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.
China’s three biggest airlines are demanding compensation from Boeing over its grounded 737 Max fleet.
Air China, China Southern and China Eastern have filed claims for payouts, according to state media reports.
China’s regulator was the first to ground the fleet in the wake of two deadly crashes involving the US-made aircraft.
It comes on the eve of a meeting of global aviation regulators that will provide an update on the troubled jets.
The Chinese airlines are seeking compensation for losses incurred by the grounded fleet, as well as delayed deliveries of the 737 Max jets, according to reports.
China operates the largest fleet of Boeing 737 Max aircraft and was the first country to take the jets out of service after the Ethiopian Airlines 737 Max 8 crash in March.
The disaster killed all 157 people on board. In October, 189 people were killed in a Lion Air crash involving the same model.
Both crashes were linked to the jet’s Manoeuvring Characteristics Augmentation System, a new feature on 737 Max planes, which was designed to improve the handling of the jet and to stop it pitching up at too high an angle.
The planemaker’s entire global fleet of 737 Max aircraft has been grounded since March and the firm is anxious to prove it is safe to return to the skies.
The move by China’s top airlines to seek compensation comes ahead of a closely watched summit of aviation regulators in Texas on Thursday.
The US Federal Aviation Administration (FAA) is due to provide an update on reviews of Boeing’s software fix and new pilot training.
The meeting in Texas will involve 57 agencies from 33 countries, including China, France, Germany and the UK, as well as the European Union Aviation Safety Agency.
But it is unclear if the planes will be back in the air before the end of the critical summer travel season.
It is an election like no other. Those eligible to vote in India’s upcoming polls represent more than 10% of the world’s population and they will take part in the largest democratic exercise in history.
Voters will choose representatives for the Indian parliament, and in turn decide if Hindu nationalist Prime Minister Narendra Modi will run the country for another five years.
What is at stake?
Whoever wins these elections and forms a government will control the destiny of the world’s largest democracy.
While they are in charge, India’s economy is likely to overtake the UK’s and become the world’s fifth-largest.
Its population meanwhile – at more than 1.34bn people – is predicted to soon surpass China’s 1.39bn.
Hundreds of millions of Indians have escaped poverty since the turn of the millennium but huge challenges remain.
Unemployment is a major concern and is especially high among young people.
Millions of farmers are angry about low crop prices.
How the nuclear-armed country engages with the outside world – and manages a tricky relationship with its neighbour Pakistan – is also of immense importance to international security.
Who is being elected?
Indians are voting for members of parliament and the job of prime minister tends to go to the leader of the party or coalition with most seats. The current PM is Narendra Modi.
His main rival is opposition leader Rahul Gandhi.
Parliament has two houses: the Lok Sabha and the Rajya Sabha.
The lower house – Lok Sabha – is the one to watch.
It has 543 elected seats and any party or coalition needs a minimum of 272 MPs to form a government.
At the last election in 2014, Mr Modi’s BJP won 282 seats.
Mr Gandhi’s Congress Party only took 44 seats in 2014 – down from 206 in 2009.
Why does voting take so long?
Because of the enormous number of election officials and security personnel involved, voting will take place in seven stages between 11 April and 19 May.
Different states will vote at different times.
Votes will be counted on 23 May and results are expected on the same day.
Who will win?
This election is being seen as a referendum on Mr Modi, a polarising figure adored by many but also accused of stoking divisions between India’s Hindu majority and the country’s 200 million Muslims.
Until a few months ago, Mr Modi and his BJP party were seen as the overwhelming favourites. But the loss of key states in December’s regional elections injected a sense of serious competition into the national vote.
Analysts are divided on whether Mr Modi will be able to win a simple majority again.
A recent escalation of tensions with Pakistan has given the BJP a new and popular issue to campaign on.
It will be hoping that a focus on patriotism will help the party to get past the serious challenge mounted by powerful regional parties and Congress.
In European countries outside the EU, investment also dropped in 2018.
What and where is China investing?
A large proportion of Chinese direct investment, both state and private, is concentrated in the major economies, such as the UK, France and Germany combined, according to the Rhodium Group and Mercator Institute.
Analysis by Bloomberg last year said that China now owned, or had a stake in, four airports, six maritime ports and 13 professional soccer teams in Europe.
It estimated there had been 45% more investment activity in 30 European countries from China than from the US, since 2008.
