Thursday, May 31, 2018
Five things for you at the top today, with the rest of the links below.
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—Jeremy Goldkorn, Editor-in-Chief
1. Yili’s Chairman Pan: A Chinese business story
Yili is one of China’s big two dairy firms along with Mengniu. Both companies are based in Inner Mongolia, although the former is state-controlled while Mengniu was founded in 1999 by a former Yili employee. Mengniu and Yili both escaped China’s 2008 melamine milk scandal more or less unscathed, but I believe the Chinese public remains dubious about the domestic dairy industry as a whole. Which is perhaps one reason why this story has legs:
Earlier this month, we noted the story of two Chinese writers who were detained and accused of “defamation and picking quarrels and provoking troubles” (诽谤罪、寻衅滋事罪 fěibàng zuì, xúnxìn zīshì zuì) for online “slurs” about Yili.The writers were accused of circulating a WeChat posting of a “fictional” story about a company very similar to Yili, run by a chairman very similar to Yili boss Pan Gang 潘刚. The dairy boss in the story ends up detained by the police.On March 26, Yili’s share price fell by more than 3.5 percent after the WeChat postings went viral.Yili’s response at the time was to state that Pan had been out of the public eye and in the U.S. receiving medical treatment, but that he continued to participate in regular decision making and important meetings while abroad.Today, Yili’s shares jumped by 10 percent “after video footage showing the company’s chairman and CEO Pan Gang attending its annual shareholder meeting in his first high-profile public appearance recently, squashing rumors that the chairman had been taken away for investigation,” according to the South China Morning Post.
“Some argued that this incident has exposed a weak point in China’s non-comprehensive information disclosure system, as there are no clear rules on what information a listed company should reveal to shareholders,” says the South China Morning Post.
However, not even the most stringent disclosure rules could change the fact that successful Chinese businesspeople regularly disappear in mysterious circumstances. Sometimes they resurface, sometimes they are convicted of crimes, and sometimes they never appear in public again. Below are a few recent cases:
DISAPPEARED: Xiao Jianhua 肖建华 of Tomorrow Group was seized by mainland agents at his luxury Hong Kong apartment in January last year. There has been no official announcement about his status, but yesterday, two sources told the South China Morning Post that Xiao will be out on trial in the second half of the year, and that the trial was delayed “as his former flagship company struggles to dispose of assets.”CONVICTED: Wu Xiaohui 吴小晖 of Anbang. Wu was sentenced to 18 years in prison after being convicted of fundraising fraud and embezzlement earlier this month.UNDER INVESTIGATION: Ye Jianming 叶简明 of CEFC China Energy. Ye was detained without public announcement in February, but the company has acknowledged that Ye is being investigated by Chinese authorities for suspected economic crimes.DISAPPEARED FOR A TIME: Guo Guangchang 郭广昌 of Fosun Group vanished for a few days in 2015 and was rumored to have been detained. Then Fosun released a statementsaying that "after making enquiries, the company understands that Mr. Guo [Guangchang] is currently assisting in certain investigations carried out by mainland judiciary authorities." Guo soon returned to lead the company, but the public and his company’s shareholders have no idea what really happened.
2. And then they came for the Vagina Monologues
This year at Fudan University in Shanghai, there will not be any students talking loudly about female genitalia. Zhihe Society 知和社, an on-campus student organization committed to addressing gender issues, was forced to cancel its annual performance of the feminist play The Vagina Monologues (阴道独白 yīndào dúbái), which was set to take place on May 31.
Written by American playwright and activist Eve Ensler in 1994, The Vagina Monologuesis a celebration of women’s rights, bodies, and sexual experiences. In 2004, students at Fudan University — one of China’s most prestigious schools — performed the Chinese version of The Vagina Monologuesfor the first time on a Chinese campus. In subsequent years, the student group adapted the original play for the contemporary Chinese context, and the annual production has evolved into a well-received cultural event among college students in Shanghai.
But not this year. The Fudan authorities clearly do not think talking about vaginas is part of the great rejuvenation of the Chinese nation. Please click through to SupChina for more on this case.
3. Is Google’s sneak back into China working?
In December 2017, we reported that “Google had ‘tiptoed’ back into China,” as the internet giant took a new tack and opened a small artificial intelligence (AI) research center in Beijing. Of course, Google never really left China: Google ad sales teams have worked in the country nonstop since 2010, when the company withdrew its search feature from the market.
