Price slump at Didi + News on Meng case

Dear reader,

When Chinese ride-hailing service Didi went public with its stock in New York a week ago, spirits were at an all-time high. But this didn’t last for long. Just two days later, Beijing launched a crackdown on the company. As investigations by our team in Beijing prove, China’s authorities did not entirely strike without warning and the aftermath is even felt at US stock markets.

Huawei’s chief financial officer Meng Wanzhou has been placed under house arrest in Canada in December 2018. It’s a volatile political case waiting to explode. Now a surprising turn of events is on the horizon, according to a report by Frank Sieren. The alleged victim HSBC appears to be cooperating with the accused Meng – and thus exonerating Meng. Whether this will also have an impact on the cases of Canadian citizens Michael Spavor and Michael Kovrig, who are currently being held in China, remains to be seen.

Meanwhile, the noose is tightening around Hong Kong’s media houses. After the forced closure of the Apple Daily, other publications within the financial metropolis, who uphold a critical stance on China now also have to for their future. The National Security Act dangles over editorial offices like a sword of Damocles, expresses Marcel Grzanna. According to rumors, even the tradition-rich South China Morning Post is considered to be turned into a cog in Beijing’s propaganda machine.

Lastly, I would like to draw your attention to today’s portrait. Felix Lee explains how China’s professional footballer Li Ying is currently making headlines – not with a spectacular goal, but with a very special declaration of love. To her girlfriend! And Beijing’s authorities do not seem too pleased about that.

I hope you have pleasant read and gain some fascinating new insights

Your
Michael Radunski

Crackdown on didi with severe consequences on Wall Street

Investors reacted in shock to China’s latest crackdown on its tech companies. Immediately after trading began in Hong Kong on Monday morning, almost all listed Chinese tech stocks went down. Later, the wave of disposal of Chinese securities continued on the New York Stock Exchange.

The collapse of stock prices was triggered by Beijing’s recent crackdown on three Chinese tech companies listed in the US. Beijing’s Cyberspace Administration (CAC) started by crashing down its hammer on ride-hailing service Didi Chuxing, which had just gone public with its stock last Wednesday (China.Table reported). Two days later, the agency announced it was investigating Didi in connection with violations of the National Security Law and the Cybersecurity Law. And what is the meaning of this? Further details were not provided.

Didi app forcibly removed

The real bombshell then burst on Sunday evening when regulatory authorities suddenly ordered the deletion of the Didi app from all Chinese app stores. An investigation claimed to have found “serious violations” in Didi’s collection and use of personal data. According to these claims, the company was required to resolve the issues first. Didi announced it was working to correct its app per regulatory requirements. However, no detailed explanation in what way this was connected with national security was provided. For investors, however, the damage was done: Didi’s shares lost more than nine percent in early trading in New York.

Things went not any better for Truck Alliance, a Chinese truck driving service broker, and the papers of the KanzhuGroup, the parent company of Chinese recruitment platform Boss Zhipin. Both companies were targeted by the CAC right after the crackdown Didi on Monday over the same vague allegations.

Non-transparency a major issue

Western investors are increasingly concerned about the severity with which Beijing has cracked down on its listed tech companies in recent months. The biggest complaint being the lack of transparency.

With detailed explanations from the authorities lacking, there is room for much speculation. In Didi’s case as well as with the other two punished companies, for example, rumors have it, that the issue may not have been with data security all along, but rather the governments discontent over the choice by these companies to pick New York over Hong Kong, Shanghai or Shenzhen for their IPOs.

As with last year’s abruptly canceled IPO of Ant Group, the financial arm of Chinese internet giant Alibaba, it’s hard to tell in Didi’s case whether Beijing actually seeks better regulation of the industry or the company was hit hard for a completely different reason. Ant’s IPO was also canceled just days after a critical speech by Alibaba founder Jack Ma, in which he came down hard on China’s financial regulators. Ma himself has hardly made any public appearances ever since.

Investors are holding back

But Didi itself is also facing critical questions from investors: Did the company accelerate its IPO specifically because it knew Beijing was breathing down the company’s neck? Signs of brewing trouble were hard to miss. After all, China’s Administration for Market Regulation (SAMR) had not only imposed a record fine on Alibaba but also put Didi on its radar: In April, the company was among 34 companies invited to a summit by SAMR and were threatened with “severe penalties” in case any rules were violated in the future.

In light of such events, Wall Street is becoming increasingly skeptical about Chinese technology stocks. The ongoing crackdown by Chinese regulators is likely to “continue to put pressure on the valuations of Chinese internet platforms”, believes Matthew Kanterman, an analyst at Bloomberg Intelligence. US investment company BlackRock also seems to have lost its appetite for Chinese tech stocks. “We’re going to stay away from big, dominant platforms for the time being,” announced Blackrock portfolio manager Lucy Liu. Gregor Koppenburg/Joern Petring

A turning point in the case of Huawei Meng?

By

Frank Sieren

When Meng Wanzhou, the daughter of Huawei company founder Ren Zhengfei, was arrested by Canadian authorities at the request of the US in Vancouver on December 1, 2018, then US President Donald Trump and his Chinese counterpart Xi Jinping were having a meeting in a cozy atmosphere on the sidelines of the G20 summit in Buenos Aires during a private dinner. But the relaxed appearance is deceiving.

US Courts accuse Meng of having “fraudulently” concealed the truth about Huawei’s relationship with a third company (Skycom) from the British HSBC bank in 2013, and thus failed to provide sufficient information about business relations with Iran. As a result, the bank had failed to adequately evaluate the risk. Moreover, Meng had only informed junior employees, not senior management. Huawei denies all of these claims.

Since transactions were conducted in US Dollars, US authorities claim to have intervened, although in this case, the protagonists are a Chinese and a British-Hong Kong bank. This is also one of the reasons why China wants to build its own world currency and numerous third countries are showing interest In addition, Americans had banned all business with Iran. A ban, however, that Trump had imposed on the world. Among others, Europe, Russia and China consider the sanctions wrong, as does Trump’s predecessor Barack Obama. He had lifted sanctions against Iran in 2016 after the country had assured that it would no longer enrich uranium. In 2018, Trump would no longer have any of it, although Iran had fulfilled all its conditions of the deal with Obama and even the International Atomic Energy Agency (IAEA) certified Iran’s compliance with the agreement. Moreover, Iran wanted to negotiate further concessions at the time. “Iran is lying”, Donald Trump claimed – without providing any evidence. All companies worldwide that continued their business relations with Iran would be punished accordingly.

