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Apple’s iPhone15 Pre-Sale in China Was Much More Successful Than Huawei

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, within ten minutes of going on sale, Apple’s Chinese official website crashed and remained unavailable for six to seven minutes. And in the official Tmall Apple flagship store, the first batch of iPhone 15 Pro and iPhone 15 Pro Max were sold out within one minute. According to the online sales manager in charge of the Tmall site, in half an hour, they restocked nine times and are still restocking. For now, iPhone 15 Pro Max is selling the fastest, and iPhone 15 Pro sales are also very high.

According to the iPhone reservation data released by the platform, the number of reservations for the iPhone 15 Pro model exceeds 1.13 million; the number of reservations for the iPhone 15 Pro Max, which has higher specifications and a higher price, is even greater, with more than 1.43 million reservations. Judging from this reference data, the iPhone 15 Pro models are already far ahead, unmatched by any other manufacturer, not even the breakthrough Huawei Mate 60 series made recently. Huawei recently announced a new Mate model that utilized 7-nm technology which was considered an answer to the U.S. blockage. However, Apple’s latest iPhone employs 3-nm cutting-edge technology which is far ahead and attracted much more enthusiasm in China.

(1) NetEase, September 16, 2023
(2) Economy Daily (Taiwan), September 17, 2023

CNA: Beef Soup Restaurant Fined for Providing Free Wi-Fi

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, the Public Security Bureau of Zhenjiang City, Jiangsu Province recently fined a beef soup restaurant for providing consumers with open Wi-Fi for failing to fulfill its network security protection obligations. This restaurant provided free Wi-Fi, and you only need to enter a password to log in. They did not record the real names of customer users and was imposed an administrative penalty – the source of the law is the Cyber Security Law. Recently China has been strengthening domestic data security law enforcement, and law enforcement agencies have increased monitoring efforts and strengthened control intensity. There have been several recent cases of administrative penalties against restaurants, massage parlors and other small businesses and stores accused of not complying with the official network security requirements. China issued the Cybersecurity Law in 2016, emphasizing the maintenance of national sovereignty over cyberspace and national security control, and it came into effect on June 1, 2017. On this basis, the Data Security Law was later implemented on September 1, 2021, citing national security interests. Experts pointed out that these recent enforcement actions are a clear signal from Chinese authorities that any informal grace period is over and that companies, regardless of size, must comply with the country’s data privacy and data security laws. However, small businesses may be less able than larger businesses to take compliance measures that sometimes bring high costs.

Source: CNA, September 10, 2023

China’s Top Computer Server Manufacturer Suffered Major Profit Decline

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, with the advent of the artificial intelligence era, the traditional CPU server market has gradually shrunk, and new AI servers have soared. However, Inspur Information is subject to tight supply of GPUs, and it has not been able to jump onto the bandwagon. According to the global server market report for the third quarter of 2022 released by Gartner, Inspur ranked first in China, and second in the world, after Dell, with a global market share of 10.3 percent. However, in the first half of this year, Inspur’s server revenue fell by 29.03 percent year-over-year. Its net profit in the second quarter of this year suffered a year-over-year decrease of 81.46 percent. Inspur explained that its server product revenue was “affected by factors such as the tight supply of global GPUs and related special chips.” With the short supply of AI chips by Nvidia and Intel, the company emphasized that “the raw materials of the domestic server industry are currently mainly imported.” If there are major changes in supply, it will have an impact. Inspur’s server products are highly dependent on upstream chip suppliers. The company’s 2019 annual report showed that Intel and Nvidia are its top two suppliers respectively. Since 2020, Inspur has no longer published information about its main suppliers.

Source: Sina, September 7, 2023

SMIC’s Net Profits Down Significantly During First Half of 2023

Chinese semiconductor manufacturing company SMIC has released an earnings report for the first half of 2023. Well-known Chinese news site Sohu (NASDAQ: SOHU) reported that SMIC’s revenue was approximately US$3.023 billion during this period, a year-over-year decrease of 19.3 percent. Net profits were approximately US$634 million, a year-over-year decrease of 34.10 percent.

The company’s revenue from wafer fabrication decreased to US$2.759 billion during the reporting period, a 21.0 percent year-over-year decrease. Wafer fabrication represents nearly 90 percent of SMIC total business. Management stated that, due to global changes in the structure of the industrial chain and the re-integration and allocation of resources, it is foreseeable that future competition will be more intense.

SMIC expects that the unfavorable situation of “volume growth with price decline” in the second quarter will continue into the third quarter. This is due to the United States’ intensified pressure on China’s chip industry as well as the laggardly recovery of the global smartphone and consumer electronics industries.

According to the latest 2022 sales rankings released by pure-play foundry companies around the world, SMIC ranks fourth in the world and first among Mainland Chinese companies. As of now, China is still the world’s largest consumer market for integrated circuits and discrete devices.

