Did Warren Buffett foresee or even trigger the stock market crash? Or did the legendary star investor simply look at the numbers before selling half of his Apple shares last Friday?
The latter is more likely. After all, there is a specific reason why Apple shares dropped so heavily during the stock market crash at the start of the week: Apple’s disappointing iPhone business in China, which is also Apple’s largest and therefore most important foreign market. The company’s revenue in China fell by 6.3 percent in the second quarter compared to the previous year.
Joern Petring writes that Apple’s poor performance certainly has to do with the Cupertino-based company’s unclear future in AI. In turn, Huawei’s growing strength, which is causing problems for the iPhone company, is likely due to the tech war between China and the United States. Huawei smartphones are losing market share in the West. Now comes the counterattack. And it’s hitting Apple.
Meanwhile, China woos partners in the Indo-Pacific. Indonesia receives many trade deals and investments in an attempt to win over the increasingly economically strong country. That is hardly surprising. What is astonishing, however, is that the Europeans apparently gain so little from this and, in turn, do not make an even greater effort to maintain good relations with the populous island nation. Wella Andany, who worked at Table.Briefings here in Berlin for a few weeks as part of a journalist exchange program, writes about Jakarta’s close ties with Beijing and the relatively poor relationship with Brussels.
China Foreign Minister Wang Yi’s visit to Jakarta in April this year sent a few messages, particularly on their tight relationship with Indonesia. Apart from the economic cooperation and the usual trading talk, both countries emphasized their mutual agreement in support of Palestine’s membership in the UN. “Once again, Indonesia’s position and the PRC’s position are the same, that we fully support Palestine’s membership in the UN,” said Indonesia’s Foreign Minister Retno Marsudi, emphasizing the alignment with China’s stance on the conflict.
The meeting was only two weeks apart from Prabowo Subianto’s visit on April 2 to Beijing, the first country he visited shortly after winning the presidential election in February. In his remarks, Xi Jinping describes the current defense minister as an “old friend of the Chinese people.”
China’s Belt and Road Initiative in Indonesia has reinforced its position as a “dependable partner” for the biggest nation of Southeast Asia – especially in the last ten years under the presidency of Joko Widodo, known as Jokowi, who will hand over the office to Subianto on October 20. During the Jokowi era, China has not only become Indonesia’s main trading partner, but has also become the second-largest investor in Indonesia, only just behind Singapore. Data from the Indonesian Ministry of Investment shows that China almost doubled its investments in 2022 compared to 2019, from 4.7 billion to 8.2 billion US dollars.
Today, China is in many, if not most, of Indonesia’s strategic projects, from high-speed railway trains, airports, toll roads, dams, power plants (both fossil-fueled and renewable), nickel smelters, and this year some Chinese investors expected to build housing in the new capital city, Nusantara, in East Borneo.
In contrast, relations between the EU and Indonesia are at a low point – which some experts believe is partly due to the disputes over ore nickel exports and palm oil bans, both cases favoring the EU at the World Trade Organization (WTO). Indonesian government representatives criticized the EU for what they see as discriminating against the palm oil industry, creating an unequal playing field and conducting regulatory imperialism.
In November last year, Subianto openly stated that the world was changing and that “we (Indonesia) no longer really need the EU.” The West’s reaction to the conflict between Israel and Hamas is thus just one of the reasons why Indonesia prefers to ally itself with China.
Friendly relations between China and Indonesia are apparently not limited to trade. Figures from the Indonesian Ministry of Investment show that the two countries have implemented more than 21,000 bilateral projects in the last five years. Trade relations also saw a robust trend, with the year ending 2023 hitting 127 billion US dollars. Indonesia’s exports are still concentrated mainly in China (25.66 percent), followed by the United States (9.57 percent), while the European Union’s exports were at 6.78 percent.
The statistics clearly show where China stands in Indonesia’s economy. However, Xi’s government was also seen as a reliable partner through wider diplomacy. During the pandemic, China made its presence felt by being Indonesia’s largest supplier of vaccines – when the country desperately tried to find vaccines for more than 208 million people.
