LAC Talks & Transgressions – Taiwan Tensions – US-China Engagement – CIA’s China Focus – Fu Zhenghua & Sun Lijun Corruption Cases – China-Pak Space Cooperation – Xi’s 20th Congress Pitch

By: Manoj Kewalramani

Dear Subscribers,

I hope this finds you all well. I’m trying something a little different with today’s newsletter by clubbing together some key themes in one longish section.

As you are aware, it was the National Day golden week in China. So, it was a slow domestic news week. But I think we’ve got the big stories covered in the newsletter.

In addition, I’d like to share my latest piece on India-China ties. TLDR: I am not optimistic: “Great chasm of China: Beijing’s rhetoric and action are far apart, and change seems unlikely

Cheers,

Manoj


The Boundary Situation

The 13th round of Corps Commander-level talks between India and China are being held in Eastern Ladakh today. Prior to the talks, Shishir Gupta reported for HT that “de-escalation from patrolling point 15 or general area Hot Springs {is} on the agenda. According to people familiar with the matter, the senior military commanders will take up remaining points of friction in East Ladakh, including Depsang Bulge and Charding Nullah Junction in South Demchok, one at a time. If the two decide to come to an agreement (most plausible) on de-escalation from Hot Springs, the PLA aggression of May 2020 will be reversed with the status quo intact in East Ladakh. As of now, some 50 PLA personnel are ahead for their positions at patrolling point 15 with an equal number of Indian Army troops facing them at a distance.”

Speaking at the eve of the talks during the India Today conclave, Indian army chief General Manoj Mukund Naravane said that “It is a matter of concern that the large-scale build-up, which had occurred, continues to be in place. And to sustain that kind of build-up, there has been an equal amount of infrastructure development on the Chinese side…It means that they are there to stay…But if they are there to stay, we are there to stay too. And the build-up on our side, and the developments on our side, are as good as what PLA has done.” He added that India is “keeping a close watch on all those developments”. If Chinese troops continue to stay there for a second winter, he said, it will “definitely mean that we will be in a kind of LC situation” though “not an active LC as is there on the western front.”

You can watch the full interview with the General Naravane below

In the first week of October, General Naravane had also visited “forward areas” in Eastern Ladakh.

Also note this ET report, which tells us that the Indian government “is examining a proposal to recruit 10,000 additional troops for the Indo-Tibetan Border Police (ITBP), to be deployed along the Line of Actual Control (LAC) with China. The new recruits will be responsible for guarding 47 border out-posts (BOPs), sanctioned by the Union cabinet in 2020…The new battalions, officials said, would help the border guarding force to better rotate troops from forward locations to units in the mainland. Currently, the troops are rotated every three months. At present, there are 180 BOPs, each with a strength of about 140 soldiers at each outpost.”

Earlier this week, there were reports of a face-off between the two armed forces in the Eastern Sector. The Hindu’s Dinakar Peri reported that “Some Chinese soldiers of a large patrol team were detained for few hours by the Indian Army after such teams of the sides were engaged in a minor face-off and clashed near Yangtse in Tawang Sector of Arunachal Pradesh last week.” News18’s Amrita Nayak Dutta reported that the incident happened as some 200 PLA soldiers “crossed over into the Indian side from Tibet and attempted to damage unoccupied bunkers” The incident took place near the border pass of Bum La and Yangtse, close to the Line of Actual Control. There’s no official statement from the Indian army. But both reports quote unidentified sources to make the point that the transgressions can be attributed to differences in perception of the LAC.

There has been no official Chinese comment on this incident yet too. But China Daily reported, citing a PLA source, that Chinese border troops conducting “routine patrols” in the Dongzhang area had been “unreasonably blocked by the Indian side.” The report adds that “Indian media’s recent hype about Chinese soldiers being detained for ‘crossing the line’ is false and inconsistent with the facts. In this incident, the Indian side first deliberately provoked and then distorted and discredited the Chinese side, seriously violating bilateral agreements.” 印媒最近关于中国士兵“越线”被扣的炒作子虚乌有, 与事实不符. 此次事件,印方蓄意挑衅在先,歪曲抹黑在后,严重违反双边协议协定,责任完全在印方.

Do also note that late in September, Manu Pubby had reported for the Economic Times that on August 30, some 100 PLA soldiers crossed the border at Barahoti in Uttarakhand, damaging some infrastructure, including a bridge, before retreating. The report explained that “while Barahoti has not been a major border flashpoint in recent years – minor transgressions are often reported – the place was the first area which saw transborder intrusions by the Chinese, in 1954, which later expanded to other areas and culminated in the 1962 war. The incident on August 30 did not result in a face-off as PLA soldiers returned before they could be confronted. Over 100 soldiers and 55 horses transgressed over 5 km of Indian territory by crossing the Tun Jun La Pass, security establishment insiders told ET.” The report adds: “it is believed that the group stayed in the vicinity for around three hours. Since the area is a demilitarised zone, the presence of a large number of PLA soldiers led to concern within the security establishment. Sources said the transgression was reported by locals following which teams from ITBP and Army sent across a patrol to verify. However, the Chinese troops vacated before the patrol reached the area, it is learnt.”

