South Korea becomes a global centre for digital sex crimes

Hi, this is Kenji. Tech has no doubt made our lives easier and more convenient, but it has also raised various problems that are inflicting pain on people. Online sex crime is becoming rampant across the region, including where I live in Hong Kong, but it is especially severe in South Korea (The Big Story). Some workers at Chinese tech companies are complaining about the harsh conditions in their workplaces (Mercedes’ top 10). G7 leaders are making serious motions in the fight against Chinese tech to protect democratic values, but I wish they would do their homework (Our Take). Please take good care of yourself. 

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The Big Story

South Korea’s cutting edge technology is abetting a wave of digital sex crimes. The country has become the global centre for illegal filming and sharing of explicit images and videos, according to victims, researchers and advocacy groups.

“South Korea, unfortunately, has been ahead of the curve on the prevalence, variety and seriousness of digital sex crimes,” said Heather Barr, co-director of women’s rights at Human Rights Watch.

Key developments: In one case, Lee Ye-rin* discovered a clock given as a gift by an employer had been streaming footage from inside her bedroom for weeks. “What happened took place in my own room — so sometimes . . . in my own room, I feel terrified without reason,” Lee said.

Kang Yu-jin*, another victim, was forced to quit her job and move house after a former partner published private photos alongside identifiable details including her home and office addresses.

Upshot: Digital technologies, including high-speed streaming and encrypted chat rooms, have provided new vehicles for propagating deeply embedded gender discrimination and disseminating material depicting sexual violence against women.

*Names have been changed

Mercedes’ top 10

1. Exclusive: Taiwan’s TSMC is considering building its first chip plant in Japan, which has shed light on hidden local champions. It is also considering a first chip packaging plant in the US. (Nikkei Asia)

2. A digital-only Gucci bag sold for $4,115 in an online game — more than the price of a real-world bag — as a frenzy grips the market for in-game purchases. (Nikkei Asia)

3. India’s fintech unicorns are rushing into south-east Asia, bringing a new wave of competition. (Nikkei Asia)

4. China’s Huawei Technologies’ UK unit suffered a plunge in earnings last year as London’s ban on its 5G telecoms equipment took a toll. (FT)

5. A factory in China has been cut off from Apple’s supply chain over allegations that it used forced labour from the Muslim Uyghur minority. (Nikkei Asia)

6. SoftBank has supercharged Singapore’s Carro to unicorn status, leading a $360m funding round for the online car sales platform. (Nikkei Asia)

7. South-east Asians are jumping on the non-fungible token bandwagon to boost incomes. (Nikkei Asia)

8. Japan’s Toshiba has lurched deeper into a governance crisis as the conglomerate’s chair rebuffed shareholder calls to resign. (FT)

9. Chinese bloggers claimed they were threatened with legal action by Tesla as the US carmaker battles negative publicity. (FT)

10. Yang Yuan, the FT’s deputy Beijing bureau chief, uncovers the brutal working conditions behind China’s tech boom. (FT)

Our take

The G7 gathering last weekend in Cornwall could be remembered as the first tech-driven summit. The 25-page communiqué issued at the end of the meeting contained more than 30 references to the words technology and technological — a stark difference from two years ago, when the leaders last met face-to-face in Biarritz, France.

The way tech was referred to was distinct, as well. In Biarritz, the word appeared a few times in some auxiliary statements, including on digital transformation in Africa, but the rest were mainly passing remarks.

In the Cornwall document, the potential of a technological transformation was discussed “in accordance with our shared values”, and the use and evolution of new technologies were linked to “shared democratic values and commitment to open and competitive markets, strong safeguards including for human rights and fundamental freedoms”. On data-driven technologies, the leaders emphasised “data free flow with trust”, while they vowed to secure “transparent and sustainable and diverse digital, telecoms and ICT infrastructure supply chains”. 

Unlike matters regarding Xinjiang, Hong Kong and the South and East China Seas, these references to tech were not explicit but were quite obviously pointed at Beijing. The free world leaders pledged to collectively challenge “non-market policies and practices”, but they also need to act to nurture innovations at home and enhance their own tech competitiveness in order to compete against real technological challenges emerging in China. 

— Kenji 

Smart data

The number of venture deals in China rose 56 per cent in the first quarter of this year from a year earlier, the fourth consecutive quarter of increasing activity, as start-ups pulled in Rmb354bn ($55bn) in investment, according to data provider ITjuzi.

The chart above lists the main investors in Chinese start-ups last year. Tencent was particularly active, and is cashing in some gains as its listed portfolio expands. VC firms such as GGV Capital, Qiming Venture Partners and Matrix Partners China raised large new funds, suggesting that their investments will remain strong in the quarters to come.

“The capital winter [in China] is over, competition for deals is fierce,” said Ming Liao of Prospect Avenue Capital. “You need to bring something to the table more than just cash to get into deals now.”

Spotlight

Since founding Shein in 2008, Chris Xu has made the company a global Gen Z staple known for selling cheap, on-trend clothing online.

In May, the company reached the top of the app download charts for shopping on both Apple and Google’s stores, while it was valued at $15bn in its most recent known funding round in August 2020.

But now Shein is facing complaints from apparel brands that claim it has infringed their intellectual property.

AirWair International, the makers of the iconic Dr Martens boot, is suing Shein over what it described in court filings as a “clear intent to sell counterfeits”, pointing to a “Martin boot” listed on the site. Kikay, a Los Angeles-based direct-to-consumer earring brand, said it was alerted to its designs being sold on Shein by one of its customers this month.

When sages speak

• This tour-de-force from Merics, a Berlin-based think-tank, has a really good section on tech and governance in China. Authors were Nis Grünberg, Katja Drinhausen, Mikko Huotari, John Lee and Helena Legarda.

• This is a cracking podcast on China’s space programme from SupChina featuring Andrew Jones, a Helsinki-based reporter for SpaceNews. Full of detail and insight, moderated by Kaiser Kuo.

• China leads the rest of the world in setting industrial standards for autonomous vehicles, writes Matt Sheehan for MacroPolo. A useful and detailed study.

Art of the deal

Wind and solar power plant operator China Three Gorges Renewables raised $3.53bn in a blockbuster IPO last week in Shanghai. The company’s stock price rose the maximum 44 per cent allowed on debut.

The company, which is a unit of the operator of the world’s largest hydroelectric power plant, capitalised on investor interest in China’s drive to realise President Xi Jinping’s pledge to achieve carbon neutrality by 2060.

As of September 30, CTG Renewables owned 11,890 megawatts of domestic power generating capacity. Of that, 58 per cent was wind, 40 per cent solar and the rest hydropower. This gave CTG Renewables a roughly 3 per cent share of domestic wind power production and more than 2 per cent of solar capacity.