It is always astounding how consistently the Chinese justice system works when public outrage over a crime is high enough. The brutal assault on four women in a restaurant in Tangshan two months ago was such a crime. Many people across the People’s Republic were left shocked and disgusted by these images. Their natural reflex to this video was not only a call for an adequate punishment, but also for a debate about violence against women in the country.
But the situation of women will hardly improve as long as censorship steps in every time such debates break out. How is Chinese society supposed to change substantially if it is not allowed to talk about what is wrong? A harsh sentence against the Tangshan criminals will not achieve anything to bring women more respect. On the contrary, they will remain the ones who suffer in the long run.
Meanwhile, the Chinese government is probably paying more attention to the concerns of its large corporations than to the needs of women. When Huawei founder Ren Zhengfei prepared his employees for tough times last week, he was primarily sending a signal to Beijing, Frank Sieren believes. That sounds plausible, since private company owners would be better off not to openly criticize the government. The last one to do so was Alibaba CEO Jack Ma. He now prefers to paint instead of leading his IT company into the future.
“The chill will be felt by everyone,” Ren Zhengfei recently warned his employees in a memo about tough times ahead. And the Huawei boss knows what he is talking about. He led the Chinese telecommunications group to the top of the world, Huawei had even overtaken its US competitor Apple and had risen to become the biggest smartphone manufacturer. But then came the steep fall – not because of entrepreneurial mistakes or China’s growth problems, but mainly because of political US sanctions. They completely destroyed Huawei’s main smartphone business.
The US sanctions were followed by six quarters of plummeting sales and profits. Since then, Huawei has only shined in the niche market of foldable smartphones. The company also recently made strong gains in tablets, but it still lags far behind Apple. The rest of the business is still at rock bottom.
At least Huawei’s workforce has hardly shrunk despite declining profits and sales. Whereas the Chinese telecommunications group had 197,000 employees in 2020, it still had 195,000 at the end of 2021 – a decline of around one percent, while sales slumped by 30 percent in the same period. This is the first staff reduction since 2008.
A look at its competitors shows just how special Huawei’s path is: Tencent, the most famous high-tech company in Shenzhen in southern China next to Huawei, laid off 4.7 percent of its workforce between March and June alone. That is about 5,500 employees in just three months – compared to Huawei’s 2,000 employees over an entire year. Alibaba even laid off 10,000 employees in three months.
But Huawei’s commitment to its employees is slowly paying off again. In the second quarter of this year, for example, the company managed to boost sales compared to the same period last year. Although the growth of 1.45 percent to around $25 billion is still low, it is an important step forward after a loss of 14 percent in the first quarter. However, profit slumped by 34 percent to the equivalent of just under $1.4 billion.
Nonetheless, this is good news for the group: The sales development could indicate that Huawei has passed the low point. There are also positive signs for the overall revenue. While it has slumped from ¥400 billion to ¥300 billion since the first half of 2019, the decline extends almost entirely to the smartphone business, which was devastated by US sanctions. The rest of the business is picking up: The 5G equipment business, admittedly, is only up 4.42 percent because the hot phase of China’s 5G rollout is already over. But the enterprise network business grew by a whopping 27.5 percent in the first half of the year.
But to ensure continued innovation, Huawei must now take on more debt – and it will do so primarily in China. On the one hand, because the faith in the company’s future is higher on the domestic market than on the international capital markets. And second, it is less risky for Huawei to take on debt in its own country than abroad.
And Huawei pursues this path steadfastly: Most recently, the company issued a 120-day bond worth the equivalent of $470 million on August 1. This means that Huawei has already borrowed ¥24 billion this year alone, compared to ¥9 billion last year. And yet the company’s debt ratio is still moderate.
In addition, Huawei needs to develop alternative businesses. One of the most promising areas is the Intelligent Vehicle sector. At the end of 2021, Huawei jointly launched the AITO M5 with the young car manufacturer Seres – with a remarkable start: The five-seater sold more than 11,000 models in the first 87 days. In July, the matching seven-seater M7 was also presented.
