The consumption and display of status symbols has long been one of the last great freedoms on China’s Internet. However, bragging about expensive bags, watches, cars, or makeup is increasingly a thorn in the side of the state, as Ning Wang reports. The central government propagates “common prosperity”. The excessive wealth of a minority is to be limited. Large lifestyle platforms such as Xiaohongshu declare that they want to take even more vigorous action against the online bragging rights of certain luxury influencers. This also affects Western luxury brands, which have been only too happy to exploit the immense reach of these online starlets.
The Covid pandemic hit many airlines hard. Countless connections had to be canceled due to the lockdowns. Photos of “aircraft graveyards” where hundreds of aircraft are stored made the rounds on social media. But while at least domestic traffic in China was flying normally, the cancelations are now piling up here, too. The reason is – of course – the zero-Covid policy. Add to that a weak yuan, high kerosene costs, and the mysterious crash in Guangxi, as Christian Domke-Seidel reports. The government is now putting together a new rescue package. If Germany saves Lufthansa, China will save its partly state-owned airlines even more so.
Displaying one’s wealth publicly on the Internet is becoming increasingly dangerous in China. The authorities complain that “this kind of activity seriously violates China’s social values and exposes misguided content to the public.” Well-known and widely used platforms such as Xiaohongshu (literally “Little Red Book”) and Douyin have already drawn consequences, banning certain online challenges, such as the one in which particularly well-heeled users set out to spend ¥1 million (the equivalent of €140,000) a day and then show off on social media what can be bought for it. The “creation of content that intentionally flaunts wealth, for example, by showing off luxurious houses, cars or goods without providing useful information, shall be punished,” according to a brief from the Xiaohongshu platform.
The reason, as so often in China, is due to a contradiction with the official party line. A display of extreme wealth no longer fits the redistribution logic of state and party leader Xi Jinping. Xi had announced last summer that “excessively high incomes” would be capped and entrepreneurs should give more back to society. When he announced the goal of “common prosperity” by 2049 (China.Table reported), a wave of sociopolitical change was unleashed. The prosperity celebrated in the large metropolises such as Beijing and Shanghai has long been a thorn in the side of the party leadership because it does not correspond to “Chinese-style socialism”. For years, cadres have been trained not to flaunt Rolex watches and expensive cars. Now the demand for “genuine socialism” is increasingly hitting the online world as well.
This makes the already strictly monitored Internet even more restrictive for China’s citizens. Violators face the threat of having their accounts deleted. And brands that work with influencers could also come under pressure, as a similar campaign against the entertainment industry recently showed (China.Table reported). Many of their business strategies are labeled as “immoral” by the government’s Anti-Protz campaign.
Even if much of what is shown on social networks is not real and the luxury it displays is often only a sham, there are still advertising deals and contracts between so-called “key opinion leaders” (KOLs) with enormous reach and major brands. For just one WeChat post, for example, a social media starlet from the B or C league can demand a five-digit yuan sum.
Measures to educate users show how serious Beijing is about the “socialist paths” that the government wants to follow by 2049. They are to be taught more moral values.
This is the subject of Zhang Yongjun of the Cyberspace Administration of China. He asks whether the display of prosperity by individual citizens shows justified pride in what has been achieved or whether it has long since turned into boasting. Zhang deliberately does not give an answer at first. However, the question alone is a pointer.
Influencers on China’s social media platforms are alarmed by previous campaigns. Memories of last year’s “purge” in the entertainment industry run too deep. Many of the once big names in film, fashion, entertainment like Angela Baby (Fang Binbin), Zhao Wei and even stars with foreign passports like Kris Wu, who grew up in Canada, have completely disappeared from the scene after accusations of tax evasion or other pretexts.
However, the fact that luxury can also become an expression of public dissent was recently demonstrated by images on social media during the Shanghai lockdown. Many residents chose shopping bags from the Hermes, Gucci, or Prada brands to place their daily Covid-19 tests at the apartment door for collection by the authorities. This, too, will have negatively struck party officials. Collaboration: Renxiu Zhao
While Western airlines like Lufthansa are heading for a recovery, China’s aviation industry is only now really slipping into crisis. The Communist Party’s strict zero-Covid strategy has led to a slump in the number of domestic flights. At the same time, international traffic has almost ground to a halt due to travel restrictions. Compared to January 2020, Chinese airlines’ international traffic has plummeted by 90 percent. An extensive rescue package is now intended to give the sector a boost again.
