There are a few things I wanted to comment on today and decided it was easier to embed them below. You will find more thoughts from me in items 4: Aggressive diplomacy and disinformation; 5. The tragedy of Ren Zhiqiang and 6. US-China, with a comment specifically on the tit-for-tat around journalists.
The latest PMI data were better expected but do not signal things are anywhere close to back to normal, just that things are better than were in February. We should all be concerned by how slow the PRC economy is to return to normal, and how worried officials are about a second wave of infections. Why would that only happen in China?
Thanks for reading.
The Essential Eight
1. The economy
China’s official manufacturing purchasing managers index jumped to a reading of 52.0 in March from a record low of 35.7 in February, the National Bureau of Statistics said Tuesday.
The result was higher than the median forecast of a 51.5 reading by economists surveyed by The Wall Street Journal. Readings above 50 indicate expansion, while those below 50 signal contraction.
A separate nonmanufacturing PMI, also released Tuesday, showed service and construction activity similarly rebounding in March to 52.3 from 29.6 in February…
The data released Tuesday hinted at some of the pain still to come. The manufacturing PMI’s subindex for new export orders, while rising to 46.4 in March from 28.7 in February, remained in contraction territory, though the subindex measuring factory production climbed to 54.1 from 27.8 in the previous month.
The key point here is not that PMI is not an absolute figure such as GDP, but an indication about the economy’s direction of travel. Specifically, whether activity is improving or declining.
Of course, we can infer that in a quarter where all the PMIs are way above 50, we are likely to see strong GDP growth. But the seesawing that we are seeing in China right now does not imply anything other than a very sharp contraction in output in the quarter. It’s worth remembering too that a reading of 52 after such a dismal month is hardly spectacular. It just means that activity for some fortunate firms is on the mend…
Things are better relative to last month, but last month was awful. So things are still not great.
Comment: anyone say “green shoots”?
China will further support its small and medium-sized enterprises (SMEs) to mitigate the impact of the COVID-19 epidemic while increasing local government bond issuance to shore up effective investment, according to a State Council executive meeting Tuesday.
The meeting, presided over by Premier Li Keqiang, decided that the re-lending and re-discount quota for small and medium-sized banks will be expanded by 1 trillion yuan (about 141 billion U.S. dollars).
The country will further implement the reserve requirement ratio cuts for small and medium-sized banks and guide them to offer loans to SMEs at favorable interest rates, the meeting said…
The meeting stressed efforts to enhance support to people on low incomes, especially those in difficult circumstances, and decided to raise certain subsidy standards and expand the coverage of subsistence allowances and other relief policies to help those affected by the epidemic.
China will also extend subsidies and tax exemptions for new energy vehicle purchases by another two years in a bid to boost auto consumption, the meeting decided.
Comment: Interesting that there are growing numbers of economists calling for the government to give cash to people directly. That would certainly help avoid some of the crazy kleptocracy of the 2008-9 stimulus, but how much would people actually spend vs just save? – China Should Just Give Its People Cash, Experts Say – Caixin
Other countries including the U.S. have offered cash subsidies to individuals and families affected by the epidemic, and some economists suggest China follow suit. Gan Li, an economics professor at the Southwestern University of Finance and Economics, has called for the government to provide a one-time cash transfer to low-income people to help tide them over and stabilize consumption. Gan suggests the subsidy cover some 176 million people at a cost of 286 billion yuan ($40.3 billion), raised by issuing special-purpose sovereign bonds…
Yu Jiantuo, a deputy secretary-general of the China Development Research Foundation, said in a Caixin article (救助困难人群：要现金不要消费券) that direct cash transfers are a more effective solution than the consumption vouchers issued by some local governments to boost spending in hard-hit sectors like tourism and catering. He said what individuals and families affected by the epidemic need now is cash.
The revival on the ground has been more tepid, prompting an influential Chinese economist to call for more direct stimulus such as the cash handouts employed by Hong Kong.
“We believe that the most direct way to stimulate consumption potential is to subsidize low-income groups through tax cuts and subsidies,” Liu Qiao, the dean of Peking University’s Guanghua School of Management wrote online.
Beijing has made it a policy priority to bring down credit growth. Thus, if Xi Jinping, China’s president, was now to decree a large credit-fuelled stimulus it would amount to tearing up a fundamental principle in the economic playbook. Statements from other officials also seem to indicate little appetite for a massive stimulus. Li Keqiang, premier, was quoted by the official media in March as saying: “variations in economic growth do not matter that much, as long as employment stabilises this year”.
Over 95% of industrial companies in Hubei province with an annual major business revenue of at least 20 million yuan ($2.8 million) have resumed work, Xin Guobin, a deputy minister at the Ministry of Industry and Information Technology, said at a briefing on Monday. On average, 70% of these companies’ staff have returned to work.
Liang Zhifeng, another official from the ministry, said that as of Sunday, 76.8% of small and midsize companies across China had resumed work.
