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U.S. FCC Takes Multiple Actions against Chinese Service Providers

Radio France Internationale (RFI) Chinese Edition recently reported that the U.S. Federal Communications Commission (FCC) is moving to prevent certification of wireless equipment by Huawei, ZTE, and other foreign companies deemed to pose a threat to U.S. national security. The new proposal would permanently ban all entities on the national security risk list (e.g. Huawei) from playing any role in equipment authorization. U.S. officials worry these companies could spy and steal data from the U.S., a charge that Chinese officials denied. The move is part of sweeping restrictions on Chinese technology companies implemented by the current and the previous U.S. administrations.

Well-known Chinese news site NetEase (NASDAQ: NTES) reported that the FCC is requiring U.S. subsidiaries of China Telecom, China Unicom, and China Mobile to stop their fixed or mobile broadband internet services in the United States. The order also applies to Pacific Networks and its wholly-owned subsidiary ComNet. The FCC previously banned these companies from providing telecommunications services. That decision has been upheld by U.S. courts. FCC Chairman Jessica Rosenworcel said that the commission has evidence that the Chinese telecom operators are now providing broadband services in the United States.

Sources:
(1) RFI Chinese, May 2, 2024
https://tinyurl.com/23fav8cy
(2) NetEase, April 26, 2024
https://c.m.163.com/news/a/J0NAUUVT05566G1I.html

LTN: China’s Top Brokerage Slashes Employee Salaries

Major Taiwanese news network Liberty Times Network (LTN) recently reported that CICC (China International Capital Corporation), the leading firm in China’s securities industry, is cutting the base salary of investment banking employees by up to 25 percent. This move is expected to affect more than 2,000 employees. In addition, CICC is also considering cutting headcount in Hong Kong’s offshore investment banking department. The market believes this reflects a weak IPO market in China and Hong Kong, with investment banking operations under tremendous pressure.

CICC is China’s largest investment bank. Last year, it cut employee bonuses by as much as 40 percent in response to Beijing’s call for “common prosperity.” Now, only a year later, CICC is cutting salaries by another quarter. CICC’s largest Chinese competitor, CITIC Securities, has also reportedly lowered the salary of its investment banking department, cutting base salaries by 15 percent, with some employees seeing cuts of up to 20 percent. According to London Stock Exchange Group (LSEG), funds raised by Chinese companies through initial public offerings (IPOs) fell sharply by 80 percent year-over-year in the first quarter of this year.

Source: LTN, April 29, 2024
https://ec.ltn.com.tw/article/breakingnews/4656258

Lianhe Zaobao: UK to Remove Chinese Surveillance Equipment

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the British government has announced plans to remove Chinese-made surveillance equipment installed in sensitive locations by April 2025.

The UK is increasingly concerned about Chinese espionage. In November 2022, British authorities stated that surveillance systems produced by companies subject to China’s national intelligence laws should not be used in sensitive places such as British government buildings and military bases. About half of the Chinese-made surveillance equipment installed in some sensitive locations has been replaced, and progress is being made in removing Chinese-made surveillance equipment in the remaining locations. Deputy Finance Minister Alex Burghart said in a statement that the work of dismantling the remaining equipment is being stepped up, and that about 70 percent of the job will be completed by October this year. UK lawmakers have also called for a ban on the sale and use of security cameras made by China’s Hikvision and Dahua over privacy concerns.

Chinese spies are targeting British officials holding sensitive positions in politics, defense and business in an attempt to extract secrets from them. British police last week charged two men with spying for China, one of whom allegedly worked as a researcher for a prominent member of the British Parliament.

Source: Lianhe Zaobao, April 29, 2024
https://www.zaobao.com.sg/realtime/world/story20240429-3531404?amp

Chinese Media: China’s Low-Altitude Flight Sector as an Engine of Economic Growth

Recently, Chinese media have frequently talked about the new “low-altitude sector” becoming a new growth engine for China’s economy. The term “low altitude” refers to low-altitude flight technology, including drones and electric vertical take-off and landing vehicles (eVTOLs). The following is a combined summary of two reports, by Xinhua and People’s Daily, respectively.

The low-altitude economy is a typical representative of new productive forces [within the Chinese economy]. This year, the “low-altitude economy” was mentioned in the central government’s work report. It will definitely reach a trillion-yuan-level (US $140 billion) industrial scale.

The low-altitude economy can use drones in many applications. These include “dropping take-out food from the sky,” sowing and fertilizing farmland, and delivering goods to the mountains. Electric Take-off and Landing (eVTOL) aircraft is one of the hottest fields. A 5-seat eVTOL recently conducted a flight from Shenzhen to Zhuhai crossing over both land and sea … reducing travel time [between the two cities] from 2 hours on the ground to 20 minutes in the air.

Many Chinese cities are building up their low-altitude economies. In April of this year Harbin City officially began construction of its large-scale industrial park for production of unmanned helicopters. The city will build a large-scale unmanned helicopter research institute, a “conversion base” for transforming manned aircraft into unmanned aircraft, and an unmanned aircraft production base. The city’s new facilities are expected to achieve an annual output value of 1 billion yuan, with the surrounding ecosystem producing 5 billion yuan of output value.

