Skip to content

China Times: Chinese Investments in Silicon Valley Dropped Sharply in 2018

Major Taiwanese newspaper China Times recently reported that, as the China-U.S. trade war intensifies, Chinese capital that used to flow continuously into U.S. high-tech companies, in 2018 started to see a dramatic decline. According to Forbes, last year China invested a total of around US$2 billion in the U.S. high-tech field. That was an 80 percent drop from 2017. More and more U.S. start-up companies are avoiding Chinese investments since many U.S. investors are concerned about the additional risks that these Chinese partners may bring to the venture. The Canadian detention of Huawei CFO Meng Wanzhou could further cool down the willingness of Chinese investors. According to several experts monitoring the trade war, in the long run, the conflicts in trade will not have a major impact on business activities between China and the Silicon Valley. However, all experts agreed that the era of close cooperation between China and the United States is over.

Source: China Times, February 2, 2019
https://www.chinatimes.com/cn/realtimenews/20190202001605-260409

FBI Detained Chinese Engineer for Stealing Apple Intellectual Property

Well-known Chinese news site Tencent News recently reported that the FBI detained a second Chinese engineer (Chen Jizhong), who worked at Apple, for stealing classified information on Apple’s self-driving car technology. A further search found more unauthorized photos in Chen’s hard disk. Chen admitted that he planned to return to China and work for Xiaopeng Automobiles, a Chinese smart car manufacturer. Xiaopeng later commented on the story and said the company had never interviewed this individual. Last July the FBI arrested another Apple Chinese engineer (Zhang Xiaolang) for stealing self-driving car information. Zhang did join Xiaopeng Automobiles. Xiaopeng later refused to acknowledge that they had any awareness of Zhang’s illegal activities. According to the FBI, Apple confirmed that the materials Chen stole would have been “extremely damaging” if handed to competitors. Apple’s self-driving car team suffered quite a few setbacks in the past and Apple has laid off many people.

Source: Tencent News, January 31, 2019
https://new.qq.com/omn/20190131/20190131A0BZJV.html

The Author of Bloody Red Land: Violence in Chinese Communist Party’s Land Reform; Passed Down through Today

Around Chinese New Year, a new book:

  • The Bloody Red Land – a Collection of Interviews on the Chinese Communist Party’s (CCP’s) Land Reform was published outside of  China. The author, Tan Song, a former professor at Chongqing Normal University, is now living in exile in Los Angeles. Tan was expelled from school in 2017 for conducting research on and publicizing the truth about the history of the CCP’s land reform. Over a period of 14 years, Tan interviewed over a hundred Sichuanese who had personally experienced the land reform that took place between 1950 and 1952. Radio Free Asia interviewed Tan on his new book.

The last question the reporter asked was, “What do you think is the main purpose of the CCP’s launch of land reform, what are the methods it used, and what kind of impact has it had on China today?”

Tan replied, “To put it simply, one purpose was to have the people of China, that the CCP just conquered, submit themselves to the rule of the party. The CCP handed out both favors and terror. The favors had to do with the land they gave. Where did the land come from? They did not have either. They would grab it from the landlords. A large number of farmers were thus grateful to this regime. At the same time, it made them scared. The land reform movement was a violent movement and a very bloody movement.”

“There was another purpose. The CCP needed money too much. The CCP took away the landlords’ assets, mainly gold, silver, and treasures. This solved a major financial problem and these were not distributed to the farmers.”

“At the same time, the land reform strengthened the CCP’s rule over the countryside. It established CCP branches in every remote mountain village.”

“The CCP also fulfilled the purpose of eliminating the carrier of the traditional Chinese culture in the countryside – the country gentlemen. The reason was that it needed the Marxist-Leninist culture to govern the countryside.”

What is the relationship between land reform and today’s China? Tan observed, “I think this is the best question and best research topic. In fact, the methods of land reform are basically the same as what it uses today. In the land reform, three methods were used: deception with lies, violent suppression, and buying off with material interest. These three methods are still in use today. There has been no change. The brutal methods in the land reform have been passed down. You can see this from the Cultural Revolution and the suppression of Falun Gong. These cruel and inferior methods are in the same vein and have not changed. Moreover, its nature of robbing the riches from the landlords and distributing their property has not changed at all.”

