Links for Thursday, June 17, 2021

BUSINESS AND TECHNOLOGY:

Fast-fashion startup nets big investment
Quanquan Quansu, a cross-border fast-fashion startup (exactly like Shein) founded by the former CTO of secondhand car platform Guazi (瓜子网) Joyce Zhang (张小沛 Zhāng Xiǎopèi), has raised $100 million in a new financing round, per 36Kr (in Chinese).

• The financial backers — including Sequoia Capital and IDG — also invested in Shein, which suggests that the VCs are bullish on the whole industry of cross-border fast fashion.
• Quanquan Quansu was valued at $150 million last July when Zhang, also a former Hulu global vice president, stepped down as Guazi’s CTO to lead the startup full time.

Quanquan Quansu — literally, “Full Volume, Full Speed” — wants to be the “Chinese Zara” just like Shein: It wants to use technology, along with the cost efficiencies of China’s factories, to beat out the big-name fashion brands.

Beijing makes new department to supervise online tutoring
China’s top education body is setting up a new department to supervise after-school tutoring companies. This is part of an education crackdown that has been ongoing since last fall and has penalized after-school tutoring agencies for reasons of antitrust and consumer protection along with fraudulent practices such as faking tutor résumés.

• According to a Ministry of Education notice (in Chinese), the new department will manage and supervise training content, tutor qualifications, and fee standards for online and in-person programs.

Japanese electric motor maker gearing up for China’s EV boom
Nidec, a Japanese automotive parts manufacturer, controls 5.5% of China’s EV motor market, the biggest slice for a foreign firm. The company is anticipating a growing, more demanding Chinese clientele, per Nikkei Asia.

• Nidec is launching a new 2,000-worker powerplant in Dalian, in addition to hiring 170 staffers for a development center in Suzhou with plans to boost the number to 250 by March 2022.

Secondhand goods platform bags $100 million led by Xiaomi
Zhuanzhuan, a secondhand goods trading platform owned by classifieds giant 58.com, completed a $100 million Series D funding round led by mobile giant Xiaomi, per 36Kr (in Chinese).

• In April, the eBay-like firm bagged $390 million in a Series C round of funding, the largest among Chinese online marketplaces for recycled products.
• In May last year, Zhuanzhuan, also backed by Tencent, was valued at $1.8 billion. As of last month, the platform had 48 million monthly active users, up more than 50% from a year ago.
• Revenues more than doubled in May compared with the year prior and gross merchandise volume (GMV) rose 56%.

Chip world war: Xi appoints new general as Huawei perseveres
Xi Jinping picks top lieutenant to lead China’s chip battle against U.S. / Bloomberg (paywall)

• Vice Premier Liú Hè 刘鹤, who has known Xi since childhood, directed trade negotiations with the U.S., and leads China’s Financial Stability and Development Committee, “has been tapped to spearhead the development of so-called third-generation chip development and capabilities and is leading the formulation of a series of financial and policy supports for the technology.”
• About a trillion dollars of government funds have been earmarked for chip technology projects.
• The move comes as China, the world’s leading chip consumer, seeks to boost domestic semiconductor technology in the face of U.S. sanctions.

Huawei persists in developing cutting-edge semiconductors / Caixin (paywall)
The company said it had no plans to restructure its chip design subsidiary, HiSilicon, despite U.S. sanctions that have crippled its supply chain.

Lockdowns helped ByteDance revenues soar
ByteDance revenues more than doubled in 2020 to $34.3 billion / FT (paywall)

• “The owner of the short-video apps TikTok and Douyin recorded a surge in users as coronavirus lockdowns across the world left people searching for more entertainment online.”
• Most of the company’s revenue came from Douyin, TikTok’s Chinese sister app, which allows users to buy livestreamer-endorsed products.

Didi gets antitrust scrutiny ahead of IPO
China’s IPO-bound Didi probed for antitrust violations — sources / Reuters
“China’s market regulator has begun an antitrust probe into Didi Chuxing, three people with knowledge of the matter said, just as the ride-hailing giant is pushing ahead with what could be the largest initial public offering in the United States this year.”

