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All posts by RWZ

CNA: Three U.S. Senators Visited Taiwan

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, according to the American Institute in Taiwan (AIT, the de facto Embassy of the United States in Taiwan), three U.S. Senators will be visiting Taiwan on June 6. The visit intends to discuss topics on the U.S.-Taiwan relationship and regional security. Senator Ladda Tammy Duckworth (D), Senator Daniel Scott Sullivan (R) are members of the Senate Armed Services Committee, and Senator Christopher Andrew Coons (D) is a member of the Senate Foreign Affairs Committee, the Chairman of the Senate Ethics Committee, a member of Senate Committee on Appropriations, and a co-sponsor of the Taiwan Assurance Act (also known as the Taipei Act).  The Taiwan Ministry of Foreign Affairs said these U.S. senators are all long-term supporters of Taiwan, and they are prioritizing the visit to Taiwan to demonstrate their firm bi-partisan support of Taiwan in the U.S. Senate. This is the first international visit that the Senate Armed Services Committee planned to have, after the breakout of the Covid-19 Pandemic last year. The whole U.S. Senate visiting group includes ten people. A meeting with Taiwanese President Tsai Ing-wen is part of the schedule. [Editors Note: According to DW, the U.S. was expected to give 750,000 doses of COVID vaccine to the island. Taipei had accused China of blocking it from making a deal to procure doses from a German firm, but Beijing denied the accusation.]

Source: CNA, June 5, 2021
DW: June 6, 2021

COVID Is Shutting Down the Taiwanese Chip Making Industry

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the COVID pandemic is spreading in Taiwan, impacting various world-class chip suppliers in the semiconductor industry. The latest bad news came from King Yuan Electronics (KYEC), which is the world’s largest semiconductor packaging and testing company. The company announced a 48-hour suspension of operations due to a widespread group COVID infection affecting 45 workers. KYEC services major downstream chipmakers like MediaTek (Taiwan), NVIDIA (USA) and STMicroelectronics (Switzerland). Currently, Taiwan is the world’s number one provider of foundry as well as packaging & testing. It is also the world’s number two IC design provider. The Taiwanese semiconductor industry is currently the second largest in size, only after the United States. In the meantime, Malaysia, another major chip packaging & testing country, already closed down the entire country and manufacturing lines are keeping only 10 to 20 percent of their labor, just to keep the machines powered, with zero production output.

Source: Sina, June 6, 2021

No Major Chinese Cellphone Manufacturer Plans to Use Huawei’s HarmonyOS

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that Huawei just announced its mobile phone operating system HarmonyOS will replace Android and will challenge Google. However, none of the major Chinese domestic mobile phone heavyweights, such as Xiaomi, Oppo and Vivo plan to use HarmonyOS. It’s worth noting that Android is an open-source system and anyone can use it. What Huawei cannot use is the Google suite of applications (such as Gmail), which do not have a large share of the Chinese market. To the Chinese mobile phone manufacturers, the important part of a mobile device operating system is its ecosystem. The Mobile device hardware profit margin for these manufacturers is extremely narrow. Software and related services provide their primary profitable income, and Huawei’s new HarmonyOS has a very limited number of apps. Also, in the past, Huawei took a very competitive approach in dealing with other domestic manufacturers. The mobile vendors are very hesitant to rely heavily on Huawei. In fact, Google has been a lot more neutral than Huawei when developing business relationships with the Chinese manufacturers. Huawei used to promise not to enter the mobile phone market – then it became the world’s second largest mobile phone maker, crushing all domestic competitors.

Source: NetEase, June 4, 2021

China Surpassed Germany to Become Britain’s Largest Trade Supplier

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the British National Bureau of Statistics, in the first quarter, China became Britain’s largest supplier. This broke Germany’s number one position which it had held since 1997. In the first quarter, imports from China increased by 66 percent, to 16.9 billion pounds. In the meantime, imports from Germany declined by a quarter to 12.5 billion pounds. The increase on the China side was the direct result of the high demand for the personal protection products (PPP) for the pandemic. The German decline was largely caused by the shrinking car sales, also due to the pandemic. At the moment, the top five importing countries for the UK are China, Germany, the United States, the Netherlands and Belgium. China’s exports to Britain are mainly in three categories: machinery products, electronic equipment, and various chemical products. Britain’s exports to China grew mainly in the areas of machinery and transportation equipment. In addition to cars and fossil fuels, British exports also include products in the pharmaceutical industry and material manufacturing. London is the one city alone that has ranked number five among all British exporting areas.

