If you're going to San Francisco

Be sure to agree to curb fentanyl production and resume military talks

Welcome to another edition of What’s Happening in China, a weekly newsletter that curates the latest and most important news and developments from the country.

Whether you are a businessperson, investor, government official, academic, media outlet, or general reader, if you want to stay up-to-date on the latest developments in and related to China, I encourage you to subscribe.

Simply click the button below to get What’s Happening in China in your inbox every Saturday.

Let’s jump into it…

PHOTO OF THE WEEK

Green Lake Park in Kunming — with vertical symmetry.

Watching APEC, Thinking About the UFLPA –

Forced Labor & Trade

Maybe it’s just availability bias, but I think that the issue of forced Uyghur labor, and China’s treatment of the Uyghur community writ large, is a really big deal. I think the intersection of forced Uyghur labor in global supply chains is a substantial and legitimate concern in the U.S.-China trade relationship. I can’t speak for anyone else, but, given the chance, it’s precisely the sort of thing I’d want to talk about with Chinese leadership. A lot.

I am in no way privy to the “candid and direct diplomacy” that Secretary Raimondo saw and participated in at Woodside. It is totally possible that after re-establishing the the military-to-military dialogue, and covering climate change, public health and the fentanyl cooperation, the next order of business was China’s treatment of Uyghurs. But in public discourse at APEC, I’m not sure the issue was ever broached.

BP and Spotify bought carbon credits at risk of link to forced Uyghur labour in China – The Guardian

BP and Spotify were among companies who bought carbon credits at risk of being implicated in potential Uyghur forced labour, an investigation has found.

The credits were sourced from the Bachu carbon project, which was developed by South Pole, the world’s largest carbon consultancy. The project focussed on a biomass power plant in Xinjiang, China, which said it would lower global carbon emissions by using waste cotton stalks from nearby fields to generate electricity.

Hikvision Wins Project Requiring Ramadan Alerts Against Minorities – IPVM

Hikvision won a PRC 'Smart Campus' system that alerts when ethnic minority students are suspected of fasting for Ramadan.

Hikvision responded by admitting it won the project but alleging, without evidence, that these alerts were never actually developed/deployed.

Rahile Dawut: A Lifetime Passion That Ended with a Life Sentence – Made in China Journal

The fate of Rahile Dawut illustrates how the very existence of minority cultures is vulnerable to political change. What was once permitted can suddenly be perceived as a threat to the state when there is a shift in ideology. Her work, which was supported and funded by the Chinese Government for more than two decades, became a symbol of ‘separatism’ almost overnight. Her case is an example of how minority identities came to be reframed as a threat to the Chinese State as the Chinese Communist Party began putting more emphasis on its one-nation ideology.

Today, we witness staged presentations of Uyghur culture for tourists, offering a portrayal of a safe and friendly Xinjiang, while the authentic culture is criminalised and its practitioners, along with individuals like Rahile Dawut, who researched it with great passion, remain incarcerated.

POLITICS & SOCIETY

Six people arrested in China’s Hubei province over ‘baby-trafficking ring’ – The Guardian

Six people have been arrested in central China’s Hubei province over alleged involvement in a baby-trafficking ring linked to a hospital in one of the province’s biggest cities.

In China, Live Music Gigs are Sparking a Street Stall Renaissance – Sixth Tone

With live events in China on the rise again, makeshift stalls outside venues are growing more popular. Recognizing the trend, local governments are now easing regulations to support them.

On China’s Streets, Young Vendors Toil for Money, Friendship, and Freedom – Sixth Tone

In China, relaxing restrictions on night markets and street vendors is encouraging more young people to venture into street vending. While some are trying to turn the traditionally low-status job into a lucrative venture, others are doing it as a hobby or a lifestyle choice.

Deadly School Stampede Renews Calls for Scheduling Reform – Sixth Tone

After one student died and five others were injured in a rush to the bathroom, Chinese are once again calling for schools to rethink their short, tightly controlled break periods.

China Releases New Rules to Strengthen Penalties Against Telecom Scams – Caixin

Chinese authorities have stepped up the fight against rampant telecom scam activity with new draft rules aimed at tightening penalties for not only scammers but also their facilitators, including those in the financial, telecom and internet industries.

The Ministry of Public Security released the rules Monday, specifying who is to be penalized and what the penalties are in relation to the areas of finance, telecom networks and credit. The public has until Dec. 12 to provide feedback.

