Financial war?

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Dear Access member,

Our word of the day is financial war (金融战争 jīnróng zhànzhēng). 

—Jeremy Goldkorn, Editor-in-Chief

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1. Financial war? 

Bloomberg reports (porous paywall): 

Trump administration officials are discussing ways to limit U.S. investors’ portfolio flows into China in a move that would have repercussions for billions of dollars in investment pegged to major indexes, according to people familiar with the internal deliberations…

Among the options the Trump administration is considering: delisting Chinese companies from U.S. stock exchanges and limiting Americans’ exposure to the Chinese market through government pension funds. Exact mechanisms for how to do so have not yet been worked out and any plan is subject to approval by President Donald Trump, who has given the green light to the discussion, according to one person close to the deliberations. 

Reuters has confirmed that the discussions have been taking place. Seems like a friendly way to warm up for the upcoming trade talks. Buckle up. 

Other news of the U.S.-China techno-trade war, day 449:

Excessive dependence on China for drugs and pharmaceutical ingredients has been a growing concern in the U.S. that we have been tracking for several months. Now Bloomberg reports (porous paywall): 

California congresswoman plans to hold a hearing in about a month to explore the national-security risks posed by China’s dominance of the U.S. pharmaceutical supply chain, escalating concerns raised by the Pentagon.

Democratic Representative Anna Eshoo is warning fellow lawmakers that if the trade war between Washington and Beijing were to intensify, China could throw the U.S. into chaos by cutting off the vast supply of important drug components made in the Asian nation.

“Executives from the biggest U.S. financial firms, including JPMorgan Chase & Co and Goldman Sachs Group, are meeting with top regulators in Beijing in a sign that the trade war with the US has done little to derail China’s opening of its $43 trillion financial system,” reports Bloomberg via Straits Times

2. Canadian university revokes club status of CSSA

The student union at McMaster University near Toronto, Canada, “has revoked the club status of the school’s Chinese Students and Scholars Association (CSSA) after an appeal by students seeking to decertify the group over concerns about alleged links to the Chinese government,” reports the South China Morning Post:

Objection to the CSSA’s official status at in Hamilton, Ontario, near Canada’s largest city Toronto, stemmed from a protest campaign it spearheaded in February in response to a talk given on campus by Rukiye Turdush, a Uygur activist.

The association issued an open letter objecting to the university’s invitation to Turdush, reported the event to the Chinese consulate in Toronto and sent footage of the talk to Chinese officials at their request, the Washington Post reported at the time.

See also: 

3. Carrie Lam has an uncomfortable evening in a stadium

Hong Kong Free Press reports

Chief Executive Carrie Lam [林鄭月娥 Lín Zhèng Yuè’é] on Thursday was trapped inside the venue of her first public dialogue session for four hours after it ended, amid protests outside.

Lam spoke with dozens of residents during the two-hour town hall meeting which was held inside Queen Elizabeth Stadium in Wan Chai. Although the session ended at around 9:30pm, protests continued outside for hours afterwards.

As crowds gradually left, Lam and four other officials waited until around 1:30am to leave via the stadium’s back door.

Other news from the City of Protest:

“Hong Kong activist Andy Chan [陳浩天 Chén Hàotiān] said he was attacked by three or four men on Friday when he was walking to a court hearing,” according to Hong Kong Free Press. “Chan, the co-founder of the banned pro-independence Hong Kong National Party, was charged with unlawful assembly and assaulting a police officer at a protest in Sheung Shui on July 13.” 

“Grants worth thousands of Hong Kong dollars each will be given to the jobless and underemployed who complete free training under a HK$300 million ($38 million) government plan to help them survive the economic chill,” reports the South China Morning Post

Hong Kong’s “ultra high net worth individuals…collectively lost 9 percent of their total value,” says the South China Morning Post. “In 2018, their total wealth was US$1.179 trillion.” 

4. The China model?

“China on Friday published a white paper, titled “China and the World in the New Era,” to help the international community better understand China’s development,” reports Xinhua (or see Chinese-language version). The white paper, and several editorials associated with it, are prominently placed on all state media websites today. 

This white paper is one of the first formal documents to say what Xi Jinping and other Chinese officials have been suggesting for several months: that China “is providing more public goods to the international community as well as experience and reference for other developing countries.” 

This is a departure from the long-standing Party talking point that China’s experience is unique, and that the country does not seek to teach or impose its model on other countries.  

