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All posts by RWZ

Saudi Arabia Places Two Large Orders with Chinese Companies

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Saudi Arabia’s sovereign fund Public Investment Fund (PIF), Saudi energy equipment company Vision Industrie and China’s second largest wind turbine manufacturer Envision Group have reached an agreement to build a wind turbine manufacturing plant in Saudi Arabia to promote the Kingdom’s renewable energy production goals. The joint venture will carry out localized production and manufacturing of wind turbines and key components. At the same time, Saudi Arabia is also vigorously developing energy storage facilities to improve the reliability of the power grid. Since Saudi Arabia proposed its “Vision 2030” plan, the country has committed to developing renewable energy to accelerate the green transformation.

Chinese photovoltaic company Sungrow announced that the company signed a contract with Saudi Arabia’s Algihaz for the world’s largest energy storage project, with a capacity of 7.8GWh. The three sites of the project are located in the Najran, Al Madaya and Khamis Mushait areas of Saudi Arabia. Delivery is expected to begin in 2024, and the connection to the grid at full capacity will be in 2025.

Previously, Chinese technology company Huawei also announced its cooperation with Saudi Arabia to build an off-grid battery energy storage system for the Saudi Red Sea New City project. Under the leadership of Huawei, this energy storage project has recently reached 1.3GWh capacity. Saudi Investment Minister Khalid Al-Falih said last December during his visit to China that, Saudi Arabia invites Chinese companies to participate in the green transformation supply chain. Both in the capital city and throughout the Kingdom, there is a large workload that requires China’s participation.

Source: Sina, July 16, 2024
https://k.sina.com.cn/article_1887344341_707e96d501901hx78.html

Briefings | | |   Geo-Strategic Trend

U.S. to Introduce Regulations Restricting Chinese Automotive Software

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that the U.S. Commerce Department plans to release rules on “connected cars” in August and is expected to impose restrictions on some parts and software produced by China and other countries that are seen as adversaries. The rules will not apply to the entire car, but rather to some management software and key driver components that manage car data. These components must be produced in U.S.-allied countries.

There are a lot of software capabilities in modern smart cars. They may be able to take photos, engage with the driving system, connect to smartphones, and know where the car is going. In May of this year, U.S. Commerce Secretary Gina Raimondo said that, after the U.S. government’s risk assessment on Chinese car imports, “extreme actions” may be taken to ban or restrict Chinese-made cars. California’s privacy regulatory authority said it would examine the growing amount of data collected by smart cars.

The Chinese Ministry of Foreign Affairs has urged the United States to “respect the laws of the market economy and the principles of fair competition.” China call on the United States to stop its “generalization of the concept of national security” and to “stop discrimination against Chinese companies.”

Source: NetEase, July 17, 2024
https://www.163.com/dy/article/J7AR2HKC051481US.html

Briefings | | |   US-China Relations

China Times: China Announces Suspension of Talks with U.S. on Arms Control and Non-Proliferation

Major Taiwanese newspaper China Times recently reported that Mainland China is dissatisfied with the United States’ continued arms sales to Taiwan. China just announced that it has suspended negotiations with the United States on nuclear non-proliferation and on arms control issues.

The United States and China held arms control and non-proliferation talks in Washington last year. As of last week, however, China’s Ministry of Foreign Affairs stated at a press conference that the United States “has ignored China’s firm opposition by continuing arms sales to Taiwan. This has seriously damaged China’s core interests, undermined political mutual trust between the two sides, and seriously undermined the political atmosphere for the two sides to continue arms control talks.”

The Taiwanese Ministry of Foreign Affairs said it pays close attention to the exchanges and dialogues between the United States and China. The Taiwanese Ministry of Foreign Affairs had no comment on the recent statement from Beijing.

Source: China Times, July 18, 2024
https://www.chinatimes.com/cn/realtimenews/20240718002264-260407?chdtv

Briefings | | |   US-China Relations

UDN: China Sanctions Six US Companies and Five Executives

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that, due to dissatisfaction with the U.S. arms sales of attack drones to Taiwan in June, the Chinese Ministry of Foreign Affairs just announced it will take countermeasures against six U.S. military companies and five senior executives.

On June 18, the United States announced the sale of two attack drone models to Taiwan, including Switchblade 300 and Altius 600M-V, for a total of US$360.2 million. This is the 15th U.S. arms sale to Taiwan under President Biden. China announced that, according to China’s “Anti-Foreign Sanctions Law”, for six companies, including Anduril Industries, Maritime Tactical Systems, Pacific Rim Defense, AEVEX Aerospace, LKDAerospace, and Summit Technologies Inc., their movable, immovable, and other types of properties in China will be frozen.

For two top executives of AeroVironment and three senior executives of Anduril, China have frozen their movable, immovable and other types of properties in China. China also prohibited organizations and individuals in China from conducting relevant transactions, cooperation and other activities with these individuals, who will not be issued Chinese visa and are not allowed to enter China (including Hong Kong and Macau).

Source: UDN, July 12, 2024
https://udn.com/news/story/7331/8091885

Briefings | | |   US-China Relations

Lianhe Zaobao: Germany Starts Removing Huawei and ZTE 5G Components

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the German government has imposed a ban on Chinese telecom equipment giants on national security grounds and will remove Huawei and ZTE components from Germany’s 5G network in two phases over the next five years. The German Interior Ministry negotiated an agreement with three domestic telecom providers operating 5G networks to protect Germany’s critical infrastructure from Chinese influence. This is Berlin’s latest move to reduce economic dependence on Beijing, a dependence which some fear could leave Germany vulnerable.

