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NYSE Delists China Telecom, China Mobile and China Unicom?

Well-known Chinese news site NetEase (NASDAQ: NTES) reported on New Year’s Day that the New York Stock Exchange (NYSE) officially announced it will suspend trading of the stocks of China Telecom, China Mobile and China Unicom (Hong Kong) from January 7 to January 11, and delisting these three stocks has started. The action is to comply with the executive order President Trump signed in November, which was to ban investment in companies related to the Chinese military. The executive order does not allow U.S. investors to buy the stock of the companies that made it to the list that the Pentagon provided. This event is a sign that the United States is upping its game on the economic sanctions against China. It is expected that more Chinese companies will be forced out of the U.S. stock market in the future.

On January 5, Singapore’s primary Chinese newspaper Lianhe Zaobao reported that the NYSE decided to stop the delisting process of the three Chinese companies. This was right after the Chinese Ministry of Commerce’s statement on the willingness to take the “necessary steps” to counter the delisting. The report did not explain why the NYSE changed its mind.

Again on January 5, the BBC Chinese Edition reported that the NYSE decided to change its opinion for the second time and would continue the delisting of the three Chinese telecommunications giants. The new announcement said the decision was made based on the latest detailed instructions from the Department of the Treasury. This sudden and unexpected change caused stock market volatility.

China Mobile is China’s largest telecommunications provider with 946 million customers. It also has the world’s largest mobile network and customer population. China Telecom is China’s second largest telecommunications provider, with 346 million customers. The U.S. FCC withdrew China Telecom’s license to operate in the U.S. on December 10. China Unicom, also serving Hong Kong, is China state-owned and is the world’s fourth largest telecommunications company.

(1) NetEase, January 1, 2021
(2) Lianhe Zaobao, January 5, 2021
(3) BBC Chinese, January 5, 2021

Four Officials Punished or Expelled from the Party

On January 4, the Chinese Communist Party’s (CCP) Central Commission for Discipline Inspection (CCDI) announced the punishment of four officials. Hu Wenming, the former chairman of China State Shipbuilding Corporation, who was “involved in serious violations of discipline and the law,” was expelled from the CCP. His pay and benefits were cancelled, the proceeds from violations of discipline and the law were confiscated, and he was sent for prosecution. The CCDI criticized Hu for “loss of faith, ineffective implementation of major decisions of the CCP, malpractice for personal gain, abuse of power, and causing the major loss of assets of a state-owned company.” Hu Wenming was the commander-in-chief of the development of China’s first domestically-made aircraft carrier, the Shandong.

Wen Guodong, former deputy governor of Qinghai Province, was dismissed from public office and expelled from the party. The CCDI accused him of losing his ideals and beliefs; he also acted in a perfunctory manner on major decisions of the party. In addition, Wen was charged with acting as a “protective umbrella” for illegal coal mining.

Deng Huilin, former deputy mayor of Chongqing city, was also dismissed from public office and expelled from the party for serious violations of discipline and the law. His problems included ganging up inside the party, harvesting political capital, being interested in political speculation, making arrogant comments on major policies of the CCP, engaging in superstitious activities, and illegally accepting gifts and banquet invitations.

Luo Jiamang, former chief accountant of China National Cereals, Oils and Foodstuffs Corporation (COFCO), is the fourth official under CCP discipline. CCDI accused him of losing his ideals and beliefs, having little political consciousness, interfering with inspection work, and opposing organizational review.

Source: Radio Free Asia, January 4, 2020

Kyodo News: More than 40 Percent of Japanese Companies to Adjust Their Supply Chains

According to Kyodo News, the results of a survey show that more than 40 percent of the 96 Japanese companies that are recognized by the Japanese government as possessing critical technologies are adjusting their supply chains, including parts procurement and their supply networks. They are promoting the diversification of production bases and suppliers away from China.

The survey targeted 150 companies, all of which are listed companies that possess security-related technologies in the field of information and communication. Japan’s “Foreign Exchange and Foreign Trade Law” stipulates that foreign investors need to submit an application in advance when making capital contributions into these firms, whose stocks have been adopted by the Nikkei Index. Among the 96 that responded, 42 companies, or 44 percent, have implemented and discussed the diversification of their supply chains away from China and into Southeast Asia and India.

