Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
The PAGEs (see Tabs, above) attempt to make the information more meaningful by putting some structure to the information we have researched and assembled since 2006.
The incident comes less than a month after over 44 CRPF personnel were killed and many injured on February 14 in Jammu and Kashmir’s Pulwama.
SNS Web | New Delhi | March 7, 2019 12:47 pm
Security personnel carry out investigation at the site where a blast took place after a grenade attack by militants at the busy main bus terminus in Jammu and Kashmir, on March 7, 2019. (Photo: IANS)
One person was killed and 29, including a woman injured in a blast after a grenade was tossed at a bus in the general bus stand in the heart of Jammu on Thursday. The condition of five injured is said to be serious.
The killed youth has been identified as a 17-year-old Mohammad Sharik of Haridwar in Uttrakhand.
Minister of State for Defence Subhash Bhamre said a local investigation has been initiated into the incident. He further said the government has given complete liberty to the forces to take all necessary steps.
The Jammu and Kashmir Police has been rushed to the site of the blast.
The Chinese grenade exploded in the bus at about 12 noon. The driver and conductor were among the injured rushed to the Government Medical College, Jammu. The injured include passengers belonging to Bihar, Punjab, Haryana, Uttrakhand, Jammu and the Kashmir valley.
Visuals from the blast site showed the damaged bus of the J&K Road Transport Corporation (JKSRTC) in which the grenade exploded.
The area has been cordoned off by the security personnel. Nature and the cause is being ascertained, police said.
Fifteen suspects have been rounded up for interrogation.
The grenade attack has coincided with the shifting of detained separatist Yasin Malik to the Jammu’s Kot-Bhalwal jail.
Police suspected the JeM outfit behind the attack. Some radicals had threatened of revenge during the recent communal tension here when about six cars were burnt.
K Vijay Kumar and KK Sharma, both advisors to the Governor, visited the spot to take stock of the situation. The divisional commissioner, deputy commissioner and senior police and civil officers also visited the spot.
This is the third grenade attack in the bus stand during the past few months.
The blast comes at a time when Jammu and Kashmir is on a high alert following the heightened tensions between India and Pakistan in the wake of the Pulwama terror attack.
Former chief minister Mehbooba Mufti condemned the incident and called for unity to defeat terror elements in the state.
“I condemn this act of terror in the strongest possible terms. My prayers for speedy recovery of those injured. The perpetrators are out there to inflict pain and divide us. Our unity has to be our tool to defeat them,” Mufti tweeted.
The provincial president of National Conference, Devender Rana, visited the hospital to inquire about the wellbeing of injured persons.
The incident comes less than a month after over 44 CRPF personnel were killed and many injured on February 14 in one of the deadliest terror strikes in Jammu-Kashmir when a Jaish-e-Mohammad (JeM) suicide bomber blew up an explosive-laden vehicle near their bus in Pulwama district.
The bus was part of a convoy of 78 vehicles carrying around 2500 CRPF personnel from Jammu to Srinagar.
Rwandan Foreign Minister Richard Sezibera speaks at a press conference held by the Rwandan Ministry of Foreign Affairs and International Cooperation in Kigali, capital of Rwanda, March 5, 2019. The Belt and Road Initiative is a partnership that is mutually beneficial for Rwanda and addresses Rwanda’s development challenges, Rwandan Foreign Minister Richard Sezibera said here Tuesday. (Xinhua/Cyril Ndegeya)
KIGALI, March 5 (Xinhua) — The Belt and Road Initiative is a partnership that is mutually beneficial for Rwanda and addresses Rwanda’s development challenges, Rwandan foreign minister Richard Sezibera said Tuesday in Rwandan capital city Kigali.
The Belt and Road Initiative is a good initiative, which addresses development requirements of China’s partners, said Sezibera when responding to a question on the Belt and Road Initiative and second Belt and Road Forum for International Cooperation at a press conference held by Rwandan Ministry of Foreign Affairs and International Cooperation.
China is an important partner for Rwanda at all levels, and Rwanda welcomes the growing partnership with China, he said, adding that Rwanda and China have important relationships in infrastructure development, party-to-party and people-to-people exchanges, and at the political level.
The second Belt and Road Forum for International Cooperation is going to be held in April in Beijing.
BEIJING, March 5 (Xinhua) — China will lower its defense budget growth rate to 7.5 percent in 2019, from last year’s 8.1 percent, according to a draft budget report submitted to the annual session of the National People’s Congress (NPC) Tuesday.
The 2019 defense budget will be 1.19 trillion yuan (about 177.61 billion U.S. dollars), figures from the report show.
The rate marks the fourth straight year for the budgeted growth rate remaining single digit, following five consecutive years of double-digit increases.
China’s budgeted defense spending growth rate stood at 8.1 percent in 2018, 7 percent in 2017, and 7.6 percent in 2016.
“The Chinese government has always paid attention to controlling the scale of defense expenditure,” said He Lei, former deputy head of the Academy of Military Sciences.
Describing China’s defense budget increase as reasonable and appropriate, Zhang Yesui, spokesperson for the legislative session, said the rise aimed to “meet the country’s demand in safeguarding national security and military reform with Chinese characteristics.”
“China’s limited defense spending, which is for safeguarding its national sovereignty, security and territorial integrity, poses no threat to any other country,” Zhang said at a press conference Monday.
The expenditure has been mainly used for advancing defense and military reforms, supporting military training and diverse tasks, modernizing weapons and equipment, and improving welfare of service personnel, according to He, who is also a deputy to the NPC.
“The defense budget increase is appropriate against the backdrop of profound changes in the country’s overall strength, its security environment, and the global strategic situation,” He said.
