China’s social credit systems kick into gear
China’s planned “social credit system” has been discussed in the media for several years, but it’s now starting to be implemented. It is more accurate to describe the system in the plural, because there are a number of different processes being rolled out for evaluating the financial creditworthiness and civic responsibility of Chinese people. In an article titled “FICO with Chinese characteristics: Nice rewards, but punishing penalties,” CNBC reports on a variety of attempts to implement such systems. These include Sesame Credit (a rating service from Alibaba affiliate Ant Financial), a trial program in Jiangsu Province that uses tax and criminal records to assign social credit scores, and a ban on air travel issued by the Supreme People’s Court for 6.15 million people who had defaulted on court orders. Meanwhile, bike share startup Ofo announced that riders in Shanghai who have good Sesame Credit scores will not need to pay a deposit to rent their bikes. For more on Chinese bike sharing, see this SupChina article: Bike sharing done right: A real Chinese innovation.
Murder in the Lucky Holiday Hotel
Today the BBC released the final episode of its five part podcast by Carrie Gracie on the murder of Englishman Neil Heywood in the city of Chongqing. The story is told like a thriller and includes juicy details about Heywood and his killer Gu Kailai. Gu was found guilty of poisoning Heywood by a Chinese court in 2012 and sentenced to life imprisonment. She is the wife of Bo Xilai, whom many observers saw as the only real rival of Xi Jinping for China’s top leadership positions. Bo was expelled from the Party in 2012 and sentenced to life imprisonment on corruption charges in 2013. You can find all five episodes of the podcast here, and a related article with plenty of photos here.
Women and China: A SupChina-sponsored forum
We’re organizing a conference on May 18 in New York with female speakers who are movers and shakers in technology, business, and journalism in China. Please click here to book tickets.
KMT discovers $1.25 billion in U.S. gold bonds
The China Post reports that Taiwan’s opposition Kuomintang (KMT) party has discovered U.S. gold bonds currently valued at US$1.25 billion “among its party assets.” A party spokesperson said that the unredeemed bonds were issued in 1947 and are payable to the Republic of China government. The bonds are “evidence that the party had contributed to helping the country through hard times,” and the KMT says it has “not requested that the state pay off the debt immediately.” The KMT first took control of Taiwan in 1945 after the surrender of Japan at the end of World War II; the whole party fled to Taiwan in 1949 and has ruled the island for most of the time since then.
Central and local budgets
Following the end of the Two Sessions, Xinhua News Agency has published a report on the implementation of the 2016 plan for economic and social development and a draft plan for 2017 (English, Chinese). A report on “the execution of the central and local budgets for 2016 and on the central and local draft budgets for 2017” is also available (English, Chinese).
Silk Road Journey at the Jimmy Carter Presidential Museum
If you’re in or near Atlanta, Georgia from March 20 to 29, you can see Silk Road Journey, an exhibition of photographs by Michael Yamashita, whose images we feature on SupChina every day. The show will run in the lobby of the Jimmy Carter Presidential Museum. You can find details here.
Correction: Yesterday we linked to a story about the Argentinian coast guard sinking a Chinese fishing vessel. The story was from exactly one year ago, not this year.
—Jeremy Goldkorn, Editor in Chief
This week on SupChina:
- Sinica Podcast with Chris Buckley: The China journalist’s China journalist
- How Japan benefited from friendly ties with China
- What really happens at China’s Two Sessions
- China and the Eight Guardian Warriors of American tech
This week’s news roundups are:
- March 13: Trump to host Xi at Mar-a-Lago in April — U.S. media
- March 14: Killing the zombies
- March 15: The case of the missing Politburo member
- March 16: A craft beer bully in China
This issue of the SupChina newsletter was produced by Sky Canaves and Lucas Niewenhuis. More China stories worth your time are curated below, with the most important ones at the top of each section.
BUSINESS AND TECHNOLOGY:
Is broken Dick Clark deal the beginning of the end of China’s Hollywood buying binge? / SCMP
News broke a month ago that Chinese conglomerate Wanda’s bid for Hollywood studio Dick Clark was under pressure, and last week it was confirmed that the deal was off. Wanda is controlled by Wang Jianlin, China’s richest man. His company’s initial proposal to buy Dick Clark came in the early fall of 2016, at the tail end of a remarkable series of overseas investments from China. That flow of money has slowed down as the Chinese government has clamped down on capital outflows, and perceptions grow that Donald Trump’s administration is hostile to foreign investment, particularly from China. Wang had publicly warned the U.S. against protectionism in both December 2016 and January 2017, but now appears to be one of the highest-profile victims of it. Others may soon follow: The South China Morning Post notes that a similarly large bid by Shanghai Film Co. and Huahua Media to buy Paramount Pictures is also running into trouble.
