Our inaugural piece focuses on mental health and the wave of people informally “diagnosing” themselves with ADHD on Red Note. It’s not that different from the old habit of cross-checking every rash on WebMD—and now asking ChatGPT about every symptom—but it points to something larger. As the outside world feels stagnant, this becomes an extension of the logic of 躺平 (“lying flat”) by turning inward: if you can’t move the system, you start scanning and reinterpreting yourself, trying to make peace with what you can’t change.

For an older generation in China, anxiety didn’t really have a psychological vocabulary; it was something you absorbed, carried, and called “real life.” On Red Note, that same unease gets labeled, broken into symptoms, turned into aesthetics, and pushed into the feed. It’s the “anxious generation” narrative Jonathan Haidt writes about, but adapted to China—shaped by family expectations, the long grinding slowdown of the Chinese economy, and how people are coping. Red Note is simply where it surfaces first, and where we get to watch it evolve in real time.

China’s New Way of Coping with Anxiety: Self-Diagnosed ADHD

On Chinese social media these days, ADHD and bipolar disorder have drifted from medical jargon into the vocabulary of self-identity.

People aren’t just “cyber diagnosing” themselves. They’re diagnosing their parents.

In the past few months, I’ve heard some version of this at least three times from different friends:

“After going home and observing my mom for a week, I’m like 90% sure she’s bipolar (or ADHD). All my childhood trauma finally makes sense.”

This wave of self-pathologizing is the newest hotspot in China’s ongoing pop-psychology boom. The last big trend was avoidant personality disorder. Before that, it was MBTI.

This whole phenomenon signals how deeply psychology has permeated China’s popular culture. From early bestsellers like The Enneagram and The Courage to Be Disliked. Then came several rounds of pop-psychology booms across podcasts, short videos, and public-intellectual talk shows. Later, after China’s biggest stand-up show was taken down for political jokes, its star Li Dan reemerged on Xiaohongshu, running therapy-like livestreams where callers often begin with, “Well, it’s my toxic family issues…”

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Psychology quickly moved from fostering independent, self-aware individuals in a society shaped by collective norms to becoming a kind of currency in the online content economy: zodiac signs, 16 personalities, avoidant attachment, now the ADHD craze. This change reflects more than just a hunger for the latest trending concept; it also exposes how social moods are evolving.

And it’s not just China. A 2024 survey in the U.S. found that 72% of Gen Z girls said that “mental health challenges are an important part of my identity.”

The easy explanation is that we’re living through an era of unprecedented attention slaughter. Our focus is shredded by notifications, by work chats pinging at random, by the endless scrolling. Our brains have been retrained for hopscotch reading and skim-surfing thinking. No wonder everyone feels like they have ADHD.

Of course, there’s serious online discussion about medication and proper treatment. One trending Xiaohongshu post features a clip from U.S. psychology expert Gabor Maté’s appearance on the Joe Rogan show, where he argues that immediately prescribing medication to someone with ADHD is often the wrong approach.

A Wall Street Journal analysis of Medicaid data from 2019 to 2023 shows a similar concern: among U.S. children prescribed ADHD medication, one in five later ended up taking additional psychiatric drugs to manage the side effects. Just 37% had behavioral therapy beforehand, largely because it’s so hard to access.

Maté suggests that ADHD isn’t a disease, but an adaptive mechanism. Infants, for example, often appear restless, inattentive, or hyperactive under stress, such as during parental conflict. They can’t fight or flee, so their “distraction” is a coping mechanism: they simply disconnect.

And that brings me to what I really want to discuss.

Beyond the attention economy, there are larger structural forces at play — an increasingly high-pressure political environment, rising unemployment, anxieties about an aging society. Yet these are questions we rarely confront.

So instead, we turn inward, reducing every feeling to a diagnosis, even for issues like romantic dead-ends. On Xiaohongshu, posts frame cheating or serially fickle behavior as ADHD. People even ask which “partner type” is best for someone with ADHD, instead of asking the deeper questions: Why can’t I imagine a future anymore? Why does long-term stability feel impossible? Why does everything collapse into living only in the immediate present?

In a heavily moderated environment — where activism is discouraged, and public-interest voices risk consequences — talking about collective issues feels unsafe and often futile. It’s easier to retreat into the smallest, safest psychological space possible.

In a way, maybe we’re all avoidant now.

Treating every trait as a symptom of a disorder may well be the best coping mechanism.

But can we truly face ourselves if we refuse to face the world shaping us?

Perhaps, for now, living as an “ADHD person” is the most comfortable way to survive in this environment.

The White House would like the TikTok chapter to read as closure. It isn’t. The executive order did something narrower: it set up a U.S. vehicle fronted by Oracle, Silver Lake, and Abu Dhabi’s MGX at roughly half ownership, pushed ByteDance below twenty percent, and kept the app running by licensing a copy of the recommendation engine to be retrained and audited in the United States. Enforcement is paused for 120 days to December 16, even as the Supreme Court has upheld the 2024 sale-or-ban law. This is not a clean break; it is a political workaround. The vector of influence is just rearranged, not removed.

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That conditionality is the headline. On the very day the EO landed, I went on the BBC to make the point that TikTok’s five-year saga shows that in the U.S. market, success can be achieved and then renegotiated.

The licensing workaround ultimately hinges on China’s export-control decisions and Ministry of Commerce review. After years of asserting its Americanness, defying, then compromising by paying billions for Project Texas to Oracle, TikTok has been repackaged under a new cap table.

A spin-off backed by politically connected U.S. investors, plus MGX, invites the obvious question: Is it simply swapping one vector of influence for another? The administration opted for a structure that is politically acceptable in the U.S. for now: American local control and an American-dominated board, paired with a deal that China can approve—so both sides can spin it as a win in their respective echo chambers.

But the national-security framing belies a deeper us-versus-them logic and is further escalated by politics.

The cap table is packaging; the mechanic is the same—attention converted into micro-transactions and sold as culture. They are different formats of the attention economy we live in. That’s why I see TikTok and Pop Mart as the same model in different wrappers.

TikTok and Pop Mart’s scale explains the stakes. About one in five American adults now say they regularly get news on TikTok, and among adults under thirty the share rises toward half. A third of U.S. adults use TikTok; and it takes just 260 videos, which could be as quick as 35 minutes, to form a habit on the app.

Pop Mart’s latest half-year results was superb: revenue expanding at triple-digit rates, profits surging, and Labubu “Monsters” line contributing a material share of sales and a meaningful lift to the bottom line. In the first half of 2025, the sales contributed by Pop Mart members represented 91.2% of total sales, with repeat purchase rate over half. The stock has come off its highs, but the Labubu craze continues. The tapering is a signal that the product has moved from hype to mass availability. The curve flattens, units broaden to the mainstream—not just reserved for the it girls and fashion icons—and the community widens.

