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Google invests half a billion in Chinese ecommerce


Announcements for Access members:

  • If you’re in New York, come to our live Sinica Podcast recording tomorrow all about Chinese hacking. Details here.

—Jeremy Goldkorn and team


1. JD.com: Google puts $550 million into China’s No. 2 ecommerce player

Google’s sneak back into China, which has been going on for months, lurched forward today with a remarkably large deal. The New York Times reports (paywall):

Google will invest $550 million in the Chinese online retailer JD.com, the two companies said on Monday. In return, JD.com will join the Google Shopping advertising platform, and will work with the Silicon Valley company on other e-commerce projects in Europe, Southeast Asia and the United States.

The Silicon Valley giant never truly left China after the 2010 pullout of its search function from the country, but substantial activity beyond ad sales didn’t pick up until December last year, when Google opened an AI research center in Beijing. The Times surmises that in the event Google is indeed seeking to bring back some form of its major products to China, the “half a billion dollars’ worth of good will” from the JD.com deal “couldn’t hurt.”

—Lucas Niewenhuis

2. Trade war update: The $50 billion fallout

The U.S. finally imposed its much-anticipated tariffs on $50 billion in Chinese goods on June 15. China retaliated in kind (here are lists — in Chinese — of U.S. goods China will tax: 1, 2). CNBC reports that the markets were not happy: The Dow Jones dropped 157 points on June 18, and stocks of the “bellwether” companies, Caterpillar and Boeing, each dropped 0.8 percent. But, Reuters reports, investors are developing an “immunity” to the fiery trade war rhetoric, and increasingly treating the tariffs the way Trump does — as “a first foray and negotiating tool.”

  • Meanwhile, the fiery rhetoric continues, with China issuing some of its starkest condemnations of the Trump administration yet.

  • “Rude and unreasonable, selfish and headstrong” (蛮横无理、自私任性 mánhèngwúlǐ, zìsī rènxìng) is how the Chinese government now sees its American counterpart, according to a People’s Daily editorial (in Chinese).

  • “The wise build bridges, and the fools build walls” (智者筑桥,愚者筑墙 zhìzhě zhù qiáo, yúzhě zhù qiáng), Xinhua declared (in Chinese) in a commentary.

  • China’s new tariffs “hit Trump heartland where it hurts — in American agriculture and energy” is how the SCMP reheadlined an article from Bloomberg (paywall) that pointed out, “As recently as May, Beijing said it would seek to buy more U.S. agricultural and energy products as part of a tentative trade truce between the two countries.”

  • Oil in particular was rattled by the retaliation, with share prices for ExxonMobil and Chevron down “by 1 to 2 percent since Friday,” while U.S. crude oil prices have fallen by “around 5 percent,” Reuters reports. “The potential drop-off in American oil exports to China would benefit other producers, especially from OPEC and Russia,” the newswire notes.

  • Soybean futures, meanwhile, dropped to their lowest level since March 2016, according to (paywall) the Financial Times.

  • If you’re a business owner caught in the middle of all this, the China Law Blog has published a guide on how to apply for tariff exemptions in the U.S.

But the overall economic effect of the tariffs on China remains limited. The New York Times reports (paywall) that “China’s exports could grow in other areas to offset any drop. Its exports to the United States are already increasing by more than $50 billion each year, and more than 90 percent of China’s exports to the United States are not covered by the tariffs” — at least so far.

More trade war twists:

—Lucas Niewenhuis

3. Wine, 5G, and Australia’s complicated relationship with China

The once-happy trading relationship of Australia and China continues to deteriorate. See, for example: ‘Beijing is livid’ over ‘racist’ criticism from Australia, The growing Australian backlash against Chinese influence, and Tensions with China simmer Down Under.

Today’s news brings no respite:

  • Australian wine imports have been delayed at Chinese ports due to new “verification” requirements, according to the South China Morning Post. Such non-tariff hindrances, often not even announced formally, are a common tactic of the Chinese government to  shape both political and economic behavior of other countries.

  • The delay is widely considered to be linked to Beijing and Canberra’s souring relations. The two countries have clashed over what Beijing calls “politically motivated” attacks on ethnic Chinese in Australia, as well as Australian concerns over Chinese influence operations and encroachment.

  • Another source of discontent in China is the belief that “the Oz gov’t can’t in some way quell critical stories” about China in its own media, according to Australian Broadcasting Corporation correspondent Bill Birtles.

  • Huawei issued a statement criticizing Australia’s expected ban on the company’s participation in bidding for Australia’s 5G mobile phone network due to national security concerns, the Sydney Morning Herald reports. According to the statement, “[Huawei is] a private company, owned by our employees with no other shareholders. In each of the 170 countries where we operate, we abide by the national laws and guidelines. To do otherwise would end our business overnight.”

  • Huawei also began appealing to MPs based on the company’s ability to bring consumers considerably lower prices, saying, “Increased competition not only means cheaper prices but most importantly better access to the latest technologies and innovation.”

—Lucy Best

4. 1.9 million user accounts hacked at 51Job.com  

Private data of more than 1.9 million users of 51Job.com, one of the largest recruitment platforms in China, were reportedly found for sale on the dark web, according to (in Chinese) The Paper.

Judging from sample information provided by the hackers, the breach gave hackers access to usernames, passwords, email addresses, real names, and identity card numbers. The whole package of data from 1.95 million users could be purchased for 12 bitcoin (around $80,600 at today’s rates).

On June 15, 51Job.com confirmed the leak, but said that its database had not been hacked but rather that the hackers stole the information from other sources and then “tested” them on its platform — click through to SupChina for more on 51Job’s explanation.

