Over the space of 20 years, luxury changed enormously. The Japanese had been a set of new consumers for luxury, but in terms of numbers they hadn’t eclipsed the US as the biggest market for luxury.
China’s ascent into the WTO (World Trade Organisation) made a lot of business people and politicians a lot richer. China challenged the US in terms of luxury market size. On their rise, Chinese consumers changed a lot in their sophistication as they educated themselves on luxury consumption.
These new consumers picked up new traits such as wine drinking. This also meant that luxury goods became new asset classes as Chinese money looked to acquire only the best. Chinese culture in turn impacted luxury design. Chinese new year became more important than Christmas.
Then there was the second generation money. Young rather than old consumers. Consumers who were looking for something less formal, either because they didn’t wear anything but streetwear or they worked in the creative classes rather than the traditional professions and high finance.
The industry had traditionally avoided rap artists and R&B singers, now Jay Z and Beyonce are the face of Tiffanys and Fendi had collaborated with Rihanna.
They no longer wanted to have to wear a jacket and tie to have afternoon tea at the Mandarin. They took an eclectic look more attuned to the Buffalo Collective than Vogue Italia.
You had hybridisation with the street to create a new category of luxe streetwear in a way that also owes a debt to football casual terrace wear and the pain.
Now you have Zegna badge engineering approach shoes from alpine brand La Sportiva and Prada has done a similar thing with adidas’ iconic Stan Smith tennis shoes. Balenciaga with their Speed Sock looks like a mix between Nike’s flyknit football boots and the Nike Footscape sole.
Luxury has traditionally reflected status. Goods of a superior nature that the ‘wrong sort’ of people would never be able to afford. Luxury then became a symbol that you’d made it. In Asian markets, particularly China, luxury became a tool. People gifted luxury products to make relationships work better. It also signified that you are the kind of successful business person that partners could trust. You started to see factory managers with Gucci man bags and premium golfwear to signal their success. Then when the scions of these business people and figures in authority were adults, luxury has become about premium self expression.
Hong Kong Stock Market filing – the Company (China Renaissance Holdings – *added this for clarity) has been unable to contact Mr. Bao Fan (“Mr. Bao”), Chairman of the Board, Executive Director, Chief Executive Officer and the controlling shareholder of the Company. The Board is not aware of any information that indicates that Mr. Bao’s unavailability is or might be related to the business and/or operations of the Group which is continuing normally (PDF) – Bao Fan has been incommunicado for a number of days. He is not responding to messages. While its unusual and considered bad practice having the same person as chairman and CEO, in China its more common. So Bao’s dual role at China Renaissance Holdings isn’t unusual. But that is the least of the worries that western investors will have about China Renaissance Holdings at the moment.
Meituan delivery workers waiting for the food to be prepared
Some thoughts:
China Renaissance Holdings has been involved in funding some of China’s biggest technology companies including Didi (think of Lyft or Uber as a western analogue) and Meituan (Deliveroo, Doordash or Just Eat equivalent.
Didi in particular seems to have gained the wraith of the Chinese government. Some of this feels to be down to sexism due to the company having a connected female president Jean Liu. The party leans more toward the Andrew Tait school of feminism
Mr Bao Fan’s disappearance evoked memories of Jianhua Xiao and his company Tomorrow Holdings. Xiao was snatched and smuggled out of his apartment in the Four Seasons in Hong Kong back in 2017. Xiao for a few years all that people knew was that he was wheeled out of the hotel asleep in a wheelchair despite having a security team. He then spent a few years ‘helping‘ authorities unwind his business Tomorrow Holdings. Finally, he got sent to prison for 13 years with charges including embezzlement and fraud. If this happens with China Renaissance Holdings, or any of the prominent companies that it has as clients like Meituan there would be a shockwave, even through the most pro-China of foreign investors like Bridgewater Capital or Goldman Sachs
Bao Fan is one of several executives who were disappeared for a while. The most prominent executive who disappeared from the public eye was Jack Ma. Ma then stepped back from his businesses. If Bao steps back from China Renaissance Holdings, the Chinese tech sector will lose an investment rainmaker. China Renaissance Holdings maybe unwound or its assets handed over to state-owned banking institutions
What happens next will likely impact western sentiment towards Chinese investment in the short to medium turn, but financial institutions are still seduced by the ‘Chinese opportunity’. And the smart money this time might be wrong
Patriotic Alternative wasn’t a name familiar to me when I first heard about them instigating a riot in Liverpool on Saturday night. It doesn’t take that much to create a ruckus in some of the poorer areas of Liverpool.
I wasn’t particularly surprised by the burnt out police van; it sounds like a Merseyside Saturday night that went a bit out of control. That’s as Liverpudlian as a fried breakfast served in a ‘bin lid’ – a large white bun or bap large enough to contain bacon, sausage, a fried egg or two and brown sauce.
But there were aspects that did surprise me and all signs point to Patriotic Alternative. It’s a multi-cultural city, everyone has relatives abroad whether its extended Irish family, West Indians or deep connections within the Chinese diaspora. Which is why I was surprised that Patriotic Alternative managed to stir up so much trouble against an asylum hotel in the Knowsley area of Liverpool.
