Category: China

Chinese Communists Extend Control of Firms by Buying “Golden Shares”

(p. A1) In its uneasy dance with China’s private sector, the Communist Party is moving away from a public battle with some of the country’s biggest companies. Instead, it is inching toward a quieter form of control.

At the center of the effort is a push by various levels of government to take stakes in the private companies that have long driven Chinese innovation and job creation.

The government stakes are sometimes very small, like the 1% holding that a fund of Beijing’s cyberspace watchdog recently took in the digital-media unit of e-commerce giant Alibaba Group Holding Ltd. But they tend to give the government board seats, voting power and sway over business decisions. Colloquially, they are known as golden shares.

For the companies, there is little choice: Selling such a stake to a government entity that seeks one is crucial for staying in business. For the state, the stakes mean more direct involvement in some of China’s most high-profile companies—digital cornerstones of Chinese life and, in some cases, darlings of global investors.

. . .

(p. A9) One result of the new normal of subtle influence is that the boundary between the party-state and the private sector is getting increasingly muddled. That reverses a trend dating to the late 1970s, when Chinese leader Deng Xiaoping had the party-state step back from business control and let entrepreneurs flourish.

For the full story, see:

Lingling Wei. “Stakes in Firms Give Beijing New Control.” The Wall Street Journal (Thursday, April 11, 2023): A1 & A9.

(Note: ellipsis added.)

(Note: the online version of the story has the date March 8, 2023, and has the title “China’s New Way to Control Its Biggest Companies: Golden Shares.”)

China Still Seeks to Censor International Journals and Databases on Covid

(p. A1) Early in 2020, on the same day that a frightening new illness officially got the name Covid-19, a team of scientists from the United States and China released critical data showing how quickly the virus was spreading, and who was dying.

The study was cited in health warnings around the world and appeared to be a model of international collaboration in a moment of crisis.

Within days, though, the researchers quietly withdrew the paper, which was replaced online by a message telling scientists not to cite it. A few observers took note of the peculiar move, but the whole episode quickly faded amid the frenzy of the coronavirus pandemic.

What is now clear is that the study was not removed because of faulty research. Instead, it was withdrawn at the direction of Chinese health officials amid a crackdown on science. That effort kicked up a cloud of dust around the dates of early Covid cases, like those reported in the study.

“It was so hard to get any information out of China,” said one of the authors, Ira Longini, of the University of Florida, who described the back story of the removal publicly for the first time in a recent interview. “There was so much covered up, and so much hidden.”

That the Chinese government muzzled scientists, hindered international investigations and censored online discussion of the pandemic is well documented. But Beijing’s stranglehold on information goes far deeper than even many pandemic researchers are aware of. Its censorship campaign has targeted international journals and scientific databases, shaking the foundations of shared scientific knowledge, a New York Times investigation found.

Under pressure from their government, Chinese scientists have withheld data, withdrawn genetic sequences from public databases and altered crucial details in journal submissions. Western journal editors enabled those efforts by agreeing to those edits or withdrawing papers for murky reasons, a review by The Times of over a dozen retracted papers found.

Groups including the World Health Organization have given credence to muddled data and inaccurate timelines.

For the full story, see:

Mara Hvistendahl and Benjamin Mueller. “China Censors Are Thwarting Covid Science.” The New York Times (Monday, April 24, 2023): A1 & A9.

(Note: the online version of the story has the date April 23, 2023, and has the title “Chinese Censorship Is Quietly Rewriting the Covid-19 Story.”)

Local Chinese Governments Fund Bullet Trains and Green Spaces When People Want Higher Wages and Basic Bus Service

(p. B4) China is full of wasteful infrastructure that the government likes to brag about but that doesn’t serve the most urgent needs of the public.

The Chinese government likes to say the country has the longest and fastest high-speed railways in the world. But except for a couple of lines that connect the megacities of Beijing, Shanghai, Guangzhou and Shenzhen, most lines operate below capacity and at a great loss. About 80 percent of China’s high-speed railways constructed in the past decade were built in distant and poor regions, China State Railway Group said last year.

