World Businesses

Japanese Capacitor Manufacturing giant Murata shifts out of China

Japanese Capacitor Manufacturing giant Murata shifts out of China

Japanese Capacitor Manufacturing giant Murata shifts out of China

Read the original article

Japan wants to demolish China’s hegemony in the global electronics market. Recently, Tokyo invited semiconductor manufacturers from around the world to set base in Japan. With this, Japan is moving towards absolute control of the global semiconductors supply and is likely to imperil China’s consumer electronics industry that is heavily dependent on semiconductor imports. 

Japan is targeting a new sector- capacitors. Currently, China is the world’s largest producer of capacitors. But this is set to change, as a Japanese capacitor manufacturing giant has decided to shift production out of the Communist country.

Why capacitors are important? 

Capacitors are devices that store electrical charges. They have various uses including energy storage, power conditioning, signal coupling or decoupling, electronic noise filtering, and remote sensing. 

Free weekly newsletter

Subscribe to our mailing list to receive most important stories and updates direct to your inbox every week!

By signing up, you agree to our TOS and Privacy Policy

 

In the smartphones industry, they are used for various purposes like maintaining constant voltage, providing ‘boost’ power when the phone is about to discharge and dissipating stored energy to function as a temporary power source for some time. 

Japan’s Murata to shift out of China 

Murata Manufacturing is looking to cut its dependence on China amidst the ongoing US-China standoff. 

Murata is the largest capacitor maker in the world. It supplies parts to the iPhone as well. The company supplies smartphones devices like filters for picking up some radio signals, amplifiers for strengthening transmission signals and duplexers for managing incoming and outgoing signals. 

Murata’s operations in China helped the Communists become a leader in the capacitor market. But now the Japanese capacitor giant is looking to move to Thailand to open a new plant in the Southeast Asian country in October 2023. 

Why Murata is moving to Thailand? 

As per Nikkei Asia, Murata President Norio Nakajima said that the new plant in Thailand will be expanded. Eventually, it will become as big as one in Wuxi, near Shanghai, where Murata produces multilayer ceramic capacitors for consumer electronics. 

Murata Manufacturing is adapting to evolving geopolitical equations and changing business conditions. Presently, Murata is dependent on China for over half of its revenue. But the capacitor maker expects China’s shares in its revenues to go down, as the company looks towards the Indo-Pacific for future growth. 

Norio Nakajima said, “There is a risk of events happening beyond our control.” The Murata President took the example of an uncertain event like the US imposing a technology ban on China. So, it makes sense for Murata to run out of the Communist country before any such thing happens. 

He added, “It is imperative to diversify our supply chain.” Nakajima also pointed out that its key customers like Apple are also looking beyond China. This destroys the basic advantage that China had. A supplier would ideally want to stay close to its customers. And if the customers themselves start shifting out of a particular location, then there is no use staying in that location. 

China’s declining stature as a manufacturing hub

Also, China is losing the advantage of cheap labour and a huge working class with its changing demographics. The Murata President said, “The most populous country today may be China, but in 2030 that will be India, and further down the road it will be Africa.” 

He added, “Will those economies be aligned with China or the U.S.? We don’t know. We should be able to respond to both scenarios.”

China’s population is contracting at an alarming pace. It is estimated that China could see its population getting halved within the next 45 years. A slow birth rate of 1.3 and higher life expectancy is ensuring that China is ageing quickly. 

By 2050, 39 per cent of the Chinese population will be above the retirement age. This will take away the driving factor behind China’s manufacturing prowess- cheap and ample labour. So, multinational corporations and manufacturing giants like Murata see no sense in persisting with Beijing and are shifting production out of the Communist country. 

China growth seen slowing to 5.2% in 2022, modest policy easing expected

China growth seen slowing to 5.2% in 2022, modest policy easing expected

China growth seen slowing to 5.2% in 2022, modest policy easing expected

Read the original article

 
FILE PHOTO: Cargo ship carrying containers is seen near the Yantian port in Shenzhen, following the novel coronavirus disease (COVID-19) outbreak, Guangdong
 
·3 min read
 
 

By Kevin Yao

BEIJING (Reuters) – China’s economic growth is likely to slow to 5.2% in 2022, before steadying in 2023, a Reuters poll showed, as the central bank steadily ramps up policy easing to ward off a sharper downturn.

The expected 2022 growth would be lower than the 5.5% analysts had forecast in a Reuters poll in October, underlining multiple headwinds facing the world’s second-largest economy due to a property downturn, a crackdown on debt, tougher pollution measures and strict COVID-19 curbs which have hit consumption.

 

Gross domestic product (GDP) likely expanded by 8.0% in 2021, according to the median forecasts of 62 economists polled by Reuters, slower than an 8.2% rise seen in October’s forecast but still the highest annual growth in a decade.

Analysts attribute the solid 2021 expansion partly to the low base set in 2020, when the economy was jolted by COVID-19, which first emerged in China. The ensuing government lockdowns paralyzed activity across much of the country.

