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.
Photos showing Indian soldiers purportedly brought down by PLA soldiers at a fist and stick fight circulated among Chinese military websites
WeChat and YouTube become new fighting arenas for soldiers but their governments are playing down Himalayan clashes
A photo showing PLA troops after purportedly bringing down several Indian soldiers at a close-quarters fight at Pangong Lake border area with India, was circulated among Chinese military websites on Sunday. Photo: Handout
People’s Liberation Army soldiers and their Indian counterparts have moved
over border disputes in the Himalayas to social media platforms as both their governments try to play down the fights.
A post with photos showing several Indian soldiers purportedly brought down by PLA soldiers in a fist and stick fight at the Pangong Lake border area with India was circulated among Chinese military websites on Sunday.
On the Chinese social media site WeChat, a Chinese soldier posted photos showing a number of Indian soldiers lying on the ground with a group of PLA soldiers standing nearby with sticks in their hands. The photos were accompanied by a Chinese caption saying the Chinese side “had just one injury but dozens of Indian soldiers were wounded”.
A screen grab of YouTube video in which Indian troops claimed to have captured a Chinese officer, who appeared hurt after a brawl at Pangong Lake in the Himalayas. Photo: Handout
The report was published one day after the Indian side posted a video on YouTube showing that Indian troops had captured a Chinese officer, who appeared badly roughed up during the brawl at Pangong Lake, about 4,350 metres (14,300 feet) above sea level in the Himalayas.
The YouTube video posted by someone on the Indian side did not state the time or date of the incident. Photo: Handout
The crudely made video, which did not include the date of the incident, also showed a damaged PLA military vehicle amid cheering Indian troops.
Two independent sources close to the PLA said “the wounded Chinese officer was an interpreter who was taken in by the Indian troops but was later released with minor injuries after the Chinese side called for reinforcements”.
The sources said soldiers from both sides had turned to social media to give a positive spin to their “acts of bravery” while their commanders wanted to play down the disputes. One source pointed out that the pictures of injured Indian soldiers were posted by a Chinese soldier on his personal social media account and not on official channels.
“Beijing didn’t want its people to think that Chinese soldiers lost in the fight but at the same time it is mindful of not escalating the matter,” said the source, who requested anonymity because of sensitivity of the situation.
India denies that Trump spoke to Modi about border tensions with China
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Beijing-based military expert Zhou Chenming said the Chinese border troops had been told to be “restrained”.
“In border disputes, China always wants to keep the status quo, especially now when both sides should do all they can to avoid fighting,” Zhou said. “China is busy dealing with the Covid-19 pandemic and other issues like Taiwan and Hong Kong, and India also faces a serious Covid-19 situation.”
Rajeev Ranjan Chaturvedy, an international relations expert based in New Delhi, agreed with Zhou’s analysis, saying both China and India understood the seriousness and sensitivity of their border disputes.
“Civilian and military officials of both countries are already in discussion under existing mechanisms,” he said. “The stakes are too high for both countries and the probability of a war [between India and China] is low, in my view.
“Though, the situation is very serious and India is closely monitoring Chinese activities.”
Military and diplomacy analysts believe border skirmishes between China and India will not escalate to war because of a range of factors, including the coronavirus pandemic. Photo: AP
Overseas media reported that both Chinese and Indian militaries had increased deployment to the border, with the PLA moving 5,000 personnel to the area.
Speaking last Wednesday, Chinese foreign ministry spokesman Zhao Lijian did not deny the troop deployment reports but said the overall situation in the China-India border area remained “stable and under control, and the two countries were capable of resolving border issues through dialogue and negotiations”.
Border conflicts between China and India have escalated since 2017, with Indian troops and the PLA staging the most serious confrontation in Doklam near a tri-junction border area – known as Donglang or Donglang Caochang, in Chinese – a territory which is claimed by both China and Bhutan, an ally of India.
Embassy in France removes ‘false image’ on Twitter in latest online controversy amid accusations of spreading disinformation
After months of aggressive anti-US posts by Chinese diplomats Beijing is cracking down on ‘smear campaigns’ at home
Beijing’s ‘Wolf Warrior’ diplomacy has coincided with a rise of nationalist content on Chinese social media. Photo: Reuters
Beijing is battling allegations that it is running a disinformation campaign on social media, as robust posts by its diplomats in Western countries promoting nationalist sentiment have escalated into a spat between China and other countries, especially the United States.
In the latest in a series of online controversies, the Chinese embassy in France claimed its official Twitter account had been hacked after it featured a cartoon depicting the US as Death, knocking on a door marked Hong Kong after leaving a trail of blood outside doors marked Iraq, Libya, Syria, Ukraine and Venezuela. The inclusion in the image of a Star of David on the scythe also prompted accusations of anti-Semitism.
Top China diplomats call for ‘Wolf Warrior’ army in foreign relations
25 May 2020
“Someone posted a false image on our official Twitter account by posting a cartoon entitled ‘Who is Next?’. The embassy would like to condemn it and always abides by the principles of truthfulness, objectivity and rationality of information,” it said on Monday.
The rise of China’s aggressive “Wolf Warrior” diplomacy has been regarded by analysts as primarily aimed at building support for the government at home but the latest incident is seen as an attempt by Beijing to take back control of the nationalist narrative it has unleashed.
