Skip to Content

Data Sheet—China’s Year of the Big—Big Brother, That Is

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.

Happy Year of the Pig. Here in Hong Kong, neighbors in the beachside village where I live welcome the new lunar year with fireworks, drum-banging, and exuberant lion dancing. However boisterous our local festivities, they pale in comparison to the chaos and clamor endured by anyone who takes to China’s roads, railways, or airports during this period. The advent of the new year, and with it the Chinese Spring Festival holiday, sets in motion the world’s largest annual human migration. This year, it is expected that Chinese travelers returning to celebrate with friends and families in their hometowns will log nearly 3 billion trips—an all-time record.

In recent years, new infrastructure and technology have helped to ease the tumult of spring festival travel. China’s high-speed railway network added 2,500 miles of track in 2018, bringing the nation’s total high-speed railway mileage to 15,500. That gives China about two-thirds the high-speed railway track in the entire world; Beijing plans to add another 4,225 miles in 2019. China now boasts more than 230 airports, and plans to build another 30 by 2020—including the $12 billion, seven-runway Beijing Daxing International Airport, designed by Zaha Hadid and scheduled to open later this year. And as Fortune‘s own Eamon Barrett explained earlier this week, the emergence of sophisticated online travel agencies like Shanghai-based Ctrip have eased the pain for Chinese travelers of booking and buying tickets.

But as travel in China becomes more convenient, it is also becoming more intrusive. As Kristy Needham reports in the Sydney Morning Herald, railway stations in Beijing and other major cities this year are rolling out new, more sophisticated surveillance systems featuring cameras capable of capturing faces for inclusion in vast government databases to be mined by artificial intelligence algorithms. As Needham observes: “The high-speed rail network that so many Chinese rely on to travel long distances for business or holidays has become the fulcrum of the Chinese state’s experiment in harnessing digital technology to not only watch its citizens, but also to shape their behavior.”

On the train from Beijing to Shanghai, passengers are warned via public announcement to behave lest rule-breaking damage their “personal credit” score. Needham reports that, by late last year, more than 5 million people had been put on government blacklists banning them from buying high-speed rail tickets while 17 million were stopped from buying air tickets.

There’s great debate among China hands about whether China’s social credit scoring system is menace or myth. At Davos last month, George Soros warned of the “mortal danger” posed by China’s social credit system “if it became operational.” The Washington Post‘s Simon Denyer paints a dystopian view of China’s “all-seeing surveillance state” in this video. You’ll find the case for skepticism in these reports in Foreign Policy and Kaiser Kuo’s Sinicia Podcast, and an “it’s complicated” straddle in Wired. Still, anyone who travels frequently on the mainland can’t help notice the pattern. In China, these days, convenience seems always to come with cameras.

Clay Chandler
@claychandler
clay.chandler@timeinc.com

NEWSWORTHY

Trading places. After a five-year run filled with undeniable successes and just a few challenges, Angela Ahrendts, Apple’s senior vice president of retail and No. 12 on Fortune’s Most Powerful Women list, is out. In a surprise announcement, the company said Ahrendts, the former CEO of Burberry, was leaving “for new personal and professional pursuits.” HR head Deirdre O’Brien, a 30-year Apple veteran and one of only two remaining women in the company’s senior management, will add head of retail to her portfolio. Separately, Apple agreed to pay $571 million in back taxes to France following a multi-year audit.

The golden child. As rumored, Spotify announced on Tuesday it was buying professional podcast producer Gimlet Media. In addition, the music streaming giant also added Anchor, a podcast creation platform aimed at smaller creators and amateurs. “Spotify will now become the leading global podcast publisher with more shows than any other company,” CEO Daniel Ek wrote in a blog post. “These levers of growth have the potential to double the size of our industry.” Better work those lever quickly, Daniel. The company also disclosed disappointing fourth quarter results, even with revenue up 30% to $1.7 billion and the number of premium subscriber growing 36% to 96 million. Spotify’s shares lost 7% in premarket trading on Wednesday.

The haunted mansion. Elsewhere on Wall Street, Snap got as much needed boost, reporting fourth quarter revenue rose 36% to $390 million even as its daily average users stagnated at 186 million. Snap’s stock, down 49% over the past year, jumped 24% in premarket trading on Wednesday. The news was less good for video game maker Electronic Arts as net bookings of $1.3 billion were up 11% but less than analysts expected. And forecast bookings of $1.2 billion for next quarter also disappointed. EA’s shares, down 26% over the past year, lost another 16%.

Life. Thank god, the long drought of yawning face and pinching hand emojis is finally ending. The list of new emojis for 2019 from the Unicode Consortium, which won’t actually be available on your phone for some more months yet, also included a waffle, otter, and drop of blood.

Tower heist. Digital currency startup Zerocoin Electric Coin Company quietly patched a flaw in its Zcash last year that could have allowed unlimited counterfeiting, Fortune reports. CEO Bryce “Zooko” Wilcox says he doesn’t think anyone actually exploited the flaw to make fake cryptocurrency tokens.

Coming to America. The front page of the Internet needs some more cash. Reddit is raising up to $300 million of private backing from investors led by Tencent at a valuation of about $3 billion, TechCrunch reports.

(Headline reference explainer.)

FOOD FOR THOUGHT

As you ponder Spotify’s up and downs, spare a thought for the “Big Three” remaining major record labels: Universal Music, Sony BMG, and Warner Music. Turns out the Internet didn’t kill them, after all. As Bloomberg reporters Angelina Rascouet and Lucas Shaw explain in this explainer, the Internet actually “saved the record labels.” How so?

These days, music fans have largely shifted from illegal downloads to paid streaming platforms such as Spotify, Apple Music, Amazon Prime, and Pandora, which generally charge $5 to $10 a month for unlimited access to millions of songs. Even though the labels only get about 0.3¢ each time a tune is streamed, according to the Trichordist, a musician advocacy blog, the pennies add up. Since 2014, record company sales have jumped an average 7% annually and streaming has become the top source of revenue, generating $6.6 billion in 2017, up from $1.9 billion in 2014, the International Federation of the Phonographic Industry estimates.

IN CASE YOU MISSED IT

Facebook’s Employee Bonuses Now Hinge on ‘Social’ Progress By Michel Lev-Ram

Tesla Cuts Model 3 Pricing Yet Again in Quest for Magic $35,000 Figure By David Meyer

Google’s New Feature Will Make It Harder for Hacks to Spread By Natasha Bach

Amazon Delivers Its Shipping Intentions to FedEx, UPS, USPS via Regulatory Filing By Alyssa Newcomb

Huawei Offers to Create Polish Security Lab to Ward Off 5G Bans By David Meyer

Pennsylvania Is Trying to Tax Violent Video Games—Again By Chris Morris

BEFORE YOU GO

Far side, dark side, whatever. See the moon’s beautiful side juxtaposed against that tiny blue marble known as the Earth in this new photo snapped by China’s Longjiang-2 satellite. Gorgeous.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.