“China promised to keep its stock markets stable and implement measures to boost its economy, according to a state-run media report of a meeting of the country’s financial stability and development committee. The committee also stressed that regulators should “actively introduce market-friendly policies.
Significantly for U.S. investors, the committee said China continues to support companies’ listing of shares overseas and has maintained “good communications” with U.S. regulators, with a cooperation plan in the works. That’s quite the development – just last week the Securities and Exchange Commission named five Chinese companies that could face delisting.
So what’s changed? The pressure on Chinese stocks had ramped up in the past week as regulatory concerns returned and surging Covid cases led Beijing to lock down millions of people. The country’s links to Russia also spooked investors as U.S. officials said the Russian government has asked China for military aid. If it did help Russia, sanctions would surely follow.”
“The so-called “phase one” trade deal inked in December 2019 by former President Donald Trump and Chinese President Xi Jinping might have put an end to the spiraling trade war between the two countries, but the agreement did not result in China buying more American goods, as both leaders promised it would. In fact, during the two years covered by the deal, China imported fewer American goods than before the trade war began—meaning that the deal did not even succeed at patching up the damage caused by Trump’s bellicose trade policies.”
…
“We now know that the promised benefits did not materialize. But the costs certainly keep adding up. Auto manufacturers, for example, shifted supply chains to avoid the cost of tariffs and economic uncertainty created by the trade war—by relocating some American manufacturing jobs to China, which has become a large and growing market for auto sales. BMW, for example, shifted much of the production of its X3 sport-utility vehicle from Spartanburg, South Carolina, to China after reporting that tariffs had cut the company’s American profits by about $338 million in 2018. The higher costs imposed by the trade war caused Tesla to announce that it was “accelerating construction” of a new plant in Shanghai.
Overall, Bown estimates, exports to China would have been $26 billion higher in 2020 and $39 billion higher in 2021 if not for the impact of the trade war and subsequent trade deal. That doesn’t account for other losses sustained during the trade war, like the increased farm subsidies paid for by American taxpayers and the run-of-the-mill cost increases created by tariffs.
Aside from some positive developments with regard to China’s treatment of intellectual property and financial services, probably the only good thing about Trump’s “phase one” trade deal is that it has now expired.
“President Trump’s trade war and phase one agreement did little to change China’s economic policymaking,” Bown concludes. “Beijing seems intent on becoming more state-centered and less market oriented.””
“Daryl Morey, general manager of the Houston Rockets, tweeted, “Fight for freedom, stand with Hong Kong.”
Good for him. China crushed freedom in Hong Kong.
But China didn’t like hearing an NBA executive say that. Chinese TV stopped broadcasting Rockets games. The NBA then apparently told its players and front offices to shut up. Morey deleted his tweet and instead tweeted that he “did not intend to cause any offense.”
The NBA itself also apologized to China, saying that they were “disappointed” by Morey’s “inappropriate” tweet. Lebron James called Morey “misinformed.” James Harden said, “We love China.”
“China is able to strong-arm these companies…into actually acquiescing with its ideology,” complains Chen.
That ideology is often grotesque. The U.S. and other countries accuse China of committing genocide against a mostly Muslim minority group, the Uyghurs.
China imprisons them in “reeducation camps.” Leaked satellite footage shows blindfolded men, with their hands tied behind their backs, in what looks like a concentration camp.
“They are forced into slave labor,” says Chen.
A few Uyghurs who escaped say they were tortured.
But although the NBA runs ads that say, “Speak for the people who may not be able to be heard,” it clearly does not want its players, coaches, or executives to say anything about Uyghur genocide.”
…
“Hollywood doesn’t care either. The movie Mulan was filmed in the same region where Uyghurs are tortured. In the credits, Disney gave “special thanks” to government departments in Xinjiang, where the abuse occurs.
Fast and Furious 9 actor John Cena, promoting his movie to people in Taiwan, said, “Taiwan is the first country that can watch F9.”