Florian Schneider, director of the Leiden Asia Centre in the Netherlands, said the removal of the embassy’s tweet reflected a constant concern in Beijing about the range of people – including ordinary citizens – who were involved in spreading nationalistic material online.
“The state insists that its nationalism is ‘rational’, meaning it is meant to inspire domestic unity through patriotism but without impacting national interests or endangering social stability,” he said.
“This makes nationalism a mixed blessing for the authorities … if nationalist stories demonise the US or Japan or some other potential enemy, then any Chinese leader dealing diplomatically with those perceived enemies ends up looking weak.
“Trying to guide nationalist sentiment in ways that further the leadership’s interests is a difficult balancing act and I suspect this is partly the reason why the authorities are currently trying to clamp down on unauthorised, nationalist conspiracy theories.”
Too soon: Chinese advisers tell ‘Wolf Warrior’ diplomats to tone it down
The report came after months of social media posts – including by Chinese diplomats – defending China against accusations it had mishandled the coronavirus pandemic and attacking the US and other perceived enemies.
In March, Chinese foreign ministry spokesman Zhao Lijian promoted a conspiracy theory on Twitter suggesting the virus had originated in the US and was brought to China by the US Army. His comments were later downplayed, with China’s ambassador to the US Cui Tiankai saying questions about the origin of the virus should be answered by scientists.
Schneider said this showed that the state-backed nationalistic propaganda online was at risk of backfiring diplomatically.
“The authorities have to constantly worry that they might lose control of the nationalist narrative they unleashed, especially considering how many people produce content on the internet, how fast ideas spread, and how strongly commercial rationales drive misinformation online,” he said.
Last month, a series of widely shared social media articles about people in different countries “yearning to be part of China” resulted in a diplomatic backlash against Beijing. Kazakhstan’s foreign ministry summoned the Chinese ambassador in April to lodge a formal protest against the article.
Following the incident, the Cyberspace Administration of China, the country’s internet regulator which manages the “firewall” and censors material online, announced a two-month long “internet cleansing” to clear privately owned accounts which engage in “smear campaigns”.
The article had at least 100,000 readers, with 753 people donating money to support the account. According to Xigua Data, a firm that monitors traffic on Chinese social media, the account garnered more than 1.7 million page views for 17 articles in April.
According to a statement from WeChat, the account was closed for fabricating facts, stoking xenophobia and misleading the public.
A journalism professor at the University of Hong Kong said this case differed from the Chinese embassy’s tweet, despite both featuring anti-US sentiment.
Masato Kajimoto, who leads research on news literacy and the misinformation ecosystem, said the closure of the WeChat account seemed to be more about Chinese authorities feeling the need to regulate producers of media content whose motivations were often financial rather than political.
“I would think the government doesn’t like some random misinformation going wild and popular, which affects the overall storylines they would like to push, disseminate and control,” he said.
One way for China to respond to the situation was to fact-check social media and to position itself as a protector facts and defender of the integrity of public information, he said.
“In the age of social media, both fake news and fact-checking are being weaponised by people who try to influence or manipulate the narrative in one way or another,” Kajimoto said.
“Not only China but also many other authoritarian states in Asia are now fact-checking social media. Governments in Singapore, Thailand, Indonesia and other countries all do that.
“Such initiatives benefit them because they can decide what is true and what is not.”
BEIJING, May 29 (Xinhua) — President Xi Jinping on Friday encouraged scientific and technological workers across China to make new and greater contributions to building China into a global power in science and technology.
Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, made the remarks in replying to a letter by 25 representatives of sci-tech workers. He also called for efforts to achieve breakthroughs in key and core technologies.
Xi extended greetings to sci-tech workers across the country ahead of China’s fourth national sci-tech workers’ day, which falls on May 30.
A vast number of sci-tech workers have dedicated themselves to serving the country through their innovative thinking and practices, Xi noted.
He pointed out that innovation is the primary driving force for development, and science and technologies are powerful tools to overcome difficulties.
Facing the sudden COVID-19 outbreak, sci-tech workers have risen up to challenges and worked day and night on the clinical treatment, vaccine research and development, material support as well as big data application, providing sci-tech support against the epidemic, Xi said.
Xi hoped that sci-tech workers across the country strive to resolve problems with key and core technologies, promote the in-depth integration of application, education and scientific research, reach the peak of science and technology and make new and greater contributions to building China into a global power in science and technology.
In November 2016, the State Council, China’s cabinet, set down May 30 as the national sci-tech workers’ day.
Recently, 25 representatives of sci-tech workers, including agronomist Yuan Longping, respiratory specialist Zhong Nanshan and space expert Ye Peijian, wrote to Xi to express their determination to make contributions in the new era of innovation and entrepreneurship.
Image copyright GETTY IMAGESImage caption Around 300,000 in Hong Kong hold a British National (Overseas) passport
The UK has said it is considering more rights for holders of a special passport issued to some people in Hong Kong.
The territory, which used to be a British colony, was handed back to China in 1997. Anyone born before then is eligible to apply for a British National (Overseas) passport, known as a BNO.
If China implements a controversial proposed security law, people holding the BNO, could get a “path to citizenship”, the UK said.
What is the BNO and who has one?
The BNO passport is essentially a travel document that does not carry citizenship rights with it – although you are entitled to some consular assistance outside of Hong Kong and China with it.
It was issued to people in Hong Kong by the UK before Hong Kong was handed over to China.
