Tsai gives Beijing the middle finger in New York

Access Archive

Dear Access member,

Two big, free things for you today.

First, our latest quarterly Red Paper is out, and it is available to all Access members for free at this link. It summarizes the last three months of China news in 20 easy-to-read pages. Access members can also freely view all of our previous Red Papers: Q1 2019, 2018–2019, and 2017–2018

Second, you’re invited to join our next SupChina direct conference call on Tuesday, July 23, at 2 p.m. EST. It will be a no-holds-barred conversation with our own TechBuzz China podcaster, Rui Ma, in which I will try to get her to air the dirty laundry of the entire Chinese tech scene. Please register to attend at SupChina Direct

Also free: Today, we published China’s #MeToo movement, explained, which includes a summary of the most prominent attempts, successful and failed, to hold men in China to account for sexual harassment. As a companion piece, we also did a Q&A with Lü Pin 吕频, a leading feminist activist.

—Jeremy Goldkorn, Editor-in-Chief


1. Tsai gives Beijing the middle finger in New York

On Monday, July 8, the U.S. approved a $2.2 billion sale of arms and military equipment to Taiwan, the fourth since Trump became president. Beijing was not amused. It will be equally unamused by this: Taiwanese President Tsai Ing-wen (蔡英文 Cài Yīngwén) gave a speech in New York. From the South China Morning Post:

Taiwan will not bend to pressure from Beijing to give up its ambition of joining the United Nations, the island’s President Tsai Ing-wen told a group of UN permanent representatives at an unprecedented high-profile reception at its de facto embassy in New York on Thursday.

The event, at the Taipei Economic and Cultural Representative Office, was attended by 17 officials, most of them envoys from nations with which Taiwan still has diplomatic ties, including Paraguay, Belize, Nauru, and Saint Vincent and the Grenadines.

It was also the first of its kind to be open to the media, as Taiwan’s leaders have been prohibited from making public appearances during transit stops in the US since Washington switched its diplomatic allegiance to Beijing from Taipei in 1979.

“Taiwan will never succumb to any threats [from Beijing], now or in the future,” the presidential office quoted Tsai as saying. “Any obstacles will only strengthen Taiwan’s resolution to join the international community.”

FURTHER READING

  • The New York Times report on the same event is titled Taiwan president risks infuriating China with U.S. visit (porous paywall). 

  • China’s Foreign Ministry today pledged “to impose sanctions on American firms to counter the recent U.S. approval to sell weapons to Taiwan,” according to the South China Morning Post. Here is the Xinhua report.

  • The Taiwanese Ministry of Foreign Affairs has a Twitter account with attitude, especially noticeable in tweets signed “JW,” which are written by the head of the Ministry, Joseph Wu (吳釗燮 Wú Zhāoxiè). Sample tweet: “Commie elites school their children in Western democracies. But Uyghurs get ‘centralized care’ in Xinjiang. What kind of government preys on its young people? Close the camps! Send the children home!”

2. ‘Hostage diplomacy’ and the techno-trade war 

From the New York Times (porous paywall):

A Koch Industries executive was told he could not leave China. An ex-diplomat who helped organize a technology forum in Beijing was hassled by authorities who wanted to question him. An industry group developed contingency plans, in case its offices were raided and computer servers were seized.

Business executives, Washington officials and other frequent visitors to China who were interviewed by The New York Times expressed increasing alarm about the Chinese authorities’ harassment of Americans by holding them for questioning and preventing them from leaving the country…

“In a very not-so-subtle manner, the Chinese government has upped the ante by detaining Americans at the borders and at their hotels, and with the obvious intent to send a message to the Trump administration that they can engage in hostage diplomacy if push comes to shove,” said James Zimmerman, a partner in the Beijing office of the law firm Perkins Coie, which works with American companies in China.

News from other fronts of the techno-trade war: 

  • “China’s exports fell in June as the United States ramped up trade pressure, while imports shrank more than expected, pointing to further weakness in the world’s second-largest economy and slackening global growth,” according to Reuters

  • Nonetheless, it’s “almost like China is trolling Trump,” tweeted the Economist’s Shanghai correspondent Simon Rabinovitch: “Data just out shows that its trade surplus with the U.S. hit another record high in June: $331 billion (on a 12-month rolling basis). That’s 30 percent higher than when Trump took office and 12 percent higher than at the start of the trade war.”

