It was in September 2013 when I first met Aung San Suu Kyi at a summit in Singapore. Wearing traditional ethnic attire in violet and red blossoms in her hair, the Myanmar leader and Nobel Peace Prize Laureate delivered a speech about her country’s transition, for which she received a warm round of applause. With a serious and slightly grim expression, the iconic smile was absent on her face — at least in my eyes.

Suu Kyi was 66 at that time. It was three years after she was released from house arrest. She spent 15 years in custody due to her efforts to bring democracy to then military-ruled Myanmar, also known as Burma. That made her an international symbol of peaceful resistance in the face of oppression.

Suu Kyi’s father, Aung San, was the commander of the Burma Independence Army and helped negotiate Burma’s independence from Britain. He was assassinated on July 19, 1947, when Suu Kyi was 2 years old. At age 15, she moved to India with her mother Khin Kyi, who had been appointed the Burmese ambassador to India and Nepal in 1960. After that, Suu Kyi spent 28 years aboard — studying in Oxford, getting married — before she returned to Myanmar in 1988 to take care her dying mother.

Suu Kyi returned at a time when her country was rattled by nationwide protests against decades of military rule. Shortly after her return, she co-founded the National League for Democracy (NLD), a party dedicated to nonviolence and civil disobedience, and was appointed its general secretary.

Suu Kyi once said she would have preferred to be a writer than a politician. She is widely respected for her battle for democracy under the principle of nonviolence, kindness, love and courage. She gave up her freedom to stand up against the military junta, which separated her from her husband until his death. After she was released from house arrest in November 2010, Suu Kyi was elected to the Myanmar Parliament and stepped onto the international stage. The Singapore summit was her first public appearance at an ASEAN event.

After her speech, I took the chance to ask her to comment on the relationship between China and Myanmar. It was a tricky time for the bilateral relationship as Chinese investment in Myanmar had plummeted after 2011, when the new reformist government took over and many China-backed projects in the country encountered criticism.

Suu Kyi emphasized her country’s tradition of maintaining good relations with other countries. “When the Chinese Communist government came into power, Burma was one of the first countries to recognize it. I do not see why we should not continue this policy of maintaining friendly relations with all countries of the world,” she said.

“Of course there will be more economic competition in Burma. I know that in the last couple of decades, there have been more Chinese investments than Western investments. But I think competition is healthy. It should do us a lot of good and do good for those competing above us as well,” she said, adding she would like to visit China if she received an official initiation.

In June 2016, Suu Kyi paid her first visit to China by touring Beijing, Shanghai and Yunnan. She also met with President Xi Jinping and other high-level officials. Later that year, her party won a majority in the nation’s first free parliamentary elections. But Suu Kyi was unable to become president because her late husband and two sons are British citizens. Myanmar’s constitution prohibits anyone with foreign relatives from becoming the nation’s leader.

In April 2016, Suu Kyi was named state counselor, a role created especially for her, making her the de facto leader of the country. That October, the Rohingya crisis broke in Myanmar as renewed violence compelled hundreds of thousands of Rohingya — a Muslim ethnic minority group — to flee the country, fueling a historic migration crisis.

Despite the military’s role in the crisis, the NLD government’s handling of the issue drew global criticism. Suu Kyi has seldom responded to critics over the years. But in December 2019, Suu Kyi appeared at the International Court of Justice at The Hague, Netherlands, to attend a hearing for a lawsuit filed by 57 Islamic countries against Myanmar, accusing it of genocide.

At the hearing, Suu Kyi defended the country’s actions, saying there was no genocide orchestrated against the Rohingya.

Calling the conflict “intercommunal violence,” Suu Kyi argued that action was against Rohingya insurgents. While disproportionate military force may have been used and civilians killed, the acts did not constitute genocide, she argued.

Calling the allegations “incomplete and misleading,” she asked for the case to be dismissed. “If war crimes have been committed by members of Myanmar’s defense services, they will be prosecuted through our military justice system in accordance with Myanmar’s constitution,” she said.

