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Few things worry China’s elite more than getting their kids into Harvard

Economist - Thu, 07/11/2019 - 16:51

DIZZIED BY TRUMPIAN flip-flops and clashing policy announcements, China’s ruling classes no longer know quite what to expect from America—with one exception. Chinese elites appear sure that President Donald Trump’s America is willing to hurt their children, as part of a racist scheme to keep China down.

Outsiders might think it odd to spend time fretting about the roughly 360,000 Chinese youngsters studying in America, and whether they face tougher visa rules or unfair scrutiny from FBI agents hunting spies on college campuses. After all, tariffs worth billions of dollars are at stake in the trade war. Depending on what Mr Trump’s dealmaking gut tells him, America may or may not be bent on crushing Huawei, the telecommunications giant key to China’s hopes of becoming a technological superpower.

Yet when Chinese officials meet Westerners, America’s treatment of Chinese students and scholars comes up time and again. For many, the issue is personal: in China as elsewhere, few things matter more to the elite than getting their offspring into Stanford. Chaguan spent July 8th and 9th at the World Peace Forum, a conference attended by Chinese leaders and foreign grandees, hosted by Tsinghua University in Beijing. In public debates and in private corridor conversations, Americans were repeatedly scolded by Chinese government...

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China’s Silicon Valley is transforming China, but not yet the world

Economist - Thu, 07/11/2019 - 16:51

AS A TEENAGER, Wang Hanyang was fascinated by the electronics markets of Zhongguancun. He wandered the aisles of hard drives and graphics cards like a kid in a zoo, asking questions and learning. By 2009, government attempts to foster a tech hub in Mr Wang’s patch of Beijing had yielded little else to inspire a 14-year-old’s imagination. There were a few successful Chinese tech firms mimicking their American counterparts in search and social media, along with other startups. But in general Zhongguancun, a byword for cheap knock-offs, was still a disappointment.

No longer. Today Mr Wang, 25, is at the helm of his second startup, Generalized Aviation, which creates software for drones. Trendy coffee chains and boutique supermarkets dot the streets. Zhongguancun has spread out from the electronics markets into a sweeping quadrant of northwestern Beijing that takes in its two leading universities, Peking and Tsinghua. Zhongguancun is now a concept as much as a place, China’s “Silicon Valley”.

It is also China’s best hope for the domestic innovation that might insulate the country from a world perturbed by its rise. The government calls this “self-dependent innovation”, an idea that the trade war with America has given urgency. In January, during a visit to the new Binhai-Zhongguancun Science and Technology Park (...

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Cheerleaders and police usher in a new era of trash-sorting

Economist - Thu, 07/04/2019 - 16:59

“WHAT KIND of rubbish are you?” This question might normally provoke anger, but in Shanghai it has elicited weary groans over the past week. On July 1st the city introduced stringent trash-sorting regulations that are expected to be used as a model for the country. Residents must divide their waste into four separate categories and toss it into specific public bins. They must do so at scheduled times, when monitors are present to ensure compliance (and to inquire into the nature of one’s rubbish.) Violators face the prospect of fines and worse.

Shanghai authorities are responding to an obvious environmental problem. It generates 9m tonnes of garbage a year, more than London’s annual output and rising quickly. But like other cities in China, it lacks a recycling system. Instead, it has relied on trash pickers to sift through the waste, plucking out whatever can be reused. This has limits. As people get wealthier, fewer of them want to do such dirty work. The waste, meanwhile, just keeps piling up. China churns out 80bn pairs of disposable chopsticks a year.

Officials have tried before to get people to limit their rubbish. But bins marked for recycling have in practice served as yet more garbage cans. This time the government sent a signal that it was more serious: Xi Jinping, the president, visited Shanghai last year and...

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Protesters expose a fractured Hong Kong, but China’s grip only tightens

Economist - Thu, 07/04/2019 - 16:59

IT WAS A dramatic rebuke of Chinese rule of Hong Kong, on the day it was meant to be celebrated. On July 1st, a public holiday known as Establishment Day in honour of the handover of the territory in 1997 from Britain to China, anti-government protesters stormed into and ransacked the city’s Legislative Council, displaying a British-era colonial flag for cameras and live social-media feeds. Hours after Carrie Lam, the territory’s chief executive, had toasted the putative success of 22 years of mainland rule, protesters laid bare for the world the reality of a deeply fractured, fractious Hong Kong.

