China News - 20 May 2022

International

Canada bans China’s Huawei, ZTE from 5G wireless networks. Industry Minister Francois-Philippe Champagne said on Thursday Canada plans to ban the use of China's Huawei and ZTE 5G gear to protect national security, joining the rest of the so-called Five Eyes intelligence-sharing network. A policy statement read: “The Government of Canada has serious concerns about suppliers such as Huawei and ZTE who could be compelled to comply with extrajudicial directions from foreign governments in ways that would conflict with Canadian laws or would be detrimental to Canadian interests.” Reuters, BBC, 20 May

Sajid Javid urged to ban Chinese genomics company over human rights concerns. A group of MPs, Lords and campaigners have written to the Health Secretary calling for a moratorium on work with BGI Group - which has been awarded Government Covid testing contracts - over concerns it has been used to suppress China’s Uyghur population. BGI was added to the US entity list, which prevents American companies and government entities from doing business with it, in 2020. The Telegraph, 19 May

China insists party elites shed overseas assets, eyeing Western sanctions on Russia. China’s Communist Party will block promotions for senior cadres whose spouses or children hold significant assets abroad, people familiar with the matter said, as Beijing seeks to insulate its top officials from the types of sanctions directed at Russia. The ban, outlined in an internal notice by the Central Organization Department, could play a role in Xi Jinping’s efforts to increase his influence within the Party. WSJ, 19 May

China in talks with Russia to buy oil for strategic reserves. China is seeking to replenish its strategic crude stockpiles with cheap Russian oil, according to people with knowledge of the plan, a sign Beijing is strengthening its energy ties with Moscow just as Europe works toward banning imports due to the war in Ukraine. Bloomberg, 19 May

UN human rights chief finally about to visit Xinjiang. Chinese officials say that Michelle Bachelet is welcome, but only on a friendly visit aimed at “exchange and co-operation”, not an investigation. In Beijing, Western diplomats expect that Ms Bachelet will be given the “Olympic bubble” treatment, with covid used as an excuse to isolate her from any uncontrolled engagement. The Economist, 20 May

China sends special envoy to Brussels in bid to salvage souring ties with EU. Wu Hongbo, Beijing’s special representative for Europe, will meet officials to discuss the fallout from last month’s virtual EU-China summit and the EU’s upgrading of trade ties with Taiwan, a Brussels source told the SCMP. SCMP, 19 May

China and North Korea rattle sabres as Biden tours Asian allies. The Times, 19 May

Xi calls for expanding BRICS bloc of emerging economies. Nikkei Asia, 20 May

Shanghai prepares to partially reopen on Sunday. Caixin, 20 May

Economy & tech

Controlling stake in Arm China may shift to little-known entity as chip joint venture’s ownership saga drags on. Lotcap Group said it has agreed a letter of intent with Chinese shareholders of Arm China to buy a 51 per cent stake in the joint venture, adding a layer of mystery to the British chip design firm’s joint venture. SCMP, 20 May

TSMC looks to build multibillion-dollar chip plant in Singapore. Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, is considering building a semiconductor factory in Singapore to help address a global supply shortage, according to people familiar with the matter. WSJ, 19 May

Shadow of ‘Twitter circus’ over Tesla. Tesla faces an “epic disaster” in China as Covid-19 lockdowns in the country affect its manufacturing output, according to leading analyst Dan Ives. Ives also suggested that Musk’s wrangling with Twitter over his $44 billion takeover presented a “distraction risk” when Tesla needed to focus all its energies on the supply problems. The Times, 20 May

China cuts mortgage lending rate by record as lockdowns hit economy. FT, 20 May

Opinion & long reads

Covid shows that in China, politics matters more than pragmatism. Chaguan. The Economist, 19 May

Asia sell-off: clumsy policymaking has exacerbated China crisis. Difficulties have been worsened by lockdowns resulting from the ineffectiveness of state-backed coronavirus vaccines. Lex. FT, 19 May

Is studying overseas losing its allure for Chinese students? Two years into a global pandemic, some are asking if it’s still worth it. Zhu Jingyi and Ni Dandan. Sixth Tone, 19 May

Three ways China-West economic ties could play out post-pandemic. Edward Tse. Caixin, 19 May