Table.Briefing: China

Exploitation on Silk Road + Battle of tech giants

  • G7 promise better labor rights than Belt and Road Initiative
  • Tencent and Bytedance fight for market share
  • Hong Kong: journalists arrested for their articles
  • CDU election manifesto: China as biggest challenge
  • US: no exemptions on minimum tax for China
  • Regulators investigate practices at DiDi
  • Johnny Erling: China – Home Alone
Dear reader,

China’s Belt and Road Initiative is often criticized because of Beijing’s associated geopolitical ambitions. To the exploitation of Chinese labor on the construction sites of the projects, however, less attention is paid. The G7 wants to distance itself from this and promises high labor standards in its recently adopted global infrastructure initiative. Will this convince the major Western economies? After all, cheap labor is a cynical, competitive advantage in the struggle for international contracts and prestige.

The IT giants Bytedance and Tencent are engaged in a fierce battle for dominance of the Chinese Internet. Christiane Kuehl describes how hard the battle is fought: Tencent excludes the competitor’s offers from its platforms. Bytedance counters with lawsuits. In turn, local patriotic judges help Tencent. Billions are turned over online in China, too – the stakes are high. Those who lose in this battle are in danger of going under.

In today’s column, Johnny Erling also addresses a conflict issue: the undiplomatic behavior of the “wolf warrior”. He looks at how Beijing’s foreign policymakers and ambassadors are becoming increasingly aggressive and arrogant. A new trend that does not fit at all with the art of “Jiang Li”, the ABC of pragmatic diplomacy cultivated at the end of the 1980s and in the 1990s and brought Beijing great diplomatic successes.

Your
Nico Beckert
Image of Nico  Beckert

Feature

Allegations of forced labor at Silk Road construction sites

At their summit meeting last weekend, the G7 countries agreed on a “new global infrastructure initiative” called Build Back Better World (B3W). Developing and emerging countries are to receive greater support in building their infrastructure, in the health sector, in digitalization and in technologies to combat climate change. The G7 Infrastructure Initiative is to be implemented in a “transparent and sustainable manner – financially, environmentally, and socially“.

High labor standards are also to become “a central component of the G7 approach“. The G7 thus wants to distinguish itself from China. This is urgently needed because China’s Belt and Road Initiative all too often goes hand in hand with the exploitation of Chinese workers, as civil society organizations have found out. The working conditions of local workers are generally somewhat better, but there is some evidence of labor rights violations, too.

Beijing’s New Silk Road is a multi-billion dollar project that now spans 139 countries. Like China’s economic boom, the Silk Road infrastructure projects rely heavily on workers who build roads, bridges and energy projects for low wages. According to official figures, nearly one million Chinese are working abroad – many of them on New Silk Road projects. In addition, countless workers are working illegally abroad on tourist visas, as well as numerous local workers hired for New Silk Road projects.

Lack of medical care, wage robbery, debt bondage

A new report by China Labor Watch (CLW) reveals serious labor rights violations faced by Chinese workers in New Silk Road projects that have also been highlighted previously. Interviews and evidence from photos and videos show: Workers interviewed by CLW sometimes lack access to medical care. One worker lost sight in one eye after a work accident without protective clothing. Another worker was isolated in an empty dormitory for “more than 20 days without medical treatment after contracting a Covid infection. Later, other workers found his dead body.” Workers at other projects were beaten by security guards for complaining about working conditions.

The NGO contacted nearly 100 workers for the study and conducted in-depth interviews with 22 of them. According to the study, the interviewees are employed by Chinese state-owned and subcontracted companies. In addition, employment contracts, complaints from workers, internal company documents and scientific articles were included in the study. Several interviewed workers said there were regular delays of several months in payment and unexplained deductions from wages. In some cases, workers also had to pay a recruitment fee to labor brokers to gain access to jobs abroad in the first place. If workers wanted to return to China, employers charged a “punitive fee” in some cases, the study said. Since all of the workers interviewed had their passports taken away after entering the country, they were also unable to leave on their own, according to the report. CLW reports that workers are forced to work without pay for several months if they cannot pay the penalty fees before leaving the country.

Embassies and consulates know

Almost all the interviewed workers were persuaded to work abroad with false promises. The promised wages were not paid, the working hours were much longer than previously announced, protective clothing was not provided, and the workers were only given tourist or business visas, so they had to work illegally without official work visas. According to China Labor Watch, many workers who did not receive work visas were afraid to talk about the labor rights violations they had suffered.

According to the NGO, Chinese embassies and consulates abroad are often aware of poor working conditions in New Silk Road projects. However, they “do not have the adequate staff and financial resources to monitor and prosecute violations of workers’ basic interests and rights abroad,” the organization said. While numerous regulations are calling on companies to protect Chinese workers abroad and respect the labor rights of host countries, it said. But these regulations are regularly ignored, writes attorney Aaron Halegua, who specializes in China-related labor law.

CLW adds that the Ministry of Commerce is responsible for protecting the interests and rights of workers abroad. But the main focus of this ministry is trade and economic relations. The Executive Director of China Labor Watch says, “The entire Silk Road is based on forced labor. China is exporting its low respect for human rights.” Other studies corroborated this impression. Chinese construction companies regularly break local laws on working hours and safety, withhold wages and use other coercive measures to control their Chinese workers, according to lawyer Halegua.

Local workers: slightly better conditions

For local workers in Chinese overseas projects and companies, working conditions are at least somewhat better. Unlike their Chinese colleagues, they can find other work if conditions become too harsh. But in low-income countries, that is not always possible. And studies show some evidence of labor law violations “in the form of long working hours, lack of written contracts and more frequent violations of labor regulations in Chinese companies compared to other foreign companies.” In addition, Chinese companies often prevent local workers from organizing unions. Also, Chinese companies abroad often pay lower wages than their international and, in some cases, domestic competitors.

