Looking back to when I started this blog, it would have been reasonable to expect an inevitable march of retailing from offline to online. Amazon was on a tear and search advertising volumes were increasing year on year. By the time I was at Yahoo! search advertising (focused on online retailing) counted for about half of all revenue for the company.
At that time Yahoo! had a Spotify-like subscription streaming music service that was viewed as a threat to Apple’s iTunes download only offering. When I worked there Yahoo Music was the number one online music site in terms of audience reach and total time spent by consumers on the site. Also display advertising was much bigger for brands than it is today and Yahoo! was guaranteed a good share of the online marketing spend from any movie launch at the time.
The reality of online retailing, was slower than our expectations. While COVID drove an increase in online retailing there has also been corresponding innovations in retailing as well.
Amongst the pioneers in this change have been luxury brands like Burberry and Nike, who brought digital into their stores to provide a superior customer experience.
Adidas brought manufacturing into its stores with its speedfactory experiment, allowing for fast time to market and customisation.
Supreme changed the cadence of retailing with the Thursday morning ‘drop’ which saw queues outside stores. Every Thursday became a launch day as far as their customers where concerned. The queue has moved from Apple’s annual cadence, to every week.
Ernest Shackleton, the Irish explorer and the heroic age of antarctic exploration are evoked in Apple’s ads for its Apple Watch Ultra – a rival to Casio’s G-ShockMaster of G range and the Protrek range, Seiko’s similarly named Prospex range and Citizen’s Promaster range of watches.
https://youtu.be/tidgsqAf_tI
The underlying dialogue uses the text to a newspaper advert attributed to Shackleton when he was looking to recruit crew members for his ship the Endeavour. The Endeavour expedition competed with the rival Roald Amundsen’s expedition to reach the South Pole.
The monologue also reaches back to the way Apple did its Think Different brand campaign rather than the kinetic iPhone, iPod and iWatch ads of the past.
Men wanted for hazardous journey. Low wages, bitter cold, long hours of complete darkness. Safe return doubtful. Honour and recognition in event of success.
The reality is that the ad didn’t become widely known until decades after Shackleton had died. There is no evidence to suggest that he ever wrote the words (stirring though they are in nature), or that the advert was ever published by Shackleton.
Instead of Shackleton, who then wrote the words attributed to him? We’ll probably never know. What we do know is that they were first published in a book published in 1959. The 100 Greatest Advertisements: 1852-1958 written by Julian Lewis Watkins and was first published by first published by Dover Publications, Inc. Whether it was Shackleton who wrote them or not, they went into popular culture and sparked additional interest in the Irish explorer. Shackleton died in 1921 when returned to the Antarctic with the Shackleton–Rowett Expedition, he suffered a fatal heart attack while his ship was moored in South Georgia. We don’t know whether Ernest Shackleton would have appreciated the Apple Watch Ultra as a technical marvel concocted by wondrous boffins, or a pointless exercise in frippery for the serious explorer.
Rolex Deepsea Challenge – a watch even more worthy of Shackleton?
I know a watch is special when my Dad is telling me about it as soon as it’s launched. Rolex has upgraded its Rolex Sea-Dweller Deepsea to create the Rolex Deepsea Challenge. Out goes the largely useless date window, in comes an an all titanium grade 5 alloy case that’s 50mm across. This means that the watch moves from being waterproof of a depth of 3,900 meters to 11,000 meters (or just over 6.8 miles) with the new Deepsea Challenge.
The Deepsea Challenge watch follows on from the years of experience that Rolex has had making titanium watches under its secondary Tudor brand using a similar (if not the same) grade 5 titanium.
Titanium Grade 5 is the most widely used titanium alloy. It has (relatively) good hot formability and weldability. It is resistant to salt water, marine atmosphere and a variety of corrosive media temperatures below 300 ° C. Grade 5 titanium alloy is most likely to be accepted by the human body – its hypoallergenic and ideal for medical transplant components like hip joints.
It is made up of 88.74-91.0 percent titanium, 5.5-6.75 percent aluminium, 3.5-4.5 percent vanadium and no more than 0.015 percent hydrogen.