The company also launched a ride-hailing platform called Petal Chuxing, which is included in Huawei’s OS 3.0, the world’s third major operating system alongside Android and Apple’s IOS. In the meantime, OS 3.0 is defying all predictions of doom on around 300 million Huawei devices and as a platform on 170 million devices from other brands. This also shows that Washington has managed to hit Huawei’s consumer business hard, but failed to destroy it.
Of course, this is still a far cry from the big hit Huawei once had with its smartphones. But it is a promising start.
However, the most promising new area for Huawei is autonomous driving. A week ago, it partnered with idriverplus, a Beijing-based startup founded in 2015. The two companies plan to jointly develop autonomous vehicles that will be based on Huawei’s Ascend AI Processor.
Back in July, the manufacturer Arcfox sent its first car with “Huawei Inside” into production: The Alpha-S, whose autonomous driving system manages 400 Tera Operations Per Second (TOPS). In a sense, TOPS are the horsepower equivalent of chips. By comparison, the iPhone 13 reaches just 15.3 TOPS. And Arcfox is no small player either. It is a subsidiary of Daimler partner BAIC in Beijing, one of China’s four largest state-owned car manufacturers.
So Huawei has regained its optimistic outlook a while back already. At the company’s headquarters, sales are expected to return to pre-sanctions levels by 2025. The sanctions would then have set Huawei back by five years.
Against this background, the warning from Huawei CEO Ren has its own tone. For years now, he has been wondering how to keep such a large company united. Now that the numbers are improving a bit, it seems the time has come for Ren to urge employees not to let up. Because the tide is far from turning.
Moreover, Ren may also have had the rulers in Beijing in mind when he delivered his warning. It would be Ren’s indirect hint that the state leaders must do more to revive the Chinese economy.
The drought in large parts of China has generated apocalyptic images. However, in recent days the state media have found a way to put a positive spin on it. They repeatedly reported about the high-tech drones of the Wing Loong-2H UAV type. The Chinese invention is actually a piece of military equipment. However, China has converted some of the unmanned aircraft to be used specifically in the fight against droughts.
As the Chinese news portal Global Times reports, one of the Wing-Loong drones took off last Thursday in the particularly hard-hit province of Sichuan to perform “weather modification”. During its four-hour flight, the drone reportedly fired 20 volleys of silver iodide into the clouds to create artificial rain.
Silver iodide carries microscopic condensation nuclei into the cloud, to which water molecules attach and eventually form droplets. If they reach a large enough size, they fall to earth in the form of rain showers. According to state media, there have been more than 90 flights in ten provinces to bombard clouds with silver iodide since the beginning of August.
However, the majority of operations did not involve drones, but conventional aircraft. The specialists also launched thousands of missiles from the ground. Usually, converted pick-up trucks with missile launchers on the back are used for this purpose. This technology is said to have helped create “light rain showers” in the Chongqing metropolis, among other places, which was also hit hard by drought.
China has become something of the undisputed world champion in rainmaking. But the amount of artificially provoked precipitation is set to increase dramatically. By 2035, 5.5 million square kilometers of land are to be artificially irrigated. That would be equivalent to more than half the total land of the People’s Republic. The project would help ease “local drought and reduce the risk of forest fires”.
However, artificial rain is not a panacea against ongoing droughts and devastation. Even the silver iodide salvos can at best alleviate the impact of climate change, which China witnessed drastically this summer with an unprecedented heat wave. Despite the chemical reaction, the usual precipitation in a region increases by no more than 20 percent. And regions that, according to climate models, are predicted to experience permanent drought can not even be helped by drones and missiles.
Meanwhile, other Asian countries are growing increasingly concerned about the artificial alteration of rainfall cycles. Neighboring countries fear that they could be deprived of urgently needed rainfall. After all, clouds are already raining down over Chinese territory instead of naturally in other regions of the continent.