But momentum cooled markedly over the course of last year. GDP in the fourth quarter likely grew 3.6% from a year earlier, which would be the weakest pace since the second quarter of 2020, slowing from 4.9% in July-September, the poll showed.

On a quarterly basis, growth is forecast to rise to 1.1% in the fourth quarter from 0.2% in July-September, the poll showed.

The government is due to release 2021 and Q4 GDP data, along with December activity data, on Jan. 17 (0200 GMT).

Chinese leaders have pledged more support for the slowing economy, which is facing a fresh challenge from the recent local spread of the highly-contagious Omicron variant.

“To shore up economic activity, we think sufficient policy support will be provided, especially in H1, to ensure that this year’s economic growth does not fall below Beijing’s comfort level,” Tommy Wu at Oxford Economics said in a note.

China’s leaders aim to achieve economic growth of at least 5% in 2022 to keep a lid on unemployment, policy sources said.

MODEST EASING STEPS EXPECTED

With the new year expected to start off on a weak note, the People’s Bank of China (PBOC) is set to unveil more easing steps, though it will likely favour injecting more cash into the economy rather than cutting interest rates too aggressively, policy insiders and economists said.

Last year, policymakers focused on curbing property and debt risks which exacerbated the economic slowdown. But they have sought to fend off a sharper slowdown that could fuel job losses ahead of a key Communist Party Congress late this year.

The PBOC is likely to cut banks’ reserve requirement ratios (RRR) by 50 basis points (bps) in the first quarter of 2022, according to the poll.

Analysts expect the PBOC to cut the one-year loan prime rate (LPR), the benchmark lending rate, by 5 bps in the first quarter, followed by another 5 bps cut in the second quarter.

The PBOC last cut the RRR – the amount of cash that banks must hold as reserves – by a 50 bps on Dec. 15, its second such move last year. That was followed by a 5 bp cut in the one-year loan prime rate (LPR), the benchmark lending rate, on Dec. 20.

Policymakers have also pledged to step up fiscal support for the economy, speeding up local government special bond issuance to spur infrastructure investment and planning more tax cuts.

Consumer inflation will likely pick up to 2.2% in 2022 from 0.9% in 2021, before easing slightly to 2.1% in 2023, the poll showed.

(For other stories from the Reuters global economic poll:)

(Polling by Vivek Mishra and Devayani Sathyan in Bengaluru, Jing Wang in Shanghai; Reporting by Kevin Yao; Editing by Kim Coghill)

India Offers Potential ‘Gold’ for U.S. Leagues Amid China Tumult

India Offers Potential ‘Gold’ for U.S. Leagues Amid China Tumult

India Offers Potential ‘Gold’ for U.S. Leagues Amid China Tumult

 
·6 min read
 
 

In recent weeks, the Women’s Tennis Association decided to suspend future events in China as a response to the country’s failure to adequately address the sexual assault allegations made by WTA Tour player Peng Shuai. The White House, meanwhile, announced plans for a diplomatic boycott of the 2022 Beijing Olympics in response to the “ongoing genocide and crimes against humanity in Xinjiang.” U.S.-based sports leagues have long portrayed China as a lucrative international growth opportunity (none more so than the NBA). But if that opportunity is less viable today than it was just a few months ago, it is reasonable to wonder where else the big five sports leagues could find exponential growth abroad. “India is the other market where it makes sense to try and break in if you can,” said Sam Porter (co-managing partner, Necaxa). He sees a host of macro trends that indicate the second most populous nation in the world “could be an emerging pot of gold” for investors and sports properties alike in the decades ahead.

JWS’ Take: The Chinese opportunity is much further along than the one in India right now. But there are several reasons to believe India has potential to drive meaningful growth (the NBA has suggested it could be the next billion dollar market). For starters, the TAM is massive—and growing (around 1% YoY). And with a population of 1.39 billion, roughly 18% of the global population resides there.

More from Sportico.com

– ADVERTISEMENT –

The Indian economy is also trending up. GDP per capita is climbing around 5% per year, and private data suggests disposable income for Indian consumers will double over the next half-decade or so. Gerry Cardinale (founder and managing partner of RedBird Capital) added, “The [country’s] middle class is expected to double in the next decade to 800 million, and its spending share is projected to grow to over 80% [from 70%] in that same time period.”

In addition to the compelling macro-economic trends, India seems to offer a cultural fit for U.S. sports leagues. As Porter noted, “English and Hindi are officially the country’s first languages.”

The population at large has also shown a strong interest in sports. For perspective, 44% of Indian TV households watched a 2020 IPL cricket league match live (accounting for around 61 billion viewing minutes). And there are more than 300 million active basketball players within the country. “People talk about India, Asia and Africa as emerging media markets,” Porter said. “But India is actually very real because they love sports, and they are emerging as an economy.”

India still has plenty of work to do in terms of infrastructure and grassroots development. There isn’t nearly as much diversity, in terms of the sports people follow within the country, as you might find elsewhere. But the passion Indian sports fans show for their respective IPL and EPL clubs would lead one to believe they could grow to love American teams, too. Said Cardinale: “Everything we’ve learned is that the Indian fan has many similarities to the American fan, rooted in a strong passion for sports. But while the U.S. is ‘mature,’ in terms of the number of sports leagues available to fans, India is much more nascent with more room to run.”

