Higher wages at Meituan + Reasons behind tech crackdown
Meituan required to improve delivery driver treatment
Government will continue tech sector crackdown
CATL unveils new sodium-ion battery
Chipmakers lacking 600,000 specialists
Births: now with child benefit
IfW economists: decoupling from China is an expensive endeavor
Ukraine caves in under Xinjiang criticism
Qin Gang – A Wolf Warrior in Washington
Johnny Erling: how Austria’s marxists told on diplomats
Dear reader,
A trend toward better working conditions in China sounds like a dream come true for trade unionists and trade politicians in the West. Yet it happens entirely in the own interest of the Chinese leadership; after all, a socialist country cannot remain antisocial forever. This is why Chinese authorities are forcing the food-delivery app Meituan to offer better conditions to its delivery drivers. However, this discussion is also familiar to us. Be it Uber, Lieferando, or Gorilla, the questions are the same: what kind of employment relationship do companies have with their delivery drivers in the first place? And aren’t these trendy platforms creating a new precariat?
Meanwhile, the latest action against Meituan is part of a broader offensive against tech companies. In China’s eyes, these companies have acquired too much power. Their market share in their segments is too big, they gained too much specialized knowledge and collected too much data. As a result, these companies are becoming serious competition for the CCP’s control over the country. And this is the one thing that cannot be tolerated. But even in this regard, there is a parallel to the USA and Europe, where parliaments and regulators are now starting to give its Internet giants a slap on the wrists. China is just taking more severe actions against billion-dollar companies.
Today, we also have two stories from the world of diplomats. One is set during the Mao era, the other in the present. Their common theme: animal metaphors. China’s new ambassador to Washington, Qin Gang, is considered a “Wolf Warrior in sheep’s clothing,” as Michael Radunski puts it. In contrast, his predecessors in the 1960s were made “sacrificial lambs” by Mao himself, as our columnist Johnny Erling tells us. So the situation has always been a serious one, while the occasional little scandal surrounding ambassadors provides for amusement in foreign policy, then as now.
A set of new guidelines released on Monday afternoon by China’s State Administration for Market Regulation (SAMR) and six other government agencies aims to improve the protection of basic worker labor rights in “new forms of employment.” This refers primarily to the country’s large tech and e-commerce companies, which these reforms are to hold more accountable to guarantee their employees a safe basic income, job security, food safety, appropriate working conditions, and access to insurance coverage. Furthermore, authorities are demanding to end harassment and evaluation of mobile workforce, such as food delivery workers, through algorithms.
Meituan on the spot due to poor working conditions
The major Chinese online retailer and food delivery company Meituan-Dianping is now in the sights of authorities on multiple fronts. The company is being reprimanded primarily for the treatment of its employees. The group employed about three million drivers in 2020, who delivered an average of more than 27 million food orders a day. The problem: many were hired as part-time workers and did not receive adequate social and insurance benefits.
Experts now see big changes in the business models of tech companies in the near future. “These guidelines more clearly define the legal relationship between online service providers and part-time workers, an issue that used to be highly disputed as platforms such as Meituan and Ele.me outsourced their delivery services to third-party companies,” said Liu Jia, a lawyer at Yingke Law Firm in Hangzhou. “This will definitely increase costs for online platforms.”
The criticism is justified, and there are good reasons why Meituan’s share price is now crashing (as reported by China.Table). The social conditions of its drivers can often be alarming. Back in April, the Ministry of Human Resources and Social Security finally publicly denounced these abuses in state media, which had been known for years. In their reports, drivers were shown who earned the equivalent of €5.30 during a twelve-hour shift.
Delivery in time with the algorithms
Drivers are also given strict guidelines by the algorithms as to how long a food delivery is allowed to take. In one case, the company mandated a delivery time of 14 minutes, while the driver’s phone satnav showed a travel time of 24 minutes. To add insult to injury, the driver received a pay deduction after a customer complained about the food being cold. What Meituan did not know at that time: The “driver” was actually a high-ranking official of Beijing’s Ministry of Human Resources and Social Security who wanted to see the working conditions for himself (as reported by China.Table).
Another driver presented the following numbers: A one-hour ride earned him the equivalent of 86 euro cents after Meituan cut his share by 60 percent. Their drivers usually use their own electric motorbikes. To keep up with impossible schedules, they have been known to risk health and lives, both their own and of others on the street. Meituan has a working population of 9.5 million part-time and full-time drivers
Wang Xing, founder and CEO of Meituan, is notorious for his brusque corporate culture, where employees were evaluated strictly on sales targets and are quickly fired should they fail to meet expectations. However, after being pressured by authorities, Wang has now held out the prospect of ensuring that part-time employees will also receive social security and insurance.
A business model only made possible by cheap labor
Wang and his employees do not deny the accusations, but they are concerned about the impact on the business model. In the first quarter of this year, a margin of only 0.38 percent was possible if driver costs are excluded. The margin, they say, is not large. Investors obviously don’t agree with this, otherwise, the share price wouldn’t have recovered and would still be falling.
Meituan is already working with its partners on autonomous delivery vehicles, for example with Beijing-based manufacturer Li Auto, in which Meituan has a 13 percent stake (as reported by China.Table). The yellow and black styled cars no longer have a driver or passenger compartment, but instead, consist of compartments for food. The impact of these plans for drivers, who will lose their livelihood, is not yet foreseeable.
Wang founded Meituan in 2010, with the basic idea to set up an online rebate platform, modeled after the US company Groupon. Meituan has existed in its current form since 2015 when the company merged restaurant review platform dianping.com, a sort of Chinese version of “Yelp”. Later, its business model changed and resembled companies like Just Eat.
In addition to its core business of food delivery, the company has begun to expand into other areas of the service industry in recent years, from booking hotel rooms and hairdresser appointments to car-sharing and mobile phone charger rental. Similar to other online giants like Alibaba and Tencent, Meituan has long since become a “super app”. In the food delivery sector, Meituan is the biggest competitor to Alibaba’s delivery service platform Ele.me. This platform is also under investigation by authorities. In January, a desperate Ele.me delivery driver publicly set himself on fire in the eastern Chinese city of Taizhou.
China’s antitrust authorities already imposed a record fine of the equivalent of €2.3 billion on online retailer Alibaba for competition violations in April. And that is just one of many examples. Observers suspect that reforms and punitive measures are also intended to curb the social influence of private-sector companies in China.
E-commerce
Meituan
Society
Technology
Work
Internet companies face even more regulations
China’s battered tech stocks finally rallied on Thursday. On the Hong Kong stock exchange, the share price of Chinese internet giant Tencent leaped more than ten percent. Alibaba was up 7.7 percent and delivery service Meituan was up 9.5 percent. Investors were somewhat relieved by this leap in share prices, but lately, there is very little to laugh about for owners of Chinese internet stocks. The tech crackdown continues.
Usually, Chinese tech companies that are traded in New York or Hong Kong have actually been among the favorites of international investors for years, who have profited from the rapid growth of these companies. Anyone who purchased Alibaba stocks five years ago is still making a profit of over 130 percent today. Tencent’s securities gained as much as 160 percent over the same period. And those who bought Meituan shares in mid-2019, directly after the IPO, rejoice over a profit of 250 percent.
