To do their job, the police need access to personal data – that much goes without saying. For example, officers in Germany can also request transaction data. However, access to the central database “Inpol” is strictly regulated.
China also has strict regulations, and there is also an official police database. In Shanghai at least, however, there was also a considerable amount of carelessness: Officials made citizen data openly accessible via the cloud. Access was easier that way. But the result was now a gigantic and, above all, enormously embarrassing data leak. Now China’s Premier has reacted. He has announced an improvement in the protection of sensitive information.
The radicalism of China’s Internet regulators is something to envy from a European perspective. Last summer, the popular ride service DiDi, the Chinese Uber, was pulled from the app store. The government felt that the management had become too independent. Since then, the company has shown humility. Apparently, this is being rewarded: The app could soon be available again, our Beijing team reports. In addition, the hard crackdown on tech companies is slowing down after a campaign that lasted several years.
Perfect surveillance meets less-than-perfectionist users: The Shanghai police apparently left a database of citizen information lying around unprotected on a publicly accessible server for months. This was reported by CNN and the Wall Street Journal. The hackers, who were able to obtain the addresses and telephone and ID numbers of nearly a billion people, did not have to do much to get their hands on the treasure trove of data. Now they are offering it on the free market for 23 Bitcoin (China.Table reported).
The spectacular data breach has caused quite a stir. Those who learned about it despite censorship were outraged. And the government is apparently reacting to the incident without directly addressing it. Premier Li Keqiang announced a tightening of data management policies. “The security of personal information handling must meet the level required by law,” the State Council announced on Thursday. “Actions that violate the rights and interests of individuals and businesses, such as the illegal use and misuse of information, must be seriously investigated.”
It’s a regular occurrence in China for the central government to express shock at the incompetence of cadres and local authorities and promise quick corrective action. “The breach has clearly caught the attention of China’s top leadership,” writes Kendra Schaefer of consulting firm Trivium China. “Not so much a ‘hack’ as a casual ‘gonna help myself to these delicious data donuts someone left on the counter’.”
According to the CNN report, the database was located in a directory of the large data center operator Alicloud. It is a subsidiary of the Chinese e-commerce giant Alibaba. The Public Security Bureau (PSB, 公安) in Shanghai apparently used cloud storage space from the provider.
The directory contained a database with 23 terabytes of information from 970 million citizens across China. Western data security experts discovered the unsecured backdoor about a year ago. The information was apparently freely accessible ever since. Access was even possible via a web link.
Experts are now speculating about how the debacle happened. “Either they forgot about it, or they intentionally left it open because it’s easier for them to access,” CNN quotes security expert Vinny Troia of Shadowbyte, who discovered the leak early on. However, it could also have been a simple mistake.
IT executives at companies across the board know the dilemma: High data security is easy to achieve – but it always reduces convenience for users. Therefore, the goal is never maximum security, but rather always a compromise with accessibility. Still, experts routinely struggle against the ever-elusive negligence of employees. It starts with overly simple passwords. And ends – as now apparently in Shanghai – with large amounts of useful data that anyone can easily access.
Of course, if no password is required and a link can be used to access the personal database from any browser – even from a smartphone – things will be much easier. The industry standard here would be a double user login using a password and one-time codes from a dedicated device or app. Common practice would also be that access could only be gained via a heavily encrypted data tunnel. This would require dial-in, which in turn would require logging in from a secure device.
Such barriers, it seems, are what China’s police authorities like to spare themselves. Two years ago, Western analysts easily obtained millions of records on surveillance in Xinjiang from a police database. Again, the information was located on an unsecured server.
All of this indicates that while China already collects a lot of data and provides it to the authorities, professional handling of such data is yet to catch up. This would presumably require extensive IT training for ordinary civil servants and a sophisticated system for assigning rights. Until then, there are further risks of leaks due to carelessness on the user level.
After a disastrous year, brighter times are finally dawning for DiDi, the leading Chinese ride-hailing service. The company officially delisted from the New York Stock Exchange on June 10. It has thus fulfilled Beijing’s main requirement to return to normal business operations.
The Chinese Uber rival suffered a serious blow last summer. After its US IPO, the government unexpectedly intervened. The authorities ordered Didi’s services to be deleted from all Chinese app stores. As a result, no new users were able to register with the company’s services. The ultimate punishment.
Didi had launched its IPO in the USA without the consent of the leadership in Beijing. The message to the company was, therefore: Correct your mistakes, or you will pay. At the time, the sanctions against Didi were a further escalation of the great tech crackdown, which practically spared no Chinese Internet company.
It seems as if Beijing has reconsidered its tough stance against the tech giants in recent months due to the overall weak economic development (China.Table reported). And so, it seems, Didi could be expecting brighter times again.
The Wall Street Journal, citing individuals familiar with the matter, reports that Beijing is about to close its investigation into DiDi. The company’s apps will reportedly be back on Chinese app stores again soon. DiDi’s share price skyrocketed as a result. Since mid-May, its value has more than doubled.
However, the investment remains a disaster for investors who invested in the IPO last summer; since then, the valuation has dropped by almost half. Even after the recent mini-rally, they are still stuck with a loss of more than 80 percent. $56 billion in market capitalization has been burned.
