We have added the ability to click on a headline in the Essential Eight section below and jump directly to that section.
Today’s Essential Eight:
Beijing’s outbreak from Heaven Supermarket Bar – Beijing is now back on the precipice of broader lockdowns as a superspreader event at a sketchy Sanlitun bar (tautological?) has led to hundreds of cases across the city. The sword of dynamic zero-Covid can fall at anytime
US-China meetings – US Secretary of Defense Austin met PRC Minister of Defense in Singapore, then National Security Advisor Sullivan met Director of the Office of the Foreign Affairs Commission Yang Jiechi in Luxembourg. There are no surprises in the readouts of either meetings, though the concern and warnings over Taiwan seem to be increasing. The Yang-Sullivan meeting once again is sparking rumors of another Biden-Xi virtual discussion soon.
Tangshan beating and gang crackdown – Tangshan officials are scrambling to show they are serious about cracking down on gang crime and violence against women after a brutal video of several men beating several women at a BBQ restaurant went viral. This awful incident is a reminder that the ongoing campaign to crack down on organized crime and its official “umbrellas”/protectors really is political rather than being mostly about cracking down on gang crimes.
Henan uses health codes to block petitioners angry over bank fraud – Some people who lost money in a recent Henan bank fraud case had their health codes turn red, for no other reason than that they had travelled to the province to seek redress for their losses. The abuse of the health code system prompted outrage online and in state media. Someone in the Henan government, probably in the Public Security Department, seems to have decided the best way to deal with the wave of coming petitioners over the bank collapses was to make it impossible for them to travel to Henan. Messing with their health code certainly is cheaper and easier than meeting someone with multiple police officers as they arrive in the province, but this may have blown up in their faces. Now everyone knows that certain relevant organs can manipulate your health codes status.
Standardizing military operations other than war – Xi signed an order to promulgate trial outlines for military operations other than war, outlines which “aim to protect people’s lives and property, safeguard national sovereignty, security and development interest, and safeguard world peace and regional stability.” It is unclear what they mean, but it is not unreasonable to consider that these will open the door to more deployments of PLA personnel globally to “to protect people’s lives and property, safeguard national sovereignty, security and development interests [发展利益], and safeguard world peace and regional stability”, beyond just participating in UN Peacekeeping missions.
Wall Street bankers pay pressured in China? – Bloomberg reports foreign banks were told to rein in pay, the Financial Times reports a variation of the story, the China Securities and Regulatory Commission (CSRC) denies it happened. That is an interesting move by the CSRC, as if the meetings did happen then the banks who attended all know the CSRC is lying publicly, which would seem to call into question the credibility of all other CSRC statements. Were the bankers not explicitly told but left with no doubt what the intent of the message was? At what point do the big Wall Street banks decide trying to please PRC officials is not worth the headaches? Is their red line pay controls, or is nothing so painful as losing a shot at such a large market? And even if the CSRC and related associations did suggesting limiting pay, is that about Common Prosperity or risk management, and in line with global efforts to rein in banker pay?
Semiconductor equipment sales to PRC are booming – An industry lobbying firm says sales of chip manufacturing equipment to China were up 58% in 2021. Is that “normal market forces” at work, as the US Department of Commerce suggests, or is something else going on?
Alien radio signals detected? – Probably not, but this story is going to have legs, and the quote at the end of the English piece is disturbing. Science and Technology Daily reported that the FAST radio telescope has picked up some radio signals that could be from an alien civilization…
Thanks for reading.
The Essential Eight
1. Beijing’s outbreak from Heaven Supermarket Bar
Beijing is now back on the precipice of broader lockdowns as a superspreader event at a sketchy Sanlitun bar (tautological?) has led to hundreds of cases across the city. The sword of dynamic zero-Covid can fall at anytime.
Beijing investigates bar over COVID-19 cluster-Xinhua
From June 9 to 3 p.m. on June 13, the city reported 228 infections in the COVID-19 cluster related to the bar.
