News roundup: Tencent sues China’s trademark authority

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Tencent sues Chinese authorities for denying a signature sound’s trademark

Observers of intellectual property protection in China have long commented that China will only start protecting intellectual property rights when Chinese companies begin to develop their own. This is now happening. A clear piece of evidence: Internet giant Tencent, the company behind the WeChat messaging and social media service, is suing the country’s Trademark Review and Adjudication Board (TRAB) after an application to trademark the beeping sound used by the company’s QQ instant-messaging service was rejected. The People’s Daily says that Tencent “applied to register the signature ‘Di-Di-Di-Di-Di-Di’ notification sound as its trademark in 2014,” but that the company’s application was later rejected by TRAB, “with the explanation that the sound was ‘simple and not creative,’ lacking in any distinctive traits.”

Worrying about the yuan and foreign reserves

Concerns about the yuan, or renminbi, and China’s foreign currency reserves continued to dominate business and financial news about China today. Bloomberg headlined an article titled “China’s foreign reserves drop most in 10 months as yuan slumps,” noting that “the fifth-straight monthly decline brings the reduction in the stockpile to almost $1 trillion from a record $4 trillion in June 2014.”

The Wall Street Journal points out that “the clock is about to restart on individuals’ annual foreign-exchange quota, which is expected to set off a fresh gush of outflows.” Chinese citizens are allowed to convert and transfer $50,000 abroad each year. In January 2016, China’s foreign exchange reserves fell by about $100 billion when the 2015 quota reset. Reuters notes that despite concerns about the diminishing foreign currency holdings, China is planning to start a $21.8 billion offshore fund intended to support overseas investments as well as projects related to the One Belt, One Road initiative.

Top internet search terms in China in 2016

The Chinese search engine Baidu has published a list of top search terms for 2016. You can find an English translation here, and click here for the Chinese characters. The top 10 were:

1. The Rio Olympic Games
2. House prices soared
3. Car license-plate lottery
4. All sectors in China now under value-added tax system
5. Vaccine safety
6. Hukou (residence permit) reform
7. Artificial intelligence
8. Internet finance
9. Anti-corruption
10. Two-child policy

When Appalachia met China

Finally, today on The China Project, we publish a backgrounder in advance of tomorrow’s Sinica Podcast interview with Abigail Washburn and Wu Fei, a musical duo currently recording an album of Chinese and American folk songs.

More China stories worth a look are summarized below.

BUSINESS AND TECHNOLOGY:

• • China is pausing on U.S. deals, ex-Goldman rainmaker says / Bloomberg
    “Chinese investors are hitting the pause button on U.S. and other outbound deals as they grapple with the ramifications of a Trump presidency and possible government curbs on overseas acquisitions, according to Fred Hu, a former Greater China chairman for Goldman Sachs.”
  • Competition from Chinese imports weakened U.S. innovation, economists say / WSJ
    “U.S. industries that faced surging Chinese competition saw declines in ‘revenue, employment, available capital, market valuation and investments in new technology,’ found the economists.”
  • China to help 1MDB settle multibillion-dollar legal dispute / Financial Times
    1Malaysia Development Berhad (1MDB) is a state investment fund that has been embroiled in a corruption case connected to Malaysia’s prime minister, Najib Razak, since July 2015. As part of the corruption accusations, 1MDB’s “strategic partnership” with the Abu Dhabi-based International Petroleum Investment Company (IPIC) became litigated, and the Financial Times now reports that China is willing to help the Malaysian fund settle its $6.5 billion dispute with IPIC.
  • New Alibaba Pictures CEO warns of ‘drastic changes’ in China’s film industry / LA Times
    Alibaba Pictures chairman Yu Yongfu has been named the company’s new CEO. A film industry outsider, Yu takes over the entertainment arm of Jack Ma’s ecommerce giant Alibaba Group ahead of what he says will be “drastic changes” for the industry. In a letter to employees, he wrote that weaker film and television companies will likely be pushed out of the market in 2017.
  • China has a Shenzhen problem / Barron’s
    A stock-trading link between the Shanghai and Shenzhen stock exchanges opened Monday to muted interest: Demand from investors filled only a fifth of the available daily trading quota. Compared with the “wildly enthusiastic” opening of the Shanghai-Hong Kong link in 2014, William Pesek writes, the missed forecast “speaks to bigger vulnerabilities in the [world’s] second-biggest economy, ones that could make 2017 a uniquely volatile year for Asia.”
  • Airbnb inches its way into China / Bloomberg
    “Where Uber rushed in, Airbnb has taken its time building relationships with China’s industry leaders and government officials.”
  • China says Apple has an exploding iPhone problem / Quartz
    “Shanghai Consumer Council (SHCC), a consumer watchdog group chaired by a Shanghai member of the Municipal People’s Congress, put up a notice on its website on December 2 that eight iPhones reportedly exploded from September 1 to November 30.”

