The Rothschilds make a wine in China

Dear Access member,

We’re leading with a wine story today: Cheers!

This week’s Sinica Podcast is also something a bit different — Kaiser talked with three people who work at a genealogical research startup called MyChinaRoots, and he discussed with them the growing trend of people taking an interest in their ancestry in China. Access members can listen to an early release — on Monday instead of Thursday — of each week’s Sinica episode by plugging this RSS feed directly into their podcast app. Ask us on Slack if you need help! 

—Jeremy Goldkorn, Editor-in-Chief

1. The Rothschilds make a wine in China

Since the 19th century, members of the Rothschild family have run and owned the Bordeaux estate Château Lafite Rothschild. There — and at other vineyards the family has acquired — their company Domaines Barons de Rothschild (Lafite) makes some of the world’s most expensive wines — $919 a bottle is the average price, according to Wine Searcher. 

The high price and the Rothschild name have made Château Lafite Rothschild (拉菲红酒 lāfēi hóngjiǔ) unquestionably the most famous wine brand in the Middle Kingdom, and a status symbol for China’s rich. 

In 2012, the BBC reported that China imports some 50,000 bottles of the stuff every year. This naturally means that there are also a lot of counterfeits. That same BBC report is primarily about police in Wenzhou finding a house with 10,000 bottles of the fake stuff in it. “At least half the Chateau Lafite sold in China is fake,” according to a government official quoted in this Decanter article. However, the BBC reported a figure of 70 percent.

The counterfeiters have not kept the Rothschilds away from China. The Financial Times (paywall) and Decanter report that 10 years after acquiring land in Shandong Province, Château Lafite Rothschild is launching a wine grown and fermented in China. 

• The new wine will be called Lóng Dài 珑岱, which its makers say is “inspired by the Taishan sacred mountain in Shandong.” The character 岱 is an alternate form of Taishan. You can read the Rothschilds’ slightly pretentious story of the name on their website. 

• 1,100 yuan ($160) is the price, and 30,000 bottles of the 2017 vintage will be on the market on September 19 this year. The vineyard expects to produce around 50,000 bottles in future years. 

• The labels were printed “under heavy security and many a non-disclosure agreement, in Bordeaux,” to stop counterfeiters, according to the FT, and they “are impossible to detach from the bottle, and the foil over the neck is lined with a banknote-quality anti-counterfeit graphic.”

• China is not the only market: The FT says that “they plan to target Chinese expatriate communities in places such as Vancouver and Sydney toward the end of the year.” 

• If you’re interested in wine in China, you might like the website Grape Wall of China.

2. A paper on Huawei’s links to the Chinese military

“Huawei Technologies’ Links to Chinese State Security Services” is the title of a new paper by Christoper Balding, a professor of economics and finance who used to teach in China, and contributes to Bloomberg. 

• Balding says the study is based on a “unique dataset of CVs that leaked from unsecure Chinese recruitment databases and websites and emerged online in 2018,” and shows close ties between Huawei and the People’s Liberation Army (PLA).  

• However, several scholars have called attention to what they describe as sloppy methodology behind the study: See, for example, China scholars Jeremy Daum and Mike Gow, who tweeted: 

There are no quotes from the CVs, no list of appointments, no list of institutions. We are left with a paper which presents zero data, yet makes claims and generalizations based on inferences drawn from a miniscule sample. 

3. Beijing says Xinjiang is ‘model of human rights protection’ 

The latest news from Xinjiang, where — according to the state media readout (English, Chinese) of Turkish President Recep Tayyip Erdoğan meeting with Xí Jìnpíng 习近平 last week — the “residents of various ethnicities [are] living happily…thanks to China’s prosperity.”

• “China’s vanishing Muslims: Undercover in the most dystopian place in the world,” a VICE documentary showing the extent of surveillance and police control in Xinjiang. Also see this discussion of the journalistic ethics of this documentary from the Chinese Storytellers newsletter. 

• The most recent episode of Planet Money, the NPR podcast about economics and technology, featuring a witness account of forced DNA collection from Uyghurs. 

• “Authorities continue to harass Han shop and restaurant owners, demanding mandatory participation in ‘anti-terrorism’ measures that target their Muslim compatriots,” reports Bitter Winter. 

• State broadcaster CGTN says: “There are no so-called ‘re-education camps’; in northwest China’s Xinjiang Uygur Autonomous Region…the facilities are vocational education and training centers aimed at preventing terrorism and extremism. It is not true that the trainees and their children are separated for long periods.” The China Daily takes it even further with this ludicrous headline: Xinjiang serves as a model of human rights protection.

