Taiwanese man accused in Hunan of subverting the state – China’s latest top news

Xinhua confirms arrest of missing Taiwanese man for ‘subversion of state power’

Lee Ming-cheh 李明哲 is a community college manager from Taiwan whose more informal discussions of human rights with friends in the mainland through social media may have led to his disappearance in March this year after entering the southern Chinese city of Zhuhai from nearby Macau.

Xinhua News Agency has confirmed (in Chinese) that he had been formally arrested by state security authorities in the southern province of Hunan on suspicion of subversion of state power. The Guardian has a report in English. Lee is reported to have had regular chats with friends on the mainland about issues that are considered sensitive, but there have not been any media reports or allegations from the Chinese government of specific acts that made Lee a target.

It’s not the sharing economy, it’s the mobile rental economy

Last week, we published a video about new sectors in China’s sharing economy: short-term rentals of cell phone chargers and umbrella rentals powered by smartphone. Then we asked if the fact that 40 venture capital companies have invested in cell phone charger rental startups might signal a bubble.

On the weekend, the New York Times looked at the sector (paywall). Highlights:

• There were $500 billion in transactions last year in sharing, a number that will grow and be projected to account for 10 percent of China’s economic output by 2020.

• There are startups that want to share umbrellas, concrete mixers, mobile phone power banks, and basketballs.
• Unlike sharing business models in the U.S., such as Airbnb and Uber, which “provide a platform that connects users to existing resources, companies in China own the product and rent it out to users,” evolving into something like an internet-enabled rental business.

The Financial Times also published an article (paywall) that looks in more detail at business models and what it calls their “mercantile twist:”

• “The big prize for these companies is not a slice of transaction revenues but data. Goods rented out many times provide troves of statistics on usage habits.”
• The FT includes “telephone box-style karaoke booths outside malls and supermarkets,” which “allow crooners to dart in for a swift lunchtime song or two” in the sharing economy.
• Didi Chuxing, the ride-hailing app that ate Uber alive in China, has partnerships with companies that rent cars to their drivers. Many drivers also make use of a service that rents out number plates to drivers to help them get around car restrictions in congested cities.

At The China Project, we’d like to propose abandoning the descriptor “sharing economy” in favor of calling it what it is: the mobile rental economy.

What is the use of an aircraft carrier for China?

On China-U.S. Focus, Zhou Bo 周波, an honorary fellow with the Center of China-America Defense Relations at the Chinese army’s Academy of Military Science, explains why China wants aircraft carriers in a world where asymmetric warfare makes “such a jumbo vessel seem little more than a slow-moving target for the precision-guided cruise missiles”:

• FONOPS deterrence: Zhou says “it remains to be seen” if the U.S. will continue with its “freedom of navigation operations” (FONOPS) in contested South China Sea waters after the People’s Liberation Army Navy launches its new carriers.
• “Maritime trade accounts for 90% of world trade, therefore international ‘choke points’ like the Strait of Hormuz, Strait of Bab-al-Mandeb and Strait of Malacca are critically important for China, the largest trading nation in the world.”
• Zhou says China does not want to control these straits, “but it doesn’t want the straits to be controlled by others, either.”
• “Towering aircraft carriers with overwhelming military superiority and huge psychological effect” help put into practice ancient Chinese military strategist Sun Tzu’s advice “to subdue the enemy without using force.”

Five-layer highway overpass

CGTN has a photo of a spectacular piece of road infrastructure that opened recently in the city of Chongqing.

Happy Duanwu Festival 端午节!

This year the holiday also known Dragon Boat Festival falls on May 30. Some seasonal reading: Time has an explainer on the origins, traditions, and recent news of the holiday and a story about Google’s Dragon Boat doodle.

—Jeremy Goldkorn, Editor-in-Chief

The plight of China’s family planners

With the loosening of China’s one-child policy, the vast bureaucracy that once enforced it faces an uncertain future and anger from the public. The China Project’s Jiayun Feng reports.

This issue of the The China Project newsletter was produced by Sky Canaves, Lucas Niewenhuis, Jia Guo, and Jiayun Feng. More China stories worth your time are curated below, with the most important ones at the top of each section.

BUSINESS AND TECHNOLOGY:

The Chinese patients are coming

The New York Times reports (paywall) that “Chinese people took an estimated 500,000 outbound medical trips last year, a fivefold increase from a year earlier, according to Ctrip.com,” a travel booking service. There is a growing industry to cater to well-heeled Chinese patients who can’t find the treatment they are looking for at home because of overcrowded hospitals or lack of specialist expertise. Hope Noah Health Company told the Times that it sent more than 1,000 patients to the U.S. and Japan last year on medical treatment packages that included Chinese-speaking concierges/translators, and pre-arranged apartment rentals for patients who do not need to be in a hospital ward.

However, the industry faces problems, including that patients with conditions requiring ongoing treatment may not find suitable care when they return to China. One person interviewed in the Times article started a medical travel business, but is now looking to change his service “into one that [helps] clients look for drugs in Hong Kong and Macau as well as doctors who could treat the problem domestically.”

Domestic medical tourism is already attracting investment: Earlier this month, Bloomberg reported on a $3 billion “medical tourism hot spot” planned for the island province of Hainan.

