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EDITORIAL: 2020 MAR 03 MADE IN CHINA 2025 – A HALFTIME ANALYSIS #4cminewswire, #Huawei, #ZTE, #5G, #NextGenerationIT, #SmartManufacturing, #GreenManufacturing, #IndustrialInternet, #ArtificialIntelligence, #4cminews, #4CMiTV, #4CM2020MAR03, READ HERE: https://4cminews.com/?p=52418 pic.twitter.com/3QZXSQOHs3
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Remarks: Five years ago, China launched an ambitious plan to become a leading global technological superpower by 2049, the centennial of the founding of the Peoples’ Republic of China. President Xi Jinping installed the strategy “Made in China 2025” (MIC25) as a nationwide guideline for China’s future. FULL STORY HERE: https://4cminews.com/?p=52418
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by Maximilian Nadicksbernd
Five years ago, China launched an ambitious plan to become a leading global technological superpower by 2049, the centennial of the founding of the Peoples’ Republic of China. President Xi Jinping installed the strategy “Made in China 2025” (MIC25) as a nationwide guideline for China’s future.English translation of the official policy. http://www.cittadellascienza.it/cina/wpcontent/uploads/2017/02/IoT-ONE-Made-in-China-2025.pdf The strategic plan defines ten core industries, such as robotics, power equipment, and next generation IT, in which China aims to achieve breakthroughs and create globally competitive companies.
At its halftime, a series of articles appearing here, focusing on central elements of MIC2025, will take a closer look on how far this strategy has been carried out and what still needs to be done.
China is currently at a critical juncture in its endeavor to achieve the ambitious developmental targets it has set itself for 2049. Despite its remarkable economic growth over the past decades, the People’s Republic still faces major challenges. With a current GDP per capita of around 10,000 USD, China is considered an upper-middle-income country according to the United Nations (UN) classification.United Nations (2014). “World Economic Situation and Prospects 2014.” https://www.un.org/en/development/desa/policy/wesp/wesp_current/wesp2014.pdf Despite its remarkable success, China is still at risk of being caught in the middle-income trap. Many developing countries before had lost not only their comparative advantage due to rising wages, but also lost their ability to compete with advanced economies in terms of productivity and innovation at this stage of development.
Figure 1: Ten core industries set the basis for Made in China 2025.Wang Jianing 王佳宁 (ed.) (2016). “中共中央 国务院印发《国家创新驱动发展战略纲要》 (The State Council of the CCP Central Committee releases the “Outline of the … Continue reading
Made in China 2025
The “Made in China 2025” (MIC25) strategy released in May 2015 was designed to help overcome precisely this challenge. The goal of this plan is to establish a strong, national innovation system. The government is deploying a set of influential industrial policy measures that constantly strive to improve capital allocation, policy coordination, and tech-related innovation. Ultimately, the Chinese government hopes to propel China through the middle-income trap and transform the nation into a globally competitive manufacturing superpower largely independent of foreign technology.
MIC25 represents an industrial policy blueprint for building a world-class innovation system and achieving global dominance in key technologies. MIC25’s stated method is to pursue an innovation driven and talent-based approach that puts quality first, promotes green development, and supports not only future-oriented but also traditional industries. In practice, the strategy sets specific market share targets for Chinese companies and defines strategic priorities (战略任务) and support mechanisms (战略支撑) that extend far beyond the ten core industries (see Figure 1). Using smart manufacturing as the backbone, the strategy strives to turn China into a global hub for high-tech industries, absorbing and localizing entire value chains.
