Glowing blue AI sign at the Artificial Intelligence Pavilion of Zhangjiang Future Park
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What could the world learn from China’s AI regulation?

Protocol China

Hello!

We’re six days away from the Lunar New Year and a little over a week away from the start of the 2022 Winter Olympic Games, and there’s no sign of U.S.-China relations warming up. It’s sort of the opposite, in fact: First, the U.S. is on a diplomatic boycott of Beijing’s big event due to China’s human rights record. Then, last Friday, the U.S. government suspended 44 China-bound flights in response to the Chinese government's decision to suspend 44 U.S. carrier flights over COVID-19 concerns. It’s been a truly difficult few years for those who straddle the two countries. We hope that our readers who have been stranded by the pandemic will soon be able to visit their families, friends and business partners.

In this week's newsletter: China’s EV boom, SHEIN’s possible U.S. IPO, and the new "Fight Club" ending.

China’s unprecedented AI rules

What China does next may have massive implications for how businesses and governments around the globe deal with emerging technologies like AI. A panel of experts, convened by the Georgetown University’s Institute for Technology Law & Policy and the Information Society Project of Yale University on Friday, agreed that China could be a leader when it comes to regulating emerging technologies.

For instance, China’s newly passed rules targeting algorithmic recommendations could set an example for how the U.S. and other countries regulate recommendation engines.

  • Despite rules that you would expect to be included in an algorithm policy from Beijing, like tightening online content control, “the fact that China came out and did that before the rest of the world did was quite groundbreaking,” said Kendra Schaefer, partner and head of Tech Policy Research at Trivium China.
  • Specifically, tech companies have to inform users “in a conspicuous way” if algorithms are being used to push them. Users should be allowed to opt out of being targeted with algorithmic recommendations.
  • There are provisions against generating and aggregating fake news and against exploiting gig workers, like delivery drivers, by using algorithms.

Of course, that doesn’t mean the U.S. needs to — or is necessarily likely to — adopt China’s model. And reducing China’s effort to a possible threat to the West would be counterproductive to the discussion of AI governance.

  • “I don't want to devalue the importance of criticism and holding China’s authoritarian model accountable in ways where there are real harms connected to that,” said Samm Sacks, a senior fellow at Yale Law School's Paul Tsai China Center. “But I think we are in an environment now [where] we're creating this dichotomy between authoritarian and democratic technology. [It] is very dangerous in terms of looking at these issues around how to govern emerging technologies that really grapple with the questions rather than just sort of reverting back to this AI race between two systems.”

Chinese EV companies are on fire

2021 was a good year for all of China’s largest EV firms, but for some, it was a really good year. According to data from China Passenger Car Association, all of the top 15 EV companies doubled or tripled the number of vehicles they sold last year compared to 2020. That’s a lot of growth, but BYD Auto, SAIC-GM-Wuling and Tesla China stood out from the pack with over twice as many cars sold than other carmakers.

Graph: AJ Caughey

A MESSAGE FROM ENVOY

The concept of flex work isn’t new, but its widespread adoption is. Flex work helps all of us find some semblance of control in the middle of an uncontrollable pandemic. Giving options makes people happier and less stressed. This leads to a greater desire to participate, which helps us build our communities and culture.

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On Protocol China

Why China is outselling the US in EVs five to one. Chinese EV sales reached 3 million units in retail — a 169% jump from 2020 sales. The U.S. also saw EV sales increase, but only to 607,567 units, which was less than 20% of China’s sales. Why did China’s EV market explode last year? And what’s Tesla’s role in the boom? Shen Lu unpacks the story.

China plans a mega charging infrastructure. While we are on EVs, Beijing is planning to build enough charging stations for 20 million electric vehicles by 2025. China had 2.6 million charging stations throughout the country in 2021, up 70% from 2020. What’s Beijing’s plan to add 17.4 million chargers throughout the country? Zeyi Yang tells you more.