In a recent conversation with Asia Society’s Lizzi Li, we tried to trace the source of Labubu’s soft power: it is emotional consumption that becomes part of identity. Pop Mart’s appeal is precisely that it feels therapeutic and low-stakes. Open a blind box as a reward after a grinding day and gather enough morale to step back into the involution battlefield tomorrow. Scroll on TikTok and let the dopamine rush quiet the emptiness. It is the lowest-hanging fruit of escapism.

Sociologist Eva Illouz uses “emotional capitalism” to describe a culture in which economic and emotional logics mutually shape each other: economic relations grow deeply emotional, while intimate life is reorganized in market-like terms of bargaining, exchange, and choice. The therapeutic discourse, which promises authenticity and healing, puts psychology at the core of identity and turns the self into a project of continuous management and improvement.

The result is plain: feelings are commodified and commodities are romanticized. Authenticity functions less as a state than as a performance validated by an audience. Identities flatten into marketable traits, reinforced by metrics like follows and likes. This is the operating system that makes Pop Mart feel therapeutic and TikTok feel intimate while both optimize for engagement.

It is fitting, and a little ironic, that Cal Newport, a computer science professor and productivity guru who thrives in that same marketplace of therapeutic betterment, has a superb explanation on the technicalities of TikTok’s system and why a change of hands will not fix TikTok. His thesis points to the fundamental issue of TikTok: it is a large-scale recommender that embeds users and videos and learns purely from behavior. Change owners, license the code, add auditors; the objective remains engagement, so the output remains whatever keeps people watching. The systems do not share our values and do not know what values are. They learn the full range of human patterns, including our darker impulses, and exploit bright and dark alike if it moves the metric. The problem is baked into the math, not the org chart.

Both companies are conduits to younger consumers whose priorities already run faster, more visual, ritualized, and socially legible. You can restrict a feature or tighten a disclosure, but you cannot regulate away the appetite for short hits of recognition and sense of belonging.

Emotional capitalism has taken hold because it feeds on a wider shortage of identity, connection, and meaning, and turns that shortage into commercial opportunity. You can rotate the board, license the model, and buy all the Labubus; however, unless the objective shifts away from raw engagement and the loops that monetize it are slowed and made accountable, the output will not change. Changing hands does not change the engine. It only changes who collects the toll.

My nieces and nephews play make-believe store at home and there is no physical money involved. They hold out their arms to me and the watch pops a QR code. I scan with Alipay or WeChat Pay, give them real money, and the game goes on.

The watch is also the screen you do not put down, because for children in China, their social life now lives on their wrists. The category leader is Little Genius, 小天才, branded as imoo outside China. I wanted to understand how these watches took the market, the long-term implications for kids, and the China context that allowed this market to flourish.

To fully investigate, I wrote about Little Genius watches for Fast Company China. Below is translated in full and lightly smoothed for English flow. If you read Chinese, the original is here: https://mp.weixin.qq.com/s/sGNwbPoyrjBvwC4pt1yLAw.

Little Genius’s Wrist-Sized World: Innovation, Social Life, and the Greenhouse Effect

Fast Company China Edition · by Ivy Yang · September 1, 2025

Over the past decade, tech products for children and teens have evolved from study devices and handheld game consoles to wearables, with features piling up and category boundaries blurring. Today’s children’s smartwatches are at once a communication tool, a health monitor, a locator, and a pocket-sized social terminal.

IDC reports that in the first quarter of 2024, shipments of children’s smartwatches in China rose 44.4 percent year over year to 4.04 million units. This market is expanding against the cycle and moving upmarket at the same time. The brand that dominates is Little Genius. According to RUNTO’s first-half report on China’s children’s smartwatch market, Little Genius leads with a 35.3 percent share, ahead of Huawei at 12.2 percent and Xiaomi at 9.4 percent. Its newest flagship model sells for up to 2,399 RMB. Pricing now sits alongside adult devices such as the Apple Watch, and because Little Genius reserves many of its newest features for its latest Little Genius models, faster hardware cycles drive repeat purchases and strong lifetime revenue. Given the size of China’s under-15-year-old youth population, the runway remains long.

Beyond the numbers, Little Genius is more than a commercial winner. It functions as a live digital-social experiment among young users, testing how a closed platform can reshape relationship networks and day-to-day interaction before those users are fully grown.

Founder Jin Zhijiang emerged from the BBK ecosystem shaped by Duan Yongping. BBK, short for Bubugao步步高, began in the mid-1990s in Dongguan making educational electronics and audio-visual products, then expanded into mobile phones and incubated the brands OPPO and vivo. Before BBK, Duan led Subor, known in Chinese as Xiao Bawang 小霸王, a 1990s household name for inexpensive learning computers and gaming devices that put educational electronics on millions of desks. Duan’s operating playbook emphasized tight product focus, channel discipline, and building defensible moats. Pinduoduo founder Huang Zheng, also known as Colin Huang, has publicly credited Duan with hands-on guidance on product positioning and release cadence. In plain terms, what to build for whom, at what price, and when to ship.

Shaped by that lineage, Jin internalized a philosophy of locking onto core pain points and building defensible moats. During his BBK years he developed first-hand intuition for how children’s needs were shifting. Around 2010, when mainstream options were still clunky candy-bar phones or single-function trackers, he began betting on children’s wearables.

In children’s electronics there is a structural reality. The buyer is the parent, the user is the child, and their needs often pull in different directions. Winning means balancing both. That is where Jin’s playbook gives Little Genius leverage. For parents, emphasize safety and control. For kids, deliver social life and a sense of identity. For the brand, build moats with a closed ecosystem and high-frequency iteration.

Unlike adult watches that focus on reminders and logging, children’s watches are engineered as pocket-sized social systems. They are the channel kids use between schoolwork and daily life to keep in touch with peers and to explore online friendships. In Little Genius’s world there is no WeChat. There is the Little Genius watch community. Adding and expanding friend lists, posting updates, trading likes, and tagging into topics all happen inside Little Genius’s digital walls, creating a digital space largely free of adult interference.

For parents, Little Genius offers precise location tracking down to building floors, permission controls and usage windows, plus heart-rate and activity monitoring. That produces a feeling of visibility and control. On the commercial side, hardware plus features reserved for new models, limited editions, and collaborations create repeated purchase moments. In some ways, Little Genius is shifting from device maker to operator of the social infrastructure of childhood.

In informal interviews, most parents answered the “why this brand” question the same way: the children say all their classmates use Little Genius. Alternatives exist, but once school is in session, Little Genius is the social currency that matters.

