Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Starting in 1993, Chinese premiers have typically used the annual event as an opportunity to field wide-ranging questions from Chinese and foreign journalists. Throughout the 1990s and 2000s, when China was opening its economy to the rest of the world, it had actively sought to elucidate its politics and policies in a bid to attract foreign investment and boost trade.
Ian Johnson, a senior fellow for Chinese studies at the Council on Foreign Relations, who worked in China as a journalist from 1994 to 2001, said that foreign journalists at that time could use the press conferences to ask questions freely.
Later, “it went from being a potential source of information to becoming an empty exercise in propaganda,” he said. “By the end of the 2010s, it had become useless in terms of getting information. It’s just scripted.”
Former Alibaba executive Sharon Gai looks at Drugstorenews back on how the company conquered retail in China, focusing on pharmacy with Alibaba Health. “What this medical doctor app did was digitize that entire process,” she said.
Drugstorenews:
Gai took the discussion to Alibaba Health, noting that China only has about 1.8 doctors per every 1,000 people compared to 2.4 in the United States and 2.8 in the U.K. “This means that resources in health care are very strained in China. When there’s a lot of competition, it breeds innovation. That‘s exactly what Alibaba Health has in terms of its growth trajectory,” she said.
AliHealth started as a cloud pharmacy, but its product managers recognized that people were searching for grocery and skin care items, OTCs or certain drugs. “Ali pharmacy was pulled out of Tmall and a separate app was created,” she explained
“The product managers noted that there were people searching to buy contact lenses and prescription eyeglasses, they needed eye exams and physical exams, they were looking for sexual health products, or wanted to do STD tests or pregnancy tests. This became a snowball effect and the number of services this app started to cater to. Today Alibaba Health is a full fledged telehealth app.”
Gai also discussed how a medical doctor app was created for traditional Chinese medicine, a huge Chinese sector that she described as “a very old school brick and mortar place to play.” “What this medical doctor app did was digitize that entire process,” she said. “You open the app, consult with the Chinese medicinal doctor and he will tell you what you need and an entire packet of ingredients will be shipped right to your doorstep.”
Addressing the last pillar of Alibaba Health, a business to business pillar in which the creators built out a health knowledge map and traceability code, Gai said, “AliHealth set a standard in creating a QR code that every single brand would need to stick on their packaging so when this product is shipped to the end customer, they can scan it and see exactly where this medicine came from. This is the interface of the telehealth app, where you also can see the balance on your health insurance card, nearby hospitals, a doctor for an online experience, get medicine delivered in around 30 minutes to an hour, order vaccinations, get eye exams, mental health services and medical beauty.”
The app also features short-form videos that offer health advice from doctors, who are becoming influencers. “As a user, you’re constantly learning about health care in general. What AliHealth really did, the big innovation, is consumerization of healthcare services,” Gai said.
Lastly, Gai said that AliHealth is good at “new retail,” a term developed by Jack Ma in 2016. “It’s basically the unification or the synchronization of online and offline services,” she said.
A large number of the illegal immigrants entering the US from Mexico are Chinese, and not only poor Chinese, says China scholar Ian Johnsonin DW. They mostly rely on dubious information on TikTok and have no clue what kind of adventure they get into, he adds.
DW:
The phenomenon of Chinese people entering the United States via the southern border has come to be described by the term “Zouxian,” which can roughly be translated as “take the risk” — and the term’s broad dissemination on social media platforms has led many young Chinese to do just that.
“They rely on social media more in China for getting their information,” said Ian Johnson, a China expert at the US Council on Foreign Relations. “In the Western countries, you would say: ‘What does the mainstream media say about it?’ But, in China, there is no way to fact- check.” Johnson said it concerned him that so many of those young people have no idea what they are getting themselves into.
Johnson said the situation would not just hit the very poor.
“The economic slowdown is affecting broader ranges of the population, including the lower middle class,” Johnson said. He added that increased political persecution under President Xi Jinping has also fueled a desire to leave China behind.
