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Is Huawei a Security Threat? Vietnam Isn’t Taking Any Chances

HANOI, Vietnam — The battle for technological dominance between the United States and China is splitting the world in two, though not always along the lines you might expect.

American allies such as Britain and Germany have signaled that they are unlikely to back Washington’s effort to stop countries from working with the Chinese technology giant Huawei, which American officials call a Trojan Horse for Beijing’s cyberspies. Australia has barred the firm from building its next-generation 5G cellphone networks, even though its economy depends on China’s appetite for natural resources. South Korea and the Philippines have not, despite past frictions with China.

And then there is Vietnam. At first glance, this fast-developing nation might seem to be a natural customer for Huawei. Its economy is entwined with China’s, and Beijing has embraced the country’s Communist Party leaders in Hanoi as ideological brethren.

Yet Vietnam’s leading mobile carriers appear to be keeping Huawei out of their 5G plans, even if the government’s fear of incensing Beijing most likely prevents them from saying so.

All around the world, the Trump administration’s assault on the Chinese firm has turned the purchase of telecommunications equipment from a business decision into a geopolitical one — a test of national allegiances to Washington or to Beijing.

In Southeast Asia, which has been transformed by Chinese money, Huawei has been widely welcomed. The firm opened a 5G testing station in Thailand this year. Indonesia’s communications minister recently told Reuters that the government could not be “paranoid” about Huawei, while Malaysia’s prime minister has said his country will use the company’s technology “as much as possible.”

In Vietnam, though, major mobile carriers have explored 5G collaborations with Ericsson and Nokia, but not with Huawei. The largest among them, Viettel, does not use Huawei equipment in its current 4G network, either, though it has no problem using Chinese technology in some of the other countries where its local subsidiaries provide 4G service, including Cambodia, Laos and Peru.

In Viettel’s telling, none of this means the company, which is owned by the Vietnamese government, is shunning Huawei. Hanoi has never barred Vietnamese telecom providers from using Chinese equipment, Tao Duc Thang, a Viettel deputy general director, said in an interview with The New York Times.

That means Viettel and Huawei could still team up someday, Mr. Thang said. “For the future, we don’t know.”

ImageWestlake Legal Group merlin_157292889_04298010-6d2d-4356-85a9-c051c1a0458e-articleLarge Is Huawei a Security Threat? Vietnam Isn’t Taking Any Chances Vietnam Southeast Asia Huawei Technologies Co Ltd China 5G (Wireless Communications)

Tao Duc Thang, left, a deputy general director at Viettel.CreditLinh Pham for The New York Times

But observers expect that Vietnamese carriers will err on the side of caution when they sign commercial 5G agreements. China and Vietnam fought a brief but bloody war 40 years ago, and Hanoi has watched warily as its northern neighbor’s wealth and military ambitions have grown ever since.

“The whole world needs to be careful with China,” said Maj. Gen. Le Van Cuong, the former director of the Institute of Strategic Studies at the Vietnamese Ministry of Public Security. “If a superpower like America regards China as a cybersecurity threat, then of course Vietnam has to.”

Huawei has long denied that it takes orders from Beijing or that its products are a security risk.

“Vietnam has not been a strong 4G market for Huawei, and we have modest ambitions for 5G there,” said a company spokesman, Joe Kelly.

Mobile internet coverage has increased quickly in Vietnam, and the government is in a hurry to develop its networks further. Today, even remote mountain, coastal and island communities have 4G. Vietnamese leaders say they want 5G connections ready next year, hoping that ultrafast internet will give a jolt to economic development.

But the country’s sour recent relations with Beijing may have made officials nervous about entrusting the task to Chinese companies. Although the two nations see eye to eye on censoring and controlling the internet, they have been at odds for years over territory in the South China Sea, which Vietnam calls the East Sea. After China placed an oil rig off Vietnam’s coast in 2014, marauding crowds of Vietnamese workers stormed factories and attacked Chinese laborers.

In response, Hanoi has cautiously cultivated closer ties with Washington. Still, China is Vietnam’s largest trading partner, and Chinese companies have brought in capital and job opportunities. Living in China’s backyard means Vietnam must keep its powerful neighbor close, but not too close.

“We can’t pick up and move the country somewhere else,” said Do Tien Sam, a former director of the Institute of Chinese Studies at the Vietnam Academy of Social Sciences in Hanoi.

And so Hanoi has endorsed Beijing’s Belt and Road Initiative, an enormous global infrastructure plan. But it has not officially labeled any new building projects as being part of the program.

Close but not too close seems to be the strategy with Huawei, too.

“They don’t want to give China a reason to be angry,” said Alexander L. Vuving, a Vietnam specialist at the Daniel K. Inouye Asia-Pacific Center for Security Studies in Honolulu. “Any indication that the Vietnamese government discriminates against the Chinese would be used as an excuse for the Chinese government to put more pressure on Vietnam.”

Plenty of Chinese tech firms have a lively presence in Vietnam. Along Hanoi’s motorbike-filled streets, cellphone shops advertise Chinese brands such as Xiaomi, Oppo and Vivo.

Vietnam’s leading mobile carriers have explored 5G collaborations with Ericsson and Nokia, but not with Huawei.CreditLinh Pham for The New York Times

The country was not always so wary of Huawei’s telecom equipment. When Viettel began building its 3G network a decade ago, it signed agreements with Huawei and another Chinese supplier, ZTE, according to the research firm TeleGeography.

Thanh Son Dang, a partner in Hanoi at the law firm Baker McKenzie and a former general counsel for Viettel, said Vietnam’s laws regulating the telecom industry sent a clear signal to companies about where their priorities should lie.

“In any regulation, the government of Vietnam always highlights the importance of national security,” Mr. Dang said. The ghosts of wars with China and the West are never far from mind, he said.

Huawei may not be officially banned in Vietnam, but officials here go to great lengths to avoid talking about it.

Last month, Vietnam’s deputy minister of information and communications, Nguyen Thanh Hung, agreed to an interview with The Times. But when a Times reporter arrived in Hanoi, the Ministry of Information and Communications postponed the interview repeatedly over the course of a week.

In the end, no interview took place. The ministry also declined to answer written questions.

Mr. Thang, a deputy general director at Viettel, was initially more open when he met a Times reporter at the company’s offices in Hanoi.

Viettel has been developing its own software and equipment for many years, Mr. Thang said, and employs 300 engineers in research and development. It has designed and produced its own base stations, which exchange radio signals with cellphones, and its own computer systems for billing customers’ accounts, he said.

Most mobile carriers simply buy these things from outside vendors such as Ericsson or Huawei. Mr. Thang said Viettel had deployed around 1,000 self-produced 4G base stations across Vietnam, Cambodia and other countries.

But when asked whether Viettel’s aim in developing its own equipment was to help keep its networks secure, Mr. Thang first consulted in Vietnamese with a company communications officer, Le Duc Anh Tuan, who then answered in English.

The most important reason for Viettel to develop its own software, Mr. Tuan said, is so it can respond more nimbly to customers’ changing needs. Security is not the main factor, he said.

Asked why Viettel didn’t use Huawei in Vietnam but did use Chinese suppliers elsewhere, Mr. Tuan said equipment makers gave the company different deals in each country. “We have many partners,” he said, and Viettel considered each of them on its merits.

At that point, Mr. Thang quietly asked another colleague in Vietnamese how much time had been promised for the interview.

One hour, she replied.

“Why so long?” he said.

Mr. Thang gave vague answers to a few more questions about Huawei before Mr. Tuan said that only five minutes remained in the interview, and that Mr. Thang did not have anything more to say about Huawei.

Chau Doan contributed reporting.

