back to Liberal Party members, is garnering concern.”

  • Some of this material was anti-immigrant in nature, suggesting that a Labor win would flood Australia with refugees or Muslims.

  • The Labor Party has now written to Tencent, WeChat’s parent company, “raising concerns about ‘malicious and misleading content’ and ‘fake news,’” according to a new report by the Sydney Morning Herald.

  • On the other hand, a new report from an Australian research team suggests that “WeChat accounts aligned more closely with the Government in Beijing have a clear anti-Liberal story coming out of them,” reports the Australian Broadcasting Corporation.

  • The Australian Financial Review suggests a similar bias: “China sees a Labor win as a chance to reset its relationship with Australia but it will take more than a change of government to keep Beijing happy.”

  • Related: The Age has a story that illustrates the difficulties Chinese-Australians face in navigating local and international politics:

Chinese language documents have revealed the Labor Party’s Jennifer Yang [ 杨千惠 Yáng Qiānhuì] and the Liberal Party’s Gladys Liu [廖婵娥 Liào Chán’é] — who are contesting the eastern Melbourne electorate of Chisholm — have both attended events and been involved in groups backed by the Chinese government.

The groups seek to push the Communist Party’s agenda throughout the Chinese diaspora.

There is no suggestion that the Taiwan-born Ms Yang and Hong Kong-born Ms Liu have tried to exert influence on behalf of the Chinese.

But their involvement with CCP-aligned organizations highlights the success of the Chinese government in monopolizing local Australian Chinese community and political groups. This often leaves candidates seeking the Chinese-Australian vote no choice but to attend events and accept titles organised by Beijing’s satellite groups.

—Jeremy Goldkorn

5. Inside the thriving but murky industry of egg donation in China

Commercial egg donation is strictly prohibited in China, according to regulations issued by the country’s Ministry of Public Health, which views the procedure as an illegal form of human-assisted reproductive technology. However, a quick search on Chinese social media will reveal that the industry of egg donation is very much active in China, with plenty of aspiring parents battling with infertility issues and young women willing to sell their eggs.

To bring the dark business to the light, the Beijing Youth Daily recently published a feature story (in Chinese) exposing how the murky market operates, especially how matchmaking agencies carved a lucrative niche in connecting egg seekers and donors while employing special language to escape legal responsibilities and lying about the potential risks associated with the medical procedure.

Click through to SupChina for more details.

—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


BUSINESS AND TECHNOLOGY:

  • The business of soccer
    China’s soccer spending spree slows amid government scrutiny / Nikkei Asian Review (porous paywall)
    “Between 2014 and 2017, China raised eyebrows in the soccer world as investors in the county splurged on international stars and high-profile European clubs, with more than $2.5 billion spent on the latter alone…[but] Chinese interest in foreign clubs has flagged since 2018, stemming largely from a change in government thinking.”

  • Too much steel, too little cash
    China’s Steelmakers Set Record as Profits Slump / Radio Free Asia
    “Signs of trouble have re-emerged in China’s steel industry with surging production and plunging profits, renewing doubts about the effectiveness of government policies. In March, China’s output of crude steel jumped 10 percent from a year earlier to 80.3 million metric tons, pushing first-quarter production to a record 231 million tons.”

  • Real estate recovery thanks to policy loosening
    Jump in One Lower-Tier City’s Land Prices Hints at Sharp Real Estate Recovery / Caixin (paywall)
    “A recent day of land auctions in the capital of Anhui province saw many plots going for 80% above the initial bid price, a sharp increase compared to similar auctions in March and a hint the real estate market is recovering…This may be due to developers’ easier access to financing and a loosening of government restrictions on the sector.”

  • Who cooked the books of the cooked-book quacks? The dodgy pharma company’s dodgy accountant
    Guangdong’s Largest Auditor Probed After Client Overstates Cash Holdings by Billions / Caixin
    The accounting firm GP Certified “has been placed under investigation by the securities regulator. In December, the watchdog placed one of its clients under investigation, after the drugmaker overstated its cash holdings by $4.4 billion in its 2017 financial report.”

  • JD.com still hiring?
    JD.com Rebuts Layoff Rumors by Reporting Headcount Increase / Caixin
    “In an earnings report, JD.com said its total headcount increased by 1,000 year-on-year in the quarter. JD.com’s earlier move to dismiss 10% of its senior executives had set off reports of widespread terminations.”

