China's social credit system and the disappearance of Fan Bingbing (1 Viewer)

[Snowmelt]

This caught my eye, and at the same time, I had a swirling, disintegrating feeling in my lower abdomen - the type of feeling that spells something is NOT RIGHT.

She is obviously one of China's poster girls for success. Is she paying the price for having a western-style success and rising to meteoric fame? There is a hint of tax evasion in the reports, or is it just that in China, you can't get too big for your boots? You may know this actress from movies in which she has co-starred with Western icons such as Bruce Willis, Hugh Jackman, Patrick Stewart and Jackie Chan.

Already noted in Wikipedia is the following quote:

"Fan Bingbing has not been seen publicly since 1 July 2018, and her last social media activity was on 23 July, which has raised concerns among fans. Chinese media has avoided commenting on her whereabouts and some have speculated her absence could be related to her tax-avoidance issues."

From the BBC news article linked below:

"Most recently, state-run Chinese publication Securities Daily published a report which said she had been placed "under control and would accept the legal decision." But the story was pulled down a few hours later."

http://www.abc.net.au/news/2018-09-12/report-says-chinese-star-fan-bingbing-not-socially-responsible/10234304

http://www.msn.com/en-au/news/australia/mysterious-disappearance-of-actress-throws-swisse-vitamins-into-disarray/ar-BBNdoYI?ocid=ientp

http://www.latimes.com/business/la-fi-ct-china-movies-absence-20180912-story.html

https://www.bbc.co.uk/news/world-asia-china-45426882

https://en.wikipedia.org/wiki/Fan_Bingbing

 

[Kevin C]

Hailstones:
This story has a lot more layers than what you see in western public media.
The key is:
(1) She has her own film/tv show production company.
Problem 1
(2) Majority of income of these companies depend on movie grosses / tv ratings (nielsen, ex.)
(a) It has come out that the company (and the entire industry)
faked/paid for grosses and ratings points either through outright fraud
(think if CBS can pay Nielsen to increase NCIS ratings 5x higher, they can get
much higher ad rates), or literally paying people to attend movies
(b) This leads to higher revenues/profits, which leads to....
(c) fraudulent higher stock prices for her company. However, this same practice is similar to another
MUCH more lucrative scheme.
Problem 2
(3) Due to entertainment's complex web of networks like Hollywood, there are many ways to milk
money in China.
(a) Fan has her own company stock, so that is ok, BUT....
(b) due to her popularity, a lot of new media companies over the past 10 years have asked her to
promote their IPOs in exchange for "under-the-table" stock grants.
(c) these stock grants were put into shell company LLCs......
(d) she is not the only major entertainer in this scheme..... almost every single one in China is, since
it is literally milking money without effort.
(e) the key? these entertainers sell their stock immediately after the IPOs to avoid scrutiny of holding
stock ownership (not insignificant amounts - imagine if Google offered Tom Cruise $80M in
stock options just to show up at their IPO day, and Tom sells immediately the next day through a
Bahamas shell co to avoid taxation).
(f) So, they make "air" money out of selling stock on IPO day or week in 8 or 9 figures, avoid taxation,
all for less than a day's work, no expenses either. And they can rinse and repeat as many times as they
want.

Until this year.

However, above "true crime" aside, the social credit rating is a concern. Imagine if FICO expands its equations to include variables such as:
-gym membership
-type of car bought
-how much gas bought
-kids go to which school
-do you volunteer
-FB/Twitter/any other website's posts and comments
-voting patterns
-company's performance reviews
-school grades
-how many tickets you get for jaywalking/speeding/etc.

As an example, one Chinese citizen was barred from bank loans, and his daughter was prohibited from attending the best local private school, simply because he was caught jaywalking.

That system is coming here as well, since Google/FB are signing contracts with cc companies to obtain cc records for data mining. Add FICO to the system, and voila.... future "social credit rating".

 

[Linda]

I've read about the social ranking system set up by the Chinese government, and it is chilling. You can be up or down voted for all kinds of things. With enough negative ratings, people will have trouble getting certain services or even leaving the country.

