Major Taiwanese news network Liberty Times Network (LTN) recently reported that foreign companies in China are now facing a new challenge. More and more Communist Party branches have been established and are growing. In some cases, with the pressure from the Chinese government, these Communist Party branches are interfering with management activities. For example, when a U.S. engine manufacturer Cummins, headquartered in Indiana, decided to assign a manager for a project in China, the  Communists disagreed. Small Communist Party groups have existed in Chinese branches of foreign companies for many years. However, they never got involved actively in management activities. In the past several months, many of the Chinese partners of these joint ventures have asked for a “consulting role” for the Communist Party group before the board makes any decision. James Zimmerman, a lawyer operating in Beijing serves many U.S. international firms. Zimmerman said that quite a large number of his clients have received clear requests from the Communists. Most of the companies declined to comment on this matter to the reporters.

Source: LTN, April 17, 2018
http://news.ltn.com.tw/news/world/breakingnews/2398300

On April 16, The U.S. Commerce Department’s Bureau of Industry and Security, or BIS launched a 7-year tech ban that prevents U.S. companies from selling components and technology to ZTE. It cited “ZTE not only for violating export controls meant keep sensitive American technology out of the hands of hostile regimes like Iran’s; ZTE also lied to federal investigators and even deceived their own counsel and internal investigators about their illegal acts.” On April 19, Sina published a commentary article which is titled “Inspiration from the ZTE Incident: We can Never Win if we are just working as the delivery person.” The article provided the timeline and background of the ban and made the following statement: To such an extent, there is nothing ZTE can do… They have themselves to blame… We should understand that winning the war in the modern era will not simply rely on airplanes or naval vessels. The rise of big powers cannot rely on the exaggeration of the slogans from CCTV or other patriotic propaganda. But rather it involves the accumulation of “lonesome” time and effort in investment in core technology development. According to an article Aboluowang published on April 22, Xi’s recent speech at the National internet security and information work conference held on April 20 and 21 in Beijing could be interpreted as the first news report on Xi’s reaction to the ZTE ban. In his speech, Xi stressed that “core technology is an important weapon for a country and (we) must be determined and persistentent in speeding up the breakthrough in core technology.” Xi also mentioned that “China needs to formulate a fair market environment, strengthen intellectual property protection, and oppose monopolies and unfair competition.” The Aboluowang article commented that, given China’s existing business environment and political system, it is not optimistic as to how much of Xi’s wish can be realized.

Sources:
1. Sina, April 19, 2018
http://tech.sina.com.cn/it/2018-04-19/doc-ifzihnep7718716.shtml
2. Aboluowang, April 22, 2018
http://www.aboluowang.com/2018/0422/1103289.html
3. Xinhua, April 21, 2018
http://www.xinhuanet.com/politics/2018-04/21/c_1122719810.htm

Radio France Internationale reported that, according to a news report from Apple Daily, the Publicity Department has issued a notice to online video sites including Tencent, Youku and Iqiyi as well as movie theaters nationwide, to call off airing the documentary “Amazing China.” Some have speculated that the notice resulted from the recent trade war between China and the U.S. and the U.S. tech ban on ZTE, which could force ZTE out of business. According to Asia Times, The Shenzhen-based telecom and communications giant is among a slew of Chinese startups, innovators and private and state-owned conglomerates that was featured in the film. An internet posting asked, “Are we scared of the U.S. imperial sanctions?” According to Xinhua, “Amazing China” introduces a series of major developments the country has made since the 18th National Congress of the Communist Party of China in 2012, including the world’s largest radio telescope, FAST; the world’s largest maritime drilling rig, Blue Whale 2; and the development of 5G mobile technology.

Sources:
1. Radio France Internationale, April 20, 2018
http://cn.rfi.fr/%E4%B8%AD%E5%9B%BD/20180420-%E4%B8%AD%E5%9B%BD%E4%B8%8D%E5%86%8D%E5%8E%89%E5%AE%B3%E4%BA%86%E5%8E%89%E5%AE%B3%E4%BA%86%EF%BC%8C%E6%88%91%E7%9A%84%E5%9B%BD%E8%A2%AB%E4%B8%8B%E4%BB%A4%E5%81%9C%E6%92%AD

2. Xinhua, March 9, 2018
http://www.xinhuanet.com/english/2018-03/09/c_137027801.htm

3.Asia Times, April 23, 2018,
http://www.atimes.com/article/propaganda-film-quietly-pulled-beijing-zte-ban/