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Qatar launches biggest Silk Road Exhibition in Middle East – SRE 2019

In a major shift in regional and global strategy, Qatar has launched the biggest 10-year platform on trade and investments in the Middle-East titled “Silk Road Exhibition (SRE 2019)” from 3rd-5th November 2019, to establish closer ties in investments, trade and diplomacy with China and the Belt and Road countries.

The shift comes after Qatar attended the 2nd Belt and Road Forum in April 2019 with a delegation consisting of Minister of Transport and Communications H E Jassim bin Saif Al Sulaiti and Minister of Commerce and Industry H E Ali bin Ahmed Al Kuwari. The same ministries have now launched SRE 2019 to host government delegates and businessmen from over 50 countries to diversify it’s business and diplomatic interests in the region and integrate itself with China and BRI.

The Ministry of Transport and Communications (MOTC) and Qatar Chambers is aiming to enable invited countries to participate with all their trade, manufacturing, service and logistics sectors to meet under one roof to share experiences and investments; and close major business deals with Qatari enterprises and among themselves. According to the official Qatar 2030 strategy, there is a qualitative shift of Hamad Port and Logistics Area, and the future development plans require a lot of services that may be provided by the participating companies of the Belt and Road partners. “Qatar’s position in the region helps it to play an important role in the Belt and Road Initiative, especially with its economic and geographical components,” said Gui Hanfeng, chairman of Global Economic Development Forum (GEDF), a global platform to bolster co-operation as well as economic, trade and cultural coordination among nations.

The statement assumes significance considering that the Qatar Chamber (QC) last year signed a memorandum of understanding with the China Council for the Promotion of International Trade to join the Silk Road Business Council.
The presence of shipping lines between the two countries contributes to the growth of economic relations, and also supports investment opportunities between them, he said, adding the 2022 FIFA World Cup and the Qatar National Vision 2030 make it an ideal environment for attracting investment, which is expected to see progress and prosperity under these incentives.

The invited sectors on SRE include Customs Authorities, Investment Authorities, Shipping and transportation companies by sea, air and land, Logistics Services companies, Port construction and development companies, Dry Dock (Shipyards) Developers, Construction Companies, Insurance companies, Shipbuilders, Container Builders, Oil & Gas Tankers Builders. Land Freight Trains, Port Management companies, Industrial and Commercial products of countries located on
the sea and air silk line, Navigation Technology Management, Navigation Universities and Training Institutes, Security and safety companies for Shipping Lines, International organizations and companies specialized
in the same field, Consulting Companies, Cruise Ships, Navigation & Meteorological System, Cargo Packaging Equipment, Courier Express, Logistic Zone, Design and Construction of Warehouse Providers, Environmental and Pollution Control Technology and Manufacturing Companies.

The participating countries at SRE 2019 will include China, Pakistan, Turkey, India, Iran, Iraq, Japan, Korea, Oman, Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

SRE 2019 has also allocated a separate pavilion for Pakistan where it’s expecting a strong participation from the government and private enterprises due to its central role in the development of Belt and Road in South Asia through CPEC and it’s strong relevance to Qatari Vision 2030 due to historical close business and diplomatic ties.

Note: For any information regarding participation in SRE 2019, please feel free to get in touch at info@obortunity.org

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Zong 4G First to Launch Prepaid and Postpaid Roaming Bundles for China

Zong 4G has become the first Pakistani telecom operator to offer both prepaid and postpaid roaming bundles for China as part of its strategy of offering seamless services for its customers.

Keeping customers’ convenience in mind, these roaming bundles for China are being offered to ensure that the customers can enjoy Zong 4G’s seamless services while traveling.

Both Zong 4G’s prepaid and postpaid customers can avail the relevant roaming bundles for their travels to China. Postpaid customers can avail the package by dialing 310 helpline, which includes 60 voice minutes, 60 SMS and 3GB of data at an affordable rate of PKR 3000 plus taxes.

Keeping in mind flexibility, Zong 4G is offering two convenient roaming bundles for its prepaid customers. The prepaid customers can subscribe to the roaming bundles by dialing *4255# to consume 300 Voice minutes, 300 SMS for PKR 2000 plus taxes or dialing *4255# to consume 150 Voice minutes, 150 SMS for just PKR 1000 plus taxes.

Commenting on the launch of these industry-first roaming bundles, Zong 4G’s Spokesperson said, “As a customer-centric company, Zong 4G has always aimed at offering our customers with the best in class services and solutions. The launch of these two exciting bundles ensures that our customers can now make and receive calls, send and receive messages and stream the web hassle-free.”

As a company that believes in innovation and world-class customer experience, Zong 4G is geared to meet to the needs of its customers who travel for both business and leisure.

