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Hutong Cat: The Fall of China’s Queen of live streaming

Hutong Cat: The Fall of China’s Queen of live streaming

A government slaps an enormous penalty of $210 million (1.34 billion yuan) on an individual for something like tax evasion when it wants to send a message. If the individual is a celebrity, it helps. The measure of punishment is the message here. The message goes out to all those below the individual most exposed at the top of the ladder, to those who are looking up, eager to follow the leader. The government wants to send the message that the ladder is held by someone who can shake if it is necessary to deliver a message, and deliver it fast and strong. Huang Wei, 36, who went by the moniker Viya, was at the summit of China’s live streaming ladder.Until last week, China’s “queen of livestreaming” was spoilt for choice if asked to describe the peak of her career in the past few years. Was it when she shared the screen with Kim Kardashian to sell the global socialite’s perfumes? Or when model and businesswoman Miranda Kerr wrote her profile for Time Magazine’s 2021’s most influential? Or was it when she sold a rocket launch service – yes, a rocket launch service -- for a discounted $5.6 million (40 million yuan) last year? She made a lot of money, by some accounts more than a billion dollars, on Taobao, China’s signature e-commerce platform. Huang could sell anything. Earlier this week, the tax department of the prosperous Hangzhou city, a city of placid lakes and Alibaba, in eastern China’s Zhejiang province imposed a $210 million fine on her for evading tax in 2019-20. Huang allegedly “evaded 643 million yuan of taxes through means such as concealing personal income and false declarations” between 2019 and 2020. The fine was imposed on Huang Wei “…in the collection of taxes, additional late fees and fines,” the official statement said. Punishment meant job loss. Huang’s multiple social media accounts with tens of millions of followers were deleted in an official finger-snap; she was dumped and discarded in the special hell of obscurity reserved for celebrities found guilty by the Communist Party of China (CPC). The decision to penalise her was a bit surprising though. Huang seemed to be in the CPC’s good books, dutifully doing her social responsibility bit, until recently. There is little doubt that Huang had the support of the ruling party who awarded her, made her the face of an e-commerce-led rural poverty alleviation programme and even bestowed her a prized seat at the national broadcaster China Central Television’s (CCTV) annual Spring Festival Gala this year The television Gala is a widely watched – hundreds of millions by official count -- Chinese new year programme for which the participants are carefully selected by the state. She was at the forefront of a campaign to promote e-commerce in agriculture and to boost China’s rural economy. This is what China’s official news agency, Xinhua, had to say about Huang in a glowing profile in March this year: “Over the past four years, Viya has helped poverty-stricken households sell agricultural products worth nearly 600 million yuan in total…In 2020, Viya was honoured with a national award for her efforts in poverty alleviation and the title of March 8th Red-Banner Individual Holder, one of the highest honors given to the country’s outstanding women by the All-China Women’s Federation.” So, what happened? Victor Shih, expert on Chinese politics at University of California, San Diego, linked Huang’s case to President Xi Jinping’s “common prosperity” campaign. “The tax justification of recent detentions clearly manifests as an aspect of the “common prosperity” drive which calls for the wealthy to share their wealth with the common people in China,” Shih said. The decision was dyed in populism. “Again, the influencers are widely seen as wealthy and corrupt, so forcing them to pay taxes strikes a note of populism. However, the wealthiest and the most corrupt elite play in the stock market, and we have not seen a crackdown in that sector yet. Of course, any major crackdown will slow down economic activities in that sector,” he added. The other narrative is that it was only a step taken to regulate the live streaming sector in China following an unregulated boom in the last couple of years. “China is simply regulating this sector (so) that the tax evasion that prevailed in the sector is now regulated. The live streaming sector itself is as good as it was,” Chen Jiahe from the Novem Arcae Technologies said. There’s no doubt that the numbers in China’s live streaming sector are extraordinary, meaning there’s a lot of money involved. “The value of China’s live-commerce market grew at a compound annual growth rate (CAGR) of more than 280 percent between 2017 and 2020, to reach an estimated $171 billion in 2020. This growth spurt has been intensified by the Covid-19 pandemic, and Chinese sales are expected to reach $423 billion by 2022,” a report by US-based management consulting firm, McKinsey said in July. According to Beijing-based iResearch, the number of live-streamers in China has gone up exponentially since 2018. “The number of streamers has been growing and hit 1.23 million at the end of 2020,” the firm said in a report in September. The corresponding numbers in 2018 and 2019 were 149000 and 275000. The official narrative is that following the focus on Viya, at the top of the live streaming ladder with Austin Li Jiaqi, also known as the “Lipstick King”, the million others will fall in line. The scrutiny is “part of a broader move to steer the internet economy toward a healthier and strictly law-abiding growth path,” said a state media report. The narrative obfuscates. It doesn’t explain what exactly happened to Viya, it doesn’t logically chart her fall – her fantastic growth in the last few years surely didn’t go unnoticed by CPC watchdogs; that she was dumped soon after her work was recognised by the government and acknowledged by Xinhua just don’t add up. Why were government departments and agencies lining up behind her until recently? It adds to the intrigue. Viya apologised after being penalised. “I’m deeply sorry about my violations of the tax laws and regulations ... [and] I thoroughly accept the punishment made by the tax authorities.” “Give a man a fish, feed him for a day. Teach a man to fish, feed him for life”, the news agency, Xinhua quoted Viya as saying in the article published in March, adding that farmers are being taught how to integrate with the current e-commerce boom. I wonder what the message to the farmers is now that Viya has gone bust. This is a modal window. Beginning of dialog window. Escape will cancel and close the window. End of dialog window. This is a modal window. This modal can be closed by pressing the Escape key or activating the close button..

world-news 2021-12-29 hindustantimes