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CONTENTS

Economy

Ant Group’s mutual fund profits rose 495% YoY to $50.2 million in H1, according to the half-year report (link in Chinese) of its second-largest shareholder, Hundsun Technologies Inc., which was released Wednesday. Its revenue nearly tripled. Read full article →

Factories' labor pains — ‘we can hardly find any workers’ – “Labor shortages are materializing across China as young people shun factory jobs and more migrant workers stay home, offering a possible preview of larger challenges ahead as the workforce ages and shrinks.” Read full article →

HSR reaches 95% of cities of 1 million, and covers more than 98% of cities with 200,000 people. The country is forming a three-dimensional transportation network with railroads as the backbone, roads as the foundation, and water transport and civil aviation playing an advantage.Civilian airports cover more than 92% of prefectural-level cities. By the end of 2020, railroad mileage was 146,000 kilometers, including 38,000 km of HSR. Read full article →

Trade & Travel

Since the Xinjiang cotton boycott, Adidas and H&M sales fell 16% and 28%, while Chinese sports brands grew. First-half year profits expected to grow for Li Ning's H1 profits grew 200% and Xtep's 65%, while Anta's 16.6% market share nears Adidas' 17.4%. H&M's national store network contracted by a 13 outlets to 489. Previously the chain's third-biggest market, China ended the quarter in sixth place. Read full article  $→

US frozen beef exports to China surge, adding to Canberra-Beijing tensions but boosting trade deal: US exported US$107 million worth of frozen beef to China in July, compared to just US$35 million from traditional export destination Australia. China informally banned a series of goods from Australia, including coal, log timber and wine last year amid 18 months of tensions between Canberra and Beijing. Read full article  $→

Foreign trade grew 25% YoY in the first seven months of 2021 – the fastest in a decade, but Minister of Commerce Wang Wentao warned, “There are too many ‘one-off’ factors…that are gradually disappearing.” Wang warned that trade will face serious headwinds in the months to come, namely: Disruptions to shipping – including high rates and insufficient capacity; Rising prices for commodities and raw materials; CNY appreciation; Rising labor costs. Read full article  →
 
H1 BRI trade up 38% to $825bn YoY and non-financial outbound direct investment to BRI countries totalled $9.6bn during the same period–up 18%. As for projects, $US 39.35bn worth of contracted projects were completed in H1, a 10.6% YoY increase.  Freight trains between China and Europe, which travel along 73 routes, reached 168 cities in 23 European countries in the first half of 2021. There were 7377 trips in H1, with growth in Xi’an, Chengdu, Chongqing, Zhengzhou and Urumqi. Read full article  →

The RCEP nations of ASEAN, plus Japan and South Korea, were big winners in Q2 Chinese investment 202. Q2 2021 China investments/pledges were US$16.6 billion, down US$24 billion from Q1 2021, but well above Q3 and Q4 2020 levels. This quarter was led by acquisitions of controlling stakes across financial services, banks, investment banks, securities firms, asset and wealth managers, insurers, real estate, and logistics. Read full article  →

China’s CNPC secures 51 bcm of Turkmen gas in new deal: “Chinese state energy firm CNPC will receive up to 51 billion cubic metres of gas from Turkmenistan in exchange for helping the Central Asian nation boost output at its giant Galkynysh field.” Read full article  →

Technology & IP

MingYang Smart Energy's new wind generator features a 242-meter diameter rotor, 118-meter long blades, and a staggering 46,000 m2 swept area equivalent to more than six soccer fields. This will make it, by quite a margin, the largest wind turbine in the world, generating 80 GWh of electricity every year, enough to power 20,000 households.  Read full article →

Following China’s push for a digital currency, the country plans to roll out digital driver’s licenses nationwide by 2022. Nearly 2 million residents have obtained digital driver’s licenses so far, as cited by Xinhua. Digital licenses will have the same legal effect as physical licenses and can be used to rent vehicles, file insurance claims and handle traffic violations. An official mobile app accepts applications for a digital license. 400 million people are licensed to drive in China. Read full article →

Stanford University says China leads USA in AI citations: After surpassing the US in the total number of journal publications several years ago, China now also leads in journal citations; however, the US has consistently (and significantly) more AI conference papers (which are also more heavily cited) than China over the last decade. Read full article →

Chinese industrial robots are 30% cheaper than Japanese and European counterparts, and Chinese industrial robot manufacturers are boosting their domestic market share from 30% to Beijing's goal of 50%. Industrial robot sales in China doubled between 2016 and 2020 and are on track to jump 48% in the five years through 2025. The country currently ranks 15th in robots per 10,000 workers, with 187 units, behind top-place Singapore's 918 and South Korea's 868. Read full article →

China’s Mars rover soldiers on after completing program. The National Space Administration said on its website Friday that Zhurong completed its 90-day program on August 15 and was in excellent technical condition and fully charged. Read full article →

A Chinese satellite has tested a technology that could offer the most accurate means yet of tracking air traffic from space, in the hope of preventing repeats of the Malaysia Airlines Flight 370 tragedy. Each aircraft in the sky emits a radio signal, and constantly monitoring all planes over a large area is technically challenging. But Beihang Kongshi 1, a small satellite in near-Earth orbit, can update the status of an aircraft every eight seconds – about twice as fast as American technology, meaning the tracking is more accurate. Read full article  $→

Health

On August 24, China reported no new locally transmitted COVID-19 cases today for the first time since July, as authorities double down on the country's stringent zero-COVID approach.
China has been grappling with the spread of the highly contagious Delta variant since July 20 in the eastern city of Nanjing. Since then, it has spread to more than half of the country's 31 provinces and infecting more than 1200 people.  Read full article $ →

Sir Jeremy Farrar, head of the Wellcome Trust, made clear in his recent book that he changed his mind about the Wuhan lab leak theory after intense consultations with other researchers, though initially he believed that COVID-19 escaped from a virus research centre. "As things currently stand, the evidence strongly suggests that COVID-19 arose after a natural spillover event". Farrar is backed by Professor James Wood, of Cambridge University, "I think there is very strong evidence for this being caused by natural spillovers but that argument simply does not suit some political groups. They promote the idea that COVID-19 was caused by a lab leak because such a claim deflects attention from increasing evidence that indicates biodiversity loss, deforestation and wildlife trade - which increase the dangers of natural spillovers - are the real dangers that we face from pandemics," said Wood. Read full article $ →
How did China contain Delta? Mostly the same way it contained previous waves of COVID: Many rounds of mass testing: Over 100 million tests have been conducted (Bloomberg). Wide and strict quarantines: Both quarantine in the sense of restricting travel and in the sense of medical quarantine. Hundreds are currently in isolation in Shanghai after one hospital worker and five airport logistics employees reported infections late last week. Read full article $ →

New Physicians Law:
  1. Raises the minimum level of education required for physicians to China’s equivalent of an associate degree. Graduates of secondary technical schools [中等专业学校] are no longer allowed to sit for the Physician Qualification Examination, a requisite for becoming a physician. But the revision grandfathers those who have graduated from those schools before its effective date, March 1, 2022, as well as those who graduate during a grace period after that date (to be set by national health and education authorities) (art. 64, para. 2).
  2. Imposes new obligations on physicians. It requires physicians to explain to the patients their conditions and the medial care they receive, and, in the case of special procedures like surgeries, the risks involved and any alternative treatment (art. 25). It also expands physicians’ reporting obligations to include “infectious diseases, sudden diseases of unknown causes, and abnormal health incidents,” in light of the Covid-19 pandemic (art. 33, item 1). The revision bars physicians from taking advantage of their positions to solicit or illegally accept gifts or money from others (art. 31). It also prohibits physicians from prescribing unnecessary tests or treatments (id.). The revision, finally, authorizes lifetime bans on medical practice or clinical research by those who seriously violate professional and medical ethics, thereby “causing a heinous social impact” (art. 58).
  3. Affords great autonomy and job protections to physicians. It expressly authorizes, subject to the patient’s informed consent, off-label prescribing of drugs, when there is no known or better treatment and the off-label (i.e., unapproved) use is supported by evidence-based medicine (art. 29, para. 2). The revision also adds a new chapter on providing safeguards to physicians, including requirements that local governments ensure the security of medical institutions and that medical institutions purchase malpractice insurance, implement paid time off for physicians, and safeguard their occupational safety (arts. 49–52). The revision, moreover, shields physicians from all civil liabilities when they voluntarily provide first aid to someone in a public place, but cause the latter harm (art. 27, para. 3).
  4. Promotes the integration of traditional Chinese and Western medicine by expressly allowing physicians to engage in cross-disciplinary practice after training and certification in their secondary discipline (art. 14, para. 4). Read full article $ →

Chinese ambassador demands investigation into US labs for COVID-19 origins tracing. Chen Xu said the labs of Fort Detrick and the University of North Carolina should be subject to "transparent investigation with full access" for the origins tracing of COVID-19. Read full article  →

China’s threshold for “herd immunity,” is 80% vaccine coverage by the end of the year. With over 1.9 billion shots given so far, approximately 55% are fully vaccinated and as many as 69% may have received at least one shot. But depending on the status of variants, there is “almost a zero chance” that foreign spectators will be let into the country to watch the Games. Read full article  $→

Society

China aims to increase its forest coverage to 24% by 2025, up from 23% last year, and plans to expand its national parks to cover as much as 18% of its land area and set up a nature reserve system with national parks as a major component by 2035. National parks are one of the most important types of protected areas in China and it now has 10 pilot programmes in place across 12 provinces. They include a national park containing the headwaters of three major rivers in Asia on the Tibetan Plateau, one for giant pandas in the southwestern province of Sichuan and another one for Siberian tigers and Amur leopards in Jilin and Heilongjiang, in the northeast.  Read full article  $→

China to step up tree planting campaign to help reach net zero: “China will plant 36,000 square kilometres of new forest a year — more than the total area of Belgium — from this year to 2025 as it bids to combat climate change and better protect natural habitats, a senior forestry official said on Friday.” Read full article →

‘996’ work hours are illegal. “The ‘996’ work culture — a 12-hour, six-day work schedule that had been popular among Chinese tech companies until recently — is a serious violation of Chinese labor law, according to China’s Supreme People’s Court and its Ministry of Human Resources and Social Security.” Read full article →

Getting a Chinese driver's licenseLike most things in China, it's not completely straight forward, but I will spell out the entire process for you so that you, too, can tick that off your list. Read full article →

Statistics

Governance

Engrave Danger! Apple Engraving Censorship across Six Regions: Within mainland China, we found that Apple censors political content including broad references to Chinese leadership, China’s political system, names of dissidents, independent news organizations, and general terms relating to democracy and human rights. Moreover, we found that much of this political censorship bleeds into both Hong Kong and Taiwan. Some of the censorship exceeds Apple’s legal obligations in Hong Kong, and we are aware of no legal justification for the political censorship of content in Taiwan. Read full article →

Ride-hailing app Didi will improve payment transparency for its 13 million drivers, while Beijing announces cap on share of platform's earnings: Newly-launched feature allows drivers to view earning proportion for each ride over the past day and week. Read full article →

Beijing's new phrase to describe its economic policy, “cross-cyclical,” that means taking action sooner, in smaller steps, with a longer time frame in mind. It’s a departure from counter-cyclical policy, which is when central banks and governments add stimulus to spur a slowing economy — like cutting interest rates or taxes and boosting infrastructure investment — and tighten when growth starts accelerating. Meanwhile Xi Jinping has used “common prosperity”  65 times in his speeches this year, up from 30 in all of 2020. Read full article →

Propaganda

Amid rising concerns over misinformation, Americans are now a bit more open to the idea of the U.S. government taking steps to restrict false information online. Roughly half of U.S. adults (48%) say the government should take steps to restrict such misinformation, even if it means losing some freedom to access and publish content. That is up from 39% three years ago, with Democrats driving much of the increase. Meanwhile, a majority of the public continues to favor technology companies taking steps to restrict online misinformation. Read full article →

Australian Senate passes bill banning imports made using forced labour: “The bill would amend the Customs Act to prohibit the importation into Australia of goods produced or manufactured, in whole or in part, through the use of forced labor.” Read full article →

Why Beijing Scrutinized the Internet Industry:  Huang Qifan, former mayor of Chongqing believed that, in the past 20 years, China’s consumer Internet had flourished, and a number of world-renowned enterprises such as Alibaba, Tencent, Baidu and JD.COM had emerged, connecting 1 billion netizens and making remarkable progress. But there were still at least four problems regarding the characteristics of the development of China’s Internet.

  1. There was often a zero-sum game between enterprises. In the end, the winner of the competition in the consumer Internet industry often dominated all the markets, so many early Internet companies desperately burned money to expand their scale in order to defeat their rivals. After gaining monopoly advantage, they charged high threshold fees and service fees to platform users. As a result, the platform rates of some online sales platforms were higher than those of offline high-cost department stores and supermarkets, which seems rather unreasonable.
  2. Many enterprises preferred taking advantage of the weakness of human nature to design products. The freedom dominated by the online market at the early stage of its formation made the cost of breaking promises extremely low, so many enterprises would design various products to obtain traffic while ignoring the long-term interests of consumers and the overall development of the market. For example, some information service companies attracted users to click and watch videos and news through clickbait links and articles.
  3. Enterprises collected too much personal data. In the era of consumer Internet, there was a lack of data governance norms and many Internet companies required users to provide personal data when using products. For example, some companies had obtained the right to use the microphone of consumers’ mobile phones which allowed them to track users’ habits by eavesdropping on their conversations. This practice violates the country’s consumer protection laws.
  4. The gathering of 'big data'. Internet companies divided users into different categories according to big data and then charged different prices, which violated the principles of fairness and transparency in the market. PanDaily.

