Jul 27 2023
Shein sued Temu. Temu sued Shein. The war over fast fashion is heating up.

This story first appeared in China Report, MIT Technology Review’s newsletter about technology developments in China. Sign up to receive it in your inbox every Tuesday.

Even though I know that Temu and Shein, two Chinese e-commerce platforms, occupy the same off-price shopping space, I have to admit I didn’t expect the tensions between them to escalate so quickly.

Last week Temu, the young shopping platform currently bombarding US users with social ads, filed an antitrust lawsuit in federal court against Shein, the older shopping website that has been massively popular among Gen-Z consumers in recent years. The accusations in the suit are quite revelatory if you want to learn more about the state of the “ultra-fast fashion” business.

As regular readers know, I have covered both platforms repeatedly, writing about how Temu bought its way into public attention, how Shein messed up its influencer campaign, and my brief personal obsession with Shein. These reads should be helpful if you want to understand the two platforms, which are rare examples of Chinese tech companies still trying to become mass consumer brands in the US and finding at least some success despite changeable policies at home and political hostility in the US. 

Yet, perhaps unsurprisingly, they don’t seem to bond over their shared difficulties. Instead, the competition between Shein and Temu is starting to look like a race to the bottom. The two platforms are engaged in an escalating legal battle over what each claims is unfair competition. 

It started in December, when Shein sued Temu over intellectual-property infringement. Specifically, Shein accused Temu of misleading consumers into thinking they were the same brand, allegedly selling products copyrighted by Shein and displaying the word “Shein” in search ads that led to Temu’s website. It also claimed that Temu is behind three imposter Twitter accounts using names like “Shein_USA” and asking fans to support “the new Twitter of Shein” while posting links to Temu’s app and website. The two companies are still fighting over this case in court.

Now Temu is striking back and accusing Shein of violating US antitrust law by forbidding suppliers from working with the newer platform. According to the court filing, Temu says Shein has asked all of its more than 8,000 manufacturers to sign exclusive agreements and “loyalty oaths” that specifically prevent them from selling on Temu. It also claims Shein is using false copyright infringement claims to try to get Temu to take down certain products that Temu sells at cheaper prices than Shein does.

“For a long time, we have exercised significant restraint and refrained from pursuing legal actions. However, Shein’s escalating attacks leave us no choice but to take legal measures to defend our rights and the rights of those merchants doing business on Temu, as well as the consumers’ rights to a wide variety of affordable products,” Temu told MIT Technology Review.

Meanwhile, a Shein spokesperson told MIT Technology Review, “We believe this lawsuit is without merit and we will vigorously defend ourselves.” 

While the validity of Temu’s claims is up for the court to decide, reading the filing offers quite an education—it paints a detailed picture of the ultra-fast-fashion industry that Shein and Temu are competing in, and more specifically the supply-chain model that has been essential to Shein’s success over the past several years. 

To take a step back: Shein doesn’t operate like traditional consumer brands. Instead of owning factories that make products for it exclusively, the company works with a vast network of independent Chinese factories. Most times, these factories create the designs, manufacture the products, and sell them to Shein, entrusting the platform to deal with other processes, like listing, customer service, and shipping. 

Shein offers these suppliers a steady stream of overseas orders. In exchange, it buys the products at very low prices and requests that the suppliers remain loyal to the brand. “As the dominant ultra-fast-fashion retailer, Shein knows that manufacturers need Shein’s volume and its access to the US market and it is, therefore, able to coerce manufacturers into arrangements that force manufacturers not to do business with Temu,” says Temu’s filing. 

This has apparently created a big headache for Temu. The new player’s business model seeks to replicate the success of Shein’s in many ways. Both have capitalized on cheap international shipping, China’s strong manufacturing capacity, and, crucially, the supply chain that Shein pioneered.

For a while, the companies differentiated themselves by the kind of products they sold: Shein is more about apparel, while Temu is more about household products. But each platform is now looking at the other’s primary product lines too, making the companies more direct competitors—meaning that they are going after the same suppliers.

Since both of them rely heavily on maintaining an expansive network of low-cost suppliers, it would be devastating if one platform—especially the more established one—forced producers to choose between the two. This is essentially what Temu is accusing Shein of doing.

(To be fair, Temu itself is no stranger to accusations of coercion against suppliers. Many Chinese sellers have complained that the platform forces them to accept extremely low prices or arbitrarily ends their business when it finds a cheaper supplier.) 

Historically, exclusivity agreements have not been uncommon in Chinese tech fights. For more than a decade, companies like Meituan and Alibaba’s Taobao forbade vendors from working with competitor platforms, until the Chinese government explicitly banned such deals in an antitrust push in 2021.

But publicly exposing this practice today in the US doesn’t seem like a wise thing to do, at least in my opinion. The popularity of Shein and Temu has already caught the eyes of politicians and policy experts in Washington, who see them as the next privacy or intellectual-property threat from China. And what they are accusing each other of doing will almost certainly become ammunition for future criticism. In that case, maybe neither of them will be able to survive in the US market.

What do you think of the business model of ultra-fast fashion? Let me know your thoughts at zeyi@technologyreview.com.

Catch up with China

1. Two US congressional committees have announced investigations into Ford’s battery plant in Michigan, which sources technologies from a Chinese company. They’re concerned the batteries could exploit a loophole in the Inflation Reduction Act. (Quartz)

2. Meanwhile, congressional Republicans are divided over whether the US should restrict outward investment in China. (Politico)

3. A Chinese economist estimates the youth unemployment rate in the country at 46.5%, two times the official figure. (Reuters $)

4. In another example of conflicting numerical narratives, official data showed that the number of cremations in an eastern province in China increased 70% in the first quarter of 2023 compared with last year, which suggests a much larger covid death toll than Beijing admits. Then the numbers were scrubbed from the web. (New York Times $)

5. Beijing officials met with global venture capitalists and private equity investors to quell their anxieties about investing in China. (Bloomberg $)

6. When Chinese companies have gone public overseas, their filings have usually included a section that warns investors of the policy risks in China. Now Chinese regulators are asking them to sugarcoat it. (Reuters $)

7. Pandemic travel restrictions have made Chinese postpartum nannies, who take care of new mothers, highly in demand in the Bay Area. Prospective clients need to make reservations seven months in advance. (San Francisco Chronicle $)

Lost in translation

Now that China has terminated all its covid prevention programs, mRNA companies in the country are struggling to stay relevant, the business publication Jiemian reports. Since China never approved any foreign-made mRNA covid vaccines for use in the country, a few domestic companies had high hopes that they could offer homegrown alternatives. At their peak, these mRNA companies secured billions of dollars of venture capital and even acquired emergency-use approvals for vaccines in countries like Laos and Indonesia. However, none of the Chinese mRNA products cleared final clinical trials or won approval for commercial use at home. One of the leading companies, Stermina, suspended its Shanghai factory operation earlier this month because of inadequate demand. As market interest in covid vaccines wanes, these companies are announcing pivots in their research to mRNA vaccines against cancers or rabies.

One more thing

Just how popular are bubble teas? Right now, there are six Chinese bubble tea makers that plan to file to go public—but in the US or Hong Kong, Bloomberg notes, and not at home. It turns out they can’t list on domestic stock markets; the Chinese stock regulator apparently thinks their businesses are too risky. I, a loyal customer, beg to differ.

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Jul 21 2023
It’s still a challenge to spot Chinese state media social accounts

This story first appeared in China Report, MIT Technology Review’s newsletter about technology developments in China. Sign up to receive it in your inbox every Tuesday.

It’s no secret that Chinese state-owned media are active on Western social platforms, but sometimes they take a covert approach and distance themselves from China, perhaps to reach more unsuspecting audiences. 

Such operations have been found to target Chinese- and English-speaking users in the past. Now, a study published last week has discovered another network of Twitter accounts that seems to be obscuring its China ties. This time, it’s made up of Spanish-language news accounts targeting Latin America.

Sandra Quincoses, an intelligence advisor at the cybersecurity research firm Nisos, found three accounts posting news about Paraguay, Chile, and Costa Rica on Twitter. The accounts seem to be associated with three Chinese-language newspapers based in those countries. All three are subsidiaries of a Brazil-based Chinese community newspaper called South America Overseas Chinese Press Network.

Very few of the posts are overtly political. The content, which is often the same in all three accounts, usually consists of Spanish-language news about Chinese culture, Chinese viral videos, and one panda post every few days. 

The problematic part, Quincoses says, is that they obscure the sources of their news posts. The accounts often post articles from China News Service (CNS), one of the most prominent Chinese state-owned publications, but they do so without attribution.

Sometimes the accounts will go halfway toward attribution. They might specify, for example, that the news is from “Twitter •mundo_china” without actually tagging the @mundo_China, an account affiliated with the Chinese state broadcaster. 

“When you do not mention Twitter accounts with the proper “@” format, tools that collect from Twitter to do analysis don’t pick up on that,” says Quincoses. As a result, these accounts can fly under the radar of social network analysis tools, making it hard for researchers to associate them with accounts that are clearly related to the Chinese government.

It’s unclear whether these accounts and the newspapers they belong to are controlled directly by Chinese state media. But as obscure as they are, there are real Chinese diplomats following them, suggesting official approval. And one government outlet—CNS—is working closely with these newspapers.

CNS is directly owned by the Chinese Communist Party’s United Front Work Department. In the 1990s, it started fostering ties with outlets aimed at Chinese immigrant communities around the world. 

Today, CNS and these immigrant community newspapers often co-publish articles, and CNS invites executives from the publications to visit China for a conference called the Forum on the Global Chinese Language Media. Some of these publications have often been accused of being controlled or even owned by CNS, the main example being the China Press, a California-based publication.

As media outlets enter the digital age, there is more evidence that these overseas diaspora publications have close ties with CNS. Sinoing (also known as Beijing Zhongxin Chinese Technology Development or Beijing Zhongxin Chinese Media Service), a wholly owned subsidiary of CNS, is the developer behind 36 such news websites across six continents, the Nisos report says. It has also made mobile apps for nearly a dozen such outlets, including the South America Overseas Chinese Press Network, which owns the three Twitter accounts. These apps are also particularly invasive when it comes to data gathering, the Nisos report says.