This choice reflects a careful balance. In a parent’s frame, all-day scrolling on a phone or short-video app reads as a failure of supervision, so a watch with constrained functions and controllable permissions feels like a lower-risk on-ramp to the digital world. From the child’s perspective, Little Genius is the key to class group chats, to posting updates, and to the ordinary interactions that stitch the peer group together.

Inside this greenhouse, kids learn to thumb-type on a tiny screen, take selfies with the front camera, and sometimes pop the watch face off to get a better angle. Mirroring adults’ WeChat habits, they check in, caption, and post inside their watch community akin to the Wechat Moments interface. More importantly, Little Genius embeds an habit-building rewards loop. Daily check-ins, step counts, and other point-earning actions unlock avatar gear and upgrades. Virtual rewards become reasons to keep the device on and to interact often, reinforcing presence and status within the cohort.

Little Genius also maintains key tenets of a platform. Only users of the same watch brand can add one another as friends. Some content can be exchanged only when both kids have the latest model. Fast iteration and feature thresholds push upgrades. Limited and co-branded editions add status to the hardware itself. Early adopters of a new model get a brief spotlight in class. Special filters or high like counts become sources of envy in school. User habits vary by age, from preschoolers who rely on voice notes to teens navigating more complex XTC circles. Little Genius is no longer just a watch. It is a small world with its own logic.

This is the children’s-scale version of the adult internet’s network effects and lock-in mechanism.

Under the stickiness is a coupled design of perception and reward. Direct touch input folds the screen into the brain’s body map. Multi-touch, swiping, and pinching heighten kinesthetic engagement. Dynamic feeds, likes, and unread badges map onto variable-ratio reinforcement, the same mechanism that keeps slot machines, short-video apps, and social platforms in constant use.

Over time, frequent micro-rewards raise the dopamine threshold. To feel the same level of pleasure, a user needs feedback more often or stronger stimuli. Traditional sources of dopamine for children, such as outdoor play, physical games, reading, and crafts, arrive less frequently and at lower intensity but with longer sustained feelings of fulfillment. When joy mostly arrives as instant feedback at the wrist, low-stimulus activities feel flat. The baseline for pleasure rises quickly, attention and patience fall, and the idea of satisfaction is rewritten. When the reward system is constantly pulled forward, the absence of stimulation can bring irritability and mild withdrawal-like reactions.

Health risks are part of this picture. Parents often assume a smaller screen is safer, yet the usage posture is a high-frequency loop of raise the wrist, stare, and near-focus. That forces rapid shifts between far and near vision and adds strain to a developing visual system. According to the National Disease Control Administration, overall myopia among Chinese children and adolescents in China was 51.9 percent in 2022. Multiple studies identify near-distance, high-frequency, fragmented viewing as a driver of progression. Each feature upgrade adds new reasons to look at the screen longer, which makes intervention harder.

One feature widely welcomed by parents is All-Day Mood. The watch tracks and visualizes a child’s emotions across the day and outputs a positive-emotion share, and then benchmarked against peers. Quantifying joy, calm, and displeasure offers comfort because it feels like a verifiable report card. The question remains. If a watch must calibrate a child’s emotional and health state, how much room is left for common sense and the older intuition of caregiving?

For parents, Little Genius is a safer gate into the digital world. For children, it is the necessary ticket into the peer circle. That sense of safety is also cultivating a greenhouse of digital socialization, where interactions are confined to an environment that looks safe but is highly uniform. Most relationships narrow to the same age, the same school, or the same neighborhood, with little diversity or serendipity.

At the same time, to climb the watch leaderboards quickly, kids engage in mutual boosting and friend-list expansion with strangers, sometimes extending beyond the watch to platforms such as Red Note. Experiences that ought to be learned in real-world encounters are replaced by transactional exchanges, like for like feedback, mutual adds, topic tagging, and vote swaps. The result is social competence that narrows under greenhouse-style protection and discipline. It arrives earlier, runs deeper, and is harder to detect than the information filter bubbles adults face.

Globally, the debate over digital health is gaining urgency. In The Anxious Generation, psychologist Jonathan Haidt argues that faster networks and advancing tech make screen life more immersive, meeting desires with minimal effort while face-to-face time shrinks. The consequences include declining social competence and rising loneliness.

That lens helps explain the Little Genius phenomenon. When a generation’s friendships, social life, and sense of identity are largely carried and shaped by a device worn on the wrist, the long-term effects are unknown. The watch can make kids more fluent in digital spaces. It does not automatically make them more capable in the real world. Little Genius has brought Chinese children into a greenhouse of digital socialization ahead of the curve. Whether that greenhouse is advanced training for the future or a premature loss of real-world experience remains an open question.

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But what do consumption and standards look like during an economic downturn?

Labubu might be the answer.

I’ve been back in China for about a month and found myself repeatedly drawn to Pop Mart stores. Across the cities I’ve visited—Beijing, Shanghai, Chengdu, Suzhou, Wuhan—I walked into at least half a dozen locations. For research, I told myself.

No matter the city, Pop Mart stores had shoppers, unlike many of their retail peers. At Wuhan’s SKP mall, nearly empty on a weekday evening, the only store with customers and purchasing happening was Pop Mart on the B1 level.

There’s plenty to look at and plenty to buy. But the most sought-after IPs are always sold out. Every time I ask, “Do you have any Labubus?” I’m met with a look that suggests I’ve asked the most naïve question imaginable. Yet Labubus are everywhere—either tethered, housed in clear plastic boxes, or featured as store decorations. Shoppers can see them, touch them, squeeze them, admire them—but they can’t own them.

What’s on display is the unattainable, and that makes it all the more tantalizing.

I never left a Pop Mart store empty-handed. I needed a consolation prize for the disappointment of not securing the prized Labubu or Cry Baby. So I’d settle for a Cry Baby–themed charging cable blind box or a Labubu-shaped candle. At least those are useful, I justified in my head.

In China, there’s a word that keeps surfacing in conversations about the unexplainable: 抽象, often translated as "abstract." In Chinese internet slang, though, it has taken on a different life. It’s a catch-all term for things that don’t make sense on the surface—bizarre, absurd, inexplicable—but still resonate on an emotional or aesthetic level. It suggests a kind of unbothered calm, paired with a desire to stand out. Beneath it runs an undercurrent of apathy, even nonchalance, toward the things people feel they cannot change—a hopelessness wrapped in a sense of “whatever.” I define 抽象 as a way of rationalizing behaviors that defy logic. It reflects both a need for self-expression and a recognition of powerlessness at the same time.

