BUSINESS AND TECHNOLOGY:
Luckin offices raided by investigators
Luckin offices raided by Chinese regulators as scandal widens / Bloomberg (porous paywall)
Chinese investigators raided the offices of Luckin Coffee Inc. as part of a multi-agency investigation into its finances, according to a person familiar with the matter, as pressure grows on the formerly high-flying coffee chain at the center of an accounting scandal.
The raid was carried out jointly by officials from different government agencies on Sunday as part of an investigation led by the China Securities Regulatory Commission into the beleaguered startup, said the person who was not authorized to speak publicly.
- Luckin Coffee under investigation by China’s top commerce regulator / WSJ (paywall)
March industrial profits plummeted
China industrial profits dropped by more than a third in March / Bloomberg (porous paywall)
“Industrial profits dropped 34.9% from a year earlier in March, improving slightly from a 38.3% decline in the first two months of the year, the National Bureau of Statistics said Monday.”
Report that estimated jobless rate at 20% retracted
China brokerage retracts estimate that real jobless level is 20% / Bloomberg (porous paywall)
A Chinese securities brokerage retracted an analyst report Monday that put the country’s real jobless rate above 20%, far in excess of the official gauge.
As many as 70 million people could have lost their jobs due to the economic fallout from the coronavirus pandemic, translating into an actual unemployment rate of around 20.5%, a group of three analysts from Shandong-based Zhongtai Securities [in Chinese] wrote in a report dated April 24.
The surge in unemployment was due to the outsize impact of the pandemic on services and small businesses, which provide the bulk of job opportunities, they said.
U.S. likely to revoke telecom firms’ licenses
FCC signals likely revocation of four Chinese telecom firms’ licenses / WSJ (paywall)
The Federal Communications Commission ordered four Chinese state-owned telecommunications operators [China Telecom, China Unicom, Pacific Networks and ComNet] to explain why it shouldn’t withdraw permission for them to operate in the U.S., paving the way for likely license revocations.
JPMorgan tops foreign fund rankings
JPMorgan tops ranking as best-performing fund house in China / FT (paywall)
“JPMorgan Asset Management regained its position as the top-performing foreign fund house in China in 2019, leapfrogging its closest rivals UBS and Invesco in the fifth annual analysis of the Chinese investment market to be published by Z-Ben Advisors on Monday.”
Indebted property tycoon blacklisted
Chinese property tycoon lands on debtors blacklist / FT (paywall)
The chairman of an acquisitive Chinese real estate conglomerate has landed on a national debtors blacklist that bars him from flying first class or going to nightclubs, as leverage pressures intensify for the country’s property sector in the wake of the coronavirus outbreak.
Huáng Qísēn 黄其森, the founder and chairman of Tahoe Group, was added to the Supreme Court’s public database after failing to repay loans to a Chinese trust company. Moody’s said in March that the company had $4.3bn in short-term debts.
Bank of China clients lost $11 billion on oil bet
Bank of China clients said to have $1 billion losses on oil bet / Bloomberg (porous paywall)
“Bank of China Ltd.’s estimate for the carnage to retail investors from the collapse in a product linked to U.S. crude oil futures surged 11-fold to more than 7 billion yuan ($1 billion) as it consolidated reports from its nationwide network, according to people familiar with the matter.”
China eases medical gear export rules
China seeks to ease medical goods shipment delays with new rule / WSJ (paywall)
“Makers of medical gear in China that met the national standards of their foreign buyer can apply for export approval through an industry association, Chinese authorities said Sunday [in an effort to reduce the shipment delays of medical and protective equipment].”
China needs to offer targeted support — central bank governor
PBOC’s Yi stresses financial support to virus-weakened economy / Bloomberg (porous paywall)
China should maintain liquidity at a reasonably ample level and offer targeted support to companies hit by the coronavirus epidemic, China’s central bank Governor Yì Gāng 易纲 said.
The impact from the virus on China’s economy will be short-lived, and the fundamentals won’t change, according to the article by Yi published by the Economic Research Journal [in Chinese] in its March issue. It was re-published Sunday on the WeChat account of ChinaForex magazine, run by the country’s forex regulator.
Starbucks lands a new partnership
Starbucks strikes partnership with venture capital firm Sequoia to make tech investments in China / CNBC
- Starbucks has struck a partnership with venture capital firm Sequoia Capital China to co-invest in technology businesses in the world’s second-largest economy.
- The latest push from Starbucks aims to boost the digital aspect of its business in China, one of its most important markets.