Indonesia’s hunt for foreign investment in the highly criticized new capital city has not been particularly bright, with only a few countries making serious commitments. Amidst the dry source of foreign investment, China yet again appeared to be the dependable partner for Indonesia.
However, the Jokowi government’s ambition to attract investment and trade deals has been widely criticized. Economist Ahmad Feri Firdaus from the Institute for Development of Economics and Finance (INDEF) in Jakarta said it seems Indonesia is rolling out the “red carpet” for China to keep the money pouring in. The flood of Chinese workers, China’s debt trap, environmental damage close to Chinese nickel projects as well as agricultural conflicts are some of the highly pressing issues that the government seems to shrug off.
Even if the government repeatedly denies that it is dependent on China, the dominance of the People’s Republic is undeniable. Swamped by cheap Chinese products, the textile industry, one of many that suffered, had to lay off workers. Social commerce TikTok Shop, which was seen as a threat to Indonesia’s small and medium enterprises, was once banned, now freely operates under Tokopedia after ByteDance bought 75 percent shares of the former Indonesia-owned e-commerce unicorn.
Despite ASEAN being the EU’s third-largest trading partner outside Europe, after the US and China, Indonesia is not seen as a main partner. The European External Action Service (EEAS) publication states that in 2022, the total trade value between EU-Indonesia is 32.6 billion euros, below Vietnam, Thailand, Singapore, and Malaysia.
For years, both parties seem unable to find common ground, hence the deadlock in the Free Trade Agreement, which has been in discussion since 2016. Jokowi’s government said to set a target to rectify the agreement before he leaves office this October, yet nothing is confirmed.
Experts therefore do not expect a change of direction any time soon, especially as Indonesia is lagging behind in the transition to green energy and is too cozy with China. “I don’t think the relationship will improve any time soon unless the EU is willing to make a few adjustments,” said a Southeast Asian Study Expert and lecturer at the Department of International Relations, University of Gadjah Mada. Wella Andany
Journalist Wella Andany worked at Table.Briefings as part of an exchange program by the organization IJP.
The global stock market crash at the beginning of the week hit Apple shares particularly hard. The US company lost a whopping 160 billion US dollars in value at times. One of the main reasons: Apple is struggling with weak sales figures in China. As the Cupertino-based company announced at the beginning of August, consolidated sales in the People’s Republic fell by 6.3 percent year-on-year to 14.3 billion dollars in the second quarter. This is the sixth consecutive quarterly decline. This may have been one reason star investor Warren Buffett of Berkshire Hathaway decided to sell half his Apple shares. Apparently, he is certain that Apple will not be able to build on the successes of previous years in China in the near future.
According to market research firm IDC, iPhone sales in China fell by 3.1 percent in the same period. In contrast, the overall Chinese smartphone market grew significantly by almost nine percent. For the first time in four years, Apple is no longer one of the five largest smartphone manufacturers in China. The top tier now only consists of local manufacturers. The brands Vivo (1st place), Oppo (3rd place) and Honor (4th place) have been reliably represented in the top ranks for years. Huawei, which now ranks 2nd, has probably made the biggest leap recently.
Huawei was already considered sidelined, as it was practically impossible for the Shenzhen-based company to build advanced 5G mobile phones due to the US sanctions. The company suffered from a lack of important imports of cutting-edge US technology. The turning point for Huawei came with the new Mate 60 Pro model. It is powered by the Kirin 9000S processor, which was developed in China and is 5G-capable. Huawei sold 18 million devices in the last quarter alone.
“This year the slump of Apple [in the first half of 2024] goes beyond just seasonality but is directly a result of increased competition from Huawei, the only other major player in the premium segment outside of Apple,” IDC Research Director Nabila Popal told the Financial Times.
However, Xiaomi smartphones have also recently become increasingly popular with Chinese buyers. The company ranked fifth in the sales charts. This success was mainly down to the fact that Xiaomi attracted a lot of attention with the successful launch of its new electric car. The SU7, which looks like a much more affordable Porsche, is hugely popular in China. This has also meant that more buyers have regained interest in Xiaomi smartphones.