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Our whole team really appreciates your support as Access members. Please chat with us on our Slack channel or contact me anytime at jeremy@thechinaproject.com. 

—Jeremy Goldkorn, Editor-in-Chief

BUSINESS AND TECHNOLOGY:

• The Nasdaq-style board
  First companies to debut on new high-tech board / Caixin 

China’s new Nasdaq-style high-tech board will host the first batch of listings on July 22, the Shanghai Stock Exchange said Friday.

At least 25 companies will be the first to debut on the SSE STAR Market, a new trading venue hosted by the Shanghai bourse targeting companies in high-tech and innovative sectors. The new board is also a testing ground for several securities market reforms including a registration-based initial public offering mechanism.

As of July 4, the Shanghai Stock Exchange received 141 applications for listing on the new board. The bourse has flashed a green light to 31 applicants, 25 of which have successfully registered with the securities regulator.

The first movers will include display and touch-testing equipment maker Suzhou HYC Technology Co. Ltd., sensors developer Yantai Raytron Technology Co., Ltd. and precision instrument maker Suzhou TZTEK Technology Co. Ltd.

• Ucommune
  WeWork’s China Rival Is Said to Seek Up to $200 Million U.S. IPO / Bloomberg (porous paywall)

Ucommune is preparing to raise as much as $200 million in a 2020 U.S. initial public offering, people familiar with the matter said, a capital infusion that would help the loss-making Chinese startup battle WeWork Cos. across the world’s No. 2 economy.

• Shorting Anta
  Short seller targets Anta in another attack on China’s biggest sportswear company / WSJ (paywall)

Carson Block’s Muddy Waters LLC, a short seller, took aim at Anta Sports Products Ltd., becoming the third firm in little more than a year to question the financials of China’s most valuable sportswear company.

• The tech winter is here
  China’s venture capital boom shows signs of turning into a bust / Bloomberg via Yahoo

China went through a five-year surge in venture capital investment that fostered a new generation of startups from ride-hailing giant Didi Chuxing to TikTok-parent Bytedance Ltd. Now the boom may be over.

Venture deals in China plummeted in the second quarter as investors pulled back amid unpredictable trade talks and growing concerns about startup valuations. The value of investments in the country tumbled 77% to $9.4 billion in the second quarter from a year earlier, while the number of deals roughly halved to 692, according to the market research firm Preqin.

• Xiaomi and Apple
  Apple should sue Xiaomi for its blatant copying — but it won’t / Cult of Mac

Xiaomi has a history of shamelessly ripping off bigger brands, and nine times out of ten, its chosen target is Apple.

Xiaomi’s latest ripoff is its own version of Memoji, and it brazenly stole Apple’s own commercials to promote it on a number of retail channels this week.

• Money market risk
  China’s financial plumbing is getting leakier / WSJ (paywall)
  “Some nonbank financial institutions — a category that includes brokerages, insurers, funds and shadow banks like trusts — appear too dependent on low-quality collateral such as corporate bonds to backstop short-term borrowing. This raises risks for China’s money markets and struggling corporate borrowers alike.” 

• Gold bugs at the Central Bank
  China’s gold hoard swells / Bloomberg (porous paywall)
  “The People’s Bank of China said Monday it raised reserves for a seventh month in June, adding 10.3 tons, following the inflow of almost 74 tons in the six months through May.”

SCIENCE, HEALTH, AND THE ENVIRONMENT: 

• Genetically engineered soybeans
  Chinese scientists develop gene-edited soybean to grow in warmer climates / SCMP

Chinese agricultural scientists are using gene-editing tools to create soybean mutants that can adapt to warmer climates in low-altitude regions, in a bid to increase production of the crop in southern China.

• Coal and the Bengal tiger
  China scrubs its coal projects from ‘world heritage in danger’ decision / Climate Home News

China quashed a move to put a Bangladesh tiger habitat on the list of world heritage sites in danger on Thursday, while scrubbing mentions of Chinese-financed coal projects nearby.

The Sundarbans, which has been on the Unesco world heritage list since 1997, is the world’s largest stretch of mangroves and one of the last remaining strongholds of the endangered Bengal tiger.

• Swine fever
  China could feel swine fever blow for next decade, Cargill says / Bloomberg via SCMP

It could be as long as a decade before China recovers from its outbreak of African swine fever, the deadly pig disease that is decimating hog herds in the world’s largest pork consumer. That is according to Cargill, one of the world’s largest agricultural commodity traders. 

