Editor’s note for May 10, 2023

Dear reader:

Our top story today is about TuSimple, a self-driving truck company with a foot on each side of the Pacific that is running into trouble because of it. To paraphrase China’s former leader Jiāng Zémín 江泽民, was the company “TuSimple, sometimes naive?”

And is Beijing being too simple and naive in its dealings with the Taliban? China’s Foreign Ministry today called for Afghanistan’s government to soften its medieval policies on women and also to be more forceful in cracking down on terrorism.

Our Word of the Day is: Self-driving truck (自驾货车 zìjià huòchē).

Finally, below is a note from our CEO Bob Guterma on the ongoing reporting on Capvision and other research firms that have been facing Chinese government scrutiny. He suggests much of the recent media reporting has been too simple, sometimes naive!

—Jeremy Goldkorn, Editor-in-Chief

I was Capvision’s inaugural Chief Compliance Officer, serving in that role from 2012 to 2015. Before that, I worked in the corporate investigations and due diligence space at Control Risks. Most of my career has been focused on China-related information and consulting services, and there is a lot that the media is getting wrong lately, and especially regarding Capvision.

First of all, Capvision is a 100% Chinese company. So whatever else may be going on, this incident does not support the narrative of a crackdown on foreign businesses or consulting firms operating in China. The government announcements don’t even identify the foreign clients in play.

More importantly, if this happened in the U.S., the government here would respond exactly the same way. If a U.S. expert network, let’s say GLG, facilitated the sale of military secrets to a Chinese, or any other overseas, client, the FBI would raid their offices, press charges, and so on. Would we feel that the U.S. was thereby becoming inhospitable to foreign business?

Lastly, while the overall direction of travel for the ease of doing business in China is definitely bad, the media seems to be working overtime to fit each and every incident that takes place to fit this narrative. For example, the Bain & Co. “raid” — was anyone arrested, were any charges pressed, were any computers taken from the offices, or did anything more than an “unannounced visit” take place? An unannounced visit from the government would’ve been a slow Tuesday in 2009 when I lived and worked in Shanghai. Those visits are totally standard operating procedure for an information-centered business in China. To call the Bain inspection a “raid” is disingenuous. And for what it’s worth, companies like Mintz have been getting in trouble in China consistently for decades, and almost always for actually doing stuff that they knew was illegal. I have no sympathy for Mintz.

Everyone needs to grow up and stop pretending that doing business in China should exactly match what it’s like doing business in Kansas, and especially that doing illegal stuff in China should not match what doing illegal stuff is like in Kansas!

—Bob Guterma, CEO