Beijing in ‘race against time’ to contain COVID surge | Reuters
Authorities have refrained from restoring the toughest of the earlier restrictions, but about 10,000 close contacts of the customers of the bar have been identified and their residential buildings put under lockdown.
Chaoyang, the city’s largest district in which the bar is located, began a three-day mass testing campaign on Monday for its roughly 3.5 million residents.
People infected in the latest surge in cases live or work in 14 of the capital’s 16 districts, authorities have said.
Police have launched a criminal investigation into the person in charge of the bar on suspected interference with epidemic prevention, Pan Xuhong, deputy director of the city’s Public Security Bureau, told the news conference.
Chinese vice premier urges solid efforts to contain COVID-19 in Beijing-Xinhua
Sun made the remarks during an inspection tour of the COVID-19 prevention and control work in the national capital, where she visited sites hit by the latest wave of infections — two bars in Chaoyang District…
The quality and efficiency of work in various areas, including epidemiological investigation and transportation and isolation of cases, must be further enhanced, Sun said.
Lockdown Fears Linger as Beijing Says Harder to Control Cluster – Bloomberg
Beijing’s local government said a Covid-19 outbreak linked to a popular bar is proving more difficult to control than previous clusters, in a weekend that saw mass testing and rising infections both in the city and Shanghai.
Authorities delayed the reopening for most schools in the capital planned for Monday, while most districts in Shanghai suspended dine-in services at restaurants. Beijing reported 33 new local Covid cases as of 3 p.m. Sunday, all of which were found in quarantine. In Shanghai, cases continued to be detected in the community.
Beijing authorities file criminal case against owner of Heaven Supermarket, revoke bar’s license – Global Times
Beijing authorities have filed a criminal case against the owner of Heaven Supermarket Bar, which becomes the epicenter of a new wave of outbreaks in the capital, for impeding the prevention of infectious diseases. The license of the bar was also revoked, and it was listed as seriously breaching the law and conduc
ting dishonest acts.
The recent outbreak was triggered by a customer of the bar last week who had not taken a test for 14 days prior. Beijing has been asking all its residents to undergo a nucleic acid test every two or three days, and if not, the health code will send notifications. People are also required to show their health codes before they enter any public places.
Beijing Closes Dozens of Bars in Sanlitun Amid Covid Resurgence – Caixin
The “strict and fast” investigation of Heaven Supermarket, a bar in the Worker’s Stadium area of Chaoyang district known for cheap liquor and big crowds, will be conducted by a team of investigators covering several municipal authorities, including the health commission and the administration for market regulation, the official Beijing Daily reported Tuesday. Those found to have committed wrongdoing will be severely punished, the report said.
From June 15 you will need a negative PCR test in the last 72 hours to board any public transportation in the city.
Some Chinese cities on trial to shorten quarantine period to 7+7days for international arrivals at entry points – Global Times
At least three cities in China, namely Beijing, Nanjing, and Wuhan, appeared to have shortened quarantine time by three to seven days for international arrivals on trial basis, which now only requires seven days of centralized quarantine and another seven days of home quarantine, the Global Times has learned on Sunday.
When the Global Times reached Beijing’s COVID prevention hotline on Sunday, it was informed that starting from May 15, Beijing has reduced again the centralized quarantine time from 10 days to seven.
2. US-China meetings
US Secretary of Defense Austin met PRC Minister of Defense in Singapore, then National Security Advisor Sullivan met Director of the Office of the Foreign Affairs Commission Yang Jiechi in Luxembourg. There are no surprises in the readouts of either meetings, though the concern and warnings over Taiwan seem to be increasing. The Yang-Sullivan meeting once again is sparking rumors of another Biden-Xi virtual discussion soon.
Senior Chinese diplomat meets U.S. national security advisor-Xinhua
China-U.S. relations are at a critical crossroads, noted Yang, saying that the three principles proposed by President Xi — mutual respect, peaceful coexistence, and win-win cooperation — are the correct approaches for China and the United States in getting along with each other, as the principles conform not only to the fundamental interests of the Chinese and the Americans, but also to the common aspiration of the international community. They ought to be fundamental rules for developing China-U.S. relations.
