Song Liuping, Huawei Chief Legal Officer, at a press conference in Shenzhen

The legal battle between Huawei Technologies and the United States government is intensifying. The company announced a legal challenge to the U.S. Federal Communications Commission (FCC), seeking to overturn its order banning telecom carriers from buying the company’s equipment using federal subsidies. Analysts said the FCC ban would have very limited impact on Huawei’s financial performance, but labeling the company a national security threat would cause far reaching harm to its reputation. In a petition filed in the U.S. Court of Appeals for the Fifth Circuit, Huawei asked the court to declare the FCC order unlawful on the grounds that it fails to offer Huawei due process protections in labeling it a national security threat.

Song Liuping, Huawei’s Chief Legal Officer, said that “banning a company like Huawei, just because we were founded in China – this does not solve cybersecurity challenges”. Song said FCC Chairman Ajit Pai and other FCC officials failed to present any evidence to prove their claim and ignored the facts and objections raised by Huawei and U.S. rural carriers. Huawei’s products are currently used by rural telecom carriers in the U.S. to offer network and broadband services in some of the most remote regions. Steve Berry, President and CEO of the Competitive Carriers Association, a trade group for about 100 wireless providers in the U.S., said in a statement to the FCC that services provided by Huawei are almost always less expensive and can be more reliable than their market competitors. As a result of the ruling, carriers will be deterred from investing in their networks and adopting new technologies, the Association said. Replacing Huawei’s equipment would be very costly to the telecom providers. Song Kai, Vice President of Huawei’s Corporate Communications Department, said the company’s revenue in the U.S. is negligible. It is also marginal relative to Huawei’s annual USD11 billion procurement of U.S. components. But labelling Huawei as a national security threat and pressuring European regulators to also exclude the company from their networks incited the company to take legal action.

U.S. authorities are also considering putting Huawei on the Treasury Department’s Specially Designated Nationals (SDN) list, which would make it virtually impossible for Huawei to complete transactions in U.S. dollars, and lead to the freezing of its U.S. assets. This would also severely impact Huawei’s business in Europe and in Asia outside China.

Zhang Ming, Ambassador of the Chinese Mission to the European Union, recently slammed U.S. Secretary of State Mike Pompeo for his disinformation campaign against China and Huawei. “Despite all the witch hunts and media hype, not a single country or individual has come up with solid evidence to prove that Huawei poses a security threat,” he said. Portuguese officials have told U.S. Pompeo they won’t exclude Chinese companies from competing in a tender for the next-generation 5G wireless network.

Huawei is planning to move its research center to Canada from the United States. The company will also manufacture some mobile network equipment outside China, according to company Founder Ren Zhengfei. According to a report by Oxford Economics, Huawei supports nearly 5,000 full-time Canadian jobs, has invested USD164 million in R&D initiatives, and generated USD204 million in taxation.

Honor, Huawei’s brand targeting young consumers, has released new 5G smartphone models and a 5G ecosystem that is expected to be valued at CNY100 trillion in future, said Zhao Ming, Honor’s President. In 2020, at least 100 million 5G smartphones are expected to be sold, accounting for a third of the smartphone market. Meanwhile, 5G and new-technology smartphones will become a catalyst to build a new ecosystem covering games, transport, social, maps, broadcasting and augmented reality and virtual reality (AR/VR). “It’s key to attract the first batch of 5G users. They are high-end and young consumers, willing to test new things,” said Zhao. Honor released new V30 5G models, which feature the Kirin 990 processors, support the latest 5G standard, and have an improved Matrix Camera system. The prices of the new models start from CNY3,299, which are relatively more affordable compared with existing 5G models from Huawei, Samsung and Vivo.

Japan is likely to surpass the United States as the largest supplier for Huawei, as the company scrambles to deepen partnership with other global suppliers amid U.S. government restrictions. Huawei is also ratcheting up efforts to buy more components and technologies from European suppliers, so as to reduce reliance on U.S. technologies. Huawei has about 3,500 suppliers in Europe, and over the next five years, it plans to procure products worth more than USD40 billion from European companies. Liang Hua, Chairman of Huawei, said that parts procured from Japanese companies are set to total USD10 billion in 2019, a 50% jump from the previous year. In comparison, Huawei procured about USD11 billion products from U.S. suppliers last year and the number is expected to drop significantly in 2019.

