The Big Crackdown

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The Big Crackdown FINANCE & ECONOMY BUSINESS & INDUSTRY Digital Currency TikTok-Kuaishou Dream Rivalry ENVIRONMENT & SOCIETY OPINION HK Universities Avoiding Ideological Head North War Issue 127 January 2021 ISSN 2222-4033 The Big Crackdown How Chinese police clamped down $153 billion of illegal online gambling enabled by China's e-commerce giants Private Banking January 2021 caixinglobal.com Contents ON THE COVER 14 Investment Firm Turns on Money Man China Minsheng Investment Group levels financial misconduct accusations against the CEO of an investment bank it has backed for years 16 What to Watch in the New 5-Year Plan Amid a global pandemic and p. 36 deepening geopolitical tensions, top Communist Party officials meet next week to decide on policies to drive sustainable economic growth 18 What’s Next for the Yuan? Chinese currency may still have legs after 8.5% gain against greenback since end-May, analysts say 21 Property Developers Run Into Debt p. 36 Limits Companies that cross debt-related red lines will have their ability to take TheThe BigBig CrackdownCrackdown on more borrowing curtailed How Chinese police clamped down $153 billion of illegal online BUSINESS & INDUSTRY gambling enabled by China’s e-commerce giants 24 Private Firms’ Knuckles Rapped Over Buyouts Series of fines come after regulators declared their intention to take a harder look at big tech with new anti- EDITORIAL FINANCE & ECONOMY monopoly rules 04 Joining the TPP Won’t Be 08 China’s Dream to Lead in Digital Easy. China Should Anyway Currency 25 Speed Bumps to Self-Driving Car Complying with some of the The future of money is electronic and Navigation CPTPP’s more challenging Beijing wants to own it Vast numbers of satellite base conditions will be beneficial in stations are being built as companies and of itself 10 China Races to Catch Money rush to develop their own national Launderers networks 06 EYE ON CHINA Rapid evolution of financial criminality has left a 13-year-old anti-money 27 How Apartment Rental Giant Fell laundering statute in the dust, forcing Apart authorities to press for tougher, more Danke Apartment ran out of cash effective rules and penalties offering below-cost leases as the pandemic cooled the market and its 12 Anbang Salvage Runs Aground CEO was detained Company created to take over a significant portion of the 30 TikTok Rival Continues to Play conglomerate’s assets has failed to Second Fiddle complete its restructuring on time Kuaishou Technology is on track to Exchange rate used in this issue: 1 yuan = US$ 0.15 2016 Caixin Global Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic,mechanical,photocopying,recording or otherwise without the prior permission of Caixin Global Limited. Published and printed by Caixin Global Limited, Unit A, 18th Floor, Public Bank Centre, No. 120 Des Voeux Road Central, Hong Kong, China STAFF BOX Publisher READER COMMENTS Hu Shuli Managing Editor Doug Young Assistant Managing Editor Han Wei (World) Senior Editors Nerys Avery, Bob Simison, Lu Zhenhua, Marcus Ryder Section Chiefs Lin Jinbing, Flynn Murphy Copy Desk Chief Michael Bellart Copy Editor Joshua Dummer Reporters Timmy Shen, Matthew Walsh, Tang Ziyi Guo Yingzhe, Nandini Venkata, Lu Yutong, Ding Yi Denise Jia, Luo Meihan, Anniek Bao HOW CHINA IS RACING TO CATCH UP WOMEN FITTED WITH MANDATORY Art Director Ye Xueming WITH MONEY LAUNDERERS BIRTH CONTROL DEVICES FIND LITTLE RECOURSE AFTER DECADES Art Assistant Wang Xintong Plenty of businessmen overseas OF PAIN remit money back to China Editorial Coordinator Yu Zhuyangyang through underground banks. It’s The subdistrict in my certainly necessary to have a law hometown asked me to have one against money laundering, but of these devices implanted after in the meantime we ought to I had my baby, but I didn’t Contributing Editors Managing Director Ling Huawei, Gao Yu, Huang Shan, Li Li Xin reflect on why even legally comply because I’ve have not Qing, Guo Qiong, Huo Kan, Ren Bo, Yang General Manager earned money is being moved been back to my hometown Zheyu, Wang Su, Yu Hairong, Zhang Yuzhe, Jenny Que through underground banks. We since. Now the policy has Wu Hongyuran, An Limin, Qin Min, Wang Yiyin, Chen Baocheng, Li Zengxin, Xu Advertising and won’t be able to fundamentally expired and no one cares Heqian, Huang Kaixi, Xu Xiao, Liu Fang, Conference Directors tackle money laundering until anymore, but millions of Du Ke, Zhang Fan, Yu Ning, Ji Tianqin, Gordon Jing, Owen Fan we lower such financial costs. ordinary people have born the Yu Dawei, Wang Heyan, Jiang Fei, He Xin, Subscription Managers & Wang Duan Specialists pain and individually paid for Yan Chengjia, Lu Yuting Pehr the side effects of this policy. Design Consultant Qi Lin Marketing