BUSINESS AND TECHNOLOGY:
Factory prices fall amid weak demand
China’s factory deflation deepens as pandemic hits demand / Reuters
China’s factory prices fell at the sharpest rate in four years in April, highlighting weakening industrial demand in the world’s second-largest economy as the coronavirus pandemic slams global growth.
The producer price index (PPI) fell 3.1% from a year earlier, the National Bureau of Statistics said in a statement on Tuesday, compared with a 2.6% drop tipped by a Reuters poll of analysts and a 1.5% decline in March.
China economic data indicate v-shaped recovery is unlikely / WSJ (paywall)
“Factory-gate prices post steepest decline in four years for April as coronavirus pandemic shrank demand globally.”
Weak demand pushes down factory gate prices at fastest pace in four years / Caixin (paywall)
Luckin CEO dismissed after scandal
Luckin Coffee ousts CEO over accounts scandal / FT (paywall)
Jenny Zhiya Qian [Qián Zhìyà 钱治亚], who has run Luckin since November 2017, and Jian Liu [刘剑 Liú Jiàn], chief operating officer for the past two years, have been let go after the company said an internal investigation had uncovered more information about hundreds of millions of dollars worth of sham transactions.
Six other employees, who were involved in or had knowledge of the transactions in question, had been suspended or put on leave, Luckin said on Tuesday.
- Also see: Chinese customers divided over Luckin Coffee fraud scandal.
NBA still in the doghouse?
Naming native Chinese as NBA China boss ‘not enough’ to win mainland market back / Global Times
The National Basketball Association (NBA) has appointed a Chinese national as its China branch boss, but prominent commentators and fans noted if it wants to win its way back to the Chinese mainland market, it should properly handle Houston Rockets general manager Daryl Morey — who tweeted in support of Hong Kong rioters last year, leading to significant disappointment and a boycott by the Chinese public, including major broadcasting partners.
- For context, see SupChina’s archive of NBA-related stories.
Key foreign executives exempted from travel ban
China is exempting some foreign executives from travel ban / Bloomberg (porous paywall)
“The Ministry of Commerce told some key foreign companies they can apply for exemptions to the entry ban if they want to get executives back into China, the people said, asking not to be identified because the matter hasn’t been made public. They would still serve a mandatory quarantine, one of the people said.”
More U.S. items added to tariff exemption list
China releases new list for tariff exemption on U.S. goods / Bloomberg (porous paywall)
China will exempt additional tariffs on U.S. aircraft radar and some other radar equipment imposed during the trade dispute with U.S., State Council’s tariff office says Tuesday.
According to the new list on tariff exemption, 79 items including medical disinfectants, rare-earth ore, silver and gold ore and concentrate, some nickel, aluminum alloy products were added.
Tencent Music’s revenue grew in Q1…
Tencent Music reports moderate revenue growth in Q1 / Caixin
“Tencent Music Entertainment, a subsidiary of Chinese internet giant Tencent, reported an uptick in total revenue [by 10% to $891 million] but a fall in net profits in the first quarter of 2020, as the coronavirus pandemic impacted the company’s social entertainment services business.”
Tencent Music bets on China’s crowded audio content space / TechCrunch
In its newly released quarterly report, TME [Tencent Music Entertainment] said it has made “significant progress in expanding” its audio library by adding thousands of new adaptions from popular IP pieces and works from independent producers. IP is an edge that TME holds over its competitors, bolstered by a strategic partnership with China Literature, the country’s leading online publisher. TME’s foray intensifies competition in what is already a crowded space.
…As Tencent invests in Canadian coffee chain
Tencent fuels Canadian coffee chain Tim Hortons Chinese expansion / Caixin
Internet giant Tencent is delving into one of Canada’s more low-tech institutions by helping coffee chain Tim Hortons expand into the competitive Chinese market.
According to an announcement [in Chinese] published Tuesday on the microblogging site Weibo, Tim Hortons said it plans to use the fresh capital from China’s leading game company to upgrade its digital infrastructure and open more stores in the country, where coffee consumption still lags far behind that of North America and represents a big growth opportunity.
