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Lianhe Zaobao: China’s Hong Kong Liaison Office Gets Massive Reorganization

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that news is breaking on an up-coming major reorganization of The Liaison Office of the Central People’s Government in the Hong Kong Special Administrative Region (LOCPG). The LOCPG was established in 2000 as the replacement of the Xinhua News Agency (HK office). It was widely recognized as the unofficial representative of the Mainland government in Hong Kong. Anonymous insiders said this new reorganization does not intend to reduce the headcount. Instead, the plan is to overhaul the “ways of doing things” completely. The future LOCPG will no longer “just do PR work and cut the ribbons for grand openings.” Instead, more resources will be devoted to Hong Kong’s day-to-day operations like how to improve the local economy. The large-scale reorganization is expected to replace half of the current 480 LOCPG staff with new people, most of whom “barely understand the local dialect (Cantonese).”

Source: Lianhe Zaobao, January 28, 2021
https://www.zaobao.com.sg/realtime/china/story20210128-1119964

Briefings | | |   Geo-Strategic Trend

Global Times: India Permanently Banned 59 Chinese Apps

Global Times recently reported, based on Reuters and several Indian media reports, that the Ministry of Electronics and Information Technology in India officially announced the permanent ban of 59 Chinese apps, including massively popular apps like TikTok, Baidu, WeChat and UC Browser. The Indian authorities expressed dissatisfaction after they received the compliance plans from Chinese app vendors, especially in the areas of data collection and consumer privacy protection. This dissatisfaction is what triggered the permanent ban. Since June of last year, the Indian government has taken “unprecedented” actions on 267 Chinese apps over several rounds, citing national security concerns. The Chinese Ministry of Foreign Affairs issued a statement on the latest development expressing “serious concern.” China also accused India of violating market economy principles and WTO rules. The Chinese Embassy in India also showed a strong position against India’s action taken in the name of national security. After the news broke, some Chinese vendors like TikTok announced their Indian lay-off plans.

Source: Global Times, January 26, 2021
https://world.huanqiu.com/article/41faKzHUmX6

Briefings | | |   Geo-Strategic Trend Information/Technology

IBM China Research Laboratory Closed

Well-known Chinese news site Sina (NASDQ: SINA) recently reported that IBM quietly closed its China Research Laboratory (CRL). The IBM CRL was the top one of the 12 IBM global research institutes and was the most influential. CRL was founded in 1995 and hatched numerous famous products like the leading artificial intelligence system Watson. This recent closure sent a shockwave throughout the Chinese technology communities, bringing an end to an era. The CRL was IBM’s first research center in developing countries, headquartered in Beijing. It created a branch in Shanghai in 2008. In the past quarter century, thousands of researchers have worked at IBM CRL. Most of them had doctors or master’s degrees from China’s or the world’s top universities. The CRL focused on research areas of networking, distributed computing and systems management, as well as next generation services. IBM CRL is just the latest exit of the large international high-tech firms. In 2015, Yahoo closed its Beijing Research Center. Amazon closed its centers in 2019, and Oracle closed its Chinese Research Center in the same year. The IBM CRL closure further confirmed the de-linking between China and the United States.

Source: Sina, January 24, 2021
https://finance.sina.com.cn/chanjing/gsnews/2021-01-24/doc-ikftpnny1265832.shtml

Briefings | | |   Information/Technology US-China Relations

Report: U.S. Leads in Global AI Race while China Is Closing the Gap

On January 25, The Information Technology and Innovation Foundation (ITIF), a Washington DC based think tank on technological innovation and public policy, issued a report titled, “Who Is Winning the AI Race: China, the EU, or the United States? — 2021 Update”

“This report examines the progress that China, the European Union, and the United States have made in AI relative to each other in recent years and provides an update on a report released on their comparative rankings from 2019. It found that the United States still holds a substantial overall lead, but that China has continued to reduce the gap in some important areas. In addition, the EU continues to fall behind.”

“This report measures the progress each region has since made in AI by using new data to update 15 of the metrics and it adds 1 new metric. It finds that the United States still leads, with 44.6 points, followed by China with 32.0 and the European Union with 23.3.”

The U.S. “has an unmatched number of AI start-ups, which received $8 billion more in venture capital and private equity funding than did China in 2019.” “In 2019, U.S. software and computer services firms still spent three times more on R&D than did China and the European Union combined. Furthermore, average U.S. research quality is still higher than that of China and the European Union. Lastly, despite China’s growing attempts to reduce its reliance on U.S. semiconductors, the United States is still the world leader in designing chips for AI systems.”

“China’s AI capabilities relative to the European Union and the United States have improved in several ways. First, China has surpassed the EU as the world leader in AI publication. Second, the quality of its AI research has generally trended upward year to year. Third, its software and computer services firms have increased their R&D spending. Fourth, China now has nearly twice as many supercomputers ranked in the top 500 for performance as the United States. The United States led in this indicator as recently as 2017. Finally, China likely continues to lead in the amount of data generated. Overall, however, China has not significantly reduced the gap in AI between itself and the United States, but its trend of consistent progress could eventually evaporate the U.S. lead.”

