This week: Trump’s ‘invisible deal’ with China; What next for the NBA in China?; China now faces the rage of gamers; U.S. government sanctions China for abuse of Muslim minorities; Erasing Fan Bingbing
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Monday, October 14, 2019

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1. Trump’s ‘invisible deal’ with China
Photo credit: SupChina illustration

A tentative, partial, “phase one” trade “deal”

Last Friday, 463 days since the first round of large-scale tariffs kicked off the first great Sino-American trade war of the 21st century, President Trump announced a deal.

Well, a partial truce.

Well, a “phase one” agreement.

But it’s not in writing.

And China didn’t confirm that there was a “deal.”

A very generic readout from Chinese state media Xinhua says, “the two sides achieved substantial progress…discussed the arrangement for future consultations, and agreed to make joint efforts toward eventually reaching an agreement.”

The Wall Street Journal reported on what little details we have about what it called a “Tentative ‘Phase One’ Trade Pact”:

  • “The rough framework hashed out in two days of talks between senior U.S. and Chinese officials in Washington included a Chinese agreement to purchase American farm products totaling $40 billion to $50 billion, President Trump said, without specifying over what time period that would occur.”
  • “In exchange, the Trump administration said it would forgo a planned increase in tariffs to 30% from 25% on $250 billion in annual imports from China scheduled” for October 15.

“The U.S. appears to be far from its original goal of getting China to overhaul its economy and is instead saving major structural issues to negotiate later,” the WSJ says.

But wait, it’s even worse

Bloomberg now reports that even for this limited agreement, “China wants to hold more talks this month to hammer out the details of the ‘phase one’ trade deal touted by Donald Trump before Xi Jinping agrees to sign it.”

In other words, what Trump called over the weekend “by far…the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country” is in fact exactly what Scott Kennedy of the Center for Strategic and International Studies called it: an “invisible deal.”

Join us in New York for industry-focused breakout sessions with leading industry experts exploring how financial services, digital marketing, supply chains, philanthropy, and healthcare are evolving in China — and what it means for these industries (and your career!) here in the U.S. Click here to learn more.

Early-bird ticket period ends October 18th!!

2. What next for the NBA in China?
Photo credit: SupChina illustration

After six days of full-court pressure on the NBA because Houston Rockets General Manager Daryl Morey had tweeted his support for Hong Kong protesters, China relented on October 10, sending out a censorship directive to state media organizations to “cool down and do not hype related topics.”

But that was not before:

Amid the intense backlash on the entire league to a tweet from a single team’s GM, NBA commissioner Adam Silver insisted that “the NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues.”

This was a “noble, and potentially expensive, sentiment,” wrote Matt DeButts on SupChina. Silver’s delineation of “the people of China” — and their genuine passion for NBA basketball — and the Chinese government and its harsh censorship of political speech was also admirable.

Cooler for now, but will it stay that way?

Maybe Silver’s stand wasn’t that expensive, after all: A preseason game between the Brooklyn Nets and the Los Angeles Lakers went ahead despite the tensions, and Tencent has recently agreed to resume streaming of NBA games.

But the NBA still has a huge amount at stake in China, and as Tom Ziller at SBNation writes, “[Steve] Kerr and [Gregg] Popovich, wise and conscious of their images as worldly truth-speakers, could decide now that all NBA players are out of the country, they can be more critical of China.” Then, everything the NBA has invested in China could be at risk again.

To learn more, see our related article, The NBA’s operations in China, explained.

3. China now faces the rage of gamers
Photo credit: Illustration by Reddit user glitch777

Within days of the NBA controversy starting, a separate huge controversy also erupted in esports. Chung “Blitzchung” Ng Wai, a pro Hearthstone player from Hong Kong, was suspended for a year and denied a reported $10,000 in prize money after donning a gas mask and shouting “Liberate Hong Kong. Revolution of our age!” in a post-match interview.

