Neutering & Defanging Chinese Threat (15-11-2017)

[Kati]

Law Enforcement, Intelligence Community Regard Chinese Espionage As Significant Threat
https://www.npr.org/2019/05/01/71915797 ... ant-threat

NPR's Ailsa Chang talks with Dustin Volz of The Wall Street Journal about China's espionage efforts and recruitment of U.S. intelligence officers.

AILSA CHANG, HOST:

When a Chinese woman turned up at Mar-a-Lago earlier this year with four cellphones, a hard drive and some other electronic equipment, concerns about Chinese espionage flashed across the headlines. Whatever she was up to, it was only the latest episode in a series that have led the U.S. intelligence community to intensify its focus on Chinese spying.

The Wall Street Journal reports that law enforcement and intelligence officials now regard Chinese espionage as the single most significant long-term strategic threat facing the U.S. And they don't just mean the economic espionage that the Trump administration has been denouncing during the trade talks.

Joining us now to talk about what kinds of Chinese spies could be lurking in the U.S. is Wall Street Journal reporter Dustin Volz. Welcome.

DUSTIN VOLZ: Thank you, Ailsa.

CHANG: So as we mentioned, there's been a lot of conversation here about economic espionage by China, like trade secret theft, other intellectual property violations. But you say that intelligence officials are telling you China has gotten better and bolder at traditional spy games. Explain what they mean by that.

VOLZ: In addition to the economic espionage, there are a host of cases that have been made public by the Justice Department in recent months that show that China is recruiting former U.S. intelligence officials, former State Department officials to steal U.S. government secrets. And this is something that officials say has grown more alarming in recent years as China seemingly is getting a lot better at it.

CHANG: And what kind of intelligence do the Chinese seem most interested in? What do your intelligence sources say?

VOLZ: Well, among other things, Chinese intelligence agencies are interested in what Washington wants to do with China.

CHANG: Sure.

VOLZ: So one of the former officials that they recruited was a State Department official who was passing them information about upcoming bilateral talks between the two countries.

But they're also very interested in what we're doing as well undercover. For example, the case of Jerry Lee is fascinating for a variety of reasons, one of them being there are deep concerns that he is actually part of how China was able to uncover U.S. intelligence sources in China. This came out a couple of years ago that a number of our spies overseas there had been killed and that they cultivated this former intelligence official of ours...

CHANG: Jerry Lee.

VOLZ: ...Jerry Lee - to find out who was spying there and compromise a lot of ongoing operations.

CHANG: And how are these individuals cultivated to be spies for China? What are sort of the methods used?

VOLZ: It's simple psychology, and it's simple incentives. So a lot of what we see is people in financial dire straits - you know, offering cash gifts, offering them rewards that'll help them and their family, you know. And so one of the things that China's been very good at is identifying people that they think are going to be receptive to those sort of inducements.

CHANG: And these individuals are not, like, all Chinese people or people who are sympathetic to China. They're people who are interested in personal payments for whatever reason.

VOLZ: Exactly. So Jerry Lee was born in Hong Kong and became a naturalized citizen here. But many of the other cases that have emerged publicly in recent months have been in no way affiliated to China.

CHANG: Right. And one of the ways they may be able to target certain individuals is because of all the hacks that have been happening. In 2015, more than 20 million files from the U.S. Office of Personnel Management were stolen. The U.S. suspected China was behind that theft, but China denies any involvement.

How might that hack be linked to some of the Chinese espionage intelligence officials are seeing?

VOLZ: Right. So it's easy to imagine Chinese intelligence agencies sifting through these enormous personnel files on government officials that include their families, their residences, their psychological histories, you know, any potential previous drug abuse - really deep, granular details about current and former American officials.

CHANG: Yeah.

VOLZ: And they're able to look at that, potentially correlate it with other databases that they've hacked from various banks or other businesses and find out where certain people are, what they're doing, what their financial status is, what their mental health is and then reach out to them on social media or through other more covert means.

CHANG: I mean, for so long, there's been so much focus in the intel community - and also in the public's imagination - on Russian spying. How is the Chinese threat different from the Russian threat?

VOLZ: This is one of the most interesting things is that you talk to officials, and they say Russia is absolutely a very serious threat but that Russia is really not a long-term strategic threat in the way that China is. And that's because China is an enormous country with a ton of economic force. But also they have enormous resources that they can dedicate to their espionage games, both the economic espionage and the traditional spying that we're talking about today.

China has thousands and thousands of people that they can dedicate to this, and they're willing to use it. And so far, they've shown that they're not going to let up.

CHANG: Dustin Volz covers cybersecurity and intelligence for The Wall Street Journal.

Thank you very much for coming into the studio today.

VOLZ: Thank you so much.

(SOUNDBITE OF EBB AND FLOD'S "OCTOBER SKIES")

[Kati]

‘Hidden backdoors’ were found in Huawei equipment, reports Bloomberg

The so-called ‘backdoors’ were discovered by Vodafone in network infrastructure and consumer routers between 2009 and 2011

https://www.theverge.com/2019/4/30/1852 ... area-local

[SSridhar]

china switching their stance seemed pretty low probability so this is quite a surprise

The US, UK & France had moved another resolution in the 1267 Committee and had also given an ultimatum to China to lift its 'technical hold' or face 'other actions'. As a trailer to 'other actions', the US had informally circulated a proposal in the UNSC (not in the 1267 Committee) to declare Masood Azhar as a global terrorist. It also openly declared that, if needed, the matter would be taken to the UNGA. All these would have meant that China would have to explain its position publicly or veto (in the UNSC) or vote against it (in the UNGA) or abstain. China saw the writing on the wall.

So long as the US wasn't threatening like this, the Chinese stonewalled. It then analyzed the situation and found that 1267 Committee would be the best place to declare Masood Azhar because the mandate of this committee is restricted to Al Qaeda, Daesh and their affiliates. Therefore, it could avoid technically all references to Masood Azhar's terror directed against India. It thus felt that it could save Pakistan's face aginst India as the other two options, UNSC and UNGA, would have meant a disastrous discussion for both China and Pakistan as India would have gone hammer and tongs against these both.

IMO, China tried to save Pakistan until the very end, expending considerable diplomatic energy, willing to even a very bad name as a supporter of terrorism and when it came to the situation where it could no longer defend the indefensible, it ensured that Pakistan's H&D was saved at least against India.

If anybody says Wuhan spirit etc. after this decade long perfidious Chinese actions (among so many other things), including China's role in the end game of the Masood Azhar drama, that would be unconscionable. The repeated 'holds', dismissal as 'lack of evidence', disregard for Indian concerns even after the intervention at the highest level, frequent demands for India to sort out the matter directly with Pakistan, making India submit evidence after evidence to China privately as though it and not the UNSC 1267 committee mattered, all indicate in unmistakable terms China's utter inimicality towards us and its tendency to behave as the Middle Kingdom.

if they have decided to play nice this may be a signal of more to come specially on the tibet and dalai lama issue

No, not at all. Tibet is a 'core' China issue and a totally very different matter.

Anyway, action now shifts to FATF in June and the Chinese stance. I think the US relinquishes its Presidency after June and China takes over.

[Peregrine]

China will build string of military bases around world, says Pentagon

Locations could include Middle East, Pakistan, and western Pacific to protect Belt and Road Initiative, report says

The US defense department expects China to add military bases around the world to protect its investments in it ambitious One Belt One Road global infrastructure program, according to an official report released on Thursday.

Beijing currently has just one overseas military base, in Djibouti, but is believed planning others, including possibly Pakistan, as it seeks to project itself as a global superpower.

“China’s advancement of projects such as the ‘One Belt, One Road’ Initiative (OBOR) will probably drive military overseas basing through a perceived need to provide security for OBOR projects,” the Pentagon said in its annual report to Congress on Chinese military and security developments.

“China will seek to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan, and in which there is a precedent for hosting foreign militaries,” the report said.

That effort could be constrained by other countries’ wariness of hosting a full-time presence of the People’s Liberation Army, the report noted.

But target locations for military basing could include the Middle East, south-east Asia, and the western Pacific.

The report came as the Pentagon also warned that deepening Chinese activities in the Arctic region could also pave the way for a strengthened military presence, including the deployment of submarines to act as deterrents against nuclear attack.

The assessment is included in the US military’s annual report to Congress on China’s armed forces.

The Pentagon report noted that Denmark has expressed concern about China’s interest in Greenland, which has included proposals to establish a research station, establish a satellite ground station, renovate airports and expand mining.

“Civilian research could support a strengthened Chinese military presence in the Arctic ocean, which could include deploying submarines to the region as a deterrent against nuclear attacks,” the report said.

China has already established well-armed outposts on contested atolls it build up in the South China Sea.

Last year, there were reportedly discussions on a base in the Wakhan corridor of north-west Afghanistan.