The city does have a certain degree of prejudice; primarily sectarianism. Its one of the few areas in England that has a marching season rather like Northern Ireland with an Orange Order parade held annual in Southport back when I lived up there. But Knowsley was something else. Patriotic Alternative managed to do something that I never thought was possible in cities like Liverpool or Bristol.
So reading about the event and the role of Patriotic Alternative in Dazed was an eye opener. It portrayed a city that I no longer recognised. Patriotic Alternative apparently organised the protest on a Telegram channel. What Dazed claim happened is that mainstream political statements and mainstream media coverage created an environment ripe for trouble makers like Patriotic Alternative.
According to Hope Not Hate, Patriotic Alternative shared members with prescribed far right organisation National Action. For an organisation that has a couple of hundred core members Patriotic Alternative has an outsized footprint. This footprint seems to be driven by the Patriotic Alternative Telegram channel with some 5,000 followers
Consumers in the 1970s on the changing nature of growing old, unfortunately attitudes and biases haven’t improved in the last 50 years.
Economics
US chip packaging firm Amkor closes its Shanghai plant for a week amid global market downturn | South China Morning Post – this is signalling a recession, as was AP shipments to Chinese smartphone brands stay in decline in 1Q23, says DIGITIMES Research – Fourth-quarter 2022 smartphone application processor (AP) shipments to China-based smartphone vendors amounted to 137 million units, plunging 24% from the prior quarter and 20.3% from the prior year, and will continue to experience a double-digit decline in the first quarter of 2023, according to figures from DIGITIMES Research’s latest report covering smartphone AP shipments. Because of shrinking demand and high smartphone inventory at the channel in both China and emerging markets, AP shipments to China-based smartphone vendors had already experienced on-year declines for five consecutive quarters
How China Fell In Love With Cheap Wine | Sixth Tone – reminds me of my time working on the Bordeaux wine marketing board as an account at the agency I worked for in Hong Kong. The work was focused on mainland China and promoted Bordeaux as a lifestyle brand for wine consumption rather than just gift giving
Massachusetts Democratic organ donation proposal sounds like prisoner organ harvesting. | Slate – Democratic state representatives Carlos González and Judith García introduced legislation that would allow incarcerated people to go home early—if they “donated” their organs. Specifically, the bill would “allow eligible incarcerated individuals to gain not less than 60 and not more than 365-day reduction in the length of their committed sentence” if they “donated bone marrow or organ(s).” Gonzalez argued that the bill was a step towards advancing racial equity in health care and making it easier for people of color to obtain transplants.
Hong Kong
The Hong Kong government must break its habit of relying on property developers | South China Morning Post – the article itself isn’t that interesting, but the author is. Regina Ip would be what the conservative party in the UK would call a big beast. She is a former minister level politician in the pro-China camp. Add to this the fact that despite mainland Chinese companies now outnumber local and foreign firms in Hong Kong and the economy is in decline. I expect Ip’s op-ed to be the tip of an iceberg of a shift in economic drivers that will occur sometime after John Lee leaves office. The clock is ticking on the big five families to diversify their wealth out of Hong Kong and China, following Jardines example to go into Indonesia might be a prudent start
Hong Kong reopens with post-Covid charm offensive | Financial Times – Johannes Hack, president of Hong Kong’s German Chamber of Commerce, who sits on a new task force to promote the city, said a “long-haul” effort to change business perceptions would have to go beyond plane ticket giveaways. “If you have relocated corporate functions to another place, half a year later you are probably not going to reverse the whole thing,” he said. “People who have moved to Singapore with their teen kids, there is no way they are going to do that again . . . They are not going to come back.” – feeds into the ‘its just another city in China now’ narrative
UK universities starting to lose allure for Chinese | News | The Times – well that’s screwed the Ponzi scheme that universities have engaged in via over-priced student accommodation real estate investments for reasons that aren’t exactly clear given their ownership structure and charters
Japanese fashion magazine Popteen ends physical version, switches to web installments instead – move to online only and moving away from monthly updates. Popteen ended its physical publishing as of February 1, 2023, with the February 2023 edition (released on December 28, 2022) being its last. web-based articles will be released on the first and the 15th of every month, known as “Popteen media”, and full editions of the fashion magazine will be updated a few times annually. The main reason for switching to the web edition was to make the magazine more accessible to middle and high-school students, who may not receive an allowance or be able to work part-time to afford physical copies of Popteen
Great video on microchip counterfeiting and recycling. The Japanese are doing some of the best work authenticating chips. Also if its bad for US defence contractors, just imagine how bad it will be for the sanctioned Russian defence sector.
Seeing for the Sightless – Luo, 26, suffers from congenital cataracts and is pursuing a degree in acupuncture and massage therapy at a college in Beijing. He needs help on the scales as there is no voice assistant function at the training center. On a mobile app called Be My Eyes (BME), he sends out a video call. Pointing his phone camera at the scales, he asks, “Hello, can you read the number for me, please?” A volunteer on the other end tells him, “91 kg.” Luo says thanks and hangs up. Usually, these exchanges only last a few seconds. Being tech savvy, Luo wrote a program back in high school to help the visually impaired memorize English vocabulary, something he himself struggled with. The app would randomly pick a word from a list he composed and he would spell it out after hearing the word. BME, developed by Hans Jørgen Wiberg, a visually impaired man from Denmark, drew Luo’s attention as soon as the Android version was available in China in 2017. Currently, there are 445,000 visually impaired users from all over the world and more than six million volunteers on BME.
