Chinascope – Page 152

Global Times: U.S. Is Tightening Export of Chip Equipment to China

Global Times recently reported that two U.S. chip equipment companies confirmed that the U.S. crackdown on Chinese chips has expanded from 10 nm to 14 nm technologies. In addition, the scope of the new regulations may not be limited to China’s SMIC (Semiconductor Manufacturing International Corporation), but may also include other chip manufacturers investing and operating in China. Analysts expressed the belief that the latest move by the United States to suppress China’s chip industry may try to have a long-term impact on the Chinese chip industry, On the one hand, it will also hurt the interests of American companies. The scope of U.S. export restrictions may include other chip manufacturers operating in China, such as Taiwan’s TSMC. According to people familiar with the matter, in the past two weeks or so, all U.S. equipment makers have received letters from the Commerce Department describing the requirement. A statement released by the U.S. Department of Commerce said that the Biden administration is tightening relevant policies against China, focusing on weakening China’s efforts to produce cutting-edge chips in response to major national security risks facing the United States. In the eyes of the U.S. government, 14nm is a watershed between advanced and backward chip manufacturing processes. Since 14nm and below technologies are considered advanced, the U.S. embargo focuses on chip equipment with 14nm and below capabilities in order to achieve the purpose of containing Chinese chips and their competition. The chip industry is an industry requiring close cooperation among global industries. The suppression of China by the United States will inevitably affect the normal development of the global chip industry.

Source: Global Times, August 1, 2022
https://world.huanqiu.com/article/493RXZYbLEo

Briefings | | August 2, 2022 | Information/Technology US-China Relations

North Dakota Governor Urged Federal Investigation of Chinese Company’s Purchase of Land near Air Force Base

Doug Burgum, Governor of North Dakoda wrote a letter to Secretary of the Treasury Janet Yellen and Lloyd Austin, Secretary of Defense, asking the Committee on Foreign Investment in the United States (CFIUS) to speed up its review of the Chinese company Fufeng Group’s plan to purchase land in North Dakota because it is a national security concern. Also in a letter to the U.S. Department of Defense ,Senators John Hoeven, Kevin Cramer and Marco Rubio requested that (CFIUS) conduct a review of the Fufeng Group’s land purchase.

Fufeng Group wants to buy 360 acres of land in Grand Forks, North Dakota, to build a corn processing plant. However, the site just happens to be only 22 miles away from the Grand Forks Air Force Base, which is what raises the national security issue.

China Aviation Industry General Aircraft Co. Ltd bought Cirrus Aircraft, headquartered in Duluth, Minnesota in 2011. Cirrus has factories in Duluth and Grand Forks. Its Grand Forks plant was even closer to the air force base than Fufeng Group’s planned plant site.

Source: VOA, July 28, 2022
https://www.voachinese.com/a/burgum-calls-for-security-review-of-chinese-firm-s-project-20220727/6676606.html

Briefings | | August 1, 2022 | Defense/Military US-China Relations

China Opposes “Chip 4” Alliance

China has taken multiple actions to oppose the “Chip 4” alliance, an initiative that the U.S. is proposing for four major chip production countries, the U.S., Japan, South Korea, and Taiwan. Beijing is afraid that forming the “Chip 4” alliance will isolate China. Other consequences are implied.

Huanqiu (Global Times) published a commentary on July 20, stating, “(T)he South Korean government and related companies can judge by common sense alone that participating in this matter not only will not have any incremental gains, but will also face the risk of significant damage to their interests. Data shows that last year, South Korea’s semiconductor exports totaled $128 billion, of which 60 percent went to mainland China and Hong Kong. To cut ties with this large market is tantamount to business suicide. The U.S. has handed South Korea a knife and is forcing it to do so.”

On July 25, China’s Ambassador to South Korea Xing Haiming met with Yang Hyang-ja, a South Korean National Assembly member and Chairman of the Special Committee on Strengthening the Competitiveness of the Semiconductor Industry. Xing said, “China is willing to work with South Korea to adhere to the principle of a fair and just market, eliminate external interference, and to strengthen cooperation in semiconductors and other fields .…”

Xing met with South Korean Trade Minister Ahn Duk-geun on the same day.