—Jiayun Feng

5. Belt and Road propaganda gets the John Oliver twist

As far as mainstream American parodies of the Chinese government go, this one is pretty good: HBO’s John Oliver devoted 20 minutes on the most recent episode of Last Week Tonight to skewering the ham-fisted attempts of Chinese state media to promote the Belt and Road, Xi Jinping’s notorious aversion to being compared with Winnie the Pooh, and more.

Meanwhile, another popular American comedy show is making its way to China this week: SNL China will launch on June 23, Radii China reports, with two male comedians, Chen He 陈赫 and Yue Yunpeng 岳云鹏, as hosts. The show, which is produced by NBC Universal and Youku, is expected to stick to mainstream formats and, of course, avoid any of the irreverent caricatures of political figures that its American original is known for.

—Lucas Niewenhuis

6. ‘All I want is for China to be a normal country.’

Ian Johnson, author of The Souls of China: The Return of Religion After Mao and a Sinica Podcast guest, interviewed Tsinghua University professor Guo Yuhua 郭于华, “one of China’s best-known sociologists and most incisive government critics.” Guo discusses the growing difficulties liberal intellectuals face when speaking out in Xi’s China, and her notion that “the entire structure of Chinese society consists of political and revolutionary rituals replacing original folk rituals.”

Read the whole thing, ‘Ruling through ritual’: An interview with Guo Yuhua, in the New York Review of Books.

—Jeremy Goldkorn

—–

Our whole team really appreciates your support as Access members. Please chat with us on our Slack channel or contact me anytime at jeremy@supchina.com.

—Jeremy Goldkorn, Editor-in-Chief


BUSINESS AND TECHNOLOGY:

POLITICS AND CURRENT AFFAIRS:

SOCIETY AND CULTURE:

  • FIFA scam hits China
    Thousands of fans from soccer-mad China victims of FIFA World Cup scam / SCMP
    “More than 3,500 of the more than 10,000 counterfeit 2018 World Cup tickets available globally have been sold to Chinese soccer fans, according to Chinese media.”

  • New dating standards
    What young, educated Chinese women want in a man today: A clingy “little puppy” / Quartz
    “In China, ‘little puppy,’ or 小奶狗 (xiǎo nǎigǒu), refers to a man who is younger than his girlfriend, whose qualities in the eyes of his lover include being simple, naive, considerate, and caring — and most importantly, loyal and clingy, just like a pet.”

  • How rural Yunnan sees China’s rise and the trade war
    Tea and tariffs in rural Yunnan / New Republic
    “‘Your president is not good,’ said a man in a cockeyed Mao cap. ‘Why does he want to hurt us common folk?’”

  • Cultural hazards
    Why are people still dying in China’s dragon boat races? / Sixth Tone
    “Dragon boats are slender vessels that are difficult to turn and capsize easily… Although they are all good swimmers, swimming skills alone are sometimes not enough to save one from drowning.”

  • Child marriage
    Sold to China: Vietnam’s 6,000 child brides / Inkstone
    “Official statistics from Vietnam’s Department of General Police show that between 2011 and 2017, there were 2,700 reported cases of human trafficking, involving nearly 6,000 victims mainly from poor families in rural areas, with little access to education or economic opportunities.”

  • Discrimination at top Chinese universities
    Our own Harvards discriminate too, say Chinese social media users / Inkstone
    In mainland China, high school graduates take the national college entrance exam, called the gaokao. It is the sole criterion for college admission. But that doesn’t mean it’s necessarily fair, according to commenters.


VIDEO OF THE DAY

Click HereAll the different zongzi one can eat during the Dragon Boat Festival

Today is Duanwujie 端午节 — the fifth day of the fifth month on the lunar calendar — known to English speakers as the holiday called the Dragon Boat Festival. It’s a day for racing dragon boats and eating zongzi — glutinous rice cakes — which these days come in all shapes and sizes, colors and textures. Take a look for yourself.


ON SUPCHINA

Inside the Chinese censorship rabbit hole

On Chinese social media, Xi Jinping, ejaculation jokes, and the Relevant Organs parody Twitter account are among the subjects that are no-gos. But what occasionally does get past the censors might surprise you.

Kuora: Mao Zedong and the archetype of the ruthless Chinese uniter

Mao Zedong takes his place in Chinese history as a ruthless uniter, alongside characters like Ying Zheng 嬴政 — better known as Qin Shi Huang 秦始皇, the first emperor of the Qin dynasty — and Cao Cao 曹操, the ruler of Wei during the Three Kingdoms period that followed the collapse of the Han Dynasty. All three are viewed generally with the same mixture of admiration and contempt.

‘Jurassic World: Fallen Kingdom’ resuscitates China’s box office

Jurassic World: Fallen Kingdom raked in a healthy $117 million in China in its opening weekend, rescuing an otherwise tepid week for the country’s box office. Analysts have pointed out that in the last few years, the Dragon Boat Festival holiday has been dominated by Hollywood blockbusters, with domestic productions having a hard time battling imported films.

The Caixin-Sinica Business Brief, episode 52

This week on the Caixin-Sinica Business Brief: Additional duty imposed on Chinese imports by the Trump administration, China’s economic growth in May, Didi Chuxing’s new policy of “same-sex rides,” Doug Young on the evolving story of ZTE, and more.


PHOTO FROM MICHAEL YAMASHITA

Transporting cardboard

A man rides a bike loaded with cardboard in Beijing in 2017.

Jia Guo

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Jeremy Goldkorn

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of SupChina, and co-founder of the Sinica Podcast.