Source: Propakistani

Dated on: 6/9/2019

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Huawei to put South Asian Regions Headquarters in Pakistan

Vice President of Huawei Group, Mark Xueman has announced that Huawei will invest $100 million in Pakistan this year, in his recent meeting with Pakistan ́s Federal Minister for Planning & Development Makhdum Khusro Bakhtyar.

The Investment will be utilised to upgrade the technical support centre of the company in Pakistani along with the establishment of Regional Headquarters in Islamabad.

¨Pakistan is a strategic market for China and Huawei, therefore the company will set up Headquarters for South Asian region in Islamabad¨

The project will cost around $55 million and will create employment opportunities for young engineers across the country.

Besides the Minister for Planning & Development, Planning Secretary Zafar Hasan and China-Pakistan Economic Corridor (CPEC) Project Director Hassan Daud were also present to discuss the projects Huawei’s VP plans to invest.

China-Pakistan Economic Corridor is the Pakistan arm of the Belt & Road Initiative with a collection of US$62 billion worth of infrastructure projects under construction across the country.

While discussing the details about its upcoming projects in Pakistan, Huawei’s VP said;

“Huawei will also invest $15 million in its technical support centre in Pakistan and it will also hire more workforce for it, taking the number of its staff from 600 to 800 this year. Huawei is eager to initiate more projects in Pakistan on grant funding from the Chinese Government.”

Meanwhile, Planning Minister Khusro Bakhtyar appreciated Huawei’s continued efforts to equip Pakistan with modern technology & infrastructure. He said that the world’s leading telecom giant can boost Information and Communications Technology (ICT) sector of the country.

Minister mentioned that Huawei not only has a 25% share in the mobile phone industry of Pakistan but is also the top tax-paying Chinese company in the Country.

Government of Pakistan is looking forward to Huawei to contribute to its e-governance initiative as well in centralising data to improve efficiency and productivity.

Source: Belt and Road News

Dated on: July 19, 2019

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Chinese tariffs hit US food exporters, leaving other nations to make hay while the sun shines

At the start of the summer, a group of officials from Maine wrote to US President Donald Trump, urging financial support for the state’s iconic lobster industry.

“One of the first victims of retaliation imposed by China after the initial round of tariffs was lobster shipped from Maine,” wrote Maine Senators Angus King and Susan Collins, along with state Representatives Chellie Pingree and Jared Golden.

China had become the second largest importer of Maine lobster, buying US$128.5 million in the second half of 2017, before increasing purchases by 169 per cent over the first half of 2018.

But then the tariffs hit, and last year, the market died and US lobster exports to China fell by 80 per cent in 2018.

China has not lost its taste for the delicacy: over the first half of 2019, Canadian lobster sales to China were almost equivalent to their total for 2018, according to the Associated Press, as the same species of lobster exported from Maine is also found in waters off Nova Scotia and New Brunswick.

On Sunday, things got worse for American lobstermen – along with food producers across numerous industries – when a new raft of Chinese tariffs further jeopardised the market share for American food exporters in the world’s most populous nation.

With frozen Maine lobsters now attracting a tariff of 45 per cent, after an increase of 10 per cent, Canadian fishermen can look forward to more and bigger paydays ahead, leaving Maine’s political leaders to continue pondering “the blow of Chinese tariffs on a hallmark American industry that has done nothing to deserve the punishment that it is presently forced to bear”.

Soybeans, wheat and pork were also on the new tariff list, and the US’ loss will be other nations’ gain. With 1.4 billion mouths to feed, Chinese buyers are sourcing their food from nations with lower-tariff access to Chinese ports, a trend that will deepen as tariffs on the US rise.

According to Darin Friedrichs, a soybean analyst working for INTL FCStone in Shanghai, “yellow soybeans are the only ones that matter”, when it comes to US sales to China. The tariff on yellow beans has risen to 33 per cent, compared to just 3 per cent from Brazil and Argentina, China’s other major suppliers.

The blow of Chinese tariffs on a hallmark American industry that has done nothing to deserve the punishment that it is presently forced to bear Maine’s political leaders

Unsurprisingly,US soybean farmers have fairly negative views on the trade war, which has allowed Brazilian rivals to grow their market share in China to 77 per cent over the first nine months of the 2018/19 market year, while their share has fallen to just 10 per cent, according to the US Department of Agriculture (USDA).

A survey of 400 US farmers released on Tuesday found that 71 per cent are not expecting a trade war resolution soon. The survey, conducted by Purdue University in Indiana, also found that 71 per cent of farmers think that government subsidies have helped offset the effects of tariffs, while 58 per cent expect more help in 2020.