In addition, the Washington Post recently identified an outpost hosting many Chinese troops in eastern Tajikistan, near the strategic junction of the Wakhan corridor, China, and Pakistan.

China’s president, Xi Jinping, has sought to project the country’s power beyond its immediate “back yard” in east and south-east Asia.

This includes strengthening the country’s presence in international institutions, acquiring top-flight technology and establishing a strong economic presence worldwide.

It also includes projecting the country’s military force on land, sea and in space, the report notes.

“China’s leaders are leveraging China’s growing economic, diplomatic, and military clout to establish regional preeminence and expand the country’s international influence,” the report said.

Beijing in particular increasingly see the United States as becoming more confrontational in an effort to contain China’s expanding power, it said.

Cheers

[A_Gupta]

https://www.newyorker.com/news/daily-co ... -centenary
Xi Jinping Tries to Crash the May Fourth Movement’s Centenary

[Singha]

ibnlive

Washington: US President Donald Trump announced Sunday that the United States would raise tariffs on USD 200 billion of Chinese goods to 25 per cent this week, because trade talks are moving "too slowly".

Trump's action came as a major Chinese delegation is expected to arrive Wednesday in Washington for the latest round of talks to end the trade war between the world's two biggest economies — a round billed as the last one and possibly leading to a deal to end the conflict.

"For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted. "The 10% will go up to 25% on Friday," he said.

[Bart S]

Very good insight on Huawei and it's ownership structure:
https://freebeacon.com/national-securit ... ns-huawei/
Worth a read.

[A_Gupta]

China lobbies ASEAN on yuan use, cracking dollar dominance
Beijing proposes Asian currencies, including yen, be added to emergency pool

https://asia.nikkei.com/Business/Market ... -dominance

SINGAPORE -- ASEAN and its East Asian partners are considering adding the yen and the yuan to their $240 billion currency swap safety net, a move that would reduce the framework's overreliance on the dollar while increasing China's economic clout.

The 10 members of the Association of Southeast Asian Nations plus China, Japan and South Korea will discuss the proposed change to the Chiang Mai Initiative at a May 2 meeting of finance ministers and central bankers in Fiji.

China, which is chairing the meeting together with Thailand, has added language to the draft joint statement mentioning use of local-currency contributions to the pool as "one option" to enhance the arrangement.

Allowing participants to access Asian currencies in an emergency could encourage their use in other contexts, including foreign exchange reserves, the thinking goes. The idea also anticipates a long-term rise in demand for these currencies in regional investment and trade.

China in particular sees it as another step on the path to internationalizing the yuan and expanding its economic influence in the region. But the proposal is likely to be complicated by U.S. alarm at the prospect of Beijing expanding its currency's role at the dollar's expense.

[SSridhar]

The Reverse Opium War?
https://www.asiatimes.com/2019/02/article/yunnan-ready-to-cash-in-on-cannabis-boom/

China has licensed a massive cannabis farm covering almost 100 square kilometers in southwestern Yunnan province as it prepares to cash in on growing demand from countries decriminalizing the drug. It is believed China already supplies 50% of global cannabis output.

Conba Group, a publicly-listed pharmaceutical company, will cultivate three separate plantations, according to the National Business Daily, and last month reached agreement with CannaAcubed Pte for the planting, extraction, processing and packaging of industrial cannabis.

The licensing agreement allows cultivation for both industrial and medical uses, and Conba said in a bourse filing that it had already signed seed supply contracts with domestic and overseas suppliers. China permits cultivation of cannabis only for traditional medicines and textiles: most is of industrial hemp quality, high in fiber and with only a low amount of the psychoactive compound tetrahydrocannabinol (THC).

Nonetheless, China is in a better position than any other country to meet the expected upsurge in demand as the consumption of cannabis for medicinal and recreational use becomes more widespread. The only nation known to have scientifically researched and tested cannabis in field conditions, China held 309 of the 606 patents filed with the World Intellectual Property Organization as of 2017, the latest available figures.

It has ideal growing conditions in subtropical Yunnan and has been cultivating the drug since at least 10,000 BC for both industrial products and consumption. No other country boasts so many scientists and processing factories with experience in cannabis applications.

But there is a catch. Handling of the drug in any form in China without approval is strictly prohibited, and Beijing may not want to risk switching to psychoactive strains if it could encourage local consumption. Chinese criminal law states that “individuals who smuggle, traffic, transport or manufacture narcotic drugs are sentenced to either 15 years of prison, life imprisonment or death, and suffer confiscation of property”.

Another problem is that the crop traditionally has been associated with the minority Muslim Uyghur population, who are being subjugated by the central government and have responded with insurgency attacks. Although crops are now being planted elsewhere, the Uyghur are recognized as having the longest history of cultivation.

The licensing of a farm covering 100 square kilometers is a strong indicator that China intends to put its economic interests first in what is likely to become a multi billion-dollar industry within the next decade.

[A_Gupta]

https://www.forbes.com/sites/panosmourd ... e1f6856004
Chinese Investments: Malaysia Dares Something Sri Lanka, Pakistan, And Philippines Didn't

In dealing with China, Malaysia has dared to do something Sri Lanka, Pakistan, and the Philippines didn’t: bring Beijing back to the negotiating table to cut the cost of the investment projects assigned to Chinese contractors.

This week, China agreed to cut the cost of East Coast Rail Link project by one-third.

The new deal is a big win for Malaysian Prime Minister Mahathir Mohamad. He made good on his election campaign promise to re-negotiate China’s investments in the country, which served the interests of Beijing more than they served the interests of Kuala Lumpur.

[A_Gupta]

https://www.mintpressnews.com/sri-lanka ... es/258170/
Opinion and Analysis: Sri Lanka: How Saudi-Backed Terror Targeted China’s Allies
When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit?
by Tony Cartalucci

Examining the West’s decades of using terrorism – particularly terrorism fuelled by Saudi Wahhabism – and the inception of ISIS itself – leaves Washington and its partners as the prime suspects behind Sri Lanka’s tragic terrorist attack – with its motivation strikingly similar to what prompted the US-Saudi aided rise and use of the Muslim Brotherhood and Al Qaeda throughout the Cold War.

It is admitted that the US and its partners sought the creation of ISIS – its sudden appearance everywhere China is attempting to do business fits the now documented and admitted pattern of Washington’s use of extremism to fight and coerce wherever its standing armies cannot afford to intervene and a degree of “plausible deniability” is desired.

When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit? The US played a central role in deliberately creating ISIS. If ISIS is indeed behind the attack on Sri Lanka, then it is by extension an act of terror carried out by Washington.

Destabilizing Sri Lanka – a critical South Asian partner of Beijing and its OBOR initiative – with terrorism and ethnoreligious conflict, serves only the interests of China’s overt global opponent – Washington – as well as elements within India’s ruling elite and intelligence agencies.

[chetak]

https://www.mintpressnews.com/sri-lanka ... es/258170/
Opinion and Analysis: Sri Lanka: How Saudi-Backed Terror Targeted China’s Allies
When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit?
by Tony Cartalucci

Examining the West’s decades of using terrorism – particularly terrorism fuelled by Saudi Wahhabism – and the inception of ISIS itself – leaves Washington and its partners as the prime suspects behind Sri Lanka’s tragic terrorist attack – with its motivation strikingly similar to what prompted the US-Saudi aided rise and use of the Muslim Brotherhood and Al Qaeda throughout the Cold War.

It is admitted that the US and its partners sought the creation of ISIS – its sudden appearance everywhere China is attempting to do business fits the now documented and admitted pattern of Washington’s use of extremism to fight and coerce wherever its standing armies cannot afford to intervene and a degree of “plausible deniability” is desired.

When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit? The US played a central role in deliberately creating ISIS. If ISIS is indeed behind the attack on Sri Lanka, then it is by extension an act of terror carried out by Washington.

Destabilizing Sri Lanka – a critical South Asian partner of Beijing and its OBOR initiative – with terrorism and ethnoreligious conflict, serves only the interests of China’s overt global opponent – Washington – as well as elements within India’s ruling elite and intelligence agencies.

how cleverly done.

to drag India into the melee when it was India's specific and detailed warning that was deliberately sidelined by the SL authorities

[A_Gupta]

Yes, keep that author and outlet in mind for lifafa journalism.

[VikramA]

the author is a self declared 'strategic' analyst based out of Bangkok. so youcan judge the credibility yourself.

[NRao]

Why is the white hot Chinese tech sector cooling down?

China's once scorching tech sector is cooling off.

"Winter is coming," laughs Lin Liu, a 29-year-old Shanghai tech worker.

Electric vehicles, industrial robots, and microchip production all slowed recently.

Big firms like Alibaba, Tencent, and search engine Baidu have slashed jobs.

Overall, one in five Chinese tech companies plans to cut recruitment, says jobs site Liepin.com.

