We’ll grind you up and crush your bones

Access Archive

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Tomorrow, October 15, at 8 p.m. EST, you’re invited to the latest in our series of conference calls. We’ll be talking to Rob Petty, co-CEO of Clearwater Capital Partners, a $5 billion Hong Kong–based investment fund. Our topic: “China’s new foreign investment law, Hong Kong unrest, & more: Which way is the wind blowing?”

Access members can dial in for free. Click here for more information and to reserve your place.

Our word of the day is a colorful expression that Xí Jìnpíng 习近平 used to threaten Hong Kong protesters: 粉身碎骨 fěnshēn suìgǔ — literally, “split apart the body and break the bones into fragments,” or “grind you up and crush your bones.”

—Jeremy Goldkorn, Editor-in-Chief


Children in traditional clothes wave to Xí Jìnpíng 习近平 in Kathmandu on October 13, 2019 (see story #4). Photo by Prakash Mathema / Reuters.

1. Dodgy doings at Deutsche Bank in China

New York Times crack investigative journalists Michael Forsythe, David Enrich, and Alexandra Stevenson have a scoop on Deutsche Bank’s bribery and buttering up of officials in China (porous paywall). Excerpt:  

Millions of dollars were paid out to Chinese consultants, including a business partner of the premier’s family and a firm that secured a meeting for the bank’s chief executive with the president. And more than 100 relatives of the Communist Party’s ruling elite were hired for jobs at the bank, even though it had deemed many unqualified.

This was all part of Deutsche Bank’s strategy to become a major player in China, beginning nearly two decades ago when it had virtually no presence there. And it worked. By 2011, the German company would be ranked by Bloomberg as the top bank for managing initial public offerings in China and elsewhere in Asia, outside Japan.

The bank’s rule-bending rise to the top was chronicled in confidential documents, prepared by the company and its outside lawyers, that were obtained by the German newspaper Süddeutsche Zeitung. The previously undisclosed documents, shared with The New York Times, cover a 15-year period and include spreadsheets, emails, internal investigative reports and transcripts of interviews with senior executives.

The documents show that Deutsche Bank’s troubling behavior in China was far more extensive than the authorities in the United States have publicly alleged. And they show that the bank’s top leadership was warned about the activity but did not stop it.

—Jeremy Goldkorn

2. Trump’s invisible trade deal 

Last Friday, 463 days since the first round of large-scale tariffs kicked off the first great Sino-American trade war of the 21st century, President Trump announced a deal.

Well, a partial truce.

Well, a “phase one” agreement. 

But it’s not in writing.

And China didn’t confirm that there was a “deal.” 

A very generic readout from Chinese state media Xinhua says, “the two sides achieved substantial progress…discussed the arrangement for future consultations, andagreed to make joint efforts toward eventually reaching an agreement.” 

Bloomberg now reports that even for this limited agreement, “China wants to hold more talks this month to hammer out the details of the ‘phase one’ trade deal touted by Donald Trump before Xi Jinping agrees to sign it.”

In other words, what Trump called over the weekend “by far…the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country” is in fact exactly what Scott Kennedy of the Center for Strategic and International Studies called it: an “invisible deal.” 

—Lucas Niewenhuis

3. Tencent resumes NBA streaming as gaming companies censor their staff and players  

Here is today’s global censorship and self-censorship related news: 

“Tencent, the National Basketball Association’s primary media partner in China, resumed livestreaming preseason games on its sports website on Monday, ending a five-day-long suspension of all such games from the league,” according to TechNode, sourced from NetEase (in Chinese).

But Tencent has cancelled the streaming of Woj in the House, which calls itself “the most watched basketball show in the world,” because the host Adrian Wojnarowski “pissed off a lot of Chinese fans and at least one important business by ‘liking’ Daryl Morey’s now infamous pro-Hong Kong tweet before it was deleted,” reports Deadspin.

Blizzard, the game company that suspended a Hearthstone game player for a year and made him forfeit $10,000 in prize money after donning a gas mask and shouting “Liberate Hong Kong. Revolution of our age!” in a post-match interview, has since returned the prize money and reduced the player’s suspension to six months. But the company has doubled down on its policy to punish political speech from professional gamers. 