The fact that Beijing is now releasing Didi from its chokehold is probably related above all to the progress the company has made in delisting from the US stock exchange. An alternative IPO in Hong Kong has not materialized yet – it is an extremely complex undertaking, after all. Instead, Didi shareholders voted to forgo an official listing on a US stock exchange.
DiDi shares can now only be traded on the so-called OTC (over-the-counter) market. Over-the-counter trading is supported by many brokers and banks. This means that there are hardly any differences for investors when buying the securities. However, the risks are greater because Didi no longer has to comply with the requirements and regulations of the New York Stock Exchange (NYSE), where the company was previously listed. Large investment funds, whose rules require them to hold only officially listed shares, will have to get rid of their DiDi shares.
A shift to the OTC market is not necessarily bad for the share price. Luckin Coffee was a recent example of this. The Chinese Starbucks competitor had to withdraw from the Nasdaq tech exchange two years ago due to an accounting scandal. Since then, the Luckin share price has recovered significantly on the OTC market from less than two to more than eleven US dollars.
For the time being, Didi has gained the breathing room it desperately needed. This is because other domestic competitors such as the chauffeur service Cao Cao, which is owned by the car company Geely, have taken advantage of the company’s woes. They were able to win many new users last year. While DiDi still had 80 million active users by the end of 2021, down 20 percent year-on-year, Cao Cao grew 65 percent to 11.5 million. Its smaller rival T3 even grew by 125 percent to 6.6 million users. Joern Petring/Gregor Koppenburg
The German Engineering Federation (VDMA) is demanding that the quarantine requirement for vaccinated individuals entering China be lifted. It also criticizes the restrictions that come with the country’s zero-Covid strategy. “This is not only a huge nuisance with economic consequences for our member companies. China is also cutting into its own flesh with this restrictive entry policy, because access to service is being blocked just as much as to new technologies,” says Ulrich Ackermann, Head of the VDMA’s foreign trade department.
Selected members reiterate this stance. “The current quarantine situation, in our opinion inhumane, is choking off business with China,” says Ingo Cremer of thermoprocessing equipment manufacturer Cremer. “Bad quarantine hotels are like jail for our service staff… You could get the impression that China doesn’t want ‘foreigners’ in the country.”
VDMA is urging the government in Beijing “to abolish the quarantine for adequately vaccinated business travellers as well as the cumbersome and non-transparent visa requirements.” In addition, companies would need significantly expanded flight offers to China again to be able to fulfill their contractual obligations, Ackermann said.
The VDMA considers the strict travel regulations to be a threat to trade and investment. In its press release, the association cites exports of mechanical and plant engineering to China. These have “fallen noticeably” since the beginning of the year. From January to April, exports to the People’s Republic declined by 8.5 percent to €5.9 billion. Exports to the United States, on the other hand, increased by 13 percent to €7.3 billion in the same period. As a result, the United States further strengthened its top position in the export country rankings of the mechanical and plant engineering sector, the association emphasizes “China is and remains an important market for medium-sized companies as well,” says Ackermann. “But in view of all the obstructions, more and more companies will re-evaluate the business risks on the ground and start looking for alternative sales markets and production locations in Asia.” niw
Hong Kong has relaxed Covid regulations for flights: Previously, airlines transporting passengers who tested positive for Covid received a flight ban that lasted five days. This regulation has been suspended as of Thursday, a government spokesman announced. The rule, known in Hong Kong as the “circuit breaker mechanism,” had resulted in hundreds of flight cancellations since the beginning of the year. The metropolis now wants to ramp up test capacity: Inbound travelers will have to take an additional PCR test on the third day after arrival.
Until now, airlines whose flights carried at least five passengers or at least five percent of the total number of passengers tested positive on arrival had to suspend their flights to Hong Kong for five days. Previously, the ban was as high as 14 days.
The decision to suspend the system was made in part because of the large number of students entering the country right now who were studying abroad and wanted to return to Hong Kong, the government said in a statement. This is the first significant change in Hong Kong’s Covid policy since John Lee took office. One of the peak travel seasons for the metropolis is about to begin this summer.
Meanwhile, Shanghai residents had to line up for the third day in a row for renewed mass testing. The metropolis was on alert, Reuters reported. New infections related to illegal karaoke parties had been reported. Karaoke venues were reportedly ordered to comply with Covid regulations and test their patrons. ari/rtr
Security agencies in the United Kingdom and the United States have issued a joint warning of an increasing threat from the People’s Republic. FBI Director Christopher Wray warned that China poses the greatest threat to the economic and national security. The Communist Party would not only engage in industrial espionage and intellectual property theft at staggering levels. It has also recently been trying to rig elections in Western countries, Wray said.
The head of the British domestic intelligence service, Ken McCallum, announced that MI5 had massively increased its operation against Chinese activities. Compared to 2018, “seven times as many China-related investigations” had been launched “This might feel abstract. But it’s real and it’s pressing,” McCallum said. FBI Director Wray directly blamed Beijing: “The Chinese government is trying to shape the world by interfering in our politics.”