“China can hardly achieve the 6 per cent target because of the coronavirus pandemic,” Ma Jun, an academic member of the People’s Bank of China’s monetary policy committee, told the state-owned Economic Daily 【马骏：建议中国今年不再设定GDP增长目标].
“It is also hard to maintain 4-5 per cent growth … because it will largely depend on how the pandemic develops in Europe and the United States.”
Xi Jinping is in an inspection tour in eastern China’s Zhejiang Province on the resumption of work and production. It highlights the importance of economic and ecological development as the country has generally contained the coronavirus outbreak within its territory.
Xi visited an industrial park and met with representatives of small and medium-sized enterprises (SMEs) returning to work, and toured a mountainous village where he put forward the concept that “lucid waters and lush mountains are invaluable assets.” Fifteen years ago, when he was the Party chief of Zhejiang.
Xi’s inspection tour promotes high-quality, inclusive and coordinated development, which projects stability into a vulnerable global economy when confidence is in urgent need…
Compared with many advanced economies that are faced with risks of negative interest rates and running out of ammunition, China has more ample room for policy adjustment on monetary and fiscal fronts…
Different from past experiences featuring flood-like stimulus, China has shifted to a more nuanced, precise and targeted approach to bolster the economy.
Former Chongqing mayor Huang Qifan wrote that, the global virus outbreak could be a “once in a century” opportunity for Chinese economy. He argues that given the stimulus policies rolled out by different countries and given that China is the only country that is able to resume production and has a rather complete cluster of industries, he expects more money around the world will flow into Chinese manufacturing. This will help China further complete its own supply chain and build up its financial market.
2. The outbreak
The National Health Commission received reports of 48 new confirmed cases on the mainland on Monday, all of which were imported.
By the end of Monday, 771 imported cases had been reported, said the commission.
The commission added that it already requires local health workers to report these cases through the central communicable disease report system.
The National Health Commission said that as of Monday, there were 1,541 asymptomatic carriers under medical observation on mainland China, including 205 imported cases…
Classified Chinese government data previously seen by the South China Morning Post has suggested the proportion of silent carriers could be as high as one-third of those who test positive.
A total of 1,541 asymptomatic patients infected with COVID-19 have been put under medical observation in China by the end of Monday, including 205 imported cases, according to the National Health Commission Tuesday.
A previous study showed that the viral load in samples from asymptomatic infected patients is not much different from that of confirmed cases, the commission said in an online article.
Symptom-free individuals infected with COVID-19 may lead to further spreading of the disease, but the infectivity of asymptomatic cases is still unclear, the article said.
China’s national college entrance examination has been postponed to July 7-8 due to the coronavirus outbreak, the Ministry of Education said on Tuesday.
The World Health Organization (WHO) has not shared with member states information Taiwan has provided on the coronavirus including details on its cases and prevention methods, Taiwan’s Foreign Ministry said on Monday, ratcheting up its complaints.
Laoshan community of Shijingshan district uses an intelligent doorbell with a monitoring function to ensure strict enforcement of home isolation.
Developed by Xiaomi Technology, a palm-sized smart doorbell was installed on Hubei returnee Lu’s door by a community worker surnamed Liu.
The neighborhood committee began as urban grassroots civil organizations in the 1950s. They are the lowest level of governance in charge of civil affairs…
Some Western media claim China’s grid management system and neighborhood committees are the state’s presence in residential life and a measure of the Communist Party of China’s control over people. This stereotyped view of China’s grassroots governance is misinterpretation at best, and reflects their lack of willingness to adhere to their governments’ anti-virus measures.
China’s political mechanism, which doesn’t indulge in partisan struggles, has the ability to vitalize even the smallest local community to contribute to the greater cause of the nation.
Central China’s Hunan Province, neighboring the former coronavirus epicenter of Hubei Province, further downgraded its emergency response toward the COVID-19 outbreak from the second level to the third level Tuesday, according to the provincial health commission.
The first stage clinical trial for the vaccine was started in Wuhan on March 16 after authorities approved. It has been proceeding smoothly, and its results will be published in April, said Chen Wei, a member of the Chinese Academy of Engineering. Wuhan is the Chinese city that was hardest hit by COVID-19.
“If the initial results prove the vaccine is safe and produces (desired) effects, we will continue to test its effectiveness overseas through international cooperation if the global epidemic continues to spread,” she said.
In an email interview with Caixin on completion of her personal narrative, Fang Fang voiced her opinions on the outbreak, what it was like to live through the lockdown, and the long-term effects the city may suffer…
What the lockdown changed was people’s minds. Seeing how devastating it has been to Wuhan residents made us very angry and very sad. I don’t know whether those who passed away will have died in vain after the epidemic is over. I’m very worried those who are still alive will end up ignoring why the dead died.
What saddened you the most throughout the epidemic? What were you most angry about? And what touched you the most?