There is obviously osmosis between the two brands in terms of innovation, materials, process and technologies. This also explains why Tudor tries to do innovative designs in its range rather than just digging into the rich seam of ‘heritage looking’ watches with the Black Bay, Ranger and Heritage Chrono models.
The watch community has already started spoofing the watch, which is another sign of it having become an icon. Whether it’s a famous icon, or infamous icon remains to be seen.
35th Tokyo Girl’s Collection
I talked years ago on this blog about the innovative approach to retailing behind the Tokyo Girl’s Collection. I came across their 2022 autumn and winter collection opening stage event, which I am sharing here.
https://youtu.be/vx4AzkAtD3o
USB-C
Apple on the EU regulating connectors to standardise on USB-C. The reason why Apple went to detachable cables on chargers is very interesting. Apple are reluctantly complying over USB-C. The discussion around innovation is really interesting, particularly the way in which Apple executives duck the question.
State capitalism has been created in various forms in China since opening up. Some of the new forms have aspects that impacts the relative attractiveness of doing business in or with Chinese companies.
Opening up
Historically since opening up China has been a mixed market model. There were small private businesses including many farmers. There was the state owned enterprises, a direct descendent of Mao’s work units and businesses that the government wanted to keep a strategic hold on.
Taken at an exhibition that was part of the Shenzhen Biennial, when I was there back in 2010
Grey zone and hybrid companies
Grey zone companies
A classic example of a grey zone company would be Huawei. In their 2019 paper Who Owns Huawei, Balding & Clarke make a convincing argument that Huawei is a state controlled company, if not state owned in the conventional sense. This view is supported by:
The state hacking of Nortel which Huawei disproportionately benefited from in their subsequent telecoms carrier contracts and 5G technology
State bank vendor financing on behalf of Huawei at negative interest rates that telecoms providers like BT and Vodafone were given
Zichen Wang translated a Chinese academic paper that pointed out an alternative view. Yes the ownership structure was a shit show, was pretty much the one point of agreement between the two papers.
But that much of this was down to domestic practice influenced by classic state capitalism and modern business law that China brought in and still doesn’t square up with what was happening on the ground in terms of business laws.
You can make up your own mind if this is an element of state capitalism.
Hybrid companies
An example of this would be the Stellantis | Guangzhou Auto Company joint venture that made Jeep branded SUVs for China. These joint ventures were basically the way the Chinese government coerced technology transfer from western firms to local firms. The Stellantis JV has gone into bankruptcy and GAC seems to have its own range of capable SUVs based on Stellantis expertise gained over the years.
Huawei’s joint venture with 3Com allowed the telecoms giant to build a large enterprise networking business to compete with the likes of Cisco Systems. At the time that China first rolled out its Golden Shieldinternet censorship platform, it relied on Cisco technology, and China would want to remedy this under its state capitalism system. Huawei now supports internet censorship around the world. This form of state capitalism has been common in a number of developing countries over the years, but China was particularly successful in using it in a coercive manner to enhance state capitalism rather than just driving economic growth.
Rise of the hybrid firm – Gavekal Research – Today, 48% of onshore listed companies, representing 67% of market capitalization, have a mixed bag of major shareholders from the private and state sectors. While many of those companies are still clearly controlled by either state or private shareholders, a large and significant group of firms occupies an intermediate position that is harder to characterize. – on China’s state capitalism system
How China’s communist officials became venture capitalists – Times of India – The US and other Western governments have long been wary of the economic power of China’s “state capitalism,” fueled by giant state-owned companies and an industrial policy driven by subsidies and government mandates. But policymakers need to pay more attention to what’s really propelling China’s growth: private firms with minority government-linked investments. “The distinction between state-owned and private has been important for policymakers outside China and for analyzing the Chinese economy,” says Meg Rithmire, a professor at Harvard Business School who specializes in comparative political development in Asia and China. “That boundary is eroding.” – see also Chinese banks vendor financing deals which is the real reason behind Huawei’s growth (alongside stealing IP and other proprietary elements: Nortel cough, cough)
Influenced firms
Influenced firms are a particularly pernicious part of the Chinese state capitalism system. The Chinese economy has always relied on relationships and even patronage of government power brokers similar to Malaysia, Thailand and Korea. But the state has looked to move personal bonds to state bonds. Much of this comes from National Intelligence Law 2017; that puts demands on Chinese citizens, Chinese companies and anyone connected to China.
