China’s technology news in 2023’s second quarter covered items including China’s moves into quantum technologies, Huawei’s ongoing challenges and gains internationally, China’s bid to create a standalone semiconductor industry, large-scale Chinese state investments in the global electric vehicles and batteries industries, and many more.
Hit the monthly links below to read Q2 2023 tech news from China, in full, online and at no charge.
in June 2023 | in May 2023 | in April 2023
• Plus: Asia tech daily & Asia tech weekly newsletter >
ASPI: Derisking authoritarian artificial intelligence
China tech quarterly
June 2023
- China’s Xtalpi, AI-driven drug discovery firm, partnered by US pharma giant, Eli Lilly, in deal up to $250M to unearth potential medicines for as-yet undisclosed disease
- China: China Computing Net, national data centre network aiming to pool and centralize the nation’s computing power, adds centres in southern Guangdong, Sichuan and Guizhou
“…thousands of TikTok creators and businesses around the world have given the company sensitive financial information… TikTok has stored that personal financial information on servers in China…”
McKinsey Digital: Technology Trends for 2023 (July edition)
- China: MiniMax reportedly nears $250M funding and valuation near $1.2BN, with AI focus similar to OpenAI ChatGPT and believed to be part-backed by Tencent-related entity
- China’s Mobvoi files for Hong Kong IPO with multiple devices and software products and services built around artificial intelligence
- China Telecom invests $434M in establishing China Telecom Quantum Information Technology Group
“[This] is a practical action to thoroughly study and implement the spirit of General Secretary Xi Jinping’s important instructions on the development of quantum technology,” China Telecom said in the statement.
- China: Baidu search giant sets $140M to fund Chinese startups working in generative AI that are built on Baidu’s Ernie Bot platform, a competitor to OpenAI’s ChatGPT
- ICYMI: Huawei, IPv6 Forum, African Telecommunication Union, Arab Info & Communication Tech Org recently held first IP GALA event aiming to ‘map out future of Internet in Africa region’
Deloitte: China Consumer Insights and Market Outlook White Paper 2023
- China: “…computer manufacturer Powerleader…is fending off allegations that its new central processing unit…is an old Intel chip in disguise, saying it was developed with support from the US chipmaking giant”
- ICYMI: The European Union is considering a mandatory ban on member-states using companies that might pose a security risk in their 5G networks, including China’s Huawei
European Union guidelines adopted two years ago call on its 27 member states to assess the risk profile of suppliers on a national or EU level, and restrict or ban high-risk 5G vendors from core parts of their telecoms networks.
“To date, only 10 of them have used these prerogatives to restrict or exclude high-risk vendors. This is too slow, and it poses a major security risk and exposes the Union’s collective security, since it creates a major dependency for the EU and serious vulnerabilities,” Breton told a press conference.
- China: Greater Bay Technology, subsidiary of state-owned group, claims EV battery tech beating cold weather-induced loss of range, claiming full charge in 6 minutes under all conditions
- China: Sales of semiconductor equipment to China dropped 23% YOY in Q1 2023 amid US export curbs, tho China remains world’s second-largest market for semicon equipment
- China: Jiangsu Xinhua Semiconductor Tech raised $140M Series C, with construction of Inner Mongolia factory scheduled for operation by year-end
CSIS: China’s progress towards space resilience & responsive launch
- Pakistan and China ink MOU for ‘green hydrogen’ project to produce 150,000kg per day from plant using energy from wind and solar farms
- Sequoia Capital’s split into regional firms “…may insulate Sequoia from pending regulation, but it’s also a signal that ties to China are a growing liability in Silicon Valley.”