China rejects such accusations, but without providing evidence to the contrary. At the same time, however, Chinese scientists acknowledge that the technology has clear limitations. Several conditions must be met before rain missiles can be used safely, researcher Wei Ke of the Institute of Atmospheric Physics at the Chinese Academy of Sciences warns the Global Times. If there is too much wind, deployment is not possible. Naturally, no precipitation can be created if there are no clouds in the sky in the first place.
China has long been manipulating the weather. Even during the 2008 Summer Olympics in Beijing, the government used the same technology to force clouds approaching the capital to rain early. Although rain was forecast, the sky over Beijing remained bright blue during the Olympics. This approach shows that it is not just a matter of fighting drought. In the northwestern Chinese province of Xinjiang, authorities have been raining down clouds for many years to prevent hail damage and excessive downpours.
Over the years, China has steadily expanded its technical capabilities for distributing silver iodide. Not only drones or rocket launchers are used. Several years ago, scientists already presented a method to increase precipitation on the Tibetan Plateau. The idea was to build tens of thousands of stand-alone kiln chambers that would permanently release silver iodide into the air. Joern Petring/Gregor Koppenburg
Xiaolong Hu has learned that sometimes things just fall into place. “I chose German at the time because of a combination of sympathy and chance,” he recalls of the pioneering choice of a so-called small language. Today, this term still makes him smirk.
In 1988, the self-employed management consultant and China coach was faced with the decision of whether he should learn Japanese, French, Russian or German. German was still downright exotic in Shanghai at that time. The Shanghai Foreign Languages Secondary School he attended was a former diplomat school and the only one in the entire city where the language was taught.
However, after a student exchange brought Xiaolong Hu to Hamburg, he began to regard his choice as a stroke of luck. The time in Hamburg remained in his memory as a “lasting and impressive culture shock”. It awakened an ardent desire to return one day for a longer time. And indeed, Hu decided to study in Germany. Not in Hamburg, but in Hanover, where he still lives today.
After finishing his studies, Xiaolong Hu went into management consulting. 20 years have passed since then. He spent a good decade managing consulting projects. Among other things, he specialized in outsourcing. At the time, it was a big issue for many of his clients to relocate their production to Eastern Europe. Over time, Hu began to receive inquiries about whether he could also work with customers wanting to relocate to China.
Hu has worked for three German management consultancies as CEO in China and built two branch offices from the ground up. His last stop was at Unity, for which he opened offices in Shanghai and Beijing and steadily increased the workforce to a total of 20. The diversity of such tasks drives him to this day: “I’m a generalist at heart, I get excited about new projects and ideas incredibly quickly.”
At the end of 2019, he took the plunge into self-employment. Since then, Hu has been focusing on medium-sized companies in the mechanical engineering and service sectors with up to 300 employees. For Hu sees untapped opportunities in companies of this size: “I believe that German medium-sized companies have great potential. But they cannot afford ‘in-house’ China expertise,” he says.
Xiaolong Hu wants to help close this gap with his services. Sometimes he acts as a member of the supervisory board of Chinese subsidiaries, sometimes he supports decision-makers as a China coach. He also offers webinars, podcasts and, in the meantime, live events, which he develops in constant dialog with China-savvy managers. The positive feedback from his clientele shows him that many of these companies can definitely hold their own in China, even though they are designed for the European market: “You simply need experience in the East Asian region.”
His hobby is drawing. He posts some of his creations on the Internet. “When I really get some peace and quiet, I like to draw sketches of cities and landscapes,” Hu says. Chinese scenes have been out of the question for a while now because of travel restrictions. But he hopes that he will soon be able to put more of them under his pencil once he can provide companies in China with advice and support. Julius Schwarzwälder
Farewell to Chongqing: 300 firefighters from the southern Chinese province of Yunnan started their journey home in coaches and vans on Sunday. They helped to extinguish the large-scale forest fires in Chongqing, which raged for days around the metropolis on the Yangtze River.
