Malaysia to use Huawei “as much as possible”

Access Archive
Jeremy Goldkorn

Dear Access members,

Three highly recommended pieces of reading leading up to the 30th anniversary of June Fourth:

  • “Four is forbidden,” a moving essay in ChinaFile by Yangyang Cheng, who recounts her own experience of discovering the true history and significance of her birth year, only after she came to the United States for graduate school.

  • “China’s ‘black week-end,’” a review by scholar Ian Johnson of a book, The Last Secret: The Final Documents from the June Fourth Crackdown, which publishes for the first time some remarkable documents from a Communist Party meeting directly after the crackdown.

  • “Tiananmen 1989 — Three Decades Behind China’s Gate of Darkness,” a compilation of materials related to June Fourth by scholar Geremie R. Barmé on China Heritage.

—Lucas Niewenhuis, Associate Editor

1. Malaysia welcomes Huawei, rebukes U.S.

Malaysia has become the first Asian country to forcefully rebuke the United States’ position on Huawei, as The Star Malaysia reports:

Malaysia will make use of Huawei’s technology as much as possible, Prime Minister Tun Dr Mahathir Mohamad told the Future of Asia conference in Tokyo, amidst ongoing trade tensions between the United States and China.

“Huawei’s research is far bigger than Malaysia’s capability,” Dr Mahathir said in the conference hosted by Nikkei.

“We will make use of their technology as much as possible,” he said, adding that Huawei had achieved tremendous advancement over American technology.

Dr Mahathir reportedly said he was not concerned over allegations of espionage activities, because “we are an open book.”

Mahathir added, “‘If I am not ahead, I will ban you, I will send warships’ — that is not competition, that is making a threat.” He then also “spoke out against Beijing’s military advances in the South China Sea,” and urged that “no warships should be stationed in the South China Sea.”

Nikkei Asian Review adds (porous paywall):

The 93-year-old leader, in an interview with the Nikkei Asian Review after the speech, said Malaysia hopes to use Chinese technology to enhance its security and business, even as others distance themselves due to the trade war with the U.S.

Mahathir said China’s expertise in artificial intelligence and e-commerce are areas that Malaysia can benefit from in terms of beefing up security, as well as opening up markets to the country’s goods.

“Currently Huawei has got [a training center] in Malaysia and we are looking into how we can benefit from it,” said Mahathir. Although he hopes that Chinese tech investment will create high-paying jobs in Malaysia, Mahathir stressed that he welcomes technology from other countries as well.

Ties with China have improved, Mahathir said, after the two sides resolved a dispute over a China-backed rail line in Malaysia. The prime minister said Malaysia is also looking to work with Chinese companies abroad, based on the success of a partnership in automobiles.

Another Asian country that isn’t too keen on the American-led fight against Huawei is South Korea. A couple of days ago, Reuters reported on how Seoul feels “caught between the U.S. and China” regarding Huawei, a company that by itself “bought $10.7 billion worth of South Korean products last year.” Today, Yonhap News reports:

Huawei Technologies Co. opened its first 5G lab in South Korea on Thursday to expand its presence in the South Korean market, but the ceremony was held in a low-key mode amid a tussle with the United States over its telecom equipment.

The Chinese telecom equipment and handset giant said it will invest US$5 million in the 5G Open Lab to develop technologies related to cloud, virtual reality and augmented reality, connected cars, robots and smart factories, to expand the application of its 5G network in various areas.

Two other pieces of news about Huawei were not so positive for the company.

First, it was revealed that Huawei has received state subsidies in the form of “hundreds of millions of dollars in grants, heavily subsidized land to build facilities and apartments for loyal employees, bonuses to top engineers, and massive state loans to international customers to fund purchases of Huawei products,” according to an AFP investigation.

  • “Huawei founder [Rén Zhèngfēi 任正非] had denied that the company received subsidies in a BBC interview in February, but a Huawei spokeswoman later said Ren meant the firm did not receive any special government aid,” AFP added.

  • This “shows how Huawei represents the apotheosis of Chinese state capitalism,” New York Times tech reporter Paul Mozur wrote on Twitter. “Add in its huge and well-protected market share in China, and its ability to undercut telecom infrastructure competitors on pricing by 30% starts to make more sense.”

Also, the Institute of Electrical and Electronics Engineers (IEEE) has banned Huawei scientists from reviewing papers, Science Magazine reports.

  • The IEEE “told editors of its roughly 200 journals yesterday that it feared ‘severe legal implications’ from continuing to use Huawei scientists as reviewers in vetting technical papers. They can continue to serve on IEEE editorial boards, according to the memo, but ‘cannot handle any papers’ until the sanctions are lifted.”

  • The ban “became a top 10 trending topic on China’s largest social media platform, Weibo, with a number of Chinese researchers voicing outrage,” according to the Financial Times (paywall).

  • “Zhang Haixia, a nanotechnology researcher at China’s prestigious Peking University, resigned from her positions on the editorial boards of two IEEE publications” in protest, the FT says.

2. The forever trade war, day 329

Since trade negotiations broke down early this month, there have been practically no positive signals about the future prospects for resuming talks. Trump appears to be stuck in “we’ll see what happens” mode, and insists, as always, that the Chinese “would love to make a deal with us.”

Yet nearly 11 months after the first round of tariffs went into effect, it’s becoming about time we acknowledged that the current status — high tariffs barriers, higher mutual suspicion, and above all, a battle for technological supremacy — is likely to become “The New Normal” for U.S.-China economic relations for the foreseeable future.

