Protocol | China
The people, power and politics of Chinese tech, every Wednesday.
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Chinese users do care about online privacy

Chinese users do care about online privacy

Good morning! In what's surely a metaphor of some kind, a Chinese rocket that everyone feared would obliterate someone or something has instead fallen harmlessly back to earth. The Long March 5B was reported re-entering Earth's atmosphere on Saturday and landing in the Indian Ocean. Chinese authorities had lost control of the rocket, and astrophysicists and experts had decried China for being "reckless" and "irresponsible" while Beijing played down what it called "Western hype." Ultimately, the statistically likely thing — an ocean landing — occurred. What, me worry?

In this week's Protocol | China: The power of privacy, the ugly resurgence of FaceApp and Xi Jinping's "dream city."

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The Big Story

Chinese people like privacy, too. Now they're getting some protections.

This newsletter has amply chronicled the many intrusions on personal privacy in China, from surveillance-happy bosses to smart televisions that snoop on hundreds of millions of unwitting owners. But there's another side to this story: Chinese people do care about privacy. That includes web users, consumers, activists … and even government.

  • In a November 2019 lawsuit, for example, a Chinese law professor sued a wildlife park for requiring facial recognition scans to enter. In November 2020, he won.
  • The reason we know about smart TV snooping is that a user curious about his TV's poor performance did a data audit, then shared his findings on social media — people were furious.
  • As Yale Law School scholar Jeremy Daum told Protocol, "There's a growing expectation of privacy" among China's public.

The upshot: China could soon have stronger privacy laws than the U.S. As Shen Lu reports this week, new draft rules could transform web users' experience by allowing individuals to block personalized ads and even inherit the personal data of deceased loved ones.

  • By contrast, the U.S. doesn't have any meaningful protections when it comes to how Big Tech slices, dices and monetizes personal data.
  • Chinese policymakers have been inspired by the European Union's stricter protections — which, it so happens, transfer power from the private sector to the government, something Beijing surely likes.

The state will continue to do what it wants, of course. While the proposed rules say the government "may not exceed the scope or extent necessary to fulfill its statutory duties and responsibilities," there's lots of room for interpretation there. And under the 2017 Cybersecurity law, invocations of "national security" are likely to provide cover for law enforcement to continue doing what it wants, which includes ferreting out dissidents.

As with any law, the proof would be in the pudding. A Chinese saying goes, "there are policies, and then there are countermeasures" (上有政策,下有对策). Clever — or simply unscrupulous — companies will try to find ways to comply with the letter, but not the spirit, of the new rules.

  • Laws always have unintended consequences. For example, the new laws would require users to understand and consent to the collection of their data. But this could become an endless, box-checking exercise that just leads to consent fatigue.
  • The law is still in draft mode, so it could be toughened up or watered down.

But this could still be a game changer. Digital rights advocates' greatest hope here is probably that the new rules capture, and then solidify, a public turn against the worst surveillance practices. If it bakes new expectations into online culture, China's government may also find it harder to act with impunity in cyberspace.

On Protocol | China

  • Every Chinese company wants to make EVs. Alibaba, Baidu, Xiaomi, OPPO; they all want to be China's next big electric vehicle maker, even if they don't make cars yet. The market for EVs is the world's largest, and 30,000 EV-related companies have joined the scrum in 2021 alone. (That's not a typo.) Shen Lu has the story.
  • Does AI need EQ? The chatbot Xiaoice, or "little ice," made headlines in 2014 for having a personality — in that case, that of an 18-year-old female student with whom some users fell in love. In an interview, the company's CEO tells Zeyi Yang about his plans to build other personality-infused "AI beings," why AI should have strong opinions and why China's a great market for tech firms.

Big Brother Beijing

  • The $16 billion poem. Chinese delivery giant Meituan's shares dropped 9.7% — a breathtaking $16 billion worth of market value — after CEO and founder Wang Xing posted a 28-character ancient poem online, according to the South China Morning Post. The poem was widely interpreted as a protest against Chinese regulators' investigation into Meituan, and the market fears Wang could repeat Jack Ma's fate as a too-proud public figure who becomes a perennial target for regulators. In February, Protocol | China reported on Wang's obsession with the social media site he created a decade ago. Apparently, his desire for self-expression comes with a price. And it's very high.
  • Beijing fined two ed tech giants. In the midst of a broad crackdown on China's tech giants, the country's market regulator has imposed a $389,000 fine on two of the country's most valuable edtech startups, Baidu-backed Zuoyebang and Tencent-backed Yuanfudao, state news agency Xinhua reported on Monday. Their offense: misleading advertising and unfair competition. We don't want to say "we told you so," but … a January Protocol profile of Zuoyebang CEO Hou Jianbin noted 570 consumer complaints against Zuoyebang on the Black Cat website, including "misleading advertising."
  • A ban on mobile media notifications. Reuters reported Saturday that the Cyberspace Administration of China will ban some independent (read: non-government controlled) social media accounts from sending notifications to Chinese users' phones, while restricting notifications from others. Finance regulators are wary of anything that could cause a sell-off or other unwelcome market instabilities via "rumors," while propagandists want to control who can reach into the home screen — and thus to some extent, the hearts and minds — of the mobile-carrying masses.