"And I think this slowing down will continue," says Ms Liu, who's run a tech start-up and the Slush start-up conferences in Shanghai, Shenzhen, and Nanjing.

The US-China trade war is partly why - both nations imposed tariffs on each other's goods in 2018.

A quick guide to the US-China trade war
But China's economy, which has enjoyed double-digit growth in six of the last 15 years, will slow to 6.3% growth in 2019, predicts the International Monetary Fund.

This is still double the world's average, but China's slowest growth since 1990.

And China's start-up scene, boasting a third of the world's "unicorns" - start-ups worth more than $1bn (£769m) - is plotting a "strategic restructuring" as the economy and tech sector cool, Ms Liu says.

"What drove things completely insane was too much money," argues William Bao Bean, managing director of Chinaccelerator, a Shanghai-based start-up accelerator.

There was a "real push for economic growth from the government" and big funding from state coffers, he says.

This has levelled off.

"Before, you could get $3m with two people knocking and a smile. Now you can get $3m with two people knocking and a smile and six weeks of meetings," he says.

Dockless bike sharing rivals Mobike and Ofo were pedalling off with investors' money last year in a bitter duel for market share.

That sector's now hit the brakes.

"You definitely have a lot more people walking around those bikes than riding those bikes," says Gregory Prudhommeaux, who has worked with Shanghai start-ups since moving from France in 2005.

Ofo owes one billion yuan ($148m; £114m) in unpaid debts.

In December, a Beijing court placed it and chief executive Dai Wei on a blacklist after Ofo defaulted on suppliers' payments.

And Mobike lost 4.6 billion yuan in 2018 and won't make a profit until 2021, says China Tonghai Securities, a Hong Kong broker.

It quietly doubled its Beijing fees last month, with one yuan now buying you a 15-minute ride instead of half an hour.

China's 6,200 online peer-to-peer lending platforms, like Weida and Yirendai, were a thriving bubble two years ago.

But 80% have closed or hit major difficulties since, says the Yingcan Group, a Shanghai consultancy.

Amid a government crackdown, this number might dip below 300 by the year's end.

Belt tightening has been one result, as companies shed "the coffee machine in the office and the subsidised taxi ride home after 9pm", says Michael Norris, a Shanghai-based Australian who researches China's tech scene.

"The bar and restaurant scene is slowing down, people are eating out less on expenses," agrees Mr Prudhommeaux.

Tech companies are also pushing employees harder, resulting in rising complaints about the common "996" working week - 9am to 9 pm, six days a week.

For companies, "the feeling at the top end of town is that the easy growth is gone," says Mr Norris.

One reason is that China's market is more saturated.

While only 56% of the population is on the internet, Tencent, Shenzhen's internet giant that last year became Asia's first $500bn-plus company, says this percentage includes most of the people who buy online.

[SSridhar]

US, Japan, India and Philippines challenge Beijing with naval drills in the South China Sea - Reuters

In fresh show of naval force in the contested South China Sea, a U.S. guided missile destroyer conducted drills with a Japanese aircraft carrier, two Indian naval ships and a Philippine patrol vessel in the waterway claimed by China, the U.S. Navy said on Thursday.

While similar exercises have been held in the South China Sea in the past, the combined display by four countries represents a fresh challenge to Beijing as U.S. President Donald Trump threatens to hike tariffs on $200 billion worth of Chinese goods.

"Professional engagements with our allies, partners and friends in the region are opportunities to build upon our existing, strong relationships," Commander Andrew J. Klug, the captain of the U.S. destroyer, the USS William P. Lawrence, said in a statement.

Japan sent one of its two big aircraft carriers, the Izumo, while India deployed a destroyer, the INS Kolkata, and a tanker, the INS Shakti. {Excellent news. So, after the Chinese fleet review, the two participants went off to this exercise!}

The week of joint drills, which ended Wednesday, comes after two other U.S. warships sailed near islands in the region claimed by China on Monday, prompting a protest from Beijing, which said the action infringed its sovereignty.

The U.S. Navy says it conducts such freedom of navigation operations in international waters around the world, even in seas claimed by its allies, without political considerations.

China claims almost all of the strategic South China Sea with Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam pushing competing claims to parts of the maritime region. The United States, Japan and India do not have any territorial claims there.

In a separate challenge to Beijing in Asian waters, the USS William P. Lawrence and another U.S. destroyer sailed through the Taiwan Strait in April separating Taiwan, which Beijing views as a rogue province, from the Chinese mainland.

[Peregrine]

China backtracked on almost all aspects of US trade deal: Report – Reuters

WASHINGTON/BEIJING: The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world's two largest economies, according to three US government sources and three private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core US demands, the sources told Reuters.

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

US President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 per cent on Friday – timed to land in the middle of a scheduled visit by China's vice Premier Liu He to Washington to continue trade talks.

The United States said on Wednesday the higher tariffs would go into effect on Friday, according to a notice posted on the Federal Register.

Trump said on Wednesday that China is mistaken if it hopes to negotiate trade later with a Democratic presidential administration.

"The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to 'negotiate' with Joe Biden or one of the very weak Democrats," Trump tweeted. Trump also said he would be happy to keep tariffs on Chinese imports in place.

The stripping of binding legal language from the draft struck directly at the highest priority of US Trade Representative Robert Lighthizer - who views changes to Chinese laws as essential to verifying compliance after years of what US officials have called empty reform promises.

Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical
trade deal.

"This undermines the core architecture of the deal," said a Washington-based source with knowledge of the talks.

'Process of negotiation'

Spokespeople for the White House, the US Trade Representative and the US Treasury Department did not immediately respond to requests for comment.

Chinese foreign ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a "process of negotiation" and that China was not "avoiding problems".

Geng referred specific questions on the trade talks to the commerce ministry, which did not respond immediately to faxed questions from Reuters.

Lighthizer and US Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Trump's tariff order but did not provide details on the depth and breadth of the revisions.

Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfill its
pledges through administrative and regulatory changes, two of the sources said. Both
Mnuchin and Lighthizer considered that unacceptable, given China's history of failing to
fulfill reform pledges.

One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because "China got greedy."

"China reneged on a dozen things, if not more ... The talks were so bad that the real surprise is that it took Trump until Sunday to blow up," the source said.

"After 20 years of having their way with the US, China still appears to be miscalculating with this administration."

Further talks this week

The rapid deterioration of negotiations rattled global stock markets, bonds and commodities this week. Until Sunday, markets had priced in the expectation that officials from the two countries were close to striking a deal.

Investors and analysts questioned whether Trump's tweet was a negotiating ploy to wring more concessions from China. The sources told Reuters the extent of the setbacks in the revised text were serious and that Trump's response was not merely a negotiating strategy.

On Wednesday morning, US stock market indexes were mostly weaker again, pointing to a third straight day of losses on Wall Street. The S&P 500 has fallen more than 2 per cent so far this week. Yields on benchmark US Treasury securities fell to the lowest in more
than a month.

Chinese negotiators said they couldn't touch the laws, said one of the government sources, calling the changes "major."

Changing any law in China requires a unique set of processes that can't be navigated quickly, said a Chinese official familiar with the talks. The official disputed the assertion that China was backtracking on its promises, adding that US demands were becoming more "harsh" and the path to a deal more "narrow" as the negotiations drag on.

Liu is set to arrive in Washington on Thursday for two days of talks that just last week were widely seen as pivotal – a possible last round before a historic trade deal. Now, US officials have little hope that Liu will come bearing any offer that can get talks back on track, said two of the sources.

To avert escalation, some of the sources said, Liu would have to scrap China's proposed text changes and agree to make new laws. China would also have to move further towards the US position on other sticking points, such as demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered US crops.

The US administration said the latest tariff escalation would take effect at 12:01 am Friday (9:31 am IST), hiking levees on Chinese products such as internet modems and routers, printed circuit boards, vacuum cleaners and furniture.

The Chinese reversal may give China hawks in the Trump administration, including Lighthizer, an opening to take a harder stance.

Mnuchin, who has been more open to a deal with improved market access, and at times clashed with Lighthizer, appeared in sync with Lighthizer in describing the changes to reporters on Monday, while still leaving open the possibility new tariffs could be averted with a deal.

Trump's tweets left no room for backing down, and Lighthizer made it clear that, despite continuing talks, "come Friday, there will be tariffs in place."

Cheers

[SSridhar]

Pompeo Attacks China and Warns Britain Over Huawei Security Risks - Stephen Castle, NYT

Secretary of State Mike Pompeo on Wednesday made a blistering attack against China as he stepped up pressure on Britain, warning that American intelligence sharing could be risked by the involvement of a Chinese company in a new British telecommunications network.

Speaking in London, Mr. Pompeo argued that China posed such a range of economic and security threats that the world now faced “a new kind of challenge, an authoritarian regime that’s integrated economically into the West.”

