Weekly Watch on China 20211003–20211010
- The New Battle of Chosin Reservoir
What happened: The newly released film, The Battle of Chosin Reservoir（长津湖）, was among the top viewed one during the National Holiday, a.k.a the golden week in China.
Why people cared? This film was about one tough battle during Korean War(Jun. 25, 1950 — Jul. 27, 1953), at the end of which a shocking and moving picture of “The Chosin Few”, or “Ice Sculpture Company”(冰雕连, the company means military company, not the firm) really moved lots of the audience.
How it was viewed: No doubt, there were lots of talks and discussions among Chinese social network, most of which praising the bravery of People’s Volunteer Army, the greatness of Chairman Mao who led the campaign to defeat the best military force at that time — U.S force, by brave fighters with very crude equipment. More importantly, an idea, inspired by this film, was commonly accepted that this war had very lasting effect that China finally could stand up to the west’s invasion, and win. Another worth mentioning is the saying that “If the fighters didn’t fight, the children will have to fight.” Implying that the China’s wining in Korean War brought respect from the West and more importantly, peace.
It’s indicating Taiwan: Many common Chinese even thought this film as a prelude for Xi Jinping to deploy military force to take Taiwan. After all, this film is about how Chinese people fight against U.S — which was quite the situation now, and almost a certain situation if Xi tries to take over, or take back Taiwan.
One celebrity arrested: Luo Changping(罗昌平), an internet celebrity, CEO of OkoerChina(a third party testing firm focused on consumer spending products), former associate chief editor of Caijing and very senior reporter of The Beijing News, was arrested for publicly insulting the fighting heroes, calling them “Stupid Company”, referring to the “Ice Sculpture Company” mentioned above. NYT reported that Luo was arrested for criticizing the Judgement of sending troops to North Korea, which I personally didn’t quite agree. The notice put by the police was very clear that they arrested Luo for “Martyr Reputation Infringement Offense”, and Luo was not the only one under arrest due to this offense. Another case happened in May 2021.
2.Fly Me To Taiwan
What happened: On October 4th, 56 fighter aircrafts entered Taiwan ADIZ, making it a total of 150 fighters being there since Oct 1st, according to BBC. This was believed to be Beijing’s reaction to AUKUS, a newly formation of U.S, Australia and UK to circle or counter China in Indo-Pacific area.
How Chinese viewed this: Happy, of course. They believed what was spread in the social media that Xi Jinping is trying to “unify the two straits”, ending the divided area since the “Liberation War”(named by Mainland government) or the “Civil War”(mostly called by Taiwan people).
Will Xi really act? Though there are many signs that Xi will do something, including Xi’s latest speech on the anniversary of Xinhai Revolution, I personally doubt it. Just a very common question:”If you are going to attack, will you make it universally known?”
3.Pre-Meetings
Two meetings between China and U.S were held recently, Jake Sullivan meeting Yang Jiechi on October 6th and Katherine Tai virtually meeting Liu He on October 8th,making lots of commentators and international relationship researchers, also macro investment analysts wondering a warmer relationship between U.S and China.
Another victory among Chinese social network political influencers: On Sept 10th, Biden and Xi made a telephone call. So many un-official commentators viewed this as a victory of China — since it’s the U.S trying to make a call, they must be very urgent to make a deal. In another word, China is at an edge. Yang and Jake’s meeting was just another proof that U.S needs China and U.S government will have to change to win China back.
It’s clear that the obstacles between U.S and China are political issues: China claimed that HK, Xinjiang, Tibet and Taiwan are China’s own issues, and there are no human rights crisis at all, so why U.S could interfere? From the meeting result of Wendy Sherman visit to China in July, China has made it very clear that it could only negotiate meaningfully on the condition that Western world no longer pointing fingers with human rights violation accusation. However, U.S and all other western leaders put high value of human rights, regardless that they really care about it or just try to appeal to the voters, most leaders could not afford to back down from their current stance. It seems that there is no easy solution.
Don’t forget Evergrande: Jake Sullivan also asked China to be responsible about Evergrande’s debt crisis. Why a National Security Advisor cares about the real estate issue at the first place? It may be the fact that Evergrandes’ U.S nominated bonds were not at all the concern of China regulators, who are currently dealing with Evergrande’s enormous liability. However, many Wall Street investors are holding those bonds.
4.Lenovo On Fire.
Lenovo, an vintage “tech” company in China, has been denied to IPO on “SSE STAR MARKET”(Shanghai Exchange, Sci-Tech innovAtion boaRd, believed to be built for hard-core tech companies, like chip makers).