Around 300,000 people currently hold a BNO passport, allowing them to visit the UK visa-free for six months. An estimated 2.9 million people are eligible for a BNO passport, said the British Consulate General in Hong Kong.
Though it gives the passport holder the right to remain in the UK for up to six months, it doesn’t automatically allow them to reside or work there. They also aren’t allowed to access public funds, including things like government benefits.
BNO holders cannot pass this status on to their children.
What is the UK proposing – and why?
China on Thursday formally approved a plan to impose controversial national security legislation in Hong Kong. It could go into effect as early as the end of June.
Hong Kong was handed back to China, on a number of conditions. These include the region’s high level of autonomy and maintaining certain rights like freedom of speech that do not exist in mainland China.
But this new plan, if put into law, would make it a crime to undermine Beijing’s authority in Hong Kong, and many are concerned it could end Hong Kong’s unique status.
The move triggered a wave of criticism around the world, with many – including Chris Patten, the last governor of Hong Kong – urging the UK to stand up for the territory.
Image caption Under current rules, BNO holders are allowed to stay for six months
Later on Thursday, UK Foreign Secretary Dominic Raab said the country would move to scrap the six-month stay limit for BNO holders if China goes on to officially implement the law.
Mr Raab said that BNO passport holders would be allowed to “apply to work and study for extendable periods of 12 months and that will itself provide a pathway to future citizenship”.
What difference could it make?
As a way to help people in Hong Kong who would rather not stay there if the new security laws are implemented, it might prove more symbolic.
For starters only a small percentage of people in Hong Kong currently have a BNO.
But also, the people who the security laws are aimed at – the young anti-mainland protesters who have been getting into violent confrontations with police for months – are not likely to be eligible for the BNO because of their age.
Additionally, though the BNO gives the passport holder the right to visit the UK for up to a year potentially, it’s not clear what other benefits the extension might bring, or if the UK would make it any easier administratively for those already in the country to apply for work or study.
On social media, some Hong Kongers dismissed it as a gesture that amounted to little more than a 12-month tourist visa.
Effectively, it means that those who come to stay in the UK for a year, and who have the funds to be able to extend this enough, could eventually be eligible to apply for citizenship.
It cuts out some of the administrative hoops BNO holders would have had to jump through before this move if they wanted this path.
How has China reacted?
China has firmly opposed the move by the UK, saying it is a violation of the handover agreement that stipulates BNO passport holders do not enjoy UK residency.
China has repeatedly warned Britain to stay out of its affairs in Hong Kong.
The Chinese ambassador to the UK Liu Xiaoming had previously accused some British politicians of viewing Hong Kong “as part of the British empire”.
BEIJING, May 28 (Xinhua) — Chinese lawmakers Thursday voted to adopt the country’s long-expected Civil Code at the third session of the 13th National People’s Congress, the top legislature.
The Civil Code will take effect on Jan. 1, 2021.
In addition to general provisions and supplementary provisions, the Civil Code, the world’s latest modern-day civil law, has six parts on real rights, contracts, personality rights, marriage and family, succession, and tort liabilities.
The personal rights, property rights and other lawful rights and interests of the parties to civil legal relations shall be protected by law and shall not be infringed upon by any organization or individual, reads the Civil Code in its opening chapter.
Lawmakers say the codification is not about formulating a new civil law but rather systematically incorporating existing civil laws and regulations, modifying and improving them to adapt to new situations while maintaining their consistency.
A major innovation of China’s Civil Code, jurists say, is embodied in the personality rights part. While some countries have related law provisions, few have a specific law book in civil code dedicated to protecting personality rights.
The personality rights part covers stipulations on a civil subject’s rights to his or her life, body, health, name, portrait, reputation and privacy, among others.
The personality rights part shows that China has reached a new height in protecting the dignity of people, said Chen Jingying, a national lawmaker and vice president of East China University of Political Science and Law.
The Civil Code is a milestone in developing the socialist legal system with Chinese characteristics, and will greatly boost the modernization of China’s system and capacity for governance, said Wang Yi, dean of the law school at Renmin University of China.
The tech investment push is part of a fiscal package waiting to be signed off by the National People’s Congress, which convenes this week
This initiative will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the ‘Made in China 2025’ programme
A conductor rehearses the military band on the sidelines of the National People’s Congress in Beijing’s Great Hall of the People in March of last year. China’s legislature is expected to sign off on a massive tech-led stimulus plan. Photo: AP
Beijing is accelerating its bid for global leadership in key technologies, planning to pump more than a trillion dollars into the economy through the roll-out of everything from next-generation wireless networks to artificial intelligence (AI).
In the master plan backed by President Xi Jinping himself, China will invest an estimated 10 trillion yuan (US$1.4 trillion) over six years to 2025, calling on urban governments and private hi-tech giants like Huawei Technologies to help lay 5G wireless networks, install cameras and sensors, and develop AI software that will underpin
and Huawei to SenseTime Group at the expense of US companies.
As tech nationalism mounts, the investment drive will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the “Made in China 2025”
programme. Such initiatives have already drawn fierce criticism from the Trump administration, resulting in moves to block the rise of Chinese tech companies such as Huawei.
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“Nothing like this has happened before, this is China’s gambit to win the global tech race,” said Digital China Holdings chief operating officer Maria Kwok, as she sat in a Hong Kong office surrounded by facial recognition cameras and sensors. “Starting this year, we are really beginning to see the money flow through.”
