From Evergrande's auto unit restructuring to the Tin Hau parade in Hong Kong – Here are today's Headlines

From Evergrande's auto unit restructuring to the Tin Hau parade in Hong Kong – Here are today's Headlines
People walk past the logo of China Evergrande Group seen on the Evergrande Center in Shanghai, China September 22, 2021. Reuters/Aly Song/File Photo

To start off, we're looking into:

Evergrande’s auto unit restructuring

The backstory: China’s property market is a big part of the country’s economy, with some estimates saying it makes up anywhere from 17-29% of China’s GDP. But, over the last few years, it’s seen a lot of struggles, with housing being majorly unaffordable for most people and many property developers struggling with mounds of debt they couldn’t pay off. The government started cracking down on developer borrowing in 2020 to even the sector out.

But then, one of China’s biggest property developers, Evergrande, sent shockwaves through the industry when it defaulted on its debts in 2021. How bad was this, you ask? Well, Evergrande's total liabilities are over US$300 billion, making it the world’s most indebted property developer.

More recently: But, the thing is, Evergrande is a huge company, and it’s got interests in other sectors than real estate. For one, it has an automaker unit, Evergrande New Energy Vehicle Group. This auto arm focuses on producing electric vehicles (EVs) and is supposed to be a crucial part of the company’s overall turnaround, according to Evergrande’s top execs.

But, alongside parent company Evergrande’s announcement that it was restructuring its debt also came a warning that its auto unit could shut down if it couldn’t secure more cash. Evergrande Auto had already taken some steps to cut costs, like laying off some of its workforce. But, it still hoped to get about 29 million yuan (US$4.2 billion) in order to keep operating, launch new EV models and “achieve mass production.”

The development: Now, Evergrande Auto just got the go-ahead from its shareholders to sell two of its subsidiaries, Flaming Ace Ltd and Assemble Guard Ltd, as part of a restructuring plan. These two units, which hold 47 property projects between them, would be transferred over to another branch inside the conglomeration, the investment business Anxin Holding. This will let Evergrande Auto focus on its EV production and maybe even increase its valuation, meaning more investors and more money. With this sale, Evergrande’s EV unit said it would record a gain of about 24.79 billion yuan (US$3.59 billion).

Tesla’s “recall” of cars in China

Tesla recall in China
Visitors check a Tesla Model 3 car next to a Model Y displayed at a showroom of the U.S. electric vehicle (EV) maker in Beijing, China February 4, 2023. Reuters/Florence Lo/File Photo

The backstory: If you're a Tesla fan, you might know that China is a goldmine for the company. It's where the world's largest auto market is, and Tesla depends a lot on China for making and selling its products. In 2021, Tesla raked in a cool US$18 billion in revenue from China, which is six times more than it made in 2019.

More recently: The EV automaker sold around 1.13 million cars in China from 2014 through March, according to the China Automotive Technology and Research Center and Bloomberg. But, Chinese Tesla drivers have been complaining about their car's acceleration and braking problems for years. In one viral moment, a protester climbed on top of a display car at an auto show in 2021, saying her dad almost died because of a brake failure.

The development: Now, Tesla is having a bit of a “recall” situation in China. The “recall” applies to over 1.1 million cars in China. But, the reason we put that in quotations is that its not like a typical recall – instead, this involves fixing an issue using an over-the-air software update to add additional safety features to prevent pedal misapplication.

Basically, some of the vehicles have defects that could make drivers accidentally press on the "gas" pedal for too long or when they mean to press the brake, which could lead to a crash. The thing is, this is a bigger problem with EVs because they don’t “vroom” the way that gas-powered cars do, and they accelerate more quickly, meaning its easier for drivers to press the wrong pedal – aka pedal misapplication – without realizing it.

Click the link here to read more about the over-the-air software update.

China’s new blockchain research center

The backstory: China’s tech interests range, but the government definitely has eyes on the Web 3.0 industry to build up its digital economy. Web 3.0, or Web 3, is basically the next version of the internet, where users are connected through a decentralized network and with tech like blockchain and digital assets like cryptocurrency. While cryptocurrency trading is banned in mainland China, the government is still interested in using blockchain tech in the mainland.

More recently: The Beijing Academy of Blockchain and Edge Computing (BAEC), a research institute backed by the government, has already created China’s first open-source blockchain platform. It’s called ChainMaker, aka the Chang’An Chain. This past January, the government started loading up this platform with info from over 80 government departments to “effectively improve the security and order of government affairs and social data.”

