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Briefings

Global Times: If the U.S. Hikes Sanction on Computer Chips, China Has Counter Measures

Global Times recently published a commentary written by Ni Guangnan, one of the founding members of the China Engineering Academy and the former Chief Engineer of the Legend Group. Ni said that the United States seems to be preparing to mount more sanctions on computer chip exports to China. The new plan may cut off chips manufactured by China’s primary overseas chip supplier TSMC (Taiwan Semiconductor Manufacturing Company). Though this plan can significantly damage China’s high-tech industry, yet China does have some counter measures. One example is to ban U.S. 5G chips or products with U.S. 5G chips from the Chinese market. The potential damage on just Apple and Qualcomm alone will be around US$70 billion. China can also set limitations on government procurement of U.S. IT products, which will severely damage the U.S. Wintel ecosystem. Apparently, the U.S. is not just aiming at Huawei, but at the entire Chinese high-tech industry.

Source: Global Times, April 3, 2020
https://opinion.huanqiu.com/article/9CaKrnKqfUu

Beijing News: Multiple Countries Called Off Food Exports; Is China Safe?

Beijing News recently reported that, according to the Food and Agriculture Organization of the United Nations (FAO), food safety may become an issue in some countries and regions due to the lack of labor and to supply chain disruptions. The FAO expects the worst case may occur in April or May. Multiple food exporters are limiting or even banning the export of food. For example, Kazakhstan has banned exports of wheat, carrots, sugar and potatoes. Serbia has stopped exporting sunflower oil. Vietnam has also restricted rice exports and Russia has stopped exporting finished grains. China is seeing high volume of food purchases in many cities. China imports around 100 million tons of food every year, which is a quarter of the world’s food trade volume. China has enough wheat, rice and corn stock as well as the capacity to produce domestically. However, soybeans, which hold an 80 percent share of the 100 million annual food imports, may be impacted. However, the impact is not obvious at the moment. In the future, the bottleneck could be on the transportation side, since the United States and Brazil are China’s primary suppliers. A temporary halt could happen, yet it is expected to be a very short one.

Source: Beijing News, April 1, 2020
http://www.bjnews.com.cn/feature/2020/04/01/711816.html

LTN: Huawei Admitted Its Harmony OS Cannot Replace Android

Major Taiwanese news network Liberty Times Network (LTN) recently reported that the Huawei Western Europe Chief Vincent Pang admitted having “great difficulty” with handset sales. Pang said that, due to U.S. sanctions, Huawei lost its capability to bundle Google services on its smartphones. This heavily damaged Huawei’s international sales of consumer products. Huawei Chief Information Security Officer (CISO) Andy Purdy also complained about the U.S. sanctions which led to a cutoff of chip supplies from companies like Intel. It significantly limited Huawei’s growth. Huawei has its own Harmony OS, which was expected to replace Android to power Huawei’s smart devices. However, Huawei’s CEO of the Consumer Products Group, Yu Chengdong, recently told the U.S. technology magazine Wired that the company hopes to have the U.S. government’s permission to resume the partnership with Google, especially to use its Play Store. Yu said he would like to keep the Android ecosystem and the Harmony OS may need a couple more years to mature. Huawei also complained that the U.S. government still refused to open a dialogue with Huawei.

Source: LTN, April 1, 2020
https://3c.ltn.com.tw/news/39981

CNA: On April 4, Beijing Mourned the Dead while Netizens Fought Against Censorship and Demands Truth

In China, “404” means April 4, which is Ching Ming Festival or Memorial Day when people pay reverence of one’s ancestors in Chinese culture. Meanwhile it also means a webpage is deleted and “not found.” It often happens when words or content that are not liked by the authorities are deleted as soon as they are posted online. On April 4, while leaders in Beijing gathered together to mourn the death of the 2019 coronavirus disease, Chinese netizens were also commemorating the “404” on the internet. In addition to mourning the dead, they posted articles and comments criticizing the authorities’ act of covering up the truth and blocking comments on the internet. There were many commemorations and criticisms of the government appeared on the Internet while the authorities were busy deleting such postings at the same time.