Zhao Jian, a professor at Beijing Jiaotong University, warned in an article that high-speed railways could become the “gray rhino” that crushed the Chinese economy because many local governments had taken on a lot of debt to build them. But most of those railways move people, not freight. So they would make sense only in densely populated areas where people were willing to pay more for speed.

Local leaders are interested in infrastructure projects because their economic payoff, while minimal, is immediate — people get construction jobs, and companies get building contracts. Such a short-term approach dominates in China’s political system, in which cadres are deployed to run toward the goal set by their leader regardless of the financial or human cost.

The Shangqiu government brags that there is about 150 square feet of green space for each of the 2.3 million residents in the city’s central municipal area. One of Shangqiu’s biggest infrastructure projects this year is a wetlands park. After building many roads to nowhere, local governments have been spending big on urban beautification projects in recent years.

It’s nice to have green space for everyone. But like most inland Chinese cities, Shangqiu isn’t wealthy. Its college graduates are complaining on social media that it’s difficult to find a job that pays more than $300 a month. Its basic pension provides its seniors with $17.80 a month, after a $1.50 raise this year.

Many Chinese people who are at least 60 years old live on pensions like this. According to official data, in 2021, $54 billion in basic pensions was distributed to more than 162 million people, or about $28 a person each month on average. The residents would probably prefer that the government spent on unemployment protection, bus service and welfare instead of high-speed railways and green space.

Shangqiu is far from an exception.

A resident in Pucheng, in the northwestern province of Shaanxi, complained on the local government’s online messaging board in February [2023] that there was no bus service between downtown and the railway station.

“This is the most basic public service,” the resident, who signed with the name Li Hongbo, wrote. “I felt that people’s livelihood has deteriorated. I hope the leaders can pay some attention to it.”

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; China’s Cities Splurge and Debt Piles Up.” The New York Times (Wednesday, March 29, 2023): B1 & B4.

(Note: bracketed year added.)

(Note: the online version of the commentary has the date March 28, 2023, and has the title “THE NEW NEW WORLD; China’s Cities Are Buried in Debt, but They Keep Shoveling It On.”)

Fast Transition Away from Fossil Fuels Requires Fast and Huge Increase in Mining of Lithium, Cobalt, and Copper

(p. A17) The drive toward energy transition will increase demand for lithium, cobalt and other minerals many times over. An offshore wind project uses nine times the minerals of a natural-gas-fired power plant of the same generating capacity.

As countries roll out targets for “net zero” carbon emissions by 2050, it’s becoming clear how difficult it will be to source this huge increase in minerals. The U.S. and Japanese governments, the European Union and a host of multilateral organizations have issued alarming reports about the magnitude of the challenge. The International Monetary Fund warns that striving to achieve net zero by 2050 will “spur unprecedented demand for some of the most crucial metals,” leading to price spikes that “could derail or delay the energy transition itself.”

Consider a recent S&P Global study on copper. Much of the energy transition is predicated on electrifying as much as possible, as fast as possible. That will require a huge amount of copper, as it is the “metal of electrification.” The report concludes that translating the 2050 net zero goals into the equipment and technologies that will be needed—electric-vehicle batteries and charging stations, offshore wind, onshore wind, solar panels, battery storage, etc.—adds up to a doubling of the need for copper by the mid-2030s.

. . .

Two countries mine about 40% of world’s copper supplies—Peru, where the government is in disarray after the president was impeached and arrested, and Chile, whose government is struggling between its populist agenda and the need for economic growth.

. . .

The quest for net zero emissions will face similar challenges with other commodities, where the growth in demand will be much greater. Seventy percent of cobalt, critical for electric-vehicle batteries, comes from the Democratic Republic of the Congo, where large mining operations coexist with small, hand-dug mines in which both adults and children work.

There’s a further complication—about 60% of the world’s lithium is processed in China, and 47% of copper is smelted there. By comparison, the U.S. processes 4% of world copper. Once the U.S. had more than a dozen copper smelters; now it has two.