For Apple, on the other hand, problems are mounting. The upcoming launch of the next iPhone this fall is overshadowed by a big question: Chinese customers want to know whether Apple devices will still be able to compete with domestic devices when it comes to one important new feature. Manufacturers will need to equip their smartphones launching this year or next year with advanced AI functions.
Apple has announced the “Apple Intelligence” function. It is supposed to be an improved version of Apple’s voice assistant Siri and can automatically organize emails or transcribe and summarize audio recordings, for example. However, the AI is reportedly based on ChatGPT, which is provided by the US company OpenAI. And ChatGPT is not available in China, meaning Apple has to look for a local solution there. The company has not yet commented on what exactly this solution will look like.
Baidu and Alibaba are two of the Chinese technology giants that have their own large language models (LLMs) and voice assistants that work like ChatGPT. So they could be potential partners for Apple. However, some analysts also believe that Apple may have to develop its own AI model. The next iPhone launch in China this fall could therefore be bumpy for Apple.
However, the latest company figures also show that Apple can continue to grow despite the problems in China. Globally, the company recorded a revenue increase of around five percent. This means that Apple is growing faster in other regions of the world than it is shrinking in China.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
Hu Xijin, the verbose former editor-in-chief of the state-run newspaper Global Times, has disappeared. He has not posted on social media for over a week. Normally, the journalist known for his nationalistic tones spouts his mostly pro-Beijing opinions to the world on WeChat, Weibo or X every day.
However, according to Bloomberg, Hu apparently went too far with a post and was unceremoniously banned from posting. Allegedly, the reason for this was his analysis of the Third Plenum’s results. The important Communist Party meeting three weeks ago focused on future economic policy. Hu Xijin apparently drew conclusions from the final document that angered Beijing.
Hu found that the supposedly important slogan pledging to keep “public ownership as the mainstay” of the economy, which had been used in previous meetings, was no longer mentioned. In a WeChat post, he claimed that this omission showed that “non-public ownership and public ownership have become truly equal in their status.” Shortly afterward, the WeChat post was deleted and Hu was accused of misinterpreting the final document.
Even the central Communist Party organ, the People’s Daily, decided to become involved with a lengthy commentary. It emphasized that the fundamental approach to the state and private sector had not changed.
The Hong Kong newspaper Sing Tao Daily managed to contact Hu. He declined to comment directly on the ban reported by Bloomberg, but did not deny it either. “I personally don’t want to say anything. You can just read what’s online. Please understand,” he told the newspaper. Some experts believe Hu’s silence, which deviates from his usual outspoken style on social media, clearly shows that he had crossed a line by publicly disagreeing with the Party line.
“His comments have crossed the red line set up by the Communist Party, and the severity of the punishment, which is an outright ban from posting on social media, sends a warning to the rest of China that authorities have zero tolerance for opinions that deviate from the official line,” Hung Chin-fu, an expert of Chinese politics at National Cheng-Kung University in Taiwan, told US broadcaster Voice of America.
It is astounding that something like this happened to Hu, of all people. After all, he has been working deep within the Party’s propaganda system for almost three decades. Who else, if not him, would be able to tell where the “red lines” are?
Hu Xijin was born in Beijing in 1960 and studied Russian at Peking University. He began his career as a journalist in the early 1990s as a foreign correspondent for the People’s Daily, reporting on events such as the collapse of the Soviet Union. In 1996, he became part of the Global Times editorial team, which is affiliated with the People’s Daily but has a more international focus – and also has an English version with slightly different content.
In 2005, Hu was appointed editor-in-chief of the Global Times and shaped the newspaper with his nationalistic and often provocative coverage. He built the paper into one of China’s most influential newspapers and was known for his outspoken and sharp criticism of Western countries, especially on social media. Hu retired in 2021 but remains a prominent voice in China’s media landscape. On X, Hu Xijin writes much of his commentary in English, making it accessible to the outside world he so often criticizes.
Although it seems unlikely that Hu will be banned from social media forever, even a temporary ban for him and others will probably have been understood as a clear warning shot. Joern Petring
Watermelons are healthy. With their high water content, they detoxify and deacidify the body. And: At least in China, it is said that watermelons are also good for the skin. Regardless, a daycare center in the city of Hanan, Hebei province, holds a watermelon eating contest every year.