The subsidies may well be needed as a 30 per cent tariff differential on beans from Brazil and Argentina will not be attractive to Chinese buyers, who were touring Argentinian facilities in August, looking for cheaper substitutes for US exports and competition for those from Brazil.

The situation with Argentina is complex, but the country’s traders are hoping that political machinations do not stop it from becoming a rival to Brazil in the US’ absence having returned with a bumper crop this year after drought destroyed the nation’s soybean crop in 2018.

“The Argentinian market in general is benefiting from the prices China is paying, or at least from the loss of ability for China to go to the US,” said Rogier Keviet, a soybean trader at Agree Market in Buenos Aires.

The Argentinian market in general is benefiting from the prices China is paying, or at least from the loss of ability for China to go to the US,Rogier Keviet

However, its ability to plug the gap has been damaged by a plunging peso, which lost 27 per cent against the US dollar the day after pro-business President Mauricio Macri lost a primary to left-wing opponent Alberto Fernandez in August.

“When you have a currency devaluation of 27 per cent in one day, the normal reaction of the farmer is to sit on the beans and wait for more certainty. Over the past year, physical soybeans have been the best savings a farmer could have. It always retains the value, that is the best thing to do,” said Keviet.

American wheat farmers, meanwhile, have also been losing out to their Canadian rivals. In August, “Canada’s share of total Chinese imports of wheat has rocketed above 60 per cent in market year 2018/19, up from 32 per cent on 2017/18, as US wheat exports to China have plunged,” the USDA wrote in a report last week.

US wheat flours, grains, starches and seeds are now subject to a range of higher tariffs of up to 90 per cent, while tariffs on US frozen pork have risen to 72 per cent at a time when China is desperate for imports.

Even with tariffs at 62 per cent, the National Pork Producers’ Council complained that “America’s pig farmers and their families are patriots who are demonstrating enormous commitment to the greater good of our country as they shoulder a disproportionate share of trade retaliation against the US”.

That was before an African swine fever outbreak threatened to decimate 50 per cent of China’s pig population by the end of 2019, according to Rabobank, increasing the need for imports of the popular meat.

The latest USDA data, for the week ending August 15, showed that far from taking advantage, US pork exports to China are declining, despite desperation in Beijing to ensure prices do not spike further. That week, US farmers exported just 6,900 metric tonnes of pork to China, compared to 19,484 metric tonnes over the same week a year earlier. Instead, the market is going to European rivals, particularly Spain and Germany, as well as growing agricultural power Brazil.

And while US goods have been getting more expensive for Chinese importers, many products from the rest of the world have become cheaper due to lower tariffs.

In a June report, Chad Bown of the Peterson Institute of International Economics, found that since the beginning of 2018, China has increased tariffs on US exports to an average 20.7 per cent.

“But also striking for American farmers, companies, and workers is that China has reduced tariffs on competing products imported from everyone else to an average of only 6.7 per cent,” Bown said, noting that at the beginning of last year, products from the US and other exporting nations were both subject to an average tariff of just 8 per cent.

Dated on: 9/5/2019
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Yuan’s fall may increase Pakistan’s trade deficit with China

ISLAMABAD: 

The recent currency devaluation by China, which has brought the yuan-dollar parity to the lowest level since 2008, as part of its efforts to offset the impact of its tariff war with the United States, doesn’t augur well for Pakistan.

The yuan’s sharp devaluation means that, all else equal, Pakistan’s exports to China will become less competitive, while imports from China will become cheaper. The devaluation, combined with slowdown of the Chinese economy, is likely to exacerbate Pakistan’s trade imbalance with its single largest trading partner.

Exchange rate movements by themselves have a limited impact on competitiveness, which is essentially a function of productivity of the factors of production and technological and managerial efficiency with which the resources are combined. In the absence of productivity and efficiency, currency depreciation or devaluation normally doesn’t significantly shore up exports.

Thus during FY19, the rupee was allowed to shed its value drastically but exports remained stagnant.

However, as in the case of China, if exports are otherwise competitive, the downward movement of the exchange rate can be an effective response to an increase in tariffs (US) or imposition of regulatory duties (Pakistan). Hence, the currency depreciation may hit the bull’s eye for one economy and may come a cropper for another.

In recent years, Pakistan’s massive trade deficit relative to the size of the economy has been a major cause of concern for both the government and businesses.

From $22.16 billion in FY15, the trade deficit went up to $23.9 billion in FY16. The next two years saw the trade imbalance balloon to $32.58 billion and $37.58 billion. In FY19, the trade deficit was brought down to $31.82 billion.

However, the $5.76 billion reduction in the trade deficit was undergirded by the deceleration of economic growth from 5.5% to 3.3% and imposition of regulatory duties, resulting in a $6 billion fall in imports. As a percentage of gross domestic product (GDP), the trade deficit came marginally down from 11.9% in FY18 to 11.2% in FY19.

