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Posts by: James Hunt

Beijing’s bicycle mania must decide its environmental legacy

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bike graveyard

The abundance of dockless shared bicycles in the Chinese capital has cluttered pavements and provoked authorities to dump many bikes in “bicycle graveyards” or landfills. But does such a saturated marketplace offer the world’s cities a viable environmental alternative to the car?

British songstress Katie Melua once sang that “there are nine million bicycles in Beijing”. While that statement may have rung true for much of the latter 20th century, the once-ubiquitous Flying Pigeon bicycle – of which over 500 million have been made since 1950 – has since been supplanted in the affectations of Beijingers by the car, of which there are currently over five million jostling for space on the Chinese capital’s roads.

But despite the limited success of government initiatives designed to restrict car use, the humble bicycle is enjoying something of a renaissance in Beijing and throughout urban China thanks to the rise of dockless sharing schemes. Riding the coat-tails of China’s recent boom in online payments, users download an app showing the location of bikes in the vicinity; once one is located, the user simply scans a QR code on the bike to release its locking mechanism, and is then free to ride wherever and for as long as they please, at a price roughly equivalent to 12p per hour.

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In addition to representing considerable value for money, the dockless, free-to-park-anywhere nature of China’s two-wheelers make them a considerably more user-friendly proposition than similar schemes elsewhere in the world such as London’s Santander Cycles, which are hamstrung by the need to be picked up and dropped off at docking stations located around the city. And with China’s dockless market leaders Mobike and Ofo entering the UK market, TFL may soon be looking nervously over their shoulders.

But though the rising use of bicycles is helping to clean Beijing’s perennially polluted air, their popularity is also giving rise to other environmental concerns. The early success of Mobike and Ofo – who now operate a combined 15 million bicycles across China – inspired many other firms to follow suit. According to Chinese state broadcaster CGTN, there are 2.35 million shared bicycles in Beijing alone, representing a figure roughly five times the real market demand. Walking through the capital’s business district one day last summer, I pushed my way past at least nine different brands of garishly liveried shared bikes on the pavement. Ironically, though the government may have hoped that the increased use of bicycles in lieu of cars may help alleviate congestion, the sheer volume of two-wheelers left haphazardly in public spaces across Beijing means that the opposite is often true.

Security guards at many office complexes and metro stations have lost patience and begun to implement specific zones in which bikes are permitted to be left, thereby partially undermining their “docklessness”. Meanwhile, local authorities have taken matters into their own hands by dumping huge numbers of bikes in landfill sites. Photographs of these makeshift “bike graveyards” have gone viral across Chinese social media, painting a questionable picture of the industry’s supposed sustainability.

Shenzen bikes

There is an abundance of shared bikes on the streets of Shenzhen and other Chinese cities

Fast punctures

With effective regulation from local authorities in short supply, many copycat outfits have quickly come and gone, having fallen victim to vandalism and their own poor financial planning. Discarded bikes are often seen strewn around parks, in rivers and even in trees. Many firms, however, have been content to write off the cost of destroyed bikes, and simply create more in their place, thus exacerbating the oversupply. Paradoxically, this situation may have come about in part thanks to China’s recent history as the workshop of the world – with years of experience and expertise in large-scale manufacturing to draw on, it is often more cost-effective for firms to build a new bike than to fix an existing one.

One firm, Wukong, went under after apparently losing around 90% of its stock, having seemingly failed to realise that their bikes’ lack of a GPS tracking system made them very easy to steal. More seriously, from a regulatory standpoint, other firms vanished after accruing millions of dollars in financing and users’ deposits. The failures of Bluegogo and Mingbike late last year seem to have spurred the government on to introduce measures tightening regulation of the nascent industry. In response to the Mingbike collapse, which resulted in the company laying off 99% of its staff and withholding all customer deposits, worth around 199 RMB each (about £23), the South China Morning Post quoted China’s Ministry of Transport as saying local governments would help ensure protection of consumer rights, adding that a series of regulations were now being drawn up.

As the recent rise of both shared bicycles and online payments has shown, new trends and innovations typically catch on quickly in China’s monumental marketplace, with authorities often playing catch-up in enforcing effective legislation. But the race now seems run. The number of shared bicycle operators in China has diminished as Ofo and Mobike appear to have won the battle for market share. Now that authorities are set to tighten regulation of the industry, there are signs that the “Wild West” era of bicycle-sharing in China may be over.

The bicycle has been synonymous with efficiency, translating 99% of the rider’s exertion into kinetic energy. While China’s bike-sharing marketplace can’t currently claim the same economy, its legacy could revolutionise the world’s cities.