“China steals intellectual property for military purposes,” he said. “It wants to dominate A.I., space technology, ballistic missiles and many other areas.”

The question on the table in Britain is whether the government should allow Huawei, a Chinese company considered a security risk by the United States, to help build some of the next-generation, 5G cellular network in Britain.

Discussions on that topic were the subject of a leak that last week prompted the firing of the British defense secretary, Gavin Williamson, who had opposed working with the Chinese firm.

Huawei denies that it is a security risk.

In a speech for the 40th anniversary of Margaret Thatcher’s first election victory, Mr. Pompeo asked whether the British leader who came to be known as the Iron Lady would have allowed China “to control the internet of the future.”

Mr. Pompeo argued that Chinese law allowed the government to demand access to data flowing through Huawei systems.

“Why would anyone grant such power to a regime that has already grossly violated cyberspace?” he asked. “What can Her Majesty’s government do to make sure sensitive technologies don’t become open doors for Beijing’s spymasters?”

He also issued a stark reminder to his British hosts that if security were compromised, it would restrict the ability of the United States to share sensitive intelligence information with the British, as it does extensively.

“Insufficient security will impede the United States’ ability to share certain information within trusted networks. This is just what China wants — to divide western alliances,” Mr. Pompeo said.

Mr. Pompeo also said at an earlier news conference, however, that he has “great confidence that the United Kingdom will never take an action that will break the special relationship,” a reference to the close ties of the two nations and a comment that reassured some British officials that damage to relations with the United States can be avoided.

Britain’s foreign secretary, Jeremy Hunt, told reporters that the government had not made its final decision on Huawei, and would never take a decision that would compromise its ability to share intelligence with its closest allies, “or in particular with the United States.”

British officials believe that it is possible to give Huawei some access to noncore elements of its new 5G system while maintaining the security of more sensitive networks.

The United States has warned several governments around Europe against working with Huawei, and the topic has become increasingly touchy as countries decide on how to build their 5G networks.

The issue is particularly delicate for a British government that is planning to leave the European Union and wants to forge stronger economic links with China and other Asian economies, while also building on its close diplomatic and trading relationship with the United States.

Mr. Williamson was fired last week after an investigation into a report in The Daily Telegraph regarding discussions about the Huawei decision in Britain’s National Security Council, of which Mr. Williamson was a member.

The article suggested that Prime Minister Theresa May had overruled objections from some cabinet ministers, including Mr. Williamson, about bringing the Chinese company into the 5G project. Mr. Williamson has denied being the source of the leak.

In Parliament on Wednesday, Julian Lewis, a senior lawmaker in Mrs. May’s Conservative Party and chairman of the House of Commons Defense Committee, asked the prime minister whether it would not “be naïve to the point of negligence to allow Huawei further to penetrate our critical national infrastructure.”

Mrs. May said she was “not considering any options that would put our national security communications at risk, either within the U.K. or with our closest allies.”

[Prem]

https://sputniknews.com/asia/2019051010 ... china-sea/?

India Joins First-Ever Joint Naval Drill in Contested South China Sea

New Delhi (Sputnik) — India's naval forces joined those of the US, Japan and the Philippines to conclude their first-ever joint naval drill in the South China Sea on Thursday, prompting censure from China, which claims sovereignty over the resource-rich marine region.The Indian Navy joined the exercise as part of its commitment to operate with like-minded nations to ensure a safe maritime environment through enhanced interoperability.The week-long naval drill involved a Japanese aircraft carrier, a US destroyer, two Indian naval ships and a Philippine patrol vessel. The Indian ships that took part were the INS Kolkata and INS Shakti."The ships undertook various exercises en route, which included formation manoeuvring, replenishment runs, cross-deck flying and the exchange of Sea Riders. The Group Sail exercise with the naval ships of Japan, the Philippines and the United States showcased India's commitment to operating with like-minded nations to ensure a safe maritime environment through enhanced interoperability," an Indian government press release read.China's amphibious ship Jinggangshan is seen during a coordination training with a hovercraft in waters near south China's Hainan Province in the South China Sea.Reacting to the development, the Chinese foreign ministry said that the countries should not indulge in any action that undermines peace and stability in the region.As a principle, relevant countries' policies on and actions in a region should be serving, instead of undermining, the region's peace, stability and development," Geng Shuang, spokesperson of the Chinese foreign ministry said.The joint naval drill comes days after the US guided-missile destroyers Preble and Chung Hoon trespassed in the adjacent territorial waters of Nanxun Jiao and Chigua Jiao, two of China's Nansha Islands, without permission from the Chinese government. The US action angered China, which said that the US move infringed upon its sovereignty.China, in a strongly worded statement, had asked the US to cease such provocations."With the concerted efforts of China and ASEAN states, the situation in the South China Sea is steadily improving. China urges the US to stop such provocations, respect China's sovereignty and security interests and the regional countries' efforts to safeguard peace and stability in the South China Sea," Geng Shuang warned the US.

[SSridhar]

Philippines joining the exercise, coming so soon after the Thitu island warning from Duterte, is significant even though the Philippines has no navy to boast of.

[kit]

https://www.mintpressnews.com/sri-lanka ... es/258170/
Opinion and Analysis: Sri Lanka: How Saudi-Backed Terror Targeted China’s Allies
When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit?
by Tony Cartalucci

Examining the West’s decades of using terrorism – particularly terrorism fuelled by Saudi Wahhabism – and the inception of ISIS itself – leaves Washington and its partners as the prime suspects behind Sri Lanka’s tragic terrorist attack – with its motivation strikingly similar to what prompted the US-Saudi aided rise and use of the Muslim Brotherhood and Al Qaeda throughout the Cold War.

It is admitted that the US and its partners sought the creation of ISIS – its sudden appearance everywhere China is attempting to do business fits the now documented and admitted pattern of Washington’s use of extremism to fight and coerce wherever its standing armies cannot afford to intervene and a degree of “plausible deniability” is desired.

When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit? The US played a central role in deliberately creating ISIS. If ISIS is indeed behind the attack on Sri Lanka, then it is by extension an act of terror carried out by Washington.

Destabilizing Sri Lanka – a critical South Asian partner of Beijing and its OBOR initiative – with terrorism and ethnoreligious conflict, serves only the interests of China’s overt global opponent – Washington – as well as elements within India’s ruling elite and intelligence agencies.

That's what I had been saying , but it's not just the west now, China is also doing it big time... the obor and bri is fuelling it..and the west feels it's coming back to bite them

[SSridhar]

https://www.mintpressnews.com/sri-lanka ... es/258170/
Opinion and Analysis: Sri Lanka: How Saudi-Backed Terror Targeted China’s Allies
When terrorism strikes – as in any sort of criminal investigation – the first question that must be asked is “cui bono?” To whose benefit?
by Tony Cartalucci

That's what I had been saying , but it's not just the west now, China is also doing it big time... the obor and bri is fuelling it..and the west feels it's coming back to bite them

That article blames covertly Modi & Doval when it tongue-in-cheek refers to "elements within India’s ruling elite and intelligence agencies". We are not reckless like Washington or Islamabad.

[Peregrine]

China reveals conditions for trade deal as Trump sets new deadline

China for the first time made clear what it wants to see from the US in talks to end their trade war, laying bare the deep differences that still exist between the two sides.

In a wide-ranging interview with Chinese media after talks in Washington ended Friday, vice-premier Liu said that in order to reach an agreement the US must remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand and ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations.

Liu’s three conditions underscore the work still to be done if an accord is to be reached between the world’s two largest economies. President Donald Trump’s own negotiators told China it has a month to seal a deal or face tariffs on all its exports to the US.

That threat was made during talks Friday in Washington, hours after Trump upped the ante by imposing a second round of punitive duties on $200 billion in Chinese goods. China vowed retaliation, but hadn’t announced any details as of Saturday evening in Beijing.

US trade representative Robert Lighthizer said the administration would on Monday release details of its plans for tariffs on an additional $300 billion in imports from China, setting the process in motion for Trump to deliver on the threat to hammer all Chinese trade.

US officials insist they have been working on a deal that would bring an end to what they portray as China’s rampant theft of American intellectual property and rein in the industrial subsidies that have fueled the rapid ascent of Chinese corporate giants.

Trump’s move to raise tariffs on Friday came after China backed away from prior commitments to enshrine changes promised at the negotiating table in Chinese law, according to US. officials. During his meetings in Washington this week Liu said China was ready to commit to pushing reforms via State Council directives but again balked at changing any laws, according to one person familiar with the discussions.

In his interview Liu said both sides agreed to keep talking despite what he called “some temporary resistance and distractions,’’ and to hold future meetings in Beijing. He dismissed the idea that talks had broken down. “It’s normal to have hiccups during the negotiations. It’s inevitable.”

