Why China’s Moon Shot Matters

January 5, 2019, 1:14 PM UTC

As 2019 dawns the separate preoccupations of the United States and China sound a bit like tracks from a Pink Floyd album: while Americans obsess over building “The Wall,” the Chinese have landed a robot on “The Dark Side of the Moon.”

It’s easy to be cynical about China’s moon shot. After years of effort and billions dollars in expense, Beijing has managed to boldly go, well, where America already went—50 years ago. China sent a probe, not an actual person. And, yes, it was both creepy and shameless that in hailing the moon landing, Wu Weiren, the chief designer of the Lunar Exploration Project, riffed off (or ripped off, depending on your point of view) the famous Neil Armstrong quote, declaring: “It’s a small step for the rover, but one giant leap for the Chinese nation.”

Still, China’s successful landing of the Change-e 4 on lunar terrain last Thursday was a significant scientific and technological achievement—one that can’t be dismissed as just another example of Chinese copy-catting. For one thing, China’s effort was the world’s first mission to the surface of the moon’s far side (which, as it turns out, isn’t actually all that dark) and therefore posed unique technical challenges. The far side can’t be seen from earth, and its surface has never been observed up close. Because the moon blocks direct communication from the far side, to transmit images from the probe back to earth, China had to build a separate relay satellite. Moreover, the far side’s surface is soft and powdery, a bit like snow, and so China’s lunar rover, called the Jade Rabbit 2, had to be specially constructed.

As the New York Times points out, the crater where Chinese probe landed is the oldest and deepest on the moon. It may hold clues to the moon’s origins, prove rich in minerals, and possibly serve as a “future refueling base for missions deeper into space.”

China is only the third country, alongside the U.S. and Russia, to send its own astronauts into space aboard its own rockets, and only the U.S. and China have the fiscal and technical wherewithal to mount significant long-term programs for exploring space. China last year launched more rockets into space than any other nation and plans another moon landing, the Chang-e 5, later this year. The country hopes to begin operating its third space station by 2022, and put astronauts on a lunar base sometime in the next decade. Beijing also has plans to to send probes to Mars and return samples of the Martian surface back to earth.

Notably space is yet another sphere where earth’s two technological powerhouses compete but don’t collaborate—and seem almost to inhabit different universes. As the BBC notes, U.S. counter-espionage legislation restricts NASA from working bilaterally with Chinese nationals without express permission from Congress.

More China news below.

Economy and Trade

Winter is coming. Baidu CEO Robin Li warned employees that China is entering an economic winter, but highlighted the benefits to be drawn from such adversity. For one, the age of AI has unleashed “enormous growth potential and room for upgrade,” Li wrote. Baidu has invested heavily in AI as revenue from search has weakened. “It’s high time that Baidu stepped forward as a platform company," Li cheered. South China Morning Post

Talk soon. China confirmed vice-ministerial level officials will meet with a delegation led by deputy U.S. trade representative Jeffrey Gerrish in Beijing next week. The meeting comes during the 90-day ‘ceasefire’ struck by Trump and Xi when they met at the G20 summit on December 1. Bloomberg

Protect the tech. Two lawmakers introduced a bill on Friday seeking to establish an Office of Critical Technologies and Security, to address the threat of Chinese tech. "We need a whole-of-government technology strategy to protect U.S. competitiveness in emerging and dual-use technologies and address the Chinese threat by combating technology transfer from the United States," said Dem. Senator Mark Warner, who introduced the bill with Rep. Marco Rubio. Reuters

Roll up. The world’s largest tobacco company is planning to list its international arm in Hong Kong. The state-owned National Tobacco Corp (CNTC) has a monopoly on cigarette production in China. Its overseas unit, China Tobacco International (HK), filed for an IPO on Tuesday. While the Hong Kong branch accounts for a low fraction of CNTC’s revenues, the filing represents a rare opening-up of the state monopoly. Bloomberg

Innovation and Tech

Blame China. Apple downgraded its fiscal first quarter revenue guidance from a maximum $93 billion to just $84 billion Wednesday, with CEO Tim Cook blaming weak sales on China’s flagging economy. That’s a factor, but Apple’s own missteps in tackling the market have undoubtedly caught up with the Cupertino champ too. Apple’s stock fell 8% after the downgrade, rattling global markets. Fortune

Didi does loans. China’s pre-eminent ride hailing app, Didi Chuxing, has veered into financial services, setting a collision course with tech giants Alibaba and Tencent. Didi trialed financial services at a regional level last year and brought them nationwide Wednesday, offering car insurance, medical insurance and personal loans through its app. Financial Times

Battle brewing. Luckin Coffee wants to surpass Starbucks as the largest coffee chain in China this year. Luckin, launched last January, has 2,000 stores across China, while Starbucks has over 3,500 and is expanding at the rate of one shop every 15 hours. But Luckin plans to do one every four, adding 2,500 locations to its network throughout 2019. It’s possible: many Luckin locations are just pick-up shops for online orders. Reuters

In Case You Missed It

Cathay Pacific to honour $16,000 fares sold for $675 BBC

Chinese Vice-President Wang Qishan to lead Davos delegation SCMP

Canada says 13 citizens detained in China since Huawei CFO arrest Reuters

China Announces Top Anti-Corruption Buzzwords of 2018 Sixth Tone

Politics and Policy

Don’t go there. The U.S. State Department issued a travel warning against China on Thursday warning, amongst other things, that Beijing uses “exit bans coercively”. That's an apparent reference to the retention of two American-Chinese children whose absent father is wanted by Chinese police. Despite its new warning, the State Department hasn’t changed China’s “level 2” advisory category – a warning level also applied to Antarctica and the U.K. South China Morning Post

Friends, or else. Taiwan “must and will” be reunited with the mainland by force if necessary, President Xi Jinping warned during a speech on Tuesday. Intriguingly, Xi also said China “achieved a great victory in frustrating the Taiwan independence movement” last year. In November, the island's ruling, pro-separatist party was delivered a crushing defeat in mayoral elections by the rival pro-unification party. CNN


This edition of CEO Daily was edited by Eamon Barrett. Find previous editions here, and sign up for other Fortune newsletters here.

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