American Ban on ZTE offers much food for thought & pain together with ZTE

This photo taken on April 19, 2018 shows the ZTE logo on a building in Nanjing in China's eastern Jiangsu province.AFP/Getty Images

 

Ban on ZTE offers much food for thought

The US ban on sales of chips and components to China's telecommunications company ZTE shocked Chinese society. Some Chinese people are furious at US behavior, others think ZTE deserves it, while some advocate Beijing take it as a warning and boost the country's domestic semiconductor industry. Some are more pessimistic and feel China cannot beat the US in a trade war.

The ZTE case can be argued as a show of high-tech hegemony by the US. It is absurd for Washington to pull this maneuver at the eleventh hour simply because ZTE failed to cut bonuses for its 35 employees as promised. The logic works for US society and the West is watching the case for fun. But certain Chinese people are also taking pleasure in it.  This is the reality.

It must be admitted that the US is powerful and it has started to punch China hard. The rise of China has reached a juncture where Beijing has prompted Washington to ponder its status as the world's No.1 and provided a somewhat disjointed West with a reason to strengthen its solidarity. The impulse to contain China's rise is emerging among Western elites. Radical and even risky policies toward China are gaining increasing support.

China needs a strong will, an open mind and the capacity to fight back. Through political solidarity and a robust economy, Beijing should be tough enough to withstand the slings and arrows. China needs to incubate and shape strategic technology research and development.

The reason why chip technology has experienced such limited progress despite years of advocacy is that the Chinese system has not yet formed a key driving force for it.

Beijing must develop its "nuclear weapons" in the field of economics to make the outside world fear strategic confrontation with China.

China should also make friends worldwide, including Western nations, so as to unite all the forces that can be united. It must not overly focus on gains and losses in friction with others. Beijing must protect its interests, but in the meantime it cannot isolate itself doing so.

China needs to accept diverse opinions on the internet, governing them but also adapting to them so as to prevent online opinions from impacting on society's overall judgment and confidence.

It is hoped that China will develop a greater core competitiveness which other countries cannot match. This is an expectation of all Chinese people.

American business to pain together in ZTE case

https://youtu.be/XgbspspyfLQ

The US government sales ban of American components to the ZTE Corporation will surely inflict significant damage to the company. However, the pattern of globalization shows that not only will the US not secure a victory, it will also suffer a harsh blowback. The US stock market came to a similar conclusion, and media from around the world calculated that the US' future losses will be significant.

Qualcomm is a major mobile chip supplier for ZTE mobile phones. According to Reuters, Qualcomm will be harmed during this strike because ZTE is an important client, and its competitors could benefit from ZTE choosing alternative manufacturers. Furthermore, Qualcomm might suffer more setbacks when China retaliates on the US for this ban.

According to studies by various media organizations, the full implementation of the seven-year sales ban on ZTE will amount to combined loss of $6.8 billion for Qualcomm, Acacia Communications, and Oclaro Inc. It will also affect more than 32,000 employees. Due to this estimation, Acacia Communications stocks dropped 35.95 percent this week. Additionally, Intel and Microsoft will be hit by shockwaves in the tech industry.

Over the years, China has grown to become the largest sales market for US electronic chips, providing US companies with substantial funds for research and development. Losing the Chinese market might cause these US companies to decline in quality, which could result in a bleak financial future.US semiconductor companies are facing real threats as they will likely be taken over by their opponents.

The US will also be hurt from increasing suspicions to its business environment. The US government ended ZTE's business dealings with American companies by force, due to "35 employees' bonuses issues" for the company with 80,000 employees. Is the American business environment still trustworthy? Does this not imply that the US government can bully whoever it wishes? Cooperation with American companies is already difficult and being reviewed by the US government for political correctness will not make matters easier.

Some Westerners criticize the risks of doing business with Chinese companies, but not one multinational company has experienced the same mistreatment ZTE has been subjected to. The proper name for ZTE's case could be called "35 people bonus crisis" and if this is what starts the cooperation breakdown between the US and China, or globalization in general, it will be one of the most bizarre jokes in history.

