Chinascope – Page 238

Shortage of Semiconductors in China Boosts Circulation of Fake Chips

The global shortage of semiconductors has increased the number of fake chips circulating in China. According to Chinese media, the illegal chips come from two channels. One source is electronic waste. The companies remove the evidence from the old chips. Then they clean and repackage them and sell the second-hand chips at a lower price. Others are defects directly from the manufacturers’ production line. Compared to the genuine product, the performance and reliability of the fake chips are usually inadequate.

These chips are mainly used in consumer electronic products. Unlike automobiles and other manufacturing industries, some OEMs (original equipment manufacturers) of consumer electronics do not conduct long-term verification and testing of chips and other supplies.

Counterfeit or refurbished components have always been in circulation, but the situation this year is serious. Originally, the price of a used chip was only 50 percent of the market price, but now the price is rising and is even close to the market price.

China’s electronic components trading hub is almost the world’s largest, with many companies dismantling tens of thousands of e-waste items every day. This provides opportunities for counterfeit chips, which have even found their way to overseas supply chains.

Source: Central News Agency, June 22, 2021
https://www.cna.com.tw/news/acn/202106220168.aspx

Briefings | | June 23, 2021 | Economy/Resources

Sputnik Chinese: China’s Nuclear Arsenal Shows Record Growth

Well-known Russian news agency Sputnik recently reported on its Chinese Edition site that the Stockholm International Peace Research Institute (SIPRI) annual report showed the growth rate of China’s nuclear arsenal ranked among the world’s leaders for the second consecutive year. Within one year, China’s existing nuclear warheads increased by 30, reaching 350. In 2019, China surpassed France (which had 290 nuclear warheads) in this regard, and in 2020 it became the world’s third largest nuclear arsenal country. SIPRI pointed out in its annual report that China is building a nuclear-weapon society, which includes solid-fuel ground-based missiles, six nuclear submarines and bombers equipped with ballistic missiles. These strengthen its ability to respond when threatened. The report also indicated that the Chinese People’s Liberation Army has resumed the use of H6N bombers on nuclear weapons and has also developed the first H20 strategic bomber that can refuel in the air and has a flying distance of 8,500 kilometers. The major nuclear powers, Russia and the United States, reduced their arsenals of nuclear warheads last year. Russia reduced its arsenal by120 warheads to 6,255, and the United States reduced its arsenal by 150 warheads to 5550.

Source: Sputnik Chinese, June 15, 2021
https://sputniknews.cn/military/202106151033894197/

Briefings | | June 22, 2021 | Defense/Military

BBC Chinese: Kim Jong-Un Publicly Admitted North Korea’s Food Shortage

BBC Chinese recently reported that, at a meeting of the Central Committee of the Workers’ Party of Korea (WPK), North Korean leader Kim Jong-Un officially admitted that North Korea is facing a food shortage crisis. He stated, “The food situation that the people now face is becoming increasingly tense.” Due to the flooding that last year’s typhoon caused, the agricultural sector failed to achieve its food targets. There are reports that North Korean food prices have soared. Due to economic difficulties and tensions with the U.S., North Korea’s imports from China recently surged. However, North Korea has just closed its borders again to control the spread of the Covid-19 epidemic. As a result, trade with China dropped sharply. Generally North Korea depends on China for food, fertilizer and fuel. It has been struggling because of international sanctions over its nuclear program.

Source: BBC Chinese, June 18, 2021
https://www.bbc.com/zhongwen/simp/world-57510711

Briefings | | June 21, 2021 | Geo-Strategic Trend

UNESCO Science Report 2021: 44 Percent of Increase in R&D Investment is from China

The United Nations Educational, Scientific and Cultural Organization (UNESCO) publishes its science report once every five years. The report for 2021 shows that the global average science expenditure, as a share of GDP, increased from 1.73 percent in 2014 to 1.79 percent in 2018.

The data show that China is the most aggressive of all countries in the world in increasing its science spending, with 44 percent of the incremental global R&D investment coming from China. In 2018, 24.5 percent of global R&D spending was from China, compared to 21.2 percent in 2014.

The report reads that China’s spending on science increased to 2.19 percent of GDP in 2018, compared with 2.03 percent in 2014. Meanwhile, in absolute terms, the U.S. still spends more on science than China, taking into account purchasing power parity, with $460.6 billion in the U.S. and $439 billion in China. Science spending as a share of U.S. GDP rose to 2.84 percent in 2018 from 2.72 percent in 2014. The country with the largest share of science spending in GDP is Germany, where this share increased to 3.09 percent in 2018 from 2.87 percent in 2014.

In addition, the report notes that the country with the most international patents registered is China (31.7 percent of the global total), followed by the U.S. (21.7 percent), Japan (20 percent) and the EU (13.9 percent).