Big Brother Beijing

Regulators are cleansing the web, 180,000 apps at a time. Beijing has improved its ability to screen mobile apps from 150,000 to 180,000 apps per month last year, the Ministry of Industry and Information Technology said Friday. Since November 2019, the MIIT has been on a crusade against mobile apps that it believes have violated privacy protections, for example, by collecting too much user information or generating pop-up spam ads. As of November 2021, MIIT’s automated app-screening platform had processed 2.44 million apps and removed 540 that failed to “rectify."

Beijing is going after cyberbullying. China’s powerful cyberspace watchdog announced Tuesday it was starting a monthlong campaign to tackle a spate of issues, including cyberbullying, trolling and soft pornography. The Cyberspace Administration of China said this campaign was initiated in order to create a “civilized and healthy, festive and peaceful” online environment for public discussion over the Lunar New Year holiday. The announcement was issued a day after trolls drove a 15-year-old boy to commit suicide.

China goes global

Ecommerce sensation SHEIN mulls a New York IPO. Chinese cross-border ecommerce superstar SHEIN is reviving plans to go public in New York in 2022, Reuters reports. Offering fast-fashion apparel at incredibly low prices, SHEIN has become successful around the world and was valued at around $50 billion early last year. Founder Xu Yangtian is even considering applying for Singaporean citizenship to circumvent domestic restrictions on listing on a foreign exchange, according to Reuters.

TikTok’s ex-marketing chief was ousted because he ticked off ByteDance's founder. ByteDance founder Zhang Yiming was personally upset about the marketing gimmicks that TikTok used, which lead to the ousting of Nick Tran last week, according to private messages acquired by Chinese tech publication Pandaily. “Only those narcissistic but incompetent companies would do such marketing, pretending to be innovative — and we’re getting there,” Zhang wrote in a group chat with ByteDance top executives, commenting on marketing campaigns like “TikTok Kitchens.”

Straight from China's web

Tencent builds hotels for esports fans. Where do you go with a group of friends to play esports games for hours, uninterrupted? Hotels, Tencent reckons. The company’s esports arm has entered a partnership with a hotel management startup to build “esports hotels”: The first flagship venue will open in Hangzhou this year, tech publication CNMO reported. It will have rooms optimized for five-people teams, friend groups, mobile gamers and other users. Esports hotels are a hot business: January stats show that there are more than 3,500 esports hotels in China, and more than 46% were registered in the past year.

Buying ibuprofen can mess up your health code. Perplexed residents of Beijing found over the weekend that their health codes indicated they might have been exposed to COVID-19 after purchasing ibuprofen. The city’s health officials announced on Sunday that if residents had purchased antipyretic, cough or anti-infective medicines in the previous two weeks and in the future, their health codes can’t recognize their health status, and they will be required to take a PCR test within 72 hours. This is a sign of the municipal government stepping up its effort to control the spread of COVID-19 ahead of the Olympics.

On our radar

Revenue growth slowed for ByteDance in 2021. According to Reuters, ByteDance’s total revenue for 2021 was around $58 billion, up 70% from its 2020 revenue. The number looks impressive, until it’s compared with the 100% year-over-year growth ByteDance had in 2020. ByteDance’s slowed growth matches a general trend among Chinese consumer internet companies, which were hit hard by regulations last year. The third quarter of 2021 was Tencent’s slowest quarter since 2004 by revenue, and Alibaba forecast only 20% year-over-year growth in 2021.

One more thing

Police always trump villains in China. The 1999 film "Fight Club" was recently re-released on China’s web via Tencent Video, a popular streaming site — but someone rewrote the American movie’s end to please censors. The original ending suggests a plan to destroy the world is underway. In the new Chinese release, the final explosion scene was cut, and viewers are told the police prevented the bombing altogether. “After the trial, Tyler was sent to lunatic asylum receiving psychological treatment. He was discharged from the hospital in 2012,” the caption continues, according to VICE. It’s unclear if movie censors ordered the editing or someone, in the process of licensing the film, did so in order to bypass censorship.

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