The US intelligence official also expressed geopolitical concerns. Regarding Taiwan, Wray said China could forcefully take the island back under its control. That would be “one of the most horrific business disruptions the world has ever seen,” the FBI chief warned. ari
China’s Ministry of Commerce joined other ministries on Thursday in holding out the prospect of extending tax breaks on the purchase of electric vehicles. A plan to return to full tax on EVs from next year could now be scrapped. The world’s largest car market has been hit hard in recent months by rigorous measures to curb the Covid pandemic in Shanghai and other parts of the country. Buyers of NEVs have received tax breaks since 2014, and an extension of the subsidy has been under discussion for several weeks (China.Table reported) rtr
To meet international climate goals, governments must work to expand solar panel production to countries other than China. That was the conclusion of a special report released Thursday by the International Energy Agency (IEA). According to the IEA, global solar module production capacity has continued to shift from Europe, Japan and the US primarily to China over the past decade. Chinese industrial and innovation policies have helped make photovoltaics the most affordable power generation technology in many parts of the world. However, this has also led to imbalances in PV supply chains.
The report analyzes PV supply chains from raw materials to the final product. It covers the five main segments of polysilicon, ingots, wafers, cells and modules, and highlights risks and vulnerabilities at each stage of the manufacturing process. China now has an 80 percent share in all stages of manufacturing, the report warns. If manufacturing facilities currently under construction are added, the share rises to more than 95 percent for key elements such as polysilicon and wafers, according to the IEA.
The IEA views China’s role with mixed feelings. “China has been instrumental in bringing down costs worldwide for solar PV, with multiple benefits for clean energy transitions,” said Executive Director Fatih Birol. “At the same time, the level of geographical concentration in global supply chains also creates potential challenges that governments need to address.” Accelerating the global transition to clean energy and the resulting growth in demand will put even more strain on these supply chains, he said.
To meet international energy and climate goals, global solar deployment will have to grow at a tremendous rate, the report states. This, in turn, would require a significant expansion of production capacity. leo
China’s emperors expected all subjects to submit to their power. Visitors had to kowtow three times and touch the ground three times each with their forehead 頭 (tou) 磕 (ke). The ritual of nine forehead touches (三拜九叩) ended after the abolition of the emperorship in 1911, but to this day, China’s leadership still requires people to swear absolute loyalty to it with verbal kowtowing.
Beijing also subdues foreigners with economic pressure. Especially if they allegedly hurt Chinese interests with their trade or their words. Powerful Western politicians and business leaders have allowed themselves to be paraded in this way. Walt Disney’s President Michael Eisner humiliated himself in 2008, as did Daimler CEO Dieter Zetsche ten years later. They secretly performed verbal prostrations at the feet of China’s rulers. This became public after Beijing’s leaders bragged about it.
Kowtow is one of the Chinese terms that found their way into the West. That was also the case with Mao’s mocking word invention paper tiger (纸老虎), which we use today as a synonym when something seems more fearsome than it is.
Kowtow refers to submissive behavior with a request for forgiveness. An open question is how low a foreigner should bow when kowtowing to power in China. The case of Lord Macartney, once the emissary of the English king, George III, gave rise to a debate that continues to this day. This was because the Earl refused to kowtow to Emperor Qianlong at his audience on September 14, 1793. Yet he actually wanted to do everything he could to sign a trade and friendship treaty with the imperial court on behalf of the crown, open an embassy in Beijing, and to expand trade by opening Chinese ports.
The emperor granted him an audience. But Macartney only bent the knee to him. When he was allowed to visit the emperor again on October 3 to hear his answer to his request to open China, a scandal ensued. In a long imperial edict, one sentence sealed his failure: “Our Celestial Empire possesses all things in prolific abundance and lacks no product within its own borders. There was therefore no need to import the manufactures of outside barbarians in exchange for our own produce.”
Macartney’s rejection has often been seen as a “clash of civilizations,” a deliberate break between East and West. In a recent book, Oxford professor Henrietta Harrison tells a different narrative, tracing the lives and work of the mission’s two interpreters, Li Zibiao and George Thomas Staunton For “The Perils of Interpreting,” the sinologist spent ten years researching Macartney’s failed mission. This has fascinated generations of historians because parts of it remain a mystery. Macartney could not have understood why China’s officials, “acted the way they did”. And they, in turn, did not understand him. What really happened at the kowtow is also unclear. Harrison casts doubt on the written records, both of the British and in the imperial archives. She speaks of manipulations of cultural understanding and problems with translating.
The first to refuse to kowtow is said to have been the Russian envoy Feodor Isakovitch Bankov in 1656, who as a result was not received in Beijing. 140 years later, Macartney and China’s emperor had long been ready to compromise. Qianlong no longer insisted on ninefold kowtowing. A simple kowtow would have been enough for him. Macartney offered a genuflection, as was also customary in the British royal court. The mission failed because of a lack of cultural understanding. It was not until 1816 that London made another attempt with Lord Amherst (1733-1858). Amherst, however, refused any kowtowing from the start. The audience with the successor emperor Jia Qing did not happen.
