1 Talking Point 6 Week in 60 Seconds 7 and the World Week in China 8 Banking and Finance 9 Rise of the RMB 10 Internet and Tech 11 Auto Industry 13 Society and Culture 25 November 2016 18 And Finally Issue 347 19 The Back Page www.weekinchina.com

Frozen out a n i h C

e n i g a m I

Gree’s longtime boss gets demoted as state shareholder revolts

over her push into electric cars Brought to you by Week in China Talking Point 25 November 2016

Disagreeing with Dong Powerful boss demoted as state shareholders block bid for Yinlong

Dong Mingzhu says Gree must change direction, but her state backers didn’t like the plan

ith Midea taking over the wunderkind and the scientist- jinmintui trend (‘the state advances, WGerman robot maker Kuka turned entrepreneur also ventured the private sector recedes’) and he and GE Appliances now a unit of into the auto industry with the ac - filed lawsuits against several firms Haier, China’s white goods firms quisition of three carmakers. But including Hisense, seeking Rmb48.9 have become a major force in the Greencool’s expansion pitted the billion ($7.1 billion) in compensa - country’s global M&A spree. native against businesses tion. The claim was rejected. About 10 years ago the most ac - owned by local governments. Rivals Gu’s case is worth recalling at a quisitive firm in the sector was accused him of embezzling state- time in which another business Greencool. It was founded in 1992 owned assets and his private-sector leader in ’s white goods by Gu Chujun, when he patented a empire unravelled. He was detained sector has been embroiled in a freezing agent for fridges and air- in 2005 and later sentenced to 10 power struggle with the local gov - conditioners. In 2001 Greencool years in jail for crimes including fal - ernment. The authorities – took over Guangdong Kelon, then sifying his accounts. shareholders in Gree Group – said the leading refrigerator maker (and Kelon then became a takeover this month that they had decided P h o based in Shunde, where Midea is target once more. In 2006 it was to remove the company’s chair - t o :

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a also headquartered) plus several of purchased by Hisense. After early woman Dong Mingzhu from the g i n e

C its rivals in other provinces. Gu was release in 2012 Gu insisted that he top post, although she will stay on h i n a viewed as something of a corporate was an innocent victim of the guo - as boss of the state firm’s listed 1

Week in China Talking Point 25 November 2016

unit, . Dong’s demo - tion follows a major falling out with the Zhuhai government over Gree Electric’s planned expansion into electric vehicles. Onlookers now wonder what’s next for the air- conditioning giant.

Who is Dong Mingzhu? The 62 year-old has a reputation as one of the toughest businesswomen in China. Born in Jiangsu, Dong was working as a junior government offi - cial in when her husband died. In 1990 she quit her job and took her eight year-old son to Zhuhai where she joined Gree as a salesper - son. Gree was then a struggling maker of air-conditioners and the in - experienced Dong was sent to some Gree is China’s leading manufacturer of air-conditioners of the least-promising sales territo - ries. But the single mother always What’s special about her removal? Sasac, the agency that manages came back with big orders and by As of this week -listed state-owned assets, was the method 1992 she was responsible for one Gree Electric was reporting a market used to demote her from the top job eighth of Gree’s sales. value close to Rmb150 billion (that at Gree Group. Onlookers are won - Dong was promoted to head of compares with Midea’s Rmb180 bil - dering if this is undeserved treat - sales in 1994, with Gree still in poor lion). Sitting on a cash pile of nearly ment for a loyal and outstanding shape. It faced fierce competition Rmb100 billion, Gree is well re - servant, Southern Metropolis Daily from other air-con makers, and sourced for a series of M&A deals. notes. But the bigger question is many of its senior executives were But Dong is unusual in her industry. whether Dong’s chairmanship of jumping ship to more diversified ri - Some of her rival bosses have be - Gree Electric is also under threat. vals. Gree lacked resources. At one come billionaires. The founder of point, according to China Business Midea, He Xiangjian, for one, now What triggered the move? Journal, Dong and a group of 20 sits on a controlling stake in Midea Competition among the leading salespeople had to face the 1,000- and CBN estimates that He is worth white goods makers has intensified strong sales force at then-market- Rmb65 billion. Meanwhile, Zhang and all the leading firms are posi - leader Chunlan Air-Con, which was Ruimin, the chief executive at tioning themselves to respond to based in Jiangsu. Haier, has attained political promi - the State Council’s call for the de - Dong was credited with instilling nence as a member of the Party’s velopment of ‘powerful Chinese fighting spirit at the Zhuhai-based high-powered Central Committee. brands’ and the ‘upgrading of the firm. With hard work and a more Politically, Dong isn’t even a Party country’s manufacturing sector’. disciplined focus, Gree prospered, member. Business-wise, she has That’s one of the reasons why growing into the undisputed leader taken on the role of a professional Midea’s buyout offer for Kuka and in the air-con business, and today manager. Her holding in Gree Elec - Haier’s takeover of General Electric’s occupies nearly 40% of the indus - tric is relatively small at 0.74% – ver - white goods unit has had such try’s market share. sus an 18% stake held by Gree strong support (see WiC339). (Chunlan has almost dwindled Group, the state parent under the Dong has been telling her share - into insignificance). Zhuhai government. holders that it is almost impossible Dong was promoted to become That’s meant Dong’s control over for Gree Electric to squeeze out chairwoman of Gree Electric in Gree has proven more vulnerable, higher profit margins or grab much P h o 2007 and five years later she be - despite her contribution to the more market share from its air-con t o :

R e came the head of the parent group company’s growth. Tellingly, a no - core business. Thus she wants to u t e r s as well. tice from the Zhuhai branch of take the company in new directions, 3 Week in China Talking Point 25 November 2016