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Tariffs on China Don’t Cover the Costs of Trump’s Trade War

Westlake Legal Group merlin_156648417_22d1cfc3-1331-4e84-b1a5-5523c82cc0e2-facebookJumbo Tariffs on China Don’t Cover the Costs of Trump’s Trade War Vietnam United States Economy United States Trump, Donald J Nucor Corporation International Trade and World Market Customs and Border Protection (US) China

WASHINGTON — President Trump on Monday portrayed America as being on the winning end of his trade war, saying tariffs are punishing China’s economy while generating billions of dollars for the United States, an economic victory that will allow him to continue his fight without domestic harm.

“We’ve taken in tens of billions of dollars in tariffs from China,” Mr. Trump told reporters during a “Made in America” product event at the White House. While China has taken $16 billion “off the table” by stopping its purchases of American agriculture, he said, the United States has “taken in much, much more — many times that in tariffs.”

But government figures show that the revenue the United States has collected from tariffs on $250 billion worth of Chinese goods is not enough to cover the cost of the president’s bailout for farmers, let alone compensate the many other industries hurt by trade tensions. The longer Mr. Trump’s dispute with China drags on, the more difficult it could be for him to ignore that gap.

Mr. Trump’s tariffs on Chinese imports raised $20.8 billion through Wednesday, according to data from United States Customs and Border Protection. Mr. Trump has already committed to paying American farmers hurt by the trade war $28 billion.

The president has rolled out two rounds of financial support for farmers: a $12 billion package that was announced last July, of which nearly $10 billion has been spent, and an additional $16 billion announced in May.

The government has provided no such benefit to the myriad other businesses, including plane makers, technology companies and medical device manufacturers, that have lost contracts and revenue as a result of Mr. Trump’s tariffs and China’s retaliation against American goods.

Trade talks with China have faltered in recent months, and Mr. Trump and his aides appear to be in no hurry to resolve the dispute, projecting confidence that China is suffering more of the harm, if not all of it.

Mr. Trump’s tariffs are undeniably hurting China, where exports power about 20 percent of the economy, compared with 12 percent in the United States. On Monday, the Chinese government said its economy had grown at a 6.2 percent annual rate in the second quarter, the lowest rate in 27 years.

“The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries,” Mr. Trump wrote on Twitter on Monday morning, commenting on the Chinese growth figures. “Thousands of companies are leaving. This is why China wants to make a deal with the U.S., and wishes it had not broken the original deal in the first place.”

There is little sign, though, that China’s loss is America’s gain. Much of the business activity is shifting to other low-cost countries, like Vietnam, with a transition cost attached for American companies that depend on them.

Numerous companies have announced changes in their supply chains or other effects from the tariffs, and more could be revealed as companies report second-quarter earnings in coming weeks. Nintendo has accelerated the shift of its Switch console to Vietnam from China, according to Panjiva, a supply chain research firm, while GoPro, Hasbro and other companies are reworking their supply chains to reduce their exposure to China.

The president and his advisers have argued that now is the time to try to force China to change trading practices that they say have hurt American companies and resulted in the loss of American jobs. The administration argues that the status quo was not without costs to the American economy. An investigation by the administration into Chinese intellectual property theft found that China’s policies had resulted in harm to the American economy of at least $50 billion per year.

Many trade experts and business leaders support confronting Beijing, and some have said the heavy cost of the trade war will be worth it if the United States can persuade China to open up its economy. But most disagree with the administration’s claim that the trade war is having no negative effect on American businesses.

“Certainly it is absolute folly to suggest that this is cost free for the U.S.,” said Rufus Yerxa, the president of the National Foreign Trade Council, which represents major American exporters.

Numerous studies have shown that American consumers are bearing much of the cost of the tariffs. Studies from the Tax Foundation in Washington and the Penn Wharton Budget Model at the University of Pennsylvania have shown that the tariffs amount to a significant tax increase on Americans, by raising the prices of goods. The damage is concentrated, as a percentage of income, among the lowest earners, who spend a larger share of their pay on imports than the upper middle class and the rich.

The administration has gradually increased the amount of Chinese goods subject to tariffs over the last year, from an initial $34 billion to a total of $250 billion, and ramped up the tariff rate on those goods.

But the monthly pace of revenue collection from tariffs has not increased this year. That’s because America is importing fewer Chinese goods than it did a year ago, which has canceled out the higher tariffs on a larger share of Chinese goods.

That decline appears to be the product of an overall slowdown in trade — which has contributed to weakened exports for American manufacturers — and the shift in supply chains to other countries. Imported goods from Vietnam have risen more than 30 percent this year from a year ago, Commerce Department data show.

Tariff revenue would likely surge if Mr. Trump followed through on his threat to impose tariffs on nearly all Chinese goods.

The administration has tried to put the levers of the government to work to shelter and support American businesses. On Monday, Mr. Trump signed an executive order requiring that 95 percent of the steel and iron that goes into projects funded by federal contracts eventually be American made, up from 50 percent.

The order is the latest in a series of proclamations that the president has made to encourage more purchases of American goods. An order in January encouraged companies to use American iron, steel, aluminum, cement and other products to the extent practical, but did not set any binding target.

John Ferriola, the chief executive of Nucor, a steel company in North Carolina, applauded the move. “We believe it’s good for our country, and it’s certainly good for the industry, I can’t deny that,” he said.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Localities Shouldn’t Be Dictating (Inter-)National Policy

Westlake Legal Group world-map-SCREENSHOT-620x368 Localities Shouldn’t Be Dictating (Inter-)National Policy washington D.C. Technology Taxes progressives Privacy Politics Policy News network neutrality Net Neutrality National Security law Internet International Affairs Government Front Page Stories Front Page Foreign Policy fifth generation wireless federalism Economy Constitution China California Business & Economy 5g

California Does Not Have Jurisdiction Over This

 

Federalism is too infrequently mentioned.  And when it does come up – it is woefully misrepresented and abused.

Let’s check with our old friend Merriam Webster:

“The distribution of power in an organization (such as a government) between a central authority and the constituent units.”

Our Constitution is fully imbued with decentralized federalism.

The Founding Fathers – were brilliant.  Not only in limiting for what the “central authority” is responsible – but in rightly assigning the policies for which it is.

The Constitution gives the federal government (the “central authority”) a few expressly enumerated powers.  And then the Ninth and Tenth Amendments give all other power(s) to “the States and the People.”

Merriam’s “constituent units” – are the fifty state and very many municipal governments.  Most unfortunately, as government is want to do – the “constituent units” insist on doing (too much) of their stuff…and the central authority’s limited portion as well.

We certainly see this with immigration.

These are the policies this country has with regard to whom and how many from other countries we allow to come here.

Which is clearly a national prerogative – and therefore clearly a federal government prerogative.

But behold the “Sanctuary _____” – States, Cities, Counties, etc.

These non-federal elected officials openly flout our immigration laws – and allow illegal aliens to stay in their jurisdictions.  Worse, they openly obstruct justice – refusing to cooperate with federal authorities on the rare instances they decide to enforce our immigration laws.

These non-federal elected officials – should be in prison.

And as with all things rightly national – pretending it’s local…doesn’t keep it local.

Los Angeles, California has been a Sanctuary City for decades.  Illegal aliens have spent these decades pouring in there – and the result has been a mass disaster area.

But it doesn’t just stay there.  Once they’re in LA – they don’t have to stay in LA.  They can move to anywhere else in America they wish – completely unfettered by the checks rightly and wisely imposed along our borders.

LA’s alleged local preemption of rightly national immigration policy – doesn’t keep it local.  It becomes a national disaster.

As demonstrated by the massive illegal alien problems throughout the country.  Including in far-flung “border areas” like Long Island, New York and Portland, Maine.

This is our non-federal governments – making massive national messes.

So too are they doing with the World Wide Web.

Get that first word – “world.”  We again check with Merriam:

“The earth with its inhabitants and all things upon it.”

Like with immigration, this clearly means the Internet’s rule and regulation – is a federal government prerogative.

