Tag: china

Blacklisted Huawei posts record profits despite U.S. sanctions — Chinese tech giant raked in $7.7B in net profit in 1H 2024

As a high-tech giant whose capabilities span from ‘almost’ fundamental research to end-user consumer products, Huawei has been targeted by the U.S. government’s sanctions for quite a while amid suspicions of ties with the Chinese military. However, according to data from the Chinese Business Network (CBN), the company has adapted to sanctions as its consumer business revived in the first half of the year.

Before we dive into details, which are hard to do without knowledge of what we do know so far, we should know that what we do know is based on third-party reports.

Huawei’s revenue for the first half of 2024 reached CNY 417.5 billion, representing a 34.3% increase compared to last year. The company also achieved a net profit of CNY 55.1 billion, an 18.2% year-on-year rise, marking the best performance in its history for this period. These record figures show that after the U.S. started to impose sanctions against Huawei in mid-2020, its business took a significant hit, so, before 2024, the company’s record financial results were achieved in the first half of 2020.

Huawei’s revenue for the first half of the year exceeded the CNY 401.3 billion reported in the first half of 2019 and is second only to the CNY 454 billion posted in the first half of 2020.

Furthermore, this is the first time that Huawei’s net profit for the first half of the year has exceeded CNY 50 billion (up from CNY 46.6 billion last year), with the profit margin reaching 13.2%.

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Military Threat: China’s AI Robots

Last week, the Chinese Communist Party (CCP) organized the World Robot Conference – where they showcased the latest advancements that China’s robotics industry has produced over the past several years.

According to the CCP, China’s humanoid robots are “catching up fast with global rivals,” with advances such as the incorporation of AI into some of its robots that have military capabilities.

We’re picturing mindless robot patrols enforcing the next ‘welded in’ pandemic lockdown, with deadl(ier) results.

As Anders Corr notes in The Epoch Times, China’s humanoid robots on display at the conference could easily be equipped with weapons and probably already have been. The People’s Liberation Army has demonstrated armed flying drones and quadruped AI robots that resemble dogs with machine guns mounted to their backs. The killer robot dogs can reportedly fire their weapons autonomously.

China’s rapid rise in robotics is state-directed and subsidized to the tune of over $1.4 billion, according to an official announcement in 2023. In 2012, China installed fewer than 15 percent of industrial robots globally. By 2022, that number increased to over 50 percent, with China installing over 250,000, the most in the world. By comparison, Japan and the United States installed just about 50,000 and 40,000, respectively.

In 2016, a Chinese company bought Germany’s Kuka, one of the world’s three leading industrial robot makers. The other two are Japan’s Fanuc and Switzerland’s ABB. Tesla is also a leading robot maker. It plans to deploy 1,000 humanoid Optimus robots in Tesla factories in 2025. Given the close connections of all four of these companies to China, there is a significant risk of technology transfers and IP theft, further driving China’s rapid rise in the robotics space.

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RFID cards could turn into a global security mess after discovery of hardware backdoor

WTF?! Chinese-made chips used in popular contactless cards contain hardware backdoors that are easy to exploit. These chips are compatible with the proprietary Mifare protocol developed by Philips spin-off NXP Semiconductors and are inherently “intrinsically broken,” regardless of the card’s brand.

Security researchers at Quarkslab have discovered a backdoor in millions of RFID cards developed by Shanghai Fudan Microelectronics (FMSH). When properly exploited, this backdoor could be used to quickly clone contactless smart cards that regulate access to office buildings and hotel rooms worldwide.

According to French researchers, “Mifare Classic” cards are widely used but have significant security vulnerabilities. These chip-based contactless cards have been targeted by various attacks over the years and remain vulnerable despite the introduction of updated versions.

In 2020, Shanghai Fudan released a new variant that provides a compatible (and likely cheaper) RFID technology through the Mifare-compatible FM11RF08S chip. It featured several countermeasures designed to thwart known card-only attacks, but introduced its own security issues.

Quarkslab analyst Philippe Teuwen discovered an attack capable of cracking FM11RF08S “sector keys” within a few minutes, but only if a specific key is reused across at least three sectors or three cards.

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What Future for U.S.-China Science and Technology Collaboration?

On Tuesday this week the U.S.-China Science and Technology Agreement (STA) is due to expire unless the U.S. and China can agree on its extension. Today I provide some background on the agreement, why it is now being debated, and my view on what should happen next.

STAs are a common tool of science diplomacy. The U.S. has more than 60 STAs with countries around the world, overseen by the State Department, which explains:

These agreements, and their associated expert meetings, strengthen international cooperation in scientific areas aligned with American interests, ensure open data practices, promote reciprocity, extend U.S. norms and principles, and protect American intellectual property.