  • Forced Labor
  • New Silk Road

Tencent vs. Bytedance: top dog and home advantage

Bytedance is growing into a furious opponent of tech giant Tencent. Late last week, the parent company of the short video app TikTok as well as its Chinese version of Tiktok, Douyin, posted a 59-page list of Bytedance product blocking actions on Tencent’s universal platform WeChat and its chat service QQ over the past three years. “More than 49 million people were stopped from sharing Douyin content to WeChat and QQ every day on average,” Bytedance complains. Video apps Huoshan and Xigua were also affected – while similar but Tencent-backed apps Kuaishou and Weishi could link to WeChat just fine. Bytedance has since deleted the post, but Chinese media had previously saved it. According to tech magazine Technode, Bytedance had written the post in anger over a comment by a top Tencent executive comparing short videos like those on Douyin to pig feed.

Things are rough in China’s fiercely competitive technology sector. Tencent and Alibaba, another giant online retailer, have been battling it out in their parallel universes for years: They both completely lock out each other’s products. Newer start-ups, however, are usually tolerated by the top dogs. Problems only arise when the newcomers become too big. Then the big ones bite the new ones away. For example, in an infamous case from 2013, Alibaba decided to ban the upstart e-commerce challenger Mogu from its platforms. Mogu never recovered.

Bytedance not afraid of conflict with Tencent

Bytedance has also become big enough to be unpleasant, especially for Tencent. While the group from Shenzhen ties smaller competitor start-ups with investments to itself or takes them over completely, this is no longer possible with Bytedance. As a result, WeChat now denies its users access to almost every Bytedance product. In addition to Douyin, that includes the enterprise messaging app and productivity tool Feishu. More than 900 million people use WeChat, so a block like this is quite significant.

Bytedance is one of the few to take on a conflict with Tencent. The Beijing-based company is permanently in legal disputes with Tencent – but the disputes did not go well so far. In September 2019, Bytedance sued Tencent in the coastal province of Fujian over the Douyin blockade based on the Unfair Competition Law, seeking an injunction and the equivalent of $13.9 million in compensation. Tencent responded with a clever move by having the case moved to its Shenzhen base – where it wins virtually every case. Douyin dropped the suit in frustration in March 2021. Shortly before that, Bytedance had already launched a second lawsuit against Tencent – this time in its own Beijing location and based on the antitrust rules. Tencent filed for transfer to Shenzhen for this case as well. A decision is still pending.

Local patriotism of courts helps Tencent

Conversely, Tencent won a lawsuit against Bytedance at the Intellectual Property Court in Guangzhou, the capital of its home province of Guangdong. Accordingly, Bytedance’s video app Huoshan is no longer allowed to call on online gamers to live stream playing Tencent’s “Honor of Kings” – the world’s most popular role-playing video game – on the app. Bytedance is also to pay $1.2 million in compensation to Tencent. Bytedance has already filed an appeal. According to a report in the South China Morning Post, the legal situation is quite fuzzy.

Tencent probably benefits from China’s traditionally strong local patriotism. This is very common, yet difficult to verify, Angela Zhang, an expert in Chinese law at the University of Hong Kong, tells China.Table. “Judges have some discretion. If it’s a case involving a local champion, I suspect some judges will see incentives to rule in favor of local companies.”

Bytedance: invading Tencent’s territory

Bytedance is actively pushing into Tencent’s playing field – and in doing so, it’s signed up for the challenge. For example, Douyin got a location-based social feature in April that lets users shake their phones to find people nearby and add each other to their friend lists. The feature has been around on WeChat for a long time.

Tencent has added hundreds of smaller tech companies to its technology ecosystem through share purchases over the years. In Meituan, which has become huge in its own right, the group is the largest shareholder with 21 percent. The so-called online-to-offline app Meituan can be used to book movie tickets or restaurants, order food, rent bicycles, and organize all sorts of leisure activities. In July 2020, according to Technode, Meituan began blocking Alibaba’s Alipay for some users – after the payment app pushed into the local food delivery market that Meituan claims as its turf. That would probably have been just fine for Tencent.

Balancing act for Bilibili

However, both Tencent (12.6 percent) and Alibaba (6.8 percent) hold shares in the streaming platform Bilibili, which originated in the anime scene. Bilibili thus has to walk a permanent tightrope between the two. The business is more competitive with Tencent’s: Bilibili’s e-sports live-streaming platform ranks third in China behind Huya and Douyu, each of which Tencent owns more than a third of – and which the group wants to merge. China’s monopoly watchdogs are currently looking at the merger plans.

Angela Zhang says all authorities with a mandate for the tech sector are currently increasing control and supervision. It’s about pricing, privacy, dealing with traders on the platforms, or security, she says. “The platforms bring all kinds of regulatory challenges.” Zhang wrote the book ‘China’s Antitrust Exceptionalism’ and is convinced that China’s approach would not work in the West. “The authorities in the West have less power, and companies there don’t obey as easily.”

Antitrust campaigns against tech companies will continue

Alibaba has already been fined €2.3 billion for antitrust violations. Reuters recently reported, citing two unnamed sources, that China is also currently preparing a fine of at least ¥10 billion (€1.32 billion) for Tencent. After Beijing called on 34 tech companies to behave in a more competition-friendly manner, at least all of them vowed to mend their ways.

Zhang doesn’t think the campaign will end soon. “At this stage, it’s difficult for companies to lobby.” So the companies are trying to make the competition look bad in front of the authorities – see Bytedance and Tencent. If it ends up removing all those pesky blockades this way, that can only make China’s users happy.

