Apple can make US-bound iPhones outside of China if necessary – Engadget

Apple can make US-bound iPhones outside of China if necessary – Engadget

China reportedly met with tech companies in recent days, telling them not to comply with US orders that would dramatically affect their Chinese manufacturing plans. It allegedly threatened serious consequences, although it didn’t outline what those were.

The safety net could be vital for Apple, not to mention for millions of people who could suddenly be cut off from future iPhones. However, this doesn’t guarantee that Apple or other companies would be safe. Even if Apple can keep relying on Foxconn outside of China, some of its individual component suppliers are still located in the region — there could be trouble if any of those partners are cut off. And even a quick transition could still choke production at a critical moment if it happens anywhere near the release of new iPhones. While Apple might avoid the worst, its situation could still be far from ideal.

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Commerce Secretary Wilbur Ross predicts Trump and China will reach a trade deal — ‘even shooting wars end in negotiations’ – CNBC

Commerce Secretary Wilbur Ross predicts Trump and China will reach a trade deal — ‘even shooting wars end in negotiations’ – CNBC

Commerce Secretary Wilbur Ross predicted on Tuesday that the U.S. and China will successfully negotiate a trade deal.

“Eventually, this will end in negotiation,” Ross said on CNBC’s “Squawk Box.” “Even shooting wars end in negotiations.”

With questions circulating about whether President Donald Trump and Chinese leader Xi Jinping would meet on trade at the G-20 meeting later this month, the U.S. president told CNBC on Monday he would place additional tariffs on Chinese goods if Xi does not attend.

“The China deal is going to work out. You know why? Because of tariffs,” Trump said in a “Squawk Box” call with CNBC’s Joe Kernen. “Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs.”

Ross, who has spoken out in favor of Trump’s tariff strategy, warned that trade deals are not made at summits. He said any talks between Trump and Xi would lay the groundwork for a possible agreement.

In May, Trump increased tariff rates on $200 billion worth of Chinese goods and threatened to put levies on another $300 billion, effectively the rest of China’s imports in the United States.

An agreement with China would have to fix all the violations that the U.S. alleges, otherwise making a deal would not make any sense, said Ross, who before joining the White House, made a fortune in the investment world, running W.L. Ross & Co., and buying stakes in distressed assets.

“Either we will collect more and more tariffs on more and more products or we’ll back an arrangement with them,” Ross said, while warning investors not to get too “trigger happy” when Trump threatens tariffs.

After the president warned Mexico on May 30 that he would put a 5% tariff on all Mexican goods if they did not take actions to help curb undocumented migrants from coming into the U.S., Ross said that “people were getting hysterical” and the markets got “a little too jumpy.” The day after the proposed tariffs were announced, the Dow Jones Industrial Average plunged more than 350 points.

“Judge this administration by results,” Ross said. “Don’t judge it by interim soundbites.” Late Friday, the president called off the Mexico tariffs, saying the U.S. and Mexico agreed to follow through on earlier concessions it had made on immigration.

In Monday’s CNBC interview, Trump said the deal came together in just two days because Mexico’s leaders knew the alternative would have been worse.

“We got everything we wanted and we’re going to be a great partner to Mexico now because now they respect us,” Trump said. “They didn’t even respect us. They couldn’t believe how stupid we were with everything that’s going on where somebody comes in from Mexico and just walks right into our country and we’re powerless to do anything.”

Watch the full CNBC interview with Commerce Secretary Wilbur Ross

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China dreams on hold: heartland city feels chill of economic slowdown

China dreams on hold: heartland city feels chill of economic slowdown

ZHENGZHOU, China (Reuters) – For the last decade, the city of Zhengzhou has been getting a taste of the Chinese dream.

Fueled by investment, including large subsidies from the central government in Beijing, the provincial capital of the inland province of Henan has boomed.

Once an impoverished city of 10 million set between the Yellow and Yangtze rivers, Zhengzhou now boasts a gleaming downtown skyline and a cascade of freeway overpasses. An upgraded rail network has helped turn the city into a logistics hub, linking China’s output with overland shipments to Europe as part of the Belt and Road initiative.

The Apple supplier Foxconn built the world’s largest iPhone factory in Zhengzhou.

For many across Henan, a province of 100 million people, Zhenghzou has become a symbol of achievement and opportunity in China’s hinterland – a magnet for those leaving pig farms and wheat fields in search of better lives.

Personal incomes in Zhengzhou over the past decade have doubled on average, hitting 33,105 yuan ($4,791) last year. That has allowed many residents a taste of middle class life; consumer appliances, luxury goods and apartments of their own.

Automakers like GM, Honda and Nissan, and consumer brands like Christian Dior and Cartier, have taken note, betting that rising incomes in cities like Zhengzhou will open new and expanding markets for them.

But an economic slowdown that began in late 2018 appears to have accentuated uncertainties in the city. With momentum slowing across the board from real estate to the consumer and tech sectors, some here feel their chances of moving up the social ladder have diminished as the cost of living outpaces income growth. Once abundant opportunities now seem to be drying up.

