Links for Tuesday, July 6, 2021

BUSINESS AND TECHNOLOGY:

HK beverage maker roiled in Chinese netizen controversy
Hong Kong beverage maker Vitasoy is the latest target of Chinese netizen calls for boycotts after an employee circulated a memo online offering condolences to the family of a worker who had stabbed a Hong Kong police officer, per Nikkei Asia.

• On Saturday, in a statement on Weibo, Vitasoy called its staff member’s actions “extremely inappropriate,” but the Chinese internet has not been mollified and two Chinese actors have already cut ties with the company.
• The memo was sympathetic to a family of a 50-year-old Vitasoy worker who had stabbed a police officer and then killed himself last Thursday, on the anniversary of the former British colony’s return to Chinese rule.
• Context: As the recent Xinjiang cotton controversy demonstrates, the threat of commercial sanction is a powerful tool utilized by Chinese citizens as well as the government.

Hong Kong drinks company Vitasoy faces China netizen calls for boycott / Reuters (porous paywall)
Vitasoy plunges amid boycott calls after Hong Kong cop stabbing / Bloomberg (paywall)
Vitasoy shares tumble as netizens blast Hong Kong firm for memo following stabbing of policeman / HKFP

Pet lifestyle brand bags $8 million in Series B+ funding
Pidan, a “pet lifestyle brand” that sells pet food, services, and supplies, received $8 million in funding, per 36Kr (in Chinese).

• The company’s claim to fame was an award-winning litter box in 2018. Since then, the team redefined the brand, going from a pet supply store to an entire pet lifestyle brand.
• In June of this year, Pidan’s monthly sales reached $6 million.
• China’s pet market is soaring: According to a 2021 report, the market reached $4.5 billion in 2020, and is growing at 14.2% annually.

Solid-state batteries are coming to China
Solid-state batteries — cheaper and longer lasting than traditional lithium-ions — are regarded by many as the future of the electric vehicle (EV) industry.

• So far, U.S.-based QuantumScape is the frontrunner in the solid-state battery space. At its peak, the company was valued higher than Ford and General Motors, though it has yet to produce a single battery.
• But Chinese companies are entering the field. Enpower Greentech, a China-based solid-state battery startup backed by SoftBank, released a high-density battery cell of 450Wh/kg in March, one of the highest in the industry, per 36Kr (in Chinese).

Global competition for chips
The tech cold war’s ‘most complicated machine’ that’s out of China’s reach / NYT (paywall)

• Dutch company ASML’s chip-making machine, which costs $150 million and relies on a complex global supply chain, is “widely acknowledged as necessary for making the most advanced chips, an ability with geopolitical implications.”
• The Dutch government, at the U.S.’s behest, has blocked sales of the machine to China since 2019, and experts say it would be nearly impossible for China to build its own.

China’s Wingtech buys troubled top U.K. chipmaker / Caixin (paywall)
China-owned Nexperia reportedly looks to snap up Welsh auto chipmaker for $87 million / Caixin (paywall)
Key researcher leaves Chinese mainland’s leading chipmaker / Caixin (paywall)
Chinese-owned firm acquires U.K.’s largest semiconductor manufacturer / Guardian

China’s EV companies ramp up global operations
Volvo, Daimler and Traton plan European charging network for trucks / Caixin (paywall)
“Just days after announcing its $2.4 billion investment in a France-based battery plant to supply Renault, Envision AESC, the battery unit of Shanghai-based green tech company Envision Group, unveiled a similar agreement that allows it to be part of Nissan’s strategy to accelerate the localization of its electric-vehicle battery manufacturing in the U.K.”
EV battery-maker Envision AESC to build U.K. plant to supply Nissan / Caixin (paywall)
Tesla’s fall from grace in China shows perils of betting on Beijing / Bloomberg (paywall)

Xiaomi invests in R&D, engineers
Xiaomi’s $237 million share incentive plan aims to retain talent / Caixin (paywall)

• “Xiaomi has awarded more than 70.2 million shares to 3,904 employees including young engineers, those in core positions and fresh graduates, the company said in a statement on Friday.”
• The move comes as the smartphone maker has been investing heavily in R&D and engineer recruitment efforts.

