Editor’s Picks: Pinduoduo’s Labor Problems, HNA’s Implosion, and Gree Electric’s Succession Crisis
The Lunar Year began with more reckonings for China’s big tech firms, which stand accused of extracting every last dime from employees at the expense of their health, whether through a grueling work culture that glues them to their desks or algorithms that drive them to their deaths. This week we took a close look at the recent deaths of two young employees at Nasdaq-listed group buying giant Pinduoduo Inc., and the militarized management style that may have contributed to them.
HNA’s riches to rags story
Founded at the turn of the millennium after the restructuring of Hainan Airlines in the eponymous southern island province, HNA has been a weathervane over the years: first of the golden age of private Chinese firms’ state-backed efforts to “Go Global” through ambitious acquisitions. Then of excess, easy money, spiraling debt and a liquidity crunch that had regulators sweating bullets (HNA bought the New York Skyscraper 245 Park Avenue in 2017 for an eye-watering $2.21 billion). The firm that once controlled $171 billion in assets went into bankruptcy restructuring last month. We raked over the coals and found the biggest losers.
An unexplained death
The sad and confounding story of a passenger in an Uber-like delivery van who is said to have jumped from the moving vehicle to her death became the subject of a police investigation in Hunan province, with the driver detained. The circumstances of the 23-year-old woman’s death are still unclear, but they have renewed the focus on gig economy firms’ dodgy vetting processes and how they can endanger female users. Lalamove, known as Huolala in Chinese, issued an apology 18 days after the incident, after a post published by the woman’s family went viral.
We also took a look at the succession crisis facing Chinese appliance-maker Gree Electric, after the departure of the second of two senior execs once touted as likely successors to the firm’s famously hard-nosed chair, 67-year-old Dong Mingzhu. Gree’s underlying woes were only compounded by the pandemic, and the former air-conditioner market king was dethroned by archrival Midea last year.
Also making news this week:
China’s largest poultry and pork firm said its profits slid by almost half in 2020, driven mostly by a saturated poultry market that was supercharged after the African Swine Fever crisis. That may be unsurprising given grain was cheap and meat expensive in 2019, but analysts were surprised the firm did not mention the impact of spiraling grain prices in its update.
Hong Kong plans to make local district council members swear loyalty to Beijing or face removal from office and a five-year ban on running for reelection, in the latest sign that the Chinese government intends to further tighten its grip on the semi-autonomous territory.
Weeks after China’s better-off families threw back glasses of the stuff to ring in the Lunar New Year, a distribution manager at Kweichow Moutai became the latest scalp in an ongoing graft probe of the company after he was sentenced to seven years in prison for taking 10 million yuan in bribes, including some very snazzy-sounding bottles of spirits. The chairman of China’s most valuable liquor company went down in 2019 after he was found to have traded dealer licenses for political gain, money and sex. We previously covered how graft underpins the company’s distribution model.
Flynn Murphy is company news chief at Caixin Global.
Contact reporter Flynn Murphy (email@example.com) and editor Michael Bellart (firstname.lastname@example.org)
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