Axios China

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Welcome back to Axios China. Today we've got Falun Gong internet tools, China's energy growth, media restrictions, and lots more.

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Today's newsletter is 1,720 words, a 6-minute read.

1 big thing: A push for Falun Gong-backed internet tools

Illustration of an open padlock with the Chinese flag on it
Illustration: Annelise Capossela/Axios

In the wake of a leadership change at the U.S. Agency for Global Media (USAGM), a small group of religious freedom advocates is trying to secure millions of dollars in funding for two internet censorship circumvention tools developed by supporters of the Falun Gong, a religious group banned in China.

Why it matters: In recent years, Falun Gong supporters have made common cause with the global far-right, and a growing rapport between its advocates and U.S. ultra-conservatives within USAGM could override internal vetting processes and channel funding toward pet projects.

What's happening: After Trump appointee and Steve Bannon ally Michael Pack took over at USAGM last week, he fired the heads of its media agencies and replaced board members with administration loyalists who have no international broadcasting experience.

  • The shake-up is fueling concerns that the takeover might herald a politicization of U.S. government media.
  • Pack also fired Libby Liu, head of the Open Technology Fund, an organization under USAGM oversight that helps develop internet privacy and censorship circumvention tools such as Signal, a widely used encrypted messaging service.

Details: It's the Open Technology Fund's purse that advocates of UltraSurf and Freegate, tools developed and supported by Falun Gong affiliates, hope will now open up.

  • UltraSurf and Freegate are internet censorship circumvention tools that some users in China and other authoritarian regimes have long used to gain access to censored websites.
  • The Broadcasting Board of Governors, USAGM's predecessor, previously directed funding to UltraSurf, but stopped after UltraSurf's developers refused to comply with an independent security audit, part of the fund's mandatory process for all its funding recipients.
  • Christian and religious liberty groups in the U.S. have helped promote UltraSurf to U.S. politicians, arguing that Christians and other persecuted religious groups in China, including the Falun Gong, need it in order to access the unfettered internet.

Among UltraSurf's strongest backers are Katrina Lantos Swett of the Lantos Foundation for Human Rights and Justice and Michael Horowitz, who formerly directed the Project for International Religious Liberty at the Hudson Institute.

  • Horowitz, who has promoted UltraSurf for over a decade, appeared on Bannon's radio show "War Room" one week before the USAGM dismissals and called on Liu to be fired. Bannon repeated her name and appeared to write it down while on air.

What they're saying: Both Swett and Horowitz have cast UltraSurf and similar programs as tools that could potentially tear down the Great Firewall, China's system of internet censorship, and perhaps even topple the Chinese Communist Party itself.

  • "We believe that the great firewall of China is the Berlin Wall of our time," Swett told Axios in an interview, adding that Beijing censors the internet out of the belief that "their current repressive autocratic system cannot survive freedom."

But, but, but: It's not that simple, say experts in internet privacy and censorship circumvention.

  • China's internet censorship is advanced and well-funded, and no single tool, or even type of tool, is sufficient to meet the many different needs of users behind the Great Firewall, a person familiar with censorship circumvention tools told Axios.

Background: The Falun Gong is heavily persecuted in China but has flourished outside of China's borders, operating a global media empire that includes the Epoch Times.

  • In recent years, the Epoch Times has thrown its support behind the far-right agendas of ascendant populist, anti-immigrant parties in the U.S. and Europe.
  • It is now recognized as a part of the pro-Trump alternative media ecosystem.

The bottom line: A far-right takeover of an independent U.S. government agency may allow once-fringe ideas promulgated by a controversial religious group to become official policy.

Bonus chart: China led the world in energy growth in 2019

Data: BP; Chart: Axios Visuals
Data: BP; Chart: Axios Visuals

BP's big annual energy data compendium provides a window into the remarkable growth of China's footprint in global energy markets, writes Axios' Ben Geman.

The big picture: "China was by far the biggest individual driver of primary energy growth [in 2019], accounting for more than three quarters of net global growth," the report notes.

  • China is now the world's second-largest LNG importer behind Japan and the largest overall gas importer.

2. More Chinese media outlets deemed "foreign missions"

Secretary of State Mike Pompeo speaks during a news conference at the State Department in Washington,DC on June 10, 2020.
Mike Pompeo. Photo: Andrew Harnik/Pool/AFP

Four more major Chinese state-owned media outlets will be required to inform the U.S. State Department of their personnel rosters and real-estate holdings as if they were foreign embassies, Axios' Marisa Fernandez and I report.

Driving the news: The restrictions will apply to the Global Times, China Central Television, China News Service and People’s Daily, bringing the total to nine Chinese state media outlets labeled by the Trump administration as arms of the Chinese government.

The big picture: This is the latest step in a media war between the U.S. and China that has escalated during the pandemic.

  • The Trump administration has touted the principle of reciprocity, justifying restrictions on Chinese journalists in the U.S. by saying there should be consequences for China's long-standing harassment of U.S. journalists in China.

Yes, but: The costs imposed aren't symmetrical. The Chinese government doesn't support the ideal of freedom of the press and has little interest in standing up for the rights of Chinese journalists in the U.S.

  • But U.S. journalists in China have published ground-breaking investigative reports that provide vital information to the rest of the world about what's happening in China.

What to watch: Expect retaliation from the Chinese side, especially given that China still hasn't responded to the Trump administration's most recent decision concerning visas.

