Chinese President Xi Jinping attended a ceremony in Beijing to mark the launch of full global services of the Beidou-3 Navigation Satellite System, indicating that China’s domestically-developed and independently-operated global satellite navigation system has been fully completed. The Beidou Navigation Satellite System (BDS) is China’s largest space-based system and one of four global navigation networks, alongside the U.S.’ GPS, Russia’s GLONASS and the European Union’s Galileo. It provides global users with basic navigation, global short message communication, and international search and rescue services. At present, the system’s services cover more than 200 countries and regions, with more than 100 million users and 200 million daily services. “Beidou is not only China’s Beidou, but also the world’s Beidou. It not only serves China, but also serves the world,” Chinese Foreign Ministry Spokesperson Wang Wenbin said.

The BDS system has been completed in 26 years since it was first started in 1994. More than 400 entities and over 300,000 scientists worked on the project since its inception. On June 23, the Long March-3B launch vehicle, carrying the last satellite of the BDS, blasted off from the Xichang Satellite Launch Center in Xichang, Sichuan province. The satellite was the 55th in the Beidou system, and has begun providing navigation, positioning and timing services. From November 2017 to June 2020, in 31 months, China successfully launched 30 Beidou-3 network satellites and two BeiDou-2 backup satellites, at a success rate of 100%, creating a new record for the world’s satellite navigation system network launch, with the speed of deployment exceeding an average of one satellite every month. The system is completely free from imports of core components as they are 100% home-made. “Key technologies that cannot be brought or obtained from other countries, especially during this pandemic period, sometimes decide the level of a country’s development. The only way for a country to achieve long-term stability and prosperity is to make utmost efforts to ensure their independent development of high technology,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences (CASS), told the Global Times.

The successful launch of BDS ensures the satellite navigation industry enters “a new golden age” in terms of comprehensive applications, insiders said. China’s domestic satellite navigation and location service sector has grown to around 14,000 companies with over 500,000 workers in five main industry clusters across the country. China’s BDS played an important role in providing mapping services that supported the rapid construction of the Huoshenshan and Leishenshan temporary hospitals in Wuhan at the beginning of the year, when the city was struck by the outbreak of Covid-19. BDS terminals were also carried to the top of Mount Qomolangma for the first time in late May to help a Chinese surveying team measure the height of the world’s tallest mountain. By the end of 2019 on the Chinese mainland, more than 6.5 million road vehicles, 40,000 postal and express delivery vehicles, 80,000 buses in 36 major cities, 3,200 inland navigation facilities, and 2,900 marine navigation facilities were using services from BDS, forming the world’s largest dynamic monitoring system for road vehicles. In the first quarter of 2020, more than 70% of smartphones in China used Beidou services. A report by the GNSS and LBS Association of China showed that the industry’s market scale is expected to exceed CNY400 billion by the end of 2020, up from CNY340 billion in 2019.

China has also achieved other successes in space. In January 2019, China’s Chang’e-4 probe touched down on the far side of the moon, becoming the first spacecraft to make a soft-landing on the moon’s uncharted side that is never visible from earth. In July, China successfully launched its first Mars probe, Tianwen-1, on a Long March-5 Y4 carrier rocket from Wenchang Space Launch Center in Hainan province. The move heralded a new era for China’s deep-space exploration that has steadily progressed beyond moon probes to interplanetary missions, the Global Times reports.

The UK’s mobile telecom providers are being banned from buying new Huawei 5G equipment after December 31, and they must also remove all of the Chinese firm’s 5G equipment from their networks by 2027, the UK government announced. New restrictions are also being applied to the use of the Chinese company’s broadband equipment. The UK government wants operators to “transition away” from purchasing new Huawei equipment for use in the full-fiber network, according to the BBC. “It will have very bad implications for the country. The UK will lag behind other major economies in utilizing the next-generation ultra-fast mobile technology, and potentially revolutionary new business models as well, to be enabled by Huawei’s 5G,” a Beijing-based industry analyst told the Global Times, adding that the UK’s trade ties with China will be hurt. The CEO of British Telecom has warned it may take a decade to remove Huawei equipment from Britain’s wireless infrastructure. The Chinese firm’s equipment has been in the UK’s telecoms infrastructure for two decades. Two-thirds of BT’s networks are currently provided by Huawei, with one-third from Nokia.

