April 21, 2021
Good morning! Washington and Beijing look set to choose their next ambassadors to one another — R. Nicholas Burns for the U.S. and Qin Gang for China, both veteran diplomats — which offers the possibility for more bilateral dialogue. For now, it's a slim one.
In this week's Protocol | China: futuristic workplaces are looking hellish, Big Tech goes to bat for misogynist nationalists and a giant QR code hovers over the Shanghai skyline.
(Was this email forwarded to you? Sign up here.)
The Big Story
Chinese workplaces take an Orwellian turn
Workers in China have long since returned to office life following a relatively short but draconian COVID-19 lockdown last year. The idea of going, well ... anywhere that's not home might strike many locked-down, fed-up Western readers as a relief. But what if your workplace resembles a dystopian surveillance state? What if your boss has been replaced with a heartless algorithm? Chinese workers are beginning to wrestle with these new, grim questions.
Chinese tech giants are stepping up workplace surveillance. On Monday, LatePost published interviews with several Chinese Big Tech employees who said their employers monitor everything from the amount of time employees spend on internal systems, to conversations on social media, to restroom breaks.
- Some have undergone interrogations by internal investigation staff, known euphemistically as "quality control."
- QC will demand workers hand over their phones so they can check private WeChat messages.
- Veteran tech workers have crafted an "anti-surveillance manual" that includes best practices like using separate work and personal devices, creating a separate dedicated WeChat account for work and taking pains not to connect any personal devices to the company intranet.
Also on the rise: algorithmic bosses. "Office automation systems" (OA系统) are all over the news in China, and the market is projected to generate $3 billion in 2021. But algorithm-driven management is often unbelievably invasive.
- Some systems measure heart rates or other vital signs to ensure no one is slacking.
- Workers who don't complete (often arbitrary) tasks the algorithm has decided are important can be subject to wage cuts.
- Even executives who know the OAs aren't doing a good job seem reluctant to junk them after sinking money and reputational capital into their internal deployment.
And China's delivery workers are toiling for increasingly unforgiving apps. The country's ecommerce market is huge, but it's built on blood, sweat and lots of tears.
- One app reportedly levies a $300 dollar fine on workers for every customer complaint via email — and remember, delivery drivers in China often make less than $1,000 per month.
- Some are fighting back, and paying a cost for their activism. One activist who calls himself "Leader of the Delivery Rider Alliance" and documented the harsh lives of delivery workers via social media videos was detained in late February.
Chinese workers are making a stand, even if they don't have meaningful unions. Instead, they're sharing their experiences online.
- Workplace gossip site Maimai, which Zeyi Yang profiled for Protocol in February, is upending the employer-employee relationship by turning employees into anonymous tipsters and citizen journalists.
- Maimai users often hear of major scandals first, like the death of a Pinduoduo employee, likely from overwork.
- But Chinese Big Tech hates Maimai, and has hauled it into court so often that Maimai had to put its IPO in the icebox.
Look for workplace tensions to rise further. Chinese bosses are increasingly looking to automation to solve for a shrinking labor pool and rising labor costs. But those factors also mean workers have more options, and will grow likelier to speak up against abusive employers.
On Protocol | China
- China's antifeminists have an ally: Big Tech. The Weibo accounts of nearly a dozen feminist voices have been deleted and pro-feminist groups on Douban have been shuttered after a recent wave of misogynist, nationalist ire targeting them for speaking out. Antifeminist voices not only threatened and doxxed the feminists, but reported them for specious violations — worse, the platforms complied. Activists are now wondering whether Beijing is involved with the spate of closures, given a recent government whitepaper pushing to "liberalize and encourage childbirth" with birth rates plummeting. Shen Lu has more.
- Chinese Big Tech's experiment to reinvent health insurance is ending. Online "mutual aid" platforms backed by Alibaba, Tencent and other giants promised to make private medical insurance accessible to the hundreds of millions of Chinese people unable to pay traditional commercial insurance premiums. But the thing that made them socially beneficial — low overheads and tiny monthly premiums — also made them a lousy business. Zeyi Yang has a post-mortem.
- Everything you need to know about the Waterdrop IPO. The Tencent-backed, big-data driven, would-be "health ecosystem" started with mutual aid, but has pivoted to more lucrative ventures, including hawking insurance products via livestreams. Now it's set to IPO on the New York Stock Exchange. Zeyi Yang tells you how the company plans to cash in on China's greying populace.