  • ByteDance
  • Technology
  • Tencent

News

Hong Kong: journalists arrested for their articles

Hong Kong’s National Security Law is exactly as repressively applied as feared: During a raid on the Apple Daily newspaper, the police arrested the paper’s Editor-in-Chief and the publisher’s Managing Director, as well as three other high-ranking employees. Authorities accuse them of endangering the city’s security by “conspiring with foreign forces”. The Security Ministry cites reports and comments published by the journalists as evidence. Police raided the publishing building on Thursday morning with 500 emergency personnel – to seize research material, among other things. The editorial team posted several videos of the action on its Facebook page.

The Apple Daily had clearly sided with the democracy movement in its reporting. Editor-in-Chief Ryan Law had repeatedly insisted in his commentaries on the preservation of civil rights in the southern Chinese metropolis. Publisher Cheung Kim-hung had gone along with the course. The Apple Daily had called on countries in the West, among others, to impose sanctions on Hong Kong and China to protest legal abuses there. Last August, newspaper founder Jimmy Lai had already been arrested. fin

  • Apple Daily
  • Freedom of speech
  • Jimmy Lai

CDU/CSU: China – greatest foreign and security policy challenge

The CDU/CSU wants to confront China “where necessary” “in close coordination with transatlantic partners and like-minded democracies with strength and unity“. At the same time, the CDU/CSU wants to “seek close cooperation with China where possible.” This emerges from the draft of the election program for the Bundestag elections at the end of September, which is available to China.Table. The Union wants to oppose China “especially, in the protection of intellectual property, our high technology, and our data.”

In the draft program, China is described as the “greatest foreign and security policy challenge.” Through investments, China exerts influence on other states and creates dependencies. The Union wants to counter this with “a European Clean-Tech Initiative” to build “partnerships in the field of state-of-the-art environmental technologies.” According to the draft program, the Union sees this as a “European alternative to the Chinese Silk Road.”

Concerning the economic policy, the Union is striving for “fair competition under equal conditions“. The CDU/CSU wants to strengthen the competitiveness of European industry “in the important industrial fields of the future such as artificial intelligence, semiconductors, hydrogen or blockchain.” This requires “an ambitious European industrial strategy and a European China strategy“. In development policy, the Union wants to “commit China to common standards”.

CDU candidate for chancellor Armin Laschet told the “Augsburger Allgemeine” yesterday: “That our country is doing comparatively well economically is also thanks to China’s rapid economic upswing after the pandemic.” China is a systemic competitor and partner, Laschet said, and must be integrated into the “rule-based order”. Laschet had already warned against a “purely domestically argued demarcation” against China a few days ago. nib

  • CDU/CSU
  • Geopolitics
  • New Silk Road

USA: no exceptions to G7 minimum tax for China

The US will not give China and other countries special treatment in the G7 plans for a global minimum tax on companies. This was stated by US Treasury Secretary Janet Yellen in the middle of the week. Yellen said the United States and other countries are continuing their efforts to persuade China to back the plans, which were endorsed by the G7 on Sunday.

Countries like China are currently reluctant to give up tax incentives that have been used to drive research and development or attract foreign investment in high-tech sectors, Reuters reports. An official briefed on the G7 talks told Reuters that China was opposed to the 15 percent minimum tax agreed by the G7 and that obtaining exemptions was its condition for agreeing to the G7 plans.

The South China Morning Post, on the other hand, quotes Ding Yifan, a senior researcher at a Chinese State Council think tank, as saying, “China is likely to accept the G7 proposal because the country no longer counts on tax breaks to attract investors, and our actual rate is much higher.” However, China could put new demands on the table, Ding said. The minimum tax proposal could hit Hong Kong harder than China, where the tax rate is often lower than the 16.5 percent set by law. Hong Kong’s Financial Secretary Paul Chan said the G7 plans could affect tax breaks the government gives to some industries.

The issue will also be discussed at the G20 summit in Venice on July 9 and 10. The minimum taxation plans could lead to further tensions between China and the West in the future. Depending on how the plans are implemented, third countries could reserve the right to collect the difference between the tax rate in the host country of foreign companies and the agreed minimum rate themselves. So if China continues to offer tax incentives and the tax rate is below 15 percent, third countries like the US could tax the difference themselves. But the details of the G7 plan have yet to be worked out. It could be years before any concrete implementation is finalized. Britain is also pushing for exemptions from the G7 plans for the City of London’s financial sector. And Switzerland has announced that it will offset higher tax rates with subsidies for companies. nib

  • Finance
  • G7
  • minimum tax

Shortly before IPO: Regulator investigates unfair practices at Didi Chuxing

China’s State Administration for Market Regulation (SAMR) has launched investigations into Didi Chuxing, the country’s largest ride-hailing service provider. This is reported by Reuters, citing sources familiar with the matter. According to the report, it is investigating whether DiDi used unfair competition practices to squeeze smaller competitors out of the ride-sharing market. In addition, SAMR is investigating whether Didi’s pricing mechanism for ride-sharing services is transparent enough.

DiDi most recently confirmed rumors of an IPO on New York’s Nasdaq technology exchange and filed a prospectus with the US Securities and Exchange Commission last week. An IPO is expected as early as July and could give the company a market value of up to $70 billion. However, Beijing’s increasing crackdown on its tech companies is now overshadowing DiDi’s planned IPO and is reminiscent of the crackdown by China’s antitrust authorities on Alibaba’s financial provider Ant Group. Ant had to postpone its planned IPO, and the SAMR issued a record $2.75 billion fine against the e-commerce retailer in April.

Back in April, SAMR called on DiDi, along with 30 other Internet companies, to conduct “a self-inspection” within a month to correct possible violations of anti-monopoly laws and unfair competition practices.

