Finally after months of hard work from many people, in front and behind the scene, the ICANN board finally resolved:

* Therefore, it is RESOLVED, (2010.04.22.10), that CNNIC be notified that the .中国 (xn--fiqs8S) and .中國 (xn--fiqz9S) IDN ccTLD request has completed the Fast Track String Evaluation and that they may enter the String Delegation step in the Fast Track Process, using the standard IANA ccTLD delegation function, and that delegation is contingent on completion of the IANA process criteria and publication of CNNIC’s detailed Implementation Plan to be finalized in consultation with ICANN.

* Therefore, it is RESOLVED, (2010.04.22.11), that TWNIC be notified that .台灣 (xn--kpry57d) and .台湾 (xn--kprw13d) IDN ccTLD request has completed the Fast Track String Evaluation and that they may enter the String Delegation step in the Fast Track Process, using the standard IANA ccTLD delegation function, and that delegation is contingent on completion of the IANA process criteria and publication of TWNIC’s detailed Implementation Plan to be finalized in consultation with ICANN.

Cheers!!!!

US strategy towards China has been particularly confusing to many people. It is strange that the two major economic power of the world today would taunt each another in so many different issues. This UK Guardian article nicely summarized the situation.

This dysfunctional, agitating approach to Sino-US negotiations and communications only continues to erode the relationship between the two countries, which has already been weakened recently as a result of US comments over internet censorship and the sale of arms to Taiwan. This should not become the normal way for the two nations to engage, particularly when it comes to bilateral issues.

One obvious difference between US and China is the ‘Culture Differences’. ‘Culture differences’ is often used to explain the disagreement but seldom really understood. The background and construct of the political system between the two country couldn’t be greater, that leads to misunderstanding and mistrust.

Let me give two examples:

Read the rest of this entry »

Asia politic is something close to me that I followed quite closely although not something I often blog about.

Yesterday, I tweet: *doh* When would US clueless hardliner learn how to deal with #China? RT @CNBCtopStories: Knocking Down the China Myth http://bit.ly/bda3m.

I am not surprised that Tony Fratto, ex-Deputy Assistant to the President and Deputy Press Secretary for the Bush Administration would take a hardliner view on China. He is absolutely right that China did not buy US debt out of altruism and it is in China self interest to continue to do so.

For those interested, one should read the excellent article by Paul Krugman China Dollar Trap.

But what he is wrong is the attitude with the assumption that US is in the position of strength in the negotiation. Squandered by the 8 years of Bush administration, in global goodwill as well as economy strength, US has to come to terms with the new reality.

Still, people in Washington continue to believe that US has the power to command or the very least, to bend China to her will, as we witness in the latest saga with the North Korea.

Washington’s think tanks are concerned with North Korea’s nuclear missile test, as Defense Secretary Robert Gates “raised the idea of a tougher approach toward North Korea’s recent nuclear test … including the prospect of building up United States military forces in the region should six-nation diplomatic talks with North Korea fail” (JS: ST reported Gates does not plan to build up American troops in the region…Hmm…)

At the same time, they are appealing publicly (and privately) that China should do more in the saga, and it is not in the interest for China and US and China must stand up to North Korea togther.

Promfret got it absolutely right that when he say “First, there’s a silly assumption in Washington that our interests (no nukes in North Korea) are the same as China’s. But they’re not. China’s first interest in North Korea is making sure the Kim regime doesn’t collapse. China’s second interest? Making sure the Kim regime doesn’t collapse. From Beijing’s perspective, nukes in North Korea rank somewhere around 10th.”

Asian mentality on society values stability above anything else. I quote Kishore Mahbubani “An imperfect government that commits some human rights violations is better then no government, in many societies”.

China emphasis of Harmonious society is a broader reflection of that philosophy. Western interpret that as working towards a better society of equality, freedom and prosperity. Chinese understood it as tolerance for imperfection in society and when inequality occurs, look at the cup half-filled not half-empty.

North Korea having nukes? Okay, bad idea but chances that North Korea will unleash it in China is next to zero. A unstable North Korea is far more dangerous to China. A known devil is better than an unknown friend.

So Washington’s think tank who really think China will do anything to step into the affair right now is just dreaming in their ivory tower. And as I noted early, US is no longer in the position of strength to bend China to its will.

China needs US as much as US needs China, economically. One is a producer, one is a buyer. One is a lender, and the other is a debtor. The two economy is tightly coupled and therefore, one yield to the other not because of differences in power but in the mutual interest of both party.

US may have greater military power over China as a whole. But with a war in middle east, and a mess-up economy, China know US cannot sustain a (cold) war in the Far East. US “threats” of greater US military presence is at best laughable.

Japan, who is traditionally US ally in this region, is also mindful of China rising power is also evaluating their position. Japan is honestly concerned over North Korea but unfortunately has little clot in the matter beyond making motherhood statements.

It is left to South Korea who feel the immediate threat to flex its military muscle with US support. North Korea immediately responded that South is nearly an act of war.

