A Chinese tech billionaire’s musings about a 1,100 year-old poem cost him $1.5 billion

Does Chinese tech billionaire Wang Xing have Elon Musk envy?

In the U.S, the Tesla Inc. founder revels in his bad-boy image. He posts snarky tweets about the Securities and Exchange Commission, rails against federal regulators for air and highway safety, and has denounced as “fascists” the county officials who last year forced him to briefly close Tesla’s California gigafactory to contain the coronavirus. Such antics seem only to endear Musk to investors, whose insatiable demand for Tesla stock has helped make Musk the planet’s richest man.

In contrast, last weekend, as Musk was cracking wise about Dogecoin as a guest host on Saturday Night Live, Wang, CEO of food delivery behemoth Meituan, found himself frantically scrambling to delete and apologize for an oblique reference on social media to a 1,100 year-old poem.

The poem, entitled “The Book Burning Pit,” was penned by Zhang Jie, a poet from the Tang Dynasty (618-907). It mocks Qin Shi Huang, the creator of China’s first unified empire, the Qin Dynasty (221-206 BC), who was also known for killing dissident scholars and burning their books. In the end, Qin’s empire was overthrown not by intellectuals but by illiterate warriors from afar. As Zhang’s poem notes: “Before the ashes turned cold, rebellion had arisen east of the mountains.”

Investors were aghast. Was Wang using ancient poetry to complain about Chinese regulators’ ongoing crackdown against the nation’s largest tech companies for anti-competitive behavior? Could the reference be a thinly veiled criticism of Chinese President Xi Jinping?

Meituan is one of China’s hottest tech stocks. As of mid-February, the company’s share price had soared to HK$445, a four-fold gain over the previous year, boosting its market capitalization to $220 billion—and making Meituan China’s third-most valuable Internet company behind Tencent Holdings and Alibaba Group.

But Beijing’s efforts to “rectify” China’s tech sector has sent a chill through global markets. In trading in Hong Kong on Monday, Meituan’s shares plunged 7%, wiping out $16.5 billion of the company’s market value—and $1.5 billion of Wang’s 11% stake in the food delivery giant.

Wang insists he was misunderstood. In a later post, he explained that the poem reminded him that “the most dangerous rivals are often not the usual suspects” and that it may be “more likely that companies and business models we have yet to focus on will disrupt the delivery business.”

Wang, 42, is an engineer by training—not a student of history or literature. But the poem is a familiar touchstone for Chinese critics of excess state control.

Meituan sank again Tuesday morning (but recovered by end of the day) on news that the Shanghai Consumer Council had released a report late Monday criticizing the company for violating consumer rights. The Council, a consumer advocacy group, faulted Meituan for declining to refund customers for delivery errors and publishing misleading content on its app.

Meituan’s travails demonstrate that, in China, tech billionaires can’t get away with thumbing their nose at regulators—or even being perceived as doing so. And, as I argued last month, even Elon Musk is learning that, in China, the bad-boy routine doesn’t end well.

More Eastworld news below.

Clay Chandler
– clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Eamon Barrett. Reach him at eamon.barrett@fortune.com

EASTWORLD NEWS

Census

China’s once-in-a-decade census revealed the slowest population growth in decades on Tuesday. The data release, collected in late 2020, had been delayed since early April. The Financial Times had earlier reported that the census would show China’s first population decline since the 1950s, when famine killed tens of millions, but authorities denied the report. Fortune

Going for gold

Japan Prime Minister Suga Yoshihide said Monday he has “never put the Olympics first,” even as his government insists the Tokyo 2020—now 2021—Games go ahead in July despite the pandemic. Last week, a poll in a local paper showed that 59% of respondents favored cancelling the games. Tokyo is currently under a state of emergency to combat rising COVID cases. Reuters

Blockchain China

Alibaba has joined China's roll out of a sovereign cryptocurrency, providing the blockchain-based fiat as a payment option to the e-commerce giant's 1 billion users. Customers can choose to pay using the crypto-yuan through the Alipay app, which is owned by Alibaba affiliate Ant Group. But Bloomberg reports that uptake of the novel payment system across China, in general, is slow as consumers see no benefit to switching from regular mobile payment systems. Caixin

Vaccine drive

Chinese pharmaceutical giant Fosun Pharma will launch a joint venture with German vaccine maker BioNTech, with plans to build a new production site for the latter’s mRNA COVID-19 vaccines in China. Fosun is already BioNTech’s distributor for Hong Kong, Macau, Taiwan and mainland China, but only Hong Kong and Macau have approved the vaccine. BioNTech also announced it would open a regional headquarters and a factory to create other mRNA vaccines in Singapore. Fortune

Joe's man in Japan

U.S. President Joe Biden has chosen former congressman and Chicago mayor Rahm Emanuel as U.S. ambassador to Japan, the FT reports. The position is a vital one. The Biden administration wants to lean on Japan for support in the U.S. rivalry against China. Nick Burns—a Harvard professor and former diplomat—is tipped to be named the ambassador to China. FT

MARKETS AND MOVERS

ADA — Japan’s Softbank is investing $60 million in ADA, a digital analytics and A.I. firm owned by Malaysian telecom conglomerate Axiata Group.

Big Three — China’s Big Three telecoms—China Mobile, China Unicom and China Telecom—lost appeals against a Trump-era executive order to have the companies removed from U.S. stock exchanges. The three companies will be delisted next Monday.

Sinochem Holdings — Regulators finalized the merger of China’s two largest chemical producers—ChemChina and Sinochem Group—to create a new state-owned goliath called Sinochem Holdings.

Sinopec — China Petroleum & Chemical Corp, otherwise known as Sinopec, plans to invest $30.9 billion over the next five years to double the size of its natural gas business and bring carbon emissions in-line with national climate goals.

Blacklists — A weighted basket of stocks belonging to companies blacklisted by the Trump administration in November yielded a 17.6% return rate as of mid-April, the FT says. The blacklisting aimed to prevent U.S. investors from buying shares in the companies.

1MDB —Malaysia’s defunct sovereign fund, 1MDB, is suing subsidiaries of Deutsche Bank, JP Morgan, Coutts & Co and over 20 individuals to recover some $23 billion in losses the fund suffered due to management's fraudulent practices.

FINAL FIGURE

25,845

Tesla’s China sales were down in April, according to data from China’s Passenger Car Association, dropping from 35,478 units in March to 25,845 last month. The decline comes as Tesla faces increased scrutiny in China, following the automaker’s poor handling of customer complaints over brake failures. Authorities also recently banned Tesla vehicles from certain military compounds, citing security concerns over the carmaker’s onboard tracking and recording hardware. In response, Tesla—not famed for humility in its dealings with regulators back home—has beefed up its government relations team in China. Bloomberg