One of the most significant and fundamental ways in which the Great Decoupling is unfolding is in terms of data. Foreign companies operating in China are now required to keep all relevant data in-country—that’s sort of old news—but Chinese companies and their data are more important and are very much the focus. The top news this week is that Didi has decided to de-list from New York and re-list in Hong Kong, at the bequest of the Center. The reason is the vast amount of data the company holds on passengers of the hire cars it works with. But it goes further. The whole process of Chinese companies raising money abroad is being re-thought as a result of, among other things the erection of this DGW—Data Great Wall.
The basic mechanism used to list most China tech companies in the world’s capital markets over the past twenty years and more has been the VIE structure. But it’s clear that the days of this arguably illegal but highly useful device are numbered. The Center doesn’t want outside investors to have any connection to these companies and they list in the China markets or not at all. China data stays in China. This is leading, of course, to the creation of two massive wells of data—one Western and the other Chinese—and attached to the wells will be a growing range of applications that analyze and manipulate the data for all sorts of ends, commercial and non-commercial. How does that play out? Answers in the form of film scripts, please.
The other news worth pondering this week were comments from the former Japanese prime minister, Mr Abe, about Taiwan. He talked about the concerns of Japan with regard to the possibility of some move to shift the status quo, and the reaction from Beijing was swift and virulent. It’s likely his comments were carefully considered and are reflective of the views of the Japanese establishment. It wouldn’t be the key factor in any crisis, but it would be a factor.
Keep warm, if that is appropriate, and enjoy this first weekend of December.