Recent History

Corporate Media Politicize WHO Investigation on Covid Origins to Vilify China
 

Politico (7/9/21) reports that “what was once a fringe belief held mainly among some on the political right has become accepted by most Republicans, as well as most Democrats, amid heightened scrutiny of the lab leak theory.” Yet “scrutiny” is exactly what the lab leak theory isn’t getting.

FAIR (10/6/206/28/21) has previously critiqued Western news media’s credulous coverage of evidence-free “lab leak” speculations. One key factor in spreading suspicion that the coronavirus might have escaped from the Wuhan Institute of Virology (WIV) is media’s early and ongoing politicization of the World Health Organization’s investigation into the pandemic’s origins. Much of this politicization weaponizes Orientalist tropes about China being especially, perhaps genetically, untrustworthy—the sort of people who would unleash Covid-19 on the world.

While no new evidence has emerged suggesting that the virus emerged from the WIV, many more Americans now believe it did. A Politico/Harvard poll in July, following an increase of uncritical Western media coverage on the lab leak theory, found that 52% of US adults now believe Covid-19 leaked from a lab, up from 29% in March 2020. This is contrary to the assessment of most scientists, who believe, based on available evidence, that a natural origin for the virus is more likely.

At the center of the search for the virus’s origins is the WHO. Its initial investigation, which ended in February 2021, concluded that the lab leak hypothesis was “extremely unlikely.” Shortly afterwards, however, WHO director general Tedros Adhanom Ghebreyesus stated that although the lab leak theory is the least likely cause of the pandemic, it nevertheless “requires further investigation,” and that “all hypotheses remain on the table” (BBC3/31/21). The WHO is now calling for WIV laboratory audits and access to raw data from China, with Tedros claiming that attempts to rule out the lab leak theory were “premature” (France247/16/217/16/21).

In a rejection of WHO requests for greater “transparency” and “access” in its proposed planfor the second phase of the origins investigation, the Chinese government reemphasized its preference that the second phase of the WHO investigation focus on further research around possible pre-Wuhan Covid cases globally.
 

Was China ‘stalling’ investigation?

“China has frustrated efforts by foreign officials and researchers to join the hunt” for the origins of the virus that causes Covid-19, the Wall Street Journal (5/12/20) reported.
Early news reports about potential WHO investigations into pandemic origins portrayed China as “stalling” an international probe, and failed to give context for Beijing’s initial rejection of requests for an investigation.

Under the headline “On the Ground in Wuhan, Signs of China Stalling Probe of Coronavirus Origins” (5/12/20), the Wall Street Journal reported that Beijing was “stalling international efforts to find the source of the virus.” It mentioned that this was occurring “amid an escalating US push to blame China for the pandemic”—”amid” rather than “because of,” as though this might be mere coincidence.

The Journal claimed that the “lack of transparency and international involvement in the search has left room for speculation and blame,” even though Chinese officials have repeatedly explained that the blame game and politicized speculation were why it resisted further transparency and international involvement. The Journal did note:
China isn’t the first country to resist an international investigation of a health crisis on its territory, and its early focus on controlling the virus is understandable, health experts said.
Bloomberg (12/30/20) reported that “the country the novel coronavirus hit first — the place many blame for unleashing the disease on an under-prepared world — now has little incentive to help find the true origin of the greatest public health emergency in a century.”
Bloomberg’s report “China Is Making It Harder to Solve the Mystery of How Covid Began” (12/30/20) presented China as a selfish country uninterested in tracing pandemic origins, attempting to silence and punish countries like Australia for merely calling for an independent investigation:
Where the pathogen first emerged and how it transmitted to humans is a stubborn mystery, one that’s becoming more elusive with each passing month. Before the initial cluster among stall-holders at a produce market in central China, the trail largely goes cold, and the country the novel coronavirus hit first — the place many blame for unleashing the disease on an under-prepared world — now has little incentive to help find the true origin of the greatest public health emergency in a century….
China has ignored appeals for an independent investigation into the virus’s origin, hammering Australia with trade restrictions after it called for one. It’s also stalled efforts by the World Health Organization to get top infectious diseases experts into Wuhan this year.
Washington Post editorial, “We’re Still Missing the Origin Story of This Pandemic. China Is Sitting on the Answers” (2/5/21), laid out many of the frequent suspicions, questions and demands the US government, and much of US media, have towards China:
What is China trying to hide about the origins of the pandemic—and why?
If the WIV had no role in sparking the outbreak, it should be relatively straightforward for Dr. Shi [Zhengli] to safely open up the databases to scientists so they can properly understand the evolutionary origins of SARS-CoV-2. The institute should provide all records regarding bat samples, viruses and sequences, with verified information provenance, and eventually, it should be disclosed to all.
 

‘Weapons inspector’ powers

Australia’s ABC (5/20/20) reported that “the Chinese Government was—predictably—incensed” when the Australian prime minister demanded “tough new ‘weapons inspector’ powers to investigate what caused the outbreak.”

However, the innocent-sounding Australian request for an independent investigation was actually a startling call for giving the WHO, or another international body, “powers equivalent to those of a weapons inspector” to investigate the outbreak (Australia Broadcasting Corporation, 4/22/205/20/20). By invoking such inflammatory rhetoric, Prime Minister Scott Morrison unavoidably brought to mind familiar stories like the invasion of Iraq, launched on the basis of false US/UK accusations that it possessed weapons of mass destruction, even after weapons inspectors found no evidence of any (Los Angeles Times10/23/02FAIR.org3/19/07Extra!4/06).

This was occurring as the Trump administration was hyping up its propaganda campaign to blame and punish China for the pandemic, in efforts to sue Beijing for damages and reparations (New York Times5/3/20). It’s no wonder the Chinese government viewed Morrison’s statements as a political accusation, rather than a good-faith scientific effort to trace the pandemic’s origins.

Australia’s ABC (5/20/20) noted that China declared that it was always willing to agree to a “scientific investigation.” This seems to be corroborated by China’s agreement on May 18, 2021, to an investigation at the World Health Assembly (WHA) in Geneva, as soon as the hostile rhetoric was toned down, and when certain compromises (such as not granting the WHO new “weapons inspector” powers) were made on the WHA’s motion. Some compromises included assurances that China won’t be expected to take blame for the pandemic, along with the investigation not operating under a presumption of guilt, and occurring after the pandemic is brought under control (Business Insider5/19/20).
 

WHO manipulation conspiracy theories

The New York Times (11/2/20) accused WHO of “bending to China’s might” because it “heaped praise on the Chinese government”—as though containing the outbreak within three months of the disease’s discovery were not a spectacular achievement.
The WHO’s credibility has also been subject to both US government and media politicization. As part of its China-blaming propaganda, the Trump administration pushed a baseless conspiracy theory that the WHO was under the corrupting influence of Chinese money, simply because the organization delivered conclusions Trump disliked. Some US media outlets helped lend legitimacy to Trump’s claims, as he used them to justify suspending US support for the organization (FAIR.org6/21/20).

The New York Times report, “In Hunt for Virus Source, WHO Let China Take Charge” (11/2/20), continued that media habit even months later. As evidence, the paper pointed to the WHO praising China’s undeniably excellent pandemic response—as judged by multipleindependent science journals—while refusing to applaud the Trump administration’s objectively horrible performance:
The WHO’s staunchest defenders note that, by the nature of its constitution, it is beholden to the countries that finance it. And it is hardly the only international body bending to China’s might. But even many of its supporters have been frustrated by the organization’s secrecy, its public praise for China and its quiet concessions.
The Times insinuated that the WHO was being manipulated by Chinese money, even though the US is the organization’s largest donor, contributing more than 10 times ($893 million) as much as China ($86 million) before the Trump administration vindictively suspended funding last April. In fact, some scientists argue that WHO Director General Tedros has “capitulated” to the “enormous pressure” of the “barrage of political and media commentary,” and is unduly influenced by the US (Science7/17/21). Yet questions about the WHO’s credibility only seem to travel in one direction in US media, with suspicions being raised only when the organization distances itself from the lab leak theory.

The Times attributed China’s delay to some innate or exceptional Chinese preference for secrecy and authoritarianism, claiming China’s “authoritarian leaders want to constrain” the WHO, and have “impeded” the effort for an independent investigation because they’re “notoriously allergic to outside scrutiny.” The Times resorted to these thought-terminating stereotypes as explanations for the months-long delay—omitting any mention of Australia’s provocative call for new “weapons inspector” powers to investigate China, or of other countries who also sensibly prioritized containing the pandemic within their borders before investigating pandemic origins. The Times‘ insinuations survived the paper’s admission that the probe was delayed due to the Trump administration’s illegal withdrawal from the WHO:
No date has been set for a visit, though diplomats say China and the health organization appear eager to pause until after the American election. Joseph R. Biden Jr., the Democratic nominee, has said he will keep the US in the organization if he wins.
 

Sham investigation or sound science?

It’s true that the first phase of investigation into Covid’s origins wasn’t conducted with maximum possible transparency. The Wall Street Journal (2/12/215/23/21) has reported that WHO investigators were denied raw data, or original safety logs and lab records, on the WIV’s extensive work with bat coronaviruses, or to a Wuhan blood bank to test samples from before December 2019 for Covid-19 antibodies. They were, however, provided extensive summaries and analyses of that data by Chinese scientists and officials.
But corporate media coverage of the investigation implied that the results were suspect, simply because its parameters were set by the Chinese government in cooperation with the WHO, or because WHO investigators didn’t receive unfettered access to all information they wanted in Wuhan.

The New York Post‘s Miranda Devine (2/10/21) responded to WHO’s finding that a lab leak was “extremely unlikely” by saying, “Maybe a spaceship from Mars dropped off the coronavirus in Wuhan.”
New York Post op-ed (2/10/21) by Miranda Devine argued:
WHO conducted a fake investigation from the start, with a team of experts vetted by Beijing and a pre-planned conclusion designed to take the heat off China.
Any report produced by them is a waste of time. It is Chinese Communist Party propaganda that only exposes how fatally compromised by China WHO has become.
Wall Street Journal op-ed, “The World Needs a Real Investigation Into the Origins of Covid-19” (1/15/21), implied that the probe was a sham because it was not investigating the lab leak scenario seriously enough, instead focusing on a natural origin—as though not treating both with equal gravity was ridiculous rather than based on scientific rationale:
The world needs an inquiry that considers not just natural origins but the possibility that SARS-CoV-2, the virus that causes Covid-19, escaped from a laboratory. The WHO team, however, plans to build on reports by Chinese scientists rather than mount an independent investigation….
The WHO team includes experts who traced the origins of Ebola and MERS outbreaks, but critics are concerned that it doesn’t have the expertise for an investigation that would examine possible lab origins.
A peer-reviewed pre-proof by over 20 of the world’s eminent virologists noted that “all previous human coronaviruses have zoonotic origins, as have the vast majority of human viruses,” and that aside from the 1977 A/H1N1 influenza pandemic that likely originated from a large-scale vaccine trial, “No epidemic has been caused by the escape of a novel virus and there is no data to suggest that the WIV—or any other laboratory—was working on SARS-CoV-2, or any virus close enough to be the progenitor, prior to the COVID-19 pandemic.” It also noted:
Known laboratory outbreaks have been traced to both workplace and family contacts of index cases and to the laboratory of origin. Despite extensive contact tracing of early cases during the Covid-19 pandemic, there have been no reported cases related to any laboratory staff at the WIV and all staff in the laboratory of Dr. Shi Zhengli were reported to be seronegative for SARS-CoV-2 when tested in March 2020.
 

Whose burden of proof?

The New York Times (6/14/21) casts doubt on the assurances of Dr. Shi Zhengli because of “China’s habitual secrecy.” The fact that the US government keeps many secrets—including ones related to biological research—doesn’t move the Times to be similarly mistrustful of any scientist with a US nationality.
The New York Times’ “A Top Virologist in China, at Center of a Pandemic Storm, Speaks Out” (6/14/21) made it clear that a major component of the lab leak speculations depends on rejecting the credibility of Chinese scientists at the WIV. They described Shi Zhengli as “the key to whether the world will ever learn if the virus behind the devastating Covid-19 pandemic escaped from a Chinese lab.” She finds herself, according to the Times, in the predicament of having to defend the “reputation of her lab and, by extension, that of her country.”
The Times blamed “China’s refusal to allow an independent investigation into her lab, or to share data on its research,” for making it “difficult to validate Dr. Shi’s claims,” which “has only fueled nagging suspicions about how the pandemic could have taken hold in the same city that hosts an institute known for its work on bat coronaviruses.” But the Times did not question whether lab leak proponents had provided enough evidence to justify such “nagging suspicions.”
The Times noted Shi’s frustration at the burden of proof being placed on her to prove a negative, rather than on WIV accusers to provide evidence of a lab leak:
“How on earth can I offer up evidence for something where there is no evidence?” she said, her voice rising in anger during the brief, unscheduled conversation. “I don’t know how the world has come to this, constantly pouring filth on an innocent scientist,” she wrote in a text message.
Yet when media outlets omit plausible rationales for China resisting further cooperation with an international investigation, it becomes easier for their audiences to leap to the conclusion that China must be hiding evidence of a lab leak.