- Hong Kong gov’t launches court bid to prevent internet platforms from hosting ‘Glory to Hong Kong’ song, lyrics, melody or video, criminalizing those who post
- China: 31 firms, including major ‘supercomputing’ facility, added to US export blacklist, due in part to military and hypersonic missiles research
- China: Huawei wins 52% of China Mobile 5G base station contracts to provide 45,426 stations, with rival ZTE to deliver 23,227 5G base stations
RAND Corp: The political geography of the South China Sea
- ICYMI: Ukraine has formally designated China’s Hikvision and Dahua tech firms “international sponsors of war”, alleging supply of drones and more to Russia, alongside contributing to war budget
- ICYMI: US TikTok ban expands to federal contractors, blocking app use on devices used for official business, regardless of whether owned by gov’t, contractor or employees
“Fund managers said requests for ‘ex-China’ products included the possibility of ‘Asian allies’ funds that would invest in US-friendly markets and provide clear insulation from Beijing-related geopolitical risk…”
- Micron US memory-chip maker to invest $603M in packaging facility in Xian…despite firm being sanctioned as a ‘security risk’ by China tech regulator
- Alibaba Group to make Europe top priority in bid to grow platforms and presence outside China, with European version of TMall e-commerce marketplace in the pipeline
CSET: An examination of China’s cyber ranges
- China: JD e-commerce giant sets 20-year plan for multiple new businesses to net $140BN revenue and $10BN profit
- Italy imposes curbs on Pirelli’s largest shareholder, China’s Sinochem, blocking Chinese government access to sensitive chip tech
Cybercrime: “This is the broadest cyber espionage campaign known to be conducted by a China-nexus threat actor since the mass exploitation of Microsoft Exchange in early 2021…”
- China: CATL to invest $1.4BN in building 2 lithium plants in Bolivia, aiming for 200K tons annually and with investment rising to near $10BN
- France’s L’Oréal launches North Asia Big Bang Beauty Tech & Innovation Challenge, focusing on new beauty products and experiences for and in China, South Korea and Japan
ASPI: State-sponsored Economic Cyber-Espionage for Commercial Purposes
- China: CellX cultivated meat firm gains $6.5M Series A+ funding in pursuit of production at low cost and high scale
- China cloud computing concerns: “…Beijing could use Chinese data centers in the United States and abroad to gain access to sensitive data, echoing concerns about Chinese telecom gear and TikTok…”
“While buying or selling high-end US chips is not illegal in China, US export restrictions have created a de facto underground market with vendors keen not to draw scrutiny from either US or Chinese authorities.”
- China’s Nio electric vehicles firm gains $738M from CYVN Holdings, a smart mobility-focused investment vehicle majority-owned by Abu Dhabi gov’t
- The digital yuan – PRC currency of first resort?: “Just this year, the PBOC counted digital yuan in the official measure of cash in circulation for the first time.”
KPMG Venture Pulse Q2 2023 Report – Asia findings
- A brief look at TikTok’s recently-announced aim to invest billions in SE Asia in the next few years, doubling down on the region’s 630M citizens, half of whom are under 30
- ICYMI: US gov’t reportedly mulls further tech export restrictions to China, specifically on AI-focused chips
“[Oppo] Zeku is a major casualty in China’s campaign to become self-sufficient in…the chip industry… By the time its parent pulled the plug, it was the country’s 5th-largest chip designer…”
- “After a month of avoiding confirmation of its involvement in the Montana lawsuit, TikTok was outed by two of the suing TikTokers, who told the Times that TikTok was paying their legal fees.”
- China faces further tech restrictions with Dutch gov’t adding regulations requiring further licensing for ASML deep ultraviolet semicon gear, with limit on extreme UV machines already in place
Europe: PRC United Front Targeting the Semiconductor Sector
- Sequoia VC to split into 3 entities – Sequoia Capital in the US and Europe, Peak XV Partners in India and SE Asia, and HongShan in China – in response to a changing geopolitical landscape
- China’s TuSimple tests autonomous vehicles in Japan via local subsidiary, noteworthy when considering Japan’s ageing demographic means 45.2% of transportation sector drivers are over 50
- Japan: “…export restrictions on 23 types of chip-related equipment…are set to disrupt China’s semiconductor self-sufficiency plan…The measures require specific permission for…23 types of items…”
- South Korea: Former Samsung exec arrested over theft of factory and clean-room blueprints used in unsuccessful bid to replicate facilities in China
The Decoding China dictionary: Terms, meanings, framing
- Australia: China’s MG EV automaker cuts $6000 from price for MG4 electric vehicle, making it Australia’s first entry-level model under $40K and undercutting rival BYD
- Thailand: GHL, major SEA payments service, partners China’s Alipay+ to enable cross-border e-payments, initially looking at payments from tourists visiting from China, Malaysia, South Korea and Malaysia
- ICYMI: “On 2 separate occasions last year, railroad cars carrying tens of thousands of kilograms…to collectively make at least 80M rounds of ammunition – rumbled across the China-Russia border…”
CSIS: Mapping semiconductor supply chains – Indo-Pacific’s importance
China tech quarterly
May 2023
- China: Galaxy Space preps military applications, aiming for broadband connectivity for satellite constellations to assist hypersonic weapons program
- State-run China Telecom joins generative AI stampede with CTYun cloud unit’s forthcoming release of LLM service
- ICYMI: Canada’s University of Waterloo to end Huawei partnership, citing desire to safeguard scientific research and IP, and with concerns over espionage and foreign interference
- BNP Paribas to partner Bank of China, linking corporate client accounts to digital yuan wallets to integrate in smart contracts, supply chain finance, cross-border payments and more
“…IPv6+ and its forerunner New IP are part of an explicitly political strategy formulated in 2017 by the Ministry of Industry & Info Tech… One focus of the…campaign are African countries.”