Fire in China coal company office kills 26 – The Guardian

A fire that erupted in the office of a coal company in northern China has killed 26 people, state media said on Thursday, the latest in a series of deadly accidents in the coal industry.

At least 38 people were injured in the blaze, which broke out at the four-storey Yongju Coal Industry Joint Building in the country’s top coal-producing hub of Shanxi. Calls to the company by the Reuters news agency were not answered.

China’s president, on a trip to the United States, urged the authorities to ensure more safety measures are put in place, the state-run Xinhua news agency said.

The Power – and Limits – of Xi Jinping – The Diplomat

The failure to take account of China’s political fragmentation leads to one of the biggest misunderstandings of Chinese politics: the mistaken belief that China is a unitary state. When discussing Chinese foreign policies, many China watchers tend to believe Chinese policy reflects the leader’s personal preference. For example, Rush Doshi’s “The Long Game” uses central government work documents to show China’s foreign ambitions. Doshi argues that China’s foreign policy under Xi reflects a decades-long strategy to replace the United States as the new regional and global leader. Similarly, Elizabeth Economy’s “The World According China” studies Xi Jinping’s personal speeches and writings to illustrate China’s ambitious new strategy to reclaim the country’s past glory and reshape the geostrategic landscape.

These works make valuable contributions to studying Chinese politics through document analysis, one of the oldest methods for scholars to study the CCP. However, they fail to differentiate between the leader’s input in policymaking and the final policy outcome. China faces a fragmented authoritarianism problem. Therefore, policy outcomes often do not reflect the leader’s intention because many actors are involved in policy implementation.

[…]

In addition, many domestic players act as lobbyists in China’s foreign policymaking. Local leaders have proven adept at citing central leaders’ rhetoric to advance their own distinct goals. Domestic actors persuade and mislead leaders to take positions with their interests in mind.

[…]

Xi is the most powerful leader since Mao, yet they govern differently. Xi cannot overthrow the bureaucracy; he must rely on it to deliver policy results. Despite Xi’s efforts to centralize power and exert more control, he still cannot control policy outcomes due to fragmented authoritarianism.

The imagining of China as a unitary state misses this fragmentation. By believing every policy comes from Xi, U.S. policymakers grow the dangerous tendency to assume the worst of China. As the balloon incident showed, China’s fragmentation leads to unintended consequences, and assuming the worst of Beijing’s intentions can lead to an unwanted and dangerous escalation of tensions.

HONG KONG & MACAO

After US report calls Hong Kong a 'Chinese rather than international city,' gov't slams 'slanders and smears' – HKFP

Hong Kong’s government has “firmly rejected” a report by a US Congressional commission, which said the city now lives under the mainland’s control after Beijing interfered with the judicial system and weakened civil society.

The US-China Economic and Security Review Commission (USCC) submitted its annual report to Congress on Tuesday. Carolyn Bartholomew, its chairperson, said during a hearing that the report was “once again approved unanimously, reflecting the strong bipartisan consensus on US-China policy.”

[…]

The report said Beijing had installed loyal judges and leaders in key positions, leading to “the strictest interpretation” of the security law and its enforcement beyond the city’s jurisdiction. This had caused more Hongkongers to leave, while those who stayed must choose between self-censorship or political and legal risks, the report said.

“As these expats and Hongkongers leave… mainland human capital and investment increasingly dominate Hong Kong’s business environment, cementing Hong Kong’s status as a Chinese, rather than international, city,” the report read.

Artist behind 'freedom' graffiti across Hong Kong pleads guilty to criminal damage – HKFP

Chan King-fai, an artist, appeared at Kowloon City Magistrates’ Courts on Friday for the first time since his arrest nine months ago. The 40-year-old was arrested in February on suspicion of tagging structures and public facilities including buildings, shops, fuse boxes and bridges across Hong Kong Island, Kowloon and the New Territories between January and February.

The graffiti involved the Chinese characters for “freedom” with dollar signs. The tag was spotted in areas including Quarry Bay, Mong Kok and Fo Tan.

According to The Witness, Chan admitted under police caution that the declining economy took a hit on his income and savings, causing him to feel financial pressure. The graffiti was a form of venting his emotions, he said, adding that the tag expressed the importance of financial freedom.

