Media Focus on Multinational Corporations [2023.02.13]






Huawei seeking to enhance SOE ties

Meng Wanzhou, who is scheduled to serve as rotating chairperson of Huawei Technologies Co beginning April 1, has made frequent recent appearances to boost cooperation with State-owned enterprises.

Meng, daughter of Huawei founder Ren Zhengfei, visited China National Building Material Group Co Ltd, the world's largest manufacturer of building materials, and China Huaneng Group Co Ltd, a major domestic power company, this week.

Meanwhile, on Wednesday, Huawei held its first launch event of the Year of the Rabbit for its storage network product, as the company works to find more growth engines amid US government restrictions.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said Huawei is working hard to expand the application of its digital technologies and solutions in a wide range of traditional industries by boosting partnerships with big companies, as its consumer business, such as smartphones, faces challenges due to the restrictions.

On Tuesday, Huawei inked a strategic cooperation agreement with China National Building Material Group in Beijing in the presence of Meng and Zhou Yuxian, chairman of the latter.

Under the deal, the two sides will work closely in new material research and development, digitalization, green and low-carbon technologies and internationalization to promote the high-quality development of both parties.

The same day, Meng also led a team to visit China Huaneng Group and met its chairman, Wen Shugang.

Meng said Huawei insists on increasing its investment in R&D, and expects Huaneng to 'pose more questions' for Huawei to answer. Through joint laboratory and other research projects, the two sides will work together to explore solutions that combine digital technology and the coal industry.

Meng said she hopes the companies will continue to deepen cooperation in digital, coal, new energy and other fields, according to a news release from Huaneng.

Huawei has established a string of dedicated teams to help accelerate digital transformation in sectors like coal, highways, ports, photovoltaic power and data centers.

Despite progress in the above aspects, Huawei is now facing added pressure from the US government restrictions. Foreign media reported that Washington is considering halting licenses for US companies seeking to export products to Huawei.

In response to such reports, the Ministry of Commerce said on Thursday that China has always opposed the United States' practice of overgeneralizing the concept of national security to impose unjustifiable sanctions on Chinese enterprises.

Shu Jueting, a ministry spokeswoman, said such practices violate the principles of market economics and international economic and trade rules.

'China will continue to firmly safeguard the legitimate rights and interests of Chinese enterprises,' Shu said.

Huawei ranked seventh in 2022 among the top 10 global semiconductor buyers, but its chip spending went down by 19.4 percent year-on-year last year, according to preliminary data from market research company Gartner.



SpaceX ignites giant Starship rocket in crucial pad test

SpaceX is a big step closer to sending its giant Starship spacecraft into orbit, completing an engine-firing test at the launch pad on Thursday.

Thirty-one of the 33 first-stage booster engines ignited simultaneously for about 10 seconds in south Texas. The team turned off one engine before sending the firing command and another engine shut down — “but still enough engines to reach orbit!” tweeted SpaceX's Elon Musk.

Musk estimates Starship’s first orbital test flight could occur as soon as March, if the test analyses and remaining preparations go well.

The booster remained anchored to the pad as planned during the test. There were no signs of major damage to the launch tower.

NASA is counting on Starship to ferry astronauts to the surface of the moon in a few years, linking up with its Orion capsule in lunar orbit. Further down the road, Musk wants to use the mammoth Starships to send crowds to Mars.

Only the first-stage Super Heavy booster, standing 230 feet (69 meters) tall, was used for Thursday's test. The futuristic second stage — the part that will actually land on the moon and Mars — was in the hangar being prepped for flight.

Altogether, Starship towers 394 feet (120 meters), making it the biggest and most powerful rocket ever built. It's capable of generating 17 million pounds of liftoff thrust, almost double that of NASA's moon rocket that sent an empty capsule to the moon and back late last year.

SpaceX fired up to 14 Starship engines last fall and completed a fueling test at the pad last month.

Flocks of birds scattered as Starship's engines came alive and sent thick dark plumes of smoke across the Starship launch complex, dubbed Starbase. It's located at the southernmost tip of Texas near the village of Boca Chica, close to the Mexican border.


Baidu announces internal testing of 'Ernie Bot' to complete soon

Chinese tech heavyweight Baidu Inc announced on Tuesday that it will complete internal testing of its AI chatbot service called 'Ernie Bot', similar to OpenAI's ChatGPT, in March.

The Beijing-based company has invested large sums of money in developing its Ernie system, a large-scale machine-learning model that has been trained on massive data over several years and possesses in-depth semantic comprehension and generation capabilities.