Suning’s bailout
Alibaba joins $1.36 billion state-backed bailout of debt-ridden Suning.com / Caixin (paywall)
“After months of financial turbulence, cash-strapped e-commerce giant Suning.com Co. Ltd. has announced an 8.8 billion yuan ($1.36 billion) bailout by a consortium backed by Alibaba Holdings Co. Ltd. and several government funds.”
China defaults threaten an eerily calm $12 trillion bond market / Bloomberg (paywall)
The days of Beijing backstopping even its most vulnerable companies’ credit defaults are coming to a close, and defaults are expected to rise as a result.

Can a Taiwanese game recover?
A Taiwanese horror game that angered Chinese players returns. Can it move past its unintended politics? / Washington Post
The game, Devotion, has returned after sparking heated controversy in 2019. The question now is: Can the game move on from its bad reputation among Chinese gamers?

A fall in auto sales
China’s auto sales likely to fall 16% in June, trade body says / Reuters (porous paywall)
“China Association of Automobile Manufacturers (CAAM) said on Monday that it expects vehicle sales in China to hit 1.93 million units in June, down 16.3% from a year earlier.”

Global investors buy China’s debt
Foreigners go deep into China with record local debt binge / Bloomberg via Caixin (paywall)
“Global investors made their biggest ever purchases of Chinese municipal debt in June, an indication of growing confidence in a market that’s becoming a global asset.”
“Overseas investors added $113 million of local government notes in June, a record gain in data going back to 2018.”

EU businesses want a stronger hand, but still maintain ties with China
European business leaders want a stronger hand with China, not decoupling / WSJ (paywall)
“A powerful European business lobby group called on European Union politicians to push back harder against China’s state capitalism but not to lock out Chinese businesses, as advocated by some leaders who are following the U.S.’s lead on limiting commercial ties to China.”

SCIENCE, HEALTH, AND ENVIRONMENT:

Chinese astronauts take first space walk
Watch Chinese astronauts’ first spacewalk outside new space station / WSJ (paywall)
First astronauts at China’s new space station conduct spacewalk / HKFP
Chinese astronauts make first spacewalk outside new station / AP via Bloomberg (paywall)
“Two astronauts on Sunday made the first spacewalk outside China’s new orbital station to set up cameras and other equipment using a 15-meter-long (50-foot-long) robotic arm.”
Watch the video here.

COVID-19 and vaccine updates, from Taiwan to Yunnan to South Africa
Taiwan aims for 20 percent of population vaccinated by end of July / SCMP (paywall)
Taiwan looks at easing coronavirus restrictions as case numbers fall / SCMP (paywall)
Third lockdown imposed on southwest China border town after Delta variant appears / Caixin (paywall)
Ruili, a center of trade with neighboring Myanmar, confirmed three new local COVID-19 infections on Sunday.
South Africa gives green light to China’s Sinovac vaccine / SCMP (paywall)
“The surge in infections in Africa’s most industrialized nation has overwhelmed hospitals, especially in the main city of Johannesburg, and left overworked health personnel struggling to find enough beds for critically ill patients.”

Genetic study in northeastern Asia
Scientists find genetic differences between northern Chinese, Koreans and Japanese / SCMP (paywall)
“Researchers at China’s top forensic academy in Beijing say they have found genetic differences between three ethnic groups in East Asia…These differences are coded in less than 50 variations across the sequence of the human genome, and the scientists said these genetic codes could be used by police to trace someone’s origin as a way to help identify a body.”

Methane leak in China’s coal hub, Shanxi
Huge methane leak spotted in heart of China’s top coal hub / Bloomberg (paywall)
“A massive plume of methane, the potent greenhouse gas that’s a key contributor to global warming, has been identified in China’s biggest coal production region,” and is “so far attributed to the global coal sector and likely emanated from multiple mining operations.”

POLITICS AND FOREIGN AFFAIRS:

China-Japan relations
Japan deputy PM comment on defending Taiwan if invaded angers China / Reuters (porous paywall)
“Japan’s deputy prime minister said the country needed to defend Taiwan with the United States if the island was invaded, Kyodo news agency reported late on Monday, angering Beijing which regards Taiwan as its own territory.”
Aso walks back claim Japan would join U.S. in defense of Taiwan if mainland Chinese forces invade / SCMP (paywall)
“Senior members of the Japanese government were quick to qualify Aso’s comments, with Chief Cabinet Secretary Katsunobu Kato saying they were the minister’s personal opinion and Defence Minister Nobuo Kishi adding that there had been no change in Tokyo’s support for the ‘one-China’ policy, under which Taiwan is not regarded as a country.”
Japanese Communist Party snubs China’s Communist Party on centenary, saying it is ‘not worthy’ of name / SCMP (paywall)
The Japanese Communist Party (JCP) continues to distance itself from the Chinese Communist Party (CCP), “refusing to congratulate on the centenary of its founding on July 1. Instead, JCP chairman Kazuo Shii used the anniversary to lambast China’s government in a series of tweets.”

