China Reform Monitor: No. 1308

November 6:

Chinese children are viewing cartoons to prepare them for what Beijing claims is a growing espionage threat. Last month, in accordance with China's new National Security Law requiring national security be included in education, the party-led Chinese Society of Education published two online courses that teach kids to be on the lookout for spies, the South China Morning Post reports. One video is designed for primary school students and the other for secondary school students, and both conclude with a quiz. All schools located within a "safety education pilot scheme," which includes parts of Beijing, Shenzhen and Guangzhou, will screen the video for students and parents. The latter video demonstrates three kinds of espionage: leaking government data, taking photos of military bases, and cybersecurity breaches. In the version for smaller kids, a boy watches his father email photos of warships to an overseas magazine when his grandfather bursts in with an article about spying. "Grandpa, what are spies?" the boy asks. "Spies are those sent by enemies to collect information about us," grandpa sternly replies. "In peacetime, the information is used to damage our development. In wartime, it can kill numerous compatriots."

[EDITOR'S NOTE: The content of the videos seems to be linked to reality. In 2015, two Chinese men were jailed for selling military secrets, including photos of the Liaoning aircraft carrier, to foreign spies. A Japanese news outlet then published detailed photos of the aircraft carrier, prompting the official China National Defense News to call for tighter counter-espionage efforts.]

November 8:

China's largest online retailer, JD.com, and the Bank of China have agreed to buy $200 million worth of Montana beef (about 90,000 head of cattle) from the Montana Stockgrowers Association over the next three year. Under the deal, JD.com has agreed to purchase a minimum $50 million-worth of Montana beef in 2018, $70 million in 2019 and $80 million in 2020, with the option to invest $100 million for a new slaughterhouse in the state. A new slaughterhouse would make it easier to ensure Montana beef can be tracked back to its origins, a requirement under new Chinese import rules for U.S. beef. The agreement marks a significant entry into China's large and growing beef market; China's 1.37 billion residents are projected to eat 17.6 billion pounds of beef this year, up more than 40 percent over the past five years, ABC reports.

November 9:

Xiongan New Area, a new economic zone being built in Hebei, about 100 km southwest of Beijing, has teamed up with e-commerce giant Alibaba to create a smart city. The Xiongan New Area management committee and Alibaba signed a strategic cooperation agreement to jointly build "a city brain" run by artificial intelligence for Xiongan. The smart city will have "cloud computing" as the "nerve system" of its "Internet of Things." The Internet of Things and big data processing technology will be used to help plan and manage the city's consumption, production and supply chains, creating secure digital logistics system for the city. The "city brain" is expected to provide better solutions for the city's transport, energy and water supply. Alibaba has registered three subsidiaries in Xiongan to provide technological, financial and logistics services. China announced plans to establish Xiongan New Area in April, the official China Daily reports.

November 10:

After three years, foreign businesses will be allowed to own up to 51 percent of shares in joint ventures in securities, funds or futures, and the cap will be removed in five years, said Vice Finance Minister Zhu Guangyao. Duties on foreign cars will also be reduced "at an appropriate pace," and restrictions on foreign investment in special and new energy vehicle manufacture will be eased in free trade zones, the official Global Times reports.

November 17:

Bluegogo, China's third largest bike sharing company, has burned through 600 million yuan in investor funds deploying 700,000 bikes across cities in China, reports The Guardian. When reports emerged that Bluegogo was in financial trouble, customers began complaining that they were unable to get their deposits back, and rumors circulated that CEO Li Gang Li had fled the country. Bluegogo had 20 million users across China, meaning the company at one point had nearly 2 billion yuan in deposits. Bluegogo still owes 10 million yuan to a bike supply company, and began suspending orders in April. At least three other bike sharing companies have also gone bust in recent months, although Bluegogo is by far the largest. It is likely that one or two companies will soon dominate China's bike sharing industry.