The first highlighted bit above suggests that there were other transgressions after the one on August 30 too. In essence, what we are seeing is tension escalating along all sectors. Now one could look at this narrowly and say that perhaps this is pressure to exact a favorable deal in Eastern Ladakh. Or one could look at this as a pattern, which seeks to potentially establish a new status quo across the entire boundary. I would wager on the latter.

Also Read this really good round-up by Pranav Sharma in SCMP. Captures the broader dynamic well, despite disengagement from specific points. China-India border: New Delhi redirects Pakistan-facing troops, tanks before 13th round of LAC talks

Meanwhile, Indian Foreign Minister S. Jaishankar also spoke at the India Today conclave. Here’s his comment about the LAC situation:

“There is still no credible explanation as to why they chose to bring that size of forces to that sector of our border. If attempts are being made to unilaterally change the LAC status quo and large forces are brought to the border in contravention of written agreements, then obviously the relationship will be impacted. If we need to get back to the normal relationship, which they said they want, and which both of us believe is in our mutual interest, then they need to stick with the agreements and do the right things. We have had progress in a few areas. But the larger problem remains which is a very sizeable Chinese force close to, if not at, the LAC.”

Staying with military issues, General Zhang Xudong, who had been in charge of the Western Theatre Command from December 2020 to June 2021, has died. Zhang was reportedly suffering from cancer and problems with his gastrointestinal tract. Zhang was succeeded by General Xu Qiling in June as WTC chief, who later was succeeded by General Wang Haijiang. The SCMP report on this also quotes an unidentified source as saying that “[Xu] also has some problems linked to his gastrointestinal tract. That’s why he left his post just two months after the appointment to the Western Theatre Command.”

US-China-India

The second broad theme that I’d like to cover today is the dynamic between the US, China and India. US Deputy Secretary of State Wendy Sherman visited India this week. She met with Foreign Secretary Harsh Shringla and Minister Jaishankar. The State Department’s readouts (with FS and with FM) tell us that China figured during the conversations. This line I thought was also interesting: “The Deputy Secretary assured the Foreign Secretary of the United States’ ongoing commitment to India’s national security.” Sherman traveled to Pakistan from India. The Indian readout does not mention the PRC specifically. Speaking during the visit, Sherman said that:

“Regarding the PRC (People’s Republic of China) we have been clear, we are ready to compete and compete vigorously, but we want a level-playing field…We’ll compete vigorously with China where we should, we will cooperate with China where it’s in our interest to do so. I am sure the same is true for India…We will challenge China where we must — where it undermines our interests and interests of our partners and allies or threatens the rules-based international order.”

This is important to note because we are finally beginning to see some change in the US’ China policy under Biden. Sherman’s visit to India coincided with increased Sino-US engagement, given the meeting between NSA Jake Sullivan and Yang Jiechi and a chat between USTR Katherine Tai and Vice Premier Liu He. There’s also talk of a meeting (online) between Biden and Xi.

As per the US readout of the Yang-Sullivan meeting in Zurich, which lasted six hours apparently, “Mr. Sullivan also raised areas where the United States and the PRC have an interest in working together to address vital transnational challenges, and ways to manage risks in our relationship. Mr. Sullivan raised a number of areas where we have concern with the PRC’s actions, including actions related to human rights, Xinjiang, Hong Kong, the South China Sea, and Taiwan. Mr. Sullivan made clear that while we will continue to invest in our own national strength and work closely with our allies and partners, we will also continue to engage with the PRC at a senior level to ensure responsible competition.” — Let’s see what this concept evolves into. 

The Chinese foreign ministry said that this meeting was “constructive, and conducive to enhancing mutual understanding.” The “two sides had a comprehensive, candid and in-depth exchange of views on China-US relations and international and regional issues of common concern.” They also “discussed during the meeting a video conference between the two heads of state before the end of this year.” Also, “China hopes the US side could adopt a rational and pragmatic China policy, and, together with China, respect each other’s core interests and major concerns, and follow a path of mutual respect, peaceful coexistence and win-win cooperation.” Yang apparently also told Sullivan that “China opposes defining China-US relations as ‘competitive’.”

