Tim Culpan of Bloomberg notices an oddity about Luckin Coffee, China’s answer to Starbucks:
The pending Nasdaq debut of China’s Luckin Coffee Inc. begs the question of whether it’s a purveyor of beverages, or a technology company.
As I pore through its 286-page IPO filing, I find myself struggling to decide. It’s kind of like Starbucks Corp., I guess, but also a lot like food-delivery giant Meituan Dianping and ride-hailing pioneer Uber Technologies Inc. […]
Luckin posted 841 million yuan ($125 million) in revenue last year, exploding from 250,000 yuan the year prior. But its operating expenses were three times higher than sales at 2.4 billion yuan. And it wasn’t even materials, store rentals or admin expenses that blew out the bottom line.
Marketing costs were 746 million yuan last year. To make every 100 yuan from selling coffee, Luckin spent 152 yuan to produce and market that cup – not including rent and general expenses.
Spending three times more than revenue makes Luckin a tech startup, not an F&B company.
Is it also part of the Belt and Road?
I previously wrote about Luckin here.
Measuring the total mass of our home galaxy is a tough puzzle. It’s difficult to see it all at once, buried as we are within one of its spiral arms. And there’s a huge portion of the Milky Way we can never see, since it’s made up of dark matter, which doesn’t emit light at all. So to get an accurate number, researchers need to weigh both the visible and invisible material that makes up the galaxy.
Now scientists have done just that, using new data from the Hubble Space Telescope combined with the Gaia spacecraft. This latest mass measurement of the Milky Way weighs in at 1.5 trillion times heavier than our sun.
Now, how heavy is the universe? Assuming the Milky Way is an average galaxy, and there are 200 billion galaxies in the universe, then all galaxies combined would weigh 300 sextillion (300,000,000,000,000,000,000,000) times the mass of the sun, and that’s not counting all the stuff drifting around between galaxies.
The Executive Order on Coordinating National Resilience to Electromagnetic Pulses, issued on Tuesday, is a step in the right direction:
Section 1. Purpose. An electromagnetic pulse (EMP) has the potential to disrupt, degrade, and damage technology and critical infrastructure systems. Human-made or naturally occurring EMPs can affect large geographic areas, disrupting elements critical to the Nation’s security and economic prosperity, and could adversely affect global commerce and stability. The Federal Government must foster sustainable, efficient, and cost-effective approaches to improving the Nation’s resilience to the effects of EMPs.
This is a genuine threat. EMPs are not science fiction. The Soviet Union kept a reserve of steam-powered trains in case an EMP from a nuclear blast wiped out their electrical systems.
I wrote about EMPs in the context of North Korea back in 2017:
The North said in its statement Sunday that its H-bomb “is a multi-functional thermonuclear nuke with great destructive power which can be detonated even at high altitudes for super-powerful EMP (electromagnetic pulse) attack according to strategic goals.”
Hegang, China in 2012
China has almost 1,000 cities that are losing people:
The perception that China’s urbanisation is still in full swing is untrue for nearly one-third of Chinese cities, whose populations are shrinking, according to new findings by a Chinese university.
A research team from Tsinghua University used satellite imagery to monitor the intensity of night lights in more than 3,300 cities and towns between 2013 and 2016. In 28 per cent of cases, the lights had dimmed.
China now has 938 shrinking cities, according to Long Ying, an urban planning expert at China’s Tsinghua University, who founded and led the research group, Beijing City Lab. This is more than any other nation on Earth.
The urban shrinkage is related to China’s declining population.
The Chinese cities under the greatest pressure of shrinking include those heavily dependent on natural resources, such as the coal mining town of Hegang in Heilongjiang province.
Also diminishing are cities “in the process of transformation”, such as Yiwu in Zhejiang province, once christened the “largest small commodity wholesale market in the world” and famous for its sprawling networks of stalls selling counterfeit goods.
More about Yiwu here.
Most Chinese city planning is detached from the reality of today, Long said after his team reviewed ambitious urban development plans for more than 60 cities. The plans usually include key infrastructure projects, as well as industrial, commercial and residential developments that may diverge significantly from the demographic trends.
The best-laid plans of mice and men. Anything is possible in China, but Herculean development plans (such as the Greater Bay Area “blueprint”) need to be taken with a grain of salt.
Huge apartment buildings dominate the skylines in most Chinese urban areas. These buildings would be much more costly to tear down should they be vacant than the standard smaller houses in shrinking cities in the US, for example.
These large buildings may also be sparsely occupied – it could be difficult to survey how many homes are empty, Long said. Furthermore, no official wants to face a decision over whether to tear down a building that might just have a few occupants.
Chinese academic Gan Li calculates that some 22% of the nation’s housing stock is vacant, or more than 50 million homes.
However, the desolation that haunts many of America’s decaying post-industrial towns could be replicated in China, if the situation is not managed properly, Long said.
“Although shrinking cities in the US and China are different on many levels, many landscapes in the US rust belt could be the future of some of China’s shrinking cities,” he warned.
I’ve always been interested in the idea of long walks… really long walks. Two of my favorite travel books are Korea: A Walk Through the Land of Miracles by Simon Winchester and The Great Walk of China: Travels on Foot from Shanghai to Tibet by Graham Earnshaw, both written by Englishmen who took the trouble to perambulate across an entire country.