How Chinese companies sought to fill medical gear shortage
Chinese companies rush to exploit medical equipment shortages / FT (paywall)
Even before the coronavirus outbreak, Chinese medical equipment makers were growing rapidly. Medical device exports from the country more than doubled to $28.7 billion last year from a decade ago. But to meet the surge in demand this year, they began increasing production even more, filling the vacuum created as industry leaders such as Medtronic and GE struggled against production constraints.
Luxury businesses increasingly reliant on China
COVID-19 will make luxury retailers even more dependent on China / Quartz (porous paywall)
Annoushka looks to resume China growth as lockdown lifts / FT (paywall)
“Before the virus hit, the company’s two Wuhan concessions were the top performers of all its stores in mainland China, having opened in September last year… [British jeweler] Annoushka is expanding in mainland China in partnership with Jewelria, the multibrand retail platform of the Hong Kong jeweller Chow Tai Fook.”
Lifestyles of the rich and indebted billionaires
The billionaire poker club behind China’s most indebted developer / Bloomberg (porous paywall)
As billionaire Hui Ka Yan [Xǔ Jiāyìn 许家印] steers China’s most indebted real estate company through the worst economic slump in decades, he’s getting support from some familiar faces: his fellow property tycoons.
Hui’s China Evergrande Group has been increasing financial ties with real estate empires run by three other Chinese magnates, according to company filings and media reports. Known locally as the Big Two Club because of their fondness for a Chinese poker game of the same name, the group includes Chinese Estates Holdings Ltd.’s Joseph Lau [Liú Luánxióng 刘銮雄], New World Development Co. billionaire Henry Cheng and C C Land Holdings Ltd.’s Cheung Chung Kiu [Zhāng Sōngqiáo 张松桥].
Has a hair accessories company been using forced labor?
China products made with forced labor are now in U.S. customs’ crosshairs / China Law Blog
On May 1, U.S. Customs and Border Protection (CBP) announced it had issued a withhold release order (WRO) against hair products manufactured by a Xinjiang company called Hetian Haolin Hair Accessories Co. Ltd. (Haolin). The WRO was issued under the authority of 19 U.S.C. 1307, which prohibits importing merchandise produced by forced labor…
We are not privy to the specific information that supports the WRO against Haolin. However, if there is one place in the world at the moment where an allegation of forced labor pretty much always must be taken seriously, it is Xinjiang.
New energy vehicle sales fell in April
China’s Tesla wannabes risk running out of road in virus-stricken times / Reuters
“New energy vehicle (NEVs) sales fell for a tenth straight month in April, plummeting 43% from a year earlier in a market that has now got 50-or-so established start-ups competing with domestic giants like Geely, state-owned FAW Group, and foreign marques like Tesla Inc and Volkswagen AG.”
China’s promising software start-ups
Five startups bidding to be China’s SaaS stars / The Information (paywall)
The weekslong lockdown prompted by the coronavirus forced millions of people in China to work remotely in February, a first for many employers in the country, where it is unusual to operate entirely online. That has turbocharged the quest for investors to find promising homegrown enterprise software startups, especially in the category of software as a service, which many investors see as the sector’s future.
Zoom not China’s video conference app of choice
In China, Zoom no match for Alibaba’s videoconference app / Nikkei Asian Review (porous paywall)
“Chinese business professionals working from home have embraced videoconferencing apps produced by Alibaba Group Holding [DingTalk] and Tencent Holdings [Tencent Meeting], instead of Zoom, the favorite among U.S. users, in a trend that could create a compatibility issue in cross-border business talks.”
April smartphone shipments up 17%
Smartphone shipments in China up 17% in April, signalling likely rebound: government data / Reuters
SCIENCE, HEALTH, AND THE ENVIRONMENT:
Taiwan COVID-19 updates
Taiwan marks 30 days of no local cases / Taipei Times
No new COVID-19 cases in Taiwan for five straight days / Focus Taiwan
Metals giant called out for emissions fraud
China names and shames metals behemoth for environmental violations / Caixin (paywall)
Chinese authorities have published a litany of environmental violations by the state-owned metals and minerals behemoth China Minmetals Corp. and its subsidiaries, illustrating the ongoing challenges of pivoting the world’s second-largest economy onto a greener footing.