Typical national security concerns

This Washington Post (6/22/21) article makes clear that the WIV’s security “precautions don’t mean the lab has anything to do with the virus’s origin, or that there’s anything nefarious about its classified projects.”
In fact, it’s doubtful that any country would grant unrestricted access to the data from one of its top biolabs on the basis of the coincidence that the lab was located near where a pathogen was first detected. Such proximity is actually not strong evidence at all, considering that virology labs tend to specialize in the viruses found naturally around them. It seems especially unlikely other nations would grant unfettered access to a facility with a BSL-4 laboratory, since such facilities operate with heightened secrecy due to the national security risks of the dangerous pathogens they research, as the Washington Post (6/22/21) reported:
The events have shined a light on a research niche that—in China, the United States and elsewhere — operates with heightened secrecy because of the national security risks of handling deadly pathogens….
The precautions don’t mean the lab has anything to do with the virus’s origin, or that there’s anything nefarious about its classified projects. The United States also conducts classified pathogen research, and requires employees of high-containment labs to pass background checks.
The Post‘s Eva Dou cited virologist Angela Rasmussen explaining:
If the pandemic had started in the DC area, you can count on the fact that the US government would not allow an unfettered “independent” investigation to occur for the exact same reasons: It is a major longer-term security risk that can’t be fully mitigated…. It does not indicate the need to cover anything up, beyond not letting potential adversarial powers have carte blanche access to secure government facilities.
The US is not alone in politicizing the pandemic; China is also guilty of irresponsibly spreadingconspiracy theories regarding the Fort Detrick laboratory in Maryland researching dangerous pathogens being the origin of the pandemic. Chinese media often cite the Maryland lab’s shutdown over safety concerns in the summer of 2019, and the coincidence of reports of a mysterious respiratory illness circulating in northern Virginia around the same time—before the coronavirus was first detected in Wuhan—as well as the US military’s presence in Wuhan during October 2019 for its military games (Global Times6/28/21).
The US response has been to reject any international investigation for the exact same reasonsChina gives for denying further WIV inspection. But when they come from the US, they are reported without any objections from outlets like the Journal:
Most scientists say they have seen nothing to corroborate the idea that the virus came from a US military lab, and the White House has said there are no credible reasons to investigate it.
 

Lack of incentive for access

Nature: After the WHO report: what’s next in the search for COVID’s origins


















Would “other highly industrialized countries” allow the kind of access demanded of China?  Nature (6/5/20) “ I am not sure they would,” epidemiologist David Heymann told Nature (6/5/20).
 
This is why epidemiologists like Dr. David Heymann (Nature4/1/21) have said that the fact China would allow an investigation at all is unusual, and possibly a sign of greater transparency from China than other developed countries, since he is “not sure” whether “other highly industrialized countries” would do the same. Frank Hamill (Nature6/5/20)—who previously managed a BSL-4 lab in the US—stated that it would be a “bit hypocritical” to “ask the Wuhan institute to open up its files and let people starting poking around,” given that (as Nature put it) “US biosecurity laboratories are far from fully transparent about their own research.”
Dr. David Gorski, managing editor of Science-Based Medicine (5/31/21), asked:
What country would welcome investigators with open arms into one of their major research institutions to look for evidence that its scientists had screwed up and caused a major disaster? Even if a government were confident that no such error had occurred, it might not be too thrilled with such an investigation, particularly when it’s coupled with what can only be called accusations of wrongdoing and being instigated by people hostile to you. That the Chinese are testy and unenthusiastic about cooperating is not a strong argument in favor of a lab leak. Sure, it could be a sign of a coverup, but it could also just be a normal reaction to accusations.
Foreign Policy’s deputy editor James Palmer (6/9/21) offered yet another plausible reason:
Nor is there any domestic public demand to cooperate on an investigation. Consider how the accusations over a supposed lab leak look from the perspective of ordinary Chinese people. Doctors and scientists who worked on coronaviruses are being painted as co-conspirators in the outbreak. And a country that utterly botched its pandemic response and that often refuses to participate in international accountability itself is making accusations against one that succeeded—driven in part by the politicians involved in that failure.
Yet another reason why China wouldn’t agree to further investigation—even if they’re confident no lab leak occurred—is that an investigation is only politically worthwhile when exoneration is a realistic possibility, but many virologists admit that a lab leak “may be near impossible to falsify” anyway, due to the inherent difficulties of proving a negative.
Australian journalist Caitlin Johnstone (6/8/21) also argued that China has no incentive to open itself up to more opportunities for bad press when Western media would follow the US’s lead in taking every opening to produce their desired anti-China narrative:
Beijing would be absolutely insane to open its doors to such an investigation, because it would have no way of preventing the US and its lackeys from manipulating the results and producing a narrative which fully incriminates the Chinese government while leaving Washington innocent.

Are her remarks hyperbolic?

Distorting China’s cooperation

NYT: On W.H.O. Trip, China Refused to Hand Over Important Data

Two scientists complained that their views were misrepresented in this New York Times article (2/12/21), with one saying, “Our quotes are intendedly twisted, casting shadows over important scientific work.”

While it’s true China hasn’t shown maximal transparency in the way the US demands (and would itself never grant to others), it’s also true that Orientalist narratives of Chinese secrecy and duplicity seem to be predetermined and unfalsifiable narratives for Western media, as is typical of coverage on countries Washington declares to be its Official Enemies.

For instance, the New York Times’ report “On WHO Trip, China Refused to Hand Over Important Data” (2/12/21) was called out for distorting and misrepresenting quotes given by the WHO team members, like Peter Daszak of the EcoHealth Alliance and Danish epidemiologist Thea Kølsen Fischer (MintPress News2/15/21). The Times claimed that the scientists said that “China’s continued resistance to revealing information about the early days of the coronavirus outbreak” made it “difficult for them to uncover important clues that could help stop future outbreaks of such dangerous diseases.”
Daszak tweeted in response to the article:
This was NOT my experience on @WHO mission. As lead of animal/environment working group I found trust & openness w/ my China counterparts. We DID get access to critical new data throughout. We DID increase our understanding of likely spillover pathways.
Fischer also tweeted:
This was NOT my experience either on the epidemiological side. We DID build up a good relationship in the Chinese/international epidemiology team! Allowing for heated arguments reflects a deep level of engagement in the room. Our quotes are intendedly twisted, casting shadows over important scientific work.
The Times report is especially suspect for insisting on the narrative of Chinese uncooperativeness, as it came less than a week after an Associated Press (2/7/21) interview with Daszak in which he testified that the Chinese side “granted full access to all sites and personnel they requested—a level of openness that even he hadn’t expected.”
 

Rejecting Sinophobic premises

FAIR has documented how US media have politicized the pandemic from the beginning, prioritizing condemnation of China’s political system, scapegoating China for the US’s disastrous handling of the pandemic (3/24/20) and alleging Chinese dishonesty without evidence (4/2/20)—all of which has stoked a surge in anti-Asian racism (3/6/20).
Media constantly repeat the repeatedly debunked myth of China punishing “whistleblower doctors” like Dr. Li Wenliang, and other falsehoods like the Chinese government denying that there was any human-to-human transmission of SARS-CoV-2 before January 20, 2020, or needlessly delaying the release of the SARS-CoV-2 genome (FAIR.org10/14/20; CGTN4/23/208/22/20).
I also pointed out (FAIR.org1/20/21) that Dr. Zhang Jixian, the first doctor to report SARS-CoV-2 to health authorities, was rewarded for coming forward. US corporate  media outlets, however, generally omit her contribution to the world’s discovery of the virus, which would greatly complicate the narrative of a Chinese “coverup.”
The Groupthink That Produced the Lab-Leak Failure Should Scare Liberals
The “lab-leak failure” that New York‘s Jonathan Chait (6/3/21) refers to is corporate media’s initial “failure” to give sufficient credence to an evidence-free conspiracy theory.
This China-vilifying pandemic coverage unsurprisingly extends to the search for the virus’s origins. Although the lab leak hypothesis is often presented by its proponents as a solely scientific inquiry that has been unfairly dismissed for political reasons, in a seemingly innocuous “just-asking-questions” fashion (Salon4/24/20New York1/4/216/3/21), this couldn’t be farther from the truth. The lab leak hypothesis is, in fact, a literal conspiracy theory that is gaining traction due to constant media innuendo.

WIV’s Shi Zhengli has testified that her laboratory never had SARS-CoV-2 prior to first receiving patient samples on December 30, 2019, after the virus was first reported by Dr. Zhang Jixianto health authorities on December 27, 2019 (Scientific American6/1/20). Early speculations led Shi to declare, “I swear with my life, [the virus] has nothing to do with the lab.”
Shi also affirmed that the WIV has only isolated and grown in culture three bat coronaviruses related to any that infect humans, and these are related to SARS-CoV, not SARS-CoV-2. She says she was never ordered to destroy any viruses after the outbreak surfaced, and that there had been “no pathogen leaks or personnel infection accidents” at the WIV to date (Science7/24/20). Shi insists that she would welcome “any kind of visit” to rule out the lab leak theory, claiming she has “nothing to fear,” because she’s confident that she “did nothing wrong.”
If Shi’s testimony is true, the Wuhan lab leak theory cannot be correct, since possessing SARS-CoV-2 in the laboratory prior to the outbreak is a necessary precondition for a lab leak. This is also why any version of the lab leak theory is literally alleging a conspiracy of Chinese scientists lying about their work—along with foreign scientists and officials familiar with their research—in concert with the Chinese government.

Of course, rejecting Sinophobic premises that Chinese people are exceptionally deceptive doesn’t imply the opposite conclusion that Chinese people are incredibly trustworthy; it simply means that the burden of proof is on those alleging Chinese deceit, as it should be for anyone else. Presuming without evidence that WIV scientists are guilty of lying is based on centuries-old Yellow Peril propaganda portraying China as inherently dishonest, coming from a country with a long history of hatred towards Chinese people.
 

Evidence of actual coverup

But perhaps the biggest irony is that there is evidence of lying by Chinese officials. It’s just that the lying points in the opposite direction of a laboratory origin for SARS-CoV-2.
Since the pandemic began, the Chinese government claimed that the Huanan Seafood Wholesale Market vendors, once suspected to be at the origin of the outbreak, never sold any illegal wildlife. Yet it’s been proven that vendors at the markets linked to some of the earliest Covid-19 cases were illegally selling a range of wildlife in unsanitary conditions, from which the coronavirus may have spread (Bloomberg6/7/21). Perhaps the most interesting part of these revelations is that the evidence came from Chinese researchers, from the China West Normal University in Nanchong, who exposed their government’s lies (Nature6/7/21).
US corporate media initially used the Huanan Market origin theory to propagate misleading conflations between wildlife markets and “wet markets,” and perpetuated racist stereotypes of Chinese people’s eating habits being especially unsanitary, but the theory was abandonedbecause the earliest known cases weren’t linked to the market (FAIR.org5/7/20). However, recent evidence that illegal wildlife was being sold at the Huanan Market has caused some scientists to believe a zoonotic origin is even more likely than before, and to give the possibility of a Huanan Market origin a second look.
NPR: Mapping COVID-19’s Early Spread In Wuhan, China

NPR (7/19/21) pointed out that early cases of Covid-19 detected in Wuhan clustered around the market, not around the lab.

Evolutionary biologist Michael Worobey—who signed the open letter calling for a more serious investigation of the WIV—stated “transmission by another species, without a lab escape, is the most likely scenario by a long shot” (NPR7/19/21). Worobey even suspects the spillover began at the Huanan Market, though the WHO team concluded it was “more of an amplifying event, rather than necessarily a true ground zero.”

Scientists who mapped out the locations of the earliest Covid cases in Wuhan showed why believing the WIV to be the source of SARS-CoV-2, simply because the virus was first detected in Wuhan, is simplistic. They found that most of the earliest documented cases and excess pneumonia deaths were clustered around the Huanan Market—with “no epidemiological link to any other locality in Wuhan”—with SARS-CoV-2 detected in environmental samples “primarily in the western section that traded in wildlife and domestic animal products.”

Despite concerns about Daszak’s presence on the WHO team, due to his own organization having worked closely with the WIV, he stated, “Don’t think for a minute” the Chinese government “is happy when we repeatedly state that this likely came out of industrial-scale wildlife farming employing 14 million people” (NPR3/15/21). Rasmussen, who was not on the WHO team, concurred with Daszak:
The Chinese government has a big incentive to keep this quiet. This is exactly how SARS spilled over. It looks very bad and draws a lot of negative attention to the wildlife trade that the same thing could have happened again.
 

Resisting bad faith investigations

Despite all the available scientific evidence pointing in favor of a zoonotic origin—and none for a laboratory origin—the Biden administration directed intelligence agencies (not public health experts) to hunt for incriminating documentary evidence showing that Chinese officials were aware of and lied about the virus leaking from the WIV. On August 24, the director of national intelligence presented what the New York Times (8/24/21) described as an “inconclusive initial report” to Biden. But employing the tools of intelligence rather than epidemiology to the questions indicates that the US is promoting lab leak speculations and demanding a political investigation in bad faith. This is especially troubling, considering that 83% of Americans support taking action against China if US intelligence agencies (not the WHO, or scientists capable of conducting a scientific investigation) “reveal” evidence SARS-CoV-2 leaked from the WIV.

