Oracle to slash 1,600 jobs in China; armyworm plague; and used Chinese cars for Africa

Access Archive

Dear Access member,

The latest round of trade talks between China and the U.S. starts this evening in Washington D.C., and the outcome is as unpredictable as ever.

There’s plenty of other news that won’t grab the headlines today in the general interest media, even though they should. We’ve included them at the top of today’s email.

As always, send me feedback anytime at jeremy@supchina.com, or write to editors@supchina.com to reach our whole editorial team.

—Jeremy Goldkorn, Editor-in-Chief


1. Oracle lays off 900 staff in China, more cuts coming

U.S. computer technology giant Oracle is shuttering its entire China Research and Development Center (CDC). More than 900 employees have already been laid off, and the second round of job cuts is expected to happen in July, according to reports circulating on the Chinese internet.

  • The layoff notice was made in an all-hands meeting on May 7, according to people familiar with the matter. The employees affected by the first round of layoffs were told to sign their releases before May 22 to claim full severance packages. After the complete closure of CDC’s Beijing office, Oracle’s employees in Nanjing, Dalian, and Shenzhen are on the line to lose their jobs. By slashing its entire staff of CDC, Oracle is planning to cut over 1,600 jobs in China.

  • Rumors about potential layoffs started floating around since the end of last year, when CDC stopped hiring new people, according to the 21st Century Business Herald (in Chinese).

  • The reasons for the staff cuts are not clear. The company said the layoffs were because of major restructuring of its business, but some workers who protested in front of their former offices on May 7 held signs up that read: “We are against political layoffs. Keep politics away from technology!”

  • Nationalistic rag Global Times also cited “industry insiders” who said “political factors” were part of Oracle’s decision.

  • Oracle’s co-founder Larry Ellison last October gave an interview to Fox News in which he describes China as a big threat to the U.S.

For a more detailed article on this story, including more on Chinese responses to the news, please click through to SupChina.

—Jiayun Feng

2. Armyworms invade, as China’s farms reel from swine fever

While China is still coping with the African swine fever epizootic, the U.S. Department of Agriculture warns of a new threat to China’s farms in a report titled Voracious fall armyworm invades south China. The information in it is broadly consistent with this Chinese-language report from the Beijing News.

  • Fall armyworms are the larvae of Spodoptera frugiperda, a species of moth. They gorge on a variety of important crops, including corn, soybeans, and rice.

  • The outbreak was first detected in China in January 2019, and has now “spread across China’s southern border and currently impacts about 8,500 hectares (127,000 mu) of grain production in Yunnan, Guangxi, Guangdong, Guizhou, Hunan, and Hainan provinces.” The Beijing News report linked above says the pest has been found in 11 provinces and is officially a “local pest disaster” (局部虫灾 júbù chóngzāi).

  • An official emergency action plan is in place; here are the outlines (in Chinese). Measures include biological and chemical pesticides, and weeding to get rid of plants that encourage Armyworms.

  • But the problem is not under control: “Experts report that there is a high probability that the pest will spread across all of China’s grain production area within the next 12 months,” according to the U.S. Department of Agriculture.

  • Meanwhile, “Chinese consumer inflation rose to a six-month high in April, with the cost of pork jumping as the country battles with a widespread outbreak of African swine fever, while producer prices rose at a faster pace than forecast,” reports the Financial Times (paywall):

The official consumer price index rose 2.5 percent year-on-year April, according to the National Bureau of Statistics, its highest reading since October and accelerating from the 2.3 percent increase in the previous month… Pork prices, which are heavily weighted in the gauge’s basket of goods, rose 14.4 percent from 5.1 percent in the previous month.

  • If you’re searching for further information in Chinese, fall armyworms are variously called cǎo dì tān yè é 草地贪夜蛾, nián chóng 黏虫, and tìzhī chóng 剃枝虫.

3. Chinese used cars for Africa

One of the more interesting commentators on African affairs on Twitter is the Nigerian Onye Nkuzi. Today he tweeted:

Most significant news this week is the entry of the Chinese into the used car market in Africa — previously dominated by US and “Belgium.”

They will utterly annihilate all competition.

Nkuzi was reacting to the news earlier this week that China’s Ministry of Commerce has started allowing exports of used cars. Reuters says that the move is the “latest bid to prop up the auto sector.” Sales of new cars in China have been declining for nearly a year.

The used-car market in Africa is already enormous. With a few exceptions — such as South Africa, which has a thriving auto manufacturing sector — most African buy imported cars, and many of them are used. The secondhand-car market is so big that Volkswagen, BMW, Toyota, Nissan, and other car companies recently “joined forces to lobby governments for steps that would reduce the imports,” according to Reuters.