The tech investment push is part of a fiscal package waiting to be signed off by China’s legislature, the National People’s Congress, which convenes this week. The government is expected to announce infrastructure funding of as much as US$563 billion this year, against the backdrop of the country’s worst economic performance since the Mao era.
The nation’s biggest purveyors of cloud computing and data analysis Alibaba, the parent company of the South China Morning Post, and Tencent Holding will be linchpins of the upcoming endeavour. China has already entrusted Huawei, the world’s largest telecommunications equipment supplier, to help galvanise 5G. Tech leaders including Pony Ma Huateng and Jack Ma are espousing the programme.
Maria Kwok’s company is a government-backed information technology systems integration provider, among many that are jumping at the chance. In the southern city of Guangzhou, Digital China is bringing half a million units of project housing online, including a complex three quarters the size of Central Park in New York City. To find a home, a user just has to log on to an app, scan their face and verify their identity. Leases can be signed digitally via smartphone and the renting authority is automatically flagged if a tenant’s payment is late.
China is no stranger to far-reaching plans with massive price tags that appear to achieve little. There is no guarantee this programme will deliver the economic rejuvenation its proponents promise. Unlike previous efforts to resuscitate the economy with “dumb” bridges and highways, this newly laid digital infrastructure will help national champions develop cutting-edge technologies.
“China’s new stimulus plan will likely lead to a consolidation of industrial internet
providers, and could lead to the emergence of some larger companies able to compete with global leaders, such as GE and Siemens,” said Nannan Kou, head of research at BloombergNEF, in a report. “One bet is on industrial internet-of-things (IoT) platforms, as China aims to cultivate three world leading companies in this area by 2025.”
China is not alone in pumping money into the technology sector as a way to get out of the post-coronavirus economic slump. Earlier this month, South Korea said AI and wireless communications would be at the core of it its “New Deal” to create jobs and boost growth.
Nothing like this has happened before, this is China’s gambit to win the global tech raceMaria Kwok, COO at Digital China Holdings
The 10 trillion yuan that China is estimated to spend from now until 2025 encompasses areas typically considered leading edge, such as AI and IoT, as well as items such as ultra-high voltage lines and high-speed rail, according to the government-backed China Centre for Information Industry Development. More than 20 of mainland China’s 31 provinces and regions have announced projects totaling over 1 trillion yuan with active participation from private capital, a state-backed newspaper reported on Wednesday.
Separate estimates by Morgan Stanley put new infrastructure at around US$180 billion each year for the next 11 years – or US$1.98 trillion in total. Those calculations also include power and rail lines. That annual figure would be almost double the past three-year average, the investment bank said in a March report that listed key stock beneficiaries including companies such as China Tower Corp, Alibaba, GDS Holdings, Quanta Computer and Advantech Co.
Beijing’s half-formed vision is already stirring a plethora of stocks, a big reason why five of China’s 10 best-performing stocks this year are tech plays like networking gear maker Dawning Information Industry and Apple supplier GoerTek. The bare outlines of the master plan were enough to drive pundits toward everything from satellite operators to broadband providers.
China’s telecoms carriers push to complete ‘political task’ of 5G network roll-out amid coronavirus crisis
6 Mar 2020
It is unlikely that US companies will benefit much from the tech-led stimulus and in some cases they stand to lose existing business. Earlier this year, when the country’s largest telecoms carrier China Mobile awarded contracts worth 37 billion yuan for 5G base stations, the lion’s share went to Huawei and other Chinese companies. Sweden’s Ericsson got only a little over 10 per cent of the business in the first four months. In one of its projects, Digital China will help the northeastern city of Changchun swap out American cloud computing staples IBM, Oracle and EMC with home-grown technology.
It is in data centres that a considerable chunk of the new infrastructure development will take place. Over 20 provinces have launched policies to support enterprises using cloud computing services, according to a March research note from UBS Group.
Tony Yu, chief executive of Chinese server maker H3C, said that his company was seeing a significant increase in demand for data centre services from some of the country’s top internet companies. “Rapid growth in up-and-coming sectors will bring a new force to China’s economy after the pandemic passes,” he told Bloomberg News.
From there, more investment should flow. Bain Capital-backed data centre operator ChinData Group estimated that for every one dollar spent on data centres another US$5 to US$10 in investment in related sectors would take place, including in networking, power grid and advanced equipment manufacturing. “A whole host of supply chain companies will benefit,” the company said in a statement.
There is concern about whether this long-term strategy provides much in the way of stimulus now, and where the money will come from. “It’s impossible to prop up China’s economy with new infrastructure alone,” said Zhu Tian, professor of economics at China Europe International Business School in Shanghai. “If you are worried about the government’s added debt levels and their debt servicing abilities right now, of course you wouldn’t do it. But it’s a necessary thing to do at a time of crisis.”
Digital China is confident that follow-up projects from its housing initiative in Guangzhou could generate 30 million yuan in revenue for the company. It is also hoping to replicate those efforts with local governments in the northeastern province of Jilin, where it has 3.3 billion yuan worth of projects approved. These include building a so-called city brain that will for the first time connect databases including traffic, schools and civil matters such as marriage registry. “The concept of smart cities has been touted for years but now we are finally seeing the investment,” said Kwok.