Source: Radio Free Asia, February 8, 2019
https://www.rfa.org/mandarin/yataibaodao/shehui/yl-02082019115356.html

Chinese Commentator on the CCP’s Fear

Yuan Bin is a regular commentary writer for the Epoch Times Chinese. He recently wrote two articles commenting that the Chinese Communist Party (CCP) has recently been having intensified fear for the regime’s future.

On February 3, Yuan commented on Xi Jinping’s speech marking the 40th anniversary of former Chinese leader Deng Xiaoping’s decision to “reform and open up.” Xi used a term which is unusual. The term was “unimaginable perils and dangers” to describe what the CCP currently faces. Time Magazine called that sentence a key note in Xi’s speech and translated it as, “Every step in the course of reform and opening up is not easy, and we will face all kinds of risks and challenges, even some unimaginably rough waves.”

Yuan suggested that the term “unimaginable” had three meanings: One, even the CCP does not know how big the risk  of those “rough waves” is and how severe their effect will be. Two, the CCP does not know when the “rough waves” will arrive. Three, the CCP does not know what form the “rough waves” will take. “The ‘rough waves’ are already very scary for the CCP. It is even more scary to the CCP that it cannot accurately predict them.”

On February 4, Yuan commented in the news that, on February 1, Xi Jinping visited the joint combat command center of the Beijing Public Security Bureau (Police Department). Yuan indicated that it is the CCP’s convention that its officials will visit some places during the Chinese New Year (February 5 this year), to show that they care about the people. However, which places they visit conveys a very important political message. Normally they are the regions or industries on which the CCP wants to focus.

In the six previous years, Xi visited a different province each year. This year was abnormal. Xi stayed in Beijing instead and visited the police station. Yuan viewed this as a clear political message that the CCP is going to strengthen its rule of the country via the police system. The CCP’s focal point for this year is stability. Recently, the government also increased police officers’ salaries by 38 percent.

Yuan observed, “However, the more the CCP relies on the police, the more it strengthens its rule of the country via the police system, the more it demonstrates how unstable the regime is, the more severe the crisis is that it faces, and the closer the day is that it will fall!”

Sources:
1. Time Magazine, December 20, 2018
http://time.com/5483541/xi-jinping-china-speech-deng-anniversary/
2. The Epoch Times, February 3, 2019
http://www.epochtimes.com/gb/19/2/3/n11021568.htm
3. The Epoch Times, February 4, 2019
http://www.epochtimes.com/gb/19/2/4/n11023125.htm

Zhou Yongkang’s Daughter-in-law Complained about the CCP’s Human Rights Violations

Zhou Yongkang is China’s former  security Czar. He ruled the country using a brutal police control system. During his time, many human rights violations and many tragedies occurred. In 2014, Xi Jinping took him down on corruption charges because of his failed plot to overthrow Xi. His son, Zhou Bin, was also arrested on corruption charges.

Recently, Zhou Bin’s wife, Huang Wan, sent two tweets stating that she had not seen her husband for two months and reflected on the harm that Zhou and the communist regime inflicted on the Chinese people.

On January 31, Huang tweeted, “I have not seen my husband for two months. Here (in China), there are too many women who cannot see their husbands: human rights defenders, attorneys, businessmen, or officials. … The Chinese New Year is coming, but I cannot see my husband. Is he safe? Is he still alive? I don’t know. Some people have threatened me that it will not be good for me if I speak out. Ha-ha! My husband is Zhou Bin. His father is Zhou Yongkang.”

On February 2, Huang tweeted again, “As a family member of Zhou Yongkang, I want to apologize to all of the people who received unjust treatment during his time. Your journey to defend your rights is very tough (in China). Now I am on a similar journey. I ask all Chinese officials to think: Are your positions higher than Zhou Yongkang? He couldn’t even protect his family. When it is your time (to be purged), will you be able to protect your family? Only the full rule of law can protest every citizen’s rights!”

