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Beijing blames “traitors” and foreign forces for Hong Kong demonstrations


Dear Access member,

Maria Repnikova will join us for a Slack Q&A this Friday, August 2, at 10 a.m. EST (10 p.m. in Beijing). Maria is a professor at Georgia State University, and her new project is on China’s global nation-branding. Specifically, she examines how China expresses and transmits its values, norms, and cultural practices through the prism of its engagement in Ethiopia. She also occasionally digs into China-Russia issues and comparative non-democratic governance. 

To join the Slack channel, if you haven’t already, click here. We hope to see you there on Friday!

—Jeremy Goldkorn, Editor-in-Chief


1. Hong Kong: Beijing blames ‘traitors’ and foreign forces

Support for the demonstrations in Hong Kong is not waning, judging from this New York Times vox pop piece (porous paywall) titled “We can’t give up,” with quotes from Hong Kongers. But the government in Beijing is not backing off. On the contrary, state media and propaganda organizations appear to be preparing to target and punish the instigators, real and imagined. 

Here is the latest from China’s beleaguered international city:

  • “The heart of Hong Kong’s business district was turned into a war zone on Sunday night as riot police fired tear gas and rubber bullets into crowds of protesters to chase them off the streets, after a day of defiance that saw them lay siege to Beijing’s liaison office for the first time in the social unrest over the now-suspended extradition bill,” reports the South China Morning Post. 

  • The government “issued a late-night statement to strongly condemn protesters for deviating from their mandated march route and challenging Beijing’s sovereignty by besieging the liaison office, where they vandalised the national emblem.” The statement promised an investigation.

  • Today the Hong Kong and Macau Affairs Office under the State Council, the government organization in charge of Hong Kong, gave its first press conference since the handover in 1997 to condemn foreign “interference,” call for the punishment of “radical protesters,” and to emphasize that the central government supports the actions of the Hong Kong government. The South China Morning Post has a partial transcript or see these reports from Hong Kong Free Press, the Guardian, and New York Times (porous paywall). 

  • Chinese state media continues to dial up the paranoid rhetoric, blaming the enormous demonstrations on hostile foreign forces and the machinations of “traitors.” An editorial published today by the Party’s newspaper, the People’s Daily, “calls for ‘forceful’ police action to end Hong Kong unrest,” per the South China Morning Post

  • “Traitor” is a word being bandied about in state media to describe supporters of the demonstrations. Publisher Jimmy Lai (黎智英 Lǐ Zhìyīng) and Democratic Party founder Martin Lee (李柱銘 Lǐ Zhùmíng) receive special attention. See for example, this mouth frothing Global Times article (English, Chinese) for a description of the conspiracy theory:

As demonstrations by extremist forces in Hong Kong grow increasingly violent, the intervention of foreign forces has become more apparent. However, such intervention cannot grow in Hong Kong society without the cooperation and assistance of a group of traitors. Jimmy Lai Chee-ying and Martin Lee Chu-ming are representatives of this group of traitors.

From last year to this year, these so-called democratic leaders have had unprecedented levels of contacts with the U.S. government and Western parliaments, forming increasingly brazen collusion that has fueled the expansion of street politics in Hong Kong.

2. Tough new cyber rules to punish American companies?

The Wall Street Journal reports (paywall) that “proposed cybersecurity regulations by China are vexing U.S. businesses, who see the rules as new barriers to the Chinese market, and loom as a potential sticking point in coming U.S.-China trade talks.”

The new draft rules and standards, released over the past two months with little fanfare, flesh out an existing cybersecurity law that the U.S. and many foreign businesses already consider draconian. Some forbid certain data from leaving China or slow down the process of sending data overseas, increasing uncertainties and costs. Tough procurement rules could also place foreign products at a disadvantage…

The timing suggests Beijing is using them to show Washington it has options to punish U.S. businesses, experts said. “These are the tools in the arsenal that can be ready to be fired,” said Samm Sacks, a cybersecurity expert at the Washington-based think tank New America.

Meanwhile, the New York Times reports (porous paywall) that the U.S. and China have resume trade negotiations today, but there are “slim hopes for a deal” as “both sides appeared more focused on preventing tensions from escalating before the 2020 presidential election than on making concessions.”

3. Xi Jinping’s cousin, triads, and a casino in Australia

Australia’s Crown Casino has long targeted Chinese high-rollers. Based on a six-month joint investigation by the Australian 60 Minutes TV show, and the newspapers The Age and Sydney Morning Herald, behind the scenes “Crown was prepared to get into bed with junket operators backed by Asian organised crime syndicates called ‘triads’, including the most powerful drug-trafficking syndicate in the world.”

Among the revelations: Xi Jinping’s cousin is a high roller.

A cousin of Chinese President Xí Jìnpíng 习近平 was aboard a private jet for high-roller gamblers when it was searched by federal agents on the Gold Coast in 2016 on suspicion that it was involved in international money laundering.

The initial target of the police search of the jet’s passengers was an alleged criminal fugitive and business partner of Crown Resorts, Tom Zhou. But the search also revealed that one of Mr Zhou’s travelling companions was Mr Xi’s cousin, Ming Chai.

These are the other parts of the investigative package:

4. 2020 Democratic presidential candidates on China

Here’s an addition for our 2020 Presidential election China tracker. From Axios

Each candidate was asked if they plan to take the China issue back from Trump, and if so, how? Specifically, we asked whether the candidates would immediately remove the Trump administration’s tariffs on Chinese imports, and if so, how else they would address China’s theft of America’s Intellectual Property?

In brief: They all talk tough on China. 

