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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
https://finance.sina.com.cn/tech/csj/2023-09-07/doc-imzkwctn6755618.shtml

Briefings | | |   Information/Technology US-China Relations

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
https://www.sohu.com/a/714900415_258768

Briefings | | |   Information/Technology

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
https://www.gov.cn/zhengce/zhengceku/202308/content_6897341.htm

Briefings | | |   Government/Politics Information/Technology

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
https://www.sohu.com/a/712608913_121332532

Briefings | | |   Information/Technology US-China Relations

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
https://www.voachinese.com/a/linkedin-becomes-the-last-western-social-platform-to-officially-leave-china-20230808/7216109.html

Briefings | | |   @CS Government/Politics Information/Technology

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
https://topics.gmw.cn/2023-07/13/content_36694283.htm

Briefings | | |   @CS Geo-Strategic Trend Information/Technology

Chinese Media More Effective on Facebook Than on Twitter

According to a research report titled “Global Mainstream Media Network Communication Power Research (2023)” released by Fudan University on July 21, Chinese media’s overall communication effectiveness on Facebook surpasses that on Twitter.

The survey, completed by Fudan University’s Global Communication and All-Media Research Institute, included 222 mainstream media from 33 countries, analyzing content published by these media on their certified accounts on Twitter and Facebook last year.

The study designed a set of influence evaluation indicators to analyze media’s communication effectiveness in terms of exposure, interactions, dissemination, and recognition.

The report shows that Chinese media’s overall communication effectiveness on Facebook is higher than on Twitter. China Global Television Network (CGTN), People’s Daily, China Daily, Global Times, and Xinhua News Agency are among the top ranks of the 222 media, with CGTN ranked within the top 10 on the comprehensive list.

Source: Central News Agency (Taiwan), July 22, 2023
https://www.cna.com.tw/news/acn/202307220121.aspx

Briefings | | |   Information/Technology

People’s Daily: China Is Leading Quantum Technology Development Worldwide

People’s Daily published an article claiming that China has made significant strides in quantum technology and become a leading country at the forefront of quantum technology research globally.

The article praised Chinese scientist Pan Jianwei and his research team at the University of Science and Technology of China for spearheading the research.

According to the article, China launched the “Micius” satellite in 2016, which was the world’s first space quantum science experimental satellite. It established a global quantum communication experiment platform, significantly advancing space-based quantum communication technology. By distributing quantum keys between the satellite and ground stations, it achieved secure communication at 10kbps, far surpassing ground-based quantum communication levels. Quantum computing is considered a key technology for the next information revolution. In 2020, China successfully constructed quantum a computing prototype “Jiuzhang” computer with 76 photons, 100,000 times faster than the fastest supercomputer at that time. China later constructed a “Jiuzhang II” computer with 113 photons, outperforming the world’s fastest supercomputers by a factor of 10 billion. “Jiuzhang II” can solve a problem in 1 millisecond that would take the world’s fastest supercomputer 100 days to finish.

Source: People’s Daily, July 25, 2023
http://finance.people.com.cn/n1/2023/0725/c1004-40042581.html

Briefings | | |   Information/Technology