Style
Adidas Tumbles as Losses From Its Kanye West Venture Pile Up – The New York Times – interesting how badly Ivy Park is doing and this on their business in China: Adidas in China: a brand seeking its redemption – In the second half of 2022, Adidas CEO Kasper Rorsted estimated losses of revenue of more than 35% in the Chinese market. He declared that such a violent drop was caused by some mistakes. For instance, the struggle of keeping up with the local brands, the failed recovery after the zero-covid policy, and the scandal of Xinjiang cotton.After the winter Olympics, the trend of Guochao, or the “national trend”, started to develop. More young Chinese consumers prefer buying local brands rather than western sportswear brands. In August 2022, the local firm, Anta, overtook Nike and became the biggest sportswear brand in China with a revenue of more than USD3.79 billion. Li-Ning, another Chinese firm, also registered revenue of USD1.76 billion against Adidas’ USD1.72 billion, pushing the German brand out of the podium. The zero-Covid policy has been a big problem for Adidas. In 2022, the company had to deal with closed shops and rising costs. In particular, the general lockdown which paralyzed China for the last few years resulted in the desegregation of the complex system of supply chains built up by the German brand. The disrupted supply chains cost Adidas a loss of USD427 million in the first quarter of 2022.
SMIC expects 10-12% revenue drop in 1Q23 | DigiTimes – China-based pure-play foundry Semiconductor Manufacturing International (SMIC) expects to post a revenue decline of 10-12% sequentially in the first quarter of 2023, with gross margin falling further to 19-21%.
MotherDuck: Big Data is Dead – Jordan Tigani spent ten years working on Google BigQuery, during which time he was surprised to learn that the median data storage size for regular customers was much less than 100GB. In this piece he argues that genuine Big Data solutions are relevant to a tiny fraction of companies, and there’s way more value in solving problems for everyone else. I’ve been talking about Datasette as a tool for solving “small data” problems for a while
Is nepotism really that bad? | LinkedIn – Jed Hallam wrote an essay on nepotism and the effects that he perceives it as having on inequality. Jed tries to steer a line on nepotism somewhere between recognising that the people may have an interest and talent, whilst pointing out inequality related issues derived from nepotism. Nepotism itself is widespread, whether its impact is small or large.
Jed is concerned that nepotism can actively remove opportunities for less conventional candidates that may do better if assessed solely in merit.
Social, cultural and economic barriers
Even if nepotism disappeared, our unconscious desire to hire people more like us, can mean that candidates face challenges in social, cultural and economic realms. I don’t drink, don’t have an interest in rugby union or football. I knew no one down here and sold my car to pay my first month’s rent when I moved to London. The analogy of a viking burning his boat behind him would be apt. I didn’t, and couldn’t if I wanted to, move to London earlier than my late 20s. I had to put myself through university and build up a modest amount of money to back myself as my parents didn’t have any.
One aspect of Jed’s essay on nepotism particularly surprised me:
“the proportion of people from working-class backgrounds operating in the creative industries has more than halved since the 1970s–falling from 16.4 percent to just 7.9 percent”
The problem with nepotism is that its hard to define and work out the difference between good and bad nepotism. For instance:
I line managed some one who had gone to Harrow and had found it harder to get into a creative agency because he was considered to be too posh by interviewees. He since went on to work successfully for other agencies, inhouse at a well loved brand and now runs his own shop
Would someone following on into the family profession be a case of nepotism? A classic example from the creative industry would be Thomas Bangalter of Daft Punk, whose father is disco producer ‘Daniel Vangarde’ aka Daniel Bangalter. One could imagine how being exposed to music and a studio environment from an early age made Thomas the kind of producer he was.
Or the Arnault children taking roles in LVMH? European business often rely on intergenerational family ownership and management
Nepotism is more obvious when you have events like the recent US college scandal. The problem with debate about any hot subject like nepotism is the lack of room for nuance and good judgement. A second aspect to it is making people feel like victims of nepotism and inequality, rather than encouraging striving. Admittedly that is even made harder to do when inequality that underpins nepotism has become much more extreme.
People look for easy solves and clear lines for issues like nepotism, when what we really need are better decision making and good judgement.
Nepotism unresolved
There will always be people who feel hard done by, it wasn’t them it was X external factor. Sometimes it isn’t your time, or you didn’t make clear how good you were. Equal opportunity doesn’t equate to equal outcomes, the case in point that nepotism can learn from is currently going through the US Supreme Court. In an age of algorithmically filtered CVs I can see nepotism become attenuated rather than resolved.