Emergency loans amounting to ¥150 billion (a good €20 billion) are now to help bridge the lean period. The state also wants to help the airlines place bonds worth ¥200 billion (€30 billion) on the market. This aid comes on top of subsidies that are already being paid out and will expire in just under two months. They are being used specifically to offset higher oil prices and Covid defaults.
The problems of the Chinese airline industry are not fundamentally new. While growth has been high since the reforms of the 1980s, it has also been very volatile. During the pandemic, providers – just like their international competitors – had severely curtailed traffic. Civil aviation accumulated losses equivalent to about $15.5 billion in 2020. In 2021, the figure was about $12 billion. The preliminary peak was April 2022, when the sector burned through $4.5 billion in one month.
The Chinese government’s strict zero-Covid strategy is only one reason for the crisis. Because the industry is still dependent on imports and the yuan has lost considerable value, urgently needed aircraft parts have become extremely expensive. And this at a time when supply chains are already interrupted. In addition, there have been massive increases in fuel costs, problems that China’s civil aviation authority, CAAC, is well aware of. Transport, logistics and production have suffered a “cliff-edge crash,” as the authority puts it. The industry has not managed to achieve the specified development targets.
But even these measures are hardly enough, believes Lin Zhijie of the specialist website Civil Aviation Resource Net of China (Carnoc). After all, airlines must continue to service existing loans and repay bonds. In addition, there is no recovery in sight in the short term. On the one hand, because of the zero-Covid policy, which also makes medium-term planning difficult. On the other hand, according to Lin, the confidence of many passengers has been shaken after a plane crash in March that killed 132 people. The crash may have been deliberately caused (China.Table reported).
In addition, there are initial problems with the payment of subsidies. These are linked to the number of domestic flights. If the number of flights by an airline falls below 4,500 per week, it can apply for subsidies. By comparison, Air China made exactly 15,436 flights per week in 2019. Just a week after the payments were introduced, however, the CAAC partially suspended the subsidies, Caixin magazine reported. The authority suspected airlines of deliberately canceling flights to benefit from the payments.
For the Chinese Communist Party, the aviation sector is a crucial industry of the future. By 2035, the number of airports is to increase from around 240 to 400 (China.Table reported). According to the current five-year plan, civil aviation capacity is to grow by 43 percent to two billion passengers per year. At the same time, the Comac C919 – the first large civil aircraft developed in China – is expected to rival international competition from Airbus and Boeing. Deliveries are scheduled to start before the end of 2022 (China.Table reported).
The airline industry’s umbrella organization, IATA, is registering only a very slow recovery in passenger volumes in the Asia-Pacific region: Everywhere else in the world, travelers have come back faster. Routes between North and South America have even made it back to pre-crisis levels. North Atlantic routes, for example, between Europe and the USA, have also climbed back to normal levels in the load factor index. On the intra-European routes, too, there will soon be as much going on as before the crisis.
Connections within the region between Asia-Pacific destinations bring up the rear with only 22 percent of the usual traffic on the IATA Connectivity Index. There are also shortcomings between Asia and Europe or North America. Load factors are only around one-third of 2019 levels. “Recovery differs significantly between Asia-Pacific and the rest of the world,” the association writes.
The reason for the Asia-Pacific air travel sag is, of course, the size of the Chinese market. “Any substantial recovery there will be hampered by stubborn travel restrictions.” China “remains virtually closed to international traffic.”
The worst hit by the flight crisis in China are, therefore, the providers with the most international connections. These are China Eastern, China Southern, and Air China. They have suffered from low passenger numbers throughout the pandemic, while the domestically oriented providers have at least enjoyed something like normal operations. It was not until the new wave of lockdowns from March that they, too, were plunged back into crisis.
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
As a student, Roman Kierst initially wanted to go to the USA. On his way to an interview for a student exchange program in the States, he saw a poster advertising a short exchange program to China. “That kind of appealed to me – and it was really cheap,” he recalls. At home, he told his stunned mother that he absolutely had to go to China now. And that’s how it all began: At 16, Kierst spent a month in Chengdu, the capital of Sichuan province.