Hundreds of billions of dollars burned on the stock market
The problem is that while US companies such as Facebook, Amazon, and Google continue to climb to new highs, the situation for their Chinese competitors has changed fundamentally since the end of last year. The stocks of many Chinese tech companies have been on a downward slide ever since. In July alone, Tencent lost 170 €billion in market capitalization. The shares of Alibaba (minus €104 billion), Meituan (minus €88 billion) and Pinduoduo (minus €60 billion) also slumped, as financial agency Bloomberg has calculated.
In the meantime, there are speculations that ride-hailing service Didi wants to pull its shares from the market entirely. In June, the company went through with its IPO in New York despite warning shots from regulators (as reported by China.Table). Now, the US newspaper Wall Street Journal reports that company executives want to placate the Chinese leadership by delisting. The plan is to compensate its investors. However, the plan sounds a bit too ambitious, after all, the company raised $4.4 billion with its first public offering – and its share prices have recently dropped significantly.
Investors now seek to get rid of their shares of companies in this sector because further actions by Beijing’s supervisory authorities are being feared. China virtually targeted all tech giants. However, the widespread sale of shares is not only driven by, not so unreasonable, new rules intended to protect consumers. Rather, the crackdown has triggered fears that the government fundamentally intends to increase control over the tech giants and will give them less leeway in the future.
Worries began last fall with online giant Alibaba, which abruptly had to cancel the IPO of its financial subsidiary Ant Group shortly after a critical speech by company founder Jack Ma, who attacked China’s banking regulators. New rules were imposed that made it harder for Ant to lend to individuals through its platforms on the same scale as before. Later, the antitrust regulator imposed a record fine of ¥18 billion (€2.3 billion) on Alibaba.
Chinese companies threatened with severe penalties
In April, market regulator SAMR summoned 34 internet heavyweights to a meeting and threatened “severe penalties” if the companies broke rules in the future. The list of attendees included food delivery service Meituan, whose share price has since dropped more than half on the Hong Kong stock exchange. Earlier this week, the government announced that it would drastically tighten regulation of the food delivery market. One of these new regulations guarantees at least the local minimum wage paid for delivery drivers (as reported by China.Table).
Chinese ride-hailing company Didi came under heavy pressure just days after its IPO at the end of July. The government banned the group from continuing to offer its apps in Chinese app stores because of “serious violations” in the handling of personal data. New rules require Chinese tech companies to obtain approval from Authorities before going public overseas should they possess sensitive data. In practical terms, this move could mean that no Chinese internet company will be able to go public in the US.
For Tencent, virtually every announcement of new regulations for the industry in recent months has been bad news, as the company invested in many directly affected companies, including Meituan and Didi. Another slide in Tencent’s share price came with the announcement that the group had temporarily suspended new signups for its messenger and payment service WeChat until early August, due to a technical update to comply with new Chinese regulations and laws on data security and privacy.
The final straw that broke the camel’s back on the stock markets was Beijing’s announcement last weekend that private tutoring institutes would no longer be allowed to make profits – an economic death sentence (as reported by China.Table). The securities of affected companies plummeted by 90 percent in some cases. This made Chinese tech stocks drop even further due to the great uncertainty on the markets.
Further tech crackdowns expected
According to observers, Thursday’s rally was largely related to a hastily convened conference call by China’s stock market regulator, which sought to ease fears of foreign investors. As reported by the Financial Times, regulators spoke on Wednesday evening with executives from Wall Street banks and Chinese financial groups, among others. The meeting showed that the authorities “are not completely ignorant to the sentiment of international investors,” one participant was quoted. However, it was not enough to allay concerns about future regulatory policy, he said. After all, the strict rules would not come from the China Securities Regulatory Commission, but instead “from much higher up.”.
Indeed, it doesn’t look like the leadership has finished its cleanup of the industry yet. Just earlier this week, China’s Ministry of Industry and Information Technology announced a new “six-month campaign” to eliminate “problems in the Internet industry.”
Professional investors are unsure of what will happen next. “I don’t see an end to the regulatory crackdown,” Bloomberg quoted Paul Pong of investment firm Pegasus, who believes a fundamental revaluation of Chinese tech stocks will take place. Alica Yap, an analyst at Citigroup, painted a more optimistic picture for investors. With profits continuing to bubble up at many of the groups, companies could take advantage of the current environment to launch large share buyback programs, which could stabilize prices. Gregor Koppenburg/Joern Petring
Alibaba
Apps
Internet
Meituan
SAMR
Technology
Tencent
News
CATL introduces sodium-ion battery
Yesterday, the Chinese battery manufacturer CATL revealed a sodium-ion battery and a system that makes this new type of battery compatible with conventional lithium-ion batteries. This could compensate for the lower energy density of sodium-ion batteries without having to sacrifice their advantages. The manufacturing costs for sodium-ion batteries and cells are said to be cheaper, with one of the reasons being that resource prices for conventional battery raw materials such as lithium, cobalt and nickel have risen sharply in recent months.
“Sodium-ion batteries have advantages in terms of low-temperature performance, fast charging and environmental compatibility,” Bloomberg quoted Zeng Yuqun, chairman of CATL. However, Zeng noted that mass production of sodium-ion cells is still at an early stage and their low energy density makes them unsuited for electric mobility. However, the cost advantages over lithium-ion batteries couldmake them attractive for energy storage systems. This could help China to “achieve its goal of CO2 neutrality,” Bloomberg quotes an industry insider. The People’s Republic plans to build eight times more battery storage by 2025 to address the renewable energy storage problem (as reported by China.Table). nib
Batteries
Car Industry
CATL
Climate
Electromobility
Energy
Environment
Chip manufacturers lack about half a million specialists
China’s rise in the chip industry is being hampered by a massive shortage of well-trained engineers and other skilled workers. “If you add up all affected areas, our national chip talent gap is probably about 600,000 specialists.” Li Jingbo, dean of the School of Semiconductor Science and Technology at South China Normal University, told China’s Global Times. In particular, “the manufacturing and materials sector” is affected by a shortage of well-trained employees. Accordingly, there would be large gaps in university education in electrical and electronic engineering. Only one Chinese university (Tsinghua University) is among the top 20 universities in this field.
The People’s Republic currently produces less than 20 percent of its domestic semiconductors demand. China imported €350 billion worth of chips last year, most of which were based on Western technologies. Expenses for crucial semiconductors were higher than for oil imports. At the same time, the state has allocated more than $50 billion since 2014 to develop its own semiconductors. But the effort has been accompanied by “unfulfilled promises, stillborn projects, and government waste,” as Bloomberg assessed. nib
Chips
Industry
Semiconductor
Technology
IfW economists: decoupling diminishes prosperity
Around the globe, China skepticism is on the rise. Not least, the supply bottlenecks at the beginning of the pandemic have also fueled discussions in Germany about greater economic independence and decoupling from the People’s Republic. The Kiel Institute for the World Economy (IfW) has now used simulations to calculate how a decoupling from the People’s Republic would impact the EU economy. The result: if the EU unilaterally doubled trade barriers against China, costs of around €130 billion (0.8 percent of GDP) could arise. And with comparable countermeasures by China, the costs would grow to €170 billion (1 percent of GDP). The study thus aims to contribute to the discussion on “decoupling” from China.
