Skip to content

Information/Technology

RFI Chinese: China Asks Telecom Operators to Phase Out Foreign Chips

Radio France Internationale (RFI) Chinese Edition recently reported that, people familiar with the matter said Chinese officials earlier this year directed the country’s largest telecom operators to phase out foreign processors at the heart of their telecom networks by 2027. This would be a hit to U.S. chip giants Intel and Advanced Micro Devices (AMD). China’s Ministry of Industry and Information Technology set the 2027 deadline in order to speed up the government’s efforts to stop using such core chips in its telecommunications infrastructure. Chinese regulators also ordered state-owned mobile operators to check whether “non-Chinese” semiconductors are commonly used in their networks and to draft a timetable for replacement.

In the past, efforts by the Chinese telecommunication industry to wean itself from dependence on foreign semiconductors was to be hampered by a lack of quality chips produced domestically. Now, the quality of domestic chips has improved and their performance has become more reliable.

Currently, U.S. chipmakers Intel and AMD supply most of the core processors used in networking equipment in China and globally; geopolitical concerns now cloud their future business prospects in China. In October of last year, China Telecom purchased approximately 4,000 artificial intelligence servers, 53 percent of which used Intel processors. According to tender documents, the rest of the AI servers use Huawei’s processors. In the past, Intel chips accounted for a much higher share of server procurements.

Source: RFI Chinese, April 12, 2024
https://tinyurl.com/ykpb26j6

Briefings | | |   Geo-Strategic Trend Information/Technology

China and Thailand to Carry Out Joint Moon Exploration

On April 5th, China’s National Space Administration and Thailand’s Ministry of Higher Education, Research and Innovation jointly signed a “Memorandum of Understanding on Cooperation for Exploration and Peaceful Utilization of Outer Space” as well as a “Memorandum of Understanding for Cooperation on an International Lunar Research Station.”

Xinhua reported that “China and Thailand will establish joint committees and working groups to strengthen cooperation in the fields of space exploration, space applications, building space capacity. This will be done through joint space projects, scientific exchange programs, personnel training plans, data and information exchange, and organization of joint thematic workshops and scientific seminars.”

“China’s Chang’e-7 mission [planned for 2026] will reportedly carry a ‘Global Space Weather Monitoring’ device developed by Thailand. This will be the first time a Thai scientific instrument enters deep space from Earth orbit. China’s Chang’e-8 mission [planned for 2028] provides opportunities for international collaboration, with the ability to carry payloads of 200 kilograms. Thailand has submitted several applications regarding lunar surface robots and scientific payloads. The applications are currently being processed.”

“China has already signed space cooperation agreements with more than 10 countries and international organizations.”

Source: Xinhua, April 5, 2024
http://www.xinhuanet.com/20240405/8b67999f500143a0825a9609a5283f91/c.html

Briefings | | |   Geo-Strategic Trend Information/Technology

Half-Stopped Factories Become Norm in Chinese Lithium Battery Industry

Shanghai-based Chinese financial news site East Money recently reported that, “as the period of frenzied investment has passed, the Chinese lithium battery industry has been shrouded in the shadow of overcapacity and price wars. .. After the Chinese New Year, which is often the peak period for job hunting and employment, many battery companies reported suspensions of production, layoffs, and salary cuts.” Below are some translated excerpts from the article.

The oversupply situation in the lithium battery industry has been reflected in all aspects of the entire supply chain. Some sources told the reporters that, in the new energy industry chain from top to bottom, no orders and half-stopped factories have become the norm. “The bosses themselves are looking to find a more stable job.” Starting this year, even large companies are in danger. Other than the two “super players,” CATL and BYD, the question is: how many battery companies can survive past spring?

The turning point for the lithium battery industry’s sharp decline occurred in the fourth quarter of 2022. The trigger was that the sales growth rate of new energy vehicles began to slow down significantly, which was not expected by the industry. Because of this, since 2023, the battery industry has fought a fierce price war, and capacity utilization has further declined as well. Even for CATL, its 2021 manufacturing capacity utilization rate was as high as 95 percent, dropped to 83.4 percent in 2022, and further dropped to 70.47 percent in 2023, which is still much higher than the industry average capacity utilization rate – around 41.8 percent.

Right now, the lithium battery industry is still facing the challenge brought by the worsen high EV inventories as the result of the rapid expansion of new energy vehicles. In the meantime, the battery inventory of the energy storage industry is piling up too. No one knows when the lithium battery industry will emerge from the bottom. A new round of elimination in the market seems to be just starting.

