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Drug dispute reveals broad divide
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Hi, this is Colum Murphy in Beijing, where Chinese officials are throwing a few sharp elbows in their running rivalry with the US.

China and the US are at odds over a lot of topics, many of them starting with the letter “T,” conveniently. Trade and tariffs, of course. Then there’s Taiwan and tech.

Mixing things up alphabetically, at least, the dispute is now focused on fentanyl.

Put simply, the US says China isn’t doing enough to stem the flow of chemicals used to make the opiate, contributing to a deadly crisis. China counters that it has done what Washington asked and the US should clean up its own act.

China’s top foreign affairs official, Wang Yi, recently used an annual briefing at the nation’s annual legislative meeting to take aim at the US with some fairly testy language.

Wang defended his nation’s work on fentanyl control, saying the US shouldn’t “return good with evil” by levying tariffs over the issue. “Such two-faced acts are not good for the stability of bilateral relations,” he said.

And Commerce Minister Wang Wentao said the issue was just a “pretext” to impose tariffs, highlighting Beijing’s view that Washington is only out to contain its rise. “China’s tradition is to respect in return for respect, and respond in the same way if the other side acts disrespectfully,” he said.

Summing up the very different way the two sides see things, a Chinese official said at a briefing this week that the US should just give a “big thank you” to Beijing for all it has done stemming the flow of the drug. Read our story about that line here.

That remark might remind some of when President Donald Trump met with Ukraine’s Volodymyr Zelenskiy in that big Oval Office contretemps last month and told Zelenskiy he should be more thankful for American backing in the war against Russia.

Donald Trump and Xi Jinping in 2017. Trump has said he wants more talks with Xi. Photographer: Fred Dufour/AFP

Given how officials from the two sides appear to be talking past each other, discussions between them on trade and other issues seem to be stuck at lower levels. Read about the impasse here.

While there have been higher-level discussions, Beijing complains it has a tough time even figuring out what it needs to do to please Trump. The US side rejects that, pointing to messages the White House has delivered through diplomats in Washington, including Ambassador Xie Feng.

Those asks have apparently included China blocking shipments to Mexico of fentanyl precursor chemicals.

The Trump team also wants smugglers to get the death penalty and for the People’s Daily newspaper to run a front-page article condemning the fentanyl trade – moves that would send a clear message to the Asian nation’s drug industry that it needs to be much more careful about things like knowing their customers.

The picture we’re getting on the fentanyl issue is that both sides are entrenched in their positions and see very little reason to give ground.

That’s a grim sign not only for what happens next month when the US unveils its review of the trade deal reached in Trump’s first term, but for ties over the next few years.

What We’re Reading, Listening to and Watching:

Struggle on the Seas

Mauritius is an unlikely epicenter for geopolitical competition with huge stakes. Known mainly for its pretty beaches and friendly tax regime, the tropical island nation finds itself at the center of a great power chess match between China, India and the US.

For decades, China has used its economic might to develop influence in the nation, building a dam, sports complex and cruise-ship terminal. It’s done so in large part because Mauritius sits along the crucial trade routes that facilitate the flow of goods and energy between Europe, the Middle East, Africa and Asia. 

Beijing’s inroads worry India, the traditional partner of choice for Mauritius, and the US. New Delhi has responded with its own flurry of spending on a new metro line, a Supreme Court building and a hospital. Read about the growing rivalry here, and here’s a recorded Q&A with more details.

A Chinese-built sports complex in Mauritius.  Photographer: Paul Choy/Bloomberg

Washington has spent too, building a $300 million mega embassy and working to secure future access to a military base on the island of Diego Garcia, in the Chagos islands. 

That’s a British territory that the UK has pledged to cede to Mauritius to comply with an international court ruling. The base on Diego Garcia is crucial for the US military, allowing it to operate from the Middle East to Asia — and counter a growing Chinese presence in the region.

A similar tussle is playing out all across the Indian Ocean region, which touches on land home to nearly 3 billion people and 40% of the world’s offshore petroleum. From Madagascar to Djibouti and Sri Lanka to Cambodia, China’s advances have put Delhi on the back foot in its own back yard.

Beijing regularly deploys destroyers, frigates and at least one submarine to conduct anti-piracy missions off Somalia. In the last year alone, it has also penned a security pact with the Maldives and helped Pakistan launch stealth submarines.

Beijing’s attention has opened up opportunities for small nations like Mauritius that might once have been overlooked. Just this week, Indian Prime Minister Narendra Modi visited the country to reinforce New Delhi’s commitment to the nation.

All the attention – and financial backing – can be beneficial for Mauritius and its population of 1.26 million people. Dhananjay Ramful, the foreign minister, said in an interview that “everything is playing to the advantage of Mauritius.”

Yet there’s risks to having big countries struggling for sway all around. There’s no obvious flashpoint comparable in the region to Taiwan or the South China Sea in the Pacific, yet Indian officials have expressed alarm over the steady increase of China’s naval presence in the waters. For its part, China says all nations enjoy freedom of navigation in the Indian Ocean.

The contest among big powers for influence in the region will only increase in the coming years. For Mauritius and other small nations, that’ll require maintaining their delicate balancing act to make sure they benefit without running afoul of a heavyweight.

Little Furry Things

2-1

That’s roughly by how much pets will outnumber toddlers in China by 2030, says Goldman Sachs. While the nation's birth rate has been falling off, people have been turning to 

little furry things to keep them company. That change has prompted formula and baby food producers to shift to pet products.

Behind the Great Firewall

A weekly look at the big water cooler news in China.

Rank-and-file workers around China let out a cheer this week when a handful of the biggest-name companies indicated they’d ease off on the nation’s harsh work culture.

One of them, appliance giant Midea, said it is “prohibiting meetings after work and formalistic overtime.” The latter bit is a reference to people putting in OT mostly because the boss is still in the office and comes after Australia said that workers could legally ignore work calls and emails after hours.

Drone maker DJI has reportedly started shooing employees out of the office at 9 p.m. While that seems to leave the 996 culture – working 9 a.m. to 9 p.m. six days a week – pretty much intact, people welcomed the boundary-setting anyway.

“This kind of change is still worth a thumbs-up,” one person posted on the Weibo social media site. “Workers need to rest.”

The 996 phenomenon has worked well for China’s companies and workers through the years as the nation moved up the value chain and got richer. Companies like DJI are world beaters and the people badging in have much better homes and, well everything, than they did in years past.

The thing is, working like a dog gets old after a while, no? Burnout is prompting some young professionals to split the big city for a quieter life in smaller towns. Some in China’s younger generations even advocate slacking off.

What tuning out isn’t great for, though, is reviving consumer sentiment, which China’s leadership signaled at a recent major political meeting they see as key to turning the economy around.

China’s tough work environment is also a problem for companies. A buzzword in economic circles is neijuan, or “involution,” meaning a state of pointless overwork due to the cutthroat competition firms face.

Competition is great, pushing companies to make better products and provide better services. But taken too far, and it grinds profits down to nearly nothing, while driving good businesses out of the game and putting people out of work.

Xi himself took aim at neijuan during the annual legislative meeting, telling delegates from the manufacturing powerhouse of Jiangsu province that they should “eliminate rat race-style competition.”

This attention from on high to hyper competitiveness and overwork of employees is probably why some of China’s biggest companies are beginning to address the issues. Whether firms learn to work smarter — not harder -- is an open question, though workers are making clear they’re down to learn.

“If we all chill out, it could actually increase employment and boost consumption,” went one comment on Weibo.

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