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China Hit Back after U.S. Announced Sanctions against Hong Kong Officials

The U.S. government issued a Hong Kong Business Warning for the first time, reminding U.S. companies to be alert to the risks caused by the implementation of the Hong Kong National Security Act. Washington also announced sanctions against seven deputy directors of the Hong Kong Central Liaison Office. Beijing and Hong Kong then quickly hit back.

On July 16, the .US. Departments of State, Treasury, Commerce, and Homeland Security jointly issued a Hong Kong business advisory, “Risks and Considerations for Businesses Operating in Hong Kong.” It warned the U.S. companies operating in Hong Kong that they are subject to the laws of Hong Kong, including the National Security Law. So far, some foreign nationals have been arrested, including one U.S. citizen.

The advisory reminded companies that those operating in Hong Kong could “face the risks associated with electronic surveillance without warrants and the surrender of data to the authorities.” It stated that, “individuals and entities should be aware of the potential consequences of certain types of engagement with sanctioned individuals or entities” and warned them that, “Businesses operating in Hong Kong may face heightened risks and uncertainty related to retaliation from the PRC (People’s Republic of China) against companies that comply with sanctions imposed by the United States and other countries, including through enforcement of the Countering Foreign Sanctions Law.”

At the same time, the U.S. Treasury Department announced sanctions against the seven deputy directors of the Liaison Office in Hong Kong and added them to the Treasury’s “Specially Designated Nationals and Blocked Persons List.” Earlier, the U.S. had announced sanctions against 11 Chinese and Hong Kong officials, including Hong Kong Chief Executive Carrie Lam and Liaison Office Director Luo Huining, for damaging Hong Kong’s autonomy. The assets of those on the sanctions list have been frozen.

In the statement that Secretary of State Blinken issued, he stated, “I am committed to continuing to work with Congress and our allies and partners around the world to stand with the people in Hong Kong against [China’s] egregious policies and actions.  …  We will continue to call on the PRC to abide by its international obligations and commitments; to cease its dismantling of Hong Kong’s democratic institutions, autonomy, and rule of law; to release immediately and drop all charges against individuals unjustly detained in Hong Kong; and to respect the human rights of all individuals in Hong Kong.”

The Liaison Office of the Central Committee of Hong Kong countered with a statement calling the U.S. sanctions a piece of wastepaper and an attempt to disrupt Hong Kong’s economic growth after its political failure. The statement also emphasized: “The sanctions imposed by the United States on our officials have no meaning other than making us despise those politicians and encourage us to fight for our national interests.”

The Chinese Ministry of Foreign Affairs Office in Hong Kong and the Hong Kong Special Administrative Regional Government also issued statements calling the sanctions bully’ behavior which violates international laws and interferes with China’s domestic affairs. Chinese official media followed suit and published a series of anti-U.S. commentaries.

Source: Deutsche Welle, July 17, 2021美国制裁中联办官员-中方废纸一张/a-58297941

Tight on Cash? Local Municipalities Ordered Civil Servants and Teachers to Return Bonuses They Received

In May of last year, Chinese Premier Li Keqiang stated in the government work report that governments at all levels must maintain a tight budget and the central government must take the lead to cut back 50 percent of non-essential expenses. Even though there is no further indication that the central government is taking any action, ordinary civil servants and teachers have been the first to take the hit.

Recently civil servants and school teachers in Henan, Jiangxi, and Guangdong provinces have received orders to give the performance bonuses they received back to the government. On July 7, the Water Authority of Nanchang City, Jiangxi Province issued a document stating that, according to relevant regulations, bonuses issued after June 7, 2021, must be returned within ten days. On the same day, the Dexing City Government required all teachers to return the merit bonuses they recently received. Teachers in Dexing City received 20,000 yuan (US$3,092) in the first quarter of this year. They expect to receive 80,000 yuan (US$12,367) in total bonuses this year plus a year-end bonus. These bonuses are usually higher than their annual salary.

Postings on Weibo showed that civil servants in Shanghai, Jiangxi, Henan, Shandong, Chongqing, Hubei and Guangdong provinces have also had their future bonuses suspended and they must return previously issued bonuses. On July 3, Chaozhou City, Guangdong Province, issued a notice that their housing subsidies and merit-based bonuses will be suspended. Three days later, Shanwei City followed suit. Meanwhile Shenzhen City is compiling reports on the income its employees received in recent years. For the first quarter this year, Shanghai also stopped giving out bonuses .