The company's shares surged 13 percent after affirming it is on track to publicly roll out its ChatGPT-like chatbot.

Baidu has been engaged in the artificial intelligence sector for more than ten years, and accumulated strengths in technology covering deep learning algorithms and framework, AI-powered chips, and language training model.

In January, the company introduced its latest AI-generated content technologies, which feature versatile content creation skills and allow creators to play the role of screenwriters, illustrators, and editors or animators, greatly bolstering the development of AIGC.



Chinese chipmaker SMIC reports revenue increase in Q4

BEIJING - Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) said Friday its revenue had experienced year-on-year growth in the fourth quarter of 2022.

In a report made public on its official website, SMIC said its revenue in the fouth quarter of 2022 rose to $1.62 billion, up from $1.58 billion registered in the fourth quarter of 2021.

The company's profit from operations from October to December last year hit $282 million, according to the report.

By the end of 2022, the company had total cash on hand valued at $18.66 billion.


Qualcomm Ventures ups China tech funding

Qualcomm Ventures, the venture capital arm of US chip heavyweight Qualcomm Inc, will step up its push to invest in promising Chinese startups to support their growth, with a focus on smart driving, artificial intelligence and the metaverse this year.

Shen Jin, managing director of Qualcomm Ventures, said the company's investment theme at this stage is intelligent interconnection, with priorities including intelligent driving, AI and its applications in the internet of things, robot solutions and computer vision in advanced manufacturing, as well as the metaverse.

Founded in 2000, Qualcomm Ventures is a veteran in the corporate venture capital market and has been actively investing in China since 2003. From investing in mobile internet technologies in the past to investing in smart internet now, Qualcomm Ventures aims to help its parent company build its business ecosystem and expand its partners, while constantly seeking a balance between industrial ecological value and financial returns, forming a unique investment style.

In the past 20 years, Qualcomm Ventures has invested in nearly 80 companies in China.

'From 2010 to 2015, our investment theme was mobile internet. At that time, in addition to investing in companies that had become close partners with Qualcomm, such as smartphone maker Xiaomi, we also invested in companies such as bike-sharing enterprise Mobike whose business seems to have no close ties with Qualcomm. But the investment idea was to promote the ecology of 3G and 4G,' Shen said in an interview with 21st Century Business Herald.

He said that this year, the company will maintain its efforts to invest in China. Qualcomm set up a $100 million investment fund for the metaverse last year. The metaverse is an immersive virtual world facilitated by virtual reality and augmented reality technologies.

'The fund was officially opened in June 2022 and after that, we have made some investments in companies around the world. We have invested in a health platform called Tripp, which mainly uses immersive technologies to help people track their health and emotional management through meditation. At the same time, we have also invested in the AR/VR cloud platform Echo3D.

'In addition, we will soon announce that we will invest in a metaverse company in China,' Shen added.

He said China has begun to warm up for the commercial use of the metaverse. In the United States, the sales volume of Meta's Oculus VR products has exceeded 10 million units in 2021, which has verified many application scenarios. In China, many enterprises have released or are releasing VR/AR headsets based on Qualcomm's chip platform.

The Chinese AR and VR market's average annual compound growth rate is expected to be 43.8 percent from 2022 to 2026, compared with a 38.5 percent increase globally, market research company International Data Corp forecasted in a report.

Annual spending on AR and VR in China is expected to hit $13.1 billion by 2026, making it the world's second-largest market, the report showed. Global spending may jump to $74.7 billion in 2026.

Xu Chi, founder and CEO of Nreal, a Chinese AR glasses pioneer, expects that by 2030 there may be more than 1 billion AR or VR glasses globally offering various virtual and real interactive experiences.

'People today may think this figure is very high, but sometimes we overestimate the technology iteration in two to three years and underestimate the changes brought by technology or products in more than 10 years,' Xu said.

Nreal said that as of December, the Beijing-based company had produced more than 100,000 AR glasses, making it the world's first consumer-oriented AR hardware company to cross the mark.

With sales in China, Japan and the US, shipments of Nreal's AR glasses exceeded 70,000 units in the fourth quarter.



China's largest gasfield sees more natural gas production

XI'AN -- The daily natural gas output of Changqing Oilfield, China's largest gas production base, has exceeded 150 million cubic meters since the beginning of this year, 10 million cubic meters more than that recorded in the same period of last year.

The oilfield has produced 6 billion cubic meters of natural gas this year, an increase of over 4 percent year-on-year, said the PetroChina Changqing Oilfield Co, operator of the gasfield.

