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Briefings

Mainland Media Issued Apology for False Reporting of Meng Wanzhou Trial

Jiemian.com, a mainland online news media published a false report about Meng Wanzhou’s trial and had to retract the news and issue an apology. On May 27, the judge for British Columbia’s Supreme Court in Vancouver ruled that Meng Wanzhou, the former Huawei Chief Financial Officer met the threshold of double criminality and the U.S. extradition case would move forward. This means that after being confined for 544 days to her residence in Vancouver, Meng remains under house arrest. Ironically Jiemian.com, a financial news website in China, published an article at midnight on May 26 saying that Meng was acquitted and could return home in four days. The article was widely distributed in China for 12 hours until it published an apology and retracted the news. The court result of Meng Wanzhou drew heated discussion over the internet and made it the top search listed on Weibo. At the regular press conference on May 26, Zhao Lijian, spokesperson for the Ministry of Foreign Affairs, repeated the demand to free Meng in order to avoid further damage to Canada-China relations.

Source: Epoch Times, May 28, 2020
https://www.epochtimes.com/gb/20/5/28/n12142060.htm

Supreme Court Report Boasted that China’s Business Environment Ranking Improved; the Quality of Judicial Procedures Ranks at the Top in the World

According to The Paper, on May 25, in the speech given at the National 13th National People’s Congress, Zhou Qiang, the president of the Supreme People’s Court, gave a report which summarized the department’s work. The report referenced the “Doing Business 2020” report that the World Bank issued. That report “measured the regulations that enhance business activity and those that constrain it.” Zhou’s report mentioned that China introduced a law to enforce business contracts, made resolving insolvency easier, and improved the transparency and predictability of the judiciary system. It also stated that the number of legal cases the court processed relating to business helped to re-enforce the fact that China is governed by the rule of law. Zhou claimed that the index from the report stated that the rank of China’s business environment has improved considerably, that the quality of the judicial procedure ranks at the top in the world,  and that China is the “World’s Best Practitioner.”

Source: The Paper, May 25, 2020
https://www.thepaper.cn/newsDetail_forward_7544167

China Won’t Set a GDP Growth Target

On May 22, the third session of the 13th China’s National People’s Congress was held in Beijing. Chinese Premier Li Keqiang delivered a government work report, stating that China will not set a GDP growth target for 2020. For the first time since setting economic growth targets in 1994, China will not set a specific target for annual economic growth. Li Keqiang explained, “[M]ainly because of the great uncertainties of the global pandemic situation and the economic and trade situation, China’s development is facing some unpredictable factors. This will help guide all parties to focus on the “six stabilities” (stabilizing employment, finance, foreign trade, foreign investment, domestic investment, and expectations), and “six protections” (protecting the employment of residents, basic livelihood, market players, food and energy security, supply chains in the industrial chain, and basic-level operations)

The government work report announced that China will issue 1 trillion yuan in government bonds for COVID-19 control.

Source: BBC Chinese, May 22, 2020
https://www.bbc.com/zhongwen/simp/business-52766866

A Chinese City to Implement Permanent “Health Barcode”

Hangzhou, a Chinese city 100 miles southwest of Shanghai, plans to launch a permanent “health barcode,” a system that monitors people’s health real-time and establishes a personalized index based on a number of indicators. Local media report that a score between zero and 100 will be given after reading personal medical records, physical examination results, and lifestyle management data. The program is considered an expansion of the current nationwide health code program, launched in February, to track potential infections and close contacts of the new coronavirus. An official infographic shows individual scores that are presented in different colors. A low score is displayed in purple or red, and the higher scores are in green.

Factors that affect the score include exercises, alcoholic drinking, smoking and sleep. For example, drinking 200 ml of alcohol resulted in a drop of 1.5 points, and smoking 5 cigarettes led to a drop of 3 points. In contrast, walking 15,000 steps earned 5 points.

The city’s health department said it planned to complete the project in May or June, but did not disclose how the personal information would be collected.

The ambitious program, however, did not win public opinion. The news has caused an uproar on social media. A large number of netizens consider the collection of health data a violation of privacy and may also lead to discrimination. Someone commented, “What should I do if I am asked to show the health code when I look for a job?” In a poll on Weibo, 6,020 out of the 7,000 who were questioned chose not to support it.

After the outbreak of the corona virus, every Chinese province began to implement its own health code system. This system is mainly based on China’s two main applications: Tencent’s WeChat and Alibaba’s Alipay. In May this year, the authorities announced a nationwide unified health code system. Chinese media report that the health code requires the users to declare information including their real name, gender, mobile phone number, and address. It also integrates air, railway, highway, and public transportation data, as well as telecom operators and payment data with banks and financial institutions.

Today, in most parts of China, entering and leaving communities and buildings requires that each person show a green-colored health code, an indication of no infection. The system is believed to play an important role in tracking the chain of transmission of the virus. At the same time, the massive collection of personal data has caused widespread concerns about the infringement on privacy.