The conclusion is disheartening. “If the EU were to decouple even partially from international supply networks, this would significantly worsen the living standards of people both in the EU and its trading partners,” concluded the study, which will be published this Friday and was made available to China.Table in advance. “New trade barriers should therefore be avoided at all costs,” advises Alexander Sandkamp, one of its authors. “The alleged benefits of greater autonomy or sovereignty are difficult to quantify and may even be illusory.
Despite the criticism of new trade barriers, the authors of the study see a need for action. To make the EU economy more resilient to crises in international commodity trading, a broadening of its supplier network, promotion of recycling and the improvement of warehousing would be preferable to the decoupling from international flows of goods. “In contrast to a policy of isolation, such steps can help to increase the crisis resilience of the European economy without jeopardizing the benefits of the international division of labor, which makes such an important contribution to the prosperity of the continent and its trading partners,” stressed Sandkamp.
China has been Germany’s largest trading partner outside the EU for years. Large German companies, in particular, are focusing on business with China. In recent years, the 30 largest listed companies in Germany have generated an average of 15 percent of their sales in the People’s Republic. German car manufacturers even generate more than 20 percent. flee
Decoupling
EU
GDP
Trade
First Chinese city grants child benefit
On Wednesday, the municipal government of Panzhihua in the province of Sichuan became the first Chinese city to announce subsidiesfor the second and third children of families. The monthly allowance is ¥500, equivalent to €65, and will be paid for each of the second and third children up to the age of three, the South China Morning Post reported. In 2019, the average monthly income in Panzhihua city was below ¥3500 per capita, equivalent to about €455. In addition, parents who have a municipal household registration are to receive free maternity care in hospitals in the city of 1.2 million people. Employers and state-owned enterprises in Panzhihua will be encouraged to set up more childcare facilities.
Just a few days ago, China’s State Council adopted measures to increase birth rates, including tax benefits and support for finding affordable housing (as reported by China.Table). The final decision on these proposals will be made next month. In May, the previous population policy was significantly changed with the introduction of the so-called three-child policy. Its goal is to stop the declining birth rate. nib
Children
Demographics
Society
Three-child policy
Pressure on Ukraine for declaration of support for Xinjiang
According to media reports, Ukraine has withdrawn its support for a multinational UN declaration on Xinjiang following pressure from China. China has threatened to restrict trade and deny access to COVID-19 vaccines, as US-funded radio station Radio Free Europe reported on Thursday, citing Ukrainian MPs and a government official. According to the report, Andriy Sharaskin, a member of the Ukrainian parliament’s foreign affairs committee, said pressure from Beijing continued until Ukraine withdrew its signature from the paper. The statement, which was drafted in June under the leadership of Canada and ultimately signed by some 40 countries, condemns the human rights abuses in Xinjiang by Chinese authorities and calls for a local UN investigation (as reported by China.Table). A senior official confirmed the incident to the radio station.
Sharaskin told US broadcaster NBC News that China had demanded Ukraine to withdraw the signature while blocking deliveries of vaccines that had already been paid for. Ukraine has purchased Sinovac vaccines.
Ukraine’s withdrawal had caused surprise during the UN Human Rights Council session in June. Back then, Western diplomats in particular already suspected China’s involvement, as several media reported. The fact that the People’s Republic is increasinglyexerting pressure on smaller and more dependent states in multinational organizations has also been noted by the UN, circles inside the organization confirmed. Agreements and negotiations of individual member states amongst themselves occur from time to time and cannot be prevented. ari
Corona Vaccines
Human Rights
Ukraine
United Nations
Vaccine diplomacy
Xinjiang
Profile
Qin Gang – Washington’s new Wolf Warrior
When Qin Gang arrived in Washington on Wednesday, China’s ambassador to the US appears conciliatory and willing to compromise. Dressed in a tailored black suit and red tie, the 55-year-old proclaims, “China-U.S. relations have once again reached a critical juncture, with not only many difficulties and challenges, but also great opportunities and potential.” The relationship is important, not only for Chinese and US societies, but for the future of the entire world, Gang said. In any case, he would strive to put US-China relations “back on track.”
These are words one might expect from a high-ranking diplomat – especially in what is by far the most important foreign position Beijing has to award. But Qin’s restraint on Wednesday doesn’t fit in at all with his previous behavior.
A wolf warrior in sheep’s clothing?
Rather, in his two terms as spokesman for the Chinese Foreign Ministry in Beijing, Qin earned the reputation of a “wolf warrior” – a member of a generation of Chinese diplomats who seek to defend the People’s Republic in the press and on online networks with their rough and sometimes even aggressive style. Qin himself justified such demeanor as a necessary response to baseless slander and crazed attacks against China. “It is impertinent to insult China while trying to prevent it from fighting back,” Qin said last February. Rather, he said, it is the duty of Chinese diplomats to stand up in the face of such indefensible slander.
Qin gave one of the most famous samples of his repartee in 2014, just days after then-U.S. President Barack Obama announced the US would remain the world’s leading power in the next century. At the time, Qin countered at a press conference in Beijing, “It must be nice to be the big boss in the world.” Only to add: “I don’t know if there is a Paul the Octopus who can predict the future of international relations. But I can assure them, China has been the big boss before, and for much longer than just a century.”
Close ties with President Xi
Born in Tianjin in 1966, Qin is a career diplomat. After studying international relations, he entered directly into the service of China’s Foreign Ministry in 1988. At headquarters, he was mainly responsible for Western Europe, and during this period he was sent to the Chinese Embassy in London three times in subordinate positions, while back home he rose steadily to the position of ministry spokesman. In 2014, Qin was then appointed chief of protocol and from this point on accompanied President Xi Jinping on many of his trips abroad, before finally being appointed vice foreign minister in 2018. In particular, the years from 2014 to 2017, when he was chief of protocol, were crucial to Qin’s appointment as ambassador to the United States. Few staff members have come into contact with President Xi for so long and so closely. During this time, he managed to earn the trust of the most important man in China.
Now he is taking up his first post as ambassador in Washington. He succeeds Cui Tiankai, who previously acted as China’s top representative in the US capital for eight years. Qin speaks fluent English, is married and has a son.
Back home, he is receiving praise in advance. “Qin Gang is the right person to handle the world’s most complicated and at the same time most important relations,” Liu Xiang of the Chinese Academy of Social Science told the state-run newspaper Global Times. At 55, he is much younger than his 69-year-old predecessor Cui, but has enough to defend Chinese interests even under great pressure. Liu confirms the Global Times that Qin’s position in the Chinese state apparatus is well established and adds: “he is close to the decision-making level and can see China-US relations and China’s foreign affairs from a higher and broader perspective,”
The Challenge from the USA
Qin will need a keen eye and above all a measure of diplomatic skill in his new position because he is going to face an increasingly negative US press and government. Like his predecessor Donald Trump, US President Joe Biden is taking a hard line on China. He sees China as a threat to the international order and since his inauguration has been doing everything he can to reactivate US alliances to build a broad community against China. This week, Biden even mentioned the risk of a real war with China that could result from Chinese cyberattacks.