Reuters reporters traveled to Zhengzhou in late 2018 and early 2019 to talk to dozens of business owners, consumers and people hoping to buy homes. Many expressed anxiety or doubts about their ability to hold on to or achieve the dreams of prosperity promised by President Xi Jinping.

These are three of their stories.

They indicate how hard it will be for China to build a new foundation for the economy of its future in inland provinces like Henan, and are a reality check for global retailers searching for lucrative new markets.

THE ENTREPRENEUR

For as long as he can remember, Gong Tao wanted nothing more than to become an entrepreneur like his father.

A traveling salesman of Chinese calligraphy brushes, his father eked out a living crisscrossing Henan to provide for the family, while imbuing in Gong the value of hard work.

Fresh out of university, Gong set up a venture in Zhengzhou in 2014 to digitally etch photos onto metal prints for customers commemorating special occasions.

Two years later, and still only 24, he pivoted into the booming online economy, creating a start-up that helped clients design programs for WeChat, the ubiquitous Chinese social media platform.

Business was good, and buoyed by the frothy tech scene and government policies supporting entrepreneurs, Gong expanded aggressively, splashing out on office renovations and new furniture. He employed as many as 70 staff. But then a flood of cheaper competitors undercut his business just as the Chinese economy started slowing last year.

“We didn’t anticipate the market would fall off a cliff,” the soft-spoken Gong, now 26, told Reuters in a fast-food outlet in downtown Zhengzhou. He said he had drastically cut back spending on clothes and stopped eating out.

“For the whole of 2017, business was flourishing, things were pretty good, and then all of sudden in 2018 it was flatlining,” he said.

Last October, Gong took the advice of a mentor who suggested he wind up his business and wait out the downturn. He landed a sales job at a subsidiary of one of China’s largest e-commerce firms but swiftly became disillusioned with the monotony and low pay, and decided against returning to work after Chinese New Year in February.

Gong laments not buying an apartment before prices began to spike dramatically three years ago, even though prices have been easing recently, and the fact his relationship with his then girlfriend unraveled as his business did.

He hasn’t given up on his lifelong aspiration of running his own business, but says he needs to be realistic and is trying to come to terms with having to get a regular office job for now.

“The reality is very cruel,” he says.

Fisherman Sun Lianxi sits in his boat as he travels down the Yellow River to cast his net on the northern outskirts of Zhengzhou, Henan province, China, February 21, 2019. Picture taken February 21, 2019. REUTERS/Thomas Peter

THE GRADUATE

With a telecommunications degree from a top Beijing university, a foothold in the Zhengzhou property market and marriage in the offing, all by the age of 26, Wu Shuang would normally be seen as a winner by many Chinese.

But in interviews, Wu described a relentless anxiety weighing on him and his peers in Zhengzhou.

The two-million-yuan apartment Wu bought in 2017 depleted most of his family’s savings and left him with over 8,000 yuan in monthly mortgage payments.

After quitting an office job at a state-owned company last year which he described as dull and badly-paid, he also had to shelve plans for opening a bar in Zhengzhou after his partners pulled out as a spending slump hit the city.

“It’s not just house prices, it’s not just that it’s hard to find a job,” said Wu, moon-faced with black-rimmed glasses. “Right now it feels like, because the economy is slowing, there are just a lot fewer opportunities.”

For many young people, the China dream of finding a prestigious job, getting married by a certain age and buying a home felt out of reach, he said.

As property prices soar, in particular, many are forced to rely on their parents financially well into adulthood, he said, a practice known as kenlao, or “gnawing on elders”.

Wu said his parents had helped with the deposit and monthly loan payments on the apartment he bought, an arrangement that makes him uneasy, especially as his parents are not wealthy.

“A lot of people feel powerless because those who are enjoying the good life, most of them are doing so not because of themselves, but because of their family,” Wu said over an iced coffee at a bustling cafe in Zhengdong, Zhengzhou’s new commercial district.

“Your salaries may not differ too much but because of your family background you may have a lot less choices in life.”

THE FISHERMEN

Further down China’s social ladder, many feel left behind and unable to improve their lives through just hard work.

For generations, the Suns plied their fishing boats up and down the Huai and Yellow Rivers, living off their daily catch. Like their grandfather and father before them, brothers Sun Genxi, 44, and Sun Lianxi, 32, were born on a fishing boat.

China’s economic ascent has tantalized the brothers.

From their floating vantage point on the Yellow River, about an hour’s drive north of central Zhengzhou, they have gawped at the provincial capital’s dramatic development.

“These high-rise buildings have nothing to do with me. They’re for others, not me,” Lianxi says. “We don’t have any part in it.”

The Sun brothers had no fixed abode for most of their lives, dropping anchor wherever the best haul took them. About a decade ago, they settled by the Yellow River on the northern fringes of Zhengzhou, so Genxi’s eldest daughter could go to school.

They want their children to complete school, and the first to break from the long line of fishermen in their family.

“If you don’t study hard, my today is your tomorrow,” Genxi, who is illiterate, tells his daughter, now close to completing high school.

