China Articles - September 5, 2021
Friends,
Below is this week’s edition of articles and reports on the malign activities of the Chinese Communist Party.
In the ‘Must Read’ section, we start with the latest OpEd from George Soros warning investors about the siren song of the China market. He points out that for years the Party-State has presented the world with material risks that they should not ignore: spanning from genocide to the world’s largest carbon emissions to the quiet nationalization of the same companies that Western investors are so excited about.
Also the New York Times’ Paul Mozur and Chris Buckley report on how the Chinese Ministry of State Security employs teams of hackers to conduct cyber-enabled economic espionage and cyber ransom. I’d like to remind readers that in April 2015, President Obama signed an Executive Order (EO 13694, “Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”) declaring a “national emergency” over Beijing’s cyber-enabled economic espionage and other malicious activities, which opened the door to impose financial sanctions on the perpetrators of these crimes, as well as the financial institutions that support them (Chinese State-owned banks).
Just a few months later in the Rose Garden, Xi Jinping promised President Obama that the PRC would not conduct these activities (in the same Rose Garden event, Xi also promised not to militarize artificial features in the South China Sea). However, multiple indictments by the U.S. Justice Department over the past six years, along with public declarations by various countries around the world attributing these actions to the PRC, show that Beijing continues to commit these crimes and the threat of financial sanctions has not deterred them.
I raise this issue of economic espionage and financial sanctions in connection with George Soros’ OpEd to point out another material risk that companies and investors seem to ignore. When the United States imposes financial sanctions against the PRC for these crimes, the Party will employ its new Anti-Sanctions Law (See #4 from the June 20 Issue of China Articles) to retaliate against companies and investors who are compelled to comply with U.S. law. It is time we all become more familiar with what Professors Henry Farrell and Abraham Newman describe as “Weaponized Interdependence.”
There are some difficult and costly choices ahead, but the worst thing that investors and corporate C-suites can do is to expose themselves and their clients to even greater risk of retaliation by continuing on autopilot with regards to their commercial and financial relationship with the PRC. Of note, major asset managers continue to cheerlead the flow of capital from endowments, pensions, and private investors into the PRC without acknowledging the risks… for example, see the video on this firm’s 2021 midyear outlook that encourages investors to increase their holdings of PRC equities and debt.
Thanks for reading!
Matt
MUST READ
1. George Soros: Investors in Xi’s China face a rude awakening
George Soros, Financial Times, August 30, 2021
…
SEC chair Gary Gensler has repeatedly warned the public of the risks they take by investing in China. But foreign investors who choose to invest in China find it remarkably difficult to recognise these risks. They have seen China confront many difficulties and always come through with flying colours. But Xi’s China is not the China they know. He is putting in place an updated version of Mao Zedong’s party. No investor has any experience of that China because there were no stock markets in Mao’s time. Hence the rude awakening that awaits them.
2. Jude Blanchette on the Enduring Intellectual Puzzle of China
James Chater, The Wire China, August 29, 2021
3. Tencent's messaging platform blocks LGBTQ search terms
Zeyi Yang, Protocol, August 31, 2021
4. Spies for Hire: China’s New Breed of Hackers Blends Espionage and Entrepreneurship
Paul Mozur and Chris Buckley, New York Times, August 26, 2021
The state security ministry is recruiting from a vast pool of private-sector hackers who often have their own agendas and sometimes use their access for commercial cybercrime, experts say.
…
China’s buzzy high-tech companies don’t usually recruit Cambodian speakers, so the job ads for three well-paid positions with those language skills stood out. The ad, seeking writers of research reports, was placed by an internet security start-up in China’s tropical island-province of Hainan.
That start-up was more than it seemed, according to American law enforcement. Hainan Xiandun Technology was part of a web of front companies controlled by China’s secretive state security ministry, according to a federal indictment from May. They hacked computers from the United States to Cambodia to Saudi Arabia, seeking sensitive government data as well as less-obvious spy stuff, like details of a New Jersey company’s fire-suppression system, according to prosecutors.