and Gree has been diversifying into making smartphones and, more re - Planet China cently, electric vehicles (EVs). Strange but true stories from the new China However, the plan to start mak - ing EVs has seen Dong run into op - SINGLE HANDED. position from other shareholders – This year’s Paralympic Games were dominated by the most notably, the Zhuhai govern - Chinese team, which scooped 107 gold medals – almost double its ment. In March this year Gree un - nearest rival, Great Britain. But despite demonstrating how some of its veiled a Rmb13 billion deal to take physically-impaired nationals can triumph as world-class athletes, a more over the Zhuhai-based electric vehi - recent story shows there’s one field in China where they aren’t permitted cle maker Yinlong, as well as its New to advance: truck driving. York-listed battery producer Altair. During an operation to make sure that trucks weren’t being overloaded, The bid was part of Dong’s plan for a police in Hunan province pulled over a driver who had stacked his vehicle strategic overhaul. Demand for air too high with cargo. From inside the cab, the driver handed over his conditioners has softened, leading insurance details and planned route to the officers as requested, but stalled when he was asked to produce his driving licence. sales to plummet 30% last year. But Following his hesitation the officers asked the man to step down from the proposal was blocked by share - the truck and were shocked to find that he only had one arm. According to holders. The setback left Dong furi - ThePaper.cn, the driver had bought a truck at the beginning of October, ous, and she berated investors at the planning to engage in the logistics business. But since hiring a driver was company’s annual meeting (see too expensive, he undertook the role himself. WiC345). Missing an arm prohibits a person from getting a driving licence in Opponents of the deal have been China, but despite the legalities this truck driver had travelled over briefing the press that they want 9,000km delivering goods. Even more impressive is that he is missing his Gree to refocus on its core business, right arm – the one closest to the gear stick. and boost profits there. Some share - The police impounded the truck and demanded that a driver with two holders were concerned that Gree arms come to retrieve it. Meanwhile, Tencent media picked up the story of was overpaying for an unproven a one-armed haulier from Hubei province who has been making his living as an express courier. During Singles’ Day, he worked a 15-hour shift, carmaker (coughing up nearly 30 delivering over 400 packages in his van. Hopefully the media attention times Yinlong’s earnings). And ac - won’t cost this lawbreaker his job too. cording to CBN, the Zhuhai govern - ment – which controls almost a fifth of Gree Electric via Gree commerce giant Alibaba’s Singles’ nothing to do with the so-called Group – was the most cautious Day event on the same day. ‘ curse’ (see Page 13) but about how the deal would be fi - “She is an internet celebrity in her more because Dong concluded she nanced: via a Rm10 billion place - own right,” Youth Daily com - could do a better job. “Spending ment in Gree stock. mented. “Now she has morphed Rmb10 million [a year] on Jackie Also potentially an issue: Dong from the queen of sales into the Chan is too expensive. It won’t cost was proposing to chip in Rmb1 bil - queen of news headlines.” a single penny if I do it myself,” she lion personally in the placement. If In fact Dong has been increas - said. These were calculated moves approved, her stake would be nearly ingly high-profile since taking over but not just for marketing pur - doubled to 1.3%. as the boss of Gree Group in 2012. For poses, Beijing Youth Daily reckons. A week after the initial proposals instance, in late 2014, she made Another outcome was that the pub - for the Yinlong bid were vetoed, headlines for trading barbs with Xi - lic has the perception that Dong Dong was relieved of her role as aomi’s chairman Lei Jun over their and Gree are indivisible. chairwoman of Gree Group and the respective business models, includ - As she put it herself: “There takeover plan was scrapped. ing a widely-discussed Rmb1 billion would be no Gree without Dong bet about whether Xiaomi’s sales Mingzhu; and there would be no Is Dong too outspoken for her would overtake Gree’s within five Dong Mingzhu without Gree.” own good? years (see WiC266). The news of Dong’s demotion, first Indeed, Dong is such a magnet A boardroom struggle? announced on November 11, was for publicity that she even decided Gree Electric’s management has a deemed shocking enough it even to dispense with Jackie Chan as a history of feuding with its state- drew media attention away from e- company ambassador. That had backed parent. In 2005, Gree Group 4 Week in China Talking Point 25 November 2016

sparked the so-called “battle of fa - when Zhou became one of the first that Gree Electric could become an - ther and son” when it proposed to officials to be disgraced by Chinese other Vanke if Dong is also sacked develop new product lines such as President Xi Jinping’s austerity from her post in the listed firm,” he rice cookers and microwaves under campaign. Zhou was photographed writes in his blog. the Gree brand. Ironically in light at an extravagant dinner in close Could a disgruntled Dong quit on of this month’s row, Dong and her proximity to 12 bottles of expensive her own accord, and then head a long-time mentor Zhu Jianghong, wine. He was removed as the chair - hostile takeover bid? The con - who was chairman of Gree Electric, man of Gree Group and succeeded frontation would be a fiery one, and opposed the diversification plan be - by Dong. Sina Finance says that other firms cause they feared it would distract are rethinking the relationships be - from the group’s core air-con busi - Another Vanke saga is ahead? tween state shareholders and their ness. Eventually the Zhuhai gov - The removal of Dong from Gree professional managers, such as ernment conceded and the battle Group’s top post suggests that the Dong and Vanke’s Wang Shi. ended with Zhu becoming Party Zhuhai government is trying again “Compared with the jailed Gu boss and chairman of Gree Group. to have a bigger say. It may have Chujun, Dong Mingzhu and Wang Relations at the top were unset - good reason for feeling insecure. Shi are much luckier. At least they tled again in 2012 following Zhu’s With a structure similar to Shen - are likely to have a very respectful retirement. According to Beijing zhen-based property developer ending. After all the years of hard Youth Daily, the Zhuhai govern - Vanke, Gree Electric’s shareholding work they have enough wealth and ment “parachuted” Zhou Shao - is fragmented, leaving it more open connections. They can enjoy a well- qiang, a government official with to outside challenge. off lifestyle, they can preach their no affiliation with the company, The respected market commen - management philosophy among into the key role as Party boss of tator Pi Haizhou believes a board - fellow entrepreneurs and they will Gree Group. Zhou was nominated room struggle like the Vanke saga stay in the media limelight,” Sina as a director of Gree Electric as well (see WiC302) is possible and he says observes. “But their ending [losing but the appointment was blocked that other shareholders are wor - control of the firm that they helped by other shareholders such as the ried about the potential for insta - develop] is a sad one for Chinese Yale Endowment (see WiC154). bility if Dong is forced out companies. This is a tragedy for the The bickering was overshadowed completely. “Investors will worry many Dong Mingzhus as well.” n

Mahjong masters

There’s something embarrassing about losing a game on your home ground. So it must have been particularly humbling when the world’s first Sichuan-style Mahjong Championship, held in Sichuan, was won by a woman from Beijing. The event was organised by the Mahjong International League (which was, surprisingly, founded in Switzerland) and brought together almost 10,000 players from over 30 countries. After two months of qualifying rounds conducted online the competitors were whittled down to 200 finalists, who battled it out in person over a three-day I l l u s event in Chengdu. t r a t i o Sichuanese mahjong is played in a more simplified the outcome of mahjong games is illegal in China, of n : w w style, although the cash prizes were still substantial. course. And as the Mahjong International League has w . b e n The winner, Wen Yao, took home Rmb200,000 been keen to point out, the best players at the i t a e p tournament in Sichuan triumphed as a result of their s ($29,000) and even the players who finished in some t e i n . c of the minor places made some money. Gambling on skill rather than their good fortune. o m

5 Week in China The Week in 60 Seconds 25 November 2016

Say goodbye to the TPP The major news items from China this week were...

Donald Trump has confirmed that he will withdraw 1the US from the Trans-Pacific Partnership: an inter - national trade deal instigated by the Obama adminis - tration. China, which isn’t part of the pact, regards the grouping as an American effort to exert influence in Asia and so is likely to welcome Trump’s decision. How - ever, an op-ed in the Global Times has expressed con - cern that Trump’s ambitions for a more isolationist America could damage US-China relations.