The West resorted to force to open China’s markets. The German sinologist and missionary Richard Wilhelm, one of the foremost experts on Chinese customs, described the European-Chinese dispute over kowtowing as a “sad chapter of mutual misunderstanding of fundamentally different points of view”. The “ignorance of Chinese customs led to a far-reaching humiliation of the English envoy Macartney”. He refused to kowtow, “the normal homage in Chinese eyes, to the Chinese emperor, but he did at least yield so far as to bend one knee.” But in doing so, Wilhelm wrote in 1905 in his essay “Chinese Manners,” Macartney only made another gaffe. Because this custom was first introduced under the Mongol Yuan dynasty and “was considered barbaric and was usually excluded from the imperial court”.
The British learned another extreme behavior from the fiasco. When Xi Jinping came to London on a state visit some 220 years later in October 2015, he was given a majestic reception. The CP leader was allowed to ride in a golden royal carriage together with Queen Elizabeth. He was not asked any sensitive political questions. At the end of the visit, a new “golden age” in trade relations was even proclaimed. But the new euphoria did not last long.
China expert Ian Buruma sneered at the venal West, which is willing to kowtow to China in any way, “The temptation to kowtow to the Soviet Union has never been so strong, because there was no money to be made there. China tempts us with its riches as long as we praise its emperors.”
Because China’s market was at stake, Beijing’s leadership had all the leverage in its hands. It even forced the influential Walt Disney Group to renounce itself. Its submission was triggered by the new film “Kundun,” which Disney produced in 1997 about the life of the current Dalai Lama, who is deeply hated by Beijing. When Kundun hit theaters, China’s Ministry of Foreign Trade blackmailed the corporation, saying, “We’re rethinking our entire business.” Disney initially restricted the film’s theatrical release. In October 1998, the corporation’s media chief, Michael Eissner, blasted off to Beijing for damage control. He had hired Henry Kissinger as an advisor, who arranged confidential behind-the-scenes talks with China’s Premier Zhu Rongji.
Zhu received Eissner on October 26, 1998, at the Hall of Purple Light in Zhongnanhai where foreign envoys once kowtowed to the imperial court, which Beijing’s leaders chose as their party headquarters in 1949. Eissner practiced verbal kowtowing: “We made a stupid mistake in releasing Kundun. The bad news is that the film was made; the good news is that nobody watched it. Here I want to apologize, and in the future we should prevent this sort of thing, which insults our friends, from happening.” Generous as he was, Zhu praised Eissner’s courage in “correcting a mistake. That shows your entrepreneurial vision.”
Zhu personally published the transcript of his conversation with Eissner on seven pages. It is part of his “Zhu Rongji Speech Record” published in 2011. If Eissner’s confession of remorse had become public in 1988, he would probably have been forced to resign.
Ten years later, in 2018, it was Daimler’s leadership’s turn to walk the Road to Canossa. The spark was a non-political slogan on Mercedes Benz’s Instagram channel, which featured a promotional photo for a sedan. Under the hashtag “Monday Motivation,” it read, “Look at situations from all angles, and you will become more open.” Beijing patriots looked at the author’s name: “The Dalai Lama”.
This led to a huge backlash online, and they did not let go of Daimler, even when the company deleted the photo. Daimler CEO Dieter Zetsche and his China representative Hubertus Troska then rushed to write an apology to the Chinese ambassador Shi Mingde in Berlin. State media such as Xinhua and Global Times gleefully quoted that Daimler “completely and without any reservation realizes the seriousness of this incident and deeply regrets this negligent mistake that has caused pain for the Chinese people”. They had no intention “to subvert or destroy China’s sovereignty and territorial integrity”, Zetsche had to confirm the contents of his letter to German media.
Zetsche wasn’t the only one to bend over backward like this. Time and again, China’s bloggers turn hyper-patriotic and Western companies and brands have to apologize for allegedly “insulting the feelings of the Chinese people”. The Financial Times advised affected companies to “act quickly, blame it on an isolated human error, and enthusiastically agree with the Communist Party’s view of things”.
The answer to the question of how low one may bow when kowtowing to China’s power, however, is not only about self-respect, but also about physical constitution. Sinologist Rainer Kloubert, while researching for his upcoming book on the Forbidden City, found out how Chinese dignitaries once “physically survived the ordeal of kowtowing”. For them, there was a practical Chinese solution. A court official’s robe of office included a string of pearls that first touched the ground during the required forehead touch. This fulfilled the kowtowing requirement. The older the contemporary, the longer his chain of office was permitted to be.
The world-famous Shanghai satirist Lin Yutang also took the kowtow sportingly. In his 1930 essay “With Love and Irony,” he mocked the kowtow as a “unique Chinese cultural art” and at the same time as an “efficient gymnastic exercise. Like rowing, it strains every muscle in the body.” For Lin, kowtowing and the typical Chinese fear of losing face were two sides of the same coin that the world should worry about: “Only when every Chinese loses face will China be able to become a democratic nation.” Not only the Chinese are still waiting for this, and for the end of kowtows.
Monks celebrate the Dalai Lama’s 87th birthday in Kathmandu, Nepal. In China, all mention of the spiritual leader of the Tibetans is prohibited. In contrast, the Tibetan community in the Nepalese capital is allowed to hold their processions, albeit under guard by security forces. EU Ambassador Nona Deprez took part in the celebrations.
