Why Does Beijing Want to Destroy Didi What’s in DIDI’s Data that CCP Fears Zooming In China

Simone Gao: Hello! Welcome to Zooming In China Tea Time, I am Simone Gao.

The disastrous IPO of Didi Global in early July has set off a firestorm for all Chinese companies looking to be listed on U.S. stock exchanges. Following their $80 billion valuation after two days of trading, Didi, China’s equivalent to Uber, looked to be a rising star with the largest IPO of any Chinese company since Alibaba in September 2014. But in going forward with their IPO, they had rejected a request from the Chinese government to postpone that IPO until their public filing documents could be thoroughly reviewed by the Cyberspace Administration of China. The Chinese government quickly responded, placing Didi under a mandated cybersecurity review and removing their apps from all Chinese app stores.

That review took a more extreme turn on July 16th. Chinese regulators from multiple agencies, from multiple government agencies — including the Ministry of Public Security, the Ministry of State Security, the Cyberspace Administration of China, the Ministry of Transport and the Ministry of Natural Resources — raided the corporate offices of Didi. They announced the move in a public statement, likely to make the punitive response to corporations that disregard their requests obvious to the entire international community.

The outcomes of the review may be more serious than the falling valuation of Didi Global stock. Punishments can include financial penalties, suspension of business licenses or even criminal charges. We can expect the punishment to be severe given the very public nature of this dispute. The CCP can be counted on to make a public example of Didi. To show leniency to a company who disregarded the full control of the Chinese Communist Party would be to weaken that control, and that is unthinkable within the current regime.

Not when there is that amount of data at stake. As reported in the Wall Street Journal, Didi’s 377 million annual active users and their 13 million annual active drivers in China turn over their real names, vehicle information, criminal records, and their credit card and bank information to Didi. Those users often choose to share photos, home and office destinations, and identifying information like their age, their gender, their occupation. And even, they may be subject to submitting facial-recognition data.

The CCP’s response might be understandable, given their dedication to tight control, if their punishments had centered on only Didi. But they did not stop there. Just after the announcement of the cybersecurity review for Didi, they announced the same app restrictions and cybersecurity review for Full Truck Alliance, an Uber-like service for freight trucks, and Kanzhun, an online job recruitment service.

Days later, the Chinese government tightened their grip. The Cyberspace Administration of China posted, for public comment, an extensive revision to their Measures for Cybersecurity Review. The most notable change in that revision is one requiring any Chinese company with control of data for more than a million users to seek permission from government regulators before filing for an overseas IPO. That revision, according to Henry Gao, a law professor at Singapore Management University, “would make it very difficult or even impossible for Chinese internet firms to get listed in foreign exchanges. Many of them would probably choose Hong Kong or domestic listing due to the tedious regulatory approval process.”

In addition to the mandated review process, the revision also extends the period of review from 45 working days to 3 months or longer, marking yet another deterrent to Chinese companies listing on foreign exchanges. Most Chinese tech companies have far more than the 1 million user threshold making every one of them subject to a lengthy review that is likely to end in a denial of permission.

But why now? Why Didi?

Didi has a great deal of data on Chinese citizens, but the data collected on its users is not likely to be cause for this level of alarm. It is certain that Alibaba collects similar kinds of data, and they currently have 811 million users, far more than Didi’s 377 million. Yet, Alibaba had a very successful IPO and remains a success in foreign markets with less interference from the Chinese government.

If it’s not the average citizen data, then there is another source of data at stake.

According China observers, High level Chinese Communist Party leaders use the DIDI app to go to places without using official cars or drivers. These trips can give a lot of information out about these officials in terms of where they went and possibly who they dealt with. Many secrets of these officials could be revealed by the DIDI app data. China is afraid somehow these data could fall into the hands of the American government.

After the Holding Foreign Companies Accountable Act passed in 2019, Chinese companies like DIDI is required to submit original accounting records that will reveal  who Didi is funded by, who they are partnering with, how the data gathered by Didi is shared among those players, and the Chinese government is afraid these information will also become available for the Americans.

Whether the primary source of their concern is citizen or corporate data may not be known, but we can be sure that the CCP knows exactly what kind of information is at risk, because they have engaged in an international theft of similar data at a scale previously unseen. On July 19th, President Biden revealed that China has either directly ordered or has allowed ongoing theft of data from numerous countries, theft that includes a partnership with cybercriminals who obtained data for the Chinese government while also engaging in cyber ransom activity for their own financial gain.

President Biden was joined by allies from Australia, the United Kingdom, New Zealand, Canada, Japan, the United Nations and NATO in condemning the attacks and calling for an international inquiry into the type and extent of these attacks. While President Biden stopped short of any direct punishment for these actions, he later stated that the investigation is ongoing and that U.S. officials need a full understanding of the scope of the attack prior to making decisions on the consequences for them.

If the United States is to understand the attacks that have taken place by China, including the 2021 attack on the Microsoft Exchange email server software and other attacks on unnamed companies with ransom demands in the millions, we need to take a closer look at Didi. The international community needs to know why the Chinese Communist Party reacted so immediately and so excessively to Didi’s IPO. What data does Didi have that is different from the data of other Chinese tech companies listed on American exchanges? Why is Didi a threat at a level that is much larger and more notable than any other Chinese tech companies? When we find the answer to those questions, we will find part of the answer to how the CCP has carried out the extensive cyberattacks revealed by President Biden and what data they were after with those attacks.

Thanks for watching Zooming In China. Please like, share, and subscribe to our channel if you like our production. Most importantly, please sign up for our membership website at zoomingin.tv. $5 a month, or $50 a year. We have video audio formats of the show, transcript for the show, we will also have in-depth reports for the members in the future, and also Q&A, live Q&A with me on the website. So thanks again. I am Simone Gao and I will see you next time.

Will Biden Create a Human Rights Abusers List in which US Investors will be banned from investing?

Simone: Hello everyone, welcome to Zooming In China Chat. I am Simone Gao. More Chinese companies have been removed from global indices recently. Is that trend irreversible? Will DIDI set off a US-China capital market decoupling, and does the Biden administration have the power and will to rein in Wall Street? I had these discussions with Roger Robinson. He is chairman of the Prague Security Studies Institute and former Chairman of the Congressional US-China Economic and Security Review Commission. He earlier served as Senior Director for International Economic Affairs at the National Security Council under President Reagan.

Simone: We see on the U.S. side at least Congress is being tough on investment in Chinese companies. On the Chinese side, the CCP is also showing a toughening stance. For example, the central leadership is not forgiving Didi. Just a few days ago, they sent multiple agencies, including the national security agency, into Didi to investigate whether and what data they have provided to the foreigners, or in risk of being obtained by foreign governments. So, do you think the Didi debacle will set off a U.S./China capital market decoupling?

Roger: Well, I think that it certainly was, uh, it certainly spooked Wall Street players, as it should. I mean it made fools of the, to some extent, of the major U.S. firms that were managing the Didi Global IPO. It certainly wasn’t a brilliant day for them. And, uh, I think it underscores the capriciousness and intrusiveness of the Chinese Communist Party, its unpredictability, its willingness to intervene, just like it did with the Ant IPO which, as you know, got scuttled two days before it was supposed to go public at $37 billion. And there are other cases. They’ve gone after Tencent. This China tech crackdown is in full swing, as you know, and there’s going to be a lot of casualties along the trail in the terms of American shareholders if we’re not careful. And I think Congress is very upset about the way the Didi Global deal went down. You’re gonna see legislative action and maybe hearings because of that fact. So, but let’s get to what China really has in mind. China says it’s trying to protect its data.

What it’s really trying to do is leverage those companies, in part, to get as much user data out of them as it possibly can for their own credit scoring system and surveillance state activities. I mean, they’re the ones that want to force the Chinese tech giants to share all of their user data with the CCP, and I think those companies were prudently trying to resist for a time and, of course, they ran into a buzzsaw. Uh, look at Jack Ma. Look at others that have double-crossed the Chinese Communist Party. They have been, they have been summarily, in effect, exiled at some level. So, the point is that I’m not going to take at face value China trying to protect its, its data as the reason for this, this crackdown. I think that they are a bit paranoid. I think they see these large tech companies as individual power centers that might be competing with the CCP. I think there’s no question that they viewed Alibaba and Ant Group that way. That’s my strong feeling. With a billion users, believe me that got Xi Jinping pretty paranoid right there, and then they wanna twist their arms and make life tough for them so they can get their hands on that precious user data. Sorry to be a bit cynical, but I see those as more compelling reasons than the ones that they’re offering.

Simone: Yeah, I agree with you. The real reason is that Xi Jinping will not share his power with the private sector, especially since a big share of these companies  are actually held by his political enemies. So, the next question. I think now, the bigger picture is that if you look at the foreign direct investment and indirect investment in China, America is no longer a big investor. It’s the Asian countries and, for many years, Hong Kong is the biggest investor. Now things may change, but still, U.S. is not a big investor in China. So, some critics say that if you ban U.S. investment in China, the only people, the only entity that will be hurt will be the U.S. investors since the vacancies they left will be filled by other countries. So, the Chinese companies will actually not be hurt. What do you think?

Roger: I think it’s laughable. You know, the detractors, the critics are trying to say if we miss this opportunity, somebody’s just going to take us, uh, take our place. If we start to get tough, in terms of asking for compliance of our federal securities laws, we’re gonna damage the competitiveness of the U.S. capital markets in the world, and we’re gonna be sending those IPOs and all the fees to Hong Kong and elsewhere. Better not do that. Right? This is, this is nonsense. The U.S. capital markets are roughly the size of the rest of the world’s combined. We hold about 66% or so of the world’s investable capital and liquidity. Our dollar is the world’s reserve currency. We move hundreds of billions of dollars to China, uh, routinely, that they are using for desperately needed, dollar-based financing without which they can’t prosper, and they can’t keep that growth rate up. We’re the only market that’s deep enough and voluminous enough in the world to provide that kind of critically needed dollar financing. For example, my old commission, the U.S.-China Economic and Security Review Commission, which I chaired, states that there’s 248 Chinese companies on U.S. exchanges. Well, maybe NASDAQ and the New York Stock Exchange. What about the hundreds, the 700 or more, that are in the over-the-counter market?

What about hundreds, if not a thousand, more that are in the exchange-traded funds of Wall Street through having been purchased in A shares out of Shenzhen and Shanghai and moved directly into the portfolios of the American people with no diligence, no regulatory oversight? The back door, as I call it, of U.S. indices and exchange-traded funds. Look, the fact is that it’s, the United States is unique in this respect in that we have most of the money in the 21st century. China does not have a convertible currency. The U.S. utterly dominates the global financial domain, and that’s it. I mean, there’s not a whole lot you can do about that. So, the notion that we, uh, that they can go somewhere else, they’re trying to go to Hong Kong, right? But Hong Kong can’t get them the liquidity and the volume of, of cash, dollars, that they need annually. And further, here they are eviscerating freedoms and even the legal reputation of Hong Kong, which is a centerpiece of its existence as a global financial hub.

I mean, they’re tearing into Hong Kong every day at the very moment that they’re relying on Hong Kong to offset the U.S. capital markets? Really? It’s not going to work, Simone. I mean, we stand alone. There is, there is no elsewhere when it comes to global capital, and anybody that says, well, they’ll just go off to what. To what? Hong Kong, Singapore, Frankfort, London, Milan? This is, this is nonsense. So, I just take a very different view. I think that anybody that’s suggesting that they can simply go elsewhere and we’re going to be net disadvantaged doesn’t understand this issue very well, and they certainly don’t understand the fact that we’re dealing with national security and fundamental human rights.

Simone: So, then, how do you understand that U.S. foreign indirect investment into China is not taking a big share of the overall foreign indirect investment in China anymore?

Roger: Well, I think that sentiment, business sentiment, has changed radically. I mean, for decades, it was the promise of this kind of breakthrough where you’re gonna find a billion new customers or more for your products. I think a lot of that naivete has been swept away. A lot of American companies have been burnt to a crisp by their intellectual property having been stolen, their manufacturing techniques. All they did was create competitors that came back and crushed them, even in the U.S. market much less globally. So, this has been a very serious set of backfires, if you will, for American firms, and I think that they see the writing on the wall that Xi Jinping’s aggressiveness is not conducive to a harmonious, stable, bilateral relationship of the type that they were hoping for. A predictable environment. One that would be, uh, the Communist Party would be sensitive to the needs of business and markets like the capital markets. That’s not the way this is turning out, so we are gonna see a downturn in U.S. direct and indirect investment in China on the one hand, but you’re not going to see China, anytime soon, pulling away from the effort to get their hands on as many dollars annually as they possibly can.

And if they can do that without being listed in the U.S. markets through indices and exchange-traded funds, then the Congress is going to have to close that back door. And I think they’re in the process of already doing that. So, I would not say that Beijing is in a strong position in this matter.