And it said this was underestimating the true extent of Chinese activity.
For example, China is financing the expansion of the port of Piraeus in Greece and is building roads and railways in Serbia, Montenegro, Bosnia-Herzegovina and North Macedonia.
This could prove attractive to poorer Balkan and southern European countries, especially as demands for transparency and good governance can make EU funding appear less attractive.
Globally, China’s outward direct investment has slowed over the last year or two, after more than a decade of expansion.
“This is mainly the result of stricter controls on capital outflows from China, but also of a changing political environment globally concerning Chinese investment,” says Agatha Kratz of the Rhodium Group.
China’s global investment slows
The Trump administration is taking a tougher line towards China’s economic activities.
Governments elsewhere are more cautious – particularly when it comes to investment in sensitive areas of the economy, such as telecommunications and defence.
But there’s little doubt China is now a significant player in Europe, whether through direct investments or via the new Silk Road project.
Beijing also rejected the report that the US, the UK and France asked China to lift the technical hold on Azhar by April 23, failing which they will move a formal resolution for discussion, vote and passage at the UN Security Council (UNSC).
WORLDUpdated: Apr 17, 2019 15:31 IST
Indo Asian News Service
Beijing
China on Wednesday said the issue of blacklisting Pakistan-based terrorist Masood Azhar at the UN panel was heading towards a settlement and asked the US not to force through its own resolution on the matter.(AP)
China on Wednesday said the issue of blacklisting Pakistan-based terrorist Masood Azhar at the UN panel was heading towards a settlement and asked the US not to force through its own resolution on the matter.
Beijing also rejected the report that the US, the UK and France asked China to lift the technical hold on Azhar by April 23, failing which they will move a formal resolution for discussion, vote and passage at the UN Security Council (UNSC).
“On the issue of the listing of Masood Azhar, China’s position remains unchanged. We are also having communication with relevant parties and the matter is moving towards the direction of settlement,” Chinese Foreign Ministry spokesperson Lu Kang said here.
Asked to elaborate further, Lu did not answer clearly.
“The matter is now moving in the direction of settlement. As to the specifics for the discussion in the 1267 committee, there are clear procedures and regulations regarding UNSC and its subsidiary bodies. We think members should follow and abide by such procedures.”
He was responding to a question whether anything was achieved after China claimed “positive progress” on the issue of declaring Azhar a terrorist.
China in the past has put four technical holds on the resolutions by India, the US, the UK and France to ban Azhar at the UN 1267 sanctions committee.
Beijing’s latest technical hold came last month after Azhar’s outfit claimed responsibility for the deadly attack in Jammu and Kashmir that killed 40 Indian military personnel in February.
This prompted the US to draft a new resolution and take it directly to the Security Council for an informal discussion. Beijing slammed the move, saying this will complicate matters when some progress has already been achieved.
Lu again reiterated it when asked if China will support such a resolution in the Security Council.
“Regarding what you said relevant parties are forcing a new resolution through the Security Council. We firmly oppose that. In relevant discussions, most members expressed that this issue should be discussed within the 1267 committee and they don’t hope to bypass the 1267 committee to handle the issue.
“We hope the relevant country can respect the opinions of most members of the Security Council to act in a cooperative manner and to help resolve this issue properly within the framework of the 1267 committee,” he added.
Asked if Beijing has been set a deadline of April 23 to lift the technical hold on resolution banning Azhar at the 1267 committee, Lu said: “I don’t know from where you get such information, but the Security Council and it’s subsidiary bodies like the 1267 committee, they have clear rules of procedures and you have to seek clarification from those sources.”
“China’s position is very clear. This issue should be resolved through cooperation and we don’t believe that any efforts without the consensus of most members will achieve satisfying results.”
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.
PM Modi said that he told him ‘let us fight against poverty and illiteracy’ and Khan gave his word saying he is a Pathan’s son, ‘but went back on it’.
SNS Web | New Delhi | February 25, 2019 10:53 am
Pakistan Prime Minister Imran Khan on Sunday asked his Indian counterpart Narendra Modi to “give peace a chance” and assured him that he “stands by” his words and will “immediately act” if New Delhi provides Islamabad with “actionable intelligence” on the Pulwama attack.
Khan’s remarks came a day after PM Modi in a rally in Rajasthan, recalled his conversation with the Pakistan PM during a congratulatory call after he became the country’s premier.
PM Modi had told him “let us fight against poverty and illiteracy” and Khan gave his word saying he is a Pathan’s son “but went back on it”.
“There is consensus in the entire world against terrorism. We are moving ahead with strength to punish the perpetrators of terrorism…The scores will be settled this time, settled for good…This is a changed India, this pain will not be tolerated…We know how to crush terrorism,” PM Modi further said.
A statement released by the Pakistan Prime Minister’s Office said, “PM Imran Khan stand by his words that if India gives us actionable intelligence, we will immediately act.”
PM Modi should “give peace a chance”, Khan said in the statement.
In his first statement issued since the February 14 attack, Pakistani Prime Minister Imran Khan had on Tuesday accused India of blaming his country “without evidence” and warned of retaliation against any military action by India.
However, he assured India that he would act against the perpetrators of the deadly Pulwama terror attack, carried out by Pakistan-based Jaish-e-Mohammad (JeM) terror group and said that the issue between the two countries can be solved through dialogue.
India had called Khan’s offer to investigate the attack if provided proof as a “lame excuse”.
The already sour relations between India and Pakistan have worsened over the past few weeks as New Delhi accused Islamabad of the Pulwama attack.
India has accused Islamabad’s spy agency ISI of being involved in the attack and has maintained that the terror group JeM is a “child of the Pakistan Army”.
Following the attack, India immediately withdrew the ‘Most Favoured Nation’ status granted to Pakistan and initiated steps to isolate the neighbouring country from the international community.
Earlier, India had also announced its decision to stop the flow of its share of water from the Beas, Ravi and Sutlej to Pakistan.
Prime Minister Narendra Modi had in many of his public speeches after the attack, said that the security forces have been given full freedom to decide the future course of action regarding the terrorist attack in Pulwama.
India’s neighbours, including Sri Lanka, Maldives, Nepal, Bangladesh, Afghanistan and Bhutan—and other countries like Saudi Arabia, UAE, Iran, Russia, Germany, Canada, UK, Australia and Canada came out in strong support of New Delhi following the terror attack.
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.
Pakistan Prime Minister Imran Khan on Tuesday said if there is any evidence of involvement of any Pakistani national in Pulwama terror attack, his government will act against the culprits. (AP)
Pakistan Prime Minister Imran Khan has denied his country’s role behind the Pulwama terror attack, the worst in Jammu and Kashmir in decades. He claimed that India does not have any evidence to prove Pakistan’s role in terror attacks in Kashmir.
“You (India) have blamed the Pakistan government without any evidence…If you have any evidence, we will act,” Imran Khan said.
He said, “It is in our interest that nobody from our soil spreads violence. I want to tell Indian government that we will take action if evidence is found against anyone from Pakistan.”
“What has Pakistan to gain from this? Why will Pakistan do this at a stage when it is moving towards stability,” said Imran Khan adding that “this is a Naya Pakistan with a new mindset.”
Calling for a dialogue with India, he said, “If you thinks you will attack us and we will not think of retaliating…We will retaliate. We all know starting a war is in the hands of humans, where it will lead us only God knows. This issue should be solved through dialogue.”
Imran Khan’s reaction comes days after at least 40 CRPF jawans were killed in a terror attack in Jammu and Kashmir. Pakistan-backed terror outfit Jaish-e-Mohammad claimed responsibility for the attack.
Earlier, Pakistan sought an urgent intervention of UN Secretary-General in defusing tensions with India and help facilitate dialogue between the two countries.
Following the terror attack, India launched a diplomatic offensive against Pakistan with the ministry of external affairs reaching out to more than two dozen countries including P5 – the US, the UK, France, Russia and China, which has repeatedly blocked India’s bid to get Jaish-e-Mohammad chief Masood Azhar declared as global terrorist by the United Nations.
China has used veto to shield Masood Azhar. Pakistan has also denied its support to the terror group. On Monday, in a joint statement Imran Khan and Saudi Arabia’s prince Mohammed bin Sultan “underlined the need for avoiding politicisation of UN listing regime.” This is being viewed as a snub to India’s renewed efforts to isolate Pakistan over its continued support to terror outfits and corner Masood Azhar’s JeM.
India withdrew the most favoured nation (MFN) status accorded to Pakistan in 1996. The MFN status had not been revoked even during the 1999 Kargil War and in the aftermath of 2008 Mumbai terror attack that killed more than 160 people.
SEOUL (Reuters) – Samsung Electronics is pouring resources into its telecom network equipment business, aiming to capitalize on the security fears hobbling China’s Huawei, according to company officials and other industry executives.
Those efforts include moving high-performing managers and numerous employees to the network division from its handset unit, two Samsung sources said.
Potential customers are taking notice of Samsung’s efforts to reinvent itself as a top-tier supplier for 5G wireless networks and bridge a big gap with market leader Huawei and industry heavyweights Ericsson and Nokia.
French carrier Orange’s chief technology officer, Mari-Noëlle Jégo-Laveissière, visited Japan last year and was impressed with the pace of 5G preparations using alternative equipment makers including Samsung, a company representative told Reuters.
Orange, which operates in 27 markets and counts Huawei as its top equipment supplier, will run its first French 5G tests with Samsung this year.
“Samsung is doing a big push in Europe at the moment,” one industry source said, declining to be identified.
Underscoring the growing importance of the business, South Korean Prime Minister Lee Nak-yeon visited Samsung’s network division in January. In a closed-door meeting during that visit, Samsung heir Jay Y. Lee asked for government help with recruiting high-level engineers.
Huawei is battling allegations by the United States and some other Western countries that its equipment could enable Chinese spying and should not be used in 5G networks, which will offer higher speeds and a host of new services.
Australia and New Zealand have joined the United States in effectively barring Huawei from 5G, and many other countries, especially in Europe, are considering a ban. Huawei denies that its gear presents any security risk.
Its woes have presented Samsung with a rare opportunity. Telecom firms would ordinarily stick with their 4G providers for 5G upgrades as they can use existing gear to minimize costs, but many firms may now be under political pressure to switch.
“We’re bolstering our network business to seize market opportunities arising at a time when Huawei is the subject of warnings about security,” said one of the Samsung sources.
The sources, who did not disclose specific figures for the employee moves, declined to be identified as they were not authorized to speak on the matter.
Keen to seek new growth, particularly as sales of its mainstay chips and smartphones have begun to drop, Samsung plans to invest $22 billion in 5G mobile technology and other fields over three years. It declined to break down how much will go to 5G and the other areas – artificial intelligence, biopharma and automotive electronic parts.
“Samsung is focused on building trust with our partners and leading the global 5G markets, regardless of other companies,” it said in an emailed statement to Reuters.
Asked about Samsung’s big push into network equipment, Huawei said in a statement that it welcomed competition in the market.
INDIA OPPORTUNITY
In India, Samsung is now in talks with Reliance Jio to upgrade its network to 5G, looking to build on what has perhaps been its biggest network success – becoming the key supplier for the upstart carrier.
“We don’t think 5G is far away in India,” a Samsung official with direct knowledge of the matter told Reuters. He declined to be named due to the sensitivity of the matter.
Samsung’s clients include U.S. firms AT&T Inc, Verizon Communications Inc and Sprint Corp and it has 5G network contracts with all three, though it was not clear how extensive those contracts are. It also sells to South Korean carriers and has partnered with Japanese mobile carriers to test its 5G equipment.
In many cases, Samsung supplies only small pieces of networks. According to market tracker Dell’Oro Group, the South Korean firm holds just 3 percent of the global telecom infrastructure market compared with 28 percent for Huawei.
Its network business made 870 billion won ($775 million) in operating profit last year, according to Eugene Investment & Securities. Filings show Nokia’s network business made about 1.2 billion euros ($1.4 billion) while Ericsson’s network operations made 19.4 billion Swedish crowns ($2.1 billion). Figures for Huawei were not available.
FINDING THE PEOPLE
One major hurdle for Samsung will be attracting talent amid a dearth of software engineers in South Korea.
“We need more software engineers and want to work with the government to find that talent,” Lee was quoted as saying by government officials at his meeting with the prime minister.
Samsung’s network business unit employs roughly 5,000 people, according to a government official in the southern city of Gumi where Samsung operates its manufacturing plants.
Kim Young-woo, an analyst at SK Securities, expects Samsung to hire 1,000-1,500 people for 5G network equipment this year. Samsung declined to comment on network employee levels and hiring plans.