To do their job, the police need access to personal data – that much goes without saying. For example, officers in Germany can also request transaction data. However, access to the central database “Inpol” is strictly regulated.
China also has strict regulations, and there is also an official police database. In Shanghai at least, however, there was also a considerable amount of carelessness: Officials made citizen data openly accessible via the cloud. Access was easier that way. But the result was now a gigantic and, above all, enormously embarrassing data leak. Now China’s Premier has reacted. He has announced an improvement in the protection of sensitive information.
The radicalism of China’s Internet regulators is something to envy from a European perspective. Last summer, the popular ride service DiDi, the Chinese Uber, was pulled from the app store. The government felt that the management had become too independent. Since then, the company has shown humility. Apparently, this is being rewarded: The app could soon be available again, our Beijing team reports. In addition, the hard crackdown on tech companies is slowing down after a campaign that lasted several years.
Perfect surveillance meets less-than-perfectionist users: The Shanghai police apparently left a database of citizen information lying around unprotected on a publicly accessible server for months. This was reported by CNN and the Wall Street Journal. The hackers, who were able to obtain the addresses and telephone and ID numbers of nearly a billion people, did not have to do much to get their hands on the treasure trove of data. Now they are offering it on the free market for 23 Bitcoin (China.Table reported).
The spectacular data breach has caused quite a stir. Those who learned about it despite censorship were outraged. And the government is apparently reacting to the incident without directly addressing it. Premier Li Keqiang announced a tightening of data management policies. “The security of personal information handling must meet the level required by law,” the State Council announced on Thursday. “Actions that violate the rights and interests of individuals and businesses, such as the illegal use and misuse of information, must be seriously investigated.”
It’s a regular occurrence in China for the central government to express shock at the incompetence of cadres and local authorities and promise quick corrective action. “The breach has clearly caught the attention of China’s top leadership,” writes Kendra Schaefer of consulting firm Trivium China. “Not so much a ‘hack’ as a casual ‘gonna help myself to these delicious data donuts someone left on the counter’.”
According to the CNN report, the database was located in a directory of the large data center operator Alicloud. It is a subsidiary of the Chinese e-commerce giant Alibaba. The Public Security Bureau (PSB, 公安) in Shanghai apparently used cloud storage space from the provider.
The directory contained a database with 23 terabytes of information from 970 million citizens across China. Western data security experts discovered the unsecured backdoor about a year ago. The information was apparently freely accessible ever since. Access was even possible via a web link.
Experts are now speculating about how the debacle happened. “Either they forgot about it, or they intentionally left it open because it’s easier for them to access,” CNN quotes security expert Vinny Troia of Shadowbyte, who discovered the leak early on. However, it could also have been a simple mistake.
IT executives at companies across the board know the dilemma: High data security is easy to achieve – but it always reduces convenience for users. Therefore, the goal is never maximum security, but rather always a compromise with accessibility. Still, experts routinely struggle against the ever-elusive negligence of employees. It starts with overly simple passwords. And ends – as now apparently in Shanghai – with large amounts of useful data that anyone can easily access.
Of course, if no password is required and a link can be used to access the personal database from any browser – even from a smartphone – things will be much easier. The industry standard here would be a double user login using a password and one-time codes from a dedicated device or app. Common practice would also be that access could only be gained via a heavily encrypted data tunnel. This would require dial-in, which in turn would require logging in from a secure device.
Such barriers, it seems, are what China’s police authorities like to spare themselves. Two years ago, Western analysts easily obtained millions of records on surveillance in Xinjiang from a police database. Again, the information was located on an unsecured server.
All of this indicates that while China already collects a lot of data and provides it to the authorities, professional handling of such data is yet to catch up. This would presumably require extensive IT training for ordinary civil servants and a sophisticated system for assigning rights. Until then, there are further risks of leaks due to carelessness on the user level.
After a disastrous year, brighter times are finally dawning for DiDi, the leading Chinese ride-hailing service. The company officially delisted from the New York Stock Exchange on June 10. It has thus fulfilled Beijing’s main requirement to return to normal business operations.
The Chinese Uber rival suffered a serious blow last summer. After its US IPO, the government unexpectedly intervened. The authorities ordered Didi’s services to be deleted from all Chinese app stores. As a result, no new users were able to register with the company’s services. The ultimate punishment.
Didi had launched its IPO in the USA without the consent of the leadership in Beijing. The message to the company was, therefore: Correct your mistakes, or you will pay. At the time, the sanctions against Didi were a further escalation of the great tech crackdown, which practically spared no Chinese Internet company.
It seems as if Beijing has reconsidered its tough stance against the tech giants in recent months due to the overall weak economic development (China.Table reported). And so, it seems, Didi could be expecting brighter times again.
The Wall Street Journal, citing individuals familiar with the matter, reports that Beijing is about to close its investigation into DiDi. The company’s apps will reportedly be back on Chinese app stores again soon. DiDi’s share price skyrocketed as a result. Since mid-May, its value has more than doubled.
However, the investment remains a disaster for investors who invested in the IPO last summer; since then, the valuation has dropped by almost half. Even after the recent mini-rally, they are still stuck with a loss of more than 80 percent. $56 billion in market capitalization has been burned.