China’s defense budget takes up a fairly small share of its GDP and national fiscal expenditure compared with other major countries, said He, noting that its military spending per capita and per soldier was also very low.
While the national defense spending in a number of major developed countries accounts for more than 2 percent of their GDP, the ratio was only about 1.3 percent for China in 2018.
The United States has increased its national defense expenditure for the fiscal year 2019 to 716 billion dollars, about four times the budget of China, the world’s second largest economy.
China’s military spending per capita is only about one-nineteenth of that of the United States.
“When it comes to whether a country poses a threat to other countries, the key is not that country’s national strength and armed forces, but the policies it adopts,” said Chen Zhou, research fellow with the Academy of Military Sciences.
“China has always been following the path of peaceful development and firmly adheres to a defense policy that is defensive in nature,” Chen said, noting that China’s development would not pose a threat to any other country.
He Lei highlighted China’s role in providing public security goods for the international community, saying the Chinese military had actively participated in UN peacekeeping missions, maintained security of marine passages, and engaged in international rescue and security cooperation.
“The growth in China’s defense spending is the growth of forces for world peace,” he noted.
Chinese President Xi Jinping, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, attends a panel discussion with his fellow deputies from Inner Mongolia Autonomous Region at the second session of the 13th National People’s Congress in Beijing, capital of China, March 5, 2019. (Xinhua/Xie Huanchi)
BEIJING, March 5 (Xinhua) — President Xi Jinping on Tuesday stressed efforts to maintain strategic resolve in enhancing the building of an ecological civilization and to protect the country’s beautiful scenery in the northern border areas.
Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks when attending a panel discussion with his fellow deputies from Inner Mongolia Autonomous Region at the second session of the 13th National People’s Congress, China’s national legislature.
The president called for intensified protection of the ecological system, urging people to fight resolutely against pollution.
The Party’s theory on an ecological civilization has been constantly enriched and improved since the 18th CPC National Congress in late 2012, Xi said.
All localities and departments should earnestly implement the Party’s arrangement and requirements for building an ecological civilization, pushing it to a new level, Xi said.
Building Inner Mongolia into an important shield for ecological security in northern China is a strategic position set with full consideration of the country’s overall development and a major responsibility the region must shoulder, Xi said.
Fundamentally speaking, environmental protection and economic development are closely integrated and complement each other, Xi said.
In the Chinese economy’s transition from the phase of rapid growth to a stage of high-quality development, pollution control and environmental governance are two major tasks that must be accomplished, he added.
The country should explore a new path of high-quality development that prioritizes ecology and highlights green development, Xi said.
With its diversified natural forms including forests, grasslands, wetlands, rivers, lakes and deserts, Inner Mongolia features a comprehensive ecological system formed over a long period of time. Integrated measures should be taken in ecological protection and rehabilitation in the region, he said.
Xi underlined a resolute and effective fight to prevent and control pollution, saying prominent environmental issues the people are strongly concerned about must be addressed properly.
BEIJING, March 5 (Xinhua) — China announced Tuesday that the country’s new solid rocket booster, with 200-tonne thrust engine, completed hot firing tests, proving its readiness for commercial launches.
With a diameter of 2.65 meters, the booster engine is expected to be used on the modified version of the Long March-11 rocket. The rocket is the only series in the Long March family that uses solid propellants, and it can be launched within 24 hours.
Developed by the Academy of Aerospace Solid Propulsion Technology under the China Aerospace Science and Technology Corporation, it will be China’s most powerful rocket booster engine, delivering a maximum thrust of 200 tonnes and the ability to carry as much as 71 tonnes of fuel.
It will have a carrying capacity of 1.5 tonnes for sun-synchronous orbit.
In 2009, the academy took the lead in China in developing a rocket booster engine for the Long March-11. The previous-generation, covered with a steel shell, was 2 meters in diameter, capable of 120 tonnes of thrust and could carry 35 tonnes of fuel.
To increase its carrying capacity and market competitiveness, the new booster is made using filament winding composite material, which is better and can be applied more widely than a metal shell, said Wang Jianru, chief designer of the booster.
The successful tests mark a milestone in developing a more efficient booster engine with cost advantage for China’s new-generation rocket, according to the design team.
China’s first seaborne rocket launch is scheduled for mid-2019, with a Long March-11 carrier rocket set to blast off in the Yellow Sea.
BEIJING, March 5 (Xinhua) — Despite increasing downward pressure on its economy, China is assuring the world of its firm resolution in the pursuit of green development with concrete and self-motivated efforts.
For China, green development is a critical element of modernizing its economy. The country sticks to a new development vision that features innovative, coordinated, green and open development for the benefit of all.
It is not at the request of others, but on the country’s own initiative.
With a large population, China is facing increasing resource constraints, severe environmental pollution and a deteriorating ecosystem. People are becoming increasingly aware of environmental problems.
The country’s leadership has made it clear that China must win the battle to ensure blue skies and clean water and soil.
The battle will not be won easily.
Facing a complicated and challenging domestic and international environment of a kind rarely seen in many years, China has two options: lowering standards of environmental protection in launching new projects to stimulate growth; finding fundamental solutions to address pollution and build an ecological civilization that will benefit generations to come.
China’s choice and actions reassure those who may doubt its seriousness about green development.
When China says it “puts ecological protection first,” it is not just lip service.
This year, China will cut the energy consumption per unit of GDP by around 3 percent. Sulfur dioxide and nitrogen oxide emissions will be cut by 3 percent, and there will be a continuous decline in PM2.5 density in key areas.
The central government will allocate 25 billion yuan (3.73 billion U.S. dollars) to prevent and control air pollution, an increase of 25 percent year on year, an evidence of the advantage of China’s governance system which can “concentrate resources to accomplish major undertakings.”