For the full commentary, see:

Daniel Yergin. “‘Net Zero’ Will Mean a Mining Boom.” The Wall Street Journal (Thursday, April 13, 2023): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 12, 2023, and has the same title as the print version.)

The S&P Global study mentioned above is:

Yergin, Daniel (Project Chairman). “The Future of Copper: Will the Looming Supply Gap Short-Circuit the Energy Transition?” S&P Global, July 2022.

The “Huge Opportunity Cost” of Congress Keeping Obsolete Warthog Planes Flying

(p. A1) The Air Force has said for years that the A-10 jets, nicknamed Warthogs for their bulky silhouette and toughness in a fight, have passed their prime and will be vulnerable in the wars of the future. The production line where they were made fell silent in the mid-1980s, and the average A-10 here is four decades old. Its job can be done by newer, more advanced planes, the Air Force says.

“The A-10, while it has served us well, is simply not a part of the battlefield of the future,” said Lt. Gen. Richard Moore, the Air Force’s deputy chief of staff for plans and programs.

Congress has other ideas. Bowing to members whose constituencies are dependent on the jet for jobs and the flow of federal tax dollars, it has instead insisted nearly all the planes keep flying at a cost of more than $4 billion over the past 10 years.

This kind of intervention is common—and is (p. A9) impairing the U.S.’s ability to respond to rapidly modernizing Chinese forces in a new era of great-power competition, say current and former senior defense officials and military analysts.

Efforts by lawmakers to bring military jobs and funding to their districts and keep them there are as old as Congress itself. But they come at a huge opportunity cost at a time when the U.S. is facing its most formidable adversary since the end of the Cold War. Congress is in effect forcing the Pentagon to spend billions on programs for which it sees no role in future wars.

For the full story, see:

Daniel Nasaw. “Why Is America Still Flying the A-10 Warthog, a Cold War Relic?” The Wall Street Journal (Friday, April 14, 2023): A1 & A9.

(Note: the online version of the story has the date April 13, 2023, and has the same title as the print version.)

Communist China Fails Again at Flailing Efforts to Centrally Plan Fertility

(p. 1) In China, a country that limits most couples to three children, one province is making a bold pitch to try to get its citizens to procreate: have as many babies as you want, even if you are unmarried.

The initiative, which came into effect this month, points to the renewed urgency of China’s efforts to spark a baby boom after its population shrank last year for the first time since a national famine in the 1960s.

. . .

Many young Chinese adults, who themselves were born during China’s draconian one-child policy, are pushing back on the government’s inducements to have babies in a country that is among the most expensive in the world to raise a child.

. . .

(p. 12) Efforts by the ruling Communist Party to raise fertility rates — by permitting all couples to have two children in 2016, then three in 2021 — have struggled to gain traction. The new policy in Sichuan drew widespread attention because it essentially disregards birth limits altogether, showing how the demographic crisis is nudging the party to slowly relinquish its iron grip over the reproductive rights of its citizens.

“The two-child policy failed. The three-child policy failed,” said Yi Fuxian, a researcher at the University of Wisconsin-Madison who has studied Chinese population trends. “This is the natural next step.”

Sichuan, the country’s fifth-largest province with 84 million people, lifted all limits on the number of children that residents can register with the local government, . . .

For the full story, see:

Nicole Hong and Zixu Wang. “Public Is Wary Of China’s Push For Baby Boom.” The New York Times, First Section (Sunday, February 26, 2023): 1 & 12.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “Desperate for Babies, China Races to Undo an Era of Birth Limits. Is It Too Late?”)

Energy Department Says Covid Came from Wuhan Lab

(p. A1) WASHINGTON — New intelligence has prompted the Energy Department to conclude that an accidental laboratory leak in China most likely caused the coronavirus pandemic, though U.S. spy agencies remain divided over the origins of the virus, American officials said on Sunday.

The conclusion was a change from the department’s earlier position that it was undecided on how the virus emerged.

. . .

Officials would not disclose what the intelligence was. But many of the Energy Department’s insights come from its network of national laboratories, some of which conduct biological research, rather than more traditional forms of intelligence like spy networks or communications intercepts.