Directors & Specialists 0204 Art Director Liu Xinyi, Wang Shuwei 可儿妈 Zhao Lingjun Art Designers HOW SOE DEFAULT WAVE SHOWS Hu Yuanyuan, Dong Kun STATE BAILOUTS ARE OVER Thanks to Caixin for this report. It gives a voice to a normally For years now, some companies muted group in this society. This have been taking on new debts kind of journalism is a pillar of to repay old ones. Their civil society. efficiency is actually pretty low Contact Us: Institutional Subscription Hong Kong and they are always running Jamesgc6 Yan Chengjia Unit A, 18th Floor, Public [email protected] Bank Centre, No. 120 Des deficits. However, this isn’t Caixin Global +86 (10) 8564 7151 Voeux Road Central, Hong reflected in their financial www.caixinglobal.com Kong, China statements and the credit ratings Addresses agencies are puppets of the Editorial inquiries Singapore [email protected] Beijing 101 Thomson Road, United bond issuers. Once these These comments were translated Floor 5, Building 6, Sanlitun Square, #06-01, Singapore companies are no longer able to from Caixin’s Chinese website. Product inquiries SOHO, 8 Gongti Beilu, (mailing address). [email protected] Chaoyang District, Beijing, Tel: +65 6829 5420 keep going back to the bond China. Fax: +65 6829 5301 market for more money, they Advertisements and Tel: +86 (01) 8590 5050 will find themselves in a debt conferences Fax: +86 (10) 8590 5101 Owen Fan crisis. Comments can be sent to [email protected]@caixin.com with with the the [email protected] Shanghai +86 (10) 8590 5215 Room 1501-1502, Ascendas writer’s name and location, or Gordon Jing Plaza, 333 Tianyaoqiao Road, 道理不深言语多 left on the English website at [email protected] Xuhui District, Shanghai, +86 (21) 6115 2028 english.caixin.com.www.caixinglobal.com. China. Comments may be edited for Tel: +86 (21) 6115 2028 Fax: +86 (21) 6115 2016 length and clarity. 2016 Caixin Global Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic,mechanical,photocopying,recording or otherwise without the prior permission of Caixin Global Limited. Published and printed by Caixin Global Limited, Unit A, 18th Floor, Public Bank Centre, No. 120 Des Voeux Road Central, Hong Kong, China January 2021 caixinglobal.com Contents beat ByteDance to a public listing, but that’s just about the only metric the company is leading on 32 Why Ant’s IPO May Stay on Ice Tough new regulations for microlending may force significant changes for fintech giant’s platforms and a big haircut off its $302.5 billion valuation 34 Alibaba Soothes Market Watchers Chairman and CEO thanks government for encouragement, pledges support for regulation ENVIRONMENT & SOCIETY 42 Mandatory IUDs Cause Decades of Pain An artist's rendition of the planned Permanent IUDs were key to Guangzhou campus of the Hong Kong University of Science and Technology. enforcing the one-child policy, but Photo: The Hong Kong University of complications and side effects have Science and Technology blighted many lives 44 Hong Kong Universities Head North Expansion into wealthy Guangdong 54 Biden Could Use CPTPP to 62 Avoiding China-U.S. Ideological province gains momentum as Greater Compete With China Rivalry Bay Area integration picks up steam Even if the U.S doesn’t return to it, the Keeping ideology out of China-U. CPTTP could be used strategically to S. strategic competition will help to 46 Biodegradable Plastic Push Faces drain China’s external development prevent proxy wars Cost potential The world’s biggest plastic-maker must address issues with the 56 Reform Could Offer Way Out of production, regulation of the materials CPTPP’s SOE Rules FINANCE & ECONOMY BUSINESS & INDUSTRY to meet waste reduction goals If reforms continue, Beijing could Digital Currency TikTok-Kuaishou Dream Rivalry dramatically reduce the number ENVIRONMENT & SOCIETY OPINION HK Universities Avoiding Ideological Head North War 48 HIV Discrimination of state firms that meet the trade Issue 127 January 2021 ISSN 2222-4033 Caixin traveled to the northeastern agreement’s definition city of Shenyang to photograph the daily lives of some of the country’s 60 Regulate the Data-Driven 963,000 people infected with the Globalization virus that causes AIDS The U.S., China and EU need to The Big Crackdown How Chinese police clapped down $153 billion of illegal collaborate to avoid excessive online gambling enabled by China's e-commerce giants fragmentation of global digital trade OPINION CONCEPT: YE XUEMING 52 Biden Likely to Rework Trade Deal Any new agreement is unlikely to be reached until late 2021, while a Get your information the way you want it reduction or removal of existing U.S. tariffs is not expected Digital Magazine Subscription [email protected] caixin.com +86 (10) 8564 7151 EDITORIAL Joining the TPP Won’t Be Easy.
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