Scan your face to pay

Access Archive

Dear Access members,

Today, our top story is a piece of business news about a technology that will affect every person on the planet within a few years: the use of facial recognition as a payment ID. China is going to be the first country where it becomes widespread.

Before the news, five interesting things:

  • A “groundbreaking transgender drama” and “a big step for mainstream cinema in Hong Kong” is what the Hollywood Reporter called the movie Tracey (翠絲 cuìsī). If you’re in Chicago on Wednesday, April 24, you can watch Tracey’s U.S. premiere. You can watch a trailer on Vimeo here.

  • China Families is a database of 50,000 names of foreign men and women “who lived, worked or died in China, between the 1850s and 1940s.” The information is drawn from “government department lists, legal and diplomatic records, cemetery lists, and during research undertaken for a number of projects on the history of modern China and of the foreign relations of China,” directed by Robert Bickers, a professor of history at the University of Bristol.

  • 39,775 photographs taken during Japan’s wartime occupation of China are now online in a searchable database called the North China Railway Archive (in Japanese), maintained by the University of Kyoto and several Japanese research institutes. Global Voices has a story about the archive.

  • “Mapping China’s tech giants” is the aim of a new project from the Australian Strategic Policy Institute. It’s a “public database to map the global expansion of 12 key Chinese technology companies.”

  • Oma Lee, who was recently given the Young China Watcher of the Year Award, will join us for a Q&A on our Slack channel on the theme “China’s changing NGO landscape” next Wednesday, April 24, at 11 a.m. EST. Email us if you need help accessing Slack. Here’s a link to the Slack channel. Please email lucas@supchina.com if you need help getting in.

—Jeremy Goldkorn, Editor-in-Chief


1. Facial recognition payment is about to go big

Chinese business news site Yicai reports that Alibaba affiliate Ant Financial’s “ubiquitous mobile payment platform Alipay has launched its latest facial recognition tool and said it plans to spend CNY3 billion ($448 million) promoting the new system across China.”

  • Alipay has launched Dragonfly 2 (蜻蜓2代 qīngtíng èrdài), a portable point of sales (POS) device that costs 1,999 yuan ($298), nearly 30 percent less than the previous version. That price is being discounted during a “pre-sale period” to bring the price down to just 1,199 yuan ($179).

  • There are free POS devices from competitors, so Alipay is offering an incentive of up to 1,200 yuan if vendors process a certain amount of payments, which would cover the cost of the device. Yicai says the funds used for these incentives “are included in the product’s 3 billion yuan promotion plan.”

  • Vendors in 300 cities already use Dragonfly 1, Alipay’s first-generation facial scanner released last December, according to the company.

  • Dragonfly 2 is an upgrade to the camera and software, which should make the device more reliable, and able to work in various lighting conditions.

  • 500,000 people have been employed in “production, installation and commissioning since last year,” according to Alipay statements.

  • The average annual salary for staff who “commission and install” facial scanning equipment is 150,000 yuan ($22,360) to 200,000 yuan ($29,830), according to Yicai.

—–

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


Here are the stories that caught our eye this week:

  • The Philippines again scolded China over its maritime activity near Thitu Island (a.k.a. Pag-asa, a.k.a. 中业岛 zhōng yè dǎo), part of the disputed Spratly Islands in the South China Sea. The spokesperson for the Malacañan Palace — the equivalent of the White House — warned, “China should avoid performing acts that will place at risk the Filipino fishermen fishing in the disputed areas.” Earlier this month, Filipino President Duterte went off key from his normally harmonious tune towards Beijing, saying he would tell soldiers, “prepare for suicide mission,” if China did not “lay off the Pagasa.”

  • Security officials across China are racially profiling Uyghurs using custom-designed facial recognition software, the New York Times reported. The phenomenon was described by reporter Paul Mozur as “automated racism,” and is “the first known example of a government intentionally using artificial intelligence for racial profiling.” SenseTime, one of several billion-dollar companies that has worked to develop this technology, has backed out of its “smart policing” joint venture in Xinjiang, it was also reported this week.

  • A deal to end the U.S.-China trade war appears close. Early this week, the American side seemed to be softening some of its hardline demands on unilateral enforcement and state subsidy reduction. Later it was reported that negotiators will meet in Beijing and Washington late this month and in early May, and are optimistic about reaching a deal sometime in May — but at the same time, tit-for-tat visa rejections for scholars have begun.