Huanqiu (Global Times) also published an article on July 28 to suggest that Taiwan should not join the “Chip 4.” It stated, “Currently, Taiwan’s chip exports to the mainland account for more than 40 percent of its total chip exports. Semiconductors and other electronic and communication products are large commodities. If the TSMC (Taiwan Semiconductor Manufacturing Company) joins the ‘chip 4’ alliance to exclude the mainland China market, it will undoubtedly cause huge losses to the entire Taiwan economy.”

Sources:
1. Huanqiu (Global Times), July 20, 2022
https://opinion.huanqiu.com/article/48uEl4JUSyX
2. Global Times, July 25, 2022
https://www.globaltimes.cn/page/202207/1271363.shtml
3. Huanqiu (Global Times), July 28, 2022
https://taiwan.huanqiu.com/article/4909A65sqgo

Briefings | | August 1, 2022 | Economy/Resources Information/Technology US-China Relations

Former Central Bank Official: China’s Real Estate Industry Will No Longer Drive Economic Growth

A former Chinese official, Sheng Songcheng, wrote an article titled, “China’s Real Estate Market Is Now at a Turning Point.” Sheng is the former Director of the Survey and Statistics Department of the People’s Bank of China and is now a Professor of Economics and Finance at the China Europe International Business School.

Sheng said that China’s real estate industry is a at a transition point. In the future, China is unlikely to rely on this industry to boost large economic growth. China’s per capita dwelling space is close to 2/3 of that of the United States, while its per capita GDP is only 1/6 of that of the U.S. This indicates that the development of China’s real estate industry has reached a new stage (a ceiling).

Sheng argued that, although real estate development may not help the economic growth much in the long run, it still can in the short term, especially during the downfall of the economy due to the COVID lockdown,. He suggested that the government should loosen policies and provide more money to help the struggling real estate companies to complete their projects.

Source: SINA, July 29, 2022
https://finance.sina.com.cn/china/2022-07-29/doc-imizmscv4009355.shtml?cre=tianyi&mod=pcpager_news&loc=21&r=0&rfunc=96&tj=cxvertical_pc_pager_news&tr=174

Briefings | | August 1, 2022 | Economy/Resources

One Year after “Double Reduction” Policy, China’s Tutoring Industry Goes Underground and Is Unreachable

China attempted to regulate the tutoring industry with a “double reduction” policy to reduce the burden on both students and parents. A year later, the tutoring industry has not disappeared, but has gone underground, with higher tuition fees and more hunting efforts that end up redistributing resources to middle and upper-class families.

For example, a parent surnamed Wu in Beijing said her child’s English class used to cost about $20,000 a year before the “double reduction,” but now it’s twice as much due to a special arrangement for a private tutor. She estimated that her daughter’s extracurricular learning costs are more than $10,000 a month. Such tutoring expenses are affordable for the Wu family. However, most Beijing families earn only a quarter of her family’s income.

Another parent in Shanghai, surnamed Fan, said her daughter can only attend a tutorial class that has been converted to a non-profit organization due to the “double reduction” policy. To cut costs, the classes have switched from physical to online. Her child has not gained much and her grades have slipped.

Fan said that although she saved money on tutoring, she had to spend more time teaching her daughter. She found she could not teach as systematically as the tutoring class and she also said it was difficult for her to find underground tutoring as other parents have been reluctant to share their information. In some cases, parents worry someone might tip off the authorities. In others, it’s because the competition at their children’s schools is so fierce. They don’t want other children to have access to the same tutor.

Source: Central News Agency (Taiwan), July 26, 2022
https://www.cna.com.tw/news/acn/202207260241.aspx

Briefings | | July 31, 2022 | Economy/Resources

China Imposes New Restrictions on Live-Stream e-Commerce

Recently, China’s State Administration of Radio and Television and the Ministry of Culture and Tourism jointly issued a “Code of Conduct for Live-Stream Online Hosts.”

