Links for Tuesday, October 26, 2021


Crypto VC firm gears up to invest while tech majors stay away
China’s ban on the mining, trading, and exchanging of cryptocurrency into fiat money can’t prevent some gray-area activities, as we wrote last week. Instead, its desire to eliminate crypto while protecting the underlying blockchain technology is producing divergent outcomes:

  • Crypto VC firm Sino Global Capital is doling out $200 million to support DeFi, NFTs, and other projects frowned upon by China — even though it’s based in Beijing.
  • Meanwhile, Alibaba and Tencent won’t use the term “NFT,” instead calling artwork and other creative assets sold on their NFT platforms “digital collectibles.”

Key question: China likes blockchain, but not crypto tokens; will that prove self-contradictory in the end?

  • After all, tokens, which store value, are the main reason people buy into blockchain technology in the first place — literally.
  • Even so, Beijing is hoping the doublethink will work. Alibaba and Tencent are trying to help clarify that distinction, issuing twin condemnations of illegal crypto trading and price speculation after their NFT rebrand.

The takeaway: Just like housing speculation, China isn’t a fan of the financial risks and price volatility associated with crypto investing. But as long as legal lines remain blurry, crypto is likely to remain in play, especially on DeFi exchanges.

Additional business and technology links:

Insurers discouraged from risk taking
China tightens online insurance rules in widened crackdown / Bloomberg (paywall)
U.S.-listed Waterdrop is among the companies targeted by Beijing’s latest crackdown, which limits online insurers’ ability to run up debt.

Quarterly earnings looking gloomy
China earnings to lose steam on brutal quarter for biggest firms / Bloomberg (paywall)
Only raw materials suppliers were spared a rough Q3, with manufacturing, consumer, property, and energy sectors down big.

Yet another tech unicorn
Harvard-trained designer creates China business software unicorn / Caixin (paywall)
Enterprise software is the new big thing in Chinese venture capital. Tezign’s platform matching creatives with companies looking for marketing and design help just earned it unicorn status.

Does Xinjiang’s solar boom depend on rare earths in the U.S.?
A rare form of quartz is key to Xinjiang’s solar boom, and almost all of it is in the U.S. / SCMP (paywall)
“The region has almost everything it needs to do the job as fast and as cheaply as possible, from mines to factories to labour – except for one crucial raw material that exists in just a handful of places on Earth. And almost all of that raw material, industry experts say, happens to be sitting in the United States.”
Read more from SupChina here: The Rare Earth Myth.

China urges “equal treatment” for foreign firms
China reminds local governments it’s illegal to discriminate against foreign companies / Caixin (paywall)
“Foreign-invested companies registered in China must receive equal treatment in government procurement with domestic firms and must not be discriminated against, the Ministry of Finance said, reiterating terms laid out in the Foreign Investment Law.”

Efforts to tame coal prices
China plans limits on coal prices in fix for energy crisis / Bloomberg (paywall)
“China is considering setting new limits on movements in coal prices that could help ease the nation’s energy crisis, though would threaten to curb profits in the sector.”
China NDRC studying mechanism to stabilise coal prices over long-run / Reuters
China plans new coal price mechanism to keep costs down amid energy crisis / Caixin (paywall)
China’s ying and yang battle as Beijing faces tough economic choices / SCMP (paywall)
By Zhou Xin: “China wants its economic growth to decelerate and it wants to cut carbon emissions, but the slowdown cannot be too fast and coal must remain affordable. These seemingly contracting goals present a problem for Beijing as it treads the fine line between suffering short-term pain to ensure its long-term success.”

Steel output lower than last year’s
China’s steel industry on track to churn out less this year than in 2020 / Caixin (paywall)
“The average daily output of crude steel was down 21.2% year-on-year in September at around 2.5 million tons, National Bureau of Statistics figures indicated.”

China’s growth gets cut, again
China’s growth forecasts cut as property, power cuts take toll / Bloomberg (paywall)
“Economists have again lowered their economic growth forecasts for China over the coming year amid power shortages and a worsening property market downturn, a Bloomberg survey shows.”

Walmart denies “anti-competitive conduct” for Chinese suppliers
Walmart denies pressuring its Chinese suppliers into forced exclusivity / Caixin (paywall)
“Walmart Inc.’s members-only chain in China has denied claims of anti-competitive conduct, saying an internal investigation found it had not barred its suppliers from working with other similar stores, a practice rife in Chinese retail that has come under increasing regulatory ire since last year.”