Just like with immigration, there are very many reasons the Constitution insists the Internet is federal – whether the fore-thoughtful Forefathers realized all of them or not.

To wit: We are currently in a race with Communist China to be first to the Fifth Generation (5G) wireless Internet.

If Communist China were to beat us to 5G – it would be bad for our economy.

If Communist China were to beat us to 5G – it would be VERY bad for our national security.

Why the Founders made the Internet federal – economy:

We now invite you to (re)visit the Commerce Clause:

“[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes….”

The most originalist reading….:

“The narrowest definition of ‘to regulate’ is to ‘make regular,’ that is, to facilitate the free flow of goods, but not, except in cases of danger, to prohibit the flow of any good.”

Why the Founders made the Internet federal – national security:

We don’t want Communist China setting global Web standards.  Which they get to do – if they get to 5G first.

There are all sorts of global implications to our World Wide Web policy.  Which is why non-federal governments should be doing…nothing at all to the Internet.

Leftist non-federal officials want very stupid Internet policies imposed.  Policies We the People won’t elect federal officials to impose.  (How dare We not.)

So these provincial officials are unconstitutionally doing it themselves.

Oregon Enacts Net Neutrality Law as Pacific Northwest Trump Resistance Grows

California Lawmakers Pass Nation’s Toughest Net Neutrality Law

Maine Governor Signs Net Neutrality Bill

Again, a reminder – locals messing with national policy…never stays local.

So even if you like a law’s concept – you may not like how this state or that details it.  If you’re to the Right of Karl Marx – you almost certainly won’t like how nation-warping California details it.

California Passes Strict Internet Privacy Law With Implications For The Country

Maine Passes Nation’s Strictest Internet Privacy Protection Law

New Jersey Passes Consumer Privacy Act:

“State laws governing the collection and use of personal information continue to proliferate.”

Again – this is NOT a good thing.

Our nation’s provincial governments are very often…provincial.  In thought and deed.  When they mess with (inter-)national issues – their provinciality is often highly damaging to our nation.

Which of course means provincial officials are more than happy to eviscerate the Constitution’s federalism and damage our national policy – when it means taking more money from us.

Want Cheaper, Better Internet?  Limit the Local Government Shakedowns of Internet Providers:

“(Internet Service Providers) ISPs show up in your area – looking to spend millions or billions of dollars to build or improve their service to you.

“But before they can do that – they must first play ‘Mother May I’ with the government(s) in your area.

“You know, the governments that are already taxing the living daylight out of ISPs.  That now create ridiculous lists of additional demands of ISPs – for the ISPs’ ‘right’ to spend millions or billions of dollars providing you service.

“It’s like very many governments going shopping – with the ISPs’ credit cards….

“The number of cities and towns making…ridiculous demands is staggering.  The wide variety of these ridiculous demands is mind-numbing.

“All of which are geared by government – to find new and additional ways to extract ever more money from the ISPs.”

So…imagine being an Internet Service Provider (ISP).

You have to deal with 194 different nations’ Internet laws, regulations and taxes.  As each enters the US portion of the World Wide Web – and (if you do) you enter each of theirs.

And now you have to deal with fifty different state governments’ Internet laws, regulations taxes?

Oh – and thousands of municipal governments’ laws, regulations and taxes?

What a giant anti-economy, anti-national security, anti-coherence nightmare mess.

The Feds are currently working to restore Constitutional order.

They are looking to streamline the local shakedowns – and preempt the local laws.

God bless each and every one of them for so doing.

The post Localities Shouldn’t Be Dictating (Inter-)National Policy appeared first on RedState.

Westlake Legal Group world-map-SCREENSHOT-300x178 Localities Shouldn’t Be Dictating (Inter-)National Policy washington D.C. Technology Taxes progressives Privacy Politics Policy News network neutrality Net Neutrality National Security law Internet International Affairs Government Front Page Stories Front Page Foreign Policy fifth generation wireless federalism Economy Constitution China California Business & Economy 5g   Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

China’s Economic Growth Hits 27-Year Low as Trade War Stings

BEIJING — China’s growth fell to its slowest pace in nearly three decades, officials said on Monday, as a resurgence of trade tensions with the United States and lingering financial problems take an increasing toll on one of the world’s most vital economic engines.

Chinese officials said the economy grew 6.2 percent between April and June compared with a year earlier. While such economic growth would be the envy of most of the world, it represented the slowest pace in China since the beginning of modern quarterly record-keeping in 1992. That marks a significant slowdown from earlier this year, when growth came in at 6.4 percent, matching a 27-year low reached during the global financial crisis a decade ago.

Premier Li Keqiang set a target in March for economic growth to be between 6 and 6.5 percent this year. The figures on Monday fell within that range.

But much of the growth in the quarter may have taken place in April and early May, when public confidence was higher because of a tax cut in March and heavy infrastructure spending as spring began. Trade talks broke down on May 10 and President Trump raised tariffs sharply on Chinese goods, a step that damaged consumer confidence within China. Growth early in the quarter also would have taken place before the contentious government takeover of a bank in late May hurt financial confidence.

Chinese officials on Monday acknowledged that conditions are becoming increasingly difficult.

“Economic conditions are still severe both at home and abroad, the global economic growth is slowing down, the external instabilities and uncertainties are increasing, the unbalanced and inadequate development at home is still acute, and the economy is under new downward pressure,” said Mao Shengyong, a spokesman for China’s National Bureau of Statistics, in a news conference.

Mr. Mao downplayed the effects of trade, saying China’s economy increasingly relies on consumption.

Monthly economic data, particularly for imports, suggests that the second quarter started strong but then slowed. “There was certainly a surge in activity through April,” said George Magnus, a longtime specialist in the Chinese economy who is now at Oxford University. “Something happened in May.”

The number may also understate the extent of the slowdown. Economists widely doubt the veracity of the overall Chinese growth figure, which shows far more stability than comparable numbers from the United States and elsewhere.

A few sectors of the Chinese economy are doing fairly well. The strongest sector appears to be the construction of infrastructure, much of it paid for with money borrowed by local, provincial and national government agencies. Retail sales ticked up as well.

ImageWestlake Legal Group merlin_155141007_0e4236fa-0d48-4e13-ac35-bef0484946be-articleLarge China’s Economic Growth Hits 27-Year Low as Trade War Stings Politics and Government International Trade and World Market Infrastructure (Public Works) Economic Conditions and Trends China Banking and Financial Institutions

A used car dealership in Beijing. Auto sales have slumped badly.CreditLam Yik Fei for The New York Times

The biggest drag on the Chinese economy lies in trade, which grew powerfully over the past three decades but has stopped rising in recent months. Exports dipped 1.3 percent in June from a year earlier, the government said on Friday, and imports fell 7.3 percent.

While the trade war has hurt American purchases from China, economic weakness in Europe and many Asian countries has caused overseas demand to weaken far more broadly than just in the United States. Last week, Singapore unexpectedly announced that its trade-dependent economy had shrunk at an annualized rate of 3.4 percent in the second quarter.

“The economy is definitely in a broad decelerating trend because the global economy is slowing down, so exports are slowing down,” said Larry Hu, the chief China economist at Macquarie Capital, the investment banking unit of a big Australian multinational.

China’s troubles have their roots not just in trade but also in a debt-laden financial system that has been shaken by a series of large shocks in the last few weeks.

On May 24, Chinese financial regulators took over Baoshang Bank in Inner Mongolia, a small institution that is part of a financial empire previously controlled by Xiao Jianhua, a financier who disappeared into the custody of government investigators two years ago. Regulators tried to force a few of its largest creditors to accept losses rather than bailing them out as a way to teach financiers to be more careful about where they put their institutions’ money.

Problems in some of the shadowy corners of China’s financial system have also frightened investors. China’s shadow banking system plays an important role in funding property projects and other private business ventures. But managers of some riskier investment products have had a hard time making high-interest payments to investors in recent weeks. In some cases they have also had trouble even repaying principal.