Given the state-owned nature of many businesses in China, the U.S. sports leagues are bound to find it significantly easier to conduct commercial business in India. Some institutional investors have started to move money out of China, and toward India, for this reason.

They will find companies eager to invest in sports marketing and sports sponsorship there, too. Matt Walsh (managing partner, New Zealand Breakers) said that several India-based software and fin-tech companies have expressed interest in “large-scale” sponsorships since his club signed Indian basketball star Princepal Singh just a few weeks ago. That is despite not knowing if Singh will play meaningful minutes for the team. “The country is just so thirsty for a star athlete that [these companies] are willing to make an early bet on the player as he works his way towards the NBA,” Walsh said.

Walsh suggested the various pacts—particularly valuable since that they come from outside the team’s home market and do not encroach on existing partnerships or established asset classes—could end up being worth a couple million dollars in revenue. “There’s a lot of capital [in India], and if we’re strategic with how we market Prince and sell [his] story, there will be brands who want to be part of that,” he added.

The ongoing digitization of India is another trend that should excite U.S. sports leagues. A 2020 Cisco report projected the country will have 2.1 billion internet-connected devices (think: smartphones) by 2023, up from 1.5 billion in 2018. “The fact that mobile device connectivity in the Indian market is growing so rapidly means that rights holders have no legacy structural economic barriers in converting linear TV subscribers to streaming subscribers,” Cardinale explained. “They can go straight to streaming with minimal cannibalization—all upside—which is something every media player finds valuable.”

Smart money has begun to take notice of the Indian sports market. In recent months, RedBird Capital and CVC have invested in IPL teams. RedBird also took an ownership stake in Dream11, an Indian daily fantasy sports platform. The PE firm believes the number of DFS players will grow to 100 million within the next five years (today there are around 40 million).

It’s not going to make sense for every North American sports league to try to break into India (or to invest more heavily than they currently are). But for the NBA, MLS and MLB, sports that are played or watched in the country, it seemingly does.

The NBA and MLB are actively engaged in growing their presence there (MLS does not currently have a strategy specific to growing the league or its teams in India). Scott Levy (EVP, managing director, NBA Asia) explained that the NBA has taken a three-pronged approach to the market, “which includes grassroots and elite development, ensuring NBA games and localized content are widely available, and showcasing the NBA experience through live games and interactive fan events” over the last decade.

MLB opened an office in New Delhi in 2019 and has since initiated school programs and introduced a youth tournament called MLB Cup within the country.

As for the NFL, none of the 32 clubs bid for India as an International Home Marketing Area (the majority of bids aligned with cities where the league has an office). However, the NFL does have an existing broadcast deal in place with Star India, the Walt Disney Co. subsidiary, to broadcast live games each week, including Sunday Night Football, and the entirety of the NFL postseason.

It should be noted that India is not without its own human rights concerns. Strong anti-Muslim sentiment, fanned on by the current government, has led to discrimination and violence against a religious subset of the population.

China called Walmart stupid after it was accused of removing Xinjiang-made products from Sam’s Club

China called Walmart stupid after it was accused of removing Xinjiang-made products from Sam's Club

China called Walmart stupid after it was accused of removing Xinjiang-made products from Sam’s Club

 
·2 min read
 
 
Walmart Store
 
A Walmart store.Jonathan Wiggs/The Boston Globe via Getty Images
  • Chinese shoppers accused Walmart of removing products from Xinjiang from Sam’s Club.

  • The Communist Party said Walmart was showing “stupidity and short-sightedness.”

  • But Sam’s Club said no Xinjiang products were deliberately removed, Reuters reported.

China slammed Walmart after claims that it had removed products made in its Xinjiang region from Sam’s Club.

Shoppers in China had accused Walmart of removing the goods made in the Xinjiang province, where China has detained at least a million Uyghurs in prisons and detention camps, with many forced to labor in factories for little to no pay.

A Sam’s Club representative told Chinese analysts on a call last week that products from Xinjiang were not being deliberately removed, and called the accusations “a misunderstanding,” Reuters reported.

– ADVERTISEMENT –

The representative said people couldn’t find products from Xinjiang because users can’t search the app for products based on where they are from, Reuters reported.

But China on Friday criticized Walmart after the allegations.

The Communist Party’s Central Commission for Discipline Inspection claimed Sam’s Club was boycotting products from Xinjiang.

It said that “to take down all products from a region without a valid reason hides an ulterior motive, reveals stupidity and short-sightedness, and will surely have its own bad consequences,” Reuters reported.

It is unclear if this statement came before or after the call with analysts.

Walmart and Sam’s Club have not publicly commented on the allegations. Walmart did not respond to a request for comment from Reuters.

Two weeks ago President Joe Biden passed into law a ban on all imports from Xinjiang unless businesses can prove they were made without forced labor. It’s not clear whether the claims against Sam’s Club were related to the new law. Reuters reported that Chinese shoppers started criticizing Sam’s Club shortly after the ban.

