Bridge supremacy?

Staggering. Are they building a bridge, or a bunch of skyscrapers?

Another video.

Spectacular drone footage captures the world’s highest concrete bridge under construction. The main tower of the Pingtang Bridge in Southwest China’s Guizhou Province stands 332 meters, as tall as a 110-story building. It is scheduled for completion by the end of 2019.

But wait! It looks like France keeps the crown for world’s tallest bridge:

However, France’s Millau Viaduct, arguably the most photogenic bridge of recent times, has its tallest tower listed at 1,125 ft (343 m), which would put the Pingtang Bridge in second place should all things stay the same by the time the Pingtang Bridge is completed. And while “world’s tallest” may be in dispute, there is no dispute about who leads in the total number of tall bridges. Of the 101 tallest bridges listed on Wikipedia, China has a whopping 66!

More Chinese engineering marvels:

The other B&R

Proposed Long Thanh International Airport in Vietnam

Proposed Long Thanh International Airport in Vietnam

China’s Belt and Road infrastructure drive is still in high gear, but when the pedal hits the metal, Japan appears to be kicking China to the curb in Southeast Asia:

(Bloomberg) — Japan is still winning the Southeast Asia infrastructure race against China, with pending projects worth almost one and a half times its rival, according to the latest data from Fitch Solutions.

Japanese-backed projects in the region’s six biggest economies — Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam — are valued at $367 billion, the figures show. China’s tally is $255 billion. […]

The latest Fitch figures, provided in an emailed response to Bloomberg, count only pending projects — those at the stages of planning, feasibility study, tender and currently under construction. Fitch data in February 2018 put Japan’s investment at $230 billion and China’s at $155 billion.

Vietnam is by far the biggest focus for Japan’s infrastructure involvement, with pending projects worth $209 billion — more than half of Japan’s total. That includes a $58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam.

Those are pending projects, mind you – they may not actually happen. Like China’s nuclear ambitions along the B&R:

China could build as many as 30 overseas nuclear reactors through its involvement in the “Belt and Road” initiative over the next decade, a senior industry official told a meeting of China’s political advisory body this week.

Wang Shoujun, a standing committee member of the China People’s Political Consultative Conference (CPPCC), told delegates on Wednesday that China needed to take full advantage of the opportunities provided by “Belt and Road” and give more financial and policy support to its nuclear sector.

Stay tuned…

The status quo wins in Hong Kong

Good take from Bloomberg:

Hong Kong protesters have won a stunning victory. Saturday’s suspension of an extradition bill that would allow criminal suspects to be sent to mainland China followed a day of violent clashes on Wednesday that saw the police use tear gas, pepper spray and baton charges. In 2014, the police also used tear gas against demonstrators, prompting an occupation that paralyzed the central business district for more than two months. Yet the government refused to budge, and the protest was eventually cleared by force. It’s worth asking what was different this time.

The most obvious answer is the role of business. Occupy Central had limited support from companies, and what sympathy there was clearly waned as the weeks wore on and the costs to business mounted. By contrast, opposition to the extradition bill has united various strands of Hong Kong society, from civic and trade groups to religious organizations and the legal profession. That’s even more evident after Sunday’s monumental protest, which organizers said drew almost 2 million people.

Even HSBC and Standard Chartered supported the protests by allowing flexible working hours for their staff.

There’s a message here for the protesters – and for Beijing. It’s easier to preserve the status quo than it is to enact change. The common link between 2014 and 2019 is that the status quo has won in both cases. It was also the result in 2003 – probably the closest direct parallel with today – when a proposed security law was shelved after an estimated 500,000 marched in opposition. This means protesters have a better chance of success when fighting to preserve freedoms that already exist than when agitating for change.

Francesco Sisci, characteristically, finds Hong Kong’s lack of faith disturbing:

The core issue is that Hong Kongers don’t trust Beijing’s promises, and this kind of mistrust could take years to rebuild.

Beijing also clearly doesn’t trust Hong Kong. The bill aimed to prevent the territory from becoming a Trojan horse to smuggle revolution and subversion into China. Beijing apparently realized it was not the way and the time to do it. But the mistrust lingers on – and it is mutual.

Why, pray tell, might Hong Kongers fail to trust Beijing? A clue is offered in the second paragraph:

The Hong Kong authorities have already suspended the controversial extradition bill that could have put anybody in the territory in danger of being forcibly brought under the clutches of the Beijing’s opaque judicial system, according to Western lawyers.