At the same time, in a hiring post for an overseas social media manager, CNS explicitly wrote in the job description that the work involves “setting up and managing medium-level accounts and covert accounts on overseas social platforms.” 

It’s unclear whether the three Twitter accounts identified in this report are operated by CNS. If this is indeed a covert operation, the job has been done a little too well. Though they post several times a day, two of the accounts have followers in the single digits, while the other one has around 80 followers—including a few real Chinese diplomats to Spanish-speaking countries. Most of the posts have received minimal engagement.

The lack of success is consistent with China’s social media propaganda campaigns in the past. This April, Google identified over 100,000 accounts in “a spammy influence network linked to China,” but the majority of accounts had 0 subscribers, and over 80% of their videos had fewer than 100 views. Twitter and Facebook identified similar unsuccessful attempts in the past, too. 

Of all the state actors she has studied, Quincoses says, China is the least direct when it comes to the intentions of such networks. They could be playing the long game, she says. 

Or maybe they just haven’t figured out how to run covert Twitter accounts effectively. 

According to Quincoses, these accounts were never among those Twitter labeled as government-funded media (a practice it dropped in April). This could be related to the limited traction the accounts got, or to the efforts they made to obscure their ties to Chinese state media.

As other platforms are emerging to take on Twitter, Chinese state-owned publications have begun to appear on them too. Xinhua News Service, China’s main state-owned news agency, has several accounts on Mastodon, one of which still posts regularly. And CGTN, the country’s state broadcaster, has an account on Threads that already has over 50,000 followers.

Responding to an inquiry from the Australian government, Meta said it plans to add labels for government-affiliated media soon. But can it target accounts like these that are trying (and failing) to promote China’s image? They may be small fish now, but it’s better to catch them early before they grow influential enough, like their more successful peers from Russia. 

Do social media users need better tools to sort out what might be government-affiliated media? Tell me at zeyi@technologyreview.com.

Catch up with China

1. John Kerry, the US climate envoy, is visiting China to restart climate negotiations between the two countries. (CNN)

2. Executives of American chip companies, including Intel, Qualcomm, and Nvidia, are flocking to Washington to talk the administration out of more curbs against China. (Bloomberg $)

3. The Taiwanese chip giant TSMC is known for harsh workplace rules imposed to protect its trade secrets, including a ban on Apple Watches at work. Now, facing difficulty attracting talent, the company is relaxing those rules. (The Information $)

4. A Kenyan former content moderator for TikTok is threatening to sue the app and its local content moderation contractor, claiming PTSD and unfair dismissal. (Time)

5. Amazon sellers say their whole stores—including images, descriptions, and even product testing certificates—have been cloned by sellers on Temu, the rising cross-broader e-commerce platform from China. (Wired $)  

6. Microsoft says Chinese hackers accessed the email accounts of Commerce Secretary Gina Raimondo and other US officials in June, but they didn’t get any classified email. (New York Times $)

7. Badiucao, an exiled Chinese political cartoonist, is carefully navigating security risks as he tours his artworks around the world. (The Spectator)

Lost in translation

As image-making AIs become increasingly popular, some Chinese fashion brands are ditching real human models and opting for AI-generated ones. Chinese publication AI Lanmeihui reports that some Stable Diffusion users are charging Chinese vendors 15 RMB (about $2) for an AI-generated product catalogue photo. A specialized website (still built on the open-source Stable Diffusion algorithm) allows vendors to customize the look of the model for just $2.80. Meanwhile, the cost of a photography session with a human model usually comes down to about $14 per photo, according to professional model Zhao Xuan. AI has already started taking jobs from human models, Zhao said, and it’s promoting unrealistic beauty standards in the industry. “The emergence of AI models is popularizing extreme aesthetics and causing professional models to have body shame,” she said. And the technology is still in its early stages: commercially available services often take more than a week, and the quality of the result is variable.

A collage of three screenshots of models generated by AI.

SOCIAL MEDIA SCREENSHOTS COLLECTED BY AI LANMEIHUI.

One more thing

Some Chinese workers are being asked to use AI tools but find that the process of tinkering with them takes too much time. As a result, they’ve been faking using ChatGPT or Midjourney and instead doing their job the old-fashioned way. One social media copywriter managed to mimic ChatGPT’s writing style so well that his boss was fully convinced it had to be the work of an AI. The boss then showed it around the office, asking other colleagues to generate articles like this too, according to the Chinese publication Jingzhe Qingnian.

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Jul 16 2023
The US-China chip war is still escalating

This story first appeared in China Report, MIT Technology Review’s newsletter about technology developments in China. Sign up to receive it in your inbox every Tuesday.

The temperature of the US-China tech conflict just keeps rising.

Last week, the Chinese Ministry of Commerce announced a new export license system for gallium and germanium, two elements that are used to make computer chips, fiber optics, solar cells, and other tech devices.

Most experts see the move as China’s most significant retaliation against the West’s semiconductor tech blockade, which expanded dramatically last October when the US limited the export to China of the most cutting-edge chips and the equipment capable of making them. 

Earlier this year, China responded by putting Raytheon and Lockheed Martin on a list of unreliable entities and banned domestic companies from buying chips from the American company Micron. Yet none of these moves could rival the global impact of the gallium/germanium export control. By putting a chokehold on these two raw materials, China is signaling that it, in turn, can cause pain for the Western tech system and push other countries to rethink the curbs they put on China.

But as I reported yesterday, China’s new export controls may not have much long-term impact. “Export control is not as effective if the technologies are available in other markets,” Sarah Bauerle Danzman, an associate professor of international studies at Indiana University Bloomington, told me. Since the technology to produce gallium and germanium is very mature, it won’t be too hard for mines in other countries to ramp up their production, although it will take time, investment, policy incentives, and maybe technological improvement to make the process more environmentally friendly.

So what happens now? Half of 2023 is now behind us, and even though there have been a few diplomatic events showing the US-China relationship warming up, like trips to China made by US officials Antony Blinken and Janet Yellen, the tensions on the technological front are only getting worse.

When the US instituted its chip-related export restrictions in October, it wasn’t clear how much of an impact they would have, because the US doesn’t control the entirety of the semiconductor supply chain. Analysts said one of the biggest outstanding questions was the extent to which the US could persuade its allies to join the blockade. 

Now the US has managed to get the key players on board. In May, Japan announced that it is limiting the export of 23 types of equipment used in a variety of chipmaking processes. It even went further than the original US rules. The US limited the export of tools for making the most cutting-edge chips—those of the 14-nanometer generation and under. Japan’s restrictions extend to older, less-advanced chip generations (all the way to the 45-nanometer level), which has the Chinese semiconductor industry worried that production of basic chips used in everyday products, like cars, will also be affected.

At the end of June, the Netherlands followed suit and announced that it will limit the export to China of deep ultraviolet (DUV) lithography machines used to pattern chips. That’s also an escalation of the previous rules, which since 2019 had only limited export of the most advanced extreme ultraviolet (EUV) lithography machines.

These expanding restrictions likely prompted China to take a page from its enemies’ playbook by instituting the controls on gallium and germanium. 

Yellen’s visit last week shows that this back-and-forth retaliation between China and the US-led bloc is not ending anytime soon. Both Yellen and the Chinese leaders expressed their concern at the meeting about the other side’s export controls, yet neither said anything about backing down. 

If more aggressive actions are taken soon, we may see the tech war expand out of the semiconductor field to involve things like battery technologies. As I explained in my piece on Monday, that’s where China would have a larger advantage.

Do you believe the technological tensions between the US and China will worsen from here? Let me know your thoughts at zeyi@technologyreview.com.

Catch up with China

1. Tesla is laying off some battery manufacturing workers in China as a result of the cutthroat electric-vehicle price competition in the country. (Bloomberg $)

2. China’s top EV maker, BYD, is building three new factories in Brazil to make batteries, EVs, and hybrid cars. They will be built at the location of an old Ford plant. (Quartz)

3. Shenzhen, the city often seen as the Silicon Valley of China, is facing population decline for the first time in decades. (Nikkei Asia $)

4. Five people were arrested by the Hong Kong police for involvement in creating an online shopping app to map out local businesses that support the pro-democracy movement. (Hong Kong Free Press)

5. There’s now an official app for learning how to do journalism in China—with online courses taught about the Marxist view of journalism, why the party needs to control the press, and how to be an “influencer-style journalist.” (China Media Project)

6. During her visit, Yellen sat down for dinner with six female Chinese economists. Then they were called traitors online. (Bloomberg $)

7. A new study says a rapidly growing number of scientists of Chinese descent have left the US since 2018, the year the US Department of Justice launched its “China Initiative.” (Inside Higher Ed). An investigation of the initiative by MIT Technology Review published in late 2021 showed it had shifted its focus from economic espionage to “research integrity.” The initiative was officially shut down in 2022.

8. Threads, the new Twitter competitor released by Meta, hit the top five on Apple’s China app store even though Chinese users have to access the platform with a VPN. (TechCrunch)

Lost in translation

On July 5, the famous Hong Kong singer CoCo Lee died by suicide after having battled depression for several years. The tragic incident again highlighted the importance of depression treatment, which is often inaccessible in China. As the Chinese publication Xin Kuai Bao reported, fewer than 10% of patients diagnosed with depression in China have received any kind of medical treatment. 

But in recent years, as several patents for popular Western brand-name depression drugs have expired, Chinese pharmaceutical companies have ramped up their production of local generic alternatives. There’s also a fierce race to invent home-grown treatments. Last November, the first domestically designed depression drug was approved for sale in China, marking a new era for the industry. There are 17 more domestic treatments in trials right now.

One more thing

Every time high-profile US visitors come to China, Chinese social media always fixates on one thing: what they ate. Apparently, Janet Yellen is a fan of the wild mushrooms from China’s southwest border, which her group ordered four times in one dinner. The specific mushroom, called Jian Shou Qing in China, is also known for having psychedelic effects if not cooked properly. Now the restaurant is cashing in by offering Yellen’s dinner choices as a set, branded the “God of Money” menu, according to Quartz.