The ten core industries of MIC25 are not all pursued with the same intensity (see Figure 2). Chinese companies from more traditional high-tech sectors like aerospace, machine tools, or software engineering face the challenge of catching up with foreign competitors. They do not prioritize the development of top-notch products and global leadership and are content to overcome existing technology gaps by building up sufficient (as opposed to state-of-the-art) domestic expertise leveraging its large domestic market to emerge as a serious global competitor. One example is the production of passenger jets: both the single-aisle C919 and wide-body CR929 are set to take market share from Airbus and Boeing. The Chinese state manufacturer Comac has commitments from 28 mostly Chinese buyers for 815 airplanes, and will become increasingly active on the global market over the next ten years.Bloomberg (2017) https://www.bloomberg.com/quicktake/china-s-jet-challenge
Figure 2: MIC25 policy plans prioritize digital and emerging industries – reflected in number of national-level action and development plans.MERICS; https://www.merics.org/de
Smart Manufacturing, Digitalization, and Emerging Technologies
In smart manufacturing, digitalization, and emerging technologies, China wants to leapfrog and leave its foreign competitors behind. Technology gaps in these fields are more fluid, and China sees the opportunity to assume a leading position right from the start. The tables have already started to turn. The government pushes the development of future technologies by providing financial support and by artificially increasing demand through, for instance, beneficial regulations or tax incentives to quickly turn ideas from niche industries into products that are suitable for mass consumption. China has forged ahead in fields such as next-generation IT (companies like Huawei and ZTE are set to play a major role in the deployment of 5G networks), high-speed railways and ultra-high voltage electricity transmissions. More than 530 smart manufacturing industrial parks have popped up in China. Major focus is the creation of the “Industrial Internet” enabled by deployment of technologies like AI/robotics (47 percent), big data (32 percent) and cloud computing (20 percent).Deloitte (2018). “China’s smart manufacturing: a steady push for the long term” … Continue reading
Recently, green manufacturing was given special emphasis in policy documents, underpinning President Xi Jinping’s vision of creating an “ecological civilization” that thrives on sustainable development. China boasts a strong position in areas such as new energy and intelligent energy saving vehicles. The electric vehicle (EV) battery market is a powerful example of how quickly such dynamics may unfold and global value chains are absorbed. In 2017, seven of the top ten EV battery companies were Chinese, accounting for 53 percent of the global market share. The expansion of China’s battery manufacturing capacities is in the pipeline and could amount to three times that planned in the rest of the world.MERICS (2018). “China’s battery industry is powering up for global competition.” https://www.merics.org/en/blog/chinas-battery-industry-powering-global-competition
However, the comprehensive and adaptive nature of MIC25 makes it inherently difficult to evaluate the strategy’s efficiency and success as a whole. The dependency on foreign core components is still a major bottleneck for China’s national tech ambitions. Its industry has considerable weaknesses in mastering foundational technologies essential for developing an advanced high-tech sector in certain areas, especially for the digital economy. This vulnerability is most evident in the fields of new materials, semiconductors and key components for advanced machinery and machine tools. Chinese tech firms have already experienced considerable difficulties when they were cut off from access to chips or other high-tech components from abroad, as illustrated by the US trade measures against companies like ZTE and Huawei.
Figure 3: China’s high-tech innovation relies on foreign components – a strong dependence results in negative trade balance (in bn USD).KONEMA, China: Science and Technology – Imports and Exports of High-tech Products … Continue reading
Synthesizing the core takeaways, it becomes clear that China has not at all abandoned its goal of catching up with Western industrialized countries – MIC25 serves as the backbone to overcome the middle-income trap. A plethora of individual targets set as part of MIC25 demonstrate ambition, but also indicate that not all technologies are emphasized equally: China is determined to dominate smart and emerging technologies as namely AI robotics or cloud computing. However, foreign tech dependency is China’s Achilles heel.
Progress assessments of MIC25 will thus vary greatly depending on the chosen parameters and individual sectors. They are industry- or tech-specific and fluctuate between highly aggregated or exceedingly detailed levels. Examples include market share targets for Chinese technology, target quotas for smart equipment usage, a certain number of patents per 100 million CNY in revenue, and the development of several quality brands. Thus, a critical in-depth analysis of each sector has to be done in order to achieve transparency on how far China’s strategy can be coined a success.