China will also strengthen green and environmental protection industries, and press ahead to conserve and restore the ecosystems of mountains, rivers, lakes, forests, farmland, and grassland.
Simple, moderate, green, and low-carbon ways of life are increasingly popular in China. It has become common sense among the public that “lucid waters and lush mountains are invaluable assets themselves.”
As a matter of fact, the country’s yearning for green growth, instead of dragging down the economy, will be a boon to the economy, for China and the rest of the world.
Chinese and foreign investors are embracing a new wave of opportunities in the market for environment-related products and services, such as thermal power and steel industry upgrading, the development of sewer networks and treatment facilities and the construction of eco-friendly buildings.
China is one of the first countries to sign the Paris Agreement on climate change. China has pledged to halt the rise in carbon dioxide emissions by around 2030.
Among the essence of traditional Chinese thinking is the concept that man and nature form a community of life. Only by observing the laws of nature can mankind avoid costly blunders in its exploitation.
China has embarked on this bumpy but promising road. Marching toward an era of green development, there will be no turning back.
Issue a key demand made by US President Donald Trump as part of the ongoing US-China trade war
China expected to pass new foreign investment law next week during National People’s Congress
26 Feb 2019
Foreign direct investment in China amounted to US$135 billion in 2018, an increase of 3 per cent from a year earlier, according to Chinese government data. Photo: EPA
Beijing will make it illegal to force foreign investors to transfer their technology to Chinese partners while also lowering market barriers for foreign firms to enter the domestic market, a senior economic planning official said on Wednesday, highlighting an effort to lure overseas investment inflows.
China is expected to pass a new law next week intended to protect the interests of foreign investors, both as a response to demands from the United States that have formed part of the ongoing trade war negotiations, and to help shore up economic growth, which slowed last year to its lowest rate in 28 years.
Foreign investors will be allowed to set up ventures in which they have full ownership, instead of being forced into joint ventures with local partners, in more industries, said Ning Jizhe, a vice-chairman of the National Development and Reform Commission, in Beijing on Wednesday during the National People’s Congress.
In addition, China will set up a special task force to facilitate “key” projects like electric-car maker Tesla’s new factory in Shanghai or BASF’s new chemical complex in Guangdong, both of which are solely owned by the foreign company.
China’s leadership has listed foreign investment as one of the six areas that it must “stabilise” in 2019, along with employment, growth, trade, domestic investment and market expectations.
Foreign direct investment in China amounted to US$135 billion in 2018, an increase of 3 per cent from a year earlier, according to Chinese government data.
But foreign investment into the world’s second biggest economy have slowed over last decade, which could deprive China of access to advanced technologies and marginalise the country in the development of future global supply chains.
Beijing is trying to lure more foreign capital and technology to support its plan to upgrade its manufacturing industries and boost the development of new, hi-tech sectors.
“China will roll out more opening-up measures in the agriculture, mining, manufacturing and service sectors, allowing wholly foreign-owned enterprises in more fields,” Ning said.
China law to protect intellectual property, ban forced tech transfer
Since December, China has been rushing to draft legislation for a new foreign investment law, a key clause of which prohibits local government’s from forcing transfer of technology in return for being allowed to conduct business in their jurisdictions.
The National People’s Congress is expected to endorse the new
“After passing the law, the government will take serious measures to obey and implement it,” Ning added.
He said that China will remove market entry restrictions for foreign investors to ensure that domestic and foreign firms “are treated as equals.”
Ning Jizhe, a vice-chairman of the National Development and Reform Commission. Photo: EPA
However, the jury is still out whether Beijing’s promises of fair treatment, market access and protection for intellectual property rights will be enough to generate a steady inflow of hi-tech investment.
The US has long complained that China has been unwilling to implement previous commitments under the World Trade Organisation to open up its market – allegation Beijing denies.
Shen Jianguang, chief economist at JD Digits, an arm of Chinese e-commerce firm JD.com, said restrictions on foreign investment will exist in China despite the government’s promises.
China’s domestic market remains large and attractive for some foreign investors, he said.
“Foreign investors are still very interested in the Chinese market, if the openness of the economy is sufficient,” Shen added.
The African Union headquarters in Addis Ababa is a shiny spaceship-like structure that glistens in the afternoon sun.
With its accompanying skyscraper, it stands out in the Ethiopian capital.
Greetings in Mandarin welcome visitors as they enter the lifts, and the plastic palm trees bear the logos of the China Development Bank.
African Union HQ, Addis Ababa
Everywhere, there are small indications that the building was made possible through Chinese financial aid.
In 2006, Beijing pledged $200m to build the headquarters. Completed in 2012, everything was custom-built by the Chinese – including a state-of-the-art computer system.
For several years, the building stood as a proud testament to ever-closer ties between China and Africa. Trade has rocketed over the past two decades, growing by about 20% a year, according to international consultancy McKinsey. China is Africa’s largest economic partner.
But in January 2018, French newspaper Le Monde Afrique dropped a bombshell.
It reported that the AU’s computer system had been compromised.
The newspaper, citing multiple sources, said that for five years, between the hours of midnight and 0200, data from the AU’s servers was transferred more than 8,000km away – to servers in Shanghai.
This had allegedly continued for 1,825 days in a row.
Le Monde Afrique reported that it had come to light in 2017, when a conscientious scientist working for the AU recorded an unusually high amount of computer activity on its servers during hours when the offices would have been deserted.
It was also reported that microphones and listening devices had been discovered in the walls and desks of the building, following a sweep for bugs.
The reaction was swift.
Both AU and Chinese officials publicly condemned the report as false and sensationalist – an attempt by the Western media to damage relations between a more assertive China and an increasingly independent Africa.