Source: UNESCO
https://www.unesco.org/reports/science/2021/en/race4smarter-development

Briefings | | June 20, 2021 | Geo-Strategic Trend

China’s FDI in Europe Fell to a Ten Year Low

According to a joint report by the US-based Rhodium Group and the Mercator Center for China Studies (MERICS) in Berlin, China’s FDI in Europe continued to fall, to a 10-year low: Shrinking M&A activity meant the EU-27 and the United Kingdom saw a 45 percent decline in completed Chinese foreign direct investment (FDI) last year, down to EUR 6.5 billion from EUR 11.7 billion in 2019, taking investment in Europe to a 10-year low.

The UK saw Chinese investment plummet by 77 percent, although more than half of total Chinese investment in Europe went to the “Big Three” economies – Germany, the UK and France. Infrastructure, ICT and electronics were the top three sectors, attracting 51 percent of the total investment from China. Poland rose to become a popular destination, though inflows of EUR 815 million were largely concentrated on one acquisition.

Chinese FDI faces greater scrutiny by EU member states: The Covid-19 crisis prompted the EU to issue guidelines stepping up scrutiny of FDI in Europe’s critical assets. 14 EU member states, including Italy, France, Poland and Hungary, updated their FDI screening mechanisms last year. Member states have also moved to block several acquisitions by Chinese firms.

Headwinds against Chinese investment in Europe will grow in 2021: Chinese FDI activity into Europe continued to fall in the first quarter of 2021 and has remained weak elsewhere. Europe remains an attractive investment location. However, continued disruption from Covid-19, high barriers to outward capital flows in China and rising regulatory barriers to foreign investment in Europe have all contributed to low levels of Chinese investments. Deteriorating EU-China relations will create additional headwinds for Chinese investors going forward.

Source: Radio France International, June 16, 2021
https://rfi.my/7Uin.T

Briefings | | June 20, 2021 | Geo-Strategic Trend

Chinese CCTV: China Asked the U.S. to Drop “Completely” All Sanctions against Iran

Chinese Central Television (CCTV) recently reported that, not long ago, the Iran Nuclear Deal joint committee resumed the negotiations in Vienna. Wang Qun, the Chinese Representative to the negotiations and the Chinese Permanent Representative to the United Nations in Vienna, attended the meeting and explained the Chinese position. Wang said this new round of negotiations had dragged on for 11 weeks already, yet the topic of dropping the sanctions went nowhere. The United States should drop all of its single-sided sanctions against Iran, as well as all of the long-arm sanctions against other countries involved. The U.S. embargo on conventional weapons against Iran should also be discontinued. Since the U.S. has made the political choice of returning to the Iran Deal, the discontinuation of the sanctions should be comprehensive, clean and thorough on all fronts. China also asked all parties to engage deeply and to prevent future random departures. Wang called for “hard work” to reach the resumption of the Iran Nuclear Deal as early as possible.

Source: CCTV, June 13, 2021
http://m.news.cctv.com/2021/06/13/ARTI4RVhrry0ybVpTdxOy4TP210613.shtml

Briefings | | June 15, 2021 | Geo-Strategic Trend US-China Relations

China Enacted New Data Security Law

The Standing Committee of China’s National People’s Congress passed the Data Security Law (DSL) on June 10, elevating government regulation of private sector data. The new law, which will take effect on September 1, regulates the collection, use, processing and transmission of data and demonstrates Beijing’s growing ambition for data control.

The DSL provides that companies that violate the national core data management system, “endanger national sovereignty, security and development interests,” or illegally transfer “important national data” overseas will face fines of up to 10 million yuan ($1.6 million) and may be forced to close down.

The law applies a broad definition of “core data.” It refers to any data “related to national security, the lifeline of the national economy, important people’s livelihoods, vital public interests, and other concerns.”

DSL details how data collected by enterprises inside China should be exported, including operators of “critical information infrastructures,” energy, transportation, finance, public communication and other fields. The cross-border transfer of such data will be subject to the provisions of the Cybersecurity Law.

In the Cybersecurity Law enacted effective in 2017, Chinese regulators formally made data localization a prerequisite for foreign financial institutions attempting to gain a foothold in China. In the same year the U.S. tech giant Apple promised to store its customers’ cloud-based data in a company owned by the Chinese government, and to set up data centers in China.

On May 12, China also released “Certain Regulations on the Security Management of Automobile Data Security (Draft for Public Opinion),” which prohibits the transmission of driving data involving road traffic, vehicle location, images and other data outside China. Soon afterwards, Tesla announced that it would set up several data centers in China. On June 11, the second of the enactment of DSL, Tesla posted on its Weibo account, “(We) will strictly comply with the data security law.”

Chinese President Xi Jinping is increasingly inclined to tighten data control. Radio Free Asia cites sources familiar with internal discussions that Xi once said in a closed-door meeting, “Whoever controls the data has the initiative.”

Source: Radio Free Asia, June 14, 2021
https://www.rfa.org/mandarin/yataibaodao/jingmao/cm-06142021103254.html

Briefings | | June 15, 2021 | Information/Technology

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