• Expensive drugs
  A Xi’an girl’s escape from early death sheds light on China’s arduous journey to make drugs affordable for rare diseases / SCMP
  “An article about a girl who was less than 5 years old when doctors diagnosed her with mucopolysaccharidosis (MPS), an extremely rare disease that becomes progressively more debilitating. Her case sheds light on the plight of individuals and families in China who often struggle to get access to certain life-saving drugs and medicine.”

POLITICS AND CURRENT AFFAIRS:

• Hong Kong extradition law protests
  HK artist first to be charged over demonstrations / Taipei Times
  “A Hong Kong street artist was yesterday charged with assaulting a police officer and criminal damage, the first prosecution against an anti-government protester since the territory was rocked by unprecedented demonstrations.”
  Hong Kong journalism groups accuse police of assaulting reporters and photographers during extradition bill clashes in Mong Kok / SCMP
  Hong Kong protesters consider Bank of China ‘stress test’ in bid to pressure gov’t / HKFP

• China in Kyrgyzstan
  Chinese private security moves into Central Asia / Diplomat (porous paywall)
  “As Kyrgyz President Soornbay Jennbekov pushed efforts to make the China-Kyrgyzstan-Uzbekistan Railway a reality, a private Chinese security company signed deals to protect the contested project for China Railway Group. The 2016 Chinese embassy bombing in Bishkek heightened risk perception among the Chinese business community in Central Asia.”
  A power plant fiasco highlights China’s growing clout in central Asia / NYT (porous paywall)

An aging plant that provided nearly all the heat and electricity for the country’s capital was on its last legs. As the officials were weighing rival bids to reconstruct the plant, letters arrived at the Kyrgyz Energy Ministry and Foreign Ministry from the Chinese Embassy in Bishkek, the Kyrgyz capital. They strongly “recommended” a Chinese company called TBEA as the “only executor” for the project, worth hundreds of millions of dollars.

It was more than just a recommendation. China was dangling the prospect of a loan to Kyrgyzstan, a Central Asian nation of 6.2 million people, but made clear that its favored contractor had to be chosen. 

…The 2013 decision to choose TBEA over a far more experienced Russian company led to disaster. Last year, soon after the overhaul was completed, the plant broke down, leaving much of Bishkek without heat or electricity in freezing weather.

• Yet another exit ban
  Detained Australian writer’s wife banned from leaving China / SCMP
  The wife of Yáng Héngjūn 杨恒均, a Chinese-Australian writer who has been detained by security forces since January this year, “has been refused permission to leave China six months after her husband was taken into custody.”

• Internet censorship
  China sperrt die F.A.Z. / Frankfurter Allgemeine Zeitung (in German)
  From Andreas Rinke on Twitter: “China blocks the homepages of big German newspapers…Frankfurter Allgemeine Zeitung and Süddeutsche Zeitung.”

• Taiwan quest for recognition
  Taiwan’s status is a geopolitical absurdity / Atlantic
  Chris Horton writes: “The island is not recognized by its most important ally, faces an existential threat from territory it claims as its own and its sovereign status is being gradually erased by companies seeking to preserve access to the world’s largest market.”

• Missiles in the South China Sea, and Australian war games
  China denies U.S. accusations of South China Sea missile tests / Reuters
  “China’s Defense Ministry on Friday denied U.S. accusations that the Chinese military had recently carried out missile tests in the disputed South China Sea, saying instead that they had held routine drills that involved the firing of live ammunition.”
  Chinese warship being tracked as it heads towards US-Australia war games / Reuters via SCMP
  “Australian defence officials said on Monday they were tracking a Chinese surveillance ship that is expected to position itself just outside its territorial waters to monitor military exercises between Australia and the United States.”

• Meng Hongwei’s wife sues Interpol
  Wife of ex-Interpol chief sues agency, accuses it of ‘complicity with China’ / SCMP
  The wife of former Interpol head Mèng Hóngwěi 孟宏伟 who disappeared and was later charged with corruption “has launched a lawsuit against the global policing body at the Permanent Court of Arbitration” alleging that “the global policing body had attempted to gag her.”

• The PLA in Rwanda
  Rwandan troops trained by Chinese mark 25th anniversary of liberation / SCMP
  “Leaders from seven African nations [were] among thousands watching parade to commemorate end of the 100-day genocide in 1994 against the Tutsi minority. The PLA sent over drill instructors in April to help train soldiers, who shouted commands in Mandarin during the event.”

• The PLA in Cambodia?
  ‘Real concern’ Cambodia may host Chinese military assets, despite defense minister’s downplay: U.S. / Radio Free Asia
  “The U.S. Embassy in Cambodia on Tuesday hit back at Minister of Defense Tea Banh’s bid to downplay suspicions that his government plans to host Chinese military assets at a U.S.-funded naval base in Preah Sihanouk province, warning that such a move would ‘weaken Cambodia’s independence’ and threaten ASEAN.”  