Many were disappointed by Suu Kyi’s defense, saying she had lost moral standing. But supporters countered that she is a pragmatic politician trying to govern a multiethnic country with a complex history and a Buddhist majority. Nevertheless, her image as a widely recognized icon of democracy was somehow tainted.

But Suu Kyi’s presence at The Hague won applause at home. Many in the country, whose population is 90% Buddhist, believe criticism from international communities on the Rohingya crisis unfair. They saw Suu Kyi’s trip to The Hague as an opportunity to clarify the matter to the world. When Suu Kyi announced the trip in November, people across the country gathered to show their support, a positive signal for NLD’s chances in the next election this year.

Ethnic issues have long been complicated in Myanmar. I still remembered Suu Kyi’s remarks on the issue in her 2013 speech in Singapore. Ethnic conflict is one of the great challenges in Burma,” she said. “But this conflict can be settled and, of course, has been settled in the past. This memory of victory can help us achieve another victory in the form of genuine, ethnic unity.”

“Most people are thinking of the Burmese transition in economic terms. I’m afraid there are members of our government also who think of the transition in economic terms,” she said in 2013. “But I think the success of our genuine reforms will depend on how much inclusiveness we can create in our society.”

In response to a question from the audience about ethnic conflict and the Rohingya issue, her answer is worth thinking about even today.

“It is one of the most difficult issues we have had to face in recent years. It is not just confined to Burma because there are Muslims all over the world and one can understand the concern of Muslims all over the world as to what is happening inside our country,” she said.

“I think we have to start with rule of law. That is what I have always said, but people are not satisfied with the answer because it is not exciting enough. As (Singapore) Prime Minister Lee Hsien Loong said: ‘peace and security are important in the world today’ — very important for the future; very important for our economic progress as well as reform, stability in general. Without peace and stability, we cannot get people with differences to sit down and work out an acceptable answer. If people are frightened that they will be killed, if people are frightened that their goods will be taken away from them, or their houses will be burned down above their heads; you will not be able to persuade them to sit down to sort out their differences. So I have always said let’s talk with rule of law, let’s make sure there is no violence in a society where we have people of different religions living together. … We want a country that is at peace with itself. We want all our people, all our communities to be at peace.”

“What we would like ASEAN and the world to do for us is to be more understanding of our problem and not see it in — I hesitate to use this term — black and white — again because I used it for South Africa — but to be more aware of the nuances of the problem and not to see it as Muslim against Buddhist. It’s not that. It’s a matter of fear. I believe that hatred is rooted in fear; you hate what you fear. I have always challenged people: prove to me, whatever person or thing that you hate — that you don’t fear it. Ask yourself honestly, when you hate something, even if it’s something as simple as spiders, whether at the foundation there is fear.”

“Hate and fear are very closely linked together. To start to eliminate hate, we have to start by eliminating fear. We have to give our people a sense of security. We have to do it within the country — through rule of law, through the government taking the right measures. But I think you can help us by giving us your understanding, by understanding the reasons why the communal conflicts are taking place. It is not as simple as this community hates that community or this community wants to destroy that community. No, you have to get at the root of the matter — why are the fears there? What can we do — we inside Burma as well as all of you outside who wish us as well to eradicate these fears. Please study the situation in depth. Please do not take a superficial look and condemn one community over another. That will not help us achieve the kind of peace and understanding we need so much,” Suu Kyi told the audience.

About eight year ago when Suu Kyi was still a parliament member representing the opposition party, she was also the chairwoman of the Parliamentary Committee for Rule of Law and Stability, which was designated to tackle ethnic issues. At least five members of the committee came from regions prone to ethnic conflicts. I guess at least by then, Suu Kyi had started to reflect on the country’s ethnic challenges.

Contact translator Han Wei (weihan@caixin.com)

For Aung San Suu Kyi’s full speech at the Singapore summit in 2013, please click here to read and click here to listen.

Chinese property giant Evergrande Group is paying as much as 12% in its latest overseas bond issuance to raise $2 billion for debt repayment.