  • India has blocked TikTok, the video-sharing app made by Beijing-based Bytedance. Though some Indian politicians worried that TikTok may be used by sexual predators to lure underage victims, many also cited concerns about political interference — making this the second time a democracy has tried to block Chinese online media for political reasons.

  • Women in China’s major cities are buying homes at extraordinarily higher rates than a few years ago. One survey by Beike Zhaofang 贝壳找房 found that last year, about 46.7 percent of all homebuyers in a selection of 12 cities were women. This number has increased by a factor of at least nine since 2016, when women only accounted for 5 percent of all home purchases.

  • China’s economic slowdown has softened, according to first quarter economic data from the National Bureau of Statistics (NBS). No sentient person believes the numbers from the NBS without further confirmation, but the International Monetary Fund seems to agree.

  • Huawei is not employee-owned in any meaningful sense, a research paper argued this week. Furthermore, if the “Huawei Investment & Holding Company Trade Union Committee” at the top of the company’s ownership is in fact a trade union, the company could even be effectively state-owned. Huawei responded with PR spin that did not bring clarity to the actual ownership structure of the company.

  • Amazon is exiting from ecommerce in China, after its market share in the country dwindled from 15 percent in 2008 to only 0.6 percent in 2018.

  • Liu Jingyao, a student at the University of Minnesota, has filed a rape lawsuit against JD.com CEO Richard Liu (刘强东 Liú Qiángdōng). This comes after prosecutors announced that they would not file charges in December, after an investigation that began in September.

  • Smaller cities may be set for a real estate boom, after residency registration (hùkǒu 户口) requirements were recommended to be loosened this year.

  • No short skirts or sleeveless tops are allowed at a college in Jilin, according to a new dress code. The rules sparked a heated debate online about whether the school went too far in regulating students’ attire and whether the ban unfairly targets female students.

  • Authorities raided the Beijing office of Ericsson, the Swedish telecommunications company. Reports indicate that there were complaints from Chinese handset makers about Ericsson’s licensing practices for 5G-compatible phones.

  • One in seven top U.S.-based AI researchers are from China, according to numbers and analysis by Joy Dantong Ma at MacroPolo.


BUSINESS AND TECHNOLOGY:

Appliance queen Dǒng Míngzhū 董明珠 may soon become the standard bearer for China’s effort to its reform state-owned businesses…Dong is now at the forefront of a highly anticipated deal that will shift the ownership, and the actual control of the company…The deal, in essence, involves the privatisation of Gree Electric.

An investment group often described as the “brainchild” of Chinese premier Lǐ Kèqiáng 李克强 has seen cross-defaults triggered on $800m in bonds after showing signs of stress earlier this year with a missed debt payment.

The troubles for China Minsheng Investment Group, the country’s largest private investment company, highlight waning government support for state-owned companies and other high-profile institutions with strong political backing.

“By next year, the United States is on pace to have more 5G spectrum than any other country in the world,” Trump bragged.

Only in passing was it mentioned that Trump’s plan commits the United States to build out 5G infrastructure on a high-band spectrum swath known as “mmWave” (between 24 and 300 gigahertz), which is inferior in range and penetration capability to the “sub-6” (below 6 gigahertz) spectrum being used for 5G by most other countries, especially China.

Leica Camera has sought to distance itself from a promotional video depicting photographers covering the deadly Tiananmen Square crackdown three decades ago, after it landed the German company in hot water in China.

The five-minute promotional video, The Hunt, depicts various dark moments of war and conflicts through the lenses of photojournalists. But its main plot follows a Western journalist inside a Beijing hotel in 1989 as he tries to go outside to document the shooting of student protesters by the Chinese army, but is confronted and chased by Chinese soldiers.

On Tuesday, news broke that Microsoft refused to sell its facial recognition software to law enforcement in California and an unnamed country. The move led to some praise for the company for being consistent with its policy to oppose questionable human rights applications, but a broader examination of Microsoft’s actions in the past year indicates that the company has been saying one thing and doing another…

Last week, the Financial Times reported that Microsoft Research Asia worked with a university associated with the Chinese military on facial recognition tech that is being used to monitor the nation’s population of Uighur Muslims.