Intelligence officials believe the scrutiny of the pandemic’s beginnings could be important to improving global response to future health crises, though they caution that finding an answer about the source of the virus may be difficult or even impossible given Chinese opposition to further research. Scientists say there is a responsibility to explain how a pandemic (p. A7) that has killed almost seven million people started, and learning more about its origins could help researchers understand what poses the biggest threats of future outbreaks.

The new intelligence and the shift in the department’s view was first reported by The Wall Street Journal on Sunday [Feb. 26, 2023].

For the full story, see:

Julian E. Barnes. “Energy Dept. Suspects Virus Was From Lab.” The New York Times (Monday, February 27, 2023): A1 & A7.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Feb. 26, 2023, and has the title “Lab Leak Most Likely Caused Pandemic, Energy Dept. Says.”)

Taiwanese Engineers Who Built Dictator Xi’s Computer Chips, Are Voting With Their Feet for Taiwan’s Democracy and Freedom

(p. B1) TAIPEI, Taiwan — The job offer from a Chinese semiconductor company was appealing. A higher salary. Work trips to explore new technologies.

No matter that it would be less prestigious for Kevin Li than his job in Taiwan at one of the world’s leading chip makers. Mr. Li eagerly moved to northeast China in 2018, taking part in a wave of corporate migration as the Chinese government moved aggressively to build up its semiconductor industry.

He went back to Taiwan after two years, as Covid-19 swept through China and global tensions intensified. Other highly skilled Taiwanese engineers are going home, too.

For many, the strict pandemic measures have been tiresome. Geopolitics has made the job even more fraught, with China increasingly vocal about staking its claim on Taiwan, a self-ruled democracy.

. . .

(p. B4) For now, Mr. Li is staying in Taiwan, working for an American chip company operating there and siding with the invigorated patriotic sentiment and the ethos of individual liberty.

“The advantage of working in Taiwan is that you don’t have to worry about officials shutting down the whole company because of one thought,” he said. “The atmosphere is very important. At least I can watch all kinds of programs criticizing the governments on both sides of the Taiwan Strait without worrying about being arrested.”

For the full story, see:

Jane Perlez, Amy Chang Chien and John Liu. “Taiwanese Who Built Up Chip Sector in China Are Fed Up and Going Home.” The New York Times (Tuesday, November 22, 2022): B1 & B4.

(Note: the online version of the story has the date Nov. 16, 2022, and has the title “Engineers From Taiwan Bolstered China’s Chip Industry. Now They’re Leaving.” The online version says that the title of the print version is “They Built Up China’s Chip Sector. Now, They’re Going Home to Taiwan” but the title of my national edition copy is “Taiwanese Who Built Up Chip Sector in China Are Fed Up and Going Home.”)

Venture Capitalist Invested in Mainland But Now Prefers Taiwan’s “Freedom”

(p. B10) TAIPEI—Tim Draper, a venture capitalist known for his early bets in Elon Musk’s Tesla Inc. and SpaceX, is feeling good about his decision to stop investing in China.

In an interview in Taiwan, where he is pursuing new investments, Mr. Draper slammed China’s Xi Jinping, whom he called a “weak leader,” saying the country is going backward after more than four decades of former leader Deng Xiaoping’s “reform and opening up” policy.

“It’s not a place where you invest money to get a return,” he said. “I see China as a place where the government is trying to control everybody.”

An early investor in Baidu Inc.—China’s BIDU equivalent of Google—Mr. Draper said he pulled out completely and froze investment in the country around 2014 after a startup he had invested in was fined by regulators. It was a sign, he said, of the government’s increasing interference in the market.

. . .

Mr. Draper’s fund made its first investments in Taiwan last year, when it bought stakes in Taipei-based digital news company TNL Media Group and other startups. He said he would continue to invest in the island, which he believes will attract frustrated entrepreneurs from China with its openness.

“I’m coming to Taiwan. I’m not going to China,” he said, praising the democracy’s “freedom and trust.”

For the full story, see:

Joyu Wang. “Venture Capitalist Touts His Turning from China.” The Wall Street Journal (Saturday, September 19, 2022): B10.