Households plan to save, not spend…
Chinese consumer sentiment still reeling from pandemic, hitting hopes of ‘revenge shopping’ / SCMP
- More than half of Chinese households plan to increase savings and cut back on spending following the COVID-19 pandemic, a new survey shows.
- Results show that consumer sentiment is still recovering from crisis and quash hopes of a quick rebound in the world’s second largest economy.
…But construction, luxury market show signs of recovery
China construction projects resume in sign of economic reopening / FT (paywall)
“Chinese manufacturers of construction machinery have raised prices [by 5 to 10%] as sales take off, in an early sign of how economic activity is resuming after weeks of shutdown during the coronavirus epidemic.”
China luxury market shows early recovery signs / Caixin
“Some of the world’s top luxury goods makers said they were seeing positive signs coming from China, as shoppers are once again free to resume store-based buying after spending several months mostly confined to their homes.”
Alibaba partner removed following news of affair
Alibaba removes youngest partner Jiang Fan after affair goes public / TechNode
Alibaba announced today that it has removed Jiǎng Fán 蒋凡, president of the company’s marketplaces Taobao and Tmall, from its list of partners after an investigation into Jiang’s alleged affair with a social media influencer who is a co-founder of Alibaba-backed KOL agency Ruhnn.
Bitcoin miner files for U.S. IPO
Bitcoin-mining machine maker Ebang files for U.S. IPO / Caixin
“Chinese bitcoin-mining machine maker Ebang International is seeking to raise up to $100 million through an initial public offering (IPO) in the U.S., gambling on making a listing during one of the most turbulent markets in more than a decade.”
Energy conglomerate declared bankrupt
Fallen energy conglomerate CEFC declared bankrupt / Caixin
CEFC China Energy Co. Ltd., the fallen energy and financial conglomerate controlled by secretive tycoon Yè Jiǎnmíng 叶简明, has been declared bankrupt by a Shanghai court, according to a ruling (link in Chinese) dated March 31 and published Friday on an enterprise bankruptcy information disclosure platform set up by China’s Supreme People’s Court.
U.S., China announce new cybersecurity trade rules
China toughens procurement rules for tech equipment / WSJ (paywall)
China adopted tough new cybersecurity rules for buyers of technology equipment, which could place foreign tech products at a disadvantage in the Chinese market.
The new procurement rules, announced Monday by the Cyberspace Administration of China and set to take effect June 1, require operators of “critical information infrastructure” to go through a cybersecurity review process when ordering goods and services that may affect national security.
The United States said on Monday it will impose new restrictions on exports to China to keep semiconductor production equipment and other technology away from Beijing’s military.
The new rules will require licenses for U.S. companies to sell certain items to companies in China that support the military, even if the products are for civilian use. They also do away with a civilian exception that allows certain U.S. technology to be exported without a license, if the use is not connected to the military.
SCIENCE, HEALTH, AND THE ENVIRONMENT:
Alzheimer’s drug approved for U.S. trial
Chinese Alzheimer’s drug gets U.S. approval for stateside trial / Bloomberg via Caixin
“Shanghai Green Valley Pharmaceutical Co. got clearance on April 8 for the U.S. part of a global trial that seeks to enroll more than 2,000 patients with mild-to-moderate Alzheimer’s across North America, Europe and Asia, according to a company statement Sunday.”
Recovered COVID-19 patients may not be immune — WHO
WHO warns you may catch coronavirus more than once / Bloomberg (porous paywall)
“‘There is currently no evidence that people who have recovered from COVID-19 and have antibodies are protected from a second infection,’ the United Nations agency said in an April 24 statement.”
Organization refutes claims China caused Mekong drought
China’s dams did not cause our drought, Mekong nations say — but they ask for transparency / SCMP
An intergovernmental organisation managing Southeast Asia’s Mekong River has called for greater transparency in China’s water data, despite denying allegations that big dams in southern China have caused massive droughts in downstream countries.
The Mekong River Commission — representing Laos, Cambodia, Vietnam and Thailand — has issued a 13-page statement in response to new U.S. government-funded research claiming China had deliberately held back a large amount of water, affecting the livelihoods of millions of people downstream in the past year.
Acid leak in Hebei Province
Acid leak at Hebei e-bike plant endangers water supply / Sixth Tone
An acid leak at an electric bike manufacturing plant in the northern Hebei province is believed to have contaminated the water supply to over 17,000 residents of Guangzong County, according [in Chinese] to the state-run Xinhua News Agency.
While the leak of the “unknown acid” is under investigation, the local government is supplying water via vehicles to affected households.