Hong Kong-listed Evergrande said in a filing that it would issue $1 billion of dollar-dominated three-year bonds with an 11.5% yield and $1 billion of four-year bond at 12%. Funds from the offering will be mainly used to repay debt and supplement operating capital, Evergrande said.

The company’s costs for bond borrowing are rising. A company financial report showed that in the first half of 2019, Evergrande’s average bond cost was 8.62%, up 0.7 of a percentage point from the same period a year ago.

Evergrande is under pressure from its debt overhang amid a cooling market and heavy investments in electric cars. At the end of June 2019, the company’s debt-to-assets ratio was 152%, higher than that of most industry counterparts. The company had outstanding debts of 813.2 billion yuan ($118 billion) as of June 30, with 37.5 billion yuan to be repaid in one year.

Evergrande Chairman Hui Ka Yan and President Xi Hai will each buy $50 million of the offering, the company said. Eight investment banks including Credit Suisse Group AG, BofA Securities and CITIC Bank International also agreed to subscribe to the bonds.

Evergrande’s last bond issuance was in April 2019, when the company sold $1.85 billion of notes at rates between 9.5% and 10.5%.

Contact reporter Han Wei (weihan@caixin.com)

Hong Kong’s monetary authority expects three or four internet-only banks to kick off trial runs during the first quarter this year following the launch last month of the first such bank, ZA Bank Ltd., the authority said Friday.

The Hong Kong Monetary Authority (HKMA) last year issued virtual bank licenses to eight companies to test the new services. The companies are scheduled to start pilot services within nine months after they received the licenses, according to the HKMA.

Only ZA Bank has started its trial run so far. The bank, controlled by Chinese online insurer ZhongAn Online P&C Insurance Co. Ltd., began offering virtual bank services Dec. 18 to 2,000 select retail users in advance of a full rollout.

Licensed companies will miss the schedule if they can’t start trials by the end of March. The HKMA didn’t elaborate what could hinder the steps of the banks.

WeLab Bank and Standard Chartered's SC Digital Solutions have said they plan to start services early this year.

Other license winners include JD.com-backed Livi VB, Ant SME Services (Hong Kong) Ltd., Tencent Holdings Ltd.-backed Infinium Ltd., Xiaomi Corp.-controlled Insight Fintech HK Ltd., and Ping An OneConnect Co. Ltd., a unit of Chinese insurance giant Ping An Insurance (Group) Co. of China Ltd.

Related: In Depth: With Eye on Fintech, Hong Kong Grants More Virtual Bank Licenses

Contact reporter Han Wei (weihan@caixin.com)

Volvo is working with China Unicom to develop 5G-based vehicle-to-everything (V2X) communication technology that can enable cars to better interact with their surroundings, the automaker said Wednesday in a statement.

With stronger data transmission capability, more-stable connectivity and less response time, the emerging 5G technology is considered a key to enabling autonomous driving, which global automakers are betting will be at the forefront of the smart transportation race.

In the statement, the Zhejiang Geely Holding Group Co. Ltd.-owned Swedish automaker describes how 5G-connected V2X-powered cars could enhance safety and convenience. For example, such cars could communicate with traffic lights for optimal speeds, decelerate preemptively when detecting potential dangers and find empty parking spots with the help of traffic cameras, according to the statement.

Volvo has also established partnerships with other Chinese companies including tech giant Baidu, with which the carmaker joined hands in 2018 to develop a self-driving taxi for China.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Baidu’s Driverless Cars Can Now Carry Passengers in Beijing

Even a $500 million buyback wasn’t enough to save online lender Qudian Inc. from a massive selloff of its New York-listed stock and the first in what’s likely to become a flood of shareholder lawsuits.

The company was a rising star when it listed in 2017, raising nearly $1 billion and becoming one of the first firms from China’s then-hot fintech sector to go public. But times have been much tougher over the last two years as Beijing clamps down of a noisy group of high-tech financiers that often have laxer lending standards and weaker risk-prevention systems than traditional banks.