But Le Monde Afrique said that AU officials had privately expressed concerns about just how dependent they were on Chinese aid – and what the consequences of that could be.
In the midst of all of this, one fact remained largely unreported.
The main supplier of information and communication technology systems to the AU headquarters was China’s best-known telecoms equipment company – Huawei.
The company says it had “nothing” to do with any alleged breach.
Huawei “served as the key ICT provider inside the AU’s headquarters”, said Danielle Cave of the Australian Strategic Policy Institute, in a review of the alleged incident.
Huawei headquarters in Shenzhen, China
“This doesn’t mean the company was complicit in any theft of data. But… it’s hard to see how – given Huawei’s role in providing equipment and key ICT services to the AU building and specifically to the AU’s data centre – the company could have remained completely unaware of the apparent theft of large amounts of data, every day, for five years.”
There is no evidence to indicate that Huawei’s telecoms network equipment was ever used by the Chinese government – or anyone else – to gain access to the data of their customers.
Indeed, no-one has ever gone on record to confirm that the AU system was compromised in the first place.
But these reports played into years of suspicions about Huawei – that a large Chinese company might find itself unduly influenced by the Chinese government.
Ren and the rise of Huawei
“When I first started out 30 years ago… we didn’t really have any telephones. The only phones we had were those hand-cranked phones that you see in old World War II films. We were pretty undeveloped then.”
Huawei’s founder and chairman Ren Zhengfei is reminiscing to the BBC about the origins of the world’s second-biggest smartphone firm, while sitting in the Huawei headquarters in Shenzhen – a symbol of the success that he’s worked his whole lifetime for.
A long marbled staircase, covered in plush red carpet, greets you as you first walk in.
At the top of the stairs, a giant painting depicts a traditional Chinese New Year scene.
Inside Huawei’s Shenzhen HQ
A few kilometres away in Dongguan, Huawei’s latest campus is even more eye-catching.
The site – designed to accommodate the company’s 25,000 R&D staff – comprises 12 “villages”, each of which recreates the architecture of a different European city, among them Paris, Bologna and Granada.
It’s as if Silicon Valley had been re-imagined by Walt Disney. Long corridors of Roman pillars and picturesque French cafes adorn the campus, with a train connecting the different areas, running through manicured gardens and past an artificial lake.
It’s a world away from the environment that Mr Ren found himself in when he first started the company in 1987. “I founded Huawei when China began to implement its reform and opening up policy,” he says. “At that time, China was shifting from a planned economy to a market economy. Not only people like myself, but even the most senior government officials, did not have the vaguest idea of what a market economy was. It seemed it was hard to survive.”
Ren was born in 1944 in Southern China – a tumultuous, chaotic place, one of the poorest regions in an already destitute country.
For a long time, hardship was all he ever knew.
He was from a family of seven children. “They were very poor,” says David De Cremer, who has co-written a book on Ren and Huawei.
“I think hardship is something that you can see throughout his life, and which he keeps emphasising himself.”
To escape that life of poverty and drudgery, Ren did what many young Chinese men of that era did. He joined the army.
Soldiers from the People’s Liberation Army, 1972
“I was a very low-ranking officer in the People’s Liberation Army,” he says. “I served in an ordinary construction project, not a field unit. At the time, I was a technician of a company in the military, and then I became an engineer.”
He left the military in 1983 when China began to downsize its forces, and went into the electronics business.
By his own admission, he wasn’t a great businessman at first.
“I was someone who had been in the military all my life at the time, used to doing what I was told,” he says. “Suddenly, I began to work in a market economy. I was at a total loss. So I too suffered losses, I too was deceived, and I was cheated.”
But he was quick to learn, and was a keen student of Western business practices and European history.
“I did research on what exactly a market economy was all about,” he says. “I read books on laws, including those about European and US laws. At that time, there were very few books on Chinese laws, and I had to read those on European and US laws.”
Five years later, he founded Huawei – the name can be translated as “splendid achievement” or “China is able” – to sell simple telecoms equipment to the rural Chinese market. Within a few years, Huawei was developing and producing the equipment itself.
Sometime in the early 90s, Huawei won a government contract to provide telecoms equipment for the People’s Liberation Army.
By 1995, the company was generating sales of around US$220,000, mainly from selling to the rural market.
The following year Huawei was given the status of a Chinese “national champion”. In practice, this meant the government closed the market to foreign competition.
At a time when China’s economy was growing by an average of 10% per year, this was no small advantage. But it was only when Huawei started to expand overseas in 2000, that it really saw its sales soar.
In 2002, Huawei made US$552m from its international market sales. By 2005 its international market contracts exceeded its domestic business for the first time.
Ren’s early days in business instilled in him a desire to protect his company from the whims and fancies of the stock market. Huawei is privately held and employee-owned. This gave Ren the power to plough more money back into research and development. Each year, Huawei spends US$20bn on R&D – one of the biggest such budgets in the world.
“Publicly listed companies have to pay a lot of attention to their balance sheets,” he says. “They can’t invest too much, otherwise profits will drop and so will their share prices. At Huawei, we fight for our ideals. We know that if we fertilise our ‘soil’ it will become more bountiful. That’s how we’ve managed to pull ahead and succeed.”
One story from the early days of the company tells how Ren was cooking for his staff (he loves to cook, or so the story goes). Suddenly he rushed out of the kitchen and announced to the room: “Huawei will be a top three player in the global communications market 20 years from now!”
And that’s exactly what happened. In fact, those ambitions were surpassed.
Today, Huawei is the world’s biggest seller of network telecommunications equipment.
From aspiring to be a company like Apple, it now sells more smartphones than Apple.
