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Huawei’s Net Profit Dropped 68.7 Percent Last Year

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Huawei released its 2022 annual report. The report shows that Huawei’s global sales revenue was RMB 642.3 billion yuan (around US$93.5 billion), a year-over-year increase of 0.9 percent, and its net profit was RMB 35.6 billion yuan (around US$518 million), a sharp decrease of 68.7 percent year-over-year. In 2022, Huawei’s sales in the high-end smartphone market fell sharply by 44 percent year-over-year, and its share in the high-end smartphone market further dropped from 5 percent in 2021 to 3 percent. Regarding Huawei’s return to the 5G smartphone market, Huawei’s rotating chairman responded that the mobile phone business has been most affected by the U.S. sanctions, from the second in the world to “others.” Currently Huawei can only make 4G phones. To buy a Huawei 5G mobile phone, one would have to wait for permission from the U.S. Department of Commerce. Huawei also confirmed its strategy of not building cars, but helping car companies build good cars. According to Huawei’s CFO, in 2022, Huawei’s operations faced greater pressure. Overall, the operating performance was in line with expectations. At the end of 2022, Huawei’s asset-liability ratio was 58.9 percent  and its net cash balance was RMB 176.3 billion yuan (around US$25.7 billion), showing a stable financial position.

Source: Sina, March 31, 2023
https://cj.sina.com.cn/articles/view/7501277582/1bf1c698e02001dxw4

Briefings | | |   Economy/Resources Information/Technology US-China Relations

China’s People’s War to Be Used against Taiwan

From PLA Daily: China’s People’s War to Be Used against Taiwan:

China’s military newspaper published an article advocating that Mao Zedong’s people’s war should be applied  to and used against Taiwan. The People’s Liberation Army Daily (PLA Daily) ‘s article of March 30, 2023, is viewed as a sign that Beijing has included both military and political considerations in its military reunification efforts against Taiwan.

The article stated that the people’s war is a strategy and it is also the method used in a just war for national independence, for the people’s liberation, and for national prosperity. It also generally adheres to the fundamental principle of defensiveness.

The article said that the integrity of the strategy and tactics of the people’s war emphasizes both military and non-military means leveraging each other as one holistic strategy of politics, economy, diplomacy, public opinion, and military forces.

The article expressed that the people’s war requires the mobilization of the whole country to overcome local deficiencies and disadvantages so as to defeat this “powerful opponent.”

The article also said that active defense is a product of the people’s war and it is also the fundamental requirement to carry out the war of justice effectively.

The article further stated that the people’s war strategy reminds the military of the political aspects that should be taken into account. In addition, it suggested that the protests that occurred in Hong Kong should be avoided in Taiwan.

According to analysts, Beijing has mentioned that the people’s war should be carried forward and based on active defense. China has always regarded the military reunification with Taiwan as a defensive operation because Beijing views Taiwan as China’s territory.

Source: The PLA Daily, March 31, 2023                                                                                                                                                                                                          http://www.81.cn/yw_208727/16213136.html

Briefings | | |   Defense/Military Geo-Strategic Trend

Kindergartens Have Shut Down Due to a Drop in Population

The impact of the One-Child policy continues to surface in China. In 2022, 46.28 million children were in kindergarten, a decrease of 1.78 million in population from the previous year. This has also led to kindergarten closures. The number of kindergartens dropped from 2.94 million in 2021 to 2.89 million in 2022, a loss of 5,000. This is the first-time the number of kindergartens has decreased in the past 15 years.

Seeing that its One-Child policy has resulted in a big reduction in new-borns, the Chinese Communist Party (CCP) switched to a two-child policy, boosting the new baby population to 18.83 million in 2016 and over 17 million in 2017. But it didn’t last long and free fall came back quickly. The new-born population dropped to 15.23 million in 2018, 14.65 million in 2019, and 12.00 million in 2020.

Source: Sina, March 24, 2023
https://edu.sina.com.cn/l/2023-03-24/doc-imymyqqc8479107.shtml

Briefings | | |   Economy/Resources

Top Officials Will Report Work to the CCP Central Committee and to Xi Jinping

Xinhua News Agency reported on March 2 that, “According to the relevant provisions of the Party’s Central Committee, members of the Politburo; the Secretaries of the Party’s Central Committee Secretariat; members of the CCP committees at the Standing Committee of the National People’s Congress, the State Council, and the National Committee of the Chinese People’s Political Consultative Conference (CPPCC); and the Party Secretary of the Supreme People’s Court and the Supreme People’s Procuratorate shall report to the Party Central Committee and to General Secretary Xi Jinping in writing every year.”