The saddest thing was the death, for sure. The death of your acquaintances, your schoolmates. And knowing the despair of people who were seeking medical treatment even though you could not offer help was really sad, too. What made me most furious was the delay of nearly 20 days in the outbreak’s early stages that caused such a serious and chaotic situation later on — it was a man-made catastrophe. The most touching thing, of course, was the fearlessness of medical workers, and also the endurance of the people of Wuhan and their deep affection for ordinary people like Li Wenliang
3. Foreign outreach
The Group of 20 (G20) economies should work together to ensure stability in global industrial and supply chains, said Minister of Commerce Zhong Shan Monday.
All parties should actively take measures such as reducing or removing tariffs, eliminating trade barriers and facilitating unfettered trade, Zhong said at a video conference on COVID-19 control attended by G20 trade and investment ministers.
Zhong suggested the G20 economies should step up international cooperation on disease prevention and control supplies and protect the life and safety of people and medical workers in all countries.
Chinese officials, including President Xi, have kept in close contact with European leaders over cooperation in the fight against the pandemic. In terms of trade, Zhong has also held phone conversations with European trade officials, including Trade Commissioner Phil Hogan and British Secretary of State for International Trade Elizabeth Truss.
In those phone calls, Zhong also conveyed similar messages — that China was willing to cooperate in opposing trade unilateralism and protectionism and protect the multilateral trade systems. In the call with Hogan and EU Commissioner for Internal Market and Services Thierry Breton, Zhong also spoke of cooperation with the EU to push forward “various trade reforms.”
Now so many days have passed, and some in the US still claim China should be held responsible for the COVID-19 in the US. Don’t they feel guilty or ashamed? They are trying to shift the biggest blame of the century to China and make it the biggest scapegoat. However, such an attempt is just impossible as the blame is too heavy to be shifted. Sorry, it won’t work.
The pandemic is in some way like a magical mirror that exposes a person’s morality and character to the fullest extent. The virus knows no ideology, border or race. The destinies of all countries are closely intertwined. No one can make up for lost time by slandering others or shifting the blame. The only way to defeat the virus is through solidarity and cooperation…
After the outbreak, China has been racing against time to fight the virus and contain its spread. Even as we speak, many Chinese businesses are working around the clock to produce medical supplies and reinforce other countries’ combat. We don’t have the interest or the time to launch any despicable “disinformation campaign”.
Hua’s transcript in Chinese – 外交部：中方无心、无暇也不屑于发起所谓“虚假信息运动”–国际–人民网
China has more than 20 mechanical ventilator manufacturers, and eight have received CE certification on their products, which allows them to be sold in the European Economic Area. Those eight firms combined make 2,200 machines each week — one-fifth of the world’s total output — according to MIIT.
Dr. Ng Eng Hen said that China has achieved positive results in response to the COVID-19 under the strong leadership of President Xi Jinping, and Singapore extends the congratulations to China. Facts have proved that China’s prevention and control measures are completely correct. Singapore’s Defense Minister also hopes that China will continue to play an active role in regional epidemic prevention and control cooperation.
Accusing China of spreading disinformation about the coronavirus pandemic runs counter to common sense. As early as at the start of January, China had notified the WHO and relevant countries of the epidemic, but all sides including China lacked awareness of the severity of the coronavirus at that time…
China is no longer a country that can be bullied by foreigners. Some US and British politicians might still linger in a dream of the good old days.
Some Westerners are stubbornly against the world’s solidarity in battling the pandemic. They will be more disgusting to the international community as the fight becomes fiercer. China should counterattack their vicious rhetoric but should not be distracted by them. As long as China focuses on morality and justice, comprehensively aiding other countries’ fight against the pandemic, those filthy politicians will never be able to blot out China’s sacrifice, contributions, and achievements in this crucial battle.
The Chinese version – 社评：美英政客这一次带不动世界的节奏
The minister’s comment came as China is supporting the Iraqi authorities in facing the COVID-19, at a time when Iraq is suffering from weak health system after years of conflicts and chaos following the U.S.-led invasion in 2003.
A Chinese team of seven experts has been working with their Iraqi counterparts since March 7 in the country.
The traditional China-Algeria friendship is profound, Li said, noting that Algeria donated urgently needed medical supplies to China at the early time of its fight against the disease, which highlighted a commitment to going together through thick and thin.
“China, definitely we are going to buy … Because scaling up our domestic production will take time,” said a top Indian policy official aware of the plan, who declined to be identified due to sensitivity of the discussions.
CCTV says the medical supplies are for Chinese citizens, Chinese students and British Chinese and employees of Chinese institutions/companies 此次山东省赴英联合工作组…为英国华侨华人、中资机构人员和留学生带来首批23吨抗疫物资
4. Aggressive diplomacy and disinformation
when Zhao Lijian, a diplomat known for his pugnacious social media presence, finished a posting in Pakistan in August, he received an enthusiastic welcome in Beijing. A group of young admirers at the ministry gathered at his office to cheer his return, according to two people familiar with the matter.
That admiration was fueled in part by a Twitter spat he had engaged in a month earlier with Susan Rice, the national security adviser to former U.S. President Barack Obama. Each accused the other of being “ignorant” and a “disgrace”.