But shadows have continued to loom over Huawei’s international success.
Ren and Huawei’s links to the Chinese Communist Party have raised suspicions that the company owes its meteoric rise to its powerful political connections in China. The US has accused Huawei of being a tool of the Chinese government.
It’s an accusation which Ren denies. “Please don’t think that Huawei has become what it is today because we have special connections,” he says. “Even 100% state-owned companies have failed. Do good connections mean you will succeed then? Huawei’s success is still very much due to our hard work.”
The case against
It was 1 December 2018. US President Donald Trump and China’s President Xi Jinping were dining on grilled sirloin followed by caramel rolled pancakes at the G20 summit in Buenos Aires.
They had a lot to discuss. The US and China were in the middle of a trade war – imposing tariffs on each other’s goods – and growth forecasts for both countries had recently been cut as a result. This was adding to the fear of a slowing global economy.
In the event, the two leaders agreed a truce in the trade war, with Donald Trump tweeting that “Relations with China have taken a BIG leap forward!”
Xi Jinping and Donald Trump at dinner, December 2018
But thousands of kilometres north in Canada, an arrest was taking place that would throw doubt on this rapprochement.
Meng Wanzhou, Huawei’s chief financial officer and Ren Zhengfei’s eldest daughter, had been detained by Canadian officials while transferring between flights at Vancouver airport.
The arrest had come at the request of the US, who accused her of breaking sanctions against Iran.
“When she was detained, as her father, my heart broke,” says Ren, visibly emotional. “How could I watch my child suffer like this? But what happened, has happened. We can only depend on the law to solve this problem.”
Meng Wanzhou being driven to court in Canada
Huawei’s problems were just beginning. Nearly two months later, the US Department of Justice filed two indictments against Huawei and Ms Meng.
Under the first indictment, Huawei and Ms Meng were charged with misleading banks and the US government about their business in Iran.
The second indictment – against Huawei – involved criminal charges including obstruction of justice and the attempted theft of trade secrets.
Both Huawei and Ms Meng deny the charges.
January 2019: Acting US attorney general Matthew Whittaker announces charges against Huawei and Meng Wanzhou
The charge of stealing trade secrets centres on a robotic tool – developed by T-Mobile – known as Tappy.
According to legal documents, Huawei had tried to buy Tappy, a device which mimicked human fingers by tapping mobile phone screens rapidly to test responsiveness.
T-Mobile was in partnership with Huawei at the time, but it rebuffed the Chinese firm’s offers, fearing it would use the technology to make phones for T-Mobile’s competitors.
It’s alleged that one of Huawei’s US employees then smuggled Tappy’s robotic arm into his satchel so that he could send its details to colleagues in China.
After the alleged theft was discovered, the Huawei employee claimed that the arm had mistakenly fallen into his bag.
Huawei claimed that the employee had been acting alone, and the case was settled out of court in 2014. But the latest case is built on email trails between managers in China and the company’s US employees, linking Huawei management to the alleged theft.
The indictment also details evidence of a bonus scheme from 2013, offering Huawei employees financial rewards for stealing confidential information from competitors.
Huawei has denied any such scheme exists.
Meng Wanzhou, photographed in 2014
This is not the first time that Huawei has been accused of stealing trade secrets. Over the years companies like Cisco, Nortel and Motorola have all pointed the finger at the Chinese firm.
But US fears about Huawei are about much more than industrial espionage. For more than a decade, the US government has seen the company as little more than an arm of the Chinese Communist Party.
These concerns have been brought to the fore with the advent of “fifth generation” or 5G mobile internet, which promises download speeds 10 or 20 times faster than at present, and much greater connectivity between devices.
As the world’s biggest telecoms infrastructure provider, Huawei is one of the companies best placed to build new 5G networks. But the US has warned its intelligence partners that awarding contracts to Huawei would be tantamount to allowing the Chinese spy on them.
US Secretary of State Mike Pompeo recently cautioned against Huawei, saying, “If a country adopts this and puts it in some of their critical information systems, we won’t be able to share information with them.”
US Secretary of State Mike Pompeo
The UK, Germany and Canada are reviewing whether Huawei’s products pose a security threat.
Australia went a step further last year, and banned equipment suppliers “likely to be subject to extrajudicial directions from a foreign government”.
Huawei was not mentioned by name, but Danielle Cave of the Australian Strategic Policy Institute says the company posed a national security risk because of its government links.
She cites an article in Chinese law that makes it impossible for any company to refuse to help the Chinese Communist Party in intelligence gathering.
“Admittedly, what is missing from this debate is the smoking gun,” she says.
“For the average person who has a Huawei smartphone it’s not a big deal. But if you’re a Western government that has key national security to protect – why would you allow this access to a company that is in the political system that China is in?”
For his part, Ren says that Huawei’s resources have never and would never be used to spy for the Chinese government.
“The Chinese government has clearly said that it won’t ask companies to install backdoors,” he says. A “backdoor” is a term used to describe a secret entry point in software or a computer system that gives access to the person or entity who installed it to the inner workings of the system.
“Huawei will not do it either,” he continues. “Our sales revenues are now hundreds of billions of dollars. We are not going to risk the disgust of our country and our customers all over the world because of something like that. We will lose all our business. I’m not going to take that risk.”
Xi’s China
Zhou Daiqi is Huawei’s chief ethics and compliance officer.
He’s been with the company for nearly 25 years, in a number of different positions – chief engineer, director of the hardware department, head of the research centre in Xi’an, according to his biography on the company’s website. He is also understood to combine his high-ranking executive duties with another role – party secretary of Huawei’s Communist Party committee.
All companies in China are required by law to have a Communist Party committee.