V Shanshan, “Why are you Forcing me to Embrace Solidarity?” – Reading the China Dream – Weibo post from someone whose uncle had died from complications from covid the previous day, writing to express his anger and bitterness at the hectoring calls in China’s official media to “come together” and “look to the future” as China decides to live—and die—with covid. That such calls ring hollow for many Chinese makes perfect sense, since China’s mighty messaging machine seems to have turned on a dime, suddenly arguing that Omicron is no big deal and that “everyone is responsible for their own health” after insisting for years that the virus is deadly and that collective behavior was the only way to control it
A Place for Fire – The Paris Review – the primal draw of fire in the home. This reminded me of the central role of the turf and wood fuelled range in the Irish farmhouse where I spent a good deal of my childhood
Project MUSE – The Surge of Nationalist Sentiment among Chinese Youth during the COVID-19 Pandemic – Since 2012, Beijing has been promoting a strain of populist nationalism which underscores both the institutional superiority of the ruling party and the cultural superiority of being Chinese. At the international level, however, the image of both the regime and the Chinese has been marred due to the coronavirus (COVID-19) outbreak in Wuhan (December 2019–January 2020). This study examines the extent and the form that the surge in nationalist sentiment of Chinese young people has taken during the COVID-19 pandemic. Based on a questionnaire survey of 1,200 students from a sample of 20 colleges/universities in China (June–July 2020), this study shows that the respondents express high satisfaction with the state’s performance in tackling the pandemic, and that there is a substantial surge of nationalist sentiment with a high level of hostility towards other nations (e.g. the United States). Such nationalist sentiment, however, is found to express a bifurcated pattern in that young Chinese also tend to embrace the opportunity to work and study in the Western societies they ostensibly dislike – yeah, is it smart to let them in though, given Chinese laws obligating them to cooperate with the MSS if requested?
Project MUSE – Living with the State-Led Order: Practical Acceptance and Unawareness of the Chinese Middle Class – China’s expanding middle class is often found to support the regime and lack democratic aspirations. We find that one section of the middle class depends upon the state for jobs and other material benefits, and the other works for the private and foreign sectors of the country’s economy. Once separated as such, we found that the non-state middle class clearly shows lower support for the regime. Furthermore, unlike the state middle class, which registers lower democratic support, the non-state middle class shows a similar level of democratic support as other social classes. In general, however, while only pragmatically accepting the current order, both middle class groups nonetheless appear lacking practical knowledge and understanding of liberal democratic institutions such as free media and multiparty elections. The unforthcoming attitudes toward democracy might also derive from a general sense of fearing the loss of order and the other related uncertainties
Economics
The true priorities of the global elite – by Judd Legum – The New York Times’ Peter Goodman, author of “Davos Man” — a blistering criticism of the WEF and its neoliberal ideology — recently offered this brief description: The World Economic Forum is not a secret government or organized conspiracy. It is a giant business meeting, a chance for the heads of multinational oil giants to sit opposite Persian Gulf potentates — fronted by the performance art of earnest panel discussions aimed at solving the problems of the day. More than anything, Davos is a prophylactic against change, an elaborate reinforcement of the status quo served up as the pursuit of human progress. Tuesday’s WEF program included a panel with Senators Kyrsten Sinema (I-AZ) and Joe Manchin (D-WV). The pair shared an on-stage high-five in celebration of the filibuster, which has been used to block increases in the minimum wage, protections for voting rights, and efforts to maintain access to reproductive health care.
German tank manufacturer’s warning puts pressure on Ukraine’s allies | Ukraine | The Guardian – Battle tanks from German industrial reserves wanted by Ukraine will not be ready to be delivered until 2024, the arms manufacturer Rheinmetall has warned, increasing pressure on Nato allies to support Ukraine with armoured vehicles in active service instead, ahead of a key meeting this week.“Even if the decision to send our Leopard tanks to Kyiv came tomorrow, the delivery would take until the start of next year,” Rheinmetall’s chief executive, Armin Papperger, told the Bild am Sonntag newspaper. Rheinmetall, which manufactures the battle vehicle’s gun, has 22 Leopard 2 and 88 older Leopard 1 tanks in its stocks. Getting the Leopard tanks ready for battle, however, would take several months and cost hundreds of millions of euros the company could not put up until the order was confirmed
Macau gaming: Chau’s jail term warns punters and investors alike | Financial Times – It is worthwhile considering this in part of the wider picture of how China is trying deal with capital flight. It also chimes with efforts to move Hong Kong from being about ‘wealth management’ i.e. schemes to allow capital flight out of the mainland to the west to trying to pull in western money to invest in Chinese businesses. Macau was part of that process too.
Expect a clampdown on insurance policy sales people. At the moment a lot of them sell these things via WeChat with a view to providing financial services to mainlanders in a similar way to what daigou do with luxury goods from abroad. I know work at home mums that do this for Prudential as a side hustle
Auction houses have expanded like crazy in Hong Kong during the pandemic and I would expect the authorities to look at how they can shut this off or use to only import items into China rather than having them leave again. I wouldn’t be surprised if they are strongly encouraged to shutdown in Hong Kong and up up in Sanya on Hainan island instead so they stay inside the yuan firewall
Expect pressure on foreign banks on wealth management / capital flight vehicles. There maybe some latitude through mainland banks where the government can monitor the flow through back-end access into their systems
Ultimately, Singapore will be the new Hong Kong – which is happening already due to ‘run culture’ and a plethora of wealth management and family office services being provided.
