Welcome to the 35th edition of The Chinafornia Newsletter, your weekly digest of news connecting the
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July 27 · Issue #35 · View online |
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Welcome to the 35th edition of The Chinafornia Newsletter, your weekly digest of news connecting the Golden State and the Middle Kingdom. There’s a really great batch of stories this week, with a dive into the Chinese government’s AI ambitions, a dust-up over Chinese identity and even Steph Curry clowning around on Chinese basketball courts. I also went heavy on the commentary this week, so scroll through and let me know what you think.
Before that, a special request: I’m currently writing the real estate chapter of Chinafornia the book and would love reader tips on interview subjects. I’m looking into Chinese homebuying, commercial developments and EB-5 projects. I’d love to talk – on or off the record, English or 中文 – with people who have industry knowledge (or even better, personal experience) in those areas. I’m especially eager to hear from Chinese folks who have either bought houses in the US or immigrated through EB-5. If that sounds like you or a friend, drop me a line: mattsheehan88@gmail.com or WeChat: californiamatt13. This week’s top reads: The Chinafornia Newsletter is created by me, Matt Sheehan. I’m a fellow at The Paulson Institute and write for the think tank’s site MacroPolo. I spent over five years in mainland China, including two as the first-ever China correspondent for The Huffington Post and The WorldPost. I’m now back in my native California where I’m consulting on market entry and communications for China-related projects, and writing a book on Chinafornia.
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Beijing Wants A.I. to Be Made in China by 2030 - The New York Times
A new plan from the top of the Chinese government calls for the country to become a powerhouse in artificial intelligence in just over a decade. Matt: Great overview of the Chinese government’s bid to dominate the technology that will dominate the global economy. This paragraph nails something I’ve observed in so many Chinese government pushes: “While the language in Chinese industrial policy can sound stodgy and the targets overly ambitious, Beijing takes its economic planning seriously. Experts say that even if major spending efforts ultimately waste resources, they can also produce results, bolstering technology capabilities with a flood of resources.” Western analysts get very hung up on waste in China’s spending on public goods with huge externalities (high-speed rail, subways, even subsidies to lure talent back to China). But you have to wonder: when the potential upside is so big, which is a greater danger, overspending or underspending?
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Silicon Valley Giants Confront New Walls in China - The New York Times
The recent struggles of Apple, LinkedIn and Facebook show why the number of tech companies willing to have a try in China is dwindling. Matt: Headline doesn’t make it obvious, but second half of piece does a deep dive on LinkedIn China. It’s the best explainer I’ve seen of the company’s modest victories and real challenges in the country. Well worth reading.
Earlier this month, LinkedIn’s founder Reid Hoffman said China is the clear global leader in incubating the “next Silicon Valley.” (Excerpted quotes and full podcast.) Plenty of Silicon Valley execs praise Chinese innovation when angling to get into the country, but I give this more credibility because the comments came in a venue that’s not very China-facing.
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Welcome to Xi's Net: Where Politics, Porn and Pooh Are Forbidden - Bloomberg
For anyone still wondering about China’s ability, or willingness, to control its people’s access to the internet, the past few weeks have provided some clarity. Matt: Nice rundown of recent internet restrictions by Christina Larson, who broke the story on VPN crackdowns a couple weeks ago.
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Sensing Weakness, Uber’s Asian Rivals Make $2.5 Billion Play - The New York Times
With a new funding round, the Southeast Asian ride-sharing company Grab is doubling down as Uber seeks new leadership.
Matt: India and Southeast Asia are grounds for a fascinating proxy war between Chinese and US tech companies. In Cold War terms, it looks like Didi wants to turn Southeast Asia (and India) into Uber’s “Vietnam.”
Side note: This week NYT’s Paul Mozur officially scored the first Chinafornia Newsletter hat trick: 3 stories in one edition. 恭喜恭喜。
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Winter is Coming for Chinese Mega Deals, But Chinese FDI Isn’t Going Away - MacroPolo
Chinese dealmakers have been cheering their banner year of $200 billion-plus in foreign acquisitions in 2016. Yet at the same time, the Chinese government has decided to clamp down on the mega deals that have made those investors famous. Wanda Group, owner of AMC Entertainment and global flagship properties, has become just the latest target… Matt: My colleague at MacroPolo Joy Dantong Ma explains why private equity funds and venture capital may keep Chinese FDI alive through their existing offshore funds.
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U.S. Message to China: Hands Off Our Companies - WSJ
The American committee that screens foreign investments is holding up high-profile acquisitions involving Chinese companies amid concern about the risks they might pose to U.S. national security. Matt: The squeeze on blockbuster Chinese acquisitions is coming from both sides, with President Xi reportedly personally seeing to the severing of loans to Wanda for overseas deals.
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Apple Supplier Foxconn Looks at Producing Display Panels in Wisconsin - WSJ
Taiwan’s Foxconn Technology Group, which assembles Apple’s iPhones, is nearing a decision to invest in Wisconsin and could hold an event in Washington, D.C., as soon as this week to discuss U.S. investment plans. Matt: Coincidence that Foxconn is building plant in a swing state and announcing in DC? I think not. Trump will eat this up. Meanwhile, Trump’s new comms director Scaramucci is awaiting CFIUS approval to sell his company to HNA, a Chinese conglomerate that Bank of America just decided to cut business ties with over its shady and opaque ownership structures.
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Seesawing Fate of Legendary Reflects the Film Industry’s Volatility - NYTimes.com
Two summers ago, Legendary Entertainment was the belle of the Hollywood ball. Now, in a reflection of the volatility of the film business and the precariousness of deal making with Chinese companies, Legendary is facing uncomfortable questions about its future. Matt: Weak headline for a good piece. Gives a rundown of the many signs that Wanda greatly overpaid for Legendary. Reminds me a lot of reactions I’ve read from when Sony bought its way into Hollywood during Japan’s rise. Back then the fears were that Japanese companies would censor portrayals of Japan, or nix World War II movies that cast the emperor in a negative light.