Simone: Hmm. That’s interesting. So, you see the capital market decoupling is already happening.

Roger: I do. I think it’s detectable now. It’s been slow, and because they were dragged, they’re being dragged, I mean BlackRock and Vanguard and MSCI and FTSE Russell and a number of others, are being dragged out of this kicking and screaming, even though it involves such matters as genocide, concentration camps and funding the People’s Liberation Army. I don’t know how to put this to you, Simone, except to say they think that’s somebody else’s job, would be the kindest way I could put it. I could say they don’t give a damn, which might also be true. Their job is not patriotism. They see that as something the government needs to worry about, and they don’t want the contraction of their investable universe. They don’t want to see Chinese companies out of bounds, in terms of purchases, because of pesky national security and human rights abuses.

They think that that gets better yield and return on investment for their exchange-traded funds and other investment products, and that’s what they care about. And they also care about those huge fees bringing them to IPOs and bond offerings and other, uh, other fundraising activity. So, there’s very different interests here between Wall Street and Washington and Main Street, with Main Street being the victims, and Washington waking up and trying to protect those victims, and Wall Street looking about as far ahead as “what’s my next fee?” So, that’s a problem, and I think, I’m cautiously optimistic that with the bipartisanship of the Congress and the resolve shown today by the Biden administration, and its preservation of the previous administration’s momentum, and even strengthening of that momentum on the capital markets and the sanctions category, the tide has turned.

Simone: Right, right. Well, you talked about Vanguard and BlackRock. Uh, Vanguard recently closed their China offices. So, does that mean much? I mean, Vanguard closed their offices, but BlackRock did not. What’s the difference between those two companies and closing offices? Does that mean a lot?

Roger: Well, not necessarily. We can talk about that, but BlackRock is, you know, hardcore in the China market. I mean, if you wanna choose two entities that, that are rather diehard about not wanting to appreciate the new realities of the material risk associated with national security and human rights violations, you don’t need to look a lot further than BlackRock and MSCI. They’re, they’re gonna be holdouts, it seems to me. And as far as closing an office, it’s an interesting development, that’s for sure. There’s been a U.S. interagency advisory, as you know, in the past week just issued on doing business in Hong Kong with Chinese companies and a strong cautionary note. There was another interagency advisory on anything out of Xinjiang, any companies that are in American supply chains, and, uh, that too has been a chilling effect on some companies, Vanguard perhaps among them. I think Vanguard cares about its brand. I think it cares about the principles and values of its founder.

I don’t think that they want to be implicated in some of the abuses that we’ve talked about in this interview. But, the real test is not whether you open or close a representative office that has a few people in it. The real test is what about the U.S. sanctioned Chinese companies and other Chinese corporate human rights and national security abusers in their investment products? What about the entity list companies? What about the executive order 14032 OFAC list? What about the Pentagon PLA list? Are they holding those companies? Well, we’ve just done, we’ve just taken a look, and the answer is of course they are. And so, and they still are. And not a few. Many. So, if you wanna show me the divestment of those kinds of companies, then I’m going to sit up, pay close attention and offer some praise to Vanguard for doing the right thing, but not before.

Simone: Right. Okay, that’s interesting point. What do you think, how do you, I mean, how do you evaluate the Biden administration’s attitude on China? Do you think they will hold the line on China?

Roger: Yes, I’m cautiously optimistic they will. I think that they see it as politically perilous to appear soft on China. That’s not where the country is. I wouldn’t be surprised if in the high 70s, low 80s percent of the American people are feeling very cautious and even negative toward China today. Uh, that is the Chinese Communist Party. No, nothing toward the Chinese people who we all understand are victims of that system, of that authoritarian police state. So, it’s not the Chinese people that are in the sights of Americans. It’s the Chinese Communist Party. I just think that needs to be clear. But that said, and you rarely see a bipartisan consensus in Congress as powerful as this one. This doesn’t even take account of Covid-19. Uh, this was happening before that, certainly the way Covid was deliberately spread by the Chinese Communist Party by allowing those Wuhan flights and too many others to, uh, instances to name. That’s certainly not endearing the American people, either. So, this is not a time, uh, that I think the Biden administration wants to signal a softening, and I also think that they actually believe in things. I think that the Secretary of State, for example, is a long-time human rights advocate, and I think that others in that administration really do understand that the funding, aiding and abetting of these horrific atrocities and abuses, like those taking place in Xinjiang and around the country with forced labor and too many other offenses to name, not to mention the national security litany of challenges, uh, that we’re ending up funding, or partially funding. I think they care about that. I don’t think it’s just politics. And so, uh, and they don’t have a Treasury Secretary as powerful as Mnuchin that will hold the tide for Wall Street with the effective way that he, that he did. So, that’s why I see optimism vis-a-vis this administration.

Simone: Interesting. Last question, Roger. What do you think of the China/Europe investment agreement? Do you think there is any possibility that that agreement could be eventually signed?

Roger: Well, I certainly was worried about the first iteration. As you know, it was stampeded through at the end of last year. I looked at the, the documentation that took place prior to its suspension, and it had language like, uh, under the discrimination category, you know China always loves to feel discriminated against, that’s one of their favorite negotiating tools, and they, they had in there the prohibition of any future investment bans, by name, meaning read capital market sanctions. And in that seven-page in-principle agreement, Europe just signed up to that as though it was nothing. And it would have meant that for the better part of twenty years, China could put any kind of human rights or national security abuser into the investment portfolios of the European fund managers and capital markets, and it would be just fine. You, you’d be unable to excise those companies because of, uh, of the bilateral investment agreement. That’s what Beijing was going for. So, thank goodness in a ham-handed fashion, in a political mistake, they went after, by name, went after the European parliamentarians and sanctioned them because of human rights concerns. I mean those parliamentarians expressing human rights concerns. They found that so offensive that they sanctioned them.

These are the same people that were gonna be voting on the bilateral investment treaty. So, thank goodness they made a mistake there, and hopefully this is in deep freeze, and if it ever does come out, it’s going to have to be scrutinized and rewritten, because the first drafts of that that were racing down the pike were perilous and irresponsible.

Simone: Right. So, you think this is, there is still a possibility that this agreement could be renegotiated and discussed, even.

Roger: I mean, does Europe really ever give up doing that kind of thing? I don’t think so. I mean, you know what I mean? It’s, uh, they’ll give it a go. That would be my guess. As soon as the dust settles. But I think that, uh, I hope wiser heads prevail. I hope they’re watching what’s happening in the United States and realizing that basically, as always, China’s trying to split off Europe from the U.S. It’s a typical strategic maneuver and one that we need to resist ferociously. And I think that the chances are now better, because Europe is starting to realize that something is terribly amiss with the China picture.

Simone: Right. I mean, talking about Europe wants to make deals with China. Angela Merkel is going to be gone very soon. Would that affect Germany’s decision? What about her successors? I mean Germany and France, these other two countries we worry about, right?

Roger: Well, if the Green Party has its way. Ironically, they’ll be more disciplined than Merkel’s party. I think that, uh, look, it’s the difference between David Cameron and Boris Johnson. You remember David Cameron and his chancellor, Osborne. They were heralding the Golden Age of British/Chinese relations. All it did was it took Britain to the cleaners and was a golden invitation for technology theft and other games by China. I think the bloom is off the rose now in Britain. I think it’s going to become a similar story in Germany. Of course, selling those cars is always compelling, and Germany is known for, frankly, sometimes putting national security, and even our fundamental values, behind profits and jobs. I’m sorry to say that, but I go back with our German friends to the Reagan days and the Siberian gas pipeline with the Soviet Union and learn the hard way. And so do they, by the way. That, uh, that kind of instinct is not going to be a lead to transatlantic harmony.

Simone: That said, would you say you were cautiously optimistic about Europe?

Roger: Yes.

Simone. Okay.

Roger: Very cautiously, but yes. I do believe so. And, in part, it’s because I’m witnessing China overplaying its hand as dramatically as it is.

Simone: Okay. Alright. Thank you very much, Mr. Robinson. Do you have anything else to add?

Roger: Well, I don’t think so. I think that my only parting thought would be that I can understand that many investors in the U.S., Europe, and Asia are becoming increasingly hesitant and uncomfortable with holding any Chinese companies in their investment portfolios because of the intrusiveness, control and unpredictability of the Chinese Communist Party that again is so vividly on display vis-a-vis the tech sector and the crackdown there. But those investors that have a higher risk appetite and want to continue to hold Chinese companies in their investment portfolios, it seems to me that it’s only financially prudent for them to not include in those investments U.S. and E.U. sanctioned Chinese companies or known human rights and national security corporate bad actors. I think that’s a bridge too far, and I think that material risk, the material risk involved, is asymmetric, is inordinately high, it’s fiduciarily irresponsible. And, and I think it’s also morally repugnant. So, I hope that for even those that are resolved to stick with Chinese companies, I would only ask that they differentiate between which Chinese companies. It makes a big difference.

Simone: Thank you. Thank you, Mr. Robinson. I really appreciate it.

Roger: Thank you, Simone.

Simone: This concludes our program for today. Please like, share and subscribe to our channel if you like our production. Also, please sign up for my membership website. We will provide video, audio and transcripts of our shows. There will also be member-only articles and in-depth reports and live Q&A with me. The website is zoomingin.tv. $5 a month or $50 a year. You can also donate to me on my website, zoomingin.tv. Thanks for watching. I’m Simone Gao, and I’ll see you next time.

Wall Street Lost Protection, Biden Isn’t Coming to Its Rescue, Investment in China Is Further Banned

Simone Gao: Hello everyone, welcome to Zooming In China Chat. I am Simone Gao. More Chinese companies have been removed from global indices recently. Is that trend irreversible? Will DIDI set off a US-China capital market decoupling, and does the Biden administration have the power and will to rein in Wall Street? I had these discussions with Roger Robinson. He is chairman of the Prague Security Studies Institute and former Chairman of the Congressional US-China Economic and Security Review Commission. He earlier served as Senior Director for International Economic Affairs at the National Security Council under President Reagan.

Simone: Thank you, Mr. Robinson, for joining Zooming In China today.

Roger: Nice to be with you, Simone.

Simone: Reuters reported that FTSE Russell is going to remove more China stocks from the indexes over U.S. ban. So, can you tell us what this means and why they made that decision?

Roger: Well, it’s hard to know precisely what’s on FTSE Russell’s mind. They have been notorious, frankly, in holding on to U.S. sanctioned Chinese companies as well as other Chinese corporate bad actors engaged in egregious national security and human rights abuses for a long time. I remember there was one month a couple of years ago when they added a thousand Chinese companies to their index, that obviously very little, if any, due diligence was performed concerning who these companies are, who their subsidiaries are, and what they’re really about, particularly in terms of the track records that I’ve talked about that are of such concern. So, I would say that FTSE Russell is not a leader in terms of responsible, prudent behavior and risk management vis-a-vis China. Let’s start there. This report suggested that they’re removing some 20 companies. I understood that they were from the Treasury Department’s Office of Foreign Asset Control list, which is the one that is associated with executive order of President Biden, 14032. And, uh, this does require all U.S. persons to be out of such listed stocks within, within 12 months. And effective August 2nd of this year, they’re no longer able to buy those securities, be they stocks or bonds.

Uh, they can only sell. So, the writing’s on the wall, and I think that Wall Street is finally figuring out, at long last, that the Biden administration is not going to ride to the rescue and rescind the executive order of President Trump. Indeed, they issued their own, which was not only a preservation of that executive order but was a strengthening and expansion of it, which you can be sure caught Wall Street off-guard. So, now that they don’t have a protector in President Biden and, with all due respect, Janet Yellen is not as ferocious a Wall Street supporter as was the previous Treasury Secretary, Steven Mnuchin, who worked very hard to deliver for Wall Street in making sure that these sanctions had as little teeth as possible. That’s not going to be as easy for Secretary Yellen. So, I think that FTSE Russell may understand, finally, that the writing is on the wall and that they’re going to start to do reputational damage to their brand. After all, we have to understand that the companies that they hold in their indices are associated, in part, with aiding and abetting genocide, with equipping concentration camps, with being responsible for funding advanced weaponry later to be used by the PLA to target U.S. forces, including submarine-launched ballistic missiles targeting American families.

I don’t think if you’re an index provider in the United States or, for that matter, a fund manager like a BlackRock or a Vanguard, you have in mind advertising that you’re holding these types of Chinese companies. So, at long last we seem to be making progress there, but much more needs to be done. I mean, 20 companies is a drop in the bucket compared to what’s required. So, I think the key here, Simone, is that we watch this space closely and judge these companies on what they’re doing as opposed to what they’re saying. So, we’ll see.