US chip giant GlobalFoundries confirms it has ceased operations at its only Chinese facility, with industry experts saying the poorly-planned project was doomed to fail
Closure deals blow to China’s plans to move up semiconductor value chain, amid increasingly hostile tech rivalry with the United States
Beijing boasted that the final total investment in the GlobalFoundries plant could be US$10 billion. The plant was intended to produce 300mm wafers, a key material in making chips, but production never started at the 65,000 square metre facility, which was completed mid-2018. Photo: Weibo
US chip giant GlobalFoundries has halted operations at a joint venture factory in China, the company has confirmed, dealing a potential blow to China’s bid to own a bigger slice of the global semiconductor market.
The closure of the firm’s only China facility comes just three years after it announced plans to make chips in the mainland, and comes amid an escalating tech war with the United States.
The winding down, however, has little to do with the fierce superpower rivalry. It comes after two years of speculation as to what was actually happening at the US$100 million facility, which was hailed as “a miracle” by local media when announced to fanfare in 2017, but which never got off the ground.
Nonetheless, the symbolism is rich.
China is struggling in its efforts to boost its domestic chip research and production in a bid to counter US efforts to block it from American technology.
Last week, the US Department of Commerce upped the ante by banning the sale
of Huawei-designed chips produced outside America if they are made using the US software and technology, adding further pressure to the Chinese telecom giant’s global supply chain.
The GlobalFoundries factory, in a hi-tech park in the southwestern city of Chengdu, was one of China’s major foreign-invested semiconductor projects, for which the local government rolled out the red carpet three years ago.
At the time, Chengdu boasted that the final total investment in the plant could be US$10 billion. The plant was intended to produce 300mm wafers, a key material in making chips, but production never started at the 65,000 square metre facility, which was completed mid-2018.
A spokesperson for California-based GlobalFoundries confirmed that the Chengdu plant had stopped operations and that it had offered staff an “employee optimisation plan”, a commonly-used euphemism for lay-offs.
“The plan is being carried out on the basis of open and transparent communications with the employees and they have been offered various options to choose from based on their personal situations,” a company statement read.
A 2018 annual report from the joint venture, in which GlobalFoundries had a stake of 51 per cent with the rest controlled by an investment vehicle of the Chengdu government, showed that the plant had 320 employees.
A company notice sent to employees dated May 14 and seen by the Post said that after mid-June, the company would only pay 70 per cent of Chengdu’s minimum monthly wage, about 1,246 yuan (US$175.38), while negotiating severance packages with staff.
For some industry analysts who have followed the Chengdu project from its inception, its demise has less to do with the trade war, more to do with poor planning.
There was little detailed research and planning before the project was launched. As far as the Chengdu government is concerned, it lacks a sufficient understanding of GlobalFoundriesGu Wenjun, analyst
“There was little detailed research and planning before the project was launched. As far as the Chengdu government is concerned, it lacks a sufficient understanding of GlobalFoundries, its decision-making mechanism and economic strengths, and it did not get strong support from the central government,” said Gu Wenjun, chief analyst at Shanghai-based semiconductor research firm ICwise.
The idea of establishing a joint venture was first pitched to Chongqing municipality, a neighbouring city of Chengdu, in 2016. Chongqing signed a memorandum of understanding with GlobalFoundries to set up a plant to manufacture 300mm silicon wafers – components for making integrated circuits – using technology from GlobalFoundries’ Singapore factory.
After the deal to open a Chongqing plant fell through for unclear reasons, Chengdu moved in to cut a deal with GlobalFoundries in late-2016. A 2017 blueprint stated that 3,500 employees could be working at the site, according to Wallace Pai, then GlobalFoundries’ general manager for China.
But production never started. Initially the project was supposed to have two phases: using mainstream technologies to manufacture 300mm wafers from 2018, then transferring to more advanced technologies in late-2019.
However, in October 2018, the two partners decided to “bypass” the phase one manufacturing stage, partly because of China’s increasing demand for more advanced products and GlobalFoundries’ own financial stress. The project has since stalled.
Comparing official announcements from the Chengdu government and GlobalFroundries back in 2017, Gu from ICwise said the two had different focuses, which might explain the plant’s derailment. The government clearly wanted to bring in mainstream, lower-risk technologies to boost the city’s brand, while the company aimed for Chinese capital and government support to invest in more advanced technology, Gu said.
The joint venture will continue after the factory’s demise, with GlobalFoundries still expecting to expand sales in the Chinese market, the company said in its statement. It now has five factories, three in the US and one each in Singapore and Germany.
When The Post contacted the office of the joint venture partner within the Chengdu government, the person answering the phone said they did not know anything about the closure nor future plans, before hanging up without giving their name.
“Our focus in China is on developing and growing our partner ecosystem including creating local technology infrastructure and bringing more intellectual property vendors and electronic design automation partners to better serve the local market,” the company said.
According to the China Semiconductor Industry Association, China’s integrated circuits sales rose 15.8 per cent in 2019 from a year earlier to 756.2 billion yuan (US$106.44 billion), while sales in the global semiconductor market dropped by 12 per cent to US$412 billion.
Last week, Dutch company ASML Holding, a key supplier of chip-making equipment, set up a plant in Wuxi, in Jiangsu province, in a boost to China’s efforts to attract foreign semiconductor investment.
— As the continued global spread of COVID-19 is weighing on the world economy, China’s foreign trade is under considerable downward pressure.