The UK decided in January to let Huawei continue supplying equipment to the country’s 5G network despite pressure from the U.S. to crack down on the Chinese firm, but with restrictions. The company was excluded from providing “core” 5G gear. “Excluding Huawei’s participation in the UK’s next-generation networks means the country’s telecommunications sector would suffer unbearable losses, and the extra costs would shift to consumers,” said Industry Analyst Ma Jihua. “Regrettably our future in the UK has become politicized, this is about U.S. trade policy and not security,” Huawei commented. It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide. Instead of “leveling up,” the government is leveling down and we urge them to reconsider, Huawei said.

China harshly criticized the UK’s decision to ban Huawei from the UK’s 5G development, painting London as an accomplice in the U.S.’ politically driven crackdown on the Chinese telecom firm based on fabricated “national security risks,” and vowed to take “all necessary” measures to protect the legitimate interests and rights of Chinese businesses, the Global Times reports. China’s Foreign Ministry Spokeswoman Hua Chunying said that the UK’s move has undermined mutual trust for China-UK cooperation and China’s confidence in the UK market. “This is not about one company or one industrial sector, this is about the UK highly politicizing commercial and technology issues at all costs,” she said. “If the UK insists on politicizing the business operations of a single Chinese firm, China could also do the same to defend the rights of Chinese firms,” Zhao Junjie, Research Fellow with the Chinese Academy of Social Sciences’ Institute of European Studies, told the Global Times, noting that UK firms’ “political bow” to the U.S. should make UK companies that make big profits in China like HSBC to “get nervous and suffer.” “It has become questionable whether the UK can provide an open, fair and non-discriminatory business environment for companies from other countries,” Chinese Ambassador to the UK Liu Xiaoming said, adding that “the way you are treating Huawei is being followed very closely by other Chinese businesses, and it will be very difficult for other businesses to have the confidence to have more investment”.

Some British Conservatives even want more. Iain Duncan Smith said that while he welcomed the decision, the government should shorten the seven-year timetable for purging Huawei equipment. “Let us bring it forward to five and let’s do it quickly,” he told Parliament. His colleague, Bob Seely, said in a statement he too wanted the government to move faster. Huawei said it is disappointed by the ban and called on ministers to reconsider. “UK revenues are less than 1% of Huawei’s global revenues,” Executive Vice President Jeremy Thompson said.

Prospects for a post-Brexit China-UK trade agreement have worsened considerably. If the Huawei ban prompted a wider trade conflict between China and the UK, the UK’s trade with China could fall by 90% in the worst case scenario, its GDP could drop by 0.75% and inflation could rise by 0.6% in 2020, the UK’s National Institute of Economic and Social Research (NIESR) said in a report, according to the Global Times. Huawei said it supported over 26,200 jobs in the UK in 2018 and contributed GBP470 million in tax revenue to the UK.

The U.S. announced it was imposing visa restrictions on employees of Chinese high-tech companies, including those from Huawei. It is also considering imposing visa restrictions on Members of the Communist Party of China.

Huawei posted revenue of CNY454 billion in the first half of 2020, a 13.1% increase year-on-year, with a net profit margin of 9.2%, beating forecasts amid the Covid-19 pandemic and an intensified U.S. crackdown. Huawei’s carriers, enterprises, and consumer businesses had revenue of CNY159.6 billion, CNY36.3 billion, and CNY255.8 billion respectively, all recording slight growth compared to the same period last year.