Minmetals failed to ensure environmental compliance at its affiliates and turned a blind eye to illegal pollution and emissions fraud over several years, according to a report (link in Chinese) published by the Ministry of Ecology and Environment (MEE) on Monday.
POLITICS AND CURRENT AFFAIRS:
Trump asks retirement fund not to invest in China
Trump asks board of federal retirement plan to not invest in China, setting up showdown / Washington Post (porous paywall)
“The Trump administration has asked the board that runs the retirement savings program for federal employees and military personnel to not allow funds to be invested in Chinese businesses, ratcheting up a dispute into a potential showdown over who ultimately runs the program.”
Context: Trump eyes federal retirement plan investments as part of showdown with China over coronavirus.
Trump tells Chinese-American journalist to “ask China” about COVID-19
Donald Trump tells Chinese-American reporter Weijia Jiang to ‘ask China’ about coronavirus, then abruptly ends press briefing / SCMP
U.S. President Donald Trump ended a White House press conference abruptly after a heated exchange with a reporter of Chinese descent, whom the president instructed to “ask China”…
“Why is this a global competition when, every day, Americans are still losing their lives?” [CBS News reporter Weijia Jiang] asked after Trump pointed out that the U.S. has done more coronavirus tests than any other country.
Will the phase one trade deal fall apart?
Trump ‘not interested’ in reopening U.S.-China trade deal after report of Beijing discontent / Reuters
U.S. President Donald Trump said on Monday he opposed renegotiating the U.S.-China “Phase 1” trade deal after a Chinese state-run newspaper reported some government advisers in Beijing were urging fresh talks and possibly invalidating the agreement…
The Global Times tabloid reported on Monday that unidentified advisers close to the talks have suggested that Chinese officials revive the possibility of invalidating the trade pact and negotiate a new one to tilt the scales more to the Chinese side.
- China steps up American soybean buying with million-ton purchase / Bloomberg (porous paywall)
China is stepping up purchases of soybeans from the U.S. as Brazilian sales start to wane and the Asian nation seeks to meet its pledges under the trade deal with Washington, according to people familiar with the matter.
State-run buyers have purchased more than 20 cargoes, or over 1 million metric tons, of American soybeans in the past two weeks, said the people, who asked not to be identified because the information is private.
U.S. professor arrested for concealing Chinese funding
Arkansas professor is accused of hiding Chinese funding / NYT (porous paywall)
The Justice Department accused a professor in Arkansas on Monday of improperly accepting funds from the Chinese government and has accepted a guilty plea in a similar case, the latest examples of the department’s effort to combat China’s influence in American academia.
One of the professors, Simon Ang of the University of Arkansas, was arrested on Friday and charged on Monday with wire fraud. He worked for and received funding from Chinese companies and from the Thousand Talents program, which awards grants to scientists to encourage relationships with the Chinese government, and he warned an associate to keep his affiliation with the program quiet, court papers said.
Scholar released after questioning
Chinese scholar Zhang Xuezhong returns home after questioning over call for political reform / SCMP
“Zhāng Xuězhōng 张雪忠, the constitutional scholar who was taken away on Sunday after posting an open letter calling for political reform in China, has been allowed to return home after questioning by the authorities, friends close to the scholar said.”
Xinjiang’s boarding preschools
Boarding preschools for Uyghur children ‘clearly a step towards a policy of assimilation’: expert / Radio Free Asia
Recently, an official notice circulated by the government education authority in the Xinjiang Uyghur Autonomous Region (XUAR), stating that all preschools in Hotan (in Chinese, Hetian) prefecture’s Qaraqash (Moyu) county are to be converted into boarding schools, has spread widely on WeChat and other social media platforms in China… The notice has prompted concerned discussion among Uyghur-language accounts and groups on social media, including Uyghurs in the diaspora.
Post-COVID-19 world order could exclude Beijing — Chinese experts
Why China could find itself short of friends in the post-coronavirus world / Inkstone
China could face isolation from the post-coronavirus global economic order, according to the man who helped secure its place in the World Trade Organization in 2001.
The warning by Lóng Yǒngtú 龙永图, the country’s former chief trade negotiator, adds to a chorus of influential domestic voices who are increasingly concerned about the country being frozen out in the fallout from the pandemic.