Like the more widely reported Cybersecurity Law (which went into effect on June 1) and a raft of other recent statutes, the Intelligence Law places ill-defined and open-ended new security obligations and risks not only on U.S. and other foreign citizens doing business or studying in China, but in particular on their Chinese partners and co-workers.
Of special concern are signs that the Intelligence Law’s drafters are trying to shift the balance of these legal obligations from intelligence “defense” to “offense”—that is, by creating affirmative legal responsibilities for Chinese and, in some cases, foreign citizens, companies, or organizations operating in China to provide access, cooperation, or support for Beijing’s intelligence-gathering activities.
The new law is the latest in an interrelated package of national security, cyberspace, and law enforcement legislation drafted under Xi Jinping. These laws and regulations are aimed at strengthening the legal basis for China’s security activities and requiring Chinese and foreign citizens, enterprises, and organizations to cooperate with them. They include the laws on Counterespionage (2014), National Security (2015), Counterterrorism (2015), Cybersecurity (2016), and Foreign NGO Management (2016), as well as the Ninth Amendment to the PRC Criminal Law (2015), the Management Methods for Lawyers and Law Firms (both 2016), and the pending draft Encryption Law and draft Standardization Law.
For Young Chinese, Even State Sector Jobs Are No Longer a Safe Bet – the public sector hasn’t lived up to its reputation of being a safe haven. Nearly three years into the pandemic, many of China’s local governments are facing eye-watering fiscal deficits and implementing austerity measures. And those cuts are hitting civil servants hard. Wang had originally expected to earn at least 250,000 yuan ($34,600) per year at his new job. In reality, he estimates he’s being paid just 160,000 yuan. His basic salary has been cut by 30%; his social insurance payments haven’t risen as promised; part of his annual bonus has never been paid. Instead, Wang finds himself forced to work regular unpaid overtime shifts, helping to implement the town’s virus-control policies, and trying to cut back spending at home. His plans to trade in his boring SUV have been put on hold indefinitely.
Chinese ‘police stations’ in Canada under investigation | Hong Kong Free Press – there is a definite turning point around the illegal Chinese police operations against its diaspora. I expect United Front activities to be the next point of focus and you could see triad organisations treated less like organised crime and more like the paramiilitary or terrorist arm of the United Front
How the U.K. Became One of the Poorest Countries in Western Europe – The Atlantic – “Between 2003 and 2018, the number of automatic-roller car washes (that is, robots washing your car) declined by 50 percent, while the number of hand car washes (that is, men with buckets) increased by 50 percent,” the economist commentator Duncan Weldon told me in an interview for my podcast, Plain English. “It’s more like the people are taking the robots’ jobs.” That might sound like a quirky example, because the British economy is obviously more complex than blokes rubbing cars with soap. But it’s an illustrative case. According to the International Federation of Robotics, the U.K. manufacturing industry has less technological automation than just about any other similarly rich country. With barely 100 installed robots per 10,000 manufacturing workers in 2020, its average robot density was below that of Slovenia and Slovakia. One analysis of the U.K.’s infamous “productivity puzzle” concluded that outside of London and finance, almost every British sector has lower productivity than its Western European peers. Read alongside – What British politics looks like to the rest of the world – The Face TL;DR a joke that makes their country look good by comparison.