At the same time, Trump did not try to hide the fact that Meng is a political pawn in the power struggle between the US and China. “If I’m convinced that it’s in the countries best interest, good for the greatest trade deal ever and good for national security, I would certainly intervene.”

HSBC now cooperating with Huawei

Under the Trump administration, HSBC Bank apparently felt compelled to cooperate with the US against Huawei. This pressure apparently no longer exists. On April 12, Meng’s lawyers informed a Hong Kong court that both parties had come to an agreement and withdrew their lawsuit over the disclosure of internal documents. The bank is now providing information to Meng’s lawyers. This is very unusual: a person accused of “fraud” gets evidence from the “victim” that exonerates the accused.

Documents show that neither the bank’s key managers were unaware about the actual relationship between Huawei and Skycom, nor was their information solely based on Huawei’s PowerPoint presentation, as US Courts had claimed as main evidence. “These HSBC documents demonstrate the false and misleading nature of the US extradition request, which the Canadian courts should not rely on,” a Huawei Canada spokesperson commented, via China.Table.

The responsible HSBC employee is said to have signed several risk analyses, showing that connections were known and nothing was concealed. The person in question allegedly was managing director and deputy head of global banking China, and Huawei was “trying to comply with all sanctions regulations,” the manager state. He was “quite reassured.” Moreover, the defense claims to be able to prove that US authorities were aware that the allegations formulated in the extradition request against Meng were false. Even the PowerPoint presentation was incomplete and distorted, although a complete version was accessible. The accusation against US Courts: Facts were suppressed.

No final verdict yet

But it’s still a long way to go before a US court determines Meng’s and Huawei’s guilt or innocence because, at this stage of the proceedings, the defense only needs to prove that the Canadian court must reject the flawed extradition request. The hurdle, however, is high. Under Canadian law, the request must be “manifestly unreliable,” not just “probably unreliable.” Judge Heather Holmes is expected to decide on the matter during the course of the week.

Confidence of the defense is high, as Holmes had repeatedly stated doubts about the validity of the accusations made by U.S. Authorities as well as the regularity of the proceedings.

In October 2020, she ruled that Meng’s lawyers could present arguments and evidence. The judge also allowed an inquiry into whether Meng’s substantial rights were violated during her arrest at the Vancouver airport. According to the defense, she was interrogated without having the opportunity to consult a lawyer. In addition, electronic devices were confiscated. The defense suspects that the Canadian border police had overstepped their legal powers to provide the US authorities with information for the trial. This was firmly denied by the Canadian authorities.

“We are convinced of our innocence,” says Huawei founder Ren Zhengfei. “If a court were to punish us after passing judgment, we would be able to accept it, because we respect legal procedures. But the US plays by its own rules. I don’t know how what to make of that. “The fate of Canadian citizens, Michel Kovrig and Michael Spavor also depends on the outcome of the lawsuit. They were arrested in China immediately after Meng’s incarceration and are since been being held in a Chinese prison without proper trial.

Canadian lawyers back up Meng

Independent Canadian court observers such as lawyer Richard Kurland, one of Canada’s most renowned immigration lawyers and editor-in-chief of “Lexbase Immigration”, spoke a couple of months ago about US extradition requests being like a “Swiss cheese”: full of holes.

Gary Botting, one of Canada’s leading extradition defenders and a former journalist for the Hong Kong newspaper South China Morning Post, is also firmly convinced that the entire crackdown on Huawei’s chief financial officer was politically motivated. “Huawei was and is a political target. Ms. Meng’s arrest put a knife in Huawei’s gut when it was on its way to offer Huawei’s 5G technology in Mexico. The way I see it, the United States has quite blatantly enlisted the help of Canada to thwart any attempt by Huawei to develop and expand its technology in North America. This is an example of US hegemony on a grand scale.” Botting is nonetheless considered a critic of China. In 1989, Botting represented the first dozen Chinese dissidents who sought asylum in Canada after fleeing Beijing shortly after the bloody crackdown on the protest movement.

A sword of Damocles over Hong Kong’s media

By

Marcel Grzanna

Hong Kong authorities have made clear in recent months that they are using the National Security Act to silence any voices of opposition within the city. This includes media outlets that criticize Beijing’s increasing control or doubt the legitimacy of Hong Kong’s judicial system. The tightened legal environment has already been the undoing of the Apple Daily newspaper. Arrests and government crackdowns have ensured that the paper was published for the last time at the end of June after 26 years.

The security law also hangs over the renowned English-language newspaper South China Morning Post like a sword of Damocles. The newspaper might already have lost some of its grit since it was taken over by the Alibaba Group, founded by Jack Ma, in 2015. Yet it is still an institution that, for the last 117 years, has accompanied Hong Kong’s rise as a liberal business metropolis and its transformation into an increasingly authoritarian outpost of Beijing. Mostly critical, thorough and often investigative.

But it is unlikely that things will end as dramatically for the Post as they did for Apple Daily. The paper’s history, and its international reputation, make it an interesting tool for the Chinese government’s propaganda. Instead of shutting it down, it is in Beijing’s interest to ensure the paper’s continued existence, but not to increase its influence over its content in return. The paper has already changed since its acquisition by Alibaba for nearly $270 million. Pro-Chinese voices have increasingly crept between the critical reporting, defending Beijing’s policies instead of – as was previously the case – assessing them with journalistic suspicion.

As a result, its former columnist Stephen Vines had already decided in 2018 to stop writing for the paper. Under Jack Ma, he said, the Post had decided to “more than willingly engage in the propaganda efforts of the Chinese state.” Vines referred to a supposedly independent interview with Swedish publisher Gui Minhai, who had published books criticizing China in Hong Kong. After his deportation to the People’s Republic, Gui had been forced to make a public confession on state television. He then donned his penitent shirt once again for the Post interview, stressing the legality of his arrest by Chinese authorities.