Source: East Money, April 1, 2024
https://finance.eastmoney.com/a/202404013031165676.html

Briefings | | |   Economy/Resources Information/Technology

China Makes Progress on eVTOL Aircraft Development

China has made progress in development of electric Vertical Take-Off and Landing (eVTOL) aircraft. China views the eVTOL platform as a revolution in aviation. “Similar to the transition from gasoline cars to electric cars on the ground, [a transition] from gasoline-powered helicopters to eVTOL aircraft [is occurring],” said Xie Jia, Senior Vice President of Fengfei Aviation Technology, Shanghai.

On October 10, 2023, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Civil Aviation Administration of China jointly issued an “Outline for the Development of a Green Aviation Manufacturing Industry (2023-2035)” proposing that, by 2025, eVTOLs will achieve pilot operation. The outline further proposes that, by 2035, new types of general aviation equipment characterized by unmanned, electric, and intelligent features will achieve commercialization and large-scale application.

In October 2023, China had its first flight of a 2-ton eVTOL in Shanghai. The aircraft, the M1, was developed by the Future Wing Company in Shanghai. The vehicle became China’s first independently-developed and domestically-produced 2-ton eVTOL. Production was domestic in all three core areas: electric systems, flight control systems, and composite materials. The M1 has a composite wing configuration with 20 rotors, a maximum payload of 500 kilograms, seating for 5 people, a cruising speed of 200 kilometers per hour, and an intended range of 250 kilometers. It can meet short-distance air travel needs within and between cities, shortening travel time from 2-3 hours to around 30 minutes.

In March of 2024, the eVTOL “Shengshi Long” took off from Shenzhen and landed at the Zhuhai, both in Guangdong Province, covering a distance in 20 minutes that would have taken 3 hours by car. This was the world’s first public demonstration of an eVTOL flight that traveled over water and between cities. The aircraft was developed by Shanghai Fengfei Aviation Technology Co., Ltd., with a takeoff weight of 2 tons, seating for 5 people, a cruising speed of up to 200 kilometers per hour, and 100 percent domestic production of its core modules.

Sources:
1. People’s Daily, October 31, 2023
http://sh.people.com.cn/n2/2023/1031/c176738-40623560.html
2. People’s Daily, March 2, 2024
http://ent.people.com.cn/n1/2024/0302/c1012-40187361.html

Briefings | | |   Information/Technology

Shenzhen Issues Plan to Promote Development of HarmonyOS Operating System

HarmonyOS is a distributed operating system (OS) developed by Huawei for smartphones, tablets, smart TVs, smart watches, personal computers and other smart devices.

On March 3rd, the government of Shenzhen issued the “Shenzhen Support for Open Source HarmonyOS Native Application Development 2024 Action Plan” to promote the Chinese version of this OS.

The plan puts forward specific development goals and directives for the development of the HarmonyOS software ecosystem by the end of 2024:

  • The number of HarmonyOS native applications developed in Shenzhen should account for over 10 percent of the national total;
  • major industries in Shenzhen are to be fully served by native applications targeting HarmonyOS;
  • HarmonyOS development courses will be offered in major universities and training institutions in Shenzhen;
  • the number of certified HarmonyOS developers will account for over 15 percent of the national total;
  • establish at least two industrial parks that rely primarily on HarmonyOS-based applications and software;
  • there will exceed 1000 software companies with staff who are qualified in HarmonyOS application development;
  • promote the stable operation of the HarmonyOS Ecosystem Innovation Center, providing public services such as showcasing and promoting HarmonyOS native applications, and talent cultivation; and
  • officially launch and expand the global Smart Internet of Things (IoT) Alliance to continuously increase the international influence of HarmonyOS applications.

The plan also encourages capable enterprises to expand outsourcing services for development of HarmonyOS-native applications, aiming to reach a scale of 500,000 HarmonyOS developers.

By the end of 2023, a total of 49 enterprises in Shenzhen had participated in the construction of the open-source HarmonyOS ecosystem, contributing 133 products and 11 software distributions. The open-source HarmonyOS community has more than 250 ecosystem partners, 35 project donors, 173 partners passing the HarmonyOS compatibility evaluation, and over 230 commercial devices in fields such as finance, education, smart home, transportation, digital government, industry, and medical care.

Source: Xinhua, March 3, 2024
http://www.news.cn/local/20240303/dca3e6d4bd734380b4dc9602d5df9b76/c.html

Briefings | | |   Government/Politics Information/Technology

Lianhe Zaobao: China Bans Government Use of Intel and AMD Chips

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that China is reportedly phasing out the use of U.S. chips and operating systems for government computers.