Panic spread across Guangzong County Friday when residents found [in Chinese] that tap water had turned yellow, was foaming, and had a pungent odor. According to a report [in Chinese] Sunday in China Youth Daily, several villagers suffered from burns when using the contaminated tap water to wash or shower.
Drugmaker to build new vaccine production facility
China’s Sinovac amps up COVID-19 vaccine work with new facility backed by Chinese government / FiercePharma
“With financial backing from the Chinese government, Sinovac [one of many drugmakers seeking a COVID-19 vaccine] will erect a new vaccine production facility on 230,000 square feet of land to help speed the development of a novel coronavirus shot, Reuters reported Thursday.”
Video: Forest fire in Qingdao
Shanghaiist on Twitter: “Massive forest fire consumes hills surrounding the Shandong city of Qingdao. No casualties have been reported so far.”
POLITICS AND CURRENT AFFAIRS:
Xenophobia and racism from Republican senator
GOP senator says don’t let Chinese students study STEM in U.S. / Bloomberg (porous paywall)
Republican Senator Tom Cotton lit up social media on Sunday by suggesting Chinese students shouldn’t be allowed to study science and technology at U.S. universities, and should focus on Shakespeare instead.
The Arkansas lawmaker deemed it a “scandal” that China’s “brightest minds” study in the U.S. only to return home “to compete for our jobs, to take our business, and ultimately to steal our property…”
The students should be allowed “to come here and study Shakespeare and the Federalist Papers, that’s what they need to learn from America,” he said. “They don’t need to learn quantum computing and artificial intelligence from America.”
Ratcheting up of “touch on China” rhetoric continues
GOP memo urges anti-China assault over coronavirus / Politico
The National Republican Senatorial Committee has sent campaigns a detailed, 57-page memo authored by a top Republican strategist advising GOP candidates to address the coronavirus crisis by aggressively attacking China.
The memo includes advice on everything from how to tie Democratic candidates to the Chinese government to how to deal with accusations of racism. It stresses three main lines of assault: That China caused the virus “by covering it up,” that Democrats are “soft on China,” and that Republicans will “push for sanctions on China for its role in spreading this pandemic.”
There is no China crisis / Reason
Scholar Daniel W. Drezner writes:
“For all the talk about the politics of Washington being more polarized than ever, the bipartisanship of the new consensus about China is striking. If Democrats have opposed the Trump administration’s actions, it is mostly because they think the actions haven’t gone far enough.”
Hong Kong defends arrest of democracy activists…
Those criticising arrest of 15 pro-democracy activists are ‘biased and unreasonable,’ say top Hong Kong officials / Hong Kong Free Press
Hong Kong’s top officials have hit back at local and international criticism of the arrests of 15 high-profile democrats. They said such criticism was “biased and unreasonable” and politically motivated, while insisting that charges would not be dropped.
Chief Secretary for Administration Matthew Cheung [张建宗 Zhāng Jiànzōng] wrote [in Chinese] in his blog on Sunday that their arrests and prosecution — connected to alleged cases of “organising and participating in unlawful assemblies” — were made in strict accordance with the law and the Department of Justice’s Prosecution Code.
China has a post-pandemic dream for Hong Kong / NYT (porous paywall)
An op-ed by Yi-Zheng Lian, former chief of the Hong Kong Economic Journal.
…As Hong Kong bookseller opens shop in Taiwan
Taiwan celebrates Hong Kong bookseller who crossed China / WSJ (paywall)
The opening of a hole-in-the-wall bookstore in Taipei doesn’t usually attract much hullabaloo. Saturday’s reemergence of a Hong Kong bookseller who has for years proved a thorn to China’s rulers in Beijing was a different story.
Lam Wing-kee’s [林荣基 Lín Róngjī] first day of business was greeted with a basket of flowers from Taiwan’s president, squads of police officers and a scrum of reporters.
Filipinos pan “friendship” song as propaganda
‘Laughable, cynical’: Filipinos pan Chinese coronavirus music video as South China Sea propaganda / SCMP
Thousands of Filipino social media users have panned a song written by China’s Ambassador to the Philippines titled Iisang Dagat (One Sea) that was meant to celebrate ties between the two nations, claiming that it instead makes crude references to Beijing’s maritime claims in the contested South China Sea.
Chinese embassy to investigate Canada’s faulty mask claims
Chinese embassy in Canada to investigate claims 1 million N95 masks were substandard / SCMP
“The Chinese embassy in Canada says it will investigate claims made by Ottawa that about 1 million KN95 face masks bought from China failed to meet federal COVID-19 standards for use by frontline health professionals, but appealed for the incident not to become politicised.”