 

[Snowmelt]

Hailstones:
This story has a lot more layers than what you see in western public media.
The key is:
(1) She has her own film/tv show production company.
Problem 1
(2) Majority of income of these companies depend on movie grosses / tv ratings (nielsen, ex.)
(a) It has come out that the company (and the entire industry)
faked/paid for grosses and ratings points either through outright fraud
(think if CBS can pay Nielsen to increase NCIS ratings 5x higher, they can get
much higher ad rates), or literally paying people to attend movies
(b) This leads to higher revenues/profits, which leads to....
(c) fraudulent higher stock prices for her company. However, this same practice is similar to another
MUCH more lucrative scheme.
Problem 2
(3) Due to entertainment's complex web of networks like Hollywood, there are many ways to milk
money in China.
(a) Fan has her own company stock, so that is ok, BUT....
(b) due to her popularity, a lot of new media companies over the past 10 years have asked her to
promote their IPOs in exchange for "under-the-table" stock grants.
(c) these stock grants were put into shell company LLCs......
(d) she is not the only major entertainer in this scheme..... almost every single one in China is, since
it is literally milking money without effort.
(e) the key? these entertainers sell their stock immediately after the IPOs to avoid scrutiny of holding
stock ownership (not insignificant amounts - imagine if Google offered Tom Cruise $80M in
stock options just to show up at their IPO day, and Tom sells immediately the next day through a
Bahamas shell co to avoid taxation).
(f) So, they make "air" money out of selling stock on IPO day or week in 8 or 9 figures, avoid taxation,
all for less than a day's work, no expenses either. And they can rinse and repeat as many times as they
want.

Until this year.

However, above "true crime" aside, the social credit rating is a concern. Imagine if FICO expands its equations to include variables such as:
-gym membership
-type of car bought
-how much gas bought
-kids go to which school
-do you volunteer
-FB/Twitter/any other website's posts and comments
-voting patterns
-company's performance reviews
-school grades
-how many tickets you get for jaywalking/speeding/etc.

As an example, one Chinese citizen was barred from bank loans, and his daughter was prohibited from attending the best local private school, simply because he was caught jaywalking.

That system is coming here as well, since Google/FB are signing contracts with cc companies to obtain cc records for data mining. Add FICO to the system, and voila.... future "social credit rating".

Kevin C, what you have elucidated is a nightmare scenario.

People, no matter of what ilk, nation, or social class they spring from, seem to think it is OK to "cream" profits as long as nothing sticks. As you say, there is a name for that, outright fraud. Unfortunately, the "nothing sticks" plan has been dropped out the window by the Chinese navel-gazing social rating. When will people get it that if you think you are a swine, you will be, act, and create as if you are a swine? Even if you are the biggest something in China, if you are told you are a nothing and you think you are a nothing, you will be a nothing.

 

[Snowmelt]

en-msn.com has an update to this story (veracity of journalist/author unknown):

 

[Snowmelt]

Here is a relevant news article posted today.

http://www.msn.com/en-au/news/world/china-orders-actress-fan-bingbing-to-pay-massive-tax-fine/ar-BBNRvIC?ocid=ientp

It appears Fan Bingbing is being held up as an example to China's tax-paying citizens.

I do hope she did not undergo blank-slating and re-programming. I liked her in her natural state.

 

[Linda]

Gossip rags say she is hiding out here in the US.

 

[Kevin C]

I doubt she had a chance to escape before being detained.
Practically all of her assets are in China, so she's stuck.

She probably got a strong dose of Communist Party propaganda and "Xi values" teaching, but that's it.
I don't think she got brainwashed or any of the sort, more like a private and public shaming.

She is basically part of Xi's campaign to root out excess wealth, capital outflows and corruption.
Note the underlying motive: rich people who do not 100% support or are not part of Xi's cadre.

This is what socialism is really about - the privileged "few" determining who gets what, while it runs out of other people's money. So when you switch regimes, the rich have to figure out whether they can stay while "kissing new ass" or they have to give it all up and run. Hong Kong's richest, Li Ka Shing, saw this early and bailed out in 2011 right after the Hu-Xi regime change.

Check out what happened to all the top honchos at the biggest conglomerates in China: Dalian Wanda (owner of AMC, may be forced to sell), HNA (ex-owner of Hilton Worldwide), and many others. Even Alibaba's Jack Ma was forced to step down, but he was smart because his assets are all in the New York Stock Exchange, in Alibaba stock. So he planned far ahead in case this happens.

 

[Snowmelt]

Finger on the pulse, as usual, Kevin C. Thanks for the additional info.

I recently saw something that reminded me of the student riots in Tiananmen Square, and the crackdown on "dissidents" afterwards. There was nothing fair about it. It was brutal, swift, vengeful, scapegoating, and fatal to some. Idealism flies out the window in such moments, but the opportunity for spiritual growth is strong, up to an including accepting death as the price for speaking out. Whether we knew it or not, those people were also standing up for us.