The first completely homegrown memory chips are currently in mass production in Shenzhen, breaking the foreign technology monopoly and serving as an alternative to imported chips, the Global Times reports. Powev Electronic Technology Co, a high-tech storage packaging and testing firm based in Shenzhen, is now producing memory chips and solid-state drives (SSDs) on a mass scale. The company’s chip lineup includes the first such products to be wholly domestically produced, with each integrated circuit and all production processes completed within China. The company’s products were first released on JD.com in May, and their sales have reached 25,000 on the platform. “The lineup was developed to resolve a supply bottleneck faced by the domestic IC industry,” said Deputy General Manager Zhang. The company said the chips and SSDs are used in personal computers and servers, and at least three domestic PC companies have incorporated the chips in their offerings. Powev’s products can now compete with most middle-end foreign memory chips in price and capacity. “For the mainstream storage chips market, we pose a strong competition to imported chips,” Zhang said. Although the price of the chips remains roughly the same compared to its foreign rivals, Zhang said it is important for Chinese companies to step into the highly exclusive market. The company’s business volume increased to CNY350 million in 2019, up from 2018’s CNY20 million.

The Suzhou Institute of Nano-tech and Nano-Bionics under the Chinese Academy of Sciences (Sinano), along with the National Center for Nanoscience and Technology, have made a breakthrough in a new type of 5 nanometer (nm) laser lithography technology, which industry insiders believe could lay the foundation for research into a self-developed advanced lithography machine, a field in which China lags behind some developed Western countries. But they stressed that China remains “far away” from producing such a chip-making machine as there are still technological barriers. Lack of sufficient capital also presents an obstacle to translate the theoretical findings into production power. The new tech could be used to produce up to 500,000 special nano electrodes an hour. Xiang Ligang, a Beijing-based veteran industry analyst, told the Global Times that the new technology will equip Chinese researchers to make forays into making homegrown lithography machines. “But it will take years for China to close the gap with the advanced Western suppliers, in particular ASML,” Xiang said.

Chinese public cloud service providers such as Alibaba Cloud and Tencent Cloud have grown quickly thanks to surging demand for remote education and working due to the Covid-19 pandemic, and their competitiveness in global markets has increased. Due to a surge in the stock market, Alibaba Cloud said it had received requests for expanded capacity from several key Chinese brokers in order to deal with the current limited capacity and frequent delays in the trading system. In February, when the Covid-10 pandemic was severe in China, DingTalk, the Alibaba-owned chat, video-conferencing and task management tool saw its user base peaking when 200 million employees of about 10 million enterprises worked from home and about 50 million students started online courses. To deal with the rising demand, more than 10,000 cloud servers were additionally deployed in two hours, a record for the rapid expansion of Alibaba Cloud. “Chinese public cloud vendors have grasped the opportunity to expand their business in the country amid the epidemic, mainly triggered by online education and home-based work,” Liu Dingding, a Beijing-based internet analyst, told the Global Times. Chinese cloud computing players have nearly reached the level of their international peers like Amazon Web Services (AWS) and Microsoft Azure, according to Liu.

The visit by Chinese Premier Li Keqiang to a big Tencent data center in Guizhou province also shows the government’s emphasis on developing “new infrastructure” projects. Due to its suitable climate and geographical conditions, together with favorable electricity prices, Guizhou has attracted world-leading tech companies to set up data centers in the region, which used to be one of the most impoverished provinces in China, but now is known as the home of “China’s Data Valley,” the Global Times reports.

Meanwhile, Google abandoned plans to offer a major new cloud service in China due in part to concerns over geopolitical tensions and the pandemic. The plan was part of the initiative known as “Isolated Region”, which sought to address nations’ desires to control data within their borders. Abandoning the initiative was considered a “massive strategy shift”. Alphabet’s Google is pouring money into cloud computing, part of a broader effort to find new sources of growth beyond advertising. While Amazon and Microsoft have sold their cloud services in mainland China, Google has not, the South China Morning Post adds.

Huawei has filed a number of trademarks related to its HarmonyOS in China, giving rise to speculation that the operating system developed to replace Google’s AndroidOS is making significant progress. Industry analysts said the Huawei Mate Watch could be the first smart-watch to use HarmonyOS, and that the OS is expected to be tested on more devices such as watches and computers before it can finally be used on Huawei smartphones. Ma Jihua, a veteran industry analyst, told the Global Times that Huawei already uses many of HarmonyOS’ functions for its P40 series, though the phones are still using Google’s AndroidOS. However, Ma said HarmonyOS was still not fully ready, as it was forcibly released under the U.S. crackdown on the firm, and there are still many issues to be fixed before it can be used on smartphones.