Liu also struck a note of defiance. “For the interest of the people of China, the people of US and the the people of the whole world, we will deal with this rationally,” the vice premier said. “But China is not afraid, nor are the Chinese people,” adding that “China needs a cooperative agreement with equality and dignity.”

‘Candid and Constructive’

In a series of tweets that cheered markets, Trump declared Friday that the talks with China had been candid and constructive. “The relationship between President Xi and myself remains a very strong one, and conversations into the future will continue,” he said. Further talks are possible, but there’s no immediate plan for the next round, according to a
person familiar with the negotiations.

Liu’s comments, however, revealed yet another new fault line: A US push for bigger Chinese purchases to level the trade imbalance than had originally been agreed.

According to Liu, Trump and Chinese President Xi Jinping agreed “on a number” when they met in Argentina last December to hammer out the truce that set off months of negotiations. That “is a very serious issue and can’t be changed easily.”

Read more about China’s offer to end the imbalance in trade with U.S.

The amount of purchases by China should be “in line with reality,” according to a commentary by state news agency Xinhua on Saturday. China also sees the removal of all the extra tariffs that have been imposed since last year as a precondition to a deal, whereas US negotiators see retention of some duties as a key mechanism to enforce a deal.

The lack of progress left major question-marks hanging over the search for a deal on trade -- just one source of tensions in a growing geopolitical rivalry that’s already shifting supply chains and testing established economic and security alliances.

Trump, who is seeking re-election on the back of a booming US economy, on Friday sought to justify his decision to hike tariffs as well as to convince businesses and financial markets that he wasn’t walking away from a deal.

No Rush

“There is absolutely no need to rush,” the US president said. In another tweet, Trump proposed a vast new plan to use income from tariffs to buy up the crops of American farmers who’ve watched their exports to China collapse, and send them to poor countries as aid.

The presidential good humor hid what people familiar with the discussions say has been an increasingly gloomy mood around the negotiations in recent days.

Before a rebound late Friday, US equity markets had posted their worst week of the year, as the trade truce that had been in place for months was shattered by the new US tariffs. The S&P 500 recovered from earlier losses Friday, ending the day 0.4% higher.

Election Year

This week’s tariff move is likely to have significant short-term consequences for retailers and other US businesses reliant on imports from China. But extending it to all trade would increase the economic and political stakes even further for Trump and American businesses.

Such a step would see price increases on smartphones, laptops and other consumer goods -- the kind that Trump’s advisers have been eager to avoid, out of concern for the domestic fallout. It would likely provoke further retaliation, and some economists are predicting it could even tip the US economy into recession just as Trump faces re-election in 2020.

‘Gets Harder’

This week’s talks have also amplified the differences that remain between the two governments as they navigate their own domestic politics as well as a growing international rivalry.

Liu’s interview underlined the need for any agreement not to be seen as undermining Chinese sovereignty -- as the US demand to change domestic laws surely would be.

The text “must be balanced” for the dignity of a country, Liu said, repeating China and the U.S. are “trying to meet halfway” despite different views on some crucial issues.

Securing a trade deal is likely to get harder from here unless outside factors, such as an economic downturn, force a compromise, according to Ely Ratner, a China expert who served in the administration of President Barack Obama and is now director of studies at the Center for a New American Security think-tank.

“The question is can the Chinese come back and offer enough such that Trump can sell it?’’ he said. “It is going to be hard for them to do that in the face of Trump escalating. I think it gets harder as this thing goes on, and it gets harder politically for Trump.’’

Cheers

[SSridhar]

‘East coast can become a manufacturing hub’ - Atul Aneja, The Hindu

India’s outreach to the East and an escalating trade war between China and the United States is helping to turn the Bay of Bengal coastline into a new and attractive growth engine.

In the backdrop of Shanghai, Guangzhou and Shenzhen — coastal cities which propelled China’s rise as the workshop-of-the world — India too appears to be stepping up its game of coast-based manufacturing, focussing intensely on its eastern shores.

“We have traditionally concentrated on the west coast because our economic engagement was mainly with the West. But with the global economy gravitating towards the Indo-Pacific, our east coast must also develop and ride Asia’s economic boom,” said Anil Yendluri, chief executive officer of Krishnapatnam port in Andhra Pradesh, in a conversation with The Hindu .

But Mr. Yendluri, who was in Shanghai to co-host the India-China logistics forum, stressed that many overseas shippers were still not ready to take advantage of cost effective transit to growth hubs such as Hyderabad or Bengaluru from new ports cropping up along India’s east coast.

“Krishnapatnam port is the logical logistics solution for Andhra Pradesh, Telangana and Karnataka cargoes. It is right in the centre, with Visakhapatnam port further north and Chennai to the south,” said Mr. Yendluri.

Anil Kumar Rai, India’s Consul General in Shanghai, concurs with the assessment. “It is worthwhile to mention that these States (Andhra Pradesh, Tamil Nadu and Telengana) are important destinations for investments from China. Efficient container handling by Navyuga container terminal (at Krishnapatnam) may spur rapid economic growth, speedy industrialisation and better integration with the overseas supply chain,” he observed.

[Peregrine]

X Posted on the Oil & Natural Gas: News & Discussion Thread

Backtrack On Pledge To Buy Iranian Oil - Tim Daiss

It was a question that just as recently as last week was still undecided. Would Beijing kowtow to Washington’s demand that it stop importing Iranian oil at the start of May after the 180-day import waiver period ended? The answer, at least for now, is that Beijing will comply.

Oil majors Sinopec Group and CNPC, China’s two top oil refiners, are reportedly skipping purchases of Iranian oil for loading in May, Reuters reported on Friday, citing people familiar with the deal. On April 22, President Trump surprised oil markets when said he would end 180-day Iranian oil import waivers put in place in November for eight of the Islamic Republic’s largest oil importers, including import heavyweights China, Japan, and India. Prices the same day for both global oil benchmark Brent crude futures and U.S. oil benchmark West Texas Intermediate (WTI) futures spiked 3 percent on the news. Prices since then have pared these and subsequent gains due to a number of factors, including a spike in U.S. tariffs from 10 percent to 25 percent on some $200 bn worth Chinese goods after trade talks between Washington and Beijing broke down with allegations that Beijing had back-peddled on numerous agreements in recent talks.

Moreover, just last week there had been speculation and even reports in Chinese media that Beijing might still import Iranian oil in defiance of U.S. policy. At the same time, many within China's oil and gas patch downplayed the importance of Iranian oil imports to China's energy security.

According to a report late last week in the Beijing-based Global Times, experts in the country said that China’s energy security wouldn’t be affected too much by the removal of oil sanctions waivers due to the diversification of supply, while the issue could even offer Beijing a new bargaining chip in ongoing trade negotiations with Washington.

"China has multiple overseas oil suppliers, so the U.S. sanctions won't have a huge impact on China's energy security,” said Bai Ming, deputy director of China’s Ministry of Commerce's International Market Research Institute. Hua Liming, a Middle East studies expert and a former Chinese ambassador to Iran said “it [the removal of waivers] doesn't mean China will submit to the U.S. and cut off its energy trade ties with Iran because Iran is a key partner of China in economy, politics, and security. According to state-run Xinhua news agency, Iranian oil imports make up some 6 percent of China’s total crude imports, making the Islamic Republic China’s seventh largest oil importer.

China's oil refining juggernaut

The decision for China's top two refiners to halt Iranian oil imports is noteworthy for a number of reasons. First, it shows that China is not willing to risk ( at least for now) even more fall out with the U.S. amid a host of other differences, including failed trade talks, and disagreements over China's massive land reclamation in the volatile South China Sea.

The decision to halt Iranian oil imports is also significant since China has the largest refining capacity in the Asia-Pacific region. China will drive the majority of growth in the crude oil refining industry in Asia between 2018 and 2023, contributing 44 percent of Asia’s crude oil refining capacity in 2023, according to GlobalData.

However, if trade talks between Washington and Beijing fall flat on Friday, Beijing could reverse course on its adherence to U.S. demands to stop importing Iranian oil. Until it does, Saudi Arabia, Russia, and others, already in fierce competition to lock up as much Chinese oil market share as possible, will be more than willing to make up the difference

Cheers

[Peregrine]

US-China trade war: How it may impact India - TIMESOFINDIA.COM

NEW DELHI: The ongoing trade tussle between world's two major economies -- the United States and China -- is fueling fears about damage to global economic growth. The US and China have locked horns over tariffs, leaving the world on the brink of a trade war. China has said it would impose higher tariffs on $60 billion of US goods from June 1 in retaliation against Washington's tariff hike on Chinese goods.

US-China trade dispute began

It all started in March last year when US President Donald Trump had slapped heavy tariffs on imported steel and aluminium items from China and it responded by imposing tit-for-tat tariffs on billions of dollars worth of
American imports.

The dispute intensified trade war after the US demanded that China must reduce its $375 billion trade deficit with the US and give more access to American goods in Chinese markets.