These incidents have set off a broader shift in recent weeks away from riskier investments. Institutions and households alike have been putting money into larger, more stable financial institutions run by the central government.

Big state-controlled banks have steered the bulk of their lending to state-owned enterprises. That long-running trend has hurt the real estate market and the broader private sector.

Regulators have repeatedly urged the big banks to lend more to small businesses and the private sector, and Mr. Li, the premier, did so again on July 2. But these exhortations have had limited effect so far. Bank lending officers worry that they might be blamed, or even investigated for corruption, if they extend large loans to struggling private businesses that then default as the economy weakens.

The Chinese economy has come to rely largely on government investment in infrastructure projects. CreditLam Yik Fei for The New York Times

Andrew Collier, the managing director and founder of Orient Capital Research, a Hong Kong investment and economic research firm, said that troubles at Baoshang and in the shadow banking system had rattled financial markets but seemed to have been contained, at least so far.

“The Chinese central bank is watching carefully, and for now will use quiet means to avoid any shaky financial shenanigans,” he said.

Economists are watching for other potential warning signs, like inflation. Price increases have been tame, according to official statistics. But many in China complain that the actual cost of living is rising fast, particularly for food but also for rent and other daily expenses.

Industrial production has weakened this year, as has private sector investment. Housing sales have slowed, as buyers look harder for bargains but sellers have been reluctant to cut prices. Car factories have sharply reduced output in response to weak sales, although there were signs last month that consumer interest in buying luxury automobiles may finally be stabilizing.

The long-running trade war has prompted many multinational companies to look at ways to shift supply chains elsewhere. But many continue to invest in China to supply China’s own market as well as others, especially in Asia.

“The Chinese government will continue to work hard to create a more stable, fair, transparent and predictable investment environment,” Gao Feng, spokesman for the Ministry of Commerce, said at a news briefing on Thursday.

He later added that “China has not experienced large-scale withdrawals of foreign capital.”

For now, though, the economy keeps running to a considerable extent because the Chinese government is pumping huge sums of money into infrastructure. It is building high-speed rail lines, immense highway bridges, ports and other facilities to connect ever smaller and less affluent cities and towns to the rest of the country.

That infrastructure is making it easier to do business and move around even in some of the poorest and most remote areas of China. But bankers and economists worry about whether some of these investments will ever earn enough of a return to cover their cost.

“There’s a very weak commercial basis,” Mr. Magnus said, “for this credit-fueled infrastructure spending.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

China’s Economic Growth Slows as Trade War With U.S. Deepens

BEIJING — China’s growth fell to its slowest pace in nearly three decades, officials said on Monday, as a resurgence of trade tensions with the United States and lingering financial problems take an increasing toll on one of the world’s most vital economic engines.

Chinese officials said the economy grew 6.2 percent between April and June compared with a year earlier. While such economic growth would be the envy of most of the world, it represented the slowest pace in China since the beginning of modern quarterly record-keeping in 1992. That marks a significant slowdown from earlier this year, when growth came in at 6.4 percent, matching a 27-year low reached during the global financial crisis a decade ago.

Premier Li Keqiang set a target in March for economic growth to be between 6 and 6.5 percent this year. The figures on Monday fell within that range.

But much of the growth in the quarter may have taken place in April and early May, when public confidence was higher because of a tax cut in March and heavy infrastructure spending as spring began. Trade talks broke down on May 10 and President Trump raised tariffs sharply on Chinese goods, a step that damaged consumer confidence within China. Growth early in the quarter also would have taken place before the contentious government takeover of a bank in late May hurt financial confidence.

Monthly economic data, particularly for imports, suggests that the second quarter started strong but then slowed. “There was certainly a surge in activity through April,” said George Magnus, a longtime specialist in the Chinese economy who is now at Oxford University. “Something happened in May.”

The number may also understate the extent of the slowdown. Economists widely doubt the veracity of the top Chinese growth figure, which shows far more stability than comparable numbers from the United States and elsewhere.

A few sectors of the Chinese economy are doing fairly well. The strongest sector appears to be the construction of infrastructure, much of it paid for with money borrowed by local, provincial and national government agencies.

ImageWestlake Legal Group merlin_155141007_0e4236fa-0d48-4e13-ac35-bef0484946be-articleLarge China’s Economic Growth Slows as Trade War With U.S. Deepens Politics and Government International Trade and World Market Infrastructure (Public Works) Economic Conditions and Trends China Banking and Financial Institutions

A used car dealership in Beijing. Auto sales have slumped badly.CreditLam Yik Fei for The New York Times

The biggest drag on the Chinese economy lies in trade, which grew powerfully over the past three decades but has stopped rising in recent months. Exports dipped 1.3 percent in June from a year earlier, the government said on Friday, and imports fell 7.3 percent.

While the trade war has hurt American purchases from China, economic weakness in Europe and many Asian countries has caused overseas demand to weaken far more broadly than just in the United States. Last week, Singapore unexpectedly announced that its trade-dependent economy had shrunk at an annualized rate of 3.4 percent in the second quarter.

“The economy is definitely in a broad decelerating trend because the global economy is slowing down, so exports are slowing down,” said Larry Hu, the chief China economist at Macquarie Capital, the investment banking unit of a big Australian multinational.

China’s troubles have their roots not just in trade but also in a debt-laden financial system that has been shaken by a series of large shocks in the last few weeks.

On May 24, Chinese financial regulators took over Baoshang Bank in Inner Mongolia, a small institution that is part of a financial empire previously controlled by Xiao Jianhua, a financier who disappeared into the custody of government investigators two years ago. Regulators tried to force a few of its largest creditors to accept losses rather than bailing them out as a way to teach financiers to be more careful about where they put their institutions’ money.

Problems in some of the shadowy corners of China’s financial system have also frightened investors. China’s shadow banking system plays an important role in funding property projects and other private business ventures. But managers of some riskier investment products have had a hard time making high-interest payments to investors in recent weeks. In some cases they have also had trouble even repaying principal.

These incidents have set off a broader shift in recent weeks away from riskier investments. Institutions and households alike have been putting money into larger, more stable financial institutions run by the central government.

Big state-controlled banks have steered the bulk of their lending to state-owned enterprises. That long-running trend has hurt the real estate market and the broader private sector.

Regulators have repeatedly urged the big banks to lend more to small businesses and the private sector, and Mr. Li, the premier, did so again on July 2. But these exhortations have had limited effect so far. Bank lending officers worry that they might be blamed, or even investigated for corruption, if they extend large loans to struggling private businesses that then default as the economy weakens.

The Chinese economy has come to rely largely on government investment in infrastructure projects. CreditLam Yik Fei for The New York Times

Andrew Collier, the managing director and founder of Orient Capital Research, a Hong Kong investment and economic research firm, said that troubles at Baoshang and in the shadow banking system had rattled financial markets but seemed to have been contained, at least so far.

“The Chinese central bank is watching carefully, and for now will use quiet means to avoid any shaky financial shenanigans,” he said.

Economists are watching for other potential warning signs, like inflation. Price increases have been tame, according to official statistics. But many in China complain that the actual cost of living is rising fast, particularly for food but also for rent and other daily expenses.

Industrial production has weakened this year, as has private sector investment. Housing sales have slowed, as buyers look harder for bargains but sellers have been reluctant to cut prices. Car factories have sharply reduced output in response to weak sales, although there were signs last month that consumer interest in buying luxury automobiles may finally be stabilizing.

The long-running trade war has prompted many multinational companies to look at ways to shift supply chains elsewhere. But many continue to invest in China to supply China’s own market as well as others, especially in Asia.

“The Chinese government will continue to work hard to create a more stable, fair, transparent and predictable investment environment,” Gao Feng, spokesman for the Ministry of Commerce, said at a news briefing on Thursday.

