China News - 1 June 2021

International

China allows three children in major policy shift. The policy has already been trialled in the northeastern province of Heilongjiang, but achieved limited success due to family fears over financial security. Chinese state media agency Xinhua ran a poll to gauge reactions on popular social media platform Weibo, with 90% of respondents answering that having three children was ‘completely out of the question’. The poll was removed only minutes after it went online. BBC, WSJ, The Guardian, FT, 31 May

Covid: Wuhan lab leak is ‘feasible’, say British spies. Britain's intelligence agencies are helping the US investigate whether Covid leaked from a Chinese laboratory, The Telegraph has learned. The Times, The Telegraph, NYT, 30 May

Hong Kong’s Security Bureau prohibits citizens from taking part in the annual candle-lit vigil to commemorate the 1989 Tiananmen Square Massacre. Those who attend will face up to five years in prison, whilst those who publicise it could be jailed for a year. Seasoned democracy activist, ‘Grandma Wong’, aged 65, was arrested on Sunday for staging a solitary protest. Hong Kong Free Press, iNews, 29 May

China trying ‘to undermine Australia and New Zealand’s security’, warns Australian PM Morrison. Following talks with New Zealand counterpart Jacinda Arden, Scott Morrison said those who were trying to drive a wedge between Canberra and Wellington would not succeed. China’s foreign ministry hit back, accusing the two prime ministers of ‘gross interference’. FT, The Guardian, 31 May

Don't take on China alone, says ex-Australia PM Kevin Rudd. Countries should unite against China's growing economic and geopolitical coercion or risk being singled out and punished by Beijing, Kevin Rudd told the BBC. BBC, 29 May

Revealed: Chinese weapon scientist has been working at the heart of Cambridge University's crucial research into new battlefield material. Jake Ryan. Mail On Sunday, 29 May

Polish trial begins in Huawei-linked China espionage case. Polish authorities arrested two men in January 2019 on suspicion of spying for China, with one of the suspects, Wang Weijing, using the cover of being a Huawei executive. Reuters, SCMP, 1 June

Chinese Foreign Minister Wang Yi met the Irish Minister for Foreign Affairs and Defence in the southwestern Chinese city of Guiyang on Monday. He stressed pragmatic cooperation between the two nations and a mutual commitment to multilateralism. Ireland is one of the few EU member states that has had a trade surplus with China for over 10 consecutive years. CGTN, 31 May

The Chinese government has reimposed travel curbs due to a Covid outbreak in the southern province of Guangdong. With the caseload jumping to 23 on Monday, a total of 519 flights at Guangzhou Baiyun International Airport were cancelled. SCMP, Reuters, 31 May 

Britain's new aircraft carrier takes part in NATO exercises in the Mediterranean. Reuters, 28 May

New prime minister promising to tear up Samoa's deals with China locked out of parliament by pro-Beijing opposition. The Telegraph, The Times, 29 May

Economy & tech

Chinese factory activity dropped slightly in May, but consumer spending was bolstered by the five-day Labour Day holiday. Analysts say that the ‘rosy picture’ of China’s economic activity faces multiple challenges, including high commodity prices, chip shortages, uncertainty around the role of the yuan, and domestic covid outbreaks. SCMP, WSJ, 31 May

China boosts measures to cool renminbi rally. The People’s Bank of China will raise Chinese financial institutions' required reserves from 5 to 7 per cent of total foreign exchange deposits. FT, 1 June

Beijing mulls a new holding company for Huarong, bad debt managers. China’s finance ministry may transfer its shares in China Huarong Asset Management and three other bad debt managers to a new holding company modelled on the one that owns the government’s stakes in state-run banks. SCMP, 1 June

Longer reads & opinion

The $3bn blunder: how China dominates Pacific mining, logging, and fishing. China received more than half the total tonnes of seafood, wood, and minerals exported from the region in 2019. Josh Nicholas in The Guardian, 30 May

China’s inconvenient truth. China is facing social fragmentation with discrimination based on gender and ethnicity rampant, the rural-urban divide widening, and online nationalism becoming increasingly difficult to control. Elizabeth Economy. Foreign Affairs, 28 May

Once upon a time in Chinatown: the struggles of London’s first Chinese migrants. SCMP, 29 May

China’s wolf warriors bristle at Covid blame. Gideon Rachman. FT, 31 May

Is Southeast Asia ready for a US-China tech decoupling? Lowy Institute, 30 May

The impact of the National Security Law on Hong Kong. A timeline of developments outlining how the city has changed over the last year. Reuters, 31 May