There has been a fierce backlash: Two esports casters, Nathan Zamora and Brian Kilber, have announced they are stepping down from hosting Hearthstone competitions. 

The Reddit forum for Blizzardviewable here — is now a nonstop anti-Chinese-government meme-creating machine. Anyone familiar with this corner of internet culture will know that grudges are not short-lived in this space.

Meanwhile, U.S. game developer Riot Games and German-based esports company ESL “have warned employees and staff not to discuss political issues after the fallout from American game publisher Blizzard Entertainment’s decision to suspend an esports player for expressing support for anti-government protests in Hong Kong,” reports the South China Morning Post

Last week we noted that the CEO of Epic Games, a rival games studio, announced that he “supports the rights of…players and creators to speak about politics and human rights,” and that he had a controlling stake in the company, so would not take orders from Tencent, which owns 40 percent of the shares. 

Hollywood and the Nine Dash Line: In somewhat related news, “Vietnam has pulled the animated DreamWorks film Abominable from cinemas over a scene featuring a map which shows China’s unilaterally declared ‘nine-dash line’ in the South China Sea,” reports the South China Morning Post

The film was a joint production Abominable, about a Chinese girl who discovers a yeti living on her roof, was jointly produced by Shanghai-based Pearl Studio and Comcast-owned DreamWorks Animation and was first shown in Vietnamese cinemas on October 4.

Click through to the SCMP for a screenshot of the Hollywood-produced, Beijing approved map of the South China Sea. 

—Jeremy Goldkorn and Lucas Niewenhuis

4. Xi makes nice noises with Modi, then promises Nepal a railway from Tibet 

After meeting Pakistani Prime Minister lmran Khan in Beijing last week, Xí Jìnpíng 习近平 has concluded a tour of India and Nepal. 

In India, Xi and Prime Minister Narendra Modi agreed “to set up a high-level group to tackle India’s galloping trade deficit with the world’s second-biggest economy,” reports Reuters.

Indian generic drugmakers have long sought greater market access to China, as have India’s IT services. Xi said both were welcome.

China, for its part, has been urging India to take an independent decision on telecom equipment maker Huawei’s bid for India’s proposed 3G network and not be swayed by U.S. pressure.

The two leaders did not discuss Kashmir or disputed borders. Nonetheless, both sides issued upbeat statements. Per India Today, Modi said:

We had decided that we will manage our differences prudently and won’t allow them to turn into disputes. We will remain sensitive about our concerns and our relationship will contribute towards peace and stability in the world.

“The easy rapport between Prime Minister Narendra Modi and President Xi Jinping, as they continued their private conversation in [Chennai] on Saturday, led to the forging sister state ties between Tamil Nadu and China’s Fujian Province,” according to Hindustan Times.  

Xi became the first Chinese president in 22 years to visit Nepal after he left India. He met  Nepali Prime Minister KP Sharma Oli, and inked “separate deals for a rail link to Tibet and a tunnel, an official said, as the Himalayan nation seeks to end an Indian dominance over its trade routes by increasing connectivity with Beijing,” reports Reuters.

A Chinese team has already conducted a preliminary study for the [rail link] project, which will be part of China’s Belt and Road Initiative, Xi’s signature diplomatic and trade push that is attempting to recreate the old Silk Road joining China with Asia and Europe.

Alongside, a proposed 28-km (17 mile) road tunnel will more than halve the distance from Kathmandu to the Chinese border, saving on time and cost.

Officials from both sides also signed 20 deals covering trade, water supply and traditional medicines at the end of Xi’s visit, the first by a Chinese president in 22 years.

5. We’ll grind you up and crush your bones if you try to split China — Xi Jinping to Hong Kong

From nationalist rag Global Times Twitter account:

“Anyone who attempts to split any region from China will be crushed with shattered body and bones,” said Chinese President Xí Jìnpíng 习近平. Observers say this is an explicit warning to the rioters and secessionists in Hong Kong who have made the place a distressful mess.

Xi made the remarks during a meeting with Nepal’s prime minister, according to the foreign ministry (in Chinese) and Agence France-Presse. The phrase Xi used was 粉身碎骨 fěnshēn suìgǔ — literally, “split apart the body and break the bones into fragments.”