Huawei has unveiled its first product equipped with HarmonyOS – a new smart TV under its Honor brand. In May this year, the Trump administration moved to block global chip supplies to the already blacklisted Huawei. The company likely replaced Samsung as the world’s top smartphone maker in the second quarter, according to cn.nikkei.com. SK Securities estimated that from April through June, Huawei shipments stood at 55 million while Samsung’s reached 51 million, which means Huawei may for the first time be crowned No 1 in smartphone shipments.

There are an increasing number of foreign enterprises in China telecom operating sector. By the end of June this year, 266 foreign-invested enterprises had received relevant approvals. The Ministry of Industry and Information Technology (MIIT) issued the licenses for 213 enterprises, with a total of 324 business operating permits, while 53 enterprises in the Shanghai Free Trade Zone got approval from the Shanghai Communications Administration, with 61 business permits. Online data and transaction processing, information service and domestic call center businesses accounted for 85% of the operating permits.

The United States authorities amended a prohibition on U.S. companies doing business with China’s Huawei to allow them to work together on setting standards for next-generation 5G networks. The U.S. Commerce Department and other agencies signed off on the rule change, which was published in the Federal Register. “The United States will not cede leadership in global innovation,” U.S. Commerce Secretary Wilbur Ross said. “The Department is committed to protecting U.S. national security and foreign policy interests by encouraging U.S. industry to fully engage and advocate for U.S. technologies to become international standards.” The Commerce Department noted that U.S. participation in standards-setting “influences the future of 5G, autonomous vehicles, artificial intelligence and other cutting-edge technologies.” 5G networks are expected to power everything from high-speed video transmissions to self-driving cars.

Analysts observed this did not signify an easing of the U.S. assault on Huawei. Last year, the United States placed Huawei on the Commerce Department’s so-called entity list, which restricted sales of U.S. goods and technology to the company, citing national security. Industry and government officials said the Huawei entity listing put the United States at a disadvantage in standards settings. The new rule came in response to concerns from U.S. companies and lawmakers. “Confusion stemming from the May 2019 entity list update had inadvertently sidelined U.S. companies from some technical standards conversations, putting them at a strategic disadvantage,” said Naomi Wilson, Senior Director of Policy for Asia at the Information Technology Industry Council, as reported by the Shanghai Daily.
“This is not a friendly gesture by the U.S., but simply a reflection on its part that it is too late and too expensive for any country to develop its own 5G standard,” Jefferies Equity Analyst Edison Lee said. He added that feedback from U.S. tech companies likely convinced the Trump administration that it is not realistic for the U.S. to create its own version of 5G. Large U.S. firms, including Intel Corp and Qualcomm, have already contributed plenty to 5G standards under the 3rd Generation Partnership Project (3GPP). In a statement, Huawei said it wants “to continue holding sincere discussions in relation to standards for new technologies with our counterparts, including those in the U.S.”, the South China Morning Post adds.

The Global Times reported that on a global basis, Huawei has the highest number of declared 5G patents at 2,386 patent families, followed by LG with 1,388 patent families and Samsung with 1,353 patent families, according to GreyB Services and Amplified AI. Huawei overtook Samsung to become the world’s largest smartphone maker in April, despite the double challenges of the U.S. government’s tightened restrictions and the Covid-19 outbreak’s economic fallout. Huawei accounted for 21% of the global smartphone market in April, thanks to reviving smartphone shipments in China. In comparison, Samsung saw its market share stand at 19%, amid Covid-19-related lockdowns in markets such as India, according to market research company Counterpoint. This is the first time Huawei has surpassed Samsung, after the company expressed in 2016 its aim to be the world’s No 1 smartphone maker within five years.

Experts said Huawei’s ascent against all the odds reflects the company’s popularity among Chinese consumers, but challenges still exist for its overseas businesses. It remains to be seen whether Huawei can occupy the top spot for the upcoming months, they said. Peter Richardson, Vice President and Research Director of Tech Strategies at Counterpoint, said, “Huawei is leading the China market, which started to recover relatively quickly at almost the same time when many other markets around the world underwent lockdowns,” the China Daily added. It is worth noting that China’s smartphone market failed to maintain strong growth momentum in May. The latest data from the China Academy of Information and Communications Technology, a government think tank, showed that over 32.66 million smartphones were shipped out of factories to retailers in China in May, a year-on-year decline of 10.4%.