The development: Last Wednesday, China launched a blockchain research center led by BAEC – the National Blockchain Technology Innovation Center. It wants to train 500,000 specialists to really amp up development in this digital sector. The project is also backed by the Ministry of Science and Technology, and it will work with universities, research institutes and companies to train workers and support China’s digital economy, according to a report from state media agency Xinhua.

China hopes to use this research center to start integrating the blockchain more into the operations of everyday life and create a national blockchain network. Eventually, the goal is to make blockchain a part of China's digital infrastructure.

To end, we'll look into:

New Twitter CEO risks the glass cliff?

We’re familiar with the “glass ceiling,” which makes it harder for women to break into more advanced positions in the workplace. But have you ever heard of its cousin, the “glass cliff?”

The glass cliff is a phenomenon where a woman is assigned a position of power in an organization, just as it looks like things are taking a turn for the worse. Essentially, this is when a woman (or someone within a minority group) is put at the top just as everything is about to fall apart, meaning that person has a big chance of falling right off that cliff.

“When an organization is in crisis, women are often seen as being able to come in and take care of a problem,” explains Anna Beninger, senior director of research and corporate engagement partner at Catalyst, a nonprofit for promoting women in business. “They’re effectively handed the mess to clean up.”

So people are questioning: Is that what’s happening with Twitter’s new CEO?

After Elon Musk took over the company last year, he’s been making a lot of changes to the platform and how it’s run. Twitter has gone through mass layoffs, a transformation of the Twitter Blue subscription service, back-and-forth on verification and platform glitchiness. Musk has also renamed the parent company of Twitter “X” and plans to revamp the platform to make it more multi-use. But, he’s been struggling to make a return on the US$44 billion investment he shelled out when he bought it in the first place.

Last Thursday, Musk announced that he’d be stepping down as CEO, which he had been saying he’d do as soon as he found a suitable replacement. On Friday, he revealed who would be taking over – Linda Yaccarino, who used to run advertising at NBCUniversal. "Looking forward to working with Linda to transform this platform into X, the everything app," Musk tweeted.

Some are saying that Yaccarino’s career history makes her the perfect person to boost back trust between the platform and advertisers, which started distancing themselves from Twitter after Musk’s takeover. But, while we love to see more women represented in major leadership positions, there are whispers floating around that risking facing the glass cliff.

“This is a classic glass cliff situation, in which a failing company hires a woman to clean up messes made by arrogant men,” tweeted notable digital media advisor Heidi N. Moore. “Then she becomes the scapegoat because it’s impossible to clean up.”

We’ll have to keep tabs on the situation to see how much Musk really plans to “step down,” seeing as he will still be involved in product design and tech development. So, he may still be pretty hands-on in a big way, which could make it harder for Yaccarino to turn the ship around.

“She should get out quick” if Musk remains dominant, said Jennifer Chatman, professor of management at the Haas School of Business, to Axios.

In other news ...

💬Zelenskiy meets the pope: The Vatican has been pushing for peace between Russia and Ukraine. And, in April, Ukraine PM Denys Shmyhal asked the pope for help getting Ukrainian children returned from Russia. On Saturday, Ukrainian President Zelenskiy met privately with Pope Francis at the Vatican. He said he was looking for support for Ukraine’s peace plan and discussed the need to return deported Ukrainian children. On the other hand, the Vatican’s statement said they spoke about the “humanitarian and political situation provoked by the ongoing war” and that the pope would continue praying for Ukraine and his “invoking of the Lord for peace.”

👮‍♂️Kenya starvation cult victim numbers rise: In Kenya, a religious cult attracted hundreds of followers. The cult’s leader basically told followers to starve themselves if they wanted to meet Jesus. Last month, the leader was arrested, and an investigation started with exhuming bodies on his 800-acre property. On Saturday, the death toll rose to 201, with new bodies found. There are still 600 people missing in relation to the cult.

☮Israel and Palestine agree to a new ceasefire: Last Tuesday, Israel began a military operation in Gaza, killing three Palestinian Islamic Jihad (PIJ) militants and at least 10 civilians. Five days of intense fighting between Israel and Palestine followed, with PIJ fighters firing a series of rockets at Israel and Israel sending airstrikes to Gaza. On Saturday night, Israel and Palestine established a ceasefire with the help of Egypt, and it seems to be holding so far. But it got off to a rocky start, with some ongoing exchanges right after it was supposed to begin.