Read the original article on Business Insider

‘China is uninvestable,’ says Bond king Jeffrey Gundlach

'China is uninvestable,' says Bond king Jeffrey Gundlach

‘China is uninvestable,’ says Bond king Jeffrey Gundlach

·Anchor, Editor-at-Large
·2 min read
 

Investors may want to think twice about putting their money to work in China, contends DoubleLine founder Jeffrey Gundlach. 

“China is uninvestible, in my opinion, at this point,” the bond king told Yahoo Finance in an interview at his California estate. “I’ve never invested in China long or short. Why is that? I don’t trust the data. I don’t trust the relationship between the United States and China anymore. I think that investments in China could be confiscated. I think there’s a risk of that.”

Gundlach’s comments came ahead of DoubleLine’s third annual Roundtable Prime investor event on Tuesday.

Some of Gundlach’s concerns on China played out in grand fashion last year. 

The ongoing crackdown on the operations of big Chinese internet companies such as Didi by the government has rocked investors in the space. The clamping down on the country’s biggest tech names has now led to a tightening of listing requirements by the Chinese government. 

To that end, Didi plans to delist from the New York Stock Exchange later this year not too long after a disastrous IPO (in large part because of Chinese authorities). 

DoubleLine founder Jeffrey Gundlach (right) tells Yahoo Finance investors need to carefully watch the yield curve.
 
DoubleLine founder Jeffrey Gundlach (right) tells Yahoo Finance China is uninvestable.

Meanwhile, the long reach of China’s government also hammered after-school tutoring companies such as TAL Education Group — shares of the name plunged about 95% in 2021. 

All of this is in addition to China’s ongoing fight against the rise of cryptocurrencies. 

The investing headwinds in the country show up in how the country’s key indexes performed in 2021. 

For instance, the Golden Dragon Index — which tracks the performance of mid- and large-cap Chinese stocks — plunged about 49% in 2021. The Wall Street Journal points out the total value of China’s onshore stocks rose 20% in 2021, underperforming the S&P 500’s advance. 

Gundlach is increasingly more optimistic on emerging markets, minus China (which he doesn’t think is an emerging market anymore). 

“I kind of think the next move, the big move is to enter emerging markets. We’ve been in zero emerging market equities this whole time. And, we’ve been underweight until very recently emerging market debt as well,” added Gundlach.

Days after Tesla opened a store in Xinjiang, White House press secretary Jen Psaki says the private sector ‘cannot look the other way’ when it comes to human-rights abuses of Uyghur Muslims

Days after Tesla opened a store in Xinjiang, White House press secretary Jen Psaki says the private sector 'cannot look the other way' when it comes to human-rights abuses of Uyghur Muslims

Days after Tesla opened a store in Xinjiang, White House press secretary Jen Psaki says the private sector ‘cannot look the other way’ when it comes to human-rights abuses of Uyghur Muslims

White House press secretary Jen Psaki speaks at a press briefing at the White House in Washington, Tuesday, Jan. 4, 2022.
 
Jen Psaki, the White House press secretary, at a press briefing at the White House on Tuesday.AP Photo/Andrew Harnik
  • Human Rights Watch has estimated that China has detained 1 million Uyghur Muslims in Xinjiang.

  • President Joe Biden signed the Uyghur Forced Labor Prevention Act in late December.

  • It bans imports from the region unless companies can prove forced labor was not used to make them.

Following the opening of a Tesla store in Xinjiang, China, the White House press secretary, Jen Psaki, said on Tuesday that private-sector companies that fail to address forced labor and human-rights abuses within their supply chains “face serious legal, reputational, and customer risk” both internationally and in the US.

Human Rights Watch has estimated that Chinese authorities have detained 1 million Uyghur Muslims in “re-education” camps where they’ve been subjected to human-rights abuses. People who’ve escaped from the camps have given detailed accounts about the abuses they endured, including beatingsforced labormedical experiments, and forced abortions.

China has denied all allegations of abuse against the Uyghur population.

– ADVERTISEMENT –

In late December, President Joe Biden signed the Uyghur Forced Labor Prevention Act, which bans imports from the Xinjiang region unless companies can prove they were not produced using forced labor. Several companies had lobbied to weaken the bill, including Apple, Coca-Cola, and Nike, The New York Times reported.

“I can’t speak to the specific situation of one company, but as a general matter we believe the private sector should oppose the PRC’s human-rights abuses and genocide in Xinjiang,” Psaki said when asked about Tesla. “The international community, including the public and private sectors, cannot look the other way when it comes to what is taking place in Xinjiang.”

Tesla did not immediately respond to Insider’s request for comment.

Read the original article on Business Insider

China’s troubled ride-hailing giant Didi reports $4.7 bn Q3 loss

China's troubled ride-hailing giant Didi reports $4.7 bn Q3 loss

China’s troubled ride-hailing giant Didi reports $4.7 bn Q3 loss

Read the original article

 
Chinese ride-hailing giant Didi was hit by a regulatory crackdown over cybersecurity concerns, and its stock has since plummeted (AFP/Jade GAO)
 
 
·2 min read
 
 

Chinese ride-hailing giant Didi Global on Thursday reported a $4.7 billion loss in the third quarter, as its revenues plummeted because of a regulatory crackdown by Beijing.