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Jul 11 2023
China just fought back in the semiconductor exports war. Here’s what you need to know.

MIT Technology Review Explains: Let our writers untangle the complex, messy world of technology to help you understand what’s coming next. You can read more here.

China has been on the receiving end of semiconductor export restrictions for years. Now, it is striking back with the same tactic. On July 3, the Chinese Ministry of Commerce announced that the export of gallium and germanium, two elements used in producing chips, solar panels, and fiber optics, will soon be subject to a license system for national security reasons. That means exports of the materials will need to be approved by the government, and Western companies that rely on them could have a hard time securing a consistent supply from China. 

The move follows years of restrictions by the US and Western allies on exports of cutting-edge technologies like high-performing chips, lithography machines, and even chip design software. The policies have created a bottleneck for China’s tech growth, especially for a few major companies like Huawei.

China’s announcement is a clear signal it aims to retaliate, says Kevin Klyman, a technology researcher on the Avoiding Great Power War Project at the Harvard Kennedy School’s Belfer Center for Science and International Affairs. “Every day the technology war is getting worse,” Klyman says. “This is a notable day that accelerated things further.” 

But even though they immediately sent the price of gallium and germanium up, China’s new curbs are not likely to hit the US as hard as American export restrictions have hit China. These two raw materials, though they are important, still have relatively niche applications in the semiconductor industry. And while China dominates gallium and germanium production, other countries could ramp up their own production and export enough to substitute for the supply from China.

Here’s a quick look at where things stand and what comes next.

What are gallium and germanium? What are they used for?

Gallium and germanium are two chemical elements that are commonly extracted along with more familiar minerals. Gallium is usually produced in the process of mining zinc and alumina, while germanium is acquired during zinc mining or separated from brown coal.

“Beijing likely chose gallium and germanium because both are important for semiconductor manufacturing,” says Felix Chang, a senior fellow at the Foreign Policy Research Institute. “That is especially true for germanium, which is prized for its high electrical conductivity. Meanwhile, gallium has unusual crystallization properties that lead to some useful alloying effects.” Gallium is used in the manufacture of radio communication equipment and LED displays, while germanium is widely used in fiber optics, infrared optics, and solar cells. These applications also make them useful components in modern weapons.

Currently, about 60% of the world’s germanium and 90% of the world’s gallium is produced in China, according to the Chinese metal industry research firm Antaike. But because China doesn’t have the capacity to turn these materials into later-stage semiconductor or optical products, a big chunk of it is exported to companies in Japan and Europe. 

What’s the immediate impact?

The new export license regime will start being implemented on August 1. Right after it was announced, purchase orders reportedly began swarming into Chinese gallium and germanium producers. The stockpiling has raised the price of the two materials, as well as the stock prices of Chinese companies that produce them. 

AXT, an American maker of semiconductor wafers, quickly responded to say that its China-based subsidiary would apply for an export license to maintain business as usual.

It’s important to remember that this is not a ban but a licensing system, which means the impact will depend on how difficult it is to secure an export license. “We see no evidence that no licenses will be granted. They will not be granted to US defense contractors, I imagine,” says Klyman, who notes that American defense companies Raytheon and Lockheed Martin were the first two names added to China’s newly established “unreliable entity list” earlier this year.

But the ability to control who can be granted the permits will give China more leverage in trade negotiations with other countries, particularly those—like Japan and Korea—that rely on such imports for their own semiconductor industries. 

Why is China announcing these restrictions now?

The US government has spent the past year lobbying allies to join forces in restricting China from sourcing high-end chipmaking equipment like lithography machines, and the results are showing. In June, both Japan and the Netherlands announced their decisions to restrict the export of chip-related materials and equipment to China. China certainly is feeling the pressure, and its attempts to negotiate with the US on the restrictions have been unsuccessful.

Many experts point to the China visit of Janet Yellen, the US secretary of the treasury, which happened last week, as the major reason these export controls were announced when they were. “Beijing was … sending a signal before the Yellen visit that China will play the game of controlling exports in key sectors of concern to the US government,” says Paul Triolo, a senior vice president for China and technology policy lead at the consultancy Albright Stonebridge Group. Control of gallium and germanium is one of the tools Beijing wields to push the US and its allies back to the negotiation table.

There’s also a strategic concern that holding onto these critical materials could serve China’s interests if a conflict breaks out, says Xiaomeng Lu, director of geotechnology practice at the Eurasia Group. “Russia has been pretty much blocked out of the global tech ecosystem at this point … but they still have oil, they still have food, and that’s how they survived. That’s the worst-case scenario Chinese leadership keep at the back of their mind,” Lu says. “If the worst-case scenario happens, we need to hold the raw materials that we have in our reserve as much as possible.”

What will happen to the gallium and germanium supply chain?

The Chinese government may be seizing stronger control of the supply chain for now, but the added uncertainty of the licensing regime will cause foreign importers of gallium and germanium to look elsewhere for a more reliable supply. Most people agree that these export restrictions may not be beneficial to China in the long run.

“My read is that the US government is happy about this move,” says Klyman. “This forces suppliers to diversify their supply of gallium, germanium, and other critical minerals, and it will cause markets to reinterpret the value of mining in North America and other regions.”

Mining companies in Congo and Russia have already said they intend to increase production of germanium to meet demand. Some Western countries, including the US, Canada, Germany, and Japan, also produce these materials, but ramping up production could be difficult. The mining process causes significant pollution, which was one of the reasons production was offshored to China in the beginning.

“The West will have to accelerate its innovation of new processes to separate and purify rare-earth metals. Otherwise, it may have to relax the environmental regulations that constrain traditional separation and purification techniques in the West,” says Chang.

Could China’s export controls be as successful as the American ones?

Probably not. Germanium and gallium can be mined elsewhere. But cutting-edge technologies are more restricted in their availability; the EUV lithography machines that the US wanted barred from export to China, for example, are made by a single company. “Export control is not as effective if the technologies are available in other markets,” says Sarah Bauerle Danzman, an associate professor of international studies at Indiana University Bloomington.

The US also has other advantages that make export control work more efficiently, she says, like the international importance of the dollar. The US chip curbs have an extraterritorial effect because companies fear being sanctioned if they don’t comply. They could be excluded from receiving payments in US dollars. 

For China, the export controls could hurt its own economy, Bauerle Danzman adds, because it relies more on export trade than that of the US. Restricting Chinese companies from working with the rest of the world will undermine their business. “Unless [China] is going to get Japan and South Korea and the EU to agree to not trade with the US, in order for it to really execute on a strategy like this, it not only has to stop exports to the US—it has to stop exports to basically everywhere,” she says.

Has China restricted the export of critical raw materials before?

This is not the first time China has tried to restrict the export of raw materials. In 2010, it reduced the allotment of rare-earth elements available for export by 40%, citing an interest in environmental conservation. The same year, the country was accused of unofficially banning rare-earth exports to Japan over a territorial dispute. 

Rare-earth elements are used in manufacturing a variety of products, including magnets, motors, batteries, and LED lights. The quota was later challenged by the US, EU, and Japan in a World Trade Organization dispute. China’s environmental protection justifications didn’t convince the settlement panel. It ruled against China and asked it to roll back the restrictions, which happened in 2015. 

This time, the Japanese government has again said it could raise the issue with WTO, but China likely won’t need to worry about it as much as the last time. With the rise in trade protectionism and self-preserving supply-chain policies during the pandemic era, the organization has increasingly lost its authority among member countries. “Today, WTO is less relevant, and China is trying to find a more nuanced policy argument to back up their actions.” says Lu.

It doesn’t need to look far. In December, China filed a dispute with the WTO around the US semiconductor export controls, calling them “politically motivated and disguised restrictions on trade.” In a brief official response, the US delegate to the WTO said every country has the authority to take measures it considers “necessary to the protection of its essential security interests,” an argument that China can easily use for itself. 

Will China have more export controls in the future?

China most likely won’t stop at gallium and germanium when it comes to export controls. Wei Jianguo, a former Chinese vice minister of commerce, was quoted in the state-owned publication China Daily as saying that “this is just the beginning of China’s countermeasures, and China’s toolbox has many more types of measures available.”

Gallium and germanium, while important, don’t represent the worst pain China could inflict on the raw materials front. “It’s giving the global system a little pinch, showing that we have the capability to cause a bigger pain sometime down the road,” says Lu. 

That could come if China chooses to clamp down again on the export of rare-earth elements. Or the materials used in making electric-vehicle batteries—lithium, cobalt, nickel, graphite. Because these materials are used in much greater quantities, it’s more difficult to find a substitute supply in a short time. They are the real trump card China may hold at the future negotiation table.

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Jun 21 2023
The counterfeit lawsuits that scoop up hundreds of Chinese Amazon sellers at once

Sun Qunming had no idea that the word “airbag” could be trademarked. 

Sun, who owns an e-commerce company of 13 people in Shenzhen, China, has been selling phone cases to Amazon buyers in Europe and the US since 2016. But last year, her business ground to a halt. One of her products has air-filled bumper cushions at the edges to protect the phone. When she listed it on Amazon in November 2021, she named it—in the typical e-commerce fashion of piling up keywords to attract search traffic—“Samsung Flip 3 Case, Galaxy Flip 3 Case with Ring, Built-in Airbag Protective Case for Samsung Galaxy Z Flip 3 5G 2021, Black.”

What she didn’t know was that in the same month, the word “airbag” when used in the context of electronic device accessories had been trademarked by another phone case vendor, PopSockets. A few months later, the company sued Sun and more than 160 other online sellers for trademark infringement. Sun’s two Amazon seller accounts were restricted and her account balances, totaling $60,000 at the time, were frozen. 

Over the next three months, Sun says, she spent $20,000 in legal fees to respond to the lawsuit. The account suspension was dropped in June 2022, but the damage to her business was done: a new phone case typically sells well for about a year until the next-generation phone comes out, and she missed the window. 

“I had plans for my life, like how my career would grow in a few years,” Sun says. “But when they did that to me, I felt like my whole plan had been disrupted. And I didn’t know what to do.”