Indeed, as dockless bicycles appear onto the streets of London, environmentally-conscious transport authorities in the UK and across much of the Western world will no doubt be keeping a close eye on how the movement continues to develop in China, and whether the combination of governmental regulation, technology and market forces will bring forth a 21st century “bicycle mania” of counter-productive largesse, or a sustainable urban alternative to the internal combustion engine.

Top image: a shared-bicycle graveyard in Beijing

James Hunt is a China based journalist

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Could Britain benefit from Theresa May’s Chinese Youthquake?

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China Grads

The British prime minister’s trip to China has seen £9 billion’s worth of trade deals signed but will the real legacy be “Auntie” May’s appeal to China’s next generation?

It’s rare a world leader sees a trade mission to an emerging superpower as a welcome respite. However, one could forgive Theresa May for such sentiment given the cabinet infighting over Brexit and uncertainty over her own hold on power. The prime minister travelled to China with designs on promoting her country’s post-Brexit vision of “Global Britain”, and reassuring Chinese leaders that the UK would remain open for business after extricating itself from the EU.

However, as a result of Brexit or not, there remains a sense that China-UK relations are yet to reach the heights they had under the Cameron administration, when the Chinese leadership effusively spoke of bilateral ties entering a “Golden Era”. Along with George Osborne, the former PM judiciously ignored contentious issues such as democracy, human rights and the future of Hong Kong, as the UK aggressively courted Chinese investment, joined the China-led Asian Infrastructure Development Bank and agreed a deal that would see heavy Chinese involvement in the construction of a new nuclear power plant at Hinkley Point.

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Under Theresa May, China-UK  ties have not been quite so chummy, with the new PM risking putting Chinese noses out of joint by halting the Hinkley Point programme in order to carry out an evaluation on the safety and security of British interests. And while May’s visit to the Middle Kingdom sees her and Chinese president Xi Jinping signing off on a raft of bilateral deals worth approximately £9 billion, the prime minister notably passed up the opportunity to sign a memorandum of understanding giving the UK’s official endorsement to China’s Belt and Road Initiative.

The awkwardly named plan is China’s vision for strengthening its economic ties and overseas influence but, as yet, no Western countries have given it their official backing, perhaps wary of endorsing a Chinese foreign policy seen as exploitative and neo-colonial.

Meanwhile, May has also faced calls from former Liberal Democrat leader Paddy Ashdown and former Hong Kong governor Chris Patten to raise concerns over Beijing heavy handedness in Hong Kong. Internationally, China’s increasing disregard for the ‘one state, two systems’ approach has been criticised as an erosion of rule of law in the former British territory. While May indicated before arriving in China that she was prepared to bring up the issue in talks with president Xi, it is unclear to what extent she has done so. Downing Street officials say this was done in private while Chinese state media commended the prime minister for “sidestepping” the issue.

School rapport

It’s impossible to look past such silence without considering the elephant that is Chinese investment. Increasingly, Britain is courting this through school and university places. The UK currently plays host to some 100,000 Chinese university students who paying handsomely into a sector worth £20 billion to the British economy. This might go some way towards explaining May’s decision to begin her China jaunt in Wuhan: the central Chinese city is home to over 85 colleges and more than 1 million students.

Perhaps because of the UK’s educational connection with many of China’s students, May seems to have found a core group of unlikely allies in the form of the country’s net users. Chinese state media outlets have been eager to trumpet the warm reception given to May and her husband Philip. This has gone as far as to earn her the moniker “Auntie” May. A rather hackneyed video on the English-language website China Plus shows a selection of Chinese twenty-somethings praising May for not conforming to the stereotype of a female politician, as well as waxing lyrical about her dress sense and love of leopard print.

May’s surprising popularity may also in part be thanks to a deep-rooted appreciation of British popular culture, with television shows such as Sherlock, Doctor Who and Downton Abbey all enjoying a considerable following among China’s youth. Perhaps the PM might wish that opinion polls back home resembled the popularity of British box sets. Equally, if her appeal to China’s young does hold diplomatic value, she will hope to be around long enough to utilise her Auntie status.

James Hunt is a Beijing based journalist

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Why China is at the centre of the digital payment revolution

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Beijing

Even China’s homeless now take payments by smartphone. As the government works out how best to manage the $9 trillion spent annually via apps, Beijing-based journalist James Hunt examines the implications for China and the West

It’s 7:30am and I’m on my way to work in downtown Beijing. I stop at a nearby café for some breakfast and a coffee and then cycle to the office on one of the many rent-a-bikes to be found dotted around the Chinese capital. At midday I head for lunch at a nearby restaurant, before stocking up on fruit from a street vendor. Later that evening, I hail a taxi to meet friends for dinner and, feeling charitable, on my way home I stop to give a homeless man the equivalent of £1. All this has been achieved using just a smartphone, with not a banknote, coin or credit card in sight.

