China-US Dynamics | Huawei seeks to establish a chip factory without US technology and launch a digital RMB phone, Xi Jinping: Actively participate in digital currency

Huawei, the world's largest telecommunications equipment supplier and China's largest smartphone manufacturer, has faced bans from the United States citing "national security" concerns, prohibiting the export of related U.S. technology and equipment to Huawei, and accusing Huawei of intellectual property theft. Some countries internationally have also banned Huawei from participating in the foundational infrastructure of 5G development for security reasons. The various policies and measures against Huawei are collectively referred to as the Huawei bans.

Financial Times: Huawei to Build Chip Plant Without U.S. Technology

On November 1st, the Financial Times reported that Huawei is set to construct a chip plant in Shanghai that will be free from U.S. technology to circumvent American sanctions.

It is said that the factory will be operated by a chip research center supported by the Shanghai municipal government. Initially, it will produce low-end 45-nanometer chips mainly for industrial use. Huawei plans to manufacture 28-nanometer IoT chips by the end of next year, and 20-nanometer chips for 5G communication needs in the second half of 2022.

Reportedly, Huawei has been "de-Americanizing" by investing in 17 Chinese tech companies since August last year, establishing its own supply chain. However, insiders commented that this move has limited impact on its smartphone business.

Huawei's New Phone to Feature Built-in Digital RMB Wallet

On October 30th, Huawei Weibo announced that the Mate40 phone will support a hardware wallet for digital RMB, boasting dual offline payment support and controllable anonymous protection.

According to last week's reports, Mu Changchun, the director of the Digital Currency Research Institute of the People's Bank of China, stated that digital RMB requires centralized management for monitoring and analyzing its circulation. Therefore, the concept of a hardware wallet in Mate40 may differ from that of a cryptocurrency hardware wallet.

Xi Jinping Instructs Active Participation in Digital Currency

Chinese President Xi Jinping, in an article released on October 31st titled "Several Major Issues in the Mid- to Long-Term Economic and Social Development Strategy of the Country," expressed that China leads in online economy globally and must accelerate the development of digital economy. He also emphasized the need to actively participate in the formulation of international rules for digital currency and digital taxation to gain new competitive advantages.