5G technologies use a higher frequency than 4G, and each 5G base station covers a smaller area than its 4G counterpart. 5G will also see wider industrial use, further increasing the demand for network coverage. As a result, far more base stations – with some estimating as much as three times more – are needed in the 5G era than in the 4G era. To overcome the difficulty, Huawei is working with telecom carriers and tower operators on innovative technological and industrial solutions.The major part of operators’ investment does not go to equipment. Out of every USD100 that telecom operators invest in base station construction, USD60 is spent on site acquisition, civil work, power supply, and other auxiliaries, according to Huawei. The company has launched the Open Site initiative to convert utility poles into telecom poles, helping operators with massive 5G site acquisitions and optimized site costs.

Meanwhile, Taiwan-based chip designer MediaTek released its new 5G processor Dimensity 1000, offering strong performance in energy consumption and 5G signals. MediaTek’s chipset will be used in new 5G smartphones in the fourth quarter and the beginning of 2020. Oppo and Vivo, China’s top 2 and 3 smartphone vendors behind Huawei, have also announced 5G smartphone release plans in December. The Ministry of Industry and Information Technology (MIIT) issued a plan to promote 5G plus industrial internet, pledging to make key 5G breakthroughs to meet specific requirements of the industrial internet by 2022.

China’s largest hard coal producer Yangquan Coal Industry Group in Shanxi province has deployed an underground 5G base station in one of its coal mines as part of the move to promote 5G-based intelligent mining. The 5G base station can transmit real-time high-definition videos. Lu Le from China Mobile’s Shanxi branch said that the thick dust underground interferes with the signal of traditional video and infrared cameras, but has little effect on 5G-based equipment. He said that “in the past there was only one monitoring point for 100 devices. Now, with the help of 5G, we can set up 100 monitoring points for a single device, which can greatly improve underground safety and real-time monitoring.” Shanxi has more than 900 coal mines with an annual output of 900 million tons.

A China Telecom employee shows the difference in download speeds of cellphones using 4G and 5G services (left) and the difference in upload speeds (right)

China officially launched commercial 5G services on October 31, with the nation’s big three telecom operators rolling out their 5G data plans. The move means consumers can now pay to access superfast 5G speeds as more than 86,000 5G base stations have already entered service in China, covering 50 cities nationwide. Chen Zhaoxiong, Vice Minister of Industry and Information Technology, said China has been working hard to extend 5G coverage. By the end of this year, more than 130,000 5G base stations will be in use. China is not the first country to commercialize 5G, but China leads the world in the scale and diversity of 5G services. China is set to become the world’s largest 5G market by 2025, with 460 million 5G users, according to a forecast by the Global System for Mobile Communications Association (GSMCA), the China Daily reports.

Monthly rates for 5G services will depend on speed and data used. Although monthly prices for basic 5G data plans are higher than for 4G, the price per gigabyte for 5G is lower. In Shanghai, 5G packages start from CNY128, including 30 gigabyte data traffic, 500 minutes of calling and value-added services. The CNY599 packages include 300 GB data traffic and 3,000 minutes of calling. Extra data traffic costs CNY3 to CNY5 for each gigabyte. Existing users can enjoy discounts of 20% to 30% for switching to 5G services for six months, reducing the price of some 5G packages to less than CNY100 a month.

Huawei grabbed a record high share of 42% in the domestic smartphone market during the third quarter of this year, with an annual growth rate of 66% even as most of its rivals posted sharp declines. Huawei shipped 41.5 million handsets in the Chinese market from July to September. According to Canalys, the Chinese smartphone market still contracted by 3% in the third quarter compared to a year earlier. Huawei, however, achieved a sixth consecutive quarter of double-digit growth during the period. The remaining top five vendors, namely Vivo, Oppo, Xiaomi and Apple, ranked in that order, all shrank further. Their combined share only accounted for 50% of the market, down from 54% in the second quarter of 2019 and 64% in the third quarter of 2018.