The Japanese government calls for the overseas production bases to be moved back home as a part of mitigating “China risks.”

Source: Kyodo News, December 30, 2020

India “Informally” Asked Airlines not to Bring Chinese Passengers

Well-known Chinese news site NetEase (NASDAQ: NTES) recently reported that, according to multiple Indian media sources, the Indian government has informally asked all airlines not to fly in any Chinese customers. This includes domestic airlines as well as foreign airlines. Currently there are no direct flights between China and India, but most Chinese travelers come from Europe. Some airlines asked the Indian government to provide them something in writing so that they can offer some official proof when cancelling legitimate customers’ flights. This appears to be a strong retaliatory response from India to China. At the beginning of December, China banned travelers from the UK, Russia and China, citing temporary pandemic related concerns. In the meantime, around 1,500 Indian seamen were stuck in the Chinese port of Jingtang for months since the ships were not allowed to disembark the sailors or to leave the port.

Source: NetEase, December 28, 2020

BBC Chinese: British Public Opinion on China Has Changed Drastically

BBC Chinese Edition recently reported, based on a newly released survey report which polled 13 European country residents on British public opinion, that, during this time of the pandemic, the people in Britain have changed their minds significantly about China. The report was published jointly by the Central European Institute of Asian Studies (CEIAS) and the Chatham House. According to the report, currently 62 percent of the British people surveyed have a “negative” impression of China. This number is only behind Russia and North Korea. This is also the highest number among the 13 European countries. In the meantime, over 68 percent of the people polled said China’s image has gotten worse in the past three years. The worsening Chinese image may result mostly from the pandemic. However, the situation and the wide reports on Hong Kong and Xinjiang have also played an important role. The pressure in the UK to take a more hawkish stance against China has not been so strong for a long time. During the pandemic, Liu Xiaoming, the Chinese ambassador to Britain, said earlier at an online press conference, “China has not changed. The responsibility for the difficulties between China and UK rests solely with the United Kingdom.

Source: BBC Chinese, January 1, 2021

China Pushes the Launch of COVID 19 Vaccine

As COVID 19 spread from Wuhan to the world, countries around the world were in fierce competition to develop a vaccine. In June, China made high profile claims that it had made significant progress in vaccine deployment, but so far, there is still a lack of confidence in the vaccines that China has pushed forward due to the lack of data transparency and effectiveness.

Recently after China Kexing Biosciences abruptly delayed the release of the COVID 19 vaccine test results, Watson Bio announced that it will start producing 120-200 million doses of mRNA vaccine in 2021, even though the vaccine is still in the clinical trial I stage. A former official of China Red Cross criticized the premature release of the vaccine. He said that after Pfizer and Mederna successfully launched the COVID vaccine, China has been under pressure to introduce its own version. He accused China of disregarding the potential risk and of using the general public for human trials instead.
Another report that Caixin published showed that there are a number of other pharmaceutical companies involved in vaccine manufacturing. A couple of them were close to finishing the clinical trial stage III but had to delay the release of trial data due to a deficiency in trial results. For the vaccines that have been approved, there are restrictions imposed on who can receive the vaccine. According to an official notice issued by Qingyan City of Gansu province, the age group of the vaccine recipients is limited to 18-59 and to those with no chronicle illness. The same restriction was applied to the vaccines sold in the United Arab Emirates.

Source: Radio Free Asia, December 28, 2020

China Could Dominate World’s New Energy Vehicle Industry

In the past 30 years, China had a tough time overcoming core technical difficulties in the domestic auto industry using the traditional internal combustion engines technology. However, with the rise of new energy led by electric vehicles, it might enable China to realize its dream to lead new energy vehicle manufacturing and the supply chain in the world.

China has become the world’s largest market for car sales. According to statistics from data service agency Statista, China registered 21.05 million new motor vehicles in 2019, followed by the United States, with 16.97 million new vehicles sold in 2019.

According to statistics from the China Association of Automobile Manufacturers and the International Energy Agency, China’s new energy vehicle sales in 2019 were 1.206 million, accounting for 55 percent of the total global sales of 2.21 million. By the end of 2019, China’s cumulative sales of electric passenger vehicles reached 3.66 million, accounting for 48 percent of the global total. In 2019, the number of electric vehicles in China was 2.58 million, compared with 970,000 in Europe and 880,000 in the United States.