Earlier in the week on Monday, Tai spoke at CSIS outlining the Biden administration’s trade policy with regard to China. There was little new that was announced, to be fair. WSJ reports that she said the “US would press China to carry out pledges it made as part of the Phase One accord signed in January 2020—including by maintaining steep tariffs put in place by Mr. Trump…But she said there were no plans to launch an investigation into Chinese trade practices, which had been under discussion within the administration…At the same time, she said, the US will reopen a process for US companies to seek exemptions from tariffs. That exemption process ended after President Biden took office, drawing complaints from manufacturers and others who say they have no cost-effective alternatives to certain Chinese components. Taking questions after her speech, Ms. Tai said the US wouldn’t take any specific new actions until after she has talked with her Chinese counterpart, Chinese Vice Premier Liu He. She declined, for instance, to start enforcement action allowed under the Phase One deal. She also deferred for now an administration plan to start a trade action aimed at getting China to reduce its use of industrial subsidies.” 

My short take: Basically, it sounds like there’s an effort to not escalate but also not give away what is seen as leverage on trade. I am not quite sure if the tariffs really offer any serious leverage, but easing them unilaterally will entail political costs at home. So doing that might be tough. But I guess the hope is that signalling a desire to not escalate can be seen as a message to Beijing that the Biden administration wants to engage. In this assessment, I disagree with the good folks at NYT who argue that the speech implied that the “United States’ combative economic approach toward China would continue.” Amid this, do also note this SCMP report, which argues that the White House has also indicated that it is not pushing for talks on a possible phase two deal, with senior officials conceding in a separate call earlier this week that they did not expect China to make “meaningful reforms” in areas such as industrial policy. Instead of expecting China to make significant reform to its industrial policies, US officials said earlier this week they would focus on diversifying markets, bolstering ties with allies, and working to increase US competitiveness.

Tai also spoke to NPR about US trade policy with regard to China, and honestly, it seems like much is still unclear. For instance, here’s her response distinguishing Biden’s trade policy from Trump’s. I couldn’t make any sense of this.

“Let me take this opportunity to distinguish what we’re doing from the Trump administration, which is to say this. In terms of laying out a vision today, that is and has been a Biden administration priority – to define the problem in the U.S.-China trade relationship clearly for everyone, to lay it out so that we can then lay out our goals in terms of what we are trying to effectuate. In trade policy, we take a holistic approach that trade policy must stay lodged at the intersection of our foreign policy and our domestic economic policy. And those are things that the Biden administration is bringing to shaping the U.S.-China trade relationship and ensuring that we take steps to defend the interests of America’s workers and businesses and farmers.”

For those interested in a granular look at the US-China trade dynamic, this thread is great:Chad P. Bown @ChadBownUSTR Katherine Tai gave an important speech today describing the Biden administration’s new approach to the US-China trade relationship. Tai highlighted the need to enforce Beijing’s commitments under the Phase One agreement. My latest explains why 1/🧵 piie.com/blogs/trade-an…Why Biden will try to enforce Trump’s phase one trade deal with ChinaAfter eight months of reviewing the legacy of former President Donald Trump’s trade war with China, the Biden administration has decided to hold China’s feet to the fire on at least one important aspect of that confrontation.piie.comOctober 4th 202166 Retweets120 Likes

Anyway, later in the week, Tai spoke to Liu He. The USTR readout says that they underscored the “importance of the bilateral trade relationship and the impact that it has not only on the United States and China but also the global economy.” They also “reviewed implementation of the U.S.-China Economic and Trade Agreement and agreed that the two sides would consult on certain outstanding issues. In addition, Ambassador Tai emphasized U.S. concerns relating to China’s state-led, non-market policies and practices that harm American workers, farmers and businesses.” 

The Chinese readout said that the talks were “pragmatic, candid and constructive.” Xinhua says that three areas were touched. “First, China-U.S. economic and trade relations are of great importance to the two countries and the world at large and bilateral economic and trade exchanges and cooperation should be strengthened. Second, the two sides exchanged views on the implementation of the China-U.S. economic and trade agreement. Third, both sides expressed their core concerns and agreed to resolve each other’s legitimate concerns through consultation. The Chinese side lodged representations on the lifting of additional tariffs and sanctions and expounded its position on such issues as China’s economic development model and industrial policy. The two sides agreed to continue to communicate in an attitude of equality and mutual respect…”

Do also note this comment by Ambassador Qin Gang:Qin Gang 秦刚 @AmbQinGangThe US now seeks to “recouple” with China, which has some positivity in it. The two sides can sort out the areas of decoupling & how to get them “recoupled”. We are willing to talk with the US & expand the positive side on the basis of mutual respect & win-win cooperation, October 10th 202146 Retweets229 Likes

Now, from an Indian perspective, all of this is relevant in more ways than one. But it’s important to note that there is an effort at engagement between Washington and Beijing, and this will lead to discussions about reliability and sustainability of the India-US partnership. Both sides need to be cognisant of this. Beijing, of course, will push this line. For instance, this report by Global Times’ Wang Wenwen. She writes:

“In the eyes of the US, allies are ranked into different classes. While it views English-speaking countries like the UK and Australia as real allies, allies such as Europe and Japan are more like stakeholders. As for India, it is just an anti-China frontier created by the US – the US does not truly trust India, nor will it care for India’s interests. India must have noticed the signs of easing of China-US relations in the last few days. US Trade Representative Katherine Tai said in a speech on Monday that the US will hold “frank conversations” with China on trade in the near future. On Wednesday, Yang Jiechi, Member of the Political Bureau of the CPC Central Committee and Director of the Office of the Central Commission for Foreign Affairs, met with US National Security Advisor Jake Sullivan in Zurich, Switzerland, which analysts generally believe was productive. As the Biden administration’s China policy is becoming pragmatic, India’s position seems to be embarrassing.”

The report also quotes Long Xingchun, a senior research fellow with the Academy of Regional and Global Governance at the Beijing Foreign Studies University, as asking: “Will the US give preferential treatment to Indian goods? Will the US provide convenience to Indian IT professionals who go to work in the US? Will the US encourage its manufacturing to transfer to India to boost India’s economic development? Will the US respect India’s autonomy in purchasing weapons?…Indian politicians should be wise enough to tell India’s true status and weight in US strategy.” 

My short take: Rather than looking at the above and dismissing it as meaningless, expected Chinese propaganda, it would be much more prudent for India and the US to take account of potential fault-lines, bridge the gaps that are in mutual interest and refrain from exacerbating situations that impinge on each other’s autonomy.

The Taiwan Situation

The third broad theme for this week is the situation regarding Taiwan. First, there’s far greater media and public discourse in India with regard to Taiwan. Sana Hashmi | 胡莎娜 @sanahashmi1Signs wishing Taiwan on Double Tenth Day are up on Sardar Patel Road, New Delhi! @TajinderBagga October 10th 2021115 Retweets795 Likes

An outcome of this greater focus on Taiwan in Indian public discourse is that Chinese embassy in Delhi has taken it upon itself to repeatedly tell the Indian media what to do and what not to do. That’s not quite working out well for the. Here’s an example from the past week:Wang Xiaojian @ChinaSpox_IndiaThe One-China principle brooks no challenge or distortion. We urge certain Indian media refrain from providing platform for separatist forces to advocate “Taiwan independence” and mislead the readers.October 6th 20211 Retweet5 Likes

This focus in Indian public discourse is in part linked to the deteriorating India-PRC relationship, with a deeper sense prevailing that Beijing simply does not regard or respect Indian sensitivities when it comes to core interests; in part a product of the escalating tensions between Taiwan and the PRC; and in part an increasing focus on emerging technologies. The latter isn’t entirely a novel phenomenon. The Taiwan-India Joint Committee Meeting on Cooperation in Science and Technology has had 10 meetings in the past. Some 116 Taiwanese companies are operating in India, with investments at $1 billion across domains like information and communication technology, medical devices, automobile components, steel, electronics,  engineering and financial services. But there’s greater public focus on this aspect of the relationship and dare I say urgency too. 

For instance, SCMP reports that “New Delhi is reportedly in talks with Taipei for a US$7.5 billion deal to get chip manufacturers to build in India, with authorities working on a shortlist of companies this week. The government is also set to unveil a road map to create ‘champions in the design of semiconductors’ and have a chip manufacturing unit in the country within five years, the Junior Minister for IT Rajeev Chandrasekhar said. Special incentive schemes for chip-makers willing to set up base in India have recently been launched.” 

Suhasini Haidar’s Worldview this week offers a really succinct take on recent events and India’s historic engagement with Taiwan.

Amid all this, we’ve seen a record number of PLAAF jets entering Taiwan’s ADIZ — not its airspace — this week. The number of jet flights over the week has been around 150. The Chinese aircraft have included J-16 jet fighters, H-6 strategic bombers and Y-8 submarine-spotting aircraft. On Tuesday then, there was a strange comment from US President Joe Biden: 

“I’ve spoken with Xi about Taiwan. We agree … we’ll abide by the Taiwan agreement,” he said. “We made it clear that I don’t think he should be doing anything other than abiding by the agreement.”

Taiwan’s defense minister, Chiu Kuo-cheng, also warned on Wednesday that the PRC would be able to launch a full-scale attack on Taiwan with minimal losses by 2025. And curiously later in the week, we had a source-based WSJ report informing us that a US special-operations unit and a contingent of Marines have been secretly operating in Taiwan to train military forces there, as part of efforts to shore up the island’s defenses. “About two dozen members of U.S. special-operations and support troops are conducting training for small units of Taiwan’s ground forces, the officials said. The U.S. Marines are working with local maritime forces on small-boat training. The American forces have been operating in Taiwan for at least a year, the officials said.” 