China will hit back in the best way it knows and inflict losses for American companies in China. Washington should not have any delusions of tolerance from China after causing such damage to its businesses.

With China and the US trading blows in this situation, the US economy and trade relations will delve into chaos. Investments of American companies in China far exceed Chinese companies in the US, meaning that the US has more to lose since these investments will not be spared during this fight.

Most importantly, Chinese society will lose faith in cooperation with American high-tech companies. The "35 people bonus crisis" will also serve as a push for China determination to develop its semiconductor industry to replace America's components.

China will endure a sting in the high-tech sector confrontation, but the US will suffer lasting pain. China has been slow to develop its semiconductor technology because it is cheaper to purchase American products in the past. Developing chips and operating systems will require massive market support and China's yearly import of $200 billion can definitely cover the funding for this research.

The consequences of punishing ZTE is now out of Washington's control. The intertwined economies of China and the US are like "conjoined twins" and separation will cause major pain for both sides. Washington's thinking that this is a unilateral punishment is naïve, and this short-sighted judgement will be paid at the expense of American companies and enterprises. - - Global Times


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Why China cannot concede in trade war

Washington has unrealistic fantasies about “balancing China-US trade.” It tries to solve US economic issues with sticks and threats rather than painstaking reforms. Simply put, it attempts to make a hard sell. The world is required to buy whatever the US produces at its convenience, and developing countries like China cannot make technological progress in the process.

China to open wider: How will US react?

If Washington thinks China's upgrade of its opening-up was triggered by US menaces, it is making a historic mistake in its relationship with Beijing. Whether the Sino-US trade war is aggravated depends on Washington. It is hoped US actions accord with Trump's pleasant tweets rather than more old carrot-and-stick

Opening-up China's future growth path

The community with shared future for mankind is a goal of China to lead the world forward into the future. The Belt and Road initiative is one of the paths toward it. The world has never seen a major power emerging with a peaceful and cooperative manner. Some people say that China is only pretending to rise peacefully. After Beijing's new measures were announced at Tuesday's forum, the world should have gained a better understanding of China.

Trump's car tariff tweet distorts truth

With the development of China's economic growth and strength of science and technology, further opening-up and lowering of tariffs will be the future trend. But how China will do this will be decided based on WTO rules and China's own interests. This is China's sovereignty. Beijing will never listen to the command of Washington.

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New approaches to people oriented human resource management

People-centric logo: The Chinese character for ‘people’, rén, dominates the entrance to its office.

The growing usage of technology can help human resource achieve better performance

IT IS often said that managing people is a combination of art and science. But the increasing dominance of technology in workplaces opens up a new perspective and opportunities in how organisations most valuable resource – its human capital – is being employed.

One of the most obvious changes that can be observed among employers, says Accendo HR Solutions group chief executive officer Sharma KSK Lachu, is the realisation that maintaining the traditional functions of the human resource (HR) department – such as processing payroll and employees’ rosters – is not the way forward to excel in the digital age.

New approaches emphasising efficiencies and talent development are needed to excel in people management, he adds.

“The process of recruiting, retaining and developing talents within organisations has to be changed to meet the expectation of both employers and employees, which in turn could help translate into outstanding performance standards,” he says.

Sharma notes that rich data insights are the best tool to help organisations deliver more engaging content and meet growing customer expectations for highly relevant and targeted information in the workplace. He calls it the democratisation of data and information to help workplaces function more efficiently. This could also help employees lead a more satisfactory work life as functions and responsibilities can be streamlined with the help of data, enabling them to focus on higher-level work.

 

Bigger reach: Sharma says the company is also looking at expanding into other Asean countries.

Today’s workforce is different. There needs to be more incentive for employees to stay on in their jobs.

Citing the example of his own father, who stayed with a single company throughout his entire working life, Sharma says it would be a wonder for organisations today to have employees who would dedicate their entire working life to a single entity without asking much in return.

“He never complains about the lack of a pay raise, promotion or other perks from the management. But today’s working adults, especially the gen-Y and -Z, don’t share such values anymore,” he says.

