Links for Wednesday, June 3, 2020

BUSINESS AND TECHNOLOGY:

• Business resumption nearing 88%
  Getting China back to work / Trivium China
  According to a June 1 update of the Trivium business activity indexes, work resumption is between 87% and 88% for large, medium, and small enterprises in China. But as Trivium comments in its daily newsletter, “China’s economy will not see a return to normalcy until the global pandemic is completely over…so don’t hold your breath.”
• Beijing to provide direct stimulus funding to local governments…  
  China to bypass provinces with direct payments to cash-strapped local governments, but revenue problems remain / SCMP

China is planning to channel much of its stimulus funding directly to cash-strapped city and county governments [rather than provincial governments, who typically distribute funds to local governments in their jurisdictions] to help revive the economy, a move that highlights the long-standing tax and spending problems between Beijing and local governments.

Beijing will create a special central transfer mechanism to direct 2 trillion yuan ($281.2 billion) — 1 trillion yuan from the central government budget and 1 trillion yuan in special off-budget treasury bonds — to local governments to provide them with working capital.

• …As China’s central bank ups its lending to small businesses
  Central bank boosts financing for coronavirus-hit businesses / Caixin (paywall)

The People’s Bank of China (PBOC) and the Ministry of Finance have set up a special purpose vehicle (SPV) to channel as much as 440 billion yuan ($62 billion) of funds to regional banks so that they can provide new loans or roll over maturing loans to small businesses, including those impacted by the Covid-19 outbreak, Deputy Governor Pān Gōngshèng 潘功胜 said (in Chinese) at a briefing on Tuesday to explain what the central bank described as two “new monetary policy tools” announced the previous day.

• China’s demand for oil returns
  China drives global oil demand recovery out of coronavirus collapse / Reuters
  “China’s oil demand has recovered to more than 90% of the levels seen before the coronavirus pandemic struck early this year, a surprisingly robust rebound that could be mirrored elsewhere in the third quarter as more countries emerge from lockdowns.”
• How consistent is China’s corporate social blacklist?
  How Chinese companies are getting off social credit blacklists / Sixth Tone
  “China has created a social credit system that punishes businesses for bad behavior. But for some firms, escaping the dreaded blacklist is surprisingly easy.”
• Video platform iQiyi loses court battle
  Court rules against iQiyi for charging premium subscribers extra / Sixth Tone

The Beijing Internet Court ruled against iQiyi on Tuesday after the Chinese streaming giant charged additional fees to premium customers for complete access to an advance screening of a television drama, domestic media reported [in Chinese].

The court ordered [in Chinese] the company to pay 1,500 yuan ($210) in legal fees, in accordance with the plaintiff’s demands, and added that the company had “harmed the interests” of the premium subscriber.

• VIDEO: U.S. bill to delist Chinese firms “sensible”
  SEC Chief Clayton says bill to delist China firms ‘sensible’ / Bloomberg
  “U.S. Securities and Exchange Commission Chairman Jay Clayton discusses a bill passed by the Senate last month that would bar that could lead to the delisting of Chinese companies from U.S. stock exchanges.”
  See SupChina for context: New U.S. regulations may send Chinese IPOs to other markets.
• U.S. IPO plans
  Chinese online grocery operation Dada seeks $280 million in U.S. IPO / Caixin
  China’s Tesla challenger Xpeng said to be preparing for U.S. listing as country’s EV industry fights slowdown / SCMP
  China-owned Playtika hires banks for $1 billion U.S. IPO — sources / Reuters
• China trials real estate investment trusts
  China takes first steps toward launching $3 trillion REIT market / Bloomberg (porous paywall)

China kicked off a REIT trial [paywall] in late April that will initially focus around pooling capital to fund infrastructure projects like highways and airports. If successful, the program may be expanded to include traditional real estate, exposing individual investors to a market Goldman Sachs Group Inc. estimates could one day be worth as much as $3 trillion.