The oilfield supplies gas to more than 40 large and medium-sized Chinese cities, covering nearly 400 million users. Since the start of the winter heating season in November 2022, Changqing Oilfield has supplied nearly 15 billion cubic meters of natural gas.

More than 7,000 employees of the gasfield company braved the extreme cold weather in northwest China's Erdos Basin to ensure stable production.


Envision Energy

China's Envision Energy aims to boost renewable energy with new wind turbine

China's Envision Energy has envisioned plans for the world's largest onshore wind turbine on Wednesday, with the installed capacity for a single unit reaching up to 10 MW, which will take advantage of the country's wind resources and help to further cut down energy costs.  

Designed for China's Sanbei (Northwest, North and Northeast China) regions, which has plentiful wind and solar resources, the technological innovation of the newly released EN-220/10MW will further drive comprehensive economic and security upgrading, said the company.

The unit capacity and impeller diameter both rank top in the world and will help further reduce wind power costs in the country, it said.

Compared with the previous EN-171/6.7MW, the newly released model will help increase power generation by 8 percent.

China's Sanbei regions will be a pioneer in the country's new energy drive, as China plans to speed up the construction of solar and wind power generation facilities in the Gobi Desert and other arid regions amid efforts to boost renewable energy, according to a statement jointly released by the National Development and Reform Commission and the National Energy Administration in 2022.

Envision Energy vows to further tap into the massive opportunities of the country's new energy drive and continuously come up with technical solutions for the wind, solar, power storage and hydrogen green energy industry chain to help local governments transform their advantages in local resources into an economic advantage, while ensuring a sufficient power supply for the country, it said.



BP Mulls Deals to Expand Oil and Gas Production Amid Profit Boom

BP Plc may pursue acquisitions to expand its oil and gas portfolio as the company scales back promises to sharply cut fossil fuel output this decade amid soaring prices and limited supplies.

“You may see us doing some smart M&A, commercial deals, partnerships, things that make sense in that space,” Chief Executive Officer Bernard Looney said in a presentation.

The comments stand in contrast to BP’s closest peer, Shell Plc, which last week ruled out using its growing cash pile to do big deals.

As BP posted a record 2022 profit on Tuesday, it vowed to increase spending both on its traditional oil and gas business as well as low-carbon alternatives.

BP’s strategy involves investing to increase oil and gas production as quickly as possible. That may mean adding drilling capacity in the Gulf of Mexico, the North Sea and the Permian shale formation in the US. But acquisitions could also help deliver that agenda.

Berkshire Hathaway

Buffett's firm has now sold 95 million shares of China's BYD

OMAHA, Neb. -- Warren Buffett's company has now sold nearly 95 million of its original 225 million shares of Chinese electric carmaker BYD's stock, but it remains a significant shareholder.

Berkshire Hathaway said in a filing with the Hong Kong stock market Thursday that it had sold another 4.235 million BYD shares since last month. Disclosure rules only require Berkshire to reveal when its ownership stake decreases into another percentage point.

After the most-recent sales, Berkshire still held 130.3 million BYD shares or about 12% of the stock. At its last report late last month, Berkshire, which is based in Omaha, Nebraska, controlled 13% of the stock.

Until last August, Berkshire had never sold any of the BYD shares it bought in 2008. The stake Berkshire paid $232 million for had ballooned in value to be worth billions of dollars.

BYD, based in the southern Chinese city of Shenzhen, is one of the biggest electric vehicle makers in the world, having sold nearly 1.9 million cars in 2022 including pure electrics, plug-ins and hybrids.

Buffett didn't respond to questions Thursday about why he was selling the shares, but he doesn't typically comment on stocks he is buying and selling while he is still making those moves.

Many investors follow Buffett's investments because of his remarkably successful track record over the years.

In addition to the BYD stock, Berkshire holds a sizeable portfolio with major investments in Apple, Bank of America, Coca-Cola and other stocks. Besides that, Berkshire also owns an assortment of more than 90 companies, including Geico insurance, BNSF railroad, several major utilities and a number of manufacturing and retail firms.


Morgan Stanley

Morgan Stanley lands big with fund firm

Based on the positive outlook for China's economic growth and continued financial opening-up, leading international asset management firms have accelerated their expansion in the country as the new year moves into its second month.

Morgan Stanley Investment Management announced on Friday that it had received approval from the China Securities Regulatory Commission, the country's top securities watchdog, to increase its stake in joint venture Morgan Stanley Huaxin Funds from 49 percent to 100 percent.

