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| Jim Rogers |
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| Ian Johnson |
Today, though the state no longer adopts the utopianism of a Buddhist religious state, it does have a similarly coercive, assimilationist policy toward its ethnic minorities. When the ethnic Chinese Communist Party took over in 1949, it copied the Stalinist policy of creating nationalities. Fifty-six were identified, including Chinese, Mongolians, and Uighurs, each officially celebrated as comprising a mosaic of groups that formed the People’s Republic.
As in imperial times, this policy was less tolerant than it seemed. In the Mao era, all minorities were supposed to meld into a great Communist brotherhood. In the reform era from the late 1970s to about 2010, development was meant to eradicate all differences, with ethnic groups pursuing money instead of their own cultures.
More recently, the state has taken a more overt policy of Han Chinese chauvinism. Thus the state produces strange statements, such as celebrating Chinese myths, such as declaring the Yellow Emperor the “founder of the Chinese nation,” when, in fact, the nation of China is made up of multiple ethnicities, most of which have no link to the Yellow Emperor. It has also taken steps to reduce Islam’s (and Christianity’s) visibility in China by tearing down churches and mosques—while promoting what it sees as indigenous religions: Buddhism, Taoism, and folk religion.
This prejudicial policy is a leading reason for Xinjiang’s suffering. While cloaked in the war on terrorism, many of the state’s actions are aimed at Islam itself. Shops in Xinjiang have been forced to sell alcohol and tobacco, while university students have been forbidden to fast during Ramadan. Women with veils and men with beards have been systematically barred from some local public transportation.
This has culminated in the reintroduction of a Mao-era measure: re-education camps. Then, the idea was to punish people who had the wrong class background; now, it is Muslims who have not assimilated enough. At first, reports of this seemed like a rumor, perhaps an exaggeration—something that seemed an impossibility in the twenty-first century. Recently, though, the state has admitted they exist, saying they are needed to control extremism.
Over the past four years, the Communist Party has also sent one million ethnic Chinese members to live among Uighurs to teach them the joys of secular life. As the anthropologist Darren Byler described in an extensive exposé on the Asia Society’s ChinaFile website, this involves keeping an eye out for what the state sees as extremist behavior, such as Uighurs’ not watching state-run television or having religious devotional materials hanging from their walls. At first, this seemed to many like another can’t-be-true moment, but Chinese state media has since confirmed it.
In recent months, there are signs that the campaign has moved beyond Xinjiang to the Hui Muslims, the descendants of the first Muslims, who are centered in Ningxia province but also live scattered across China. In Ningxia, Islamic domes and signs in Arabic are being pulled down, while the call to prayer has been banned.
It would be tempting to say that all of this is just typical Communist excess, something in the party’s DNA that forces it to turn to repression and violence to solve problems. But the long history of Islam’s persecution points to older, deeper problems in the Chinese worldview.
Most worrisome, it is these very traditions that the state is promoting as a way to bolster its legitimacy, instead of building a pluralistic society open to different faiths, beliefs, and convictions.More at the New York Reviews of books.
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| Ben Cavender |
“The consumer is more selfish right now in feeling that China has a rich history and culture and is now a world power — that we know we are your most important customer base and you need to respect them,” said Ben Cavender, a senior analyst at China Market Research, a consultancy based in Shanghai. According to the Boston Consulting Group, Chinese consumers are currently responsible for 32 percent of luxury goods sales worldwide, a number expected to grow to 40 percent by 2024, at which point the Chinese will drive 75 percent of the growth of the global market...
Chinese state media also sought to limit the fallout. Hu Xijin, the editor in chief of the Global Times, called on consumers to be “more open-minded.”
“Dolce & Gabbana was undoubtedly wrong, but sins do not equate to death,” Mr. Hu wrote on Friday on his Weibo account.
More at the New York Times.Mr. Cavender, the analyst, was not so sure. “The reality is this is probably going to kill growth for them,” he said. The last time a consumer boycott erupted on this scale in China was in 2017 over South Korea’s embrace of an American missile defense system that China feared could be used to spy on its territory. Back then, protesters besieged branches of Lotte Mart, a South Korean supermarket chain. This year, it closed all of its stores in China.
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| Ian Johnson |
With roughly 70 percent of airspace controlled by the military (versus 20 percent in the United States), commercial aircraft flying in China are limited to narrow tunnels in the sky. This restricts options for departure and arrival routing, cutting the number of takeoffs and landings that airports can handle.
Beijing Capital, for example, was the world’s second-busiest airport based on passenger volume in 2017, but it ranked fifth based on takeoffs and landings, nearly a third fewer than the world leader, Hartsfield-Jackson Atlanta International Airport.