Like the fact that it’s nearly impossible to get your hands on a Labubu. Or that people dress up as Zimomo mascots and dance in restaurants in hopes of chasing traffic and shares. Or the collective wave of nostalgia for a past that seems to promise the psychological safety we all crave.

*The Zimomo dance below happened at a family dinner outing in Wuhan. There is a Part II where Zimomo cajoled my tweenager son to dance with him, but I do not have permission to share publicly.

In Beijing, a friend gave me Cry Baby X Powerpuff Girls. We even decorated its “tears” with stick-on crystals from her leftover stash from last year’s Tomorrowland trip. It now dangles from my patent leather Balenciaga. Just like how I got my first Labubu (you can read about it on Care to Elaborate), the act of generosity felt meaningful—like I’d been honored with a treasure. She gave up her Cry Baby for me. And somehow, that meant I mattered more than the doll. It felt a little absurd, and strangely tender. I leaned into the designer bag and Pop Mart trend and felt like I’d joined a moment. Very 抽象.

China Consumption Observed

Compared to last year, China’s vibes felt noticeably more subdued. Not because conditions had objectively improved, but because a quiet sense of resignation had taken hold. There was a kind of “Who is John Galt?” energy—an acceptance of the status quo and a tapering of the relentless drive I have always associated China with. Perhaps it was also because people had found new outlets. Go see a concert by your favorite Chinese artist from your youth. Take a short trip and take all the photos to show for it. Collect Labubus. Savor the thrill of slicing open Pop Mart’s blind box packaging.

A form of collective coping, perhaps?

Many of Pop Mart’s most popular IPs express rather than resolve emotions that linger beneath the surface. Molly has this blank emotional expression. Labubu’s mischievous grin, Hirono’s defiant loneliness, and SkullPanda’s subculture aesthetics all distill complex emotions into simplified, collectible forms. What people are buying through Pop Mart is emotional resonance. Each collector can imbue the toys with their own mood or story.

It’s easy to see why Pop Mart shoppers often say, “This character feels like me.”

The frenzy surrounding Pop Mart and Labubu reflects a deeper shift in Chinese consumerism. Just like income peaks, consumption peaks are shaped by expectations. When people feel optimistic about their future earnings, they tend to spend in advance. But when that optimism fades—especially among 20- to 29-year-olds—spending patterns adjust. In a climate where the floor feels unstable and the ceiling increasingly out of reach, where marginal effort brings diminishing returns, consumers are voting with their wallets. Over the past three years, strolling in parks rose by 226%, followed by city walks at 218%. Meanwhile, karaoke, nightclubs, bars, and shopping all declined.

This is where Pop Mart fundamentally differs from brands like Miniso or Sanrio. Miniso treats IP as business—licensing familiar characters, including many from Sanrio, to sell practical, everyday items. From handheld fans to makeup puffs, its products are designed to be used. Pop Mart’s core products, by contrast, are not functional. Trendy toys, or chaowan 潮玩, are made to be admired, not used. They serve no practical purpose. Chinese consumers are gravitating toward short-term, emotionally gratifying purchases, rather than long-term financial commitments like buying a house or car. Pop Mart offers precisely that—an instant hit of dopamine without the weight of permanence.

Cute sells. It always has. Sanrio, the Japanese company behind Hello Kitty and Kuromi, built a real business on cuteness, delivering a 646% return to investors since 1982, including share price gains and dividends. Pop Mart, by comparison, has returned 488% to date.

How Pop Mart Works

What underpins the Pop Mart economy is a sophisticated operating system.

Pop Mart isn’t just a retailer or toy manufacturer. It operates more like a media company—one that trades in narrative, distribution, and platform value. Creativity may not be monopolized, but Pop Mart has built a system that can simulate, iterate, and optimize the elements that make an IP successful, and do so at scale.

Most of its 90-plus IPs are exclusive, developed through deep collaborations with artists. The power dynamic may shift depending on the popularity of each IP, but what remains constant is the infrastructure Pop Mart provides. Designs and product assortments are continuously tested and refined—across physical stores, resale platforms, social media, and its loyal fanbase. Every time I check out at a Pop Mart store, I’m prompted to join the “community” via my Alipay and asked at the cashier.

The real foundation of Pop Mart’s valuation isn’t just a few breakout characters. It lies in the entire retail and storytelling ecosystem the company has built, where IP functions both as product and as platform. This is a factory of feeling—engineered to produce emotionally resonant characters and to monetize their narratives across every possible channel. Pop Mart even has its own magazine, play/GROUND. Pop Mart livestreams on Rednote and Taobao. You still can’t simply buy a Labubu, but you can try your luck — inventory is released at random

Still, even a well-calibrated machine has its limits—especially when it begins shaping consumer behavior as much as it responds to it. Daigous—who once dealt in luxury handbags by arbitraging price differences across regions—have pivoted to Labubu collectibles, hunting down collection boxes and hard-to-get Labubus. In June, a Chinese bank offered Labubu blind boxes to incentivize fixed deposit signups. The backlash was swift.

The Chinese government has also made its position clear. People’s Daily ran an editorial titled “Blind Cards and Blind Boxes Can’t Be Left Unchecked,” warning of the psychological impact on minors and unchecked commercialism. While People’s Daily did not identify Pop Mart by name, the stock took a hit.

Pop Mart has faced this kind of scrutiny before. In 2022 its market cap sank below HK$15 billion, compared to a market capitalization of around HK$100 billion at its IPO in 2020. Regulatory scrutiny of Pop Mart escalated as Chinese authorities and state media highlighted the “gambling-like” nature of blind box toys, especially their impact on minors, leading to calls for tighter regulations and increased stock market uncertainty. At the same time, consumer enthusiasm waned, with growing negative feedback on social media regarding product quality and pricing, signaling emerging fatigue in the market. After rebounding in 2023, the real question is no longer just about regulation, but whether Pop Mart can replicate past successes like Molly or now Labubu. How will it diversify beyond the toy collectible space—into accessories, lifestyle products, or new categories—to broaden its reach and increase consumer stickiness?

Pop Mart’s success has always hinged on capturing and commercializing the emotional pulse of a generation. You never know what you’ll get—and it’s that uncertainty that fuels repetition. Buy again. Try again. Feel again. But that same loop is also what makes regulation tricky.

The ultimate question facing Pop Mart is whether it can preserve the scarcity-driven thrill while avoiding the tipping point into excess. Emotional capitalism may be an engine of growth, but it is also a delicate machine—one increasingly subject to volatility, scrutiny, and cultural pushback.

The more fluent Pop Mart becomes at orchestrating desire, the more it will be held accountable for the emotional consequences it helps manufacture.

In a recent Rest of World story, one founder framed it this way:

“DeepSeek has shown us that as long as our product is competitive, we should not worry too much about being a Chinese company.”