What was wrong with that?
“He had the audacity to allude to the fact that Taiwan was a country,” says Chen, “rather than a territory owned by China.”
I don’t know what China said to Cena or Universal Pictures, but soon Cena was on Chinese social media, groveling to China, saying “sorry” over and over. “I have made a mistake….I really love and respect the Chinese people….I made a mistake,” he pleaded.
Chen calls that pathetic. “I think the Chinese government actually takes a lot of pleasure knowing that they can actually strong-arm individuals and companies into capitulation to its own political ideology.””
“The bulk of the illegal synthetic opioids that reach the U.S. are sourced in China by Mexico’s Sinaloa and Jalisco New Generation cartels. They buy from legitimate and illicit Chinese suppliers through “purchases made on the open market, smuggling chemicals hidden in legitimate commercial shipments,” the 2020 DEA National Drug Threat Assessment noted.
Successful bilateral cooperation in combating the fentanyl flow peaked in May 2019 when Xi responded to U.S. pressure by making all forms of fentanyl subject to production controls and anti-trafficking measures. That prompted a drastic reduction in direct shipments of fentanyl and related compounds from China.
But Mexican cartels and their Chinese suppliers quickly pivoted to the export and processing of unregulated chemicals that can be processed into synthetic opioids. The Chinese government moved to block that trade in June by adding six fentanyl precursor chemicals to the list of substances requiring government approval. Chinese suppliers responded by marketing the unregulated raw materials for precursors.
“Drug trafficking organizations adapted to the PRC’s [regulatory controls] of all fentanyl-related substances, and now appear to have increased the purchase of fentanyl precursors from the PRC to manufacture fentanyl in Mexico, indicating a pronounced shift in how fentanyl is trafficked into the United States,” a State Department spokesperson told POLITICO.
The response from Chinese chemical producers and exporters underscores the challenges of regulatory fixes that don’t keep up with the ability of the industry to skirt those laws.
“[Chinese suppliers] are acting like water, they’re just finding the gaps and cracks in the law,” said Bryce Pardo, drug policy researcher at RAND Corp. “They have gone on to [synthetic opioid component chemicals] that are used in all sorts of other medications and other commercial applications that can never be controlled because it would be way too burdensome for industry and genuine consumption purposes to control these other kinds of chemicals.”
On the Hill, China’s role as a drug chemical supplier for illicit synthetic opioids has become a political lightning rod, particularly for lawmakers from states such as Ohio that are suffering soaring increases in synthetic opioid-related overdose deaths.”
“China has long been the number one feeder of international students to the U.S.; for the 2020–21 school year, more than 317,000 Chinese students were enrolled at American higher ed institutions. Hong Kong sends about 6,800 students overseas to
American universities each year. Thus, McLaughlin says, the question arose at the start of the pandemic when foreign nationals were temporarily expelled from the U.S.: “Is it safe for them to learn?”
American professors started “try[ing] to find the safest way to teach without censoring themselves,” McLaughlin says. They have taken certain discussion off of certain platforms; started using blind grading and allowing students to not submit papers under their own names; changed some conversations to be one-on-one instead of group discussions where another student could possibly record or disseminate the comments of a student living under Beijing’s thumb. Some professors, like Rory Truex at Princeton, issued warnings in their syllabuses, saying in essence that if a student was currently residing in China, they should wait to take a given class until they’re back on American soil.
Academics elsewhere have stooped to disturbing self-censorship to stave off Chinese Communist Party (CCP) censors. A teaching assistant at the University of Toronto declared he’d been told not to talk about certain issues online because it could put some students at risk; a guest lecturer-journalist from the Hong Kong Free Press declined an already-agreed-to speaking opportunity at the University of Leeds because he had been instructed by hosts to avoid focusing on the Hong Kong protests out of concern for the safety of Chinese students attending the lecture remotely.”