The fact that Beijing is now releasing Didi from its chokehold is probably related above all to the progress the company has made in delisting from the US stock exchange. An alternative IPO in Hong Kong has not materialized yet – it is an extremely complex undertaking, after all. Instead, Didi shareholders voted to forgo an official listing on a US stock exchange.
DiDi shares can now only be traded on the so-called OTC (over-the-counter) market. Over-the-counter trading is supported by many brokers and banks. This means that there are hardly any differences for investors when buying the securities. However, the risks are greater because Didi no longer has to comply with the requirements and regulations of the New York Stock Exchange (NYSE), where the company was previously listed. Large investment funds, whose rules require them to hold only officially listed shares, will have to get rid of their DiDi shares.
A shift to the OTC market is not necessarily bad for the share price. Luckin Coffee was a recent example of this. The Chinese Starbucks competitor had to withdraw from the Nasdaq tech exchange two years ago due to an accounting scandal. Since then, the Luckin share price has recovered significantly on the OTC market from less than two to more than eleven US dollars.
For the time being, Didi has gained the breathing room it desperately needed. This is because other domestic competitors such as the chauffeur service Cao Cao, which is owned by the car company Geely, have taken advantage of the company’s woes. They were able to win many new users last year. While DiDi still had 80 million active users by the end of 2021, down 20 percent year-on-year, Cao Cao grew 65 percent to 11.5 million. Its smaller rival T3 even grew by 125 percent to 6.6 million users. Joern Petring/Gregor Koppenburg
The German Engineering Federation (VDMA) is demanding that the quarantine requirement for vaccinated individuals entering China be lifted. It also criticizes the restrictions that come with the country’s zero-Covid strategy. “This is not only a huge nuisance with economic consequences for our member companies. China is also cutting into its own flesh with this restrictive entry policy, because access to service is being blocked just as much as to new technologies,” says Ulrich Ackermann, Head of the VDMA’s foreign trade department.
Selected members reiterate this stance. “The current quarantine situation, in our opinion inhumane, is choking off business with China,” says Ingo Cremer of thermoprocessing equipment manufacturer Cremer. “Bad quarantine hotels are like jail for our service staff… You could get the impression that China doesn’t want ‘foreigners’ in the country.”
VDMA is urging the government in Beijing “to abolish the quarantine for adequately vaccinated business travellers as well as the cumbersome and non-transparent visa requirements.” In addition, companies would need significantly expanded flight offers to China again to be able to fulfill their contractual obligations, Ackermann said.
The VDMA considers the strict travel regulations to be a threat to trade and investment. In its press release, the association cites exports of mechanical and plant engineering to China. These have “fallen noticeably” since the beginning of the year. From January to April, exports to the People’s Republic declined by 8.5 percent to €5.9 billion. Exports to the United States, on the other hand, increased by 13 percent to €7.3 billion in the same period. As a result, the United States further strengthened its top position in the export country rankings of the mechanical and plant engineering sector, the association emphasizes “China is and remains an important market for medium-sized companies as well,” says Ackermann. “But in view of all the obstructions, more and more companies will re-evaluate the business risks on the ground and start looking for alternative sales markets and production locations in Asia.” niw
Hong Kong has relaxed Covid regulations for flights: Previously, airlines transporting passengers who tested positive for Covid received a flight ban that lasted five days. This regulation has been suspended as of Thursday, a government spokesman announced. The rule, known in Hong Kong as the “circuit breaker mechanism,” had resulted in hundreds of flight cancellations since the beginning of the year. The metropolis now wants to ramp up test capacity: Inbound travelers will have to take an additional PCR test on the third day after arrival.
Until now, airlines whose flights carried at least five passengers or at least five percent of the total number of passengers tested positive on arrival had to suspend their flights to Hong Kong for five days. Previously, the ban was as high as 14 days.
The decision to suspend the system was made in part because of the large number of students entering the country right now who were studying abroad and wanted to return to Hong Kong, the government said in a statement. This is the first significant change in Hong Kong’s Covid policy since John Lee took office. One of the peak travel seasons for the metropolis is about to begin this summer.
Meanwhile, Shanghai residents had to line up for the third day in a row for renewed mass testing. The metropolis was on alert, Reuters reported. New infections related to illegal karaoke parties had been reported. Karaoke venues were reportedly ordered to comply with Covid regulations and test their patrons. ari/rtr
Security agencies in the United Kingdom and the United States have issued a joint warning of an increasing threat from the People’s Republic. FBI Director Christopher Wray warned that China poses the greatest threat to the economic and national security. The Communist Party would not only engage in industrial espionage and intellectual property theft at staggering levels. It has also recently been trying to rig elections in Western countries, Wray said.
The head of the British domestic intelligence service, Ken McCallum, announced that MI5 had massively increased its operation against Chinese activities. Compared to 2018, “seven times as many China-related investigations” had been launched “This might feel abstract. But it’s real and it’s pressing,” McCallum said. FBI Director Wray directly blamed Beijing: “The Chinese government is trying to shape the world by interfering in our politics.”
