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Trade War

Newsletter 32 - August 10, 2020

Dexter Roberts
Aug 11, 2020
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Welcome to newsletter 32, the latest edition of Trade War. This week the Trump administration showed it has no intention of limiting its tech war to crackdowns on China’s Huawei and TikTok, but is extending it further, while the Chinese Communist Party under Xi continued to rapidly erode Hong Kong’s freedoms.

In a move that has many worrying it will further sever the fraying connections between Chinese and Americans, Trump announced that WeChat, the ubiquitous mobile app that has come to dominate communications and life in China and for Chinese around the world, could be in effect banned for use in the U.S.

Meanwhile, Beijing used the just-passed national security law to continue with an ever more sweeping crackdown in Hong Kong, a clear sign that the Chinese Communist Party has absolutely no intention of continuing to protect the legal and civil rights it previously promised.

Digital bridge connecting China to the world?

On Thursday, the Trump team issued an executive order that takes effect in 45 days that “could pull China’s most important app from Apple and Google stores across the world and prevent American companies from doing business with its parent company, Tencent,” reported the New York Times.

“With much of the Chinese internet locked behind a wall of filters and censors, the country’s everything app is also one of the few digital bridges connecting China to the rest of the world. It is the way exchange students talk to their families, immigrants keep up with relatives and much of the Chinese diaspora swaps memes, gossip and videos. Now, that bridge is threatening to crumble,” the paper of record writes.

It’s the Berlin wall, tear it down

“WeChat is not a bridge, it’s the Berlin wall, tear it down,” tweets Shawn Zhang, a Chinese law student in Canada who has made a name for himself identifying the location of Xinjiang internment camps through Internet search including Google Earth. “It’s an integral part of China’s great firewall, the opposite of free and open internet. Chinese people, inside & outside China, will better off without WeChat,” he writes.

Twitter avatar for @shawnwzhang
Shawn Zhang @shawnwzhang
WeChat is not a bridge, it’s the Berlin wall, tear it down. It’s an integral part of China’s great firewall, the opposite of free and open internet. Chinese people, inside & outside China, will better off without WeChat.
nytimes.comTargeting WeChat, Trump Takes Aim at China’s Bridge to the WorldThe all-purpose app, which the administration is restricting along with TikTok, is how many Chinese living abroad stay in touch with one another, and with people back home.
3:16 AM ∙ Aug 8, 2020
908Likes377Retweets

Censoring and surveilling

Below is a good Twitter thread by James Griffiths, author of "The Great Firewall of China." He starts by referencing research from earlier this year by the University of Toronto’s Citizen Lab which showed how not just Wechat accounts registered in China, but those registered elsewhere in the world too, were carefully monitored by parent company Tencent, with the information used to build up the company’s censorship capabilities.

“Non-China-registered accounts undergo content surveillance wherein these files are analyzed for content that is politically sensitive in China,” Citizen Lab reported. “Upon analysis, files deemed politically sensitive are used to invisibly train and build up WeChat’s Chinese political censorship system.”

Twitter avatar for @jgriffiths
𝕛𝕒𝕞𝕖𝕤 𝕘𝕣𝕚𝕗𝕗𝕚𝕥𝕙𝕤 🇭🇰🏴󠁧󠁢󠁷󠁬󠁳󠁿 @jgriffiths
Limiting WeChat will have major effects on the Chinese diaspora in the US, but Tencent has long been accused of censoring and surveilling overseas users, essentially extending the Great Firewall beyond China, and setting the stage for this type of action:
citizenlab.caWe Chat, They Watch: How International Users Unwittingly Build up WeChat’s Chinese Censorship Apparatus - The Citizen LabWeChat communications conducted entirely among non-China-registered accounts are subject to pervasive content surveillance that was previously thought to be exclusively reserved for China-registered accounts.
4:00 AM ∙ Aug 7, 2020
226Likes149Retweets

Previously acceptable behavior suddenly illegal

The Monday arrest of Jimmy Lai, chief executive of Next Media, whose publications have been some of the toughest critics of the Chinese Communist Party, is just the latest example of how the national security law is being used for an unprecedented crackdown on freedoms in the territory.

"I don't think anyone expected it would be as broad-reaching as it proved to be, nor that it would be immediately wielded in such a draconian way as to render a whole range of previously acceptable behavior suddenly illegal," Anthony Dapiran told AFP.