China has been the principal source of Pakistan’s trade deficit. In FY15, the trade deficit with China was $8.05 billion, which made up 36.31% of Pakistan’s total trade deficit. In FY16, the trade imbalance rose to $10.44 billion or 43.67% of the total trade imbalance.

The following two years saw the trade deficit enhance to $12.67 billion (38.39% of the total deficit) and $14 billion (37.26% of the total deficit). In FY19, the trade deficit with China came down to $10.89 billion, which accounted for 34.22% of the country’s total trade deficit.

Thus, between FY15 and FY18, Pakistan’s trade deficit with China cumulatively increased 74%. During the same period, Pakistan’s overall trade imbalance registered a cumulative growth of 69.58%. Thus, the growth in deficit with China outpaced that in the total deficit. In FY19, the trade deficit with China went down 22.23% while the overall deficit fell 15.32%. This means in both expansion and contraction the trade deficit with China outpaced the overall deficit.

The foregoing makes it abundantly clear that attempts to slash the total trade deficit need to focus on substantially improving the trade balance with China. As always, there are only two ways to reduce the trade imbalance – one is to increase exports while the other is to curtail imports.

Free trade

Since the conclusion of a free trade agreement (FTA) with China – signed in 2006 and became operational in 2007, Pakistan’s imports have gone up at a gallop. As per Pakistan Bureau of Statistics (PBS) data, in 2006-07, the last pre-FTA implementation year, Pakistan’s imports from China were $3.52 billion, which accounted for 11.52% of total global imports of $30.54 billion. At the close of 2017-18, Pakistan’s imports from China had gone up to $15.74 billion, which accounted for 25.89% of total global imports of $60.79 billion. In 2018-19, a contracting pace of economic growth together with trade restrictive measures, such as imposition of regulatory duties, saw a decline in imports from China to $12.70 billion, which made up 23.17% of Pakistan’s total imports of $54.79 billion.

Thus, between 2006-07 and 2017-18, Pakistan’s imports from China increased cumulatively 347%, while during the same period its global imports registered a much weaker cumulative growth of 99%. Not surprisingly, the share of China in Pakistan’s global imports more than doubled.

During FY19, Pakistan’s global imports and those from China contracted 9.8% and 19.31%. Thus, China holds the key to Pakistan’s import growth or contraction.

Tariff concessions

What caused so drastic import growth under the FTA with China? To answer this question, we need to look at the tariff concessions offered to China.

Pakistan gave China concessions on 5,686 tariff lines, of which tariffs were eliminated on 2,423 tariff lines. The concession covered 59% of Pakistan’s imports from China.

Giving such a substantial concession to a much bigger, diversified and much more efficient an economy without preparing the domestic industry to cope with the competition was always a recipe for a massive import influx.

It is argued that implementation of the China-Pakistan Economic Corridor (CPEC) drove up imports heavily from China in the form of machinery and other capital goods. Is it so?

CPEC agreements were signed in April 2015. Therefore, the impact of CPEC on Pakistan’s trade with China began in FY16. In three years, FY16-18, Pakistan’s imports from China increased 30% at 10% per annum from $12.10 billion to $15.74 billion.

In the three years (FY13-15) preceding CPEC, Pakistan’s imports from China had increased 53% at 17.79% per annum from $6.63 billion to $10.17 billion. Thus, it is primarily the enormous difference in productivity and competitiveness, widened by the FTA, between the two countries that underlie Pakistan’s heavy import bill, and by implication the enormous trade deficit with China.

While it imports massively from China, Pakistan’s exports to China are only $1.86 billion. Generally, two reasons are given for Pakistan’s inability to take advantage of the FTA and thus a highly skewed bilateral trade.

One, although Pakistan received concessions on 6,418 tariff lines under the FTA, these tariff lines covered only 5% of China’s imports from Pakistan. Thus, in effect Pakistan was given a meagre market access by China.

Two, the products of Pakistan’s export interest suffered preference erosion in the wake of China’s FTA with Asean member countries. The tariff faced by Pakistan’s rice was 65% while the average tariff for home textiles, knitted garments and woven garments was 4%, 7% and 9% respectively.

On the other hand, Asean countries received duty-free market access in China for home textiles, knitted garments and woven garments, while for rice the applied Chinese tariff was 35%.

This obviously placed Pakistan’s star products in a relatively disadvantageous position in the Chinese market. In the second phase of the Pakistan-China FTA, which is likely to kick-start soon, Pakistan has been given market access for these products at an even kneel with Asean.

