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Chinese Newspaper Global Times: UK Government Unreasonably Suppressed Chinese Companies Again

Global Times, a Chinese newspaper under the People’s Daily, recently reported that the British government asked a number of departments to stop installing surveillance cameras related to China in sensitive buildings, citing security risks. The Cabinet Office of the British government stated in a written request submitted to Parliament that it was asking all departments under its jurisdiction to prohibit these installations, “given the threat to the UK, and the increasing capability and interoperability of these systems, we need additional controls.” The UK government’s new rules, which apply to surveillance camera equipment made by companies subject to Chinese security regulations, include instructing departments to disconnect such equipment from core computer networks and consider removing it entirely. This is not the first time the UK has cracked down on Chinese surveillance products. Chinese Foreign Ministry Spokesperson Mao Ning said at a press conference in response to this matter that China firmly opposes some people’s generalization of the concept of national security and their unreasonable suppression of Chinese companies. Ne also said that  in addition, the Chinese government will firmly safeguard the legitimate rights and interests of Chinese companies.

Source: Global Times, November 25, 2022
https://world.huanqiu.com/article/4AcXuQ7XIFv

RTI: U.S. Broadened Bans on New Chinese Communications Equipment Imports

Radio Taiwan International (RTI) recently reported that the U.S. Federal Communications Commission (FCC) just issued a broadened ban on new telecommunications equipment from Chinese companies such as Huawei and ZTE, citing “unacceptable risk” to US national security. The FCC said it had passed a final rule prohibiting the sale or import of equipment deemed to pose a national security risk to the United States. This is the latest blow to Chinese telecommunications equipment makers. Jessica Rosenworcel, chairwoman of the FCC, circulated the proposed measure to three other commissioners who will give their final approval next month. She said these new rules are an important part of our ongoing efforts to protect the American people from national security threats involving telecommunications. The FCC follows the requirements of the Safety Equipment Act of 2021, which was signed into law by President Biden last November. The following Chinese companies, Huawei, ZTE, Dahua Technology, Hangzhou Hikvision Digital Technology, and Hytera Communications will all be impacted by this ban. The measures would effectively disallow these companies from selling new devices in the U.S. and will also expand and update the FCC’s “covered list” of prohibited products to prevent private entities from bringing products from these Chinese companies into the United States as well. Huawei declined to comment on this matter, while ZTE did not immediately respond to a request for comment.

Source: RTI, November 26, 2022
https://www.rti.org.tw/news/view/id/2151714

RFA Chinese: Tencent Launched another Round of Layoffs

Radio Free Asia, Chinese Edition, recently reported that sources said that Chinese tech giant Tencent Holdings has begun a new round of layoffs in its video streaming, gaming and cloud computing divisions. This round of layoffs affects three of Tencent’s six business units. It is difficult to determine the size of the layoffs. China’s tech sector continues to feel the effects of regulatory crackdowns and the Zero Covid government policies that have slowed China’s economic growth. Earlier this year, Tencent had already cut staff along with other well-known tech companies such as the Alibaba Group. Tencent management said they were focused on cutting costs and have closed non-core businesses in some areas. The Shenzhen-based company is eyeing global expansion to offset slowing growth in China. Tencent is recalibrating its mergers and acquisitions strategy, focusing more on buying majority stakes in mostly overseas game companies. Market analysts expressed the belief that Tencent will report flat or slightly smaller revenue for its third quarter. Tencent declined to comment on the matter.

Source: RFA Chinese, November 15, 2022
https://www.rfa.org/cantonese/news/tencent-11152022065627.html

Apple Factory in Shanghai Stopped Hiring Workers

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Shanghai Pegatron, known as Apple’s second largest foundry (after Foxconn), issued an announcement on October 15th that it would suspend recruitment. Pegatron has always been the main force in manufacturing iPhone Plus models. The reporter visited Pegatron’s Shanghai Apple factory in person, and the recruitment interview office was empty. The security guard at the factory gate explained, “The factory is not that busy right now, and recruitment has stopped.” According to sources, Apple cut 70 percent and 90 percent respectively of the orders from two of its suppliers in China. At the same time Apple asked at least one component supplier to stop production immediately. The recent sharp reduction in working hours has caused dissatisfaction among many employees, since their income has been reduced substantially and they can only get a base salary. As the largest iPhone OEM, Zhengzhou Foxconn accounts for half of the world’s iPhone assembly work. Foxconn also lowered the company’s performance forecast for the fourth quarter, due to the Zero Covid government policy. Apple has been spreading its supply chain around the world to manage risk. This year, the number of factories from the United States and South Korea increased significantly. In particular, the number of American suppliers has increased from 54 to 85.