Blizzard, the company that makes Hearthstone, has since returned the prize money to Blitzchung and reduced his suspension to six months, but has doubled down on its policy to punish political speech from professional gamers. The company has been met with a fierce backlash:

  • Two esports casters, Nathan Zamora and Brian Kilber, have announced they are stepping down from hosting Hearthstone competitions.
  • The Reddit forum for Blizzard — viewable here — is now a nonstop anti-Chinese-government meme-creating machine. Anyone familiar with this corner of internet culture will know that grudges are not short-lived in this space.
  • The CEO of Epic Games, a rival games studio, announced that he “supports the rights of…players and creators to speak about politics and human rights.” Some observers had pointed out that Blizzard has a 5 percent investment from Chinese technology giant Tencent. Epic Games has an investment from Tencent of 40 percent.

4. U.S. government sanctions China for abuse of Muslim minorities
Photo credit: Ozan Kose / AFP / Getty / SupChina illustration. The demonstrator’s mask bears the light blue color of East Turkestan, the independent homeland that many Uyghurs envision.

China’s system of mass internment camps for Uyghurs and other Muslim ethnic minorities in Xinjiang has been documented in a steady stream of compelling reports over the past two years, starting in the fall of 2017 and through recent months.

Activists have long wondered when the U.S. might act to try to stop the human rights abuses. The Trump administration had reportedly held off on any formal action to sanction China for the abuses, reportedly to avoid disrupting trade talks.

But now, the delay is finally over. Last week, two significant measures were taken:

  • The U.S. Commerce Department has put 28 Chinese companies and public security bureaus on its Entity List, banning American companies from supplying them. “The companies added to the so-called ‘Entity List’ include facial recognition start-ups Sensetime, Megvii and Yitu, video surveillance specialists Hikvision and Dahua Technology, AI champion iFlyTek, Xiamen Meiya Pico Information Co and Yixin Science and Technology Co,” per the SCMP.
  • Visa restrictions for “complicit” Chinese officials were also announced by the State Department, though the scope of these measures has still not been defined.

What effect will these sanctions have?

With these moves last week, the U.S. has become the first country to sanction any Chinese company or official for abuses in Xinjiang. The move was welcomed by human rights activists, but some of the implementation and timing may not have been what they were hoping for:

  • The practical effects will be largest for the companies on the Commerce Department’s Entity List. Video surveillance companies in particular, like Hikvision and Dahua, will struggle to find replacements for American-made or -designed components, reporting from the Financial Times has indicated.
  • But some of the abusive companies were, until now, flying high. iFlytek, which specializes in automated voice recognition, one of many biometric markers that authorities have forcibly obtained from ethnic minorities in Xinjiang, is expecting its profits to “surge at a pace ranging from 50.61 percent to 73.43 percent year on year,” according to a filing to the Shenzhen Stock Exchange.
  • The visa restrictions were not as severe as some activists had hoped, as they did not invoke the Magnitsky Act, which would have additionally frozen assets of individuals.
  • Finally, the timing of the sanctions — only two days before U.S.-China trade talks began in Washington, D.C. — was seen as less than ideal. Samm Sacks, an expert in Chinese technology policy, said that the timing has the effect to “undermine any US credibility on human rights issues going forward because it’s clear we only take action when it serves other interests.”

5. Erasing Fan Bingbing
Photo credit: SupChina illustration

Here’s a wild story out of China’s entertainment industry: Fàn Bīngbīng 范冰冰, a superstar actress who fell out of favor in the past year due to a tax evasion scandal, is being “digitally scrubbed” from a TV drama in which she stars. One of her co-stars, Gāo Yúnxiáng 高云翔, who was accused of sexual assault in Australia, is also being retroactively replaced.

Sixth Tone has the details:

Two scandal-struck megastars in the long-delayed costume drama “Win the World” are being digitally scrubbed from the show, according to its producers.

In a statement [in Chinese] Tuesday, Talent Television and Film Co. Ltd. said it had enlisted Tmall Technology, a company under ecommerce giant Alibaba, to replace Gao Yunxiang and Fan Bingbing with as-yet-unnamed “top-tier actors” by means of “scene refilming, technological tools, audio re-recording, etc.” The studio also assured potential viewers that the estimated 60 million yuan ($8.4 million) in changes, slated to be completed by the end of this year, would not adversely affect the quality or integrity of the show.

See also our previous Weekly Briefing story on a “deepfake” face-swapping app that went viral a month ago: Zao! Your face is now in a Chinese server.

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