Now a foreign ministry spokesman, Zhao has come to represent a new generation of diplomatic hawks in China, challenging the restraint that long characterized the country’s engagement with the world, according to a dozen current and former ministry officials and government researchers who spoke with Reuters.
Their emergence has caused a rift with the old foreign policy establishment, amid worries that increasingly assertive rhetoric could put the country on a dangerous collision course with powers like the United States, they said.
The shift followed instructions that President Xi Jinping issued diplomats in a memo last year, calling on them to show more “fighting spirit”, said two people with direct knowledge of the matter.
Comment: Zhao Lijian clearly also has a lot of support amongst the broader public, in addition to support both within the MoFa as well as from other parts of the CCP system, and especially from the one leader who matters. Are the younger generation of PLA officers also anti-American hawks? If they are, what does that bode for the trajectory of PRC relations with the US if the rising leadership of the both diplomatic and military corps are all hawkish?
As for whether there is some kind of a split over Zhao and other more aggressive diplomats, this is what I wrote last week, and I still stand by it:
I am skeptical of claims of a meaningful split. One is certainly possible, and no doubt there are people inside the system who understand the damage Zhao is causing, but the evidence is not yet sufficient to support something more significant. Zhao appears popular among much of the Chinese public, and he has clearly answered Xi’s earlier call for more “fighting spirit” from PRC diplomats.
Inside China the Ministry of Propaganda does not appear to be pushing back on the spread of the virus origin and anti-American rumors by Zhao or others in official media and on social media. Would Wang Huning and his propaganda system allow this garbage to remain uncensored if Xi were against it?
Evidence that there is a split and that more reasonable officials are prevailing would include Zhao deleting his twitter account, censorship on domestic PRC platforms of rumors about the virus origin, and especially about a US role, and Zhao being moved to a different job.
A different scenario may be that Zhao has performed meritorious service in the global information struggle by sowing disinformation and doubt domestically and internationally about the origin of the virus and a US role in its creation. In this scenario, the relevant authorities are now adjusting the messaging to pull back from the brink and try to consolidate a desired image of China as the responsible major power and Xi as the responsible global leader who is leading the global fight against the pandemic. And perhaps a shift in tone, internationally at least, may be paving the way for improved and much-needed US-China cooperation.
the assertion that there is anything short of a leadership consensus within the Chinese Communist Party (CCP) to spread conspiracy narratives is ill-conceived. Indeed, despite a momentary turn to the language of conciliation from Zhao, what observers should be focusing on instead is the consistent core of messaging coming from all of Beijing’s official and propaganda channels, including Cui: that the question of the source of the virus is a scientific question that requires listening to scientific and expert opinions—not U.S. or other foreign officials. Not a single reputable epidemiologist has shown any evidence that the coronavirus came from anywhere else but China, and the Italian doctor whose comments were taken out of context to boost the case has publicly refuted it. Yet this is important because by permanently, or even temporarily, injecting doubt into the origins of the coronavirus through this question, Beijing hopes to escape blame for its initial cover-up of the outbreak in December and January, which cost the world precious time to rally resources and create a potentially successful containment strategy.
Chinese propaganda keeps hitting hard Italy. The Chinese communist party (CCP) mounted a huge campaign on the medical aid and teams sent to Italy in March to help fight the coronavirus. State-media and prominent Chinese political figures worked tirelessly to depict China as Italy’s savior. President Xi Jinping even announced a new “Health Silk Road” with Italy in a phone call with the Italian Prime Minister Giuseppe Conte. A move that, many observers and opposition leaders fear, might hand over the Healthcare system’s wireless network to Chinese companies.
On Twitter, the mobilization was a great success, with thousands of posts celebrating Chinese solidarity. Yet, not all of this was created by human hand. Nearly half of the tweets (46,3%) published between March 11 and 23 with the hashtag #forzaCinaeItalia (Go China, go Italy, ed.) and more than one third (37,1%) of those with the hashtag #grazieCina (thank you China, ed.) came from bots, a Social Data Intelligence analysis realized for Formiche by Alkemy SpA’s R&D Lab together with Deweave Luiss Data Lab and Catchy shows.
Italy provides the perfect environment to test Beijing’s strategy. It was the first Western country to be hit by a large coronavirus outbreak, and it is therefore urgently in need of medical supplies to support a health care system on the brink of collapse. But it’s also led by a government coalition that includes the Five Star Movement, a Euroskeptic and increasingly pro-Chinese party that has for years relentlessly promoted a stronger relationship with Beijing while downplaying the traditional trans-Atlantic alliance and fueling suspicion toward NATO. As a result, last year Italy was the first G-7 country to join the Belt and Road Initiative, China’s global infrastructure project…
Antonio Talia, a journalist and author who writes extensively about China-Italy relations, isn’t surprised by the fact that China sees Italy as an easy target for its aggressive propaganda campaign. “For a decade, the Five Star Movement has been spreading the idea that the trans-Atlantic alliance is some sort of submission to the American empire, fueling suspicion of NATO, leading their voters into believing in alternative truths, and all the while promoting the notion that there are well-functioning systems outside the Western liberal democratic framework,” Talia said.