  • China is also ignoring Trump’s demand to purchase more American farm goods: Despite his demand that China buy more American agricultural products, “new numbers released on Friday show that Beijing is not seeking to address the issue,” reports the South China Morning Post.

  • Espionage: A former State Department employee, Candace Marie Claiborne, has been sentenced to “40 months in prison, three years of supervised release and a fine of $40,000 for conspiracy to defraud the United States, by lying to law enforcement and background investigators, and hiding her extensive contacts with, and gifts from, agents of the People’s Republic of China, in exchange for providing them with internal documents from the U.S. State Department,” according to the U.S. Department of Justice

  • Iran: Some U.S. officials are pushing for sanctions on China over oil purchases from that country, reports Politico. “Such a move would complicate trade talks between the two countries and further strain the relationship.”

  • Israel: “The U.S. is worried about China’s investments” there, according to the Atlantic: “The U.S. has long warned about encroaching Chinese influence around the world. And it’s touching America’s closest allies.”

  • “A scheduled speech at a Washington think tank by the former United States consul general to Hong Kong has been postponed on the orders of the U.S. State Department,” apparently because of “fear of derailing the trade talks,” reports the South China Morning Post

  • “China may remain the ‘primary threat’ to the U.S. military for as long as a century after learning how to fight more effectively by watching American wars in the Middle East.” So says General Mark Milley, Trump’s nominee to lead the Joint Chiefs of Staff, according to Bloomberg (porous paywall).

  • American firms like Apple and Intel continue to “cozy up” to China despite the deteriorating relationship between the two countries, says Bloomberg (porous paywall). 

3. Is China going to change course on Xinjiang?

In a story titled China hints at Xinjiang policy shift ahead of key summit chaired by Xí Jìnpíng 习近平, the South China Morning Post reports: 

China’s state-run news agency Xinhua published a review on June 27 [in Chinese] of the past five years in a move described as “preparing the ground” for the next Central Xinjiang Work Conference, which sets policy direction for the region.

Describing Xinjiang as “the main battleground in China’s anti-terror war”, Xinhua hailed current policy as “an interim success,” a term which has been common among the region’s Xinjiang officials of late. The Xinhua report said the fight against terrorism and extremism had been effective, with no terror attacks in the region for the past 30 months.

A senior lecturer from the Central Party School, which trains senior party cadres, told the South China Morning Post the term “major interim success,” usually meant the “top leadership believes the policy has achieved its desired goal, and it is time to revisit the issue and fine-tune the policy if necessary.”

“Fine-tuning” does not sound like any kind of major change is in store. Meanwhile, the repression of Uyghurs in Xinjiang and abroad continues:

  • “Uyghurs living in the U.S. and Europe [say] that Chinese authorities are going after family members still living in China to suppress activism by the Uighur community living abroad,” reports Deutsche Welle.

  • “The mass incarceration of Uyghurs and other Muslim minorities in northwest China’s Xinjiang Uyghur Autonomous Region ‘has nothing to do with terrorism,’ and is part of a war Beijing is waging on religion,” according to Nathan Sales, the U.S. State Department’s Coordinator for Counter-terrorism. 

  • The wife and four children of Ablimit Tursun, a Uyghur man living in Belgium, applied for Belgian visas but were removed from the Belgian embassy by Chinese police, apparently with the embassy’s permission. A group called Uyghurs Action has produced a 10-minute documentary about the family, which you can watch on YouTube.

4. Xi schmoozes Vietnamese leader despite coast guard clash

From today’s top story on Chinese state media websites (English, Chinese):

Chinese President Xí Jìnpíng 习近平 on Friday met with visiting Chairwoman of the National Assembly of Vietnam Nguyen Thi Kim Ngan, calling on the two countries to promote friendship and deepen cooperation to lift bilateral ties to a new level.

Meanwhile, the South China Morning Post reports:

Chinese and Vietnamese coast guard vessels have been involved in a week-long confrontation over a reef in the South China Sea, risking the biggest clash between the two nations in five years. The stand-off may trigger a wave of anti-China sentiment in Vietnam not seen since 2014, when a Chinese oil rig arrived off the disputed Paracel Islands. 