The violence provided Mrs Lam and Chinese leaders in Beijing, on the defensive after weeks of massive but mostly peaceful protests, an opening to harden their line against protesters. They moved quickly to take it. Mrs Lam held a press conference at police headquarters at 4am on July 2nd, condemning the break-in and defacement of the Legislative Council, known as Legco, and vowing that perpetrators would be caught and punished (there have already been some arrests). The Chinese central government’s Liaison Office in Hong Kong declared that the “savage acts were an outright provocation and trampling of the city’s rule of law.” On July 3rd Liu Xiaoming, the Chinese ambassador to Britain, denounced Hong Kong’s “ultra-radicals”, saying they had...

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China’s maritime expansion reflects a curious mix of ambition and paranoia

Economist - Thu, 07/04/2019 - 16:59

GEOGRAPHICAL GOOD luck gave Wu Zhaozong a front-row seat as China opened to the world. As a boy he watched his grandfather steer a horse-drawn cart through the docks of Tianjin, on China’s northern coast. Poor neighbours, living in courtyard homes shared with four families, would follow carts to pick up horse dung and fallen coal-lumps for fuel. Coal was a Tianjin export, as was garlic for Japan. “I very rarely saw cars,” Mr Wu recalls.

Today Tianjin is one of the world’s ten busiest ports, and Mr Wu is operations director of a ship-supply company. The firm’s work includes securing giant wind turbines on ships bound for Chinese partners in Africa. Earlier this week Mr Wu gave Chaguan a lift in his BMW to Tianjin’s passenger terminal. There he oversaw crisply uniformed Filipino sailors loading fresh produce onto a cruise ship, before it carried newly affluent Chinese tourists to Japan. The changes witnessed by Mr Wu—driven by Tianjin’s location as a gateway to Beijing and other northern cities—have been both dramatic and astonishingly rapid. For Mr Wu, an amiable father of two little girls, is just 38 years old.

China was an inward-looking, continental power when Mr Wu was born. It rose in part by turning to the sea. Seven of the world’s ten largest container ports are in China. Overseas, Chinese companies had by 2018...

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China is waging war on Western names for buildings and places

Economist - Thu, 06/27/2019 - 16:25

CHINA’S SOUTHERNMOST province of Hainan is a tropical tourist-magnet of white-sand beaches, mountains and rainforests. Posh resorts line the island’s shore. It is also on the front lines of a culture war. In June Hainan’s government published a list of 53 places and buildings, including many hotels, with names that “worship foreign things and toady to foreign powers”. It said these names must be “cleaned up and rectified”—ie, changed.

Many of the offending names use Chinese characters that, put together, sound like foreign words: Kaisa for Caesar, for example (used in a hotel name), or Weiduoliya for Victoria (the name of a residential area in the capital, Haikou). Several of the buildings are hotels called Weiyena, or Vienna. They belong to the Jinjiang Group, a state-owned firm. The Vienna chain has publicly complained, saying its brand was legally registered in 2012.

That was the year Xi Jinping took over as China’s leader. Since then Mr Xi has been waging a campaign against Western influence and to instil “cultural confidence”. Hainan issued its directive in response to one published late last year by several central ministries on the “rectification” of foreign names as well as “strange” or “exaggerated” ones. Examples given by the ministries included the phonetic renderings in Chinese of foreign names as well as...

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Xi Jinping sees protests in Hong Kong as a threat to the party

Economist - Thu, 06/27/2019 - 16:25

STRIKINGLY OFTEN, campaigners for Western-style freedoms in Hong Kong pretend that they are not seeking a fight with the Communist Party of China. Rather, activists say that their goals and those of party chiefs in Beijing should be nicely aligned: both camps seek continued prosperity for Hong Kong, 22 years after the former British colony became a free-market enclave in China, under the slogan “one country, two systems”. Instead, the campaigners sound crossest with Hong Kong’s government, for failing to maintain a strict enough separation from the mainland.