But another Englishman (I’m sensing a trend), Karl Bushby, puts those two authors to shame by attempting to walk an unbroken path around the globe, from the tip of South America to Hull, England. Bushby started his pedestrian odyssey in Pantas Arenas, Chile in 1998, and in 2006 he crossed the Bering Strait on foot. Yes, you can actually get from North America to Asia by scrambling across drifting ice floes, if you’re feeling adventurous. Some swimming may also be required.
Bushby was detained by Russian authorities for illegal entry and deported back to the US, but he didn’t stop walking. After a few detours and setbacks, he is back on the road and now appears to be somewhere in Central Asia (last spotted in Mongolia).
If he completes his journey – and there is no reason to think that he won’t at this point – it will rank as one of the more impressive feats of travel in modern history.
The twin tragedies involving Boeing’s flagship new 737 Max jets highlight the increasingly obvious corruption and incompetence pervading US industry and government. From Asia Times:
By now the whole world knows what pilots and aerospace engineers have known all along: Boeing stuck big modern engines on a 1950s airframe design, which made the 737 Max inherently unstable, with a tendency to go nose up and stall. It used a software kluge to compensate but didn’t retrain pilots in the new aircraft in order to speed sales. […]
The 737 Max scandal is a disaster for the United States, and it couldn’t have happened at a more delicate moment. China’s aircraft manufacturer COMAC already has nearly 1,000 orders for its C919 twin-engine passenger jet, designed to compete with the 737 Max as well as the Airbus 320. Not only has the prestige of American industry been tarnished, but the credibility of its air safety regulators, the Federal Aviation Authority and the National Transportation Safety Board, is compromised.
China was the first major nation to ground the new Boeing jets, followed by pretty much everyone else (except for Canada). Notably, the world was not impressed by the FAA’s assurances that the plane is safe to fly. The curious result is that China is emerging as a global leader in aviation safety.
The main reason that America’s military position has deteriorated relative to strategic competitors is corruption, pure and simple. The incestuous alliance of the defense industry duopoly (Boeing and Lockheed-Martin) and the Pentagon brass has saddled the military with backward-looking strategies and enormous costs.
The Pentagon’s budget was boosted by a horrendous $82 billion this fiscal year.
But America’s biggest problem is the erosion of its industrial capability. It appears that Boeing cut corners and eschewed a long-needed redesign of its most profitable product because the additional capital expenditures and longer lead times would not have been viewed benevolently by the stock market.
This is why we can’t have nice things.
There’s a lot of money to be made by offering censorship services, at least if you’re China’s main state-owned newspaper:
While most global news companies are struggling to survive in the internet world, China’s official media is having a golden era.
One of the bright spots on the A-share market these days is People.cn, the online version of the People’s Daily, whose shares surged 243% in the past month to a four-year high.
In 12 of the last 15 trading sessions, the shares of the Communist Party mouthpiece surged to a daily limit of 10%. The Shanghai-listed company now has a market capitalization of 34.74 billion yuan (US$5.18 billion), or an incredible 380 times historic earnings. […]
People.cn is tasked with censoring the content of the online media from the major platforms operated by internet giants such as Baidu, Alibaba and Tencent.
This was virtually a licensed insurance business for online media in the age of increasingly tighter control from Beijing.
Apparently, People.cn charges service fees to the internet giants to help them scrub their platforms of content that might be offensive to the Party. Of course, this is a bit circular since People.cn is an organ of said Party. Nice website you got there… be a shame if anything happened to it.
When I was living on Hengshan Road in Shanghai, my apartment building had a repair guy. He lived in the dumpster room, which was a nondescript concrete structure that adjoined the building. By and large, you didn’t notice him, and I think that suited him fine. There was also a slovenly middle-aged dude who lived in the building and always seemed to show up and collect a small amount of money whenever anything happened, such as a tenant moving in. You might call him the building manager, except he didn’t really manage anything. He was more of an agent or middleman.
There was, for a long while, a broken toilet that sat next to the elevator on my floor. Nobody seemed to mind this. I don’t remember if it was ever removed. When I first moved in to the building, the sink didn’t work and there was a leak from the ceiling above the shower. We got the sink fixed somehow, but the leak persisted. It turned out there was a crazy old guy living directly upstairs (he was a government official who had been injured in a car accident and literally went crazy) and there was something wrong with his pipes and that was the source of the leak.
Together with my landlord (a cretin), the repair guy and the “building manager,” we visited the crazy old guy upstairs and identified the problem, which promptly failed to be solved. There was a big argument between the three parties who were supposed to be helping me fix the leak and somehow they just couldn’t reach an agreement about how or whether to fix it.
Finally, after a long and exhausting struggle, I figured out that the problem was that the repair guy wanted a small sum of money, like 40 yuan (about $6), and either the landlord or the “building manager,” or both, refused to pay him. So I shrugged and paid the man. And you know what? He fixed the leak. He fixed it but good.
Tweet by Paul Musgrave, assistant professor of political science at UMass Amherst:
The Simpsons used to be viewed as a portrait of a lower-middle class family. They had a house, car, job security, and a single wage-earner who didn’t graduate college. These days, that’s beyond unattainable.
The Simpsons premiered in December 1989. What has changed in the intervening 30 years is the destruction of the middle class and Middle America. The US is not wisely led.
1989: mr. burns is a dick. 2019: i would literally weep with relief if my boss offered me this kind of job security.