Which firms will win under Xi’s “common prosperity”?
Xiaomi among Goldman’s winning picks from Xi’s common prosperity / Bloomberg (paywall)
“Goldman Sachs Group Inc. has spotlighted 50 China stocks that could benefit from President Xi Jinping’s ‘common prosperity’ efforts.”
“Companies connected to themes such as manufacturing upgrading, green energy, state-owned enterprise reforms and mass consumption can benefit from Xi’s ambitions.”

Western banks stay bullish on China, but what about the rest of the people?
HSBC joins investors reckoning worst is over in China / Reuters
“Analysts at Europe’s biggest bank HSBC have turned bullish on Chinese stocks, arguing the worst of a regulatory storm has passed and that Beijing will provide policy support to arrest slowing growth.”
As Wall Street stays bullish on China, the challenge is selling it to U.S. middle and working class / SCMP (paywall)
“Goldman Sachs and BlackRock are among Wall Street mainstays rushing to buy up Chinese equity as limits are lifted and direct lines to Beijing opened up. But with economic ties sidelined by geopolitical and ideological rivalry, China needs to win over not just businesses but American hearts and minds as well.”

Kuaishou surges
TikTok rival Kuaishou bounces back in blistering week-long rally / Bloomberg (paywall)
“Kuaishou Technology, the TikTok rival that runs a video streaming app on the mainland, has surged about four times more than the Hang Seng Tech Index since Oct. 18.”

Jack Ma looks to agriculture tech in the Netherlands
Jack Ma visits Dutch research institutes as Alibaba’s founder pursues post-retirement passion in agriculture technology / SCMP (paywall)
“Jack Ma, the founder of the world’s largest e-commerce platform Alibaba Group Holding, is visiting research institutions in the Netherlands to further his interest in the technology of agriculture, according to people familiar with his first overseas trip in more than a year.”

Tutoring suffers a 60% drop
Tutoring institution numbers drop in Chinese cities piloting reform / Caixin (paywall)
“In Beijing, tutoring institutions of all kinds have suffered a 60% drop in their numbers since July, when the central government launched its ‘double reduction’ policy, which aims to take some of the stress off overburdened elementary and middle school students by reducing the amount of homework and after-school tutoring they have to do.”
China’s largest private education company cuts services for youngsters amid tutoring reforms / SCMP (paywall)

Seagate “violated” U.S. export rules via disk drives to Huawei, say Republicans
Seagate broke export curbs by supplying Huawei, Senate Republicans say / WSJ (paywall)
“A major U.S. data-storage equipment provider violated U.S. export rules by continuing to sell hard-disk drives to Huawei Technologies Co. after the Commerce Department tightened export restrictions last year, a report by a group of Senate Republicans alleged.”

How injured gig workers get the short end of the legal stick
Why China’s injured gig workers often lose out in court / Caixin (paywall)
“Liu Jiwei, one of millions of drivers working for the ride-hailing company [Didi], died suddenly on Feb. 16, 2019, in his work-registered car. Despite two years of effort, his family has struggled to prove Liu had established a formal labor relationship with Didi or to receive compensation for his death.”

Efforts to fight the chip shortage
SMIC’s new Shenzhen semiconductor plant offers glimpse at China’s effort to fight global chip shortage / SCMP (paywall)
“The document, which was published last week, offers a glimpse at a key project in China’s effort to boost local semiconductor production to address the ongoing global chip shortage.”

Xpeng’s flying car
Xpeng unveils plan for $150,000 flying car / Caixin (paywall)
“China’s Tesla challenger Xpeng Inc. has unveiled plans for its sixth-generation electric vertical take-off and landing (eVTOL) vehicle, capable of running on roads and flying at low altitude — but while the design may turn heads, analysts say its din could create turbulence.”

Suning weighs Carrefour China majority stake sale said to mull sale of Carrefour China majority stake / Bloomberg (paywall)

Hong Kong rebuffs global banks, stands firm on zero-COVID
Hong Kong rejects plea from global banks to scrap zero-COVID / Bloomberg (paywall)

Three Gorges, SPIC bid for China wind asset
Three Gorges is among bidders for $1 billion China wind asset / Bloomberg (paywall)


Eve of Glasgow summit: Global climate plans “fall short,” says UN, as countries take stock
There’s a vast ‘emissions gap’ between a safe world and the one we’re in, UN says / Bloomberg (paywall)
U.N. warns world set for 2.7C rise on today’s emissions pledges / Reuters
Latest national climate plans still fall far short, U.N. report warns / NYT (paywall)
“China, the world’s largest emitter of greenhouse gases, remains a wild card.”
EU wants clarity from China on its emissions-cutting ambitions / Bloomberg (paywall)
COP26: How every country’s emissions and climate pledges compare / FT (paywall)
China, the world, and the mantle of ‘green leadership’ / Sixth Tone