The accusations appear to reflect an increasingly aggressive campaign by Chinese government hackers and a pronounced shift in their tactics: China’s premier spy agency is increasingly reaching beyond its own ranks to recruit from a vast pool of private-sector talent.
This new group of hackers has made China’s state cyberspying machine stronger, more sophisticated and — for its growing array of government and private-sector targets — more dangerously unpredictable. Sponsored but not necessarily micromanaged by Beijing, this new breed of hacker attacks government targets and private companies alike, mixing traditional espionage with outright fraud and other crimes for profit.
Dylan Patel, SemiAnalysis, August 27, 2021
Authoritarianism
6. Common Prosperity: Decoding China’s New Populism
Nathaniel Taplin and Jacky Wong, Wall Street Journal, August 28, 2021
7. Party Building as Institutional Bricolage: Asserting Authority at the Business Frontier
Daniel Koss, The China Quarterly, August 19, 2021
8. China's New Mandatory Curriculum Focuses on 'Xi Thought'
Bo Gu, Voice of America, August 25, 2021
9. China Limits Online Videogames to Three Hours a Week for Young People
Keith Zhai, Wall Street Journal, August 31, 2021
10. China restricts young people to playing video games three hours a week
Shannon Liao, Washington Post, August 30, 2021
11. English tutors loved teaching kids in China. Now Beijing won’t let them.
Shen Lu, Protocol, August 31, 2021
12. AmCham suspends operations in southwest China at ‘48 hours’ notice’
Sarah Zheng and Wendy Wu, South China Morning Post, August 31, 2021
13. China culture crackdown a sign of 'profound' political change
Reuters, August 31, 2021
14. Meituan chief adopts Xi Jinping’s wealth redistribution rhetoric
Sherry Fei Ju, Financial Times, August 30, 2021
15. Chinese media back diatribe calling for crackdown to be expanded
Edward White, Financial Times, August 31, 2021
16. ‘Xi Jinping Thought’ school lessons alarm Chinese parents
Sun Yu, Financial Times, August 28, 2021
17. China’s anti-corruption watchdog slams entertainment industry
Thomas Hale, Financial Times, August 29, 2021
18. China to Cleanse Online Content That ‘Bad-Mouths’ Its Economy
Bloomberg, August 28, 2021
19. VIDEO – The Extreme 996 Work Culture in China
VICE Asia, August 28, 2021
Environmental Harms
20. Wind Wars
Luke Patey, The Wire China, August 29, 2021
21. China's Belt and Road Project Causing Environmental Damage In South Asia
NDTV, August 26, 2021
22. Environmental Degradation in South Asia and China’s Belt and Road Initiative
European Foundation for South Asian Studies, August 2021
23. Pangolins and a Pandemic: The Evolving Chinese Wildlife Trade
Sarah Salisbury, US-China Today, August 18, 2021
24. China Briefing, 26 August 2021: Closed coal mines reopened
Carbon Brief China Briefing, August 26, 2021
Foreign Interference and Coercion
25. Meth, Vanilla and ‘Gulags’: How China Has Overtaken the South Pacific One Island at a Time
Susannah Luthi, Politico, August 8, 2021
26. Sinopharm Covid Vaccine Seen as Less Effective in Bahrain Study
Stephen Kalin, Wall Street Journal, August 28, 2021
27. China's Magic Weapon, review: Jane Corbin's documentary played out like a sickening true-life thriller
Ed Power, The Telegraph, August 8, 2021
28. Huawei employs more lobbyists in the EU than US Big Tech
Masha Borak, South China Morning Post, August 31, 2021
29. How Hackers Hammered Australia After China Ties Turned Sour
Jamie Tarabay, Bloomberg, August 30, 2021
30. Chinese social media platforms to "rectify" financial self-media accounts
Reuters, August 28, 2021
31. VIDEO – China's Magic Weapon
BBC 2, August 23, 2021
32. AUDIO – China's Microsoft Hack May Have Had a Bigger Purpose than Just Spying
