1/18 Some local perspective on gaming regulations and "profound revolution": Tencent’s revenue growth in online games has been decreasing since 2018. Under 18 accounts for 6% of revenue. Policy restrictions on online video gamers on company fundamental is negligible.
2/18 Chinese have an hour less leisure time than Americans, but gaming penetration among adults is very high, though I’m skeptical it’s 90%. The likely economic reason: Gaming, particularly online video gaming, is the CHEAP leisure option. Lux Switch/PS4 sales are rising.
3/18 Don’t be led by headlines. For the first time, E-sports will be added as official sports in the 2022 Asian Games, hosted in HangZhou, China. The host country adds sports that it’s good at to add to medal counts. sport.gov.cn/n316/n338/c973…
4/18 E-sports is stamped as official sport by General Administration of Sports of China, the bureau tasked to win medals in Olympics and Asian Games. Its website is full of E-sports news. Link in Chinese
sport.gov.cn/n316/n343/n119…
5/18 In 2018 Asian Games, E-sports piloted as a
performing sport, and team China won 2 golds and 1 silver.
6/18 US and China/Asia will continue to be the dominant gaming market for the next decade. Expect regulations to come often: gamingscan.com/gaming-statist…
7/18 There are differences in how the public views the government's role in people’s life between China/Asia and US. To leave out the complexity of US-China politics, use Singapore as an example.
8/18 Singapore’s government only allowed soft background music, not loud or live music, in some areas because it worried that loud music will cause people to talk loudly, which increases the risk of Covid droplet spread? Yes, it’s true. moh.gov.sg/news-highlight…
9/18 In Asia and China, the government’s role in an individual’s life is much more involved. This is not to say the Chinese government’s many recent abrupt policies are in any way good. It quietly acknowledges the bad policy process by firing the education minister.
10/18 But that when analyzing Chinese regulations, a significant number of abrupt policies generally has little effect on the ground because the government needs to be seen that it is doing something while the public generally understood it is thunder but not rain .
11/18 On the opinion piece with "profound revolution" in China. In the limited spectrum of Chinese public opinion, there is a fraction that could be classified as “extreme Chinese left wing,” who miss the glory days of "equality" under Mao.
12/18 As China’s inequality has indeed significantly increased, they have a non-significant following. Their writing style is also easy to spot in Chinese, which uses extremely emotional and grand phrases that bring back memories of cultural revolution.
13/18 In the day of social media, the Chinese extreme left wing voices were amplified, sometimes with official news outlets backing. The author of this specific opinion piece is a retired editor of a provincial level electricity INDUSTRY newspaper from Hubei province.
14/18 All these suggest the unlikelihood of his opinion translated into substantive policies. In Chinese, there is a phrase for these group of people and writing as “Old Retired Official” style, retired a subtle meaning of out of power.
15/18 A lot of this news is more an indicator of
dissatisfaction within the party, which the extreme left wing still has non-trivial presence.
16/18 Though never a good comparison, it is analogous to US extreme left wing vs. left wing political struggle spilling out into the open when primary elections are close. The effect of the actual policy implemented down the road is nowhere clear or dire.
17/18 Any given day, there are hundreds of pieces from these extreme left wing loose group circulating and occasionally it caught the attention of social media and official media.
18/18 For anyone interested in understanding this faction, here is a quick wiki on one organization of the extreme Chinese left wing that was shuttered. The government could censor, the people and power behind the pro-Mao ideas are still active. en.wikipedia.org/wiki/Utopia_(i…