The increased market access in the second phase of the FTA is important but given Pakistan’s severe productivity constraints viz-a-viz its competitors in the Chinese market, it may not be sufficient to rack up exports. In fact, such constraints should have been addressed before going into the second phase of the FTA.

Moreover, since the FTA is not a free lunch, China will also get enhanced market access and being more productive and efficient than Pakistan head and shoulder, it is likely to remain the bigger beneficiary. The yuan’s devaluation will, for sure, give a leg-up to the Chinese competitiveness.

The writer is an Islamabad-based columnist

Published in The Express Tribune, Septembert 2nd, 2019.

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China coherently moving Africa’s tech to the next level

China is currently Africa’s largest trade partner, a title they reached about 10 years ago. There is no doubt that the economic relationship between these two partners has received some criticisms, particularly from the West, but for the African leaders, China is their ally of choice. This is not only because Beijing has the funds to finance infrastructure projects in the region, but also because of the Chinese non-interference policy which suits African governments very well.

If you look all over Africa, you will see signs of Chinese businesses everywhere; as of 2018, it was estimated that over 10,000 Chinese companies were operating in Africa.

The introduction of the Belt and Road Initiative (BRI) about six years ago has broadened trade and investment horizons between China and Africa and was well received by the continent as another layer to an already flourishing cooperation. The BRI, which includes investments by private Chinese firms not only in Africa but around the world, has already witnessed successes in some parts of Africa.

China has consistently been involved in infrastructure projects in Africa, particularly in the construction of road networks, seaports and railways, among others. With a teeming population – one which is expected to double by 2050 – the Chinese have recognized the need to stay close to their African allies for better economic dividends. The creation of the BRI is to realize this ambition.

More and more African countries have recognized the relevance and significance of the BRI for Africa’s growth and are willing to push China into expanding the program, particularly in the areas where results would be felt quicker and can be easily indexed.

Research and Development (R&D) has been on the rise in China and the country is earnestly closing up the gap between it and the US. China’s total spending on R&D increased astronomically to 12.3 percent in 2017, which is about $250 billion.

For China’s engagement with Africa, R&D has been the benchmark for improved and sustainable relations. The need to invest more in education, technology and agriculture under R&D is top on China’s agenda under the BRI.

Technology, in particular, has been one field China has leveraged in Africa due to the continent’s slow start when compared to countries outside the region. China has found little or no rivalry in this line of business, and Huawei’s huge presence in so many African countries is testament to that. Huawei has successfully built about half of the 4G networks in Africa and most of the 2G and 3G networks.

One would easily posit that the Chinese technology companies yearning for expansion are moving into the less technologically developed Africa, where countries are striving to attain a double-digit economic progression. At the moment, a lot of Chinese companies operating on the continent have found new opportunities in mobile technology, and have introduced forms of a product to the local market.

With such domination, China would like to go even further through BRI projects to capture the market of over 1 billion people in the region.

Huawei’s operational strategy revolves around the transfer of technology. This is one area where Africa is in serious need of assistance. Huawei sees it as a corporate social responsibility to get the locals trained in SciTech. One of the most prominent programs by the firm was what it dubbed the “Seeds for the Future” initiative.

This is an idea designed to help young telecom talents on the continent. In 2017, it sponsored 10 African students to travel to China to have direct knowledge of innovative technology including 5G.

Analyzing mobile technology and internet connectivity, one successfully experimented digital project of the BRI is the PEACE cable, which is a fiber network that connects Asia to Africa and sprawls to Europe at a speed of over 16 terabytes per second. Huawei is also making this technology possible and has made provisions, for any telecommunications company interested in the invention, to connect and use the cable to increase its local network service.

Another side of technology that has not been discussed at length is digital technology. That is where one private Chinese firm, StarTimes, is doing a good job. The firm started its operations in Africa in 2012, and has been able to serve tens of millions of Africans with satellite television access, not only in cities but equally in rural and suburban areas. StarTimes has created roughly 50,000 jobs for locals. This effort serves as a prototype for new players that want to do business in digital television in Africa.

The BRI has many investment opportunities and is still in its infant stage – just like the current phase of technology in Africa. What this means is that the potential for growth is there, and the space for greater business cooperation between Africa and China is calling.

One area of major concern, however, is the lack of any serious push by African leaders to take control of the market. This will no doubt affect overall economic performance at the end of the day. At the moment, there are no ongoing discussions about how to take charge of this industry. African policymakers should engage their Chinese counterparts more in the area of technology transfers, which is key for any meaningful technological rise on the continent.

Source: Global Times

Dated on: 22/8/2019

The author is a PhD International Law student, a published author and a commentator on Sino-African relations. He currently studies at the University of International Business and Economics in Beijing.