Japan cannot survive without Russian oil, warns trading house chief | Financial Times – Some analysts have expressed concern about Itochu’s heavy exposure to China through its 10 per cent stake in Citic, but Okafuji stressed that its risks were lower since its investment was in a government-owned company. “Currently, what they are doing in China is to move private assets from private companies to government-owned companies to reduce the gap between the rich and poor,” he said. “Our objective is to contribute to providing a prosperous lifestyle to the Chinese people, so I think the Chinese government welcomes that.” – I expect that the Chinese government and CITIC will tear the face off Itochu
Concerns mount over German Chancellor Scholz’s upcoming trip to China | Axios – it looks like there is a battle royale brewing between the German public and their large corporates. Add to this: Ports in a storm: Chinese investments in Europe spark fear of malign influence | South China Morning Post and Watching China in Europe with Noah Barkin – 55 percent of Germans believe he (Scholz) is out of his depth), deepens divisions in his government, and undermines its quest for a common European policy toward Beijing, a goal that was spelled out in black and white in the three-party coalition agreement. More worryingly, it shows that Scholz and his advisers still have a steep learning curve on China. Germany’s sway with Beijing depends on a united front in Berlin, in Europe, and across the G7. Scholz has managed to torpedo them all in the span of a few weeks. To be clear, the problem is not that Scholz is meeting with Xi. The party congress showed that Xi may be the only member of China’s leadership who is worth talking to these days. And it is normal for Scholz, who has been chancellor for nearly a year but unable to meet with Xi in person because of China’s restrictive COVID-19 rules, to want to sit down for a face-to-face with the country’s newly anointed leader for life. But the when, where, and how of this first meeting are important. And Scholz has whiffed on all three. The situation is reminiscent of his predecessor Angela Merkel’s decision, two years ago, to hurry through the EU-China Comprehensive Agreement on Investment (CAI) weeks before Joe Biden entered the White House. Like Merkel, Scholz is gifting Xi a geopolitical victory without much in return. And he is voluntarily sacrificing whatever leverage his government might have had with China. He may not realize that but members of his own government—some of whom have been working diligently for months on a new, tougher China strategy—are furious. “As long as the German chancellor doesn’t buy into his own government’s China strategy, then it is worthless,” one German official fumed. “The Chinese can see the divide in Berlin and Europe, and believe me, they will find a way to exploit it. It is absolutely fatal. And what is so stunning is that Scholz has done all of this of his own free will.”
Hong Kong
America’s Biggest Financial Firms Are Still Collaborating with the Sanctioned Hong Kong Government – After an increasing number of critics began to pile on, including the co-chairs of the Congressional Executive Commission on China Representative Jim McGovern and Senator Jeff Merkeley, a coalition of 20 U.S.-based Hong Kong activist groups, and the Wall Street Journal editorial board, Citibank’s Jane Fraser claimed that she had tested positive for Covid-19 and will pull out of the summit. The rest of these executives have only a couple of days to come down with similar illnesses or unexpected family commitments, but I’m not holding my breath and Hong Kong Summit Surrounded by Drama Before It Even Begins – Bloomberg – Top executives pull out after getting Covid; storm approaches. Event aimed at showing city is back in business after pandemic
9 in 10 marketers spend time in making global marketing locally relevant: report | Advertising | Campaign Asia – Marketers say local requirements are kept in mind by headquarters when making decisions, however, the majority (82%) feel they spend too much time educating HQ on Singaporean nuances and needs. 47% of marketing decision-makers in Singapore say that senior leadership in regional or global offices are misaligned with local marketing teams, there is a lack of local understanding of effective channels, and in some cases, there’s an assumption that a global approach will work across countries. Over a third (36%) of marketers believe in localising content for maximum ROI, however, the local tone, diversity and humour in campaigns is often not well understood by global offices teams.
– The departures mean Apple is losing at least three vice presidents — the highest manager level below Chief Executive Officer Tim Cook’s executive team — in recent weeks. Evans Hankey, Apple’s vice president in charge of industrial design, is also leaving the company, Bloomberg News reported earlier this month. Chief Privacy Officer Jane Horvath has departed Apple in recent weeks as well, taking a position at a law firm
Trio conduct 6G reconfigurable intelligent surfaces trials … – Reconfigurable intelligent surfaces can be programmed to modulate the phase of electromagnetic waves and reflect signals into blind spots, enhancing coverage and improving user experience. The low cost, low energy consumption and easy deployment, of RIS have attracted broad interest in 6G research and made it a popular candidate technology. The technical trial mainly evaluated the deployment effects and performance of sub6 GHz RIS and mmWave RIS in different indoor and outdoor scenarios. The tests modelled deployment conditions with and without RIS, different incidence and reflection angles, different deployment distances, etc. Recorded performance index parameters included RSRP, throughput and others. The trial participants worked together to carry out several RIS test projects yielding hard data that makes a strong argument in favor of continued RIS technology development.