It is always astounding how consistently the Chinese justice system works when public outrage over a crime is high enough. The brutal assault on four women in a restaurant in Tangshan two months ago was such a crime. Many people across the People’s Republic were left shocked and disgusted by these images. Their natural reflex to this video was not only a call for an adequate punishment, but also for a debate about violence against women in the country.
But the situation of women will hardly improve as long as censorship steps in every time such debates break out. How is Chinese society supposed to change substantially if it is not allowed to talk about what is wrong? A harsh sentence against the Tangshan criminals will not achieve anything to bring women more respect. On the contrary, they will remain the ones who suffer in the long run.
Meanwhile, the Chinese government is probably paying more attention to the concerns of its large corporations than to the needs of women. When Huawei founder Ren Zhengfei prepared his employees for tough times last week, he was primarily sending a signal to Beijing, Frank Sieren believes. That sounds plausible, since private company owners would be better off not to openly criticize the government. The last one to do so was Alibaba CEO Jack Ma. He now prefers to paint instead of leading his IT company into the future.
“The chill will be felt by everyone,” Ren Zhengfei recently warned his employees in a memo about tough times ahead. And the Huawei boss knows what he is talking about. He led the Chinese telecommunications group to the top of the world, Huawei had even overtaken its US competitor Apple and had risen to become the biggest smartphone manufacturer. But then came the steep fall – not because of entrepreneurial mistakes or China’s growth problems, but mainly because of political US sanctions. They completely destroyed Huawei’s main smartphone business.
The US sanctions were followed by six quarters of plummeting sales and profits. Since then, Huawei has only shined in the niche market of foldable smartphones. The company also recently made strong gains in tablets, but it still lags far behind Apple. The rest of the business is still at rock bottom.
At least Huawei’s workforce has hardly shrunk despite declining profits and sales. Whereas the Chinese telecommunications group had 197,000 employees in 2020, it still had 195,000 at the end of 2021 – a decline of around one percent, while sales slumped by 30 percent in the same period. This is the first staff reduction since 2008.
A look at its competitors shows just how special Huawei’s path is: Tencent, the most famous high-tech company in Shenzhen in southern China next to Huawei, laid off 4.7 percent of its workforce between March and June alone. That is about 5,500 employees in just three months – compared to Huawei’s 2,000 employees over an entire year. Alibaba even laid off 10,000 employees in three months.
But Huawei’s commitment to its employees is slowly paying off again. In the second quarter of this year, for example, the company managed to boost sales compared to the same period last year. Although the growth of 1.45 percent to around $25 billion is still low, it is an important step forward after a loss of 14 percent in the first quarter. However, profit slumped by 34 percent to the equivalent of just under $1.4 billion.
Nonetheless, this is good news for the group: The sales development could indicate that Huawei has passed the low point. There are also positive signs for the overall revenue. While it has slumped from ¥400 billion to ¥300 billion since the first half of 2019, the decline extends almost entirely to the smartphone business, which was devastated by US sanctions. The rest of the business is picking up: The 5G equipment business, admittedly, is only up 4.42 percent because the hot phase of China’s 5G rollout is already over. But the enterprise network business grew by a whopping 27.5 percent in the first half of the year.
But to ensure continued innovation, Huawei must now take on more debt – and it will do so primarily in China. On the one hand, because the faith in the company’s future is higher on the domestic market than on the international capital markets. And second, it is less risky for Huawei to take on debt in its own country than abroad.
And Huawei pursues this path steadfastly: Most recently, the company issued a 120-day bond worth the equivalent of $470 million on August 1. This means that Huawei has already borrowed ¥24 billion this year alone, compared to ¥9 billion last year. And yet the company’s debt ratio is still moderate.
In addition, Huawei needs to develop alternative businesses. One of the most promising areas is the Intelligent Vehicle sector. At the end of 2021, Huawei jointly launched the AITO M5 with the young car manufacturer Seres – with a remarkable start: The five-seater sold more than 11,000 models in the first 87 days. In July, the matching seven-seater M7 was also presented.