The troubles for the firm — once called China’s Uber — began after it listed in New York in June, seemingly against the wishes of Beijing.

China then shocked investors by launching cybersecurity investigations into the company.

 

Didi was removed from app stores, and its stock has since fallen almost two-thirds in value. The firm announced this month it would delist from the New York Stock Exchange and prepare to shift to Hong Kong.

It reported a third-quarter loss of $4.7 billion, the bulk of the company’s losses for the year to date, in a regulatory filing to the US Securities and Exchange Commission on Thursday.

It recorded an operating loss of $6.3 billion for the first nine months of the year.

Total revenues slipped 11 percent in the last quarter, after China removed Didi from domestic app stores in July, preventing new users from signing up.

China recently proposed a new law under which companies seeking foreign IPOs would need to register with the securities regulator. A listing will be blocked if it is considered a threat to national security.

Some of China’s biggest firms have listed in the United States in search of more developed markets and fresh lines of cash from a massive investor base, but enthusiasm has wavered as tensions have soared between Washington and Beijing.

Instead, Beijing has encouraged companies to list on domestic exchanges to protect information and prevent data from heading overseas, and to develop China’s capital markets.

Beijing’s regulatory crackdown has expanded during the last year to curb runaway growth in China’s powerful tech and internet sectors, and to reign in the influence of big businesses.

lxc/rox/qan

Lithuanian PM discusses China pressure with top U.S. diplomat Blinken

Lithuanian PM discusses China pressure with top U.S. diplomat Blinken

Lithuanian PM discusses China pressure with top U.S. diplomat Blinken

Read the original article

 
Lithuanian embassy in Beijing

VILNIUS (Reuters) – Lithuanian Prime Minister Ingrida Simonyte on Tuesday discussed U.S. support for Lithuania in response to Chinese economic pressure with Secretary of State Antony Blinken, her office said.

China downgraded its diplomatic ties with Lithuania last month after the opening of a representative office by Taiwan in Vilnius under its own name.

China has told multinational companies to sever ties with Lithuania or face being shut out of the Chinese market, and the Asian economic power has told Continental AG, the German car tyres and parts maker, to stop using parts made in Lithuania.

– ADVERTISEMENT –

China claims democratically governed Taiwan as its own territory and has in the past two years stepped up military and diplomatic pressure to assert its sovereignty claims, fueling anger in Taipei and deep concern in Washington.

In a statement, Simonyte’s office said, “the Prime Minister has thanked the U.S. for its expressed solidarity and support to Lithuania.””U.S. support to Lithuania, in response to Chinese economic pressure, was discussed during the call,” the statement said.

“It is important that like-minded countries which share respect to international rules must be in solidarity in face of economic pressure. We must continue to share information and coordinate our actions inside the EU and with U.S. and with democratic states in Indian-Pacific ocean region,” Simonyte was quoted in the statement as saying.

(Reporting by Andrius Sytas in Vilnius; editing by Jonathan Oatis)

Amazon boosted its business in China by blocking reviews on books by leader Xi Jinping and following Communist Party ‘edicts,’ says Reuters investigation

Amazon boosted its business in China by blocking reviews on books by leader Xi Jinping and following Communist Party 'edicts,' says Reuters investigation

Amazon boosted its business in China by blocking reviews on books by leader Xi Jinping and following Communist Party ‘edicts,’ says Reuters investigation

 
Amazon warehouse
 
An employee handles packages at the Amazon’s Bretigny-sur-Orge warehouse in France.THOMAS SAMSON/AFP via Getty Images
  • Amazon worked with the Chinese government to restrict reviews on texts by the Communist Party leader.

  • Reuters revealed this is part of the US e-commerce giant’s mission to expand its reach in China.

  • They created the portal China Books, a partnership with the Chinese government to sell approved literature.

Amazon agreed to cooperate with Chinese propaganda after the government issued them an “edict,” Reuters found an investigation.

In 2019, Amazon was selling a collection of texts by President Xi Jinping — including “Xi Jinping: The Governance of China” — when Beijing demanded the US e-commerce giant turn off their rating and comments feature after a negative review surfaced.

These elements are used on the vast majority of Amazon’s products, but they complied with the Chinese government’s demands and removed them from their Chinese site.

 

Now, on Amazon.cn, the government-published book has 0 customer reviews, and one cannot post a comment.

Reuters news agency said it had spoken with more than two dozen people who have been involved in Amazon’s China operation. The special report reveals “how the company has survived and thrived in China by helping to further the ruling Communist Party’s global economic and political agenda.”

In their investigation, Reuters revealed that Amazon’s compliance with the Chinese government instruction was a part of a “decade-long effort” by Amazon to win support from Xi’s regime and grow their presence in one of the world’s biggest markets.

Amazon had historically struggled to sell some products in China, an internal 2018 briefing document revealed, Reuters reports.

“Ideological control and propaganda is the core of the toolkit for the communist party to achieve and maintain its success,” the briefing document said, according to Reuters. “We are not making judgement on whether it is right or wrong,” it added.

