Hello, Flying Sesame readers!
Another week of grey British summer and Covid blue has gone by. To cheer you up, here is our very first Sesame Express, highlighting a selection of China related topics and articles in the past two weeks, which I think you may be keen to learn about.
Give it a read. I hope you will find it as interesting as I do. Enjoy!
1. Pinduoduo (拼多多), a serious disrupter here to stay or the biggest bubble in the Chinese internet history?
The rapid ascent of Pinduoduo (and resulting wealth creation for its founder Colin Zheng Huang 黄峥) would give Jack Ma (马云) a good run for his money. Founded in Shanghai in 2015, Pinduoduo’s social group-buying model (Facebook+Groupon, or in Huang’ word, “Costco+Disneyland”) is smashing hit in China, propelling the company to the much envied US$100 billion club on the Nasdaq.
- For those who are less familiar with the company, Y Combinator (“Pinduoduo and the Rise of Social E-commerce”) and Techcrunch (“The incredible rise of Pinduoduo, China’s newest force in e-commerce”) took a closer look at what drives its remarkable success.
- However, questions are being asked about how this could have been possibly achieved without even a CFO in place, and whether the self-reported GMV (gross merchandise value) figure is a reliable indicator to measure growth. (“Pinduoduo defies gravity with spending spree”, Financial Times).
- On 1st July, 40 years old Colin Huang, at the pinnacle of his career,, unexpectedly announced to step down as Pinduoduo’s CEO, passing the baton to his CTO. While the stock market’s reaction to the announcement appeared largely muted, the surprising move, as well as the rather odd timing of the decision, have raised many questions. (“What’s really behind Pinduoduo leadership switcheroo?”, Technode).
2. China’s worst flood in decades
Overshadowed by Covid-19 pandemic and a rising tension with the US, China’s battle against its worst deluge in decades appears to have escaped attention of many.
- Please don’t let a lack of media coverage misguide you – China is fighting an unprecedented natural disaster, which caused great hardship and has dire economic consequences (“China’s Historic Flood Season, in Numbers and Photos”, Sixth Tone). Provinces and cities along the Yangtze River are inundated by severe flood after non-stop torrential rains. People including myself, who still have a vivid memory of the catastrophic flood devastating the country in 1998, fear that the history may repeat itself.
- So why is this year’s flooding so bad? How about China’s flood defence system? Some experts believe that climate change and land reclamation, which have reduced the size of freshwater lakes, are to blame. And dams, including the gigantic Three Gorges Dam, are only effective in controlling flood to a certain extent (“Global warming and illegal land reclamation add to severe floods in China”, South China Morning Post). For further reading on the impact of climate change and land reclamation on China’s cities, I find New York Times’ in-depth piece back in 2017 very illuminating (“Rising water threaten China’s rising cities”).
Frankly, I am disappointed that I have not seen more discussions about this both inside and outside China. I hope, just like how we are debating about Covid-19 right now, there will be more soul searching after the flood is over.
3. Border conflict with India – a miscalculated move from China?
Fatal clash along the contentious Himalayan China-India border in June, which left 20 Indian soldiers dead, demonstrated just how high tensions are running between the two neighbours. To better understand the dispute, you may find The Guardian’s explainer (“What is the deadly India-China border dispute about”), as well as Foreign Policy’s overview (“The Galwan Killings Are the Nail in the Coffin for China and India’s Relationship”) useful.
- With both sides showing restraints, the situation is unlikely to escalate to a full-blown war like back in 1962. On the other hand, the incident unmistakably played to the growing nationalism in India. Experts believe that this time China may have gone just one step too far, tipping India over to do the one thing that the Chinese government has tried to keep it from doing for years — move closer to the US. An opinion piece from one of India’s MPs Shashi Tharoor may just proved this speculation right (“Driving India into US arms is a risk China is willing to take”, South China Morning Post).
- And this is bad news for China’s tech giants, as Indian government swiftly announced the ban of 59 Chinese apps over national security concerns, including TikTok and WeChat. Facing an increasingly saturated home market, India has been a land of opportunity for the likes of Alibaba, Tencent, Bytedance and Xiaomi. They worked hard to win the Indian market, some with considerable success – think of TikTok’s 200 million users in India before the clamp down. And altogether they “spent more than US$ 12.3 billion in Indian start-ups…helping to scale Indian unicorns like Paytm, Snapdeal, Swiggy, and Ola,” according to Technode’s research. Now they are sitting ducks caught in the crossfire of a geopolitical battle (“What will Chinese apps do after India ban?”, Caixin Global).
Further reading on some lighter but nonetheless noteworthy topics:
4. Would he have lived in China?
Perhaps I’ve gotten too used to The New York Times’s sharp tongue, I find myself unexpectedly touched by its human side when I read one of its recent opinion articles, “My Relatives in Wuhan Survived. My Uncle in New York Did Not”, written by a Chinese molecular neurobiologist Yi Rao, whose family, like many others, were caught in between China and the US then and now.
Editor Max Strasser’s comment, noting “this isn’t all just 5G technology and the South China Sea”, found an echo in me. And I don’t think I can sum this up any better than he did: “I think people should read about treaties, military manoeuvres, and diplomatic summit. But I also try to remember – and I try to make sure our readers remember – that people’s life hang in the balance…we’re still going to publish articles about Xi Jinping and Donald Trump. But I hope that when you read those, you think about these people too.”
5. Time to retire, says China’s growing FIRE generation
With more time at hand during lockdown, many of us have taken the chance to reflect on life and reassess priorities. For a growing group of Chinese millennials, this means calling quit to the rat race and embracing the freedom of retirement.
The reported surge of interest in “financial independence, retire early”, or so-called “FIRE” (“For young Chinese, the coolest thing to do in 2020 is to retire”, Sixth Tone), certainly chimed in with some recent conversations I had with friends back home, with one confessing that her favourite pastime is to browse homes for sale in China’s remote countryside, which has a much lower cost of living.
FIRE would be nice, I thought to myself. But with rising inflation, a record low interest rate and an increasing life expectancy, this, sadly, may all just be wishful thinking for most of us.