Unfortunately, we’re going to have to continue watching this space…

—Jeremy Goldkorn

5. Was Shandong University arranging girlfriends for male foreign students?

Per The Paper (in Chinese), Shandong University is in trouble for a “study buddy” program presented as a way to promote “academic cooperation” between foreign and local students.

  • The scheme began in 2016, but this year, according to registration forms (in Chinese) leaked on the internet, the previous one-to-one relationship has transformed into groups, where one foreign student is equipped with three Chinese volunteers.

  • The registration forms required applicants to choose either male or female as their “study partners” and indicate if their motivations include “making foreign friends of the opposite sex.” In one part, the paper asks program applicants to elaborate on what kind of personalities they wish their ideal buddies to have. 

  • Internet users pointed out that the forms looked like information sheets given out by matchmaking agencies. 

  • Foreign students who signed up were predominantly male while the vast majority of Chinese volunteers were female, based on other documents leaked on Weibo. 

  • “It’s beyond my comprehension why the school would introduce these young girls who probably have no dating experience to foreign male students as study partners,” a Weibo user commented (in Chinese).

For details on this and other cases of foreign students being treated “like emperors,” click through to SupChina.  

—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:

  • Trade war talks resumed, with a call between U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, Chinese Vice Premier Liú Hè 刘鹤, and Commerce Minister Zhōng Shān 钟山 on July 9. The Financial Times reported that Trump had promised Xi he “would tone down criticism of Beijing’s approach to Hong Kong” as part of a deal to get talks back on track. 

  • China has not bought more U.S. agricultural products, despite Trump claiming that Beijing would order “a tremendous amount…almost immediately.” It’s one of many signs that prospects for trade talks are not bright. 

  • U.S. firms will be able to sell to Huawei, U.S. Commerce Secretary Wilbur Ross confirmed, after they apply for and are granted licenses. Ross did not give details on the timeline for this new regulation. 

  • “China is not an enemy,” dozens of China scholars, diplomats, businesspeople, and think tank/government types argued in an open letter last week. There was a backlash, of course, and a garishly patriotic competing open letter. John Pomfret, the veteran journalist and author of a book on the history of U.S.-China relations, also wrote a critical response in the Washington Post

  • The ambassadors of 22 countries signed a joint letter on Xinjiang, addressed to the president of the UN Human Rights Council. The countries signing on included Australia, Canada, Japan, and many Western European countries, but not the United States, which quit its position on the council a year ago

  • Xinjiang is a “model of human rights protection,” state media proclaimed, even as further compelling reports were published on the extent of the repression of Uyghurs. We also noticed an uptick in propaganda, including some with a domestic component, publicizing the Party line on how wonderful life is for Uyghurs. 

  • IBM is facilitating the construction of China’s surveillance state, through a collaboration that includes the Chinese company Semptian, which is working to “enhance the capabilities of internet surveillance and censorship technology.” This is not IBM’s first questionable collaboration. 

  • Members of the Rothschild family launched a wine in Shandong Province, called Lóng Dài 珑岱 and worth 1,100 yuan ($160) a bottle, which will go on the market in September. The original Château Lafite Rothschild wine from France is among the most expensive in the world, making it a highly sought-after — and counterfeited — product in China. 

  • A paper on Huawei’s supposed military connections, by economics and finance professor Christopher Balding, was panned by several scholars for sloppy methodology

  • Hungarian economist Janos Kornai, who was instrumental in advising China on its path of reform and opening in the 1980s, now regrets his involvement with Beijing. He wrote in an op-ed in the Financial Times: “We are the modern version of Mary Shelley’s Frankenstein, the 19th-century tale of an experimenting scientist who brought a dead body to life using that era’s technology: the electric shock. The resurrected creature became a murderous monster.”

  • In 2008, many lawyers in Beijing still hoped for rule of law, but found that their experiences with the government-controlled Beijing Lawyers Association were less than encouraging. The activist website ChinaChange published a documentary on YouTube interviewing eight of the lawyers involved at that time. 