— Many export-oriented companies in China are turning to the domestic market for a lifeline while grappling with dropping overseas orders as major markets remain in the grip of the pandemic.
by Xinhua writers Zhang Yizhi, Li Huiying, Hu Guanghe, Xu Ruiqing
FUZHOU, May 9 (Xinhua) — Walking back and forth between shelves of neatly stacked shoes, some 20 live streamers dashed at the instructions of their followers on the phone, grabbing a shoe now and then from the shelves for a close-up in front of the camera.
At around eight o’clock every night, the supply chain platform 0594 in the city of Putian, east China’s Fujian Province, springs to life as live streamers flock to the exhibition area to sell shoes produced by the local manufacturers, many of which are troubled by the cancellations or delays of overseas orders amid the global coronavirus pandemic.
“To get rid of the excess inventory, many manufacturers in Putian are turning to live streaming to explore the domestic market,” said Chen Xing, general manager of 0594. “We are now cooperating with over 40 manufacturers and there will be more of them joining us in the future.”
The platform is also building an internet celebrity incubator and has so far organized seven rounds of influencer training courses enrolling more than 200 attendees.
Huang Huafang, 39, signed up for the two-day crash course in late March and soon after started her first live streaming session. She works from around 2 p.m. to 10 p.m., attracting over 500 followers and selling more than 20 pairs of shoes every day.
Though she is not a well-known live streamer, she is optimistic about the future. “There is a long way to go, but I believe live streaming is a trend. It is an essential skill for anyone who wants to market online,” said Huang.
A staff sells shoes through live streaming at an e-commerce warehouse in Putian, southeast China’s Fujian Province, May 7, 2020. (Xinhua/Lin Shanchuan)
According to Chen, the platform 0594 sold almost 130,000 pairs of shoes in April alone. As the domestic economic outlook continues to pick up, the sales target of May has been set at 200,000 pairs.
Like manufacturers in Putian, a city with a large number of export-oriented enterprises, many Chinese factories are turning to the domestic market for a lifeline, while grappling with dropping overseas orders as major markets remain in the grip of the pandemic.
ADAPT OR DIE
With decades of experience in manufacturing and developing products for overseas clients, some export-oriented companies in China are rolling out products catering to the domestic market.
After months of gloomy business, Wu Songlin, general manager of Putian-based Hsieh Shun Footwear Co., Ltd., heaved a sigh of relief as trucks loaded with therapeutic shoes tailored to the home market left his factory.
It was the first shipment for the domestic market since Wu and his partners started the company in 2010. In the past, his company only had two clients, one from Europe and the other from Japan. Business used to run smoothly and life was good.
But his factory was on the brink of a shutdown in March when the coronavirus pandemic started to ravage the global economy. No new orders came in and shipments of existing orders were requested to be delayed until June.
People work in a footwear workshop in Putian, southeast China’s Fujian Province, April 27, 2020. (Xinhua/Lin Shanchuan)
“Orders were canceled after completion of production, and our capital flow is stuck in our inventory. The pressure is mounting to keep the factory running,” Wu said. “By the end of June, workers would be left with no work to do as soon as we complete the existing orders.”
After losing almost all their orders from overseas clients, the desperate shoemaker turned to the domestic market. He called one of his old business partners and secured an order for massage footwear, which is selling like hot cakes in the domestic market as health tops the agenda in the time of the novel coronavirus.
The factory produced 10,000 pairs of massage shoes in April, and the number is expected to reach 30,000 in May, enough to keep the production lines running.
Thanks to the company’s quick adaptation, about 200 workers kept their jobs in the factory, while 20 percent were furloughed and the remaining workers were arranged to work in other companies as part of the city’s employee sharing program.
“If domestic orders keep coming in, our operation will hopefully get back to normal by September when the monthly output of massage shoes will reach 90,000,” Wu said. “By then the company will live and thrive without any orders from overseas customers.”
A woman works in a workshop of Hsieh Shun Footwear Co., Ltd. in Putian, southeast China’s Fujian Province, May 7, 2020. (Xinhua/Lin Shanchuan)
But switching to another market is not easy, explained Wu. In the past, export-oriented factories were only in charge of manufacturing, while brands would take care of sales, promotion as well as customer support.
“If you are selling to the domestic market, you need to have your own brand and marketing capacity,” he said. “Working with e-commerce platforms could be one way out, but it’s more important to understand domestic consumers and meet their needs.”
CUSTOMIZE THE FUTURE
For years, many export-focused manufactures have been trying to climb up the value chain and tap the uncharted waters of the domestic market. As the pandemic continues to spread, there is a strong push for them to embrace customized manufacturing.
In an experience store located in downtown Putian, customers line up waiting to have their feet measured on a smart device. After a few seconds, they get their readings on the phone, and a few swipes and clicks later, they place their orders with unique features, colors, and shapes.
Adjacent to the experience store, there is a flexible manufacturing workshop, which gives quick responses to orders and produces shoes following the customized demands of individual buyers.
SEMS, a longstanding sports footwear manufacturer that has established a partnership with several international brands, started to adopt flexible manufacturing years ago in an effort to adapt to the evolving domestic market.
A customer has her feet measured on a smart device in sports footwear manufacturer SEMS in Putian, southeast China’s Fujian Province, May 8, 2020. (Xinhua/Lin Shanchuan)
Customization gives consumers the benefit of products that fit their needs, and at the same time allows factories to utilize improved workflows and technology to maintain high output and omit the process of inventory and distribution, said Zhu Yizhen, the executive vice president of the company.