What Sun experienced was not an accident, but a relatively recent development in the world of cross-border e-commerce. 

US law firms, particularly a handful based in Chicago, have been putting together mass intellectual-property cases like this one, suing hundreds of sellers on Amazon or other platforms at the same time for selling counterfeit goods. It’s a new form of lawsuit—so new that it doesn’t have an official name yet. One thing they have in common is that multiple defendants are sued at once, and the defendants’ identities are kept hidden.

These cases are designed to protect IP holders from counterfeiters, who are much harder to trace and hold accountable in the era of e-commerce.

But in the US, these lawsuits have also become a lucrative business for the plaintiffs and their law firms. Lumping so many defendants together saves plaintiffs time and money when filing cases in federal courts. The approach is so streamlined and structured, lawyers told MIT Technology Review, that firms can mass-produce the lawsuits, reusing filing templates and suing batch after batch of sellers. These practices are not unlawful, but some lawyers and academics believe they amount to taking advantage of the IP protection system.

Chinese sellers now make up the majority of third-party sellers on Amazon. But as their businesses bloom, they are also learning hard lessons about adjusting to a different cultural and legal system. Sellers like Sun feel the lawsuits are designed to take advantage of people who lack experience with the American justice system and face a language barrier.

“It started as a normal way to defend intellectual-property rights,” says Ning Zhang, an attorney in the US who has represented Sun and other sellers in similar situations. But over the years, Zhang says, she has witnessed the IP violation claims getting increasingly baseless. “It doesn’t matter if [the claims] have any merits—you can just sue [the sellers], freeze their accounts, and force them to negotiate with you to take their money back.”

Staking trademark violation claims

Chinese products have long been associated with counterfeiting and intellectual-property theft. This is not without cause. In 2022, 60% of the counterfeit goods seized at US borders, by value, came from China. 

But IP rights and counterfeiting have become much blurrier concepts in the age of third-party e-commerce markets. Traditionally, counterfeit goods profit off established brand names by riding on their name recognition. Not all trademarks are recognizable names, though; some just look like descriptive terms.

In November 2020, PopSockets, a US company that designs phone cases and other accessories, applied to trademark the term “airbag” under the category of “hand grips, stands, mounts, and cases adapted for handheld electronic devices.” The company has products that use air-filled components, but examples of the word’s use to describe similar features also existed before the trademark. The application was approved a year later, on November 9, 2021. 

Sun Qunming says she had used the word “airbag” before to describe other phone cases she sold without causing any trouble. And she admits she didn’t check whether it was trademarked this time. “If it’s an uncommon word, we will look it up in the trademark database to see whether it’s registered. But in terms of ‘airbag,’ the reason why I didn’t look it up was because I thought it was just a descriptive term. You see it everywhere,” she says. 

The plaintiff, however, claimed in the lawsuit that defendants like Sun “deceive unknowing consumers by using the POPSOCKETS Trademarks without authorization … to attract various search engines crawling the Internet looking for websites relevant to consumer searches for PopSockets Products.” PopSockets declined to comment for this story.

These sorts of lawsuits first appeared on the radar of Eric Goldman, a law professor at Santa Clara University School of Law and co-director of the High Tech Law Institute, in 2021. A German company that owns and licenses the word “emoji,” he discovered, had sued an estimated total of more than 10,000 e-commerce sellers from 2020 to 2021. Some of the parties sued had simply used the word to describe a product that actually included the image of an emoji. But the court decisions are working in its favor. In one of the dozens of cases, the judge found the copyright claim too expansive but nevertheless awarded the owner $25,000 in statutory damages from each of the 231 sellers being sued. 

Goldman, in a paper published in March, calls this type of lawsuit a “Schedule A Defendants Scheme” (or “SAD Scheme”). When these cases are filed, the names of defendants are put into a document, Schedule A, that is often immediately made confidential at the request of the plaintiff. As a result, the cases can involve hundreds of sellers at the same time, yet the sellers don’t know who else is being sued, and they usually don’t know they are being sued themselves until the court orders Amazon to freeze their accounts.

After Goldman looked into the emoji cases, he kept thinking about them. IP trolling lawsuits have existed for decades, but the way the cases were filed struck him as taking advantage of the current court mechanisms to a unique degree. “I just spent hours and hours peeling the layers in the end, and I kept getting more and more upset, realizing that there was a problem here that was systemic,” Goldman says.

China targets

Not all Schedule A lawsuit defendants are from China, but attorneys who spoke to MIT Technology Review say it’s Chinese sellers who seem to be targeted the most often. Travis Stockman, a New York–based attorney who has represented e-commerce sellers in these cases, says about 70% of his Schedule A defense clients are from China, while fewer than 10% are based in the United States. 

Justin Gaudio, an attorney at the Chicago-based law firm Greer, Burns & Crain (GBC) and the lead counsel for the plaintiff in the airbag lawsuit, told MIT Technology Review in an email that the reason so many Chinese sellers are sued in such cases is that counterfeiting is largely a Chinese problem. 

“These cases focus on China-based defendants since the bulk of counterfeit products sent to the United States come from China and its dependent territories,” he said, citing a report from the Buy Safe America Coalition. He declined to comment on the airbag case specifically, and GBC declined to comment on claims that the practice abuses the system.

What’s more certain is that it’s rarer to see Chinese defendants appear in court and fight the claims, Zhang says. There are ways to push back on the IP infringement claims and to argue that due process is missing, she says, but sellers are seldom willing to try. They often aren’t able to afford the legal fees or the lengthy time it takes for a case to resolve. 

Instead of fighting back, the defendants may either settle with the plaintiff or abandon their Amazon account and the cash in it. Making a decision usually comes down to which one costs more. Zhang says the proposed settlement amount is often about 60% of the frozen account’s balance.

If sellers have just small amounts of money trapped in their Amazon account, they may well decide not to respond at all. The court eventually makes a default judgment, awarding whatever’s frozen in the account to the plaintiffs. Goldman estimates that 70% of all Schedule A cases end in such default judgments.

The assembly line of IP lawsuits 

IP lawsuits with large groups of e-commerce sellers as defendants first appeared in the early 2010s. The numbers of such cases have grown significantly in recent years, yet very few people are aware of their impact. According to Docket Alarm, a legal database, the number of Schedule A cases filed in the US rose from 105 in 2016 to 938 in 2022. Goldman estimates that more than 600,000 defendants may have been sued in this manner over the last decade.

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An entire Schedule A case can unfold in the matter of a few days. In the airbag case, after GBC filed the case on behalf of PopSockets on February 17, 2022, and sealed Schedule A, the legal team asked the judge to issue a temporary restraining order (TRO) the next day requiring Amazon, AliExpress, and Wish to freeze all 163 defendants’ accounts. 

Five days later, the judge granted the motion. Sun learned about it eight days later because her account was suspended by Amazon. It would take her until April to find an attorney.

There are legitimate reasons why the plaintiff may sue hundreds of sellers at the same time and conceal their names. One is to stop guilty defendants from transferring their assets to other accounts and even out of Amazon. But Goldman believes the method has been overused. 

In the case of the airbag lawsuit, the plaintiff claimed that the 164 defendants were interconnected. “​​E-commerce store operators like Defendants are in constant communication with each other … regarding tactics for operating multiple accounts, evading detection, pending litigation, and potential new lawsuits,” the filing reads. 

“Many sophisticated online counterfeiters operate under different seller aliases on multiple platforms,” Gaudio says. Even if the defendants aren’t explicitly communicating with each other, they can still be considered one group because they “understand that their ability to profit through anonymous internet stores is enhanced as their numbers increase,” he says. 

It’s true that some Chinese sellers own multiple accounts on Amazon, even though the platform forbids it, says Moira Weigel, a professor of communication studies at Northeastern University who has been studying Amazon third-party sellers for the past few years. But in her research, she’s found that the Chinese sellers often do it for mundane reasons, like to keep their products competitive on the platforms. “I’m always inclined to believe that accounts of criminality are overblown,” Weigel says.

Lumping defendants together gives the plaintiff a practical advantage: it can reduce court filing fees by as much as 98%. Keeping the Schedule A sealed also gives the plaintiff the benefit of maintaining an information asymmetry, says Goldman. If someone decides to fight back, the plaintiff can drop that defendant from the lawsuit in order to prevent adversarial evidence from reaching other defendants or the judges.

In all, bringing such suits is so easy and inexpensive that some law firms are putting them out one after another. “It’s a procedural assembly line. It’s just a repeated process, and it’s just growing by mass numbers,” says Stockman. Sometimes even when one lawsuit is being appealed, the plaintiffs are still filing new ones, with the same IP infringement claim, against hundreds more sellers. 

Trouble from Chicago

Among many Chinese e-commerce sellers, there is a shared wisdom: beware of purchases from Chicago. Lawyers sometimes order the product in question as part of diligence before they file a case. For years, most Schedule A cases have come from Chicago-based law firms filing in the US District Court for the Northern District of Illinois. Of the 938 Schedule A cases filed in 2022, nearly 85% (794) were filed in Chicago. A purchase order from Chicago could be a sign of trouble to come. 

It’s unclear why Chicago has become a hot spot for these cases, but the federal court there orders much higher compensation amounts than courts in other jurisdictions, says Stockman—sometimes more than three times as much.

Goldman even found a template on the website of the Chicago court for lawyers to use in filing these Schedule A cases. “Basically the judge is saying: Here are the arguments that will work for me, so all you gotta do is plug in your name and wherever I’ve asked for a few facts,” he says. “The judge has basically systematized not making particularized allegations against defendants.”

Some judges have started to question the practice. According to Bloomberg, one judge at the Chicago court asked in January, while presiding over such a case, “Have we been too easy and not skeptical enough on this practice? Are we getting taken advantage of by the plaintiffs’ bar in bringing these cases?”

Among Chinese sellers, GBC is the first and best-known law firm that engages in this IP violation litigation: it filed nearly one-third of all Schedule A lawsuits nationally last year. But its methods have become a convenient template for making e-commerce IP claims at scale, and plaintiff companies and law firms are catching on.