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China’s Western Region set to attract more Investment

China’s western region is set to attract more investment as the country’s top private companies are discovering the great potential in the region.

During the recently concluded China Top 500 Private Enterprises Summit in Xining, capital of northwest China’s Qinghai Province, entrepreneurs shared their insights on investment and high quality development in the western region.

“By holding the summit, we are expecting to boost the development of Qinghai and its neighbouring areas, and promote the implementation of the country’s strategy of developing the west,” said Gao Yunlong, chairman of the All-China Federation of Industry and Commerce, organiser of the summit.

A total of 120 billion yuan (about 16.9 billion U.S. dollars) was channelled to Qinghai during the event, according to official data.

China’s western region boasts rich natural resources but remains relatively underdeveloped compared to other parts of the country.

Located in northwest China, Qinghai ranks first in the reserve of 11 kinds of minerals and is a major hydro-power base in the country.

The plateau province enjoys about 11 percent of China’s solar energy resources.

“Qinghai has great potential for development due to its abundant resources. There are many things we can do here,” said Li Ruibin, President of Longy Group, a company that focuses on development and construction, energy and financial investment.

The company based in Shaanxi Province, will invest over 10 billion yuan in Qinghai, covering fields of smart city construction and sand control.

Chinese telecom firm Huawei is also working with the province to build a big data park in Hainan Tibetan Autonomous Prefecture, which is Huawei’s 33rd cloud services spot in the country.

In 2018, Huawei started the construction of the park which is made up of facilities including big data centre, smart city display centre and big data industry incubation base.

The total investment will amount to 50 billion yuan by 2025 upon the completion of the park, according to local officials.

Apart from China’s strategy of developing the west, the Belt & Road Initiative is also bringing new opportunities to China’s west, making it a new engine for the country’s economic growth.

Due to the improved transportation, northwest China’s Xinjiang Uygur Autonomous Region is now better connected with the rest of the country than ever before.

As China’s gateway to Central and West Asia, the once-remote region has become a business hub on the Belt & Road.

Thanks to many preferential policies granted to the region, Xinjiang is becoming a hot spot for business investment. An increasing number of multinational corporations are shifting their focus from China’s east to west, channelling more and more investment to Xinjiang.

In the first half of 2019, Xinjiang recorded a fixed-asset investment of about 184 billion yuan, up 7.3 percent year on year, according to an economic performance report issued by the regional government.

However, the development of China’s west is still unbalanced and inadequate, which is a major challenge faced by the region.

Governments at various levels have rolled out measures to promote more balanced economic development and improve the business environment to attract more investors.

“We will break down all kinds of invisible barriers to create a level playing field for private enterprises, and cut taxes and administrative fees so they can go forward with fewer burdens,” said Liu Ning, Governor of Qinghai Province.

Source: Belt and Road News

Date: 29/8/2019

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Pakistan, China trade volume jumps to $15.6b under FTA

ISLAMABAD: China, Pakistan Free Trade Agreement (CPFTA) appeared to be a milestone in the two countries’ bilateral economic cooperation, as their bilateral trade has jumped to dollar 15. 6 billion in the recent years,

China Economic Net, quoting official sources reported on Friday that within the first phase of CPFTA, Pakistan’s exports to China have increased to US$1.85 billion (FY19) from US$575 million (FY07), and the bilateral trade volume has jumped from around US$4 billion to US$15.6 billion accordingly.

The CPFTA was signed in 2006 and came into effect in 2007. It is the first FTA China signed with South Asian countries.

The signing and implementation of the CPFTA has led to the rapid development of bilateral economic and trade relations. According to the statistics of Pakistani customs, so far, China has been Pakistan’s largest trade partner and the second export destination country for 5 consecutive years, and topping the FDI original country for 6 consecutive years.

Along with the constant upward trend of China-Pakistan trade, a rising concern on trade deficit with China has been echoing in the Pakistani business communities. It is pertinent to mention that the main reason behind the trade imbalance has to be the structural problems in nature between industries of two countries.

China has a strong manufacturing base to export goods as compared to import. Up to now, China turns to be the largest trading partner of more than 120 countries and regions in the world, and China has never intentionally pursued the trade surplus, not with any trade partner.

To address the major concern of Pakistani side, China has proactively taken a lot of measures to maintain a balanced trade relation with Pakistan. According minister counselor, Economic and Commercial Section, Chinese Embassy in Pakistan, in cooperation with Pakistani counterpart, China is keen to expand more market access for Pakistani products and organizes varieties of trade promotion activities in Pakistan and China every year.

In the meanwhile, in pursuit of a higher level of trade liberalization, the second phase of negotiations of CPFTA was launched in 2011, and successfully concluded after 11 rounds of talks.

