Yesterday was some information about the Chinese equity market.
Bloomberg made a chart about the massive wealth destruction that's happening in China. This chart was back in July, but the market still hasn't fully recovered.
It used to be easy for foreign brands to get recognition and market share in China.
According to the Wall Street Journal, that's no longer the case. Domestic Chinese brands are able to push out established foreign brands in certain industries like skin care and infant formula. Interestingly, foreign brands actually gained shares for toilet tissues.
Another cool infographic by Alberto Lucas López which compares US and China's military prowess.
US easily dwarfs China in terms of nuclear warheads (7315 to 250) but China has been increasing their military spending and a few key Chinese statistics are still unknown (ie. the size of their cyber command, etc). Interesting to see how the two powers are trying to balance each other.
Wood Mackenzie provides an informative infographic about peak coal in China and suggests that it's not a question of time, but geography that determines peak coal in the country.
An old acquaintance came into town for the All That Matters conference. We started to talk about web comedy in Asia and I told him about Diors Man (屌丝男士), a funny web series in its third year. It's extremely popular in China and mainly targets the domestic market (hence, no official English subtitles).
How popular is the show? Johnny Galecki, more famously known as Leonard Hofstadter from The Big Bang Theory, guest starred on the web series (see the video on the right).
Japanese AV actress Akiho Yoshizawa (吉沢明歩) has also guest starred on the show. Don't let the view count fool you as the show is extremely popular and it's not limited to just YouTube. If you do an aggregate view count, where you tally viewership from all the different platforms in China, I'm sure the show is in the millions. And yet there is no English wikipedia page for the show.
I'm bringing this up to show that there's a lot of amazing, original content in China, but Chinese producers are mostly interested in the sizable domestic market. Netflix acquired the popular Chinese drama Empresses In The Palace for its U.S. audience but I'm not sure of the demographics that would watch Empresses In The Palace in the US.
On the other hand, a funny, irrelevant show like Diors Man has a much wider appeal since these guys are lovable losers/geeks, much like the appeal of The Big Bang Theory. The title - Diors Man - is a play on the idea of the lovable loser. Dior is, of course, the name of the luxury brand. A popular Chinese slang is 屌丝 (diǎosī) which means loser so the idea is that these guys think they're high-end, but in reality they're just charming losers.
It's shows like these that Netflix or other video platforms should try to acquire.
There's been a lot of talks lately about China's movement in the South China seas and how it's literally building an entirely new island in the area. If we look at the chart below, we can see that China has more ships than other claimant countries combined. This might explain why the US is increasing navy movements in the region and why other countries are uncomfortable with China's growth.
Bloomberg reports that by 2030, China's low-carbon capacity is expected to be larger than the entire U.S. power grid. So, in 15 years, China will surpass the US in the production of low-carbon power sources. By 2030, China will produce enough low-carbon power sources to power the entire US.
This report is not just surprising because of the speed with which China can develop their low-carbon power sources, but also disturbing because of the US inability to do so. The US should be able to take the lead on this, but yet it's not happening. How sad is that?
Previously, one of the arguments I had with my friend was that it was easier to create new words in English/European language than in ideogrammic languages like Chinese. In English, you can misspelled words (Googol becomes Google), add letters at the end of a word to change its meaning (self + ie = selfie), or create entirely new words (twitter). In Chinese, you were traditionally limited to the number of existing Chinese characters. You can combine different Chinese characters to form new meanings, but you actually don't create a new Chinese character.
However, an incident involving Jackie Chan is changing that. Jackie Chan's name in Chinese is Chéng Lóng (成龙). His name translates to "becoming [the] dragon".
In a video commercial, Jackie utters a sound effect - "Duāng!" - which doesn't have any equivalent in the Chinese language.
Chinese netizens were so amused by the word that they combined the two characters from his Chinese name to form an entirely new Chinese character. The new character basically means "Boing". The problem is that since the character is not officially recognized by the Chinese government, there is no convenient way of typing it on the computer. Most Chinese netizens who want to use the word simply type "duang".
While it is entirely possible to create new Chinese characters, like how Jackie Chan accidentally inspired people to do so, it would still be very difficult to use the newly created Chinese characters. Still, it's cool to know that most Chinese netizens are open to the idea of creating new Chinese characters and linking it to current events.
There has been extensive coverage and research on the impact of the sales of US and Russia military technology to the rest of the world. US and Russia practically armed their allies during the Cold War.
As Chinese military technology continues to improve and other countries are acquiring their military technology, there should be more policies on how to regulate the sales of Chinese military technology as it has damaging consequences to regional conflicts and international relations.