Didi says it employs 13 million drivers in China. It has achieved its dominant position in the ride-hailing market through years of subsidy wars with Alibaba’s domestic rival Kuaidi and US-based Uber. In 2015 DiDi merged with Kuaidi and, a year later, took over Uber’s China business. niw

  • Alibaba
  • Car Industry
  • Didi
  • SAMR

Opinion

China – Home Alone and aggressive

By Johnny Erling
Ein Bild von Johnny Erling

The new guard of Chinese foreign politicians and ambassadors no longer wants to know anything about diplomatic customs. They are so aggressive in their dealings with the outside world that they are internationally known as “wolf warriors“. They owe the nickname to the 2017 cult film “Wolf Warrior 2.” Its star Wu Jing frees Chinese hostages held abroad as a hero and a kind of Rambo. The Global Times said, defending the wolf warrior ploy that has since entered foreign policy, “Our diplomats protect national interests in unequivocal ways. They show extreme restraint in their ‘pushbacks’ compared to the bellicose and antagonistic Western media and politicians.”

In revealing arrogance, China’s Ambassador to France, Lu Shaye, demanded of foreign countries in an interview this week with the patriotic website Guancha.cn: “Our diplomatic style has changed and you must adapt to it.”

The new trend had its first impact in 2018 at the Beijing Foreign Ministry’s daily press conferences scheduled for 3 p.m. Their spokespersons were regularly late. They no longer felt it necessary to apologize to waiting journalists for their tardiness. Unpleasant questions were brusquely and often insultingly deflected. Conspicuously belligerent foreign office spokespersons like Zhao Lijian or Bureau Chief Hua Chunying use social media like Twitter to “defend” China against foreign lies, praised the Global Times. Although Twitter, Facebook or Youtube are banned in China and blocked by censorship.

A prime example of the wolf warrior mentality was recently offered by China’s Chief Diplomat Yang Jiechi and Foreign Minister Wang Yi. On March 18, they met with US Secretary of State Antony Blinken and National Security Adviser Jake Sullivan. Instead of testing the waters with the new administration of Joe Biden, they used the live two-minute public greeting provided for each side to engage in a grotesque exchange of blows. Blinken provided the pretext after announcing in his brief statement that he wanted to address sensitive issues in the meeting, such as the situation in Xinjiang, Hong Kong, Taiwan and cyberattacks from China. Yang felt provoked and berated the US in front of running cameras in a 15-minute tirade for its democratic deficits, anti-China actions and racism. China’s Internet community applauded him enthusiastically online.

Three months later, things were no better. On June 11, the two foreign ministers spoke on the phone. Their press statements, released by the Beijing Foreign Ministry and the State Department afterward, read as if they had been on different calls. They demonstratively spoke past each other. According to Beijing’s reading, Yang presented China’s fundamental positions and informed Blinken about the upcoming 100th anniversary of the Communist Party. Only in the last sentence does it say that the two also talked about other things. The State Department’s statement, which is barely half as long, lists only the dozen or so current problems that Blinken addressed, from North Korea, Iran and Myanmar to Xinjiang, Hong Kong and Taiwan, and his concern for US and Canadian citizens imprisoned in China.

Pragmatic conflict solutions – a thing of the past

Despite their steadfastness, China’s foreign policy makers used to understand the art of “Jiang Li” and the search for pragmatic solutions to conflicts. The veteran of this diplomacy, Foreign Minister Qian Qichen (1988-1997), revealed in his memoir ‘Ten Episodes in China’s Diplomacy’ how China managed to emerge from its isolation after the June 4, 1989, massacre and resolve global boycotts. “It was my most difficult time as Foreign Minister when one country after another announced sanctions against China.”

Instead of attacking all critics foul-mouthed and hitting back with tighter counter-sanctions, as it does today, Beijing pragmatically opened up to the outside world during the 1989 crisis. Of course, there was a calculation behind this, but China also had to overcome its own barriers. Between 1990 and 1992, for example, it established diplomatic relations with states such as Indonesia, South Korea, and Israel, joined APEC (Asia Pacific Economic Cooperation) in 1991, and accepted the simultaneous membership of Taiwan and Hong Kong. Qian prepared these many moves, which in the end also brought about the opening of the West towards China. Qian also engineered the China visit of Japanese Emperor Akihito and his wife in October 1992: “Once Japan’s emperor visited China for the first time in the 2000-year history of Sino-Japanese relations, it could not only break the Western countries’ ban on high-level visits but also improve China’s relations with Japan.”

Since the beginning of 2021, China’s wolf warriors have been acting even more arrogantly. Party leader Xi Jinping encouraged them with his January speech to the Party School. There he triumphantly issued the new motto: “Time and momentum are on our side” (时与势在我们一边). In view of China’s new power, disruptive maneuvers by the West would fail: “Our circle of friends is constantly growing, the balance of history is tilting toward China.”

That was five months before US President Joe Biden, the G7 group, Nato and the EU agreed in June to jointly oppose Beijing’s expansionist development, to the delight of ASEAN countries. After the Wolf Warrior movie, a new film is suddenly in the works two weeks before the party’s centennial celebrations: “China – Home Alone”.

  • Chinese Communist Party
  • Foreign Policy
  • Wolf warriors

Executive Moves

Translation missing.

Dessert

China is mourning the death of a very special pig: Zhu Jianqiang, which translates as “strong-willed pig.” Because that is exactly what it was known for: its will to survive. The pig had survived 36 days buried under rubble in the devastating 2008 Wenchuan earthquake in Sichuan province – with only rainwater and charcoal. According to eyewitnesses, however, it was so emaciated that it looked more like a goat. Since then, it has been revered as a “hero pig“.

