Links for Wednesday, May 6, 2020 - SupChina
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Links for Wednesday, May 6, 2020

BUSINESS AND TECHNOLOGY:

Hong Kong-listed Chinese chipmaker Semiconductor Manufacturing International Corp. (SMIC) said Tuesday its board of directors has approved plans for a listing on Shanghai’s Nasdaq-like high-tech STAR market, making it the latest Chinese tech company to “return” to mainland public capital markets for fresh funds.

Scandal-tainted Chinese online tutoring company GSX Techedu has reported staggering growth in both net revenue and net profit in the first quarter of 2020, as the coronavirus pandemic increased demand for remote learning.

In the first three months of this year, GSX more than tripled its net revenue to 1.3 billion yuan ($183 million), compared with the same period last year, according to the company’s earnings report released Wednesday. Its net profits for the quarter also ballooned, increasing 336.6% year-on year, to 148 million yuan [$21 million].

The U.S. Department of Commerce is close to signing off on a new rule that allows U.S. companies to work with China’s Huawei Technologies on setting standards for next generation 5G networks, people familiar with the matter said.

Engineers in some U.S. technology companies stopped engaging with Huawei to develop standards after the Commerce Department blacklisted the company last year.

Despite commercial successes, Chinese companies must still deal with regulator perceptions of being weak on cybersecurity and privacy. 5G has further complicated matters by placing added scrutiny on these Chinese firms. Accordingly, Chinese tech firms have to comply with two different rigorous — and still developing — regulatory regimes.

In a provincial-wide campaign to revive the economy, senior officials in Hubei province…are turning themselves into online streaming celebrities…

And the result? Chinese media reports [in Chinese] say that on the first day of the campaign — 8 April — these livestreaming sales across the province garnered 17.9 million yuan ($2.5 million). They sold nearly 300,000 items in nine hours.

  • During the Labor Day holiday that ran from May 1 to May 5 this year, China recorded 115 million tourist trips domestically, bringing in tourism revenue of 47.56 billion yuan ($6.79 billion), according to the Ministry of Culture and Tourism.
  • That’s a 59.58% drop from the 117.67 billion yuan [$17 billion] recorded for last year’s Labor Day holiday, which was one day shorter, running from May 1 to May 4, according to figures disclosed by the ministry.

JPMorgan Global Alternatives will partner with Shanghai-based logistics real estate investor New Ease to invest in properties across China, according to a statement Wednesday. The initial portfolio consists of logistics facilities worth around $600 million in cities including Shanghai, Nanjing and Suzhou.

  • Most rides and attractions will be back in action from Monday, but social distancing means there’ll be no night-time parades or selfies with the cartoon stars.
  • Disney CEO says visitor numbers will initially be kept below the 30% cap set by China’s central government.
  • Pizza Hut, KFC to expand
    Yum China keeps bets on dine-in, sticks to expansion plans after virus / Reuters
    “Yum China is betting that Chinese consumers will still choose to dine-in in the aftermath of the coronavirus crisis and plans to open more Pizza Hut and KFC outlets in China’s smaller cities in the coming months, its chief executive said.”

SCIENCE, HEALTH, AND THE ENVIRONMENT:

[S]talling reform, shifting policy and a slowing economy had put the sector in crisis even before the coronavirus pandemic struck. “It’s gotten very difficult to do energy storage,” says Paul Man, general manager of Anxin, an energy storage company, which is part of the Golden Concord energy conglomerate that owns the Suzhou solar panel factory. “If government policy doesn’t change, energy storage won’t be doable in China.”

A compound found in licorice extract that is used in traditional Chinese medicine has shown potential as an antiviral to treat the new coronavirus, according to an initial study by researchers in Beijing.

Chinese licorice, a flowering plant that is native to Asia, contains a compound called liquiritin, which the team said was found to prevent rapid replication of the new virus strain in monkey cells.

  • Taiwan COVID-19 vaccine shows promise
    COVID-19 vaccine candidate shows promising results in early testing / Focus Taiwan
    “Taiwan’s Adimmune Corporation said Wednesday that it has developed a COVID-19 vaccine candidate that has shown promising results in tests on lab rodents, and that it plans to begin human trials in the second half of this year.”

POLITICS AND CURRENT AFFAIRS:

Chinese livestreaming apps are reportedly banning channels that feature foreigners on active streams, according to multiple users on the platforms.

AriaAndBrandon, a duo of beauty and lifestyle vloggers, posted on Weibo that one of their streams on livestreaming and ecommerce app Xiaohongshu on May 4 was shut down due to the new rules. The couple, currently residing in Melbourne, Australia, features a Chinese female and an Australian male.

The Trump administration is pressing the European Union to support an international inquiry into China’s handling of the new coronavirus, including the origins of the pandemic, as Brussels seeks to avoid taking sides in an increasingly bitter battle between Beijing and Washington over responsibility for the crisis.

The President himself has scaled up his conversations with foreign counterparts over the past three weeks, and has raised China with dozens of foreign leaders, one person familiar with those conversations said. While many traditional U.S. allies remain wary of ratcheting up tensions with China, in speaking with Trump, some European leaders have expressed concern at how China handled the crisis, according to the person.

