China’s AI Stock Bubble Has Burst

Soccer star Kylian Mbappe just got a negative Chinese social credit score. China's AI stock bubble has burst. And Kim Jong-un rises from the dead. That and more on this week's China news headlines. Welcome to China Uncensored, I'm Chris Chappell. Want your very own for legal reasons I can't call it Lego Tank Man set made of genuine Lego bricks Well, act now, because in just a few days it will be gone, Lego bricks? gone, gone forever. You only have till October 31st, Halloween. Missing this deal is truly terrifying. Put it on your desk during Zoom calls. Show your family who you really love, LEGO Tank Man. Just click the link in the pinned comment below to find out how to get one before time runs out. French soccer star Kylian Mbappe just earned a Chinese social credit score of negative 100 billion. This week, Mbappe lost three Chinese sponsors for calling Mao Zedong a Chinese dictator. But the mainstream media are getting the story all wrong. They're framing it like he called Mao a dictator, and it angered China, and now there are consequences. That's not what's going on. Actually, calling Mao a dictator is not even really what he did. I'll show you. But first, a little context. For years, fans have compared Mbappe to various dictators with memes like these. It's a running joke about how much power he seems to have over the teams and clubs he plays for. In the video, Mbappe responds to a reporter's question about the funniest meme. And he says this. As you saw, Mbappé didn't name Mao directly, he just said a Chinese dictator. And the video shows this meme. And for that, Mbappé has been big time cancelled in China. Beverage maker Dongpeng has removed his face from the Chinese drinks, which were everywhere. Time to repaint all the buses, too. Man, he went from being on the side of a bus to being thrown under it. Dairy company Mengniu has taken away Mbappe's yogurt. I've heard of culture revolutions, but this is ridiculous. And Milkground, maker of barely edible cheese products, has removed Mbappe from their ads. I consider this a form of lactose intolerance. On top of that, Chinese state television suspended all broadcasts of future games featuring his soccer league, La Liga. That'll set them back millions of dollars a year. And my favorite Chinese state-run media, the Global Times, says Chinese netizens called on Mbappe to apologize for his remarks. Because his remarks hurt the feelings of the Chinese people. Which specific remarks hurt the feelings of the Chinese people? The article doesn't say. Because, you know, they actually quoted Mbappé using the words Chinese dictator. The Global Times might get cancelled, too. Anyway, Mbappé did apologize. His soccer team Real Madrid also apologized to China. Even the president of the entire soccer league, La Liga, apologized to China. Translated from French, their apologies read, Please don't take our money, Mr. Dictator. I mean, super nice forgiving leader guy. Wow, France surrendering. Who would have thought? Not that those apologies will actually get those Chinese commercial deals back. They're gone. At least for a while. How do I know? Well, a similar CCP cancellation happened in 2019. There was a huge backlash from the CCP after then-Houston Rockets general manager Daryl Morey tweeted support for Hong Kong protesters. Daryl Morey got cancelled. NBA brand deals in China got cancelled. Chinese broadcasts of NBA games were cancelled. The rights of Hong Kongers were also cancelled. It took about a year before the NBA finally returned to Chinese state television. And as for the rights of Hong Kongers, well… All this is to say the CCP's punishment of Mbappe this week was swift and severe, especially for a comment that wasn't specifically intended as a criticism of China. And that's the point. Here's what the mainstream media are getting wrong. Everyone in China, from the common people to the leadership, everyone knows Mao Zedong was a dictator. Mao killed tens of millions of China's own people during peacetime. It's not like people in China are actually offended by what Mbappe said. So when the Western media says his comments anger Chinese fans, that's nonsense. Now, yes, we're seeing things like his face blocked out on subway ads, or people demonstrating their nationalism by burning his jersey or stomping on his face. But Chinese people have been through this kind of political campaign before, where the state media tells them to hate someone or some group. I have my doubts that many people in China really care that some French soccer player made a reference to something that's true. So if the people and the CCP are not really upset, then what's this all about? It's about control. The CCP is sending a message that no one, anywhere in the world, is allowed to criticize anything about China. Even accidentally while commenting on memes. This way, Western companies and sports teams do the censorship themselves by telling everyone who works for them not to criticize China. And when they do this, the CCP wins. My advice? Don't give in. Pull your business out of China. And you won't be in this situation. China's AI stock bubble has burst! What a surprise. I mean, who'd have thunk? After all, it's not like the CCP