—Jeremy Goldkorn

4. ‘I have no idea what’s going to happen’ — Trump on trade talks

Chinese Vice Premier Liú Hè 刘鹤 arrived in Washington today, for what SCMP says is the 11th round of trade talks since the trade war began.

By the time you read this, everything may have changed, but this is a roundup of what’s happening in the hours leading up to tariffs again ratcheting up on both sides:

  • “I have no idea what’s going to happen,” Trump said, though he was pleased with the “very beautiful letter from President Xi” that he received, the SCMP reported.

  • Negotiations began at 5 p.m., including a dinner between Liu He and U.S. Trade Representative Robert Lighthizer, and tariffs hit a minute after midnight tonight.

  • Foreigners are “dumping Chinese stocks” at the fastest rate since late 2016 in anticipation of the tariffs, Bloomberg reports (porous paywall).

  • China Mobile was blocked from the U.S. phone service market by a unanimous 5-0 vote by the Federal Communications Commission, the SCMP reports.

Three other links to take a look at today:

  • Trump could raise tariffs on China. Here’s how China could respond. / NYT (porous paywall)
    “China’s obvious choice would be higher, and possibly wider, tariffs. It could raise the retaliatory tariffs that it imposed on American-made goods last autumn… China could also revive import barriers specifically aimed at some of the states that supported Mr. Trump in the 2016 election.”
    “Another option is for the Chinese government to encourage the country’s consumers to boycott American products.”
    And then there are even harsher options: Delays on imports and other non-tariff hindrances on business (the infamous “qualitative measures” implemented earlier in the trade war), adjustments to supply chains that make life painful for American businesses, or depreciation of the Chinese currency.

  • China hardens trade stance as talks enter new phase / WSJ (paywall)

The new hard line taken by China in trade talks [see SupChina summary] — surprising the White House and threatening to derail negotiations — came after Beijing interpreted recent statements and actions by President Trump as a sign the U.S. was ready to make concessions, said people familiar with the thinking of the Chinese side…

In particular, these people said, Mr. Trump’s hectoring of Federal Reserve Chairman Jerome Powell [on Twitter] to cut interest rates was seen in Beijing as evidence that the president thought the U.S. economy was more fragile than he claimed.

As most of China’s media fell into collective silence Monday following Trump’s threat to escalate the trade war, Taoran Notes [陶然笔记 táorán bǐjì], a once obscure account on Tencent Holdings’ WeChat platform, somehow escaped the intensified censorship. It became one of the few voices offering an opinion on China’s negotiation strategy.

In a 1,500-character commentary published Monday, Taoran warned the U.S. not to fantasize about China making concessions that will damage its own interests. The comment was later re-published by the WeChat account of People’s Daily, a rare move for the official newspaper of the Communist Party.

—Lucas Niewenhuis

—–

Our whole team really appreciates your support as Access members. Please chat with us on our Slack channel or contact me anytime at jeremy@supchina.com.

—Jeremy Goldkorn, Editor-in-Chief


BUSINESS AND TECHNOLOGY:

SCIENCE, HEALTH, AND THE ENVIRONMENT:

Beijing and its environs are touted as a particular success story in terms of improved air quality. China is also in the vanguard developing electric vehicles and battery technology… But China also remains the world’s biggest polluter in terms of carbon dioxide emissions, and increased both coal power generation and coal mining capacity last year; its plastic-waste ban has played havoc in some less-developed nations; and its Belt and Road Initiative is a double-edged sword.

POLITICS AND CURRENT AFFAIRS:

  • Exit ban on Americans — Liu siblings still trapped in China
    American siblings trapped in China make public plea for help: “We wake up every morning terrified” / CBS
    “Two American siblings trapped in China are making a public plea for help.” Their father, Liú Chāngmíng 刘昌明, is a former executive at the state-owned Bank of Communications, and a key suspect in a $1.4 billion fraud and corruption case. He is one of China’s most wanted fugitives, but has been at large since 2007. Here is the context, largely drawn from this 2018 New York Times story (porous paywall) by crack reporters Edward Wong and Michael Forsythe.

    • Liu’s wife and two twentysomething children, American citizens, had been living in the U.S., apparently in a great deal of comfort. That ended in June when they flew back to China to visit an ailing grandfather on Hainan Island.

    • The government detained the Liu children and their mother, Sandra Han, and then slapped an exit ban on them. “By holding the family hostage…the police are trying to force the siblings’ father to return to China to face criminal charges,” according to the Times, even though the Liu children say their father cut off contact with his family in 2012.

    • The police have assured Liu’s family that they are not being investigated for any crime — they’re just bait for Liu Changming.

    • “The Chinese Foreign Ministry defended the holding of the three family members,” reported the Times: “The people you mentioned all own legal and valid identity documents as Chinese citizens,” said a spokesperson. “Because they are suspected of economic crimes, they are restricted from exiting the country by the Chinese police in accordance with the law.”

    • The Global Times assured us that it is completely normal to hold the families of criminal suspects as hostages — see Interrogation and investigation over families of fugitive suspects involved in serious crimes a normal practice in China: experts.

  • New Belt and Road tracker tool
    Trace China’s growing economic influence / Council on Foreign Relations
    “The CFR Belt and Road Tracker aids analysis of BRI by showing how it has changed countries’ bilateral economic relationships with China over time. The tracker focuses on three Belt and Road indicators — imports from China, foreign direct investment (FDI) from China, and external debt to China — for sixty-seven participant countries.”

  • Huawei CFO and Canadians in trouble in China
    Canadian sentenced to death in China protests innocence at lower-profile appeal hearing / Globe and Mail
    “A Canadian man sentenced to death in China for drug trafficking protested his innocence Thursday during a four-hour appeal hearing that ended without a verdict, in the midst of a diplomatic crisis between Beijing and Ottawa that has exacted a heavy human and economic toll.”
    No more hoodies and yoga pants for Huawei’s Meng Wanzhou. Now she looks like she means business / SCMP
    “It’s a perilous thing, to dwell on the way someone appears in court.But there is no getting away from it. Meng Wanzhou looked different when she arrived for her latest hearing in Vancouver on Wednesday. She dressed differently. She talked differently. Heck, she even walked differently.”
    Huawei CFO Meng arrives in Canada court for pre-extradition hearing / Reuters

  • Repression of civil society
    Chinese rights lawyer demoted from teaching post at Shandong university / Radio Free Asia
    “Rights lawyer Liu Shuqing, who also works at a public interest law firm, was told to stop teaching classes at the Shandong Qilu University of Technology last year.”
    Tibetan man, aunt sentenced for Panchen Lama protest in Sichuan / Radio Free Asia
    “Wangchen, 20, who was arrested on April 29, was sentenced by the Sershul County People’s Court in Sichuan’s Kardze (in Chinese, Ganzi) prefecture to a term of four years and six months for leading ‘a conspicuous protest in public against the law of the land,’ a Tibetan living in India told RFA.”
    Tiananmen Square: China steps up curbs on activists for 30th anniversary / Guardian
    China detains social workers in deepening crackdown / FT (paywall)

Police on Wednesday arrived unannounced at the offices of Hope college, a community centre in the southern city of Guangzhou that helps migrants attending vocational schools and detained social worker Liang Zicun, the group’s founder. They also took away documents, computers, hard disks.

Similar raids were carried out at the offices and homes of two more social workers, Li Changjiang in Shenzhen and Li Dajun in Beijing, both of whom were detained, according to the friends and colleagues of the three.

Despite the Communists’ efforts to portray Taiwanese democracy as a raucous farce, the island’s orderly political evolution has inspired some people in China. Even so, in recent years, as cross-strait economic links have boomed, China has allowed many thousands of students to experience the island’s freedoms for themselves, just as it had permitted students to head to universities in the West. In 2018 nearly 30,000 Chinese students were enrolled at Taiwanese universities, more than ten times as many as a decade earlier.

“The police station was full of Uyghurs,” Abduwayit says. “All of them were there to give blood samples.”

Finally, Abduwayit was made to give a voice sample to the police. “They gave me a newspaper to read aloud for one minute. It was a story about a traffic accident, and I had to read it three times. They thought I was faking a low voice.”

The voice-recognition program was powered by Chinese artificial intelligence giant iFlytek, which claims a 70 percent share of China’s speech recognition industry.

  • Leaking secrets of state financial policies
    Chinese bank employee convicted of ‘leaking state secrets’ after sharing policy draft on WeChat / SCMP
    “The defendant, identified only by her family name Li, was a 32-year-old employee of Langfang Bank who was on a secondment to the China Banking Regulatory Commission (CBRC), which gave her the access to the draft proposal. In February 2017, Li took 36 photos of the draft and sent them to her colleague surnamed Cui at Langfang Bank via Chinese messaging service WeChat.”

  • A Chinese emir in Nigeria
    Chinese engineer made Nigerian tribal chief for role in development / SCMP
    “Kong Tao, 34, was granted the title by the Emir of Jiwa district in Nigeria’s capital, Abuja, last month, nine years after he was sent by his employer to the city as an assistant engineer responsible for a railway project, Dahe Daily reported on Sunday.”

SOCIETY AND CULTURE:


SINICA PODCAST NETWORK

Sinica Podcast: Howard French on how China’s past shapes its present ambitions

On this week’s show, recorded live in New York on April 3, Kaiser and Jeremy have a wide-ranging chat with former New York Times China correspondent Howard French, now a professor at Columbia University’s School of Journalism. We talk about his book Everything Under the Heavens and China’s ambitions and anxieties in the world today.