With the full controlling stake, Morgan Stanley has become the seventh wholly foreign-owned mutual fund firm in China ever since the CSRC completely lifted foreign ownership limits on mutual fund companies on April 1, 2020.

Wholly owning the China mutual fund business adds a significant pillar of growth to the company's global investment franchise, said Dan Simkowitz, head of investment management at Morgan Stanley.

The New York-based financial services conglomerate sees long-term opportunities in China's asset management industry, which is built on the country's high levels of wealth creation, growing demand for financial advice and the launch of the private pension scheme in late 2022, said Gokul Laroia, CEO of Morgan Stanley Asia.

Morgan Stanley's approval was granted only 15 days after that was given to JPMorgan, which was the sixth firm receiving the green light by the CSRC to set up a similar firm by taking a 100 percent stake in JV China International Fund Management.

The world's largest asset manager, BlackRock, with assets under management of $8.6 trillion as of the end of 2022, was the first foreign firm approved by the CSRC in August 2020 to set up a wholly foreign-owned mutual fund company in the country. In succession to the four products over the past few years, the industry giant released on Monday a bond-based product for Chinese mainland investors.

Liu Xin, fixed income director for BlackRock Fund Management Co Ltd, said the Chinese bond and equity markets will churn out more opportunities for active investors this year thanks to China's optimized contagion control measures, improving growth outlook and economic stimulus packages. The bond market has demonstrated especially noticeable investment value after adjustments in the previous months, Liu said.

US asset management firm Fidelity Investment, where a number of star fund managers such as Peter Lynch and Anthony Bolton have honed their skills, was approved in August 2021 to start a wholly owned mutual fund business in China. The wholly owned firm is scheduled to hold an opening ceremony on Feb 14.

Pension and wealth management will be part of Fidelity's development focuses in China, said Helen Huang, the company's general manager for China unit.

Data from the CSRC showed that VanEck and AllianceBernstein — investment firms based in New York — have submitted their applications to set up wholly foreign-owned mutual fund companies in the Chinese onshore market.

Zhou Maohua, an analyst at China Everbright Bank, said that the foreign firms' optimistic outlook on China's real economy and the growth potential of the capital market, as well as the ongoing two-way opening-up in China's financial industry, are being seen by their accelerated expansion in China.

Li Wen, chairman of China Universal Asset Management, said that foreign asset managers' expanded footprints in China will usher incremental foreign capital into the Chinese onshore market. The principles of long-term and value investment will be further consolidated in China as foreign asset managers have always adhered to them, Li said.



Yahoo to lay off 20% of its workforce by the end of the year

Yahoo will lay off 20% of its workforce by the end of the year, including 1,000 employees this week, the company announced Thursday.

The cuts are focused on the company's ad tech division, Yahoo for Business, which will reduce its workforce by nearly 50% by the end of 2023 amid a restructuring of the company's ads business, a Yahoo spokesperson said.

'These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,' the spokesperson said in a statement.

The company's current ads business strategy has not been profitable, the spokesperson said. As part of a revamped approach, a new division, known as Yahoo Advertising, will focus on its demand-side platform, with its ad sales teams prioritizing Yahoo-owned-and-operated properties, including Yahoo Finance, Yahoo News and Yahoo Sports, the spokesperson said.

The company will also sunset its supply-side platform while fully shifting its native advertising efforts to its 30-year partnership with advertising company Taboola, which was announced in November, the spokesperson said.

The cutbacks arrive amid a string of layoffs in the media and tech industries.



Mars Wrigley fined after workers fall into vat of chocolate

ELIZABETHTOWN, Pa. -- Federal workplace safety authorities have fined a central Pennsylvania confectionary factory more than $14,500 following an accident last year in which two workers fell into a vat of chocolate.

The Occupational Safety and Health Administration cited Mars Wrigley in the June accident at the Elizabethtown M&M/Mars factory, saying the workers were not authorized to work in the tanks and weren't trained on the proper safety procedures for the equipment.

Officials said two workers employed by an outside contracting firm fell into the partially filled chocolate tank while doing maintenance work. Emergency responders were able to free the pair by cutting a hole in the bottom of the tank, officials said. Both were taken to hospitals, one by helicopter.

A company representative told reporters last week that the safety of workers and outside contractors “is a top priority for our business.”

'As always, we appreciate OSHA’s collaborative approach to working with us to conduct the after-action review,“ the representative said.



