China Reform Monitor No. 1409

Tech giant Huawei is leading a flurry of Chinese investments into Russian AI. Things took off in June, after Xi Jinping visited Russia and announced a joint $1 billion high-tech investment fund focusing on AI research. Since then, several Chinese tech companies have entered Russia, with Huawei being the most aggressive. The firm spent $50 million to buy tech developed by Russian startup Vocord, which touts facial recognition surveillance applications for "public places, transport hubs, stadiums, commercial centers and banks," as well as a "tool for uploading family photos to see which relative your child most resembles." Huawei also signed a deal with a Russian government-backed AI research center and has announced plans to build an "AI ecosystem" in Russia by 2025. "Huawei aims to work with industry organizations and engage over 100,000 AI developers, more than 100 [independent software vendors] and over 20 universities to build an AI ecosystem within five years," said Jiang Tao, vice president of Huawei Intelligent Computing. (Nikkei Asian Review, February 4, 2020)

The Asia branch of the international hacktivist group Anonymous has hacked into a World Health Organization (WHO) website and created dozens of pages supporting Taiwan, which has been excluded from the organization since 2016 due to pressure from Beijing. The 32 new pages resemble those seen in a previous UN website hack and several have the Republic of China (Taiwan) flag and national emblem, the Democratic Progressive Party emblem, and the Kuomintang emblem. Some pages contain videos, including a statement by a Taiwanese member of Anonymous who says the group wanted to spotlight Taiwan's exclusion from the WHO as the Covid-19 epidemic spirals out of control. Taiwan participated as an observer in the WHO between 2009 and 2016, but after President Tsai Ing-wen took office in 2016 Beijing forced the WHO to again exclude Taiwan. (Taiwan News, February 7, 2020)

To ease worldwide concerns that Beijing could use its equipment for spying, Huawei has will build its first European plant in France, announced company chairman Liang Hua. The world's biggest producer of telecoms equipment will invest 200 million Euros ($229 million) in the first phase of setting up the mobile base station plant that will create 500 jobs. The French plant will be Huawei's second manufacturing facility located outside of China; the first is a plant for the assembly of smart phones situated in India. The plant in France will generate 1 billion Euros in annual sales. "This site will supply the entire European market, not just France. Our group's activities are worldwide and for this we need a global industrial footprint," said Liang, who told a news conference that Huawei had discussed its plans with the French government. The top French mobile operator, state-controlled Orange, has already chosen Huawei's European rivals, Nokia and Ericsson, for its 5G buildout. But smaller carriers like Bouygues Telecom and Altice Europe's SFR, whose existing networks rely heavily on Huawei equipment, are waiting for Paris to clarify its official position on Huawei. (Reuters, February 27, 2020)

The parliament of Myanmar's Kachin State has approved a proposal to break ground on the $22.4 million, 70-acre Kanpiketi Business Park on the country’s border with China. The project will be developed by Myanmar Heng Ya Investment Development Company Ltd, a joint venture with a majority stake held by a subsidiary of China’s Yunnan Baoshan Hengyi Industry Group. The business park is one of three cross-border economic cooperation zones under the China-Myanmar Economic Corridor (CMEC) agreement. The CMEC will stretch from Yunnan to Mandalay then south to Yangoon and on west to the Kyaukphyu Special Economic Zone in Rakhine. Discussions on building the cross-border zones began in 2017, during a visit by State Counselor Daw Aung San Suu Kyi to Beijing to attend the Belt and Road Forum. Then, in 2018, Beijing and Naypyitaw signed an MoU on the CMEC and Myanmar approved three sites in Kachin and Shan states. "As a part of the BRI, China is working on upgrading the border area. We need to upgrade our infrastructure as well," Myanmar State Minister of Finance, Revenue, Planning and Economy U Wai Lin has said. (Irrawaddy, February 27, 2020)

Steve Huffman, the CEO and co-founder of the U.S. discussion website Reddit, called out the popular Chinese app TikTok for its "fundamentally parasitic" nature and urged users to uninstall it from their phones. During the "Social 2030" tech conference in San Francisco's Silicon Valley, Huffman said the video-sharing social networking app is spyware that is "always listening." He said the fingerprinting technology employed by TikTok terrifies him and warned people to avoid downloading the app. Huffman also questioned the motivations of TikTok's developers and stated that American app companies should avoid adding features that may invade user privacy. A spokesperson for TikTok, which is owned by China-based ByteDance, denied Huffman's accusations, calling them baseless. Meanwhile, the U.S. Transportation Security Administration (TSA) became the latest federal agency to ban the app, following similar bans by the U.S. Army and the U.S. Navy. (Taiwan News, February 28, 2020)