The English Premier League is selling the Chinese 2broadcasting rights for its matches to PPTV, a video streaming service owned by Suning (which bought a Guo Guangchang, chairman of Fosun controlling stake in Inter Milan earlier this year). The deal is tipped to be worth $700 million and would be the The former president of Daimler’s truck and bus di - League’s largest overseas sale to date, the BBC reports. 5vision in China was removed from his post this week following allegations that he had made racist remarks A 56-car pileup in Shanxi province has killed 17 peo - about the Chinese and assaulted observers with pepper 3ple and injured 37. The collision appears to have been spray during a row over a parking space. Daimler has caused by bad weather; dashcam footage from one of apologised for the incident. the cars in the crash shows thick fog had caused ex - tremely low visibility. The World Health Organisation es - Fosun will invest $185 million for a 16.7% stake in timates that over 250,000 people die from traffic 6Banco Comercial Portugues – Portugal’s largest pub - accidents each year in China. licly traded lender by assets. Fosun intends to increase its stake to roughly 30% in the future, the group said in Alibaba is planning a Rmb2.1 billion ($300 million) a statement, and says that the investment will help ex - 4investment in supermarket chain Sanjiang Shop - tend its business reach in Europe and Africa. ping Club, Reuters reports. Sanjiang will issue ex - changeable bonds to Alibaba, and the e-commerce giant had developed software that could allow will acquire a further 9.3% stake via share purchases. 7a third-party company to censor information shared on its pages, employees have told The New York Times. The programme seems to have been designed to facilitate a Facebook platform in China, although the Times notes there is no indication it has been of - fered to the Chinese.

Filipino president Rodrigo Duterte has decided that 8contested territory around the Scarborough Shoal will become a fishing-free zone, despite The Hague rul - ing this year in favour of his country. Duterte’s sugges - tion is that no one should be entitled to fish there to P h o calm tensions. Beijing is pleased but a spokesperson t o :

R e with China’s Foreign Ministry reiterated its sovereignty u t e r s Suning gets the EPL, and it already owns Inter Milan over the area “has not and will not change”. n 6 Week in China China and the World 25 November 2016

Trump card President-elect wins a Chinese trademark ruling

s he began his march towards with China Evergrande to develop a Athe White House, Donald range of luxury accommodation. He Trump rallied his supporters around brought along his daughter Ivanka a number of common enemies, but to the signing ceremony as well, none were bigger than China. China ThePaper.cn reports. The partners was accused of “raping” the country never developed any projects as and stealing jobs from the American Evergrande soon ran into a debt cri - people that he, Donald Trump, in - sis (although it has rebounded to be - A popular brand in China tended to win back. come the second biggest home - “I beat China all the time. All the builder in China in terms of sales). State Administration for Industry time,” he told the crowd when he Another false start came in 2013, and Commerce (SAIC) because two announced his candidacy. “I own a when the Trump Hotel Collection weeks prior a local man named big chunk of the Bank of America (THC) agreed to brand and manage a Dong Wei had applied for the same Building at 1290 Avenue of the development owned by China’s Trump trademark. Americas, that I got from China in a State Grid. This agreement fell In 2009 Trump appealed against war,” he later bragged. But as the through when State Grid was found the SAIC ruling, taking his case to New York Times points out, what to have a zoning problem with the the Beijing First Intermediate Peo - Trump presented as a victory was project: it had acquired a permit to ple’s Court, which upheld the in fact more of a consolation prize. build a research and development SAIC’s findings, and then to the In 1994 Trump was on the verge centre, but then began building a Beijing Higher People’s Court, of bankruptcy and couldn’t find the real estate complex, Quartz reports. which again ruled against him in money to make the repayments on THC is, however, still eager to ex - 2015. Undeterred, Trump refiled a Manhattan property site. His sal - pand its presence in China. At the his application, and it was provi - vation came from a number of recent Asia-Pacific Premier Hospi - sionally approved on November 13, property moguls, who tality Conference in Hong Kong, just four days after his election win agreed to buy the land, finance the CEO Eric Danziger announced that was announced. If no one objects development, and give Trump 30% the company would be pushing fur - during the 90-day notice period, of the profits. ther into the Asian market, with the ruling will be carried. Eleven years later, the Hong Kong China the core of its growth. The After 10 years of legal wrangling, partners sold the property for $1.76 group hopes to erect Trump Hotels this may be indicative that, in China billion, and Trump reacted by suing in 30 of China’s biggest cities, TheP - at least, Trump’s business interests them for $1 billion, claiming he had - aper.cn reports, introducing its lat - are benefiting from his political as - n’t been consulted on the deal. After est hotel brand, Scion, targeted to cendancy. According to NBC News a four-year legal battle, a court ruled lower-tier cities. the Donald has 20 ongoing trade - against Trump, but found he was Paving the way for this expan - mark disputes with Chinese au - entitled to 30% of the profits from sion is the conclusion of a decade- thorities. Of the 53 registered trade - two other buildings that had been old legal battle that will finally give marks under the Trump name in bought with the proceeds of the Trump the right to carry out con - China, the Wall Street Journal re - sale: the Bank of America buildings. struction in China under his brand ports that only 21 are owned by Although not an outright victory, name. The debacle began in 2006 Trump (trademarks for explosives, this saga did end quite favourably when Trump applied for a number poker cards and condoms are for Trump. But his dealings in of trademarks across a range of busi - among the 32 owned by others). It P h o mainland China have been much ness lines. His application for a will be interesting to see if the Chi - t o :

R e less successful. In 2008, for exam - Trump trademark covering con - nese courts rule in the future presi - u t e r s ple, Trump signed a partnership struction work was rejected by the dent’s favour in the ongoing cases. n 7 Week in China Banking and Finance 25 November 2016