Mobileye is an Israeli based business acquired by Intel. It specialises in advanced driver assistance systems (ADAS) and autonomous driving. Its EyeQ series chips are used by pretty much every volume car manufacturer. I don’t know if the US sanctions on China for semiconductors will impact Mobileye negatively. The Mobileye EyeQ debuted in 2008 in the BMW 7 series alongside the model’s first hybrid power plant, the first turbocharged petrol engine for the model series and the first time that it had used four-wheel drive. Modern semi-autonomous functions may require several Mobileye EyeQ processors in the one car.
Acquisition by Intel for EyeQ tech
Mobileye went public in 2014 and was acquired by Intel in 2017. The same year Mobileye published a mathematical model for safe self-driving cars. In January, Intel announced plans to retake Mobileye public with a sale of a minority stake of the business.
There’s a number of good arguments for the Intel move:
It allows engineers to be rewarded based on their work rather than on the overall group performance through Mobileye stock grants or stock options.
It allows the company to spread the risk of autonomous driving as a future area that might not take off. While ADAS services are here and valued, there are technological, legal, regulatory and consumer hurdles for autonomous driving to overcome:
Mobileye public offering represents trouble at Intel
However, the Mobileye public offering makes a lot less sense given the decline of the stock market since the start of 2022. It implies that Intel is desperate for a capital infusion, presumably to fund the rebuild of Intel’s technological prowess under Pat Gelsinger.
More content related to issues like self driving cars can be found here.
Islamic State Rhetoric Targets China | Foreign Policy – The linking of Chinese imperialism to historical Western colonialism in Central and South Asia to some extent echoes contemporary Indian discourse on the contentious China-Pakistan Economic Corridor. Rising Chinese economic expansion via the BRI is especially perceived as a threat to the West’s global dominance, which has also been challenged by Russia’s invasion of Ukraine and the potential U.S.-China conflict over Taiwan. Amid the chaos in a transition from a unipolar to a bipolar world order, the Islamic State-Khorasan sees an opportunity to establish the Islamic State’s global caliphate. – I can’t see China getting cooperation from western countries or even India on this. Pakistan has proven itself to be an inconsistent unreliable partner over the decades and Russia has its focus elsewhere. Consider in concert with: China Blocks Polish Delegation’s Flight to Korea – The Chosun Ilbo – There was no explanation from Beijing for the tantrum, but Poland is among the most vociferous Eastern European countries and NATO members seeking to increase armaments due to the Russian invasion of Ukraine, and China seems to be siding with Putin. – interesting that the paper thinks this is aimed at Poland. This looks like a nail in the coffin for BRI and European market access for China
Shang-Yi Chiang says he will never return to work in China | DigiTimes – Mr Chiang is a star in semiconductor development and formerly worked at TSMC and had been a vice chairman of Chinese manufacturer SMIC. He was a key signifier for Taiwanese engineers that the Chinese businesses were good to work for. His leaving SMIC and this assertion about China will hurt China’s efforts to catch up and surpass, you can’t overstate the impact of Mr Chiang’s coming out and saying this
The Financial Times is the only UK newspaper that could have this honest discussion on Brexit. Interesting that political parties still can’t engage with the issue from an economic point-of-view. The anger and unrest that could break out if parties did engage with it could be devastating.
Yahoo Finance Tech newsletter with Daniel Howley | The pandemic rubber band is hitting the tech industry. – The recent bad news in the tech industry could be a delayed blow from the pandemic. Interest rate hikes, inflation hovering at 40-year highs, and sinking demand are hitting tech companies that have benefited from two years of pandemic-driven growth that saw valuations for some companies eclipse the $2 trillion mark. “As we entered the pandemic, everybody was afraid that there were going to be these disastrous layoffs and it was going to be horrible. And there were, very briefly, in a few places…but that immediately turned around,” TECHnalysis president and chief analyst Bob O’Donnell told Yahoo Finance. “In a weird way, it almost feels like now we’re getting some of the impact of the pandemic after the fact,” he added. “I think people are recognizing they maybe overextended their hiring when they expected some of the growth that happened during the pandemic to continue in the tech industry.
