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Huawei Smartphone Sales May Drop by 60 Percent in 2021

According to reports, Huawei expects that its smartphone shipments this year will drop by more than 60 percent to about 70 million units. Huawei’s smartphone shipments in the fourth quarter of 2020 fell by 40 percent. With the U.S. sanction in 2020, Huawei has faced unprecedented challenges in chip supply. Huawei’s suppliers had been notified to cut production.

 

According to Huawei’s report, Huawei’s revenue comes from operators’ businesses, companies’ businesses, and consumer’ businesses. The Consumer businesses that are represented by smartphones are an important part of Huawei’s revenue. According to Huawei’s 2020 semi-annual report, the 255.8 billion yuan sales from the consumer business accounted for half of the total sales revenue of 454 billion yuan in the first half of 2020. 

 

Recently, Huawei senior executive Duan Anguo stated that Huawei has launched a smart pig farming program. He believes that the breeding industry is moving toward digitization, intelligence, and unmanned operations. Huawei plans to apply machine vision and artificial intelligence technologies to pig farming.

 

Source: Finance and Economics, February 21, 2021

https://finance.sina.com.cn/tech/2021-02-21/doc-ikftpnny8822241.shtml

Briefings | | |   Economy/Resources US-China Relations

China’s Fertility Rate Continues to Fall

On February 8, 2021, China’s Ministry of Public Security released the 2020 annual report based on household registration information. The report stated that, as of December 31, 2020, there were 10.035 million newborns in 2020 registered with the public security departments. The number fell by 14.89 percent year-on-year, compared to the 2019 annual report. There were a total of 11.79 million newborns in 2019 registered with the public security departments.

The decline is also seen in the numbers released by the National Bureau of Statistics. The number of newborns in 2016 was 17.86 million, 17.23 million in 2017, and 15.23 million in 2018. On January 17, 2020, the National Bureau of Statistics announced that the total number of newborns in 2019 was 14.65 million.

In his article entitled, “The Implementation of the National Strategy for Active Response to the Population’s Aging,” China’s Minister of Civil Affairs, Li Jiheng expressed his concern about the substantial decline in the population base.

In his article, Li Jiheng said that under the influence of a number of factors, Chinese people are less willing to have children. The total fertility rate has fallen below the warning line and the population’s development has entered a critical transition period.

Source: Guancha, February 8, 2021
https://www.guancha.cn/politics/2021_02_08_580809.shtml

Briefings | | |   Economy/Resources Social Stability

Banks Backed by Ant and Tencent to Join China’s Digital Currency Pilots

China Securities Journal  reported that Zhejiang E-Commerce Bank Co., Ltd., (MYBank) backed by the Ant Group and WeBank backed by Tencent may participate in the digital currency pilot projects of six state banks. The status of the two private banks is “coming soon.” 

 

Beyond these two private banks, most urban small and medium-sized banks in China will connect to the central bank digital currency infrastructure via City Bank Clearing Services Co., Ltd. (“City Bank Clearing”). Rural Credit Bank Clearing will provide a conduit for rural banks to access the digital currency infrastructure. The Digital Currency Research Institute of the Bank of China entered into agreements with the two intermediaries last fall.

 

The digital currency is issued and regulated by China’s central bank. All transactions will be completely under China’s central bank’s supervision. In contrast, transactions through Alibaba Group’s Alipay and Tencent’s WeChat Pay are electronic payments controlled by the companies. 

 

Source: The Paper, February 20, 2021

https://www.thepaper.cn/newsDetail_forward_11388883

Briefings | | |   Economy/Resources Government/Politics

The Biden Administration Reached Out to China on Iran Nuclear Issue

According to China’s Ministry of Foreign Affairs, Robert Malley, the U.S. Special Envoy for Iran, recently had a conversation with Chinese Communist Party officials about the Biden Administration’s rejoining the 2015 Iran nuclear agreement. “On February 10, 2021, Vice Foreign Minister Ma Zhaoxu had a telephone conversation that the U.S. President’s Special Envoy for Iranian affairs, Robert Malley, who initiated the call, and the two sides had an in-depth exchange of views on the Iranian nuclear issue.”

The U.S. State Department declined to confirm the matter and stated, “Special Envoy Rob Malley is in the early stages of engaging Members of Congress, allies, partners, and others.”

Sources:
China’s Ministry of Foreign Affairs, February 10, 2021
https://www.fmprc.gov.cn/web/wjbxw_673019/t1853296.shtml
The Washington Free Beacon, February 15, 2021
https://freebeacon.com/biden-administration/state-dept-refuses-to-explain-iran-envoys-talks-with-china/

 

Briefings | | |   Geo-Strategic Trend US-China Relations

China’s New Regulation Restricts Online Self-publishers

On January 31, 2021, the Cyberspace Administration of China (CAC) announced that online self-publishers (also called We Media) must first obtain a “permit” before posting news information. The CAC will implement “review before publishing” management for live streaming and interactive content. It will focus on disruptions of the order on social media platforms that involve self-publishers.

Zhuang Rongwen, Deputy Minister of the CCP Central Propaganda Department and CAC Director pointed out that regardless of the nature of the platform, regardless of the form of communication, they must place a top priority on adherence to the correct political direction.

Earlier, on January 22, 2021, the CAC issued a new regulation to restrict China’s tens of millions of self-publishers on social media platforms even further. The regulation will be effective February 22, 2021. According to the new regulation, public accounts that “provide online news service to the public shall obtain the Internet News Information Permit and other relevant media accreditation.”

