The global logistics infrastructure battle will determine which e-commerce business models will succeed in the next decade. For consumers, this means a continued evolution toward faster, more transparent delivery systems, but with the growing pains of service consistency and environmental impact.

China's logistics ecosystem has become a competitive advantage in global e-commerce because a number of related players are exporting their expertise to markets elsewhere. One of them, J&T Express, just released its earnings last week, and it’s profitable for the first time, with an adjusted net profit of USD 200 million in 2024. The earnings have some good nuggets, so I am taking the opportunity to write about the logistics space.

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J&T Express in a nutshell

I have critiqued companies attempting to shed or redefine their Chinese identity in global markets. J&T Express offers an interesting counterexample because it was born in Southeast Asia and made its way back to China.

J&T founder Jet Lee previously helped Chinese phone maker OPPO enter Indonesia. In 2015, Lee left OPPO to start J&T Express. The timing was not accidental—it coincided with the rise of Shopee and Lazada. E-commerce and cross-border commerce and the underlying infrastructure were being built. J&T’s pricing strategy made it a sought-after choice for e-commerce platforms, and it was able to collaborate with Shopee, Salla, Noon, and Amazon from early on. Parcel volume meant J&T could expand swiftly across Southeast Asia—Vietnam, Malaysia, the Philippines, Thailand, Cambodia, and Singapore.

In 2020, J&T entered China, a market already dominated by established players. The timing was again impeccable because it was a time of a reshuffle in e-commerce platform power dynamics. In 2019, China's National Postal Administration data showed that non-Taobao-affiliated e-commerce orders surpassed 50% for the first time. Platforms like PDD, Douyin, and Kuaishou were becoming serious contenders. J&T was a factor in PDD's rapid rise, subsidizing shipping costs for local Pinduoduo merchants in Yiwu, leading to delivery prices as low as RMB 1 ($0.15) for both large and small parcels.

By 2022, the company had expanded to Saudi Arabia, the UAE, Mexico, Brazil, and Egypt. Fast forward to today, J&T achieved full-year profit for the first time in 2024; its China parcel volume growth outpaced the industry while maintaining its number one position in SEA.

Two key takeaways: increased parcel volumes and hard-earned profitability. From the earnings report, it's clear several trends are reshaping the consumer experience,

￮ Local Adaptation: Successful logistics providers must balance global efficiency with local advantages, including payment methods, cultural norms, and geographical challenges.

￮ Rising Expectations: As e-commerce penetration increases (e.g., 22% in Southeast Asia in 2024), consumers demand more reliable, transparent, and faster delivery services.

￮ Social Commerce Integration: The rapid growth of social e-commerce (45.8% of the total e-commerce retail market in SEA) creates new logistics requirements focused on impulse purchases and influencer-driven consumption patterns.

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China Domestic Logistics: The Scale Advantage

Elon Musk recently proposed privatizing the US postal service, and maybe he should look to China's logistics sector for inspiration. Why? The numbers tell the story.

Chinese logistics networks achieve remarkable efficiencies through unprecedented package density, parcel volume, and a market-oriented approach. J&T is not even the biggest player in China, and its parcel volume is close to 20 billion, an increase of ~30% YoY. That's the scale of China. To put it in perspective, the US shipped 21.7 billion parcels in 2023, USPS handled 6.6 billion parcels, and Amazon Logistics processed 5.9 billion.

Growth in parcel volume can improve the utilization efficiency of key infrastructure, such as sorting centers, outlets, and vehicle deployment. This supports the scale effect across China's delivery networks and further reduces the cost per parcel. When package density reaches critical thresholds, previously uneconomical delivery routes suddenly become viable. The fierce competition in the domestic Chinese market, with leading players like SF Express, ZTO, and YTO, has driven improvements in routing efficiency and warehouse automation, though often at the expense of working conditions and service quality in some market segments.

Exporting Expertise

The Chinese logistics playbook is being deployed in Southeast Asia, Latin America, Africa, and the Middle East. It’s not just increasing geographic footprint—it's exporting operational methodologies and systems perfected in China's unique environment.

We are seeing that recurring theme, don't we? TikTok's algorithm was built on top of Douyin's trial and error in China and exported to the US market; Temu's low-cost strategy and e-commerce gamification take a page from its parent PDD's humble beginnings…the list goes on.

Taking the U.S. and Southeast Asia for example, the existing legacy logistics systems struggle with inefficiencies:

￮ In the U.S., postal services operate under rigid, administrative routing—packages follow fixed paths rather than real-time demand

￮ SEA's logistics landscape is fragmented, with underdeveloped infrastructure and a patchwork of small regional providers

￮ Both markets lack centralized optimization, leading to higher costs and slower deliveries

SEA's diverse geography—spanning islands, dense urban centers, and rural areas—makes traditional centralized routing inefficient. It takes deep pockets and commitment to invest in regional fulfillment hubs and flexible last-mile networks tailored to each country's terrain. The dominance of cash-on-delivery (COD), which slows fulfillment and increases risks, also needs to be optimized through partnerships with fintech providers for smoother transactions.

Companies are overcoming these inefficiencies by prioritizing market-responsive logistics, where routes and delivery schedules are determined by real-time demand rather than administrative pre-set schedules. Unlike Western logistics firms, which focus on standardized services with clear geographic boundaries, companies in China continue to expand their scope, adding fulfillment centers, cross-border shipping, and last-mile innovations to create a virtuous cycle of efficiency and scale. Case in point: J&T's cost per parcel in China decreased by around 12% to US$0.30.

Even Cheaper Shipping Costs

When consumers marvel at a $5 dress on Shein or a $3 gadget on Temu and get free shipping, they're benefiting from decades of optimization in cross-border logistics that have systematically reduced shipping costs. That $2 phone case you ordered arrived through a complex ecosystem designed specifically for ultra-low-cost items.

When a $9 shirt arrives from China in the EU in under two weeks, it reflects both shipping speed and cross-border integration. As early as 2021, Cainiao invested 100M Euros in building a smart logistics hub in Belgium. Logistics providers have built systems that aim to minimize customs delays through pre-clearance, electronic documentation, and strategic routing through optimized ports of entry. It's also about building these logistical "bridges" and owning the entire flow.

In Southeast Asia, e-commerce retail transaction value increased by 25.7% year-on-year in 2024, reaching US$238.25 billion, with e-commerce penetration reaching 22.0%.

For shoppers, this transformation is tangible. That next-day delivery option that was once the premium is becoming standard. The ability to track your package in real-time—once a luxury—is now expected.