“The European Union has fallen further behind the United States in terms of the number of funding deals, the acquisition of AI firms, and AI firms that have raised at least $1 million in funding since our last report. In addition, EU software and computer services firms have failed to close the gap between themselves and U.S. firms in R&D spending. The United Kingdom’s departure from the bloc will also diminish EU AI capabilities, both in absolute terms and on a per-capita basis.”

Source: Information Technology and Innovation Foundation.
https://itif.org/publications/2021/01/25/who-winning-ai-race-china-eu-or-united-states-2021-update

Briefings | | |   Information/Technology

China Box Office Revenue Fell Sharply in 2020

China produced a number of patriotic movies last year, including the movies that commemorated the 70th anniversary of the Korean War. Box office revenue, however, still fell sharply due to COVID 19. Revenue was only at 30 percent of what it was in 2019. Among the 28 listed film making companies, only 6 of them had revenue and profit growth compared to 2019.

According to Securities Times, 294 movies were released in China in 2020, with a total box office revenue of 20.417 billion yuan (US$3.18 billion), of which box office revenue for domestically produced movies was 17.093 billion yuan (US$2.66 billion), accounting for about 83 percent of the total revenue. Meanwhile only five companies had stock price increases in 2020.

Even though China’s movie industry was hit hard by COVID 19 in 2020, it still surpassed North America and was the world’s largest movie market.

Source: Central News Agency. January 28, 2021
https://www.cna.com.tw/news/acn/202101280102.aspx

Briefings | | |   Economy/Resources

Ministry of National Defense: “Containing China Is a Mission Impossible”

Starting one week after Biden took office, he and several of his officials repeatedly expressed support for allies in the Indo-Pacific region. This has been interpreted as the Biden administration warning against China’s aggressive stance. On January 28, Wu Qian, director of the Information Bureau of the Ministry of National Defense of China, said during his regular press conference, that, if the United States wants to contain China, it is a “Mission Impossible.”

Wu said that the China and U.S. relationship encountered extreme hardships during the Trump administration. The militaries of both countries faced many risks and challenges. Facts have proven that it is an impossible task for the U.S. to contain China. In the end, the U.S. will only shoot itself in the foot. To Contain China is a Mission Impossible!

On the first weekend after taking office, Biden spoke with the leaders of many European countries, expressing the U.S. interest in working together on China. Many of his senior officials also reaffirmed their support for East Asian countries. In telephone calls with the foreign ministers of France, Germany, the United Kingdom, the Philippines, and Italy, the newly appointed Secretary of State Antony Blinken pledged to stand with them in the face of China. State Council Spokesperson Ned Price also criticized the Chinese military’s activities near Taiwan and said that, “the U.S. commitment to Taiwan is rock-solid and contributes to the maintenance of peace and stability across the Taiwan Strait and within the region.”

Sources:
1. Sina, January 28, 2021
https://news.sina.com.cn/c/2021-01-28/doc-ikftpnny2530128.shtml
2. Radio Free Asia, January 28, 2021
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/cm-01282021101704.html

Briefings | | |   US-China Relations

Holding the Largest Debt in Chinese History, HNA Group Filed for Bankruptcy

On January 22, holding $700 billion (US$109 billion) in debt, the largest in Chinese history, the HNA Group filed for bankruptcy. The High People’s Court of Hainan Province is currently conducting a legal review of the HNA Group.

The HNA Group was formed in 1993 in the airline business. It gradually diversified into real estate, banking, and the Hotel industry. Between 2015 and 2017 alone, it had 40 international mergers and acquisitions having a total value of US$40 billion. At the end of 2017, the HNA Group was in a debt crisis due to excessive expansion. In July 2018, Wang Jian, then chairman of HNA Group, died in an accident in France. Chen Feng, who was a retired HNA board member at the time, took over HNA. In 2018, HNA reported its first loss of 4.9 billion yuan (US$0.76 billion). In the first half of 2019, the HNA Group lost 3.52 billion yuan (US$0.55 billion) with 706.726 billion yuan (US$110 billion) in outstanding debt. In 2019, HNA hired a risk mitigation group that tried to get it out of the liquidity crisis. Since then it has been selling the non-core businesses. On February 29, 2020, Hainan Provincial People’s Government sent a task force team to conduct a financial review and analysis of the HNA Group and its 2,000 subsidiaries. In the past year, HNA has also gone through a number of personnel changes. On January 22, after sorting through the company’s capital, management and debt structure, the task force team announced the bankruptcy decision and stated that HNA will have to go through a restructuring process.

Sources:
1. China.com, January 22, 2021
http://finance.china.com.cn/industry/company/20210122/5482913.shtml
2. Central News Agency, January 29, 2021
https://www.cna.com.tw/news/acn/202101290258.aspx
3. Radio Free Asia, January 29, 2021
https://www.rfa.org/mandarin/Xinwen/wul0129c-01292021043521.html

Briefings | | |   Economy/Resources

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