- “Only 6 million of 260 million registered users actively paid with the digital [yuan] currency at the end of 2021 – a fraction of the billion devotees that transacted with Wechat and Alipay.”
- China gave 190 chip firms $1.75BN in subsidies in 2022 in move toward self-sufficiency in semiconductor supply, with leading foundry SMIC receiving the largest share at $282M
- China: Reusable uncrewed space vehicle returned to Earth after 276 days in orbit, with complete absence of pictures and technical data raising questions over intentions
- ICYMI: European Union proposes sanctions on companies from China and Hong Kong selling equipment that could be used in weapons to support Russia’s invasion of Ukraine
- China: Supreme Court releases crypto-related dispute guidelines, stating that settling a debt using a small amount of digital assets would be considered legal if both parties agree
World Economic Forum: Quantum Readiness Toolkit
- China: Baidu’s Xiaodu unit to launch a smartphone, possibly featuring AI-driven Ernie Bot
- China: Preparations underway for launch next year of Queqiao 2 satellite to relay communications to and from the moon, supporting Chang’e 6, 7 and 8 robotic lunar missions
- China: Long March 7 rocket with upgraded robotic Tianzhou 6 cargo freighter lifts off from Hainan Island, heading for Tiangong space station on resupply mission
- China: Tongchuan rocket engine ‘test stand’ unveiled in Shaanxi, Asia’s largest for testing liquid-propellant engines and constructed in a cut in a hillside and featuring water deluge cooling
- China’s CellX and South Korea’s The PlantEat among 6 finalists for XPRIZE Feed the Next Billion, a competition focused on alternative proteins
World Economic Forum: Social implications of the Metaverse
- China: Alibaba Cloud unveils CloudVerse ‘metaverse launchpad’, end-to-end platform for companies to customize and maintain metaverse spaces, building on Avalanche smart contracts-focused blockchain
- China: Oppo smartphone maker to close down Zeku chip design division, abandoning internal System-on-Chip design aspirations, citing global smartphone sales slump
- China: Alibaba cancels CTO role, resulting in business groups including cloud, Taobao-Tmall, logistics, global digital commerce may have to apply for or purchase spun-off services
- China: National blockchain research centre launches, with gov’t aiming to train 500K professionals and to connect China’s existing blockchains under a single network
- China Nat’l Space Administration to establish organization to oversee and coordinate construction of a China-led International Lunar Research Station on the moon
World Economic Forum: Global Risks Report 2023
- China: Baidu’s experience editing search results to gov’t regulations prompts confidence AI-driven Ernie Bot will navigate ‘important and sensitive topics’
- A brief intro to the 7 startups partnered by Visa Accelerator Program, focusing on Asia Pacific payments
- China: Xiaoice, AI chatbot brand formerly run by Microsoft, opens applications for 300 individuals to be ‘digitally cloned’ in AI trial, with clones to be operational in July
- China: Dongfang Jingyuan Electron semiconductor software firm mulls 2024 China-based IPO; same firm that may have infringed on Netherlands’ ASML IP and whose chairman faces arrest in the US
- ICYMI: US state of Montana bans use of TikTok, with US$10K fines for entities permitting download of the app, citing need to protect ‘personal and private data from being harvested by the Chinese Communist party’
KPMG Venture Pulse Report Q2 2023 – Asia findings
- China Telecom and Conflux Network public blockchain unveil Blockchain SIM mobile user identification card
- Former Apple engineer charged with theft of confidential self-drive tech, believed to have accepted offer from Baidu-owned EV firm developing similar tech 4 months before leaving Apple
- China: Nio electric vehicle firm reportedly invests in nuclear fusion tech company, now named Neo Fusion, with 50% control for government-owned energy firms and investment arms
- China: Cyberspace Admin rules Micron US chip-maker presents ‘security risks caused by hidden product problems’, instructing critical info infrastructure firms to cease using Micron products
- China: A snapshot overview of 5 of the country’s highest-performing electric car firms – BYD, Nio, Wuling, Xpeng and Zeekr
TeleGeography Submarine Cable Map
- China: Tencent launches WeChat Pay palm-recognition payment in Beijing, allowing rail users to pay by placing hand on scanner which reads palm prints and vein structure
- China: Deepfake scam surfaced in Inner Mongolia in which perpetrator used AI-driven face-swap tech during video call to impersonate victim’s friend, duping a transfer of $622K