3. Trump held off on Xinjiang sanctions for China trade deal

Illustration of hands behind bars made up of stacked rolls of money. 
Illustration: Aïda Amer/Axios

President Trump told Axios' Jonathan Swan that he held off on imposing Treasury sanctions against Chinese officials involved with the Xinjiang mass detention camps because doing so would have interfered with his trade deal with Beijing.

Driving the news: Asked why he hadn't yet enacted Treasury sanctions against Chinese Communist Party officials or entities tied to the mass detention camps where the Chinese government detains Uighurs and other Muslim minorities, Trump replied, "Well, we were in the middle of a major trade deal."

  • "And I made a great deal, $250 billion potentially worth of purchases. And by the way, they're buying a lot, you probably have seen."
  • Trump continued: "And when you're in the middle of a negotiation and then all of a sudden you start throwing additional sanctions on — we've done a lot. I put tariffs on China, which are far worse than any sanction you can think of."

The big picture: China hawks in the Trump administration have privately expressed frustration that the president hasn't used the Global Magnitsky Act to sanction Chinese officials for what many consider one of the worst human rights atrocities of this era.

4. What I'm reading

The view from New Delhi: After China border fight, India likely weighs closer U.S. military ties (Wall Street Journal)

  • "Once staunchly determined to remain nonaligned—a term that defined India’s foreign policy for much of its first 50 years of existence—the South Asian nation has built closer ties to Washington. Recently it has also expanded defense relations with U.S. allies Japan and Australia as part of what has been dubbed the quadrilateral, or quad, dialogue."

Fears confirmed: China security law to override Hong Kong legal system (Bloomberg)

  • China revealed details of its new national security law, and it's just as bad as people feared. Beijing will establish its own national security office in Hong Kong, and the new law will prevail in case of any conflict with existing Hong Kong law.

Blackness in China: Why China's hip-hop stars are staying silent on Black Lives Matter (Inkstone News)

  • "Hip hop is closely tied to the struggles of the African-American community, and has played a key part in their fight for civil rights. But in China, many hip-hop artists do not see themselves as carrying the torch of black music. Instead, they are just riding an international music trend and adapting it to a Chinese context."
  • Author Viola Zhou also writes that anti-black racism in China, as well as censorship fears, have contributed to the seeming indifference.

Race to the Bottom: Xiang Lanxin, "On Wolf Warrior Diplomacy" (Reading the China Dream)

  • "It is not difficult to see how the Chinese—both the government and the common people—would find US Secretary of State Mike Pompeo’s accusations, for instance, gallingly insulting, because they are. That said, beyond the emotional satisfaction of punching back, this 'diplomatic race to the bottom' will not be good for the world, or for China, Xiang insists."

5. 1 book thing: An insider's view of the trade war

The cover image of the book Superpower Showdown by Bob Davis and Lingling Wei
Image: Harper Business

If you've ever wished you were a fly on the wall as top leaders in the U.S. and China were considering how to parry their counterparts' most recent moves, here's your big chance.

The book: "Superpower Showdown: How the Battle Between Trump and Xi Threatens a New Cold War" (HarperCollins, June 2020), by Wall Street Journal reporting duo Bob Davis and Lingling Wei, takes you behind the scenes of some of the biggest decisions over the past 25 years of the U.S.-China trade relationship.

Those moments include:

  • Bill Clinton's decision not to revoke China's most-favored nation status after the Tiananmen Square massacre.
  • China's entry into the World Trade Organization, the role of U.S. businesses as Beijing's biggest backers, and the sense of betrayal that human rights advocates felt at the time.
  • And of course, plenty of juicy detail about how both Trump and Xi, and their negotiators, hashed out tariffs, retaliations, strategy and concessions over the past three years.

Bonus: The book starts out with an incredible reveal, at least for those of us who have watched China for years: What Xi Jinping was really up to during the two weeks that he mysteriously disappeared in late 2012. (No spoilers: Go read the book to find out!).

Zoom in: Each side of the current trade war suffered from a major misunderstanding of the other side.

  • "They think of the world like it's 1952 and the U.S. just won World War II," Davis told me in an interview. "But in 1952, the U.S. was more generous to the rest of the world."
  • "The biggest thing the Chinese side missed was how much of a change there was in Washington towards China," Wei said. "It wasn’t just the Trump administration, it wasn’t just Republicans. It crossed party lines. It took them quite a while to realize that."

The bottom line: Both the U.S. and China thought the trade conflict would be easier to resolve than it has been, Wei and Davis told me, because both sides overestimated the leverage they had over the other.

Go deeper: Wei, who was recently expelled from China along with a dozen other U.S. journalists, wrote a touching personal essay about her journey to becoming a U.S. citizen, returning to China to report, and now being forced to leave her family there.

P.S.🍺 It's summer, and summer means cold beer, and in China, beer means Tsingtao — the Chinese brewery with colonial German roots.

  • Every year since 1991, the coastal city of Qingdao, home of the eponymous beer, has held a beer festival that's gotten larger and larger over time.
  • But this summer, we all have to reckon with a pandemic. Do any Axios China readers in Qingdao know what contingency plans the city may be considering? Somehow a beer festival doesn't seem like the kind of event that will transition well to Zoom...

Editor's note: This first item in this newsletter has been corrected to reflect that it was the Broadcasting Board of Governors that previously directed funding to UltraSurf (not the Open Technology Fund).