Therefore, stay tuned for the following topics to be covered soon:
• Next-generation IT-companies like Huawei and ZTE are set to play a major role in the deployment of 5G networks
• China’s 530+ Smart Manufacturing Industrial Parks – big data (21 percent), new materials (17 percent) and cloud computing (13 percent) projects to be watched
• Green Manufacturing and new energy (hydrogen)- thriving sustainability and circular economic approaches
• “Industrial Internet” and Artificial Intelligence (AI) – delayering the broad range of interconnected fields that span virtually everything from hardware to software and tech applications such as facial recognition or interconnected vehicles
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ARTICLE TITLE: Made in China 2025 – A Halftime Analysis
Article Link: chinatechblog.org
Date-stamped: 2020 MAR 03
Author: Maximilian Nadicksbernd
|↑1||English translation of the official policy. http://www.cittadellascienza.it/cina/wpcontent/uploads/2017/02/IoT-ONE-Made-in-China-2025.pdf|
|↑2||United Nations (2014). “World Economic Situation and Prospects 2014.” https://www.un.org/en/development/desa/policy/wesp/wesp_current/wesp2014.pdf|
|↑3||Wang Jianing 王佳宁 (ed.) (2016). “中共中央 国务院印发《国家创新驱动发展战略纲要》 (The State Council of the CCP Central Committee releases the “Outline of the National Innovation-driven Development Strategy”).” Xinhuanet. May 19. http://www.xinhuanet.com/politics/2016 05/19/c_1118898033.htm.|
|↑4||Bloomberg (2017) https://www.bloomberg.com/quicktake/china-s-jet-challenge|
|↑6||Deloitte (2018). “China’s smart manufacturing: a steady push for the long term” https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/energy-resources/deloitte-cn-eri2018-china-smart-manufacturing-report-en-190403.pdf|
|↑7||MERICS (2018). “China’s battery industry is powering up for global competition.” https://www.merics.org/en/blog/chinas-battery-industry-powering-global-competition|
|↑8||KONEMA, China: Science and Technology – Imports and Exports of High-tech Products https://knoema.de/NBSCN_A_A0N10/china-science-and-technology-imports-and-exports-of-hightech-products-manufactured-goods-and-primar|
The CCP has built a vast, high-technology system to surveil the Chinese people, and it is exporting this system as part of its One Belt, One Road initiative. Two of the primary players in this push are the companies ZTE and Huawei.
Recently, Sens. Marco Rubio (R-Fla.) and Chris Van Hollen (D-Md.) warned the Trump administration that ZTE was helping China export surveillance tactics to the NICOLÁS MADURO REGIME. The Chinese telecommunications giant, which has been penalized for violating trade sanctions on Iran and North Korea, may acquire additional U.S. sanctions as the company’s business with the Venezuelan government faces new scrutiny.
Rubio and Van Hollen sent a letter to the U.S. secretaries of state, the treasury, and commerce, urging an investigation into company’s activities.
“Huawei and ZTE are two sides of the same coin,” Van Hollen said in a statement, adding that Chinese telecom companies represent a “fundamental risk” to U.S. national security.
In the letter, the senators referred to a recent Reuters report stating that the Chinese telecom firm assisted the Venezuelan government in establishing control over its citizens. According to the Reuters report, ZTE helped the Maduro regime to build a database that enables the monitoring and tracking of Venezuelan citizens and, since 2016, to centralize video surveillance.
“We are concerned that ZTE, by building this database for the Venezuelan government, may have violated U.S. export controls and sanctions laws, as well as the terms of the Commerce Department’s June 2018 superseding settlement agreement with ZTE,” the senators said in the letter.
ZTE has a history of breaching U.S. government sanctions. In April, the Commerce Department found ZTE had violated a settlement reached in 2017, and blocked the company from buying crucial components and software from American technology companies. ZTE is highly dependent on U.S. suppliers like Qualcomm, Google, and Corning to manufacture its cellphones and telecom equipment.
The ban nearly brought the company to the brink of bankruptcy, prompting a rare intervention by Chinese leader Xi Jinping.
In June, ZTE reached a settlement with U.S. authorities, agreeing to pay a total of $1.4 billion in fines and to overhaul its board of directors and senior management ranks. In exchange, the United States lifted the ban.
“The Venezuelan government hired ZTE to build a database and develop a mobile payment system for a smart ID card,” the lawmakers wrote.
The project was inspired by China’s national identity card program that tracks the social, political, and economic behavior of its citizens. The program enables the government to monitor everything from a person’s personal finances to medical history and voting activity.
The system in Venezuela was built using components from Dell Technologies in the United States, which alarmed the senators.