J&T noted in earnings:

"high cost-effective express delivery service can effectively help e-commerce companies and sellers stand out in fierce competition."

This transition puts logistics at the center of brand differentiation. The back-end has become the front-end. Where consumers once focused primarily on product selection and price, they now increasingly evaluate brands on delivery speed, tracking transparency, and ease of returns.

Beyond Business Strategy: Regionalized Trade

Global trade is evolving in response to geopolitical tensions, supply chain vulnerabilities, and the emergence of regional economic blocs. As trade patterns increasingly fragment into regional networks rather than purely global ones, companies like J&T are positioning themselves as critical connective tissue between these regional spheres.

Express logistics is a direct indicator of regional economic vitality, with parcel delivery demand rising in lockstep with economic growth and prosperity. In this context, J&T represents a new class of companies that must adopt—where regional expertise and cross-cultural operational knowledge become paramount competitive advantages. Their progress signals that future winners in global commerce will likely be those who can bridge regions rather than simply operate across them.

The construction of logistics infrastructure creates opportunities and challenges for global retail. J&T’s earnings report indicated that the demand for express delivery in SEA continues to expand, with total parcel volume reaching 15.98 billion parcels in 2024, a 25.2% year-on-year increase.

However, this rapid growth comes with significant challenges:

Service Quality Growing Pains: Despite technological advances, many cross-border logistics operations struggle with customer service issues, mishandled deliveries, and tracking inconsistencies. Relying on complex networks of contractors and subcontractors in the last-mile delivery often results in variable service quality that frustrates consumers.

Regulatory Hurdles: As these networks expand globally, they face increasing scrutiny over labor practices, environmental impact, and tax compliance.

“With the gradual maturity of the express delivery industry... e-commerce platforms, merchants, and consumers have higher requirements for timeliness and service experience,” noted J&T. Meeting these expectations remains difficult for many providers.

So, what’s next?

The global logistics infrastructure battle is more than just a business story—it's reshaping how consumers experience e-commerce worldwide. The companies succeeding in this space are those that can bridge Chinese operational efficiency with local market adaptability.

The winners will be those who can deliver not just packages but trust through reliable performance.

In a fragmenting global economy, these logistics bridge-builders may ultimately determine which e-commerce models thrive in the years ahead. The invisible infrastructure behind our online purchases might just prove more consequential than the platforms themselves.

Baidu, Tencent, and Alibaba are integrating DeepSeek's AI models into their core products and finding new partnerships to build AI moats. The shift isn't just a technical decision. It is a reimagining of how China's tech ecosystem operates.The bigger story is about how a silent innovator is compelling China's most powerful tech companies to rethink their playbooks.

China Tech Incumbents’ Dilemma 

For years, China’s tech behemoths followed a tried-and-tested formula: develop proprietary technology, maintain tightly controlled ecosystems, buy out emerging competitors before they became threats, and monetize relentlessly. This model worked well in the mobile internet era. But AI is rewriting the rules, and the incumbents are now scrambling to respond.

No company has had to eat its words faster than Baidu, once the loudest champion of closed-source AI. Despite the growing trend towards open-source, Li has consistently defended the closed-source model as commercially viable, stating that open-source models are inefficient and not cost effective. 

At the most recent Dubai World Government Summit, Baidu changed its tone. “We see innovation everywhere, and we must adapt to this rapidly changing innovation,” said Robin Li. On the same day as Li’s comments, Baidu announced the integration of DeepSeek’s R1 model into its WenxiaoYan app (formerly Wenxin Yiyan), and app will be made free for users starting April 1. 

Tencent, traditionally focused on social networking and gaming, has integrated DeepSeek into WeChat search. Even platforms like Tencent's with massive user bases must find help elsewhere if they can't innovate. The quick move on Wechat’s side marks a departure from its typically cautious approach to feature upgrades. It also reflects the broader industry trend of leveraging AI to enhance consumer-facing products and capture market share. Notably, gaming was not part of the DeepSeek integration. For now, Tencent is keeping its cash cow—gaming—close to its chest. Following the DeepSeek news, Tencent's shares have risen to their highest point since 2021, suggesting that investors view this as a strategic necessity and the quick move on it is a positive development, not a lack of internal capability.

Alibaba, meanwhile, is also back in the picture–if it ever left—and reasserting its position in China's AI landscape. The sequence is telling: First, the company secured the CCTV Spring Festival Gala sponsorship—a symbol of its renewed alignment with state priorities and the end of the regulatory crackdown era.

So far, Alibaba is the only one from the above-list not working with DeepSeek. Instead of a partnership, Alibaba is trying to establish its lead position. On February 11th, The Information revealed Apple's choice of Alibaba as its AI partner in China. The scoop, which closely mirrored Alibaba's official narrative, positioned the company as the obvious choice over both DeepSeek (characterized in the article as lacking manpower and experience) and Baidu (whose progress reportedly fell short of Apple's standards).

Two days later, Alibaba’s narrative continued to unfold at the World Government Summit (WGS) in Dubai. Joe Tsai, Alibaba's co-founder and chairman, delivered a fireside chat emphasizing that competing for general AI dominance is about delivering tangible economic impact and productivity. Alizila, Alibaba's official corporate news site, recapped, "Alibaba has positioned itself as a leader in AI and open-source initiatives."

On the same day, Tsai penned an SCMP op-ed that reiterated these points, which aligned with China's official lines. Tsai emphasized AI's role in driving real-world economic impact and the importance of open-source democratization. This messaging, focusing on practical applications over cutting-edge research, echoes the state's vision of AI as a tool for economic growth rather than an elite technical pursuit.

This strategy is working. Alibaba is out of the woods. The company reported better-than-anticipated revenue gains in its two most important divisions: e-commerce and cloud services, which houses its AI endeavors. The recently posted earnings was received well, and Alibaba’s shares gained 8%.

The Silent Challenger

DeepSeek has emerged as a transformative force in China's AI landscape. While China's tech sector has traditionally been dominated by well-resourced incumbents that shape market dynamics, DeepSeek has defied this pattern.

But for how long? Reports suggest that DeepSeek is exploring external funding, and Alibaba and state-affiliated funds have expressed interest. Alongside these investment discussions, DeepSeek and its hedge fund parent, High-Flyer, are weighing whether to transition from a research-first model to one focused on revenue generation and long-term profitability. They are also considering establishing data centers in Southeast Asia to gain access to Nvidia AI chips, a move to navigate U.S. export restrictions.

Founder Liang Wenfeng remains an elusive figure. DeepSeek has become entangled in U.S.-China tensions, being accused of everything from technology theft to being a state asset.