But that optimism is still fragile—and perhaps a bit premature.

Even as DeepSeek makes waves, the rest of the ecosystem hasn’t exactly followed.

Recently, Semafor reported that the U.S. Treasury is reviewing Benchmark Capital’s $75 million investment in Manus, an AI company founded by Chinese technologists. Manus is incorporated in the Cayman Islands, stores its data outside China, and has a team that spans Singapore, Japan, the U.S., and China. In other words, it looks like any globally ambitious tech startup. But none of that has stopped the scrutiny.

In fact, the investment sparked public backlash from other VCs.

Was the issue that Benchmark didn’t notify the Treasury Department? Possibly. Benchmark’s legal team reportedly cleared the deal on the thesis that Manus only fine-tunes models. That’s still up for legal debate—the lawyers are at it.

What’s harder to untangle—and more telling—is the deeper perception issue.

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sharply unpacks this dynamic in his Interconnected piece:

“It’s VC math vs. geopolitics math.”

Benchmark may have believed it was early enough to shape the narrative before politics caught up. Instead, the investment became the narrative. And the backlash didn’t come from Capitol Hill—it came from within Silicon Valley itself, from the very ecosystem that’s supposed to reward innovation.

Kevin writes:

“The one risk that may make Benchmark regret this deal is reputational. Touching any Chinese AI startup, seen as a politically toxic asset, as an American investment firm will invite criticism, however baseless. When this deal was reported by Bloomberg, some of Benchmark's competitors quickly accused the firm of helping “the enemy.” Many of these detractors are sadly VC in name only and beltway lobbying firms in reality.”

Which brings us to the unspoken truth many Chinese founders navigating U.S. capital already understand:

It doesn’t matter where your servers are. If you “look Chinese,” you’re still treated as a China risk.

You can register abroad, store your data in a GDPR-compliant fortress, and build a team of ex-Googlers and ex-Meta engineers across six continents. But if your surname, university affiliation, or pitch triggers the wrong instincts, suddenly you’re not just a startup—you’re a geopolitical liability.

Manus likely took a “geopolitical discount” from Benchmark. But the forces at play are more subtle: a stray tweet from a rival VC, a glance in a negotiation, a new round of informal CFIUS reviews. Reputation risk moves faster than regulation.

TikTok CEO’s “Senator, I’m Singaporean” moment continues to echo, just in subtler forms. This isn’t just about politics. It’s about perception. And perception, increasingly, is strategy. Founders now have to manage both their cap table and their national associations with precision. Some rebrand entirely. Others delay fundraising, keep operations offshore, or lean into vague, infrastructure-first narratives that sidestep national identity altogether.

So no, the China-shedding era isn’t over. It’s just become more subtle. It’s less about disavowing identity and more about managing visibility. Some founders embrace ambiguity. Others lean into globalism. A few, like DeepSeek, go all in and hope the product speaks louder than the passport.

If identity is now the front line of industrial policy, then perception becomes strategy.

AI innovation, technical capability, and access to capital are no longer judged solely on performance—they’re judged on optics, associations, and political readability.

In his recent New York Times op-ed, argues that we may already be living in the Chinese century—and that the early months of Trump’s second term will be remembered as the moment the U.S. definitively lost the plot. While Washington obsesses over tariffs and short-term posturing, China is doubling down on industrial capacity and long-term tech dominance.

The Chinese electric carmaker BYD, which Mr. Trump’s political ally Elon Musk once laughed off as a joke, overtook Tesla last year in global sales, is building new factories around the world and in March reached a market value greater than that of Ford, GM and Volkswagen combined. China is charging ahead in drug discoveries, especially cancer treatments, and installed more industrial robots in 2023 than the rest of the world combined. In semiconductors, the vital commodity of this century and a longtime weak point for China, it is building a self-reliant supply chain led by recent breakthroughs by Huawei. Critically, Chinese strength across these and other overlapping technologies is creating a virtuous cycle in which advances in multiple interlocking sectors reinforce and elevate one another.

Chan’s point is blunt: while the U.S. fixates on symbolic wins, China is engineering real ones. And its model—state-led, long-horizon, and unapologetically strategic—is winning. What’s more, China’s strength in one sector reinforces another: batteries power EVs, which create demand for chips, which in turn fuel AI development. This is not a series of isolated wins; it’s almost like an industrial flywheel.

Against that backdrop, the U.S. focus on identity and political optics isn’t just bad for Chinese founders—it’s bad for brand America.

In today’s WSJ, “Brand America Never Goes Out of Style,” an op-ed by publisher Almar Latour argued that America’s enduring strength lies in its cultural appeal and soft power. But if perception is now doing most of the work—if competitiveness rests more on image than on industrial capability—that only highlights the deeper vulnerability.

When strategic advantage becomes symbolic rather than structural and global innovation is judged through a lens of loyalty rather than merit, the brand may hold up for a while, but the foundation weakens.

And in that scenario, the real risk isn’t who gets funded—it’s who gets shut out.

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Rednote, TikTok and DeepSeek

The unfortunate truth is that it was a missed opportunity and Rednote’s popularity has not maintained momentum. Bloomberg reported that in the five days following TikTok's return to the app stores, downloads of social app Rednote plummeted by 91%. TikTok itself more than doubled its usual downloads once it was brought back, while all competitors that had gained from its brief removal saw declines, from YouTube and Snap to Facebook and Instagram.

TikTok’s fate remains in limbo. No deal is finalized and key issues, such as ownership of TikTok's algorithms, remain unresolved. But Beijing has also appeared to soften its stance and would not object to American investors owning more of the app, as long as the algorithms remain in ByteDance's control. And it was just announced today that Reddit Co-founder has joined “the people’s bid” for TikTok.

TikTok’s competitors are trying to take over some audience share. Meta may launch Reels as a separate app to replicate the TikTok experience, while Substack is boosting its video capabilities to capitalize on market gaps.

DeepSeek is still all in AGI, and I think DeepSeek’s secret sauce is different from its peers. It’s more than the technical capabilities—its use cases are broader, it could be emotional companionship and a fortune teller for China’s youth. The ethos is best captured by this Bloomberg reporter—

Involution in the AI space is heating up. Tencent unveiled its Turbo AI model last week, claiming it outperforms DeepSeek in speed. Just a month ago, Alibaba showcased its latest Qwen (通义千问) AI, signaling an intensifying race in China's AI landscape. The involution is in full swing.

What stands out to me is that DeepSeek has become the new benchmark for technical prowess—companies are eager to position themselves in relation to it. There’s a rush to integrate DeepSeek in China, not just for its capabilities but for the newsworthiness and perception of cutting-edge innovation it brings. From robot vacuums and smart appliances to state-owned enterprises, hospitals, and local governments, adoption of DeepSeek is spreading rapidly.