Qin’s appointment as ambassador to Washington comes just days after US Deputy Secretary of State Wendy Sherman met with China’s Foreign Minister Wang Yi in Tianjin. Originally planned to prevent misunderstandings, the meeting ended in a harsh verbal exchange between the two countries’ diplomatic emissaries (as reported by China.Table). Relations between Beijing and Washington are currently extremely tense. There are plenty of issues of dispute, ranging from China’s actions in the Hong Kong Special Administrative Region, its treatment of the Uyghur Muslim minority in the province of Xinjiang to the mutual sanctions and punitive tariffs between the two great powers.
While US President Joe Biden has yet to install a new ambassador in Beijing, China has set the tone in Washington with Qin Gang as its top representative. It may be his first post as ambassador, but Washington should not be fooled by his conciliatory remarks upon his arrival. Qin is by no means a diplomatic novice, and the manners he displayed on Wednesday made him seem like a wolf in sheep’s clothing. His close ties to President Xi Jinping, and especially his notorious gruff manner, show that China is bracing for more tensions with the United States. Michael Radunski
Geopolitics
Qin Gang
USA
Xi Jinping
Column
How Chairman Mao once turned China’s diplomats into sacrificial lambs
By Johnny Erling
Today, China’s ambassadors wield increasingly overbearing influence over their host countries as lobbyists for the interests of a future superpower. Beijing’s foreign ministry has been breathing down their necks with its wolf-warrior mentality since President Xi Jinping ordered diplomats in November 2014 to stop holding back: From now on, they are to represent “the special foreign policy of a great power”.
Once upon a time, envoys from the People’s Republic were living under a different kind of pressure. Because they allegedly fraternized with capitalist foreign countries and let themselves be infected by their bourgeois lifestyle, Mao Zedong forced them to self-criticism and prescribed proletarian re-education. He made them his cultural revolutionary sacrificial lambs. For their diplomatic service, he demanded that “Revolutionary changes must come. Otherwise, things will get very dangerous. We should start it in Vienna first.” (来一个革命化，否则很危险。可以先从维也纳做起).
On September 9, 1966, Mao ordered all Chinese embassies to clean up in a revolutionary way.
The Chairman’s note – later shortened to “Mao’s Directive of 9. September” – petrified China’s ambassadors around the world. Mao scribbled it on the evening of September 9, 1966, on a letter sent to him the same day by Foreign Minister Chen Yi.
The senders of the letter, which has rested in Beijing’s party archives for 55 years, were “comrades” from the group of the “Rote Fahne,” the mouthpiece of the Austrian Marxist-Leninists (MLÖ). At the time, they were one of the first pro-Maoist groups in Western Europe to support the Cultural Revolution. The Salon Revolutionists complained about the bourgeois lifestyle they had witnessed in the Chinese trade mission in Vienna (there was no embassy until after 1971). Beijing’s representatives, they complained, had betrayed the “progressive working class,” wearing the finest white silk shirts and expensive suits. “They can’t be distinguished from the Taiwanese chain dogs of Chiang Kai-shek and drive two Mercedes cars at once.” The Viennese population would “whisper and poke fun at it. It pains us to hear this (…) we emphatically demand that this bourgeois behavior be reported to the responsible parties and that measures be taken against it.”
Now Wolf warriors, once sacrificial lambs: Mao’s banner slogan for his cultural revolutionary campaign against China’s diplomats. “Revolutionary change must come. Otherwise, things get very dangerous.”
The letter comes in handy for Mao’s campaign
The letter of complaint was sent to the Beijing CC Institute for the Publication of the Works of Marx, Engels, Lenin and Stalin. It was translated, then forwarded to the Foreign Ministry, and then by Minister Chen to Mao.
The letter was of great convenience to the chairman, right after he had shaken the government bureaucracy he hated with his call to “bomb the headquarters” on August 5. Now he could pour further fuel onto the fire of his Cultural Revolution. “This criticism is very well written,” Mao praised the Austrians. “All our foreign missions must heed it.” The new campaign should, therefore, “start in Vienna first.”
The former Chinese ambassador to Vienna, Wang Shu, told me about it when I asked him if he also had unpleasant memories of his time in Austria: “Only indirectly,” he replied. Because of the letter from the MLÖ. Mao’s directive was not only directed against diplomats, but also affected journalists like him who were working abroad for the news agency Xinhua at the time. “We all had to criticize ourselves.”
I came across reprints of the letter and Mao’s directive in newspapers from the period of the Cultural Revolution. The letter from the MLÖ was received almost simultaneously with a letter of complaint sent on August 29, 1966, by an African Mao sympathizer from Tanzania to Beijing’s Foreign Ministry. He also denounced the “luxurious life” of diplomats at the Chinese embassy and enclosed photographs of the ambassador’s wife with his letter. At receptions, she wore a traditional Qipao silk dress. West German luxury cars were among the embassy’s fleet, and at receptions, only the most expensive delicacies, whiskey, cognac, and imported beer were served.
One day after Mao’s intervention on September 9, Foreign Minister Chen Yi called for an emergency meeting. Mao’s directive was sent to all of China’s missions in the world with the call, “Destroy the old. Build the new.” The shocked Viennese trade delegate and his representatives vowed immediate improvement: they telegraphed Beijing that they would no longer use their official cars, and would travel only second class by train. They offered to halve their daily expenses from 20 shillings at the time to 10 shillings.
Only cultural revolutionary photos and books about Mao
Diplomats worldwide pledged to revolutionize all their activities, including their private lives, to display only cultural revolutionary photos and books about Mao in embassies, and to remove Chinese antiques, porcelains or handicrafts. On September 24, Beijing cut pay for all diplomats. Ma Jisen, once a staff member in the Foreign Ministry’s Western Europe Department, wrote in her 2003 Hong Kong book “Cultural Revolutionary Events in the Foreign Ministry” (马继森, 外交部文革纪实) that one-third of all diplomatic service staff were ordered back to China at that time. They had to participate in the Cultural Revolution, face criticism and self-criticism.
It took half a year for Mao to shut down his angry campaign on February 7, 1967, so that the embassies could resume operations. China’s diplomats, however, were distraught and continued for a long time – as the foreign official Li Jiazhong recalls – to only wear Sun Yatsen suits (the famous Mao clothing) and walked around in shoes made of cloth instead of leather. The women trashed their qipao robes and only wore trousers or skirts.
Only years later, the Viennese MLÖ learned of the impact of their letter. As other European Maoist groups of the time, few critically examined why they had once glorified the Great Chairman and his cruel Cultural Revolution. China’s historiography of today also tends to ignore how dictator Mao humiliated his diplomats in a Cultural Revolutionary manner and made the crawl before him. Now a new generation of diplomats is to lecture the world of the superiority of Chinese socialism – and this time on Xi’s behalf as his wolf warriors.
Cultural Revolution
Diplomacy
Mao Zedong
Xi Jinping
Dessert
Despite peak focus, German table tennis star Dimitrij Ovtcharov narrowly lost his match in the semi-finals against Chinese Ma Long (3:4) on Thursday. Ma will meet his compatriot Fan Zhendong in the finals today. The women’s finals were also already an all-Chinese affair: Chen Meng won against Sun Yingsha 4:2. Former world-ranking leader Ovtcharov is still competing for bronze.