Did Warren Buffett foresee or even trigger the stock market crash? Or did the legendary star investor simply look at the numbers before selling half of his Apple shares last Friday?
The latter is more likely. After all, there is a specific reason why Apple shares dropped so heavily during the stock market crash at the start of the week: Apple’s disappointing iPhone business in China, which is also Apple’s largest and therefore most important foreign market. The company’s revenue in China fell by 6.3 percent in the second quarter compared to the previous year.
Joern Petring writes that Apple’s poor performance certainly has to do with the Cupertino-based company’s unclear future in AI. In turn, Huawei’s growing strength, which is causing problems for the iPhone company, is likely due to the tech war between China and the United States. Huawei smartphones are losing market share in the West. Now comes the counterattack. And it’s hitting Apple.
Meanwhile, China woos partners in the Indo-Pacific. Indonesia receives many trade deals and investments in an attempt to win over the increasingly economically strong country. That is hardly surprising. What is astonishing, however, is that the Europeans apparently gain so little from this and, in turn, do not make an even greater effort to maintain good relations with the populous island nation. Wella Andany, who worked at Table.Briefings here in Berlin for a few weeks as part of a journalist exchange program, writes about Jakarta’s close ties with Beijing and the relatively poor relationship with Brussels.
China Foreign Minister Wang Yi’s visit to Jakarta in April this year sent a few messages, particularly on their tight relationship with Indonesia. Apart from the economic cooperation and the usual trading talk, both countries emphasized their mutual agreement in support of Palestine’s membership in the UN. “Once again, Indonesia’s position and the PRC’s position are the same, that we fully support Palestine’s membership in the UN,” said Indonesia’s Foreign Minister Retno Marsudi, emphasizing the alignment with China’s stance on the conflict.
The meeting was only two weeks apart from Prabowo Subianto’s visit on April 2 to Beijing, the first country he visited shortly after winning the presidential election in February. In his remarks, Xi Jinping describes the current defense minister as an “old friend of the Chinese people.”
China’s Belt and Road Initiative in Indonesia has reinforced its position as a “dependable partner” for the biggest nation of Southeast Asia – especially in the last ten years under the presidency of Joko Widodo, known as Jokowi, who will hand over the office to Subianto on October 20. During the Jokowi era, China has not only become Indonesia’s main trading partner, but has also become the second-largest investor in Indonesia, only just behind Singapore. Data from the Indonesian Ministry of Investment shows that China almost doubled its investments in 2022 compared to 2019, from 4.7 billion to 8.2 billion US dollars.
Today, China is in many, if not most, of Indonesia’s strategic projects, from high-speed railway trains, airports, toll roads, dams, power plants (both fossil-fueled and renewable), nickel smelters, and this year some Chinese investors expected to build housing in the new capital city, Nusantara, in East Borneo.
In contrast, relations between the EU and Indonesia are at a low point – which some experts believe is partly due to the disputes over ore nickel exports and palm oil bans, both cases favoring the EU at the World Trade Organization (WTO). Indonesian government representatives criticized the EU for what they see as discriminating against the palm oil industry, creating an unequal playing field and conducting regulatory imperialism.
In November last year, Subianto openly stated that the world was changing and that “we (Indonesia) no longer really need the EU.” The West’s reaction to the conflict between Israel and Hamas is thus just one of the reasons why Indonesia prefers to ally itself with China.
Friendly relations between China and Indonesia are apparently not limited to trade. Figures from the Indonesian Ministry of Investment show that the two countries have implemented more than 21,000 bilateral projects in the last five years. Trade relations also saw a robust trend, with the year ending 2023 hitting 127 billion US dollars. Indonesia’s exports are still concentrated mainly in China (25.66 percent), followed by the United States (9.57 percent), while the European Union’s exports were at 6.78 percent.
The statistics clearly show where China stands in Indonesia’s economy. However, Xi’s government was also seen as a reliable partner through wider diplomacy. During the pandemic, China made its presence felt by being Indonesia’s largest supplier of vaccines – when the country desperately tried to find vaccines for more than 208 million people.