• Feeding China / Bloomberg
  A series of ten articles on the business, politics, and technology of feeding 1.4 billion people as their growing appetites force “companies to scour the planet for everything from bacon to bananas.”
• Opinion: Don’t worry, Hollywood. China’s not a threat / LA Times
  The China Project editor-at-large John Pomfret writes: “before we unspool into a tizzy of anti-Chinese paranoia, it’s important to remember two things: China’s film industry remains abysmal artistically, and it has begun to flail financially.”
• Is China outsmarting America in AI? / NYT (paywall)
  “The balance of power in technology is shifting. China, which for years watched enviously as the West invented the software and the chips powering today’s digital age, has become a major player in artificial intelligence, what some think may be the most important technology of the future. Experts widely believe China is only a step behind the United States.”
• Is China’s economy turning Japanese? / Financial Times (paywall)
  “Three decades after Tokyo’s property bubble burst causing severe damage, there are fears that Beijing faces a similar fate.”
• While the rest of the world tries to ‘kill email,’ in China, it’s always been dead / Quartz
• Early China data shows slowdown biting amid credit tightening / Bloomberg
• Property buyers hit a brick wall as Beijing tries to avert housing bubble / SCMP

POLITICS AND CURRENT AFFAIRS:

Japan seeks China’s help with North Korea

On May 30, Japanese Foreign Minister Fumio Kishida said in a meeting with China’s top diplomat, Yang Jiechi 杨洁篪, that China should exert greater pressure on North Korea to stop its nuclear and missile development, and that Beijing’s role in getting Pyongyang to abandon those efforts was “crucially important.” As part of Yang’s three-day trip to Tokyo from May 29 to 31, the talk came one day after North Korea fired a missile test on Monday for the third straight week. ABC News reports that the missile “fell in waters about 200 nautical miles off Japan’s western coast, within the Japanese-claimed Exclusive Economic Zone.”

Yang and other top officials from Japan, including Prime Minister Shinzo Abe’s top security adviser Shotaro Yachi, also discussed regional issues of concern. A statement released by China’s foreign ministry says that Yang told Japan it should view China’s development as an opportunity rather than a threat, and it should deal with issues like the South China Sea and Taiwan cautiously. However, the statement didn’t include any mention of North Korea.

• Security firm discovers link between WannaCry ransomware and southern China / Gizmodo
  A security firm analyzed the language of the ransom notes given to victims of the recent global hacking attack called Wannacry, and concluded that the author was likely either “native or at least fluent” in Chinese.
• China’s One Belt, One Road initiative will need Africa’s support to work / Quartz
• A high-proof tribute to Tiananmen’s victims finds its way back to China / NYT (paywall)
• Living on fumes: China’s war on pollution means little to a chemical park’s neighbors / Reuters

SOCIETY AND CULTURE:

Dongguan and Zhengzhou become first-tier cities

On May 25, China’s financial news group Yicai released its 2017 ranking of Chinese cities (in Chinese) according to their appeal to business.

Beijing, Shanghai, Guangzhou, and Shenzhen stayed in their top four positions as “first-tier cities.” Following them are 15 “new first-tier cities,” listed in the following order: Chengdu, Hangzhou, Wuhan, Chongqing, Nanjing, Tianjin, Suzhou, Xi’an, Changsha, Shenyang, Qingdao, Zhengzhou, Dalian, Dongguan, and Ningbo.

The ranking was based on sales data collected from 160 brands and user data from 17 internet companies. Five dimensions were considered in terms of calculating each city’s attractiveness to business, including concentration of commercial resources, suitability as a transport hub, diversity of lifestyle, and future potential.

Although it is common in Chinese business and political circles to classify cities according to tiers, there is no official ranking from the government — the South China Morning Post has a good explainer on the conventional thinking behind the tier concept. In Yicai’s ranking, two notable new entrants to first-tier status are Dongguan and Zhengzhou — two cities that are often the subject of derision in Beijing and Shanghai.

Dongguan is a manufacturing hub that has been in the news in the last few years for its economic slowdown after decades of booming, and for the 2014 crackdown on its notorious sex industry. The Yicai report says the city’s rise in rank is largely due to the city’s excellence in drawing investment: Last year, Chinese telecommunications giant Huawei moved its data center from Shenzhen to Dongguan, sparking rumors that the company is planning to relocate its headquarters there, too. Huawei already has a large office building spread over 1,900 acres that was constructed in 2012.

Meanwhile, Zhengzhou is the provincial capital of Henan, whose people are sometimes openly discriminated against — even by the police — or mocked by bloggers. Zhengzhou’s surge in ranking in the Yicai list was due to the opening of the Zhengzhou-Xuzhou high-speed railway last year. As a key project of the country’s 12th Five-Year Plan, the railway greatly reduced travel time from central and western China to the east coast.

Online, not everyone was delighted to see their city’s name appear in the ranking. For Zhengzhou residents, the city’s rise triggered their concerns about living costs: “Zhengzhou’s property price is first tier, but my income is still third tier,” wrote (in Chinese) one commenter from the city. Others complained that the new first-tier cities entered the ranking unfairly: “Almost all the resources in Sichuan were invested in Chengdu. It’s unfair to other second-tier and third-tier cities in the province,” said (in Chinese) one resident of another city in the province.  

• China defamation law – based on a (mostly) true story / China Film Insider
  “In China, the law on defamation is markedly different. Truth is not a defense, and you can defame someone even if they’re dead. That can (and does) have a chilling effect on biopics in China.”
• Chinese couples desperate for children turn to illegal surrogacy / Caixin
• Rela, China’s leading lesbian app with over five million registered users, gets shut down / Shanghaiist
• Where did that rice in your bowl originally come from? / SCMP
• Qiu Yang becomes first Chinese director to win a short film Palme d’Or / China Film Insider
• Museum honoring ‘Rape of Nanking’ author Iris Chang opens in China / Mercury News