The Omnipotence of China’s Xi Jinping: “Chairman of Everything” – DER SPIEGEL – his influence extends all the way to Germany. For companies like Volkswagen or Mercedes, China is the key sales market. In early November, Olaf Scholz will be traveling to Beijing for the first time as German chancellor, and despite the ongoing debate about the German economy’s unsustainable dependence on China, he will likely bring along a significant delegation of German executives – what’s interesting is the vulnerability and fragility that Der Spiegel notes in their own country’s political and business elites. Add to this idea, the current debate over Hamburg: EU warned Germany against approving Chinese investment in port – Handelsblatt | Reuters – The European Commission warned the German government last spring not to approve an investment by China’s Cosco into Hamburg’s port, German daily Handelsblatt reported on Friday, citing sources. Shipping giant Cosco last year made a bid to take a 35% stake in one of three terminals in Germany’s largest port in the northern city of Hamburg. Germany’s ruling coalition is divided over whether to approve the investment, government sources say, even as Beijing urges Berlin not to politicize the bid and the port authority warns this could hurt the economy
Screening of Batman film scrapped after Hong Kong censors say it is ‘not appropriate’ for outdoor showing – Hong Kong Free Press HKFP – The Dark Knight banned under Hong Kong’s Film Censorship Ordinance, organisers of movies screenings are required to submit works to the Office for Film, Newspaper and Article Administration (OFNAA) for film classification and clearance. Films must meet criteria relating to depictions of violence, cruelty and offensive language or behaviour. Since the passing of the national security law, censorship has been tightened to require authorities to evaluate whether the exhibition of a film would be “contrary to the interests of national security.” – presumably interests of national security includes a plot where Batman comes to Hong Kong to pursue an enemy, a corrupt Chinese businessman who laundered money for a mafia group. Just waiting for commercial disputes to be ruled ‘contrary to the interests of national security’ and the banking sector get screwed over
Hong Kong court allows media tycoon Jimmy Lai to hire UK lawyer for national security trial – Hong Kong Free Press HKFP – The judge ruled on Wednesday that issues which would arise during the trial, such as how the national security law and the sedition law should be understood in relation to freedom of expression, were “of great general public importance.” – what’s of more interest is the reasons why the Hong Kong government opposed his appointment. A lack of alternative counsel wasn’t seen as a reason to bring in the British lawyer. They described the case as lacking complexity as an additional reason – however it will be interesting to see if they view it as being sufficiently complex to move to the mainland when Owen becomes involved… and National security: Hong Kong court allows police to search journalistic materials stored on Jimmy Lai’s phones – Hong Kong Free Press HKFP – “Although always subject to the protection and procedural safeguards based on public interest and vigilant judicial scrutiny, journalistic material is not immune from search and seizure in the investigation of any criminal offence,” the judgement read. “As a matter of principle, the same must be true for offences endangering national security.” Excluding journalistic materials from the definition of “specified evidence” would also reduce the effectiveness of police investigation and prevent the national security law from serving its legislative purpose, which was to “effectively” stop, prevent, and punish offences endangering national security, the judges wrote.
Great video from Asianometry on the history of field programmable gate array.