But Liang is no doubt in the big leagues. He was present at the high-profile meeting hosted by President Xi with private-sector tech leaders. International media go out of their way to visit places like Mililing Village in Guangdong, in southern China, to speak with locals who knew Liang. This endless fascination has fueled a steady stream of coverage about the company—a PR dream!

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DeepSeek’s rise suggests that China’s AI future will not be dictated solely by its traditional tech giants. There are others worthy of attention. Instead, success will depend on which companies can adapt to the open-source revolution and fast-moving challengers. 

While the competitive landscape is evolving, certain boundaries persist. When asked to analyze an article about the recent tech leadership symposium, DeepSeek politely suggested a change of subject. 

We all want to know how will RedNote manage content moderation rules and keeping new users engaged. Burning question for Deepseek, did High-Flyer hold short positions in Nvidia? And what did it take to innovate despite all the constraints?

The two companies present an interesting dilemma: if Americans want to use foreign tech platforms that can influence perception, collect lots of data, and become part of daily life and work, what can regulators really do? Will what media say really matter to users?

Both companies are silent and demure at the moment. They don’t have to say anything; both are private companies with no disclosure obligations. They don't have to deal with "China shedding" challenge many of its peers face (ahem, Shein, Temu, TikTok) since they've been clear about their Chinese roots from day one, so the incentive to engage with western media presents more risks than opportunities. Neither seems to have global PR functions to handle all the attention they're getting.

In turn, speculation is rampant, and Deepseek and RedNote have essentially allowed others tell their story.

Media and analysts in both China and the US are racing to figure out what this means for AI competition between the two countries, how will the social media landscape change—just all. the. questions.

To play the devil’s advocate, why should Rednote and Deepseek speak up?

Right now, they’ve got momentum. But can they actually turn it into something tangible—aka $$$, power, influence, users, partnerships, or, ideally, all of the above?

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DeepSeek

The media coverage currently centers around the following themes:

• Market Disruption: DeepSeek's low development cost has triggered investor anxiety, wiping out billions of shareholder value and fueling fears of a "Sputnik moment" for American AI leadership.

• Limitations of U.S. Export Controls: DeepSeek’s accomplishments highlight the ineffectiveness of U.S. export controls in slowing China’s AI progress, and may have helped China to innovate with less. (https://www.brookings.edu/articles/deepseek-shows-the-limits-of-us-export-controls-on-ai-chips/)

• Investment in Innovation: DeepSeek challenges the belief that cutting-edge AI requires massive infrastructure investments, though some challenge this thesis because DeepSeek is built on the backbone of existing AI investments.

• Censorship and Ethical Concerns: DeepSeek's been found censoring politically sensitive topics, raising concerns about the ethical risks of AI systems reinforcing state narratives.

• National Security: last but not least, the good ol’ potential national security risks. DeepSeek has fueled concerns over surveillance and data vulnerabilities.

  DeepSeek’s PR Silence: A Lost Opportunity to Shape the Narrative

  By allowing others—critics, competitors, and policymakers—to define its reputation and set the topics of discussion, Deepseek leaves a void that is quickly filled with speculation, security concerns, and worst-case assumptions.

• A proactive strategy—offering interviews, publishing technical explainers, or providing transparency reports—could firmly contain the conversations on DeepSeek technological breakthroughs, efficiency, team and executives and cost advantages.

  • Right now, Meta is hijacking the narrative—despite being caught off guard and created “war rooms” to reverse engineer DeepSeek’s technology—and rolling out its properly media-trained VP to send a globalist, innovation and open-source first message:

    “Our open source strategy was validated. The more people who have access to the technology needed to move things forward faster, the better.”

• The China-Tech Backlash Effect: the default perception of any major breakthrough from China is often negative—associated with state control, stolen/borrowed technology, and security threats. By not participating in the discourse, DeepSeek has surrendered the opportunity to shape a more nuanced narrative. A well-crafted international PR strategy could focus on its technological achievements, future plans, and clarification of common misconceptions.

  • OpenAI + Microsoft has rolled out Reid Hoffman, former CEO of Linkedin and Microsoft board member, to reinforce the thesis. This week, he appeared on the Pivot podcast, and while his remarks aren’t an official statement from OpenAI, pushing this perspective is a smart move—allowing them to shape the broader narrative while maintaining the safe guise of opinions from an "outside observer."

    Here’s the (unofficial) position on the state of play:

    “there is certainly some parts of the story that’s incorrect, the thing that we are trying to figure out is which parts are incorrect. I would speculate, with some vigor, that [DeepSeek] had some version of access to larger models and helping train it”…I would hazard strongly that there is something like that in the background, and that could have had some kind of access to ChatGPT, certainly some of the data and evidence suggests that in the way [DeepSeek]answers and does certain things…”

    “I think it’s merely certain that it was depended upon the large scale compute, the larger models in some way, the only question is we don’t know in what ways and how.”

• Censorship and national security: DeepSeek’s AI has been criticized for censorship and avoiding politically sensitive topics. If the company continues to avoid engaging with these concerns, it risks being seen as a tool of state control rather than a technological pioneer. A potential solution would be to embrace transparency—publishing clear guidelines on how its model handles sensitive topics, acknowledging areas of improvement, and making commitments to ethical AI practices. Other AI firms, including OpenAI and Anthropic, have navigated similar challenges by releasing research papers, safety reports, and roadmaps for AI alignment.

  • DeepSeek is also a hot topic in China, and as a company from Hangzhou, Zhejiang, the official stance is conveyed through Zhejiang’s state mouthpiece, 浙江宣传. In one sentence: innovation is not done behind closed doors.

Rednote

Now shifting gear to why Rednote should be proactive?

One word: valuation.

Rednote's value has bounced around quite a bit: in November 2021, Rednote raised $500 million, and valued at $20 billion. In 2 years, it was adjusted to $14 billion. In July 2024, valuation increased to $17 billion following new investments from DST and Hongshan.

Fast forward to January 2025, stake sale talks valuing the company to be at least $20 billion.

Looking past their China-shedding investors (specifically, Hillhouse and GGV, which I've penned op-eds about in the Wired China and Tech in Asia), I’d argue that the TikTok ban rush has created enterprise value - the company's worth, at least on paper, grew by $3 billion in just six months, with major backers like Hongshan, Tencent, and Hillhouse wanting to increase stake after the #TikTokrefugee movement.

Maintaining the momentum will create tangible financial value. Having a PR strategy to communicate clearly is one thing, but other factors will also impact Rednote in negative and positive ways.