Following official procurement standards released last year, Chinese officials are winding down the use of Intel and Advanced Micro Devices (AMD) components in government computers and servers. At the same time, China is also trying to eliminate the Microsoft Windows operating system and foreign-made database software in favor of domestic software. State-owned enterprises are required to complete the transition to domestic technology by 2027.

China’s Ministry of Finance and the Ministry of Industry and Information Technology released seven government procurement standards on December 26 last year. They clearly required that the Communist Party and government agencies at or above the township level comply with the standard of “safety and reliability.” On the same day, China’s Information Security Evaluation Center announced the first list of “safe and reliable” processors and operating systems. All of the recommended processors and operating systems are produced by Chinese companies, including Huawei and Phytium.

In the context of the China-US technology war, China has continuously encouraged government agencies to use domestically produced tech products in recent years. In 2022, government agencies and state-owned enterprises were asked to replace foreign-brand computers with domestic equipment. Mandates for equipment replacement at that time did not include hard-to-replace components such as processors, however. In addition to computers, China is also requiring employees in government agencies and state-owned enterprises to switch to domestically produced mobile phones. As of December last year, at least 10 provinces, including Beijing, Tianjin, Zhejiang, Guangdong, and Jiangsu, had implemented such requirements.

Source: Lianhe Zaobao, March 24, 2024
https://www.zaobao.com.sg/news/china/story20240324-3209230

Briefings | | |   Information/Technology US-China Relations

China Times: Beijing Pushes Chinese Car Companies to Favor Domestically-Produced Chips

Taiwanese newspaper China Times recently reported that the Chinese government has quietly asked Chinese electric vehicle manufacturers, including BYD and Geely, to significantly increase the use of domestically produced chips. Beijing may be quietly pushing for a chip decoupling “that tends to exclude U.S., Japanese and European parts from the Chinese market. … These changes could be Beijing’s answer to the U.S.-led sanctions and export controls.” Below are some passages from the China Times article:

“China’s Ministry of Industry and Information Technology issued an official notice this year, requiring Chinese electric vehicle companies to expand their procurement of domestic electronic components. The Ministry originally had an informal goal of asking car companies to expand their domestic chip procurement to one-fifth by 2025, but it now feels this progress is not quick enough.”

“In recent bidding for contracts with a well-known Chinese car company, a foreign supplier offered a price that was 30 percent lower than the winning bid, but it still did not get the contract.”

“Share prices of European companies that supply electric vehicle chips to China fell on March 15th.”

“Bloomberg believes that the Ministry’s new instructions are consistent with Beijing’s strategy of ‘mobilizing all forces to compete with the U.S. and other countries over who has the top position in terms of science and technology.’ … The move could lead the United States to tighten its import restrictions on Chinese-made cars.”

Source: China Times, March 16, 2024
https://www.chinatimes.com/cn/realtimenews/20240316000935-260409

Briefings | | |   Information/Technology

China Unveils Plan to Bolster Industrial Data Security Capabilities Amid Security Concerns

China’s Ministry of Industry and Information Technology (MIIT) has released a new plan aimed at enhancing data security capabilities in China’s industrial sector over the period 2024-2026. The plan emphasizes the importance of ensuring data security as crucial for national security and economic development. It calls for promoting the application of technologies like secure multi-party computation, anti-ransomware, data traceability, and commercial cryptography in the industrial field.

Specific measures include selecting a batch of general data security technologies and products with broad application value across industries; developing data security solutions tailored for different industries, scenarios, and small-to-medium enterprises; and creating typical data security use cases to promote across regions. The MIIT plan aims to train over 30,000 people and cultivate more than 5,000 data security talents by the end of 2026. It targets having over 45,000 enterprises implement classified data protection, covering at least the top 10% of large industrial firms (by annual revenue) in each province.

This push for data security comes amid Chinese government efforts to accelerate its replacement of foreign software and hardware with domestic alternatives as a response to recent years’ national security concerns.

Beijing has also been making efforts to strengthen its oversight of user data for reasons related to national security. One manifestation of this is in a $1.2 billion file levied on Chinese company Didi in 2022 over data security violations. Another is in plans announced by China’s Ministry of State Security in December 2023 regarding inspections targeting security risks related to handling of geographic data. The Ministry of State Security alleged that “certain foreign organizations” have made attempts at intelligence theft via mapping software.

Source: Central News Agency (Taiwan), February 26, 2024
https://www.cna.com.tw/news/acn/202402260267.aspx

Briefings | | |   Information/Technology