• “He cited Beijing’s ‘aggressive’ territorial claims and described its treatment of Hong Kong and the Uygur Muslim minority in its westernmost province of Xinjiang as ‘human rights violations.’”
• “‘[These] have nothing to do with socialism and are not worthy of the name of a communist party,’ he wrote.”

German academic charged with spying for China
German think tank chief arrested on charges of spying for China / SCMP (paywall)
Retired German political scientist charged with spying for China / Reuters (porous paywall)
“A retired German political scientist has been charged with spying for China for almost a decade, using the political contacts he developed while working for a think tank, the German federal prosecutor’s office said on Tuesday.”
German academic charged with spying for China / HKFP

China-India relations: India vamps up infrastructure, and Modi calls the Dalai Lama
China-India border dispute: New Delhi talks up infrastructure build-up in strategy shift against Beijing / SCMP (paywall)
“In the last month, Indian Defence Minister Rajnath Singh has undertaken two highly publicized visits to inaugurate 63 new bridges and 12 roads across seven states which border China.”
India’s Modi phones Dalai Lama on birthday, sign of friction with Beijing / Reuters (porous paywall)
“Indian Prime Minister Narendra Modi let the world know on Tuesday that he had personally wished Tibet’s spiritual leader the Dalai Lama a happy 86th birthday in a phone call, disregarding any potential disapproval from China.”

China-EU relations: Cooperation with Germany and the U.K.?
German, Chinese defense ministers discuss South China Sea in call / Reuters (porous paywall)

• “German Defense Minister Annegret Kramp-Karrenbauer discussed the situation in the South China Sea with her Chinese counterpart Wei Fenghe, including the upcoming deployment of a German frigate there, the Berlin ministry said.”
• “The ministry said Kramp-Karrenbauer had used the video conference to remind Wei of the importance of upholding a 2016 arbitration decision that limited China’s claims to some sea areas in the body of water,” as well as human rights questions on the Uyghurs.

China’s Premier Li hopes for healthy, stable relationship with Britain / Reuters (porous paywall)
“China is willing to improve cooperation with Britain while reserving differences,” Premier Li Keqiang said.
Merkel, Macron discuss EU ties, trade, climate with China’s Xi / Reuters (porous paywall)
China’s Xi tells Macron, Merkel he hopes to expand cooperation with Europe / Reuters (porous paywall)
“The conversation also revolved around cooperation in the fight against the COVID-19 pandemic, global vaccine supply, and international and regional issues.”
Xi Jinping, Angela Merkel and Emmanuel Macron throw support behind EU-China investment deal, Beijing says / SCMP (paywall)
“The leaders of China, France and Germany threw their support behind an EU-China investment agreement on Monday, despite the deal’s failure to gain widespread backing in Europe, according to a Chinese summary of a video call between the three countries’ leaders.”
EU envoy urges China to bridge ‘trust deficit’ to revive investment deal / SCMP (paywall)

Iran nuclear talks
France, Germany, China push to revive Iran nuclear talks / AP
Iran informs IAEA of plans to produce enriched uranium / Reuters (porous paywall)
“Iran has given notice of concrete steps to produce uranium metal enriched to up to 20% purity for reactor fuel, the U.N. atomic watchdog said on Tuesday, describing a move that is likely to anger Western powers in talks to revive the Iran nuclear deal.”