Accendo relies heavily on technology, data and behavioural sciences in its approach to providing the right HR solutions for its clients to manage their manpower. The consultancy company is currently developing several tools, including artificial intelligence (AI) and HR management systems, for its corporate clients.

However, Accendo, which specialises in services such as talent acquisition, performance management, talent analytic and secession planning, puts the human element on the forefront of how organisations’ HR should function.

Technologies and people form the backbone of Accendo. A walk into its corporate office gives you the feel of a tech startup with open spaces and programmers in casual attire. But a reminder that people comes before technology is apparent in the form of a corporate logo, Rén – the Chinese character for ‘people’ – which dominates the entrance to its office.

 

 Talent development: Accendo’s team consists of people with various skills to support client’s human resource needs. 

New HR challenges

There is a need for a sharper and faster decision-making process, and the HR department has to be equipped to handle this. The aim is to help them to understand and grow their employees. This includes helping people who are pursuing career development opportunities at every age and are working longer than ever before.

Individual business leaders as well as business units should be looking at HR to provide support and strategic advice on everything from upskilling, motivating employees and future workforce planning to managing multiple generations of employees under one roof.

Therefore, specific solutions that are tailor-made and offer personalised learning opportunities for employees of all types will become the norm.

“Many organisations today still view manpower as a tool to maximise profit. But our mission is to promote a culture where companies develop the talents of their employees to contribute towards the growth of the company.

“We have turned down projects worth millions of ringgit because of the different viewpoint on how to develop and maximise the potential of employees. For us, our clients have to share our values, which is about organisations allowing their employees to own their career. We developed processes that would enable organisations to understand their people, and help develop their skills,” says Sharma.

 

Casual space: Accendos corporate office gives you the feel of a tech startup with open spaces and programmers in casual attire.

Prior to his return from Sydney, Australia, where he had his start in the HR industry, Sharma was exposed to how technology and data science could help in efficient decision-making processes.

One of his motivations to move back home 10 years ago to start his own business here was partly to prove a point that developing technology-based HR solutions using data science can be done successfully in Malaysia.

Founded in 2009, Accendo is majority-owned by Sharma, while his two other co-founders have minority interests in the company. The company has morphed from being a HR solutions provider to an integrated HR consulting company with their own their technology solutions.

It has since recorded an impressive growth rate and is now considering strategic partnership with either a financial or strategic investor as it seeks to scale up its operations internationally and fund its technology research and development.

Sharma says it is also looking at expanding into other Asean countries, as this region could benefit from data science.

As the profile and success of Accendo increase, the company has been attracting potential investors and is receiving an average of about one investor approach per month. It has held talks with one potential strategic investor but has not reached any agreement as yet, he says.

Accendo, however, will only consider an investor who shares the company’s values, in which human capital is considered as an asset to be developed and not as a commodity to be used in achieving corporate financial goals, Sharma adds.

 

A help mate: Amid concerns over the rise of technological unemployment, machines can help people work better. – Bloomberg

It has not seriously engaged with any party currently, but will do so if the right strategic or financial investor comes along.

The timing of a potential listing will also depend on the company’s capital requirements. Sharma says the company has been preparing for a possible listing by 2020, including making sure its financial reporting standards and company’s organisation structures are in line with that of a public company.

The majority of the company’s tech talents are local, but the company will not shy away from hiring foreign talents if necessary. Accendo currently has around 35 full-time staff members, but this will grow to over 50 by year-end as the company plans to hire more AI and other tech-related personnel, says Sharma.

Accendo is expected to record more than RM20mil of revenue this year. It has recorded an annual growth rate of 40% to 45% since it restructured its business model four years ago.

Its corporate clients include some of the most recognisable brand names in the market such as Astro image: https://cdn.thestar.com.my/Themes/img/chart.png , Maybank, KPMG, Nestlé, Bursa Malaysia and other financial institutions and large multinational corporations in Malaysia.

In the longer term, Sharma says Accendo aims to be the platform for all things related to work technologies and solutions, from HR staffing technologies to meeting specific needs and reinventing performance in the workplace for optimum efficacy and maximum success. - by C. H.Goh, The Star


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Don’t brush aside the goodwill, Mahathir !