Hong Kong’s financial hub is at a crossroads | Financial Times – Look for a senior job in Hong Kong these days on LinkedIn and you’re unlikely to find any openings unless you’re a speaker of Cantonese or Mandarin, or both. “That’s a big change,” confides a longtime British expat in the territory. “It’s understandable. But it’s a big change.” The evolving jobs market is just one of the visible signs of the tilt to mainland China that promises to redefine Hong Kong’s role as a global financial centre. Beijing’s growing influence on the former British colony — evident in four years of security crackdowns and tough Covid lockdowns — has raised existential questions about the sustainability of the territory’s role as Asia’s unparalleled bridgehead to global finance – yeah soon even the finance bros will go
Japan was the future but it’s stuck in the past – BBC News – Japan had emerged from the destruction of World War Two and conquered global manufacturing. The money poured back into the country, driving a property boom where people bought anything they could get their hands on, even chunks of forest. By the mid-1980s, the joke was that the grounds of the imperial palace in Tokyo were worth the same as all of California. The Japanese call it the “Baburu Jidai” or the bubble era. Then in 1991 the bubble burst. The Tokyo stock market collapsed. Property prices fell off a cliff. They are yet to recover. A friend was recently negotiating to buy several hectares of forest. The owner wanted $20 per square metre. “I told him forest land is only worth $2 a square metre,” my friend said. “But he insisted he needed $20 a square metre, because that’s what he’d paid for it in the 1970s.” Think of Japan’s sleek bullet trains, or Toyota’s “just-in-time” marvel of assembly-line manufacturing – and you could be forgiven for thinking Japan is a poster child for efficiency. It is not. Rather the bureaucracy can be terrifying, while huge amounts of public money are spent on activities of dubious utility – this says more about the persons values than about Japan. Also coming from Britain’s public broadcast service, it is ironic that Japan is at the centre of many critical global supply chains and Britain is being stripped out of them. A bit of introspection is required
Luxury Brands Beware: Angered Chinese Tourists Are Avoiding Japan And South Korea | Jing Daily – South Korea issued yellow tags for China’s inbound travelers to wear at its airports, and Japan followed suit, giving red tags to passengers coming from the country. The initiative has elicited outrage online. On Weibo, the hashtag “Japan issues red tags to mark Chinese travelers” has gathered 200 million views, becoming the fourth most trending topic at one point. Many Chinese travelers complained that they not only had to pay for COVID tests and potential quarantines in subpar conditions upon entering South Korea but also had to wear a yellow tag on their necks to identify themselves as coming from China for special inspection at airports. The tags, along with South Korean reporters snapping photos at them, made them feel like they were criminals being transferred
Good to see that we’re finally beyond the 3D printing hype bubble and its true benefits can be appreciated. This article is a good run down of the pros and cons of 3D printing in an industrial setting. In some ways it reminds me of the ‘manufacturing cells’ concept were a computer controlled machine tool with switchable tool faces would do multiple jobs and process multiple types of products in small batches.
Not all manufacturing is true Fordian production lines. Just in the same way that digital printing has been good for small run books and catalogues or printing on demand; yet ‘traditional printing’ is still used for bigger print runs – additive manufacturing will be alongside traditional manufacturing processes.
Chinese Celebrities’ Political Signalling on Sina Weibo | The China Quarterly | Cambridge Core – Recent studies have revealed how the state disciplines and co-opts celebrities to promote patriotism, foster traditional values and spread political propaganda. However, how do celebrities adapt to the changing political environment? Focusing on political signalling on the social media platform Sina Weibo, we analyse a novel dataset and find that the vast majority of top celebrities repost from official accounts of government agencies and state media outlets, though there are variations. Younger celebrities with more followers tend to repost from official accounts more often. Celebrities from Taiwan tend to repost less than those from the mainland and Hong Kong, despite being subject to the same rules. However, the frequent political signalling by the most influential celebrities among younger generations suggests that the state has co-opted celebrity influence on social media to broadly promote its political objectives
Macs In the Enterprise: A Cisco Case Study – Creative Strategies – Despite extremely high desire from employees to use Macs (66% according to a study we did last year), most IT organizations keep the Mac users in their organization at arm’s length. Offering true platform of choice matters when it comes to employee experience and employee satisfaction with their workplace, tools, and IT departments. This is exactly what Cisco found when they studied internal employees. A Cisco report on IT satisfaction of employees found satisfaction to be significantly lower when employees were not offered their platform of choice in a laptop – this bullshit has been going on my entire career, HR departments are a major issue as well
I subscribe to all kinds of weird and wonderful newsletters to get content for these posts, the idea of a Ukraine beta test was inspired by this post on SOFREP: Combat Sandbox: Ukraine’s ‘MacGyver Army’Tests Western Weaponry | SOFREP. SOFREP is written a self-described team of a team of former military, intelligence and special operations professionals. While some of their stories are repeats of tabloid fantasies: UK Apache helicopter gunships for Ukraine, they also provide some smart editorial thinking.
Western military ideas were designed to run against Russian and Chinese campaigns. The Ukraine beta test seems to have failed for Russia’s hybrid warfare concept, when it was executed on a large scale basis. Russia were trying to execute on an idea first outlined by an American theorist Frank Hoffman in his work Conflict in the 21st century: the rise of hybrid wars for a think tank. The Russians themselves call it ‘non-linear warfare‘. After careful preparation, Russia used non-linear warfare to capture Crimea and parts of eastern Ukraine in 2014. On the surface of it, a successful Ukraine beta test for Russia. Yet 7 years later on a larger scale approach Russia failed and is having to go back to older ways of doing things.
Part of the Ukraine beta test works because of the Ukrainians and everything that they have on the line. Part of it was down to better tactics by Ukraine compared to Russia and at least some of which was down to the use of western weapons systems used in an innovative way.
