China Reform Monitor No. 1469

CHINESE MILITARY SCIENTISTS FACE U.S. VISA FRAUD CHARGES
Five Chinese scientists at U.S. universities have been charged with visa fraud and other irregularities for concealing their military affiliations. The scientists were arrested under the "China Initiative," which the Department of Justice began in 2018 to stop the theft of trade secrets by Chinese entities and to secure technology at U.S. universities. All those arrested have pleaded not guilty. Wang Xin, a postdoctoral researcher who studied obesity at the University of California, San Francisco, was arrested in June 2020. He remains in jail, and no trial date has been set. Song Chen, a visiting researcher in neurology at Stanford University, was arrested in July 2020 and released on bail awaiting trial. She is charged with visa fraud and obstruction for giving false statements to a government agency. Zhao Kaikai, a Ph.D. student at Indiana University-Bloomington studying AI, was also arrested in July 2020 and remains in jail. His trial is set for October. Guan Lei, a Ph.D. student at the National University of Defense Technology in Changsha, was a visiting scholar at UCLA. He was arrested in August 2020 and charged with visa fraud, making false statements, and destruction of records in an investigation. Guan was released on bail and his trial is set for August. Tang Juan was working on radiation oncology at the University of California Davis School of Medicine when she was arrested in July 2020 for visa fraud and making false statements. She was also released on bail, and the trial is set for next month. (Reuters, June 17, 2021)

CHINA STOPS TAIWAN FROM BUYING VACCINES...
Due to pressure from Beijing, Taiwan remains unable to purchase BioNTech coronavirus vaccines. China has a say in Taiwan's inoculation campaign because last year BioNTech teamed up with a Shanghai company, Fosun Pharma, to distribute its COVID vaccines in mainland China, Hong Kong, Macau, and Taiwan. Beijing says if Taipei is allowed to buy doses directly from BioNTech, it would violate that contract. Taiwan began talking with BioNTech about buying 5 million doses last August, and in December the two sides agreed on a deal. China has also warned Japan against "meddling in China's internal affairs" after Tokyo donated 1.2 million AstraZeneca doses to Taiwan. (New York Times, June 16, 2021)

...AS AMERICA LENDS A HELPING HAND
The U.S. has shipped 2.5 million doses of the Moderna COVID-19 vaccine to Taiwan, more than tripling Washington's previous allocation of shots for the island. "We are not allocating these doses, or delivering these doses, based on political or economic conditions. We are donating these vaccines with the singular objective of saving lives. We believe that attempts by China to block purchases, for political purposes, are reprehensible," said a senior Biden administration official. The vaccines confirmed the "rock-solid friendship between Taiwan and the United States," noted the spokesman of the Taiwan Presidential Office. The Biden administration has pledged to send 80 million U.S.-made shots to countries around the world. (Reuters, June 19, 2021)

PUSHED OUT OF CHINA, BITCOIN MINERS ARE COMING TO AMERICA
Beijing is cracking down on cryptocurrency mining in order to cut down on its carbon footprint and reign in the country’s uncontrollable, decentralized cryptocurrency sector. Since Chinese officials pledged to “crackdown on bitcoin mining and trading” on May 21, crypto topics have been censored in the media and police have arrested more than 1000 people on cryptocurrency-related financial crimes. Inner Mongolia, Xinjiang, Qinghai, Yunnan, and Sichuan have all banned cryptocurrency production and encouraged citizens to report illicit mining. In response, China’s bitcoin moguls are shipping their equipment to Texas, Tennessee, and South Dakota. One is Jiang Zhuoer, who once had 300,000 computers humming around the clock in 20 ventilated warehouses across northern China, guzzling enough electricity to power a small city. Jiang has pulled tens of thousands of machines out of China and is headed to the U.S. In 2018, China’s bitcoin prospectors accounted for 74 percent of the world’s bitcoin production. (Washington Post, June 17, 2021)

CHINA STEPPING UP MARKET INTERVENTIONS
China is using increasingly forceful statements and measures to contain risks to the financial system. Since January, officials have warned of asset bubbles, encouraged a correction in stocks, and pressured leveraged bond traders. But the rhetoric escalated last week at a forum in Shanghai, with the country's chief banking and insurance regulator calling for "relentless" efforts to battle financial risks. Guo Shuqing, chair of the China Banking and Insurance Regulatory Commission, warned that inflation may last longer than many predict, and central bank Governor Yi Gang said China now faces inflation and deflation pressures "from all sides." The head of China's foreign exchange watchdog said companies speculating on the yuan are "doomed to lose" and investors should be wary of the currency's depreciation. Authorities have also ordered state firms to curb their overseas commodities exposure, forced domestic banks to hold more foreign currencies, considered a cap on coal prices, banned brokers from publishing bullish equity-index targets, and will bar cash management products from holding riskier securities and limit their use of leverage. (Bloomberg, June 16, 2021)]