Simone: Right, yeah, even with that, actually you know some Chinese companies that are on the Communist Department’s entity list are publicly traded on the U.S. Stock Exchange for many years, and we’ve been talking about that for, for years. What is the situation now?

Roger: Well, it’s not good. The truth is that Wall Street has basically stonewalled or ignored the entity list since the inception of the capital markets issue back in March of 2019 when we first brought this to public awareness out of our firm. And, uh, as a result, they’re still holding companies that are on the entity list, and are there because of egregious national security and human rights abuses. For example, at the end of June of this year, as you know, five polysilicon companies of China were placed on the entity list. Why? Because they’re engaged, or were determined to be engaged by our government, in forced labor, read slave labor, practices. Well, that’s a very serious human rights abuse. I think we’d all agree. And yet, three out of those five companies are traded not only publicly in U.S. markets but are being held by some of the more prominent, some of the more prominent exchange-traded funds in the United States as well as the indexes. For example, Hoshine is one of the companies. It’s, uh, it’s held by MSCI and S&P’s emerging, uh, I believe S&P’s emerging markets index. In the case of Xinjiang Daqo, which is a subsidiary of a company, if you can believe it, that’s traded on the New York Stock Exchange. Uh, the case of Xinjiang GCL New Material, New Energy Materials Corporation.

It, too, is in the S&P BMI index. So, in other words, millions of Americans are still holding these companies. And I think the glaring inconsistency now, Simone, is that you can be on the entity list, which basically prohibits the sale of U.S. equipment technology services and components to those companies because of these serious offenses, and yet they’re free to fundraise in the U.S. capital markets. They’re free to be traded. They’re free to be included in indices and exchange-traded funds. They have all the prestige associated with being in the world’s deepest and most voluminous markets which is, you know, is a favorite of Chinese companies. So, they have, they’re being rewarded at the same time as they’re being penalized. And that is a major concern that has to be corrected by the Biden administration and by the congress.

Simone: Yeah, so this problem continued from the, from the Trump Administration into the Biden administration. What is the real cause of it? It’s just the inter-agency communication problem, or is there any bigger problem that caused this, and what do you think of the possibility of this problem being solved during the Biden administration?

Roger: I think the chances of it being resolved are pretty good, because simply it’s politically unsustainable. It can’t withstand the light of day. You can’t on the one hand deny American equipment and technology but allow tens or scores of millions of Americans to be funding those companies unwittingly in their investment portfolios and retirement accounts at the same time. If they don’t get that this is a, this is a glaring problem, then the Congress and the media surely will. So, I just don’t think it’s sustainable, but it does, it does have those in Congress concerned about this I think going forward, increasingly, with legislation that says if you’re one of the three hundred or so Chinese companies on the entity list, then you can forget about having the privilege and advantages of accessing the U.S. capital markets and raising funds there and trading there, etc. So, that day is coming, but as you know, this is been a very slow moving train in many respects because, again, the capital markets never saw the light of day, in U.S. policy, for better than 20 years prior to, uh, prior to 2019.

And it was only when it was the Thrift Savings Plan was gonna be adulterated with Chinese companies that were, again, guilty of human rights and national security violations that the President of the United States stepped in, in this case the previous administration, and said, “no that’s not happening. We’re not gonna have the american military and State Department human rights champions holding companies in their federal retirement account that are aiding and abetting these kinds of activities, that are building the weapons designed to kill Americans, that are engaged, again, in genocide and concentration camps. When you spend your life fighting for human rights as a government servant and employee, that’s not on, Simone. And so, that got the ball rolling, but as you can see, remember Wall Street, and we’re talking tens of trillions of dollars lobbying against this, trying to slow it down, trying to narrow it, and even trying to derail it entirely. And we’d be remiss if we don’t, if we forget that.

Simone: Right, right. So, this is not an inter-agency communication problem. It is the power of Wall Street. Okay. Next, I know you spoke highly of President Biden’s executive order on restricting U.S. investment in Chinese companies that are in the surveillance technology sector, but only surveillance. Don’t you think the scope is too narrow?

Roger: Oh, I do. I agree with you completely. And it shows very clearly in the example I gave you earlier concerning the five polysilicon companies engaged in forced labor. Well, the reason that they never got on the cap market sanctions list, which is, of course, the OFAC list of the Treasury Department, is because they weren’t in the technology surveillance sector. Well, excuse me, forced labor? And that’s okay? It’s not okay, right? And so, as a consequence, that human rights set of conditions in the executive order needs to be expanded or there needs to be a new list created by the Congress, which I call the Chinese corporate human rights abusers list, another official list that covers the entire human rights spectrum of abuse and says in clear, automatic circumstances that if you are this kind of egregious human rights corporate abuser, then you are not going to have the privilege of accessing or funding yourselves in the capital markets of the United States or anywhere else. As an American citizen around the world, you will not have access to those companies by law, and that will be an automatic feature of a new list if it’s required. So, it’s really up to the Biden administration, it seems to me. They can expand the current executive order to increase the scope of human rights coverage. That would be the easiest.

Or, they can go the hard way and have the Congress build an entire new list with automatic capital market sanctions awaiting any company, Chinese company, that ends up on that list.

Simone: Okay, okay. So, what do you think of the prospect of the Biden administration adopting a human rights abuser list?

Roger: I think it’s pretty high, reasonably high, despite the fact that the Treasury Department and the SEC and other like-minded agencies will be opposed because of Wall Street concerns, largely. But I don’t think, again, that you can, you can buck the tide of this political, uh, this political tsunami that’s happening here. The bipartisan support for getting tougher on China is now well understood, and the Congress is outraged in many cases by the fact that Americans, over a hundred million of them, are unwittingly engaged in funding the most nefarious activities of the Chinese Communist Party. They didn’t have in mind hundreds of billions and even trillions of dollars moving from American retirement accounts and investment portfolios into the People’s Liberation Army and into the construction or architecture of China’s surveillance state, for example.

That’s not what the American people have in mind. The Congress understands that. Nancy Pelosi’s a champion of human rights, and the Democrats are known for that position. And I don’t think you can just pretend as though you’ve solved the problem when you take such a narrow ban, as they have initially, even though it’s a good thing that they’ve done, but again, the surveillance technology sector? Good step. Too small, too narrow.

Simone: Speaking of Congress, they passed the Holding Foreign Companies Accountable Act in 2019. So, how much impact do you think this Act will have on Chinese companies who are contemplating a U.S. IPO?

Roger: Well, it should, it should concern them greatly, Simone, because there’s two forces at work here. The Chinese Communist Party for their part are, in effect, cracking down on Chinese companies seeking to list in the U.S. Perhaps they know that, that something we don’t, which is they’re not ever going to allow Chinese-audited companies to be subject to review by the Public Company Accounting Oversight Board of the United States. They’ve made plain that they have no intention of ever allowing our auditing entity to engage in reviewing their audited companies. And right there, that means a continued violation of federal securities laws. There’s not one Chinese company in the U.S. markets today that’s not in violation of U.S. federal securities laws, primarily Sarbanes-Oxley and this PCAOB audit trail. And you know that they don’t disclose their financials, because they’re regarded as State secrets. I mean, these companies are black boxes, and that’s in part why the Didi, the Didi Global IPO debacle is of such concern to Congress. Again, another black box that, on day four of trading, lost $16.4 billion, a value almost 20% of the stock’s value disappeared in the first four days of an IPO on the New York Stock Exchange. So, Congress is very concerned about this. That’s why they passed the accelerated Holding Foreign Companies Accountable Act by the Senate just recently. They were trying to reduce the years that, uh, from three to two, where those Chinese companies will have to be delisted if they don’t come into compliance, full compliance, with U.S. federal securities laws.

And as you may know, the SEC was just revealed by the Financial Times to have tried to undermine the intent of the Congress, and the earliest possible protection, of scores of millions of unwitting American retail investors by not issuing a rule on the delistings. And they’re claiming that the clock hasn’t started on those three years, even though it was passed in 2019. And the FT speculates that there won’t be any delistings of Chinese companies till 2025, because, simply, they didn’t issue the rule necessary to start the clock. They think a clever little gambit like this is going to work. I mean it’s, it’s, it’s naive and it’s very disheartening that they would try a maneuver as cynical as this, particularly given the national security and human rights stakes. And it will not stand. I mean the Congress isn’t going to sit there and permit the SEC to overwhelm American law just because they don’t want to issue the rule. Really? I don’t think so. So, I’ll tell you what, either the administration’s gonna step in there and preserve the integrity of the timetable and make sure that it’s no more than the three years and, hopefully two years once the accelerated bill is passed, and that if they don’t, then there should be veto-proof legislation passed immediately which offers a date certain by which Chinese companies that are not compliant are delisted, by law, and that’s it. So, it’s one way or the other, but imagine the SEC trying a gambit like this, as transparent as it is.

Simone: Right. Just out of curiosity, when do you think the Holding Foreign Companies Accountable Act will be fully implemented? I know July 12th is the date they finish the public feedback on the bill. Does that mean after July 12th, the bill will be fully implemented? I’m not talkin about the Chinese companies being given three years to submit their accounting records otherwise they will be delisted. I’m talking about the date they are required to submit detailed accounting records when they go public in the U.S. Is that after July 12th this year?

Roger: That’s not my understanding. My understanding of the original bill, the Holding Foreign Companies Accountable Act, passed at December 2019, I believe it was, unanimously by the House and Senate I might add, called for the clock to start on the three years within 90 days of enactment of that legislation coming into law which, which would obviously create a date years before 2025, right? Uh, so it’d be 2020, it should be 2023, worst case, and with the new bill that’s been going, already gone through the Senate, it’d be 2022, so then this is not going to be left to the SEC. I don’t know where they think that they can step in and take over and deliberately undermine the will of the Congress and American law. I don’t know where they think that they’re somehow above the law and that they’ll decide what the timetable is, and if they wanna keep Chinese companies in the U.S. markets against the law, they’ll do it till 2030 or 2035. In other words, what’s to stop this from just turning into a fiasco? I think it already is. So, that’s not going to stand, in my opinion, Simone.

Simone: Okay, okay. Well, as far as I know, I mean they seem to be going through a process, a due process. For example, you have to have these discussions of the details, how this is going to be implemented, and then after that, you’re gonna have the public feedback, uh, period. And after all that is finished, then the law will be fully implemented, and that’s July 12th this year. What is your understanding?

Roger: I think it’s 90 days after enactment of the law which, uh, the Holding Foreign Companies Accountable Act, the original one, and three years from that date, it’s over for Chinese companies that didn’t submit themselves to PCAOB reviews of their audited companies. So, we may have a little different take on this but, and I have to study it more, I confess, so this is just my off-the-cuff estimate, but if I had to err, I would not err on the side of SEC procedures. I would err on the side of what does the law say? I think that I’m reflecting what the law says.

Simone: Right, right. Okay, so I mean it’s very likely SEC is just, you know, trying to postpone this law from being fully implemented by going through all this process, right?

Roger: So it seems to me.

Simone Gao: This concludes our program for today, please like, share and subscribe to our channel if you like our production. Also, please sign up for my membership website, we will provide video, audio and transcript of our shows. There will also be member only articles and in-depth reports and live Q&A with me. The website is zoomingin.tv, 5 dollars a month or 20 dollars a year. You can also donate to me on my website zoomingin.tv.
Thanks for watching, I am Simone Gao and I see you next time.

Thousands of Cars Could Have Been Submerged in a 5-Mile Tunnel in China

Simone Gao: Welcome to Zooming In China, I am Simone Gao. First of all, I will show you a video collections from a channel called the China Tragedy Archive. These videos are uploaded by citizens from Zhengzhou City where the big flood happened. It shows the situation of the Jingguang Tunnel in Zhengzhou City after the flood subsided. You can see that there are many cars floating on the water, piled together. There are many dead bodies in the car.

Witness: These are families in the cars, several hundred of the cars, local people estimate casualties may reach 3digit.

Simone Gao: Many Zhengzhou citizens came to this place to look for their missing relatives, but the area has been surrounded by armed police and the people are not allowed to enter. There was a conflict between the people and the armed police.

Witness: Near Jingguang Tunnel, police blocked the road and people can not get close. 

Witness: Something must have happened, we all know in our hearts, there are things they don’t want us to know. Let’s pray, I hope there are not too many casualties.

Witness: Things are worse than we thought. Cars came out of water. They are everywhere.

Witness: Cars are everywhere.

Simone Gao: Next is my interview with Chinese  water conservancy expert Wang Weiluo. It is precisely about why Zhengzhou spent more than 7 billion dollars to build a flood control system, but the result has been so poor.

Mr. Wang, thank you very much for accepting my interview. First of all, I would like to ask a specific question, that is, this time in Henan, the flood submerged the subway in Zhengzhou. The flood came in quite fiercely. I think, when people enter the subway, that is a very short time. It may take ten or twenty minutes to spend in the subway, so they didn’t feel the danger upon entering the subway. Then the flood came in immediately, so what do you think of this? What happened? Why did the flood come down suddenly? 