The US intelligence official also expressed geopolitical concerns. Regarding Taiwan, Wray said China could forcefully take the island back under its control. That would be “one of the most horrific business disruptions the world has ever seen,” the FBI chief warned. ari
China’s Ministry of Commerce joined other ministries on Thursday in holding out the prospect of extending tax breaks on the purchase of electric vehicles. A plan to return to full tax on EVs from next year could now be scrapped. The world’s largest car market has been hit hard in recent months by rigorous measures to curb the Covid pandemic in Shanghai and other parts of the country. Buyers of NEVs have received tax breaks since 2014, and an extension of the subsidy has been under discussion for several weeks (China.Table reported) rtr
To meet international climate goals, governments must work to expand solar panel production to countries other than China. That was the conclusion of a special report released Thursday by the International Energy Agency (IEA). According to the IEA, global solar module production capacity has continued to shift from Europe, Japan and the US primarily to China over the past decade. Chinese industrial and innovation policies have helped make photovoltaics the most affordable power generation technology in many parts of the world. However, this has also led to imbalances in PV supply chains.
The report analyzes PV supply chains from raw materials to the final product. It covers the five main segments of polysilicon, ingots, wafers, cells and modules, and highlights risks and vulnerabilities at each stage of the manufacturing process. China now has an 80 percent share in all stages of manufacturing, the report warns. If manufacturing facilities currently under construction are added, the share rises to more than 95 percent for key elements such as polysilicon and wafers, according to the IEA.
The IEA views China’s role with mixed feelings. “China has been instrumental in bringing down costs worldwide for solar PV, with multiple benefits for clean energy transitions,” said Executive Director Fatih Birol. “At the same time, the level of geographical concentration in global supply chains also creates potential challenges that governments need to address.” Accelerating the global transition to clean energy and the resulting growth in demand will put even more strain on these supply chains, he said.
To meet international energy and climate goals, global solar deployment will have to grow at a tremendous rate, the report states. This, in turn, would require a significant expansion of production capacity. leo
China’s emperors expected all subjects to submit to their power. Visitors had to kowtow three times and touch the ground three times each with their forehead 頭 (tou) 磕 (ke). The ritual of nine forehead touches (三拜九叩) ended after the abolition of the emperorship in 1911, but to this day, China’s leadership still requires people to swear absolute loyalty to it with verbal kowtowing.
Beijing also subdues foreigners with economic pressure. Especially if they allegedly hurt Chinese interests with their trade or their words. Powerful Western politicians and business leaders have allowed themselves to be paraded in this way. Walt Disney’s President Michael Eisner humiliated himself in 2008, as did Daimler CEO Dieter Zetsche ten years later. They secretly performed verbal prostrations at the feet of China’s rulers. This became public after Beijing’s leaders bragged about it.
Kowtow is one of the Chinese terms that found their way into the West. That was also the case with Mao’s mocking word invention paper tiger (纸老虎), which we use today as a synonym when something seems more fearsome than it is.
Kowtow refers to submissive behavior with a request for forgiveness. An open question is how low a foreigner should bow when kowtowing to power in China. The case of Lord Macartney, once the emissary of the English king, George III, gave rise to a debate that continues to this day. This was because the Earl refused to kowtow to Emperor Qianlong at his audience on September 14, 1793. Yet he actually wanted to do everything he could to sign a trade and friendship treaty with the imperial court on behalf of the crown, open an embassy in Beijing, and to expand trade by opening Chinese ports.
The emperor granted him an audience. But Macartney only bent the knee to him. When he was allowed to visit the emperor again on October 3 to hear his answer to his request to open China, a scandal ensued. In a long imperial edict, one sentence sealed his failure: “Our Celestial Empire possesses all things in prolific abundance and lacks no product within its own borders. There was therefore no need to import the manufactures of outside barbarians in exchange for our own produce.”
Macartney’s rejection has often been seen as a “clash of civilizations,” a deliberate break between East and West. In a recent book, Oxford professor Henrietta Harrison tells a different narrative, tracing the lives and work of the mission’s two interpreters, Li Zibiao and George Thomas Staunton For “The Perils of Interpreting,” the sinologist spent ten years researching Macartney’s failed mission. This has fascinated generations of historians because parts of it remain a mystery. Macartney could not have understood why China’s officials, “acted the way they did”. And they, in turn, did not understand him. What really happened at the kowtow is also unclear. Harrison casts doubt on the written records, both of the British and in the imperial archives. She speaks of manipulations of cultural understanding and problems with translating.
The first to refuse to kowtow is said to have been the Russian envoy Feodor Isakovitch Bankov in 1656, who as a result was not received in Beijing. 140 years later, Macartney and China’s emperor had long been ready to compromise. Qianlong no longer insisted on ninefold kowtowing. A simple kowtow would have been enough for him. Macartney offered a genuflection, as was also customary in the British royal court. The mission failed because of a lack of cultural understanding. It was not until 1816 that London made another attempt with Lord Amherst (1733-1858). Amherst, however, refused any kowtowing from the start. The audience with the successor emperor Jia Qing did not happen.