That crackdown was front and center in a company announcement issued late Thursday, in which Qudian formally withdrew its previously issued 2019 guidance, citing “uncertainty related to the recent regulatory and operating environment.” It noted that the broader lending market had become more cautious, with the result that its “transaction volumes in loan facilitation and on the open platform have decreased substantially.”

In a bid to stop the inevitable sell-off, the company concurrently announced a $500 million share buyback to boost confidence. But investors were buying none of that, and Qudian’s shares tanked nearly 20% to a new all-time low when the bloodbath was finished. At their current level they now trade at less than one-sixth of their IPO price from headier times.

It didn’t take the sharks long to detect the scent of blood. Just eight hours after the announcement — the length of the trading day — the law firm Pomerantz LLP announced it was investigating claims that the company duped its shareholders. Things will probably get worse before they get better, as more such shareholder lawsuits are almost certain to pile in.

Contact reporter Yang Ge (geyang@caixin.com; twitter: @youngchinabiz)

Related: China Merchants Bank Executive Arrested in Connection to P2P Business

The much-cheered phase-one trade deal touched on a thorny issue that has long been a major complaint by the U.S. government against China – the alleged coerced transfer of technology from its firms in exchange for access to the Chinese market.

However, the text addressing the issue of technology transfer within the deal is not too different to what China had already signed up to when it joined the World Trade Organization (WTO) back in 2001, according to experts.

“More additional details were laid out in the deal, which could make it more useful for actual implementation in the event of a technology transfer dispute,” said Zhu Huan, a researcher at Washington D.C.-based think tank Cato Institute, “But it is hard to tell what are new in terms of U.S. demands to China,” he said.

The specific part of text in the trade deal addressing the issue said both sides are forbidden to adopt administrative means, such as licensing requirements, to pressure technology transfer from the other side. Such wording is similar to wording in the agreement China signed to join WTO in 2001.

Read the full story today at Caixin Global

Contact: Mo Yelin (yelimo@caixin.com)

Related: Update: U.S. and China Sign Phase One Trade Deal

Tesla’s Shanghai factory hasn’t been open all that long, but the American automaker is already plowing more resources into its China operations.

The company announced Wednesday on its public WeChat account that it is opening a design and research center in the country to build vehicles in “Chinese styles.”

The news comes hot on the heels of Tesla’s first deliveries of its China-made Model 3 sedans on Jan. 7.

“In order to achieve a transformation from ‘made in China’ to ‘designed in China,’ Tesla CEO Elon Musk has come up with the very cool idea of establishing a design and research center here,” Tesla said in the post, providing no details about where and when the facility will be built.

Tesla also called for talented designers to apply for jobs at the upcoming center to help fulfill the goals of “integrating the best Chinese art into Tesla’s future-facing vehicles.”

On the day when Tesla turned over its first homemade Model 3s to Chinese buyers, Musk also announced plans to produce the Model Y sports-utility vehicles at the Shanghai plant, its first manufacturing facility outside the United States.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Tesla To Deliver China-Built Model 3 Sedans Jan. 7

Hon Hai Precision Industry, the main assembler of Apple’s iPhones, will establish a joint venture with Fiat Chrysler Automobiles to develop and make electric vehicles in China.

Hon Hai and its subsidiaries will hold 50% of the venture and Fiat Chrysler the rest, the Taiwanese company said in an exchange filing. While the two companies have yet to sign a formal agreement, they plan to target the Chinese market first and consider exporting cars later. They aim to ink the agreement in the first quarter, according to a person familiar with the matter, and Hon Hai’s Hong Kong-listed unit FIT Hon Teng will also be involved. Fiat Chrysler declined to comment beyond the filing.

Hon Hai, the primary listed vehicle for Terry Gou’s Foxconn Technology Group, seeks to diversify from its role as the assembler of a swath of the world’s electronics from Macbooks to Sony Playstations. The company aims to employ its expertise in precision manufacturing and supply chain management to grow the automotive business to 10% of revenue in the long run, Chairman Young Liu told Bloomberg News.