Sony plans to broaden its footprint in China’s anime industry, aiming to apply a proven formula it has used in Japan, combining both new shows and merchandise to tap into a market that already exceeds $26 billion…

…The new unit will initially set up an online shop selling products featuring characters from shows already airing in China, such as “Fate/Grand Order” and “Natsume Yujin-cho.” It will also start granting licenses — which currently go mainly to distributors — to other companies, such as manufacturers of daily goods. Later on, it will partner with local content producers to create anime for the Chinese market.

  • Novartis, Holcim, and the Swiss Belt and Road schmooze
    Video interview: Switzerland prepares China charm offensive / CNN
    “Swiss President Ueli Maurer will pay a visit to China starting Monday, accompanied by a delegation of bankers and businesspeople from companies including [pharma giant] Novartis and [building materials manufacturer] Holcim.”

  • Chinese high-speed rail in the U.K.
    China interested in “wholesale package” for HS2 as rail boss meets builders and operators in Beijing / Global Construction Review
    “The man in charge of delivering the UK’s controversial high-speed railway, HS2, traveled to Beijing this month to meet China’s biggest state-owned railway builders and operators, with China reported to be interested in providing a ‘wholesale package’ to build it.”

  • African mobile king Transsion
    China’s mobile phone giant in Africa / WSJ (paywall)
    “Shenzhen Transsion will be among the first batch of companies to list on Shanghai’s new board, which wants to become a stock market for the country’s best technology companies—essentially China’s take on Nasdaq.”

  • Qualcomm in China
    Qualcomm said to end chip partnership in China’s Guizhou / SCMP
    “Huaxintong Semiconductor Technologies (HXT), a joint venture established in 2016 by US chip maker Qualcomm and China’s Guizhou government that specialises in making server chips, will be wound down by the end of April.”

SCIENCE, HEALTH, AND THE ENVIRONMENT:

  • Wind energy
    China to promote using wind energy to power heating / Reuters via Journal Pioneer
    “China on Friday said it would promote using energy generated by the wind to help power heating systems during the bitterly cold winters seen in many parts of the country.”

  • Space exploration
    China invites world’s scientists to jointly explore asteroid and comet / Xinhua
    “China has unveiled a plan to explore an asteroid and comet, inviting scientists around the world to participate in the program. The mission will involve exploring a near-Earth asteroid, named 2016HO3, and a main-belt comet, named 133P, said Liú Jìzhōng 刘继忠, director of the Lunar Exploration and Space Program Center of the China National Space Administration.”

POLITICS AND CURRENT AFFAIRS:

Kǒng Línlín 孔琳琳, 49, was charged with common assault after an incident at the Conservative Party Conference in Birmingham on 30 September 2018. A summons was posted to her address in King’s Cross, London, for a hearing at Birmingham Magistrates’ Court.

She is alleged to have assaulted a delegate during a discussion about political freedoms in Hong Kong. The case against Ms Kong, a London-based correspondent for China’s official state broadcaster CCTV, was dropped by the Crown Prosecution Service in November but was later reinstated.

After she failed to attend the hearing, a warrant for her arrest was issued by a deputy district judge.

Lorraine Wong and Jacob Edmond, both professors at the University of Otago, in New Zealand, have written an account of the censorship they encountered when they edited a planned special issue of the journal Frontiers of Literary Studies in China. The journal is published by the Netherlands-based publishing company Brill in association with the China-based Higher Education Press, an entity that describes itself on its website (in Chinese) as affiliated with China’s Ministry of Education. The journal’s editorial board lists scholars from major American and international universities — including Cornell University, Duke University, Harvard University, the University of California, Davis, and the University of Washington — and its editor in chief is based at New York University. The journal’s editorial office is located in Beijing.

—World Trade Organisation panel decided China’s system of tariff rate quota system for rice, wheat and corn violated international trading rules.

—Case was filed by the administration of former president Barack Obama in December 2016 before Donald Trump began the ongoing US-China trade war.

Something strange is happening in Xi Jinping’s China. This is supposed to be the perfect dictatorship, the most sustained period of authoritarianism since the Cultural Revolution ended more than forty years ago, a period of such damning disappointment that all but the regime’s most acquiescent apologists have become cynics or critics. And yet the past few months have also seen something potentially more interesting: the most serious critique of the system in more than a decade, led by people inside China who are choosing to speak out now, during the most sensitive season of the most sensitive year in decades.

—Lobbyists from Solstice Public Affairs, hired by China’s consulate, have been regular contributors to media discourse about China in Canada.