Zhou Daiqi’s profile on Huawei’s website
The official line is that they exist to ensure that employees uphold the country’s moral and social values. Representatives of the committee are also often tasked with helping workers with financial problems.
But critics of China’s one-party system argue that they allow the state to exert control on corporate China. And they say the level of this control has increased in recent years.
“[President] Xi Jinping is exerting greater control over the business community in China,” says Elliott Zaagman, who regularly advises Chinese companies on their PR strategy. “As these companies gain power and influence overseas, the party doesn’t want to lose control over them.”
Ren, however, argues that the role of Huawei’s Communist Party committee is far less important than many in the West believe.
“[It] serves only to educate its employees,” he says. “It is not involved in any business decisions.”
In China, most chief executives are Communist Party members.
Every year, they dutifully turn up to the National People’s Congress along with local and national party chiefs, officials and chief executives.
It’s where the big economic decisions are voted on – although no proposal is put forward which hasn’t already been agreed upon.
Still, big CEOs come to show their commitment to the party, and to contribute to working papers that are meant to help the government understand the concerns of the business community.
Being a member of the party is very much a networking opportunity – in the way one would join a business association.
Elliott Zaagman argues that this is a system that demands loyalty.
“There is no separation from the party and the state,” he says.
“The system in China encourages the lack of transparency in companies like Huawei.”
The worry is that these close links mean that if the Communist Party asked a company to do something, they would have no choice but to comply.
And if that company is one that is involved in sensitive global telecoms infrastructure projects, it’s easy to see why Western observers would be worried.
There is no evidence to indicate that Huawei is in any way under the orders of the Chinese government, or that Beijing has any plans to dictate business plans and strategy at Huawei – particularly when it comes to spying.
But the way in which the Chinese Communist Party has robustly defended Huawei has raised questions about how independent the company is of its influence.
For example, Beijing stated that Ms Meng’s detention was a rights abuse .
And while her extradition case to the US was moving forward, China detained two Canadian citizens and accused them of stealing state secrets. Critics say the detentions are linked to Ms Meng’s arrest.
December 2018: Chinese police patrol outside Canada’s embassy in Beijing
While not commenting on the arrest of the Canadians, Ren says China’s defence of Huawei is understandable.
“It is the Chinese government’s duty to protect its people,” he says. “If the US attempts to gain competitive edge by undermining China’s most outstanding hi-tech talent, then it is understandable if the Chinese government, in turn, protects its hi-tech companies.”
Over the past few years, there have been signs of a bigger push by the government to get private companies, and in particular tech firms, to cooperate with party rules – even when they are firmly resistant.
A Didi Chuxing logo adorns a building in Hangzhou, China
China’s ride-hailing giant Didi Chuxing’s troubles are an example of the struggles Chinese firms face when they try to uphold their independence in the face of government pressure.
Chinese attitudes to data collection and data privacy are different to those in the West – many people don’t care if businesses have access to their data, arguing that it adds to the convenience of life and work.
Government access to data in China is not the free-for-all that many outside of China assume it to be
Samm Sacks, CSIS
So it wasn’t unusual when, after the murders of two of its passengers by Didi drivers, regulators used the scandal to force Didi to share more corporate data with the government. But Didi resisted – citing customer privacy. Under Chinese law, it had no choice but to comply.
When it did, it handed over “three boxes of data printed on paper, including 95 hard copies for authorities to review”.
According to Samm Sacks of the Center for Strategic and International Studies (CSIS), the case demonstrates that “government access to data in China is not the free-for-all that many outside China assume it to be”.
She says this indicates that there appears to be “a kind of tug of war between the government and companies over data”.
How this plays out will determine how Chinese companies are viewed by foreign governments when they do business overseas.
Companies like Huawei have grown up in a system where to survive and thrive they needed strong links to the Chinese government – there was and is no other choice. But these links could harm their reputation abroad.
“It’s two different systems,” says Zaagman. “Think of it like an electrical outlet. China’s plug doesn’t fit in to the outlets we have in the West.”
What’s at stake
“Basically you want to connect to everything that can be connected.”
Zhu Peiying, head of Huawei’s 5G wireless labs, is showing off devices that can connect to the new technology. From a smart toothbrush that collects data about how well you brush your teeth, to a smart cup that reminds you when you should drink some water, this is a world where everything you can think of is being measured and analysed.
At its most sophisticated, everything in entire cities would be connected – driverless cars, the temperature of buildings, the speed of public transport – the list is endless.
Huawei is thought to be a year ahead of its competitors in terms of its technological expertise and what it can offer customers, according to industry sources.
It’s also thought that the company can offer prices that are about 10% cheaper than its competitors, although critics claim this is because of state support.
Ren dismisses this, saying that Huawei doesn’t receive government subsidies.
He says the real reason behind the US resistance to Huawei is its superior technology.
“There’s no way the US can crush us,” he says. “The world needs Huawei because we are more advanced. Even if they persuade more countries not to use us temporarily we could just scale things down a bit.”
Many analysts say that Huawei’s exclusion from US networks could actually cause the US to fall behind in its 5G capabilities.
“It would mean we wouldn’t be able to participate in any blended network [using Huawei] in Europe or Asia,” says Samm Sacks of CSIS. “That would put us at a significant disadvantage.”
What this would mean in reality is a world of two internets – or what analysts are calling a “digital iron curtain” – dividing the world into parts that do business with Chinese companies like Huawei, and those that don’t.
Because of US pressure on its allies, Huawei has been on an aggressive public relations campaign to win over customers and government stakeholders.
In recent days, Vodafone’s boss Nick Read called on the US to share any evidence it has about Huawei, while Andrus Ansip, the European Commission’s vice president for the digital single market, said in a tweet that he had met with Huawei’s rotating CEO to discuss the importance of being open and transparent, as they explored ways of working together.