Perhaps that’s what Washington has in mind all along. Not exactly what I like to see but perhaps that’s what it takes to bring China to do something.

* Also read the excellent article by Eric Anderson.

I spend most of my time this year in China – My family has made an important decision to move to China. Things has being crazy for the last couple of months with the logistics but we finally have our first Christmas over here.

The decision is a combination of my work, but more importantly how I see the world developed in the next decade or two. Out of the 4 fastest growing economy — Brazil, Russia, India, China (BRIC), I think I can fit into China.

One thing I have certainly improved is my Chinese since moving over here, or at least my wife (who is a Chinese teacher) say so. Nevertheless, I think the depth of Chinese I can command is still pretty far from norm conversation.

For example, I was having tea in Beijing several weeks ago when a friend asked me why I could not get along with another certain mutual person. I struggled to find the right words to expressed in Chinese. When she got it, she just said “君子合而不同小人同而不合*”.

Just 12 words explained what I tried to do in the last 5 mins. Chinese is an amazing language — it contain far more “information” per word than English if you know how to use it properly.

* “君子合而不同小人同而不合” is a saying by an ancient Chinese philosopher known as Confucius record in the “The Analect”.

I had a crazy month traveling across Shanghai, Hong Kong, New York, Chicago, Seattle, Palo Alto, Los Angeles and finally back in Singapore. It was great trip, mostly business but in between some personal stuff, catching up with ex-boss, old friends and making new ones. A great evening with Marc Canter and his family (love the Canter’s song! :-)

It was also a great time traveling in US as a Chinese. Taxi drivers rave non-stop about the amazing Chinese Olympic openings and for the first time, see China differently. (Well, I wasn’t born in China but still I am a Chinese :-)

On my way back to Singapore, AIMS published the recommendation on the changes to media policy in Singapore. I was one of the stakeholder they consulted early in the process so I got swamp by reporters who got an early preview of the document. Unfortunately, I didn’t get to read the final version before them so I couldn’t really answer most of their questions. Anyway, suffice to say, I was happy with the progress. It is a much bigger step in media liberalization that I expected.

So I was back in Singapore and I met a fund manager yesterday. She asked an interesting question:

“Why are there so many P2P companies in China and not in US?”

It is worthy to reflect on that question because in some ways it is true. In US, we have bittorrent.com but other than that, most P2P applications have pretty much gone. Napster, Kazaa, etc, gone.

Wait, what about Skype? Firstly, Skype is not US company. Secondly, Skype P2P is actually very simple – connect A to B, both behind NAT, via a supernode C. In fact, their Kazaa background has more complexity than Skype architecture.

Now compared it to China, the land of P2P Streaming with PPLive, PPStream and UUSee. There are numerous P2P downloads the most famous being Xunlei (backed by Google). And all of them are very successful : PPLive has over 100M installation based, 34M active users monthly.

So what happened?

I think it has to go back to the early 2000 when music industry decided to clamp down Napster. The defining moment was when Napster was shutdown by the court after years of lawsuit. Since then, anyone with a bizplan that even has the word “P2P” is unlikely to get funded. Innovation in P2P basically stop dead, with the exception of bittorrent and Skype, but both become relatively successful without VC backings.

On the other hand, P2P has no such stigma in China. Investments in P2P continues to flourish and today China can claim to have one of the most advance P2P technology in the world. To the extend that when people are finally trying to do video these days, people are looking towards China and see how video are being delivered in the number 1 broadband country in the world by number of subscribers but probably one of the worst by quality.

Look at the Olympics numbers. PPLive alone has more peak concurrent viewers (1.6M) than NBC (600k) and BBC (200k) add together.

There is a lesson to be learned: The unintended consequences of slapping a “evil” label on a technology where in reality, technology is neither good or evil, but rather the use of it.

Disclosure: I am associated with PPLive.

Gen Kanai left a comment for me to read this entry by Paul Denlinger. Paul who spent the last 20 years in China said:
“For many Chinese, “the law” is whatever the Chinese government says it is.”

The law in China is complex. They are subjected to interpretations by officers, at state, at provincials and at local levels. Most Chinese businessman just follow the norm. For example, there are declarations/tax in China on employment for healthcare and accounting. By law, you have to declare “四钱一金” but most business (esp in F&B) outright ignore it.

The law in China is non-existence, vague or worst, conflict with each another. I spent the last week with lawyers and officials in Beijing talking about LP/GP fund structure. The answer I got includes “No way”, “No but …”, “yes but …”, “Yes”, “never done before so no one knows your tax liability”.

The law in China is constantly changing. The story on Regulation 56 is an example, where one day the government decided that all IP/Mobile TV needs to be state-owned or controlled and a week later, the decision was “clarified”. Just a few days ago, they shutdown a few more IPTV sites and reprimanded others.

The law is whatever the Chinese government says it is. We invested in one of the largest and oldest e-Payment company in Beijing 2 years ago. One of the bright spot is the online lottery site they were about to launch with the government lottery (a US$20b/year monopoly business). The site was launch last year and the revenue start rolling in until suddenly the government declared all online lottery to be halt 2 months back. Ouch.