At present, most local level civil servants, and elementary and other school teachers make monthly salaries ranging from 2,000 to 4,000 yuan (US$309-618). Most of their childcare and mortgage expenses are paid from these various subsidies and performance bonuses. Many of them will have a hard time making their ends meet. Jiujiang Bank in Jiangxi Province even launched a bank loan to provide people who are not able to pay back the bonus they received.

In the first half of last year, China’s fiscal deficit went up by 30 percent and local municipal debt grew by 34 trillion yuan (US$5 trillion). Official reports showed that 30 out of the 31 provinces and cities in the country have a fiscal deficit. Shanghai is the only city with a fiscal surplus. Provinces such as Henan, Sichuan and Yunnan have deficits of more than 250 billion yuan (US$39 billion).

Source: Radio Free Asia, July 12, 2021

Beijing Cracks Down on Chinese Companies Seeking Foreign IPOs

On July 10, the China Cyber Space Administration published a draft version of a new data security law. It asked the public to provide feedback by July 25. The new law requires that Chinese companies seeking to list in foreign countries must first pass a cyber security review.

The statement stated that companies with a data base of over 1 million users must apply for cybersecurity approval before listing in other countries. The reason is that the data and personal information might be “influenced, controlled and abused by foreign governments.” The review includes an evaluation of the potential national security risks of the company’s overseas initial public offering (IPO).

According to data from Bloomberg News, 37 Chinese companies have been listed in the U.S. They raised a total of $12.9 billion this year.

As early as three months ago, Chinese authorities requested Didi Chuxing, the Uber of China, to postpone its IPO in the US. Despite inconsistent orders from various agencies, Didi Chuxing moved forward with its listing plan on June 30. On July 2, Beijing ordered a cyberspace security inspection on DidiChuxing and banned the new users from signing up. On July 9, 29 Didi Chuxing Apps were taken down online. All these measures are considered to be Beijing’s deliberate retaliation against companies that don’t follow its order. According to Didi Chuxing financial disclosure, in the first quarter of 2021, it had 156 million active users and an average daily transaction volume of 25 million in China while it had 493 million active annual users and 15 million active drivers annually worldwide.

On July 8, a number of companies withdrew their IPOs from the New York Stock Exchange including LinkDoc Technology, a medical data solutions and oncology big data service provider; Keep, a modile fitness company, and Meicai, a food delivery firm.

The new law could push more Chinese Internet companies to list in Hong Kong, rather than listing in other countries, in order to bypass such scrutiny.


1. Epoch Times, July 10, 2021
2. Central Cyberspace Affairs, July 10, 2021

Global Times Chief Editor: the Taliban and China Are Friends

On July 9, the Taliban spokesman stated that they have made territorial gains and secured 85 percent of the region in Afghanistan. They also see China as a friend and welcome China to return to invest in Afghanistan. In response to the comment, Hu Xijin, the Chief Editor of Global Times, published a post on weibo boasting that the Taliban and China are friends.

Hu wrote in the post: “Now you understand how stable and powerful China’s diplomacy is. The United States has been fighting in Afghanistan for 20 years. More than 2,000 soldiers have been killed. It cost the U.S. one trillion U.S. dollars. The Taliban sees the U.S. as an enemy, and the Afghan government sees the U.S. as a selfish escapee. China’s approach, however, makes us friends with both Kabul and the Taliban. What’s important is that we will always be friends with Afghanistan.”

People posted comments trashing Hu’s post. One person wrote, “Who agrees that you and the Taliban are friends?” “Are we at a point that we need to be friends with the Taliban and use it as an achievement to show off?” “My views of the world, life and values are completely destroyed.” “Do we have no friends?” “It turns out that terrorists are also politically correct. Those who commit so-called terrorist attacks in Hong Kong must be killed without mercy! Meanwhile, Taliban terrorists can be friends. As a person and a country, you really have no bottom line. ”

Source: 163.Com, July 12, 2012

RFA: CCP to Build Grassroots Governance and Abandon Grassroots Democracy

According to Xinhua News, the Central Committee of the Chinese Communist Party issued a new directive to build grassroots government organizations. It no longer talks about expanding grassroots elections and other democratic autonomy mechanisms. Instead, it emphasizes the party’s comprehensive re-engineering of grassroots organizations as well as the implementation of tight control over them.

The “Opinions of the Central Committee of Chinese Communist Party and the State Council on Strengthening the Modernization of the Grassroots Governance System and Governance Ability,” included 7 major sections. It included overall requirements, improving the party’s overall leadership of the grassroots governance system, and strengthening the governance capability of grassroots political power. It also detailed 27 items, emphasizing the use of artificial intelligence and other modern scientific and technological information methods to strengthen the party’s overall control over grassroots government organizations, enhance organizational mobilization capabilities, and completely abandon the grassroots democratic experiments which have been carried out over the past two decades.