“ZTE installed data storage units built by Dell Technologies,” the letter stated. “Though Dell’s transaction appears to have been with ZTE in China, we are concerned that ZTE may have violated U.S. export controls by misidentifying the end-user or purpose of the end use.”
ZTE is China’s second-largest telecom equipment maker. The company is publicly traded, but its largest shareholder is still a Chinese state-controlled enterprise.
A spokesperson for the Commerce Department confirmed that it had received the senators’ letter.
“The Department of Commerce will remain vigilant against any threat to U.S. national security and continues to diligently implement the settlement agreement with ZTE. We have no further comment at this time,” stated the spokesperson in an email.
As part of the settlement deal in June, ZTE has allowed the U.S. Commerce Department to monitor the company’s behavior.
Both Rubio and Van Hollen have been vocal about ZTE’s potential violations and about retaining sanctions on the firm.
“We have not received a response to our letter at this point,” stated a spokesperson for Van Hollen.
Van Hollen co-sponsored a bill introduced in September called the ZTE Enforcement Review and Oversight (ZERO) Act. The legislation requires the Commerce Department to put ZTE out of business if it violates the current agreement with the United States.
On Dec. 1, as part of a U.S. probe, Canada arrested Meng Wanzhou, the chief financial officer of Huawei, another Chinese telecom company.
The United States was pursuing Meng, the daughter of Huawei’s founder, in a criminal probe related to the violation of sanctions against Iran.
“While the Commerce Department focused its attention on ZTE, this news highlights that Huawei is also violating U.S. law,” Van Hollen said in the statement. “We need a comprehensive plan to hold the Chinese and their state-sponsored entities accountable for gross violations of the law and threats to our security.”
A PUSH INTO PANAMA
China’s top telecom firms are also making inroads in Panama. R. Evan Ellis, a professor of Latin American studies at the U.S. Army War College Strategic Studies Institute, predicts that Huawei and ZTE will be the dominant providers of telecom infrastructure and services in Latin America and the Caribbean, with a “near-monopoly status” eclipsing local providers by 2050.
Such dominance, according to Ellis, would give China “virtually limitless capability to collect business intelligence or appropriate technologies to give an unfair position to PRC-based companies,” he said for a report published by U.S. think tank Center for Strategic and International Studies on Nov. 21.
The two firms’ dominance could also compromise “virtually any military, government, or business leader in the region, to obtain from them valuable political and military intelligence,” he said.
Huawei was even recently awarded a contract for installing a street-level surveillance system with facial recognition cameras linked to a data network based in the city of Colón—allowing the Panama government to mimic China’s mass surveillance system, in which millions of cameras currently monitor citizens throughout the country and have been used to snuff out dissidents. Panama’s system would also be wired to the government offices of defense, migration, fire department, and ambulance service.
Beijing has deployed advanced surveillance technology especially in the region of Xinjiang as part of its efforts to monitor and persecute Uyghur Muslims and other ethnic minorities. The Chinese regime is now exporting its surveillance technologies to other countries.
Many governments around the world, including in the United States and Australia, have raised concerns about equipment and phones made by Huawei and ZTE. The Pentagon issued an order in May to remove all phones from these two companies sold at stores on U.S. military bases, out of concern that those devices could be used to spy on U.S. forces.
China and Panama signed multiple cooperation deals after Chinese leader Xi Jinping’s recent visit to the Central American country. However, experts are voicing concerns that the closer relationship between the two countries could be damaging to Panama’s interests, as well as those of the United States.
Xi arrived in Panama on Dec. 2 for a 24-hour visit, during which he met with Panamanian President Juan Carlos Varela. The two leaders signed 19 cooperation agreements for trade, infrastructure, banking, education, and tourism, according to Reuters. One of the agreements calls for China to provide non-reimbursable aid to Panama for carrying out the different projects; the amount wasn’t disclosed.
Additionally, Varela expressed support for Panama’s continued participation in projects under Beijing’s “One Belt, One Road” (OBOR, also known as Belt and Road) initiative, according to China’s state-run media Global Times. Beijing first announced OBOR, a bid to build up geopolitical influence through trade networks, in 2013. The initiative includes billions of dollars’ worth of investments in countries throughout Asia, Europe, Africa, and Latin America.