Now the animal has died at the high pig age of 13 years from “old age and exhaustion,” as the museum in Dayi County announced. The animal lived there as a tourist attraction. Compared to humans, the pig lived to be 100 years old, the museum stressed. News of his death was shared more than half a billion times on the Chinese internet. Zhu Jianqiang is not completely gone, however. In 2011, Chinese researchers announced they had cloned six piglets using his genetic material. However, it is not known whether these have also inherited the original’s will to live. flee

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • G7 promise better labor rights than Belt and Road Initiative
    • Tencent and Bytedance fight for market share
    • Hong Kong: journalists arrested for their articles
    • CDU election manifesto: China as biggest challenge
    • US: no exemptions on minimum tax for China
    • Regulators investigate practices at DiDi
    • Johnny Erling: China – Home Alone
    Dear reader,

    China’s Belt and Road Initiative is often criticized because of Beijing’s associated geopolitical ambitions. To the exploitation of Chinese labor on the construction sites of the projects, however, less attention is paid. The G7 wants to distance itself from this and promises high labor standards in its recently adopted global infrastructure initiative. Will this convince the major Western economies? After all, cheap labor is a cynical, competitive advantage in the struggle for international contracts and prestige.

    The IT giants Bytedance and Tencent are engaged in a fierce battle for dominance of the Chinese Internet. Christiane Kuehl describes how hard the battle is fought: Tencent excludes the competitor’s offers from its platforms. Bytedance counters with lawsuits. In turn, local patriotic judges help Tencent. Billions are turned over online in China, too – the stakes are high. Those who lose in this battle are in danger of going under.

    In today’s column, Johnny Erling also addresses a conflict issue: the undiplomatic behavior of the “wolf warrior”. He looks at how Beijing’s foreign policymakers and ambassadors are becoming increasingly aggressive and arrogant. A new trend that does not fit at all with the art of “Jiang Li”, the ABC of pragmatic diplomacy cultivated at the end of the 1980s and in the 1990s and brought Beijing great diplomatic successes.

    Your
    Nico Beckert
    Image of Nico  Beckert

    Feature

    Allegations of forced labor at Silk Road construction sites

    At their summit meeting last weekend, the G7 countries agreed on a “new global infrastructure initiative” called Build Back Better World (B3W). Developing and emerging countries are to receive greater support in building their infrastructure, in the health sector, in digitalization and in technologies to combat climate change. The G7 Infrastructure Initiative is to be implemented in a “transparent and sustainable manner – financially, environmentally, and socially“.

    High labor standards are also to become “a central component of the G7 approach“. The G7 thus wants to distinguish itself from China. This is urgently needed because China’s Belt and Road Initiative all too often goes hand in hand with the exploitation of Chinese workers, as civil society organizations have found out. The working conditions of local workers are generally somewhat better, but there is some evidence of labor rights violations, too.

    Beijing’s New Silk Road is a multi-billion dollar project that now spans 139 countries. Like China’s economic boom, the Silk Road infrastructure projects rely heavily on workers who build roads, bridges and energy projects for low wages. According to official figures, nearly one million Chinese are working abroad – many of them on New Silk Road projects. In addition, countless workers are working illegally abroad on tourist visas, as well as numerous local workers hired for New Silk Road projects.

    Lack of medical care, wage robbery, debt bondage

    A new report by China Labor Watch (CLW) reveals serious labor rights violations faced by Chinese workers in New Silk Road projects that have also been highlighted previously. Interviews and evidence from photos and videos show: Workers interviewed by CLW sometimes lack access to medical care. One worker lost sight in one eye after a work accident without protective clothing. Another worker was isolated in an empty dormitory for “more than 20 days without medical treatment after contracting a Covid infection. Later, other workers found his dead body.” Workers at other projects were beaten by security guards for complaining about working conditions.

    The NGO contacted nearly 100 workers for the study and conducted in-depth interviews with 22 of them. According to the study, the interviewees are employed by Chinese state-owned and subcontracted companies. In addition, employment contracts, complaints from workers, internal company documents and scientific articles were included in the study. Several interviewed workers said there were regular delays of several months in payment and unexplained deductions from wages. In some cases, workers also had to pay a recruitment fee to labor brokers to gain access to jobs abroad in the first place. If workers wanted to return to China, employers charged a “punitive fee” in some cases, the study said. Since all of the workers interviewed had their passports taken away after entering the country, they were also unable to leave on their own, according to the report. CLW reports that workers are forced to work without pay for several months if they cannot pay the penalty fees before leaving the country.

    Embassies and consulates know

    Almost all the interviewed workers were persuaded to work abroad with false promises. The promised wages were not paid, the working hours were much longer than previously announced, protective clothing was not provided, and the workers were only given tourist or business visas, so they had to work illegally without official work visas. According to China Labor Watch, many workers who did not receive work visas were afraid to talk about the labor rights violations they had suffered.

    According to the NGO, Chinese embassies and consulates abroad are often aware of poor working conditions in New Silk Road projects. However, they “do not have the adequate staff and financial resources to monitor and prosecute violations of workers’ basic interests and rights abroad,” the organization said. While numerous regulations are calling on companies to protect Chinese workers abroad and respect the labor rights of host countries, it said. But these regulations are regularly ignored, writes attorney Aaron Halegua, who specializes in China-related labor law.

    CLW adds that the Ministry of Commerce is responsible for protecting the interests and rights of workers abroad. But the main focus of this ministry is trade and economic relations. The Executive Director of China Labor Watch says, “The entire Silk Road is based on forced labor. China is exporting its low respect for human rights.” Other studies corroborated this impression. Chinese construction companies regularly break local laws on working hours and safety, withhold wages and use other coercive measures to control their Chinese workers, according to lawyer Halegua.

    Local workers: slightly better conditions

    For local workers in Chinese overseas projects and companies, working conditions are at least somewhat better. Unlike their Chinese colleagues, they can find other work if conditions become too harsh. But in low-income countries, that is not always possible. And studies show some evidence of labor law violations “in the form of long working hours, lack of written contracts and more frequent violations of labor regulations in Chinese companies compared to other foreign companies.” In addition, Chinese companies often prevent local workers from organizing unions. Also, Chinese companies abroad often pay lower wages than their international and, in some cases, domestic competitors.