Campaigners have mostly held to that don’t-poke-the-Chinese-dragon stance during protests that have snarled central Hong Kong since June 9th. Two of the demonstrations have involved more than a million people demanding the withdrawal of a bill that would allow extraditions from the city to mainland China. At times, the contradictions have been a little dizzying. Some protesters defied baton-swinging police and tear-gas as they denounced the Hong Kong government—and above all its chief executive Carrie Lam—for exposing them to a Chinese justice system in which they have no confidence. Marchers waved blood-red banners adorned with images of handcuffs. They yelled obscene Cantonese insults aimed at Mrs Lam, at police officers and (Chaguan regrets to report) at the mothers of those...

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Xi Jinping wants China’s armed forces to be “world-class” by 2050

Economist - Wed, 06/26/2019 - 19:40

OVER THE past decade, the People’s Liberation Army (PLA) has been lavished with money and arms. China’s military spending rose by 83% in real terms between 2009 and 2018, by far the largest growth spurt in any big country. The splurge has enabled China to deploy precision missiles and anti-satellite weapons that challenge American supremacy in the western Pacific. China’s leader, Xi Jinping, says his “Chinese dream” includes a “dream of a strong armed forces”. That, he says, involves “modernising” the PLA by 2035 and making it “world-class”—in other words, America-beating—by mid-century. He has been making a lot of progress.

Organisational reforms may be less eye-catching than missiles that fly at Mach 5, unmanned cargo planes and electromagnetically powered superguns (all of which China has tested in the past year). Yet Mr Xi has realised that there is little point in grafting fancy weapons onto an old-fashioned force. During the cold war the PLA evolved to repel the Soviet Union and America in big land wars on Chinese soil. Massed infantry would grind down the enemy in attritional battles. In the 1990s Chinese leaders, alarmed by American prowess in the Gulf war of 1991, decided to focus on enhancing the PLA’s ability to fight “local wars under high-technology conditions”. They were thinking of short, sharp conflicts on China’s...

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A fly-on-the-wall account of what China tells American bigwigs

Economist - Thu, 06/20/2019 - 16:51

A BIT LATE, China’s leaders are starting to accept that their trade war with President Donald Trump is only one element of a larger crisis in relations with America—and not the most dangerous one. The leaders understand that their critics within America’s foreign-policy and national-security machine—meaning aides to Mr Trump, members of both parties in Congress and officers in the State Department, Pentagon, spy agencies and beyond—want China to change its ways. They also believe (or hope) that Mr Trump wants something different, and perhaps less painful for them: to show voters the spectacle of China losing a trade fight with him.

China’s rulers now accept that they face more than a Trump problem. They concede that bipartisan suspicion of China in America will intensify in the run-up to the elections of November 2020, and will continue afterwards, whoever wins. They absorbed that message during visits by high-ranking Americans, including Mr Trump’s officials, business bosses and veterans of Republican and Democratic governments. Dismayingly, they show no sign of accepting that China’s own actions are in any way to blame.

Chinese leaders believe that America’s policy machine wants them to change principles that have guided China’s rise for 20 years. They protest that these demands cut to the heart of China’s model of...

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A policy U-turn puts Hong Kong’s leader in a precarious position

Economist - Thu, 06/20/2019 - 12:33

JUST AS HONG KONG was digesting the impact of what may well have been its biggest street protest since China took over the territory in 1997, another far bigger one happened. Organisers said 1.9m people joined the second of these demonstrations—a turnout that was all the more remarkable given that the government, less than a day earlier, had made a humiliating U-turn to placate the protesters. Critics of the Communist Party’s tightening grip on Hong Kong feel they have gained a rare advantage. The leadership in Beijing has suffered an embarrassing blow.

Hong Kong’s embattled chief executive, Carrie Lam, says she will give up—at least until next year—her efforts to secure the passage of legislation that triggered the unrest: a bill to allow criminal suspects to be extradited to the Chinese mainland. But the scale of the second massive protest, on June 16th, showed that many Hong Kongers deeply distrust both her and the regime that pulls her strings.