Only a “guise of independence” left

For Vines, this was a clear sign that the newspaper had lost its independence. There was only a “semblance of independence left, but it is seriously undermined by a willingness to serve the worst aspects of the Chinese propaganda machine,” he said. At the same time, the new CEO Gary Liu had announced at the time of the takeover by Alibaba that they would “certainly not represent Beijing’s views and wishes”.

But in the last year, it became clear that the newspaper had become a lapdog to the Alibaba Empire. As Chinese media reported, the company was targeted by regulators and its founder, Jack Ma, was placed under government surveillance after expressing critical comments about China’s financial sector. He disappeared from the public eye for months and has since refrained from making any form of political statements. In this delicate environment for one of the world’s largest internet companies, it safe to assume that the Post is no longer able to operate completely independently.

Not least because the security law, which was signed into law in July 2020, poses an incalculable risk to critical media. Editors and publishers of the Apple Daily are under arrest because the paper called for international sanctions against the city in dozens of columns. The public television network RTHK regularly under fire for presenting pro-democracy positions. Staff members have been fired, and a few days ago it was announced that The Pulse, a news program voicing critical opinions on China, would be shut down. The show was hosted by the very Stephen Vines who left the South China Morning Post in 2018. Meanwhile, the pro-democracy online portal Stand News announced it was deleting opinion pieces and columns from the past few months. – out of fear of possible prosecution. Stand News also stated it would no longer accept donations in order to avoid suspicion of being financed from abroad. It would be easy for the authorities to interpret this as a violation of the security law.

The fear of antagonizing the authorities is also felt by Tom Grundy, founder of crowdfunding news portal Hong Kong Free Press (HKFP) “We haven’t decided on how to proceed,” Grundy told China.Table. In a public statement, the editorial board had only noted the difficult conditions and pledged to continue reporting. “We cannot predict whether there will be enough breathing room to continue normal journalistic work,” they said.

Lam an “enemy of press freedom”

For this reason, the human rights organization Reporters Without Borders included Hong Kong’s head of government Carrie Lam for the first time on its list of the world’s biggest “enemies of press freedom”, published on Monday, who “embodies the ruthless suppression of press freedom in a particularly drastic way“. China’s leader Xi Jinping is an old acquaintance on this list among 37 political figures.

Observers doubt whether the South China Morning Post can manage the balancing act between its efforts to remain independent and the constraints of having to serve as a platform for Chinese propaganda. Especially since rumours persist that the company could be sold to another Chinese investor. In March, CEO Liu had stressed that there was no reason to worry. But now that Alibaba’s activities in the financial sector have already caught the eye of Chinese regulators, the group’s numerous media holdings could also be placed under tighter control.

“The idea that the Post could be sold at a time when Beijing is talking about the need for ‘patriots’ to run media companies is very, very worrying,” says Keith Richburg, president of Foreign Correspondents’ Club Hong Kong. A few months ago Beijing had issued the slogan “Patriots for Hong Kong” to ensure that key positions in the city’s politics, administration, judiciary and business would only be filled in line with the Chinese government‘s guidelines. The aim is to build public consensus on the urgency of tightening legislation.

The National Security Law had been imposed on the city last year by the Standing Committee of the National People’s Congress in Beijing. It was a response to mass protests in Hong Kong that began in 2019 and were directed against the city’s loss of contractually guaranteed democratic civil rights.

Congestion of container ships continues

The Kiel Institute for the World Economy (IfW) predicts a massive obstruction of the global flow of goods. It blames a “traffic jam” of container ship traffic in southern China as the culprit.” The number of waiting container ships in China’s Pearl River Delta is unusually high. Individual ports such as Yantian have shipped less than half their usual container volume,” as the Kiel Institute for the World Economy reported on Monday. “Currently, almost five percent of all container ship capacity is already stuck at Chinese ports. This is more than in the first Covid wave.” The congestion has also led to “currently ten percent fewer container ship traffic than expected” in the Red Sea between North Africa and the Arabian Peninsula, according to the IfW.

The traffic jam was triggered by Covid infections among port employees. The congestion in the Chinese port of Yantian is now considered a more serious problem than the congestion at the end of March on the Suez Canal caused by the accident involving the container freighter “Ever Given”.

Most recently, Maersk, the world’s largest container shipping company, had told its customers that the congestion at Yantian was beginning to ease up. Nevertheless, Maersk warns that there could be”a downward spiral for neighboring ports” if one port is affected. niw

Merkel and Macron in talks with Xi

German Chancellor Angela Merkel and French President Emmanuel Macron spoke on the phone with Chinese President Xi Jinping on Monday. According to a government spokesperson in Berlin, they discussed relations between the European Union and China as well as topics on international trade, climate protection and biodiversity Merkel and Macron supposedly advocated further adjustments to short-term CO2 reduction goals and additional joint efforts to protect biodiversity at the 15th Conference of the Parties on Biological Diversity planned for October in Kunming, China.

“The conversation also revolved around cooperation in the fight against the Covid 19 pandemic, global vaccine supply and international and regional issues,” according to a statement by government spokesman Steffen Seibert. No further details were given.

According to the state news agency Xinhua, Xi promoted the Belt and Road Initiative as an “opportunity” to Macron and Merkel. He also proposed closer cooperation between China, France, Germany and African countries to jointly develop projects in Africa. In addition, “mutual support in the successful hosting of the Beijing Winter Olympics and the Paris Summer Olympics” was stressed, the Xinhua report added. According to the report, Merkel and Macron advocated the realization of the EU-China Investment Agreement (CAI) in a timely manner. The agreement is currently on hold. ari

Car sales decrease sharply in June

Sales of cars and commercial vehicles declined significantly in June, according to data by the China Association of Automobile Manufacturers (CAAM). According to preliminary calculations, 16.3 percent fewer cars were sold compared to the same period last year. Sales had already fallen by 9.5 percent in the previous month of May, the CAAM said in Beijing on Monday. Prior to that, China’s automobile market posted 13 consecutive months of gains since April 2020.