More on China’s carbon-neutral road map
China’s climate road map outlines plan to cap emissions by 2030 / Bloomberg (paywall)
“China has released its official road map for capping carbon emissions before 2030, delivering details on the country’s climate push that have been eagerly awaited by environmentalists and captains of industry alike.”
How China plans to become carbon-neutral by 2060 / Bloomberg (paywall)
Careful planning to reduce risks for China on road to carbon net zero / SCMP (paywall)
China’s energy crisis complicates its plans for climate announcements ahead of COP26 / WSJ (paywall)
“The scramble by Chinese leaders to address the crisis over the past month coincided with Beijing’s preparations for a United Nations climate summit in Glasgow, highlighting China’s challenge balancing international pressure to speed up its shift away from fossil fuels and the need to keep the supply of energy stable at home.”
Will Xi show at COP26? Probably not / Reuters

Quantum supercomputers
China launches world’s fastest programmable quantum computers / SCMP (paywall)
“Researchers say their supercomputer is 1 million times more powerful than its nearest competitor, Google’s Sycamore.”

Is China’s high-speed rail actually green?
China’s vast high-speed rail is a big emitter but down the line leads to greener freight: study / SCMP (paywall)
“China’s rapid expansion of high-speed rail has indirectly cut greenhouse gas emissions by creating capacity for freight on conventional trains, according to a new study.”

WHO approves China’s Innovax HPV shot
WHO clears HPV shot from China’s Innovax to ease global shortage / Bloomberg (paywall)
“The [WHO] approved a cervical cancer vaccine from China’s Beijing Wantai Biological Pharmacy Enterprise Co., broadening access in developing countries to a scarce shot that prevents one of the most common causes of cancer.”

China tightens up restrictions as COVID-19 outbreak persists
China locks down a northwestern city to subdue a small outbreak. / NYT (paywall)
China locks down city of 4m people after six COVID cases detected / Guardian
China giving COVID shots to three-year-olds as outbreak persists / Bloomberg (paywall)
Beijing Marathon postponed indefinitely due to COVID-19 / Reuters

Strict COVID-19 measures at the Beijing Olympics
Beijing Olympics will require vaccine or 21-day quarantine / WSJ (paywall)
“The Winter Games will be held in a closed loop, organizers say, strictly limiting participants’ movement, with daily testing and mask requirements also in place.”

China’s anti-vaxxers
Why China’s COVID-19 anti-vaxxers are happy to take their chances / SCMP (paywall)
“But for vaccine doubters such as Xu, no prize or lottery is attractive enough, nor is any appeal or explanation from public health experts convincing. Sporadic outbreaks have not swayed them, either.”

Risk of variants in rising human bird flu cases
Rise in human bird flu cases in China shows risk of fast-changing variants: experts / Reuters
“A jump in the number of people in China infected with bird flu this year is raising concern among experts, who say a previously circulating strain appears to have changed and may be more infectious to people.”

Despite global pleas, Hong Kong ramps up COVID-19 rules
Hong Kong tightens quarantine rules in bid to open to China / Bloomberg (paywall)
“Hong Kong will soon end most of the quarantine exemptions for overseas and mainland travelers, with the city under pressure from officials in Beijing to tighten up what is already one of the world’s strictest COVID-19 containment regimes.”
Hong Kong to tighten COVID-19 rules, hopes China reopens / AP


Canceled event for German book on Xí Jìnpíng 习近平
China blamed for cancellation of events for German book on Xi Jinping / FT (paywall)
“Critics of China have reacted angrily at the cancellation of events to mark the publication of a new German book about [General Secretary] Xí Jìnpíng 习近平 at the apparent behest of Chinese diplomats.”

Taiwan-Europe diplomacy
Taiwan gains favor in Europe’s east, angering China / WSJ (paywall)
“Disappointment over a lack of major Chinese investments has left some capitals feeling they have little to lose by deepening ties with Taipei.”
European lawmakers to visit Taiwan next week to meet with Taipei officials / SCMP (paywall)
“In a move sure to provoke Beijing, a delegation from the European Parliament will travel to Taiwan next week, as lawmakers push for closer ties with Taipei.”

More legal risks for Hong Kong journalists
Hong Kong’s new rules on accessing gov’t records put journalists at ‘unnecessary’ risk, press group says / HKFP
“Journalists in Hong Kong may face ‘unnecessary legal risks’ when searching for government records, a local press union has warned, after two registries announced new rules tightening public access to step up the protection of personal data privacy.”