The document emphasizes “adhering to the party’s overall leadership of grassroots governance and enabling the party’s leadership to run throughout the entire process and all aspects of grassroots governance.” It also states that it plans to take about five years to establish a grassroots governance system with unified leadership of the party organization and use another 10 years to finish the modernization of the grassroots governance system and governance capabilities.

Source: Radio Free Asia, July 11, 2012

Chinese Communist Party Claimed 95 Million Members But Majority Joined for Personal Interests

The Central Committee Organization Department of the Chinese Communist Party announced that the total number of communist party members has exceeded 95 million while there are 4.864 million grassroots party organizations nationwide. The truth is, however, that anyone who wants to work for the government or as a public official must first join the party. The majority of the people who joined the party did so for their personal interests, not because of their belief in the communist ideology. Many college students who applied for party membership did so while they were still in school.

The statistics show that 23.677 million party members are aged 35 and below, accounting for 24.9 percent of the total number of party members. There are 49.513 million party members with college degrees or above, accounting for 52.0 percent of the total number of party members.

At the same time, the vast majority of criminal cases in China in recent years are related to corruption and bribery. Many of them are high-ranking officials. According to the official reports, from December 2012 to May of this year, the disciplinary inspection and supervision organs filed and investigated 392 officials who were at or above the provincial and ministerial level, 22,000 at the department and bureau level, more than 170,000 at the county department level, and 616,000 at the township department level.

Source: Radio Free Asia, June 30, 2021

Central Commission for Discipline Inspection: Communist Party Followers Can Never Betray the Party

Days prior to the 100th anniversary of the communist party, the Central Commission for Discipline Inspection published an article and reminded the communist party members that they must never betray the party.

On June 19, the Central Commission for Discipline Inspection published an article. Nearly two-thirds of the article was about Gu Shunzhang who is a former security chief and alternate member of the Political Bureau. In 1931, he betrayed the communist party and was arrested. Then in 1935 he tragically died in prison. The article stated that “Never Betray the Party is not just an oath; it is also a political red line.” It reiterated that the party members must display loyalty to the party and that they must unite around the party and never rebel against the party.

The official media also reported that, during his recent visit to Qinghai Province, Xi Jinping told the party members to be loyal to the party. Xi even personally led dozens of officials to a historical exhibition hall to swear to the party oath and pay allegiance to the party.

1. Central Commission for Discipline Inspection, June 19, 2021
2. Xinhua, June 19, 2021

CGTN Recruits Foreigners to Be Pro Beijing and to Promote China

China Global Television Network (CGTN) launched a plan to recruit foreign students and social media Vloggers (someone who creates short films recording thoughts, ideas or opinions and posts them on the Internet) to be pro-Beijing media promoters. According to the British media The Times, CGTN was suspended in the UK this February. It launched a “media challengers” campaign in April “to recruit internet influencers and Vloggers globally. Some of those recruited will promote China and counter western narratives that damage China’s image.” Successful applicants can receive a bonus of up to 10,000 U.S. dollars and get a part-time or full-time job on CGTN. The Times found that at least six students from the University of Leeds and one student from the University of Manchester had signed up.

This is part of the effort that Beijing wants to use to neutralize its wolf-warrior diplomacy by using western faces to tell the “China Story” to the West. Xi Jinping recently stated that he wants to build a credible, lovable and respectable image of China. On May 31, he told the members of the Political Bureau that China should make great efforts to strengthen its international communication capabilities, build a strong talent team, improve the art of communication, and expand its circle of friends in the global media.

Beijing has made a heavy investment in infiltrating foreign media. According to documents disclosed by the U.S. Department of Justice last month, China Daily invested more than $1.6 million in advertising expenses in The Times, The Los Angeles Times, The Financial Times, and Foreign Policy. They paid $1 million to newspapers such as the Chicago Tribune and the Houston Chronicle to print the China Daily publications.

On YouTube, Lee Barrett and his son Oli Barrett own a channel with 2.7 million followers. They often praise China on key issues among Beijing’s propaganda list including poverty alleviation, infrastructure, Huawei, and ethnic relations. Jason Lightfoot is a British vlogger and often appears as a guest speaker on CGTN. In addition to Barrett and his son, David Dumbrill, a Canadian who runs a beer hall in Shenzhen, and Raz Galor, an Israeli, all went to Xinjiang and claimed that there was no forced labor there.

Source: Radio Free Asia, June 17, 2021