The company also launched a ride-hailing platform called Petal Chuxing, which is included in Huawei’s OS 3.0, the world’s third major operating system alongside Android and Apple’s IOS. In the meantime, OS 3.0 is defying all predictions of doom on around 300 million Huawei devices and as a platform on 170 million devices from other brands. This also shows that Washington has managed to hit Huawei’s consumer business hard, but failed to destroy it.
Of course, this is still a far cry from the big hit Huawei once had with its smartphones. But it is a promising start.
However, the most promising new area for Huawei is autonomous driving. A week ago, it partnered with idriverplus, a Beijing-based startup founded in 2015. The two companies plan to jointly develop autonomous vehicles that will be based on Huawei’s Ascend AI Processor.
Back in July, the manufacturer Arcfox sent its first car with “Huawei Inside” into production: The Alpha-S, whose autonomous driving system manages 400 Tera Operations Per Second (TOPS). In a sense, TOPS are the horsepower equivalent of chips. By comparison, the iPhone 13 reaches just 15.3 TOPS. And Arcfox is no small player either. It is a subsidiary of Daimler partner BAIC in Beijing, one of China’s four largest state-owned car manufacturers.
So Huawei has regained its optimistic outlook a while back already. At the company’s headquarters, sales are expected to return to pre-sanctions levels by 2025. The sanctions would then have set Huawei back by five years.
Against this background, the warning from Huawei CEO Ren has its own tone. For years now, he has been wondering how to keep such a large company united. Now that the numbers are improving a bit, it seems the time has come for Ren to urge employees not to let up. Because the tide is far from turning.
Moreover, Ren may also have had the rulers in Beijing in mind when he delivered his warning. It would be Ren’s indirect hint that the state leaders must do more to revive the Chinese economy.
The drought in large parts of China has generated apocalyptic images. However, in recent days the state media have found a way to put a positive spin on it. They repeatedly reported about the high-tech drones of the Wing Loong-2H UAV type. The Chinese invention is actually a piece of military equipment. However, China has converted some of the unmanned aircraft to be used specifically in the fight against droughts.
As the Chinese news portal Global Times reports, one of the Wing-Loong drones took off last Thursday in the particularly hard-hit province of Sichuan to perform “weather modification”. During its four-hour flight, the drone reportedly fired 20 volleys of silver iodide into the clouds to create artificial rain.
Silver iodide carries microscopic condensation nuclei into the cloud, to which water molecules attach and eventually form droplets. If they reach a large enough size, they fall to earth in the form of rain showers. According to state media, there have been more than 90 flights in ten provinces to bombard clouds with silver iodide since the beginning of August.
However, the majority of operations did not involve drones, but conventional aircraft. The specialists also launched thousands of missiles from the ground. Usually, converted pick-up trucks with missile launchers on the back are used for this purpose. This technology is said to have helped create “light rain showers” in the Chongqing metropolis, among other places, which was also hit hard by drought.
China has become something of the undisputed world champion in rainmaking. But the amount of artificially provoked precipitation is set to increase dramatically. By 2035, 5.5 million square kilometers of land are to be artificially irrigated. That would be equivalent to more than half the total land of the People’s Republic. The project would help ease “local drought and reduce the risk of forest fires”.
However, artificial rain is not a panacea against ongoing droughts and devastation. Even the silver iodide salvos can at best alleviate the impact of climate change, which China witnessed drastically this summer with an unprecedented heat wave. Despite the chemical reaction, the usual precipitation in a region increases by no more than 20 percent. And regions that, according to climate models, are predicted to experience permanent drought can not even be helped by drones and missiles.
Meanwhile, other Asian countries are growing increasingly concerned about the artificial alteration of rainfall cycles. Neighboring countries fear that they could be deprived of urgently needed rainfall. After all, clouds are already raining down over Chinese territory instead of naturally in other regions of the continent.