Fruitful friendship: National carmaker Proton was given a boost when Chinese automaker Zhejiang Geely Holding Group came to its rescue last year.

https://youtu.be/7IUBipqzRaU

https://youtu.be/DDuDZu6WXD4

A graphic being circulated on social media has the Chinese flag planted all over a map of Peninsular Malaysia, suggesting that Red China has taken over our land. The political message is clear: the Najib Administration is hawking the country.

Framed against the backdrop of a heated general election, everything is fair game, with no sacred cows, but the anti-China campaign is detrimental to the country and people.

Besides reeking of racism, it will drive Chinese investors away from Malaysia if the country is perceived as being hostile.

The reality is that many other countries will roll the red carpet for China, inviting the eastern giant to pour money into their countries, but in an emotional elections campaign, rhetoric seems to have prevailed above rationale and logic.

It didn’t help that Tun Dr Mahathir Mohamad, in a recent interview with Reuters, warned that Chinese investors in Malaysia will face more scrutiny if he regained power in the upcoming election.

He reportedly said that Chinese investment was welcome if companies which set up ope­rations in Malaysia employed locals and brought in capital and technology to the country, but “this wasn’t the case now.”

“Lots of people don’t like Chinese investments,” the former prime minister claims, saying “we are for Malaysians. We want to defend the rights of Malaysians. We don’t want to sell chunks of this country to foreign companies who will develop whole towns”.

Last week, Dr Mahathir said Malaysia will stop borrowing from China, adding he would review Chinese investments if his political coalition was put in charge.

He told the Associated Press that “in the case of projects, we may have to study whether we would continue, or slow down or negotiate the terms”.

However, China is Malaysia’s top source of foreign direct investment, contributing 7% of the total RM54.7bil it received last year. That’s not a revenue stream to dismiss flippantly.

Recently, the Chinese Ambassador to Malaysia, Bai Tian, gave a firm reassurance that the republic would import more Malaysian palm oil and palm-based products, stressing there would be no cap on its imports.

He said: “We will not set any limit”, and “there will be no ‘glass ceiling’ for the import of Malaysian palm oil and related products”.

In the first six months of 2017, the total export of palm oil and palm oil products to China grew 9.8% to RM8.52bil, up from RM7.76bil a year ago.

As for the export of rubber and its products to China, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong revealed that China has overtaken the United States and the European Union to become the top export destination for Malaysia. The total export of rubber and related products to China in the first 11 months last year jumped by 76% year on year to RM7.45bil, compared to RM4.23bil in the same period in 2016.

These are real facts and figures. This is not fake news.

All these huge imports by China will directly benefit Felda settlers.

Surely we need to treat our No. 1 customer well, and not kick them in their derriere or allow ourselves to be viewed with fear and ridiculed in election rallies, which we seem to be adept at.

Palm oil is straining under the weight of huge challenges from unfriendly EU countries, which are dead against the industry.

In a move to lift oil seed prices and encou­rage domestic supply of soybean and grapeseed, even India has raised its import tax on crude and refined palm oil to its highest level in more than a decade.

As one news article reported, “over the last 30 years, China’s economic growth has been phenomenal. A country of 1.3 billion with the biggest number of poor people, has propelled more than 600 million into the middle class.

“She is adding 30 million (incidentally, Malaysia’s total population) to this number every year. Most respectable studies are predicting the Chinese economy will be bigger than the US’ before 2030. Bloomberg says this will happen in 2026.”

As commentator John Lo correctly wrote in Free Malaysia Today: “President Donald Trump’s inward-looking policy is hastening the decline of the US. The US and her allies have ruled the world and imposed their will on other countries in the name of democracy and promise of prosperity for a few hundred years.

“Very few countries have benefited, and many have suffered by adopting or submitting to the US’ will. China’s economic growth model has shown to be better than that of the West’s.

“The US’ presence in Malaysia has helped little to build up our economy. They have been pumping our oil for years but have not given us an oil industry. They have invested a lot more, I really mean a lot more, in Singapore’s oil industry.”