The International Monetary Fund (IMF), in a report earlier this year, had stated that the US-China trade tension was one factor that contributed to a "significantly weakened global expansion" late last year, as it cut its global growth forecast for 2019. IMF chief Christine Lagarde had also said that fresh trade tensions between the United States and China were threat to the world economy.

For India, a significant shift in the manufacturing sector is awaited and this could be a golden opportunity for India, especially if it is properly positioned. Although, if the tension persists for long, then there could be a slowdown in the economy too.

The United Nations had said in a report that India is among few economies that stand tobenefit from the trade tensions between the world's top two economies.

What Xiaomi founder has to say

In an interview with TOI, Lei Jun, the 49-year-old founder of Xiaomi, the Chinese mobile phone and electronics giant that has raced to $26 billion in turnover in less than a decade of existence, said that he believes that growing trade tensions between China and the US could see Chinese investment flow being increasingly directed towards India.

Jun Jun, who is called by some as the ‘Steve Jobs of China’, describes India — where the company leads in smartphone sales — as Xiaomi’s most important market outside China, and says the company is getting set to launch a range of new products in India to complement the existing line-up of phones and televisions that it already sells. These could include refrigerators, washing machines, ACs, water purifiers, and possibly even electric vehicles.

Opportunity for exporters?

As Chinese goods are being taxed at a higher rate in the US, this implies that the Indian exporters can explore this opportunity to fill the gap. But, currency factor will be an important factor to watch.

Apple shifting base

Foxconn Technology Group chairman Terry Gou had said the iPhone will go into mass production in India this year, a shift for the largest assembler of Apple Inc’s handsets that has long concentrated production in China. Mass production of iPhones to start in India, a shift from China

Gou had stated that Prime Minister Narendra Modi has invited him to India as his Taiwanese company plans its expansion in the country. Apple has had older phones produced at a plant in Bangalore for several years but now will expand manufacturing to more recent models.

“In the future, we will play a very important role in India’s smartphone industry,” Gou had aid at an event in Taiwan. “We have moved our production lines there.”

Stock markets bleeding

World stocks hovered near two-month lows, although slightly more optimistic comments from the US and Chinese officials on trade brought some comfort a day after equities suffered their worst sell-off so far this year.

Domestic stock markets are facing the heat too. The benchmark BSE sensex shed 1,941 points in just nine trading sessions. However, some experts have said that the uncertainty in markets can also be due to the pending results of the 2019 general elections. Equity indices are expected to bounce back after the results are announced on May 23.

Meanwhile, indices turned green on Tuesday with sensex finishing 228 points higher at 37,319, while the
broader NSE Nifty settled at 11,222.

Cheers

[SSridhar]

Xi Jinping hits back at 'clash of civilisations', says no civilisation is superior to another - Straits Times

Makes one laugh, coming from a Han Chinese Emperor!

China's top leader has hit back at the view that his country's rivalry with United States is one of a clash between civilisations, a view that was floated recently by a senior US official.

Speaking at the opening ceremony of a summit in Beijing to promote cooperation among Asian countries on Wednesday (May 15), Chinese President Xi Jinping said all civilisations were unique, and no one civilisation was superior to another.

"The thought that one's own race and civilisation are superior, and the inclination to remould or replace other civilisations are just stupid. To act them out will only bring catastrophic consequences," he said, to applause.

Mr Xi's rebuke of US State Department director of policy planning Kiron Skinner, who said at a think tank event last month that the rivalry with China is the first time the US is facing a great-power competitor that is not Caucasian, is the latest push back from Beijing against such a view.

Ms Skinner had framed US-China rivalry as "a fight with a really different civilisation and a different ideology".

Mr Xi said: "If human civilisations are reduced to one single colour or one single model, the world will become a stereotype and be too dull a place to live in. What we need is to respect each other as equals, and say no to hubris and prejudice."

His comments at the Conference on Dialogue of Asian Civilisations (CDAC) come amid escalating tensions with the US, after trade talks with Washington broke down last week.

President Halimah Yacob pointed out that Singapore's diversity also means it can tap cultural and language similarities, and familial ties to help make friends with other Asian countries.

Beijing has framed the breakdown as due to what it called unrealistic US terms that harmed China's sovereignty and dignity.

Calling on countries to come together to promote interaction, dialogue, harmony and economic globalisation, Mr Xi said China was willing to work with them to "protect Asian cultural heritage, and better preserve and sustain our civilisations".

He added that in his travels, he has been fascinated by diversity of civilisations, listing Egypt's Luxor temple, the Acropolis in Greece and Sentosa in Singapore, as some examples. {One does understand Luxor & Acropolis in the context of 'civilization', but Sentosa ? It doesn't have any such civilizational importance! The only conclusion I can come to is that the Singaporean President was attending the Conference and China is wooing Singapore carefully.}

The inaugural CDAC conference is being held just weeks after the Belt and Road Forum, the summit on Mr Xi's marquee foreign policy strategy. It is Beijing's latest effort to position itself as a leader in global governance. {CDAC is a part of Chinese initiative to popularize BRI through back-door and shape the narrative on cultural space as well by the Chinese}

The one-day event, which features discussions on issues including Asian governance, education and culture, is being held alongside various cultural events.

Other world leaders, including Singapore President Halimah Yacob, Cambodian King Norodom Sihamoni and Greek President Prokopis Pavlopoulos, also spoke at the opening ceremony of the summit.

Mr Pavlopoulos echoed Mr Xi's comments and said it was a "great mistake" to believe it was possible to have a clash of civilisations.

"Real civilisations by their own nature are not clashing, real civilisations open a dialogue among themselves," he said.

[Peregrine]

SSridhar Ji :

Its not only Sentosa. Singapore has an overwhelming Population of Chinese :

Singapore is a multiracial and multicultural country with ethnic Chinese (76.2% of the citizen population), Malays (15.0%), and ethnic Indians (7.4%)

干杯 Gānbēi

[SSridhar]

US navy chief does not want China tensions to 'boil over' - AFP

The US navy chief said Wednesday he did not want maritime tensions with China to "boil over", a week after Washington's latest challenge to Beijing's territorial claims in contested waters. Beijing said last week two American warships sailed near disputed islands in the South China Sea without permission, prompting the Chinese Navy to ask them to leave.

The ships entered waters adjacent to Gaven and Chigua reefs in the Spratly Islands, which Beijing calls Nansha, on May 6, China's foreign ministry said.

Speaking on the sidelines of a maritime security conference in Singapore, Admiral John Richardson said Washington will continue such operations which are aimed at ensuring freedom of navigation.

The US will however ensure that communications with Beijing remain open to prevent any untoward incidents, he added.

"I really value the channel of communication that I have with Shen Jinlong," he told reporters, referring to his Chinese counterpart.

"We just recently visited China, we had a chance to get to know each other, understand each other more thoroughly.

"We can continue to advocate that while we may not see things the same in all parts of the world, we've got to work through those differences in a way that doesn't boil over into conflict." The US Navy regularly conducts freedom of navigation operations to challenge Beijing's vast claims in the sea, often angering China.

After last week's sail-by, a foreign ministry spokesman said "the Chinese side expresses strong dissatisfaction and resolute opposition" to the US action.

But Richardson insisted the patrols were routine.

"We haven't done anything increasingly provocative or anything else that we would not do anywhere else in the world," he said.

[siqir]

trade war seems to have indeed gone up a notch

both their external affairs spokie and a news anchor coming out with fighting words feng pei dao di meaning accompany till the end or promising to match every step

https://www.youtube.com/watch?v=4Tk_qfBg_mc

https://www.youtube.com/watch?v=6rLftnT3MsQ

both in chinese but you can get a flavor of what was said in this google translated bbc zh article

https://translate.googleusercontent.com ... 6S2JKsNXHg

usual context of such words is like in this recent popular xianxia tv show

https://www.youtube.com/watch?v=cO6z0KVttbE&t=1200

so people took notice and many responding with patriotic statements

[SSridhar]

trade war seems to have indeed gone up a notch

both their external affairs spokie and a news anchor coming out with fighting words feng pei dao di meaning accompany till the end or promising to match every step

Who would know more about abusive Chinese commentators than us? We have been encountering this since about 1958, the latest being during Doka La?

The Han Chinese would be all right after some time. The Chinese Vice Premier has already said that they didn't intend to fight.

[SSridhar]

US blacklists China’s Huawei and bars US companies from using foreign telecoms posing security risk - Straits Times

The Trump administration hit Chinese telecoms giant Huawei with severe sanctions on Wednesday (May 15), adding a new incendiary element to the United States-China trade dispute just as Treasury Secretary Steven Mnuchin said he would visit China soon for more talks.

The Commerce Department said it was adding Huawei Technologies and 70 affiliates to its so-called “Entity List” {the dreaded Entity Control List} - a move that bans the company from acquiring components and technology from US firms without government approval.

