Good evening. From its blockbuster Nasdaq IPO to its wild fraud scandal to its miraculous comeback, Luckin's story has always been full of drama. But as our cover story this week shows, perhaps the juiciest details are playing out now, with the story of Luckin's return complicated by the rivalry between Luckin's ousted and current management teams. Indeed, the coffee wars in China are entering a decisive year.
Elsewhere, we have infographics on Tesla's supply chain in China, including companies Washington might find concerning; an interview with Barry Naughton on the state of Xi Jinping's economy; a reported article on the evolution of Washington's Chinese vernacular; and an opinion piece by Stephen Roach on China's struggles with a consumer society. If you are not already a paid subscriber to The threadplease register here.
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The great battle of the beers
After its accounting scandal that shook the Nasdaq in 2020, Luckin Coffee made a legendary comeback, even surpassing Starbucks in China in terms of revenue and number of stores. But tensions between Luckin's current and deposed executives have resulted in a near-clone, Cotti Coffee, as well as a brutal price war that threatens to doom Luckin's rebound and undermine China's thriving drinks scene. Rachel Cheung reports.
Overview: Tesla's China Supply Chain Risks
Tesla's local supply chain is vast and, as Noah Berman reports this week, contains ties to companies sanctioned by the United States.
A Q&A session with Barry Naughton
Barry Naughton, So Kwan Lok Chair of Chinese International Affairs at UC San Diego, is one of the world's leading experts on the Chinese economy and its transformation over the past half-century. His manual, The Chinese economy: transitions and growthhas long been a must-read for Chinese students; more recently, he coined the term Grand Steerage to describe how Xi Jinping's government attempts to shape the country's development. In this week's interview with Andrew Peaple, he discusses Beijing's current recovery efforts, the strengths and weaknesses of Xi's vision for China, and the long-term problems that are accumulating.
Barry Naughton
Illustration by Lauren Crow
Does Washington have Chinese groupthink?
US foreign policy makers are talking tough on China. But are they free to say what they really think? Eliot Chen reports on a new article on the China debate.
China's struggles with a consumer society
The tightening of government controls on Chinese society over the past decade is particularly at odds with its goal of boosting consumption, argues Stephen Roach in this week's editorial.
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