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“Professors in Hong Kong, and international students from Hong Kong who study in the U.S. (not to mention their mainland Chinese counterparts), already had to worry about what might happen if a student takes a phone out and films comments made during classes. With the widespread adoption of remote learning, that’s gotten exponentially worse, says McLaughlin. “Whether it’s the intent or not, the effect of forcing everything online makes it a lot easier to hunt down, censor, and punish speech that’s critical of the government.””
“Even on the day two years ago that the trade deal was inked, there was skepticism that China would live up to its pledge to spend $200 billion more on U.S. goods and services.
But a new study finds China didn’t even spend an additional dime on U.S. products.”
…
“China agreed to buy at least $227.9 billion of U.S. exports in 2020 and $274.5 billion in 2021, for a total of $502.4 billion over the pact’s two years, he noted. In reality: U.S. exports of covered goods and services to China over the two years totaled $288.8 billion.”
“Far from embarking on a new correct path, Deng was trying to turn back the clock. He wasn’t out to create a new economic system; he sought to restore the planned economy that had existed before the Cultural Revolution. The program he tried to implement after 1978 was based on the “Four Modernisations” Zhou Enlai had introduced in 1963 to revive the countryside after Mao’s disastrous Great Leap Forward. During the Cultural Revolution of 1966 to 1976, the party’s radical elements encouraged renewed collectivization campaigns. Deng sought to reverse those extreme policies, not the planned economy itself.
Deng embraced reforms conservatively, after events on the ground had already made state restrictions obsolete. Upon taking control of the party, he endorsed private ownership of small plots but forbade dividing up collective land to individual households. It was only in 1982, four years after he took power, that households were officially allowed to contract production rights on collective land. He raised the price of grain that farmers compulsorily sold to the state by 20 percent—a substantial concession, but hardly evincing the kind of vision that the title “Great Architect” implies. Indeed, the year after the “great turning point” in April 1979, Deng and the party leadership ordered those who had left the communes to rejoin them.
The planned economy was undermined and subverted from below well before the communes were officially dissolved in 1983. Decollectivization occurred not because of Deng’s vision but because ordinary people, under cover of the Cultural Revolution’s chaos, left the communes. Several years before Mao died in 1976, it had become common for people to strike out on their own in search of economic opportunities. The party’s leadership lamented that the countryside had “gone capitalist,” but it couldn’t reverse that trend. By 1980, half of all production teams in Guizhou province and more than half in Gansu were under household contracts. This system gave farmers secure tenures of collective farmland, which significantly increased both their productivity and health. One cadre in Anhui province likened household contracting, as reported by the historian Frank Dikötter in a 2016 article in The China Quarterly, to “an irresistible wave, spontaneously topping the limits we had placed…it could not be suppressed or turned around.””
…
“Deng was not changing history; he was swept away by it. As the historian Kate Zhou wrote in her 1996 book How the Farmers Changed China: “When the government lifted restrictions, it did so only in recognition of the fact that the sea of unorganized farmers had already made them irrelevant.” Ordinary people, not Deng Xiaoping, resisted and reformed the planned economy.
To understand how the party’s control of economic activity slipped, one must look to the history of the Cultural Revolution. Mao’s “Great Leap Forward” of 1958–1962 had devolved into a Great Famine, killing tens of millions of people. While they starved, the party ramped up grain exports to fellow socialist countries in order to increase its international prestige.
This forced farmers to circumvent the state’s orders—one had to lie, cheat, steal, smuggle, or trade on the black markets to avoid starvation. Apart from the party’s loyal hacks, only the lucky or enterprising survived. In the early 1960s, even Mao had to acknowledge that the Great Leap Forward had failed. The Central Committee introduced a few paltry safeguards against extreme collectivization. Villagers were thus allowed to cultivate private plots, but only in their free time.