Taiwan's opposition parties fail to agree on a joint candidate for January's presidential election – AP

Taiwan’s two main opposition parties have failed to agree on a joint candidate for president, once again throwing into doubt their ability to unseat the ruling party in January’s election.

The Nationalist Party and the Taiwan People’s Party were expected to unveil an agreed-upon candidate at a news conference Saturday. Instead, they announced the need for further consultations after a disagreement over how to use polling data to make the selection.

The failure to agree on a joint candidate leaves current Vice President William Lai of the Democratic Progressive Party as the frontrunner. He is hoping to succeed President Tsai Ing-wen, who must step down after eight years because of a two-term limit on the presidency.

Biden cautions China on election interference in Taiwan – The Hill

President Biden cautioned China against interfering in Taiwan’s upcoming elections following a meeting with Chinese President Xi Jinping on Wednesday.

“I made clear I didn’t expect any interference,” Biden said in a press conference following the hours-long meeting with Xi.

Taiwan will hold presidential elections in January, casting additional uncertainty around the future of the island’s relationship with China.

Australia should be clear that ‘disagree where we must’ means disagreeing with Beijing on Taiwan – The Strategist

The national-interest case for maintaining peace across the Taiwan Strait is self-evident. But to acknowledge that Australia could disagree with Beijing on its vision for Taiwan’s future as a province of the People’s Republic of China and see meaning for the Australia–Taiwan relationship itself recognises that treating China as a metaphor rather than a real place hasn’t offered a stable context to policy or an enduring way to tell Australia’s modern story.

Canberra could support Taiwan’s membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or a free-trade agreement in Australia’s own trade interests. It could strengthen defence cooperation to be properly prepared for a crisis in the Taiwan Strait. But a first step would be for the government to acknowledge that it is Beijing that threatens Taiwan militarily and diplomatically and shift its phraseology to: ‘Australia opposes any changes by Beijing to the status quo in the Taiwan Strait.’ This is a statement of the kind of region in which Australia wants to into the future and an animating metaphor for the politics and policies needed to sustain it.

Holding Out Hope for Journalism in Taiwan –

Lingua Sinica

As international attention has turned to Taiwan as a possible flashpoint for superpower confrontation, this has brought a wave of new foreign correspondents to the once-neglected nation. For the local fixers who make connections happen, this has brought opportunities, but also frustrations. In our first special feature for Lingua Sinica, journalist Xin-yun Wu explores what Taiwanese can learn from these newcomers — and what they should do to better understand Taiwan.

Biden-Xi meeting: Takeaways from the long-awaited gathering – AP

Xi agreed to help curb the production of the illicit fentanyl that is a deadly component of drugs sold in the United States. A senior administration official, who spoke on the condition of anonymity to discuss a private meeting, said the shift will be a setback for Latin American drug dealers.

[…]

In addition, Biden and Xi reached an agreement to resume military-to-military communications. That means Defense Secretary Lloyd Austin will speak with his Chinese counterpart once someone is named to the job, the official said. Similar engagements will take place up and down the military chain of command.

China-US Fentanyl Agreement Restarts Stalled Cooperative Fight Against Deadly Drug – VOA

U.S. President Joe Biden and Chinese President Xi Jinping agreed earlier this week that Beijing will crack down on companies in China that produce precursor chemicals for fentanyl, an agreement that Biden said would "save lives."

In exchange, the Biden administration agreed to lift sanctions on China's Physical Evidence Identification Center of the Ministry of Public Security and the National Drug Laboratory. In May 2020, the U.S. Department of Commerce sanctioned the lab for allegedly participating in human rights violations against Uyghurs and other ethnic minorities in Xinjiang.

China, which is the source of most fentanyl precursors used in the U.S., argued that U.S. export controls have "severely affected" China's inspection and testing of fentanyl-related substances and impaired its "goodwill to help the U.S. in drug control," according to the spokesperson of the Chinese Embassy in the United States.

Meeting Low Expectations: Analyzing President Biden’s Summit with Chinese President Xi Jinping – Council on Foreign Relations

Xi is seeking a short-term, tactical pause in U.S.-China competition, hoping to buy time so that he can address China’s economic problems. Amidst any stabilization in U.S.-China relations, though, it is important to keep in mind that Xi’s conviction that the United States represents the primary threat to the Chinese Communist Party (CCP) remains unchanged. As Xi assessed in March, “Western countries led by the United States have implemented all-around containment, encirclement and suppression of China.” Xi likely still believes that the United States and the West more generally are in decline, while China is on the ascent; in his now-famous formulation, “the East is rising and the West is declining.” So long as these views remain fixed, the bilateral relationship will be marked by increasingly severe competition with periodic tactical pauses.