It’s true that an apolitical scientific investigation independently checking Chinese claims about the WIV would be ideal, but we should focus on the available evidence, instead of letting the Biden administration falsely present the possibility of SARS-CoV-2 originating in the Wuhan Institute of Virology being “at least as credible as the possibility that it emerged naturally in the wild” (CNN7/16/21). A conspiracy to hide a lab leak is a logical possibility, but it’s a near certainty that an Orientalist media would use tropes of an untrustworthy China to turn lack of evidence for a lab leak into evidence of a coverup, with potential results somewhere between distracting and disastrous. Research assistance: FY Sun

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Geopolitics

No Australian university has been approved to establish a joint course with a Chinese university since 2019, although universities in other countries – including the US, Britain, Canada, France, Germany and even New Zealand – have been given the go ahead to set up joint programs. Read full article →

British regulators on Thursday fined a Chinese state-owned broadcaster, which has already had its licence revoked, £200,000 (US$274,000) for failing to comply with fairness and privacy rules. Ofcom said it had fined Star China Media Limited  £200,000 “for serious breaches of our fairness and privacy rules on its CCTV and CGTN services”.  The complaints involve two high-profile Hong Kong dissidents, Simon Cheng and Gui Minhai. Read full article $→

There are few things in our kaleidoscopic world we can count on – for predictability, for fixity of outlook, for unswerving resistance to the vicissitudes of life. The American foreign policy community is one of them. They reliably react to stunning events in the world with reiteration of what they have been saying for years and decades They do so in unison. They never admit error of analysis or of policy, they preserve a righteous tone, and they retain a permanent inventory of persons to scapegoat – and, equally important, those who are always exempt from blame. The Afghan debacle demonstrates, once again, how deeply entrenched this behavioral pattern is. It is self-evident, it is glaring, and it is a reason for both shame and for doubting the United States’ ability to conduct its external relations in a sober, reasonable manner.  Michael Brenner, MoA

In a call with the Pakistan Foreign Minister Shah Mahmood Qureshi on Wednesday, China's FM Wang made four suggestions for China-Pakistan collaboration:

  1. encourage Afghan parties to establish a broad-based and inclusive political structure ‘suited to the Afghan national conditions’
  2. support Afghanistan in its ‘resolute fight’ against terrorism;
  3. communicate with the Taliban to ensure the safety of Chinese and Pakistani personnel and establishments; and,
  4. promote international cooperation to involve Afghanistan ‘in an orderly manner, and especially give play to the unique role of neighbouring countries, so as to push the situation in Afghanistan gradually into a virtuous circle, during which various mechanisms should complement each other and expand consensus.’ Read full article →

White mans media: You and I currently live on a glorious planet with almost eight billion people in about 200 countries and an astonishing range of cultures. Yet only one, consisting of 8% of the world’s population, claims precedence. Why? My most listened-to music genre last year, according to my music app, was melodic Taiwanese retro jazz. Yes, it surprised me, too. But wait a second. I look up the Rolling Stone list of the 500 greatest songs ever. It tells us that virtually all the good music comes from just two places—the US and Western Europe. The US contains about 333 million people, a little less than five percent of the world’s population, and Western Europe, with 196 million, about three per cent. So that’s 8%. What about the other 92% of humanity? The rest of us have no good music?


The Best Everything

Let’s look at other media. The international press presents the Booker Prize and the Pulitzer Prize for Fiction as the identifiers of the world’s best books. But both competitions are limited to books published in the same two parts of the world – specifically, they are limited to the UK, Ireland, and the US.

In fact, when we, in fact, look at the lists of the best TV shows, the best movies, the best culture, the best fantasy novels, the best pretty much everything – we find that almost all of it comes from the same two places: the US and Western Europe. And it makes no difference whether we consult the international media from Asia or Africa or Australia: the results are largely the same.
 

Story gets dark

Now here’s where the story gets dark. Let‘s look specifically at the news media. International news coverage, worldwide, is dominated by three news agencies: Reuters, Associated Press and Agence France Presse. And they are all are from the… Same. Two. Places.

The scale of this problem is huge: the majority of news outlets around the world, whether you’re reading the Bangkok Post in Thailand or the Hindu in India, their international news is provided by the same news agencies, from the United States and Western Europe. All three have received cash from NATO governments, and all have the exact same biases.

What if you avoid the “international news” pages of your local newspapers and look at other news sources which have their own reporting staff?

Well, let’s think about the dominant news channels today. We have the BBC, the New York Times, the Guardian, the Daily Mail, CNN, the Washington Post, and so on. And we’ve got the online channels, too, which have become news delivery channels: Facebook, Twitter, YouTube, Instagram, and others. You know what? All of them are from the… Same. Two. Places. [Cue eerie music.]
 

We are the enemy

All this is frankly disastrous for the rest of the world, and particularly the places not allied to the lucky eight per cent. By being seen as “the enemy”, we get a rough ride, every news bulletin, every day, every week, every year. My home country, China, is demonized to a ridiculous extent, but we’re not the only ones.

Why do they do this? Why does the mainstream media, which means the Western media, work so hard to polarize the world? Well, some do it deliberately, others, I’m not sure. It wins them clicks, it makes them money, it confirms their biases, and there’s probably a touch of innate racism in there too. Some of the bias will be deliberate, while some may be accidental.

My group has been quietly running a survey on mainstream news outlets to see which produce positive, neutral or negative articles on Hong Kong and mainland China. We knew there would be some level of bias, but were stunned that so many outlets literally never produced a positive political article on our city or our country.
 

The good news

This all sounds gloomy, but this writer is actually feeling upbeat. The Edelman annual survey on the press indicates that around 60 per cent of people mistrust the media. It’s good that most people have some healthy scepticism about the press – and I say that as someone who has spent their entire working life in the media.

And things are definitely changing. New voices are being heard, new channels are opening up, new formats are evolving, and new messages are getting out. All over the world, alternative media outlets are springing up, with Pearls and Irritations being a particularly celebrated one. (This writer also runs a small one.) Alternative media outlets invariably have tiny budgets – but our support teams are huge, because they are the unheard voices which need to be heard. In others, they are the silenced majority.

The fact that eight per cent of the world provides international news for the rest of the planet is a dangerous anomaly. And the thing about anomalies is that they eventually tend to fix themselves through cultural evolution.

Just wait. And while you are waiting… if you’ve never heard melodic Taiwanese retro jazz, try Bossa Sweet Orange by CinCin Lee. You can thank me later. Nury Vittachi is a journalist and author based in Hong Kong. He wrote the comedy-crime novel series The Feng Shui Detective as well as non-fiction works and novels for children.  

Hong Kong

Hong Kong's economy grew 8% in Q1 2021, according to finalised data that confirms the city's biggest GDP jump ever. Read full article $ → 

Nobody's leaving Hong Kong. PANIC! Huge exodus! “Anecdotal evidence” from Bloomberg and other media see massive numbers of people fleeing “devastated Hong Kong” (New York Times). In fact, “up to 5.4 million” people are getting BNO passports and taking out ALL of Hong Kong’s money with them — or at least more than US$100 billion. The few of us who remain will have to start buying stuff by bartering rocks and leaves. But anecdotal evidence isn’t evidence. The actual data — yes, there are actual data, if you look hard enough — paint a different story. Yes, there are people leaving the city, but academics and analysts say it’s small, a five figure sum, and not nearly enough to have any seriously negative effect on the Hong Kong community’s financial position or property market. Let’s do the math:


1) Outflow statistics

A typical report was one which appeared in a newspaper yesterday, saying that “a total of 89,200 or over 1 percent of Hong Kong residents left the city in the first half of 2021, according to the Census and Statistics Department. Their departure is estimated to cost the city at least HK$61.4 billion in annual GDP, based on 2020’s GDP of HK$2.671 trillion.”

This is simply wrong. The 89,200 figure is not a “first half” number of emigrants fleeing Hong Kong, but a 12-month total figure of all departures, including business trips, holidays and visits to grandma in mainland China, from which people will return, making nonsense of the writers’ GDP claims. 


2) Pension cash 

Ah, but huge numbers of people ARE leaving, they argue. You can tell because the total amount of MPF (mandatory provident fund) cash withdrawn on grounds of “permanent departure” rose a whopping 27.3% year on year.

The number is real but the understanding is wrong. The 27.3% rise simply reflects the 35% climb in the value of total MPF assets. We should look at numbers of claims, not the dollar value.

Those numbers actually imply a drop in the number of people leaving Hong Kong. Even given the fact that some people leaving on BNOs can’t immediately get their cash, the figures don’t indicate much of an exodus, and certainly not a large one. In the financial year 2017-18, there were 36,500 “final departure” MPF withdrawals.

Since there was no Western-constructed political narrative going on, no meaning was assigned to it. That figure has fallen to 30,300 for the most recent financial year, 2020-21, yet is interpreted as an exodus, which makes no sense.

Still, this is at least clear proof that at least 30,300 Hong Kong people have fled, right? 

Actually, no. People often have more than one MPF account, so the number of claims is always significantly higher than the number of actual humans involved. 

Further, the 30,300 total includes every non-local employee who has returned to their countries of origin: all expats or immigrant workers. They take their pensions when they go.

Third, the figures also includes individuals moving from Hong Kong to Mainland China. This is not an inconsiderable number of people. The recent Chinese census shows that at least 370,000 Hong Kong people have moved to live indefinitely in the mainland.


3) Police Certificates 

The third piece of “evidence” quoted for a huge exodus is the fact that there have been 22,897 applications for Certificates of No Criminal Conviction in the first seven months of 2021. (These are bits of paper you need if you want to emigrate.) 

Let’s check previous figures: in 2019, police gave out an average of 2,771 certificates a month. The difference between that year’s figure and this year’s figure is 500 a month, so the total number of “extra” people leaving this year, if that rate is maintained until the start of 2022, would be 6,000. Not a lot.

 This again is very powerful evidence for the low estimates of people emigrating, not the high ones.


4) BNO passports

The fourth piece of “evidence” for a mass departure is the number of people apparently flooding into the UK on BNO passports  – we read estimates of the BNO route eventually serving between 330,000 and 5.4 million Hong Kong citizens, depending on which newspaper you read.

But what are the actual figures? The British government says that there were 34,000 applications made in the first quarter of the year, of which only 21 per cent were granted: or 7,140. More figures, for the second quarter, are due to be released before the end of this month, but whatever they are, these again are small numbers, not large ones.


5) Walking away from assets

The fifth piece of “evidence” for the mass outflow is the rocky nature of Hong Kong’s markets: we see periodic corrections in share markets and some jittery apartment buyers walking away from their deposits.

Yet despite these occasional reports, the overall trend is clearly upwards, as analysts agree. Property prices are rising steadily at an annualized rate of about 3.8%. The KPMG Hong Kong Banking Report 2021 shows that bank deposits grew rapidly, with the total 2021 assets of all licensed banks expanding by 8.8% over a year.

If vast numbers of people are taking their cash away, why do we have MORE of the stuff in our banks? 


Conclusion

Journalists get hold of a narrative and many become congenitally unable to do anything except keep feeding it, even if it is clearly wrong. So they continue to write reports which imply that millions of people, or at least several hundred thousand, are leaving Hong Kong forever.

But the numbers tell a different tale.

Terence Chong Tai-leung, an associate professor of economics at the Chinese University of Hong Kong, estimates that only around 10,000 Hongkongers have departed, according to the Standard newspaper.

Other academics and analysts to whom we spoke gave estimates also in the low to medium five-figures bracket. So, a few tens of thousands in a population of 7.4 million — proportionally far fewer than left Hong Kong in the 1990s before the 1997 change of sovereignty from Britain to China.

For comparison, London’s population dropped by between 400,000 and 600,000 between 2019 and 2020, according to a University of Oxford study. Young working-age people in their 20s and 30s left in the greatest numbers. Other studies gave higher numbers, up to 700,000.

So will 10,000 (or 20,000 or 50,000) departures from Hong Kong create a financial crisis? I can’t find a single knowledgable source who thinks they will. Our Purpose

Defense

The People’s Liberation Army Rocket Force has improved the accuracy and range of its ballistic missile force, the world’s largest, according to a new US Army report. The DF-11, the most widely deployed short-range ballistic missile, was originally designed to hit targets up to 300km away, but newer models have expanded ranges beyond 700km. "Accuracy has also increased, reducing" the intended target point to only 30m, "giving theatre commanders a long-range precision strike capability", according to the army publication. The DF-11 can employ both conventional and nuclear warheads. The "solid-fuel rocket and mobile transporter-erector-launchers enable rapid launch and reload operations", it added. Read full article $→

China has successfully tested two short-range conventional missiles designed to take out enemy communications systems. The PLA Rocket Force recently tested two new missiles that can overcome “complex electromagnetic interference” to destroy facilities in a “fast-reaction” operation. “[The missiles] successfully hit the target in an enemy camp equipped with multilayer defences several hundred kilometres away and effectively paralysed the enemy’s key communications node,” CCTV reported. Read full article $→
LONG READS
Stealing IP?
US Huawei Claims Regarding Pakistan

A Perfect Propaganda Storm


Joseph Thomas - NEO

Western media have been reporting on a US-based software maker, Business Efficiency Solutions (BES), and its allegations that Huawei not only “stole” its technology, but also built in “back doors” into a law-enforcement project built in Pakistan.
 
It’s a three-for-one allegation, cementing further an ongoing and so far evidence-free narrative pushed by the US government that Chinese telecom giant Huawei is (1) a threat to global security, (2) reinforcing the notion that Huawei (and other Chinese companies) thrive by “stealing” technology from the West and (3) an attack on Chinese-Pakistani relations.
The Register in its article, “Huawei stole our tech and created a ‘backdoor’ to spy on Pakistan, claims IT biz,” would claim:
A California-based IT consultancy has sued Huawei and its subsidiary in Pakistan alleging the Chinese manufacturer stole its trade secrets and failed to honor a contract to develop technology for Pakistani authorities.
And that:
The legal filing claims, among other things, that Huawei has used BES’s Data Exchange System “to create a backdoor and obtain data important to Pakistan’s national security and to spy on Pakistani citizens.”
What is interesting is that beyond the allegations, no evidence is produced. The Register’s article even cites other indictments regarding Huawei to bolster the narrative, but indictments are merely more accusations.
At one point, The Register admits (emphasis added):
Last year, during the Trump administration, US authorities claimed that Huawei can covertly access its telecom equipment. But evidence to that effect, if it exists, has not been made public.
The Wall Street Journal also covered the story in their article, “Huawei Accused in Suit of Installing Data ‘Back Door’ in Pakistan Project.” In it, they admit that Pakistan’s investigation into the matter has turned up no evidence to support BES’ allegations.
For the US government, whose credibility suffers because of serial deceptions including those misleading the American public into multiple disastrous wars, if it had credible evidence regarding Huawei, it likely would have disclosed it. Not disclosing it leaves the world to assume that just as the US lied about Iraq possessing “weapons of mass destruction” leading to the US invasion of Iraq in 2003, the US government is also lying about Huawei to pressure yet another targeted nation, this time China.
Besides reinforcing Western narratives undermining Huawei, the allegations also seem to be targeting Chinese-Pakistani relations.