  • Auto sales increased in June, but seemingly only because dealers offered discounts to clear inventory before July 1, when China began enforcing new emissions standards.


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BUSINESS AND TECHNOLOGY:

Budweiser Brewing Company APAC has failed to price its Hong Kong initial public offering, as what could potentially be the world’s largest IPO this year runs flat with investors while bankers and the company failed to reach a consensus on pricing.

China’s dismantling of the Anbang Insurance Group has continued with the newly established state-owned Dajia Insurance Group taking over its property and casualty insurance assets, the Chinese Banking and Insurance Regulatory Commission said on Thursday.

The Chinese capital will extend the running time of part of its public transport on Fridays and Saturdays from May to October every year in an effort to spur what it calls “nighttime economy.”

Beijing will extend its metro line 1 and line 2 for an extra one hour and 1.5 hours respectively with the last trains departing after 12:30 a.m., according to a plan of the municipal government. 

Noah Holdings Ltd. faces mounting questions about whether it overlooked risks when steering clients into high-yield investment products that some analysts have likened to ticking time bombs.

Noah, which has the equivalent of $117 billion under advisory and management, said in a statement this week that 3.4 billion yuan ($495 million) of credit products overseen by one of its units were affected by an alleged fraud at Camsing International Holding Ltd., a conglomerate whose chairman was recently detained by Chinese police.

“Central China Securities Co. said two asset management products totaling 240 million yuan ($35 million) are in danger of defaulting after the borrower falsified documents…Central China Securities didn’t provide more details or name the borrower, but said the case is being investigated by the police.

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

  • Green grazing
    Can the Tibetan plateau be grazed sustainably? / ChinaDialogue
    Researchers studying two different grazing patterns on the Tibetan Plateau, “household grazing” with fenced-in areas versus “community grazing” in which herds share communal pastures, found that the latter resulted in lower greenhouse gas emissions. However, “household grazing is well-established in China and experts say moving away from it will not be easy.”

POLITICS AND CURRENT AFFAIRS:

The trouble began in late February, when customs officials found huge quantities of kevazingo, a precious and banned hardwood, in two Chinese-owned depots at Owendo. Nearly 5,000 cubic metres were seized, worth $8 million, some of it disguised in containers bearing the stamp of the forestry ministry.

China’s lending to other countries has surged in the past decade, causing debt levels to jump dramatically, and as much as half of such debt to developing economies is “hidden,” a new study has found.

Such “hidden” debt means that the borrowing isn’t reported to or recorded by official institutions such as the International Monetary Fund (IMF), the World Bank, or the Paris Club — a group of creditor nations.

  • IMF approves Congo Republic bailout after China debt deal / Reuters
    “The International Monetary Fund’s (IMF) executive board approved a bailout worth nearly $449 million for OPEC member Congo Republic on Thursday, potentially setting a precedent for other nations struggling under the weight of large debts to China.”

  • Suppression of dissent
    Chinese police formally arrest beijing rights activist on ‘terrorism’ charges / Radio Free Asia
    Beijing-based veteran rights activist Zhāng Bǎochéng 张宝成…who has previously taken part in the New Citizens Movement calling on ruling Chinese Communist Party leaders to reveal details of their personal assets, was formally arrested on July 4 on suspicion of “incitement to terrorism.”  

SOCIETY AND CULTURE:

The world’s oldest international scholarship for postgraduate education will increase its number of Chinese awardees from four to eight in 2025, Elizabeth Kiss, warden of Rhodes House at the University of Oxford, told Sixth Tone on Thursday.

Disney’s upcoming live-action remake of Mulan has become a recurring topic of debate on social media recently. The movie is much-anticipated in China, but there are also critical voices suggesting the American Disney company “doesn’t understand China at all.” How ‘Chinese’ is Disney’s Mulan really? 

Scores of Beijing police, clad in riot gear and rain slickers, were seen yesterday marching artists out of the Luomahu, or Roma Lake, Art District ahead of its sudden demolition, purportedly under the auspices of China’s sweeping campaign against organised crime. Similarly, about 30 riot police moved into Beijing’s Huantie Art District on Sunday (7 July) to begin eviction of the several hundred artists with studios there.


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