Summary of today’s Essential Eight:
++ Wang Yi at the UN + - Among Wang YI’s meetings was one with Russian Foreign Minister + Lavrov. There was nothing in the readout from the Lavrov meeting + that would indicate a shift in the PRC position in the Russian + invasion of Ukraine. Wang will meet US Secretary of State + Blinken Friday. + +
++ Two more sentences in “Sun Lijun clique” case + - Authorities are wrapping up the Sun Lijun "clique" case before + the 20th. Today both Fu Zhenghua and Wang Like were sentenced + death with a two year reprieve, and both releases said they had + no possibility of parole or reduction in sentence. Sun has yet + to be sentenced but it feels like it will happen imminently. + Given his leadership role he should at least get life in jail, + if not the actual death penalty, though he was promoted for + years by people above him in the system so perhaps he performed + “meritorious service” and ratted out other senior officials. + +
++ Weekly State Council Executive Meeting + - This meeting did not offer any significant economic boosts, + among other things it reviewed reports of the inspection teams + sent to several provinces to check on implementation of economic + stabilization measures, promised more administrative reforms, + and cut toll fees for freight trucks by 10% and + government-designated cargo port charges by 20% in Q4. + +
++ Why this economic downturn may be different + - Two good pieces, one from Logan Wright and another from “China Charts”. The real estate boom is over and it is not coming back any + time soon, if ever. That is the outcome the policymakers have + been targeting for years, though they may have been + overconfident in their ability to rein in real estate without + creating dangerous domino effects throughout the economy. We are + all waiting for the 20th Party Congress outcomes, but I see no + reason to think there will be outcomes from that meeting that + reverse the trajectory of the real estate sector. + +
++ PCAOB Audit inspections in Hong Kong + - The trial audits of PRC firms are underway, so far the signs + are positive that the PRC side understands the concessions + needed to keep the PRC firms listed in the US, but as the PCAOB + chair said today “The Holding Foreign Companies Accountable Act + demands complete access. The agreement we signed with our + Chinese counterparts guarantees complete access. And the PCAOB + will accept nothing less than complete access when we make our + determinations by the end of this year. When I say no loopholes + and no exceptions, I mean none.” Having a law that allows little + room for concessions has been very helpful to US negotiators. + +
++ Nvidia CEO does not sound too worried about China sales + - The CEO told Caixin that ““There will be versions that are + going to be not restricted and serve the needs of the vast + majority of our market very comfortably” and he told Stratechery + that “The limitations and the restrictions are very specific to + a combination of computation level and multi-chip + interconnection level. That restriction gives us plenty of + envelope to go and run our business and for the vast majority of + our customers in China”. +
++ US-PRC scientific relations + - There are two new reports of note, one on scientists who + worked at Los Alamos labs and then returned to the PRC and + contributed to PRC weapons development, and another on the + outflow of Chinese scientists from the US. + +
+Thanks for reading.
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