The Chinese side is ready to work together with the U.S. side to explore ways and methods to realize this vision, yet China firmly opposes using competition to define bilateral ties, Yang said. [Note: Yang has been quite consistent on this point]
He said the U.S. side should correct its strategic perceptions of China, make the right choices, and translate President Biden’s commitments into concrete actions, working together with the Chinese side in the same direction and concretely implementing the important consensus reached by the two heads of state…
The Taiwan question concerns the political foundation of China-U.S. relations which, unless handled properly, will have a subversive impact, said the senior Chinese diplomat. The risk does not only exist but will escalate as the United States attempts to contain China with the Taiwan question, and as the Taiwan authorities rely on the United States to seek its “independence,” he added.
The U.S. side should not have any misjudgments or illusions, Yang said, adding that it must abide by the one-China principle and the stipulations in the three China-U.S. joint communiques and handle the Taiwan question in a prudent and proper way.
Readout of National Security Advisor Jake Sullivan’s Meeting with Politburo Member Yang Jiechi | The White House
National Security Advisor Jake Sullivan met today with Chinese Communist Party Politburo Member and Director of the Office of the Foreign Affairs Commission Yang Jiechi in Luxembourg. This meeting, which followed their May 18 phone call, included candid, substantive, and productive discussion of a number of regional and global security issues, as well as key issues in U.S.-China relations. Mr. Sullivan underscored the importance of maintaining open lines of communication to manage competition between our two countries.
Two top US and China officials meet for a third time this year to ‘reduce risks’ | South China Morning Post
Sullivan also called for the release of Americans “wrongfully detained” and “subjected to exit bans” in China, the US official said without citing any specific cases.
“We feel like we’ve advanced a number of our key priorities, a number of key initiatives, but we do think … it’s important to be very clear with China about what our intentions are, what the focus of these actions are and are not, that these are about an affirmative US vision for the region, and that this is about advancing US interests,” the official added.
Yang-Sullivan meeting draws bottom line for US – Global Times
“The four ‘do nots’ and one ‘no intention’ aim to stabilize China-US relations, which also lays a foundation for cooperation between the two countries,” the Beijing-based expert said.
Biden reiterated that the US “does not seek a new Cold War with China, does not aim to change China’s system, the revitalization of its alliances is not targeted at China and the US does not support ‘Taiwan independence'” during the virtual meeting with Chinese President Xi Jinping last November, and claimed that the US has no intention of seeking conflict with China. In a video call between the two top leaders, Biden reiterated such stance, and Secretary of State Antony Blinken also included those points in his recent China policy address.
Axios Scoop: Biden leans toward easing some of Trump’s China tariffs
Biden is leaning toward ordering the Office of the U.S. Trade Representative to run a formal “exclusions process” to determine if some consumer items, such as bicycles, should be exempted from the Section 301 tariffs. He is less likely to include big industrial items, like steel and aluminum, in the process.
Secretary Austin’s Meeting With People’s Republic of China (PRC) Minister of National Defense General Wei Fenghe > U.S. Department of Defense > Release
Secretary Austin discussed global and regional security issues, including the Democratic People’s Republic of Korea and Russia’s unprovoked invasion of Ukraine. The Secretary reiterated to General Wei that the United States remains committed to our longstanding one China policy, which is guided by the Taiwan Relations Act, the Three U.S.-China Joint Communiques, and the Six Assurances. The Secretary reaffirmed the importance of peace and stability across the Strait, opposition to unilateral changes to the status quo, and called on the PRC to refrain from further destabilizing actions toward Taiwan.
China draws security red line to US at defense ministers’ longer-than-expected first meeting – Global Times
The conversation between the Chinese and US defense ministers has a positive meaning to the deepening of strategic communication, the exploration in the construction of a “guardrail” for China-US relations, as well as the management of risk, Cao Yanzhong, a research fellow at the Academy of Military Sciences of the Chinese People’s Liberation Army (PLA), told the Global Times on Friday.