Secretary Wilbur Ross said in a statement that President Donald Trump backed the decision to “prevent American technology from being used by foreign-owned entities in ways that potentially undermine US national security or foreign policy interests”.

Mr Trump earlier in the day signed an executive order barring US companies from using telecommunications equipment made by firms deemed to pose a national security risk.

While the order did not specifically name any country or company, US officials have previously labelled Huawei a “threat” and actively lobbied allies not to use Huawei network equipment in next-generation 5G networks.

China said on Thursday (May 16) said it strongly opposed other countries imposing unilateral sanctions on Chinese entities.

The United States should avoid further impacting Sino-US trade relations, Commerce Ministry spokesman Gao Feng told reporters at a weekly briefing. He also said China would take "relevant countermeasures" to protect the rights and interests of Chinese firms abroad. He did not elaborate.

Huawei on Thursday criticised what it said were "unreasonable restrictions" by the United States.

"Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives," the telecom giant said in a statement.

"In addition, unreasonable restrictions will infringe upon Huawei's rights and raise other serious legal issues," the statement said.

The company said it was “ready and willing to engage with the US government and come up with effective measures to ensure product security".

Last August, Mr Trump signed a Bill that barred the US government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.

Federal Communications Commission (FCC) chairman Ajit Pai, who has called Huawei a threat to US security, said on Wednesday that, "given the threats presented by certain foreign companies' equipment and services, this is a significant step towards securing America's networks".

The order directs the director of US National Intelligence to produce an assessment by late June on the risks to the US and critical infrastructure "from information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary".

In January, US prosecutors charged two Huawei units in Washington state, saying they conspired to steal T-Mobile US Inc trade secrets, and also charged Huawei and its chief financial officer with bank and wire fraud on allegations that the company violated sanctions against Iran.

The FCC in April 2018 voted to advance a proposal to bar the use of a US$9 billion (S$12.3 billion) government fund to purchase equipment or services from companies that pose a security threat to US communications networks.

The FCC voted unanimously to deny China Mobile's bid to provide US telecommunications services last week, and said it was reviewing similar prior approvals held by China Unicom and China Telecom Corp.

The issue has taken on new urgency as US wireless carriers roll out 5G networks.

While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.

TRADE TALKS

Speaking in a US Senate Appropriations subcommittee hearing earlier, Mr Mnuchin characterised two days of high-level talks with Chinese officials in Washington last week as constructive.

“My expectation is that we will go to Beijing at some point in the near future to continue those discussions,” he said. “There’s still a lot of work to do.”

He did not say when his China trip might take place.

The Trump administration’s rhetoric towards China had cooled in recent days after another round of tit-for-tat tariffs between the world’s two largest economies and a sell-off on global stock markets.

On Tuesday, Mr Trump denied talks with China had collapsed, and sounded an optimistic note about the chance of a deal, saying he had an “extraordinary” relationship with Chinese President Xi Jinping, who he plans to meet at a Group of 20 summit in Japan next month.

Mr Trump also urged China to buy more US farm products. US agricultural goods have been targeted by China’s retaliatory tariffs, and American farmers, a key political constituency for Mr Trump, are worried.

The US Department of Agriculture has paid US$8.52 billion directly to farmers as part of a 2018 aid programme designed to offset losses from tariffs imposed by China and other trading partners, a spokesman for the agency said on Wednesday.

The Trump administration had pledged up to US$12 billion in aid to help offset losses resulting from Chinese tariffs.

TARIFF PAIN

Mr Trump, who has embraced protectionism as part of an “America First” agenda, has railed against what many US and European officials and companies describe as China’s unfair trade practices, including forced technology transfers and intellectual property theft.

But trading partners and close allies in Europe, North America and Asia are also in the US administration’s sights. Mr Mnuchin said the US was close to resolving a dispute over steel and aluminium tariffs imposed on Canada and Mexico last year as the three countries renegotiated the North American Free Trade Agreement (Nafta).

US Trade Representative Robert Lighthizer met Canadian Foreign Minister Chrystia Freeland in Washington on Wednesday to discuss the tariffs and other issues related to the US-Mexico Canada Agreement (USMCA) which replaced Nafta.

The three countries have not yet ratified the new deal. After her meeting with Mr Lighthizer, Ms Freeland declined to say whether the two countries were close to a deal. But she told reporters later that ratification of the agreement would be difficult as long as the tariffs remain in place.

“When it comes to Canada, it has still been the case for us that as long as the tariffs remain in place, ratification would be very, very problematic,” Ms Freeland said on Capitol Hill.

Three Trump administration officials told Reuters that Mr Trump was expected to delay a decision on imposing tariffs on imported cars and parts by up to six months, avoiding opening yet another front in his global trade battles.

The tariffs of up to 25 per cent on cars and parts could have a devastating impact on Japan and countries in the European Union, particularly Germany.

Global stock markets, which have swooned in the past week over the rising trade tensions, gained on Wednesday after reports of the planned delay.

‘ADVERSE CONSEQUENCES’

As negotiations towards resolving the US-China dispute stalled last week, the US ratcheted up the pressure by increasing tariffs on a list of US$200 billion worth of Chinese imports to 25 per cent from 10 per cent.

China retaliated on Monday with higher tariffs on a revised list of $60 billion worth of US products. Mr Trump could launch 25 per cent tariffs on another US$300 billion worth of Chinese goods when he meets Mr Xi next month.

He has not ruled out imposing punitive levies on all of China’s imports to the US. Another escalation could disrupt global supply lines and damage a slowing world economy.

Beijing is vowing not to succumb to US pressure. But on Wednesday, China reported surprisingly weaker growth in its retail sales and industrial output in April.

Data out of the US, meanwhile, showed retail sales falling in April as households cut back on purchases of motor vehicles and other goods, pointing to a slowdown in economic growth after a boost from exports and inventories in the first quarter. Other data showed a drop in US industrial production.

The US Congress is uneasy about the potential consequences of tariffs on the economy. House Majority Leader Steny Hoyer said American consumers were in the “same boat as farmers” and would end up having to bear the burden of the tariffs. Consumer spending accounts for more than two-thirds of US economic activity.

[ArjunPandit]

my only hope against huawei is us sanctions on huawei.

[Peregrine]

China plans steps to unearth hidden debt

BEIJING: Local governments will be urged to leverage financial resources for reducing “hidden debt” and make use of market-oriented financial instruments for debt swaps, a senior government official said on Thursday.

In a signed article, China’s Finance Minister Liu Kun said it was imperative to bring down the contingent liabilities of local governments. The minister’s comments also mark a change in the government’s perception about local government debt.

The earlier stance of the ministry was on “controlling the incremental part of the hidden debt”, which is usually the debt borrowed by state-owned companies and local government financing vehicles, but implicitly guaranteed by the government.

Liu’s article was published in Qiushi Journal, a flagship magazine of the Communist Party of China Central Committee. He said more efforts are needed to implement the proactive fiscal policy and boost efficiency this year.

Preventing and defusing local governments’ hidden debt risks is key to controlling major risks, he said.

Innovative financial tools will be introduced for debt swaps, and the indebted companies will be allowed to choose the same way, under guidance from the local governments, Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, the Ministry of Finance’s think tank, told China Daily.

“The total amount of hidden debt waiting to be swapped has not yet been calculated, as this round of debt swaps will not involve the government’s administrative orders, but depends on the market’s appetite based on the evaluation of the potential default risks and the companies’ solvency,” he said.

A possible measure to reduce the hidden debt would be to separate the government-owned assets from that of the companies and let the state-owned businesses run by themselves, said experts close to the matter.

This is particularly so for some public and infrastructure construction projects. But it also means that the local governments will not be undertaking the default risks.

Experts said the minister’s viewpoint is a signal that the authorities are determined to solve the vexed debt issue with more details set to emerge later and start a national campaign for preventing systemic financial risks, amid rising external trade challenges.

Cheers

[kit]

SSridhar Ji :

Its not only Sentosa. Singapore has an overwhelming Population of Chinese :

Singapore is a multiracial and multicultural country with ethnic Chinese (76.2% of the citizen population), Malays (15.0%), and ethnic Indians (7.4%)

干杯 Gānbēi

Another potential Hong Kong/ Taiwan to swallow up

[nam]

Just saw that an Indian team won some dance show in khanland.. A bunch of koreans reviewing the dance on youtube "Korean team lost, happy that our cousin-like won"


Bollywood is one useful idiot, the Chinese will find it difficult to produce..

[SSridhar]

Perils of a rail link built with Chinese funds - Nizar Manek, The Hindu

The train had crossed the frontier on Chinese-built rails between Ethiopia and Djibouti. Barren escarpments and acacia trees were flowing past the windows. Behind lay Ethiopia and a disclaimer at the ticket booth warning passengers to travel at their own peril.