5. The tragedy of Ren Zhiqiang
His friends say he vanished this month after writing an essay critical of the Chinese government’s response to the coronavirus outbreak. The essay, which was shared widely within private internet message groups, never named Xi Jinping, China’s top leader. But it said the actions of a power-hungry “clown” and the Communist Party’s strict limits on free speech had exacerbated the epidemic. It declared that the party should “wake up from ignorance” and oust the leaders holding it back, just as it did with the leaders known as the “Gang of Four” in 1976, ending the turmoil of the Cultural Revolution…
Like Mr. Xi, Mr. Ren was born into party royalty. His father was a deputy commerce minister…
He has been friends with Vice President Wang Qishan of China since he was in junior high. Mr. Ren wrote in his 2013 autobiography that Mr. Wang would sometimes call him late in the evening and chat for hours…
Mr. Ren hired Liu He, China’s main negotiator in the trade war with the United States, as a part-time researcher when Mr. Liu was a graduate student. Yu Zhengsheng, a former member of the party’s Politburo Standing Committee, its highest ruling body, worked with Mr. Ren when he was the construction minister and wrote the introduction of Mr. Ren’s first book in 2002…
He shared the essay with a few friends. Three days after his 69th birthday, he disappeared. His assistant and his son have disappeared, too.
Comment: Ren was part of a group of elite Beijingers who thrived in the previous Era. and his fate resonates in elite circles I think much more than Tsinghua University’s Xu Zhangrun does. His disappearance and rumored pending charges for “economic crimes”, assuming the other set of rumors that he died in detention are wrong, will not help Xi with his efforts to improve sentiment and confidence among private entrepreneurs.
If Ren does get charged with “economic crimes” one firm and its founders in particular may be concerned. Ren long had a close relationship with Zhang Xin and Pan Shiyi, and there were lots of rumors over the years about sketchy dealings between Soho China and Huayuan Real Estate Group, of which Ren was chairman.
And what does Ren’s disappearance say about Wang Qishan, who over the last few weeks has seemingly had setbacks with the demotion of Jiang Chaoliang for the Hubei epidemic disaster and the effective end of HNA?
The Secretary and the Secretary General discussed how NATO is helping to coordinate Allied responses to the COVID-19 pandemic and the importance of countering efforts by the People’s Republic of China and Russia to spread disinformation and propaganda related to the virus.
Now, all countries are trying to get a handle on how best to support our economies, while also ensuring the non-disruption of supply chains that are necessary to deliver critical medical supplies and agricultural products for citizens. Unfortunately, like others, we are learning in this crisis that over-dependence on other countries as a source of cheap medical products and supplies has created a strategic vulnerability to our economy. For the United States, we are encouraging diversification of supply chains and seeking to promote more manufacturing at home.
China’s Weibo now allow people to post “stay strong America” after the Trump-Xi phone call. The sentence was banned last week.
Evan Osnos covers the US-China relationship for the New Yorker and is the author of the National Book Award winner Age of Ambition: Chasing Fortune, Truth, and Faith in the New China. In this conversation on The Ezra Klein Show, we discuss the past, present, and future of the US-China relationship. What are the chances of armed conflict? What might deescalation look like? And we know what the US wants — what, in truth, does China want?
Covid-19 is hastening such moves. Eric Tseng, chief executive officer of Taipei-based Isaiah Research, said some companies had been holding back from making any major supply-chain decisions, waiting to see if there would be any lasting resolution to the Washington-Beijing trade spat. “But coronavirus risks people’s lives. Now A lot of companies will accelerate their departure,” he said.
QUESTION: A lot has been made over calling it the Wuhan virus, and you took issue with anybody saying sorry, we do that with a lot of other illnesses.
SECRETARY POMPEO: Yeah, President Trump was very clear. I think he even said it again this morning. Yes, he talked about it as being the Chinese coronavirus. But what we’ve been looking for here all along is we simply want to make sure we understand what’s happened so that we can prevent the loss of life moving forward. We’re looking to cooperate with every country. We’d love to cooperate with the Chinese as well to get the right information so that we can do all that’s needed to find therapeutics, to find a vaccine, to do everything we can to reduce the risk that there will be more lives lost as the world moves forward.
“What can China do to help the world? Shut those markets down,” Graham said on Fox & Friends Monday.
“I’m going to write a letter to the Chinese ambassador saying, ‘If you don’t shut those wet markets down, our trading relationship is going to change,’” he added.
虚伪面纱遮不住霸凌嘴脸（钟声）[A false veil cannot hide a bully’s face]
Zhong Sheng weighs in on what it says is the oppression of Chinese journalists by the US
The responsibility of the media is to build the bridge of communication and open the window of communication. Over the years, Chinese journalists in the United States have played an important role in promoting mutual understanding between the Chinese and American people through extensive reporting. Regrettably, the us political crackdown on Chinese media in the us has become a stumbling block to the sound interaction between China and the US. One word of advice, pride and prejudice are not justice, bullying will not succeed.