Panamanian economist Eddie Tapiero raised concerns about the relationship with China, while speaking at a news program run by Panamanian broadcaster TVN.
“It calls us to be more demanding in areas of transparency, corruption, and the law. If that doesn’t happen, the initiative [with Chinese investment] would not work out” because the money would be squandered, Tapiero said, and efforts “to boost Panama would not happen.”
While Tapiero didn’t elaborate on how corruption might take place, China’s OBOR has been known to foster corruption in countries with weak institutions, while benefiting the Chinese regime and harming local interests. One example involves Malaysia, whose newly elected Prime Minister Mahathir Mohamad canceled some $23 billion worth of OBOR infrastructure projects in August after his predecessor was charged with corruption and money laundering in relation to funding for the projects.
Similar transparency concerns were voiced by Miguel Antonio Bernal, a law professor and a candidate running in Panama’s 2019 presidential election, who said, “[China has] a colonization plan and we don’t have the professional capacity to resist it. We are like an ant wanting to be friends with an elephant,” according to a Dec. 2 article by U.S.-based Spanish-language cable news channel Univision.
Chinese companies have invested heavily in Panama in recent years. For example, in May 2017, China’s Landbridge Group, under the OBOR initiative, was awarded the contract to expand Panama’s largest port, the Colón Container Port, for about $1 billion. The firm began construction in June 2017, according to China’s state-run media.
In July 2018, China’s state-run China Communication Construction and its subsidiary China Harbor Engineering won the bid to construct a new bridge over the Panama Canal, with a $1.42 billion contract.
In an article published Sept. 21, Global Americans, a nonprofit platform that provides news and analysis on Latin America, pointed out several cases of Chinese companies being awarded public contracts under dubious circumstances.
China Harbor Engineering, for example, was awarded the bridge contract following the “unexplained withdrawal of one of the competitors from the bidding process.” Additionally, the company’s final design closely resembled one submitted by the competitor that lost the bid.
Both the United States and China are heavily dependent on the Panama Canal for trade. According to statistics by government agency Panama Canal Authority, in the 2018 fiscal year, the United States was the top user of the canal, with about 68 percent of total trade going to or from the country. China was second, with about 16 percent.
The U.S. congressional committee China Economic and Security Review Commission (USCC), issued a report in October on China’s engagement in Latin America and the Caribbean, warning of the challenges posed by China’s investment in the region. The report concludes that Chinese investment would reduce the United States’ strategic influence in the region, diminish U.S. regional security relationships, and undermine U.S. promotion of international norms such as democracy and fair labor practices.
China is currently constructing port facilities at both ends of the Panama Canal: Port Balboa and the Amado Cruise Terminal near the entrance connecting to the Pacific Ocean; and Panama Colón Container Port at the Atlantic Ocean entrance.
The USCC report includes comments by Navy Adm. Kurt W. Tidd, commander of the U.S. Southern Command, who stated that “increased reach to key global access points like Panama create[s] commercial and security vulnerabilities for the United States.”
The USCC report questions the economic feasibility of some of the Chinese projects, including the $167 million Amado Cruise Terminal, which is “not along any major cruise ship routes.”
This article is part of a special report published by The Epoch Times on Huawei. Click here to see all coverage.
Original Source: Date-stamped: 2018 DEC 13 | Author: by Emel Akan and Frank Fang | Article Title: Exported Tyranny: Telecom Role in the CCP’s One Belt, One Road | Article Link: theepochtimes.com
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Tags: 4cminewswire, CCP, ZTE, Huawei, Qualcomm, Google, Corning, Maduro, Iran, North Korea, Venezuelan, Xi Jinping, Dell Technologies, 4cminews, #4CM2018DEC13
China has been building key government offices and facilities in African countries for decades and fitting them with gear that likely allows the Chinese government to spy on everyone, from presidents and prime ministers to judges and generals and beyond, according to a recent Heritage Foundation report. FULL STORY HERE: https://4cminews.com/?p=52042
The Palace of Justice in the Angolan capital of Luanda was built in 2012, while in the notorious kleptocracy of Equatorial Guinea, the Chinese erected the Ministry of Foreign Affairs building in 2015. And in Zimbabwe, where its former leader, the late Robert Mugabe, once called Chinese leader Xi Jinping “a God-sent person,” China has built the country’s National Defense College and is constructing its parliament, according to the report.
