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.
BEIJING, May 31 (Xinhua) — The U.S. government has been slammed at home and abroad after announcing on Friday “terminating” its relationship with the World Health Organization (WHO).
U.S. health experts and lawmakers have expressed concern over the decision announced by President Donald Trump amid the COVID-19 outbreak.
Patrice Harris, president of the American Medical Association, described Trump’s move as a “senseless” action with “significant, harmful repercussions.”
“COVID-19 affects us all and does not respect borders; defeating it requires the entire world working together,” Harris was quoted by CNN as saying, urging Trump to reverse the course.
Lawrence Gostin, a professor of global health law and director of the O’Neill Institute for National and Global Health Law at Georgetown University, described the move as “foolish and arrogant” in his Twitter account.
“Trump’s action is an enormous disruption and distraction during an unprecedented health crisis,” said Gostin, also the director of the WHO collaborating center on national and global health law. “The President has made us less safe.”
Democratic Senator Joe Manchin of West Virginia said that “the United States cannot eliminate this virus on its own and to withdraw from the World Health Organization — the world’s leading public health body — is nothing short of reckless,” according to a CNN report.
Even within the Republican party, some Republicans also expressed their disagreement. Senate Health Committee Chairman Lamar Alexander reportedly said he disagreed with Trump’s decision, because, without U.S. funding, clinical trials to develop a COVID-19 vaccine might be hampered.
In addition, the European Union (EU) has urged the United States to reconsider its termination of ties with the WHO, warning that Trump’s move would erode global efforts to curb the spread of the virus.
“The WHO needs to continue being able to lead the international response to pandemics, current and future. For this, the participation and support of all is required and very much needed. In the face of this global threat, now is the time for enhanced cooperation and common solutions. Actions that weaken international results must be avoided,” Ursula von der Leyen, president of the European Commission, and Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy, said in the statement on Saturday.
“In this context, we urge the U.S. to reconsider its announced decision,” the statement said.
German Health Minister Jens Spahn tweeted that Trump’s move was “a disappointing backlash for International Health.”
“The EU must take a leading role and engage more financially,” Spahn said, noting that this would be one of Germany’s priorities when it becomes the bloc’s rotating presidency on July 1.
British Prime Minister Boris Johnson’s spokesperson said earlier that Britain “has no plans to stop funding the WHO, which has an important role to play in leading the global health response.”
“Coronavirus is a global challenge and it is essential that countries work together to tackle this shared threat,” the spokesperson was quoted by The Guardian as saying.
Irish Minister for Health Simon Harris on Friday described Trump’s move as an “awful decision.”
“A global pandemic requires the world working together … We should unite in our fight against it (COVID-19) & not fight each other,” Harris tweeted.
Russian Foreign Ministry spokesperson Maria Zakharova told TASS news agency that Washington “dealt a blow” to the international framework for cooperation in healthcare at the moment when the world needed to join forces.
China’s leadership has made it clear to its people that the world will become more dangerous and they must be prepared for hard times
Beijing’s relatively small stimulus response to Covid-19 suggests it wants to save its economic policy ammunition for a bigger battle
China opted not to set a GDP target for 2020. Photo: Xinhua
Beijing’s decision not to set an annual GDP target for 2020 – for the first time since 2002 – is a sign it is putting stability ahead of growth as part of its preparations for an escalating conflict with the United States.
Economic development has always been the central theme for Beijing since it established diplomatic relations with the US in 1979. But this year it has given priority to job creation and tackling poverty. The coronavirus outbreak might appear to have been the reason for the shift, but the underlying factor is the tension with the US.
Covid-19 offered a preview of what a decoupling of China and US might look like: aircraft grounded, cargo flows disrupted, value chains broken, goodwill and cooperation lost, blame games started.
Both countries have suffered heavy human and economic losses from the coronavirus, yet that did not inspire them to work together. Instead, hostility and rivalry has thrived, and neither wants to blink first.
The Chinese leadership has made it clear to its people that the world will become more dangerous and they must be prepared for hard times. As such, the government is saving its economic policy ammunition.
While the stimulus plans introduced in the US, Germany, Japan and France exceed 10 per cent of their national GDP and interest rates have been cut to the bone, Beijing stopped at just 1 trillion yuan (US$140 billion) worth of special treasury bonds and 1.6 trillion yuan of additional local government bonds. In total, about 2.6 per cent of GDP.
Interest rates in China – 2.7 per cent on 10-year bonds – are some of the highest among major economies.
China’s 6.6 per cent defence spending boost lowest in three decades
23 May 2020
China’s budget fiscal deficit has increased to 3.6 per cent of GDP for 2020, but the larger deficit is mainly from tax and fee cuts instead of increased fiscal expenses, except for an increased military spending.
Beijing is calling on provincial and local authorities to tighten their belts, which is unusual for a government that has huge assets and can increase spending at any time through quantitative easing.
So why is the government, which is known for intervening in the economy, being so restrained?
It is bracing itself for a perceived period of turbulence and hardship as its relationship with the US turns sour. It is putting jobs and social stability on top of its agenda, instead of growth.
Beijing is refraining from excessive spending, eliminating sources of potential instability, making appeals to the most vulnerable social groups, and saving its power for a bigger test.
Against that backdrop, the National People’s Congress passed the national security legislation on Hong Kong. Beijing knew the bill would anger the US, but did it anyway.
Hong Kong is known as China’s gateway to the international capital market and the largest offshore yuan market, but Beijing is ready to trade losses on the financial and economic front for potential gain on a fortified national security fence.
All this points to the suggestion that Beijing is preparing for the possibility of decoupling from the US, even if it doesn’t necessarily want to.
The threat of a new Cold War is clouding the world. The theme of life for one or two generations of people on both sides of the Pacific may shift from growth and prosperity to struggle and confrontation.
China and the US have yet to collide totally, but that moment is drawing near.
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.”
Chinese groups calling for more ‘fighting spirit’ are getting the upper hand on those who favour calm and cooperation, government adviser says
From Hong Kong to Covid-19, trade to the South China Sea, Beijing and Washington are clashing on a growing number of fronts and in an increasingly aggressive way
Efforts to promote dialogue and cooperation between the US and China are failing, observers say. Photo: AFP
Moderates who favour dialogue and cooperation as a way to resolve China’s disputes with the United States are losing ground to hardline groups bent on taking the fight to Washington, according to political insiders and observers.
“There are two camps in China,” said a former state official who now serves as a government adviser and asked not to be named.
“One is stressing the combat spirit, the other is trying to relieve tensions. And the former has the upper hand.”
Relations between China and the US are under intense pressure. After Beijing moved to introduce a national security law for Hong Kong, US President Donald Trump said on Friday that Washington would begin eliminating the special policy exemptions it grants the city, as it no longer considers it autonomous from mainland China.
Beijing’s decision to enact a national security law for Hong Kong was met with anger from the US and other Western countries. Photo: Sam Tsang
The two nations have also clashed over trade, Xinjiang, Taiwan and the South China Sea, with the US passing several acts denouncing Beijing and sanctioning Chinese officials.
China has also experienced turbulence in its relations with other countries, including Australia and members of the European Union, mostly related to the Covid-19 pandemic
and Beijing’s efforts to position itself as a leader in the fight against the disease with its policy of “mask diplomacy”.
After Canberra appealed for an independent investigation to be carried out to determine the origins of the coronavirus, Beijing responded by imposing tariffs on imports of Australian barley, showing it is prepared to do more than just trade insults and accusations with its adversaries.
Pang Zhongying, a professor of international relations at Ocean University of China in Qingdao, said there was a worrying trend in China’s relations with other nations.
“We need political and diplomatic means to resolve the challenges we are facing, but … diplomatic methods have become undiplomatic,” he said.
“There are some who believe that problems can be solved through tough gestures, but this will never work. Without diplomacy, problems become confrontations.”
said during his annual press conference on the sidelines of the National People’s Congress last weekend that China and the United States must work together to prevent a new Cold War.
His words were echoed by Chinese Premier Li Keqiang, who said during a press conference after the closure of the legislative session on Thursday that the many challenges facing the China-US relations could only be resolved through cooperation.
However, the government adviser said there was often quite a chasm between what China’s leaders said and what happened in reality.
“Even though we say we do not want a Cold War, what is happening at the working level seems to be different.” he said. “The implementation of policies is not properly coordinated and often chaotic.”
Tensions between China and the US have been in a poor state since the start of a trade war almost two years ago. After multiple rounds of negotiations, the sides in January signed a phase one deal, but the positivity that created was short-lived.
In February, Beijing expelled three reporters from The Wall Street Journal over an article it deemed racist, while Washington has ramped up its military activity in the South China Sea and Taiwan Strait, and threatened to revoke the visas of Chinese students studying science and technology in the US over concerns they might be engaged in espionage.
Beijing has also used its state media and army of “Wolf Warrior” diplomats to promote its narrative, though many Chinese scholars and foreign policy advisers have said the latter’s nationalistic fervour has done more harm than good and appealed to Beijing to adopt a more conciliatory tone.
However, Hu Xijin, editor-in-chief of Chinese tabloid Global Times, said China had no option but to stare down the US, which regarded the world’s most populous nation as its main rival.
“Being contained by the US is too high a price for China to pay,” he said. “I think the best thing people can do is forget the old days of China-US ties”.
Jin Canrong, a professor of international relations at Renmin University in Beijing, wrote in a recent newspaper article that Beijing’s actions – notably enacting a national security law for Hong Kong – showed it was uncompromising and ready to stand its ground against the US.
Wu Xinbo, dean of international studies at Fudan University in Shanghai, agreed, saying relations between the two countries were likely to worsen in the run-up to the US presidential election in November and that Beijing should be prepared for a fight.
But Adam Ni, director of China Policy Centre, a think tank in Canberra, said the issue was not that the moderate camp had been sidelined, but rather Beijing’s perception of the US had changed.
“Beijing has woken up to the idea that America’s tough policy on China will continue and it is expecting an escalation of the tensions,” he said.
“The centre of gravity in terms of Beijing’s perception of the US has shifted, in the same way the US perception of China has shifted towards a more negative image”.
Beijing was simply responding in kind to the hardline, assertive manner of the US, he said.
Tsai Ing-wen visited exiled Hong Kong bookseller a day after NPC voted in favour of legislation
Lam Wing-kee said fleeing Hongkongers saw Taiwan as a step towards applying for asylum in the West
President Tsai Ing-wen (centre) shows her support for Hong Kong bookseller Lam Wing-kee (right) with Lin Fei-fan, deputy secretary general of the ruling Democratic Progressive Party. Photo: Taiwan presidential office/AFP
Her visit came a day after China’s legislature, the National People’s Congress, voted in favour of a resolution to initiate the legal process for a national security law to be imposed on Hong Kong, despite concerns from the United States, the European Union and elsewhere that the move would erode human rights, freedom and autonomy in the city.
Tsai said on behalf of all Taiwanese people, she welcomed Lam to stay in Taiwan where he could bolster the island’s efforts to further freedom and democracy.
Hongkongers who want to flee to Taiwan ‘will go through strict screening’
28 May 2020
Lam, one of the five shareholders and staff at Hong Kong’s Causeway Bay Books, fled to Taiwan in April last year after he was detained by Chinese agents for eight months in 2015 for selling books critical of the Chinese leadership.
between October and December that year and it emerged they had been detained on the Chinese mainland.
President Tsai Ing-wen looks at a book while visiting Lam Wing-kee on Friday. Photo: Taiwan presidential office/AFP
Lam later said he had been detained and blindfolded by police after crossing the border into mainland China from Hong Kong in October 2015.
The case triggered a huge controversy and raised fears of growing Chinese control in the city.
Seeing Lam as a representative of Hongkongers fleeing to Taiwan to avoid political persecution, Tsai said she wanted to understand what challenges these exiles faced and what help they needed during their stay on the self-ruled island.
“I want to tell Boss Lam [Wing-kee] and our Hong Kong friends that the government here has set up an ad hoc committee to offer help to them very soon,” she said.
On Wednesday, Tsai called for the government to set up an ad hoc committee to work out a “humanitarian help action plan” for Hong Kong people seeking to live in Taiwan or immigrate to the island. It was borne out of concern they would be arrested or prosecuted for taking part in months of anti-government protests triggered last year by the now-shelved extradition bill.
Chen Ming-tong, head of the Mainland Affairs Council, the island’s top mainland policy planner, said on Thursday his council would draft the measures for cabinet’s approval in a week.
Under the plan, the Mainland Affairs Council would issue special measures and coordinate with the island’s authorities on how to help Hongkongers relocate to Taiwan and take care of them.
Bookseller Lam told Tsai what Hongkongers needed most was to have their stay in Taiwan extended.
Lam said that currently, because of the absence of a political asylum law, Hongkongers could only apply to live in Taiwan through study, work, investment, their professional skills or close relatives.
He said fleeing Hongkongers usually came to Taiwan on tourist permits, which at most allowed them to stay for up to six months, giving them not enough time to apply for long-term residence in Taiwan.
“It would be better if they can stay for nine months and preferably one year,” he said.
Lam said some fleeing Hongkongers saw Taiwan as an intermediary base as they hoped to apply for asylum in the West, but it took a long time for Western countries to screen and approve their asylum requests.
Meanwhile, Premier Su Tseng-chang said Article 18 of the Laws and Regulations Regarding Hong Kong and Macau Affairs was good enough to deal with the current crisis in the absence of a political asylum law in Taiwan.
That article states that “necessary help shall be provided to Hong Kong or Macau residents whose safety and liberty are immediately threatened for political reasons”.
WASHINGTON/NEW DELHI (Reuters) – U.S. President Donald Trump said on Wednesday he had offered to mediate a standoff between India and China at the Himalayan border, where soldiers camped out in a high-altitude region have accused each other of trespassing over the disputed border.
“We have informed both India and China that the United States is ready, willing and able to mediate or arbitrate their now raging border dispute,” Trump said in a Twitter post.
The standoff was triggered by India’s construction of roads and air strips in the region as it competes with China’s spreading Belt and Road initiative, involving infrastructure development and investment in dozens of countries, Indian observers said on Tuesday.
Both were digging defences and Chinese trucks have been moving equipment into the area, the officials said, raising concerns about an extended standoff.
There was no immediate response from either India or China to Trump’s offer. Both countries have traditionally opposed any outside involvement in their matters and are unlikely to accept any U.S. mediation, experts said.
China’s ambassador to India, Sun Weidong, struck a conciliatory note, saying the two Asian countries should not let their differences overshadow the broader bilateral relationship.
“We should adhere to the basic judgment that China and India are each other’s opportunities and pose no threat to each other. We need to see each other’s development in a correct way and enhance strategic mutual trust,” he said, speaking in a webinar on China’s experience of fighting COVID-19.
“We should correctly view our differences and never let the differences shadow the overall situation of bilateral cooperation.”
The two countries are engaged in talks to defuse the border crisis, an Indian government source said. “These things take time, but efforts are on at various levels, military commanders as well as diplomats,” the source said.
The Chinese side has been insisting that India stop construction near the Line of Actual Control or the de facto border. India says all the work is being done on its side of the border and that China must pull back its troops.
Trump in January offered to “help” in another Himalayan trouble spot, the disputed region of Kashmir that is at the center of a decades-long quarrel between India and Pakistan.
But the U.S. offer triggered a political storm in India, which has long bristled at any suggestion of third-party involvement in tackling Kashmir which it considers an integral part of the country.
Countries must respect each others’ systems and be wary of US political forces who want to ‘hijack relations’, Wang tells press conference at ‘two sessions’
Beijing is not looking for confrontation and wants to work with Washington to fight coronavirus, minister says
Foreign Minister Wang Yi said China did not want to replace or change the US. Photo: Xinhua
China and the US should try to avoid a new cold war and find new ways to cooperate despite their differences, China’s Foreign Minister Wang Yi said on Sunday.
“We need to be alert to efforts by some political forces in America to hijack China-US relations and who try to push the two countries towards a so-called ‘new cold war’.
“This is a dangerous attempt to turn back the course of history,” Wang told a press conference on the sidelines of the annual parliamentary meetings known as the ‘two sessions’.
Ties between the two countries have further worsened due to escalating tensions over the handling of the Covid-19 pandemic.
Voices calling for decoupling have been on the rise in the US, with some arguing that the two countries are edging towards a new cold war akin to that against the Soviet Union.
Wang called for the two countries to respect each other’s political systems and to find a way to get along despite their differences.
The two nations should step up cooperation on global pandemic control, and coordinate on macro policies to deal with the economic impact.
“China has no intention of changing the United States, much less replacing it. The US should give up the wishful thinking that it can change China.”
“For the benefit of the two peoples, as well as the future and well-being of humankind, China and the US should and must find a way to coexist peacefully despite the differences in system and cultures of the two societies.”
Wang said China will not seek confrontation with the United States, but China is determined to protect its sovereignty, territorial integrity and development.
LONDON (Reuters) – China has betrayed the people of Hong Kong so the West should stop kowtowing to Beijing for an illusory great pot of gold, said Chris Patten, the last governor of the former British colony.
Beijing is set to impose new national security legislation on Hong Kong after a sustained campaign of pro-democracy protests last year in the city, which enjoys many freedoms not allowed on mainland China.
“The Hong Kong people have been betrayed by China,” Patten was quoted as saying by The Times newspaper. Britain has a “moral, economic and legal” duty to stand up for Hong Kong, he said.
Patten watched as the British flag was lowered over Hong Kong when the colony was handed back to China in 1997 after more than 150 years of British rule.
Hong Kong’s autonomy was guaranteed under the “one country, two systems” agreement principle enshrined in the 1984 Sino-British Joint Declaration signed by then Chinese Premier Zhao Ziyang and British Prime Minister Margaret Thatcher.
But China’s plans to impose national security laws on Hong Kong risk destroying the Declaration, Patten said. The United States has branded the laws a “death knell” for the city’s autonomy.
“What we are seeing is a new Chinese dictatorship,” Patten said. “The British government should make it clear that what we are seeing is a complete destruction of the Joint Declaration.”
Hong Kong leader Carrie Lam said her government will “fully cooperate” with the Chinese parliament to safeguard national security, which she said would not affect rights, freedoms or judicial independence.
Patten said the West should stop chasing the illusory promise of Chinese gold.
“We should stop being fooled that somehow at the end of the all the kowtowing there’s this great pot of gold waiting for us. It’s always been an illusion,” Patten said.
“We keep on kidding ourselves that unless we do everything that China wants we will somehow miss out on great trading opportunities. It’s drivel.”
The British government did not immediately comment on Saturday.
Prime Minister Boris Johnson’s spokesman said on Friday the government was monitoring the situation and as a party to the Joint Declaration the UK was committed to the upholding Hong Kong’s autonomy and respecting the one country, two systems model.
China will not set an economic growth goal for this year as it deals with the fallout from the coronavirus pandemic.
It is the first time Beijing has not had a gross domestic product (GDP) target since 1990 when records began.
The announcement was made by Premier Li Keqiang at the start of the country’s annual parliament meeting.
The world’s second largest economy shrank by 6.8% in the first quarter from a year ago as lockdowns paralysed businesses.
“This is because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment,” Premier Li said.
The country’s leadership has promised to boost economic support measures amid growing concerns that rising unemployment could threaten social stability.
The move comes as tensions between Beijing and Washington are becoming increasingly strained over the coronavirus pandemic, trade and Hong Kong.
On Thursday, President Donald Trump stepped up his attacks on China, suggesting that the country’s leader, Xi Jinping, is behind a “disinformation and propaganda attack on the United States and Europe.”
It came as Mr Trump and other Republicans have escalated their criticism of Beijing’s handling of the early stages of the outbreak.
Also on Thursday, China announced plans to impose new national security legislation on Hong Kong after last year’s pro-democracy protests.
The announcement was met with a warning from Mr Trump that the US would react “very strongly” against any attempt to gain more control over the former British colony.
Separately, two US senators have proposed legislation to punish Chinese entities involved in enforcing the planned new laws and penalise banks that do business with them.
Earlier this week, the US Senate unanimously passed a proposal to delist Chinese companies from American stock exchanges if they fail to comply with US financial reporting standards.
US-listed Chinese companies have come under increasing scrutiny in recent weeks after Luckin Coffee revealed that an internal investigation found hundreds of millions of dollars of its sales last year were “fabricated”.
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.
CHINDIA ALERT: You'll be living in their world, very soon 