The week has ended with both Xi Jinping and Tsai Ing-wen delivering important speeches. Xinhua tells us that China held a high-profile meeting in Beijing on Saturday to mark the 110th anniversary of the Revolution of 1911 that ended the thousands-year-long absolute monarchy in the country. In his comments at the meeting, Xi “called for promoting the great spirit of revolutionary pioneers and pooling strength for national rejuvenation.” The report adds:

“Saturday’s gathering, Xi said, was meant to commemorate the historic exploits of revolutionary pioneers like Dr. Sun Yat-sen, to emulate and carry forward their lofty spirit of working with unshakable resolve to revitalize China, and to inspire and rally the sons and daughters of the Chinese nation at home and abroad to work together to realize the rejuvenation of the Chinese nation. Expounding on what the past 110 years have shown to the Chinese people, Xi said to realize national rejuvenation, the Chinese people must have a strong force to lead them forward, and that force is the CPC…In his address, Xi said the Taiwan question arose out of the weakness and chaos of the Chinese nation, and it will be resolved as national rejuvenation becomes a reality. “This is determined by the general trend of Chinese history, but more importantly, it is the common will of all Chinese people,” he noted. National reunification by peaceful means best serves the interests of the Chinese nation as a whole, including compatriots in Taiwan, said Xi, while calling on compatriots on both sides of the Taiwan Strait to stand on the right side of history. Xi described secession aimed at “Taiwan independence” as the greatest obstacle to national reunification and a grave danger to national rejuvenation. “Those who forget their heritage, betray their motherland, and seek to split the country will come to no good end,” he said, adding that they will be disdained by the people and condemned by history. The Taiwan question is purely an internal matter for China, one which brooks no external interference, Xi noted. “The complete reunification of our country will be and can be realized,” he stressed.”

In her National Day address, Tsai, meanwhile, said that: 

“Our position on cross-strait relations remains the same: neither our goodwill nor our commitments will change. We call for maintaining the status quo, and we will do our utmost to prevent the status quo from being unilaterally altered. I also want to emphasize that resolving cross-strait differences requires the two sides of the strait to engage in dialogue on the basis of parity. We hope for an easing of cross-strait relations and will not act rashly, but there should be absolutely no illusions that the Taiwanese people will bow to pressure. We will continue to bolster our national defense and demonstrate our determination to defend ourselves in order to ensure that nobody can force Taiwan to take the path China has laid out for us. This is because the path that China has laid out offers neither a free and democratic way of life for Taiwan, nor sovereignty for our 23 million people.”


Region Watch

It is nice to be writing Region Watch again after nearly a month. As news media was dominated by commitments made at the UN General Assembly, a trilateral association that offended an important European player, the region had received little attention. But with G20 and Climate Change meetings around the corner, there’s much to talk about.   

Speaking to the UN General Assembly on September 21, Chinese President Xi Jinping presented what could become the most notable shift to the Belt and Road Initiative (BRI) to date. He pledged Beijing

“will not build new coal-fired power projects abroad.” 

There were signs of a shift in Beijing to move away from funding coal-fired power abroad. In February 2021, China informed Bangladesh that it would no longer finance coal-fired power plants in the country. China’s UN announcement, depending on how it is interpreted and implemented, could mark a watershed moment in the nation’s foreign investment practices. However, it appears that the bureaucracy has yet to work out the specifics of Xi’s words. When asked to explain whether China intended to halt financing new coal-powered plants abroad in addition to stopping building them, the spokesperson for China’s ministry of foreign affairs simply repeated Xi’s statement.

Following Xi’s address at the UN General Assembly, however, China and Bangladesh held discussions at the China-Bangladesh Economic and Trade Cooperation Forum 2021 and the inauguration of the Seventh Council of Chinese Enterprises Association in Bangladesh (CEAB). Here, China reiterated its firm support for the green and low-carbon development of energy in Bangladesh. But is this mere rhetoric? Possibly. Dhaka, however, looks at China as a role model.

The notion of China as a role model begs the mention of Pakistan and the China-Pakistan Economic Corridor (CPEC). The 10th Joint Cooperation Committee meeting the CPEC was held last month, after a hiatus of almost two years. In an ambitious turn, Pakistan and China have agreed to develop the Karachi coast. The MoU is being seen as turning away from Gwadar as the centre stage of the Belt and Road project in Pakistan. Gwadar has been a problematic area for Chinese investment since the inception of the CPEC as separatist militants have waged a long-running resistance in Balochistan. Without acknowledging Gwadar and its fall from grace, Prime Minister Imran Khan termed the Karachi Comprehensive Coastal Development Zone in CPEC a “game-changer.” He tweeted: 

The inauguration of the Gwadar Technical and Vocational Institute shows that Gwadar has not been completely abandoned. Constructed by the China Harbor Engineering Company, the facility will serve as an “incubator” for high-quality and skilled workers for Gwadar, said China’s ambassador to Pakistan. 

