On Monday, the U.S. government announced a diplomatic boycott of the Beijing 2022 Winter Olympics, the first time the U.S. has instituted an Olympic boycott of any kind since Russia held the Summer Games in 1980.

“The Biden administration will not send any diplomatic or official representation to the Beijing 2022 Winter Olympics and Paralympic games, given the PRC’s ongoing genocide and crimes against humanity in Xinjiang and other human rights abuses,” Jen Psaki, the White House press secretary, said at a briefing on Monday, explaining that U.S. athletes competing in the Games would have the government’s support.

Zhao Lijian, a spokesman for China’s foreign ministry, on Tuesday condemned the move and said the U.S. “will pay a price” for the boycott without providing details on retaliatory measures.

The Global Times, a state-owned nationalist tabloid, had a snarkier retort.

“To be honest, Chinese are relieved to hear the news, because the fewer U.S. officials come, the fewer viruses will be brought in,” the Global Times’ official account tweeted.

No doubt the Global Times comment was meant as a dig at America’s chaotic COVID response. But it’s also a de facto acknowledgment that China will host the global event while maintaining some of the world’s strictest COVID-19 curbs.

And due to those rules, it is unclear how many diplomats or ministers will show up—with or without boycotts.

In its initial playbook published in October, the International Olympic Committee and Beijing 2022 organizers laid out the rules diplomats, government ministers, and any other approved “games participants” like press would have to follow in order to attend the games (there is a separate guide for athletes and other foreign spectators are banned).

With more restrictive measures than Tokyo enforced at its recent Summer Olympics, Beijing 2022 will take place in a bubble it calls a “closed-loop management system.” All attendees will get tested twice in days before flying to Beijing and are mandated to download a health app called ‘My 2022’ to input personal information and health records. Those who are vaccinated will be able to skip quarantines. The unvaccinated will be isolated in hotel rooms for 21 days before entering the bubble.

Once in the bubble, attendees will only be allowed to travel between their hotels and games-designated venues. They will also be asked to avoid confined spaces, wear face masks at all times, and to keep one to two meters away from athletes or anyone else in the bubble—not the most conducive environment for the sort of diplomatic hobnobbing that officials may have looked forward to in Games. In 2008, then-President George Bush met with top Chinese officials, celebrated gold medal victories with athletes like swimmer Michael Phelps, and discussed geopolitics with Russian President Vladimir Putin when he attended the Beijing Games.

But with such a freewheeling trip impossible amid COVID, combined with political pressures to boycott, the prospect of attending the Games does not appear as appealing. On Tuesday, New Zealand also announced it’s not sending government ministers to the Games, saying the reasons “mostly had to do with COVID.”

On a practical level, the U.S.’s boycott may be meaningless given the low likelihood that top U.S. officials would have been willing to endure the intensive social distancing requirements.

But symbolically the boycott threatens to spoil China’s party before it even gets started. Other governments and corporate sponsors may follow the U.S.’s lead, undermining what was meant to be a representation of China’s continued rise as a global power.

“The Chinese government would not achieve what it actually hoped to gain from these Games: a positive presentation and thus, above all, stronger support of the country,” Jürgen Mittag, a sports diplomacy expert at the German Sports University in Cologne, tells DW.

Beijing’s 2008 Summer Olympics signaled the country’s debut on the global stage, but Beijing’s 2022 Winter Olympics threatens to signal its isolation and retreat.

Grady McGregor
grady.mcgregor@fortune.com

This edition of Eastworld was curated and produced by Yvonne Lau. Reach her at yvonne.lau@fortune.com  

Eastworld News

An ambassador’s resignation

Canada’s ambassador to China, Dominic Barton, has announced he’s resigning from his post effective Dec. 31. Barton helped mediate the September release of Canadians Michael Kovrig and Michael Spavor, who were detained in Beijing for 1020 days; the diplomat called the task an “honor of a lifetime.” Canadian Prime Minister Justin Trudeau commended Barton's leadership and skilled diplomacy. In an exit statement, Barton said that the relationship between Canada and China “is of critical importance to our future." South China Morning Post

Myanmar’s ‘sham trial’

A Myanmar court has sentenced former country leader Aung San Suu Kyi to two years in prison (reduced from an initial four-year sentence) for inciting public unrest and breaking COVID-19 rules. United Nations human rights chief Michelle Bachelet called the proceedings a “sham trial.” Aung San Suu Kyi—who faces 11 charges in total, which could lead to a life sentence—has been held in detention since a military coup ousted her civilian government in February. Her next court date is Dec. 14. New York Times