The Suns were owners of a large houseboat, enough to accommodate their clan of 17 spanning four generations under one weather-beaten roof. The boat also served as a floating restaurant, serving freshly braised fish to day-trippers cruising the Yellow River on the outskirts of Zhengzhou.

But as part of a broad-ranging environmental crackdown, local authorities in 2017 took over the houseboat in the name of minimizing water pollution and over-fishing.

The Suns now live in tents of tarpaulin and plastic sheets by a floating bridge on the banks of the Yellow River, reduced to fishing from a small dinghy.

“My dream is to have a place to live. My family can all live in the house and I can go work for others and stop fishing,” said Sun Lianxi.

Slideshow (2 Images)

“Now even having a life like that is a luxury.”

($1 = 6.9104 Chinese yuan renminbi)

Reporting by Philip Wen, Stella Qiu and Yawen Chen; Editing by Tony Munroe and Philip McClellan

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Huawei’s $105 billion business at stake after U.S. broadside

Huawei’s $105 billion business at stake after U.S. broadside

By Sijia Jiang and Michael Martina

HONG KONG/BEIJING (Reuters) – The latest U.S. broadside against Huawei that puts the Chinese firm on an exports blacklist threatens to rattle the global tech supply chain, linked closely to the $105 billion business of the world’s top supplier of telecoms network equipment.

The Trump administration has said it would add Huawei Technologies and 70 affiliates to its “Entity List” – a move that will likely ban the firm from acquiring U.S. components and technology without government approval, adding another incendiary element to the U.S.-China trade war.

The ban is not yet effective.

A similar U.S. ban on China’s ZTE Corp had almost crippled business for the smaller Huawei rival early last year before the curb was lifted.

Such sanctions on Huawei are, however, likely to have ramifications beyond the company itself, analysts said.

It would disrupt Huawei’s business at a minimum and all but put it out of business in an extreme, while its U.S. suppliers would also be hit, they said.

Out of $70 billion Huawei spent for component procurement in 2018, some $11 billion went to U.S. firms including Qualcomm, Intel Corp and Micron Technology Inc, and they could see that revenue disappear.

On the other hand, U.S. companies like Apple face the risk of severe retaliation from China, a key market.

“This is going to be very messy,” a China-based source at a U.S. tech company said.

It will be tough for Huawei too, the person said, noting none of its U.S. suppliers “can be replaced by Chinese ones, not within a few years, at least. By then, they are already dead”.

Revenue for the company, also the world’s second-biggest maker of smartphones, touched 721 billion yuan ($105 billion) last year, eight times ZTE’s and half the annual sales of South Korea’s Samsung Electronics Co.

But its business has come under pressure over the past year given mounting international scrutiny, led by U.S. allegations that its equipment could be used by Beijing for spying, a concern the company has said is unfounded.

STOCKPILING

A range of Asian and European suppliers would also be hurt if Huawei was forced to curb production, while telecom carriers that rely on Huawei, and have largely resisted U.S. calls to bar the company, would be left scrambling just as countries race to roll out next-generation 5G mobile networks.

“Huawei being unable to manufacture network servers, for example, because they can’t get key U.S. components would mean they also stop buying parts from other countries altogether,” said an executive at a Huawei chip supplier.

“They can relatively better manage component sourcing for mobile phones because they have their own component businesses for smartphones. But server and network, it’s a different story,” the executive said.

According to brokerage Jefferies, the sanctions would mean a “nightmare for China’s 5G” too. The country, which is targeting a nationwide rollout next year, will very likely slow down its 5G push as a result, it added.

However, industry participants pointed out that Huawei had been stockpiling components such as chips to ease disruptions.

Its initial target was to build inventories of six to nine months, and it has recently been raised to 12 and, in some cases, 24 months, Jefferies said.

Shares in Huawei suppliers fell across in Asia on the news of the U.S. blacklist.

South Korea’s Samsung dropped 2.4%, SK Hynix fell 3.5%, while China’s Luxshare Precision Industry fell as much as 6.1%. Shares in ZTE also tumbled.

Huawei has said it is “ready and willing to engage with the U.S. government and come up with effective measures to ensure product security”.

Its rotating Chairman Eric Xu also told Reuters in a recent interview that “in case of unforeseen events … we definitely have our contingency plan. What we have prepared has already been used in some of our products in the Chinese market”.

Huawei has spearheaded China’s campaign to develop its own high-end technologies to reduce reliance on imports and such efforts have taken on urgency after U.S. sanctions on ZTE.

The ZTE case led to some “benefits” and “external pressures have developed into internal drivers” in China, said Wan Gang, vice chairman of China’s parliamentary advisory body.

TRADE TALKS

The pain for Huawei’s supply chain would be redoubled if the trade war put a damper on the Chinese technology industry.

“The bigger concern would be U.S. allies that used to buy Huawei’s components may not continue businesses with Huawei, because of fear of possibly upsetting the United States,” said Doh Hyun-woo, an analyst at NH Investment & Securities in Seoul.

The Trump administration’s rhetoric toward China had cooled in recent days after another round of tariffs between the world’s top two economies and a selloff on global stock markets.