- ICYMI: Following China ban on Micron chip-maker, US House of Reps committee chair proposes trade curbs on Changxin Memory Technologies, China’s main Micron competitor
- China: Gotion High Tech battery firm unveils L600 lithium-manganese-iron-phosphate battery, claiming ability to power a range of 1000 kilometers on a single charge
- China: HaomoAI self-driving car firm launches latest generation of low-priced autonomous delivery bot, following April launch of AI-backed DriveGPT
RadWare Live Cyber Threats Map
- China: State-sponsored Volt Typhoon hacking group identified by Microsoft as engaged in activities aimed at disrupting critical infrastructure organizations in the US
- China: Jiangsu to permit digital yuan for education-related payments in public school tuition and accommodation fees, on-campus vendors, and exam registration fees
- China’s Shein online fashion giant reportedly looking to Mexico for manufacturing hub, facing increased US lawmaker scrutiny
- China: Gov’t of Zhengzhou in Henan Province unveil policy proposals to support metaverse firms, including plans for $1.42BN fund
- Singapore: Network for Electronic Transfers payments group partners China’s Alipay+, integrating payment option into SGQR system available to 11000 merchants
“Taiwanese authorities have estimated there are 20 to 40 million attempted cyberattacks every month from Beijing…”
- Malaysia’s proposed revision of nation-wide 5G provision: “Allowing untrusted suppliers in any part of the network also subjects Malaysia’s infrastructure to national security risks.”
- South Korea: SK Hynix chip maker rolls back plans to upgrade memory chip-making tech at China facility in Jiangsu province over sanctions concerns
- India: High Court maintains crime agency seizure of $676M from Xiaomi, seeing evidence of years of remittance payments to foreign entities
- ICYMI: US Commerce Dept opens applications for cities to $500M funding to boost technologies development, part of the $10BN authorization from CHIPS and Science Act
- Thailand: China’s Alipay+ cross-border payments giant announces integration of 4 mobile wallets in Thailand, from Hong Kong, South Korea, Malaysia and mainland China
CSIS: Pulling back the curtain on China’s maritime militia
China tech quarterly
April 2023
- China: Cainiao, Alibaba’s $20BN logistics arm, sets sights on Hong Kong IPO, the first of Alibaba’s 6 recently-calved business units to go public
- “Binance hid substantial links to China for several years, contradicting executives’ claims that the crypto exchange left the country after a clampdown…in late 2017, according to…company documents…”
- China opens new front in US-China tech confrontation with cybersec review of imports from Micron, America’s largest memory-chip maker
- Huawei Cloud Startup Programme launches during Huawei Cloud Summit Middle East & Africa 2023 in Dubai, focusing on SMEs in these emerging markets
The Escalating Global Risk Environment for Submarine Cables
- China: Pinduoduo e-shopping app found to bypass user cell phone security to monitor activities in other apps, check notifications, read private messages and change settings without approval
- “If the yield rate of high-end mobile phones produced in India and Vietnam is now about 50 or 60 per cent, it has to be increased by 200 per cent to approach the current yield rate of Chinese factories…”
- “…companies that have a massive presence in China are going have to deal with the fact that some form of selective economic decoupling is inevitable…”
“New research…found that public charging posts in China are used on average about once a day. Some connectors along highway routes…average utilisation rate of 1%…”
- China: State-owned firms map out $500M Europe-Middle East-Asia subsea cable network in standalone bid following block over concerns re data security, surveillance, sanctioned entity involvement and more
- ICYMI: “China and Russia are in advanced secret talks with Iran to replenish the Islamic Republic’s supply of a key chemical compound used to propel ballistic missiles…a clear violation of UN sanctions…”
- An overview of the many security challenges – and new risks – that arise from a poorly-implemented TikTok ban
- ICYMI: Saudi Aramco to build a $10BN refining and petrochemical complex in China within 3 years, set to process 300K barrels of crude daily, with Aramco supplying 201K of these barrels
Australian Strategic Policy Institute: Critical Technology Tracker
- ICYMI: “…more than half of Putin’s team participating in the first round of formal talks with Xi were officials directly involved in Russia’s weapons and space programs.”