Additionally, with assistance from China, Pakistan shows signs to build a framework of a defence-oriented space programme. Whispers hint that Pakistan is acquiring Satellite Image Telemetry Service and Associated Ground Station for High-Resolution Optical Satellite Constellation with cooperation from Chinese entity M/s China Great Wall Industry Corporation (CGWIC). A technical proposal submitted by the company is under consideration in Islamabad. The development could be read as a step forward in the old partnership considering both sides had signed a 2012-2020 roadmap for space cooperation between the Space and Upper Atmosphere Research Commission (SUPARCO) and the China National Space Administration (CNSA) in 2012. 


The Long & Short of It…

I. CIA’s China Focus: NYT reports that the C.I.A. will embark on a reorganization intended to focus more on China, the agency’s director announced on Thursday. At the heart of the effort will be a new China Mission Center meant to bring more resources to studying the country and better position officers around the world to collect information and analyze China’s activities. The new center “will further strengthen our collective work on the most important geopolitical threat we face in the 21st Century, an increasingly adversarial Chinese government,” William J. Burns, the agency’s director, said in a statement. Another new center will focus on new technology and global problems like pandemics and climate change. Called the Transnational and Technology Mission Center, part of its mission will be to identify new technologies that could be used by the agency to help collect intelligence and by others against C.I.A. operatives.

Also, do note that the House Permanent Select Committee on Intelligence made public “The China Deep Dive: A Report on the Intelligence Community’s Capabilities and Competencies with Respect to the People’s Republic of China.”

II. Meituan Faces $533 million Fine: SCMP reports that “China slapped on-demand local services provider Meituan with a 3.44 billion yuan ($533 million) fine on Friday for abusing its dominant market position through its “pick one from two” practice, putting an end to the government’s five-month antitrust investigation. The fine was equivalent to about 3 per cent of Meituan’s total domestic revenue of 114.7 billion yuan last year, according to antitrust watchdog the State Administration for Market Regulation (SAMR). It was also smaller than previous estimates and reports. In August, The Wall Street Journal reported that Beijing planned to impose a US$1 billion on Meituan. By comparison, e-commerce giant Alibaba Group Holding paid in April a record 18.2 billion yuan fine, equivalent to 4 per cent of its 2019 domestic sales, to conclude its own antitrust investigation.”

III. NDRC’s Negative List: The NDRC on Friday put out a new, proposed ‘negative list,’ which details sectors and industries that are off-limits to both Chinese private capital and foreign investors. Cryptocurrency mining has been added to the list wherein investment is restricted or prohibited. Reuters reports that “China also has been tightening control over public discourse, cracking down on show business for ‘polluting’ society and asking mobile browsers to eliminate the spreading of rumours, the use of sensationalist headlines and the publishing of content that violates the core values of socialism. The state planner said it was halting the investment of ‘non-public’ capital into a variety of publishing activities, including live broadcasts, news-gathering, editing and broadcasting entities and the operation of news. Non-public capital cannot be involved in the introduction of news released by overseas entities or summits and award selection activities in the field of news and public opinion, the NDRC added.”

Do check out this thread for a better understanding of what’s changed when it comes to the news and public information domain:Henry Gao @henrysgaoOver the past few days, there have been countless comments claiming that this is no big deal as the restrictions have always been there. I don’t think this is the case. Let me explain in this thread by comparing the 2021 list with the 2020 list: Henry Gao @henrysgaoChina planning new rules banning non-state capital from the news and media sectors and live broadcast services of activities and events involving politics, economy, military, diplomacy, major society, culture, science and technology, health, education, sports, etc. https://t.co/TF9j94QZRPOctober 10th 202113 Retweets34 Likes

IV. Corruption Crackdown & Personnel Changes: Over the past week or so, we have learned that Fu Zhenghua, the former deputy head of the Ministry of Public Security who led the corruption investigation into Zhou Yongkang, is under investigation for “serious violations of discipline and national laws.” 

