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Get ready for Beijing bitcoin


Dear Access member,

Our word of the day is cryptocurrency (加密电子货币 jiāmì diànzǐ huòbì, which is literally “encrypted electronic currency”).

Want to read something on SupChina? Here’s one of our best today: China’s longest-surviving — and very illegal — LGBT magazine

—Jeremy Goldkorn, Editor-in-Chief


1. Will cryptocurrency from Beijing revolutionize global money?

Xinhua reports that the National People’s Congress (NPC) “on Saturday voted to adopt a national law on cryptography,” to take effect January 1, 2020. It “encourages and supports the research and application of the science and technology in cryptography and protects the intellectual property rights in cryptography.” Cybersecurity is one reason for the new law, but there’s another one:

One of the applications of cryptography is bitcoin and other cryptocurrencies, which were the subject of appeal from Xí Jìnpíng 习近平 last week “for greater urgency in the development of blockchain technology.” This is not a new interest: At the Two Sessions political gathering earlier this year, blockchain was what Quartz called (porous paywall) “a surprisingly hot topic.” 

The biggest blockchain project in the world? Today, veteran official Huáng Qífān 黄奇帆 gave a speech that provided details of a future digital currency issued by the People’s Bank of China (PBOC), the country’s central bank. Investor Matthew Graham tweeted a video and summary of the speech: 

The People’s Bank of China has been studying DCEP (central bank digital currency) for five or six years and it is maturing. The PBOC is likely to be the first central bank in the world to introduce digital currency.

He criticized some enterprises of trying to “challenge sovereign currencies” by issuing Bitcoin and Libra. Currencies based on blockchain are separated from sovereign credit and so may affect “value stability” and wealth formation in a society. 

He said, “I don’t believe Libra will succeed. For sovereign countries, the best way to implement currency distribution rights is to issue sovereign digital currencies by the government and the central bank.”

He said the significance of DCEP is that it is not a digitization of the existing currency, but an alternative to M0 (cash in circulation). He believes that “the SWIFT and CHIPS systems relying on slow technology updates and difficult security guarantees have no future.” 

Further reporting: 

2. Party plenary begins, rumors fly

Without providing any detail at all, Xinhua News Agency notes (English, Chinese): 

The 19th Central Committee of the Communist Party of China (CPC) started its fourth plenary session in Beijing on Monday.

 Xí Jìnpíng 习近平, general secretary of the CPC Central Committee, delivered a work report on behalf of the Political Bureau of the CPC Central Committee and explained a draft document of the CPC Central Committee’s decision on some major issues concerning how to uphold and improve the system of socialism with Chinese characteristics and advance the modernization of China’s system and capacity for governance.

We have no idea what is going on behind closed doors this week, but that does not stop the speculation. Per Nikkei Asian Review (porous paywall):

The Hong Kong newspaper Ming Pao reported on speculation that Chén Mǐn’ěr 陈敏尔, the party secretary for Chongqing, and Vice Premier Hú Chūnhuá 胡春华 — both of whom are on the 25-member Politburo Central Committee — may be promoted to the standing committee. Reports suggest the committee may be expanded to nine members from seven.

Other Chinese media outlets cite speculation that only Chen may be promoted to the standing committee. Both men were born in the 1960s and are seen as part of the post-Xi generation.

Context:

3. Uyghur deportations in Gambia and Egypt

BuzzFeed journalist Megha Rajagopalan on Twitter:

Happening now: 3 Uyghurs including a 12 year old boy say they were detained at an airport in Gambia and face deportation to China, where more than a million Turkic Muslims like them are being held in camps. A video they took [was] shared by Uighur activists on Facebook.

Radio Free Asia reports

A Uyghur man sent back to Cairo this week after trying to enter Saudi Arabia has disappeared in Egyptian custody, amid fears he may now be forcibly returned to China, family members say…

Beginning in early July 2017, more than 200 Uyghurs, many of them religious students…were detained in Egypt after being rounded up in restaurants or at their homes, with others seized at airports as they tried to flee to safer countries…Dozens were then deported back to Xinjiang.

Other news of Xinjiang:

Al Jazeera has rebroadcast a 45-minute documentary produced by Australian ABC about exiled Uyghurs in that country, and the system of internment camps, cultural destruction, and surveillance their relatives face at home. 

Serikjan Bilash is an activist living in Almaty, Kazakhstan, who since 2017 “has publicized thousands of accounts of ethnic Kazakhs who are among the primarily Muslim minorities rounded up in detention centers in Xinjiang.” Now NPR reports that the Kazakh government has banned him from political activism for seven years for the charge of “inciting ethnic tensions”:

“I can work as a taxi driver. I can work as a cleaner or a barman. But I cannot work as a political person,” says Bilash, a Kazakh citizen born in China. “I can’t stand up, and I can’t speak openly to my nation. They closed my mouth.” 

…China is Kazakhstan’s second-largest trading partner.

4. U.K. truck death victims not Chinese? 

The South China Morning Post reports:

The majority of the 39 people found dead in the back of a truck near London were likely from Vietnam…

Beijing said it could not yet confirm the victims’ nationalities or identities. There was speculation circulating online in Vietnam that the victims may have been travelling on false China passports.

5. Nothingburger trade deal close to signing

On Friday, Reuters reported:

U.S. and Chinese officials are “close to finalizing” some parts of a trade agreement after high-level telephone discussions on Friday, the U.S. Trade Representative’s office and China’s Commerce Ministry said, with talks to continue.

Today, Donald Trump said “he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing,” according to Reuters

So what’s in the phase one deal? Not much. Bloomberg has a summary (porous paywall), which we further summarize here: 

  • “A pause in the tariff escalation, but not an end of them.”