When it comes to the “guardrail” for China-US relations the US wants to build, China has already drawn three bottom lines the US should not cross during the two countries’ meetings in Anchorage and Tianjin. The US should keep its promises, stop making provocations on the Taiwan question, stop expanding and enhancing military alliances and partnerships in its attempt to “shape security environment of China,” and stop trade sanctions and technology blockades, and take real actions to stabilize China-US relations and promote peace, Cao said.
China’s New ‘Sovereignty’ Claims Over Taiwan Strait Could Raise Tensions With US – Bloomberg
Foreign Ministry spokesman Wang Wenbin reiterated at a regular news briefing Monday that China claimed “sovereignty” over the Taiwan Strait.
“There is no such thing as international waters in international maritime law,” Wang said at a regular briefing in Beijing. “Relevant countries claim that the Taiwan Strait is in international waters with the aim to manipulate the Taiwan question and threaten China’s sovereignty.”
In 2017, another Chinese foreign ministry spokesperson said, “The Taiwan Strait is an international waterway shared by the mainland and Taiwan.”
Comment: If the PRC has been saying this for months, the US should probably push back more forcefully than leaking it to a reporter. Perhaps some US officials fear being “provocative”, but if this is a change in the PRC position, isn’t that provocative?
3. Tangshan beating and gang crackdown
Tangshan officials are scrambling to show they are serious about cracking down on gang crime and violence against women after a brutal video of several men beating several women at a BBQ restaurant went viral. This awful incident is a reminder that the ongoing campaign to crack down on organized crime and its official “umbrellas”/protectors really is political rather than being mostly about cracking down on gang crimes.
Chinese police on anti-gang blitz after attack on women in Tangshan | South China Morning Post
Officials in the northern Chinese city of Tangshan launched a “lightning blitz” campaign against criminal gangs on Monday after nine men were arrested over the weekend for allegedly battering women.
The two-week campaign – led by a special group within the city government – with cover a series of criminal activities, from assault and battery of women to extortion, gambling, prostitution and scams.
The officials called on the public to report suspicious activity to the police and promised that all tip-offs would be treated confidentially and the informants would be protected.
Tangshan launches special campaign against crimes in wake of brutality in restaurant – Global Times
Tangshan in North China’s Hebei Province on Sunday launched a special campaign against crimes across the city with a heavy punch and no mercy, following the arrest of nine suspects involved in the harassment and beating incident at a local barbecue restaurant, which made headlines across China.
Led by dual commanders in chief, Party chief and city mayor, the campaign, called “Thunderstorm,” targets illegal acts such as fighting, provoking trouble, intentional injury and insulting women. The scope of the campaign also extends to extortion, bullying, gambling, drug use and cybercrimes, as well as dereliction of duty, cover-ups and conniving at crimes.
What Happened in Tangshan? The Violent Restaurant Incident Everyone Is Talking About | What’s on Weibo
Gender, misogyny, bystander effect, morality, gang violence, rule of law, public security, and media bias are all themes that come up in online discussions. There are also those who are happy about the fact that the entire incident was captured by surveillance cameras, because otherwise the severity of the incident might have never come out.
More cases of gang crimes reported in Tangshan following barbecue restaurant violence – Global Times
Many people questioned why the law lost its deterrent in Tangshan.
Considering that the city had hit top trending topic on social media for three times over a course a bit longer than a month, including two other absurd incidents in April and May when a farmer was forced to exert self-criticism for working in his own farm that went against local epidemic prevention protocol, and residents in Qian’an of Tangshan were locked in their homes with their keys handed over for the epidemic prevention and control, netizens demand a thorough investigation into the criminal gangs in the city.