Outsized returns on Chinese stocks, and picking them while female
Market-beating China fund manager favors scooters and spicy sauce over tech / WSJ (paywall)
“Despite years of outperformance, Michelle Leung of Xingtai Capital says she’s still asked about who is in charge.”

May economic numbers a mixed bag for China
China’s economic growth moderates as consumers stay cautious / WSJ (paywall)
Factory output stayed strong, but domestic spending was underwhelming.

Global shipping still far from recovery
China’s worse-than-Suez ship delays set to widen trade chaos / Bloomberg (paywall)

• Southeastern port Yantian has not accepted new export containers since late May because of a COVID-19 outbreak, sending ripples across the global shipping industry.
• Analysts expect disruptions to continue into late summer, the period of peak demand for the U.S. and Europe.

Also on shipping:

• Demand swells for Chinese shipping crews amid global shortage / Caixin
• China’s export surge fuels global buying spree of cargo ships, containers / Caixin

Baidu to make 1,000 self-driving taxis
Baidu partners with automaker BAIC on new Apollo robotaxi / Caixin
The new vehicle will combine BAIC Arcfox EV with Baidu’s Apollo operating system to produce 1,000 nearly autonomous robotaxis over the next three years.

Japanese companies want clarity from Beijing
Japanese companies list concerns about doing business in China / Caixin
“Japanese companies operating in China are urging Beijing to clear up confusion over a string of new regulations that are creating uncertainty and making it more difficult for them to do business in the country.”

Will Beijing’s commodity price deflation succeed?
China starts a war on commodity prices Goldman says it can’t win / Bloomberg (paywall)
“While strategists at Goldman Sachs Group Inc. and Citigroup Inc. have said any attempt to stop the rally will likely fail in the face of supply constraints and buoyant global demand, Chinese authorities show few signs of letting up after achieving some early successes.”
Beijing urges better control over local government debt / Caixin

SCIENCE, HEALTH, AND ENVIRONMENT:

Challenges remain for Beijing’s national carbon market plans
China’s carbon trading market hobbled by unanswered questions / Caixin
“Systemic issues in China’s power generation industry are likely to prevent companies from effectively participating in the national carbon market: the pressure that the added cost of carbon will put on the far-from-market-driven industry and the lack of an absolute cap on the amount of carbon that can be emitted under the program.”
Shenzhen to set up fund to manage carbon credit sales income / Caixin
How China plans to harness market forces for carbon neutrality / Caixin

Competing stories about COVID-19
China disease expert says COVID-19 origins probe should shift to U.S. — Global Times / Reuters
Zēng Guāng 曾光, “chief epidemiologist with the Chinese Center for Disease Control and Prevention, told state-owned tabloid the Global Times that attention should shift to the United States, which was slow to test people in the early stages of the outbreak, and is also the home of many biological laboratories.”
Chinese media mocks US donation of 80 vaccine vials to Trinidad and Tobago / Reuters

POLITICS AND FOREIGN AFFAIRS:

Apple Daily editors arrested in Hong Kong, accused of foreign conspiracy
Editors of Hong Kong newspaper arrested under security law / AP

Hong Kong police used a sweeping national security law Thursday to arrest five editors and executives of a pro-democracy newspaper on charges of colluding with foreign powers — the first time the legislation has been used against the press…

Police said they had evidence that more than 30 articles published by Apple Daily played a “crucial part” in what they called a conspiracy with foreign countries to impose sanctions against China and Hong Kong.

See also:

• Letter to our readers: We Will Press On / Apple Daily
• HK’s Apple Daily newsroom raided by 500 officers over national security law / Reuters
• EU and UK say Hong Kong newspaper raid shows China cracking down on dissent / Reuters
• ‘An act of justice’: Beijing hails arrest of 5 senior Apple Daily staff under security law / HKFP

Building a “respectable” image by demanding respect
China’s Wolf Warrior diplomacy is our justified defense — get used to it, says outspoken diplomat / SCMP (paywall)
“Chinese ambassador to France Lú Shāyě 卢沙野 says striking back embodies the ‘achieve something’ mantra of Dèng Xiǎopíng 邓小平…His remarks come after President Xí Jìnpíng 习近平 called for top Party officials to build a more ‘respectable’ image of China.”