We recognize that not every country shares American values – in fact, some attempt to illicitly acquire America’s intellectual property and proprietary information. As such, STC works with foreign allies and federally funded scientists to ensure the United States rightfully reaps the benefits of international science and technology cooperation and that those with whom we cooperate adhere to the rules-based order. STC monitors worldwide trends in science and technology to retain U.S. advantages over strategic competitors and improve our understanding of how they may influence—or undermine—American strategies and programs.

According to a 2021 study, at that time China had 52 STAs and 64 other cooperative agreements with countries around the world. “Science diplomacy” is low hanging diplomatic fruit for both the U.S. and for China.

The U.S.-China STA was first signed in 1979 and originally emphasized agricultural research and development. The STA was the first agreement between the countries following the normalization of relations in January of that year.

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American Pharmaceutical Companies Accused of Carrying Out Clinical Trials With Chinese Military

A bipartisan House committee has revealed that American pharmaceutical companies carried out drug trials in conjunction with the Chinese military for more than 10 years.

The revelation came in a letter penned by Republican and Democratic leaders on the House Select Committee on the Chinese Communist Party (CCP) to the commissioner of the Food and Drug Administration (FDA), Robert Califf. In the letter, they pressed him to supply information about these clinical trials for new medications.

In their letter, they explained: “These collaborative research activities raise serious concerns that critical Intellectual Property is at risk of being transferred to the [Chinese military] or being co-opted under the People’s Republic of China’s National Security Law.”

They also expressed reservations about how much the results of clinical trials produced by China can be trusted.

The letter states that hundreds of clinical trials for drugs have been carried out at medical centers and hospitals in China that are affiliated with the People’s Liberation Army (PLA) at sites such as the PLA’s Air Force Medical University and the PLA’s General Hospital and Medical School.

One of the institutions is operated by the PLA’s Academy of Military Medical Sciences, an institution which the Department of Commerce has banned businesses in the United States from sharing technology with due to national security concerns.

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Russia China and Iran Are Being Patient…

It has become clear that with the lack of response from Iran (so far) over the assassination of Ismail Haniyeh the political leader of Hamas, that in conjunction with Russia and China a common approach has been taken not to be responsible, or even seen to be responsible in the West, for precipitating an all-out military conflict.

We see this approach with Russia’s Special Military Operation as well. Russia is careful to contain it between Russia and Ukraine, despite NATO’s involvement in the provision of modern equipment and personnel to Ukraine, and Ukraine’s deep strikes into Russian territory.

Russia is completely surrounded on her western flank by NATO forces, threatening Russia with a full-scale attack and invasion. All that’s needed is an excuse. To ensure the western border coverage is total, America leaned heavily on Finland and Sweden to join NATO, breaking their long-standing policies of neutrality. Who knows what threats the Americans made to force them to accept and provide weapons and military bases targeting Russia from their territories.

Europeans should be extremely concerned about this, because the Americans don’t care much about collateral damage so long as it is not in America. It was the US’s determination to punish Sadam Hussein, Gaddafi, Assad, and the Taliban in the wake of 9/11 which led to a flood of refugees in Europe. But that’s not America’s problem, and presumably nor will it be if the Europeans get nuked. So long as it’s not US civilians.

That the Europeans, including formally neutral Swedes and Fins have fallen for it says more about their pusillanimity in the face of US diplomatic aggression than anything else. They are cannon fodder for the US’s determination to break up Russia. But in Putin, America has an adversary who demonstrates statecraft and strategic cunning over impetuousness.

In the Middle East, Israel is frightened for its very existence. Netanyahu wants to provoke Iran and her proxies into a confrontation to bring America into direct conflict on her side. Officially, the US is resisting involvement but is reported to have sent a naval fleet to the Eastern Mediterranean signalling that she will back Israel against Iran if necessary.

But the Asian partnership is playing a different game. They are acutely aware that America is looking for excuses for military action in Europe. As the pressure mounts, Russia, Iran, China and even North Korea will have to find alternatives to military action designed to cripple the western alliance.

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Israel launches violent raids on southern Lebanon as China urges nationals to leave

Israeli forces intensified their cross-border attacks on Lebanon overnight Wednesday-Thursday with a series of 10 raids across eight different southern areas within 45 minutes, Lebanese media reported on Thursday.

The attacks took place around 1am local time, according to security sources, adding that the strikes targeted and destroyed several buildings in the Khiam, Kfarchouba, Mhaybib, Aita al-Chaab, Ghazziye, Ramiye, and Kaouthraiyet al-Sayyed, villages that lie about 30 kilometres (18.6 miles) past the Blue Line. No casualties were reported.

The Israeli military said that its air forces had hit more than 10 “Hezbollah targets” in different areas in southern Lebanon.

The army claimed on X that “among the targets attacked were weapons depots, military buildings, and a launcher used by Hezbollah to carry out operations against Israel”.

Meanwhile, Hezbollah announced it had targeted Israeli army barracks in northern Israel.