Pakistan, China voice support to Afghanistan’s Taliban
China vows to help Taliban ‘rebuild the country’ in Doha meeting / Bloomberg (paywall)
“China pledged to help the Taliban ‘rebuild the country’ while reiterating calls for the U.S. to lift sanctions against the new leaders of Afghanistan as the economy worsens.”
Pakistan, China urge world to send humanitarian aid to Kabul / AP
“In a rare joint appeal, the leaders of Pakistan and China on Tuesday urged the international community to swiftly send humanitarian and economic aid to Afghanistan, where people are facing food and medicine shortages in the shadow of winter.”

China and France speak for the first time since AUKUS
Xi Jinping and Emmanuel Macron speak for first time since AUKUS alliance was announced / SCMP (paywall)
“[General Secretary] Xí Jìnpíng 习近平 told his French counterpart Emmanuel Macron on Tuesday that the European Union should maintain its autonomy in foreign policy, in their first phone conversation since the formation of a defence alliance between the U.S., Britain and Australia.”

Top U.S.-China officials talk
China and U.S. have ‘candid’ talks on issues of concern / Bloomberg (paywall)
“China described the conversation as ‘pragmatic, candid and constructive’ in a statement Tuesday in Beijing, saying the two sides agreed that it’s important to strengthen communication and coordination of macroeconomic policies as the world’s recovery faces a critical moment.”
China’s Vice Premier Liu He speaks with U.S. Treasury Secretary Yellen / Reuters

Xi calls to beef up military
China’s Xi calls for new progress in military equipment, weapons / Reuters
“China’s President Xi Jinping called for efforts to ‘break new ground’ in military equipment and weapons development for the People’s Liberation Army, China’s armed forces, according to a report from the official Xinhua media on Tuesday.”

How China controls its global image
‘We are so divided now’: how China controls thought and speech beyond its borders / Guardian
“Every arm of the PRC government has been called upon to join in the work of influencing opinions, stifling speech and controlling dissent within and beyond its borders.”
“Their activities, [the Freedom House] reports, are best understood as functions of the United Front Working Department (UFWD), a nebulous part of China’s bureaucracy that oversees all activities aimed at influencing groups not directly controlled by the CPC, inside China and out.”

China’s embassy in Sudan calls for caution after coup
Chinese-funded entities in Sudan urged to take precautions after coup / Caixin (paywall)
“The Chinese Embassy in Sudan has urged all Chinese-funded entities in the country to immediately make emergency safety provisions, gather staff members and temporarily suspend work following the military coup, according to state media.”

China urges cooperation with Japan, warns against crossing “sensitive line”
Foreign minister asks Tokyo to work with Beijing, but ‘don’t step out of line’ / SCMP (paywall)
“Japan should never try to cross a sensitive line with China but should instead work with Beijing to avoid outside interference to better manage disputes and rebuild mutual trust, the Chinese foreign minister said.”

Canadian court orders handwritten note with Meng Wanzhou’s passwords to be destroyed
Court orders Canadian police to destroy note with Meng Wanzhou’s phone passwords, return her devices / SCMP (paywall)
“A Canadian court has ordered federal police to destroy a handwritten note carrying the passwords to Huawei Technologies executive Meng Wanzhou’s phones.”

U.K. looks for new nuclear investors to counter China influence
U.K. to shut out China with revamped nuclear funding model / FT (paywall)
“Britain’s floundering nuclear energy programme is to be rebooted with a new funding model that allows costs to be front-loaded on to consumer bills, as ministers look to bring in new investors and shut out Chinese companies to replace its ageing nuclear facilities.”


Police search for a man who murdered seven in Wuhan
Police in Wuhan hunt for murderer after local official and 6 others killed in early hours / SCMP (paywall)
“Police are searching for the murderer of seven people, including a local official who was killed at his home, in Wuhan in central China in the early hours of Monday morning.”
Wuhan police search for man who killed 7, jumped off bridge / AP

Play dates for the elderly
China’s solution for loneliness: Play time for grown-ups / Sixth Tone
“Social isolation has become a serious issue affecting China’s 260 million seniors. Now, there’s a push to help them build new relationships — by organizing play dates.”

Northwest University gets flack for fundraising
Chinese university tries something controversial: Raising money / Sixth Tone
“While it’s not the first time a Chinese university has tried to raise money from alumni, the post provoked mockery online — Chinese universities have traditionally relied on the state for funding. The controversial call has since become a trending hashtag on Weibo with over 2 million views.”

Lying for public sympathy on social media
Blogger in China accused of inventing poor farm boy in video to build audience on social media / SCMP (paywall)
“A man in China is being questioned by police over a video allegedly showing a young boy being forced to work for neighbours to earn money to take care of his siblings after their parents died.”