China’s tech sector, which for the past decade has been one of the most job-creating sectors in the world’s second-largest economy, is now filled with stories about frozen workforces and mass layoffs as tech giants grapple with regulatory crackdowns and a slowing economy. Chinese e-commerce giant JD. com has reportedly begun laying off at least 400 employees, up to its purchasing unit of the Jingxi organization, while Alibaba, another e-commerce giant, is considering laying off at least 15 percent of its parent this year or about 39,000 people. Tencent, which has about 86,000 employees and owns the popular messaging platform WeChat, also plans to eliminate 10 to 15 percent of its cloud and intelligent services sectors, as well as its platform and content business organizations.
While job cuts in the tech sector are not uncommon, this layoff circular is the first primary since Beijing’s crackdown on tech giants. The crackdown has also been criticized for killing the entrepreneurial spirit that has turned China into a technological powerhouse over the past decade. like the corporations and profits that attracted China’s most productive and brilliant. Although the country recorded an 8. 1% expansion in gross domestic product (GDP) last year, its expansion in the fourth quarter was only 4% from a year earlier, a marked slowdown of 4. 9% in the 3rd quarter and 7. 9% in the second.
As a result, Chinese tech giants have posted disappointing effects on recent earnings reports. JD. com posted its worst earnings expansion in six quarters, while Alibaba posted its slowest earnings growth from the board in the 3 months to December 2021. And Tencent’s sales grew at their slowest pace in 18 years in the third quarter of 2021.
Desperate to find a way to turn mass layoffs into a young, skeptical workforce, some of China’s big tech corporations were sending congratulatory notes on their “graduation” to the workers they laid off. Social media users began sharing photographs of a cheerful note titled “Graduation Notice” allegedly issued through JD. com’s human resources department. The note, addressed generically to an unnamed worker or “JDer,” reads as follows: “Happy graduation!Congratulations on graduating from JD. com!Thank you for the company!”
Despite those painful efforts, the destruction of technology’s to-dos, from content creation to personal lessons, is translating into heightened fears of a wave of unemployment in China that could rival the 2008 global currency crisis or the public sector reforms of the past. due to the decade of 1990. Si there are no exact statistics released by the state to measure the true extent of job losses in recent months, an earlier report through Chinese recruitment site Zhaopin. com found that some respondents said their company had laid off staff in 2021, while a quarter said they had been directly affected.
Headcount has also been frozen at companies such as Alibaba, whose overall headcount doubled in 2020 but was slightly replaced in 2021. ByteDance, one of China’s most prized unicorns, grew over the past decade, but the company closed its school facilities and pulled back on several fronts. Last year in the face of stricter regulations.
With another 200 million people, about one in four people, in a “flexible task” prestige ranging from carpooling to food delivery, China’s informal economy is vulnerable to hard labor market volatility. In addition, there is preliminary evidence that eliminating tasks in the personal generation sector is pushing other young people towards job security in the public sector. At Tsinghua University, nearly 70 percent of students who graduated last summer found employment in government agencies, state-funded institutions or state-owned enterprises.
China’s technological crackdown for a year has not only weighed heavily on the task market. It is now alienating global investors, a progression that contradicts the government’s purpose of creating economic prosperity. President Xi Jinping’s crusade to curb the “disorderly expansion of capital” has resulted in punitive losses for shareholders whose acceptance by the government will now have to recover. Capital flight and general disapproval of Chinese assets have only increased since Russia invaded Ukraine last February.
The Chinese government was able to briefly halt a slump in Chinese stocks indexed on foreign stock exchanges by pledging to ensure the stability of capital markets, help overseas listings, similar threats to real estate developers, and end the crackdown on Big Tech “as soon as possible. “as much as possible. ” But Xi’s promise to lessen the economic damage of his “zero-Covid” strategy proves increasingly difficult, as lockdowns in cities like Shenzhen and Shanghai charge the country about $46 billion a month, or 3. 1% of GDP, in losses. economic production. Such volatility poses a threat to Xi ahead of a key party assembly later this year in which he is expected to claim a third five-year term.
On March 23, the U. S. Securities and Exchange Commission(The U. S. Sec added China’s microblogging platform Weibo to a “pre-pull” watch list for non-compliance with monetary disclosure requirements. In the U. S. securitization of foreign indexed corporations, the action requires Weibo to provide any evidence to challenge the board by April thirteen. By the deadline, it would be officially designated as the Commission’s known issuer (IIC). If Weibo remains as an IIC for 3 consecutive years, the SEC would be required to remove Weibo from all U. S. exchanges. USA
Weibo’s action is part of a long-standing fight between U. S. regulators. The U. S. government, accustomed to difficult and complete access to regulated entities, and Chinese regulators, which banned Chinese corporations from offering this data based on national security concerns. The HFCAA followed the estela. de a high-profile scandal involving Chinese coffee chain Luckin Coffee, in a component intended to address this tension. After the SEC finalized its implementation of the HFCAA in December 2021, SEC Chairman Gary Gensler in particular called on China and Hong Kong to take enforcement action. , and noted that traditionally none of the jurisdictions had allowed the Public Enterprise Accounting Oversight Board (PCAOB) to conduct its audits. Since then, the SEC has added at least 273 corporations to its pre-de-list watch list.