He later added that “China has not experienced large-scale withdrawals of foreign capital.”

For now, though, the economy keeps running to a considerable extent because the Chinese government is pumping huge sums of money into infrastructure. It is building high-speed rail lines, immense highway bridges, ports and other facilities to connect ever smaller and less affluent cities and towns to the rest of the country.

That infrastructure is making it easier to do business and move around even in some of the poorest and most remote areas of China. But bankers and economists worry about whether some of these investments will ever earn enough of a return to cover their cost.

“There’s a very weak commercial basis,” Mr. Magnus said, “for this credit-fueled infrastructure spending.”

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China’s Economic Growth Slows as Trade War With U.S. Deepens

BEIJING — China’s growth fell to its slowest pace in nearly three decades, officials said on Monday, as a resurgence of trade tensions with the United States and lingering financial problems take an increasing toll on one of the world’s most vital economic engines.

Chinese officials said the economy grew 6.2 percent between April and June compared with a year earlier. While such economic growth would be the envy of most of the world, it represented the slowest pace in China since the beginning of modern quarterly record-keeping in 1992. That marks a significant slowdown from earlier this year, when growth came in at 6.4 percent, matching a 27-year low reached during the global financial crisis a decade ago.

Premier Li Keqiang set a target in March for economic growth to be between 6 and 6.5 percent this year. The figures on Monday fell within that range.

But much of the growth in the quarter may have taken place in April and early May, when public confidence was higher because of a tax cut in March and heavy infrastructure spending as spring began. Trade talks broke down on May 10 and President Trump raised tariffs sharply on Chinese goods, a step that damaged consumer confidence within China. Growth early in the quarter also would have taken place before the contentious government takeover of a bank in late May hurt financial confidence.

Monthly economic data, particularly for imports, suggests that the second quarter started strong but then slowed. “There was certainly a surge in activity through April,” said George Magnus, a longtime specialist in the Chinese economy who is now at Oxford University. “Something happened in May.”

The number may also understate the extent of the slowdown. Economists widely doubt the veracity of the top Chinese growth figure, which shows far more stability than comparable numbers from the United States and elsewhere.

A few sectors of the Chinese economy are doing fairly well. The strongest sector appears to be the construction of infrastructure, much of it paid for with money borrowed by local, provincial and national government agencies.

ImageWestlake Legal Group merlin_155141007_0e4236fa-0d48-4e13-ac35-bef0484946be-articleLarge China’s Economic Growth Slows as Trade War With U.S. Deepens Politics and Government International Trade and World Market Infrastructure (Public Works) Economic Conditions and Trends China Banking and Financial Institutions

A used car dealership in Beijing. Auto sales have slumped badly.CreditLam Yik Fei for The New York Times

The biggest drag on the Chinese economy lies in trade, which grew powerfully over the past three decades but has stopped rising in recent months. Exports dipped 1.3 percent in June from a year earlier, the government said on Friday, and imports fell 7.3 percent.

While the trade war has hurt American purchases from China, economic weakness in Europe and many Asian countries has caused overseas demand to weaken far more broadly than just in the United States. Last week, Singapore unexpectedly announced that its trade-dependent economy had shrunk at an annualized rate of 3.4 percent in the second quarter.

“The economy is definitely in a broad decelerating trend because the global economy is slowing down, so exports are slowing down,” said Larry Hu, the chief China economist at Macquarie Capital, the investment banking unit of a big Australian multinational.

China’s troubles have their roots not just in trade but also in a debt-laden financial system that has been shaken by a series of large shocks in the last few weeks.

On May 24, Chinese financial regulators took over Baoshang Bank in Inner Mongolia, a small institution that is part of a financial empire previously controlled by Xiao Jianhua, a financier who disappeared into the custody of government investigators two years ago. Regulators tried to force a few of its largest creditors to accept losses rather than bailing them out as a way to teach financiers to be more careful about where they put their institutions’ money.

Problems in some of the shadowy corners of China’s financial system have also frightened investors. China’s shadow banking system plays an important role in funding property projects and other private business ventures. But managers of some riskier investment products have had a hard time making high-interest payments to investors in recent weeks. In some cases they have also had trouble even repaying principal.

These incidents have set off a broader shift in recent weeks away from riskier investments. Institutions and households alike have been putting money into larger, more stable financial institutions run by the central government.

Big state-controlled banks have steered the bulk of their lending to state-owned enterprises. That long-running trend has hurt the real estate market and the broader private sector.

Regulators have repeatedly urged the big banks to lend more to small businesses and the private sector, and Mr. Li, the premier, did so again on July 2. But these exhortations have had limited effect so far. Bank lending officers worry that they might be blamed, or even investigated for corruption, if they extend large loans to struggling private businesses that then default as the economy weakens.

The Chinese economy has come to rely largely on government investment in infrastructure projects. CreditLam Yik Fei for The New York Times

Andrew Collier, the managing director and founder of Orient Capital Research, a Hong Kong investment and economic research firm, said that troubles at Baoshang and in the shadow banking system had rattled financial markets but seemed to have been contained, at least so far.

“The Chinese central bank is watching carefully, and for now will use quiet means to avoid any shaky financial shenanigans,” he said.

Economists are watching for other potential warning signs, like inflation. Price increases have been tame, according to official statistics. But many in China complain that the actual cost of living is rising fast, particularly for food but also for rent and other daily expenses.

Industrial production has weakened this year, as has private sector investment. Housing sales have slowed, as buyers look harder for bargains but sellers have been reluctant to cut prices. Car factories have sharply reduced output in response to weak sales, although there were signs last month that consumer interest in buying luxury automobiles may finally be stabilizing.

The long-running trade war has prompted many multinational companies to look at ways to shift supply chains elsewhere. But many continue to invest in China to supply China’s own market as well as others, especially in Asia.

“The Chinese government will continue to work hard to create a more stable, fair, transparent and predictable investment environment,” Gao Feng, spokesman for the Ministry of Commerce, said at a news briefing on Thursday.

He later added that “China has not experienced large-scale withdrawals of foreign capital.”

For now, though, the economy keeps running to a considerable extent because the Chinese government is pumping huge sums of money into infrastructure. It is building high-speed rail lines, immense highway bridges, ports and other facilities to connect ever smaller and less affluent cities and towns to the rest of the country.

That infrastructure is making it easier to do business and move around even in some of the poorest and most remote areas of China. But bankers and economists worry about whether some of these investments will ever earn enough of a return to cover their cost.

“There’s a very weak commercial basis,” Mr. Magnus said, “for this credit-fueled infrastructure spending.”

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A Koch Executive’s Harassment in China Adds to Fears Among Visitors

A Koch Industries executive was told he could not leave China. An ex-diplomat who helped organize a technology forum in Beijing was hassled by authorities who wanted to question him. An industry group developed contingency plans, in case its offices were raided and computer servers were seized.

Business executives, Washington officials and other frequent visitors to China who were interviewed by The New York Times expressed increasing alarm about the Chinese authorities’ harassment of Americans by holding them for questioning and preventing them from leaving the country.

They worry that trade tensions between Washington and Beijing could turn businesspeople and former officials into potential targets. Some companies are reviewing or beefing up their plans in case one of their employees faces problems, three people said. Many of the more than a dozen people interviewed by The Times asked for anonymity because they feared reprisals from the Chinese authorities.

“In a very not-so-subtle manner, the Chinese government has upped the ante by detaining Americans at the borders and at their hotels, and with the obvious intent to send a message to the Trump administration that they can engage in hostage diplomacy if push comes to shove,” said James Zimmerman, a partner in the Beijing office of the law firm Perkins Coie, which works with American companies in China.

“If they go in that direction, this would not be received well by the American business community, which puts at risk billions of dollars of investment in China,” he said.