There will be more unrest. As The Economist went to press, a deadline passed for the government to respond to demands made by student unions. They had asked Mrs Lam to scrap the bill and make it clearer that a smaller protest on June 12th that escalated into violence, with police firing tear gas and rubber bullets, was not, as the police called it, a...

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Rare earths give China leverage in the trade war, at a cost

Economist - Thu, 06/13/2019 - 16:26

IT LOOKS AT first like a classic Chinese painting: water-soaked paddies nestled against endless green hills. But then the brown begins. Abandoned brown pits on the hilltops. Brown gashes down their sides. Brown sludge in the streams. Ganzhou, until a few years ago, was southern China’s mining country. The damage done in the name of economic growth involves an industry that has given China leverage in its trade war with America. The rocks extracted are rich in rare-earth minerals, used in everything from planes to smartphones. It is a dirty business that China dominates.

Rare earths, covering 17 elements on the periodic table, are in fact common. But China holds two-fifths of global reserves. In 1992 Deng Xiaoping quipped that “the Middle East has oil, China has rare earths.” The chemicals used to extract them from the ore create toxic run-off, and for years China was more willing to bear that cost than other countries. By the early 2000s it accounted for almost all the world’s production. “There were no laws back then and everyone here was digging up the ground,” says Xie Yizhen, a local who worked in mining for 18 years.

Crucially, China has translated its control of the raw materials into dominance of the valuable next steps: turning oxides into metals and metals into products. To extend Mr Deng’s comparison, it is as...

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Debating contests teach Chinese students an argument has two sides

Economist - Thu, 06/13/2019 - 16:26

WHEN THE Chinese government first sent students to America in the late 19th century, it could not decide whether their goal should be to acquire specific technical knowledge or to absorb new ways of thinking. More than a century later, a third of a million Chinese students are enrolled at American schools and universities. Yet folks back home remain divided about what an American degree means.

Attending an American university is a good career move. It is also scorned as a soft option for well-off kids, scared of the gaokao, China’s brutal university-entrance exams. Yet many bright Chinese youngsters explain the appeal of an American education in remarkably idealistic terms. One place to hear such dreams, on a recent smoggy Saturday morning, is an English-language debating tournament in the central city of Wuhan. It follows a format popular at high schools across America, known as “Public Forum Debate”. On this occasion 182 teenagers are taking part.

At first sight, the event reeks of privilege. It uses the classrooms at a bilingual private boarding school in Wuhan with its own golf course and an ice-hockey team coached by imported Russians. But the debate is not for big-city elites. It is run by the National High School Debate League of China, a company founded by two young Americans in 2011. It...

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Once again, China’s richest region is pulling ahead of the others

Economist - Thu, 06/06/2019 - 16:34

MOTIVATIONAL SLOGANS do not get much blunter than the one hanging over the sewing machines in Li Zhiguo’s factory: “Work hard here to make money, don’t be disliked by your family”. He proudly holds up one of his products, a red chiffon dress with ruffled sleeves. Dozens more are wrapped up, awaiting shipment.

It is a scene that, on the surface, should please Chinese leaders. Mr Li’s factory is in Baiguan, a poor town in the central province of Hunan. The government has long wanted to spur growth deep inside the country, in part by getting low-end industries to leave the prosperous coast and move to places like Baiguan. The money, managers and machines in Mr Li’s factory are almost all transplants from the coast. “There’s advantages to being here. It’s easier to find workers,” he says.

But scratch a little deeper, and problems appear. Mr Li aims to have enough orders to keep a hundred workers busy. But business is so slack that he has only hired half that many. When Baiguan launched its industrial park three years ago, the government billed it as a new home for China’s textile industry. Today, the zone is pockmarked with vacant buildings. Workers may be paid less than on the coast, but they are more expensive than their counterparts in Cambodia and Bangladesh. The roof over the park’s sales office has partly...

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A belt-and-road court dreams of rivalling the West’s tribunals

Economist - Thu, 06/06/2019 - 11:18

THREE WORDS—Fairness, Professionalism, Convenience—form a mission statement for the China International Commercial Court, which held its first public hearing in Xi’an on May 29th. When Chaguan attended the session, alongside foreign diplomats and representatives of China’s Supreme People’s Court, that three-word promise in English and Chinese shone from a digital screen dominating the bronze and marble entrance hall of this, China’s newest judicial institution.