The lack of airspace is also a key reason delays are so common in China. Last year, flight delays increased 50 percent, with only 71 percent of flights taking off on time, according to government statistics. That’s helped push Chinese airlines to the bottom of punctuality rankings, with one study ranking three Chinese airlines as the worst among 20 large-scale carriers.
Although aviation authorities blame the weather for half of the delays, Mr. Guo of Q&A Consulting said the underlying cause was the military-induced lack of airspace.
When a corridor is blocked by a thunderstorm, for example, Chinese flight controllers often cannot reroute an airplane, because it would have to enter military airspace. That causes planes to sit on the ground or fly holding patterns when in other countries they could land or take off.
“The congestion takes place in the sky because the military only allows for a certain number of tunnels,” Mr. Guo said. “If that doesn’t change, the ground infrastructure needs to be expanded.”
The new airport will help by initially opening four, then up to eight, new runways in the suburb of Daxing, 41 miles southwest of Beijing Capital. The number of air corridors available for civilian use stays the same, but the new runways will provide airlines with more ways to gain access to this limited airspace, allowing the Beijing area to facilitate more flights.More at the New York Times.
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| Sara Hsu |
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| Andy Mok |
This year's event in China has been rechristened as the 11.11 Global Shopping Festival. While superficially it appears similar to Black Friday, underneath the hood it is quite different and the implications for the future of retail are profound.
The goal of Black Friday is quite simple: move merchandise so American retailers can book more sales. However, while 11.11 started with the same goal it has since evolved to achieve much more sophisticated objectives. According to Daniel Zhang, Alibaba CEO, the company's goal is not to dominate e-commerce but achieve the complete digitization of retail, both online and offline, which it dubs “New Retail.”
Rather than just boost sales by offering extreme deals, brands participating in 11.11 now see it as a way to acquire new customers and strengthen customer engagement. One way brands do this is by promoting limited edition products instead of big discounts with 180,000 brands from inside and outside China participating.
As part of its New Retail vision Alibaba has launched a business like Hema, an integrated retail experience combining a brick and mortar supermarket, restaurant and distribution center that delivers within a three-kilometer radius, and an automobile vending machine concept that allows prospective buyers to try out new cars before ever interacting with a salesperson.
According to Zhang, 11.11 has now become an important platform for showcasing these emerging capabilities for new retail. Also, this edition of 11.11 includes 200,000 mom-and-pop stores powered by Alibaba's Ling Shou Tong to provide online sales promotions and augmented reality-based red packets that offer discounts at 3,000 “Tmall Corner Stores.” Furthermore, through Lazada, its Southeast Asian affiliate, Alibaba hosted its 11.11 Shopping Festival across Singapore, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam.
More at the CGTN.As the above examples show, 11.11 has evolved to be much more than just a shopping day and is now a key component of how a Chinese company is leading the way in creating the future of global retail. Perhaps before too long, we will see Amazon and others adopting similar approaches to keep pace and Black Friday and Cyber Monday may start exhibiting Chinese characteristics.
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| Arthur Kroeber |
ARTHUR KROEBER: I think people in the U.S. government are just, like, fed up with all of the WTO commitments that China made and then essentially evaded where they promised to do this, that and the other thing, and then basically did nothing.
SCHMITZ: Arthur Kroeber is author of "China's Economy: What Everyone Needs To Know." He says he's not holding out hope for a deal between the U.S. and China anytime soon.
KROEBER: There's a very strong feeling, I think, throughout many aspects of the U.S. government that China is not a trustworthy interlocutor. They've made commitments that are not meaningful and that they don't follow through on and that it is just not worth having more conversations.
SCHMITZ: Kroeber calls the notion that Trump and Xi will reach a breakthrough at the G-20 a big nothing burger, and he expects U.S. tariffs on Chinese imports to increase from 10 percent to 25 percent on the rst day of 2019 as scheduled. Time is running out for negotiations between the two sides. China's lead trade negotiator, Liu He, has just announced he'll visit Germany in the days leading up to the G-20, making it increasingly likely the U.S. and China will not be negotiating a deal anytime soon.More at NPR.
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| Shaun Rein |
The Italian luxury fashion house apologized and said both accounts had been hacked. "We have nothing but respect for China and the people of China," it wrote.
The apology was too late to save a major extravaganza in Shanghai that Dolce&Gabbana had billed as one of its biggest shows ever outside of Italy.