Source: Sina, November 15, 2022
https://finance.sina.cn/tech/csj/2022-11-15/detail-imqqsmrp6279086.d.html

China Times: US Blocked Import of a Large Quantity of Chinese Solar Modules

Major Taiwanese news network China Times recently reported that, according to some U.S. federal customs officials and industry sources, since June, more than 1,000 shipments of solar modules worth hundreds of millions of dollars have been blocked and are piling up at U.S. ports. The blockage was implemented under a new law that bans imports of products from China’s Xinjiang region based on concerns about slave labor. The high number of seizures suggests the policy, aimed at pressuring Beijing over Uyghur concentration camps in Xinjiang, may even slow the Biden administration’s drive to decarbonize the U.S. power sector in response to climate change. U.S. Customs and Border Protection (CBP) confirmed that none of these shipments have yet been returned. Based on federal laws that protect trade secrets, CBP will not disclose the manufacturer or provide details about the number of solar devices. However, three industry sources revealed that the seized products included solar panels and polycrystalline silicon solar cells, which could generate up to 1GW of electricity. The three Chinese manufacturers involved typically account for one-third of the U.S. solar panel supply. Industry sources said the companies have suspended shipments to the U.S. amid fears of more shipments being held up. According to a survey conducted by the American Clean Energy Association, solar installations in the United States plummeted by 23 percent in the third quarter and nearly 23GW of solar projects have been delayed, mainly because of the lack of access to solar panels.

Source: China Times, November 11, 2022
https://www.chinatimes.com/cn/realtimenews/20221111003377-260410?chdtv

BBC Chinese: A Large Number of Zhengzhou Foxconn Workers Fled on Foot

BBC Chinese recently reported that, at the Foxconn factory in Zhengzhou, the capital city of Henan province, there are many workers who have been fleeing this largest Apple iPhone assembly plant in China amid reports that the Covid outbreak has forced a lockdown. It has not been possible to verify how many confirmed cases of Covid-19 were found at the plant. Parts of this big city of about 10 million are now on lockdown as China continues to impose strict government Covid control measures. Taiwan’s Foxconn Group, a top supplier for Apple, has hundreds of thousands of workers at its Zhengzhou factory, but the company has yet to provide official figures on the number of infections. Due to the outbreak at the Zhengzhou factory, iPhone shipments in November may be reduced by as much as 30 percent. Footage shared online, including Chinese social media, showed workers leaving the factory and starting a long walk back home so they could avoid arrest on public transportation. A 22-year-old Foxconn worker surnamed Xia said that the dormitory where he and his colleagues were kept was “chaotic,” so he jumped over the fence and escaped. Under China’s strict Zero Covid policy, local governments have the power to act quickly to contain any outbreak of the virus. This includes anything from total lockdowns to regular testing and restrictions on travel . According to online reports, these workers did not in fact flee at first. After the outbreak came, they were helpless and could only obey orders. If it wasn’t for the unbearable situation, they would have been willing to cooperate. Some reports indicated that, after ten days of not having food and water, many workers broke through the interception of the security guards and managed what can be called, “a great escape.”

Source: BBC Chinese, October 31, 2022
https://www.bbc.com/zhongwen/simp/chinese-news-63455490

SK Hynix Considers Abandoning Fab Factories in China

Chinese online high-tech news site ICS Smart recently reported that major South Korean memory chip maker SK Hynix just reported its poor third-quarter results. To make matters worse, SK Hynix has doubts about the future fate of its fab factories in China due to new US export control regulations. The company explained that, due to the deteriorating global macroeconomic environment, sluggish demand for DRAM and NAND products, sales and prices have declined, resulting in a sharp decline (-20.5 percent) in revenue month-over-month. Also, on October 7 this year, the United States issued new export control regulations against China, restricting wafer manufacturers located in China from obtaining multiple advanced chip technologies, unless licensed by the U.S. Department of Commerce. This impacts the fab factories of Korean companies such as SK Hynix and Samsung in China. Although on October 11, SK Hynix and Samsung Electronics both obtained a license from the US Department of Commerce for an additional year, yet after that, what will happen? SK Hynixs’ chief marketing officer Kevin Noh said on a conference call that, as a contingency plan, the company is considering selling fab factories, selling equipment, or moving equipment to Korea. Records show that, as of 2020, SK Hynix had invested more than US$20 billion in China. Under the new U.S. regulations, the operation of SK Hynix in China will be subject to many restrictions.

Source: ICS Smart, October 26, 2022
http://www.icsmart.cn/57115/

Apple Sales Have Grown against Market Trend Despite Global Declines

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, while the performance of mobile phones is getting stronger and stronger, consumers have less motivation to change their phone. Therefore the mobile phone is now getting more and more difficult to sell. Research firm Canalys, the leading global technology market analyst firm, has just released its global smartphone market report for the third quarter of 2022. Data shows that the global smartphone market continued to decline in the third quarter of 2022, with shipments down 9 percent year-over-year. Samsung still ranks first with a market share of 22 percent. Its market share slightly increased by 1 percent compared with last year’s 3rd quarter. Apple’s market share has risen from 15 percent in Q3 last year to 18 percent this year. The gap with Samsung is getting smaller and smaller. The three Chinese domestic giants, Xiaomi, OPPO, and Vivo, ranked third to fifth with a market share of 14 percent, 10 percent, and 9 percent respectively, which is consistent with last year’s ranking. Apple’s iPhone 14 series is having hot sales, especially the 14 Pro series, which is still in short supply. Currently the consumer smartphone replacement cycle has been extended from 18 to 20 months in previous years to 30 to 36 months at present. Also the global mobile phone market has fallen for three consecutive quarters. Still, Apple has grown against the market trend, while Chinese domestic smartphone vendors have been losing ground.

Source: NetEase, October 27, 2022
https://www.163.com/dy/article/HKMAHSB60530T38M.html