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Huawei says 2023 net profit doubled despite US crackdown

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China’s Huawei Technologies said on Friday that its net profit more than doubled in 2023, with revenue rising across all of its businesses for the year.

Huawei’s net profit of 87 billion yuan ($12 billion) was the highest in five years, excluding 2021 when it recorded an undisclosed amount of profit from the spin-off of its low-cost Honor smartphone line.

The figures are a strong sign that the company is able to withstand constant pressure from Washington, including strict export controls.

Huawei’s resurgence, particularly in the domestic smartphone market, has put pressure on its competitors, especially Apple.

Huawei, once the world’s second-largest smartphone maker, said revenue from its sanctions-hit consumer electronics business rose 17.3 per cent year-on-year to 251.5 billion yuan last year, and that momentum continued in the first quarter of this year.

Huawei also said its HarmonyOS operating system is now installed on more than 800 million devices across all platforms, up from about 330 million devices in the same period last year. The company began focusing on developing its response to Google’s Android operating system after Washington cut off its access to American technology. By comparison, there are about 3.9 billion active smartphones running the Android operating system, the world’s largest operating system, according to BusinessofApps.

Chip competition

Huawei’s strong annual performance followed the launch of its flagship Mate 60 Pro series phone last year. The company was able to use advanced 7-nanometre chip technology in the high-end model despite US export controls restricting its access to the world’s top chipmakers.

As Huawei’s success is seen as a victory in China’s technology war against the US, Washington is considering further tightening export controls. But Huawei still relies on US chipmaker Qualcomm to supply the 4G mobile chips for most of its smartphones.

Runar Bjorhovde, an analyst at Canalys, said Huawei had made a strong comeback in China in the second half of 2023, rising to the top five. Speaking to Nikkei Asia, the analyst said: “It carried a strong momentum into the early months of 2024. But this resurgence is putting pressure on other vendors in China’s already hyper-competitive environment.”

Ninety-four per cent of Huawei’s smartphone shipments remained in China in 2023.

“Apple is feeling the pressure of Huawei’s resurgence the most. Recently, Apple has responded with initiatives to consolidate its position in the market by increasing its investment in China, including significant spending on joint marketing campaigns, a new Apple Store and a visit by CEO Tim Cook.”

‘We managed to grow despite challenges’

Huawei’s overall performance in 2023 was “in line” with forecasts, Huawei’s rotating chairman Ken Hu said on Friday, adding that the company had managed to grow despite “successive challenges”.

The company’s revenue rose 9.6 per cent to 704.2 billion yuan in fiscal 2023 from 642.33 billion yuan in fiscal 2022. The company’s research and development expenditure reached another historic high of 164.7 billion yuan, equivalent to about 23.4% of its total revenue. Over the past decade, the company has spent a total of 1.11 trillion yuan on R&D.

The company’s cloud business has seen massive growth, driven by explosive demand for generative AI technologies. By 2023, the division’s revenue will have increased by 21.9 per cent year-on-year to 55.3 billion yuan.

China’s voice recognition AI champion iFlytek and the European Centre for Medium-Range Weather Forecasting are among the users of Huawei’s Pangu training model.

Huawei’s ICT infrastructure business, which includes the carrier and enterprise businesses, remained the company’s largest revenue pillar, with revenue up 2.3 per cent to 362 billion yuan.

Huawei, once again the world’s largest telecom equipment vendor, began deploying 5.5G wireless network technologies at home and abroad, including in Turkey, Brazil and the Middle East. According to Huawei, some telecom operators in Finland and Germany have also completed verification of the technology, a crucial step before deployment.

Revenue from the company’s nascent automotive electronics business more than doubled to 4.7 billion yuan last year, compared to 2022. It has partnered with many Chinese automakers, including Baic Group and Seres, but currently only serves the domestic market.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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