Overall, however, carmakers in China report a strong increase in sales for the first half of the year. According to CAAM between January and June, sales rose by 24.8 percent to 12.8 million vehicles compared to the same period last year. Especially in the first three months of 2020, the Covid pandemic had virtually paralyzed the Chinese car market. niw

Report: EU foreign ministers to push for more connectivity

According to media reports, the EU’s foreign ministers plan to call for faster progress on the European “connectivity initiative” next week. Its intent is to counter China’s “New Silk Road”. A so-called conclusion of the Council of EU Foreign Ministers next Monday will call for a “geostrategic approach to connectivity.” A target for “globally visible high-impact projects and actions” is also to be set, the Financial Times reported on Monday, citing EU sources. According to the report, the conclusion also suggests a joint push by EU capitals with national development banks, the European Investment Bank and the European Bank for Reconstruction and Development to provide funding for projects. These should also be included in the EU’s multi-year financial framework from 2021 to 2027, the newspaper quotes from the draft conclusion.

The fact that the EU’s efforts are directed against China’s Belt and Road Initiative (BRI) is reportedly not explicitly mentioned in the text. Instead, it advocates the global expansion of European connectivity. EU foreign ministers will meet in the Belgian capital next Monday. Brussels is currently looking for ways to build an alternative to China’s BRI and other infrastructure projects, especially in Eastern and Central Europe, but also third countries in Central Asia and Africa. However, specific steps in this direction have yet to be taken.

As early as mid-June, at the G7 summit in the UK, the seven leading industrialized nations had spoken out in favor of countering the BRI with an infrastructure initiative of their own. The initiative, called “Build Back Better World” (3BW), is intended to mobilize hundreds of billions of dollars in public and private funds for investment in developing countries, according to US sources. ari

Hisense receives TÜV certification

Hisense Smart TV has been certified for data protection by TÜV Rheinland for the first time. The Hisense platform smart TV VIDAA 72671 has been awarded for product cybersecurity and privacy standard certification. This makes Hisense the first TV brand in the world to receive this award.

The certificate originates from the “ETSI EN 303 645” standard published in June 2020 by the European Telecommunications Standards Institute, which aims to regulate basic cybersecurity requirements for consumer IoT products, such as privacy protection and prevention of network attacks such as DDoS attacks. It forms the foundation, upon which the technical and organizational measures to combat cybersecurity deficiencies and protect against network attacks are evaluated.

“The European market has always been an important part of Hisense’s internationalization strategy. However, with Germany as a key market, Hisense also puts a focus on the development of other Western European markets such as Spain, Italy, the UK and France. In order to reduce risks for the consumers, Hisense strictly adheres to the requirements of the DSGVO and is in close contact with TÜV Rheinland,” according to a statement by the electronics group from Qingdao. bw

Li Ying – China’s first female footballer is outing herself

Spitzenfußballerin Li Ying bei der Frauen WM 2019 in Südafrika freut sich über ihren Sieg — Top footballer Li Ying at the 2019 Women’s World Cup in South Africa is delighted with her victory

It was a post like it is found millions of times a day on Chinese social media: “You are the source and target of all my tenderness,” wrote a 28-year-old. But there two reasons why her tweet on Sina Weibo, the Chinese equivalent to Twitter, is special in socio-political terms. The author is the well-known national football player Li Ying. And the declaration of love is for her friend, the influencer Chen Leilei.

Attached to the post are two pictures. One shows them gazing into each other’s eyes in affection. The other shows a cake with a glowing candle. It symbolizes their one-year relationship anniversary. It is the first time that a Chinese top athlete comes out and announces her homosexual partnership in public.

Li Ying has been one of the most popular players on the Chinese women’s football team for years. Born and raised in a village near the southwestern Chinese metropolis of Chongqing, she started playing in the women’s professional league at the age of 19, first with team Xizi Hangzhou, and since 2015 for the Shangdong Ladies. The striker has already appeared in 116 international matches. And unlike Chinese men’s football, the women have enjoyed real international success. They made it to the round of 16 at the 2019 Women’s World Cup, and finished third at the Asian Cup a year earlier. In both tournaments, Li Ying scored the most goals for her country. In January, she became the first female footballer in China to be awarded the “Asian Team of the Decade”, an award given by the International Federation of Football History and Statistics (IFFHS).

Officially, same-sex love has been decriminalized in China since 1997. Since 2001, homosexuality is no longer on the list of mental illnesses. According to surveys in metropolitan areas, a majority also has nothing against gays and lesbians – as long as no one in their own family is homosexual. As a result, most homosexuals keep their sexual orientation to themselves. Over 90 percent of middle-aged lesbians and gays are reportedly living in heterosexual marriages. In recent years, however, significantly more celebrities have come out about their homosexuality than it was the case ten or 15 years ago, especially among internet stars and influencers.

Li Ying’s post about her outing immediately went viral on social media. While many comments supported her move, there were also cautionary voices. “I wish her the best … but I hope it won’t affect her career in any way,” wrote one Weibo user. Prominent soccer commentator and blogger Zhao Zhen, who has more than five million followers on Weibo, noted, “Homosexuality in women’s soccer is no longer a secret.” However, Li Ying is the first to be brave enough to make her sexual orientation and girlfriend public as well, he said. She deserves a lot of respect.

Nevertheless, Li Ying’s post was deleted only a few hours after it was published. Some users speculate that Li was pressured by the authorities. Felix Lee

To improve weather forecasts in China, China’s National Space Administration (CNSA) sent a “Long March” type of rocket into space on Monday. In its hold: the Fengyun-3E (FY-3E) satellite. It will also collect data for global climate research.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Dear reader,

When Chinese ride-hailing service Didi went public with its stock in New York a week ago, spirits were at an all-time high. But this didn’t last for long. Just two days later, Beijing launched a crackdown on the company. As investigations by our team in Beijing prove, China’s authorities did not entirely strike without warning and the aftermath is even felt at US stock markets.

Huawei’s chief financial officer Meng Wanzhou has been placed under house arrest in Canada in December 2018. It’s a volatile political case waiting to explode. Now a surprising turn of events is on the horizon, according to a report by Frank Sieren. The alleged victim HSBC appears to be cooperating with the accused Meng – and thus exonerating Meng. Whether this will also have an impact on the cases of Canadian citizens Michael Spavor and Michael Kovrig, who are currently being held in China, remains to be seen.