Taking cover UnionPay cracks down on capital flight through the insurance market

isitors to Hong Kong from purchase general insurance prod - Vmainland China used to line up ucts (such as healthcare or accident) in the shopping districts in their with their UnionPay bankcards. hundreds, desperate to get their They can also pay for investment- hands on luxury handbags. But linked insurance with bankcards is - more recently, they have been wait - sued by the likes of VISA and Mas - ing in line for something rather less terCard, although only a small flashy: insurance coverage. percentage of mainland Chinese The trend has become a concern have these cards. for China’s foreign exchange regu - UnionPay’s previous clampdown lators because so many of the visi - in March did little to slow demand tors seem motivated by moving and official data suggests that their cash offshore. And at the end cross-border purchases climbed 1.4 of October the queues were even times to HK$16.9 billion ($2.2 bil - longer than normal, after specula - New policy pressures lion) in the third quarter of this tion that the Chinese government year, accounting for nearly 40% of was about to clamp down on the Demand for the insurance deals is new policies issued in the city. practice. underpinned by the appeal of the “Many mainland Chinese feel more Sure enough, it then made its Hong Kong dollar, which is linked to secure if they are insured in Hong move, trying to reduce the outflow the greenback. Over the last month, Kong,” Oriental Daily notes, with with new restrictions on how cus - the Chinese central bank has been WiC’s local source insisting that tomers use UnionPay to pay for weakening the daily reference point there is huge appetite for health in - their insurance coverage. for the yuan’s trading against the surance. The belief is that Hong The state-controlled bankcard is - dollar, which has fallen to an eight- Kong-based medical policies are suer said cardholders would no year low. With further declines ex - more reliable than domestic longer be able to use their plastic to pected, Hong Kong’s insurance mar - schemes, and typically their pre - buy insurance products with in - ket is awash with cross-border miums are lower than the main - vestment or saving elements, which capital. According to the Financial land providers. have been the bestsellers in the Times, sales at UK-based Prudential China’s central government has booming Hong Kong market. were up by more 58% in the first a more benign attitude to offshore UnionPay also acted earlier this half of 2016 and Hong Kong now ac - purchases of this type because they year to slow the flow, when the pay - counts for more than half of its total are non-speculative and have ment service provider announced sales in Asia, compared with a fifth clearer social utility. By contrast, the that purchases of insurance prod - five years ago. About half of current investment-linked products are ucts overseas would be capped at sales at AIA Group, which is listed on seen as preferred routes for capital $5,000 per transaction (see WiC313). Hong Kong’s stock market, are also to leave the country, and more in - But the curb wasn’t very effective. being generated by Chinese visitors, sidiously for black money to escape “All you need to do is to swipe the An insurance insider told WiC offshore too. Hence China's insur - bankcard several dozen times,” that mainland investors have pre - ance regulator has been visiting for - Hong Kong’s Apple Daily later ex - ferred investment-linked polices de - eign insurance firms and interme - plained, and Bloomberg has cited nominated in foreign currencies. diaries in Beijing as part of the one example in which an insurance This segment of the market is likely review of the illegal sale of products salesperson swiped a single card to be affected by the latest restric - in Hong Kong, Shanghai Securities 800 times. tions but visitors are still allowed to News has reported. n 8 Week in China Rise of RMB 25 November 2016

The redback retreats Trump’s election victory is triggering a slide in the yuan

hen Donald Trump hit the campaign diatribes and China’s Wcampaign trail hard last sum - newspapers doubt that he will go mer, he spent a few moments at one through with his promises. of his rallies refuting the notion that “Trump as a shrewd businessman he wasn’t keen on the Chinese. will not be so naïve,” an editorial in The property mogul was refer - the Global Times argued this ring to a purchaser of one of his month. “None of the previous pres - most expensive apartments, how - idents were bold enough to launch ever, plus the country’s largest bank, an all-out trade war against China. which has an office in Trump Tower. They all opted for a cautious line “No, I love China”, he reflected, in a since it’s most consistent with the stump speech that suggested the overall interests of the US.” opposite (for more on his views on If Trump does declare economic China, see page 7). war, he will argue that the Chinese Trump’s worldview is starting to have more to lose because their ex - come into sharper focus as he waits ports to the United States made up to take on the presidency and the The inference is that the Chinese about 40% of China’s total trade sur - impact is being felt in the currency government is helping its exporters plus last year. But both sides would markets, where the yuan has deep - with a weaker renminbi and it’s true suffer terribly in trade terms and ened its dive against the dollar. that the Chinese central bank has the political atmosphere would turn Much of the decline is down to been lowering the daily reference poisonous. Flows of foreign invest - expectations that spending from rate around which the yuan is al - ment into China would dwindle and Washington is going to increase, lowed to trade (for the 12th consecu - the pressure to get capital out of the forcing the Federal Reserve to tive trading session on Monday), country would pick up. With the bal - tighten monetary policy earlier helping it fall to its lowest value ance of payments deteriorating, than expected. against the greenback in eight years. China’s leaders might rethink their China’s economy has also been The problem with this claim is defence of the yuan, guiding it down growing at a slower rate, and many that China has spent more than more dramatically against the dollar analysts say the yuan will drop fur - $500 billion of its forex reserves try - or calling a halt to the sell-down of ther until its fundamentals improve. ing to prevent the yuan from de - their foreign reserves. One of the alternative interpreta - preciating further over the last year. The uncertainty surrounding tions is that Beijing is exploiting the Nor would it seem to make much Trump’s intentions is already mak - political paralysis that has followed sense to drive down the yuan so de - ing trading more volatile, says HSBC’s Trump’s victory by driving the yuan liberately in the period immediately head of emerging markets forex re - down on the sly and pushing its de - before Trump takes office, serving search Paul Mackel, who is predict - cline against the dollar to more than as a red rag to a bull. After all, the ing that the markets will be hyper 8% over the last year. longer-term prospects for the ex - sensitive to any of Trump’s com - In this mould, the Securities change rate hinge on whether he ments about China and its currency. Times is describing the dollar’s rise follows through with his promises HSBC has also changed its fore - as a golden opportunity because to levy 45% tariffs on China’s im - casts since Trump’s triumph, pre - “the market will think that the de - ports, and label the Chinese as cur - dicting that the yuan will drop fur - valuation is caused by external fac - rency manipulators. ther against the dollar to Rmb6.90 tors rather than make accusations So far, there has been little indi - by year-end, with a decline to 7.20 by about a currency war”. cation that he will deliver on his the end of next year. n 9 Week in China Internet and Tech 25 November 2016

Overpacking The downside to China’s e-commerce revolution: colossal packaging waste