Today brings news of Google’s next move in the Chinese market: a Chinese version of Files Go (文件极客 wénjiàn jíkè; literally “file geek”), an Android app that helps users organize their files. TechCrunch reportsthat Google is “working with Tencent, Huawei, Xiaomi and Baidu, each of which will stock the app in their independent app stores,” indicating the extent to which Google seems to be winning favor with Chinese industry and government leaders.
In the past year, Google has steadily increased its presence in China quite a bit:
Google Translate has become a top reference app in the Chinese App Store for iPhones, beating out even local competitor Baidu Translate, Abacus reports.Google Translate got “nearly 1.8 million” downloads in China in the past quarter, twice that of a year ago when it was reintroduced to the market, according to U.S. research firm Sensor Tower.Snapseed, a photo editor from Google, also “reportedly had around 1.68 million App Store downloads in China last quarter,” Abacus says.Google’s augmented and virtual reality technologies were enabled on Xiaomi smartphone devices just this week, the company announced on Twitter, teasing that there are “more partners coming soon.”And Google has made strategic investments this year in U.S.-China biotech startup XtalPi and game-streaming platform Chushou, TechCrunch reports.
4. When the cops really need a drink
A few cops in Hunan were apparently rather slow to get Xi Jinping’s anti-corruption campaign memo. The People’s Daily reports (in Chinese) that in June 2016, police officers of the Public Security Bureau (PSB) of the impoverished Anhua County in Hunan Province “drove police cars to Maotai, Guizhou, and and illegally purchased 600 bottles of liquor.”
The town of Maotai is about 450 miles away from Anhua. Maotai liquor is China’s most famous homegrown spirit, best known abroad for the Richard Nixon and Zhou Enlai 周恩来 toast of 1972 — see the toast on YouTube. It costs around 1,200 yuan ($190) a bottle for the standard variety (see Xinhua’s January update on Maotai prices — in Chinese).
By January 2017, the Anhua cops’ entire batch of Maotai had been consumed over the course of 112 dinner receptions.
Today, the Anhua County PSB announced that the five cadres responsible for the decadent behavior have been dealt with, and that the PSB office has “reflected deeply, and resolutely accepts the disciplinary inspection and the handling of the five cadres by the supervisory organs, and sincerely accepts supervision from the people and the media."
5. Director stubbornly defends the ‘worst film on earth’
Director Bi Zhifei 毕志飞, 39 years old, needs you to know that by no means is he getting over his debut film, Pure Hearts: Into Chinese Showbiz 纯洁心灵, which was a failure, both critically and commercially. You can see nearly 50,000 negative reviews of the film on Douban.com (in Chinese), one of China's biggest and most trusted movie review and culture websites.
The reviews on global movie rating site IMDB.com are no better: “Beyond description awful,” “Awkwardly amateur and terrible,” and “The worst film on earth” are the top three comments.
Unlike most filmmakers who opt to disappear from the spotlight, at least momentarily, after a box office wipeout, Bi has been unremittingly waging feuds with movie critics and internet users. On May 30, almost nine months after Pure Heart’s premiere, Bi posted to his Weibo account an open letter (in Chinese) to China’s top movie regulator.
He accuses Douban of manipulating public opinion about his film with a biased rating system, and demands a thorough investigation into “a Douban-led gang of movie review websites and critics” that has become “a malignant tumor in the Chinese film industry.”
A MESSAGE FROM HAVENLY
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Viral on Weibo: A 50-meter-tall vertical parking lot in China
In Taiyuan, Shanxi Province, drivers can easily park their vehicles inside a 50-meter-tall vertical parking lot without making any effort to find a parking spot.
TODAY ON SUPCHINA
SupChina Quiz: Mao's China, 1949–1976
It’s the last Thursday of the month, which means it’s SupChina Quiz time! This month: 12 questions to test how much you know about the people and events that rocked the Mao era. Let us know how you did — tweet your score to @supchinanews.
Sinica Podcast: Janet Yang — a Chinese-American woman in a Harvey Weinstein world
Janet Yang produced The Joy Luck Club, The People vs. Larry Flynt, and many other films, and is a key player in the evolving relationship between Hollywood and China. In this episode, Janet talks to Jeremy and Kaiser about Chinese film, her experiences as an Asian-American woman in Hollywood, and her current projects.
Why did ‘Solo: A Star Wars Story’ flop at the Chinese box office?