A MESSAGE FROM KOBRE & KIM

Kobre & Kim is a conflict-free Am Law 200 global law firm focused exclusively on disputes and investigations, often involving fraud and misconduct. From shareholder disputes and patent litigation to U.S. government enforcement and regulatory investigations, the firm is recognized as the premier choice for addressing high-stakes, cross-border legal and commercial challenges.

Learn more

China Goes Global

  • Could China capture Southeast Asia's screens? Chinese streaming giants have had their eyes on the Southeast Asian entertainment market for a long time. In this interview with tech outlet KrASIA, Anna Pak Burdin, head of business development for iQiyi International, laid out the Chinese streaming platform's strategy to compete with Netflix, Disney+ and HBO Go in that market. iQiyi's advantage? Asian content. The platform relies on Chinese, Korean and locally-produced TV content with Southeast Asia, Burdin said.

Straight From China's Web

  • FaceApp is making an ugly resurgence. Readers may remember the Russia-based FaceApp's 15 minutes of virality in 2017. But many Chinese users evidently don't. Chinese outlet Ciwei Gongshe reports that a Chinese app with the same name, a doppelganger app icon and similar functions topped China's App Store charts for several days in early May. The app doesn't just raise data privacy and copyright issues; this new "FaceApp" also tricked users into paying high subscription fees. Lesson of the day: The intersection of human vanity and curiosity remains lucrative.
  • China's new, new Silicon Valley and Xi Jinping's "dream city." On May 10, several major Chinese companies met with government officials to discuss Xi Jinping's idea for a new "dream city," Xiongan. Authorities first publicized the idea in 2017, and its development has moved into a new stage, with 17 companies signing onto 23 collaborative projects with the government to develop it. A now-deleted article published last week on WeChat lists eight resolutions adopted by the State Council related to the construction of Xiongan, with one stating that "Xiongan will eventually become the Silicon Valley of China," a rhetorical distinction at various points reserved for the Beijing neighborhood of Zhongguancun and the hardware capital of Shenzhen.
  • China's fed-up delivery workers are quietly striking. China doesn't have independent labor unions, but that hasn't stopped its beleaguered delivery workers from organizing. A new paper published in The China Journal documented the rise and distinctive characteristics of small-scale, quiet, social media-based strikes in China's delivery industry. Authors Chuxuan Liu and Eli Friedman point out that Chinese food delivery workers choose a low-key form of resistance to remain under authorities' radars, such as collectively staying offline and refusing to take orders.
  • The Digital Yuan takes another step forward. China is reportedly testing its centrally-backed digital currency by deploying it on Ant Financial's Alipay, one of China's most widely-used digital wallets. It's the first major private business taking part in China's expanding digital currency experiments.

One Company You Should Know

Chinese ecommerce is coming for your wallet

Onion Global Limited, a Chinese cross-border ecommerce platform that primarily hosts lifestyle brands, went public on the New York Stock Exchange last Friday. Shares have sunk on early trading, but Onion is just one of many Chinese companies with ecommerce ambitions far beyond the country's borders.

A MESSAGE FROM KOBRE & KIM

Kobre & Kim is a conflict-free Am Law 200 global law firm focused exclusively on disputes and investigations, often involving fraud and misconduct. From shareholder disputes and patent litigation to U.S. government enforcement and regulatory investigations, the firm is recognized as the premier choice for addressing high-stakes, cross-border legal and commercial challenges.

Learn more

One More Thing

OK, this QR code is probably even bigger

A previous Protocol | China newsletter shared an image of a giant QR code, comprising thousands of drones, hovering over Shanghai's night sky, basically daring readers to find a bigger one. Kudos to reader Arthur Kaufman for finding a rival — also in China. This code, carved into a wheat field in Hebei, registers at over 388,000 square feet. Take a gander here.

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