The problems escalated after Canadian officials arrested an executive of Huawei, the Chinese technology giant, at the behest of American officials. China then detained a Canadian businessman and a former diplomat.

The fear spreading through the American business community highlights how fraught ties between the world’s two largest economies have become. Though President Trump and China’s president, Xi Jinping, have agreed to restart trade talks, which broke off in May, the two sides remain far apart on the most contentious issues.

ImageWestlake Legal Group merlin_157181262_86a6b94b-7e19-45ba-9b2f-b1bb9e3d60df-articleLarge A Koch Executive’s Harassment in China Adds to Fears Among Visitors United States Political Prisoners Koch Industries Inc International Trade and World Market China

President Trump and his Chinese counterpart, Xi Jinping, right, have agreed to restart trade talks, yet the two sides remain far apart on the most contentious issues.CreditErin Schaff/The New York Times

The extent of the harassment is unknown, but several recent episodes are likely to add to the concerns. Companies that publicly discuss such problems in China could face punishment from the politicized court system, calls for boycotts in the state-run news media or other punishments meted out behind closed doors. Officials at China’s Foreign Ministry and the Ministry of Public Security, its main police agency, did not respond to requests for comment.

Many American business figures still come and go without major incident. Elon Musk, the chief executive of the electric-car maker Tesla, was offered permanent residency by Li Keqiang, China’s premier, after he visited China in January to open a factory.

Still, a number of recent run-ins with the authorities have prompted broader worries. In late June, one American industry group sent an email to its members detailing how it was trying to mitigate its own risks.

“Foreign staff in particular have reported a high level of anxiety about the current environment,” it said in the message, which was reviewed by The Times. It said it was “in the process of finalizing a detailed crisis plan to be used in the event that one of our offices is raided and/or one of our staff is detained.”

Those plans included a procedure if its servers were seized. It also said it had reviewed insurance policies to ensure that staff evacuations were covered, and it recommended that workers not travel to sensitive parts of China.

Washington officials continue to warn travelers that the Chinese authorities have blocked a number of Americans from leaving China, a practice known as exit bans. Many of those targeted are businesspeople. Often they are naturalized American citizens who were born in China.

In some cases, the Chinese authorities use such bans to exert pressure on Americans who are members of the families of local officials, like the wife and children of Liu Changming, a former executive at state-owned bank accused of fraud. Huang Wan, the American daughter-in-law of Zhou Yongkang, a fallen former senior leader, has also publicly said she has been forbidden to leave.

In early June, a Chinese-American executive at Koch Industries, the conglomerate owned by the conservative billionaire brothers David and Charles Koch, was told he could not leave the immediate vicinity of his hotel in southern China, according to three people with knowledge of the matter. He was then interrogated for multiple days, with the discussion hitting on the trade war and souring relations between the United States and China.

Chinese leaders see American restrictions on companies like Huawei, the telecommunications giant, as an effort to hold back their country’s progress.CreditLam Yik Fei for The New York Times

While the authorities told the man that he would not be allowed to leave China, they did not take his passport. After the State Department intervened, tensions subsided and he was able to fly out of the country, the people added.

Given some of the discussion, two of the people with knowledge of the episode involving the Koch Industries executive said they believed it was an attempt to send a message to Mr. Trump.

The Kochs have traditionally been major financial backers of Republicans, including Mike Pompeo, the secretary of state and a former Republican congressman from Kansas. Koch Industries also has big investments in China, where it employs more than 23,000 people. Last year, a Koch subsidiary said it would put more than $1 billion into a chemical plant in Shanghai.

But the Kochs, whose views are more libertarian than populist, have also criticized Mr. Trump’s trade and immigration policies, prompting the president on Twitter to call them “a total joke in real Republican circles.”

In late June, the authorities tried to interrogate a former Beijing-based American diplomat, according to three people with knowledge of the incident. The former diplomat had been attending an artificial intelligence forum in Beijing, which he helped organize, when a hotel employee called his room on the night of June 25, saying that government security officers in the lobby wanted to speak with him. Alarmed, the former diplomat emailed the other American conference attendees, then went down.

Two plainclothes officers asked him to go with them to answer questions. They asked him about his diplomatic status and whether he had diplomatic immunity, the people said. They demanded to see his passport, which he refused to show.

The former diplomat called American Embassy officials. After a few senior diplomats arrived, the Chinese officers left, the people said.

Other run-ins create an atmosphere of intimidation. Early this year, a technology industry executive who has traveled to and worked in China for more than a decade without major incident encountered authorities in a smaller city in eastern China, according to an account from the person, who asked not to be identified publicly for fear of retaliation.

While the executive was traveling between meetings, a black car appeared to be following, often taking no precautions to disguise its presence. When the executive arrived at the airport to leave, a group of about six men with earpieces and bulletproof vests emerged from the car. One carried a visible sidearm, and another filmed the executive. Two of the men then followed the executive through security to the airport gate before the executive flew out.

As the trade war has intensified, China has tried to use American businesses to send a message to the Trump administration. It summoned American executives in June to warn them that they would suffer if they followed the administration’s proposed ban on sales of American technology. Businesspeople have taken new steps to reduce their profiles when traveling in China, including using burner phones and wiping laptops that may contain sensitive information, according to three people with knowledge of the matter.

Over all, that has led to growing nervousness among businesspeople.

“A lot of Western businesses are not willing to speak up loudly because they think things could get worse,” said Peter Humphrey, a British private investigator who was imprisoned in China in 2013 while working for GlaxoSmithKline. Now living in Britain, he advises companies on security and business issues in China and says his clients face growing retaliation.

“I believe we are seeing the worst environment since the Cultural Revolution,” he added, “in terms of the extent to which people are under surveillance and control, and the extent to which people are punished.”

Nicholas Confessore contributed reporting from New York.

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China and U.S. Differ Over Agricultural Purchases Trump Boasted About

Westlake Legal Group merlin_154849968_f087c222-4547-4ce6-8ea0-519b1a2b92a9-facebookJumbo China and U.S. Differ Over Agricultural Purchases Trump Boasted About United States Politics and Government United States International Relations Soybeans International Trade and World Market Huawei Technologies Co Ltd Economic Conditions and Trends Customs (Tariff) China Agriculture and Farming

WASHINGTON — President Trump emerged from a June meeting in Japan with Xi Jinping, the Chinese president, saying that China would immediately begin purchasing American farm products in return for a trade truce that would forestall more United States tariffs on Chinese goods.

China did not see it that way. People familiar with the negotiations say China has denied making any explicit commitment to buy American farm products during those discussions and instead saw large-scale purchases as contingent on progress toward a final trade deal that is still nowhere in sight.

That is raising questions among trade experts about whether the United States gave up more than it got during Mr. Trump’s recent efforts to de-escalate the trade war.

Mr. Trump agreed to delay imposing tariffs on another $300 billion worth of Chinese imports and said he would ease restrictions on Huawei, the Chinese telecom giant blacklisted in May by the Commerce Department. In exchange, Mr. Trump said China would snap up American farm products.

“China is going to be buying a tremendous amount of food and agricultural product, and they’re going to start that very soon, almost immediately,” Mr. Trump said on June 29. “We’re going to give them lists of things that we’d like them to buy. Our farmers are going to be a tremendous beneficiary.”

But Beijing has yet to engage in any large purchases of American farm goods since the meeting. Two people familiar with Chinese economic policymaking said China did not believe that an explicit agreement had been struck for specific farm purchases.

On Tuesday, Larry Kudlow, a chief White House economic adviser, said the United States expected China to begin making purchases of soybeans, wheat and potentially energy products, but acknowledged they had yet to materialize.

“The president, in a good-faith showing, has indicated that we will cease any new tariffs, any new tariffs,” Mr. Kudlow said. “Now, President Xi is expected — or we hope, in return for our accommodations — to move immediately, quickly, while the talks are going on, on the agriculture front. It’s good faith, but it would be real transactions.”