It is no wonder Chinese businessman don’t bother with lawyers. Whereas most lawyers will tell you the most important part of the contract is what happen when things go wrong, Chinese focus on what happen when things go right. If it go wrong, no contract will save the deal anyway.

For the same reasons above, these are also why American business don’t do well competing with the Chinese business in China. Look at ebay, yahoo, google vs their local competitors alibaba, sina and baidu. The latter is still the number 1 search engine China that provide mp3 search that google will not do and thus not likely to overtake baidu anytime soon.

“But baidu is breaking the law!”, you say. Okay, they break law in which country?

Several years ago, when I was doing internationalized domain names, we meet up many officials trying to figure out how we can conduct our business legally. They are always polite but we never got our answer until one of them was kind enough to say “Just go do it and stop asking us. If you ask, we have to say no”.

But thats not good enough for our shareholders. Or any non-Chinese shareholders for that matter. I can understand why David don’t feel like investing in China.

Thats why American companies will keep asking, working with the lawyers to do the “right thing” and get no where. On the other hand, Chinese companies will just go on and do it anyway until they are told not to.

1. A lots of Chinese made money from property. More specifically, made money from the property boom (around 2002).

2. A early success of foreign investments, more money continue to flow into China. While 10M fund is huge in 2000, 100M is considered very small by 2006.

3. (1) & (2) lead to lots of money chasing deals. And when there are good deals, they don’t even need to go out of China to find the money, and they get very good deal from investors.

If you are an investor outside China, chances you don’t get to see much good deals coming out of China since 2007.

4. Rumors say that the Chinese government will further restrict foreign investments via the usual SPV structure by the end of the year. Setup a RMB fund as soon as possible.

5. Preferred market to IPO for Chinese companies are Shanghai A-list, NASDAQ and Hong Kong. After that, they will consider AIMS before Singapore, if ever.

Singapore has a bad reputation of giving low valuation (compared to other markets), low liquidity, take too long and cost too much.

6. Just US$100k will get you priority banking in China, which also applicable worldwide.

7. RMB 30 (US$4) for a Starbuck coffee is normal. But taken into the context where Chinese pays RMB 2000-3000 on average, a RMB 30 Starbuck coffee is like drinking a SG$30 coffee for me.

Surprisingly, every Starbuck I being in the last few days are always pack, mostly Chinese.

8. Starbuck’s Wifi is excellent. It is free and it works!

1. The CCTV, particular CCTV 9 (English channel), is broadcasting non-stop on the Tibet’s riot, showing videos of how the monks are part-taking in riots, the attacks on civilians and interviews of causalities.

2. There is freaking a lot of regulations on investments in China, with many ways to structure the deal. If not done properly, the exits possibilities may be limited.

Gosh, I did deals here without knowing how challenging those are before! The companies has often claims those are being taken care of. Got to learn more about those.

3. There are four kind of RMB funds, two of which applies for overseas money. Although structure is there, no one use it because the tax implications is unknown. Even tax lawyers do not understand the implications. No one wants to be the guinea pig.

4. Avoid representative office structure. Shutting it down later is a hassle.

1. Plan your meetings so you don’t zip-zap across the city. If I have just swap one meeting, I would save so much time.

2. Hipihi is preparing for their launch. Good luck!

3. 官联 pervasive and important in Beijing.

4. The restructuring of China telecommunication market is well-underway. By the end of the year, we will see remaining 3 operators: China Mobile, China Telecom and China Unicom. China Mobile may become the largest fixed-mobile operate.

5. Related to (4) is the 3 new 3G licenses. But it seem unlikely it will happen in 2008. They longer they wait, the better it is for TD-SCDMA – more time to get ready for them.

6. There is no doubt TD-SCDMA will be mandated; The only question left is whether WCDMA and CDMA2000 is allowed.

7. To verify the following history of Xinwei:
– Xinwei SCDMA v3 => 大灵通
– A group from Xinwei doing SCDMA v3 split off to Datang to form the group that did TD-SCDMA.
– SCDMA v4 aka MC-CDMA => Navini
– SCDMA v5 aka CS-OFDMA => claim to be able to do 4.8bits/Hz

8. CS-OFDMA is not to be confused with OFDMA. It is not compatible. CS-OFDMA claims it is able to do 4.8bits/Hz! The technology seem sound tho based on what Dr Xu explained to me.

9. Interesting story to Regulation 56.

Due to a scandal involved some popular personality in China, that leads to the news blackout on traditional media, that leads to the news being carried over Internet, that leads to Regulation 59 being issued in haste along the line “All Internet/Mobile TV must be owned or controlled by Government or shutdown”.

That leads to a panic among the youtube-clones and p2p TV in China that leads to a quiet “clarification” to Regulation 56 a month later that say “All existing operation may control. It will only be applied to the newcomer”.

So from a death sentence, the youtube-clones nows find themselves in a nice little bubble and not need to worry about any further competitions.

10. Speaking of youtube-clones, the market leaders have emerged: tudou 土豆网 and youku 优酷网.