Xi’s bloody-sounding words have been widely reported by Chinese-language media in and outside the P.R.C. — Google returns hundreds of relevant results about Xi if you search for 粉身碎骨. It’s unclear if the word choice was an intentional warning: The last reported use of the phrase by Xi was in a propaganda piece (in Chinese) about how he and the ideal Communist Party member would be willing to be ground up and crushed to serve the Party. 

It’s worth pointing out that the majority of protesters are not calling for independence, nor is it one of their five key demands. Some of them are, however, getting increasingly violent.  

“A homemade bomb was detonated in Hong Kong on Sunday amid violent protests,” according to the New York Times (porous paywall): 

The device was hidden in a bush and was activated by a mobile phone as a police vehicle passed nearby in the Mong Kok district of Kowloon… The bomb caused no damage or injuries, but it was the first time such a device had been employed in weeks of clashes…

In another indication of the rising violence, an officer was stabbed in the neck by a demonstrator on Sunday. The police said on Monday that veins in the officer’s neck had been severed, and that he had undergone surgery and was in serious condition.  

“The violence appears to have done little to dent mainstream support,” according to Agence France-Presse

Political analyst Dixon Sing said this was because neither Beijing nor Hong Kong’s government have given protesters any incentives to de-escalate after four months of wielding a stick and offering few carrots…

“The increase in violence of the police has been a major factor in not detracting the overall support for the protesters, including those increasingly militant and violent attacks,” he added.

“A driver for Now TV was hit by a police projectile outside Mong Kok police station on Sunday before being detained and beaten by officers inside, according to the broadcaster,” reports the Hong Kong Free Press. “Protesters were throwing petrol bombs at the station throughout the night as vehicles for local broadcasters were parked nearby.”

Protests continue today. “Tens of thousands of Hong Kong protesters — some waving American flags — filled a downtown park and spilled onto nearby roads on Monday evening, urging U.S. congressmen to pass a bill that would sanction and penalize Chinese and Hong Kong officials deemed to have acted against the city’s democratic freedoms,” reports the South China Morning Post

Also today, “more than 100 students and alumni formed a human chain to protest against a “black mask ban” at a secondary school, ignoring the Education Bureau chief’s warning last week that such acts “could constitute unlawful assembly,” says the South China Morning Post.  

“Looks like there will be a rally Tuesday night in Hong Kong is support of Houston Rockets GM Daryl Morey whose tweet in support of Hong Kong protests brought Beijing’s ire on the NBA,” according to the internet.

6. Growing China worries in Australia  

As America tries to figure out a new normal for relations with China, the debate in Australia continues to grow louder, too: 

The Australian opposition Labor Party’s shadow foreign affairs minister Penny Wong (黄英贤 Huáng Yīngxián) has given a speech arguing that Prime Minister Scott Morrison’s foreign policy ideas, especially with regards to China, are “disturbingly lightweight” and that he makes decisions against the national interest for “short-term political gain,” reports the Guardian.  

Wong also brought up Morrison’s defense of Hong Kong–born MP Gladys Liu (廖嬋娥 Liào Chán’é) against accusations of inappropriate links with a Chinese Communist Party group as racist, suggesting that “Morrison had ‘done Beijing’s work for it’ because the Chinese government often deflects criticism or scrutiny of alleged foreign interference with claims of racism.”

Commenting on Wong’s speech, political columnist Paul Bongiorno says, “Australia’s long-established bipartisan approach to relations with our biggest trading partner China is at breaking point.”

“Australia’s universities are embroiled in a growing geopolitical storm amid rising concerns over expanding Chinese power abroad. Is Australian technology and know-how being used to help strengthen China’s repressive regime?” asks this Four Corners news video (or see summary in text). The entities involved are:

  • “Global Tone Communication, known as GTCOM, which is a data-mining company majority owned by the Chinese Government,” which “has a memorandum of understanding with the University of New South Wales to test its sophisticated technology.” GTCOM works with Haiyun Data, whose “technology has reportedly been used as part of surveillance activities against the Uyghur Muslim minority in China.”

  • “Haiyun Data told Chinese media in January that it operates an artificial intelligence laboratory at the University of Technology Sydney (UTS).” The university denies the claim… However, a spokesperson told Four Corners that it operates a research project in conjunction with the company, the purpose of which is handwriting recognition.”