• The current political climate
  Is China headed towards another Cultural Revolution?: An interview with Professor Xu Youyu / HKFP
  An interview by Filip Jirouš with Xú Yǒuyú 徐友渔, a political science scholar who has done extensive research on the Cultural Revolution and says “China is now moving towards the Cultural Revolution, moving towards North Korea.” 

SOCIETY AND CULTURE:

• Disney’s new Mulan
  Chinese netizens react to first look at disney’s live-action “Mulan” / RADII China
  The first trailer for Disney’s new live-action Mulan film was released on Sunday. “A poll from Weibo’s movie account had over 60 percent of 140,000 respondents describing themselves as ‘satisfied’ with the new trailer, at time of writing.”

• Beijing bikini not welcome in Jinan
  Chinese city’s ban on ‘Beijing bikinis’ leaves men hot under collar / The Guardian
  “Jinan’s diktat on ‘uncivilised’ baring of male midriffs among list of banned behaviours.”

• White Rabbit candy
  Sweet Memories / The World of Chinese
  An article on China’s iconic White Rabbit Candy, detailing its history, its re-creations from ice cream to lattes, and attempts to expand its appeal abroad.

• Sexual abuse of children
  Chinese tycoon Wang Zhenhua ‘took children as his playthings’ / SCMP
  As we noted last week, Wáng Zhènhuá 王振华, the chairman of real estate enterprise Future Land, has been detained on charges of child rape. Since then, China’s Central Political and Legal Affairs Commission has publicly stated that he “took children as his playthings,” and went on to say he would be brought to justice.
  China’s child sexual abuse in numbers / CGTN
  Between 2015 and 2018, Chinese courts heard 11,519 cases involving allegations of child molestation, according to the Supreme People’s Court…”These cases by no means represent the real number,” says [the] head of Girls’ Protection, an NGO dedicated to preventing child sexual abuse. “Very few cases make it to court due to the stigma attached to it.”

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After five years of extraordinary growth, venture capital and private equity investment in China slowed sharply in late 2018, and this “capital winter” has continued into 2019. Current U.S.-China tensions are also making some investors more hesitant about investing the funds they have already raised. The consensus among analysts and investors is that the market correction will continue for at least another year or two. The question is what kind of startup ecosystem will emerge from this downturn.

Kuora: Why Chinese people don’t need deodorant

Human beings have two types of sweat glands: eccrine (which are distributed over the skin of the entire body, and found in densest concentration on the palms of the hands and the soles of the feet) and apocrine, which do not help in cooling and are mainly in the armpits and perianal area (i.e., around your privates). Turns out that East Asians — Chinese, Japanese, Koreans — have fewer of the latter, because there’s a gene called ABCC11 that is non-functional in 80 to 95 percent of East Asians.

In Chinese soccer, a tale of two nationalities: Or, the difference between Brazil and Tibet

Reports this week confirmed that Elkeson — a Brazilian football player with no Chinese heritage whatsoever — will soon become a naturalized Chinese citizen, and be eligible to play for the Chinese national team. Meanwhile, one New Zealand teenager has been denied the chance to play in the Gothia Cup China — an offshoot of Sweden’s famous Gothia Cup, a.k.a. the World Youth Cup — this summer in Qingdao due to visa complications. Nyima Tsering-Young, born to a Tibetan father, was set to play for a Kiwi academy team in the tournament, but while all his teammates’ visas had been processed in New Zealand, Nyima’s passport was sent to China.

Friday Song: Ty. doesn’t want to go to America, so he wrote a rap called ‘America’

There’s no doubt that the Higher Brothers are the most internationally successful rap act to come out of the Chengdu Rap House (CDC/说唱会馆), the name given in 2008 to the southwestern city’s trap scene. Slightly less known to the international community — but just as popular back home — is their friend and collaborator, the lanky and deadpan Ty.

SINICA PODCAST NETWORK

Sinica Early Access: Searching for Roots in China

This week, Kaiser chats with Huihan Lie, founder of the genealogical research startup MyChinaRoots, and with two of his colleagues, Clotilde Yap and Chrislyn Choo. The three have fascinating things to say about why a growing number of people are taking a new interest in their ancestry in China, how their company goes about finding information on the family histories of people even several generations removed from China, and some of the surprising and occasionally scandalous things they unearth when they start digging.

• Sinica Early Access is an ad-free, full-length preview of this week’s Sinica Podcast, exclusively for The China Project Access members. Listen by plugging this RSS feed directly into your podcast app.