Despite the three-year delay, the initial cancellation has cast a veil on an already poorly performing Chinese market. The NASDAQ Golden Dragon China Index of Chinese Stocks Listed in the U. S. The SEC’s action on Chinese corporations in the U. S. The U. S. government also had a ripple effect on publicly traded Chinese corporations, with JD. com, Baidu and Alibaba falling between 5 and 11% in Hong Kong-listed stocks in early March, after the SEC took action against five other Chinese technology, pharmaceutical and fast-food corporations on the watch list.
Weibo’s addition to the HFCAA list bodes well for other indexed Chinese web giants in the United States. A total of 248 Chinese corporations are indexed on the NASDAQ, the New York Stock Exchange and NYSE American, with an overall market capitalization of $2. 2 trillion. More than two hundred of those corporations are eligible to be excluded from the list under the HFCAA. While Chinese investors would bear the brunt of the monetary loss, U. S. institutional investors would also be hit hard. An estimate through Goldman Sachs showed that U. S. institutional investors have bion on exposure to the shares of Chinese corporations in the United States.
Faced with the threat of radiation, Chinese regulators have shown some willingness to move in their hard line. Chinese securities regulators are reportedly contemplating a compromise that would allow U. S. regulators to comply with the U. S. U. S. Attorneys general guarantee limited audit disclosures. In addition, on the same day, the SEC announced Weibo’s boarding, Reuters reported that the Chinese securities regulator had asked Alibaba, Baidu and JD. com to prepare for audit disclosures in the United States. that full access to applicable audit documentation is “non-negotiable”.
EU warns China to export critical generation to Russia
At a summit with President Biden in Brussels, European Union leaders expressed fear that China is preparing to send semiconductors and other critical equipment to Russia to help mitigate the effect of sanctions on the country. Russia has imported most of its semiconductors. and consumer electronics from China, and high-end semiconductors are essential to power weapons and complex technologies such as 5G, synthetic intelligence, and robotics. he promised to “absolutely” enforce opposing export controls on China if they ship semiconductor chips to Russia.
Continued sales of semiconductor chips from China to Russia may also help mitigate some of the immediate effects of sanctions. While Russian companies have sunk their financial capacity since the invasion, Chinese companies have closed the gap, with Chinese-Russian industry on the rise. 38. 5% in January and February, compared to the same figures in 2020. Chinese tech corporations in particular have deepened their roots in Russia to fill the void left by Western companies. However, this cooperation could have limits, as Moscow has done. it has been reluctant to rely excessively on other Chinese technologies in sensitive spaces such as telecommunications, for fear of being held captive by Chinese high-tech corporations.
While Continued sales of semiconductor chips from China would likely help mitigate the adverse effects of sanctions, analysts say they would possibly not fully fill Russia’s high-tech gaps caused by the sanctions. Most of the high-end chips, needed for some complex weapons systems, are produced through Taiwan’s TSMC and South Korea’s Samsung. Both corporations have already halted deliveries to Russia to comply with U. S. export controls. The U. S. is the world’s second-largest arms exporter, and semiconductors are very important in some military programs that require specialized fabrics and circuit designs.
In addition to semiconductors, Ukrainian leaders have also called on Chinese tech corporations to avoid drone exports to Russia. On March 16, Ukrainian Deputy Prime Minister Mykhailo Fedorov called on Chinese drone maker DJI Global to avoid doing business with Russia, noting that DJI drones were being used to kill innocent civilians. Although DJI denied the allegations, he noted that Ukraine may officially ask DJI to impose a “geofencing,” which is regularly used to prevent drones from flying near airports and other sensitive areas, which would save DJI drones. if the country is used. As of March 29, according to DJI’s own map, DJI has not imposed this restriction.
Chinese Regulators Target Influencers, Crack down on short videos and streaming
The Cyberspace Administration of China (CAC), China’s main web watchdog, announced on March 17 that it would “clean up the chaos” on China’s live streaming and short video service platforms this year. The announcement came here 3 days after CCA published the draft. regulations to make greater time restrictions for young people on apps, which in the past were implemented on online gaming platforms, as well as online video streaming and messaging services. “youth mode,” which would limit the number of hours minors can spend on those platforms based on the day and limit the amount of money young people can spend on app purchases.