CNN reports that:

“Fu cut his teeth as a criminal investigator for the Beijing police. He first made his name in 2010 — just months after being named the city’s police chief — when he launched a prostitution crackdown on several high-end nightclubs said to have influential political connections. His willingness to challenge the business interests of powerful families won him praise in state media and the trust of the leadership. In 2013, Xi appointed him to spearhead a graft probe into Zhou Yongkang, China’s former security tzar and retired member of the Politburo Standing Committee, the pinnacle of power in the party. Zhou was jailed for life in 2015 for corruption and abuse of power. But Fu was not just taking on corrupt political elites. As the deputy minister of public security, in 2013 he unleashed a sweeping crackdown on opinion leaders on Chinese social media site Weibo, detaining several high-profile commentators with large followings. He was also in charge of the nationwide roundup of human rights lawyers and activists in 2015, in what has become infamously known as the ‘709 crackdown,’ according to people close to the detained lawyers.”

Fu’s takedown took place days after reports informed us about action being taken against Sun Lijun, another former senior Public Security official. Sun had been taken down in April last year.

Sun Lijun, former vice-minister of Public Security, has been sacked and expelled from the Communist Party, and will face trial for “serious violation of discipline rules and law.” SCMP has a good summary of the statement. I’m using that and filling in some blanks. 

The reports say that Sun has never had any real faith or ideals; he abandoned the ‘two safeguards’, and did not nurture the no ‘four consciousnesses.’ He harboured extremely inflated political ambitions, and was of extremely bad political quality. It adds that Sun’s views on the Party’s power and achievements were extremely distorted, and he arbitrarily discussed the major policies of the CPC Central Committee, manufactured and disseminated political rumors.

Moreover, in the quest to “achieve his political objectives, he resorted to whatever means…forming gangs and factions, seizing control of key [security] departments, seriously undermining the unity of the party, and causing extreme danger to the political security [of the party].”

Also, Sun “had secretly possessed a large amount of confidential materials, and engaged in superstitious activities for a long time.” The PD report also accuses Sun of violating the eight-point regulations, abandoning his post on the front lines of the fight against COVID-19, abusing his position in the public security apparatus to resist organisational review and assessment, and selling official posts and positions and placing his cronies in key positions, thereby damaging the political ecology of the Party. 

Or as GT told us:

Sun “lived in a state of depravity, accepted large amounts of valuable gifts for long periods of time, indulged in banquets and extravagant parties; he is also accused of engaging in ‘pay-for-play’ schemes and paying for sex.”

Do check out the breakdown of all of these developments by China Digital Times.

I also recommend these threads by Neil Thomas on recent personnel changesNeil Thomas 牛犇 @neilthomas123Big personnel moves in the Chinese Communist Party in recent days New provincial leaders in Anhui, Shandong, Xinjiang & Zhejiang And a former Minister of Justice is purged These moves show Xi Jinping further consolidating power before the 20th Party Congress next fall (1/10)October 4th 202194 Retweets228 Likes

And this one on Lhasa Communist Party chief Yan Jinhai taking over as TAR chairman.Neil Thomas 牛犇 @neilthomas123Beijing has tapped Yan Jinhai 严金海 as new Governor of Tibet (or “chair” 主席) He was Party Secretary of Lhasa and until 2020 worked 38 years in his native Qinghai Like every Tibet governor since 1979, Yan is ethnically Tibetan, but that won’t change CCP policies there (1/3) October 9th 20215 Retweets14 Likes

V. Xi’s 20th Party Congress Push: In late September, the People’s Daily ran two Xuānyán (Declaration) articles. I had covered them in my daily tracker. But here’s what the second article had said:

The first part emphasises the importance of “unity” as the “strength” and “foundation of our success.” In this context, it says that the “strong political leadership of the CPC Central Committee is the fundamental guarantee for the unity of the whole party and the people of the whole country.” We then get a bit of a dive into history, before arriving at this learning:

“The glorious history of the Party was created by the Party leading the people, and the great historical practice has raised outstanding people’s leaders. Especially at critical junctures amid key historical turning points, a strong leadership core often plays a key role in raising the flag and orienting the historical trend, and has a significant and far-reaching impact on a nation’s spiritual temperament and the country’s future and destiny.” 党的辉煌历史是党领导人民创造的,伟大的历史实践造就杰出的人民领袖。尤其是在历史转折的重大关头,一个坚强有力的领导核心往往对历史走势发挥着举旗定向的关键作用,对一个民族的精神气质、国家的前途命运产生重大而深远的影响. 

We are then told that since the 18th Party Congress, China has faced “severe and complicated domestic and international situations.” After listing a bunch of things like poverty alleviation, BRI, community of common destiny, COVID-19, building a social safety net, national governance system reform, etc., the piece says that it is the
“scientific guidance of Xi Jinping Thought of socialism with Chinese characteristics in the new era” and the “firm leadership of the CPC Central Committee with Comrade Xi Jinping at its core” that have led to remarkable results in these directions.