Sources:
People.cn, February 1, 2021
http://politics.people.com.cn/BIG5/n1/2021/0201/c1001-32018101.html
Cyberspace Administration of China, January 22, 2021
http://www.cac.gov.cn/2021-01/22/c_1612887880656609.htm

Briefings | | |   Government/Politics Social Stability

CCP to Extinguish Mongolian Language and Culture

A Chinese official notice shows that the Chinese Communist Party (CCP) is stepping up its efforts to extinguish the ethnic language and culture of the Inner Mongolia Autonomous Region.

Recently, the Education Department of Inner Mongolia Autonomous Region issued a notice dated January 8, 2021, to publishing houses. The notice stated that in the fall of last year, in accordance with the instructions of the China National Textbook Committee, the department conducted an “Ideological Special Investigation” and an audit of the textbooks such as Inner Mongolian History and Culture, Mongolian History, Hulunbuir History and Culture, Hetao History and Culture, and Korqin History and Culture (Trial).

The notice claims that the textbooks did not adequately highlight “the awareness of common roots.” Rather, they emphasized individual “ethnic identity” and “ethnic awareness.” As a result, the Department of Education of Inner Mongolia will ban the use of the textbooks of Inner Mongolia History and Culture, Mongolian History, and Hetao History and Culture starting from the spring semester of 2021. The textbooks of Hulunbeier History and Culture and Korqin History and Culture (Trial) will no longer be used starting in the fall semester of 2021.

In August 2020, the Inner Mongolian government mandated that primary and secondary schools must use Chinese, not Mongolian, as the language of instruction. The authorities implemented a unified Chinese language teaching plan. Hou Yuan, then Director of the Education Department, claimed that “textbooks reflect the will of the Communist Party and the State” and the use of unified textbooks was a “major decision” made by the Communist Party Central Committee. The mandate triggered massive resistance among the Mongolians. People worried that the unique Mongolian language and culture will be extinguished as a result.

Source: Radio Free Asia, January 18, 2021
https://www.rfa.org/mandarin/yataibaodao/shaoshuminzu/gf1-01182021052648.html

Briefings | | |   Social Stability

China Builds its Own Value Chain: Will Overtaking on a Curve Work?

Wu Jiemin, a researcher at the Institute of Sociology, Taiwan Academia Sinica, won the “Humanities and Society Academic Award” issued by the Academia Sinica for his book Rent-Seeking Developmental State in China: Taiwan businessmen, Guangdong Model and Global Capitalism. The book discusses in great detail the connections between China and global capitalism.

In an interview with Voice of America, Wu Jiemin said that China is trying to bypass the global value chain system controlled by Western countries to build a value chain system that Chinese capital can control on its own. The U.S.-China confrontation situation cannot be changed in the short-term. If China wants to succeed in the challenge, it must make a big breakthrough in science and technology. However, scientific and technological development is closely related to academic and free speech and China is currently under a highly authoritarian rule. Without freedom of thinking and speech, Wu doubts such “overtaking on a curve” would be successful.

According to Wu, one of the key features in China is a massive systematic and collective rent seeking undertaking. The so-called rent-seeking is a term in economics. The country is not directly engaged in production activities but intervenes in the industrial chain to extract a certain amount of interest. This interest is called economic rent or political rent.

Wu said that China has a special system design for extracting benefits, including value-added fees, management fees, approval fees for leased land, and social security fees. Further, local governments play an important and unique role. Rent-seeking activities in China are rampant.

“The local government acts like an intermediary or broker, which is to integrate the resources needed in various production processes to a certain extent. … In this process, the local government also obtains a lot of tax benefits from the manufacturers, including economic rents obtained from foreign capital and local manufacturers. This revenue becomes an additional income for the local government outside of its budget. Part of it goes to the hidden coffers for the officials, some goes to the personal pocket of the official and the rest becomes tax revenue to fund construction.” On the other hand, foreign investors in China are disgusted by the rent-seeking behavior of local officials, but they have to deal with them and seek their protection.

Wu believes that in the past 10 years, the Guangdong model transformation and the Chinese model transformation have focused on bypassing global value chain hegemony and trying to build a value chain system that Chinese capital can control by itself.

In Wu’s opinion, one side of China’s development model is its biggest gain in foreign exchanges and fiscal revenues that it has spent on the military, economic modernization, and urbanization. China’s subways, high-speed rails, and highways are examples. However, Wu said that the other side of China’s development model is high exploitation of labor, low welfare, and lack of human rights.

Source: Voice of America, January 20, 2021

https://www.voachinese.com/a/China-successfully-challenge-US-passing-global-value-chain-hegemony-build-his-own-self-capital-value-chain-20210120/5744700.html

Briefings | | |   Economy/Resources

Canada Bans Import of Forced Labor Products from China

In response to China’s violations of the human rights of Uyghurs in Xinjiang, the Canadian government introduced a series of new measures this week, including prohibiting domestic companies from doing business with companies that are involved in the forced labor of Uyghurs.

The series of measures include banning the importation of the products of forced labor and requiring Canadian companies to ensure that they do not export to China any products that may possibly be used for surveillance and the infringement of human rights. Canada will provide business consultation on Xinjiang related issues and conduct investigations on forced labor and supply chain risks.

A poll conducted at the end of December 2020 showed that 45 percent of Canadian respondents believed that Canada should reduce trade with China. Only 10 percent believe that trade with China should be increased.

Source: Voice of America, January 15, 2021
https://www.voachinese.com/a/canada-announces-new-measures-to-address-human-rights-abuses-in-xinjiang-20210115/5739655.html

 

Briefings | | |   Geo-Strategic Trend