In October of this year, the State Council issued a new energy vehicle industry development plan for 2021-2035, setting the new energy vehicle sales target for 2025 at 20 percent of total vehicle sales. The Plan also included a “full value chain” proposition in the battery industry while encouraging companies to gain access to key mineral resources such as lithium, nickel, cobalt, and platinum. Currently China has 80 percent of the market share in the cobalt refining industry. Among the top six global cobalt refining companies, five of those are Chinese companies. Of the 14 largest cobalt mines in the Congo, eight are owned by Chinese companies.

To reach the new energy vehicle development plan, the Chinese government has given hundreds of billions in subsidies to the electric vehicle industry.

According to CSIS (the Center for Strategic and International Studies) statistics, in the past 10 years, the Chinese government has subsidized the new energy vehicle industry in various forms equivalent to 676 billion yuan (approximately US$100.9 billion). Although government subsidies were reduced in 2019, 30.7 percent of China’s new energy vehicle sales revenue still comes from government subsidies. In 2019, there were 119 active new energy vehicle manufacturers in China.

China’s electric vehicle industry is also alleged to have engaged in technology theft. In February 2020, William Evanina, director of the National Counterintelligence and Security Center, singled out two fields where China is putting a priority on technology theft: electric vehicles and aircraft. Evanina was one of many American officials speaking at a conference on “Chinese economic espionage” hosted by Washington’s Center for Strategic and International Studies. In a lawsuit Tesla filed in California in 2019, it claimed that a former engineer who worked at the company copied more than 300,000 files related to the source code of the autopilot before joining Xiaopeng Motors.

Facing the rise of China’s electric vehicle industry, improving the competitiveness of the United States in this field is a national security concern. In a recently published report, the organization “Protect the Future of America” recommended that the U.S. government restore subsidies for consumers to purchase electric vehicles, develop a mineral supply chain that does not rely on China, and encourage U.S. auto companies to cooperate with each other to resist China. Experts, however, also warn that since the United States has a solid foundation in the traditional automobile manufacturing industry and employs a large number of workers, the US automobile industry cannot rush to transition to new energy vehicles too quickly.

Source: Voice of America, December 28, 2020

Epoch Times: China’s Provincial Authorities Set Quantitative Standards for Obtaining Overseas Advanced Technologies for Job Performance

Epoch Times obtained an internal document from the Hebei (Province) authorities. The document revealed that the provincial authorities set quantitative standards for obtaining advanced overseas technologies as job performance indicators. Moreover, institutions under the Ministry of Science and Technology of the Communist Party of China are directly involved.
The document was the “Provincial Budget Project Performance Evaluation Form” (issued on November 17, 2020) by the Hebei International Talent Exchange Association. It shows that the organization’s “performance indicators” include four components: expanding at least 50 cooperation channels; organizing no less than four international scientific and technological cooperation activities; preparing no less than 50 foreign technology projects in reserve, achieving no less than five cooperation intentions; and adding 60-80 foreign technology experts into the reserve.

Its “output indicators” include: introducing foreign advanced scientific and technological innovations and realizing technology transfer, with the number being equal to or greater than 50; the introduction of 3 high-end talent teams in areas of information and communication, biotechnology, medicine and health, new materials, advanced manufacturing, energy, aerospace, and artificial intelligence; signing at least five relevant agreements with friendly groups, expert organizations, research institutions, and universities in the world.

The Hebei International Talent Exchange Association (International Technology Transfer Center) was established in 1988. It has more than 200 technical projects and more than 300 experts, covering more than 10 categories including artificial intelligence, information communication, biotechnology, medicine and health, new materials, modern services and more.

In its “Application Report of Establishing the International Technology Transfer Center by the Hebei International Talent Exchange Association” on November 21, 2020, it is revealed that the focus of the association’s work is to “introduce advanced scientific and technological innovations from abroad and realize technology transfer.”

In its “Presentation of Achievements, it stated that the association and multiple institutions jointly initiated the “Alliance of International Science and Technology Innovation Cooperation.”

So far, this alliance has won the Israeli agriculture project, the production of nanocarbons from waste plastics project, the Hungarian energy grass project, German industrial wastewater treatment technology, South Africa quinoa seed and planting technology, South Africa glaucoma treatment technology and more.

Source: Epoch Times, December 11, 2020