India’s new FDI rules target China
India may set 10% beneficial ownership cap for FDI flowing from 7 countries / Business Standard (India)
“India is likely to set a 10% ‘beneficial ownership’ cap for foreign direct investment (FDI) flowing from seven bordering countries including China. Beyond this, a government nod would be required for any investing entity or individual from these nations.”
China publishes report refuting U.S.’s COVID-19 “lies”
China refutes 24 ‘lies’ by U.S. politicians over coronavirus / Reuters
China has issued a lengthy rebuttal of what it said were 24 “preposterous allegations” by some leading U.S. politicians over its handling of the new coronavirus outbreak…
A 30-page, 11,000-word article posted on the ministry website [in Chinese] on Saturday night repeated and expanded on the refutations made during the [foreign ministry’s] press briefings, and began by invoking Abraham Lincoln, the 19th century U.S. president…
The article also cited media reports that said Americans had been infected with the virus before the first case was confirmed in Wuhan. There is no evidence to suggest that is the case.
PLA COVID-19 free, but modernization plans delayed
Coronavirus spares China’s armed forces but disrupts PLA modernization plans / SCMP
- People’s Liberation Army has officially recorded no infections but disease fears have delayed recruitment, training and operations.
- Analysts say SARS experience guided military’s prompt response, but combat effectiveness has been affected.
Op-eds: The problems with America’s “blame China” tendencies
Can the Democrats avoid Trump’s China trap? / NYT (porous paywall)
Rachel Esplin Odell and Stephen Wertheim write:
Democrats, and Republicans who truly put American security first, face a choice. Joe Biden in particular [porous paywall] will decide whether to lead his party into Mr. Trump’s trap or play a different game. Attempting to out-hawk far-right hawks failed Democrats in the war on terrorism, leaving Mr. Biden with the stain of having supported the Iraq war. More important, a bipartisan addiction to military action and fearmongering failed the country.
The folly of Trump’s blame-beijing coronavirus strategy / New Yorker (porous paywall)
Evan Osnos writes: “The relationship between the U.S. and China was already fragile; now the two countries are turning against each other in perilous ways.”
Zimbabwe attributes COVID-19 success to good China relations
Zimbabwe, with China’s help, better tackles pandemic / Anadolu Agency (Turkey)
The Zimbabwean government is managing the COVID-19 pandemic better than other regional countries owing to the assistance from China, according to officials.
“We have a good relationship with China and the moment we heard about the pandemic, we started monitoring closely.
“We got medical expert advise and some Chinese handbook, that’s why we seem to be doing better than other regional countries,” Deputy Health Minister Dr. John Mangwiro said.
Former Shaanxi chief’s corruption trial begins
Key figure in China luxury villa corruption scandal goes on trial, accused of taking tens of millions of U.S. dollars in bribes / SCMP
“Zhào Zhēngyǒng 赵正永, the former party chief of Shaanxi Province, went on trial in the northern municipality of Tianjin.”
SOCIETY AND CULTURE:
Comedian blasted for giving son husband’s surname
Papi Jiang receives online backlash for giving son her husband’s surname / What’s on Weibo
“An independent woman such as self-made superstar Papi Jiang [papi酱, jiàng] should not have given her child her husband’s last name, Chinese self-proclaimed feminists say. The issue became top trending on Weibo this week.”
Teachers urged not to overload students
China bans teachers from pushing young children to learn ahead of curriculum / SCMP
China’s education ministry has renewed its push to reduce the academic burden on the country’s schoolchildren as they return to class after the coronavirus lockdown.
Primary and middle schools have been issued with a detailed list of what not to teach, in the latest effort to stop the widespread practice of getting young children ahead of the curriculum in the hope of giving them a head start in the all-important National Higher Education Entrance Examination, or gaokao [gāokǎo 高考].
See old Beijing in color
Colorized footage of life in Beijing a century ago / Shanghaiist
“The netizen…colorized 10 minutes of historical footage filmed in Beijing in the early 20th century. The clips showcase various aspects of daily life in the Chinese capital including vendors selling their wares and rickshaw drivers running through heavy traffic.”
AI brings color to 100-year-old video of old Beijing / Abacus
“About 100 years ago, a Canadian photographer wandered around Beijing to record life in China’s capital city.”
See the colorized footage here on YouTube.