Meanwhile, the noose is tightening around Hong Kong’s media houses. After the forced closure of the Apple Daily, other publications within the financial metropolis, who uphold a critical stance on China now also have to for their future. The National Security Act dangles over editorial offices like a sword of Damocles, expresses Marcel Grzanna. According to rumors, even the tradition-rich South China Morning Post is considered to be turned into a cog in Beijing’s propaganda machine.

Lastly, I would like to draw your attention to today’s portrait. Felix Lee explains how China’s professional footballer Li Ying is currently making headlines – not with a spectacular goal, but with a very special declaration of love. To her girlfriend! And Beijing’s authorities do not seem too pleased about that.

I hope you have pleasant read and gain some fascinating new insights

Your
Michael Radunski

Crackdown on didi with severe consequences on Wall Street

Investors reacted in shock to China’s latest crackdown on its tech companies. Immediately after trading began in Hong Kong on Monday morning, almost all listed Chinese tech stocks went down. Later, the wave of disposal of Chinese securities continued on the New York Stock Exchange.

The collapse of stock prices was triggered by Beijing’s recent crackdown on three Chinese tech companies listed in the US. Beijing’s Cyberspace Administration (CAC) started by crashing down its hammer on ride-hailing service Didi Chuxing, which had just gone public with its stock last Wednesday (China.Table reported). Two days later, the agency announced it was investigating Didi in connection with violations of the National Security Law and the Cybersecurity Law. And what is the meaning of this? Further details were not provided.

Didi app forcibly removed

The real bombshell then burst on Sunday evening when regulatory authorities suddenly ordered the deletion of the Didi app from all Chinese app stores. An investigation claimed to have found “serious violations” in Didi’s collection and use of personal data. According to these claims, the company was required to resolve the issues first. Didi announced it was working to correct its app per regulatory requirements. However, no detailed explanation in what way this was connected with national security was provided. For investors, however, the damage was done: Didi’s shares lost more than nine percent in early trading in New York.

Things went not any better for Truck Alliance, a Chinese truck driving service broker, and the papers of the KanzhuGroup, the parent company of Chinese recruitment platform Boss Zhipin. Both companies were targeted by the CAC right after the crackdown Didi on Monday over the same vague allegations.

Non-transparency a major issue

Western investors are increasingly concerned about the severity with which Beijing has cracked down on its listed tech companies in recent months. The biggest complaint being the lack of transparency.

With detailed explanations from the authorities lacking, there is room for much speculation. In Didi’s case as well as with the other two punished companies, for example, rumors have it, that the issue may not have been with data security all along, but rather the governments discontent over the choice by these companies to pick New York over Hong Kong, Shanghai or Shenzhen for their IPOs.

As with last year’s abruptly canceled IPO of Ant Group, the financial arm of Chinese internet giant Alibaba, it’s hard to tell in Didi’s case whether Beijing actually seeks better regulation of the industry or the company was hit hard for a completely different reason. Ant’s IPO was also canceled just days after a critical speech by Alibaba founder Jack Ma, in which he came down hard on China’s financial regulators. Ma himself has hardly made any public appearances ever since.

Investors are holding back

But Didi itself is also facing critical questions from investors: Did the company accelerate its IPO specifically because it knew Beijing was breathing down the company’s neck? Signs of brewing trouble were hard to miss. After all, China’s Administration for Market Regulation (SAMR) had not only imposed a record fine on Alibaba but also put Didi on its radar: In April, the company was among 34 companies invited to a summit by SAMR and were threatened with “severe penalties” in case any rules were violated in the future.

In light of such events, Wall Street is becoming increasingly skeptical about Chinese technology stocks. The ongoing crackdown by Chinese regulators is likely to “continue to put pressure on the valuations of Chinese internet platforms”, believes Matthew Kanterman, an analyst at Bloomberg Intelligence. US investment company BlackRock also seems to have lost its appetite for Chinese tech stocks. “We’re going to stay away from big, dominant platforms for the time being,” announced Blackrock portfolio manager Lucy Liu. Gregor Koppenburg/Joern Petring

A turning point in the case of Huawei Meng?

By

Frank Sieren

When Meng Wanzhou, the daughter of Huawei company founder Ren Zhengfei, was arrested by Canadian authorities at the request of the US in Vancouver on December 1, 2018, then US President Donald Trump and his Chinese counterpart Xi Jinping were having a meeting in a cozy atmosphere on the sidelines of the G20 summit in Buenos Aires during a private dinner. But the relaxed appearance is deceiving.

US Courts accuse Meng of having “fraudulently” concealed the truth about Huawei’s relationship with a third company (Skycom) from the British HSBC bank in 2013, and thus failed to provide sufficient information about business relations with Iran. As a result, the bank had failed to adequately evaluate the risk. Moreover, Meng had only informed junior employees, not senior management. Huawei denies all of these claims.

Since transactions were conducted in US Dollars, US authorities claim to have intervened, although in this case, the protagonists are a Chinese and a British-Hong Kong bank. This is also one of the reasons why China wants to build its own world currency and numerous third countries are showing interest In addition, Americans had banned all business with Iran. A ban, however, that Trump had imposed on the world. Among others, Europe, Russia and China consider the sanctions wrong, as does Trump’s predecessor Barack Obama. He had lifted sanctions against Iran in 2016 after the country had assured that it would no longer enrich uranium. In 2018, Trump would no longer have any of it, although Iran had fulfilled all its conditions of the deal with Obama and even the International Atomic Energy Agency (IAEA) certified Iran’s compliance with the agreement. Moreover, Iran wanted to negotiate further concessions at the time. “Iran is lying”, Donald Trump claimed – without providing any evidence. All companies worldwide that continued their business relations with Iran would be punished accordingly.

At the same time, Trump did not try to hide the fact that Meng is a political pawn in the power struggle between the US and China. “If I’m convinced that it’s in the countries best interest, good for the greatest trade deal ever and good for national security, I would certainly intervene.”