The purpose of the 18-article regulation was to curb the spread of perceived opposition to the CCP in online e-commerce, such as was shown by Li Jiaqi, a top e-commerce live streamer, two weeks before the regulation. In the evening on June 3, Li and his co-host were presented on TV before the audience with a plate of the British brand Wall’s layered ice cream. The ice cream was garnished with a chocolate ball and a chocolate stick on top. The show ended abruptly. The CCP authorities believed that it resembled the shape of a tank.

On the evening of June 4, 1989, the CCP leaders sent military tanks and heavily armed troops to Beijing’s Tiananmen Square and cracked down on student protesters who were demanding democracy and greater freedom. According to a recently declassified secret cable written on June 5, 1989, by Sir Alan Donald, the then-British ambassador to China, the death toll was 10,000. The CCP had announced a death roll of 241. The “Tank Man” picture showing a young man standing in front of Chinese military tanks trying to stop the tanks at Tiananmen Square in Beijing in 1989 has become the worldwide monumental symbol of the June 4 massacre. As a result of the vigilant efforts of the CCP to censor any references to the killings, most young Chinese, especially those born after the massacre, have little knowledge of the killings.

The 18-article regulation prohibits 31 behaviors in the live stream audio-visual programs.

Online live streamers must be politically correct. They must have a correct perspective of the world, life, and values. They must be “actively practicing the Core Socialist Values.”

Of the prohibitions, Article 14 Section 3 prohibits “publishing content that weakens, distorts or denies the leadership of the Communist Party of China, the socialist system, or economic reform and opening up.”

Under Article 17, online accounts shall be closed for those with serious issues or repeated problems who do not change their ways. “Their names shall be entered onto a ‘blacklist’ or ‘warning list’ and shall not be permitted to resume broadcasts through methods such as changing account names or platforms.”

Source: China National Radio and Television Administration, June 22, 2022 http://www.nrta.gov.cn/art/2022/6/22/art_3730_60758.html

China Ministry of Culture and Tourism, June 22, 2022 http://zwgk.mct.gov.cn/zfxxgkml/qt/202206/t20220622_934011.html

Briefings | | July 29, 2022 | Government/Politics

Communist China Created a Party School to Train African Leaders

In Early June,at the Julius Nyerere Leadership Centre in Tanzania. Beijing hosted a training of 120 officials who are the backbone of the ruling parties of six Southern African countries. The six countries include Tanzania Ny, South Africa, Mozambique, Angola, Zimbabwe, and Namibia.

These six countries founded the Julius Nyerere Leadership Centre, with the Chinese Communist Party’s (CCP’s) Foreign Liaison Department providing a grant of US $40 million.

Source: Epoch Times, July 3, 2022
https://www.epochtimes.com/gb/22/7/3/n13772412.htm

Briefings | | July 28, 2022 | Geo-Strategic Trend Government/Politics

Number of Japanese Companies in China Reaches Ten-year Low

According to a survey released by a Japanese data provider, as of June 2022, the number of Japanese companies in mainland China was 12,706, the lowest for the past 10 years. The survey points out that the “Zero Covid” policy has added to the risk of doing business in China. It also points to a trend involving the growing exodus of companies from China.

Compared to the last survey conducted in February 2020, there were 940 fewer Japanese companies (about 7 percent less). Among all the previous surveys, the year 2012 saw the highest number (14,394) of Japanese companies in China.

Among all the cities, Shanghai hosts the largest number (6,028) of Japanese companies. However, the number is 272 lower than it was in the previous 2020 survey. Since late March, and for about two months, Shanghai has been under lockdown and has been closed. Factors such as a delayed supply of parts have dealt a huge blow to the operations of Japanese companies.

The data provider, Imperial Database, observes that the extended lockdown under the “Zero Covid” policy has led to work stoppages, production shutdowns, and logistics and supply chain disruptions. There is an ongoing movement of European and American companies leaving China, with Japanese companies also pushing for supply chain adjustments.

Source: Kyodo News, July 23, 2022
https://china.kyodonews.net/news/2022/07/462eb725f11e.htmlS

Briefings | | July 28, 2022 | Economy/Resources

China’s Reaction to Trump’s Election Win

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized