May 18, 2018

Axios China

By Bethany Allen-Ebrahimian
Bethany Allen-Ebrahimian

President Trump is keeping everyone guessing in this episode of "China Trade Week" as the two sides continue their talks today.

Thanks for reading, and remember, if you want a daily and deeper look at China please check out my daily Sinocism China Newsletter and follow me on Twitter @niubi.

1 big thing: Liu He's disputed $200 billion offer

Liu He delivers a speech at the annual World Economic Forum in January. Fabrice Coffrini/AFP/Getty Images

China is disputing reports that Vice Premier and Xi Jinping special emissary Liu He offered to meet the Trump administration's request to cut the trade deficit in his talks Thursday in D.C.

Why it matters: "Even if there is a deal to cut the trade deficit by $200 billion, experts say the U.S. can not produce and sell enough goods to China to hit that target," as Bob Davis and Lingling Wei reported in the Wall Street Journal:

  • “'The U.S. is operating at full employment. There isn’t a tremendous amount of underutilized U.S. capacity,'” says Chad Bown, a trade economist at the Peterson Institute for International Economics."

Beijing did offer an apparent concession Thursday when it announced it is dropping the anti-dumping investigation into US sorghum, citing increased costs for Chinese consumers producers.

What's next: The two sides are meeting today, but expectations are low for any imminent deal. President Trump met Liu He on Thursday. That may be a sign of some progress, or at least the president showing respect for Xi's emissary, unlike in early March when Trump snubbed Liu. But any deal would likely be more a pyrrhic victory than an agreement that resolves any of the underlying structural issues.

Linkage to North Korea: Does Trump think Xi and Kim are playing him, with Kim throwing the Singapore meeting in doubt and Xi possibly using the sudden uncertainty, and Trump’s apparent desire to win the Nobel Peace Prize, as leverage to press the US to agree to a weaker trade deal in exchange for China’s help to get the Singapore meeting back on track? The president said Thursday that Xi "could be influencing" Kim.

Foreign Minister Wang Yi is scheduled to visit DC next week, with a focus expected to be on the North Korea situation, not trade.

Go deeper: Christopher Johnson of CSIS asks if the US really understands the leverage it has in these talks in Rebooting U.S.-China Trade Ties: “Enter Ye Through the Narrow Gate”.

2. Xi's omnipresent propaganda empire

Illustration: Rebecca Zisser/Axios

Axios' Erica Pandey writes: China’s powerful and well-funded Department of Propaganda has been tasked with building the same kind of personality cult around Xi Jinping that existed around Mao Zedong — efforts that infiltrate Chinese classrooms and extend beyond the country's borders.

The impact: The department aims to control all the information that Chinese people see and hear — which is why newspaper readers across China this week were instructed to “carve Xi Jinping's speech into our bones and dissolve his spirit into our blood.”

Go deeper: Erica's full story

3. The ideological underpinnings of Xi Jinping Thought

The Australian Centre On China and the World published the translation of a fascinating essay by a Chinese scholar explaining 'Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era 习近平新时代中国特色社会主义思想', its place on PRC history and its function in helping China achieve its "Great Rejuvenation".

Two foreign scholars introduce the translation and explain that:

He offers his own rereading of modern Chinese history, but one in which the CCP once again plays the leading role. Jiang, like Xi Jinping, wants to put an end to the freewheeling audacity of today’s intellectuals and bring them back to the church of Marxism. His narrative is compellingly simple: China stood up under Mao, got rich under Deng Xiaoping 邓小平 (1904-1997), and is now becoming powerful under Xi Jinping. The details of the essay show why this is so and why ‘the Era of Xi Jinping’ will bring to fruition all of these dreams of Chinese wealth and power by 2049, the centenary of the People’s Republic of China (PRC). Jiang goes into some detail to show how the Xi Jinping era fits in the narratives of the history of the CCP, the history of Chinese civilisation, and the history of the international Communist movement. By the middle of the essay this allows Jiang to declare that Xi Jinping’s thought is now the key to China’s contributions to world civilisation. Past and present, China and the world— Jiang integrates everything into a seamless story of how the development and recovery of Chinese agency is bringing about the great rejuvenation of the Chinese nation.

Why it matters: It is not an easy read but it is important to help us understand what Xi and the Communist really mean when they talk about ideology. It is not just empty sloganeering.

Go deeper: Jiang Shigong on ‘Philosophy and History: Interpreting the “Xi Jinping Era” through Xi’s Report to the Nineteenth National Congress of the CCP’

4. The Xinjiang re-education camp archipelago

Researchers and reports have been slowly uncovering the massive scale of political re-education camps housing members of the Muslim minority Uyghur group in the Xinjiang Uyghur Autonomous Region in Western China. Beijing is concerned about separatism, terrorism and Islamic extremism.

Why it matters: The apparent scale of human rights violations is staggering, and yet so far foreign governments have said little. But given China's crackdown of Muslims, will the PRC become nearly as hated across the Muslim world as America? Might drawing the anger of the Muslim world hurt the prospects for the Belt And Road Initiative, and its long game for influence in the Muslim world?

Adrian Zenz, a scholar in Germany, has used official Chinese documents to conclude in a new paper that:

While estimates of internment numbers remain speculative, the available evidence suggests that a significant percentage of Xinjiang’s Muslim minority population, likely at least several hundred thousand, and possibly just over one million, are or have been interned in political re-education facilities.

Gerry Shih of the Associated Press recently interviewed several men who had gone through the political re-education camps:

The internment program aims to rewire the political thinking of detainees, erase their Islamic beliefs and reshape their very identities. The camps have expanded rapidly over the past year, with almost no judicial process or legal paperwork. Detainees who most vigorously criticize the people and things they love are rewarded, and those who refuse to do so are punished with solitary confinement, beatings and food deprivation.

Go deeper: Axios' Erica Pandey on China's long game for Middle East influence

5. #Metoo reaches foreign correspondents in China

The Los Angeles Times suspended its Beijing bureau chief after a second allegation of misconduct (AP):

  • "The newspaper said it has launched an investigation into allegations against Jonathan Kaiman made by a former Wall Street Journal editor. In January, another woman accused Kaiman, who was hired by the LA Times in China in 2015, of sexual misconduct."
  • "Felicia Sonmez, who has reported for the WSJ and Agence France-Presse in China, detailed what she called Kaiman’s 'problematic behavior' in an email shared Tuesday with the Foreign Correspondents’ Club of China."

Mr: Kaiman, in a statement to the LA Times, disputed the allegation:

  • In a statement to The Times, Kaiman, 31, said 'all of the acts we engaged in were mutually consensual.'"
  • "'My perception and Ms. Sonmez's perception of that night's events differ greatly,' he said. 'It's unfortunate that, in hindsight, she feels the way she does about that night. I am a proponent of women's rights and believe that every woman has a right to be heard and to tell her truth.'"

Joanna Chiu, China correspondent at Agence France-Presse (AFP), details her and other women's experiences with badly behaving foreign journalists in Sexpat Journalists Are Ruining Asia Coverage. Among her disturbing experiences:

"I have received multiple unsolicited 'dick pics' from foreign correspondents — generally on the highly monitored messaging service WeChat. I have received multiple unsolicited 'dick pics' from foreign correspondents — generally on the highly monitored messaging service WeChat. Somewhere deep in the Chinese surveillance apparatus there is a startling collection of images of journalists’ genitalia."

Why it matters: Different rules have long applied for media firms' foreign bureaus and companies' foreign subsidiaries. There are more stories to come out.

6. Facebook has several billion reasons to keep Beijing happy

A new research report estimates that Facebook may be generating as much as $5 billion a year from Chinese advertisers (Quartz):

According to a new report by Pivotal Research analyst Brian Wieser, almost 10% of Facebook’s global ad revenue might come from China (paywall). Wieser estimates that Chinese advertisers will spend $5 billion in Facebook ad revenue over the course of 2018, if not more. If his projections prove right, this could make China, after the US, the second-largest country for Facebook ad revenue.

My thought bubble: I am not sure if $5 billion is the right number, but it is plausible and Google harvests in the billions each year selling ads that run outside of the PRC to PRC firms. I remember talking with a Facebook executive several years during his visit to Beijing who when discussing Google's ad revenue from PRC firms made it clear they saw the potential for billions in ad revenue.

7. Tech pioneers not safe from the wrath of techno-nationalists

Liu Chuanzhi, founder of tech giant Lenovo Group, is under fire from techno-nationalist netizens after a post called him "unpatriotic" for not supporting a standard Huawei had submitted as part of its proposal for 5G standards.

Liu issued an open letter to address the charges (Caixin):

  • “Recently there have been a few ‘vicious’ articles making the rounds that have accused Lenovo of ‘selling out China,’” Liu wrote in an open letter posted online on Wednesday. “Such accusations are snowballing and have seriously dented our reputation.”..
  • In the open letter, Liu said Lenovo initially voiced support for the U.S.-proposed LDPC (Low-Density Parity-Check) code during the 3GPP’s meeting in October 2016, but switched to the Polar code camp, led by Huawei, at another meeting a month later.

Lenovo made the decision to support Huawei based on two principles. The first was to protect the company’s interests. The second was to safeguard national and industrial development, Liu explained.

Why it matters: It is just another of the growing technology conflicts between the US and China, and a reminder that while much is government-led, much is also driven by increasing popular nationalism.

8. Worthy of your time

Caixin - Financial Regulatory Staff See Move to Central Bank as Step Down - Caixin

Bloomberg - China’s Crypto-Chips King Sets His Sights on AI

LA Review Of Books - How Britain's First Mission to China Went Wrong

Nieman Journalism Lab - Is there a big enough global audience interested in China to sustain the South China Morning Post’s ambitious new sites?

Abacus - Rage comics banned in China after jokes about a communist martyr

LA Times - Chinese government has 'serious concerns' about USC gynecologist and allegations of misconduct with students

South China Morning Post - China tipped to profit after Donald Trump quits Iran nuclear deal

The New York Times - China, Signaling Thaw With U.S. Over Trade, Approves Toshiba Microchip Deal

Miami Herald - Dominican Republic ditched Taiwan for China. Is Haiti next?

RFA - China Escalates Nationwide Crackdown on Protestant Churches

Recent issues of my Sinocism China Newsletter

Bethany Allen-Ebrahimian

Editor's note: Last week's Axios China misspelled an author's name — Tyler Cowen — in the Worthy of your time section.