China and Pakistan are close partners economically and militarily. Pakistan is also a key partner in China’s Belt and Road Initiative (BRI) which includes the China Pakistan Economic Corridor (CPEC), a series of roads, pipelines and other infrastructure projects stretching from Pakistan’s border with China in the north to Gwadar Port in Pakistan’s southwest region of Baluchistan.The US has overtly attacked this project, quite literally, through the use of armed separatists it backs in Baluchistan.

Baluchistan, the site of Gwadar Port, is the terminal of the entire CPEC corridor. Beyond backing armed militants to physically attack joint projects and those working on them, the US sought to carve Baluchistan off from Pakistan’s territory altogether, entirely and permanently blocking this key leg of the BRI.

Op-eds in publications like The New Interest titled “Free Baluchistan,”  US House of Representative hearings openly calling for backing an “independent’ Baluchistan, and US House of Representative resolutions like one in 2012 titled, “Expressing the sense of Congress that the people of Baluchistan, currently divided between Pakistan, Iran, and Afghanistan, have the right to self-determination and to their own sovereign country,” make it clear just how far the US is willing to go to sabotage Chinese relations with its allies, foil joint projects and stop the BRI.

Promoting baseless accusations is such a small contribution to an already very wide and malign campaign against China, its businesses and its allies.

The Register also notes a BBC article titled, “Huawei wi-fi modules were pulled from Pakistan CCTV system,” in which the inclusion of WiFi cards in CCTV systems is depicted as a possible attempt by China to monitor Pakistani citizens, though no explanation is given as to why China would want this capability.

The BBC even admits that the inclusion of the WiFi cards was included in Huawei’s tender for the contract with a much more plausible explanation given as to why they were included, for remote diagnostics for the operators of the system.

The BBC also admits that Pakistani officials found that the cards were never used, and promptly removed by Huawei upon Pakistan’s request, not because they were being abused, but because they could potentially be abused, and not specifically by Huawei, but in general.
Pakistani officials and a Chinese company transparently and promptly addressing security concerns is portrayed by the BBC as something potentially more sinister. The Register then lumps what was already a stretch in narrative by the BBC to bolster BES’ otherwise baseless claims made against Huawei.

It is the creation of a propaganda storm efficiently fulfilling multiple Western propaganda objectives against China while making up for a lack of actual evidence by substituting in a large number of accusations, hoping readers do not understand the difference and never  inquire too deeply into any of them and discover just how tenuous the narrative is.

Stories regarding Huawei’s business in Pakistan, when read carefully, demonstrate Pakistani officials being happy with Huawei’s service and another example of Chinese-Pakistani ties benefiting both nations. These stories thus require a third party like US-based BES to inject itself into the middle of this relationship to taint it, while further attacking Huawei’s credibility. And the Western media is more than happy to go along.
Joseph Thomas is chief editor of Thailand-based geopolitical journal, The New Atlas and contributor to the online magazine “New Eastern Outlook”.
Afghan Crisis

Above: Kabul Chinatown


The Afghan Crisis in Chinese Media


Talk of the Town

Unlike the majority of overseas issues, particularly those with high relevance to China’s own foreign policy, the media narrative on Afghanistan has yet to settle, with the tone of coverage ranging the full gamut from optimism to shock and horror. This in itself is noteworthy.

In this sense, the Chinese media conversation on Afghanistan has in fact been far more diverse than its Western counterpart. When it comes to Chinese official media, the sense of pessimism, regression and dread that dominated Western media coverage, was strikingly absent. The tone of official media was rather on a spectrum between moral and political ambivalence to optimism that change could lead to a better future. Much of the tone was set by the Ministry of Foreign Affairs’ attempted apolitical official position on the Taliban takeover. “We respect the will and choice of the Afghan people,” said Hua Chunying on Aug 16.

A point that has come up consistently in Chinese official media is that the Taliban is changing, becoming less conservative and should be given the benefit of the doubt. As we noted a few weeks ago, this argument was present when the Taliban delegation visited Tianjin on July 28. Interviewed by the Global Times last week, Zhu Yongbiao, Director of the Lanzhou University Afghanistan Research Center, expressed that the Taliban are unlikely to carry out “brutal revenge attacks” against former government and army personnel, a major concern in Western commentary. He also stressed that the higher levels of Taliban leadership who have appeared in media coverage over the last week do have a strong degree of control over the actions of middle and lower ranks, indicating that we should trust that what the upper echelons promise can indeed be implemented on the ground in Afghanistan. Echoing this point, Zhou Rong of the Renmin University Chongyang Institute for Financial Studies, said to Global Times that the Taliban’s main efforts going forward will not be recriminations and violence, but on constructing a new country (“建国”) under their leadership. For this to succeed, they require international recognition and therefore have little interest in doing anything which will damage relations with key partners, including China.

An opinion piece on Daodu Shijie, a WeChat account managed by Singaporean Chinese language paper Lianhe Zaobao, suggested that “state media are warming up public opinion for China to recognise the Taliban government.” 

Outside of Chinese policy thinking circles, a Chinese businessman based in Kabul also offered an optimistic outlook in an interview with Southern Weekend. “There has been war here for 40 years, people don’t want to fight again. My Afghan friend once expressed this to me saying, ‘we fought for two generations, we don’t want to continue’,” he told the journalist.

What these future-looking accounts largely gloss over is the fear of a return to the atrocities of the last Taliban era, the topic which most dominated Western media coverage and contributed to scenes such as Afghans clinging to the side of Western evacuation planes in their desperate attempts to escape Taliban rule. A focus on these aspects was very present in other quarters of the Chinese media discussion, however. Numerous non-official WeChat accounts with high readership, usually among young and well educated audiences, highlighted issues such as women’s rights and education. A translation of a letter by Sahraa Karimi, general director of Afghan Film, speaking out against the horrors of Taliban rule – particularly against women – and calling on the world “not to abandon Afghanistan” went viral online, numerous reposts reaching in the 100s thousands of views. Another viral article focused on female musicians and their fear that everything they achieved over the last 20 years would be lost.

The audiences for such articles, more aligned with Western narratives on Afghanistan, are interest-driven, niche, and probably bubble-like. On women’s rights, the bubble has not been totally impermeable, however. An interesting Weibo account is that of Gao Cheng, a former Chinese diplomat in Afghanistan. In her reflections on the country last week, she noted how she was often the only woman on flights going to Kabul, and certainly the only not wearing a full burka.

 

Infrastructure?

Another key aspect of the Chinese discussion on the new Afghanistan has been on to what extent Chinese infrastructure investments should enter the country. In an OpEd for the New York Times on Aug 20, a former senior colonel in the People’s Liberation Army, Zhou Bo, argued boldly that “Beijing can offer what Kabul needs most: political impartiality and economic investment. Afghanistan in turn,” he continued, “has what China most prizes: opportunities in infrastructure and industry building — areas in which China’s capabilities are arguably unmatched — and access to $1 trillion in untapped mineral deposits.” The BRI is the lens through which many in China view developments in Afghanistan. Some are optimistic that a “stabilized” Afghanistan will be a plus to trade and connectivity routes going from Xinjiang to Pakistan and Iran. Others warn that a Taliban-ruled Afghanistan only worsens China’s security prospects in Central Asia, giving the fundamentalist group great leverage in threatening the Silk Road Economic Belt. Citing Iranian scholar Seyed Mohammed Marandi’s words, an observer on Weibo suggests that the US’s sudden pullout is a calculated move to sow chaos in the region in an attempt to disrupt the BRI. 

As we show in this week’s newsletter, there are reasons for both optimism and pessimism for Chinese investments in the country. On the one hand, resourceful Chinese businesses have cultivated genuine economic connections in Afghanistan largely in an improvised, bottom-up fashion. On the other hand, key Chinese investments in the country have historically struggled to get off the ground. Whether the removal of US and allied forces and the re-emergence of a Taliban led government will provide for a better investment environment seems unlikely. But if the last few weeks have shown us anything about Afghanistan, it is that the unlikely can very quickly become reality.

As the US military, foreign embassies and civilians fled Kabul in a frenzy that shocked the world, others decided to stay. Among them are Chinese managers and employees of China Town, a trade center for Chinese goods and services in the middle of the city. Their accounts to the media back home gave Chinese society a glimpse of what’s going on in Kabul. China Town’s presence and development in Kabul also illustrates the spontaneous and somewhat messy nature of Belt and Road projects in a country of extreme uncertainty like Afghanistan.

“We don’t want to give local people the impression that us Chinese are unreliable and will escape at the first sight of trouble,” Yu Minghui, the person in charge at China Town, told Global Times. He claims that China Town has a few outstanding contracts with Afghan ministries and the state grid, and he is not considering bailing on them. In another interview, he told Yicai that the trade center is suspending business for 3 days to “observe the situation”, but he did not expect major disruption to China Town’s plans in Kabul.

Yu has been doing business in Afghanistan since 2001. “Over the two decades, the Chinese business community’s relationship with the country has shifted,” he told Yicai, “from one-off sale of low-quality products, we are now developing longer term business relationships.”

The China Town’s evolution in Kabul is a reflection of the other side of China’s “Going Out”, which is not strategically coordinated, infrastructure driven and executed in a top-down fashion. The trade center grew out of loosely connected business and investment interests in the post-war Afghanistan that brought Chinese companies and business people to the country starting from 2002. The privately invested Minghai Steel project in 2010 was a major catalyst in the process, as the investor later seized upon China’s increasing interest in Central Asia after 2013 and jumped on the bandwagon of the BRI to turn the project into a multifunctional platform for facilitating China-Afghanistan trade and investment. It took another 6 years before the China Town idea materialized into a building complex in central Kabul, offering shop fronts, storage space, hotel rooms and even karaoke facilities for those interested in finding business opportunities in the impoverished country.

The project is gradually finding its place in China-Afghanistan economic interactions. One year after its opening ceremony in Kabul, it is already looking to expand into an industrial park with manufacturing capacities for electric wires, shoes, garments and plastics. In early June this year, China Town even reached an agreement with the Afghan government on building a 300MW coal-fired power plant to solve the chronic problem of power shortage once and for all. The rooftop of the China Town building has also become a demonstration space for Chinese solar technology. “China is exploring ways to bring peace to Afghanistan through economic means, not military force,” Yu Minghui quoted a Peking University expert in a blog he contributed to Guancha.cn on Aug 11. His China Town will be a major test of that philosophy in a Taliban-ruled Afghanistan.

 

Minerals?

Another project that has aroused much speculation amid the latest political turmoil is the mothballed Mes Aynak copper mine 40km southeast of Kabul. In 2008, the Metallurgical Corporation of China (MCC) and Jiangxi Copper Corporation won a major deal to develop the mine, believed to contain ores worth USD 50 billion, but progress has since been minimal. Mining was stalled by difficulties in building key infrastructure, lowering copper price in the global market, and unstable security situations throughout the years. The uncovering of an ancient Buddhist shrine on top of the deposit also became a major regulatory roadblock for the Chinese developers.

After the Taliban takeover of the country last week, The Paper contacted Jiangxi Copper Corporation and the company responded that all its on-site staff members had been evacuated to Pakistan early on. It could not share more information as it was in a quiet period before releasing its H1 2021 report to shareholders. 

Meanwhile, MCC was much more blunt about its frustration with the project. The company complained that the Afghan government had not fulfilled its commitment to secure crucial phosphorus and coal resources for the project, and procrastinated on issues of relocating villages, clearing land mines and sorting out archeological arrangements. MCC told the Paper that it engaged the Afghan side on multiple rounds of renegotiation. As recently as 2019, MCC conducted a feasibility study of underground mining following the requirement of the Afghan Ministry of Mining and concluded that it was uneconomical. The request was likely made to explore ways of mining that avoid destroying the archeological site. Progress was further stalled by Covid-19 in 2020. “Copper price has been good recently.

The project could have had decent economic returns if it were in operation now,” an MCC spokesperson told the Paper, “but it will take 4-6 years before Mes Aynak can be brought to operation. In the current circumstances, we will take very careful considerations about its economics, after the political situation stabilizes.” Since coming into power, Ashraf Ghani’s government reached multiple deals with China on railways, roads and residential buildings. Some of them are still ongoing, including the 300MW coal-fired power plant mentioned above whose agreement was barely two months old before its signatory partner, the Afghan government, became obsolete. We will likely see a lot of reassessment, renegotiation and reconfiguration of such projects in the coming months and years.


Further reading

Afghanistan
In Afghanistan, China Is Ready to Step Into the Void


By Zhou Bo

Zhou Bo is a senior fellow at the Center for International Security and Strategy at Tsinghua University and a member of the China Forum. He was a senior colonel in the People’s Liberation Army from 2003 to 2020 and is an expert on the Chinese army’s strategic thinking on international security. He directed the Centre for Security Cooperation in the Office for International Military Cooperation at the Ministry of National Defense.