Since the beginning of this year, Suzhou, Jiangsu Province, has seen 251 new low-altitude economic projects started, with a total planned investment of over 73 billion yuan. Hefei, Anhui Province, has proposed to build an eVTOL integrated manufacturing plant. Anhui Province will build a low-altitude Flight Service Platform that integrates functions such as flight monitoring, airspace management, flight planning, navigation information, meteorological information, data management, and statistical analysis. Nanjing, Jiangsu Province, has 30 drone-related companies, covering parts of the industrial chain such as R&D, manufacturing, training, examination, operation service, and industry applications. Shenzhen, Guangdong Province, is host to several well-known domestic eVTOL manufacturers.

According to data released by the Civil Aviation Administration, as of the end of 2023, China had more than 1.26 million drones, a 32 percent increase from the previous year. In 2023, civilian drones accumulated more than 23 million flight hours. The “China Low-altitude Economy Development White Paper (2024),” recently released by the Smart Equipment Industry Research Center of CCID Consulting, shows that China’s civilian drone industry reached 117.43 billion yuan in 2023, a year-on-year increase of 32 percent. According to the paper, the eVTOL industry will see its first cycle of breakthrough commercialization in 2024, with the industry reaching a scale of 9.5 billion yuan by 2026 [in sales].

Sources:
1. Xinhua, April 28, 2024
http://www.news.cn/20240428/2323db6402404ec2b408888a74b17ea8/c.html
2. People’s Daily, May 5, 2025
http://finance.people.com.cn/n1/2024/0505/c1004-40229081.html

People’s Daily: First China-Laos-Thailand-Malaysia Rapid Freight Train Begins Operation

On April 30, the first “China-Laos-Thailand-Malaysia” all-rail rapid freight train departed from Chengdu International Railway Port in Sichuan Province, headed for Port Klang, Malaysia. The rail system expanded to Malaysia six months after the debut of the first “China-Laos-Thailand” all-rail rapid freight train.

The train started from Chengdu, passed through Vientiane, Laos and Nong Khai, Thailand, and then arrived at Port Klang, Malaysia. This route can ship goods from Chengdu to Thailand within 5 days and to Malaysia within 8 days, saving half of the time compared with the traditional land-sea combo route. It is expected to save about 20% of transportation costs. Moreover, the all-railway transportation process is more stable [than the alternative land-sea route].

Source: People’s Daily, May 2, 2024
http://sc.people.com.cn/n2/2024/0502/c379471-40831943.html

Chinese Attempts to Export Military Equipment Fall Through Three Times in a Row Despite Xi Jinping’s Involvement

According to a report by the South Korean media Chosun Ilbo on April 30th, Beijing has failed in three attempts at arms exports since last year, even with the intervention of its leader Xi Jinping.

The report stated that China originally planned to export the “S26T” (also known as the 039 “Yuan-class”) diesel submarine worth $300 million to Thailand. However, the contract was canceled in October last year because Beijing’s attempt to import German-made engines was blocked by the EU’s embargo on China. Subsequently, Beijing proposed to install domestically-made diesel engines of the same class, but Thailand rejected the proposal.

After Argentina began to introduce light fighter jets into its military, Xi Jinping proposed to then-President Alberto A. Fernández a delivery of 34 Chinese JF-17 fighters, offering low prices and financial support. After Javier Gerardo Milei was elected president of Argentina in November last year, however, Argentina decided instead to purchase 24 second-hand F-16 fighter jets from Denmark for $300 million.

In addition, in a competition for short-range ballistic missile orders in the Middle East earlier this year, the “Fire Dragon 300” rocket artillery produced by China North Industries Corporation (a.k.a. Norinco) was defeated by the Korean Tactical Surface-to-Surface Missile System (KTSSM).

Source: Epoch Times, April 30, 2024
https://www.epochtimes.com/gb/24/4/29/n14237064.htm

China’s Three Major Airlines Sign Contract to Buy Chinese-Made C919 Planes

China is building and promoting a domestically-manufactured commercial airplane, the C919.

On April 29, 2024, China Southern Airlines signed a purchase agreement with Commercial Aircraft Corporation of China (COMAC) to buy 100 C919 aircraft, with deliveries scheduled from 2024 to 2031. Air China signed an agreement on April 26, 2024 for 100 C919 aircraft, with deliveries also scheduled from 2024 to 2031. China Eastern Airlines was the first airline to order C919 planes. It placed an order for 5 aircraft in 2021 and another order for 100 aircraft in September 2023.

Source: Xinhua, May 1, 2024
http://www.news.cn/20240501/94f7e635c5ef4f2eadd721536911f9e2/c.html

People’s Daily: Growing Trade and Transport Links between China and Latin America

“Chilean salmon, Ecuadorian white shrimp, Peruvian blueberries, Argentine beef, coffee from Brazil and Colombia, …, are becoming common treats on Chinese dining tables,” reported People’s Daily.

The newspaper accredited the new development in Chinese culinary fare to the increasing maturity of transport routes linking China and Latin American countries. Sea freight routes between China and Latin America are mature, reported the article, covering most of the important ports in Latin American countries. Air freight routes have developed rapidly over the past five years, mainly in the two major Latin American cargo distribution centers in Mexico City, Mexico, and São Paulo, Brazil.

From 2000 to 2022, the total trade volume of goods between China and Latin America increased by a factor of 35, while the trade volume between Latin America and other parts of the world only increased by a factor of 4 during the same period. China remains the second largest trading partner of the Latin American region as well as the largest trading partner of several Latin American countries including Brazil, Chile, Peru, and Uruguay.

Source: People’s Daily, May 2, 2024
http://world.people.com.cn/n1/2024/0502/c1002-40227962.html