Meanwhile, the lawyers of Huawei Chief Financial Officer Meng Wanzhou raised new arguments in her extradition case before Canadian courts. A PowerPoint presentation that Meng gave to an HSBC banker in Hong Kong in 2013 has been cited as key evidence against her. In that presentation, Meng said that Skycom Tech Co – a firm that operated in Iran and was subject to U.S. sanctions – was “a business partner of Huawei,” while the United States has described it as an unofficial subsidiary. Meng’s lawyers argued the prosecutors omitted key disclosures Meng made in the presentation, thereby presenting a misleading picture. The lawyers also said that a USD900 million credit facility that the U.S. said HSBC had extended to Huawei did not exist. Rather Huawei was in a USD1.6 billion credit arrangement with 26 banks, and HSBC’s total contribution was limited to USD80 million, they argued.

New documents also show that Canada’s spy services worked together with the FBI prior to Meng’s arrest at on December 1, 2018, which indicated that the case was political rather than legal, violating Meng’s rights and invalidating the U.S. extradition case, the lawyers argued.

Foreign tech companies are joining China’s efforts to accelerate construction of new infrastructure, including cloud computing, 5G and artificial intelligence as they continue seeing robust local demand for their cutting-edge products and services. Mark Gibbs, President of SAP China, said the new infrastructure initiative “reflects China’s long-term view and willingness to invest ahead of the curve. Compared with traditional infrastructure investment, the new infrastructure program has a strong technology focus. For instance, 5G will revolutionize the way business and people interconnect around the world,” Gibbs said, adding that the company will align its strategies to the initiative. Currently, the German software and cloud services provider is already seeing growing local demand for its cloud computing services amid the Covid-19 pandemic. In the first quarter, SAP inked a deal with Anta, a leading Chinese sportswear company, which was broadcast live on SAP S/4HANA, a next-generation, intelligent enterprise resource planning business suite. “In challenging times, technology needs to be viewed as a business enabler to improve agility and responsiveness. Successful companies of tomorrow would be the ones that have invested and will keep investing in technologies to stay agile,” Gibbs said.

The concept of new infrastructure has also for the first time been included in China’s Government Work Report for 2020, which vowed to develop next-generation information networks and expand 5G applications, build more EV charging facilities, promote the wider use of new-energy automobiles, stimulate new consumer demand, and promote industrial upgrading. Wu Hao, Director of the Department of High-Tech Industry at the National Development and Reform Commission (NDRC), said that unlike traditional infrastructure such as railways, highways and airports, the new type of infrastructure projects include new infrastructure for digital transformation, intelligent upgrades, and innovative development. “Led by new development concepts, the new infrastructure is driven by technological innovation and is based on information networks to meet the needs of high-quality development,” Wu said. Xiang Ligang, Director General of the Information Consumption Alliance, said new infrastructure will bring opportunities not just for domestic companies, but also for foreign tech enterprises which have long-term development plans in China.

Yang Xu, President of Intel China, said the country’s emphasis on new infrastructure will help the nation better upgrade its industries from large-scale manufacturing to value-added services. He said the company’s chip plants in Dalian, Liaoning province, and Chengdu, Sichuan province, have been working nonstop amid the outbreak.

Alain Crozier, Chairman and CEO of Microsoft China, said the Covid-19 outbreak has affected the company’s planning and strategy to a certain extent, but it still maintains confidence in the Chinese market in 2020. The urgent demand for remote working solutions during the outbreak has caused many enterprises and organizations to take notice of Microsoft Teams, which is a key element of Microsoft 365, Crozier said. “During the outbreak, we saw so many great examples of schools continuing their classes during quarantine using technology, doctors helping patients via video conferencing, and companies continuing to operate with employees working from home in China using our technology,” Crozier added. “Obviously, China is leading the modern workplace evolution, and it also provides a valuable reference for companies in other countries and regions fighting the pandemic,” he said, as reported by the China Daily.