User retention uncertain

Many new users are TikTok refugees looking for alternatives, but will they stay and how will Rednote commercialize this new demographics? And time is of the essence, because the tide is already turning. Trump's announcement of a 75-day delay in the TikTok ban has brought everyone back to reality. The data tells the story: RedNote has lost over half its daily active US users since the peak of 32.5 million users. Similarweb reports a 54% drop in US daily active users, while Sensor Tower shows a 17% decline in average daily active users between January 20-22 compared to the previous week. The app store rankings reflect this shift too. After briefly claiming the #1 spot in the US free apps category, RedNote has now dropped to #16, trailing behind other Chinese apps like Temu (#7) and ReelShort (#9).

But Rednote has a lot going for it too. It’s cracked the code for social commerce in China and it could do it again in the U.S.

Unlike TikTok, which mostly makes money from ads, RedNote has built a solid foundation in e-commerce and KOC and KOL influencer community that brands like. Rednote also has appeal to luxury brands: where TikTok struggles with high-end brands, Rednote has built trust in luxury, fashion, and beauty for its predominantly female user base. .

As I told Jing Daily, Christian Science Monitor, and Rest of World recently, RedNot is illustrating a shift in global digital culture.

The same goes for Deepseek - when Silicon Valley got curious and insiders started tweeting, everyone rushed to try this new thing.

Ending the post with a Hamilton song that says it best:

Let me tell you what I wish I'd known
When I was young and dreamed of glory
You have no control
Who lives, who dies, who tells your story?

And a plug, happy to tell your stories, guys :) www.waveletnyc.com

I went on Sinica to talk all things Red Note with Kaiser and David—such a fun podcast to record! I also recently recorded another fun podcast episode wih and we talked about crisis communication and TikTok Ban. Listen here.

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Ok, let's break RedNote down from a few angles:

What is RedNote, and why does it matter?

RedNote was last valued at $17B, backed by Alibaba, Tencent, and Silicon Valley VCs like DST and Notable Capital (GGV). But calling it the "Instagram of China" or "Chinese TikTok" misses the mark.

What makes RedNote tick is how it serves different users differently. Like TikTok, it's built around discovery - but not in the same way. As someone who uses RedNote a LOT, I mostly scroll through whatever the algorithm serves me. I trust it'll show me stuff I care about, rather than new content from the creators I follow. TikTok started this way too - letting anyone go viral through great content, not just those with a big following. This keeps people posting because there's always a chance their next post could take off.

RedNote's core strength lies in its community. The trust among users stems from the platform's foundation of educated, urban and international users from major cities—though this has been changing. Even as more men join the platform, its strength is making everyone feel like "we're all in this together." That's actually RedNote's biggest advantage as it goes global.

Who are these #TikTokRefugees?

People who are joining the platform is a self-selective group of people I’d categorize into the following groups:

• Users who equates signing up=active protest against the TikTok ban

• People genuinely curious about what a Chinese app is really like and want to engage

• Opportunists seeing the traffic shift and trying to build a following

• MCN agencies playing the traffic game and pushing their TikTok/Instagram influencers to grab early territory

Cultural exchange and conversations are happening on the app, I observe a lot of collective meme making, finding commonalities as well as exploring differences as well. Comparing living costs and salaries is a hot topic of discussion. Call me an optimist, but digital utopia is happening in the best sense of the word.

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The Cultural Moment We're In

Candid conversations are happening in the RedNote conversations, and it’s the kind of people to people exchanges China has been deliberately fostering in the past year in its official narrative.

And it’s happening organically. The folks going to RedNote aren't your typical TikTok users - they're the ones willing to deal with the hassle of using a new app to be part of this cultural conversation. It's a 2025 black swan that nobody saw coming.

The platform’s vibe is fundamentally different from TikTok’s. RedNote doesn’t even have a translation function yet - even WeChat's international version has that. RedNote faces a delicate balancing act—delivering the Xiaohongshu (小红书) experience to its existing user base while onboarding newcomers without alienating either group. But any sudden surge in users is bound to reshape the platform’s cultural fabric, for better or worse.

RedNote has some big decisions to make:

- Who is this app really for now?

- How do they tailor the user experience?

- Plan to cultivate new users and turn into a commercialization opportunity?

But right now, it’s fascinating is watching the genuine exchange happening in the comments - people comparing living costs, sharing grocery tours and cat photos, gossiping about everything from the Kardashians to Timothée Chalamet (yes, Chinese internet loves Timmy, his Chinese name is sweet tea, 甜茶 <3)

The question now is, will this last?

Maybe. People’s Daily has set the tone: American citizens want normal lives, Chinese businesses want to develop normally, and people from both countries want normal exchanges... This is the will of the people, this is the trend. "美国老百姓要正常生活，中国企业要正常发展，中美两国民众要正常交流……这就是人心，这就是大势。"

But as CNN points out, some new users are encountering Chinese-style censorship for the first time. RedNote is scambling to hire English-speaking content moderators. That is a hard job and ability to speak English alone won’t cut it. The moderators will need to have the breadth and depth of understanding of meme culture, communication norms, and cross-cultural sensibilities.

WIRED reported that “ Social media platforms in China are legally required to remove a wide range of content, including nudity and graphic violence, but especially information that the government deems politically sensitive. Platforms like Xiaohongshu rely on large teams of contractors managed by outsourcing companies to do both routine enforcement as well as respond to emergency situations.”

And “emergencies” are likely to happen. China Digital Times previously published a 2020 internal instruction manual for Xiaohongshu content moderators that explained how they should respond to “sudden incidents.”

RedNote's always had strong content moderation to comply with Chinese rules, but now they need to figure out how to handle this with flood of new users and geopolitics hanging over its head.

An opportunity or crisis for RedNote?

What's particularly interesting about these "TikTok refugees" is the split between creators/active participants and passive viewers. While RedNote hasn't released official data, I’m seeing a surprisingly high number of these new users actually engaging on RedNote- commenting, posting, and joining chatrooms. For any social media platform, this kind of active participation is gold, especially when it opens up an entirely new demographic. The trend is already spilling beyond the US into the EU and other regions, pushing RedNote to #1 in download rankings globally.

I’ll be following RedNote’s content audit process and its approach to shadow banning. Among its peers, RedNote has been the most particular in flagging sensitive terms, topics, and even marketing language/mention of competitors. Its content moderation criteria are also fluid, and constantly changing.

For reference, Xiaohongshu’s review process follows a hybrid model of automated screening and human review. Posts are initially filtered by AI, going live immediately if no violations are detected. If flagged, they undergo manual moderation, which can take up to 48 hours. Users rely on community guidelines and third-party tools like ZeroGram Checker (零克查词) to pre-screen content and avoid compliance issues.