  • “China Electronics Technology Corporation, or CETC, which is believed to have been involved in the mass surveillance of Uyghurs,” has a separate deal with UTS.

See also this new report by Samantha Hoffman from the Australian Strategic Policy Institute: Engineering global consent: The Chinese Communist Party’s data-driven power expansion.

7. Systematic destruction of Uyghur burial grounds

Grim news continues to seep out of Xinjiang: 

The destruction of Uyghur cemeteries continues, according to a new report from Agence France-Presse:

Authorities in Xinjiang in China’s northwest are destroying burial grounds where generations of Uygur families have been laid to rest, leaving behind human bones and broken tombs in what activists call an effort to eradicate the ethnic group’s identity. In just two years, dozens of cemeteries have been destroyed in the region, according to an AFP investigation with satellite imagery analysts Earthrise Alliance.

Public fashion shows in Xinjiang are part of a decade-long campaign “to transform the appearance of Uyghur women.” Scholar Timothy Grose writes:

These events represent the CCP’s recent efforts to transform the appearance of Uyghur women; yet, the party began disciplining the Uyghur feminine body in earnest nearly a decade ago. In 2011, officials unrolled Project Beauty, a five-year, US$8 million dollar multi-media initiative that encouraged piously-dressed Uyghur women to “look towards ‘modern’ culture” by removing face veils and jilbāb.” Throughout southern Xinjiang’s rural villages, officials organized fashion shows, beauty pageants, longest-hair contests as well as lectures on ethnic policy, ethnic attire, and social etiquette to persuade Uyghur women to “let their hair down and show-off their pretty faces.”  

Almaty-based journalist Chris Rickleton profiles several ethnically Kazakh refugees from Xinjiang in this piece in the Hong Kong Free Press.

—Jeremy Goldkorn


BUSINESS AND TECHNOLOGY:

China’s shoppers and investors lost their appetite for gold this year — and there’s little expectation of any major improvement in 2020 as slowing growth and higher prices crimp consumer spending.

Jewelry consumption is forecast to drop 4 percent to about 660 tons this year, according to forecasts from Metals Focus Ltd., while a decline of more than 20 percent to around 240 tons is seen for investment demand.

To see how little investors love China’s small banks, look no further than the nation’s largest online auction site.

On Alibaba Group Holding’s Taobao platform, a Chinese court tried to auction off 1.5 million shares of a rural bank in the eastern Zhejiang province for a starting price of 1.15 million yuan (US$161,000) – about half their appraised value. After three failed attempts over two months, the latest relisting drew only about a thousand views. And not a single bid.

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

POLITICS AND CURRENT AFFAIRS:

October 10 — Staff at one of China’s best known energy companies, Hanergy (汉能 hàn néng), staged protests in Beijing last month over months of unpaid wages and social insurance contributions.

White collar staff at two Hanergy subsidiaries, the Mobile Energy Group and the Thin Film Power Group, said they had not been paid since July. The company has also been laying off personnel, they said: “There were more than one hundred staff in my department when I joined in June, but one third of them have now left.”

One country that appears to have been influenced by China’s economic model is Ethiopia. Although multiparty democracy is practised in the country, Prime Minister Abiy Ahmed and his ruling Ethiopian People’s Revolutionary Democratic Front have used Beijing-style state-controlled capitalism — like shielding key industries such as banking and telecommunications from external competition — to drive economic growth.

Chinese Communist Party appears to have “superuser” access to all the data on more than 100 million cellphones, owing to a back door in a propaganda app that the government has been promoting aggressively this year.

 An examination of the coding of the app used by phones running the Android operating system shows it enables authorities to retrieve messages and photos from users’ phones, browse their contacts and Internet history, and activate an audio recorder inside the devices.

SOCIETY AND CULTURE:

  • Fashion
    Your attention, please / Neocha
    “Whether we’re broadcasting on social media or captured by closed-circuit cameras, we’re always being watched. How do we act when we know there’s always an audience?
    This is the theme of RECONSCIOUS, the SS20 collection from fashion designer Ximon Lee, released under his eponymous fashion label.”

  • Animation and domestic violence
    Video: Tuzi / Neocha
    A seven-minute-long film by China Academy of Art that examines domestic violence through “scathing sarcasm and dark undertones.”


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