On Sina Weibo, Chinese netizens expressed their helplessness and anger in a joking tone. Some people said: “It felt like a large-scale 404 site, and none of the postings I saw last night are still there.” “LOL(Laugh out loud)… complaining about 404 will indeed bring us 404.” Others have criticized: “If there was no 404, the flag wouldn’t be half way on April 4, nor will there be lock down and isolations, humanitarian tragedies, and economic crises all over the world.”

There are only a few articles left on the internet that are too late to be deleted or re-posted. Some people refused to follow the Chinese Communist Party officials to pay silence on this day because “I don’t like to have a special permission or to be arranged to show sadness. I think most people won’t Like it. ”
Another article stated that “On this day, please forgive me for not to participate. I don’t think this is a suitable time for the public ceremony. The epidemic is not over yet. There is still the possibility of more death from the epidemic. This feels like a unilateral announcement of a ceasefire when we don’t even know who is winning. This posting has been deleted since.

Source: Central News Agency, April 4, 2020
https://www.cna.com.tw/news/acn/202004040101.aspx

RFA: Rights Lawyer Wang Quanzhang Was Released and Placed under House Arrest

Wang Quanzhang, a rights activist who was sentenced to four and a half years was released on April 5th. The authorities placed him under house arrest in Jinan, Shandong, claiming it was “out of concern for COVID 19.” Li Wenzu, Wang Quanzhang’s wife and his son were in Beijing but they will not be able to meet with him.

Wang Quanzhang is one of China’s human rights lawyers. He handled sensitive cases in Beijing for many years and protected the interests of vulnerable groups, including Falun Gong, Christians, and farmers who lost their farmland. The police arrested him in 2015. The authorities launched a nationwide crackdown on Chinese lawyers and human rights activists on July 9. Wang was “disappeared” for more than a thousand days. He was released after his family made repeated demands and also as a result of pressure from the international community. He is also known as the last person released from the 709 crackdown case. More than 200 people were detained as part of the “709 2015 crackdown.”

Source: Radio Free Asia, April 5, 2020
https://www.rfa.org/mandarin/Xinwen/3-04052020113349.html

RFA: As More Retail Stores Are Put up for Sale, More Businesses Will Shut Down

COVID 19 has hit China’s economy hard, especially in the retail industry. In the Xinjiekou commercial area of Nanjing, Jiangsu province, some netizens took pictures which show that there were more than a dozen shops on the street with “For Sale” signs on them. Scholars believe that as the COVID 19 outbreak continues to worsen in the US and other Western countries, foreign countries will stop imports from China. Thus there will be more Chinese companies that will face bankruptcy. One resident in Wuhan said that many small businesses are trying to think of a backup plan. Once the lock-down in Wuhan has ended, many of the small businesses won’t be able to survive even with a loan from the government. This applies to retail business in Zhejiang, Fujian province and all the way to Helongjiang province in the northeast part of China. A retired Economics Professor at Sichuan University told Radio Free Asia (RFA) that there will be a wave of business shutdowns. As COVID 19 continues to spread around the world, more businesses will close. The impact is no different from a world war.

According to private surveys, nearly 30 percent of China’s population has no savings in the bank. Since the national economy has been shut down for the past two months, the local government’s fiscal revenue has also been greatly affected. Provinces and municipalities have recently announced their February fiscal revenue. Among them, Hubei is the worst. After deducting the income from land, the fiscal revenue fell 98.5 percent compared to the same period last year. Henan, the neighboring province of Hubei also fell 30 percent and Guangdong, a major export province, fell 27 percent. Most provinces and cities have fallen by more than 20 percent.