The West resorted to force to open China’s markets. The German sinologist and missionary Richard Wilhelm, one of the foremost experts on Chinese customs, described the European-Chinese dispute over kowtowing as a “sad chapter of mutual misunderstanding of fundamentally different points of view”. The “ignorance of Chinese customs led to a far-reaching humiliation of the English envoy Macartney”. He refused to kowtow, “the normal homage in Chinese eyes, to the Chinese emperor, but he did at least yield so far as to bend one knee.” But in doing so, Wilhelm wrote in 1905 in his essay “Chinese Manners,” Macartney only made another gaffe. Because this custom was first introduced under the Mongol Yuan dynasty and “was considered barbaric and was usually excluded from the imperial court”.
The British learned another extreme behavior from the fiasco. When Xi Jinping came to London on a state visit some 220 years later in October 2015, he was given a majestic reception. The CP leader was allowed to ride in a golden royal carriage together with Queen Elizabeth. He was not asked any sensitive political questions. At the end of the visit, a new “golden age” in trade relations was even proclaimed. But the new euphoria did not last long.
China expert Ian Buruma sneered at the venal West, which is willing to kowtow to China in any way, “The temptation to kowtow to the Soviet Union has never been so strong, because there was no money to be made there. China tempts us with its riches as long as we praise its emperors.”
Because China’s market was at stake, Beijing’s leadership had all the leverage in its hands. It even forced the influential Walt Disney Group to renounce itself. Its submission was triggered by the new film “Kundun,” which Disney produced in 1997 about the life of the current Dalai Lama, who is deeply hated by Beijing. When Kundun hit theaters, China’s Ministry of Foreign Trade blackmailed the corporation, saying, “We’re rethinking our entire business.” Disney initially restricted the film’s theatrical release. In October 1998, the corporation’s media chief, Michael Eissner, blasted off to Beijing for damage control. He had hired Henry Kissinger as an advisor, who arranged confidential behind-the-scenes talks with China’s Premier Zhu Rongji.
Zhu received Eissner on October 26, 1998, at the Hall of Purple Light in Zhongnanhai where foreign envoys once kowtowed to the imperial court, which Beijing’s leaders chose as their party headquarters in 1949. Eissner practiced verbal kowtowing: “We made a stupid mistake in releasing Kundun. The bad news is that the film was made; the good news is that nobody watched it. Here I want to apologize, and in the future we should prevent this sort of thing, which insults our friends, from happening.” Generous as he was, Zhu praised Eissner’s courage in “correcting a mistake. That shows your entrepreneurial vision.”
Zhu personally published the transcript of his conversation with Eissner on seven pages. It is part of his “Zhu Rongji Speech Record” published in 2011. If Eissner’s confession of remorse had become public in 1988, he would probably have been forced to resign.
Ten years later, in 2018, it was Daimler’s leadership’s turn to walk the Road to Canossa. The spark was a non-political slogan on Mercedes Benz’s Instagram channel, which featured a promotional photo for a sedan. Under the hashtag “Monday Motivation,” it read, “Look at situations from all angles, and you will become more open.” Beijing patriots looked at the author’s name: “The Dalai Lama”.
This led to a huge backlash online, and they did not let go of Daimler, even when the company deleted the photo. Daimler CEO Dieter Zetsche and his China representative Hubertus Troska then rushed to write an apology to the Chinese ambassador Shi Mingde in Berlin. State media such as Xinhua and Global Times gleefully quoted that Daimler “completely and without any reservation realizes the seriousness of this incident and deeply regrets this negligent mistake that has caused pain for the Chinese people”. They had no intention “to subvert or destroy China’s sovereignty and territorial integrity”, Zetsche had to confirm the contents of his letter to German media.
Zetsche wasn’t the only one to bend over backward like this. Time and again, China’s bloggers turn hyper-patriotic and Western companies and brands have to apologize for allegedly “insulting the feelings of the Chinese people”. The Financial Times advised affected companies to “act quickly, blame it on an isolated human error, and enthusiastically agree with the Communist Party’s view of things”.
The answer to the question of how low one may bow when kowtowing to China’s power, however, is not only about self-respect, but also about physical constitution. Sinologist Rainer Kloubert, while researching for his upcoming book on the Forbidden City, found out how Chinese dignitaries once “physically survived the ordeal of kowtowing”. For them, there was a practical Chinese solution. A court official’s robe of office included a string of pearls that first touched the ground during the required forehead touch. This fulfilled the kowtowing requirement. The older the contemporary, the longer his chain of office was permitted to be.
The world-famous Shanghai satirist Lin Yutang also took the kowtow sportingly. In his 1930 essay “With Love and Irony,” he mocked the kowtow as a “unique Chinese cultural art” and at the same time as an “efficient gymnastic exercise. Like rowing, it strains every muscle in the body.” For Lin, kowtowing and the typical Chinese fear of losing face were two sides of the same coin that the world should worry about: “Only when every Chinese loses face will China be able to become a democratic nation.” Not only the Chinese are still waiting for this, and for the end of kowtows.
Monks celebrate the Dalai Lama’s 87th birthday in Kathmandu, Nepal. In China, all mention of the spiritual leader of the Tibetans is prohibited. In contrast, the Tibetan community in the Nepalese capital is allowed to hold their processions, albeit under guard by security forces. EU Ambassador Nona Deprez took part in the celebrations.