Hon Hai and Fiat Chrysler are focusing on the Chinese market because of sheer volume, the executive said. While consumers in the country buy more electric vehicles than anywhere else in the world, sales have slumped since the government pared back subsidies amid a broader market downturn in demand.

An official at a branch of China’s central bank was placed under investigation for “suspected severe illegal and violation activities,” the Central Commission for Discipline Inspection said Thursday.

The anti-graft body didn’t disclose the specific reasons for the investigation of Chen Zhiyang, staff director of the payment settlement office at the People’s Bank of China (PBOC) Shenyang branch. But it may be related to a recent probe of several other former PBOC officials in a two-year campaign to tighten oversight of the country’s third -party payment industry, people close to the matter suggested.

In November, Yang Biao, former deputy director of the financial services department at the central bank’s Shanghai office, was investigated for “serious violations of law.” Multiple industry sources close to Yang told Caixin they suspected it was related to corruption in handling third-party payment licenses. Yang left the central bank in 2014 and has worked in senior roles at online payment companies since then.

Last month, another former PBOC official, Tao Xiaofeng, was probed, which according to people close to the matter was related to Yang’s investigation.

China’s booming e-commerce industry has drawn an increasing number of companies to the online payment sector, which is dominated by the two largest players, Alibaba’s Alipay and Tencent’s financial arm WeChat Pay.

The central bank started licensing third-party payment providers in May 2011. The regulator issued more than 270 payment licenses until 2015, when scandals and risks began to emerge. Some players in the payment sector reportedly embezzled clients’ deposits and misused their personal information.

Since 2017, the central bank stepped up oversight of the industry and revoked some licenses citing malpractice. The recent probes suggest the authorities are looking into any possible wrongdoing in issuing third-party payment licenses, some sources told Caixin.

Contact reporter Denise Jia (huijuanjia@caixin.com)

Three Chinese apps offering ticket-booking and travel-planning services saw solid growth in active users in December thanks to the country’s “travel rush,” also known as “chunyun,” when people traditionally travel home in January to be with family for the Lunar New Year holidays, according to a survey by research firm Analysys.

Zhixing Train Ticket, a train-booking app developed by a Shanghai-based firm, grew its active users by 37.65% in December, the highest growth rate among China’s apps with more than 10 million active users that month. Railway 12306, a government-backed train-booking app, came in second with a month-on-month increase of 23.26%.

Mafengwo, a travel experience-sharing app that was mired in a fake-review scandal in 2018, also broke into the rankings list for December by increasing its active users by 9.88%, claiming the 15th spot. Analysys attributed it to both chunyun and the app’s new marketing strategy, which aims to combine advice from travel-planning experts and tourism resources.

User app growth, however, was not all about chunyun and travel.

Education app Xiaoyuan Souti, which enables students to find answers by photographing their questions, also grabbed a place in the ranking list, with a 14.1% growth. Analysys said that it was because of Chinese students’ preparations for the final exams normally slated to be held in January. The education app ranked 11th.

Additionally, Analysys also made a list of the top 1,000 apps by active users in December. WeChat ranked first with 971 million active users in the month, followed by QQ and Alipay, which had 763 million and 696 million users respectively.

Contact reporter Ding Yi (yiding@caixin.com)

Related: TikTok Outperforms Instagram to Become World’s Fourth Most Downloaded App in 2019

Beijing and Shanghai have witnessed dramatic improvements in air quality so far this winter but progress has slowed and even reversed in many other parts of China, according to a report released Thursday by the Center for Research on Energy and Clean Air (CREA), an environmental research organization.

An uptick in coal and oil consumption as well as rising industrial output drove pollution increases outside the greater Beijing and Shanghai regions, which the government considers high-priority areas for air quality. In particular, southern and northeastern provinces saw significant increases in PM2.5, ultrafine particles that can pass through the lungs into the bloodstream and damage organs in the human body.