Meituan required to improve delivery driver treatment
Government will continue tech sector crackdown
CATL unveils new sodium-ion battery
Chipmakers lacking 600,000 specialists
Births: now with child benefit
IfW economists: decoupling from China is an expensive endeavor
Ukraine caves in under Xinjiang criticism
Qin Gang – A Wolf Warrior in Washington
Johnny Erling: how Austria’s marxists told on diplomats
Dear reader,
A trend toward better working conditions in China sounds like a dream come true for trade unionists and trade politicians in the West. Yet it happens entirely in the own interest of the Chinese leadership; after all, a socialist country cannot remain antisocial forever. This is why Chinese authorities are forcing the food-delivery app Meituan to offer better conditions to its delivery drivers. However, this discussion is also familiar to us. Be it Uber, Lieferando, or Gorilla, the questions are the same: what kind of employment relationship do companies have with their delivery drivers in the first place? And aren’t these trendy platforms creating a new precariat?
Meanwhile, the latest action against Meituan is part of a broader offensive against tech companies. In China’s eyes, these companies have acquired too much power. Their market share in their segments is too big, they gained too much specialized knowledge and collected too much data. As a result, these companies are becoming serious competition for the CCP’s control over the country. And this is the one thing that cannot be tolerated. But even in this regard, there is a parallel to the USA and Europe, where parliaments and regulators are now starting to give its Internet giants a slap on the wrists. China is just taking more severe actions against billion-dollar companies.
Today, we also have two stories from the world of diplomats. One is set during the Mao era, the other in the present. Their common theme: animal metaphors. China’s new ambassador to Washington, Qin Gang, is considered a “Wolf Warrior in sheep’s clothing,” as Michael Radunski puts it. In contrast, his predecessors in the 1960s were made “sacrificial lambs” by Mao himself, as our columnist Johnny Erling tells us. So the situation has always been a serious one, while the occasional little scandal surrounding ambassadors provides for amusement in foreign policy, then as now.
A set of new guidelines released on Monday afternoon by China’s State Administration for Market Regulation (SAMR) and six other government agencies aims to improve the protection of basic worker labor rights in “new forms of employment.” This refers primarily to the country’s large tech and e-commerce companies, which these reforms are to hold more accountable to guarantee their employees a safe basic income, job security, food safety, appropriate working conditions, and access to insurance coverage. Furthermore, authorities are demanding to end harassment and evaluation of mobile workforce, such as food delivery workers, through algorithms.
Meituan on the spot due to poor working conditions
The major Chinese online retailer and food delivery company Meituan-Dianping is now in the sights of authorities on multiple fronts. The company is being reprimanded primarily for the treatment of its employees. The group employed about three million drivers in 2020, who delivered an average of more than 27 million food orders a day. The problem: many were hired as part-time workers and did not receive adequate social and insurance benefits.
Experts now see big changes in the business models of tech companies in the near future. “These guidelines more clearly define the legal relationship between online service providers and part-time workers, an issue that used to be highly disputed as platforms such as Meituan and Ele.me outsourced their delivery services to third-party companies,” said Liu Jia, a lawyer at Yingke Law Firm in Hangzhou. “This will definitely increase costs for online platforms.”
The criticism is justified, and there are good reasons why Meituan’s share price is now crashing (as reported by China.Table). The social conditions of its drivers can often be alarming. Back in April, the Ministry of Human Resources and Social Security finally publicly denounced these abuses in state media, which had been known for years. In their reports, drivers were shown who earned the equivalent of €5.30 during a twelve-hour shift.
Delivery in time with the algorithms
Drivers are also given strict guidelines by the algorithms as to how long a food delivery is allowed to take. In one case, the company mandated a delivery time of 14 minutes, while the driver’s phone satnav showed a travel time of 24 minutes. To add insult to injury, the driver received a pay deduction after a customer complained about the food being cold. What Meituan did not know at that time: The “driver” was actually a high-ranking official of Beijing’s Ministry of Human Resources and Social Security who wanted to see the working conditions for himself (as reported by China.Table).
Another driver presented the following numbers: A one-hour ride earned him the equivalent of 86 euro cents after Meituan cut his share by 60 percent. Their drivers usually use their own electric motorbikes. To keep up with impossible schedules, they have been known to risk health and lives, both their own and of others on the street. Meituan has a working population of 9.5 million part-time and full-time drivers
Wang Xing, founder and CEO of Meituan, is notorious for his brusque corporate culture, where employees were evaluated strictly on sales targets and are quickly fired should they fail to meet expectations. However, after being pressured by authorities, Wang has now held out the prospect of ensuring that part-time employees will also receive social security and insurance.
A business model only made possible by cheap labor
Wang and his employees do not deny the accusations, but they are concerned about the impact on the business model. In the first quarter of this year, a margin of only 0.38 percent was possible if driver costs are excluded. The margin, they say, is not large. Investors obviously don’t agree with this, otherwise, the share price wouldn’t have recovered and would still be falling.
Meituan is already working with its partners on autonomous delivery vehicles, for example with Beijing-based manufacturer Li Auto, in which Meituan has a 13 percent stake (as reported by China.Table). The yellow and black styled cars no longer have a driver or passenger compartment, but instead, consist of compartments for food. The impact of these plans for drivers, who will lose their livelihood, is not yet foreseeable.
Wang founded Meituan in 2010, with the basic idea to set up an online rebate platform, modeled after the US company Groupon. Meituan has existed in its current form since 2015 when the company merged restaurant review platform dianping.com, a sort of Chinese version of “Yelp”. Later, its business model changed and resembled companies like Just Eat.
In addition to its core business of food delivery, the company has begun to expand into other areas of the service industry in recent years, from booking hotel rooms and hairdresser appointments to car-sharing and mobile phone charger rental. Similar to other online giants like Alibaba and Tencent, Meituan has long since become a “super app”. In the food delivery sector, Meituan is the biggest competitor to Alibaba’s delivery service platform Ele.me. This platform is also under investigation by authorities. In January, a desperate Ele.me delivery driver publicly set himself on fire in the eastern Chinese city of Taizhou.
China’s antitrust authorities already imposed a record fine of the equivalent of €2.3 billion on online retailer Alibaba for competition violations in April. And that is just one of many examples. Observers suspect that reforms and punitive measures are also intended to curb the social influence of private-sector companies in China.
E-commerce
Meituan
Society
Technology
Work
Internet companies face even more regulations
China’s battered tech stocks finally rallied on Thursday. On the Hong Kong stock exchange, the share price of Chinese internet giant Tencent leaped more than ten percent. Alibaba was up 7.7 percent and delivery service Meituan was up 9.5 percent. Investors were somewhat relieved by this leap in share prices, but lately, there is very little to laugh about for owners of Chinese internet stocks. The tech crackdown continues.
Usually, Chinese tech companies that are traded in New York or Hong Kong have actually been among the favorites of international investors for years, who have profited from the rapid growth of these companies. Anyone who purchased Alibaba stocks five years ago is still making a profit of over 130 percent today. Tencent’s securities gained as much as 160 percent over the same period. And those who bought Meituan shares in mid-2019, directly after the IPO, rejoice over a profit of 250 percent.