The speed and scope of the Taliban’s takeover in Afghanistan have prompted introspection in the West over what went wrong, and how, after billions of dollars spent on a 20-year war effort, it could all end so ignominiously. China, though, is looking forward. It is ready to step into the void left by the hasty U.S. retreat to seize a golden opportunity.

While Beijing has yet to formally recognize the Taliban as Afghanistan’s new government, China issued a statement on Monday saying that it “respects the right of the Afghan people to independently determine their own destiny” and will develop “friendly and cooperative relations with Afghanistan.”

The message here is clear: Beijing has few qualms about fostering a closer relationship with the Taliban and is ready to assert itself as the most influential outside player in an Afghanistan now all but abandoned by the United States.

Unlike the United States, China brings no baggage to the table in Afghanistan. China has kept a low profile in the country since the U.S. invasion, not wishing to play second fiddle to the United States in any power politics. Beijing watched as Washington’s foray in Afghanistan became a messy and costly morass. In the meantime, China providedAfghanistan millions of dollars in aid for medical assistance, hospitals, a solar power station and more. All the while, Beijing was fostering stronger trade relations, eventually becoming one of Afghanistan’s largest trading partners.

With the U.S. withdrawal, Beijing can offer what Kabul needs most: political impartiality and economic investment. Afghanistan in turn has what China most prizes: opportunities in infrastructure and industry building — areas in which China’s capabilities are arguably unmatched — and access to $1 trillion in untapped mineral deposits, including critical industrial metals such as lithium, iron, copper and cobalt. Though critics have raised the point that Chinese investment is not a strategic priority in a less secure Afghanistan, I believe otherwise.

Chinese companies have a reputation for investing in less stable countries if it means they can reap the rewards. That doesn’t always happen so smoothly, but China has patience. Although the presence of U.S. troops went some way toward preventing armed groups from using Afghanistan as a haven, their exit also means that a 20-year war with the Taliban has ended. Therefore the barriers for Chinese investment on a large scale are removed. China is of course a major buyer of the world’s industrial metalsand minerals to fund its economic engine.

One of China’s current long-term strategic investment plans is the Belt-and-Road Initiative, an effort to finance and build infrastructure across the region. And Afghanistan until now has been an attractive but a missing piece of the enormous puzzle. If China were able to extend the Belt-and-Road from Pakistan through to Afghanistan — for example, with a Peshawar-to-Kabul motorway — it would open up a shorter land route to gain access to markets in the Middle East. A new route through Kabul would also make India’s resistance to joining the Belt-and-Road less consequential.

Even before its takeover of Kabul, the Taliban had promised to protect Chinese investments in Afghanistan.

Beijing is now also positioned to hold greater influence over the country’s political landscape. Afghanistan’s history tells us that one group is rarely in control of the entire country, and given the Taliban’s lightning takeover, it’s reasonable to expect some civil strife. China — already the largest troop contributor to U.N. peacekeeping missions among the five permanent members of the United Nations Security Council — has also registered a peacekeeping standby force of 8,000 troops — a move that could make it one of the largest contributors overall. If a U.N. peacekeeping mission is deployed to Afghanistan, Chinese peacekeepers, coming from a friendly neighboring country, will almost certainly be more welcome than those from afar.

Becoming an influential player in Afghanistan also means that Beijing is better positioned to prevent what it considers anti-Chinese groups from gaining a foothold in the country. A primary concern of China is the East Turkestan Islamic Movement. According to a Chinese government report, the group had early roots in Afghanistan. According to the U.N., it receivedTaliban and Al Qaeda support in the 2000s. Some scholars and expertsquestion whether the group has the capacity to instigate violence, or whether it even continues to exist. Still, China’s foreign minister, Wang Yi, said in a July meeting with Mullah Abdul Ghani Baradar, the deputy leader of the Taliban, that he hoped the Taliban would “make a clean break” with the East Turkestan group because it “poses a direct threat to China’s national security and territorial integrity.” Mr. Wang also expressed hope that the Taliban would “build a positive image and pursue an inclusive policy” — a signal that China wants the Taliban to make good on its promise of “inclusive” governance.

In response, Mr. Baradar promised that the Taliban would never allow any group to use the Afghan territory to engage in acts harmful to China.

The key to Afghanistan’s peace and stability, of course, also lies partly in Pakistan. Despite their proximity, the “conjoined twins,” as described by the former Afghan president Hamid Karzai, don’t always look in the same direction. Pakistan’s Afghanistan policy is driven largely by the strategic goals of ensuring a friendly government in Kabul and undercutting India’s increasing influence in Afghanistan. It is in Beijing’s own interest — not least for the success of Belt-and-Road — to ensure that Pakistan and Afghanistan are on good terms.

It is no secret that China already enjoys strong influence in Pakistan. Anticipating a more prominent role and future necessity, Beijing pledged in June to continue helping develop and improve relations between the two countries.

Finally, even though the United States is leaving, there is an opportunity for Beijing and Washington to work together for a stable Afghanistan. China and the United States, despite their differences, have enjoyed some cooperation in Afghanistan already — for example, jointly training diplomats and technicians. Neither country wishes to see Afghanistan slide into a civil war. Both of them support a political solution that is Afghan-led and Afghan-owned. Therefore, Afghanistan provides an area for the two competing giants to find some common cause.

When Mr. Wang spoke to Secretary of State Antony Blinken on Monday, he said China stood ready to work with the United States to “push for a soft landing of the Afghan issue.”

Afghanistan has long been considered a graveyard for conquerors — Alexander the Great, the British Empire, the Soviet Union and now the United States. Now China enters — armed not with bombs but construction blueprints, and a chance to prove the curse can be broken. New York Times

HSBC
THE UNTOLD STORY OF MENG WENZHOU
HSBC is the 800-pound Gorilla in the Canadian Courtroom that No One is Talking About

The Judicial Incubus Weighing on Huawei CFO Meng Wanzhou’s Shoulders

 

Ms. Meng was apprehended in Vancouver, Canada, on December 1, 2018, at the behest of the United States, to be extradited south of the 45thparallel. Since then, she has been battling in court and in the headlines to show that U.S. charges of fraud are unfounded, and that she should be released. She has been under house arrest in Vancouver for 2.5 years, grinding out endless testimonies, cross-examinations, and now a series of U.S./Canadian v. Meng legal team hearings, in the British Columbia Supreme Court.

We are not a part of this case, it would be inappropriate for us to comment … HSBC provided objective facts to the USDOJ (US Department of Justice) – HSBC, July 16, 2020.

What is so incredible about this high-profile, very Sino-American geopolitical jousting match is how involved HSBC was from the start. Nevertheless, it continues to fly under, over, through and around Western mainstream media, like the perfect computer-modeled stealth fighter. HSBC and Meng in the same headline? Virtually nada.
 

HSBC is not just any bank

It is Europe’s largest financial institution and has held this pole position since 2017. What makes HSBC so bad is its origin and raison d’être. As detailed in The China Trilogy, 19th century British Queen Victoria and all subsequent royals have bragging rights to being history’s grandest king/queen-pin drug dealers, running the world’s longest lasting, biggest criminal global enterprise.
From 1839 to 1949, they shamelessly and venally pushed mountains of opium, and later morphine and heroin—after they were invented—onto, by some reports, up to 25% of China’s population.

This Chinese Century of Humiliation lasted from the first Opium War, in 1839, until Communist liberation in 1949. It was such a traumatic and devastating experience for the Chinese nation, that every post-liberation leader, from Mao Zedong to Xi Jinping, always frames the start of China’s long march back to global prominence from 1839. In 5,000 years of recorded history, this year was the people’s nadir.

All of those illegal drugs going into China, and boatloads of Chinese silver, tea, silk, porcelain, clocks, furniture and many other high-value products going out to Britain’s vast global empire, represented over the decades trillions of today’s pounds/euros/dollars, hundreds of thousands of contracts, with an equal number of payer-payee transactions. 
Queen Victoria’s solution to launder all this ill-gotten wealth was to create Hong Kong and Shanghai Bank (HSBC), in 1865, based in London. Thoroughly Western, in spite of its duplicitous moniker, HSBC was the financial appendage of the British Crown, well into the 20th century, while being run under the UK’s economic aegis, until Hong Kong (HK) was returned to the People’s Republic of China in 1997.

HSBC has always been British, but is still very important to Hong Kong’s financial affairs. It is one of only three banks that have the authority to mint HK currency. It goes without saying that having the power to mint a currency is a fabulous advantage to launder and move money, much of which comes from illegal drug sales.
 

Old drug dealing and money laundering habits die hard

Which brings us to HSBC’s corporate governance, and it is not a pretty picture. After a century of drug cartels and their highly profitable money laundering, old, lazy criminal habits die hard.
In a 2016 article, just as the Meng Wanzhou/Huawei-cum-HSBC drama was converging in Washington, D.C., even uber-establishment Forbes had to note all the regulatory investigations, and pending/actual civil and criminal lawsuits that HSBC was facing. Reading it reminded me of Leporello’s catalog of Don Giovanni’s conquests in Mozart’s opera of that name:
In Italy, six hundred and forty; 
In Germany two hundred and thirty-one; 
One hundred in France, in Turkey ninety-one; 
But in Spain there are already one thousand and three.


Like Don Giovanni (better known under the Spanish form of his name, Don Juan), it appears HSBC is responsible for multiple violations in multiple countries. The list is as long as your arm. Wherever there is some dodgy scam going on in the world, HSBC is likely to have a finger in it.
HSBC’s 2015 media release (hsbc-holdings-plc-annual-results-2015-media-release.pdf (dropbox.com)) contains a section on Legal Proceedings and Regulatory Matters. In it, HSBC is unrepentant to its historical, drug cartel core, stating,

HSBC is party to legal proceedings and regulatory matters in a number of jurisdictions arising out of its normal business operations. Apart from the matters described below, HSBC considers that none of these matters are material.

Normal business operations? At least they got that right. Financial crimes are immaterial? Go figure. The following concerns are listed after this cheeky preamble:
  • Anti-money laundering and sanctions-related matters.
  • Bernard L. Madoff Investment Securities LLC.
  • Credit default swap regulatory investigation and litigation.
  • Economic plans: HSBC Bank Brasil S.A.
  • European interbank offered rates and other benchmark interest rate investigations and litigation.
  • Fédération Internationale de Football Association (‘FIFA’) related investigations.
  • Foreign exchange rate investigations and litigation.
  • Hiring practices investigation.
  • London interbank offered rates.
  • Precious metals fix-related litigation and investigations.
  • Regulatory review of consumer “enhancement services products.”
  • Securities litigation.
  • Tax-related investigations.
  • US mortgage securitisation activity and litigation.
  • US mortgage-related investigations.

Bring on the dope and rake in the cash

In 2012 U.S. prosecutors charged HSBC with drug cartel money laundering in Mexico, amounting to at least $881 million. It was fined $1.9 billion and, in December 2012, it agreed to a five-year DPA (Deferred Prosecution Agreement), to clean up its act and cooperate with any and all U.S. investigations.
An assistant attorney general, Lanny Breuer, opined:
HSBC is being held accountable for stunning failures of oversight – and worse … that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries.
It was the third time in ten years where HSBC had been prosecuted for similar crimes.


Targeting Huawei in Internal Probe

In 2012, under a Deferred Prosecution Agreement (DPA), Michael Cherkasky, Executive Chairman and Head of Exiger Government Services, was named HSBC’s compliance monitor, whose job was to track whether they were cleaning up their dirty work. Cherasky’s report to USDOJ in 2016 found potential financial crimes and he was worried whether HSBC was adhering to all of its legal obligations.

In late 2016, HSBC started an internal probe targeting Huawei. This included gathering possible incriminating evidence on the relationship between Skycom in Iran and Huawei, China’s best-known telecommunications company, which had emerged as a symbol of Chinese economic success.

Why Huawei, Skycom and at that time? These two ICT entities include three of the U.S.’s most feared adversaries: Huawei, China, and Iran. Talk about a geopolitical hat trick! This, while HSBC admitted at the time to thousands of ongoing regulatory concerns.
Yet, HSBC explicitly went after Huawei at the expense of all its other clients. Was HSBC prompted in this direction? HSBC’s DPA clearly states, HSBC is to cooperate with the Department of Justice in any and all investigations. What appears to have transpired is that HSBC was intent on providing “useful information” to the rich and powerful in order to obtain a get-out-of-jail-free card.

In February 2017, the U.S. Departments of Justice, Treasury, Commerce and Homeland Security were said to have had a tête-à-tête on the Potomac, to discuss progress in confronting Huawei, including its business dealings with HSBC. At the time, Donald Trump had only been in the White House for a month. Peter Navarro, a proud Sinophobe, was then his Director of the National Trade Council. Steve Bannon, another “Howling at the Yellow Moon” fanatic, was White House Chief Strategist and Senior Counselor to the President.

Mike Pompeo, who foams at the mouth whenever China is mentioned, was Director of the Central Intelligence Agency and, a year and a half later, became Trump’s brash “Beware of the Yellow Peril” Secretary of State.

Were they there? Did they send briefs or persons from their offices to participate? Nonetheless, their presence in the new Trump administration surely set the anti-China tone.
At the same time, HSBC started giving a series of presentations to USDOJ about Huawei and Skycom, based on what they found in their files. The HSBC show-and-tells lasted until the end of 2017, more than a year.

Hmm … I wonder if Meng’s now infamous HK PowerPoint presentation was in the mix?
Interestingly, until that time, the U.S. never cited Huawei for non-compliance or breaking American laws. Wilbur Ross, then Secretary of the U.S. Department of Commerce (USDOC), stated in a June 2018 interview, I’ve heard a lot of the rumors about Huawei. As of the moment, I don’t believe that our department has found any violations of Huawei. Clearly, Ross did not know that USDOJ and Treasury were working overtime to “confront Huawei.”