Hebei government is now scrambling to look like it is taking gang crimes seriously
4. Henan uses health codes to block petitioners angry over bank fraud
Some people who lost money in a recent Henan bank fraud case had their health codes turn red, for no other reason than that they had travelled to the province to seek redress for their losses. The abuse of the health code system prompted outrage online and in state media. Someone in the Henan government, probably in the Public Security Department, seems to have decided the best way to deal with the wave of coming petitioners over the bank collapses was to make it impossible for them to travel to Henan. Messing with their health code certainly is cheaper and easier than meeting someone with multiple police officers as they arrive in the province, but this may have blown up in their faces. Now everyone knows that certain relevant organs can manipulate your health codes status.
Henan Bank Depositors Hit With Red Health Codes – SixthTone
At least 12 depositors Sixth Tone spoke with said their health code turned red when they scanned city-specific QR codes at railway stations, hotels, and other venues that required them. China tracks residents’ locations with national and local health apps as part of its COVID control measures, which limit mobility when codes turn yellow or red.
Many of the depositors said they had traveled from the eastern provinces of Zhejiang and Shandong, as well as Hebei in the north, to Zhengzhou to demand answers and attempt to retrieve their deposits.
Wang Jin, from Zhangjiakou in Hebei, is among them. The 35-year-old said he came to Zhengzhou hoping to retrieve his savings from Yuzhou Xinminsheng Village Bank on Sunday, but ended up at the police station until the following day when his health code turned red while scanning a QR code to exit the city’s railway station.
He had last checked his health code 30 minutes before arriving in Zhengzhou, and it was still green then.
People’s Daily Wechat account “Xieke Dao” weighs in:
What is the legal basis for using the health code measures taken to make the epidemic more scientific and accurate for other purposes? Have you ever thought about the consequences of abusing epidemic prevention means and breaking rules?
Fears of data abuse as Chinese health code turns red for financial scandal protesters | South China Morning Post
A Shanghai man surnamed Zeng who had deposits at one of the Henan banks said he had not left the financial hub, but his health code system indicated that his health risk level under the Henan Province was high.
“The red health code in Henan is like a ‘deposit code’ now,” Zeng said.
Yet, his local health code in Shanghai was still green, and no staff at the epidemic prevention department called him because of his red health code.
Scientificity and seriousness of health code must be maintained: Global Times editorial – Global Times
Zhengzhou’s government service hotline 12345 claimed they had received calls regarding this problem. It said they were unfamiliar with the situation but could confirm it was related to a problem in the big data database. “We are proactively solving this issue,” the hotline’s operators said. Regarding whether the issue is related to the epidemic prevention rules, the hotline operator said that they had not received such notification. In addition, Zhengzhou’s health hotline 12320 said it was unclear which government branch had given these people red codes.
However, these replies are apparently not enough to quell doubts. According to information spread online, it seems that the “red codes” were “precisely” given to those bank deposit holders. Some of these people told the media that after they scanned the health code to fill in their personal information, their code appeared red and the reason given was that “they needed to sit in quarantine”. But those non-bank deposit holders who took the same trip to Zhengzhou didn’t encounter the same problem. In addition, according to media reports, several depositors who didn’t go to Zhengzhou were also given red codes after filling out their information.
China’s ‘iPhone City’ May Be Using Covid Controls on Protesters – BNN Bloomberg
Several people who claim to have been denied access to their money invested via online platforms said their health codes turned red when they scanned in at the main train station of Zhengzhou, the capital of Henan province, meaning they could no longer move about freely. They had carried green health codes when they left their hometowns, said the people, who declined to be identified for fear of reprisals.
Such alleged use of health-code apps to track people beyond their intended purpose has caused a firestorm, adding to concerns that the strict Covid restrictions imposed in mainland China and Hong Kong are doubling as a form of social control.
5. Standardizing military operations other than war
Xi signed an order to promulgate trial outlines for military operations other than war, outlines which “aim to protect people’s lives and property, safeguard national sovereignty, security and development interest, and safeguard world peace and regional stability.” It is unclear what they mean, but it is not unreasonable to consider that these will open the door to more deployments of PLA personnel globally to “to protect people’s lives and property, safeguard national sovereignty, security and development interests [发展利益], and safeguard world peace and regional stability”, beyond just participating in UN Peacekeeping missions.