hirteen minutes and nineteen is a category they can tick to evalu - Tseconds. That’s how long it took ate the vendor’s service level. for the first parcel to reach its desti - Yet increasingly Chinese cus - nation on Singles’ Day earlier this tomers are getting fed up with the month. problem of over-packaging. Social According to the Nanfang Daily, a media abounds with photos of tiny man from Foshan in Guangdong items sent in large boxes wrapped province ordered a juicer just as Al - in swathes of bubble wrap and after ibaba’s online shopping bonanza this month’s Singles’ Day many peo - kicked off at midnight. Within less ple posted such images of empty than 15 minutes a delivery man was boxes hashtagged “aftershock of at his front door thrusting a card - 11.11”. board box into his hands. “Shopping online isn’t so con - It was an incredible feat of logis - venient when you consider how tics and a tangible reminder of how much you have to carry out to the fast and convenient shopping on - There goes 20 million trees... bin,” wrote one netizen on Sina line in China can be. More than a bil - Weibo. Another said she felt guilty lion orders were generated during around the earth 424 times, while it looking at all the waste. Singles’ Day on November 11 and on - requires 20 million trees to make Greenpeace, which says Singles’ line vendors are expected to dispatch 10 billion boxes. Day is a “disaster for the planet” up to 30 billion deliveries this year, as Academics estimate that roughly wants Alibaba to do more to collect China continues to lead the world in half of the cardboard used by and recycle the boxes its vendors online shopping. China’s e-commerce sector gets re - and in-house courier services use. The biggest drawback to this? The cycled but that the plastic and sty - It notes that Alibaba’s boss Jack country is also drowning in the pa - rofoam largely ends up in landfills. Ma has spoken about climate per and packaging it produces. “We should call on courier com - change and environmental protec - “The final destination of most panies to start using environmen - tion in the past. packaging materials is the garbage tally-friendly packaging materials as But even if Alibaba doesn’t do dump, as very little of it is reused or soon as possible. Some of the mate - anything, new laws may force it to recycled. This enormous and sud - rial they use at the moment, like PVC respond. This week Caixin Weekly den influx of products into the per - tape, takes over 100 years to break - reported that regulators have manent waste stream has a pro - down,” Xinmin Evening News drafted a waste-sorting policy and found effect on the environment quoted one expert as saying. that will be debated in the coming and, by extension, on human health Part of the problem is that ven - weeks. and safety,” a recent paper in the dors are responsible for the goods The paper said the proposed law Journal of Environmental and Ana - until the buyer signs for them, en - will introduce new standards for col - lytical Toxicology said. couraging them to overwrap to pre - lecting, sorting and recycling rub - Chinese delivery companies used vent breakages. Another issue is that bish. However, it added that a “ma - 17 million kilometres of packaging there is no way for a customer to jor sticking point” is the plastic tape tape, 9.9 billion cardboard boxes and ask for less packaging on shopping used to seal delivery boxes. The tape 8.3 billion plastic pouches last year, sites like Taobao and Tmall. There is is hard to remove and jams up recy - P h o according to State Post Bureau statis - only a chance to request more and cling machinery. It is also one of the t o :

R e tics. For perspective: 17 million kilo - when customers receive their goods main reasons for China’s low card - u t e r s metres of tape is enough to stretch “well wrapped and nicely presented” board recycling rate. n 10 Week in China Auto Industry 25 November 2016

Dual horsepower Why Volkswagen wants an additional Chinese partner for Audi

ack in 1984, it would have been Beasy to understand why SAIC Motor Corp was dubious about the sales prospects for Audi. At that point, only 3.2 Chinese in every 1,000 owned a vehicle. The height of their consumer aspirations was a Lada or a Volga, since most cars in the country were being imported from the Soviet Union. SAIC opted to manufacture Volk - swagen’s Santana brand instead and the sector’s first major Sino-foreign joint venture was born that October. Over the next three decades it was a decision SAIC would come to regret, for in 1990, Volkswagen (VW) was courted by SAIC’s state-backed rival Second marriage: VW has courted both FAW and SAIC FAW Group. Together the two built VW’s luxury-car unit Audi into are furious at the move and have success in China’s luxury car mar - China’s top-selling premium brand. penned an open letter complaining ket as the number one luxury More recently it seems to be Volk - their interests will be seriously dam - seller for such a long time cannot swagen’s turn to harbour regret aged by the establishment of a rival be overlooked.” about its tie-up with FAW. sales network. Yet according to the Economic Ob - The Jilin-based state firm has According to the Wall Street Jour - server, Audi has its own complaints, been hampered by some very public nal, representatives from 15 dealer specifically the shareholding struc - problems over the past few years. groups, accounting for 150 dealer - ture of the current JV: 60% for FAW, Its longstanding chairman Xu Jianyi ships, met with Audi’s top execu - 30% for VW, and 10% for (VW- was arrested in March last year and tives in China on Monday. If the Ger - owned) Audi. “According to the an - he pleaded guilty to corruption man auto firm doesn’t call off the nual reports of the FAW-VW joint charges in September. Mired in the plan to tie up with SAIC, the dealers venture, the Audi brand contributes scandal, the long-touted restructur - said they would demand “tens of bil - about Rmb20 billion in earnings ing of FAW’s numerous local brands lions of yuan” in compensation for every year. But it could only get a 10% has been further delayed. potential lost sales (they worry that profit split... There has long been dis - Industry watchers have, there - the SAIC tie-up will lead to compet - content on Audi’s side,” Economic fore, not been surprised by the news ing Audi dealerships selling models Observer reports. this month that VW and SAIC have unavailable to them). They have also This explains why Audi reached signed a memorandum of under - threatened to refuse to take deliv - out to SAIC. According to EO, there is standing on new cooperation on top ery of new Audi vehicles from De - no guarantee that the automaker of their existing JV, paving the way cember, the Wall Street Journal re - will get a 50-50 split in the JV with for the biggest Chinese automaker ports. SAIC, but the German firm is likely to P h o to build and sell Audi vehicles in the FAW is feeling bitter too, with a get better than 40-60. t o :

R e country as well. company insider telling Caixin A delegation led by SAIC Chair - u t e r s FAW’s dealers, on the other hand, Weekly its “contribution to Audi’s man arrived in Germany 11 Week in China Auto Industry 25 November 2016

early this month to fine tune the “in - vestment scale, stock ratios and tech - nology platforms,” according to EO. It says Chen issued a gagging order within SAIC “for fear of how FAW would receive the news”. Since then, however, the poten - tial partnership – discussions about which began in mid-2015 – has been widely reported in Chinese newspa - pers. Audi decided to cooperate with SAIC because of the positive outlook for China's luxury car market, CBN reports, citing CEO of Volkswagen’s Mercedes-Benz celebrates one millionth car produced in China China unit, Jochem Heizmann. "Audi seeking a new partner will 2016. Between January and October, Gartner has not commented not harm FAW Group Corp at all... 19 million cars were sold, up 15% publicly on the quarrel. Given that On the contrary, the new coopera - year-on-year. neither Daimler nor the police in tion will strengthen the business of Ironically, Mercedes has partly at - Beijing have shared details of the FAW," Heizmann tells CBN, noting tributed its greater success to merg - incident, it is impossible to know that the two already had a long ing two separate distribution chan - whether the German agrees with track record of working together. nels, enabling it to “speak to its sales the description of events that has According to the newspaper, SAIC network with one voice”. It remains been reported in the Chinese me - is well positioned to handle Audi to be seen how Audi will be able to dia. However, a Daimler official since the chassis for the VW manage two sales channels run by tells Sixth Tone, a news website, Phideon, which SAIC already man - rival companies that may try to un - that Gartner has now been re - ufactures, is closely related to the dercut each other, although Eco - placed. “Such an incident in no way Audi A6 sedan. nomic Observer notes that the par - reflects the values of Daimler AG Audi remains China’s biggest lux - ent firm VW has already handled and we sincerely apologise for the ury car brand. But it looks more such a situation before as it has been concerns raised by this matter,” a than a coincidence that the German making VW vehicles with both SAIC statement reads. firm’s overtures to SAIC began and FAW. But as we reported in WiC343, a shortly after Audi suffered its first In the short term, Audi’s rival simple apology may not be suffi - monthly sales decline after 26 years Mercedes has a new and more press - cient – something that Samsung in China. In May 2015, it reported a ing issue to worry about. Executives Electronics has recently been learn - 1.4% year-on-year drop in sales. are likely to be extremely nervous ing to its cost. Chinese consumers Audi’s position has been under about a consumer backlash follow - are becoming increasingly nation - threat from BMW and a resurgent ing a road rage incident last weekend alistic and know the potency of their Mercedes Benz. In 2014, Mercedes’ involving Rainer Gartner, the Presi - growing spending power. They sales were just under half of Audi’s dent and CEO of sister company threatened to boycott the South Ko - in China. That gap has been rapidly Daimler Trucks and Buses. rean company’s products after a per - closing. In the first nine months of After getting into an altercation ceived snub over China’s initial 2016, Mercedes sold 344,791 cars to over a parking space at a residential omission from the global recall of Audi’s 440,233. Its growth trajectory compound in Beijing, he is said to exploding Galaxy Note 7 smart - has remained strong, with sales ris - have shouted, “I’ve been in this phones. ing 29.5% year-on-year compared to country one year and the first thing Likewise, Sixth Tone says Mer - Audi’s 6.2%. I learned is that all Chinese people cedes now faces a similar backlash The improvement is in line with are bastards.” from disgruntled Chinese. It quotes broader market trends. Thanks to a The face-off rapidly went viral. one netizen: “I just decided to buy a P h o government tax incentive promot - One netizen says the German also car, but based on the company’s at - t o :

