November 1, 2020: Trump Supporter and His Grandmother

Hello Interconnected Readers:

I’ve been spending the last week in Reno, Nevada, doing volunteer work for the US election during this final phase. (Nevada is the swing state closest to me.) Thinking back, I’ve spent every single Election Day, both presidential and mid-term, since 2008 in a political campaign setting except for 2014; that was my 1L year in law school.

[If you’d like to skip ahead to the six news stories and commentaries – three from English language sources, three from Chinese language sources -- here are this issue’s items:

• “China's Hopeless Twitter Influence Operations” (English Source: ChinaTalk)
• “Amazon Catapults Over Alphabet on Capex Spending” (English Source: The Information)
• “Apple's earnings in China drop nearly 30% in Q4” (English Source: Apple Insider)
• “Meituan’s number 1 startup project: ‘This battle must be won,’ says Wang Xing” (Chinese Source: 36Kr)
• “Who is paying for Hong Kong’s crazy IPOs?” (Chinese Source: China Venture)
• “Modi uses "trillion subsidies" to invite Tesla to build a factory, but will the Indian people like it?” (Chinese Source: Youniu Financial News)]

Going down memory lane stirred up quite a bit of nostalgia. The thing I’m most nostalgic about when it comes to political campaigns are the strangers -- volunteers, voters, random pedestrians even -- with whom you can strike up an instant bond, because of the joint purpose that brought you together and the assumption that you have to work together to bring that purpose to life.

This picture from November 3, 2008 (the day before Election Day) in Charlotte, North Carolina, captured that feeling:

The person in the lower-middle is likely the only person you’d recognize. A much younger version of myself -- the only Asian guy in the picture -- is slightly above him. Everyone else was a volunteer, who’ve spent hours everyday for months on end for a joint purpose. A few of the ladies drove from Tennessee. The gentleman in the lower right corner was a city council member in the UK and flew across the pond to help. What made this picture special for me was how tightly we grasped each other, not just the future president…

Fast forward to 2020, that physical proximity is no longer possible. We all stand far apart from each other with masks on, but that feeling is still there.

Regardless of who wins the American presidency, people must find a way to work together again -- between parties, between countries, between opinions and preferences.

One anecdote from a few days ago gave me a slice of hope. A grandmother drove up with her grandson looking to get a Biden yard sign. I showed them where the signs were and the grandson jumped out of the car to grab one, while telling me that someone stole his grandma’s sign, and he’s very mad that people are messing with his grandma. Assuming he might’ve been a Biden supporter, I asked him if he’d want to do some volunteer work. He very politely declined, telling me that he’s actually a Trump supporter! But he’s here to help his grandma. While we were having this conversation, the grandmother, still in the car, was yelling half jokingly that his grandson “needs to get educated!”, while he laughed. After grabbing a couple of yard signs and Biden-branded buttons for good measure, the grandson thanked me profusely for making his grandma’s day, and they drove off.

If you watch a lot of news, you’d think that people are born to hate each other. (And if you watch too much news, you may actually become that way.) I don't think we are. We can, and we must, be able to have differences in opinions and still help each other, work with one another, to achieve larger purposes that we cannot accomplish on our own. If not, we can at least be cordial about differences -- the young Trump supporter and his grandma.

That’s the task we all have to focus on after Election Day.

Kevin

The summary below covers the period between October 26 - November 2, 2020 of six news stories – three from English language sources, three from Chinese language sources. Disclaimer: all translated article titles are done by me, not official translations from the media outlets.

Before you go on, please check out last week's deep dive post: "Wall Street Blunts the “Delisting” Hype"

“China's Hopeless Twitter Influence Operations” (English Source: ChinaTalk)

My Thoughts: This analysis by Jordan Schneider of ChinaTalk on China’s Twitter game is fun and fascinating to read. The overall conclusion may not surprise you: China does not have much of a Twitter game and is a long way from matching Russia’s sophistication in using social media manipulation to affect American public opinion and politics. The crudeness in which China has applied its tactics on Twitter -- buying random accounts with only some following, writing most tweets during China’s working hours while Americans sleep -- is both comical and sad. I hope similar studies are being done on China’s influence game on Facebook and YouTube. Highly recommend you read this entire analysis, lots of good tidbits and food for thought.

“Amazon Catapults Over Alphabet on Capex Spending” (English Source: The Information)

My Thoughts: Amazon is known for its massive investment for long-term growth and moat-building, while trading off short-term profit-taking. So the big increase in capex revealed in this report is directionally consistent, though the size is still astounding. What’s more remarkable is that both Alphabet and Apple’s spendings are decreasing. While these three companies have some overlap in product and business lines, they also occupy their own respective corners in the tech industry. The global economy is still volatile, which usually reveals which companies are aggressive for the long run, while others shrink to become conservative.

“Apple's earnings in China drop nearly 30% in Q4” (English Source: Apple Insider)

My Thoughts: Speaking of Apple, its 28.9% drop in its Greater China sales produced a lot of headlines when it released earnings last week. 2020 is such a weird year that I’m not ready to derive too much meaning out of this drop just yet. Whether it’s caused by COVID-relate delays, lack of a new iPhone in the September quarter (Tim Cook’s official explanation), or an aggressive torque towards “patriotic buying” by Chinese consumers to support Huawei is a thread worth watching when next quarter’s earnings roll around. There will be no more “no new iPhone” excuses by then.

“Meituan’s number 1 startup project: ‘This battle must be won,’ says Wang Xing” (Chinese Source: 36Kr)

My thoughts: Meituan’s entrance into the already-crowded “community group-buying” business in China, currently led by Pinduoduo, Alibaba, and JD may end up fueling an already capital-intensive blood bath. This form of e-commerce is popular in China, while largely non-existent in the US. Wang Xing is known to be an aggressive and competent leader. Taking Meituan from a Groupon copycat to a superapp that is now a Hong Kong-listed public company with a 200 billion USD market cap speaks for itself. They definitely have the money and will to win this battle.

“Who is paying for Hong Kong’s crazy IPOs?” (Chinese Source: China Venture)

My thoughts: The US IPO market is not the only one being active this year; Hong Kong is having quite a year as well. (Below is a chart tracking the amount raised by month in Hong Kong from January 2019 to September 2020 in Hong Kong dollars.) Combined with rule changes in 2018 -- allowing non-profitable biotech companies, certain dual-structure companies (Xiaomi and Meituan) and second listing from companies with a primary listing in New York and London -- the exchange is gaining new life. Large funds armed with Fed-induced cheap capital, like Temasek and Hillhouse Capital, are pouring money into the Hong Kong capital market as more (in terms of both quality and quantity) companies list there. The New York-Hong Kong exchange rivalry could become a real thing.

“Modi uses "trillion subsidies" to invite Tesla to build a factory, but will the Indian people like it?” (Chinese Source: Youniu Financial News)

My thoughts: Where Tesla builds its factory has become the golden stamp of approval for a country seeking to prove its manufacturing and technological capabilities. So far, Tesla’s facilities span the US, Germany, and China. Elon Musk has been particularly positive about its Shanghai Gigafactory and gushed about his Chinese employees’ work ethics. It’s understandable that India would crave that status too, as Modi’s Hindu-nationalistic India becomes increasingly competitive with China. As I noted in “iPhone: ‘Made in China -> India?’”, some higher-end manufacturing is moving to India faster than I anticipated. But can the country produce at scale with high quality is a huge question. And a Tesla Model S is much more complicated than an iPhone 12.

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