—Jeremy Goldkorn

Here are the stories that caught our eye this week:

  • The crackdown on Islam has now spread far beyond Xinjiang, to as far east as Henan Province, according to reporting by Emily Feng at NPR, following up on reports by the Washington Post and New York Times. Nathan Vanderklippe of the Globe and Mail reported that even Christian Uyghurs and Han Chinese are being locked up in Xinjiang’s “deradicalization” campaign. Meanwhile, a leaked video, apparently filmed by a drone piloted by camp workers, showed Uyghur prisoners shaved, shackled, and blindfolded in Korla in late August 2018. 

  • China defended its Xinjiang policies at the UN, as Chinese Foreign Minister Wáng Yì 王毅 raised the issue himself, and told the United Nations Security Council that “the deradicalization measures in Xinjiang…are China’s important contribution to the global fight against terrorism.” This was the first public mention of Xinjiang at the UN Security Council. Meanwhile, though many senior U.S. officials have condemned China’s abuses in Xinjiang, President Trump appears to be intentionally avoiding the issue. 

  • Bytedance censors political content on its TikTok app, known as Dǒuyīn 抖音 in China, closely and in line with Beijing’s priorities, just like Tencent and any other major China-based social media company, the Guardian revealed. A Jia Tolentino essay about TikTok in the New Yorker discussed in detail how the app works, what makes it so addictive, and what the differences are between the Chinese and international versions. 

  • Beijing Daxing International Airport opened to great fanfare 46 kilometers (29 miles) south of central Beijing. The Zaha Hadid–designed, starfish-shaped air hub could become one of the world’s busiest. 

  • The trade war is getting expensive for the U.S., as Trump’s $28 billion farm rescue bailout is more than twice as expensive as the 2009 bailout of Detroit’s Big Three automakers, and a survey showed that most American farmers expect another taxpayer-funded round of aid next year. Also, many U.S. colleges are seeing drops of one-fifth or more in Chinese student enrollment, due to political tensions and increasing visa uncertainties under an American administration hostile to foreigners and Chinese students in particular. 

  • Mèng Wǎnzhōu 孟晚舟 may not leave Vancouver for years, according to legal experts, and judging by the fact that the formal hearing for extraditing the Huawei CFO from Canada to the U.S. is scheduled to last until October or November 2020. Meanwhile, Beijing’s Canadian hostages, Michael Spavor and Michael Kovrig, are likely to see neither lawyers nor the light of day until Meng is released. 

  • Swine fever has cost China at least 1 trillion yuan ($140 billion), according to an industry expert estimate. Meanwhile, Chinese tech giant NetEase, along with Alibaba and JD, are all investing in pig farming and other agricultural projects. 

  • There was another weekend of protests in Hong Kong, and most controversially, two 13-year-old girls were arrested, including one who was accused of burning the Chinese national flag. Later, Hong Kong Chief Executive Carrie Lam held a dialogue session with 150 randomly selected residents. Most of them harshly criticized her handling of the political crisis

  • The Chinese-language New Zealand Herald denied that it follows censorship guidelines from Beijing. But this is a bald-faced lie: The outlet’s website lists its registration number with Beijing internet authorities, which explicitly means that it is required to comply with all Chinese internet censorship laws. 

  • The United States will stay in the Universal Postal Union, but according to a compromise the Trump administration reached with the organization that governs the price of international parcel shipping, the U.S. will be able to declare its own prices on incoming international mail starting in July 2020. ackages shipped from China to the U.S. will become much more expensive starting then. 

  • Wáng Shūpíng 王淑平, the HIV whistleblower from the early 1990s who has lived for the past 18 years in the U.S., died on September 21. She was harassed by Chinese officials until the day she died. 

  • ZhongAn Online Property & Casualty Insurance is offering a variety of innovative insurance policies, capitalizing on people’s worries about events like children going missing or vaccines being ineffective. 


  • The enormous market of female computer gamers
    The Chinese startup that brought female-oriented games mainstream / TechNode
    “Mobile gaming firm Paper Games has recently made a splash in China’s video game sector with yet another female-focused smash-hit title. The success of the dress-up game ‘Shining Nikki’ is bringing games targeting female Chinese users to the forefront.”

  • Big brother’s terrifying new camera?
    China’s new ‘super camera’ can instantly pinpoint specific targets among tens of thousands of people / ABC (Australia)
    “Scientists have unveiled a 500 megapixel cloud camera system in China that they say is capable of capturing the facial details of each individual in a crowd of tens of thousands of people, raising fears facial recognition monitoring could soon reach a new level.”