HSBC now cooperating with Huawei

Under the Trump administration, HSBC Bank apparently felt compelled to cooperate with the US against Huawei. This pressure apparently no longer exists. On April 12, Meng’s lawyers informed a Hong Kong court that both parties had come to an agreement and withdrew their lawsuit over the disclosure of internal documents. The bank is now providing information to Meng’s lawyers. This is very unusual: a person accused of “fraud” gets evidence from the “victim” that exonerates the accused.

Documents show that neither the bank’s key managers were unaware about the actual relationship between Huawei and Skycom, nor was their information solely based on Huawei’s PowerPoint presentation, as US Courts had claimed as main evidence. “These HSBC documents demonstrate the false and misleading nature of the US extradition request, which the Canadian courts should not rely on,” a Huawei Canada spokesperson commented, via China.Table.

The responsible HSBC employee is said to have signed several risk analyses, showing that connections were known and nothing was concealed. The person in question allegedly was managing director and deputy head of global banking China, and Huawei was “trying to comply with all sanctions regulations,” the manager state. He was “quite reassured.” Moreover, the defense claims to be able to prove that US authorities were aware that the allegations formulated in the extradition request against Meng were false. Even the PowerPoint presentation was incomplete and distorted, although a complete version was accessible. The accusation against US Courts: Facts were suppressed.

No final verdict yet

But it’s still a long way to go before a US court determines Meng’s and Huawei’s guilt or innocence because, at this stage of the proceedings, the defense only needs to prove that the Canadian court must reject the flawed extradition request. The hurdle, however, is high. Under Canadian law, the request must be “manifestly unreliable,” not just “probably unreliable.” Judge Heather Holmes is expected to decide on the matter during the course of the week.

Confidence of the defense is high, as Holmes had repeatedly stated doubts about the validity of the accusations made by U.S. Authorities as well as the regularity of the proceedings.

In October 2020, she ruled that Meng’s lawyers could present arguments and evidence. The judge also allowed an inquiry into whether Meng’s substantial rights were violated during her arrest at the Vancouver airport. According to the defense, she was interrogated without having the opportunity to consult a lawyer. In addition, electronic devices were confiscated. The defense suspects that the Canadian border police had overstepped their legal powers to provide the US authorities with information for the trial. This was firmly denied by the Canadian authorities.

“We are convinced of our innocence,” says Huawei founder Ren Zhengfei. “If a court were to punish us after passing judgment, we would be able to accept it, because we respect legal procedures. But the US plays by its own rules. I don’t know how what to make of that. “The fate of Canadian citizens, Michel Kovrig and Michael Spavor also depends on the outcome of the lawsuit. They were arrested in China immediately after Meng’s incarceration and are since been being held in a Chinese prison without proper trial.

Canadian lawyers back up Meng

Independent Canadian court observers such as lawyer Richard Kurland, one of Canada’s most renowned immigration lawyers and editor-in-chief of “Lexbase Immigration”, spoke a couple of months ago about US extradition requests being like a “Swiss cheese”: full of holes.

Gary Botting, one of Canada’s leading extradition defenders and a former journalist for the Hong Kong newspaper South China Morning Post, is also firmly convinced that the entire crackdown on Huawei’s chief financial officer was politically motivated. “Huawei was and is a political target. Ms. Meng’s arrest put a knife in Huawei’s gut when it was on its way to offer Huawei’s 5G technology in Mexico. The way I see it, the United States has quite blatantly enlisted the help of Canada to thwart any attempt by Huawei to develop and expand its technology in North America. This is an example of US hegemony on a grand scale.” Botting is nonetheless considered a critic of China. In 1989, Botting represented the first dozen Chinese dissidents who sought asylum in Canada after fleeing Beijing shortly after the bloody crackdown on the protest movement.

A sword of Damocles over Hong Kong’s media

By

Marcel Grzanna

Hong Kong authorities have made clear in recent months that they are using the National Security Act to silence any voices of opposition within the city. This includes media outlets that criticize Beijing’s increasing control or doubt the legitimacy of Hong Kong’s judicial system. The tightened legal environment has already been the undoing of the Apple Daily newspaper. Arrests and government crackdowns have ensured that the paper was published for the last time at the end of June after 26 years.

The security law also hangs over the renowned English-language newspaper South China Morning Post like a sword of Damocles. The newspaper might already have lost some of its grit since it was taken over by the Alibaba Group, founded by Jack Ma, in 2015. Yet it is still an institution that, for the last 117 years, has accompanied Hong Kong’s rise as a liberal business metropolis and its transformation into an increasingly authoritarian outpost of Beijing. Mostly critical, thorough and often investigative.

But it is unlikely that things will end as dramatically for the Post as they did for Apple Daily. The paper’s history, and its international reputation, make it an interesting tool for the Chinese government’s propaganda. Instead of shutting it down, it is in Beijing’s interest to ensure the paper’s continued existence, but not to increase its influence over its content in return. The paper has already changed since its acquisition by Alibaba for nearly $270 million. Pro-Chinese voices have increasingly crept between the critical reporting, defending Beijing’s policies instead of – as was previously the case – assessing them with journalistic suspicion.

As a result, its former columnist Stephen Vines had already decided in 2018 to stop writing for the paper. Under Jack Ma, he said, the Post had decided to “more than willingly engage in the propaganda efforts of the Chinese state.” Vines referred to a supposedly independent interview with Swedish publisher Gui Minhai, who had published books criticizing China in Hong Kong. After his deportation to the People’s Republic, Gui had been forced to make a public confession on state television. He then donned his penitent shirt once again for the Post interview, stressing the legality of his arrest by Chinese authorities.

Only a “guise of independence” left

For Vines, this was a clear sign that the newspaper had lost its independence. There was only a “semblance of independence left, but it is seriously undermined by a willingness to serve the worst aspects of the Chinese propaganda machine,” he said. At the same time, the new CEO Gary Liu had announced at the time of the takeover by Alibaba that they would “certainly not represent Beijing’s views and wishes”.

