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- Next Friday Axios Autonomous Vehicles, a weekly analysis of autonomous tech, and its impact on cities, policy and the economy, will be launched. Sign up here.
1 big thing: Temper expectations for U.S.-China trade talks
Bloomberg reported at noon today that President Donald Trump has now directed his staff to proceed with the next round of tariffs on $200 billion of Chinese imports.
What's happening: On Thursday, the Wall Street Journal broke the news that Treasury Secretary Steven Mnuchin had extended an invitation to senior economic official Liu He to return to D.C. for another round of talks.
The other side: The Chinese side acknowledged the invitation but has not yet agreed, and between Trump's decision to move forward on the next round of tariffs and a Thursday tweet, I doubt they will accept.
Trump may have already decreased the likelihood Liu will return to D.C. by tweeting on Thursday:
My thought bubble: It's going to take a lot of backchannel reassurances and promises to get Liu back to D.C. The Chinese understand that there's disagreement among Trump's top advisers and Liu has been humiliated on two recent trips to D.C.
- Liu did not get even a handshake with Trump when he came to D.C. in early March.
- And, in May he thought he had reached a deal to suspend the trade war, only to have Trump reject it in a tweet.
The bottom line: That "reversal-by-tweet" methodology also shredded any remaining credibility Mnuchin had in Beijing, so unless the Chinese are hearing directly from Trump or other top members of his inner circle, they are going to be very wary.
- The coming yearlong U.S. trade war with China (Axios)
- Talking Won't End Trump's Growing China Trade War Any Time Soon (Bloomberg)
- As trade war escalates, China intensifies role of state-owned enterprises (South China Morning Post)
2. Super typhoon approaches China
The focus in the U.S. is on the awful Hurricane Florence, but in Asia an even bigger storm is about to hit.
What's happening now: Super Typhoon Mangkhut has made landfall on the island of Luzon in the Philippines and looks set to wreak havoc in Hong Kong, Macau and Southern China. As the SCMP reports:
Southern China is also preparing, per SCMP:
3. Uyghur mass detentions get global attention...
Various reports of around one million Uyghur Muslims being detained in mass detention camps in Xinjiang are rapidly increasing.
What we're reading:
- "Transformation" is the goal of China detaining vast numbers of Muslims, per Sunday's New York Times, in the center of the print front page.
- Human Rights Watch issued a long report on Monday on China's campaign of "eradicating ideological viruses."
- The U.S. is considering sanctions under the Magnitsky Act against senior Chinese officials involved in the crackdown, NYT reports.
- Co-chairs of the Congressional-Executive Commission on China wrote a letter to Commerce Secretary Wilbur Ross to expand the U.S. entity list to cover Chinese government and state security entities in Xinjiang, as well as businesses that may profit from security expansion in that region.
- Anwar Ibrahim, likely the next premier of Malaysia, criticized the crackdown in Xinjiang, per Bloomberg.
4. ...but China says West's efforts have failed
The PRC government, on the other hand, has taken a new tack in its defense, as Reuters reports...
- Radio Free Asia discusses how Uyghur children are separated from their parents.
- In the journal Central Asian Survey, Adrian Zenz writes about China's political re-education campaign.
- Axios' Erica Pandey reports on China's growing surveillance over Muslims with the use of QR coding technology.
For D.C. readers, the large Uyghur community here means there are at least three very good Uyghur restaurants in the area — Dolan in Cleveland Park, Eerkin’s in Glover Park and Queen Amannisa in Arlington.
5. Google employees resign over China censorship
Google's plans to relaunch censored search services in China was revealed last month by The Intercept. Now it reports that a senior scientist has resigned over a "forfeiture" of U.S. values while in China:
Why it matters: This could have implications elsewhere, as Poulson points out in his resignation letter:
What's next: More D.C. scrutiny of Google is coming. Reuters reports that U.S. lawmakers wants answers from Google about its China plans. If there are hearings on the Hill, expect Poulson to get an invitation.
Go deeper: The Real Google Censorship Scandal (NYT)
6. The U.S.-China fight over quantum tech
Axios' Kaveh Waddell reports ... As the U.S. and China struggle for dominance in artificial intelligence, they are locked in a parallel, behind-the-scenes race to master quantum technology, a contest that could result in lasting military superiority and a possible new industrial revolution.
The big picture: Though still far off, conquering quantum technology could enable uncrackable communications, supercharged radar and more deadly undersea warfare. And as of now, China has some serious advantages.