Some of these adoptions will be publicity stunts with no real impact, but the broader willingness to experiment—and the sense that trial and error is both supported and encouraged by the government—is a meaningful step in the right direction.

However, a fundamental challenge remains: the scaling law still holds, and it is hard to maintain a leading edge just by algorithm improvement.

US Legislative Pushback Against DeepSeek

On Friday, legislation was introduced by a bipartisan group of senators moving to ban DeepSeek on government devices. Earlier this month, similar legislation was introduced in the House, and New York, Virginia, and Texas have already banned DeepSeek from state devices and networks.

“The bill, introduced by Sens. Jacky Rosen (D-Nev.), Jon Husted (R-Ohio) and Pete Ricketts (R-Neb.), comes as DeepSeek’s rapid rise in popularity has sparked data privacy and national security concerns. “

"As the artificial intelligence landscape continues to rapidly expand, the U.S. must take steps to ensure Americans' data and government systems remain protected against platforms — like DeepSeek — that are linked to our adversaries," Rosen said in a statement. "DeepSeek is a tool that perpetuates Communist China's agenda—full stop," Husted said. "It exposes Americans' data to our adversary's government, lies to its users, and exploits American workers' AI advances. We can't afford for U.S. officials to play into Beijing's hands by hosting this hostile bot on their devices."

Sound familiar? Reads like the TikTok bill… just replace DeepSeek with TikTok.

The US-China Relationship: Who Gets to be Exceptional?

China's growth has been anemic, and the US has been stuck in a persistent cultural and political partisan divide over the past couple of years. Both sides have taken a defensive approach to positioning their place in the world and the nature of the relationship with each other. The US often takes a moral high ground, throwing around words like 'national security,' 'Xinjiang,' and 'surveillance' at the slightest provocation. Meanwhile, China constantly works to justify its own narrative on the global stage.

said it best in his recent essay:

“At this critical juncture, one question looms large: Is it possible for these two great powers, each convinced of its unique role in human history, to find a way to coexist? More specifically, can American exceptionalism accommodate Chinese exceptionalism in the 21st century?"

Lastly, but not the least China's Economic Outlook:

The Two Sessions are approaching, and they're expected to reveal a more pro-growth agenda compared to last year, with approximate targets of 5% for GDP growth and 2% for consumer inflation.

For more “predictions,” head over to Asia Society’s Center of China Analysis to read on.

It was a fascinating discussion of everything from China’s evolving demographics, the shifting mindsets of the young generation, and social identity in the underemployment and unemployment environments. We hit all the buzzwords du jour: “lying flat,” “involution,” “quality children” and “three-child policy,” “invisible labor of mothers” (ok, this is not as buzzy, but let’s talk about it more) and took apart these topics from a gender and cultural lens.

And speaking of cultural phenomenons, my previous post on live streaming

in China was partially inspired by an interview I did with New York Times’ Muyi Xiao, which came out as a dopamine-filled visual story. My hot take? Cheap thrills! Against a slowing economy and the aforementioned unemployment reality, engaging in the consumption economy without a huge hit to the wallets is the trend du jour.

I also had the pleasure of teaching an undergraduate class at my alma mater, New York University a couple of weeks ago. The class is on facilitating cross-cultural communications, and my topic was "The US-China Narrative in a Time of Turmoil." We talked about stakeholder management, the idea of dual-narrative (and why it's a nonstarter), the differences between PR and marketing, and how the nuances are evolving. I incorporated many of my op-eds as case studies, and the Q&A was quite lively!

In preparation for all these talks and writing, I’ve been thinking a lot about how the butterfly effect: seemingly insignificant and unconnected actions or events that lead to unpredictable consequences over time, like a butterfly flapping its wings causing a chain of events that results in a distant storm.

For example, the halted Ant Financial IPO redirected the company's focus toward expansion in Southeast Asia, where it now competes fiercely with Tencent in the payments sector. Trump's election win not only challenged the influence of traditional media but also fueled questions about the legitimacy of ongoing anti-China rhetoric, affecting everything from debates over TikTok to interpretations of China's cultural and social dynamics. The continuous alk about tariffs raises uncertainty: are they merely a negotiation tactic in the "art of the deal," or will they become a reality? Meanwhile, the trend of "China shedding" continues, highlighted by companies like Hillhouse Capital removing references to China from their corporate websites, even as CEO Zhang Lei meets with Shanghai’s party chief.

These are the topics of my op-eds in recent weeks for Tech in Asia and FT Chinese.

Apps vs. alliances: the SEA playbook of rivals Tencent and Ant

Shein and Temu in crosshairs of Trump’s tariffs

Hillhouse, ByteDance, and Shein’s dance around the China question

美国传统媒体衰退中的竞选教训: 特朗普如何赢得选举宣传战

Trump’s tariff policies will be most acutely felt in Panyu, Guangzhou, where Shein suppliers will face even slimmer profit margins, likely lowering production quality to stay afloat. Temu sellers will see fewer orders as the platform recalibrates its aggressive customer acquisition strategy, resulting in reduced traffic compared to previous months. Escalating Trump rhetoric will create the illusion that America is closed to Chinese businesses, causing "go-from the robot vacuum makers, Instagram-based apparel e-commerce platform, and C-beauty brands—to reconsider investing. This may dent Meta's ad revenue, dim enthusiasm for the upcoming CES and industry events, and fuel media coverage of decoupling.

Even with all the talks about de-globalization, we are more connected than not. Lately, I’ve been reading Flow by Mihaly Csikszentmihalyi, and in the section “The Roots of Discontent,” he eloquently expresses a truth that has given me a deeper sense of hope, despite the wariness I’ve felt over the past few months.

“There is not much that we as individuals can do to change the wai the universe runs. In our lifetime we exert little influence over the forces that interfere with our well-being. It is important to do as much as we can to prevent nuclear war, to abolish social injustice, to eradicate hunger and dseas. But it is prudent not to expect that efforts to change external conditions will immediately improve he quality of our lives.

As J.S. Mill wrote: ‘No great improvement in the lot of mankind are possible, until a great change takes place in the fundamental constitution of their modes of thought.’”

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I’m so excited to share with you my first Op-Ed for The Wire China titled “The Dilemma of the China Shedding Strategy”. The publication has long been my trusted source for insightful analysis on China's global business influence, and it’s a personal milestone to be able to share my thoughts on The Wire China.

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My piece focuses on Hillhouse and GGV’s “China Shedding Strategy.” I first wrote about this idea in the context of Temu and Shein downplaying their Chinese identity.