“Currently we only sell over 100 pairs of customized shoes a day, but we are at the dawn of a new era,” Zhu said. “We hope more companies awaken to the developing trend and join in the practice of mass customization.”
Customer to manufacturer, or C2M, which allows consumers to place orders directly to factories for customized products, has become a buzzword among export-oriented manufacturers hoping to reach domestic consumers amid the pandemic.
Li Junjie, who runs a ceramic flowerpot plant in Fujian’s Dehua County, one of the manufacturing centers of ceramics in China, did not sell a single pot to his overseas customers since the coronavirus outbreak in late January.
The factory used to export 30 percent of its flowerpots to the United States and Spain, but Li managed to make up for the lost deals by selling on domestic e-commerce platforms. Instead of bulk orders placed by foreign clients, domestic consumers tend to purchase customized products in small amounts.
Photo shows the automatic production line of a customized workshop in sports footwear manufacturer SEMS in Putian, southeast China’s Fujian Province, May 8, 2020. (Xinhua/Lin Shanchuan)
With the big data provided by e-commerce platforms, Li can tell which items will be a hit so as to increase their production and develop new products based on a thorough analysis of different consumer groups.
“Our online sales almost doubled over the past year, and we have sold over 100,000 customized pots this year, thanks to the C2M business model,” Li said.
Li’s company is one of many Chinese small and medium-sized enterprises (SMEs) that have benefited from the e-commerce giant Alibaba’s Spring Thunder Initiative, which is aimed at helping export-focused SMEs expand into new markets.
The initiative will also help some SMEs to transform and develop their business in the Chinese market through measures such as resource support, fee reductions, and fast-track processing.
As China prepares its 14th five-year plan, researchers at one state-affiliated think tank predicted a more hostile global situation
Beijing urged to strengthen home-grown innovation and use vast domestic market to power economy post-coronavirus
A think tank linked to China’s State Council has encouraged Beijing to focus on home-grown technology and its vast consumer market over the next five years. Photo: Xinhua
China’s will face an increasingly hostile world over the next five years, meaning its policy plan should be focused on its vast domestic market, home-grown technological innovation and improving its citizen’s welfare, according to recommendations in a new paper.
The report by the Chinese Academy of Social Sciences (CASS), a think tank affiliated with the State Council, foresees the next five years presenting “major changes unseen in a century” for China, as “the strategic game between superpowers has intensified, while international systems and orders are reshuffled”.
While the report does not mention the coronavirus specifically, its recommendations suggest that China should become more self-reliant in response to the pandemic. This view represents one side of a lively debate among policymakers and scholars in China, ahead of the next five-year plan, which will come into place next year.
Between 2021 and 2025, the globalised economy which helped China grow into an economic power will be radically different, the report said, meaning it must adapt if it is to continue to thrive.
“The disadvantages of economic globalisation have increasingly stood out. Populism has risen as the global economy weakens, while countries are divided as imbalances expand. The old multilateral [trading] system is under pressure,” read the paper, part of a wave of preliminary studies offering advice ahead of China’s 14th five-year plan, a blueprint for economic and social development.
China is the only major economy that publishes a five-year policy plan and has been doing so since 1953, in a tradition borrowed from the Soviet Union. China’s own plans are broad strategic guidelines, rather than Moscow’s previously detailed command economy production worksheets.
China is currently in the final year of its 13th five-year plan, the stage during which the Soviet Union collapsed. The 14th plan is expected to be published in early-2021, but brainstorming about challenges and policy options is well under way among academics and state planning officials.
That debate is expected to feature prominently in the coming meetings of the “Two Sessions,” the Chinese People’s Political Consultative Congress, which is due to meet in Beijing on May 21, and the National People’s Congress, which will begin to meet a day later.
A common point in the debate is that the lessons of the past few years have shown the need to be more self-reliant. Even before the coronavirus outbreak, the US-China trade war and the growing superpower rivalry have made many think that Beijing can no longer rely on the goodwill of trading partners to continue the expansion it has enjoyed since the late-1970s.
Coronavirus pandemic creates ‘new Cold War’ as US-China relations sink to lowest point in decades
In December 2017, US President Donald Trump declared China a “strategic competitor” in anticipation of the Chinese economy reaching two-thirds the size of America’s, which happened in 2018. Since then, the two have engaged in a tit-for-tat tariff battle, while the coronavirus has served to sharpen tensions and fuel arguments for further decoupling.
“Uncertainties and instabilities are clearly increasing,” read the analysis published in the academic journal Economic Perspectives this week.
Without citing coronavirus directly, the CASS researchers suggested that China should “stick to its developmental direction and concentrate on doing its own things well”.
China now has a middle income group of between 500 and 700 million people and that alone can be a source empowering China’s economic growth for the next five years, the report said.
However, China must also attempt to smooth out a major weakness, namely unbalanced growth, including the yawning wealth gap between urban and rural groups.
In terms of innovation, the researchers led by Huang Qunhui said China should rely less on foreign technologies. “China’s innovation capacity is still lagging behind developed countries. Breakthroughs in core technologies are in urgent need,” read the report.
The Made in China 2025 plan, published in 2015, stated Beijing’s ambitions to dominate future technologies such as robotics and artificial intelligence. However, after loud complaints from the US and European Union, China has been forced to play down such bold innovative goals.