A new report from the Center for a New American Security draws on open-source material for a window into China’s quantum progress and aspirations.
- The report’s authors, Elsa Kania and John Costello, say that China has made substantial advances in some areas of quantum research, putting it in a position to overtake the U.S. in the science.
- Chinese advantages include a national vision for technological research, significant investments, and tight bonds between the private sector and the military. By comparison, the U.S. yet to enact a quantum policy, though the White House recently added a quantum expert to its tech-policy staff.
- "China’s advances in quantum science could impact the future military and strategic balance, perhaps even leapfrogging traditional U.S. military–technological advantages," write Kania and Costello.
Among the spoils of conquering the quantum space are computers that could decipher most of the world’s encrypted data, like the NSA’s store of intercepted communications, and overcome the U.S. stealth technologies on which the military heavily relies.
How they got here: China had a "Sputnik moment" in 2013, igniting a national plan that funnels billions of dollars and top scientists into quantum research, the authors write.
- Its unlikely instigator was Edward Snowden, whose leaks revealed the extent of U.S. spying in China, and sparked a feverish response meant to shore up China’s protections against cyber-espionage.
- This inflection point mirrors another three years later: an Obama administration report outlining a future U.S. artificial intelligence policy. Afterward, Beijing scrambled to put together its own, far outstripping American planning, while the Trump administration has neither engaged Obama's policy nor formulated its own.
7. Wray: China is top counterintelligence priority
On Thursday, "CBS This Morning" aired an interview with FBI Director Christopher Wray. Among Wray's comments about China:
Why you'll hear about this again: There seems to be a bit of an official campaign underway to raise awareness of PRC espionage.
- Last week's newsletter included an item about a podcast done by William Evanina, director of the National Counterintelligence and Security Center, in which he said that China is "the largest threat to our national security, bar none". The trade issues are just one piece of a much broader push back against the PRC.
- Case study: Earlier this week the WSJ published a story on how Equifax was worried about Chinese spying (before it was hacked), and what it suspected were efforts by Ant Financial to steal corporate trade secrets — an allegation Ant Financial quickly denied.
8. Film star's disappearing act
Superstar Fan Bingbing has not appeared in public in over 100 days. The June 29 newsletter item The taxman cometh for China's TV/film stars set the stage:
Buzz: Global media is paying attention. On Thursday, NYT asks "What Happened to Fan Bingbing, China’s Most Famous Actress?"
My thought bubble: Since basically everyone in the film business evades taxes, one has to wonder why Fan was targeted. Did she offend the wrong person, and/or is she a very useful example for a broader campaign to rein in the entertainment industry and bring it more into line with the "Core Socialist Values" that Chinese President Xi Jinping and the Chinese Communist Party are aggressively promoting?
- And it is yet another reminder that no one in China, now matter how rich or seemingly connected to power, is safe. No wonder so many people with means want to emigrate...
9. Venezuela's president goes begging to Beijing
President Nicolás Maduro and other Venezuelan officials are in Beijing looking for help for their economic disaster. Maduro had meetings with Xi and Chinese Premier Li Keqiang on Friday, AP reports:
Maduro is getting at least $5 billion more in loans, Bloomberg reported:
Quick take: This could be good money after bad. China is already so deep into Venezuela, does it have much of a choice?
10. Smart new China column to watch
The Economist Magazine has launched a new China column called "Chaguan," written by David Rennie, who just moved to Beijing after several years in D.C. for the magazine.
The inaugural column explains:
11. Worthy of your time
Wall Street Journal — China and Vatican to Sign Landmark Deal Over Bishops
MacroPolo — In Xi We Trust: How Propaganda Might Be Working in the New Era
AidData — Chinese infrastructure investments reduce inequalities in developing countries
Harvard Fairbank Center for Chinese Studies Podcast — China's Great Gamble, with Barry Naughton
Reuters — How China's plan to develop rental housing backfired
Caixin — State Enterprise Debt Target Shows China Still Serious About Deleveraging
South China Morning Post — Buddha statue pulled from Sotheby’s auction on suspicion it may be from China Unesco site
The Guardian — Fans ejected from Dua Lipa Shanghai concert over gay-rights flags
Chinascope — China’s New History Textbook: Mao’s Cultural Revolution No Longer a Mistake
This week's issues of my Sinocism China Newsletter