The Cyber Administration of China (CAC) uncovered on Sunday a draft rule requiring tech firms listing in Hong Kong Stock Exchange (HKSE) to succumb to a cyber security review for share sales jeopardizing national security.
Beijing’s watchdog has played its card in its overdue battle with its tech sector, with a maneuver that will endanger the recently risen shift in power in Chinese tech groups.
CAC, China’s most vigorous data regulatory authority, drafted its rules to signify Beijing’s determination to hinder its tech firm’s jurisdiction on its territory. Beijing is examining its every move to halt the hastened progression of digital supremacy from companies.
The cyber security checks will weaponize authoritarian power with the means needed to introduce a new data protection protocol, delivering the CAC with the supreme command to monitor tech companies’ approach towards safeguarding users’ data.
In parallel, the draft will demand firms with a massive sum of data concerned with China’s national security, economy, or public interests to honor the submission of a cyber security review in the event of merger pursuance or company restructure.
In this case, internet companies aiming to create overseas headquarters, operational centers, or research and development facilities will have to answer Beijing’s watchdogs before initiating any move, according to the CAC’s draft.
The timing of the draft could be perceived as impeccable timing as it came a day prior to the Beijing Stock Exchange opening, a recently issued market to obtain funds for innovative modest start-ups, as an attempt for Chinese authorities to empower firms to adopt local exchange markets.
In July, the CAC announced that it will further intensify its regulatory grip on firms aiming to list in overseas markets, specifically those holding data exceeding one million users.
This came as a follow-up to the administrations probing investigation into the ride-hailing app, Didi Chuxing, for probable data breach, two days following its groundbreaking $4.4 billion initial public offerings (IPO) on the New York Stock Exchange last June.
The Financial Times calculates the country’s move of issuing a new exchange market as its latest assertive act to birth homegrown tech chiefs and extinguish the remarkable indolence on foreign markets.
Beijing’s heightened push to further diminish the West’s sovereignty on the global tech market has reached its domestic firms. A move, necessary to empower China’s sector as a whole by embracing a harsher yet emboldened tactic to become homegrown dependent before unleashing its mightiness on the global tech market.
Ericsson connects NOC for DNB’s 5G network in Malaysia
Ericsson launched a network operations center (NOC) in Malaysia devoted to Digital Nasional Bhd’s (DNB) 5G network and its key performance indicators. DNB is Malaysia’s single wholesale 5G network operator.
The company said in a press release that “The NOC is part of Ericsson’s Managed Services offering for the DNB 5G network and entails managing the performance of the 5G network end to end. Powered by advanced analytics and machine learning algorithms, the Ericsson Operations Engine predicts potential network issues caused by hardware, software, or external factors.
It automates nearly one million network commands every day and manages alarms to prevent network issues before they happen.
According to the press release from the Swedish multinational networking and telecommunications company, the NOC is part of its Managed Services offering for the DNB 5G network. It entails managing the performance of the network from end to end.
“Powered by advanced analytics and machine learning algorithms, the Ericsson Operations Engine predicts potential network issues caused by hardware, software, or external factors,” it said.
David Hägerbro, Head of Ericsson Malaysia, Sri Lanka & Bangladesh, said: “The dedicated DNB 5G NOC is an example of our commitment to deliver a cost-efficient, world-class 5G experience for the people and businesses of Malaysia. The NOC will support the national 5G infrastructure by providing proactive, fast detection and isolation of network faults, monitor security events or threats and reduce response and rectification time.”
He added: “Powered by the Ericsson Operations Engine, the Ericsson NOC is capable of maintaining the most complex and large-scale 5G networks round the clock and will serve as an assurance to the MNOs using the DNB 5G network regarding the performance and health of the DNB network. Setting up the NOC in Malaysia has also opened the opportunity for more Malaysians to be hired and acquire skills in the latest technologies.”
In addition, it serves as the first point of contact for all Mobile Network Operators (MNOs) for technical issues, customer complaints, network performance, quality-related matters, billing, and charging-related issues.
Ericsson proved capabilities in managing and operating multi-technology networks, with 200 global managed services contracts, including qualifications in Malaysia. Ericsson has been managing Digi’s mobile network since 2018 and has managed services for U Mobile billing operations since 2012.
Explainer-The U.S. export rule that hammered Huawei teed up to hit Russia
The Biden administration is readying a U.S. export rule used against Chinese telecoms equipment maker Huawei that could curb Russia’s access to global electronics supplies if President Vladimir Putin decides to invade Ukraine.
While it is unclear how the rule could impact Russia, the restrictions hobbled Huawei’s smartphone business. Last month, the company said it expected 2021 revenue to have declined nearly 30% and predicted continued challenges this year.
WHAT IS THE RESTRICTION?
The Foreign Direct Product Rule, as it is called, may be adapted to halt Russia’s ability to import smartphones, key aircraft and automobile components, Reuters reported last month.
The administration is considering restricting chips and products with integrated circuits bound for Russia, a senior official said, imposing its authority over items made abroad if they are designed with U.S. software or technology, or produced using U.S. equipment.
WHAT EXPORTS TO RUSSIA COULD BE IMPACTED?
The restrictions could apply to critical industrial sectors like artificial intelligence, maritime, defense, and civil aviation, the official said, and could also be imposed more broadly, to include consumer electronics.
The scope of the rule against Russia has not been set but White House National Security Council officials have warned executives from the Semiconductor Industry Association, a chip lobbying group, of possible unprecedented actions, as Reuters reported last week.
It is unclear whether the rule could have the kind of devastating effect on Russia that it has had on Huawei.
“A strict imposition of the Foreign Direct Product rule would significantly affect trade and output in Russia, though it’s hard to say by how much,” said Jeffrey Schott, an expert on international trade policy and economic sanctions at the Peterson Institute for International Economics.
HOW DID IT IMPACT HUAWEI?
The Foreign Direct Product Rule now restricts both U.S. and non-U.S. companies from shipping items to Huawei that are the direct product of U.S. technology or software. Such shipments can only be made with a U.S. license.
The rule was added to the curbs on Huawei after the telecommunications equipment maker was placed on an export control blacklist known as the “entity list” in 2019 and it did not stop the global flow of chips to the company.
The initial listing affected U.S.-made goods and some limited items made abroad with U.S. technology but did not block overseas shipments to Huawei from companies such as Taiwan’s TSMC, the world’s largest contract chipmaker.
So in 2020, the United States added the Foreign Direct Product Rule to expand its authority to stop shipments of foreign-produced items to Huawei. Companies like TSMC that use U.S. chipmaking equipment are required to obtain U.S. licenses before supplying Huawei and licenses for sophisticated chips are denied.
Toshiba halts operations at chip plant after quake
Toshiba Corp said on Monday that it had suspended operations at a plant in Oita, southern Japan that makes semiconductors used in cars and industrial machinery, after a strong earthquake hit the area at the weekend.
Some equipment had been damaged and the company was still analysing the impact on production, Toshiba said in a statement.
The plant makes system LSI chips, around 60% of which are sold to carmakers and industrial machinery makers, a spokesperson for Toshiba Electronic Devices & Storage Corp said.
Toshiba does not yet know when it can restart production and will likely provide an update on Tuesday, he added.
The company also makes system LSI chips at a factory in northern Japan, with other domestic producers, such as Renesas Electronics, also building the devices.
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