Links for Thursday, April 2, 2020


Luckin Coffee Inc. plunged as much as 81% on Thursday after the company said its board is investigating reports that senior executives and employees fabricated transactions.

The company’s announcement that Chief Operating Officer Liú Jiàn 刘剑 and several employees reporting to him engaged in misconduct casts doubt on the foundations of the Chinese coffee chain’s meteoric rise and its emergence as a key competitor to Starbucks Corp.

Liu and others have been suspended and investors shouldn’t rely on previous financial statements for the nine months ended September 30, the company said. The transactions in question occurred last year and totaled about 2.2 billion yuan ($310 million), according to the filing.

EF Education First Inc.’s planned sale of its $2 billion Chinese business is in limbo as bidders struggle to assess the impact of the coronavirus outbreak on its operations, according to people familiar with the matter.

The sale process is on hold as EF Education First, which runs educational tours and classroom-based courses, works to adapt to a new environment where nearly all learning is moving online, according to the people. Such change has affected what potential private-equity buyers are willing to pay, said the people, who asked not to be identified because the information is private.

Million-dollar wire transfers to strangers. Rumors of hidden supplies in forgotten warehouses. Wheeler-dealers trying to talk regulators and customs officials into letting that one precious shipment through.

Global desperation to protect front-line medical workers battling the coronavirus epidemic has spurred a mad international scramble for masks and other protective gear. Governments, hospital chains, clinics and entrepreneurs are scouring the world for personal protective equipment they can buy or sell — and a new type of trader has sprung up to make that happen.

Livestreaming ecommerce had something of a coming-of-age moment Wednesday night when the indebted founder of a debt-ridden smartphone-maker [Luó Yǒnghào 罗永浩 of Smartisan Technology] debuted a show that drew plenty of eyeballs and garnered plenty of sales, even though the country’s consumer watchdog had warned about problems with the practice the day before.

  • As of March 29, official figures showed small and medium-sized enterprises nationwide had resumed work at a rate of 76.8%, but it’s unclear how quickly that figure can rise.
  • As of Monday, more than 429,000 businesses have dissolved or suspended operations for the year so far, according to analysis from Qichacha, which runs a Chinese business information database.
  • The Chinese government announced Tuesday a slew of additional measures to support small and medium-sized enterprises, including smaller banks.

Oil soared after U.S. President Trump said that he expects Saudi Arabia and Russia to cut production back by 10 million barrels or more after he spoke with Crown Prince Mohammed Bin Salman on Thursday…

The move comes after oil was already climbing after Beijing instructed government agencies to start buying cheap crude for its strategic reserves.

Banks are under increased pressure to raise loan margins in the Greater China region as the coronavirus pandemic weakens lending and a global dollar liquidity squeeze pushes up funding costs…

All but one surveyed bank expected syndicated loan volumes to fall this year.


Shenzhen has become the first Chinese city to ban the sale and consumption of dog and cat meat [effective 1 May]. It comes after the coronavirus outbreak was linked to wildlife meat, prompting Chinese authorities to ban the trade and consumption of wild animals.

  • BBC journalist Stephen McDonell on Twitter: “However on the same day we find that bear bile has been approved for use with #China’s critically ill #coronavirus patients. The National Health Commission has issued guidelines [in Chinese] recommending the use of tánrèqīng 痰热清 which contains bear bile, goat horn and other medicinal herbs.”
  • Molybdenum pollution in the northeast
    Waste molybdenum ore spill in China spreads 110km downstream / Reuters via Straits Times

A spill from a tailings dam at a molybdenum mine in north-east China environmental authorities said on Wednesday.

In China’s Heilongjiang province on Saturday, water containing waste molybdenum ore — mined for the metal used in stainless steel and tools — flowed out of a tailings pond belonging to Yichun Luming Mining Co Ltd and into a river system [contaminating water up to 110km (68 miles) downstream].


The Trump administration is tightening rules to prevent China from obtaining advanced U.S. technology for commercial purposes and then diverting it to military use, several sources told Reuters.

One change would do away with the civilian or “civ” exemption, which allows for the export of certain U.S. technology without a license, if it is for a non-military entity and use, sources said.

[T]he Claiborne case illustrates that threats to America’s security can take far humbler forms. When her case came before a judge in 2017, it hit the headlines for a few days and was then quickly forgotten.

“What it illustrates is that the Chinese intelligence services will dedicate years and significant resources to recruit even an office-management specialist,” said Ryan Gaynor, a supervisory special agent in the FBI, who investigated Claiborne’s case.

Intensive use of the health code is part of the efforts by authorities to revive China’s economy while preventing a spike in infections as workers stream back into factories, offices and shops.

A statement by the city government of Tianjin, a port city of 16 million people adjacent to Beijing, said the health codes were temporary but offered no indication when use might end.

“Fraud, concealment and other behaviors” carry penalties that “will have a huge impact on their future life and work,” a statement by the government of Heilongjiang province in the northeast said.

To the outside world, China can often seem like a monolith, with edicts from Beijing ruthlessly implemented by the rest of the system…

The coronavirus pandemic has also demonstrated a much messier reality. Although China has tools that many other governments would not be able to usually deploy to track potentially infected people, such as location data from individual phones and facial recognition technology, the state’s ability to access personal data is at times limited.


For her followers, Sānmáo 三毛, a young Chinese woman who abandoned the traditional pathways laid out for her, was a kind of revolutionary. In the quarter century following her death, she inspired at least thirteen biographies; fans retrace her footsteps through the Sahara and the Canary Islands.  

Read more on SupChina: The making of an icon: Sanmao’s ‘Stories of the Sahara’