Apparently, both ISIS and Hamas use Chinese drones during warfare. While some of the drones may not be military surveillance drone and only a civilian-grade drone, it is still troubling that rebel groups are able to get their hands on such technology and use it for military purposes.
Even more troubling is that China is unqualified to become a member of MTCR (Missile Technology Control Regime), the major arms control body for regulating the sale and transfer of unmanned technology, precisely over concerns about its accountability. Hence, China is in a position to sell their drones to the highest bidder, regardless of the impact it might have on other countries.
This issue should be addressed promptly before the world is proliferated with Chinese-made drones.
Going into 2015, it seems that China has decided that the best way to resolve a disputed territorial claim is through a website. The China’s State Oceanic Administration launched the website www.diaoyudao.org.cn this week in order to maintain claims that the Senkaku/Diaoyu Islands belongs to China.
The website features facts about the islands’ natural environment, its history, legal documents about the islands, and news update. Interestingly, the website is available in only one language - Mandarin Chinese. It seems that the China’s State Oceanic Administration intends for the website to be solely for its domestic audience. On the homepage, a bright red Chinese flag and the statement “Diaoyu Islands - China's sovereign territory” is placed on top of the page.
Expectedly, the website disavows Japan's claims over the islands. The purpose of the website seems to corral popular opinion to legitimize its claims.
Japan's Ministry of Foreign Affairs has its own version of history and claims over the Senkaku Islands on its website. The website is available in 12 languages, which makes it a lot more international than China's website.
Is this the future of diplomacy? Nations fighting over disputed territories through websites to manipulate popular opinion.
It would not be too difficult to imagine the United Kingdom, Ireland, Iceland, and Denmark launching their own websites to claim sole sovereignty over Rockall, the uninhabited, disputed granite islet in the North Atlantic Ocean.
Youku Tudou, one of China’s largest streaming video sites with a monthly user base of 500+ million and daily video views of 800+ million, is going to start producing its own hardware. Next month, the company will introduce three devices — a WiFi router, a smart TV box, and a 15.6-inch Android tablet.
In addition, the company is launching its fourth consumer business unit, a cloud entertainment unit to stream Youku Tudou videos to its devices. It's not surprising that Youku Tudou decided to enter the hardware market since Digital TV Research reported that China is now the world’s biggest smart TV and OTT (over-the-top) content market.
This development only reinforces the idea that streaming is going to become the norm for delivery of media content in China and explains the recent spurs in partnerships among various media players to secure content (Xiaomi with Youku Tudou, Tencent with HBO and Warner Music Group, etc).
While the Chinese government has not regulated streaming video content as much as TV content, expect that to change when streaming videos become the standard way in which an average Chinese citizen gets content. China has already implemented the "Great Firewall", who knows what else they might implement to regulate streaming videos?
This past Saturday, China commenced the first Nanjing Memorial Day, the first time the country officially held a national day of remembrance for the fallen during the Nanjing Massacre.
The ceremony was broadcasted on CCTV state television with the Chinese flag flying half-mast to commemorate the fallen.
President Xi Jinping said that no one can deny the Nanjing Massacre. According to the state-run Xinhua news agency, President Xi said that, "Anyone who tries to deny the massacre will not be allowed by history, the souls of the 300,000 deceased victims, 1.3 billion Chinese people and all people loving peace and justice in the world."
State media reported that close to 10,000 people attended the ceremony in Nanjing which included prominent Chinese dignitaries like Zhang Dejiang, chairman of the NPC, and Wang Yi, China's foreign minister.
The Nanjing Massacre is an extremely sensitive and unresolved topic for both countries. China repeatedly stresses that Japan has failed to properly atone for the massacre during an unjustified invasion. Japan tends to claim that the Nanjing Massacre was a legitimate act of war during a full-scale war. Chinese emphasizes that the casualty is close to 300,000 during the six-week killing spree by the Japanese military. Japan and some foreign academics contest the number of casualties. China accuses Japan of "whitewashing" its horrendous actions while Japan accuses China of using anti-Japanese sentiments as propaganda. Both sides cannot agree on the number or the ways by which to resolve it amicably.
The decision to implement a Nanjing Memorial Day can not have come at a more difficult time. While Japan and the China have official diplomatic relations for 42 years now, recent events regarding territorial claims over the Senkaku Islands in the East China Sea and Prime Minister Abe's visits to the Yasukuni Shrine are seriously straining bilateral relations.
Prime Minister Shinzo Abe's recent landslide in the elections further escalates tension between the two powers. Abe is a nationalist and a war hawk. He openly visits the Yasukuni Shrine, which honors Japan's war "heroes" during World War II, the very same people China wants to perpetually condemn, going so far as to instigate a national day.
