Hello, reader! The world breathed a sigh of relief, as America bid its farewell to the Trump era. What this means for fractured Sino-US relations still remain to be seen. But for now, it looks like both sides have found common ground on at least one thing: Bernie’s inauguration memes.
Welcome again to the latest edition of Sesame Express, our bi-weekly China newsletter. The three interesting topics we would like to share with you are:
- In the eye of the storm: community group buying (社区团购)
- When science gets muddled in politics
- Meet China’s “jiulinghou” (post-90s generation 九零后)
Enjoy reading, and and if you find it useful, don’t forget to help us spread the word by sharing with others!
1. In the eye of the storm: community group buying (社区团购)
When my 66-year-old mother told me last September that she had abandoned her regular supermarket trips for virtual shopping via WeChat app, I knew community group buying was about to take China by storm.
Indeed, the lockdown in early 2020 ushered in this experimental form of shopping and amplified its benefits. Now this greenfield market, which promises China’s tech giants coveted access to the country’s immense underserved market outside major cities, has become their latest battleground.
How it works: Community group buying platforms run their own mini programs on WeChat app, where consumers place their orders. The model relies on self-designated community leaders who live in the neighbourhood to aggregate orders by posting links to selected goods on their WeChat groups and then to handle distribution the next day. In return, these latest additions to China’s gig economy receive 5-10% of commission on sales, which can add up to an monthly part-time income of USD 250-500 according to Rest of World.
It’s a brilliant model.
- My mother loves it as there are no middlemen between her and producers, meaning great bargains.
- It is a steal for the platforms too, since this overcomes the problem of costly last-mile logistics and high wastage rates for fresh food thanks to an efficient system of pre-ordering with overnight delivery.
- It even reduces user acquisition cost, for the community leaders are incentivised to recruit customers through their own social networks while making sure they pre-select the right products for their groups.
But then why the uproar?
- The outcry first came from tens of millions engaged in traditional wholesale and retail trade, as their livelihoods came under threat from the dirt cheap prices subsidised by these competing platforms.
- Netizens then rallied to their support, once it became apparent the sheer scale of investments pouring into group buying platforms. “While others invest in developing microchips, they are after cabbages and mom-and-pop shops.” Many, bitter about the US stranglehold as a result of China’s under-developed semiconductor industry, believe that these firms’ vast war chest of capital is misplaced in the pursuit of short-term profits at the expense of research for technological breakthroughs.
- Others questioned if it’s just another unsustainable cash-burning game to achieve market domination, reminiscent of failures such as bike sharing start-ups.
And what a great debate to have, and especially on the reflection of social costs behind these modern comforts! If you ever lived in China, the degree of convenience you get to enjoy as consumer is almost hard to believe. People embrace it and many on 996 work schedules survive on it. But it’s not until recently that the hidden human costs behind these enjoyments began to draw attention.
The plight of delivery riders at the mercy of computer algorithms that prioritises speed over safety is well publicised (and frankly a shared problem in all big cities around the world, not just in China). The recent death of an overworked Pinduoduo employee is another. Ironically, she worked for the firm’s community group buying division which made life easier for millions but ruined that of its own employees by demanding unreasonable hours.
This reaffirms my view that regulation is keenly needed to retain a balance between social benefits and business profit-making, especially in the wild west of China’s tech scene. And I am pleased to see that the regulator is taking actions. Alibaba, Tencent, Meituan, JD.com, Pinduoduo and Didi Chuxing, have all recently received warnings against anti-monopoly practices in their community buying businesses from predatory pricing, algorithm manipulation to personal data breach.
2. When science gets muddled in politics
All too often journalists rush to accusations in China-related cases without bothering to reflect on nuances. I am glad this is not the case in covering the recent indictment of Chinese-American scientist Gang Chen (陈刚).
- For details, I would recommend Ellen Barry’s excellent report from the New York Times. In summary, on 14th January, Dr. Gang Chen, a naturalised US citizen for two decades and a renowned professor at MIT, was arrested under the US Department of Justice’s China Initiative. He was charged with “two counts of wire fraud, one count of failing to file a foreign bank account report (FBAR) and one count of making a false statement in a tax return”.
- This effectively boils down to his alleged failure to disclose USD 19m worth of Chinese funding, his several Chinese affiliations such as serving as a review expert and expert consultant, as well as a Chinese bank account exceeding USD 10k value in his 2018 tax filing. It was confirmed that he was not accused of passing any sensitive information to China.
- Both MIT and its 160 faculty have rallied behind Dr. Gang Chen since then. MIT openly stated that the USD 19m was not awarded to Dr. Chen personally but for funding a collaboration between MIT and a Chinese research centre. The open letter signed by the faculty argued that Dr. Chen’s Chinese affiliations are nothing beyond routine academic activities.
As highlighted by SupChina’s Margaret Lewis, Dr. Gang Chen’s case underlines two main issues with the China Initiative:
“an over-emphasis on national security and an under-emphasis on bias.”
And I couldn’t agree more. If you have followed other China Initiatives cases in the past, you would surely have spotted a striking pattern. That is, many defendants, similar to Dr. Gang Chen, were caught up in allegations related to non-disclosure, wire fraud, tax charges or conflict of interest. What would otherwise result in a fine or minor civil charges, were all invariably blown up to criminal charges which could lead to decades in prison. All in the vague name of national security, despite the fact that many were not found to have engaged in any economic espionage.