In response to this, Amazon launched the ‘China Books’ project. Outlined in the 2018 briefing document, the project between the Chinese Government and Amazon created a portal to specifically sell books by the government.

China Books eventually offered more than 90,000 publications for sale but did not generate significant revenue, said the report.

Xi Jinping Chinese Communist Party 100th anniversary
 
Chinese President and Chairman of the Communist Party Xi Jinping appears on a large screen as performers dance during a mass gala marking the 100th anniversary of the Communist Party on June 28, 2021 at the Olympic Bird’s Nest stadium in Beijing, China.Kevin Frayer/Getty Images

In the ‘Chinese Governance’ section of the site, the series of books “Xi Jinping: The Governance of China,” compilations of speeches by the Chinese President, are the only titles available.

Many books on the site are apolitical and focus on geography or cooking, for example. However, many take a political stance: all in support of China’s Communist Party.

They include “Incredible Xinjiang: Stories of Passion and Heritage,” describing life in Xinjiang, where the UN has stated one million Uyghur Muslims have been forced into totalitarian re-education camps.

However, the book claims ethnicity is “not a problem” in the province, regurgitating the message of the Chinese government, which denies any mistreatment or abuse of ethnic minorities.

In responding to questions from Reuters, Amazon said it “complies with all applicable laws and regulations, wherever we operate, and China is no exception.” It added that “as a bookseller, we believe that providing access to the written word and diverse perspectives is important. That includes books that some may find objectionable.”

The state-owned firm that partners with Amazon on China books, China International Book Trading Corp, or CIBTC, said the venture is a “commercial relationship between two enterprises.” China’s National Press and Publication Administration, the state propaganda arm with which Amazon has had a partnership, had no comment when Reuters approached it.

Read the original article on Business Insider

Special Report-Amazon partnered with China propaganda arm to win Beijing’s favor, document shows

Special Report-Amazon partnered with China propaganda arm to win Beijing's favor, document shows

Special Report-Amazon partnered with China propaganda arm to win Beijing’s favor, document shows

Read the original article

 
·13 min read
 
 

By Steve Stecklow and Jeffrey Dastin

LONDON (Reuters) – Amazon.com Inc was marketing a collection of President Xi Jinping’s speeches and writings on its Chinese website about two years ago, when Beijing delivered an edict, according to two people familiar with the incident. The American e-commerce giant must stop allowing any customer ratings and reviews in China.

A negative review of Xi’s book prompted the demand, one of the people said. “I think the issue was anything under five stars,” the highest rating in Amazon’s five-point system, said the other person.

 

Ratings and reviews are a crucial part of Amazon’s e-commerce business, a major way of engaging shoppers. But Amazon complied, the two people said. Currently, on its Chinese site Amazon.cn, the government-published book has no customer reviews or any ratings. And the comments section is disabled.

Amazon’s compliance with the Chinese government edict, which has not been reported before, is part of a deeper, decade-long effort by the company to win favor in Beijing to protect and grow its business in one of the world’s largest marketplaces.

An internal 2018 Amazon briefing document that describes the company’s China business lays out a number of “Core Issues” the Seattle-based giant has faced in the country. Among them: “Ideological control and propaganda is the core of the toolkit for the communist party to achieve and maintain its success,” the document notes. “We are not making judgement on whether it is right or wrong.”

That briefing document, and interviews with more than two dozen people who have been involved in Amazon’s China operation, reveal how the company has survived and thrived in China by helping to further the ruling Communist Party’s global economic and political agenda, while at times pushing back on some government demands.

In a core element of this strategy, the internal document and interviews show, Amazon partnered with an arm of China’s propaganda apparatus to create a selling portal on the company’s U.S. site, Amazon.com – a project that came to be known as China Books. The venture – which eventually offered more than 90,000 publications for sale – hasn’t generated significant revenue. But the document shows that it was seen by Amazon as crucial to winning support in China as the company grew its Kindle electronic-book device, cloud-computing and e-commerce businesses.

The 2018 briefing document spells out the strategic stakes of the China Books project for Jay Carney, the global head of Amazon’s lobbying and public-policy operations, ahead of a trip he took to Beijing. “Kindle has been operating in China in a policy grey area,” the document stated, and noted that Amazon was having difficulty obtaining a license to sell e-books in the country.

“The key element to safeguard” against its license problem with the Chinese government “is the Chinabooks project,” the document stated.

The document also noted: “Amazon.com/China books project has also gained wide recognition among Chinese regulators.”

LIFE IN XINJIANG

The books include many apolitical titles, such as Chinese language textbooks, cookbooks and children’s bedtime stories. But they also include titles that amplify the Communist Party’s official line.

One book extols life in Xinjiang, where United Nations experts have said China interned one million ethnic Uyghurs in a network of camps. The book – “Incredible Xinjiang: Stories of Passion and Heritage” – discusses an online comedy show situated in the region. The book quotes an actor who plays a Uyghur “country bumpkin” saying that ethnicity is “not a problem” there. That echoes the position of Beijing, which has denied mistreating minority groups.