  • IP protection
    China smashes counterfeiting ring that sold hard drives: Xinhua / Reuters
    “Chinese police have seized more than 210,000 hard drives produced by a counterfeit ring that sold them as brand-name items from the likes of Hewlett Packard Enterprise and IBM.”

  • Labor and consumption trends
    Chinese millennials are rejecting dull factory jobs — and transforming the economy / LA Times
    “Factory bosses, for their part, disparage Chinese millennials as a lazy, coddled generation, more interested in leisure and material goods than their factory fodder forefathers. The bosses complain it is difficult to find enough new young workers to replace the old — even as China moves from being the world’s cheap low-wage factory capital to a post-industrial economy based on high-tech industries and consumer-driven services.”

  • Investing in Chinese markets
    Foreigners Can Soon Own More China Stocks. But No One Wants Them / Bloomberg (porous paywall)
    “Foreigners are dumping mainland-listed shares at a record pace, just as MSCI Inc. prepares to expand their weighting in its benchmark indexes. Already this month, 17.4 billion yuan ($2.6 billion) of A shares have been sold through trading links with Hong Kong, putting May well on track to surpass the 18 billion yuan outflow in April.”

  • Tech ethics
    Huawei phone with child monitoring customizations spark debate / TechNode
    “Chinese telecommunication giant Huawei was broadly criticized on its home turf over the weekend following reports about a customized smartphone with applications designed to monitor students offered to parents” at a high school in Guangxi Province.

SCIENCE, HEALTH, AND THE ENVIRONMENT:

  • Sex-selective abortions
    Editorial: Smuggling of blood samples to identify gender must be halted / SCMP
    “Thanks to growing integration and travel convenience, what is banned on the mainland can be done in Hong Kong. A case in point is the cross-border smuggling of blood samples for fetal sex identification. While the use of technologies to identify a baby’s gender before birth is common in Hong Kong and elsewhere, it is outlawed on the mainland to discourage abortion.”

  • Protected species and poachers
    Trafficked baby seals released into wild in China / BBC
    “Dozens of spotted seal pups have been released into the wild, months after they were rescued by police from poachers in China. They were among 100 pups found starving inside a remote farm shed in the Chinese city of Dalian in February. Some 39 were unable to be saved…Seals are a protected species in China and anyone found catching endangered wildlife can be jailed for up to 10 years.”

POLITICS AND CURRENT AFFAIRS:

On January 1, 2018, I received a request from China and Asia: A Journal in Historical Studies, a new journal sponsored by the academic publisher Brill, a respected Dutch publishing house with some 275 journals under its aegis, which claims “over three centuries of scholarly publishing.” The request from the journal was to review Tom Cliff’s book Oil and Water — an ethnography about Han settler experiences in the Xinjiang Uyghur Autonomous Region.

  • You might be able to guess what happens next.

The Chinese government is attempting to lobby British MPs to prevent human rights activists in the UK from criticizing its Hong Kong policy, a senior activist has claimed.

Benedict Rogers, the deputy chairman of the Conservative Party Human Rights Commission, said he was warned by two MPs about Beijing’s alleged attempts after he wrote an article for the website Conservativehome.com…

According to the committees’ written evidence, in addition to the attempt to lobby him via MPs, Mr Rogers has received letters to his home, and to his mother’s in Dorset, from Hong Kong addresses which sought to intimidate and pressure him.