Twitter avatar for @JeromeTaylor
Jerome Taylor @JeromeTaylor
Since Beijing imposed its security law on Hong Kong, the precedent setting headlines have come at us on a daily basis. @XinqiSu and I try to sum up for @AFP (in 750 words) all that's happened in the first month under this new law.
sg.news.yahoo.com‘Night fell’: Hong Kong’s first month under China security lawTeenager Tony Chung said he was walking outside a shopping mall when police officers from Hong Kong’s new national security unit swooped, bundled him into a nearby stairwell and tried to scan his face to unlock his phone. Chung’s alleged crime was to write comments on social media that endangered
4:11 AM ∙ Aug 10, 2020
77Likes58Retweets

US retaliatory sanctions

Meanwhile, the Trump administration continues its retaliatory actions following the imposition of the national security law, with sanctions imposed earlier in the week against eleven senior Hong Kong officials, including the head of the police, the justice secretary, and chief executive Carrie Lam, reports the South China Morning Post.

Twitter avatar for @SheridanAsia
Sheridan Prasso @SheridanAsia
Sanctions impact? HK justice secretary Teresa Cheng and husband own 63% of Hong Kong-listed Analogue Holding, which in March acquired 51% of New York-based Transel Elevator & Electric Inc. Carrie Lam's son Joshua also reportedly studies at Harvard Univ.
scmp.comHow hard will US sanctions against Hong Kong officials bite?Under Washington’s measures, the US-based assets of 11 officials serving Hong Kong are frozen, Americans and firms barred from dealing with them.
4:50 AM ∙ Aug 9, 2020
68Likes24Retweets

Policies of suppression

“Carrie Lam is the chief executive directly responsible for implementing Beijing’s policies of suppression of freedom and democratic processes,” states the August 7 press release by the U.S. Treasury Department.

Twitter avatar for @supchinanews
SupChina @supchinanews
Hong Kong Chief Executive Carrie Lam and 10 others sanctioned by the U.S. Lam is accused of being “directly responsible for implementing Beijing’s policies of suppression of freedom and democratic processes":
supchina.comU.S. announces sanctions on Hong Kong Chief Executive Carrie Lam - SupChinaThe United States has announced sanctions on 11 senior Hong Kong officials for their involvement in implementing the new national security law imposed by Beijing, and other repressive measures in the city.
7:00 AM ∙ Aug 10, 2020

Highest level US cabinet visit to Taiwan in over 4 decades

U.S. health secretary Alex Azar has visited Taiwan meeting president Tsai Ing-wen, the highest level visit by an American Cabinet member since 1979, the year the U.S. switched its diplomatic recognition to Beijing from Taipei.

“The particular focus of both my discussion with President Tsai and of our trip is highlighting Taiwan’s success on health in combating Covid-19 and to cooperate with the US to prevent, detect and respond to the health threats,” Azar said, reported the South China Morning Post.

Ten fighter jets across the midline of the strait

Beijing’s response: sending ten fighter jets across the midline of the Taiwan Strait, reports the Economic Times of India.

Twitter avatar for @rhokilpatrick
Ryan Ho Kilpatrick 何松濤 @rhokilpatrick
As ⁦@iingwen⁩ meets with US health secretary ⁦@SecAzar⁩ China sends 10 jets into Taiwan’s air defence zone. A diplomatic visit versus actual military action infringing int’l boundaries: Which is the party “raising tensions” across the strait?
tw.appledaily.com挑釁!蔡英文接見美衛生部長 共機殲10殲11闖我ADIZ遭驅離美國衛生部長阿蕯爾(Alex Azar)正在訪台,總統蔡英文上午10點接見阿薩爾,中共解放軍所屬殲11、殲10型機,今(10日)上午9時許,陸續短暫踰越海峽中線。空軍司令部今首度公布,「我空軍除以地面防空飛彈全程監控外,並於第一時間廣播告警,運用空中偵巡兵力強勢驅離。」
6:51 AM ∙ Aug 10, 2020
84Likes54Retweets

Only a madman would sign

African activists and policymakers are starting to question “the deluge of Chinese credit—some $150 billion in 2018, according to researchers at Johns Hopkins University—that has fueled a debt crisis aggravated by the new coronavirus,” reports Bloomberg Businessweek.

“Nigerian lawmakers are reviewing Chinese loans they say were unfavorable. Activists in Kenya are demanding the government disclose the terms of Chinese credit used to build a 470-kilometer (292-mile) railway. And Tanzanian President John Magufuli calls an agreement his predecessor made with Chinese investors, to build a $10 billion port and economic zone, a deal “only a madman would sign.””

Twitter avatar for @BW
Businessweek @BW
Africa is starting to have second thoughts about that Chinese money
trib.alBloomberg - Are you a robot?
12:20 AM ∙ Aug 8, 2020
43Likes27Retweets

The potted narrative of failure

“The potted narrative of “failure”—which some have even used to justify a potential civilizational confrontation between the two countries—fails to capture the broader history of US-China engagement,” writes Neil Thomas in an interesting piece for MacroPoloChina.