Chinese pharma firms target the global market / The Economist (paywall)
Drug companies in China are quickly learning to innovate, and spending on research and development is set to rise as the government encourages the pharma industry to consolidate. The country’s drug market is expected to grow from $108 billion to $167 billion from 2015 to 2020. And though Chinese companies have had trouble acquiring large foreign pharmaceuticals in the past, Bloomberg reports that Shanghai Pharma may have a good shot at buying Stada, a German drug manufacturer worth billions. Earlier this year, the Chinese Sanpower Group made an $820 million deal to buy a U.S.-based prostate treatment firm.
- China’s Oriental Dreamworks looks set to restructure / Variety
- China’s new bitcoin rules call for identity check / MarketWatch
- China is pretending like it didn’t just raise interest rates / Quartz
- China game developers battle crackdown on content / Financial Times (paywall)
- The mobile internet is over. Baidu goes all in on AI / Bloomberg
- Competing with the Chinese factory of 2017 / MIT Technology Review
- Investing in China – all signs say yes / Seeking Alpha
- Being bullish on China is no longer an outlier view / Financial Times (paywall)
POLITICS AND CURRENT AFFAIRS:
Taiwan plans military spending surge to counter rising China / Bloomberg
Today, a 50 percent increase in defense spending — from about 2 percent to 3 percent of overall economic output — was announced for next year by the administration of President Tsai Ing-wen of Taiwan. The new funding, while significant, does not yet match the 5 percent of GDP that Taiwan spent on its military a few decades ago, and the new efforts are largely focused on newer “asymmetric” technology, including in airpower and drones. The focus on advanced technology may be aided by the U.S., from which Taiwan plans to request stealth fighters, and which The New York Times reports (paywall) is “likely to sell Taiwan a large order of weapons.” Taiwan also confirmed that it has the capability to strike any mainland Chinese military base, including the one furthest from the island, which is 857 miles (1,380 kilometers) away.
China restricts access to foreign children’s books / Financial Times (paywall)
The thousands of foreign children’s books translated yearly into Chinese will soon be reduced to hundreds, in accordance with a new directive from regulators to publishers in China, the Financial Times reports. Initial news of the restrictions appeared in the South China Morning Post last week. We noted then that the massive online marketplace Taobao would no longer be allowed to sell any kind of foreign media publications — even those that are legally distributed by Chinese state-owned firms. Both events are part of an intensifying crackdown on Western ideology in education at all levels.
- Trio to appeal three-year jail sentence each for role in Mong Kok riot – from clashes in February 2016 / SCMP
- Opinion: Donald Trump is no friend of Taiwan / Foreign Policy Research Institute
- China’s premier to visit Australia next week to push trade / Bloomberg
- In Duterte’s Davao, China’s vice premier prioritizes deals over disputes / Reuters
- Xi, Merkel vow to support free trade ahead of German leader’s meeting with Trump / SCMP
- Trump adviser Gary Cohn to sell stake in Chinese bank giant / NYT (paywall)
SOCIETY AND CULTURE:
Beijing’s new ‘smog police’ detain man for causing air pollution for first time / SCMP
In one of the most prominent implementations of a tougher Environmental Protection Law enacted in 2015 so far, Beijing’s air pollution police have detained a staff member of a heating supply company found to be in violation of sulfur dioxide emissions limits. No details were given on the name of the company or the employee, nor the length of the detention. The 2015 law gives the police authority to detain offenders for up to 15 days and impose fines and suspend factory operations.
Missile row drives Korean culture underground in China / Reuters
Millions of Korean culture fans in China are being forced to turn to peer-to-peer networks to share and view their favorite TV shows and other cultural products, as a recent chill in Seoul-Beijing relations has limited mainstream options. Popular video streaming sites are reportedly no longer updating content such as K-dramas and variety shows. The source of the chill is Beijing’s displeasure with the THAAD anti-missile system which deployed in South Korea earlier this month.
- Chinese firms offer pollution solutions with bottled air, hat filters, smog socks / Reuters
- Tai chi encourages calm. So why are its Chinese fans stressing out? / NYT (paywall)
- Jia Zhangke launches Pingyao ‘Crouching Tiger, Hidden Dragon’ international film festival / China Film Insider
- Chinese artist Ai Weiwei unveils huge ‘refugee boat’ in Prague / Asian Correspondent
- Helping China rethink its approach to conservation / Yale Environment 360