“Four years ago, there were probably three plaintiff law firms, the same in every case,” says Stockman. “Fast-forward four years to today: same venue, same jurisdiction, but every time I get hit with one of these cases, it’s a new law firm I’ve never heard of. [It] means everybody’s catching wind.”

Amazon’s role

Once e-commerce websites are notified by the court to take action against these sellers, they have to comply. But sellers say that Amazon is the platform most accommodating to plaintiffs’ requests. It will immediately freeze the seller’s account without any internal investigation, and sellers say it’s hard for them to plead their case. 

“Amazon is very strict when it comes to counterfeit sales,” says Stockman. That’s because it doesn’t want the stigma of being flooded with low-priced counterfeit products, often associated with platforms like Wish or AliExpress. Once the “magic word” counterfeit appears in a lawsuit, “[Amazon] will participate as needed to get them off the platform,” he says.

An Amazon spokesperson declined to comment for this story.

The emergence of e-commerce platforms like Amazon has decentralized and democratized access to marketing, and Amazon has always portrayed itself as the platform of small mom-and-pop sellers, says Weigel. But at the same time, she says, with the traditional IP protection regime failing to adapt to the new and more muddied e-commerce environment, Amazon is leaving these small brands to fight for themselves. 

As a result, Amazon sellers are simultaneously struggling to protect their IP and to avoid falling victim to IP trolling lawsuits. But Amazon has mostly shielded itself from the legal conundrum it creates. “When there’s a new regulation, ultimately it’s passed on to sellers, because Amazon ultimately is insulated from liability by the platform model, Section 230, by most existing liability laws, and so on,” says Weigel.

Fighting back

Of the 163 sellers sued by PopSockets in the airbag case, only six hired attorneys to defend themselves. Sun was the first. She decided from the beginning that she wouldn’t just pay for the settlement deal. 

“I felt like someone slapped me in the face, and why should I cry, hand over my money, and say: ‘That’s a good slap. Please be gentle on me next?’” she says. The attorney she hired told her that defending herself and countersuing PopSockets could cost her as much as $60,000—almost the entire amount frozen in the Amazon account. “But I made up my mind. I told myself: I would not give up and hand this money over to the [plaintiff],” Sun says. 

After she spent $20,000 and two months filing a countersuit, the plaintiff agreed to dismiss the restraining order on her Amazon accounts. A lengthy legal process followed in which each side needed to find evidence to support or deny the validity of the “airbag” trademark. They eventually settled at the end of May for an undisclosed amount. 

When Sun decided to appear in court, she tried to find other defendants to join her case and share the legal costs, but most of them chose to settle or abandon their accounts. “Not many people are like me,” she says. “If we could have stood up against these things together, they would know that we Chinese people are not so easy to take advantage of. And then they wouldn’t bully us so much.”

Correction: We updated the number of total Schedule A cases filed in the US in 2016 from 67 to 105.

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Jun 8 2023
Elon Musk’s quiet, untweeted China trip

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We usually hear too much about what Elon Musk’s up to lately, but you may have missed the news last week that he paid a three-day visit to China and met with quite a few high-ranking government officials there.

Ever since China lifted most of its pandemic-era travel restrictions in January, foreign executives have been swarming in. And Musk had good reason to go: China is a vital part of Tesla’s electric-vehicle empire, both as a market and as a production powerhouse. But as the owner of Starlink, SpaceX, and recently Twitter, Musk has a much more complicated relationship with the country.

There’s little information in English about Musk’s China trip. That’s primarily because Musk, usually active on the social media platform he just acquired, stayed very quiet during the whole trip. While Twitter is banned in China, people have all sorts of VPN tools to access it. Still, Musk didn’t seem to want to give the impression that he was on Twitter while there. He only tweeted a single time about the trip, after he left China. In fact, he even stopped commenting on other tweets—something he normally does dozens of times every day. 

But from the public readouts posted by Chinese government websites and sightings of Musk shared on Chinese social media, we can reconstruct his trip from Tuesday to Thursday.

He had quite a busy itinerary: in 44 hours, Musk met with at least three high-level Chinese officials, dined with the CEO of the world’s largest EV battery supplier, and visited Tesla’s factory in Shanghai, among other things. 

Musk’s private jet landed in Beijing on the afternoon of May 30, local time. He met with Qin Gang, China’s new foreign minister and previous ambassador to the US, the same day. According to the ministry’s press release, Musk said in the meeting that he strongly opposes decoupling supply chains between the US and China, because the two countries are “interlinked, like conjoined twins inseparable from each other.” That evening, he had dinner with Zeng Yuqun, the CEO of CATL, which is a key supplier of batteries to Tesla cars. 

Musk holding hands with Qin Gang, China's Minister of Foreign Affairs

CHINESE MINISTRY OF FOREIGN AFFAIRS

The next day, he met with two more Chinese ministers, those in charge of commerce and technology. Reuters reported that he also visited Vice Premier Ding Xuexiang—China’s sixth-highest-ranking party official—that afternoon, but the meeting has not been made public by the government or Musk. In the evening, he flew to Shanghai and headed to the Tesla Gigafactory, where he took photos with employees that he would later post on Twitter.

Elon and the team of the Shanghai gigafactory pose for a group photo

ELON MUSK VIA TWITTER

On the morning of June 1, his last day in China, Musk squeezed in one last meeting with Chen Jining, the Shanghai party secretary, before his jet left for Texas at 11:23 a.m.

Musk is not the first American executive to visit China this year: before him, there were Apple’s Tim Cook, General Motors’s Mary Barra, JP Morgan’s Jamie Dimon, Starbucks’s Laxman Narasimhan, and more. But so far, Musk has received the biggest welcome, both from Chinese government officials and from the people on Chinese social media.

The main reason is that China and Tesla have been in a mutually beneficial relationship for years. Not only is China the second-largest market for Tesla, but the Shanghai Gigafactory produced over half of Tesla cars sold globally last year. On the other end, the Shanghai factory also contributed significantly to local employment and taxation, as well as making the city a hub of EV production.

During the strict one-month lockdown in Shanghai last year, the municipal government made extra arrangements to make sure the factory could resume production even while other parts of city life were on pause. During this visit, Musk acknowledged those efforts and thanked the Chinese commerce minister.

But there are other things that complicate the relationship between Musk and China.

For one thing, Starlink has long been a concern for Beijing because of its capacity to circumvent traditional communication blackouts and offer additional satellite intelligence. Its application in Ukraine during the war, in which China largely stands on the side of Russia, has made the issue clearer. Earlier this year, it was reported that researchers in China’s military academies have published dozens of papers on how to work against the Starlink satellites. 

On Weibo, the Chinese equivalent of Twitter, Musk (or whoever operates his verified account) posted a note on May 30 that seemed designed to smooth things over a little: “The China space program is far more advanced than most people realize.”

At the core of Musk’s complicated relationship with China is the fact that his different companies have different relationships with the Chinese government. Tesla is exceptionally welcome in the country; Twitter is a big headache for the government and is strictly banned; SpaceX and Starlink are somewhere in between, representing both a security risk and a collaboration opportunity. 

So far, his ownership of the other companies hasn’t caused Tesla to fall out of favor in China. But in this age of sustained US-China tensions, dealing with the Chinese government is a very delicate act for any American company, and Tesla will probably be a bellwether. No matter how much trolling he likes to do in the US, Musk had to be more cautious when he was in China.

What do you think of the trend of American business executives visiting China? Let me know your thoughts at zeyi@technologyreview.com.

Catch up with China

1. Montana’s TikTok ban could be another “junk internet bill”—highly politicized and unlikely to survive judicial review. (MIT Technology Review)

2. Sunday marked the 34th anniversary of the protest and massacre in Tiananmen Square. 

  • Every year in Hong Kong, people have gathered in a public park to hold a vigil. This year, the vigil was blocked by a food carnival hosted by pro-Beijing groups in the same park. (Wall Street Journal $)
  • People who tried to take candles out were taken away by police. (Reuters $)
  • The vigils and protests have been carried on by people overseas. (CNN)

3. Shein, the Chinese fashion e-commerce company that has attracted a large Gen Z following, has hired Washington lobbyists for the first time, to respond to allegations of forced labor practices. (Politico)

4. Defense officials around the world are gathering in Singapore this week for the high-level Shangri-la Dialogue. (CNBC)

  • Meanwhile, spy masters are having a separate, secret meeting in the same city. (Reuters $)
  • CIA director Bill Burns also had a secret trip to China last month, meeting Beijing’s intelligence officials. (Financial Times $)

5. As Pride month begins, China’s LGBTQ communities are losing their few support groups as they are squeezed by the government to shut down operations. (The Economist $)

6. Local police in China are increasingly dealing with a new type of scam: people are using generative AI tools to impersonate others and request money transfers from the victim’s contacts. (Wall Street Journal $)

Lost in translation

Would you spend $1 a month to have unlimited chats with a simulacrum of your favorite influencer? Xiaoice, a Chinese AI company, just offered this service. Every Thursday from now on, the company will release a new “AI clone” of a Chinese influencer (the first is designed around a 20-something female model named Hu Wenjie, better known by her online alias 半藏森林). Users can converse by text and voice with such AI chatbots. If they spend 30 RMB ($4.22) a month, the “influencer” will double as an office assistant and help with tasks like writing marketing copy. (Why would you want your influencer to do that?) The service has a strong romantic tone: the basic subscription is called the “relationship mode.” For now, the majority of the profits go to the influencer, according to a report by Chinese state broadcaster CCTV.

One more thing

The latest viral social media trend in China is packing a lunch that’s simple and sometimes too bland to eat and calling it 白人饭—literally, “white people food.” It’s surely a dig at the quick lunches in American food culture, but there are also people who say they’re doing it to lose weight or to forgo complicated food prep.

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Jun 1 2023
China isn’t waiting to set down rules on generative AI

China Report is MIT Technology Review’s newsletter about technology developments in China. Sign up to receive it in your inbox every Tuesday.

Back in April, there was a major development in the AI space in China. The Chinese internet regulator published a draft regulation on generative AI. Named Measures for the Management of Generative Artificial Intelligence Services, the document doesn’t call out any specific company, but the way it is worded makes it clear that it was inspired by the incessant launch of large-language-model chatbots in China and the US.