Dina Temple-Raston, NPR, August 26, 2021
Human Rights and Religious Persecution
33. Human rights claims undermine China's investment abroad, report finds
Reuters, August 10, 2021
34. Cultural Genocide Now Starts in Kindergarten
Hu Zimo, Bitter Winter, August 17, 2021
35. Wiley Medical Journal Accused of Publishing Racist CCP Papers
Massimo Introvigne, Bitter Winter, August 28, 2021
36. Chinese university appears to ask for lists of LGBTQ+ students for ‘investigation’
Vincent Ni and Helen Davidson, The Guardian, August 29, 2021
37. Gay Games in Hong Kong face attacks as China’s proxies target LGBT groups
Theodora Yu, Washington Post, August 31, 2021
38. To survive, China’s biggest gay dating app became a pharmacy
Andrew Deck and William Yang, Rest of the World, August 27, 2021
39. Alibaba Fires 10 for Leaking Sexual Assault Accusations
Zheping Huang, Bloomberg, August 30, 2021
40. Afghanistan's Uyghurs fear the Taliban, and now China too
Joel Gunter, BBC, August 27, 2021
41. Roundtable On Human Rights Challenges Relating to the Cotton Value Chain
Francesca Fairbairn, Institute for Human Rights and Business, August 20, 2021
Industrial Policies and Economic Espionage
Michelle Celarier, Institutional Investor, August 2, 2021
43. ARM China Seizes IP, Relaunches as an ‘Independent’ Company
Joel Hruska, ExtremeTech, August 30, 2021
44. After Beijing Takes ByteDance Board Seat, Tencent and Alibaba May Be Next
Shai Oster and Juro Osawa, The Information, August 23, 2021
45. China Evergrande Says Construction of Some Projects Has Stalled, Warns of Possible Default
Xie Yu, Wall Street Journal, August 31, 2021
46. One Stuck Container in Shanghai Reveals a Global Supply Chain in Crisis
Ann Koh, Bloomberg, August 30, 2021
47. China’s new data laws are a risk factor in a facial-recognition giant’s IPO filing
Jane Li, Quartz, August 30, 2021
48. The Rise and Fall of the World’s Ride-Hailing Giant
Raymond Zhong and Li Yuan, New York Times, August 27, 2021
49. Investors shun Chinese high-yield debt after Evergrande shock
Thomas Hale, Financial Times, August 30, 2021
Michelle Celarier, Institutional Investor, August 9, 2021
Cyber & Information Technology
51. China orders state firms to migrate to government cloud data services
Frank Tang, South China Morning Post, August 28, 2021
52. Beijing has a new legal architecture for sweeping control over user data
Jane Li, Quartz, August 30, 2021
53. China orders state firms to migrate to government cloud data services
Frank Tang, South China Morning Post, August 28, 2021
54. Will the Music Stop for Tencent?
Eliot Chen, The Wire China, August 29, 2021
Military and Security Threats
55. Taiwan says China can 'paralyse' its defences, threat worsening
Yimou Lee, Reuters, September 1, 2021
56. Taiwan, Japan Urged to 'Stand Together' As China Threat Prompts Security Talks
John Feng, Newsweek, September 1, 2021
57. Japan, Taiwan Lawmakers Discuss China Threat
Shannon Tiezzi, The Diplomat, August 28, 2021
58. Mind the Gap: How China’s Civilian Shipping Could Enable a Taiwan Invasion
Thomas Shugart, War on the Rocks, August 16, 2021
One Belt, One Road Strategy
59. Protests in Pakistan erupt against China’s belt and road plan
Shah Meer Baloch, The Guardian, August 20, 2021
60. Human rights abuses claimed in hundreds of China belt and road projects
Kinling Lo, South China Morning Post, August 11, 2021
61. Pakistan replaces its Belt and Road chief with Beijing favorite
Adnan Aamir, Nikkei Asia, August 8, 2021
Opinion Pieces
62. China’s ‘Very Tricky Situation’
Timothy McLaughlin, The Atlantic, September 2, 2021
63. Minxin Pei on why China will not surpass the United States
The Economist, August 30, 2021
64. Mao’s Revolution Threatens Xi’s ‘China Dream’
Michael Sobolik, The National Interest, August 29, 2021