The three domestic German telecom operators are Deutsche Telekom, Vodafone and Telefonica Deutschland. According to their agreement with the German government, these telecom operators will remove key components of Huawei and ZTE Technologies from the 5G core network by the end of 2026 and will replace all components of Huawei and ZTE Technologies in the 5G network access and transmission infrastructure by the end of 2029.

The German government has informed Beijing about the agreement and does not expect retaliation for the move. Other European countries including the UK, Denmark, Sweden, Latvia, Estonia and Lithuania have already imposed bans on components from Huawei and ZTE. The United States began to impose restrictions on the use of Huawei equipment as early as 2019. Germany is considered to have lagged behind in implementing EU 5G network security measures.

The Chinese Embassy in Germany criticized Germany’s move on its official website, saying “the so-called cyber security risks are just an excuse.”

Source: Lianhe Zaobao, July 12, 2024
https://www.zaobao.com.sg/news/china/story20240712-4249314

Briefings | | |   Geo-Strategic Trend Information/Technology

CNA: BMW Quits Price War in China

Primary Taiwanese news agency Central News Agency (CNA) recently reported that China’s auto market has been in serious trouble, and German luxury car brand BMW has been actively cutting prices since last year to maintain its market share. It now seems that BMW China will withdraw from China’s price war and adopt a new strategy of “volume reduction for price protection.” This became the hottest topic on Chinese social media at one point a few days ago.

According to local media reports, BMW China has been actively cutting prices. The average discount rate on BMW sales in 2023 was 17.66 percent. BMW delivered 825,000 vehicles last year in China, an annual increase of four percent. These delivery numbers came at the cost of a sharp decline in BMW’s profits, which fell more than 30 percent year-over-year.

In the first half of this year, BMW sold 375,947 vehicles (including the Mini brand, which is owned by BMW), with sales down four percent year-over-year. Now, price cuts are hurting both profit and sales. A BMW China salesperson revealed that the prices of all models will be adjusted upwards starting from July 10, and there will be another price increase after July 15. All previous price-cut offers will be cancelled.

Another German luxury car brand, Mercedes-Benz, has also entered the price war. Mercedes sales in the first half of the year also fell by nearly six percent. Mercedes has not made any official remarks regarding its pricing strategy. Meanwhile, Porsche sales China in have been even worse. In the first half of the year, Porsche sales in China totaled only 29,551 units, a 33 percent decrease from the same period last year.

Source: CNA, July 12, 2024
https://www.cna.com.tw/news/acn/202407120327.aspx

Briefings | | |   Economy/Resources

CBN: Indonesia to Impose High Tariffs on Certain Categories of Imported Products

China Business Network (CBN) recently reported that, Indonesian Trade Minister Zulkifli Hasan said not long ago that Indonesia will impose safeguard tariffs of 100 percent to 200 percent on imported products ranging from footwear to ceramics and restart plans to protect domestic industries. This new tariff policy will take effect after the relevant regulations are finalized, and may also affect the import of clothing, textiles, and cosmetics. According to data from Statistics Indonesia, Indonesia mainly imports clothing and clothing accessories from China, Vietnam and Bangladesh. The Indonesian government said that it would first launch two protective measures for textiles and textile products, namely the safeguard import tax (BMTP) and the anti-dumping import tariff (BMAD), to protect the local industry from the surge in imported textiles.

Multiple Chinese import/export businesses commented that, if high tariffs are imposed, it will obviously slow down the trend of purchasing directly from Chinese export companies. Indonesia has recently revealed that one of the main reasons to have additional safeguard tariffs is to keep the American orders for domestic companies. Nowadays more and more Chinese companies have begun to build factories locally in Indonesia. Analysts expressed the belief that, with the global reorganization of supply chains, Chinese companies going overseas is an increasingly important trend. For Chinese entrepreneurs, on one hand, they need the courage to go out, and on the other hand, they need the necessary new knowledge and skillsets.

Source: CBN, July 1, 2024
https://m.yicai.com/news/102173785.html

Briefings | | |   Geo-Strategic Trend

UDN: Amazon E-Book Store Officially Withdraws from China

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that, Amazon China announced on its official website on June 30 that the Kindle China e-book store has ceased operations on June 30, 2023, and will stop cloud download services on June 30, 2024. After that, undownloaded e-books will not be available for download. Already downloaded e-books will remain readable on the local Kindle device. Kindle customer service will also remain only until June 30, 2024. After the news of Kindle’s complete withdrawal from the Chinese market came out, many Mainland China netizens expressed regrets on “yet another foreign investor leaves China.”

Amazon initially launched Kindle in 2007, setting off a global e-book reading craze. Kindle officially entered the Mainland Chinese market in June 2013. In 2018, the sales of Kindle Readers in China exceeded one million. Amazon announced in 2022 that its e-book business will withdraw from the Chinese Mainland market in three phases.

Source: UDN, July 1, 2024
https://money.udn.com/money/story/5603/8065269

Briefings | | |   Information/Technology US-China Relations