Comment: The CCP authorities and propaganda organs have been quite aggressive in their pushback over the reciprocal expulsions of journalists, and they are clearly not happy about this New York Times report from a few days ago – U.S. Officials Push for Expelling Suspected Chinese Spies at Media Outlets
Some American intelligence officials have pushed for years to expel employees of Chinese media organizations who they say mainly file intelligence reports. The officials now see an opening to make a strong case after Beijing abruptly announced this month that it would expel almost all American citizens who report from mainland China for The New York Times, The Washington Post and The Wall Street Journal…
One option that some officials have discussed that does not involve spies is limiting the reach and distribution of the Chinese outlets in the United States, whether those are television networks or newspapers. But that runs into the thorny issue of press freedoms. For years, the Chinese government has blocked online access to major foreign news websites and apps, and it often censors broadcasts by international television networks.
Comment: I am not in favor of expelling any PRC spies working under journalist cover in the US, for some of the following reasons:
1. Beijing will keep tossing foreign reporters in a tit for tat;
2. Kicking out spies under journalist cover in retaliation for expelling the Wall Street Journal, New York Times and Washington Post reporters is a propaganda home run for Beijing, as it makes it easy for them to say “see, those American reporters are all CIA!”;
3. It would endanger any remaining US reporters in China, and it would endanger even more the Chinese “News assistants” working for American media outlets;
4. Assuming the US counterintelligence community knows who the spies under journalist cover are, why not let them stay and watch what they do and to whom they talk? Can they really do that much damage if they are under close surveillance?
It is impressive how skillfully China uses information decoupling and platform asymmetry to push its propaganda agendas. The “wolf warrior” diplomats and propaganda organs are making their case globally on American platforms like Twitter, Facebook, and Youtube; CCP outlets like CGTN/CCTV/CRI, People’s Daily and China Daily are allowed to broadcast and distribute inside the US and other countries and Wechat is integral to the information consumption of the global Chinese-speaking diaspora. Meanwhile, foreign media are effectively blocked from broadcasting or publishing inside China, and from disseminating information on Chinese social media like Weibo and Wechat. PRC officials constantly talk about the dangers of decoupling, but at least when it comes to information they are aggressively and successfully pursuing a very comprehensive agenda of information decoupling in which they control the messaging for the domestic audiences while spreading unfettered their messaging globally.
Eric Xu, Huawei’s chairman, said he believes Beijing would respond with restrictions of its own on American companies operating in China if the U.S. follows through with reported plans to cut off Huawei’s access to a major Taiwanese chip supplier…
“I think the Chinese government will not just stand by, watching Huawei be slaughtered,” Mr. Xu said during a press conference held via videoconferencing from the Chinese company’s headquarters in Shenzhen on Tuesday. “I believe the Chinese government may also take some countermeasures,” he said, citing a report in Chinese state media warning of the prospect of retaliation by Beijing
Net profit rose 5.6 percent to CNY62.7billion (USD8.83 billion) in the year ended Dec. 31 from a year earlier, the Shenzhen-based company said in its earnings report released today. Profit increased 25 percent in 2018 and 28 percent in 2017. Revenue last year gained 19.1 percent to CNY858.8 billion.
Eric Xu, rotating chairman at Huawei, told CNBC in an interview Tuesday that the company had missed its own targets. At the start of 2019, Huawei projected revenue of around 858.8 billion yuan or $123 billion, which it eventually ended the year with. But in April of last year, it was preparing to revise that target to $135 billion…
Xu blamed the blacklisting for the $12 billion shortfall.
Xu said if the U.S. imposes new restrictions on Huawei and China responds with countermeasures, “it will be destructive and have a ripple effect on the global industry. It would be astonishing. If the Pandora box is opened, we are probably going to see catastrophic destruction to global industry, and by then, it is not going to be one company, Huawei, that could be destroyed.”
“I hope this story is not true. Otherwise, we might be seeing an endless blow of disastrous aftermaths. If that happens, not a single player in the global industry supply chain could remain immune.”
“Why China could not ban US produced 5G chips, smartphones and other smart terminals containing 5G chips in China market based on the same cybersecurity reasons?”asked Huawei Rotating Chairman Eric Xu…
“2020 will be the toughest year for Huawei, as we will be on the US Entity List for a whole year, and industry players have also estimated that Huawei has used up its ‘reserves’ in preparation for a US ban, Xu said, adding that the COVID-19 outbreak is another situation that we hadn’t expected, which may bring about a global economic recession and declining demand.
8. Indonesia accedes to China’s claim of “traditional fishing grounds”
Backed by armed Chinese Coast Guard ships, Chinese fishing fleets have been raiding the rich waters of the South China Sea that are internationally recognized as exclusively Indonesia’s to fish.