What is even more troubling is the element of racial profiling. According to The Scientist, a 2018 study found that the portion of people of Chinese descent charged for economic espionage in the US rose from 17% from 1997 to 2009 to 52% from 2009 to 2015. Of all the defendants of Chinese ethnicity, 21% were never proven guilty. This ratio is almost twice as much as the 11% among those with Western names.
Many Chinese scientists and researchers I know have been living on the edge, with the China Initiative’s ever broader brushstroke definition of “national security”, which to me feels increasingly like a remnant of past administration’s overzealous drive against one country.
Quoting my favourite reader’s comment to Ellen Barrys’ article, “science works better if collaboration can cross political boundaries”. It is about time that we all accept that we are part of a world where sharing is the only way forward to combat a myriad of problems facing the mankind from diseases to climate change.
3. Meet China’s “jiulinghou” (post-90s generation 九零后)
China customarily defines its cohort of people by decade. While the world is pre-occupied with millennials and Generation-Z, The Economist set eyes on China’s “jiulinghou”, which literally translates to post-90s generation (or the cohort born between 1990 and 1999). For those keen to take a peek into China’s future, I agree that this cohort in their 20s is of particular interest.
Of course, it is impossible to generalise a generation of 188 million people. They are inevitably different individuals shaped by their own experiences and circumstances. In fact, quite a few that I know pointed out to me that they were born in 1990 and as such would like to dissociate themselves from the post-90s generation. Nevertheless, I believe this recent collection of special reports published by The Economist made shrewd observations of some common denominators shared by this group and would recommend to all for a read.
Here is a quick summary of the things that resonate most with me (links to full reports included).
- Individualism and social progressiveness: As the first generation to have grown up amid consumerism, the post-90s generation is more vocal about social injustices, gender inequality and environmental issues. They like to defy social norms, rejecting China’s “rigid formula of success”. On the flip side, frustrated with the ultra-competitive job market, gruelling work culture and rapidly rising living costs, they often vent their resentment online by memes such as “involution” (内卷) and “working man” (打工人).
“They proudly exhibit their values by dressing in home-grown brands or job-hopping to find work that suit them. Do gooding is often part of the mix.”
“Discrimination against women is on the rise, partly as the state tried to stimulate a baby boom”… “A backlash from young woman has created a new genre of “she era” films that cheer for independent women.”
“Much young resentment comes from a sense of having lost out on both the boom years and the government’s former largess. A widely shared joke encapsulates this. “The state gave houses to our parents, and now we pay for them; it raised the retirement age when we started working; the stock market crashed as we started buying; and when we thought we could enjoy being adults, the state told us to have a second child.”
- Patriotism: Having experienced first-hand China’s ascend on the world stage and received “an education with more emphasis on patriotism than at any time since Mao”, this is a generation that uses VPNs, enjoys foreign culture while feeling immensely proud of the country’s achievement. Most are confident about China’s future and feel empowered to leave their own mark.
“Seeing how America and much of the rich world mishandled Covid-19, many even wonder if Western values, including constitutional democracy, are all they are cracked up to. In an uncertain world. Chinese order can feel reassuring.”
“China’s young do not have deep feelings for the Communist Party. Instead, the party’s legitimacy has rested on continued growth and the certainty that the next generation will be better educated, richer and happier.”
“Much of what the youth display is performative patriotism, because it is easier and safer to side with the loudest voice.”
- Returning “sea turtles”: Sea turtles (haigui 海龟) refer to overseas Chinese returning home. The threat of Covid-19, terrorism and Trumpism hostilities has made homecoming especially popular in the last couple of years. And a booming and lucrative tech scene back home is just the icing on the cake.
“They think China is best served by picking aspects of Western culture that suit it. Lot of young people think that America is declining, and its flaws could be solved with a Chinese political arrangement. They are more confident that they do not have to follow the same path – in fact our path might be better.”
“Anti-Chinese sentiment can persuade Chinese overseas students – cosmopolitan, politically liberal types – to stick up for China.” …“A popular joke online is Mr. Trump encourage the Chinese to rally around the flag.”
- Rural and urban divide: China’s rural and urban disparity is gigantic but China’s youth is helping to bridge this gap. Ubiquitous access to the internet, together with highly efficient transportation and logistics infrastructure, has brought big city life to the small towns. With that, many are returning home for a better quality of life. On the other hand, those who choose to stay behind in the rat race, tend to face more challenges than their urban peers.
“Rural youths are no longer prepared to spend hours toiling on production line as their parents did. Instead they pick up gigs as couriers or ride-hailing drivers.”
“Returning youth often find jobs selling stuff from premium tea to tofu. Since mid-2019, over 100, 000 live streamers have tuned in from farms to shift goods on Alibaba, a giant e-shop.”
“The allure of BeiShangGuangShen, as the rich cities of Beijing, Shanghai, Guangzhou and Shenzhen are known, is fading.
That’s all for this week. Thank you very much for tuning in and we look forward to hearing your thoughts on these topics.