Hong Kong in the national security law era
An officer stabbed. A bomb plot foiled. A specter of violence divides Hong Kong. / NYT (paywall)
“But democracy activists have accused the government of creating an environment in which lawful, peaceful protest is impossible — leaving residents desperate and, in some cases, radicalized.”
Hong Kong police arrest nine suspected of terrorist activities / Reuters (porous paywall)
The group, Returning Valiant, consisted mostly of younger individuals. Members “deliberately recruited secondary students who planned to leave Hong Kong for good,” said Senior Superintendent Steve Li.
Hong Kong ‘revolutionary’ group members arrested over alleged plot to wage citywide campaign of terror / HKFP
HK leader says ‘ideologies’ pose security risk, teenagers need to be monitored / Reuters (porous paywall)
Hong Kong’s new number two handed second key role as head of powerful election vetting body / HKFP
“Hong Kong’s newly-appointed number two official, John Lee, has been handed another key position in the administration of the city with him being installed as head of a powerful committee which will vet candidates for upcoming elections.”
Two arrested over social media messages inciting violence against Hong Kong police / HKFP
At least 8 Hong Kong pro-democracy groups disband in past 2 weeks, including lawyers’ group / HKFP
The Pulse with Steve Vines is latest news show to be axed by public broadcaster RTHK / HKFP
“Vines told HKFP that management would not allow his team to tell the audience that it was their last show. Vines said they also cut a part of his sign-off at the end of the show when he said ‘in these uncertain times, who knows what the future will be…goodbye and good luck.’”
HK activist returned from Chinese jail pleads guilty to attempted arson / Reuters (porous paywall)
“One of the Hong Kong democracy activists who was returned from a Chinese jail after being captured at sea last year, pleaded guilty in court on Tuesday to charges of attempted arson and possessing dangerous objects.”

U.S.-China relations: Washington might use fewer sanctions, but will keep pressure on in other ways
Biden to temper U.S. use of sanctions weapons, officials say / WSJ (paywall)
“The Biden administration is revamping the way the U.S. uses punitive sanctions, aiming to stem sweeping pressure campaigns, avoid collateral economic damage and act jointly with allies rather than unilaterally, according to people involved in the planning process.”
China, U.S. can coexist in peace but challenge is enormous / Reuters (porous paywall)
“Campbell said the challenge for the United States would be to come up with a strategy that presented China with opportunities, but also a response if it takes steps ‘antithetical to the maintenance of peace and stability.’”

Students shut out in U.S. and China
China calls on U.S. to end ‘toxic’ Trump-era visa rules for students / SCMP (paywall)
“State newspaper China Daily reported on Tuesday that the Biden administration rejected visas for more than 500 Chinese students who had offers for postgraduate study in the sciences at top American universities.”
Foreign students wait for green light to return to China with growing concern / SCMP (paywall)
“Tens of thousands of foreigners have been waiting to resume their studies for more than a year…Business travel is now allowed but despite Beijing’s insistence that students are ‘forever friends’ there has been little official response.”
Eric Hundman on Twitter: “Of the almost half a million international students studying in China before 2020, only a handful of students from (as far as I’m aware) only two international schools have been allowed to return.”

Younger leaders in the PLA
China’s military modernization continues with new commanders’ swift promotions / SCMP (paywall)
“The promotions mean half of the 10 top People’s Liberation Army (PLA) commanders, covering the five theatre commands and branches, are aged 60 or younger, in what military observers saw as reflecting the ongoing military reform, which highlights that military officers’ positions should be consistent with their ranks.”

Chairman detained for attacking two academics
Alleged assault on scientists overshadows China’s space race success / FT (paywall)
“An alleged attack on two eminent scientists by a Chinese aerospace executive and Communist Party official after he had been drinking has sparked a wave of public anger and threatens to embarrass Beijing as it seeks to build an internationally respected space programme.”
Chinese police detain aerospace investment chairman over alleged attack on academics / SCMP (paywall)
“The chairman of a Chinese aerospace investment firm has been detained by Beijing police for allegedly attacking two academics, one of them in her 80s.”

SOCIETY AND CULTURE:

The youth counterculture of “chilling”
These Chinese millennials are ‘chilling,’ and Beijing isn’t happy / NYT (paywall)
“Young people in China have set off a nascent counterculture movement that involves lying down and doing as little as possible.”
See some of their posts here.

A points system for parenting in Hangzhou
Chinese province creates points system at parenting school that teaches people how to raise children / SCMP (paywall)
“A city in eastern China is launching a point system at its first-ever parenting school, giving parents who successfully participate certificates and hope to promote it across the province.”

Tokyo Olympics
China on course to send record number of athletes to COVID-hit Olympics / Reuters (porous paywall)
China name experienced gymnastics line-up for Tokyo / Reuters (porous paywall)

Few urban families want a third child, surveys show
Surveys in Chinese cities show only 4% of urban families have willingness to have third child / Global Times