The deal came a week after delegates from China’s “two consultation” meetings met to set out their political priorities for the year. Although the two bodies, the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), have no formal role in policy oversight, the convention is helping to set the political timetable for the year. Some of the delegates at the consultation provided recommendations to combat video game addiction. Xu Jin, a CPPCC delegate, advised that to restrict solutions to gambling restrictions Web corporations put in place the generation of facial popularity to determine the identities of users. Li Jun, a member of the NPC, completely banned video games for minors.
It’s unclear how the video streaming regulations would come into effect. The draft regulations on video platforms mirror the regulations the CAC introduced last year, restricting other young people from spending more than 3 hours a week on online gaming platforms. While online gaming corporations have largely complied with the regulations, young Chinese have discovered alternative solutions, adding “hiring” gaming accounts to adult distributors to use. While many primary tech platforms have made official identity verification mandatory as a component of their user creation process, one has emerged to hire adult game IDs for as little as 50 cents per hour. If the CAC cracks down on video streaming services, it is foreseeable that Chinese users will continue to find alternative solutions as they have done with other inflexible policies, such as bans consistent with personal lessons.
Biden Administration’s Proposed Defense Budget Still Shaped in China
In the run-up to Russia’s invasion of Ukraine and China’s competitive challenges, Biden released a $5. 8 trillion budget proposal on March 28 to address U. S. economic and security concerns. The U. S. Dollars for the Pentagon, $30 billion more than Congress approved for this year.
Biden noted in a speech in which he presented his draft budget that “[t]he global has changed,” and said the United States “once again faces a bigger festival from other geographic regions, China and Russia, that will require investments to do things like area and cyber capabilities and other complex capabilities, adding hypersonic. Earlier on March 28, Adm. Christopher Grady, vice chairman of the Joint Chiefs of Staff, said in a briefing that the budget request “remains in line with our strategic technique and prioritizes China as a stimulus challenge,” while highlighting the “serious risk posed by Russia. “technology, industry and the foreign economy enshrine or violate our democratic values. “
The Biden administration’s priorities include $4 billion for U. S. alliances and leadership. The U. S. government to “compete effectively with the People’s Republic of China (PRC) and Russia. “Nearly $1. 8 billion would pass “to enforce the Indo-Pacific strategy to help a free, open, connected, secure, and resilient world of the Indo-Pacific,” and another $400 million would go to the People’s Republic of China’s Malign Influence Countering Evil Influence Fund. The budget provides another $682 million for Ukraine “to counter Russia’s malign influence and address emerging desires similar to security, energy, cybersecurity issues, disinformation, macroeconomic stabilization, and civil society resilience” and $6. 9 billion ” for the functions and readiness of U. S. forces, NATO allies and regional partners in the face of Russian aggression.
At home, Biden’s budget request aims to strengthen U. S. exports and supply chains. USA It grants the Commerce Department’s Bureau of Industry and Security a $30 million build “to promote national security and safe industry by strengthening the office’s ability to implement and enforce export controls. “The budget also points to an 11% increase in cybersecurity investment in civilian government agencies. Finally, Biden’s proposal supports the Defense Department’s focus on building an “integrated deterrence” through modernizing the military in all spaces of war through investment in construction. for studies and development.
Tim Culpan explores in Bloomberg how global electronics suppliers to diversify their production footprint beyond China are turning to electric cars as a catalyst to build capacity around the world.
Michelle Toh recounts Huawei executive Meng Wanzhou’s return to the company level on March 28, as sanctions continue to plague the company.
David Dorman points to China’s plan for virtual dominance in War on the Rocks.
Cybersecurity company Trellix and the Center for Strategic
Xinmei Shen explains in the South China Morning Post that the Chinese Communist Party’s most sensible exercise school exploits the concept of metaverse to exercise cadres.
In Reuters, Rothroughn Mak compares the exposure of China’s tech giants and their once enthusiastic investors after years of flattery and exaggeration to the emperor deceived in a fable through Hans Christian Andersen.
Axios’ Ina Fried warns that global generation criteria may be potential victims of the Russo-Ukrainian war.
Micah Maidenberg describes the aftermath of the China Eastern Airlines crash that killed the other 132 people on board, adding that he granted permission to U. S. accident investigators and technical advisers. The U. S. Department of China for research.
Liqian Ren analyzes the market’s reaction to the Chinese State Council’s reading of the assembly of the Financial Stability and Development Committee chaired by Vice Premier Liu He.
Stuart Rollo traces the long-term arms race of the quantum generation for The Conversation.
Chen Aizhu, Julie Zhu and Muyu Xu report to Reuters that China’s state-owned oil company Sinopec Group has suspended talks on proposed projects in Russia due to considerations about the effect of foreign sanctions.
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