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ICYMI | 万一你错过了| 당신이 그것을 놓친 경우에 대비해서

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The US-China tech cold war has turned hot – but would a Biden presidency change things for Huawei and others? | South China Morning Post – “No president will want to be accused of being soft on China,” said James Andrew Lewis, senior vice-president and director of the technology policy programme at the Washington-based Centre for Strategic and International Studies (CSIS). “Trump’s policies are disorganised, but consistently move to cut economic ties with China. Biden’s policies will be better coordinated, less abrupt, but move in the same direction.” – the tech cold war isn’t new. You could trace it back to the beginning with coercive IP transfer and massive industrial espionage. It kicked off in earnest with the Golden Shield Project 金盾 工程 censorship system. Where we are now was not a case of if, but when

TikTok becomes a case study for Chinese companies planning global expansion | South China Morning PostZhang’s relationship with the ruling Communist Party is complicated. He must walk a fine line between keeping Beijing happy but not be seen as too close to raise concerns outside China. Zhang, who told Atlantic magazine in July that he was not a party member, was approached by Beijing a year ago with an offer to help when TikTok faced political troubles in India. However, Zhang sent mid-level staff to meet government officials, signalling he did not want Beijing to get involved – whether entrepreneurs like it or not, they’re likely to find the government inserted into the business like a helicopter parent. You’re likely to see coercive business development as part of Chinese diplomats wolf warrior patter; a la Huawei 5G network equipment and the Faroe Islands

Allegations of deception dog Nikola’s lofty aims | Financial Times – my worst fear is that this will tarnish hydrogen fuel cells in the market. Hyundai are already doing interesting things with hydrogen fuel cell wagons

Interesting report from Watches & Wonders (aka SIHH), Shanghai – Watches & Wonders Shanghai: The Future of Fine Watchmaking? | Luxury Society – more luxury related posts here.

BJ Fogg on this old but good video explaining persuasion through technology in very simple terms

FAA, Boeing Blasted Over 737 MAX Failures in Democratic Report – WSJ – really nice oral history of the Boeing 737 Max scandal

Money-launderers use Chinese online shopping sites to funnel cash offshore | Financial TimesMoney launderers have used some of China’s leading online shopping sites to transfer billions of dollars to offshore gambling sites, police raids have revealed. People wishing to evade China’s strict capital controls, for example to gamble on offshore websites, have been placing fake orders on the shopping sites, including on Pinduoduo, China’s second-largest platform by users. A corresponding sum is then credited to their gaming account.

Kraft Heinz sells parts of cheese business for $3.2bn | Financial Times – surprised if more assets aren’t sold as the 3G Capital model isn’t working

EU tests platform to link up coronavirus tracing apps | Reuters – really interesting development in interoperability

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Things that caught my eye this week

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Carhartt Labor Day colouring book – the American workwear brand put together a great children’s colouring book for labor day weekend. It allows parents to explain what they do for their kids and provides an activity for a socially isolated public holiday. You can download your Carhartt Labor Day colouring book here.

Carhartt Labor Day colouring book

Vox Media have done a great video on rotoscoping and animation. Rotoscoping as a technique allowed animation to have life-like motion, but the creativity of animation.

I was introduced to rotoscoping with the Ralph Bakshi Lord of The Rings animated movie. Peter Jackson’s live action version borrowed from this version shot for shot, but I find the animated version more enthralling because of Bakshi’s use of rotoscoping.

Video shot from an original 35mm trailer print

Simon Peel of Adidas’ now famous speech that recommended a healthy skepticism on short term performance marketing and the impact of longer term brand marketing. He realises digital is important, but lays out why marketers should ask why? Peel talked honestly about marketing effectiveness, marketing efficiency and misleading metrics. I had read the articles, but this is the first time that I’d seen his talk. More on marketing effectiveness here.

IPA Eff Week talk 2019 by Simon Peel of Adidas

Microsoft had been experimenting with sealed underwater data centres to see if they were possible and what the benefits were. Prior to the project starting there would be some predetermined benefits:

  • Reduced energy costs as refrigeration wouldn’t be needed. (You could achieve a similar effect, if you buried the data centre deep enough)
  • Reduced data centre costs. Internet hotels and server farms can cost a lot if built in cities with expensive real estate

But there were questions over corrosion, damage and reliability. Microsoft got around corrosion by filling a submerged data centre with a nitrogen atmosphere. They found that a data centre without human intervention had much less faults than a matching data centre on-shore.