All these officials are at the State level or Vice-State level. There are 24 members (including Xi Jinping) in the party’s Politburo, 7 Secretaries at the Secretariat, 10 members at the Congress’s party committee, 10 members at the State Council party committee, 12 members at the CPPCC party committee, one party secretary of the Supreme Court, and one party secretary of the Supreme Procuratorate. Excluding overlapping counts, a total of 57 officials will report to the CCP Central Committee and Xi Jinping.

Source: People’s Daily, March 3, 2023
http://politics.people.com.cn/n1/2023/0303/c1024-32635242.html

Briefings | | |   @CS Government/Politics

The CCP Provided a Downgraded Reception for Former Taiwan President Ma Ying-jeou

Taiwan’s former President and former Kuomintang Chairman Ma Ying-jeou arrived in China on March 27 to worship his ancestors. Political observers take his reception in China as the Chinese Communist Party’s (CCP’s) countermeasure to Taiwan President Tsai Ing-wen’s trip to the U.S. at the same time.

Reports showed that the CCP provided a much lower level of reception to Ma than what he had expected:

  • The CCP called him “Mr. Ma Ying-jeou” instead of “President Ma Ying-jeou.”
  • Ma did not receive a “Presidential treatment” at the airport.   Ma’s team expected to see Ding Xuexiang, member of the Standing Committee of the CCP Politburo, a state-level official to welcome Ma there. Instead, Chen Yuanfeng (陈元丰), Deputy Director of the State Councils’ Taiwan Affairs Office, a Deputy-Ministerial level official, came to meet Ma at the airport.
  • Ma planned to bring six secret service agents, each with a gun and a bulletproof jacket and Ma himself would wear another (the seventh) bulletproof jacket. However, Beijing only allowed Ma and his guards to carry 3 guns, 2 bulletproof briefcases, and 3 bulletproof jackets. (meaning Ma would not be able to wear one). Beijing also didn’t allow them to bring any radio and anti-listening bug devices with them.

A commentator pointed out that the CCP treated Ma not as a former president, but rather as a former provincial governor, since it wanted to downgrade Taiwan to the level of a province.

Source:
1. Liberty Times, March 27, 2023
https://news.ltn.com.tw/news/politics/breakingnews/4252848
2. China Times, March 23, 2023
https://www.chinatimes.com/realtimenews/20230323004426-260407?chdtv

Briefings | | |   @CS Geo-Strategic Trend Government/Politics

Former Senior Diplomat’s Comment “No One Will Stand Up for China” Gets Shut Down

Cai Xia, a former professor at the Central Party School of the Chinese Communist Party (CCP) who now lives in exile in the United States, tweeted on March 27 about Fu Ying, who served as China’s vice foreign minister from 2010 to 2013 and is now director of the Center for Strategic and Security Studies at Tsinghua University. Cai tweeted that Fu recently posted an article on WeChat commenting on U.S.-China relations. Fu urged the Chinese to think clearly: “If China and the United States break up or go their separate ways, will any country side with China? What do we really want? What should we do?”

Fu Ying stated that there are talks in China that the United States is declining. “Whether the United States is declining or not is the United States’ own concern. China cannot make the decision on whether the US is declining and repeating the belief that the US is in decline will not make it a reality. China has its own problems to focus on and should not expend all its energy on criticizing the United States. It is unnecessary for both nations to belittle each other continuously. Instead, China and the United States need to resolve their respective issues and cooperate with one another to benefit the world. This is the hallmark of great powers.” Fu concluded the article by expressing her hope that China and the United States can reconcile their differences and work together.

Fu’s comment was deleted shortly after it was posted. Fu’s WeChat page said, “This content is not viewable due to a violation.”