Beyond moderation, Xiaohongshu’s traffic distribution operates on a tiered recommendation system. Posts gain exposure based on engagement (likes, saves, comments). Factors like titles, keywords, and compliance play a key role in whether a post gets indexed. Any sudden shifts in these mechanisms—whether in content audits or algorithmic exposure—can dramatically alter a platform’s user experience.

RedNote’s next challenge? Navigating this fine line between control and organic growth without suffocating the very culture it’s trying to cultivate. The new user base will create commercialization opportunities for the international business development team.

(Here’s a piece I wrote on on RedNote’s social commerce experience)

The past couple of days, scrolling through RedNote has been fascinating—watching the emergence of new subcultures and the real-time co-creation of a digital third space. Maybe in 2025, finding common ground really does start with sharing memes—and I’m all in!

Lastly, follow me on RedNote :D

Even with this momentum, the path ahead won’t be easy. It comes down to three big challenges:

1. Replicating China’s livestream model will take time. China’s livestream commerce went through multiple iterations, and even at “China speed.” It took a few years to build an industry of supporting functions and cultivate a streamer base to see the full results. Creating a complete ecosystem—beyond just platform mandates—requires developing consumer habits that don’t happen overnight. TikTok has started teaching sellers how to use live video streams to connect with American consumers, offering coaching and studio spaces to merchants in cities such as Los Angeles to make it easier to go live. But as Yoda would say: patience, it will take.

2. Livestream commerce is NOT QVC. As late as this May, major outlets like the NYT was still describing the phenomenon of TikTok Live selling as QVC for the digital generation. In 2021, every major U.S. tech company jumped on board and tried to QVC their way to the top, and it did not work. To put it in perspective: in that same year, Li Jiaqi, China’s top livestreamer, generated $1.7 billion in sales during a 12-hour Singles' Day marathon.

3. U.S. consumers just aren’t there yet. Livestream shopping remains unfamiliar territory, and platforms are only now starting to cultivate livestream-driven buying habits. While livestream commerce took off in China back in 2017, it’s taken years—and a global pandemic—to push the medium toward becoming the norm.

TikTok is trying to replicate what works in China, but it may need to either reinvent the wheel for U.S. consumers or wait patiently (and spend big) for results.

My China live-streaming shopping Habit

I’m a heavy Xiaohongshu user (a habit I’m trying to break!). When I was in China over the summer, I was a heavy shopper on it too. I’d open the app just for content, and somehow find myself buying things along the way. I’d scroll and click into a post, and if the account happens to be live, I just landed in a stream, and before I knew it, I was deep in the livestream rabbit hole.

From baroque pearl necklaces (where I could select the exact pearl I saw on screen through chatting with the stream host, and she’d give excellent advice) to snacks that looked irresistible thanks to a mukbang streamer, to Jingdezhen pottery made by local artisans explaining their handcrafted mugs, the experience was immersive (and expensive).

Livestreams in China Are About More Than Just Selling

I’d love to say my summer shopping spree on Xiaohongshu was all for research. But the truth is, I genuinely enjoyed it. Livestreaming in China goes far beyond just hawking products. The early flash-sale era —think Li Jiaqi and where TikTok commerce in the US is in at the moment—has evolved into something much more community-centered. It’s now about building a brand’s identity and creating emotional connections with consumers.

Streamers are not just pushing products—they’re building relationships. It’s like tuning in to catch up with a friend. These streams create a sense of belonging, where followers feel like they’re part of a community. Whenever I checked into Xiaohongshu or Taobao between dinner and bedtime, my favorite streamers were already chatting and selling away. It’s not just commerce—it’s companionship.

Successful streamers broadcast on set schedules, often for long stretches of time—sometimes as much as six hours or more daily, and often late into the night. Production quality of these streams vary—some streams run on a simple two-phone setup, while others feature professional studios with curated lighting and background music. There’s no limit to what you’ll find.

“Preheat”

The Information highlighted the concept of “preheating” (预热), an important tactic in livestream commerce. Influencers build anticipation for their streams by releasing teaser videos and setting reminders for product drops. Many also run private fan groups—or 私域流量池 private traffic—on Xiaohongshu or WeChat. These groups offer early access to product drops, foster a sense of community, and turn casual viewers into loyal fans, increasing repeat purchases.

What keeps people coming back is the thrill of the unexpected—score exclusive products, become part of the blind box card subculture (see below video selling little pony cards)—and the sense that if you scroll long enough, you’ll eventually find something special.

Payment, Returns and Repeat

Chinese platforms have perfected the art of making impulse buying easy. I could set a RMB threshold, and for any purchase under that amount, there’s no need for confirmation—the sale goes through with a single click. If I changed my mind, returning items was just as easy, with couriers coming to my doorstep to pick them up. I don’t even have to pack them up, I just give the item to the courier. The whole process feels designed to let you buy in the moment, without friction or second thoughts.

“Entertain-merce”

The magic of these streams lies in how they blend entertainment and commerce. And the variety was wild—everything from a mommy-and-son comedy duo selling English learning classes, to vocal coaches hosting live Q&A sessions for their online courses, to actresses modeling crystals bracelets that bring good fortune. The most popular streamers don’t just sell products—they sell a lifestyle. Their fans aren’t just buying items; they’re buying into the influencer’s world, a little like Oprah’s “Favorite Things,” but with weekly or even daily drops.

…and back to TikTok

TikTok’s push to bring livestream shopping to the U.S. will require more than just teaching sellers how to go live, platform traffic boost and investing in go- live infrastructure. Success depends on creating an experience that resonates with American consumers—one that goes beyond product showcases to offer entertainment, emotional engagement, and a sense of community.

It’s not impossible, but it won’t be easy. TikTok has to convince American consumers to adopt new behaviors and embrace a different way of shopping. Without that cultural shift, livestream shopping in the U.S. may remain a niche feature rather than the game-changer it is in China.

Despite a discount, it is considered the largest IPO since last October, and it marked a rare occurrence of Chinese owners in the U.S. capital markets following Beijing's tech crackdown in late 2020.

I had the pleasure of looking at the Amer IPO with from Following the Yuan. You can read the full piece below.

Following the yuan

Unpacking Amer Sports IPO 📦 | Calling the Shots x Following the yuan

Today, Anta-owned sporting goods company Amer Sports (NYSE: AS) is officially listed in the U.S. on an initial public offering of around US$1.37 billion. Despite a discount, it is considered the largest IPO since last October, and it marked a rare occurrence of Chinese owners in the U.S. capital markets following Beijing's tech crackdown in late 2020…

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2 years ago · 3 likes · Ivy Yang and Yaling Jiang

Why IPO now at a discount? Two words: China and Arc'teryx. 