Eight months later, he jumped onto the Trump anti-China bandwagon, singing his praises to the president, now calling the Chinese criminal, during USDOJ’s press conference, announcing its prosecution of Huawei and Meng Wanzhou.

It is clear that Trump & Co. were itching to take on China, Inc., and Huawei was a big target from day one—a symbol of Chinese economic success. In truth, targeting Huawei began even earlier under Obama. Nonetheless, kidnapping Meng Wanzhou in Vancouver Airport on December 1, 2018 was just one more Machiavellian, Great Game tactic to try to achieve their goals. It is what empires do.


Now, full circle back to that infamous Meng-HSBC meeting in 2013

Nothing about Meng’s meeting with Alan Thomas, HSBC’s then deputy head of global banking for the Asia Pacific, makes any sense, and with knowledge of the first half of this exposé’s context, it is therefore highly suspect.
First, since when do high-level executives meet in an openly public place to discuss internal information? Entitled Trust, Compliance and Cooperation, CGTN reported that Meng’s PowerPoint presentation was considered confidential, since it focused exclusively on Huawei’s business relationship with Iranian Skycom, and not the usual boilerplate compliance format for annual reports and media releases.
According to the story, Meng’s translator was there, since she does not speak English well. Are you going to believe that they would meet in a Hong Kong restaurant, with Chinese waiters milling about and likely Chinese guests sitting at nearby tables, for all to listen in?
They could have requested a private dining room but, still, local formality would have, at a minimum, called for tea and snacks to be served, which meant waiters were in and out.
This was not an Amway meeting. The whole restaurant scenario is simply too preposterous to consider.
Alan Thomas was a high-level officer of global banking giant HSBC and Meng was and still is the CFO of the world’s biggest and most successful Information and Communication Technology company.
They work in the billions of euros and dollars. Do you honestly believe that someone of Thomas’s level and caliber did not get an advanced copy of the presentation, to study and prepare questions and comments?
The idea is beyond absurd.
Next, who invited whom? HSBC divulged in their sudden, rush 2016 internal Huawei probe that it was Huawei that requested the meeting with ThomasReally? Someone with apparent knowledge of what happened disagrees.
On condition of anonymity, in front of a camera, they said this meeting was not arranged through normal protocol channels.

At Meng’s and Thomas’s levels, a formal invitation would have been sent via email. This was not done. HSBC has not produced any email to show it was Huawei’s initiative and neither has Huawei, which means if Huawei accepted the invitation outside protocol channels, they were still naïve back in those early days.

So, how was it arranged? Can you picture Meng or Thomas picking up the phone and saying,
Hey, let’s meet at a restaurant and talk about Huawei’s relationship with Iranian Skycom!
Highly doubtful, but it is possible that administrative assistants could have arranged the meeting by phone.

In any case, given that HSBC had just signed its USDOJ DPA, which states
HSBC is to cooperate with the Department of Justice in any and all investigations, and was desperate to avoid prosecution, who do you think requested the meeting, Meng or Thomas? Huawei or HSBC?
Above: HSBC Tower is on Queen’s Road, Hong Kong Island. It opened in 1985 and was designed by British architectural firm Foster + Partners. At 99,000 square meters of floor space (1,065,627 sq ft), it offers a magnificent view of the famous harbor below, in keeping with feng shui requirements to assure success and wealth.

Are we supposed to believe that, on August 22, 2013, its many tens of meeting and conference rooms were all full? Thomas couldn’t find even a small one for the CFO of mighty Huawei? Surely, at his grade, his office would have been big enough for Meng and her translator, maybe even overlooking that fabulous harbor below.

They could have met at Huawei’s HQ too. Today, there are high-speed train service and direct metro lines between Hong Kong and Shenzhen but, back in 2013, Huawei and HSBC could have gotten together on either side of the border via car, bus, train, ferry or footbridge.
Again, the whole restaurant shtick is total balderdash.

Next, why was Thomas sent to the meeting? He was HSBC’s deputy head of banking in the Asia Pacific. HSBC, like every international entity of even modest size, has a full-time compliance and legal department. He was a dealmaker, not a regulatory eager beaver. It was like asking a builder to do the job of a plumber.

Why was HSBC’s head of compliance and regulation not pegged for the meeting?
Ditto Meng. As Huawei’s Chief Financial Officer, her job is to count beans. Along with securing funding, that is what financial bosses do.

Why didn’t HSBC ask Huawei’s legal expert to talk about Iranian Skycom?

Song Liuping is Huawei’s Chief Legal Officer and Compliance Officer, based in Shenzhen, maybe on the same floor as Meng. He oversees a team of more than 1,500 regulatory bloodhounds, and for which the company began these efforts “very early on and investing hugely,” to satisfy its global compliance management, from senior officers on down. This, while Huawei had been, since 2009-2010, in regular contact with USDOC, for trade compliance, including de minimis rules, CISADA (U.S. sanctions) and making sure Huawei fully understood all U.S. laws, including newly enacted ones.

Song visited USDOC several times for consultations and the bilateral briefing took place every 18-24 months. Unfortunately, this stopped in 2016 (three years after the Meng-Thomas meeting), when Huawei learned they were being investigated by the U.S.

Are you trying to tell me HSBC did not know who Song Liuping was, or that Huawei did not have a Legal/Compliance Department? Why didn’t they invite Song or one of his deputy chiefs—regulatory experts all—to get it straight from the horse’s mouth?

Is it because this horse is not Huawei founder Ren Zhengfei’s daughter and Meng is?
Ren was and still is reviled in Cold Warrior Washington, since he is a retired People’s Liberation Army (PLA) deputy regimental leader (IT-Information Technology), close to the Communist Party of China (CPC) and is proud to share Mao Zedong’s thought with the company’s 200,000 workers, for inspiration and business insights, the latter who share in the world’s largest employee-owned corporation. For anti-communist neoliberals, there is not a lot to like here.

Alan Thomas has done very well for himself in the ensuing years. Today, he is an HSBC Trustee on the Board of Directors: Member of Asset & Liability Committee and Member of Audit & Risk Committee. Nice, cushy job. Was Thomas rewarded for a dirty deed well done?


Poor, pitiful HSBC. Boo-hoo-hoo!

Incredibly, in the U.S. case to extradite Meng from Canada, the U.S. government stated that HSBC is one of four “victim institutions” (Standard Chartered, BNP Paribas, Citigroup, along with HSBC), for exposing them to “both economic and reputational” risks (sic).
Talk about Orwellian doublespeak. War Is Peace, Freedom Is Slavery, Ignorance Is Strength, and now we can add to 1984HSBC Is the Victim!

Einar Tangen, a former U.S. prosecutor, mind you, did not mince his words, outraged that Not one single one or any of them were interdicted at an airport and held, based on a warrant. No, they were all given a pass. Not one of them is in jail. We are talking about criminality on a vast scale. And now, you understand what was HSBC’s driving force here; what they wanted to do was to hand something over to the U.S. Government, the Department of Justice, that would curry favor.

Bingo! Which, of course worked like a charm. Throwing clients under the proverbial imperial bus and selling them down Snitch River pays big dividends. On December 11, 2017, at the conclusion of HSBC’s five-year DPA, the bank was completely exonerated of all Mexican drug cartel money laundering charges, “since HSBC had lived up to all its commitments to improve control and compliance measures [sic].”

What a coincidence! What was not mentioned sotto voce, was the most important clause in HSBC’s DPA: HSBC is to cooperate with the Department of Justice in any and all investigations.

Einar Tangen went on to say, This is not a game of Go Fish, right? The idea that we are more civilized today than we were in the past … How is that possible, when in essence he (Trump) has kidnapped her? Alright? He’s holding her for ransom, against her father and the Chinese government, and her own liberty, for his own political gain.

The whole Meng Wanzhou-Huawei saga is a tawdry tale of imperial bullying and global capitalist treachery. HSBC has always been at the center of this story and still is. In fact, it has been in many more, going back to its founding by Queen Victoria in 1865. More from Jeff J. Brown...

HSBC Tower, Hong Kong

HSBC Tower is on Queen’s Road, Hong Kong Island. It opened in 1985 and was designed by British architectural firm Foster + Partners. At 99,000 square meters of floor space (1,065,627 sq ft), it offers a magnificent view of the famous harbor below, in keeping with feng shui requirements to assure success and wealth.

Are we supposed to believe that, on August 22, 2013, its many tens of meeting and conference rooms were all full? Thomas couldn’t find even a small one for the CFO of mighty Huawei? Surely, at his grade, his office would have been big enough for Meng and her translator, maybe even overlooking that fabulous harbor below.

They could have met at Huawei’s HQ too. Today, there are high-speed train service and direct metro lines between Hong Kong and Shenzhen but, back in 2013, Huawei and HSBC could have gotten together on either side of the border via car, bus, train, ferry or footbridge.
Again, the whole restaurant shtick is total balderdash.

Next, why was Thomas sent to the meeting? He was HSBC’s deputy head of banking in the Asia Pacific. HSBC, like every international entity of even modest size, has a full-time compliance and legal department. He was a dealmaker, not a regulatory eager beaver. It was like asking a builder to do the job of a plumber.

Why was HSBC’s head of compliance and regulation not pegged for the meeting?
Ditto Meng. As Huawei’s Chief Financial Officer, her job is to count beans. Along with securing funding, that is what financial bosses do.

Why didn’t HSBC ask Huawei’s legal expert to talk about Iranian Skycom?

Song Liuping is Huawei’s Chief Legal Officer and Compliance Officer, based in Shenzhen, maybe on the same floor as Meng. He oversees a team of more than 1,500 regulatory bloodhounds, and for which the company began these efforts “very early on and investing hugely,” to satisfy its global compliance management, from senior officers on down. This, while Huawei had been, since 2009-2010, in regular contact with USDOC, for trade compliance, including de minimis rules, CISADA (U.S. sanctions) and making sure Huawei fully understood all U.S. laws, including newly enacted ones.

Song visited USDOC several times for consultations and the bilateral briefing took place every 18-24 months. Unfortunately, this stopped in 2016 (three years after the Meng-Thomas meeting), when Huawei learned they were being investigated by the U.S.
Are you trying to tell me HSBC did not know who Song Liuping was, or that Huawei did not have a Legal/Compliance Department? Why didn’t they invite Song or one of his deputy chiefs—regulatory experts all—to get it straight from the horse’s mouth?

Is it because this horse is not Huawei founder Ren Zhengfei’s daughter and Meng is?
Ren was and still is reviled in Cold Warrior Washington, since he is a retired People’s Liberation Army (PLA) deputy regimental leader (IT-Information Technology), close to the Communist Party of China (CPC) and is proud to share Mao Zedong’s thought with the company’s 200,000 workers, for inspiration and business insights, the latter who share in the world’s largest employee-owned corporation.

For anti-communist neoliberals, there is not a lot to like here.

Alan Thomas has done very well for himself in the ensuing years. Today, he is an HSBC Trustee on the Board of Directors: Member of Asset & Liability Committee and Member of Audit & Risk Committee. Nice, cushy job. Was Thomas rewarded for a dirty deed well done?


Poor, pitiful HSBC. Boo-hoo-hoo!

Incredibly, in the U.S. case to extradite Meng from Canada, the U.S. government stated that HSBC is one of four “victim institutions” (Standard Chartered, BNP Paribas, Citigroup, along with HSBC), for exposing them to “both economic and reputational” risks (sic).
Talk about Orwellian doublespeak. War Is Peace, Freedom Is Slavery, Ignorance Is Strength, and now we can add to 1984HSBC Is the Victim!

Einar Tangen, a former U.S. prosecutor, mind you, did not mince his words, outraged that
No, not one (the four “victim institutions”). Not one single one or any of them were interdicted at an airport and held, based on a warrant. No, they were all given a pass. Not one of them is in jail. We are talking about criminality on a vast scale. And now, you understand what was HSBC’s driving force here; what they wanted to do was to hand something over to the U.S. Government, the Department of Justice, that would curry favor.

Bingo! Which, of course worked like a charm. Throwing clients under the proverbial imperial bus and selling them down Snitch River pays big dividends. On December 11, 2017, at the conclusion of HSBC’s five-year DPA, the bank was completely exonerated of all Mexican drug cartel money laundering charges, “since HSBC had lived up to all its commitments to improve control and compliance measures [sic].”

What a coincidence! What was not mentioned sotto voce, was the most important clause in HSBC’s DPA: HSBC is to cooperate with the Department of Justice in any and all investigations.

Einar Tangen went on to say, This is not a game of Go Fish, right? The idea that we are more civilized today than we were in the past … How is that possible, when in essence he (Trump) has kidnapped her? Alright? He’s holding her for ransom, against her father and the Chinese government, and her own liberty, for his own political gain.

The whole Meng Wanzhou-Huawei saga is a tawdry tale of imperial bullying and global capitalist treachery. HSBC has always been at the center of this story and still is. In fact, it has been in many more, going back to its founding by Queen Victoria in 1865.


Appendix – Evil deeds done most foul, ad infinitum

HSBC’s criminal hits just keep on coming. Remember, it was laughably “exonerated” at the end of its DPA in December 2017. Yet, two months before this absurd high-class indulgence, the bank was already back in the headlines. January 19, 2018 – HSBC in $100 million forex fraud settlement
April 27, 2018 – Ex-HSBC executive sentenced to two years for foreign exchange scheme
September 21, 2020 – HSBC moved vast sums of dirty money after paying record laundering fine

Real Censorship

Many Hands on Many Switches

 by 
高大伟 David Cowhig


Back in 2002, a half-year after my return from five years working in the science section of US Embassy Beijing, I wrote to the Congressional-Executive Commission on China to share with them my views on the Internet and the control of information in China. Covering the development of China’s internet was one of my reporting responsibilities in the US Embassy’s Environment, Science and Technology Section. Public release versions minus some of the more pungent points in the conclusion. That is normal since conclusions represent the views of the reporting officer and the Embassy and not the official views of the US government. Some of these reports were shared on the US Embassy website at the time and are still available on the Internet Archive copy of the website.
 