I argued that the best way to defend corporate reputation is to shape those ideas and play offense. Actions must ultimately match the perceived reputation, but as you will read in the Op-Ed, that’s often not the case.

In a nutshell, the funds' are pursuing a"China Shedding Strategy" because of the following reasons:

• Shifting allocation and investment priorities of US institutional investors like pension funds

• New proposed U.S. restrictions on investments in Chinese technology

• Fundraising cycle and the need to appeal to investors who are wary of the funds’ China risks

• Demands from lawmakers to address China affiliation and conflict of interests

However, the shift of Chinese companies away from their roots in China is accompanied by challenges and potential repercussions for their reputation.

Notably, Hillhouse is attempting to hedge against this perception. Before moving to Singapore in 2022, it completed the first closing of a renminbi-denominated carbon-neutral industry investment fund, totaling over 4 billion renminbi ($600 million). This could be seen as an effort to remain aligned with China's broader goals and demonstrate continued commitment to the country. Hillhouse is also fundraising on the basis of its China expertise and making a play on undervalued Chinese stocks. It is an opportunistic move that goes against the Chinese government's efforts to bolster real economic productivity. These efforts suggest that Hillhouse is not ready to shift its focus entirely away from China just yet.

Playing both sides is not a long-term strategy. Especially when you’ve also got Hillhouse sending out its team of executives talking to media about “the firm has long sort of grown past [Asia]…and looking to take advantage of opportunities around the world.”

Funds like GGV and Hillhouse and companies like Temu, Shein, and TikTok will find themselves at a crossroads. They will have to find a way to balance ties to China with their global aspirations and navigate regulatory demands and investor expectations.

P.S. If you’d like the full PDF article, shoot me an email ivy@waveletnyc.com

As always, thank you for reading.

Ivy

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Public announcement: If you plan to build or revamp your corporate narrative strategy and manage PR risks, let’s chat. ivy@waveletnyc.com https://waveletnyc.com

Happy New Year! I just got back from Italy, and what a trip! I saw tourists sporting Huawei and Oppo phones at the ancient ruins of Pompeii, stumbled upon not one but two Miniso stores in Naples, paid tribute at the Patheon to the QUEEN who gave the world Margherita pizza (God bless you, Margherita Savoia), and experienced firsthand the passion of Neapolitan soccer fans at the Napoli vs. Monza match (a nail-biting 0:0). But yes, I came out in one piece!

And I gave a lot of thought to the themes of 2024 while in transit, and here is a running list of things I will pay close attention to:

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1. The Global EV Race
   In 2023, China's electric vehicle (EV) sales exceeded nine million units, a staggering six times more than the U.S. Chinese EV companies like BYD, XPeng, and Nio have been eyeing the U.S. and EU markets for a while.

   While they employ sophisticated marketing and customer segmentation strategies in China, their entry into EU and U.S. markets has been challenged. In 2023, Nio's CEO criticized U.S. protectionism in a Financial Times interview. Nio plans to enter the U.S. market by 2025 with premium, China-made EVs as part of a goal to expand to 25 countries and regions. Interestingly, they don’t plan to set up U.S. production sites despite incentives (The incentives require EVs to be made in North America with domestic batteries, which puts carmakers importing vehicles at a disadvantage). Observing how their overseas reputation management and stakeholder engagement strategies evolve in 2024 will be interesting.

2. Chinese Cross-Border E-Commerce and Retailer Competition
   The competition for market share is heating up among Chinese e-commerce platforms like Temu, Shein, and TikTok Shops, especially against established players like Amazon. Sustainable growth is the key theme. TikTok Shops is slashing subsidies and will try to differentiate itself from its competitors. (here’s a recent tweet on this topic) The likely losers in this battle are companies like Dollar Tree and Etsy in the U.S. market.

   A company to watch is Miniso, a US-listed Chinese variety store. Despite its low profile, Miniso has aggressively expanded its brick-and-mortar presence overseas. With half its 5400 outlets located internationally, it aims to open 1500 stores in the U.S. alone. (Source)

3. The Quiet Chinese Robot Giants: The true success stories among Chinese companies expanding overseas, particularly those that have downplayed their origins and grown their sales, are robot vacuum brands like Ecovacs and Roborock. They are dominating the U.S. and EU markets and eating iRobot's lunch. Their market valuations have skyrocketed, indicative of their growing influence. For instance, Roborock's overseas revenue now accounts for over half of its total, soaring from USD 87.15M in 2019 to $504.6M in 2022. Eschewing a heavy emphasis on corporate narrative, they prioritize product PR and influencer-driven campaigns to boost sales. Smaller and more niche robot vacuums are also coming for a slice of the US-EU markets, and we can see the level of interest from the number of press releases that come out of CES this year.

4. Two IPOs: Shein’s IPO and Amer Sports IPO.

   Shein IPO: Shein's confidential filing has already gotten much media attention, with scrutiny expected to increase in the coming months. On January 3rd, Senators Rick Scott and Bob Casey expressed concerns in a letter to the NYSE and Nasdaq CEOs, highlighting risks to American investors. They raised issues regarding unethical business practices, labor conditions, corporate governance, and financial transparency. The Select Committee and 16 Republican attorneys general have urged the SEC to scrutinize Shein's supply chain for forced labor. Shein faces a challenging path ahead in winning the trust of U.S. regulators and shifting public perception.

   Amer Sports IPO: As a subsidiary of China's Anta Sports (a USD 25B China homegrown sports apparel behemoth), Amer Sports owns many high-profile international brands, including Wilson, Salomon, Arc’teryx, etc. Anta has a huge influence over these global brands through Amer and has flown under the radar for as long as it has. The Amer IPO will shed light on the relationship with its parent and potential thorny China connection issues. After all, Anta’s influence got President Xi to wear a puffer jacket from Amer-owned brand Arc’Teryx.

   

   Amer generates a third of its production value in China and will have to answer questions about labor practices and supply chain management. The executive teams at Anta and Amer are also highly intertwined, a potentially thorny governance/China connection issue for its U.S. IPO.

   Planning a thorough analysis piece on Anta + Amer with the inimitable . Stay tuned.

Since it’s the beginning of a new year and we are all in the mood for resolutions, I want to leave you with this quote from my treasured source of constant inspiration Maria Popova. Cheers to a year of clarity, overcoming our fear of uncertainty, and going for it. As always, thank you for reading.

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Ivy Yang is the founder of Wavelet Strategy, a New York-based strategic communications and reputation management company. She writes a Financial Times Chinese column called 话语权时代, and Calling the Shots: Bridging the U.S.-China Communication Gap, stories of wins and fails. Learn more about why she writes and what she writes, click here.