There has since been a Ukraine beta test of western military ideas:
Delta is a system for collecting, processing and displaying information about enemy forces, coordinating defense forces, and providing situational awareness according to NATO standards, developed by the Center for Innovation and Development of Defense Technologies of the Ministry of Defense of Ukraine, founded in 2021 at the base of the A2724 military unit, which, in turn, was created in 2015 from the volunteer group Aerorozvidka.
Delta is used for planning operations and combat missions, coordination with other units, secure exchange of information on the location of enemy forces, etc. In particular, Delta has integrated chatbots developed by the Ministry of Digital Affairs – “eVorog” and the Security Service of Ukraine – “STOP Russian War”.
The system is equipped with modern means of monitoring suspicious activity. From 2021, allied cyber units are constantly scanning the system for vulnerabilities, intrusion attempts, data leaks, and more.
According to the developers, Delta provides a comprehensive understanding of the battle space in real time, integrates information about the enemy from various sensors and sources, including – intelligence, on a digital map, does not require additional settings, and can work on any device – laptop, tablet or even on a mobile phone. Roughly speaking, Delta is such a modern real-time command map and troop control center
It has taken years for western powers to build comparable systems. Delta is powered by a mix of human intelligence, Ukrainian open source intelligence and also includes NATO electronic intelligence and satellite imagery. Integration of NATO for Delta is a Ukraine beta test in itself. NATO will learn from the successes and challenges of Delta. At a tactical level the idea of a Ukraine beta test shows how well weapons systems work under real-world ‘near peer’ war conditions, giving them valuable understanding of what systems are most effective against Russian systems.
The Ukraine beta test shows where the gaps are in NATO systems. For instance the Gepard tank is a short range anti-aircraft system phased out by Germany a decade ago, that has shown the value of similar gun based systems against drones and low flying aircraft as a cost effective method to engage.
All of which makes me wonder why the arms industry aren’t taking the obvious step and ‘donating’ trial systems to the Ukrainian military for a Ukraine beta test to show their mettle and value to western clients? The closest that we’ve seen to this is the GLSDB. The GLSDB is an existing Boeing bomb mated to recycled rocket motors. But the arms industry could do so much more as part of a Ukraine beta test.
China
The politics of China’s Belt and Road workers in Africa – Asia Times – strong empirical evidence that democracies host significantly fewer Chinese workers than autocracies, all other things being equal. The results hold up using a variety of different statistical modeling techniques. In Ghana, a vibrant democracy, we found that both the country’s main political parties faced pressure to ensure that Chinese-built projects delivered local jobs. For example, in the construction of the Bui Dam, the agreement between Sinohydro, the Chinese state-owned behemoth contracted to complete the project, and the Ghanaian government stipulated that a certain proportion of the workforce would be local. In Algeria, on the other hand, Chinese labor has been used to quickly complete projects seen as politically expedient. Algeria is a “hybrid” regime that was ruled by a single man, Abdelaziz Bouteflika, from 1999 to 2019. Even when domestic discontent over Chinese workers prompted measures to limit their presence, the measures were not implemented. Our findings have several important implications. First, host country agency is important. Host governments have the ability to ensure Chinese companies hire locally. Second, projects that hire locally may bring more long-term economic benefits to host countries. This can happen both directly through the jobs that they create, and via knowledge and technology transfers into the wider economy. Our analysis, therefore, suggests that the wider developmental benefits of Chinese-built infrastructure may actually be stronger in democracies than in autocracies
China is flashing red on the skewed consensus indicator | Financial Times – The only strong standout finding is on China, around which a strength of current optimism has no offset. Morgan Stanley didn’t think to even offer one. It’s a Goldilocks scenario with no bears – this doesn’t make sense. Wall Street seems to have an irrational belief in China as a market. For example: China moves to take ‘golden shares’ in Alibaba and Tencent units | Financial Times – expect this is to be about more than censorship. More like military – civil fusion – also likely to have big implications for media engagement on social platforms
Ryanair unsure if softening in UK demand here to stay – “There’s no doubt that the UK economy by any stretch of the imagination, in terms of going into recession or whatever, is different than the other European economies,” – interesting that they are concerned about travel overall rather than thinking about a pivot to them from BA etc
Is this the end of the bachelor pad? – The Face – the bachelor pad has been gobbled up by the economy. Nearly a third of 20 – 34-year-olds in the UK are living at home with their parents. I did feel a bit triggered by the author’s dismissal of stainless steel as a material and good quality furniture like an Eames lounge chair as being emblematic of toxic masculinity. But the economic points are very valid
Mainland rush to return to Hong Kong, Macau post zero-Covid nears 1 million | South China Morning Post – travel demand has been growing since China relaxed its border restrictions in December, with around 998,000 mainland residents applying for travel documents to Hong Kong or Macau, and 353,000 people applying for a new passport – expect Hong Kong fatalities to surge. Hong Kong has an even older population than mainland China. There is a corresponding low vaccination rate amongst them, partly down to vaccine distrust due to often Chinese orchestrated misinformation
Wokeness as prairie fire – by Noah Smith – Noahpinion – Anyway, with all that said, the point of this post is that wokeness’ role in American society is evolving as we move into the early 2020s. In particular, I see three simultaneous trends:
An increasing anti-woke pushback from conservatives
Increasing entrenchment of woke ideas and practices within liberal institutions