Big Brother Beijing
STAR says "bu" to fintech IPOs.
Last Friday, the China Securities Regulatory Commission updated its "Guidelines for Evaluating the Attributes of Science and Innovation" to ensure that the core business of each tech company listing on the Nasdaq-style STAR Market is, well, tech. But it's defined rather narrowly: Under the new rules, the CSRC will "restrict the listing of financial technology and model innovation companies." CSRC will also bar real estate companies. The tightened IPO rules signal that it will be nearly impossible for the likes of JD Digits and Ant Financial to raise money there. Regulators have been tightening IPO rules since late last year; check out Protocol | China's analysis of STAR listing data for more.
China Goes Global
- NIO drives to Europe. Chinese Tesla challenger NIO will begin delivering EVs to European consumers as early as next month, according to the South China Morning Post. Qin Lihong, co-founder and president of the U.S.-listed Chinese EV maker, told reporters at the 2021 Shanghai Auto Show that the company has built a sales and marketing team focused on Europe, while its EVs have passed EU safety verification. Qin said the company will announce detailed expansion plans in May.
- LiangDao cooperates with FEV to develop autonomous driving systems. China's LiangDao Intelligence recently announced a partnership with global vehicle engineering service company FEV to promote the development and application of driver assistance and autonomous driving systems in the Chinese and European markets, according to tech news outlet EqualOcean. The two companies plan to build a "toolchain" for autonomous driving tests and verification.
Straight From China's Web
- Tesla gets dragged into a PR crisis. On Monday, a female Tesla owner climbed atop a car at the Shanghai Auto Show to protest what she said were malfunctions in her Tesla's brakes that almost led to the death of four passengers. The woman had been complaining since late February to no avail; she was hastily dragged out of the event and detained by police. A Tesla China executive said the company "wouldn't compromise," which only fueled public anger toward the carmaker. Discussion of the incident was still trending on Weibo's hot topics chart on Tuesday. On Wednesday, China's largest insurer, Ping An, reportedly announced it would not serve new Tesla owners in some Chinese cities, and authorities in the city of Zhengzhou reportedly ordered Tesla to hand over data about its brakes.
- The livestreamer eyeing a cosmetics empire. In a recent interview with Sina Tech, China's second-highest grossing livestream ecommerce influencer, Li Jiaqi (or Austin Li), said his eventual goal is to build a combined offline-online juggernaut to rival Estée Lauder or L'Oréal. A trained cosmetics salesman, Li shot to fame on Taobao due to his knack for goading viewers into (over)spending. Although he still streams almost three hours every day, he also owns an ecommerce company that does its own quality control inspections and trains new livestreaming talent.
- A Pinduoduo game you're doomed to lose. Chinese social ecommerce giant Pinduoduo has tried to maintain user loyalty by offering in-app games that supposedly reward players about $50 for sharing the game link with enough friends on social media. But in a video watched over 4 million times on Weibo, tech columnist Lan Xi revealed that the Pinduoduo in-game rewards were designed to be impossible to attain. Lan asked over 500 friends of his to click on the same link, then documented how the game changed its rules as he got closer to the stated goal.
One Company You Should Know
TuSimple sheds its Chinese past.
On Thursday, self-driving truck company and Tesla rival TuSimple raised more than $1 billion in its Nasdaq IPO. (Shares are down from their opening price of $40.) Readers who read English-language coverage might have missed the fact that TuSimple originated in China. When it was founded in 2015, it had headquarters in both Beijing and San Diego. As recently as 2017, it had more employees in China than Stateside. So why the pivot to the U.S.? Two likely reasons: The U.S. has higher labor costs (good if you're trying to automate away truck drivers) and looser auto regulations, according to a Twitter thread from researcher Yiqin Fu.
One More Thing
That's not a QR code; THIS is a QR code. Social media platform Bilibili wowed Shanghaiers with a night-sky promo that assembled 1,500 drones to create a giant, scannable QR code that linked to a video game download. We don't see a Guinness entry for this, but it's got to be the largest QR code ever created. (Though email us if you know of bigger ones; we'll send you a Protocol mug if you can beat this!)