That gives Beijing extraordinary access to gain insights into the most intimate workings of governments across Africa, and to the information that gives China clairvoyant-like powers to adjust its tactics to maximum advantage.
In conjunction with physical assets, China has also built 14 “intra-governmental telecommunication networks,” with Chinese-made systems such as those from Huawei. Meservey expects that those networks are all compromised in favour of China’s intelligence-gathering activities, giving the regime a significant advantage over not only its political and commercial competitors in Africa, but also over host-country officials who may themselves be liable for misdeeds.
The breadth and depth of intelligence coverage China has been able to achieve through its construction projects across Africa is a sign of the continent’s importance to Beijing’s geopolitical strategies, the report points out.
The suspicion that many of these facilities act as listening stations for Beijing is bolstered by two factors.
China has already been caught red-handed vacuuming up years of data from one of Africa’s most important public buildings. In 2018, first Le Monde and then the Financial Times ran stories exposing two systemic security breaches that China had hard-wired into the building it constructed and donated for the African Union’s headquarters in Addis Ababa, Ethiopia.
The first was the discovery that the AU’s servers, also a Chinese gift, were uploading data to servers in Shanghai, nightly from midnight to 2 a.m.
The other breach at the AU was more tactile. A physical inspection of the AU building uncovered listening devices throughout the building.
Aside from the AU case, which offers direct evidence of China’s ability, and, more importantly, its willingness to spy on and compromise a friend, a second factor adds compelling circumstantial evidence to the likelihood that China is spying on Africa through the medium of its building infrastructure there.
That evidence is found in China, where for decades, apartment compounds and hotels were built that exclusively housed foreigners. In most if not all of those facilities, listening equipment was deployed to monitor conversations and movements of residents and guests, according to multiple Chinese Communist Party and foreign business and diplomatic sources. Those compounds include groups of diplomatic apartment buildings in Beijing, as well as hotels operating under major Western European and American brand names.
Indeed, even foreign students in China are known to have found microphones in their dormitories.
The high probability that China is using infrastructure that it builds in Africa to spy on political and business leaders and events should give the United States pause, the report suggests. If the capability to spy in Africa is being used, then it means that China “has better surveillance access to Africa” than any other nation operating on the continent, Meservey writes.
Using that access and the inside knowledge it provides gives China an advantage in competitive commercial negotiations.
It also tips Beijing about who in Africa can be influenced to make decisions favourable to China’s goals, and how to exert and recruit that influence.
But the scope of surveillance isn’t limited to Africans, the report points out. Anyone in a room built or equipped by China can be the subject of Beijing’s listening capabilities, including U.S. and other foreign officials.
Which is why, Meservey advises, “the U.S. should try to complicate Beijing’s surveillance … as part of a strategic response to the CCP’s [Chinese Communist Party] effort to reshape the global order.”
In his May 22 press conference, Zhao Lijian, spokesperson for China’s Foreign Ministry, called the Heritage report’s claims “ridiculous” and “based on nothing but lies, illusions, and ideological bias,” in response to China Daily’s request to comment on the report.
In addition, “African leaders publicly refuted such rumors on multiple occasions,” Zhao said.
The Heritage report anticipated that response.
“Expect little help—and perhaps even resistance—from some African states. Given how adroitly the CCP has built influence in Africa and the many examples of African countries fearing to defy Beijing, the U.S. should not expect these governments to offer much assistance in ameliorating America’s counterintelligence problem in Africa,” the author writes.
In fact, “some, if asked, or in an attempt to curry CCP favour, may even actively collaborate with Beijing to hinder American efforts to protect its interests on the continent.”
Original Source: Date-stamped: 2020 May 24/26 | Author: Bonnie Evans | Article Title: China Building, Bugging Government Offices in African Nations, Report Says | Article Link: theepochtimes.com
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