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China Announces Top 10 Films for First Half of 2017 | China Film Insider
Despite all the buzz surrounding “Dangal,” it’s “The Fate of the Furious” that led the top 10 films in China from January to June. Matt: China loves its Furious… we’re now in a summer “Hollywood blackout” period designed to protect local films. They’re being protected, but not exactly killing it at the box office based on recent numbers.
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In China’s Capital, a Portal to Hollywood’s Golden Age - The New York Times
A small cinema offers an intimate atmosphere and luxury seating for lovers of classic films and vintage Chinese favorites. Matt: Sounds like a fun spot, though likely outside the price range of my friends in Beijing. Here also is a piece about a Tibetan pilgrimage film that Chinese VC’s love.
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Report: The Trump era hasn't badly hurt international student enrollment after all | News for College Students | USA TODAY College
International student college enrollment was expected to take a bit hit this fall. That doesn’t seem to be happening. Matt: Looking in detail at the PDF of the full report, one sentence about undergraduate enrollment jumped out at me: “Looking specifically at Chinese students, there was a 2 percent decline in admissions offers made to Chinese students and a slight drop in yield from 25 percent to 23 percent.” If I’m reading it right, that would indicate a drop in total undergraduate enrollment from China, yes? If so, that would be the first leveling off and slight reversal of growth in years…
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New Challenge to U.S. Power: Chinese Exceptionalism - WSJ
China’s once-reticent citizens see their country as economically, diplomatically and politically ascendant—and the U.S. in decline. The phenomenon bolsters President Xi’s signature slogan exhorting the “China Dream.” Matt: Piece lead’s off with example of a Chinese student who “once idolized the West” but has become starkly nationalistic since returning to China. Americans tend to have a hard time swallowing the idea that people in other countries (especially China) could get a taste of American freedom and still fiercely love their own country. We’re going to have to get used to that one.
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When the (Empty) Apartment Next Door Is Owned by an Oligarch - The New York Times
Foreign money is flowing into neighborhoods in North America. But what does that mean for the neighbors? Matt: Some good data nuggets on the effect of out-of-town or foreign buyers. Most interesting is the scholar’s suggestion for a surtax on high-end property that can then be deducted against income taxes. It’s a clever way to tailor the tax to exactly what you’re targeting: wealthy buyers who aren’t living/paying taxes in the area.
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Jared Kushner's White House connection still being used to lure Chinese investors - CNN
Jared Kushner’s status as a top aide to President Donald Trump was used to lure Chinese investors to his family’s New Jersey development, even after his family’s company apologized for mentioning his name during a sales pitch in May, CNN has found. Matt: The whole Kushner company’s engagement here has been shameless. Are they really having such a hard time recruiting EB-5 investors that they have to put him front and center? Won’t word get around either way?
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4 Reasons Why Dr. Bell’s Chinese Card is Officially #Cancelled
I absolutely resent that this piece exists, and it isn’t just because I resent when white Western folks try to lay claim to aspects of Asian identity (more on that later). It’s also because that, in an attempt to sound authoritative on Chinese culture to a white audience, Dr. Bell manages to say some pretty offensive, inaccurate, and minimizing things about China and Chinese people.
Matt: Shots fired in response to Daniel Bell’s WSJ piece “Why Anyone Can Be Chinese,” in which he argued that “Chinese-ness” should be open to people like him who commit to embracing it. These are murky waters that I won’t fully wade into. Personally, I loved learning about and integrating into Chinese society but never got hung up on whether or not I could “be Chinese” – to me, the fun is in the culture smashes.
One point in this response piece that I’ll quibble with: “Believe it or not, the push towards China’s—and Chinese people’s—Westernization is due fundamentally to Western pressure.”
Military and economic pressure has definitely been a huge part of “westernization” historically, but I also take at face value and seriously the Chinese people who just love and identify with aspects of American culture. I found this all over the place – China’s ultimate frisbee scene, Chengdu hip hop, etc. You’d see kids who’d grown up in a pretty conservative Chinese world get a taste of that American 不要脸 goofiness, and something just clicked for them – this “foreign culture” tapped into a deeply felt part of them that had never been expressed. They then “appropriate” it and make it their own, and everyone is richer for the exchange. I love it. Final thought: Don’t worry, Dr. Bell, the Chinafornia identity is open to all who live it and love it.
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Top Destinations for Wealthy Chinese Looking to Move Abroad | Jing Daily
The Hurun Report has revealed the top destinations for Chinese HNWI immigration, which is driven by concerns about education and pollution.
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Steph Curry's in China poking fun at Klay Thompson's missed dunk for the ages - SFGate
Curry’s joke refers to the popular #ChinaKlay hashtag, which went around Twitter during Klay’s Asian tour to track his near-daily goofy moments. Among them were his missed dunk, of course, and incredible video footage of Thompson dancing enthusiastically in a Chinese club. Matt: Cracking me UP.
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Rice Growers In Sacramento Valley Could Export Product To China - capradio.org
For the first time in history, an agreement is in place that gives U.S. rice growers access to China, the world’s largest consumer of rice.
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"Red Light Revolution" Trailer - YouTube
Matt: This is a trailer to a very funny movie that I watched this week. It’s a comedy with a lot of heart about a Beijing bro who opens up a sex shop in the hutongs. The crew behind it has roots in China and the west, and the film is just authentically fun in a way you don’t see enough in mainstream Chinese movies. You can stream the movie on Amazon for just a couple bucks. I highly recommend it.
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