“I can still remember the first evening in the host family. I first noticed the other, the supposedly foreign. And I think that’s also part of being human, you’re fixated on the other, you look for it.” However, in everyday life in the Chinese family and among his classmates, he quickly realized that things were not so strange, that they were actually all very similar.
“Of course, it looked different in Chengdu than at home in NRW. A different language was spoken, the city smelled different and felt different. But the fundamental experience, which I continued to have afterwards until today, is an experience of being together.” Kierst’s classmates in Chengdu had the same fears about the future, the same excitement about first crushes and first relationships. “When we played Counterstrike together, we got excited about the same things,” he says, laughing.
In the years that followed, Kierst traveled to China again and again, eventually studying Chinese studies in Berlin and London. One question ran like a thread through the years of study: What is it actually, the foreign? “There is no sum of objective characteristics that make up the foreign or the common – it has to do with our perception,” says Kierst. Today, he is particularly interested in how we can sharpen our perception of what we have in common.
After graduating, Kierst took a position at the Goethe-Institut in Beijing and, together with two colleagues, founded yì magazìn, which is financed with funds from the institute. “The magazine is an attempt to show similarities between China and Germany and to raise awareness of them.”
The articles on the website are lined up on large tiles with vivid images. Sometimes it’s about a Chinese writer talking about his childhood, sometimes about the nightlife of Beijing’s Wudaokou nightlife district. “We tell the small stories that have no place in the big press,” says Kierst, who is responsible for the German-language section and also writes articles himself. The big and the foreign are broken down to the personal, the close.
The 32-year-old has now been living and working in Beijing for four years – a return to Germany is not yet in sight. “Of course, the situation is not easy,” says Kierst. The zero-Covid policy is exhausting; his freedom of movement is restricted. He has not seen his family for two and a half years, he says. “Whenever there are particularly negative reports about China at the moment, my mother asks what I’m actually doing here.” But Kierst likes living here, has built close friendships – and brought his love of techno with him from Berlin. “People celebrate this kind of music here just as they do in Berlin.” Svenja Napp
The tension is rising – China’s national university entrance examination (Gao Kao) began on Tuesday. For many young Chinese, the exam is one of the most important events in their lives. In the picture, a student hugs her teacher before the exam begins.
The consumption and display of status symbols has long been one of the last great freedoms on China’s Internet. However, bragging about expensive bags, watches, cars, or makeup is increasingly a thorn in the side of the state, as Ning Wang reports. The central government propagates “common prosperity”. The excessive wealth of a minority is to be limited. Large lifestyle platforms such as Xiaohongshu declare that they want to take even more vigorous action against the online bragging rights of certain luxury influencers. This also affects Western luxury brands, which have been only too happy to exploit the immense reach of these online starlets.
The Covid pandemic hit many airlines hard. Countless connections had to be canceled due to the lockdowns. Photos of “aircraft graveyards” where hundreds of aircraft are stored made the rounds on social media. But while at least domestic traffic in China was flying normally, the cancelations are now piling up here, too. The reason is – of course – the zero-Covid policy. Add to that a weak yuan, high kerosene costs, and the mysterious crash in Guangxi, as Christian Domke-Seidel reports. The government is now putting together a new rescue package. If Germany saves Lufthansa, China will save its partly state-owned airlines even more so.
Displaying one’s wealth publicly on the Internet is becoming increasingly dangerous in China. The authorities complain that “this kind of activity seriously violates China’s social values and exposes misguided content to the public.” Well-known and widely used platforms such as Xiaohongshu (literally “Little Red Book”) and Douyin have already drawn consequences, banning certain online challenges, such as the one in which particularly well-heeled users set out to spend ¥1 million (the equivalent of €140,000) a day and then show off on social media what can be bought for it. The “creation of content that intentionally flaunts wealth, for example, by showing off luxurious houses, cars or goods without providing useful information, shall be punished,” according to a brief from the Xiaohongshu platform.
The reason, as so often in China, is due to a contradiction with the official party line. A display of extreme wealth no longer fits the redistribution logic of state and party leader Xi Jinping. Xi had announced last summer that “excessively high incomes” would be capped and entrepreneurs should give more back to society. When he announced the goal of “common prosperity” by 2049 (China.Table reported), a wave of sociopolitical change was unleashed. The prosperity celebrated in the large metropolises such as Beijing and Shanghai has long been a thorn in the side of the party leadership because it does not correspond to “Chinese-style socialism”. For years, cadres have been trained not to flaunt Rolex watches and expensive cars. Now the demand for “genuine socialism” is increasingly hitting the online world as well.