—In a Toronto Star opinion piece, a Solstice employee warned of a ‘new wave of Sino-phobia’ without originally identifying China as a company client.

—Efforts to reduce bribery through higher pay have seen some salaries triple.

—Slashed benefits and bigger workloads leave bureaucrats feeling dissatisfied.

Nearly two years since Islamic State-aligned militants laid devastating siege to the southern Philippine city of Marawi, tens of thousands of stranded residents still dream of returning to their homes and businesses.

But rather than laying blame solely on the Philippine government for the slow and inadequate response, displaced locals are pointing to another culprit for their misery and woe: China.

Two consortiums led by state-owned Chinese firms, namely the Bagong Marawi Consortium (BMC) and Power Construction Corporation of China Ltd, have come under rising civil society fire for the delays in rebuilding and resettlement.

Each time we asked them what crimes they had committed, and each time we received similar answers with the same key phrases. They had been infected by “extremist thought” and sought to “infect” others before realizing the error of their ways in the camps. Many included the phrase: “I want to say that I am here voluntarily.”

Even more striking, the same detainees could repeat their answers word for word when asked.

SOCIETY AND CULTURE:

  • Creative nonfiction
    Life after love: A new Canadian’s tale / Chinarrative
    This story, set in Canada, “is about a Chinese woman who finds herself trapped in a bad marriage thousands of miles from her homeland [and] about low self-esteem, but it’s also speaks to the inherent loneliness felt by many immigrants, regardless of nationality.”

  • Preschool budget
    China increases preschool education spending / Xinhua
    “The Chinese central government has increased financial input for preschool education from 15 billion yuan ($2.2 billion) in 2018 to 16.85 billion yuan ($2.51 billion) in 2019, the Ministry of Education said Thursday.”

  • Basketball
    Hoop and dreams / World of Chinese
    “Once considered a rogue offshoot of basketball, streetball enjoys a growing grassroots popularity in China.”

  • Unscientific homophobic nonsense
    Conversion therapy still promoted in China, investigation finds / Sixth Tone  

Hospitals and clinics claiming to ‘cure’ homosexuality through hypnosis and prescribed medication can still be found in China’s major cities, according to an investigation by The Paper, Sixth Tone’s sister publication.

In a video published Thursday, staff at medical facilities in six cities — Jinan, Zhengzhou, Zhumadian, Guangzhou, Nanning, and Chongqing — offered to provide so-called gay conversion therapy to The Paper’s reporter, who posed as a potential client.


VIDEO ON SUPCHINA THIS WEEK

From India’s TikTok ban to a rape lawsuit against Richard Liu — our top news this week

From India’s ban of Chinese-created video app TikTok to Amazon’s exit from China to a rape charge filed against JD.com founder Richard Liu, here are some top stories we covered this week.

IQiyi uses AI to improve video-creation efficiency, CTO says

iQiyi is China’s largest video-streaming site based on time spent on its platform. Viewers watched 4.395 billion hours of video in January, according to QuestMobile. We spoke with Wenfeng Liu, CTO of iQiyi, in New York City about AI and video streaming, and iQiyi’s plans for the future.


FEATURED ON SUPCHINA

‘Poet on a Business Trip’: An offbeat odyssey through Xinjiang with poetry

For a country that’s produced poets with dramatic and colorful lives, there’s a disappointing lack of movies about poets and poetry in China. In honor of National Poetry Month, however, there is at least one poetry-related Chinese film worth watching. It’s definitely offbeat, and the poet it follows is completely obscure, but Poet on a Business Trip 诗人出差了 by Ju Anqi 雎安奇 might just be the best (and only) poet-docufiction road movie ever made.

China’s AI trajectory is set by entrepreneurs and international collaboration, not by government edict

What is driving China’s current boom in artificial intelligence research? Many Western analyses inaccurately attribute China’s AI growth to the 2017 National AI Development Plan (AIDP), but Paul Triolo and Matt Scott argue that the real story is that the private sector has led and international collaboration has been crucial.

Li Bai’s ‘Gazing at a Waterfall on Mount Lu’

April is National Poetry Month, and we’re celebrating with a series of articles that looks at Chinese poetry, both past and present. We begin with a 28-character classic by arguably China’s greatest poet, Li Bai, “Gazing at a Waterfall on Mount Lu” 望庐山瀑布, featuring indelible images and grand ideas.