(Note: ellipsis added.)

(Note: the online version of the story has the date September 18, 2022, and has the title “Tim Draper Touts Decision to Pull Out of China.”)

Lancet Editorial Praised Chinese Communists’ Covid Policy of “Restricting Public Freedoms”

(p. A17) China’s zero-Covid policies have recently come under criticism from public-health leaders—including those at the World Health Organization—who once held them up as a model for the West.

“China’s success rests largely with a strong administrative system that it can mobilise in times of threat, combined with the ready agreement of the Chinese people to obey stringent public health procedures,” the Lancet editorialized on March 7, 2020. Western countries, it added, “must abandon their fears of the negative short-term public and economic consequences that may follow from restricting public freedoms as part of more assertive infection control measures.”

That hasn’t worn well. The negative social and economic consequences of lockdowns in the West—from learning losses and destroyed small businesses to alcoholism and drug abuse—weren’t “short-term.” Nor were China’s draconian zero-Covid policies, which three years later are only slowly being eased.

For the full commentary, see:

Allysia Finley. “LIFE SCIENCE; Western Scientists Cheered On China’s Covid Repression.” The Wall Street Journal (Monday, Dec. 12, 2022): A17.

(Note: the online version of the commentary has the date December 11, 2022, and has the same title as the print version.)

Some Gain-of-Function Bat Coronavirus Research in Wuhan Was Done in Level 2 Biosafety Lab (Instead of Higher Level 3 or 4)

(p. A1) Some scientists and officials in the Biden administration are pushing for more oversight, globally, of risky bioresearch. One focus is laboratory work that enhances a pathogen or endows it with new properties—sometimes called “gain-of-function” research—which is often done to assess its potential to infect humans.

. . .

(p. A12) Scientists and government officials have debated the risks of gain-of-function research since at least 2011, when virologists genetically modified the deadly H5N1 avian-flu virus so it could spread among ferrets.

. . .

Dr. Collins and Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the risks could be mitigated, and the information might accelerate efforts to develop vaccines or stop outbreaks.

. . .

Then in 2014, the U.S. government declared a pause to gain-of-function research on certain dangerous viruses and set out to develop a new set of rules following incidents including an unintentional exposure of lab workers to anthrax bacteria and a discovery of some decades-old overlooked vials of smallpox virus.

Some research was allowed to continue: work seeking to identify coronaviruses that might jump to humans. Ralph Baric at the Gillings School of Global Public Health at the University of North Carolina at Chapel Hill and colleagues published a study of a bat virus closely related to SARS, or Severe Acute Respiratory Syndrome, a disease that emerged in 2002 and killed nearly 800 people.

. . .

They inserted a portion of the bat virus into a SARS virus adapted for lab tests in mice—creating a novel pathogen—and sought to see whether it would infect human cells. It did, and in mice it caused disease, though less deadly than SARS.

Then, he and his colleagues published research showing that another virus closely related to SARS infected both mice and human airway cells in the lab. They warned it was “poised for human emergence.”

Dr. Baric has said he thinks SARS-CoV-2 most likely evolved naturally to infect humans, yet he joined the scientists who in May [2021] called for serious investigation of the lab-accident hypothesis as well.

Researchers in Wuhan used techniques similar to his to test whether eight SARS-like bat coronaviruses had the potential to infect human cells, according to a paper they published in 2017. It was part of an effort to find out how SARS-like bat viruses might make changes that would render them a danger to humans.

Biosafety levels in laboratory research range from 1—used in high-school or college labs for work that doesn’t pose a disease risk to humans—to 4, reserved for the most dangerous pathogens.

At least some of the bat-coronaviruses work at Wuhan was done in a level-2 lab, which some U.S. scientists say is too low a safety level for that kind of work.

For the full story, see:

Betsy McKay and Amy Dockser Marcus. “Virus Research Explodes, Igniting Worry.” The Wall Street Journal (Saturday, Sept. 25, 2021): A1 & A12.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date September 24, 2021, and has the title “Virus Research Has Exploded Since Covid-19 Hit. Is It Safe?”)