Wang Weiluo: There is a report that one of the retaining walls at the exit collapsed. It was suddenly destroyed by the flood, and then the flood came along the underground pipeline of the subway here.

In fact, according to the safety device design and operation requirement, the subway should have its safety device. If water gets into the subway, there will be an automatic response in the subway. It must stop running and must be rescued. And in this subway station, because it is underground, it also has the standard for flood control. In other words, it has the standard of being able to defend against floods that occur once in many years.

Then, according to the overall plan of Zhengzhou City, the master plan that must be completed by 2020, it must be able to release the once-in-five-years flood on the subway line, underground traffic passages, and underground squares.  This standard is still quite high, the subway line must also have this pumping facility to be able to drain it.

So in the end, the subway company must be able to rescue and must take rescue measures. They must not let this subway car soak for a few hours and not try to rescue it. This is just a joke! I can’t understand. This is incomprehensible. For example, there is a subway in the U.S. The middle of it is blocked by water. Then you have to go in and rescue people from both ends right away, right?

There is also the easiest thing. All subways in Germany have a percussion hammer next to the window. The percussion hammer means that when this crisis is reached, the window must be broken, and then you can climb out, even if the water outside is already very deep. At this time, the car roof is much safer than inside. It must have a percussion hammer. You can’t let them use this firefighting, fire extinguisher to hit this toughened glass. The percussion hammer is necessary equipment. These preventive measures are poorly done in China.

Simone Gao: Now there is a speculation: Zhengzhou has a Changzhuang Reservoir. The Changzhuang Reservoir exceeded the warning level in the past two days. So, they released the flood from this Changzhuang Reservoir later. But when the flood was discharged, we don’t know if they informed the people living downstream or not. So, there is a speculation that the reason Zhengzhou has suddenly flooded so much, including in the subway, is because they discharged the flood from the Changzhuang Reservoir. 

Wang Weiluo: This is directly related. Why do you say that? Where is Changzhuang Reservoir? Everyone understands that the warning water level is 128 meters. Changzhuang Reservoir’s had reached 130 meters. In fact, the water level of its flood control check is 134 meters, and still has the ability to store some more water, but why didn’t they do that?  

Because the reservoir had already experienced piping earlier

What is piping? For a dam, the side that can block the water is called the water retaining surface, and the back side is called the opposite side of water surface. Piping is water that goes through the dam and comes out from the back side of the dam. When the piping occured, it was still a little bit of water. However, as the water flows and becomes larger and larger, a water pipe will be formed that way, bigger and bigger. If no measures are taken, a big hole will appear and the dam will break.

So, for dealing with dam piping, the current rescue technology is pretty good. They put a layer of flood-control cloth, created in the Netherlands, immediately on the water diversion surface. This way, the flow will be slowed down so that the hole behind it will not expand. As long as this measure is taken, accidents can be prevented. So, from that point, the Changzhuang Reservoir should have started to discharge water.

A very big problem is that the river under the Changzhuang Reservoir is called Jialu River which is named after a water conservancy official from the Yuan Dynasty. He was the water conservancy official who governed the Yellow River. He wrote a book called Hequzhi. In it, there is a very important sentence. He wrote: “it is not that the river violates you, it is you who violate the river.” He said the root cause of flood is not the river violates people, but otherwise. We know that the Jialu Rive is the main river that passes through Zhengzhou City. People in Zhengzhou City call her the Mother River.

A reporter said that when the Changzhuang Reservoir began to discharge floods, it was a flood discharge of three cubic meters per second. That’s a joke. That is not called flood discharge, that is called peeing. Three cubic meters per second. That is a very small flow. Then he said later that it was forty-three cubic meters per second, which was also a joke. And the report also said that the water level of the reservoir started to drop. This is also a joke, because this small flow is not enough to make the water level of the reservoir drop. Then there is a report that the flow of this flood discharge has reached 525 cubic meters per second. This figure is more acceptable and more reliable. Maybe the discharge volume was even larger than that. So, the reports said that the Jialuhe River measured 600 cubic meters per second at that time. What is the flow that Jialuhe river can pass through now? It is 400 cubic meters per second, so the lower limit of the Changzhuang Reservoir ‘s discharge volume exceeds the flow that the Jialu River can accept.

Why is the capacity of the Jialu River so small? Because Zhengzhou City dressed up its mother river beautifully when it was building the city. Let her walking a long way from the southwest of Zhengzhou City, then to the northwest, round the mountain ring, and then reach it’s east, walking from the east to the southeast. The river spanned a full half circle here. The Jialu River spans a half circle around the city center of Zhengzhou. There are also several tributaries of the Jialu River. Then, they let the tributaries go through the city center of Zhengzhou. Meeting with the Jialu River, a water town with dense rivers is formed. So, the cities have three lakes, wide and narrow rivers, and wetlands as well. So, the city said the entire water system is very beautifully arranged. 
Therefore, the city said that its river is a very beautiful river, but they forgot that the main function of a river is the river. It is to discharge floods. When the flood comes, the river is to discharge floods. it doesn’t play around with you. It is not a decoration.

Why does Zhengzhou want to arrange its water system like this? Zhengzhou City has built 21 new developments on both sides around the Jialu River and the South-to-North Water Diversion Project. This is the residential area. This is Zhengzhou City. This is a real estate hotspot. The plan is to sell 300,000 houses here every year for 900,000 people to live in, for a total of 2.7 million people to live in this area in three years, all around the beautiful Mother River we just mentioned. By leasing these lands to developers, the Zhengzhou government can make a lot of money. But they forgot the river’s limited passing ability. The widest place in the river may be 350 meters. The narrowest place is only 90 meters. it could not pass the 600 cubic meters of flood discharge that came down from above, so it overflowed the street in Zhengzhou City. So, the floods in streets in Zhengzhou City are not mainly due to the rain coming up, because the surface of the water that came up when it rained was not so turbulent. It shouldn’t flow so much, but it rose slowly. Only with the flood discharge water from the mountain and from the Changzhuang Reservoir, it can have such a flowing speed. After it overflows its river course, it runs around in the city and, at the same time, it enters the underground track of the high-speed rail.

Simone Gao: I have two questions. First of all, you just said that the subway in Zhengzhou, in fact the entire city of Zhengzhou, was submerged by floods and this is closely related to the flood discharge of Changzhuang, so before the flood discharge of Changzhuang, if the government informs the people immediately… 

Wang Weiluo: They did not notify the people. They notified late. They said that it started at 10 o’clock in the morning on the 20th. They only started to discharge the flood at 10 o’clock in the morning on the 20th. But we saw a lot of things. First, they said that the flood discharge started at 10:30 in the morning on the 20th, but the news was sent out on the 21st. In other words, except that he had already started the flood discharge, he only told you that after the discharge. Before the discharge, they did not make an announcement.

Simone Gao: Why didn’t they make an announcement? Why did they catch everyone off guard? 

Wang Weiluo: Because the Changzhuang Reservoir is the second water source of Zhengzhou. It mainly supplies water for the Zhengzhou Water factory. If it releases the water for safety reasons, if the rain stopped, they would suffer economic loss. What should they do? So, for the operator, they are always there to guess whether the rain is going to come. If you were the boss, what would you think? One side is the income and wages of your employees, the other side is people living downstream that have nothing to do with you or are not directly related to you. Are their houses flooded? Is that because of our discharge of flood? They rarely think this way. They must first consider their economic benefits.

Simone Gao: In other words, after they release the water, the water plant will no longer have water, they will not be able to sell the water, and they will have no income. They just keep weighing the trade-offs until the end. 

Wang Weiluo: Not exactly. There is one way they can make money. If the reservoir receives an order from the Flood Control Headquarters to let the flood discharge, the money will be paid by the National Headquarters for flood prevention and disaster relief. So, as long as they don’t make a decision to discharge the water by themselves, in that case, they will release the water for nothing. Otherwise, they will get compensated by the government. So, when you talk about this mechanism, it releases water for the purpose of flood prevention. It is compensated by the state with relief funds for flood prevention. If you automatically release water, you get nothing. In China, the water plants and reservoirs belong to the state; the workers are only paid a basic salary.  Most of the bonus income and benefit income of those workers depends on the water plant, this reservoir, to sell water. This is how it works after the economic reform, the introduction of the so-called capitalist management combined with socialism. So, you get the shortcomings of socialism and the shortcomings of capitalism to form a very complete and worst system.

Simone Gao: In other words, the reservoir does not have any intention to release water by itself.

Wang Weiluo: They do not have intentions.

Simone Gao:Right, they waited and waited until the country gave you the final order to release the flood.

Wang Weiluo: They wait ‘til the last minute, right before the dam is going to collapse, then the leader tells them to discharge the water.  
Simone Gao: And it was too late at that time, and the notice was too late.

Wang Weiluo: As I just said, the dam has already experienced piping. The next step in piping is the dam collapsing. If they do not take measures, the dam will break.

Simone Gao: So, what is happening actually may not only happen in Zhengzhou, but similar incidents may happen all over the country?
Wang Weiluo: This happened to several reservoirs here. In fact, a reservoir in Luoyang is even more critical than this. Part of the dam has already collapsed, so they used engineer soldiers to fix it. They exploded a spillway right next to the dam so the water could be discharged from there. This was an uncontrolled discharge. 

There is also the flood discharge in Inner Mongolia the day before. It is a self-flowing flood discharge, which does not have a flood discharge channel. After the water rises above the dam, it flows over. There are various ways of discharging floods, if a reservoir is designed to meet the standard, its flood discharge is designed according to the principle of the largest flood that it has suffered in history. That is to say, if it really wants to discharge the flood, they will discharge the maximum amount as happened in history.

Because when they designed it, only such a discharge capability could ensure that the water level would not rise again. So, what you can imagine is that the reservoir is already filled with water. And you are experiencing the maximum rainfall at the same time, so only if you can discharge the maximum amount of water, you can make sure the water level in the reservoir can drop. So, their flood discharge is designed according to the largest historical flood volume. Now China has made a breakthrough, Baihetan, Nuomidu’s discharge capability has exceeded the maximum flood volume in their history.
Simone Gao: With such a large amount of flood discharge, once they discharge the flood, it will have a very significant impact on the downstream?

Wang Weiluo: It depends on whether the river downstream can withstand such a large amount of flood discharge. It happens that Zhengzhou is the so-called ecological water system city. They totally forgot about this function of rivers. So, the maximum passing ability of the Jialu River, which I saw somewhere in passing, is only 400 cubic meters per second. In this case, you will get more than 500 cubic meters from the top, and add a little from the bottom to more than 600, since however long the river runs, that’s how much water it collects. Plus, the drainage in the city is carried by the river as well, so it collects the water in the city as well. In the end, it exceeds the capacity of the river. At that point, the river returns all the water back to the city, and the city is flooded. That’s why this city has such a large current and such a rush.

Flood Explosion and Land Subsidence in China, Natural or Man made Disaster? Zooming In China

Simone Gao: Hello everyone, welcome to Zooming In China. I’m Simone Gao. 

China’s Henan Province was hit by historic heavy rains on July 20. The subway in Zhengzhou, the capital of the province, was submerged in the floods. The city remains in a state of paralysis. Floods in the urban area are surging and up to 1.2 million Chinese citizens have been displaced by the water. Chinese officials have admitted to 25 deaths, though the actual count may be much higher.

The scenes from Henan are horrific, the worst coming from a Zhengzhou subway station platform where citizens were caught by rising waters in the subway cars and were suffocated by a lack of oxygen. Photos and videos of many corpses on the Zhengzhou subway station platform have gone viral on social media. Over 500 people were rescued from that train, though media reports indicate that more than 10,000 were trapped on trains throughout Henan, some for more than 40 hours with food and water having to be brought in by railway workers.

Outside of Zehngzhou, the water levels of 32 large and medium-sized reservoirs across the province exceeded the limit. According to Agence France-Presse, the Chinese military warned that a reservoir in Luoyang was likely “to collapse at any time,” and the whole of Henan was in a desperate situation. That situation is not expected to end soon.

The rains began on July 17th, ranging from moderately heavy in some areas to extremely heavy in others. Disaster-stricken Henan received more precipitation in three days then they normally would in a year. Monitoring at the Central Meteorological Observatory showed that Zhengzhou received nearly 8 inches of water in just one hour, 4 and 5 pm, on the 20th. That 8 inches, added to the total from three full days of heavy rains, raised the flood control emergency response to Level 1. 

The heavy rainfall was mainly concentrated in the western, northern and central regions. Extremely heavy rain occurred in Zhengzhou, Jiaozuo, Xinxiang, Luoyang, Nanyang, Pingdingshan, Jiyuan, Anyang, Hebi, and Xuchang.