Hai Zi: The life and death of Chinese poetry’s mystical martyr

Obscure during his lifetime, Zha Haisheng has — since killing himself in 1989 — become one of the most popular and influential poets of contemporary China, remembered by his pen name, Hai Zi 海子. A strong sense of mysticism pervades his work, with references to Christianity, Hinduism, and other religions and myths. He wrote about nature, but also about darker themes, such as loneliness and death.

Du Fu’s ‘Ballad of an Old Cypress,’ a poem of longing and lament

Written in the wake of great political turmoil, Du Fu’s famous “Ballad of an Old Cypress” both celebrates and laments the eponymous cypress, great but ultimately unused. Shortly after the An Lushan Rebellion (755–763), Du Fu ended up seeking refuge in Kuizhou (modern-day Chongqing). With the Tang’s fate in question and his health already failing, he was unable to fulfill his aspirations of serving the nation as an official, and in his poetry, he turned his attention to southern heroes of the past with similarly frustrated aims.

Chinese Corner: Zhili is the child-modeling capital of China

Last week, a video showing a mother kicking and slapping her three-year-old daughter during a photo shoot ignited fury on Chinese social media. In Zhili, Zhejiang Province, where the child spent the vast majority of the past three years, there are hundreds of apparel factories that produce more than half of the clothing for children in the market; there are also thousands of parents who dream of their kids making it big as a model. Also in this week’s Chinese Corner: A play about women migrant workers in childbirth, and a man takes revenge on pyramid schemes.

Women in China are becoming a powerful force in homebuying

Although the gender pay gap remains a persistent problem in China, where women on average earn 16 percent less than their male counterparts, Chinese women are becoming an increasingly powerful force in the country’s housing market.

About 46.7 percent of all homebuyers were women in 2018, according to a report released by the real-estate broker platform Beike Zhaofang 贝壳找房, which surveyed thousands of women aged 18 to 50 in 12 cities, including Beijing, Shanghai, and Wuhan. This is a dramatic increase: In 2016, women only accounted for 5 percent of all home purchases.

Kuora: Stereotypes of China’s provinces: A poem by Kaiser Kuo

“They say that Henan people are a sly and cunning lot / But my ancestors are from there — proving some, at least, are not.” April is National Poetry Month, which makes this week’s Kuora column especially fitting. Here’s Kaiser Kuo rhapsodizing about Chinese regional stereotypes.


SINICA PODCAST NETWORK

Sinica Podcast: Mark Rowswell a.k.a. Dashan Live at the Bookworm Literary Festival

China’s most famous Canadian, Mark Rowswell, became famous — or at least “feimerse” — after appearing in the Spring Festival Gala on CCTV in 1990. In recent years, he’s pioneered a hybrid between the xiangsheng (相声 xiàngsheng; crosstalk) for which he’s known and Western-style stand-up comedy. Mark joined Anthony Tao and David Moser at the storied Bookworm on the final night of the Bookworm Literary Festival on March 30 to talk about the Chinese language, comedy, and the difficulties of Chinese soft power.

Ta for Ta, episode 17: Mei Zhang

Mei Zhang, a native of Yunnan Province, is the founder and CEO of WildChina, an award-winning luxury sustainable travel company based in Beijing. Mei holds an M.B.A. from Harvard Business School and worked as a consultant for McKinsey & Company until she found her true passion during an arduous pilgrimage on a Tibetan mountain: sustainable travel.

ChinaEconTalk crossover episode: China Tech Investor podcast

This week’s episode is a crossover with the China Tech Investor podcast. Join Jordan in conversation with China Tech Investor co-hosts James Hull and Elliot Zaagman as they discuss their perspectives on Chinese ecommerce, live streaming, fashion, the lessons Facebook is learning from WeChat, and emerging investment opportunities.

The Caixin-Sinica Business Brief, episode 83

This week on the Caixin-Sinica Business Brief: U.S.-China trade talks, China’s relaxation of hukou rules, Hong Kong’s expensive housing market, a libel case filed by developer SOHO China, Doug Young on some IPO news from China, and more.

Middle Earth, episode 7: Modern-day Chinese fortune-telling

In case traveling to the nearest Chinese temple may be a bit inconvenient, modern-day Chinese astrologers still have you covered — inevitably, there’s an app for that! In this episode, astrologer Wen Jun explains how she works, the kinds of clients who seek her out, the differences between Chinese and Western astrology, and other aspects of fortune-telling in the modern age.