It took only one business day for the authority to make such decision. Lenovo and its hired investment bank submitted the prospectus on Sept 30th, right before the National Day holiday, and got the deny decision on Oct 8th, just one day after the golden week.
The old h-share(3396.HK) tech company could not listed on A share, at least for the STAR market. Lenovo has been doing business since 1980s, and was the very star tech company during 1990s and 2000s, before Sohu, Sina, Tencent, and Alibaba’s rising. In fact, the founder Liu Chuanzhi was called the “godfather of China tech industry”. It has been trading on Hong Kong stock market for many years, though it’s the first time for Lenovo to come back to A-Share.
Not a real tech company, that’s the reason for it being refused for IPO on STAR. R&D is just around 3% revenue, and it’s like the HP in China to sell personal computers, just without the core-tech to make them. Actually, Lenovo also sells cellphones — the business bought from Moto, and the majority of PC business was bought from IBM.
Too high salary for senior executive team: Liu Chuanzhi was granted for almost 100M RMB annually, a very high salary for a retired executive. The senior executive team took around 1 Billion RMB for salaries, but the net income for the company was just 3 Billion RMB. Many critics in the social network aimed at this unreasonable high salary. More importantly, the top holder of Lenovo is a State Owned Institution. So it looks like the executive team was stealing money from the state.
A Hanjian(Trator)? In Chinese language, a special word like “Hanjian” was describing the traitor who cooperated with invasion foreign force betraying the country, like Wang Jingwei. Liu Chuanzhi’s family has long been criticized for being “Hanjian”, for he claimed that Lenovo was “an international corporation rather than a Chinese one”, and his daughter Liu Qing, the CEO of DIDI, was believed to conspire with U.S government to submit Chinese personal moving data during the DIDI IPO several months ago. So, it’s somewhat a nationalism issue in this topic.
Weird investment banks: Lenovo hired China International Capital Corporation, the top Chinese investment bank for the IPO. CICC was once run by Zhu Yunlai, the son of former Premier of China, Zhu Rongji. Though a very “red” company, CICC was famous for acting like Western investment banks, for the rumors that the employees exchanging emails in English rather than Mandarin. Keep in mind that CICC was a China based company whose majority of the employees are Chinese speaking Mandarin. It’s a company with top government connection. So it’s a weird thing that they did try to help Lenovo’s IPO, which was a very unpopular political decision.
5.Proud of High Gini
China is among the countries with highest Gini Coefficient, said by Tang Min, who is a Counselor of the State Council, like a government funded think tank officer.
Many nationalists comments below the thread, saying that China is great for ranking top, or “Unregretted to be born in China, and will be Chinese again in my next life”. Tang Min’s words are for a lecture in University on Sept 25th, and reported by some media at that time. But the “country loving” comments were shared among social network in Oct.
Gini Coefficient has been taught in China Middle schools for many years, and people should be aware that it’s not a good thing with high Gini. So, who commented? It’s a robo generated thing?
6.Noble Not Desired Anymore
Every year, Noble Prize was announced at this time, but few Chinese have won the prizes, especially the tech-researchers.
This has been a view held by many people, even Chinese that China is lack of tech innovation, and week in science.
But now Noble Prize was seemed to be a highly political one, only granted to the people in countries bent down for U.S. Some comments even claimed that the prize has only been issued to U.S guys, or countries with U.S garrison town.
7.No More Fantasy
Another property developer defaulted, not surprisingly, but it was very surprising that the one was Fantasia Holdings, whose boss is Zeng Baobao, a niece of Zeng Qinghong, former Politburo member and right hand man to Jiang Zemin, former Chinese President.
Fantasia is never famous, or infamous for being bold and highly leveraged. And the financial statements showed that the company could pay some debt off, though it didn’t.
Zeng’s internal official letter was quite confident, even aristocratic. The office’s name is literally “Ms.Zeng’s Office”, and the name of the letter was “Sire. Bao’s Family Letter”（宝爷家书）. I didn’t take the sex referring wrong, it was indeed a male-oriented salute, which was used by Ms.Zeng Baobao. The Sire here, or “Ye” in Mandarin, is a word to typically describe a prestigious man. Another female famous for using this salute is Fan Bingbing.
Anyway, property market in big trouble for sure: That even a highly connected company like Fantasia, and the biggest real estate developer could default suddenly. It seems to everybody that there is no “too big to fail” company in China. Maybe it’s actually the message Beijing wanted to send. And maybe that’s why Jake Sullivan talked with Yang Jiechi for being responsible in dealing with real estate crisis.