Making this judgment about the likely trajectory of U.S.-China relations, though, is not to say that a meeting between Biden and Xi was ill-advised. To the contrary, it should be seen as a positive development. Given China’s political system and the degree to which Xi has consolidated power, it is critical for the U.S. president to have direct, lengthy interactions with him. This provides an opportunity to get a better feel for how Xi sees the world and China’s place in it, directly convey U.S. concerns, and underscore commitment to U.S. alliances and partnerships.

Don't Expect U.S.-China Relations to Get Better – The Atlantic

The problem facing Xi is that his words don’t match his actions. Just days before the dinner with American CEOs, Beijing’s finance ministry proposed extra cybersecurity checks on accounting firms dealing with Chinese corporate data—the latest in a series of security-obsessed measures that have spooked foreign business. The same is true in Xi’s foreign policy. China’s leader continues to deepen ties to Iran, which supports Hamas and other destabilizing groups in the Middle East. When Biden pressed him to use this influence to try to prevent the current Gaza crisis from escalating into a regional war, Xi appeared noncommittal.

If Xi wants American cooperation and American cash, he’ll have to do much more than chitchat. Restoring trust will require real changes in policy—among them, returning to market-oriented economic reform, distancing China from Russia, and working with Washington to ease crises in Ukraine and Gaza. Because he is unwilling to make such changes, Xi will depart San Francisco largely empty-handed. He failed to get the relief he sought from U.S. exports controls and sanctions that are biting the Chinese economy.

Xi’s attempt to charm at the Golden Gate is therefore unlikely to be more than a temporary expedient, meant to stabilize relations at a moment of need while keeping the long-term goal—a China-centric world—clearly in view.

Summing Up the Biden-Xi Summit by Richard Haass – Project Syndicate

US-China relations remain an issue to be managed, not a problem to be solved. Expecting anything else from the summit was to expect too much. The world’s most important bilateral relationship continues to be a highly competitive one, and the challenge remains what it was prior to the summit: to ensure that competition does not preclude selective cooperation or give way to conflict.

The lost opportunity of the Biden-Xi meeting – Responsible Statecraft

The Biden-Xi meeting was arguably a lost opportunity to open the door toward a more genuinely stable and productive long-term Sino-American relationship. At best, it has temporarily slowed the pace toward more contention and possibly conflict, especially over Taiwan. Lacking the will and political courage to take the hard, risky steps that could put relations on a sound footing over the longer term, the two presidents opted for “small beer,” in the form of a few soothing words and limited agreements.

What Do US Indo-Pacific Allies Think of the Biden-Xi Summit? – The Diplomat

Australia, Japan, South Korea, the Philippines, Taiwan, and the United States have all adopted the “free and open Indo-Pacific” and “rules-based international order” mantras – both diplomatic code for “let’s counter China’s bad behavior.” They have embraced, albeit at times reluctantly, U.S.-led economic measures designed to target China’s access to cutting-edge technology and “de-risk” by reconfiguring trade ties away from China wherever possible.

They have also joined the U.S. in efforts to counter China militarily. Australia, the United Kingdom, and the United States launched AUKUS, a new trilateral alliance widely seen as a response to China’s growing military might. Japan and South Korea have been deepening both bilateral and trilateral military cooperation with the United States. The Philippines too has expanded its already-tight military partnership with the U.S. And Taiwan has seen stepped-up arms sales from Washington, as well as more overt military cooperation (although still falling far short of the bilateral drills that characterize a formal alliance).

Given these convergences, all the name of countering China, how are U.S. allies viewing the Biden-Xi summit?

For the most part, positively. Nearly every country in the world – U.S. allies included – has deep concerns about China-U.S. tensions reaching a point of no return, and potentially sparking a great power war. While their alliance (and in Taiwan’s case, quasi-alliance) relationships with the U.S. mean they have effectively already “chosen sides,” none of these countries wants to be forced to entirely write off its relationship with China. In that sense, any progress in China-U.S. relations is both welcome and a relief.