President Xi Jinping has highlighted the importance of blockchain in enabling independent innovation in core technologies, urging efforts to expedite the growth of blockchain technologies and industries. He made the remarks as he presided over a group study session of the Political Bureau of the Chinese Communist Party (CCP) on the development blockchain technology. It is important to strengthen basic research and improve original innovation capacities so that China can take the lead in theoretical studies, secure the high ground in innovations and develop a new edge in industries, Xi said. Blockchain is a digital ledger system that uses sophisticated cryptographic techniques to create a permanent, unchangeable and transparent record of exchanges to trace transactions.

An industrial ecology for blockchain must be established, and the integration between blockchain and cutting-edge technologies, such as artificial intelligence (AI), big data and the Internet of Things (IoT), must be pushed forward, President Xi said. Integration between blockchain and the real economy must be moved forward, which can offer solutions to difficulties faced by small and medium-sized enterprises in financing as well as challenges for banks and regulatory departments in risk control and oversight, he said.

Separately, Tencent Holdings has acknowledged that Facebook’s proposed cryptocurrency Libra could pose a serious threat to existing digital payment systems, including its own WeChat Pay as well as Alipay from rival Alibaba Group Holding. “Libra, if launched successfully, would not only impact traditional financial institutions but also undermine internet firms, including Tencent and Alibaba, which have their own relatively mature payment systems, hindering their global expansion,” Tencent said in a blockchain whitepaper. Facebook unveiled its Libra cryptocurrency in June, aiming to peg it to a basket of currencies backed by reserves, subject to regulatory approval. Facebook has 2.7 billion users on its social media platform as well as the backing of global payment, technology, telecommunication, blockchain and venture capital firms for the plan.

The potential global user base for Libra and wide-ranging services offered by its backers would affect the global expansion of digital payment companies who are not part of the Libra club, the white paper states.

Tencent operates China’s dominant social media and do-everything app WeChat with over 1 billion daily active users, and its WeChat Pay is one of the biggest digital payment services alongside Alibaba’s Alipay. Describing the plan as “radical and bold” but actually “clear-headed and prudent”, Tencent said Libra’s strategy is to start with developing countries with weak financial infrastructure, especially those without easy access to credit, and then gradually penetrate developed markets. Libra could reset the global payments and financial landscape by bringing innovations in user experience, technology and business models, Tencent said in the white paper.

Meanwhile China is developing plans for its own digital currency and was “almost ready” to launch, according to the People’s Bank of China (PBOC) in August. However, Governor Yi Gang poured cold water on prospects for an imminent launch last month, saying the central bank did not “have a timetable”. The PBOC plans to make digital coins available through four state-owned banks, as well as online payment platforms operated by Tencent, China UnionPay and Alibaba affiliate Ant Financial. China is the first major economy to explore launching its own digital currency and established a PBOC-backed research institute to study the field in 2016, yet it has banned all cryptocurrency trading activities and initial coin offerings since 2017.

Both Alipay and WeChat Pay have issued statements separately earlier this month making clear their current policies which forbid transactions related to cryptocurrency trading on their payment platforms. “To reiterate, Alipay closely monitors over-the-counter transactions to identify irregular behavior and ensure compliance with relevant regulations,” Alipay said. “If any transactions are identified as being related to bitcoin or other virtual currencies, Alipay immediately stops the relevant payment services,” the South China Morning Post reports.

The 5G self-driving minibus developed by BroadXT made its global debut on the first day of the sixth World Internet Conference held on October 20-22 in Wuzhen, Zhejiang province. The vehicle is used to help ferry participants to the venue during the conference. Powered by a variety of advanced techniques such as sensors, high-precision positioning, the fifth-generation wireless network and the vehicle-to-everything system (V2X), the autonomous bus adopts a Level-4 autopilot technology and is able to identify pedestrians, vehicles and other obstacles within 200 meters. BroadXT President Shang Wenzhu said the vehicle will be the first mass-produced 5G autonomous minibus in China that has passed tests on open urban roads, adding that China is taking the lead in autonomous driving technology. Shang added the cloud command system can offer an optimal driving route when encountering traffic jams, accidents and extreme weather to ensure safety and enhance traffic efficiency. “The autonomous bus could react within 100 milliseconds under complex road conditions owing to its 5G, sensors, AI and cutting-edge computing technologies,” Shang explained.