“Haven’t seen them yet, by the way,” Mr. Kudlow added. “But, yes, that was part of the conversation.”

It appears to be just the latest misstep in a drawn-out negotiation between the United States and China. And it suggests that, despite descriptions of progress by American officials, a protracted trade war that has rocked global markets and clamped down on trade between the world’s two largest economies is likely to continue for the foreseeable future.

Beijing continues to push for the United States to remove the tariffs it has placed on $250 billion worth of Chinese products up front and let China carry out changes to its intellectual property laws and other regulations more gradually, people with knowledge of the talks say. The Trump administration has insisted that its tariffs remain while China makes the promised changes, but it is also eager to find a solution where China will move ahead with large purchases of agricultural goods.

Negotiators from the two countries are continuing to work toward a deal, and large-scale purchases could still happen. On Tuesday, Robert Lighthizer, the United States trade representative, and Treasury Secretary Steven Mnuchin spoke with China’s vice premier, Liu He, and its commerce minister, Zhong Shan, to continue talks, according to a senior administration official.

In a statement on Wednesday, China’s Ministry of Commerce said the two sides “exchanged views on implementing the consensus reached in Osaka” by Mr. Trump and Mr. Xi.

American officials also said on Tuesday that they were already going ahead with part of what Mr. Trump described as his concession: relaxing a ban on Huawei, the Chinese telecom giant that the United States cut off from buying American technology amid national security concerns. The administration will issue licenses for American companies that want to do business with Huawei “where there is no threat to national security,” Commerce Secretary Wilbur Ross said.

The United States has moved to cut the company off from access to American suppliers by placing it on the so-called entity list, which restricts sales of American technology for national security reasons. But companies can apply for licenses to sell specific products, circumventing the ban.

It remains unclear exactly which types of products could be exempted. The American technology industry has been lobbying the administration, saying the restrictions could cut it off from a valuable source of revenue. The ability to continue selling to Huawei could offer a reprieve to American companies like Qualcomm, Intel, Broadcom and Google, which sell Huawei microchips, software and other specialized parts that go into its smartphones and telecom equipment.

Some critics have described the administration’s decision to allow more sales to Huawei as a significant concession — and say it remains unclear what the United States will obtain in return.

“If President Trump has in fact bargained away the recent restrictions on #Huawei,” Senator Marco Rubio, Republican of Florida, said on Twitter on June 29, “then we will have to get those restrictions put back in place through legislation.”

Trade talks with China came to a halt in early May, when Chinese negotiators said they could not accept some provisions that had tentatively been agreed to in a draft pact. The United States accused Beijing of backtracking. Both sides immediately escalated their trade war, with Mr. Trump raising tariffs on $200 billion worth of goods and threatening to tax nearly all Chinese imports. China retaliated with higher tariffs on American goods.

The prospect of a prolonged trade conflict has shaken stock markets and Mr. Trump’s political base heading into the 2020 election. So hopes were high when Mr. Trump emerged from a meeting with Mr. Xi in late June with a temporary truce.

The president has been eager to reduce the trade war’s pain on American farmers, who send about one-third of their crops to China. Farmers are an important source of political support for the president, but they have been battered by the conflict in which the United States has ramped up tariffs on China.

China has placed retaliatory tariffs on American products, including soybeans. And Beijing has directed its state-owned companies to start and stop purchases of American products as a lever in the conflict. Its huge state-owned agricultural trading companies, which handle food imports, have been shifting their orders to other countries, like Brazil.

In the days leading up to the meeting between Mr. Trump and Mr. Xi in Osaka, China made large purchases of soybeans as an apparent good-will gesture. On June 28, the United States Agriculture Department announced that Chinese importers had bought 544,000 tons of soybeans, the largest sale to China since late March.

But no unusually large purchases have been reported since then, and it remains unclear whether China will continue making significant purchases.

Chinese officials have maintained that any further purchases would be made only as part of a trade deal rather than as a unilateral concession, said Eswar Prasad, a professor of international trade at Cornell University and the former head of the International Monetary Fund’s China division.

“China has made a commitment in principle to purchase more American goods, including agricultural products, but it is a commitment conditional on some progress in the trade talks,” Mr. Prasad said. “China has no intention of following through on its commitment if the trade talks founder.”

When questioned directly about Mr. Trump’s statement on farm purchases last week, a spokesman from the Chinese Ministry of Commerce avoided giving a specific answer.

“China and the United States have strong complementarities in the field of agricultural products trade, and there is huge space for cooperation,” said the spokesman, Gao Feng, adding that China did not want to see agricultural trade affected by trade frictions between the countries.

“Agricultural trade is an important issue that needs to be discussed by both sides,” Mr. Gao said.

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We Are Surrounded by Intellectual Property – Until We Aren’t

Tom Cruise has made more than a little bit of money as an actor.

For which Cruise has to thank genetics, astronomical-odds-beating luck – and rigidly protective copyright laws.

These Intellectual Property (IP) statutes protect the movies in which Cruise appears.  Thereby ensuring said flicks are (mostly) commercially available in formats on which he and his cohorts make money.

And most rightly and righteously, when thieves (like Communist China) steal movies – joints like the Motion Picture Association of America (MPAA) act.

The Cost of Movie Piracy

MPAA Names Top Online Sites Pirating Movies

MPAA Wins Movie Piracy Case in China After Failed Anti-Piracy Deal

The reason we mention Cruise specifically – is a scene from his 1988 flick Cocktail.  In which he and actress Elizabeth Shue – sit in glorious admiration of the IP all around them.  And, of course, the millions of dollars each IP item represents.

(Just millions?  Hey – it was the 1980s.  Don’t let inflation and economic growth throw you.  It’s now billions – and then some.)

Westlake Legal Group Tom-Cruise-drink-umbrella We Are Surrounded by Intellectual Property – Until We Aren’t trademark Technology Politics Policy Patents law intellectual property theft Intellectual Property Protections Intellectual Property Government Front Page Stories Front Page Federal Trade Commission Economy Courts copyright China Capitalism Barack H. Obama

Behold:

Cruise: “You know – there’s a guy who makes these.  (He’s holding a drink umbrella.)

Shue: “One guy.  He must be exhausted.”

Cruise: “Yes, he is.  But still – he gets up in the morning, he kisses his wife and he goes to his drink umbrella factory.  And he whips out ten billion of these a year.  This guy’s a millionaire.”

Shue: “How about the guy who makes these?  (She picks up an ashtray.)”

Cruise: “What about that guy.  Not to mention the guy who makes these.  (He picks up a wrapped toothpick.)”

Shue: “And those little wrappers are made by another guy.”

Cruise: “What about these plastic things at the end of these (shoe) laces?”

Shue: “Hmmm.  It’s probably got one of those weird names too – like ‘Flugelbinders.’”

Cruise: “We sit here – and we are surrounded by millionaires.”

Indeed we are.  Only now it’s millionaires and billionaires.

And the foundation of all that wealth creation – is IP protection.

Each and every item Cruise and Shue highlight – are protected by patents.

In real life, someone had the very helpful idea – to wrap the ends of shoe laces in plastic.  Born was the flugelbinder.  (Actually, it’s called an aglet).

And that someone – then patented his idea.  Because that’s what you do when you have a good idea.  You look to lock it down with the IP protections expressly described in our Constitution:

“The Congress shall have Power To…promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries….”

You can not have a successful economy or country – without private property protections.  And by private property – we mean both physical and intellectual.

Looking for another bolsterer of IP – besides Cruise and Shue (and screenwriter Heywood Gould)?

Will Abraham Lincoln do?:

“(Lincoln) called the introduction of patent laws one of the three most important developments ‘in the world’s history,’ along with the discovery of America and the perfection of printing.”

Well that’s fairly important.