But suspicions about Huawei remain.
One security firm reports a sharp rise in inquiries by Asian government clients about Huawei.
“Some have asked us how much they should worry about whether Huawei is really a liability,” says an analyst who consults to Asian governments, on condition of anonymity.
Ren is sanguine about such concerns.
“For countries who believe in them [suspicions about Huawei] we will hold off,” he says. “For countries who feel Huawei is trustworthy, we may move a little faster. The world is so big. We can’t walk across every corner of it.”
But this is about more than just one company or one CEO and his family.
Increasingly, this is perceived as a battle between two world orders, and which one is the future.
In the early days of China opening up, US presidents like George HW Bush espoused the merits of engagement.
“No nation on Earth has discovered a way to import the world’s goods and services while stopping foreign ideas at the border,” he said in a 1991 speech. “Just as the democratic idea has transformed nations on every continent, so, too, change will inevitably come to China.”
1989: George HW Bush in Beijing – he encouraged economic engagement with China
Previous US administrations believed that economic engagement in China would lead to China following a freer, more “liberal” path.
There’s no denying China has made remarkable strides in the past 40 years. The economy grew by an annual average of 10% for three decades, helping to lift 800 million people out of poverty. It is now the second-largest economy in the world, only surpassed by the US.
Some estimates put China’s economy ahead of America’s by 2030.
It achieved this while maintaining one-party rule and the supremacy of the Communist Party.
But its success has raised concerns that it is only possible with a huge amount of government control over the country’s companies. The fear is that control could be used to achieve the Communist Party’s goals – which are at this point unclear.
“It’s a double-edged sword for China,” says Danielle Cave. “[Because of its laws] the Chinese Communist Party has made it virtually impossible for Chinese companies to expand without attracting understandable and legitimate suspicion.”
Added to this, China has become more authoritarian under Xi Jinping’s rule.
President Xi Jinping
“Xi is systematically undermining virtually every feature that made China so distinct and helped it work so well in the past,” writes Jonathan Tepperman, editor in chief of Foreign Policy.
“His efforts may boost his own power and prestige in the short term and reduce some forms of corruption. On balance, however, Xi’s campaign will have disastrous long-term consequences for his country and the world.”
But Ren dismisses this, insisting that China is more open than ever before.
“If this meeting took place 30 years ago,” he says of our interview, “it would have been very dangerous for me. Today, I can be straightforward when answering difficult questions. This shows that China has a more open political environment.”
Still, Ren is hopeful of the direction China will take in the future.
“China has more or less tried to close itself off from the outside world for 5,000 years,” he says. “Yet we had found ourselves poor, lagging behind other nations. It was only in the past 30 years since Deng Xiaoping opened China’s doors to the world that China has become more prosperous. Therefore, China must continue to move forward on the path of reform and opening-up.”
In one of Huawei’s vast campus sites across Shenzen, lies a man-made lake. Swimming in these serene waters are two black swans.
There is a story that Ren put the birds here to remind employees of “black swan” events – unpredictable and catastrophic financial eventualities that are impossible to prepare for. He dismisses this as an urban myth, but it’s hard not to read something into it.
For Huawei, and Ren, these are highly uncertain times with no way of telling what lies ahead.
BEIJING (Reuters) – China’s exports likely contracted in February after a surprise bounce in January, while imports fell for a third straight month, a Reuters poll showed, heightening anxiety over whether Washington and Beijing can resolve deep differences over trade.
China’s exports in February are expected to have fallen 4.8 percent from a year earlier, according to the median estimate of 32 economists in a Reuters poll, following a 9.1 percent rise in January.
Such a drop would be the biggest since December 2016, and suggest a further weakening in global demand.
Imports in February are expected to have fallen 1.4 percent from a year earlier, compared with the previous month’s 1.5 percent decline.Stronger-than-expected imports could prompt some China watchers to say the economy is showing signs of bottoming out in response to a string of stimulus measures in 2018.
But most analysts typically caution that China’s data early in the year can be highly distorted by the timing of the Lunar New Year holidays, when some business rush out shipments or scale back output before shutting for a extended break. As such, analysts’ estimates for February varied widely.
TRADE DEAL NOT A SILVER BULLET
In recent weeks, the United States and China appear to have moved closer to a trade deal that would roll back tit-for-tat tariffs on each others’ goods, with Beijing making pledges on structural economic changes, a source briefed on negotiations said on Sunday.
But President Donald Trump will reject any pact that is not perfect, Secretary of State Mike Pompeo said this week.
Even if concrete steps such as dismantling tariffs are agreed, it would not be a panacea for all of China’s economic woes. Its exporters would have to piece supply chains back together, win back market share and contend with slowing demand globally.
Factory surveys have suggested exports and imports will remain weak in coming months, with February’s official gauge showing export orders fell to their weakest level since the global financial crisis.
China’s overall trade surplus is seen to have shrunk sharply to $26.38 billion in February from $39.16 billion the previous month, according to the Reuters poll.
In response to growing domestic and global pressure, China’s government this week unveiled a 2019 economic growth target of 6.0-6.5 percent, down from an actual 6.6 percent in 2018, the slowest pace in nearly 30 years.
China to slash taxes, boost lending to prop up slowing economy
Premier Li Keqiang told parliament on Tuesday that China will shore up the economy through billions of dollars in additional tax cuts and infrastructure spending, and will lower real interest rates.
“A set of pro-growth measures are planned despite positive progress in U.S.-China trade talks, which makes us think that either China doesn’t have full confidence in a trade truce or that the damages from the trade conflict cannot easily be undone,” said Iris Pang, Greater China economist at ING.