Indonesia’s hunt for foreign investment in the highly criticized new capital city has not been particularly bright, with only a few countries making serious commitments. Amidst the dry source of foreign investment, China yet again appeared to be the dependable partner for Indonesia.
However, the Jokowi government’s ambition to attract investment and trade deals has been widely criticized. Economist Ahmad Feri Firdaus from the Institute for Development of Economics and Finance (INDEF) in Jakarta said it seems Indonesia is rolling out the “red carpet” for China to keep the money pouring in. The flood of Chinese workers, China’s debt trap, environmental damage close to Chinese nickel projects as well as agricultural conflicts are some of the highly pressing issues that the government seems to shrug off.
Even if the government repeatedly denies that it is dependent on China, the dominance of the People’s Republic is undeniable. Swamped by cheap Chinese products, the textile industry, one of many that suffered, had to lay off workers. Social commerce TikTok Shop, which was seen as a threat to Indonesia’s small and medium enterprises, was once banned, now freely operates under Tokopedia after ByteDance bought 75 percent shares of the former Indonesia-owned e-commerce unicorn.
Despite ASEAN being the EU’s third-largest trading partner outside Europe, after the US and China, Indonesia is not seen as a main partner. The European External Action Service (EEAS) publication states that in 2022, the total trade value between EU-Indonesia is 32.6 billion euros, below Vietnam, Thailand, Singapore, and Malaysia.
For years, both parties seem unable to find common ground, hence the deadlock in the Free Trade Agreement, which has been in discussion since 2016. Jokowi’s government said to set a target to rectify the agreement before he leaves office this October, yet nothing is confirmed.
Experts therefore do not expect a change of direction any time soon, especially as Indonesia is lagging behind in the transition to green energy and is too cozy with China. “I don’t think the relationship will improve any time soon unless the EU is willing to make a few adjustments,” said a Southeast Asian Study Expert and lecturer at the Department of International Relations, University of Gadjah Mada. Wella Andany
Journalist Wella Andany worked at Table.Briefings as part of an exchange program by the organization IJP.
The global stock market crash at the beginning of the week hit Apple shares particularly hard. The US company lost a whopping 160 billion US dollars in value at times. One of the main reasons: Apple is struggling with weak sales figures in China. As the Cupertino-based company announced at the beginning of August, consolidated sales in the People’s Republic fell by 6.3 percent year-on-year to 14.3 billion dollars in the second quarter. This is the sixth consecutive quarterly decline. This may have been one reason star investor Warren Buffett of Berkshire Hathaway decided to sell half his Apple shares. Apparently, he is certain that Apple will not be able to build on the successes of previous years in China in the near future.
According to market research firm IDC, iPhone sales in China fell by 3.1 percent in the same period. In contrast, the overall Chinese smartphone market grew significantly by almost nine percent. For the first time in four years, Apple is no longer one of the five largest smartphone manufacturers in China. The top tier now only consists of local manufacturers. The brands Vivo (1st place), Oppo (3rd place) and Honor (4th place) have been reliably represented in the top ranks for years. Huawei, which now ranks 2nd, has probably made the biggest leap recently.
Huawei was already considered sidelined, as it was practically impossible for the Shenzhen-based company to build advanced 5G mobile phones due to the US sanctions. The company suffered from a lack of important imports of cutting-edge US technology. The turning point for Huawei came with the new Mate 60 Pro model. It is powered by the Kirin 9000S processor, which was developed in China and is 5G-capable. Huawei sold 18 million devices in the last quarter alone.
“This year the slump of Apple [in the first half of 2024] goes beyond just seasonality but is directly a result of increased competition from Huawei, the only other major player in the premium segment outside of Apple,” IDC Research Director Nabila Popal told the Financial Times.
However, Xiaomi smartphones have also recently become increasingly popular with Chinese buyers. The company ranked fifth in the sales charts. This success was mainly down to the fact that Xiaomi attracted a lot of attention with the successful launch of its new electric car. The SU7, which looks like a much more affordable Porsche, is hugely popular in China. This has also meant that more buyers have regained interest in Xiaomi smartphones.