Inequality has been one of China’s central problems, writes author and journalist Zhang Lijia in the South China Morning Post. There is no shortage of efforts to fix it, she argues, and while China has dealt with poverty successfully, getting to common prosperity, as it is called, seems much harder to achieve.
Zhang Lijia:
Last month, Panzhihua, a city in western China’s Sichuan province, announced this would be its “breakthrough” year in establishing itself as a common prosperity pilot zone. It is following the example of Zhejiang province in the east, another such pilot zone which was set up in 2021. The idea is to push for a high-quality development that focuses on closing the economic gap between regions, between urban and rural areas, and in income.
This is encouraging news, but will such efforts work? Will there be more pilot zones like these? Will China really achieve common prosperity, or is it mainly a political slogan? The truth is still emerging.
The concept of common prosperity is not new. It first appeared in 1953 during the Mao era as he pushed China towards socialist collectivisation.
Around 1979, shortly after paramount leader Deng Xiaoping had introduced economic reforms and opening up, he declared that China’s path to common prosperity would be to let some people and regions get rich first to help the rest. The term gained new significance in 2021 when President Xi Jinping vigorously promoted it as a way to guard against economic and political polarisation.
Since 1978, some people and regions have indeed become rich. China has transformed from one of the world’s poorest countries to its second-largest economy, and from a relatively equal society to one of the most unequal in the world.
The structural flaws inherent in China’s political system – from state-controlled capitalism to corruption – have all contributed to the problem. The top 10 per cent income share rose from 27 per cent in 1978 to 41 per cent in 2015, approaching levels seen in the United States, according to research by economist Thomas Piketty and his colleagues.
Xi clearly realises the risk of such income and wealth disparities, which could stifle growth and erode confidence in the leadership. Defining common prosperity is complicated as it has many implications and associated aspirations. In one sense, China’s pursuit of common prosperity seeks to build up the middle class so it can become more of an engine of consumption.
Winston Ma, an investor, attorney, author, and adjunct professor in the global digital economy, discusses at a Miami conference who can follow as leaders in AI for Arab News. He believes also countries like Saudi Arabia can follow those two leaders, although it does mean a lot of targeted investments.
China will continue to focus on supporting its manufacturing power, instead of changing to household subsidies, says economist Victor Shih, out of line with many other economists who expect support for consumption, as reported by Al Jazeera. Shih added: “There are 1.4 billion people in China, so comprehensive social assistance would be extremely expensive, especially in a deflationary context.”
Al Jazeera:
Analysts expect the National People’s Congress, China’s rubber-stamp parliament, to again set an annual growth target of about 5 percent when it meets in March.
While many economists have exhorted Beijing to stimulate growth through household transfers, Victor Shih, an expert on the Chinese economy at the University of California, San Diego, expects investment-driven growth to continue to hold sway.
“Marxist ideology, which valorises industrial production, remains the fundamental basis for policymaking in Beijing,” Shih told Al Jazeera.
“In all likelihood, the government will continue to subsidise manufacturing. Consumption, by contrast, is viewed as indulgent.”
Shih added: “There are 1.4 billion people in China, so comprehensive social assistance would be extremely expensive, especially in a deflationary context.”
Shih said Beijing could raise household consumption by urging companies to pay higher wages but that “China’s manufacturing edge is partly based on subdued worker income”.
As such, “higher wages would undermine Chinese exports, which is an important source of output”, he said.
“I don’t think the government will shift budgetary priorities in favour of the Chinese people… which will likely result in a period of economic weakness.”
Behind all the geopolitical shuffles between China and the US, the war on AI and the metaverse is raging, says AI expert Alvin Wang Graylin in an interview with Cyrus Janssen. And that is a wrong signal for the rest of the world, as both forces should not try to contain the other, for national security reasons or whatever, but work together, he argues.