Tensions escalated on Wednesday after U.S. President Donald Trump signed an executive order barring American companies from using telecommunications equipment made by firms deemed to pose a national security risk.

While the president’s order did not specifically name any country or company, U.S. officials have previously labelled Huawei a “threat”.

“The U.S. seems to have already decided to nail Huawei down,” said the China-based U.S. tech company source.

“The problem is that because there doesn’t seem to be a prospect for a trade deal in the near future, the U.S. has expedited the process of killing Huawei.”

($1 = 6.8776 Chinese yuan)

(Reporting by Sijia Jiang in Hong Kong, Josh Horwitz in Shanghai, Ju-min Park and Heekyong Yang in Seoul, Michael Martina and Cate Cadell in Beijing, Makiko Yamazaki in Tokyo; Writing Miyoung Kim; Editing by Himani Sarkar)

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Your Monday Briefing

Your Monday Briefing

Chris Stanford

(Want to get this briefing by email? Here’s the sign-up.)

Good morning,

We’re covering the spread of Ebola in eastern Congo, an investigation of New York City’s taxi industry and the “Game of Thrones” finale.

Image

A patient receiving care at an Ebola treatment center in Katwa, Democratic Republic of Congo, on Tuesday, hours after the center was attacked by armed militiamen.CreditFinbarr O’Reilly for The New York Times

In the past two months, an Ebola outbreak in the Democratic Republic of Congo has become the second-largest ever recorded. More than 1,100 people have died, according to the World Health Organization, although aid groups say the death toll is far higher.

After some early success, including a new vaccine, efforts to combat the epidemic have been hobbled by attacks on treatment centers and health workers, and by mistrust of the government and international medical experts.

When treatment centers were attacked and a doctor killed, front-line health workers suspended their work. Some aid groups have pulled personnel from areas where Ebola has hit hardest.

Quotable: “The new protocol is that we just abandon the body,” said a member of one Ebola response team. “They will learn their lesson when they get sick.”


Anti-money-laundering specialists at Deutsche Bank recommended in 2016 and 2017 that transactions connected to President Trump and his son-in-law, Jared Kushner, be reported to a federal financial crimes watchdog.

But executives at the German bank, which has lent billions of dollars to the Trump and Kushner companies, never filed employees’ reports with the government. The employees said it was part of a pattern of executives rejecting reports to protect relationships with lucrative clients.

How we know: Five current and former bank employees detailed the cases, which involved transactions that set off alerts in a computer system designed to detect illicit activity. At least some of those transactions involved money flowing back and forth overseas. (Red flags do not necessarily make the transactions improper: Real estate developers like Mr. Trump and Mr. Kushner sometimes do large, all-cash deals, including with people outside the U.S.)

Response: A spokeswoman for the Trump Organization said the family businesses had “no knowledge of any ‘flagged’ transactions with Deutsche Bank.”

Background: Deutsche Bank was the only mainstream financial institution that remained consistently willing to do business with Mr. Trump. That relationship is under investigation, and the president has sued to block the bank from complying with congressional subpoenas.


The Environmental Protection Agency plans to adopt a method for projecting the health risks of air pollution that would lower its estimate of premature deaths under a proposed rule on emissions from coal plants.

The methodology, which five current or former agency officials described to The Times, could be used by the Trump administration to defend further rollbacks of air pollution rules.

It’s not unusual for an administration to use accounting changes to make its decisions look better, but experts said the new method has never been peer-reviewed and is not scientifically sound.

Response: William Wehrun, the E.P.A. air quality chief, said in an interview that the new method would be part of the agency’s final analysis of the Affordable Clean Energy rule, which is expected next month.


Image

Many Australians fear China but also favor good relations to maintain economic growth and regional stability.CreditDavid Gray/Reuters

Australia, which has a growing ethnic Chinese population and strong economic ties to China, has become a case study in Beijing’s attempts to steer debate and influence policy inside a democratic trading partner.

Representatives of Beijing routinely lobby Australian politicians, and China and its supporters have sought to suppress criticism in the Australian news media.

Why it matters: Many countries face the same challenge from China, which is pushing its authoritarian agenda around the world.

Image

CreditKholood Eid for The New York Times

Over the past year, a spate of suicides by taxi drivers in New York City has highlighted the overwhelming debt of those with medallions, the coveted permit for yellow cab ownership. Officials have blamed competition from ride-hailing companies like Uber and Lyft.

But a Times investigation found that a few industry leaders artificially inflated the price of taxi medallions, creating a bubble that eventually burst.

Middle East peace plan: President Trump and Jared Kushner announced on Sunday that the U.S. would hold an “economic workshop” in Bahrain next month, hoping that investment and financial incentives would encourage the Palestinians and other Arabs to resolve the conflict with Israel.

India’s election: According to exit polls, Prime Minister Narendra Modi appeared headed for re-election after more than five weeks of parliamentary voting. Official results are expected on Thursday.