Meteorologists report that the heavy precipitation is expected to last until the evening of the 21st. The heavy precipitation is still concentrated in the northem and central areas of Henan, and the precipitation can reach 4 to 10 inches, and locally 12 to 15 ½ inches. Large-scale heavy precipitation is not expected in Henan Province from the 22ndto the 26th.

But while the worst of the flood conditions may come to an end tonight, the cleanup and recovery is likely to take far longer, especially business cleanup. Reports broke late yesterday of an explosion at Dengdian Group Aluminum Alloy Company. in Henan Province. 

The explosion was caused by soaring water levels from the Yinghe River. The waters exceeded company warning levels around 4 o’clock in the morning. Shortly after, the wall collapsed, and the plant was flooded. By 6 o’clock, the flood spread to the alloy tank in the plant, causing the explosion. Fortunately, there were no casualties.

Another business currently at risk is Apple’s foundry factory Foxconn. Foxconn has three factories in Zhengzhou and is the main manufacturing base for iPhone production with more than 90 production lines and around 350,000 workers. 

About half of the world’s Apple mobile phones are from Foxconn in the Zhengzhou factory. This company is also critical for the Zhengzhou economy, accounting for 81% of Zhengzhou’s total exports. 

Foxconn’s representative told reporters on the evening of July 20th that “Currently, operations are normal and will continue to monitor the situation.” With rains expected to continue through this evening, the concern over this critical industry remains.

While the impacts of Henan’s floods are obvious, the causes may not be as simple. Chinese meteorologists gave the environmental perspective, saying that the reason for such extreme rainstorms is the special airflow characteristics combined with the topography of Henan. Instead of elaborating on those details, I want to focus here on another possible factor causing floods: the connection between China’s reservoirs and dam systems and the frequent floods in contemporary China.

There are four major water systems in Henan, namely the Yellow River, Huaihe River, Weihe River and Hanshui River. Historical records show repeated flooding in that region throughout its history. The most recent one was the “75.8 Flood” on August 6th of 1975 when heavy rains triggered a major flood in the upper reaches of the Huaihe River causing a small reservoir to collapse.

Early in the morning on August 8th, two large reservoirs and nearly 60 small and medium-sized reservoirs collapsed one after another within just a few hours. Among them, the Banqiao Reservoir collapsed. The maximum instantaneous flow out of that reservoir was 79,000 cubic meters per second. The flood peak was nearly 50 feet high and with 36 million cubic feet forced downstream within 6 hours.

The flooding caused over 63 miles of Beijing-Guangzhou railway line to be destroyed. It also laid a devastating human cost on the region. The dam collapsed at 1 am, when tens of thousands of people were still asleep, leading to mass casualties. Many villages and towns disappeared instantly.
The most conservative report of the death toll was 26,000, but the additional death toll brought about by plagues and famines caused by the flood was between 220,000 and 240,000. At that time, which was during the Chinese Cultural Revolution, the government mentioned nothing about this disaster. The devastation was not revealed until many years later.

Dam failures are a common cause for the flooding in China. In an interview I did with water conservancy expert Wang Weiluo last year, he said that the Chinese have not recommended and are not good at constructing reservoirs and dams to control water. 

In 1949, when there were roughly 20 total reservoirs in China, almost all of them had been built by the Japanese during World War II. Years later, the CCP sent people to the Soviet Union to learn methods of dam construction and the proper function of a reservoir: storing floods so that water can be used in times of drought. They built that belief from the theories in Joseph Stalin’s book Political Economy. In it, Stalin claims that we have mastered the tools to defeat nature by, for example, building reservoirs. 

There are now 98,000 reservoirs in China with 52,000 reservoirs in the Yangtze River Basin alone. If the reservoirs can safely store floods to fight droughts, as the CCP said, then China should have no floods or food shortages. But this is not the case. In recent decades, China has seen severe floods repeatedly. Why is this?

Because a reservoir needs to meet certain conditions for flood storage and drought resistance. However, in China, those conditions are not met. 
First, the capacity of the reservoir must be very large. For example, the capacity of the Aswan Reservoir dam in Egypt is 1.86 times the annual runoff. China’s Three Gorges Reservoir is 8%, leaving a smaller total capacity than the 9% annual runoff of the Yangtze River. What problems can this cause? As soon as the rainfall increases, the reservoir cannot hold any of the flood. Instead, floods need to be discharged downstream so that they will not break the dam or cause overflow around the reservoir. But discharging that water will cause floods downstream. Right?

Second, flood prevention for the benefit of Chinese citizens must be the first goal rather than a secondary one. But, in the process of the CCP’s economic reform, the right to use local reservoirs has been privatized. Reservoir operators must pay the government for the right to use the dam. Because of that, operators must rely on the dam to make money, For example, power generation and the sale of the water. The more dams they operate, the more money they make. 

To meet that need, dams are often built quickly, sacrificing quality in the process. That lack of quality has become a major cause in the floods seen in town and cities downstream of the dam. In fact, Chinese reservoirs have a failure rate that is twice that of other countries. It has been reported that from 1954 to 2020, more than 3,000 reservoirs in China had failed. 

Also because of these interests, reservoir operators are reluctant to discharge the flood in the reservoirs or they would discharge it at the last minute. You can imagine, this caused great danger to the residents living downstream.  

Now, the water level of 32 large and medium-sized reservoirs in Henan has exceeded the limit, and the situation is urgent. Agence France-Presse quoted a warning issued by the People’s Liberation Army, which supports local disaster relief efforts, that the Yihetan Reservoir in Luoyang “may burst at any time.” 
Phoenix.com reported that the Yihetan dam had a breach of about 20 meters on the 20th. The river embankment was seriously damaged, and the dam may collapse at any time. 

According to the Global Times, Zhengzhou has begun to release floods downstream due to the seriousness of this potential disaster. The water level of Zhengzhou Changzhuang Reservoir has dropped by 70 cm in one day, indicating that the flood discharge downstream is very strong. This will cause the human and industry costs already experienced downstream to continue to worsen. 

The Henan flood disaster is not only a natural disaster but also a man-made disaster. A disaster that could have been prevented, and an example of disasters that will continue to come. 98,000 poorly constructed reservoirs in China have become a sword hanging over the heads of the Chinese people. I hope that the people in the disaster-stricken area in Henan can survive this disaster smoothly. And I hope that the Chinese government will see the need to prevent these tragedies in the future by repairing these dangerous dams.

Thanks for watching, I’m Simone Gao and I see you next time.

Will DIDI Set Off US China Capital Market Decoupling? The Story Behind Didi’s Disastrous IPO

Simone Gao: Hello. Welcome to Zooming In China, I am Simone Gao.

On the final day of June, ride-sharing giant DIDI Global, China’s equal to Uber, made its initial public offering on the New York Stock Exchange. This listing had been years in the making, with industry insiders whispering about such a move nearly five years ago. But once the decision was made, the filing and approval moved at lightning speed with help from U.S. bankers backing the listing, including Goldman Sachs, Morgan Stanley and JPMorgan Chase.

For the first two days, DIDI’s IPO was a global success, emerging as the largest Chinese IPO on the U.S. stock market since Alibaba’s offering in September 2014. By the second day, Didi’s shares rose 16%, leading to a valuation of the company at about $80 billion. Then came the international firestorm.

The Chinese government, taken by surprise by this public offering, struck back quickly. The Cyberspace Administration of China, or CAC, announced on July 2nd that Didi would be placed under cybersecurity review. During that review, new users would be banned from accessing the app. 25 of the company’s other apps, accusing them of violating laws surrounding the collecting of personal information. On Sunday, the CAC announced that the Didi app would be removed from all Chinese app stores.

Following the announcement of that review and restriction by the CAC, investors left in large numbers, leading to a 5% drop on Friday and a 25% drop when markets opened on Monday morning. While the stock has recovered some of those losses, it still sits well below its success prior to the CAC review.

At its core, this is a conflict over data: who has it, who controls it, who can access it, and how it is used. Despite operating in 16 countries, most of Didi’s business comes from China where it controls nearly 89% of the rideshare market. With a market that size comes mass amounts of data, including sensitive data displayed on its map function. Even after the CAC ban, Didi has 377 million annual existing users and 13 million drivers who are still able to use the app.

After their early June public filing, Didi set a goal for an early July initial offering. Because they are incorporated in an “offshore tax haven,” they were not required to seek government approval for an overseas public offering. Still, Didi informed China’s National Development and Reform Commission and Beijing cyberspace regulators of their intent. Chinese regulators urged Didi to pause the offering over concerns that IPO documents required by U.S. regulators could provide sensitive Chinese data. One point of concern may have been the U.S. law passed last year named Holding Foreign Companies Accountable that requires Chinese companies to turn over audit documents including original accounting books for regular review.

Even though that law was not fully implemented before July 12th which has already passed Didi’s IPO date, the Chinese authorities worried about the documents submitted after the company’s IPO since the U.S. regulators would review audit documents every year.

Back to Didi.

So Didi did not commit to postponing the sale, saying only that they would consider the Chinese regulators’ request. Government officials claimed they did not intend to block the sale but wanted a chance to review Didi’s records. But rather than pause the IPO, Didi sped up the process, setting a sale date for June 30th.

It is not clear why Didi chose that path. One speculation is that Didi tried to finish the IPO procedure before the Holding Foreign Companies Accountable law was fully implemented so they didn’t have to provide sensitive documents required by the new law, at least for the IPO.

Didi’s only public statement has been that they were not aware that Chinese regulators would place them under review. But there is reason to believe that Didi was also concerned about regulators blocking the sale, and they had good reason to be concerned. The Chinese government blocked the Shanghai and Hong Kong IPO of the Ant Group last November, expected to be the largest IPO in their history, two days before trading was to begin. And, as several Chinese tech executives have said, despite the regulatory pushback from Beijing, this will likely still be a win for Didi.

The CCP has not taken this loss of control well, though, and the reigns placed on Didi have been added to other recently listed companies as well. Full Truck Alliance, an Uber-like service for freight trucks who had their U.S. IPO on June 22nd, and Kanzhun, an online job recruitment service whose IPO was one day later, have now been ordered to reject new user registrations and submit to a cybersecurity review.

A tightening of CCP control over the Chinese tech sector has been a long time coming. After the debacle with Didi, that control is growing. On Saturday, the CAC posted a proposed revision to their Cyber Security Review Measures on their website. The revised measures would compel companies with more than one million users and those “newly listing on foreign markets” to secure CAC approval and turn over IPO materials for review before listing shares in those markets. The CAC has made that proposal available for public comments until July 25th, though public feedback will mean very little in CCP-controlled China.

Because Didi has been classified by Chinese law as a “critical infrastructure provider,” they are viewed as holding national-security level data. The revisions to China’s cybersecurity law make that clear, nearly all of them centering on the holding and transmission of data. To the “Cybersecurity Law of the People’s Republic of China,” they have added the “Data Security Law of the People’s Republic of China.”

The earlier law applied only to those “procuring network products and services,” but will now also apply to “data handler, conducting data handling activities that influence or may influence national security.” As part of that review, companies will have to provide a written declaration; an analytic report on the possible influence on nationa lsecurity; a procurement document, agreement, or contract to be signed; and IPO materials provided for submission. Publicly, the CAC says their concerns are that “core data, important data or large amounts of personal information” might be “stolen, leaked, damaged, or illegally used or exported” and that the data of Chinese companies could be “affected, controlled or maliciously exploited by foreign governments” once listed. What they are not saying, though, is that they are equally concerned with the power and position their online platform giants, like Didi, will gain through these added investments. These Chinese tech giants are simply not allowed to exist like before. Their power has to be reined in.

As Chinese companies grow more powerful, they become a direct threat to the regime, and the CCP has consistently squashed any threat to its power. But TS Lombard’s expert on China’s economy, Rory Green, wrote in a recent note that “crackdown on Didi opens a new front in China’s tech assertiveness: this is a question of sovereignty. The battle for data sovereignty is beginning and China is already fully motivated.”

It is not clear how long the crackdown on Didi will continue nor how many future Chinese companies may be affected. What we do know is China’s online “platform economy” has joined Big Tech under the hawk-eyed watch of the CCP regime. As China continues to strong-arm the giants of their corporations—including Didi, Ant Group and, recently, even Tencent when they attempted a merger the CCP believed would give them too much power in their sector—Are we going to see a China that will go back to the old days of the planned economy where the government controlled everything? Let’s wait and see.

Thanks for watching Zooming In China. Please like, share, and subscribe to our channel if you like our production. Most importantly, please sign up for our membership website at zoomingin.tv. $5 a month, and you can cancel anytime. We have video audio formats of our show, in-depth reports only for the members, and live Q&A with me on the website. Thanks for watching. I am Simone Gao and I will see you next time.