In September, Wuzhen and BroadXT inked an agreement to speed up the commercialization of 5G autonomous buses in Wuzhen. With a total investment of CNY650 million, 110-square kilometer Wuzhen will be covered by an intelligent transportation system in three years. Shang said they plan to promote the self-driving minibuses in Zhejiang province, and more cities in the Yangtze River Delta region. Officials have high hopes for the market. China expects vehicles with some autonomous functions to account for half of new vehicles sold in the nation by 2020, a guideline released by the National Development and Reform Commission (NDRC) said. The World Internet Development Report 2019 and the China Internet Development Report 2019, which were published during the World Internet Conference,

The Internet Plus Expo in Foshan in Guangdong province focused on the industrial internet and intelligent manufacturing in a bid to foster local industrial upgrading. Covering an area of 55,000 square meters, the annual fair, one of the most important internet shows in China, brought together 800 leading companies from home and abroad to showcase the latest applications and emerging developments in seven major areas: cutting-edge Internet Plus technologies, digital business, digital life, innovation and entrepreneurship, intelligent manufacturing, robots and robot competitions. Hannover Milano Fairs Shanghai organized the expo.

The drone sector has achieved remarkable growth in China, thanks to improving artificial intelligent technologies. The Shenzhen UAV Industry Association has organized 10 companies and institutes in the sector, including Shenzhen Smart Drone UAV and HighGreat, to display their latest achievements at the expo. The commercial application of 5G technologies was another highlight of the expo, including digitalized administration, cloud computing, big data and intelligent broadband services. Foshan aims to become a pioneering city for the application of 5G technologies, with which the manufacturing sector will gain new momentum toward high quality, local officials said.

In other technology news, President Xi Jinping sent a congratulatory letter to the 2019 Zhongguancun Forum, saying that China would like to actively cooperate in global innovation and share development achievements with the world. Xi said Beijing’s Zhongguancun area has been making efforts to become an advanced science and technology park as well as a world-leading center of innovation. This year’s theme is “Cutting-Edge Technologies and Future Industries”. Around 1,200 business, financial and academic figures from 50 countries and regions attended the Forum. A recent report has found that China is the biggest driver of deep technology investment growth globally, with funding increasing at an annual rate of more than 80% from 2015 to 2018.

In Shenyang, Liaoning province, the 2019 Industrial Internet Global Summit took place. President Xi Jinping said in a congratulatory letter that the new round of revolution in science, technology and industry is developing at an accelerating pace, and industrial internet technologies are continuously seeing new breakthroughs. Themed “Empowering high quality and creating new momentum”, the three-day summit attracted over 100 leading experts and business leaders as well as over 100 enterprises, colleges and research institutions in the area of industrial internet.

The 2019 World Conference on the VR Industry was held in Nanchang, capital of Jiangxi province. Themed “VR Adorns the World, VR plus 5G for a New Era of Perception,” this year’s conference aimed to explore the 5G-enabled development of the VR industry in the initial stage of 5G commercialization, which is expected to cultivate new opportunities for various VR applications. More than 7,000 experts, scholars and entrepreneurs in the field of VR, augmented reality (AR) and mixed reality (MR) attended the conference, nearly 300 of whom shared their insights at the main forum and 23 parallel forums. The 2019 VR/AR Products and Applications Exhibition was held concurrently as part of the conference. With a tripled display area totaling 60,000 square meters compared with the 2018 edition, this year’s expo received 215 domestic and overseas corporate exhibitors and industry organizations.

China’s VR market will amount to CNY54.45 billion by 2021.China shipped 2.26 million units of VR terminal products in the first three quarters of 2019, with a sales volume totaling CNY8.6 billion. A list of top 50 virtual reality firms in China was published for the first time at the conference. HTC Communication Co, electro-acoustic components manufacturer Goertek and the smart tech arm of Chinese video entertainment company iQiyi topped the list.