It is built to impress, for it has large ambitions. It was founded to buttress the railways, roads and fibre-optic cables of the Belt and Road Initiative—a globe-spanning scheme launched in 2013 by President Xi Jinping—with something less visible: a distinctively Chinese vision of how laws should govern globalised commerce. The court has two tribunals. The one in Xi’an is in a symbolic spot. The city was the historic terminus for jingling, snorting camel trains on trade routes later dubbed the Silk Road. Its sister tribunal in the southern boomtown of Shenzhen will hear disputes relating to maritime routes of Mr Xi’s project. Yet for all the pomp, the new court has an uncertain future, clouded by doubts about how many firms will agree to use it—though its remit now extends to large disputes involving foreign businesses, not just belt-and-road deals. The doubts are related to a...

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Hong Kong wants to build massive artificial islands

Economist - Thu, 05/30/2019 - 11:03

HONG KONGERS have less residential space than the people of any other big city: 15 square metres each. That is barely double the size of a standard prison cell in Hong Kong. The Chinese territory is also the world’s most expensive property market. The average price of a home is $1.2m, around 40% higher than the nearest competitor, Singapore. To be fair, 45% of Hong Kongers live in government-subsidised housing. But the average waiting time for such flats is five-and-a-half years.

Carrie Lam, Hong Kong’s chief executive, has taken note. Last year she unveiled a colossal project, called Lantau Tomorrow Vision. It involves reclaiming 17 square kilometres of land off the coast of Lantau, Hong Kong’s largest island. That is about five times the area of New York’s Central Park. It is the biggest infrastructure project ever proposed in the city (see map). Housing on the artificial islands would accommodate up to 1.1m people, about one-seventh of the current population. The new flats would be bigger than average and 70% of them would be subsidised. On May 25th Hong Kong’s quasi-parliament, the Legislative Council, approved the launch of a feasibility study. Reclamation work is unlikely to start before 2025.

The estimated price tag, including the cost of transport links, is at least HK$624bn ($80bn), officials say. That is...

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Many Chinese know little about the bloodshed in Beijing 30 years ago

Economist - Thu, 05/30/2019 - 11:03

THREE DECADES after troops used murderous force to clear protesters from Tiananmen Square and central Beijing, covering up that crime has become a bit of a chore. China’s security machine is ready to censor, arrest and imprison those who speak too candidly about events in 1989. But 30 years on this work of repression is carried out with cold, bureaucratic efficiency—a far cry from the terrors of June 3rd and 4th when soldiers and tanks shot and smashed their way into the ceremonial heart of Beijing, as loudspeakers metallically intoned that the army “loves the people”.

The most recent jailing linked to the Tiananmen protests occurred on April 4th this year. A court in the south-western city of Chengdu sentenced an activist, Chen Bing, to three-and-a-half years in prison for “picking quarrels and provoking trouble”. His offence: labelling bottles of baijiu alcohol with the iconic image of the lone protester who stared down tanks near the square. That picture, and any other reference to Tiananmen in 1989, is politically taboo in China. Each year, as the anniversary approaches, the relatives of those killed by the army, including the mothers of school pupils gunned down in cold blood, are placed under surveillance or taken on enforced trips out of town.

The cover-up is a headache for internet and...

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China is getting tough on those who fail to pay their debts

Economist - Thu, 05/30/2019 - 11:03

THE CASE of Mr Ke, a carpenter from the eastern city of Taizhou who fell deep into debt, may one day be noted in histories of China’s financial evolution. On May 9th a local court announced that it had arranged for Mr Ke’s liabilities to be written off. This was made possible by what state media described as the country’s first ever regulations concerning the clearing of personal debt. Sadly, for now, they only apply in Taizhou.

Mr Ke—the court did not reveal his full name—had fallen victim to fraud eight years ago. By last year the 54-year-old’s debts totalled 480,000 yuan ($70,000), owed to three banks. But the court took account of Mr Ke’s predicament. He has no income, a home with only one room and less than 100 yuan in savings—the equivalent of what he would earn in under seven hours on the local minimum wage.