—–

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:

Jack Ma’s online bank is leading a quiet revolution in the way China lends to small businesses, taking aim at a credit bottleneck that has held back Asia’s largest economy for decades.

Using real-time payments data and a risk-management system that analyzes more than 3,000 variables, Ma’s four-year-old MYbank has lent 2 trillion yuan ($290 billion) to nearly 16 million small companies. Borrowers apply with a few taps on a smartphone and receive cash almost instantly if they’re approved. The whole process takes three minutes and involves zero human bankers. The default rate so far: about 1 percent…

For China’s $13 trillion economy, which expanded at its weakest pace since at least 1992 last quarter, the implications could be profound.

  • Booming private school sector
    Private education / Xinhua

    • Private K-12 schools accounted for about 35 percent of China’s total school enrolments in 2018.

    • China’s private schools totaled 183,500 in 2018, an increase of 5,815 from the previous year.

    • 53.78 million students enrolled in private schools in 2018, up 5.03 percent from 2017.

  • China’s 5G domestic roll-out
    Huawei to start selling 5G smartphones in August / Caixin
    “Chinese telecoms giant Huawei said Friday that its 5G-ready smartphone, the Mate 20 X, will formally go on sale on August 16, marking the second launch this week of a handset supporting fifth-generation wireless technology produced by a Chinese company.”
    China’s 5G economy takes shape as carriers step up investment / Nikkei Asian Review (porous paywall)

China’s state-run telecommunications companies are rushing to usher in the 5G era, [as] China Mobile aims to build over 50,000 5G base stations in more than 50 cities across the vast mainland, enabling it to launch commercial service by the end of this year. 

Huawei Technologies is set to leapfrog Samsung Electronics, Apple and Qualcomm with the introduction of two of the world’s most advanced chips in the coming months, despite the U.S. crackdown on exports to China’s flagship tech company, sources familiar with the matter told the Nikkei Asian Review.

Though traders viewed the launch positively, the question is whether interest in existing shares will be maintained as more firms come to the table. 

“With just a few trading days since its launch, it’s difficult to assess the success of the Star board,” said Tiffany Hsiao, a portfolio manager at Matthews Asia in San Francisco.

App-based homework-helper Knowbox announced this month that it secured $150 million of additional funding from investors led by internet giant Alibaba Group Holding Ltd. Yet despite the money sloshing around, the slew of companies that have entered the industry are still struggling to find sustainable business models due to high marketing costs.

By the end of 2014, US dollar assets accounted for 58 per cent of China’s total reserves, down from 79 per cent in 2005, the administration said, adding that the share of the assets in the US currency was lower than the global average of 65 per cent in 2014.

China’s Bank of Jinzhou won government-backed reinforcement on Sunday as three state-controlled financial institutions said they would take at least 17.3 per cent in the troubled lender, whose shares have been suspended since April.

Industrial and Commercial Bank of China (ICBC), the country’s largest lender by assets, and China Cinda Asset Management and China Great Wall Asset Management, two of China’s four largest distressed debt managers, said on Sunday they would take stakes in Bank of Jinzhou.

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

Gāo Cǎixiá 高彩霞 is one face of the Chinese government’s bet that CRISPR can transform the country’s food supply. A natural bacterial immune system, CRISPR was turned into a powerful genome editor just a few years ago in U.S. and European labs. Yet today, China publishes twice as many CRISPR-related agricultural papers as the second-place country, the United States. The explanation? “Because I’m here,” jokes Gao, who punctuates much of her speech with robust, giddy, infectious laughter.

In August 2013, her group modified plant DNA with CRISPR, a first, and the 50-year-old researcher has since written three dozen publications that describe using the genome editor on various crops. Daniel Voytas, a plant geneticist at the University of Minnesota in St. Paul who invented an earlier genome-editing system and who has also adopted CRISPR, says Gao is an “outstanding cell biologist [who] jumped on CRISPR early on and has just been riding the crest of the wave.”

The prevalence of the hepatitis B surface antigen in children aged between 1 and 4 stood at 0.32 percent in 2014.

That met the World Health Organization’s goal of reducing that figure to below 1 percent ahead of schedule, said Chang Jile, head of the disease control bureau under the NHC.

The reported incidence rate of hepatitis A in the country registered a record low of 1.17 per 100,000 people, Chang said in Beijing earlier last week at a conference to mark the World Hepatitis Day which fell yesterday…

…There are still 86 million people infected with hepatitis B and 10 million infected with hepatitis C in China, Chang said, noting that tasks of fighting viral hepatitis are still arduous.

POLITICS AND CURRENT AFFAIRS:

A court in southwestern China has handed an unusually heavy punishment — 12 years in prison — to one of the country’s most prominent activists despite appeals for clemency from international rights organizations and U.N. experts.

Huáng Qí 黃琦, 56, was sentenced for “deliberately disclosing state secrets” to foreign parties, the Mianyang Intermediate People’s Court in Sichuan province said in a brief online announcement Monday. Huang is the founder of the website 64 Tianwang, which aired accounts of government abuse, corruption and fecklessness from across China for two decades.

China’s central internet regulator is mulling a potentially years-long blacklist for people who spread internet rumors or violate other online rules as the government seeks to further curb what it considers bad behavior online. 

A draft regulation [in Chinese] released for public comment on July 22 by the Cyberspace Administration of China proposes restricting the internet access of users and providers of online information services that “fabricate, publish, or spread information that violates public morality, business ethics, or good faith” or deliberately provide technological assistance to those who do so…

Blacklisted individuals would generally be restricted from using the web, accessing online information services, or reentering the internet industry for three years, the draft regulation says. 

SOCIETY AND CULTURE:


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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.