The factors driving Amer Sports' IPO are its rapidly growing revenue contribution from the Greater China region—particularly from the Arc'teryx brand. In 2022, the Greater China region was 14.8% of Amer's total income, up from 8.3% in 2020, to US$523.8 million.

In the first three quarters of 2023, China makes up around 20% of Amer's total income. Notably, Arc'teryx's revenue from China was a significant contributor and represents nearly 80% of Amer's total revenue from Greater China and more than 40% of Arc'teryx's global revenue.

Since Amer Sports was acquired by Anta in 2019, the potential for an IPO of Amer Sports under Anta has been much anticipated. Despite operating at a loss, Amer is crucial to Anta's global strategy.

A primer of Amer Sports and Anta

Amer Sports, a Finnish company, came under the ownership of a consortium five years ago. That group of investors includes Chinese tech giant Tencent, Hong Kong-based private equity firm FountainVest Partners, and Anamered Investments Inc., which is linked to Lululemon founder Chip Wilson. There are other members of the consortium, that for certain reasons, prefer to stay behind the curtain.

Known as a homegrown footwear giant founded in 1991, Anta’s global ambitions are evident in its robust M&A activities since 2009. It started with the acquisition of South Korean athleisure brand Fila and its operation rights in China. This move marked the beginning of Anta's journey to reshape its brand portfolio and global presence.

Its M&A spree continued, and in 2015, Anta acquired the British sports leisure brand Sprandi. In 2016, Anta acquired exclusive rights for the operation, product design, sales, and distribution of Japanese ski wear Descente in China. 2017 Anta continued its expansion by acquiring Korean outdoor brand Kolon Sport. The M&A activities culminated in the $5.2B deal in 2019 to acquire Amer Sports. Anta is now Amer's largest shareholder, holding a 52.7% stake.

Amer's IPO, why now? What discount?

Yaling: Now is a good time, because brand visibility and sales volume in China are still at high levels for Amer’s core brand Arc'teryx. But investors don't seem to think it’s enough to outweigh the China-related uncertainties, which seems odd to me.

In early January, Arc'teryx’s “Year of the Dragon Limited Edition” jacket was so popular that the price was inflated from 8,200 yuan to around 12,000 yuan on second-hand trading platforms. While it was common before Covid to see the prices of sneakers being hyped up, is rare to hear news like this in an economic downturn, which reflect a certain audience’s buying power.

Truth be told, some consumers are realizing that they are buying performance clothing simply to follow the crowd and it ends up as gorpcore-style fashion items. I think that’s ok too, like how athleisure has led mainstream fashion since over 10 years ago, gorpcore is not going anywhere.

Another truth be told, the mounting debt situation is worrying. Its IPO prospectus shows that with cash and cash equivalents of ~US$284 million, it’s carrying a whopping US$8.1 billion debt of all sorts.

It’s reasonable if the IPO was discounted — from the marketed US$16~18/share to US$13/share — because of the above reasons. However, investors seem to be more fazed by ‘over reliance on China’. I don’t understand.

Ivy: Amer is currently not consolidated into Anta's balance sheet. Therefore, the total value of Amer's portfolio of brands is not fully reflected in Anta's financial statements.

There are good reasons why it's not. Anta can maintain financial flexibility and avoid direct assumption of Amer's debt, and manage Amer as a separate entity based on its specific market needs. This setup also shields Anta's core financial structure from any potential risks associated with Amer. All of it means the Amer IPO can unlock value for its largest shareholder Anta. 

3 reasons why investors should be careful – Ivy  

1. Governance Conflict of Interests

   The integration of Anta and Amer's executive teams poses a potential governance issue. James Zheng, who previously held a key executive role at Anta, now leads Amer Sports as its board Executive Director and CEO. In its F-1 filing, Amer Sports disclosed that its directors will continue their roles as officers of Anta Sports post-offering. Furthermore, as long as Anta owns at least 30% of Amer's ordinary shares, it can nominate five candidates for Amer's board, and in turn, can call the shots at Amer. 

2. Scrutiny on Supply Chain and Sourcing

   About one-third of Amer Sports' production value comes from China, where overlaps in facilities and labor practices create issues. Both Anta and Amer have faced criticism for using Xinjiang cotton. Amer's dependence on Anta’s third-party manufacturers and suppliers complicates the process for verification of component origins. This connection to Anta's supply chain could potentially damage the reputation and premium brand positioning of Amer and its portfolio brands. In the best case, adhering to Amer’s own standards will lead to a higher cost of goods sold, adversely impacting  Amer's bottom line.

3. Competing Priorities Between Anta and Amer's Reputation In Light of the Xinjiang Cotton Issue

   There will be instances where Anta and Amer must make tough decisions, sometimes in contradiction. During the 2021 Xinjiang Cotton Crisis, Anta was among the first to openly support Xinjiang Cotton and withdrew from the Better Cotton Initiative—a Geneva-based non-profit that promotes higher standards in cotton farming and prohibits Xinjiang cotton. Meanwhile, Amer remains a BCI member, committed to its policies that align with international human rights and ethical standards. Amer's hesitation to align its values and policies with its controlling shareholder, Anta, illustrates the difficulties Chinese companies encounter in managing their acquisitions. Both parent and subsidiary must navigate their distinct communication strategies and brand reputations to cater to their target consumer groups, especially Amer, which must be careful not to alienate 80% of its revenue source from outside China.

3 reasons why investors should not worry so much – Yaling

1. Amer Sports Is Safe(r) From Scrutinisation 

Amer’s IPO comes at a time when Shein’s IPO faces delays in the SEC process. However, I don’t think Anta will face as much scrutiny as the likes of e-commerce sites Shein and Temu, and social platform TikTok. 

According to an issue brief by the United States–China Economic and Security Review Commission, last April, “data risks…exploitation of trade loopholes; concerns about production processes, sourcing relationships, product safety, and use of forced labor; and violations of intellectual property rights” should be the top concerns for the U.S government. Amer seems to have little to worry about on these fronts. 

2. Amer, Or At Least Arc’teryx, Has Generated Real Buzz

There have been cases (pre China’s tech crackdown) where Chinese companies made up narratives that did not reflect the true sentiments, like how the now-flopped luxury e-tailer Secoo (Nasdaq: SECO) said it was a market leader in China, and people bought it.

Now, this one company that’s been seen by Chinese consumers as the bright spot in this economic slowdown, is trying its chances. It deserves to be taken seriously although being Chinese-owned.