Witnessed by the two countries’ leaders this April, the protocol of the CPFTA Phase II was signed at the second Belt and Road Forum for International Cooperation held in Beijing and will take effect in due course.

The second phase of CPFTA is a substantial upgrade of the original one and is expected to be a milestone in the history of the two countries’ economic and trade development. The two sides will, based on the original FTA, significantly reduce the tariff between the two countries and further expand the liberalization of trade in goods. After the Protocol takes effect, the level of bilateral trade liberalization will increase from the previous 35% to 75% in terms of tariff lines elimination.

Source: The News

Date: 26/8/2019

China’s AI market to hit 71 bn yuan

The market scale of artificial intelligence in China is expected to reach 71 billion yuan ($10.3 billion) in 2020, the Internet Society of China said on Thursday.

The ISC report predicted that the market scale of AI in China will reach 50 billion yuan in 2019, China Daily reported.

In 2018, the AI market in China hit 33.9 billion yuan, up 52.8% year-on-year, according to the report.

The global market share of China’s AI industry expanded to 12.56% in 2018 from 9.41% in 2017.

As of the end of 2018, China had 3,341 AI enterprises, accounting for more than one-fifth of the world’s total 15,916 AI firms.

The report said China’s cloud computing, big data and Internet of Things markets grew to 90.7 billion yuan, 540.5 billion yuan and 1.2 trillion yuan, respectively, in 2018.

According to IDC, computer vision applications took the largest share in China’s AI market with US$750 million in 2018, while security and surveillance and facial recognition in finance were the two most common scenarios in which AI-related technologies had been used, KrASIA reported.

A recent study by Boston Consulting Group, labelled Mind the (AI) Gap: Leadership Makes the Difference, focused on the key drivers of success in AI implementations, and was based on a global survey of over 2,700 managers in seven countries, according to Forbes.

The study found that there is a strong connection between bold, disruption-friendly management styles including actively putting AI high on the agenda, encouraging rapid development and piloting, and fostering cross-functional, agile R&D, all leading to AI industry leadership, the report said.

Chinese organizations are beginning to dominate AI due to these factors combined with their shorter innovation cycles than their peer organizations.

BCG also found that structural improvements at the national level do play an important role in laying the foundations for AI growth—investments in data infrastructure, in research hubs and networks, and higher education for IT and data-related fields.

Meanwhile, China remains the world’s largest buyer of industrial robots for the sixth straight year in 2018, despite a dip in purchases from the previous year, Caixin reported.

The country bought 135,000 robots used across industries such as electronics and automobiles, down 3.8% from 2017, according to a report released by the China Robot Industry Alliance.

China has been on a robot buying binge in recent years as it looks to take the lead in the field as part of the government’s “Made in China 2025” initiative, a grand plan to upgrade the country’s economy to produce more advanced technologies, the report said.

Source: Asia Times

Dated on: 11th July 2019

China Races Ahead of the U.S. in the Battle for 5G Supremacy

In the race for tech supremacy, China is betting it can seize the lead by building the world’s biggest 5G wireless networks.

To get there, the country is banking on the might of the one-party state, making sure its state-run carriers have access to cheap airwaves and fast, inexpensive approvals for putting up the hundreds of thousands of base stations the fastest wireless technology requires.

As top phone companies elsewhere flinch at the cost of building 5G wireless networks, China’s operators are barreling ahead on the government’s mandate, virtually free airwaves and equipment at less than half the price U.S. carriers are paying. Being the first to reach massive scale with the speediest networks could also help the nation in its ambition to dominateindustries like factory automation, robotics and autonomous driving.

“5G is a foundation and catalyst for reinventing industries,” said Paul Lee, U.K.-based head of research for technology, media and telecommunications at Deloitte Consulting. “The fundamental benefit of being the first mover is that you can build business models on the back of that and export them to other countries.”

South Korea’s wireless carriers were the first to offer commercial 5G services, with SK Telecom Co. launching its network in April and Samsung Electronics Co. already offering a 5G-enabled smartphone. But while U.S. carriers in cities like Minneapolis and Chicago have the beginnings of 5G offerings, it’s in sheer scale where China is on course to edge ahead over the next five years.

That size advantage is also reflected in China’s push to invent 5G technology.

The country’s biggest companies have already established a lead in patents related to the fastest network technology. Huawei Technologies Co., the contentious Chinese firm that’s at the heart of current U.S.-China tensions, leads the pack as the world’s biggest telecom equipment supplier. Meanwhile, ZTE Corp., which has also drawn America’s ire in the past, comes in at No. 3, according to Berlin-based patent information platform IPlytics.

But that won’t necessarily translate into network domination. China’s three carriers — China Mobile Ltd.China Unicom Hong Kong Ltd. and China Telecom Corp. — are all state owned.