    • Forced Labor
    • New Silk Road

    Tencent vs. Bytedance: top dog and home advantage

    Bytedance is growing into a furious opponent of tech giant Tencent. Late last week, the parent company of the short video app TikTok as well as its Chinese version of Tiktok, Douyin, posted a 59-page list of Bytedance product blocking actions on Tencent’s universal platform WeChat and its chat service QQ over the past three years. “More than 49 million people were stopped from sharing Douyin content to WeChat and QQ every day on average,” Bytedance complains. Video apps Huoshan and Xigua were also affected – while similar but Tencent-backed apps Kuaishou and Weishi could link to WeChat just fine. Bytedance has since deleted the post, but Chinese media had previously saved it. According to tech magazine Technode, Bytedance had written the post in anger over a comment by a top Tencent executive comparing short videos like those on Douyin to pig feed.

    Things are rough in China’s fiercely competitive technology sector. Tencent and Alibaba, another giant online retailer, have been battling it out in their parallel universes for years: They both completely lock out each other’s products. Newer start-ups, however, are usually tolerated by the top dogs. Problems only arise when the newcomers become too big. Then the big ones bite the new ones away. For example, in an infamous case from 2013, Alibaba decided to ban the upstart e-commerce challenger Mogu from its platforms. Mogu never recovered.

    Bytedance not afraid of conflict with Tencent

    Bytedance has also become big enough to be unpleasant, especially for Tencent. While the group from Shenzhen ties smaller competitor start-ups with investments to itself or takes them over completely, this is no longer possible with Bytedance. As a result, WeChat now denies its users access to almost every Bytedance product. In addition to Douyin, that includes the enterprise messaging app and productivity tool Feishu. More than 900 million people use WeChat, so a block like this is quite significant.

    Bytedance is one of the few to take on a conflict with Tencent. The Beijing-based company is permanently in legal disputes with Tencent – but the disputes did not go well so far. In September 2019, Bytedance sued Tencent in the coastal province of Fujian over the Douyin blockade based on the Unfair Competition Law, seeking an injunction and the equivalent of $13.9 million in compensation. Tencent responded with a clever move by having the case moved to its Shenzhen base – where it wins virtually every case. Douyin dropped the suit in frustration in March 2021. Shortly before that, Bytedance had already launched a second lawsuit against Tencent – this time in its own Beijing location and based on the antitrust rules. Tencent filed for transfer to Shenzhen for this case as well. A decision is still pending.

    Local patriotism of courts helps Tencent

    Conversely, Tencent won a lawsuit against Bytedance at the Intellectual Property Court in Guangzhou, the capital of its home province of Guangdong. Accordingly, Bytedance’s video app Huoshan is no longer allowed to call on online gamers to live stream playing Tencent’s “Honor of Kings” – the world’s most popular role-playing video game – on the app. Bytedance is also to pay $1.2 million in compensation to Tencent. Bytedance has already filed an appeal. According to a report in the South China Morning Post, the legal situation is quite fuzzy.

    Tencent probably benefits from China’s traditionally strong local patriotism. This is very common, yet difficult to verify, Angela Zhang, an expert in Chinese law at the University of Hong Kong, tells China.Table. “Judges have some discretion. If it’s a case involving a local champion, I suspect some judges will see incentives to rule in favor of local companies.”

    Bytedance: invading Tencent’s territory

    Bytedance is actively pushing into Tencent’s playing field – and in doing so, it’s signed up for the challenge. For example, Douyin got a location-based social feature in April that lets users shake their phones to find people nearby and add each other to their friend lists. The feature has been around on WeChat for a long time.

    Tencent has added hundreds of smaller tech companies to its technology ecosystem through share purchases over the years. In Meituan, which has become huge in its own right, the group is the largest shareholder with 21 percent. The so-called online-to-offline app Meituan can be used to book movie tickets or restaurants, order food, rent bicycles, and organize all sorts of leisure activities. In July 2020, according to Technode, Meituan began blocking Alibaba’s Alipay for some users – after the payment app pushed into the local food delivery market that Meituan claims as its turf. That would probably have been just fine for Tencent.

    Balancing act for Bilibili

    However, both Tencent (12.6 percent) and Alibaba (6.8 percent) hold shares in the streaming platform Bilibili, which originated in the anime scene. Bilibili thus has to walk a permanent tightrope between the two. The business is more competitive with Tencent’s: Bilibili’s e-sports live-streaming platform ranks third in China behind Huya and Douyu, each of which Tencent owns more than a third of – and which the group wants to merge. China’s monopoly watchdogs are currently looking at the merger plans.

    Angela Zhang says all authorities with a mandate for the tech sector are currently increasing control and supervision. It’s about pricing, privacy, dealing with traders on the platforms, or security, she says. “The platforms bring all kinds of regulatory challenges.” Zhang wrote the book ‘China’s Antitrust Exceptionalism’ and is convinced that China’s approach would not work in the West. “The authorities in the West have less power, and companies there don’t obey as easily.”

    Antitrust campaigns against tech companies will continue

    Alibaba has already been fined €2.3 billion for antitrust violations. Reuters recently reported, citing two unnamed sources, that China is also currently preparing a fine of at least ¥10 billion (€1.32 billion) for Tencent. After Beijing called on 34 tech companies to behave in a more competition-friendly manner, at least all of them vowed to mend their ways.

    Zhang doesn’t think the campaign will end soon. “At this stage, it’s difficult for companies to lobby.” So the companies are trying to make the competition look bad in front of the authorities – see Bytedance and Tencent. If it ends up removing all those pesky blockades this way, that can only make China’s users happy.

    • ByteDance
    • Technology
    • Tencent

    News

    Hong Kong: journalists arrested for their articles

    Hong Kong’s National Security Law is exactly as repressively applied as feared: During a raid on the Apple Daily newspaper, the police arrested the paper’s Editor-in-Chief and the publisher’s Managing Director, as well as three other high-ranking employees. Authorities accuse them of endangering the city’s security by “conspiring with foreign forces”. The Security Ministry cites reports and comments published by the journalists as evidence. Police raided the publishing building on Thursday morning with 500 emergency personnel – to seize research material, among other things. The editorial team posted several videos of the action on its Facebook page.