  • A war chest for Transsion to ensure dominance of Africa’s mobile market
    Africa’s favorite smartphone maker is now worth $4 billion / CNN
    “Chinese smartphone maker Transsion, which is dominating Africa with its Tecno brand, has raised nearly $400 million in an IPO on China’s hot new tech-focused stock market.”

  • Passenger drone company to IPO on Nasdaq
    Chinese passenger drone maker EHang is said to file for U.S. IPO / Bloomberg (porous paywall)
    On September 18, a “bipartisan group of lawmakers introduced legislation…that would bar federal agencies from buying drones from China and any other country deemed a national-security risk,” reported the Wall Street Journal (paywall). The legislation, however, says nothing about Chinese drone companies raising funds on American markets.
    Now Ehang, one of China’s largest drone makers and perhaps the best known after DJI, “has made a confidential application for an initial public offering with Nasdaq, according to people with knowledge of the matter.” Ehang made headlines last year for its prototype autonomous drone taxi

  • IPOs returning to Hong Kong?
    German eye clinic group EuroEyes sets sights on US$90 million IPO in Hong Kong as investor sentiment starts to make a comeback / SCMP
    “Germany-based EuroEyes International Eye Clinic announced on Friday that it would seek to list its shares in Hong Kong for up to HK$700 million ($89 million), the latest in a series of initial public offerings (IPOs) returning to the city as the financial hub endures its worst political crisis.”

  • Funding electric cars after subsidies end
    BAIC’s electric car subsidiary issues 1.5 billion yuan in bonds / Caixin Live
    “China’s state-owned car manufacturer BAIC Group announced Thursday that its subsidiary Beijing Electric Vehicle (BJEV) will issue corporate bonds worth up to 1.5 billion yuan ($210 million), as the domestic electric vehicle sector charts a path through diminishing government subsidies.”

  • Paying for pensions as China ages
    Finance Ministry to transfer $16 billion in equities to pension-shortfall fund / Caixin (paywall)
    “The Ministry of Finance will transfer around 115 billion yuan ($16.1 billion) in state assets to the national social security fund, in the government’s latest effort to stave off a looming pension shortfall.”

  • Chinese government bonds not ready for global index
    FTSE Russell leaves China out of flagship bond index / FT (paywall)
    “FTSE Russell will not include China in its flagship government bond index, citing market liquidity and foreign exchange concerns in the country’s $5 trillion government debt market.”

  • German meat company sets up shop in Sichuan
    Tönnies launches joint venture in China / Global Meat News
    “Meat processing business Tönnies Holding and the Dekon Group are launching a joint venture for a slaughter and butchering center” in Sichuan.


The director of a hospital neurosurgery department in northern China has been suspended from work and is facing an inquiry after footage of him purportedly taking cash for an operation was posted online…

The practice of doctors from cities going to rural hospitals to do operations in their spare time without telling their employer is known as “flying knife” [飞刀 fēi dāo] surgery. It is a long-standing gray area driven by demand from patients in poorer regions where medical staff may not be qualified to deal with complex conditions.

  • Carbon trading
    Carbon trading in China / Lauri Myllyvirta on Twitter
    A thread on what carbon trading in China “looks like and what it will and will not do when it’s launched next year.”


  • Japan fears the PLA
    Japan lists China as bigger threat than nuclear-armed North Korea / Reuters
    “China’s growing military might has replaced North Korean belligerence as the main security threat to Japan, Tokyo’s annual defense review indicated on Thursday, despite signs that Pyongyang could have nuclear-tipped ballistic missiles.”

  • House arrest for wife and young children of activist who died in detention
    Death of Chinese activist in police custody prompts calls for investigation into torture / Guardian
    “Wáng Měiyú 王美余, 38, was detained in July after he stood outside the Hunan provincial police department holding a sign that called on Xi and Chinese premier Li Keqiang to resign and implement universal suffrage in China.” Wang died on Monday, and the authorities immediately put his wife and two young children under house arrest. 

  • Reviving the Quad
    Indo-Pacific ministers elevate security talks that irk China / Bloomberg (porous paywall)
    “A bid by four of the Indo-Pacific’s largest democracies [Australia, India, Japan, and the U.S. ] to band together as a counter to China’s growing might has received increased impetus after the so-called Quad group met for the first time at the ministerial-level in New York.”



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