Harvard Business School economist Shane Greenstein says having a bigger government role in 5G may not provide an advantage.

“The private firms in China in the digital sector have an admirable record with experimentation,” he said. “The state-owned enterprises? That is a more open question.”

Patent Power

Where the government is helping is by holding carriers’ costs down.

Beijing is providing the bandwidth for 5G networks almost for almost free, said Edison Lee, head of telecommunications research at Jefferies Hong Kong Ltd.

U.S. carriers, by contrast, bid $2.7 billion at two auctions of 5G airwaves, according to the Federal Communications Commission. In India, the industry group representing carriers says its members can’t afford spectrum the government expects to auction for about $84 billion this year.

robably cost about $30,000 each in China, less than half the $65,000 average in other developed-economy markets, Jefferies’ Lee estimates. Two of China’s carriers have said they will lease the equipment, cutting the upfront cash outlay to roughly $6,500 each per year, Lee said.

“5G rollout has picked up pace near-term and exceeded our earlier expectation, driven by government directive and improved Huawei supply,” Kevin Chen and Clint Su, analysts at China Merchants Securities, wrote in a July 25 note. They raised their target for base station deployment through 2020 to as many as 400,000 from 360,000.

In the U.S., where the government is leaving 5G to companies, carriers will also pay at least five times more than Chinese operators for civil engineering and permits to build 5G, Deloitte Consulting estimates.

The world’s most populous country has about 350,000 5G-operable base stations deployed, nearly 10 times as many as in the U.S., according to a U.S. Department of Defense study.

The report says China claiming the position of standard-setter for 5G, with Huawei leading rival telecom equipment makers, is a risk for the U.S.

This “will create serious security risks for DoD going forward if the rest of the world accepts Chinese products as the cheaper and superior option for 5G,” said the report.

Concern about China’s edge prompted President Donald Trump to float a proposal last year for the government to build a secure 5G network, people familiar with the matter said at the time. The idea was dropped immediately after regulators, industry leaders and elected officials immediately pushed back, saying companies were in a better position to move the technology forward.

Qualcomm’s Concerned

The idea of China securing that advantage is also stoking concern among competitors beyond the telecommunications equipment and wireless services industries.

Chipmaker Qualcomm Inc., for example, is urging the U.S. and other Western governments to embrace 5G more rapidly or risk falling behind China in the potentially life-saving technology, which is also used in self-driving cars.

China will be “saving hundreds if not thousands of lives much sooner than we will as we fumble to determine which is the standard that is best for the long-term road map in the Western world,” Qualcomm Senior Vice President Patrick Little said in an interview.

U.S. risks falling behind China on robocarsQualcomm says

While China’s autonomous driving infrastructure lags behind the U.S., where firms like Alphabet Inc.’s Waymo LLC are streaking ahead in real-world testing, Chinese companies are developing related 5G applications with some established carmakers.

Belt and Road

ZTE is conducting 5G tests on self-driving cars, and has cooperated with Audi AG’s China unit to develop “internet-of-vehicles” technology. In robotics, ZTE is working with internet giant Baidu Inc. and Siasun Robot & Automation Co. to develop 5G applications.

Byton Ltd., an electric-vehicle startup based in Nanjing, will release an SUV in China at the end of this year that includes a range of artificial intelligence functions and a roof antenna that offers data transfer rates up to 10 Gbit a second, which it says is hundreds of times the normal average bandwidth.

The benefits of setting 5G standards may also help China outside its borders. President Xi Jinping’s Belt and Road Initiative includes a push for Chinese-built network infrastructure across the length of a route that runs across Eurasia, the Middle East and parts of Africa.

“Developing countries that are more sensitive to cost will find the Chinese 5G price-point difficult to turn down, especially when the offer is sweetened with infrastructure and project-financing incentives like the Belt and Road Initiative,” the U.S. Department of Defense report said.

China’s Digital ‘Belt and Road’

For its part, the U.S. is letting the private sector guide 5G development, Federal Communications Commission Chairman Ajit Pai said in a June speech to wireless executives in New York.

“For all this talk about our government’s focus on 5G, make no mistake that we are pursuing a market-based strategy to promote 5G development and deployment,” Pai said.

And the U.S.’ crackdown on Huawei, cutting it off from components made by American companies, will be a big test of China’s 5G lead, says Anthea Lai, Asia Pacific media, technology and telecommunications analyst for Bloomberg Intelligence.

“Before Huawei’s ban, China had strong potential to lead in standalone 5G,” Lai said. “But now we have to see how much Huawei can keep its carrier business intact,”/she said.

Date: 2/8/2019

Source: Bloomberg