The Free Flow of Information in China: Statement by David Cowhig, Wired China: Many Hands on Many Switches. Presented to Congressional-Executive Commission on China
 

April 15, 2002

I would like to share with you some thoughts about China and the Internet based on my five years covering the Internet for the Environment, Science and Technology Section of the U.S. Embassy in Beijing. These are my own observations and musings about how Internet fits into the Chinese social and political system. My views expressed here do not reflect the views of the U.S. government and are not a policy prescription of any kind.

When asking the question “Whose Hand is on the Switch?” about the Internet in China we need to bear in mind that there are many hands and many switches. Chinese provincial and local governments and indeed various parts of the central government have far greater coordination problems than we experience among the federal, state and local governments in the United States. China might be thought of as a decentralized de facto federal state that lacks federal institutions that facilitate central control and coordination such as the federal court system and regional offices of central government ministries. China is best understood not so much as a Big Brother state but as a loose collection of thousands of provincial and local Party and government little brothers. Many of the provincial little brothers have only nominal allegiance to Big Brother in Beijing. Local officials want to control media not just for Beijing’s purposes but also to prevent Beijing to know about their own shortcomings. Many orders and regulations from the central government are ignored from the outset or forgotten after only a few months.

One corollary of the China’s shortcomings in the rule of law area is that local governments are not conscientious in obeying orders from Beijing. The result has been that the central government implements policies by national campaigns that are intense for a short time but then swiftly fade away. New regulations are issued not as amendments to old ones but as de novo regulations – apparently a tacit admission that the old ones have faded from memory. Government by political campaign as a Chinese government style is gradually fading as more laws are written down, as China’s leaders keep insisting that “officials really should be carrying out their duties according to the law” and as the public learns more about the text of laws and about legal procedures. Improved public knowledge of the law is in some small part one of the benefits of the Internet for China. Although the movement away from government by campaign can be seen in that campaigns are much less disruptive than they were in the past, being aware of the “government by campaign” phenomenon can help us better understand China and the Internet.

What does this mean for the Internet? New tough rules are issued each year but are not systematically enforced. Where enforced, enforcement fades after a few months. Last Spring visiting two dozen “net cafes” in Hunan, I was never asked to produce any ID before using the computer nor was anyone else. Often regulations requiring identification of users were posted prominently on the wall. Although web bar management is supposed to check that clients are not surfing subversive websites, in practice no one pays attention to which sites net cafe clients are visiting. One could say that the rules were observed only in the sense that one could observe them posted prominently on the wall. Most of the clientele were in their twenties who paid about 3 RMB per hour (25 US cents) to use a computer for online chat, games watching movies (pirate copies of movies were on the cafe LAN) and browsing websites. The Changsha, Hunan police estimated in Spring 2001 that there were 1000 web cafes in the city. Web cafes in China have a very fuzzy definition that can include not only web cafes but also computer gaming parlors frequented by truant high school students and underground locales that show pornographic films on their computer local area networks. The Changsha police in their spring 2001 crackdown told local newspapers that they were focusing on the pornographic web bars.

Chinese internet sites are supposed to conform to the same general guidelines as the media. See the October 2000 State Council Internet Information Management Regulations

  • Threatening national security, leaking state secrets, overthrowing the government, and harming national unity;
  • Harming the reputation or interests of the state;
  • Fanning ethnic hatred, discrimination on the basis of nationality, and harming the unity of China’s nationalities;
  • Harming the state religious policy, propagandizing for evil religions or feudal superstition;
  • Spreading false rumors, pornography, gambling, violence, murder, intimidation;
  • Insulting or slandering someone, infringing on the legal rights of others;
  • Other actions that are contrary to law or administrative regulations.

These regulations, like most Chinese regulations, are so broad that they can be interpreted many different ways. Websites are expected not to originate news – which web managers in turn interpret as meaning don’t originate news that is politically sensitive. Many Chinese websites carry news gathered from the 100-plus Chinese newspapers that are online. Thus the news on the web, especially breaking news, is not much better than found in the print press. Some websites, such as Sina.com (http://www.sina.com.cn) allow readers to leave their own comments about a news story. Sometimes these comments are much more interesting than the news stories themselves. If a newspaper somewhere in China does print a relatively daring story, the story will often be picked up by websites throughout the country.

Bad news about corrupt local government in a province often appears in a local paper in another province since the authorities in the other province just don’t care so much about suppressing bad news from other provinces. This information can then leak into the first province over the net. Indeed, local officials suppress information not just to prevent their own people from knowing about a problem but also to prevent higher authorities at the provincial or national level to know that the glowing reports they send upwards are not entirely correct.

One dramatic illustration of the power of the Internet in China came after local officials in Jiangxi Province tried to suppress news of an explosion in an elementary school fireworks factory that killed several dozen schoolchildren. Efforts by local officials to falsely claim that a mad bomber and not illegal fireworks assembly was involved was frustrated by a combination of Chinese journalists and the flow of information around China on the Internet.

Often local officials succeed in keeping information from reaching Beijing. At other times Beijing knows but pretends not to know for to reveal that it knows but can do nothing would amount to a confession of impotence. One example of how news of a local disaster spreads on the Internet despite efforts by the local government to suppress is the report “Revealing the ‘Blood Wound’ of the Spread of HIV/AIDS in Henan Province” spread around China on websites and email about the HIV/AIDS disaster in Henan Province. A translation of the report is available at https://web.archive.org/web/20010809150226fw_/http://www.usembassy-china.org.cn/english/sandt/henan-hiv.htm [2021 note: although “blood wound” was an anonymous report, it was highly recommended to me by two Henan physicians, Dr. Wang Shuping and Dr. Gao Yaojie. End note]

Sometimes after a big event in China or abroad, more information and commentary does leak into China over the Internet from dissident email publications such as VIP Reference (http://www.bignews.org/) as well as the Huaxia Digest (from http://www.cnd.org ), the VOA’s Chinese language email news service. The sending email servers of the first two email publications are blocked and so the originating server often changed. VOA Chinese email news is blocked and unblocked depending mostly upon the ups and downs of U.S. – China relations but also upon whether a politically sensitive domestic news event has occurred.

News from some foreign Chinese newspapers, including, interestingly enough, some critical reports from the Singapore Morning News (Zaobao) regularly figure prominently on Chinese news websites. The value added one sees on the web site includes reports from provincial newspapers in faraway Chinese cities that one ordinarily wouldn’t see (out of town newspapers are not so easy to get hold of unless you subscribe) and the ability to do searches and compare reports over time and from many different sources. Just as with newspapers and magazines, for websites commercial pressures tend to increase the diversity and freedom of information since more attractive media is also of course more viable in a highly competitive environment.

A great variety of Chinese language books and periodicals are available online. The cost of getting online continues to fall, especially in Internet cafes where the use of a local area network brings connections costs down even lower than they are at home. Online bookstores have appeared in China, although severe problems in the areas of credit (few Chinese have credit cards); distribution and resolution of consumer complaints still severely constrain the development of online services in China. Many books, including some banned publications, are also available at minimal cost on CD-ROM as well as online. Although web content regulations apply to online forums as much as anything else on the net, the sheer volume of messages and it seems oftentimes the reluctance of monitors to cut short interesting conversations.

Although the 15 million users of the Chinese Internet are very few compared to China’s 1.3 billion population, the Internet is increasingly arriving in every small town. Together with the rapid expansion of the inter-provincial highway network, the accelerated pace of countryside to city labor migration, the Internet is part of some of the most significant phenomena of the last decade – the shrinking of the distance between urban and rural China and urban China’s penetration of rural life.

The Chinese government’s “Government Online” project (http://www.gov.cn) has put thousands of Chinese government offices online. Many Chinese laws and regulations are now available online for citizens to consult and act on – already an important progress from the days just a few years ago when “confidential regulations” made it very difficult for citizens to dispute officials on points of law.

Chinese language translations of free market philosophers such as Frederich Hayek are available online on many web sites such as Issues and Ideology wenti yu zhuyi 问题与主义 . [2021 note: a website with critical essays forced to close that was founded by Qin Hui. End note] Just as discussions in deep or lengthy Chinese academic books can be surprisingly open (perhaps the censors give up after the first 20 pages?), so too are direct contradictions of China’s official political and economic ideology common on the more academic websites. Some of these articles criticize by analogy. An example is an article reprinted from the January 2002 issue of “Yellow River”, Li Xianzhi’s meditation on the last ten years of Lu Xun’s life considers Lu’s critique of one party dictatorship.

This article [2021 note: the article entitled “Why did Lu Xun Curse People?”  luxun weishenme maren 鲁迅为什么骂人 was apparently removed from the online database that carries many PRC scholarly journals cqvip.com] is [was] on the Issues and Ideology website at http://www.wtyzy.net/linxianzhilxunzhou.htm. The analysis fits the Communist people’s democratic dictatorship perfectly but Lu Xun was talking about Chiang Kai-shek’s Nationalist Party. Of course. For example, These websites regularly come under pressure,some have closed, but many very interesting ones are still out there. Forum monitors are required to delete “subversive” messages on China’s many open discussion fora, including the sometimes very lively “Strong Country Forum” (http://bbs.people.com.cn/ ) run by the tongue of the Communist Party of China — the People’s Daily.

The state of the web in China reflects the uncertain state of China itself. Most Chinese, including most Communist Party members, want a more democratic and more open society. China’s communist leaders fear that the development and modernization brings will help bring will shake their hold on power and lead to social instability. A Chinese provincial vice governor said a few years ago, “We are the guardians of a dead religion but must hold on for the sake of social stability.” China’s Internet itself, much more an emblem of modernity and progress than in the United States, will likely trace a wavering path alternating between greater opening as China moves towards greater modernization and progress and tightening at times when the Chinese leadership fears that new ideas and news that might tend to weaken the Party’s control.

David Cowhig returned to the United States in July 2001 after nine years in Okinawa, Taipei and Beijing. David's Blog

BOOKS

 
The first–and only–book to explain all three elements of China's success: 
  1. Talent at the Top: Only the brightest, most idealistic people are are admitted to politics–a policy unchanged in 2200 years.
  2. Data in the Middle: policies are implemented, tracked, and optimized based on terabytes of data. The PRC is the world's largest consumer of public surveys.
  3. Democracy at the Bottom: ordinary people, all unpaid amateurs, assemble twice a year to check the stats and sign off on new legislation. Policies need a minimum of 66% support to become law. That's why 95% of Chinese say the country is on the right track.
The proof? There are more hungry children, more poor, homeless, drug addicted, and imprisoned people in America than in China.  

Why China Leads the World
investigates why the epidemic accelerated the change of global leadership from America to China and examines China’s bigger, steadier economy, its science leadership, stronger military, more powerful allies, and wider international support.

Crammed with charts, footnotes, and lengthy quotes, Why China Leads the World is a profoundly disturbing book that helps readers understand the tectonic shift and adapt to this new era–and even thrive in it.
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The size of China's displacement of the world balance is such that the world must find a new balance. It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world. Lee Kuan Yew: The Future of US-China Relations. The Atlantic.  
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The Coronavirus accelerated the pace of change of global leadership from America to China. There are now more hungry children, more poor, homeless, drug addicted, and imprisoned people in America than in China. 

Suddenly, China's larger, steadier economy, its leadership in science, its stronger military, more powerful allies, and wider international support have handed it a lead that widens every day.  Crammed with direct quotes from its movers and shakers, charts, and footnotes, Why China Leads the World tells a remarkable tale, explains a tectonic shift, and helps you adapt to this new era, and even thrive in it. 
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If we could just be China for one day we could actually authorize the right decisions. Thomas L. Friedman. The New York Times  

300 pages, 27 charts and graphs. $9.99 on Amazon and in bookstores worldwide.

The ISC Report

The ISC (Needham) Report


The Report of the International Scientific Commission for the Investigation of Facts Concerning Bacteriological Warfare in Korea and China (the ISC report), published at the height of the Korean War, validated claims by North Korea and China that the US had launched bacteriological warfare (biological warfare, BW) attacks against both troops and civilian targets in those two countries over a period of several months in 1952.
   

The most vilified document of the 20th Century.

The report’s release in September, 1952, brought a withering international attack. It was roundly denounced by American and British politicians of the highest rank, ridiculed by four star generals, accused of fraud by celebrated pundits, misquoted by notable scientists, and scorned by a compliant Western press. Charges were made against the quality and truthfulness of its science. Its “unstated” political agenda was denounced. The ethics of interviewing captured US pilots was excoriated and its authors were publicly flayed as communist dupes. The report was red baited in the US halls of Congress and deemed unpatriotic to read, and therefore went unread and deliberately forgotten over the years, which has been the fate of Korean War history in general. In subsequent decades, volumes placed in American university library collections were quietly and permanently removed from circulation.
   
When the rare copy came up for auction, it was discretely purchased and disappeared from public view. This critical 67 year old truth commission document from the Korean War was slipping towards oblivion. For these very reasons, historians and truth seekers should exalt the wondrous rebirth of the ISC Report from near extinction with the publication of this new electronic edition. We welcome the sunshine that re-publication brings to a shadowy and suppressed chapter of American Cold War history. (from the introduction by Thomas Powell) 800 pages.  $9.99.

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