Team China

The International Ice Hockey Federation (IIHF)—ice hockey's governing body—has yet to decide whether to ban the China men's team from the Beijing 2022 Winter Olympic Games' ice hockey tournament next February. As a host nation, Team China would normally automatically qualify to compete at Beijing 2022, but the IIHF could boot Team China for "insufficient sporting standard." China, since winning the Olympic bid in 2015, has invested millions in youth hockey leagues and ice hockey infrastructure, and recruiting foreign ice hockey players to play for the country. However, the consensus is that Chinese Olympic organizers have largely failed in creating an Olympic-worthy ice hockey team. Fortune

A $10 billion coal divestment

Hong Kong's AIA Group—Asia’s largest, publicly-listed life insurance group valued at $127 billion—announced in an official Tuesday statement that it had sold off all its equity and fixed income coal investments in October, seven years ahead of schedule and becoming the first major Asian insurer to end their coal exposure. The insurer will make "no new investments in businesses directly involved in coal mining or generating electricity from coal," the statement said. Asia's insurance and reinsurance firms have traditionally lagged behind their European peers in terms of climate commitments and coal divestments. AIA's move gives a "strong boost" to Asian regulators trying to encourage listed companies to move on climate issues, says one Asia-based climate consultant. Fortune

Markets and Movers

China tech – On Tuesday, China tech stocks rebounded as investors flocked to bargain buys after Chinese policymakers announced moves to bolster the economy given the ongoing property downturn. Shares of embattled e-commerce giant Alibaba jumped by 12%; Hong Kong’s Hang Seng Tech Index surged as much as 4.2%. Citigroup on Monday said ride-sharing firm Didi’s delisting from the U.S. is an “isolated case,” and concerns over immediate delisting of Chinese ADRs are “overdone.”

MapmyIndia – Goldman Sachs, Morgan Stanley and ICICI Bank are among the institutions bidding to become anchor investors in MapmyIndia's IPO. The Indian digital mapmaker has set aside around $53 million of stock for anchor investors, and has received bids for more than 30 times that amount, according to a Bloomberg source. The startup, backed by semiconductor firm Qualcomm, builds digital map data and location-based software. MapmyIndia is scheduled to start trading on Dec. 21. Unlike several other tech firms who have recently debuted on India's stock markets, like Zomato and Paytm, MapmyIndia is profitable. 

Terra’s Luna – Last week, Terraform Labs’ Luna coin (LUNA) had its best week ever. On Dec. 4, amid a colossal cryptocurrency selloff, Luna hit all-time price and market cap highs of $75.56 and $29.3 billion, respectively. The South Korean blockchain firm’s coin became the No. 10 token worldwide—surpassing Dogecoin, Shiba Inu coin and Ethereum challenger Avalanche.

Ray Dalio on China – On Sunday, billionaire investor Ray Dalio wrote on Twitter that his comments in an TV interview referencing China’s human rights were misunderstood. Dalio had compared China to a “strict parent” when asked about the disappearance of dissidents in China. Dalio's comments sparked a backlash, including from Republican senator Mitt Romney who accused Dalio of feigning "ignorance of China's horrific abuses and rationalization of complicit investments there." On Twitter, Dalio acknowledged that he “sloppily answered a question about China,” and was trying to explain China’s governance approach as an extension of Confucian-based family ideals. 

VNG – Vietnamese online gaming and tech unicorn VNG is exploring fundraising options ahead of a potential U.S. listing, according to a Bloomberg report. Backed by investors like Singapore’s sovereign wealth fund GIC and California’s B Capital Group, VNG is seeking $200-300 million from new and existing investors to help boost its expansion plans. The company, which was previously considering a SPAC listing on the Nasdaq, is now leaning towards a traditional IPO, according to the report.

Final Figure

70%

China has one of the highest savings rates in the world. Chinese savers traditionally park their money in real estate, with 70% of China’s household wealth stored in property. But the country’s recent property market slump—sparked in part by real estate developer Evergrande’s $300 billion debt crisis—is leading Chinese citizens towards other forms of investments such as stocks and mutual funds, which the government has been promoting for many years to reduce the country's overreliance on the property market. Daily trading volume in China’s A-share market, where retail investors make up 80% of turnover, held above $155 billion since July—double the daily average in 2019 and 2020.