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☆ US-China trade defies talk of decoupling to hit record high in 2022
▼ + stars: | 2023-02-08 | by ( Juliana Liu | ) edition.cnn.com time to read: +3 min

Hong Kong CNN —Trade between the United States and China hit a record high in 2022, even as political tension heightened between the world’s top two economies. The bilateral goods trade between the countries rose to $690.6 billion last year, according to official US data, which was released Tuesday. Exports to China increased by $2.4 billion to $153.8 billion, while imports of Chinese products rose by $31.8 billion to $536.8 billion according to the US Bureau of Economic Analysis. “Supply chains are sticky, particularly those linked to China,” Nick Marro, lead analyst for global trade at the Economist Intelligence Unit, told CNN. In October 2022, his administration imposed sweeping new curbs designed to curtail China’s access to technology critical to its growing military power.

☆ Baidu, the Chinese search engine giant, announces ChatGPT-style AI bot
▼ + stars: | 2023-02-06 | by ( Michelle Toh | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —Chinese search engine giant Baidu says it will be launching its own ChatGPT-style service. It will launch a new artificial intelligence chatbot called “Wenxin Yiyan” in Chinese, or “Ernie Bot” in English, a spokesperson told CNN on Tuesday. Baidu (BIDU) is currently testing the project internally and will likely roll out the service to users in March, the person said. The company did not provide further details, such as how the tool would look or whether it would appear as a feature within its popular search engine. Baidu’s AI investments can be seen as “both an offensive and defensive strategic move in China,” Daniel Ives, managing director of Wedbush Securities, told CNN.

☆ Foxconn January sales hit record high after production restored at world’s biggest iPhone factory
▼ + stars: | 2023-02-05 | by ( Michelle Toh | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —Apple supplier Foxconn says its January monthly sales hit a record high as it bounced back from Covid-19 disruptions in China. The manufacturer attributed its performance to a strong rebound at its sprawling campus in Zhengzhou, central China. The site, which is home to the world’s biggest iPhone factory, was crippled late last year by Covid-19 restrictions and workers’ protests. The figures underscore how Foxconn’s Zhengzhou campus, also known as “iPhone city,” is roaring back to life after the massive setbacks. The headaches had led analysts to predict that Apple would likely speed up its supply chain diversification away from China.

☆ China says it is ‘deeply concerned’ about reports of the latest US clampdown on Huawei
▼ + stars: | 2023-01-31 | by ( Michelle Toh | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —China has hit back after reports that Washington is moving to further restrict sales of American technology to Huawei. “China is deeply concerned,” Mao Ning, a spokesperson for the country’s foreign ministry, said at a press conference Tuesday. The following year, the US government expanded on those curbs by seeking to cut Huawei off from chip suppliers using US-made technology. US officials have argued that Huawei poses a risk to US national security. Western security experts, however, have said that China’s national security and intelligence laws require Chinese companies to comply with demands for information.

☆ Disney's Marvel movies are returning to China after almost four years with 'Black Panther' and 'Ant-Man'
▼ + stars: | 2023-01-19 | by ( Michelle Toh | ) edition.cnn.com time to read: +4 min

“Black Panther: Wakanda Forever” will open in China on February 7, roughly three months after its global debut, while “Ant-Man and the Wasp: Quantumania” will open on February 17, Marvel Studios announced on Chinese social media Tuesday. Since then, Marvel’s last eight movies have not been shown in the country, though that will drop down to seven with the upcoming “Black Panther” release, Dergarabedian said. Stars of Marvel Studios' "Black Panther: Wakanda Forever" attending the film's European premiere in London on Nov. 3, 2022. “This likely played a part in this welcome shift in playability for Marvel films in the country.”China’s box office generally rakes in billions of dollars a year. That put North America’s box office ahead once more in 2022, generating more than $7.5 billion compared with China’s $4.4 billion, according to Comscore data.

☆ Davos: No recession after all? Business leaders more hopeful as China reopens
▼ + stars: | 2023-01-17 | by ( Julia Horowitz | ) edition.cnn.com time to read: +4 min

Davos, Switzerland CNN —Bullishness about the global economy has been in short supply among business leaders in recent months, with fears of recession clouding the outlook and restraining investment. That’s thanks in large part to China, whose sudden removal of strict coronavirus restrictions late last year is expected to unleash a wave of spending that may offset economic weakness in the United States and Europe. Near term, China is in the grip of its worst coronavirus outbreak, keeping many people indoors and emptying shops and restaurants in recent weeks. “I’m expecting a solid growth number for China in 2023,” said Kevin Rudd, president of the Asia Society and a former prime minister of Australia. “Maybe we will be surprised also in the first half of the year.”Averting a global recession is not a done deal, however.