China sends delegation to North Korea
China sends doctors to advise on Kim Jong Un, reports say / FT (paywall)
China has sent a team of experts to North Korea to advise on Kim Jong Un, the North Korean leader whose health has been the subject of speculation, according to a Reuters report.
A delegation including medical experts and officials from a Chinese Communist party liaison office responsible for handling North Korean affairs left Beijing for North Korea on Thursday, according to the report, which cited people familiar with the matter.
North Korea leader Kim Jong Un is ‘alive and well’ South Korea says, amid mounting speculation / CNN
“South Korea continued to pour water on mounting speculation about the health of North Korea’s leader Kim Jong Un, telling CNN he is ‘alive and well.’”
Saudi Arabia really wants China’s medical help
Saudi Arabia cuts $265 million deal with China to fight virus / Bloomberg (porous paywall)
“Saudi Arabia will pay China 995 million riyals ($264.6 million) to provide coronavirus tests and medical expertise, Abdullah Al-Rabiah, chairman of the Negotiation and Purchase Committee said Sunday, citing a royal decree.”
Lawyer finally allowed home
‘A dream come true’: Chinese human rights lawyer Wang Quanzhang reunited with family / SCMP
Released human rights lawyer Wáng Quánzhāng 王全璋 finally reunited with his ailing wife and son in Beijing on Monday after police drove him home to the capital from eastern Shandong province.
Wang, who was released from jail three weeks ago but was barred from returning to his family immediately, arrived home on Monday evening.
Huawei employees jailed after discussing Iran
Jailed Huawei workers raised a forbidden subject: Iran / NYT (porous paywall)
The five men were all locked in disputes with their onetime employer, the Chinese technology giant Huawei. And they had all joined a group on the social app WeChat to organize.
Then, one of them wrote a message to the group that would upend their lives:
“I can prove that Huawei sold to Iran.”
The message, and the brief discussion that followed, touched on an explosive issue for the company. Huawei had just begun fighting allegations by the U.S. government that it had committed fraud to bypass sanctions against Iran. The company’s chief financial officer, a daughter of its founder, had been arrested less than two weeks earlier as part of the case.
The employees’ messages in the chat group included no hard evidence that Huawei’s activities in Iran were unlawful. Yet within weeks, the Chinese police had arrested all five men, two of them told The New York Times.
Can Harvard still afford to stand up to China?
The end of the Harvard century / Harvard Crimson
“Harvard’s prestige may have once served as a backstop for the long arm, but the defense now seems partial at best.”
SOCIETY AND CULTURE:
Wuhan’s “temporary orphans”
How Wuhan cared for pandemic’s ‘temporary orphans’ / Sixth Tone
“With thousands of moms and dads sick or quarantined, volunteers lent a parenting hand.”
Xiaomi executive apologizes after creepy comments
Senior Xiaomi executive jokes that new phone’s camera is great for creeping on girls / Shanghaiist
A senior Xiaomi executive has been forced to apologize after marking a couple of perverted jokes to promote the release of his company’s newest phone.
On Friday, Xiaomi vice president Cháng Chéng 常程 looked to hype the new Mi 10 Youth Edition 5G by pointing out some potential uses of its 5x periscope camera to his 3.4 million followers on Weibo.
“As others watch and cheer for you while you score the basketball, I am looking up your shorts,” reads one potential advantage of the zoom listed by Chang.
Inside Hong Kong’s “cage homes”
Social distancing in 100 square feet: Hong Kong’s cage homes are almost impossible to self-isolate in / CNN
“Cage homes are usually smaller than 100 square feet, only 25 square feet larger than most of the city’s prison cells. Bathrooms are mostly communal and often there are no kitchens — just plug-in hot plates. Units are mostly divided by makeshift or removable walls.”
Teaching Marxism through Bilibili
China’s Bilibili serves teens anime with a side of communism / Bloomberg (porous paywall)
Beijing is using popular culture to appeal to young people by plastering Communist Party slogans onto video games and enlisting boy bands as role models. One anime series from last year depicts the life of German socialist philosopher Karl Marx, whose theories are taught widely in Chinese schools. The show, co-produced exclusively for Bilibili by several state institutions, including a provincial propaganda department, depicts the young Marx as a typical Japanese manga-style protagonist.
Lesbian custody battle challenges Chinese law
Lesbian couple’s custody case takes China into uncharted legal waters / Reuters
“A Chinese lesbian couple’s landmark court battle over the custody of their two children has stirred debate over LGBT rights and put a spotlight on a legal vacuum created by the absence of a same-sex marriage law.”