As the Tokyo Olympics draw to a close, all eyes are now on the Beijing Winter Games

After successfully containing the spread of the virus, China is now grappling with its worst outbreak in more than a year, with the highly contagious Delta variant spreading to half of its provinces. The last thing Chinese leaders will want to see is that the Winter Olympics turn into a massive event.

Speaking to CNN, Jin Dongyan, a virologist at the University of Hong Kong, said the success of the Tokyo Olympics shows that with careful planning and strict security measures, an international sporting event will be held. during the pandemic is “very doable”.

The 2022 Winter Games will be spread over three main areas – in the capital Beijing, as well as Yanqing and Zhangjiakou in the northwest – connected by a high-speed train.

Jin suggested that Beijing could build on the experience of Tokyo organizers, by creating a bubble around key Olympic venues, to prevent the spread of Covid-19.

But while the Tokyo Games went to great lengths to protect athletes from catching Covid-19, Beijing will likely want to prevent the coronavirus from spreading outward, from the Olympic bubble to local communities.

For more than a year, China has relied on a rigorous “zero tolerance” strategy to quickly eradicate internal flare-ups. It has also closed its borders to most foreigners. The few people allowed in must undergo two to three weeks of mandatory quarantine at the hotel.

The reopening of the country’s borders for the first time in two years, even with limited capacity, will therefore pose a major logistical challenge, especially in terms of accommodation for athletes.

Jin, the expert from the University of Hong Kong, said the current long quarantine requirement was not viable for the Olympics as few athletes would be willing to be trapped in a hotel room for three weeks before their events.

There is also the uncertainty of the live audience. The Tokyo Games banned foreign and local spectators. But the International Olympic Committee said last month that the Beijing Games would need spectators to be successful.

If Beijing allows domestic spectators, will they also be forced to live temporarily in the Olympic bubble – and how could Beijing facilitate the isolation of tens of thousands, potentially for several weeks?

Despite the great uncertainty surrounding these issues, public expectations for the Winter Games are already high in China. At the closing ceremony of the Tokyo Games on Sunday, hashtags about the Beijing Olympics were among the hottest topics on Weibo, the strictly censored Chinese version of Twitter, attracting hundreds of millions of views.

Others, on the other hand, are worried about the spread of Covid-19 through the Games, as well as the strict travel restrictions that are likely to be put in place.

In part because of the “zero Covid” strategy, Chinese public tolerance for infections remains extremely low. In recent weeks, some prominent Chinese public health experts have called for a change in approach for the country to learn to coexist with the coronavirus, following the path increasingly taken by other countries with relatively high vaccination rates. .

In the article, Gao Qiang, the former minister, accused the United States and the United Kingdom of “ignoring the health and safety of people” and causing a resurgence of epidemics by easing the Covid restrictions.

“This is a failure of epidemic prevention decision-making caused by the flaws in the political systems of countries like the United States and the United Kingdom, as well as an inevitable result of their promotion. of individualistic values, ”Gao wrote.

Photo of the day

A new 88,000 square meter (947,224 square foot) terminal opened at Lhasa Gonggar Airport in Tibet on Saturday. The airport is Tibet’s largest aviation hub, as well as one of the highest airports in the world. The new terminal is expected to “dramatically boost passenger and freight transport” and help the vast Himalayan region become a “global logistics hub for South Asia,” reported the Global Times, a state-owned company.

The risky loophole that Chinese companies have been using for years

How it works? A VIE uses two entities. The first is a shell company based somewhere outside of China, usually in the Cayman Islands. The second is a Chinese company that holds the necessary licenses to do business in the country. The two entities are linked by a series of contracts.

This means that when foreign investors buy shares of a company that uses a VIE, they buy shares of the foreign shell company, not the company in China.

Didi uses this structure, along with several other large companies, including Alibaba, Pinduoduo, and JD.com. The arrangement is explained in Didi’s flyer, but not everyone is aware of it.

Chinese companies have used this structure for decades because foreign investors are not really allowed to own stakes in local companies in sectors such as technology. Yet Chinese companies want to raise funds abroad.

Creating an offshore holding company that goes public helps Chinese companies to circumvent these rules. Wall Street and US regulators have long been on board with the deal, giving US investors easy exposure to the dynamic companies that power the world’s second-largest economy.

But there are huge risks. First, it is not clear that the contracts that give foreign investors the right to the economic benefits produced by Chinese companies are enforceable. It is also not clear whether VIEs are legal under Chinese law.

Here is what Didi says about the arrangement: Didi says in his prospectus that his legal counsel considers that his VIE “does not violate the mandatory provisions of the applicable PRC [Chinese] laws “and that its contracts are” valid and binding “.

But it also included a warning to potential investors.

“We have further been informed by our PRC legal advisor that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations,” Didi warned. “The PRC government may ultimately take a stand contrary to the opinion of our PRC legal adviser.”

Think of the problem this way: Chinese companies are basically telling Beijing that they are 100% owned by Chinese citizens. Meanwhile, the same companies tell foreign shareholders that they are the real owners.

Now, there are signs that Chinese and US regulators are becoming uncomfortable with VIEs. Investors, beware.

– By Charles Riley

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