Major Chinese celebrities threatened to boycott the event, which had been scheduled for Wednesday night, and the company finally called it off. Actress Zhang Ziyi, who starred in "Crouching Tiger, Hidden Dragon," said that the Italian brand had "disgraced itself." An analyst said the bad publicity will have a lasting effect.
"It's the kiss of death for Dolce&Gabbana," said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. "I expect them to have a real tough time over the next six to 12 months."
The three promotional videos that led to the Instagram fiasco showed a Chinese woman using chopsticks to eat pizza and other Italian food. Many in China called them racist and full of outdated stereotypes. The videos were previously deleted from the company's account on Weibo, a Chinese version of Twitter.
Rein said it's a big mistake when westerners come up with creative content but don't understand how the campaigns will be received by Chinese consumers.
He noted a trend of rising nationalism in China. "So if you, as a western brand, do anything that looks like you are mocking or making fun of Chinese culture, that's a big no-no," he said.More at AP.
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| Rupert Hoogewerf |
The number of ultra-high net-worth families in Greater China—those with at least US$30 million—reached 88,800 in 2017, rising 12.5% year-over-year, according to a Hurun Wealth Report released Tuesday. Beijing has 13,500 ultra wealthy families, the highest concentration in the region including China’s mainland, Taiwan, Hong Kong, and Macau. Compared to last year, the number in Beijing increased 19.5% or 2,200 families.
Shanghai placed second, with 12,000 families worth more than US$30 million, a number that increased 16.5%. It’s followed by Hong Kong, which has 8,500 ultra-wealthy families, increasing 6.3%.
The wealth increase is largely attributable to China’s economic growth and bull market throughout 2017, the report said. Last year, China’s GDP increased 6.9%, while both Shanghai and Shenzhen stock markets were up around 7%. The Hang Seng Index, the major stock market barometer in Hong Kong, soared 36%.
However, growth is expected to slow down in 2018, impacted by a potential U.S.-China trade war and a slumping stock market, the report said.
“The number of high-net-worth families grew at a lower pace in 2017 than the prior year,” says Rupert Hoogewerf, the Hurun Report’s chairman and chief researcher. “The potential U.S.-China trade war will certainly impact the wealth creation in 2018.”
The tension has already caused stock markets in Greater China to tumble. By early November, the Hang Seng Index fell more than 10%, the Shanghai Stock Exchange Composite Index and Shenzhen Component Index fell 20% and 30% respectively over the same period of time, according to the report.
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| Ashley Dudarenok |
Brands are starting to reap more success from working with self-made bloggers, converting their own fan numbers into influence with brands.
For instance, counting on her over 3 million followers on Weibo and 4.5 million fans on WeChat, Fan Yimin, who is better known by her online avatar Becky Li, helped sell 100 Mini Cooper Countryman cars within five minutes via her WeChat post last year.
She is a role model to a generation of digital natives who have established viable careers as social media "influencers", and found fame and fortune solely by posting blogs and sharing their preferences online.
The power of word of mouth is one important reason for blogger success from the cultural perspective, according to Ashley Galina Dudarenok, founder of social media agency Alarice and a veteran social media expert.
More at the China Daily."Chinese customers have very deep trust in key opinion leaders (or KOLs) and this psychological bond can be partially explained by the pseudo-intimacy created by social media," she said. "Social media make you feel like influencers are friends as you know who they are in real life, thanks to the details of their daily lives shared through Weibo, WeChat and live streaming apps."
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| Matthew Brennan |
Tencent claimed to offer more than 200+ cloud products and 70 industry solutions and also claimed leadership in cloud services for gaming and live broadcast. They noted making progress in the finance and retail sectors something that makes sense given the recent announcements of partnerships to provide digitalization services with brands such as Shangri-la hotels and Walmart.
We also heard higher management elaborate further on their ‘industrial internet’ strategy. President Martin Lau had this to say during the Q&A session:
“The initial opportunity (for industrial internet) is based around the cloud business. The nature of the cloud business is that it does require quite a bit of capital expenditure. We need to build the IDC (Internet Data Centers) and buy the servers. This business is low margin because it’s only staying at the infrastructure level. We look at it as a long-term investment for the future.”
Opportunities will arise when we move from Iaas (infrastructure as a service) to Paas (platform as a service) and Saas (software as a service), then we can actually start generating high margin revenue. We can also have new value-added services built out from our connection with the industries. If we could establish a CRM or OEMs to reach customers then there will be associated marketing revenue and VAS.
In the beginning, nobody really generated any revenue from the consumer internet. We start from providing product that we know will generate value for the user. Over time we start to develop different kinds of business model from that valuable service. For the industrial internet it’s the same philosophy. We see that we can actually add value to a particular industry to the partners that we sign up and we know that by bringing technology and ways for them to connect with users we can create value for the users and the industry partners.”