For Apple, on the other hand, problems are mounting. The upcoming launch of the next iPhone this fall is overshadowed by a big question: Chinese customers want to know whether Apple devices will still be able to compete with domestic devices when it comes to one important new feature. Manufacturers will need to equip their smartphones launching this year or next year with advanced AI functions.
Apple has announced the “Apple Intelligence” function. It is supposed to be an improved version of Apple’s voice assistant Siri and can automatically organize emails or transcribe and summarize audio recordings, for example. However, the AI is reportedly based on ChatGPT, which is provided by the US company OpenAI. And ChatGPT is not available in China, meaning Apple has to look for a local solution there. The company has not yet commented on what exactly this solution will look like.
Baidu and Alibaba are two of the Chinese technology giants that have their own large language models (LLMs) and voice assistants that work like ChatGPT. So they could be potential partners for Apple. However, some analysts also believe that Apple may have to develop its own AI model. The next iPhone launch in China this fall could therefore be bumpy for Apple.
However, the latest company figures also show that Apple can continue to grow despite the problems in China. Globally, the company recorded a revenue increase of around five percent. This means that Apple is growing faster in other regions of the world than it is shrinking in China.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
Hu Xijin, the verbose former editor-in-chief of the state-run newspaper Global Times, has disappeared. He has not posted on social media for over a week. Normally, the journalist known for his nationalistic tones spouts his mostly pro-Beijing opinions to the world on WeChat, Weibo or X every day.
However, according to Bloomberg, Hu apparently went too far with a post and was unceremoniously banned from posting. Allegedly, the reason for this was his analysis of the Third Plenum’s results. The important Communist Party meeting three weeks ago focused on future economic policy. Hu Xijin apparently drew conclusions from the final document that angered Beijing.
Hu found that the supposedly important slogan pledging to keep “public ownership as the mainstay” of the economy, which had been used in previous meetings, was no longer mentioned. In a WeChat post, he claimed that this omission showed that “non-public ownership and public ownership have become truly equal in their status.” Shortly afterward, the WeChat post was deleted and Hu was accused of misinterpreting the final document.
Even the central Communist Party organ, the People’s Daily, decided to become involved with a lengthy commentary. It emphasized that the fundamental approach to the state and private sector had not changed.
The Hong Kong newspaper Sing Tao Daily managed to contact Hu. He declined to comment directly on the ban reported by Bloomberg, but did not deny it either. “I personally don’t want to say anything. You can just read what’s online. Please understand,” he told the newspaper. Some experts believe Hu’s silence, which deviates from his usual outspoken style on social media, clearly shows that he had crossed a line by publicly disagreeing with the Party line.
“His comments have crossed the red line set up by the Communist Party, and the severity of the punishment, which is an outright ban from posting on social media, sends a warning to the rest of China that authorities have zero tolerance for opinions that deviate from the official line,” Hung Chin-fu, an expert of Chinese politics at National Cheng-Kung University in Taiwan, told US broadcaster Voice of America.
It is astounding that something like this happened to Hu, of all people. After all, he has been working deep within the Party’s propaganda system for almost three decades. Who else, if not him, would be able to tell where the “red lines” are?
Hu Xijin was born in Beijing in 1960 and studied Russian at Peking University. He began his career as a journalist in the early 1990s as a foreign correspondent for the People’s Daily, reporting on events such as the collapse of the Soviet Union. In 1996, he became part of the Global Times editorial team, which is affiliated with the People’s Daily but has a more international focus – and also has an English version with slightly different content.
In 2005, Hu was appointed editor-in-chief of the Global Times and shaped the newspaper with his nationalistic and often provocative coverage. He built the paper into one of China’s most influential newspapers and was known for his outspoken and sharp criticism of Western countries, especially on social media. Hu retired in 2021 but remains a prominent voice in China’s media landscape. On X, Hu Xijin writes much of his commentary in English, making it accessible to the outside world he so often criticizes.
Although it seems unlikely that Hu will be banned from social media forever, even a temporary ban for him and others will probably have been understood as a clear warning shot. Joern Petring
Watermelons are healthy. With their high water content, they detoxify and deacidify the body. And: At least in China, it is said that watermelons are also good for the skin. Regardless, a daycare center in the city of Hanan, Hebei province, holds a watermelon eating contest every year.