Source: BBC Chinese, May 26, 2020
https://www.bbc.com/zhongwen/simp/chinese-news-52805052

Epoch Times: Mainland to Target Hong Kong Education System by Deploying Mainland Teachers to Hong Kong

The Hong Kong Security Law has been extremely controversial in Hong Kong and in the international community. One of the clauses in the Security Law requires the Hong Kong government to carry out a “national campaign to promote national security education.” In fact, Beijing has already been implementing “patriotic” brainwashing education in Hong Kong for years. The public records show that, as early as 2005, the mainland sent educators to Hong Kong to provide teaching guidance under the project called the “Mainland and Hong Kong Teacher Exchange and Collaboration Program,” The Hong Kong Education Development Fund financed the program. Each provincial capital in the mainland will take turns to send teachers to Hong Kong.

A recent notice that the Hunan Provincial Department of Education issued showed that teachers from local primary and secondary schools as well as kindergartens will be selected to go to Hong Kong and Macao for a one-year assignment of teaching and guidance on the condition that they have a firm political position, support the “one country, two systems ” policy, and love the country. According to the notice, during their stay in Hong Kong and Macau, the Hong Kong Education Bureau and the Macau Education and Youth Bureau will provide a living allowance and teaching and research fees of no less than 30,000 Hong Kong dollars (US$ 3,870) per month and will help with accommodation arrangements or provide rent subsidies. Their specific work will include “assisting” Hong Kong’s primary and secondary schools to “promote school-based curriculum development” and collaborate with teachers from Hong Kong kindergartens, and primary and secondary schools on “teaching research.” After this news came out, the link to the relevant report of the Hunan Provincial Department of Education was deleted.

In May 2019, the Hainan Provincial Department of Education issued a similar notice. The notice required that the teaching candidate must “have a firm political position and support the central administration’s policies and policies concerning the work of Hong Kong and Macao; and must be members of the CCP.”

In 2015 and 2016, the Shanxi Provincial Department of Education sent their teachers to Hong Kong. The candidates’ selection requirements were the same. They placed “possessing high ideological consciousness” at the top. They also stated that the Education Bureau of the Hong Kong Special Administrative Region will provide a monthly living allowance and teaching and research expenses of about 20,000 Hong Kong dollars (US$2,580) per month.

Beijing has always believed that the main reason that Hong Kong youths have continued to persevere and have resisted the mainland for many years is due to a lack of “patriotic education” and a “low communist ideology consciousness.” Therefore it has been trying to “reform” and influence the Hong Kong education system.

In 2012, Beijing led the Hong Kong government to launch a national education plan, distributing a booklet on the “China Model” to all primary and secondary schools in Hong Kong. The booklet praised China’s national conditions and called the Chinese government a “progressive, selfless and united ruling party.” It also described the American democratic system as a system in which political parties battle with each other and people’s livelihoods suffer as a result of it. The campaign drew criticism from all parties as being a brainwashing tool. In the end, this caused the rest of the planned courses to be suspended.

Source: Epoch Times, May 25, 2020
https://www.epochtimes.com/gb/20/5/25/n12135946.htm

Huawei Placed Emergency Order with TSMC

Chinese technology news site Moore recently reported that the Taiwan Semiconductor Manufacturing Company (TSMC) received a US$700 million emergency order from Huawei on May 18. However, sources from Japan said TSMC has refused that order. TSMC is the world’s largest chip-maker and manufactures most of Huawei’s critical high-end chips. On May 15, the U.S. Department of Commerce released new regulations on approval requirements for manufacturers using U.S. technologies. The new rules will effectively ban any suppliers from helping Huawei. TSMC just reached an agreement with the U.S. government and announced a plan to construct a new cutting-edge 5nm chip manufacturing facility in Arizona. The Chinese government has already threatened retaliation against U.S. high-tech companies.

Source: Moore, May 19, 2020
http://news.moore.ren/industry/223474.htm

HKET: Polls Showed Strong Canadian Public Opinion against China and Huawei

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that, based on the latest polls conducted by the Angus Reid Institute, the number of Canadians with positive views about China reached a record low. Among the 1,518 people surveyed, only 14 percent viewed China positively. The same number was 29 percent six months ago. Around 85 percent of the sample expressed the belief that the Chinese government was not honest on reporting the status of the coronavirus. The poll also showed that 78 percent of the people were against allowing Huawei into Canada’s 5G network. At the same time, 88 percent said China could not be trusted on human rights and the rule of law. Only 11 percent of the people now believe Canada should focus on trading with China. This poll was designed to find out the Canadian public’s view about twelve key countries that are important to Canada. Ever since the Chinese government arrested Canadian citizens Michael Kovrig and Michael Spavor, plus sentencing Robert Lloyd Schellenberg to death, the Canadian public’s view on China has rapidly turned negative.