• BYD gets extension on California mask deal
  China’s BYD gets extension on $1 billion California mask deal / WSJ (paywall)
  “BYD Co., a Chinese electric-car maker turned mask producer, said it had secured a second reprieve on a troubled $1 billion deal to sell N95 masks to the state of California after missing a Sunday deadline to win a required federal certification.”
  Context: Carmaker BYD to repay California $247 million for missing medical supply deadline.
• China lets tariff on sugar imports lapse
  China’s sugar industry ‘panics’ as Beijing removes protective tariff in a bid to plug shortage / SCMP
  “China has ignored its own sugar industry’s pleas for protection after allowing a safeguard tariff on sugar imports to lapse, a move that was welcomed by some of the world’s major producing nations, including Brazil and Australia.”
• App that Indians were using to boycott Chinese apps removed…  
  Google removes app that claimed to detect Chinese apps on Indian phones / CNN
  “‘Remove China Apps’ was not available on the Google Play Store on Wednesday, a little over two weeks after it launched with the assurance that it could help Indians identify apps made by Chinese developers [amid rising anti-Chinese sentiment over India-China border tensions].”
  See SupChina for context: New India-China border standoff: Is it ‘stable and under control’?
• …As ByteDance expands its Indian presence
  TikTok owner ByteDance increasing Indian operations: reports / Caixin via China Film Insider
  “ByteDance is reportedly opening its second corporate entity in India to provide information technology services to all of its platforms worldwide, the latest sign that the Chinese tech unicorn is expanding its global footprint.”
• Internet writers get new contracts
  China Literature issues new contracts; writers get copyright guarantee / Yicai Global
  “China’s largest ebook platform China Literature issued a new contract to its writers today, revising more than 10 contentious articles in the previous one and offering several alternatives on revenue sharing.”
  See SupChina for context: Internet writers protest what they call unfair contracts with Tencent company.
• New fintech trial projects announced
  China to trial 11 new fintech projects in ‘regulatory sandbox’ / Caixin

China’s central bank has announced the second batch (link in Chinese) of fintech projects to be included in a pilot program for trialing new regulations in the capital Beijing that aims to encourage innovation in the financial technology industry…

In the second batch, the central bank is set to introduce 11 new projects in businesses such as banking, insurance and online payments.

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• China plans to build a space station in orbit…  
  China outlines ambitious plan to build space station in orbit / Axios
  “China plans to launch the first module of its new space station next year, with a total of 11 launches needed to complete the station by 2023, according to a report from SpaceNews.”
• …As Bilibili prepares to launch a satellite  
  Bilibili to launch satellite for science education content / Caixin
  “China’s popular video streaming platform Bilibili plans to launch a remote sensing satellite in late June for the production of science education content, the company said Monday.”
• Air pollution returns to pre-COVID-19 levels
  Air pollution in China back to pre-COVID levels and Europe may follow / Guardian

Data from the Centre for Research on Energy and Clean Air (Crea) shows concentrations of fine particles (PM2.5) and nitrogen dioxide (NO2) across China are now at the same levels as one year earlier. At the height of the country’s coronavirus response in early March, NO2 levels were down by 38% from 2019 and levels of PM2.5 were down by 34%.        

POLITICS AND CURRENT AFFAIRS:

• A more detailed review of Chinese coverage of U.S. protests
  Is China reveling in U.S. woes? / China Media Project
  David Bandurski finds that outside of social media and nationalistic outlets like the Global Times, there was “understated treatment of the U.S. protests in party-state newspapers and on principal websites.” Chinese media as a whole did attempt to “undermine U.S. credibility on human rights and basic freedoms” and “emphasize China’s international solidarity and ostensibly shared values,” but not every state media outlet carried commentaries on or even basic coverage of the protests.
  Context on SupChina: Beijing revels in scenes of U.S. unrest.
• Updates on China-India border conflict
  PLA holds high altitude exercise as China-India border tensions continue / SCMP
  “Chinese troops in Tibet held an infiltration exercise to test their combat readiness at night in a high altitude area, amid border tensions between China and India.”
  Covid-19 delayed Indian exercise, Chinese moved into key positions / Economic Times of India
  “Sources said internal [Indian] estimate of Chinese strength at Galwan was 3,400 troops, while 3,600 have built up at the Pangong Tso lake.”
  India, China commanders meet / The Tribune India
  “In an attempt to ease tension in two disputed areas along the Line of Actual Control (LAC) in eastern Ladakh, the Commander of the Leh-based 14 Corps of the Indian Army is scheduled to meet his Chinese equivalent at Chushul-Moldo on June 6.”
  U.S. rebukes China for border ‘aggression’ with India / Reuters
  No need for U.S. intervention, says China on border row / The Hindu
  Context on SupChina: New India-China border standoff: Is it ‘stable and under control’?
• Foreign NGOs are MIA
  No foreign NGO representative offices registered in May / ChinaFile
  “The current lack of registrations may be due to the outbreak spreading globally, shuttering non-profit offices worldwide and slowing any registration applications in process.”
• Hongkongers don’t let police ban quash spirits…
  Hong Kong’s Tiananmen vigil has been banned, but the city’s spirit of commemoration for June 4th shines on / SCMP
  “When the Communist Party tried everything to obliterate the memory of the crackdown, candles in Hong Kong’s Victoria Park continued to be held up, and comforted sufferers. It is so precious that no other commemoration can replace it.”
  HKFP guide to Hong Kong’s Tiananmen Massacre commemorations, as police ban annual vigil / HKFP
  “The Alliance — the annual vigil organizer — said they will nevertheless go to Victoria Park in groups of eight, in accordance with disease control regulations which prohibit public gatherings of more than eight people.”
• …And the EU echoes their sentiments
  Hong Kong must be free to mark Tiananmen crackdown, EU says / Reuters
  “China must allow the people of Hong Kong and Macau to commemorate the bloody 1989 Tiananmen Square crackdown on pro-democracy demonstrators in Beijing, the European Union said on Wednesday.”
• Taiwan calls on China to apologize for Tiananmen crackdown
  Taiwan calls on China to apologize for Tiananmen crackdown, Beijing cries ‘nonsense’ / Reuters
  “China should ‘reassess the historical facts about the June 4 incident and sincerely apologize,’ the China-policy making Mainland Affairs Council said.”
• U.S. criticism of China’s maritime claims
  South China Sea: United States urges United Nations to reject China’s claims / SCMP
  “‘[And] as those claims purport to unlawfully interfere with the rights and freedoms enjoyed by the United States and all other States, the United States considers it essential to reiterate its formal protests of these unlawful assertions and describe the relevant international law of the sea as reflected in the convention,’ the letter [from U.S. ambassador to the UN, Kelly Craft] said.”
• China’s secret naval port in Pakistan
  China building high-security compound at Gwadar to establish naval base / Times of India
  “China is secretly building a high-security compound near Gwadar Port in Pakistan’s Balochistan Province, which it will probably use [as a] naval base.”
• Huawei hid links to Iran after leaks started
  Huawei hid business operation in Iran after Reuters reported links to CFO / Reuters
  “China’s Huawei Technologies acted to cover up its relationship with a firm that had tried to sell prohibited U.S. computer gear to Iran, after Reuters in 2013 reported deep links between the firm and the telecom-equipment giant’s chief financial officer.”
• Former Australian PM defends student protester
  Kevin Rudd accuses UQ of appearing to ‘bend the knee to Beijing’ / Brisbane Times

“[Queensland University chancellor] Varghese has boasted he has the experience to handle the complexity of the university’s China relationship given his background as a senior Australian diplomat.

“Instead, the university is now seen around Australia and the world as bending the knee to Beijing, rather than just dealing with a badly behaved undergraduate.”

• Decentralization may be necessary for Hong Kong protesters
  How to keep up the fight for Hong Kong? Be as decentralized as possible. / Apple Daily
  “When the Hong Kong government uses the coronavirus to impose a social gathering ban, Hongkongers should particularly adopt decentralized ‘stay-at-home’ tactics.”

SOCIETY AND CULTURE:

• Taiwan pop sensation joins Kuaishou
  Taiwan pop star Jay Chou debuts on mainland social media / Caixin Global
  “On June 1, Taiwan pop sensation Jay Chou (周杰倫 Zhōu Jiélún) launched his first official account on a Chinese mainland social media app, choosing video-sharing app Kuaishou.”
• 13-year-old censored for bullying his teachers
  Authorities request ‘positive energy’ from cheeky student vlogger / Sixth Tone
  “An education bureau in northeastern China has confirmed that a school in Hegang asked one of its students to delete online videos in which he poked fun at teachers.”
• Are Wuhan’s punk venues in their death throes?
  Can Wuhan’s punk scene survive the coronavirus? / The Diplomat (porous paywall)
  “Before social distancing, self quarantining, and the city of Wuhan becoming part of everyday discourse worldwide, Li Ke made his living compelling that central Chinese city’s punks to crowd surf and mosh.”
• COVID-19 exacerbates education inequality
  How coronavirus could deepen China’s gap between urban and rural education / Caixin (paywall)
• Beijing’s license plate lottery reform
  Families jump the queue for Beijing car license plates, setting off debate / Caixin
  “A complex formula assigns a number to each family based on the number of family members and the length of time each individual has been waiting in the lottery pool.”
• China looks to street food for an economic boost
  Good news for street vendors and lovers of street food / Caixin
  “During a press conference Chinese Premier Lǐ Kèqiáng 李克强 praised the example of Chengdu, which generated 100,000 jobs overnight by setting up 36,000 street vending units.”