Biggest Onshoring in US History Will Rebuild America’s Chip Industry: Fmr Under Sec. of State Krach

Simone Gao:
Hello everyone, and welcome to Zooming In China. I’m Simone Gao. In 2020, the world’s largest and most advanced chip maker, Taiwan Semiconductor Manufacturing Company, announced plans to build a $12 billion plant in Arizona where they would produce 3 nanometer chips. This is the largest onshoring in U.S. history. What is the full strategic meaning of this onshoring for America? The U.S. also recently passed several bills that will help America compete effectively with China in the high-tech arena. How impactful will that legislation be? What are China’s vulnerabilities? And how will U.S. capital markets react to the recent disastrous IPO of Didi, China’s version of Uber? I had these discussions with former Under Secretary of State Keith Kroch. Take a listen.

Simone Gao:
Thank you, Secretary Krach for joining Zooming In China today.

Keith Krach:
Thanks so much, Simone, for having me here. I really appreciate it.

Simone Gao:
Okay, so you were responsible for securing the crucial semiconductor supply chain and led the largest onshoring in U.S. history with a $12 billion manufacturing facility of TSMC from Taiwan. TMSC started to construct their plant in Arizona just recently, and they plan to invest, over the years, up to $70 billion into this Arizona facility. So tell me about it, the context and the significance of this effort.

Keith Krach:
Sure, Simone. So, as you know, I just returned from Arizona where I met with Governor Ducey to thank him for helping the onshoring of TSMC. He was a vital partner on that. And I also spent a good amount of time with TSMC when I was there. And the deal is an absolute game changer for securing the U.S. semiconductor supply chain. When we did the deal with TSMC, we had basically five theories that actually all came true. And the first one was that TSMC would increase their historic $12.5 billion investment over time. And during my trip, it was great news to hear that that investment will now grow to over $70 billion over the next six years. And that is way faster and bigger than we anticipated. The second theory we had is that TSMC would also bring its ecosystem of suppliers all the way to the United States.

Keith Krach:
And indeed, they are. TSMC is bringing nine major suppliers, and those major suppliers are bringing their own suppliers. And so, this is what we call in the semiconductor business the clustering effect. It’s more so than in any other industry. And that’s how Silicon Valley originally got formed. The third catalyst, the third theory is really a catalyst about congressional funding. And we worked with Senator Warner and Senator Cornyn to discuss and design the $5 billion chip act, which is, which is now incorporated into the $250 billion innovation and competitive act that just got passed in the Senate, and now it’s on its way to the House. The other big thing, I think, you know, a theory was, was there to be a giant leap towards bringing high tech manufacturing back home to the U.S. where it belongs. And this really means training of Americans and more high paying jobs. And most importantly, bringing critical know-how, which we’ve lost over the years, which is so vital to stronger national security. And then finally the fifth one is that it would also be a catalyst for getting other semiconductor companies, foreign and domestic, to bring their manufacturing back to the U.S., and indeed, that is happening.

Simone Gao:
Right. Right. I see Intel is definitely following suit. So, in addition to recently meeting with TMSC and the governor in Arizona, you also met with the executives at Intel. So, tell me about that meeting, and do you think the onshoring of TMSC will also help the U.S. chip manufacturers to pick up speed to build in the U.S.?

Keith Krach:
The answer is absolutely yes, Simone. We had a great meeting with Intel. You know, that’s really our fifth theory came true in a big way. The TMSC deal is not only bringing an ecosystem, but it really sparked an investment from other chip companies like Intel and Samsung. My old friend Pat Gelsinger, the new CEO at Intel, didn’t waste any time in terms of announcing that he’s going to expand their $20 billion fab in Chandler and expand it by $20 billion. And I think it goes without saying, we got a warm reception from governor Ducey because now over $100 billion of semi-conductor ecosystem investment is going into Arizona. It’s, it’s going to end up being the new Silicon Valley. You know, it gets better. Samsung, the number two player, will be building a $17 billion fab in the U.S. in a yet disclosed location. So, I really think the onshoring with TSMC, with everything combined, it sparked what will go down in history I think as the most strategic onshoring the world has ever known.

Simone Gao:
Right. That said, you know, China has the most complete industrial manufacturing capability in the world right now. It is the only country that has all 41 major industrial categories, 207 medium industrial categories, and 666 industrial subcategories. So as part of your global economic security strategy, you designed two pieces, two bipartisan pieces of legislation: the $50 billion Chips for America Act and the $150 billion Endless Frontier Act. Both have been combined to form the new $250 billion Innovation and Competition Act. If America wants to rebuild its industrial manufacturing capabilities, where should it start? Does the U.S. Innovation and Competition Act set a good direction?

Keith Krach:
Yes, yes. Yes, it does, Simone, and our global economic security strategy had three pillars. You know, the first is to turbocharge U.S. economic embeddedness and innovation. The second was safeguard American assets. And the third was to build a trust network of like-minded nations and companies that operate by a set of democratic principles. So, the $250 billion U.S. bipartisan Innovation and Competition Act that incorporates the two pieces of legislation we designed, which was that $50 billion chip act and the $150 billion Endless Frontiers act adds key monies, also, for alliance building and economic statecraft. And, and, you know, just like we did in the semiconductors, the bipartisan $250 billion bill aims to secure 10 tech-intensive sectors through research funding that vital American industries simply cannot cede to China, Inc. And these include things like advanced communications, like 5g, 6g, AI, clean energy, cybersecurity, quantum, robotics and advanced manufacturing, biotechnology, there’s a few others. And I think, you know, dictator Xi’s biggest fear is the U.S. has another Sputnik moment and commits to the equivalent of a moonshot. Well, this bill is designed to do exactly that by taking away the technological advantage from China, Inc. and return it to the U.S. So, the U.S. ICA, as it’s known, will help ensure tomorrow’s technology is trusted technology and that it empowers free societies facing perpetual authoritarians threats.

Simone Gao:
Right. So, in other words this rebuilding of U.S. industrial capability will start from the high-tech sector. Is that right?

Keith Krach:
That’s absolutely right. That’s the one that’s the critical battleground. It also is the one that drives productivity that affects all of the classic industries. So, it’s absolutely critical. And, you know, at the base of that is semiconductor manufacturing, and then all those technologies on top of that, that help drive productivity.

Simone Gao:
Right. You know, also with the Endless Frontier Act, the U.S. is supporting and subsidizing research, to a certain extent, of the key technology industries. We know China has been doing this for a long time, subsidizing its key industries, and it has worked very well, worked out very well for China in the short term. But such practices are not fair to other companies in the world and, in the long-term, I think it stifles innovation. So, in your discussion with Senator Schumer and Senator Young, did you recommend how America is going to be different when supporting its key industries?

Keith Krach:
I’m sure. You know, America believes in fair trade. We’re free traders. But when somebody comes in the market and doesn’t play by the rules, the market is no longer free, and you have to do something about it. So, you know, since the 1960s, the U.S. government’s long-term investments in research have been declining. We once led the world. Now we rank ninth globally in total R&D and 12th in publicly financed R&D. So, when we designed the Endless Frontiers Act, and we presented Senator Schumer and Senator Young a plan that could take that $150 billion of that Endless Frontier’s money and turn it into $500 billion with private, with a private sector match, and also a match from our closest technological allies. And we also proposed the governance model that would accomplish that. You know, from my experience building companies out here in Silicon Valley, I can tell you that securing these advanced industries is not cheap. You know, however, when the government targets smart investment in research and development, and we partner with the private sector, we get a tremendous bang for our buck and, and just look at the Apollo program. That’s the analogy that I give. You know, over $140 billion in investment put a man on the moon, and the program not only led to American leadership in aerospace and microelectronics, but it also resulted in trillions of dollars in annual reoccurring GDP as a result of that.

Simone Gao:
Hmm. Okay. That, that’s good to know. Let’s talk about Taiwan. Secretary Kroch, you were the highest-ranking U.S. State Department official to visit Taiwan in the past 41 years. You led the signing of the U.S./Taiwan Lee Economic Prosperity Partnership and the U.S./Taiwan Science Cooperation Agreement. Now, trade negotiations between Taiwan and the United States, under the trade and investment framework agreement, resumed on June 30th after a four-year pause. So, how do you foresee the U.S./Taiwan trade relations will developed in the near future?

Keith Krach:
Well, Taiwan is a role model of democracy, not just in the region, but around the world. And, you know, Simone, when I went to Taiwan, the CCP greeted me with 40 fighters and bombers, and I think that shows their contempt for democracy. And it’s reminiscent of the cooption of Hong Kong. The visit was also one of my six Taiwan initiatives to strengthen our ties with Taiwan. Obviously, it included the TSMC onshoring, establishing the Lee Economic Prosperity Partnership, and also assisting Taiwan’s membership in international organizations, as well as forming the science and technology pact and encouraging more high-level exchanges, which all strategically led up to a trade agreement. So, I applaud President Biden for building on those Taiwan initiatives and moving forward with the TIFA, because continuity of policy is really important for our allies. And there’s two reasons a free trade agreement is so strategic for preserving Taiwan’s democracy and also our national security.

Keith Krach:
And the first is the Free Trade Agreement creates, when you do one of those it creates a halo effect for increased U.S. private sector investment, which leads to increased private sector investment from our allies. And if there’s a conflict, then we’re going to need all our allies, and they will be more apt to join if they have a significant investment in Taiwan. The second reason is…political risk is the other threat to Taiwan’s democracy. You know, it was just a couple of years ago we had a deep concern that a pro-Chinese Communist Party candidate would be elected. And before I went to Taiwan, about a week before, President Tsai made a bold and a diplomat, uh, domestically unpopular move to remove the biggest hurdle to a U.S./Taiwan trade agreement by lifting their beef and pork restrictions. And when I was there, I could really see it, and that move cost, I think, a lot of political capital, and a trade agreement would be a big political win for the pro-democracy supporters. It makes sure the bad guys don’t get elected.

Simone Gao:
Right. Do you have any plans to go to Taiwan in the near future?

Keith Krach:
Well, you know, I’d love to take my family there, my five children and my wife, because they’re just such wonderful people. I’ve been doing business over there for, for so long, but they’ve never had a chance to go there. And, you know, particularly, the family could no longer go to China. As you know, my family was sanctioned by dictator Xi about a minute after my term was complete, and it wasn’t because of anything I said. It was because of what we accomplished and all those national security initiatives where we got results.

Simone Gao:
Yeah, that’s right. You are the number three on the sanction list from China, right?

Keith Krach:
I certainly was. And, you know, the way I look at it is why react when you can act, and I’m not going to bend a knee to emperor Xi, that’s for sure.

Simone Gao:
That’s it for today. Please like, share and subscribe to my channel if you like our production. Also, mostly importantly, please subscribe to my membership website, zoomingin.tv. Members get video/audio formats of my show, transcript and members only in-depth reports. I will also do live Q & A with members on the website. $5 a month. Cancel anytime. So, please check it out. Thanks for watching. I’m Simone Gao, and I’ll see you next time.

China’s Top Spy Head Did Defect!? Media Reports Show China lied about Him Attending a Meeting

Hello everyone, Welcome to Zooming In China Chat. I am Simone Gao. As you can tell, this is not my normal setup because I am on vacation right now, but there is some really important stuff coming up that I have to report for you guys, so I just did an interview with Solomon Yu who has some detailed information about the Chinese defector Dong Jingwei. Solomon is Republican National Committeeman for Oregon. Vice Chairman and CEO of Republicans Overseas. He received Dong Jingwei’s information from a high level U.S. official who he can’t reveal the identity of. His source confirmed that Dong Jingwei was the vice minister of China’s public security bureau, he did defect and he brought bombshell information about the origin of the virus, China’s biological weapons program, China’s spy operation in the U.S., and information on specific compromised U.S. officials.

So far, I can not independently verify the information he provided. And because some of the information he provided is very sensitive and likely to be censored by YouTube, I moved part of my interview with him to my brand new membership website. My website is Zoomingin.tv. If you register as my member today, you will be able to watch the rest of the interview tomorrow on my site. My membership fee is $5 per month, benefits include video, audio format of my shows, most transcripts, behind the scene clips, and exclusive in-depth report that will come in the future. I will also do live Q & A with members from time to time.  Becoming a member of Zoomingin.tv is the best way to support my work. So friends, please spread the words and register today. Now let’s go to my interview with Mr. Solomon Yu.

Simone Gao (00:00):

Solomon, you have information on this, supposedly a Chinese defactor. A high-level Chinese official that recently defected to the U.S. Tell me about it.