Carrefour attempts new community shopping model amid troubled times

Carrefour China, part of, has plans to rejuvenate its shrinking hypermarkets into community shopping centers that offer services for families and upgrade its supply chains after closing many underperforming stores in some cities in the country in the past two years.

The retailer, in the first three quarters of 2022, has closed 54 stores, leaving only 151 stores in operation, according to Kantar Worldpanel China, a research unit in Shanghai. The number was 210 in 2019 when Suning acquired an 80 percent stake in Carrefour China from the French retailer group.

According to the Beijing Times, the Carrefour Shuangjing store in Beijing early this month has shown a supply shortage as a result of the panic buying from consumers who purchased prepaid cards, who are worried about not being able to spend the money saved in their cards once stores are closed.

Moreover, many products are not able to be purchased with prepaid cards such as snacks, beverages and instant foods, triggering more concerns among consumers.

In a statement, Carrefour China said they have adopted temporary limits on the use of the cards due to the impact of the pandemic, strategic shifts and rumors of the retailer's exit. Their supply chains have recently improved to meet the surging purchases of prepaid cards.

The retailer said they are exploring a new model to optimize their supply chains and open more community-based shopping centers to combat their current troubles.

In March, Carrefour China is expected to show a batch of new stores in major cities including Beijing and Shanghai, transforming their hypermarkets into brick-and-mortar service centers for the communities. The stores will offer more services and experiences to attract more visits from consumers, such as children's play facilities and catering services.

Carrefour's community service store is an attempt to differentiate from online-to-offline services, said Jason Yu, general manager of Kantar Worldpanel China.

'Services give consumers a reason to be there,' said Yu.

In the past two years, revenues of hypermarkets in the country have declined quickly due to a drop in traffic to the stores, amid fierce competition with convenience stores and small-sized supermarkets, as well as high-end membership stores, not to mention the impacts from e-commerce players during the COVID-19 pandemic, according to an industry report from Kantar.

Yu said Carrefour's market share has plummeted the most in recent years. Suning Group has seen its market share drop from 2.3 percent in the third quarter of 2021 to 1.7 percent in one year, according to their research.

'This has a lot to do with their singular format (the hypermarket) despite their exploration into high-end membership stores and reforms on supply chains,' said Yu. 'It is not a bad thing to close some underperforming stores, but it is vital to step up their efforts to develop more multiple retail formats.'


Veolia upbeat on country's green goals

French environmental solutions firm sees China as chance for opportunities

French environmental solutions provider Veolia Group expects strong growth from the Chinese market in 2023, as the ever-optimizing policies create massive opportunities in ecological and environmental protection in the country, said a top company official.

Despite the backdrop of a possible global economic recession, Veolia remains optimistic about China's economy and its operations in the country this year, considering the strong determination of the Chinese government to combat pollution, said Christophe Maquet, senior executive vice-president of Veolia's Asia-Pacific region.

'Despite the impacts of COVID-19 and the Russia-Ukraine conflict, the company still achieved better-than-expected performance globally last year and we are confident and optimistic about our operations in China's water, solid waste and energy management sectors in 2023,' he said.

Maquet said the confidence in the Chinese market comes not only from its market size but also from the speed of its development.

'Veolia will continue to work with its local partners to provide comprehensive resource management optimization solutions for ecological transformation,' he said.

Despite the COVID-19 outbreaks in China, Veolia still managed to carry out water and soil restoration projects with local companies including Jinneng Holding Group last year while conducting new projects including indoor air purification for the Shanghai Museum, he said.

Maquet believes that China's ambition to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060 has also given foreign companies like Veolia guidance for development, presenting multinational corporations with numerous opportunities.

An analyst said that many foreign corporations have been stepping up efforts to align their core businesses with China's market demand.

China's current focus on the development of a low-carbon and circular economy has become a strategic focus for more Chinese companies as well as multinationals, said Tang Sisi, an analyst at research firm BloombergNEF.

Veolia said it would accelerate cooperation with Chinese stakeholders in 2023 to further benefit from future expansion of the market, including opportunities in hazardous waste treatment, industrial services and circular economy as well as plastic recycling, energy management for building energy and industrial customers, said Maquet.

The company is also working on electric vehicle battery treatment, another area that will be a promising area for Veolia's development in China, the biggest market for EVs and EV batteries.

Veolia currently operates a trial recycling project for used power batteries in Jiangmen, Guangdong province.

'China's decarbonization goal is a good opportunity for foreign companies like Veolia. We would like to continue to share our experience and knowledge with China and realize green development together with our Chinese partners,' he said.