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This scenario may be difficult to imagine in the UK and across much of the developed world but in China it is fast becoming the norm, rather than the exception. Apps such as the ubiquitous messaging service WeChat allow users to link their bank cards to their online profiles. This means quick and easy payments in restaurants, bars, shops and just about everywhere else, by simply scanning a QR code. The correct amount is then transferred directly and instantaneously to the recipient’s account.

This system also works for people-to-people transactions. Beijing taxi drivers all accept mobile payments and even local beggars eagerly hold up QR codes next to their tin cups, accompanied by signs reading “WeChat payment accepted”. In many cases, vendors and individuals prefer the convenience of a quick and easy electronic payment to fumbling around with coins and banknotes, especially as the largest denomination banknote stands at a relatively low 100 RMB (around £11), meaning carrying around large amounts of cash can become cumbersome. For services such as shared bicycles, paying on your phone is the only option.

While many Western countries are being slow to move to a cashless society, the pace of change in China has been substantially quicker, with mobile payments having become de rigueur in the last couple of years. Between 2015 and 2016 such payments in China more than quadrupled to $9 trillion, according to Chinese research firm iResearch. By contrast, mobile transactions in the US over the same period of time increased by just 40% to a comparatively measly $112 billion. John Artman, editor-in-chief at Beijing tech website Technode, says there are two ways to look at the rising popularity of online payments in China. “In the context of the country’s turbulent modern history, Chinese people are very used to change, and also want a better quality of life. This means they adapt to new technologies very quickly. Chinese tech companies are also very good at gamifying their products and offering incentives to attract users, offering discounts if users pay through the respective payment methods.”

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China’s rapid growth in mobile payments also comes off the back of a huge bedrock of smartphone users, with over 900 million people using WeChat on a daily basis. In addition to messaging and transferring money, the app allows users to top-up mobile phone credit and pay utility bills. It also features services from third-party operators, meaning you can book trains and flights, buy movie tickets and even have food delivered without leaving WeChat. Such is the scale of the app’s impact on modern urban China that adding each other on WeChat is fast replacing business card exchanges in professional settings.

Of course, such a reliance on smartphones and mobile payments is not without its drawbacks. Without access to wifi or mobile data the whole system becomes useless. Additionally, both WeChat Pay and its main competitor Alipay only allow for Chinese bank cards to be linked, meaning foreigners visiting China will have to continue to muddle through with cash and cards.

Watching your money

And, as with the increase in an individual’s digital surface area in the West, state surveillance is also a concern. With social networks in China being closely monitored by the government, users are worried about the amount of information that authorities can potentially gain access to: “Although it’s difficult to say what actually happens with user data, China is trying to build a digital society where all behaviour online and off can be connected to the person via their ID number,” says Artman. “On one hand, this allows businesses to trust that users are who they say they are and allows certain innovations to take root faster, such as micro-lending and P2P lending. On the other hand, the future ability of the Chinese government to monitor and control behaviour is concerning.”

It seems Beijing has multiple reasons for monitoring the use of app payments. The system’s convenience and ease of use may soon be tested as China’s financial regulators finally begin to catch up with the rapid rise of online payments, no doubt conscious of the double-edged sword they represent: essentially eliminating the perennial problem of counterfeit currency while simultaneously providing channels for tax evasion and money laundering.

Currently, phone payment transactions do not have to pass through China’s central bank’s clearing system, making it difficult for authorities to counter fraud. This is likely to have contributed to the rapid growth of online payments in China, where the culture of cash bonuses and backhanders (untaxable, naturally) remains rife, despite official protestations to the contrary. Being able to instantaneously send and receive large sums of money without the need for declaration only makes it easier to avoid tax. However, in 2018, this loophole is set to be tightened, which may cause companies and individuals to be more guarded about how they move their money around.

But in China at least, it appears that sheer convenience trumps any lingering doubts over privacy and official interference. Wallets are increasingly being left at home, as a smartphone becomes the only accessory needed to fulfil one’s day-to-day needs. When it comes to the rise of a cashless society, the Middle Kingdom is firmly at the centre of the movement. For now, Western societies remain at the periphery, waiting to interpret the socio-economic dividend of such technological advances.

James Hunt is a Beijing-based journalist

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