Source: Sina, May 27, 2021

Global Times: U.S. Dollar Hegemony Crack Is Widening

The Global Times recently published a commentary analyzing the power of the U.S. dollar. The commentator indicated that the U.S. dollar’s reserve currency status is being weakened by the Euro, the Japanese Yen and the Chinese RMB. According to the International Monetary Fund (IMF), in the fourth quarter of 2020, the Euro held a 21 percent share in the global central bank currency reserve, which restored it to the same high level of six years ago. At the same time, the U.S. dollar fell to 59 percent, which was a 25-year low. This is the result of the U.S. government borrowing money from the world uncontrollably, and the U.S. Federal Reserve having no bottom line for its quantitative easing. The fact that the Biden Administration’s ambitious infrastructure investment plan kept shrinking its total size is very telling. Even many U.S. economists have said the Federal Reserve is running out of ideas after massively printing money. The U.S. inflation rate is reaching a very high level. This is triggering a global discussion of the need to put an end to the U.S. dollar’s hegemony. The Chinese RMB, with a significant share in the IMF’s SDR, cannot be underestimated, although the RMB has only a two percent share in the global currency reserve. The Euro and the Chinese RMB, via the IMF platform, should increase their weight in the global economy, along with other modern methods, like the digital currency and currency exchange agreements among central banks.

Source: Global Times, May 27, 2021

RFA: China’s New Regulations Caused Further Suppression of the Catholic Religion

Radio Free Asia (RFA) recently reported that, starting in May, China implemented its new “Measures for the Administration of Religious Staff.” The new regulations require that the staff members in all religious groups must support the Chinese Communist Party. Those Catholic clergymen who refused to join the Chinese Patriotic Catholic Association, which was blessed by the Communist Party but not recognized by the Vatican, were the first to face suppression. On May 21 and 22 in Hebei Province, hundreds of policemen surrounded a monastery and detained Bishop Zhang Weizhu, seven priests and more than 10 monks. Since the Hebei Xinxiang Diocese did not want to join the Patriotic Association, it was recognized as illegal under the new regulations; hence the crackdown. All Catholic families in the diocese were searched and fined for possession of Catholic symbols. The police also confiscated those Catholic symbols, their crosses, pictures of the Pope, statues or portraits of saints, and all of the religious symbols that they had.

Source: RFA, May 23, 2021

UK Started the Removal of Huawei Equipment

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that British Telecom (BT), in accordance with government regulations, has started removing all Huawei equipment in its Great Britain network. All Huawei equipment will be replaced by Nokia equipment. In addition to 5G equipment, all 4G Huawei equipment will be removed as well. This BT project will remove 12,000 of its 18,000 base stations. It will take ten years and cost US$700 million. To remove all Huawei equipment across the entire British communications system, it is estimated that the cost will be US$2 billion. That will delay Britain’s 5G deployment plan by at least three years. It seems the UK finally made up its mind, thanks to the threats from the United States. This may have a big impact on the Huawei global 5G strategy. However, the bigger loss is on the British side. Without the British market, Huawei is still the largest 5G equipment vendor due to the size of the Chinese market.

Source: NetEase, May 18, 2021

LTN: HK Government Suddenly Closed Representative Office in Taiwan

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the Hong Kong government just officially announced the suspension of the operation of the Hong Kong Economic, Trade and Cultural Office (HKETCO) in Taiwan, which is the Hong Kong government representative’s office. The announcement clarified that the suspension has nothing to do with the current pandemic situation in Taiwan. This move is widely considered as the first step in closing down The Taipei Economic and Cultural Office in Hong Kong, which is the representative office of the Republic of China (Taiwan) in Hong Kong. Currently the Hong Kong government has already stopped the renewal of visas to the personnel of the Taipei Office in Hong Kong. In the past few years, since Taiwan strongly supported the democracy movement in Hong Kong and the movement against the Hong Kong National Security Law, the Taiwanese government has had a difficult relationship with the Hong Kong government. Analysts expressed the concern that the suspension, along with the potential closure of the Taipei Office in Hong Kong will bring a lot of difficulties for the Hong Kong residents who want to move to Taiwan.

Source: LTN, May 18, 2021