R e ing small engines, China’s automo - pepper-sprayed an onlooker who titude to the issue, Benz will be ex - u t e r s bile market roared back to life in tried to intervene. cluded from my list.” n 12 Week in China Society and Culture 25 November 2016

Hail the kung-fu king Jackie Chan has just got an Oscar. But why is he so unloved at home?

n 1980 Jackie Chan first at - Itempted to break into Hollywood with The Big Brawl . But the Hong Kong star found it hard to adapt his style to the choreogra - phy of a typical American fight se - quence and the film was a flop. According to Southern Weekend, this setback almost derailed Chan’s prospects. He subsequently met Steven Spielberg to talk about a po - tential cooperation but the meeting only lasted for five minutes. Because of his broken English (it’s consider - ably better now), The Today Show cancelled an interview with him at the last minute too. Chan concluded that The Big Brawl failed because the director wouldn’t allow him to direct the film’s action scenes the way he wanted. For the rest of the 1980s, Chan worked instead in his hometown Hong Kong, churning Pretty popular overseas, less so at home: Chan out -scripted kung-fu comedies. (Though funny, the films Award. The 62 year-old was one of ated a muted response in Hong were not without risk – his stunt the four veterans who received hon - Kong. Indeed, Chan has yet to win a team reserved rooms in a local hos - orary Oscars for their career best actor award at the Hong Kong pital to treat injured crew – Chan achievements. Film Awards (which started in 1982). himself suffered multiple bone frac - “Standing here is a dream,” Chan Regular WiC readers will be fa - tures during filming). said as he received the iconic stat - miliar with the Jackie Chan bashing In 1995 the action-comedy star fi - uette from Sylvester Stallone. “After that goes on across Chinese social nally got his Hollywood break - 56 years in the film industry, mak - media. In 2010, he was voted as one through with . ing more than 200 films, breaking of Hong Kong’s least trustworthy That was followed by the huge so many bones, finally this is mine.” personalities in a poll. In , a blockbuster success Rush Hour in The Los Angeles Times reckons series of statues that Chan gave to a 1998. Today Chan is arguably the Chan’s award was partly motivated museum were returned in a recent most famous Chinese actor in the by the Academy’s attempts to im - high probfile snub (see WiC342). And world and Forbes magazine esti - prove diversity within the Oscars (in in mainland China netizens have mates he was the second highest recent years there have been criti - long mocked the “Jackie Chan curse”, P h o paid actor last year behind Robert cisms that the winners – particu - noting how sales of products seem t o :

I m

a Downey Jr. larly the leading actors – are pre - to dip after he has been paid to en - g i n e

C Earlier this month Chan got the dominantly white). dorse them (see WiC187). h i n a ultimate recognition: an Academy News of the win, however, gener - So how did Jackie Chan manage 13 Week in China Society and Culture 25 November 2016

to become one of the least liked weibo know why his post roused political correctness among Chinese celebrities in Greater China? such hatred. On Chinese social me - netizens. Thus many netizens in The same question is being asked dia – where exposing official Hong Kong and China dislike him.” by media outlets abroad and closer hypocrisy is a national sport – noth - Despite the apathy over his re - to home. On a Quora forum, one ing makes you lose street cred as cent honouring in Hong Kong, Hongkonger responded that Chan quickly as shilling for the govern - Chan’s Oscar coup seems to have got has been too keen to curry favour ment, and those on weibo know that him a bit more credit on the main - with China’s leaders, which hasn’t Chan has a history of parroting the land. “Personally I dislike his politi - endeared him to people in Hong Communist Party’s stances on many cal stance but he fully deserves his Kong. A classic example: his rant in things,” it suggests. honorary Oscar,” argued one widely 2009 that he wasn’t sure if China is That seems to be a common ver - discussed post on Zhihu, China’s an - suited to a liberal political system, dict across the Chinese internet too. swer to Quora. “No matter if he is in adding that the Chinese people need “Politically Chan is very conserva - China or the US, he always identi - to be ruled in an authoritarian man - tive but his personal life is very lib - fies himself as Chinese, unlike many ner. eral,” one critic wrote on Chan’s own Hongkongers,” another observed, Buzzfeed, a news portal, also weibo page, explaining a paradox touching on an issue that riles many notes that Chan has been dubbed that hurts the actor on both sides of mainland Chinese: the anti-moth - “the No.1 five pence” (the term for the border. “His many comments erland sentiment felt by some of the people paid to praise the govern - don’t go down well with the political Hong Kong population. ment online) in China. “Those on correctness in Hong Kong nor the The award also has some critics