3. Anta’s Bet On Outdoor Sports Is Ahead Of The Curve, And The Sector Has Not Stopped Growing

It is not the first Chinese fashion company that owned foreign brands, but by far, it’s the most successful one in terms of reputation. Anta has successfully aligned its strategy with Beijing’s support for sports and fitness, as well as the interests of a growing number of consumers who’s keen to have an active lifestyle outdoors.  

Similar to my views on pets, I believe that sports could be a sector that is relatively safe from crackdown and economic impacts.

With the 12th and 13th Five-Year Plans, which is a series of social and economic development initiatives issued by the central government every 5 years, the market added 1 trillion yuan of value to 2.9 trillion yuan in 2019 compared with 2016. The cabinet-level State Council now has a new target: By 2025, China’s sports market is to reach 5 trillion yuan, according to National Fitness Plan (2021-2025) that was issued in July 2021.

Last words from Ivy and Yaling: The Dream of Amer's IPO Amer Sports not only benefits from Anta's support but also carries the potential to elevate Anta's global stature. The acquisition of Amer was a strategic move for Anta, bringing renowned global brands under its umbrella and strengthening its international presence.

However, while Anta can boost these brands in China, can Amer reciprocate this success on a global scale for Anta? 🔚

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What do we do 👩‍💻:

Yaling Jiang, the founder of research and strategy consultancy ApertureChina. She specializes in research, insights and strategies for overseas brands and financial institutions on the Chinese consumer market.  

Yaling’s LinkedIn | Twitter

Ivy Yang, the founder of Wavelet Strategy, specializes in thought leadership and strategic PR consulting for Chinese companies in the global marketplace.

Ivy’s LinkedIn | Twitter | Website

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This week, I might just have peaked in my PR career — my foam rollers made it in the WSJ's front page A-hed Column.

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The media inquiry from WSJ’s Katie Deighton was straightforward:

Why are the likes of Temu, Shein, Amazon etc. selling tiny stuff and badly labeling it as such?

I have several theories, and the growing media interest suggests rising reputational risks for Temu, which could notably impact its international market expansion.

Before going into detail about de minimis value and duty taxes, I want to introduce a new framework to look at cross-border e-commerce platforms in their feverish sprint to capture market share: parcel economics. It is the arbitrage of profit margins, shipping efficiency, and the expansion of the platform growth.

At the heart of the issue is margin.

The race to the bottom on prices is the basis for the relationship between the platform and sellers. Shipping mini versions are a result of the struggle for margin. In this reality of low-priced, thin-margin platforms, sellers are forced to incorporate risk and potential reward into their calculations; thus, the more they can sell, the better their chances of recovering their investment and turning a profit.

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Stuffing more units into one parcel means sellers can avoid paying some duty taxes if their parcels' presumed value is below the de minimis threshold. Consequently, opting to fill shipments with smaller, lighter items instead of their full-sized versions can lead to better sales margins when considering the units sold and shipping costs.

This is probably why, in December last year, Temu issued a new platform rule for sellers called “Product weight and volume filling rules” 商品重量及体积填写规则. Per these guidelines, sellers face financial penalties for any discrepancies in reported product weight or volume. The onus is on the sellers to ensure accuracy, with the penalty formula being as precise as it is punitive — a 10 yuan fine for every 50g of discrepancy per order. This is especially significant considering Temu’s low price point.

Temu and its suppliers: a symbiotic and contentious marriage

The platform leverages its pricing power to its advantage, pressuring suppliers into agreeing to remarkably low prices — a dynamic I have previously analyzed.

Meanwhile, suppliers have counter strategies to maintain their margins, often treading in ambiguous territory. With great power comes great responsibility—as cross-border e-commerce companies adopt a "full-service model," they will increasingly shoulder the responsibility of addressing consumer dissatisfaction and the potential legal and compliance issues that emerge from avoiding duties and offering substandard products.

I grew up in the '90s, and "Honey, I Shrunk the Kids" was an iconic film. I can't help but draw parallels between the movie's underlying message and Temu's circumstances. The film, in its essence, is a metaphor for the trials of growing up and finding one’s place in the world. Isn’t Temu on a “hero’s journey” to find its own equilibrium and platform-market fit?

The reputation risks of de minimis and mini things

Temu’s contribution to owner PPD’s total sales was likely less than 1% in Q2, according to Bloomberg analysts cited by DigitalCommerce360. But conflicts over truth in advertising and the de minimis value—already a contentious political issue—are likely to affect PDD more significantly than any potential revenue gains. There are heated discussions about the value of de minis value, a byproduct of opening up and facilitating global trade. We live in a very different geopolitical climate now.

The de minimis rule allows imports with a value of less than $800 to enter the country without being subject to duties as long as they are packaged and shipped to individual consumers. The Select Committee on the Chinese Communist Party said in a report that Temu and Shein, the two companies alone, are likely responsible for more than 30% of all de minimis shipments entering the U.S. each day. There is a political debate over proposals to lower this value threshold or restrict certain countries (read: China) from this duty-free privilege. It is expected to be a key issue of substantial trade dispute in Congress this session.

In addition to issues with duty taxes, intellectual property violations are also issues Temu can no longer dodge. Temu sellers are allegedly stealing text and pictures from Amazon, and Temu’s parent company PDD has already made it on the Notorious Market List, an annual report published by the United States Trade Representative that identifies online and physical marketplaces known for engaging in, facilitating, or turning a blind eye to counterfeit and pirated goods.

As a subsidiary of , a U.S.-listed company, Temu can expect its business practices to attract closer examination from shareholders, regulatory authorities, and the press as it becomes a bigger revenue contributor to PDD. With this backdrop, the compliance criteria for its U.S. and European-based entities will likely become more stringent, and this is just the beginning.

On a brighter note…

Back to how my foam rollers made it to WSJ. The A-hed column began in 1941 and has always been the business publication’s “funny page.” It’s about “lighten up. Relax. Don't take everything so seriously. Read a few A-heds.”

So, towards the end of chatting with Katie—most of which is the basis for this post—I shared a personal, silly anecdote. I, too, fell for Temu’s illusions and bought a foam roller so small it became a toy for my 2-year-old. It was an amusing twist that capped off the A-hed story perfectly.

My debut op-ed for Financial Times Chinese last year unpacked the then newly passed CHIPS and Science Act. I focused on President Biden's claim that the Act would bolster national security by reducing dependence on foreign semiconductors and redirecting taxpayer investments into core technology areas. The CHIPS and Science Act is a significant move towards re-industrialization, reflecting a consensus among US policymakers and industry leaders to upgrade America’s existing infrastructure technology and to work with allies to make America self-sufficient again.