Image

CreditSteve Schaefer/Atlanta Journal-Constitution, via Associated Press

Snapshot: Above, graduates of Morehouse College in Atlanta reacted with joy on Sunday after their commencement speaker, the billionaire Robert Smith, announced that his family would pay off the student debt of the entire graduating class of 396 students.

Repeat P.G.A. champion: Brooks Koepka defended his title at the P.G.A. Championship, becoming the first man to hold back-to-back titles in two major tournaments simultaneously. (He has also won the past two U.S. Opens.)

“Game of Thrones”: The series is over, but the arguments are just beginning. Find out who rules and who rests in peace in our recap of Sunday’s finale.

What we’re reading: This guide from The Washington Post, recommended by Anna Holland, an editor in London. “I loved seeing where ambassadors go to eat in Washington when they miss home,” she writes. “I left New Mexico nearly 15 years ago, but my hunt for proper enchiladas (stacked, with red chile and a fried egg) continues.”

Image

CreditRomulo Yanes for The New York Times. Food Stylist: Vivian Lui

Listen: Slipknot remains a wildly popular cult act, and the band has released new music: “Unsainted” is the lead single from “We Are Not Your Kind,” which will be released in August.

Read: George Packer’s “Our Man: Richard Holbrooke and the End of the American Century” is one of 10 new books our reviewers recommend.


Smarter Living: Everyone has cherished grudges, but they don’t do you any good. You free yourself from stress and unhappiness when you give them up. Think about what set off the grudge. Create mental space between what happened and your reaction. And try telling the story in a way where you’re more of a hero and less of a victim.

And next time you’re doing laundry, spice up your folding techniques.

Japan released new quarterly growth data today. In a surprise, the economy expanded, despite sluggishness in China.

The country has enjoyed several years of modest growth, but China’s slowdown is dragging Japanese export figures down. The trade war between Washington and Beijing could make things worse.

Image

Prime Minister Shinzo Abe and his wife, Akie Abe, with President Trump and Melania Trump at the White House last month.CreditAl Drago for The New York Times

In the 1980s, Japan was in China’s place: an upstart powerhouse vying with the U.S. to be the world’s largest economy.

Watching the trade war from Tokyo, there’s a strong sense of déjà vu and relief that President Trump, preoccupied by China, hasn’t put much muscle behind his threats to impose tariffs on Japanese automobiles.

Japan just has to keep him happy. Mr. Trump is set to arrive in Tokyo on Saturday to meet the new emperor, Naruhito.

During the visit, Mr. Trump is expected to talk trade with Prime Minister Shinzo Abe. The leaders have previously bonded over their love of golf.


That’s it for this briefing. See you next time.

— Chris


Thank you

To Mike Ives and Inyoung Kang for filling in last week. Mark Josephson, Eleanor Stanford and Kenneth R. Rosen provided the break from the news. Ben Dooley, our Japan business correspondent, wrote today’s Back Story. You can reach the team at briefing@nytimes.com.

P.S.

• We’re listening to “The Daily.” Today’s episode is about the Roe v. Wade decision.

• Here’s today’s Mini Crossword, and a clue: You might find one in a natural-history museum, for short (4 letters). You can find all our puzzles here.

• The Times has nearly doubled digital readership in the past five years, going from 70 million global readers a month to 138 million.

Chris Stanford is the writer of the U.S. edition of the Morning Briefing. He also compiles a weekly news quiz. He was previously a home page producer at The Times. Before 2013, he worked at The Washington Post and other news outlets. @stanfordc

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America Needs Huawei

America Needs Huawei

The director of the Chinese tech giant’s board warns that banning the company will hurt the U.S. economy.

Ms. Chen is director of the board at Huawei

Image

A Huawei company logo outside a shopping mall in Shanghai.CreditCreditAly Song/Reuters

An executive order signed by President Trump on Wednesday may lay the groundwork for a ban on the sale of Huawei’s equipment in the United States by declaring a “national emergency.” Additionally, an order issued by Commerce Secretary Wilbur Ross that goes into effect today will prevent Huawei — the world’s leading telecom equipment provider — from buying components and technology from American businesses without United States government approval.

The Commerce Department’s decision to require American companies to get special licenses to sell components to Huawei could make it hard — if not impossible — for the company to obtain key components for its network switching equipment and smartphones. But a ban will not make American networks more secure. Instead, it will hurt ordinary Americans and businesses by denying them access to leading technology, reducing competition and increasing prices.

The ban will financially harm the thousands of Americans employed by the U.S. companies that do business with Huawei, which buys more than $11 billion in goods and services from U.S. companies each year. A total ban on Huawei equipment could eliminate tens of thousands of American jobs.

Because Huawei equipment is installed in dozens of 4G networks in underserved remote and rural parts of the country, a ban would prevent small, independently owned American telecom operators such as Eastern Oregon Telecom and Union Wireless in Wyoming from developing new services and delivering faster broadband connections to millions of people. Instead, those operators would be forced to spend their limited funds replacing Huawei equipment with more expensive gear supplied by its competitors (there are two — Ericsson and Nokia — and neither is an American company).