Some books portray China’s battle against the COVID-19 pandemic, which began in the Chinese city of Wuhan, in heroic terms. One is titled “Stories of Courage and Determination: Wuhan in Coronavirus Lockdown.” Another begins with commentary from Xi: “Our success to date has once again demonstrated the strengths of CPC (the Communist Party of China) leadership and Chinese socialism.”

The state-owned firm that partners with Amazon on China books, China International Book Trading Corp, or CIBTC, told Reuters that the venture is a “commercial relationship between two enterprises.” China’s National Press and Publication Administration, or NPPA, the state propaganda arm with which Amazon has had a partnership, had no comment.

In response to questions, Amazon said it “complies with all applicable laws and regulations, wherever we operate, and China is no exception.” It added that “as a bookseller, we believe that providing access to the written word and diverse perspectives is important. That includes books that some may find objectionable.”

Amazon said it has “a wide selection of books” on China, and the China Books portal “is an additional channel for serving our Chinese readers in the United States and elsewhere.” CIBTC is “just one of the millions of selling partners around the world offering products in our stores.”

The new details about Amazon’s China strategy demonstrate the challenges Western companies face in accessing the world’s most populous market – and in coping with an authoritarian regime that has been tightening control over public discourse.

The company’s compromises with Beijing contrast with its efforts to get around regulators in the world’s two largest democracies. In India, Reuters this year has documented how Amazon circumvented local regulations and, to promote its own brands, rigged search results on its Indian website. In the United States, Reuters detailed how Amazon gutted or killed state privacy bills designed to protect consumers.

Amazon said it has always complied with the law in India and doesn’t favor its private-label products in search results. Regarding the United States, the company said it prefers U.S. federal privacy legislation, and that it protects consumers’ privacy and doesn’t sell their data.

Some companies have responded to Beijing’s demands by leaving the market. Yahoo recently exited China and Microsoft Corp’s LinkedIn announced it would pull out some of its services. Both cited the country’s difficult business environment and regulatory requirements.

Amazon, by contrast, has grown into a powerful economic force in China in recent years, providing lucrative export opportunities to thousands of Chinese businesses while growing its own industry-leading cloud-services unit. Amazon Web Services, or AWS, is now one of the largest providers to Chinese companies globally, according to a report this year by analysis firm iResearch in China, and people who have worked for AWS.

Still, by 2018, Amazon was receiving an “increasing number of requests from (Chinese) watchdogs to take down certain content, mostly politically sensitive ones,” stated the briefing document prepared that year for Carney. He previously served as communications director for U.S. President Joe Biden, when Biden was vice president, and as press secretary for President Barack Obama.

Amazon declined to make Carney available for an interview.

According to the briefing document, the Cyberspace Administration of China, or CAC, asked Amazon in 2018 to take down a “link to China’s new blockbuster film Amazing China because of especially harsh user reviews.” The CAC is responsible for online security and content regulation.

“Amazing China” praises the country’s accomplishments since Xi became president in 2013. CAC wanted the link removed from IMDb, an Amazon-owned website of movie information and reviews.

Amazon’s China office responded to CAC that “it is difficult for Amazon China to accommodate such requests, and we’ll relay the message to” Amazon headquarters “and seek their views about possibilities,” the briefing document stated.

The film remains on IMDb’s U.S. website. Shortly after the request, some negative reviews disappeared, archived screenshots of IMDb.com on archive.org show. Others remain, and “Amazing China” currently has an overall rating of just 2.3 out of a top score of 10. Some reviews call it “pathetic,” “garbage” or “government propaganda.”

“Some reviews submitted for the title ‘Amazing China’ were removed because they violated our user review content guidelines, with the majority being off topic,” Amazon told Reuters. “IMDb is not aware of any request from external parties (including the Chinese government) to do anything about reviews for this title.”

CAC didn’t respond to a request for comment.

‘WINK AND A NOD’

Amazon entered China in 2004 through a $75 million deal to acquire Joyo.com, an online book-and-media seller. Eventually, Amazon wanted to introduce e-books and its popular Kindle reading devices to the Chinese market.

To accomplish that, it worked with the General Administration of Press and Publication, or GAPP, a regulator that engages in state censorship in its role as overseer of publications in China. NPPA now handles most of GAPP’s responsibilities. NPPA, in turn, is overseen by the Communist Party’s Publicity Department, which was previously known as the Propaganda Department.

According to a former Amazon executive involved in talks with China, the company secured some, but not all, of the government approvals it needed to sell Kindle devices and e-books. That situation gave the government leverage over the retailer, the former executive said. Amazon’s public-policy team came up with the China Books project as a novel way “to get what we wanted on Kindle and other things,” the person said. “It was a wink and a nod.”

Amazon soon began working with GAPP to set up China Books, according to the briefing document. The company planned to tout the portal to Chinese authorities as Amazon’s only store named after a country, the document said. Amazon dedicated several employees to the effort, which involved CIBTC, the government book-trading company, which the document described as “the executing body from GAPP.”