In this the Digital Age and the Information Economy – Intellectual Property and its protections have only become even more important than that.

So why did we spend the entirety of the Barack Obama Administration undermining it all?

The Administration spent its eight years issuing all sorts of regulations and rulings – and filing all sorts of lawsuits – all designed to undermine IP.

Republicans were hardly better.  In sickening pursuit of Silicon Valley political coin, they gleefully drafted and passed the very awful, very-awfully-misnamed America Invents Act.

Which – like the Affordable Care Act – did the exact opposite of what the name suggests.  It strip mined IP protections from anyone inventing anything.

And of course, the-most-anti-IP-President-ever Obama – gleefully signed it.

The result?  When Obama entered the White House, the US was on the global innovation ranking list – consistently #1 or very close to it.

By the time we were rid of Obama?

Intellectual Property Crisis: U.S. Drops Out Of The Top Ten In Innovation Ranking

President Donald Trump is on several fronts addressing the Obama anti-IP mess he inherited.

Congress should – amongst other things – as rapidly as possible pass Kentucky Republican Congressman Tom Massies actually-accurately-named Restoring America’s Leadership in Innovation Act.

As Cruise and Shue noted, we are surrounded by IP.

Until one day we wake up to find the IP creators have left the US – and taken their IP with them.

Because we decided to do everything we could to be vociferously inhospitable to them.

Of course, their eventual departure is only understandable.  Because – human nature.

If I repeatedly beat you about the head and shoulders with a bat – I should at least have the decency to not act surprised when you get up and leave.

We absolutely must get back into the IP protection business.  Our economic and national security depends on it.

And each of us must work to ensure those in a position to clean up this mess – clean up this mess.

This means you.

Abe Lincoln will thank you.

And Tom Cruise will buy you a drink.

 

The post We Are Surrounded by Intellectual Property – Until We Aren’t appeared first on RedState.

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A Billionaire’s Fall Spotlights Child Sexual Abuse in China

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SHANGHAI — The detention of a billionaire Shanghai real estate developer in a case linked by Communist Party officials to the alleged sexual molestation of a 9-year-old girl has triggered a national bout of soul searching in China, where such crimes are rapidly moving toward the top of law enforcement priorities.

Wang Zhenhua, a prominent businessman and philanthropist in China, was detained by the police on July 1 for “personal reasons,” according to his company, Seazen Holdings. The company’s announcement followed articles in Shanghai media last week alleging that Mr. Wang had assaulted a 9-year-old girl.

The Shanghai police have said only that they detained a 57-year-old man with the surname Wang on suspicion of wrongdoing as they investigate a child-molestation incident that injured a 9-year-old girl. The person has not been charged with a crime. But Chinese officials and state media have increasingly criticized Wang Zhenhua — who is 57, according to company statements — after Chinese censors’ initial efforts to block the news reports led to a public backlash. China Central Television, the government’s main broadcaster, called for a full investigation and cited the media reports identifying the detained man as the chairman of Seazen Holdings.

The Communist Party’s powerful Central Committee for Political and Legal Affairs, which oversees the country’s law enforcement agencies and courts, issued a stern commentary over the weekend declaring, “Sexual assault on children will surely be dealt with by the sword of the law, no exception!” The commentary cited the media reports naming the real estate developer and said that “it does not make sense” to pretend he is not the person involved in the sexual abuse case.

On Monday, the Shanghai branch of China’s top advisory body, the Chinese People’s Political Consultative Conference, said it had revoked Mr. Wang’s membership, without detailing why.

A call to Mr. Wang’s mobile phone was automatically forwarded to a message service. No information has been released regarding whether the authorities have allowed him access to legal counsel.

Seazen Holdings, which is China’s eighth-largest real estate company by sales, later released a public apology that did not specify what Mr. Wang might have done but said, “Any action that infringes on juveniles should be punished severely by the law.”

The case has sparked intense discussion in China over the victimization of children. It also follows the arrest in the United States on Saturday of Jeffrey Epstein, the American financier, though he faces allegations that he and his employees engaged in a sex-trafficking scheme involving dozens of girls, rather than the single incident described by Chinese police.

Numbers are scarce, but experts agree the data that does exist probably vastly undercounts incidents of abuse across China. The country’s courts dealt with 11,519 cases involving child molestation from the beginning of 2015 to November 2018, according to Xinhua, the state’s official news agency.

Shang Xiaoyuan, the director of the family and child research center of Beijing Normal University and a director of the Child Welfare Protection Council of China, said studies had estimated that 1 percent of all Chinese children were raped and that many times more were put in sexual contact with adults. Girls’ Protection, a Chinese public welfare group, said in its most recent report that the cases made public were “only the tip of the iceberg.”

Over the past two decades, hundreds of millions of people — a group almost as large as the population of the United States — have moved from the Chinese countryside to its crowded cities to seek their fortunes. Tens of millions of children have been left behind in rural areas, often with limited care.

In that environment, the sexual abuse of children has proved hard to control, said Professor Shang. “It’s like a disease which can happen anywhere,” she said.

Chinese officials have vowed to step up enforcement. China’s law enforcement agencies and courts changed their procedures in 2013 to make it easier to prosecute sexual abuse of children under age 12 and ordered severe punishment, particularly when there was an organized effort to procure children for sexual abuse. Last year, China’s top prosecutors recommended a further crackdown on sexual abuse of children.

The usual penalty for child molestation in China is less than five years in prison, said Zhou Hao, a lawyer in Beijing. But if other charges are also leveled, the term could be five to 15 years, he said.

The reports regarding Mr. Wang have led to a wave of online anger in China. That anger intensified after the initial decision of government censors to block online discussions and media reporting of the case. That decision, quickly reversed under public pressure, has raised the question of whether the government is too quick to protect wealthy and well-connected citizens even when they are accused of criminal misconduct. Some Chinese media outlets over the past few days have called sexual abuse of children a national problem, though the instances they have cited mainly involved educators at elementary schools.

Discussions of the incident began last week when Xinmin Evening News, a Shanghai news outlet, reported that a woman identified only as “Ms. Zhou” had taken a 9-year-old girl and a 12-year-old girl from Jiangsu Province to neighboring Shanghai. Local media said that the girls’ parents were friends of Ms. Zhou’s, and that she had told the parents that she was taking the girls to Shanghai Disneyland.

Xinmin said that Ms. Zhou had taken the girls instead to meet Mr. Wang at a hotel, and that the real estate developer had “committed a crime” with the younger girl.

The Shanghai police statement said a Ms. Zhou had also been detained in the child molestation case, but also did not give a full name.

A spate of other Chinese media began publishing similar stories after Xinmin’s, but these quickly disappeared. After the Shanghai police released their statement late last Wednesday, further stories appeared online and were not censored.

Seazen’s Shanghai-traded shares have fallen by more than one-quarter since last week. At an emergency meeting last week, Seazen’s board replaced Mr. Wang with his son, Wang Xiaosong.

Seazen has portrayed Wang Zhenhua as a self-made man. He worked in a state-owned cotton mill in Changzhou, in Jiangsu Province, and started his own textile factory in 1988 before going into real estate in the 1990s.

With real estate prices soaring over the past quarter-century in Shanghai and nearby cities, Seazen’s sales reached $32 billion last year. But like many other property developers, it has been hit by overbuilding and a surplus of empty apartments in many parts of China. In April, the Shanghai Stock Exchange issued a public list of 16 questions for the company about its shrinking cash flow, high borrowing costs and rising number of transactions with related parties.

Seazen had also filed a statement with the Shanghai Stock Exchange in 2016 that Mr. Wang had been investigated by a neighborhood commission in Jiangsu Province for unspecified “personal reasons.”

Mr. Wang is a philanthropist who has donated money for school libraries and instructors in poor areas. According to Chinese media, he visited school groups that benefited from his charity and presented himself to children as “Uncle Wang.”

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