Blaming China will not end this pandemic. On the contrary, the mind-set risks decoupling China and the United States and hurting our efforts to fight the disease, our coordination to reignite the global economy, our ability to conquer other challenges and our prospects of a better future. The United States would not emerge as a winner from this scenario.

  • Chinese ambassador to Washington Cuī Tiānkǎi 崔天凯 says relationship should be based on more than economics and trade, in CCTV interview.
  • Wuhan was ‘first victim’ of the pandemic and China should not be held responsible, he adds.

The U.S. is wrong to accuse China of being responsible for the coronavirus outbreak without providing proof, Russian President Vladimir Putin’s spokesman said, in the latest sign of a pivot away from Washington and towards Beijing.

As the debate over the origins of COVID-19 continues, Kremlin Spokesman Dmitry Peskov told CNBC that Russia couldn’t “show any solidarity” with China-bashing statements from the U.S., and stressed the importance of Moscow’s relationship with Beijing.

Yet despite the best efforts of ideological warriors in Beijing and Washington, the uncomfortable truth is that China and the United States are both likely to emerge from this crisis significantly diminished. Neither a new Pax Sinica nor a renewed Pax Americana will rise from the ruins. Rather, both powers will be weakened, at home and abroad. And the result will be a continued slow but steady drift toward international anarchy across everything from international security to trade to pandemic management. With nobody directing traffic, various forms of rampant nationalism are taking the place of order and cooperation. The chaotic nature of national and global responses to the pandemic thus stands as a warning of what could come on an even broader scale… 

It may not yet be Cold War 2.0, but it is starting to look like Cold War 1.5.

Shortly after Representative Kalu introduced his motion in the Nigerian House of Representatives, the Chinese embassy responded with a short statement, published only in Chinese, on the embassy website.

The embassy framed its objection against the motion around “media reports” rather than directly taking on the Nigerian legislature or Representative Kalu himself.

China’s Ambassador to the U.K., Liú Xiǎomíng 刘晓明, said British politicians who have called for a reset of ties between the two nations risk poisoning the relationship.

Anti-China rhetoric is in danger of undermining international solidarity in the fight against the coronavirus pandemic, he said in a webinar on Tuesday.

As the COVID-19 pandemic continues to rage around the world, the U.S. has promoted the island’s “incredible expertise” in battling the disease and rallied its allies — including Japan, Canada, Australia and the European Union — to support Taiwan’s participation in the global health body.

The United States has largely stood by in recent decades as China dramatically expanded its military firepower. Now, having shed the constraints of a Cold War-era arms control treaty, the Trump administration is planning to deploy long-range, ground-launched cruise missiles in the Asia-Pacific region.

  • U.S. news reports suggest White House officials have already considered the idea of cancelling all or part of the U.S.$1.1 trillion debt owed to China.
  • In response to the debate over the highly unlikely ‘nuclear option’, China could cut its holdings as the U.S. ramps up borrowing to pay coronavirus-related costs.

China’s foreign policy has increasingly weakened democratic institutions in at least 20 countries throughout Central Europe and Central Asia, weakening oversight and bolstering the power of authoritarian leaders, a new U.S. think tank report said Wednesday.

“While China’s international engagement is often less directly confrontational … it nevertheless has an insidious effect on the development and functioning of democratic institutions in the region,” Washington-based Freedom House said in its Nations in Transit 2020, an annual report on democratic governance in 29 countries spanning Central Europe, the Balkans, and Eurasia.

SOCIETY AND CULTURE:

A University of Pittsburgh professor [identified as Bing Liu] on the verge of making “very significant findings” researching COVID-19, according to the university, was shot and killed in an apparent murder-suicide over the weekend, police said…

Police believe the men knew each other, but say there is “zero indication that there was targeting due to his (Liu) being Chinese,” according to Detective Sgt. Brian Kohlhepp.

The slaying of a University of Pittsburgh medical school COVID-19 researcher killed Saturday in his Ross home resulted from what police Wednesday called a “lengthy dispute regarding an intimate partner.”…

Ross police did not reveal additional details about the dispute between victim Bing Liu and his suspected killer, Hao Gu.

Mr. Liu, 37, a native of China, was shot multiple times and found by his wife inside their townhouse on Elm Court.

Police believe that Mr. Gu, 46, of Franklin Park, fatally shot Mr. Liu, then got in his car parked nearby and killed himself…

Sgt. Kohlhepp said the case had been forwarded to federal authorities.

“Due to the fact that the individuals involved are not United States citizens and in accordance with long-standing protocol, our review has been forwarded to federal authorities,” Sgt. Kohlhepp said.

Controversial Chinese swimmer Sūn Yáng 孙杨 has appealed an eight-year suspension from the sport resulting from a confrontation with anti-doping officers over blood samples, Swimming World magazine reported.

Lawyers for the 28-year-old Olympic gold medalist filed an appeal April 29 to the Swiss Federal Tribunal (SFT) regarding a February 28 Court of Arbitration for Sport (CAS) ruling, which sided against Sun in favor of the World Anti-Doping Agency, the magazine reported.

In the course of my research into homosexuality in Chinese academia, I interviewed 40 gay male Chinese university teachers. Some of them had entered into “sham marriages” with unwitting heterosexual women, others were involved in so-called marriages of convenience with lesbian women, and at least one had chosen to quietly marry his partner overseas.

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