Solo: A Star Wars Story was a domestic box office flop, and it hasn’t done much better in the world's second-largest film market. Last weekend, the Han Solo spin-off grossed only $9.6 million in China, putting it on pace to earn $19 million total, which would be the franchise’s lowest-performing installment in China yet.
BUSINESS AND TECH:
Healthcare: Checkup clinics
Meinian Onehealth plans to open 200 more medical examination centres in China this year, and expand in Hong Kong / SCMP
“Meinian Onehealth Healthcare Holdings, China’s largest medical examination centre operator, plans to open another 200 more centres in the country this year.”Australia’s worsening ties with China
China snubbed Australian minister during visit, says diplomat / Reuters via SCMP
“China rejected a request for a senior meeting during a recent visit by Australia’s trade minister, a high-ranking diplomat said on Thursday, as relations between the two major trading partners fray.”U.S.-China tech wars: Hikvision
Chinese surveillance camera giant faces potential sales ban to U.S. government / Abacus
“Hikvision is the second biggest vendor of surveillance products in the U.S.… The company is now crying foul, after the US House of Representatives passed a bill banning the federal government from buying equipment from Hikvision and several other Chinese companies, citing national security concerns.U.S.-China trade war update
China cuts tariffs ahead of U.S. commerce secretary’s visit to Beijing / New York Times (paywall)
“The tariff cuts came less than two days before Commerce Secretary Wilbur Ross is due in Beijing for wide-ranging talks aimed at addressing American frustrations with China’s $375 billion bilateral trade surplus with the United States. But the categories the Chinese Finance Ministry selected for tariff cuts cover few American goods, and appeared to be targeted at China’s goal of developing sophisticated industries rather than low-value mass manufacturing.”
U.S. will push China to let its firms hold majority stakes in companies, says Trump economic adviser Larry Kudlow / SCMP
“The Trump administration has accused Beijing of using restrictions on ownership and technology licensing, which prevent foreign companies holding a majority stake, to force U.S. investors to transfer their most sophisticated technology to their Chinese joint venture partners.”
As Trump talks of trade losses, Chinais a win for U.S. East Coast ports / Reuters
“For America’s fastest growing East Coast ports, trade with China equals billions of dollars of investment and thousands of well-paid jobs in the heart of Trump country.”On-demand accommodation wars
Airbnb goes it alone in the battle over China / Bloomberg
“Rather than take a page from Uber, which agreed to cede China to rival Didi in exchange for an equity stake, Airbnb Chief Executive Officer Brian Chesky had a change of heart and decided to forge ahead in China alone.”The military-ecommerce complex
JD deepens relationship with China’s military with first unmanned supermarket for PLA’s Academy of Armored Forces / TechNode
“This is not JD’s first move in China’s “military and civil integration (军民融合)” blueprint… The company has actively participated in projects including a contract signed with PLA’s air forces’ logistic unit.”AI: Voice and facial recognition
SenseTime raises $620 million in Series C+ / TechNode
“With the fresh capital injection, SenseTime now has a valuation of $4.5 billion. So far, SenseTime has received a total financing of more than $1.6 billion.”
Huawei joins forces with iFlytek for consumer voice recognition / TechNode
“iFlytek, a leading Chinese voice recognition technology company and Huawei, China’s hope for the 5G age, have signed a cooperation agreement in Shenzhen.”Why do Chinese teens go online?
Homework, not games, the reason why China’s teens go online, games publisher Tencent study finds / SCMP
“Homework, not gaming, was the top reason cited by teenage respondents for going online, according to a study by Tencent Holdings, which is facing public scrutiny over its role in policing gaming addiction among youths” (emphasis added). Color us unconvinced.Tencent Music and Entertainment IPO
Tencent hires banks to list music unit in New York / FT (paywall)
Tencent Music and Entertainment is set for “a highly anticipated initial public offering that bankers expect will value the Chinese streaming group in excess of $30bn… The company is aiming to list in New York, having spurned Hong Kong as the stock exchange’s recent acceptance of dual-class shares only applied to founders, not institutions.” Other companies, including Xiaomi and Didi, have recently heeded the Chinese government’s call to list in Hong Kong instead of abroad.Alibaba’s bricks-and-mortar store that knows what you want
We saw the future of consumption at Alibaba’s new retail megastore in Beijing / TechNode
“The motion-sensor-powered main window display at the store entrance can identify gender and approximate age of a passerby and recommend products based on Alibaba’s mature algorithms.”Internet trends
The trends driving Chinese tech: Highlights from Mary Meeker’s 2018 internet trends report/ TechNode
A good summary of the annual report from Mary Meeker, one of the most respected analysts of the internet. If you want an even shorter summary, here are the highlights chosen by TechNode:Development of artificial intelligence.Technology is driving domestic consumption.Mobile payments dominate.Video services have begun dominating the entertainment sector.China loves social gaming.