A photograph on CIBTC’s website shows Chinese officials toasting the launch of the project at a hotel in Beijing in September 2011.

In October 2012, China Books was awarded the title, “a key national culture export” project, by a group of Chinese government bodies, including GAPP, as well as the entity now known as the Publicity Department of the Communist Party of China. Two months later, Amazon launched its electronic-books business in China and soon began selling Kindles.

By the end of 2017, China had become Kindle’s largest global market, “accounting for 40%+ of our world device sales volume,” according to the 2018 briefing document. By then, Amazon had added a Chinese e-book store to its American website and had translated 19 books.

And Carney, the top public-policy executive who then reported to Amazon founder Jeff Bezos, went to China in April 2018. There, he told an alternate member of the Communist Party central committee that Amazon would make “every effort” to promote China Books and make it “bigger and stronger,” according to a CIBTC press release.

The briefing document prepared for Carney stated: “Both China Books and Kindle Chinese eBook Store are Amazon China’s main commitment to assist China in ‘Going Abroad,’ an umbrella project that aims to promote Chinese culture to the world.”

Amazon’s China Books webpage prominently displays CIBTC’s name, but doesn’t disclose that it’s a project that Amazon created in a partnership with a Chinese government agency.

“Details about the company are readily available online,” Amazon told Reuters, “and CIBTC has placed its name and logo prominently throughout its page. Our relationship with CIBTC is entirely appropriate.”

Eventually, the China Books project flopped financially, according to a person who has been involved in it. Few of the portal’s titles have sold well, and Amazon even shipped back books because its warehouses lacked space for them.

Nonetheless, the China Books project continues. The Chinese-language version of “Xi Jinping: The Governance of China Volume Three” – is listed first on China Books’ “BEST SELLER” page. It recently showed a sales rank of 1,347,071. Another “best seller,” about COVID-19, was ranked 10,654,483. The Xinjiang title, which Reuters purchased, had been ranked 13,441,455.

But sales weren’t the goal, according to the person who has been involved in the project. “It’s a high-level photo-op,” part of a “soft-power campaign to basically put the books out there and just have it be visible.”

In its statement to Reuters, CIBTC, the government book-trading company, said it doesn’t “rank books sold through Amazon.” It didn’t elaborate.

A THREAT TO ‘RETALIATE’

Amazon continued its Chinese expansion in 2013, announcing the introduction in Beijing of Amazon Web Services, its cloud-computing business. At the time, no Chinese law regulated cloud services, the 2018 briefing document noted.

In 2016, China began taking actions that made it more difficult for foreign cloud-computing firms, such as AWS, to operate in the country.

The government began requiring cloud providers to hold a new license that only Chinese-owned companies could obtain, according to the briefing document. “Regulators have since become very hostile” toward AWS, the 2018 document stated.

The result was that Amazon took an unusual step for the company: It handed off its cloud technology to local companies so it could keep operating in China. The Chinese companies – not Amazon – were responsible for “monitoring and taking down illegal content, collecting and reporting basic information of customers … and working with PRC (the People’s Republic of China) authorities on all compliance-related inquiries that may arise,” the 2018 document stated.

In its statement to Reuters, Amazon said that AWS, as a foreign cloud provider, has to license or sell technology to local partners in China in order to have a presence there.

That structure didn’t shield AWS from Chinese pressure, however.

In February 2018, China’s Ministry of Public Security, or MPS, called AWS to a meeting, the briefing document stated. MPS threatened to “retaliate” against Amazon unless it removed content and blocked a website it hosted in the United States for Guo Wengui, a Chinese dissident. AWS refused, the document said. But the company asked Guo to take an action that exposed the dissident’s Internet Protocol, or IP address, and AWS “provided to MPS” this data, the document stated. An IP address is a unique code that identifies a computer accessing the internet.

The ministry “recognized our effort to find a solution, though not … to their satisfactory level,” the document stated.

The 2018 briefing document advised Carney to raise the government’s request on Guo when meeting a top Ministry of Commerce official in Beijing, and stress that China shouldn’t make requests that involve data stored abroad.

Asked about the Guo incident, Amazon confirmed it received the Chinese government’s request, but said it “did not provide any non-public information or any other customer information.”

The commerce ministry said Guo wasn’t discussed at the meeting with Carney. Amazon didn’t say whether Guo came up.

An employee for MPS said the ministry doesn’t respond to requests for comment. An attorney for Guo said Guo had no comment.

AWS’s China business continues to grow. Despite being blocked from selling cloud services to the government and some state-owned enterprises, AWS has landed key customers in China, say people familiar with the matter.

Among them are two Chinese companies, Tiktok developer ByteDance and video-surveillance firm Hikvision, as well as multinationals Nike, Samsung and Philips, according to the 2018 briefing document and a 2019 blog on AWS’s website. Philips declined to comment; the other four companies didn’t respond to requests for comment.

In June, AWS announced it was expanding further in the country, “to support the demands of our growing customer base in China.”

(Reporting by Steve Stecklow in London and Jeffrey Dastin in San Francisco. Additional reporting by the Reuters Shanghai newsroom. Editing by Peter Hirschberg.)