Funded by China’s Exim Bank for $4.2 billion, this is Africa’s first electrified railway, except that it is not really. “Look at the electricity shortage: the train could be blocked for a whole day of operations,” Djibouti’s Finance Minister Ilyas Dawaleh told this writer in his office in Djibouti City.

In January, Mr. Dawaleh said, operations were halted for half a day when a train was blocked by protesters amid conflict on the border between Ethiopia’s Afar and Somali States. Ethnic Afar feared Somali annexation of villages.

“Everyone’s taking hostage of the infrastructure,” Mr. Dawaleh said. Besides the Ethiopian unrest, nomadic people demanding compensation for run-over camels too were not factored into a feasibility study Exim Bank approved for the over 700-km Ethiopia-Djibouti Railway in 2013, before disbursing the loan ($490 million) for Djibouti. In April, an Ethiopian freight train skidded off the tracks. Revenue forecasts for the railway, meant as a pivot for Ethiopia’s export-oriented industrial development dream, have been cut to a third against the feasibility study. The track remains incomplete in both the nations and the railway transports only one commercial train a day, not three as planned, said Ahmed Osman, Governor of Djibouti’s Central Bank.

During the railway’s first year of operations, 90% of trains from Ethiopia arrived empty at a container terminal in Djibouti, only to collect imports from a nearby loading point, said its director-general, Abdillahi Adaweh Sigad. At one point, there’s a railway station beside a mountain range abutting a fortressed base for China’s People’s Liberation Army (PLA) and linked to a Chinese-funded and part-Chinese managed port. Warehouses lie between and “some sensitive cargo” are imported, according to the port’s commercial director.

Ethiopia and Djibouti are working on restructuring the rapid rise of debt, whose maturity has already been extended. In February, Mr. Dawaleh met Exim Bank’s president in Beijing, saying Djibouti, like Ethiopia, wants partial railway privatisation. China Civil Engineering Construction Corporation (CCECC) and China Railway Engineering Corporation (CREC), railway constructors who became management contractors in December 2016, already want shares, the Finance Minister said. The plans may entail private operations of some wagons and segments of the 100-km track on Djibouti’s side, Mr. Dawaleh said.

Oil and gas development

In April, CREC met Ethiopia’s Prime Minister in Beijing, expressing interest in oil and gas development as State Grid Corporation of China signed a $1.8-billion investment deal with Ethiopia, including to supply power to the railway.

The railway network is planned extended to Damerjog in eastern Djibouti, where a 735-km pipeline with China’s Poly Group will transport natural gas from Ethiopia, said Djibouti’s Minister of Energy, Younis Ali Guedi.

Djibouti’s public and publicly-guaranteed debt was estimated to be at 104% of GDP at end-2018, according to the IMF. Djibouti disputed the forecast, saying it used outdated data from the IMF’s last debt sustainability analysis, in 2016, and included debts of state enterprises, which the government doesn’t compute as sovereign debts.

Djibouti, meanwhile, seeks new off-balance sheet commercial loans totalling $448 million, including a $56 million loan from Exim Bank, for an electricity transmission line. Shanghai Electric Group agreed in September to split the EximBank loan 50:50 with the state-owned Electricité de Djibouti (EDD).

Another line is planned, with finance expected from India’s Exim Bank. Djibouti separately seeks a European-financed $420-million loan for an airport that would be recorded on the balance sheet of Great Horn Investment Holding, a subsidiary of the Djibouti Ports and Free Zones Authority, and so, like the EDD loan, not accounted for as sovereign debt, said its chairman Aboubaker Omar Hadi.

(Nizar Manek is a journalist based in Addis Ababa)

[chola]

Interesting fear-mongering from the American far right where Unkil loses WWWIII by not being able to do the one thing that goras do best against non-goras -- kill copious amounts of turd-worlders.

But the sly chinis are determine to fight a war where killing is secondary and unnecessary. lol

https://nationalinterest.org/blog/buzz/ ... hina-58237

You Can't Imagine World War III Between America and China

And the amount of blood that would be spilled.



...

To check China, Washington has been building a new digital defense network of advanced cyberwarfare capabilities and air-space robotics. Between 2010 and 2012, the Pentagon extended drone operations into the exosphere, creating an arena for future warfare unlike anything that has gone before.

...

At the stroke of midnight on Black Friday, as cyber-shoppers storm the portals of Best Buy for deep discounts on the latest consumer electronics from Bangladesh, Navy personnel staffing the Space Surveillance Telescope at Exmouth, Western Australia, choke on their coffees as their panoramic screens of the southern sky suddenly blip to black.

Thousands of miles away at the U.S. Cyber Command’s operations center in Texas, Air Force technicians detect malicious binaries that, though hacked anonymously into American weapons systems worldwide, show the distinctive digital fingerprints of China’s People’s Liberation Army.

In what historians will later call the “Battle of Binaries,” CyberCom’s supercomputers launch their killer counter-codes. While a few of China’s provincial servers do lose routine administrative data, Beijing’s quantum satellite system, equipped with super-secure photon transmission, proves impervious to hacking.

...

As Beijing’s viruses spread uncontrollably through the U.S. satellite architecture, the country’s second-rate supercomputers fail to crack the Chinese malware’s devilishly complex code. With stunning speed, GPS signals crucial to the navigation of American ships and aircraft worldwide are compromised.

Across the Pacific, Navy deck officers scramble for their sextants, struggling to recall long-ago navigation classes at Annapolis. Steering by sun and stars, carrier squadrons abandon their stations off the China coast and steam for the safety of Hawaii.

...

Within a matter of hours, Washington’s strategic grip on the axial ends of Eurasia — the keystone to its global dominion for the past 85 years — is broken. In quick succession, the building blocks in the fragile architecture of U.S. global power start to fall.

Every weapon begets its own nemesis. Just as musketeers upended mounted knights, tanks smashed trench works, and dive bombers sank battleships, so China’s superior cyber capability had blinded America’s communication satellites that were the sinews of its once-formidable military apparatus, giving Beijing a stunning victory in this war of robotic militaries.

Without a single combat casualty on either side, the superpower that had dominated the planet for nearly a century loses World War III.

Reading this and you'll understand why Unkil is going after Huawei, why it nearly destroyed ZTE and why Obama banned HPC chips to Cheen.

[Prasad]

It was never about Cheen being yevil communists who are targetting their minorities&running a non-democractic setup. It is and always was about them gaining power that could rival and surpass the americans. Everything else is just smoke&mirrors to hide this truth.

We are a similar civilisation with an equal if not greater potential. But we're about 2 decades behind cheen on the growth path thanks to Deng & the quagmire of our late 80s& early 90s. We will get the same fearmongering and threats when we get to cheens current position. We've already been subject to massive subversion. This face-off is a great opportunity to grow and more importantly LEARN!

[NRao]

Google 'restricts Huawei's use of Android'

Google has cut phone maker Huawei off from some updates to the Android operating system, Reuters reports.

New smartphones made by the company will also lose access to Google's app store and software such as Gmail, the news agency's story says.

Huawei declined to comment and Google did not immediately respond to a request for comment from the BBC.

What services precisely will be severed is still being discussed at Google, said Reuters, citing an unnamed source.

Huawei can still use the version of the Android operating system available through the open source license.

'Big implications"
On Wednesday the Trump administration added Huawei to its "entity list", blocking the sale or transfer of American technology without a licence.

"Until there is a clear statement from Google, it is hard to speculate about the ramifications," said Ben Wood, from the CCS Insight consultancy.

"But should the Reuters report be accurate, it would have big implications for Huawei's consumer business."

Several governments around the world have blocked telecoms companies from using Huawei gear in next-generation 5G mobile networks, citing security concerns.

So far the UK has held back from any formal ban.

"Huawei has been working hard on developing its own App Gallery and other software assets in a similar manner to its work on chipset solutions. There is little doubt these efforts are part of its desire to control its own destiny," said Mr Wood.

________________________________________________________________________________________________________________________

Short-term damage for Huawei?
By Leo Kelion, BBC Technology desk editor
In the short term, this could be very damaging for Huawei in the West.

Smartphone shoppers would not want an Android phone that lacked access to Google's Play Store, its virtual assistant or security updates, assuming these are among the services that would be pulled.

Longer term, though, this might give smartphone vendors in general a reason to seriously consider the need for a viable alternative to Google's operating system, particularly at a time the search giant is trying to push its own Pixel brand at their expense.

As far as Huawei is concerned, it appears to have prepared for the eventuality of being cut off from American know-how.

Its smartphones are already powered by its own proprietary processors, and earlier this year its consumer devices chief told German newspaper Die Welt that "we have prepared out own operating systems - that's our plan B".

Even so, this move could knock its ambition to overtake Samsung and become the bestselling smartphone brand in 2020 seriously off course.