This last part makes a lot of sense. Tencent higher management have made it clear they are very willing to move into new areas where the business models aren’t initially clear.
“Monetization can come in unexpected ways, we don’t know what innovations will happen in the future.” one Tencent exec described during a lecture I attended earlier this year.
Perhaps that’s the luxury of working in the internet sector where marginal costs are almost zero, any kind of monetization across hundreds of millions of users can work out to be highly profitable.
It also seems that Tencent is looking at this shift as something that will play out over a very long time horizon, perhaps a decade or more. I found it interesting that despite the narrative in media that Tencent is cost cutting, staff headcount increased by 8% in the last quarter, the fastest rate in 2 years. CFO John Lo attributed mainly to hiring for the areas of Payment and Cloud. So beyond the recent restructuring, Tencent is also rapidly increasing human resource capacity in “industrial internet” related areas.More at the China Channel.
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| Zhang Lijia |
The Singles’ Day shopping bonanza means also over one billion packages flying across the globe. Millions of packages add up to tonnes of cardboard, plastic, tape and bubble wrap. Along with impressive sales figures, Singles’ Day has also become to signify a huge amount of waste.
Last year Singles’ Day sales resulted in an estimated 300 000 tonnes of unrecycled packaging waste in China. Recently many have started to voice concern over the impact of the one-day shopping spree on the environment. One of those uneasy about the blatant commercialism is the author and journalist Lijia Zhang.
“Online shopping has really caught on in China in a big way,” Zhang says. “The Chinese Government has realized the problems for the environment and has set a body to oversee the environmental impact of logistics companies. But many ordinary people don’t know or care about the disastrous result this shopping festival has on the environment.”More at Upm Pulp.
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| Shaun Rein |
State broadcaster CCTV aired video of uniformed inspectors at an unidentified hotel flashing their ID cards and holding a drinking glass up to the light to inspect it.
Hidden-camera videos of housekeeping staff behaving badly at Chinese luxury hotels surface on social media every six months or so, according to Shaun Rein, founder of China Market Research Group in Shanghai. Worker shortages and low pay make it hard for hotels to pressure employees to follow the rules, as they can just quit and find jobs elsewhere. “They don’t get very good workers and people don’t stay very long,” Rein said. “I shudder to think what the three-star hotels are like.”More at the Bangkok Post.
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| Ben Cavender |
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| Rupert Hoogewerf |
“China accounts for 60 percent of the world’s most successful female entrepreneurs, while Chinese women make up one-fifth of the world’s female population,” said Rupert Hoogewerf, chairman and chief researcher at Hurun Report. Hoogewerf speculates that the combination of reform and opening-up, as well as entrepreneurships of Chinese women could be the reason.
The list evaluates the female entrepreneurs’ personal wealth, without the inclusion of family wealth or inheritance. The main sources of wealth of the women on this list are real estate and manufacturing.
Hoogewerf observes that the origins of wealth tend to be the same for both men and women. ”The big gap is in the IT-industry,” he adds.
First on the list is the vice-chairwoman of Country Garden Holdings, Yang Huiyan. Yang has topped the list for six consecutive years with a personal wealth of 150 billion yuan ($21.7 billion). The 37 year old’s wealth has shrunk by more than 10 billion yuan compared to last year but she still retains the title of being the richest woman in China.
Yang is followed by the chairwoman of Longfor Properties, Wu Yajun with a personal wealth of 58.5 billion yuan. Wu held the title of China’s richest woman in 2012 , only to be surpassed by Yang the following year. Third on the list is Chen Li Hua, chairwoman of Fu Wah International Group, with a personal wealth of 50.5 billion yuan.
The average wealth of the top 50 Chinese entrepreneurs fell by 7.8 percent from last year to 21.3 billion yuan, but this is still four times higher than a decade ago.
Gender gap exists even among the richest people. “The average wealth of the top 50 women entrepreneurs is 30 percent of the top 50 male entrepreneurs.” Hoogewerf says.More at the Pandaily.
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| Ashley Dudarenok |
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| Kaiser Kuo |
Kaiser Kuo, a co-founder of Tang Dynasty, tells Sixth Tone that drawing on Chinese culture can help bands stand out from the rest. “It’s an obvious touchstone for a musical genre that’s aggressive and quite martial,” says Kuo over email. Western metal bands have long drawn from Western legends, and Chinese artists have plenty of their own material to do the same, he says, pointing to the hero-filled epic “Romance of the Three Kingdoms” or Louis Cha’s martial arts novels as examples.