Image copyrightAFPImage captionMr Modi is accused of exploiting India-Pakistan hostilities for political gain
A gaffe is when a politician tells the truth, American political journalist Michael Kinsley said.
Last week, a prominent leader of India’s ruling Hindu nationalist Bharatiya Janata Party (BJP) appeared to have done exactly that. BS Yeddyurappa said the armed aerial hostilities between India and Pakistan would help his party win some two dozen seats in the upcoming general election.
The remark by Mr Yeddyurappa, former chief minister of Karnataka, was remarkable in its candour. Not surprisingly, it was immediately seized upon by opposition parties. They said it was a brazen admission of the fact that Prime Minister Narendra Modi’s party was mining the tensions between the nuclear-armed rivals ahead of general elections, which are barely a month away. Mr Modi’s party is looking at a second term in power.
Mr Yeddyurappa’s plain-spokenness appeared to have embarrassed even the BJP. Federal minister VK Singh issued a statement, saying the government’s decision to carry out air strikes in Pakistan last week was to “safeguard our nation and ensure safety of our citizens, not to win a few seats”. No political party can afford to concede that it was exploiting a near war for electoral gains.
Image copyrightAFPImage captionThe BJP has put up election posters of Mr Modi posing with guns
Even as tensions between India and Pakistan ratcheted up last week, Mr Modi went on with business as usual. Hours after the Indian attack in Pakistan’s Balakot region, he told a packed election meeting that the country was in safe hands and would “no longer be helpless in the face of terror”. Next morning, Pakistan retaliated and captured an Indian pilot who ejected from a downed fighter jet. Two days later, Pakistan returned the pilot to India.
Mr Modi then told a gathering of scientists that India’s aerial strikes were merely a “pilot project” and hinted there was more to come. Elsewhere, his party chief Amit Shah said India had killed more than 250 militants in the Balakot attack even as senior defence officials said they didn’t know how many had died. Gaudy BJP posters showing Mr Modi holding guns and flanked by soldiers, fighter jets and orange explosions have been put up in parts of the country. “Really uncomfortable with pictures of soldiers on election posters and podiums. This should be banned. Surely the uniform is sullied by vote gathering in its name,” tweeted Barkha Dutt, an Indian television journalist and author.
Mr Modi has appealed to the opposition to refrain from politicising the hostilities. The opposition parties are peeved because they believe Mr Modi has not kept his word. Last week, they issued a statement saying “national security must transcend narrow political considerations”.
‘Petty political gain’
But can the recent conflict fetch more votes for Mr Modi? In other words, can national security become a campaign plank?
Many believe Mr Modi is likely to make national security the pivot of his campaign. Before last month’s suicide attack – claimed by Pakistan-based militants – killed more than 40 Indian paramilitaries in Kashmir, Mr Modi was looking a little vulnerable. His party had lost three state elections on the trot to the Congress party. Looming farm and jobs crises were threatening to hurt the BJP’s prospects.
Now, many believe, Mr Modi’s chances look brighter as he positions himself as a “muscular” protector of the country’s borders. “This is one of the worst attempts to use war to win [an] election, and to use national security as petty political gain. But I don’t know whether it will succeed or not,” says Yogendra Yadav, a politician and psephologist.
Image copyrightEPAImage captionMany Indians have celebrated India’s strike in Pakistani territory
Evidence is mixed on whether national security helps ruling parties win elections in India. Ashutosh Varshney, a professor of political science at Brown University in the US, says previous national security disruptions in India were “distant from the national elections”.
The wars in 1962 (against China) and 1971 (against Pakistan) broke out after general elections. Elections were still two years away when India and Pakistan fought a war in 1965. The 2001 attack on the Indian parliament that brought the two countries to the brink of war happened two years after a general election. The Mumbai attacks in 2008 took place five months before the elections in 2009 – and the then ruling Congress party won without making national security a campaign plank.
For one, he says, it comes just weeks ahead of a general election in a highly polarised country. The vast expansion of the urban middle class means that national security has a larger constituency. And most importantly, according to Dr Varshney, “the nature of the regime in Delhi” is an important variable. “Hindu nationalists have always been tougher on national security than the Congress. And with rare exceptions, national security does not dominate the horizons of regional parties, governed as they are by caste and regional identities.”
Bhanu Joshi, a political scientist also at Brown University, believes Mr Modi’s adoption of a muscular and robust foreign policy and his frequent international trips to meet foreign leaders may have touched a chord with a section of voters. “During my work in northern India, people would continuously invoke the improvement in India’s stature in the international arena. These perceptions get reinforced with an event like [the] Balakot strikes and form impressions which I think voters, particularly on a bipolar contest of India and Pakistan, care about,” says Mr Joshi.
Others like Milan Vaishnav, senior fellow and director of the South Asia Program at the Carnegie Endowment for International Peace, echo a similar sentiment. He told me that although foreign policy has never been a “mass” issue in India’s domestic politics, “given the proximity of the conflict to the elections, the salience of Pakistan, and the ability of the Modi government to claim credit for striking back hard, I expect it will become an important part of the campaign”.
But Dr Vaishnav believes it will not displace the economy and farm distress as an issue, especially in village communities. “Where it will help the BJP most is among swing voters, especially in urban constituencies. If there were fence-sitters unsure of how to vote in 2019, this emotive issue might compel them to stick with the incumbent.”
How the opposition counters Mr Modi’s agenda-setting on national security will be interesting to watch. Even if the hostilities end up giving a slight bump to BJP prospects in the crucial bellwether states in the north, it could help take the party over the winning line. But then even a week is a long time in politics.
CHINDIA ALERT: You'll be living in their world, very soon 