Jul 14, 2020

Axios China

Welcome back to Axios China. Today we've got Chinese student visa fears, Neil Bush's China links, an Iran-China deal, and lots more.

  • 🎧 I spoke with "Axios Today," our morning news podcast, about potential restrictions on international student visas amid the pandemic. Listen here.
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Situational awareness: The U.K. just banned mobile providers from purchasing Huawei equipment, and it's requiring all Huawei equipment to be removed from the country's networks by 2027.

Today's newsletter is 1,621 words, a 6-minute read.

1 big thing: Chinese students in the U.S. face growing uncertainty

Illustration: Annelise Capossela/Axios

A new visa guideline issued last week would strip international students in the U.S. of their student visas if their college classes are online-only amid the pandemic.

Why it matters: More than 360,000 Chinese students are enrolled at U.S. colleges. Many of them could be forced to return to China if the rule change is implemented.

Driving the news: The policy has attracted intense criticism, and 17 states and the District of Columbia sued the Trump administration over the measure.

Details: Students affected by the policy, unexpectedly announced by U.S. Immigration and Customs Enforcement last week, would have to transfer to a school offering in-person classes or leave the U.S. in order to remain enrolled in their current school.

  • U.S. officials provided no justification for the policy, which could upend the lives of many of the approximately 1 million international students currently studying at U.S. colleges. ICE declined to comment.

Context: The announcement has been particularly difficult for many Chinese students, who have been caught in the middle as U.S.-China bilateral ties have rapidly deteriorated over the past year.

  • "I was just a complete wreck" upon hearing the ICE announcement, said one Chinese graduate student currently in the U.S., who spoke to Axios on the condition of anonymity due to sensitivity over their visa status. "I didn’t even think it was physically possible for me to cry that much."
  • "I’ve always had this fear that everything could fall apart," said the student, citing fears over U.S.-China bilateral relations. "And then in one day, it seemed like it did. My worst nightmare came true."

What's at stake: Many international students have dedicated years of their lives, and their families' savings, to a U.S. education and the chance to get valuable work experience through the Optional Practical Training (OPT) program, which allows students to work in the U.S. for one year after graduation.

  • But the OPT program requires at least two consecutive semesters of continuous visa status. If rising seniors lose their visa status and can only attend online classes for the fall semester from outside the U.S., they won't be eligible for OPT.

The online-only model is hard enough for any student. But attending online classes in U.S. time zones while in China means students' daily schedules would be inverted.

  • Iris Li, an undergraduate at Emory University in Atlanta, Georgia, returned home to Beijing during the spring semester after many U.S. colleges switched to an online model amid the pandemic.
  • "By the end of my semester, I was practically living on Atlanta time, writing all night, submitting at noon, sleeping in the afternoon, and going to classes in the evening," Li told Axios.
  • Li said international students need emotional support now more than ever. "I know my school and professors won’t leave me alone. I know they will find ways to speak up for me," Li told Axios.
Bonus chart: TikTok downloads by country
Data: AppTopia; Chart: Naema Ahmed/Axios

President Trump and Secretary of State Mike Pompeo are both talking about banning Chinese social video app TikTok.

  • If the U.S. were to restrict use of the app, it would be following in the footsteps of India, which banned the app last month as part of a broad retaliation against China after a border dispute.
2. New book examines Neil Bush's China links

Image: Hardie Grant Publishing

A new book documents China's influence in North America and Europe, zeroing in on how the Chinese Communist Party co-opts the elite in democratic societies.

Why it matters: Growing scrutiny of China's ties with top business and political figures in the U.S. is making it riskier for them to openly laud Beijing.

In "Hidden Hand: Exposing How the Chinese Communist Party is Reshaping the World," co-authors Clive Hamilton and Mareike Ohlberg argue that the CCP has carefully cultivated elite "friends" abroad who can be relied on to speak up on China's behalf, subtly influencing the policymaking environment.

Beijing's goal: China's leaders have sought to ensure the U.S. doesn't treat China like an enemy, no matter how hard Beijing works to undermine democratic institutions and interests around the world.

  • But the West's strategy of "engagement" with China hasn't worked, Ohlberg told Axios in an interview, and Western leaders need to find a "more principled strategy" than engagement.

Case study: Hamilton and Ohlberg take a close look at Neil Bush, the third son of George H.W. Bush, and his links to China.

  • Bush serves as nonexecutive chairman of SingHaiyi, a real estate company belonging to Gordon Tang and Huaidan Chen, a Chinese couple who attracted attention in 2016 for a $1.3 million donation to Jeb Bush's presidential campaign.
  • Jeb Bush's super PAC was later fined for accepting the illegal foreign donation, which was funneled to the super PAC via a company on whose board Neil Bush sits. (The company, APIC, which is wholly owned by a Chinese company, was also fined.)

What he's saying: Bush has frequently praised China's governance system, repeated common CCP talking points, and decried the recent "demonization" of China in U.S. politics.