Hundreds of billions of dollars burned on the stock market
The problem is that while US companies such as Facebook, Amazon, and Google continue to climb to new highs, the situation for their Chinese competitors has changed fundamentally since the end of last year. The stocks of many Chinese tech companies have been on a downward slide ever since. In July alone, Tencent lost 170 €billion in market capitalization. The shares of Alibaba (minus €104 billion), Meituan (minus €88 billion) and Pinduoduo (minus €60 billion) also slumped, as financial agency Bloomberg has calculated.
In the meantime, there are speculations that ride-hailing service Didi wants to pull its shares from the market entirely. In June, the company went through with its IPO in New York despite warning shots from regulators (as reported by China.Table). Now, the US newspaper Wall Street Journal reports that company executives want to placate the Chinese leadership by delisting. The plan is to compensate its investors. However, the plan sounds a bit too ambitious, after all, the company raised $4.4 billion with its first public offering – and its share prices have recently dropped significantly.
Investors now seek to get rid of their shares of companies in this sector because further actions by Beijing’s supervisory authorities are being feared. China virtually targeted all tech giants. However, the widespread sale of shares is not only driven by, not so unreasonable, new rules intended to protect consumers. Rather, the crackdown has triggered fears that the government fundamentally intends to increase control over the tech giants and will give them less leeway in the future.
Worries began last fall with online giant Alibaba, which abruptly had to cancel the IPO of its financial subsidiary Ant Group shortly after a critical speech by company founder Jack Ma, who attacked China’s banking regulators. New rules were imposed that made it harder for Ant to lend to individuals through its platforms on the same scale as before. Later, the antitrust regulator imposed a record fine of ¥18 billion (€2.3 billion) on Alibaba.
Chinese companies threatened with severe penalties
In April, market regulator SAMR summoned 34 internet heavyweights to a meeting and threatened “severe penalties” if the companies broke rules in the future. The list of attendees included food delivery service Meituan, whose share price has since dropped more than half on the Hong Kong stock exchange. Earlier this week, the government announced that it would drastically tighten regulation of the food delivery market. One of these new regulations guarantees at least the local minimum wage paid for delivery drivers (as reported by China.Table).
Chinese ride-hailing company Didi came under heavy pressure just days after its IPO at the end of July. The government banned the group from continuing to offer its apps in Chinese app stores because of “serious violations” in the handling of personal data. New rules require Chinese tech companies to obtain approval from Authorities before going public overseas should they possess sensitive data. In practical terms, this move could mean that no Chinese internet company will be able to go public in the US.
For Tencent, virtually every announcement of new regulations for the industry in recent months has been bad news, as the company invested in many directly affected companies, including Meituan and Didi. Another slide in Tencent’s share price came with the announcement that the group had temporarily suspended new signups for its messenger and payment service WeChat until early August, due to a technical update to comply with new Chinese regulations and laws on data security and privacy.
The final straw that broke the camel’s back on the stock markets was Beijing’s announcement last weekend that private tutoring institutes would no longer be allowed to make profits – an economic death sentence (as reported by China.Table). The securities of affected companies plummeted by 90 percent in some cases. This made Chinese tech stocks drop even further due to the great uncertainty on the markets.
Further tech crackdowns expected
According to observers, Thursday’s rally was largely related to a hastily convened conference call by China’s stock market regulator, which sought to ease fears of foreign investors. As reported by the Financial Times, regulators spoke on Wednesday evening with executives from Wall Street banks and Chinese financial groups, among others. The meeting showed that the authorities “are not completely ignorant to the sentiment of international investors,” one participant was quoted. However, it was not enough to allay concerns about future regulatory policy, he said. After all, the strict rules would not come from the China Securities Regulatory Commission, but instead “from much higher up.”.
Indeed, it doesn’t look like the leadership has finished its cleanup of the industry yet. Just earlier this week, China’s Ministry of Industry and Information Technology announced a new “six-month campaign” to eliminate “problems in the Internet industry.”
Professional investors are unsure of what will happen next. “I don’t see an end to the regulatory crackdown,” Bloomberg quoted Paul Pong of investment firm Pegasus, who believes a fundamental revaluation of Chinese tech stocks will take place. Alica Yap, an analyst at Citigroup, painted a more optimistic picture for investors. With profits continuing to bubble up at many of the groups, companies could take advantage of the current environment to launch large share buyback programs, which could stabilize prices. Gregor Koppenburg/Joern Petring
Alibaba
Apps
Internet
Meituan
SAMR
Technology
Tencent
News
CATL introduces sodium-ion battery
Yesterday, the Chinese battery manufacturer CATL revealed a sodium-ion battery and a system that makes this new type of battery compatible with conventional lithium-ion batteries. This could compensate for the lower energy density of sodium-ion batteries without having to sacrifice their advantages. The manufacturing costs for sodium-ion batteries and cells are said to be cheaper, with one of the reasons being that resource prices for conventional battery raw materials such as lithium, cobalt and nickel have risen sharply in recent months.
“Sodium-ion batteries have advantages in terms of low-temperature performance, fast charging and environmental compatibility,” Bloomberg quoted Zeng Yuqun, chairman of CATL. However, Zeng noted that mass production of sodium-ion cells is still at an early stage and their low energy density makes them unsuited for electric mobility. However, the cost advantages over lithium-ion batteries couldmake them attractive for energy storage systems. This could help China to “achieve its goal of CO2 neutrality,” Bloomberg quotes an industry insider. The People’s Republic plans to build eight times more battery storage by 2025 to address the renewable energy storage problem (as reported by China.Table). nib
Batteries
Car Industry
CATL
Climate
Electromobility
Energy
Environment
Chip manufacturers lack about half a million specialists
China’s rise in the chip industry is being hampered by a massive shortage of well-trained engineers and other skilled workers. “If you add up all affected areas, our national chip talent gap is probably about 600,000 specialists.” Li Jingbo, dean of the School of Semiconductor Science and Technology at South China Normal University, told China’s Global Times. In particular, “the manufacturing and materials sector” is affected by a shortage of well-trained employees. Accordingly, there would be large gaps in university education in electrical and electronic engineering. Only one Chinese university (Tsinghua University) is among the top 20 universities in this field.
The People’s Republic currently produces less than 20 percent of its domestic semiconductors demand. China imported €350 billion worth of chips last year, most of which were based on Western technologies. Expenses for crucial semiconductors were higher than for oil imports. At the same time, the state has allocated more than $50 billion since 2014 to develop its own semiconductors. But the effort has been accompanied by “unfulfilled promises, stillborn projects, and government waste,” as Bloomberg assessed. nib
Chips
Industry
Semiconductor
Technology
IfW economists: decoupling diminishes prosperity
Around the globe, China skepticism is on the rise. Not least, the supply bottlenecks at the beginning of the pandemic have also fueled discussions in Germany about greater economic independence and decoupling from the People’s Republic. The Kiel Institute for the World Economy (IfW) has now used simulations to calculate how a decoupling from the People’s Republic would impact the EU economy. The result: if the EU unilaterally doubled trade barriers against China, costs of around €130 billion (0.8 percent of GDP) could arise. And with comparable countermeasures by China, the costs would grow to €170 billion (1 percent of GDP). The study thus aims to contribute to the discussion on “decoupling” from China.