Microsoft are now working on how the end of life process would work for an underwater data centre.

Microsoft’s Natick project on underwater data centres
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Dark stores and coercive diplomacy

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I came across a couple of interesting terms recently: dark stores and coercive diplomacy.

Dark stores

Gartner for Marketing (formerly L2 Inc.) were talking about a new development at Amazon’s Whole Foods subsidiary. It was what Gartner called digital dark stores. The first one has been established in Industry City to serve much of Brooklyn, New York.

Amazon themselves called it a ‘permanent online-only store‘ on their blog.

So whats the difference between dark stores and the ‘last mile’ warehouses that Amazon uses for fulfilment in places like London?

  • Looking at the limited amount of photos available, this doesn’t feel warehouse-like. There wasn’t obvious automation in the pictures. Instead it feels like a supermarket that’s well stocked, but lacking price tags and shopper marketing accoutrements. Gartner describe it as ‘technically a grocery store’, which implies that there might be zoning or planning regulations that they might be working around
  • It is only for the Whole Foods brand; rather than fulfilling Amazon Fresh and Amazon Prime Now items

This isn’t just an Amazon thing. Gartner points out that American supermarket brands Kroger and Giant Eagle have also embraced the order-only store model. More at Gartner for Marketing here.

Coercive diplomacy

The Australian Strategic Policy Institute published a report on September 1, 2020 called The Chinese Communist Party’s coercive diplomacy. It was written by Fergus Hanson, Emilia Currey and Tracy Beattie. Hanson, Currey and Beattie analysed ten years of Chinese government diplomacy. In there words:

The Chinese Communist Party (CCP) is increasingly deploying coercive diplomacy against foreign governments and companies. Coercive diplomacy isn’t well understood, and countries and companies have struggled to develop an effective toolkit to push back against and resist it.

The Chinese Communist Party (CCP) is increasingly deploying coercive diplomacy against foreign governments and companies. Coercive diplomacy isn’t well understood, and countries and companies have struggled to develop an effective toolkit to push back against and resist it.

This report tracks the CCP’s use of coercive diplomacy over the past 10 years, recording 152 cases of coercive diplomacy affecting 27 countries as well as the European Union. The data shows that there’s been a sharp escalation in these tactics since 2018. The regions and countries that recorded the most instances of coercive diplomacy over the last decade include Europe, North America, Australia, New Zealand and East Asia.

There seems to be an escalation of economic and non-economic measures deployed. Economic measures would include:

  • Trade sanctions – such as the recent ban on German pork products. This was rolled out just a few days in advance of a trade negotiation meeting between China and the European Union
  • Investment restrictions in strategic industries such as the ‘agreement‘ that Yahoo!, Softbank and Alibaba had over Alipay (which included what would now be Ant Group). Strategic industries like state security is notoriously (and deliberately) ill-defined in China
  • Tourism bans
  • Popular boycotts such as Korean corporate Lotte being driven out of China and the 2012 anti-Japan protests where the public smashed Japanese stores, attacked factories and burned Japanese cars

Coercive pressure is also applied at below state level on businesses. It may also be applied on individuals, based on the data leak provided from Zhenhua Data seems to imply.

Non economic measures include:

  • Arbitrary detention. The best example of this would be Michael Kovrig and Michael Spavor detained as part of China’s dispute with Canada. Another example might be Australian citizen Karm Gilespie. China didn’t admit it had detained him for over six years, until they announced his death sentence in the summer
  • Restrictions on official travel
  • State-issued threats which are usually issued on a regular basis as part of wolf warrior diplomacy. (Wolf Warrior is a set of two films with a Chinese action hero, a la Rambo – but with less humour).

Some of the imputus for coercive diplomacy might come from the Chinese Communist Party’s continued rancour over Qing dynasty-era unequal treaties. More China related content here and more on retailing here.