While Mr. Dedi catches the traditional way, with nets and lines, the steel Chinese trawlers scrape the bottom of the sea, destroying other marine life. So not only does the Chinese trawling breach maritime borders, it also leaves a lifeless seascape in its wake…
Wary of offending Indonesia’s largest trading partner, Indonesian officials have played down incursions by Chinese fishing boats, trying to avoid conflict with Beijing over China’s sprawling claims in these waters. But with the Chinese presence growing more aggressive, fishers in the Natunas are feeling vulnerable…
While Beijing recognizes Indonesian sovereignty over the Natunas themselves, the Chinese Foreign Ministry describes the nearby sea as China’s “traditional fishing grounds.”
Business, Economy and Trade
Creditors of Bankrupt Xiwang Group Approve Settlement Plan – Caixin Close to 90% of 374 creditors who attended the meeting, which was convened over the internet, voted in favor of the offer put forward by Xiwang’s court-appointed bankruptcy administrator, people familiar with the matter told Caixin. The 335 who accepted the plan are owed about 12.4 billion yuan, or 86.4% of the company’s total unsecured debts, the sources said.
AmCham China Says U.S. Businesses’ Pessimism Increased – Bloomberg Greg Gilligan, chairman of the American Chamber of Commerce in China, discusses how the coronavirus outbreak is affecting U.S. companies doing business in the world second-largest economy. He speaks with Tom Mackenzie on “Bloomberg Markets.
Politics and Law
上阵战一线 建言显担当 – 260多万各级人大代表投入疫情防控和复工复产 Page 1 people’s daily on 2.6 million people’s congresses delegates from all levels fighting the virus and getting the economy restarted. NPC propaganda kickoff?
Xi stresses ecological protection in Zhejiang tour – People’s Daily Online Protecting mountains and waters here well will provide people a unique advantage for further economic development, Xi said. “Ecological environment itself is the economy. All the ecological protection efforts will be rewarded,” he said. Fully building a modern socialist country includes both urban modernization and agricultural and rural modernization, Xi said, adding that China will make all-round efforts for rural vitalization after building a moderately prosperous society in all respects.
Xi inspects wetland conservation, urban management in Hangzhou – Xinhua During the inspection, Xi visited the Xixi National Wetland Park and the City Brain, a smart city platform aiming to improve urban management. Hangzhou’s City Brain project was launched in 2016 to help the city make plans in areas including public security, transport and healthcare with the use of big data, cloud computing and artificial intelligence, among other cutting-edge technologies.
Xi Focus: Xi’s speech on epidemic control in Hubei to be published – Xinhua Wednesday in the seventh issue of the Qiushi Journal…Xi…delivered the speech during his inspection tour in the central Chinese province on March 10…An economic and social order compatible with epidemic prevention and control should be established, according to the article….Efforts to fix the shortcomings and weak links in the system and capacity for governance were also stressed, including improving the public health emergency management system to boost capacity for and capabilities of responding to major public health emergencies, and improving mechanisms for governance at the primary level in cities and rural areas.
罗文任四川省委常委、副省长 王一宏任四川省委常委(图|简历)_中国经济网——国家经济门户 罗文同志任中共四川省委委员、常委；王一宏同志任中共四川省委常委；王宁、王铭晖同志不再担任中共四川省委常委职务，工作另有安排
Construction of Xiongan New Area back on fast track as epidemic eases – Xinhua To date, Xiongan New Area, home to 1.2 million residents, has reported no confirmed or suspected cases of novel coronavirus disease. As of Monday, more than 58,000 workers have returned to their posts at Xiongan, with the construction of 78 projects and the operation of over 1,000 companies resumed.
Foreign and Defense Affairs
Sharp Power and Democratic Resilience Series | A New Invisible Hand – NATIONAL ENDOWMENT FOR DEMOCRACY – Martin Hála This report explores the issue of corrosive capital—or capital flows from authoritarian regimes that undermine democratic processes and institutions in the receiving countries—and outlines what an interconnected, interdisciplinary response from civil society could look like. Illiberal regimes like those in China and Russia use capital as a foreign policy tool and often as a form of strategic corruption to bolster authoritarianism as a globally competitive governance system. The legacy of one Chinese firm’s engagement in the Czech Republic vividly illustrates how corrosive capital from technically private companies can be leveraged by authoritarian regimes to undermine democratic institutions in target countries
Russia and China in the Arctic: Cooperation, Competition, and Consequences – Carnegie Moscow Center – Carnegie Endowment for International Peace Russian and Chinese interests in the Arctic are very different in both scope and nature. China has much greater economic, financial, and technological resources than Russia, and the gap is growing. China’s economic dynamics also look stronger. While China is charging ahead, Russia is merely trying to protect its positions: its sovereignty, territorial integrity, national control over navigation, and the precedence of international law (i.e., interstate bargaining) over any kind of a universal rules-based order. Russia is, in a word, a status quo power, while China is seeking to open up the region for the world and capitalize on that. The two countries’ legal positions reflect that.