    The Apple Daily had clearly sided with the democracy movement in its reporting. Editor-in-Chief Ryan Law had repeatedly insisted in his commentaries on the preservation of civil rights in the southern Chinese metropolis. Publisher Cheung Kim-hung had gone along with the course. The Apple Daily had called on countries in the West, among others, to impose sanctions on Hong Kong and China to protest legal abuses there. Last August, newspaper founder Jimmy Lai had already been arrested. fin

    • Apple Daily
    • Freedom of speech
    • Jimmy Lai

    CDU/CSU: China – greatest foreign and security policy challenge

    The CDU/CSU wants to confront China “where necessary” “in close coordination with transatlantic partners and like-minded democracies with strength and unity“. At the same time, the CDU/CSU wants to “seek close cooperation with China where possible.” This emerges from the draft of the election program for the Bundestag elections at the end of September, which is available to China.Table. The Union wants to oppose China “especially, in the protection of intellectual property, our high technology, and our data.”

    In the draft program, China is described as the “greatest foreign and security policy challenge.” Through investments, China exerts influence on other states and creates dependencies. The Union wants to counter this with “a European Clean-Tech Initiative” to build “partnerships in the field of state-of-the-art environmental technologies.” According to the draft program, the Union sees this as a “European alternative to the Chinese Silk Road.”

    Concerning the economic policy, the Union is striving for “fair competition under equal conditions“. The CDU/CSU wants to strengthen the competitiveness of European industry “in the important industrial fields of the future such as artificial intelligence, semiconductors, hydrogen or blockchain.” This requires “an ambitious European industrial strategy and a European China strategy“. In development policy, the Union wants to “commit China to common standards”.

    CDU candidate for chancellor Armin Laschet told the “Augsburger Allgemeine” yesterday: “That our country is doing comparatively well economically is also thanks to China’s rapid economic upswing after the pandemic.” China is a systemic competitor and partner, Laschet said, and must be integrated into the “rule-based order”. Laschet had already warned against a “purely domestically argued demarcation” against China a few days ago. nib

    • CDU/CSU
    • Geopolitics
    • New Silk Road

    USA: no exceptions to G7 minimum tax for China

    The US will not give China and other countries special treatment in the G7 plans for a global minimum tax on companies. This was stated by US Treasury Secretary Janet Yellen in the middle of the week. Yellen said the United States and other countries are continuing their efforts to persuade China to back the plans, which were endorsed by the G7 on Sunday.

    Countries like China are currently reluctant to give up tax incentives that have been used to drive research and development or attract foreign investment in high-tech sectors, Reuters reports. An official briefed on the G7 talks told Reuters that China was opposed to the 15 percent minimum tax agreed by the G7 and that obtaining exemptions was its condition for agreeing to the G7 plans.

    The South China Morning Post, on the other hand, quotes Ding Yifan, a senior researcher at a Chinese State Council think tank, as saying, “China is likely to accept the G7 proposal because the country no longer counts on tax breaks to attract investors, and our actual rate is much higher.” However, China could put new demands on the table, Ding said. The minimum tax proposal could hit Hong Kong harder than China, where the tax rate is often lower than the 16.5 percent set by law. Hong Kong’s Financial Secretary Paul Chan said the G7 plans could affect tax breaks the government gives to some industries.

    The issue will also be discussed at the G20 summit in Venice on July 9 and 10. The minimum taxation plans could lead to further tensions between China and the West in the future. Depending on how the plans are implemented, third countries could reserve the right to collect the difference between the tax rate in the host country of foreign companies and the agreed minimum rate themselves. So if China continues to offer tax incentives and the tax rate is below 15 percent, third countries like the US could tax the difference themselves. But the details of the G7 plan have yet to be worked out. It could be years before any concrete implementation is finalized. Britain is also pushing for exemptions from the G7 plans for the City of London’s financial sector. And Switzerland has announced that it will offset higher tax rates with subsidies for companies. nib

    • Finance
    • G7
    • minimum tax

    Shortly before IPO: Regulator investigates unfair practices at Didi Chuxing

    China’s State Administration for Market Regulation (SAMR) has launched investigations into Didi Chuxing, the country’s largest ride-hailing service provider. This is reported by Reuters, citing sources familiar with the matter. According to the report, it is investigating whether DiDi used unfair competition practices to squeeze smaller competitors out of the ride-sharing market. In addition, SAMR is investigating whether Didi’s pricing mechanism for ride-sharing services is transparent enough.

    DiDi most recently confirmed rumors of an IPO on New York’s Nasdaq technology exchange and filed a prospectus with the US Securities and Exchange Commission last week. An IPO is expected as early as July and could give the company a market value of up to $70 billion. However, Beijing’s increasing crackdown on its tech companies is now overshadowing DiDi’s planned IPO and is reminiscent of the crackdown by China’s antitrust authorities on Alibaba’s financial provider Ant Group. Ant had to postpone its planned IPO, and the SAMR issued a record $2.75 billion fine against the e-commerce retailer in April.

    Back in April, SAMR called on DiDi, along with 30 other Internet companies, to conduct “a self-inspection” within a month to correct possible violations of anti-monopoly laws and unfair competition practices.