Full-speed ahead

Lee Ang’s new film Billy Lynn’s Long Halftime Walk was controversial even before it was released. The movie tells the story of a young soldier suffering from post-traumatic stress disorder after the war in Iraq (he’s played by new - comer Joe Alwyn, and Kristen Stewart plays his anti-war sister, pictured right). But what is making headlines is that it was shot at 120 frames per second, five times the speed of a standard format. The accelerated speed delivers ultra- high definition, making the images on screen eye-pop - pingly vivid. “As a viewer, it felt like reading a book in which all the commas and periods had been put in bold and underlined,” explains Daniel Engber in Slate. Reviewers say that Lee used the technology to capture the full humanity of the film’s characters. He also ex - Stewart: stars in Lee Ang’s Iraq war retrospective plained the style as a “new aesthetic” ahead of the first screenings in Hollywood last month. ence in China and the film came in second place – behind The technique is so revolutionary, in fact, that most cin - Doctor Strange – on its opening weekend, taking in $11.7 emas aren’t equipped to show films in the format. Only a million in ticket sales. Some of his fans paid well above handful of theatres in the United States can manage it. the odds to watch it in the higher-speed format. Some of the critics weren’t very accommodating either, And the critical reception was kinder in China too. On calling it “unwatchable” and “visually overwhelming to the Douban, the movie was given a rating of 8.6 out of 10, point of distraction”. (A standard version has also been re - compared to 48% on . “I have never been leased to allow the majority of cinemas to screen it.) so close to the characters in a film before. I can even see P h

o Lee – best known for his films Crouching Tiger, Hidden the blood vessels in the eyes of the actor,” one reviewer t o :

R e Dragon and Life of Pi – has found a more receptive audi - raved. u t e r s

14 Week in China Society and Culture 25 November 2016

reevaluating Chan’s acting achieve - ments. “His hard work has paid off. Look at the fight scenes in Pirates of the Caribbean , his comedy action has clearly influenced mainstream Hollywood,” Beijing Times sug - gested. Chan is also the first Chinese ac - tor to have won an Oscar, Global Times noted approvingly.

Not so Super star blunders with costly liaison Playing doubles: badminton’s golden duo and Xingfang he love story between bad - Tminton champions Lin Dan achieve this feat, his stardom was Within 24 hours of the photos going and Xie Xingfang is well known in assured. His movie-star looks and online, they attracted over 500 mil - China. When he was only 14, Lin no - feisty on-court personality was the lion comments on weibo – most of ticed a tall and slender girl at bad - icing on the cake (see our profile of which were overwhelmingly nega - minton training camp. Although he Lin in issue 41). tive. “No matter how outstanding quickly developed feelings for Xie, To support her boyfriend’s career, your achievements are, you will now he didn’t pursue her until they were Xie decided to take a step back from only be remembered as a cheater, a both selected for the senior bad - the limelight and in 2009 she an - man that disregards his responsi - minton team. In 2004, Lin an - nounced that she would retire from bility as a father and a husband,” nounced that they were a couple. the national team. “I’m willing to be one thundered. At the time, their relationship was the woman that makes soup for Lin “Cheating on your wife is messed frowned upon by the authorities, ac - Dan,” she declared. up. But cheating on her when she cording to Xie, who was a two-time The two tied the knot in 2012 in a was pregnant with your child? That world champion. “The rules of our wedding that was widely covered in deserves a special place in hell,” an - team dictate that one cannot be in a the domestic media and the press other wrote. relationship with a member who has nicknamed them the Condor Cou - Many of his fans are deeply disil - not gained good accomplishment. ple, after the characters of a Jin Yong lusioned: “I used to think Lin Dan So when Lin promised he would novel about an impulsive young was a good man. I also believed that achieve success for the sake of our warrior and his calming and older the love between the athletes was love, I was really moved,” she re - lover (Xie is two years Lin’s senior). stronger than most people, because vealed in an interview. Early this month, Lin announced they have been through so much to - That success soon followed. Lin, on his personal weibo that the two gether. But now I don’t believe in now 33, went on to become a two- have welcomed their first child. But anything. I’m so disappointed,” one time Olympics gold medallist (in the golden couple lost some of their female netizen lamented. 2008 and 2012) and he was given the shine last week when a series of pa - Hours after the photos circulated, nickname ‘Super Dan’ after winning parazzi photos were leaked showing Lin issued a statement apologising all nine major titles in the bad - Lin holding hands with model-ac - to his family, without directly ac - minton world: Olympic gold, the tress Zhao Yaqi back in October, knowledging the affair. World Championships, World Cup, when Xie was heavily pregnant. The next day Xie posted a picture Thomas Cup, , Super Another set of photos doing the on her personal weibo showing the P h o Series Masters Finals, All England rounds shows the two in a hotel couple holding their newborn son’s t o :

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a Open, Asian Games and Asian room engaging in more intimate ac - hand, which seemed to suggest that g i n e

C Championships. tivity and news about Lin’s infidelity they are going to work through the h i n a As the first and only player to has captivated China’s internet. crisis. “Our family will support this 15 Week in China Society and Culture 25 November 2016

responsible man and a man who al - “The online sentiment [towards the brands to replace their ways corrects his mistakes. Thank Lin’s scandal] is very negative. The spokesperson,” the entertainment you for the concern from friends brands who endorse him – Dolce & blog reports. and fans. Our family will be together Gabbana, Montblanc, Yonex, etc – What amplifies the public reac - in the same boat under this adverse are unlikely to respond positively to tion is that Chinese sports stars – es - weather,” she wrote. this news and we expect that there pecially Olympians – have been ex - Although his wife appears to be will be serious financial conse - pected to live by an honour code sticking with him, Super Dan’s spon - quences,” Tom Elsden of Mailman and project a positive public image. sors may not be so sure. Lin ranks Group, told the South China Morn - “Chinese athletes are [usually] ‘em - alongside Li Na and Yao Ming as one ing Post. “Lin has over Rmb150 mil - ployed’ by the government and are of biggest sporting stars in China, lion in contracts with his sponsors, used to promote the success of the where badminton trails only bas - and we don’t expect them to stand nation and themselves as role mod - ketball, soccer and table tennis in by him. So the financial loss will be els. It is in the interest of the Chinese popularity. His income from en - considerable.” government for these types of scan - dorsement deals has boomed over Chief Entertainment Officer, a dals not to be uncovered, so it is a the years, rising to Rmb27.5 million blog, compares Lin’s fall from grace rare case,” Elsden told the SCMP. ($3.97 million) last year. with that of the hurdler Liu Xiang, Tiger Woods. offers another cau - The superstar athlete now en - another sports icon. At one point, tionary tale for the badminton dorses brands like Oakley, Dolce & Liu, an Olympic medallist, endorsed player. The golfer’s image has never Gabbana and Montblanc. He has as many as 17 brands. But after news recovered from the exposure of his launched his own underwear label about his messy divorce made head - serial infidelities which subse - for men – called Intimate By Lin lines (see WiC288), the number of quently led to his break-up with Dan – and earlier this year he told sponsors dropped to a handful. wife Elin Nordegren. media he was mulling his own “Compared with Liu Xiang, Lin The revelations seem to have cologne brand too. Dan can probably find other oppor - played a major part too in destroy - But the scandal could stymie tunities that are not so closely tied ing the golfer’s previous steely con - many of his plans and Lady Max, a with his public persona. But when it fidence. The result: the formerly un - fashion industry website, has re - comes to endorsements deals and touchable Woods has fallen to a ported that two companies about to his eponymous brands, taking a big current ranking of 861 in the world sign with Lin have already termi - hit is inevitable. In fact, a lot of fans (after being number one in his hey - nated discussions since it erupted. are already clamouring on weibo for day for 683 weeks). n

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16 Week in China Society and Culture 25 November 2016

Ask Mei: Which Chinese poems has Trump’s granddaughter been reciting?