BEIJING (Reuters) – Tang Yue, a 27-year-old teacher from the city of Guilin in southwest China, steam-presses a blue dress and takes dozens of photographs before picking one to clinch her 200th online sale.
For a growing number of Chinese like Tang, hit by job losses, furloughs and salary cuts, the consumer economy has begun to spin in reverse. They are no longer buying – they are selling.
Instead of emerging from the coronavirus epidemic and returning to the shopping habits that helped drive the world’s second-largest economy, many young people are offloading possessions and embracing a new-found ethic for hard times: less is more.
With Tang’s monthly salary of about 7,000 yuan ($988), the self-described shopaholic said she has bought everything from Chanel lipsticks to Apple’s (AAPL.O) latest iPad in the past three years.
But the adrenaline rush that comes with binge-shopping is gone, said Tang, whose wages have been slashed with the suspension of all the classes on tourism management she usually teaches.
“The coronavirus outbreak was a wake-up call,” she said. “When I saw the collapse of so many industries, I realised I had no financial buffer should something unfortunate happen to me.”
There is no guarantee that the nascent minimalist trend will continue once the coronavirus crisis is fully over, but if it does, it could seriously damage China’s consumer sector and hurt thousands of businesses from big retailers to street-corner restaurants, gyms and beauty salons.
To be sure, there are signs that pent-up demand will drive a rush of spending as authorities reopen malls, leisure venues and tourist spots. In South Korea, the first major economy outside of China to be hit by the virus, people thronged malls this weekend to go “revenge shopping” to make up for time lost in lockdown.,
There are some signs that a similar trend will take hold in China, where some upscale malls are starting to get busy, although luxury firm Kering SA (PRTP.PA) – which owns Gucci, Balenciaga and other fashion brands – has said it is hard to predict how or when sales in China might come back.
A recent McKinsey & Co survey showed that between 20% and 30% of respondents in China said they would continue to be cautious, either consuming slightly less or, in a few cases, a lot less.
“The lockdown provided consumers with a lot of time and reasons to reflect and consider what is important to them,” said Mark Tanner, managing director at Shanghai-based research and marketing consultancy China Skinny.
“With much more of their days spent in their homes, consumers also have more time and reasons to sort through things they don’t feel they need – so they’re not living around clutter that is common in many apartments.”
#DITCHYOURSTUFF
Tang made a spreadsheet to keep track of her nearly 200 cosmetic products and hundreds of pieces of clothing. She then marked a few essentials in red that she wanted to keep. In the past two months, she has sold items worth nearly 5,000 yuan on second-hand marketplaces online.
Bargain-hunting online has become a new habit for some Chinese as the stigma that once hung over second-hand goods has begun to fade.
Idle Fish, China’s biggest online site for used goods, hit a record daily transaction volume in March, its parent company Alibaba (BABA.N) told Reuters.
Government researchers predict that transactions for used goods in China may top 1 trillion yuan ($141 billion) this year.
Posts with the hashtag #ditchyourstuff have trended on Chinese social media in recent weeks, garnering more than 140 million views.
Jiang Zhuoyue, 31, who works as an accountant at a traditional Chinese medicine company in Beijing – one of the few industries that may benefit from the health crisis – has also decided to turn to a simpler life.
“I used to shop too much and could be easily lured by discounts,” said Jiang. “One time Sephora offered 20% off for all goods, I then bought a lot of cosmetics because I feel I’m losing money if I don’t.”
Jiang, the mother of a 9-month-old baby, said she recently sold nearly 50 pieces of used clothing as the lockdown gave her the opportunity to clear things out. “It also offered me a chance to rethink what’s essential to me, and the importance of doing financial planning,” she said.
Eleven Li, a 23-year-old flight attendant, said she used to spend her money on all manner of celebrity-endorsed facial masks, snacks, concert tickets and social media activity, but now has no way to fund her spending.
“I just found a new job late last year, then COVID-19 came along, and I haven’t been able to fly once since I joined, and I’ve gotten no salary at all,” said Li, who said she was trying to sell her Kindle.
Some are even selling their pets, as they consider leaving big cities like Beijing and Shanghai where the high cost of living is finally catching up with them.
NO RETURN TO OLD WAYS?
As the coronavirus comes under control in China, the government is gradually releasing cities from lockdown, easing transport restrictions and encouraging consumers to venture back into malls and restaurants by giving out billions-worth of cash vouchers, worth between 10 yuan and 100 yuan.
But many people say they are still worried about job security and potential wage cuts because of the struggling economy. Nationwide retail sales have plunged every month so far this year.
Xu Chi, a Shanghai-based senior strategic analyst with Zhongtai Securities, said some Chinese consumers may prove the ‘21 Day Habit Theory,’ a popular scientific proposition that it only takes that long to establish new habits.
“We believe people’s spending patterns follow the well-known theory, which means most people in China, having been cooped-up at home for more than a month and not having binge-shopped, may break the habit and not return to their old ways,” Xu said.
Jiang said she was determined not to return to her free-spending ways and planned to cook more at home.
“I’ll turn to cheaper goods for some luxury brands,” she said. “I’ll choose Huawei’s smartphone, because (Apple’s) iPhone has too much brand premium.”
Tang, who has recently used 100 yuan of shopping coupons to stock up on food, is going to hold the purse strings even tighter.
“I’ve set my monthly budget at 1,000 yuan,” she said. “Including one – and just one – bottle of bubble tea.”
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