This makes the already strictly monitored Internet even more restrictive for China’s citizens. Violators face the threat of having their accounts deleted. And brands that work with influencers could also come under pressure, as a similar campaign against the entertainment industry recently showed (China.Table reported). Many of their business strategies are labeled as “immoral” by the government’s Anti-Protz campaign.
Even if much of what is shown on social networks is not real and the luxury it displays is often only a sham, there are still advertising deals and contracts between so-called “key opinion leaders” (KOLs) with enormous reach and major brands. For just one WeChat post, for example, a social media starlet from the B or C league can demand a five-digit yuan sum.
Measures to educate users show how serious Beijing is about the “socialist paths” that the government wants to follow by 2049. They are to be taught more moral values.
This is the subject of Zhang Yongjun of the Cyberspace Administration of China. He asks whether the display of prosperity by individual citizens shows justified pride in what has been achieved or whether it has long since turned into boasting. Zhang deliberately does not give an answer at first. However, the question alone is a pointer.
Influencers on China’s social media platforms are alarmed by previous campaigns. Memories of last year’s “purge” in the entertainment industry run too deep. Many of the once big names in film, fashion, entertainment like Angela Baby (Fang Binbin), Zhao Wei and even stars with foreign passports like Kris Wu, who grew up in Canada, have completely disappeared from the scene after accusations of tax evasion or other pretexts.
However, the fact that luxury can also become an expression of public dissent was recently demonstrated by images on social media during the Shanghai lockdown. Many residents chose shopping bags from the Hermes, Gucci, or Prada brands to place their daily Covid-19 tests at the apartment door for collection by the authorities. This, too, will have negatively struck party officials. Collaboration: Renxiu Zhao
While Western airlines like Lufthansa are heading for a recovery, China’s aviation industry is only now really slipping into crisis. The Communist Party’s strict zero-Covid strategy has led to a slump in the number of domestic flights. At the same time, international traffic has almost ground to a halt due to travel restrictions. Compared to January 2020, Chinese airlines’ international traffic has plummeted by 90 percent. An extensive rescue package is now intended to give the sector a boost again.
Emergency loans amounting to ¥150 billion (a good €20 billion) are now to help bridge the lean period. The state also wants to help the airlines place bonds worth ¥200 billion (€30 billion) on the market. This aid comes on top of subsidies that are already being paid out and will expire in just under two months. They are being used specifically to offset higher oil prices and Covid defaults.
The problems of the Chinese airline industry are not fundamentally new. While growth has been high since the reforms of the 1980s, it has also been very volatile. During the pandemic, providers – just like their international competitors – had severely curtailed traffic. Civil aviation accumulated losses equivalent to about $15.5 billion in 2020. In 2021, the figure was about $12 billion. The preliminary peak was April 2022, when the sector burned through $4.5 billion in one month.
The Chinese government’s strict zero-Covid strategy is only one reason for the crisis. Because the industry is still dependent on imports and the yuan has lost considerable value, urgently needed aircraft parts have become extremely expensive. And this at a time when supply chains are already interrupted. In addition, there have been massive increases in fuel costs, problems that China’s civil aviation authority, CAAC, is well aware of. Transport, logistics and production have suffered a “cliff-edge crash,” as the authority puts it. The industry has not managed to achieve the specified development targets.
But even these measures are hardly enough, believes Lin Zhijie of the specialist website Civil Aviation Resource Net of China (Carnoc). After all, airlines must continue to service existing loans and repay bonds. In addition, there is no recovery in sight in the short term. On the one hand, because of the zero-Covid policy, which also makes medium-term planning difficult. On the other hand, according to Lin, the confidence of many passengers has been shaken after a plane crash in March that killed 132 people. The crash may have been deliberately caused (China.Table reported).
In addition, there are initial problems with the payment of subsidies. These are linked to the number of domestic flights. If the number of flights by an airline falls below 4,500 per week, it can apply for subsidies. By comparison, Air China made exactly 15,436 flights per week in 2019. Just a week after the payments were introduced, however, the CAAC partially suspended the subsidies, Caixin magazine reported. The authority suspected airlines of deliberately canceling flights to benefit from the payments.