But in the last year, it became clear that the newspaper had become a lapdog to the Alibaba Empire. As Chinese media reported, the company was targeted by regulators and its founder, Jack Ma, was placed under government surveillance after expressing critical comments about China’s financial sector. He disappeared from the public eye for months and has since refrained from making any form of political statements. In this delicate environment for one of the world’s largest internet companies, it safe to assume that the Post is no longer able to operate completely independently.

Not least because the security law, which was signed into law in July 2020, poses an incalculable risk to critical media. Editors and publishers of the Apple Daily are under arrest because the paper called for international sanctions against the city in dozens of columns. The public television network RTHK regularly under fire for presenting pro-democracy positions. Staff members have been fired, and a few days ago it was announced that The Pulse, a news program voicing critical opinions on China, would be shut down. The show was hosted by the very Stephen Vines who left the South China Morning Post in 2018. Meanwhile, the pro-democracy online portal Stand News announced it was deleting opinion pieces and columns from the past few months. – out of fear of possible prosecution. Stand News also stated it would no longer accept donations in order to avoid suspicion of being financed from abroad. It would be easy for the authorities to interpret this as a violation of the security law.

The fear of antagonizing the authorities is also felt by Tom Grundy, founder of crowdfunding news portal Hong Kong Free Press (HKFP) “We haven’t decided on how to proceed,” Grundy told China.Table. In a public statement, the editorial board had only noted the difficult conditions and pledged to continue reporting. “We cannot predict whether there will be enough breathing room to continue normal journalistic work,” they said.

Lam an “enemy of press freedom”

For this reason, the human rights organization Reporters Without Borders included Hong Kong’s head of government Carrie Lam for the first time on its list of the world’s biggest “enemies of press freedom”, published on Monday, who “embodies the ruthless suppression of press freedom in a particularly drastic way“. China’s leader Xi Jinping is an old acquaintance on this list among 37 political figures.

Observers doubt whether the South China Morning Post can manage the balancing act between its efforts to remain independent and the constraints of having to serve as a platform for Chinese propaganda. Especially since rumours persist that the company could be sold to another Chinese investor. In March, CEO Liu had stressed that there was no reason to worry. But now that Alibaba’s activities in the financial sector have already caught the eye of Chinese regulators, the group’s numerous media holdings could also be placed under tighter control.

“The idea that the Post could be sold at a time when Beijing is talking about the need for ‘patriots’ to run media companies is very, very worrying,” says Keith Richburg, president of Foreign Correspondents’ Club Hong Kong. A few months ago Beijing had issued the slogan “Patriots for Hong Kong” to ensure that key positions in the city’s politics, administration, judiciary and business would only be filled in line with the Chinese government‘s guidelines. The aim is to build public consensus on the urgency of tightening legislation.

The National Security Law had been imposed on the city last year by the Standing Committee of the National People’s Congress in Beijing. It was a response to mass protests in Hong Kong that began in 2019 and were directed against the city’s loss of contractually guaranteed democratic civil rights.

Congestion of container ships continues

The Kiel Institute for the World Economy (IfW) predicts a massive obstruction of the global flow of goods. It blames a “traffic jam” of container ship traffic in southern China as the culprit.” The number of waiting container ships in China’s Pearl River Delta is unusually high. Individual ports such as Yantian have shipped less than half their usual container volume,” as the Kiel Institute for the World Economy reported on Monday. “Currently, almost five percent of all container ship capacity is already stuck at Chinese ports. This is more than in the first Covid wave.” The congestion has also led to “currently ten percent fewer container ship traffic than expected” in the Red Sea between North Africa and the Arabian Peninsula, according to the IfW.

The traffic jam was triggered by Covid infections among port employees. The congestion in the Chinese port of Yantian is now considered a more serious problem than the congestion at the end of March on the Suez Canal caused by the accident involving the container freighter “Ever Given”.

Most recently, Maersk, the world’s largest container shipping company, had told its customers that the congestion at Yantian was beginning to ease up. Nevertheless, Maersk warns that there could be”a downward spiral for neighboring ports” if one port is affected. niw

Merkel and Macron in talks with Xi

German Chancellor Angela Merkel and French President Emmanuel Macron spoke on the phone with Chinese President Xi Jinping on Monday. According to a government spokesperson in Berlin, they discussed relations between the European Union and China as well as topics on international trade, climate protection and biodiversity Merkel and Macron supposedly advocated further adjustments to short-term CO2 reduction goals and additional joint efforts to protect biodiversity at the 15th Conference of the Parties on Biological Diversity planned for October in Kunming, China.

“The conversation also revolved around cooperation in the fight against the Covid 19 pandemic, global vaccine supply and international and regional issues,” according to a statement by government spokesman Steffen Seibert. No further details were given.

According to the state news agency Xinhua, Xi promoted the Belt and Road Initiative as an “opportunity” to Macron and Merkel. He also proposed closer cooperation between China, France, Germany and African countries to jointly develop projects in Africa. In addition, “mutual support in the successful hosting of the Beijing Winter Olympics and the Paris Summer Olympics” was stressed, the Xinhua report added. According to the report, Merkel and Macron advocated the realization of the EU-China Investment Agreement (CAI) in a timely manner. The agreement is currently on hold. ari

Car sales decrease sharply in June

Sales of cars and commercial vehicles declined significantly in June, according to data by the China Association of Automobile Manufacturers (CAAM). According to preliminary calculations, 16.3 percent fewer cars were sold compared to the same period last year. Sales had already fallen by 9.5 percent in the previous month of May, the CAAM said in Beijing on Monday. Prior to that, China’s automobile market posted 13 consecutive months of gains since April 2020.

Overall, however, carmakers in China report a strong increase in sales for the first half of the year. According to CAAM between January and June, sales rose by 24.8 percent to 12.8 million vehicles compared to the same period last year. Especially in the first three months of 2020, the Covid pandemic had virtually paralyzed the Chinese car market. niw

Report: EU foreign ministers to push for more connectivity

According to media reports, the EU’s foreign ministers plan to call for faster progress on the European “connectivity initiative” next week. Its intent is to counter China’s “New Silk Road”. A so-called conclusion of the Council of EU Foreign Ministers next Monday will call for a “geostrategic approach to connectivity.” A target for “globally visible high-impact projects and actions” is also to be set, the Financial Times reported on Monday, citing EU sources. According to the report, the conclusion also suggests a joint push by EU capitals with national development banks, the European Investment Bank and the European Bank for Reconstruction and Development to provide funding for projects. These should also be included in the EU’s multi-year financial framework from 2021 to 2027, the newspaper quotes from the draft conclusion.