‘Source: Liberty Times (Taiwan), March 27, 2023
https://news.ltn.com.tw/news/world/breakingnews/4252829

Briefings | | |   US-China Relations

China’s Academic Databases Close the Door to Foreign Scholars

The University of California, San Diego library told Voice of America that it received notice on March 17 from the administrator of the China National Knowledge Infrastructure (CNKI) that it would be unable to access some databases as of April 1. Other affected libraries include the City University of Hong Kong Library, the Institute of Chinese Literature and Philosophy at Academia Sinica in Taiwan, and at least a dozen other research institutions.

Founded in 1999, CNKI is the largest academic database in China. It contains Chinese government reports, academic journals, and papers from 1915 to the present, covering a wide range of fields, including politics, economics, humanities and social sciences, and science and technology. For researchers who do not have physical access to Chinese libraries, the resources provided by the CNKI are particularly important to their research.

Donald Clarke, a professor at George Washington University Law School, said in his tweet, “It is unfortunately China that is by far the most active in decoupling — the most recent example being the closing of foreign access to many important CNKI databases.”

Steve Tsang, director of the China Institute at the School of Oriental and African Studies at the University of London, told Voice of America (VOA) that “CNKI has not indicated which databases may never be reopened. He added that researchers outside China could still access these resources by visiting research institutions in China.

“That means, however, that they have to be vetted by Chinese academic institutions before they can be accepted as visiting scholars. Under Xi’s rules, all these institutions are under the leadership of the Chinese Communist Party (CCP).” Tsang noted this, suggesting that the CCP hopes to influence how foreign academics portray China by controlling information.

Perry Link, a U.S.-based China scholar, says this reflects the mindset of the Chinese leadership. “Chinese Communist Party spokesmen often accuse the United States of having a ‘Cold War mentality. In today’s information age, there is nothing more indicative of Cold War thinking than preventing the free flow of government reports and academic papers across borders,” Link told VOA.

Source: Voice of America, March 28, 2023
https://www.voachinese.com/a/china-academic-database-slashes-foreign-access-20230328/7025597.html

Briefings | | |   US-China Relations

Saudi Aramco Announces Two Investments in China

According to Chinese state media, on March 28, Xi Jinping spoke by telephone with Crown Prince and Prime Minister Mohammed bin Salman of Saudi Arabia claiming that China-Saudi Arabia relations are now at their best ever and that China is willing to work with the Saudi side so that the two countries support each other firmly on issues concerning their core interests. According to the Saudi Press Agency, Saudi Crown Prince and Prime Minister Mohammed expressed appreciation for China’s support for “efforts to develop good neighborly relations.”

On March 26, Saudi oil giant Saudi Aramco announced that it had joined forces with China’s North Industries Group (Norinco) and the Panjin Xincheng Industrial Group to build a large integrated refinery and chemical complex in Panjin city of Liaoning Province. The three parties will jointly fund the establishment of Huajin Aramco Petrochemical Company (HAPCO), with Aramco, Norinco and Panjin Xincheng holding 30 percent, 51 percent and 19 percent respectively. The joint venture will include an oil refinery with a daily processing capacity of 300,000 barrels and a chemical plant with an annual capacity of 1.65 million tons of ethylene and 2 million tons of paraxylene. Construction will begin in the second quarter of 2023 and is expected to be fully operational in 2026. Aramco will supply up to 210,000 barrels of crude oil per day to the venture.

Earlier this month, Saudi Aramco reported annual profits of $161 billion in 2022, the highest annual profit ever recorded by a global energy company. Norinco is China’s largest producer of military equipment.

On March 27, Saudi Aramco signed another definitive agreement to acquire a 10 percent stake in Rongsheng Petrochemical Company Limited (Rongsheng Petrochemical) based in Hangzhou, Zhejiang Province for 24.6 billion yuan ($US 3.6 billion). Under the agreement, Aramco will supply 480,000 barrels of crude oil per day to Rongsheng Petrochemical’s subsidiary Zhejiang Petrochemical Co. The two sides plan to cooperate in trading, refining, chemical production, crude oil storage and technology licensing. The deal is expected to be completed by the end of 2023.

In addition to the above two agreements, on March 26, the Guangdong provincial government and Saudi Aramco signed a memorandum of cooperation proposing a framework for cooperation in exploring investment opportunities in a number of areas, including energy cooperation, research and innovation, industrial projects, financial cooperation, and talent exchange.

Source: Deutsche Welle, March 28, 2023
https://p.dw.com/p/4PMof

Briefings | | |   Geo-Strategic Trend