☆ Starbucks orders corporate employees to return to office 3 days a week
▼ + stars: | 2023-01-12 | by ( Juliana Liu | ) edition.cnn.com time to read: +2 min

CNN —Corporate workers at Starbucks must return to the office at least three days a week by the end of January, interim CEO Howard Schultz announced in a Wednesday memo, as another corporate giant clamps down on remote work. Employees of regional offices must report to the office three days a week, though the memo didn’t name the days or specify what counts as commuting distance. When Starbucks (SBUX) embarked on hybrid work last year, Schultz said, corporate workers “made a promise” to be in the office between one to two days a week. The announcement comes a few days after Disney (DIS) CEO Bob Iger ordered workers to return to the office four days a week starting March 1. Apple (AAPL), for example, has called for its corporate workers to be in the office at least three days a week.

Although international travel may not return immediately to pre-pandemic levels, companies, industries and countries that rely on Chinese tourists will get a boost in 2023, according to analysts. Elsewhere in the world, Cambodia, Mauritius, Malaysia, Taiwan, Myanmar, Sri Lanka, South Korea and Philippines are also likely to benefit from the return of Chinese tourists, according to research by Capital Economics. Saxon said he expected China’s outbound international travel to fully recover by the year end. “Generally, individuals are pragmatic and countries will welcome Chinese tourists due to their spending power,” he said, adding that countries may remove restrictions quickly when the Covid situation improves in China. “It will take time for international tourism to get going, but it will come rushing back, when it happens.”

Hong Kong CNN —Production at the world’s biggest iPhone factory, disrupted since October by China’s Covid-19 restrictions and worker protests, is now running at nearly full capacity, according to a Chinese state media report. The sprawling campus in central China, owned by Apple (AAPL) supplier Foxconn, was running at 90% of planned production capacity at the end of December, the Henan Daily newspaper reported Tuesday. It cited an interview with Wang Xue, deputy general manager of the facility, which is also known as iPhone city. Gou’s office told CNN that it “denies the report and its contents.”Wang was quoted by the Henan Daily as saying iPhone City currently had about 200,000 workers on site. Analysts said the production woes at iPhone City would speed up the pace of Apple’s supply chain diversification away from China.

☆ As the world courts TSMC, Taiwan worries about losing its ‘silicon shield’
▼ + stars: | 2022-12-09 | by ( Juliana Liu | ) edition.cnn.com time to read: +6 min

TSMC is considered a national treasure in Taiwan and supplies tech giants including Apple (AAPL) and Qualcomm (QCOM). Chiu claimed that the chip giant was under political pressure to move its operations and its most advanced technology to the US. In response, Wu said there was no secret deal, nor was there any attempt to diminish the importance of Taiwan to TSMC. But he believes the company will continue to manufacture its most advanced technology at home. Many experts believe that by the time 3-nanometer chips are being made in Arizona, TSMC’s Taiwan operations would be producing even smaller, more advanced chips.

☆ Shein tells suppliers to end long working days at factories by end of the month
▼ + stars: | 2022-12-06 | by ( Juliana Liu | ) edition.cnn.com time to read: +2 min

In October, the UK’s Channel 4 broadcast a documentary that made allegations of labor exploitation against two of Shein’s factory suppliers in China. In its statement, Shein said audits carried out by independent experts had refuted most of the allegations. But the investigation showed that workers at two of its suppliers were working longer hours than allowed under local rules. Employees at one factory were working a maximum of 13.5 hours per day, with at least two to three days off per month, the statement claimed. At another factory, staff were found to be working 12.5 hours a day with no fixed schedule for days off.

☆ Premarket stocks: The last time the US faced a debt fight this bad it lost its AAA rating
▼ + stars: | 2022-12-06 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

In a note on Monday, Goldman Sachs analysts warned that the upcoming debt limit battle in Washington could spark the most uncertainty since the disruptive 2011 debates that cost America its perfect AAA credit score and caused chaos on Wall Street. “To raise the debt limit next year, bipartisan support will be necessary but hard to achieve,” Goldman Sachs economists wrote in the report. Goldman Sachs analysts wrote that the political environment has “echoes of 1995 and 2011” — two very tense standoffs over the debt limit that hurt Main Street and Wall Street. Pain ahead: “It seems likely that uncertainty over the debt limit in 2023 could lead to substantial volatility in financial markets,” wrote Goldman analysts. “A failure to make timely payments would likely hit consumer confidence hard,” Goldman Sachs wrote.