 

[Linda]

She is not the only one. The president of Interpol, who is a Chinese man residing in France, has gone missing on a trip to China to visit his parents.

Meng Hongwei, the president of Interpol, was reported missing Friday morning after his wife told authorities in France she had not heard from him since he left for a family visit to China in late September.​

​

The South China Morning Post reported Friday that an unnamed source told them Chinese “discipline” authorities apprehended Meng for unspecified questioning as soon as he landed in the country. Prior to being elected to lead Interpol in 2016, Meng was a senior law enforcement and Coast Guard officials in the Chinese government.​

​

Meng lives in France, where Interpol is headquartered. Meng’s wife reported him missing on Friday, saying that he had not been seen since September 29, according to police sources. Police in France have reportedly confirmed that Meng arrived in China and did not disappear in France.​

https://www.breitbart.com/national-security/2018/10/05/interpol-president-disappears-on-trip-to-china/

 

[Kevin C]

Linda -
This is a completely different situation from that of a popular actress.

My guess is that given he was "elected" to Interpol and was already a senior law enforcement in China, that he was an insider agent planted in Interpol to understand their methods/practices/agents/networks/etc.
Considering he is the president of Interpol, that's a lot of access to very sensitive stuff.
I say he was probably "arrested" to give cover for his intelligence debrief.
Given the current situation with trade wars, military positioning, global tensions - the Chinese Communist Party is most likely calling all assets back and preparing for war on all fronts.

 

[Linda]

Considering he is the president of Interpol, that's a lot of access to very sensitive stuff.
I say he was probably "arrested" to give cover for his intelligence debrief.

Is Interpol that dense - not being facetious.

 

[Linda]

I know the Chinese have been playing the long game but wondered if this guy perhaps enjoyed the French lifestyle a little too much.

 

[Kevin C]

Haha.... I was shocked when I heard this news, that's for sure.
Interpol is rooted in Europe, and yet they "elected" a mainland Chinese "law enforcement" official as
their president. That's most likely code for Chinese intelligence.

I doubt it - even if he "loved" French lifestyle, keep in mind most of his extended family/friends are in the mainland. The Communist Party can threaten him.
Which means he probably had every incentive to maintain his loyalty.

Then again, who knows - maybe its a double blind - he is a double agent, recruited by MI6. If that were the case, it would make this way more complicated, like the movies.

So, assuming this isn't another "Spectre" plot, my Occam's razor logic, based on publicly available info, tells me he was a plant to learn Interpol's methods/networks on a long horizon, and when the time comes (as is now, given war footing), he is to go back and been "arrested" for debriefing.

 

[Linda]

Here is some info from the entertainment side of the mess. Fan is set to star alongside Jessica Chastain, Penelope Cruz, and others in an action movie that begins filming in 2019. Based on her appearance in the movie, an entertainment company bought the rights for distribution in China for a cool 20 million. All that is up in the air at this point, as it unknown if she will be allowed to make the film or if her social score, which is now zero will rise enough for the Chinese public to want to see her in a movie.

After becoming the subject of wild conspiracy theories over her well-being before resurfacing Oct. 3 in a state of deep contrition, Fan is also likely to also face consequences in the very realm that could save her from financial ruin: show business.​

​

Producers on her next gig, the international all-female action movie “355,” are prepared to fire and replace her should she not emerge from scandal in a manner that satisfies the government, film distributors and Chinese moviegoers, multiple individuals close to the project say. For now, the team is content to watch and wait, with production not expected to begin until spring of 2019.​

​

Any decision would specifically be made to please Huayi Brothers, the entertainment company that paid a hefty $20 million in May for the rights to release “355” in mainland China when the deal was packaged out of the Cannes Film Festival​

​

While the film will also star Jessica Chastain, Lupita Nyong’o, Penélope Cruz and Marion Cotillard, a top Chinese star would be crucial for any mainland distributor to recoup such a high rights fee.​

​

The state could also impose a media ban on Fan and force an acting hiatus, as it did in 2007 with Tang Wei, the breakout star of Ang Lee’s “Lust, Caution.” Tang was removed from all theatrical prints and advertisements for the film and did not work again for three years.​

​

https://variety.com/2018/film/asia/actress-fan-bingbing-tax-evasion-1202974463/