Source: Sohu, August 25, 2023

China Restricts What Apps Can be Installed on Mobile Devices

On July 21, 2023, a Chinese government website published a “Notice of the Ministry of Industry and Information Technology on the Filing of Mobile Internet Applications,” stating that Chinese companies are now required to register their mobile Internet Applications (hereinafter referred to as “apps”) with the Chinese government. Unregistered apps will not be supported by Chinese network access providers and content platforms.

Here are some key excerpts from the notice:

II. Task Specification

(1) Any app owners engaged in Internet information services in China should follow the “People’s Republic of China Anti-Telecommunications Network Fraud Law” and “Internet Information Service Management Measures” (State Council Decree No. 292) and other provisions to file their apps for the record. Those who have not filed shall not participate in app services.

(2) The Ministry of Industry and Information Technology will supervise and guide the national task of registering apps. The Communications Bureaus of provinces, autonomous regions, and municipalities are responsible for management of the implementation and supervision of app registration.

(9) Network access service providers, content platforms, and smart terminal manufacturers shall not provide network access, distribution, and pre-configuration services for apps that have not been registered.

Source: Chinese Government website, July 21, 2023

NYC Bans All Government Devices from Using TikTok

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that New York City has joined the many U.S. states and jurisdictions that have banned the use of the video-sharing app TikTok on government devices.

The report stated that, on August 16th, New York City’s Network Department asked that TikTok be removed from government equipment within 30 days, citing so-called “security concerns.” According to Sohu, this is the latest move of the U.S. government that unreasonably suppressed Chinese companies and technology applications. This series of “prohibitions” by the United States violate the principle of fair competition.

A spokesperson for New York City Mayor Eric Adams said in the statement that government personnel will be unable to access the app and its website on city devices as well as city networks. According to the article, many government departments in New York City have TikTok accounts, including Mayor Adams, who has 11,600 followers. The NYC Department of Health also has nearly 50,000 followers on TikTok. After the ban was issued, these city-operated accounts all announced that they would end operation by the end of August. The Politico website stated that more than 30 states across the United States have banned employees from using TikTok on government equipment.

Source: Sohu, August 17, 2023

LinkedIn, the Last Western Social Media Company in China, Pulls Out

LinkedIn, Microsoft’s social media platform for the workplace, withdrew from Chinese markets on August 9, officially closing the Chinese version of the LinkedIn application.

LinkedIn’s 2014 debut in China came on the heels of Google’s withdrawal from the country in 2010. Google withdrew following the company’s refusal to comply with the Chinese communist regime’s demands that Google censor the content available in China.

LinkedIn took the opposite approach of Google, opting for cooperation with the Chinese regime, implementing censorship mechanisms for the platform. LinkedIn users saw some postings on the platform (e.g. mentioning 1989 the Tiananmen Massacre) deleted by LinkedIn.

The communist regime’s control of the platform gradually became tighter and tighter. In March 2021, the New York Times reported that Chinese regulators had criticized LinkedIn’s executives for failing to control content when they discovered “sensitive” posts during China’s National People’s Congress. As punishment, China required LinkedIn to conduct a “self-assessment” and submit a report to China’s Central Internet Information Office.

LinkedIn’s latest Transparency Report, released in 2023, showed that the Chinese government made 43 requests to LinkedIn to remove content in 2021. LinkedIn complied with all of these requests except one. The number of removal requests was similar in 2020, following relatively lower numbers of requests in 2018 and 2019.

LinkedIn announced in October 2021 that it would remove several features from the Chinese version of its website, including the ability to make posts and interact with user-generated content. Without these social functions, LinkedIn became merely a resume-hosting website and saw its user base decline.

Source: Voice of America, August 8, 2023

China Holds New Media Forum on “Telling the Chinese Story”

On July 12, 2023, China held the International Communication Forum for New Media in Changsha. The forum focused on the theme of “Telling the Chinese Story and Shaping China’s Image.” Prominent media figures, experts, scholars, and representatives of overseas brands attended the conference.

Du Zhanyuan, Director of the China Foreign Language Publishing and Distribution Administration, made the following suggestions at the forum: One, emphasize the importance of showcasing China’s modernization journey and effectively narrating the stories of China’s development. Two, establish comprehensive and authoritative foreign-language online platforms, covering websites, mobile platforms, and overseas social media networks. Three, adopt new technologies such as mobile, social, and visual communication, cloud computing, big data, and artificial intelligence.

The General Editor of Xinhua Net, Qian Tong, highlighted the increasing participation of Chinese media and companies doing business overseas in international communication, saying that more voices contribute to a more splendid chorus of global communication.

Deputy Chief Editor of China Daily, Wang Hao, suggested strengthening the application of technology to make China’s image more visible and tangible, and using the mouths of media celebrities of other countries to make China’s image more lovely and trustworthy.

Xu Rong, Deputy General of Hunan Broadcasting and Television Group, shared about the Group’s success in distributing a significant number of films and TV series overseas, including the popular series “The Rational Life,” which gained international recognition on Netflix. Xu also shared that the Group organized performances domestically and overseas, using popular art forms to open doors to mainstream overseas markets.

Source: Guangming Daily, July 13, 2023