☆ Foxconn restoring production at world's largest iPhone factory
▼ + stars: | 2022-12-05 | by ( Juliana Liu | ) edition.cnn.com time to read: +2 min

The “epidemic situation” at the facility, known as iPhone City and normally home to hundreds of thousands of workers, has been brought under control, the Taiwanese contract manufacturer said in a statement on Monday. Its executives were quoted as telling Reuters that full production would resume between late December and early January. Analysts said the production woes at iPhone City would speed up the pace of Apple’s supply chain diversification away from China. In recent weeks, according to The Wall Street Journal, Apple (AAPL) has accelerated plans to shift some of its production outside China. If Apple moves aggressively, more than 50% of iPhone production could come from India and Vietnam by the 2025/2026 fiscal year, versus the single-digit percentage currently, he added.

☆ China’s Zhengzhou, home to world’s largest iPhone factory, ends Covid lockdown
▼ + stars: | 2022-11-30 | by ( Juliana Liu | ) edition.cnn.com time to read: +2 min

Hong Kong CNN Business —The central Chinese city of Zhengzhou, home to the world’s largest iPhone factory, has lifted a five-day Covid lockdown, in a move that analysts have called a much-needed relief for Apple and its main supplier Foxconn. Zhengzhou is the site of “iPhone City,” a sprawling manufacturing campus owned by Taiwanese contract manufacturer Foxconn that normally houses about 200,000 workers churning out products for Apple (AAPL), including the iPhone 14 Pro and 14 Pro Max. The troubles started in October when workers left the campus in Zhengzhou, the capital of the central province of Henan, due to Covid-related fears. Total iPhone 14 Pro and 14 Pro Max shipments in the current quarter would be 15 million to 20 million units less than previously anticipated, according to Kuo. Due to the high price of the iPhone 14 Pro series, Apple’s overall iPhone revenue in the current holiday quarter could be 20% to 30% lower than investors’ expectations, he added.

☆ Apple has a huge problem at Foxconn's iPhone factory in China
▼ + stars: | 2022-11-25 | by ( Juliana Liu | ) edition.cnn.com time to read: +5 min

“Every week of this shutdown and unrest we estimate is costing Apple roughly $1 billion a week in lost iPhone sales. Now roughly 5% of iPhone 14 sales are likely off the table due to these brutal shutdowns in China,” he said. Security forces clash with workers during a protest outside Apple supplier Foxconn's factory in Zhengzhou, China, on November 23. Covid outbreakEarlier this month, Apple said shipments of its latest lineup of iPhones would be “temporarily impacted” by Covid restrictions in China. Even before this week’s demonstrations, Apple had started making the iPhone 14 in India, as it sought to diversify its supply chain away from China.

“The new recruits had to work more days to get the bonus they were promised, so they felt cheated,” the worker told CNN. Apple, for which Foxconn manufactures a range of products, told CNN Business that its employees were on the ground at the Zhengzhou facility. Videos showed workers clashing with security guards and fighting back tear gas fired by police. More workers joined the protest after seeing livestreams on video platforms Kuaishou and Douyin, the Chinese version of TikTok, the worker told CNN. Having worked at the Zhengzhou plant for six years, he said he was now deeply disappointed by Foxconn and planned to quit.

Beijing/Hong Kong CNN Business —Workers at China’s largest iPhone assembly factory were seen confronting police, some in riot gear, on Wednesday, according to videos shared over social media. Videos of many people leaving Zhengzhou on foot had gone viral on Chinese social media earlier in November, forcing Foxconn to step up measures to get its staff back. Numerous complaints have also been posted anonymously on social media platforms — accusing Foxconn of having changed the salary packages previously advertised. Searches for the term “Foxconn” on Chinese social media now yield few results, an indication of heavy censorship. A vital hubThe Zhengzhou facility is the world’s largest iPhone assembly site.

☆ The trade issues at stake for US and China economies at Indonesia meeting
▼ + stars: | 2022-11-14 | by ( Juliana Liu | ) edition.cnn.com time to read: +7 min

Frustrated by China’s huge trade surplus and accusing it of stealing US intellectual property, former President Donald Trump slapped tariffs on $50 billion of Chinese goods in June 2018. China, with its nearly $18 trillion economy, has in recent years been the main driver of global growth. China responded by slapping tariffs of its own on iconic American products like Harley-Davidson and Jack Daniel’s. Tech curbsBekink said she did not expect any dramatic shifts in trade flows to emerge as a result of the Biden-Xi meeting. US imports of semiconductors from China are 26% lower than before the imposition of 25% tariffs, according to Peterson.

CNN Business —Apple has limited the use of the AirDrop wireless file sharing function on devices in China, just weeks after reports that some protesters had used the popular feature to spread messages critical of the Chinese government. Users not in China face no such restriction and are able to receive files wirelessly from anyone, including people who are not contacts. Apple (AAPL) told CNN Business the new feature will be expanded globally in the coming year. Reaction in Chinese media to the software update was mixed. But others criticized Apple on Chinese social media.

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