Happy 2019! It is nice to be back in your inboxes.
1 big thing: The U.S.-China trade talks
The U.S. and China held deputy-level trade talks in Beijing earlier this week. The discussions lasted one day longer than planned and both sides issued vague but mildly positive official statements about the discussions.
The Wall Street Journal has confirmed that Vice Premier Liu He, China's lead negotiator, will come to Washington, D.C. to continue the negotiations:
My thought bubble: The Chinese do need to make a deal, both because the trade conflict is exacerbating underlying problems in their economy and also because I hear Xi is quite concerned about the possibility of U.S. decoupling from China, especially in technology.
However, the Chinese side can not accede to all US demands without making structural changes that could pose an existential challenge to the Party’s view of how the economic system needs to be structured, so whether or not there is ultimately a deal will come down to how much is enough from the Chinese side to get the President Trump to say “we have a deal.”
The bottom line: I expect that the Chinese offer will fall far short of what U.S. Trade Representative Robert Lighthizer wants, but using a mixture of big purchase commitments, unofficial lobbying, flattery, and headline concessions it will ultimately prove enough for Trump.
2. Huawei's rough start to 2019
This morning we learned that Poland has arrested a Huawei executive and a Polish citizen on suspicion of espionage:
On Thursday, news broke that that the U.S. government is blocking some of Huawei's exports from its U.S. R&D operations (WSJ):
Huawei is coming under increasing suspicion among U.S. allies.
“We share the same concerns as the United States and Britain and that is espionage on private and state actors in Norway,” Justice Minister Tor Mikkel Wara said in an interview on the sidelines of a business conference.
An unusually blunt warning by Czech intelligence against the use of Huawei and ZTE products in telecommunications infrastructure was met with similar bluntness from the PRC.
The administration does not want any obstacles to being able to share sensitive information with the Israelis, the senior official told reporters ahead of the meeting, referring to the concerns about Chinese technology and investment at the port of Haifa. “We specifically put it on the agenda,” the official said.
3. But Huawei is doing well in developing markets
Bloomberg's Sheridan Prasso spent months investigating the success of Chinese tech firms, including Huawei, in Africa. She writes that China’s Digital Silk Road is looking more like an Iron Curtain:
Go deeper: Read the whole story here.
What's next: "Digital Iron Curtain" is a term I expect we will starting hearing much more.
4. The dangers of tweeting from China
The PRC security services started a crackdown on PRC citizens using Twitter last year and it is now getting attention in major media.
Last week Washington Post published Twitter in China: Authorities crack down one user at a time and yesterday the New York Times had Twitter users in China face detention and threats in new Beijing crackdown, with some chilling details:
My thought bubble: The Chinese government believes it needs to control discussion of China globally. The PRC authorities can not manage Twitter like they can Chinese Internet firms operating behind the Great Firewall but they have no constraints in cracking down on Chinese Twitter users.
Meanwhile, Chinese Communist Party and State media outlets are very active users of Twitter:
- Xinhua has 11.8 million followers, though some appear to have been bought;
- The People's Daily has 5.1 million followers;
- The Global Times has 837,000 followers;
- CGTN has 11.3 million followers.
An unreciprocal relationship: The PRC is leveraging Twitter for propaganda purposes while blocking the service inside China and detaining its own citizens for using it. I have often said mastering cognitive dissonance is the key still for trying to understand China but this makes my head hurt...
5. The climate stakes of China's Belt and Road initiative
Axios' Ben Geman looks at a report on the environmental impact of the BRI:
Yale Environment 360 has a cautionary look at the emissions stakes of China's Belt & Road initiative (BRI), the massive collection of infrastructure projects that spans several continents.
Why it matters: The multi-decade project formally launched in 2013 aims to project China's economic interests through a network of infrastructure projects that include shipping ports, railways and highways, Isabel Hilton, writing for Yale Environment 360, argues: "BRI has the potential to transform economies in China’s partner countries. Yet it could also tip the world into catastrophic climate change."
Where it stands: She notes that the project will "absorb massive amounts of concrete, steel, and chemicals, creating new power stations, mines, roads, railways, airports, and container ports, many in countries with poor environmental oversight."
- But her biggest focus is on the initiative's connection to Chinese-backed plans to expand coal-fired power construction in other countries — even as it takes steps to curb domestic air pollution and carbon emissions.
The big picture: "China may be pursuing eco-civilization at home, but it urgently needs to address the global risks it is creating in the Belt and Road Initiative," Hilton writes.
6. How China could dominate science
China "is more than ever consumed by the pursuit of national greatness," The Economist writes in its lead editorial:
- "China's landing of a spacecraft on the far side of the Moon on January 3rd, a first for any country, was a mark of its soaring ambition."
- "President Xi Jinping is counting on being able to harness leading-edge research even as the Communist Party tightens its stranglehold on politics."
- We should be doing this: "Xi talks of science and technology as a national project."
Why it matters: "Amid the growing rivalry between China and America, many in the West fear that he will succeed."
7. Worthy of your time
Ian Johnson - Foreign Affairs - How the State Is Co-Opting Religion in China
The New York Times - China Targets Prominent Uighur Intellectuals to Erase an Ethnic Identity
ChinaFile - Where Did the One Million Figure for Detentions in Xinjiang’s Camps Come From?
Jamestown - Beyond “Debt-Trap Diplomacy”: The Dissemination of PRC State Capitalism
War on the Rocks - The Party Congress Test: A Minimum Standard for Analyzing Beijing’s Intentions
60 Minutes - CBS News - Chinese Spy: How a former CIA officer was caught betraying his country
The Washington Post - Why U.S. universities are shutting down China-funded Confucius Institutes
South China Morning Post - Chinese parents clash with police as they demand answers over children’s vaccine scandal
Israel National News - Shin Bet chief: Chinese influence in Israel is 'dangerous'
China Narrative - NYC Migrant Recalls Fleeting Romance, Brush with Chinatown Underworld
BBC News - A woman's murder in Peking and a literary feud
This week's issues of my Sinocism China Newsletter, now with a special 20% discount for Axios readers.