Source: Radio Free Asia, April 3, 2020
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-04032020055206.html

Beijing News: China and EU Decided to Set-up Temporary Appeal Arbitration Arrangement

Beijing News recently reported that, according to the Chinese Ministry of Commerce, China and the European Union, along with more than ten other WTO (World Trade Organization) member countries decided to establish a temporary appeal and arbitration arrangement while the official WTO appeal mechanism cannot function. The new arrangement will perform the WTO article 25 process to settle appeal and arbitration cases among participating countries. The dispute settlement mechanism is one of the core functions of the WTO. The official unit stopped functioning after December 11, 2019, due to certain member country blocking the judge selection process. China and other WTO member countries are working hard to notify the WTO of this new arrangement and welcome more countries to join. The participating countries in the temporary arrangement issued a Minister-level joint announcement on March 27, 2020.

Source: Beijing News, March 27, 2020
http://www.bjnews.com.cn/finance/2020/03/27/709985.html

Chinese Scholar: Recession Is Inevitable

Xu Xiaonian, a professor of economics and finance at the China Europe International Business School, said that as long as the pandemic in Europe and America is not over, Chinese export companies will have no orders, and a recession is inevitable. Xu made the remarks at the CEIBS Alumni Association on the evening of March 26 when discussing the outlook for the recent pandemic and the Chinese economy.

Xu Xiaonian said in his speech that the current rate of resumption of work is actually meaningless. “Where are the orders?”  He asked.

Xu believes that many of the online discussions about an international pandemic are “foolish.” As long as the pandemic in Europe and America is not over, China has no orders; workers have no wages and there is no consumption. “We are not able to finish the rest of the course by ourselves. We have to accompany the whole world to finish the entire journey. Only when the world economy returns to normal can China be normal. ”

“We can’t close the door and play by ourselves. We are not only short of food and oil, but we are also short of markets; we are short of orders. Our per capita GDP is one-fifth of that of the United States and one-fourth that of Europe. The domestic purchasing power cannot support our enormous manufacturing capacity.”

He also said, “We still lack raw materials, especially the technology-intensive basic raw materials, which must be imported from South Korea, Japan and Germany. We lack technology, and technology cannot be developed rapidly when we close the door.”

Source: Sina, March 30, 2020

https://cj.sina.com.cn/articles/view/2662090253/9eac460d01900lzr0?cre=tianyi&mod=pcpager_fintoutiao&loc=18&r=9&rfunc=100&tj=none&tr=9

LTN: The U.S. Aims to Cut Huawei’s Global Supply Chain

Major Taiwanese news network Liberty Times Network (LTN) recently reported that officials in the U.S. Trump administration have agreed to take new steps to reduce the global chip supply to Huawei significantly. The plan directly points to Huawei’s largest chip supplier TSMC. Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest dedicated independent semiconductor foundry, headquartered in Hsinchu, Taiwan. According to the newly proposed rules, the United States will have to certify any foreign companies that use U.S. chip-making technology or equipment before they can sell chips to Huawei. According to anonymous sources, the new effort was designed to stop TSMC from manufacturing chips for Huawei. It is still unclear whether President Trump gave the OK to this plan or not. He may have some hesitation because the implementation of this plan may not only hurt TSMC, but may also impact U.S. companies. Huawei refused to comment on the news and TSMC said it cannot comment on hypothetical questions and won’t discuss matters regarding any specific customer.

Source: LTN, March 27, 2020
https://ec.ltn.com.tw/article/breakingnews/3114302

Taiwan Liberty Times Net: Taiwan Launched Joint Air Defense Exercise in Response to the Threat the PLA Poses

Taiwan Liberty Times Net reported that, since the beginning of this year, despite the on-going spread of the Wuhan Coronavirus, the PLA has performed night time training activities and even flew across the Taiwan Straits Midline a minimum of five times. In response to the threat, on the morning of March 24, the Taiwan Ministry of National Defense launched the “Lianxiang” joint air defense combat training. The upgraded F-16V fighter was reported to have participated in the training. The “Lianxiang” exercise is normally done quarterly each year however it was performed specifically to target the excessive military actions that the PLA has performed.

Source: Taiwan Liberty Times Net, March 25, 2020
https://news.ltn.com.tw/news/politics/paper/1361242