A general exhaustion with wokeness among thought leaders and young people
Who Are You Calling a Great Power? – Lawfare – trying to define great power status is difficult in ways that are evident from the mismatched assortment of candidates that emerge in the recent literature. Power varies across issues and domains in ways that are glossed over when international politics is reduced to great power competition. It can be a convenient shorthand, but policymakers should not lose track of the nuances: Who counts as a great power may vary from issue to issue
Saudi Aramco bets on being the last oil major standing | Financial Times – What is often forgotten is how oil is also needed as a feedstock for materials. You want electric batteries they need a plastic based insulator and cables need plastic insulation. Mercedes et al tried soy plastic based cable insulation in the late 1990s and the wiring looms of these cars have had to be remade. All of which will be needed if you want a LiON or hydrogen economy. Then there are seals, bushings, coatings, medicines etc all of which rely on hydrocarbon feedstocks. Oil isn’t just about carbon emissions. Aramco is being prescient about this, Companies like Shell etc are increasingly looking at plastics manufacturing for exactly the same reasons
Lidl, Zara’s owner, H&M and Next ‘paid Bangladesh suppliers less than production cost’ | Retail industry | The Guardian – Lidl, Zara’s owner Inditex, H&M and Next have been accused of paying garment suppliers in Bangladesh during the pandemic less than the cost of production, leaving factories struggling to pay the country’s legal minimum wage. In a survey of 1,000 factories in the country producing clothes for UK retailers, 19% of Lidl’s suppliers made the claim, as did 11% of Inditex’s, 9% of H&M’s and 8% of Next’s. A majority of suppliers of those four brands, and also of Tesco and Aldi, told researchers that almost two years after Covid-19 was declared a global pandemic they were still being paid at the same rate – despite soaring raw material and production costs in the interim
EU draws up plans to stockpile scarce medicines | Financial Times – “a systemic challenge with numerous vulnerabilities”, including overreliance on a few countries for certain products, and the way drugs are regulated and bought. The EU’s Health Emergency and Response Authority (Hera), established in response to the Covid-19 pandemic, could organise joint procurements for several countries to improve supply. Health commissioner Stella Kyriakides outlined the plan in a reply to Greek health minister Thanos Plevris, who had demanded action in a letter to her last week. “There is a shortage in certain branded drugs containing paracetamol, antibiotics and inhalers . . . particularly for children,” Plevris said at a news conference last week where he announced a series of measures that would tackle the shortages. – because China
UK supermarket uses facial recognition tech to track shoppers – Coda Story – In July, civil liberties group Big Brother Watch filed a complaint to the U.K.’s Information Commissioner’s Office against Southern Co-op and Facewatch — the company providing the surveillance system. Joshua Shadbolt, a duty manager at the Copnor Road supermarket, told me that high levels of theft have forced him and his colleagues to hide, for instance, all the cleaning products behind the till. Without the technology, he fears customers would be given free range to steal. Since Covid restrictions were lifted in the U.K. in early 2021 following a third national lockdown, shoplifting has been on the rise. This is likely to have been compounded by a cost-of-living crisis. Still, even if theft has not reached pre-pandemic levels, for Shadbolt, the biometric camera has been an effective and necessary tool in tackling crime. For Big Brother Watch, the camera is a breach of data rights and individual privacy. Every time a customer walks into a shop or business that uses Facewatch’s system, a biometric profile is created. If staff have reasonable grounds to suspect a customer of committing a crime, whether it’s shoplifting or disorderly conduct, they can add the customer to a Facewatch list of “subjects of interest.” Facewatch’s policy notice says that the police also have the power to upload images and data to Facewatch’s system. Anyone uploading the data, which includes a picture of the suspected person’s face, their name and a short summary of what happened, must confirm that they either witnessed the incident or have CCTV footage of it. But the policy does not indicate what the bar for “reasonably suspecting” someone is.
Group B rallying was the stuff of my childhood. Its history was complex. In the 1970s the motorsport governing body FIA was in dispute with formula one team owners. As a result the FIA reformed one of its own committees related to formula one called CSI, in 1978, into the autonomous Fédération Internationale du Sport Automobile (FISA). This came under Jean-Marie Balestre. He was a former journalist and president of the go-karting association.
Reorganisation
Just a few years later, FISA re-organised racing and rallying standards. It replaced groups for unmodified and modified production cars. That was largely a like for like swap. Secondly it combined grand touring (sports cars) with a race circuit only production-derived special builds class into Group B.
Group B allowed really small production runs of really fast cars with only a superficial relationship (if any) to cars that could be sold in a showroom. Regulations had a generous minimum kerb weight and allowed rear wheel drive or four-wheel drive. Audi had just launched its Audi Ur Quattro which showed the potential of four-wheel drive in a normal car package. There was no restrictions on turbo-charged engines ‘boost pressure’ – allowing for small engines in a light car package with immense power.
1984
1984 was a crucial year for Group B, when the format would form its ultimate shape.
For the first few years Audi’s production derived Ur Quattro had won loose surface events and a rear-wheel drive Lancia 037 doing better on tarmac roads. Other manufacturers were bringing cars into the championship as well including Toyota, Porsche and Opel. Peugeot brought the first car that fully took advantage of the regulations. A two seater, four wheel drive, mid-engined car in a space frame. A slew of similar competitors followed the year after, including the Ford RS200. This was the stuff my dreams were made of. My exercise books covered in sketches – side profile designs of vehicles that would be optimised for Group B regulations.