Source: HKET, May 14, 2020
https://bit.ly/2Ty0dxb

Escaping Nasdaq – Chinese High-Tech Heavy-Weights Prepare Plan B

Well-known Chinese news site Sina recently reported that, with the recent success of Chinese high-tech leader Alibaba going public on the Hong Kong Stock Exchange (HKSE) for the second time, key Chinese high-tech companies are coming up with Plan B to face the high probability of being kicked out of the U.S. stock markets, mainly Nasdaq. Luckin Coffee’s latest scandal story about accounting fraud served as the last straw that pushed U.S. senators to propose regulations to delist Chinese companies traded on U.S. stock exchanges, due to their lack of transparency. The Chinese search engine leader Baidu (Nasdaq listed since 2005), though it denied it publicly, is actively preparing to withdraw from the U.S. market for the HKSE. Jing Dong (JD.com), NetEase and CTrip are all looking at IPOs or re-IPOs in Hong Kong. The planning even started in January. Nasdaq has been strengthening its restrictions on reporting requirements for foreign companies, especially audit requirements to align with international accounting standards. The U.S. Senate’s recent passage of the Holding Foreign Companies Accountable Act sent a very strong signal to drive Chinese companies out of all U.S. stock markets, though China’s name was not mentioned. Currently there are around 200 companies that this new act may impact if it also passes the House.

Source: Sina, May 22, 2020
https://finance.sina.com.cn/roll/2020-05-22/doc-iircuyvi4458096.shtml

China Pumps US$22.5 billion into its Chipmaker SMIC

Semiconductor Manufacturing International Corporation (SMIC), headquartered in Shanghai and incorporated in the Cayman Islands, is a Chinese semiconductor foundry company. On May 15, the Hong Kong-listed chip maker announced that two China state-backed funds injected a total of US$22.5 billion into its wafer factory that will help SMIC produce advanced chips.

As the Trump administration has moved to block global chip supplies to blacklisted telecoms equipment giant Huawei Technologies, which is gradually shifting its own wafer design and production from Taiwan based TSMC to SMIC in response to the possibility of more restrictive measures, China is betting the local chip foundry can help reduce the country’s reliance on US technology.

The plant has the capacity to produce 6,000 14-nanometre wafers a month and plans to boost that to 35,000. After the capital infusion, the SMIC plant’s registered capital jumped from US$3.5 billion to US$6.5 billion. The chip maker’s stake in the facility will drop from 50.1 per cent to 38.5 per cent, according to the company.

Source: Central News Agency, May 17, 2020
https://www.cna.com.tw/news/acn/202005170185.aspx

China’s Spy Activities in Belgium

The State Security Service, the Veiligheid van de Staat (VSSE), a Belgian state intelligence agency, recently spoke out about China’s spy activities in the military and scientific arena posing threats to EU security.

In October 2019, Belgium declared Song Xinning, the Confucius Institute president of the Free University of Brussels (VUB), as persona non grata, revoking his visa and banning his entry into the 26 European Schengen states for 8 years. During his ten-year tenure at VUB, Song had engaged in espionage activities for the Chinese Communist Party (CCP) and was regarded as “sabotaging national security.”

“As part of the ambitious ‘Made in China 2025’ project, which provides for rapid development of know-how in China itself, all available means must be used to import as much knowledge as possible into China,” the VSSE told the EUobserver, a not-for-profit online newspaper based in Brussels, when it was describing China’s goal of siphoning information from abroad. “These include formal knowledge transfer programmes, such as exchanges between researchers, joint ventures, and takeovers of companies. In some cases, China also does economic espionage.”

On May 7, the EUobserver disclosed some details of some confidential VSSE reports dated from 2010 to 2016, which stated that Chinese spies have targeted Belgian biological warfare and vaccine experts, British pharmaceutical giant and vaccine-maker GlaxoSmithKline (GSK) in Belgium and Belgian high-tech firms.

VSSE is also concerned about the China Belgium Technology Centre (CBTC), a Chinese-funded “smart valley” in Louvain-la-Neuve. It houses 23 Chinese and Belgian firms in the life sciences, IT, and high-tech manufacturing sectors, and will house up to 800 Chinese high-tech specialists and entrepreneurs when it is completed in late 2021. “And even if the CBTC itself was not a front for Chinese intelligence, it could be used by the MSS (Ministry of State Security) as a back door in the future, the VSSE warned.”

On May 15, the French newspaper Le Monde,  also reported on long-held VSSE suspicions that Chinese intelligence had installed surveillance equipment in Malta’s EU embassy in Brussels in 2007, when a Chinese firm renovated the building.

Source: Radio Free Asia, May 15, 2020.
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/cl-05152020125714.html
EUobserver, May 6, 2020
https://euobserver.com/science/148244