Source: Radio Free Asia, February 2, 2019
https://www.rfa.org/mandarin/Xinwen/5-02022019125423.html

Duowei News: The Political Danger of Pushing Companies to Establish Communist Party Branches

Duowei News, a pro-Beijing media, published an article commenting on the Chinese Communist Party’s (CCP’s) push for all companies in China to establish party branches. Recently, the CCP published “The Regulations on the Party Branch Work of the CCP (Trial Version).” It required that all businesses (including privately owned and foreign companies), executive offices, social organizations, neighborhood communities, schools, research institutions, and military units must establish party branches.

The article commented that, last year, there was some talk of “eliminating private ownership” in China. Also, China’s economy is sliding downhill, creating a tough environment for mid-level and small privately-owned companies. The South China Morning Post suggested that, for recent private companies, establishing a party branch and company owners’ joining the CCP do not reflect political loyalty but rather the companies’ attempt at self-protection by reducing political risk and showing good will to the authorities.

The article also mentioned that, since 2012, Beijing has carried out a campaign to establish party branches (in all companies in China). Many foreign companies, such as Nokia, Carrefour, Wal-Mart, Standard Chartered Bank (China), PricewaterhouseCoopers, Beijing Hyundai, and Alcatel-Lucent Shanghai Bell Co., all established a party branch. According to the CCP Central Organization Department, by end of 2016, 70 percent of foreign companies in China had a party branch.

The article pointed out that, since the start of the Sino-U.S. trade war, Beijing has faced an extremely challenging task trying to attract foreign investment and restore private companies’ economic vitality. Imposing party branch requirements may have caused more negative publicity and resulted in reduced confidence in doing business in China.

Source: Duowei News, January 28, 2019
http://news.dwnews.com/china/news/2019-01-28/60115317_all.html

China Strikes Hard on “Underground Banks” to Curb Capital Outflow

In order to prevent the illegal outflow of capital, the China’s Supreme Court and the Supreme Procuratorate recently issued a judicial interpretation that if an underground bank conducts illegal trading of foreign exchanges and the amount is more than 5 million yuan (US$ 0.8 million), or the illegal income is more than 100,000 yuan (US$ 14,800), the crime will be punished under the charge of illegal business acts and the “circumstances are serious.”

According to the official media, in practice, the underground banks’ illegally trading in foreign exchanges mainly takes the traditional form of direct transactions within borders. The current, more popular and disguised ways of trading in foreign exchanges are across borders.

The disguised trading of foreign exchanges is not a direct exchange between the yuan and the foreign exchange, but an act of repaying the yuan-denominated debt in foreign exchange, or repaying foreign exchange-denominated debt in yuan, or the swap of foreign exchange and the yuan to fulfill the trading. According to the report, the cross-border payment is a typical disguised trading of foreign exchange. Underground bank criminals would collude with foreign individuals, enterprises, and institutions, or make use of overseas bank accounts for the purpose of cross-border remittances and transfer of funds. At present, the main business of most underground banks is the cross-border payment, which leads to huge capital outflows.

According to the judicial interpretation, engaging in illegal payment settlement business or illegal trading of foreign exchange, if falling into one of the following two circumstances, should be regarded as illegal business acts and the “circumstances are serious.” One, the illegal business amount is more than 5 million yuan (US$ 0.8 million). Two, the amount of illegal income is more than 100,000 yuan (US$ 14,800). The interpretation of illegal business acts and “circumstances are particularly serious” is either the illegal business amount is more than 25 million yuan (US$ 3.7 million) or the amount of illegal income is more than 500,000 yuan (US$ 74,000).

Article 225 of the Chinese Criminal Law stipulates that those who commit the illegal business acts, and when the circumstances are serious, are to be sentenced to not more than five years of fixed-term imprisonment in criminal detention, and may, in addition, or exclusively, be sentenced to a fine not less than 100 percent and not more than 500 percent of their illegal income and, where the circumstances are particularly serious, be sentenced to not less than five years of fixed-term imprisonment and a fine of not less than 100 percent and not more than 500 percent of their illegal income or the confiscation of their property.

Source: Central News Agency, February 9, 2019
http://https://www.cna.com.tw/news/acn/201902090145.aspx