The conclusion is disheartening. “If the EU were to decouple even partially from international supply networks, this would significantly worsen the living standards of people both in the EU and its trading partners,” concluded the study, which will be published this Friday and was made available to China.Table in advance. “New trade barriers should therefore be avoided at all costs,” advises Alexander Sandkamp, one of its authors. “The alleged benefits of greater autonomy or sovereignty are difficult to quantify and may even be illusory.
Despite the criticism of new trade barriers, the authors of the study see a need for action. To make the EU economy more resilient to crises in international commodity trading, a broadening of its supplier network, promotion of recycling and the improvement of warehousing would be preferable to the decoupling from international flows of goods. “In contrast to a policy of isolation, such steps can help to increase the crisis resilience of the European economy without jeopardizing the benefits of the international division of labor, which makes such an important contribution to the prosperity of the continent and its trading partners,” stressed Sandkamp.
China has been Germany’s largest trading partner outside the EU for years. Large German companies, in particular, are focusing on business with China. In recent years, the 30 largest listed companies in Germany have generated an average of 15 percent of their sales in the People’s Republic. German car manufacturers even generate more than 20 percent. flee
Decoupling
EU
GDP
Trade
First Chinese city grants child benefit
On Wednesday, the municipal government of Panzhihua in the province of Sichuan became the first Chinese city to announce subsidiesfor the second and third children of families. The monthly allowance is ¥500, equivalent to €65, and will be paid for each of the second and third children up to the age of three, the South China Morning Post reported. In 2019, the average monthly income in Panzhihua city was below ¥3500 per capita, equivalent to about €455. In addition, parents who have a municipal household registration are to receive free maternity care in hospitals in the city of 1.2 million people. Employers and state-owned enterprises in Panzhihua will be encouraged to set up more childcare facilities.
Just a few days ago, China’s State Council adopted measures to increase birth rates, including tax benefits and support for finding affordable housing (as reported by China.Table). The final decision on these proposals will be made next month. In May, the previous population policy was significantly changed with the introduction of the so-called three-child policy. Its goal is to stop the declining birth rate. nib
Children
Demographics
Society
Three-child policy
Pressure on Ukraine for declaration of support for Xinjiang
According to media reports, Ukraine has withdrawn its support for a multinational UN declaration on Xinjiang following pressure from China. China has threatened to restrict trade and deny access to COVID-19 vaccines, as US-funded radio station Radio Free Europe reported on Thursday, citing Ukrainian MPs and a government official. According to the report, Andriy Sharaskin, a member of the Ukrainian parliament’s foreign affairs committee, said pressure from Beijing continued until Ukraine withdrew its signature from the paper. The statement, which was drafted in June under the leadership of Canada and ultimately signed by some 40 countries, condemns the human rights abuses in Xinjiang by Chinese authorities and calls for a local UN investigation (as reported by China.Table). A senior official confirmed the incident to the radio station.
Sharaskin told US broadcaster NBC News that China had demanded Ukraine to withdraw the signature while blocking deliveries of vaccines that had already been paid for. Ukraine has purchased Sinovac vaccines.
Ukraine’s withdrawal had caused surprise during the UN Human Rights Council session in June. Back then, Western diplomats in particular already suspected China’s involvement, as several media reported. The fact that the People’s Republic is increasinglyexerting pressure on smaller and more dependent states in multinational organizations has also been noted by the UN, circles inside the organization confirmed. Agreements and negotiations of individual member states amongst themselves occur from time to time and cannot be prevented. ari
Corona Vaccines
Human Rights
Ukraine
United Nations
Vaccine diplomacy
Xinjiang
Profile
Qin Gang – Washington’s new Wolf Warrior
When Qin Gang arrived in Washington on Wednesday, China’s ambassador to the US appears conciliatory and willing to compromise. Dressed in a tailored black suit and red tie, the 55-year-old proclaims, “China-U.S. relations have once again reached a critical juncture, with not only many difficulties and challenges, but also great opportunities and potential.” The relationship is important, not only for Chinese and US societies, but for the future of the entire world, Gang said. In any case, he would strive to put US-China relations “back on track.”
These are words one might expect from a high-ranking diplomat – especially in what is by far the most important foreign position Beijing has to award. But Qin’s restraint on Wednesday doesn’t fit in at all with his previous behavior.
A wolf warrior in sheep’s clothing?
Rather, in his two terms as spokesman for the Chinese Foreign Ministry in Beijing, Qin earned the reputation of a “wolf warrior” – a member of a generation of Chinese diplomats who seek to defend the People’s Republic in the press and on online networks with their rough and sometimes even aggressive style. Qin himself justified such demeanor as a necessary response to baseless slander and crazed attacks against China. “It is impertinent to insult China while trying to prevent it from fighting back,” Qin said last February. Rather, he said, it is the duty of Chinese diplomats to stand up in the face of such indefensible slander.
Qin gave one of the most famous samples of his repartee in 2014, just days after then-U.S. President Barack Obama announced the US would remain the world’s leading power in the next century. At the time, Qin countered at a press conference in Beijing, “It must be nice to be the big boss in the world.” Only to add: “I don’t know if there is a Paul the Octopus who can predict the future of international relations. But I can assure them, China has been the big boss before, and for much longer than just a century.”
Close ties with President Xi
Born in Tianjin in 1966, Qin is a career diplomat. After studying international relations, he entered directly into the service of China’s Foreign Ministry in 1988. At headquarters, he was mainly responsible for Western Europe, and during this period he was sent to the Chinese Embassy in London three times in subordinate positions, while back home he rose steadily to the position of ministry spokesman. In 2014, Qin was then appointed chief of protocol and from this point on accompanied President Xi Jinping on many of his trips abroad, before finally being appointed vice foreign minister in 2018. In particular, the years from 2014 to 2017, when he was chief of protocol, were crucial to Qin’s appointment as ambassador to the United States. Few staff members have come into contact with President Xi for so long and so closely. During this time, he managed to earn the trust of the most important man in China.
Now he is taking up his first post as ambassador in Washington. He succeeds Cui Tiankai, who previously acted as China’s top representative in the US capital for eight years. Qin speaks fluent English, is married and has a son.
Back home, he is receiving praise in advance. “Qin Gang is the right person to handle the world’s most complicated and at the same time most important relations,” Liu Xiang of the Chinese Academy of Social Science told the state-run newspaper Global Times. At 55, he is much younger than his 69-year-old predecessor Cui, but has enough to defend Chinese interests even under great pressure. Liu confirms the Global Times that Qin’s position in the Chinese state apparatus is well established and adds: “he is close to the decision-making level and can see China-US relations and China’s foreign affairs from a higher and broader perspective,”
The Challenge from the USA
Qin will need a keen eye and above all a measure of diplomatic skill in his new position because he is going to face an increasingly negative US press and government. Like his predecessor Donald Trump, US President Joe Biden is taking a hard line on China. He sees China as a threat to the international order and since his inauguration has been doing everything he can to reactivate US alliances to build a broad community against China. This week, Biden even mentioned the risk of a real war with China that could result from Chinese cyberattacks.