Last week, I went on the CBC News podcast “Nothing Is Foreign” to talk about the draft regulation—and what it means for the Chinese government to take such quick action on a still-very-new technology. 

As I said in the podcast, I see the draft regulation as a mixture of sensible restrictions on AI risks and a continuation of China’s strong government tradition of aggressive intervention in the tech industry.

Many of the clauses in the draft regulation are principles that AI critics are advocating for in the West: data used to train generative AI models shouldn’t infringe on intellectual property or privacy; algorithms shouldn’t discriminate against users on the basis of race, ethnicity, age, gender, and other attributes; AI companies should be transparent about how they obtained training data and how they hired humans to label the data.

At the same time, there are rules that other countries would likely balk at. The government is asking that people who use these generative AI tools register with their real identity—just as on any social platform in China. The content that AI software generates should also “reflect the core values of socialism.” 

Neither of these requirements is surprising. The Chinese government has regulated tech companies with a strong hand in recent years, punishing platforms for lax moderation and incorporating new products into the established censorship regime. 

The document makes that regulatory tradition easy to see: there is frequent mention of other rules that have passed in China, on personal data, algorithms, deepfakes, cybersecurity, etc. In some ways, it feels as if these discrete documents are slowly forming a web of rules that help the government process new challenges in the tech era.

The fact that the Chinese government can react so quickly to a new tech phenomenon is a double-edged sword. The strength of this approach, which looks at every new tech trend separately, “is its precision, creating specific remedies for specific problems,” wrote Matt Sheehan, a fellow at the Carnegie Endowment for International Peace. “The weakness is its piecemeal nature, with regulators forced to draw up new regulations for new applications or problems.” If the government is busy playing whack-a-mole with new rules, it could miss the opportunity to think strategically about a long-term vision on AI. We can contrast this approach with that of the EU, which has been working on a “hugely ambitious” AI Act for years, as my colleague Melissa recently explained. (A recent revision of the AI Act draft included regulations on generative AI.)

There’s one point I didn’t get to make in the podcast but that I think is fascinating. Despite the restrictive nature of the document, it’s also a tacit encouragement for companies to keep working on AI. The maximum proposed fine set for violating the rules is 100,000 RMB—about $15,000, a minuscule number for any company that has the capacity to build large language models. 

Of course, if a company is fined each time its AI model violates the rules, the amounts can pile up. But the size of the fine suggests that the rules are not made to scare the companies away from investing in AI. As Angela Zhang, a law professor at the University of Hong Kong, recently wrote, the government is playing multiple roles: “The Chinese government should not only be viewed as a regulator, but also as an advocate, sponsor, and investor in AI. Ministries championing AI development, along with state sponsors and investors, are poised to become a potent counterbalance against stringent AI regulation.” 

It may take a few months still before regulators finalize the draft, and months after that before it goes into effect. But I know that many people, including me, will be keeping a close eye on any changes. 

Who knows? By the time the regulation goes into effect, there could be another new viral AI product that compels the government to come up with yet more rules. You never know.

Have you observed anything interesting about China’s generative AI regulation? All opinions are welcome. Send them to zeyi@technologyreview.com.

Catch up with China

1. China sent its new ambassador, Xie Feng, to the US. He was a leading negotiator for Beijing in a prisoner-exchange deal in 2021 that involved a Huawei executive and two Canadian citizens. (Wall Street Journal $)

2. Nvidia’s chief warned US lawmakers to be “thoughtful” about restricting semiconductor trade with China. (Financial Times $)

3. C919, China’s first large homegrown passenger jet, completed its first commercial flight this weekend. (CNN)

4. The Hong Kong government mandated this year that all SIM cards be registered with real names. One man is challenging that rule in the court. (South China Morning Post $)

5. Chinese hackers have targeted Kenyan government institutions for years, potentially to gain information on debt owed to Beijing. (Reuters $) 

6. Though the company claims that it has strict data protection practices, TikTok employees regularly posted user information on a messaging and collaboration tool called Lark, also developed by ByteDance. (New York Times $)

7. The Vietnamese government is planning to launch a massive probe into TikTok. Unlike the US, Vietnam thinks the app needs more censorship. (Rest of World)

Lost in translation

The biggest news in China’s auto industry this week is that BYD, a world-leading hybrid and EV company whose EV production surpassed Tesla’s this year, was publicly accused by a Chinese competitor of violating car emission regulations. On May 25, Great Wall Motor, a domestic auto brand, posted on social media that it had reported two BYD plug-in hybrid models to the government for using gas tanks that fail to comply with the rules. Just two hours later, BYD publicly responded and denied the accusation, but it didn’t release more details on the hybrid models in question.

According to the Chinese publication China Entrepreneur, the accusation is a good example of business competition between the two companies. Great Wall Motor used to lead domestic gas car sales but is struggling to adapt to the global energy transition. BYD’s hybrid and EV offerings, on the other hand, have allowed it to dominate the domestic market and take off internationally. It’s not clear yet how this saga will end, as people are waiting on the government to comment on the validity of the accusation. If it’s true, it could deal a big blow to BYD’s brand image and commercial prospects.

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Mar 17 2023
Chinese tech giant Baidu releases its answer to ChatGPT

On Thursday, Robin Li, Baidu’s cofounder and CEO, took the stage in Beijing to showcase the company’s new large language model, Ernie Bot. Accompanied by art created by Baidu’s image-making AI, he showed examples of what the chatbot can do, including solve math questions, write marketing copy, answer questions about Chinese literature, and generate multimedia responses. 

Baidu had planned for this mid-March product release for months. But it was intercepted by the unexpected release on Tuesday of OpenAI’s GPT-4, which clearly became a reference point for everyone watching Baidu’s activities, including the CEO himself. “People are expecting to benchmark Ernie Bot against ChatGPT, or even GPT-4. That’s a very high bar,” Li said at the beginning of his presentation.

As expected, Ernie Bot (the name stands for “Enhanced Representation from kNowledge IntEgration;” its Chinese name is 文心一言, or Wenxin Yiyan) performs particularly well on tasks specific to Chinese culture, like explaining a historical fact or writing a traditional poem. (Li says as a Chinese company, Baidu “has to perform better than any pre-trained LLMs” in terms of understanding Chinese.) 

But the highlight of the product release was Ernie Bot’s multimodal output feature, which ChatGPT and GPT-4 do not offer (OpenAI has bragged about GPT-4’s ability to analyze a photo of the contents of a refrigerator and come up with recipe suggestions, but the model generates only text). Li showed a recorded interaction with the bot where it generated an illustration of a futuristic city transportation system, used Chinese dialect to read out a text answer, and edited and subtitled a video based on the same text. However, in later testing after the launch, a Chinese publication failed to reproduce the video generation. 

The Chinese public has been hungry for a ChatGPT alternative; both OpenAI and the Chinese government have barred individuals in China from using the American chatbot.

But so far, Ernie Bot has been made available only to an extremely select pool of Chinese creators. Companies can apply for API access. But Baidu has not said whether the technology will be available for consumers. It’s also unclear when the bot will be integrated into Baidu’s other products, like its search engine or self-driving cars, as the company promised.

Compared with the rollouts of ChatGPT and GPT-4, Ernie Bot’s release felt rushed. The presentation did not feature any live demo but instead used five pre-recorded sessions. Li also repeatedly said that Ernie is still imperfect and will improve once it reaches more users. Baidu’s stock price slipped by 6.4% on Thursday, and social media is full of disappointed reactions.

Li seemed prepared for such a response. “People have been asking me for a while: Why are you releasing [Ernie Bot] so soon? Are you ready for it?” he said during his presentation. “From what I personally saw when conducting internal tests on Ernie Bot, it’s not perfect. But why do we want to release it today? Because the market demands it.” 

The race to be the first

While a few ChatGPT-style bots have already been released by Chinese companies or researchers, none of them has shown satisfying results. MOSS, an English-language chatbot developed by Fudan University researchers in Shanghai, was met with such high demand that its server broke down within a day of launch in late February. It has yet to return. MiniMax, a Chinese startup, released a chatbot called Inspo earlier this month, but it has been suspected of merely repackaging the GPT-3.5 model developed by OpenAI.

Many people expected that Baidu would be the first Chinese company to go head to head with ChatGPT. Back in 2019, Baidu released a GPT-3 equivalent—Ernie 3.0. It also released a decently powerful text-to-image model called Ernie-ViLG last year. 

The company has a few advantages that enable it to stand out among its Chinese peers. It has designed its own AI computing chip, Kunlun, that was used in training and operating the Ernie models and could shield the company from the ever-growing US-China tension around semiconductors. Also, having made a search engine, an online encyclopedia, a discussion forum, and a media publishing platform since 2000, Baidu can access Chinese language training material from a variety of proprietary resources. According to Baidu’s press release, Ernie Bot is trained on “trillions of web pages, tens of billions of search and image data, hundreds of billions of daily voice data, and a knowledge graph of 550 billion facts.”

At the launch, Li compared Baidu to big tech firms in the West. “I can say Baidu is the first one among international tech giants to release [a ChatGPT alternative developed internally]. Microsoft just uses OpenAI access. Google, Meta, Amazon—none of these has released a product of the same kind and at the same level,” he said.

The inevitable comparison to GPT-4

With the fresh release of GPT-4, it’s no surprise that people are looking to compare the two. But it’s difficult to do so. Both companies are guarded about the technical details of their chatbots.

Like OpenAI, Baidu also decided to not reveal how many parameters there are in the latest version of Ernie. The number of parameters in a model is usually seen as an indicator of how powerful it is. Figures are available for their last-generation products: OpenAI’s GPT-3, released in June 2020, had 175 billion parameters, and Baidu’s Ernie 3.0 Titan, released in December 2021, had 260 billion parameters. 

Although Ernie Bot can’t analyze images like GPT-4, it does offer more output options. In the presentation, the chatbot read out the text answer in Sichuanese, a popular dialect spoken in southwestern China. Li also said the model can generate audio in other varieties of Chinese, like Cantonese, Hokkien, and the Dongbei dialect.