- China: ‘Net regulator releases draft artificial intelligence rules including requirement that ‘generative AI should reflect the core values of socialism’
- BlueFocus marketing agency – China’s top, and 11th globally – to replace 3rd-party copywriters and designers with ChatGPT-like artificial intelligence-driven tech
- China: US-China Economic and Security Review Commission report finds China-based platforms presenting possible data risks, Xinjiang sourcing violations and IP infringements
- China: Cainiao likely to be first Alibaba unit to IPO due to e-commerce logistics firm’s critical importance, locally and globally
- ICYMI: Ukraine places China’s Xiaomi smartphone giant and key executives on ‘international war sponsors’ list over business in Russia
RAND Corp: Political geography of the South China Sea disputes
- China: Guangdong province plans launch of 2nd phase of semiconductor fund of $4.37BN, aiming to develop chips and equipment alongside IPO plans for firms backed
- State-run China Mobile reportedly considering purchase of Hong Kong Broadband Network, HK’s largest telco
- China: Huawei replaces software management systems sourced from US vendors with own MetaERP system, potentially a new product line eventually competing with Oracle and SAP
- TikTok’s wild data collection: “…increased what location information it collects to include altitude, which could tell it what floor of a building a user is on.”
- China: Baidu partners Black Sesame to combine smart driving solutions with Black Sesame system-on-chips to create integrated driving and advisory system, aiming for launch late 2023
World Economic Forum: Global Risks Report 2023
- China: Guangdong province doubles down on semiconductor industry expansion with 40 new projects valued at $74BN
- China: Tech sector regulation set to deepen further with trial project to add chips to delivery e-bikes, aiming in part to address dangerous driving and traffic violations
- China: Changshu city public sector workers to be paid *entirely* in ‘digital yuan’, with every subsequent transaction recorded and traceable in blockchain-based digital ledger
- China: NIO EV firm’s investment arm backs long-established Qingchun Semiconductor silicon carbide chip-maker in bid to secure supply chains
Huawei’s EV issues:
“High-definition maps are very expensive…collecting data in Shanghai for 1 or 2 years, but we still have not been able to cover all 9000 kilometers of the city’s roads.”
- China: WeChat extends central bank ‘digital yuan’ use to payments via its short video and mini-app platforms, from individuals to large-scale brands
- China: Orienspace private space launch firm preps for first launch from mobile sea-based platform, with capability of delivering 6500 kilograms of payload to low Earth orbit
- China: Coal mining automation grows with, for instance, Huawei 5G to reduce underground worker numbers, replacing them with machines directed from ‘virtual mines’ run from the surface
- Japan: Alibaba Cloud to open blockchain ‘laboratory’ in Shibuya to focus on Japanese game developers working in Web3
- Singapore: SMRT Strides, arm of the largest public transport operator, inks MOU with China’s WeRide to test autonomous driving solutions in Singapore
CheckPoint Live Cyber Threat Map
- Japan to restrict exports of 23 types of semiconductor manufacturing equipment, aligning with US advanced chip controls
- Vietnam joins list of countries scrutinizing TikTok, with communications ministry to inspect the firm’s approach to harmful content
- Taiwan: Foxconn’s billionaire founder announces intention to seek presidential nomination with Kuomintang, running in opposition to current president Tsai’s Democratic Progressive Party
- “But Russia has continued to acquire chips through circuitous routes, with a large portion flowing through small traders in Hong Kong and mainland China.”
“Taiwan…chipmaking machine exports to the US [rose] 42.6% in March from a year earlier, reaching a new high of $71.3M…Exports to China…plummeted 33.7%, marking the 9th straight month of decline.”
- Australia to move up critical minerals value chain with new metals processing facility planned for WA, building on existing supply of near half of world lithium supply
- Hong Kong and Hangzhou ink MOUs around cooperation in and promotion of digital trade and Web3 technologies
- Australian Defence Force found to be using DJI drones, a company sanctioned by the US, leading to calls for government-wide policy on use of tech from suppliers deemed to be high-risk
- ICYMI: “Officials from Rome’s industry ministry discussed…cooperation on the production and export of semiconductors during recent meetings in Taipei…that Italy may scrap its participation in China’s Belt and Road…”
In Australia: “Everything that we fear about what TikTok may become already is occurring on WeChat…narratives are managed, information is managed, dissenting views are demoted or eliminated…”
- Thailand: China’s Changan Auto to commence EV production in Thailand, its first outside China, with initial $285M investment in facilities and plans for additional $581M over 4 years
- India: Gov’t Enforcement Directorate investigates Odaclass online education firm over illegal for-ex transfers, finding ownership via ‘entities having ultimate controlling company in Cayman Islands’
CSET: Mapping emerging technologies and their supply chains
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