In America, Europe and many other countries Mr Ke’s problems would have been swiftly handled according to national regulations on bankruptcy. China, however, still has no such rules for discharging penniless people’s debts. Officials in Taizhou say Mr Ke is the first beneficiary of a procedure the city’s own judiciary devised for dealing with such cases. It is modelled on China’s law relating to the winding-up of insolvent firms.

For an individual in China, it is easy to fall into debt without being...

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Amid trade tensions with America, China is showing old war films

Economist - Thu, 05/23/2019 - 16:52

THERE IS A lot for Americans to dislike in the Chinese propaganda film “Shangganling”. It is based on a real battle in late 1952, during which American and South Korean forces failed to take a mountain ridge from more lightly armed Chinese troops, who suffered terrible casualties. The weeks-long campaign came near the end of the Korean war of 1950-53, which began when the Stalinist regime of Kim Il Sung invaded the pro-American south and which eventually drew in millions of Chinese and UN forces. Chinese schools teach that China joined the war in self-defence and was victorious. Pupils are told their countrymen showed solidarity with communist brethren in Korea while standing up to American imperialists who were bent on attacking China’s heartland. Official histories avoid the awkward question of who started the “War to Resist America and Aid Korea”, as it is known. China’s internal estimates put the Chinese death toll at 400,000. The public is told that only 152,000 Chinese were killed.

Newspapers have begun to cite the Korean war in editorials, as they brace the public for prolonged trade conflict with America. Filmed in 1956, “Shangganling” is one of several Korean war films shown on national television in recent days. Sporting crude, prosthetic hooked noses beneath their steel helmets, the “Americans” in that film cackle with...

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African swine fever hits China, home of half the world’s pigs

Economist - Thu, 05/23/2019 - 16:52

WHILE THE Chinese zodiac celebrates the year of the pig, for the Earth-bound variety it is a terrible time. African swine fever, harmless to humans but fatal to porkers, has spread across the country. Hong Kong’s first case was reported on May 17th. The epidemic has affected colossal numbers of pigs, pushing up pork prices steeply. It has walloped the tens of millions of Chinese who depend on pig-rearing for their livelihood. There is no effective vaccine. Experts say that it may take years for China to control the disease.

African swine fever is so named because the first known case was detected in Africa over a century ago. The virus spreads easily between pigs, which can also catch it from ticks, contact with contaminated surfaces or by eating infected food (cheap animal feed in China often contains pork). It causes haemorrhaging and often kills in less than a week. The death rate is at least 90%. Since 2016 outbreaks have occurred across Europe and Asia. But nowhere have they been more devastating than in China, which at least until recently was home to half of the world’s pigs.

China’s first officially acknowledged case was reported in August last year in the north-eastern province of Liaoning. But many people in the industry believe that the virus began spreading, unreported, months earlier. The country (excluding...

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China is a nation of tea-drinkers, but coffee is taking off

Economist - Thu, 05/23/2019 - 16:52

ON A SPRING morning in Chengdu, the capital of the south-western province of Sichuan, Zhang Xiaoyu stands in her classroom, teaching the art of coffee-making. On the wall a dozen plaques from the Specialty Coffee Association of Europe certify her proficiency in skills ranging from roasting beans to serving the drink. Seven students, all women in their 20s and 30s hoping to open coffee shops, take sips from tiny cups and make notes on the flavours.

Until the 1990s coffee was rarely served in China except at luxury hotels aimed at foreigners. When Starbucks opened its first outlet there in 1999 it was far from clear that the country’s avid tea-drinkers would take to such a different—and usually more costly—source of caffeine. Starbucks tried to entice customers unused to coffee’s bitter taste by promoting milk- and sugar-heavy concoctions such as Frappuccinos.

The average Chinese still only drinks five cups per year, says the International Coffee Organisation, a London-based group. That is just 1.3% of the amount consumed by the average Japanese or American. But coffee has become fashionable among the middle class. Starbucks now has about 3,800 outlets in China—more than in any other country outside America. Statista, a business-intelligence portal, says the roast coffee market in China is growing by more than 10% a year...

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