The quality of the answers it provides might be another matter. In a livestream after the launch, X.Pin, a Chinese tech publication, asked both Ernie Bot and GPT-4 some of the same questions in Chinese. While the Baidu technology could answer most questions coherently, it made more mistakes. It had trouble correctly answering trivia questions about Chinese history, remembering the context in which questions were posed, and generating code to make a mini game. The reviewers were also unable to test out the video generation ability. Ernie Bot refused to do so, saying it needed some time to edit and process the data.

Rushing it out for business partners

Earlier this week, the Wall Street Journal reported that to get Ernie Bot ready for the big launch, Baidu asked employees to work through public holidays, hired additional contractors to review the bot’s answers, and pooled resources like Nvidia’s A100 computing chips from other AI teams at the company. 

Since then, there have been other hints that the chatbot was not ready for wide deployment. Baidu had previously said that Ernie would be integrated into many of the company’s products, including self-driving vehicles and the flagship search engine. But the product release featured none of those applications or explanations of how such integration would work.

Many observers were disappointed that the release event used only pre-recorded videos of interactions with the chatbot, which can be easily filtered and edited. It was also pointed out that many of the multimodal functions showcased on Thursday can already be achieved with Baidu’s current AI tools, like the image-making AI from 2022 or a video editing tool it released in 2020, so the innovation is more about integrating them into one more accessible interface.

While Baidu has developed different kinds of AI models for years, Ernie Bot looks more like a way to package the company’s existing capabilities for business users to adopt more easily. 

And it’s clear that enterprise clients, instead of the general public, were the main target of this launch event. “Ernie Bot won’t just impact search engines and internet companies. It will impact every single company,” Li said during his presentation. “It will shorten the distance between every company and their customers.”

According to Baidu, 650 companies had signed up before Ernie Bot’s launch to use the technology, and more than 30,000 others have applied for the API access since the launch event. Previous news reporting suggests the companies interested in using the chatbot include the computer maker Lenovo, the travel portal Trip.com, and several Chinese automotive companies. While there’s currently no indication of what these partnerships may look like, we’ll likely find out more as Baidu rolls out the API in the coming months.

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Mar 12 2023
How China takes extreme measures to keep teens off TikTok

China Report is MIT Technology Review’s newsletter about technology developments in China. Sign up to receive it in your inbox every Tuesday.

As I often say, the American people and the Chinese people have much more in common than either side likes to admit. For example, take the shared concern about how much time children and teenagers are spending on TikTok (or its Chinese domestic version, Douyin).

On March 1, TikTok announced that it’s setting a 60-minute default time limit per day for users under 18. Those under 13 would need a code entered by their parents to have an additional 30 minutes, while those between 13 and 18 can make that decision for themselves. 

While the effectiveness of this measure remains to be seen (it’s certainly possible, for example, to lie about your age when registering for the app), TikTok is clearly responding to popular requests from parents and policymakers who are concerned that kids are overly addicted to it and other social media platforms. In 2022, teens spent on average 103 minutes per day on TikTok, beating Snapchat (72 minutes) and YouTube (67). The app has also been found to promote content about eating disorders and self-harm to young users. 

Lawmakers are taking notice: several US senators have pushed for bills that would restrict underage users’ access to apps like TikTok.

But ByteDance, the parent company of TikTok, is no stranger to those requests. In fact, it has been dealing with similar government pressures in China since at least 2018. 

That year, Douyin introduced in-app parental controls, banned underage users from appearing in livestreams, and released a “teenager mode” that only shows whitelisted content, much like YouTube Kids. In 2019, Douyin limited users in teenager mode to 40 minutes per day, accessible only between the hours of 6 a.m. and 10 p.m. Then, in 2021, it made the use of teenager mode mandatory for users under 14. So a lot of the measures that ByteDance is now starting to introduce outside China with TikTok have already been tested aggressively with Douyin. 

Why has it taken so long for TikTok to impose screen-time limits? Some right-wing politicians and commentators are alleging actual malice from ByteDance and the Chinese government (“It’s almost like they recognize that technology is influencing kids’ development, and they make their domestic version a spinach version of TikTok, while they ship the opium version to the rest of the world,” Tristan Harris, cofounder of the Center for Humane Technology and a former Google employee, told 60 Minutes.) But I don’t think that the difference between the two platforms is the result of some sort of conspiracy. Douyin would probably look very similar to TikTok were it not for how quickly and forcefully the Chinese government regulates digital platforms. 

The Chinese political system allows the government to react swiftly to the consequences of new tech platforms. Sometimes it’s in response to a widespread concern, such as teen addiction to social media. Other times it’s more about the government’s interests, like clamping down on a new product that makes censorship harder. But the shared result is that the state is able to ask platforms to make changes quickly without much pushback.

You can see that clearly in the Chinese government’s approach to another tech product commonly accused of causing teen addiction: video games. After denouncing the games for many years, the government implemented strict restrictions in 2021: people under 18 in China are allowed to play video games only between 8 and 9 p.m. on weekends and holidays; they are supposed to be blocked from using them outside those hours. Gaming companies are punished for violations, and many have had to build or license costly identity verification systems to enforce the rule.

When the crackdown on video games happened in 2021, the social media industry was definitely spooked, because many Chinese people were already comparing short-video apps like Douyin to video games in terms of addictiveness. It seemed as though the sword of Damocles could drop at any time. 

That possibility seems even more certain now. On February 27, the National Radio and Television Administration, China’s top authority on media production and consumption, said it had convened a meeting to work on “enforcing the regulation of short videos and preventing underage users from becoming addicted.” News of the meeting sent a clear signal to Chinese social media platforms that the government is not pleased with the current measures and needs them to come up with new ones. 

What could those new measures look like? It could mean even stricter rules around screen time and content. But the announcement also mentioned some other interesting directions, like requiring creators to obtain a license to provide content for teenagers and developing ways for the government to regulate the algorithms themselves. As the situation develops, we should expect to see more innovative measures taken in China to impose limits on Douyin and similar platforms.

As for the US, even getting to the level of China’s existing regulations around social media would require some big changes.

To ensure that no teens in China are using their parents’ accounts to watch or post to Douyin, every account is linked to the user’s real identity, and the company says facial recognition tech is used to monitor the creation of livestream content. Sure, those measures help prevent teens from finding workarounds, but they also have privacy implications for all users, and I don’t believe everyone will decide to sacrifice those rights just to make sure they can control what children get to see.

We can see how the control vs. privacy trade-off has previously played out in China. Before 2019, the gaming industry had a theoretical daily play-time limit for underage gamers, but it couldn’t be enforced in real time. Now there is a central database created for gamers, tied to facial recognition systems developed by big gaming publishers like Tencent and NetEase, that can verify everyone’s identity in seconds. 

On the content side of things, Douyin’s teenager mode bans a slew of content types from being shown, including videos of pranks, “superstitions,” or “entertainment venues”—places like dance or karaoke clubs that teenagers are not supposed to enter. While the content is likely selected by ByteDance employees, social media companies in China are regularly punished by the government for failing to conduct thorough censorship, and that means decisions about what is suitable for teens to watch are ultimately made by the state. Even the normal version of Douyin regularly takes down pro-LGBTQ content on the basis that they present “unhealthy and non-mainstream views on marriage and love.”

There is a dangerously thin line between content moderation and cultural censorship. As people lobby for more protection for their children, we’ll have to answer some hard questions about what those social media limits should look like—and what we’re willing to trade for them.

Do you think a mandatory daily TikTok time limit for teenagers is necessary? Let me know what you think at zeyi@technologyreview.com.

Catch up with China

1. Over the weekend, the Chinese government held its “two sessions”—an annual political gathering that often signals government plans for the next year. Li Keqiang, China’s outgoing premier, set the annual GDP growth target as 5%, the lowest in nearly 30 years. (New York Times $)

  • Because the government is often cryptic about its policy priorities, it becomes an annual tradition to analyze what words are mentioned the most in the premier’s report. This year, “stability,” “food,” and “energy” took center stage. (Nikkei Asia $) 
  • Some political representatives come from the tech industry, and it’s common (and permissible) for them to make policy recommendations that are favorable to their own business interests. I called it “the Chinese style of lobbying” in a report last year. (Protocol)

2. Wuxi, a second-tier city in eastern China, announced that it has deliberately destroyed a billion pieces of personal data, as part of its process of decommissioning pandemic surveillance systems. (CNN)

3. Diversifying from manufacturing in China, Foxconn plans to increase production in India from 6 million iPhones a year to 20 million, and to triple the number of workers to 100,000 by 2024. (Wall Street Journal $)

4. Chinese diplomats are being idolized like pop-culture celebrities by young fans on social media. (What’s on Weibo $)

5. China is planning on creating a new government agency that has concentrated authority on various data-related issues, anonymous sources said. (Wall Street Journal $) 

6. Activists and investors are criticizing Volkswagen after its CEO toured the company’s factories in Xinjiang and said he didn’t see any sign of forced labor. (Reuters $)

7. Wuling, the Chinese tiny-EV brand that outsold Tesla in 2021, has found its first overseas market in Indonesia, and its cars have become the most popular choice of EV there. (Rest of World)

8. The US government added 37 more Chinese companies, some in genetics research and cloud computing, to its trade blacklist. (Reuters $)

Lost in translation

As startups swarm to develop the Chinese version of ChatGPT, Chinese publication Leiphone made an infographic comparing celebrity founders in China to determine who’s most likely to win the race. The analysis takes into consideration four dimensions: academic reputation and influence, experience working with corporate engineers, resourcefulness within the Chinese political and business ecosystem, and proclaimed interest in joining the AI chatbot arms race. 

An infographic comparing 7 Chinese founders' strength in developing an AI chatbot.

The two winners of the analysis are Wang Xiaochuan, the CEO of Chinese search engine Sogou, and Lu Qi, a former executive at Microsoft and Baidu. Wang has embedded himself deeply in the circles of Tsinghua University (China’s top engineering school) and Tencent, making it possible for him to assemble a star team quickly. Meanwhile, Lu’s experience working on Microsoft’s Bing and Baidu’s self-driving unit makes him extremely relevant. Plus, Lu is now the head of Y Combinator China and has personal connections to Sam Altman, the CEO of OpenAI and the former president of Y Combinator.