“In particular, a closer look at the administration of Bill Clinton is necessary, because many point to the “long decade” of the 1990s as when engagement took on the explicit aim of delivering political transformation in China.”

Twitter avatar for @KennedyCSIS
Scott Kennedy @KennedyCSIS
Highly recommend this careful historical review of US’s engagement strategy toward China by Neil Thomas of @MacroPoloChina⁩. Excellent job of separating myth from reality.
macropolo.orgMatters of Record: Relitigating Engagement with China - MacroPoloDebate over Washington’s decades-long policy of “engagement” with China has intensified in recent years. Within foreign policy circles, a growing and bipartisan chorus of voices is calling for the United States to abandon engagement because it failed to produce a liberal democracy in China that whol…
3:56 PM ∙ Aug 8, 2020
99Likes45Retweets

Notable/In Depth

U.S. farm equipment maker John Deere has large and very fast growing links to Xinjiang’s cotton industry, reports the South China Morning Post.

Twitter avatar for @fbermingham
Finbarr Bermingham @fbermingham
SCOOP: Iconic US farm giant John Deere's links to Xinjiang's cotton controversial industry and shady quasi-paramilitary org XPCC / Bingtuan revealed - an investigative report by @jakefromer, @cissy_chow and myself
scmp.comUS cotton machinery sales to Xinjiang skyrocket ahead of sanctionsAmerica’s most iconic farm brand – John Deere – has established itself as a key player in Xinjiang’s immense cotton industry, even as human rights groups warn that the supply chain in the restive region is laced with the forced labour of Uygurs and other Muslim ethnic minority groups.
8:02 PM ∙ Aug 7, 2020
87Likes62Retweets

The danger of war between the U.S. and China is not that they accidentally stumble into it. Instead, it is that one side decides the cost of war is worth it, writes Hal Brands for Bloomberg Opinion.

“If China concludes that Taiwan is distancing itself too far from the mainland politically, as the balance of power shifts in Beijing's favor militarily, then it might decide that war is better than letting the dream of reunification slip away. If Chinese leaders worry that their domestic legitimacy is slipping, they might behave more belligerently in a crisis, for fear that war is less dangerous than humiliation.”

Twitter avatar for @HalBrands
Hal Brands @HalBrands
Bad news: A U.S.-China war is getting more likely. Good news: It won't happen by accident. We worry a lot about war breaking out even though neither side wants it. But that almost never happens. The real danger is a war China chooses to wage on purpose.
bloomberg.comBloomberg - Are you a robot?
2:34 PM ∙ Aug 7, 2020
97Likes58Retweets

“China could fall into its own version of the Galapagos Syndrome, often associated with Japan’s famously insular mobile phone industry, whose products were so localized they couldn’t survive anywhere else,” writes Michael Schuman in a commentary for Bloomberg Opinion piece.

Value of Next Digital soars after pro-democracy supporters buy shares to support it following Jimmy Lai’s arrest.

Twitter avatar for @JeromeTaylor
Jerome Taylor @JeromeTaylor
You might think the arrest of a newspaper's owner would send share prices tumbling. Not in Hong Kong. Next Digital up 127% since @JimmyLaiApple's arrest as online calls go out among pro-democracy to buy shares and support the media company.
Image
6:09 AM ∙ Aug 10, 2020
49Likes36Retweets

Chinese mobile maker Xiaomi continues to dominate India’s smart phone market despite tension, reports Caixin.

Twitter avatar for @caixin
Caixin Global @caixin
Xiaomi continues to lead India’s smartphone market in the second quarter of 2020 with a 29.4% market share, despite rising anti-China sentiment in some quarters.
caixinglobal.comXiaomi Still Top Dog in Indian Smartphone Market Despite TensionsXiaomi Still Top Dog in Indian Smartphone Market Despite Tensions
6:26 AM ∙ Aug 10, 2020

Upcoming event

“China’s Global Push: Is a Backlash Building?” is the topic of a talk this coming Thursday.

Participants will join from three continents: experts from Gateway House in Mumbai, India and from the Overseas Press Club in NYC, the former Permanent Representative of Ireland to the European Union and former Ambassador of Ireland to China joining from Dublin, and yours truly.

Twitter avatar for @dtiffroberts
Dexter Roberts @dtiffroberts
'China’s Global Push: Is a Backlash Building?' - Tune in next Thursday for a discussion with participants from three continents: experts from Gateway House in Mumbai, India, the former Irish Ambassador to China in Dublin, the OPC in NY, and yours truly..
opcofamerica.orgChina’s Global Push: Is a Backlash Building? - OPCThe Overseas Press Club of America and Gateway House, Mumbai, India, are co-sponsoring a unique global online conversation among China experts on three continents...
7:59 PM ∙ Aug 7, 2020
1Like3Retweets
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