POLITICS AND CURRENT AFFAIRS:

• • Trump picks Iowa gov. Terry Branstad — a ‘friend’ of China’s leader — as Beijing ambassador / Washington Post
    “Branstad has extensive ties to China and a personal friendship with Chinese president Xi Jinping that dates back decades. If his nomination goes through, the move could help reassure China’s leadership that Trump understands the importance of healthy relations with Beijing.”
  • Opinion: A carefully calculated trip to Pearl Harbor by Abe / Xinhua (state media)
    Reacting to the news of Japanese prime minister Shinzo Abe’s planned trip to Pearl Harbor, Chinese state media warned the world to beware “Abe’s revisionist view of the war history,” as his “no apology” position means the U.S. may “fall victim to Japan again 75 years after” the original tragic events.
  • Opinion: China should heed Pearl Harbor’s lessons / Bloomberg
    Former Japanese diplomat Kuni Miyake sees similarities between Japan in an earlier era and China today: “China faces several of the same critical questions the Japanese government and military did in the 1930s: Can the country look past historical traumas and accept the existing regional and global order? Can it peacefully coexist with neighbors both strong and weak? Can civilian leaders control the armed forces and limit their influence over policy?”
  • Bob Dole worked behind the scenes on Trump-Taiwan call / NYT
    “Mr. Dole, a lobbyist with the Washington law firm Alston & Bird, coordinated with Mr. Trump’s campaign and the transition team to set up a series of meetings between Mr. Trump’s advisers and officials in Taiwan, according to disclosure documents filed last week with the Justice Department. Mr. Dole also assisted in successful efforts by Taiwan to include language favorable to it in the Republican Party platform, according to the documents.”
  • China warns U.S. on Taiwan leader’s planned transit / ABC News
    China alleged that Taiwanese president Tsai Ing-wen would use her stopover in the U.S. to curry diplomatic favor. “Taiwan’s administration and leader always perform some petty moves like a transit diplomacy whose ulterior political intentions are clear for all to see,” said a foreign ministry spokesperson.
  • How Trump’s call with Taiwan could affect U.S. goals in Asia / NYT
    “China will likely now be looking for ways to punish Tsai for the incident,” says Paul Haenle, the director of the Carnegie-Tsinghua Center for Global Policy in Beijing. “Will the president-elect stand up for Taiwan when that happens? This is one of the real concerns of those who have pushed back against publicizing the phone call.”
  • China vows to record graft probe grillings after torture report / Financial Times
    “China’s anti-corruption tsar has vowed that all interrogations will be videotaped in an attempt to prevent abuses, after a stinging report on the widespread use of torture in Communist Party investigations of its officials.”

SOCIETY AND CULTURE:

• • After 1,000-year slumber, China vows to invent again / WSJ
    “Beijing spends billions on moonshot projects such as teleportation and artificial intelligence, hoping to shake off its reputation as a copycat economy and curb dependence on foreign powers.”
  • ‘Nude selfies for loans’ scandal sheds light on China’s rampant underground banking / SCMP
    “Having long been ignored by banks and traditional financial institutions as not being ‘good-quality clients,’ some are willing to risk much to get quick cash, as they have no collateral.”
  • China’s First Tourist: How President Xi Jinping is changing the travel industry / CNN
    From an old Beijing dumpling shop to British pubs to Macau’s casinos, the Chinese president’s influence on tourism reaches far and wide.
  • Traditional Chinese medicine is China’s latest ‘soft power’ weapon / SCMP
    “Wang Guoqiang, deputy chief of the National Health and Family Planning Commission, attributed traditional medicine’s high recognition to the authority’s attention to its development and the increasing recognition of its value by the international community.”
  • China’s ‘Walter White’ sold $600,000 worth of illegal drugs every month to the U.S. and Europe / TIME
    “Zhang and two accomplices admitted charges of smuggling, selling, transporting and manufacturing illegal drugs, but according to state media argued in mitigation that they did it for research purposes rather than for consumption.”