Geopolitics

Beijing’s Most Important Five-Year Plan Yet

The top leaders of China's Communist Party are gathering this week to develop the latest roadmap for the country, which could supercede the U.S. in economic and military might as soon as five years from now.

China could become the world's top economic and military power by 2020
China could become the world's top economic and military power by 2020
Nicolas Barré

-OpEd-

PARIS â€" It's with Soviet-like objective that the highest dignitaries of China"s Communist Party Central Committee began gathering this week to draw up the 13th five-year plan that will be adopted in March. This latest roadmap for the country is the most important in Communist China's history. If the plan fulfills its objectives, China will be the world's top economic and military power beginning in 2020, taking over the position that has been occupied by the United States since 1890.

Chinese leaders are nevertheless aware of the difficulties ahead. They even recall that the Soviet Union collapsed before the end of its 13th plan! They will do everything so that the Communist Party of China, which has been in power for 70 years, avoids its Russian cousin's fate. For the five years of this 13th plan, China will either definitely establish itself as the world's premier superpower or will undergo major upheaval. In either case, the strategic consequences will be considerable.

Of course, the first scenario is the more likely. Chinese leaders have proved that they can maintain the objectives set by the five-year plans. The current economic downturn mustn't hide the fact that the 7% growth objective set by the 12th plan (covering years 2010 to 2015) will have been exceeded by nearly one point. The new target could be reduced to 6.5%, a figure that reflects the new "normal" of an economy amid transformation and an aging society.

The new plan, like the previous one, will set the country's priorities in every sector, from heavy industry to elementary school programs and the progressive end of the one-child policy. It will provide a new, more ambitious objective of energy consumption per GDP unit, an indicator that Chinese leaders follow very closely out of concern for energy efficiency. Finally, we will be anxious to see what words are used to describe the economic marketplace, probably less central in a context of a slowing economy and the rise of social risks.

The world will be better off if China proceeds without chaos. The country contributes to 32% of global growth â€" that is to say, one point out of the three predicted this year â€" and makes up for 30% of all investments in the world. This is why its fate is deeply linked to the West's. And it's also why we also need a plan regarding China. In Europe, we lack a strategy regarding a power that practices reciprocity according its own terms, with the strength that its new status gives it.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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