Xi signs outlines that direct China’s military operations other than war – Global Times
Xi Jinping…recently signed an order to promulgate a set of trial outlines on military operations other than war, which will take effect on Wednesday.
The outlines will standardize, and provide the legal basis for Chinese troops to carry out, missions like disaster relief, humanitarian aid, escort, and peacekeeping, and safeguard China’s national sovereignty, security and development interests, experts said.
The outlines aim to prevent and neutralize risks and challenges, handle emergencies, protect people and property, and safeguard national sovereignty, security and development interests, and world peace and regional stability, the Xinhua News Agency reported on Monday…
The Chinese armed forces are also responsible for counter-terrorism, anti-pirate and peacekeeping missions, including regular escort missions in the Gulf of Aden and waters off Somalia as well as UN peacekeeping missions, providing public security goods to the international community, the expert said.
By carrying out these operations overseas, in some cases, the Chinese troops can prevent spillover effects of regional instabilities from affecting China, secure vital transport routes for strategic materials like oil, or safeguard China’s overseas investments, projects and personnel, analysts said, noting that this is likely why Xinhua described the outlines as being capable of safeguarding China’s national sovereignty, security and development interests.
Brief report, full outline not published – 中央军委主席习近平签署命令发布《军队非战争军事行动纲要（试行）》-新华网
6. Wall Street bankers pay pressured in China?
Bloomberg reports foreign banks were told to rein in pay, the Financial Times reports a variation of the story, the China Securities and Regulatory Commission (CSRC) denies it happened. That is an interesting move by the CSRC, as if the meetings did happen then the banks who attended all know the CSRC is lying publicly, which would seem to call into question the credibility of all other CSRC statements. Were the bankers not explicitly told but left with no doubt what the intent of the message was? At what point do the big Wall Street banks decide trying to please PRC officials is not worth the headaches? Is their red line pay controls, or is nothing so painful as losing a shot at such a large market? And even if the CSRC and related associations did suggesting limiting pay, is that about Common Prosperity or risk management, and in line with global efforts to rein in banker pay?
How Much Do Wall Street Banks Pay in China? Communists Ask – Bloombe
One after another, the big names in global finance were summoned by Chinese officialdom.
On the agenda: pay—specifically, telling Credit Suisse Group AG, Goldman Sachs Group Inc. and UBS Group AG to report details on how they compensate their top bankers.
Don’t reward your top people too lavishly, Chinese regulators warned the banks this year in meetings in Shanghai and Beijing, or you might run afoul of the Communist Party, according to people familiar with the matter…
All in all, the top six global banks made roughly $42 million in China last year—a pittance next to their earnings elsewhere, but welcome news after so many lean years. Those figures don’t include profits made from dealmaking with Chinese clients outside the country.
China tells banks to limit executive pay under ‘common prosperity’ drive | Financial Times $$
China’s securities regulator on Tuesday denied that it and its securities association had asked foreign investment banks for senior executives’ pay details or suggested they implement pay curbs, rejecting media reports…
On Friday, the Asset Management Association of China instructed fund houses to “enhance [their] social responsibility and capability to serve the economy and the country’s strategies”.
According to the AMAC’s new rules, at least 40 per cent of bonus payments to senior staff should be deferred for three or more years…
The Securities Association of China issued similar guidelines last month.
The new guidelines were finalised months after the Beijing office of China’s securities regulator convened a meeting in January about pay restraint with financial institutions including CICC, Citic, Credit Suisse, Goldman Sachs and UBS, according to people briefed on the matter. Domestic and foreign banks were also briefed more recently on the new pay rules issued by the AMAC and the SAC.
From the CSRC denial – 证监会有关部门负责人答记者问_中国证券监督管理委员会