In June 2017, trade with China totalled RM22.75bil, up by 8.7% from RM20.92bil – and the cash registers will ring louder as China’s wealth increases.

Of course, then there’s Proton Holdings, which registered losses of up to RM1bil in 2017. No one dared touch the national car maker, which, to put it politely, was well past the ICU stage. Even a defibrillator was useless.

For decades, Malaysians had to pay so much for imported cars, having to put up with protectionist measures and the obligatory national pride. No one was prepared to tell Dr Mahathir that the business model wasn’t workable anymore.

Then, China stepped in. Chinese automaker Zhejiang Geely Holding Group came to the rescue and took up a 49% stake in Proton. Geely is also the owner of Volvo, Boyue and the London Taxi Company, which produces the city’s iconic cab.

After Proton was sold to Geely, Dr Mahathir said he was saddened, but in 2014, it was he who travelled to China to meet the manufacturer to seek a Proton partnership, a bid which ultimately fell through.

On the tourism front, Malaysia is expected to hit the four million mark for inbound tourists from China this year. This is a trickle from the Chinese point of view, but with a fast-expanding middle class, the figures will surely spike.

One report said that Chinese investments in Malaysia “have continued to be on an uptrend despite the stringent capital control introduced by the Chinese government last year, signalling China’s commitment to pursue long-term investments in Malaysia. Among the projects that have seen significant Chinese investments in recent years are the Forest City in Iskandar Malaysia (RM405bil), the East Coast Rail Link (RM55bil) and Melaka Gateway (RM29bil).

“While the outlook for China’s ODI (overseas direct investments) appears to have dimmed, Malaysia has become the fourth largest recipient of China’s ODI globally this year.

“In the latest China Going Global Investment Index 2017 report by the Economist Intelligence Unit, Malaysia has jumped to fourth position in 2017, compared with 20th in 2015.”

“The significant improvement is mainly a result of Malaysia’s important participation in BRI-related projects, apart from the welcoming attitude towards Chinese investment.”

The stakes are simply too high for politicians to turn China into a bogeyman and instil fear in the voters’ minds, particularly in the Malay heartland.

“I am willing to take a bet that should the Opposition take over the government, they will run to Beijing first for investment. The reason is simple, the US will not invest much here. Europe is down.

“Japan has been in the doldrums for more than 20 years. They need investments more than Malaysia does. It is not wise to run down China’s investment for the sake of political campaigning,” Lo wrote.

He added that “the proper way to address any issue on China’s investments is not to blame the Chinese. They have come because the Government has lobbied hard for China’s investments.

“If the Opposition has any reservations, they should direct their criticism at the Government and not implicate China. To say that China is giving kickbacks is in bad taste and shows insensitivity and crudeness.”

Another favourite China-bashing target concerns Johor’s Forest City project. Claims abound about the loss of sovereignty when, in fact, the properties were constructed on reclaimed land, and not on existing plots in the state. The sprawling property will be built on land that never existed prior.

The developer, Country Garden Holdings, isn’t a fly by night operation. Instead, it is China’s sixth most successful property developer in terms of sales, and has a market capitalisation of US$61.87bil (RM241bil). The owner, Yang Guoqiang, has family assets worth 45.5 billion yuan (RM28bil).

Another bit of nonsense implicating China is the claim that the Government had granted tax exemption to federal projects, such as the East Coast Rail Link (ECRL) built by the Chinese, a move designed to anger the Malays. But during Dr Mahathir’s time, under the Sales and Services Tax (SST) system in the 1980s, exemption was given to several mega projects, including the Kuala Lumpur International Airport (KLIA), Express Rail Link, Smart Tunnel, Bukit Jalil Stadium, as well as to independent power producers.

If GST relief was not offered to China Communications Construction (CCC) Sdn Bhd for the ECRL project, it would have cost a lot more, thus increasing the country’s debt and incurring huge losses.

But leading up to the elections, rhyme or reason get thrown out the window, and facts and figures take a back seat. For some people, in their anger, truths are brushed aside at the expense of damaging the goodwill extended by China.

Those who have dealt with China will tell you they value friendship. They remember their friends – and their foes, too.

Source: Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

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