  • American-style democracy "would not work for China” and would be "destabilizing," Bush said at a July 2019 forum in Hong Kong.
  • At a December 2019 forum hosted by the Chinese government in Guangzhou, Bush said in an interview with Chinese state broadcaster CGTN that "one country two systems" was working "very very well" in Hong Kong and that "outside influence" was motivating the protesters.

The bottom line: The Chinese Communist Party knows how to reward its friends with access and opportunities.

Read the full story.

3. China-Iran deal envisions massive investments from Beijing

Illustration: Aïda Amer/Axios

China and Iran have negotiated a deal that would see massive investments flow into Iran, oil flow out, and collaboration increase on defense and intelligence, writes Axios' Dave Lawler.

Why it matters: If the proposals become reality, Chinese cash, telecom infrastructure, railways and ports could offer new life to Iran’s sanctions-choked economy — or, critics fear, leave it inescapably beholden to Beijing.

  • The deal has not yet been finalized, but both sides acknowledge it’s in the works (though China has been more circumspect).
  • A leaked draft envisions Chinese-built "airports, high-speed railways and subways," as well as "free-trade zones" in regions of Iran, per the NYT. The deal extends to cyberspace — with China offering "greater control over what circulates" — as well as to defense.
  • The projects total an eye-watering $400 billion over 25 years.

Between the lines: Both sides have clear incentives here: China locks in a cheap oil supply and deepens its strategic links in the Middle East, while Iran — which has virtually nowhere else to turn for foreign investment — gets economic benefits and a big flashing sign that it’s not as isolated as America claims.

What to watch: Even if only a fraction of what has been proposed comes to fruition, this a clear challenge to the Trump administration's "maximum pressure" campaign toward Iran, and another sign of America's geopolitical foes aligning.

4. U.S. pushes homegrown drone industry amid China battle

Illustration: Sarah Grillo/Axios

Alarmed at the prospect of relying on Chinese-made drones for public safety and monitoring critical industries, U.S. investors and the federal government are newly backing a domestic drone industry of hardware and software companies, writes Axios' Ina Fried.

Why it matters: The moves come as the industry continues to be led by DJI, a Chinese hardware maker — and as concerns grow both in China and the U.S. about reliance on the other country's technology.

Driving the news: The U.S. government is giving $13 million to five U.S. companies that are part of the drone industry as part of the COVID-related CARES Act. Skydio received $4 million, with AirMap, ModalAI, Graffiti Enterprises and Obsidian Sensors also receiving funding.

The big picture: Today's global tech industry builds many of its biggest products through a complex interdependence between the U.S. and China, with the U.S. leading the market for core technologies like chips and operating systems and China leading in hardware manufacturing.

  • Amid increasing tensions, both countries have taken long- and short-term measures designed to reduce such dependencies.

Between the lines: Drones are seen as essential to national security given their role in tasks like inspecting bridges, cell towers and power infrastructure as well as their use in emergencies.

  • Critics of DJI, citing fears that Beijing could use drones to spy on or even attack U.S. infrastructure, say that's why the U.S. shouldn't be relying on Chinese drones. (DJI has long maintained its drones pose no risk, noting that government agencies and cybersecurity experts have vetted its gear and found no evidence of security flaws or backdoors.)
5. What I'm reading

Press unfreedom: Hong Kong's national security laws are designed to make the media self-censor (The Guardian)

  • Tom Grundy, founder of Hong Kong Free Press, writes on the enormous pressure journalists in Hong Kong now feel due to the national security law's vague wording.
  • "Each of us has decided that we are ready to face a fine or imprisonment to protect our sources."

Campus struggle: How strained U.S.-China relations are playing out in American universities (SCMP)

  • A nuanced longform look by journalist Eric Fish at how Chinese students at one U.S. campus, the University of Rochester, are dealing with rising fears of China in the U.S., amid the atrocities and authoritarianism back home.

Money comes home: China starts taxing its citizens for global income (Bloomberg)

  • China has not previously enforced tax laws that require Chinese expats to pay taxes on income earned abroad.
  • "The move signals the beginning of what could be a major shake-up for one of the largest expat communities in the world as some could see their tax bills soar."

"Vigil: Hong Kong on the brink" (Columbia Global Reports)

  • A new book by UCI Irvine historian Jeffrey Wasserstrom looks at the roots of Hong Kong's struggle against China's authoritarianism.
6. 1 food thing: China's favorite chili oil ends feud with Tencent

Photo: Lu Junming/VCG via Getty Images

Red, spicy, crunchy, salty. That's how I would describe Laoganma, a brand of chili oil that is ubiquitous in China. Just a little can perk up even the most lackluster dish.

  • But in recent weeks, Laoganma has been embroiled in a very public feud with Chinese tech giant Tencent over advertising fees, news website SupChina writes.

Never mind the details. The important thing is that both companies released a joint statement on July 10, saying they were back in each other's good graces. The future of my favorite chili oil is secure.