The report surveys year-on-year changes in air quality from October through December 2019, the first three months of China’s official winter season. It comes as China grapples with an economic slowdown that has spurred a fallback onto coal-fired power generation and other highly polluting industries.

“As coal and oil consumption have increased in the past two years, progress on air quality has relied entirely on better filters and moving industrial production away from priority areas. Continued improvements require accelerating the clean-energy transition,” said CREA lead analyst Lauri Myllyvirta.

Read the full story on Caixin Global later today.

www.caixinglobal.com

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: China’s Big Cities Get Cleaner Air, But at What Cost?

Huawei has enjoined British developers to participate in the construction of its own app ecosystem as part of the embattled Chinese tech firm’s global efforts to mitigate the effects of its U.S. trade blacklisting.

The Trump administration added Huawei to its so-called Entity List in May, forcing U.S. tech giant Google to block the Chinese company from receiving updates to the licensed version of its Android operating system that runs on many Huawei devices. The move effectively stops Huawei from running Google-developed apps on its smartphones.

That has prompted the Chinese company to court developers worldwide capable of building a replacement system. At a developers’ conference held Wednesday in London, Huawei unveiled a £20 million ($26 million) incentive plan to encourage British and Irish developers to integrate their apps into Huawei Mobile Services (HMS), an alternative to Google Mobile Services, according to state broadcaster CCTV.

The company said it had launched 24 “kits” to help developers create apps for Huawei App Gallery, its equivalent to Google Play Store, broadcaster CGTN reported. In return, app developers will be given direct access to Huawei’s newest hardware and artificial intelligence technologies and earn 85% of the revenue generated from apps. Currently, Huawei takes a 30% revenue cut from most developers.

The incentive plan comes three weeks after the Economic Times, an Indian newspaper, reported that Huawei is encouraging developers in the South Asian nation to integrate their apps into HMS under a dedicated $1 billion global fund.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Huawei to Launch Alternative to Google Mobile in India Amid Tensions With U.S.

Tencent’s instant-messaging app WeChat is testing a new feature that allows public bloggers to add paywalls to their posts, the company said Wednesday.

Qualified bloggers can charge readers up to 208 yuan ($30) for each article, and WeChat will charge the bloggers a technical service fee.

WeChat, the most popular social media app in China with 1.15 billion monthly active users as of September, said the feature aims to motivate original content publishers to produce more posts with higher quality.

Public blogging accounts, which can be run by individuals or companies, currently make money from in-app advertisements, which are negotiated directly between advertisers and blog owners, with WeChat not taking a cut. Readers can also voluntarily tip bloggers directly via a function called Zan Shang.

Android users can pay with WeChat Pay, Tencent’s mobile payment method. Users with iOS, however, must use Apple’s in-app purchase service, meaning that Apple will take a cut of as much as 30% for each transaction.

It’s unclear how bloggers and readers will respond to the new feature as Chinese users are used to large amounts of free content shared on the social media platform.

Contact reporter Denise Jia (huijuanjia@caixin.com)

When it comes to the internet, foreign investors just can’t seem to get enough of China.

The total value of listed Chinese internet firms hit a record 11.6 trillion yuan ($1.7 trillion) in last year’s fourth quarter, up 18.3% from the previous quarter, according to a report by the China Academy of Information and Communications Technology (CAICT).

Online titans Alibaba and Tencent combined accounted for more than 60% of the value of those firms, with market caps of nearly 4 trillion yuan and 3.21 trillion yuan, respectively. Meituan Dianping came in at a distant third with 530 billion yuan, the report said.

During the quarter, Chinese names accounted for nine of the world’s 30 largest listed internet companies, the CAICT said, without being more specific. Of the top 30, 18 came from the U.S., while Japan, South Korea and Brazil each had one.

Operating revenue of China’s internet firms grew 22.4% to 1.08 trillion yuan in the first 11 months of 2019, according to a report issued on the last day of 2019 by China’s telecoms regulator. The CAICT is affiliated to the regulator, which publishes revenue data for the country’s internet sector every month.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Chinese Internet Companies’ Revenue Topped 1 Trillion Yuan in 2019

Beijing Enlight Media, the studio behind last year’s big animated hit Nezha, said it will invest about 1 billion yuan ($145 million) over the next five years to adapt comic content into animated productions. 

Company president Wang Changtian said the investment will aim to produce ten productions. The announcement was made on Tuesday at a media event to launch a comic art platform mobile app called “Yi Ben Man Hua”.

The app was launched by Beijing Enlight’s subsidiary, Caitiaowu, which was established in 2015 to focus on creating comic content and producing animated films. “Yi Ben Man Hua”’s focus will be on making comics that are suitable for adapting into animations focusing on themes such as mythology and fantasy, according to Jiang Zibin, the chief editor of the app.  

The app currently has 21 comic creators with a total of 47 comic titles available, most of which are free, according to Jiang.

The market leader in this area is Tencent-backed Kuaikan, which boast about 3,000 creators and more than 3,000 available titles.

Read the full story at Caixin Global later today

Related: Smash Hit ‘Nezha’ Poised to Break Record for Animated Films

Contact Reporter Mo Yelin (yelinmo@caixin.com)

JD.com has reiterated its strategy to expand into China’s smaller cities, which have become emerging drivers of growth for the country’s online retailers.

Speaking at an annual company conference Sunday, Xu Lei, the CEO of JD’s retail arm, said in the next three years the company will ramp up its expansion into so-called lower-tier cities where consumption potential is not yet fully realized.

JD’s plan is based on forecasts that the emergence by 2020 of what Chinese politicians call a “moderately prosperous society” will lead to sweeping consumption upgrades in less-developed cities. China is on track to double its gross national product and per capita income in 2020 compared with 2010 levels.

As competition in China’s big cities intensifies, lower-tier cities represent a new opportunity for e-commerce giants. In February, JD.com founder Richard Liu outlined plans to penetrate deeper into the country’s less-developed areas.

And in September, JD.com upgraded its group-buying service, a move some observers said could help the Beijing-based online retailer go toe-to-toe with rival Pinduoduo, which has long been popular in smaller cities and rural areas.

Consumption in China’s lower-tier cities is expected to surge from $2.3 trillion in 2017 to $6.9 trillion in 2030 thanks to favorable government policies, a population boom, higher household income, and a stronger appetite to spend, according to consulting firm Morgan Stanley.

Contact reporter Ding Yi (yiding@caixin.com)

Related: JD.com’s Logistics Unit Weighs $10 Billion IPO, Reuters Reports

Things may be rosy for big tech names like Alibaba and JD.com, but don’t tell that to China’s much larger field of high-tech startups.

The latest data are pointing to growing funding gap between the country’s tech giants and the lower-profile startups that are likely to produce the leaders of tomorrow. One new government survey shows that venture funding for Chinese tech startups plunged by 50% to just $6.84 billion in last year’s fourth quarter. The situation was already getting bad early in the year, with investment dropping by an even steeper 77% to $9.4 billion in the second quarter, according to an earlier Bloomberg report.

The situation is almost the opposite at the other end of the spectrum, with big-name tech having little difficulty raising funds over the last year. Alibaba led the way with its secondary IPO in Hong Kong last year, becoming one of 2019’s largest offerings when it raised around $13 billion in November. More recently, e-commerce rival JD.com raised $1 billion last week through a bond issue.

It’s not only the more established, profitable big names that are cashing in. Last week money-losing high-tech coffee maker Luckin announced plans to raise around $800 million through a bond and secondary share offering. And about a year ago, money-losing discount e-commerce specialist Pinduoduo also raised $1.4 billion through a secondary share offer after its 2018 IPO.

So what’s happening here?

In a nutshell, investors seem to be blowing off China’s high-tech future in favor of feasting on its more mature present. That’s probably not too surprising given the many uncertainties surrounding China’s economy right now.

The concurrent feast-and-famine probably also owes to differences between domestic and international investors. Venture capital that tends to fund startups is dominated by domestic firms that are facing cash shortages as China’s local funding sources become more conservative. But secondary offerings are happening in global markets where investors still have cash and are more confident of that the big names can survive the economic slowdown.

The bottom line is that China’s high-tech startups appear to be facing a funding winter. That means the startups of today are far more likely to be out of business two or three years from now than their predecessors from headier times.

To read the full column, click here.

Contact reporter Doug Young (dougyoung@caixin.com)

Beyond Meat Inc. rose Tuesday after a report that the faux-meat maker hopes to expand into the Chinese mainland market this year added to the stock’s recent momentum.

The company’s Executive Chairman Seth Goldman said “we haven’t announced anything, but we are expected to do something this year,” according to China’s Xinhua news agency. His comment came Monday on the sidelines of the National Retail Federation’s 2020 expo, Xinhua said.

Shares of Beyond Meat climbed as much as 18% to the highest since October, before paring gains. The stock remains on pace for its fourth straight advance, the longest such streak since November.

Both Beyond Meat and closely held rival Impossible Foods have been eyeing China, which represents about 27% of the world’s meat consumption by volume. In October, Beyond CEO Ethan Brown said in an interview with Bloomberg that “we want to be as aggressive as we can.”

Impossible Foods Chief Financial Officer David Lee told Bloomberg Television last Monday that while the Redwood City, California-based company hadn’t announced specific China plans, its “mission is global.”

“With 40% of meat being consumed in Asia, we are very focused on ensuring we can enter markets like China as soon as possible,” Lee said.

Related: Impossible Foods Salivates Over China Pork Lovers

Equipment suppliers for electronic toll collection (ETC) system in China are enjoying explosive business as government pushes forward the use of the automatic toll road payment systems nationwide.

Beijing Wanji Technology Co. Ltd., a Shenzhen-listed manufacturer of ETC devices, Tuesday estimated nearly 140-fold growth in net profit thanks to surging sales of ETC-related products such as transponders. The company said it expects to report 2019 profit between 729 million yuan and 917 million yuan ($106 million – $133 million).

Beijing Wanji is among the biggest winners in China’s push to shift from manned toll booths to cashless, electronic tolling systems — which allow cars to whizz past unmanned toll booths without stopping.

Despite the upbeat earnings, Beijing Wanji’s shares slumped by the 10% daily limit Tuesday, reflecting investors’ concerns over future growth momentum. Beijing Wanji forecast risks of slower growth in 2020 as demand eases.

The National Development and Reform Commission and the transport ministry set a goal of having ETC devices installed on 90% of vehicles on expressways in China by the end of 2019.

According to the Ministry of Transport, ETC users totaled 197 million as of Dec. 23, a rise of 120 million from the same time a year ago.

Contact reporter Han Wei (weihan@caixin.com)

Related: China Races Ahead with 192 Million Drivers Using Electric Toll Collection System

The operator of Pizza Hut and KFC restaurants in China is joining the parade of U.S.-traded Chinese companies filing for a second listing in Hong Kong, Bloomberg reported Tuesday.

New York-listed Yum China Holdings Inc. is working with China International Capital Corp. and Goldman Sachs Group Inc. on the preparations of the share sale, which could take place as soon as this year, the report said citing people familiar with the matter.

Last week, IFR reported that Yum China is considering raising $2 billion in a Hong Kong listing.

The deal follows e-commerce giant Alibaba Group Holding Ltd.’s $13 billion share sale in Hong Kong in November. The city’s stock exchange operator is reportedly in discussions with Chinese technology companies including Trip.com Group Ltd. and NetEase Inc. for possible share sales.

Yum China, which was spun off from Louisville, Kentucky-based Yum! Brands Inc. in 2016, operated more than 8,900 restaurants across China as of the end of September. It hired about 450,000 people in the country, according the latest data released by the company.

Contact reporter Han Wei (weihan@caixin.com)

Related: Hong Kong Bourse in Talks With Ctrip, Netease for New Listings