Qin’s appointment as ambassador to Washington comes just days after US Deputy Secretary of State Wendy Sherman met with China’s Foreign Minister Wang Yi in Tianjin. Originally planned to prevent misunderstandings, the meeting ended in a harsh verbal exchange between the two countries’ diplomatic emissaries (as reported by China.Table). Relations between Beijing and Washington are currently extremely tense. There are plenty of issues of dispute, ranging from China’s actions in the Hong Kong Special Administrative Region, its treatment of the Uyghur Muslim minority in the province of Xinjiang to the mutual sanctions and punitive tariffs between the two great powers.
While US President Joe Biden has yet to install a new ambassador in Beijing, China has set the tone in Washington with Qin Gang as its top representative. It may be his first post as ambassador, but Washington should not be fooled by his conciliatory remarks upon his arrival. Qin is by no means a diplomatic novice, and the manners he displayed on Wednesday made him seem like a wolf in sheep’s clothing. His close ties to President Xi Jinping, and especially his notorious gruff manner, show that China is bracing for more tensions with the United States. Michael Radunski
Geopolitics
Qin Gang
USA
Xi Jinping
Column
How Chairman Mao once turned China’s diplomats into sacrificial lambs
By Johnny Erling
Today, China’s ambassadors wield increasingly overbearing influence over their host countries as lobbyists for the interests of a future superpower. Beijing’s foreign ministry has been breathing down their necks with its wolf-warrior mentality since President Xi Jinping ordered diplomats in November 2014 to stop holding back: From now on, they are to represent “the special foreign policy of a great power”.
Once upon a time, envoys from the People’s Republic were living under a different kind of pressure. Because they allegedly fraternized with capitalist foreign countries and let themselves be infected by their bourgeois lifestyle, Mao Zedong forced them to self-criticism and prescribed proletarian re-education. He made them his cultural revolutionary sacrificial lambs. For their diplomatic service, he demanded that “Revolutionary changes must come. Otherwise, things will get very dangerous. We should start it in Vienna first.” (来一个革命化，否则很危险。可以先从维也纳做起).
On September 9, 1966, Mao ordered all Chinese embassies to clean up in a revolutionary way.
The Chairman’s note – later shortened to “Mao’s Directive of 9. September” – petrified China’s ambassadors around the world. Mao scribbled it on the evening of September 9, 1966, on a letter sent to him the same day by Foreign Minister Chen Yi.
The senders of the letter, which has rested in Beijing’s party archives for 55 years, were “comrades” from the group of the “Rote Fahne,” the mouthpiece of the Austrian Marxist-Leninists (MLÖ). At the time, they were one of the first pro-Maoist groups in Western Europe to support the Cultural Revolution. The Salon Revolutionists complained about the bourgeois lifestyle they had witnessed in the Chinese trade mission in Vienna (there was no embassy until after 1971). Beijing’s representatives, they complained, had betrayed the “progressive working class,” wearing the finest white silk shirts and expensive suits. “They can’t be distinguished from the Taiwanese chain dogs of Chiang Kai-shek and drive two Mercedes cars at once.” The Viennese population would “whisper and poke fun at it. It pains us to hear this (…) we emphatically demand that this bourgeois behavior be reported to the responsible parties and that measures be taken against it.”
Now Wolf warriors, once sacrificial lambs: Mao’s banner slogan for his cultural revolutionary campaign against China’s diplomats. “Revolutionary change must come. Otherwise, things get very dangerous.”
The letter comes in handy for Mao’s campaign
The letter of complaint was sent to the Beijing CC Institute for the Publication of the Works of Marx, Engels, Lenin and Stalin. It was translated, then forwarded to the Foreign Ministry, and then by Minister Chen to Mao.
The letter was of great convenience to the chairman, right after he had shaken the government bureaucracy he hated with his call to “bomb the headquarters” on August 5. Now he could pour further fuel onto the fire of his Cultural Revolution. “This criticism is very well written,” Mao praised the Austrians. “All our foreign missions must heed it.” The new campaign should, therefore, “start in Vienna first.”
The former Chinese ambassador to Vienna, Wang Shu, told me about it when I asked him if he also had unpleasant memories of his time in Austria: “Only indirectly,” he replied. Because of the letter from the MLÖ. Mao’s directive was not only directed against diplomats, but also affected journalists like him who were working abroad for the news agency Xinhua at the time. “We all had to criticize ourselves.”
I came across reprints of the letter and Mao’s directive in newspapers from the period of the Cultural Revolution. The letter from the MLÖ was received almost simultaneously with a letter of complaint sent on August 29, 1966, by an African Mao sympathizer from Tanzania to Beijing’s Foreign Ministry. He also denounced the “luxurious life” of diplomats at the Chinese embassy and enclosed photographs of the ambassador’s wife with his letter. At receptions, she wore a traditional Qipao silk dress. West German luxury cars were among the embassy’s fleet, and at receptions, only the most expensive delicacies, whiskey, cognac, and imported beer were served.
One day after Mao’s intervention on September 9, Foreign Minister Chen Yi called for an emergency meeting. Mao’s directive was sent to all of China’s missions in the world with the call, “Destroy the old. Build the new.” The shocked Viennese trade delegate and his representatives vowed immediate improvement: they telegraphed Beijing that they would no longer use their official cars, and would travel only second class by train. They offered to halve their daily expenses from 20 shillings at the time to 10 shillings.
Only cultural revolutionary photos and books about Mao
Diplomats worldwide pledged to revolutionize all their activities, including their private lives, to display only cultural revolutionary photos and books about Mao in embassies, and to remove Chinese antiques, porcelains or handicrafts. On September 24, Beijing cut pay for all diplomats. Ma Jisen, once a staff member in the Foreign Ministry’s Western Europe Department, wrote in her 2003 Hong Kong book “Cultural Revolutionary Events in the Foreign Ministry” (马继森, 外交部文革纪实) that one-third of all diplomatic service staff were ordered back to China at that time. They had to participate in the Cultural Revolution, face criticism and self-criticism.
It took half a year for Mao to shut down his angry campaign on February 7, 1967, so that the embassies could resume operations. China’s diplomats, however, were distraught and continued for a long time – as the foreign official Li Jiazhong recalls – to only wear Sun Yatsen suits (the famous Mao clothing) and walked around in shoes made of cloth instead of leather. The women trashed their qipao robes and only wore trousers or skirts.
Only years later, the Viennese MLÖ learned of the impact of their letter. As other European Maoist groups of the time, few critically examined why they had once glorified the Great Chairman and his cruel Cultural Revolution. China’s historiography of today also tends to ignore how dictator Mao humiliated his diplomats in a Cultural Revolutionary manner and made the crawl before him. Now a new generation of diplomats is to lecture the world of the superiority of Chinese socialism – and this time on Xi’s behalf as his wolf warriors.
Cultural Revolution
Diplomacy
Mao Zedong
Xi Jinping
Dessert
Despite peak focus, German table tennis star Dimitrij Ovtcharov narrowly lost his match in the semi-finals against Chinese Ma Long (3:4) on Thursday. Ma will meet his compatriot Fan Zhendong in the finals today. The women’s finals were also already an all-Chinese affair: Chen Meng won against Sun Yingsha 4:2. Former world-ranking leader Ovtcharov is still competing for bronze.