The end
1986 saw a series of fatal accidents that would result in Group B being shut down for safety and PR reasons. This created the illusion of a safer sport, but the reality was that the body count peaked some three years later in 1989, due to the way rallies were organised back then and how South Europeans conducted themselves as spectators – playing chicken in the road, dropping rocks on the road to hinder non local drivers and trying to touch cars as they went by.
This is where Richard Madden (of Game of Thrones) short film comes in capturing the difficulties of a driver managing a Group B car and dealing with trauma.
Who are the rioters who stormed Brazil’s government offices? | Financial Times – many pro-Bolsonaro truckers blocked highways across the country, choking supply chains and at one point forcing the closure of Brazil’s main international airport. These hardline backers are nationalist, socially conservative and often evangelical Christians. They accuse Lula and his Workers’ party of being corrupt and against family values, claiming the left intends to implant socialism in Brazil.
The Nokia Risk | Phenomenal World – Denmark, Israel, South Korea, Sweden, Switzerland, and Taiwan a handful of firms account for a hugely disproportionate share of both profits and R&D spending. The firms which dominate these seven economies have all been extraordinarily successful in the knowledge economy of the past three decades: Samsung Electronics in Korea, Taiwan Semiconductor Manufacturing Co. in Taiwan, Novo Nordisk (pharmaceuticals) in Denmark, and Roche and Novartis (pharmaceuticals) in Switzerland
Dim Future for Hong Kong’s Rural Industries – Varsity – the government tends to avoid underutilised plots controlled by village gentries and land banks of property developers when it tries to resume lands for urban development. – Hong Kong oligarchs still have some pull for the time being
Why Beijing Wants Jimmy Lai Locked Up – The Atlantic – Beijing has weaponized the courts against its longtime adversaries—just as Chinese state media continues to promote Lai as the poster boy of everything nefarious in Hong Kong. For both purposes, Lai has a sufficiently high profile and is convincingly rich enough to have fomented a subversive uprising; and, amid the nationalist atmosphere that prevails in Beijing, Lai also had highly suspect foreign connections that reached close to the center of power in Washington, particularly during the Trump administration. By turning to its old playbook of assigning blame to a hostile force at home backed by support from abroad, the Chinese Communist Party is falling into a trap of its own creation. Given the sentences that Lai is likely to receive for his alleged crimes, Lai could very well be imprisoned for the rest of his life. In looking for a scapegoat, Beijing may find it has created a martyr.
Indonesia
The Liem family and The Salim Group and how crony capitalism busted Indonesia in 1997/8
Innovation
How Silicon Valley was build on the back of defence research
Interesting commentary on materials development and the role that the Apollo space programme played to create a chemical and materials science golden age that had applications in other areas.
Tory MP leads warnings over UK security after Chinese spyware ‘found in Government car’ – “If these SIM cards have been duplicitously installed, then this is CCP espionage. If the SIM cards are operationally standard, then it is a failure of security not to have removed them to protect the data of our Government and sensitive Government sites.” – I wouldn’t be surprise if it was the latter rather than the former
The Long War in Ukraine | Foreign Affairs – Western strategists have sought to preempt a military standoff in two ways. Some, such as the leaders of several Baltic countries, have called for arming Kyiv with more of the heavy weapons it would need to expel Russian forces from all Ukrainian territory; others, including Mark Milley, chairman of the U.S. Joint Chiefs of Staff, have suggested that Ukraine’s political leaders should consider a negotiated solution that falls short of complete victory but would at least end the fighting
Style
Lacoste moves to collective model as Louise Trotter exits | Vogue Business – The British designer joined Lacoste from Joseph, and previously worked at premium high street brands Whistles and Jigsaw. At Lacoste, she applied her creative vision to both Lacoste’s fashion shows and general collections, bringing “real consistency” across its designs, according to the brand. “She has also accompanied the shift initiated by Lacoste towards womenswear, imagining a new wardrobe combining comfort and style,” the statement reads. Lacoste’s last fashion show was in October 2021 for Spring/Summer 2022, for which Trotter drew inspiration from her passion for cycling. Sales reached €2.5 billion in 2022, according to the brand.
Taiwan
Taiwan plans domestic satellite champion to resist any China attack | Financial Times – “Our primary concern . . . is facilitating the societal resilience, to make sure for example that journalists can send videos to . . . international viewers even during a large-scale disaster,” Tang said, adding that the system would also support “telephoning and videoconferencing — think [Ukrainian president Volodymyr] Zelenskyy’s daily addresses.” Starlink, the mobile internet satellite constellation operated by Musk’s SpaceX, has helped Kyiv maintain communications with its forces despite Russian attacks
Technology
I wrote a story for a friend – by Julian Gough – I wrote the End Poem for Minecraft, the most popular video game of all time. I never signed a contract giving Mojang the rights to the End Poem, and so Microsoft (who bought Minecraft from Mojang) also don’t own it. I do. Rather than sue the company or fight with my old friend, who founded the company and has since gone off in the deep end, I am dedicating the poem to the public domain. You’ll find it at the bottom of this post, along with a Creative Commons Public Domain dedication.