Huawei is the acknowledged industry leader in 5G technology. Blocking it could harm the American economy by preventing the United States from keeping pace with the rest of the world in rolling out 5G networks. The United States could end up falling behind the many European and Asian countries that plan to introduce 5G networks — ensuring that those countries take the lead in delivering new products and services to their residents, just as American companies did when the country moved quickly to roll out 4G, the previous generation of wireless tech.

Most important, a ban would fail to achieve its goal of making the country’s digital networks more secure.

American officials worry that using Chinese equipment would allow Beijing to shut off phones, power, banking and other critical services. The security of our telecommunications networks is a responsibility shared by operators, equipment vendors and service providers to collectively perform risk mitigation with assurance and transparency. Telecom operators control the network and the data moving across it, and circumventing their controls would be extremely hard, given the available risk-mitigation processes. Huawei has repeatedly said it would refuse any order to attack or spy on its customers.

Moreover, singling out Huawei because it is headquartered in China makes little sense. Telecommunications companies such as Nokia and Ericsson draw from a global supply chain, as Huawei does. They use equipment developed or manufactured in China, which accounts for much of the telecommunications and internet gear currently installed in American networks. Blacklisting one company — or all of the companies from one country — does nothing to mitigate this global supply chain risk and will substantially reduce competition that will inevitably increase costs.

The executive order and the Commerce Department’s regulation aim to prevent malicious actors from inserting malware into telecommunications networks that could surreptitiously monitor network traffic or launch a cyberattack. This aim reflects the reality that the world’s communications networks are vulnerable to attack by sophisticated nation-states, such as by implanting programmable code and exploitable vulnerabilities in hardware and software by virtual means. But such code can compromise the product of any equipment vendor — even those from countries that might seem friendly to America — which requires assurance and transparency in risk mitigation.

Related

More about China and Huawei

The United States government has entered into agreements for government-monitored risk mitigation with Nokia and Ericsson, which are based in Europe, allowing them to do business in this country despite their extensive operations in China. Huawei would welcome the opportunity to discuss similar agreements.

If the White House and Commerce Department really want to protect American networks, they will focus not on barring individual companies but on establishing a comprehensive risk management approach that relies on recognized best practices. In fact, that is precisely the strategy advocated last year by the Department of Homeland Security.

A move to block any company — let alone Huawei, the industry leader — will weaken competition, delay 5G adoption, reduce innovation and prevent American consumers and businesses from having access to some of the world’s most advanced communications technology. The Trump administration should abandon its apparent course and instead develop a transparent framework to test and secure all parts of America’s communications networks.

Catherine Chen is director of the board at Huawei.

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.

Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram.

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Food Delivery Apps Are Drowning China In Plastic

Food Delivery Apps Are Drowning China In Plastic


Earth

China

Software


Food Delivery Apps Are Drowning China In Plastic (nytimes.com)






Posted
by

BeauHD

from the transformation-of-daily-life dept.

“The astronomical growth of food delivery apps in China is flooding the country with takeout containers, utensils and bags,” writes Raymond Zhong and Carolyn Zhang for The New York Times. “And the country’s patchy recycling system isn’t keeping up. The vast majority of this plastic ends up discarded, buried or burned with the rest of the trash, researchers and recyclers say.” From the report: Scientists estimate that the online takeout business in China was responsible for 1.6 million tons of packaging waste in 2017, a ninefold jump from two years before. That includes 1.2 million tons of plastic containers, 175,000 tons of disposable chopsticks, 164,000 tons of plastic bags and 44,000 tons of plastic spoons. Put together, it is more than the amount of residential and commercial trash of all kinds disposed of each year by the city of Philadelphia. The total for 2018 grew to an estimated two million tons.

Recyclers manage to return some of China’s plastic trash into usable form to feed the nation’s factories. The country recycles around a quarter of its plastic, government statistics show, compared with less than 10 percent in the United States. But in China, takeout boxes do not end up recycled, by and large. They must be washed first. They weigh so little that scavengers must gather a huge number to amass enough to sell to recyclers. “Half a day’s work for just a few pennies. It isn’t worth it,” said Ren Yong, 40, a garbage collector at a downtown Shanghai office building. He said he threw takeout containers out.

Many people in urban China are using the delivery apps because “delivery is so cheap, and the apps offer such generous discounts, that it is now possible to believe that ordering a single cup of coffee for delivery is a sane, reasonable thing to do,” the report adds.

“The pathology is to want control, not that you ever get it, because of
course you never do.”
— Gregory Bateson

Working…

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U.S. Considers Export Ban on Surveillance Company That Helps Send Muslims to China’s Concentration Camps: Report

U.S. Considers Export Ban on Surveillance Company That Helps Send Muslims to China’s Concentration Camps: Report

An unnamed man at a trade show has his face marked for identification by Hikvision on a monitor at Security China 2018 in Beijing, China on October 23, 2018

An unnamed man at a trade show has his face marked for identification by Hikvision on a monitor at Security China 2018 in Beijing, China on October 23, 2018
Photo: AP

The U.S. government is considering a tech export ban that would target Hikvision, a Chinese video surveillance company that’s been instrumental in sending anywhere from 1 million to 3 million Muslims into China’s network of secretive concentration camps, according to a new report from the New York Times.