Public announcement: Starting in September, I will take on selective consulting and advisory projects again. If you plan to build or revamp your corporate narrative strategy, let’s chat. https://waveletnyc.com

Last October, I started writing about Temu, a subsidiary of Pinduoduo (PDD), just a month after its US launch. Despite a low-key start, the app swiftly climbed to the top of the Android download charts within two weeks of launch.

Temu then embarked on an aggressive social media and advertising campaign. I wrote about its kitschy Super Bowl debut and why it was an ill-advised marketing strategy at the time. I mean, why splurge tens of millions of dollars just to win the second-to-worst Super Bowl ad of the year?

Read the full piece inbelow:

Pekingnology

Op-Ed: “Billionaire” Splurge: Temu’s Super Bowl Debut

Super Bowl, the culmination of America's favorite sport, had an unexpected advertiser this year. Temu, Chinese e-commerce juggernaut Pinduoduo's overseas e-commerce platform, ran two 30-second commercials during the Super Bowl with the theme "Shop Like a Billionaire." This year a 30-second ad costs roughly $7 million. What exactly did Temu want and get …

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3 years ago · 7 likes · 2 comments · Ivy Yang

Since then, Temu has barely stayed out of the spotlight and dragged its archenemy Shein into it, too (not that it really needed the help).

Untangling the Shein and Temu Background Story

The U.S.-China Economic and Security Review Commission penned a report titled "Shein, Temu, and Chinese e-commerce: data risks, sourcing violations, and trade loopholes." A coalition is trying to ban Shein completely in th US.

There’s infighting, too: Shein and Temu are suing each other and airing their dirty laundry in a full-on legal showdown. Shein sued Temu over IP infringement; Temu is returning the favor and accusing Shein of violating US antitrust law.

Shein has more to lose in this battle. Temu’s parent company, , is already a U.S.-listed company and valued at more than 100 billion USD. PDD has the deep pockets to take some risks: it has a robust free cash flow and has been steadily taking market share from . PDD dutifully subsidizes the prodigal son’s overseas adventures, even as Temu burns close to $1 billion dollars a year.

On the other hand, Shein is still private and has been talking about going public for some time. Its Chinese founder, Yangtian Xu (许仰天), even secured permanent residency status in Singapore, likely to smooth the path to a potential listing. Yet, even with efforts to mitigate looming "China risks,” investor sentiment remains cautious.

Shein’s current valuation of $66 billion is down from a peak of $100 billion last year. The media's unyielding scrutiny could further tarnish Shein's image among potential backers.

The competition with Temu is adding to its woes. Temu’s legal complaint against Shein reads like an expose of Shein’s business practices and is giving the public an insider look into how cutthroat the e-commerce zero-sum game really is :

Specifically, Shein has implemented at least four strategies geared toward stifling competition from Temu (collectively, the “Scheme”):

(a) Shein forces manufacturers to enter into adhesion agreements that effectively create exclusive supplier relationships with Shein and threatens manufacturers with onerous fines and penalties if they supply product to Temu;

(b) Shein forces manufacturers to sign loyalty oaths certifying that they will not do business with Temu, but which are silent as to any other competitor or potential competitor;

(c) Shein issues public penalty notices and imposes extrajudicial fines on disobedient manufacturers for supplying product to Temu, practices that simultaneously punish manufacturers that dare to do business with Shein’s closest competitor and warns other manufacturers that Shein will not tolerate any manufacturer’s doing business with Temu; and

(d) Shein sends numerous false notices of copyright infringement to Temu in order to disrupt sales of products that are offered for sale on Temu. These notices are almost always aimed at products that Temu sells at lower prices than Shein charges for identical or similar products.

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The Reputation Risk

The tangible consequence of these allegations is a reputational hit for Shein, Temu, and, by association, PDD. While the complaint above highlights tried-and-true e-commerce tactics in China — for example, Alibaba's forced brands to sign exclusivity agreements — elevating the dispute to the US courts signifies an escalation to an all-out confrontation.

Both Temu and Shein are transitioning from a defensive communications approach to a more proactive one. Since the spring of this year, when WSJ and The Guardian interviewed me about the allure of Chinese apps, Temu and Shein have ramped up their external communication offensive.

Here is a brief analysis of one of Temu and Shein’s corporate branding and PR strategies:

Temu began emphasizing its Boston-based, non-Chinese identity in its public and investor communications, distancing itself from PDD. The Washington Post wrote about it (and I’m grateful that it attributed to my thread that prompted the closer look).

Notably, even in its recent legal complaint against Shein, there's no reference to PDD, just a hint at it to highlight Temu’s distinctive competitive advantages.

“Though new to the U.S., Temu’s affiliated companies are some of the most successful online retailers. Shein is well aware that Temu has the experience and ability to identify and source from the most efficient apparel manufacturers and build an agile business model that offers an ever-evolving product line to lure customers to its platform.”

Shein is doing the same. In its fact sheet, China is mentioned just once (“Our suppliers are based in regions including Brazil, Southern China and Turkey”), and its headquarter is in Singapore.

But…

…everyone already knows Shein and Temu’s Chinese connection. Both have gotten so much press in the past couple of month, and the campaign to shut down Shein is predicated on its China affiliations. The intense scrutiny makes denial seem pointless, and rejecting its Chineseness could create issues with the Chinese government down the road.

The PR Remedy

In corporate reputation, as it is in sports, one chooses to either play offense or defense. The best way to defend oneself in the world of ideas is to shape those ideas.

Having said this, the strategy is not to assume one or three positive stories will change the game in the short run. Re-educating stakeholders and creating a foundation for understanding will take time and patience.

Shein learned this the hard way when it received backlash from sending influencers on Shein factory tours in China. The initial plan was to put out positive content for the Shein 101 initiative, an Instagram series to change the perception of the company.

Shein’s PR offensive, using influencers to rebut allegations of forced labor and poor working conditions, ended as an even bigger story of outcry against the “staged” nature of the trip.

In a statement, Shein said the trip “reflects one way in which we are listening to feedback.”

“Their social media videos and commentary are authentic, and we respect and stand by each influencer’s perspective and voice on their experience,” the company added.

The backlash was so severe that Shein had to roll out an executive for damage control, which included a likely embargoed, yet still critical, interview with the Times. The "We are not perfect, but doing our best" approach might not satisfy everyone, notably the influencers who faced cyberbullying. However, it's preferable to remaining silent.

For enduring success, Shein, Temu, and indeed all Chinese companies going global must directly address doubts, own up to the facts, put in place real IP protection program (no amount of PR can replace this), and integrate into local cultures and business norms.

And that’s all there is to it.