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How Taiwan Became an Issue

Given that official Washington seems increasingly determined to fight Beijing over Taiwan, concerned Americans are right to wonder: how did the question of Taiwan come to be of such purported importance to these global powers?

While several closer islands, such as the Penghu (or the Pescadores as they are now known), were incorporated into the Chinese polity during the period of Ming blue water exploration in the fourteenth and fifteenth centuries, Formosa (or Taiwan as it came to be known) never was.

After shuttering its large scale naval activities in the mid-fifteenth century, the Ming were thereafter largely content to let the rival trading companies of the Portuguese and Dutch quarrel for influence on Formosa, where trade revolved around tea and camphor.

In an odd bit of history repeating itself, the island first became a central focus of a ruling mainland Chinese regime as a result of a civil war that needed concluding: displaced by the invading Manchurian forces (the eventual Qing), in 1661 what remained of the Han, Ming ruling clique retreated to Formosa. It was following their ultimate defeat in 1683 that Formosa started to become ethically and administratively integrated into China (a process completed around a century later).

Despite its import as a trading hub in the centuries thereafter, when the Japanese took possession of Formosa at the end of the First Sino-Japanese War (1894-95), per the terms of the Treaty Shimonoseki (1885), the island’s new rulers found a society, economy, and polity virtually untouched by modernity.

And while initially brutal, putting down an anti-Japanese insurgency of emigre Han Chinese and native Taiwanese, the Japanese colonial administration of the island, which lasted until the end of World War II, would see the island transformed into an educated, urbanized, and rationalized society with living standards far higher than on the mainland.

Despite the increasing gap, most Taiwanese, whose cultural links with the mainland were still strong, were open to rejoining mainland China when the war finally ended—although it is worth noting that this willingness proved short-lived, the Kuomintang (KMT) regime needing to viciously suppress a mass uprising against its terrible misrule in 1947.

President Franklin D. Roosevelt, at whose feet a great deal of blame for a whole host of problems may be laid, also laid the foundation stone for misadventure in dealing with China, including Taiwan.

Indeed, while there was a reasonable possibility that Taiwan could have been its own independent country at the end of the Second World War, it was FDR and his successor, Harry Truman, who ensured this would not happen.

Ignoring the wisdom of multiple of his predecessors, who had refused to get involved either in internal Chinese squabbles or its feuds with neighboring Japan, FDR began supporting the KMT regime of Chiang Kai-Shek.

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Why The U.S. Faces Chinese Dominance For Critical Energy Minerals

More than three years ago, in May 2021, I wrote a piece here detailing the importance of a relatively obscure mineral, antimony, to the ultimate success of alternative energy sources like wind and solar and electric vehicles, and thus to the progress of the energy transition itself.

Even more pressing is the fact that antimony is critical to the needs of major weapon systems used by the U.S. military. The piece also discussed the urgent need for policymakers to find ways to speed up the permitting processes for mining of this and an array of other critical energy minerals if the United States were to avoid becoming almost wholly dependent on China for its future energy needs.

The story was focused on the struggles of Perpetua Resources, a mining company that had at the time struggled for over a decade to obtain the needed local, state, and federal permits to mine a long-known major resource of antimony at the Stibnite mine in Idaho. Stibnite is a long-ago abandoned gold mining operation that Perpetua says it could quickly place into antimony production once all the needed permits are secured.

Since that time, West Virginia Sen. Joe Manchin and fellow sponsors have tried to move federal permitting reform bills in both 2022, and again this year. The 2022 bill failed in the face of bipartisan opposition, and this year’s effort currently seems doomed to the same fate. It must seem to Sen. Manchin that no one in Washington, D.C., other than himself and a handful of fellow members of congress, is serious about getting anything real done on this pressing issue that is essential to the entire energy transition effort.

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China’s Restrictions on Antimony Exports Could Cripple US Military-Industrial Complex: Here’s Why

China has slapped export controls on antimony metals, ores and oxides effective September 15. Companies seeking to export these materials will have to apply for export licenses for dual-use products. That’s bad news for resource import-dependent American arms manufacturers.

In its explanation of last Thursday’s decision to introduce export controls on antimony, China’s Commerce Ministry said the measure was not aimed against any country, but at assuring China’s national security and fulfilling the PRC’s “non-proliferation obligations.” But with China accounting for nearly half of global antimony ore production in 2023, and the US a top buyer, it’s not hard to discern who the restrictions may hit the hardest.

The US International Trade Commission considers antimony “critical to economic and national security – similar to rare earth elements, plus cobalt and uranium.” US business media have described it as “the most important mineral you never heard of.”

That’s because in addition to a long list of civilian uses ranging from flame retardants, lead-acid batteries, and plastics, to ceramics, consumer electronics and safety clothing, antimony has a dizzying array of military applications, from armor-piercing bullets and tracer ammo to night vision goggles, laser sights, communications equipment and even components in nuclear weapons.

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