  • Uyghurs and Xinjiang
    Surviving China’s Uighur camps / France 24
    France 24 produces a 33-minute documentary on the Xinjiang crisis. “For more than a year, our reporters Angélique Forget and Antoine Védeilhé investigated the plight of the Uighurs and gathered exclusive testimony recounting the horror of the camps. Their investigation took them from Canada to Europe, where the families of missing Uighurs are seeking justice; via Kazakhstan and Turkey, where the last Uighurs to have fled China are hiding out; and finally to Xinjiang, where journalists are not welcome but where they were able to approach a camp. They bring us this exclusive report on the new Chinese concentration camp system.”
    A Heartfelt Appeal for a Missing Uyghur Mom on Mother’s Day / Bitter Winter
    “The staggering case of Dr. Gulshan Abbas – professional, innocent, detained – as recounted exclusively for us by her daughter. When will this martyrdom end?”
    Yufan Huang on Twitter: “New college entrance exam rules in Xinjiang: big cut back on favorable treatments for Uighur and other minority groups, and encourage mixed marriage between Han and the minority groups.”
    RF Parsley on Twitter: “‘The Monitor’s new Beijing bureau chief Ann Scott Tyson knows how to report in extreme circumstances. She spent a decade as a war correspondent. But she’s never experienced anything like China’s surveillance in its Xinjiang province.’”
    What happened to our parents? Uygur sisters seek answers / SCMP
    Humar Isaac-Wang 湖玛 on Twitter: “It’s more than one month since my parents’ release, here’s some facts & thoughts: A, My parents still won’t tell us where did they go when they disappeared from Nov 2018 to Apr 2019. Mom insisted that she was hospitalized and Dad was busy. And that’s all, no more discussion.”
    British Uighur calls on UK government to help search for missing family in Xinjiang / The Telegraph
    Aziz Isa Elkun: “It’s been two years – no news, no anything. I’m afraid to think about my mother. What’s her situation now? I try not to think too much negatively. But it’s difficult.”
    China’s persecuted Uyghurs live ‘freely’ in Turkey / CNN
    “For some, like Ishqiyar Abudureyimu, praying openly would have been unimaginable just a few years ago when he was living in China. The 27-year-old is among thousands of Uyghurs, a predominantly Muslim ethnic minority from Xinjiang province in western China, who have sought refuge in Turkey after escaping Beijing’s brutal crackdown against the group.”
    HKFP Lens: Lisa Ross dives into the heart of Uighur identity with shots from China’s Xinjiang / Hong Kong Free Press
    “Lisa Ross is a New York-based photographer, video artist and educator. Her latest body of work I Can’t Sleep: Homage to a Uyghur Homeland, features a series of group portraits of women and children on their beds, outdoors, during the day.”

  • More on the bride-trafficking gang in Pakistan
    Pakistani Christian girls trafficked to China as brides / AP
    A report on the “hundreds of poor Christian girls who have been trafficked to China in a market for brides that has swiftly grown in Pakistan since late last year, activists say. Brokers are aggressively seeking out girls for Chinese men, sometimes even cruising outside churches to ask for potential brides.”

  • Badly behaved Chinese nationals in Kenya
    Eric Olander 欧瑞克 on Twitter: “Another instance of a Chinese national in Kenya behaving badly is circulating on social media. In this case, a Chinese individual resists arrest on charges of illegally polluting the environment with video of his altercation with law enforcement prompting widespread outrage.”

  • Chinese military strategy
    China Is Learning from Russian Military Interactions with the United States / The National Interest
    Lyle Goldstein, a research professor who focuses on China at the United States Naval War College, analyses a Global Times article titled, “The US takes the unusual step of threatening Russia with two aircraft carriers. Russia’s answer: that makes you a bigger target.”

  • South China Sea
    South China Sea: Beijing announces US$23.5 million contract for coastguard ship to patrol Paracel Islands / SCMP

  • Twelve killed in Zhejiang road accident
    Elderly Chinese pilgrims killed as overloaded truck tumbles off mountain road / SCMP

SOCIETY AND CULTURE:


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Volleyball star Zhu Ting 朱婷, who has picked up MVP honors at seemingly every tournament she enters, is taking a year-long leave of absence from her Turkish club team VakifBank to return to China, as the national team prepares to defend the Olympic title it won in Rio in 2016. Also in this week’s China Sports Column: Han Xu made her much-anticipated WNBA debut for the New York Liberty — playing against Team China.

Kuora: China’s eventual transition into democracy

Is there any possibility of a smooth and peaceful transition of China into democracy without running into social chaos and economic meltdown, like that in the Arab Spring?

Friday Song: ‘Beneath the Cherry Blossom Tree’ — the first love that never blooms

Spring is slowly impressing its touch into the earth — a perfect time to listen to Hins Cheung’s “Beneath the Cherry Blossom Tree.” Released more than a decade ago, this timeless, romantic ballad about first love — found in studenthood — and coming of age remains one of the artist’s most resounding works.


SINICA PODCAST NETWORK

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  • 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.

The Caixin-Sinica Business Brief, episode 86

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