Japan
Toyota Starts Plant in Junta-Led Myanmar Over a Year After Coup – WSJ – Toyota began assembling one or two Hilux pickup trucks a day at its plant in Yangon last month, a spokeswoman for the Japanese auto maker said Wednesday. She said Toyota wanted to contribute to the industrial development of Myanmar and the livelihood of local employees and their families. The car maker’s decision to begin production in Myanmar highlights a divide among foreign companies over whether to withdraw from the country, whose elected government was ousted in February 2021. As of the beginning of this year, close to two dozen major foreign companies had decided to suspend business operations in Myanmar, including energy giants Chevron Corp. and TotalEnergies SE and Japanese beer maker Kirin Holdings Co., according to the World Bank. Toyota had previously been included on that list. Companies suspending operations have cited shareholder pressure and a worsening human-rights situation among other reasons. Some activists have pushed companies to pull out of Myanmar to isolate or bankrupt the military junta – sounds more like assembly of knock down kits, likely coming in from Thailand
Korea
Kakao co-CEO Whon Namkoong quits over South Korea app outage chaos | SCMP – while its being described as a fire, it might not be an accident. The Koreans are still investigating. What’s more shocking is that there was one chokepoint of failure in a single data centre which took out both Naver and KakaoDaum services
Marketing
Tough times and low confidence call for bold action | WPP – When economic indicators are tough and consumer confidence is low, remember that brands with strong value propositions are 100% more recommended and 91% more loved than the rest, says WPP’s Lindsay Pattison We are in uncharted waters – consumers and businesses alike. Inflation has spiked, interest rates are on the up, the impacts of war are unknowable, and the OECD’s Consumer Confidence Index
The Return of Industrial Warfare | Royal United Services Institute read in conjunction with: Chokepoints – Center for Security and Emerging Technology – China’s most acute “chokepoints” are technologies—particularly high-end electronic components and specialized steel alloys—dominated by one or a handful of companies based in the United States or other like-minded democracies. Rather than playing for the “national team,” Chinese companies—both private and state-owned—often prioritize their brands and bottom lines over marching in lockstep with Beijing’s industrial policies. Many PRC firms choose to buy vital high-end components from trusted foreign suppliers because they harbor doubts about the quality of goods provided by domestic vendors. Technological breakthroughs made by Chinese universities and research institutes frequently fail to find commercial applications, leaving the PRC market dominated by foreign products.
Australia investigates claims China tried to hire former military pilots | South China Morning Post – Australia’s Defence Minister Richard Marles said he had asked the defence department to investigate claims that former Australian military pilots had also been recruited to join a South African flight school that operated in China. “I would be deeply shocked and disturbed to hear that there were personnel who were being lured by a pay check from a foreign state above serving their own country,” Marles said in a statement. “I have asked the department to investigate these claims and come back to my office with clear advice on this matter.” and Britain and Australia plan steps to stop China hiring their pilots — Radio Free Asia
Chinese mercenaries have been around longer than the belt and road. You can come across Chinese mercenaries protecting in the border areas of China such as the warlord regions of Myanmar. But now Chinese mercenaries are increasingly linked with the Belt and Road Initiative. China claims that it isn’t building an empire in Africa, across the former Soviet Union and Sri Lanka. Yet all of the private security companies that Chinese mercenaries work for are state owned. The Chinese mercenaries come out of the PLA, the PLAN marines and the PAP. That doesn’t mean that they are well trained or even well disciplined and they exist in a Chinese legal vacuum.
There is more connecting China to its empire with these Chinese mercenaries than there was for the army fighting under Clive of India for the East India Company a few centuries before. Task and Purpose goes into the subject of Chinese mercenaries in more depth.
Inside Missfresh’s hunt for investor cash ahead of collapse | Financial Times – probably one of the best comments on this article – Missfresh is only one of a number of Chinese domestic startups that sought US investors, as their own domestic private investors were unwilling to invest. For a Chinese investor, they always consider when and if the CCP may want a piece of the business, or worse take action against the promoters and management. for non performance. The lighter loss being financial and. the greater loss, life.
China’s Growth Sacrifice by Stephen S. Roach – Project Syndicate – Japanization of an increasingly debt-intensive, bubble-supported Chinese economy. An overly leveraged Chinese property sector fits this script, as does the debt-fueled expansion of state-owned enterprises since the 2008-09 global financial crisis. For China, this became the case for deleveraging, well worth the short-term price to avoid the longer-term stagnation of Japan-like lost decades. Finally, a major reversal in the ideological underpinnings of governance is also at play. As the revolutionary founder of a new Chinese state, Mao emphasized ideology over development. For Deng and his successors, it was the opposite: De-emphasis of ideology was viewed as necessary to boost economic growth through market-based “reform and opening up.” Then came Xi. Initially, there was hope that his so-called “Third Plenum Reforms” of 2013 would usher in a new era of strong economic performance. But the new ideological campaigns carried out under the general rubric of Xi Jinping Thought, including a regulatory clampdown on once-dynamic Internet platform companies and associated restrictions on online gaming, music, and private tutoring, as well as a zero-COVID policy that has led to never-ending lockdowns, have all but dashed those hopes – China was on a rocket ship that it couldn’t control, it is now trying wrestle back control at the expense of growth