🤝G7 finance chiefs meet: G7 finance leaders met in Niigata, Japan, for three days. On Saturday, they warned about growing economic uncertainty, with leaders already preoccupied by US bank failures and moving away from Chinese dependence. A lot of discussions centered around the US debt ceiling standoff and economic problems brought on by Russia's invasion of Ukraine.

📩Turkish election: Tayyip Erdogan has been the leader of Turkey for the past 20 years and ran for re-election (again) this year against opposition leader Kemal Kilicdaroglu, who’s at the head of a six-party coalition. While Kilicdaroglu had a slight lead in the opinion polls, the results of Sunday’s election seem to show no clear winner having over 50% of the vote. So far, more than 90% of the votes have been counted. So, it looks like there will probably be a runoff election on May 28 to decide the country’s new leader.

🌀Cyclone Mocha falls on Myanmar and Bangladesh: Tropical Cyclone Mocha, which has winds as strong as a Category 5 hurricane, started forming last Thursday, headed toward Myanmar and Bangladesh. It made landfall on the coasts of Myanmar and Bangladesh on Sunday, causing massive damage, landslides and floods. Aid agencies have already started launching an emergency plan.

📺Disney’s content purge: Streaming platforms like HBO have been getting a lot of flack for completely dumping some original content. Now, Disney is looking to pull some of its own content from Disney+ to save money, but it would also end up facing an impairment charge of up to US$1.8 billion if that move goes through. The company plans to release less original content in the future to make better use of its marketing approaches.

🎬Cannes bans protesting: Cannes film festival in France is one of the biggest movie festivals in the world, and it has a history of getting interrupted by public protests and demonstrations. With France’s new pension reforms causing chaos all over the country, Cannes just announced a ban on all forms of demonstrations and gatherings on the public highway there during the film festival, which starts on May 16.

🚀Hong Kong looks to space for improving crops: Hong Kong researchers have sent an important strain of bacteria that lives on soil to see if it can be made stronger, with more tolerance for salt, heat or drought. The bacteria, rhizobia, is essential to naturally fertilizing soy crops, and it made its space debut after being launched into orbit on China’s Tianzhou 6 cargo craft. They expect the samples to return to Earth in 6-8 months, and then they’ll study the mutations that happened under space’s unique conditions.

⛰Sherpa snags record: Sherpas are known for having amazing climbing skills, and they guide other mountain climbers on difficult hikes. One Nepali Sherpa, Pasang Dawa, reached the top of Mt. Everest on Sunday for the 26th time, becoming the second person ever in the world to take that record. Another sherpa, Kami Rita, is climbing Everest now and could make another record once he reaches the top.

🌚Saturn is the moon master: For a long time, scientists believed that Saturn had the most moons out of all of the planets in our solar system, with a count of 83. But in February, new research came out that Jupiter had 92 moons, kicking Saturn from the top spot. Now, Saturn is taking back the crown, with 62 new moons being discovered, bringing its count up to 145. Take that, Jupiter.

🎤Eurovision 2023: Every year, Europe hosts a friendly song competition called Eurovision, with the addition of Israel and Australia as participants. Ukraine won the contest last year and should’ve hosted this year as per the rules, but the UK stepped in as the proxy host because of the ongoing war with Russia. The grand final this year was held in Liverpool, and Sweden won the contest with the pop singer Loreen performing a song called “Tattoo.”

Loreen from Sweden wins Eurovision
Loreen from Sweden holds her trophy after winning the 2023 Eurovision Song Contest, in Liverpool, Britain, May 14, 2023. Reuters/Phil Noble/File Photo

🎉Tin Hau festival: The Tin Hau festival, which celebrates the birth of the goddess of the sea – Tin Hau – is debatably one of the the loudest festivals in the city. With over 70 Tin Hau temples around Hong Kong, each one celebrates her birthday through music, lion and dragon dances, martial art acts and huge floral floats, otherwise known as fa pau, which are carried down the streets. Here are some pics from the Friday festivities.

Tin Hau parade in Hong Kong
Participants preform dragon dance and fire breathing during a parade celebrating Tin Hau festival at Yuen Long district, in Hong Kong, China May 12, 2023. Reuters/Lam Yik
Tin Hau parade in Hong Kong
Young participants take part in a parade celebrating Tin Hau festival at Yuen Long district, in Hong Kong, China May 12, 2023. Reuters/Lam Yik

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Written and put together by Joey Fung, Vanessa Wolosz, Caleb Moll and Christine Dulion