Under the proposed ban, Hikvision would be unable to buy American technology, not unlike last week’s restrictions placed on Huawei that now prohibit American companies like Intel and Google from doing business with the Chinese tech giant. Hikvision did not immediately return Gizmodo’s request for comment on Wednesday.

The U.S. government ban would in some ways be symbolic, as Hikvision doesn’t import much hardware from the U.S., but it’s not clear whether the company’s American sales would ultimately be affected. Hikvision sells a large assortment of consumer-grade surveillance cameras in the U.S. through online retailers like Amazon, but the video equipment being used in China is much more sophisticated. Hikvision makes traffic cameras, sidewalk surveillance cameras with facial recognition, and thermal cameras that are used to monitor people throughout China. The company also makes warehouse conveyor robots, robot forklifts, and drones, as well as drone signal jammers.

The Chinese government has systematically surveilled and oppressed the roughly 11 million Uighurs, an ethnic minority in the western part of the country who are predominantly Muslim. Current estimates indicate that anywhere from 1 million to 3 million Uighurs are currently being held in China’s concentration camps, according to the U.S. State Department. The Chinese government prefers to call the camps “re-education centers” and denies that Uighurs are being oppressed despite overwhelming evidence to the contrary. China insists that its actions against the Xinjiang region’s Uighurs are an anti-terrorism effort.

In reality, the Xinjiang region has become a total police state, with armored cars and tanks on the streets in recent years. Western reporters who go to the region are regularly tailed and harassed for reporting on the Uighurs and average citizens are constantly stopped for their ID, so much so that many dread leaving their homes at all.

“Hikvision takes these concerns very seriously and has engaged with the U.S. government regarding all of this since last October,” a Hikvision spokesman told the New York Times via email. “In light of them, the company has already retained human rights expert and former U.S. ambassador Pierre-Richard Prosper to advise the company regarding human rights compliance. Separately, Hikvision takes cybersecurity very seriously as a company and follows all laws and regulations in the markets we operate.”

Pierre-Richard Prosper was President George W. Bush’s Ambassador-at-Large for War Crimes Issues at the U.S. State Department from 2001 to 2005.

United Nations human rights chief Michelle Bachelet has recently called for an investigation into the treatment of the Uighurs in China, but the Chinese government has insisted that any investigation should avoid, “interfering in domestic matters.”

As the New York Times reports, Hikvision already exports its high-end video surveillance technology to countries like Pakistan, Zimbabwe, Uzbekistan, and the United Arab Emirates. And countries like Saudi Arabia have been oddly supportive of the crackdown on China’s Muslim citizens.

But the Trump regime’s interest in banning Hikvision may not be primarily about protecting the Uighurs, as these kinds of actions are seen through the lens of the U.S.-China trade war, as well as the New Cold War more broadly.

“Taking this step would be a tangible signal to both U.S. and foreign companies that the U.S. government is looking carefully at what is happening in Xinjiang and is willing to take action in response,” Jessica Batke, a former State Department official, told the New York Times. “At the same time, however, the ongoing trade war perhaps undercuts the perception that this is coming from a place of purely human rights concerns.”

Some of the video surveillance currently taking place against the Uighurs in China
GIF: WSJ

Roughly 42 percent of Hikvision is controlled by state-owned companies in China, though American financial institutions like Fidelity and J.P. Morgan are also major investors, according to Foreign Policy magazine. One of J.P. Morgan’s 2017 reports on investments in China noted “strong demand across a wide range of industries” for Hikvision’s products.

As the Financial Times notes this morning, shares in Hikvision plummeted 10 percent today before slightly recovering. But any further slip in Hikvision’s stock is likely to create the kind of pressure that even the UN can’t bring to bear—wealthy people who are helping finance oppression, knowingly or not, really don’t like losing money.

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Apple faces significant risks in China. Warnings are pouring in, and Citi sees its iPhone sales there getting cut in half. (AAPL)

Apple faces significant risks in China. Warnings are pouring in, and Citi sees its iPhone sales there getting cut in half. (AAPL)

Tim Cook ChinaAP

  • Citi cut its Apple price target and lowered its iPhone sales estimates due to US-China trade risk.
  • The firm’s adjustments follow a litany of other Wall Street analysts’ similarly cautious trade-war-related reports and broader concerns of China’s slowing economy.
  • Apple shares have slumped 11% this month, and are trading at a two-month low.
  • Watch Apple trade live.

Wall Street’s warnings about Apple‘s business in China are growing louder. 

The technology giant’s iPhone sales could get cut in half during the second part of this year as a direct result of the escalated trade tensions between the US and China, according to a Sunday report from Citi.

That view prompted the bank to lower its estimates for iPhone sales in China for the remainder of 2019 and to trim its price target for the second time this year. 

The bearish note follows a host of other Wall Street firms’ similarly stark warnings about Apple’s sales in the critical Chinese market. The fears underscore a broader concern about China’s economic slowdown.