Bloomberg has picked up on another theme from Meeker’s presentation: “a sharp uptick in time spent watching short-form videos — those under five minutes — seemingly at the expense of long-form and well ahead of live and game streaming.”Agriculture innovation
Coming to a plate near you soon? Rice grown by Chinese scientists using seawater in Dubai’s deserts / SCMP
“A team of scientists, led by China’s ‘father of hybrid rice’ Yuan Longping, has already started growing the crop in diluted sea-water at home and is now bringing the technique to the Middle East.”Fintech and blockchain
Dianrong to land on distributed ledger Corda / TechNode
Dianrong, one of the leading Chinese online peer-to-peer (P2P) lending services, has announced cooperation with R3, “a global platform specializing in distributed data technology.”
POLITICS AND CURRENT AFFAIRS:
Siberian forests and their destruction
China’s green Belt and Road tested at the Russian border / ChinaDialogue
“Facing growing demand for wood and shortages in domestic supply, Chinese authorities are pushing for greater imports from Russia, ignoring the fact that its neighbor will cease to be a reliable supplier within a decade… Nowadays, mature forests in Russia are scarce.”Dissent in Hong Kong
Bust of Chinese dissident Liu Xiaobo erected outside Hong Kong’s Times Square in bid to build support for June 4 vigil / SCMP
“A group of activists erected a bust of the late Liu Xiaobo 刘晓波, a Chinese pro-democracy icon, at a shopping district popular among mainlanders on Thursday. On June 4 every year since 1990, a candlelight vigil is held in the city’s Victoria Park to mark the anniversary of the bloody anti-government crackdown in 1989 in Beijing.”U.S. student restrictions: No big deal?
Some quick notes on news re: Tightened U.S. visas for Chinese students / Te-Ping Chen on Twitter
As we noted yesterday, the Trump administration plans to shorten the length of validity for some student visas issued to Chinese citizens, as part of a campaign to stop alleged theft of U.S. intellectual property. Te-Ping Chen, Beijing correspondent for the Wall Street Journal, tweeted that she had talked to more than half a dozen students and education companies in China: “None think it's a big deal.” Essentially, the application process will not be much more onerous than it has been in the past, and the Ph.D. students Chen talked to “in engineering, AI etc. strongly reiterated the U.S. remains the best choice for their fields and will draw top talent, regardless of additional visa hassles.”Real cement for U.S.-Taiwan relations
U.S. gives its ties with Taiwan a $250 million upgrade / New York Times (paywall)
The American Institute in Taiwan will “hold a ceremony to formally unveil a $250 million office complex that resembles a university research center, just with guarded gates and blast walls.”
SOCIETY AND CULTURE:
A more beautiful life? TV show gets Chinese talking about plastic surgery / SCMP
China “accounted for 13 percent of cosmetic surgery worldwide in 2016, making it the third biggest for number of procedures, according to the International Society of Aesthetic Plastic Surgery.”Chinese cinema in New York
Your ultimate guide to Chinese film screenings for June in NYC / China Film Insider
A comprehensive list of Chinese film screenings in New York in June.The harsh realities of rural life
The true story of the mother who ‘let her daughter die’ / Inkstone
When Yang Meiqin’s 杨美琴 youngest daughter was diagnosed with retinoblastoma, a rare form of malignant eye cancer, she launched a crowdfunding campaign to pay for treatment. Online controversy about her use of the funds provides insight into Chinese society’s double standards for rural communities and women.Bringing Chinese food to America
How a quest for soy sauce created a multimillion-dollar online business in the U.S. / Inkstone
“When Alex Zhou first moved from the Chinese port city of Dalian to study at Kansas State University, he never imagined that getting his hands on soy sauce would entail a two-hour drive…” Zhou started Yamibuy five years ago to solve this problem. The company now “has more than 800,000 users and sees ‘double-digit growth’ every year,” with $100 million in transactions processed in 2017.
PHOTO OF THE DAY
Everyone is a princess
Two little girls pose for a photo shoot in China. Photo by Kelly Dawson.