Dearest CTS readers,
I’m adding something new to Calling the Shots.
We can look at China from so many angles, and plenty of us do: the culture, the human stories, the policy debates, and of course the geopolitics. But how is the “China factor” actually handled at a US university with thousands of Chinese students, shifting visa policy, and questions about trust in its own faculty? Or at a US consumer goods company competing head-on with a Chinese one? How do decision makers settle on a stance, or at least understand and explain the situation to their stakeholders, and ideally have a contingency plan for when it reaches them? Most don’t, and US companies and institutions find out the hard way.
So this is the CTS Signal Tracker. Every week, a few China stories, chosen on three criteria: people are actively talking about it, it has a China factor, and it affects US institutions in a material way. For each one: why it matters, what happened, and a pithy CTS take.
This is the first one.
This week
Ramp’s investors pushed Congress to investigate rival Airwallex over its China ties.
Microsoft offered buyouts to 60,000 employees, and it set off fears in China about AI and jobs.
Cohere found Alibaba’s Qwen model trying to upload a file to a server in Beijing.
The Pentagon says 30 US universities hosted rebranded Confucius Institutes.
1. Ramp’s investors pushed Congress to investigate rival Airwallex over its China ties
Why it matters: A business rivalry between two payments companies has become a national-security question in Washington. Companies with Chinese founders or investors now have to plan for scrutiny from competitors and regulators.
What happened: Airwallex is a cross-border payments company founded in Melbourne by Chinese-born entrepreneur Jack Zhang, now valued at about $12 billion and processing roughly $100 billion a year for 40,000 US businesses. Ramp is a New York expense-management company that competes with it. The Information reported this week that two Ramp investors, Joe Lonsdale of 8VC and Keith Rabois of Khosla Ventures, pushed lawmakers to probe Airwallex’s China ties after a partnership between the two companies fell apart. Rabois first called Airwallex a “Chinese backdoor” on X last December. Sen. Tom Cotton, R-Ark., has since sent two letters, the second asking the Treasury Department to review Airwallex’s Chinese investors and seek divestment. Airwallex says US customer data is stored in the US and that Tencent owns less than 10%. (The Information, Oct 23, via Techmeme)
Calling the shot: No one has yet shown what data separation really looks like, or what price a company can pay for it. TikTok spent a reported $1.5 billion on Project Texas, moved US user data onto Oracle’s servers with outside monitors, and Congress passed the divest-or-ban law anyway. A letter saying “our US data stays in the US” will not end the conversation. Airwallex’s 40,000 US customers are going to be the ones asking.
2. Evergrande’s liquidators want $2 million back from Harvard
Why it matters: This appears to be the first time a collapsed Chinese company has gone to court over a gift to a US university. Over the past decade, Chinese and Chinese-affiliated donors have given generously to American universities, hospitals, and museums. As more of those donors run into trouble at home, more of those gifts turn into questions.
What happened: China Evergrande Group, the property developer that defaulted on more than $300 billion of debt, is being wound down by liquidators from Alvarez & Marsal in Hong Kong. They are seeking a $2 million refund from a US university for part of a donation made in 2020. The Financial Times identified the university as Harvard and the gift as $14 million, made when Evergrande was months from default. After two and a half years, the liquidators have recovered about 1% of what creditors are owed. (Bloomberg Law)
Calling the shot: Two million dollars won’t hurt Harvard. The same claim can be made against a decade of gifts from Chinese property developers, tech founders and their foundations, and seven million here and twenty million there adds up, even for a large endowment. Nobody has drawn the boundary: how far back a liquidator can reach, whether a gift already spent counts, whether a US court will enforce a Hong Kong claim at all. Harvard is the first case, so whatever it does will be the reference point others are measured against.
3. Microsoft offered buyouts to 60,000 employees, and it set off fears in China about AI and jobs
Why it matters: A US company’s internal workforce decision was covered in China mainly as an AI-replacing-workers story, despite Microsoft saying it isn’t one. Microsoft’s China employees aren’t eligible for the offer, which raises its own question about what comes next for them.
What happened: On Oct 26 Microsoft announced a voluntary exit offer to about 60,000 employees, 27% of its 223,000-person workforce, in the US, Canada, India and the UK at vice president level and below. Microsoft says the program is about flexibility and does not reflect AI replacing workers; it plans to spend about $190 billion on capital expenditure this year, mostly on AI infrastructure. In China, The Paper ran it under the headline that AI spending is squeezing the payroll and called it the company’s third round of workforce cuts this year; Global Times carried Microsoft’s denial that AI is replacing workers and added that the severance on offer is standard, with no extra incentive.
Calling the shot: Microsoft’s explanation didn’t survive translation. Within a day, the Chinese coverage led with AI and treated the denial as a footnote. China isn’t among the four countries, so the story in China became what happens to Microsoft’s China staff next, and the 2014 layoff protests at Microsoft China are a recent enough memory. Any US company with a large China workforce should expect its next cost cut at home to be read the same way, whether or not China is in scope.