China’s economy is dealing with some tough years, writes leading economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, in ChinaFile, especially now that it does not have enough tools with debts and the property crisis like it did in the past. “So we need to brace for the consequences of the Xi model: slower growth in China, a big rise in Chinese technology exports, and more protectionism in the rest of the world,” he writes.
Arthur Kroeber:
China’s economic malaise results from a combination of political decisions, structural factors, and policy mistakes. The central reason for it is that Xi Jinping has decided to make national security and technological upgrading—not economic growth—his policy priorities.
The broadening definition of national security, and the increased influence of security interests in economic policy, have soured private investor confidence. The focus on technological upgrading has led to an economic strategy that relies almost exclusively on industrial policy. This means that the government devotes most of its attention to the supply side of the economy: boosting production of semiconductors, clean energy equipment, electric vehicles, industrial machinery, ships, and other products seen as needed to increase the country’s technological capability and self-sufficiency. Virtually no serious effort goes into figuring out how to unlock domestic demand—especially from households, which now save about a third of their income, one of the highest savings rates in the world.
These policies mean that China’s economy will have two faces in the coming years. The chronic shortage of demand will mean disappointing GDP growth—probably 3-4 percent on average over the rest of the decade—and a constant struggle to shake off deflation. But at the same time, its technology-intensive sectors will thrive, thanks to both government support and China’s uniquely competitive manufacturing ecosystem. The result will be persistent high trade surpluses and, probably, a strong wave of protectionism from countries that want to preserve their own industrial capacity.
This policy stance also makes it very hard for China to solve two of its biggest structural problems: the collapsing property market and the huge and growing debt burdens of local governments. The last time China faced a challenge of this scale was the late 1990s, when nearly half of all bank loans went bad. At that time, it responded with a combination of financial engineering to postpone the reckoning of bad debts, well-targeted infrastructure stimulus, and aggressive deregulation of manufacturing and housing which unlocked huge new sources of entrepreneurship and household demand. As a result, China grew out of its problems and by 2010 became the world’s second-biggest economy.
A similar approach today would recognize that deregulation of services—which account for more than half the economy, and all net new employment—is the main path to boosting consumer demand and accelerating economic growth. Too much of the service economy is either in state hands, or burdened by stunting regulations. But such a policy would conflict directly with Xi’s desire to keep the state’s finger on all economic levers. So we need to brace for the consequences of the Xi model: slower growth in China, a big rise in Chinese technology exports, and more protectionism in the rest of the world.
China will implement a new PRC company law and veteran lawyer Mark Schaub expects most people will doze off before they make it to the end of that law. In his China Chit-Chat website, he summarizes the main changes and insists you should pay attention. He covers important issues like: “The new PRC Company Law sets a 5-year deadline to make promised capital contributions. Crucially this requirement will apply retrospectively. Ouch!” And who is the boss in a company, and how to fire a director.
Mark Schaub:
Being an external director of a WFOE was always quite a lark. You would go to board meetings (often in Hainan), were treated with great respect and as someone external to daily operations you did not really know why you were there, so you did not need to concentrate. Sometimes you would daydream about what superpowers it would be good to have.
Sadly, these halcyon days of daydreaming about being a superhero are consigned to the past as the PRC Company law ramps up (again) personal liability for directors. The threat of personal bankruptcy somewhat outweighs the pleasure of an occasional Gin and Tonic at a board meeting where all you need to do is nod and ask the occasional question to show you are awake even if such questions showed you to be not very well informed.
Why business will never be the same in China again, tells consultant Gabor Holch in a wide-ranging overview of how business in China has changed after the pandemic, and how Western businesses can face those changes.
Financial expert Victor Shih looks at the dilemma China faces as local debts run out of hand, while revenue is dropping, and consumer confidence is low, at a panel discussion at the Ray School of Management at the UC San Diego.
This month, a short video attracted a huge amount of attention on China’s social media. In the clip, a female executive was seen sacking a male employee. When he protested that she had violated the country’s labour law, she spoke rudely to him, admitting: “I’ve violated the law – so what?” He could go ahead and sue her, she said, but he would never get anywhere because she “knew people” in labour arbitration.