Today, Bloomberg reports (porous paywall) that China has halted soybean purchases from the U.S.:

Government data indicates China bought about 13 million metric tons of American soybeans after the countries agreed to a truce in December, in a move that showed goodwill toward getting the trade dispute resolved. While U.S. Agriculture Secretary Sonny Perdue said in February that China had pledged to buy an additional 10 million tons of American soy, purchases have now stopped.

USDA data also showed that China is yet to take delivery of about 7 million tons of U.S. soybeans that it has committed to buy in the current marketing year.

Zhāng Hànhuī 张汉晖, China’s vice foreign minister, had some very undiplomatic words to say about the endless trade war, per the Guardian: “This kind of deliberately provoking trade disputes is naked economic terrorism, economic homicide, economic bullying.”

One surprisingly amicable exchanged that occured yesterday was the much-hyped debate between CGTN host Liú Xīn 刘欣 and Fox News’s Trish Regan. Here are a few links to recap:

Other news related to U.S.-China relations today:

—Lucas Niewenhuis

3. Bilibili and AcFun block real-time commenting feature until June 6

Bilibili and AcFun, two video streaming websites that are particularly popular among Chinese young people, have shut down their real-time commenting function, also known as the “bullet screen” (弹幕 dànmù), until June 6.

It remains unclear how many Chinese websites have stepped up their censorship efforts recently. The shuttering of danmu on Bibili and AcFUN, which should be big news as it will affect millions of users, hardly made any headlines in Chinese mainstream media. But given the timing of these abrupt decisions — we’re less than a week away from the 30th anniversary of the 1989 Beijing June 4 crackdown — some internet users on Chinese social media speculated that the termination of real-time commenting feature is a preemptive move to avoid troubles in a sensitive period of time.

Click through to The China Project for more details.

—Jiayun Feng

—–

Our whole team really appreciates your support as Access members. Please chat with us on our Slack channel or contact me anytime at jeremy@thechinaproject.com.

—Jeremy Goldkorn, Editor-in-Chief

BUSINESS AND TECHNOLOGY:

NIO is establishing a joint venture with a state-owned fund, Beijing E-Town International Investment and Development company (E-Town Capital), the company said during its first-quarter earnings conference call today (May 28). E-Town Capital will put 10 billion yuan ($1.45 billion) into NIO China, as the Beijing-based JV will be called, in exchange for a minority stake.

Nio has faced challenges from decreasing government subsidies, a macroeconomic slowdown, and the US-China trade war, Nio CFO Louis Hsieh said in an earnings call on Tuesday. Other factors include a seasonal slowdown around Chinese New Year, increased competition, and accelerated deliveries last year, the company said.

SCIENCE, HEALTH, AND THE ENVIRONMENT:

POLITICS AND CURRENT AFFAIRS:

Wang then moved to accusing Taiwan independence forces of hoping to rely upon the United States and mentioned the Taiwan Assurance Act, recently passed by the U.S. House of Representatives. He asked rhetorically, “Do you think the Americans can provide assurance?” Wang answered himself: “The Americans just treat Taiwan as a pawn. Will America go to war with China over the Taiwan issue? My judgment is no. And if they fight, will they win? I judge they cannot.” Wang mentioned that the American-led UN forces did not defeat the (Chinese) Volunteer Army on Korean War battlefields. At that time, China was still impoverished. “Facing today’s China, would America dare to go to war with China?” It is rare for CCP officials to speak so candidly about the military factors in the context of unification…

The reason is possibly that his comments on military factors and speculation about war were deemed inappropriate for publication. His emphasis on military factors is inconsistent with the CCP’s emphasis on peaceful unification.

It is also possible that Wang was too straightforward in explaining how the Party hopes to accomplish unification peacefully. While the Party’s game plan for unification is buttressed by this hard power, it is built around two psychological elements, which Wang discussed: first, undermining the Taiwan people’s confidence in their government and democratic system and, second, undermining Taiwan’s confidence in the United States as a reliable supporter capable of coming to Taiwan’s assistance in the face of growing PLA capabilities.

SOCIETY AND CULTURE:

VIDEO ON SUPCHINA

Who is Liu Xin, the CGTN anchor who took on Fox’s Trish Regan?

Chinese state media anchor Liu Xin’s appearance on Trish Regan Primetime on the Fox Business Network on Wednesday evening has created a lot of buzz on the internet, both in the U.S. and in China. Who is Liu Xin?

FEATURED ON SUPCHINA

The China Project Quiz: May 35th

We’re approaching the 30th anniversary of the 1989 Tiananmen Square protests. How much do you know about the events leading up to, during, and after June 4, 1989? Take this 12-question quiz and let us know how you do — tweet your score @supchinanews.

SINICA PODCAST NETWORK

Sinica Podcast: Charlene Barshefsky on Trump’s Trade War

This week on the Sinica Podcast, we are happy to share a live recording from the third annual The China Project Women’s Conference. Jeremy and Kaiser sat down with Ambassador Charlene Barshefsky, now a senior international partner at the law firm of WilmerHale, and a former United States Trade Representative under the Clinton administration.

ChinaEconTalk: Exploring the links between business and the Chinese bureaucracy

Why did Shenzhen, a backwater fishing village, spawn the likes of industry leaders ZTE, Huawei, and Lenovo, while Suzhou, which previously scored massive investments from top “dragon head” foreign firms like Samsung and Philips, failed to spawn domestic innovation? What role did FDI and the local bureaucrats in charge of economic development play? And what lessons does this story hold for today’s Chinese industrial policy as well as development and innovation economics more broadly? For answers, we turn to Ling Chen, an assistant professor at the Johns Hopkins School of Advanced International Studies, and the author of the recent book Manipulating Globalization: The Influence of Bureaucrats on Business in China.

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of The China Project, and co-founder of the Sinica Podcast. Read more

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