The fact that the EU’s efforts are directed against China’s Belt and Road Initiative (BRI) is reportedly not explicitly mentioned in the text. Instead, it advocates the global expansion of European connectivity. EU foreign ministers will meet in the Belgian capital next Monday. Brussels is currently looking for ways to build an alternative to China’s BRI and other infrastructure projects, especially in Eastern and Central Europe, but also third countries in Central Asia and Africa. However, specific steps in this direction have yet to be taken.

As early as mid-June, at the G7 summit in the UK, the seven leading industrialized nations had spoken out in favor of countering the BRI with an infrastructure initiative of their own. The initiative, called “Build Back Better World” (3BW), is intended to mobilize hundreds of billions of dollars in public and private funds for investment in developing countries, according to US sources. ari

Hisense receives TÜV certification

Hisense Smart TV has been certified for data protection by TÜV Rheinland for the first time. The Hisense platform smart TV VIDAA 72671 has been awarded for product cybersecurity and privacy standard certification. This makes Hisense the first TV brand in the world to receive this award.

The certificate originates from the “ETSI EN 303 645” standard published in June 2020 by the European Telecommunications Standards Institute, which aims to regulate basic cybersecurity requirements for consumer IoT products, such as privacy protection and prevention of network attacks such as DDoS attacks. It forms the foundation, upon which the technical and organizational measures to combat cybersecurity deficiencies and protect against network attacks are evaluated.

“The European market has always been an important part of Hisense’s internationalization strategy. However, with Germany as a key market, Hisense also puts a focus on the development of other Western European markets such as Spain, Italy, the UK and France. In order to reduce risks for the consumers, Hisense strictly adheres to the requirements of the DSGVO and is in close contact with TÜV Rheinland,” according to a statement by the electronics group from Qingdao. bw

Li Ying – China’s first female footballer is outing herself

It was a post like it is found millions of times a day on Chinese social media: “You are the source and target of all my tenderness,” wrote a 28-year-old. But there two reasons why her tweet on Sina Weibo, the Chinese equivalent to Twitter, is special in socio-political terms. The author is the well-known national football player Li Ying. And the declaration of love is for her friend, the influencer Chen Leilei.

Attached to the post are two pictures. One shows them gazing into each other’s eyes in affection. The other shows a cake with a glowing candle. It symbolizes their one-year relationship anniversary. It is the first time that a Chinese top athlete comes out and announces her homosexual partnership in public.

Li Ying has been one of the most popular players on the Chinese women’s football team for years. Born and raised in a village near the southwestern Chinese metropolis of Chongqing, she started playing in the women’s professional league at the age of 19, first with team Xizi Hangzhou, and since 2015 for the Shangdong Ladies. The striker has already appeared in 116 international matches. And unlike Chinese men’s football, the women have enjoyed real international success. They made it to the round of 16 at the 2019 Women’s World Cup, and finished third at the Asian Cup a year earlier. In both tournaments, Li Ying scored the most goals for her country. In January, she became the first female footballer in China to be awarded the “Asian Team of the Decade”, an award given by the International Federation of Football History and Statistics (IFFHS).

Officially, same-sex love has been decriminalized in China since 1997. Since 2001, homosexuality is no longer on the list of mental illnesses. According to surveys in metropolitan areas, a majority also has nothing against gays and lesbians – as long as no one in their own family is homosexual. As a result, most homosexuals keep their sexual orientation to themselves. Over 90 percent of middle-aged lesbians and gays are reportedly living in heterosexual marriages. In recent years, however, significantly more celebrities have come out about their homosexuality than it was the case ten or 15 years ago, especially among internet stars and influencers.

Li Ying’s post about her outing immediately went viral on social media. While many comments supported her move, there were also cautionary voices. “I wish her the best … but I hope it won’t affect her career in any way,” wrote one Weibo user. Prominent soccer commentator and blogger Zhao Zhen, who has more than five million followers on Weibo, noted, “Homosexuality in women’s soccer is no longer a secret.” However, Li Ying is the first to be brave enough to make her sexual orientation and girlfriend public as well, he said. She deserves a lot of respect.

Nevertheless, Li Ying’s post was deleted only a few hours after it was published. Some users speculate that Li was pressured by the authorities. Felix Lee

To improve weather forecasts in China, China’s National Space Administration (CNSA) sent a “Long March” type of rocket into space on Monday. In its hold: the Fengyun-3E (FY-3E) satellite. It will also collect data for global climate research.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Analysis

Crackdown on didi with severe consequences on Wall Street

Didi app forcibly removed

Non-transparency a major issue

Investors are holding back

A turning point in the case of Huawei Meng?

HSBC now cooperating with Huawei

No final verdict yet

Canadian lawyers back up Meng

A sword of Damocles over Hong Kong’s media

Only a “guise of independence” left

Lam an “enemy of press freedom”

News

Congestion of container ships continues

Merkel and Macron in talks with Xi

Car sales decrease sharply in June

Report: EU foreign ministers to push for more connectivity

Hisense receives TÜV certification

Press review

Portrait

Li Ying – China’s first female footballer is outing herself

Personal details

Dessert

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Analysis

Crackdown on didi with severe consequences on Wall Street

Didi app forcibly removed

Non-transparency a major issue

Investors are holding back

A turning point in the case of Huawei Meng?

HSBC now cooperating with Huawei

No final verdict yet

Canadian lawyers back up Meng

A sword of Damocles over Hong Kong’s media

Only a “guise of independence” left

Lam an “enemy of press freedom”

News

Congestion of container ships continues

Merkel and Macron in talks with Xi

Car sales decrease sharply in June

Report: EU foreign ministers to push for more connectivity

Hisense receives TÜV certification

Press review

Portrait

Li Ying – China’s first female footballer is outing herself

Personal details

Dessert

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

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