Since Donald Trump’s surprise win in the US presidential election, China’s social media has been even busier discussing America’s leader-in-waiting. The popular themes have included the vindication of those pro-Trump voters who settled there from China (see my article in WiC343), the pros and cons of his victory for China and the world, and even the news of a Beijing court ruling against him in a dispute with someone who has registered his (see page 7). But the most endearing topic is his adorable granddaughter, who has been learning Chinese since she was 18 months old and can already recite Chinese poetry. A video posted by Ivanka Trump earlier this year went viral on and WeChat after the election. In it, her then four year-old daughter Arabella, in a red Chinese dress and with Chinese holiday decorations in the background, recites Trump’s Tang Dynasty diplomat (centre) two Tang Dynasty (618-907) poems that are well-known to almost all schoolchildren in China. China’s traditional education relies heavily on memorising Goose, goose, goose ancient classics, especially Tang and Song Dynasty poems, Bend the neck towards the sky and sing the crown jewels of Chinese literature and often represented White feathers float on the emerald water as the peak of the country’s cultural development. Red webs push the clear waves. Compared with the more complicated Song poetry 宋词 , the popular Tang poems 唐诗 typically consist of just four Composed by Li in his early years, Pity the Farmers lines, each with only five or seven characters, and they eulogises the hardworking farmer in 20 characters: rhyme in the A-A-B-A structure. That has made Tang verse easier to remember for generations of children and there is Hoeing the crops under midday sun even a saying 熟读唐诗三百首，不会作诗也会吟 , “as Sweat falls to the soil under the crops long as you are familiar with 300 Tang poems, even if you Who would know the food on the plates are not a poet you can compose poems easily”. Every grain contains hardship and toil. The two poems that Arabella recited are Ode to Geese by Luo Binwang 骆宾王 (638-684) and Pity the Farmers by Li Somewhat ironically Li became a senior court official in Shen 李绅 (772-846). his later life and quickly forgot the virtues of frugality and As one of the ‘Four Paragons’ of the Early Tang, Luo was a hard work. One suspects that China’s current leader Xi brilliant poet, and is believed to have been only seven years Jinping would not condone Li’s change of lifestyle. Still, when of age when he composed the famous Ode to Geese . With a Xi visits the White House next year for a state banquet, what mere 18 characters, he paints a vivid and pleasant picture of better welcome could he receive than a few more Tang poem P h o t o a goose floating on the water: recitals from the Trump Dynasty’s literary prodigy Arabella… :

R e u t e r s

17 Week in China And Finally 25 November 2016

Official tune Hong Kong’s young musicians win over Beijing

s everything in Hong Kong now flash concert was a symbol of just Ipolitical? That’s what was being one thing: Hong Kong’s innate one - asked last week after the Chinese ness with mainland China. Communist Party’s Youth League “Those songs are the shared Young inspiration started writing about the territory’s memories of all Chinese people. Metropolitan Youth Orchestra. Blood flows in the body, melodies it up, causing a lot of false associa - The symphony orchestra, known are remembered in the mind and tions in the people’s minds,” the for holding unannounced concerts culture is engraved in bones. Only Hong Kong Economic Times com - in shopping centres in recent years, Chinese people know how deeply plained. decided to take it one step further in touching this act is,” the Youth The debate comes at a time when October with a flash mob perform - League celebrated in a post titled “I many in Hong Kong feel Beijing is ance in the Hong Kong International am a Chinese”. tightening its control over the former Airport’s departure hall. The People’s Daily went a step UK colony and chipping away at the A clip of the performance is now further claiming that many people rights enshrined in the Basic Law – posted on YouTube and mainland “cried while watching the clip” al - Hong Kong’s mini constitution. video sharing sites, showing an ini - though only 200 or so commented Earlier this month Beijing ruled tially small group of young musi - on it online. that two lawmakers were not al - cians playing the traditional “Amongst all the damaging talk lowed to take their seats in the Hong Sichuanese melody Footprints in of independence for Hong Kong, Kong legislative assembly because the Snow near the check-in desks. teenagers have their own way to ex - they refused to acknowledge Hong Gradually more and more musi - press their true loyalties ,” wrote one. Kong was part of China during their cians come out of the crowd to join Media in Hong Kong pointed out swearing-in ceremony. This week it in, forming a full orchestra. that the orchestra has played the emerged that a new pro-Beijing During the seven-minute med - same medley at all of its flash con - youth group – the Hong Kong Army ley they rattled through five pieces certs in recent years and the songs Cadets – had been given a much- – in a mixture of mainland Chi - have no special significance – in - coveted piece of real-estate in nese music, Hong Kong pop songs deed that they could just as easily be Kowloon Bay and HK$30 million and international tunes. interpreted instead as a symbol of ($3.86 million) for renovations. Yet for the Youth League – an im - Hong Kong’s unique blended her - It seems both sides are now play - portant organ of the Party for influ - itage, given the foreign pieces. ing for the hearts and minds of the encing its younger members – the “The official Chinese media hype next generation. n

Big shoes to fill

“We like the US being in the region. But if the US is not there that void needs to be filled, and it will be filled by China”

* New Zealand leader John Key, speaking at the APEC summit in Peru, warning that allowing the TPP trade pact to perish would only open the door for China to promote an alternative. This week President-elect Donald Trump said he would walk away from the TPP on day one in office. John Key

18 Week in China The Back Page 25 November 2016

Photo of the Week In Numbers 3,000 The number of refugees who have fled from fighting in to China’s Yunnan province, according to a spokesman for the Chinese Foreign Ministry.

906 million The size that the Chinese labour force is predicted to shrink to this year, following three years of declines since 2012. Li Zhong, spokesperson for the Ministry of P h o Human Resources and Social Security, t o :

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e predicted the workforce will continue to u t e r s drop in size until 2050, when it could fall to 700 million. Kapow: performers dressed as Marvel characters during a presentation detailing Disneyland's $1.4 billion Hong Kong park expansion 10% Evergrande’s current stake in China Vanke. Evergrande has been gradually increasing Where is it? its share in the country’s largest residential Some of the places referred to in this issue property developer since August, at a time when Vanke has been embroiled in a hostile takeover bid. Beijing

Shanxi $750 million The size of a proposed IPO by Meitu, the Nanjing Shanghai owner of a popular selfie app. The Xiamen- based firm is testing demand for a Hong Kong listing which could be the largest IPO by a technology company in Hong Kong since Alibaba.com’s 2007 $1.7 billion Hong Kong Zhuhai offering.

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