But Samsung’s bet remains risky as the long-term nature of telecom network investment means change comes slowly.
Sweden’s Ericsson and Finland’s Nokia, which acquired the remnants of once-powerful network equipment companies Alcatel-Lucent and Nortel, have as yet seen little sales growth from Huawei’s problems, company executives said.
Both are in cost-cutting mode, even in the face of the 5G opportunity and the problems confronting their biggest rival.
Indeed, some network operators in Europe are warning that a Huawei ban – now under consideration in France, the UK, Germany and other countries – could push back deployment of 5G by as much as three years.
Others warn Samsung may struggle to develop a global sales and support organization.
“The way telcos purchase products and services from their suppliers demand a lot of time and resources, which is why Ericsson and Nokia have around 100,000 employees and Huawei almost twice as many,” said Bengt Nordstrom, CEO of telecom consultancy Northstream.
But Samsung is taking the long view. In December, it agreed to extend its Olympic partnership with the International Olympic Committee through to 2028 and expand its sponsorship to 5G technology.
The company did not want to leave its sponsorship spot open to Chinese rivals, a separate source with knowledge of the matter said.
“If Samsung dropped the top mobile sponsorship for the Olympic games beyond 2020, then who would have taken that spot? It would only have been China, Huawei.”
LONDON, Feb. 12 (Xinhua) — China and UK should keep the long-term interests and larger picture in mind, look at each other’s development as opportunities, respect each other’s sovereignty, security and right to development, handle our differences properly and enhance strategic mutual trust, Chinese Ambassador to Britain Liu Xiaoming has said.
The Chinese diplomat made the remarks while attending the Chinese New Year Dinner by the Cities of London and Westminster Conservative Association on Monday night.
“If we compare China-UK relations to a building, it could not stand tall without a solid foundation. This foundation is the mutual confidence between our two countries,” he said.
Recalling that the world economy is under downward pressure, with surging protectionism and unilateralism making things doubly difficult. Against this situation, Liu said it is all the more important that China and the UK advocate free trade, oppose protectionism and promote open cooperation.
“We hope that the UK would continue to provide a fair, transparent and non-discriminatory business environment for Chinese companies. We hope you will make successful Chinese companies such as Huawei feel welcome here in Britain, and convince them that the UK is a trustworthy place to put their money,” said the Chinese ambassador.
Liu said both China and the UK are known for their profound cultural heritage and important contribution to the progress of human civilization.
“I hope that in the new year our two countries will continue to enhance cultural and people-to-people exchanges, and deepen mutual understanding and strengthen friendship.”
The ambassador also hoped that people from all walks of life in both China and UK will join hands to cement the foundation for a solid and magnificent edifice of bilateral relations.
British Prime Minister Theresa May sent a congratulatory message to the event, saying that it is an important moment to recognize the contribution of the Chinese community in London and across the whole of the United Kingdom.
“The Chinese community’s expanding business expertise, scientific inquiry and cultural heritage and traditions are of immense value to our country – not least here in London, where the vibrancy of Chinatown stands as a strong beacon for the Chinese community and a reminder of all that they have contributed to our society,” she said.
(Reuters) – The British government has signed an order to extradite Indian liquor and aviation tycoon Vijay Mallya, the UK’s Home Office said in a statement on Monday.
The order follows a London court’s ruling in December that Mallya, who moved to Britain in March 2016, be extradited to India to face fraud charges.
“After the decision was handed down on December 10, 2018 by the Westminster Magistrates Court, I stated my intention to appeal. I could not initiate the appeal process before a decision by the Home Secretary. Now I will initiate the appeal process,” Mallya tweeted late on Monday.
A court set up under the country’s anti-money laundering laws last month declared Mallya a “fugitive economic offender”, paving the way for the Indian government to seize his assets, according to Reuters partner ANI.
Mallya, the co-owner of the Formula One motor racing team Force India which went into administration in July, has denied any wrongdoing and says the case against him is politically motivated.
Prime Minister Narendra Modi’s government had cleared “one more step to get Mallya extradited,” Finance Minister Arun Jaitley wrote on Twitter.
“While we welcome the UK Government’s decision in the matter, we await the early completion of the legal process for his extradition,” a government source said on Monday.
The Times of India reported news of the UK government’s order to extradite Mallya earlier on Monday.
CHINDIA ALERT: You'll be living in their world, very soon 