Solomon Yu (00:16):

Yes. I got a secondary source, which I can’t reveal, and confirmed it. DIA, that stands for Defense Intelligence Agency, run by our military, has the defector in its custody, protective custody.Simone Gao (02:41):

Okay. Yeah. So there are a few things that we need to get to detail of. First of all, this person, he is, his real name is actually Dong Jingwei, and he is the Vice Minister of the public security of China. Is that true?

Solomon Yu (03:00):

That’s correct. Dong Jingwei actually is a highest ranking contra-espionage match officer in China’s State Security Ministry.

Simone Gao (03:27):

so when did he defect?

Solomon Yu (03:35):

In mid-February.

Simone Gao (03:39):

So he has been in the U.S. For, for four months, almost

Solomon Yu (03:45):

That’s correct. As a matter of fact, here is the background. If you remember that high-level meeting between U.S. Secretary of State and National Security Advisor in Anchorage, Alaska with Foreign Minister Wang Yi and, uh Mr. Yang they asked for U.S. To return Mr. Dong, the defector, and of course the Secretary of State didn’t even know DIA has uh, Mr. Dong, and Mr. Dong was working with DIA for quite some time, because Anchorage meeting was about March some time, right? And so now the White House, everybody else starts scrambling. They say, “Hey, who really got you know, spy, or defector.” And pretty soon, DIA has to come clean and say “we got it.”Solomon Yu (05:20):

And also bad news for Biden and Biden family, because he also provides information about Biden’s son Hunter, was in China, and the picture of having sex with minors, all those stuff also came out. And so that was the reason actually Biden ordered 90 days, U.S., uh Intel community review. When we talk about Intel community, we will talk about 16 U.S. Intel agents and review what happened to Wuhan virus. And the latest thing was White House National Security Advisor will say no to Xi Jinping. And gave Xi Jinping’s choice between allow Western scientists going to Wuhan lab to investigate or free world will isolate China.

Simone Gao (06:41):

Right. Let me just get this clear. I don’t quite understand the rationale between, so supposedly China has photos of Hunter Biden in China having sex with minors, and they are using this to threaten President Biden? And somehow the, how is this related to Biden then decided, you know, they’re gonna, they’re gonna investigate the origin of the virus in China? How are these two, two things related?

Solomon Yu (07:15):

Okay. When DIA reported to the White House saying that the defector provide us a list of information including Chinese assets in U.S. Companies, individual, U.S. Companies, and individuals fund Wuhan virus involvement. And, last part of it was U.S. Individuals, the Americans, actually paid by CCP to betray American America and providing information to CCP. And there is a DVD. And that is information on Hunter Biden, basically information confirmed Hunter Biden’s lots of pictures and those sex pictures in China, okay? And so Biden is not that stupid. You can’t be seen soft on China, especially six hundred thousand Americans are killed by the CCP virus, right? And for that reason, he has to show, he also gets tough on China. That’s why he were not,ugoing to investigate,uCCP virus. And now he changed his mind. Ordered 90 days review. That’s how it played out.

Simone Gao (09:20):

So, President Biden just knew about the existence of this, uh, defector recently, right before he decided to research for the origin of the virus?

Solomon Yu (09:33):

That’s correct. Very recently. And if I have to say, DIA played everyone, including State Department CIA, FBI, and the White House. Very, very well.

Simone Gao (09:53):

Okay. So why did they not release the information to the State Department and White House in time?

Solomon Yu (10:02):

Because they suspect many, many Chinese assets, agents, in those agency, including CIA, FBI, at State Department. They don’t want to compromise what they got.

Simone Gao (10:20):

Okay. Okay. All right. So now let’s go to another important detail. What did this person actually reveal about the origin of the virus and also the Wuhan lab?

Solomon Yu (10:34):

Okay. P4 lab and a couple of things. Actually, they have several bioweapon programs, and the Wuhan virus is one of them.

Simone Gao (10:51):

Okay. So Wuhan lab is one of China’s biological weapon programs. It belongs to the, the PLA, I mean, at least…

Solomon Yu (11:04):

It’s a civilian lab, but also they do, uh, PLA, uh, bioweapons research. Dr. Fauci and the…yeah. Daszak, who also has a, nonprofit program and who Dr. Fauci fund the Wuhan program through Dr. Daszak. As a matter of fact, Dr. Fauci, uh, lied to Senator Rand Paul during Senate hearing. And so all this is kind of come together. Basically, the flood gate is open.

Simone Gao (12:34):

Okay. So this defector confirmed that Dr. Fauci’s program funded Wuhan lab, right? Okay. Did he say why Dr. Fauci would fund a biochemical weapons program in China? Related to…?

Solomon Yu (12:57):

No, I don’t know. And basically they fund several biprogram bioweapons programs, not just one. Uh you know, you also have to speculate there are many, I call, traitors in America and they take money from CCP, and then they provide information to CCP and they fund the CCP program. So if, if I have to speculate, it’s driven by greed.

Simone Gao (13:45):

Okay. Okay, great. What about the origin of the virus? Was the virus leaked by the lab or released by the lab? What, what, what did he say?

Solomon Yu (14:00):

I think it is leaked by lab and right now, based on, White House national security advisor’s interview. And our goal is getting into that lab as to see what is going up to investigate.

Simone Gao (14:19):

Okay. So this person did not exclusively, definitively say this virus was leaked from the lab or released from the lab, or it is lab made or naturally formed? Did he say that?

Solomon Yu (14:37):

He did not say leaked or purposefully released, and, but that is part of the weapon program.

Simone Gao (14:48):

Okay. So Wuhan lab is doing these very dangerous gain of function research with bat coronaviruses, which is part of the China’s biological weapons program. And he said, he confirmed it, right?

Solomon Yu (15:05):

That is correct. Right. And it’s not just one, okay? AndCovid 19 is not the only one. There are others. Other bio weapons programs.

Simone Gao (15:19):

Okay. did he say how many?

Solomon Yu (15:23):

No, I don’t know.

Simone Gao (15:27):

Um alright. Did he also say China’s spy operation in, uh in, in the U.S.?

Solomon Yu (15:37):

Yes.

Simone Gao (15:39):

Okay. What did he say?

Solomon Yu (15:40):

He said that, one third of Chinese students studying in America are spies. And they got assignments, and also their networks CCP funded programs, agents operating in U.S. And that you enlist all that.

Simone Gao (16:12):

Okay. Alright. I’m looking at the report right now. What other information you get from your source about this guy?

Solomon Yu (16:28):

Well like I said before Americans actually paid by CCP to provide information and to help China to steal our technology. And the other thing is like I said, American companies and Americans funded China’s bioweapons program research.

Simone Gao (17:09):

Okay. So it’s very hard for me to imagine that NIH, those government agencies has no idea that the Wuhan lab is doing this kind of gain of function research that’s related to the Chinese biological weapons programs. And they are funding them through a third party. I think they do this intentionally. Knowingly. So is this just because Fauci is compromised, is corrupt, or is this a government action, government behavior and they want to…

Solomon Yu (17:51):

Fauci is corrupt. No question in my mind. And also anybody lie to Congress, okay, in his case, lied to Senator Rand Paul during the Senate hearing and knowing it is a perjury and I’m hitting Rand Paul. I already hit it. Rand Paul should do a criminal referral of Fauci, for perjury. So it’s not just funding CCP on bioweapon research, then lie about itself is a perjury. It’s double jeopardy now.

Simone Gao (18:42):

Right, right. I’m still, I can’t imagine those American traitors. They use the American taxpayers’ money to fund China biological weapons knowingly, just to make a few bucks?

Solomon Yu (18:57):

Yeah. So this, this thing really big.

Simone Gao (26:46):

Do you think this do you think Mr. Dong Jingwei will appear on media and testify or go to Congress to testify in the near future?

Solomon Yu (27:02):

No. I don’t expect that. By the way, the good news is, he is not the only defector.

Simone Gao (27:10):

Okay. Who are the others? How many are there?

Solomon Yu (27:16):

I was told that at least one more, and I could not confirm the rank. And the name. But there Is another one.

Simone Gao (27:28):

They defected the same time?

Solomon Yu (27:32):

There’s some space between those two. You know, they kind of verify each other. You can talk to one and talk to the other, kind of confirm each other’s story. So there are two defectors, at least, I know of.

Simone Gao (27:49):

Okay. And they defected at the similar time, around the same time?

Solomon Yu (27:55):

Around the same time. And I don’t know how many months apart, okay? I can’t confirm name and title and all that, but, hey, when you have one is talking, the other one also talking, you can verify information.

Simone Gao (48:41):

Okay. Thank you so much Sullivan.

Solomon Yu (48:45):

Bye-Bye. Bye.

The Biggest Myth of China’s Economy: Why Doesn’t the Real Estate Bubble Pop? | Zooming In China

Simone Gao: Hello everyone! Welcome to Zooming In China. I’m Simone Gao.

Would you enter a lottery where the grand prize was a chance for you to spend $1.5 million? Or pay an extra $30,000 at closing, without protest or pause, when the seller suddenly raises the asking price? Would you risk it all on real estate knowing it would take 40 years to pay off a 750 square foot apartment?

The answer for those living in China’s premier cities, including real estate hotspots in Beijing, Shanghai, Shenzhen and Guangzhou, is yes.

In Shenzhen, 288 apartments offered in a new property development sold out online within 8 minutes. Another new real estate development led 9,000 people to put down a deposit of one million yuan just to qualify to buy the apartments.

In the same city, in 2019, average house prices are 35 times of a family’s gross annual income.

The real estate market in China is hot. Too hot. It’s a market condition that cannot hold. But in China, it must.

It must hold, because 78% of the country’s wealth is tied up in real estate. It must hold, because, as China analyst Nigel Vinson recently said: “The economic fallout of a bursting property market bubble would be catastrophic. A burst would lead to a sharp decline in property values, which would then send shockwaves through the financial industry as millions of Chinese investors trigger mass mortgage defaults. Additionally, China’s emerging middle class would be disproportionately affected, dealing a solid blow to a fragile Chinese economy.”

But while financial experts and fintech analysts keep their eyes on the sharp rise and expected dive in China’s property values, it is not the property that will keep the bubble from its catastrophic burst. It is the land beneath it.

That land is owned by the Chinese government.

They took possession of all lands within China’s borders after the 1949 creation of the People’s Republic of China and following a bloody “land reform movement” in the countryside. That movement encouraged the laborers to take possession of landowners’ lands by any means necessary, including violence. Those revolts led to an estimated 2 million landlords killed and up to 4.5 million total deaths. In the end, though, it was not the laborers but the PRC who claimed the lands as their own.

They secured permanent possession of that land in the 1982 Constitution, writing that “the land in the city belongs to the state. The land in the countryside and the suburbs of the city, except for the state owned by the law, is owned by the collective.” That means the land is owned by a group of people within the community or belongs to certain community organizations.

However, the central government or the local government has the authority to requisition such collectively owned land for use that serves the interest of the country. A lot of times, such interest  falls into the category of urbanization. After the countryside is urbanized, the land would be rented out by local government to real estate developers. On top of that,  the leaders of such rural communities are all Communist members. They decide how the land should be used.

It is not an exaggeration to say that the CCP is now the sole landlord in China. There is a sale not of the land itself but of the right to build on that land. For commercial use, the lease is 40 years, for residential use, it is 70 years.

The CCP control the supply of buildings because they control the land beneath those buildings. And because they are the only actor in this game of land ownership, they also own the market, control the supply, and can manipulate the rise and fall of housing prices. And with the CCP in control, no matter how strong the economy may be, housing prices can fall; no matter how weak the economy has become, housing prices can rise.

Thomas Orlik, author of China: The Bubble That Never Pops, wrote that “for China’s government, real estate is the ballast that keeps the economic ship afloat.” In the past, that has often led the CCP to insist on building more real estate at any sign of the economy slowing down. And for outsiders, that move may look like a benevolent government trying to protect its citizens by offering more property in order to drive down real estate prices. More supply means less demand for the available supply, leading to more manageable costs. And that would be a reasonable assumption in a democratic society.
In the case of the CCP, though, their interest is self-preservation, and their ballast is the land transfer fees, or the costs the Chinese people pay to rent the land they live on. Those fees are a sizeable portion of the CCP’s fiscal revenue. In 2020, a full 44% of the local government’s revenue came from land transfer fees.

But now that ballast is faltering. The pandemic stripped the economic foundation of many Chinese citizens, the kind of foundation needed to support a booming real estate market. Average Chinese families are left with debt outpacing their income, raising the risks of defaults on home loans. And rigid controls on overseas investments, paired with fears about the stability of local stock markets, have pushed wealthier Chinese citizens to invest their money in real estate, further reducing the supply of housing and driving up costs on what is still available. In fact, real estate investment is the only viable investment option left for the rich Chinese people.

A crisis is approaching. And the CCP knows it.