For the Chinese Communist Party, the aviation sector is a crucial industry of the future. By 2035, the number of airports is to increase from around 240 to 400 (China.Table reported). According to the current five-year plan, civil aviation capacity is to grow by 43 percent to two billion passengers per year. At the same time, the Comac C919 – the first large civil aircraft developed in China – is expected to rival international competition from Airbus and Boeing. Deliveries are scheduled to start before the end of 2022 (China.Table reported).
The airline industry’s umbrella organization, IATA, is registering only a very slow recovery in passenger volumes in the Asia-Pacific region: Everywhere else in the world, travelers have come back faster. Routes between North and South America have even made it back to pre-crisis levels. North Atlantic routes, for example, between Europe and the USA, have also climbed back to normal levels in the load factor index. On the intra-European routes, too, there will soon be as much going on as before the crisis.
Connections within the region between Asia-Pacific destinations bring up the rear with only 22 percent of the usual traffic on the IATA Connectivity Index. There are also shortcomings between Asia and Europe or North America. Load factors are only around one-third of 2019 levels. “Recovery differs significantly between Asia-Pacific and the rest of the world,” the association writes.
The reason for the Asia-Pacific air travel sag is, of course, the size of the Chinese market. “Any substantial recovery there will be hampered by stubborn travel restrictions.” China “remains virtually closed to international traffic.”
The worst hit by the flight crisis in China are, therefore, the providers with the most international connections. These are China Eastern, China Southern, and Air China. They have suffered from low passenger numbers throughout the pandemic, while the domestically oriented providers have at least enjoyed something like normal operations. It was not until the new wave of lockdowns from March that they, too, were plunged back into crisis.
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
As a student, Roman Kierst initially wanted to go to the USA. On his way to an interview for a student exchange program in the States, he saw a poster advertising a short exchange program to China. “That kind of appealed to me – and it was really cheap,” he recalls. At home, he told his stunned mother that he absolutely had to go to China now. And that’s how it all began: At 16, Kierst spent a month in Chengdu, the capital of Sichuan province.
“I can still remember the first evening in the host family. I first noticed the other, the supposedly foreign. And I think that’s also part of being human, you’re fixated on the other, you look for it.” However, in everyday life in the Chinese family and among his classmates, he quickly realized that things were not so strange, that they were actually all very similar.
“Of course, it looked different in Chengdu than at home in NRW. A different language was spoken, the city smelled different and felt different. But the fundamental experience, which I continued to have afterwards until today, is an experience of being together.” Kierst’s classmates in Chengdu had the same fears about the future, the same excitement about first crushes and first relationships. “When we played Counterstrike together, we got excited about the same things,” he says, laughing.
In the years that followed, Kierst traveled to China again and again, eventually studying Chinese studies in Berlin and London. One question ran like a thread through the years of study: What is it actually, the foreign? “There is no sum of objective characteristics that make up the foreign or the common – it has to do with our perception,” says Kierst. Today, he is particularly interested in how we can sharpen our perception of what we have in common.
After graduating, Kierst took a position at the Goethe-Institut in Beijing and, together with two colleagues, founded yì magazìn, which is financed with funds from the institute. “The magazine is an attempt to show similarities between China and Germany and to raise awareness of them.”
The articles on the website are lined up on large tiles with vivid images. Sometimes it’s about a Chinese writer talking about his childhood, sometimes about the nightlife of Beijing’s Wudaokou nightlife district. “We tell the small stories that have no place in the big press,” says Kierst, who is responsible for the German-language section and also writes articles himself. The big and the foreign are broken down to the personal, the close.
The 32-year-old has now been living and working in Beijing for four years – a return to Germany is not yet in sight. “Of course, the situation is not easy,” says Kierst. The zero-Covid policy is exhausting; his freedom of movement is restricted. He has not seen his family for two and a half years, he says. “Whenever there are particularly negative reports about China at the moment, my mother asks what I’m actually doing here.” But Kierst likes living here, has built close friendships – and brought his love of techno with him from Berlin. “People celebrate this kind of music here just as they do in Berlin.” Svenja Napp
The tension is rising – China’s national university entrance examination (Gao Kao) began on Tuesday. For many young Chinese, the exam is one of the most important events in their lives. In the picture, a student hugs her teacher before the exam begins.
