Happy Friday. It's nice to be back in your inboxes after my trip to Beijing and Shanghai.
Situational awareness: President Trump has canceled Secretary of State Mike Pompeo's North Korea trip due to lack of "sufficient progress" in denuclearization. Sanctions related to North Korea may return to the forefront of U.S. policy towards China if Trump believes Beijing has eased off on the maximum pressure campaign.
- According to unconfirmed reports, Chinese President Xi Jinping may travel to Pyongyang in early September for the DPRK’s 70th founding anniversary. It is unlikely he would attend if North Korean leader Kim Jong-un thought he was still squeezing North Korea at America’s behest.
1 big thing: U.S.-China trade talks sputter
As expected, two days of talks this week between mid-level U.S. and Chinese officials in D.C. did not reach any breakthroughs.
What's happening now: There may be no substantive negotiations until after the November midterms, and the next round of threatened tariffs on $200 billion of Chinese imports look increasingly likely to take effect in September. As Bloomberg reports:
My thought bubble: During my recent Beijing trip, I consistently heard that Xi and his advisers had decided U.S. trade pressure is just one piece of a multi-dimensional strategy to “thwart China’s rise,” and so it made little sense to them to offer significant concessions.
Assuming Trump holds firm, the tariffs and other measures will likely only increase in intensity over the coming months, perhaps until one or both sides have felt enough pain to reconsider.
Go deeper: Read my thoughts from my recent Beijing trip.
2. Xi's control over the "gun" and the "pen"
Since July, rumors have swirled that Xi was facing pushback over his policies and the propaganda efforts led by Politburo Standing Committee member Wang Huning.
Shot: Xi's absence from official media for the first 15 days of August as he made the annual summer trip to the Beidaihe seaside resort only further fueled the intrigue.
Chaser: Xi reappeared last weekend in media reports on his chairing a meeting of the leadership of the People's Liberation Army (PLA), in which he called for strengthening party leadership in the military.
This week, Xi also chaired a national conference on propaganda and ideological work where he declared:
Why it matters: Xi may be indicating that whatever criticism there was about the propaganda strategy and Wang has now been completely rejected.
I reached out to Chris Johnson, Freeman chair at the Center for Strategic and International Studies, for his reaction:
My thought bubble: It's not a coincidence that in just the last week Xi has chaired very high level meetings showing his control over the "gun" (PLA) and the "pen" (propaganda). He does not look like someone who is weakened — if anything he may be gaining strength.
- If there really had been an effort over the summer to push back against Xi and/or Wang, those moves look to have been squashed, and they likely gave Xi an even clearer idea of where his enemies are.
- If you come at the king and you miss, your life in the CCP will not be pleasant, and the message to any other cadres who might be wavering is very clear.
- The gathering, comprehensive conflict with the U.S. may only serve to strengthen him further, as dissension in the face of an existential struggle with the primary hostile foreign force could be seen as treasonous.
3. Rewriting the history of "Reform and Opening"
2018 is the 40th anniversary of China's Reform and Opening policy, launched under the leadership of Deng Xiaoping.
Flashback: Last year's 19th Party Congress declared a "New Era" for China — the Xi Jinping Era — following on the Mao Zedong and Deng eras.
What's new: In the Xi Era, the party historiographers are changing the history of Reform and Opening to diminish the role of Deng. Chun Han Wong of the Wall Street Journal looks at one recent example:
Go deeper: In the July 27 Axios China newsletter, I interviewed historian Julian Gewirtz about the politics around the 40th anniversary of Reform and Opening. I asked him "What are the politics around planning celebrations in this anniversary year?" Part of his response...
4. Chinese troops to attend Russia war games
PLA troops will join the upcoming Vostok 2018 war games, the South China Morning Post reports:
Why it matters: Alexander Gabuev, senior fellow and chair of Russia in Asia-Pacific Program at Carnegie Moscow Center, wrote a Twitter thread explaining why the PLA's participation is a "milestone." Included in the thread...
5. Taiwan's dwindling diplomatic allies
Earlier this week El Salvador switched official diplomatic relations from Taipei to Beijing, leaving Taiwan with just 17 remaining official diplomatic allies.
White House response: The Trump administration and at least one U.S. senator are not pleased. In a statement, the White House said:
Senator's response: Sen. Cory Gardner, chairman of the Foreign Relations Committee’s Asia subcommittee, is planning to introduce the Taipei Act of 2018 to "authorize the State Department to take action such as downgrading relations or altering foreign assistance to discourage decisions seen as adverse for Taiwan," Reuters reports.
Go deeper: Taiwan President Tsai Ing-wen made two stopovers in the U.S. during her recent visit to Belize and Paraguay.
6. Pig problems from African swine fever
China is the world's biggest pork producer with more than 430 million pigs. It is now grappling with the spread of the African swine fever (ASF), which is highly contagious and often fatal disease among pigs and wild boar but not humans.
Threat level, according to Science Magazine:
Quick take: Rising pork prices are very politically sensitive in China. The country has a strategic pork reserve to stabilize prices.
Grim reality: A couple of weeks ago there was a video going around on WeChat of pigs being buried and then burned alive around Shenyang in attempt to stop the spread. It was just awful.
7. BuzzFeed journalist denied China visa renewal
Megha Rajagopalan, the China bureau chief of BuzzFeed News, left the country after her journalist visa was not renewed, as seen in her tweet above.
Of note: She has written several groundbreaking stories about surveillance and incarceration of Uighurs in Xinjiang.
Go deeper: China’s re-education camps for a million Muslims.
8. Worthy of your time
Reuters — Waymo sets up subsidiary in Shanghai as Google plans China push
Australian Broadcasting Corporation — Huawei banned from 5G mobile infrastructure rollout in Australia
Department of Justice — Two Chinese Nationals Charged with Operating Global Opioid and Drug Manufacturing Conspiracy Resulting in Deaths
The New York Times — The Bitter Regrets of a Useless Chinese Daughter
SCMP — Three Chinese naval tech experts drown trying to save research platform during typhoon
The New York Times — China’s Consumption Downgrade: Skip Avocados, Cocktails and Kids
Caixin — Businessman With Huarong Link Reported Detained
John Garnaut — Australia’s China reset: The rest of the world is watching how we counter Beijing’s campaign of influence
US-China Economic and Security Review Commission — China’s Overseas United Front Work: Background and Implications for the United States
Texas National Security Review — From Engagement to Rivalry: Tools to Compete with China
Sinica Podcast — Legendary diplomat Chas W. Freeman, Jr., on U.S.-China strategy and history: Part 1
Across the Strait — United Front Target Taiwan's Grass Roots: Gangs, Temples, Business
MIT Technology Review — Who needs democracy when you have data?
This week's issues of my Sinocism China Newsletter