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More from @liqian_ren

15 Sep
1/5 #China YOY Aug #retail #sales actual 2.5% vs expected7.4%. Said repeatedly here/clients that growth is the No. 1 risk but everyone loves to talk Regulation/ WAR. Going forward, count on continued monetary support #PBOC, #growth could even surprise on the positive side soon.
2/5 About Delisting risk, did you know that among large/mid BROAD #China universe, only about 6%, or 28 companies that are only listed in the US, after a barrage of companies like @NetEase_Global dual listed in HK? Below is the details. The key is Broad Universe, of course.
3/5 Hard to write something that has shelf life. The focus of future is really HK EX and Shanghai STAR board. 1 yr later, likely 5-7 comp. would sole US listed among large/mid cap. Chinese companies know both US and China didn't want them to list in US. wisdomtree.com/blog/2020-12-1…
Read 6 tweets
13 Sep
1/ 11 A thread on a piloting program #China Wealth Management Connect(跨境理财通). Central to understand: Blackrock $1b onshore fund subscription as first WhollyOwnedForeign Enterprise (WFOE), Qianhai/Hengqin Plans to spur integration HK-GuangDong-Macau Bay area.
2/11 Analogy: Think Stock/bond Connect trading program but for asset management industry. Secondary effect also plays to the ambition of RMB internationalization. Again, Dollar’s reserve currency status could only be lost by future US obsession with #MMT.
3/11 Those who recently started paying attention to China’s regulatory/policy framework, this is very typical how policies got implemented: start small to tread water and if it went out of control, shut it down completely, then start testing again.
Read 12 tweets
12 Sep
1/3 A quick thread of #Vietnam. 2020, discussions rage on supply chain diversification from China. Western companies prefer LatinAm, India and South East Asian Nations(ASEAN) Asked local Chinese businesses, they prefer Cheaper Chinese cities, ASEAN, India. Intersection: ASEAN
2/3 Among ASEAN countries, Vietnam came up constantly, for its similar political and cultural background with China. From @IMFNews Vietnam fastest growing among ASEAN neighbors last 10 years and project to grow fastest next 5 years.
3/3 Vietnam is largest weight 29% in @msci frontier index. Its communist party is watched closely in China as it seemed have moved faster toward liberalization.
Read 4 tweets
11 Sep
For #China Equity VIE risk assessment, I highly recommend paying attention to this company 旷视科技 (en.megvii.com)It may become a VIE structured company but listed in Shanghai STAR board. That would be a huge regulatory stamp of approval. baijiahao.baidu.com/s?id=171042585…
@Reuters is reporting that Chinese companies with #VIE structure needs government approval before listing in HK. That should be abundantly clear after #DIDI debacle. My own assessment from a while back still stands well. wisdomtree.com/blog/2021-08-1…
#MEGVII (旷视科技)'s VIE risk disclosure (Chinese, p11) pdf.dfcfw.com/pdf/H2_AN20210… for Shanghai STAR board is extensive and legal wording similar to #BABA SEC 20F disclosure (English) alibabagroup.com/cn/ir/secfilin…
Tencent HKex disclosure (English) on WFOE shortest static.www.tencent.com/uploads/2021/0…
Read 4 tweets
6 Sep
1/21 A long thread of local context for Ant Financials’ Credit Scoring Joint Venture and Chinese state ownership. There has been significant recent news of Chinese SOEs taking stakes in private companies. #PBOC #BABA #China #Ant #Didi #ByteDance #Hefei #ZheJiang #Evergrand
2/21 How to make sense of this trend? ONE: the government’s goal is to take enough equity to acquire a seat in the board, bail out a locally troubled company, or pure investment return, not necessarily ownership and control per se.
3/21 Taking state ownership means government needs to pony up significant capital. In BOE Tech deal, Hefei city put in more than $2 billion. It had four more investment deals with >$1 billion. Many numerous deals like PuDao Credit, the Beijing-affiliated SOE put up $52.5million.
Read 22 tweets
27 Aug
1/N A thread on China's demography crisis.
2/N 1-6-18-27 My paternal grandfather has 6 children, 18 grand kids, and 27 great grand kids. My generation was the hardest hit with the one child policy. This is the pattern for my maternal grandfather(1-4-7-11). It generally mirrors the birth per women trend charts. Image
3/N But does US/China has demography crisis? In 20 years, maybe, US/China old age dependency ratio will reach CURRENT level in Japan. I say MAYBE because that forecasting model is highly uncertain. Even a little bit change of fertility rate could substantially change outcome. Image
Read 8 tweets

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