China rejects such accusations, but without providing evidence to the contrary. At the same time, however, Chinese scientists acknowledge that the technology has clear limitations. Several conditions must be met before rain missiles can be used safely, researcher Wei Ke of the Institute of Atmospheric Physics at the Chinese Academy of Sciences warns the Global Times. If there is too much wind, deployment is not possible. Naturally, no precipitation can be created if there are no clouds in the sky in the first place.
China has long been manipulating the weather. Even during the 2008 Summer Olympics in Beijing, the government used the same technology to force clouds approaching the capital to rain early. Although rain was forecast, the sky over Beijing remained bright blue during the Olympics. This approach shows that it is not just a matter of fighting drought. In the northwestern Chinese province of Xinjiang, authorities have been raining down clouds for many years to prevent hail damage and excessive downpours.
Over the years, China has steadily expanded its technical capabilities for distributing silver iodide. Not only drones or rocket launchers are used. Several years ago, scientists already presented a method to increase precipitation on the Tibetan Plateau. The idea was to build tens of thousands of stand-alone kiln chambers that would permanently release silver iodide into the air. Joern Petring/Gregor Koppenburg
Xiaolong Hu has learned that sometimes things just fall into place. “I chose German at the time because of a combination of sympathy and chance,” he recalls of the pioneering choice of a so-called small language. Today, this term still makes him smirk.
In 1988, the self-employed management consultant and China coach was faced with the decision of whether he should learn Japanese, French, Russian or German. German was still downright exotic in Shanghai at that time. The Shanghai Foreign Languages Secondary School he attended was a former diplomat school and the only one in the entire city where the language was taught.
However, after a student exchange brought Xiaolong Hu to Hamburg, he began to regard his choice as a stroke of luck. The time in Hamburg remained in his memory as a “lasting and impressive culture shock”. It awakened an ardent desire to return one day for a longer time. And indeed, Hu decided to study in Germany. Not in Hamburg, but in Hanover, where he still lives today.
After finishing his studies, Xiaolong Hu went into management consulting. 20 years have passed since then. He spent a good decade managing consulting projects. Among other things, he specialized in outsourcing. At the time, it was a big issue for many of his clients to relocate their production to Eastern Europe. Over time, Hu began to receive inquiries about whether he could also work with customers wanting to relocate to China.
Hu has worked for three German management consultancies as CEO in China and built two branch offices from the ground up. His last stop was at Unity, for which he opened offices in Shanghai and Beijing and steadily increased the workforce to a total of 20. The diversity of such tasks drives him to this day: “I’m a generalist at heart, I get excited about new projects and ideas incredibly quickly.”
At the end of 2019, he took the plunge into self-employment. Since then, Hu has been focusing on medium-sized companies in the mechanical engineering and service sectors with up to 300 employees. For Hu sees untapped opportunities in companies of this size: “I believe that German medium-sized companies have great potential. But they cannot afford ‘in-house’ China expertise,” he says.
Xiaolong Hu wants to help close this gap with his services. Sometimes he acts as a member of the supervisory board of Chinese subsidiaries, sometimes he supports decision-makers as a China coach. He also offers webinars, podcasts and, in the meantime, live events, which he develops in constant dialog with China-savvy managers. The positive feedback from his clientele shows him that many of these companies can definitely hold their own in China, even though they are designed for the European market: “You simply need experience in the East Asian region.”
His hobby is drawing. He posts some of his creations on the Internet. “When I really get some peace and quiet, I like to draw sketches of cities and landscapes,” Hu says. Chinese scenes have been out of the question for a while now because of travel restrictions. But he hopes that he will soon be able to put more of them under his pencil once he can provide companies in China with advice and support. Julius Schwarzwälder
Farewell to Chongqing: 300 firefighters from the southern Chinese province of Yunnan started their journey home in coaches and vans on Sunday. They helped to extinguish the large-scale forest fires in Chongqing, which raged for days around the metropolis on the Yangtze River.