  • “Concessions on intellectual property,” but these “are largely actions China has taken already.”

  • Mutual commitment “not to manipulate currency markets for economic advantage [which] may lead to the U.S. removing the ‘currency manipulator’ label it slapped on China in August.”

  • Purchases of American soybeans and pork

The deal does NOT include changes to China’s economic model or industrial policies like Made in China 2025, relief for Huawei or other Chinese firms that have been blacklisted recently, or any indication of how the two countries plan to move forward after phase one. 

Other news of the fraught trans-Pacific relationship: 

“The Thrift Savings Plan is the retirement savings vehicle for federal government employees, including lawmakers, White House officials and members of the military,” reports the New York Times (porous paywall):

Beginning next year, the fund is scheduled to switch to a different mix of investments that would increase its exposure to China and other emerging markets. Lawmakers and some in the Trump administration are trying to stop that move, saying the change would pump federal workers’ savings into companies that could undermine American national security or have been sanctioned by the United States.

The Trump administration is considering blacklisting Chinese companies “that repeatedly steal U.S. intellectual property,” says the Washington Post.

“The United States rejected China’s request on Monday for $2.4 billion in compensatory sanctions for alleged U.S. failure to comply with a World Trade Organization (WTO) ruling, sending it to arbitration,” reports Reuters.

“China has stepped up its charm offensive to attract U.S. and other foreign companies in recent weeks, seeking to offset the debilitating impact of the trade war while still exchanging blistering comments with Washington,” according to the Wall Street Journal (paywall). 

—Jeremy Goldkorn


BUSINESS AND TECHNOLOGY:

This year’s Alibaba ’s Singles’ Day countdown gala will be headlined by the singer Taylor Swift, the tech giant has announced, and will once again be held at Shanghai’s Mercedes-Benz Arena…

Last year’s Singles’ Day gross merchandise volume reached $30.8 billion outstripping the online revenues Thanksgiving Day, Black Friday to Cyber Monday combined.

  • Big pharma seeks Beijing bonanza
    Big Pharma is on a quest to ramp up sales in China / Bloomberg (porous paywall)
    Despite the government’s efforts to reduce drug prices in China, “Foreign drugmakers bet they can keep growing by helping revamp the nation’s health-care systems, creating new customers along the way.”

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

This world-renowned forest reserve, called the Atewa, is the source of three major rivers that provide water to 5 million people. It is also home to an estimated 165 million tons of bauxite, a sedimentary rock used to create aluminum products such as aircraft parts, kitchen utensils and beer cans.

The United Nations has a straightforward solution to the illegal fishing that is decimating marine life and pushing some species toward extinction: close the world’s ports to vessels engaged in the $23 billion black market. Deprived of safe harbours to offload their illicit cargo, the economic incentive to plunder the seas would begin to evaporate. 

Animal protection groups in China have expressed sadness and disappointment about the arrival of some 30 baby African elephants from Zimbabwe, in a case that has caused outrage among global wildlife campaigners.

POLITICS AND CURRENT AFFAIRS:

SOCIETY AND CULTURE:

The vast chasm between [40-year-old gay artist] Ming’s work and the images shown in state media perfectly illustrates a heated debate in China about what constitutes the image of the “ideal man.”

It’s a conversation unfolding as the ruling Communist Party’s cultural czars tighten their grip over the country’s creative sector by, among much else, regulating the on-air appearances of male celebrities, from movie stars to boyband members.


FEATURED ON SUPCHINA

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China’s longest-surviving — and very illegal — LGBT magazine

Beijing-based GS began as a listings and lifestyle magazine geared toward the gay community before evolving into a respected outlet for commentary and long-form journalism, dedicated to recording landmark events for the Chinese LGBT community. Twelve years later, amid a tightening media environment, it is the longest-running queer print publication in the country, and believed by many to be the last one standing.

No one has destroyed Chinese culture quite like the Chinese

Cultural iconoclasm in China — the deliberate disavowal and repudiation of cultural traditions, attacks on the Confucian family system, attacks on classical Chinese, efforts to promote a single, modern, vernacular Chinese — began long before the Cultural Revolution, long before the Communist Party took power, even before the Communist Party’s founding in 1921.

Friday Song: Hang on the Box took Beijing punk international

Twenty years ago, Wáng Yuè 王悦, Yilinna 隐退 (Yǐntuì), and Yáng Fān 扬帆 of the band Hang on the Box made the Beijing punk scene an international topic, posing in Tiananmen Square for a February 1999 cover of the American magazine Newsweek.  

Sponsored: Children of China Pediatrics Foundation: Raising the bar on disability awareness and philanthropy

The Children of China Pediatrics Foundation (CCPF) provides care for children with disabilities in China’s orphanages by providing exceptional multi-specialty medical treatment and hands-on training and medical education for providers and caregivers. As a not-for-profit, non-partisan organization, CCPF sends all-volunteer pediatric medical teams from the United States to China to perform surgeries on orphans to correct disfiguring birth defects and disabilities, and to share medical information, surgical techniques, and hands-on training in rehabilitation with Chinese colleagues and orphanage caregivers.

A Chinese ecommerce divorce saga turns ugly

Li Guoqing and Yu Yu, the co-founders of Dangdang.com, one of China’s most popular ecommerce sites, are embroiled in an ugly divorce saga that reached new heights last week.  


SINICA PODCAST NETWORK

Sinica Early Access: Jerome Cohen on the Hong Kong protests and the law

In this live show taped at New York University on October 16, Jeremy and Kaiser spoke with Jerry Cohen, the doyen of American studies of Chinese law. We explore the legal foundations for the Hong Kong handover in 1997, and how imprecision has contributed to many of the difficulties playing out in Hong Kong’s streets today.

  • 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. 

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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.