But Mao soon saw this as backsliding, and he launched the Cultural Revolution to secure his hold on the party. Revolutionary committees took control of China. The People’s Liberation Army was ordered onto the streets, and the Soviet-Sino border conflict was used as a pretext to reassert control over the countryside. Private holdings were once more collectivized on a massive scale. But the party tore itself apart in the process; its organization was vitiated by factional infighting.
The Cultural Revolution broke the party’s apparatus of control—it lost much of its capacity to coerce people’s everyday behavior. During the turmoil, people took back some of their lost freedoms. They expanded private lots, left communes, sold produce for private gain, moved to the cities, and even opened underground factories. It is here that we find the true origins of China’s modernization.”
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“Villagers established private firms and factories throughout the country. For example, the rate of industrialization in the countryside of Jiangsu province in the early 1970s far exceeded the rate of industrialization there under Deng. And it was these rural industries that fuelled China’s GDP growth. Prosperity came not from the cities or from the state-owned enterprises, but from the countryside. The people who worked in these factories had often left the communes on their own initiative, not on party orders. When Deng became paramount leader in 1978, the silent revolution was already well underway.
Not only were factories established, but markets linked rich and poor provinces. And in the coastal province of Guangdong, traders revived overseas trading links, especially once restrictions were eased in 1972. Deng is said to have begun the process of opening up China, but as early as 1974, the amount of money reaching people in Guangdong from overseas was twice what it had been in 1965. Black markets existed everywhere, and although the state maintained rigid monopolies on several key products, almost everything was sold openly on the markets.”
…
“Deng recognized that certain changes were inevitable, but his reforms were little more than legalizations of already occurring practices that he was shrewd enough to claim credit for.”
“The world has known for years now that Uyghurs, members of a Turkic ethnic group who number about 13.5 million and mostly live in China, are experiencing persecution by the Chinese government. A number of international observers and human rights advocates argue the Chinese government is attempting genocide, but Uyghurs looking for an escape from China’s brutality have had a difficult time securing relief through America’s refugee and asylum pathways, and their immigration struggles are shared by far too many vulnerable people seeking an escape to the United States.
Under U.S. immigration law, asylum seekers are people who are already present on American soil or at a port of entry and apply for the right to remain in the country. Refugees, on the other hand, apply for resettlement in the U.S. from abroad. Approval to stay in the U.S. under either category requires that applicants prove they have been “persecuted or fear persecution due to race, religion, nationality, political opinion, or membership in a particular social group.” The two pathways are intended to help the world’s most vulnerable people escape danger.
In the past two fiscal years, however, the U.S. has admitted zero Uyghur refugees. Many Uyghurs who have been lucky enough to reach the U.S. through other pathways, like student and travel visas, also face an uncertain future—as Caroline Simon reported for Roll Call yesterday, there are “roughly 800 Uyghurs caught in the backlog of hundreds of thousands seeking asylum in the U.S.” Until they receive asylum, they can’t apply to sponsor stranded family members.
It’s undeniable that Uyghurs broadly fall into the categories outlined for refugees and asylum seekers. In the name of cultural erasure, they’ve been subject to mass sterilization, kept from speaking the Uyghur language, and forced to pledge loyalty to the Chinese Communist Party. Adrian Zenz, senior fellow in China studies at the Victims of Communism Memorial Foundation, told NPR that China’s treatment of Uyghurs is “probably the largest incarceration of an ethnoreligious minority since the Holocaust.””
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“The plight of the Uyghurs waiting on immigration answers points to broader issues in America’s refugee and asylum infrastructure. For one, the U.S. has been taking in astonishingly low numbers of refugees lately, hitting a record low of 11,411 in fiscal year 2021. Over 667,000 asylum seekers are waiting for their cases to be resolved, and they face an average wait time of around 1,600 days, or 54 months. There’s also the issue of the “last-in, first-out” policy, under which asylum applicants who have arrived in the U.S. more recently are processed first. This means many people who have been present in the U.S. for years cannot petition for visas for family members, which propagates what the Center for Migration Studies of New York calls “the ‘other family separation’ crisis.””