Eurostar to axe direct trains from London to Disneyland Paris over Brexit | Eurostar | The Guardian – “We have taken the decision not to run the direct Disney service … in summer 2023,” it said. “While we continue to recover financially from the pandemic and monitor developments in the proposed EU entry-exit system, we need to focus on our core routes to ensure we can continue to provide the high level of service and experience that our customers rightly expect.” – not enough demand from the UK and too much hassle to run
In Myanmar, Vietnamese firms learn the political risks of backing the junta — Radio Free Asia – interesting that Burmese consumers are boycotting military-owned businesses including MyTel – a mobile carrier that VietTel has a major stake in. Also: Vietnamese firms have begun investing abroad, and, in particular, have sought a place in the 5G marketplace, especially in markets where there is residual fear of China’s communications giant Huawei. – Also: Vietnamese conglomerate THADICO, which has invested in Myanmar Plaza, the largest modern mall and office space in Yangon, ran afoul of the local population when the plaza’s security attacked civil disobedience protesters in November 2021. This led to a sustained boycott that hit the plaza’s 200 retail units hard, compelling the firm to publicly apologize
I worked peripherally on And1 early on in my career, but it didn’t catch fire in Europe than it did in the US. I hadn’t known the full extent of the buzz marketing campaign that backed up the brand in the US. Here’s the early versions of their ‘mix tapes’, which did for street football what skate videos did for skateboarding in the 1980s. They blew up street basketball in the US, in a similar way to the X Games blowing up extreme sports. ESPN got on board with a sports related reality TV show with players competing for an And1 team contract.
But all the buzz marketing didn’t get the cut through that Wieden + Kennedy’s Freestyle TV advert did, effectively depositioning And1 from its street ball territory. Then there was a tie-up show on MTV2 that was similar to the And1 | ESPN show of the previous year. The lesson I took away from And1 was that product and reach both matter. Nike could buy reach and And1 didn’t have any product of note after the Tai Chi.
Opinion: Intel’s ‘smart capital’ is a warning from the past | eeNews Europe – the author considers the rise of private equity to fund new silicon fabs as a warning of peak semiconductors. Similar things happened in the 1980s and 1990s when large businesses like Coca-Cola helped fund manufacturing facilities. The key difference this time is how globalisation has been thrown into reverse by ‘Made in China 2025’ and hostile moves against Taiwan
Loss of Chinese tourists forces Europe’s luxury retailers to rethink | Financial Times – A recent surge in Middle Eastern tourists, as well as US visitors buoyed by the strong dollar, has helped fill stores. Eduardo Santander, CEO of the European Travel Commission, said the lack of Chinese tourists left the many luxury retailers that relied heavily on them with “a huge feeling of loss”, but had spurred “a huge effort to diversify”. Retailers have personalised their services. During Europe’s Covid lockdowns, shop assistants contacted customers via WhatsApp with tailor-made recommendations. Berg sees a “possible return to the old idea of service and store management from the 1990s, the little black book with all the customers’ addresses and preferences in it”. “You have to do much more to attract local customers,” Berg said. “They can come back, they have more time to spend, versus an international customer that was determined and straightforward.” – A few thoughts on this: The article asserts that Chinese tourists are straightforward and not picky. I think Chinese tourists are very picky by comparison, although the diagou’s supplying lower tier cities or buying to order might appear to be ‘luxury hoovers’. Secondly, luxury brands have treated non-Chinese customers abysmally (in particular the watch makers like Rolex and their retail partners like the Watches of Switzerland group) and they deserve all the problems that they get. Only focusing on the Chinese market has allowed the Chinese customers to blow up the secondary market. A straw poll of people that I know who have a Rolex from the past 10 years or so:
All of them had to buy their watch on the secondary market
About 80 percent of them had original warranty cards with Chinese family names, which is far higher than the 30 to 40 percent share that Chinese consumers make of the global luxury market
Finally, I don’t see the market coming back in the same way given Xi Jingping’s focus on common prosperity which will make luxury consumption increasingly problematic.
This New Study Reveals How Brand Loyalty is On the Decline / Digital Information World – I see this as more indicative of economic recession rather than any major change. Gallup showed that traits such as preference for green products decline in a recessionary environment, it would make sense if brand loyalty took a similar battering in favour of private label brands and substitute products
