Having to hit the ground running here in #China first thing on Monday. Already feel like I’ve run a marathon and haven’t even had my second coffee yet. A great week ahead to you all.

China Afternoon Missive I had mentioned in a previous Note that there are a number of pressure points China can apply in a retaliatory trade conflict with America. Specifically, I mentioned that China manufactures 50% of the world’s antibiotics. I also mentioned that China had learned its lesson during Covid and the blowback that came when limits were placed on exporting PPE to the United States. For the time being, such an approach – direct pain to the American populace – is to be eschewed. Come to find out even the minimal tariff of 10% on all Chinese imports has elicited a quick reaction from America’s medical and hospital communities. Quoting from this Reuters article “The American Hospital Association wrote in a letter to Trump on Tuesday that the tariffs will affect cancer and heart medicines as well as antibiotics like amoxicillin from China.” As we can clearly see here, China maintains a sizeable market share in various medicines and apparently nothing was done to correct this overreliance even after accounting for the PPE shortage during Covid. Now think about just how many American industries are facing the exact same issue. We aren’t talking about import bans mind you. This, right here, is only a reaction simply to the levying of a 10% tariff meaning higher prices. Seems as though profit margins are about to be squeezed hard across a number of industries, or higher prices will be passed along to consumers meaning stickier inflation. Anyway, it has been one hell of a busy week. https://www.reuters.com/world/us/trump-faces-pressure-us-industry-over-china-tariff-medicines-2025-02-06/

The War for TikTok in America - #5 This, slow rolling the sale, was expected and yet should be viewed as just one front in the war over this dominate social media platform. Leverage. It is that simple. With numerous parties vying over buying the American TikTok platform, the Chinese know the value of this platform and the role it can play in gaining a real advantage in the much larger trade conflict with America. A point that I’ve not seen mentioned in all the media coverage is that TikTok parent ByteDance is 60% owned by foreign investors. Susquehanna Capital alone owns 15% of ByteDance. There’s real money at stake and incentives, you would think, are more than a little aligned. In the end, however, any deal will need to be approved by the Beijing ministerial powers. Then there is the issue of the ByteDance “Golden Shares” A 60% ownership stake might be irrelevant at least when it comes to “control”. The Chinese government began a process three years ago whereby “critical enterprises” were required to issue Golden Shares. Essentially these are a separate form of equity, akin to Preferred Shares. The aim of these Golden Shares, typically 1% of all outstanding equity, is to provide control over key board level decisions. Basically, Golden Shares allow the Chinese government to veto any vote deemed to go against the interests of China. So, there remains a ton of moving parts, and I’ll just reiterate that China has all of the leverage. https://www.reuters.com/technology/tiktoks-chinese-owner-appears-be-slow-rolling-negotiations-sale-washington-post-2025-02-05/

This has been making the rounds. Jokes aside ….. he’s not wrong. The guys who built DeepSeek did it as a side project for their quant fund. Nvidia and all those associated to the closed source OpenAI are looking to have a very rough week ahead in the markets. Also, no relation with “goodalexander”

Need to reiterate the following to any/all who are new to Nostr. Engagement with the community is critical. A “lurker’s” mentality will result in a very sub-par experience. Say whatever you want. Post notes on whatever is your subject matter expertise. Be weird, whatever that might mean. Just engage on a regular basis. This is a message I have to keep reminding myself too.

Asked about TikTokers migrating to RedNote in my CNBC segment. Said it would probably be a short lived phenomenon. Then said “the TikTok refugees should go to Nostr.” Explained that it was truly decentralized and even a far better option than Bluesky. The hosts didn’t know where to go after that. Was great to preach the Nostr protocol on CNBC though.

Holy Abomination Batman!!!!!

China Morning Missive This, right here, is what occurs when a government makes the decision to starve an economy of leverage. Bitter medicine, and why it is the Xi Jinping has been telling his people for two years that it is necessary to “eat bitterness”. Hard choices were needed, and hard choices were made. Watching the western business media lose its mind during this period has shown me that the G7 nations aren’t anywhere close to taking the same measures. Largess from the governments will continue. Fiscal dominance appears to be the only way out. What remains to be seen is whether this Chinese policy of aggressive, systemwide deleveraging will, ultimately, prove successful. There is pain throughout. Small and medium sized businesses are closing at an accelerated rate while household sentiment remains at very low levels. Will China be able to power through and get to the other side? That is the question. In fact, that is the only question that matters. 2025 could be highly consequential.

China Morning Missive As a strategy, this just won’t work. Then again, the targeting of both Tencent and CATL is just more of the same approach to “containing” China which the Biden administration has followed for years. Am also not entirely certain how Tencent, a gaming and social media platform (WeChat) is working with the Chinese military in a way that harms American interests. Maybe it’s along the lines of how FaceBook and the old Twitter (plus Google and Apple) aligned with various Washington agencies over the past decade. Then there’s CATL. The company dominates the battery market for all electric vehicles. Suspect that the move to restrict the company in the United States is more about regulatory capture than anything else. If you can’t compete, then simply block your competitor from accessing your market. The same tactic was used to ban drones from DJI for the expressed, albeit unstated, aim of assisting Skydio. America needs to do better. Putting up barriers in the name of “national security” is nothing but weak and reflects – at least to me – some very late state Empire antics. https://www.reuters.com/world/us-adds-tencent-catl-list-chinese-firms-allegedly-aiding-beijings-military-2025-01-06/