While analysts have for months sounded off about Apple facing headwinds in China, the warnings have come quickly in recent weeks as the US-China trade war has escalated.

Read more: THE TECH COLD WAR: Everything that’s happened in the new China-US tech conflict involving Google, Huawei, Apple, and Trump

“We are proactively slashing our iPhone unit sales as we believe the US/China trade situation will result in a slowdown of Apple iPhone demand in China as China residents shift their purchasing preference to China national brands,” Citi analyst Jim Suva, who held his longtime “buy” rating, wrote in a client note.

“Our independent due diligence shows a less favorable brand image desire for iPhone which has very recently deteriorated.”

Suva cut his sales and earnings-per-share estimates, pointing to the fact that China represents 18% of Apple’s iPhone sales. While he had previously forecasted sales of nearly 14.5 million iPhones in the second half of this year, he now sees just over 7.2 million units sold. Suva also cut his 2020 estimates by roughly half.

Earlier this month, the US exacerbated the trade war between the two economic powerhouses when it banned technology from the Chinese telecommunications company Huawei. The Commerce Department later said it would temporarily relax some of the restrictions.

Read more: Huawei is planning to drop Google’s operating system as soon as next month after being banned from working with US companies

Analysts fear China could retaliate against the US, hurting technology companies like Apple. 

“Data through April shows Apple continued to gain market share of the smartphone installed base in China, however worsening trade tensions puts share gains in the rest of the June quarter into question,” Morgan Stanley said Sunday in a sweeping report on the state of Apple’s business in China.

The year-over-year change in the iPhone's installed base in China.Morgan Stanley

“In the event Apple products are not given an exemption from the final round of tariffs on Chinese exports to the US, we see a 20-25% EPS hit in FY20 in the worst case scenario,” the Morgan Stanley analysts wrote.

Elsewhere on Wall Street, HSBC and UBS both cut their Apple price targets last week. It was the fourth time HSBC lowered its price target in the last six months.

UBS, for its part, said Apple could indirectly suffer from the US blacklisting Huawei.

“Negotiations between US/China are ongoing and an extension has been granted for some critical items, but we do think a nationalistic movement — similar to the one we saw at the time of the arrest of Huawei’s CFO in November — seems quite probable and would impact iPhone sales,” UBS analyst Tim Arcuri wrote.

Apple shares have fallen 11% this month, and trade near a two-month low near $178 a share.

Now read more markets coverage from Markets Insider and Business Insider:

The US-China trade war could slash economic output across the world

Fiat Chrysler proposes huge $37 billion merger with Renault that would create the world’s 3rd-largest automaker

The investment chief at a $70 billion private-equity behemoth explains how the rise of Amazon and Uber forced him to make a ‘scary’ change to his strategy

Apple shares.Markets Insider

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U.S. – China Trade Talks End For Now, As Higher Tariffs Take Effect

U.S. – China Trade Talks End For Now, As Higher Tariffs Take Effect

Cargo is unloaded from a container ship at the main port terminal in Long Beach, Calif., on Friday. Two days of trade talks between the U.S. and China ended without a deal to avert more tariffs.

Mark Ralston/AFP/Getty Images


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Mark Ralston/AFP/Getty Images

Cargo is unloaded from a container ship at the main port terminal in Long Beach, Calif., on Friday. Two days of trade talks between the U.S. and China ended without a deal to avert more tariffs.

Mark Ralston/AFP/Getty Images

Trade negotiators from the U.S. and China wrapped up two days of what President Trump called “candid and constructive” talks on Friday but failed to reach agreement. The Trump administration raised the stakes for future negotiations by boosting tariffs on $200 billion worth of Chinese imports.

Those tariffs “may or may not be removed depending on what happens with respect to future negotiations,” Trump tweeted. “The relationship between President Xi and myself remains a very strong one, and conversations into the future will continue.”

While the prospect of higher tariffs rattled financial markets, investors seemed reassured that talks had not broken down completely. Major stock indexes closed up on Friday, after a sharp drop earlier in the day.

Still, U.S. business groups greeted the administration’s latest move with caution.

“CEOs are deeply concerned that a return to tariff escalation with China will hurt the U.S. economy and American workers, businesses, and farmers,” the Business Roundtable said in a statement.

The roundtable, which represents leaders of big public companies, supports the president’s push to change what it calls unfair trade practices in China. But CEOs stressed that any “final agreement should take tariffs down.”

Trump is a firm believer in tariffs, even though most economists say the import duties are primarily paid not by China but by U.S. businesses and consumers.

“Tariffs will make our Country MUCH STRONGER, not weaker,” the president tweeted. The administration increased tariffs to 25% from 10% on a wide range of Chinese products. Trump has also threatened to extend tariffs to an additional $325 billion in Chinese goods — taxing virtually everything the U.S. imports from China.

While the higher tariffs took effect in the middle of trade talks, they do not apply to goods in transit across the Pacific. That gives negotiators a narrow window to reach agreement before the effects of the higher duties are felt.

There was no immediate word on when or where trade negotiations would resume.

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