But it can be hard to incorporate Chinese musical influences without sounding monotonous or tacky, says Kuo. What’s more, metal bands with Chinese characteristics can face criticism from Chinese metalheads who suspect the musicians do so just to win over foreign audiences, even though — as Kuo notes — that’s not the only way to gain success. This summer, Beijing metal band Die From Sorrow won the battle of the bands at Wacken, Germany — the biggest metal festival in the world — without any traditional Chinese elements. “Without naming names, I’ve certainly seen some bad efforts to incorporate recognizably Chinese elements … that I suspect had no commitment to it and were clearly doing it in the mistaken belief that it would be a marketing plus,” says Kuo.More in Sixth Tone.
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| Victor Shih |
, at CapitalWatch.Meanwhile, the famed trade surplus the export powerhouse ran with the rest of the world has been shrinking.
Victor Shih, an associate professor of political economy at the University of California, San Diego, says currency devaluation could be an attractive option for China to offset the impact of the trade war. But he warned the tactic had limits, as it "could create a panic on the renminbi which becomes difficult to control."...
U.S. President Donald Trump has announced tariffs on about half of China's roughly $500 billion of annual exports to the United States in a tit-for-tat trade war, and has threatened to broaden those penalties.
Analysts say the trade spat could lead to heavier pressure on the yuan if China's trade surplus shrinks and gloomy economic prospects deter multinational investments in the country.
Shih estimates that even a modest 20 percent reduction in exports to the United States could cause the monthly trade surplus to drop by $8 billion to $10 billion, nearly a third of the average. In addition, a reduction in foreign direct investment, which brought $136 billion into China last year, would also reduce forex inflows substantially, he added...
The most recent data from the State Administration of Foreign Exchange (SAFE) shows that China had total foreign liabilities of $5.3 trillion at the end of the second quarter, of which $1.13 trillion was portfolio investments - equity and debt securities that foreign investors could attempt to offload in the event of market panic.
Broader SAFE data showed China's total external debt, excluding Hong Kong and Macau, at $1.84 trillion at the end of the first quarter, an increase of $455 billion from the end of 2016.
Although not all of those exposures are at risk of fleeing China's shores, analysts say they put the size of China's $3 trillion in foreign exchange reserves into perspective. Shih said existing capital controls were very stringent.
"Even the billionaire class faces tight restrictions in terms of where they can invest money," he said. "However, there are still ways, and it is likely that corruption is returning, which will undermine Chinese capital control measures."More at CapitalWatch.
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| Rupert Hoogewerf |
Rupert Hoogewerf, CEO of the Hurun Report – a research, media and investments business – said that family travel was the third most popular holiday “theme” with high-net-worth individuals and ultra-high-net-worth Chinese travellers. Speaking to the luxury travel brands attending the event also confirmed for us that pleasing the “luxury little emperors” – children – is just as important as anticipating the needs of adult VIP guests...
During the panel discussions, Hoogewerf also referred to an untapped resource – the alumni of top Chinese and international universities and their WeChat groups. For example, if a former student at Shanghai’s Fudan University – or a Chinese alumnus of a leading overseas university recommends a luxury travel experience, then the rest of his or her peers are highly likely to want to try it for themselves.
His comments highlighted the fact that there are still underused methods for connecting directly with holiday firms’ target market of China’s affluent travellers.More at the South China Morning Post.
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| Shaun Rein |
This year, more merchants affiliated with Alibaba and consumers outside China are expected to join in the festivities. Southeast Asian e-commerce subsidiary Lazada Group will hold for the first time Singles’ Day promotions across Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam, according to Alibaba.
Marketplaces like Zalora, Shopee and Expedia are offering consumers in markets like Singapore discounts if they shop on the platforms during the Singles’ Day period.However, recent China-US trade tensions and a weak stock market have battered consumer confidence, according to Shaun Rein, managing director of China Market Research Group.
“Sales from Double 11 are still going to grow, but not as much as before,” Rein said, adding that many brands are likely to have to offer deeper discounts this year to encourage consumer spending.
But Rein acknowledged that Singles’ Day has changed global strategies for retail brands.“10 years ago, Singles’ Day was still a minor event, and brands were focused on promotions for the Lunar New Year,” he said.
More in the South China Morning Post.“Now Singles’ Day is a bonanza – it’s Christmas Day, Boxing Day and Black Friday all wrapped into one. It’s not just for singles any more, it’s for everyone, offering everything from cheap items to big-ticket purchases.”