Following the money: China Inc’s growing stake in India-China relations – Brookings – Ananth Krishnan The aim of this paper is to provide a more complete picture of Chinese investment in India and to assess the implications of Chinese investment and acquisitions for India’s diplomacy, trade strategy, and security. Rather than attempt to provide a definitive figure, which is beyond this paper’s scope, the broader objective is to examine the growing stakes of Chinese companies in India and assess the implications for the relationship. This paper draws on MOFCOM data, publicly available information sourced from Chinese firms, press reports in China and India, and background information shared by Indian and Chinese officials. It is possible to estimate that the total investment from China exceeds official figures by at least 25%, and this is a very conservative estimate. When announced projects and planned investments are included, the total current and planned investment is three times the current figure, crossing at least US$26 billion.
Number of PLAN vessels to increase by almost 20% over coming decade, according to US ONI estimates | Jane’s 360 China will have a naval fleet of 425 ‘battleforce’ ships and submarines by 2030 – an increase of almost 20% over the next 10 years – according to a US Office of Naval Intelligence (ONI) report.
Yicai Global – Tencent to Provide UN With Tech Support for Thousands of Online Conferences Tencent Holdings, one of China’s best-known tech firms, has agreed to provide technical support for thousands of online conferences the United Nations will hold to celebrate its upcoming 75th anniversary.
Michael Gove appears to blame China over lack of UK coronavirus testing | Politics | The Guardian Asked on BBC One’s Andrew Marr show why Britain did not have sufficient testing, despite the first case in China being known about in December, Gove said: “We’ve been increasing the number of tests over the course of the last month.
“It was the case … [that] the first case of coronavirus in China was established in December of last year, but it was also the case that some of the reporting from China was not clear about the scale, the nature, the infectiousness of this.”
Hong Kong and Macao
Hong Kong wages could drop 20 per cent in 2020 for city blighted by coronavirus pandemic, impact of anti-government protests | South China Morning Post Dr Felix Yip Wai-kwong, associate director of the centre for human resources strategy and development at Baptist University, said: “The samples collected from last May and June do not reflect the influence of the protests that started in the latter half of last year.
As coronavirus outbreak, containment measures weigh on sector, Hong Kong home prices record biggest drop in 15 months | South China Morning Post Hong Kong home prices recorded their steepest drop in 15 months in February, and are expected to decline by up to 20 per cent from a peak in June 2019 by year-end amid the coronavirus pandemic.
Tech and Media
China’s Venture Capitalists Start Making Deals, Amid Signs of Recovery — The Information $$ Perfect Diary, a four-year-old online makeup retailer selling items like brightly hued lip gloss and eyeliner, has been thriving. Perfect Diary’s sales grew 250% in both January and February compared to sales a year ago, according to people who have direct knowledge of the company’s performance. No wonder, then, that earlier this month, Tiger Global Management led Chinese private equity firms Hopu Management Investments and Boyu Capital in a $100 million investment in the startup.
Tencent-backed online education firm Yuanfudao raises $1 billion in new round – Reuters Offering online courses and homework plans to students, Yuanfudao ranked first in China in-app purchases in the education category between January and mid-March, according to mobile app performance tracker App Annie.
How the Cameras Reached China’s Front Doors – SixthTone Local authorities in Shanghai have come to view facial recognition as the “most important” security technology for communities over the past two years, partly due to the public security bureau’s strong support for such solutions, according to Xue Zelin, a smart cities researcher at the Shanghai Academy of Social Sciences.
From Isolated to Island-Hopping: China Embraces Animal Crossing While sales figures for China aren’t available, tens of thousands of Animal Crossing: New Horizons game cartridges have been sold on e-commerce platform Taobao, and many more have undoubtedly been purchased from the Nintendo Game Store and downloaded directly onto Switch consoles.
Tiger Global builds stake in TikTok-owner ByteDance | Financial Times $$ The New York-based investment group discussed the stake in a letter to investors this week, saying it had “purchased shares over the past 21 months at a low multiple of future free cash flow”. Tiger Global did not disclose the size of the investment…Tiger Global said it estimated ByteDance would command 19 per cent of China’s online advertising market this year
Society, Arts, Sports, Culture and History
China women’s football star to rejoin team after Wuhan lockdown lifted, media reports – Xinhua Chinese women’s team playmaker Wang Shuang, who has been stranded in Wuhan, is set to rejoin the national team after the lockdown on the then-epicenter of COVID-19 is lifted, a Chinese newspaper reported on Monday.
Energy, Environment, Science and Health
18 Firefighters, 1 Guide Killed in Sichuan Forest Fire – Sixth Tone A team of 21 firefighters from Ningnan County, along with a local guide dispatched for the firefighting mission, were reported missing at 1:30 a.m., according to the Xichang City government. The three firefighters who were rescued from the blaze are currently being treated in a hospital. Almost exactly a year ago and also in Liangshan, another 30 firefighters died for the same reason. Chinese netizens are questioning why this keeps happening and whether the local government did anything to better protect the firefighters.
Efforts continue to stop mine tailings leak in NE China – Xinhua The leakage happened at 1:40 p.m. Saturday at the tailings pond of the Yichun Luming Mining Co., Ltd. in the city of Yichun. About 2.53 million cubic meters of waste water entered into a local river and caused certain pollution