The next bit says that in this era, opportunities and challenges coexist. “In a great and arduous undertaking, only a strong leadership core that can scientifically judge the situation, dare to act decisively, and be good at following the trend can lead the whole party and the people to seize fleeting opportunities, avoid the risks of reefs, nurture opportunities in the crisis, open new opportunities in the changing situation, move forward courageously…” 在异常艰巨的伟大事业中,只有能够科学判断形势、敢于果断决策、善于顺势而为的坚强领导核心, 才能领导全党全国人民抓住稍纵即逝的机遇、规避暗礁风险, 在危机中育先机、于变局中开新局, 带领党和国家乘势而上、勇毅前行, 不辜负时代的厚遇、历史的青睐.

And then:

Only a strong leadership core with extraordinary strategic determination and indomitable revolutionary will, which dares to struggle and win, can maintain calmness and steadiness in times of peace, gather invincible will and strength, unite and lead the people through all kinds of stormy waves, overcome all kinds of difficulties and obstacles, complete arduous tasks of reform, development and stability, and create new miracles belonging to our generation.” 只有具有非凡的战略定力和顽强的革命意志, 敢于斗争、敢于胜利的坚强领导核心,才能够保持如履薄冰的清醒、居安思危的冷静、沉着稳重的应对, 才能凝聚起无坚不摧的意志和力量,团结带领人民穿过各种惊涛骇浪,克服各种艰难险阻, 完成艰巨繁重的改革发展稳定任务, 创造出属于我们这一代人的新的奇迹.

And then we are told: 

Having a visionary, mature and stable leadership core is a blessing for the times and a great blessing for the country, and it is a crucial factor for the Party and the country to forge ahead and prosper. Every Chinese supports this core, and every Party member follows this core, strengthening the ‘four consciousnesses’ with practical actions, strengthening the ‘four self-confidences’ and achieving the ‘two maintenance’.” 拥有富有远见、成熟稳定的领导核心,是时代之幸,国之大幸,是党和国家砥砺前行、走向兴盛至关重要的因素. 每一个中国人都拥护这个核心,每一个党员都跟定这个核心,用实际行动增强“四个意识”,坚定“四个自信”,做到“两个维护”.

Short take on the piece: All of the above is basically telling us that this is about the upcoming sixth plenum, setting the stage for the 20th Party Congress. These are the building blocks of the argument for Xi to continue in power as the core. 

The second part of the piece tells us that thought is sharper than the sword, and that “scientific thoughts and theories can always guide people to clear the fog of thought and understand the bright future, and have the ideological power to change history.” 科学的思想理论,总能够指引人们廓清思想迷雾、认清光明前途,具有改变历史的思想伟力.

Of course, this leads us to the importance of Marxism; the piece mentions all other leaders’ thoughts and theories. All of this eventually ends with saying: “as long as we continue to observe, interpret and guide the times with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will surely succeed on our new journey to fully build a modern socialist country and realize the great rejuvenation of the Chinese nation.” 面对时代之问,只要我们坚持用习近平新时代中国特色社会主义思想观察时代、解读时代、引领时代,就一定能走好全面建设社会主义现代化国家新征程、实现中华民族伟大复兴.

We then come to what’s happening today. This begins with telling us that Deng once thought that “poverty is not socialism.” This led to changes, which are evident. And in today’s times, “social contradictions have undergone profound changes” and therefore, the Party must:

“Adhere to the people-centered development thought; promote common prosperity to achieve more obvious substantive progress; solve the urgent problems and worries of the masses; enhance the people’s sense of gain, happiness and security… It is under the guidance of these ideas that our party has been handing over satisfactory answers to the people. Faced with the people’s questions, as long as we adhere to the guidance of Xi Jinping Thought on socialism with Chinese characteristics in the new era, constantly respond to people’s expectations and meet their needs, we will steadily achieve common prosperity and fully demonstrate the essence of socialism and the values pursued by the CPC.” “坚持以人民为中心的发展思想”“推动共同富裕取得更为明显的实质性进展”“解决群众急难愁盼问题”“增强人民群众获得感、幸福感、安全感”……正是在这些思想理念的引领下,我们党不断交出人民满意的答卷。面对人民之问,只要我们坚持以习近平新时代中国特色社会主义思想为指导,不断回应人民期待、满足人民需要,就一定能稳步实现共同富裕,充分彰显社会主义的本质特征和中国共产党的价值追求.

The next part of the piece is about the Party’s organisation system. It says that the Central Committee is the “brain center,” the local organizations and party groups are the “trunk and limbs”, the grassroots organizations of the Party are the “nerve endings” and the party members are the “cells.” 党中央就是大脑中枢,党的地方组织和党组就是躯干四肢,党的基层组织就是神经末梢,党员就是细胞,全党“如身使臂,如臂使指,叱咤变化,无有留难”. The fourth part talks about the importance of cadres wanting to be a pioneer. This reiterates the expectations of cadres.



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