President Xi tried to lower the tension by emphasizing that, "We [China] should not bear hatred against an entire nation just because a small minority of militarists launched aggressive wars." However, it remains to be seen how Japan will react to China's Nanjing Memorial Day.
My bet is on escalating military actions between the two sides. While Japan does not currently have a military due to the consequences of World War II, China's aggressiveness in East China Sea and rapid growth in its military capabilities will create a military arms race between the two countries, especially if both sides are nationalistic and hawkish.
News agency are reporting that China is sending about 1000 tonnes of fresh water to the Maldives after a fire at the sole water sewage treatment plant in Male, the capital, left 100,000 people without safe drinking water. The Maldives, a group of 1000+ coral islands southwest of India, is a popular honeymoon and tourist spot and has a population of about 400,000 people.
The Maldives requested aid from India, Sri Lanka, the United States and China.
China is using military vessel to transport the majority of the fresh water to the island nation in the strategic location of the Indian Ocean archipelago.
India reported that it's using its fleet tanker, the INS Deepak and the INS Sukanya, to deliver around 900 tonnes of fresh water and replacement parts to help fix the machinery at the water treatment plant. According to the report, the fleet tankers are able to produce fresh water using its using its onboard desalination plant and the INS Deepak is capable of generating 100 tonnes of water per day while INS Sukanya is capable of 20 tonnes of fresh per day.
Both India and China have rapidly responded to the Maldives' request for assistance. Given the strategic maritime importance of the island nation, it seems China and India are both scrambling to outdo one another. China, of course, wants to secure the shipping lane for transport of oil while India wants to prevent China from barricading India's territorial waters with the so-called "String of Pearls" strategy.
As for the US, it seems to be leaving the battle for the hearts and minds of the Maldivians to India and China.
There doesn't seem to be a day that goes by without some facts hinting about China's growing markets.
International Data Corporation (IDC), an American market research firm, predicts that 2015 will be a very good year for China. The firm estimates that nearly 500 million smartphones will be sold in China, which is 1/3 of global sales and 3x the amount in the US. But, it's the domestic producers like Lenovo, Xiaomi, Huawei, and ZTE which will dominate, making almost 85% of the total sales of smartphones in China. Furthermore, the Broadband China Project, a government initiative to provide high-speed broadband networks for 95% percent of the country’s urban population, will bring more than 680 million people online next year. 680 million people is more than 2x the entire population of the United States.
IDC also predicts that China, due to the demand of its domestic digital natives, will produce a major cloud-based giants that will rival Amazon Web Services, Microsoft Azure, and Google Cloud service in the next three to four years.
China's sheer market size and its protectionist policies will pretty soon allow it to dictate technological trends as foreign tech companies want to cater to the Chinese market.
Wu’er Kaixi (吾爾開希), one of the student leaders during the 1989 Tiananmen Square incident, announced that he's running for a legislative position in Taiwan’s parliament. He's seeking to represent the district of Taichung and has made history as the first Mainland Chinese dissident to pursue a parliamentary seat in Taiwan.
The 46 year-old activist has been in a self-imposed exile in Taiwan and worked as a political commentator who frequently criticized the Chinese Communist Party.
During an interview with WSJ, Wu’er Kaixi commented that, "What Taiwan needs is someone who doesn’t fear the CCP, someone who has nothing to lose by challenging Beijing and someone who dares to speak the truth because there is no conflict of interests."
If Wu’er Kaixi wins a legislative seat in Taiwan’s parliament, it would be another political crisis for China.
This year has not been a good year for Chinese politics. First, they had to deal the worldwide attention of the protest in Hong Kong. Now, a Chinese dissident is running for office in Taiwan and has a legitimate shot at securing a seat.
HBO is, of course, the cable channel that everyone wants to emulate. The company is a perennial kingmaker, creating iconic shows like The Wire, The Sopranos, True Blood, Game of Thrones, and True Detectives.
Tencent is securing its digital platform and online audience with licensed content. According to Tencent, starting January 1st 2015, Tencent will be the sole online partner of YG Entertainment in China. It plans to utilize its own online and mobile platforms, such as QQ Music and Tencent Video, to distribute contents from HBO, YG Entertainment, and Warner Music Group.
These various deals illustrate that media content is a game of thrones between large Chinese firms. Alibaba is rumored to be seeking media firms to acquire. China's Dalian Wanda acquired US-movie theatre chain AMC Entertainment in 2012 and is reportedly considering buying Lionsgate.
All this buying and partnering frenzy shows that China has an insatiable appetite for media content and that large Chinese firms are all vying for the throne.