The passing of the CHIPS Act marked the beginning of TSMC's ascent to become a household name.

Fast forward a year, and TSMC is synonymous with America’s stronghold as a technological superpower. TSMC’s commitment to building a $40bn fab in Arizona is a token of assurance. It’s going to hire and train more than 1/10 of the promised jobs to be created under the CHIPS Act.

But it’s not putting all its eggs in the American basket, and TSMC is pandering to keep its messaging relevant for both the U.S. and global audiences and treading the fine line of supporting an “America-first” narrative.

Why do we care about TSMC now?

TSMC's fabs are so crucial that many see control over them as essential for national survival. Huawei's recent release of the Mate 60, featuring scaled production of the 7nm chip—a technological edge long held by TSMC—demonstrates that replicating TSMC's advanced manufacturing is challenging but not impossible, especially with ample determination and less concern for labor and cost.

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Even if the chip powering Mate 60 proves to be manufactured by a Chinese homegrown fab, it is unlikely for any company to disrupt TSMC's market leadership in advanced technology nodes. On the other hand, despite the export controls in place, these chip advancements suggest that emulating TSMC's manufacturing expertise on a smaller scale is not out of the question.

In addition to the Huawei news, TSMC has been on a media blitz to reassure its commitment to America, in part as a response to news of revenue-altering delays at the Arizona fab, systemic talent shortage, and subsidy negotiation challenges.

Morris Chang, founder of TSMC and godfather of modern semiconductors, was rolled out for an interview with NYT to make it clear that “he identifies as American” and went as far as to say “China can’t really do anything if we want to choke them.”

He walked back a bit later in the article:

Like many, he worries about a potential conflict between the United States and China over Taiwan, though he believes the chance of such a confrontation is low.

“The chance of China invading Taiwan, amphibious warfare and all that stuff, I think that’s a very, very low probability,” he said. “A blockade of some kind, I think I still put it as low probability, but it’s still a chance and I want to avoid that.”

Mr. Chang said he was not worried about U.S. policies that have cut off Chinese firms from access to cutting-edge semiconductor technology.

“I think it’s still OK,” he said, though he noted U.S. companies would lose business and China would find ways to fight back.

It’s mind-boggling to me that the complex landscape of global diplomacy and advanced technological partnerships hinges on the efforts of this nonagenarian and another centenarian.

TSMC's deeply interdependent relationship with the US underscores the company's vested interest in maintaining a positive image. Apple constitutes more than 23% of TSMC’s revenue and is expected to be a top customer for the new US fab.

However, the disparity between optimistic projections and the unfolding reality is hard to ignore. TSMC initiated construction on its Fab 21 phase 1 in April 2021, with the goal of chip production by early 2024. The company now plans to start production in 2025 due to equipment delays and talent shortages.

Meanwhile, in Japan, construction on TSMC’s first Japan fab will finish as planned this month, and the total employee count will reach 1700 people. The scale is around the same as TSMC’s one of the planned two factories in Arizona.

If Japan could successfully complete its semiconductor facility on schedule, what's holding back the U.S. from doing the same with its Arizona fab? Morris Chang had already foreseen these challenges last year.

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The Saga of TSMC’s Arizona Fab

When I wrote "TSMC's 'American Dream' and Political Maneuvering" following last year's Arizona "tool-in" ceremony, Morris Chang's stance offered a striking counterpoint to TSMC's current, much more optimistic perspective. His words and tone are cautious, foreshadowing the challenges ahead in reviving America's semiconductor industry—a prediction that is gradually becoming reality.

Yet, despite its significance, both American and Western media largely overlooked Chang's speech. Notably, Fox News streamed the entire event, even dedicating 17 minutes to President Biden's arrival and handshakes, but conspicuously omitted Morris Chang's entire remark.

(For complete transcription and analysis, head over to Kevin Xu’s excellent substack.)

Interconnected

Globalization is Dead and No One is Listening

The “tool-in” ceremony of TSMC’s new fab in Arizona drew a lot of attention last week. CEOs from Apple, Nvidia, and AMD attended and spoke. President Biden, along with a coterie of cabinet officials, congresspeople, and local Arizona politicians, came to rally, celebrate, and claim (as we will see, a premature) victory…

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3 years ago · 55 likes · 12 comments · Kevin Xu

It’s perfectly understandable why the White House and TSMC communications team might not have wanted the speech to be included. At the core of Morris Chang’s remarks was this:

“Globalization is almost dead; free trade is almost dead.”

… the end of beginning…

…the romance of the beginning is gone; the initial excitement is gone. A lot of hard work remains…”

Twenty-six years ago, Morris Chang tried to build a semiconductor factory known as Wafertech, which faced similar obstacles to those TSMC is currently experiencing with its Arizona facility. Back in 2020, the US Department of Commerce issued rules to restrict Huawei further, and TSMC lost Huawei, its second-largest customer accounting for 14% of revenue.

From the US vantage point, the issue is the execution of the CHIPS act and communicating it well. Specifically, creating jobs and boosting core long-term competencies. The key is to present current challenges not as systemic talent and capability challenges but as ramp-up issues. Phoenix's mayor has become a de facto spokesperson for TSMC talking enthusiastically to the media about the jobs TSMC will help her create.

TSMC will continue to juggle the delicate balance of being “global,” having a significant China presence, but still playing by the rules set by the U.S. TSMC’s ESG strategy will need to adapt to U.S. norms (calligraphy and seal-carving competition won’t cut it…).

While preserving its Taiwanese roots, TSMC also reinforces its commitment to the US, effectively Americanizing the 'T' in its acronym. Central to its communications strategy is the claim that the unparalleled efficiency of its "fabs corridor" on Taiwan's west coast offers a unique competitive edge that can't be duplicated elsewhere. With this thesis and the fact that chip manufacturing in the United States can be up to 50% more costly than in Taiwan, it’ll be interesting to see how TSMC reconciles the facts in its broader narrative.

There is a saying in Chinese “一碗水端平” (Yī wǎn shuǐ duān píng). The literal meaning is balancing a bowl of water, and it is used metaphorically to highlight the need for a reasonable and impartial approach.

Morris Chang congratulated Chinese President Xi Jinping on the success of the 20th National Congress of the Communist Party of China at the Economic Cooperation (APEC) Economic Leaders' Summit in Thailand. He had to clarify to reporters at a later event that the exchange was entirely his own decision (as opposed to representing the official position of Tsai Ing-wen’s administration).

Let’s hope the bowl water will remain in equilibrium in the foreseeable future.