I see what you did there. Note the careful choice of words: the worst Sisci can say about China’s judicial system, typified by things like arbitrary, secret detention and torture, is that it is “opaque.” And the suggestion that only “Western lawyers” have concerns about this bill is highly misleading. After all, there is a reason Hong Kong has refused to sign an extradition agreement with mainland China in the 22 years since the territory’s return to the motherland.

Just ask these guys:

Hong Kong lawyers protest

Source: Fox News

Thousands of Hong Kong’s legal professionals, including top lawyers, took to the streets on Thursday in a silent protest against the government’s controversial extradition bill, ramping up pressure on officials to avoid rushing it through the legislature.

The march, which organisers claimed hit a record high of 3,000 people, was the fifth by the legal sector since Hong Kong’s return to Chinese rule in 1997. It was also the first time lawyers had spoken out against a government proposal not directly involving judicial proceedings or a constitutional interpretation from Beijing.

Japan’s Belt and Road

Abe and Modi in 2016

In light of a certain state visit ongoing in Tokyo, I nominate this as the fact of the day (emphasis mine):

While Japan’s “lost decades” and China’s rise have led most observers to overlook Japan’s role in Southeast and South Asia, the country has remained an important source of development assistance, public lending, and private investment across the region, particularly as Japanese companies have extended their supply chains deeper into Asia. At the end of 2016, Japan’s stock of foreign direct investment in major Asian economies (excluding China and Hong Kong) was nearly $260 billion, exceeding China’s $58.3 billion. It is undeniable that Japan has increasingly had to jockey with China for high-profile projects as China’s footprint across Southeast and South Asia has grown. But Japan’s longstanding relationships and its long record of private and public investment across the region make it a worthy competitor with China.

Japan’s Belt and Road, particularly with US backing, could give China’s massive trade and infrastructure strategy a serious run for its money. And Japan is still the world’s third-largest economy…

Good news: Rare earths ain’t so rare

Well, this is an actual relief. Rare earths may not, in fact, be America’s Achilles heel (as China appears to think and as I previously thought):

Experts in the field, though, are much less concerned about such a chilling scenario. They say that while a restriction on rare earth exports would have some immediate adverse effects, the US and the rest of the world would adapt in the long run. “If China really cuts off supply entirely then there are short term problems,” Tim Worstall, a former rare earth trader and commodities blogger tells The Verge. “But they’re solvable.”

Far from being an ace in the hole, it turns out rare earths are more of a busted flush.

The reasons for this are numerous, and span geography, chemistry, and history. But the most important factor is also the simplest to explain: rare earths just aren’t that rare.

They can be mined in other places, like Australia, India, Brazil, Canada, and the U.S. China only mines about 80% of the global supply (not the 95% we often hear about). The Mountain Pass mine in California is apparently up and running again. And all is right in the world.

The Huawei juggernaut

Huawei’s European Research Center in Munich (Source)

Disturbing article (depending on your perspective) about the growing superiority of telecom giant Huawei:

Huawei Technologies, the spearhead of China’s trillion-dollar Belt and Road Initiative (BRI), isn’t a Chinese company, but an imperial juggernaut that crushes its competition and employs their intellectual resources. By 2013 it employed 40,000 foreigners–mostly in R&D– out of a workforce of 150,000. I think it foolish to think that the Chinese can’t innovate, but it doesn’t matter whether they can or not, any more than the siege skills of Mongol horsemen mattered in 1258.

A minor but telling example of Huawei’s imperial reach is the announcement this month that Huawei will build a 400-person chip design facility in Cambridge. It will compete with ARM Holdings, the chip design firm sold in 2016 to Japan’s Softbank. Softbank is a major shareholder in China’s e-commerce giant Alibaba, another spearhead of BRI. The combination of mobile broadband and e-commerce allows China to “Sino-form” economies of the Global South, turning them into Chinese dependencies […]

The fact is that Huawei’s equipment is years a head of its competition’s. It spends $20 billion a year on R&D, double the combined spend of its largest competitors Ericsson and Nokia. A dirty little secret is that Ericsson and Nokia make most of their hardware in China, so that if the Chinese wanted to implant “back door” spy chips, they could do as easily for the Scandinavians as for Huawei.

The world order seems to be cracking up and dividing into different spheres of influence. Maybe we can refer to these emergent geopolitical regions as “the U.S.” and “Huawei-land.”

Luckin as tech startup

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.

China’s shrinking cities

Hegang, China in 2012

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.

Censorship protection racket

People.cn

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.

Shanghai repair guy

Hengshan Lu apartment buildingWhen 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.