told citizens to put money in the stock market, specifically AI companies. Or like those companies had astronomical price-to-earning ratios. Or like their products kind of sucked. How could all that possibly lead to a crash? According to Reuters, China's Star 50 index of AI and chip stocks has crashed about 40% in less than four months. Those stocks have lost about $480 billion in market value. That's almost two Mark Zuckerbergs. Which is what his scientists say every time they narrowly fail to clone him. Take Unitree. You've seen their robots dancing on Chinese state television and falling on social media. When Unitree went public just two months ago, so many small investors wanted in that there were 8,000 buyers for every share. Now the stock has been cut in half. And it's not just Unitree. According to Goldman Sachs, AI stocks make up 42% of China's market value and 57% of trading. So like half of China's stock market is is AI companies. That's a lot of nest eggs in one basket. That's a good thing, right? Reuters spoke to one small business owner in Hainan. He said he bought Unitree shares because it felt like the government was backing them. Now, he and his friends have lost a huge amount of money. In the 2010s, the CCP encouraged Chinese families to put their savings into apartments. That market crashed in 2021 and never recovered. Then the CCP told people to invest in AI stocks. Now, those have crashed. At this point, the safest investment in China might be whatever the CCP is telling people not to do. So, invest in civil rights in Hong Kong, I guess? Hey, remember when the internet was flipping out last week about how North Korean leader Kim Jong-un was probably dead? Well, he's not dead. Rest in peace, Kim Jong-un. Rest in peace, rumors. In fact, on Saturday, Kim made a surprise visit to China. Surprise, as in it was not announced to the public in advance. Yeah, he basically pulled a Kramer. Also, it was a surprise in the sense of the rumors of my death were greatly exaggerated. Which, if you watched my episode last week, I told you so! Here's the thing. I'm gonna go out on a limb here and say that Kim Jong-un is probably not dead. Just like all the times Xi Jinping was not dead, despite those rumors. For my next bold prediction, I'm gonna guess the sun is going to set in the west tonight. But Kim didn't visit Beijing or anything. He just popped over to the border town of Dandong, presumably looking for a snack. He also laid flowers at the monument to what's called China's Korean War Intervention, which is a celebration of that time Chinese and North Korean soldiers worked together in harmony to kill 36,000 American troops. Oh, memories. And he visited a bus factory. Exciting, I know. But according to the South China Morning Post, the visit appears to align closely with Kim's push to electrify and upgrade North Korea's bus system. Mbappe might be wondering, can I be on the side of those buses? Kim, sadly, did not meet with Xi Jinping, who was busy purging people ahead of the 5th plenum this week. But he did meet with lower-level officials, including CPPCC Chair Wang Huning. And as he left China, he was greeted by a gaggle of delighted children who just happened to be there with flags, wearing the exact same thing. Great trip. And also, not dead. For now, assuming he lays off all the Dandong snacks. And finally, some good news, I hope. The U.S. is closing a visa-free backdoor program for tourists from mainland China. It involves a U.S. territory called the Commonwealth of the Northern Mariana Islands, or CNMI. It's the closest part of the U.S. to China. The main islands are Saipan and Tinian. The Department of Homeland Security says it's worried about Chinese intelligence gathering on sensitive U.S. defense sites, including on Tinian, where the U.S. is restoring an old air base. These sites are critical for defense if China tries to invade Taiwan. DHS also cites Chinese people using visa-free visits to CNMI to illegally gain access to other parts of the US, and using CNMI for money laundering, and also birth tourism. So why was there ever a visa-free scheme in CNMI? The answer to that is corruption. In this episode from June, I talked about how CNMI has been embroiled in a series of scandals involving a corruption investigation into the former governor, a Chinese-run casino laundering billions of dollars, a retired gigolo launching a stablecoin, and you know what? Just watch that episode. That's easier that way. The link is below. The US has been slowly dealing with that corruption, but as friend of the show Cleo Pascal points out, CNMI congressional representative Kimberly King-Hines is lobbying to restore visa-free access despite it being used for espionage. And so on. She says she cares about Chinese tourism money. Presumably she cares about that more than the safety and security of her own constituents. And finally, What are you doing? You know how much time has passed since this episode started? You're now even closer to the deadline to get your very own, for legal reasons I can't call it, LEGO Tank Man set. Click this button here or the link below to find out how you can get one. But remember, Halloween is the deadline. Once again, I'm Chris Chappell. See you next time.