Taiwan flight incursions appear related to G7 statement
After massed plane incursion near Taiwan, China says must respond to ‘collusion’ / Reuters
“Twenty-eight Chinese air force aircraft, including fighters and nuclear-capable bombers, entered Taiwan’s air defence identification zone (ADIZ) on Tuesday…Asked at a news conference whether the military activity was related to the G7 statement, Ma Xiaoguang, spokesman for China’s Taiwan Affairs Office, said it was Taiwan’s government that was to blame for tensions. Beijing believes the island’s government is working with foreign countries to seek formal independence.”
The G7 countries said that they wished to “underscore the importance of peace and stability across the Taiwan Strait,” and “strongly oppose any unilateral attempts to change the status quo and increase tensions.”
Related: Pushing against China, U.S. lawmakers plan pro-Taiwan bill / Reuters

Bernie Sanders warns Washington: “Don’t start another Cold War”
Washington’s dangerous new consensus on China / Foreign Affairs (paywall)
The progressive U.S. senator writes:

The administration of U.S. President Joe Biden has rightly recognized the rise of authoritarianism as a major threat to democracy. The primary conflict between democracy and authoritarianism, however, is taking place not between countries but within them — including in the United States. And if democracy is going to win out, it will do so not on a traditional battlefield but by demonstrating that democracy can actually deliver a better quality of life for people than authoritarianism can.

Mixed feelings in Australia on China ties
Australia’s top exporting state calls for reset in China ties / Reuters
Western Australian Premier Mark McGowan: “How is it in our interests to be reckless with trading relationships that fund and drive our prosperity and our nation forward?”
Australians ‘not willing to give up’ on China despite growing mistrust, survey finds / SCMP (paywall)
“While six in 10 respondents believe Australia should keep trying to have a strong relationship with China, the same proportion want Canberra to take a tougher stance, leading researchers to say the findings show a ‘complicated picture.’”
China-Australia relations: Canberra to decide ‘very shortly’ on WTO action against wine tariffs / Bloomberg via SCMP

G7 vs. China and Russia
U.S., EU forge closer ties on emerging technologies to counter Russia and China / WSJ (paywall)
Related: Japan says China’s military strategy unclear, of serious concern / Reuters

Will the Chinese government talk to exiled Tibetan leaders?
AP Interview: Tibet exile leader hopes to resume China talks / AP
“The new president of the Tibetan exile government said on Thursday he will do his best to resume a dialogue with China after more than a decade, and that a visit by the Dalai Lama to Tibet could be the best step forward.”

Dystopian Disneyland
In China’s new Xinjiang: Patriotic tourism, riot police and minders / Reuters
“As visitors to China’s Xinjiang enjoyed new theme park-style tourist centres showcasing the region’s Muslim Uyghur culture on a recent national holiday, signs of heavy security and state surveillance were never far away.”

Xí Jìnpíng 习近平 is large and in charge
Xi Jinping hits Communist Party’s retirement age of 68 / Nikkei Asia (paywall)
Xi eclipses Deng Xiaoping in retrospective ahead of Party centennial / Nikkei Asia (paywall)
“As the 100th anniversary of the Chinese Communist Party approaches on July 1, a [Shanghai exhibit at the site of the party’s first National Congress] features President Xi Jinping more prominently than any other leader save Mao Zedong, the founder of modern China.”

SOCIETY AND CULTURE:

Livestreamer Sūn Yīníng 孙一宁 details harassment by Wáng Sīcōng 王思聪, the billionaire scion of a real estate family
Wanda tycoon’s son accused of harassing a woman for four years / Caixin
“Sun took to Weibo Tuesday to itemize uncomfortable encounters between the two, which included Wang sending Sun gift money on her streaming channel, showing up at her home uninvited, claiming she was his girlfriend in front of friends and disputing her word when she told him she was a lesbian.”
Billionaire bachelor Wang Sicong’s desperate unrequited love drama exposed online / What’s on Weibo