One more thing

Recently, a video went viral in China that shows a driver kneeling in front of his electric vehicle to scan his face. An app in the car system required the driver to verify his identity through facial recognition, and since there’s no camera within the car, the exterior camera on the front of the car was the only option.

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Dec 22 2022
Why it’s so hard to tell porn spam from Chinese state bots

China Report is MIT Technology Review’s newsletter about technology developments in China. Sign up to receive it in your inbox every Tuesday.

A few weeks ago, at the peak of China’s protests against stringent zero-covid policies, people were shocked to find that searching for major Chinese cities on Twitter led to an endless stream of ads for hookup or escort services in Chinese. At the time, people suspected this was a tactic deployed by the Chinese government to poison the search results and prevent people from accessing protest information. 

But this spam content may not have had anything to do with the Chinese government after all, according to a report published on Monday by the Stanford Internet Observatory. “While the spam did drown out legitimate protest-related content, there is no evidence that it was designed to do so, nor that it was a deliberate effort by the Chinese government,” wrote David Thiel, the report’s author. 

Instead, they were likely just the usual commercial spam bots that have plagued Twitter forever. These particular accounts exist to attract the attention of Chinese users who go on foreign networks to access porn.

So the “significant uptick” in spam was just a coincidence? The short answer is: very likely. There are two major reasons why Thiel does not think the bots are related to the Chinese government.

First of all, these accounts have been posting spam for a long time. And they sent out even more tweets, and more consistently, before the protests broke out, according to a data analysis on the activities of over 600,000 accounts from November 15 to 29. Another analysis shows they’ve also continued to push out spam even as discussions of the protests have died down. 

Check out these two charts (for reference, the protests peaked around November 27):

A line chart showing consistent spam tweets between November 15 and November 29. Above the chart it says this is an analysis of 7,541,382 total tweets.
A line chart showing increasing spam tweets between November 29 and December 4. Above the chart it says this is an analysis of 6,088,596 total tweets.

So did it just feel as if spam activity spiked during the protests? This graph shows that many more bot accounts were in fact created in November: 

A bar chart showing that spam accounts created in November largely outnumbers accounts created in the past months.

But Thiel emphasizes that content moderation takes time. People tend to ignore the effect called “survivorship bias”: older spam content and accounts are constantly being removed from the platform, but researchers don’t have data on suspended accounts. So a graph like this one only shows accounts that survived Twitter’s spam filters. That’s why November’s spike looks so big: they are new accounts created most recently to replace their dead peers and are still standing—but not all will survive, so they wouldn’t be there if we were to revisit this graph in, say, a few months. In other words, if you conducted a data analysis right after the protests, it would certainly seem that this kind of spam just started recently. But it’s not necessarily the full truth.  

Secondly, if the spam accounts were meant to bury information about the protests, they did a pretty poor job. While escort-ad spam featured many Chinese city names as keywords and hashtags, Thiel found that they did not target the hashtags actually used to discuss the protests, like #A4Revolution or #ChinaProtest2022, “which is what you would assume the government would be interested in jumping on if they were trying to silence things,” he tells me. Of the about 30,000 tweets he analyzed containing these more influential hashtags, “there’s no spam to speak of in there.”

“People tend to jump to a state explanation for things just because the content is in Chinese,” he says. “Sure, China’s done tons of online inauthentic operations before. But I don’t think the default assumption should be [that] the state is behind this.” 

Given all this, Thiel believes that the porn ads during this time were probably just run-of-the-mill commercial spamming, which can actually be quite lucrative. Because of the more rigid porn censors on domestic platforms, Chinese people often seek alternative sources for porn, including using innovative outlets like Steam or just using a plain old VPN to access international platforms like Twitter, which is known for being one of the mainstream platforms more tolerant of sexual content. 

That makes Twitter a prime space for sex-work ads—and, of course, scams. Reporters from the New York Times talked to an online advertising company behind such spam, which charged $1,400 for a monthlong campaign. Some of these accounts may lead to real sex services or access to “premium group chats,” where porn content is shared. Others are fraudulent; as Chinese internet users have exposed, they may ask you to pay upfront online for potential services, in the form of things like “transportation fees.” Once they extract as much money as possible from you, the scammers will cut off all communications. In fact, there are even Twitter accounts in Chinese (NSFW!) dedicated to exposing such scammers and the relevant accounts. 

But not everyone knows the context of how Twitter is used by Chinese people to access porn, or that such spam has existed for a long time. So I don’t blame anyone for suspecting that the government was involved. In the end, I think there are two main reasons why people easily bought the assumption that the spam accounts were part of China’s propaganda machine.

As Thiel said, the Chinese government has been behind many Twitter manipulation campaigns in the past, deploying fake personas, automated activities, and targeted harassment. Back in 2019, for instance, it used spam accounts to disseminate pro-China messages and attack Hong Kong pro-democracy protesters. Some of those accounts had posted extensive porn content—sounds familiar, hah?

But Elise Thomas, a senior analyst at the Institute for Strategic Dialogue who analyzed the 2019 campaign, tells me that was a totally different situation. She found bot accounts that had been used for commercial porn spam and were later sold to Chinese government actors to push political messages, without deleting the account history: “They might buy old commercial accounts, and some of the commercial accounts had done porn, spam, cryptocurrency, and all sorts of other stuff.” So it was not the Chinese government that was deliberately posting porn, but the previous owners of the bots.

Obviously, the state’s tactics could evolve, but it’s important not to give the state too much credit for its capacity to meddle with social media.

Last but not least, it’s just generally hard to tie any social media activity to a foreign government when researchers don’t have access to internal company analytics. 

“Only social media companies can definitively link social media accounts to the Chinese government based on technical indicators to which they only have access. It is very difficult to distinguish between random accounts and possibly state-affiliated ones based solely on open-source methods,” says Albert Zhang, who researches Chinese disinformation at the Australian Strategic Policy Institute. “We make probabilistic assessments based on behavioral patterns found in previous Chinese government campaigns that Twitter and Meta have publicly disclosed.” 

Before Elon Musk acquired Twitter, it was one of the best social networks in terms of being transparent to outside researchers and sharing data with them, according to the researchers I spoke with. But even then, Twitter still withheld the internal data it used to determine whether an account was linked to a foreign government. 

Now, as the platform gets into bigger messes, this kind of academic collaboration is increasingly endangered. “That’s the big unknown right now. Normally with this kind of situation, we would be working with Twitter and seeing if they had seen this campaign, seeing what might be able to be done to tamp it down and prevent this kind of thing,” Thiel tells me. But after the mass exodus of Twitter staffers, no employees that used to work with the Stanford Internet Observatory are still on the team. These researchers have no direct contact at the company now.

Identifying and exposing foreign governments’ influence campaigns is already a hard job. Without the collaboration between tech platforms and researchers, it will be even more difficult to correctly hold governments accountable. Will it ever get better under Musk?

Did you think these accounts were linked to the Chinese government? Why or why not? I’d love to hear your thoughts at zeyi@technologyreview.com.

Catch up with China

1. China announced the first two deaths from covid since disbanding much of its zero-covid infrastructure. (Associated Press)

  • But many more deaths have likely gone unreported. One crematorium worker in Beijing said the facility had received over 30 bodies with covid in one day. (Financial Times $)

2. China is planning to pour another 1 trillion yuan ($143 billion) into subsidizing domestic chip industries. (Reuters $)

3. After the Chinese government agreed to let the US audit whether some Chinese companies are making military products, the US Commerce Department added 36 Chinese entities to the trade blacklist—but, in a win for China, removed 25 from the unverified list. (Financial Times $)

4. Using jokes, old photos, and protest news, Chinese Instagram meme accounts are creating a bridge between diaspora communities and Chinese youths at home. (Wired $)

5. Both national and state lawmakers in the US are pushing to ban TikTok from government phones. (South China Morning Post $)

6. A Chinese company tried to launch the world’s first methane-fueled rocket. It failed. (Space News)

7. Ford is working on a complex arrangement to build a battery factory in Michigan along with China’s battery giant Contemporary Amperex Technology—without triggering geopolitical concerns. (Bloomberg $)

8. Acting tough on China is one of the few things both parties can agree on in Washington. But Cornell government professor Jessica Chen Weiss, who spent a year in the Biden administration, is publicly challenging that consensus. (New Yorker $)

  • The Biden administration launched an interdepartmental coordination mechanism named “China House.” (Politico)

9. Writer Sally Rooney is gaining literary fans in China, both because Chinese youths see themselves in her work and because her Irish nationality has shielded her from worsening US-China relations. (The Economist $)

Lost in translation

As cities across China struggle to deal with a covid infection surge, OTC fever medicine has become the hottest commodity. But how did such a common medicine as ibuprofen sell out so widely and so fast? 

Industry insiders told Chinese health-care news publication Saibailan that many domestic pharmaceutical companies were disincentivized from manufacturing ibuprofen this year because until China relaxed its covid control measures in December, Chinese citizens were heavily restricted from purchasing fever medicine. Even though demand is up now, the ibuprofen supply chain needs time to recover and respond. 

To speed things up and ensure medicine supply, local governments are stepping in. Some have asked pharmacies to ration the drug and sell no more than six capsules to each customer. Other governments are even taking over pharmaceutical factories to make sure products are supplied to local patients first before they’re sold to other regions in China.

One more thing

Don’t miss the most viral Chinese internet slang of this year, a list put together by a local publication in Shanghai. The top 10 is a mix of covid-era creations like 团长 (tuan zhang), the volunteers organizing bulk-orders of groceries during Shanghai’s two-month lockdown, and social media phenomena like 嘴替 (zui ti), which means someone who can publicly speak out on things normies don’t dare to say or can’t articulate. And the top one is also the one I find most bewildering: 栓Q (shuan Q), which is really just a dramatic way to pronounce “thank you” when people feel speechless or fed up. Maybe internet trends don’t need to make sense. Just saying.

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