In March, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, revealed his concern over the “bubble” in Chinese real-estate prices and unveiled steps the government would be taking to stabilize the market. His first concern was the purchase of properties as investments rather than as homes. But one concern is even more critical, according to Guo: the likelihood of a sharp drop in home prices leading to economic instability in Chinese banks.

Based on China’s central bank data, roughly 1/5 of all loans at China’s banks are home loans and the majority of bank credit was granted based on real estate collateral. Because of that, the financial stability of China lies in stable property prices, and skyrocketing prices have already led to serious financial industry impacts. Guo told reporters that in 2020, Chinese banks had to dispose of $470 billion dollars in bad debt. That followed a $1.36 trillion disposal of debt between 2017 and 2020, a total equal to the 12 previous years combined.

The government has developed new tactics in their attempt to control the rise in property costs, a battle best seen in the southern city of Shenzhen where a modest apartment now costs more than one million dollars. Their first tactic is the most aggressive, and it targets the banks and their lending practices.
In February, the Chinese government set new standards for banks to follow when reviewing mortgage applications. In Shenzhen, the banks received an 84-page document listing maximum prices for more than 3,500 city real estate developments. While buyers could pay more if they chose, they would have to come in their down payment and not in funding from the bank.

While these measures by the Central Government of the Communist Party of China suggest an effort to suppress the sharp rise in housing prices, it is not a sincere move towards bettering this housing situation for millions of China’s citizens or the economic viability of the developers funding the construction projects.

However, experts say the CCP government would likely drive the real estate prices up again once they need to stimulate a slowing down economy. After all, real estate remains the backbone and the most powerful engine of China’s economy.

That is to say, as long as the Chinese Communist Party continues to own all the land, continues to charge fees for its citizens to live on that land, and continues to rely on that income to fund its regime, the Chinese economy will remain in danger of a catastrophic burst of the real estate bubble.

Thanks for watching. Please like share and subscribe to our channel if you like our production. Most importantly please sign up for our membership website, zoomingin.tv. $5 a month, cancel anytime. We will have audio video formats of our show. Transcript, in-depth report, extra interview clips, live Q&A with me just for the members. So please check it out. I am Simone Gao and I will see you next time.

Break Leg and Drink Infected Urine to Avoid Slave Labor in Xinjiang Prison | Zooming In China |

Simone Gao: Hello, everyone. Welcome to Zooming In China, I’m Simone Gao. Today I invited a friend of mine, Charles Yu, to our program. Charles has a legendary life story. He graduated from one of the top universities in China, but ended up in China’s prison for almost 10 years because of a mind and body exercise he practices. Today, he will tell us how some of the famous food snacks were produced in China’s prison and what the inmates in Xinjiang were doing in order to escape the slave labor. Thank you Charles, for joining Zooming In China. First of all, can you introduce yourself to our audience a little bit?

Chao Yu: Yeah. Thank you for having me Simone. My name is Chao Yu. I was born and raised in China and I graduated from the most prestigious university in China, Qin Hua university. I am a Falun Gong practitioner, and in 1999, China’s Communist Party regime began stamping down Falung meditation method. So I helped Western journalists to interview people persecuted by Chinese Communist Party because of their beliefs. And I was put into prison for nearly 10 years. In 2013, I came to the United States for seeking asylum.

Simone Gao: It’s great that you and your family are in the United States right now.I know when you were in China’s prison, you did slave labor. Tell me what you made and how you guys make those products.

Chao Yu: We have done a lot of slave labor. Just for an example, we were, we were forced to wrap the candy paper to candy, the prison got a job from a candy company. And they force us to wrap the candy paper to the candy. You think this job is very lightweight, but it is not because you need to press the paper, press a candy tens of thousands of times. And gradually your nail will be blackened and peeled off from the nail bed. It is very, very painful. It is very painful. You just cannot sleep and when your hands touch the water, your hands will just as bite by some bee or by some wasp.

Chao Yu: So, I have observed many peoples nails peel off from their nail bed. And because the quota of everybody is very, very heavy, so people have to work for morning to the night just in our prison cell. So, the prison cell is very dirty, you know? And the prisoners, because of this painful experience, they hate the prison guards. They hate the candy company. They hate, and users, consumers of the candy. So they put their bodies secretions, their bodies, fluids even their own semen on the candy and wrap them to the candy.

Simone Gao: Do you still remember the name of the brand?

Chao Yu: Yes, Laobute, the brand is Laobute, I still remember it. And I can even give you the URL of this company.

Simone Gao: Okay. So, do you think the candy company knew that this is happening? This is happening to their product?

Chao Yu: Of course they knew, of course they knew. When they hire the prison to do this kind of job, they knew everything, just as Western company such as coffee company or gift company hire chinese prisons to outsource their products to China. And they knew this kind of job will be done by prisoners. You know?

Simone Gao: So when the prisoners were like wiping their body fluids onto the candies were the prison prison guard around? I mean, did they see what the prisoners are doing? And did they intervene?

Chao Yu: We have two CATVs in one cell. In one cell there are two CATVs. We are under close surveillance. Of course the guards know, but the guards don’t care. What they care is that we don’t eat the candy. They just prevent us from eating the candy. They don’t care if the candys, are clean or dirty.
Simone Gao: Okay. That’s absolutely just imaginable. How many hours did you work?

Chao Yu: It depends on the quota, it depends on the job. If they get a job of huge amount of candy to wrap, we have to work for a very long time. If the job was not so much, they will arrange us to do other job, agricultural job, to plant some for example, leek in the field, or plant some soybean in the field, or plant some corn in the fields.

Simone Gao: Okay. Did you ever paid by the prison for the jobs you do?

Chao Yu: Nominally, we were paid. You know, every prisoner has some financial fund distributed by the prison administration. For example, one hundred renminbi yuan, we were supposed to be given 100 renminbi yuan per person, right? And the prison collect all of this money and they force us to do those agricultural job, right? And we plant corn, we plant eggplants. We plant soybean, we plant leek, and they use our money to buy the agricultural products from the fields as our food, you know? So it’s just like a kind of money laundry, money laundry in prison. They use our money, distributed by the prison administration, and buy the food from the field and feed the food to us, and they keep the money. And they buy this food with very high price, much higher than the market, you know?

Simone Gao: This is absolutely incredible. I know you know, a person from your prison cell who told you about what happened in Xinjiang’s prison. Tell me about that.

Chao Yu: Xinjiang prison is some sort of hell-like existence to our Beijing prisoners. For those outlaws those criminals, those dissidents, like me, who made so many troubles to the Chinese Communist Party they will send these kind of troublesome people to Xinjiang prison. As a Beijing prisoner, you will be treated better, much better in Beijing prison then in Xinjiang prison, because your family member, your relationship can reach you in Beijing prison. So, the guy who have been sent to Xinjiang prison at least once, I spent several years with him in the prison I was in. He told me some stories in Xinjiang prison, and in Xinjiang prison people were forced to do very heavy labor. And some guys try to avoid these kind of labor, they just smash their leg broken, by using rocks, to avoid those so cruel labor, you know. And you have to do it, and you were injured in the working or faking illness will be severely punished in prison. So you can imagine how cruel the labor is and when you catch some infectious disease and you are in hospital, those guys in your friends circle will request you through different relationship to you because, you know, people are isolated from one-to-one in prison.

People cannot talk with each other in some circumstance in prison. So people need to use their very close relationship to reach you and ask you for your urine to gather same infectious disease. For example, you caught the hepatitis, just for an example, and you just in a half-life and lying in the bed of hospital, and your friend will ask you: “Please give me some of your urine”. And you cannot just pass your urine over him, because everything you pass to another guy, for example, your lunchbox or your cup, normally in very hard conditions, you don’t have have cup, you only have a lunchbox. You cannot put your urine in the lunchbox and pass it to your friend, you have to soak your urine into a towel and pack the towel in a lunchbox and pass it to your friend. Because experienced prison guards will inspect everything you pass another guy. So, from one by one, your towel soaked with your precious, highly infectious urine being passed to the hands of your friend. You know, only the best buddy of yours can get your urine, because the one who wants the urine and the one who give the urine will all punished severely once this kind of deed is exposed to the prison. 

Because you’re trying to avoid the labor, and you will have very bad example to other prisoners, you know? So, you know, in Xingjiang, it in the west of China, normally it is very cold, especially in winter. And in the freezing winter, your friend, get the towel soaked with your urine freezing, freezing cold, like an ice block. And he just chewing and suck and swallow anything he can get by his teeth and leaves squeezing from the towel, and hoping get the same disease, you know? That it’s the situation in Xingjiang prison. That’s just one story. Yeah.

Simone Gao: This is unimaginable. Did that person tell you those people passing urines, were they Chinese, were they Uirghers, were they Han people? What ethnic group do they belong to?

Chao Yu: I think they are Han people, but I don’t think it matters if they are Han people or Uighur people, or any ethnic group, because when you are the prisoner, you are in such kind of condition you can be hurt. So, they are Han people.

Simone Gao: I don’t know if you know the answer to this question, but do you know how widespread is this kind of practice by the prisoners in Xinjiang?

Chao Yu: I think not only in Xinjiang, but in whole China is an institutional practice. Of course there will be differences between extent, but, you know, since Chinese Communist Party took power in China, since 1949,  in several decades of years, they just gave the prison guards very, very small amount of money which cannot maintain their life. What they give the prisoner prison guards is the power to torture those prisoners. So the slave labor are the main income of the prison institution, including the staff in the institution those prison guards are human being too. They have family to raise, they have children to feed. They need to buy, for example, an earring or necklace or a colorful cloth for their wives, right? How can they, how can they afford this stuff? They have to squeeze those prisoners and force them to do the slave labor. “So I think that is an institutional practice all over China.”

Simone Gao: Right. And I know when you were in the Beijing prison, you were tortured, right? Tell me what they did to you.

Chao Yu: They handcuffed me on a wooden board, two handcuff on my two hands, and use rope by my two legs on a wooden board. When I had to go to the bathroom they, in the first several days, I was forced to urine in my pants. And after that day, they gave me this big container, and with one hand handcuffed in the board. I have all of those things under close surveillance. It is kind of, it’s a harassment, in fact, deliberate harassment. It’s a deliberate harassment. And I use these container to take, take the waste out tell from my body and do all of those things with one hand. And were handcuffed on the board, wooden board again. And I was de deprived sleep. And I was, they use very huge amount of volume of music to broadcast music just this far from my ear, from the morning, I guess six o’clock to the 10:00 PM, 6:00 AM to 10:00 PM, keep using noise to bomb me, just like bomb, you know? Bomb my ear. A lot of these kinds of things. Yes.

Simone Gao: Is your hearing damaged?

Chao Yu: My hearing, yes, maybe because of deprived, to my own experience, deprivation of sleep damaged my ear, I don’t know why. After long deprivation of sleep my ear, just.

Simone Gao: Okay. How many days have they, how many days did they handcuff you to the wooden board?

Chao Yu: Nearly 100 days. And they deprived my sleep for nearly three months. Every day I can only sleep one to two hours I guess. They asked me to sign, sign some commitment to convert from my belief. Finally, I cannot resist. I have to sign. So it hurts me internally.

Simone Gao: Yeah. You’re forced to give up your belief. 

Chao Yu: Yeah.

Simone Gao: Are you forced to slender it, right?

Chao Yu: Yeah.

Simone Gao: Okay. Tell me about your life right now. You’re in the states, when did you come and what is your life right now look like?
Chao Yu: I and my family came to the United States in 2013, and I found a job here and we were granted asylee status by the United States government. And about one week ago me and my wife passed neutralization exam. So in the very near future we will become citizens of the United States.
Simone Gao: Congratulations Chao.

Chao Yu: Thank you. And it means a lot to us. And my son is now in the basic combat training camp of US army in South Carolina Fort Jackson, and in the meanwhile he got an admission offer from Whiting School of Johns Hopkins University, major in data science master degree. He graduated from his university six months in advance. And I always telling him that the United States accept us, protect us. So it is our duty and our honour to defend the United States of America. So I encouraged him to use these six months to serve a military. So he is enlisted in US army.

Simone Gao: Okay. All right. Thank you so much Chao. And I’m so glad that you and your family are in the states and you are safe and free. And congratulations to your son. Thank you so much. 

Chao Yu: Thank you.

Simone Gao: This concludes our program for today. Please like, share and subscribe to my channel. And mostly importantly, please sign up for my membership website Zoomingin.tv. You will have access to all video, audio formats of my show and all transcripts from now on. We will also have full length in-depth reports, extra interview clips, and behind the scene clips for our members. I will also do a monthly Q and A on the membership website. The site was just up yesterday and has my full length exclusive interview with a Republican national committee man, Solomon Yue, who supposedly has the information about the Chinese defector vice minister of national security of China daunting way. So please check it out. Thanks for watching, I’m Simone Gao, and I’ll see you next time.