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The CCCEU Weekly Update 08 September 2023: Huawei's new chip breakthrough a big blow to US sanctions

CCCEU| Updated: Sep 8, 2023

Editor's Note: Greetings! Huawei's mysterious flagship new phones, Mate 60 Pro and others, surprise the market with their Made-in-China 7nm chipsets, 5G speed, and satellite calls, a game-changing breakthrough indicating the company's innovative capability to thrive even under suffocatingly stringent US sanctions. This edition of CCCEU Weekly Update brings you up to date on market developments and stories about China-EU dynamics. Have a wonderful weekend and enjoy your reading.


▶︎ Focus

This week has been quite eventful for Chinese companies, whether we're talking about the Chinese electric car companies making waves at the Munich International Motor Show or Huawei, which is currently in the global spotlight.

It's worth revisiting the teardown of the Huawei Mate 60 Pro by Bloomberg and TechInsights, an Ottawa-based information platform on the semiconductor industry.

TechInsights said that it had analyzed the new phone of Huawei Mate 60 Pro and found evidence of a made-in-China design and the use of a 7-nanometer technology that is a milestone for the Chinese chip industry.

The 7-nanometer chip was made by China's top chipmaker, Semiconductor Manufacturing International Corp (SMIC), the most advanced chipmaking SMIC has shown itself capable of, according to TechInsights, and it helps the phone achieve cellular speeds on par with 5G devices.

Dan Hutcheson, vice chair of TechInsights, said that the discovery showed the technical progress China's semiconductor industry has been able to make without EUV, the most advanced lithography tool.

Duiring an interview with China's CCTV, he noted that the technologies and quality of the Huawei Mate 60 series are on an amazing level. "It's definitely world-class."

The launch of Huawei new phones is "a double blow to US efforts to wall off Chinese access to sophisticated technology that could be used for civilian purposes or in advanced weapon systems," said a Bloomberg report.


Weekly updates: Hot Topics

EU targets Apple, Amazon, Meta and other Big Tech in next phase of digital crackdown

Six Big Tech companies including Amazon, Apple and Microsoft faced fresh pressure Wednesday from the European Union, which moved to counter their digital dominance with far-reaching rules aimed at giving users more choices and making competition fairer. Google parent Alphabet, Facebook owner Meta and TikTok parent ByteDance also were classified as online "gatekeepers" subject to the strictest requirements of the 27-nation EU's Digital Markets Act. The list of do's and don'ts seeks to prevent tech giants from cornering digital markets, with the threat of fines.


European battery companies call on EU for more support

Reuters reported that European metals and materials companies are urging the EU to ramp up financial support for the bloc's battery industry, a joint letter to the EU Commission showed on Thursday.

The companies said the bloc's current plans and funds were not enough for the necessary investments in the bloc's battery industry for electric vehicles and renewable power storage.

"Today China controls not only large shares of cleantech manufacturing, but also 50-90% of the critical minerals processing capacity needed for those, as well as many global resources," said the letter signed by 16 companies and organisations including miner Rio Tinto (RIO.L), chemicals group Solvay (SOLB.BR) and battery materials makers Umicore (UMI.BR) and Northvolt. 


2023 International Motor Show opens in Munich, Germany

The 2023 German International Automotive and Smart Mobility Expo recently opened in Munich. Compared with the previous expo, the number of Chinese exhibitors has doubled this year, becoming the highlight of this exhibition. Participants and industry experts believe that Chinese car companies can not only meet local needs, but also stimulate innovation and create more new opportunities for win-win cooperation between Chinese and European car companies. At the six-day Munich Motor Show, many Chinese brands such as BYD, MG, Leap, Xpeng, and Avita came prepared, launching the European premiere of new electric vehicles, as well as a number of main models, which attracted widespread attention. 


China's foreign trade dips 0.1% in first 8 months

According to Xinhua, China's foreign trade edged down to 27.08 trillion yuan ($3.7 trillion) in the first eight months of the year, a slight decrease of 0.1 percent year-on-year, according to the General Administration of Customs on Thursday, China Dialy reported.

Exports expanded 0.8 percent year-on-year to 15.47 trillion yuan, while imports declined 1.3 percent from a year earlier to 11.61 trillion yuan, data from the administration showed. 

China's first foreign state immunity law safeguards sovereignty, plays deterrent role

According to Global Times, the new foreign state immunity law was adopted at a session of the National People's Congress (NPC) Standing Committee on Friday, and it will take effect on January 1, 2024. It has 23 provisions and stipulates that China will move away from the absolute theory of foreign state immunity and adopt the restrictive theory of foreign state immunity.

According to the law, Chinese courts can legally accept and adjudicate cases with a foreign state as the defendant under certain conditions, Director-General of the Department of Treaty and Law of the Foreign Ministry Ma Xinmin told China Central Television in a latest interview. 


Weekly Updates: What are experts talking about?

Italy should proceed with caution on Belt and Road issues

Source: Institute of European Studies of Chinese Academy of Social Sciences

Author: Zhao Junjie 

Italy's Deputy Prime Minister and Minister of Foreign Affairs, Mr. Tajani, paid an official visit to China from September 3 to 5, and one of the issues that attracted a lot of attention during his trip was whether Italy would withdraw from the Belt and Road Initiative (BRI).

Previously, Italian Prime Minister Meloni has said that the decision on the "Belt and Road" will be made before the December deadline. In response to the Meloni government's statement that it wants to terminate the Belt and Road cooperation, the Chinese government has repeatedly demonstrated its goodwill and sincerity in cooperation, emphasizing that the Sino-Italian cooperation is a win-win situation for mutual benefit rather than a wishful thinking, and warning about the consequences of withdrawing from the Belt and Road Initiative.

If the Meloni government insists on withdrawing from the cooperation, China-Italy political, economic, trade and all-round cooperation will face challenges, and Italy's loss will be greater than the compensation that the US can give it. 


The Digital Markets Act is about enabling rights, not obliging changes in market conditions

Source: Bruegel Think Tank

Author: Christophe Carugati

Europe's new digital competition law, the Digital Markets Act (DMA), seeks to tame big tech's market power by imposing on the digital giants a list of positive and negative obligations. The DMA will give European business users and end users (consumers) new rights in relation to so-called 'gatekeepers', or hard to avoid digital companies, including Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft, which were designated as gatekeepers by the European Commission on 6 September. These companies must comply with the obligations from 6 March 2024.

The DMA makes it possible to challenge the gatekeepers and change the market conditions by lowering entry barriers for third-party products and services. However, the DMA does not force users to exercise their rights, nor does it force changes in the market. It empowers users of gatekeepers' services with new rights and it is this, if those rights are asserted, that could reshape the market. 


Please note: the English version of this issue is slightly different from our Chinese one. The views and opinions expressed in this article do not necessarily reflect the official position of the CCCEU.