    Didi says it employs 13 million drivers in China. It has achieved its dominant position in the ride-hailing market through years of subsidy wars with Alibaba’s domestic rival Kuaidi and US-based Uber. In 2015 DiDi merged with Kuaidi and, a year later, took over Uber’s China business. niw

    • Alibaba
    • Car Industry
    • Didi
    • SAMR

    Opinion

    China – Home Alone and aggressive

    By Johnny Erling
    Ein Bild von Johnny Erling

    The new guard of Chinese foreign politicians and ambassadors no longer wants to know anything about diplomatic customs. They are so aggressive in their dealings with the outside world that they are internationally known as “wolf warriors“. They owe the nickname to the 2017 cult film “Wolf Warrior 2.” Its star Wu Jing frees Chinese hostages held abroad as a hero and a kind of Rambo. The Global Times said, defending the wolf warrior ploy that has since entered foreign policy, “Our diplomats protect national interests in unequivocal ways. They show extreme restraint in their ‘pushbacks’ compared to the bellicose and antagonistic Western media and politicians.”

    In revealing arrogance, China’s Ambassador to France, Lu Shaye, demanded of foreign countries in an interview this week with the patriotic website Guancha.cn: “Our diplomatic style has changed and you must adapt to it.”

    The new trend had its first impact in 2018 at the Beijing Foreign Ministry’s daily press conferences scheduled for 3 p.m. Their spokespersons were regularly late. They no longer felt it necessary to apologize to waiting journalists for their tardiness. Unpleasant questions were brusquely and often insultingly deflected. Conspicuously belligerent foreign office spokespersons like Zhao Lijian or Bureau Chief Hua Chunying use social media like Twitter to “defend” China against foreign lies, praised the Global Times. Although Twitter, Facebook or Youtube are banned in China and blocked by censorship.

    A prime example of the wolf warrior mentality was recently offered by China’s Chief Diplomat Yang Jiechi and Foreign Minister Wang Yi. On March 18, they met with US Secretary of State Antony Blinken and National Security Adviser Jake Sullivan. Instead of testing the waters with the new administration of Joe Biden, they used the live two-minute public greeting provided for each side to engage in a grotesque exchange of blows. Blinken provided the pretext after announcing in his brief statement that he wanted to address sensitive issues in the meeting, such as the situation in Xinjiang, Hong Kong, Taiwan and cyberattacks from China. Yang felt provoked and berated the US in front of running cameras in a 15-minute tirade for its democratic deficits, anti-China actions and racism. China’s Internet community applauded him enthusiastically online.

    Three months later, things were no better. On June 11, the two foreign ministers spoke on the phone. Their press statements, released by the Beijing Foreign Ministry and the State Department afterward, read as if they had been on different calls. They demonstratively spoke past each other. According to Beijing’s reading, Yang presented China’s fundamental positions and informed Blinken about the upcoming 100th anniversary of the Communist Party. Only in the last sentence does it say that the two also talked about other things. The State Department’s statement, which is barely half as long, lists only the dozen or so current problems that Blinken addressed, from North Korea, Iran and Myanmar to Xinjiang, Hong Kong and Taiwan, and his concern for US and Canadian citizens imprisoned in China.

    Pragmatic conflict solutions – a thing of the past

    Despite their steadfastness, China’s foreign policy makers used to understand the art of “Jiang Li” and the search for pragmatic solutions to conflicts. The veteran of this diplomacy, Foreign Minister Qian Qichen (1988-1997), revealed in his memoir ‘Ten Episodes in China’s Diplomacy’ how China managed to emerge from its isolation after the June 4, 1989, massacre and resolve global boycotts. “It was my most difficult time as Foreign Minister when one country after another announced sanctions against China.”

    Instead of attacking all critics foul-mouthed and hitting back with tighter counter-sanctions, as it does today, Beijing pragmatically opened up to the outside world during the 1989 crisis. Of course, there was a calculation behind this, but China also had to overcome its own barriers. Between 1990 and 1992, for example, it established diplomatic relations with states such as Indonesia, South Korea, and Israel, joined APEC (Asia Pacific Economic Cooperation) in 1991, and accepted the simultaneous membership of Taiwan and Hong Kong. Qian prepared these many moves, which in the end also brought about the opening of the West towards China. Qian also engineered the China visit of Japanese Emperor Akihito and his wife in October 1992: “Once Japan’s emperor visited China for the first time in the 2000-year history of Sino-Japanese relations, it could not only break the Western countries’ ban on high-level visits but also improve China’s relations with Japan.”

    Since the beginning of 2021, China’s wolf warriors have been acting even more arrogantly. Party leader Xi Jinping encouraged them with his January speech to the Party School. There he triumphantly issued the new motto: “Time and momentum are on our side” (时与势在我们一边). In view of China’s new power, disruptive maneuvers by the West would fail: “Our circle of friends is constantly growing, the balance of history is tilting toward China.”

    That was five months before US President Joe Biden, the G7 group, Nato and the EU agreed in June to jointly oppose Beijing’s expansionist development, to the delight of ASEAN countries. After the Wolf Warrior movie, a new film is suddenly in the works two weeks before the party’s centennial celebrations: “China – Home Alone”.

    • Chinese Communist Party
    • Foreign Policy
    • Wolf warriors

    Executive Moves

    Translation missing.

    Dessert

    China is mourning the death of a very special pig: Zhu Jianqiang, which translates as “strong-willed pig.” Because that is exactly what it was known for: its will to survive. The pig had survived 36 days buried under rubble in the devastating 2008 Wenchuan earthquake in Sichuan province – with only rainwater and charcoal. According to eyewitnesses, however, it was so emaciated that it looked more like a goat. Since then, it has been revered as a “hero pig“.

    Now the animal has died at the high pig age of 13 years from “old age and exhaustion,” as the museum in Dayi County announced. The animal lived there as a tourist attraction. Compared to humans, the pig lived to be 100 years old, the museum stressed. News of his death was shared more than half a billion times on the Chinese internet. Zhu Jianqiang is not completely gone, however. In 2011, Chinese researchers announced they had cloned six piglets using his genetic material. However, it is not known whether these have also inherited the original’s will to live. flee

    China.Table Editors

    CHINA.TABLE EDITORIAL OFFICE

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