The video has caused a public outcry and widespread condemnation. There is heated debate over how she could blatantly disregard the law, whether China’s labour laws were working well enough and how China can better protect worker rights.
Having once been a factory worker for 10 years, I maintain a keen interest in labour relations; I also feel for my fellow workers.
China enacted comprehensive labour legislation only in 2008, with the Labour Contract Law, the Labour Dispute Mediation and Arbitration Law, and the Employment Promotion Law – all important legal milestones aimed at addressing workers’ grievances and protecting their rights. In particular, the Labour Contract Law states that companies must provide each employee with a written contract and stipulates guidelines on termination: there should be a 30-day notice or an extra month’s salary in lieu.
After outraged netizens started digging around for the identity of the woman and the company, the Beijing-based chip design company issued a statement on January 8, apologising for causing the furore. It said its executive had been reprimanded and suspended from work. It also said the sacked worker was let go about five months into his six-month probation because of a lack of competence, and that the termination was lawful.
Labour disputes in China are a relatively new phenomenon and it is not uncommon for companies to fire workers just before the end of their probation. As economic and social inequalities increased with China’s opening up, so have labour tensions…
Given the circumstances, the authorities must try harder to protect workers’ rights to fulfil their duty of care. They should thoroughly investigate the latest allegation of unfair dismissal and severely punish those who violate labour laws.
They should also introduce more legal aid, work to simplify the arbitration procedure, and ensure all verdicts are obeyed and wronged employees are properly compensated.
The government’s commitment to protect its workers is on the line here. China is a socialist country, built as a state for and of the workers. A failure to protect workers undercuts the Communist Party’s credibility, especially if the poor enforcement of labour laws is allowed to continue and cases start to mount.
Business analyst Shaun Rein dives deeper into the China economy as consumer confidence in first-tier cities is lower than he has seen in 27 years and the government’s economic targets focus on the next 3-5 years, he tells CNBC. The government is unwilling and unable to rely on stiff financial bazookas as it did in the previous crisis of 2008. Economic growth of 5 percent is enough for the government now, as it wants to diminish the gap between haves and have-nots, he adds.
A poet named Lin Zhao, who contributed to Spark, was the subject of Hu’s 2004 film Searching for Lin Zhao’s Soul. When Lin wasn’t handcuffed to chairs and beaten by guards, she wrote poems and essays on scraps of paper by piercing her finger with a hairpin and using her blood as ink. When she ran out of paper, she wrote on her clothing.
With her blood, Lin drew images on prison walls of an incense burner and flowers. From 9:30 to noon each Sunday, she held what she called grand church worship, singing hymns and saying prayers that she learned in her Methodist girls’ school. The prison guards put a tight-fitting hood on Lin that made it difficult for her to breathe and impossible for her to speak.
Lin was executed on April 29, 1968. On May 1, a Communist Party official visited Lin’s mother to demand that she pay a fee for the bullet used to kill her daughter.
Prison guards meticulously saved Lin’s writings to document her counter-revolutionary spirit. After Mao’s death, Lin’s files were declassified and sent to her family.
In Sparks, Ian Johnson tells the stories of people such as Lin Zhao and Hu Jie—Chinese journalists and filmmakers who explore the darkest episodes of Chinese communism, often at great risk to themselves. In Sparks, we meet Ai Xiaoming, who interviewed dozens of survivors of the Jiabiangou forced labor camp and their families to make her seven-hour documentary film, Jiabiangou Elegy (夹边沟祭事). We also meet Journalist Tan Hecheng, who uncovered the story of a 1967 Communist Party–led massacre of nine thousand innocent men, women, and children in Hunan Province. Tan devoted forty years of his life to researching the story of the systematic murders, finally publishing the book The Killing Wind in 2010. “Documenting this wasn’t quixotic,” Johnson writes. “It was a hard-nosed calculation that it would pay off—not for Tan personally but for his country.”
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Book reviews of Sparks: